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THIS DOCUMENT IS IMPORTANT.

IF YOU ARE IN ANY DOUBT AS TO


THE ACTION YOU SHOULD TAKE, YOU SHOULD CONSULT YOUR
LEGAL, FINANCIAL, TAX OR OTHER PROFESSIONAL ADVISER(S).
United Overseas Bank Limited (the Sponsor) has made an application to the Singapore
Exchange Securities Trading Limited (the SGX-ST) for permission to deal in and for quotation
of, all the ordinary shares (the Shares) in the capital of AsiaPhos Limited (the Company)
already issued (including the Vendor Shares (as defned herein)), and the New Shares (as
defned herein) which are the subject of this Invitation (as defned herein) on Catalist (as defned
herein) and the Shares which may be issued under the AsiaPhos Performance Share Plan to
be listed for quotation on Catalist. Acceptance of applications will be conditional upon, inter
alia, the issue of the New Shares and permission being granted by the SGX-ST for the listing
and quotation of all our existing issued Shares (including the Vendor Shares), the New Shares
and the Shares which may be issued under the AsiaPhos Performance Share Plan on Catalist.
Monies paid in respect of any application accepted will be returned to you at your own risk,
without interest or any share of revenue or other beneft arising therefrom, and you will not have
any claim against our Company, the Sponsor and Underwriter, the Placement Agent or the
Vendors (each as defned herein) if the admission and listing do not proceed. The dealing in
and quotation of our Shares will be in Singapore dollars.
Companies listed on Catalist may carry higher investment risk when compared with larger or
more established companies listed on the Mainboard of the SGX-ST. In particular, companies
may list on Catalist without a track record of proftability and there is no assurance that there
will be a liquid market in the shares or units of shares traded on Catalist. You should be aware
of the risks of investing in such companies and should make the decision to invest only after
careful consideration and, if appropriate, consultation with your professional adviser(s).
Neither the Monetary Authority of Singapore (the Authority) nor the SGX-ST has examined or
approved the contents of this Offer Document. Neither the Authority nor the SGX-ST assumes
any responsibility for the contents of this Offer Document, including the correctness of any of
the statements or opinions made or reports contained in this Offer Document. The SGX-ST
does not normally review the application for admission but relies on the Sponsor confrming
that the Company is suitable to be listed and complies with the Catalist Rules (as defned
herein). Neither the Authority nor the SGX-ST has in any way considered the merits of the
Shares or units of Shares being offered for investment. The registration of this Offer Document
by the SGX-ST does not imply that the SFA (as defned herein), or any other legal or regulatory
requirements or requirements under the SGX-STs listing rules, have been complied with.
This offer is made in or accompanied by this Offer Document that has been registered by the
SGX-ST acting as agent on behalf of the Authority. We have not lodged or registered this Offer
Document in any other jurisdiction.
In the event the Placement Agent receives valid applications and payment for less than
85% of the Placement Shares by 12.00 noon on 2 October 2013 (or such later date and
time as may be decided by the Placement Agent), the Placement Agent shall have the
right to terminate the Placement Agreement (by notice in writing to the Company and
the Vendors). The Management and Underwriting Agreement is conditional upon the
Placement Agreement not being terminated or rescinded. In the event of termination
of the Placement Agreement, the Management and Underwriting Agreement will
also terminate. In the event the Management and Underwriting Agreement and/ or
the Placement Agreement are terminated, our Company and the Vendors reserves
the right, in our and their absolute discretion, to cancel the Invitation, upon which all
application monies will be returned to subscribers and/ or purchasers without interest
or any share of revenue or other beneft arising there from and at their own risk, and
subscribers and/or purchasers will not have any claim against our Company, the
Vendors, the Sponsor and Underwriter or the Placement Agent.
The investment in our Shares involves risks which are described in the section entitled
Risk Factors of this Offer Document. After the expiration of six (6) months from
the date of registration of this Offer Document by the SGX-ST acting as agent on
behalf of the Authority, no person shall make an offer of securities, or allot, issue or
sell or allocate any securities, on the basis of this Offer Document, and no offcer or
equivalent person or promoter of the Company will authorise or permit the offer of any
securities or the allotment, issue or sale or allocation of any securities, on the basis of
this Offer Document.
Sponsor and Underwriter

UNITED OVERSEAS BANK LIMITED
(Company Registration No. 193500026Z)
(Incorporated in the Republic of Singapore)
A Singapore-headquartered mineral resources company focused on
exploring and mining phosphate in the PRC
ASIAPhOS LIMITeD
(Company Registration Number: 201200335G)
(Incorporated in the Republic of Singapore on 3 January 2012)
Placement Agent

ASIASONS WFG CAPITAL PTE. LTD.
(Company Registration No. 200002789M)
(Incorporated in the Republic of Singapore)
Invitation in respect of 122,000,000 Invitation Shares
comprising 97,600,000 New Shares and 24,400,000 Vendor
Shares as follows:
(1) 2,000,000 Offer Shares at S$0.25 for each Offer Share
by way of public offer; and
(2) 120,000,000 Placement Shares at S$0.25 for each
Placement Share by way of placement,
payable in full on application.
OFFER DOCUMENT DATED 25 SEPTEMBER 2013
(Registered by the singapore exchange securities trading Limited acting as agent on behalf of the monetary Authority of singapore on 25 september 2013)
A Singapore-headquartered mineral resources company focused on
exploring and mining phosphate in the PRC
ASIAPhOS LIMITeD
(Company Registration Number: 201200335G)
(Incorporated in the Republic of Singapore on 3 January 2012)
This overview section is qualifed in its entirety by, and should be read in conjunction with, the full text of this Offer Document. Meanings of
capitalised terms used may be found in the sections entitled Defnitions and Glossary of Technical Terms of this Offer Document.
CORPORATE PROFILE
We are the frst mineral resources company to be listed on
the SGX-ST which is solely focused on exploring and mining
phosphate in the PRC with the ability to manufacture and produce
phosphate-based chemical products.
To make full use of this valuable and non-renewable natural
resource, we are adopting a vertically-integrated strategy which
will comprise mining of our phosphate rocks and the production of
phosphate-based chemical products.
Led by a management team with more than 10 years of relevant
experience in their respective felds, we currently own exploration
and mining rights to our two mines and have recently completed
construction of a P
4
plant. As part of our future plans, we intend to
construct more processing facilities.
Although our operations were disrupted by the Wenchuan
Earthquake in 2008, we have since embarked on a rebuilding
programme.

Phosphate
Rocks
P4
Thermal
Phosphoric
Acid
STPP
(food/non food
grade)
SHMP
(food/non food
grade)
OUR VERTICALLY-INTEGRATED STRATEGY
Upon completion of our Rebuilding Programme, our vertically-integrated business model will involve the following:
Mining OPeRATiOns
Mining
Rights to explore and mine phosphate from our two mines located in Qing Ping Town,
Mianzhu City, Sichuan Province, the PRC
As at 31 December 2012, 22.2 million tonnes of measured and indicated phosphorite
resources; 18.8 million tonnes of inferred phosphorite resources*
Current mining licence periods are up to 2015 and 2020 (licences are renewable)
* WGM Technical Report dated 28 February 2013 prepared in accordance with NI 43-101 relating to the mineral resources.
CheMiCAl PROduCTiOn OPeRATiOns
P4 Processing
Processing of phosphate rocks to P4
Trial production of P4 commenced in FY2013
Plant is designed to withstand earthquakes of up to 7.0 on the Richter magnitude scale
Acid Manufacturing
Manufacturing into thermal phosphoric acid from P4
Planned construction of new thermal phosphoric acid plant with designed capacity of
30,000 tonnes per year
SHMP and STPP Manufacturing
Further processing of thermal phosphoric acid into other phosphate-based chemical
products such as shmP and stPP
Completed temporary relocation of one STPP plant with designed capacity of 30,000
tonnes per year, from old premises to New Gongxing Site
Planned construction of one SHMP plant with designed capacity of 20,000 tonnes per year
PHOSPHATE An Essential Mineral for Life
Phosphorus, phosphates and phosphate-based chemical products are used in, or in the manufacturing process for, many
everyday products, such as:
oral hygiene
products
Paint LCd panels and
plasma screens
Food and beverage
products
ASIAPhOS LIMITeD
COMPETITIVE STRENGTHS
Experienced management team from
Singapore and the PRC
DrOngHianEng,CEOandExecutiveDirector,
has extensive knowledge of, and experience in,
the phosphate industry
Ateamofexperiencedandcompetentkey
executives many of whom have more than
10 years of relevant experience in their
respective felds
Relatively higher quality phosphate rocks
Ourphosphaterocksareofrelativelyhigher
quality than other phosphate rocks mined in the
PRC (higher levels of P2O5)

Lower production costs for our Chemical
Production Operations
We currently enjoy relatively lower costs of
production due to:
vertically-integratedbusinessmodelwhich
ensures low costs of quality raw material
without supply volatility, barring unforeseen
circumstances
production effciencies due to phosphate
rocks with relatively high P2O5 content from
our two mines, which have lower impurities
and fewer processing issues, and construction
of new production facilities which incorporate
current technology
improved logistics and transportation
with, inter alia, the completion of the Mian
MaoHighwaywhichwillincreaseaccessibility
between our two mines and production facilities,
and is expected to reduce transportation costs
Close proximity between our two mines and
processing facilities and to customers
Theshortdistanceofapproximately40km
between our two mines and processing facilities
helps to minimise transportation costs for
rock delivery
Wehavequickaccesstomanyofourcustomers
PROSPECTS AND TREND
INFORMATION
Growing demand for phosphate rocks expected
Worldphosphaterockconsumptionisexpected
to achieve a compound annual growth rate
(CAGR) of 1.8% per year (from 2012 to 2022).
The 2022 forecast for such consumption is 227.6
million tonnes
(1)
Chinawillremainastheworldslargestphosphate
rock consumer and its consumption is forecast
to be fat going forward to 2022
(2)
Pricesofphosphaterocksareexpectedtotrend
upwards in the near-term based on past average
sale prices of our phosphate rocks
Prices of fertilisers, a main application of
phosphates, are expected to trend upwards due to
an increasing demand for food from an increasing
world population and limitations in the amount of
arable land for farming

Demand for elemental phosphorus will increase
modestly over the next ten years
Overallgrowthforphosphorusdependent
derivatives is expected to increase at about
4.5%peryearfrom2012to2022
(3)
ChineseSTPPdemandinsectors(otherthan
detergents) such as food applications, water
treatment and metal treatment is forecast to
grow above GDP growth of the PRC
(4)
Pricesofphosphate-basedchemicalproducts
are expected to remain steady
(1), (2), (3), (4)
Source: CRU Industry Report
FINANCIAL HIGHLIGHTS
(Financial Year ended 31 december)
Pharmaceutical
products
Fertilisers Fire retardants Animal feed
Revenue by Geographical Locations of
Our Customers (%)
FY2012 FY2011 FY2010 FP2013*
100
80
60
40
20
0
%
S$million FY2010 FY2011 FY2012 FP2013*
Upstream Segment
Downstream Segment
Revenue
0.4
2.4
2.8
1.5
3.0
4.5
3.7
1.2
4.9
1.0
0.3
1.3
Net Proft after Tax (1.2) 2.9 1.2 (0.7)
* for 3 months ended 31 March
Mining Output
Revenue and Proft
100
80
60
40
20
0
FY2010
4.2
FY2011
30.2
93.0
FY2012
60.1
6 months ended
30 June 2013
Tonnes (000)
BUSINESS STRATEGIES AND FUTURE PLANS
Further mining and
exploration activities
Carryoutfurther
exploration works to
locate new deposits
within permitted areas,
to convert exploration
rights into mining rights
Increasethenumberof
producing adits by up
to 5
Investinmining-related
infrastructure and
equipment:
> haulage systems and
related equipment for
new adits
> additional works
and safety
enhancements to
existing adits
> maintain and repair
roads to improve
accessibility to our
mines and adits
Rebuild, enhance and
increase the capacity
of our Chemical
Production Operations
Commencedtrial
production of P4 in
FY2013
Constructastorage
facility to collect and use
fue gas, a by-product of
P4 processing
Constructandupgrade
processing facilities to
enhance our processing
and manufacturing
capabilities
Increase our
portfolio of
phosphate-based
chemical products
Diversifyourportfolio
of phosphate-based
chemical products
by establishing an
in-house research
and development
team and/or through
outsourcing
Expand through
acquisitions, joint
ventures and
strategic alliances
Enterinto
acquisitions, joint
ventures or strategic
alliances with, inter
alia, parties who
create synergistic
values with our
existing business
Adopt a vertically-
integrated strategy
Withthecompletionof
our production facilities,
our vertically-integrated
operations will give
us raw materials price
and supply stability,
raw materials quality
assurance, and sales
and production
fexibility
Overseas
Overseas markets include Canada, India, New Zealand, Pakistan, Philippines,
South Korea, Spain, Switzerland, United Arab Emirates, USA and Vietnam.
PRC
* for 3 months ended 31 march
89
11
54
46
45
55
91
9
INDEPENDENT VALUATION
Based on the independent valuation report by Jones Lang LaSalle Corporate Appraisal and Advisory
Limited, prepared and presented in accordance with the VALMIN Code, the fair market value of our two
mines and P4 plant was approximately between RMB 1.0 billion (or approximately S$207.6 million*) and
RMB 1.6 billion (or approximately S$332.1 million*) with the preferred value being RMB 1.3 billion (or
approximately S$269.8 million*) as at 31 March 2013.
* Based on the exchange rate as at Latest Practicable Date.
i
CONTENTS
CORPORATE INFORMATION ........................................................................................................... 1
DEFINITIONS ..................................................................................................................................... 5
GLOSSARY OF TECHNICAL TERMS ............................................................................................... 15
SELLING RESTRICTIONS ................................................................................................................ 19
CAUTIONARY NOTES REGARDING FORWARD-LOOKING STATEMENTS ................................. 20
OFFER DOCUMENT SUMMARY ...................................................................................................... 22
DETAILS OF THE INVITATION .......................................................................................................... 25
INDICATIVE TIMETABLE FOR LISTING .......................................................................................... 30
SUMMARY OF INVITATION .............................................................................................................. 31
PLAN OF DISTRIBUTION ................................................................................................................. 32
INVITATION STATISTICS .................................................................................................................. 34
USE OF PROCEEDS ......................................................................................................................... 36
MANAGEMENT, UNDERWRITING AND PLACEMENT ARRANGEMENTS .................................... 38
RISK FACTORS ................................................................................................................................. 41
RISKS RELATING TO OUR BUSINESS ...................................................................................... 41
RISKS RELATING SPECIFICALLY TO OUR MINING OPERATIONS ......................................... 51
RISKS RELATING SPECIFICALLY TO OUR CHEMICAL PRODUCTION OPERATIONS UPON
COMMENCEMENT OF OUR CHEMICAL PRODUCTION OPERATIONS.................................. 55
RISKS RELATING TO OUR OPERATIONS IN THE PRC ........................................................... 58
RISKS RELATING TO OWNERSHIP OF OUR SHARES ............................................................ 61
EXCHANGE RATES AND EXCHANGE CONTROLS ....................................................................... 65
DIVIDEND POLICY ............................................................................................................................ 67
CAPITALISATION AND INDEBTEDNESS ........................................................................................ 69
DILUTION ........................................................................................................................................... 73
RESTRUCTURING EXERCISE ......................................................................................................... 75
SHARE CAPITAL AND SHAREHOLDERS ...................................................................................... 76
SHAREHOLDERS ........................................................................................................................ 78
VENDORS .................................................................................................................................... 81
MORATORIUM ............................................................................................................................. 82
OUR GROUP STRUCTURE .............................................................................................................. 84
ii
CONTENTS
GENERAL INFORMATION ON OUR GROUP .................................................................................. 85
HISTORY ...................................................................................................................................... 85
BUSINESS OVERVIEW ............................................................................................................... 87
USES OF PHOSPHATES ............................................................................................................ 88
MINING OPERATIONS ................................................................................................................ 88
CHEMICAL PRODUCTION OPERATIONS ................................................................................. 94
INDEPENDENT VALUATION ....................................................................................................... 97
CORPORATE SOCIAL RESPONSIBILITY .................................................................................. 97
QUALITY ASSURANCE ............................................................................................................... 99
INTELLECTUAL PROPERTY ...................................................................................................... 101
RESEARCH AND DEVELOPMENT ............................................................................................ 102
INSURANCE ................................................................................................................................ 102
SALES AND MARKETING ........................................................................................................... 103
CREDIT MANAGEMENT ............................................................................................................. 103
STAFF TRAINING AND DEVELOPMENT ................................................................................... 104
SEASONALITY ............................................................................................................................ 104
INVENTORY MANAGEMENT ...................................................................................................... 105
MAJOR SUPPLIERS .................................................................................................................... 106
MAJOR CUSTOMERS ................................................................................................................. 107
PROPERTIES AND FIXED ASSETS ........................................................................................... 108
PERMITS, LICENCES, APPROVALS AND GOVERNMENT REGULATIONS ............................ 110
LEGAL OPINION FROM KING & WOOD MALLESONS ............................................................. 111
PRC GOVERNMENT REGULATIONS ......................................................................................... 122
COMPETITION ............................................................................................................................ 127
COMPETITIVE STRENGTHS ...................................................................................................... 128
PROSPECTS AND TREND INFORMATION ............................................................................... 130
BUSINESS STRATEGIES AND FUTURE PLANS....................................................................... 131
ORDER BOOK ............................................................................................................................. 134
SELECTED COMBINED FINANCIAL INFORMATION ..................................................................... 135
MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL POSITION ...................................................................................................................... 137
MANAGEMENT AND CORPORATE GOVERNANCE ...................................................................... 162
MANAGEMENT REPORTING STRUCTURE .............................................................................. 162
DIRECTORS ................................................................................................................................ 163
KEY EXECUTIVES ...................................................................................................................... 169
SERVICE AGREEMENTS ............................................................................................................ 171
ARRANGEMENT OR UNDERSTANDING ................................................................................... 172
DIRECTORS AND KEY EXECUTIVES REMUNERATION ......................................................... 172
EMPLOYEES ............................................................................................................................... 173
iii
CONTENTS
CORPORATE GOVERNANCE ..................................................................................................... 173
AUDIT COMMITTEE .................................................................................................................... 174
NOMINATING COMMITTEE ........................................................................................................ 175
REMUNERATION COMMITTEE .................................................................................................. 177
LEGAL REPRESENTATIVE AND SUPERVISOR OF OUR PRC SUBSIDIARY, MIANZHU
NORWEST ................................................................................................................................... 177
ASIAPHOS PERFORMANCE SHARE PLAN ................................................................................... 179
INTERESTED PERSON TRANSACTIONS AND CONFLICTS OF INTERESTS ............................. 190
PAST INTERESTED PERSON TRANSACTIONS ....................................................................... 190
PRESENT AND ON-GOING INTERESTED PERSON TRANSACTIONS ................................... 191
REVIEW PROCEDURES FOR FUTURE INTERESTED PERSON TRANSACTIONS ............... 192
POTENTIAL CONFLICTS OF INTERESTS ................................................................................. 193
CLEARANCE AND SETTLEMENT ................................................................................................... 195
GENERAL AND STATUTORY INFORMATION ................................................................................. 196
APPENDIX A : AUDITED COMBINED FINANCIAL STATEMENTS FOR THE FINANCIAL
YEARS ENDED 31 DECEMBER 2010, 2011 AND 2012 .................................... A-1
APPENDIX B : UNAUDITED INTERIM CONDENSED COMBINED FINANCIAL STATEMENTS
FOR THE THREE MONTHS PERIOD ENDED 31 MARCH 2013 ........................ B-1
APPENDIX C : UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION FOR
THE FINANCIAL YEAR ENDED 31 DECEMBER 2012 AND THE THREE
MONTHS PERIOD ENDED 31 MARCH 2013 ..................................................... C-1
APPENDIX D : SUMMARY OF MEMORANDUM AND ARTICLES OF ASSOCIATION OF
OUR COMPANY ................................................................................................... D-1
APPENDIX E : DESCRIPTION OF OUR SHARES ...................................................................... E-1
APPENDIX F : RULES OF THE ASIAPHOS PERFORMANCE SHARE PLAN .......................... F-1
APPENDIX G : TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION AND
ACCEPTANCE ..................................................................................................... G-1
APPENDIX H : SUMMARY OF RELEVANT PRC LAWS AND REGULATIONS ......................... H-1
APPENDIX I : TAXATION ............................................................................................................ I-1
APPENDIX J : WGM TECHNICAL REPORT ............................................................................... J-1
APPENDIX K : INDEPENDENT VALUATION REPORT ............................................................... K-1
APPENDIX L : CRU INDUSTRY REPORT ................................................................................... L-1
1
CORPORATE INFORMATION
BOARD OF DIRECTORS

: Hong Pian Tee (Non-Executive Chairman and Independent
Director)
Dr. Ong Hian Eng (CEO and Executive Director)
Ong Eng Hock Simon (Executive Director)
Ong Eng Siew Raymond (Non-Executive Director)
Ong Bee Pheng (Non-Executive Director)
Francis Lee Fook Wah (Independent Director)
Goh Yeow Tin (Independent Director)
COMPANY SECRETARY : Teow Xueting, Tanya, LLB (Honours)
REGISTERED OFFICE : 1 Robinson Road
#17-00
AIA Tower
Singapore 048542
PRINCIPAL PLACE OF BUSINESS : Singapore
600 North Bridge Road
Parkview Square
#12-01
Singapore 188778
PRC
Xiangliu Village
Gongxing Town
Mianzhu City
Sichuan Province
Peoples Republic of China
618205
SPONSOR AND UNDERWRITER : United Overseas Bank Limited
80 Rafes Place
UOB Plaza
Singapore 048624
PLACEMENT AGENT : Asiasons WFG Capital Pte. Ltd.
22 Cross Street
#03-54/61
China Square Central
Singapore 048421
AUDITORS OF OUR COMPANY AND
REPORTING ACCOUNTANTS
: Ernst & Young LLP
One Rafes Quay
North Tower
Level 18
Singapore 048583
Partner-in-charge: Ng Boon Heng
(Chartered Accountant, a member of the Institute of
Singapore Chartered Accountants)
2
CORPORATE INFORMATION
SOLICITORS TO THE INVITATION : Shook Lin & Bok LLP
1 Robinson Road
#18-00
AIA Tower
Singapore 048542
SOLICITORS TO THE SPONSOR
AND UNDERWRITER AND THE
PLACEMENT AGENT
: Rajah & Tann LLP
9 Battery Road
#25-01
Straits Trading Building
Singapore 049910
LEGAL ADVISERS TO THE COMPANY
ON PRC LAW
: King & Wood Mallesons (Chengdu Ofce)
22nd Floor
The City Tower
86 Section One
Renminnanlu
Chengdu City
Sichuan Province
Peoples Republic of China
610016
LEGAL ADVISERS TO THE SPONSOR
AND UNDERWRITER AND THE
PLACEMENT AGENT ON PRC LAW
: Tian Yuan Law Firm
10th Floor
China Pacic Insurance Plaza
28 Fengsheng Hutong
Xicheng District
Beijing City
Peoples Republic of China
100032
INDEPENDENT GEOLOGIST : Watts, Grifs and McOuat Limited
Suite 400, 8 King Street East
Toronto, Ontario, M5C 1B5
Canada
INDEPENDENT VALUER : Jones Lang LaSalle Corporate Appraisal and
Advisory Limited
6/F Three Pacic Place
1 Queens Road East
Hong Kong
INDEPENDENT MARKET
CONSULTANT
: CRU International Limited
Chancery House
53-64 Chancery Lane
London
WC2A IQS
United Kingdom
SHARE REGISTRAR AND SHARE
TRANSFER OFFICE
: Boardroom Corporate & Advisory Services Pte. Ltd.
50 Rafes Place
Singapore Land Tower
#32-01
Singapore 048623
3
CORPORATE INFORMATION
PRINCIPAL BANKER : Oversea-Chinese Banking Corporation Limited
65 Chulia Street
#06-00
OCBC Centre
Singapore 049513
RECEIVING BANK : United Overseas Bank Limited
80 Rafes Place
UOB Plaza
Singapore 048624
VENDORS : Cheong Hock @ Cheong Kim Hock
53 Cairnhill Road
#08-03
Cairnhill Plaza
Singapore 229664
Heng Kheng Long
238 Orchard Boulevard
#36-07
The Orchard Residences
Singapore 237973
Heng Kheng Ngiap
13 Nallur Road
Singapore 456615
Kiong James
19 Medway Drive
Serangoon Garden Estate
Singapore 556514
Link Well International Limited
70 Ubi Crescent
#01-11
Ubi Techpark
Singapore 408570
MIB Investments Private Limited
3 Pemimpin Drive
#06-01
Lip Hing Industrial Building
Singapore 576147
Ngo Chong Yong Calvin
78 Greenleaf View
Singapore 279313
Ngo Sio Fung Edna
78 Greenleaf View
Singapore 279313
Ong Chu Poh
30 Saraca Road
Seletar Hills Estate
Singapore 807376
4
CORPORATE INFORMATION
Seacare Foundation Pte Ltd
52 Chin Swee Road
#09-00
Seacare Building
Singapore 169875
Tan Tin Yeow
105 Lentor Street
Singapore 786815
Tan Wee Hiok Allan
341 Kew Crescent
Kew Residencia
Singapore 465959
Wong Liang Kwang
40 Woo Mon Chew Road
Singapore 455115
5
DEFINITIONS
In this Offer Document and the accompanying Application Forms and, in relation to Electronic
Applications, the instructions appearing on the screens of the ATMs of Participating Banks and the
internet banking websites of the relevant Participating Banks, unless the context otherwise requires, the
following denitions apply throughout where the context so admits:
Companies within our Group

Company : AsiaPhos Limited
Group : Our Company and our subsidiaries as at the date of this Offer
Document
Mianzhu Norwest :
(Sichuan Mianzhu Norwest Phosphate Chemical Co., Ltd.)
Norwest Chemicals : Norwest Chemicals Pte. Ltd.
Other Companies and Organisations
ACRA : The Accounting and Corporate Regulatory Authority of Singapore
Advantage Link : Advantage Link International Pte. Ltd.
Astute Ventures : Astute Ventures Pte. Ltd.
Authority : The Monetary Authority of Singapore
CDP : The Central Depository (Pte) Limited
CPF : The Central Provident Fund
CRU : CRU International Limited
Dashan :
(Mianzhu Dashan Mining Co., Ltd)
DBS Bank : DBS Bank Ltd
Eastcomm : Eastcomm Pte. Ltd., an investment holding company
incorporated in Singapore, and one of our Controlling
Shareholders
HHEO : Hwa Hong Edible Oil Industries Pte. Ltd., a wholly-owned
subsidiary of Hwa Hong Corporation Limited
Hwa Hong : Hwa Hong Corporation Limited, a company listed on the
Mainboard of the SGX-ST
Hwa Hong Group : Hwa Hong Corporation Limited and its subsidiaries
IRAS : Inland Revenue Authority of Singapore
JLLCAA : Jones Lang LaSalle Corporate Appraisal and Advisory Limited
King & Wood Mallesons : King & Wood Mallesons (Chengdu Ofce)
KOF-K Kosher Supervision : KOF-K Kosher Supervision, a kosher certication agency in the
USA
6
DEFINITIONS
Link Well : Link Well International Limited
Lomon Chemicals :
(Sichuan Lomon Phosphate Chemical Co., Ltd.)
Lomon Products :
(Sichuan Lomon Phosphate Products Joint Stock Ltd. Company)
MIB Investments : MIB Investments Private Limited
Norwest Holdings : Norwest Holdings Pte. Ltd. (in liquidation pursuant to compulsory
winding up on the grounds of insolvency)
NSF International : NSF International, an independent organisation that provides
standards development, product certication, auditing, education
and risk management for public health and the environment
Participating Banks : United Overseas Bank Limited and its subsidiary, Far Eastern
Bank Limited, OCBC Bank and DBS Bank Ltd. (including POSB),
and Participating Bank means any of the abovementioned
banks
Placement Agent or Asiasons : Asiasons WFG Capital Pte. Ltd.
OCBC Bank : Oversea-Chinese Banking Corporation Limited
Seacare Foundation : Seacare Foundation Pte Ltd
SGX-ST : Singapore Exchange Securities Trading Limited
Share Registrar : Boardroom Corporate & Advisory Services Pte. Ltd.
Sponsor, Underwriter or : United Overseas Bank Limited
Sponsor and Underwriter
or UOB
WGM : Watts, Grifs and McOuat Limited
WYY Investment : WYY Investment Holdings Pte. Ltd.

PRC authorities
Town-level authority
Hanwang Government :
(Hanwang Town Peoples Government)

County-level authorities
Mianzhu Construction Bureau :
(Mianzhu City Housing and Urban Construction Bureau)

Mianzhu Environmental Bureau :
(Mianzhu City Environmental Protection Bureau)
Mianzhu Finance Bureau :
(Mianzhu City Finance Bureau)
7
DEFINITIONS
Mianzhu Land Bureau :
(Mianzhu City Land and Resources Bureau)
Mianzhu Local Tax Bureau :
(Mianzhu City Local Tax Bureau)
Mianzhu Planning Bureau :
(Mianzhu City Planning Bureau)
Mianzhu Resettlement Ofce :
(Mianzhu City Land Acquisition and Resettlement Ofce)
Mianzhu Safety Bureau :
(Mianzhu City Administration Bureau of Work Safety)
Mianzhu Social Insurance :
Bureau (Mianzhu City Social Insurance Administration Bureau)
Mianzhu State Tax Bureau :
(Mianzhu City State Tax Bureau)
Prefecture-level authorities
Deyang AIC Bureau :
(Deyang Administration of Industry and Commerce Bureau)
Deyang Commerce Bureau :
(Deyang City Commerce Bureau, formerly known as
(Deyang City Foreign Trade and Economic
Co-operation Bureau))
Deyang Forestry Bureau :
(Deyang City Forestry Bureau)
Deyang Forex Bureau :
(Deyang City Foreign Exchange Administration Bureau)
Provincial-level authorities
Sichuan Commerce :
Department (Sichuan Province Commerce Department, formerly known as
(Sichuan Foreign Trade and
Economic Co-operation Committee))
Sichuan Development :
Commission (Sichuan Province Development and Reform Commission)
Sichuan Government :
(Sichuan Province Peoples Government)
Sichuan Land Department :
(Sichuan Province Land and Resources Department)
Sichuan Safety Bureau :
(Sichuan Province Administration Bureau of Work Safety)
8
DEFINITIONS
Other authorities
Hong Kong SAR Mainland :
Affairs Bureau (Constitutional and Mainland Affairs Bureau of the Government of
the Hong Kong Special Administrative Region)
SAFE :
(The State Administration for Foreign Exchange of the PRC)

General
Application Forms : The ofcial printed application forms to be used for the purpose
of the Invitation, which form part of this Offer Document
Application List : The list of applications to subscribe for the Invitation Shares
Articles or Articles of : Articles of association of our Company
Association
AsiaPhos Performance Share : The performance share plan of our Company
Plan or Performance Share
Plan
ATM : Automated teller machine
Audit Committee : The audit committee of our Company as at the date of this Offer
Document
Board or Board of Directors : The board of Directors of our Company as at the date of this
Offer Document
Catalist : The sponsor-supervised listing platform of the SGX-ST
Catalist Rules : Listing Manual Section B: Rules of Catalist of the Listing Manual
of the SGX-ST, as amended, supplemented, or modied from
time to time
CEO : Chief Executive Ofcer
Code of Corporate Governance : The Code of Corporate Governance 2012 of Singapore, as
or Code amended, supplemented or modied from time to time
Companies Act : The Companies Act (Chapter 50) of Singapore, as amended,
supplemented or modied from time to time
CRU Industry Report : The independent industry report dated 21 June 2013 prepared by
CRU on the phosphate industry, as set out in Appendix L to this
Offer Document
Deed of Indemnity : The deed of indemnity dated 21 June 2013 pursuant to which
Ong Kwee Eng, Dr. Ong Hian Eng, Wang Xuebo and Chia Chin
Hau have jointly and severally undertaken, inter alia, to indemnify
and hold harmless our Group against losses in connection with
(i) certain land use rights which may be required in connection
with Mianzhu Norwests Mining Operations for a period of 18
months from the date of the Companys admission to Catalist; (ii)
land use rights for Phase 2 Land; and (iii) the requisite licences,
permits and approvals for Commercial Chemical Production
Operations on Phase 2 Land
9
DEFINITIONS
Directors : The directors of our Company as at the date of this Offer
Document
Electronic Applications : Applications for the Offer Shares made through an ATM or
through IB websites of the relevant Participating Banks, subject
to and on the terms and conditions of this Offer Document
EPS : Earnings per Share
Executive Directors : The executive directors of our Company as at the date of this
Offer Document
FP : The three (3) months nancial period ended, or as the case may
be, ending, 31 March
FY : Financial year ended or, as the case may be, ending, 31 December
GDP : Gross domestic product
GST : Goods and services tax
Hanwang Land : The land located in Hanwang New Town, Mianzhu City, Sichuan
Province, the PRC, of approximately 4,973 sq m
IB : Internet banking
IB Application : An application for Offer Shares made through an IB website of a
Participating Bank in accordance with the terms and conditions of
this Offer Document
Independent Directors : The independent directors of our Company as at the date of this
Offer Document
Independent Valuation Report : The valuation report dated 27 August 2013 prepared by JLLCAA
relating to the independent valuation of the fair market value of
the Mines and the P
4
Plant, as set out in Appendix K to this Offer
Document
Investment Agreements : The investment agreements and supplemental letters entered
into by Eastcomm with the Noteholders in 2010, 2012 and 2013
Invitation : The Offer and the Placement
Invitation Price : S$0.25 for each Invitation Share
Invitation Shares : The 122,000,000 Shares which are the subject of this Invitation,
comprising 97,600,000 New Shares and 24,400,000 Vendor
Shares
Key Executives : The key executives of our Group as at the date of this Offer
Document
Latest Practicable Date : 15 August 2013, being the latest practicable date prior to the
lodgment of this Offer Document with the SGX-ST acting as
agent on behalf of the Authority
Legal Representative : (legal representative), a person appointed as a legal
representative of a PRC company under applicable PRC laws,
rules and regulations
10
DEFINITIONS
Management and Underwriting : The management and underwriting agreement dated 25
Agreement September 2013 entered into between our Company, the
Vendors, and the Sponsor and Underwriter, relating to the
Invitation
Market Day : A day on which the SGX-ST is open for trading in securities
Mian Mao Highway : (Mian Mao Highway), the highway to be constructed
jointly by the Sichuan Development Commission and the Hong
Kong SAR Mainland Affairs Bureau, which upon completion is
expected to run from Mianzhu City to (Mao County),
(Aba Tibetan and Qiang Autonomous Prefecture),
Sichuan Province, the PRC
Mine 1 : The (Cheng Qiang
Yan phosphate mine), located in Qing Ping Town, Mianzhu City,
Sichuan Province, the PRC, details of which are set out in the
section entitled General Information on our Group Mining
Operations of this Offer Document
Mine 2 : The (Shi Sun Xi
phosphate mine), located in Qing Ping Town, Mianzhu City,
Sichuan Province, the PRC, details of which are set out in the
section entitled General Information on our Group Mining
Operations of this Offer Document
Mines : Mine 1 and Mine 2 collectively
NAV : Net asset value
New Gongxing Facilities : Our new facilities for our Chemical Production Operations located
at the New Gongxing Site
New Gongxing Site : Our new land premises located at Xiangliu Village, Gongxing
Town, Mianzhu City, Sichuan Province, the PRC, comprising
Phase 1 Land and Phase 2 Land
New Shares : The 97,600,000 new Shares for which our Company invites
applications to subscribe for pursuant to the Invitation, subject to
and on the terms and conditions of this Offer Document
Nominating Committee : The nominating committee of our Company as at the date of this
Offer Document
Noteholders : The holders of convertible loan notes issued by Eastcomm
pursuant to the terms and conditions set out in the Investment
Agreements
Notes : The convertible loan notes in the aggregate principal amount of
S$27,000,000 issued by Eastcomm to the Noteholders pursuant
to the Investment Agreements
NTA : Net tangible assets
Offer : The offer by our Company and the Vendors to the public in
Singapore for subscription and/ or purchase of the Offer Shares
at the Invitation Price, subject to and on the terms and conditions
of this Offer Document
11
DEFINITIONS
Offer Document : This offer document dated 25 September 2013 issued by our
Company and the Vendors in respect of the Invitation, including
the Appendices hereto and the Application Forms
Offer Shares : The 2,000,000 Invitation Shares which are the subject of the
Offer
P
4
Plant : The plant located at the New Gongxing Site which manufactures
and produces P
4
Period Under Review : FY2010, FY2011, FY2012 and FP2013
Phase 1 : The rst phase of our Rebuilding Programme
Phase 2 : The second phase of our Rebuilding Programme

Phase 1 Land : The land located at Xiangliu Village, Gongxing Town, Mianzhu
City, Sichuan Province, the PRC, which forms part of the New
Gongxing Site, of approximately 54,863 sq m
Phase 2 Land : The land located at Xiangliu Village, Gongxing Town, Mianzhu
City, Sichuan Province, the PRC, which forms part of the New
Gongxing Site, of approximately 138.63Mu (approximately 92,425
sq m)
Placement : The placement of the Placement Shares at the Invitation Price
by the Placement Agent on behalf of our Company and the
Vendors, subject to and on the terms and conditions of this Offer
Document
Placement Agreement : The placement agreement dated 25 September 2013 entered
into between our Company, the Vendors and the Placement
Agent relating to the Placement
Placement Shares : The 120,000,000 Invitation Shares which are the subject of the
Placement
PRC or China : Peoples Republic of China. Unless the context requires,
references in this Offer Document to the PRC or China do not
include Hong Kong, Macau or Taiwan
Previous Hanwang Facilities : The facilities for our Chemical Production Operations, located at
Hanwang Town, Mianzhu City, Sichuan Province, the PRC, prior
to the Wenchuan Earthquake and the Relocation Exercise
Rebuilding Programme : The construction of facilities for our Chemical Production
Operations and ofces at the New Gongxing Site following the
Wenchuan Earthquake and the Relocation Exercise
Relocation Exercise : The relocation of our Chemical Production Operations from the
Previous Hanwang Facilities to the New Gongxing Site pursuant
to the request of local PRC authorities following the Wenchuan
Earthquake
Remuneration Committee : The remuneration committee of our Company as at the date of
this Offer Document
12
DEFINITIONS
Restructuring Agreement : The restructuring agreement dated 19 June 2013 entered into
between our Company, Eastcomm, Ong Kwee Eng, Chia Chin
Hau, Dr. Ong Hian Eng, and Wang Xuebo, pursuant to which our
Company acquired the entire issued and paid-up share capital of
Norwest Chemicals from Eastcomm. Please refer to the section
entitled Restructuring Exercise of this Offer Document for
further details
Restructuring Exercise : The restructuring exercise carried out in connection with
the Invitation, more fully described in the section entitled
Restructuring Exercise of this Offer Document
Securities Account : The securities account maintained by a depositor with the CDP
and does not include a securities sub-account
Service Agreements : The service agreements entered into between our Company
and (i) each of our Executive Directors; and (ii) Wang Xuebo, our
Key Executive. Please refer to the section entitled Management
and Corporate Governance - Service Agreements of this Offer
Document for further details
SFA : Securities and Futures Act (Chapter 289) of Singapore, as
amended, supplemented or modied from time to time
SFR : Securities and Futures (Offer of Investments) (Shares and
Debentures) Regulations 2005, as amended, supplemented or
modied from time to time
SFRS : Singapore Financial Reporting Standards
SGXNET : The system maintained by the SGX-ST for announcements by
listed companies
Shareholders : Registered holders of Shares, except where the registered holder
is CDP, the term Shareholders shall, in relation to such Shares
mean the depositors whose Securities Accounts are credited with
Shares
Shares : The ordinary shares in the capital of our Company
USA : The United States of America
Vendor Shares : The 24,400,000 issued and fully paid-up Shares for which the
Vendors invite applications to purchase on the terms and subject
to the conditions set out in this Offer Document
Vendors : (i) Cheong Hock @ Cheong Kim Hock; (ii) Heng Kheng Long;
(iii) Heng Kheng Ngiap; (iv) Kiong James; (v) Link Well; (vi) MIB
Investments; (vii) Ngo Chong Yong Calvin; (viii) Ngo Sio Fung
Edna; (ix) Ong Chu Poh; (x) Seacare Foundation; (xi) Tan Tin
Yeow; (xii) Tan Wee Hiok Allan; and (xiii) Wong Liang Kwang
Wenchuan Earthquake : The earthquake that occurred in Wenchuan County, Sichuan
Province, the PRC on 12 May 2008, which measured 8.0 on the
Richter magnitude scale
13
DEFINITIONS
WGM Technical Report : The independent technical report dated 28 February 2013
prepared by WGM in accordance with NI 43-101 relating to the
Mines as set out in Appendix J to this Offer Document
Currencies, Units and Others
C : Degrees centigrade
m : Metre
Mu : 1 (mu) equals approximately 666.67 sq m
RMB : The PRC Renminbi
sq ft : Square foot
sq km : Square kilometre
sq m : Square metre
US$ or USD : USA dollars
$, S$ or SGD and cent : Singapore dollars and cents, respectively
% or per cent. : Per centum or percentage
All references to Francis Lee in this Offer Document shall be a reference to Francis Lee Fook Wah.
All references to Melissa Ong in this Offer Document shall be a reference to Ong Bee Kuan Melissa.
All references to Rachel Goh in this Offer Document shall be a reference to Goh Cheng Kiat.
All references to Raymond Ong in this Offer Document shall be a reference to Ong Eng Siew Raymond.
All references to Simon Ong in this Offer Document shall be a reference to Ong Eng Hock Simon.
Certain Chinese names and characters, such as those of PRC entities, properties, cities, governmental
and regulatory departments, laws and regulations and notices, have been translated into English, solely
for your convenience, and such translations should not be construed as representations that the English
names actually represent the Chinese names and characters.
The expressions Associate, associated company, associated entity, controlling interest-holder,
Controlling Shareholder, related corporation, related entity, Entity At Risk, Interested Person,
Interested Person Transaction, subsidiary, subsidiary entity, substantial interest-holder and
Substantial Shareholder shall have the meanings ascribed to them respectively in the SFA, the SFR, the
Companies Act and/ or the Catalist Rules, as the case may be.
The expressions the Group, our, ourselves, us, we or other grammatical variations thereof shall,
unless otherwise stated, mean our Company, our Group or any member of our Group, as the context
requires.
The terms depositor, depository agent and depository register shall have the meanings ascribed to
them respectively in Section 130A of the Companies Act.
Words importing the singular shall, where applicable, include the plural and vice versa and words
importing the masculine gender shall, where applicable, include the feminine and neuter genders and
vice versa. References to persons shall include corporations.
14
DEFINITIONS
Any discrepancies in tables, graphs and/ or charts included herein between the amounts listed and the
totals thereof are due to rounding. Accordingly, gures shown as totals in certain tables may not be an
arithmetic aggregation of the gures which precede them. Where applicable, gures and percentages are
rounded off.
Any reference in this Offer Document, the Application Forms and Electronic Applications to any statute
or enactment is a reference to that statute or enactment for the time being amended or re-enacted.
Any word dened in the Companies Act, the SFA, the SFR or the Catalist Rules and used in this Offer
Document, the Application Forms or Electronic Applications, shall, where applicable, have the meaning
ascribed to it under the Companies Act, the SFA, the SFR, or the Catalist Rules, as the case may be.
Any reference in this Offer Document, the Application Forms or Electronic Applications to our Shares
being allotted and/ or allocated to an applicant includes allotment and/ or allocation to the CDP for the
account of that applicant.
Any reference to a time or date in this Offer Document, the Application Forms or Electronic Applications
shall be a reference to Singapore time or date respectively unless otherwise stated.
15
GLOSSARY OF TECHNICAL TERMS
To facilitate a better understanding of our business, the following glossary provides an explanation of
some of the technical terms and abbreviations used in this Offer Document. The terms and their assigned
meanings may not correspond to standard industry or common meanings or usage (as the case may be):
adit or well : An entrance to an underground mine which is horizontal or
nearly horizontal, by which the mine can be entered, drained of
water and/ or ventilated.
Chemical Production Operations : The production of phosphate-based chemical products by
Mianzhu Norwest.
Prior to the Wenchuan Earthquake, we produced P
4
, STPP and
SHMP. As at the Latest Practicable Date, we have received the
requisite approvals, licences, permits and authorisations and
are currently conducting Trial Chemical Production Operations
for Phase 1 of the Rebuilding Programme.
Commercial Chemical Production : The production of phosphate-based chemical products by
Operations Mianzhu Norwest after obtaining the requisite approvals,
licences, permits and authorisations.
Commercial Mining Operations : The mining of phosphate rocks at our Mines by Mianzhu
Norwest after obtaining the requisite approvals, licences,
permits and authorisations. As at the Latest Practicable Date,
Mianzhu Norwest is carrying out Commercial Mining Operations
in Mine 1 pursuant to the Commercial Mining Notication.
Commercial Mining Notication :
(Notice regarding approval of the
resumption of production of Cheng Qiang Yan phosphate mine
of Sichuan Mianzhu Norwest Phosphate Chemical Co., Ltd.
issued by Mianzhu City Administration Bureau of Work Safety),
a notication from the Mianzhu Safety Bureau dated 5 March
2013, pursuant to which Mianzhu Norwest was permitted to
commence Commercial Mining Operations in Mine 1.
deposit : An area of resources or reserves identied by surface mapping,
drilling or development.
exploration : The search for mineral, including prospecting, sampling,
mapping, drilling and other work involved in the search for
mineralisation.
indicated mineral resource : According to the NI 43-101, it is that part of a mineral resource

for which quantity, grade or quality, densities, shape and
physical characteristics, can be estimated with a level of
condence sufcient to allow the appropriate application of
technical and economic parameters, to support mine planning
and evaluation of the economic viability of the deposit. The
estimate is based on detailed and reliable exploration and
testing information gathered through appropriate techniques
from locations such as outcrops, trenches, pits, workings and
drill holes that are spaced closely enough for geological and
grade continuity to be reasonably assumed.
16
GLOSSARY OF TECHNICAL TERMS
inferred mineral resource : According to the NI 43-101, it is that part of a mineral resource

for which quantity and grade or quality can be estimated on
the basis of geological evidence and limited sampling and
reasonably assumed, but not veried, geological and grade
continuity. The estimate is based on limited information and
sampling gathered through appropriate techniques from
locations such as outcrops, trenches, pits, workings and drill
holes.
ISO : International Organization for Standardization, a worldwide
federation of national standard bodies.
ISO 9001 : A constituent part of the ISO 9000 series which specifies
the requirements for a quality management system for
any organisation that needs to demonstrate its ability to
consistently provide products that meet customer and applicable
requirements and aim to enhance customer satisfaction.
ISO 14001 : A constituent part of the ISO 14000 series which represents the
core set of standards used by organisations for designing and
implementing an effective environmental management system.
Kosher : Indicates conformity to the regulations of the Jewish Halakhic
law framework.
lode : Geologically, a deposit of metalliferous ore that fills or is
embedded in a ssure in a rock formation, or a vein of ore that
is deposited or embedded between layers of rock.
measured mineral resource : According to the NI 43-101, it is that part of a mineral resource

for which quantity, grade or quality, densities, shape, and
physical characteristics are so well established that they can
be estimated with sufcient condence to allow the appropriate
application of technical and economic parameters, to support
production planning and evaluation of the economic viability
of the deposit. The estimate is based on detailed and reliable
exploration, sampling and testing information gathered
through appropriate techniques and testing information
gathered through appropriate techniques from locations such
as outcrops, trenches, pits, workings and drill holes that are
spaced closely enough to conrm both geological and grade
continuity.
mineral reserve : According to the NI 43-101, it is the economically mineable part
of a measured or indicated mineral resource demonstrated by
at least a preliminary feasibility study. This study must include
adequate information on mining, processing, metallurgical,
economic and other relevant factors that demonstrate, at the
time of reporting, that economic extraction can be justied. A
mineral reserve includes diluting materials and allowances for
losses that may occur when the material is mined.
mineral resource : According to the NI 43-101, it is a concentration or occurrence
of diamonds, natural solid inorganic, or natural solid fossilised
organic material including base and precious metals, coal, and
industrial minerals in or on the Earths crust in such form and
17
GLOSSARY OF TECHNICAL TERMS
quantity and of such a grade or quality that it has reasonable
prospects for economic extraction. The location, quantity, grade,
geological characteristics and continuity of a mineral resource
are known, estimated or interpreted from specic geological
evidence and knowledge.
Mining Operations : The mining of phosphate rocks at our Mines.
NI 43-101 : National Instrument 43-101 (Standards of Disclosure for Mineral
Projects), a codified set of rules and guidelines for public
disclosure of scientic and technical information about mineral
projects owned by, or explored by, companies which report
these results on stock exchanges within Canada and which is
one of the standards of reporting prescribed by the SGX-ST in
respect of mineral, oil and gas companies.
plant : Fixed or moveable equipment used in our Chemical Production
Operations.
phosphate : An inorganic chemical which is mined to obtain phosphorus for
further industrial applications including agriculture and industrial
chemicals.
phosphate-based chemical : The phosphate-based chemical products which may be
products manufactured by our Chemical Production Operations, including
P
4
, STPP and SHMP.
phosphorite or phosphate rock : A phosphate-bearing sedimentary rock with a sufciently high
content of phosphate minerals to be of economic interest.
phosphorus : Chemical element that has the symbol P and atomic number 15.
preliminary feasibility study : A comprehensive study of the viability of a mineral project
that has advanced to a stage where the mining method, in
the case of underground mining, or the pit conguration in the
case of an open pit, has been established, and which, if an
effective method of mineral processing has been determined,
includes a nancial analysis based on reasonable assumptions
of technical, engineering, operating, economic factors and the
evaluation of other relevant factors which are sufcient for a
qualied person, acting reasonably, to determine if all or part of
the mineral resource may be classied as a mineral reserve.
P
2
O
5
: A chemical compound known as phosphorus pentoxide.
P
4
: A chemical compound known as tetraphosphorus, otherwise
known as yellow phosphorus.
SHMP : A chemical compound known as sodium hexametaphosphate.
silo : A structure for storing materials.
stope : An open space left after the removal of ore from an
underground mine.
STPP : A chemical compound known as sodium triphosphate or sodium
tripolyphosphate.
18
GLOSSARY OF TECHNICAL TERMS
Trial Chemical Production : The trial production of phosphate-based chemical products
Operations by Mianzhu Norwest after obtaining the requisite approvals,
licences, permits and authorisations.
Trial Mining Operations : The mining of phosphate rocks in Mine 2 by Mianzhu Norwest
pursuant to the Trial Mining Notications.
Trial Mining Notications :
(Notice regarding
approval of the resumption of trial production of Cheng Qiang
Yan phosphate mine and Shi Sun Xi phosphate mine of
Sichuan Mianzhu Norwest Phosphate Chemical Co., Ltd issued
by Mianzhu City Administration Bureau of Work Safety), a
notication from Mianzhu Safety Bureau dated 8 March 2012
and
(Notice regarding approval
of the resumption of trial production of Shi Sun Xi phosphate
mine of Sichuan Mianzhu Norwest Phosphate Chemical Co.,
Ltd issued by Mianzhu City Administration Bureau of Work
Safety), a notication from Mianzhu Safety Bureau dated 2 July
2013, pursuant to which Mianzhu Norwest was permitted to
commence Trial Mining Operations in our Mines.
VALMIN Code : Code for the Technical Assessment and Valuation of Mineral
and Petroleum Assets and Securities for Independent Expert
Reports 2005 Edition, prepared by the joint committee of the
Australasian Institute of Mining and Metallurgy, the Australian
Institute of Geoscientists and the Mineral Industry Consultants
Association, with the participation of the Australian Securities
and Investment Commission, the Australian Stock Exchange
Limited, the Minerals Council of Australia, the Petroleum
Exploration Society of Australia, the Securities Association of
Australia and representatives from the Australian nance sector.
19
SELLING RESTRICTIONS
This Offer Document does not constitute an offer, solicitation or invitation to subscribe for and/ or
purchase the Invitation Shares in any jurisdiction in which such offer, solicitation or invitation is unlawful
or is not authorised or to any person to whom it is unlawful to make such an offer, solicitation or invitation.
No action has been or will be taken under the requirements of the legislation or regulations of, or of the
legal or regulatory authorities of, any jurisdiction, except for the lodgment and/ or registration of this Offer
Document in Singapore in order to permit an offering of the Invitation Shares and the distribution of this
Offer Document in Singapore. The distribution of this Offer Document and the offering of the Invitation
Shares in certain jurisdictions may be restricted by the relevant laws in such jurisdictions. Persons
who may come into possession of this Offer Document are required by our Company, the Vendors, the
Sponsor and Underwriter, and the Placement Agent, to inform themselves about, and to observe and
comply with, any such restrictions at their own expense and without liability to our Company, the Vendors,
the Sponsor and Underwriter, or the Placement Agent. Persons to whom a copy of this Offer Document
has been issued shall not circulate to any other person, reproduce or otherwise distribute this Offer
Document or any information herein for any purpose whatsoever nor permit or cause the same to occur.
20
CAUTIONARY NOTES REGARDING FORWARD-LOOKING STATEMENTS
All statements contained in this Offer Document, statements made in press releases and oral statements
that may be made by us, the Vendors, our Directors, Key Executives or employees acting on our behalf,
that are not statements of historical fact, constitute forward-looking statements. You can identify some
of these statements by forward-looking terms such as anticipate, believe, could, estimate, expect,
intend, seek, project, may, plan, will and would or similar words. However, you should note
that these words are not the exclusive means of identifying forward-looking statements. All statements
regarding our expected nancial position, business strategies, plans and prospects are forward-looking
statements.
These forward-looking statements, including without limitation, statements as to:
our revenue and protability;
projections of capital expenditures in general and other nancial items;
our planned expansion and whether we can successfully execute, manage and/ or implement it;
any expected growth;
other expected industry trends; and
anticipated completion of proposed plans and other matters discussed in this Offer Document
regarding matters that are not historical facts,
are only predictions. Forward-looking statements reflect our current views with respect to future
events and are not a guarantee of future performance. These statements are based on our beliefs
and assumptions, which in turn are based on currently available information. Although we believe
the assumptions upon which these forward-looking statements are based are reasonable, any of
these assumptions could prove to be inaccurate, and the forward-looking statements based on these
assumptions could be incorrect.
These forward-looking statements involve known and unknown risks, uncertainties and other factors that
may cause our actual results, performance or achievements to be materially different from any future
results, performance or achievements expressed or implied by such forward-looking statements. These
risks, uncertainties and other important factors include, in no particular order of priority and amongst
others, the following:
changes in political, social and economic conditions and the regulatory environment in the places
in which we conduct our business;
war or acts of international or domestic terrorism;
occurrences of natural disasters, catastrophic events, outbreaks of communicable diseases and
acts of God that affect our business or properties;
changes in government regulations and their interpretation, including mining laws, tax laws,
property laws and foreign investment laws;
our anticipated growth strategies and expected internal growth;
changes in customer demand or preferences;
changes in competitive conditions and our ability to compete under these conditions;
changes in our senior management team or loss of key employees;
changes in labour relations;
changes relating to and our relations with the Controlling Shareholders;
changes in currency exchange rates;
the availability of adequate insurance at reasonable cost;
the availability and cost of labour, building and construction materials, including the ability to secure
materials and subcontractors;
21
CAUTIONARY NOTES REGARDING FORWARD-LOOKING STATEMENTS
changes in the costs associated with environmental, health and safety and security measures;
construction risks including changes in project costs, delays in completion of projects, delays in
obtaining approvals from the relevant authorities and other unforeseen circumstances;
changes in our future capital needs and the availability of nancing and capital to fund these needs;
the ability of third parties to honour their commitments;
the ability of our co-operation or joint venture partners to honour their commitments;
any other matters not yet known to us;
other factors beyond our control; and
the factors described in the section entitled Risk Factors of this Offer Document.
Additional factors that could cause actual results, performance or achievements to differ materially
include, but are not limited to those discussed under the sections entitled Risk Factors, Dividend
Policy, General Information on our Group Business Overview, General Information on our Group
Business Strategies and Future Plans, and Managements Discussion and Analysis of Results of
Operations and Financial Position of this Offer Document, and all forward-looking statements made by
or attributable to us, the Vendors, the Sponsor and Underwriter, the Placement Agent, and/ or persons
acting on our behalf, contained in this Offer Document, are expressly qualied in their entirety by
such factors. Given the risks and uncertainties that may cause our actual future results, performance
or achievements to be materially different than expected, expressed or implied by the forward-looking
statements in this Offer Document, investors are cautioned not to place undue reliance on those
statements. None of our Company, the Vendors, the Sponsor and Underwriter, the Placement Agent or
any other person are representing or warranting to you that our actual future results, performance or
achievements will be as discussed in those statements.
The WGM Technical Report, the Independent Valuation Report and the CRU Industry Report contain
data, information, nancial analysis, forecast, gures and statements (including market and industry data
and forecasts that have been obtained from internal surveys, reports and studies, where appropriate,
as well as market research, publicly available information and industry publications) which are forward-
looking and based on certain assumptions and projections. Industry publications, surveys and forecasts
generally state that the information they contain has been obtained from sources believed to be reliable,
but there can be no assurance as to the accuracy or completeness of such information. Neither we,
the Vendors, the Sponsor and Underwriter, the Placement Agent, nor person(s) acting on our behalf
have conducted an independent review or veried the accuracy or veracity of such data, information,
nancial analysis, forecast, gures and statements, assumptions and projections (the Experts Data).
No representation is made by us, the Vendors, the Sponsor and Underwriter, the Placement Agent or
any person acting on our behalf in respect of any of the Experts Data and neither we, the Vendors, the
Sponsor and Underwriter, nor the Placement Agent take any responsibility for any of the Experts Data.
Further, our Company, the Vendors, the Sponsor and Underwriter, and the Placement Agent, disclaim any
responsibility to update any of those forward-looking statements to reect future developments, events
or circumstances for any reason, even if new information becomes available or other events occur in
the future. We and the Vendors are, however, subject to the provisions of the SFA, SFR and the Catalist
Rules regarding corporate disclosure. In particular, pursuant to Section 241 of the SFA, if after the Offer
Document is registered but before the close of the Invitation, we and the Vendors become aware of (i) a
false or misleading statement or matter in the Offer Document; (ii) an omission from the Offer Document
of any information that should have been included in it under the SFA, SFR or the Catalist Rules; or (iii)
a new circumstance that has arisen since the Offer Document was lodged with the SGX-ST acting as
agent on behalf of the Authority, and would have been required by the SFA, SFR or the Catalist Rules
to be included in the Offer Document, if it had arisen before the Offer Document was lodged, and that is
materially adverse from the point of view of an investor, we and the Vendors may lodge a supplementary
or replacement offer document with the SGX-ST acting as agent on behalf of the Authority.
22
OFFER DOCUMENT SUMMARY
The information contained in this summary is derived from and should be read in conjunction with the full
text of this Offer Document. Terms dened elsewhere in this Offer Document have the same meanings
when used herein. Prospective investors should read the entire Offer Document carefully, in particular the
matters set out in the section entitled Risk Factors and our nancial statements and related notes of this
Offer Document, before making an investment decision.
OVERVIEW OF OUR GROUP
We are the rst mineral resources company to be listed on the SGX-ST which is solely focused on
exploring and mining phosphate in the PRC with the ability to manufacture and produce phosphate-based
chemical products.
We were incorporated in Singapore under the Singapore Companies Act on 3 January 2012 with the
name AsiaPhos Private Limited, as a private company limited by shares. On 6 September 2013, we were
converted into a public company limited by shares and changed our name to AsiaPhos Limited.
We are currently headquartered in Singapore, and possess the rights to explore and mine phosphate in
Sichuan Province, PRC. Prior to the Wenchuan Earthquake, we were engaged in a vertically-integrated
production process involving (i) our Mining Operations; and (ii) our Chemical Production Operations.
We currently own mining and exploration rights to our Mines, which are located approximately 40 km
northwest of the New Gongxing Site. Currently, we have two (2) Mines which are producing phosphate
rocks. Between 2002 and the Wenchuan Earthquake, we obtained approximately 379,000 tonnes of
phosphate rocks from Mine 1. For FY2005, FY2006 and FY2007, we obtained approximately 62,000,
71,000 and 89,000 tonnes of phosphate rocks respectively from our Mines.
We have completed the construction of our P
4
Plant at the New Gongxing Site under Phase 1 of the
Rebuilding Programme in preparation for the resumption of our Chemical Production Operations. We
are currently in the preliminary stages of Phase 2 of the Rebuilding Programme, which involves the
construction of, inter alia, (i) a thermal phosphoric acid plant; and (ii) a food grade and non food grade
SHMP plant. As part of Phase 2 of the Rebuilding Programme, we have also temporarily relocated our
STPP equipment, machinery and storage facilities from the Previous Hanwang Facilities to the New
Gongxing Site.
Our Group comprises our Company and our subsidiaries, Norwest Chemicals and Mianzhu Norwest.
Uses of Phosphates
Phosphate is a valuable and non-renewable natural resource, and has numerous commercial and
industrial applications. The root element, phosphorus, is an important nutrient for human, animal and
plant life.
Phosphorus, phosphates and phosphate-based chemical products are used in, or in the manufacturing
processes for, many everyday products, including: fertilisers and animal feed, explosives, re retardants,
food and beverage products, batteries, ceramics, detergents and cleaning products, and lubricants for
industrial applications.
OUR COMPETITIVE STRENGTHS
Our Directors consider the following to be our core competitive strengths:
Our phosphate rocks are of relatively higher quality than other phosphate rocks mined in the PRC
We benet from relatively lower production costs
Our Mines and the New Gongxing Site are located close to each other and our customers
We have an experienced management team

Please refer to the section entitled General Information on our Group Competitive Strengths of this
Offer Document for further details.
23
OFFER DOCUMENT SUMMARY
OUR BUSINESS STRATEGIES AND FUTURE PLANS
Our business strategies and future plans are as follows:
Further Mining Operations and exploration activities to increase phosphorite resources and output
Adopting a vertically-integrated strategy
Rebuilding, enhancing and increasing the capacity of our Chemical Production Operations
Increasing our portfolio of phosphate-based chemical products
Expanding through acquisitions, joint ventures and strategic alliances
A detailed discussion of our business strategies and future plans is set out in the section entitled General
Information on our Group Business Strategies and Future Plans of this Offer Document.
OUR FINANCIAL PERFORMANCE
The following table presents a summary of the combined nancial statements of our Group and should be
read in conjunction with the full text of this Offer Document.
Selected items from the Combined Statements of Comprehensive Income
Audited Audited Audited Unaudited Unaudited
($000) FY2010 FY2011 FY2012 FP2012 FP2013
Revenue 2,775 4,522 4,897 1,004 1,310
Gross prot 402 2,374 2,101 356 445
Other income 981 2,535 3,538 1,361 8
(Loss)/ prot before tax (1,206) 2,933 1,509 1,174 (749)
Taxation 28 (284)
(Loss)/ prot for the year/ period attributable to
owners of the Company (1,178) 2,933 1,225 1,174 (749)
Total comprehensive (loss)/ income for
the year/ period attributable to owners of
the Company (1,279) 3,468 307 726 (384)
24
OFFER DOCUMENT SUMMARY
Selected items from the Combined Balance Sheet
Audited Audited Audited Unaudited
($000)
as at 31
December
2010
as at 31
December
2011
as at 31
December
2012
as at 31
March
2013
Non-current assets 6,666 22,978 33,188 32,888
Current assets 3,605 7,455 10,401 9,547
Total assets 10,271 30,433 43,589 42,435
Current liabilities 6,594 11,183 12,271 9,604
Non-current liabilities 2,343 2,448 2,709 2,760
Total liabilities 8,937 13,631 14,980 12,364
Net assets 1,334 16,802 28,609 30,071
Share capital 9,048 21,048 32,548 34,394
Reserves (7,714) (4,246) (3,939) (4,323)
Total equity 1,334 16,802 28,609 30,071
OUR CONTACT DETAILS
Our registered address is 1 Robinson Road, #17-00, AIA Tower, Singapore 048542.
Our principal place of business in Singapore is 600 North Bridge Road, Parkview Square, #12-01,
Singapore 188778. Our telephone and fax numbers are +65 6292 3119 and +65 6292 3122 respectively.
Our principal place of business in the PRC is Xiangliu Village, Gongxing Town, Mianzhu City, Sichuan
Province, PRC 618205. Our telephone and fax numbers are +86 838 626 9858 and +86 838 626 9802
respectively.
Our Companys registration number is 201200335G.
Our website address is http://www.asiaphos.com. The information on our website or any website directly
or indirectly linked to our website or the websites of any of our related corporations or other entities in
which we may have an interest is not incorporated by reference into this Offer Document and should not
be relied on.
25
DETAILS OF THE INVITATION
LISTING ON CATALIST
The Sponsor has, on our behalf, made an application to the SGX-ST for permission to list and deal in,
and for quotation of, all our Shares already issued (including the Vendor Shares), the New Shares and
the Shares which may be issued pursuant to the AsiaPhos Performance Share Plan, on Catalist. Such
permission will be granted when we have been admitted to Catalist. Acceptances of applications and the
allotment and allocation of the Invitation Shares will be conditional upon the completion of the Invitation,
which is subject to certain conditions, including the SGX-ST granting permission to list and deal in, and
for quotation of, all our existing issued Shares (including the Vendor Shares), the New Shares and the
Shares which may be issued pursuant to the AsiaPhos Performance Share Plan, on Catalist.
If the completion of the Invitation does not occur, or the said permission from the SGX-ST is not granted
for any reason, monies paid in respect of any application accepted will be returned to you at your own
risk, without interest or any share of revenue or other benet arising therefrom and you will not have
any claim against our Company, the Vendors, the Sponsor and Underwriter, or the Placement Agent. No
Shares will be allotted or allocated on the basis of this Offer Document later than six (6) months after the
date of registration of this Offer Document by the SGX-ST, acting as agent on behalf of the Authority.
Companies listed on Catalist may carry higher investment risk when compared with larger or more
established companies listed on the SGX-ST Mainboard. In particular, companies may list on Catalist
without a track record of protability and there is no assurance that there will be a liquid market in
the shares or units of shares traded on Catalist. You should be aware of the risks of investing in such
companies and should make the decision to invest only after careful consideration and, if appropriate,
consultation with your professional adviser(s).
Neither the Authority nor the SGX-ST has examined or approved the contents of this Offer Document,
or assumes any responsibility for the contents of this Offer Document, including the correctness of any
of the statements made, reports contained or opinions expressed in this Offer Document. A copy of this
Offer Document together with copies of the Application Forms have been lodged with and registered by
the SGX-ST acting as agent on behalf of the Authority. Registration of this Offer Document by the SGX-
ST acting as agent on behalf of the Authority does not imply that the SFA, or any other legal or regulatory
requirements, have been complied with. Our eligibility to list and admission to Catalist are not to be taken
as an indication of the merits of the Invitation, our Company, our subsidiaries, our existing issued Shares
(including the Vendor Shares), the New Shares or the Shares which may be issued pursuant to the
AsiaPhos Performance Share Plan. The SGX-ST does not normally review the application for admission
to Catalist but relies on the Sponsor conrming that our Company is suitable to be listed and complies
with the Catalist Rules.
The Authority, the SGX-ST (acting as agent on behalf of the Authority) or other competent authority may,
in certain circumstances issue a stop order (the Stop Order) to our Company, directing that no or no
further Invitation Shares be alloted, allocated, issued and/ or sold.
Where applications to subscribe for and/ or purchase the Invitation Shares to which this Offer Document
relates have been made prior to the Stop Order, and:
(i) where the Invitation Shares have not been issued and/ or transferred to you, your application shall
be deemed to have been withdrawn and cancelled and our Company (for itself and on behalf of the
Vendors) shall, within 14 days from the date of the Stop Order, return to you at your own risk all
monies you have paid on account of your application for the Invitation Shares, without interest or
any share of revenue or other benet arising therefrom; or
(ii) where the Invitation Shares have been issued and/ or transferred to you, the issue and/ or transfer
of the Invitation Shares shall be deemed void and our Company (for itself and on behalf of the
Vendors) shall, within 14 days from the date of the Stop Order, return to you at your own risk all
monies you have paid on account of your application for the Invitation Shares, without interest or
any share of revenue or other benet arising therefrom, and
you will not have any claim against our Company, the Vendors, the Sponsor and Underwriter or the
Placement Agent.
26
DETAILS OF THE INVITATION
A copy of this Offer Document together with copies of the Application Forms have been lodged with and
registered by the SGX-ST acting as agent on behalf of the Authority. Neither the Authority nor the SGX-
ST has, in any way, considered the merits of our existing issued Shares (including the Vendor Shares),
the New Shares or the Shares which may be issued pursuant to the AsiaPhos Performance Share Plan,
as the case may be, being offered or in respect of which the Invitation is made, for investment. We have
not lodged or registered this Offer Document in any other jurisdiction.
The Directors and the Vendors collectively and individually accept full responsibility for the accuracy of
the information given in this Offer Document and conrm after making all reasonable enquiries, that to the
best of their knowledge and belief, this Offer Document constitutes full and true disclosure of all material
facts about the Invitation and our Group, and the Directors and the Vendors are not aware of any facts the
omission of which would make any statement in this Offer Document misleading. Where information in the
Offer Document has been extracted from published or otherwise publicly available sources or obtained
from a named source, the sole responsibility of the Directors and the Vendors has been to ensure that
such information has been accurately and correctly extracted from those sources and/ or reproduced in
the Offer Document in its proper form and context.
No representation, warranty or covenant, express or implied, is made by us, the Vendors, the Sponsor
and Underwriter, the Placement Agent, the experts, or any of our or their respective afliates, directors,
ofcers, employees, agents, representatives or advisers as to the accuracy or completeness of the
information contained herein, and nothing contained in this Offer Document is, or shall, to the extent
permitted by law, be relied upon as a promise, representation or covenant by us, the Vendors, the
Sponsor and Underwriter, the Placement Agent, the experts, or any of our or their respective afliates,
directors, ofcers, employees, agents, representatives or advisers.
None of our Company, the Vendors, the Sponsor and Underwriter, the Placement Agent, the experts, or
any of our or their respective afliates, directors, ofcers, employees, agents, representatives or advisers
or any other parties involved in the Invitation are making any representation or undertaking to any person
regarding the legality of an investment in our Shares by such person under any investment or other laws
or regulations. No information in this Offer Document should be considered as being business, legal,
nancial or tax advice. Investors should be aware that they may be required to bear the nancial risks of
an investment in our Shares for an indenite period of time. You should consult your own professional or
other advisers for business, legal, nancial or tax advice regarding an investment in our Shares.
No person has been or is authorised to give any information or to make any representation not contained
in this Offer Document in connection with the Invitation and, if given or made, such information or
representation must not be relied upon as having been authorised by our Company, the Vendors, the
Sponsor and Underwriter or the Placement Agent. Neither the delivery of this Offer Document, the
Application Forms or any document relating to the Invitation shall, under any circumstances, constitute
a continuing representation or create any suggestion or implication that there has been no change in
our affairs or in the statements of fact or information contained in this Offer Document since the date of
this Offer Document. Where such changes occur and are material or required to be disclosed by law, the
SGX-ST and/ or any other regulatory or supervisory body or agency, we will comply with the relevant
provisions and, if required, make an announcement of the same to the SGX-ST and to the public and/ or
lodge a supplementary or replacement offer document with the SGX-ST acting as agent on behalf of the
Authority. You should take note of any such announcement and, upon release of such an announcement,
shall be deemed to have been given notice of such changes.
Save as expressly stated in this Offer Document, nothing herein is, or may be relied upon as, a promise
or representation as to the future performance or policies of our Company or our subsidiaries. The
Invitation Shares are offered for subscription and/ or purchase solely on the basis of the information
contained and representations made in this Offer Document.
27
DETAILS OF THE INVITATION
We and the Vendors are subject to the provisions of the SFA, SFR and the Catalist Rules regarding the
corporate disclosure. In particular, pursuant to Section 241 of the SFA, if after this Offer Document is
registered but before the close of the Invitation, we and the Vendors become aware of:
(i) a false or misleading statement in this Offer Document;
(ii) an omission from this Offer Document of any information that should have been included in it under
the SFA, SFR or the Catalist Rules; or
(iii) a new circumstance that has arisen since the Offer Document was lodged with the SGX-ST acting
as agent on behalf of the Authority, and would have been required by the SFA, SFR or the Catalist
Rules to be included in this Offer Document, if it had arisen before this Offer Document was
lodged,
that is materially adverse from the point of view of an investor, we and the Vendors may lodge a
supplementary or replacement offer document with the SGX-ST acting as agent on behalf of the Authority
pursuant to Section 241 of the SFA.
In the event that a supplementary or replacement offer document is lodged with the SGX-ST acting as
agent on behalf of the Authority, the Invitation shall be kept open for at least 14 days after the lodgment of
such supplementary or replacement offer document.
Where prior to the lodgment of the supplementary or replacement offer document, applications have been
made under this Offer Document to subscribe for and/ or purchase our Invitation Shares and:
1. where the Invitation Shares have not been issued and/ or sold to you, our Company (for itself and
on behalf of the Vendors) shall:
(i) within two (2) days (excluding any Saturday, Sunday or public holiday) from the date of
lodgment of the supplementary or replacement offer document, give you notice in writing
of how to obtain, or arrange to receive a copy of the supplementary or replacement
offer document, as the case may be, and to provide you with an option to withdraw your
application, and take all reasonable steps to make available within a reasonable period the
supplementary or replacement offer document, as the case may be, to you, where you have
indicated that you wish to obtain, or have arranged to receive, a copy of the supplementary
of replacement offer document; or
(ii) within seven (7) days from the date of lodgment of the supplementary or replacement offer
document, give you the supplementary or replacement offer document, as the case may be,
and provide you with an option to withdraw your application; or
(iii) treat the applications as withdrawn and cancelled, in which case your application shall be
deemed to have been withdrawn and cancelled, and our Company (for itself and on behalf
of the Vendors) shall within seven (7) days from the date of lodgment of the supplementary
or replacement offer document, return all monies paid in respect of any application to you at
your own risk, without interest or any share of revenue or other benet arising therefrom, or
2. where the Invitation Shares have been issued and/ or sold to you, our Company (for itself and on
behalf of the Vendors) shall either:

(i) (A) within two (2) days (excluding any Saturday, Sunday or public holiday) from the date
of lodgment of the supplementary or replacement offer document, give you notice
in writing of how to obtain, or arrange to receive a copy of the supplementary or
replacement offer document, as the case may be, and to provide you with an option to
return to our Company and the Vendors, the Invitation Shares which you do not wish
to retain title in; and
28
DETAILS OF THE INVITATION
(B) take all reasonable steps to make available within a reasonable period the
supplementary or replacement offer document, as the case may be, to you, where
you have indicated that you wish to obtain, or have arranged to receive, a copy of the
supplementary of replacement offer document; or
(ii) within seven (7) days from the date of lodgment of the supplementary or replacement offer
document, give you the supplementary or replacement offer document, as the case may
be, and provide you with an option to return to our Company and the Vendors the Invitation
Shares, which you do not wish to retain title in; or
(iii) (A) in the case of the New Shares, deem the issue as void and refund your payments
for the New Shares (without interest or any share of revenue or other benet arising
therefrom and at your own risk) within seven (7) days from the date of lodgment of the
supplementary or replacement offer document; and
(B) in the case of Vendor Shares, deem the sale of the Vendor Shares as void, and
in the case where documents to evidence title to the Vendor Shares (the title
documents) have been issued to you, within seven (7) days from the date of
lodgment of the supplementary or replacement offer document, inform you to return
the title documents within 14 days from the date of lodgment of the supplementary
or replacement offer document, and within seven (7) days from receipt of the
title documents or the date of lodgment of the supplementary or replacement offer
document, whichever is the later, refund your payments for the Vendor Shares (without
interest or any share of revenue or other benet arising therefrom and at your own
risk), or if no title documents have been issued to you, within seven (7) days from the
date of lodgment of the supplementary or replacement offer document, refund your
payments for the Vendor Shares (without interest or any share of revenue or other
benet arising therefrom and at your own risk),
and you will not have any claim against our Company, the Vendors, the Sponsor and Underwriter
and the Placement Agent.
If you wish to exercise your option under paragraph 1(i) or (ii) above to withdraw your application
in respect of the Invitation Shares, you shall, within 14 days from the date of lodgment of the
supplementary or replacement offer document, notify our Company of this, whereupon our
Company (for itself and on behalf of the Vendors) shall within seven (7) days from the receipt of
such notication, return to you all monies you have paid on account of your application for and/ or
purchase of such Invitation Shares.
If you wish to exercise your option under paragraph 2(i) or (ii) above to return the Invitation
Shares issued and/ or sold to you, you shall, within 14 days from the date of lodgment of
the supplementary or replacement offer document, notify our Company of this and return all
documents, if any, purporting to be evidence of title to those Shares, to our Company, whereupon
our Company (for itself and on behalf of the Vendors) shall within seven (7) days from the receipt of
such notication and documents, if any, return to you all monies you have paid for those Invitation
Shares.
Where monies are to be returned to you for the Invitation Shares, it shall be paid to you without
any interest or share of revenue or other benet arising therefrom at your own risk, and you will not
have any claim against us, the Vendors, the Sponsor and Underwriter and the Placement Agent,
and any issue and/ or sale of those Invitation Shares shall be deemed to be void.
This Offer Document has been prepared solely for the purpose of the Invitation and may not be
relied upon by any other persons other than the applicants in connection with their application for
and/ or purchase of the Invitation Shares.
29
DETAILS OF THE INVITATION
The distribution of this Offer Document and the offer, purchase, sale or transfer of our Shares may
be restricted by law in certain jurisdictions. We, the Vendors, the Sponsor and Underwriter and the
Placement Agent require persons into whose possession this Offer Document comes, to inform
themselves about and to observe any such restrictions at their own expense and without liability
to us, the Vendors, the Sponsor and Underwriter or the Placement Agent.
This Offer Document does not constitute an offer of, or invitation or solicitation to subscribe
for and/ or purchase the Invitation Shares in any jurisdiction in which such offer or invitation or
solicitation is unauthorised or unlawful nor does it constitute an offer or invitation or solicitation
to any person to whom it is unlawful to make such offer or invitation or solicitation. Persons to
whom a copy of this Offer Document has been issued shall not circulate to any other person,
reproduce or otherwise distribute this Offer Document or any information herein for any purpose
whatsoever nor permit or cause such circulation, reproduction or distribution to occur.

