Ar2010

annual report 2010
Contents Key Financial Figures 01 Board of Directors 14

Group Financial Highlights 02 Key Management 17
Significant Events 04 Financial Review 20
Geographical Presence 06 Operating Review 23
Message from Corporate Social Responsibility 32
Group President & CEO 10 Investor Relations 34
Hyflux Ltd Annual Report 2010
Key
Financial Figures
(For year ended 31 December 2010)
REVENUE PROFIT BEFORE TAX

9% 21%
S$569.7 million S$100.5 million
PROFIT ATTRIBUTABLE EARNINGS PER SHARE

TO SHAREHOLDERS
18% 11%
S$88.5 million 10.52 Singapore cents
NET ASSET VALUE PER SHARE CASH POSITION

27% 33%
58.60 Singapore cents S$222.3 million
EBITDA & PBT

(S$ million)
141
2010
101
105
2009
83
85
2008
70
55
2007
39
34
2006
20
57
2005
50
33
2004
29
22
EBITDA and PBT
2003 compounded annual growth rate
20
2002
14
12
33% and 31%
11
respectively from 2001 - 2010
2001
9
0 20 40 60 80 100 120 140
EBITDA PBT
Note:
EBITDA – Earnings Before Interest, Taxes, Depreciation and Amortisation
PBT – Profit Before Tax 1
Group
Financial Highlights
KEY FINANCIAL DATA

(For year ended 31 December)
S$'000 2010 2009 2008 2007 2006
Revenue 569,737 524,814 554,224 192,786 142,379

Profit Before Tax 100,473 82,972 70,375 38,693 20,178
Profit After Tax 88,885 74,291 62,218 36,645 15,357
Profit Attributable to Shareholders 88,510 75,036 59,036 32,949 15,473
Shareholders' Equity 502,501 365,244 297,547 239,772 199,601

Total Assets 1,359,702 1,072,563 846,555 549,500 443,398
Net Assets 514,507 393,402 307,899 247,067 218,066
Net Asset Value per Share (cents) (1) (2) 58.60 46.10 37.80 30.50 25.70
Earnings per Share (cents) (2) 10.52 9.51 7.50 4.21 2.00
Dividend per Share (cents) (2) 4.17 3.33 2.29 1.26 0.90
Return on Revenue (%) 15.5 14.3 10.7 17.1 10.9

Return on Equity (%) 17.6 20.5 19.8 13.7 7.8
(1)
Net Asset Value excludes non-controlling interests
(2)
Restated to include the December 2010 issue of one bonus share for every two existing ordinary shares
GROUP REVENUE BY COUNTRY & REGION

(S$ million)
75.1
2010 150.8
343.8
13.0
2009 181.3
330.5
16.5
2008 314.7
223.0
27.6
2007 157.0
8.2
37.6
2006 104.8
0.0
0 50 100 150 200 250 300 350 400
Singapore and Others China MENA

2
PROFIT ATTRIBUTABLE TO SHAREHOLDERS NET ASSET VALUE PER SHARE (1) (2)
(S$ million) (Singapore Cents)
2010 88.5 2010 58.60
2009 75.0 2009 46.10
2008 59.0 2008 37.80
2007 32.9 2007 30.50
2006 15.5 2006 25.70
0 20 40 60 80 100 0 10.00 20.00 30.00 40.00 50.00 60.00 70.00
EARNINGS PER SHARE (2) DIVIDEND PER SHARE (2)

(Singapore Cents) (Singapore Cents)
2010 10.52 2010 4.17
2009 9.51 2009 3.33
2008 7.50 2008 2.29
2007 4.21 2007 1.26
2006 2.00 2006 0.90
0.00 2.00 4.00 6.00 8.00 10.00 12.00 0.0 1.00 2.00 3.00 4.00 5.00
RETURN ON EQUITY
(%)
2010 17.6
2009 20.5
2008 19.8
2007 13.7
2006 7.8
0.0 5.0 10.0 15.0 20.0 25.0
(1)
Net Asset Value excludes non-controlling interests
(2)
3
Significant
Events
2011 March • Hyflux was named “preferred bidder” for Singapore’s second and
largest seawater desalination plant by PUB, the national water agency.
Hyflux will design, build, own and operate the 318,500 m3/day plant.
The project is worth approximately S$890 million, and is Hyflux's
largest contract to date.
• Hyflux and Mizuho Corporate Bank signed a memorandum of
understanding to collaborate on global water business development
and explore various financing structures for water projects.
February • Hyflux was awarded a concession by the People’s Government of Zunyi

City to develop a wastewater treatment plant to treat up to 150,000 m3/day
of domestic wastewater for Zunyi City in Guizhou province, China. Hyflux
will invest approximately RMB200 million (US$31 million).
January • Hyflux signed three concession agreements with the People’s

Government of Chongqing City, Hechuan District to develop two
20,000 m3/day wastewater treatment plants and a 50,000 m3/day potable
water treatment plant at the Hechuan Industrial Park in Chongqing City,
China. Hyflux will invest approximately US$45 million.
2010 December • Galaxy NewSpring successfully completed its compulsory acquisition

and delisting of Hyflux Water Trust (HWT).
• Hyflux launched HyfluxShop, Asia’s first online store dedicated
to a wide range of quality industrial products and systems for the
water industry.
November • Hyflux secured a US$100 million engineering, procurement and

construction contract from the General People’s Committee for
Utilities of the Great Socialist People's Libyan Arab Jamahiriya
to build a 40,000 m3/day desalination facility in Tobruk, Libya.
Joint venture signing ceremony with Mitsui & Co Hyflux booth at Singapore International Water Week 2010
4
October • Hyflux was conferred Water Technology Company of the Year

at the Frost & Sullivan Asia Pacific Best Practices Awards 2010.
• The Securities Investors Association of Singapore (SIAS) named
Hyflux the Runner-Up (Services/Utilities/Agriculture category) for
the Most Transparent Company Award 2010.
August • Hyflux and Mitsui & Co signed a joint venture agreement to develop water
projects in China. The 50/50 joint venture company, Galaxy NewSpring,
proposed a voluntary delisting of HWT and an exit offer to acquire all
remaining HWT units not controlled by Hyflux.
June • Hyflux launched its new generation of ultrafiltration membranes, the

Kristal 2000, and the Membrane Evaluation System for hollow fibre
membranes at the Singapore International Water Week.
April • Hyflux won three awards at the Global Water Awards 2010 organised
by Global Water Intelligence: Desalination Company of the Year
(Distinction), Desalination Deal of the Year (Highly Commended)
for the world’s largest membrane-based desalination plant, Magtaa
Desalination Plant in Algeria, and Desalination Plant of the Year (Highly
Commended) for Tianjin Dagang Desalination Plant in China.
March • Hyflux was awarded a S$43.8 million contract by TP Utilities,

a wholly-owned unit of Tuas Power, to undertake the engineering,
procurement and construction work for stage one of the 182,000 m3/day
Tembusu Seawater Desalination Plant on Jurong Island, Singapore.
February • Hyflux secured a S$35.8 million contract from PUB to design,

construct, test and commission a 68,000 m3/day membrane bioreactor
plant at Jurong Water Reclamation Plant. The membrane bioreactor
plant will be Singapore’s largest.
Queen Noor of Jordan presents the Desalination Company of the Year Hyflux wins Water Technology Company of the Year at the
(Distinction) Award to Hyflux at the Global Water Awards 2010 Frost & Sullivan Asia Pacific Best Practices Awards 2010
5
Geographical
Presence
More than
1000 membrane products

and systems installed
in more than
400
locations worldwide
Landmark projects
World's Largest SWRO Desalination Plant
Magtaa Desalination Plant
China's Largest SWRO Desalination Plant

Tianjin Dagang Desalination Plant
Singapore's First SWRO Desalination Plant

SingSpring Desalination Plant
Singapore's First NEWater Plant

Bedok NEWater Plant
Singapore's Largest Membrane Bioreactor Plant

Jurong Membrane Bioreactor
Note:
SWRO – Seawater reverse osmosis
6
Netherlands
France
China
Algeria
India
Malaysia
Singapore
Our offices
Landmark plants
Membrane installations
7
8
To
inspire
greater
possibilities
9
Message from
Group President & CEO
10
“To take the Group forward into the next decade, we will continue to
expand our in-house capabilities in anticipation of the global trends and
requirements of the water industry.”
Dear Stakeholders,
FY2010 has been another record year for Hyflux as we registered

our highest revenue and net profit to date. Our Group revenue
showed a 9% rise to S$569.7 million while profit after tax and
non-controlling interests came in at S$88.5 million, an 18%
increase over FY2009’s net profit.
Hyflux’s performance was the result of effective cost-management

measures put in place to strike a balance between costs on one
hand and growth on the other.
To reward shareholders, the Board of Directors has recommended

a final dividend of 3.50 Singapore cents per share. In addition to
the first interim dividend that was paid out on 15 September 2010,
the full-year dividend payout will amount to 4.17 Singapore cents
per share for FY2010. This is 25% higher than the dividend per
share for FY2009.
EXPANDING CAPABILITIES
This year marks the 10th anniversary of Hyflux’s listing on
the Singapore Stock Exchange. Our Group has achieved a
compounded annual growth rate of 33% in earnings before
interest, taxes, depreciation and amortisation and 31% in pre-
tax profit from 2001 to 2010. Over the same period, we have
delivered total annualised shareholder returns of 37% since our
initial public offer.
Over that 10-year period, we have experienced fast-track growth.

We have steadily strengthened our business model, grown in size
and profitability, and expanded globally.
In 2001, we had only two main markets – Singapore and China

– but have since expanded into Southeast Asia, India and the
Middle East and North Africa (MENA) region. From a player in
the industrial space for water, we have progressed to become a
major player in the municipal water business. Today, municipal
sales account for 90% of our Group revenue. From integrating
11
Message from
membrane systems in industrial plants, we have bidder” for the design, build, own and operate
been named one of the dominant desalination contract for Singapore’s second seawater
providers in the world by the Global Water desalination plant by PUB, the national
Intelligence (GWI), the leading information water agency. Hyflux will supply water to
service for the international water industry. PUB for a concession period of 25 years. At
318,500 m3 daily capacity, it is Singapore’s
To take the Group forward into the next decade, largest desalination plant. This project, worth
we will continue to expand our in-house approximately S$890 million, is also Hyflux’s
capabilities in anticipation of the global trends largest contract to date. It is a testament of our
and requirements of the water industry. Hence ability to put together an innovative, competitive
we took the strategic decision to enhance our and cost-effective solution – incorporating
human capital to ensure that we have the right project financing, our proprietary membrane
people with the right expertise and right skills to technology, our engineering, procurement and
grow the business, and to meet the increasing construction and operations and maintenance
demand from our customers worldwide. expertise – to meet the requirements of our
In this respect, we took steps to: client. To enhance the operational cost-efficiency
of the plant, we will build an on-site 411MW
• Enhance our management bench strength; combined cycle gas turbine power plant which
will provide an uninterruptible supply of good
• Raise our project management expertise
quality, clean energy to the desalination plant.
beyond civil and structural works to
When completed, this landmark project will be
marine engineering;
our springboard into the IWPP segment.
• Broaden our engineering and process
Our Group also scored project successes
know-how to include power generation
in China. Our subsidiaries in China signed
and management; and
concession agreements to develop, own and
• Expand our financial management and operate two wastewater treatment plants and
market development expertise. a water treatment plant in Hechuan District,
Chongqing City and a wastewater treatment
We strongly believe that by expanding our plant in Zunyi City, Guizhou. The projects carry
capabilities in these areas, we stand in good concession periods of 30 years.
stead to ride the uptrend in our key markets and
to penetrate into the Integrated Water and Power
Project (IWPP) segment.
FOCUSING ON ASIA
We will increase our focus on Asia, in particular
China, to balance our growth strategy.
RIDING ON ORDER BOOK MOMENTUM
Over the first quarter of FY2011, we have been We expect Asia to be the dominant revenue
able to ride on the momentum of order book driver in the next few years for two reasons.
growth in Singapore and China. First, we are directing more resources in Asia to
grow our revenues in China, Southeast Asia and
In March 2011, we were named the “preferred India – and this has started to yield results with
12
“For Hyflux, the water business is about making clean, safe water
accessible and affordable, and we want to play an integral role as well
in helping nations and communities achieve water security.”
our recent contracts from China and Singapore. ENSURING WATER SECURITY
Second, the two large-scale desalination plants Moving forward, we will continue to drive
that Hyflux is developing in Tlemcen and Magtaa operational excellence in all aspects of our
in Algeria are near the close of the construction business and plant operations and to continue
phases. The former has been completed, while to invest in technologies that are relevant and
we have crossed the three-quarter mark on cost-effective for our customers. With our
construction of the latter. expanding portfolio of water projects across the
world, we will also need to manage our assets
We see a new urgency in China to address its
more efficiently and to create higher returns for
water needs on all fronts – from infrastructure
our Group.
development to addressing drought, water
pollution, water conservation and pricing of At Hyflux, we believe that what we do on a daily
water – and this urgency permeates through basis can impact the lives of the communities
all levels of government. We continue to have that we operate in. In this aspect, we partner
confidence in the potential of the municipal water both the public and private sectors to provide
sector of China. reliable long-term solutions to the challenges of
water scarcity and water pollution.
We will continue to leverage on our knowledge
of the Chinese market built from more than For Hyflux, the water business is about making
15 years of experience in the country. Our joint clean, safe water accessible and affordable, and
venture platforms with Mitsui & Co and JGC we want to play an integral role as well in helping
Corporation will provide us the added flexibility nations and communities achieve water security.
to pursue the opportunities in the Chinese
water market. Finally, on behalf of the Board of Directors,
I would like to thank our shareholders, partners,
The political upheavals currently unfolding in customers and suppliers for their support
MENA do not change the fundamental need through the years.
for water in the region, and demand for clean
safe water can only be expected to grow. I would also like to thank our committed
Notwithstanding the prevailing risks involved employees, without whom there would be no
in investing in MENA countries, they remain Hyflux of today.
long-term compelling markets for Hyflux given
the vast opportunities for wastewater recycling
and seawater desalination solutions. These are Olivia Lum Ooi Lin
where our core strengths lie, and where we can Group President & CEO
leverage on our fully-integrated capabilities to add
value and to deliver water at affordable prices.
13
Board
of Directors
Olivia Lum Ooi Lin

Ms Lum started corporate life as a chemist with Glaxo

Pharmaceutical and left in 1989 to start up Hydrochem
(S) Pte Ltd, the precursor to Hyflux Ltd.
Managing the Group for more than 20 years now,

Ms Lum is the driving force behind Hyflux's growth and
business expansion, responsible for policy and strategy
formulation and corporate direction.
A former Nominated Member of Singapore Parliament,

Ms Lum holds several positions in the public service.
Currently, she sits on the board of a number of
companies. She is a Member of the NUS Board of
Trustees and National University Health System. In
addition to her commitments in Hyflux, Ms Lum is also
a member of the Singapore-Tianjin Economic & Trade
Council, and the Singapore-Jiangsu Cooperation
Council as well as the President of the Singapore
Compact for CSR.
Among the many accolades Ms Lum has received for

her entrepreneurial achievements are: the Winner of the
Regional Growth Award by Nihon Keizai Shimbun at the
11th Nikkei Asia Prize 2006, and most recently the Ernst
& Young Entrepreneur of the Year 2010 Singapore.
Ms Lum holds an Honours degree in Science from the

National University of Singapore.
Teo Kiang Kok including those from the PRC. Mr Teo's regional
Non-Executive Independent Director practice includes foreign investment work in and out of
Singapore, PRC, India and the ASEAN countries.
Mr Teo was admitted to the Singapore bar in 1983 and
has been a partner of Shook Lin & Bok LLP (SLB) since In the course of his legal practice, Mr Teo has advised
1988. Prior to joining SLB in 1987, he worked for brief listed companies extensively on corporate law and
periods as an associate with an international law firm and regulatory compliance and in particular, the requirements
as a corporate finance executive with an international of the Singapore Exchange Securities Trading Limited.
investment bank. He obtained his Bachelor of Law
(Honours) degree from the University of Hull and is a
Barrister-at-Law from Lincoln's Inn.
Lee Joo Hai
Mr Teo currently heads the Corporate & Corporate Non-Executive Independent Director
Finance and China practices of SLB. In his 28 years of
Mr Lee has been a Non-Executive Independent Director
practice, he has advised on a wide range of corporate
of Hyflux Ltd since December 2000. He is also the
finance transactions, particularly securities offerings,
Chairman of the Audit Committee and a member of the
mergers and acquisitions, joint ventures and strategic
Remuneration and Risk Management Committees.
investments. He has significant experience in equity
capital markets and has advised on many public offerings Mr Lee is a Certified Public Accountant (CPA) and
of securities by Singapore and foreign companies a member of both the Institute of Certified Public
including those from the People's Republic of China Accountants of Singapore and the Institute of
(PRC). Mr Teo also has expertise with mergers and Chartered Accountants in England and Wales.
acquisitions of Singapore and foreign companies
14
Left to right Rajsekar Kuppuswami Mitta, Christopher Murugasu, Olivia Lum Ooi Lin, Gay Chee Cheong, Lee Joo Hai, Professor Tan Teck Meng,
Teo Kiang Kok
He is currently a partner in a public accounting firm in Mr Gay co-founded and was the CEO of 2G Capital
Singapore and has more than 20 years of experience in Private Limited, a private investment company investing
accounting and auditing. in equities and private companies in the Asia Pacific
economies. The company was awarded Highest Net
Mr Lee also sits on the boards of other listed companies, Profit in 2006 and Net Profit Excellence in 2007 in the
including Lung Kee (Bermuda) Holdings Ltd. annual SME 500 ranking.
Mr Gay graduated from the Royal Military Academy

(RMA), Sandhurst and Royal Military College of Science,
Gay Chee Cheong
Shrivenham, United Kingdom. At RMA, Sandhurst,
Non-Executive Independent Director
Mr Gay won the Nigeria Prize for Best Overseas Student
Mr Gay has been a Non-Executive Independent Officer and at the Singapore Command and Staff
Director of Hyflux Ltd since August 2001. He is also the College, the Top Student Prize.
Chairman of the Nominating Committee, as well as a
Mr Gay holds Honours degrees in Electronics
member of the Remuneration and Audit Committees.
Engineering from the Royal Military College of Science,
He is a member of the Board of Governors of Raffles Shrivenham, United Kingdom, and in Economics from
University and Temasek Polytechnic, an Advisory Board the University of London. He also has a Masters of
member of the Lee Kong Chian School of Business at Business Administration from the National University
Singapore Management University, a member of the of Singapore.
Entrepreneurship Committee at the National University of
Singapore and a Trustee of the United World College of
South East Asia Foundation.
15
Board
of Directors
Christopher Murugasu Mr Mitta is a seasoned negotiator and deal maker with

Non-Executive Independent Director well developed cross cultural sensitivity developed
through living and working across diverse countries
Mr Murugasu has been a director of Hyflux Ltd since and consulting with an expansive list of clients. His
February 2005. He is also a member of the Risk main areas of professional interest are in strategy
Management and Remuneration Committees. development and value extraction through enhancing
Previously Senior Vice President for Corporate Services marketing and sales effectiveness, the competitive
at Hyflux Ltd, he was responsible for the Group’s human repositioning of brands/services and issues relating to
resources, procurement and general administration managing change within organisations.
functions. Prior to joining Hyflux, Mr Murugasu had
Mr Mitta holds a Bachelors degree in Chemical
accumulated over 15 years of experience in the public
Engineering from the University of Bombay, India and
sector as well as with a foreign bank.
a Masters in Business Administration from the Indian
He holds an Honours degree in Computing Institute of Management, Ahmedabad.
Science from Imperial College, United Kingdom,
and a Master’s degree from the London School of
Economics, United Kingdom. Professor Tan Teck Meng
Professor Tan has been a Non-Executive Independent

Rajsekar Kuppuswami Mitta
Director of Hyflux Ltd since April 2007. He is also the
Chairman of the Remuneration Committee as well as a
Mr Mitta has been a Non-Executive Independent Director member of the Audit Committee.
of Hyflux Ltd since April 2007. He is also Chairman of
Professor Tan is currently Professor of Accounting in
the Risk Management Committee.
the School of Accountancy at Singapore Management
Mr Mitta is currently the Chairman of Essential Value University. He chairs KK Women & Children Hospital’s
Associates Pte Ltd, a boutique consulting firm that Medifund Committee.
works with selected Chairmen and CEOs who seek
Professor Tan also sits on the board of a number
to create lasting change to develop high growth
of companies including Singapore Reinsurance
sustainable businesses with quality governance.
Corporation Limited, Kim Eng Holdings Limited,
Mr Mitta was Chairman of Arthur D Little Asia and k1 Ventures Ltd and Raffles Education Corporation.
a Senior Member of Booz Allen Hamilton. He has
Professor Tan has a Bachelor of Accountancy (BAcc)
advised some of the world’s best consumer goods and
degree from the University of Singapore and a Masters
customer-intensive companies, technology-intensive
of Commerce (MCom) (Honours) from the University of
corporations and regional governments. His client list
New South Wales in Australia. In 1996, he was awarded
includes multinationals like PepsiCo, Gillette, Kelloggs,
an Honorary PhD by Liaoning University (China). In
and the Governments of Singapore, Malaysia,
1997, he became the first Singaporean to garner the
Indonesia, Philippines, Australia and India. He has also
(US-based) Wilford L. White Award.
worked with regional conglomerates like Hutchisons
(HK), Jardines (HK), Bakrie Group (Indonesia), Reliance He holds Fellowships in the Institute of Certified Public
(India), Amex, Citicorp, British Airways and telecom Accountants of Singapore (FCPA), Australian Society
operators like Optus, Orange, Singapore Telecom and of CPAs (FCPA), Institute of Chartered Secretaries and
Deutsche Telekom. Administrators (FCIS), and Chartered Management
Institute, UK (FCMI).
Prior to his consulting experience of over 20 years,
Mr Mitta worked in senior marketing roles with Pepsico
(US and Cyprus) and Mars Inc. (UK).
16
Key
Management
Left to right Peter Wu, Oon Jin Teik, Foo Hee Kiang, Olivia Lum Ooi Lin, Sam Ong, Winnifred Heap, Dr Andrew Ngiam, Cho Wee Peng
01 Olivia Lum Ooi Lin 04 Winnifred Heap 07 Foo Hee Kiang

Group President & Group EVP, Group EVP,
CEO Capital Markets Commercial Contracts &
Industry Relations
02 Sam Ong 05 Oon Jin Teik
Group EVP & Group EVP & 08 Peter Wu
Group Deputy CEO CEO, China Group Senior MD &
CEO, Galaxy NewSpring
03 Cho Wee Peng 06 Dr Andrew Ngiam
Group EVP & Group EVP &
Group CFO Group COO
17
18
To
deliver
smarter
solutions
19
Financial
Review
(For year ended 31 December)

S$ million 2010 2009 % Change
Revenue 569.7 524.8 9
Profit Before Tax 100.5 83.0 21
Profit Attributable to Shareholders 88.5 75.0 18
Earnings per Share (cents) (1) 10.52 9.51 11
(1)
Group Revenue by Segment
Industrial Industrial
10% 10%
2010 2009
Municipal Municipal
90% 90%
OVERVIEW Revenue from the industrial sector increased by 1%

Hyflux registered our highest revenue and net profit to from S$54.4 million for FY2009 to S$55.1 million
date in 2010. The Group achieved revenue of S$569.7 for FY2010.
million and profit attributable to shareholders of S$88.5
China accounted for 26% of the total revenue, while
million for FY2010. Basic earnings per share increased
MENA contributed approximately 60% of the total
by 11% to 10.52 Singapore cents.
revenue for FY2010.
Moving forward, the fundamentals and outlook of the

REVENUE global water industry remain robust. The municipal
sector will continue to be the main driver of Group
Group revenue for FY2010 increased by 9% to S$569.7
revenue. With our key markets in China, Southeast
million as compared to S$524.8 million for FY2009.
Asia and the MENA region facing critical water scarcity
Revenue from the municipal sector increased marginally issues, the development of water infrastructure projects
by 9% from S$469.8 million for FY2009 to S$511.2 is expected to accelerate.
million for FY2010 and contributed 90% to the Group’s
As a reflection of the increasing momentum, we have
revenue. Municipal sector revenue from China and
announced the signing of four concession agreements
MENA for FY2010 was S$99.7 million and S$340.5
worth a total of US$76 million in the first two months of
million respectively.
2011 with the People's Government of Chongqing City,
20
Group Revenue by Country
Others
Others 2%
14%
China China
26% 35%
2010 2009
MENA MENA
60% 63%
Hechuan District and People's Government of Zunyi City Finance costs increased from S$9.3 million for FY2009
for water projects in Chongqing City and Zunyi City to S$16.8 million for FY2010 which was in line with
in China. higher bank borrowings during the financial year.
However, risks remain that could impact our growth even Depreciation, amortisation and impairment increased
though risk appetite has recovered significantly from from S$16.5 million for FY2009 to S$27.5 million for
the lows in 2008. China's recent tightening measures FY2010 which was in line with the increase in property,
and the debt crisis in the Eurozone will continue to rein plant and equipment and intangible assets.
in optimism and risk appetite. In addition, fluctuations in
foreign exchange rates and commodity prices will impact Other expenses increased from S$57.9 million
our financial performance, as well as recent changes in for FY2009 to S$68.1 million for FY2010 due to
the political climate in MENA. Projects in Libya are likely higher projects tender fees, costs on research and
to be delayed in view of current developments. development and foreign exchange differences during
the financial year.
The effective tax rate for FY2010 was about 11.5% and
COSTS AND EXPENSES remained at a level lower than the Singapore corporate
Raw materials and consumables used and tax rate mainly due to the tax exemptions and incentives
subcontractors’ costs decreased by 2% from S$309.4 enjoyed by certain entities within the Group.
million for FY2009 to S$303.0 million for FY2010 due to
cost management measures.
EARNINGS PER SHARE
Staff costs increased from S$59.4 million for FY2009
to S$65.4 million for FY2010 which was in line with our Basic and fully diluted earnings per share for FY2010
expansion plan. increased by 10.6% and 9.5% respectively to 10.52
Singapore cents and 10.23 Singapore cents respectively
compared to FY2009.
21
Financial
Review
BALANCE SHEET REVIEW Non-current liabilities increased to S$529.2 million

Shareholders’ equity expanded to a record S$502.5 as at 31 December 2010 from S$361.3 million as at
million as at 31 December 2010 from S$365.2 million 31 December 2009, resulting mainly from the increase
as at 31 December 2009. The increase was mainly in bank borrowings during the financial year to support
attributable to the changes in share capital arising from group expansion and investment activities. Included
the issue of shares under the Employees’ Share Option in the financial liabilities as at 31 December 2010
Scheme (the Scheme) and Warrant Subscription was S$222.8 million of fixed rate unsecured notes
Agreement and Supplemental Warrant Subscription (Notes) issued under our Multicurrency Debt Issuance
Agreement (Agreements) for FY2010. Net profit in Programme. The Notes will mature in 2012 and 2015.
FY2010 further boosted our equity base.
Our net gearing ratio as at 31 December 2010 stood at
Current assets rose to S$693.7 million as at 31 December 0.73 times.
2010 from S$549.1 million as at 31 December 2009, which
was mainly due to increases in amounts due for contract
work and cash and fixed deposits. CASHFLOW AND LIQUIDITY
Non-current assets increased to S$666.0 million Hyflux’s cash position increased to S$222.3 million
as at 31 December 2010 from S$523.4 million as at as at 31 December 2010 from S$166.7 million as at
31 December 2009. Property, plant and equipment 31 December 2009.
and financial receivables increased by S$20.9
In 2010, net cash of S$49.5 million was used in our
million and S$70.2 million respectively. The increase
operating activities, mainly towards working capital
was offset by the lower trade and other receivables
requirements. Cash used in investing activities for the
for trade amounts due from associates as well as
financial year was largely for capital expenditure of
investments in associates.
property, plant and equipment and intangible assets to
Current liabilities decreased slightly to S$315.9 million support our expansion, including investments in joint
as at 31 December 2010 from S$317.9 million as at ventures and associates. Cash generated from financing
31 December 2009, mainly due to the decreases in activities for FY2010 was mainly from borrowing
trade-related payables during the financial year. proceeds to fund group investments and from the issue
of shares under the Scheme and Agreements.
22
Operating
Review
ENGINEERING, PROCUREMENT AND Complex on Jurong Island. We were also awarded a

CONSTRUCTION (EPC) US$100 million turnkey contract by the Libyan Ministry
2010 saw further progress in our two large-scale of Utilities, to build a 40,000 m3/day seawater reverse
desalination projects in Algeria. Our project in Souk Tleta osmosis desalination plant in Tobruk, Libya. However, due
in Tlemcen, with a designed capacity of 200,000 m3/day, to the heightened tensions in the country, we believe that
has been completed and is awaiting client’s readiness, the project will be delayed. We have no investments in
while good progress was made at our Magtaa project, Libya as work on the desalination plant in Tobruk has not
which is 80% complete. At 500,000 m3/day, it will be the begun and we have removed the US$100 million contract
world’s largest seawater reverse osmosis desalination for Tobruk from the computation of the Group’s order
plant when completed in 2011. book pending new developments.
During the year, Hyflux secured a number of EPC To date, our projects in Algeria and Oman are progressing
contracts, including two projects in Singapore. The first as planned and have not faced any disruptions.
was a S$35.8 million contract for Singapore’s largest
In the first quarter of 2011, Hyflux's subsidiaries in
membrane bioreactor (MBR) at the Jurong Water
China were awarded concession agreements worth
Reclamation Plant for PUB, the country’s national water
a total of US$76 million by the People’s Government
agency. The second contract, valued at S$43.8 million,
of Chongqing City, Hechuan District and the People’s
was for the first stage development of a 182,000 m3/day
Government of Zunyi City. Hyflux will develop a water
desalination plant for Tuas Power’s Tembusu Multi-Utilities
Artist's impression of Tuas II desalination plant, Singapore
23
Operating
Review
ORDER BOOK
(S$ million)
Mar 11 955 1273 2228
750 (1)
Dec 09 1100 748 1848
Dec 08 335 1145 1480
Dec 07 254 863 1117
Dec 06 166 435 601
Dec 05 30 435 465
0 500 1000 1500 2000 2500
EPC O&M
Note:
(1)
EPC value for Tuas II desalination plant
(2)
EPC order book excludes US$100 million from Tobruk as of March 2011
(3)
O&M order book is a summation of future revenues of our portfolio of plants over the concession periods
treatment plant and two wastewater treatment plants at Hyflux’s largest contract to date. To enhance operational
Hechuan Industrial Park in Chongqing City: cost efficiency, Hyflux will build a 411MW combined
cycle gas turbine power plant to supply energy to
• Hexin District Wastewater Treatment Plant and the desalination plant. Construction is expected to
Weituo Wastewater Treatment Plant, each with commence in the fourth quarter of 2011 after the water
a treatment capacity of 20,000 m3/day will process purchase agreement is signed with PUB and financial
wastewater for the industrial park; and close is achieved. When completed, this landmark
project will sharpen our competitive edge for large-scale
• Weituo Water Treatment Plant will tap water from
international seawater desalination projects in our key
upstream Jialing River to produce up to 50,000 m3/day
markets and be our springboard into the integrated water
of potable water for industrial and domestic use.
and power project (IWPP) segment.
At Zunyi City in north Guizhou province, Hyflux will
This accelerating order book momentum brings our
develop a wastewater treatment plant to treat up to
EPC order book to a strong S$1.3 billion at the end
150,000 m3/day of domestic wastewater. These projects
of March 2011.
carry concession periods of 30 years.
In addition, we were named the "preferred bidder" by