Copies of this Offer Document and the Application Forms and envelopes may be obtained on request,
during ofce hours, subject to availability, from:
United Overseas Bank Limited
80 Rafes Place
#03-03
UOB Plaza 1
Singapore 048624
Asiasons WFG Capital Pte. Ltd.
22 Cross Street
#03-54/61
China Square Central
Singapore 048421
A copy of this Offer Document is also available on the SGX-ST website at http://www.sgx.com.
The Invitation will be open at 7.00 p.m. from 25 September 2013 and will remain open until 12.00
noon on 3 October 2013 or such further period or periods as our Company and the Vendors may, in
consultation with the Sponsor and Underwriter and the Placement Agent, in their absolute discretion,
decide, subject to any limitations under all applicable laws, PROVIDED ALWAYS THAT where a
supplementary offer document or replacement offer document has been lodged with the SGX-ST
acting as agent on behalf of the Authority, the Invitation shall be kept open for at least 14 days after the
lodgment of the supplementary offer document or replacement offer document.

Details for the procedure for application for the Invitation Shares are set out in Appendix G entitled
Terms, Conditions and Procedures for Application and Acceptance to this Offer Document.
30
INDICATIVE TIMETABLE FOR LISTING
The indicative timetable is set out below for the reference of applicants:
Indicative Time and Date Event
25 September 2013, 7.00 p.m. Opening date and time for the Invitation
26 September 2013, 12.30 p.m. Opening date and time for Electronic Applications

3 October 2013, 12.00 noon Closing date and time for the Invitation
4 October 2013 Balloting of applications, if necessary (in the event
of over-subscription for the Offer Shares)
7 October 2013, 9.00 a.m. Commence trading on a ready basis
10 October 2013 Settlement date for all trades done on a ready
basis
The above timetable is only indicative as it assumes that the closing of the Invitation takes place on
3 October 2013, the date of admission of our Company to Catalist will be 7 October 2013, the SGX-STs
shareholding spread requirement will be complied with and the Invitation Shares will be issued or allotted
and fully paid prior to 7 October 2013. The actual date on which our Shares will commence trading
on a ready basis will be announced when it is conrmed by the SGX-ST.
Please note that the timetable is indicative only and is subject to change (whether in relation to the Offer
Shares, Placement Shares or any mode of application thereof) at the discretion of our Company and the
Vendors, with the agreement of the Sponsor and Underwriter and the Placement Agent.
The above timetable and procedures may also be subject to such modications as the SGX-ST may, in
its discretion, decide, including the decision to permit trading on a ready basis and the commencement
date of such trading.
Investors should refer to the SGX-ST announcement on the ready trading date on the Internet
(at the SGX-ST website http://www.sgx.com) or the newspapers or check with their brokers on the
date on which trading on a ready basis will commence.
In the event of any changes in the closure of the Invitation or the extension of the time period during
which the Invitation is open, we will publicly announce the same:
(i) through a SGXNET announcement to be posted on the internet at the SGX-ST website
(http://www.sgx.com); and
(ii) in a local English newspaper such as The Straits Times or The Business Times.
Results of the Invitation including the level of subscription and the basis of allotment of the Offer Shares
will be provided as soon as it is practicable after the closure of the Invitation through the channels in (i)
and (ii) above.

31
SUMMARY OF INVITATION
The Issuer : AsiaPhos Limited, a company with limited liability incorporated under
the laws of Singapore on 3 January 2012.

Invitation Size : 122,000,000 Invitation Shares comprising 97,600,000 New Shares
and 24,400,000 Vendor Shares. The New Shares will, upon issue
and allotment, rank pari passu in all respects with our existing issued
Shares (including the Vendor Shares).

The Invitation : The Invitation comprises an offering of:
(a) 2,000,000 Offer Shares at the Invitation Price, to members of
the public in Singapore; and
(b) 120,000,000 Placement Shares at the Invitation Price, for
placement to members of the public and institutional investors in
Singapore,
subject to and on the terms and conditions of this Offer Document.

Invitation Price : S$0.25 for each Invitation Share. Investors are required to pay the
Invitation Price in S$.

Clawback and : The Invitation Shares may be re-allocated between the Offer and
Re-allocation Placement tranches at the discretion of the Sponsor in the event of an
over-subscription in one and an under-subscription in the other.

Purpose of the Invitation : Our Directors consider that the listing and quotation of our Shares
on Catalist will enhance our public image locally and internationally
and enable us to tap into the capital markets to fund our business
growth. It will also provide members of the public with an opportunity
to participate in the equity of our Company. The Invitation will also
enlarge our capital base for continued expansion of our business.

Listing Status : Prior to the Invitation, there had been no public market for our Shares.
Our Shares will be quoted in S$ on Catalist, subject to admission
of our Company to Catalist and permission for dealing in and for
quotation of our Shares (including the Vendor Shares), the New
Shares and the Shares which may be issued under the AsiaPhos
Performance Share Plan being granted by the SGX-ST and the
Authority, the SGX-ST (acting as agent on behalf of the Authority) or
other competent authority not issuing a Stop Order.

Risk Factors : Prospective investors should carefully consider certain risks
connected with an investment in our Shares. Please refer to the
section entitled Risk Factors of this Offer Document for further
details.
32
PLAN OF DISTRIBUTION
The Invitation
The Invitation is for 2,000,000 Offer Shares and 120,000,000 Placement Shares offered in Singapore by
way of a public offer and placement respectively. We are making an offering of 97,600,000 New Shares
and the Vendors are making an offering of an aggregate of 24,400,000 Vendor Shares for subscription
and/ or purchase at the Invitation Price for each Invitation Share.
The Invitation Price
The Invitation Price is determined by us in consultation with the Sponsor and Underwriter as well as the
Placement Agent after taking into consideration, inter alia, prevailing market conditions and estimated
market demand for our Shares determined through a book-building process. The Invitation Price is the
same for each Invitation Share and is payable in full on application.
There are no arrangements whereby the number of Shares being offered pursuant to this Invitation may
be increased by the exercise of an underwriters over-allotment option.
Offer Shares
The Offer Shares are made available to members of the public in Singapore for subscription and/ or
purchase at the Invitation Price. Applications for Offer Shares may be made by way of printed Application
Forms or by way of Electronic Applications. The terms and conditions and procedures for application and
acceptance are set out in Appendix G entitled Terms, Conditions and Procedures for Application and
Acceptance to this Offer Document.
Pursuant to the terms and conditions contained in the Management and Underwriting Agreement as
disclosed in the section entitled Management, Underwriting and Placement Arrangements of this Offer
Document, the Sponsor and Underwriter has agreed to manage the Invitation and to underwrite the Offer
Shares. The Underwriter may, at its absolute discretion, appoint one (1) or more sub-underwriters.
In the event of an under-subscription for the Offer Shares as at the close of the Invitation, the number of
Offer Shares not subscribed for and/ or purchased shall be made available to satisfy excess applications
for the Placement Shares to the extent that there is an over-subscription for the Placement Shares as at
the close of the Invitation.
In the event of an over-subscription for the Offer Shares as at the close of the Invitation and/ or the
Placement Shares are fully subscribed, purchased or over-subscribed for as at the close of the Invitation,
the successful applications for the Offer Shares will be determined by ballot or otherwise as determined
by our Directors, after consultation with the Sponsor, and approved by the SGX-ST, if required.
In the event that the Placement Agent receives valid applications and payment for less than 85%
of the Placement Shares by 12.00 noon on 2 October 2013 (or such later date and time as may
be decided by the Placement Agent), the Placement Agent shall have the right to terminate the
Placement Agreement (by notice in writing to the Company and the Vendors). The Management
and Underwriting Agreement is conditional upon the Placement Agreement not being terminated
or rescinded. In the event of termination of the Placement Agreement, the Management and
Underwriting Agreement will also terminate. In the event the Management and Underwriting
Agreement and/ or the Placement Agreement are terminated, our Company and the Vendors
reserves the right, in our and their absolute discretion, to cancel the Invitation, upon which
all application monies will be returned to subscribers and/ or purchasers without interest or
any share of revenue or other benet arising therefrom and at their own risk, and subscribers
and/ or purchasers will not have any claim against our Company, the Vendors, the Sponsor and
Underwriter, or the Placement Agent.
33
PLAN OF DISTRIBUTION
Placement Shares
The Placement Shares are made available to retail and institutional investors in Singapore. Applications
for the Placement Shares may be made by way of printed Application Forms or such other forms of
application as the Sponsor and Underwriter and the Placement Agent deem appropriate. The terms and
conditions and procedures for application and acceptance are set out in Appendix G entitled Terms,
Conditions and Procedures for Application and Acceptance to this Offer Document.
Pursuant to the terms and conditions contained in the Placement Agreement as disclosed in the
section entitled Management, Underwriting and Placement Arrangements of this Offer Document,
the Placement Agent has agreed to subscribe for and/ or purchase, or procure subscribers and/ or
purchasers for the Placement Shares, at the Invitation Price. The Placement Agent may, at its absolute
discretion, appoint one (1) or more sub-placement agents for the Placement Shares.
In the event of an under-subscription for the Placement Shares as at the close of the Invitation, that
number of Placement Shares not subscribed for and/ or purchased shall be made available to satisfy
excess applications for the Offer Shares to the extent that there is an over-subscription for the Offer
Shares as at the close of the Invitation.
In the event that the Placement Agent receives valid applications and payment for less than 85%
of the Placement Shares by 12.00 noon on 2 October 2013 (or such later date and time as may
be decided by the Placement Agent), the Placement Agent shall have the right to terminate the
Placement Agreement (by notice in writing to the Company and the Vendors). The Management
and Underwriting Agreement is conditional upon the Placement Agreement not being terminated
or rescinded. In the event of termination of the Placement Agreement, the Management and
Underwriting Agreement will also terminate. In the event the Management and Underwriting
Agreement and/ or the Placement Agreement are terminated, our Company and the Vendors
reserve the right, in our and their absolute discretion, to cancel the Invitation, upon which
all application monies will be returned to subscribers and/ or purchasers without interest or
any share of revenue or other benet arising therefrom and at their own risk, and subscribers
and/ or purchasers will not have any claim against our Company, the Vendors, the Sponsor and
Underwriter or the Placement Agent.
Subscribers for and purchasers of the Placement Shares may be required to pay brokerage of up to one
per cent. (1%) of the Invitation Price to the Placement Agent or any sub-placement agent as may be
appointed by the Placement Agent as well as stamp duties and other charges.
Subscription for and purchase of the Invitation Shares
None of our Substantial Shareholders, Directors, Key Executives, and employees intend to subscribe for
and/ or purchase more than ve per cent. (5%) of the Invitation Shares. To the best of our knowledge, we
are unaware of any person who intends to subscribe for and/ or purchase more than ve per cent. (5%)
of the Invitation Shares.
However, through the book-building process to assess market demand for our Shares, there may be
person(s) who may indicate an interest to subscribe for and/ or purchase more than ve per cent. (5%)
of the Invitation Shares. If such person(s) were to make an application for more than ve per cent. (5%)
of the Invitation and are subsequently allotted and/ or allocated such number of Shares, we will make the
necessary announcements at an appropriate time. The nal allotment and/ or allocation of Shares will
be in accordance with the shareholding spread and distribution guidelines as set out in Rule 406 of the
Catalist Rules.
No Shares shall be allotted or allocated on the basis of this Offer Document later than six (6) months
after the date of registration of this Offer Document by the SGX-ST acting as agent on behalf of the
Authority.
34
INVITATION STATISTICS
Invitation Price S$0.25
NAV
(1)
NAV per Share based on the unaudited combined balance sheet of our Group as
at 31 March 2013:
(a) before adjusting for the estimated net proceeds from the issue of the New
Shares and based on the pre-Invitation share capital of 702,400,000 Shares
4.28 cents
(b) after adjusting for the estimated net proceeds from the issue of the New
Shares and based on the post-Invitation share capital of 800,000,000 Shares
6.45 cents
Premium of Invitation Price over the NAV per Share as at 31 March 2013:
(a) before adjusting for the estimated net proceeds from the issue of the New
Shares and based on the pre-Invitation share capital of 702,400,000 Shares
484.1%
(b) after adjusting for the estimated net proceeds from the issue of the New
Shares and based on the post-Invitation share capital of 800,000,000 Shares
287.6%
Earnings per Share
Historical EPS of our Group for FY2012 based on the prot for the year attributable
to owners of the Company and the pre-Invitation share capital of 702,400,000
Shares
0.17 cents
Historical EPS of our Group for FY2012 based on the prot for the year attributable
to owners of the Company (assuming that the Service Agreements had been
in place from the beginning of FY2012) and the pre-Invitation share capital of
702,400,000 Shares
0.16 cents
Price Earnings Ratio
Historical price earnings ratio based on the Invitation Price and the historical EPS
of our Group for FY2012 and the pre-Invitation share capital of 702,400,000 Shares
147 times
Historical price earnings ratio based on the Invitation Price and the historical EPS
of our Group had the Service Agreements been in place from the beginning of
FY2012 and the pre-Invitation share capital of 702,400,000 Shares
156 times
Net Operating Cash Flow
(2)
per Share
Historical net operating cash ow per Share of our Group for FY2012 based on the
pre-Invitation share capital of 702,400,000 Shares
(0.23) cents
Historical net operating cash ow per Share of our Group for FY2012 (assuming
that the Service Agreements had been in place from the beginning of FY2012)
based on the pre-Invitation share capital of 702,400,000 Shares
(0.24) cents
35
INVITATION STATISTICS
Ratio of Invitation Price to historical net operating cash ow
Ratio of Invitation Price to historical net operating cash ow per Share based on
the pre-Invitation share capital of 702,400,000 Shares
Not meaningful
(3)
Ratio of Invitation Price to historical net operating cash ow per Share (assuming
that the Service Agreements had been in place from the beginning of FY2012)
based on the pre-Invitation share capital of 702,400,000 Shares
Not meaningful
(3)
Market Capitalisation
Market capitalisation based on the Invitation Price and the post-Invitation share
capital of 800,000,000 Shares
S$200 million
Notes:
(1) NAV is dened as total assets less total liabilities. Please see the section entitled Interim Condensed Combined Balance
Sheets as at 31 March 2013 of Appendix B entitled Unaudited Interim Condensed Combined Financial Statements for the
three months period ended 31 March 2013 to this Offer Document for more information.
(2) Net operating cash ow is dened as net cash ows generated from/ (used in) operating activities. Please see the section
entitled Combined Statements of Cash Flow for the nancial years ended 31 December 2010, 2011 and 2012 of Appendix
A entitled Audited Combined Financial Statements for the nancial years ended 31 December 2010, 2011 and 2012 to this
Offer Document for more information.
(3) Not meaningful as the Group recorded negative net operating cash ow for FY2012.
36
USE OF PROCEEDS
The net proceeds to be raised from the Invitation (comprising New Shares and Vendor Shares) will be
approximately S$27.5 million after deducting the remaining estimated expenses to be incurred and/ or
paid in relation to the Invitation of approximately S$3.0 million (which will be borne by the Vendors and
the Company). The total expenses in relation to the Invitation will be approximately S$5.7 million.
We will not receive any of the proceeds from the Vendor Shares sold by the Vendors in the Invitation. The
net proceeds attributable to the Vendors for the sale of Vendor Shares will be approximately S$5.9 million,
after deducting the Vendors share of the estimated expenses in relation to the Invitation of approximately
S$0.2 million.
The net proceeds to be raised by our Company from the issue of the New Shares will be approximately
S$21.6 million, after deducting our share of the estimated expenses in relation to the Invitation of
approximately S$2.8 million.
Save as disclosed in this Offer Document, none of the proceeds raised by our Company from the issue of
the New Shares will be used, directly or indirectly, to acquire or renance the acquisition of an asset other
than in the ordinary course of business or the acquisition of another business.
Save for the underwriting and placement commission and brokerage which will be borne by our Company
and the Vendors in the proportion in which the Invitation Shares are offered by each of them, the rest of
the expenses incurred in relation to the Invitation will be borne by our Company.
The intended allocation of proceeds raised by our Company from the issue of New Shares and estimated
expenses incurred in connection with the Invitation which are to be borne by us are set out below
(including GST, where applicable):
Use of Proceeds
Estimated amount
(S$000)
Amount allocated for each dollar
of proceeds raised by our
Company from the Invitation
(as a percentage of gross
proceeds)
Development and expansion of our Mining
Operations 8,500 34.8

Financing the balance of Phase 1 and Phase 2
of the Rebuilding Programme 11,499 47.1

Working capital 1,553 6.4

Net proceeds 21,552 88.3
Expenses
(1)

Listing fees 43 0.2

Professional fees 1,582 6.5

Underwriting commission, placement commission
and brokerage 770 3.1

Miscellaneous expenses 453 1.9

Total 24,400 100.0
Note:
(1) In accordance with the Singapore Financial Reporting Standards, a portion of the listing expenses incurred by our Company
in connection with the Invitation will be recognised as an expense in FY2013. This will have an effect on our nancial results
in FY2013.
37
USE OF PROCEEDS
Pending the deployment of the net proceeds as aforesaid, the net proceeds may be added to our working
capital, placed as deposits with banks or nancial institutions, or used for investment in short-term
deposits, money market or debt instruments, as our Directors may deem appropriate in their absolute
discretion.
The foregoing represents our best estimate of our allocation of our gross proceeds from the issue of
New Shares based on our current plans and estimates regarding our anticipated expenditures. Actual
expenditures may vary from these estimates, and we may nd it necessary or advisable to re-allocate
our net proceeds within the categories described above or to use portions of our net proceeds for
other purposes. In the event that the amount set aside to meet the estimated expenses listed above
is in excess of the actual expenses incurred, such excess amounts will be made available for our
working capital purposes. In the event that we decide to re-allocate our net proceeds from the issue of
New Shares for other purposes, we will publicly announce our intention to do so through a SGXNET
announcement to be posted on the internet at the SGX-ST website, http://www.sgx.com.
We will also announce on the SGXNET as and when the proceeds of the Invitation have been materially
disbursed, and provide a status report on the use of proceeds of the Invitation in the annual report(s) of
our Company.
38
MANAGEMENT, UNDERWRITING AND PLACEMENT ARRANGEMENTS
1. Pursuant to the Management and Underwriting Agreement entered into between our Company, the
Vendors and the Sponsor and Underwriter, our Company appointed UOB to sponsor and manage
the Invitation. UOB will receive a sponsorship and management fee from our Company for such
services rendered in connection with the Invitation.
Pursuant to the Management and Underwriting Agreement, UOB has agreed to underwrite the
Offer Shares for a commission of three per cent. (3%) of the Invitation Price for each Offer Share,
payable by our Company and each of the Vendors in the proportion in which the Offer Shares
offered by our Company and each of the Vendors bears to the aggregate number of Offer Shares
(the Agreed Proportion). UOB may, at its absolute discretion, appoint one (1) or more sub-
underwriters for the Offer Shares.
2. Pursuant to the Placement Agreement entered into between our Company, the Vendors and
Asiasons, as the Placement Agent, the Placement Agent has agreed to subscribe and/ or purchase
and/ or procure subscribers and/ or purchasers (as the case may be) for the Placement Shares for
a placement commission of three per cent. (3%) of the Invitation Price for each Placement Share
payable by our Company and each of the Vendors in the Agreed Proportion. The Placement Agent
may, at its absolute discretion, appoint one (1) or more sub-placement agents for the Placement
Shares.
3. For the Offer Shares, brokerage will be paid by our Company and each of the Vendors, in the
Agreed Proportion, to members of the Association of Banks in Singapore, members of the SGX-
ST and merchant banks, in respect of successful applications made on Application Forms bearing
their respective stamps, or to the Participating Banks in respect of successful applications made
through Electronic Applications, at the rate of 0.25% of the Invitation Price for each Offer Share, or
in the case of DBS Bank, 0.75% of the Invitation Price for each Offer Share. In addition, DBS Bank
levies a minimum fee of S$10,000 that will be payable by our Company and each of the Vendors
in the Agreed Proportion (and which will remain payable in the event the Invitation is terminated/
cancelled for any reason).
Subscribers and/ or purchasers of the Placement Shares may be required to pay brokerage of
one per cent. (1%) of the Invitation Price to the Placement Agent (or any sub-placement agent
appointed by the Placement Agent), as well as stamp duties and any other similar charges (subject
to any GST, where applicable).
4. The Management and Underwriting Agreement and the Placement Agreement may be terminated
or rescinded by the Sponsor and Underwriter and the Placement Agent respectively at any time on
or before the issue of the New Shares, on the occurrence of certain events including, inter alia:
(a) if there shall have come to the knowledge of the Sponsor or the Underwriter and/ or the
Placement Agent any breach of the obligations, representations, warranties or undertakings
in the Management and Underwriting Agreement and/ or the Placement Agreement (as the
case may be) or any of the said warranties is untrue or incorrect;
(b) if there shall have been:
(i) any material adverse change, or any development involving a prospective material
adverse change, in the business, trading position, operations, prospects or conditions
(nancial or otherwise), performance or general affairs of our Company or of our
Group as a whole; or
(ii) any introduction or prospective introduction of or any change or prospective change
in any legislation, regulation, order, policy, rule, guideline or directive (whether or not
having the force of law and including, without limitation, any directive or request issued
by the Authority, ACRA, the Securities Industry Council of Singapore or the SGX-
ST) in Singapore, the PRC or elsewhere or in the interpretation or application thereof
by any court, government body, regulatory authority or other competent authority in
Singapore, the PRC or elsewhere; or
39
MANAGEMENT, UNDERWRITING AND PLACEMENT ARRANGEMENTS
(iii) any change, or any development involving a prospective change, or any adverse
uctuation, in local, national, regional or international nancial (including stock market,
foreign exchange market, inter-bank market or interest rates or money market),
political, industrial, economic, legal or monetary conditions, taxation or exchange
controls (including, without limitation, the imposition or any moratorium, suspension
or restriction on trading in securities generally on the SGX-ST due to exceptional
nancial circumstances or otherwise); or
(iv) any imminent threat or occurrence of any local, national, regional or international
outbreak or escalation of hostilities, insurrection, terrorist attacks or armed conict
(whether or not involving nancial markets in any jurisdiction); or
(v) any regional or local outbreak of any infectious disease including any recurrence of
severe acute respiration syndrome or avian inuenza or any disease that may have an
adverse effect on the nancial markets; or
(vi) any other occurrence of any nature whatsoever,
which event or events shall in the reasonable opinion of the Sponsor and Underwriter and/
or the Placement Agent: (1) result or be likely to result in a material adverse uctuation
or adverse conditions in the stock market in Singapore or overseas, or (2) prejudice or be
reasonably likely to prejudice the success of the subscription, sale or offer of the Invitation
Shares (whether in the primary market or in respect of dealings in the secondary market), or
(3) make it impracticable, inadvisable, inexpedient or uncommercial to proceed with any of
the transactions contemplated under the Management and Underwriting Agreement and/ or
the Placement Agreement, or (4) be likely to have a material adverse effect on the business,
trading position, operations or prospects of our Company or of our Group as a whole, or
(5) be such that no reasonable underwriter or placement agent would have entered into the
Management and Underwriting Agreement and the Placement Agreement (as the case may
be), or (6) result or be likely to result in the issue of a Stop Order by the relevant authorities
or the SGX-ST acting as agent on behalf of the Authority pursuant to the SFA, SFR and
Catalist Rules, or (7) make it uncommercial or otherwise contrary to or outside the usual
commercial practices of underwriting or placement (as the case may be) in Singapore for
the Sponsor and Underwriter to observe or perform or be obliged to observe or perform
the terms of the Management and Underwriting Agreement, and for the Placement Agent
to observe or perform or be obliged to observe or perform the terms of the Placement
Agreement; or
(c) there shall come to the knowledge of the Sponsor and Underwriter and/ or the Placement
Agent any breach of the representations, warranties or undertakings by our Company
and/ or the Vendors in the Management and Underwriting Agreement and the Placement
Agreement (as the case may be) or that any of the warranties in the Management and
Underwriting Agreement and the Placement Agreement (as the case may be) is untrue or
incorrect; or
(d) there is a contravention by any of the Company or its subsidiaries or any of the Vendors
of the Catalist Rules or any applicable laws, rules, regulations and directives of any
relevant governmental, administrative or supervisory entities which have an adverse effect
on business, trading position, operations, prospects or condition (nancial or otherwise),
performance or general affairs of our Company or its subsidiaries or the performance of the
Management and Underwriting Agreement and the Placement Agreement (as the case may
be) or consummation of any of the transactions contemplated thereunder; or
(e) the issue of a Stop Order by the Authority, the SGX-ST acting as agent on behalf of the
Authority, or other competent authorities, in accordance with the SFA, SFR and/ or Catalist
Rules; or

(f) no replacement offer document is lodged following the issue of a Stop Order by the
Authority, the SGX-ST as agent acting on behalf of the Authority or other competent
authorities, in accordance with the SFA, SFR and/ or Catalist Rules; or
40
MANAGEMENT, UNDERWRITING AND PLACEMENT ARRANGEMENTS
(g) the issue of a ruling from the SGX-ST prohibiting the listing and quotation of all the issued
Shares on Catalist; or
(h) there is a material breach of any term or condition in the Management and Underwriting
Agreement and/ or the Placement Agreement by our Company or any of the Vendors; or
(i) any Director being charged with an offence and/ or becoming unable to participate in the
management of our Company; or
(j) without limiting the generality of the foregoing, if it comes to the notice of the Sponsor
and Underwriter and/ or the Placement Agent: (1) any statement contained in this Offer
Document or the Application Forms relating hereto which in the sole and absolute opinion
of the Sponsor and Underwriter and/ or the Placement Agent (as the case may be) has
become untrue, incorrect or misleading in any respect, or (2) circumstances or matters
have arisen or have been discovered, which would, if the Offer Document was to be issued
at that time, constitute in the sole and absolute opinion of the Sponsor and Underwriter
and/ or the Placement Agent (as the case may be), a material omission of information, and
the Company fails to lodge a supplementary or replacement offer document (as the case
may be) within a reasonable time after being notied of such material misrepresentation or
omission or fails to promptly take such steps as the Sponsor and Underwriter and/ or the
Placement Agent may require to inform investors of the lodgment of such supplementary
or replacement offer document. In such an event, the Sponsor and Underwriter and the
Placement Agent each reserves the right, at its absolute discretion to inform the SGX-ST
and the Authority and to cancel the Invitation, and any application monies received shall be
refunded (without interest or any share of revenue or other benet arising therefrom) to the
applicants for the Invitation Shares by ordinary post or telegraphic transfer or such other
means as the Sponsor and Underwriter and/ or the Placement Agent may deem appropriate
at the applicants own risk within 14 days of the termination of the Invitation; or
(k) the Placement Agent terminates or rescinds the Placement Agreement (in the case of the
Management and Underwriting Agreement), or the Sponsor and Underwriter terminates
or rescinds the Management and Underwriting Agreement (in the case of the Placement
Agreement).
5. In the event the Placement Agent receives valid applications and payment for less than 85% of
the Placement Shares by 12.00 noon on 2 October 2013 (or such later date and time as may
be decided by the Placement Agent), the Placement Agent shall have the right to terminate the
Placement Agreement (by notice in writing to the Company and the Vendors).
6. In the event the Management and Underwriting Agreement and/ or the Placement Agreement are
terminated or rescinded, our Company and the Vendors reserve the right, in our and their absolute
discretion, to cancel the Invitation.
7. The Invitation Shares may be reallocated between the Offer Shares and the Placement Shares as
may be agreed between the Sponsor and Underwriter and the Placement Agent.
8. All undertakings, warranties, covenants and indemnities under the Management and Underwriting
Agreement and the Placement Agreement made by the Company and the Vendors are made by
them jointly and severally in the Agreed Proportion.
9. Our Company has agreed with the Sponsor and Underwriter and the Placement Agent that we will
not, inter alia, issue, offer, sell, contract to sell, pledge or otherwise transfer or dispose of directly
or indirectly, (i) any new Shares, (ii) any securities convertible or exercisable or exchangeable for
or which carry rights to subscribe for or purchase any Shares, (iii) any equity or debt securities
(whether in the form of, or represented or evidenced by, bonds, notes, debentures, loan stock or
otherwise), or (iv) any options, rights or warrants in respect of any Shares (other than pursuant
to the AsiaPhos Performance Share Plan), in each case, without the prior written consent of the
Sponsor and Underwriter and the Placement Agent, for a period of six (6) months from the date of
admission of our Company to the SGX-ST.
41
RISK FACTORS
An investment in our Shares involves risks. You should carefully consider and evaluate each of the
following considerations and all of the other information set forth in this Offer Document before deciding
to invest in our Shares. The following describes some of the signicant risks known to us now that could
directly or indirectly affect us and any investments in, or the value or trading price of, our Shares. The
following does not state risks unknown to us now but which could occur in future and risks which we
currently believe to be immaterial, which could turn out to be material. Should such risks occur or turn out
to be material, they could materially and adversely affect our business operations, results of operations,
nancial condition, cash ow, protability and performance, prospects or results (collectively referred to as
Business in this section).
Some of the following risk factors and considerations relate principally to the industry in which we
operate and our business in general. Other risk factors and considerations relate principally to general
social, economic, political and regulatory conditions, the securities market and ownership of our Shares,
including possible future dilution in the value of our Shares. Headings are for ease of reference only and
do not affect the interpretation or extent of considerations set forth in this Offer Document.
If any of the following considerations, risks and uncertainties develops into actual events, our Business
and any investment in our Shares could be, directly or indirectly, materially and adversely affected. In
such event, the trading price of our Shares could decline due to any of these considerations, and you
may lose all or part of your investment. You should consider the information below in connection with
the forward-looking statements in this Offer Document and you should also note the warning regarding
forward-looking statements under the section entitled Cautionary Notes Regarding Forward-Looking
Statements of this Offer Document.
Before deciding to invest in our Shares, you should seek professional advice from your advisers regarding
your particular circumstances.
RISKS RELATING TO OUR BUSINESS
We are subject to natural disasters in the areas where our Mining Operations and Chemical
Production Operations are situated
Natural disasters such as earthquakes, oods, landslides and mudslides could severely hamper our
Mining Operations and Chemical Production Operations, which are located in west-central Sichuan
Province in the PRC. According to the WGM Technical Report, our Mining Operations and Chemical
Production Operations are located at an active earthquake belt, where minor shocks have frequently
occurred. More than ten (10) earthquakes affecting the region have been recorded, and it is expected that
earthquakes will recur in future.
For example, our Mining Operations and Chemical Production Operations were substantially affected by
the Wenchuan Earthquake. Access roads leading to our Mines were obstructed and part of our Previous
Hanwang Facilities was irreparably damaged as a result of the Wenchuan Earthquake, and we also
experienced fatalities and casualties among our mining personnel. In the aftermath of the Wenchuan
Earthquake, we also experienced subsequent landslides (including a major landslide in 2010) which
blocked the access roads to our Mines.
On 20 April 2013, the south-western part of Sichuan Province, PRC was struck by an earthquake which
measured 7.0 on the Richter magnitude scale (the Lushan Earthquake). The Lushan Earthquake and
the subsequent aftershocks caused loss of lives, power outages, landslides and business shut-downs.
The Lushan Earthquake occurred more than 250 km away from our Mining Operations and Chemical
Production Operations. None of our workers were hurt and we did not suffer any property damage. In July
2013, Sichuan Province, the PRC, experienced heavy rainfall which resulted in ooding, possible loss of
lives and damage to property and transport infrastructure (certain bridges facilitating access to the New
Gongxing Site were damaged). As part of our safety policy, our Mining Operations are halted during the
rainy season, which typically lasts from early July to the end of August. As a result, we are unable to
assess the extent to which our Mining Operations have been or may be affected by the ooding resulting
from such heavy rainfall.
42
RISK FACTORS
Our vulnerability to natural disasters is exacerbated by the fact that our Mines are situated within
approximately 8 km of each other in Mianzhu City, Sichuan Province, the PRC, and rely on the same
transportation infrastructure. Given their physical proximity, the occurrence of a natural disaster, such as
the Wenchuan Earthquake, could substantially affect our Mines and accordingly our Business.
In the event of such natural disasters, our Mining Operations and Chemical Production Operations may
be substantially affected or suspended altogether and injuries or casualties may occur. In addition,
operating costs may increase as a result of equipment and facility damage, power outages, personnel
evacuation and other similar events. Delivery of phosphate rocks to our New Gongxing Facilities and
customers may also be disrupted. In addition, such disruptions may cause us to purchase phosphate
rocks from other suppliers which may be more costly and/ or of inferior quality, thereby resulting in higher
operating costs for our Chemical Production Operations. We may also continue to incur xed operating
expenses while our Mining Operations and/ or Chemical Production Operations have slowed down or
ceased altogether. As such, any disruptions, delays or suspensions of our Mining Operations and
Chemical Production Operations as a result of natural disasters or other events beyond our control will
have a material adverse effect on our Business. Furthermore, the occurrence of a natural disaster within
the proximity of our Mines and/ or the fact that we are vulnerable to natural disasters may affect our ability
to obtain external nancing on a timely basis, on terms acceptable to us, or at all. In the event that any of
the above-mentioned events occur, our Business may be materially and adversely affected.
Our Mining Operations and Chemical Production Operations are subject to seasonal disruptions
Our Mining Operations and Chemical Production Operations are subject to various seasonal events and
operating conditions, such as inclement weather.
As part of our safety policy, our Mining Operations are halted annually during (i) the winter season, which
typically lasts from mid-December to mid-March; and (ii) the rainy season, which typically lasts from
early July to the end of August. Barring unforeseen circumstances, we undertake Mining Operations for
about seven (7) months per year on a daily basis, subject to, inter alia, holidays, weather conditions and
equipment maintenance.
During the low-water periods, which typically last from mid-November to mid-April, our electricity
costs increase and we may not produce P
4
, which requires high levels of electricity, unless justied by
sufciently high market prices of P
4
. In the event that such costs cannot be effectively passed on to our
customers, our Business may be adversely affected.
Although we maintain buffer stocks of phosphate rocks and P
4
, in the event that our Group experiences a
surge in demand for phosphate rocks or phosphate-based chemical products during the non-mining and
non-production periods, we may not be able to cope with the increase in demand, which may materially
and adversely affect our Business.
In the event that the winter season, rainy season or low-water periods are prolonged, our Business may
be materially and adversely affected.
Furthermore, due to this seasonality, our nancial performance in one nancial quarter may not be
indicative of our nancial performance for the subsequent or corresponding nancial quarter(s) in the
previous nancial year.
We are required to obtain and/ or renew certain approvals, licences, authorisations and permits
for our Mining Operations and Chemical Production Operations
Land occupied by our Mines
As at the Latest Practicable Date, we have obtained approval from the Deyang Forestry Bureau for the
forestry land occupied by our Mines. Such approval is described as relating to temporary occupation
of forestry land, and is valid from 24 August 2012 to 31 July 2014. Since occupying the forestry land in
2002, we have not experienced any issues in renewing the approval. However, in the event that we are
unable to renew the approval on a timely basis or at all, we may be required to vacate the forestry land
occupied by our Mines, be subject to certain nes or penalties and/ or required to restore such forestry
land to its original condition within a prescribed time limit.
43
RISK FACTORS
As at the Latest Practicable Date, to the best of our knowledge, the Mianzhu Land Bureau does not
issue land use rights certicates for the land occupied by our Mines, or the land occupied by other mines
situated in the vicinity of our Mines. Mianzhu Land Bureau issued a letter dated 16 February 2012 to
Mianzhu Norwest stating, inter alia, that since incorporation, Mianzhu Norwest has been in compliance
with relevant PRC state and local land laws, rules and regulations. As at 16 February 2012, we occupied
1.7665 hectares of forestry land for our Mines. As at the Latest Practicable Date, we occupied 2.4564
hectares of forestry land for our Mines.
In the event that we are required to obtain such land use rights certicates, retrospectively or otherwise,
and are unable to do so on a timely basis, on conditions acceptable to us, or at all, we may be required to
vacate the land occupied by our Mines, and/ or be subject to certain nes or penalties.

Mining Operations for Mine 2
As at the Latest Practicable Date, we are engaged in Trial Mining Operations at Mine 2, pursuant to the
Trial Mining Notications. Mianzhu Norwest has submitted its application for the (safety
production permit) for its Mining Operations (the Mining Safety Production Permit) for Mine 2 in June
2013. We will be able to carry out Commercial Mining Operations for Mine 2 after we receive the Mining
Safety Production Permit for Mine 2. In the event that the Mining Safety Production Permit for Mine 2
is not granted by the relevant authorities on a timely basis, on conditions acceptable to us, or at all, we
will be unable to commence our Commercial Mining Operations at Mine 2. Further, to the best of our
knowledge, the Trial Mining Notications were issued to assist us in resuming mining operations after the
Wenchuan Earthquake, and in the event that such Trial Mining Notications are subsequently withdrawn
before we obtain the Mining Safety Production Permit for Mine 2, we may be required to cease our Trial
Mining Operations.
Chemical Production Operations at the New Gongxing Site, Phase 1 Land
As at the Latest Practicable Date, we have obtained the land use rights certicate, the necessary
approvals required for our Trial Chemical Production Operations and certain construction permits for
Phase 1 of our Rebuilding Programme. In order to achieve legal completion for Phase 1 of the Rebuilding
Programme, we will also need to obtain Phase 1 Completion Approvals (as dened under the section
entitled General Information on our Group Legal Opinion from King & Wood Mallesons of the Offer
Document). There can be no assurance that we will be able to obtain any or all of these approvals on a
timely basis, on conditions acceptable to us, or at all.
Further, we will need to obtain, inter alia, (i) the (safety production permits) for Chemical
Production Operations (the Chemical Safety Production Permit); (ii) the (pollution
discharge permit) (the Pollution Discharge Permit); (iii) the (hazardous
chemicals business licence); (iv) the (hazardous chemicals registration certicate);
(v) the (licence for the manufacturing of industrial products); (vi) the
(environmental management registration licence for the production and use
of dangerous chemicals); and (vii) the (building ownership rights certicate) in order to
commence Commercial Chemical Production Operations at our Phase 1 facilities, and if we are unable to
do so on a timely basis, on conditions acceptable to us, or at all, this may materially and adversely affect
our Business.
Chemical Production Operations at the New Gongxing Site, Phase 2 Land
As at the Latest Practicable Date, although we have signed a letter of intent with the Mianzhu
Resettlement Ofce and paid a partial deposit of RMB 8 million in respect of Phase 2 Land, the
Mianzhu Land Bureau has yet to conduct the (bid invitation), or the (auction or
quotation process), and we have not obtained the relevant land use rights. Currently Mianzhu Norwest
has temporarily relocated certain of the equipment, machinery and storage facilities from the Previous
Hanwang Facilities to Phase 2 Land, and has also conducted some nal-stage STPP processing. Under
the relevant PRC laws, we are not allowed to occupy or use land or construct any buildings on Phase
2 Land without proper approvals and/ or permits from the competent authorities, and in the event that
we are unable to obtain such land use rights on a timely basis, on conditions acceptable to us, or at all,
44
RISK FACTORS
we may be required to (i) cease any processing and/ or Chemical Production Operations; (ii) remove
any equipment and machinery; (iii) vacate and return the Phase 2 Land; (iv) demolish any buildings
or installations within a certain time limit, and conduct restoration works; (v) have our buildings and
installations conscated; and/ or (vi) pay certain nes or penalties.
Further, in order to commence Trial Chemical Production Operations and subsequently, Commercial
Chemical Production Operations at our facilities on Phase 2 Land, we will be required to obtain, inter alia,
the (environmental trial production approval), the (record of safety
test run plan), the Chemical Safety Production Permit, and the Pollution Discharge Permit. If we are
unable to obtain such permits, certications and/ or licences on a timely basis, on conditions acceptable
to us, or at all, this may materially and adversely affect our Business.
In addition, changes in legislation and regulations or changes in the interpretation or implementation of
the relevant legislation and regulations could also result in consequences which would materially and
adversely affect our Business.
Please refer to the sections entitled General Information on our Group - Properties and Fixed Assets,
General Information on our Group - Permits, Licences, Approvals and Government Regulations and
General Information on our Group - Legal Opinion from King & Wood Mallesons of this Offer Document
for more details of the permits, licences and approvals that we have obtained and may be required to
obtain for our business and operations.
We are dependent on the availability of reliable transport access for our phosphate rocks and
phosphate-based chemical products
We depend on reliable transport access for the delivery of our (i) phosphate rocks from our Mines to our
processing facilities; and (ii) phosphate-based chemical products to our customers from our processing
facilities. We plan to increase production capacity and sales of phosphate rocks and phosphate-based
chemical products. This increase in production will lead to an increase in the utilisation of the access
roads leading to our Mines, and the paved roads and provincial highways connecting the New Gongxing
Facilities and our customers. If we or the relevant authorities are unable to maintain the condition of
these roadways in a timely manner, or any of these roadways are signicantly damaged or cut off for an
extended period of time for reasons beyond our control such as vehicle breakdowns, oods, landslides
or mudslides, the delivery of our phosphate rocks and phosphate-based chemical products would be
adversely affected.
The proposed Mian Mao Highway, which is expected to increase accessibility between our Mines and
the New Gongxing Site once it is completed, has been under construction since September 2009 and
is expected to be completed around 2015/2016. Construction of the proposed Mian Mao Highway (the
Construction Works) may cause blockages or obstruction, for temporary or extended periods, to the
road transportation networks that link our Mines to the New Gongxing Facilities and to our customers.
For example, in late March 2013, certain segments of the roads used by Mianzhu Norwest had to be
closed for part of the day for two (2) weeks for the Construction Works. Our Mining Operations were
minimally impacted as we were able to reschedule our workers work plan and did not make use of the
roads during those periods of closure. However, there is no certainty that any future road closure(s) to
facilitate the Construction Works will not signicantly impact the roads used by Mianzhu Norwest.
In such event, if we are unable to utilise any alternative transport methods or transportation networks to
deliver our phosphate rocks, our operations will be substantially affected or disrupted and this may have
an adverse effect on our Business.
In addition, as transportation costs and timeliness of delivery are important considerations to our
customers, any material increase in transportation costs or delays in delivery may have an adverse effect
on our Business.
45
RISK FACTORS
Our revenue and/ or protability achieved in a nancial year or period is not an accurate indicator
of our revenue and/ or protability that may be achieved in a subsequent nancial year or period
Our revenue and/ or protability in a given nancial year or period is dependent on various factors such
as, inter alia, the availability of our resources, seasonality of our operations, market sentiment, market
competition and general economic conditions. In addition, our revenue and/ or protability may also be
adversely affected by disruptions to our Mining Operations and/ or Chemical Production Operations
due to natural disasters, adverse weather conditions and other unforeseen difculties. In particular,
our operations were substantially halted after the Wenchuan Earthquake and without the government
subsidies and compensation pursuant to the Relocation Exercise, our protability in FY2011 would have
been lower and we would have recorded a loss in FY2012.
We have yet to commence Commercial Chemical Production Operations at the New Gongxing Facilities.
In addition, the New Gongxing Facilities are being built to different specications than the Previous
Hanwang Facilities. Accordingly, our revenue, cost of sales, and other costs relating to the operation
and maintenance of the New Gongxing Facilities, once operational, will be different from that of the
Previous Hanwang Facilities. The revenue and costs associated with the production of phosphate-based
chemical products at the Previous Hanwang Facilities for the Period Under Review cannot be taken as
an indication of the revenue and costs which will be associated with the production of phosphate-based
chemical products at the New Gongxing Facilities, once it commences operations.
In view of the foregoing, the historical nancial performance and nancial position of our Group for
FY2010, FY2011, FY2012 and FP2013 may not be indicative of our future nancial performance and
nancial position.

We have experienced negative cash ow and negative working capital
We recorded negative net cash ow from operating activities of S$0.2 million, S$1.6 million and
S$1.5 million in FY2011, FY2012 and FP2013 respectively. In FY2010, we commenced the recovery
stage of our Mining Operations and sold our initial phosphate rocks in late FY2010. In FY2011, we
also accumulated phosphate rocks from our Mines in anticipation of the temporary cessation of Mining
Operations during the winter season. The negative net cash ow from operating activities in FY2011 was
mainly due to an increase in stock and receivables as well as decrease in payables. Our Group also
accumulated phosphate-based chemical products produced by our Previous Hanwang Facilities in order
to continue supplying to certain customers after the Relocation Exercise in FY2012. In FP2013, in view
of the expected commencement of production of P
4
, our Group selected better quality phosphate rocks to
be kept as inventory for subsequent use in its P
4
production and sold the lower quality phosphate rocks
which generally fetch lower prices. The negative net cash ow from operating activities in FY2012 and
FP2013 was mainly due to repayments by our Group and increase in advances to suppliers and other
prepayments. The shortfall in cash ow for FY2011, FY2012 and FP2013 was nanced mainly through
loans and capital injections from Eastcomm.
We recorded negative working capital positions of S$3.0 million, S$3.7 million, S$1.9 million and S$0.06
million as at 31 December 2010, 2011, and 2012, and 31 March 2013 respectively. The negative working
capital positions as at 31 December 2010, 2011 and 2012, and 31 March 2013 were mainly due to the
capital expenditure in connection with the Rebuilding Programme. The capital expenditure was nanced
by loans and capital injections from Eastcomm.
For more details, please refer to the section entitled Managements Discussion and Analysis of Results
of Operations and Financial Position - Liquidity and Capital Resources of this Offer Document.
If we are unable to obtain sources of funds on a timely basis, on conditions acceptable to us, to address
our negative net cash ow from operating activities and/ or working capital shortfall, our Business may be
adversely affected.
As we continue to expand and grow our business and operations, there can be no assurance that we will
not experience negative net cash ow from operating activities and/ or negative working capital positions
in the future.

46
RISK FACTORS
The prices of our phosphate rocks and phosphate-based chemical products may experience
signicant uctuations due to, inter alia, factors beyond our control
Our Business is dependent on, inter alia, the prices of our phosphate rocks and phosphate-based
chemical products, which are in turn affected by market forces of demand and supply, as well as
numerous other factors that are beyond our control and are inherently unpredictable.
For instance, the demand for phosphate rocks and phosphate-based chemical products may be adversely
affected by global economic downturns, prices of commodities, expectations with respect to the rate of
ination, exchange rates, increases of supply by competitors, alternative product development, global
and regional political and economic conditions and governmental policies with respect to the use and/ or
import and export of phosphate and its related products.
Supply of phosphate rocks and phosphate-based chemical products may be affected by the capacities
of current mines and rising market prices of phosphate to a level that may encourage additional capital
expenditure to expand production capacity.
The occurrence of any of these factors may affect demand and/ or supply, and the prices of our
phosphate rocks and phosphate-based chemical products may uctuate. This may in turn result in an
adverse effect on our Business.
We are subject to changes in applicable government policies governing the industries to which
we supply our phosphate rocks and phosphate-based chemical products
We may be affected by government policies affecting industries to which we supply our phosphate rocks
and phosphate-based chemical products. Government policies may be implemented to impose price
restrictions or export duties in order to preserve domestic supply in the industries to which we supply our
phosphate rocks and phosphate-based chemical products. Additionally, certain countries have imposed
bans and/ or limits on the use of phosphate-based chemicals in detergents in the past years. Certain
countries are also now considering whether to extend bans and/ or limits to encompass industrial and
institutional use of detergents and to further reduce phosphate levels in soap for dishwashers.
A change in or tightening of applicable government policies governing the industries to which we supply
our phosphate rocks and phosphate-based chemical products could have an adverse effect on our
Business.
Currently, our Groups sale of phosphate rocks is conned to the PRC, as we do not possess the relevant
licence required by the PRC government to sell phosphate rocks overseas.
An example of an industry that may be susceptible to the imposition of government policies is the
domestic market for fertilisers in the PRC. Demand for and prices of fertilisers in the PRC, which is
generally produced using phosphate rocks as one of its key raw materials, have historically been
inuenced by export duties imposed by the PRC government on certain fertilisers to preserve domestic
supply. Any export duties imposed by the relevant authorities could exert pressure on producers of
fertilisers to minimise production quantities, thereby depressing the purchase price of phosphates at
which these producers are willing to pay. As phosphate rocks are mainly used for production of fertiliser
and feed, the imposition of such government policies in the PRC market for fertilisers may depress the
prices at which we are able to sell our phosphate rocks, thereby adversely affecting our Business.
We are dependent on our ability to obtain, maintain and/ or renew licences, permits and approvals
from the relevant PRC government authorities in relation to our Mining Operations, exploration
activities and Chemical Production Operations
Under the (Mineral Resources Law of the PRC), all mineral resources in
the PRC are owned by the State. We require certain licences, permits and approvals from the relevant
PRC authorities and regional governments to carry out our Mining Operations, exploration activities and
Chemical Production Operations in the PRC. These licences, permits and approvals are also limited to
specied areas and time periods and govern our mining, exploration and chemical production activities,
including our ability to deal with the phosphate rocks extracted from our mining and exploration sites.
Our ability to carry on our Mining Operations, exploration activities and Chemical Production Operations
47
RISK FACTORS
is therefore subject to our adherence to and/ or interpretation of any conditions imposed under such
licences, permits or approvals, and/ or our ability to obtain, maintain and/ or renew, as the case may be,
such licences, permits and approvals from the relevant PRC government authorities in a timely manner.
For further details, please refer to the section entitled General Information on our Group - Permits,
Licences, Approvals and Government Regulations of this Offer Document.
The application process for such licences, permits and approvals may be complex, due to the various
levels of PRC government that may need to be involved. There can be no assurance that we will be able
to obtain, maintain and/ or renew our licences, permits or approvals in a timely manner, if at all, or that
such licences, permits and approvals will not be subsequently revoked by the relevant PRC authorities.
We may also be required to obtain additional licences, permits and approvals pursuant to new PRC laws
and regulations that may be promulgated in the future. Failure to obtain, maintain and/ or renew such
licences, permits and approvals may cause us to delay or halt our production or expansion plans, thereby
adversely affecting our Business. In particular, in the event that we identify prospective mine resources
for acquisition in the future, there can be no assurance that mining rights can be successfully obtained.
There can also be no assurance that the interpretation of conditions imposed under such licences,
permits or approvals will remain unchanged, and any such changes may adversely impact our Business.
We may not be able to operate efciently and effectively in the event that we lose key personnel
and/ or we are unable to attract and retain skilled workers
The responsibility of managing the strategic and operational aspects of our Group depends substantially
on a number of our key personnel and skilled workers. We face keen competition in the recruitment and/
or retention of these key personnel and skilled workers.
We have an experienced management team with relevant experience in their respective areas of
expertise, in particular our CEO and Executive Director, Dr. Ong Hian Eng, our Executive Director, Simon
Ong, and our Key Executive, Wang Xuebo, who are each responsible for, inter alia, overseeing the
strategic growth and managing the day-to-day operations of our Group. The loss of the services of any of
our key personnel without suitable timely replacements may adversely affect our Business.
In addition, we expect to require more skilled engineers, technicians, chemical experts, mining workers
and operators of specialised equipment with the expansion of our Mining Operations and Chemical
Production Operations. A shortage of such skilled labour may lead to increases in labour costs and in the
event that we are unable to pass on any such increases in labour costs to our customers, our Business
may be adversely affected.
There can be no assurance that our key personnel and skilled workers will continue to be employed
by us, and/ or that we will be able to attract and retain key personnel or skilled workers in the future.
Any inability by us to attract, recruit and train skilled workers and/ or retain key personnel and/ or skilled
workers could materially and adversely affect our Business.
We may not be adequately insured against our operational risks
We face various risks in connection with our operations. While we have taken up social insurance and
commercial insurance coverage including coverage for our mining workers and our key equipment,
we cannot assure you that such insurance coverage is sufcient to insure us against all of the types
of business risks and hazards we may face, such as loss of key personnel, business interruption and
third party liability insurance against claims for environmental disaster, property damage, personal injury
and environmental liabilities. We have limited insurance coverage in relation to the occurrence of natural
disasters or acts of God. Any losses and liabilities for which we are not insured or our insurance coverage
is inadequate to cover the entire liability may have an adverse effect on our Business.
48
RISK FACTORS
While we have implemented various safety policies and adopted safety measures, we cannot assure you
that the safety policies and measures we have in place for our operations will be sufcient to mitigate
or reduce industrial accidents. We also cannot assure you that casualties or accidents will not occur or
that our insurance coverage would be sufcient to cover costs associated with major accidents. Also, we
cannot predict the continued availability of insurance coverage at premium levels that are acceptable to
us, or at all. In the event that we incur substantial losses or liabilities and our insurance does not cover
such losses or liabilities adequately or at all, our Business may be adversely affected.
Please refer to the section entitled General Information on our Group - Insurance of this Offer Document
for further details.
We may be subject to increases in our operating costs
Mining costs generally increase over the lifespan of a mine. In addition, labour, diesel, raw materials and
utilities costs in the PRC have been increasing in recent years and are generally expected to increase
further. Due to our dependence on the supply of labour and electricity for our Chemical Production
Operations, we are sensitive to any increase in labour and other costs and prices of utilities and raw
materials. Expansion of our production capacity, sales and existing network of customers in the PRC and
other countries will also increase the overall operating costs of our Group.
Labour costs in the PRC have also been increasing due to, inter alia, changes in applicable PRC labour
laws. In June 2007, the National Peoples Congress of the PRC enacted the Labour Contract Law
which became effective on 1 January 2008 (and was subsequently amended on 28 December 2012).
The Labour Contract Law formalised workers rights concerning overtime hours, pensions, layoffs,
employment contracts and the role of trade unions. The Labour Contract Law also imposes comparatively
greater liabilities on employers which will increase the cost of an employers decision to reduce its
workforce. In addition, we face increased hiring costs of our workers due to demand for workers from our
competitors.
Our protability may be affected in the future due to any potential or unforeseen increase in our operating
costs, such as new or additional tax levies. If our operating costs increase and we cannot increase our
production efciency to offset any such increase or pass any such increase on to our customers, our
Business may be adversely affected.
Our future growth will depend on our ability to manage our expansion plans
The business strategies and future plans of our Group include (i) further Mining Operations and
exploration activities to increase phosphorite resources and output; (ii) adopting a vertically-integrated
strategy; (iii) rebuilding, enhancing and increasing the capacity of our Chemical Production Operations;
(iv) increasing our portfolio of phosphate-based chemical products; and (v) expanding through
acquisitions, joint ventures and strategic alliances. Please see the section entitled General Information on
Our Group Business Strategies and Future Plans of this Offer Document for further details.
There can be no guarantee that the implementation and execution of such business strategies and future
plans will be successful as these (i) involve a number of risks and uncertainties; (ii) are subject to the
then-prevailing economic conditions being conducive for such strategies to be in place; (iii) are dependent
on approvals from governmental and regulatory authorities; (iv) are dependent on our ability to secure
sufcient external funding for capital and other nancial requirements; and/ or (v) are based on our ability
to attract relevant qualied persons to support our business growth.
In the event that the revenue generated by our future plans is lower than expected, the costs associated
with such plans are higher than expected, we are unable to secure sufcient external funding, unable
to attract relevant qualied persons to support the requirements of our increased scale of operations,
and/ or the commencement of these planned expansions is delayed or aborted, we may be unable to
recoup our investment and/ or may suffer losses. As a result, our Business may be adversely affected.
49
RISK FACTORS
We are exposed to the creditworthiness of our customers
Our performance is dependent on the creditworthiness of our customers. Material default in payment
by our major customers may adversely affect our nancial performance and cash ow. We are unable
to assure you that there will be no risk of default by our customers in the future, or that we will not
experience cash ow problems as a result of such default. Should these events occur, our Business may
be adversely affected.
We face intense competition from our competitors
We face competition from both domestic and foreign competitors who are also engaged in similar
businesses. Certain competitors may have access to more resources, be better-positioned to pursue new
expansion and development opportunities, and/ or possess competitive advantages, including control
over or access to low-cost raw materials, access to low-cost credit, geographical proximity to suppliers or
customers and relationships with global market participants. These competitors may also compete with us
for skilled labour required for our Mining Operations and Chemical Production Operations.
In the event that we are not able to compete effectively against our competitors, both the sales and the
pricing of our products may be adversely affected, which in turn may have an adverse effect on our
Business.
We may not be able to successfully implement our capital expenditure programme
Our Mining Operations and Chemical Production Operations are capital-intensive businesses. We have
in the past funded and may continue to fund our capital expenditure programme primarily through, inter
alia, cash ow from operations, equity injections, shareholder borrowings and short-term bank loans.
However, we may not be able to generate adequate cash ow from our current operations and external
funding may not be available at the level required by our Group, on a timely basis, on terms acceptable
to us, or at all. In the event that we are unable to nance planned capital expenditures, or nance such
expenditures on terms acceptable to us, some or all the projects in our pipeline may not be implemented
according to schedule, or at all. There can also be no assurance that we will be able to obtain, renew
or maintain the requisite licences, permits and/ or approvals for our Rebuilding Programme, on a timely
basis, or at all. Our growth may be constrained, expected efciency gains from the construction of new
facilities may not be achieved and any growth prospects based on the assumption that these projects
complete may not materialise. If any of the above-mentioned events occur, our Business may be
adversely affected.
In addition, we may face difculties in hiring suitably qualied personnel to carry out the implementation
of our capital expenditure projects. We may also face uncertainties in the implementation of our capital
expenditure programme such as non-completion, cost overruns and defects in design or construction,
which may result in additional investments being required. Further, we may rely on third party contractors
for the implementation of our capital expenditure programme. In the event that such third party
contractors cease operations without giving us prompt notice, we could incur costs and experience delays
if we are unable to nd a suitable replacement promptly.
As at the Latest Practicable Date, we have completed the construction of the P
4
Plant at the New
Gongxing Site under Phase 1 of the Rebuilding Programme, and are in the preliminary stages of Phase
2 of the Rebuilding Programme. Please refer to the section entitled General Information on our Group
Business Overview of this Offer Document for further details. If any or all of the major projects that
constitute our capital expenditure programme are not implemented according to schedule or at all, the
efciency gains from the New Gongxing Facilities may not be achieved and any growth prospects based
on the assumptions that the projects are completed may not materialise. There also can be no assurance
that management estimates of efciency gains will be realised and/ or achieved, if at all. New operations
may be prone to unexpected problems during the initial development phase. Such occurrences could
result in damage to properties or processing facilities, interruptions in production, injury or casualties,
monetary losses and legal liabilities. In such an event, our Business may be adversely affected.
We will need to obtain further nancing for our future growth
We will have to fund the capital expenditure and operating costs required for our Mining Operations. We
may also require additional funding for our growth plans. We have estimated our funding requirements in
order to implement our growth plans as set out in the section entitled General Information on our Group
Business Strategies and Future Plans of this Offer Document.
50
RISK FACTORS
In the event that the costs of implementing our growth plans should exceed our funding estimates
signicantly or that we come across opportunities to grow through expansion plans which cannot
be predicted at this juncture, and our funds generated from our operations prove insufcient for such
purposes, we may need to raise additional funds to meet these funding requirements. We will consider
obtaining such funding from new issuance of equity, debt instruments and/ or external bank borrowings,
as appropriate. In addition, we may need to obtain additional equity or debt nancing for other business
opportunities that our Group deems favourable to our future growth and prospects. Funding through the
new issuance of equity will lead to a dilution in the interests of our Shareholders. An increase in debt
nancing may be accompanied by conditions that restrict our ability to pay dividends or require us to seek
lenders consent for payment of dividends, or restrict our freedom to operate our business by requiring
lenders consent for certain corporate actions. In addition, there is no assurance that we will be able to
obtain additional nancing on terms that are favourable and acceptable to us, or at all. If we are not able
to secure adequate nancing on a timely basis or at all, our Business may be adversely affected.
We may incur impairment losses related to operating assets, which may adversely affect our
nancial performance
In accordance with our accounting policy, the carrying amount of our operating assets, including property,
plant and equipment and Mines, are reviewed for impairment when events or changes in circumstances
indicate that the carrying amount may not be recoverable. Estimating the value in use requires us to
estimate cash ows from the cash-generating units and to choose a suitable discount rate in order to
calculate the present value of those cash ows. Any material decrease in the amount of our projected
cash ows may result in impairment on the carrying value of property, plant and equipment and Mines,
which may adversely affect our nancial performance.
Terrorist attacks, armed conicts, and/ or outbreak of Severe Acute Respiratory Syndrome
(SARS), avian inuenza, H1N1, H7N9 and/ or other communicable diseases, may affect the
markets in which we operate and our business and operations
The effects of terrorist attacks or armed conicts may materially and adversely affect our Business or
those of our suppliers or customers. Such terrorist attacks or armed conicts could have an adverse
impact on the demand for our products and our ability to deliver products to our customers in a timely
and cost-effective manner, which in turn could have an adverse impact on our Business. Political and
economic instability in some regions of the world may also result from such terrorist attacks and armed
conicts, and could negatively impact our Business. The consequences of any of these terrorist attacks or
armed conicts are unpredictable, and we are not able to foresee such events that could have an adverse
impact on our Business.
An outbreak of contagious disease may have an adverse effect on the economies of certain Asian
countries and may materially and adversely affect our Business.
For example, in the rst half of 2003, certain countries in Asia experienced an outbreak of SARS, a highly
contagious form of atypical pneumonia. In 2009, there was a global outbreak of a new strain of inuenza
A virus sub-type H1N1. In the last few years, large parts of Asia experienced unprecedented outbreaks
of avian u. In 2013, a deadly strain of inuenza A virus sub-type H7N9 was reported in the PRC. These
infectious diseases seriously interrupted economic activities and general demand for goods plummeted in
the affected regions.
There can be no assurance that an outbreak of SARS, avian u, H1N1, H7N9 or other contagious
diseases, or the measures taken by the governments of affected countries against such potential
outbreaks, will not seriously interrupt our operations or those of our contractors, suppliers and/ or
customers. This, in turn, may have a material adverse effect on our Business. The perception that there
may be a recurrence of an outbreak of SARS, avian u, H1N1, H7N9 or other contagious diseases
may also have an adverse effect on the economic conditions of countries in Asia and accordingly, our
Business.
51
RISK FACTORS
Our Business may be adversely affected by recent developments in the global markets
Since the global economic downturn in late 2008, there have been negative developments in the global
nancial markets including the downgrading by major international credit rating agencies of sovereign
debts issued by some of the European Union member countries and the difcult conditions in the global
credit and capital markets. These challenging market conditions have given rise to reduced liquidity,
greater volatility, widening of credit spreads, lack of price transparency in credit markets, a reduction in
available nancing, government intervention and lack of market condence. These factors, combined with
declining business and consumer condence, have resulted in global economic uncertainties.
It is difcult to predict how long these developments will last. Further, there can be no assurance that
measures implemented by governments around the world to stabilise the credit and capital markets will
improve market condence and the overall credit environment and economy. A global economic downturn
could adversely affect our ability to obtain short-term and long-term nancing. It could also result in an
increase in the cost of our bank borrowings and reduction in the amount of banking facilities currently
available to us. The inability of our Group to access capital efciently, on time, or at all, as a result of
possible economic difculties, may have an adverse effect on our Business. Any deterioration in the
global economy could in turn adversely affect the health of the local economy and impact our Business.
In the event that the global economic conditions do not improve or any recovery is halted or reversed, our
Business may be adversely affected.
RISKS RELATING SPECIFICALLY TO OUR MINING OPERATIONS
We are materially dependent on our Mines for our Mining Operations
We expect our Mines to be our only operating mines in the near term and on which we will depend
substantially for our operating revenue and cash flow, and to support our Chemical Production
Operations. Any signicant operational or other difculties in the mining, processing or transport of
phosphate rocks from our Mines to the New Gongxing Facilities or to our customers may hinder our sales
and production of our phosphate rock and phosphate-based chemical products. In particular, we may face
difculties in the transportation of our phosphate rocks from our Mines owing to landslides and/ or other
environmental hazards. Our Chemical Production Operations may be disrupted if we are unable to secure
prompt alternative sources of phosphate rocks for our Chemical Production Operations. In the event that
our Group fails to derive the expected economic benets from our Mines due to any delay or difculty
in our operations, and/ or to optimise the capacity of our operations, our Business may be adversely
affected.
We may not be able to increase the approved annual production scale for our Mines
Currently, Mine 1 has an approved annual production scale of 50,000 tonnes per year and Mine 2 has an
approved annual production scale of 200,000 tonnes per year. We intend to apply for an increase in the
approved annual production scale for Mine 1 in 2013. In the event that we are unable to obtain approvals
for increases in the production scale on a timely basis, on terms acceptable to us, or at all for such an
increase, our Business may be adversely affected.
We may not be able to achieve the expected production output of our phosphate rocks based on
resource estimates
Our phosphorite resource estimates are based on, inter alia, certain estimation methodology and
procedures, various assumptions and professional engineering judgment. There can be no assurance that
the resource estimates will be accurate, or that the resource estimates will translate to proven reserves.
Resource estimates involve professional judgment based on factors such as technical data, experience
and industry practice. The accuracy of these estimates may be affected by many factors, including the
quality of the results of exploration drilling, sampling of the rocks, analysis of the rock samples, estimation
procedures and the experience of the person(s) making the estimates. Estimates of our phosphorite
resources may change signicantly when new information becomes available or new factors arise which
change the assumptions underlying the resource estimates. If the data on which the phosphorite resource
estimates are based on are later found to be unreliable, the accuracy of the estimates and information
may be compromised and the phosphorite resource estimates may not translate to proven reserves.
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RISK FACTORS
A reduction of our phosphorite resource estimates may result in the lowering of the expected mining
lives of our Mines. Fluctuations in factors such as the prices of our products, production costs and
transportation costs, variation in recovery rates and unforeseen geological or geotechnical perils may
require us to revise our phosphorite resource data. If such revisions result in a reduction in recoverable
phosphorite resources at one or more of our Mines, our Business may be materially and adversely
affected.
We face risks and uncertainties associated with our Mining Operations
Our Mining Operations are subject to a number of operating risks and potential hazards normally
associated with the exploration and extraction of natural resources, some of which are beyond our
control. The occurrence of any operating risk and potential hazard could result in extraction shortfalls and/
or damage to persons or property. These operating hazards and risks include:
periodic interruptions of our Mining Operations due to inclement or hazardous weather conditions
(including ooding, mudslides and landslides) and natural disasters;
interruptions due to transportation disruptions and/ or delays;
accidents;
power or fuel supply interruptions;
unexpected maintenance or technical problems;
labour issues;
boundary disputes;
disputes with third parties (such as other mine owners, mining contractors and operators);
critical equipment failures in our Mining Operations; and
unusual or unexpected variations in the mine and its geological or mining conditions, such as
instability of the slopes and subsidence of the working areas.
In particular, our Mining Operations involve the handling and storage of certain dangerous articles
including explosives, and use of heavy machinery, which involve inherent risks that cannot be completely
eliminated through preventive efforts. The occurrence of any of these potential hazards could delay and
adversely affect our Mining Operations, increase production costs, result in environmental damage, and/
or result in casualties and/ or injury to our workers, damage to property and liability for our Group. Such
incidents may also result in breach of consents or approvals obtained from the relevant PRC authorities
for our Mining Operations and imposition of nes and other penalties on our Group.
Any disruption for a sustained period to the operations of our Mines may have a material adverse effect
on our Business. There can be no assurance that future accidents will not materially and adversely affect
our Business. The occurrence of any of these events, whether man-made or natural, could have an
adverse effect on our Business.
We work with and rely on co-operation partners and third party advisers in our business
operations
Currently, we have co-operation arrangements with Dashan, Lomon Products and Lomon Chemicals.
Between 2006 and 2008, we signed various agreements and supplemental agreements with Dashan
in respect of co-operation arrangements for the Mines (collectively, the Dashan Co-operation
Agreements). Under our co-operation arrangement with Dashan, (i) Dashan shall, inter alia, assist
us in our application for the relevant exploration and mining rights and bear related fees, fund certain
other expenses arising from our Mining Operations and exploration activities and provide certain assets
(such as machinery and equipment) to Mianzhu Norwest for its Mining Operations; and (ii) in relation to
mining operations, our Group shall be responsible for, inter alia, the design and construction of the Mines,
sales of our phosphate rocks, employment and purchase of social insurance for miners (the Dashan
Arrangement).
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RISK FACTORS
We entered into a co-operation agreement with Lomon Products in 2011. Our co-operation with Lomon
Products relates to jointly utilising, inter alia, the relevant facilities and main tunnel transportation system
to obtain phosphate rocks within such areas that fall within our respective mining rights.
We entered into a co-operation agreement with Lomon Chemicals in 2012. Our co-operation with Lomon
Chemicals mainly relates to, inter alia, access to Adit 1703, which is owned by Lomon Chemicals, for the
mining of phosphate rocks.
Please refer to the section entitled General Information on our Group Mining Operations - Co-operation
arrangements of this Offer Document for further details.
The success of these co-operation arrangements largely depends on maintaining a good long-term
working relationship with our co-operation partners, and the satisfactory performance and fullment of
obligations by them. Co-operation arrangements involve associated risks in that our partners may:
be unable or unwilling to full their obligations under the relevant co-operation agreements;
have a different interpretation of our co-operation arrangements which are set out in general terms;
have economic or business interests or goals that are inconsistent with ours;
take actions or omit to take any actions contrary to our instructions or requests or contrary to our
policies or objectives or good corporate governance practices or the law;
have disputes with us as to the scope of their responsibilities and obligations; or
encounter nancial difculties.
In addition, the co-operation of our partners may not always be forthcoming. Any disagreement we
may have with our co-operation partners may lead to a deadlock situation, which could materially and
adversely affect our Business. We cannot assure you that we will be able to resolve such disagreements
in a manner that will be in our interests, or at all, which could have an adverse effect on our Business.
For example, the Dashan Co-operation Agreements provide, inter alia, that if the enterprise nature of
Mianzhu Norwest is changed due to reform or other reasons, Mianzhu Norwest shall ensure (i) the
preferential rights of Dashan to participate in its reform or reorganisation; or (ii) the rights and obligations
of Dashan under the Dashan Co-operation Agreements remain unchanged. There can be no assurance
that Dashan will not construe the Dashan Co-operation Agreements so as to seek equity participation in
our Group pursuant to the Restructuring Exercise, our listing and/ or any future corporate exercises, and
in such event, existing shareholders interest may be diluted and our Business may be adversely affected.
We also work closely with third party advisers and consultants in our Mining Operations. For example,
we engage third party PRC-licensed geological companies from time to time to carry out inspections as
and when the exploration rights that we currently hold are due to be renewed or extended. As a result,
our Business may be affected by the performance of such third party advisers and consultants. Any
failure by such third party advisers and consultants to meet the applicable professional, quality, safety
and environmental standards could affect our Groups compliance with government rules and regulations
relating to exploration and may also result in increased costs for our Group, which in turn could have an
adverse effect on our Business.
We may be unable to continue to discover additional phosphate deposits which can be mined
economically
The amount of phosphate deposits within the areas specied under our mining rights will decline as we
continue to mine. As such, our future success and growth in the medium to long-term will depend, in
part, on our ability to discover additional phosphate deposits, and convert our exploration rights to mining
rights where more phosphate deposits are discovered.
Exploration of mineral deposits is speculative in nature, and involves signicant risks which even a
combination of careful evaluation, experience and knowledge is unlikely to entirely eliminate. There can
be no assurance that the exploration activities will result in the discovery of new mineable reserves.
Substantial capital expenditure and time may be required during which the capital cost and economic
54
RISK FACTORS
feasibility may change. Further, production output may be different from the estimates made initially.
Whether mining of a phosphate deposit will be economically feasible depends on a number of factors
including the size and quality of a deposit, phosphate prices and applicable government regulations. The
effect of these factors cannot be accurately predicted, but any combination of them may result in our
Group not receiving adequate, or any, returns for exploration activities.
Further, we may have to convert our exploration rights to mining rights, and there can be no assurance
that we will be able to do so on a timely basis, on terms acceptable to us, or at all. There can be no
assurance as to the factors or criteria that may be considered, and the extent of discretion exercised, by
the PRC government in determining a mining right application.
Even in the event that exploration rights are converted to mining rights, there can be no assurance that
project terms will not be altered or that we will not be subject to additional conditions imposed by the
PRC government, or other relevant authorities.
If we are unable to discover new phosphate deposits and/ or convert our exploration rights to mining
rights, our Business may be adversely affected.
We may be subject to penalties, in respect of our Mining Operations for Mine 1 for FY2005, FY2006
and FY2007
We exceeded the annual approved production scale for Mine 1 for FY2005, FY2006 and FY2007.
Under PRC laws, the relevant competent land and resources department has the right to require a mining
company to suspend its operations and rectify the non-compliance within a certain period of time if, inter
alia, the mining company does not carry out its operations according to its approved development and
utilisation plan for its mines. For further details, please see the section entitled General Information on
our Group - Permits, Licences, Approvals and Government Regulations of the Offer Document.
In the event that penalties are imposed on us, or we are issued with any orders or notications by any
competent authorities to carry out any rectication work, or issued with any notices of suspensions in
respect of our Mining Operations, or our mining rights and certicates are revoked, our Business may be
adversely affected.
We may be subject to costs and risks associated with the monitoring, rehabilitation and
compliance with environmental laws and regulations
Environmental protection and rehabilitation requirements, including the submission of environmental
assessment reports, environmental management plans, rehabilitation plans and compliance with the
environmental monitoring requirements, may increase our costs and cause delays depending on the
nature of the activity to be permitted and the interpretation of applicable requirements implemented
by the permitting authority. It is possible that costs and delays associated with the compliance with
applicable laws, rules and regulations could affect our ability to proceed with the development or
operation of our Mines, which will have an adverse effect on our Business.
Our Mines have a nite life and will eventually be closed. Before a mine can be closed, a report for
closing the mine, and relevant documents including information on the mining operations, hidden
dangers, land reclamation and utilisation, and environmental protection must be prepared, and an
application for approval must be led with the competent authorities and in accordance with applicable
laws and regulations. In the event that our Mines are closed, we may face additional costs and risks
arising from mine closures including reforestation and reinstatement of land used for Mining Operations
to its original condition or compliance with other environmental protection or safety issues. The successful
completion of these tasks is dependent on our ability to adhere to applicable laws, rules and regulations
as may be implemented by the relevant government. The consequences of a difcult closure and/ or non-
compliance with applicable laws, rules and regulations may include increased and/ or unforeseen costs,
penalties and damage to the reputation of our Group. In such an event, our Business may be adversely
affected.
55
RISK FACTORS
RISKS RELATING SPECIFICALLY TO OUR CHEMICAL PRODUCTION OPERATIONS UPON
COMMENCEMENT OF OUR CHEMICAL PRODUCTION OPERATIONS
We may be adversely affected if we face any disruptions to the supply of power and other raw
materials
Our Chemical Production Operations depend heavily on the availability of power supply, as well as other
raw materials such as natural gas, electrodes, soda ash, silica and coke. There can be no assurance
that supplies of power as well as other raw materials will not be interrupted or that their prices will not
increase.
Since December 2012, the facilities for our Chemical Production Operations have been connected to the
electricity supply network of the (State Grid Corporation of China) (State Grid) and
we are charged based on the prevailing market rates. Cost of electricity constitutes a signicant portion of
our total costs of production, and electricity cost increases, for example during low-water periods, which
typically occur within the period from mid-November to mid-April, may adversely affect our Business. For
further details, please refer to the section entitled General Information on our Group - Seasonality of this
Offer Document.
In the event we experience disruptions in the supply of power or other raw materials to our processing
facilities, and we are unable to nd suitable replacement suppliers promptly or obtain alternative supplies
at prices acceptable to us to meet the shortfall, our Business may be adversely affected.
We face risks relating to environmental hazards and production safety associated with our
Chemical Production Operations
Our Chemical Production Operations are subject to risks normally associated with working with chemicals
and hazardous substances, such as spills, discharges or other releases of hazardous substances into
the environment. The occurrence of accidents involving our phosphate-based chemical products or
by-products, which may be ammable and/ or hazardous in nature, as the case may be, could result
in severe damage and/ or injury to persons and/ or property. In such an event, we may be subject to
equipment failures or shut-downs, litigations and/ or regulatory investigations, all of which could adversely
affect our Business.
We may be adversely affected by the imposition of any additional export duties, quotas and/ or
restrictions on our phosphate-based chemical products
Certain of our phosphate-based chemical products are subject to additional export duties and quotas
imposed by the PRC government. Please refer to Appendix H entitled Summary of Relevant PRC Laws
and Regulations to this Offer Document for further details on PRC laws relating to, inter alia, taxation and
fees.
In the event that any additional or new export duties or quotas are imposed on our products, our
Business may be adversely affected.
We are subject to foreign exchange risks and uctuations
We are exposed to foreign exchange rate risks. Revenue for the exports of our phosphate-based
chemical products is denominated in US$ while our operating costs are mainly denominated in RMB
and S$. The proceeds to be raised from the Invitation will be denominated in S$ while our intended uses
of proceeds are likely to be denominated in RMB. To the extent that our revenue and operating costs
and/ or purchases are not entirely matched in the same currency and to the extent that there are timing
differences between invoicing and collection or payment, as the case may be, we are exposed to any
depreciation of US$ and/ or S$ against RMB. Any signicant depreciation of US$ and/ or S$ against RMB
could adversely affect the nancial performance and position of our Group.
56
RISK FACTORS
We are also subject to translation risks as our combined nancial statements are presented in S$ while
the nancial statement of our foreign subsidiary is prepared in RMB, its functional currency. For the
purposes of consolidating the results of our foreign subsidiary, the balance sheet of our foreign subsidiary
is translated from RMB based on the period or year end exchange rate for the relevant nancial period
or year. The prot or loss statement of our foreign subsidiary is translated using the average exchange
rates for the relevant nancial year or period. Any signicant depreciation of the S$ against the RMB will
adversely affect our nancial performance and position.
Moreover, our Shares are traded in S$. Accordingly, any uctuation in the exchange rates between the
currencies may have an impact on the value of our Groups reported earnings, NAV and other nancial
measures in S$ terms. This, in turn, may affect the market price of the Shares. It should also be noted
that the RMB is not a freely convertible currency.
King & Wood Mallesons has advised that, under the existing PRC foreign exchange rules and regulations,
payments of current account items, including prot distributions, interest payments and expenditures
related to business operations, are permitted to be made in foreign currencies without prior government
approval but are subject to certain procedural requirements. Strict foreign exchange controls continue
to apply to capital account transactions. Capital account transactions must be registered with and
approved by SAFE. Repayments of loan principal, distributions of returns on direct capital investment and
investments in negotiable instruments are also subject to restrictions.
As a result of controls described above, we cannot assure you that we will be able to remit monies or
prots to or from our PRC subsidiary in the form of dividends or otherwise.
Please refer to the section entitled Managements Discussion and Analysis of Results of Operations and
Financial Position Foreign Exchange Management, Accounting Treatment of Foreign Currencies of this
Offer Document for further details.
We may experience equipment failure or other interruptions in our Chemical Production
Operations
Our Chemical Production Operations depend on the operation of our equipment and production facilities,
for which we are in the process of obtaining the relevant approvals. The facilities may experience
various operational delays such as shut-downs, downtime or periods of reduced production as a result
of unanticipated malfunction owing to reasons including power shortages, equipment failure or defects.
In addition, the New Gongxing Facilities may be subject to unanticipated events such as re or natural
disasters including earthquakes, resulting in damage to persons and/ or property. Disruption at one part
of our facilities may also adversely affect production operations for other phosphate-based chemical
products.
In the event that such unanticipated events occur and cause delays to the operations of the New
Gongxing Facilities, and we are unable to resolve equipment failures and/ or nd suitable prompt
replacements for such equipment, our Business may be adversely affected.
We may not be able to consistently, if at all, develop new and/ or improved phosphate-based
chemical products, which are protable or commercially viable, and our customers may reduce
their demand for our phosphate-based chemical products in favour of substitutes
We may not be able to develop new and/ or improved phosphate-based chemical products to expand our
product range and improve the quality of our phosphate-based chemical products consistently, if at all.
There can be no assurance that our efforts will yield protable or commercially viable phosphate-based
chemical products. In addition, as the time frame for developing and the demand for new products are not
pre-determinable, we may have to abandon a potential product which is no longer marketable even if we
have invested signicant resources in the development of such product. Further, even if we are successful
in developing a new product, a signicant amount of time may lapse between our investment in that
product and the receipt of any related revenue. In addition, our phosphate-based chemical products also
compete with other substitutes for various applications. If a signicant portion of our customers are willing
to accept such substitutes, the demand for our products would decrease and the market price for our
phosphate-based chemical products may decline. This would adversely affect our Business.
57
RISK FACTORS
We may be subject to the imposition of new, or an increase in existing, trade barriers and
registration and other requirements in our principal export markets
The export of our phosphate-based chemical products may be subject to various trade barriers, such
as anti-dumping duties, tariffs and quotas in our export markets. These trade barriers could affect the
demand for our phosphate-based chemical products by effectively increasing the prices of our phosphate-
based chemical products compared to domestically available products. There can be no assurance as to
how such trade barriers will evolve and whether our export markets will implement new trade barriers, or
increase existing trade barriers. In such event(s), the demand for our phosphate-based chemical products
in our export markets may decrease, thereby adversely affecting our Business. Please refer to the section
entitled Managements Discussion and Analysis of Results of Operations and Financial Position
Principal Components of Our Combined Income Statement of this Offer Document for further details of
our sales by geographical region.
Registration requirement for exports into the European Union
To the best of our knowledge, the Registration, Evaluation, Authorisation and Restriction of Chemicals
(REACH) Regulation (EC) No 1907/2006, inter alia, requires companies manufacturing or importing
chemical substances into the European Union to register information on such substances in a central
database run by the European Chemicals Agency. Importers of our phosphate-based chemical products
in the European Union may have to and we may also be required to comply with the REACH regulations,
and if they or we are unable or unwilling to do so, we may experience a decrease in demand for our
phosphate-based chemical products within the European Union.
Imposition of import duties by the USA
In February 2007, the United States Department of Commerce commenced investigations pursuant
to allegations that SHMP was being sold, or was likely to be sold, at less than fair value in the USA.
Subsequently in March 2008, the United States International Trade Commission (USITC) determined
that anti-dumping rates should be imposed on all imports of SHMP from the PRC. In October 2009,
the USITC commenced similar investigations pursuant to allegations that certain phosphate products,
including STPP, were being sold, or was likely to be sold, at less than fair value in the USA. The USITC
later determined that there was no reasonable indication that an industry production of STPP in the USA
was materially injured, or threatened with material injury, by reason of imports from the PRC that were
alleged to be subsidised by the PRC government and sold in the USA at less than fair value.
If we sell products to the USA that are determined to be subject to the anti-dumping duties by the USITC,
we may have to pay the anti-dumping rates, which will reduce our protability.
There can be no assurance that the government of the USA or other governments will not initiate any
anti-dumping related investigations against the phosphate-based chemical products that we produce. In
particular, there is no assurance that the government of the USA or other governments will not re-initiate
or continue anti-dumping related investigations against PRC producers of STPP or any other phosphate-
based chemical products.
The imposition of new, or an increase in existing trade barriers and registration and other requirements in
our export markets may have an adverse effect on our Business.
We may be subject to penalties in respect of our Chemical Production Operations for FY2009,
FY2010 and FY2011
After the Wenchuan Earthquake, we produced minimal quantities of thermal phosphoric acid, SHMP and
STPP in FY2009, FY2010 and FY2011 at the Previous Hanwang Facilities, in order to continue supplying
to certain customers. Our Pollution Discharge Permit in respect of the Previous Hanwang Facilities was
renewed in January 2007 prior to the Wenchuan Earthquake, and expired in January 2008. Nonetheless,
the Mianzhu Environmental Bureau issued a letter dated 18 January 2012 stating, inter alia, that since
incorporation, the mining and the other production and operation activities of Mianzhu Norwest are in
compliance with relevant PRC environmental laws, rules and regulations.
58
RISK FACTORS
In the event that we are required to obtain a Pollution Discharge Permit, retrospectively or otherwise, but
are unable to do so on a timely basis, on terms acceptable to us, or at all, we may be required to pay
penalties and/ or cease operations and carry out rectication works. There is also no assurance that the
relevant authorities will not impose nes or penalties on us for the aforementioned production activities. In
such event(s), our Business may be adversely affected.
We may not be able to achieve expected sales of our phosphate-based chemical products
We intend to increase the production volume and range of our phosphate-based chemical products.
There is no certainty that the actual demand for our phosphate-based chemical products will meet our
expectations of a projected increase in the demand of our products.
In addition, there can also be no assurance that new phosphate-based chemical products developed by
us in the future will yield positive economic benets. If we fail to achieve our business objectives or sales
target, our Business may be adversely affected.
RISKS RELATING TO OUR OPERATIONS IN THE PRC
We are subject to economic conditions of the PRC which are subject to uncertainties that may
arise from changes in government policies and social conditions
We conduct substantially all of our business operations in the PRC. Furthermore, our Groups sale
of phosphate rocks is conned to the PRC, as we do not possess the relevant licence(s) required by
PRC laws, rules and regulations to sell phosphate rocks overseas. Therefore, our Business is sensitive
to the economic, political and legal environment in the PRC, and the PRCs overall GDP growth. The
PRC economy differs from the economies of most developed countries in many respects, including its
structure, its level of development, its growth rate, its control of foreign exchange and its allocation of
resources.

The economy of the PRC is still in the process of being transformed from a planned economy to a more
market-oriented economy. For the past two decades, the PRC government has implemented economic
reform measures emphasising utilisation of market forces in the development of its economy. Although
our Company believes these reforms will have a positive effect on its overall and long-term development,
we cannot predict whether changes in the PRCs economic and other policies will have any adverse
effect on our Business.
Introduction of new laws or changes to, or interpretation of, the existing laws by the PRC
government may signicantly affect our Business
Our business and operations in the PRC are governed by the legal system of the PRC. The PRC legal
system is a codied system with written laws, regulations, circulars, administrative directives and internal
guidelines. As the PRC legal system continues to evolve, the interpretations of many laws, regulations
and rules are not always uniform and enforcement of these laws, regulations and rules involves
uncertainties, which may limit legal protections available to us. Some of these laws and regulations are
relatively new, so the volume of published cases in relation to these laws and regulations are limited.
Some of the laws and regulations, and the interpretation, implementation and enforcement thereof are
still at an experimental stage and are therefore subject to policy changes. In addition, some regulatory
requirements issued by certain PRC government authorities may not be consistently applied. We cannot
predict the effect of future developments in the PRC legal system, including the promulgation of new
laws, changes to existing laws or the interpretation or enforcement thereof, or the pre-emption of local
regulations by national laws. Further, the PRC legal system is based on written statutes. Prior court
decisions may be cited for reference but have limited precedential value. Accordingly, the outcome of
dispute resolution may not be as consistent or predictable as in other more developed jurisdictions.
59
RISK FACTORS
For instance, as a result of changes in the PRCs foreign investment policy, foreign investment in
phosphate mines was re-classied from the encouraged category to the restricted category in the
revised Catalogue for the Guidance of Foreign Investment Industries (the Catalogue) in 2007, and
was retained in the restricted category in the revised Catalogue in 2011 (collectively, the Revised
Catalogue). According to relevant PRC laws, rules and regulations, the incorporation and changes
of a foreign investment enterprise involved in restricted industries shall be governed by the commerce
bureau/departments of a provincial or higher level. In order to obtain the relevant approvals from the
competent commerce bureau/department(s) for any changes, Mianzhu Norwest has to rst prepare the
application and all requisite supporting documents (the Documents) for submission to the Deyang
Commerce Bureau. The Deyang Commerce Bureau will then review the Documents and report to the
Sichuan Commerce Department if required under the relevant PRC laws, rules and regulations. Our PRC
subsidiary, Mianzhu Norwest, was incorporated in 1996. Since incorporation, all changes to Mianzhu
Norwest were approved by the Deyang Commerce Bureau. To clarify the impact of the Revised Catalogue
to our Group, we, together with the Legal Advisers to our Company on PRC Laws, King & Wood
Mallesons, have visited the Deyang Commerce Bureau and the (section chief) in charge of Mianzhu
Norwest has verbally conrmed that the Deyang Commerce Bureau is the competent authority to approve
any changes to Mianzhu Norwest.
If there are any further amendments to the laws and regulations or their interpretation or enforcement
which require Mianzhu Norwest to obtain approvals for all its future changes from the Sichuan Commerce
Department or higher authorities, we may incur additional compliance costs for our Group to obtain
such approvals. Further, there can be no assurance that such approvals will be granted promptly to us
or at all. In the event that we are or were required to obtain the approvals from the Sichuan Commerce
Department and/ or other higher level authorities and we are unable to do so on a timely basis, or on
terms acceptable to us, or at all, our Business may be adversely affected.
We are subject to applicable PRC laws and other regulations concerning environmental
protection, health and safety and other areas
We are subject to various national, provincial and local laws and regulations relating to mining,
environmental protection, land use, occupational health, production safety and other matters that govern
our operations. These impose inherent risks of liabilities in our operations.
Environmental protection
Environmental hazards may occur in connection with our operations as a result of human negligence,
force majeure or otherwise. Environmental events such as changes in the water table or landslides
could adversely affect our Mining Operations. The occurrence of any environmental hazard may delay
production, increase production costs, cause personal injuries or property damage, result in liability to us
and/ or damage our reputation.
We are subject to national, provincial and local laws, rules and regulations regarding environmental
matters, such as the treatment and discharge of hazardous wastes and materials. For example, we are
required to abide by applicable PRC laws, rules and regulations on the discharge of waste substances
into the environment.
In addition, we are required under the current PRC laws, rules and regulations to conduct our Mining
Operations in a manner that minimises the impact on the environment. We may be required to incur
signicant capital and maintenance expenditures in order to comply with these environmental protection
laws and regulations. Any failure by us to discharge our obligations could result in the imposition of nes
and penalties, damage in reputation, delays in production and/ or temporary or permanent closure of our
operations.
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RISK FACTORS
We are also subject to future changes in existing laws, rules or regulations or enforcement policies, or
further investigation or evaluation of the potential health hazards of some of our products or business
activities, which may result in additional compliance and other costs. Stricter laws and regulations, or
more stringent interpretations of existing laws, rules or regulations, may impose new liabilities on us,
reduce operating hours, require additional investment by us in pollution control equipment, or impede
the opening of new or expanding existing plants or facilities. We could be forced to conduct preventive or
remedial action(s), such as pollution control facilities, which could result in the incurrence of substantial
costs. Such costs, liabilities or disruptions in operations could adversely affect our Business.
Occupational health and safety
We are required to comply with applicable health and safety laws and regulations of the relevant PRC
authorities. Relevant government authorities regularly conduct safety inspections of the mines and
facilities of mining companies. Failure to pass the safety inspections may harm our corporate image,
reputation and the credibility of our management, and have a material adverse effect on our Business.
We may also be subject to nes, penalties or even suspension of operations.
Our operations are subject to manufacturing, operating and handling risks associated with the products
we produce and the products we use in our operations. In particular, our operations may involve the
transportation, handling and storage of explosives and other dangerous or hazardous materials in
customised storage tanks. We may encounter accidents, maintenance or technical difculties, mechanical
failures or breakdowns during the exploration, mining and production processes. We cannot assure you
that accidents such as res, equipment mishandling and mechanical failures which may result in property
damage, severe personal injuries or even fatalities will not occur during the course of our operations. The
occurrence of such accidents may disrupt or result in a suspension of our operations, increase production
costs, result in liability to us and harm our reputation and Business.
Labour
We are also required to comply with applicable PRC labour, social insurance and housing fund laws and
regulations. In the PRC, employers entering into a labour contract relationship with the workers shall
perform the duties stipulated under the relevant laws and regulations, including the execution of contracts
with employees, prompt payment of salaries, and contribution to the employees social insurance and
housing fund. Any failure by us in complying with the applicable labour, social insurance and housing fund
laws may subject us to penalties and liabilities under PRC laws and regulations, including but not limited
to issue of warnings and imposition of nes.
There can be no assurance that existing laws, rules and regulations in relation to, inter alia,
environmental, occupational health and safety, and labour, will not be amended in the future. Stricter laws
and regulations, or more stringent interpretation of existing laws and regulations, may impose additional
compliance requirements on us, such as reducing our operating hours, and altering our production
processes. We may even be required to incur additional investment in pollution control equipment and/ or
incur additional operating costs to comply with such additional requirements and regulations. Any failure
by us to comply with the changes to the laws, rules and regulations could result in the imposition of nes
and penalties, damage in reputation, delays in production and/ or temporary or permanent closure of our
operations. Such increase in costs of or disruptions in operations may adversely affect our Business.
We may be subject to any changes in the laws, rules and regulations relating to currency
conversion and tax in the PRC
Under the present unied oating exchange rate system, the Peoples Bank of China publishes a daily
exchange rate for the RMB based on the previous days dealings in the inter-bank foreign exchange
market. Under this unied oating exchange rate system, uctuations in the exchange rate of the RMB
against other currencies, are to a certain extent, subject to market forces. There can be no assurance that
the RMB will not be subject to devaluation or depreciation due to administrative or legislative intervention
by the PRC government or adverse market movements. A devaluation of the RMB may adversely affect
our cash ow position in the repayment of our foreign currency debt (if any) and the payment of dividends
on our Shares. Conversely, an appreciation of RMB could lead to a reduction in the prices of imported
products and negatively impact our competitiveness against foreign products within the PRC, thereby
lowering our protability and adversely affecting our Business.
61
RISK FACTORS
We may experience increased competition due to the PRCs entry into the World Trade
Organisation (WTO)
The PRC has gained entry into the WTO. We believe that trade tariffs and import controls of foreign
goods into the PRC may be lowered or removed over time, pursuant to the entry. A lowering of the import
tariffs and barriers will intensify competition and result in the inux of similar phosphate-based chemical
products from overseas. Such increase in competition may force us to lower our prices, resulting in
narrower prot margins. In such an event, our Business may be adversely affected.
Failure to comply with PRC regulations in respect of our PRC Employees (as dened below)
share awards may result in our Group and/ or such PRC Employees being subjected to nes and
legal or administrative sanctions
Pursuant to the relevant PRC laws, rules and regulations in respect of foreign exchange control, including
the (notice issued on 15 February
2012 by SAFE), eligible PRC employees who are granted share awards under the AsiaPhos Performance
Share Plan (the PRC Employees) are required to complete (i) foreign exchange registration for the
share awards with SAFE or its local branch(es) via a qualied PRC agent; and (ii) certain other
procedures (the SAFE Registration).
We are required to (i) appoint and/ or authorise a qualied PRC agent to complete the SAFE Registration
on behalf of our PRC Employees; and (ii) submit the requisite documents to SAFE or its local branch(es),
including evidentiary materials that prove the authenticity of the AsiaPhos Perfomance Share Plan and
letters of undertaking regarding the veracity of the employment relationship between the PRC Employees
and our PRC subsidiary.
If we, or our PRC Employees, fail to comply with relevant PRC laws, rules and regulations, we and/ or our
PRC Employees may be subject to nes and legal or administrative sanctions.
RISKS RELATING TO OWNERSHIP OF OUR SHARES
Investments in securities quoted on Catalist involve a higher degree of risk and can be less liquid
than shares quoted on the Mainboard of the SGX-ST
We have made an application for our Shares to be listed for quotation on Catalist, a listing platform
primarily designed for fast-growing and emerging or smaller companies to which a higher investment risk
tends to be attached as compared to larger or more established companies listed on the Mainboard of
the SGX-ST. An investment in shares quoted on Catalist may carry a higher risk than an investment in
shares quoted on the Mainboard of the SGX-ST and the future success and liquidity in the market of our
Shares cannot be guaranteed.
Market and economic conditions may affect the market price and demand for our Shares
Movements in domestic and international securities markets, economic conditions, foreign exchange rates
and interest rates may affect the market price and demand for our Shares. As our Shares will be quoted
in S$ on the SGX-ST, dividends, if any, in respect of our Shares will be paid in S$. Fluctuations in the
exchange rate between the S$ and other currencies will affect, inter alia, the foreign currency value of
the proceeds which a Shareholder would receive upon sale in Singapore of our Shares and the foreign
currency value of dividend distributions.
Future sale or availability of Shares may exert a downward pressure on our Share price
There will be 800,000,000 Shares immediately following the Invitation. Such Shares, except for those
under moratorium, may be sold in the public market in Singapore. The sale of a substantial number of our
Shares after this Invitation, or the perception that such sales may occur, could exert a downward pressure
on our Share prices. In addition, these factors may also affect our ability to raise capital through the issue
of additional equity securities. Except as otherwise described in the section entitled Share Capital and
Shareholders Moratorium of this Offer Document, there are generally no other restrictions on the ability
of our Shareholders to sell their Shares either on the SGX-ST or otherwise.
62
RISK FACTORS
There has been no prior market for our Shares and the Invitation may not result in an active or
liquid market for our Shares
Prior to the Invitation, there has been no public market for our Shares. Although we have applied to the
SGX-ST for the dealing and quotation of our Shares on Catalist, there is no assurance that an active
trading market for our Shares will develop or, if developed, will be sustained. There is also no guarantee
of the continued listing of our Shares.
The Invitation Price was determined following a book-building process by agreement among the Sponsor
and Underwriter, the Placement Agent, the Vendors and us, after taking into consideration, inter alia,
market conditions and estimated market demand for our Shares. The Invitation Price may not be
indicative of the market price for our Shares after the completion of the Invitation. Investors may not be
able to resell their Shares at a price that is attractive to them.
Our Share price may be volatile, which could result in substantial losses for investors purchasing
our Shares pursuant to the Invitation
The market price of our Shares may uctuate signicantly and rapidly as a result of, inter alia, the
following factors, some of which are beyond our control and may be unrelated or disproportionate to our
nancial results:
political, economic, nancial and social developments in the PRC and in the global economy;
perceived prospects, the general outlook of our industry, and success or failure of management in
implementing our business plans;
changes in general economic and stock market conditions;
changes in our operating results;
changes in securities analysts estimates of our nancial performance and recommendations;
announcements of gain or loss of signicant contracts, acquisitions, strategic partnerships, joint
ventures or capital commitments;
changes in market valuations and share prices of companies with businesses similar to our
Groups businesses that may be listed in Singapore or elsewhere;
uctuations in exchange rates;
ability to obtain or maintain regulatory approval for our operations;
addition or loss of key personnel; and
our involvement in material litigation.
We may require additional funding for our future growth
Although we have identied our future growth plans as set out in the sections entitled General
Information on our Group - Prospects and Trend Information and General Information on our Group -
Business Strategies and Future Plans of this Offer Document as the avenues to pursue growth in our
business, the net proceeds from the Invitation may not be sufcient to fully cover the estimated costs
of implementing all these plans. We may also nd opportunities to grow through acquisitions which
cannot be predicted at this juncture. Under such circumstances, secondary issue(s) of securities
after the Invitation may be necessary to raise capital. If new Shares are issued to new and/or existing
Shareholders after the Invitation, such shares may be priced at a discount to the then-prevailing market
price of our Shares trading on Catalist, and existing Shareholders equity interest may be diluted. If we fail
to utilise the new funds to generate a commensurate increase in earnings, our EPS will be diluted, and
this could lead to a decline in our Share price.
Furthermore, any additional debt nancing which we may undertake to raise the funds required to
develop these growth opportunities may, apart from increasing interest expense and gearing, contain
restrictive covenants with respect to dividends, future fund-raising exercises and other nancial and
operational matters. If we are unable to procure the additional funding that may be required, our growth or
nancial performance may be adversely affected.
63
RISK FACTORS
Future dilution may result due to capital requirements
Our working capital and capital expenditure needs may vary materially from those presently planned,
depending on numerous factors, including our marketing and distribution strategies, strategic alliances
and other factors which cannot be foreseen. If we do not meet our goals with respect to revenues, or
costs are higher than anticipated, substantial additional funds may be required. Even if we exceed our
goals, our success may introduce new opportunities that may have to be fullled quickly and this could
also result in the need for substantial new capital. We may have to raise additional funds to meet the new
capital requirements. These additional funds may be raised through the issuance of new Shares. In such
events, if any Shareholder is unable or unwilling to participate in such fund raising, such Shareholder may
experience dilution in his investment.
We do not have a xed dividend policy and may not be able to pay any dividends in the future
We cannot assure you that we will pay dividends in the future or, if we pay dividends in the future, when
we will pay them. The declaration and payment of future dividends will depend upon our operating
results and cash ow, nancial condition, other cash requirements, including capital expenditures, the
terms of borrowing arrangements (if any), general economic conditions and other factors specic to the
industries that we operate in, many of which are beyond our control. Moreover, as we operate under a
holding company structure, the level of our income and our ability to pay dividends may depend upon the
receipt of dividends and distributions from our subsidiaries. The payment of dividends by our subsidiaries
is contingent upon many factors, including earnings and cash ows, and may be subject to legal,
contractual and/ or tax and accounting requirements in the relevant jurisdiction and other restrictions on
the payment of dividends under the terms of certain agreement(s). Please refer to the section entitled
Dividend Policy of this Offer Document for further details.
Negative publicity may adversely affect our Share price
Negative publicity involving our Group, any of our Directors, Key Executives or Substantial Shareholders,
may adversely affect the market perception or the stock performance of our Company, whether or not it
is justied. Some examples are unsuccessful attempts at joint ventures or takeovers, and involvement in
insolvency proceedings.
As a signicant portion of our operations and assets are located outside Singapore, investors
may nd it difcult to enforce a judgement against our Group.
A signicant portion of our Groups operations and assets are located outside Singapore. Accordingly,
Shareholders may encounter difculties if they wish to make a claim against our Group, or wish to
enforce a judgement against the assets of our Group.
You will incur immediate dilution and may experience further dilution in the NAV of your Shares
The Invitation Price is substantially higher than our Groups NAV per Share of 6.45 cents as at 31 March
2013 (as adjusted for the net proceeds from the issue of New Shares) and based on the post-Invitation
share capital of 800,000,000 Shares. Investors who subscribe for and/ or purchase our Shares at the
Invitation will therefore experience immediate and signicant dilution in the NAV of such Shares. Please
refer to the section entitled Dilution of this Offer Document for further details.
Our Controlling Shareholders will retain signicant control over our Group after the Invitation
which will allow them to inuence the outcome of matters submitted to Shareholders for approval
Upon completion of the Invitation, our Controlling Shareholders, namely Eastcomm, Astute Ventures, Dr.
Ong Hian Eng, Simon Ong, Raymond Ong and Melissa Ong, will benecially own approximately 69.5%
of our Companys post-Invitation share capital. As a result, our Controlling Shareholders will be able to
exercise signicant inuence over matters requiring the approval of Shareholders, including the election
of Directors and approval of signicant corporate transactions. Our Controlling Shareholders will also
have veto power with respect to any action of Shareholders requiring a majority vote except where they
are required by the Catalist Rules or other applicable laws, rules or regulations to abstain from voting.
Our Controlling Shareholders interests may not be aligned with our other Shareholders interests, and
they may cause us to, or prevent us from, entering into certain transactions, the result of which may
not be in, or may conict with, the interests of our other Shareholders. We cannot assure you that
our Controlling Shareholders will vote on Shareholders resolutions in a way that will benet all of our
Shareholders.
64
RISK FACTORS
Please refer to the section entitled Share Capital and Shareholders Shareholders of this Offer
Document for further details.
Investors may not be able to participate in future issues of our Shares
If we offer to our Shareholders rights to subscribe for additional Shares or any right of any other
nature, we will have discretion as to the procedure to be followed in making the rights available to our
Shareholders or in disposing of the rights and making available the net proceeds of such disposal to
our Shareholders. The decision made may not be to the benet of all Shareholders. We may choose
not to offer the rights to our Shareholders having a registered address outside Singapore. Accordingly,
Shareholders who have a registered address outside Singapore may be unable to participate in rights
offerings and may experience a dilution in their shareholdings as a result.
There may be a future sale or major divestment of our Shares by our Substantial Shareholders
The sale of a substantial number of our Shares after the Invitation, or the perception of such possible
sales, may adversely affect the market price of our Shares. Save as set out in the section entitled Share
Capital and Shareholders Moratorium of this Offer Document, there are generally no restrictions
imposed on our Substantial Shareholders selling or otherwise disposing of their shareholdings. Any major
disposal of our Shares by any of our Substantial Shareholders may cause the market price of our Shares
to decline.
In addition, future sales, or perceived sales, of a substantial number of our Shares may adversely affect
our ability to raise capital in the future at a time and a price favorable to us, and our Shareholders may
experience dilution of their holdings upon a future issuance or sale of additional securities.
The actual performance of our Group may differ materially from the forward-looking statements in
this Offer Document
This Offer Document contains forward-looking statements, which are based on a number of assumptions
subject to uncertainties and contingencies, many of which are outside of our control. Furthermore, our
revenue and nancial performance are dependent on a number of external factors, including demand
for our phosphate rocks and phosphate-based chemical products, which may decrease for various
reasons, such as increased competition within the industry or changes in applicable laws and regulations.
We cannot assure you that these assumptions will be realised and our actual performance will be as
projected.
65
EXCHANGE RATES AND EXCHANGE CONTROLS
EXCHANGE RATES
Our combined nancial statements are presented in S$ while the nancial statements of Mianzhu
Norwest are prepared in RMB, its functional currency. For the purposes of consolidating the results of
our foreign subsidiary, the balance sheet of Mianzhu Norwest is translated from RMB based on the
year-end or period-end exchange rate for the nancial year or period respectively, and the statement of
comprehensive income is translated at average exchange rates for the year or period which approximate
the exchange rates prevailing at the dates of the transactions.
The following table sets forth, for the nancial periods indicated, the exchange rate of RMB to S$1.00,
based on the average of the closing exchange rate on the last trading day of each month during each
nancial period or year and the closing exchange rate on the last trading day of the nancial period
or year. Where applicable, the exchange rates in the following table are used for our Groups nancial
statements disclosed elsewhere in this Offer Document:
RMB / S$1.00
Average
(1)
Closing
FY2010 4.975 5.123
FY2011 5.163 4.902
FP2012 5.000 5.033
FY2012 5.058 5.163
FP2013 5.081 5.066
The following table sets forth the highest and lowest exchange rates of RMB to S$1.00 for each month for
the six (6) months prior to the Latest Practicable Date, and indicates how much RMB can be bought with
S$1.00:
RMB / S$1.00
Highest Lowest
February 2013 5.057 5.003
March 2013 5.034 4.948
April 2013 5.027 4.961
May 2013 5.014 4.812
June 2013 4.949 4.792
July 2013 4.884 4.772
As at the Latest Practicable Date, the exchange rate was S$1.00:RMB4.818 (Exchange Rate).
The above exchange rates have been calculated with reference to exchange rates quoted from
Bloomberg L.P.
(2)
and should not be construed as representations that the RMB amounts actually
represent such S$ amounts, or could have been, or could be, converted into S$ at any particular rate, the
rate indicated above, or at all.
For the convenience of potential investors, certain parts of this Offer Document contain conversions of
RMB amounts into S$ and vice versa. Unless otherwise specied, the exchange rate used for these
conversions was S$1.00:RMB4.818.
Notes:
(1) The average exchange rates between RMB and S$ have been calculated using the average of the closing exchange rates on
the last day of each month during the relevant nancial period or year.
(2) Source: Bloomberg L.P.. Bloomberg L.P. has not provided its consent for the purposes of Section 249 of the SFA, to the
inclusion of the above information extracted from the relevant report published by it and therefore is not liable for such
information under Sections 253 and 254 of the SFA. While we and the Vendors have taken reasonable actions to ensure that
the relevant information has been reproduced in its proper form and context, neither we, the Vendors, nor any other party has
conducted an independent review or veried the accuracy or completeness of such information.
66
EXCHANGE RATES AND EXCHANGE CONTROLS
EXCHANGE CONTROLS
Singapore
As at the Latest Practicable Date, there are no Singapore governmental laws, decrees, regulations and
other legislation regarding the following:
(i) the import or export of capital, including the availability of cash and cash equivalents for use by our
Group; and
(ii) the remittance of dividends, interest or other payments to non-resident holders of our Companys
securities.
PRC
The PRC government imposes controls on the conversion of the RMB into foreign currencies. Under
the existing PRC foreign exchange rules and regulations, payments of current account items, including
prot distributions, interest payments and expenditures related to business operations, are permitted to
be made in foreign currencies without prior government approval but are subject to certain procedural
requirements. Strict foreign exchange controls continue to apply to capital account transactions. Capital
account transactions must be registered with and approved by SAFE. Repayments of loan principal,
distributions of returns on direct capital investment and investments in negotiable instruments are also
subject to restrictions.
In utilising the proceeds from the Invitation and any future offerings, as an offshore holding company
of our PRC subsidiary, we may make loans to our PRC subsidiary, or we may make additional capital
contributions to our PRC subsidiary. Any loans made to our PRC subsidiary are subject to PRC
regulations and approvals. For example, loans by us to our PRC subsidiary to nance its activities
cannot exceed statutory limits and must be registered with SAFE or its local counterpart. Any capital
contributions to our PRC subsidiary must be approved by the Ministry of Commerce in the PRC
or its local counterpart. In addition, on 29 August 2008, SAFE promulgated the Notice of the General
Affairs Department of the State Administration of Foreign Exchange on the Relevant Operating Issues
concerning the
(Improvement of the Administration of Payment and Settlement of Foreign Currency Capital
of Foreign-funded Enterprises) (the Circular 142) restricting how converted RMB may be used. For
example, Circular 142 requires that RMB converted from the foreign currency-denominated capital of our
PRC subsidiary may only be used for purposes within the business scope approved by the applicable
governmental authority and may not be used for equity investments within the PRC unless specically
provided for otherwise. Furthermore, Circular 142 strengthened the oversight of the ow and use of RMB
funds converted from the foreign currency-denominated capital of a foreign-invested enterprise. The use
of such RMB funds may not be changed without approval from SAFE, and may not be used to repay
RMB loans if the proceeds of such loans have not yet been used for purposes within the foreign-invested
enterprises approved business scope.
On 21 October 2005, SAFE promulgated the
(Notice of the State Administration of Foreign Exchange on Relevant Issues
concerning Foreign Exchange Administration for Domestic Residents to Engage in Financing and in
Return Investment via Overseas Special Purpose Companies) (the Notice 75) which came into effect
on 1 November 2005. Under Notice 75, PRC residents, including PRC enterprises and PRC resident
individuals, have to register their foreign investments with the competent local SAFE branch prior to
incorporating or taking control of a special purpose vehicle (the SPV). Furthermore, if there is any major
capital change without involving a round-trip investment of the SPV, such as an increase/decrease of
capital, share transfer, mergers or division, long-term equity or debt investments, and guarantees to a
foreign party, Notice 75 requires a PRC resident to amend its SAFE registration or le a record in a
competent foreign exchange bureau within 30 days from the date of the occurrence of the aforesaid
major capital change item. In addition, the foreign exchange income from prots, bonuses and capital
changes obtained by the PRC residents from the SPV shall be repatriated within 180 days from the date
of obtaining such income.
67
DIVIDEND POLICY
Statements contained in this section that are not historical facts are forward-looking statements. Such
statements are subject to certain risks and uncertainties which could cause actual results to differ
materially from those which may be forecast and projected. Under no circumstances should the inclusion
of such information herein be regarded as a representation, warranty or prediction with respect to the
accuracy of the underlying assumptions by us, the Vendors, the Sponsor and Underwriter, the Placement
Agent or any other person. Investors are cautioned not to place undue reliance on these forward-looking
statements that speak only as at the date hereof. Please see the section entitled Cautionary Notes
Regarding Forward-Looking Statements of this Offer Document.
We did not declare or pay any dividends in FY2010, FY2011, FY2012 and FP2013. We currently do
not have a xed dividend policy. The form, frequency and amount of declaration and payment of future
dividends on our Shares that our Directors may recommend or declare in respect of any particular
nancial year or period will be at their discretion and subject to the factors outlined below as well as other
factors deemed relevant by our Directors:
(i) the level of our cash and retained earnings;
(ii) our actual and projected nancial performance;
(iii) our projected levels of capital expenditure and expansion plans;
(iv) our working capital requirements and general nancing condition; and
(v) restrictions on payment of dividends imposed on us (if any).
Our Company is a holding company incorporated in Singapore under the Companies Act and our
business is operated primarily through our PRC subsidiary, Mianzhu Norwest. We rely mainly on
dividends from Mianzhu Norwest for our cash requirements. Therefore, our ability to pay dividends will be
affected by the ability of Mianzhu Norwest to declare and pay us dividends or other distributions.
The ability of Mianzhu Norwest to declare and pay dividends to us will be dependent on its cash income,
the cash available to it, its operating results, nancial condition, other cash requirements including
capital expenditures, its borrowing arrangements and other contractual restrictions applicable to it, and
restrictions under applicable laws, rules and/ or regulations.
The Legal Advisers to our Company on PRC Law, King & Wood Mallesons, have advised that Mianzhu
Norwest is entitled to remit dividends as long as Mianzhu Norwest complies with its articles of association
and meets all relevant conditions and requirements as may be required by PRC laws, rules, regulations
and all competent authorities, which mainly and materially provide that:
(i) Mianzhu Norwest shall retain a certain amount from its prots as reserve funds, bonus and welfare
funds for its workers and staff. The proportion of reserve funds to be retained shall not be lower
than ten per cent. (10%) of the total amount of prots after the payment of income tax, and such
retention may be stopped when the accumulated amount of reserve funds retained has reached
fty per cent. (50%) of the registered capital of Mianzhu Norwest. The proportion of bonus and
welfare funds for workers and staff to be retained shall be determined by Mianzhu Norwest;
(ii) Mianzhu Norwest and Norwest Chemicals shall duly pay the relevant taxes or fees in accordance
with applicable PRC laws, rules and regulations; and
(iii) Mianzhu Norwest shall obtain all necessary foreign exchange approvals for the dividend payment
(if required) and the remittance of the dividends shall be carried out by an authorised bank.
Furthermore, if Mianzhu Norwest incurs debt, the instruments governing the debt may restrict its ability to
pay dividends or make other payments to us. The inability of Mianzhu Norwest to distribute dividends or
other payments to Norwest Chemicals, and Norwest Chemicals to our Company, may limit our ability to
fund our working capital requirements.
68
DIVIDEND POLICY
Final dividends paid by us must be approved by an ordinary resolution of our Shareholders at a general
meeting and must not exceed the amount recommended by our Board. Our Directors may, without the
approval of our Shareholders, also declare an interim dividend. All dividends will be paid in accordance
with the Companies Act.
Information relating to withholding tax rates on dividends distributed by Foreign Investment Enterprises in
the PRC is set out in Appendix H entitled Summary of Relevant PRC Laws and Regulations - PRC Laws
Relating to Taxation and Fees to this Offer Document. Information relating to taxes payable on dividends
is set out in Appendix I entitled Taxation to this Offer Document.
69
CAPITALISATION AND INDEBTEDNESS
The following table shows our cash and cash equivalents, short-term debt and capitalisation of our Group
as at 31 July 2013 on an actual basis and as adjusted for the Restructuring Exercise and net proceeds
from the issue of New Shares pursuant to the Invitation.
You should read this table in conjunction with:
Appendices A, B and C entitled Audited Combined Financial Statements for the nancial years
ended 31 December 2010, 2011 and 2012, Unaudited Interim Condensed Combined Financial
Statements for the three months period ended 31 March 2013 and Unaudited Pro Forma
Combined Financial Information for the nancial year ended 31 December 2012 and the three
months period ended 31 March 2013 to this Offer Document respectively, and the related notes
and other nancial information contained therein; and
the sections entitled Managements Discussion and Analysis of Results of Operations and
Financial Position and Selected Combined Financial Information of this Offer Document.
As at 31 July 2013
Actual
As adjusted
for the
Restructuring
Exercise and
net proceeds
from the issue
of New Shares
pursuant to the
Invitation
(S$000) (S$000)

Cash and cash equivalents 1,013 22,565
Indebtedness
Interest-bearing bank loan - current
(secured, non-guaranteed) 1,024 1,024
Total shareholders equity 30,119 51,671
Total capitalisation and indebtedness 31,143 52,695
Borrowings
For the Period Under Review, our growth and operations were primarily nanced through a combination
of shareholders equity and loans, cash ow generated from operating activities, short-term bank
borrowings, government grants, compensation obtained from the local PRC authorities for, inter alia, the
Relocation Exercise, and assets and other forms of investments by Dashan, one (1) of our third party co-
operation partners.
7
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71
CAPITALISATION AND INDEBTEDNESS
Save as disclosed above, as at the Latest Practicable Date, our Group does not have any banking or
credit facilities from nancial institutions, or other borrowings or indebtedness.
Operating Lease Commitments
As at the Latest Practicable Date, our Group has commitments for future minimum lease payments under
non-cancellable operating leases as follows:
As at the Latest
Practicable Date
(S$000)
Within one (1) year 180
After one (1) year 36
Total 216
The operating lease commitments relate to the lease of ofce premises at 600 North Bridge Road,
Parkview Square, #12-01, Singapore 188778, which is our principal place of business in Singapore, and
Unit F, 13th Floor, Xinshidai Guangchang, No. 42 Wenwu Road, Xinhua Avenue, Chengdu City, Sichuan
Province, which is our sales ofce in the PRC.
Capital Commitments
As at the Latest Practicable Date, our Group has the following capital commitments:
As at the Latest
Practicable Date
(S$000)
Purchase of plant and equipment 386
Purchase of land use rights 720
Total 1,106
The above capital commitments of our Group are expected to be nanced by internal cash resources,
bank borrowings and part of the net proceeds from the issue of New Shares.
Contingent Liabilities
As at the Latest Practicable Date, to the best of our knowledge, information and belief, we are not aware
of any contingent liabilities which may have a material effect on the nancial position and protability of
our Group.
Save as disclosed in this Offer Document, from 31 July 2013 to the Latest Practicable Date, there have
been no material changes in our total capitalisation and indebtedness except for changes in our retained
earnings arising from the day-to-day operations of our Group in the ordinary course of business.
For the Period Under Review, our growth and operations were primarily nanced through a combination
of shareholders equity and loans, cash ow generated from operating activities, short-term bank
borrowings, government grants, compensation obtained from the local PRC authorities for, inter alia, the
Relocation Exercise, and assets and other forms of investments by Dashan, one (1) of our third party
co-operation partners. Under the Dashan Co-operation Agreements, Dashan is required to, inter alia,
provide certain assets (such as machinery and equipment) to Mianzhu Norwest for its mining operations
and fund certain other expenses arising from our mining and exploration activities. During the same
period, our principal uses of cash have been for working capital requirements and nancing our capital
expenditure. The net cash used in our operating activities and net cash used in investing activities have
been funded by the cash generated from our nancing activities. Please refer to the section entitled
Managements Discussion and Analysis of Results of Operations and Financial Position - Liquidity and
Capital Resources of this Offer Document for further details of the net cash ows generated from/ (used
in) operating activities and investing activities, and the net increase in cash and cash equivalents for the
Period Under Review.

72
CAPITALISATION AND INDEBTEDNESS
We recorded negative working capital for the Period Under Review due mainly to the capital expenditure
incurred mainly in respect of the construction of the P
4
Plant and the outstanding shareholders loan taken
to part nance the cost of the Rebuilding Programme.

The government grants and proceeds from Relocation Exercise have been significantly utilised
in the Period Under Review. From FY2013 onwards, we do not expect to receive any signicant
benet from such government grants and proceeds. In addition, we have yet to commence Chemical
Production Operations. As at the Latest Practicable Date, we have completed the construction of the
P
4
Plant at the New Gongxing Site under Phase 1 of the Rebuilding Programme and are in the
preliminary stages of Phase 2 of the Rebuilding Programme. Our Group commenced trial production
of P
4
in FY2013. Hence, we do not expect any signicant revenue contribution from our Chemical
Production Operations in FY2013, until such time when the production and sale of P
4
commences on
a commercial scale. Furthermore, in view of the expected commencement of production of P
4
, we have
been progressively building up our inventory of phosphate rocks to be used for the production of P
4

while selectively selling phosphate rocks. As at 30 June 2013, we have approximately 100,000 tonnes of
phosphate rocks held as inventory.

As at 31 December 2012, we have cash and cash equivalents of approximately S$4.8 million, of which
approximately S$159,000 has been pledged. Based on approximately 100,000 tonnes of phosphate rocks
held as inventory as at 30 June 2013 and the average selling price of phosphate rocks for FY2012 of
approximately RMB445 per tonne, the market value of our inventory of phosphate rocks is approximately
RMB44.5 million (equivalent to approximately S$9.2 million based on the Exchange Rate). As at the
Latest Practicable Date, our committed but unpaid capital expenditure in relation to Phase 1 of the
Rebuilding Programme and Phase 2 of the Rebuilding Programme is approximately S$5.1 million. The
balance of the construction for Phase 2 of the Rebuilding Programme is proposed to be partly funded by
the net proceeds from the issue of the New Shares and no commitment has been made by our Group
for such construction activities or the construction of the ue gas storage facility for Phase 1 of the
Rebuilding Programme.
In view of the foregoing and taking into consideration the following:
(i) OCBC Bank has granted an overdraft facility of S$1,000,000 to our Company. The facility is
secured by a charge provided by Eastcomm (over its xed deposit account);
(ii) with the commencement of the production and sale of P
4
, our Group will generate revenue and
operating cash ows, which should improve our working capital position;
(iii) the development and expansion of our Mining Operations, the construction of the ue gas storage
facility and construction of Phase 2 of the Rebuilding Programme will be partly funded by the net
proceeds from the issue of the New Shares, and the extent and timing of such development and
expansion, and the Rebuilding Programme, can be adjusted in accordance with the completion of
and net proceeds raised from the issue of the New Shares; and
(iv) the Notes were issued by Eastcomm, not the Company. In the event that the Notes are to be
redeemed and monies repaid to the Noteholders, such obligations will rest with Eastcomm, not the
Company. The Companys only obligation is to allot and issue Consideration Shares (as dened
in the section entitled Restructuring Exercise of this Offer Document) to the Noteholders, if so
directed by Eastcomm. Please refer to the section entitled Restructuring Exercise of this Offer
Document for further details of the allotment and issuance of Consideration Shares,
our Directors are of the reasonable opinion that, after having made due and careful enquiry, our Group
will have adequate working capital available to us as at the date of lodgement of this Offer Document to
meet our Groups present requirements and for at least 18 months from the date of listing.
The Sponsor is of the reasonable opinion that, after having made due and careful enquiry and taking
into account all the above matters, our Group will have adequate working capital available to us as at the
date of lodgement of this Offer Document to meet our Groups present requirements and for at least 18
months from the date of listing.
73
DILUTION
Dilution is dened as the amount by which the Invitation Price paid by the applicants for our Invitation
Shares in this Invitation exceeds our NAV per Share immediately after this Invitation.
The unaudited NAV per Share as at 31 March 2013 before adjusting for the net proceeds from the issue
of the New Shares and based on the pre-Invitation issued share capital of 702,400,000 Shares was 4.28
cents per Share.
Pursuant to the Invitation, 97,600,000 New Shares will be issued at the Invitation Price of S$0.25 for
each New Share. The NAV per Share as at 31 March 2013 after adjusting for the estimated net proceeds
from the issue of New Shares and based on the post-Invitation issued and paid up share capital of
800,000,000 Shares would have been 6.45 cents per Share. This represents an immediate increase in
the NAV per Share of 2.17 cents per Share to our existing Shareholders and an immediate dilution in the
NAV per Share of 18.55 cents per Share or approximately 74.2% to new investors.
The following table illustrates such dilution on a per Share basis:
Invitation Price 25.00 cents
Unaudited NAV per Share before Invitation
(as at 31 March 2013)
4.28 cents
Increase in NAV per Share pursuant to the Invitation attributable to the existing Shareholders 2.17 cents
NAV per Share after the Invitation and as adjusted for the estimated net proceeds of the
New Shares
6.45 cents
Dilution in NAV per Share to new investors 18.55 cents
Dilution in NAV per Share to new investors 74.2 %
The following table summarises the total number of Shares acquired and directly held by our Directors,
Substantial Shareholders and the Noteholders since incorporation, the total consideration paid by them
and the average effective cost per Share paid by them and our new investors pursuant to the Invitation:
Number of
Shares
(after Share Split)
Total
consideration
(S$)
Average effective
cost per Share
(cents)
Directors
Dr. Ong Hian Eng 6,164,384 1,155,822 18.75
Simon Ong 2,919,306 547,370 18.75
Raymond Ong 2,919,306 547,370 18.75
Ong Bee Pheng

9,408,037 1,764,007 18.75
Hong Pian Tee
Goh Yeow Tin
Francis Lee
Substantial Shareholders
(other than the Directors)
Eastcomm 538,724,137 4,009,012 0.74
Melissa Ong 5,027,690 942,692 18.75
74
DILUTION
Number of
Shares
(after Share Split)
Total
consideration
(S$)
Average effective
cost per Share
(cents)
Noteholders
(other than the Directors and
Substantial Shareholders)
Advantage Link 12,974,612 2,432,740 18.75
Cheong Hock @ Cheong Kim Hock 8,178,083 1,533,390 18.75
Guan Meng Kuan 1,463,927 274,486 18.75
Heng Kheng Long 1,696,592 318,111 18.75
Heng Kheng Ngiap 564,866 105,912 18.75
HHEO 24,452,384 4,384,822 17.93
Huang Taoyuan 973,096 182,455 18.75
Kiong James 2,827,653 530,185 18.75
Kong Sou Hui Grace 9,408,037 1,764,007 18.75
Kong Sou Yan 5,475,800 1,026,712 18.75
Lee Han John 648,731 121,637 18.75
Lee Soo Hian James 1,946,192 364,911 18.75
Linawati Alamsjah 648,731 121,637 18.75
Link Well 5,738,886 1,076,041 18.75
Liu Jun Hang 3,525,962 661,118 18.75
MIB Investments 2,737,900 513,356 18.75
Ng Siew Tin 6,162,959 1,155,555 18.75
Ng Yew Khim Dennis 1,621,827 304,092 18.75
Ngo Chong Yong Calvin 573,889 107,604 18.75
Ngo Sio Fung Edna 573,889 107,604 18.75
Ong Bin Lay 1,454,430 272,705 18.75
Ong Chu Poh 4,281,608 802,801 18.75
Ong Eng Keong 9,408,037 1,764,007 18.75
Ong Kwee Eng 16,218,265 3,040,925 18.75
Ong Lean Wan 1,621,827 304,092 18.75
Seacare Foundation 5,738,886 1,076,041 18.75
Tan Tin Yeow 1,639,606 307,426 18.75
Tan Wee Hiok Allan 547,580 102,671 18.75
Toh Thiam Seah Victor 3,243,653 608,185 18.75
Wong Liang Kwang 564,866 105,912 18.75
Xue Qinglin 324,366 60,818 18.75
New investors pursuant to the Invitation 122,000,000 30,500,000 25.00
Please refer to the section entitled Share Capital and Shareholders Shareholders of this Offer
Document for further details on our Directors, Substantial Shareholders and Noteholders. Subsequent
to the Restructuring Exercise, Eastcomm directed the issue of 163,675,863 shares to the Noteholders
pursuant to Eastcomms redemption of the Notes.
75
RESTRUCTURING EXERCISE
In anticipation of the Invitation, our Group undertook the Restructuring Exercise to rationalise and
streamline our Groups corporate structure, pursuant to which our Company became the holding
company for our operations. Our Restructuring Exercise was completed on 16 September 2013.
The details of our Restructuring Exercise are as follows:
(1) Incorporation of our Company
Our Company was incorporated in Singapore on 3 January 2012 in accordance with the
Companies Act as a private company limited by shares with an initial paid-up share capital of
S$2.00 comprising two (2) Shares held by Eastcomm.
(2) Acquisition of the entire issued and paid-up share capital of Norwest Chemicals
Our Company entered into the Restructuring Agreement dated 19 June 2013 with Eastcomm
to acquire the entire issued and paid-up share capital of Norwest Chemicals for an aggregate
purchase consideration of S$33,544,782, based on the unaudited net asset value of Norwest
Chemicals as at 30 April 2013.
Pursuant to the Restructuring Agreement, the purchase consideration shall be satised by the
allotment and issuance of Shares (the Consideration Shares) as follows:
(i) 16,000,000 Consideration Shares to be allotted and issued to Eastcomm; and
(ii) the balance of the Consideration Shares (after the Share Split as further described in
paragraph 3 below) to be allotted and issued as follows:
(a) 474,724,129 Consideration Shares to Eastcomm; and
(b) 163,675,863 Consideration Shares to the Noteholders (as further described in
paragraph 4 below).
(3) Sub-Division of Shares
On 6 September 2013, the 16,000,002 Shares in our Company were sub-divided into 64,000,008
Shares (the Share Split).
(4) Redemption of Notes in Eastcomm held by Noteholders
On 16 September 2013, Eastcomm redeemed the Notes issued by Eastcomm to the Noteholders.
In lieu of payment of cash, Eastcomm directed our Company to allot and issue 163,675,863
Consideration Shares to the Noteholders. These Consideration Shares were issued by our
Company as part of the consideration for our Companys acquisition of Norwest Chemicals from
Eastcomm.
Please refer to the section entitled Dilution of this Offer Document for details of the shares held by
Eastcomm and the Noteholders subsequent to the redemption of the Notes.
Following the completion of the Restructuring Exercise, Eastcomm will hold 538,724,137 Shares.
76
SHARE CAPITAL AND SHAREHOLDERS
We were incorporated in Singapore on 3 January 2012 under the Companies Act as a private limited
company under the name of AsiaPhos Private Limited. As at the Latest Practicable Date, the entire
issued and paid-up share capital of our Company was S$16,000,002 comprising 16,000,002 ordinary
shares.
At the Extraordinary General Meetings held on 22 August 2013 and 6 September 2013, our Shareholders
approved, inter alia, the following:
(i) the conversion of our Company into a public limited company and the change of our name to
AsiaPhos Limited;
(ii) the Share Split;
(iii) the adoption of a new set of Articles of Association;
(iv) the allotment and issue of the New Shares pursuant to the Invitation. The New Shares, when
allotted, issued and fully paid-up, will rank pari passu in all respects with our existing issued and
fully paid-up Shares;
(v) the adoption of the AsiaPhos Performance Share Plan, and the authorisation of our Directors,
pursuant to Section 161 of the Companies Act, to allot and issue Shares upon the release of
Awards under the AsiaPhos Performance Share Plan;
(vi) the dealing and quotation of all our Shares (including the Vendor Shares and the New Shares to be
allotted and issued) on the Catalist; and
(vii) authority be given to our Directors to:
(a) (1) issue Shares whether by way of rights, bonus or otherwise; and/ or
(2) 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) 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 our Directors may in their absolute discretion deem t; and
(b) (notwithstanding the authority conferred may have ceased to be in force) issue Shares in
pursuance of any Instrument made or granted by our Directors while such authority was in
force,
provided that:
(1) the aggregate number of Shares issued pursuant to such authority (including new Shares
to be issued in pursuance to Instruments made or granted pursuant to such authority) shall
not exceed one hundred per cent. (100%) of the total number of issued Shares excluding
treasury shares (as calculated in accordance with sub-paragraph (2) below), of which the
aggregate number of Shares to be issued other than on a pro rata basis to Shareholders
may not exceed 50 per cent. (50%) of the total number of issued Shares excluding treasury
shares (as calculated in accordance with sub-paragraph (2) below);
(2) (subject to such manner of calculation as may be prescribed by the SGX-ST) for the purpose
of determining the aggregate number of Shares that may be issued under sub-paragraph (1)
above, the percentage of issued Shares shall be based on the total number of issued Shares
excluding treasury shares immediately following the close of the Invitation, after adjusting for:
77
SHARE CAPITAL AND SHAREHOLDERS
(a) new Shares arising from the conversion or exercise of any convertible securities or
share options or vesting of share awards which are outstanding or subsisting at the
time such authority is given; and
(b) any subsequent bonus issue, consolidation or subdivision of Shares;
(3) in exercising the authority conferred, our Company shall comply with the provisions of the
Catalist Rules for the time being in force (unless such compliance has been waived by the
SGX-ST) and the Articles; and
(4) (unless revoked or varied by our Company in general meeting) such authority shall continue
in force until the conclusion of the next Annual General Meeting of our Company or the date
by which the next Annual General Meeting of our Company is required by law to be held,
whichever is the earlier.
As at the date of this Offer Document, our Company has only one (1) class of Shares, being ordinary
shares. The rights and privileges of our Shares are stated in the Articles of Association of our Company.
There are no founder, management or deferred Shares.
Save as disclosed to in the sections entitled Restructuring Exercise and General Information on our
Group Legal Opinion from King & Wood Mallesons Co-operation Arrangement with Dashan of this
Offer Document, no person has been, or has the right to be, given an option to subscribe for or purchase
any securities of our Company or our subsidiaries, and no option to subscribe for and/or purchase Shares
in our Company has been granted to, or was exercised by, any of our Directors or Key Executives.
Details of the changes in the entire issued and paid-up share capital of our Company since the date of
incorporation and immediately after the Invitation are set out below:
Number of Issued
Shares (S$)
Issued and fully-paid Shares as at incorporation 2 2
Initial issue of Shares pursuant to Restructuring Exercise 16,000,000 16,000,000
Total issued Shares before Share Split 16,000,002 16,000,002
Total issued Shares after Share Split 64,000,008 16,000,002
Final issue of Shares pursuant to Restructuring Exercise 638,399,992 17,544,782
Pre-Invitation share capital 702,400,000 33,544,784
New Shares to be issued pursuant to the Invitation
(1)
97,600,000 24,400,000
Post-Invitation share capital 800,000,000 57,944,784
Note:
(1) This has not taken into account a portion of the listing expenses incurred by our Company in connection with the Invitation
which will be deducted against share capital, in accordance with the Singapore Financial Reporting Standards.
Our Company
The following table sets out the changes in the issued and paid-up share capital of our Company for the
period of three (3) years preceding the Latest Practicable Date.
Date of Issue Purpose
Issue price per
Share (S$)
Number of Shares
issued
Resultant issued
share capital (S$)
3 January 2012 Issue of Shares upon
incorporation
1 2 2
12 August 2013 Initial issue of Shares pursuant
to Restructuring Exercise
1 16,000,000 16,000,002
16 September 2013 Share Split
(1)
16,000,002
16 September 2013 Final issue of Shares pursuant
to Restructuring Exercise
0.03 638,399,992 33,544,784
Note:
(1) The number of Shares in the capital of the Company after the Share Split was 64,000,008.
78
SHARE CAPITAL AND SHAREHOLDERS
Our Subsidiaries
The following table sets out the changes in the issued and paid-up share capital and registered capital of
our subsidiaries for the period of three (3) years preceding the Latest Practicable Date.
Norwest Chemicals
Date of issue Purpose
Issue price
per Share (S$)
Number of
Shares issued
Resultant issued
share capital (S$)
8 December 2011 Capitalisation of advance
from Eastcomm
1.00 12,000,000 21,048,447
25 June 2012 Capitalisation of advance
from Eastcomm
1.00 7,000,000 28,048,447
17 September
2012
Share issuance to
Eastcomm
1.00 4,500,000 32,548,447
21 January 2013 Capitalisation of advance
from Eastcomm
1.00 646,400 33,194,847
21 January 2013 Share issuance to
Eastcomm
1.00 1,200,000 34,394,847
Mianzhu Norwest
Date of
Payment Purpose
Amount of
increase
in registered
capital
(RMB)
Resultant
registered
capital (RMB)
15 December 2011 Increase in capital contribution by way of cash 60,000,000 140,000,000
Save as disclosed above and in the sections entitled Restructuring Exercise and AsiaPhos
Performance Share Plan of this Offer Document, no shares in, or debentures of, our Company or any of
our subsidiaries have been issued, or are proposed to be issued, as fully or partly paid-up for cash or for
a consideration other than cash, for the three (3) years preceding the Latest Practicable Date.
SHAREHOLDERS
Our Shareholders and their respective equity interests in our Company immediately before the Invitation
(but after the Restructuring Exercise), and immediately after the Invitation are set out below:
Before the Invitation
(after the Restructuring Exercise)
After the Invitation
(after deducting the Vendor Shares)
Direct Interest Deemed Interest Direct Interest Deemed Interest
No. of Shares % No. of Shares % No. of Shares % No. of Shares %
Directors
Dr. Ong Hian Eng
(1)(2)(3)(6)(7)
(8)(9)(12)(14)(16)(17)
6,164,384 0.9 548,132,174 78.0 6,164,384 0.8 548,132,174 68.5
Simon Ong
(1)(2)(7)(9)(12)(13)(14)
(16)(17)
2,919,306 0.4 538,724,137 76.7 2,919,306 0.4 538,724,137 67.3
Raymond Ong
(1)(2)(3)(7)(9)(12)
(13)(14)(16)(17)
2,919,306 0.4 539,372,868 76.8 2,919,306 0.4 539,372,868 67.4
Ong Bee Pheng
(1)(3)(7)(9)(12)
(14)(16)(17)
9,408,037 1.3 9,408,037 1.2
Hong Pian Tee
Goh Yeow Tin
(18)