PUB to design, build, own and operate Singapore’s OPERATIONS & MAINTENANCE (O&M)
second seawater desalination plant for a concession
Our order book for O&M was S$955 million in
period of 25 years. With a daily capacity of 318,500 m3,
FY2010 compared to S$1.1 billion in FY2009 as a
the facility will be Singapore’s largest desalination plant.
result of the 50/50 joint ventures we had formed with
The project, worth approximately S$890 million, is also
24
Ultrafiltration building at Tianjin Dagang Desalination Plant, China
Mitsui & Co and JGC Corporation of Japan. This saw INNOVATION

the transfer of the O&M contracts for the portfolio Hyflux’s research and development activities are focused
of water treatment plants that were formerly held on the development of membrane applications and
by Hyflux Water Trust (HWT) and Tianjin Dagang commercialisation of membrane technologies. This
Desalination Plant to the two joint ventures. We expect enables us to constantly improve our operations and
our O&M order book to rise over the next three years anticipate tomorrow’s challenges as countries become
as projects such as our large-scale desalination more industrialised. Our team of multidisciplinary
plants in Magtaa, Algeria and Tuas, Singapore begin specialists, researchers and scientists in our network
operations, forming a steady stream of recurring of innovation centres in Singapore, China and The
income over the 20 to 30-year concession period. Netherlands, works in close cooperation with marketing,
product development and engineering to push for
By the end of 2011, our large- breakthroughs that will deliver environmentally-friendly and
efficient solutions for a wide range of applications in water
scale municipal desalination plants treatment and industrial manufacturing processes.
will supply close to 1 million m3 Kristal 2000T, a new generation of our flagship
of desalinated water daily to Kristal ultrafiltration membrane, which is installed
in a number of our landmark water projects, was
communities and industries in the launched at the Singapore International Water Week
countries where we operate. 2010. Fabricated from polyvinylidene fluoride, the
membrane’s properties make it ideal for handling
25
Operating
Review
difficult and challenging conditions such as high solids technological and engineering processes, and create
wastewater treatment. Another member to join the new value for our customers.
Kristal family in 2010 was the Kristal 600ETN. With
a shortened module housing of just 1.2 m compared
to the other Kristal models which are over 2 m long,
In fact, innovation is a way of
the Kristal 600ETN is designed to meet customer life at Hyflux and permeates
requirements for a more compact, high-performance
solution for full scale process treatment systems.
every level of the organisation.
Our philosophy is to look at how
Hyflux also unveiled a Membrane Evaluation System
at the Singapore International Water Week 2010. innovation can create better value
The system is designed to evaluate and optimise the
performance of hollow fibre membranes for liquid-liquid
and efficiency for customers.
or liquid-solid separation under different operating This extends beyond research
conditions, simplifying the membrane selection process
for different applications.
and development to encompass
Every year, Hyflux devotes a fixed percentage of annual
the way we design our membrane
revenue to research and development spending. In systems and integrated water
addition, we are investing S$120 million over the
next few years in the Hyflux Innovation Centre, a
plants as well as arrange
new design, R&D and commercialisation centre in financing for our projects.
Singapore to spearhead the development of membrane
technologies for municipal and industrial applications. In recognition of our achievements, Hyflux was named
There will also be a new membrane manufacturing Water Technology Company of the Year 2010, Asia
facility, Hyflux Production Hub. This commitment Pacific by Frost and Sullivan, and Desalination Company
to research enables us to continually enhance our of the Year (Distinction) at the Global Water Awards
Research lab at Tianjin Dagang Desalination Plant Kristal ultrafiltration membrane installation in Ukraine
26
Souk Tleta Desalination Plant, Algeria
2010. Our Magtaa project also won a commendation Notwithstanding the prevailing risks involved in investing in
for Desalination Deal of the Year at the same awards MENA, the region remains a compelling market for Hyflux
ceremony for achieving financial close within one year in the long-term as the fundamentals for water solutions
from the award date, and on the back of one of the like desalination and water reuse remain strong.
lowest tariffs in the world for a seawater reverse osmosis
desalination plant.
Singapore and Others
Singapore and other markets accounted for 14% or
S$75.1 million of Group revenue in FY2010. Our home
GEOGRAPHICAL MARKETS
market saw a significant increase in activity in 2010 with
China the development of two projects we had won in the first
The Chinese market represented 26% or S$150.8 quarter of the year – Singapore’s largest MBR plant at
million of Group revenue in FY2010. the Jurong Water Reclamation Plant and the first stage
development of a desalination plant for Tuas Power’s
China presents tremendous opportunities for Hyflux and Tembusu Multi-Utilities Complex.
we intend to increase our focus in the coming years. The
country recently outlined in a central policy document its Markets such as Southeast Asia and India, where we
plans to intensify investments in water projects as well have been undertaking small industrial projects, have
as to promote water conservation and sustainable use of contributed modestly to the Group’s revenue, but are
the scarce resource. This is the first time the document expected to become significant over time as we direct
has focused on water conservation, a reflection of more resources to capture the growth opportunities
the urgency the government sees in boosting China’s ahead. As more countries across the region put in place
water security. Hyflux is confident of the prospects the concerted plans to improve water infrastructure and
municipal sector offers and the potential for tariff growth. enhance their water security, attractive opportunities will
open up for Hyflux to provide innovative, cost-effective
and environmentally responsible solutions in seawater
Middle East North Africa (MENA) desalination, water recycling, wastewater treatment and
The MENA region accounted for 60% or S$343.8 potable water treatment.
million of Group revenue in FY2010 with the progress in
the Souk Tleta and Magtaa seawater desalination plants
in Algeria and the seawater desalination facility at the
Salalah IWPP in Oman.
27
Operating
Review
STRATEGIC PARTNERSHIPS to meet China’s needs for clean,

Strategic partnerships enable Hyflux to strengthen
our competitiveness in the global water industry. safe and affordable water.
In August, Hyflux formed Galaxy NewSpring, a 50/50 Galaxy NewSpring’s initial investment portfolio
joint venture with Mitsui & Co to serve as the vehicle for comprises 22 water and wastewater treatment
investing, developing and managing projects in the fast plants – four acquired from Hyflux’s wholly-owned
expanding water sector in China. subsidiary, Spring China Utility, and 18 from HWT.
The latter was taken private in December 2010 after
its unitholders supported the voluntary delisting
By combining our complementary proposal by the joint venture.
strengths – Hyflux’s fully Hyflux has also formed strategic partnerships with the
integrated water solutions, strong Japan Bank for International Cooperation (JBIC) and
JGC Corporation in 2009.
track record and experience in
China, and Mitsui’s entrenched With these institutions and companies as our partners,
we will have greater financial leverage and flexibility to
global network, comprehensive accelerate investments in projects in our key growth
markets of China, Southeast Asia, India and MENA.
infrastructure services and We will also be able to tap on the market knowledge
robust capital structure – we and connections of our partners in markets which we
have yet to establish a strong presence.
have formed a powerful platform
Hyflux will continue to explore new partnerships that
to accelerate investments in complement our key strengths to boost our growth
developing critical infrastructure strategy and financial flexibility.
Joint venture signing ceremony with Mitsui & Co
28
INDUSTRY OUTLOOK to RMB400 billion, investing a total of RMB4 trillion

Access to water of adequate quality and quantity (US$608 billion) in projects during the next decade.
continues to be one of the major challenges confronting This will be supplemented by other measures including
modern society. Many people do not have access to government funding, higher water tariffs to control water
safe drinking water because water resources are limited consumption and the implementation of targets for the
or polluted by domestic and industrial wastewater. quantity of water consumed, efficiency of water use
This situation is expected to become more critical with and water pollution levels for which local government
rapid population growth, increasing urbanisation and officials will be held accountable. We will leverage on
industrialisation, ageing water infrastructure and climate our knowledge of the Chinese market cultivated from
change, especially in regions with scarce natural water more than 15 years of experience in the country and our
resources. To meet these challenges, comprehensive joint ventures with Mitsui & Co and JGC Corporation to
water policies as well as investments are required to pursue the opportunities in China.
implement and enforce effluent discharge standards,
improve water efficiency and quality, promote water By building on our core
conservation and tariff reforms, and upgrade and expand
water infrastructure. capabilities and leveraging
Industry estimates put the size of the global water market
on our proprietary membrane
at over US$480 billion in 2010. Of this, US$175 billion technologies and financial
was for municipal and industrial water and wastewater
capital expenditure. While the financial crisis caused a
platform, Hyflux has created a
decrease in water capital expenditure growth and delays competitive advantage that has
in large infrastructure projects, global water capital
expenditure is still expected to grow at a compounded enabled us to achieve strong
annual growth rate of 6.2% in the period 2010 to growth and a leading position
2016. The annual total global capital expenditure on
desalination is also projected to rise from US$6 billion in in the water industry.
2010 to US$18.3 billion in 2016, a compounded annual
We are ranked one of the world’s top desalination
growth rate of 20.4%.
suppliers by contracted capacity and Build-Own-
In China, a key market where Hyflux has more than 40 Transfer / Build-Own-Operate desalination capacity
water projects, the government has announced that it according to Global Water Intelligence. As water
would make water conservation and sustainable water scarcity becomes an increasingly grave issue for
use a national priority. The country aims to double communities and industries, we seek to play an integral
its average annual spending on water conservation role in helping countries enhance their water security.
over the next 10 years from RMB200 billion in 2010
29
To
grow
people and
communities
30
31
Corporate
Social Responsibility
HUMAN CAPITAL commitment to QEHS practices starts from key

To lead the company into the next phase of growth, management and filters down through the organisation.
Hyflux focuses on recruiting, engaging, motivating and
Hyflux contributes to sustainable development by
retaining individuals whose skills, aspirations and values
helping to meet the world’s growing water needs in
are aligned to the company’s strategic vision and core
environmentally and socially responsible ways. Our
values. We employed close to 2,300 employees in
activities are guided by our goal of making a positive
seven countries around the world in 2010. We boosted
difference and reducing our impact on the environment.
our staff strength in Algeria as we prepared for the
operations and maintenance of the desalination plants In 2010, we were awarded the ISO 14001:2004 and
that we are building, expanded our presence in Malaysia BS OHSAS 18001:2007 certifications. They affirm
and India, and opened a new office in France to serve that Hyflux’s processes comply with international
the European market. We also have plans to establish standards for occupational health and safety, and the
three engineering resource centres in Malaysia, China environment. In addition, our flagship ultrafiltration
and India to tap on and divert resources for projects membrane, Kristal, is the first ultrafiltration membrane
across the world. certified to remove the drinking water contaminants,
cryptosporidium and giardia, under the new Public
A diversified and inclusive work environment has been
Drinking Water Equipment Performance Certification
vital to our success. The varied skills and experiences of
Programme by America’s NSF International. Kristal
employees from different backgrounds, cultures, gender
has also achieved NSF Standard 61 (Drinking Water
and age bring richness to the workplace, helping us to
System Components – Health Effect) Certification.
connect better with our clients around the world and
This standard certifies that products which have direct
build stronger relationships at a local level.
contact with drinking water, do not leach contaminants
We believe in nurturing the full potential of our employees that would be a health concern.
through professional training and development
Safe and reliable operations are fundamental to Hyflux.
programmes, job rotation, overseas postings as well
Our Environment, Safety and Health Committee
as participation in local and international industry
continuously strives to strengthen our safety culture
conferences. In doing so, we develop their skills and
through processes, regular training programmes
talents and also strengthen our ability to improve lives in
and sharing sessions and rewards for strong safety
the communities we serve.
performance. Our goal is to create an accident-free
Hyflux encourages open communication and employee environment that keeps our employees and contractors
engagement through an orientation for new employees safe at every Hyflux facility.
to familiarise them with the company, regular dialogue
sessions with senior management, company-wide
celebrations of festivities and programmes such as
‘Bring Your Child to Work Day’. This is complemented
by an intranet portal which shares company news
and events as well as general employee resources. In
addition, regular learning sessions are organised for
employees to give them an intimate understanding of the
industry Hyflux is in, and to instil a strong sense of pride
and ownership in our journey to deliver solutions to meet
the world’s need for water.
QUALITY, ENVIRONMENT, HEALTH

AND SAFETY (QEHS)
At Hyflux, a dedicated team is responsible for ensuring
the health and safety of employees and integrating
environmental best practices into our business. Our
Hyflux staff in the Economic Development Board's Heritage Run
32
COMMUNITY During the year in review, our colleagues in Algeria

As a water solutions company with entrepreneurial roots, participated in a ‘Beach Cleaning Day’. In Singapore,
Hyflux’s corporate social responsibility programme Hyflux sponsored Christmas lunch celebrations and
focuses on issues close to our heart: the environment, goodie bags for Teck Ghee Youth Centre, a non-
education, entrepreneurship and community relations. profit organisation that reaches out to youth from less
privileged families, while our volunteers entertained and
In 2010, Hyflux contributed to charitable causes befriended the youth and their families.
including fund raising events which benefited wildlife
conservation funds as well as charity organisations
that provide financial and social assistance, eldercare,
rehabilitation, knowledge and skills development. In
support of the opening of PUB’s Active, Beautiful,
Clean Waters project at Lower Seletar Reservoir, Hyflux Community Initiatives
sponsored a Vietnamese water puppet show. We also
donated money and portable Hyflux track membrane Community
water filters to aid humanitarian efforts for disaster relief Environment
in Qinghai and Haiti. Entrepreneurship & Education
Others
As a company actively involved in the Chinese 23% 46%
market, we believe in the importance of an in-depth
understanding of the rapidly evolving country. During the
year in review, we were a Silver Sponsor of the inaugural
FutureChina Global Forum, an annual event which
provides a platform to promote dialogue and interaction 14%
among business, political, academic personalities from
China and companies involved in the country.
Hyflux’s corporate social responsibility philosophy goes

beyond philanthropy. We seek to foster a culture of
volunteerism to inspire our employees to reach out to the 17%
communities in which we live and work.
Vietnamese water puppet show
33
Investor
Relations
Hyflux adopts a proactive investor relations approach of a telephone hotline was provided during the entire
in our communications with investors and analysts. We offer period for unitholders of HWT to ask any basic
strive to provide clear, consistent and timely information questions about the offer. The approval from the majority
regarding the company’s performance and progress to of the unitholders was secured at HWT's EGM held in
facilitate informed investment decisions, nurture continued October 2010.
confidence in the company and foster strong, enduring
relations with the investment community. To achieve this, In recognition of our commitment to high standards
multiple communication channels such as shareholder of corporate disclosure and governance, Hyflux was
meetings, briefings to analysts, investors and the media, awarded runner-up in the services/utilities/agriculture
conference calls, investor conferences and the investor category of the Most Transparent Company Award
relations website are used. All financial information, 2010 at the Investors’ Choice Awards presented by the
announcements, briefing materials to analysts and the Securities Investors Association (Singapore).
media as well as annual reports are made available on
Hyflux firmly believes in creating long-term value for our
www.hyflux.com.
investors. We have delivered total annualised shareholder
Hyflux’s senior management and investor relations returns of 37%, or 22 times, over the last 10 years since
team continued to actively reach out to the investment our listing in 2001.
community. During the year, we held over 220 meetings,
To reward shareholders for their continuous support of
including non-deal roadshows and investor conferences
Hyflux, a bonus share issue of one bonus share for every
with shareholders, analysts and potential investors. The
two existing ordinary shares held by shareholders was
meetings provided a platform for senior management to
given in December 2010. We have also continued to
engage and keep the investment community apprised of
deliver good dividends to our shareholders. For FY2010,
developments at Hyflux and gain insights into the equity
the directors have recommended a final dividend of 3.50
market’s perceptions of the company.
Singapore cents per share, which together with our first
When Galaxy NewSpring, the 50/50 joint venture interim dividend of 0.67 (1) Singapore cents paid earlier in
between Hyflux and Mitsui & Co, proposed the the year, brings the total dividend for the year to 4.17 (1)
acquisition and voluntary delisting of Hyflux Water Trust Singapore cents per share, compared to a total dividend
(HWT), an additional communication channel in the form of 3.33 (1) Singapore cents per share in FY2009.
RELATIVE SHARE PERFORMANCE: HYFLUX vs STI (16/01/2001 - 25/03/2011)
3000 HYFLUX
STI 2318.1152
2500
2000
1500
1000
500
155.4667
100
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
(1)
34
Financial Directors’ Report 36 Consolidated Cash Flow Statement 49
Statement by Directors 42 Notes to the Financial Statements 51
Statements
Independent Auditors’ Report 43 Corporate Governance Statement 108
Statement of Financial Position 44 Supplementary Information 118
Consolidated Income Statement 45 Statistics of Shareholdings 120
Consolidated Statement Substantial Shareholders 121
of Comprehensive Income 46 Hyflux Group of Companies 122
Consolidated Statement Corporate Information 123
of Changes in Equity 47
Notice of Annual General Meeting 124
Directors’ Report
We are pleased to submit this annual report to the members of the Company together with the audited financial statements for the
financial year ended 31 December 2010.
Directors
The directors in office at the date of this report are as follows:
Olivia Lum Ooi Lin Group President & CEO

Teo Kiang Kok
Lee Joo Hai
Gay Chee Cheong
Christopher Murugasu
Rajsekar Kuppuswami Mitta
Professor Tan Teck Meng
Directors’ interests
According to the register kept by the Company for the purposes of Section 164 of the Companies Act, Chapter 50 (the Act),
particulars of interests of directors who held office at the end of the financial year in shares, debentures, warrants and share options
in the Company and in related corporations (other than wholly-owned subsidiaries) are as follows:
Direct interest Deemed interest

Name of director and
corporation in which At beginning At end At At beginning At end At
interests are held of the year of the year 21/1/2011 of the year of the year 21/1/2011
The Company
Ordinary shares
Olivia Lum Ooi Lin 168,234,141 252,351,211 252,351,211 10,000,000 15,000,000 15,000,000
Teo Kiang Kok – – – – – 300,000
Gay Chee Cheong 450,000 675,000 915,000 – – –
Christopher Murugasu 469,375 729,843 729,843 120,000 180,000 180,000
Professor Tan Teck Meng 61,000 – – – 91,500 91,500
Share options
Olivia Lum Ooi Lin 4,500,000 6,750,000 6,750,000 – – –

Teo Kiang Kok 250,000 750,000 450,000 – – –
Lee Joo Hai 250,000 750,000 750,000 – – –
Gay Chee Cheong 200,000 675,000 435,000 – – –
Christopher Murugasu 360,937 740,625 740,625 – – –
Rajsekar Kuppuswami Mitta – 375,000 375,000 – – –
Professor Tan Teck Meng – 375,000 375,000 – – –
There were no changes in any of the above mentioned interests in the Company between the end of the financial year and 21 January
2011, except as disclosed above.
By virtue of Section 7 of the Act, Olivia Lum Ooi Lin is deemed to have interests in the other subsidiaries of Hyflux Ltd, at the beginning
and at the end of the financial year.
Except as disclosed in this report, no director who held office at the end of the financial year had interests in shares, debentures,
warrants or share options of the Company, or of related corporations, either at the beginning or at the end of the financial year.
36
Directors’ Report (cont’d)
Except as disclosed under the “Share Options” section of this report, neither at the end of, nor at any time during the financial year,
was the Company a party to any arrangement whose objects are, or one of whose objects is, to enable the directors of the Company
to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate.
Except for salaries, bonuses and fees and those benefits that are disclosed in this report and in note 35 to the financial statements,
since the end of the last financial year, no director has received or become entitled to receive, a benefit by reason of a contract made
by the Company or a related corporation with the director, or with a firm of which he is a member, or with a company in which he has
a substantial financial interest.
Share options
The Hyflux Employees’ Share Option Scheme (the Scheme) of the Company was approved and adopted by its members at an
Extraordinary General Meeting held on 27 September 2001.
On 24 November 2003, the members of the Company approved a modification to the Scheme which allowed Olivia Lum Ooi Lin,
Group President & CEO, and a substantial shareholder of the Company, to participate in the Scheme. The maximum entitlement of
Olivia Lum Ooi Lin is 10% of the total number of shares which may be issued by the Company under the Scheme.
The Scheme is administered by the Company’s Remuneration Committee. It was in force since 27 September 2001 and shall expire
on 26 September 2011.
37
38
At the end of the financial year, details of the options granted under the Scheme on the unissued ordinary shares of the Company, are as follows:
Exercise Options Options Number of

Date of grant price outstanding at Options Bonus Options Options outstanding at holders as at
of options per share 1 January 2010 granted options exercised forfeited 31 December 2010 31 December 2010 Exercise period
$
15/10/2001 0.1792 40,687 – 22,447 (6,187) – 56,947 39 15/10/2002 – 14/10/2011

11/01/2002 0.2749 750 – 375 – – 1,125 1 11/01/2003 – 10/01/2012
28/03/2002 0.3624 26,906 – 266 (20,000) – 7,172 2 28/03/2003 – 27/03/2012
08/07/2002 0.3776 750 – 375 – – 1,125 1 08/07/2003 – 07/07/2012
07/01/2003 0.3997 500 – 250 – – 750 2 07/01/2004 – 06/01/2013
07/04/2003 0.4835 75,750 – 37,875 – – 113,625 2 07/04/2004 – 06/04/2013
16/10/2003 0.7054 427,750 – 85,875 (256,000) – 257,625 5 16/10/2004 – 15/10/2013
08/12/2003 0.6798 200,000 – 50,000 (100,000) – 150,000 1 08/12/2004 – 07/12/2013
29/12/2003 0.7085 269,000 – 18,000 (233,000) – 54,000 5 29/12/2004 – 28/12/2013
14/05/2004 0.6400 120,000 – 60,000 – – 180,000 1 14/05/2005 – 13/05/2014
07/02/2005 1.2400 1,736,000 – 569,000 (598,000) – 1,707,000 24 07/02/2006 – 06/02/2015
09/05/2005 1.5378 4,500,000 – 2,250,000 – – 6,750,000 1 09/05/2006 – 08/05/2015
01/06/2005 1.6995 18,000 – 9,000 – – 27,000 1 01/06/2006 – 31/05/2015
08/06/2005 1.7671 27,000 – 13,500 – – 40,500 1 08/06/2006 – 07/06/2015
28/03/2006 1.7747 520,000 – 119,000 (230,000) (52,000) 357,000 7 28/03/2007 – 27/03/2016
28/03/2006 1.7747 700,000 – 350,000 – – 1,050,000 3 28/03/2007 – 27/03/2011
18/10/2006 1.5747 980,000 – 490,000 – – 1,470,000 3 18/10/2007 – 16/10/2016
07/12/2006 1.5813 2,044,000 – 720,000 (468,000) (136,000) 2,160,000 48 07/12/2007 – 06/12/2016
05/04/2007 1.7493 358,000 – 130,000 (20,000) (78,000) 390,000 2 05/04/2008 – 04/04/2017
23/05/2007 1.7387 180,000 – 42,000 (96,000) – 126,000 2 23/05/2008 – 22/05/2017
25/09/2007 1.8613 2,360,000 – 934,000 (264,000) (228,000) 2,802,000 29 25/09/2008 – 24/09/2017
26/05/2008 2.4187 2,780,000 – 1,075,000 – (600,000) 3,255,000 40 26/05/2009 – 25/05/2018
31/10/2008 0.9813 5,824,000 – 1,994,500 (891,000) (944,000) 5,983,500 80 31/10/2009 – 30/10/2018
09/01/2009 1.2720 500,000 – 250,000 – – 750,000 1 09/01/2010 – 08/01/2019
15/05/2009 1.1987 980,000 – 395,000 (190,000) – 1,185,000 5 15/05/2010 – 14/05/2019
22/10/2009 2.0733 610,000 – 165,000 – (280,000) 495,000 4 22/10/2010 – 21/10/2019
26/02/2010 2.3600 – 1,130,000 555,000 – (20,000) 1,665,000 8 26/02/2011 – 25/02/2020
26/02/2010 2.3600 – 1,500,000 750,000 – – 2,250,000 6 26/02/2011 – 25/02/2015
16/11/2010 2.1907 – 1,570,000 785,000 – – 2,355,000 29 16/11/2011 – 15/11/2020
25,279,093 4,200,000 11,871,463 (3,372,187) (2,338,000) 35,640,369 353
Except as discussed above, there were no unissued shares of the Company or its subsidiaries under options granted by the Company
or its subsidiaries as at the end of the financial year.
Details of options granted to directors of the Company under the Scheme are as follows:
Aggregate options Aggregate options

Options granted granted since exercised since
for the financial commencement of commencement Aggregate options
year ended Scheme to of Scheme to outstanding as at
Name of director 31 December 2010 31 December 2010 31 December 2010 31 December 2010
Olivia Lum Ooi Lin – 8,625,000 (1,875,000) 6,750,000

Teo Kiang Kok 375,000 750,000 – 750,000
Lee Joo Hai 375,000 750,000 – 750,000
Gay Chee Cheong 375,000 675,000 – 675,000
Christopher Murugasu 375,000 1,359,375 (618,750) 740,625
Rajsekar Kuppuswami Mitta 375,000 375,000 – 375,000
Professor Tan Teck Meng 375,000 375,000 – 375,000
Total 2,250,000 12,909,375 (2,493,750) 10,415,625
Except as disclosed in this report, since the commencement of the Scheme to the end of the financial year:
• No options have been granted to the controlling shareholders of the Company or their associates;
• No participant has been granted 5% or more of the total options available under the Scheme;
• No options have been granted to directors and employees of the holding company and its related corporations under the Scheme;
• No options that entitle the holders of the options to participate, by virtue of such holding, to any share issue of any other
corporation have been granted; and
• The exercise price of the options is set at the market price, as defined in the Scheme, at the time of grant. No options have
been granted at a discount.
Warrants
By a warrant subscription agreement dated 23 November 2004 supplemented by a supplemental warrant subscription agreement
dated 25 April 2008 (Agreements) entered into between the Company and Istithmar World PJSC (formerly known as Istithmar PJSC)
(Istithmar), Istithmar was entitled to subscribe for 41,216,863 ordinary shares in the Company, subject to the terms and conditions of
the Agreements and the Warrant Instrument. The exercise period is from April 2008 to April 2010.
The exercise price was the higher of (a) S$1.95 and (b) the lower of 70% of the volume-weighted average price for trades in the
Company’s shares transacted on the Singapore Exchange on the market day immediately preceding the exercise date or in the 30
calendar day period immediately preceding the exercise date.
During the financial year, 40,216,863 warrants were exercised, while 1,000,000 warrants were exercised in the financial year ended
31 December 2009.
39
Audit Committee
The members of the Audit Committee during the year and at the date of this report are:
Lee Joo Hai (Chairman), non-executive independent director

Gay Chee Cheong, non-executive independent director
Teo Kiang Kok, non-executive independent director
Professor Tan Teck Meng, non-executive independent director
The members of the Audit Committee, collectively, have expertise and extensive experience in legal, accounting, financial management
and business, and are qualified to discharge the Audit Committee’s responsibilities.
The primary functions of the Audit Committee are as follows:
1. assists the Board in discharging its statutory responsibilities on financial and accounting matters;
2. reviews the financial and operating results and accounting policies of the Group;
3. reviews significant financial reporting issues and judgements relating to financial statements for each financial year, interim and
annual results announcement before submission to the Board for approval;
4. reviews the adequacy of the Company’s internal control (financial and operational) and risk management policies and systems
established by the Management;
5. reviews the audit plans and reports of the external and internal auditors and consider the effectiveness of the actions taken by
the Management on the auditors’ recommendations;
6. appraises and reports to the Board on the audits undertaken by the external and internal auditors, the adequacy of the disclosure
of information, and the appropriateness and quality of the system of management and internal controls;
7. reviews the independence of external auditors annually and considers the appointment or re-appointment of external auditors
and matters relating to the resignation or removal of the auditors and approve the remuneration and terms of engagement of the
external auditors; and
8. reviews interested person transactions, as defined in Chapter 9 of the SGX Listing Manual.
The Audit Committee has held 4 meetings since the last directors’ report. In fulfilling its responsibilities, the Audit Committee receives
regular reports from the Management. The Audit Committee has full access to and co-operation of the Management and meets with
KPMG LLP in private at least once a year, and more frequently if necessary.
The Audit Committee has explicit authority within the scope of its responsibilities to seek any information it requires or
investigate any matter within its terms of reference. The Audit Committee has adequate resources to enable it to discharge its
responsibilities properly.
The Group has put in place a confidential communication programme as endorsed by the Audit Committee. Employees may, in
confidence, raise concerns about possible corporate improprieties in matters of financial reporting or other matters and to ensure that
arrangements are in place for the independent investigations of such matters and for appropriate follow-up actions. The details of the
confidential communication policies and arrangements have been made available to all employees.
40
The Audit Committee is satisfied with the independence and objectivity of the external auditors and has recommended to the Board
of Directors that the auditors, KPMG LLP, be nominated for re-appointment as auditors at the forthcoming Annual General Meeting of
the Company.
Auditors
The auditors, KPMG LLP, have indicated their willingness to accept re-appointment.
On behalf of the Board of Directors
Olivia Lum Ooi Lin

Director
Teo Kiang Kok

Director
8 March 2011
41
Statement by Directors
In our opinion:
(a) the financial statements set out on pages 44 to 107 are drawn up so as to give a true and fair view of the state of affairs of the
Group and of the Company as at 31 December 2010 and the results, changes in equity and cash flows of the Group for the year
ended on that date in accordance with the provisions of the Singapore Companies Act, Chapter 50 and Singapore Financial
Reporting Standards; and
(b) at the date of this statement, there are reasonable grounds to believe that the Company will be able to pay its debts as and when
they fall due.
The Board of Directors has, on the date of this statement, authorised these financial statements for issue.
On behalf of the Board of Directors
Olivia Lum Ooi Lin

Director
Teo Kiang Kok

Director
8 March 2011
42
Independent Auditors’ Report
Members of the Company

Hyflux Ltd
Report on the financial statements

We have audited the accompanying financial statements of Hyflux Ltd (the Company) and its subsidiaries (the Group), which comprise
the statement of financial position of the Group and the Company as at 31 December 2010, the income statement, statement of
comprehensive income, statement of changes in equity and cash flow statement of the Group for the year then ended, and a summary
of significant accounting policies and other explanatory notes, as set out on pages 44 to 107.
Management’s responsibility for the financial statements

Management is responsible for the preparation of financial statements that give a true and fair view in accordance with the provisions of
the Singapore Companies Act, Chapter 50 (the Act) and Singapore Financial Reporting Standards, and for devising and maintaining
a system of internal accounting controls sufficient to provide a reasonable assurance that assets are safeguarded against loss from
unauthorised use or disposition; and transactions are properly authorised and that they are recorded as necessary to permit the
preparation of true and fair profit and loss accounts and statement of financial position and to maintain accountability of assets.
Auditors’ responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with
Singapore Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The
procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the
entity’s preparation of financial statements that give a true and fair view in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes
evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as
well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the consolidated financial statements of the Group and the statement of financial position of the Company are properly
drawn up in accordance with the provisions of the Act and Singapore Financial Reporting Standards to give a true and fair view of the
state of affairs of the Group and of the Company as at 31 December 2010 and the results, changes in equity and cash flows of the
Group for the year ended on that date.
Report on other legal and regulatory requirements

In our opinion, the accounting and other records required by the Act to be kept by the Company and by those subsidiaries incorporated
in Singapore of which we are the auditors have been properly kept in accordance with the provisions of the Act.
KPMG LLP
Public Accountants and
Certified Public Accountants
Singapore
8 March 2011
43
Statement of Financial Position

As at 31 December 2010
Group Company
Note 2010 2009 2010 2009
$’000 $’000 $’000 $’000
Non-current assets
Property, plant and equipment 4 155,826 134,926 – –
Intangible assets 5 62,075 61,744 1,779 1,810
Intangible assets arising from service concession arrangements 6 129,494 27,871 – –
Investment property 7 – 2,116 – –
Investments in subsidiaries 8 – – 119,820 130,920
Investments in joint venture 9 – – 3,125 3,125
Investments in associates 10 75,032 102,654 13,320 12,955
Other investments 11 – 99 – –
Financial receivables 12 226,149 155,947 – –
Trade and other receivables 13 15,816 35,312 16,924 18,296
Deferred tax assets 14 1,616 2,761 – –
Total non-current assets 666,008 523,430 154,968 167,106
Current assets
Gross amounts due for contract work 15 254,469 119,994 – –
Inventories 16 26,261 32,497 – –
Trade and other receivables, including derivatives 13 182,398 222,089 608,382 524,628
Other investments 11 2,429 – 2,429 –
Cash and cash equivalents 17 222,286 166,735 65,656 62,860
Total current assets 693,694 549,133 676,467 587,488
Current liabilities
Trade and other payables, including derivatives 18 210,038 265,772 73,480 244,742
Loans and borrowings 19 95,660 45,305 52,538 44,137
Tax payable 10,251 6,794 2,893 –
Total current liabilities 315,949 317,871 128,911 288,879
Net current assets 377,745 231,262 547,556 298,609
Non-current liabilities
Loans and borrowings 19 503,606 355,018 443,668 297,233
Deferred tax liabilities 14 25,640 6,272 – –
Total non-current liabilities 529,246 361,290 443,668 297,233
Net assets 514,507 393,402 258,856 168,482
Equity
Share capital 207,474 105,114 207,474 105,114
Reserve for own shares (1,292) (1,292) (1,292) (1,292)
Capital reserve 4,752 8,627 – –
Foreign currency translation reserve (14,637) 4,543 – –
Hedging reserve (3,560) (6,716) – –
Employees’ share option reserve 18,609 16,780 18,609 16,780
Retained earnings 291,155 238,188 34,065 47,880
Total equity attributable to equity holders of the Company 502,501 365,244 258,856 168,482
Non-controlling interests 12,006 28,158 – –
Total equity 20 514,507 393,402 258,856 168,482
The accompanying notes form an integral part of these financial statements.

44
Consolidated Income Statement

Year ended 31 December 2010
Note 2010 2009

$’000 $’000
Revenue 23 569,737 524,814

Other income 6,855 6,707
Changes in inventories of finished goods and work-in-progress 2,641 1,332
Raw materials and consumables used and subcontractors’ cost (302,961) (309,371)
Staff costs (65,408) (59,428)
Depreciation, amortisation and impairment (27,501) (16,521)
Other expenses (68,089) (57,936)
Finance costs 24 (16,760) (9,259)
Share of profit of associates, net of income tax 1,959 2,634
Profit before income tax 25 100,473 82,972
Income tax expense 26 (11,588) (8,681)
Profit for the year 88,885 74,291
Profit attributable to:

Owners of the Company 88,510 75,036
Non-controlling interests 375 (745)
Earnings per share (cents)

Basic earnings per share 27 10.52 9.51
Diluted earnings per share 27 10.23 9.34

45
Consolidated Statement of Comprehensive Income

2010 2009
$’000 $’000
Other comprehensive income

Foreign currency translation differences for foreign operations (20,310) (5,117)
Share of net fair value gain on derivative financial instruments of associates 424 644
Effective portion of changes in fair value of cash flow hedges 2,301 67
Net change in fair value of cash flow hedges transferred to profit or loss 431 6,069
Share of reserve of associates (102) 102
Other comprehensive (loss)/income for the year, net of income tax (17,256) 1,765
Total comprehensive income for the year 71,629 76,056
Attributable to:
Owners of the Company 72,384 77,204
Non-controlling interests (755) (1,148)
Total comprehensive income for the year 71,629 76,056

46
Consolidated Statement of Changes in Equity
Foreign Total equity

Reserve currency Employees’ attributable Non-
Share for own Capital translation Hedging share option Retained to equity holders controlling Total
capital shares reserve reserve reserve reserve earnings of the Company interests equity
Group $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
At 1 January 2010 105,114 (1,292) 8,627 4,543 (6,716) 16,780 238,188 365,244 28,158 393,402
Total comprehensive income for the year

Profit for the year – – – – – – 88,510 88,510 375 88,885

Foreign currency translation differences for – – – (19,180) – – – (19,180) (1,130) (20,310)
foreign operations
Share of net fair value gain on derivative financial – – – – 424 – – 424 – 424
instruments of associates
Effective portion of changes in fair value of cash – – – – 2,301 – – 2,301 – 2,301
flow hedges
Net change in fair value of cash flow hedges – – – – 431 – – 431 – 431
transferred to profit or loss
Share of reserve of associates – – (102) – – – – (102) – (102)
Total comprehensive (loss)/income for the year – – (102) (19,180) 3,156 – 88,510 72,384 (755) 71,629
Transactions with owners, recorded directly

in equity
Contributions by and distributions to owners
Issue of shares for cash under Employees’ Share 6,181 – – – – – – 6,181 – 6,181
Option Scheme
Issue of shares for cash under warrant 96,179 – – – – – – 96,179 – 96,179
subscription agreements
Value of employee services received for issue of – – – – – 1,829 – 1,829 – 1,829
share options
Transfer to capital reserve – – 1,321 – – – (1,321) – – –
Dividends to equity holders – – – – – – (34,222) (34,222) – (34,222)
Total contributions by and distributions to owners 102,360 – 1,321 – – 1,829 (35,543) 69,967 – 69,967
Changes in ownership interests in subsidiaries

Acquisition of non-controlling interests without – – (5,094) – – – – (5,094) (15,397) (20,491)
a change in control
Total changes in ownership interests in subsidiaries – – (5,094) – – – – (5,094) (15,397) (20,491)
Total transactions with owners 102,360 – (3,773) – – 1,829 (35,543) 64,873 (15,397) 49,476
At 31 December 2010 207,474 (1,292) 4,752 (14,637) (3,560) 18,609 291,155 502,501 12,006 514,507
47
48
Consolidated Statement of Changes in Equity (cont’d)
Foreign Total equity

Reserve currency Employees’ attributable Non-
Share for own Capital translation Hedging share option Retained to equity holders controlling Total
capital shares reserve reserve reserve reserve earnings of the Company interests equity
Group $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
At 1 January 2009 99,118 – 7,204 9,257 (13,496) 12,971 182,493 297,547 10,352 307,899
Total comprehensive income for the year

Profit/(loss) for the year – – – – – – 75,036 75,036 (745) 74,291

Foreign currency translation differences for – – – (4,714) – – – (4,714) (403) (5,117)
foreign operations
Share of net fair value gain on derivative financial – – – – 644 – – 644 – 644
instruments of associates
Effective portion of changes in fair value of cash – – – – 67 – – 67 – 67
flow hedges
Net change in fair value of cash flow hedges – – – – 6,069 – – 6,069 – 6,069
transferred to profit or loss
Share of reserve of associates – – 102 – – – – 102 – 102
Total comprehensive income/(loss) for the year – – 102 (4,714) 6,780 – 75,036 77,204 (1,148) 76,056
Transactions with owners, recorded directly

in equity
Contributions by and distributions to owners
Issue of shares for cash under Employees’ Share 3,863 – – – – – – 3,863 – 3,863
Option Scheme
Issue of shares for cash under warrant 2,133 – – – – – – 2,133 – 2,133
subscription agreements
Own shares acquired – (1,292) – – – – – (1,292) – (1,292)
Value of employee services received for issue of – – – – – 3,809 – 3,809 – 3,809
share options
Transfer to capital reserve – – 1,321 – – – (1,321) – – –
Dividends to equity holders – – – – – – (18,020) (18,020) – (18,020)
Total contributions by and distributions to owners 5,996 (1,292) 1,321 – – 3,809 (19,341) (9,507) – (9,507)
Changes in ownership interests in subsidiaries

Acquisition of non-controlling interests – – – – – – – – 18,954 18,954
Total changes in ownership interests in subsidiaries – – – – – – – – 18,954 18,954
Total transactions with owners 5,996 (1,292) 1,321 – – 3,809 (19,341) (9,507) 18,954 9,447
At 31 December 2009 105,114 (1,292) 8,627 4,543 (6,716) 16,780 238,188 365,244 28,158 393,402

Consolidated Cash Flow Statement

Note 2010 2009

$’000 $’000
Cash flows from operating activities

Profit before income tax 100,473 82,972
Adjustments for:
Employees’ share option expense 1,829 3,809
Fair value (gain)/loss on derivative financial instruments (754) 479
Gain on sale of investment property 25 (1,186) –
Remeasurement to fair value of an associate to joint venture 25 (22,787) –
Gain on sale of other investments – (44)
Loss on sale of property, plant and equipment 25 380 1,392
Share of profit of associates, net of income tax (1,959) (2,634)
Depreciation, amortisation and impairment 27,501 16,521
Finance costs 16,760 9,259
Interest income (3,125) (3,258)
Impairment of trade and other receivables 25 1,526 1,845
Impairment of investments 25 264 2,058
Allowance for inventory obsolescence 16 1,412 863
120,334 113,262
Change in inventories 4,840 2,319
Change in gross amounts due for contract work (134,475) (26,007)
Change in trade and other receivables 10,154 (67,176)
Change in financial receivables 7,142 40,665
Change in intangible assets arising from service concession arrangements 4,291 –
Change in trade and other payables (53,448) 5,316
Cash generated from operating activities (41,162) 68,379
Income tax paid (8,305) (7,773)
Net cash (used in)/from operating activities (49,467) 60,606
Cash flows from investing activities

Acquisition of property, plant and equipment 4 (28,111) (8,594)
Acquisition of intangible assets (12,858) (29,669)
Acquisition of non-controlling interests 29 (20,491) –
Acquisition of a subsidiary by a joint venture/subsidiaries, net of cash acquired 29 (27,212) (19,965)
Investment in available-for-sale money market instrument (2,429) –
Additional investment in an associate (23,691) (27,626)
Proceeds from sale of investment property 3,237 –
Proceeds from sale of property, plant and equipment 937 364
Proceeds from sale of other investments – 853
Dividends received from associates 10,179 1,260
Change in amounts due from related parties (non-trade) 1,955 (12,393)
Interest received 2,760 2,912
Net cash used in investing activities (95,724) (92,858)

49
Consolidated Cash Flow Statement (cont’d)

Note 2010 2009

$’000 $’000
Cash flows from financing activities

Proceeds from exercise of share options and warrants 102,360 5,996
Purchase of treasury shares – (1,292)
Proceeds from borrowings 383,447 425,698
Repayment of borrowings (221,832) (291,003)
Payment of finance lease liabilities (73) (99)
Interest paid (16,297) (8,689)
Dividends paid to equity holders of the Company (34,222) (18,020)
Increase in deposits pledged (204) –
Net cash from financing activities 213,179 112,591
Net increase in cash and cash equivalents 67,988 80,339

Cash and cash equivalents at 1 January 166,735 91,480
Effect of exchange rate fluctuations on cash held (12,641) (5,084)
Cash and cash equivalents at 31 December 17 222,082 166,735

50
Notes to the
Financial Statements
These notes form an integral part of the financial statements.
The financial statements were authorised for issue by the Board of Directors on 8 March 2011.
1 DOMICILE AND ACTIVITIES
Hyflux Ltd (the “Company”) is incorporated in the Republic of Singapore. The address of the Company’s registered office is
Hyflux Building, 202 Kallang Bahru, Singapore 339339.
The consolidated financial statements relate to the Company and its subsidiaries (together referred to as the “Group” and
individually as “Group entities”) and the Group’s interests in associates and jointly controlled entities.
The principal activities of the Company are those relating to investment holding.
The principal activities of the subsidiaries comprise the following:
Water
– Seawater desalination, raw water purification, wastewater cleaning, water recycling, water reclamation and ultra pure water
production for municipal and industrial clients as well as home consumer filtration and purification products; and
– Design, building and sale of water treatment plants, seawater desalination plants, wastewater treatment plants and water
recycling plants under service concession arrangements.
Renewable Resources Management

– Development of membrane applications in resource recovery, waste recycling and energy reclamation, including applications
such as used oil recovery and recycling;
– Development and commercialisation of specialty materials, such as L-lactic acid from natural renewable resources; and
– Separation, concentration and purification treatments for manufacturing process streams.
2 BASIS OF PREPARATION
2.1 Statement of compliance

The financial statements have been prepared in accordance with Singapore Financial Reporting Standards (FRS).
2.2 Basis of measurement

The financial statements have been prepared on the historical cost basis except for derivative financial instruments which are
measured at fair value.
2.3 Functional and presentation currency

These financial statements are presented in Singapore dollars, which is the Company’s functional currency. Other significant
entities within the Group have Chinese Renminbi and Algerian Dinar as their functional currency. All financial information
presented in Singapore dollars has been rounded to the nearest thousand, unless otherwise stated.
2.4 Use of estimates and judgements

The preparation of the financial statements in conformity with FRSs requires management to make judgements, estimates
and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and
expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in
the period in which the estimates are revised and in any future periods affected.
51
Notes to the
Financial Statements (cont’d)
2 BASIS OF PREPARATION (cont’d)
2.4 Use of estimates and judgements (cont’d)

Information about critical judgements in applying accounting policies that have the most significant effect on the amounts
recognised in the financial statements is included in note 5 on capitalisation of development costs.
Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment within
the next financial year is included in the following notes:
• Note 4 – residual values and useful lives of property, plant and equipment;
• Note 5 – useful lives and recoverability of development projects;
• Note 22 – recoverability of trade and other receivables; and
• Note 34 – contingencies.
2.5 Changes in accounting policies

Overview
On the adoption of new and revised FRSs as of 1 January 2010, the Group changed its accounting policies in the following areas:
• Accounting for business combinations

• Accounting for acquisition of non-controlling interest and disposal of interest in subsidiary that resulted in loss of control
Accounting for business combinations

From 1 January 2010, the Group has applied FRS 103 Business Combinations (2009) in accounting for business combinations.
Business combinations are now accounted for using the acquisition method as at the acquisition date (see note 3.1).
Previously, business combinations were accounted for under the purchase method. The cost of an acquisition was measured at
the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs
directly attributable to the acquisition. The excess of the Group’s interest in the net fair value of the identifiable assets, liabilities
and contingent liabilities over the cost of acquisition was credited to profit or loss in the period of the acquisition. For business
acquisitions that were achieved in stages, any existing equity interests in the acquiree were not re-measured to their fair value.
Contingent consideration was recognised as an adjustment to the cost of acquisition only when it was probable and can be
measured reliably.
The change in accounting policy has been applied prospectively to new business combinations occurring on or after
1 January 2010. As a result of adopting the change in accounting policy, the Group recorded a gain arising from remeasurement
to fair value arising from acquisition of additional interest in an associate to be a joint venture as disclosed in note 25.
Accounting for acquisitions of non-controlling interests and disposal of interest in subsidiary that resulted in loss
of control
From 1 January 2010, the Group has applied FRS 27 Consolidated and Separate Financial Statements (2009) to account for
acquisitions of non-controlling interests and disposal of interest in subsidiary that resulted in loss of control.
Previously, goodwill was recognised on the acquisition of non-controlling interests in a subsidiary, which represented the
excess of the cost of the additional investment over the carrying amount of the interest in the net assets acquired at the date
of the transaction. For disposal of interest in subsidiary that resulted in loss of control, any retained equity interests were
not remeasured to their fair value and the gain or loss arising from the disposal was recognised on the portion of equity
interest disposed.
The change in accounting policies have been applied prospectively.
52
Notes to the
3 SIGNIFICANT ACCOUNTING POLICIES
The accounting policies set out below have been applied consistently to all periods presented in these financial statements,
and have been applied consistently by Group entities, except as explained in note 2.5 which addresses changes in
accounting policies.
3.1 Basis of consolidation

Business combinations
Business combinations are accounted for using the acquisition method as at the acquisition date, which is the date on which
control is transferred to the Group. Control is the power to govern the financial and operating policies of an entity so as to
obtain benefits from its activities. In assessing control, the Group takes into consideration potential voting rights that are
currently exercisable.
The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts
are generally recognised in profit or loss.
Costs related to the acquisition, other than those associated with the issue of debt or equity securities, that the Group incurs in
connection with a business combination are expensed as incurred.
Any contingent consideration payable is recognised at fair value at the acquisition date. If the contingent consideration is classified
as equity, it is not remeasured and settlement is accounted for within equity. Otherwise, subsequent changes to the fair value of
the contingent consideration are recognised in profit or loss.
When share-based payment awards (replacement awards) are required to be exchanged for awards held by the acquiree’s
employees (acquiree’s awards) and relate to past services, then all or a portion of the amount of the acquirer’s replacement
awards is included in measuring the consideration transferred in the business combination. This determination is based on the
market-based value of the replacement awards compared with the market-based value of the acquiree’s awards and the extent
to which the replacement awards relate to past and/or future service.
For business acquisitions that were achieved in stages, the Group remeasures any existing interests in the acquiree and
recognises the resulting gain or loss in profit or loss. Subsequently, it is accounted for as a jointly controlled entity or a subsidiary,
depending on the level of control obtained.
Subsidiaries
Subsidiaries are entities controlled by the Group. The financial statements of subsidiaries are included in the consolidated financial
statements from the date that control commences until the date that control ceases.
The accounting policies of subsidiaries have been changed when necessary to align them with the policies adopted by the Group.
Losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling interests even if doing so
causes the non-controlling interests to have a deficit balance.
Loss of control
Upon the loss of control, the Group derecognises the assets and liabilities of the subsidiary, any non-controlling interests and the
other components of equity related to the subsidiary. Any surplus or deficit arising on the loss of control is recognised in profit
or loss. If the Group retains any interest in the previous subsidiary, then such interest is measured at fair value at the date that
control is lost. Subsequently, it is accounted for as a jointly-controlled entity, an equity-accounted investee or as an available-for-
sale financial asset depending on the level of influence retained.
Joint ventures
Joint ventures are those entities over whose activities the Group has joint control, established by contractual agreement and
requiring unanimous consent for strategic financial and operating decisions. Joint ventures are accounted for using proportionate
consolidation. The financial statements of joint ventures are proportionately consolidated from the date that joint control
commences until the date that joint control ceases. The accounting policies of joint ventures have been changed where necessary
to align them with the policies adopted by the Group.
53
Notes to the
3 SIGNIFICANT ACCOUNTING POLICIES (cont’d)
3.1 Basis of consolidation (cont’d)

Associates
Associates are those entities in which the Group has significant influence, but not control, over their financial and operating
policies. Significant influence is presumed to exist when the Group holds between 20% and 50% of voting power of
another entity.
Associates are accounted for using the equity method and are recognised initially at cost. The Group’s investments include
goodwill identified on acquisition, net of accumulated impairment losses. The financial statements include the Group’s share
of the income and expenses and equity movements of associates, after adjustments to align the accounting policies with
those of the Group, from the date that significant influence commences until the date that significant influence ceases. When
the Group’s share of losses exceeds its interest in an associate, the carrying amount of that interest, including any long-term
investments, is reduced to nil, and the recognition of further losses is discontinued except to the extent that the Group has an
obligation or has made payments on behalf of the investee.
Acquisition of non-controlling interests

Acquisitions of non-controlling interests are accounted for as transactions with owners in their capacity as owners and
therefore no goodwill is recognised as a result of such transactions. The adjustments to non-controlling interests are based on
a proportionate amount of the net assets of the subsidiary.
Transactions eliminated on consolidation

Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are
eliminated in preparing the consolidated financial statements.
Unrealised gains arising from transactions with joint ventures are eliminated to the extent of the Group’s interest in the joint
ventures. Unrealised losses are eliminated in the same way as unrealised gains except that losses are recognised immediately
when they represent a reduction in the net realisable value of assets or an impairment loss. Balances with joint ventures are
eliminated to the extent of the Group’s interest in the joint ventures.
Unrealised gains arising from transactions with associates are eliminated against the investment to the extent of the Group’s
interest in the associates. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there
is no evidence of impairment.
Accounting for subsidiaries, joint ventures and associates by the Company

Investments in subsidiaries, joint ventures and associates are stated in the Company’s statement of financial position at cost
less accumulated impairment losses.
3.2 Foreign currency

Foreign currency transactions
Transactions in foreign currencies are translated to the respective functional currencies of Group entities at the exchange rates at
the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated
to the functional currency at the exchange rate at that date. The foreign currency gain or loss on monetary items is the difference
between amortised cost in the functional currency at the beginning of the period, adjusted for effective interest and payments
during the period, and the amortised cost in foreign currency translated at the exchange rate at the end of the reporting period.
Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are translated to the
functional currency at the exchange rate at the date that the fair value was determined. Foreign currency differences arising on
translation are recognised in profit or loss, except for differences arising on the translation of available-for-sale equity instruments,
or qualifying cash flow hedges, which are recognised in other comprehensive income. Non-monetary items that are measured
in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction.
54
Notes to the
3.2 Foreign currency (cont’d)

Foreign operations
The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated
to Singapore dollars at exchange rates at the reporting date. The income and expenses of foreign operations, excluding foreign
operations in hyperinflationary economies, are translated to Singapore dollars at exchange rates at the dates of the transactions.
Goodwill and fair value adjustments arising on the acquisition of a foreign operation on or after 1 January 2005 are treated as
assets and liabilities of the foreign operation and translated at the closing rate. For acquisitions prior to 1 January 2005, the
exchange rates at the date of acquisition were used.
Foreign currency differences are recognised in other comprehensive income, and presented in the foreign currency translation
reserve (translation reserve) in equity. However, if the operation is a non-wholly-owned subsidiary, then the relevant proportionate
share of the translation difference is allocated to the non-controlling interests. When a foreign operation is disposed of such
that control, significant influence or joint control is lost, the cumulative amount in the translation reserve related to that foreign
operation is reclassified to profit or loss as part of the gain or loss on disposal. When the Group disposes of only part of its
interest in a subsidiary that includes a foreign operation while retaining control, the relevant proportion of the cumulative amount
is reattributed to non-controlling interests. When the Group disposes of only part of its investment in an associate or joint venture
that includes a foreign operation while retaining significant influence or joint control, the relevant proportion of the cumulative
amount is reclassified to profit or loss.
When the settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor likely in the
foreseeable future, foreign exchange gains and losses arising from such a monetary item which is considered to form part of a
net investment in a foreign operation are recognised in other comprehensive income, and are presented as equity in the foreign
currency translation reserve.
3.3 Financial instruments

Non-derivative financial assets
The Group initially recognises loans and receivables and deposits on the date that they are originated. All other financial assets
are recognised initially on the trade date at which the Group becomes a party to the contractual provisions of the instrument.
The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the
rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards
of ownership of the financial asset are transferred. Any interest in transferred financial assets that is created or retained by the
Group is recognised as a separate asset or liability.
Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when,
the Group has a legal right to offset the amounts and intends either to settle on a net basis or to realise the asset and settle the
liability simultaneously.
The Group has the following non-derivative financial assets: loans and receivables and available-for-sale financial assets.
Loans and receivables

Loans and receivables are financial assets with fixed or determinable payments that are not quoted in an active market. Such
assets are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, loans
and receivables are measured at amortised cost using the effective interest method, less any impairment losses.
Loans and receivables comprise trade and other receivables and financial receivables arising from including service
concession arrangements.
Cash and cash equivalents comprise cash balances and bank deposits.
55
Notes to the
3.3 Financial instruments (cont’d)

Non-derivative financial assets (cont’d)
Loans and receivables (cont’d)
The Group recognises a financial asset arising from a service concession arrangement when it has an unconditional contractual
right to receive cash or another financial asset from or at the direction of the grantor for the construction or upgrade services
provided. Such financial assets are measured at fair value upon initial recognition. Subsequent to initial recognition, the financial
assets are measured at amortised cost.
If the Group is paid for the construction services partly by a financial asset and partly by an intangible asset, each component of
the consideration received or receivable is accounted for separately and is recognised initially at the fair value of the consideration
received or receivable (see also note 3.5).
Available-for-sale financial assets

Available-for-sale financial assets are non-derivative financial assets that are designated as available-for-sale and that are not
classified in any of the previous categories. The Group’s investments in equity securities are classified as available-for-sale
financial assets.
Where an investment in equity securities classified as available-for-sale does not have a quoted market price in an active market
and other methods of determining fair value do not result in a reasonable estimate, the investment is measured at cost less
impairment losses.
Non-derivative financial liabilities

All financial liabilities are recognised initially on the trade date at which the Group becomes a party to the contractual provisions
of the instrument.
The Group derecognises a financial liability when its contractual obligations are discharged or cancelled or expired.
Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when,
the Group has a legal right to offset the amounts and intends either to settle on a net basis or to realise the asset and settle the
liability simultaneously.
The Group has the following non-derivative financial liabilities: loans and borrowings, and trade and other payables.
Such financial liabilities are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to
initial recognition, these financial liabilities are measured at amortised cost using the effective interest method.
Intra-group financial guarantees

Financial guarantees are financial instruments issued by the Group that requires the issuer to make specified payments to
reimburse the holder for the loss incurred because a specified debtor fails to meet payment when due in accordance with the
original or modified terms of a debt instrument.
Financial guarantees are recognised initially at fair value and are classified as financial liabilities. Subsequent to initial measurement,
the financial guarantees are stated at the higher of the initial fair value less cumulative amortisation and the amount that would
be recognised if they were accounted for as contingent liabilities. When financial guarantees are terminated before their original
expiry date, the carrying amount of the financial guarantees is transferred to the income statement.
Share capital
Ordinary shares
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares and share options
are recognised as a deduction from equity, net of any tax effects.
56
Notes to the
3.3 Financial instruments (cont’d)

Share capital (cont’d)
Repurchase of share capital (treasury shares)
When share capital recognised as equity is repurchased, the amount of the consideration paid, which includes directly
attributable costs, net of any tax effects, is recognised as a deduction from equity. Repurchased shares are classified as treasury
shares and are presented as a deduction from total equity. When treasury shares are sold or reissued subsequently, the amount
received is recognised as an increase in equity, and the resulting surplus or deficit on the transaction is transferred to / from
retained earnings.
Derivative financial instruments, including hedge accounting

The Group holds derivative financial instruments to hedge its foreign currency risk exposures. Embedded derivatives are
separated from the host contract and accounted for separately if the economic characteristics and risks of the host contract and
the embedded derivative are not closely related, a separate instrument with the same terms as the embedded derivative would
meet the definition of a derivative, and the combined instrument is not measured at fair value through profit or loss.
On initial designation of the hedge, the Group formally documents the relationship between the hedging instrument and the
hedged item, including the risk management objectives and strategy in undertaking the hedge transaction, together with the
methods that will be used to assess the effectiveness of the hedging relationship. The Group makes an assessment, both at the
inception of the hedge relationship as well as on an ongoing basis, whether the hedging instruments are expected to be “highly
effective” in offsetting the changes in the fair value or cash flows of the respective hedged items during the period for which the
hedge is designated, and whether the actual results of each hedge are within a range of 80% - 125%. For a cash flow hedge of
a forecast transaction, the transaction should be highly probable to occur and should present an exposure to variations in cash
flows that could ultimately affect reported net income.
Derivatives are recognised initially at fair value; attributable transaction costs are recognised in profit or loss as incurred.
Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are accounted for as
described below.
Cash flow hedges

When a derivative is designated as the hedging instrument in a hedge of the variability in cash flows attributable to a particular
risk associated with a recognised asset or liability or a highly probable forecast transaction that could affect profit or loss, the
effective portion of changes in the fair value of the derivative is recognised in other comprehensive income and presented in the
hedging reserve in equity. The amount recognised in other comprehensive income is removed and included in profit or loss in
the same period as the hedged cash flows affect profit or loss under the same line item in the income statement as the hedged
item. Any ineffective portion of changes in the fair value of the derivative is recognised immediately in profit or loss.
If the hedging instrument no longer meets the criteria for hedge accounting, expires or is sold, terminated, or exercised, or if the
designation is revoked, hedge accounting is discontinued prospectively. The cumulative gain or loss previously recognised in
other comprehensive income and presented in the hedging reserve in equity remains there until the forecast transaction affects
profit or loss. When the hedged item is a non-financial asset, the amount recognised in other comprehensive income is transferred
to the carrying amount of the asset when the asset is recognised. If the forecast transaction is no longer expected to occur, the
balance in other comprehensive income is recognised immediately in profit or loss. In other cases, the amount recognised in
other comprehensive income is transferred to profit or loss in the same period that the hedged item affects profit or loss.
Separable embedded derivatives

Changes in the fair value of separable embedded derivatives are recognised immediately in profit or loss.
Other non-trading derivatives

When a derivative financial instrument is not held for trading, and is not designated in a qualifying hedge relationship, all changes
in its fair value are recognised immediately in profit or loss.
57
Notes to the
3.4 Property, plant and equipment

Recognition and measurement
Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses.
Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of self-constructed assets includes
the cost of materials and direct labour, any other costs directly attributable to bringing the assets to a working condition for their
intended use, the costs of dismantling and removing the items and restoring the site on which they are located, and capitalised
borrowing costs. Cost may also include transfers from other comprehensive income of any gain or loss on qualifying cash flow
hedges of foreign currency purchases of property, plant and equipment. Purchased software that is integral to the functionality
of the related equipment is capitalised as part of that equipment.
When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major
components) of property, plant and equipment.
Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from
disposal with the carrying amount of property, plant and equipment, and are recognised net within other expenses in profit or loss.
Subsequent costs
The cost of replacing a part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is
probable that the future economic benefits embodied within the part will flow to the Group, and its cost can be measured reliably.
The carrying amount of the replaced part is derecognised. The costs of the day-to-day servicing of property, plant and equipment
are recognised in profit or loss as incurred.
Depreciation
Depreciation is calculated over the depreciable amount, which is the cost of an asset, or other amount substituted for cost, less
its residual value.
Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each part of an item of property,
plant and equipment, since this most closely reflects the expected pattern of consumption of the future economic benefits
embodied in the asset. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is
reasonably certain that the Group will obtain ownership by the end of the lease term. Construction-in-progress is not depreciated.
The estimated useful lives for the current and comparative periods are as follows:
Plant and machinery – 4 to 10 years

Motor vehicles – 4 to 5 years
Computers – 1 to 5 years
Office equipment – 4 to 5 years
Leasehold properties and improvements – 4 to 5 years or over the lease period
Furniture and fittings – 4 to 5 years
Depreciation methods, useful lives and residual values are reviewed at each financial year-end and adjusted if appropriate.
3.5 Intangible assets

Goodwill
Acquisitions prior to 1 January 2001
Goodwill represents the excess of the cost of the acquisition over the Group’s interest in the net fair value of the identifiable assets
and liabilities of the acquiree.
Goodwill and negative goodwill on acquisitions were written off against retained profits in the year of acquisition.
Goodwill and negative goodwill that have previously been taken to reserves are not taken to the income statement when (a) the
business is disposed of or (b) the goodwill is impaired.
58
Notes to the
3.5 Intangible assets (cont’d)

Goodwill (cont’d)
Acquisitions occurring between 1 January 2001 and 1 January 2005
Goodwill represents the excess of the cost of the acquisition over the Group’s interest in the net fair value of the identifiable assets
and liabilities of the acquiree.
Goodwill arising on the acquisition of subsidiaries and joint ventures is presented in intangible assets. Goodwill arising on the
acquisition of associates is presented together with investments in associates.
Goodwill was stated at cost from the date of initial recognition and amortised over its estimated useful life of not more than 20
years. On 1 January 2005, the Group discontinued amortisation of this goodwill. This remaining goodwill balance is subject to
testing for impairment.
Negative goodwill was derecognised by crediting retained profits on 1 January 2005.
Acquisitions on or after 1 January 2005

Goodwill represents the excess of the cost of the acquisition over the Group’s interest in the net fair value of the identifiable assets,
liabilities and contingent liabilities of the acquiree.
Goodwill arising on the acquisition of subsidiaries and joint ventures is presented in intangible assets. Goodwill arising on the
acquisition of associates is presented together with investments in associates.
Goodwill is measured at cost less accumulated impairment losses, and tested for impairment. Negative goodwill is recognised
immediately in the income statement.
Research and development

Expenditure on research activities, undertaken with the prospect of gaining new scientific or technical knowledge and
understanding, is recognised in profit or loss as incurred.
Development activities involve a plan or design for the production of new or substantially improved products and processes.
Development expenditure is capitalised only if development costs can be measured reliably, the product or process is technically
and commercially feasible, future economic benefits are probable, and the Group intends to and has sufficient resources to
complete development and to use or sell the asset. The expenditure capitalised includes the cost of materials, direct labour,
overhead costs that are directly attributable to preparing the asset for its intended use, and capitalised borrowing costs. Other
development expenditure is recognised in profit or loss as incurred.
Capitalised development expenditure is measured at cost less accumulated amortisation and accumulated impairment losses.
Service concession arrangements

The Group recognises an intangible asset arising from a service concession arrangement when it has a right to charge for usage
of the concession infrastructure. An intangible asset received as consideration for providing construction or upgrade services
in a service concession arrangement is measured at fair value upon initial recognition. Subsequent to initial recognition the
intangible asset is measured at cost, which includes capitalised borrowing costs, less accumulated amortisation and accumulated
impairment losses.
Other intangible assets

Other intangible assets that are acquired by the Group and have finite useful lives are measured at cost less accumulated
amortisation and accumulated impairment losses.
Subsequent expenditure
Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to
which it relates. All other expenditure, including expenditure on internally generated goodwill and brands, is recognised in profit
or loss as incurred.
59
Notes to the
3.5 Intangible assets (cont’d)

Amortisation
Amortisation is calculated over the cost of the asset, less its residual value.
Amortisation is recognised in profit or loss on a straight-line basis over the estimated useful lives of intangible assets, other
than goodwill, from the date that they are available for use, since this most closely reflects the expected pattern of consumption
of the future economic benefits embodied in the asset. The estimated useful lives for the current and comparative periods are
as follows:
Intellectual property rights – 10 years

Capitalised development costs – 8 years (2009: 10-15 years)
Licensing fees – 10 to 20 years
Service concession arrangements – 10 to 25 years
Amortisation methods, useful lives and residual values are reviewed at each financial year-end and adjusted if appropriate.
During the year, the Group revised its estimates for the useful lives of development costs from 10-15 years to 8 years. The reasons
and impact of the change are discussed in note 5.
The estimated useful life of an intangible asset in a service concession arrangement is the period from when the Group is able
to charge the public for the use of the infrastructure to the end of the concession period.
3.6 Investment property

Investment property is property held either to earn rental income or for capital appreciation or for both, but not for sale in the
ordinary course of business, or use in the production or supply of goods or services or for administrative purposes.
Investment properties are measured at cost less accumulated depreciation and impairment losses.
Depreciation on investment properties is recognised in the income statement on a straight-line basis over the lease term of
26 years.
Depreciation methods, useful lives and residual values are reviewed at each financial year-end, and adjusted if appropriate.
3.7 Leased assets

Leases in which the Group assumes substantially all the risks and rewards of ownership are classified as finance leases. Upon
initial recognition, the leased asset is measured at an amount equal to the lower of its fair value and the present value of the
minimum lease payments. Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy
applicable to that asset.
Other leases are operating leases and the leased assets are not recognised in the Group’s statement of financial position.
3.8 Inventories
Inventories are measured at the lower of cost and net realisable value. The cost of inventories is based on the weighted average
cost principle, and includes expenditure incurred in acquiring the inventories, production or conversion costs and other costs
incurred in bringing them to their existing location and condition. In the case of manufactured inventories and work in progress,
cost includes an appropriate share of production overheads based on normal operating capacity. Cost may also include
transfers from other comprehensive income of any gain or loss on qualifying cash flow hedges of foreign currency purchases
of inventories.
Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and
selling expenses.
60
Notes to the
3.9 Gross amounts due for contract work

Gross amounts due for contract work represent the gross unbilled amount expected to be collected from customers for contract
work performed to date. It is measured at cost plus profit recognised to date less progress billings and recognised losses. Cost
includes all expenditure related directly to specific projects and an allocation of fixed and variable overheads incurred in the
Group’s contract activities based on normal operating capacity.
Gross amounts due for contract work are presented as part of assets in the statement of financial position. If payments
received from customers exceed the income recognised, the difference is presented as part of liabilities in the statement
of financial position.
3.10 Impairment
Financial assets (including receivables)
A financial asset not carried at fair value through profit or loss is assessed at each reporting date to determine whether there is
objective evidence that it is impaired. A financial asset is impaired if objective evidence indicates that a loss event has occurred
after the initial recognition of the asset, and that the loss event had a negative effect on the estimated future cash flows of that
asset that can be estimated reliably.
Objective evidence that financial assets are impaired can include default or delinquency by a debtor, restructuring of an amount
due to the Group on terms that the Group would not consider otherwise, and indications that a debtor will enter bankruptcy.
The Group considers evidence of impairment for receivables at both a specific asset and collective level. All individually significant
receivables are assessed for specific impairment. All individually significant receivables found not to be specifically impaired are
then assessed collectively for any impairment that has been incurred but not yet identified. Receivables that are not individually
significant are collectively assessed for impairment by grouping together receivables with similar risk characteristics.
In assessing collective impairment, the Group uses historical trends of the probability of default, timing of recoveries and the
amount of loss incurred, adjusted for management’s judgement as to whether current economic and credit conditions are such
that the actual losses are likely to be greater or less than suggested by historical trends.
An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying
amount and the present value of the estimated future cash flows discounted at the asset’s original effective interest rate. Losses
are recognised in profit or loss and reflected in an allowance account against receivables. Interest on the impaired asset continues
to be recognised through the unwinding of the discount. When a subsequent event causes the amount of impairment loss to
decrease, the decrease in impairment loss is reversed through profit or loss.
Impairment losses on available-for-sale investment securities are recognised by transferring the cumulative loss that has been
recognised in other comprehensive income, and presented in the fair value reserve in equity, to profit or loss. The cumulative
loss that is removed from other comprehensive income and recognised in profit or loss is the difference between the acquisition
cost, net of any principal repayment and amortisation, and the current fair value, less any impairment loss previously recognised
in profit or loss. Changes in impairment attributable to time value are reflected as a component of interest income.
Any subsequent recovery in the fair value of an impaired available-for-sale equity security is recognised in other
comprehensive income.
Non-financial assets
The carrying amounts of the Group’s non-financial assets, other than investment property, inventories and deferred tax assets,
are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, the
asset’s recoverable amount is estimated. For goodwill and intangible assets that have indefinite useful lives or that are not yet
available for use, the recoverable amount is estimated each year at the same time.
61
Notes to the
3.10 Impairment (cont’d)