Francis Lee
79
SHARE CAPITAL AND SHAREHOLDERS
Before the Invitation
(after the Restructuring Exercise)
After the Invitation
(after deducting the Vendor Shares)
Direct Interest Deemed Interest Direct Interest Deemed Interest
No. of Shares % No. of Shares % No. of Shares % No. of Shares %
Substantial Shareholders
(other than Directors)
Astute Ventures
(2)(3)
538,724,137 76.7 538,724,137 67.3
Eastcomm
(2)(3)
538,724,137 76.7 538,724,137 67.3
Melissa Ong
(1)(2)(3)(7)(9)(12)(13)
(14)(16)(17)
5,027,690 0.7 538,724,137 76.7 5,027,690 0.6 538,724,137 67.3
Other Shareholders
Advantage Link
(4)
12,974,612 1.9 12,974,612 1.6
Cheong Hock
@ Cheong Kim Hock 8,178,083 1.2 2,178,083 0.3
Guan Meng Kuan
(5)
1,463,927 0.2 1,463,927 0.2
Heng Kheng Long 1,696,592 0.2 496,592 0.1
Heng Kheng Ngiap 564,866 0.1 164,866 neg
(20)

HHEO
(6)
24,452,384 3.5 24,452,384 3.1
Huang Taoyuan 973,096 0.1 973,096 0.1
Kiong James 2,827,653 0.4 827,653 0.1
Kong Sou Hui Grace
(7)(8)
9,408,037 1.3 9,408,037 1.2
Kong Sou Yan
(7)(8)
5,475,800 0.8 5,475,800 0.7
Lee Han John 648,731 0.1 648,731 0.1
Lee Soo Hian James 1,946,192 0.3 1,946,192 0.2
Linawati Alamsjah
(9)
648,731 0.1 648,731 0.1
Link Well
(10)
5,738,886 0.8 1,738,886 0.2
Liu Jun Hang 3,525,962 0.5 3,525,962 0.4
MIB Investments
(11)
2,737,900 0.4 737,900 0.1
Ng Siew Tin
(2)(12)(17)
6,162,959 0.9 6,162,959 0.8
Ng Yew Khim Dennis
(13)
1,621,827 0.2 1,621,827 0.2
Ngo Chong Yong Calvin
(14)
573,889 0.1 173,889 neg
(20)

Ngo Sio Fung Edna
(14)
573,889 0.1 173,889 neg
(20)

Ong Bin Lay
(15)
1,454,430 0.2 1,454,430 0.2
Ong Chu Poh 4,281,608 0.6 2,281,608 0.3
Ong Eng Keong
(16)
9,408,037 1.3 9,408,037 1.2
Ong Kwee Eng
(2)(12)(17)
16,218,265 2.3 16,218,265 2.0
Ong Lean Wan 1,621,827 0.2 1,621,827 0.2
Seacare Foundation
(18)
5,738,886 0.8 1,738,886 0.2
Tan Tin Yeow 1,639,606 0.2 439,606 0.1
Tan Wee Hiok Allan 547,580 0.1 147,580 ]neg
(20)

Toh Thiam Seah
Victor
(15) (19)
3,243,653 0.5 3,243,653 0.4
Wong Liang Kwang 564,866 0.1 164,866 neg
(20)

Xue Qinglin 324,366 0.1 324,366 neg
(20)

New Public
Shareholders 122,000,000 15.3
Total: 702,400,000 100.0 800,000,000 100.0
Notes:
(1) Our CEO and Executive Director, Dr. Ong Hian Eng, and our Non-Executive Director, Ong Bee Pheng, are father and
daughter.
Our CEO and Executive Director, Dr. Ong Hian Eng, is the uncle of (i) our Executive Director, Simon Ong; (ii) our Non-
Executive Director, Raymond Ong; and (iii) our Substantial Shareholder, Melissa Ong, who are siblings.
80
SHARE CAPITAL AND SHAREHOLDERS
Our Executive Director, Simon Ong, our Non-Executive Directors, Raymond Ong and Ong Bee Pheng, and our Substantial
Shareholder, Melissa Ong, are cousins.
(2) Ong Kwee Eng, a sibling of our CEO and Executive Director, Dr. Ong Hian Eng, transferred his shares in Eastcomm to
Astute Ventures. The directors of Astute Ventures are our Executive Director, Simon Ong, our Non-Executive Director,
Raymond Ong, and our Substantial Shareholder, Melissa Ong. The shareholders of Astute Ventures are our Executive
Director, Simon Ong, our Non-Executive Director, Raymond Ong, and our Substantial Shareholder, Melissa Ong, and their
parents, Ong Kwee Eng and Ng Siew Tin, holding 20.0%, 20.0%, 42.0%, 9.0% and 9.0% of Astute Ventures share capital,
respectively.
(3) The directors of Eastcomm are our CEO and Executive Director, Dr. Ong Hian Eng, our Non-Executive Directors, Raymond
Ong and Ong Bee Pheng, and our Substantial Shareholder, Melissa Ong. The shareholders of Eastcomm are our CEO and
Executive Director, Dr. Ong Hian Eng, our Key Executive, Chia Chin Hau, Astute Ventures, and WYY Investment (the sole
shareholder of WYY Investment is our Key Executive, Wang Xuebo), holding 45.5%, 0.7%, 45.5% and 8.4% of Eastcomms
share capital, respectively.
Dr. Ong Hian Eng and Astute Ventures are each deemed interested in the Shares held by Eastcomm.
(4) Advantage Link is a company incorporated in the British Virgin Islands. All of the shares in the issued and paid-up share
capital of Advantage Link are held by Espira Holdings Ltd, a company incorporated in the Independent State of Samoa. All of
the shares in the issued and paid-up capital of Espira Holdings Ltd are held by Fidelitycorp Limited as trustee of the Espira
Trust. Espira Trust is a discretionary trust of which (i) the current beneciary is Lim Chee Kian; and (ii) the settlor is Lim Chee
Kian. Lim Chee Kian is deemed interested in the Shares held by Advantage Link.
(5) Guan Meng Kuan is a director of Hwa Hong, HHEO, Hwa Hong Capital (Pte) Limited and Hwa Hong Investments Pte Ltd,
and the former Legal Representative of Mianzhu Norwest.
(6) HHEO is a wholly-owned subsidiary of SGX-ST listed Hwa Hong, which is an Associate of our CEO and Executive Director,
Dr. Ong Hian Eng.
(7) Kong Sou Hui Grace is the spouse of our CEO and Executive Director, Dr. Ong Hian Eng. Dr. Ong Hian Eng is deemed
interested in the Shares held by Kong Sou Hui Grace. Kong Sou Hui Grace is also an immediate family member of our Non-
Executive Director, Ong Bee Pheng, and an extended family member of our Executive Director, Simon Ong, Non-Executive
Director, Raymond Ong, and our Substantial Shareholder, Melissa Ong. Kong Sou Hui is an immediate family member of
Kong Sou Yan - please refer to Note (8).
(8) Kong Sou Yan is an extended family member of our CEO and Executive Director, Dr. Ong Hian Eng, and an immediate family
member of Kong Sou Hui Grace - please refer to Note (7).
(9) Linawati Alamsjah is the spouse of our Non-Executive Director, Raymond Ong. Raymond Ong is deemed interested in the
Shares held by Linawati Alamsjah. Linawati Alamsjah is also an extended family member of our Executive Director, Simon
Ong, our CEO and Executive Director, Dr. Ong Hian Eng, our Non-Executive Director, Ong Bee Pheng, and our Substantial
Shareholder, Melissa Ong.
(10) Link Well is a company incorporated in Hong Kong Special Administrative Region of the PRC. The sole director of Link Well is
Chan Kern Miang. Its shareholders are Ang Mui Yee and Chan Kern Miang.
(11) MIB Investments is a company incorporated in Singapore. The sole director of MIB Investments is Kho Chung Wah James. Its
shareholders are Soh Poh Gin, Chen Dan and Ngo Swee Liang.
(12) Ng Siew Tin is an immediate family member of our Executive Director, Simon Ong, our Non-Executive Director, Raymond
Ong, and our Substantial Shareholder, Melissa Ong. Ng Siew Tin is also an extended family member of our CEO and
Executive Director, Dr. Ong Hian Eng, and our Non-Executive Director, Ong Bee Pheng. Ng Siew Tin is also the spouse of
Ong Kwee Eng please refer to Note (17).
(13) Ng Yew Khim Dennis is an extended family member of our Executive Director, Simon Ong, and our Non-Executive Director,
Raymond Ong, and our Substantial Shareholder, Melissa Ong.
(14) Ngo Chong Yong Calvin and Ngo Sio Fung Edna are extended family members of our CEO and Executive Director, Dr. Ong
Hian Eng, our Executive Director, Simon Ong, our Non-Executive Directors, Raymond Ong and Ong Bee Pheng, and our
Substantial Shareholder, Melissa Ong.

(15) Ong Bin Lay is the spouse of Toh Thiam Seah Victor - please refer to Note (19).
(16) Ong Eng Keong is an immediate family member of our CEO and Executive Director, Dr. Ong Hian Eng and our Non-Executive
Director, Ong Bee Pheng, and an extended family member of our Executive Director, Simon Ong, Non-Executive Director
Raymond Ong, and our Substantial Shareholder, Melissa Ong.
(17) Ong Kwee Eng is an immediate family member of our CEO and Executive Director, Dr. Ong Hian Eng, our Executive Director,
Simon Ong, our Non-Executive Director, Raymond Ong, and our Substantial Shareholder, Melissa Ong. Ong Kwee Eng is
also an extended family member of our Non-Executive Director, Ong Bee Pheng. Ong Kwee Eng is also the spouse of Ng
Siew Tin please refer to Note (12).
81
SHARE CAPITAL AND SHAREHOLDERS
(18) Seacare Foundation is a company incorporated in Singapore. Its directors are Lee Van Chong, Leow Ching Chuan,
Nazarudin Bin Nandok, Kam Soon Huat, Lee Chee Fong, and Tan Keng Hui Daniel. Its sole shareholder is Seacare Co-
operative Ltd. The directors of Seacare Co-operative Ltd are Leow Ching Chuan, Lee Van Chong, Sim Hor Pheng, Kam
Soon Huat, Mohamed Idris Bin Mohamed Ibrahim, Lee Chee Fong, Toh Hwee Tin, Raja Mohd Said Bin Mohd Shak and our
Independent Director, Goh Yeow Tin.
(19) Toh Thiam Seah Victor is the (Supervisor) of Mianzhu Norwest. Please refer to the section entitled Management
and Corporate Governance Legal Representative and Supervisor of our PRC Subsidiary, Mianzhu Norwest of this Offer
Document for further details on the role of the Supervisor.
(20) neg refers to negligible.
The Shares held by our Directors, Key Executives and Substantial Shareholders do not carry different
voting rights from the New Shares which are the subject of the Invitation.
Save as disclosed above, our Company is not directly or indirectly owned or controlled by another
corporation, any government or other natural or legal person whether severally or jointly. There is no
known arrangement, the operation of which may, at a subsequent date, result in a change in control of
our Company.
Save as disclosed in the section entitled Restructuring Exercise of this Offer Document, there has been
no signicant change in the percentage of ownership of the issued and paid-up share capital of our
Company between the date of its incorporation and the Latest Practicable Date.
VENDORS
The names of the Vendors and the number of Vendor Shares which they will offer pursuant to the
Invitation are set out below:
Name
Shares held
immediately before
the Invitation
Vendor Shares offered
pursuant to the Invitation
Shares held
immediately after
the Invitation
Number of
Shares
% of pre-
Invitation
share
capital
Number of
Shares
% of pre-
Invitation
share
capital
% of post-
Invitation
share
capital
Number of
Shares
% of post-
Invitation
share
capital
Cheong Hock
@ Cheong Kim Hock
8,178,083 1.2 6,000,000 0.9 0.8 2,178,083 0.3
Heng Kheng Long 1,696,592 0.2 1,200,000 0.2 0.2 496,592 0.1
Heng Kheng Ngiap 564,866 0.1 400,000 0.1 0.1 164,866 neg
(1)
Kiong James 2,827,653 0.4 2,000,000 0.3 0.3 827,653 0.1
Link Well 5,738,886 0.8 4,000,000 0.6 0.5 1,738,886 0.2
MIB Investments 2,737,900 0.4 2,000,000 0.3 0.3 737,900 0.1
Ngo Chong Yong Calvin 573,889 0.1 400,000 0.1 0.1 173,889 neg
(1)
Ngo Sio Fung Edna 573,889 0.1 400,000 0.1 0.1 173,889 neg
(1)
Ong Chu Poh 4,281,608 0.6 2,000,000 0.3 0.3 2,281,608 0.3
Seacare Foundation 5,738,886 0.8 4,000,000 0.6 0.5 1,738,886 0.2
Tan Tin Yeow 1,639,606 0.2 1,200,000 0.2 0.2 439,606 0.1
Tan Wee Hiok Allan 547,580 0.1 400,000 0.1 0.1 147,580 neg
(1)
Wong Liang Kwang 564,866 0.1 400,000 0.1 0.1 164,866 neg
(1)
Note:
(1) neg refers to negligible.
The address of each of the Vendors can be found in the section entitled Corporate Information of this
Offer Document.
82
SHARE CAPITAL AND SHAREHOLDERS
Save as disclosed in this Offer Document, none of our Directors or Substantial Shareholders has an
interest in the Vendor Shares.
Save as disclosed in this Offer Document, none of the Vendors have any position, ofce or other material
relationship with our Group within the period of three (3) years before the date of lodgment of this Offer
Document.
MORATORIUM
Controlling Shareholders and their Associates
Under Rule 443 of the Catalist Rules, (i) our Controlling Shareholders, namely, Dr. Ong Hian Eng, Simon
Ong, Raymond Ong, Melissa Ong, Eastcomm and Astute Ventures; and (ii) their Associates; and (iii)
Executive Directors with interest of more than ve per cent. (5%) as at our Companys date of admission
to Catalist will be deemed promoters of the Company.
To demonstrate their commitment to the Company and its subsidiaries, each of (i) our Controlling
Shareholders, as well as (ii) our Non-Executive Director, Ong Bee Pheng; (iii) Kong Sou Hui Grace; (iv)
Linawati Alamsjah; (v) Ong Eng Keong; (vi) Ong Kwee Eng; (vii) Ng Siew Tin; and (viii) Kong Sou Yan
(collectively, the Related Shareholders) have each undertaken to the Sponsor and our Company, inter
alia, that, from the date of the issue of the Shares until the date falling 12 months after our Companys
date of admission to Catalist (the Initial Period), they will not, without the prior written consent of the
Sponsor, perform any of the following activities:
(i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant to purchase, lend, hypothecate or encumber or
otherwise transfer, assign, dispose or realise, directly or indirectly, any Shares or any securities
convertible into or exercisable or exchangeable for or which carry rights to subscribe or purchase
any Shares; or
(ii) enter into any swap, hedge or other arrangement that transfers to another, in whole or in part,
any of the economic consequences of ownership of Shares or any securities convertible into or
exercisable or exchangeable for or which carry rights or subscribe or purchase any Shares; or
(iii) deposit any Shares or any securities convertible into or exchangeable for or which carry rights to
subscribe or purchase any Shares in any depository receipt facilities (other than CDP); or
(iv) enter into a transaction which is designed or which may reasonably be expected to result in any of
the above; or
(v) publicly announce any intention to do any of the above.
(collectively, the Restricted Activities).
The restriction shall apply to all Shares held directly by the Related Shareholders immediately after the
Invitation, being 612,484,689 Shares (representing 76.6% of our Companys post-Invitation share capital.
For the six (6) month period after the Initial Period, the restriction shall apply to fty per cent. (50%) of the
Shares held directly by the Related Shareholders immediately after the Invitation.
We were informed by Hwa Hong and HHEO on 26 August 2013 as follows:
(i) Hwa Hong and HHEO applied to the SGX-ST for a waiver from the moratorium requirement for
promoters under the Catalist Rules on the grounds that:
(a) neither Hwa Hong nor HHEO is a promoter in its own right (i.e. neither Hwa Hong nor HHEO
has or will have a controlling interest in our Company, both before and immediately after the
Invitation);
83
SHARE CAPITAL AND SHAREHOLDERS
(b) the interests of Dr. Ong Hian Eng and all of his siblings (Dr. Ongs Siblings) in Shares that
will be held by HHEO, are held through their shareholding interests in Hwa Hong, a company
listed on the SGX-ST;
(c) immediately after the Invitation, HHEO will hold less than ve per cent. (5%) of the equity
interest in our Company;
(d) Dr. Ong Hian Engs controlling interest in our Company (held partly directly, and partly
through Eastcomm) will be subject to moratorium; and
(e) none of Dr Ongs Siblings is involved in the management of our Company.
(ii) The SGX-ST has waived (the SGX-ST Waiver) the moratorium requirements for promoters under
the Catalist Rules applicable to Hwa Hong, HHEO and/or Dr. Ongs Siblings (in connection with
their interests in the Shares that will be held by HHEO, Hwa Hongs wholly-owned subsidiary).
(iii) The SGX-ST Waiver notwithstanding, HHEO has undertaken to the Sponsor, that it will not, without
the prior written consent of the Sponsor, perform any of the Restricted Activities from the date
of issue of the Shares to HHEO, until the date falling six (6) months after our Companys date of
admission to Catalist for 24,452,384 Shares (representing 3.1% of our Companys post-Invitation
share capital).
In addition, each of the shareholders of Astute Ventures, Eastcomm, and WYY Investment have given a
similar undertaking to the Sponsor and our Company not to reduce any part of their respective interest
in Eastcomm, Astute Ventures and WYY Investment from the date of the said undertaking until the date
falling six (6) months after the Initial Period. Each of the shareholders of Link Well and MIB Investments
have also given a similar undertaking to the Sponsor and the Company not to reduce any part of their
respective interests in Link Well and MIB Investments from the date of the said undertaking until the date
falling 12 months after our Companys date of admission to Catalist.
Further, (i) Ngo Sio Fung Edna; (ii) Ngo Chong Yong Calvin; (iii) Ng Yew Khim Dennis; (iv) Toh Thiam
Seah Victor; (v) Ong Bin Lay; (vi) Link Well; (vii) Ong Chu Poh; (viii) Seacare Foundation; (ix) Heng Kheng
Long; (x) Kiong James; (xi) Heng Kheng Ngiap; (xii) Wong Liang Kwang; (xiii) Cheong Hock @ Cheong
Kim Hock; (xiv) Tan Wee Hiok Allan; (xv) MIB Investments; (xvi) Tan Tin Yeow; (xvii) Advantage Link; (xviii)
Guan Meng Kuan; (xix) Huang Taoyuan; (xx) Lee Soo Hian James; (xxi) Liu Jun Hang; (xxii) Ong Lean
Wan; (xxiii) Xue Qinglin; and (xxiv) Lee Han John, will each undertake to the Sponsor and our Company,
that they will not, without the prior written consent of the Sponsor, perform any of the Restricted Activities
from the date of issuance of the Shares until the date falling six (6) months after our Companys date
of admission to Catalist on the aggregate of 35,262,927 Shares (representing 4.4% of our Companys
post-Invitation share capital) and for the six (6) month period thereafter, on the aggregate of 25,862,927
Shares (representing 3.2% of our Companys post-Invitation share capital).
84
OUR GROUP STRUCTURE
Our Group structure immediately after the Restructuring Exercise is as follows:
The Company
Norwest Chemicals
Mianzhu Norwest
100%
100%
Details of our subsidiaries are as follows:
Name of
subsidiary
Date and
place of
incorporation
Tenure of
operation
Principal business/
Principal place of business
% ownership /
% voting power
held by our
Company / Group
Norwest
Chemicals
(1)
18 September
1996 /
Singapore
Not applicable Investing in chemical projects,
general wholesale trade and trading
of chemicals /
Singapore
100%
Mianzhu
Norwest
(2)
24 December
1996 /
PRC
24 December
1996 to 23
December
2046
Exploration, mining and sale of
phosphate rocks, production and
sale of phosphorus and phosphate-
based chemical products /
the PRC
100%
Notes:
(1) The board of directors of Norwest Chemicals comprises our CEO and Executive Director, Dr. Ong Hian Eng, our Non-
Executive Director, Raymond Ong, our Executive Director, Simon Ong (as alternate director to Raymond Ong) and Chng
Hwee Hong (as non-executive director).
(2) The board of directors of Mianzhu Norwest comprises our CEO and Executive Director, Dr. Ong Hian Eng, our Executive
Director, Simon Ong, and our Key Executive, Wang Xuebo. The Legal Representative of Mianzhu Norwest is our CEO and
Executive Director, Dr. Ong Hian Eng. Toh Thiam Seah Victor is the (Supervisor) of Mianzhu Norwest.
Save as disclosed above, our Group does not have any other subsidiaries or associated companies.
None of our subsidiaries is listed on any stock exchange.
85
GENERAL INFORMATION ON OUR GROUP
HISTORY
Our Company was incorporated in Singapore under the Singapore Companies Act on 3 January 2012
with the name AsiaPhos Private Limited, as a private company limited by shares. In preparation for our
listing, we undertook the Restructuring Exercise whereby our Company acquired one hundred per cent.
(100%) shareholding interest in Norwest Chemicals and became the holding company of our Group. We
also changed the name of our Company to AsiaPhos Limited upon our conversion to a public company
limited by shares. Please refer to the section entitled Restructuring Exercise of this Offer Document for
further details.
Our Groups business commenced with the incorporation of Norwest Chemicals in Singapore in 1996.
Norwest Chemicals was incorporated as a wholly-owned subsidiary of Norwest Holdings. Norwest
Holdings was an associated company of the Hwa Hong Group, and our CEO and Executive Director,
Dr. Ong Hian Eng, was one of the key executives assigned by the Hwa Hong Group to oversee the
management of Norwest Chemicals.
In the same year, Mianzhu Norwest was incorporated as a sino-foreign joint venture with Norwest
Chemicals holding a sixty per cent. (60%) equity interest in Mianzhu Norwest with the balance held by
our then-PRC business partner.
Mianzhu Norwest thereafter commenced its Chemical Production Operations, producing P
4
, thermal
phosphoric acid and SHMP, at the Previous Hanwang Facilities. As Mianzhu Norwest did not own mining
rights for any mines at that time, phosphate rocks were obtained from third parties for its Chemical
Production Operations.
In 1999, we expanded our range of phosphate-based chemical products by commencing production of
granular heavy-density STPP, which fetches a higher price compared to powder low-density STPP. We
believe that we were one of the rst few manufacturers in the PRC to produce granular heavy-density
STPP commercially. In 1996 and 2001, Mianzhu Norwest attained ISO 9001 and ISO 14001 certications
respectively.
In 2002, we expanded our business and operations and entered into a mine transfer agreement to
acquire the mining rights for our Mines from (Sichuan Mianzhu Xiaoban
Enterprise Group Co., Ltd). We also obtained the relevant regulatory approvals to operate our Mines.
Please refer to the section entitled General Information on our Group - Mining Operations of this Offer
Document for further details on our Mines. Thereafter, we focused on mining phosphate rocks at Mine 1,
while Mine 2 was temporarily left dormant. Using phosphate rocks from Mine 1, we were able to vertically
integrate our operations by rening and processing these phosphate rocks to produce our range of
phosphate-based chemical products.

In 2003, Mianzhu Norwest became a wholly foreign-owned enterprise after we acquired the remaining
forty per cent. (40%) shareholding in Mianzhu Norwest from our then-PRC business partner.
Between 2003 and 2007, with a view to capturing the growth potential in the PRC and other parts of
the world, we began to emphasise marketing our products to large PRC companies and multi-national
companies, and we secured new major customers for our phosphate-based chemical products,
including major multi-national corporations. In order to expand our potential customer base, we also
obtained various certications including (i) certication from NSF International in 2005 for compliance
with NSF/ANSI 60: Drinking Water Treatment Chemicals; and (ii) Kosher certication from KOF-K Kosher
Supervision, in respect of our thermal phosphoric acid, SHMP and STPP, in 2006.
In 2004, we commenced mining preparatory work on Mine 2. Upon completion of our mining preparatory
work for Mine 2 in 2008, we commenced mining phosphate rocks at Mine 2.
In 2008, we also received the exploration rights issued by the Sichuan Land Department for additional
mining depths and areas in the vicinities of each of Mine 1 and Mine 2.
86
GENERAL INFORMATION ON OUR GROUP
The Wenchuan Earthquake
On 12 May 2008, our Mining Operations and Chemical Production Operations were disrupted by the
Wenchuan Earthquake. As a result of the Wenchuan Earthquake (i) our Groups Mining Operations were
suspended as access roads to our Mines were blocked; (ii) there were fatalities and casualties among
our mining personnel; and (iii) our Group substantially ceased its Chemical Production Operations at the
Previous Hanwang Facilities as a portion of the key facilities was irreparably damaged.
The Recovery Process
Our recovery efforts focused on the restoration of access roads to our Mines and the rebuilding of our
facilities. In addition, we compensated all our affected workers in accordance with applicable PRC laws,
rules and regulations.
Our redevelopment prospects improved when in July 2009, the Sichuan Development Commission and
the Hong Kong SAR Mainland Affairs Bureau announced plans to jointly build the Mian Mao Highway.
The Mian Mao Highway is expected to increase accessibility between our Mines and the New Gongxing
Site once completed as we will be able to use the Mian Mao Highway to access the mountain roads
leading to our Mines. Construction of the Mian Mao Highway is expected to be completed around
2015/ 2016. This will allow us to plan for an increase of our phosphate rock output due to anticipated
shortened travelling time, without having to incur costs associated with the construction of the required
infrastructure.
Between 2009 and 2011, as part of the measures to assist mining companies in Mianzhu City, Sichuan
Province, the PRC, which were affected by the Wenchuan Earthquake, the relevant PRC authorities
issued to Mianzhu Norwest certain exemptions and deferments in respect of the renewal of safety
production permits required for our Mining Operations.

The local PRC authorities also assisted us in our recovery by providing a government investment subsidy
of RMB10.91 million for our post-Wenchuan Earthquake reconstruction projects. This subsidy was
granted to us pursuant to the 50,000 /
(Approval regarding Sichuan Mianzhu Norwest
Phosphate Chemical Co., Ltd. 50,000 tonnes/year phosphate post-disaster rebuilding programme
pursuant to the central post-disaster reconstruction fund investment subsidy plan issued by the Mianzhu
Development and Reform Bureau), a post-disaster reconstruction initiative by the local authorities in
February 2010. Other efforts undertaken by the PRC government include improving infrastructure of
our immediate operating vicinity by constructing roads and building electricity transmission lines and
substations in the vicinity of our Mines.
In recognition of our strong working relationship and as a show of support for our relief efforts, one of our
major customers donated RMB1 million to Mianzhu Norwest in 2008. Further, a substantial portion of our
sole outstanding bank loan was also waived in 2009 as part of the relief efforts extended to companies
affected by the Wenchuan Earthquake.
As the local PRC authorities decided to re-develop the land on which the Previous Hanwang Facilities
were located, such PRC authorities entered into an agreement with Mianzhu Norwest in 2011 to acquire
certain immovable assets and land use rights for the Previous Hanwang Facilities.
At the end of 2011, we successfully obtained the land use rights for the New Gongxing Site, Phase 1
Land.
In 2012 and 2013, the Mianzhu Safety Bureau issued the Trial Mining Notications to Mianzhu Norwest,
permitting Mianzhu Norwest to carry out Trial Mining Operations at the Mines. In 2012, we completed
construction of our P
4
Plant at the New Gongxing Site under Phase 1 of the Rebuilding Programme. We
completed the temporary relocation of our STPP equipment, machinery and storage facilities from the
Previous Hanwang Facilities to the New Gongxing Site in 2012.
87
GENERAL INFORMATION ON OUR GROUP
In 2013, the Mianzhu Safety Bureau issued the Commercial Mining Notication to Mianzhu Norwest,
which permitted Mianzhu Norwest to carry out Commercial Mining Operations at Mine 1. As we have
obtained the requisite approvals, licences, permits and authorisations, we are currently conducting Trial
Chemical Production Operations for Phase 1 of the Rebuilding Programme at the New Gongxing Site.
Previous Corporate Exercises involving Norwest Chemicals
In 2004, Norwest Holdings entered into a conditional agreement with a company listed on the Australian
Securities Exchange (the Buyer) and an individual, who was a director of both Norwest Holdings
and the Buyer, for the disposal of one hundred per cent. (100%) of the equity interest in Norwest
Chemicals to the Buyer (the Proposed Transaction). The completion of the Proposed Transaction was
conditional upon the satisfaction or waiver of certain conditions precedent. However, the agreement was
subsequently terminated as not all the conditions precedent were satised or waived.
In 2006, a fund-raising exercise was proposed to support the operations of Norwest Holdings (the then-
holding company of Norwest Chemicals) and its subsidiaries (including Mianzhu Norwest). However,
pursuant to a shareholders disagreement, and as there were then no other viable alternatives for fund-
raising, one of Norwest Holdings shareholders and its main creditor, HHEO (a subsidiary of the Hwa
Hong Group), applied for Norwest Holdings to be liquidated. Norwest Holdings was compulsorily wound
up on grounds of insolvency in 2008.
In May 2008, the liquidator of Norwest Holdings accepted an offer by Newport Mining (now known as
Aguia Resources Limited), a company listed on the Australian Securities Exchange. However the
acquisition by Newport Mining was not completed due to, inter alia, the Wenchuan Earthquake. In August
2008, HHEO acquired Norwest Chemicals via an auction held by the liquidator of Norwest Holdings. On
the same day, HHEO sold Norwest Chemicals to Eastcomm (which was then wholly-owned by our CEO
and Executive Director, Dr. Ong Hian Eng).
BUSINESS OVERVIEW
We are the rst mineral resources company to be listed on the SGX-ST which is solely focused on
exploring and mining phosphate in the PRC with the ability to manufacture and produce phosphate-based
chemical products.
We are currently headquartered in Singapore, and possess the rights to explore and mine phosphate in
Sichuan Province, PRC. Prior to the Wenchuan Earthquake, we were engaged in a vertically-integrated
production process involving (i) our Mining Operations; and (ii) our Chemical Production Operations.
We currently own mining and exploration rights to our Mines, which are located approximately 40 km
northwest of the New Gongxing Site. Currently, we have two (2) Mines which are producing phosphate
rocks. Between 2002 and the Wenchuan Earthquake, we obtained approximately 379,000 tonnes of
phosphate rock from Mine 1. For FY2005, FY2006 and FY2007, we obtained approximately 62,000,
71,000 and 89,400 tonnes of phosphate rocks respectively from our Mines.
We have completed the construction of our P
4
Plant at the New Gongxing Site under Phase 1 of the
Rebuilding Programme in preparation for the resumption of our Chemical Production Operations. We are
currently in the preliminary stages of Phase 2 of the Rebuilding Programme, which involves construction
of, inter alia, (i) a thermal phosphoric acid plant; and (ii) a food grade and non food grade SHMP plant. As
part of Phase 2 of the Rebuilding Programme, we have also temporarily relocated our STPP equipment,
machinery and storage facilities from the Previous Hanwang Facilities to the New Gongxing Site.
We sell the phosphate rocks obtained from our Mines to third parties and we may retain a portion of the
phosphate rocks for our Chemical Production Operations. We sell phosphate rocks only to our customers
in the PRC, and phosphate-based chemical products to our customers in the PRC and overseas.
Please refer to the WGM Technical Report set out in Appendix J to this Offer Document for a map
showing the approximate geographical location of our Mines and our processing facilities.
88
GENERAL INFORMATION ON OUR GROUP
USES OF PHOSPHATES
Phosphate is a valuable and non-renewable natural resource, and has numerous commercial and
industrial applications. The root element, phosphorus, is an important nutrient for human, animal and
plant life.
Phosphorus, phosphates and phosphate-based chemical products are used in, or in the manufacturing
processes for, many everyday products, including:
batteries;
ceramics;
detergents and cleaning products (including in the dairy, beverage, meat and other food-processing
industries, and for laundry, janitorial, and sanitising products);
fertilisers and animal feed;
explosives;
re retardants;
food and beverage products, e.g. milk, cheese, frozen and canned vegetables, soft drinks, poultry
products and sh llets;
liquid crystal display (LCD) panels;
lubricants for industrial applications;
metal treatment products;
oral hygiene products, e.g. mouthwash and toothpaste;
paint;
paper;
pharmaceutical products and dietary supplements;
plasma screens;
semi-conductors; and
water treatment products.
As at the Latest Practicable Date, we sell phosphate rocks only to our customers in the PRC, and
phosphate-based chemical products to our customers in the PRC and overseas.
To the best of our Directors knowledge, for the Period Under Review, our Group sold (i) phosphate rocks,
to customers primarily engaged in manufacturing fertilisers and animal feed; and (ii) phosphate-based
chemical products, to customers primarily engaged in manufacturing water treatment products and oral
hygiene products.
Please refer to the section entitled General Information on our Group Major Customers of this Offer
Document for further details on our major customers.
MINING OPERATIONS
Under PRC laws and regulations, mining companies must obtain, inter alia, mining rights for the mines
prior to the commencement of mining operations. Mining companies must also obtain exploration rights
prior to obtaining a mining right in order to conduct exploration activities to determine if a potential mining
area is commercially feasible for mining.
Prior to the commencement of commercial mining operations, mining companies are also required to
obtain various approvals, licences, authorisations and permits in accordance with PRC laws, rules and
regulations, including the Mining Safety Production Permit and the Pollution Discharge Permit. The
Mining Safety Production Permit can be obtained for a mining site only after the mining right is granted.
Please refer to the sections entitled General Information on our Group Legal Opinion from King &
Wood Mallesons and General Information on our Group PRC Government Regulations of this Offer
Document for further details.
89
GENERAL INFORMATION ON OUR GROUP
As at the Latest Practicable Date, the details of our Mines are as follows:
Mine 1 Mine 2
Commencement date of mining activities 2002
(temporary stoppage from
May 2008 November 2010)
2008
(temporary stoppage from
May 2008 May 2012)
Current licence period
(1)
March 2011 December 2015 March 2011 January 2020
Permit area
(1)(2)
1.6491 km
2
as follows:
- 1.53 km wide E-W
- 1.10 km long N-S
- 2240 m 2570 m elevation
2.0237 km
2
as follows:
- 0.76 km wide E-W
- 2.74 km long N-S
- 1600 m 2420 m elevation
Approved production scale
(1)(3)
50,000 tonnes per year 200,000 tonnes per year
Average bed thickness
(2)(4)
(approximate) 5.3 m 7.0 m
Average P
2
O
5
content level
(2)(4)
(approximate) 28.6% 29.6%
Measured phosphorite resources
(2)
3.0 million tonnes 6.9 million tonnes
Indicated phosphorite resources
(2)
10.7 million tonnes
Inferred phosphorite resources
(2)
0.9 million tonnes 1.8 million tonnes
Adits 1 3
Notes:
(1) Based on our mining licences in relation to the Mines.
(2) Based on the WGM Technical Report.
(3) The approved production scales for Mine 1 and Mine 2 were increased in December 2005 and January 2010 respectively.
(4) Average of measured and indicated resources.
In 2008, we also received the exploration rights issued by the Sichuan Land Department for additional
mining depths and areas in the vicinities of each of Mine 1 and Mine 2.
As at the Latest Practicable Date, the details of our exploration rights are as follows:
Vicinity of Mine 1 Vicinity of Mine 2
Commencement date of exploration activities for
permitted licensed areas in the vicinity of Mine 1
and Mine 2 (as the case may be)
2010 2011
Current licence period April 2012 April 2014 June 2012 June 2014
Permit area 0.55 km
2
1.28 km
2
Average bed thickness
(1)
(approximate) 2.9 m 6.1 m
Average P
2
O
5
content level
(1)
(approximate) 29.4% 26.6%
Measured phosphorite resources 0.3 million tonnes 0.03 million tonnes
Indicated phosphorite resources 1.3 million tonnes
Inferred phosphorite resources 16.1 million tonnes
Adits 3
Note:
(1) Average of measured and indicated resources.
90
GENERAL INFORMATION ON OUR GROUP
The above information regarding our Mines should be read in conjunction with the full text of this Offer
Document, including the WGM Technical Report set out in Appendix J to this Offer Document.
Upon completion of the Mian Mao Highway, we expect to benet from shorter travelling time and lower
transportation costs between our Mines and the New Gongxing Facilities. We will also tap on other
ancillary transportation networks such as roadways and railways, thereby allowing us to minimise time
taken and costs incurred in the delivery of our phosphate rocks to our customers.
Phosphorite resources
The following table, which is based on the estimates provided in the WGM Technical Report set out in
Appendix J to this Offer Document, provides details of the estimated phosphorite resources available
for Mine 1 and Mine 2 as at 31 December 2012. The phosphorite resources for our mining rights and
exploration rights have been combined:
Gross Attributable to
licence
Net Attributable to the
Company
Tonnes
(millions)
Grade
(P
2
O
5
%)
Tonnes
(millions)
Grade
(P
2
O
5
%)
Mine 1:
Resources
Measured 3.3 28.67 3.3 28.67
Indicated
Total 3.3
(1)
28.67
(1)
3.3
(1)
28.67
(1)
Inferred 0.9 26.77 0.9 26.77
Mine 2:
Resources
Measured 6.9 29.21 6.9 29.21
Indicated 12.0 29.43 12.0 29.43
Total 18.9
(1)
29.35
(1)
18.9
(1)
29.35
(1)
Inferred 17.9 29.77 17.9 29.77
Note:
(1) Inferred resources cannot be included in total resource calculation under NI 43-101.
The above information regarding our Mines should be read in conjunction with the full text of this Offer
Document, including the WGM Technical Report set out in Appendix J to this Offer Document.
According to the CRU Industry Report, the P
2
O
5
content of a phosphate rock is the typical benchmark
by which phosphate rocks are valued and priced, as, inter alia, higher phosphate content typically means
lower impurity content and in turn, high reaction efciencies, less waste and fewer processing issues. The
CRU Industry Report estimates that the average grade of phosphate rock deposits in the PRC contains
below 20% P
2
O
5
content.
Based on the WGM Technical Report, the measured and indicated phosphorite resources found in each
of Mine 1 and Mine 2 contain an average P
2
O
5
content level of 28.7% and 29.4% respectively.
91
GENERAL INFORMATION ON OUR GROUP
In view of the above, and considering that we obtained an aggregate of approximately 93,000 tonnes of
phosphate rocks with an average P
2
O
5
content of 30.6% for the period between 1 January and 30 June
2013, we believe that our phosphate rocks will be in demand from customers.
Mining process
We are responsible for the Mining Operations undertaken at our Mines. We have a dedicated team,
comprising 21 employees as at the Latest Practicable Date, responsible for the planning, designing,
management and overall supervision and safety of our Mining Operations.
The key activities with respect to the mining of our phosphorite resources are as follows:
(i) Mining
Both our Mines are underground mines comprising relatively higher density hard rock. Our mining
preparatory work is carried out from the bottom upwards from a lower to an elevated horizon.
Mining is then carried out from an elevated horizon downwards in horizontal slices, with the broken
ore being left in the excavation created for the miners to work from.
Our mining process comprises planning and development of stopes, construction of adits, division
of the lodes into mineable divisions, mining phosphate rocks and transportation of the phosphate
rocks to our processing facilities and customers.
Drilling
In order to optimise the recovery of high-quality phosphate rocks with high P
2
O
5
content level,
careful calculations are made as to the placement of drill holes and amount of explosives to be
used. We mine phosphate rocks progressively by drilling into designated points within the lodes
and charging such drill holes with explosives. During drilling, we spray water continuously to
minimise the inhalation of dust by miners.
Retrieving
After the explosives are detonated remotely, we retrieve the phosphate rocks that are removed
from the lodes from the force of the explosion. We observe safety precautions in the use of
explosives, such as ensuring that miners are at a safe distance prior to the detonation of
explosives, and ensuring that the lodes are well-ventilated from any harmful gases or residual dust
before the miners enter the adits.
Transport
Depending on the actual conditions of our Mines, including the slope angle of the relevant
phosphorite bed, we may then retrieve the phosphate rocks through a number of inter-level
phosphate ore passes, before loading the same onto mine carts. Once loaded onto the mine cart,
the phosphate rocks are transported via cable skips to our collection depot and subsequently via
trucks to the New Gongxing Facilities or to our customers thereafter. We engage third parties to
provide transportation services in transporting the phosphate rocks from our Mines to the New
Gongxing Facilities.
Facilities
We believe that the location of our Mines provides us with a conducive mining environment. For
example, the supply of water required for our Mining Operations is obtained from wells and rivers
near our Mines. In addition, electricity power supply at our Mines is provided by the State Grid
through its main electric power transmission-line system. We also have a back-up diesel generator
in the event of any disruptions to our electricity supply.
92
GENERAL INFORMATION ON OUR GROUP
(ii) Exploration
Our exploration activities are centred on conducting exploration and drilling works in the areas for
which we have exploration rights to discover new phosphorite resources. We typically appoint a
professional geological company accredited under the applicable PRC laws, rules and regulations
which possesses the requisite experience and qualications to carry out the exploration work.
Based on the report issued by the professional geological company, we estimate the amount of
phosphorite resources within the explored area and thereafter apply to the relevant PRC authorities
to convert our exploration rights to mining rights.
Mining output
We mine phosphate rocks to be used as raw materials in our production of phosphate-based chemical
products, or sold to third parties. We sell our phosphate rocks primarily to other producers of phosphate-
based chemical products in Sichuan Province, the PRC.
From the date of acquisition of the Mines in 2002 to 31 December 2012, we have obtained an aggregate
of approximately 474,100 tonnes of phosphate rocks. As at the Latest Practicable Date, we are engaged
in Commercial Mining Operations at Mine 1 and Trial Mining Operations at Mine 2. We are in the process
of upgrading our mining facilities in Mine 2 to strengthen our safety procedures in accordance with
applicable PRC laws, rules and regulations. We expect to complete our upgrading works on our existing
adits in FY2013, comprising, inter alia, water supply, communications, and detecting and monitoring
systems. For the period from 1 January to 30 June 2013, we obtained approximately 93,000 tonnes of
phosphate rocks.
The mining output, phosphate rocks sold and average selling price of our phosphate rocks for FY2010,
FY2011, FY2012, and FP2013 are as follows:
FY2010 FY2011 FY2012 FP2013
Approximate mining output (tonnes) 4,200
(1)
30,200 60,100 16,600
Approximate phosphate rocks sold (tonnes) 4,600
(2)
20,100 42,100 12,200
Average selling price (per tonne)
(3)(4)
RMB384
(approximately
S$77)
(5)
RMB385
(approximately
S$75)
(5)
RMB445
(approximately
S$88)
(5)
RMB405
(approximately
S$80)
(5)
Notes:
(1) Based on mining output in November 2010 only, following our recovery from the Wenchuan Earthquake.
(2) Phosphate rocks sold include phosphate rocks from inventory.
(3) Computation of average selling price excludes applicable taxes.
(4) Please refer to the section entitled Managements Discussion and Analysis of Results of Operations and Financial Position
Review of Past Operating Results of this Offer Document for further details.
(5) Based on the average exchange rates for the respective nancial years/ period as set out in the section entitled Exchange
Rates and Exchange Controls of this Offer Document.
Co-operation arrangements
We enter into co-operation arrangements with third party partners in relation to our Mining Operations. As
at the Latest Practicable Date, we have entered into the following co-operation arrangements:
(i) Co-operation arrangement with Dashan
Under the Dashan Arrangement, it is intended that our Group and Dashan jointly carry out mining
operations within specied areas and in respect of certain adits within our Mines.
93
GENERAL INFORMATION ON OUR GROUP
Pursuant to the Dashan Arrangement, (i) Dashan shall, inter alia, assist us in our application for the
relevant exploration and mining rights and bear related fees and costs, fund certain other expenses
arising from our Mining Operations and exploration activities and provide certain assets (such as
adits, machinery, technology and equipment) to Mianzhu Norwest for its Mining Operations; and
(ii) in relation to mining operations, our Group shall be responsible for, inter alia, the design and
construction of the Mines, sales of phosphate rocks, employment and purchase of social insurance
for miners. Depending on the level of capital investment by either party, the prots or losses, as the
case may be, after deducting applicable costs and taxes, from the sales of the phosphate rocks
obtained from such adits shall be apportioned between our Group and Dashan. Pursuant to the
Dashan Co-operation Agreements, if the enterprise nature of Mianzhu Norwest is changed due
to reform or other reasons, Mianzhu Norwest shall ensure (i) the preferential rights of Dashan to
participate in its reform or reorganisation; or (ii) the rights and obligations of Dashan under the
Dashan Co-operation Agreements remain unchanged. The Dashan Co-operation Agreements
for Mine 1 will expire and terminate on: (i) the exhaustion of the mineral resources in the agreed
mining areas; or (ii) the issuance of a stop order by the relevant government authorities. The
Dashan Co-operation Agreements for Mine 2 will expire and terminate on the later of: (i) the expiry
of the mining permits relating to the agreed mining areas; or (ii) the exhaustion of phosphorus rock
resources in the agreed mining co-operation areas.
As at the Latest Practicable Date, the Dashan Arrangement applies to Adit 1 and Adit 15 at Mine
1, and Adit 1815 at Mine 2. With regard to Adit 15, prots or losses, as the case may be, are
apportioned between Mianzhu Norwest and Dashan on a 50:50 basis. With regard to Adit 1 and
Adit 1815, prots or losses, as the case may be, are apportioned between Mianzhu Norwest and
Dashan on a 20:80 basis respectively. In respect of any future adits constructed and/ or operated
by Mianzhu Norwest within the co-operation areas covered under the Dashan Arrangement, prots
or losses, as the case may be, will be apportioned between Mianzhu Norwest and Dashan on a
20:80 basis respectively.

Please refer to the section entitled General Information on our Group Legal Opinion from King &
Wood Mallesons of this Offer Document for further details on the Dashan Arrangement.
(ii) Co-operation agreements with Lomon Products and Lomon Chemicals
We entered into a co-operation agreement with Lomon Products in 2011 to jointly utilise, inter
alia, the relevant facilities, the main tunnel transportation system, the electricity supply system, the
water supply and drainage system and the communication system to mine phosphate rocks (the
Joint Utilisation Agreements). Based on the geographical location of each of our Mines and
Lomon Products mines, (i) for the common shaft leading to Mine 1, we will utilise the common
shaft to carry out our Mining Operations rst until we have mined all phosphate rocks from Mine
1, before vacating for Lomon Products to utilise the common shaft; and (ii) for the common shaft
leading to Mine 2, Lomon Products will utilise the common shaft to carry out its mining operations
rst before vacating for our use. The rationale is that both parties will be able to save on tunnelling
costs since the same common shaft can be used to access each of our Mines and Lomon
Products mines. Neither party is obliged to make any payments to the other for the arrangements
under these agreements. The Joint Utilisation Agreements will expire and terminate upon Mianzhu
Norwests completion of the mining activities within the co-operation scope stipulated in the Joint
Utilisation Agreements.
We also entered into an agreement with Lomon Chemicals in 2012 in respect of Adit 1703 owned
by Lomon Chemicals (the Adit 1703 Agreement). Under the Adit 1703 Agreement, Lomon
Chemicals has granted us access to Adit 1703 for the mining of phosphate rocks. This is provided
that our Mining Operations are within the scope of the mining rights that we hold. Once we use
Adit 1703, we shall be responsible for all costs and expenses for the Mining Operations undertaken
in Adit 1703, and all phosphate rocks obtained from Adit 1703 shall be sold at a discounted price
to Lomon Chemicals. To date, we have not carried out any mining operations or transactions with
Lomon Chemicals under the Adit 1703 Agreement. There is no expiry or termination date specied
in the Adit 1703 Agreement.
94
GENERAL INFORMATION ON OUR GROUP
Mining Operations approvals and permits
We have obtained the relevant approvals and permits, including the Mining Safety Production Permit for
Mine 1, and are engaged in Commercial Mining Operations at Mine 1 pursuant to the Commercial Mining
Notication issued by the Mianzhu Safety Bureau.
We are engaged in Trial Mining Operations at Mine 2 pursuant to the Trial Mining Notications issued by
the Mianzhu Safety Bureau to assist us in resuming mining operations after the Wenchuan Earthquake.
We will be able to carry out Commercial Mining Operations for Mine 2 after we receive the Mining Safety
Production Permit for Mine 2.
The Legal Advisers to our Company on PRC Law, King & Wood Mallesons, have advised that:
(i) under relevant PRC mining laws and regulations, there are no denitions for either trial mining
operations or commercial mining operations;
(ii) the only legal restrictions imposed on Mianzhu Norwests Mining Operations at Mine 1 and Mine
2 relating to the quantum of phosphate rocks which may be mined, are the approved annual
production scales of 50,000 tonnes of phosphate rocks and 200,000 tonnes of phosphate rocks
for Mine 1 and Mine 2, respectively. These approved annual production scales are not affected by
whether our Mining Operations are classied as trial mining operations or commercial mining
operations; and
(iii) the Trial Mining Notications do not stipulate any time limit for the conversion of Trial Mining
Operations to Commercial Mining Operations.
As at the Latest Practicable Date, we are engaged in upgrading our facilities at Mine 2 for the purposes
of obtaining, inter alia, the Mining Safety Production Permit to resume Commercial Mining Operations for
Mine 2.
Please see the section entitled General Information on our Group - Legal Opinion from King & Wood
Mallesons of this Offer Document for further details on the Mining Safety Production Permit and other
approvals and permits required for our Mining Operations.
CHEMICAL PRODUCTION OPERATIONS
Prior to the Wenchuan Earthquake and the Relocation Exercise, we produced our range of phosphate-
based chemical products at our Previous Hanwang Facilities. For FY2007 (prior to the Wenchuan
Earthquake in 2008), we produced approximately 4,400 tonnes of P
4
, approximately 9,800 tonnes of
thermal phosphoric acid, approximately 6,700 tonnes of STPP and approximately 4,700 tonnes of SHMP,
at our Previous Hanwang Facilities, for sale to our customers in the PRC and overseas.
As at the Latest Practicable Date, we have completed the construction of the P
4
Plant at the New
Gongxing Site under Phase 1 of the Rebuilding Programme. The designed productive capacity of the P
4

Plant, which has two (2) production furnaces, is 20,000 tonnes per year.
We are also currently in the preliminary stages of Phase 2 of the Rebuilding Programme.
Our production of STPP at our Previous Hanwang Facilities (which had a designed productive capacity of
30,000 tonnes per year) was minimal after the Wenchuan Earthquake in 2008. For FY2010 and FY2011,
we produced STPP amounting to approximately 900 tonnes and approximately 2,100 tonnes respectively,
in order to continue supplying to certain customers.
After moving our STPP plant to the New Gongxing Site pursuant to the Relocation Exercise, we
conducted nal stage processing on prior inventory reserves of STPP amounting to approximately 600
tonnes in FY2012. The designed productive capacity of the STPP plant (which is temporarily located at
the New Gongxing Site) is expected to be 30,000 tonnes per year. For the period from 1 January 2013 up
to the Latest Practicable Date, we processed approximately 200 tonnes of STPP.
95
GENERAL INFORMATION ON OUR GROUP
New Gongxing Site - Rebuilding Programme
The Rebuilding Programme comprises two (2) scheduled phases.
Phase 1
Phase 1 of the Rebuilding Programme includes the construction of:
(i) our raw materials preparation line which includes customised storage areas, inspection, crushing,
sizing, drying and measuring equipment and facilities;
(ii) two (2) new P
4
furnaces, each with a designed capacity of 10,000 tonnes of P
4
per year with
customised storage tanks;
(iii) water treatment plant; and
(iv) other ancillary facilities.
The facilities on Phase 1 Land are designed to withstand earthquakes of up to 7.0 on the Richter
magnitude scale.
Upon commencement of Commercial Chemical Production Operations on Phase 1 Land, our Group will
be able to process and rene phosphate rocks to produce P
4
.

As we are using current technology and
equipment in our Rebuilding Programme, which, inter alia, utilises less electricity and power compared
to our Previous Hanwang Facilities, we expect to be able to enjoy additional cost savings from greater
production efciency and productivity.
Phase 2
Phase 2 of our Rebuilding Programme includes the following:
(i) construction of a new thermal phosphoric acid plant, with designed capacity of 30,000 tonnes per
year;
(ii) relocation and upgrading of a food grade and non food grade STPP plant, with designed capacity
of 30,000 tonnes per year; and
(iii) construction of a food grade and non food grade SHMP plant, with designed capacity of 20,000
tonnes per year.
As at the Latest Practicable Date, we have expended approximately RMB4.6 million on Phase 2 of our
Rebuilding Programme.
96
GENERAL INFORMATION ON OUR GROUP
Production process
Upon the completion of our Rebuilding Programme, our production process will include the following
steps as set out below:

Phosphate Rocks

P
4
Thermal Phosphoric
Acid

SHMP
(food/non food grades)

STPP
(food/non food grades)
P
4
Processing
Acid
Manufacturing

STPP Manufacturing SHMP Manufacturing
(i) P
4
Processing
We rene phosphate rocks to produce P
4
using a mixture of coke and silica and subjecting the
mixture to high temperatures of between 1,300 C and 1,500 C. Prior to this process, the raw
materials are rst crushed and sized to ensure uniformity in size and subsequently dried. The
electric furnaces use electrodes to supply the heat necessary to cause the chemical reaction
between the raw materials. This reaction produces gaseous P
4
, ferrophosphate, slag, sludge and
ue gas.
The gaseous P
4
is cooled under water to form yellow phosphorus which we will sell to our
customers. Flue gas can be recycled as fuel. Slag and ferrophosphate will be sold to nearby
cement and steel industries respectively. Sludge will either be sold or used for production of low-
grade phosphoric acid.
(ii) Acid Manufacturing
Thermal phosphoric acid is obtained by burning P
4
in a furnace together with steam and hydrogen
peroxide. Water is then sprayed onto the mixture in order to achieve the desired concentration,
before purifying the same to produce thermal phosphoric acid. Depending on specications
required by our customers and types of applications, additional processing may be required.
97
GENERAL INFORMATION ON OUR GROUP
(iii) SHMP Manufacturing
SHMP is manufactured by heating a mixture of thermal phosphoric acid, soda ash and natural gas
under controlled conditions. The raw materials are then subject to further processing and blending
before SHMP is produced.
(iv) STPP Manufacturing
STPP is manufactured by mixing thermal phosphoric acid, soda ash and natural or ue gas under
controlled conditions. This mixture is then subject to heating in furnaces and further cooling and
polymerisation before STPP is produced. Depending on market demands, we have the exibility of
producing other phosphate-based chemical products from the same STPP plant.
INDEPENDENT VALUATION
In preparation for the Invitation, our Company appointed JLLCAA to conduct an independent valuation
of the Mines and the P
4
Plant. The Independent Valuation Report has been prepared and presented in
accordance with the VALMIN Code. The valuation was carried out on a Fair Market Value basis. For this
purpose, the term Fair Market Value is dened as the amount of money (or the cash equivalent of
some other consideration) determined by the expert in accordance with the provisions of the VALMIN
Code for which the mineral or petroleum asset or security should change hands on the Valuation Date
in an open and unrestricted market between a willing-buyer and a willing-seller in an arms length
transaction, with each party acting knowledgeably, prudently and without compulsion.

Based on the results of JLLCAAs investigations and analysis outlined in the Independent Valuation
Report, JLLCAA is of the opinion that the Fair Market Value of the Mines and the P
4
Plant as at 31
March 2013 is between RMB1.0 billion (or approximately S$207.6 million
(1)
) and RMB1.6 billion (or
approximately S$332.1 million
(1)
) with the preferred value being RMB1.3 billion (or approximately S$269.8
million
(1)
).
The above information should be read in conjunction with the full text of this Offer Document, including
the Independent Valuation Report as set out in Appendix K to this Offer Document.
The combined nancial statements of our Group for the Period Under Review does not account for the
Fair Market Value of the Mines and the P
4
Plant outlined in the Independent Valuation Report.
Note:
(1) Based on the Exchange Rate.
CORPORATE SOCIAL RESPONSIBILITY
We are committed to being a responsible corporate citizen and consider the physical and human
environment when making our business decisions.
Environmental Measures
As our Groups operations are based in the PRC, we have currently set aside a portion of our operating
budgets (approximately RMB155,000 in aggregate per annum) to ensure that Mianzhu Norwests
operations comply with all applicable PRC environmental laws, rules and regulations. We intend to
take progressive steps to further improve the operations and facilities of Mianzhu Norwest beyond the
requirements of applicable PRC environmental laws, rules and regulations. For example, we have plans
to construct a ue gas storage facility which will enable Mianzhu Norwest to collect and use recycled gas
for its operations and reduce the impact on the environment. We intend to fund the construction of the
ue gas storage facility using part of the net proceeds from the issuance of New Shares. Please refer to
the section entitled General Information on our Group - Business Strategies and Future Plans of this
Offer Document for further details.
98
GENERAL INFORMATION ON OUR GROUP
We recognise that environmental monitoring is an ongoing obligation. It is noted in the WGM Technical
Report that various conditions and practices of Mianzhu Norwest would not meet the standards of
international best practices presently. In view of this, we intend to engage and work with appropriately
qualied professional rms, such as WGM, to progressively improve and bring the operations of Mianzhu
Norwest in line with the standards of international best practices (such as the applicable environmental
standards of the ISO). As the improvements and/ or the standards to be adopted have not been identied
or committed, we have yet to allocate a budget for the same.
The information in this section should be read in conjunction with the full text of this Offer Document,
including the WGM Technical Report set out in Appendix J to this Offer Document.
Mining
Our mining infrastructure has been constructed to comply with the relevant PRC environmental laws
and regulations. We have a mining department, headed by our Key Executive, Luo Guangming, who is
responsible for conducting regular environmental monitoring exercises to ensure that we comply with the
environmental regulations in relation to our Mining Operations.
A summary of the mitigating measures taken in relation to certain Mining Operations are set out below:
Activity Mitigating Measures
Site preparation, drilling
and mining
Personal protection masks are issued to workers to provide
protection from dust
Water is used with certain drilling, mining and site preparation works
Waste water and sand
generation
Embankment walls are built to minimise sand and waste water from
entering the river
Waste sand may be used to ll defunct mining adits and tunnels
Movement of land-based
trafc within, to and from
the mining site
Access roads are widened to ease trafc movement
Entry into active mining areas are restricted to vehicles used for
mining operations only
Closure of the mine Monetary contribution are paid for timberland compensation and
forest recovery fund for the occupied land bi-yearly to the Deyang
Forestry Bureau
Further monetary provision is made for rehabilitation and
reforestation upon closure of mine
Waste sand may be used to ll defunct mining adits and tunnels
We received a conrmation letter dated 18 January 2012 from the Mianzhu Environmental Bureau
conrming, inter alia, that the mining and the other production and operation activities of Mianzhu
Norwest are in compliance with relevant PRC environmental laws, rules and regulations. For further
details, please refer to the sections entitled General Information on our Group Legal Opinion from King
& Wood Mallesons and General Information on our Group PRC Government Regulations of this Offer
Document.
P
4
Plant
Our processing plants were designed to comply with the relevant PRC environmental laws and
regulations. We have a safety and environment team which is responsible for conducting regular
environmental and safety monitoring exercises to ensure that we comply with the relevant safety and
environmental regulations.
99
GENERAL INFORMATION ON OUR GROUP
We have constructed facilities to contain waste water generated from the production of P
4
. The water is
then recycled for the production of P
4
.
We also recycle the by-products from the production of P
4
, such as ferrophosphate, slag and sludge, by
selling these by-products to nearby industries which require them for their production.
We plan to build a ue gas storage facility to collect the ue gas generated from the production of P
4
.
The ue gas will be used in the heating process for production of STPP and SHMP. Please refer to the
section entitled General Information on our Group - Business Strategies and Future Plans of this Offer
Document for further details.
As a testament to our commitment to higher operating standards, we have voluntarily adopted a system
conforming to ISO 14001 for our Chemical Production Operations, similar to the system used for our
Chemical Production Operations at the Previous Hanwang Facilities. This framework assists us to identify
the best practices in environment management standards so as to conform to legislative requirements,
special chemical production regulatory commitments and general corporate objectives.
Community Development
We endeavour to make a positive impact on the lives of people who live in the areas where we have a
presence.
We try, as far as practicable, to employ local workers in each location in which we operate. We provide
these workers with training and skills development.
We also participate in local community projects in the vicinity of our business operations in Mianzhu City,
Sichuan Province, PRC. In 2007, we set up an education fund which provided educational bursaries and/
or donations to primary, secondary and university students with nancial difculties. After the Wenchuan
Earthquake, we donated a sum of money to an affected local village, (Xiangshan Village), and
a primary school located in the vicinity of Mianzhu City, Sichuan Province, PRC, to assist them in
restructuring and recovery work.
QUALITY ASSURANCE
We place great emphasis on the quality of our phosphate rocks and our phosphate-based chemical
products. We believe that having an established quality management system is one of the main factors
contributing to our success and reputation as a producer of quality products.
The following quality management and control procedures have been adopted by our Group:
Mining phosphate rocks
We monitor the quality of our phosphate rocks through on-site inspections and regular sampling at the
Mines and/ or the New Gongxing Facilities. For approximately every 200 tonnes of phosphate rocks, we
conduct internal laboratory testing and separate the phosphate rocks according to quality. This ensures
that the specications of our phosphate rocks are consistent.
Production of phosphate-based chemical products
We have implemented the following quality management and control procedures in respect of our
Chemical Production Operations at Phase 1, and will adopt similar procedures for Phase 2:
(1) Procurement of raw materials
We assess our suppliers before we make purchases of raw materials based on pre-determined
criteria such as reputation, quality, the ability to meet our delivery and quality requirements and
cost competitiveness.
To ensure consistency in the quality of incoming raw materials that are used in our production
process, we conduct sample checks and tests on the raw materials prior to accepting delivery of
the raw materials.

100
GENERAL INFORMATION ON OUR GROUP
(2) Quality control during production
We perform various sample quality checks at every stage of the production process to ensure
consistency in the quality of our products and to ensure that defective semi-nished products do
not proceed to the next stage of production.
(3) Quality control for nished products
We inspect samples from each batch of nished products to ensure that our products comply with
our internal quality control guidelines. The tests that we conduct include checking the physical
appearance and the relevant chemical composition of our products.
All nished products that pass the quality control inspection are then stored in our warehouse.
We conduct a nal round of quality control inspection prior to packaging and delivery of our
nished products to our customers, to ensure that they conform to our customers requirements.
In the event that we are required to deliver our nal products, we select reputable delivery or
transportation agents, in order to ensure that our customers receive our products in satisfactory
condition.
(4) Review of quality management system and maintenance of machinery and equipment
As part of our continuing assessment and review on our quality management system, we obtain
feedback from our employees, from time to time, for the purposes of improving the efcacy of our
quality control processes.
Our customers may also visit us at our facilities to assess our quality standards. Thereafter, we
may discuss and review any feedback from our customers and modify our quality management
systems to meet our customers requirements.
We also conduct regular checks and maintenance of our production facilities to ensure efcient
operations.
(5) Obtaining accreditation for our phosphate-based chemical products
Prior to the Wenchuan Earthquake, we had obtained accreditations for our processes at the
Previous Hanwang Facilities such as (i) ISO 9001; (ii) ISO 14001; and (iii) certication from the
KOF-K Kosher Supervision. We intend to obtain similar accreditations in respect of our New
Gongxing Facilities.
Quality control / safety standards
Our staff plan, manage and supervise the overall development and quality of our phosphorite resources
in order to ensure that we meet the quality and production safety standards.
Miners
We ensure that our miners and our outsourced miners pass the relevant health check-ups, possess
the requisite qualications, experience, social and commercial insurance and safety permits obtained
after attending trainings organised by the relevant local safety and inspection authorities, before they
undertake any work at our Mines.
101
GENERAL INFORMATION ON OUR GROUP
Safety and Environment Team
We have a safety and environment team which implements and promotes applicable legal and internal
safety regulations, including (i) conducting periodic safety audits and ensuring safety requirements are
met; (ii) conducting in-house or outsourced safety training for all our employees as well as outsourced
miners; (iii) conducting investigations and handling all incident reports and implementing pre-emptive
measures to prevent repeat occurrence of such incidents; (iv) liaising with all external safety authorities
and implementing new safety regulations; (v) reviewing and improving our safety management system;
and (vi) transportation, handling and storage of explosives and other hazardous materials in accordance
with applicable legal requirements. Other preventive measures that we have implemented include (i) daily
site monitoring by the designated safety ofcer for each adit; (ii) ensuring that all workers wear safety
gear while they are at our Mines; and (iii) cultivating a safety is priority culture.
We are subject to regular and ad hoc inspections by the local safety authorities to ensure that the
requisite safety requirements are met before we are allowed to continue with our Mining Operations.
Please refer to the section entitled General Information on our Group Mining Operations approvals
and permits of this Offer Document for further details. As at the Latest Practicable Date, we are in
the process of upgrading our facilities in Mine 2. As at the Latest Practicable Date, we have not been
penalised by the relevant PRC safety bureau and we are not aware of any material non-compliance with
applicable safety regulations.
INTELLECTUAL PROPERTY
Trade marks
We believe that our trade marks are of importance to our brand-building efforts and the marketing of our
products.
As at the Latest Practicable Date, our Group owns the following trade mark:
Trade mark Registered
Owner
Place of
Registration
Class Trade mark
Number
Validity Period
The Company Singapore 1
(1)
T1219484E Ten (10) years
commencing from
20 December 2012
Note:
(1) Trade marks under Class 1 of the Nice Classication relate to, inter alia, acids; chemicals for use in industry; chemicals
for use in manufacture; chemical compounds for use in the manufacture of industrial preparations; chemical products for
use in industry; chemicals used in industry; chemical products for use in manufacturing; chemical preparations for scientic
purposes, other than for medical or veterinary use; chemical reagents, other than for medical or veterinary purposes;
chemical substances for analyses in laboratories, other than for medical or veterinary purposes; chemicals (Agricultural ),
except fungicides, weedkillers, herbicides, insecticides and parasiticides; chemicals for forestry, except fungicides, herbicides,
insecticides and parasiticides; industrial chemicals; phosphates fertilisers; phosphatides; phosphoric acid; phosphating agents;
phosphating compounds; phosphorus; raw chemicals.
102
GENERAL INFORMATION ON OUR GROUP
In addition, our Group has applied to register the following trade mark with the Intellectual Property Ofce
of Singapore:
Trade mark Applicant Place of
Application
Class Trade mark
Number
Status
The Company Singapore 1
(1)
T1219486A Pending
Note:
(1) Trade marks under Class 1 of the Nice Classication relate to, inter alia, acids; chemicals for use in industry; chemicals
for use in manufacture; chemical compounds for use in the manufacture of industrial preparations; chemical products for
use in industry; chemicals used in industry; chemical products for use in manufacturing; chemical preparations for scientic
purposes, other than for medical or veterinary use; chemical reagents, other than for medical or veterinary purposes;
chemical substances for analyses in laboratories, other than for medical or veterinary purposes; chemicals (Agricultural ),
except fungicides, weedkillers, herbicides, insecticides and parasiticides; chemicals for forestry, except fungicides, herbicides,
insecticides and parasiticides; industrial chemicals; phosphates fertilisers; phosphatides; phosphoric acid; phosphating agents;
phosphating compounds; phosphorus; raw chemicals.
Domain Names
As at the Latest Practicable Date, our Company has registered the following domain name:
Domain Name Registered Owner Expiry Date
www.asiaphos.com The Company 22 February 2022
Our business or protability is not materially dependent on any registered trade mark, patent or other
intellectual property rights.
RESEARCH AND DEVELOPMENT
Our Group has not incurred any expenditure on research and development activities for the Period
Under Review and for the period commencing from 1 April 2013 up to the Latest Practicable Date.
However, moving forward, we may undertake development activities to widen our range of phosphate-
based chemical products. Please see the section entitled General Information on our Group - Business
Strategies and Future Plans of this Offer Document for further details.
INSURANCE
For the Period Under Review and for the period commencing from 1 April 2013 up to the Latest
Practicable Date, we were in compliance with applicable PRC laws, rules and regulations with respect to
obtaining insurance for our employees, including social insurance.
In addition, we have obtained, inter alia, property insurance for our key equipment and assets for certain
losses including oods, earthquakes and other disasters, business interruption insurance, employers
liability insurance, delity guarantee insurance and money insurance.
Our Directors are of the view that our existing insurance coverage from the above insurance policies is
adequate having regard to the size and nature of our operations. As we are carrying out our Rebuilding
Programme, we are also working on customising further insurance coverage for our Chemical Production
Operations as they become operational. We periodically review and assess our risks and make
necessary adjustments to our insurance coverage to meet our needs and comply with industry practice in
the PRC.
103
GENERAL INFORMATION ON OUR GROUP
SALES AND MARKETING
Our CEO and Executive Director, Dr. Ong Hian Eng, and Key Executive, Wang Xuebo, oversee our
sales and marketing department, which is responsible for our domestic sales and exports. Our sales
and marketing department handles (i) formulating sales and marketing strategies; (ii) establishing
and maintaining relationships with new and existing customers; (iii) direct marketing, trade fairs and
conferences; and (iv) providing after-sales customer service. From time to time, we are also approached
directly by customers.
CREDIT MANAGEMENT
Customers
Customers of our phosphate rocks are normally required to make full payment before they can take
delivery of phosphate rocks. In FP2013, one of our customers purchased our phosphate rocks and made
partial payment by way of a promissory note, issued by a nancial institution in the PRC. The promissory
note, which matured in June 2013, was for an amount of S$0.2 million and was fully redeemed in June
2013.
We generally require customers of our phosphate-based chemical products to make payment within 30 to
60 days from delivery.
The trade receivables turnover for our Group for FY2010, FY2011, FY2012 and FP2013 based on credit
sales of our phosphate-based chemical products were as follows:
FY2010 FY2011 FY2012 FP2013
Trade receivables turnover (days)
(1)
41 27 51 53
Note:
(1) Trade receivables turnover is calculated on the basis of the average trade receivables divided by total credit sales of our
phosphate-based chemical products multiplied by 365 days or 90 days, as applicable. Average trade receivables is the
average of the opening and closing balances for the nancial year/ period.
Our trade receivables turnover of 41 days, 51 days and 53 days in FY2010, FY2012 and FP2013
respectively are within the credit period we usually extend to our customers. The lower trade receivables
turnover in FY2011 was mainly a result of lower sales of STPP towards the end of FY2011.
Our trade receivables as at 31 March 2013 were approximately S$0.5 million, 99.3% of which have been
collected as at the Latest Practicable Date.
Suppliers
We pay our suppliers of raw materials on cash terms. With respect to purchases of services for our
Mining Operations, including payment to our co-operation partner, there are no formal credit terms.
The trade payables turnover for our Group for FY2010, FY2011, FY2012 and FP2013 were as follows:
FY2010 FY2011 FY2012 FP2013
Trade payables turnover (days)
(1)
42 54 116 109
Note:
(1) Trade payables turnover is calculated on the basis of the average trade payables divided by total cost of sales multiplied
by 365 days or 90 days, as applicable. Average trade payables is the average of the opening and closing balances for the
nancial year/ period.
104
GENERAL INFORMATION ON OUR GROUP
In FY2010, we repaid certain of our suppliers after receiving a bank loan. Furthermore, as our Group
gradually increased the scale of our Mining Operations from FY2010, trade payables turnover gradually
increased from 42 days in FY2010 to 54 days in FY2011. The increase in trade payables turnover was
mainly brought about by the increase in the scale of Mining Operations.
In particular, as a result of favourable weather conditions in the winter season of 2012, our Mining
Operations were extended, and we obtained an aggregate of approximately 60,100 tonnes of phosphate
rocks in FY2012, compared to approximately 30,200 tonnes of phosphate rocks in FY2011. This led to a
signicant increase in the amounts payable related to our Mining Operations, including payments to our
co-operation partner and other contractors.
In FP2013, our Group resumed Mining Operations in March 2013 and obtained approximately 16,600
tonnes of phosphate rocks in the same month. This led to an increase in the amounts payable related to
our Mining Operations. However, as our Group continued to repay its suppliers, trade payables turnover
declined to 109 days.
Our trade payables as at 31 March 2013 were approximately S$0.8 million, of which 70.9% has been
paid as at the Latest Practicable Date.
STAFF TRAINING AND DEVELOPMENT
The training that we provide can be divided into basic training, compulsory training and supplementary
training and may be conducted in-house or outsourced to external trainers.
Basic training includes orientation training and occupational safety training. Orientation training is
conducted to educate our new employees on company policies and basic skills and knowledge which
would be relevant to their respective job functions, such as the operation of relevant machinery and
equipment. Occupational safety training is conducted to equip our employees on occupational safety and
to educate them on safety standards and precautions to be undertaken in the course of their work.
Compulsory training is training required by applicable laws and regulations, including continual
professional education on an annual basis, in particular for engineers and employees engaged in our
Mining Operations, Chemical Production Operations, and/ or handling of chemicals and explosives. Such
training is typically organised by the relevant accrediting organisations, governmental bodies and quality
assurance associations.
Supplementary training is training conducted to enhance the skills of our employees, including training
to update them on the latest development trends and technologies and personal improvement. Selected
employees may be sent for external short term training courses. For example, our nance staff may
attend courses and seminars conducted by external organisations to keep abreast with changes in
accounting requirements.
Our Groups staff training expenses for each of FY2010, FY2011, FY2012 and FP2013 were not
signicant.
SEASONALITY
Our Groups Mining Operations and Chemical Production Operations are subject to certain seasonal
uctuations.
As part of our safety policy, our Mining Operations are halted annually during (i) the winter season, which
typically lasts from mid-December to mid-March; and (ii) the rainy season, which typically lasts from
early July to the end of August. Barring unforeseen circumstances, we undertake Mining Operations for
about seven (7) months per year on a daily basis, subject to, inter alia, holidays, weather conditions and
equipment maintenance.
105
GENERAL INFORMATION ON OUR GROUP
During the low-water periods, which typically last from mid-November to mid-April, our electricity costs
increase and we may not produce P
4
, the process for which requires high levels of electricity, unless
justied by sufciently high market prices of P
4
.
We are able to mitigate the seasonality effect to a certain extent by maintaining buffer stocks of
phosphate rocks and P
4
.
We generally do not experience any signicant seasonality patterns in the demand for our phosphate
rocks and phosphate-based chemical products.