Non-financial assets (cont’d)
The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that
reflects current market assessments of the time value of money and the risks specific to the asset. For the purpose of impairment
testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generates cash inflows
from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the “cash-generating unit,
or CGU”). Subject to an operating segment ceiling test, for the purposes of goodwill impairment testing, CGUs to which goodwill
has been allocated are aggregated so that the level at which impairment is tested reflects the lowest level at which goodwill is
monitored for internal reporting purposes. Goodwill acquired in a business combination is allocated to groups of CGUs that are
expected to benefit from the synergies of the combination.
The Group’s corporate assets do not generate separate cash inflows. If there is an indication that a corporate asset may be
impaired, the recoverable amount is determined for the CGU to which the corporate asset belongs.
An impairment loss is recognised if the carrying amount of an asset or its CGU exceeds its estimated recoverable amount.
Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of CGUs are allocated first to reduce
the carrying amount of any goodwill allocated to the units, and then to reduce the carrying amounts of the other assets in the unit
(group of units) on a pro rata basis.
An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior periods
are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is
reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed
only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of
depreciation or amortisation, if no impairment loss had been recognised.
Goodwill that forms part of the carrying amount of an investment in an associate is not recognised separately, and therefore is
not tested for impairment separately. Instead, the entire amount of the investment in an associate is tested for impairment as a
single asset when there is objective evidence that the investment in an associate may be impaired.
3.11 Non-current assets held for sale

Non-current assets, or disposal groups comprising assets and liabilities, that are expected to be recovered primarily through sale
rather than through continuing use, are classified as held for sale. Immediately before classification as held for sale, the assets,
or components of a disposal group, are remeasured in accordance with the Group’s accounting policies. Thereafter generally
the assets, or disposal group, are measured at the lower of their carrying amount and fair value less costs to sell. Any impairment
loss on a disposal group is first allocated to goodwill, and then to remaining assets and liabilities on a pro rata basis, except that
no loss is allocated to inventories, financial assets, deferred tax assets, employee benefit assets, and investment property, which
continue to be measured in accordance with the Group’s accounting policies. Impairment losses on initial classification as held
for sale, and subsequent gains or losses on remeasurement, are recognised in profit or loss. Gains are not recognised in excess
of any cumulative impairment loss.
3.12 Employee benefits

Defined contribution plans
A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and
will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution pension plans
are recognised as an employee benefit expense in profit or loss in the periods during which services are rendered by employees.
Short-term employee benefits

Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service
is provided.
A liability is recognised for the amount expected to be paid under short-term cash bonus or profit-sharing plans if the Group has a
present legal or constructive obligation to pay this amount as a result of past service provided by the employee, and the obligation
can be estimated reliably.
62
Notes to the
3.12 Employee benefits (cont’d)

Share-based payment transactions
The grant date fair value of share-based payment awards granted to employees is recognised as an employee expense, with a
corresponding increase in equity, over the period that the employees unconditionally become entitled to the awards. The amount
recognised as an expense is adjusted to reflect the number of awards for which the related service and non-market vesting
conditions are expected to be met, such that the amount ultimately recognised as an expense is based on the number of awards
that do meet the related service and non-market performance conditions at the vesting date. For share-based payment awards
with non-vesting conditions, the grant date fair value of the share-based payment is measured to reflect such conditions and there
is no true-up for differences between expected and actual outcomes.
The fair value of the amount payable to employees in respect of share appreciation rights, which are settled in cash, is recognised
as an expense with a corresponding increase in liabilities, over the period that the employees unconditionally become entitled
to payment. The liability is remeasured at each reporting date and at settlement date. Any changes in the fair value of the liability
are recognised as personnel expense in profit or loss.
Share-based payment arrangements in which the Group receives goods or services as consideration for its own equity
instruments are accounted for as equity-settled share-based payment transactions, regardless of how the equity instruments
are obtained by the Group.
3.13 Provisions
A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be
estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are
determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time
value of money and the risks specific to the liability. The unwinding of the discount is recognised as finance cost.
3.14 Revenue
Construction revenue - Construction contracts and sale of plants under service concession arrangements
Contract revenue includes the initial amount agreed in the contract plus any variations in contract work, claims and incentive
payments, to the extent that it is probable that they will result in revenue and can be measured reliably. As soon as the outcome of a
construction contract can be estimated reliably, contract revenue is recognised in profit or loss in proportion to the stage of completion
of the contract. Contract expenses are recognised as incurred unless they create an asset related to future contract activity.
The stage of completion is assessed by reference to the proportion that contract costs incurred for work performed to date bear
to the estimated total contract costs. When the outcome of a construction contract cannot be estimated reliably, contract revenue
is recognised only to the extent of contract costs incurred that are likely to be recoverable. An expected loss on a contract is
recognised immediately in profit or loss. Net revenue from the sale of plants under service concession arrangements previously
not recognised as construction revenue under the service concession arrangements is recognised when significant risks and
rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated costs can be
estimated reliably, and the amount of revenue can be measured reliably.
Revenue relating to construction or upgrade services under a service concession arrangement is recognised based on the stage
of completion of the work performed, consistent with the Group’s accounting policy on recognising revenue on construction
contract (see above). Operation or service revenue is recognised in the period in which the services are provided by the Group.
When the Group provides more than one service in a service concession arrangement, the consideration received is allocated
by reference to the relative fair values of the services delivered.
Operating and maintenance income

Revenue from the provision of operating and maintenance services is recognised when the services are rendered.
63
Notes to the
3.14 Revenue (cont’d)

Goods sold
Revenue from the sale of goods in the course of ordinary activities is measured at the fair value of the consideration received or
receivable, net of returns, trade discounts and volume rebates. Revenue is recognised when persuasive evidence exists, usually
in the form of an executed sales agreement, that the significant risks and rewards of ownership have been transferred to the buyer,
recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, there is
no continuing management involvement with the goods, and the amount of revenue can be measured reliably. If it is probable
that discounts will be granted and the amount can be measured reliably, the discount is recognised as a reduction of revenue as
the sales are recognised.
Transfers of risks and rewards occur upon delivery to customers.
Finance income
Finance income represents the interest income on the financial receivable arising from a service concession arrangement, and
is recognised in the income statement using the effective interest method.
Finance lease income

Finance lease income is recognised on the accrual basis, taking into account the effective yield of the asset.
Others
Rental income from investment property is recognised in profit or loss on a straight-line basis over the term of the lease. Lease
incentives granted are recognised as an integral part of the total rental income, over the term of the lease.
Interest income is recognised as it accrues in profit or loss, using the effective interest method.
3.15 Government grants

The government grants are deducted against the carrying amounts of the assets when there is reasonable assurance that
government grants will be received to compensate the Group for the cost of an asset and the Group will comply with the conditions
associated with the grant.
Jobs Credit Scheme

Cash grants received from the Singapore government in relation to the Jobs Credit Scheme are recognised as income
upon receipt.
3.16 Lease payments

Payments made under operating leases are recognised in profit or loss on a straight-line basis over the term of the lease. Lease
incentives received are recognised as an integral part of the total lease expense, over the term of the lease.
Minimum lease payments made under finance leases are apportioned between the finance expense and the reduction of the
outstanding liability. The finance expense is allocated to each period during the lease term so as to produce a constant periodic
rate of interest on the remaining balance of the liability.
Contingent lease payments are accounted for by revising the minimum lease payments over the remaining term of the lease when
the lease adjustment is confirmed.
3.17 Finance costs

Finance costs comprise interest expense on borrowings that are recognised in profit or loss. Borrowing costs that are not directly
attributable to the acquisition, construction or production of a qualifying asset are recognised in profit or loss using the effective
interest method.
64
Notes to the
3.18 Income tax

Income tax expense comprises current and deferred tax. Current tax and deferred tax are recognised in profit or loss except to
the extent that it relates to a business combination, or items recognised directly in equity or in other comprehensive income.
Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or
substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following
temporary differences: the initial recognition of assets or liabilities in a transaction that is not a business combination and
that affects neither accounting nor taxable profit or loss, and differences relating to investments in subsidiaries and jointly
controlled entities to the extent that it is probable that they will not reverse in the foreseeable future. In addition, deferred tax is
not recognised for taxable temporary differences arising on the initial recognition of goodwill. Deferred tax is measured at the
tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted
or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right
to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable
entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and
liabilities will be realised simultaneously.
A deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary differences, to the extent that it is
probable that future taxable profits will be available against which they can be utilised. Deferred tax assets are reviewed at each
reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.
3.19 Earnings per share

The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing
the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares
outstanding during the period, adjusted for the Company’s holding of its own shares. Diluted EPS is determined by adjusting
the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding, less
the Company’s own shares held, and adjusted for the effects of all dilutive potential ordinary shares, which comprise convertible
notes and share options granted to employees.
3.20 Segment reporting

An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur
expenses, including revenues and expenses that relate to transactions with any of the Group’s other components. All operating
segments’ operating results are reviewed regularly by the Group’s CEO to make decisions about resources to be allocated to
the segment and assess its performance, and for which discrete financial information is available.
3.21 New standards and interpretations not yet adopted

A number of new standards amendments to standards and interpretations are effective for annual periods beginning after 1
January 2010, and have not been applied in preparing these financial statements. None of these are expected to have a significant
effect on the financial statements of the Group.
65
Notes to the
4 PROPERTY, PLANT AND EQUIPMENT
Leasehold Furniture
Plant and Motor Office properties and and Construction-
Note machinery vehicles Computers equipment improvements fittings in-progress Total
$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
Group
Cost
At 1 January 2009 20,940 3,138 7,423 2,154 24,779 1,435 18,492 78,361
Acquisitions
through business
combinations 29 11,782 157 28 23 13,363 29 56,560 81,942
Additions 864 117 2,339 124 892 278 3,980 8,594
Transfers 8,296 – 1,160 12 8,512 – (17,980) –
Disposals (2,039) (252) (262) (32) (84) (16) – (2,685)
Effect of movements in
exchange rates (1,026) (31) (58) (6) (685) (11) (1,188) (3,005)
At 31 December 2009
and 1 January 2010 38,817 3,129 10,630 2,275 46,777 1,715 59,864 163,207
Acquisitions
through business
combinations 29 – – – – 6,942 328 – 7,270
Additions 2,195 788 1,103 390 4,688 181 18,766 28,111
Transfers 583 – – (24) 7,712 25 (8,296) –
Transfer from
intangible assets 5 3,058 – – – 104 – – 3,162
Transfer from lease
prepayment – – – – 9,540 – – 9,540
Disposals (1,992) (906) (69) (33) (361) (12) – (3,373)
exchange rates (2,311) (128) (97) (50) (2,026) (23) (2,922) (7,557)
At 31 December 2010 40,350 2,883 11,567 2,558 73,376 2,214 67,412 200,360
Accumulated
depreciation and
impairment losses
At 1 January 2009 9,397 1,805 4,386 1,258 4,213 445 – 21,504
Depreciation for
the year 3,229 454 1,444 268 2,005 416 – 7,816
Disposals (381) (224) (237) (17) (54) (16) – (929)
exchange rates 25 (6) (27) 1 (105) 2 – (110)
At 31 December 2009
and 1 January 2010 12,270 2,029 5,566 1,510 6,059 847 – 28,281
Depreciation for
the year 3,874 350 2,092 246 3,287 263 – 10,112
Disposals (1,123) (752) (53) (12) (104) (12) – (2,056)
Impairment loss 2,901 – – – – – 4,956 7,857
Transfer from lease
prepayment – – – – 1,343 – – 1,343
exchange rates (721) (70) 9 (49) (183) 11 – (1,003)
At 31 December 2010 17,201 1,557 7,614 1,695 10,402 1,109 4,956 44,534
Carrying amounts
At 1 January 2009 11,543 1,333 3,037 896 20,566 990 18,492 56,857
At 31 December 2009
and 1 January 2010 26,547 1,100 5,064 765 40,718 868 59,864 134,926
At 31 December 2010 23,149 1,326 3,953 863 62,974 1,105 62,456 155,826
66
Notes to the
4 PROPERTY, PLANT AND EQUIPMENT (cont’d)
Furniture
Computers and fittings Total
$’000 $’000 $’000
Company
Cost
At 1 January 2009, 31 December 2009,
1 January 2010 and 31 December 2010 1,018 11 1,029
Accumulated depreciation
At 1 January 2009 1,018 3 1,021
Depreciation for the year – 8 8
At 31 December 2009, 1 January 2010
and 31 December 2010 1,018 11 1,029
Carrying amounts
At 1 January 2009 – 8 8
At 31 December 2009, 1 January 2010
and 31 December 2010 – – –
Leased assets
The Group leases motor vehicles under a number of finance lease agreements. The leased motor vehicles are the security
for the lease obligations (see note 19). At 31 December 2010, the net carrying amount of such leased motor vehicles was
nil (2009: $107,000).
Lease prepayments that relate to payments made for land use rights have been transferred to property, plant and equipment
during the year to better reflect the nature of the item. See note 13 for further details.
Estimation of residual values and useful lives of property, plant and equipment
The Group reviews the useful lives of the property, plant and equipment at the end of each reporting period in order to determine
the amount of depreciation expense to be recorded during any reporting period. The useful lives are based on the Group’s
historical experience with similar assets and taking into account anticipated technological changes. Changes in the expected
level of usage and technological developments could impact the economic useful lives and the residual values of these assets.
Therefore future depreciation charges could be revised. The net book value of the Group’s property, plant and equipment at
31 December 2010 was $155,826,000 (2009: $134,926,000) and the annual depreciation charge for the year ended
31 December 2010 was $10,112,000 (2009: $7,816,000).
Impairment loss
In 2010, due to the unfavourable market conditions, the Group has deferred the production and expected launch date of a new
product in the industrial segment, which was originally expected to be available for sale in 2010. The Group has assessed the
recoverable amount of the related production plant.
The recoverable amount was estimated based on its value in use, assuming that the production line would go live in 2012.
Based on the assessment, the Group recognised an impairment loss of $4,956,000 (2009: nil).
The estimated value in use was determined using a pre-tax discount rate of 9%.
The Group has also assessed the recoverable amount of a plant that has been loss-making since the previous financial year.
The recoverable amount was estimated based on its value in use assuming that the plant will now be used to produce a product
that will mainly be sold to companies within the Group. Based on the assessment, the Group recognised an impairment loss of
$2,901,000 (2009: nil).
The estimated value in use was determined using a pre-tax discount rate of 8.5%.
67
Notes to the
5 INTANGIBLE ASSETS
Intellectual
property Development Licensing
Note Goodwill rights costs fees Total
$’000 $’000 $’000 $’000 $’000
Group
Cost
At 1 January 2009 4,806 4,715 41,237 5,567 56,325
Additions – 42 – – 42
Additions – internally developed – – 9,269 – 9,269
Acquisition of non-controlling interest 1,715 – – – 1,715
Acquisitions through business combinations 29 7,667 – 13 3,277 10,957
Effect of movements in exchange rates – (2) (28) (128) (158)
At 31 December 2009 and 1 January 2010 14,188 4,755 50,491 8,716 78,150
Additions – 161 – – 161
Additions – internally developed – – 5,377 – 5,377
Acquisitions through business combinations 29 8,118 – – – 8,118
Disposal of subsidiaries to a joint venture 102 – – – 102
Transfer to property, plant and equipment 4 – – (3,162) – (3,162)
At 31 December 2010 22,408 4,860 52,643 8,399 88,310
Accumulated amortisation
and impairment losses
At 1 January 2009 – 764 7,102 1,000 8,866
Amortisation for the year – 68 1,870 410 2,348
Impairment loss 1,525 61 2,288 1,459 5,333
At 31 December 2009 and 1 January 2010 1,525 890 11,231 2,760 16,406
Amortisation for the year – 118 4,808 438 5,364
Impairment loss 2,402 53 834 1,359 4,648
At 31 December 2010 3,927 999 16,836 4,473 26,235
Carrying amounts
At 1 January 2009 4,806 3,951 34,135 4,567 47,459
At 31 December 2009 and 1 January 2010 12,663 3,865 39,260 5,956 61,744
At 31 December 2010 18,481 3,861 35,807 3,926 62,075
68
Notes to the
5 INTANGIBLE ASSETS (cont’d)
Intellectual
property Licensing
rights fees Total
$’000 $’000 $’000
Company
Cost
At 1 January 2009 1,764 137 1,901
Additions 15 – 15
At 31 December 2009, 1 January 2010 and 31 December 2010 1,779 137 1,916
At 1 January 2009 61 14 75
Amortisation for the year 18 13 31
At 31 December 2009 and 1 January 2010 79 27 106
Amortisation for the year 17 14 31
At 31 December 2010 96 41 137
Carrying amounts
At 1 January 2009 1,703 123 1,826
At 31 December 2009 and 1 January 2010 1,700 110 1,810
At 31 December 2010 1,683 96 1,779
Capitalisation of development costs

Initial capitalisation of costs is based on management’s judgement that technological and economical feasibility is confirmed,
usually when a product development project has reached a defined milestone according to an established project management
model. During the year, $3,162,000 (2009: nil) of laboratory equipment and leasehold improvement previously classified as
development costs were reclassified to property, plant and equipment to better reflect the nature of the assets.
Recoverability of development costs

The recoverable amounts of the cash-generating units are estimated based on their value in use. When value in use calculations
are undertaken, management estimates the expected future cash flows from the cash-generating unit and chooses a suitable
discount rate in order to calculate the present value of those cash flows. The recoverable amounts were estimated to be higher
than the carrying amounts of the units, and no impairment was required, except for the amounts discussed below.
Impairment loss on development costs

In 2010, an impairment loss of $834,000 (2009: $2,288,000) was recognised in the income statement.
Estimation of useful lives of development costs

Significant judgement is required in estimating the useful lives of development projects, which are affected by various factors,
such as technological developments.
69
Notes to the
5 INTANGIBLE ASSETS (cont’d)
Changes in estimates
During the year ended 31 December 2010, the Group revised its estimates for the useful lives of development costs from 10-15
years to 8 years as a result of a review performed by the Group over the period the Group would enjoy the expected benefits of
the development costs, taking into consideration the pace of technological developments and industry practices.
The effect of these changes on amortisation expense recognised in the income statement in current and future periods are
as follows:
2014 and
2010 2011 2012 2013 beyond
$’000 $’000 $’000 $’000 $’000
Increase/(decrease) in amortisation expenses 1,350 2,144 2,111 2,105 (7,710)
Impairment testing for cash-generating units (CGUs) containing goodwill

For the purpose of impairment testing, goodwill is allocated to the Group’s operating divisions which represent the lowest level
within the Group at which the goodwill is monitored for internal management purposes, which is not higher than the Group’s
operating segments as reported in note 28. The aggregate carrying amounts of goodwill allocated to each unit are as follows:
2010 2009
$’000 $’000
Singapore
- Others 192 192
The Netherlands
- Industrial 2,402 4,804
Kingdom of Saudi Arabia
People’s Republic of China
- Municipal 8,220 –
18,481 12,663
In 2010, following a management review of the business portfolio, an impairment loss of $2,402,000 (2009: $1,525,000) on the
goodwill from the Netherlands Industrial CGU (2009: Singapore Industrial CGU) is recognised in the income statement.
The recoverable amounts of the CGUs were based on their values in use.
Values in use were determined by discounting the future cash flows generated from the continuing use of the units. Unless
indicated otherwise, values in use in 2010 were determined similarly as in 2009. The calculations of the values in use were based
on the following key assumptions:
• Cash flows were projected based on financial budgets approved by management covering a five-year period.
• The anticipated annual revenue growth included in the cash flow projections was 2% to 5% (2009: 2% to 5%) for the
years 2011 to 2015 (2009: 2010 to 2014).
• A pre-tax discount rate of 12.5% (2009: 10%) was applied in determining the recoverable amounts of the CGUs and
reflect specific risks relating to the relevant segments.
The values assigned to the key assumptions represent management’s assessment of future trends in the industries and are based
on both external sources and internal sources (historical data).
70
Notes to the
6 INTANGIBLE ASSETS ARISING FROM SERVICE CONCESSION ARRANGEMENTS
Note
$’000
Group
Cost
At 1 January 2009 19,326
Additions 9,696
Effect of movements in exchange rates (443)
At 31 December 2009 and 1 January 2010 28,579
Acquisitions through business combinations 29 92,895
Transfer to joint venture (1,329)
Additions 10,628
At 31 December 2010 129,934
and impairment losses
At 1 January 2009 262
Amortisation for the year 450
At 31 December 2009 and 1 January 2010 708
Amortisation for the year (545)
Transfer to joint venture 2
Effect of movements in exchange rates 275
At 31 December 2010 440
Carrying amounts
At 1 January 2009 19,064
At 31 December 2009 and 1 January 2010 27,871
At 31 December 2010 129,494
At 31 December 2010, the Group owns water plants in China, including water treatment plants (“WTPs”) and wastewater
treatment plants (“WWTPs”), through the special project companies (“SPCs”) incorporated in China. The principal activities of
the SPCs are development and operation of WTPs and WWTPs, as well as sales of treated and recycled water. Each of these
SPCs has entered into service concession arrangements with the respective local municipals (“the grantor”), via either Transfer-
Operate-Transfer (“TOT”) or Build-Operate-Transfer (“BOT”) arrangements.
Under the TOT arrangements, the rights of use of the water plants were transferred to the Group and the Group is responsible
for any upgrading services to bring the water plants into proper working conditions. Under the BOT arrangements, the Group is
responsible for the construction of the water plants. Upon completion of the construction, the Group is responsible for operating
the water plants and sale of the treated and recycled water to the industrial or domestic customers. The concession periods
range from 20 years to 30 years.
During the concession period, the Group received the right to charge the customers for the sale of water. Additionally, some
of the service concession arrangements provide the Group a guaranteed minimum annual payment for the initial years of the
concession period, ranging from 3 years to 30 years. These guaranteed minimum annual payments are recognised as financial
receivables to the extent that the Group has contractual rights under the concession arrangements (see note 12). The financial
receivables are measured on initial recognition at their fair value.
Intangible assets arising from service concession arrangements represent the right to operate the water plants and to sell the
water to the customers.
At the end of the concession period, the water plants will be transferred to the grantor.
71
Notes to the
7 INVESTMENT PROPERTY
Group
2010 2009
$’000 $’000
Cost
At 1 January 3,348 3,348
Disposal (3,348) –
At 31 December – 3,348
Accumulated depreciation
At 1 January 1,232 1,104
Depreciation for the year 65 128
Disposal (1,297) –
Carrying amounts
At 1 January 2,116 2,244
The fair value of the investment property, estimated by the directors of the Group, as at 31 December 2009 was approximately
$2,324,000.
The investment property is a warehouse, leased to an external tenant. The lease contains an initial non-cancellable period of one
year. Subsequent renewals are negotiated with the lessee. No contingent rents were charged.
8 INVESTMENTS IN SUBSIDIARIES
Company
2010 2009
$’000 $’000
Unquoted equity securities, at cost 109,649 109,649

Impairment losses (14,338) (3,238)
95,311 106,411
Loans to subsidiaries 24,509 24,509
119,820 130,920
The loans to subsidiaries are unsecured and interest-free, and settlement is neither planned nor likely to occur in the foreseeable
future. As these balances are, in substance, part of the Company’s net investments in the subsidiaries, they are stated at cost
less impairment losses, if any.
72
Notes to the
8 INVESTMENTS IN SUBSIDIARIES (cont’d)
Details of major subsidiaries are as follows:
Country of Ownership
Name of subsidiary Note incorporation interest
2010 2009
% %
Held by the Company

Hydrochem (S) Pte Ltd Singapore 100 100
Hyflux Membrane Manufacturing (S) Pte. Ltd. Singapore 100 100
SinoSpring Utility Ltd British Virgin Islands 100 100
Spring China Utility Ltd British Virgin Islands 100 100
Held through subsidiaries

Hydrochem Engineering (Shanghai) Co., Ltd People’s Republic of China 100 100
Hyflux CEPAration B.V. The Netherlands 100 100
Hyflux Filtech (Shanghai) Co., Ltd People’s Republic of China 71 71
Hyflux Hi-tech Product (Yangzhou) Co., Ltd People’s Republic of China 100 100
Hyflux NewSpring Construction Engineering
(Shanghai) Co., Ltd People’s Republic of China 100 100
Hyflux Unitech (Shanghai) Co., Ltd People’s Republic of China 71 71
Lube Oil Re-refining Co., LLC 29 Kingdom of Saudi Arabia 95 83
Sinolac (Singapore) Pte. Ltd. 29 Singapore 100 51
Hyflux Engineering (Shanghai) Co., Ltd People’s Republic of China 100 100
KPMG LLP, Singapore is the auditor of all significant Singapore-incorporated subsidiaries. The foreign-incorporated subsidiaries
that are considered significant are Hyflux NewSpring Construction Engineering (Shanghai) Co., Ltd, and Lube Oil Re-refining
Co., LLC. Their respective statutory auditors are Shanghai HDDY Certified Public Accountants Co., Ltd, People’s Republic of
China and Aldar Audit Bureau Abdullah Al Basri & Co, Kingdom of Saudi Arabia.
9 INVESTMENTS IN JOINT VENTURE
Company
2010 2009
$’000 $’000
Unquoted equity securities, at cost 3,125 3,125
73
Notes to the
9 INVESTMENTS IN JOINT VENTURE (cont’d)
Details of the joint ventures are as follows:
Name of joint venture incorporation Note interest
2010 2009
% %
Held by the Company

Hyflux Marmon Development Pte. Ltd. Singapore 50 50

Galaxy NewSpring Pte. Ltd. Singapore 50 –
H.J. NewSpring Limited Hong Kong 50 50
Held through joint ventures

Tianjin Dagang NewSpring Co., Ltd People’s Republic of China 50 50
Hyflux Water Trust Singapore 29 50 –
Hyflux Utility WT (GCL) Limited Hong Kong 50 –
Hyflux NewSpring (LiaoYang GongChangLing) Co., Ltd. People’s Republic of China 50 –
Hyflux Utility WT (MG) Limited Hong Kong 50 –
Hyflux NewSpring Water Treatment (Mingguang) Co., Ltd. People’s Republic of China 50 –
Hyflux Utility (TY) Limited Hong Kong 50 –
Hyflux NewSpring (Taoyuan) Co., Ltd. People’s Republic of China 50 –
Hyflux Utility (LP) Limited Hong Kong 50 –
Hyflux NewSpring (Leping) Co., Ltd. People’s Republic of China 50 –
KPMG LLP, Singapore is the auditor of the Singapore-incorporated joint ventures. The foreign-incorporated joint venture that is
considered significant is Tianjin Dagang NewSpring Desalination Co., Ltd and the statutory auditor is KPMG Huazhen, Shanghai,
The People’s Republic of China.
The summarised financial information of the joint ventures, which are adjusted for the percentage of ownership held by the Group,
are as follows:
2010 2009
$’000 $’000
Assets and liabilities

Non-current assets 354,263 128,383
Current assets 53,879 23,049
Total assets 408,142 151,432
Non-current liabilities (81,054) (54,662)

Current liabilities (109,159) (28,504)
Total liabilities (190,213) (83,166)
Results
Revenue 12,677 260
Expenses (15,332) (838)
Loss before income tax (2,655) (578)
Contingent liabilities in respect of bank guarantees for which the Group is liable (59,938) (54,662)
74
Notes to the
10 INVESTMENTS IN ASSOCIATES
Group Company
2010 2009 2010 2009
$’000 $’000 $’000 $’000
Quoted equity securities – 55,386 – –

Unquoted equity securities 75,032 47,268 13,320 12,955
75,032 102,654 13,320 12,955
Fair value of investment in an associate for which

there is a published price quotation – 66,105 – –
Unquoted equity securities of the Group with a carrying amount of $55,834,000 (2009: $36,575,000) have been pledged as
collateral for banking facilities granted to the associates.
Details of major associates are as follows:
Name of associate Note incorporation interest
2010 2009
% %
Held by the Company

SingSpring Trust Singapore 30.0 30.0

Hyflux Water Trust 29 Singapore – 31.7
Ningxia Hypow Bio-Technology Co., Ltd People’s Republic of China 25.0 25.0
Tlemcen Desalination Investment Company France 30.0 30.0
Tahlyat Myah Magtaa SpA Algeria 47.0 47.0
KPMG LLP, Singapore is the auditor of Hyflux Water Trust. SingSpring Trust is audited by Ernst & Young Singapore and Tahlyat
Myah Magtaa SpA is audited by Cabinet Benmahsour Med El Bachir. An associated company is considered significant as
defined under the Singapore Exchange Limited Listing Manual if the Group’s share of its net tangible assets represents 20% or
more of the Group’s consolidated net tangible assets, or if the Group’s share of its pre-tax profits accounts for 20% or more of
the Group’s consolidated pre-tax profits.
The summarised financial information of the associates, which are adjusted for the percentage of ownership held by the Group,
are as follows:
2010 2009
$’000 $’000
Assets and liabilities

Total assets 251,491 296,047
Total liabilities (191,549) (168,604)
Results
Revenue 36,972 29,873
Profit after income tax 1,959 2,634
75
Notes to the
11 OTHER INVESTMENTS
Group Company
2010 2009 2010 2009
$’000 $’000 $’000 $’000
Non-current
Available-for-sale unquoted equity securities, at cost – 99 – –
Current
Available-for-sale money market instrument 2,429 – 2,429 –
12 FINANCIAL RECEIVABLES
Group
2010 2009
$’000 $’000
Non-current
Financial receivables 226,087 155,630
Lease receivables 62 317
226,149 155,947
Current
Financial receivables 5,596 7,549
Lease receivables 255 269
5,851 7,818
Total 232,000 163,765
The Group has receivables under finance leases as follows:
Present Present
value of value of
Minimum minimum Minimum minimum
lease Unearned lease lease Unearned lease
payment finance payment payment finance payment
receivables income receivables receivables income receivables
2010 2010 2010 2009 2009 2009
$’000 $’000 $’000 $’000 $’000 $’000
Group
Within one year 329 74 255 329 60 269
Between one and five years 81 19 62 410 93 317
410 93 317 739 153 586
Under the terms of the lease arrangements, no contingent rents are recognised and there are no unguaranteed residual values
accruing to the Group.
The weighted average effective interest rate of the lease receivables at 31 December 2010 is 5.5% (2009: 5.5%) per annum.
76
Notes to the
13 TRADE AND OTHER RECEIVABLES
Group Company
2010 2009 2010 2009
$’000 $’000 $’000 $’000
Non-current
Trade receivables 261 537 – –
Lease prepayments – 8,527 – –
Amounts due from:
- subsidiaries (non-trade) – – 16,924 18,296
- associates (non-trade) 15,555 26,248 – –
15,816 35,312 16,924 18,296
Current
Trade receivables 53,976 26,971 – 9
Prepayments 1,865 3,180 245 571
Deposits 18,441 2,102 15,712 3
Advances to suppliers 11,278 26,172 – –
Staff advances 312 477 – –
Other receivables 13,958 10,406 – 634
Derivatives 754 – 754 –
Amounts due from:
- subsidiaries (trade) – – 18,379 28,960
- joint ventures (trade) 30,806 27,301 16,927 –
- joint ventures (non-trade) 2,218 22 1,101 –
- associates (trade) 46,905 114,441 – –
- associates (non-trade) 1,885 11,017 5,447 6,548
182,398 222,089 608,382 524,628
Total 198,214 257,401 625,306 542,924
At 31 December 2010, trade receivables for the Group included a retention sum of $7,090,000 (2009: $5,139,000) relating to
construction contracts in progress.
Included in current trade receivables of the Group are note receivables of $6,531,000 (2009: $2,516,000) relating to bank
documents secured from customers for settlement of payment within the next six months.
Lease prepayments relate to payments made for land use rights and are charged to the income statement on a straight-line
basis over the lease term ranging from 10 years to 30 years. The depreciation charge for the year ended 31 December 2010
of S$791,000 (2009: $446,000) is included in depreciation, amortisation and impairment in the income statement. The lease
prepayments have been transferred to property, plant and equipment during the year to better reflect the nature of the item.
Outstanding balances with subsidiaries, joint ventures and associates are unsecured. There is no allowance for doubtful debts
arising from the outstanding balances.
The non-current non-trade amounts due from subsidiaries are interest-free, have no fixed terms of repayment and are not
expected to be repaid within the next 12 months. As these amounts are in substance, a part of the entity’s net investment in
the subsidiaries, they are stated at cost.
77
Notes to the
13 TRADE AND OTHER RECEIVABLES (cont’d)
The non-current non-trade amounts due from associates bear interest at rates of 6.84% (2009: 4.23% - 6.84%) per annum
and are repayable between 2011 to 2014.
The current amounts due from subsidiaries, joint ventures and associates are interest-free and are repayable on demand.
The Group’s and the Company’s exposure to credit and currency risks, and impairment losses related to trade and other
receivables, are as set out in note 22.
14 DEFERRED TAX ASSETS AND LIABILITIES
Unrecognised deferred tax assets

Deferred tax assets have not been recognised in respect of the following items:
Group Company
2010 2009 2010 2009
$’000 $’000 $’000 $’000
Tax losses 25,857 13,332 – –

Deductible temporary differences 18 18 – –
25,875 13,350 – –
The tax losses and deductible temporary differences are subject to agreement by the tax authorities and compliance with
tax regulations in the respective countries in which the Company and certain subsidiaries operate. The tax losses and
deductible temporary differences do not expire under current tax legislation. Deferred tax assets have not been recognised
in respect of these items because it is not probable that future taxable profit will be available against which the Group can
utilise the benefits therefrom.
Recognised deferred tax assets and liabilities

Deferred tax assets and liabilities are attributable to the following:
Assets Liabilities
2010 2009 2010 2009
$’000 $’000 $’000 $’000
Group
Property, plant and equipment – – 791 667
Intangible assets – – 3,732 5,605
Intangible assets arising from service
concession arrangements (769) – 21,117 –
Tax loss carry-forwards (847) (2,761) – –
Deferred tax (assets)/liabilities (1,616) (2,761) 25,640 6,272
78
Notes to the
14 DEFERRED TAX ASSETS AND LIABILITIES (cont’d)
Movement in temporary differences during the year
Balance Recognised Balance Recognised Balance

as at in profit as at Acquired in profit as at
1 January or loss Exchange 31 December in business or loss Exchange 31 December
2009 (note 26) differences 2009 combination (note 26) differences 2010
$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
Group
Property, plant
and equipment 712 (45) – 667 – 124 – 791
Intangible assets 5,548 57 – 5,605 – (1,873) – 3,732
Intangible assets
arising from
service
concession
arrangements – – – – 20,348 – – 20,348
Tax loss
carry-forwards (2,799) 23 15 (2,761) – 1,606 308 (847)
3,461 35 15 3,511 20,348 (143) 308 24,024
Company
Property, plant
and equipment 95 (95) – – – – – –
Intangible assets 64 (64) – – – – – –
159 (159) – – – – – –
15 GROSS AMOUNTS DUE FOR CONTRACT WORK
Group
2010 2009
$’000 $’000
Costs incurred and attributable profits 960,627 737,048

Progress billings (706,158) (617,054)
Gross amounts due for contract work 254,469 119,994
16 INVENTORIES
Group
2010 2009
$’000 $’000
Raw materials and consumables 13,456 21,384

Work in progress 10,896 7,546
Finished goods 1,909 3,567
26,261 32,497
During the year, the write-down of inventories to net realisable value amounted to $1,412,000 (2009: $863,000) for the Group.
The write-down is included as part of other expenses in the income statement.
79
Notes to the
17 CASH AND CASH EQUIVALENTS
Group Company
2010 2009 2010 2009
$’000 $’000 $’000 $’000
Cash at bank and in hand 104,464 98,861 3,446 4,939

Fixed deposits with financial institutions 117,822 67,874 62,210 57,921
222,286 166,735 65,656 62,860
Less: Deposits pledged (204) –
Cash and cash equivalents in the cash flow statement 222,082 166,735
18 TRADE AND OTHER PAYABLES
Group Company
2010 2009 2010 2009
$’000 $’000 $’000 $’000
Trade payables 169,519 219,109 – –

Progress payments from customers 9,972 11,026 – –
Derivatives – 479 – 479
Accrued expenses 19,790 15,609 747 948
Other payables 8,637 7,974 3,826 3,655
Amounts due to:
- subsidiaries (trade) – – 37 58
- associates (trade) – 8,746 – –
- associates (non-trade) – 2,801 – 2,429
- joint ventures (trade) 1,834 28 – –
- joint ventures (non-trade) 286 – – –
210,038 265,772 73,480 244,742
Amounts due to subsidiaries, joint ventures and associates are unsecured, interest-free and repayable on demand.
The Group’s and the Company’s exposure to currency and liquidity risk related to trade and other payables are described in
note 22.
80
Notes to the
19 LOANS AND BORROWINGS
This note provides information about the contractual terms of the Group’s and the Company’s loans and borrowings, which are
measured at amortised cost. For more information about the Group’s and Company’s exposures to interest rate, foreign currency
and liquidity risk, see note 22.
Group Company
2010 2009 2010 2009
$’000 $’000 $’000 $’000
Non-current liabilities
Unsecured bank loans 280,818 203,943 220,880 149,282
Loan from minority shareholders – 3,097 – –
Unsecured notes 222,788 147,951 222,788 147,951
Finance lease liabilities – 27 – –
503,606 355,018 443,668 297,233
Current liabilities
Secured bank loans 43,122 1,122 – –
Unsecured bank loans 52,538 34,137 52,538 34,137
Unsecured notes – 10,000 – 10,000
Finance lease liabilities – 46 – –
95,660 45,305 52,538 44,137
Total 599,266 400,323 496,206 341,370
Secured bank loans of the Group at 31 December 2010 are secured by a joint venture’s share mortgages of all its shares of
China subsidiaries. Secured bank loans of the Group at 31 December 2009 were secured by a lien over the inventories and
receivables of a subsidiary with carrying amounts of $68,000 and $40,000 respectively.
Unsecured bank loans of the Group totalling $294,295,000 (2009: $233,080,000) are guaranteed by the Company and certain
subsidiaries of the Group.
Unsecured bank loans of the Company totalling $234,357,000 (2009: $178,419,000) are guaranteed by certain subsidiaries of
the Group.
The loan from minority shareholders at 31 December 2009 was unsecured, interest-free, had no fixed terms of repayment and
was not expected to be repaid within the next 12 months. The fair value of this balance was not determinable as the timing of the
future cash flow cannot be reliably determined.
In 2008, the Company established a $300 million unsecured multi-currency debt issuance programme pursuant to which
the Company may, issue notes which bear currency, interest and maturity terms that vary with each series, as may be agreed
between the Company and the dealers. As at 31 December 2010, $224 million (2009: $159 million) of unsecured fixed rate
notes were in issue.
81
Notes to the
19 LOANS AND BORROWINGS (cont’d)
Terms and debt repayment schedule

Terms and conditions of outstanding loans and borrowings are as follows:
2010 2009
Nominal Year of Face Carrying Face Carrying
Currency interest rate maturity value amount value amount
$’000 $’000 $’000 $’000
Group
Unsecured bank loans SGD 3.09% 2010 – – 5,000 5,000
Unsecured bank loans SGD SIBOR + 0.93% 2010-2011 30,000 30,000 10,000 10,000
Unsecured bank loans USD LIBOR + 0.93% 2011 139,254 139,254 171,516 171,516
Unsecured bank loans USD COF* + 2.25% 2013 65,102 65,102 – –
Unsecured bank loans RMB 5.31% - 5.94% 2023 60,539 59,938 56,990 54,661
Secured bank loans SGD SOR + margin 2011 43,159 43,122 – –
Secured bank loans EURO 6.00% 2010 – – 1,122 1,122
Unsecured notes SGD 4.00% - 5.68% 2010-2015 223,500 222,788 158,500 157,951
Finance lease liabilities SGD 6.54% - 6.80% 2010-2011 – – 86 73
Total loans and borrowings 600,616 599,266 403,214 400,323
Company
Unsecured bank loans SGD 3.09% 2010 – – 5,000 5,000
Unsecured bank loans SGD SIBOR + 0.93% 2010-2011 30,000 30,000 10,000 10,000
Unsecured bank loans USD LIBOR + 0.93% 2011 139,254 139,254 168,419 168,419
Unsecured notes SGD 4.00% - 5.68% 2010-2015 223,500 222,788 158,500 157,951
Total loans and borrowings 496,918 496,206 341,919 341,370
COF* : The rate per annum determined by the bank to be the aggregate of:
i. The rate at which the bank would be able to acquire funds in the Singapore interbank market (or from
such sources as the bank may select for the purpose), and
ii. The rate determined by the bank to represent the bank’s costs of compliance with liquidity, reserve or
similar requirements imposed by any relevant authority (if any).
Finance lease liabilities

Finance lease liabilities are payable as follows:
Future Future
minimum minimum
lease lease
payments Interest Principal payments Interest Principal
2010 2010 2010 2009 2009 2009
$’000 $’000 $’000 $’000 $’000 $’000
Group
Within one year – – – 54 8 46
Between one and five years – – – 32 5 27
– – – 86 13 73
82
Notes to the
20 CAPITAL AND RESERVES
Share capital
Group and Company

2010 2009
No. of shares
’000 ’000
Ordinary shares
On issue at 1 January 528,365 525,271
Issue of bonus shares 285,977 –
Exercise of share options 3,372 2,594
Exercise of warrants 40,217 1,000
Purchase of treasury shares – (500)
On issue at 31 December 857,931 528,365
Issuance of ordinary shares
43,589,000 (2009: 3,594,000) ordinary shares were issued as a result of the exercise of vested options and warrants arising
from the 2001 share option programme granted to key management staff and warrant subscription agreements. Options and
warrants were exercised at an average price of $1.218^ (2009: $1.491^) per option and $2.392* (2009: $2.133*) per warrant
respectively. All issued shares were fully paid.
^ The share prices have been restated to adjust for the effect of bonus issuance in 2010 for comparative purposes.
* The share prices were not adjusted for the effect of bonus issuance during the year as all the warrants had been exercised prior to bonus issuance
(see below).
Ordinary shares
The holders of ordinary shares are entitled to receive dividends as declared from time to time, and are entitled to one vote per
share at meetings of the Company. All shares rank equally with regard to the Company’s residual assets. All issued shares are
fully paid up.
Bonus issue
On 27 December 2010, 285,977,000 fully paid ordinary shares were issued to existing shareholders as bonus shares, in the
proportion of one share for every two shares held.
Warrant
By a warrant subscription agreement dated 23 November 2004 supplemented by a supplemental warrant subscription
agreement dated 25 April 2008 (“Agreements”) entered into between the Company and Istithmar World PJSC (formerly
known as Istithmar PJSC) (“Istithmar”), Istithmar was entitled to subscribe for 41,216,863 ordinary shares in the Company,
subject to the terms and conditions of the Agreements and the warrant instrument. The exercise period was from April 2008 to
April 2010.
The exercise price was the higher of (a) $1.95 and (b) the lower of 70% of the volume-weighted average price for trades in the
Company’s shares transacted on the Singapore Exchange on the market day immediately preceding the exercise date or in the
30 calendar day period immediately preceding the exercise date. All the outstanding warrants have been exercised during the
year and there are no outstanding warrants at 31 December 2010.
Reserve for own shares

The reserve for the Company’s own shares comprises the cost of the Company’s shares held by the Group. At 31 December
2010, the Group held 500,000 (2009: 500,000) of the Company’s shares.
83
Notes to the
20 CAPITAL AND RESERVES (cont’d)
Capital reserve
The capital reserve comprises:
(a) capital gain arising from the payment of the Group’s subscription to the share capital of a subsidiary by a non-controlling
interest; and
(b) Statutory Reserve Fund (“SRF”)
In accordance with the Foreign Enterprise Law in the People’s Republic of China (“PRC”), the Group’s subsidiaries in
the PRC are required to appropriate earnings to a SRF. 10% of the statutory profits after tax as determined in accordance
with the applicable PRC accounting standards and regulations are allocated to the SRF annually until the cumulative total
of the SRF reaches 50% of the subsidiaries’ registered capital. Subject to approval from the relevant PRC authorities,
the SRF may be used to offset any accumulated losses or increase the registered capital of the subsidiaries. The SRF is
not available for dividend distribution to shareholders.
(c) Difference between the consideration paid and net assets acquired in acquisition of non-controlling interest.
Foreign currency translation reserve

The translation reserve comprises all foreign exchange differences arising from the translation of the financial statements of
foreign operations.
Hedging reserve
The hedging reserve comprises:
(a) the effective portion of the cumulative net change in the fair value of cash flow hedging instruments relating to hedged
transactions that have not yet occurred; and
(b) the Group’s share of the hedging reserve of associates.
Employees’ share option reserve

The employees’ share option reserve represents the equity-settled share options granted to employees. This reserve is made up
of the cumulative value of services received from employees recorded over the vesting period commencing from the grant date
of equity-settled share options.
Dividends
The following dividends were declared and paid by the Group and the Company:
For the year ended 31 December
Group and Company

2010 2009
$’000 $’000
Final tax-exempt dividend paid of 5.00 cents (2009: 3.43 cents) per share 28,515 18,020
in respect of previous financial year
Interim tax-exempt dividend paid of 1.00 cent (2009: nil) per share 5,707 –
in respect of current financial year
34,222 18,020
84
Notes to the
20 CAPITAL AND RESERVES (cont’d)
Dividends (cont’d)
After the respective reporting dates, the following dividends were proposed by the directors. The dividends have not been
provided for and there are no income tax consequences.
Group and Company

2010 2009
$’000 $’000
Final proposed tax-exempt dividend of 3.50 cents (2009: 5.00 cents) per share 30,027 26,418
21 SHARE-BASED PAYMENT
Description of the share-based payment arrangements

At 31 December 2010, the Group has the following share-based payment arrangements.
Share option scheme (equity-settled)

The Hyflux Employees’ Share Option Scheme (“the Scheme”) of the Company was approved and adopted by its members
at an Extraordinary General Meeting held on 27 September 2001. The Scheme provides an opportunity for employees and
directors of the Company and its subsidiaries, other than substantial shareholders of the Company, to participate in the equity
of the Company.
On 24 November 2003, the members of the Company approved a modification to the Scheme which allowed Olivia Lum
Ooi Lin, Group President & CEO, a substantial shareholder of the Company, to participate in the Scheme. The maximum
entitlement of Olivia Lum Ooi Lin is 10% of the total number of shares which may be issued by the Company under
the Scheme.
The Scheme is administered by the Remuneration Committee. It shall continue to be in force at the discretion of the
Remuneration Committee for a period of ten years from 27 September 2001. However, the period may be extended with the
approval of the members of the Company at a general meeting of the Company and of any relevant authorities which may then
be required. The vesting of the options is conditional upon various factors including the directors and employees completing
their years of service to the Group. Once these options have vested, the options are exercisable by an employee during a
contractual option term of 10 years (5 years for a non-executive director) from the date of grant of that option. 20% of the
options granted are exercisable after the director or employee completed each year of service from the date of the grant. All
options are to be settled by physical delivery of shares.
85
Notes to the
21 SHARE-BASED PAYMENT (cont’d)
Disclosure of share option scheme

The number and weighted average exercise prices of share options are as follows:
Weighted Weighted
average average
exercise Number exercise Number
price of options price of options
2010 2010 2009 2009
$ $
Outstanding at 1 January 1.492 25,279,093 1.495^ 28,746,655

Forfeited during the year 1.657 (2,338,000) 1.587^ (2,963,562)
Exercised during the year 1.218 (3,372,187) 1.007^ (2,594,000)
Granted during the year 2.297 4,200,000 1.471^ 2,090,000
Bonus options 1.655 11,871,463 – –
Outstanding at 31 December 1.656 35,640,369 1.492^ 25,279,093
Exercisable at 31 December 1.583 18,497,469 1.453^ 11,613,293
The options outstanding at 31 December 2010 have an exercise price in the range of $0.179 to $2.419 (2009: $0.179^ to $2.419^)
and a weighted average contractual life of 6.28 years (2009: 6.66 years).
The weighted average share price at the date of exercise for share options exercised in 2010 was $1.485 (2009: $1.401^)
per share.
^ The share prices have been restated to adjust for the effect of bonus issuance in 2010 for comparative purposes.
Inputs for measurement of grant date fair values

The grant date fair value of the share-based payment plans was measured based on the Black-Scholes standard option valuation
model. Expected volatility is estimated by considering historic average share price volatility. The inputs used in the measurement
of the fair values at grant date of the share-based payment plans are the following:
Fair value of share options and assumptions
Date of grant of options 26/02/2010 16/11/2010
Fair value at grant date $0.756 $0.367

Share price at grant date $3.520* $3.260*
Exercise price $3.540* $3.286*
Expected volatility (weighted average volatility) 32% 19%
Option life (expected weighted average life) 100 days 100 days
Expected dividends 1.01% 1.73%
Risk-free interest rate (based on government bonds) 0.86% 0.83%
* The share prices were not adjusted for the effect of bonus issuance as they were granted prior to bonus issue.
86
Notes to the
22 FINANCIAL INSTRUMENTS
Credit risk
Exposure to credit risk
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the
reporting date was:
Group Company
Note 2010 2009 2010 2009
$’000 $’000 $’000 $’000

Trade receivables 13 54,237 27,508 – 9
Deposits 13 18,441 2,102 15,712 3
Advances to suppliers 13 11,278 26,172 – –
Staff advances 13 312 477 – –
Other receivables 13 13,958 10,406 – 634
Derivatives 13 754 – 754 –
Amounts due from:
- subsidiaries (trade) 13 – – 18,379 28,960
- subsidiaries (non-trade) 13 – – 566,741 506,199
- joint ventures (trade) 13 30,806 27,301 16,927 –
- joint ventures (non-trade) 13 2,218 22 1,101 –
- associates (trade) 13 46,905 114,441 – –
- associates (non-trade) 13 17,440 37,265 5,447 6,548
Loans and receivables 428,349 409,459 625,061 542,353
Cash and cash equivalents 17 222,286 166,735 65,656 62,860
Available-for-sale money market instrument 11 2,429 – 2,429 –
Recognised financial assets 653,064 576,194 693,146 605,213
The maximum exposure to credit risk for loans and receivables at the reporting date by type of counterparty was:
Group Company
2010 2009 2010 2009
$’000 $’000 $’000 $’000
Municipal 325,518 360,472 – –

Industrial 100,431 47,040 – –
Subsidiaries – – 585,120 535,159
Joint ventures – – 18,028 –
Associates – – 5,447 6,548
Others 2,400 1,947 16,466 646
428,349 409,459 625,061 542,353
87
Notes to the
22 FINANCIAL INSTRUMENTS (cont’d)
Credit risk (cont’d)

Impairment losses
The ageing of loans and receivables at the reporting date was:
Gross Impairment Gross Impairment

2010 2010 2009 2009
$’000 $’000 $’000 $’000
Group
Not past due 410,152 – 399,403 –
Past due 0 to 60 days 7,007 – 566 –
Past due 61 to 120 days 4,501 – 1,881 –
More than 120 days 11,969 5,280 12,484 4,875
433,629 5,280 414,334 4,875
Company
Not past due 625,061 – 542,353 –
The movement in the allowance for impairment in respect of loans and receivables during the year was as follows:
Group
2010 2009
$’000 $’000
At 1 January 4,875 5,044

Impairment loss recognised 2,411 2,820
Impairment loss written off (828) (1,918)
Impairment loss written back (885) (975)
Effect of movements in exchange rates (293) (96)
At 31 December 5,280 4,875
The impairment loss recognised and written back is included as part of other expenses in the income statement.
The Group and the Company believe that the unimpaired amounts that are past due are still collectible, based on historic
payment behaviour and analysis of the customers’ underlying credit ratings.
Based on historic default rates, the Group believes that, apart from the above, no impairment allowance is necessary in respect
of the Group’s loans and receivables not past due or past due by up to 120 days at 31 December 2010 as these loans and
receivables are mainly due from governing bodies or agencies of the People’s Republic of China, or customers that have a
good payment record with the Group. Management believes that no impairment allowance is necessary on the Company’s
loans and receivables as at 31 December 2010.
88
Notes to the
Liquidity risk
The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding the impact
of netting agreements:
Cash flows
Carrying Contractual Within Between More than
amount cash flows 1 year 1 and 5 years 5 years
$’000 $’000 $’000 $’000 $’000
Group
2010
Variable interest rate loans 376,478 (423,820) (121,189) (102,635) (199,996)
Fixed interest rate notes 222,788 (257,049) (11,051) (245,998) –
Finance lease liabilities – – – – –
Trade and other payables* 210,038 (210,038) (210,038) – –
809,304 (890,907) (342,278) (348,633) (199,996)
Derivative financial liabilities

Forward exchange contracts
- Outflow – – – – –
- Inflow – – – – –
2009
Variable interest rate loans 242,299 (277,038) (41,148) (175,598) (60,292)
Fixed interest rate notes 157,951 (186,056) (17,966) (168,090) –
Finance lease liabilities 73 (86) (54) (32) –
Trade and other payables* 265,293 (265,293) (265,293) – –
665,616 (728,473) (324,461) (343,720) (60,292)
Derivative financial liabilities

Forward exchange contracts
- Outflow 484 (40,182) (40,182) – –
- Inflow (5) 39,703 39,703 – –
* Excludes derivatives (shown separately).
It is not expected that the cash flows included in the maturity analysis could occur significantly earlier, or at significantly
different amounts.
89
Notes to the
Currency risk
Exposure to currency risk
The Group’s and Company’s exposure to foreign currency risk is as follows based on notional amounts:
31 December 31 December
2010 2009
US dollars US dollars
$’000 $’000
Group
Trade and other receivables 362,798 214,861
Cash and cash equivalents 82,080 92,912
Loans and borrowings (243,418) (171,516)
Trade and other payables (132,760) (97,139)
68,700 39,118
Company
Trade and other receivables 294,960 256,244
Cash and cash equivalents 40,183 58,437
Loans and borrowings (243,418) (168,419)
Trade and other payables (49,018) (180,820)
42,707 (34,558)
Sensitivity analysis
A 10% strengthening of the Singapore dollar, as indicated below, against the US dollars at 31 December would have increased/
(decreased) equity and profit before income tax in the income statement by the amounts shown below. This analysis is based on
foreign currency exchange rate variances that the Group considered to be reasonably possible at the end of the reporting period.
The analysis assumes that all other variables, in particular interest rates, remain constant. The analysis is performed on the same
basis for 2009, albeit that the reasonably possible foreign exchange rate variances were different, as indicated below:
Group Company
Profit before Equity Profit before Equity
income tax income tax
$’000 $’000 $’000 $’000
31 December 2010
US dollars (10% strengthening) (6,870) – (4,271) –
31 December 2009
US dollars (10% strengthening) (13,153) 9,241 3,456 –
A weakening of the Singapore dollar against the above currency at 31 December would have had the equal but opposite effect
to the amounts shown above, on the basis that all other variables remain constant.
90
Notes to the
Interest rate risk

Profile
At the reporting date, the interest rate profile of the interest-bearing financial instruments was:
Group Company
Carrying amount Carrying amount
2010 2009 2010 2009
$’000 $’000 $’000 $’000
Fixed rate instruments

Finance lease liabilities – (73) – –
Unsecured notes (222,788) (157,951) (222,788) (157,951)
(222,788) (158,024) (222,788) (157,951)
Variable rate instruments

Variable interest rate loans (376,478) (242,299) (273,418) (183,419)
Fair value sensitivity analysis for fixed rate instruments
The Group does not account for any fixed rate financial assets and liabilities at fair value through profit or loss, and the Group does
not designate derivatives (interest rate swaps) as hedging instruments under a fair value hedge accounting model. Therefore a
change in interest rates at the reporting date would not affect profit or loss.
Cash flow sensitivity analysis for variable rate instruments
A change of 75 basis points in interest rates at the reporting date would have increased/ (decreased) profit before income tax in
the income statement by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency
rates, remain constant. The analysis is performed on the same basis for 2009.
Profit before income tax

75 bp 75 bp
increase decrease
Group $’000 $’000
31 December 2010
Variable rate instruments (2,824) 2,824
31 December 2009
Company
31 December 2010
31 December 2009
91
Notes to the
Fair values
Fair values versus carrying amounts
The carrying amounts of the Group’s and the Company’s financial instruments carried at cost or amortised cost are not materially
different from their fair values as at 31 December 2010 and 2009 except as follows:
31 December 2010 31 December 2009

Carrying Fair Carrying Fair
Note amount value amount value
$’000 $’000 $’000 $’000
Group
Assets carried at amortised cost
Amounts due from associates (non-trade) 13 15,555 15,692 26,248 26,322
Liabilities carried at amortised cost

Unsecured notes 19 222,788 (232,801) (157,951) (168,122)
Company
Liabilities carried at amortised cost
Unsecured notes 19 222,788 (232,801) (157,951) (168,122)
The basis for determining fair values is described in note 30.
Interest rates used for determining fair value
The interest rates used to discount estimated cash flows, when applicable, are based on the government yield curve at the
reporting date plus an adequate credit spread, and are as follows:
Group
2010 2009
Amounts due from associates (non-trade) 6.0% 6.0%

Unsecured notes 3.0% 3.0%
Fair value hierarchy

The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined
as follows:
• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities
• Level 2 : inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly
(i.e., as prices) or indirectly (i.e., derived from prices)
• Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
Level 1 Level 2 Level 3 Total

$’000 $’000 $’000 $’000
Group and Company

31 December 2010
Derivatives – 754 – 754
Available-for-sale money market instrument – 2,429 – 2,429
– 3,183 – 3,183
31 December 2009
Derivatives – (479) – (479)
92
Notes to the
23 REVENUE
Group
2010 2009
$’000 $’000
Construction revenue 513,127 488,055

Operating and maintenance income 32,816 21,848
Sale of goods 17,780 7,632
Finance income 3,697 5,684
Finance lease income 378 363
Others 1,939 1,232
569,737 524,814
24 FINANCE COSTS
Group
2010 2009
$’000 $’000
Interest expense:
- bank loans 16,756 9,241
- finance lease liabilities 4 18
16,760 9,259
25 PROFIT BEFORE INCOME TAX
The following items have been included in arriving at profit before income tax:
Group
2010 2009
$’000 $’000
Net foreign currency exchange loss 16,355 2,110

Rental income from investment property (323) (329)
Interest income:
- fixed deposits with financial institutions (325) (426)
- associates (2,800) (2,832)
Fair value (gain)/loss on derivative financial instruments (754) 479
Gain on sale of investment property (1,186) –
Remeasurement to fair value of an associate to joint venture (22,787) –
Loss on sale of property, plant and equipment 380 1,392
Operating expenses arising from rental of investment property 88 79
Impairment of investments 264 2,058
Impairment of trade and other receivables 1,526 1,845
Gain on sale of other investments – (44)
Operating lease expense 6,023 4,715
Professional fees paid to firms in which a director is member 3 26
Contribution to defined contribution plans, included in staff costs 5,669 4,323
Employees’ share option expense, included in staff costs 1,829 3,809
Research expense 2,166 990
Government grant under Jobs Credit Scheme (260) (1,360)
93
Notes to the
26 INCOME TAX EXPENSE
Group
2010 2009
$’000 $’000
Current tax expense

Current year 11,561 9,153
Under/(over)provided in prior years 170 (507)
11,731 8,646
Deferred tax expense

Origination and reversal of temporary differences (314) 359
Reduction in tax rate – (334)
Underprovided in prior years 171 10
(143) 35
Income tax expense 11,588 8,681
Reconciliation of effective tax rate
Profit before income tax 100,473 82,972
Income tax using Singapore tax rate of 17% 17,080 14,105

Effect of different tax rates in foreign jurisdictions 773 1,051
Reduction in tax rate – (334)
Tax exempt income (2,650) (3,750)
Non-deductible expenses 2,388 3,416
Effect of partial tax exemption and tax reliefs (6,344) (5,310)
Under/(over)provided in prior years 341 (497)
11,588 8,681
A subsidiary was granted Pioneer Status in Singapore in respect of the production and sale of membrane systems. Accordingly,
the subsidiary enjoys tax exemption on income arising from sale of membrane systems subject to the terms and conditions of
the Pioneer Status.
Another subsidiary was awarded a 7-year Development and Expansion Incentive. Qualifying income earned during this period
is taxed at a concessionary rate of 5%.
In accordance with the “Income Tax Law of the People’s Republic of China for Enterprises with Foreign Investment and
Foreign Enterprises”, certain subsidiaries are entitled to full exemption from Enterprise Income Tax (“EIT”) for the first two
years and a 50% reduction in EIT for the next three years, commencing from the first profitable year after offsetting all tax
losses carried forward from the previous five years. A new Corporate Income Tax Law which took effect on 1 January 2008
stated that subsidiaries in the People’s Republic of China which have not utilised their five-year tax concessions under the old
tax law were required to utilise their first year of tax concession commencing from 2008. In addition, one of the subsidiaries
has High-Technology Status which is subject to a tax rate of 15%.
Subsidiaries incorporated in the British Virgin Islands (“BVI”) are exempt from income taxes in BVI in accordance with local
tax laws.
94
Notes to the
27 EARNINGS PER SHARE
Basic earnings per share

The calculation of basic earnings per share at 31 December 2010 is based on the profit attributable to ordinary shareholders
of $88,510,000 (2009: $75,036,000), and a weighted average number of ordinary shares outstanding of 841,682,000
(2009: 789,259,000^), calculated as follows:
Weighted average number of ordinary shares
Group
Note 2010 2009
’000 ’000
Issued ordinary shares at 1 January 20 528,365 525,271

Effect of own shares held – (208)
Effects of share options and warrants exercised 32,756 1,110
Effect of bonus issue 280,561 263,086^
Weighted average number of ordinary shares at 31 December 841,682 789,259^
Diluted earnings per share

The calculation of diluted earnings per share at 31 December 2010 was based on profit attributable to ordinary shareholders
of $88,510,000 (2009: $75,036,000), and a weighted average number of ordinary shares outstanding after adjustment for the
effects of all dilutive potential ordinary shares of 865,351,000 (2009: 803,212,000^), calculated as follows:
Weighted average number of ordinary shares (diluted)
Group
2010 2009
’000 ’000
Weighted average number of ordinary shares (basic) 841,682 789,259^

Effect of share options on issue 23,669 3,289^
Effect of warrants on issue – 10,664^
Weighted average number of ordinary shares (diluted) at 31 December 865,351 803,212^
The average market value of the Company’s shares for purposes of calculating the dilutive effect of share options was based on
quoted market prices for the period during which the options were outstanding.
^ For comparative purposes, the number of ordinary shares as at 31 December 2009 was adjusted to include issue of one bonus share for every two
existing ordinary shares in the calculation of basic earnings per share and diluted earnings per share.
28 SEGMENT REPORTING
(a) Operating segments

The Group has two reportable segments, as described below, which are the Group’s strategic business units. The strategic
business units offer different products and services, and are managed separately because they require different technology and
marketing strategies. For each of the strategic business units, the Group’s CEO (the chief operating decision maker) reviews
internal management reports on at least a quarterly basis. The following summary describes the operations in each of the Group’s
reportable segments:
• Municipal. Supplier of comprehensive range of innovative water and fluid treatment solutions to municipalities and
governments, including commissioning, operation and maintenance of a wide range of water treatment and liquid
separation plants on a turnkey or Design-Build-Own-Operate-Transfer arrangements.
95
Notes to the
28 SEGMENT REPORTING (cont’d)
(a) Operating segments (cont’d)

• Industrial. Liquid separation applications for the manufacturing sector such as the pharmaceutical, biotechnology, food
processing and petrochemical oil-related industries.
Other operations include emerging segments such as the renewable resources management business. None of these segments
meets any of the quantitative thresholds for determining reportable segments in 2010 or 2009.
Information regarding the results of each reportable segment is included below. Performance is measured based on segment
profit before income tax, as included in the internal management reports that are reviewed by the Group’s CEO. Segment profit
is used to measure performance as management believes that such information is the most relevant in evaluating the results of
certain segments relative to other entities that operate within these industries. Inter-segment pricing is determined on an arm’s
length basis.
(b) Geographical segments

The Group operates in 3 principal geographical areas: Singapore, China and Middle East and North Africa. In presenting
information on the basis of geographical segments, segment revenue is based on the geographical location of customers.
Segment assets are based on the geographical location of the assets.
Information about reportable segments
Municipal Industrial All other segments Total

2010 2009 2010 2009 2010 2009 2010 2009
$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
External revenues 511,180 469,832 55,144 54,394 3,413 588 569,737 524,814
Interest revenue – 1,854 1,203 – 175 – 1,378 1,854
Interest expense (3,783) – (16) (359) 115 – (3,684) (359)
Depreciation, amortisation
and impairment (3,378) (4,342) (14,967) (3,288) (2,593) (3,713) (20,938) (11,343)
Reportable segment
profit/(loss)
before income tax 132,687 103,753 (11,355) (7,431) (3,178) (4,685) 118,154 91,637
Share of profit/(loss)
of associates,
net of income tax 1,774 3,262 (1,103) (236) 1,288 (392) 1,959 2,634
Reportable
segment assets 900,623 595,778 249,208 241,998 14,015 14,903 1,163,846 852,679
Investments in associates 66,549 93,645 3,445 4,911 5,038 4,098 75,032 102,654
Capital expenditure 125,171 3,635 2,673 74,548 318 12,970 128,162 91,153
Reportable
segment liabilities 261,439 280,163 23,778 37,105 63,771 8,379 348,988 325,647
96
Notes to the
Reconciliations of reportable segment revenues, profit or loss, assets and liabilities and other material items
2010 2009
$’000 $’000
Revenues
Total revenue for reportable segments 566,324 524,226
Other revenue 3,413 588
Consolidated revenue 569,737 524,814
Profit or loss
Total profit or loss for reportable segments 121,332 96,322
Other profit or loss (3,178) (4,685)
118,154 91,637
Unallocated amounts:
- Other corporate expenses (19,640) (11,299)
Share of profit of associates, net of income tax 1,959 2,634
Consolidated profit before income tax 100,473 82,972
Assets
Total assets for reportable segments 1,149,831 837,776
Other assets 14,015 14,903
Investments in associates 75,032 102,654
Other unallocated amounts 120,824 117,230
Consolidated total assets 1,359,702 1,072,563
Liabilities
Total liabilities for reportable segments 285,217 317,268
Other liabilities 63,771 8,379
Other unallocated amounts 496,207 353,514
Consolidated total liabilities 845,195 679,161
Other material items in 2010
Reportable Consolidated
segment totals Adjustments totals
$’000 $’000 $’000
Interest revenue 1,203 1,922* 3,125

Interest expense (3,799) (12,961)* (16,760)
Capital expenditure 127,844 21,408^ 149,252
Depreciation, amortisation and impairment (18,345) (9,156)^ (27,501)
97
Notes to the
Other material items in 2009
Reportable Consolidated
segment totals Adjustments totals
$’000 $’000 $’000
Interest revenue 1,854 1,404* 3,258

Interest expense (359) (8,900)* (9,259)
Capital expenditure 78,183 24,954^ 103,137
Depreciation, amortisation and impairment (7,630) (8,891)^ (16,521)
* This represents interest revenue and interest expense that are not allocated to segments, as this activity is driven by Group Treasury, which manages
the cash position of the Group.
^ This represents capital expenditure and its related depreciation, amortisation and impairment incurred as a result of the overall business strategy
adopted by the Group. The allocation of these resources to the various reportable segments cannot be determined.
Geographical information
31 December 2010
Non-current
Revenues assets
$’000 $’000
Middle East and North Africa 343,810 60,247