INVENTORY MANAGEMENT
We intend to maintain optimal levels of our inventory, comprising (i) packaging and raw materials; and
(ii) phosphate-based chemical products. We plan to do so by taking into account, inter alia, weather
conditions, uctuations in the prices of raw materials, secured orders placed by customers, estimated
future sales and production needs and price trends of our products.
In order to ensure that our inventory is managed efciently and effectively, we monitor our inventory
through monthly inventory counts. Any discrepancies between our inventory counts and nancial records
will be reconciled monthly and adjusted on a quarterly basis. Our inventory turnover for FY2010, FY2011,
FY2012 and FP2013 were as follows:
FY2010 FY2011 FY2012 FP2013
Inventory turnover (days)
(1)
389 427 388 322
Note:
(1) Inventory turnover is calculated on the basis of the average inventory divided by total cost of sales multiplied by 365 days or
90 days, as applicable. Average inventory is the average of the opening and closing balance of the relevant nancial year/
period.
Our inventory turnover for FY2010, FY2011, FY2012 and FP2013 was high as part of our Previous
Hanwang Facilities was damaged due to the Wenchuan Earthquake. Consequently, we faced
production constraints and could not use the raw materials which we had purchased. At the same time,
we maintained stocks of SHMP and STPP to continue supplying to certain customers. Our inventory
turnover days increased in FY2011 as we produced more STPP inventory in anticipation of the temporary
cessation of our Chemical Production Operations pursuant to the Relocation Exercise. In FY2012 and
FP2013, our inventory turnover days decreased due to continued sales of our products.
We also typically maintain buffer stocks of phosphate rocks and P
4
to mitigate the seasonality effect.
106
GENERAL INFORMATION ON OUR GROUP
MAJOR SUPPLIERS
We are not dependent on any single supplier. Our suppliers comprise mainly suppliers of raw materials
which are required for our Chemical Production Operations and our co-operation partners. The suppliers
of raw materials who accounted for ve per cent. (5%) or more of the costs of raw materials and services
for FY2010, FY2011, FY2012 and FP2013 were as follows:
Name of Supplier
Nature of
Supply
% of our Groups total purchases
FY2010 FY2011 FY2012 FP2013

(Deyang City Xingyuan Industrial Explosive


Material Co., Ltd)
Explosives 0.5 1.4 7.0 7.4

(Hanwang Natural Gas Co., Ltd) (Hanwang)


Natural gas 3.1 5.0 2.0 5.9

(Leshan Jiaming Chemical Co., Ltd.) (Leshan)


P
4
37.2

(Mianyang Aostar Phosphorus Chemical Industry


Co., Ltd.) (Aostar)
Phosphoric acid 25.7 8.3

(Mianzhu Maoyuan Phosphate Chemical Co., Ltd.)


(Maoyuan)
P
4
19.6

(Sichuan Mianzhu Ronghong Chemical Co., Ltd.)


(Ronghong)
Phosphoric acid 12.0 22.7

(Sichuan Province Jinlu Resin Co., Ltd ) (Jinlu)


Alkali 5.7 13.5 11.6 4.5
The amounts that accrued to Dashan under the Dashan Arrangement accounted for approximately
5.2%, 8.6%, 19.7% and 11.8% of our Groups cost of purchase of raw materials and services in FY2010,
FY2011, FY2012 and FP2013 respectively. Please refer to the section entitled General Information on
our Group Mining Operations - Co-operation arrangements of this Offer Document for further details.
Due to the damage caused by the Wenchuan Earthquake to our Previous Hanwang Facilities and the
resultant disruption to our Chemical Production Operations, we purchased raw materials, including P
4

and phosphoric acid from various suppliers, for the production of STPP and SHMP to full outstanding
contractual obligations and to supply to certain customers.
Our Group did not purchase P
4
after FY2010, which led to the reduction in the purchases from Leshan
and Maoyuan.
Our Group purchased phosphoric acid for our STPP production in FY2011 and for our nal-stage STPP
processing operations in FY2012 and FP2013. The purchases made from Aostar reduced in FY2012
and FP2013 due to the Relocation Exercise, pursuant to which we ceased STPP production and only
conducted nal-stage STPP processing and the sourcing from a new supplier, Ronghong.
The purchase of explosives which are used in our Mining Operations increased from FY2010 to FP2013
in line with the resumption of our Mining Operations in late FY2010 and a subsequent increase in the
scale of Mining Operations thereafter.
Purchases of alkali from Jinlu increased in FY2011 as our Group produced more STPP in FY2011.
However, with the reduction in production of STPP after FY2011, our purchases of alkali from Jinlu
declined in FY2012 and further declined in FP2013.
107
GENERAL INFORMATION ON OUR GROUP
Purchases of natural gas from Hanwang increased from FY2010 to FY2011 as, in anticipation of the
Relocation Exercise, we increased production to increase our STPP inventory. Purchases of natural gas
declined from FY2011 to FY2012 as our Chemical Production Operations were temporarily suspended
whilst we undertook the Relocation Exercise and conducted limited nal-stage processing of STPP in
the last quarter of FY2012 after the completion of the Relocation Exercise. Purchases of natural gas
subsequently increased from FY2012 to FP2013 as we engaged in further nal-stage processing of
STPP.
None of our Directors, Substantial Shareholders or their Associates has any interest, whether direct or
indirect, in any of the above-mentioned suppliers.
MAJOR CUSTOMERS
We are not dependent on any single customer as our Directors are of the view that phosphate rocks and
phosphate-based chemical products are akin to commodities. The customers who accounted for ve per
cent. (5%) or more of our Groups turnover for FY2010, FY2011, FY2012 and FP2013 are as follows:
Name of Customer
Product
Segment
% of our Groups total revenue
FY2010 FY2011 FY2012 FP2013
Aostar Phosphate rocks 15.7 41.3
Lomon Chemicals Phosphate rocks 62.8
Maoyuan Phosphate rocks 12.4 4.6

(Mianzhu Tiansheng Mining Co., Ltd.)


Phosphate rocks 5.2 3.2

(Sichuan Mianzhu Sanjia Feed Co., Ltd.) (Sanjia)


Phosphate rocks 11.4 5.8
Chemical Direct Inc. (CDI) STPP 23.3 15.2
Corporacin Andaluza De Traco Comercial,
Suminstros Y Ventas Industriales, S.L
STPP 5.1

(Diversey Hygiene (Guangdong) Ltd.) (Diversey)


STPP 6.1 12.4 3.6 3.3
Interchem Agencies Limited STPP 5.3 4.6 5.8 2.4
Mifa AG Frenkendorf (MAF) STPP 9.8 3.1

(Procter & Gamble (China) Ltd.) (P&G)
STPP 5.9 9.9 2.8
Vadoudi Mod General Trading L.L.C. (Vadoudi) STPP 0.9 9.7
Sales to our customers uctuate from year to year largely due to uctuations in our customers demand
for our products and our ability to manufacture and produce our phosphate-based chemical products to
meet our customers requirements.
We resumed our Mining Operations in FY2010 but we only conducted Mining Operations for one (1)
month in FY2010. Sales of phosphate rocks only started to increase in FY2011 and further increased in
FY2012 and FP2013 as our Group increased its inventory of phosphate rocks from its Mining Operations.
The Relocation Exercise in FY2011, and our Rebuilding Programme which is still ongoing, also affected
our ability to produce phosphate-based chemical products to meet our customers requirements in
FY2012 and FP2013.
We sold phosphate rocks to Aostar in FY2011 and FY2012 and to a new customer, Sanjia, in FY2012, as
Aostar and Sanjia provided more competitive pricing for our phosphate rocks.
108
GENERAL INFORMATION ON OUR GROUP
There were no sales to Aostar in FP2013 due to the absence of demand from Aostar. For FP2013, the
sales to Sanjia declined due to the lower demand from Sanjia.
For FP2013, we sold phosphate rocks to Lomon Chemicals as they provided more competitive pricing for
our phosphate rocks.
Sales of phosphate rocks to Maoyuan declined in FY2011 and there were no sales to Maoyuan in
FY2012 and FP2013 due to the lower and absence of demand from Maoyuan respectively.
Sales of STPP to CDI and MAF declined in FY2011. Although sales of STPP to CDI remained at around
the same level in FY2010 and FY2011, a decline in percentage was recorded due to the higher total
revenue recorded by our Group in FY2011. Sales of STPP to MAF declined due to lower demand from
MAF.
There were no sales to CDI or MAF in FY2012 and FP2013 due to the absence of demand from CDI and
MAF.
Sales of STPP to Vadoudi increased in FY2011 as we were able to supply STPP which met Vadoudis
specications. However, as we did not have STPP that met Vadoudis requirements in FY2012, no sales
to Vadoudi were recorded in FY2012.
The uctuations in sales to Diversey and P&G were due to the uctuations in demand for STPP from
these customers.
In FP2013, we secured Corporacin Andaluza De Traco Comercial, Suminstros Y Ventas Industriales,
S.L as a new customer.

None of our Directors, Substantial Shareholders or their Associates has any interest, whether direct or
indirect, in any of the above-mentioned customers.
PROPERTIES AND FIXED ASSETS
Location Grantee
Description
of Permit /
Right
Duration
of Permit /
Right
Land Area
(sq m)
Use of
Property Encumbrance

(Fa Mu Chang
Forest Area, Deyang
City)
Mianzhu
Norwest
Temporary
Occupancy
of forestry
land for our
Mines
Until 31
July 2014
24,564
(1)
Mining
Operations

Xiangliu Village,
Gongxing Town,
Mianzhu City
Mianzhu
Norwest
Land Use
Rights
Until 17
October
2061
54,862.7 Chemical
Production
Operations
Mortgaged to the
Bank of China
Limited, Mianzhu
Branch
Note:
(1) Based on 2.4564 hectares converted at 1 hectare = 10,000 sq m.
Land Occupation in respect of our Mines
As at the date of this Offer Document, Mianzhu Norwest is conducting its Mining Operations on forestry
land with an approximate area of 2.4564 hectares.
Phase 1 Land
On 18 October 2011, Mianzhu Norwest entered into a contract with the Mianzhu Land Bureau for
assignment of the state-owned industrial land use rights for Phase 1 Land. Our Group has paid
consideration of approximately RMB8.2 million in respect of the land use rights for Phase 1 Land.
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GENERAL INFORMATION ON OUR GROUP
Phase 2 Land
On 27 December 2010, Mianzhu Norwest entered into a letter of intent with the Mianzhu Resettlement
Ofce, pursuant to which Mianzhu Norwest agreed to participate in the auction process for Phase 2 Land.
As at the Latest Practicable Date, Mianzhu Norwest has (i) paid a fully-refundable partial deposit of
RMB8 million; and (ii) received the (Red Line Drawings of Land) for Phase 2 Land, the
(a notice for Phase 2 Land issued by the Mianzhu Planning
Bureau), the (Construction Land Planning Permit), the
(Construction Project Planning Permit) issued by the Mianzhu Planning Bureau, and the
(Building Construction Permit) issued by Mianzhu Construction Bureau for Phase 2 of the Rebuilding
Programme. However, the Mianzhu Land Bureau has not issued the land use rights for Phase 2 Land.
On 21 June 2013, Dr. Ong Hian Eng, Ong Kwee Eng, Wang Xuebo and Chia Chin Hau signed the Deed
of Indemnity, jointly and severally undertaking, inter alia, to indemnify and hold harmless our Group
against losses in connection with (i) certain land use rights which may be required in connection with
Mianzhu Norwests Mining Operations for a period of 18 months from the date of our admission to
Catalist; (ii) land use rights for Phase 2 Land; and (iii) the requisite licences, permits and approvals for
Commercial Chemical Production Operations on Phase 2 Land.
Hanwang Land
On 6 January 2013, Mianzhu Norwest entered into a contract with the Mianzhu Land Bureau for the
assignment of the state-owned commercial land use rights in respect of the Hanwang Land. Our Group
has paid consideration of approximately RMB2.6 million in respect of the land use rights for the Hanwang
Land.
Properties leased by our Group
As at the Latest Practicable Date, the following table sets out all the properties leased by our Group:
Tenant/Lessee Location Tenure
Floor
Area
(sq ft) Rental
Description
of Use
Lessor/
Sublessor
Singapore
Norwest Chemicals Unit #12-01,
Parkview Square,
600 North Bridge
Road, Singapore
188778
1 October
2012 to 30
September
2014
1,957 S$16,089.20
monthly
Ofce Chyau Fwu
Development
(Singapore)
Pte Ltd
PRC
Mianzhu Norwest Unit F, 13th
Floor, Xinshidai
Guangchang, No.
42 Wenwu Road,
Xinhua Avenue,
Chengdu City,
Sichuan Province
(1)

1 May 2013
to 30 April
2014
1,027 RMB
3,814.80
monthly
Ofce Service
Centre of
Sichuan
Commerce
Department
Note:
(1) In accordance with the relevant PRC laws, property leases shall be led with the competent property administration authority
by both the lessor and the lessee within the time limit prescribed by the competent property administration authority, failing
which, a penalty of between RMB1,000 and RMB10,000 shall be imposed. This lease has not been led with the competent
property administration authority. The Legal Advisers to our Company on PRC Law, King & Wood Mallesons, has advised that
such non-compliance will not affect the effectiveness or legal enforceability of the lease. As at the Latest Practicable Date,
there has been no ne or penalty imposed on Mianzhu Norwest for such non-ling of the lease.
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GENERAL INFORMATION ON OUR GROUP
PERMITS, LICENCES, APPROVALS AND GOVERNMENT REGULATIONS
We are subject to relevant laws and regulations for our business operations. As at the Latest Practicable
Date, our Group holds the following material permits, licences and approvals:
Licences
Licensing
Body
Date of
Issue
Date of
Expiry Description
Mine 1
Mining right Sichuan Land
Department
9 March 2011 9 December
2015
Mining area: 1.6491 sq km
Mining depth: Between the elevation of
2,570 m and 2,240 m
Approved annual production scale:
50,000 tonnes
Exploration right Sichuan Land
Department
9 April 2012 9 April 2014 Exploration area: 0.55 sq km
Mining Safety
Production Permit
Sichuan Safety
Bureau
26 September
2012
25 September
2015
Authorised scope: Phosphate mine
underground mining operations
Mine 2
Mining right Sichuan Land
Department
9 March 2011 9 January
2020
Mining area: 2.0237 sq km
Mining depth: Between the elevation of
2,420 m and 1,600 m
Approved annual production scale:
200,000 tonnes
Exploration right Sichuan Land
Department
16 June 2012 16 June 2014 Exploration area: 1.28 sq km
In order to resume Commercial Mining Operations at Mine 2, and Commercial Chemical Production
Operations, we are required to obtain certain approvals, licences, authorisations and permits in
accordance with relevant PRC laws, rules and regulations. Please refer to the sections entitled General
Information on our Group Legal Opinion from King & Wood Mallesons and General Information on our
Group PRC Government Regulations of this Offer Document for details of the further approvals to be
obtained.
To the best of our Directors knowledge, save as disclosed in the sections entitled Risk Factors, General
Information on our Group Mining Operations, General Information on our Group Properties and
Fixed Assets, General Information on our Group Permits, Licences, Approvals and Government
Regulations, General Information on our Group Legal Opinion from King & Wood Mallesons and
Interested Person Transactions and Conicts of Interest Present and On-going Interested Person
Transactions of this Offer Document, our Group has obtained all necessary approvals, licences and
permits for our current operations. As at the Latest Practicable Date, none of the aforesaid permits,
licences and approvals have been suspended, revoked or cancelled and, to the best of our Directors
knowledge and belief, we are not aware of any facts or circumstances which would cause such permits,
licences and approvals to be suspended, revoked or cancelled or any applications for, or renewal of, any
of these permits, licences and approvals to be rejected by the relevant authorities.
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GENERAL INFORMATION ON OUR GROUP
LEGAL OPINION FROM KING & WOOD MALLESONS
The Legal Advisers to our Company on PRC Law, King & Wood Mallesons, is a law rm practising in the
PRC. It has conducted a legal due diligence review on Mianzhu Norwest in connection with the Invitation.
This legal opinion has been prepared on the basis and subject to the limitations on King & Wood
Mallesons liability set out in King & Wood Mallesons terms of engagement. In such capacity, it has: (a)
reviewed (i) Mianzhu Norwests les; (ii) relevant certicates; and (iii) other documents issued by the
relevant governmental authorities of the PRC provided by Mianzhu Norwest; (b) taken into consideration
the conrmations made by the relevant PRC authorities on specic issues; and (c) conducted the
necessary checks and enquiries in the event that the documents provided by the Company appear to be
unusual.
In examining the documents in respect of Mianzhu Norwest, King & Wood Mallesons has assumed, inter
alia, that:
i. all signatures, seals and chops thereon are true and genuine, and all documents submitted to it as
copies are complete and conform to the originals;
ii. all factual statements made in such documents are accurate and complete;
iii. all documents as presented to King & Wood Mallesons are, as at the date of this Offer Document,
up to date and none of the documents have been revoked, amended, varied or supplemented;
iv. all persons executing and delivering the documents are competent and duly authorised to execute
and deliver such documents; and
v. the information provided by Mianzhu Norwest, whether or not in the form of a conrmation or
statement, is accurate, complete and true in every aspect.
Based on the foregoing, King & Wood Mallesons is of the opinion that:
1. Due Incorporation and Good Standing
a. Mianzhu Norwest was legally established and validly exists as a wholly foreign-owned
enterprise and has the status of an independent legal entity in the form of a limited
liability company, having full capacity, power and authority to enter into legally binding and
enforceable contracts and undertakings with full power to sue or to be sued in its own name.
b. Mianzhu Norwests current business scope is in compliance with and does not contravene
any PRC laws, rules or regulations.
c. Mianzhu Norwest has passed the annual inspections conducted by the Deyang AIC Bureau
for 2010, 2011 and 2012.
d. To the best of King & Wood Mallesons knowledge, as at the date of this Offer Document,
there are no provisions, irregularities, inconsistencies or other matters contained in the
records of Mianzhu Norwest which would materially and adversely affect: (i) its status as
an independent legal entity; (ii) its power and authority to own, use, lease and operate its
properties and other assets lawfully obtained (excluding in relation to Phase 1 Land which
has been mortgaged please see section 2(d) of this legal opinion); and (iii) the business
presently conducted by Mianzhu Norwest as set out in the Offer Document.

e. Norwest Chemicals is the proper, valid, legal and benecial owner of the entire equity
interest in Mianzhu Norwest.
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GENERAL INFORMATION ON OUR GROUP
2. Title to or Validity and Enforceability of the Rights to any Assets (including licences and
agreements)
Mining Operations
Mining Rights and Exploration Rights
a. Mianzhu Norwest was granted mining right certicates for Mine 1 and Mine 2 and exploration
right certicates for additional mining areas adjacent to the Mines (the exploration areas)
by the Sichuan Land Department, and such certicates are valid and subsisting as at the
date of this Offer Document. King & Wood Mallesons is of the opinion that the Sichuan Land
Department is the competent authority responsible for the renewal of the current mining and
exploration right certicates of Mianzhu Norwest. As and when such certicates are due
for renewal, Mianzhu Norwest will use its best endeavours to meet all relevant conditions
and requirements as may be required by the relevant PRC laws, rules and regulations and
all competent authorities to renew the same. Mianzhu Norwest believes that the renewal
applications are procedural in nature, and has not encountered any material difculties in
obtaining and/ or renewing such certicates in the past. In particular, Mianzhu Norwest has
conrmed that it has applied for and was granted the mining right certicates for Mine 1 and
Mine 2 since 2002; and has applied for and was granted the exploration right certicates for
Mine 1 and Mine 2 since 2008. In light of the foregoing, King & Wood Mallesons is of the
opinion that the risk of Mianzhu Norwest not being able to renew the aforesaid mining right
certicates and the exploration right certicates for Mine 1 and Mine 2 is relatively low.
Mianzhu Norwest has conrmed that in the course of its exploration activities, it may obtain
phosphate rocks from the exploration areas. These phosphate rocks can be subsequently
sold by Mianzhu Norwest. Under the relevant PRC laws, rules and regulations, without
obtaining mining right certicate(s) for the exploration areas, Mianzhu Norwest is allowed
to conduct exploration activities, but not mining activities and/ or extraction works in
the exploration areas. Mianzhu Norwest has conrmed that as at the date of this Offer
Document, to the best of its knowledge and belief, it is only conducting exploration
activities and not mining activities or extraction works in the exploration areas. Taking
into consideration the foregoing, King & Wood Mallesons is of the opinion that the sale of
phosphate rocks obtained from the exploration areas in the course of Mianzhu Norwests
exploration activities are not in breach of the relevant PRC laws, rules or regulations.
Land Occupation and Land Use Right
b. As at the date of this Offer Document, Mianzhu Norwest is conducting its Mining Operations
on forestry land of approximately 2.4564 hectares (the Current Land Occupation).
Approval from the Deyang Forestry Bureau
Prior to August 2012, Mianzhu Norwest conducted its Mining Operations on forestry land of
approximately 1.7665 hectares (the Previous Land Occupation).
In respect of the Previous Land Occupation, Mianzhu Norwest obtained the approval
from the Deyang Forestry Bureau on 9 August 2010 for a period of two (2) years and this
approval has expired at the end of July 2012 (the 2010 Forestry Bureau Approval).
In respect of the Current Land Occupation, Mianzhu Norwest successfully obtained the
approval from the Deyang Forestry Bureau on 24 August 2012 for another period of two
(2) years and this approval will expire by the end of July 2014 (the 2012 Forestry Bureau
Approval).
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GENERAL INFORMATION ON OUR GROUP
Conrmation from the Mianzhu Land Bureau
Previous Land Occupation
For the Previous Land Occupation, on 16 February 2012, representatives of Mianzhu
Norwest and King & Wood Mallesons visited Mianzhu Land Bureau and in the meeting, the
(Head of Mianzhu Land Bureau) (the Head of Land Bureau) verbally conrmed that
the Mianzhu Land Bureau does not issue land use rights certicate for the Previous Land
Occupation. Subsequent to this meeting, the Mianzhu Land Bureau issued a conrmation
letter (the Mianzhu Land Bureau Conrmation Letter) stating that, inter alia: (i) Mianzhu
Norwest has since its incorporation been lawfully in compliance with all PRC state and
local land laws and regulations; (ii) Mianzhu Norwest has not been found of any actions in
violation of any relevant land administration laws, rules and regulations; and (iii) Mianzhu
Norwest has also not been imposed with any statutory or regulatory penalties in respect of
land nor has it been involved in any legal dispute with the Mianzhu Land Bureau in relation
to any land matters.

Current Land Occupation
For the Current Land Occupation, as at the date of this Offer Document and to the best of its
knowledge and belief, Mianzhu Norwest has conrmed that:
(i) based on the Mianzhu Land Bureau Conrmation Letter, it is in compliance with and
has not breached any PRC laws, rules and regulations, including without limitation,
those of the PRC state and local government, or arrangements with any third parties
and since receipt of the Mianzhu Land Bureau Conrmation Letter, it has been in
compliance with and has not breached any PRC laws, rules and regulations, including
without limitation, those of the PRC state and local government, or arrangements with
any third parties;
(ii) it has not been provided with any notice of statutory or regulatory breaches, penalties
or nes from the relevant authorities or other third parties;
(iii) it has not been imposed with any statutory and regulatory penalties or nes from the
relevant authorities or other third parties; and
(iv) it has not been involved in any legal dispute with the relevant authorities or other third
parties.
Taking into consideration the foregoing, King & Wood Mallesons is of the opinion that, as at
the date of this Offer Document:
(aa) Deyang Forestry Bureau is the relevant and competent authority to issue the 2010
Forestry Bureau Approval and the 2012 Forestry Bureau Approval regarding the
Previous Land Occupation and Current Land Occupation, respectively (collectively, the
Land Occupation);
(bb) Mianzhu Land Bureau is the relevant and competent authority in respect of the Land
Occupation and has the right to issue the Mianzhu Land Bureau Conrmation Letter;
(cc) (in respect of the Previous Land Occupation) (i) Mianzhu Norwest has obtained
the relevant approvals and conrmation from the Deyang Forestry Bureau and the
Mianzhu Land Bureau (collectively, the Competent Authorities); (ii) Mianzhu
Norwest is in compliance with all the legal and regulatory requirements of the
Competent Authorities, and all relevant PRC state and local land laws, rules and
regulations as conrmed by the Competent Authorities; and (iii) there are no other
PRC authorities, save for the Competent Authorities, from which Mianzhu Norwest
requires any such approvals, licences, permits and authorisations;
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GENERAL INFORMATION ON OUR GROUP
(dd) Mianzhu Norwest has conrmed that since 2002, Mianzhu Norwest has obtained the
necessary approvals for its temporary occupation of the forestry land from the Deyang
Forestry Bureau. Mianzhu Norwest has not encountered any material difculties
in obtaining such approvals in the past, and will use its best endeavours to meet all
relevant conditions and requirements as may be required by the relevant PRC laws,
rules and regulations and all competent authorities in order to renew or obtain such
approvals in the future. Therefore, notwithstanding the (Regulations
for the Implementation of Forestry Law), which states that the period of temporary
occupation of forestry land shall not exceed two (2) years, King & Wood Mallesons
is of the opinion that the risk of Mianzhu Norwest not being able to renew or obtain
the necessary approvals (from the Deyang Forestry Bureau) for the Current Land
Occupation is relatively low;

(ee) based on the documents provided by Mianzhu Norwest, as of the date of this Offer
Document and to the best of its knowledge, King & Wood Mallesons has found that
Mianzhu Norwest :
i. has not been provided with any notice of statutory or regulatory breaches,
penalties or nes from the relevant authorities, including the Mianzhu Land
Bureau, or other third parties;
ii. has not been imposed any statutory and regulatory penalties or nes from the
relevant authorities, including the Mianzhu Land Bureau, or other third parties;
and
iii. has not been involved in any legal dispute with the relevant authorities, including
the Mianzhu Land Bureau, or other third parties,
in respect of the Current Land Occupation; and
(ff) based on the reasonable enquiries made by King & Wood Mallesons, as of the date of
this Offer Document and to the best of its knowledge, King & Wood Mallesons has not
found that any statutory and regulatory penalties or nes were imposed on Mianzhu
Norwest by either the Mianzhu Land Bureau or the Deyang Forestry Bureau in respect
of the Current Land Occupation.
To further clarify whether the Mianzhu Land Bureau issues land use rights certicates
for the land occupied by other mines situated in the vicinity of the Mines, King & Wood
Mallesons contacted the Head of Land Bureau, via telephone on 4 July 2013. The Head
of Land Bureau did not disclose whether the Mianzhu Land Bureau had issued land use
rights certicates for the land occupied by other mines situated in the vicinity of the Mines.
However, the Head of Land Bureau did verbally conrm that a company conducting mining
operations on the (Deyang Fa Mu Chang forestry land) (the Fa Mu
Chang Forestry Land), shall apply for approval from the competent forestry bureau, and
that the Mianzhu Land Bureau does not issue land use rights certicates for such forestry
land. The Mines are located on the Fa Mu Chang Forestry Land.
Taking the above-mentioned into consideration, to the best of its knowledge, King & Wood
Mallesons is of the opinion that:
(i) the Mianzhu Land Bureau does not issue land use rights certicates for the Land
Occupation;
(ii) there is a low possibility that Mianzhu Land Bureau issued land use rights certicates
for the forestry land occupied by other mines situated in the Fa Mu Chang Forestry
Land where the Mines are located; and
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GENERAL INFORMATION ON OUR GROUP
(iii) as at the date of this Offer Document, there is a relatively low possibility that, in
respect of the Land Occupation, Mianzhu Land Bureau will change its position from
that set out in the Mianzhu Land Bureau Conrmation Letter.
Co-operation Arrangement with Dashan
c. Under the Dashan Arrangement, depending on the level of investment contributed by each
party, the prots or losses (after deducting applicable costs and taxes) from the sales of the
phosphate rocks obtained from the relevant adits shall be apportioned between Mianzhu
Norwest and Dashan on a 50:50 or a 20:80 basis.
Under the Dashan Arrangement, Mianzhu Norwest shall be responsible for the unied
management, design, sales, employment and purchase of social security in respect of the
mineral resource of the co-operative zones. Furthermore the Dashan Arrangement does not
contain any provisions stating that the excavated phosphate rocks shall belong to Dashan,
and do not provide for the transfer of Mianzhu Norwests assets or its relevant mining or
exploration rights, permits or certicates to any party.
Mianzhu Norwest has confirmed that the Dashan Arrangement does not incur the
separation of ownership and operational control of the Mines, and during the performance
of the Dashan Co-operation Agreements, (i) Mianzhu Norwest is mainly responsible for the
operation as well as the management of the Mines and Dashan is mainly be responsible
for providing support such as technology, personnel and equipment; (ii) the ownership
right of the phosphate rocks excavated belongs to Mianzhu Norwest and the aforesaid
phosphate rocks shall be taken and sold by Mianzhu Norwest; and (iii) there are no oral or
written contracts regarding the transfer of Mianzhu Norwests assets or its relevant mining or
exploration right permits and certicates to any party.
Based on King & Wood Mallesons review of the Dashan Co-operation Agreements, there
are some provisions which directly refer to Dashan conducting certain mining activities in the
Mines (the Mining Provisions). Mianzhu Norwest has conrmed that it has no intention to
separate the ownership and operation control of the Mines via the Mining Provisions, and
Mianzhu Norwest will not enter into any further arrangement, whether pursuant to the Mining
Provisions or otherwise, with Dashan in respect of the mining and exploration activities in
the Mines which, to the best of Mianzhu Norwests knowledge, information and belief, will
contravene applicable PRC laws, rules, regulations and requirements.
In light of the foregoing, King & Wood Mallesons is of the opinion that there is a relatively
low risk that (i) the co-operation between Mianzhu Norwest and Dashan is in contravention
of PRC laws, rules and regulations with regards to the disposal of mining rights, where
transferring the possession of mining rights via contracting out is explicitly forbidden; or (ii)
any penalties will be imposed on Mianzhu Norwest, or the mining rights of Mianzhu Norwest
in respect of the Mines will be revoked, as a result of such contravention.
In addition, the Dashan Co-operation Agreements provide, inter alia, if the enterprise nature
of Mianzhu Norwest is changed due to reform or other reasons, Mianzhu Norwest shall
ensure (i) the preferential rights of Dashan to participate in its reform or reorganisation (the
Preferential Rights Clause); or (ii) the rights and obligations of Dashan under the Dashan
Co-operation Agreements remain unchanged.
Mianzhu Norwest has conrmed that save for the change in group structure arising from the
Restructuring Exercise and the change in shareholdings arising from the proposed Invitation,
the business and operations of Mianzhu Norwest remains unchanged and it intends to
continue co-operating with Dashan in compliance with the terms of the Dashan Co-operation
Agreements. Therefore, the rights and obligations of Dashan under the Dashan Co-operation
Agreements remain unchanged even after the Invitation. Mianzhu Norwest has further
116
GENERAL INFORMATION ON OUR GROUP
conrmed that Dashan has been notied of the proposed listing of the Company and that the
arrangements under the Dashan Co-operation Agreements will continue, and Dashan has
responded by verbally conrming that the listing of the Company does not affect Dashans
rights and obligations under the Dashan Co-operation Agreements.
Based on the foregoing, King & Wood Mallesons is of the opinion that so long as Mianzhu
Norwest ensures that the rights and obligations of Dashan under the Dashan Co-operation
Agreements remain unchanged, the Invitation will not trigger the Preferential Rights Clause
in the Dashan Co-operation Agreements.
Based on its review of the Dashan Co-operation Agreements, King & Wood Mallesons is of
the opinion that the provisions of the Dashan Co-operation Agreements will not affect the
legal rights of Mianzhu Norwest to carry out its current business operations.
The Dashan Co-operation Agreements for Mine 1 will expire and terminate on: (i) the
exhaustion of the mineral resources in the agreed mining areas; or (ii) the issuance of a
stop order by the relevant government authorities. The Dashan Co-operation Agreements for
Mine 2 will expire and terminate on the later of: (i) the expiry of the mining permits relating to
the agreed mining areas; or (ii) the exhaustion of phosphorus rock resources in the agreed
mining cooperation areas.
Chemical Production Operations
Land Use Rights
d. Mianzhu Norwest has been granted the (land use rights certicate) for
Phase 1 Land. The land use rights for Phase 1 Land is subject to a mortgage in favour of the
Bank of China Limited, Mianzhu Branch (the BOC Mortgage) in respect of a term loan of
RMB5 million from 5 February 2013 to 5 February 2018 (the BOC Loan).
Based on the documents provided, and as conrmed by Mianzhu Norwest, save for the
aforesaid BOC Mortgage, there is no other encumbrance on Mianzhu Norwests land use
rights for Phase 1 Land. Mianzhu Norwest is entitled to use and occupy Phase 1 Land and
transfer, lease and mortgage the corresponding land use rights in accordance with the PRC
laws and regulations within the valid term of such land use rights certicate.
e. As at the date of this Offer Document, Mianzhu Norwest has not obtained the
(land use rights certicate) for Phase 2 Land.
Construction Permits and Building Ownership
f. Mianzhu Norwest completed the construction of the P
4
Plant at the New Gongxing Site under
Phase 1 of the Rebuilding Programme at the end of 2012.
For the construction of the P
4
Plant under Phase 1 of the Rebuilding Programme, Mianzhu
Norwest has obtained, inter alia, the (project approval), the
(environmental impact approval), the (safety examination approval), the
(lightning device design approval), the
(construction site selected and earthquake resistance opinion letter), the
(construction project re protection design approval letter), the
(construction land planning permit), the (construction project
planning permit), the (building construction permit), the
(environmental trial production approval) and the (record of safety
trial production plan).
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GENERAL INFORMATION ON OUR GROUP
In addition to the said permits, Mianzhu Norwest shall obtain other necessary permits and
approvals in order to obtain legal completion for Phase 1 of the Rebuilding Programme,
mainly and materially, the (acceptance of environmental protection), the
(approval of preliminary evaluation of the harm of occupational
diseases), the (occupational diseases protection facilities
design examination approval), the (approval of evaluation of
occupational diseases control effect), the (acceptance of occupational
diseases protection facilities), the (safety examination approval), the
(acceptance of re control), the (acceptance of completed project)
and the (building ownership rights certicate) (the Phase 1 Completion
Approvals).
As at the date of this Offer Document, Mianzhu Norwest is in the process of applying for
the Phase 1 Completion Approvals. Mianzhu Norwest believes that the applications for
the Phase 1 Completion Approvals are procedural in nature, and expects to receive such
approvals in due course upon completion of the necessary application procedures. Mianzhu
Norwest has indicated and conrmed that it has not encountered any material difculties in
obtaining such approvals in the past in respect of its Previous Hanwang Facilities. Mianzhu
Norwest conrms that it will use its best endeavours to meet all relevant conditions and
requirements as may be required by the relevant PRC laws, rules and regulations and all
competent authorities in order to renew or obtain the Phase 1 Completion Approvals.
In light of the foregoing, King & Wood Mallesons is of the opinion that the risk of Mianzhu
Norwest not being able to obtain the Phase 1 Completion Approvals is relatively low.
g. Mianzhu Norwest has built temporary buildings on Phase 2 Land and the STPP equipment,
machinery and storage facilities are currently located in these temporary buildings.
In order to carry out and complete the construction on Phase 2 Land, Mianzhu Norwest
shall obtain the necessary permits, licences or approvals, materially and mainly the
(land use rights certicate), the (safety examination approval), the
(environmental trial production approval), the (record of
safety trial production plan), the (acceptance of environmental protection), the
(approval of preliminary evaluation of the harm of occupational
diseases), the (occupational diseases protection facilities
design examination approval), the (approval of evaluation of
occupational diseases control effect), the (acceptance of occupational
diseases protection facilities), the (safety examination approval), the
(acceptance of completed project) and the (building ownership rights
certicate).
According to the relevant PRC laws, rules or regulations, a company shall not occupy or
use land or construct any buildings on it without proper approvals and/ or permits from the
competent authorities. Since Mianzhu Norwest has not received all the approvals and/ or
permits for Phase 2 Land and the temporary buildings on it, the relevant authority shall have
the right to (i) order Mianzhu Norwest to return the Phase 2 Land; (ii) order Mianzhu Norwest
to demolish any buildings or installations on Phase 2 Land within a certain time limit and
conduct restoration; and/ or (iii) conscate the structures and installations built on such land
and impose penalties on Mianzhu Norwest.
Leases
h. Mianzhu Norwest has leased Unit F, 13th Floor, Xinshidai Guangchang, No. 42 Wenwu
Road, Xinhua Avenue, Chengdu City, Sichuan Province for the duration of 1 May 2013 to 30
April 2014 for use as ofce premises. In accordance with the relevant PRC laws, property
leases shall be led by both the lessor and the lessee within the time limit prescribed by the
competent property administration authority, failing which, a penalty of between RMB1,000
and RMB10,000 shall be imposed. This lease has not been led with the competent property
administration authority. Such non-compliance will not affect the effectiveness or legal
enforceability of the lease.
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GENERAL INFORMATION ON OUR GROUP
3. Compliance with Laws, Approvals and Licences
General
a. As a result of changes in the PRCs foreign investment policy, the classication of foreign
investment in phosphate mines was changed from the encouraged category to the
restricted category in 2007. As such, the incorporation and changes of a foreign invested
enterprise involved in restricted industries shall be governed by the commerce bureau/
departments of a provincial or higher level.
However, Mianzhu Norwest was incorporated in 1996. Since incorporation, all changes to
Mianzhu Norwest were approved by the Deyang Commerce Bureau. To clarify the impact
of the Revised Catalogue to our Group, King & Wood Mallesons, together with Mianzhu
Norwest, visited the Deyang Commerce Bureau. During this visit, the (section chief) in
charge of Mianzhu Norwest has verbally conrmed that Deyang Commerce Bureau is the
competent authority to approve any changes to Mianzhu Norwest.
Mining Operations
Mining Rights and Exploration Rights
b. Please refer to the opinion under section 2(a) above.
Land Occupation and Land Use Right
c. Please refer to the opinion under section 2(b) above.
Mining Safety Production Permits
d. As at the Latest Practicable Date, Mianzhu Norwest is carrying out Commercial Mining
Operations for Mine 1, which is permitted based on the Commercial Mining Notication. The
Mining Safety Production Permit for Mine 1 was renewed on 26 September 2012 and is valid
until 25 September 2015.
In respect of Mine 2, Mianzhu Norwest is carrying out Trial Mining Operations, which is
permitted based on the Trial Mining Notications.
As part of the measures by the relevant PRC authorities to assist mining companies in
Mianzhu City, Sichuan Province affected by the Wenchuan Earthquake, mining companies
such as Mianzhu Norwest have been granted certain exemptions and deferments in respect
of the renewal of the Mining Safety Production Permits. As such, Mianzhu Norwest is
permitted to defer renewal of its Mining Safety Production Permits.
As at the date of this Offer Document, Mianzhu Norwest has submitted its application for the
Mining Safety Production Permit for Mine 2. Mianzhu Norwest believes that the application
for the Mining Safety Production Permit for Mine 2 is procedural in nature, and expects to
receive this permit in due course upon completion of the necessary application procedures.
Mianzhu Norwest has indicated and conrmed that it has not encountered any material
difculties in obtaining this permit for Mine 2 in the past (prior to the Wenchuan Earthquake).
Mianzhu Norwest conrms that it will use its best endeavours to meet all relevant conditions
and requirements as may be required by the relevant PRC laws, rules and regulations and
all competent authorities in order to renew or obtain Mining Safety Production Permit for
Mine 2. Mianzhu Norwest will be able to carry out Commercial Mining Operations for Mine 2
after it receives the Mining Safety Production Permit for Mine 2.
In light of the foregoing, King & Wood Mallesons is of the opinion that the risk of Mianzhu
Norwest not being able to obtain the Mining Safety Production Permit for Mine 2 is relatively
low.
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GENERAL INFORMATION ON OUR GROUP
Past Excess Production
e. Mianzhu Norwest exceeded the approved production scale for Mine 1 for FY2005, FY2006
and FY2007.
The relevant competent land and resources department has the right to require a mining
company to suspend its operations and rectify the non-compliance within a certain period
of time if, inter alia, the mining company does not carry out its operations according to its
approved development and utilisation plan for its mines.
However, Mianzhu Norwest renewed the mining right certicates for the Mines in 2011 and
Mianzhu Norwest obtained the requisite approvals from the Sichuan Land Department to
increase the approved production scales for the Mines in 2005 (and thereafter in 2010 in
respect of Mine 2 only). In addition, Mianzhu Norwest has conrmed that it has duly paid
all applicable resource taxes to Mianzhu State Tax Bureau and Mianzhu Local Tax Bureau
including in respect of the excess production. As of the Latest Practicable Date, Mianzhu
Norwest has conrmed that it has not received any penalties from any competent authorities
in respect of the excess production, or any orders or notications by any competent
authorities to carry out any rectication work, or any notices of suspensions in respect of its
Mining Operations.
Taking into consideration the foregoing, King & Wood Mallesons is of the opinion that there
is a relatively low risk that the Sichuan Land Department will impose any penalties or revoke
the mining right certicate for Mine 1 due to the excess production.
Chemical Production Operations
Land Use Right
f. Please refer to the opinion under section 2(d) and section 2(e) above.
Construction Permits and Building Ownership
g. Please refer to the opinion under section 2(f) and section 2(g) above.
Phase 1 Chemical Production Approvals
h. For the Chemical Production Operations of Phase 1 of the Rebuilding Programme, Mianzhu
Norwest has obtained the approvals for trial chemical production operations, including the
(environmental trial production approval) and the record of the
(record of safety trial production plan) at the date of this Offer Document and will
need to apply for the necessary approvals for commercial chemical production operations
(the Phase 1 Commercial Chemical Production Approvals) (collectively, the Phase 1
Chemical Production Approvals).
For Commercial Chemical Production Operations, the main Phase 1 Commercial Chemical
Production Approvals include, inter alia, the Chemical Safety Production Permits, the
Pollution Discharge Permit), the (hazardous chemicals business
licence), the (hazardous chemicals registration certicate), the
(licence for the manufacturing of industrial products), the
(environmental management registration licence for the production and use of
dangerous chemicals) and the (building ownership rights certicate).
As at the date of this Offer Document, Mianzhu Norwest is in the process of applying for
the Phase 1 Commercial Chemical Production Approvals. Mianzhu Norwest believes that
the applications are procedural in nature, and expects to receive the Phase 1 Commercial
Chemical Production Approvals in due course upon completion of the necessary application
procedures. Mianzhu Norwest has not encountered any material difculties in obtaining such
approvals in the past, and has indicated and conrmed that it had applied for and obtained
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GENERAL INFORMATION ON OUR GROUP
the aforesaid approvals for its Previous Hanwang Facilities. Mianzhu Norwest conrms that
it will use its best endeavours to meet all relevant conditions and requirements as may be
required by the relevant PRC laws, rules and regulations and all competent authorities in
order to renew or obtain the Phase 1 Commercial Production Approvals.
In light of the foregoing, King & Wood Mallesons is of the opinion that the risk of Mianzhu
Norwest not being able to obtain the Phase 1 Commercial Chemical Production Approvals is
relatively low.
i. Mianzhu Norwest produced minimal quantities of thermal phosphoric acid, SHMP and STPP
in FY2009, FY2010 and FY2011 at the Previous Hanwang Facilities which discharged
certain pollutants. Under PRC laws, rules and regulations, companies which discharge
pollutants are required to obtain a Pollution Discharge Permit which is subject to annual
inspection. Therefore, Mianzhu Norwest is required to have a Pollution Discharge Permit for
its Chemical Production Operations.
Mianzhu Norwests Pollution Discharge Permit expired in January 2008. However, it has
received a conrmation letter dated 18 January 2012 from the Mianzhu Environmental
Bureau stating, inter alia, that:
(a) the mining and the other production and operation activities of Mianzhu Norwest are in
compliance with relevant PRC environmental laws, rules and regulations; and
(b) since its incorporation, Mianzhu Norwest:
(i) has obtained all necessary licences for its mining and the other production and
operation activities as required under the relevant PRC environmental laws,
rules and regulations, and has fully and timely paid the pollutant discharge fee;
and
(ii) is in compliance with relevant PRC environmental laws, rules and regulations
and has not been penalised for environmental matters.
Mianzhu Norwest expects the Pollution Discharge Permit to be issued or renewed in 2013.
Conclusion
j. Save as disclosed above and in this Offer Document, to the best of its knowledge, King
& Wood Mallesons is of the opinion that Mianzhu Norwest has obtained all requisite
approvals, licences, permits and authorisations that would materially affect its exploration
activities, Mining Operations and Chemical Production Operations and Mianzhu Norwest is
in compliance with the relevant PRC laws, rules and regulations and/ or requirements from
the competent authorities, and where applicable, has complied with the conditions imposed
thereunder.
4. Litigation
a. Based on the conrmation by Mianzhu Norwest, as at the date of this Offer Document,
Mianzhu Norwest is not engaged in any legal or arbitration proceedings, including those
which are pending or known to be contemplated, which may have, or which have had, in the
12 months immediately preceding the date of lodgment of the Offer Document, a material
effect on its nancial position or protability. As at the date of this Offer Document, based
on the search results from the (National Courts Searching
System for Pending Judgment Debts) (the Pending Judgment Debts System), cases
involving Mianzhu Norwest as the (judgement debtor) have been concluded. Based
on Mianzhu Norwests conrmation, Mianzhu Norwest has fully discharged all payment
obligations due to judgment creditors for such cases. To the best of King & Wood Mallesons
knowledge, there is no other publicly available system for nation-wide litigation searches in
the PRC other than the Pending Judgment Debts System.
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GENERAL INFORMATION ON OUR GROUP
5. Share Capital of Mianzhu Norwest
a. Details of the present shareholder, registered capital and paid-up capital of Mianzhu Norwest
are as follows:
Name of Shareholder : Norwest Chemicals
Shareholding : 100%
Registered Capital : RMB140 million
Paid-up Capital : RMB140 million
b. All transfers of equity interest in Mianzhu Norwest have been approved by the Deyang
Commerce Bureau. Certain transfers of equity interest in Mianzhu Norwest in the past
have not been registered/ led with the Deyang AIC Bureau (the Non-Registration), and
such Non-Registration will incur certain penalties under the relevant PRC laws, rules and
regulations.
According to Article 29 of the (PRC Administrative Penalty Law),
if an illegal act is not discovered within two (2) years of its commission (the Limitation
Period), an administrative penalty shall not be imposed, except as otherwise prescribed by
law. King & Wood Mallesons has advised that, in practice, the relevant PRC authorities have
in some cases imposed administrative penalties after the Limitation Period.
Taking into consideration the foregoing, King & Wood Mallesons is of the opinion that there
is a relatively low risk that the Deyang AIC Bureau will impose any penalties on Mianzhu
Norwest for the Non-Registration. Notwithstanding the Non-Registration, Norwest Chemicals
was registered with Deyang AIC Bureau as the sole owner of Mianzhu Norwest on 4 April
2003, and accordingly the Non-Registration will not affect Norwest Chemicals status as the
proper, valid, legal and benecial owner of the entire equity interest in Mianzhu Norwest.
6. Legal Representative and Supervisor of Mianzhu Norwest
Legal Representative
a. Our CEO and Executive Director, Dr. Ong Hian Eng, is the Legal Representative of Mianzhu
Norwest.
King & Wood Mallesons has advised that Dr. Ong Hian Eng, being the Legal Representative
of Mianzhu Norwest, has the following powers in accordance with PRC law:
(i) to act as the representative of Mianzhu Norwest; and
(ii) to execute contracts on behalf of Mianzhu Norwest.
Supervisor
b. Toh Thiam Seah Victor is the (Supervisor) of Mianzhu Norwest. King & Wood Mallesons
has advised that under PRC law, the Supervisor of a company plays a non-executive role
and shall report to the shareholders of Mianzhu Norwest, namely, Norwest Chemicals.
Toh Thiam Seah Victor, being the Supervisor of Mianzhu Norwest, has the following major
responsibilities in accordance with PRC law:
(i) to monitor the acts of Mianzhu Norwests directors and ofcers;
(ii) to review the nancial affairs of Mianzhu Norwest;
(iii) to convene interim meetings of the shareholders; and
(iv) to exercise other powers prescribed by the articles of association.
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GENERAL INFORMATION ON OUR GROUP
PRC GOVERNMENT REGULATIONS
Our Mining Operations and our Chemical Production Operations in the PRC are governed by various
laws and regulations and subject to various licences, permits and governmental approvals. Below is a
summary of laws and regulations which have a material impact on our Groups business or operations:
PRC Laws relating to the Mineral Industry
According to the (Mineral Resources Law of the PRC) promulgated on 19
March 1986, effective as of 1 October 1986 and amended on 29 August 1996 and 27 August 2009, and
the (Rules for the Implementation of the Mineral Resources Law)
promulgated on and effective as of 26 March 1994, an enterprise that intends to explore and exploit
mineral resources shall apply for each exploration and mining rights separately according to the relevant
PRC laws, regulations and policies, and is required to undergo the registration process to obtain
licence(s) of exploration right and/ or mining right, unless the mining enterprise which intends to conduct
exploration operations for its own production within the dened mining areas has previously obtained
mining rights.
The (Procedures for Administration of Registration of Mining of Mineral
Resources) (the State Council Circular No. 241) was promulgated by the State Council and became
effective as of 12 February 1998. Under the State Council Circular No. 241, anyone licensed with mining
rights may le an alteration application to the relevant authorities within the term of validity of the mining
rights for such changes as those in the scope of the mining area, the main mineral categories to be
exploited, the exploitation mode, the name of the mining enterprise and/ or the transfer of the mining right
according to the relevant laws. If the holder of a mining right intends to continue with mining, it shall apply
for an extension with the relevant authority at least 30 days prior to the expiration of the mining right. If
the holder of a mining right fails to apply for an extension at least 30 days prior to the expiration of the
mining right, the permit will terminate automatically.
The (Measures for the Area Registration Administration of Mineral
Resources Exploration and Survey) (the State Council Circular No. 240) was promulgated by the
State Council and became effective as of 12 February 1998. Under the State Council Circular No. 240,
in case of necessity for an extension of the duration for the exploration and survey work, the holder of
the licence(s) of exploration right should, 30 days prior to the expiration of the validity of the exploration
and survey permit, go through the formalities of registration for extension with the relevant authorities.
The duration of each extension shall not exceed two (2) years. Any holder of exploration right who fails
to go through the formalities of registration for extension on expiry, the exploration and survey permit will
terminate automatically.
According to the (Tentative Provisions on the Grant and Assignment of
Mineral Rights) (the Tentative Provisions) promulgated on and effective as of 1 November 2000, a
holder of the exploration and mining rights (the mineral rights) has the right to possess, use, benet
from and dispose of its mineral right in accordance with laws. A mineral right holder may lawfully
assign its mineral right in accordance with the Tentative Provisions through sale, capital contribution,
co-operative exploration or mining or share listing. The parties to the assignment shall complete the
procedure for the change of registration of the mineral right with the original registration and licensing
authority. A mineral right holder may also lease or mortgage its mineral right in accordance with the
Tentative Provisions.
According to the (Administrative Measures for the Assignment of Mining
Rights and Exploration Rights) promulgated on and effective as of 12 February 1998, the assignment of
mineral rights shall satisfy relevant essential requirements, and a holder of the mineral rights shall apply
for the assignment of mineral rights with the relevant authority.
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GENERAL INFORMATION ON OUR GROUP
PRC Laws relating to Production Safety
According to the (Production Safety Law of the PRC) promulgated on 29 June
2002, effective as of 1 November 2002 and amended on 27 August 2009, the
(Law of the PRC on Safety in Mines) promulgated on 7 November 1992, effective as of 1 May 1993 and
amended on 27 August 2009 and the (related implementation rules)
promulgated and effective as of 30 October 1996, (i) safety facilities in mine construction projects shall
be designed, constructed and put into operation at the same time as the commencement of the principal
parts of the projects; (ii) the design of a mine shall comply with the safety rules and technological
standards of the mining industry and shall be approved by the relevant authorities; and (iii) such mines
may start production or operations only after they have passed the safety check and approval process as
required by the relevant PRC laws and administrative regulations.
According to the (Regulation on Work Safety Licences) promulgated and effective
as of 13 January 2004 (as amended on 18 July 2013) and the
(Measures for the Implementation of Work Safety Licences for Non-coal Mine Enterprises) promulgated
and effective as of 8 June 2009, (i) the work safety licensing system is applicable to any enterprise
engaging in non-coal mining and such enterprise may not produce any products without obtaining a work
safety licence; (ii) prior to producing any products, the non-coal mining enterprise shall apply for a work
safety licence, which is valid for three years; (iii) the work safety bureau at or above provincial level are
in charge of issuing the work safety licence for non-coal mining enterprise, which may authorise the work
safety bureau at municipality level with districts to issue the same; and (iv) if a work safety licence needs
to be extended, the enterprise shall apply for an extension with the administrative authority who issued
the original licence three (3) months prior to the expiration of the original licence.
PRC Laws relating to Forestry Land
According to the (Forest Law of the PRC) promulgated on 20 September 1984,
effective as of 1 January 1985 and amended on 29 April 1998 and 27 August 2009, and the
(implementation rules), prospecting, mining and various construction projects
shall not occupy forestry land, or shall occupy as little as possible of such forestry land. In the case of
necessary occupation or expropriation of forestry land, such projects shall apply for examination by,
and the approval of, the competent forestry authorities under the relevant peoples government above
the county level. The entity using the land shall pay the forest vegetation recovery fees in line with the
relevant provisions of the State Council. The term for temporary occupation of forestry land shall not
exceed two (2) years, and no permanent building may be built on such temporarily occupied forestry land;
the entity using the land must restore its condition for forestry production when the term of occupation
expires.
PRC Laws relating to Land
According to the (Land Administration Law of the PRC) promulgated on 25
June 1986, effective as of 1 January 1987 and amended on 29 December 1998 and 28 August 2004, an
entity shall obtain land use rights for construction projects. Land collectively owned by rural residents is
contracted to and operated by the members of respective collective economic entities for uses such as
plantation, forestry, livestock husbandry or shery production. The land use rights of collectively owned
land shall not be granted, assigned or leased to any party for any non-agricultural uses. In the case of
temporary use of state-owned land or land collectively-owned by farmers for construction projects or
by geological survey teams, approval shall be obtained from the land administrative department of the
government at or above the county level. Land users shall sign contracts with relevant land administrative
department or rural economic collective organisations or village committees for the temporary use of
land, depending on the ownership of land and shall pay land compensation fees as stipulated in the
contracts for the temporary use of land. The term for the temporary use of land shall generally not exceed
two (2) years.
PRC Laws relating to Construction
According to the (Construction Law of the PRC) promulgated on 1 November
1997, effective as of 1 March 1998 and amended on 22 April 2011, before the start of construction
projects, construction entities shall apply to the competent construction administrative departments for
construction licences.
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GENERAL INFORMATION ON OUR GROUP
PRC Laws relating to Planning
According to the (Urban and Rural Planning Law of the PRC) promulgated
on 28 October 2007 and effective as of 1 January 2008, if the right to use state-owned land for a
construction project is obtained by way of assignment, the construction entity shall, after concluding
the contract for assignment of the right to use state-owned land, obtain the construction land planning
permit from the competent department of urban and rural planning. In order to build any structure, xture,
road, pipeline or other engineering project within a city or town planning area, the construction entity or
individual shall apply to the competent department of urban and rural planning for the construction project
planning permit.
PRC Laws relating to Geological Environment Protection
According to the (Provisions on the Protection of the Geologic Environment of
Mines) promulgated on 2 March 2009 and effective as of 1 May 2009, (i) when an applicant for mining
rights applies for the mining right, the applicant shall prepare a plan for the protection and restoration of
the mines geological environment and submit such plan to the competent land and resources authority
for approval; (ii) when a mines geological environment is destroyed due to mineral mining, the holder of
a mining right shall be responsible for restoration of the environment to its condition prior to any mining
operations and the cost of such restoration is included in the production cost; and (iii) the holder of a
mining right shall pay a security deposit for the restoration of the geological environment of mines. The
standard and measures for the payment of the security deposit for the restoration of the geological
environment of mines are implemented in compliance with relevant provisions formulated by each
province, autonomous region or municipality.
PRC Laws relating to Land Rehabilitation
According to the (Rules on the Land Rehabilitation) promulgated on and effective as
of 5 March 2011, the operation and construction entity or individual shall be responsible for the land
rehabilitation pursuant to the principle of who destroys, who rehabilitates. The land rehabilitation
obligator shall submit the land rehabilitation plan together with other required documents when
conducting the mining rights application procedure. The relevant land and resources bureau shall not
issue the mining rights certicate if the land rehabilitation obligator did not draft the land rehabilitation
plan, or the rehabilitation plan is not in compliance with the relevant requirements.
PRC Laws relating to Environmental Protection
According to the (Environmental Protection Law of the PRC) (the
Environmental Protection Law) promulgated on and effective as of 26 December 1989, the State
Administration for Environmental Protection shall establish the national standards for environment quality.
The various governments of the provinces, autonomous regions and municipalities under the Central
Government may establish their own local standards of environment protection in areas not specied in
the national standards for environment protection and shall le a record with the State Administration for
Environmental Protection.
The Environmental Protection Law requires all enterprises dealing in industries that cause environmental
pollution and other public hazards to incorporate environmental protection into their plans and establish
a system for environmental protection. These enterprises shall adopt effective measures to prevent and
control the pollution and harms caused to the environment by waste gas, waste water, waste residues,
dust, malodorous gases, radioactive substances, noise, vibration and electromagnetic radiation generated
in the course of production, construction or other activities.
The Environmental Protection Law requires that all installations for the prevention and control of pollution
at a construction project be designed, built and commissioned together with the principal part of the
project. No permission shall be given for a construction project to be commissioned or used, until its
installations for the prevention and control of pollution are examined and considered up to standard by
the competent department of environmental protection administration.
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GENERAL INFORMATION ON OUR GROUP
According to the (Ordinance of Environmental Protection Administration for
the Construction Project) promulgated on and effective as of 29 November 1998, the
(Law of the PRC on Appraising of Environment Impacts) promulgated on 28 October 2002
and effective as of 1 September 2003 and the (Provisions on
Hierarchical Approval of the Appraising of Environment Impacts for the Construction Project) promulgated
on 16 January 2009 and effective as of 1 March 2009, the PRC government has set up a system to
evaluate the environmental impact of a construction project. Construction enterprises shall submit the
documents relating to the environmental impact of their projects to the competent environmental
authorities for approval. Construction cannot be commenced without the approvals of competent
environmental authorities.
According to the (Law of the PRC on Prevention and Control of Water
Pollution) (promulgated on 11 May 1984, amended on 15 May 1996 and 28 February 2008 and effective
as of 1 June 2008) any new construction, reconstruction or expansion projects, and other installations
that directly or indirectly discharge pollutants into the water shall be subject to the state regulations on
environmental protection of construction projects. Enterprises and institutions that discharge pollutants
directly or indirectly into a water body shall report to and register with the local environmental protection
department of their existing facilities for discharging and treating pollutants, and the categories, quantities
and concentrations of pollutants discharged under their normal operation conditions, and also submit
to the same department technical information concerning prevention and control of water pollution. It
is necessary to obtain the pollutant discharge permit for directly or indirectly discharging pollutants into
the water. Enterprises and institutions that discharge pollutants into a water body shall pay a pollutant
discharge fee. If the discharge exceeds the limits set by the national or local standards, they shall pay a
fee for excess discharge according to State regulations.
According to the (Law of the PRC on Prevention and Control of
Atmospheric Pollution) promulgated on 5 September 1987, amended on 29 August 1995 and 29
April 2000 and effective as of 1 September 2000, any new construction, reconstruction or expansion
projects, that discharge pollutants into the air shall be subject to the state regulations on environmental
protection of construction projects. Enterprises that discharge atmospheric pollutants shall report to the
local administrative department of environmental protection of their existing discharge and treatment
facilities for pollutants and the categories, quantities and concentrations of pollutants discharged under
normal operation conditions and submit to the same department their technical information concerning
prevention and control of atmospheric pollution.
The PRC implements a system of fees collection for discharging pollutants on the basis of the categories
and quantities of the atmospheric pollutants discharged, and establishing reasonable standards for
collection of fees. This is necessary to strengthen the control of atmospheric pollution and the economic
and technological conditions in the PRC.
According to the (Law of the PRC on Prevention and Control
of Environmental Pollution by Solid Waste) promulgated on 30 October 1995 (and as amended on 29
December 2004 and 29 June 2013) and effective as of 1 April 2005, polluters, producers, salesmen and
importers shall bear legal liability if they fail to prevent and control the discharge of solid wastes.
According to the (Law of the PRC on Prevention and Control of
Environmental Pollution by Noise) promulgated on 29 October 1996 and effective as of 1 March 1997,
new construction, reconstruction and expansion projects that cause noise shall be subject to the state
regulations on environmental protection of construction projects. Industrial enterprises that cause much
noise during industrial production with xed facilities shall report to the local environmental protection
department the categories and quantities of their existing facilities for discharging noise, and the volume
of noise discharged under their normal operation conditions. They should also report on their facilities
to combat excessive noise, and submit technical information concerning the prevention and control of
noise pollution. Enterprises that cause excessive noise exceeding the relevant standards shall pay the
discharge fee subject to the regulations.
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GENERAL INFORMATION ON OUR GROUP
PRC Laws relating to Dangerous Chemicals
According to the (Regulation on the Safety Administration of Dangerous
Chemicals) promulgated on 26 January 2002, amended on 16 February 2011 and effective as of 1
December 2011, the safety administration of the production, storage, use, operation and transport
of dangerous chemicals shall comply with the provisions of this regulation. Any new construction,
reconstruction and expansion projects for producing and storing dangerous chemicals shall be subject
to the examination of competent work safety bureau. Before the production of dangerous chemicals,
the enterprise shall obtain the dangerous chemicals safety production permit according to the
(Measures for the Implementation of Work Safety Licences for
Dangerous Chemicals Production Enterprises) effective as of 1 December 2011, and the
(Regulation on Work Safety Licences) effective as of 13 January 2004 (and as amended on 18 July
2013). Enterprises producing dangerous chemicals listed in the industrial product catalogue shall obtain
the industrial product production licence according to the
(Regulation on Administration of Industrial Product Production Licence) effective as of 1 September 2005.
Activities relating to dangerous chemicals are highly regulated and subject to the relevant permissions
and licences from government authorities. Enterprises without such permissions or licences shall not
operate dangerous chemicals.
According to the (Measures on Registration Administration of Dangerous
Chemicals) (the Measures on Dangerous Chemicals) (promulgated on 1 July 2012 and effective as
of 1 August 2012) enterprises involved in the production and importation of dangerous chemicals listed
in the dangerous chemicals catalogue shall comply with the Measures on Dangerous Chemicals and
conduct dangerous chemicals registration.
According to the () (Measures on Registration of Environmental
Management of Dangerous Chemicals (for Trial Implementation)) promulgated on 10 October 2012 and
effective as of 1 March 2013, enterprises involved in the production and use of dangerous chemicals
listed in the dangerous chemicals catalogue shall conduct environmental management registration and
obtain the registration licence for environmental management of dangerous chemicals with valid term of
three (3) years.
PRC Laws relating to Taxation and Fees
(a) Resource Tax
According to the (Interim Regulations of the PRC on Resource
Tax) promulgated on 25 December 1993, effective as of 1 January 1994 and amended on 30
September 2011, any enterprise engaged in the exploitation of mineral products within the PRC is
required to pay a resource tax.
(b) Resource price adjustment fees
According to the (Price Law of the PRC) promulgated on 29 December
1997, and effective as of 1 May 1998, the state shall introduce and gradually improve the
mechanism of regulation of prices, mainly through market forces and macroeconomic controls.
Under this mechanism, pricing should be subject to the value law. Most types of merchandise and
services are to adopt market regulated prices, with only a few exceptions being subject to prices
set by the government.
The (Administrative Regulations of Sichuan Province on Price), adopted on
16 April 1996 and amended on 6 April 1998, regulates price behavior between the state organs,
enterprises, institutions, other organisations and individuals within the Sichuan administrative
region. It seeks to protect the legal rights of consumers and business operators.
Under the (Administrative Measures
of Mianzhu on the Collection and Use of Price Adjustment Fund of Phosphate Ore (for Trial
Implementation)), promulgated on 15 June 2012, enterprises and individuals who engage in
phosphate ore mining in Mianzhu shall pay the price adjustment fund of phosphate ore based on
volume on a monthly basis, at a rate of RMB30 per tonne.
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GENERAL INFORMATION ON OUR GROUP
(c) Mineral resources compensation fees
According to the (Provisions on the Administration of the Collection
of Mineral Resources Compensation Fees) promulgated on 27 February 1994, effective as of 1
April 1994 and amended on 3 July 1997, mineral resources compensation fees shall be paid by the
holder of the mining right.
(d) Mineral resources use fees
According to the (Procedures for Administration of Registration of
Mining of Mineral Resources) (promulgated on and effective as of 12 February 1998) mineral
resources use fees shall be paid by the holder of the mining right. The mineral resources use
fees shall be paid annually at an annual price of RMB1,000 (approximately S$207, based on the
Exchange Rate as at the Latest Practicable Date) per sq km of the mining area.
(e) Use fee and purchase price of mineral exploration and mining rights
According to the (Measures for the Administration of the Use
Fee and Purchase Price of Mineral Exploration and Mining Rights) promulgated on and effective as
of 7 June 1999, any party who conducts exploration and mining operations of mineral resources in
the PRC is required to pay a use fee for the mineral exploration and mining right, and the purchase
price for the mineral exploration and mining right.
The use fee for the mineral exploration right is calculated on the basis of the exploration period
and the size of the area, and is payable annually. The annual rate is RMB100 per sq km for the rst
three (3) exploration years, with an additional RMB100 per year from the fourth exploration year
onwards, up to a maximum of RMB500. The use fee for the mining right, which is RMB1,000 per sq
km per year, is payable annually based on the size of the mining area.
The purchase price for the mineral exploration and mining right shall be based on the valuation
price as determined by the competent department of geology and mineral resources under the
State Council. Such purchase price can be paid on a lump sum basis, or paid in installments. If the
purchase price is paid in installments, all payments shall be made within two (2) years for mineral
exploration rights; and within six (6) years for mining rights.
COMPETITION
To the best of our knowledge, we believe that the main competitors in the PRC in respect of our Mining
Operations are as follows:
(Deyang Haohua Qingping LinKuang Co., Ltd)
(Sichuan Lomon Phosphate Products Joint Stock Ltd. Company)
(Sichuan Mianzhu Chuanlong Chemicals Co., Ltd)
(Yunnan Malong Industry Group Co., Ltd)
To the best of our knowledge, we believe that the main competitors in the PRC in respect of our
phosphate-based chemical products are as follows:
(Hubei Xingfa Chemicals Group Co., Ltd)
(Jiangyin Chengxing Industrial Group Co. , Ltd)
(Wuhan Inorganic Salt Chemical Co., Ltd.)
128
GENERAL INFORMATION ON OUR GROUP
In addition to the above, CRU, the Independent Market Consultant, has also identied the following as
competitors of our Group:
(Chongqing Chuandong Chemical (Group) Co., Ltd)
(Jiangsu Chengxing Phosph-Chemicals Co., Ltd)
(Yunphos Group Co., Ltd)
We have entered into co-operation arrangements with Lomon Products and Lomon Chemicals in respect
of our Mining Operations. Please refer to the section entitled General Information on our Group Mining
Operations - Co-operation arrangements of this Offer Document for further details. None of our Directors,
Substantial Shareholders or their Associates has any interest, direct or indirect, in any of our competitors
listed above.
COMPETITIVE STRENGTHS
Our Directors consider the following to be our core competitive strengths:
(i) Our phosphate rocks are of relatively higher quality than other phosphate rocks mined in
the PRC
Based on the CRU Industry Report, the P
2
O
5
content of a phosphate rock is the typical
benchmark by which phosphate rocks are valued and priced, as, inter alia, higher phosphate
content typically means lower impurity content, and in turn, higher reaction efciencies, less waste
and fewer processing issues.
The industry preference is for phosphate rocks with P
2
O
5
content of 29% to 32%. However, the
phosphate rock deposits in the PRC have been shrinking, and the phosphate rock deposits with
P
2
O
5
content of 30% or higher are currently estimated to constitute only 10% to 25% of the PRCs
phosphate rock deposits. The CRU Industry Report further states that most of the phosphate mines
in the PRC are mining phosphate rocks with P
2
O
5
content of 20% to 25%, and that the average
grade of PRCs phosphate rock deposits is estimated to have P
2
O
5
content of less than 20%.
Based on the WGM Report, the measured and indicated phosphate rock resources for Mine 1 have
an average P
2
O
5
content of 28.7%, and the measured and indicated phosphate rock resources for
Mine 2 have an average P
2
O
5
content of 29.4%.
In light of the foregoing, we believe that our Mining Operations will yield phosphate rocks with
relatively high P
2
O
5
content, which will be valued and priced as higher-quality phosphate rocks,
and should generate strong demand from customers. Between 1 January and 30 June 2013, we
obtained an aggregate of approximately 93,000 tonnes of phosphate rocks with an average P
2
O
5
content of 30.6%.
In addition, we believe that the phosphate rocks obtained from our Mining Operations have
relatively low arsenic content levels. Based on our internal measurements, we believe that our
phosphate rocks have arsenic content of between 8 to 10 ppm, which is relatively low.
We believe that we will also be able to enjoy production and cost efciencies as we use our
phosphate rocks with relatively high P
2
O
5
content and low arsenic content in our Chemical
Production Operations, which we expect will yield us higher production efciencies.
129
GENERAL INFORMATION ON OUR GROUP
(ii) We benet from relatively lower production costs
We believe that we currently enjoy relatively lower costs of production due to the following reasons:
Low costs of quality raw material
We will be able to benet from cost savings in our Chemical Production Operations using
phosphate rocks from our Mines. With our own captive phosphorite resources, we will not be
subject to volatility in supply of phosphate rocks since we will be able to control our supply of
phosphate rocks, barring unforeseen circumstances.
Production efciency
We believe that we will be able to enjoy cost savings arising from production efciencies
due to (i) the use of our phosphate rocks with relatively high P
2
O
5
content from our Mines in
our Chemical Production Operations, which translates to lower impurity contents and fewer
processing issues; and (ii) construction of the New Gongxing Facilities which incorporate
current technology.
Improved logistics and transportation
We believe that we will be able to benet from improved logistics and transportation
upon completion of certain initiatives undertaken by the PRC authorities post-Wenchuan
Earthquake.
In July 2009, the Sichuan Development Commission and the Hong Kong SAR Mainland
Affairs Bureau announced plans to jointly construct the Mian Mao Highway. The Mian Mao
Highway has been under construction since September 2009, and will increase accessibility
between our Mines and the New Gongxing Facilities once it is completed. This is signicant
as this allows us to plan for an increase of our phosphate rock output due to anticipated
shortened travelling time and improved road conditions, without having to incur costs
associated with the construction of the said infrastructure. The transportation costs incurred
in the transportation of phosphate rocks to the New Gongxing Facilities are expected to be
reduced accordingly.
Lower cost of electricity
We also benet from a stable and reliable supply of electricity for our Chemical Production
Operations, which are electricity-intensive. Our electricity is supplied by the State Grid which
is generated via hydro power. By avoiding use during the low-water periods, we are able to
access a low-cost source of electricity for our Chemical Production Operations.
(iii) Our Mines and the New Gongxing Site are located close to each other and our customers
We believe that our Mines and the New Gongxing Site are strategically located in close proximity
to each other, with quick access to our customers and to transportation networks. The distance
between our Mines and the New Gongxing Site is approximately 40 km. As such, we will be able
to minimise transportation costs in the delivery of our phosphate rocks from our Mines to the New
Gongxing Facilities. Upon the completion of the Mian Mao Highway, we expect to benet from more
reliable and shortened time required for the delivery of our phosphate rocks from our Mines to the
New Gongxing Facilities and to our customers.
We are able to sell our phosphate-based chemical products to users of our products located in the
vicinity of our operations. As Sichuan Province in the PRC is generally agriculturally-focused, we
are able to sell our phosphate rocks to manufacturers of fertilisers located in Sichuan Province,
PRC. Our strategic proximity to these manufacturers provides us with a competitive edge over
our competitors as we are able to provide quality phosphate at lower costs due to savings in
transportation costs.
130
GENERAL INFORMATION ON OUR GROUP
(iv) We have an experienced management team
We have a dedicated and experienced management team, led by our CEO and Executive Director,
Dr. Ong Hian Eng, which has extensive knowledge of, and experience in, the phosphate industry
and provides our Group with the skills and expertise to implement its strategy.
Our Directors are supported by our team of experienced and competent Key Executives. Some
Key Executives are based in our headquarters in Singapore and others are based full-time in the
PRC to manage the operations of Mianzhu Norwest in the PRC. Many of our Key Executives have
over ten (10) years of relevant experience in their respective elds. Please refer to the sections
entitled Management and Corporate Governance Directors and Management and Corporate
Governance Key Executives of this Offer Document for further details on the working experience
of our Executive Directors and Key Executives.
PROSPECTS AND TREND INFORMATION
The following discussions about our prospects and trends include forward-looking statements that involve
risk and uncertainties. Actual results could differ materially from those that may be projected in these
forward-looking statements. Please also refer to the section entitled Cautionary Note Regarding Forward-
Looking Statements of this Offer Document. Barring unforeseen circumstances, our Directors have made
the following observations for the current nancial year ending 31 December 2013:
(a) we expect prices of phosphate rocks to trend upwards in the near-term based on past average
sale prices of our phosphate rocks. While we expect phosphate rock demand to trend upwards in
the near-term, short-term uctuations in demand can be expected as a result of changes in crop
or fertiliser prices, weather events, and/ or economic disruptions. We expect prices of fertilisers, a
main application of phosphates, to trend upwards due to an increasing demand for food from an
increasing world population and limitations in the amount of arable land for farming;
(b) we expect the prices of phosphate-based chemical products to remain steady due to competitive
pressures, the strengthening of RMB and measures by the PRC government to regulate the prices
of essential foodstuffs;
(c) we are in the development and expansion phases in respect of our operations and we expect our
costs of operations (including costs of electricity, labour and logistics) to materially increase in line
with the increased scale of our Mining Operations, and the commencement, and increase in scale
thereafter, of our Chemical Production Operations;
(d) we received subsidies and compensation from the PRC government in connection with the
Wenchuan Earthquake and the Relocation Exercise, which have already been signicantly
utilised prior to FY2013. Excluding such subsidies and compensation, we would have recorded
lower prots for FY2011 and losses for FY2012. We do not expect to receive any further material
government subsidies or compensation in relation to the Wenchuan Earthquake and the Facilities
Relocation;
(e) we have been stockpiling, while selectively selling some of our phosphate rocks in anticipation of
the commencement of our Chemical Production Operations. Although as at the Latest Practicable
Date, we have completed construction of our P
4
Plant and have commenced Trial Chemical
Production Operations, we do not expect any signicant revenue contribution from our Chemical
Production Operations until Commercial Chemical Production Operations have commenced; and
(f) a portion of our Invitation expenses will be treated as a charge in our nancial statements, and we
expect our expenses to increase due to, inter alia, compliance costs incurred as a listed company.
Please refer to the section entitled Use of Proceeds of this Offer Document for more details on
our listing expenses.
131
GENERAL INFORMATION ON OUR GROUP
In light of the reasons set out in paragraphs (c) to (f) above and taking into consideration our unaudited
results for FP2013, our nancial results may be less favourable in FY2013 as compared with FY2012,
and for FY2013, we may not be able to eliminate the losses already incurred in FP2013.
Please also refer to the CRU Industry Report set out in Appendix L to this Offer Document for more
information regarding the prospects of the phosphate industry. While we believe that the information and
data in the CRU Industry Report are reliable, we cannot ensure the accuracy of the information or data,
and neither our Group, the Vendors, the Sponsor and Underwriter, the Placement Agent or any of our or
their respective afliates or advisers have independently veried the information or data.
Save as discussed above and in the sections entitled Risk Factors and General Information on our
Group Business Strategies and Future Plans of this Offer Document, and barring any unforeseen
circumstances, our Directors are not aware of any signicant recent trends or any other known trends,
uncertainties, demands, commitments or events that are reasonably likely to have a material effect on our
Groups revenue, protability, liquidity or capital resources, or that would cause the nancial information
disclosed in this Offer Document to be not necessarily indicative of the future operating results or
nancial condition of our Group.
BUSINESS STRATEGIES AND FUTURE PLANS
Our business strategies and future plans for the growth and expansion of our business are further
described below. We intend to execute the business strategies and/ or implement the following future
plans over the next 18 months.
Further Mining Operations and exploration activities to increase phosphorite resources and
output
Further mining operations and exploration activities
We intend to carry out further mining operations and exploration activities, including:
(i) exploration work (such as geological mapping, rock sampling, drilling activities, excavating and
tunnelling, collection and analysis of exploration data and exploring and locating new deposits
within specied areas permitted under our exploration rights with a view to converting our
exploration rights into mining rights);
(ii) converting phosphorite resources classied as inferred resources to measured and indicated
resources; and
(iii) increasing measured and inferred resources within specied areas permitted under our exploration
rights.
Barring any unforeseen circumstances, we intend to engage a professional geological company
to survey the areas permitted under our exploration rights and determine the quantity of phosphorite
resources present in such areas. The survey results will assist us to facilitate the increase of our Groups
phosphorite resources and enable us to plan our Mining Operations and schedules to optimise efciency.
We expect to spend approximately S$1.4 million for this purpose by the end of FY2014.
We have located phosphate rock deposits in certain of our adits in the exploration areas, and are
currently carrying out exploration activities to verify the level of deposits and secure sufcient phosphate
rocks with a view to converting our exploration rights to mining rights. Barring any unforeseen
circumstances, and subject to compliance with all legal and regulatory requirements, we intend to apply
for the conversion of our relevant exploration rights to mining rights in FY2014. We intend to spend
approximately S$4.0 million to procure the conversion of our relevant exploration rights to mining rights.
We intend to fund the total estimated expenditure for the above-mentioned activities, of approximately
S$5.4 million, with the net proceeds from the issue of New Shares.
132
GENERAL INFORMATION ON OUR GROUP
We may also explore the possibility of securing additional exploration rights for areas close to our existing
exploration and mining rights.
Construction of adits
Currently, we have four (4) adits in our two (2) Mines which are producing phosphate rocks. We also have
three (3) adits in the exploration areas. Upon the successful conversion of our relevant exploration rights
to mining rights, we intend to increase the number of adits which are producing phosphate rocks to up to
12 adits. Barring any unforeseen circumstances and subject to compliance with all legal and regulatory
requirements, we intend to complete construction works for the adits by the end of FY2014.
The expenditure for the construction of up to ve (5) additional adits is currently estimated to be
approximately S$1.6 million. We have earmarked approximately S$0.9 million of the net proceeds from
the issue of New Shares for the construction of the above-mentioned adits in FY2013 and FY2014, and
we intend to fund the balance using a combination of internal funds and external nancing (if we deem
such nancing arrangements necessary or desirable).
Investment in mining-related infrastructure and equipment
Within the next 18 months, we plan to invest in mining-related infrastructure, haulage systems and related
equipment to improve productivity and safety standards at our Mines.
We intend to purchase haulage systems and related equipment for installation in new adits which we may
construct, and other related equipment to upgrade the haulage systems for our existing adits. We also
intend to procure and perform additional safety design, consultancy and modication works in our existing
adits.
On the assumption that construction works for new adits complete as we have planned by the end of
FY2014, the expenditure for the purchase and installation of haulage systems and related equipment,
and the performance of additional works and safety enhancements to our existing adits, is currently
estimated to be approximately S$2.0 million up to FY2014.
We also plan to improve access to our Mines and adits by maintaining and repairing the access
roads leading to these areas, and barring any unforeseen circumstances, we expect to complete such
improvements by the end of FY2014. The expenditure for such improvements is currently estimated to be
approximately S$0.2 million.
We intend to fund the total estimated expenditure for the above-mentioned activities, of approximately
S$2.2 million, with the net proceeds from the issue of New Shares. We intend to fund further expenditure
relating to the above-mentioned activities (if any) from our internal funds, and we may obtain external
nancing if we deem such nancing arrangements necessary or desirable.
Adopting a vertically-integrated strategy
Prior to the Wenchuan Earthquake, we adopted a vertically-integrated strategy with our Mines supplying
phosphate rocks for our Chemical Production Operations. Upon the completion of Phase 1 and Phase 2
of the Rebuilding Programme, we intend to continue adopting a vertically-integrated strategy.
Once implemented, our vertically-integrated business model will comprise our Mining Operations and
Chemical Production Operations. This will allow us to benet from operational synergies.
We believe that our vertically-integrated strategy will provide us with the following advantages:
Raw materials price and supply stability We will be able to control our processing costs as our
main raw material, phosphate rocks, will be supplied by our Mines. We are also able to cushion
to some extent our margins from the impact of uctuations in prices of our intermediate products,
such as phosphoric acid and P
4
,