People’s Republic of China 150,797 488,263
Singapore 75,130 117,498
569,737 666,008
31 December 2009
Non-current
Revenues assets
$’000 $’000
Middle East and North Africa 330,523 62,404

People’s Republic of China 181,327 382,308
Singapore 12,964 78,718
524,814 523,430
98
Notes to the
29 ACQUISITIONS OF A JOINT VENTURE AND NON-CONTROLLING INTERESTS
Business combination for the year ended 31 December 2010
In December 2010, the Group acquired additional 18.3% interest in Hyflux Water Trust (“HWT”), increasing its ownership from
31.7% to 50%. The investment was reclassified from an associate to a joint venture subsequent to the additional investment.
The acquisition had the following effect on the Group’s assets and liabilities on acquisition date:
Pre-acquisition Fair value Recognised

carrying adjustments values on
amounts acquisition
$’000 $’000 $’000
Property, plant and equipment 7,270 – 7,270

Intangible assets 69,602 23,293 92,895
Financial receivables 78,895 – 78,895
Deferred tax assets 445 324 769
Cash and cash equivalents 15,582 – 15,582
Trade and other receivables 8,921 – 8,921
Trade and other payables (24,918) – (24,918)
Tax payable (366) – (366)
Loans and borrowings (43,122) – (43,122)
Deferred tax liabilities (9,522) (8,534) (18,056)
102,787 15,083 117,870
Fair value of the Group’s existing interest of 31.7%

on acquisition date (74,701)
Goodwill on acquisition 8,118
Cash consideration not yet paid (8,493)
Consideration paid, satisfied in cash 42,794

Cash acquired (15,582)
Net cash outflow 27,212
Pre-acquisition carrying amounts were determined based on applicable FRS immediately before the acquisition. The values of
assets and liabilities recognised on acquisition are their estimated fair values.
The gain arising from the remeasurement to fair value of the Group’s existing interest in the associate represents the realisation
of revenue from previous sales of plants under service concession arrangements previously not recognised as construction
revenue under the service concession arrangements. As such, the gain has been recorded as part of revenue, consistent with
the Group’s accounting policy at note 3.14.
The goodwill recognised on the acquisition is attributable mainly to the future profitability and synergies related to customers’
contracts portfolio.
If the acquisition had occurred on 1 January 2010, management estimates that consolidated revenue would have been
$587,237,000 and consolidated profit for the year would have been $89,580,000. In determining these amounts, management
has assumed that the fair value adjustments that arose on the date of acquisition would have been the same if the acquisition had
occurred on 1 January 2010.
99
Notes to the
29 ACQUISITIONS OF A JOINT VENTURE AND NON-CONTROLLING INTERESTS (cont’d)
Acquisition of non-controlling interest

In February 2010, the Group acquired an additional 12% interest in Lube Oil Re-refining Co., LLC (“Lubrec”), increasing its
ownership from 83% to 95%.
In October 2010, the Group acquired an additional 49% interest in Sinolac (Singapore) Pte. Ltd. (“Sinolac”), increasing its
ownership from 51% to 100%.
The following summarises the effect of changes in the Company’s ownership interests in Lubrec and Sinolac:
Lubrec Sinolac
$’000 $’000
Company’s ownership at beginning of the year 12,520 15,318

Effect of increase in Company’s ownership interest 1,735 13,662
Share of comprehensive income (4,025) (1,646)
Company’s ownership at the end of the year 10,230 27,334
Acquisitions of non-controlling interests are accounted for as transactions with owners in their capacity as owners and therefore
no goodwill is recognised as a result of such transactions.
Business combinations for the year ended 31 December 2009

On 9 July 2009, the Group acquired an additional 41.5% interest in Lube Oil Re-refining Co., LLC, increasing its ownership from
41.5% to 83.0%.
On 6 October 2009, the Group acquired an additional 23.5% interest in Sinolac (Singapore) Pte. Ltd., increasing its ownership
from 27.5% to 51.0%. Out of the 23.5% additional interest acquired, 1.0% was acquired from a director of the Company at a
consideration of $371,000.
The companies became subsidiaries of the Group after the acquisitions and the investments were reclassified from associates to
subsidiaries accordingly. The companies’ contributions to the Group’s consolidated net profit for the year ended 31 December
2009 were not significant. The Group’s revenue and net profit for the year ended 31 December 2009 would not be significantly
different from those recognised in the consolidated income statement had the acquisitions occurred on 1 January 2009.
100
Notes to the
29 ACQUISITIONS OF A JOINT VENTURE AND NON-CONTROLLING INTERESTS (cont’d)
Business combinations for the year ended 31 December 2009 (cont’d)

The acquisitions had the following effect on the Group’s assets and liabilities on acquisition date:
Pre-acquisition Recognised
carrying Fair value values on
amounts adjustments acquisition
$’000 $’000 $’000
Property, plant and equipment 80,460 1,482 81,942

Intangible assets 3,290 – 3,290
Inventories 1,871 – 1,871
Trade and other receivables 8,684 – 8,684
Cash and cash equivalents 1,307 – 1,307
Loans and borrowings (38,377) – (38,377)
Trade and other payables (11,056) – (11,056)
Net identifiable assets and liabilities 46,179 1,482 47,661
Non-controlling interests (18,954)

Goodwill on acquisition 7,667
Amount previously accounted for as investments in associates (15,102)
Consideration paid, satisfied in cash 21,272

Cash acquired (1,307)
Net cash outflow 19,965
30 DETERMINATION OF FAIR VALUES
A number of the Group’s accounting policies and disclosures require the determination of fair value, for both financial and non-
financial assets and liabilities. Fair values have been determined for measurement and disclosure purposes based on the following
methods. When applicable, further information about the assumptions made in determining fair values is disclosed in the notes
specific to that asset or liability.
Property, plant and equipment

The fair value of property, plant and equipment recognised as a result of a business combination is based on market values. The
market value of property is the estimated amount for which a property could be exchanged on the date of valuation between
a willing buyer and a willing seller in an arm’s length transaction after proper marketing wherein the parties had each acted
knowledgeably and willingly.
Intangible assets
The fair value of intangible assets received as consideration for providing construction services in a service concession
arrangement is estimated by reference to the fair value of the construction services provided. The fair value of the construction
services provided is calculated as the estimated total cost plus a profit margin which the Group considers as a reasonable
margin. When the Group receives an intangible asset and a financial asset as consideration for providing construction services
in a service concession arrangement, the Group estimates the fair value of intangible assets as the difference between the fair
value of the construction services provided and the fair value of the financial asset received.
The fair value of other intangible assets is based on the discounted cash flows expected to be derived from the use and eventual
sale of the assets.
101
Notes to the
30 DETERMINATION OF FAIR VALUES (cont’d)
Inventories
The fair value of inventories acquired in a business combination is determined based on the estimated selling price in the ordinary
course of business less the estimated costs of completion and sale, and a reasonable profit margin based on the effort required
to complete and sell the inventories.
Investments in equity securities

It is not practicable to reliably estimate the fair value of available-for-sale unquoted investments due to the lack of quoted market
prices in an active market, significant range of reasonable fair value estimates, and the inability to reasonably assess the
probabilities of the various estimates.
Trade and other receivables

The fair value of trade and other receivables, including service concession receivables, is estimated as the present value of future
cash flows, discounted at the market rate of interest at the reporting date.

Fair value, which is determined for disclosure purposes, is calculated based on the present value of future principal and interest
cash flows, discounted at the market rate of interest at the reporting date. For finance leases, the market rate of interest is
determined by reference to similar lease agreements.
Intra-group financial guarantees

The value of financial guarantees provided by the Company to its subsidiaries is determined by reference to the difference in the
interest rates, by comparing the actual rates charged by the bank with these guarantees made available, with the estimated rates
that the banks would have charged had these guarantees not been made available.
Share-based payment transactions

The fair value of the employees’ share options is measured using the Black-Scholes standard option valuation model. Measurement
inputs include share price on measurement date, exercise price of the instrument, expected volatility (based on weighted average
historic volatility adjusted for changes expected due to publicly available information), weighted average expected life of the
instruments (based on historical experience and general option holder behaviour), expected dividends, and the risk-free interest
rate (based on government bonds). Service and non-market performance conditions attached to the grants are not taken into
account in determining the fair value of the options.
31 FINANCIAL RISK MANAGEMENT
The Group has exposure to the following risks from its use of financial instruments:
• credit risk
• liquidity risk
• market risk
This note presents information about the Group’s exposure to each of the above risks, the Group’s objectives, policies and
processes for measuring and managing risk, and the Group’s management of capital. Further quantitative disclosures are
included throughout these financial statements.
102
Notes to the
31 FINANCIAL RISK MANAGEMENT (cont’d)
Risk management framework

The Board of Directors has overall responsibility for the establishment and oversight of the Group’s risk management framework.
The Board has established the Risk Management Committee, which is responsible for developing and monitoring the Group’s
risk management policies. The committee reports regularly to the Board of Directors on its activities.
The Group’s risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk
limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly
to reflect changes in market conditions and the Group’s activities.
The Group Audit Committee oversees how management monitors compliance with the Group’s risk management policies and
procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Group. The Group
Audit Committee is assisted in its oversight role by Internal Audit. Internal Audit undertakes regular reviews of risk management
controls and procedures, the results of which are reported to the Audit Committee.
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual
obligations, and arises principally from the Group’s receivables from customers.
Trade and other receivables
The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management
also considers the demographics of the Group’s customer base, including the default risk of the industry and country in which
customers operate, as these factors may have an influence on credit risk.
The Group has a credit policy in place which establishes credit limits for all customers and monitors their balances on an
ongoing basis.
The Group establishes an allowance for impairment that represents its estimate of incurred losses in respect of trade and
other receivables. The main components of this allowance are a specific loss component that relates to individually significant
exposures, and a collective loss component established for groups of similar assets in respect of losses that have been
incurred but not yet identified. The collective loss allowance is determined based on historical data of payment statistics for
similar financial assets.
Guarantees
The Group’s policy is to provide financial guarantees only to subsidiaries and joint ventures.
Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities
that are settled by delivering cash or another financial asset. The Group’s approach to managing liquidity is to ensure, as far as
possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions,
without incurring unacceptable losses or risking damage to the Group’s reputation.
Typically the Group ensures that it has sufficient cash on demand to meet expected operational expenses, including the servicing
of financial obligations; this excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as
natural disasters. In addition, the Group maintains lines of credit that can be drawn down to meet short-term financing needs.
103
Notes to the
31 FINANCIAL RISK MANAGEMENT (cont’d)
Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect
the Group’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage
and control market risk exposures within acceptable parameters, while optimising the return.
The Group buys and sells derivatives, and also incurs financial liabilities, in order to manage market risks. All such transactions are
carried out within the guidelines set by the Risk Management Committee. Generally the Group seeks to apply hedge accounting
in order to manage volatility in profit or loss.
Capital management
The primary objective of the Group’s capital management is to support the Group’s growth strategy and maximise shareholder
value with the optimal capital structure.
The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or
adjust the capital structure, the Group may adjust the dividend payment to shareholders, return capital to shareholders or issue
new shares.
The Group monitors capital using a gearing ratio, which is net debt divided by total capital. The Group includes within net debt,
loans and borrowings, less cash and cash equivalents. Total equity of the Group represents capital for the Group.
Group
2010 2009
$’000 $’000
Loans and borrowings 599,266 400,323

Less: Cash and cash equivalents (222,286) (166,735)
Net debt 376,980 233,588
Total equity 514,507 393,402
Gearing ratio 73% 59%
From time to time, the Group purchases its own shares on the market; the timing of these purchases depends on market prices.
Primarily the shares are intended to be used for issuing shares under the Group’s share option programme. Buy and sell
decisions are made on a specific transaction basis by the Risk Management Committee; the Group does not have a defined
share buy-back plan.
There were no changes in the Group’s approach to capital management during the year.
The Group and its subsidiaries are not subject to externally imposed capital requirements other than the following:
(i) Certain subsidiaries of the Group are required by the Foreign Enterprise Law of the People’s Republic of China (“PRC”)
to contribute to and maintain a non-distributable Statutory Reserve Fund (“SRF”) whose utilisation is subject to approval
by the relevant PRC authorities (see note 20).
(ii) The Company is required under a financial covenant clause to maintain a consolidated total tangible net worth for the
Group of not less than $160 million.
These externally imposed capital requirements have been complied with by the Company and the relevant subsidiaries for
the financial year ended 31 December 2010.
104
Notes to the
32 OPERATING LEASES
Leases as lessee
Non-cancellable operating lease rentals are payable as follows:
Group
2010 2009
$’000 $’000
Within one year 4,340 4,047

Between one and five years 16,579 15,538
More than five years 59,677 52,327
80,596 71,912
The Group has various operating lease agreements for office equipment, offices and rental of land. Most leases contain
renewable options and some leases contain escalation clauses. The lease terms typically do not contain restrictions on the
Group’s activities concerning dividends, additional debt or further leasing.
Leases as lessor
The Group leases out its investment property held under operating leases (see note 7). The future minimum lease payments
under non-cancellable leases are as follows:
Group
2010 2009
$’000 $’000
Within one year – 336
33 CAPITAL COMMITMENTS
(i) At 31 December 2010, the Group has outstanding commitments in respect of uncalled capital of approximately
US$33,300,000 (2009: US$40,500,000) in an associate.
(ii) At 31 December 2010, the Group has outstanding capital commitments of $49,462,000 (2009: $6,252,000).
34 CONTINGENCIES
The Company has given formal undertakings to provide financial support to certain subsidiaries with deficit in shareholders’
equity for at least the next twelve months from the end of the reporting period.
The Group has potential contingencies arising from the delayed completion of a water plant construction project. However, the
Group has a counter-claim against the customer for the additional costs incurred as a result of the customer’s prolongation of the
project, as well as a claim for additional mobilisation fees due to the delay in the handing over of the water plant by the customer.
At 31 December 2010, the Group is still in negotiation with the customer and currently, no contingent liabilities or assets have
been recognised by the Group.
105
Notes to the
35 RELATED PARTIES
Transactions with key management personnel

Key management personnel
Key management personnel of the Group are those persons having the authority and responsibility for planning, directing and
controlling the activities of the Group. The directors and management committee of the Company and the Group are considered
as key management personnel of the Company and the Group.
Key management personnel compensation comprised:
Group
2010 2009
$’000 $’000
Directors’ fees 490 577

Short-term employee benefits 4,678 3,393
Share-based payments 761 690
5,929 4,660
Comprise amounts paid/payable to:

- Directors of the Company 2,277 1,764
- Other key management personnel 3,652 2,896
5,929 4,660
The directors of the Company also participate in the Hyflux Employees’ Share Option Scheme. Details of options granted to the
directors under the Scheme are described in note 21.
Other related party transactions

Other than as disclosed elsewhere in the financial statements, transactions carried out in the normal course of business on terms
agreed with related parties are as follows:
Group
2010 2009
$’000 $’000
Director
Acquisition of non-controlling interest 774 371
Joint venture
Rental income 36 27
Associates
Revenue from construction contracts 293,754 335,631
Revenue from maintenance contracts 30,594 17,731
Management fee income 883 885
106
Notes to the
36 SUBSEQUENT EVENTS
On 19 January 2011, the Group has issued 5-year fixed rate notes with principal amount of $55 million (“the notes”) under
the $300 million unsecured multi-currency debt issuance programme. The notes carry a coupon rate of 3.89% per annum
and will mature in January 2016. The notes will be used to fund the refinancing of existing banking facilities as well as certain
construction projects.
On 21 January 2011, the Group has successfully completed the book-build of its new 5-year US dollar syndicated loan facility
(the “new facility”). The new facility replaces the existing US$138,000,000 facility that will be maturing in August 2011. However,
in 2010, the Group has obtained unconditional underwriting from the lead arrangers and bookrunners of the new facility.
On 7 March 2011, the Group has been named as the preferred bidder by PUB, Singapore’s national water agency, to design,
build, own and operate a seawater desalination plant for a concession period of 25 years. The project includes the construction
of a power plant to the desalination plant, and the excess electricity will be sold to the power grid. Total project costs of the
desalination plant and power plant is $890,000,000. The project is expected to commence operation by 2013.
107
Corporate Governance Statement
INTRODUCTION
Hyflux continues to place great importance on the governance of the Company and its subsidiaries, which it believes is vital to
its well being and success. Hyflux is committed to best practice corporate governance and processes that will enhance the
Group’s effectiveness, ensure the appropriate degree of accountability and transparency and an increase in long term value and return
to shareholders.
The Group subscribes to the Code of Corporate Governance 2005 (“Code”) and believes that this forms a sound platform for
supporting good corporate governance practices.
This statement outlines the main corporate governance practices of the Group with specific reference made to the principles and
guidelines of the Code, forming part of the Continuing Obligations set out in the Singapore Exchange Securities Trading Limited’s
Listing Manual.
Hyflux will continue to review and refine its practices especially in light of the Audit Committee Guidance Committee (“ACGC”)
guidebook, and other standards of best practice that develop in the market, consistent with the needs and the circumstances of
the Group.
In developing the appropriate corporate governance practices, the Group takes into account all applicable legislation and recognised
standards. Hyflux is committed to instilling and maintaining good corporate governance at all times.
The Board is pleased to report that throughout the reporting period for the financial year ended 31 December 2010, Hyflux complied
with the Code’s principles and guidelines.
BOARD MATTERS
BOARD’S CONDUCT OF ITS AFFAIRS:

Principle 1: Effective Board to lead and control the Company
Role of the Board

The primary role of the Board is to protect and enhance long-term shareholders value and on ensuring that the Company is run in
accordance with best international management and corporate governance practices, appropriate to the needs and development of
the Company.
The Board is responsible for general oversight of the Company’s activities and performance and for setting the Company’s overall
strategic direction. It provides leadership and guidance on corporate strategy, business directions, risk policy and implementation of
corporate objectives, thereby taking responsibility for the overall corporate governance of the Group.
In delegating responsibility for the day-to-day operation and leadership of the Company to the Executive Director and Chief Executive
Officer and the Management team, the Board has processes and systems in place to ensure that significant issues, risks and major
strategic decisions are monitored and considered at Board level.
To assist in the execution of its responsibilities, the Board has established several Board Committees namely; Audit Committee,
Nominating Committee, Remuneration Committee and Risk Management Committee. These Committees function within clearly defined
terms of reference, which are reviewed on a regular basis.
Matters which are specifically reserved to the full Board for decision are those involving material acquisitions, disposal of assets,
corporate or financial restructuring, share issuances, dividends and other returns to shareholders, conflict of interest for substantial
shareholder or Director, as well as interested person transactions.
The Board held four meetings in the 2010 financial year. The Board may convene additional meetings to address any specific significant
matters that may arise from time to time.
A summary of attendance by Directors at Board and Committee Meetings for the financial year ended 31 December 2010 is
as follows:
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Corporate Governance Statement (cont’d)
Board of Audit Nominating Remuneration Risk Management

Directors Committee Committee Committee Committee
No. of No. of No. of No. of No. of No. of No. of No. of No. of No. of
Meetings Meetings Meetings Meetings Meetings Meetings Meetings Meetings Meetings Meetings
Name Held Attended Held Attended Held Attended Held Attended Held Attended
Olivia Lum Ooi Lin 4 4 4 4* 2 2 2 2* 6 3*

Teo Kiang Kok 4 4 4 4 2 2 NA NA 6 4
Lee Joo Hai 4 4 4 4 NA NA 2 2 6 6
Gay Chee Cheong 4 4 4 4 2 2 2 2 NA NA
Christopher Murugasu 4 4 NA NA NA NA 2 2 6 5
Professor Tan
Teck Meng 4 2 4 2 NA NA 2 1 NA NA
Rajsekar
Kuppuswami Mitta 4 4 NA NA NA NA NA NA 6 6
Legend:
* Attendance by invitation
NA Not Applicable
BOARD COMPOSITION AND GUIDANCE

Principle 2: Strong and independent element on the Board
The seven members’ board of the Company in office as at the date of this report is set out as follows:
Audit Nominating Remuneration Risk Management

Name Board Committee Committee Committee Committee
Olivia Lum Ooi Lin Executive Director Member

Non-Executive
Teo Kiang Kok Independent Director Member Member Member
Non-Executive
Lee Joo Hai Independent Director Chairman Member Member
Non-Executive
Gay Chee Cheong Independent Director Member Chairman Member
Non-Executive
Christopher Murugasu Independent Director Member Member
Non-Executive
Professor Tan Teck Meng Independent Director Member Chairman
Non-Executive
Rajsekar Kuppuswami Mitta Independent Director Chairman
The Board considers an independent Director as one who has no relationship with the Company, its related companies or its officers
that could interfere or be reasonably perceived to interfere, with the exercise of the Director’s independent business judgment acting
in the interest of the Company.
While all the Directors have equal responsibilities for the performance of the Group, Non-Executive members of the Board exercise
no management function in the Company or any of its subsidiaries. The role of Non-Executive Directors is primarily to ensure that the
strategies proposed by the Management are fully discussed, vigorously examined, taking into consideration the long term interest of the
shareholders, employees, customers, suppliers and the communities in which the Group conducts its business.
The Board believes the composition of the Board requires consideration of a number of factors, including the mix in skills, abilities and
expertise, the mix in the length of time Directors have had on the Board, as well as experience on other boards. The general policy of
the Company is to seek to have the Board comprised of at least half independent Directors.
109
The Board is of the view that there is a strong and independent element on the Board in that all Directors, other than Ms Olivia Lum
Ooi Lin, are Non-Executive Independent Directors. The present Board size and number of Board Committees facilitate effective
decision making and is appropriate for the nature and scope of the Group’s business and operations.
The Board consists of respected business leaders and professionals whose collective core competencies and experience are
extensive, diverse and relevant to the Group. The names, qualifications and relevant skills, experience and expertise of the Directors
can be found on pages 14 - 16 of this report. As evidenced by this information, the Directors bring to the Board a broad range of
experience and expertise.
CHAIRMAN AND CHIEF EXECUTIVE OFFICER (“CEO”)

Principle 3: Clear division of responsibilities at the top of the Company
The Board does not have a chairman on the Board of Directors. Responsibilities for various functions and departments in the Group are
well defined. The Board is of the opinion that the process of decision making by the Board has been independent, based on collective
decisions without any individual exercising any considerable concentration of power or influence.
BOARD MEMBERSHIP
Principle 4: Formal and transparent process for appointment of new directors to the Board
The Nominating Committee (“NC”) has been tasked by the Board to identify, select and recommend individuals with the appropriate
skills, expertise and experience for appointment, thereby ensuring a balanced and effective Board at all times.
Newly appointed Directors are provided with a training and induction programme, so as to familiarise him with the Group’s structure
and its business.
The NC comprises of three Directors:
Mr Gay Chee Cheong (Chairman)

Mr Teo Kiang Kok
Ms Olivia Lum Ooi Lin
The primary function and duties of the NC are outlined as follows:
1. to make recommendations to the Board on all Board appointments and re-nomination having regard to the Director’s contribution
and performance (e.g. attendance, preparedness, participation, candour, and any other salient factors);
2. to ensure that all Directors would be required to submit themselves for re-nomination and re-election at regular intervals and at
least once in every three years;
3. to determine annually whether a Director is independent, in accordance with the independence guidelines in the Code;
4. to review whether a Director is able to and has adequately carried out his duties as a Director of the Company in particular where
the Director concerned has multiple board representations; and
5. to consider how the Board’s performance may be evaluated and to propose objective performance criteria.
The NC conducts an annual review of Directors’ independence and based on the Code’s criteria for independence, the NC is of the
view in respect of financial year ended 31 December 2010, Mr Teo Kiang Kok, Mr Lee Joo Hai, Mr Gay Chee Cheong, Professor Tan
Teck Meng, Mr Rajsekar Kuppuswami Mitta and Christopher Murugasu are deemed independent.
The NC has recommended the nomination of Directors retiring by rotation under the Company’s Articles of Association, namely,
Mr Rajsekar Kuppuswami Mitta and Professor Tan Teck Meng.
In reviewing the nomination of the retiring directors, the NC considered the performance and contribution of each of the retiring directors,
having regards not only to their attendance and to participation at Board and Board Committee meetings but also the time and efforts
devoted to the Group’s business and affairs.
110
BOARD PERFORMANCE
Principle 5: Formal assessment of the effectiveness of the Board and contributions by each Director.
The Code recommends that the NC be responsible for assessing the Board as a whole and the individual Directors’ contribution. The
NC believes that it is more appropriate and effective to assess the Board as a whole, bearing in mind that each member of the Board
contributes in different ways to the success of the Group.
The NC in conducting the evaluation and appraisal process focuses on a set of performance criteria which includes the evaluation of
the size and composition of the Board, the Board’s access to information, Board processes and accountability, Board performance in
relation to discharging its principal responsibilities and the Directors’ standards of conduct.
The Board is of the view that the financial indicators, as set out in the Code as a guide for the evaluation of the Board and its Directors,
may not be appropriate as they are more relevant as a form of measurement of the Management’s performance. The NC conducted a
Board performance evaluation to assess the effectiveness of the Board throughout the financial year ended 31 December 2010 and is
satisfied that sufficient effort, time and attention has been given by the Directors to the affairs of the Group.
ACCESS TO INFORMATION
Principle 6: Board members to have complete, adequate and timely information
The Board has separate and independent access to senior Management of the Group, the Company Secretary and the external auditors
at all times. The Directors also have unrestricted access to the Company’s records and information, all minutes of meetings held by the
Board and Board Committees, and management accounts to enable them to carry out their duties.
The Company Secretary attends all Board and Board Committee meetings. The Company Secretary administers, attends and prepares
minutes of the Board and Board Committee meetings, and assists in ensuring that Board procedures are followed and reviewed in
accordance with the Company’s Articles of Association so that the Board functions effectively and the relevant rules and regulations
applicable to the Company are complied with. The Company Secretary’s role is to advise the Board on all governance matters, ensuring
that legal and regulatory requirements as well as board policies and procedures are complied with.
Should Directors whether as a group or individually require professional advice, the Company shall upon the direction of the Board,
appoint a professional advisor selected by the Group or the individual, approved by Management, to render the service. The costs of
such service shall be borne by the Company.
PROCEDURES FOR DEVELOPING REMUNERATION POLICIES

Principle 7: Formal and transparent procedure for fixing remuneration packages of Directors and senior management
The Remuneration Committee (“RC”) comprises of four Directors:
Professor Tan Teck Meng (Chairman)

Mr Gay Chee Cheong
Mr Lee Joo Hai
Mr Christopher Murugasu
The RC is committed to the principles of accountability and transparency; and to ensuring that remuneration arrangements demonstrate
a clear link between reward and performance.
The RC is responsible for ensuring a formal and transparent procedure for developing policy on executive remuneration, and for fixing
the remuneration packages of individual Directors and senior Management employees.
The RC’s review covers all aspects of remuneration including but not limited to, Directors’ fees, salaries, allowances, bonus, employees
share options and benefits in kind and specific remuneration package for each Director.
In structuring a compensation framework for Executive Director and senior Management employees, the RC seeks to link a proportion
of the compensation to the Group’s performance. Its recommendations are made in consultation with the Executive Committee and
submitted for endorsement by the Board. No Director is involved in deciding his own remuneration. The RC, when deemed necessary,
may obtain expert advice with regard to remuneration matters.
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LEVEL AND MIX OF REMUNERATION

Principle 8: The level of remuneration for Directors should be adequate, not excessive, and linked to performance.
The remuneration policy of the Company is to provide compensation packages at market rates, which reward performance and attract,
retain and motivate Directors and members of the senior Management team.
The Executive Director does not receive Directors’ fees. The Executive Director and senior Management employees’ remuneration
packages are based on service contracts and their remuneration is determined having due regard to the performance of the individuals,
the Group as well as market trends.
Non-Executive Directors are paid yearly Directors’ fees of an agreed amount based on their contributions, taking into account factors
such as effort and time spent, responsibilities of the Directors and the need to pay competitive fees to attract, motivate and retain
the Directors.
DISCLOSURE ON REMUNERATION
Principle 9: Clear disclosure of remuneration policy, level and mix of remuneration, and the procedure for setting the remuneration
An appropriate and attractive level of remuneration has been set to attract, retain and motivate Directors and employees. The remuneration
package for executive director and employees consists of both fixed and variable components. The variable component is determined
based on the performance of the individual employee and the Group’s performance in the relevant financial year. Annual increments and
adjustments to remuneration are reviewed and approved taking into account the outcome of the annual appraisal of the employees.
Non-Executive Directors are paid Directors’ fees that are subject to shareholders’ approval at the Company’s Annual General
Meeting (“AGM”). The RC recommends a total Directors’ fees of $490,000 be paid to Non-Executive Directors for the financial
ended 31 December 2010. This will be tabled for the shareholders’ approval at the forthcoming AGM.
Details of the Directors receiving remuneration from the Group for the year ended 31 December 2009 and 2010 are set out
as follows:
Number of Directors
Remuneration band 2010 2009
Between S$1,500,000 to S$1,750,000 1 0

Between S$250,000 to S$1,500,000 0 1
Below S$250,000 6 7
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The following table sets out the summary compensation table for Directors and top five key executives for the financial year ended
31 December 2010:
Employees’ Share Allowances and

Salary Bonus Fees option Scheme other benefits Total
DIRECTORS
Between S$1,500,000 to S$1,750,000
Olivia Lum Ooi Lin 39% 55% 0% 4% 2% 100%
Below S$250,000
Gay Chee Cheong 0% 0% 67% 33% 0% 100%
Lee Joo Hai 0% 0% 69% 31% 0% 100%
Teo Kiang Kok 0% 0% 64% 36% 0% 100%
Christopher Murugasu 0% 0% 64% 36% 0% 100%
Professor Tan Teck Meng 0% 0% 67% 33% 0% 100%
Rajsekar Kuppuswami Mitta 0% 0% 64% 36% 0% 100%
TOP FIVE KEY EXECUTIVES

Between S$1,500,000 to S$1,750,000
Olivia Lum Ooi Lin 39% 55% 0% 4% 2% 100%
S$1,000,000 to S$1,250,000
Sam Ong 37% 44% 0% 15% 5% 100%
S$750,000 to S$1,000,000
Cho Wee Peng 44% 43% 0% 11% 2% 100%
Below S$750,000
Winnifred Heap 52% 31% 0% 15% 2% 100%
Fong Chun Hoe 56% 30% 0% 12% 2% 100%
Foo Hee Kiang 63% 22% 0% 3% 12% 100%
Immediate Family members of Directors
There are no immediate family members of Directors or controlling shareholders in employment with the Group and whose
remuneration exceeds S$150,000 during financial year ended 31 December 2010.
ACCOUNTABILITY
Principle 10: Board should present a balanced and understandable assessment of the Company’s performance, position
and prospects
The Board promotes timely and balanced disclosure of all material matters concerning the Group. It updates shareholders on
the operations and financial position of the Group through quarterly, half yearly and full year results announcements as well
as timely announcements of other matters as prescribed by the SGX-ST’s Listing Manual requirements and other relevant rules
and regulations.
The Board is accountable to shareholders for the management of the Group and the Management is accountable to the Board by
providing the Board with the necessary financial information for the discharge of its duties.
113
AUDIT COMMITTEE
Principle 11: Establishment of Audit Committee with written terms of reference
The Audit Committee (“AC”) comprises the following members:
Mr Lee Joo Hai (Chairman)

Mr Gay Chee Cheong
Mr Teo Kiang Kok
In accordance with the principles in the Code, the AC comprises of all Non-Executive Directors. The members of AC, collectively,
have expertise and extensive experience in legal, accounting, financial management and business, and are qualified to discharge the
AC’s responsibilities.
The primary functions of the AC are as follows:
1. assists the Board in discharging its statutory responsibilities on financial and accounting matters;
2. reviews the financial and operating results and accounting policies of the Group;
3. reviews significant financial reporting issues and judgments relating to financial statements for each financial year, interim and
annual results announcement before submission to the Board for approval;
4. reviews the adequacy of the Company’s internal control (financial and operational) and risk management policies and systems
established by the Management;
5. reviews the audit plans and reports of the external and internal auditors and consider the effectiveness of the actions taken by
Management on the auditors’ recommendations;
6. appraises and reports to the Board on the audits undertaken by the external and internal auditors, the adequacy of the disclosure
of information, and the appropriateness and quality of the system of management and internal controls;
7. reviews the independence of external auditors annually and consider the appointment or re-appointment of external auditors
and matters relating to the resignation or removal of the auditors and approve the remuneration and terms of engagement of the
external auditors; and
8. reviews interested person transactions, as defined in the Listing Manual of the SGX-ST.
In fulfilling its responsibilities, the AC receives regular reports from the Management and the external auditors, KPMG LLP. The AC
has full access to and co-operation of the Management and meets with KPMG LLP in private at least once a year, and more frequently
if necessary.
The AC has explicit authority within the scope of its responsibilities to seek any information it requires or investigate any matter within its
terms of reference. The AC has adequate resources to enable it to discharge its responsibilities properly.
The Group has put in place a confidential communication programme as endorsed by the AC. Employees may, in confidence, raise
concerns about possible corporate improprieties in matters of financial reporting or other matters and to ensure that arrangements
are in place for the independent investigations of such matters and for appropriate follow up actions. The details of the confidential
communication programme and arrangements have been made available to all employees.
114
INTERNAL CONTROLS
Principle 12: The Board to ensure that the Management maintains a sound system of internal controls to safeguard the shareholders’
investments and the Company’s assets
The AC is fully aware of the need to put in place a system of internal controls within the Group to safeguard the shareholders’ interests
and the Group’s assets, and to manage risks. The system is intended to provide reasonable but not absolute assurance against material
misstatements or loss, and to safeguard assets and ensure maintenance of proper accounting records, reliability of financial information,
compliance with appropriate legislation, regulation and best practice, and the identification and containment of business risks.
The Group regularly reviews and improves its business and operational activities to identify areas of significant business risks as well
as taking appropriate measures to control and mitigate these risks. The Group reviews all significant control policies and procedures
and highlights all significant matters to the AC and the Board. The financial risk management objectives and policies are outlined in the
financial statements. Risk Management alone does not guarantee that business undertakings will not fail. However, by identifying and
managing risks that may arise, the Group is in a position to make more informed decisions and will benefit from a better balance between
risk and reward. This will assist in protecting and creating shareholders’ value.
Based on the information provided to the AC, it is not aware of any issues causing it to believe that the system of internal controls and
risk management as inadequate.
INTERNAL AUDIT
Principle 13: Setting up independent internal audit function
The Group has put in a place a dedicated team of internal auditors. The internal audit function includes reviewing the effectiveness of
the material internal controls of the Group. The Internal Audit Director reports directly to the Chairman of the AC and has an appropriate
standing within the Group. The AC meets with the Internal Auditor in private at least once a year. The AC also ensures that the internal
audit function is adequately resourced, and reviews annually the adequacy of the internal audit function. The internal audit team meets
the standards set by nationally and internationally recognized professional bodies including the Standards for the Professional Practice
of Internal Auditing set by The Institute of Internal Auditors.
Within this framework, the internal audit function provides reasonable assurance that the risks incurred by the Group in each major
activity will be identified, analysed and managed by Management. The Internal Auditor will also make recommendations to enhance the
effectiveness and security of the Group’s operations.
COMMUNICATION WITH SHAREHOLDERS
Principle 14: Regular, effective and fair communication with shareholders
Principle 15: Shareholders’ participation at AGM
The Company is committed to regular and proactive communication with its shareholders. It aims to provide shareholders with clear,
balanced, useful and material information on a timely basis to ensure that shareholders receive a balanced and up-to-date view of the
Group’s performance and business.
Where there is inadvertent disclosure made to a selected group, the Company will make the same disclosure publicly as soon as
practicable. Communication is made through:
1. annual reports that are prepared and issued to all Shareholders. The Board makes every effort to ensure that the annual report
includes all relevant information about the Group, including future development and other disclosures required by the Companies’
Act, Chapter 50, and Singapore Statements of Accounting Standards;
2. quarterly and full-year financial statements comprising a summary of the financial information and affairs of the Group for the
relevant period;
3. explanatory memoranda for AGM and extraordinary general meetings;
115
4. press releases on major developments of the Group;
5. disclosures to the SGX-ST via SGXNET; and
6. the Group’s website at www.hyflux.com at which shareholders can access information on the Group at all times.
In addition, shareholders are encouraged to attend the Company’s AGM to ensure a high level of accountability and to stay informed
of the Group’s strategies and growth.
In accordance with the principles in the Code, the full Board of Directors and the external auditor in office are required to attend the
Company’s AGM and will address any question raised at the meeting. The Group fully supports the Code’s principle to encourage
active shareholder participation.
RISK MANAGEMENT COMMITTEE
The Risk Management Committee (“RMC”) comprises the following members:-
Mr Rajsekar Kuppuswami Mitta (Chairman)

Mr Christopher Murugasu
Mr Lee Joo Hai
Mr Teo Kiang Kok
The functions of the RMC are as follows:
1. to review with Management, and, where needed, with external consultants on areas of risk that may affect the viability
and smooth operations of the Company, as well as Management’s risk mitigation efforts, with the view of safeguarding
shareholder’s interest and Group assets;
2. to direct and work with Management to develop and review policies and processes to address and manage identified areas of
risk in a systematic and structured manner;
3. to make recommendations to the Board in relation to business risks that may affect the Company, as and when these
may arise;
4. to review new investments; and
5. to perform any other functions as may be agreed by the Board.
Executive Committee
As part of the streamlining of decision-making measures, the Board dispensed with the Executive Committee in February 2010.
Management Committee
The members of the Management Committee for financial year ending 31 December 2010 are:
Ms Olivia Lum Ooi Lin (Chairman)

Mr Sam Ong
Mr Cho Wee Peng
Ms Winnifred Heap
Mr Fong Chun Hoe
Mr Foo Hee Kiang
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DEALING IN SECURITIES
The Company has adopted its own internal compliance code pursuant to the SGX-ST’s best practices on dealings in securities and
these are applicable to all its officers in relation to their dealings in the Company’s securities. Its officers are advised not to deal in
the Company’s shares during the period commencing two weeks or one month before the announcement of the Company’s interim
or full year results respectively, or if they are in possession of unpublished price-sensitive information of the Company. In addition, its
directors and officers are expected to observe insider trading laws at all times even when dealing in securities within the permitted
trading period.
The Group has complied with the Best Practices Guide on Securities Transactions issued by the Singapore Exchange.
MATERIAL CONTRACTS
There are no material contracts of the Company or its subsidiaries involving the interests of the Group CEO, each Director or controlling
shareholders, either still subsisting at the end of the financial year or entered into since the end of the previous financial year.
INTERESTED PARTY TRANSACTION
The Group has established procedures to ensure that all transactions with interested persons are reported on a timely manner to the
AC and that the transactions are at arm’s length basis. All interested person transactions are subject to review by the AC to ensure
compliance with the established procedures.
117
Supplementary Information
INTERESTED PARTY TRANSACTION
The Group has established procedures to ensure that all transactions with interested persons are reported on a timely manner to the
AC and that the transactions are at arm’s length basis. All interested person transactions are subject to review by the AC to ensure
compliance with the established procedures.
Aggregate value of all

interested person transactions
during the financial year Aggregate value of all
under review (excluding transactions interested person transactions
conducted under shareholders' conducted under shareholders'
mandate pursuant to Rule 920 mandate pursuant to Rule 920
Name of interested person under SGX-ST Listing Manual) under SGX-ST Listing Manual
Shook Lin & Bok S$3,000 in respect of Nil

professional services rendered
Gay Chee Cheong S$774,000 in respect of consideration Nil

paid for 2.15% of interest held by him
in a subsidiary of the Company
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Supplementary Information (cont’d)
Major properties held for development
Group
Approximate Expected effective
Site area total lettable Stage of date of interest
Description Location (sqm) Intended use area (sqm) completion completion (%)
Factory and 8 Tuas South Lane 77,172 Commercial 19,000 59% 3rd Quarter 100
warehouse building Singapore 637302 of 2011
Office and Bendemeer Road 17,174 Commercial 34,800 6% 1st Quarter 100
factory building of 2012
Approximate Group’s
Site area total lettable effective
Description Location (sqm) Existing use area (sqm) interest (%) Tenure
Other major properties
Office and 5 Changi South Street 1 10,472 Commercial 5,630 100 60 years
factory building Singapore 486764 commencing
from 1 March
1997
Factory building No. 99 Juli Road Zhangjiang 8,297 Commercial 7,647 100 50 years
High-Tech Park Pudong commencing
Shanghai, China 201203 from 26 April
2001
Office and 8# Factory in EPZ, 9# 18,040 Commercial 23,115 100 50 years

factory building Yang Zi Jiang South Road, commencing
Yangzhou Jiangsu Province, from 2007
China
Office and No 99 Tai Zhen Road, Bin 25,959 Commercial 12,980 100 50 years
factory building Jiang Industrial Park, Taizhou commencing
Economic Development from 12 June
Zone, Taizhou City, JiangSu 1994
Province, China
Office building 1307-1309 Centre Plaza 384 Commercial 232 100 50 years
188, Jiefangbei HePing commencing
District Tianjin, China from 12 June
300042 1994
Office and Long Gang District, Beigang 112,555 Commercial 93,565 100 50 years
factory building Industrial Park, Long Cheng commencing
Road, Huludao City, 31 October
Liaoning Province, China 2006
125003
119
Statistics of Shareholdings
as at 14 March 2011
SHARE CAPITAL
Class of shares : Ordinary shares

Voting rights : One vote per share
Total number of issued shares : 860,347,364
No. of issued shares (excluding Treasury Shares) : 859,847,364
No. of Treasury Shares and percentage : 500,000 (0.06%)
DISTRIBUTION OF SHAREHOLDINGS
Size of Shareholdings No. of Shareholders % No. of Shares %
1 - 999 256 1.92 128,768 0.02

1,000 - 10,000 10,542 78.95 45,496,008 5.29
10,001 - 1,000,000 2,525 18.91 78,180,193 9.09
1,000,001 and above 30 0.22 736,042,395 85.60
Total 13,353 100.00 859,847,364 100.00
TWENTY LARGEST SHAREHOLDERS
S/No. Name No. of Shares %
1. Olivia Lum Ooi Lin 252,351,211 29.35

2. Citibank Nominees Singapore Pte Ltd 147,771,447 17.19
3. DBS Nominees Pte Ltd 138,727,695 16.13
4. HSBC (Singapore) Nominees Pte Ltd 53,458,254 6.22
5. DBSN Services Pte Ltd 19,524,377 2.27
6. Nomura Singapore Limited 16,226,000 1.89
7. United Overseas Bank Nominees Pte Ltd 15,481,863 1.80
8. Raffles Nominees (Pte) Ltd 14,840,045 1.73
9. Murugasu Deirdre 12,306,267 1.43
10. DB Nominees (S) Pte Ltd 10,893,414 1.27
11. Morgan Stanley Asia (Singapore) Securities Pte Ltd 8,616,457 1.00
12. OCBC Securities Private Ltd 4,458,021 0.52
13. Merrill Lynch (Singapore) Pte Ltd 4,432,937 0.52
14. UOB Kay Hian Pte Ltd 4,385,405 0.51
15. Phillip Securities Pte Ltd 3,991,180 0.46
16. Foo Hee Kiang 3,976,368 0.46
17. Yong Siew Yoon 3,000,000 0.35
18. OCBC Nominees Singapore Private Limited 2,616,427 0.30
19. Koh Lip Lin 2,386,183 0.28
20. BNP Paribas Securities Services Singapore Pte Ltd 2,307,831 0.27
Total 721,751,382 83.95
Approximately 63.58% of the Company’s shares are held in the hands of the public.
Accordingly, the Company has complied with Rule 723 of the Listing Manual of SGX-ST.
120
Substantial Shareholders
as at 14 March 2011
Name of Shareholder Direct Interest Deemed Interest %
Olivia Lum Ooi Lin 252,351,211 15,000,0001 31.09

Mondrian Investment – 43,463,2482 5.05
Partners Limited
Note:
¹ Shares held in the name of nominees.
² Mondrian Investment Partners Limited (“Mondrian”) is a London-based discretionary investment manager. In respect of assets
managed under investment management agreement between Mondrian and its clients, various clients (in this regard) are the
beneficial owners of holdings which are held in custody by the client’s own appointed custodian.
121
Hyflux Group of Companies
Singapore Hyflux NewSpring (Jiawang) Co., Ltd IndoSpring Utility Ltd

AcquaSpring Utility (Benghazi) Pte Ltd Hyflux NewSpring (Leping) Co., Ltd SinoSpring Utility Ltd
AcquaSpring Utility (S) Pte Ltd Hyflux NewSpring (Liaoyang) Co., Ltd Spring China Utility Ltd
AcquaSpring Utility (Tobruk) Pte Ltd Hyflux NewSpring (LiaoYangGongChangLing) Spring Environment Ltd
AcquaSpring Utility (Tripoli East) Pte Ltd Co., Ltd Spring Utility Ltd
Eflux Singapore Pte Ltd Hyflux NewSpring (Nantong) Co., Ltd
Eflux SK Pte Ltd (in Members’ Voluntary Hyflux NewSpring (Nantong) WT Co., Ltd
liquidation) Hyflux NewSpring (Nantong) WWT Co., Ltd Europe
Eflux Vietnam Pte Ltd Hyflux NewSpring (Taizhou) Co., Ltd France
Energy Life Pte Ltd Hyflux NewSpring (Taoyuan) Co., Ltd Tlemcen Desalination Investment Company
Galaxy NewSpring Pte Ltd Hyflux NewSpring (Tianjin) Co., Ltd SAS
Galaxy NewSpring Capital Pte Ltd Hyflux NewSpring (Tiantai) Co., Ltd
Galaxy Operation and Management Pte Ltd Hyflux NewSpring (Wuxi) Co., Ltd Netherlands
H.J. Technical Consultant Pte Ltd Hyflux NewSpring (Yangzhou) Co., Ltd
Hyflux CEPAration B.V.
Hydrochem Engineering (S) Pte Ltd Hyflux NewSpring (Zunhua) Co., Ltd
Hyflux CEPAration Technologies (Europe) B.V.
Hydrochem (S) Pte Ltd Hyflux NewSpring Construction Engineering
Hyflux Asset Management Pte Ltd (Shanghai) Co., Ltd
Netherlands Antilles
Hyflux Aquosus (Singapore) Pte Ltd Hyflux NewSpring Sewage Disposal (Jiawang)
Co. Ltd Hyflux CEPAration N.V.
Hyflux Capital (Singapore) Pte Ltd
Hyflux Consumer Products Pte Ltd Hyflux NewSpring Sewage Disposal (Rudong)
Hyflux Energy Pte Ltd Co., Ltd
Hyflux NewSpring Sewage Disposal (Wuxi) India
Hyflux Engineering Pte Ltd
Hyflux EPC Pte Ltd Co., Ltd Eflux Oil India Pvt Limited
Hyflux Filtech (Singapore) Pte Ltd Hyflux NewSpring Waste Water Treatment Hyflux Engineering (India) Pvt Ltd
Hyflux Filtration (S) Pte Ltd (Funing) Co., Ltd Hyflux Lifestyle Products (India) Pvt Ltd
Hyflux Innovation Centre Pte Ltd Hyflux NewSpring Waste Water Treatment
Hyflux International Engineering Pte Ltd (Guanyun) Co., Ltd
Hyflux IP Resources Pte Ltd Hyflux NewSpring Waste Water Treatment Malaysia
Hyflux Lifestyle Products (S) Pte Ltd (Leping) Co., Ltd Hyflux (Malaysia) Sdn Bhd
Hyflux Management and Consultancy Pte Ltd Hyflux NewSpring Water Treatment (Linyi)
Hyflux Marmon Development Pte Ltd Co., Ltd
Hyflux Membrane Manufacturing (S) Pte Ltd Hyflux NewSpring Water Treatment MENA
Hyflux SIP Pte Ltd (Minguang) Co., Ltd Algeria
Hyflux Utility (India) Pte Ltd Hyflux NewSpring Waste Water Treatment Almiyah Attilemcania SPA
Hyflux Utility (Indonesia) Pte Ltd (Mingguang) Co., Ltd Hyflux Engineering Algeria EURL
Hyflux Utility WT (HCWT) Pte Ltd Hyflux Salt Industry Technology Development Hyflux Operations & Maintenance Algeria
Hyflux Utility WTP (DZ) Pte Ltd (Tianjin) Co., Ltd EURL
Hyflux Utility WTP (FN) Pte Ltd Hyflux Unitech (Shanghai) Co., Ltd Hyflux-TJSB Algeria SPA
Hyflux Utility WWT (HCHX) Pte Ltd Hyfluxshop (Shanghai) Co., Ltd Tahlyat Myah Magtaa SPA
Hyflux Utility WWT (HCWT) Pte Ltd Kunshan Eco Water Systems Co., Ltd
Hyflux Utility WWT (ZY) Pte Ltd Langfang Hyflux NewSpring Co., Ltd Saudi Arabia
Hyflux Utility WWTP (LP) Pte Ltd Ningxia Hypow Bio-Technology Co., Ltd
Lube Oil Re-refining Company
Hyflux Water Trust Management Pte Ltd Sinolac (Huludao) Biotech Co., Ltd
HyfluxShop Pte Ltd Taizhou Kairunda Used Oil Collection Co., Ltd
Marmon Hyflux Investments Pte Ltd Tianjin Dagang NewSpring Co., Ltd
Vietnam
MenaSpring Utility (S) Pte Ltd Eflux Success Blossom Company Ltd
MenaSpring Utility (Tlemcen) Pte Ltd
NewSpring Utility Pte Ltd Hong Kong
Sinolac (Singapore) Pte Ltd H.J. NewSpring Limited
Cayman Islands
TuaSpring Pte Ltd Hyflux Utility (DF) Limited
Hyflux Utility (HLD) Limited Hyflux Asset Investment (CWF) Ltd
Hyflux Utility (LP) Limited Hyflux Asset Management (CWF) Ltd
China Hyflux Utility (PJ) Limited
Beijing Shouren Water Engineering & Hyflux Utility (TJ) Limited
Technology Co., Ltd Hyflux Utility (TY) Limited
Eflux Resources (Taizhou) Co., Ltd Hyflux Utility (WX) Limited
Galaxy Operation and Management Hyflux Utility (YK) Limited
(Shanghai) Co., Ltd Hyflux Utility (YL) Limited
Hydrochem Engineering (Shanghai) Co., Ltd Hyflux Ut T (YKG) Limited
Hyflux (Tianjin) Sewage Disposal Co., Ltd Hyflux Utility WT (YL) Limited
Hyflux Design Engineering (Shanghai) Co., Ltd Hyflux Utility WTP (GY) Limited
Hyflux Engineering (Shanghai) Co., Ltd Hyflux Utility WWT (BC) Limited
Hyflux Filtech (Shanghai) Co., Ltd Hyflux Utility WWT (GY) Limited
Hyflux Hi-tech Product (Yangzhou) Co., Ltd Hyflux Utility WWT (MG) Limited
Hyflux Investment Management & Consultancy Hyflux Utility WWT (XC) Limited
(Tianjin) Co., Ltd Hyflux Utility WWT (YKG) Limited
Hyflux NewSpring (Changshu) Co., Ltd Hyflux Utility WWT (YL) Limited
Hyflux NewSpring (Dafeng) Co., Ltd Hyflux Utility WWTP (GY) Limited
Hyflux NewSpring (Dafeng North) Co., Ltd
Hyflux NewSpring (Dezhou) Co., Ltd
Hyflux NewSpring (Funing) Co., Ltd British Virgin Islands
Hyflux NewSpring (Guanyun) Co., Ltd Hyflux Advanced Technology Ltd
Hyflux International Ltd
Hyflux Utility Ltd
Hyflux Water Projects Ltd
122
Corporate
Information
Audit Committee Australia and New Zealand ING Bank N.V., Singapore Branch
Lee Joo Hai (Chairman) Banking Group Limited 9 Raffles Place, #19-02 Republic Plaza,
Teo Kiang Kok 1 Raflles Place Singapore 048619
Gay Chee Cheong #32-00 One Raffles Place
Singapore 048616 Land Bank of Taiwan, Singapore Branch
80 Raffles Place
Nominating Committee Bangkok Bank Public Company Limited #34-01 UOB Plaza 1
Gay Chee Cheong (Chairman) 180 Cecil Street Singapore 048624
Olivia Lum Ooi Lin Bangkok Bank Building
Singapore 069546 Mega International Commercial Bank Co.,Ltd.
Teo Kiang Kok (ex-ICBC), Singapore Branch
Remuneration Committee Bank of China Limited, Singapore Branch 80 Raffles Place
4 Battery Road, 15th Floor #23-20 UOB Plaza II
Professor Tan Teck Meng (Chairman)
Bank of China Building Singapore 048624
Gay Chee Cheong
Singapore 049908
Lee Joo Hai Mizuho Corporate Bank, Ltd.,
Christopher Murugasu Bank of Communications Co., Ltd, Singapore Branch
Singapore Branch 168 Robinson Road
Risk Management Committee
50 Raffles Place Capital Tower #13-00
Rajsekar Kuppuswami Mitta (Chairman) #18-01 Singapore Tower Singapore 068912
Christopher Murugasu Singapore 048623
Teo Kiang Kok Natixis, Singapore Branch
Lee Joo Hai Bank of Taiwan, Singapore Branch 50 Raffles Place
80 Raflles Place #41-01 Singapore Land Tower
Management Committee #28-20 UOB Plaza 2 Singapore 048623
Olivia Lum Ooi Lin (Chairman) Singapore 048624
Sam Ong Norddeutsche Landesbank Girozentrale,
Cho Wee Peng BNP Paribas, Singapore Branch Singapore Branch
Winnifred Heap 20 Collyer Quay 6 Shenton Way #16-00
Oon Jin Teik Tung Centre DBS Building Tower 2
Andrew Ngiam Singapore 049319 Singapore 068809
Foo Hee Kiang
Chang Hwa Commercial Bank Ltd, Overseas Chinese Banking Corporation
Peter Wu
Singapore Branch Limited
Company Secretary No. 1 Finlayson Green, #08-00 65 Chulia Street
Lim Poh Fong Singapore 049246 OCBC Centre
Singapore 049513
Registered Office Chinatrust Commercial Bank Co., Ltd,
Singapore Branch Rabobank International, Singapore Branch
Hyflux Building
1 Raffles Place #29-02/03 77 Robinson Road
202 Kallang Bahru
One Raffles Place #09-00 SIA Building
Singapore 339339
Singapore 048616 Singapore 068896
Tel : +65 6214 0777
Fax : +65 6214 1211 CIMB Bank Berhad (ex-Bumiputra- Standard Chartered Bank
Commercial Bank), Singapore Branch 6 Battery Road, Level 23
Registrar
50 Raffles Place Singapore 049909
Boardroom Corporate & Advisory Services #09-01 Singapore Land Tower
Pte Ltd Singapore 048623 State Bank of India
50 Raffles Place 6 Shenton Way
#32-01 Singapore Land Tower Citibank, N.A. #22-08 DBS Building Tower 2
Singapore 048623 3 Temasek Avenue Singapore 068809
#10-01 Centennial Tower
Auditors Singapore 039190 Sumitomo Mitsui Banking Corporation
KPMG LLP 3 Temasek Avenue #06-01
16 Raffles Quay #22-00 Credit Agricole Corporate & Investment Bank, Centennial Tower
Hong Leong Building Singapore Branch Singapore 039190
Singapore 048581 168 Robinson Road
#22-01 Capital Tower The Bank of East Asia Limited,
Partner-in-charge (since 2010): Singapore 068912 Singapore Branch
Lau Kam Yuen 137 Market Street
DBS Bank Ltd BEA Building
Bankers 6 Shenton Way Singapore 048943
Agricultural Bank of China Limited, DBS Building Tower One
Singapore Branch Singapore 068809 The Bank of Tokyo-Mitsubishi UFJ, Ltd
7 Temasek Boulevard 9 Raffles Place #01-01
#30-01/02/03 Suntec Tower 1 Deutsche Bank AG, Singapore Branch Republic Plaza
Singapore 038987 One Raffles Quay Singapore 048619
#16-00 South Tower
Arab Bank Plc Singapore 048583 The Royal Bank of Scotland Plc
80 Raffles Place Level 23, One Raffles Quay
#32-20 UOB Plaza 2 First Commercial Bank, Singapore Branch South Tower
Singapore 048624 77 Robinson Road #01-01 Singapore 048583
Singapore 068896
Arab Banking Corporation (B.S.C) United Overseas Bank Limited
9 Raffles Place Hua Nan Commercial Bank, Ltd., 1 Raffles Place
#60-03 Republic Plaza Singapore Branch OUB Centre
Singapore 048619 80 Robinson Road, #14-03 Singapore 048616
Singapore 068898
123
Notice of Annual General Meeting
NOTICE IS HEREBY GIVEN that the Annual General Meeting of Hyflux Ltd (“Company”) will be held at 202 Kallang Bahru, Hyflux
Building, Singapore 339339 on 27 April 2011 at 2.00p.m. for the following purposes:
AS ORDINARY BUSINESS
Resolution 1
To receive and adopt the Directors’ Report and the Audited Accounts for the year ended 31 December 2010 together with the Auditors’
Report thereon.
Resolution 2
To declare a final dividend of 3.5 Singapore cents per ordinary share (one-tier tax exempt) for the year ended 31 December 2010
(previous year: 3.33 Singapore cents per ordinary share – restated to include one-for-two bonus share issue).
Resolution 3
To re-elect Mr. Rajsekar Kuppuswami Mitta who retires in accordance with Article 89 of the Company’s Articles of Association and
who, being eligible, offers himself for re-election.
Resolution 4
To re-elect Professor Tan Teck Meng who retires in accordance with Article 89 of the Company’s Articles of Association and who,
being eligible, offers himself for re-election.
Resolution 5
To approve the payment of Directors’ fees of S$490,000 for the year ended 31 December 2010 (previous year: S$576,667).
Resolution 6
To re-appoint Messrs KPMG LLP as external auditors and to authorise the Directors to fix their remuneration.
AS SPECIAL BUSINESS
To consider and if thought fit, to pass the following resolutions as Ordinary Resolutions, with or without any modifications:
Resolution 7
That pursuant to Section 161 of the Companies Act, Cap. 50 and Rule 806 of the Listing Manual of the Singapore Exchange Securities
Trading Limited, (the “Listing Manual”) the Directors be authorised and empowered to:
(a) (i) issue shares in the Company (“shares”) whether by way of rights, bonus or otherwise; and/or
(ii) make or grant offers, agreements or options (collectively, “Instruments”) that might or would require shares to be issued,
including but not limited to the creation and issue of (as well as adjustments to) options, warrants, debentures or other
instruments convertible into shares,
at any time and upon such terms and conditions and for such purposes and to such persons as the Directors may in their absolute
discretion deem fit; and
(b) issue shares in pursuance of any Instrument made or granted by the Directors while this Resolution was in force (notwithstanding
the authority conferred by this Resolution may have ceased to be in force), provided that:
(1) the aggregate number of shares (including shares to be issued in pursuance of the Instruments, made or granted pursuant
to this Resolution) and Instruments to be issued pursuant to this Resolution shall not exceed fifty per centum (50%) of the
issued shares in the capital of the Company (as calculated in accordance with sub-paragraph (2) below), of which the
aggregate number of shares and Instruments to be issued other than on a pro rata basis to existing shareholders of the
Company shall not exceed twenty per centum (20%) of the issued shares in the capital of the Company (as calculated in
accordance with sub-paragraph (2) below);
124
Notice of Annual General Meeting (cont’d)
(2) (subject to such calculation as may be prescribed by the Singapore Exchange Securities Trading Limited) for the purpose
of determining the aggregate number of shares and Instruments that may be issued under sub-paragraph (1) above, the
percentage of issued shares and Instruments shall be based on the number of issued shares in the capital of the Company
(excluding treasury shares) at the time of the passing of this Resolution, after adjusting for:
(a) new shares arising from the conversion or exercise of the Instruments or any convertible securities;
(b) new shares arising from the exercising of share options or vesting of share awards outstanding and subsisting at
the time of the passing of this Resolution; and
(c) any subsequent bonus issue consolidation or subdivision of shares.
(3) in exercising the authority conferred by this Resolution, the Company shall comply with the provisions of the Listing Manual
for the time being in force (unless such compliance has been waived by the Singapore Exchange Securities Trading
Limited) and the Articles of Association of the Company; and
(4) unless revoked or varied by the Company in a general meeting, such authority shall continue in force (i) until the conclusion
of the next Annual General Meeting of the Company or the date by which the next Annual General Meeting of the Company
is required by law to be held, whichever is earlier or (ii) in the case of shares to be issued in pursuance of the Instruments,
made or granted pursuant to this Resolution, until the issuance of such shares in accordance with the terms of the
Instruments.
Resolution 8
That:
(1) authority be and is hereby given to the Directors to:
(a) allot and issue preference shares referred to in Articles 8C and 8E of the Articles of Association of the Company in the
capital of the Company whether by way of rights, bonus or otherwise; and/or
(b) make or grant offers, agreements or options that might or would require preference shares referred to in sub-paragraph
(a) above to be issued, not being ordinary shares to which the authority referred to in Resolution 7 above relates,
at any time and upon such terms and conditions and for such purposes and to such persons as the Directors may in their absolute
discretion deem fit, and (notwithstanding the authority conferred by this Resolution may have ceased to be in force) issue
preference shares referred to in sub-paragraph (a) above in pursuance of any offers, agreements or options made or granted by
the Directors while this Resolution was in force; and
(2) (unless revoked or varied by the Company in General Meeting) the authority conferred by this Resolution shall continue in force
until the conclusion of the next Annual General Meeting of the Company or the date by which the next Annual General Meeting
of the Company is required by law to be held, whichever is the earlier.
Resolution 9
That pursuant to Section 161 of the Companies Act, Cap. 50, the Directors be authorised and empowered to offer and grant options
under the Hyflux Employees’ Share Option Scheme (“Scheme”) and (notwithstanding the authority conferred by this Resolution may
have ceased to be in force) to issue from time to time such number of shares in the capital of the Company as may be required to be
issued pursuant to the exercise of options granted by the Company under the Scheme, provided always that the aggregate number of
additional ordinary shares to be allotted and issued pursuant to the Scheme shall not exceed fifteen per centum (15%) of the issued
shares in the capital of the Company from time to time and that such authority shall, unless revoked or varied by the Company in a general
meeting, continue in force until the conclusion of the next Annual General Meeting of the Company or the date by which the next Annual
General Meeting of the Company is required by law to be held, whichever is the earlier.
125
Resolution 10
That the Directors of the Company be and are hereby authorised to make purchases of issued and fully-paid ordinary shares in the
capital of the Company from time to time (whether by way of market purchases or off-market purchases on an equal access scheme)
of up to ten per centum (10%) of the issued ordinary shares in the capital of the Company (ascertained as at the date of the last Annual
General Meeting of the Company or at the date of the EGM, whichever is the higher, but excluding any shares held as treasury shares)
at the price of up to but not exceeding the Maximum Price as defined in the Company’s Circular dated 4 April 2008 and in accordance
with the Guidelines on Share Purchase set out in Appendix 1 of the said Circular and this mandate shall, unless revoked or varied by
the Company in general meeting, continue in force until the conclusion of the next Annual General Meeting of the Company is held or
is required by law to be held, whichever is earlier.
To transact any other ordinary business which may properly be transacted at an Annual General Meeting.
By Order of the Board
Lim Poh Fong

Company Secretary
Singapore, 11 April 2011
126
Explanatory Notes:
(1) A Member entitled to attend and vote at the Annual General Meeting (the “Meeting”) is entitled to appoint a proxy to attend and
vote in his/her stead. A proxy need not be a Member of the Company. The instrument appointing a proxy must be deposited at
the Registered Office of the Company at 202 Kallang Bahru, Hyflux Building, Singapore 339339 not less than 48 hours before
the time appointed for holding the Meeting.
(2) In relation to Resolution 3, Mr. Rajsekar Kuppuswami Mitta, will upon re-election as a Director of the Company, remain as
Chairman of the Risk Management Committee and is considered a non-executive and independent director.
(3) In relation to Resolutions 4, Professor Tan Teck Meng will, upon re-election as a Director of the Company, remain as
Chairman of the Remuneration Committee and a member of the Audit Committee and is considered non-executive and
independent director.
(4) Ordinary Resolution 7 has been proposed for voting annually at the Company’s AGM since 2002. Pursuant to Section 161 of
the Companies Act, Cap. 50 and Rule 806 of the Listing Manual of the Singapore Exchange Securities Trading Limited, and
upon passing of this Ordinary Resolution, the Directors will be empowered from the date of this Meeting until the date of the next
AGM, or the date by which the next AGM is required by law to be held or such authority is varied or revoked by the Company in a
general meeting, whichever is the earliest, to issue shares, make or grant instruments convertible into shares and to issue shares
pursuant to such instruments, up to a number not exceeding, in total, 50% of the issued shares in the capital of the Company,
of which up to 20% may be issued other than on a pro rata basis to existing shareholders. In determining the aggregate number
of shares that may be issued, the percentage of issued shares in the capital of the Company will be calculated based on the
issued shares in the capital of the Company at the time this Ordinary Resolution is passed after adjusting for new shares arising
from the conversion or exercise of the Instruments or any convertible securities, the exercise of share options or the vesting of
share awards outstanding or subsisting at the time when this Ordinary Resolution is passed and any subsequent consolidation
or subdivision of shares.
(5) Ordinary Resolution 8 relates to the renewal of the preference share issue mandate, which was approved by the shareholders on
31 March 2011. Upon passing of this Ordinary Resolution, the Directors will be empowered from the date of this Meeting until the
date of the next AGM, or the date by which the next AGM is required by law to be held or such authority is varied or revoked by
the Company in a general meeting, whichever is the earliest, to issue new preference share shares and/or make or grant offers,
agreements or options that might or would require such preference shares to be issued, provided that the aggregate number
of preference shares does not exceed 20% of the total number of issued shares (excluding treasury shares) in the capital of the
Company at the time of passing of this Ordinary Resolutions and such issue be on such other terms and condition as the Directors
may deem fit.
(6) Ordinary Resolution 9 has been proposed for voting and passed annually since 2002. The Directors believe that an appropriate
remuneration package is required to recruit, retain and reward talents for performance. Pursuant to Section 161 of the Companies
Act, Cap. 50 and upon passing of the Ordinary Resolutions, the Director will be empowered, from the date of this Meeting until the
next AGM, or the date by which the next AGM is required by law to be held or such authority is varied or revoked by the Company
in a general meeting, whichever is the earliest, to issue shares in the Company pursuant to the exercise of options granted or to
be granted under the Scheme up to a number not exceeding in total (for the entire duration of the Scheme) fifteen per centum
(15%) of the issued shares in the capital of the Company from time to time.
(7) Ordinary Resolution 10 relates to the renewal of the share purchase mandate, which was originally approved by the shareholders
on 25 April 2008. Ordinary Resolution 9, if passed, will empower the Directors of the Company from the date of this Meeting
until the next AGM, or the date by which the next AGM is required by law to be held, whichever is the earlier, to purchase ordinary
shares of the Company by way of market purchases or off-market purchases of up to 10% of the total number of issued shares
in the capital of the Company at the Maximum Price as defined in the Company’s Circular dated 4 April 2008. Please refer to
Appendix 1 of this Notice of AGM for details.
127
Notice of Books Closure
NOTICE IS HEREBY GIVEN that the Share Transfer Books and Register of Members of Hyflux Ltd (the “Company”) will be closed at
5.00 p.m. on 5 May 2011 for the preparation of dividend warrants.
Duly completed registrable transfers received by the Company’s Share Registrar, Boardroom Corporate & Advisory Services Pte. Ltd.,
50 Raffles Place, #32-01, Singapore Land Tower, Singapore 048623 up to 5.00 p.m. on 5 May 2011 will be registered to determine
shareholders’ entitlements to the said dividend. Members whose Securities Accounts with The Central Depository (Pte) Limited are
credited with shares at 5.00 p.m. on 5 May 2011 will be entitled to the proposed dividend.
Payment of the dividend, if approved by the members at the Annual General Meeting to be held on 27 April 2011, will be made on 20
May 2011.
128
Appendix 1
SUMMARY SHEET FOR RENEWAL OF SHARES PURCHASE MANDATE
The SGX-ST assumes no responsibility for the correctness of any of the statements made, reports contained or opinions expressed
in this Appendix. If you are in doubt as to the action that you should take, you should consult your stockbroker or other professional
adviser immediately.
(A) SHARES PURCHASED IN THE PREVIOUS TWELVE MONTHS