which may be used as raw materials. In addition, our Mines
provide us with a more stable source of raw materials to our Chemical Production Operations.
133
GENERAL INFORMATION ON OUR GROUP
Raw materials quality assurance As we intend to use phosphate rocks from our Mines for our
Chemical Production Operations, we are able to control and are thereby assured of the quality of
raw materials used.
Sales and production exibility We will have the exibility of allocating our phosphate rocks
to either direct sales or to our Chemical Production Operations. Depending on our business
strategies, production schedules, existing orders, market prices of and demand for our phosphate
rocks and phosphate-based chemical products, we will have the exibility to produce and sell
our phosphate rocks and phosphate-based chemical products in accordance with current market
conditions to optimise prot margins and achieve our business strategies.
Rebuilding, enhancing and increasing the capacity of our Chemical Production Operations
Phase 1 of the Rebuilding Programme
Our Group has completed the construction of our P
4
Plant (which includes the construction of two (2)
furnaces) at the New Gongxing Site under Phase 1 of the Rebuilding Programme, and has commenced
trial production of P
4
in FY2013. As at the Latest Practicable Date, we have expended approximately
RMB121.4 million (approximately S$25.2 million based on the exchange rate as at the Latest Practicable
Date) on the construction of our New Gongxing Facilities.
We plan to build a ue gas storage facility to collect ue gas, which is a by-product generated from the
production of P
4
. The ue gas that is collected will be used to heat the furnaces to aid in the production of
STPP and SHMP. Barring any unforeseen circumstances, we intend to commence the building of the ue
gas storage facility in the fourth quarter of 2013, and complete such building works by the end of FY2014.
Such building works are currently estimated to cost S$1.4 million, all of which is expected to be expended
by FY2014.
Phase 2 of the Rebuilding Programme
Barring any unforeseen circumstances, and subject to meeting all regulatory and legal requirements, we
expect to receive the land use rights for Phase 2 of the Rebuilding Programme by the end of FY2014. We
intend to spend an additional S$0.6 million in payments towards securing such land use rights.
We intend to, barring any unforeseen circumstances and upon receipt of the land use rights for Phase 2
of the Rebuilding Programme, increase the scale of our Chemical Production Operations (commencing
in 2014) by enhancing our processing and manufacturing capabilities through the construction and
upgrading of processing facilities. Phase 2 of our Rebuilding Programme involves the following:
Facilities
Designed capacity
(tonnes per year)
Relocating and upgrading of one (1) food grade and non food grade STPP plant
(completed as at the Latest Practicable Date) 30,000
Construction of one (1) new thermal phosphoric acid plant 30,000
Construction of one (1) new food grade and non food grade SHMP plant 20,000
As part of the Rebuilding Programme, we intend to construct (i) ofces, dormitories and other operating
facilities (such as laboratories); and (ii) infrastructure for the factories (such as access roads), at the New
Gongxing Site.
As at the Latest Practicable Date, we have expended approximately RMB4.6 million (approximately S$0.9
million based on the exchange rate as at the Latest Practicable Date) on Phase 2 of our Rebuilding
Programme. For FY2013 and FY2014, we intend to spend approximately S$5.9 million for the
construction of the above-mentioned facilities, barring any unforeseen circumstances and assuming that
our expansion plans progress as intended.
134
GENERAL INFORMATION ON OUR GROUP
Please refer to the section entitled General Information of our Group Chemical Production Operations
of this Offer Document for further details of our processing facilities.
In aggregate, the estimated capital expenditure for the planned enhancement and increase in capacity of
our operations mentioned above is approximately S$7.9 million. We intend to fund such expenditure with
the net proceeds from the issue of New Shares.
Increasing our portfolio of phosphate-based chemical products
Prior to the Wenchuan Earthquake and the Relocation Exercise, we produced P
4
, thermal phosphoric
acid, SHMP and STPP, for sale to customers in the PRC and other countries. We also established an
ad hoc product development team headed by our Key Executive, Wang Xuebo, to expand our range of
phosphate-based chemical products.
Upon completion of the Rebuilding Programme, we intend to produce P
4
, thermal phosphoric acid, SHMP
and STPP, and further diversify our portfolio of phosphate-based chemical products by establishing an in-
house research and development team and/ or outsourcing such function to third parties to develop and
offer to our customers a wider range of phosphate-based chemical products.
Expanding through acquisitions, joint ventures and strategic alliances
We may expand through acquisitions, joint ventures and strategic alliances as part of our long-term
growth strategy. We may also enter into acquisitions, joint ventures or strategic alliances with parties
who create synergistic values with our existing business. Should such opportunities arise, we will seek
approvals, where necessary, from our Shareholders and the relevant authorities as may be required by
prevailing laws and regulations.
Save as disclosed in this Offer Document, none of the proceeds of the issue of New Shares will be
used, directly or indirectly, to acquire or renance the acquisition of an asset other than in the ordinary
course of business. Please refer to the section entitled Risk Factors of this Offer Document for further
discussion of the risks in relation to how our future growth will depend on our ability to manage our
expansion plans, and dilution as a result of raising additional funds through the issue of New Shares for
future growth.
ORDER BOOK
Our Group does not typically enter into any long-term supply contracts for the sale of phosphate rocks.
Therefore, as at the Latest Practicable Date, the order book is not material.
Due to the nature of our business, phosphate rocks and phosphate-based chemical products are subject
to uctuations in prices. In accordance with our risk management policy, we consider various factors,
including market conditions, before entering into contracts entailing delivery or completion of more than
three (3) months.
135
SELECTED COMBINED FINANCIAL INFORMATION
The following selected combined statements of comprehensive income and combined balance sheets of
our Group should be read in conjunction with the full text of this Offer Document, including the Audited
Combined Financial Statements for the nancial years ended 31 December 2010, 2011 and 2012 as
set out in Appendix A to this Offer Document, the Unaudited Interim Condensed Combined Financial
Statements for the three months period ended 31 March 2013 as set out in Appendix B to this Offer
Document, and the section entitled Managements Discussion and Analysis of Results of Operations and
Financial Position of this Offer Document.
Combined Statements of Comprehensive Income
(1)
Audited Unaudited
FY2010 FY2011 FY2012 FP2012 FP2013
$000 $000 $000 $000 $000
Revenue 2,775 4,522 4,897 1,004 1,310
Cost of sales (2,373) (2,148) (2,796) (648) (865)
Gross prot 402 2,374 2,101 356 445
Other income 981 2,535 3,538 1,361 8
Selling and distribution costs (426) (483) (227) (53) (87)
General and administrative costs (2,738) (1,484) (3,899) (489) (1,105)
Other operating income 627
Finance costs (52) (9) (4) (1) (10)
(Loss)/prot before tax (1,206) 2,933 1,509 1,174 (749)
Taxation 28 (284)
(Loss)/prot for the year/period attributable
to owners of the Company (1,178) 2,933 1,225 1,174 (749)
Other comprehensive (loss)/income
Foreign currency translation (101) 535 (918) (448) 365
Total comprehensive (loss)/income for the
year/period attributable to owners of the
Company (1,279) 3,468 307 726 (384)
(Loss)/earnings per share (cents)
Basic
(2)
(0.17) 0.42 0.17 0.17 (0.11)
Adjusted
(3)
(0.15) 0.37 0.15 0.15 (0.09)
Notes:
(1) For comparative purposes, the combined statements of comprehensive income of our Group for the Period Under Review
have been prepared on the basis that our Group has been in existence throughout the Period Under Review. Please refer to
note 2 of the Audited Combined Financial Statements for the nancial years ended 31 December 2010, 2011 and 2012 as
set out in Appendix A to this Offer Document and the Unaudited Interim Condensed Combined Financial Statements for the
three months period ended 31 March 2013 as set out in Appendix B to this Offer Document.
(2) For comparative purposes, the basic (loss)/earnings per share for the Period Under Review have been computed based on
the (loss)/prot for the year/period attributable to owners of the Company and our pre-Invitation share capital of 702,400,000
Shares (after the Share Split (as dened in the section entitled Restructuring Exercise of this Offer Document)).
(3) For comparative purposes, the adjusted (loss)/earnings per share for the Period Under Review have been computed
based on the (loss)/prot for the year/period attributable to owners of the Company and our post-Invitation share capital of
800,000,000 Shares (after the Share Split).
136
SELECTED COMBINED FINANCIAL INFORMATION
Combined Balance Sheet
(1)
Audited Unaudited
As at 31
December
2010
As at 31
December
2011
As at 31
December
2012
As at 31
March
2013
$000 $000 $000 $000
Non current assets
Mine properties 906 813 675 651
Land use rights 815 1,763 1,642 1,664
Property, plant and equipment 2,346 16,474 28,778 28,441
Prepayments 2,599 3,928 2,093 2,132
6,666 22,978 33,188 32,888
Current assets
Stocks 1,983 3,043 2,907 3,275
Trade receivables 183 198 137 462
Other receivables 165 380 1,750 1,766
Deferred expenses 308 343 380
Prepayments 291 313 492 487
Cash and bank balances 983 3,213 4,772 3,177
3,605 7,455 10,401 9,547
Total assets 10,271 30,433 43,589 42,435
Current liabilities
Trade payables 166 470 1,306 797
Other payables 4,548 8,036 10,172 7,795
Advances from customers 368 627 147 25
Amounts due to ultimate holding company 600 2,050 646
Interest-bearing bank loans 912 987
6,594 11,183 12,271 9,604
Net current liabilities (2,989) (3,728) (1,870) (57)
Non-current liabilities
Deferred tax liabilities 42 42 320 326
Deferred income 2,247 2,348 2,231 2,272
Provision for rehabilitation 54 58 158 162
2,343 2,448 2,709 2,760
Total liabilities 8,937 13,631 14,980 12,364
Net assets 1,334 16,802 28,609 30,071
Equity attributable to owners of the Company
Share capital 9,048 21,048 32,548 34,394
Reserves (7,714) (4,246) (3,939) (4,323)
Total equity 1,334 16,802 28,609 30,071
Net Asset Value per Share (cents)
(2)
0.19 2.39 4.07 4.28
Notes:
(1) For comparative purposes, the combined balance sheets of our Group for the Period Under Review have been prepared on
the basis that our Group has been in existence throughout the Period Under Review. Please refer to note 2 of the Audited
Combined Financial Statements for the nancial years ended 31 December 2010, 2011 and 2012 as set out in Appendix A
to this Offer Document and the Unaudited Interim Condensed Combined Financial Statements for the three months period
ended 31 March 2013 as set out in Appendix B to this Offer Document.
(2) For comparative purposes, the net asset value per share for the Period Under Review has been computed based on the net
asset value of our Group divided by our pre-Invitation share capital of 702,400,000 Shares (after the Share Split).
137
MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL POSITION
The following discussion of our business, results of operations and nancial position for the Period Under
Review should be read in conjunction with the full text of this Offer Document, including the section
entitled Selected Combined Financial Information of this Offer Document, the Audited Combined
Financial Statements for the nancial years ended 31 December 2010, 2011 and 2012 as set out in
Appendix A to this Offer Document, the Unaudited Interim Condensed Combined Financial Statements
for the three months period ended 31 March 2013 as set out in Appendix B to this Offer Document and
the Unaudited Pro Forma Combined Financial Information for the nancial year ended 31 December
2012 and the three months period ended 31 March 2013 as set out in Appendix C to this Offer
Document. This discussion contains forward-looking statements that involve risks and uncertainties. Our
actual results may differ signicantly from those projected in the forward-looking statements. Factors that
might cause our actual future results to differ signicantly from those projected in the forward-looking
statements include, but are not limited to, those discussed below and elsewhere in this Offer Document,
particularly, in the sections entitled Risk Factors and Cautionary Notes Regarding Forward-Looking
Statements of this Offer Document. Under no circumstances should inclusion of such forward-looking
statements herein be regarded as a representation, warranty or prediction with respect to the accuracy
of the underlying assumptions by us, the Vendors, the Sponsor and Underwriter, the Placement Agent
or any other person. Investors are cautioned not to place undue reliance on these forward-looking
statements that speak only as of the date hereof.
The gures in this section are approximate gures and where appropriate, have been rounded to the
nearest one (1) decimal place.
OVERVIEW
We are the rst mineral resources company to be listed on the SGX-ST which is solely focused on
exploring and mining phosphate in the PRC with the ability to manufacture and produce phosphate-based
chemical products.
We are currently headquartered in Singapore, and possess the rights to explore and mine phosphate
in Sichuan Province, the PRC. We have also completed the construction of our P
4
Plant at the New
Gongxing Site under Phase 1 of the Rebuilding Programme in preparation for the resumption of our
Chemical Production Operations.
Our Group is organised into business units based on their products and services as follows:
(a) upstream segment relates to our business of exploration, mining and sale of phosphate rocks (the
Upstream Segment); and
(b) downstream segment relates to our business of manufacturing, sale and trading of phosphate-
based chemical products such as P
4,
thermal phosphoric acid, STPP and SHMP; and the sale of
by-products produced as a result of such manufacturing process (the Downstream Segment).
Prior to the Wenchuan Earthquake, we were engaged in both Mining Operations and Chemical
Production Operations in a vertically-integrated production process. Therefore, our revenue was derived
from the sales of both phosphate rocks and phosphate-based chemical products which we produced.
Our Mining Operations were carried out at our Mines while our Chemical Production Operations were
carried out at our then production facilities located at the Previous Hanwang Facilities, both located in
Mianzhu City, Sichuan Province, the PRC.
Immediately after the Wenchuan Earthquake, there was no output from our Mines or our production
facilities. Resumption of operations of our Mines was further delayed by landslides which occurred in the
vicinity of our Mines in 2010. In FY2010, we commenced the recovery stage of our Mining Operations
at Mine 1 and obtained an initial output of approximately 4,200 tonnes of phosphate rocks. In FY2011,
our phosphate rocks output increased to approximately 30,200 tonnes and this further increased to
approximately 60,100 tonnes of phosphate rocks in FY2012. Our phosphate rocks output for FP2012 and
FP2013 was 2,000 tonnes and 16,600 tonnes respectively.
138
MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL POSITION
Although part of our production facilities at the Previous Hanwang Facilities was damaged by the
Wenchuan Earthquake, we were able to continue to record revenue in our Downstream Segment as
we sold existing quantities of SHMP and STPP to certain customers in fulllment of our contractual
arrangement with these customers as well as to maintain the business relationship of these customers.
We were able to do this despite the damage sustained by our P
4
and thermal phosphoric acid production
facilities as we had existing inventory of P
4
and thermal phosphoric acid and when these inventory stocks
were depleted, we were able to secure P
4
and thermal phosphoric acid from third party suppliers to
produce SHMP and STPP for sale.
After the Wenchuan Earthquake, the local PRC authorities decided to re-develop the land on which
the Previous Hanwang Facilities were located. Hence, such PRC authorities entered into an agreement
with Mianzhu Norwest in 2011, pursuant to which Mianzhu Norwest surrendered the land use rights,
relocated our STPP plant from the Previous Hanwang Facilities to the New Gongxing Facilities and
vacated the Previous Hanwang Facilities (the Facilities Relocation) and received a compensation of
RMB35 million, in stages, from the local PRC authorities. At the end of 2011, we successfully obtained
the land use rights for Phase 1 Land. The government grants and proceeds from the Facilities Relocation
have been signicantly utilised in the Period Under Review. From FY2013 onwards, we do not expect to
receive any signicant benet from such government grants and proceeds.
As the New Gongxing Facilities have yet to commence commercial operations and will be built to
different specications than the Previous Hanwang Facilities, our revenue, cost of sales and other costs
relating to the operation and maintenance of the New Gongxing Facilities will be different from that
of the Previous Hanwang Facilities. Accordingly, the revenue and costs associated with the Chemical
Production Operations and operating costs of the Previous Hanwang Facilities as included in the Period
Under Review cannot be taken as an indication of the revenue and costs associated with the Chemical
Production Operations at the New Gongxing Facilities or the operating costs of the New Gongxing
Facilities. For the purposes of discussion in this section entitled Managements Discussion and Analysis
of Results of Operations and Financial Position of this Offer Document, our Previous Hanwang Facilities
(which was operational prior to the Wenchuan Earthquake and partially operational after the Wenchuan
Earthquake until completion of the Facilities Relocation) and New Gongxing Facilities (where only Phase
1 has commenced trial production of P
4
in FY2013) are collectively referred to as our Facilities.
PRINCIPAL COMPONENTS OF OUR COMBINED INCOME STATEMENT
Revenue
Our revenue comprises both the Upstream Segment and the Downstream Segment. Revenue for the
Upstream Segment is derived from the sale of phosphate rocks to third party customers comprising
mainly fertiliser companies and manufacturers of downstream phosphate-based chemical products in
the PRC. Revenue for the Downstream Segment is derived mainly from the sale of phosphate-based
chemical products such as STPP and SHMP to third party customers comprising mainly manufacturers
of downstream phosphate-based chemical products as well as producers of fast moving consumer goods
in the PRC and worldwide. During the Period Under Review, we sold our phosphate-based chemical
products to countries such as New Zealand, the Philippines, the USA, Switzerland and Vietnam.
Revenue is recognised to the extent that it is probable that the economic benets will ow to our Group
and that the revenue can be reliably measured. Revenue is measured at the fair value of consideration
received or receivable, excluding discounts, rebates and sales taxes or duty. Revenue is not recognised
to the extent where there are signicant uncertainties regarding recovery of the consideration due,
associated costs or the possible return of goods.
Revenue from sale of goods is recognised upon the transfer of signicant risks and rewards of ownership
of the goods to the customer. Transfers of risks and rewards vary depending on the individual terms of
the sale contract. Transfers may occur when the goods are dispatched from the warehouses (mainly for
domestic sales) or upon loading the goods onto the relevant carrier (mainly for export sales).
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MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL POSITION
Our revenue from sale of phosphate rocks are derived from sales to only PRC-based customers.
Currently, we do not export phosphate rocks as we do not have the relevant license imposed by the PRC
government. While we collect cash upfront from most of our customers, we recognise revenue from the
sale of our phosphate rocks upon collection of the phosphate rocks by our customers. The sale price of
phosphate rocks are determined after taking into consideration, inter alia, the quality of the phosphate
rocks, prevailing market prices as well as prevailing market conditions and includes value-added tax.
Our phosphate-based chemical products are sold to customers in the PRC and overseas who are
normally granted credit terms of between 30 and 60 days. We typically recognise revenue from the sale
of phosphate-based chemical products (i) for PRC-based customers, when delivery of our phosphate-
based chemical products are acknowledged by our customers; and (ii) for overseas customers, when
our phosphate-based chemical products are loaded onto the ships and acknowledged by the shipping
company as export sales are mainly on free-on-board terms. The sale price of our phosphate-based
chemical products is based on negotiated commercial terms which will take into consideration our cost of
production, prevailing market conditions, size of the order, internal credit rating of the customer and past
track record of the customer and credit terms granted. The sale price of our phosphate-based chemical
products includes value-added tax and, where relevant, related transport costs.
Sales to our PRC-based customers are denominated in RMB while sales to our customers not based in
the PRC are denominated in USD.
The breakdown of our revenue by business segments for FY2010, FY2011, FY2012, FP2012 and
FP2013 is set out below:
Revenue FY2010 FY2011 FY2012 FP2012 FP2013
$000 % $000 % $000 % $000 % $000 %
Upstream Segment 357 12.9 1,496 33.1 3,700 75.6 607 60.5 969 74.0
Downstream Segment 2,418 87.1 3,026 66.9 1,197 24.4 397 39.5 341 26.0
2,775 100.0 4,522 100.0 4,897 100.0 1,004 100.0 1,310 100.0
The breakdown of our revenue by products for FY2010, FY2011, FY2012, FP2012 and FP2013 is set out
below:
Revenue FY2010 FY2011 FY2012 FP2012 FP2013
$000 % $000 % $000 % $000 % $000 %
Upstream Segment
Phosphate rocks 357 12.9 1,496 33.1 3,700 75.6 607 60.5 969 74.0
Downstream Segment
STPP 1,862 67.1 2,858 63.2 965 19.7 332 33.0 279 21.3
SHMP 538 19.4 168 3.7 232 4.7 65 6.5 62 4.7
Others
(1)
18 0.6
2,775 100.0 4,522 100.0 4,897 100.0 1,004 100.0 1,310 100.0
Note:
(1) Consists of by-products produced as a result of the production of P
4
, namely ferrophosphate.
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MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL POSITION
The breakdown of our revenue based on the geographical location of our customers for FY2010, FY2011,
FY2012, FP2012 and FP2013 is set out below:
Revenue FY2010 FY2011 FY2012 FP2012 FP2013
$000 % $000 % $000 % $000 % $000 %
PRC 1,257 45.3 2,447 54.1 4,373 89.3 883 87.9 1,191 90.9
New Zealand 112 4.0 172 3.8 305 6.2 61 6.1 31 2.4
Philippines 83 3.0 270 6.0 139 2.8 56 5.6
United States of America 778 28.0 743 16.4
Switzerland 271 9.8 141 3.1
Vietnam 192 6.9 252 5.6
United Arab Emirates 26 1.0 438 9.7 35 0.7
Spain 28 0.6 67 5.1
Others
(1)
56 2.0 31 0.7 45 1.0 4 0.4 21 1.6
2,775 100.0 4,522 100.0 4,897 100.0 1,004 100.0 1,310 100.0
Note:
(1) Includes countries such as Canada, India, South Korea and Pakistan.
FACTORS AFFECTING REVENUE
Our Groups operations have historically been inuenced by the following key factors, which our
management believes will continue to affect our Groups results of operations in the future:
(a) Changes in selling prices of our Groups products
The factors that affect the selling price of our Groups products are as follows:
(i) Economic conditions
The demand and prices of our phosphate rocks and phosphate-based chemical products
were adversely affected by the global nancial crisis which occurred in 2008. Any occurrence
of similar situations in the future or other economic situations which can affect phosphate
prices in general or phosphate rocks and/ or phosphate-based chemical products in
particular will similarly affect our Group.
(ii) Prices of fertilisers
Our Group believes that a signicant portion of the worlds phosphate rock output is used in
the production of fertilisers. Hence the prices of fertilisers play a key role in determining the
prices of phosphate rocks in the Upstream Segment. Prices of fertilisers are in turn affected
by other factors such as, but not limited to, agriculture commodity prices, cyclical trends in
end-consumer market, governmental policies relating to the sale of fertilisers and/ or the
agriculture industry and weather conditions.
Prices for fertilisers have a signicant impact on our Groups revenue as well as our Groups
protability, which generally tends to increase when prices for fertilisers increase. When
prices of fertiliser increase (hence causing phosphate rock prices to increase), the costs
of most of the associated raw materials also tend to rise and vice versa. Since changes
in prices of our phosphate-based chemical products do not correlate exactly in the same
period, our Groups prot margin may vary from period to period due to this lag effect.
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MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL POSITION
(iii) Competition
The sale price and protability of our Groups phosphate-based chemical products are
affected by competition from other phosphate-based chemical products producers. As
phosphate-based chemical products are generally homogeneous, producers may resort to
reducing prices to increase sales and/ or gain market share. The prices and demand for our
Groups phosphate-based chemical products are also affected by the market supply of these
products, which in turn is largely dependent on the number of producers, their production
capacities, factory utilisation rates and operating margins.
(iv) Foreign exchange rates
The percentage of our Groups sales to customers not based in the PRC decreased from
54.7% in FY2010 to 45.9% in FY2011 and further decreased to 10.7% in FY2012. For
FP2013, our Groups sales to customers not based in the PRC further reduced to 9.1%. Our
Groups selling prices for our phosphate-based chemical products to customers not based
in the PRC are denominated in USD. Therefore, our Groups protability will be affected
by the total sales to customers not based in the PRC and the then-prevailing conversion
rates between USD and RMB. The RMB against USD exchange rate had decreased from
RMB6.59:USD1.00 as at 31 December 2010 to RMB6.30:USD1.00 as at 30 December 2011
to RMB6.23:USD1.00 as at 31 December 2012. As at 29 March 2013, the RMB against USD
exchange rate has decreased further to RMB6.21:USD1.00.
In addition, as our nancial statements are presented in S$, we will also record translation
gains or losses from the conversion of our revenue denominated in RMB into our
presentation currency of S$.
(b) Changes in sale volumes of our Groups principal products
The factors that affect the sale volume of our Groups products are as follows:
(i) Sales mix
The mix of revenue derived from the Upstream Segment and the Downstream Segment
affects our Groups revenue and protability as our Upstream Segment usually generates a
higher gross prot margin compared to the Downstream Segment. In FY2010, our Groups
revenue was mainly contributed by the Downstream Segment as our Group only resumed
our Mining Operations in November 2010. The resumption of Mining Operations contributed
to the increase in revenue contribution from the Upstream Segment from 33.1% in FY2011
to 75.6% in FY2012. For FP2013, revenue contributed from the Upstream Segment stood at
74.0% compared to 60.5% for FP2012.
(ii) Production capacity
Our revenue is based on the amount of phosphate rocks obtained and phosphate-based
chemical products produced and sold within each nancial period and on the prices we
receive for the sale of such phosphate rocks or phosphate-based chemical products. The
volume of phosphate rocks we obtain is dependent on our ability to mine, subject to the
mining limit under the mining rights. Our production volume of our phosphate-based
chemical products depended on our Facilities production capacity.
(iii) Market conditions
Depending on the prevailing market price for phosphate rocks and phosphate-based
chemical products, our Group may choose to sell more phosphate rocks or channel more of
its phosphate rocks to its Chemical Production Operations. Our management monitors the
global phosphate market, especially the PRC phosphate market to determine whether to sell
the phosphate rocks or channel the phosphate rocks to its Chemical Production Operations.
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MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL POSITION
(iv) Government policies
The sale of phosphate rocks is subject to strict PRC government regulations. Currently, we
do not export phosphate rocks as we do not have the relevant license required by the PRC
laws, rules and regulations.
Furthermore, in the past years, certain countries have imposed bans and/ or limits on the
use of phosphate-based chemicals in detergents. Certain countries are also considering
whether to extend bans and/ or limits to encompass industrial and institutional use of
detergents and whether to further reduce phosphate levels in soap for dishwashers. If such a
limit were to be imposed, the demand for phosphate-based chemical products may decrease.
Any similar policies introduced by the PRC and/ or other foreign governments in the future
may have a negative impact on our Groups operations and affect the protability of our
Group.
(v) Ability to retain existing customers and secure new customers
The demand for our phosphate rocks and phosphate-based chemical products is determined
by the quality and price competitiveness of our products and our level of service quality. As
phosphate rocks and phosphate-based chemical products are generally homogeneous, our
customers may purchase the same product from our competitors.
COST OF SALES
The breakdown of our cost of sales for FY2010, FY2011, FY2012, FP2012 and FP2013 is set out below:
Cost of Sales FY2010 FY2011 FY2012 FP2012 FP2013
$000 % $000 % $000 % $000 % $000 %
Changes in stock level 990 41.7 (922) (42.9) (16) (0.5) 223 34.4 (312) (36.1)
Co-operation partners
costs 101 4.3 391 18.1 657 23.5 34 5.2 95 11.0
Transportation costs 39 1.6 304 14.2 616 22.0 21 3.2 164 19.0
Materials and overheads 1,117 47.0 1,735 80.8 177 6.3 257 39.7 285 32.9
Direct labour 87 3.7 468 21.8 630 22.5 31 4.8 340 39.3
Government taxes and
fees 2 0.1 77 3.6 439 15.7 10 1.5 170 19.7
Depreciation and
amortisation 42 1.8 127 5.9 131 4.7 27 4.2 31 3.6
Others
(1)
(5) (0.2) (32) (1.5) 162 5.8 45 7.0 92 10.6
Total 2,373 100.0 2,148 100.0 2,796 100.0 648 100.0 865 100.0
Note:
(1) Includes mainly maintenance costs and safety production costs.
Changes in stock level
Changes in stock level comprise the changes in the value of our inventory.
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MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL POSITION
Co-operation partners costs
Co-operation partners costs comprise the share of prot which our co-operation partner is entitled upon
the sale of phosphate rocks from certain adits arising from the Dashan Arrangement. Please refer to the
section entitled General Information on our Group Mining Operations Co-operation arrangements
of this Offer Document for more details on this arrangement. The number of operating adits which were
included under the Dashan Arrangement in FY2010, FY2011 and FY2012 was one (1), one (1) and two
(2) adits respectively. For FP2013, the number of operating adits which were included under the Dashan
Agreement was two (2) adits compared to one (1) adit for FP2012.
Transportation costs
Transportation costs relate to expenses incurred in the transportation of the phosphate rocks from our
Mines to our Facilities. This is done through local transportation contractors engaged by our Group.
Materials and overheads
Materials and overheads comprise mainly costs of phosphate rocks, P
4
and thermal phosphoric acid
purchased from third parties to supplement our production and natural gas and electricity used in the
Chemical Production Operations.
Phosphate rocks, P
4
, thermal phosphoric acid
Where possible, we use phosphate rocks from our Mines as raw materials to produce P
4
, which is either
sold or used in the production of thermal phosphoric acid, which is in turn either sold or used in the
production of other phosphate-based chemical products such as STPP and SHMP.
In the event that we are not able to obtain phosphate rocks from our Mines or when our inventory of
phosphate rocks are depleted, we will purchase phosphate rocks from third party suppliers for use as raw
materials in the production of P
4
. Similarly, when our production of P
4
and/ or thermal phosphoric acid is
affected or when our inventory of P
4
and/ or thermal phosphoric acid is depleted, we will purchase our
supplies from third party suppliers. For example, immediately after the Wenchuan Earthquake, although
we were not able to obtain phosphate rocks from our Mines, as our Previous Hanwang Facilities had
the production facilities to produce P
4
, thermal phosphoric acid and other phosphate-based chemical
products, we purchased phosphate rocks, P
4
and thermal phosphoric acid from third parties to produce
STPP and SHMP.
However, in FY2012 and FP2013, our Group did not produce any P
4
as our P
4
plant at the New Gongxing
Site was still under construction.
Our Group was not reliant on any third party phosphate rocks, P
4
or thermal phosphoric acid suppliers
in the Period Under Review. Our Group had resumed our Mining Operations in FY2010, and once
construction of the new P
4
and thermal phosphoric acid plant are completed at the New Gongxing
Facilities, our Group will commence to manufacture our own P
4
and thermal phosphoric acid using our
own phosphate rocks.
Natural gas and electricity
Our Group purchases natural gas from local suppliers and electricity from the national grid for heating
and other production purposes of SHMP and STPP.
Direct labour
Our direct labour costs comprise salaries, social insurance contributions and other employee-related
expenses of miners, workers and employees involved in our Groups Mining Operations and Chemical
Production Operations.
For the Period Under Review, we engaged third parties to provide local workers with relevant mining
experience for our Mining Operations during the periods when the Mines are in operation. This enabled
us to control labour costs and prevented us from incurring excessive salaries and wages especially
during months where there were little and/ or no Mining Operations.
144
MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL POSITION
Government taxes and fees
Government taxes and fees comprise resource tax, price adjustment fund and resource compensation
fee.
According to the (Interim Regulations of PRC on Resource Tax)
promulgated on 25 December 1993, effective as of 1 January 1994 and amended on 30 September
2011, any enterprise engaged in the exploitation of mineral products within the PRC is required to pay
a resource tax. Resource tax for phosphate rock is computed at RMB15 per tonne of phosphate rock
extracted.
Under the (Administrative Measures of Mianzhu
on the Collection and Use of Price Adjustment Fund of Phosphate Rocks of Mianzhu (for trial
implementation)), promulgated on 15 June 2012, enterprises and individuals who engage in phosphate
rock mining in Mianzhu shall pay the (price adjustment fund) at RMB30 per tonne of
phosphate rocks obtained.
According to the (Provisions on the Administration of the Collection
of Mineral Resources Compensation Fees) promulgated on 27 February 1994, effective as of 1 April
1994 and amended on 3 July 1997, mineral resources compensation fees shall be paid by the holder
of the mining right. The compensation fee is calculated using a pre-determined formula based on the
compensation fee rate (currently two per cent. (2%) for phosphorus), revenue derived from sale of the
minerals and the extract recovery rate.
Depreciation and amortisation
Our mining and exploration rights are amortised over the unexpired period of the rights on a straight-line
basis.
Equipment used in mining and exploration is depreciated over its useful life on a straight-line basis.
Depreciation for waste removal costs relating to our Mining Operations and plant and equipment relating
to our Chemical Production Operations is computed using the unit of production method.
Expenditures incurred to conduct drilling, geological and related exploration and evaluation studies
are capitalised. When technical feasibility and commercial viability of obtaining mineral resources are
demonstrable, such costs will be amortised over the unexpired period of the rights on a straight-line basis.
Others
Others comprise safety production costs for our Mines and Facilities, maintenance costs for roads,
equipment and machinery and other miscellaneous costs.
FACTORS AFFECTING OUR COSTS OF SALES
Our Groups cost of sales has historically been inuenced by the following key factors, which we believe
will continue to affect our Groups cost of sales in the future:
(a) Mining related costs
The main costs incurred in our Mining Operations include direct labour costs, transportation costs
and co-operation partners cost. The increase in any of such costs will lead to higher mining costs
for our Group. Our mining related costs are also affected by the composition of mining output from
prot-sharing and non prot-sharing adits.
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MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL POSITION
(b) Market prices of raw materials
We require phosphate rocks for production of P
4
and thermal phosphoric acid for production of
SHMP and STPP. In the event that we are not able to obtain phosphate rocks from our Mines and/
or produce our own P
4
or thermal phosphoric acid, we will purchase these raw materials from third
parties. Phosphate rocks, P
4
and thermal phosphoric acid purchased from third parties may be of
inferior quality or higher costs, leading to an increase in our cost of production.
Market prices of other raw materials such as alkali, coke, soda ash, silica which our Group does
not produce, are largely affected by the market demand and supply and governmental policies in
the PRC.
(c) Government taxes and fees
In addition to the resource tax of RMB15 per tonne of phosphate rocks obtained, our Group
was required to pay the price adjustment fund and resource compensation fee of RMB30 and
RMB6 per tonne (calculated using a pre-determined formula based on the compensation fee
rate (currently two per cent. (2%) for phosphorus)) of phosphate rocks obtained, respectively.
An increase in any of such government taxes and fees will result in an increase in our cost of
production.
Other income
Other income comprise interest income from deposits, receipt of insurance claims, receipt of PRC
government subsidies, gain arising from the Facilities Relocation (the Facilities Relocation Gain), gain
on disposal of property, plant and equipment, reversal of accrued expenses which are no longer required
and sale of scrap materials.
Selling and distribution costs
Selling and distribution costs comprise promotion and advertising expenses, transportation expenses
incurred for the delivery of our nished goods to customers (such as truck, rail, sea and freight costs),
export related costs (including export duties and export insurance), storage fees and salaries and social
insurance contributions of employees who are involved in the selling and distribution activities of our
Group.
General and administrative costs
General and administrative costs comprise mainly of the following:
(a) depreciation of property, plant and machinery other than those used in the Mining Operations and
the Chemical Production Operations;
(b) salaries and social contributions of employees not involved in the Mining Operations and the
Chemical Production Operations;
(c) directors fees and remuneration;
(d) professional fees which include audit fees, legal services fees and professional fees for geological
consultations and assessments, as well as professional fees for listing preparation;
(e) insurance expenses;
(f) repair and maintenance, upkeep of property, plant and equipment and public maintenance
expenses; and
(g) other general ofce and administrative expenses, including ofce rental, transport costs, travelling
costs and entertainment expenses.
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MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL POSITION
Other operating income
Other operating income relates to reversal of impairment loss on property, plant and equipment.
Finance costs
Finance costs comprise mainly interest and other costs incurred for bank borrowings.
It also includes interest on unwinding of provision for rehabilitation. Our Group records the present value
of estimated costs required to restore mining locations upon closure of the Mines (such as reclamation
and replanting works) and this obligation generally arises when assets are installed or work commences
at the mining locations. The present value of the provision for restoring the mining locations is capitalised
and the discounted liability is increased for the change in present value. The periodic unwinding of the
discount is recognised as nance costs.
Taxation
Taxation includes current tax expense and deferred tax expense. Current tax is expected tax payable on
the chargeable income. Deferred tax is a result of temporary differences between carrying amounts of
assets and liabilities for nancial accounting purposes and tax purposes. Deferred tax also includes the
recognition of unused tax losses and tax credits.
For the Period Under Review, the tax rate was 25% and 17% for PRC and Singapore companies
respectively. As our Group had accumulated tax losses for the Period Under Review, we did not pay any
corporate income tax for the Period Under Review.
REVIEW OF PAST OPERATING RESULTS
Revenue FY2010 FY2011 FY2012 FP2012 FP2013
$000 % $000 % $000 % $000 % $000 %
Upstream Segment 357 12.9 1,496 33.1 3,700 75.6 607 60.5 969 74.0
Downstream Segment 2,418 87.1 3,026 66.9 1,197 24.4 397 39.5 341 26.0
2,775 100.0 4,522 100.0 4,897 100.0 1,004 100.0 1,310 100.0
Cost of Sales FY2010 FY2011 FY2012 FP2012 FP2013
$000 % $000 % $000 % $000 % $000 %
Upstream Segment 258 10.9 558 26.0 1,948 69.7 364 56.2 589 68.1
Downstream Segment 2,115 89.1 1,590 74.0 848 30.3 284 43.8 276 31.9
2,373 100.0 2,148 100.0 2,796 100.0 648 100.0 865 100.0
Gross Prot FY2010 FY2011 FY2012 FP2012 FP2013
$000 % $000 % $000 % $000 % $000 %
Upstream Segment 99 24.6 938 39.5 1,752 83.4 243 68.3 380 85.4
Downstream Segment 303 75.4 1,436 60.5 349 16.6 113 31.7 65 14.6
402 100.0 2,374 100.0 2,101 100.0 356 100.0 445 100.0
FY2010 FY2011 FY2012 FP2012 FP2013
Gross Prot Margin % % % % %
Upstream Segment 27.7 62.7 47.4 40.0 39.2
Downstream Segment 12.5 47.5 29.2 28.5 19.1
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MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL POSITION
FY2010 vs FY2011
Revenue
Our Groups revenue increased by $1.7 million or 63.0% from $2.8 million in FY2010 to $4.5 million in
FY2011 with both segments contributed to this increase in revenue.
The increase in revenue from the Upstream Segment of $1.1 million or 319.0%, from $0.4 million in
FY2010 to $1.5 million in FY2011 was due mainly to an increase in the quantities of phosphate rocks
sold, which increased from approximately 4,600 tonnes in FY2010 to approximately 20,100 tonnes in
FY2011. We resumed our Mining Operations in FY2010 and as our Group increased Mining Operations
in FY2011, there were more phosphate rocks available for sale to third parties. Our average selling price
of the phosphate rocks was approximately RMB384 (or equivalent to $77 based on the exchange rate of
RMB4.975:S$1.00) per tonne and approximately RMB385 (or equivalent to $75 based on the exchange
rate of RMB5.163: S$1.00) per tonne in FY2010 and FY2011 respectively.
The increase in revenue from the Downstream Segment of $0.6 million or 25.1% from $2.4 million in
FY2010 to $3.0 million in FY2011 was contributed mainly by an increase in revenue derived from the
sale of STPP of $1.0 million which was partially offset by a reduction in revenue derived from the sale of
SHMP of $0.4 million in FY2011.
The increase in revenue derived from sale of STPP by $1.0 million or 53.5% from $1.9 million in FY2010
to $2.9 million in FY2011, was due mainly to the increase in orders from existing customers which
increased from approximately 1,300 tonnes in FY2010 to approximately 2,000 tonnes in FY2011, coupled
with an increase in the average selling price from approximately RMB6,878 (or equivalent to $1,382
based on the exchange rate of RMB4.975:S$1.00) per tonne in FY2010 to approximately RMB7,480 (or
equivalent to $1,449 based on the exchange rate of RMB5.163:S$1.00) per tonne in FY2011.
The decrease in revenue derived from sale of SHMP by $0.4 million or 68.8% from $0.5 million in
FY2010 to $0.2 million in FY2011 was due mainly to a reduction in the quantity sold. Our Group sold
approximately 400 tonnes of SHMP in FY2010 compared to approximately 100 tonnes in FY2011 due
mainly to loss of certain customers. The reduction in quantity sold was however mitigated by an increase
in average selling price from approximately RMB6,753 (or equivalent to $1,357 based on the exchange
rate of RMB4.975:S$1.00) per tonne in FY2010 to approximately RMB8,779 (or equivalent to $1,701
based on the exchange rate RMB5.163:S$1.00) per tonne in FY2011.
The increase in revenue from the PRC by $1.2 million or 94.7%, from $1.3 million in FY2010 to $2.4
million in FY2011 was largely due to the increase in revenue derived from sale of phosphate rocks of
$1.1 million as our phosphate rocks can only be sold in the PRC. The increase in revenue derived from
sales to the Philippines of $0.2 million or 225.3% from $0.1 million in FY2010 to $0.3 million in FY2011
was a result of an increase in sales to a customer based in the Philippines. The reduction of revenue
derived from sale to Switzerland of $0.1 million or 48.0% from $0.3 million in FY2010 to $0.1 million in
FY2011 was due to the loss of a customer from Switzerland.
Cost of Sales
Our Groups cost of sales reduced by $0.2 million or 9.5%, from $2.4 million in FY2010 to $2.1 million in
FY2011, due mainly to a stock take gain of $1.0 million. The stock take gain arose as Mianzhu Norwest
prepared for the relocation of STPP plant to New Gongxing Facilities and was able to remove all residual
STPP powder which had attached to the walls of the warehouse silos that had accumulated over the
years and had been included as part of the manufacturing costs in previous periods (the Relocation
Stock Take Gain). The value of the residual STPP powder recovered and gain from our routine stock
take for phosphate rocks was recognised as stock take gain in cost of goods sold in FY2011. In FY2010,
the stock take gain was $0.04 million.
The increase in co-operation partners cost, transportation costs and direct labour by $0.3 million, $0.3
million and $0.4 million respectively in FY2011 was in line with the increase in the quantity of phosphate
rocks obtained from our Mines in FY2011.
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MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL POSITION
The increase in cost of materials and overheads by approximately $0.6 million was in line with the
increase in sale of STPP.
Gross prot margin
The increase in gross prot margin from 14.5% in FY2010 to 52.5% in FY2011 was due mainly to a
change in sales mix in FY2011. Our Group sold more phosphate rocks which generally have higher gross
prot margins compared to phosphate-based chemical products in FY2011. Revenue derived from the
sale of phosphate rocks increased from 12.9% of total revenue in FY2010 to 33.1% of the total revenue
in FY2011. In addition, the Downstream Segment also contributed to the increase in gross prot margin
as a result of the increase in average selling prices of the phosphate-based chemical products in FY2011.
The improvement in gross prot margin was also due to the recognition of stock take gain in FY2011.
Gross profit margin from our Upstream Segment increased from 27.7% in FY2010 to 62.7% in
FY2011 due mainly to the recognition of stock take gain in FY2011. Without taking into account the
stock take gain, gross prot margin for our Upstream Segment in FY2011 would have been 37.8%.
This improvement in gross prot margin was due mainly to lower cost of production arising from better
efciency and economies of scale as we increased our Mining Operations in FY2011.
Gross prot margin from our Downstream Segment increased from 12.5% in FY2010 to 47.5% in
FY2011. Without taking into account of the stock take gain, gross margin for our Downstream Segment in
FY2011 was 27.0%. This improvement in gross prot margin was due mainly to the increase in average
selling prices of our phosphate-based chemical products in FY2011.
Other income
The increase in other income of $1.6 million or 158.4% from $1.0 million in FY2010 to approximately $2.5
million in FY2011 was due mainly to:
(i) recognition of gain on receipt of Facilities Relocation Gain of $1.9 million in FY2011. In FY2011,
our Group received the rst portion of the relocation income of approximately $3.3 million, wrote
off the cost of land use rights of our Previous Hanwang Facilities of $0.8 million, incurred relocation
expenses of $0.6 million and recognised the resultant gain of $1.9 million;
(ii) increase in reversal of accrued expenses which were no longer required of $0.1 million; and
(iii) increase in gain in disposal of property, plant and equipment of $0.1 million,
which was partially offset by the absence of any insurance claims in FY2011 (compared to the insurance
claims of $0.4 million in FY2010).
Selling and distribution costs
The increase in selling and distribution costs of $0.1 million or 13.4% from $0.4 million in FY2010 to $0.5
million in FY2011 was due mainly to the increase in transportation costs of $0.1 million arising from the
increase in quantity of STPP sold in FY2011.
General and administrative costs
The decrease in general and administrative costs of $1.3 million or 45.8% from $2.7 million in FY2010 to
$1.5 million in FY2011 was due mainly to:
(i) the decrease in professional fees of $0.6 million. In FY2010, our Group incurred professional fees
for valuation, technical and geologist reports prepared for the purposes of its fund raising exercise;
(ii) the write-back of bad debts previously written off of $0.3 million. In FY2011, our management
renegotiated for the partial repayment of long outstanding advances to certain mining contractors;
and
149
MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL POSITION
(iii) reduction in operating costs such as travelling and entertainment costs and repairs and
maintenance costs by $0.1 million and $0.1 million respectively as our Group was able to contain
such expenses in FY2011,
which was partially offset by an increase in salaries and related costs by $0.1 million arising from salary
adjustments and the recruitment of two (2) senior management personnel in FY2011.
Other operating income
In FY2010, after considering the general rising trend in metal prices, our Group reassessed the
recoverable amount of certain plant and machinery that were previously impaired with reference to
the fair values less costs to sell based on publicly available information on metal prices. As a result,
impairment loss previously recognised of $0.6 million was written back.
Finance costs
Finance costs reduced by $0.04 million or 82.7% from $0.05 million in FY2010 to $0.01 million in FY2011
due to the repayment of all outstanding interest-bearing bank loans in FY2011.
Taxation
In FY2010, our Group recognised a taxation benet of $0.03 million arising from the reversal of taxable
temporary differences.
No taxation was paid by our Group in FY2011 as we beneted from previously unrecognised tax losses.
FY2011 vs FY2012
Revenue
Revenue increased by $0.4 million or 8.3% from $4.5 million in FY2011 to $4.9 million in FY2012.
The increase in revenue derived from our Upstream Segment of $2.2 million or 147.3% from $1.5
million in FY2011 to $3.7 million in FY2012 was due to an increase in the quantity of phosphate rocks
sold which increased from approximately 20,100 tonnes in FY2011 to approximately 42,100 tonnes in
FY2012. As our Group further increased our Mining Operations in FY2012, there were more phosphate
rocks available for sale to third parties in the PRC. Furthermore, as we were no longer operating in our
Previous Hanwang Facilities and our New Gongxing Facilities were not ready for production, we did not
require any phosphate rocks for our Downstream Segment. The increase in average selling price of the
phosphate rocks in FY2012 which rose from approximately RMB385 (or equivalent to $75 based on the
exchange rate of RMB5.163:S$1.00) per tonne in FY2011 to approximately RMB445 (or equivalent to $88
based on the exchange rate of RMB5.058:S$1.00) per tonne in FY2012 also contributed to the increase
in revenue derived from our Upstream Segment.
The above increase in revenue derived from our Upstream Segment was offset by a reduction in revenue
derived from our Downstream Segment of $1.8 million or 60.4% from $3.0 million in FY2011 to $1.2
million in FY2012. The reduction in revenue derived from our Downstream Segment was due to reduction
in revenue derived from the sale of STPP by $1.9 million or 66.2% from $2.9 million in FY2011 to $1.0
million in FY2012.
The above reduction in revenue derived from sale of STPP was due to a decrease in the quantity
sold, from approximately 2,000 tonnes in FY2011 to approximately 600 tonnes in FY2012. As our New
Gongxing Facilities were not ready for production in FY2012, we have limited quantities of balance
inventory of STPP for sale. As such, we were more selective in our customer base in FY2012, hence
leading to reduction in quantity sold. The reduction in quantity sold was mitigated by an increase in
average selling price of STPP from approximately RMB7,480 (or equivalent to $1,449 based on the
exchange rate of RMB5.163:S$1.00) per tonne in FY2011 to approximately RMB8,011 (or equivalent to
$1,584 based on the exchange rate of RMB5.058:S$1.00) per tonne in FY2012.
150
MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL POSITION
Revenue derived from sale of SHMP remained around $0.2 million in FY2011 and FY2012, as the
quantity of SHMP sold remained approximately 100 tonnes. This was partially offset by a decrease in
the average selling price of SHMP from approximately RMB8,779 (or equivalent to $1,701 based on the
exchange rate of RMB5.163:S$1.00) per tonne in FY2011 to approximately RMB8,535 (or equivalent to
$1,687 based on the exchange rate of RMB5.058:S$1.00) per tonne in FY2012.
We recorded an increase in revenue derived from the PRC of $1.9 million or 78.7%, from $2.4 million in
FY2011 to $4.4 million in FY2012 due mainly to the increase in revenue derived from sale of phosphate
rocks which can only be sold within the PRC of $2.2 million, offset by a reduction in revenue derived from
sale of STPP in the PRC of $0.5 million in FY2012 due to the aforementioned reasons. The decline in
sale derived from the Philippines and the absence of any sale to United States of America, Switzerland
and Vietnam was due to the limited quantities of phosphate-based chemical products sold outside of the
PRC. The increase in sales to New Zealand was due to increase in phosphate-based chemical products
sold to a customer.
Cost of goods sold
Cost of goods sold increased by $0.6 million or 30.2% from $2.1 million in FY2011 to $2.8 million in
FY2012 due mainly to the increase in quantities of phosphate rocks obtained and sold from our Mines
which resulted in:
( a) a corresponding increase in co-operation partners costs of $0.3 million, transportation costs of
$0.3 million, direct labour of $0.2 million; and
( b) an increase in government taxes and fees of $0.4 million. In addition to resource tax and resource
compensation fees incurred, new government fees such as the price adjustment fund at RMB30
per tonne of phosphate rocks obtained from our Mines also led to the increase in government
taxes and fees;
which was partially offset by:
(i) the reduction in materials and overheads costs of $1.6 million as our New Gongxing Facilities were
not ready for production; and
(ii) decline in change in stock level of $0.9 million arising from the absence of the Relocation Stock
Take Gain in FY2012.
Gross prot margin
Gross prot margin from our Upstream Segment declined from 62.7% in FY2011 to 47.4% in FY2012
and gross prot margin from our Downstream Segment declined from 47.5% in FY2011 to 29.2%
in FY2012 resulting in an overall decline in our gross prot margin from 52.5% in FY2011 to 42.9% in
FY2012. This decline in gross prot margin was due to the absence of the Relocation Stock Take Gain
in FY2011. Without taking into account this recognition of Relocation Stock Take Gain, the gross prot
margin for our Upstream Segment would have recorded an increase from 37.8% in FY2011 to 47.4%
in FY2012 while the gross prot margin for our Downstream Segment would have recorded an increase
from 27.0% in FY2011 to 29.2% in FY2012.
The increase in the gross profit margin for our Upstream Segment (without taking into account
recognition of stock count gain) was due to the increase in average selling price and quantities of
phosphate rocks sold in FY2012.
The increase in the gross prot margin for our Downstream Segment (without taking into account
recognition of stock count gain) was due mainly to the increase in average selling prices of STPP in
FY2012.
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MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL POSITION
Other income
Increase in other income of $1.0 million or 39.6% from $2.5 million in FY2011 to $3.5 million in
FY2012 was due mainly to the increase in recognition of gain on receipt of Facilities Relocation Gain
of $1.6 million, from $1.9 million in FY2011 to $3.5 million in FY2012, partially offset by the absence
of any reversal of accrued expenses in FY2012 and sale of scrap materials in FY2012. In FY2011, we
recognised reversal of accrued expenses of $0.4 million and sale of scrap materials of $0.1 million.
In FY2012, our Group received the second portion of the Facilities Relocation Gain and after deducting
relocation costs of $0.05 million, recognised a gain of $3.5 million.
Selling and distribution costs
Selling and distribution costs reduced by $0.3 million or 53.0% from $0.5 million in FY2011 to $0.2 million
in FY2012. The reduction in selling and distribution costs was due mainly to reduction in transportation
costs of $0.2 million arising from the lower quantities of phosphate-based chemical products sold in
FY2012.
General and administrative costs
General and administrative costs increased by $2.4 million or 162.7% from $1.5 million in FY2011 to $3.9
million in FY2012 due mainly to:
(i) increase in foreign exchange loss of $0.2 million. Mianzhu Norwest had foreign currency exposure
arising from the SGD shareholders loan granted by Norwest Chemicals. These foreign currency
gains or losses are not eliminated at our Groups level;
(ii) professional fees incurred in the preparation work for the Invitation of approximately $1.8 million.
There were no such professional fees in FY2011; and
(iii) lower amount of write-back of bad debts previously written off. The write-back of bad debts
previously written off was $0.3 million in FY2011. There was no write back of bad debts in FY2012.
Finance Cost
In FY2012, our Group had no interest-bearing loans. The nance cost incurred in FY2012 was due to the
interest on unwinding of provision for rehabilitation.
Taxation
In FY2012, our Group recorded deferred taxation of $0.3 million being the temporary differences between
carrying amounts of assets and liabilities for nancial accounting and tax purposes, after adjusting for
benets from previously unrecognised tax losses. Our Groups effective tax rate was 18.8%.
FP2012 vs FP2013
Revenue
Revenue increased by $0.3 million or 30.5% from $1.0 million in FP2012 to $1.3 million in FP2013.
The revenue derived from our Upstream Segment increased by $0.4 million or 59.6% from $0.6 million
in FP2012 to $1.0 million in FP2013 due to an increase in the quantity of phosphate rocks sold which
increased from approximately 7,000 tonnes in FP2012 to approximately 12,200 tonnes in FP2013. As our
Group further increased our mining activities in FP2013, there were more phosphate rocks available for
sale to third parties in the PRC. However, with the P
4
plant expected to commence production in FY2013,
our Group selected better quality phosphate rocks to be kept as inventory for subsequent use in its P
4