Pursuant to the Shares Purchase Mandate obtained at the Annual General Meeting on 30 April 2010, the Company had not
bought back any ordinary shares in the capital of the Company (the “Shares”) by way of market or off-market acquisitions.
(B) RENEWAL OF THE SHARES PURCHASE MANDATE

The Ordinary Resolution No. 10 if passed at the Annual General Meeting, will renew the Shares Purchase Mandate approved by
the shareholders of the Company from the date of the Annual General Meeting until the date that the next annual general meeting
of the Company is held or is required by law to be held, whichever is the earlier.
(C) RATIONALE FOR THE SHARES PURCHASE MANDATE

Short-term speculation may at times cause the market price of the Company’s Shares to be depressed below the true value of the
Company and the Group. The proposed Shares Purchase Mandate will provide the Directors with the means to restore investors’
confidence and to protect existing shareholders’ investments in the Company in a depressed share-price situation through
judicious Shares purchases to enhance the earnings per Share and/or the net asset value per Share. The Shares purchases will
enhance the net asset value per Share if the Shares purchases are made at a price below the net asset value per Share.
The proposed Shares Purchase Mandate will also provide the Company with an expedient and cost-effective mechanism to
facilitate the return of surplus cash reserves to the shareholders, as and when the Directors are of the view that this would be in
the best interests of the Company and the shareholders.
The Directors will only make a Shares purchase as and when the circumstances permit and only if the Directors are of the view
that such purchases are in the best interests of the Company and the shareholders. The Directors will decide whether to purchase
Shares only after taking into account, among other things, the market conditions at such time, the Company’s financial condition
and whether such purchases will cause the Company to become insolvent (i.e. the Company is unable to pay its debts as they
become due in the ordinary course of business, or the value of the Company’s assets is less than the value of its liabilities including
contingent liabilities), and whether such purchases represent the most efficient and cost-effective approach to enhance Share
value. Shares purchases will only be made if the Directors believe that such purchases are likely to benefit the Company and
increase economic value for shareholders.
The Directors will ensure that the Shares purchases will not have any effect on the listing of the Company’s securities including
the Shares listed on the Singapore Exchange Securities Trading Limited (the “SGX-ST”). Rule 723 of the Listing Manual of the
SGX-ST requires at least ten per cent (10%) of any class of a company’s listed securities to be held by the public at all times.
The Directors shall safeguard the interests of public shareholders before undertaking any Shares purchases. Before exercising
the Shares Purchase Mandate, the Directors shall at all times take due cognisance of (a) the then shareholding spread of the
Company in respect of the number of Shares held by substantial shareholders and by non-substantial shareholders and (b) the
volume of trading on the SGX-ST in respect of the Shares immediately before the exercise of any Shares purchase.
Currently, 546,491,562 Shares (63.58%) of a total of 859,847,364 Shares issued by the Company are held by 13,345 public
shareholders. The Company is of the view that there is sufficient number of Shares in issue held by public shareholders which
would permit the Company to undertake Shares purchases of up to ten per cent (10%) of its issued ordinary share capital without
affecting the listing status of the Shares on the SGX-ST. The Company will ensure that the Shares purchases will not cause
market illiquidity or affect orderly trade.
(D) FINANCIAL IMPACT OF THE PROPOSED SHARES PURCHASES

1. The purchased Shares shall be cancelled immediately on purchase or acquisition unless held in treasury in accordance
with Section 76H of the Companies Act (Cap. 50) (the “Act”). Section 76H of the Act allows purchased Shares to be:
129
Appendix 1 (cont’d)
(i) held by the Company; or
(ii) dealt with, at any time, in accordance with Section 76K of the Act, as Treasury Shares.
Section 76K of the Act allows the Company to:
(i) sell the Shares (or any of them) for cash;
(ii) transfer the Shares (or any of them) for the purposes of or pursuant to an employees’ share scheme;
(iii) transfer the Shares (or any of them) as consideration for the acquisition of shares in or assets of another company or assets
of a person; or
(iv) cancel the Shares (or any of them).
The aggregate number of Shares held as Treasury Shares shall not at any time exceed ten per cent (10%) of the total number of
Shares at that time. Any Shares in excess of this limit shall be disposed of or cancelled in accordance with Section 76K of the
Act within six (6) months.
Any Shares purchases will:
(i) reduce the amount of the Company’s share capital where the Shares were purchased or acquired out of the capital of
the Company;
(ii) reduce the amount of the Company’s profits where the Shares were purchased or acquired out of the profits of the
Company; or
(iii) reduce the amount of the Company’s share capital and profits proportionately where the Shares were purchased or
acquired out of both the capital and the profits of the Company;
by the total amount of the purchase price paid by the Company for the Shares cancelled.
The Company cannot exercise any right in respect of Treasury Shares. In particular, the Company cannot exercise any right
to attend or vote at meetings and for the purposes of the Act, the Company shall be treated as having no right to vote and the
Treasury Shares will be treated as having no voting rights.
2. The financial effects on the Company and the Group arising from the proposed purchases of the Company’s Shares which
may be made pursuant to the proposed Shares Purchase Mandate will depend on, inter alia, the aggregate number of Shares
purchased and the consideration paid at the relevant time.
3. Based on the existing issued and paid-up share capital of the Company as at 14 March 2011 (the “Latest Practicable Date”),
the proposed purchases by the Company of up to a maximum of ten per cent (10%) of its issued share capital under the Shares
Purchase Mandate will result in the purchase of 85,984,736 Shares.
4. An illustration of the impact of Shares purchases by the Company pursuant to the Shares Purchase Mandate on the Group’s and
the Company’s financial position is set out below based on the following assumptions:
(a) audited accounts of the Group and the Company as at 31 December 2010;
(b) in full exercise of the Shares Purchase Mandate, 85,984,736 Shares were purchased;
(c) the maximum price for the market purchases is $2.1525 per Share, which is five per cent (5%) above the average closing
prices of the Shares over the last five market days preceding the Latest Practicable Date on which the transactions in
Shares were recorded on the SGX-ST; and
(d) the maximum amount of funds required for the Shares purchases in the aggregate is $185,082,145.
130
Market Purchases and Off-Market Purchases and held as Treasury Shares or cancelled
Group Group Company Company

before Shares after Shares before Shares after Shares
purchase purchase purchase purchase
($’000) ($’000) ($’000) ($’000)
As at 31 December 2010
Shareholders’ funds 502,501 317,419 258,856 73,774
Net assets value 514,507 329,425 258,856 73,774
Current assets 693,694 508,612 676,466 491,384
Current liabilities 315,949 315,949 128,910 128,910
Cash and cash equivalents 222,286 37,204 65,656 (119,427)
Number of shares (‘000) 857,931 771,946 857,931 771,946
Financial Ratios
Net assets value per share (cents) 58.57 41.12 30.17 9.56
Earnings per share (cents) 10.52 11.71 2.42 2.70
Gearing (%) 0.73 1.71 1.66 8.34
Current ratio 2.20 1.61 5.25 3.81
5. Shareholders should note that the financial effects set out above are based on the audited financial accounts of the Group and the
Company for the financial year ended 31 December 2010 and are for illustration only. The results of the Group and the Company
for the financial year ended 31 December 2010 may not be representative of future performance.
6. The Company intends to use its internal sources of funds to finance its purchases of the Shares. The Company does not
intend to obtain or incur any borrowings to finance its purchases of the Shares. The Directors do not propose to exercise
the Shares Purchase Mandate in a manner and to such extent that the working capital requirements of the Group would be
materially affected.
7. The Company will take into account both financial and non-financial factors, among other things, the market conditions at such
time, the Company’s financial condition, the performance of the Shares and whether such Shares purchases would represent
the most efficient and cost-effective approach to enhance the Share value. Shares purchases will only be made if the Board
believes that such purchases are likely to benefit the Company and increase economic value for shareholders.
(E) CONSEQUENCES OF SHARES PURCHASES UNDER THE SINGAPORE CODE ON TAKE-OVERS AND MERGERS
1. In accordance with The Singapore Code on Take-overs and Mergers (the “Take-over Code”), a person will be required to make
a general offer for a public company if:
(a) he acquires 30 per cent (30%) or more of the voting rights of the company; or
(b) he already holds between 30 per cent (30%) and 50 per cent (50%) of the voting rights of the company, and he increases
his voting rights in the company by more than one per cent (1%) in any six-month period.
131
2. As at the Latest Practicable Date and before the proposed Shares Purchase Mandate, the substantial shareholders’ and
Directors’ interests are as follows:
Direct Interest Deemed Interest Total Interest

Number Number Number
Directors of Shares % of Shares % of Shares %
Olivia Lum Ooi Lin (1) 252,351,211 29.35 15,000,000 1.74 267,351,211 31.09
Teo Kiang Kok (2) NIL NA 300,000 0.03 300,000 0.03
Lee Joo Hai 300,000 0.03 NIL NA 300,000 0.03
Gay Chee Cheong 940,000 0.11 NIL NA 940,000 0.11
Christopher Murugasu (3) 729,843 0.08 180,000 0.02 909,843 0.10
Professor Tan Teck Meng (4) NIL NA 91,500 0.01 91,500 0.01
Rajsekar Kuppuswami Mitta NIL NA NIL NA NIL NA
NOTES:
(1) Olivia Lum Ooi Lin is deemed interested in the Shares held by Citibank Nominees Singapore Pte Ltd
(2) Teo Kiang Kok is deemed interested in the Shares held by Citibank Nominees Singapore Pte Ltd
(3) Christopher Murugasu is deemed interested in the Shares held by his spouse, Bernadette Oei Lian Hua
(4) Professor Tan Teck Meng is deemed interested in the Shares held by his spouse, Tan Kiang Nee
In the event the Company undertakes Shares purchases of up to ten per cent (10%) of the issued share capital of the Company
as permitted by the Shares Purchase Mandate, the shareholdings and voting rights of Ms Olivia Lum Ooi Lin may be increased
from 31.09 % to 34.55%. Ms Olivia Lum Ooi Lin’s shareholdings and voting rights may thus be increased by more than one per
cent (1%) within a six-month period. Accordingly, Ms Olivia Lum Ooi Lin may be required to make a general offer to the other
shareholders under Rule 14.1(b) of the Take-over Code.
3. The Securities Industry Council has granted approval in-principle to exempt Ms Olivia Lum Ooi Lin from the requirement to make
a general offer under Rule 14.1(b) of the Take-over Code after any Shares purchase subject to the following conditions:
(a) the Circular contains advice to the effect that by voting for the Shares Purchase Mandate, shareholders are waiving their
rights to a general offer at the required price from Ms Olivia Lum Ooi Lin and parties acting in concert with her, if any;
the names of Ms Olivia Lum Ooi Lin and her concert parties, if any, and the voting rights of such persons at the time of
resolution and after the proposed Shares Purchases are disclosed in the Circular;
(b) the resolution to approve the Shares Purchase Mandate is approved by a majority of those shareholders present
and voting at the meeting on a poll who could not become obliged to make an offer for the Company as a result of the
Shares Purchase;
(c) Ms Olivia Lum Ooi Lin and her concert parties, if any, do not vote for and/or recommend shareholders to vote in favour of the
resolution to approve the Shares Purchase Mandate; and
(d) Ms Olivia Lum Ooi Lin and her concert parties, if any, have not acquired and will not acquire any Shares between
the date on which they know that the announcement of the approval of the Shares Purchase Mandate is imminent and
the earlier of:
(i) the date on which the Shares Purchase Mandate expires; and
(ii) the date the Company announces that it has bought back such number of Shares as authorised under the Shares
Purchase Mandate or the date the Company decides to cease buying back its Shares, as the case may be,
132
if such acquisitions, taken together with shares bought by the Company under the Shares Purchase Mandate, would cause their
aggregate voting rights in the Company to increase by more than 1% in the any six–month period.
If the Company ceases to buy back its Shares and the increase in the voting rights held by Ms Olivia Lum Ooi Lin and her concert
parties, if any, as a result of the Shares Purchase at the time of such cessation is less than 1% in any six-month period, Ms Olivia
Lum Ooi Lin and her concert parties, if any, will be allowed to acquire Shares. However, any increase in Ms Olivia Lum Ooi Lin
and her concert parties’ percentage of voting rights as a result of the Shares Purchase will be taken into account together with
any Shares acquired by Ms Olivia Lum Ooi Lin and her concert parties, if any, (by whatever means) in determining whether
Ms Olivia Lum Ooi Lin and her concert parties, if any, have increased their aggregate voting rights in the Company by more than
1% in any six-month period.
The Directors hereby confirm that the substantial shareholders are not acting in concert with any other person to assist any
shareholder (or his concert party or parties) to obtain or consolidate control of the Company and that the proposed Shares
Purchases are not for any such purpose.
It should be noted that approving the Shares Purchase Mandate will constitute a waiver by the shareholders in respect
of their right to a general offer by the substantial shareholders at the Required Price.
(F) MISCELLANEOUS
1. Any Shares purchases undertaken by the Company shall be at a price of up to but not exceeding the Maximum Price. The
Maximum Price is a sum which shall not exceed the sum constituting five per cent (5%) above the average closing price of the
Shares over the period of five (5) trading days in which transactions in the Shares on the SGX-ST were recorded, in the case of
a Market Purchase, before the day on which such purchase is made, and, in the case of an Off-Market Purchase, immediately
preceding the date of offer by the Company, as the case may be, and adjusted for any corporate action that occurs after the
relevant five (5) day period.
2. In making Share purchases, the Company will comply with the requirements of the SGX-ST Listing Manual, in particular, Rule
886 with respect to notification to the SGX-ST of any Shares purchases. Rule 886 is reproduced below:
“(1) An issuer must notify the Exchange of any share buy-back as follows:
(a) In the case of a market acquisition, by 9.00 am on the market day following the day on which it purchased shares,
(b) In the case of an off market acquisition under an equal access scheme, by 9.00 am on the second market day after
the close of acceptances of the offer.
(2) Notification must be in the form of Appendix 8.3.1 (or 8.3.2 for an issuer with a dual listing on another stock exchange).”
3. Shares purchases will be made in accordance with the “Guidelines on Shares Purchases” as set out in Appendix 2 of the
Company’s Circular to shareholders dated 4 April 2008, a copy of which is annexed. All information required under the Act
relating to the Shares Purchase Mandate is contained in the said Guidelines.
4. The SGX-ST Listing Manual does not expressly prohibit any purchase of shares by a listed company during any particular time
or times. However, as a listed company would be considered an “insider” in relation to any proposed purchase or acquisition of
its shares, the Company will undertake not to purchase or acquire Shares pursuant to the proposed Share Purchase Mandate at
any time after a price sensitive development has occurred or has been the subject of a decision until the price sensitive information
has been publicly announced. In particular, the Company will not purchase or acquire any Shares during the period commencing
one month immediately preceding the announcement of the Company’s full-year and half year results and the period of two weeks
immediately preceding the announcement of its quarterly results.
(G) DIRECTORS’ RESPONSIBILITY STATEMENT

The Directors of the Company collectively and individually accept full responsibility for the accuracy of the information given herein
and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief, the facts stated in this Appendix
are accurate and that there are no material facts the omission of which would make any statement in this Appendix misleading.
133
(H) SHAREHOLDERS WHO WILL ABSTAIN FROM VOTING

Ms Olivia Lum Ooi Lin and her concert parties will abstain from voting at the Annual General Meeting in respect of Ordinary
Resolution 10 relating to the Shares Purchase Mandate.
(I) DIRECTORS’ RECOMMENDATION

The Directors of the Company, other than Ms Olivia Lum Ooi Lin who has abstained from making any recommendation, are of
the opinion that the renewal of the proposed Shares Purchase Mandate is in the best interests of the Company. Accordingly, the
Directors of the Company recommend that shareholders vote in favour of Ordinary Resolution 10.
(J) TAXATION
Shareholders who are in doubt as to their respective tax positions or any tax implications, or who may be subject to tax in a
jurisdiction outside Singapore, should consult their own professional tax advisers.
(K) DOCUMENTS FOR INSPECTION

Copies of the following documents may be inspected at the registered office of the Company at 202 Kallang Bahru, Hyflux
Building, Singapore 339339 during normal business hours up to and including the date of the Annual General Meeting:
(a) the Memorandum and Articles of Association of the Company; and
(b) the audited financial statements of the Company for the financial year ended 31 December 2010.
134
Appendix 2
GUIDELINES ON SHARES PURCHASES
1. SHAREHOLDERS’ APPROVAL
(a) Purchases of Shares by the Company must be approved in advance by the Shareholders at a general meeting of the
Company, by way of a general mandate.
(b) A general mandate authorising the purchase of Shares by the Company representing up to ten per cent (10%) of the
issued ordinary shares in the capital of the Company (excluding any Shares held as Treasury Shares) will expire on the
earlier of:
(i) the conclusion of the next annual general meeting of the Company;
(ii) the expiration of the period within which the next annual general meeting of the Company is required by law to be
held; or
(iii) the time when such mandate is revoked or varied by an ordinary resolution of the Shareholders of the Company in
general meeting.
(c) The authority conferred on the Directors by the Shares Purchase Mandate to purchase Shares shall be renewed at the
next annual general meeting of the Company.
(d) When seeking Shareholders’ approval for the renewal of the Shares Purchase Mandate, the Company shall disclose
details pertaining to the purchases of Shares made during the previous 12 months, including the total number of Shares
purchased, the purchase price per Share or the highest and lowest price for such purchases of Shares, where relevant,
and the total consideration paid for such purchases.
2. MODE OF PURCHASE
Shares Purchases can be effected by the Company in either one of the following two ways or both:
(a) by way of market purchases of Shares on the Official List of SGX-ST, which means a purchase transacted through
the ready market; or
(b) by way of off-market acquisitions on an equal access scheme in accordance with Section 76C of the Act.
3. FUNDING OF SHARES PURCHASES

(a) In purchasing the Shares, the Company may only apply funds legally permitted for such purchase in accordance with
its Articles of Association, and the relevant laws and regulations enacted or prescribed by the relevant competent authorities
in Singapore.
(b) Any purchase by the Company may be made out of capital or profits that are available for distribution as dividends, so long
as the Company is solvent (as defined by Section 76F(4) of the Act) .
(c) The Company may not purchase its Shares on the Official List of SGX-ST for a consideration other than cash or for settlement
otherwise than in accordance with the trading rules of SGX-ST.
4. TRADING RESTRICTIONS
The number of Shares which can be purchased pursuant to the Shares Purchase Mandate is such number of Shares which
represents up to a maximum of ten per cent (10%) of the issued ordinary shares in the capital of the Company (excluding Treasury
Shares) as at date of the last annual general meeting of the Company.
5. PRICE RESTRICTIONS
Any Shares Purchase undertaken by the Company shall be at the price of up to but not exceeding the Maximum Price.
“Maximum Price” means the maximum price at which the Shares can be purchased pursuant to the Shares Purchase Mandate,
which shall not exceed the sum constituting five per cent (5%) above the average closing price of the Shares over the period of
135
five (5) trading days in which transactions in the Shares on SGX-ST were recorded, in the case of a Market Purchase, before
the day on which such purchase is made, and, in the case of an Off-Market Purchase, immediately preceding the date of offer
by the Company, as the case may be, and adjusted for any corporate action that occurs after the relevant five (5) day period.
6. OFF-MARKET PURCHASES
(a) For purchases of Shares made by way of an Off-Market Purchase, the Company shall issue an offer document to all
Shareholders. The offer document shall contain, inter alia, the following information:
(i) the terms and conditions of the offer;
(ii) the period and procedures for acceptances;
(iii) the reasons for the proposed Shares Purchase;
(iv) the consequences, if any, of Shares purchased by the Company that will arise under the Singapore Code on
Take-overs and Mergers or any other applicable take-over rules;
(v) whether the purchase of Shares, if made, would have any effect on the listing of the Company’s securities on the
Official List of SGX-ST; and
(vi) details of any purchase of Shares made by the Company in the previous 12 months whether through Market
Purchases or Off-Market Purchases, including the total number of Shares purchased, the purchase price per Share
or the highest and lowest prices paid for such purchases of Shares, where relevant, and the total consideration
paid for such purchases.
(b) All Offeree Shareholders shall be given a reasonable opportunity to accept any offer made by the Company to purchase
their Shares under the Shares Purchase Mandate.
(c) The Company may offer to purchase Shares from time to time under the Shares Purchase Mandate subject to the requirement
that the terms of any offer to purchase. Shares by the Company shall be pari passu in respect of all Offeree Shareholders
save under the following circumstances:
(i) where there are differences in consideration attributable to the fact that an offer relates to Shares with different
dividend entitlements;
(ii) where there are differences in consideration attributable to the fact that an offer relates to Shares with different
amounts remaining unpaid; and
(iii) where there are differences in an offer introduced solely to ensure that every Shareholder is left with a whole number
of Shares in board lots of 1,000 Shares after the Shares Purchases, in the event there are Offeree Shareholders
holding odd numbers of Shares.
7. STATUS OF PURCHASED SHARES

The purchased Shares shall be cancelled immediately on purchase or acquisition unless held in treasury in accordance with
Section 76H of the Act. Section 76H of the Act allows purchased Shares to be:
(i) held by the Company; or
(ii) dealt with, at any time, in accordance with Section 76K of the Act, as Treasury Shares.
Section 76K of the Act allows the Company to:
(i) sell the Shares (or any of them) for cash;
(ii) transfer the Shares (or any of them) for the purposes of or pursuant to an employees’ share scheme;
136
(iii) transfer the Shares (or any of them) as consideration for the acquisition of shares in or assets of another company or assets
of a person; or
(iv) cancel the Shares (or any of them).
The aggregate number of Shares held as Treasury Shares shall not at any time exceed ten per cent (10%) of the total number of
Shares at that time. Any Shares in excess of this limit shall be disposed of or cancelled in accordance with Section 76K of the
Act within six (6) months.
Any Shares Purchase will:
(i) reduce the amount of the issued shares in the capital of the Company where the Shares were purchased or acquired out
of the capital of the Company;
(ii) reduce the amount of the Company’s profits where the Shares were purchased or acquired out of the profits of the
Company; or
(iii) reduce the amount of the Company’s share capital and profits proportionately where the Shares were purchased or
acquired out of both the capital and the profits of the Company;
by the total amount of the purchase price paid by the Company for the Shares cancelled.
The Company cannot exercise any right in respect of Treasury Shares. In particular, the Company cannot exercise any right
to attend or vote at meetings and for the purposes of the Act, the Company shall be treated as having no right to vote and the
Treasury Shares will be treated as having no voting rights.
8. NOTIFICATION TO ACCOUNTING AND CORPORATE REGULATORY AUTHORITY (“ACRA”)

(a) Within thirty (30) days of the passing of a Shareholders’ resolution to approve any purchase of Shares, the Company shall
lodge a copy of such resolution with ACRA.
(b) The Company shall notify ACRA within thirty (30) days of a purchase of Shares. Such notification shall include details of the
date of the purchase, the total number and nominal value of Shares purchased by the Company, the issued shares in the
capital of the Company as at the date of the Shareholders’ resolution approving the purchase, the Company’s issued shares
in the capital after the purchase and the amount of consideration paid by the Company for the purchase.
9. NOTIFICATION TO SGX-ST
(a) For purchases of Shares made by way of an Off-Market Purchase, the Company shall notify SGX-ST in respect of any
acquisition or purchase of Shares in the relevant form prescribed by SGX-ST from time to time, not later than 9.00 a.m.
on the second trading day after the close of acceptances of an offer, or within such time period that may be prescribed by
SGX-ST from time to time.
(b) For purchases of Shares made by way of a Market Purchase, the Company shall notify SGX-ST in respect of any
acquisition or purchase of Shares in the relevant form prescribed by SGX-ST from time to time, not later than 9.00 a.m.
on the trading day following the date of market acquisition by the Company, or within such time period that may be prescribed
by SGX-ST from time to time.
10. SUSPENSION OF PURCHASE

(a) The Company may not undertake any Shares Purchase prior to the announcement of any price-sensitive information by the
Company, until such time as the price sensitive information has been publicly announced or disseminated in accordance
with the requirements of the Listing Manual.
(b) The Company may not effect any repurchases of Shares on SGX-ST during the period commencing two weeks before
the announcement of the Company’s financial statements for each of the first three quarters of its financial year, or one month
before half year or financial year, as the case may be, and ending on the date of announcement of the relevant results.
137
HYFLUX LTD
IMPORTANT:
Company Registration No. 200002722Z 1. For investors who have used their CPF monies to buy Hyflux Ltd’s
(Incorporated in the Republic of Singapore with limited liability) shares, this Report is forwarded to them at the request of the CPF
Approved Nominees and is sent solely FOR INFORMATION ONLY.
2. This Proxy Form is not valid for use by CPF investors and shall be
ineffective for all intents and purposes if used or purported to be used
by them.
PROXY FORM 3. CPF investors who wish to attend the Meeting as an observer must
submit their requests through their CPF Approved Nominees within
(Please see notes overleaf before completing this Form) the time frame specified. If they also wish to vote, they must submit
their voting instructions to the CPF Approved Nominees within the
time frame specified to enable them to vote on their behalf.
I/We (Name & NRIC No.)
of (Address)
being a member/members of Hyflux Ltd (“Company”), hereby appoint:
Name NRIC/Passport No. Proportion of Shareholdings

No. of Shares %
Address
and/or (delete as appropriate)
Name NRIC/Passport No. Proportion of Shareholdings

No. of Shares %
Address
or failing the person, or either or both of the persons, referred to above, the Chairman of the Meeting as my/our proxy/proxies to vote
for me/us on my/our behalf at the Annual General Meeting (the “Meeting”) of the Company to be held on 27 April 2011 at 2.00pm
and at any adjournment thereof. I/We direct my/our proxy/proxies to vote for or against the Resolutions proposed at the Meeting as
indicated hereunder. If no specific direction as to voting is given or in the event of any other matter arising at the Meeting and at any
adjournment thereof, the proxy/proxies will vote or abstain from voting at his/her discretion. The authority herein includes the right to
demand or to join in demanding a poll and to vote on a poll.
To be used on a To be used in the

show of hands event of a poll
No. Resolutions For* Against* No. of No. of
Votes For** Votes Against**
Ordinary Business
1 Adoption of Directors’ Report and Audited Accounts
2 Declaration of Dividends
3 Re-election of Mr Rajsekar Kuppuswami Mitta
as Director
4 Re-election of Professor Tan Teck Meng as Director
5 Approval of Directors’ fees
6 Re-appointment of Auditors
Special Business
7 Authority to issue shares up to 50 per centum (50%)
of the issued shares in the capital of the Company
8 Renewal of Preference Share Mandate
9 Authority to issue shares under Hyflux Employees’
Share Option Scheme
10 Renewal of Share Purchase Mandate
* Please indicate your vote “For” or “Against”, with an “X” within the box provided.
** If you wish to exercise all your votes “For” or “Against”, please indicate with an “X” within the box provided. Alternatively, please
indicate the number of votes as appropriate.
Dated this day of 2011
Total number of
Signature of Shareholder(s), Common Seal of Corporate Shareholder Shares held
Notes:
1. Please insert the total number of shares held by you. If you have Shares entered against your name in the Depository Register (as
defined in Section 130A of the Companies Act, Chapter 50 of Singapore), you should insert that number of Shares. If you only
have Shares registered in your name in the Register of Members, you should insert that number if Shares. However, if you have
Shares entered against your name in the Depository Register and Shares registered in your name in the Register of Members,
you should insert the aggregate number of Shares entered against your name in the Depository Register and registered in your
name in the Register of Members. If no number is inserted, the instrument appointing a proxy or proxies shall be deemed to relate
to all the Shares held by you.
2. A Shareholder of the Company entitled to attend and vote at a meeting of the Company is entitled to appoint one or two proxies
to attend and vote instead of him. A proxy need not to be a Shareholder of the Company. Where a Shareholder appoints two
proxies, the proportion of the shareholding concerned to be represented by each proxy shall be specified in the proxy form. If
no percentage is specified, the first named proxy shall be deemed to represent 100 percent of the shareholding and the second
named proxy shall be deemed to be an alternate to the first named proxy.
3. The instrument appointing a proxy or proxies must be deposited at the registered office of the Company at 202 Kallang Bahru,
Singapore 339339 not less than 48 hours before the time appointed for the Meeting.
fold along this line (1)
Affix
Postage
Stamp
The Company Secretary

HYFLUX LTD
Hyflux Building
202 Kallang Bahru
Singapore 339339
fold along this line (2)
4. The instrument appointing a proxy or proxies must be under the hand of the appointor or of his attorney duly authorised in writing.
Where the instrument appointing a proxy or proxies is executed by a corporation, it must be executed either under its seal or under
the hand of an officer or attorney duly authorised. Where an instrument appointing a proxy is signed on behalf of the appointor by
an attorney, the letter or power of attorney or a duly certified copy thereof must (unless previously registered with the Company)
be lodged with the instrument of proxy, failing which, the instrument may be treated as unvalid.
5. A corporation which is a Shareholder may authorise, by resolution of its directors or other governing body, such person as it thinks
fit to act as its representative at the Annual General Meeting, in accordance with Section 179 of the Companies Act, Chapter 50
of Singapore.
6. The Company shall be entitled to reject the instrument appointing a proxy or proxies if it is incomplete, improperly completed or
illegible or where the true intentions of the appointor are not ascertainable from the instructions of the appointor specified in the
instrument appointing a proxy or proxies. In addition, in the case of Shareholders whose Shares are entered in the Depository
Register, the Company may reject any instrument appointing a proxy or proxies lodged if such Shareholders are not shown to
have Shares entered against their name in the Depository Register 48 hours before the time appointed for the holding of the
Annual General Meeting, as certified by The Central Depository (Pte) Limited to the Company.
7. Completion and return of this instrument appointing a proxy shall preclude a member from attending and voting at the Meeting. Any
appointment of a proxy or proxies shall be deemed to be revoked if a member attends the meeting in person, and in such an event,
the Company reserves the right to refuse to admit any person or persons appointed under the instrument of proxy to the Meeting.
Hyflux Ltd
202 Kallang Bahru
Hyflux Building
Singapore 339339
www.hyflux.com
Company reg. no.: 200002722Z

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annual report 2010

Contents Key Financial Figures 01 Board of Directors 14

REVENUE PROFIT BEFORE TAX

PROFIT ATTRIBUTABLE EARNINGS PER SHARE

NET ASSET VALUE PER SHARE CASH POSITION

EBITDA & PBT

KEY FINANCIAL DATA

S$'000 2010 2009 2008 2007 2006

Revenue 569,737 524,814 554,224 192,786 142,379

Shareholders' Equity 502,501 365,244 297,547 239,772 199,601

Return on Revenue (%) 15.5 14.3 10.7 17.1 10.9

GROUP REVENUE BY COUNTRY & REGION

0 50 100 150 200 250 300 350 400

Singapore and Others China MENA

2009 75.0 2009 46.10

2008 59.0 2008 37.80

2007 32.9 2007 30.50

2006 15.5 2006 25.70

0 20 40 60 80 100 0 10.00 20.00 30.00 40.00 50.00 60.00 70.00

EARNINGS PER SHARE (2) DIVIDEND PER SHARE (2)

2009 9.51 2009 3.33

2008 7.50 2008 2.29

2007 4.21 2007 1.26

2006 2.00 2006 0.90

0.0 5.0 10.0 15.0 20.0 25.0

February • Hyflux was awarded a concession by the People’s Government of Zunyi

January • Hyflux signed three concession agreements with the People’s

2010 December • Galaxy NewSpring successfully completed its compulsory acquisition

November • Hyflux secured a US$100 million engineering, procurement and

October • Hyflux was conferred Water Technology Company of the Year

June • Hyflux launched its new generation of ultrafiltration membranes, the

March • Hyflux was awarded a S$43.8 million contract by TP Utilities,

February • Hyflux secured a S$35.8 million contract from PUB to design,

1000 membrane products

China's Largest SWRO Desalination Plant

Singapore's First SWRO Desalination Plant

Singapore's First NEWater Plant

Singapore's Largest Membrane Bioreactor Plant

FY2010 has been another record year for Hyflux as we registered

Hyflux’s performance was the result of effective cost-management

To reward shareholders, the Board of Directors has recommended

Over that 10-year period, we have experienced fast-track growth.

In 2001, we had only two main markets – Singapore and China

Olivia Lum Ooi Lin

Ms Lum started corporate life as a chemist with Glaxo

Managing the Group for more than 20 years now,

A former Nominated Member of Singapore Parliament,

Among the many accolades Ms Lum has received for

Ms Lum holds an Honours degree in Science from the

Mr Gay graduated from the Royal Military Academy

Christopher Murugasu Mr Mitta is a seasoned negotiator and deal maker with

Professor Tan has been a Non-Executive Independent

01 Olivia Lum Ooi Lin 04 Winnifred Heap 07 Foo Hee Kiang

(For year ended 31 December)

Revenue 569.7 524.8 9

Profit Before Tax 100.5 83.0 21

Profit Attributable to Shareholders 88.5 75.0 18

Earnings per Share (cents) (1) 10.52 9.51 11

Group Revenue by Segment

OVERVIEW Revenue from the industrial sector increased by 1%

Moving forward, the fundamentals and outlook of the

Group Revenue by Country