production and sold the lower quality phosphate rocks which generally fetch lower prices. Therefore, the
increase in quantities sold was offset by the reduction in average selling price of the phosphate rocks in
FP2013 which reduced from approximately RMB431 (or equivalent to S$86 based on the exchange rate
of RMB5.000:S$1.00) per tonne in FP2012 to approximately RMB405 (or equivalent to $80 based on the
exchange rate of RMB5.081:S$1.00) per tonne in FP2013.
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MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL POSITION
Revenue derived from our Downstream Segment marginally declined by $0.1 million or 14.1%, from
$0.4 million in FP2012 to $0.3 million in FP2013 mainly due to a similar decline in revenue derived from
sale of STPP. Despite selling approximately 200 tonnes of STPP in both FP2012 and FP2013, there
was a reduction in average selling price for STPP from RMB8,203 (or equivalent to $1,641 based on
the exchange rate of RMB5.000:S$1.00) in FP2012 to RMB7,666 (or equivalent to $1,509 based on the
exchange rate of RMB5.081:S$1.00) in FP2013.
Revenue derived from sale of SHMP remained at $0.1 million in FP2012 and FP2013, as the marginal
decline in quantity of SHMP sold was offset by the marginal increase in the average selling price from
RMB7,794 (or equivalent to $1,559 based on the exchange rate of RMB5.000:S$1.00) in FP2012 to
RMB8,724 (or equivalent to $1,717 based on the exchange rate of RMB5.081:S$1.00) in FP2013.
We recorded an increase in revenue derived from the PRC of $0.3 million or 34.9%, from $0.9 million in
FP2012 to $1.2 million in FP2013 due mainly to the increase in revenue derived from sale of phosphate
rocks which can only be sold within the PRC. In FP2013, we did not sell to any customers in the
Phillippines but managed to sell to a customer in Spain.
Cost of goods sold
Cost of goods sold increased by $0.2 million or 33.5% from $0.6 million in FP2012 to $0.9 million in
FP2013 due mainly to:
(i) increase in quantities of phosphate rocks extracted and sold from our Mines which resulted in a
corresponding increase in co-operation partners costs of $0.1 million, direct labour of $0.3 million
and transportation costs of $0.1 million; and
(ii) introduction of the price adjustment fund effective from July 2012 which led to the increase in
government taxes and fees of $0.2 million,
which was partially offset by decrease in changes in stock level of $0.5 million.
Our Groups mining activities resumed in March 2013 and it was able to mine more phosphate rocks in
March 2013 compared to March 2012. Furthermore, our Group had adopted the strategy to keep better
quality phosphate rocks as inventory for subsequent use in its P
4
production and only sold the lower
quality phosphate rocks. This resulted in our Group recording a decrease in changes in stock level.
Gross prot margin
Gross prot margin from our Upstream Segment marginally declined from 40.0% in FP2012 to 39.2% in
FP2013 and gross prot margin from our Downstream Segment declined from 28.5% in FP2012 to 19.1%
in FP2013 resulting in an overall decline in our gross prot margin from 35.5% in FP2012 to 34.0% in
FP2013.
The marginal decline in the gross prot margin for both our Upstream Segment and Downstream
Segment was due mainly to the decrease in the average selling prices of phosphate rocks and STPP
in FP2013 as compared to FP2012. In addition we incurred higher labour costs in FP2013 for our STPP
sales due to the manual selection process for certain batches of STPP which resulted in the increase in
average cost of sales for STPP sold in FP2013.
Other income
The decrease in other income of $1.4 million or 99.4% from $1.4 million in FP2012 to $0.01 million in
FP2013 was due mainly to the absence of the Facilities Relocation Gain of $1.3 million in FP2013.
Selling and distribution costs
Selling and distribution costs marginally increased by $0.03 million or 64.2% from $0.05 million in FP2012
to $0.09 million in FP2013 due mainly to the increase in transportation related costs.
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MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL POSITION
General and administrative costs
General and administrative costs increased by $0.6 million or 126.0% from $0.5 million in FP2012 to $1.1
million in FP2013 due mainly to:
(i) professional fees incurred in the preparation work for the Invitation of approximately $0.4 million.
There were no such professional fees in FP2012; and
(ii) increase in salaries and directors remuneration by $0.1 million arising from the terms of the
Service Agreements coming into effect.
Finance Cost
The increase in nance cost was mainly due to interest incurred on a bank loan in FP2013. In FP2012,
our Group had no interest-bearing loans.
The nance cost in FP2012 and FP2013 also included interest on unwinding of provision for rehabilitation
of $0.01 million incurred in each of the nancial periods.
Taxation
In FP2012 and FP2013, our Group had no taxable income and did not make provision for income tax.
REVIEW OF PAST FINANCIAL POSITION OF OUR GROUP
A review of our nancial position based on the combined balance sheets of our Group is set out below:
Non-current assets
As at 31 December 2012
Non-current assets stood at $33.2 million and accounted for 76.1% of total assets. Non-current assets
comprise mine properties, land use rights, property plant and equipment and prepayments.
Mine properties comprise mining rights and evaluation and exploration expenditures and amounted to
$0.7 million or 2.0% of total non-current assets. Land use rights refer to our 50-year leasehold land in
Phase 1 of the New Gongxing Site which amounted to $1.6 million or 4.9% of total non-current assets.
Property, plant and equipment comprise (i) leasehold buildings at our Mines and our Facilities and
improvements thereto; (ii) plant and machinery at our Mines and Facilities; (iii) motor vehicles and ofce
equipment; (iv) mining infrastructure and (iv) construction-in-progress, and amounted to $28.8 million or
86.7% of total non-current assets. Prepayments arises from the initial payment for our land use right in
respect of Phase 2 of the New Gongxing Site and the Hanwang Land and certain property, plant and
equipment which amounted to $2.1 million or 6.3% of total non-current assets.
As at 31 March 2013
Non-current assets reduced by $0.3 million or 0.9% from $33.2 million as at 31 December 2012 to $32.9
million as at 31 March 2013 due mainly to depreciation of property, plant and equipment and amortisation
of mine properties.
Current assets
As at 31 December 2012
Total current assets stood at $10.4 million and accounted for 23.9% of total assets. Total current assets
comprise:
(i) our phosphate rocks and packaging materials, raw materials and nished products in respect of
our phosphate-based chemical products, which accounted for $2.9 million or 27.9% of total current
assets;
(ii) trade receivables which amounted to $0.1 million or 1.3% of total current assets;
154
MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL POSITION
(iii) other receivables amounted to $1.8 million or 16.8% of total current assets and comprise (a)
refundable deposits; (b) amount due from a director-related company; and (c) amount from the
recognition of certain batches of STPP produced as part of the testing process of the STPP plant;
(iv) deferred expenses which amounted to $0.3 million or 3.3% of total current assets being portion of
the incremental costs (such as professional fees) that are directly attributable to the issuance of
new shares arising from the Invitation;
(v) prepayments which amounted to $0.5 million or 4.7% of total current assets and comprise
advances to suppliers and other prepayments; and
(vi) cash and bank balances which amounted to $4.8 million or 45.9% of total current assets and
includes pledged deposits of $0.2 million for our Mining Operations. The xed deposits were
pledged with a bank in compliance with the notice jointly issued by the Mianzhu Finance Bureau,
the Mianzhu Safety Bureau and Bank of China Limited, Mianzhu Branch in relation to the operation
of our Mines.
As at 31 March 2013
Current assets reduced by $0.9 million or 8.2% from $10.4 million as at 31 December 2012 to $9.5
million as at 31 March 2013. This was due mainly to the reduction in cash and bank balances of $1.6
million utilised to fund our Groups working capital requirements. The reduction was partially mitigated by
increase in:
(i) stocks of $0.4 million due to our Groups strategy to keep better quality phosphate rocks as
inventory for subsequent use in its P
4
production; and
(ii) trade receivables of $0.3 million due to outstanding receivables from customers and promissory
note from a customer due to mature in June 2013.
Non-current liabilities
As at 31 December 2012
Total non-current liabilities of $2.7 million accounted for 18.1% of total liabilities and comprise deferred
tax liabilities, deferred income and provision for rehabilitation of $0.3 million, $2.2 million and $0.2 million
respectively.
Deferred tax liabilities arise from temporary differences between carrying amounts of assets and
liabilities for nancial accounting purposes and tax purposes after recognising benets from previously
unrecognised tax losses.
Deferred income represents government grants received in FY2010 for construction of the P
4
plant at the
New Gongxing Facilities. Deferred income will be recognised as other income over the expected useful
life of the P
4
plant when construction of the plant is completed and capable of operating in the manner
intended by our Group. As at 31 December 2012, the P
4
plant was not commercially operational.
Provision for rehabilitation represents the present value of estimated costs required to restore mining
locations upon closure of the Mines.
As at 31 March 2013
Non-current liabilities marginally increased by $0.05 million from $2.7 million as at 31 December 2012 to
$2.8 million as at 31 March 2013.
155
MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL POSITION
Current liabilities
As at 31 December 2012
Current liabilities stood at $12.3 million and accounted for 81.9% of total liabilities. Current liabitities
comprise:
(i) trade payables of $1.3 million or 10.6% of total current liabilities;
(ii) other payables of $10.2 million or 82.9% of total current liabilities consisting of amounts payable for
taxes other than income tax, payroll and welfare payable, property plant and equipment, deposits
received, accrued liabilities and incidental costs in relation to the Facilities Relocation;
(iii) advances from customers of $0.1 million or 1.2% of total current liabilities; and
(iv) amounts due to ultimate holding company of $0.6 million representing 5.3% of total current
liabilities being advances made for working capital purposes and our Rebuilding Programme.
As at 31 March 2013
Current liabilities reduced by $2.7 million or 21.7% from $12.3 million as at 31 December 2012 to $9.6
million as at 31 March 2013 due mainly to the reduction in:
(i) trade payables of $0.5 million due to repayments made by our Group;
(ii) other payables of $2.4 million due mainly to repayments made by our Group for its property, plant
and equipment which was partially offset by the increase in deposits received from contractors
engaged for our Mining Operations and increase in government taxes and fees arising from the
introduction of the price adjustment fund effective from July 2012;
(iii) advances from customers of $0.1 million; and
(iv) amounts due to ultimate holding company of $0.6 million as the amount was capitalised in FP2013,
partially set off by a new interest-bearing bank loan of $1.0 million obtained from a PRC bank in FP2013.
Equity attributable to owners of the Company
As at 31 December 2012
Equity attributable to owners of the Company amounted to $28.6 million and comprise share capital,
foreign currency translation reserve and accumulated losses of approximately $32.5 million, $1.1 million
and $5.0 million respectively.
Foreign currency translation reserve represents the difference arising from translation of the nancial
statements of our PRC based subsidiary whose functional currency of RMB is different from that of our
Groups presentation currency, being S$.
In accordance with the Notice regarding safety production expenditure jointly issued by the Ministry of
Finance and the State Administration of Work Safety of the PRC in February 2012, the PRC subsidiary
is required to make appropriation to a safety fund surplus reserve based on the volume of mineral rocks
obtained. The reserve is utilised upon incurrence of specic safety production expense. In FY2012, we
transferred $46,000 to the safety fund surplus reserve and utilised the same amount in the same nancial
year.
156
MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL POSITION
As at 31 March 2013
Equity attributable to owners of the Company increased by $1.5 million or 5.1% from $28.6 million as at
31 December 2012 to $30.1 million as at 31 March 2013. This was mainly due to the increase in share
capital arising from the capitalisation of amounts due to ultimate holding company of $0.6 million and
issue of new shares for cash consideration of $1.2 million, which was partially offset by the decrease
in reserves of $0.4 million. The decrease in reserves was due to the increase in accumulated losses of
$0.7 million which was partially offset by increase in foreign currency translation reserve of $0.4 million.
LIQUIDITY AND CAPITAL RESOURCES
For the Period Under Review, our growth and operations were primarily nanced through a combination
of shareholders equity and loans, cash ow generated from operating activities, short-term bank
borrowings, government grants, compensation obtained from the local PRC authorities for, inter alia, the
Relocation Exercise, and assets and other forms of investments by Dashan, one (1) of our third party
co-operation partners. As at 31 December 2012, we had no bank borrowings and our cash and cash
equivalents was $4.6 million. As at 31 March 2013, our bank borrowings amounted to $1.0 million and our
cash and cash equivalents was $3.0 million.
Please refer to the section entitled Capitalisation and Indebtedness - Borrowings of this Offer Document
for further information on our banking facilities.
For the Period Under Review, our principal uses of cash have been for working capital requirements and
nancing of our capital expenditure.
We recorded negative working capital position of $3.0 million, $3.7 million, $1.9 million and $0.06
million as at 31 December 2010, 2011, 2012 and 31 March 2013 respectively, due mainly to the capital
expenditure incurred mainly in respect of the construction of P
4
plant and the outstanding shareholders
loan taken to part nance the cost of the Rebuilding Programme.
To the best of our Directors knowledge, we are not in breach of any of the terms and conditions or
covenants associated with any credit arrangement or bank facilities which could materially affect our
nancial position and results of business operations or the investment by our owners.
The following table sets forth a summary of our Groups audited combined statements of cash ow for
FY2010, FY2011 and FY2012 and unaudited combined statement of cash ow for FP2013. The summary
combined statements of cash ow should be read in conjunction with the full text of this Offer Document,
including the section entitled Selected Combined Financial Information of this Offer Document and
Appendix A and Appendix B entitled the Audited Combined Financial Statements for the nancial years
ended 31 December 2010, 2011 and 2012 and Unaudited Interim Condensed Combined Financial
Statements for the three months period ended 31 March 2013 to this Offer Document respectively.
Audited Audited Audited Unaudited
FY2010 FY2011 FY2012 FP2013
($000)
Net cash ows generated from/(used in) operating activities 828 (207) (1,591) (1,549)
Net cash ows used in investing activities (3,859) (9,664) (5,757) (1,758)
Net cash ows generated from nancing activities 3,050 12,303 8,815 1,888
Net increase/(decrease) in cash and cash equivalents 19 2,432 1,467 (1,419)
Cash and cash equivalents at beginning of the year/ period 839 824 3,047 4,613
Effect of exchange rate changes on cash and cash equivalents (34) (209) 99 (179)
Cash and cash equivalents at end of year/period 824 3,047 4,613 3,015
For the purpose of cash ow statement, cash and cash equivalents comprise:
Cash and bank balances 983 3,213 4,772 3,177
Less pledged xed deposits (159) (166) (159) (162)
Cash and cash equivalents 824 3,047 4,613 3,015
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MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL POSITION
The xed deposits were pledged with a bank in compliance with the notice jointly issued by the Mianzhu
Finance Bureau, the Mianzhu Safety Bureau and Bank of China Limited, Mianzhu Branch in relation to
the operation of our Mines.
FY2010
In FY2010, our Group recorded net cash ows generated from operating activities of $0.8 million which
was mainly a result of working capital inows of $2.4 million, offset by operating loss before working
capital changes of $1.6 million. Working capital inows were due mainly to decrease in stocks of $1.0
million arising from the selling down of phosphate-based chemical products and decrease in receivables
of $1.4 million arising from a reduction in advances paid to suppliers as well as increase in payables of
$0.1 million.
Our Group recorded net cash ow used in investing activities of $3.9 million due mainly to payments
made for purchase of property, plant and equipment which amounted to $1.2 million and payments made
in advance for land use rights at our New Gongxing Facilities and property, plant and equipment which
amounted to $2.3 million and $0.4 million respectively.
We recorded net cash ows generated from nancing activities of $3.1 million due mainly to net proceeds
from bank loans, receipt of government grant for construction of certain plant and equipment and
additional shareholders loan from ultimate holding company of approximately $0.4 million, $2.3 million
and $0.3 million respectively.
At 31 December 2010, the cash and cash equivalents excluding pledged xed deposits was $0.8 million.
FY2011
In FY2011, our Group recorded net cash ows used in operating activities of $0.2 million, despite
recording an operating prot before working capital changes of $1.3 million, mainly a result of working
capital outows of $1.5 million. Working capital outows were due to increase in stocks and receivables of
$0.9 million and $0.4 million respectively as well as decrease in payables of $0.1 million.
The increase in stock was due to our Groups increase in Mining Operations in FY2011 after we resumed
our Mining Operations in late FY2010. At 31 December 2011, we had accumulated stocks as our Mining
Operations would temporarily cease in the winter season and our Group was relocating from the Previous
Hanwang Facilities to the New Gongxing Facilities. The increase in receivables was due mainly to a
deposit of $0.3 million paid to a natural gas supplier to supply natural gas to our Facilities. These were
partly nanced by the proceeds of the issuance of new shares in Norwest Chemicals.
Our Group recorded net cash ows used in investing activities of $9.7 million due to payments made
for purchase of property, plant and equipment amounting to $10.3 million, payments made in advance
for land use rights at Gongxing Town and certain property, plant and equipment of $1.0 million and $1.8
million respectively and payments of $0.1 million made for incidental costs in relation to the relocation
of our STPP plant from the Previous Hanwang Facilities to the New Gongxing Facilities. This was offset
by proceeds received from disposal of property, plant and equipment and Facilities Relocation Gain of
approximately $0.3 million and $3.3 million respectively.
We recorded net cash ows generated from nancing activities of $12.3 million due mainly to proceeds
from issue of new shares in Norwest Chemicals of $12.0 million and shareholders loan received from
ultimate holding company of $1.5 million. This was offset by the repayment of bank loans and payments
incurred in relation to the Invitation of $0.9 million and $0.2 million respectively.
At 31 December 2011, the cash and cash equivalents excluding pledged xed deposits was $3.0 million.
158
MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL POSITION
FY2012
In FY2012, our Group recorded net cash ows used in operating activities of $1.6 million despite
achieving an operating prot before working capital changes of $0.3 million due mainly to increase in
working capital outow of $1.9 million. The working capital outows were due mainly to the decrease in
payables of $1.5 million and increase in receivables of $0.3 million.
The decrease in payables was due to repayments by our Group during the nancial year while the
increase in receivables was due mainly to increase in advances to suppliers and other prepayments. This
was partly nanced through loans and capital injections from Eastcomm.
Our Group recorded net cash ows used in investing activities of $5.8 million due mainly to payments
made for purchase of property, plant and equipment totalling $8.2 million and payment of $0.5 million
made for incidental costs in relation to the relocation of our STPP plant from the Previous Hanwang
Facilities to the New Gongxing Facilities. Our Group also made advance payment for land use rights for
the Hanwang Land of $0.5 million. The cash ows used in investing activities was offset by proceeds from
receipt of the second portion of Facilities Relocation Gain of $3.5 million.
We recorded net cash ows generated from nancing activities of $8.8 million due mainly to proceeds
received from the issuance of new shares of $11.5 million which was offset by partial repayment of loan
from ultimate holding company and payment of expenses incurred in relation to the Invitation of $1.4
million and $1.3 million respectively.
At 31 December 2012, the cash and cash equivalents excluding pledged xed deposits was $4.6 million.
FP2013
In FP2013, our Group recorded net cash ows used in operating activities of $1.5 million due mainly to
operating loss before working capital changes of $0.2 million and the increase in working capital outows
of $1.4 million. The increase in working capital outows was due to:
(i) increase in stocks of $0.3 million due to our Groups strategy to keep better quality phosphate
rocks as inventory for subsequent use in its P
4
production;
(ii) increase in receivables of $0.2 million due to increase in trade receivables; and
(iii) decrease in payables of $0.9 million arising from repayments made.
Our Group recorded net cash ows used in investing activities of $1.8 million due to payments made for
the purchase of property, plant and equipment mainly for the Rebuilding Programme.
We recorded net cash ows generated from nancing activities of $1.9 million due mainly to proceeds
from bank loan and issuance of new shares in Norwest Chemicals of $1.0 million and $1.2 million
respectively which was partially offset by payment of expenses incurred in relation to the Invitation of $0.3
million.
At 31 March 2013, the cash and cash equivalents excluding pledged xed deposits was $3.0 million.
CAPITAL EXPENDITURES, DIVESTMENTS AND COMMITMENTS
Our capital expenditure was incurred in the PRC mainly for the construction of the New Gongxing
Facilities and the restoration of adits at our Mines. The purchases or construction of such assets were
nanced mainly by issuance of shares, shareholders loans from ultimate holding company, PRC
authorities investment subsidy, proceeds from the Facilities Relocation Gain and to a lesser extent cash
ow generated from operations.
159
MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL POSITION
During the Period Under Review, our capital expenditure and divestments were as follows:
Audited
FY2010
Audited
FY2011
Audited
FY2012
Unaudited
FP2013
1 April 2013
to the Latest
Practicable
Date
$000 $000 $000 $000 $000
Capital expenditure
Leasehold buildings 843 202 223
Plant and machinery 245 493 261 70 159
Motor vehicles and ofce equipment 26 365 77 1 2
Mining infrastructure 55 492 91 572
Construction in progress 584 12,617 12,616 793 1,249
Land use rights 1,674
Mine properties 30
Total 1,753 15,351 13,699 955 1,982
Divestments
(1)
/Impairment/
(Write-back of impairment)
Leasehold buildings 42
Plant and machinery (633) 41
Motor vehicles and ofce equipment 1
Construction in progress 105
Land use rights 801
Total (633) 989 1
Note:
(1) Divestments are computed based on net book value.
In FY2010, after considering the general rising trend in metal prices, our Group reassessed the
recoverable amount of certain plant and machinery that were previously impaired with reference to the
fair value less costs to sell based on publicly available information on metal prices. As a result, an amount
of impairment loss previously recognised of $0.6 million was written back.
Save as disclosed above and in the sections entitled General Information on our Group Business
Overview, General Information on our Group Prospects and Trend Information, General Information
on our Group Business Strategies and Future Plans and Capitalisation and Indebtedness of this Offer
Document, we do not have other outstanding material commitments on capital expenditures, divestments
and commitments as at the Latest Practicable Date.
FOREIGN EXCHANGE MANAGEMENT
Our key operations are in Singapore and the PRC. Our revenue is primarily denominated in RMB and
USD. Our Group has exposure to foreign exchange risk as a result of transactions denominated in a
currency other than the respective functional currencies of our Groups entities.
160
MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL POSITION
ACCOUNTING TREATMENT OF FOREIGN CURRENCIES
Our Groups combined nancial statements are presented in S$ which is also our Companys functional
currency.
Transactions in foreign currencies are measured in the respective functional currencies of our Company
and its subsidiaries and are recorded on initial recognition in the functional currencies at the exchange
rates approximating those ruling at the transaction dates. Monetary assets and liabilities denominated in
foreign currencies are translated at exchange rate ruling at the balance sheet date. Non-monetary items
that are measured in terms of historical cost in a foreign currency are translated using the exchange rates
as at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency
are translated using the exchange rates at the date when the fair value was determined.
Exchange differences arising on the settlement of monetary items or on translating monetary items at
the balance sheet date are recognised in income statement except for exchange difference arising on
monetary items that form part of our Groups net investment in foreign operations, which are recognised
initially in other comprehensive income and accumulated under foreign currency translation reserve in
equity. The foreign currency translation reserve is reclassied from equity to income statement of our
Group on disposal on the foreign operation.
For consolidation purposes, the assets and liabilities of foreign operations are translated into S$ at
the rate of exchange ruling at the balance sheet date and their statement of comprehensive income
are translated at the average exchange rates for the year/ period. The exchange differences arising on
translation are taken directly to other comprehensive income. On disposal of a foreign operation, the
component of other comprehensive income relating to the foreign operation is recognised in income
statement.
Foreign currency exposure
Our Group has transactional currency exposures arising from sales or purchases that are denominated
in currencies other than the respective functional currencies of our Groups entities, primarily, S$ and
RMB. For FY2010, FY2011, FY2012, FP2012 and FP2013, approximately 54.7%, 45.9%, 10.7%, 12.1%
and 9.1% respectively of our Groups sales were denominated in USD whilst almost 100% of costs were
denominated in the respective functional currencies of our Groups entities for FY2010, FY2011, FY2012,
FP2012 and FP2013.
Our Group does not consider that it has any signicant exposure to the risk of uctuation in the exchange
rate between RMB against USD, as a possible change of 5% in RMB against USD would have no
signicant nancial impact to our Groups nancial performance for the Period Under Review.
Our Groups exposure to the risk of changes in foreign exchange rates relates primarily to cash and bank
balances and S$ denominated loan due from our PRC subsidiary.
Our Group is also exposed to currency translation risk arising from our PRC subsidiary whose functional
currency of RMB is different from that of our Groups presentation currency, being S$. Our Groups net
investment in the PRC is not hedged as currency positions in RMB are considered to be long-term in
nature. Such translation gains/losses are of unrealised nature and do not impact current year prots
unless the underlying assets or liabilities of the subsidiary are disposed.
The RMB is not freely convertible. There is a risk that the Chinese government may take actions affecting
exchange rates which may have an adverse effect on our Groups net assets, earnings and any dividend
if such dividend is to be exchanged or converted into foreign exchange.
161
MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL POSITION
Currently our Group does not have a formal hedging policy and does not enter into any hedging
transactions to manage the potential uctuation in foreign currency as the risk is monitored on an ongoing
basis. Our Group will continue to monitor its foreign exchange exposure in the future and will consider
hedging any material foreign exchange exposure should the need arise. Prior to implementing any
formal hedging policies, we will seek the approval of our Board on the policy and put in place adequate
procedures which shall be reviewed and approved by our Audit Committee. Thereafter, all hedging
transactions entered into by our Group will be in accordance with the set policies and procedures.
Signicant Accounting Policy Changes
The accounting policies have been consistently applied by our Group during the Period Under Review
and includes the adoption of new and revised standards and interpretations of Singapore Financial
Reporting Standards, which did not have any material effect on the nancial performance or position of
our Group and the Company.
Unaudited Pro Forma Combined Financial Statements for FY2012 and FP2013
The unaudited pro forma combined balance sheets as at 31 December 2012 and 31 March 2013 took
into account the following:
(i) issue of new shares to Eastcomm arising from the capitalisation of debt amounting to $0.6 million
and cash injection amounting to $1.2 million which resulted in an increase in share capital and a
reduction in amounts due to ultimate holding company;
(ii) Mianzhu Norwest obtaining a bank loan of RMB5.0 million (or equivalent to $1.0 million based on
the exchange rate of RMB5.066:S$1.00) from a bank in the PRC which resulted in an increase in
interest bearing bank loan and cash and bank balances; and
(iii) the issue of new shares arising from the Restructuring Exercise which resulted in a decrease in
share capital and an increase in reserves.
These constitute the major differences between the audited combined balance sheet as at 31 December
2012 and the unaudited interim condensed combined balance sheet as at 31 March 2013 in comparison
with the unaudited pro forma combined balance sheets as at 31 December 2012 and 31 March 2013
respectively. Please refer to the Unaudited Pro Forma Combined Financial Information for the nancial
year ended 31 December 2012 and the three months period ended 31 March 2013 as set out in
Appendix C to this Offer Document for the pro forma adjustments to the combined balance sheets as at
31 December 2012 and 31 March 2013 resulting from the above.
The unaudited pro forma combined statement of cash ows for the nancial year/ period ended 31
December 2012 and 31 March 2013 took into account (i) and (ii) above. These constitute the major
differences between the audited combined statement of cash ow for the nancial year ended 31
December 2012 and the unaudited interim condensed combined statement of cash ow for the nancial
period ended 31 March 2013 in comparison with the unaudited pro forma combined statements of cash
ows for the nancial year/ period ended 31 December 2012 and 31 March 2013 respectively. Please
refer to the Unaudited Pro Forma Combined Financial Information for the nancial year ended 31
December 2012 and the three months period ended 31 March 2013 as set out in Appendix C to this
Offer Document for the pro forma adjustments to the combined statements of cash ow for the nancial
year ended 31 December 2012 and for the three months period ended 31 March 2013 resulting from (i)
and (ii) above.
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163
MANAGEMENT AND CORPORATE GOVERNANCE
DIRECTORS
Our Board of Directors is entrusted with the responsibility for the overall management of our Company.
Our Executive Directors work closely with our Key Executives in managing the various business
segments of our Group to ensure that our business operates smoothly and efciently.
The names, addresses and occupations of each of our Directors are set out below:

Name Age Address Principal occupation
Hong Pian Tee 68 50 Leedon Road
Singapore 267860
Chairman and Director of Pei Hwa
Foundation Limited
Dr. Ong Hian Eng
(1)
65 33 Mount Sinai Rise
#23-09
The Marbella
Singapore 276954
CEO and Executive Director of our
Group
Simon Ong
(1) (2)
48 20 Jalan Hajijah
#04-18
Laguna Green
Singapore 468726
Executive Director and Head of HR and
General Administration of our Group
Raymond Ong
(1) (2)
45 A22-03 Pavilion Residence 1
No 77 Jalan Raja Chulan
50200 Kuala Lumpur
Wilayah Persekutuan
Malaysia
Chief Financial Ofcer of Great Eastern
Life Assurance (Malaysia) Berhad
Ong Bee Pheng
(1) (2)
37 137 Sunset Way
#06-10 Clementi Park
Singapore 597159
Compliance Officer in the Singapore
ofce of Barclays Bank PLC
Francis Lee 47 57A Shelford Road
Singapore 286656
Director of Wise Alliance Investments
Ltd
Goh Yeow Tin 62 208A Rangoon Road
Hong Building
Singapore 218453
Non-Executive Chairman of Seacare
Medical Holdings Pte. Ltd.
Notes:
(1) Our CEO and Executive Director, Dr. Ong Hian Eng is the father of our Non-Executive Director, Ong Bee Pheng. He is also
the uncle of our Directors, Simon Ong and Raymond Ong.
(2) Our Directors, Simon Ong and Raymond Ong, are siblings. They are also cousins of our Non-Executive Director, Ong Bee
Pheng and nephews of our CEO and Executive Director, Dr. Ong Hian Eng.
(3) Save as disclosed in this section and in the section entitled Share Capital and Shareholders - Shareholders of this Offer
Document, there is no family relationship between any of our Directors and/ or Key Executives, or between any of our
Directors, Key Executives and Substantial Shareholders.
The business and working experience of our Directors is summarised below:
HONG PIAN TEE is our Non-Executive Chaiman and Independent Director. Prior to retiring from
professional practice, he was the managing director of PricewaterhouseCoopers Intrust Limited, a
position he held from 1985 to 1999.
Hong Pian Tee started his career as an audit assistant in Peat Marwick Mitchell & Co in 1973 after
attaining the Singapore-Cambridge General Certicate of Education (Ordinary Level) Examination Pass
in 1964. He was promoted to the senior manager of KPMG Peat Marwick in 1978. He started Lee King &
Associates (Management Consultants) and PricewaterhouseCoopers Intrust Limited in 1984 and 1985,
respectively, specialising in corporate advisory, nancial reconstruction and corporate insolvency. He
164
MANAGEMENT AND CORPORATE GOVERNANCE
was an independent director of Asia Food & Properties Limited (now known as Sinarmas Land Limited),
a company listed on the Mainboard of the SGX-ST, from 2001 to 2006, and was the chairman and
independent director of Sin Ghee Huat Corporation Ltd., a company listed on the Mainboard of the SGX-
ST, from 2007 to 2009. He is currently the chairman of Pei Hwa Foundation Limited, a position he has
held since 2000, and is an independent director of Golden Agri-Resources Ltd, Memstar Technology Ltd.
and XMH Holdings Ltd., all of which are companies listed on the Mainboard of the SGX-ST.
DR. ONG HIAN ENG is our CEO and Executive Director. His responsibilities include overseeing the
overall development of our Groups corporate direction and policies as well as our Groups operations,
and playing an active role in the development, maintenance and strengthening of strategic business
relationships.
Dr. Ong Hian Eng started his career at Cold Storage (Singapore) Ltd. as an executive and production
manager between 1974 and 1978 and served as manufacturing manager at Rothmans of Pall Mall
(Singapore) Pte. Limited between 1978 and 1981. He joined the Hwa Hong Group in 1981 as its general
manager and had served as executive director of Hwa Hong and certain of its subsidiaries from February
1981 to July 2012, when he was redesignated as a non-executive director. During his appointment as
executive director of Hwa Hong, he oversaw the overall business development of Mianzhu Norwest until
the Hwa Hong Group divested its interests in Norwest Chemicals and Mianzhu Norwest. In August 2008,
he was part of the management which acquired the entire issued and paid-up share capital of Norwest
Chemicals from the Hwa Hong Group. He has been serving as a director and Legal Representative of
Mianzhu Norwest since 1996 and January 2010, respectively.
Dr. Ong Hian Eng holds a Bachelor of Science (second class honours, upper division) in Chemical
Engineering from the University of Surrey, and a Doctor of Philosophy from the University of London.
He is a corporate member in the class of fellows of The Institution of Chemical Engineers, London since
November 1986 and was a member of the Trade Development Board of Singapore from January 1995
to December 1996. He is also a member of the Singapore-Sichuan Trade & Investment Committee and
honorary council member of the Singapore Chinese Chamber of Commerce & Industry.
SIMON ONG is our Executive Director. His responsibilities include overseeing the human resource and
general administrative functions of our Group.
Simon Ong started his career as an audit assistant at KPMG Peat Marwick in 1991 and was
subsequently promoted to audit senior, audit supervisor and audit manager in 1992, 1994 and 1996,
respectively. Between 1996 and 1999, he served as director of corporate and nancial planning in King
George Development Corporation. Between 2000 and 2002, he worked at KPMG as an audit manager
where he was involved in audits and special engagements of local and multi-national companies
spanning various industries. He was later appointed as group nance manager and Chief Financial
Ofcer of Hwa Hong in 2002 and 2004, respectively, where he was responsible for overseeing its nancial
management, including accounting, tax, nancial control and reporting. As Chief Financial Ofcer of Hwa
Hong, he was responsible for the monitoring and supervision of the nancial reporting, and overseeing
the cash-ow and working capital management, of Mianzhu Norwest until the Hwa Hong Group divested
its interests in Norwest Chemicals and Mianzhu Norwest. Since January 2010, he has been serving as a
director of Mianzhu Norwest. He left Hwa Hong in July 2012.
Simon Ong studied accountancy in the North East London Polytechnic and qualied as a Fellow of The
Association of Chartered Certied Accountants. He is also a non-practising member of the Institute of
Singapore Chartered Accountants and a member of CPA Australia.
RAYMOND ONG is our Non-Executive Director and he is currently the Chief Financial Ofcer of Great
Eastern Life Assurance (Malaysia) Berhad.

Raymond Ong started his career in 1993 as a central banking ofcer at the Monetary Authority of
Singapore, and was appointed assistant director in its insurance commissioners department (life division)
for the period from 1998 to 2000. Between 2000 and 2002, he was regional actuarial manager of Allianz
Asia Pacic Pte. Ltd. where he was responsible for providing general actuarial support to its group entities
in the Asia-Pacic region, including providing technical actuarial support to its start-up life insurance
165
MANAGEMENT AND CORPORATE GOVERNANCE
operations in Pune, India. Between 2002 and 2005, he was appointed as product development actuary
with Aviva Ltd in Singapore, before joining CIGNA International Corporation in 2005 as its regional
actuarial director, providing actuarial support to its group of companies in the Asia-Pacic region. In 2006,
he joined AXA Life Insurance Singapore Private Limited as its Chief Financial Ofcer and appointed
actuary and in 2007, he was seconded to serve as Chief Financial Ofcer and chief actuary of AXA-
Minmetals Assurance Company Ltd (Shanghai) until 2009. Between 2009 and 2011, he served as chief
actuary of Great Eastern Life Assurance (China) Co Ltd, where his responsibilities included providing
strategic support and analysis, strengthening and ensuring continued execution of nancial controls
and processes including the delivery of quality nancial reporting, and identifying opportunities for the
achievement of sales and expense targets.
Raymond Ong holds a Bachelor of Science in Actuarial Mathematics and Statistics (rst-class honours)
from Heriot-Watt University, Edinburgh, United Kingdom. He is also a Fellow of the Institute of Actuaries.
ONG BEE PHENG is our Non-Executive Director. She is currently a compliance ofcer in the Singapore
ofce of Barclays Bank PLC. Ong Bee Pheng started her career at Ernst & Young LLP, London as
an audit and tax associate between 1999 and 2003 where she was responsible for providing tax and
assurance services to clients. Between 2003 and 2004, she served as associate director in the markets
and clearing house division of the Monetary Authority of Singapore where she was responsible for
conducting off-site and on-site supervisions and inspections at The Central Depository (Pte) Limited
and assisting in the drafting of legislation. Since 2005, she has undertaken various appointments in the
compliance departments of various institutions including at Citibank N.A. between 2005 and 2007, the
Singapore ofce of Bank Julius Baer & Co. Ltd. between 2007 and 2008, the Singapore ofce of Barclays
Bank PLC between 2008 and 2009 and the Singapore ofce of Falcon Private Bank Ltd. between 2009
and 2011. She was a compliance ofcer at the Singapore ofce of Chinatrust Commercial Bank Co., Ltd.
from August 2011 to April 2012.
Ong Bee Pheng holds a Bachelor of Arts in Accounting and Law (Honours) from The University of
Manchester. She is also a Fellow of The Institute of Chartered Accountants in England and Wales.
FRANCIS LEE is our Independent Director. He is currently the director of Wise Alliance Investments Ltd,
where he manages and oversees investment portfolios, and is an independent director of Sheng Siong
Group Ltd., Net Pacic Financial Holdings Limited, Metech International Limited and Jes International
Holdings Limited, all of which are companies listed on the Mainboard or Catalist of the SGX-ST.
Francis Lee began his career in 1990 in the Commercial Crime Division of the Criminal Investigation
Department, where he served as a senior investigation ofcer until 1993. In 1993, he joined OCBC Bank
as an assistant manager conducting credit analysis until 1994. Between 1994 and 2001, he worked at
Deutsche Morgan Grenfell Securities as a dealers representative managing clients investment portfolios.
He served at the Singapore branch of the Bank of China between 2001 and 2004 as an assistant
manager overseeing a team of credit ofcers. Between 2004 and 2005, he worked at AP Oil International
Ltd as an investment and project manager, where he was involved in mergers and acquisitions and was
also tasked with overseeing its overall credit policy. Between 2005 and 2011, he served as an executive
director, nance director and Chief Financial Ofcer of Man Wah Holdings Ltd, a company listed on
the Hong Kong Stock Exchange, where he was responsible for the overall accounting functions of the
company and matters relating to its corporate regulatory compliance and reporting. He also served as a
non-independent, non-executive director of Man Wah Holdings Ltd between January 2011 and February
2012.
Francis Lee graduated from the National University of Singapore with a Bachelors degree in Accountancy
in 1990 and obtained a Master of Business Administration (Investment and Finance) from the University
of Hull in 1993. He is a Chartered Accountant and a non-practising member of the Institute of Singapore
Chartered Accountants.
GOH YEOW TIN is our Independent Director. He is currently the non-executive chairman of Seacare
Medical Holdings Pte. Ltd.. Goh Yeow Tin is also an independent director of Sheng Siong Group Ltd.,
Lereno Bio-Chem Ltd., Vicom Ltd and Oakwell Engineering Limited, all of which are companies listed on
the Mainboard of the SGX-ST. He is also a non-executive director of Linknet Asia Pte Ltd, WaterTech Pte.
Ltd., Seacare Manpower Services Pte Ltd and Edu Community Pte. Ltd..
166
MANAGEMENT AND CORPORATE GOVERNANCE
Goh Yeow Tin began his career with the Economic Development Board (EDB) where he headed the
Local Industries Unit and was subsequently appointed a director of EDBs Automation Applications
Centre between 1986 and 1988. He served as deputy executive director of the Singapore Manufacturers
Association (now known as the Singapore Manufacturers Federation) from 1983 to 1984. In 1988, Goh
Yeow Tin joined Tonhow Industries Limited (now known as Asiamedic Limited), the rst plastic injection
moulding company to be listed on SESDAQ (now known as Catalist), and served as its deputy managing
director until 1990. In 1989, Goh Yeow Tin founded, and served as general manager of, International
Franchise Pte Ltd until 1991. Between 1990 and 2000, Goh Yeow Tin served as the vice-president of
Times Publishing Limited, and was responsible for retail and distribution businesses in Singapore, Hong
Kong and various parts of South-east Asia. From 2001 to 2011, Goh Yeow Tin was the CEO of Sino-Sing
Center Pte. Ltd., where he was involved in the operation of pre-school and primary school educational
and training programmes in the PRC.
Goh Yeow Tin holds a Bachelors degree in Mechanical Engineering (Honours) from the University of
Singapore (now known as the National University of Singapore) and a Masters degree in Engineering
from the Asian Institute of Technology. He was awarded the Public Service Medal in 1998 and the Public
Service Star in 2006. Goh Yeow Tin is also a member of the Singapore Institute of Directors.
Pursuant to Rule 406(3)(a) of the Catalist Rules, some of our Directors (namely, Simon Ong, Ong Bee
Pheng and Raymond Ong) do not have prior experience as directors of any public listed company in
Singapore. However, they have undertaken relevant training in Singapore to familiarise themselves with
the roles and responsibilities of a director of a public listed company in Singapore.
Save as disclosed in the Offer Document, our Independent Directors do not have any existing business or
professional relationship of a material nature with our Group, our Directors or Substantial Shareholders.
The list of present and past directorships of each Director over the last ve (5) years preceding the date
of this Offer Document, excluding those held in our Company, is set out below:
Name Present Directorships Past Directorships
Hong Pian Tee Group Companies Group Companies

Other Companies Other Companies
Golden Agri-Resources Ltd
Memstar Technology Ltd.
Pei Hwa Foundation Limited
XMH Holdings Ltd.
Intrust Asset Management (2006) Pte. Ltd.
Sin Ghee Huat Corporation Ltd.
Dr. Ong Hian Eng Group Companies Group Companies
Norwest Chemicals
Mianzhu Norwest

Other Companies Other Companies


Eastcomm
Fica (Pte.) Ltd.
Fica Holdings Pte. Ltd.
Global Trade Investment Management
Pte Ltd
Hwa Hong Corporation Limited
HHEO
(Jining
Ningfeng Chemical Industry Co. Ltd.)
(Jining Paco
Chemical Industry Co., Ltd)
AsiaPhos Holdings Pte. Ltd.
(1)
Bee Tong Trading Company Private
Limited
(2)
Hwa Hong Capital (Pte) Limited
(3)
International Foundation Engineering Pte.
Ltd.
(4)
Norwest Holdings
(5)
Ong Holdings (Private) Limited
(6)
Rizhao Oriental Peanut Food Co., Ltd.
Tenet Capital Ltd (formerly know as Tenet
Insurance Company Ltd)
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MANAGEMENT AND CORPORATE GOVERNANCE
Name Present Directorships Past Directorships
Kaifeng Yufen Oils, Fats & Foodstuffs
Co. Ltd
Ong Chay Tong & Sons (Private)
Limited
Paco Industries Pte. Ltd.
Shandong Hua Xing Plate Printing &
Can Manufacturing Co, Ltd
Shandong Qi Feng Packaging
Products Co. Ltd.
Singamet Trading Pte. Ltd.
Singapore Warehouse Company
(Private) Ltd.
Simon Ong Group Companies Group Companies
Mianzhu Norwest
Norwest Chemicals

Other Companies Other Companies


Astute Investment Holdings Pte. Ltd.
Astute Ventures

Global Trade Investment Management Pte
Ltd
Scotts Spazio Pte. Ltd.
WYY Investment
Raymond Ong Group Companies Group Companies
Norwest Chemicals
Other Companies Other Companies
Astute Investment Holdings Pte. Ltd.
Astute Ventures
Eastcomm
Great Eastern Asset Management
(Malaysia) Sdn Bhd
Great Eastern General Insurance Sdn
Bhd
Ong Chay Tong & Sons (Private)
Limited
Straits Lion Management (Malaysia)
Sdn Bhd
AXA Wealth Management Singapore Pte.
Ltd.
Bee Tong Trading Company Private
Limited
(2)
International Foundation Engineering Pte.
Ltd.
(4)
Ong Holdings (Private) Limited
(6)
Ong Bee Pheng Group Companies Group Companies

Other Companies Other Companies
Eastcomm
Fica (Pte.) Ltd
Fica Holdings Pte. Ltd.

Francis Lee Group Companies Group Companies



Other Companies Other Companies
Jes International Holdings Limited
Metech International Limited
Net Pacic Financial Holdings Limited
Sheng Siong Group Ltd.
Wise Alliance Investments Ltd
Man Wah Furniture (S) Pte. Ltd.
Man Wah Holdings Ltd
168
MANAGEMENT AND CORPORATE GOVERNANCE
Name Present Directorships Past Directorships
Goh Yeow Tin Group Companies Group Companies

Other Companies Other Companies
Edu Community Pte. Ltd.
Lereno Bio-Chem Ltd.
Linknet Asia Pte Ltd
Oakwell Engineering Limited
Seacare Manpower Services Pte Ltd
(8)
Seacare Medical Holdings Pte. Ltd.
(9)
Sheng Siong Group Ltd.
Vicom Ltd
WaterTech Pte. Ltd.
De-Teachers Pte. Ltd.
ETLA Limited
International Education Development
Centre Pte. Ltd.
(7)
Juken Technology Limited
Lereno BC (Singapore) Pte. Ltd.
(10)
Scientic & Digital Forensic Services and
Corporate Investigations Pte. Ltd.
(11)
Sinnet Education Pte. Ltd.
(12)
Sino-Sing Center Pte. Ltd.
(13)
Notes:
(1) Dormant company which was struck off due to inactivity as at 5 June 2012.

(2) Dissolved pursuant to members voluntary winding up as at 16 August 2012.
(3) Dissolved pursuant to members voluntary winding up as at 10 May 2012.
(4) Dissolved pursuant to members voluntary winding up as at 16 August 2012.
(5) In liquidation pursuant to compulsory winding up (insolvency) as at 11 January 2008. Please see section entitled General
and Statutory Information Information on Directors and Key Executives of this Offer Document for further details.
(6) Dissolved pursuant to members voluntary winding up as at 30 October 2012.
(7) Struck off as at 8 December 2010.
(8) Seacare Manpower Services Pte Ltd is a wholly-owned subsidiary of Seacare Holdings Private Limited, which is in turn
wholly-owned by Seacare Co-operative Limited, which also wholly-owns Seacare Foundation, a Noteholder. Our Independent
Director, Goh Yeow Tin is a director of both Seacare Manpower Services Pte Ltd and Seacare Co-operative Ltd.
(9) Seacare Medical Holdings Pte. Ltd. is a subsidiary of Seacare Foundation, a Noteholder, which is in turn wholly-owned by
Seacare Co-operative Ltd. Our Independent Director, Goh Yeow Tin is a director of both Seacare Medical Holdings Pte. Ltd.
and Seacare Co-operative Ltd.
(10) Struck off as at 8 March 2011.
(11) Struck off as at 8 December 2010.
(12) Struck off as at 9 May 2012.
(13) Struck off as at 6 September 2012.
169
MANAGEMENT AND CORPORATE GOVERNANCE
KEY EXECUTIVES
Our Directors are assisted by a team of experienced and qualied Key Executives who are responsible
for the various functions of our Company. The particulars of our Key Executives are as follows:
Name Age Address Principal occupation
Wang Xuebo 59 No. 161 Binghe Road
Mianzhu City
Sichuan Province
PRC
618200
General Manager of Mianzhu Norwest
Rachel Goh 33 69 Compassvale Bow
#13-38
Singapore 544993
Group Financial Controller
Chia Chin Hau 43 Blk 737 Woodlands Circle
#06-487
Singapore 730737
Manager (Special Projects)
Luo Guangming 44 No. 5 Floor 4
Block 4 of Unit 1 No. 244
Binghexi Road
Jiannan Town
Mianzhu City
Sichuan Province
PRC
618200
Mining Manager
The business and working experience of our Key Executives are set out below:
WANG XUEBO is the General Manager of Mianzhu Norwest. He has over 30 years of relevant
management and operational experience. He is responsible for and oversees the overall operations of our
Group, including our sales, marketing and daily operations in the PRC.
Wang Xuebo held various appointments at (Bai Ying Non-ferrous Metals
Corporation) between 1972 and 1976. Between 1979 and 1986, he was a translator for the
(Northwestern Institute of Mining and Metallurgy). Between 1986 and 1996, he served in
various appointments at (China Non-ferrous Foreign Engineering and
Construction Corporation) including deputy general manager (Egypt market), general representative
(Philippines market) and general manager (international market). He joined the Hwa Hong Group in
1996. During this time, he served as the general manager (PRC market) of HHEO between 1996 and
2008 and held various positions in (Jining Ningfeng Chemical Industry Co. Ltd.)
including director and general manager between 1996 and 2007. As Mianzhu Norwest was indirectly
held by HHEO through its 49.5% interest in Norwest Chemicals, Wang Xuebo also held various positions
in Mianzhu Norwest including general manager representative, general manager and executive director
during the period from 1996 till 2008. After HHEO ceased to have any interest in Norwest Chemicals in
August 2008, he held and continues to hold the positions of general manager and executive director in
Mianzhu Norwest.
RACHEL GOH is our Group Financial Controller. She is responsible for the overall nancial functions of
our Group, including preparation of nancial statements, cash management, corporate governance and
internal controls.
Rachel Goh started her career at KPMG in 2002 as audit assistant and was promoted to its audit senior
and assistant audit manager in 2004 and 2006, respectively, where she was responsible for planning
the entire audit engagement, including reviewing the nancial statements of companies and identifying
operational processes and nancial reporting cycle control weaknesses. Between 2007 and 2011, she
was nancial reporting manager of Hwa Hong where she was responsible for its nancial accounting
170
MANAGEMENT AND CORPORATE GOVERNANCE
and reporting matters. Her role included assisting with the nancial reporting, and cash-ow and working
management of Mianzhu Norwest until the Hwa Hong Group divested its interests in Norwest Chemicals
and Mianzhu Norwest in August 2008. She joined us as Group Finance Manager in March 2011, and was
promoted to Group Financial Controller in January 2013.
Rachel Goh holds a Bachelor of Accountancy (Honours) from the Nanyang Technological University,
Singapore. She is a Chartered Accountant of the Institute of Singapore Chartered Accountants.
CHIA CHIN HAU is the Manager (Special Projects) of our Group. He has over 15 years of experience in
nance and accounting work. He is responsible for the implementation of risk management and internal
controls of our operations in the PRC.
Chia Chin Hau started his career as an audit assistant at Paul Chuah & Co in 1994 where he carried out
audit eld work, assisted with statutory audits and analysed management accounts. Between 1995 and
2000, he served as audit senior with Tay & Associates and Hals & Associates, where he was responsible
for audit related work including drafting auditing accounts and auditors report. In 2000, he joined
Pembinaan Angkasan Holding Sdn Bhd as accountant where he was responsible for the nance and
accounting matters of the company. In 2002, he joined HHEO as a special project accountant and was
seconded to the PRC in the same year to assist in the daily accounting matters of related companies,
including serving as nancial controller to Mianzhu Norwest for the period from 2004 to 2008. He joined
our Group as nancial controller in 2008, and was appointed as Manager (Special Projects) in 2012.
Chia Chin Hau holds a Master of Economics from the Universiti Putra Malaysia.
LUO GUANGMING is the Mining Manager of Mianzhu Norwest. He has over 20 years of experience in
Mining Operations. He is responsible for designing and planning our Groups Mining Operations, and
overseeing our Mining Operations, including supervision of the workers and ensuring compliance with
applicable safety and regulatory requirements.
Luo Guangming rst started his career in 1992 as a mining technology executive at the
(Deyang City Qingping Phosphate Mines) where he oversaw its Mining Operations, including attending
to technical issues. Between 1998 and 2002, he served as its vice manager and factory director where
he was responsible for the production and sales of phosphate products, before serving as vice manager
of its general ofce in 2003, where he was responsible for planning, designing and overseeing its mining
operations. Between 2003 and 2006, he served as chief engineer of (Pingwu
Manganese Industry Group Co., Ltd) where he was responsible for planning, designing and overseeing
its mining operations, including the supervision of workers and ensuring compliance with applicable
safety and regulatory measures. He joined our Group as mining manager in 2006.
Luo Guangming holds a - (Bachelor of Mining Engineering) from
(Wuhan Institute of Chemical Technology). He also holds a (Mining Engineer
Certication) from the (Personnel Department of Sichuan Province).

The list of present and past directorships of each Key Executive over the last ve (5) years preceding the
date of this Offer Document is set out below:
Name Present Directorships Past Directorships
Wang Xuebo Group Companies Group Companies
Mianzhu Norwest
Other Companies Other Companies
(Jining Ningfeng Chemical
Industry Co. Ltd.)
Rizhao Oriental Peanut Food Co., Ltd.
(Jining Paco Chemical
Industry Co., Ltd)
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MANAGEMENT AND CORPORATE GOVERNANCE
Name Present Directorships Past Directorships
Kaifeng Yufen Oils, Fats & Foodstuffs Co. Ltd.
Shandong Hua Xing Plate Printing & Can
Manufacturing Co. Ltd
Shandong Qi Feng Packaging Products Co. Ltd.
WYY Investment
Rachel Goh Group Companies Group Companies

Other Companies Other Companies

Chia Chin Hau Group Companies Group Companies
Norwest Chemicals
Other Companies Other Companies

Luo Guangming Group Companies Group Companies

Other Companies Other Companies

SERVICE AGREEMENTS
We have entered into separate Service Agreements with our Executive Directors, Dr. Ong Hian Eng and
Simon Ong, as well as our Key Executive, Wang Xuebo, on 30 May 2013.
The Service Agreements are for an initial period of three (3) years (unless terminated by (i) either party
giving not less than six (6) months notice in writing to the other; or (ii) the Company paying salary in
lieu of the period of time) with effect from the date of admission of our Company to Catalist (the
Effective Date). The Service Agreements cover the terms of employment and specically, the salaries
and bonuses of our Executive Directors and Key Executive. We may terminate a Service Agreement if,
inter alia, the relevant Executive Director or Key Executive is guilty of dishonesty or serious or persistent
misconduct, become bankrupt or otherwise act to our prejudice.
Directors fees do not form part of the terms of the Service Agreements as these require the approval
of our Shareholders in a general meeting. Pursuant to the terms of the Service Agreements, each of
our Executive Directors is entitled to a monthly salary of S$10,000, an annual wage supplement of one
(1) months salary and an annual incentive bonus (the Incentive Bonus) based on our Groups prots
before tax and the computation set out below.
For this purpose, PBT refers to the consolidated prots before Incentive Bonus and taxation of our
Group (after deducting prot before tax attributable to non-controlling interests).
Executive Director PBT
Computation of the Incentive Bonus
(expressed as a percentage of the
PBT achieved by our Group)
Dr. Ong Hian Eng Where the PBT is above S$5,000,000 2%
Simon Ong Where the PBT is above S$5,000,000 1%
Pursuant to the terms of the Service Agreement with our Key Executive, Wang Xuebo, he is entitled to
receive (i) US$5,820 per month, to be paid by Norwest Chemicals; and (ii) RMB30,000 per month, to be
paid by Mianzhu Norwest. He is also entitled to an annual incentive bonus of two per cent. (2%) of our
Groups PBT.
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MANAGEMENT AND CORPORATE GOVERNANCE
All travelling and travel-related expenses, entertainment expenses, and other out-of-pocket expenses
reasonably incurred by our Executive Directors and our Key Executive, Wang Xuebo, in the process of
discharging their duties on behalf of our Group will be borne by us.
Had the Service Agreements been in effect from 1 January 2012, the estimated aggregated remuneration
for the Executive Directors and our Key Executive, Wang Xuebo, would have been approximately S$0.5
million instead of S$0.3 million, and prot after taxation for FY2012 would have been approximately S$1.1
million instead of approximately S$1.2 million.
Our Remuneration Committee has considered the framework of remuneration for our Directors and
Key Executives for FY2013 and is of the view that the framework is fair and reasonable in light of the
respective roles, responsibilities, past and future contributions of our Directors and Key Executives, as
well as general market practices.
ARRANGEMENT OR UNDERSTANDING
There is no arrangement or understanding with any of our Substantial Shareholders, customers, suppliers
or any other person, pursuant to which any of our Directors or Key Executives was selected as our
Director or Key Executive.
DIRECTORS AND KEY EXECUTIVES REMUNERATION
The compensation (which includes, where applicable, contributions to the Central Provident Fund,
benets-in-kind and directors fees) paid to our Directors and our Key Executives for services rendered
to our Group on an aggregate basis and in remuneration bands for FY2011, FY2012 and FY2013
(estimated) are as follows:
FY2011 FY2012
FY2013
(1)
(Estimated)
Directors
Hong Pian Tee Band I
Dr. Ong Hian Eng Band I Band I Band I
Simon Ong Band I Band I Band I
Raymond Ong Band I
Ong Bee Pheng Band I
(2)
Band I
Goh Yeow Tin Band I
Francis Lee Band I
Key Executives
Wang Xuebo
(3)
Band I Band I Band I
Rachel Goh Band I Band I Band I
Chia Chin Hau Band I Band I Band I
Luo Guangming
(3)
Band I Band I Band I
Legend:
Band I : Compensation from S$0 to S$250,000 per year
Band II : Compensation from S$250,001 to S$500,000 per year
Band III : Compensation more than S$500,000 per year
Notes:
(1) Excludes, where applicable, incentive bonus and variable bonus payable.
(2) Between October 2012 and November 2012, Ong Bee Pheng served as an executive director of our Group.
(3) All payments required by the relevant PRC laws and regulations in relation to Wang Xuebo and Luo Guangming have been
fully paid for FY2011 and FY2012, and will be paid for FY2013.
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MANAGEMENT AND CORPORATE GOVERNANCE
Save as described in the section entitled Management and Corporate Governance Service
Agreements of this Offer Document, we do not have any formal bonus or prot-sharing plan or any other
prot-linked agreement or arrangement with any of our employees and bonus is expected to be paid on a
discretionary basis.
Save as required for compliance with applicable laws, no amounts have been set aside or accrued by our
Company or our subsidiaries to provide for pension, retirement or similar benets for our employees.
EMPLOYEES
The employees of Mianzhu Norwest are organised under a trade union formed to protect the legal
interests of such employees. The relationship and co-operation between our management and the trade
union has been good. There have not been any incidences of work stoppages or labour disputes arising
from trade union disputes which have affected our operations in any material respect.
Almost all our employees are based in the PRC. The functional distribution of our Groups headcount as
at 31 December 2010, 2011 and 2012 is as follows:
FY2010 FY2011 FY2012
Administration, human resources and accounts 7 11 18
Sales and marketing 5 4 5
Production and operations 136 117 127
Management 2 3 5
150 135 155
CORPORATE GOVERNANCE
Our Board of Directors recognises the importance of corporate governance and the offering of high
standards of accountability to our Shareholders. Our Board of Directors has formed three (3) committees:
(i) the Nominating Committee; (ii) the Remuneration Committee; and (iii) the Audit Committee.
Term of ofce
Each of our Directors has served in ofce in our Company since the following dates:
Name Date
Hong Pian Tee 22 August 2013
Dr. Ong Hian Eng 3 January 2012
Simon Ong 1 October 2012
Raymond Ong 1 October 2012
Ong Bee Pheng 1 October 2012
Francis Lee 22 August 2013
Goh Yeow Tin 22 August 2013
Our Directors do not currently have a xed term of ofce. Each Director shall retire from ofce at least
once every three (3) years. Directors who retire are eligible to stand for re-election.
Our Board conrms, with the concurrence of our Audit Committee, that the internal controls of our Group
are adequate to address our nancial, operational and compliance risks.
174
MANAGEMENT AND CORPORATE GOVERNANCE
AUDIT COMMITTEE
Our Audit Committee comprises our Independent Directors, Hong Pian Tee, Francis Lee and Goh Yeow
Tin. The chairman of the Audit Committee is Francis Lee.
Our Audit Committee will assist our Board of Directors in discharging their responsibility to safeguard our
assets, maintain adequate accounting records, and develop and maintain effective systems of internal
control, with the overall objective of ensuring that our management creates and maintains an effective
control environment in our Group. Our Audit Committee will provide a channel of communication between
our Board of Directors, our management and our external auditors on matters relating to audit.
The duties of our Audit Committee shall include:
(a) reviewing the signicant nancial reporting issues and judgements, so as to ensure the integrity of
our nancial statements and any announcements relating to our nancial performance;
(b) reviewing the half-yearly and annual financial statements (and quarterly if applicable) and
any formal announcements relating to our Groups nancial performance before submission
to our Board of Directors for approval, focusing in particular on changes in accounting policies
and practices, major risk areas, signicant adjustments resulting from the audit, compliance with
accounting standards and compliance with the Catalist Rules and any other relevant statutory or
regulatory requirements;
(c) reviewing our Groups hedging policies procedures and activities (if any) and monitoring the
implementation of the hedging procedure/policies, including reviewing the instruments, processes
and practices in accordance with any hedging policies approved by our Board of Directors;
(d) reviewing and discussing with investigators, any suspected fraud, irregularity or infringement of any
relevant laws, rules or regulations, which has or is likely to have a material impact on our Groups
operating results or nancial position and our managements response thereto;
(e) reviewing and reporting to the Board of Directors at least annually the adequacy and effectiveness
of our internal controls, including nancial, operational, compliance and information technology
controls (such review may be carried out internally or with the assistance of any competent third
parties);
(f) reviewing the effectiveness of internal audit and controls;
(g) reviewing the scope and results of the external audit, and the independence and objectivity of the
external auditors;
(h) making recommendations to the Board of Directors on the proposals to Shareholders on the
appointment, re-appointment and removal of the external auditors, and approving the remuneration
and terms of engagement of the external auditors;
(i) reviewing the annual consolidated nancial statements and the external auditors report on such
accounting policies, compliance with SFRS, concerns and issues arising from their audits including
any matters which the auditors may wish to discuss in the absence of our management where
necessary, before submission to our Board of Directors for approval;
(j) reviewing and approving any Interested Person Transactions and/ or potential conicts of interest;
(k) undertaking such other reviews and projects as may be requested by our Board of Directors, and
reporting to our Board of Directors its ndings from time to time on matters arising and requiring
the attention of our Audit Committee; and
(l) generally undertaking such other functions and duties as may be required by law or the Catalist
Rules, or by such amendments as may be made thereto from time to time.
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MANAGEMENT AND CORPORATE GOVERNANCE
In addition, we have adopted certain procedures in respect of any change of the Legal Representative of
Mianzhu Norwest. Please refer to the section below entitled Management and Corporate Governance
Legal Representative and Supervisor of our PRC subsidiary, Mianzhu Norwest of this Offer Document for
further details.
Apart from the duties listed above, our Audit Committee shall communicate and review the ndings of
internal investigation into matters where there is any suspected fraud or irregularity or failure of internal
controls or infringement of any law, rule or regulation which has or is likely to have a material impact on
our Companys operating units and/ or nancial position.
Our Audit Committee shall also commission an annual internal control audit until such time as our Audit
Committee is satised that our Groups internal controls are robust and effective enough to mitigate our
Groups internal control weaknesses (if any). Prior to the decommissioning of such an annual audit, our
Board is required to report to the SGX-ST and the Sponsor on how the key internal control weaknesses,
if any, have been rectied, and the basis for the decision to decommission the annual internal control
audit. Thereafter, such audits may be initiated by our Audit Committee as and when it deems t to satisfy
itself that our Groups internal controls remain robust and effective. Upon completion of the internal
control audit, appropriate disclosure will be made via SGXNET of any material, price-sensitive internal
control weaknesses and any follow-up actions to be taken by our Board.
Currently, based on the internal controls established and maintained by our Group, work performed by
the internal and external auditors, and reviews performed by our management and our Board, our Audit
Committee agrees with our Boards conrmation that the internal controls of our Group are adequate to
address our nancial, operational and compliance risks.
Our Audit Committee, after having:
(a) conducted an interview with our Group Financial Controller, Rachel Goh;
(b) considered the qualications and past working experience of Rachel Goh (as described in
the section entitled Management and Corporate Governance Key Executives of this Offer
Document);
(c) observed Rachel Gohs abilities, familiarity and diligence in relation to the nancial matters and
information of our Group; and
(d) made all reasonable enquiries,
is of the view that, to the best of its knowledge and belief, nothing has come to the attention of our Audit
Committee to cause them to believe that Rachel Goh does not have the competence, character and
integrity expected of a Group Financial Controller of our Company.
NOMINATING COMMITTEE
Our Nominating Committee comprises our Independent Directors, Francis Lee and Goh Yeow Tin, as well
as our CEO and Executive Director, Dr. Ong Hian Eng. The chairman of the Nominating Committee is
Goh Yeow Tin.
The duties of our Nominating Committee shall include making recommendations to the Board on relevant
matters relating to:
(a) review of board succession plans for Directors, in particular, the Non-Executive Chairman and for
the CEO and Executive Director;
(b) the development of a process for evaluation of the performance of the Board of Directors, its
committees and Directors;
(c) the review of training and professional development programmes for the Board of Directors;
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MANAGEMENT AND CORPORATE GOVERNANCE
(d) reviewing and sighting all resignation and authorisation letters of the Legal Representatives
of Mianzhu Norwest which have been signed in advance and held in custody by our company
secretary; and
(e) the appointment and re-appointment of Directors (including alternate directors, if applicable).
Important issues to be considered as part of the process for the selection, appointment and re-election
of Directors include composition and progressive renewal of the Board of Directors and each Directors
competencies, commitment, contribution and performance (e.g. attendance, preparedness, participation
and candour), including, if applicable, as our Independent Director.
The Nominating Committee is also charged with the responsibility of determining annually, and as and
when circumstances require, whether a Director is independent.
Each member of our Nominating Committee shall abstain from voting on any resolution in respect of the
assessment of his performance, independence or re-nomination as Director or those of persons related
to him.
Our Nominating Committee has reviewed the appointment of Hong Pian Tee, Francis Lee and Goh Yeow
Tin as Independent Directors of our Company. Each of Hong Pian Tee, Francis Lee and Goh Yeow Tin
had abstained from participating in the review of their own respective appointments.
Having taken into consideration the composition of the Board of Directors, and the respective suitability,
experience and commitments of each of Hong Pian Tee, Francis Lee and Goh Yeow Tin, our Nominating
Committee is of the view that each of Hong Pian Tee, Francis Lee and Goh Yeow Tin is individually and
collectively able to commit sufcient time to the discharge of their duties and are suitable and possess
relevant experience as Independent Directors of our Company.
Each of Hong Pian Tee, Francis Lee and Goh Yeow Tin has conrmed that notwithstanding that he
currently holds independent directorships in listed companies, he will have sufcient time to serve as an
Independent Director of our Company.
Our Nominating Committee, after having:

(i) noted that our Group Financial Controller, Rachel Goh, has been employed by our Group for a
period of more than two (2) years;
(ii) conducted an interview with Rachel Goh, and observed Rachel Gohs abilities, professionalism
and diligence in relation to the nancial matters and information of our Group in the course of the
preparations for the listing of our Company; and
(iii) considered Rachel Gohs former role as a nancial reporting manager of Hwa Hong, and made all
reasonable enquiries into whether there are any relationships or circumstances which are likely to
affect, or could appear to affect, Rachel Gohs exercise of objective or independent judgment in
relation to matters of our Group,
considers that Rachel Goh possesses the independence in character and judgement expected of a
Group Financial Controller of our Company, and that her former employment with Hwa Hong will not
affect her ability to exercise independent judgement and act in the best interests of our Group.
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MANAGEMENT AND CORPORATE GOVERNANCE
REMUNERATION COMMITTEE
Our Remuneration Committee comprises our Independent Directors, Hong Pian Tee, Francis Lee and
Goh Yeow Tin. The chairman of the Remuneration Committee is Goh Yeow Tin.
Our Remuneration Committee shall recommend to our Board of Directors a general framework of
remuneration for our Directors and Key Executives, and review and recommend specic remuneration
packages for each of our Directors and Key Executives. The level and structure of remuneration packages
shall be aligned with the long-term interest and risk policies of our Company, and shall be appropriate to
attract, retain and motivate (i) our Directors to provide good stewardship of our Company; and (ii) our Key
Executives to successfully manage our Company.
The recommendations of our Remuneration Committee shall be submitted for endorsement by our entire
Board of Directors. All aspects of remuneration, including but not limited to, where applicable, Directors
fees, salaries, allowances and bonuses, options, share-based incentives and awards, and benets in
kind shall be covered by our Remuneration Committee. If necessary, the Remuneration Committee shall
seek expert advice inside and/ or outside our Company on remuneration of our Directors. In so doing,
the Remuneration Committee shall ensure that existing key relationships, if any, between our Company
and our appointed remuneration consultants will not affect the independence and objectivity of the
remuneration consultants. Each member of the Remuneration Committee shall abstain from voting on any
resolutions in respect of his remuneration package.
The details of the remuneration of employees who are immediate family members of our Directors, or
our CEO and Executive Director, will be reviewed annually by our Remuneration Committee to ensure
that their remuneration packages are in line our staff remuneration guidelines and commensurate with
their respective job scopes and level of responsibilities. In the event that a member of our Remuneration
Committee is related to the employee under review, he will abstain from such review.
LEGAL REPRESENTATIVE AND SUPERVISOR OF OUR PRC SUBSIDIARY, MIANZHU NORWEST
Legal Representative
Our CEO and Executive Director, Dr. Ong Hian Eng, is the Legal Representative of Mianzhu Norwest.
Dr. Ong Hian Eng is also a director of Mianzhu Norwest. For further details of the role, responsibilities
and powers of the Legal Representative of Mianzhu Norwest under PRC Law, please refer to the section
entitled General Information on our Group Legal Opinion from King & Wood Mallesons of this Offer
Document.
Our Audit Committee has noted that there are risks in relation to the appointment of the Legal
Representative in Mianzhu Norwest, including concentration of authority and impediments to removal.
After having reviewed such risks and noting that:
(i) the articles of association of Mianzhu Norwest have been amended to grant its sole shareholder,
Norwest Chemicals, which is wholly-owned by our Company, the power to, inter alia, remove the
Legal Representative of Mianzhu Norwest. The amendment has been approved by the Deyang
Commerce Bureau, and is in the process of registering/ ling this with the Deyang AIC Bureau;
(ii) Norwest Chemicals has executed an irrevocable letter of undertaking to our Company stating
that, inter alia, it shall use all best endeavours to procure that the appointment and the removal of
the Legal Representative of Mianzhu Norwest by Norwest Chemicals shall only be carried out in
accordance with such resolution(s) as may be passed by our Board of Directors; and
(iii) Dr. Ong Hian Eng and his Associates shall abstain from voting on any resolution to remove or re-
appoint Dr. Ong Hian Eng as the Legal Representative of Mianzhu Norwest,
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MANAGEMENT AND CORPORATE GOVERNANCE
the Audit Committee is of the view that there are adequate processes and procedures in place to
mitigate the risks in relation to the appointment of the Legal Representative of Mianzhu Norwest. Our
Audit Committee will monitor and periodically review the processes and procedures in relation to the
appointment and removal and the avoidance of concentration of authority of the Legal Representative of
Mianzhu Norwest, to ensure their effectiveness and robustness.
None of our Independent Directors sits on the board of our PRC subsidiary, Mianzhu Norwest.
Supervisor
Toh Thiam Seah Victor is the (Supervisor) of Mianzhu Norwest. For further details of the role,
responsibilities and powers of the (Supervisor) of Mianzhu Norwest under PRC Law, please refer to
the section entitled General Information on our Group Legal Opinion from King & Wood Mallesons of
this Offer Document.
The articles of association of Mianzhu Norwest have been amended and include the following articles
regarding the Supervisor of Mianzhu Norwest:
(i) reviewing the nancial affairs of Mianzhu Norwest;
(ii) monitoring the performance of duties of the directors and senior managers of Mianzhu Norwest,
and proposing the removal of any director or senior manager who is in breach of any law,
administrative regulation, the articles of association of Mianzhu Norwest or any resolutions passed
at any Mianzhu Norwest shareholders meeting;
(iii) requesting any director or senior manager of Mianzhu Norwest to rectify his/ her action if such
action is in conict with the interests of Mianzhu Norwest;
(iv) convening interim shareholders meeting for Mianzhu Norwest, and convening and leading the
shareholders meeting when the board of directors of Mianzhu Norwest does not exercise such
duties according to PRC law; and
(v) proposing resolutions at Mianzhu Norwests shareholders meeting
(the Supervisor Amendments).
The Supervisor Amendments have been approved by the Deyang Commerce Bureau, and Mianzhu
Norwest is in the process of registering/ ling this with the Deyang AIC Bureau.
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ASIAPHOS PERFORMANCE SHARE PLAN
We have implemented a performance share plan that will be in place after the Invitation known as the
AsiaPhos Performance Share Plan. The following is a summary of the principal terms of the AsiaPhos
Performance Share Plan adopted by our Company in conjunction with the listing of our Shares on
Catalist. The terms and the rules of the AsiaPhos Performance Share Plan are more particularly set out
in Appendix F to this Offer Document (the Rules). Capitalised terms used in this summary which are
not otherwise dened in this summary bear the same meanings as ascribed in the Rules of the AsiaPhos
Performance Share Plan.
1. Objectives of the AsiaPhos Performance Share Plan
The objectives of the AsiaPhos Performance Share Plan are to :
(a) foster a framework of ownership within our Group which coordinates the interests of our
Group Executives with the interests of Shareholders;
(b) motivate Participants to achieve key nancial and operational goals of our Company and/ or
their respective business units and encourage greater commitment and loyalty to our Group;
(c) make total employee remuneration sufciently competitive to recruit new Participants with
relevant skills; and;
(d) recognize the efforts of and retain existing Participants whose contributions are important to
the long-term development and protability of our Group.
2. The AsiaPhos Performance Share Plan
Awards granted under the AsiaPhos Performance Share Plan will primarily be performance-based,
incorporating an element of stretched targets for senior executives and considerably stretched
targets for key senior management, aimed at delivering long-term Shareholder value. Examples
of performance targets to be set include targets based on criteria such as medium- and long-
term corporate objectives of our Group, and will be aimed at sustaining long-term growth. The
corporate objectives shall cover market competitiveness, business growth and productivity growth.
The performance targets could be based on criteria such as sales growth, growth in earnings and
return on investment. Additionally, inter alia, the Participants length of service with our Group,
achievement of past performance targets, extent of value-adding to our Groups performance and
development and overall enhancement to Shareholder value will be taken into account.
Our Company believes that the AsiaPhos Performance Share Plan will be an effective mechanism
to motivate senior executives and key senior management to work towards stretched targets,
thereby incentivising senior executives and key senior management to enhance economic value for
Shareholders.
The AsiaPhos Performance Share Plan contemplates the award of fully-paid Shares, when and
after pre-determined performance or service conditions are accomplished.
A Participants Award under the AsiaPhos Performance Share Plan will be determined at
the sole discretion of the Committee. In considering the grant of an Award to a Participant, the
Committee may take into account, inter alia, the Participants capability, creativity, entrepreneurship,
innovativeness, scope of responsibility and skill set. The committee may also set specic and
Performance Conditions for each different department, taking into account factors such as (i) our
Groups business goals and directions for each nancial year; (ii) the Participants actual job scope
and duties; and (iii) prevailing economic conditions.
Under the AsiaPhos Performance Share Plan, Participants are encouraged to continue serving our
Group beyond the deadline for the achievement of the pre-determined performance targets. The
Committee has the discretion to impose a further vesting period after the performance period to
encourage the Participant to continue serving our Group.
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ASIAPHOS PERFORMANCE SHARE PLAN
3. Summary of Rules of the AsiaPhos Performance Share Plan
3.1 Eligibility
Group Executives who have attained the age of 21 years as of the Award Date and hold such
rank as may be designated by the Committee from time to time are eligible to participate in the
AsiaPhos Performance Share Plan. Group Executive Directors and Group Non-Executives
Directors (including Independent Directors) are eligible to participate in the AsiaPhos Performance
Share Plan. The Participant must also not be an undischarged bankrupt and must not have entered
into a composition with his creditors.
Persons who are Controlling Shareholders or Associates of a Controlling Shareholder who meet
the criteria above are also eligible to participate in the AsiaPhos Performance Share Plan, provided
that the participation of and the terms of each grant and the actual number of Awards granted
under the AsiaPhos Performance Share Plan to a Participant who is a Controlling Shareholder
or an Associate of a Controlling Shareholder shall be approved by independent Shareholders in
general meeting in separate resolutions for each such person, and in respect of each such person,
in separate resolutions for each of (i) his participation; and (ii) the terms of each grant and the
actual number of Awards to be granted to him, provided always that it shall not be necessary to
obtain the approval of independent Shareholders for the participation in the AsiaPhos Performance
Share Plan of a Controlling Shareholder or an Associate of a Controlling Shareholder who is, at the
relevant time already a Participant.
There shall be no restriction on the eligibility of any Participant to participate in any other share
incentive schemes or share plans implemented or to be implemented by our Company or any other
company within our Group.
3.2 Awards
Awards represent the right of a Participant to receive fully-paid Shares free-of-charge, provided
that certain prescribed performance targets (if any) are met and upon expiry of the prescribed
performance period.
Shares which are issued and allotted or transferred to a Participant pursuant to the grant of an
Award are personal to the Participant to whom the Award is granted, and shall not be transferred,
charged, assigned, pledged or otherwise disposed of, in whole or in part, during a specied
period (as prescribed by the Committee in the Award letter), except to the extent approved by the
Committee.
The Committee may, in its absolute discretion, make a Release of an Award, wholly or partly, in the
form of cash rather than Shares.
3.3 Participants
The selection of a Participant and the number of Shares (which are the subject of each Award)
to be granted to a Participant in accordance with the AsiaPhos Performance Share Plan shall
be determined at the absolute discretion of the Committee, which shall take into account criteria
such as, inter alia, his rank, scope of responsibilities, job performance, years of service, potential
for future development, and contribution to the success and development of our Group and, if
applicable, the extent of effort and resourcefulness required to achieve the performance target(s)
within the performance period.
3.4 Details of Awards
The Committee shall decide, in relation to an Award:
(a) the Participant;
(b) the Award Date;
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ASIAPHOS PERFORMANCE SHARE PLAN
(c) the Performance Period;
(d) the number of Shares which are the subject of the Award;
(e) the Performance Condition(s);
(f) the Release Schedule; and
(g) any other condition(s) which the Committee may determine in relation to that Award.
A member of the Committee who is also a Participant shall not be involved in the Committees
deliberation in respect of Awards granted or which will be granted to him.
3.5 Timing
Awards may be granted at any time in the course of a nancial year. An Award Letter conrming
the Award and specifying, inter alia, the Award Date, the Performance Condition(s), the number
of Shares which are the subject of the Award, the Performance Period and the Release
Schedule setting out the extent to which Shares will be released on satisfaction of the prescribed
performance target(s), will be sent to each Participant as soon as is reasonably practicable after
the granting of an Award.
The Committee will take into account various factors when determining the method to arrive at
the exact number of Shares comprised in an Award. Such factors include, but are not limited
to, the current price of our Shares, the total issued share capital of our Company and the pre-
determined dollar amount which the Committee decides that a Participant deserves for meeting his
performance targets.
For example, Shares may be awarded based on pre-determined dollar amounts such that
the quantum of Shares comprised in Awards is dependent on the closing price of our Shares
transacted on the Market Day the Award is vested. Alternatively, the Committee may decide
absolute numbers of Shares to be awarded to Participants irrespective of the price of the
Shares. The Committee shall monitor the grant of Awards carefully to ensure that the size of the
Performance Share Plan will comply with the relevant rules of the Listing Manual.
3.6 Events Prior to Vesting
Special provisions for the vesting, lapsing and/ or cancellation of Awards apply in certain
circumstances including the following:
(a) misconduct on the part of a Participant as determined by the Committee in its discretion;

(b) where the Participant is a Group Executive, upon the Participant ceasing to be in the
employment of our Group for any reason whatsoever (other than as specied in paragraph
(e) below);
(c) an order being made or a resolution passed for the winding-up of our Company on the basis,
or by reason, of its insolvency;
(d) the bankruptcy of a Participant or the happening of any other event which results in him
being deprived of the legal or benecial ownership of the Award;
(e) the Participant, being a Group Executive, ceases to be in the employment of our Group by
reason of:
(i) ill-health, injury or disability (in each case, evidenced to the satisfaction of the
Committee);
(ii) redundancy;
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ASIAPHOS PERFORMANCE SHARE PLAN
(iii) retirement at or after the legal retirement age;
(iv) retirement before the legal retirement age with the consent of the Committee;
(v) the company by which he is employed or to which he is seconded, as the case may
be, ceasing to be a company within our Group or the undertaking or part of the
undertaking of such company being transferred otherwise than to another company
within our Group;
(vi) his transfer of employment between companies within the Group;
(vii) his transfer to any government ministry, governmental or statutory body or corporation
at the direction of any company within our Group; or
(viii) any other event approved by the Committee;
(f) the death of a Participant;
(g) any other event approved by the Committee; or
(h) a take-over, reconstruction or amalgamation of our Company or an order being made or a
resolution passed for the winding-up of our Company (other than as provided in paragraph
(c) above or for reconstruction or amalgamation).
Upon the occurrence of any of the events specied in paragraphs (a), (b), and (c), an Award then
held by a Participant shall, subject as provided in the Rules of the AsiaPhos Performance Share
Plan and to the extent not yet released, immediately lapse without any claim whatsoever against
our Company.
Upon the occurrence of any of the events specied in paragraphs (d) (e), (f) and (g) above, the
Committee may, in its absolute discretion, preserve all or any part of any Award and decide either
to Vest some or all of the Shares which are the subject of the Award or to preserve all or part
of any Award until the end of the relevant Performance Period. In exercising its discretion, the
Committee will have regard to all circumstances on a case-by-case basis, including (but not limited
to) the contributions made by that Participant and, in the case of performance-related Awards, the
extent to which the applicable Performance Conditions have been satised.
Upon the occurrence of the event specied in paragraph (h) above, the Committee will consider, at
its discretion, whether or not to release any Award, and will take into account all circumstances on
a case-by-case basis, including (but not limited to) the contributions made by that Participant. If the
Committee decides to Release any Award, then in determining the number of Shares to be Vested
in respect of such Award, the Committee will have regard to the proportion of the Performance
Period which has lapsed and the extent to which the applicable Performance Conditions have been
satised.
3.7 Size and Duration of the AsiaPhos Performance Share Plan
The aggregate number of Shares which may be issued or transferred pursuant to Awards granted
under the AsiaPhos Performance Share Plan, when added to (i) the number of Shares issued and
issuable and/ or transferred or transferable in respect of all Awards granted thereunder; and (ii) all
Shares issued and issuable and/ or transferred or transferable in respect of all options granted or
awards granted under any other share incentive schemes or share plans adopted by the Company
for the time being in force, shall not exceed fteen per cent. (15%) of the entire issued and paid-up
share capital (excluding treasury shares) of our Company on the day preceding the relevant date of
the Award.
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ASIAPHOS PERFORMANCE SHARE PLAN
In addition, the number of Shares available to Controlling Shareholders or Associates of a
Controlling Shareholder are subject to the following:
(a) the aggregate number of Shares comprised in Awards granted to Controlling Shareholders
or Associates of Controlling Shareholders under the AsiaPhos Performance Share Plan shall
not exceed twenty-ve per cent. (25%) of the aggregate number of Shares (comprised in
Awards) which may be granted under the AsiaPhos Performance Share Plan; and
(b) the number of Shares available to each Controlling Shareholder or Associate of a Controlling
Shareholder shall not exceed ten per cent. (10%) of the Shares available under the
AsiaPhos Performance Share Plan.
The AsiaPhos Performance Share Plan shall continue in force at the discretion of the Committee,
subject to a maximum period of ten (10) years commencing on the date on which the AsiaPhos
Performance Share Plan is adopted by our Company in general meeting, provided always that the
AsiaPhos Performance Share Plan may continue beyond the aforementioned stipulated period with
the approval of Shareholders in general meeting and of any relevant authorities which may then be
required.
Notwithstanding the expiry or termination of the AsiaPhos Performance Share Plan, any Awards
made to Participants prior to such expiry or termination will continue to remain valid.
We have made an application to the SGX-ST for permission to deal in and for quotation of new
Shares which may be issued upon the grant of Awards under the AsiaPhos Performance Share
Plan. The approval of the SGX-ST is not to be taken as an indication of the merits of our Group,
our Shares or the Shares which are the subject of the Awards.
3.8 Operation of the AsiaPhos Performance Share Plan
Subject to the prevailing legislation, our Company may deliver Shares to Participants upon Vesting
of their Awards by way of an issue of new Shares deemed to be fully paid upon their issuance and
allotment and/ or by way of the transfer of treasury shares (by way of purchasing existing Shares
from the market for delivery to Participants pursuant to the Act).
In determining whether to issue new Shares to Participants or to purchase existing Shares upon
vesting of their Awards, our Company will take into account factors such as (but not limited to) the
number of Shares to be delivered, the prevailing market price of the Shares and the cost to our
Company of either issuing new Shares or purchasing existing Shares.
Additionally, our Company has the exibility, and if circumstances require, to approve the Release
of an Award, wholly or partly, in the form of cash rather than Shares. In determining whether to
Release an Award, wholly or partly, in the form of cash rather than Shares, our Company will take
into account factors such as (but not limited to) the cost to our Company of Releasing an Award,
wholly or partly, in the form of cash rather than Shares.
The nancial effects of the above methods are discussed in paragraph 7 below.
New Shares issued and allotted, and existing shares procured by the Company for transfer, on the
Release of an Award shall be eligible for all entitlements, including dividends or other distributions
declared or recommended in respect of the then existing Shares, the record date for which is on or
after the relevant date of issue or, as the case may be, delivery, and shall in all other respects rank
pari passu with other existing Shares then in issue.
The Committee shall have the discretion to determine whether the Performance Condition(s) have
been satised (whether fully or partially) or exceeded; and in making any such determination, the
Committee shall have the right to make reference to the audited results of our Company or our
Group, and to take into account such factors as the Committee may determine to be relevant, such
as changes in accounting methods, taxes and extraordinary events, and further, the right to amend
the performance target(s) if the Committee decides that a changed performance target would be a
fairer measure of performance.
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ASIAPHOS PERFORMANCE SHARE PLAN
4. Adjustments and Alterations under the AsiaPhos Performance Share Plan
4.1 Adjustment Events
If a variation in the issued ordinary share capital of our Company (whether by way of a
capitalisation of prots or reserves or rights issue, capital reduction, subdivision, consolidation,
distribution or otherwise) shall take place, then:
(a) the class and/ or number of Shares which are the subject of an Award to the extent not yet
Vested; and/ or
(b) the class and/ or number of Shares over which future Awards may be granted under the
AsiaPhos Performance Share Plan,
shall be adjusted in such manner as the Committee may determine to be appropriate, provided that
no adjustment shall be made if as a result, the Participant receives a benet that a Shareholder
does not receive.
The issue of securities as consideration for an acquisition or a private placement of securities
or the cancellation of issued Shares purchased or acquired by our Company by way of a market
purchase of such Shares undertaken by our Company on the SGX-ST during the period when a
share purchase mandate granted by Shareholders (including any renewal of such mandate) is in
force shall not normally be regarded as a circumstance requiring adjustment, unless the Committee
considers an adjustment to be appropriate.
Any adjustment (except in relation to a capitalisation issue) must be conrmed in writing by the
Auditors (acting only as experts and not as arbitrators) to be in their opinion, fair and reasonable.
4.2 Modications or Alterations to the AsiaPhos Performance Share Plan
The AsiaPhos Performance Share Plan may be modied and/ or altered from time to time by a
resolution of the Committee subject to the prior approval of our Shareholders, the SGX-ST and/or
such other regulatory authorities as may be necessary.
However, no modication or alteration shall adversely affect the rights attached to Awards
granted prior to such modication or alteration except with the written consent of such number of
Participants under the AsiaPhos Performance Share Plan who, if their Awards were Released to
them, would thereby become entitled to not less than three quarters of all the Shares which would
fall to be Vested upon Release of all outstanding Awards under the AsiaPhos Performance Share
Plan.
No alteration shall be made to particular rules of the AsiaPhos Performance Share Plan to the
advantage of the holders of the Awards, except with the prior approval of Shareholders in general
meeting.
5. Disclosures in Annual Reports
Our Company will make such disclosures in its annual report for so long as the AsiaPhos
Performance Share Plan continues in operation as from time to time required by the Catalist Rules
including the following (where applicable):
(a) the names of the members of the Committee administering the AsiaPhos Performance
Share Plan;
(b) in respect of the following Participants:
(i) Directors of our Company;
(ii) Controlling Shareholders and their Associates; and
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ASIAPHOS PERFORMANCE SHARE PLAN
(iii) Participants (other than those in paragraphs (i) and (ii) above) who have received
Shares pursuant to the Release of Awards granted under the AsiaPhos Performance
Share Plan which, in aggregate, represent five per cent. (5%) or more of the
aggregate number of new Shares available under the AsiaPhos Performance Share
Plan,
the following information:
(aa) the name of the Participant;
(bb) the aggregate number of Shares comprised in Awards granted to such participants
during the nancial year under review;
(cc) the number of new Shares issued to such Participant during the nancial year under
review;
(dd) the number of existing Shares purchased for delivery pursuant to Release of Awards
to such Participant during the nancial year under review;
(ee) the aggregate number of Shares comprised in Awards which have not been released
as at the end of the nancial year under review;
(ff) the aggregate number of Shares comprised in Awards granted since the
commencement of the AsiaPhos Performance Share Plan to the end of the nancial
year under review;
(gg) the number of new Shares allotted to such Participant since the commencement of the
AsiaPhos Performance Share Plan to the end of the nancial year under review; and
(hh) the number of existing Shares transferred to the Participant since the commencement
of the AsiaPhos Performance Share Plan to the end of the nancial year under review;
(c) in relation to the AsiaPhos Performance Share Plan:
(i) the aggregate number of Shares comprised in Awards Vested since the
commencement of the AsiaPhos Performance Share Plan to the end of the nancial
year under review;
(ii) the aggregate number of new Shares issued which are comprised in the Awards
Vested during the nancial year under review; and
(iii) the aggregate number of Shares comprised in Awards which have not been Released,
as at the end of the nancial year under review; and
(d) such other information as may be required by the Catalist Rules or the Act.
If any of the above is not applicable, an appropriate negative statement shall be included therein.
6. Role and Composition of the Committee
The Committee responsible for the administration of the AsiaPhos Performance Share Plan will
comprise such Directors or such persons duly authorised and appointed by the Board of Directors
to administer the Performance Share Plan, provided that no member of the Committee shall
participate in any deliberation or decision in respect of Awards granted or to be granted to him or
his Associate.
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ASIAPHOS PERFORMANCE SHARE PLAN
The Committee shall have the power, from time to time, to make and vary such rules (not being
inconsistent with the Performance Share Plan) for the implementation and administration of the
AsiaPhos Performance Share Plan as it thinks t, including, but not limited to:
(a) imposing restrictions on the number of Awards that may be vested within each nancial year;
and
(b) amending performance targets if by doing so, it would be a fairer measure of performance of
a Participant or for the AsiaPhos Performance Share Plan as a whole.
7. Financial Effects of the AsiaPhos Performance Share Plan
Financial Reporting Standard 102, Share-based Payment (FRS 102) relating to share-based
payment takes effect for all listed companies beginning 1 January 2005. Participants will receive
Shares and the Awards would be accounted for as equity-settled share-based transactions, as
described in the following paragraphs.
The fair value of employee services received in exchange for the grant of the Awards will be
recognised as a charge to the income statement over the period between the grant date and the
Vesting Date of an Award. The total amount of the charge over the Vesting period is determined
by reference to the fair value of each Award granted at the grant date and the number of Shares
Vested at the Vesting Date, with a corresponding credit to reserve account. Before the end of
the Vesting period, at each accounting year end, the estimate of the number of Awards that are
expected to Vest by the Vesting Date is subject to revision, and the impact of the revised estimate
will be recognised in the income statement with a corresponding adjustment to the reserve
account. After the Vesting Date, no adjustment to the charge to the income statement is made.
This accounting treatment has been referred to as the modied grant date method because the
number of Shares included in the determination of the expense relating to employee services is
adjusted to reect the actual number of Shares that eventually Vest but no adjustment is made to
changes in the fair value of the Shares since the grant date.
The amount charged to the prot and loss account would be the same whether the Company
settles the Awards by issuing new Shares or by purchasing existing Shares. The amount of the
charge to the income statement also depends on whether or not the performance target attached
to an Award is measured by reference to the market price of the Shares. This is known as a market
condition. If the performance target is a market condition, the probability of the performance target
being met is taken into account in estimating the fair value of the Award granted at the grant date,
and no adjustments to the amounts charged to the income statement are made if the market
condition is not met. However, if the performance target is not a market condition, the fair value
per Share of the Awards granted at the grant date is used to compute the amount to be charged
to the income statement at each accounting date, based on an assessment at that date of whether
the non-market conditions would be met to enable the Awards to vest. Thus, where the Vesting
conditions do not include a market condition, there would be no charge to the income statement if
the Awards do not ultimately Vest.
In the event that the Participants receive cash, our Company shall measure the fair value of the
liability at grant date. Until the liability is settled, our Company shall re-measure the fair value of
the liability at each accounting date and at the date of settlement, with changes in the fair value
recognised in the prot and loss account.
The following sets out the nancial effects of the AsiaPhos Performance Share Plan.
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ASIAPHOS PERFORMANCE SHARE PLAN
7.1 Share Capital
The AsiaPhos Performance Share Plan will result in an increase in our Companys issued Shares
where new Shares are issued to Participants. The number of new Shares issued will depend on,
amongst others, the size of the Awards granted under the AsiaPhos Performance Share Plan. In
any case, the AsiaPhos Performance Share Plan provides that the aggregate number of Shares
which may be issued or transferred pursuant to Awards granted under the AsiaPhos Performance
Share Plan, when added to (i) the number of Shares issued and issuable and/ or transferred or
transferable in respect of all Awards granted thereunder; and (ii) all Shares issued and issuable
and/ or transferred or transferable in respect of all options granted or awards granted under any
other share incentive schemes or share plans adopted by the Company for the time being in force,
shall not exceed fteen per cent. (15%) of the entire issued and paid-up share capital (excluding
treasury shares) of our Company on the day preceding the relevant date of the Award. If instead
of issuing new Shares to Participants, treasury shares are transferred to Participants and our
Company pays the equivalent cash value, the AsiaPhos Performance Share Plan would have no
impact on our Companys total number of issued Shares.
7.2 NTA
As described in paragraph 7.3 below on EPS, the AsiaPhos Performance Share Plan is likely to
result in a charge to our Companys prot and loss account over the period from the grant date to
the Vesting Date of the Awards. The amount of the charge will be computed in accordance with the
FRS 102. When new Shares are issued under the AsiaPhos Performance Share Plan, there would
be no effect on the NTA. However, if instead of issuing new Shares to Participants, existing Shares
are purchased for delivery to Participants, or our Company pays the equivalent cash value, the
NTA would be impacted by the cost of the Shares purchased or the cash payment, respectively.
7.3 EPS
The AsiaPhos Performance Share Plan is likely to result in a charge to earnings over the period
from the grant date to the Vesting Date, computed in accordance with the FRS 102.
It should again be noted that the delivery of Shares to Participants of the AsiaPhos Performance
Share Plan will generally be contingent upon the Participants meeting the prescribed performance
targets and conditions.
7.4 Dilutive Impact
It is expected that the AsiaPhos Performance Share Plan will have a dilutive effect on the NTA per
Share and EPS.
8. Participation of Group Executive Directors and Group Executives
The extension of the AsiaPhos Performance Share Plan to Group Executive Directors and Group
Executives allows us to have a fair and equitable system to reward Group Executive Directors and
Group Executives who have made and who continue to make signicant contributions to the long-
term growth of our Group and to inculcate in Participants a stronger and more lasting sense of
identication with our Group.
We believe that the AsiaPhos Performance Share Plan will also enable us to attract, retain
and provide incentives to its Participants to optimise their standards of performance as well as
encourage greater dedication and loyalty by enabling our Company to give recognition to past
contributions and services as well as motivating Participants generally to contribute towards the
long-term growth of our Group.
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ASIAPHOS PERFORMANCE SHARE PLAN
9. Participation of Group Non-Executive Directors (including Independent Directors) of our
Company
While the AsiaPhos Performance Share Plan caters principally to Group Employees, it is
recognised that there are other persons who make signicant contributions to the Group through
their close working relationships with our Group, even though they are not employed within our
Group. Such persons include the Group Non-Executive Directors.
The Group Non-Executive Directors are persons from different professions and working
backgrounds, bringing to our Group their wealth of knowledge, business expertise and contracts
in the business community. They play an important role in helping our Group shape its business
strategy by allowing our Group to draw on the backgrounds and diverse working experience of
these individuals. It is crucial for the Company to attract, retain and incentivise the Group Non-
Executive Directors.
We believe that including the Non-Executive Group Directors in the AsiaPhos Performance Share
Plan will show our Companys appreciation for, and further motivate them in, their contribution
towards the success of the Group. However, while it is desired that participation in the AsiaPhos
Performance Share Plan be made open to the Group Non-Executive Directors of the Company,
their services and contributions cannot be measured in the same way as Group Employees.
Accordingly, any Awards that may be granted to any such Group Non-Executive Director would
be intended only as a token of our Companys appreciation. For the purpose of assessing
the contributions of Group Non-Executive Directors, the Committee will propose a performance
framework comprising mainly non-nancial performance measurement criteria such as the extent
of involvement and responsibilities shouldered by Group Non-Executive Directors within the Board.
In addition, the Committee will also consider the scope of advice given by Group Non-Executive
Directors.
It is envisaged that the vesting of Awards, and hence the number of Shares to be delivered to the
Group Non-Executive Directors based on the criteria set out above will be relatively small in terms
of frequency and numbers. Based on this, the Directors are of the view that the participation by the
Group Non-Executive Directors in the AsiaPhos Performance Share Plan will not compromise their
independent status.
The Committee may also decide that no Awards shall be made in any nancial year or no grant
of Award may be made to Group Non-Executive Directors at all. Further, any grant of Award to
Non-Executive Directors will be subject to and shall comply with the provisions of the Act (where
applicable), including the provisions of section 76 of the Act.
10. Participation of Controlling Shareholders or Associates of Controlling Shareholders
The purpose of the participation of Controlling Shareholders and Associates of Controlling
Shareholders in the AsiaPhos Performance Share Plan is to provide an opportunity for eligible
Group Executives (including Group Executive Directors) and Group Non-Executive Directors who
are Controlling Shareholders or Associates of Controlling Shareholders who have contributed or
continue to contribute signicantly to the growth and performance of our Group to participate in the
equity of the Company.
We acknowledge that the services and contributions of the Group Executives (including Group
Executive Directors) and Group Non-Executive Directors who are Controlling Shareholders or
Associates of our Controlling Shareholders are important to the development and success of our
Group. The extension of the AsiaPhos Performance Share Plan to the eligible Group Executives
(including Group Executive Directors) and Group Non-Executive Directors who are Controlling
Shareholders or Associates of our Controlling Shareholders allows our Company to have a fair and
equitable system for rewarding the eligible Group Executives (including Group Executive Directors)
and Group Non-Executive Directors who have made and continue to make important contributions
to the long-term growth of our Group notwithstanding that they are Controlling Shareholders or
Associates of our Controlling Shareholders.
189
ASIAPHOS PERFORMANCE SHARE PLAN
Although the Controlling Shareholders and/ or their Associates may already have shareholding
interests in the Company, including them in the AsiaPhos Performance Share Plan will ensure that
they are equally entitled with other eligible Group Executives (including Group Executive Directors)
and Group Non-Executive Directors who are not Controlling Shareholders or Associates of
Controlling Shareholders to take part and benet from this system of remuneration. We are of the
view that a person who would otherwise be eligible should not be excluded from participating in the
AsiaPhos Performance Share Plan solely by reason that he/she is a Controlling Shareholders or an
Associate of our Controlling Shareholder.
The specic approval of our independent Shareholders is required for the participation of and the
grant of Awards to such persons as well as the actual number of and terms of such Awards. A
separate resolution must be passed for each such participant. In seeking such approval from our
independent Shareholders, clear justication as to the participation of our Controlling Shareholders
and/ or Associates of our Controlling Shareholders, the number of Shares and terms of the
Awards to be granted to them shall be provided. Accordingly, we are of the view that there are
sufcient safeguards against any abuse of the AsiaPhos Performance Share Plan resulting from
the participation of Controlling Shareholders and Associates of Controlling Shareholders.
190
INTERESTED PERSON TRANSACTIONS AND CONFLICTS OF INTEREST
In general, transactions between our Group and any of our Interested Persons (namely, our Directors,
CEO and Executive Director or Controlling Shareholders of our Company and/ or any of their Associates)
are known as Interested Person Transactions.
This section sets out the Interested Person Transactions entered into by our Group for the Period Under
Review and for the period commencing from 1 April 2013 up to the Latest Practicable Date on the basis
of each member of our Group (namely, our Company and our subsidiaries) being an Entity At Risk and
with Interested Persons being construed accordingly.
Save as disclosed in this section and under the section entitled Restructuring Exercise of this Offer
Document, our Group does not have any material transactions with any Interested Person for the Period
Under Review and for the period commencing from 1 April 2013 up to the Latest Practicable Date.
In line with the rules set out in Chapter 9 of the Catalist Rules, a transaction with a value of less than
S$100,000 is not considered material in the context of the Invitation and is not taken into account for the
purposes of aggregation in this section.
PAST INTERESTED PERSON TRANSACTIONS
Transactions with Eastcomm
Advances extended to our Group by Eastcomm
Our CEO and Executive Director, Dr. Ong Hian Eng, is a director and shareholder of Eastcomm,
holding approximately 45.5% of the share capital of Eastcomm. Dr. Ong Hian Eng is also one (1) of our
Controlling Shareholders. The other shareholders of Eastcomm are Astute Ventures, WYY Investment
and Chia Chin Hau. Subsequent to the Restructuring Exercise, our Directors, Simon Ong and Raymond
Ong and our Controlling Shareholder, Melissa Ong will have an indirect interest in Eastcomm. Please
refer to the sections entitled Dilution and Share Capital and Shareholders Shareholders of this Offer
Document for further details on relationships between the shareholders of Eastcomm and the Directors
and Key Executives of our Company.
Since 2009, Eastcomm has been providing advances to our Group for capital expenditure and working
capital requirements. From 1 January 2010 up to the Latest Practicable Date, Eastcomm has provided
advances amounting to an aggregate of S$20,346,400 to our Group for capital expenditure and working
capital requirements (the Advances).
As at 31 December
As at 31
March 2013
Largest amount
outstanding up
to the Latest
Practicable Date (S$000) 2010 2011 2012
Advances 600 2,050 646 14,050
(1)
Note:
(1) Based on month-end balances.
Our Group received a loan in aggregate of S$1,000,000 from Eastcomm in May 2013 for working capital
purposes. Our Directors are of the view this loan was not made on an arms length basis or on normal
commercial terms as it was interest-free, unsecured and had no xed term of repayment. The loan was
repaid in full to Eastcomm in June 2013. We do not intend to enter into similar transactions following our
admission to Catalist.
Approximately S$12,000,000, S$7,000,000 and S$646,400 of the Advances to Norwest Chemicals were
capitalised in December 2011, June 2012 and January 2013, respectively, and 12,000,000, 7,000,000
and 646,400 ordinary shares in the capital of Norwest Chemicals were issued to Eastcomm, respectively.
As at the Latest Practicable Date, we have made full repayment of all Advances. The Advances were
interest-free, unsecured, and had no xed term of repayment. Accordingly, the Advances were not made
on arms length basis or on normal commercial terms. We have since ceased such transactions and do
not intend to enter into similar transactions following our admission to Catalist.
191
INTERESTED PERSON TRANSACTIONS AND CONFLICTS OF INTEREST
Share issuance to Eastcomm
4,500,000 and 1,200,000 ordinary shares in the capital of Norwest Chemicals were issued to Eastcomm
in September 2012 and January 2013, respectively (the Share Issuances). The consideration paid
for the Share Issuances was approximately S$4,500,000 and S$1,200,000, respectively. The Share
Issuances were made for working capital purposes, and were not made on an arms length basis or on
normal commercial terms.
Security provided by Eastcomm
In December 2009, Eastcomm granted a charge to OCBC Bank over a xed deposit for the benet of
a credit facility extended by OCBC Bank (China) Limited to Mianzhu Norwest for its working capital
requirements. The said credit facility was fully repaid in March 2011 and the charge was released in June
2011. The principal amount outstanding under the credit facility for the Period Under Review were as
follows:
(S$000)
As at 31 December
As at 31
March 2013
Largest amount
outstanding up
to the Latest
Practicable Date 2010 2011 2012
Total principal
amount
outstanding 912 1,360
(1)
Note:
(1) Based on month-end balances.
As no fees were or will be paid to Eastcomm for the provision of this charge, our Directors are of the view
that this transaction was not carried out on an arms length basis or on normal commercial terms. We do
not intend to enter into similar transactions following our admission to Catalist.
PRESENT AND ON-GOING INTERESTED PERSON TRANSACTIONS
Deed of Indemnity
Dr. Ong Hian Eng (our Controlling Shareholder), Ong Kwee Eng (an Associate of Dr. Ong Hian Eng), and
our Key Executives Wang Xuebo and Chia Chin Hau have signed the Deed of Indemnity, under which
they have jointly and severally undertaken, inter alia, to indemnify and hold harmless our Group against
losses in connection with (i) certain land use rights which may be required in connection with Mianzhu
Norwests Mining Operations for a period of 18 months from the date of our admission to Catalist; (ii)
land use rights for Phase 2 Land; and (iii) the requisite licences, permits and approvals for Commercial
Chemical Production Operations on Phase 2 Land.
As no fees were paid or benets given to the above-mentioned individuals in connection with the Deed of
Indemnity, our Directors are of the view that this transaction was not carried out on an arms length basis
or on normal commercial terms.
Security provided by Eastcomm
As part of the security arrangement for an overdraft facility of S$1 million extended by OCBC Bank to the
Company for general working capital requirements, Eastcomm has granted a charge over its xed deposit
account in favour of OCBC Bank.
As no fees were paid to Eastcomm for the provision of this charge, our Directors are of the view that
this transaction was not carried out on an arms length basis or on normal commercial terms. We do not
intend to enter into similar transactions with Eastcomm following our admission to Catalist.
192
INTERESTED PERSON TRANSACTIONS AND CONFLICTS OF INTEREST
REVIEW PROCEDURES FOR FUTURE INTERESTED PERSON TRANSACTIONS
All future interested person transactions will be reviewed and approved in accordance with the threshold
limits set out under Chapter 9 of the Catalist Rules, to ensure that they are carried out on normal
commercial terms and are not prejudicial to our interests and the interests of our minority shareholders.
In the event that such interested person transactions require the approval of our Board and the Audit
Committee, relevant information will be submitted to the Board or the Audit Committee for review.
In the event that such Interested Person Transactions require the approval of shareholders, additional
information may be required to be presented to shareholders and an independent nancial adviser may
be appointed for an opinion.
To ensure that all future Interested Person Transactions are carried out on normal commercial terms and
will not be prejudicial to the interests of our Group or our minority Shareholders, the following procedures
will be implemented by our Group:
(a) in case of purchasing any products or engaging any services from an Interested Person, two (2)
other quotations from non-interested persons will be obtained for comparison to ensure that the
interests of Shareholders are not disadvantaged. The purchase price or fee for services shall not
be higher than the most competitive price or fee of the two (2) other quotations from non-interested
persons. In determining the most competitive price or fee, all pertinent factors, including but not
limited to quality, requirements, specications, delivery time and track record will be taken into
consideration;
(b) in case of selling any products or supplying any services to an Interested Person, the price or fee
and terms of two (2) other successful transactions of a similar nature with non-interested persons
shall be used as comparison to ensure that the interests of Shareholders are not disadvantaged.
The price or fee for the supply of products or services shall not be lower than the lowest price or
fee of the two (2) other successful transactions with non-Interested Persons;
(c) in case of renting properties from or to an Interested Person, appropriate steps will be taken to
ensure that such rent is matched with prevailing market rates, including adopting measures such
as making relevant enquiries with landlords of similar properties and obtaining suitable valuations,
reports or reviews published by property agents (where necessary). The rent payable shall
be based on the most competitive market rental rates of similar properties in terms of size and
location, based on the results of the relevant enquiries;
(d) in case of transactions which involve payments on a reimbursement basis, appropriate steps will
be taken to ensure that our Group determines on a monthly basis the relevant cost amounts to pay
based on objective documentation such as tax invoices;
(e) where it is not possible to compare against the terms of other transactions with unrelated third
parties and given that the products and/ or services may be purchased only from an Interested
Person, the Interested Person Transaction will be approved by any of our other Directors who has
no interest in the transaction, in accordance with our Groups usual business practices and policies.
In determining the transaction price payable to the Interested Person for such products and/ or
service, factors such as, but not limited to, quantity, requirements and specications will be taken
into account; and
(f) in addition, we shall monitor all Interested Person Transactions entered into by us and categorise
these transactions as follows:
(i) a Category 1 Interested Person Transaction is one where the value thereof is in excess of or
equal to three per cent. (3%) of the NTA of our Group; and
(ii) a Category 2 Interested Person Transaction is one where the value thereof is below three
per cent. (3%) of the NTA of our Group.
193
INTERESTED PERSON TRANSACTIONS AND CONFLICTS OF INTEREST
All Category 1 Interested Person Transactions must be approved by our Audit Committee prior to entry
whereas Category 2 Interested Person Transactions need not be approved by our Audit Committee prior
to entry but shall be reviewed on a quarterly basis by our Audit Committee.
Our Audit Committee will review all Interested Person Transactions, if any, on a quarterly basis to ensure
that they are carried out on normal commercial terms, are not prejudicial to the interests of our Group or
our minority Shareholders and in accordance with the procedures outlined above. It will take into account
all relevant non-quantitative factors. In the event that a member of our Audit Committee is interested in
any such transaction, he will abstain from participating in the review and approval process in relation to
that particular transaction.
Our Company shall prepare all the relevant information to assist our Audit Committee in its review and
will keep a register to record all Interested Person Transactions. The register shall also record the basis
for entry into the transactions, including the quotations and other evidence obtained to support such basis
and the procedures used to determine the terms of the transactions and whether the terms are normal
commercial terms and not prejudicial to the interests of our minority Shareholders.
Disclosure will be made in our Companys annual report of the aggregate value of Interested Person
Transactions during the nancial year under review.
In addition, our Audit Committee will include the review of Interested Person Transactions as part of
the standard procedures while examining the adequacy of our internal controls. Our Board will also
comply with the provisions in Chapter 9 of the Catalist Rules in respect of all future Interested Person
Transactions, and if required under the Catalist Rules, we will seek our Shareholders approval for such
transactions.
POTENTIAL CONFLICTS OF INTERESTS
In general, a conict of interest arises when any of our Directors, Controlling Shareholders or their
Associates is carrying on or has any interest in any other corporation carrying on the same business or
dealing in similar products or services as our Group. Save as disclosed below and in this section entitled
Interested Person Transactions and Conicts of Interests of this Offer Document, none of our Directors,
Controlling Shareholders, Key Executives and/ or any of their Associates has any material interest,
whether direct or indirect, in:
(a) any transactions to which our Company and our subsidiaries were or are a party;
(b) any company carrying on the same business or dealing in similar products or services as our
Group; and
(c) in any enterprise or company that is our customer or supplier of goods or services.
To the best of our knowledge, none of our Directors, Controlling Shareholders, Key Executives and/ or
any of their Associates are involved in the management of any company involved in a similar or related
business as our Group.
We also believe that any unforeseen potential conicts of interests arising in the future may be mitigated
as follows:
(a) our Directors have a duty to disclose their interests in respect of any contract, proposal,
transaction or any other matter whatsoever in which they have any personal material interest,
directly or indirectly, or any actual or potential conicts of interest (including conicts of interest
that arise from their directorship(s) or executive position(s) or personal investments in any other
corporation(s)) that may involve them. Upon such disclosure, such Directors shall not participate in
any proceedings of our board of Directors, and shall in any event abstain from voting in respect of
such contract, arrangement, proposal, transaction or matter in which the conict of interest arises,
unless and until our Audit Committee has determined that no such conict of interest exists;
194
INTERESTED PERSON TRANSACTIONS AND CONFLICTS OF INTEREST
(b) our Audit Committee is required to examine the internal guidelines and procedures put in place
by our Company to determine if such guidelines and procedures are sufcient to ensure that
interested person transactions are conducted on normal terms and will not be prejudicial to our
Group or our minority Shareholders;
(c) our Audit Committee will review any actual or potential conicts of interest that may involve our
Directors as disclosed by them to our board of Directors, and the exercise of Directors duciary
duties in this respect. Upon disclosure of an actual or potential conict of interests by a Director,
our Audit Committee will consider whether a conict of interests does in fact exist. A Director who
is a member of our Audit Committee will not participate in any proceedings of our Audit Committee
in relation to the review of a conict of interests relating to him. The review will include an
examination of the nature of the conict and such relevant supporting data, as our Audit Committee
may reasonably deem necessary;
(d) our Directors owe duciary duties to us, including the duty to act in good faith and in our interests;
and
(e) our Audit Committee will, following the listing of our Company on Catalist, undertake the following
additional responsibilities:
(i) review on a periodic basis the framework and processes established for the implementation
of the terms of the undertakings in order to ensure that such framework and processes
remain appropriate;
(ii) review and assess from time to time whether additional processes are required to be put
in place to manage any material conicts of interests and propose, where appropriate, the
relevant measures for the management of such conicts; and
(iii) review and resolve all conicts of interests referred to it.
Dr. Ong Hian Eng as a non-executive director in Hwa Hong
Our CEO and Executive Director, Dr. Ong Hian Eng, is currently a substantial shareholder of Hwa Hong,
and a non-executive director of Hwa Hong and certain subsidiaries of Hwa Hong. We believe that there
will be minimal conicts of interests, in terms of time commitment and business activities, arising from Dr.
Ong Hian Engs directorships and interests in both the Hwa Hong Group and our Group.
In terms of competing time commitments, as Dr. Ong Hian Eng is a non-executive director of Hwa Hong,
he will not be involved in the day-to-day operations of Hwa Hong. As such, our Board is of the opinion
that Dr. Ong Hian Eng will be able to adequately carry out his duties as an Executive Director of the
Company.
To the best of our knowledge, the principal business of the Hwa Hong Group is in property investments
and development, and it currently does not carry on the same business or deal in similar products or
services as our Group. Save as described in this section entitled Interested Person Transactions and
Conicts of Interest of this Offer Document, the Hwa Hong Group is also not a customer of, or supplier
to, our Group.
In the event that a conict of interests arises in the future, Dr. Ong Hian Eng will disclose his interests
to our Board and will abstain from participating in discussions involving, and voting on, matters in which
he may be interested, as well as maintaining the condentiality of such matters. If required by our Audit
Committee, Dr. Ong Hian Eng will step down as director of Hwa Hong.
In the event that our Group enters into transactions with the Hwa Hong Group in the future, our Audit
Committee will review all such transactions in accordance with the review procedures detailed in this
section entitled Interested Person Transactions and Conicts of Interest Review Procedures for Future
Interested Person Transactions of this Offer Document, and Dr. Ong Hian Eng, as a Board member, will
abstain from voting on deliberations by our Board relating to such transactions.
195
CLEARANCE AND SETTLEMENT
Upon listing and quotation on Catalist, our Shares will be traded under the book-entry settlement system
of CDP and all dealings in and transactions of the Shares through Catalist will be effected in accordance
with the terms and conditions for the operation of Securities Accounts with CDP, as amended from time to
time.
Our Shares will be registered in the name of CDP or its nominee and held by CDP for and on behalf
of persons who maintain, either directly or through depository agents, Securities Accounts with CDP.
Persons named as direct Securities Account holders and depository agents in the depository register
maintained by CDP, rather than CDP itself, will be treated, under our Articles of Association and the
Companies Act, as members of our Company in respect of the number of Shares credited to their
respective Securities Accounts.
Persons holding our Shares in a Securities Account with CDP may withdraw the number of Shares
they own from the book-entry settlement system in the form of physical share certicate(s). Such share
certicates will, however, not be valid for delivery pursuant to trades transacted on Catalist, although they
will be prima facie evidence of title and may be transferred in accordance with our Articles of Association.
A fee of S$10.00 for each withdrawal of 1,000 Shares or less and a fee of S$25.00 for each withdrawal
of more than 1,000 Shares is payable upon withdrawing our Shares from the book-entry settlement
system and obtaining physical share certicates. In addition, a fee of S$2.00 or such other amount as
our Directors may decide, is payable to the Share Registrar for each share certicate issued and a stamp
duty of S$10.00 is also payable where our Shares are withdrawn in the name of the person withdrawing
our Shares or S$0.20 per S$100.00 or part thereof of the last-transacted price where it is withdrawn
in the name of a third party. Persons holding physical share certicates who wish to trade on Catalist
must deposit with CDP their share certicates together with the duly executed and stamped instruments
of transfer in favour of CDP and have their respective Securities Accounts credited with the number of
Shares deposited before they can effect the desired trades. A deposit fee of S$10.00 is payable upon the
deposit of each instrument of transfer with CDP.
Transactions in our Shares under the book-entry settlement system will be reected by the sellers
Securities Account being debited with the number of Shares sold and the buyers Securities Account
being credited with the number of Shares acquired. No transfer stamp duty is currently payable for Shares
that are settled on a book-entry basis.
A Singapore clearing fee for trades in our Shares on Catalist is payable at the rate of 0.04% of the
transaction value subject to a maximum of S$600.00 per transaction. The clearing fee, instrument of
transfer, deposit fee and share withdrawal fee are subject to GST currently at seven per cent. (7.0%).
Dealings of our Shares will be carried out in S$ and will be effected for settlement through CDP on a
scripless basis. Settlement of trades on a normal ready basis on Catalist generally takes place on the
third Market Day following the transaction date and payment for the securities is generally settled on the
following business day. CDP holds securities on behalf of investors in Securities Accounts. An investor
may open a direct account with CDP or a sub-account with a CDP depository agent. The CDP depository
agent may be a member company of the SGX-ST, bank, merchant bank or trust company.
196
GENERAL AND STATUTORY INFORMATION
INFORMATION ON DIRECTORS AND KEY EXECUTIVES
1. Save as disclosed below, as at the date of this Offer Document, none of our Directors, Key
Executives or Controlling Shareholders has:
(a) at any time during the last ten (10) years, had an application or a petition under any
bankruptcy laws of any jurisdiction led against him or against a partnership of which he was
a partner at the time when he was a partner or at any time within two (2) years from the date
he ceased to be a partner;
(b) at any time during the last ten (10) years, had an application or a petition under any law of
any jurisdiction led against an entity (not being a partnership) of which he was a director or
an equivalent person or a key executive, at the time when he was a director or an equivalent
person or a key executive of that entity or at any time within two (2) years from the date
he ceased to be a director or an equivalent person or a key executive of that entity, for the
winding up or dissolution of that entity or, where that entity is the trustee of a business trust,
that business trust, on the ground of insolvency;
(c) any unsatised judgment against him;
(d) ever been convicted of any offence, in Singapore or elsewhere, involving fraud or dishonesty,
which is punishable with imprisonment, or has been the subject of any criminal proceedings
(including any pending criminal proceedings of which he is aware) for such purpose;
(e) ever been convicted of any offence, in Singapore or elsewhere, involving a breach of any law
or regulatory requirement that relates to the securities or futures industry in Singapore or
elsewhere, or been the subject of any criminal proceedings (including any pending criminal
proceedings of which he is aware) for such breach;
(f) at any time during the last ten (10) years, had judgment entered against him in any civil
proceedings in Singapore or elsewhere involving a breach of any law or regulatory
requirement that relates to the securities or futures industry in Singapore or elsewhere, or
a nding of fraud, misrepresentation or dishonesty on his part, or been the subject of any
civil proceedings (including any pending civil proceedings of which he is aware) involving an
allegation of fraud, misrepresentation or dishonesty on his part;
(g) ever been convicted in Singapore or elsewhere of any offence in connection with the
formation or management of any entity or business trust;
(h) ever been disqualied from acting as a director or an equivalent person of any entity
(including the trustee of a business trust), or from taking part directly or indirectly in the
management of any entity or business trust;
(i) ever been the subject of any order, judgment or ruling of any court, tribunal or governmental
body, permanently or temporarily enjoining him from engaging in any type of business
practice or activity;
(j) ever, to his knowledge, been concerned with the management or conduct, in Singapore or
elsewhere, of the affairs of:
(i) any corporation which has been investigated for a breach of any law or regulatory
requirement governing corporations in Singapore or elsewhere;
(ii) any entity (not being a corporation) which has been investigated for a breach of any
law or regulatory requirement governing such entities in Singapore or elsewhere;
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GENERAL AND STATUTORY INFORMATION
(iii) any business trust which has been investigated for a breach of any law or regulatory
requirement governing business trusts in Singapore or elsewhere; or
(iv) any entity or business trust which has been investigated for a breach of any law or
regulatory requirement that relates to the securities or futures industry in Singapore or
elsewhere,
in connection with any matter occurring or arising during the period when he was so
concerned with the entity or business trust; or
(k) been the subject of any current or past investigation or disciplinary proceedings, or has
been reprimanded or issued any warning, by the Authority or any other regulatory authority,
exchange, professional body or governmental agency, whether in Singapore or elsewhere.
Disclosure relating to our CEO and Executive Director, Dr. Ong Hian Eng
(a) Dr. Ong Hian Eng was on the board of directors of Norwest Holdings, an associated
company of the Hwa Hong Group, from 25 September 1996 to 9 January 2008. Norwest
Chemicals was incorporated as a wholly-owned subsidiary of Norwest Holdings.
In 2008, one of Norwest Holdings shareholders and its main creditor, HHEO (a subsidiary
of the Hwa Hong Group), applied for Norwest Holdings to be liquidated (the Winding Up
Order). For further details, please refer to the section entitled General Information on our
Group History of this Offer Document.
Prior to the Winding Up Order, Dr. Ong Hian Eng held 5.0%, and HHEO held 49.5%, of
the shareholding of Norwest Holdings. HHEO is in turn wholly-owned by Hwa Hong. Dr.
Ong Hian Eng is a director of HHEO and Hwa Hong. Dr. Ong Hian Eng also holds, directly
and indirectly, an aggregate of approximately 6.5% of the share capital of Hwa Hong, and
together with his immediate family, has an interest of more than 30% in the share capital of
Hwa Hong.
In May 2008, the liquidator of Norwest Holdings accepted an offer by Newport Mining
(now known as Aguia Resources Limited), a company listed on the Australian Securities
Exchange. However the acquisition by Newport Mining was not completed due to, inter alia,
the Wenchuan Earthquake. On 2 August 2008, HHEO acquired Norwest Chemicals via an
auction held by the liquidator of Norwest Holdings. On the same day, Eastcomm (which was
then wholly-owned by our CEO and Executive Director, Dr. Ong Hian Eng), acquired Norwest
Chemicals from HHEO.
(b) Dr. Ong Hian Eng was on the board of directors of Hwa Hong Capital (Pte) Limited (Hwa
Hong Capital), a wholly-owned subsidiary of Hwa Hong since 31 December 1993. As at 10
May 2012, Hwa Hong Capital had been dissolved pursuant to a members voluntary winding
up.
(c) Dr. Ong Hian Eng was a non-executive director on the board of directors of Tenet Insurance
Company Ltd (Tenet Insurance) from 18 February 2002 to 31 May 2010. Due to the
nature of business of Tenet Insurance, from time to time, Tenet Insurance was involved in
several litigation suits during Dr. Ong Hian Engs directorship tenure. These litigation suits
included suits relating to contract and insurance in the ordinary course of business of Tenet
Insurance.
(d) Dr. Ong Hian Eng was on the board of directors of 01-Labs.Com Pte Ltd (01-Labs) since
4 May 2000. As at 20 July 2004, 01-Labs had been dissolved pursuant to a members
voluntary winding up.
(e) Dr. Ong Hian Eng was a director of AsiaPhos Holdings Pte Ltd (AsiaPhos Holdings)
between 3 January 2012 and 5 June 2012. AsiaPhos Holdings was a dormant company and
was struck off due to inactivity on 5 June 2012.
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GENERAL AND STATUTORY INFORMATION
Disclosure relating to our CEO and Executive Director, Dr. Ong Hian Eng, Executive Director,
Simon Ong, and Non-Executive Director, Raymond Ong
Dr. Ong Hian Eng and Raymond Ong (alternate director to Ong Kwee Eng) were on the board of
directors, and Simon Ong was a joint liquidator in relation to the winding up, of the following family-
owned investment holding vehicles:
(a) Ong Holdings (Private) Limited (Ong Holdings)
Dr. Ong Hian Eng and Raymond Ong were appointed to the board of directors of Ong
Holdings since 17 August 1993 and 29 June 2001, respectively. Ong Holdings commenced
the members voluntary winding up process on 30 November 2010, and Simon Ong was
appointed as a joint liquidator of Ong Holdings on the same date. As at 30 October 2012,
Ong Holdings had been dissolved.
(b) Bee Tong Trading Company Private Limited (Bee Tong)
Dr. Ong Hian Eng and Raymond Ong were appointed to the board of directors of Bee Tong
since 17 August 1993 and 17 June 1999, respectively. Bee Tong commenced the members
voluntary winding up process on 30 November 2010 and Simon Ong was appointed as a
joint liquidator. As at 16 August 2012, Bee Tong had been dissolved.
(c) International Foundation Engineering Pte. Ltd. (IFE)
Dr. Ong Hian Eng and Raymond Ong were appointed to the board of directors of IFE since
17 August 1993 and 17 June 1999, respectively. IFE commenced the members voluntary
winding up process on 30 November 2010 and Simon Ong was appointed as a joint
liquidator. As of 16 August 2012, IFE had been dissolved.
Disclosure relating to our CEO and Executive Director, Dr. Ong Hian Eng, and Key
Executive, Wang Xuebo
(a) (Rizhao Oriental Peanut Food Co., Ltd.) (Rizhao Oriental) is a
PRC-incorporated company established as a joint venture between
(China Shandong National Cereals, Oils and Foodstuffs Import and Export Corporation)
and HHEO, each holding 51% and 49% equity interests in Rizhao Oriental, respectively. Dr.
Ong Hian Eng and Wang Xuebo were appointed as directors of Rizhao Oriental between
23 March 2000 and 15 May 2012 as representatives of HHEO and were not involved in the
day-to-day management of Rizhao Oriental. During the tenure of Dr. Ong Hian Engs and
Wang Xuebos directorships in Rizhao Oriental, Rizhao Oriental was involved in litigation
suits related to, inter alia, the settlement of certain outstanding debts. Dr. Ong Hian Eng and
Wang Xuebo did not assume any legal liability in respect of such debts and are not aware
of the outcome of the litigation suits. To the best of Dr. Ong Hian Engs and Wang Xuebos
knowledge, Rizhao Oriental has not been engaged in any business since 2008.
(b) (Jining Ningfeng Chemical Industry Co. Ltd.) (Jining Ningfeng)
is a PRC-incorporated company as a wholly-owned subsidiary of HHEO. In 2006, Jining
Ningfeng was involved in litigation suits relating to the settlement of outstanding debts
amounting to approximately RMB900,000. During the relevant period, Dr. Ong Hian Eng and
Wang Xuebo were directors of Jining Ningfeng as representatives of HHEO. Dr. Ong Hian
Eng was also its legal representative. Dr. Ong Hian Eng and Wang Xuebo did not assume
any legal liability in respect of such debts. Dr. Ong Hian Eng and Wang Xuebo are not aware
of the outcome of the litigation suits. To the best of Dr. Ong Hian Engs and Wang Xuebos
knowledge, Jining Ningfeng has not been engaged in any business since 2006.
Disclosure relating to our Independent Director, Hong Pian Tee
Hong Pian Tee was an independent director of Asia Food & Properties Limited (now known as
Sinarmas Land Limited) (AFP and collectively with its subsidiaries, the AFP Group) between
November 2001 and February 2006. To the best of Hong Pian Tees knowledge, prior to his
appointment as independent director of AFP, the AFP Group made deposits of approximately
S$239 million with related parties (the Deposits). To the best of Hong Pian Tees knowledge,
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GENERAL AND STATUTORY INFORMATION
the Commercial Affairs Department of Singapore (CAD) commenced investigations into AFP in
relation to the Deposits in December 2001 and ended the investigations in January 2004. Hong
Pian Tee was not involved in any way whatsoever on any matters related to the Deposits. In
addition, Hong Pian Tee was not involved in or called up for investigations by the CAD during the
period of investigations.
Disclosure relating to our Independent Director, Francis Lee
Francis Lee was an investment and project manager of AP Oil International Limited (AP Oil)
between June 2004 and June 2005. To the best of Francis Lees knowledge, the CAD commenced
investigations into certain insider trading transactions which occurred sometime in 2004 involving
certain directors of AP Oil. Francis Lee was called up to assist the CAD during the period of
investigations, and to the best of his knowledge was not the subject of the investigations.
General Disclosure relating to our Directors
Our Directors, other than Goh Yeow Tin and Francis Lee, have held directorships in companies
outside our Group which have committed statutory breaches relating to late ling of annual returns
with ACRA and late ling of appointments of ofcers with the relevant authorities at various times
in the past. Where penalties were imposed on these companies, they did not amount to more than
S$500 each.
General Disclosure relating to our Group
(a) In November 2010, Norwest Chemicals wrote to IRAS disclosing details of an inadvertent
omission to account for withholding tax on certain remuneration paid in 2009 to a non-
resident director (as required under Section 45B of the Income Tax Act, Chapter 134, of
Singapore) and voluntarily paid to IRAS the said tax as well as the penalty thereof. A one-
time penalty of not more than S$2,000 was paid. Our CEO and Executive Director, Dr. Ong
Hian Eng, Non-Executive Director, Raymond Ong and Key Executive, Chia Chin Hau, were
directors of Norwest Chemicals at the material time.

(b) Norwest Chemicals had been ned by ACRA in the past and had paid penalties ranging from
S$50 to S$500 for late ling of its annual returns with ACRA at various times in the past. Our
CEO and Executive Director, Dr. Ong Hian Eng and Non-Executive Director, Raymond Ong,
were directors of Norwest Chemicals at the material time.
2. There is no shareholding qualication for Directors under the Articles of Association of our
Company.
3. Save as disclosed in the section entitled Restructuring Exercise of this Offer Document, none of
our Directors are interested, directly or indirectly, in the promotion of, or in any property or assets
which have, within the two (2) years preceding the date of this Offer Document, been acquired
or disposed of by or leased to, our Company or any of our subsidiaries, or are proposed to be
acquired or disposed of by or leased to our Company or any of our subsidiaries.
4. No sum or benet has been paid or is agreed to be paid to any Director or expert, or to any rm in
which such Director or expert is a partner or any corporation in which such Director or expert holds
shares or debentures, in cash or shares or otherwise, by any person to induce him to become,
or to qualify him as, a Director, or otherwise for services rendered by him or by such rm or
corporation in connection with the promotion or formation of our Company.
5. Save as disclosed in the section entitled Management and Corporate Governance Service
Agreements of this Offer Document, there are no existing or proposed service contracts between
our Directors and our Company or any of our subsidiaries.
200
GENERAL AND STATUTORY INFORMATION
SHARE CAPITAL
6. As at the date of this Offer Document, there is only one (1) class of shares in the capital of our
Company. The rights and privileges attached to our Shares are stated in the Memorandum of
Association and Articles of Association of our Company. There are no founder, management or
deferred shares. Substantial Shareholders of our Company are not entitled to any different voting
rights from the other shareholders.
7. Except as disclosed in the sections entitled Share Capital and Shareholders and Restructuring
Exercise of this Offer Document, there were no changes in the issued and paid-up capital of the
Company and its subsidiaries (not including transfers) within the three (3) years preceding the
Latest Practicable Date.
8. Except as disclosed in the sections entitled Share Capital and Shareholders and Restructuring
Exercise of this Offer Document, no shares in, or debentures of, our Company or any of our
subsidiaries have been issued, or are proposed to be issued, as fully or partly paid for cash or for a
consideration other than cash, during the last three (3) years preceding the date of lodgment of this
Offer Document.
9. Except as disclosed in the sections entitled Restructuring Exercise and Dilution of this Offer
Document, no option to subscribe for Shares in, or debentures of, our Company or our subsidiaries
has been granted to, or was exercised by, any Director or Key Executive in the two (2) nancial
years preceding the date of this Offer Document.
10. Except as disclosed in the sections entitled Restructuring Exercise and Dilution of this Offer
Document, no person has been, or has the right to be, given an option to subscribe for or purchase
any securities of our Company or any of our subsidiaries.
11. Except as disclosed in the sections entitled Capitalisation and Indebtedness and Managements
Discussion and Analysis of Results of Operations and Financial Position Liquidity and
Capital Resources of this Offer Document, we have, as at the Latest Practicable Date, no other
borrowings or indebtedness in the nature of borrowings including bank overdrafts and liabilities
under acceptances (other than normal trading credits) or acceptances credits, mortgages, charges,
hire purchase commitments, guarantees or other material contingent liabilities.
MEMORANDUM AND ARTICLES OF ASSOCIATION
12. Our Company is registered in Singapore with ACRA with registration number 201200335G.
A summary of our Articles of Association relating to, inter alia, Directors powers to vote on
contracts in which they are interested, Directors remuneration, Directors borrowing powers,
Directors retirement, Directors share qualication, rights pertaining to shares, convening of general
meetings and alteration of capital are set out in Appendix D to this Offer Document. Our Articles
of Association are available for inspection at our registered ofce in accordance with paragraph 38
in the section entitled General and Statutory Information Documents Available for Inspection of
this Offer Document.
MATERIAL CONTRACTS
13. The dates of, parties to and general nature of the material contracts, not being contracts entered
into in the ordinary course of business, entered into by any member of our Group within two (2)
years preceding the date of lodgment of this Offer Document, and the amount of any consideration
passing to or from any member of our Group, as the case may be, under such contracts are as
follows:
(a) the contract for assignment of the state-owned construction land use right dated 18 October
2011 entered into between Mianzhu Norwest and the Mianzhu Land Bureau pursuant
to which Mianzhu Norwest shall be assigned the land use right for Phase 1 Land for an
aggregate consideration of approximately RMB 8,229,000;
201
GENERAL AND STATUTORY INFORMATION
(b) the contract for assignment of the state-owned construction land use right dated 6 January
2013 entered into between Mianzhu Norwest and the Mianzhu Land Bureau pursuant to
which Mianzhu Norwest shall be assigned the land use right for the Hanwang Land for an
aggregate consideration of approximately RMB 2,573,700;
(c) the Restructuring Agreement. Please refer to the section entitled Restructuring Exercise of
this Offer Document for further details;
(d) the Deed of Indemnity. Please refer to the section entitled Restructuring Exercise of this
Offer Document for further details; and
(e) the Service Agreements. Please refer to the section entitled Management and Corporate
Governance Service Agreements of this Offer Document for further details.
Save as disclosed above, our Group has not entered into any material contracts, not being
contracts entered into in the ordinary course of business, within the two (2) years preceding the
date of lodgment of this Offer Document.
LITIGATION
14. To the best of our knowledge and belief, having made all reasonable enquiries, neither we nor
any of our subsidiaries are engaged in any legal or arbitration proceedings, including those which
are pending or known to be contemplated, which may have, or which have had, in the 12 months
immediately preceding the date of lodgment of this Offer Document, a material effect on our
nancial position or protability.
Following the completion of the construction of the P
4
Plant in 2012, Mianzhu Norwest has been
engaged in discussions with (Sichuan Qian Kun Construction
Group Co., Ltd.) (Qian Kun), one of Mianzhu Norwests construction contractors, to determine
the aggregate amount payable by Mianzhu Norwest for certain construction works performed
and completed by Qian Kun (which includes works carried out pursuant to variation orders).
Arbitration proceedings commenced by Qian Kun were accepted by the (Deyang
Arbitration Commission) (DAC) on 27 August 2013, and a (notice to participate
in arbitration) was received by Mianzhu Norwest on 5 September 2013. Based on the
(settlement document) dated 5 September 2013 issued by the DAC, Qian Kun and Mianzhu
Norwest agreed that the aggregate amount payable for all construction works performed and
completed by Qian Kun would be RMB 35 million, and that as RMB 26 million had already
been paid by Mianzhu Norwest prior to the arbitration proceedings, Mianzhu Norwest would pay
the balance RMB 9 million as follows: (i) RMB 4.5 million before 29 January 2014, and (ii) RMB
4.5 million before 30 April 2014. The arbitration and related costs were stipulated in the
(settlement document) to be borne by Qian Kun. Mianzhu Norwest had, in its FY2012 and FP2013
accounts, made adequate provision for the payment of the aforesaid balance of RMB 9 million. Our
Directors are of the view that the payment(s) to, and dispute(s) with, Qian Kun do not and will not
have a material effect on the nancial position or protability of our Group.
15. From time to time, we are subject to personal injury claims by workers who were involved
in accidents at our worksite during the course of their work. Generally, such claims are settled
through our insurers pursuant to the workmen compensation scheme or pursuant to a claim under
the applicable PRC laws, rules and regulations.
202
GENERAL AND STATUTORY INFORMATION
MISCELLANEOUS
16. The details of our Groups subsidiaries are set out in the section entitled Our Group Structure of
this Offer Document.
17. There has been no previous issue of Shares by our Company or offer for sale of its Shares to the
public since its incorporation.
18. There has been no public take-over offer by a third party in respect of our Shares or by our
Company in respect of shares of another corporation or units of a business trust which has
occurred between the beginning of the most recent completed nancial year and the Latest
Practicable Date.
19. Save as disclosed in this Offer Document, as at the Latest Practicable Date, none of the properties
owned by our Company and our subsidiaries are encumbered.
20. Save as disclosed in this Offer Document, as at the Latest Practicable Date, our Directors are not
aware of any relevant material information including trading factors or risks which are unlikely to
be known or anticipated by the general public and which could materially affect the prots of our
Company and our subsidiaries.
21. Save as disclosed in this Offer Document, the nancial condition and operations of our Group are
not likely to be affected by any of the following:
(a) known trends or known demands, commitments, events or uncertainties that will result in or
are reasonably likely to result in our Groups liquidity increasing or decreasing in any material
way;
(b) material commitments for capital expenditures;
(c) unusual or infrequent events or transactions or any signicant economic changes or new
developments, which may materially affect the amount of reported income from operations;
and
(d) known trends, uncertainties, demands, commitments or events that are reasonably likely to
have a material effect on net sales or revenues, protability, liquidity or capital resources or
operating income or that would cause nancial information disclosed in the Offer Document
to be not necessarily indicative of the future operating results or nancial condition of our
Group.
22. Save as disclosed in this Offer Document, our Directors are not aware of any event which has
occurred since the end of FP2013 to the Latest Practicable Date which may have a material effect
on the nancial position and results of our Group or the nancial information provided in this Offer
Document.

23. In the opinion of our Directors, there are no minimum amounts which must be raised by the issue
of the New Shares. Although no minimum amount must be raised by the Invitation, such amounts
which are proposed to be provided out of the proceeds of the New Shares shall, in the event the
Invitation is cancelled and the proposed expansion plan proceeds, be provided out of the existing
banking facilities and/ or internal funds generated from operations.
203
GENERAL AND STATUTORY INFORMATION
24. The details, including name, address and professional qualications of the Auditors and Reporting
Accountants of our Company since incorporation are as follows:
Name and address Professional body
Partner-in-charge /
Professional qualication
Ernst & Young LLP
Public Accountants and
Chartered Accountants
One Rafes Quay
North Tower, Level 18
Singapore 048583
Institute of Singapore
Chartered Accountants
Ng Boon Heng (Chartered
Accountant, a member of the
Institute of Singapore Chartered
Accountants)
We currently have no intention of changing our auditors after the listing of our Company on Catalist.
INTERESTS OF EXPERTS AND UNDERWRITER
25. No expert is employed on a contingent basis by our Company or any of our subsidiaries, or has a
material interest, whether direct or indirect, in the shares of our Company or our subsidiaries, or
has a material economic interest, whether direct or indirect, in our Company including an interest in
the success of the Invitation.
26. In the reasonable opinion of our Directors, UOB, the Sponsor and Underwriter, does not have a
material relationship with our Group save as disclosed below:
(a) UOB has been appointed to sponsor and manage the Invitation and is the Underwriter of the
Invitation and as disclosed in the section entitled Management, Underwriting and Placement
Arrangements of this Offer Document;
(b) UOB has been appointed to be the continuing sponsor of our Company for an initial period
of three (3) years from the date our Company is admitted and listed on Catalist;
(c) UOB is the Receiving Bank of the Invitation; and
(d) UOB, its subsidiaries, associated companies and/ or its afliates (including UOB Kay
Hian Holdings Limited) (UOB Group of Companies) may, in the ordinary course of
business, extend credit facilities or engage in commercial banking, investment banking,
private banking, securities trading, asset and funds management, research, insurance
and/ or advisory services with any member of our Group, their respective afliates and/
or our Shareholders, and may receive a fee in respect thereof. In addition, in the ordinary
course of business, any member of the UOB Group of Companies may at any time offer
or provide services to or engage in any transactions (on its own account or otherwise) with
any member of our Group, their respective afliates, our Shareholders, or any other entity
or person, and may receive a fee in respect thereof. This may include but is not limited to,
holding long or short positions in securities issued by any member of our Group and their
respective afliates, and trading or otherwise effecting transactions, for its own account or
the accounts of its customers, in debt or equity (or related derivative instruments) of any
member of our Group and their respective afliates.
27. In the reasonable opinion of our Directors, Asiasons, the Placement Agent, does not have a
material relationship with our Group save that Asiasons is the Placement Agent for the Invitation
and as disclosed in the section entitled Management, Underwriting and Placement Arrangements
of this Offer Document.
204
GENERAL AND STATUTORY INFORMATION
28. Application monies received by our Company in respect of all successful applications will be placed
in a separate non-interest bearing account with UOB (the Receiving Bank). In the ordinary
course of business, the Receiving Bank will deploy these monies in the inter-bank money market.
All prots derived from the deployment of such monies will accrue to the Receiving Bank. Any
refund of all or part of the application monies to unsuccessful or partially successful applicants
will be made at the applicants own risk, without any interest or any share of revenue or any other
benet arising therefrom, and the applicants will not have any claim against us, the Vendors, the
Sponsor and Underwriter or the Placement Agent.
CONSENTS
29. The Independent Auditors and Reporting Accountants have given and have not withdrawn their
written consent to the issue of this Offer Document with the inclusion herein of the Independent
Auditors Report on the Audited Combined Financial Statements for the nancial years ended 31
December 2010, 2011 and 2012, the Independent Auditors Review Report on the Unaudited
Interim Condensed Combined Financial Statements for the three months period ended 31 March
2013 and the Independent Auditors Report on the Unaudited Pro Forma Combined Financial
Information for the nancial year ended 31 December 2012 and the three months period ended
31 March 2013 set out in Appendix A, Appendix B and Appendix C to this Offer Document,
respectively, in the form and context in which such reports are included, and with the inclusion
of its name and all reference thereto in the form and context in which they appear in the Offer
Document and to act in such capacity in relation to this Offer Document. The above reports were
prepared for the purpose of incorporation in this Offer Document.
30. King & Wood Mallesons, the Legal Advisers to our Company on PRC Law, has given and has not
withdrawn its written consent to the issue of this Offer Document, with the inclusion herein of its
name and all references thereto, and its opinions in relation to PRC law set out in the sections
entitled Risk Factors; Dividend Policy; General Information on our Group Mining Operations
approvals and permits; General Information on our Group Properties leased by our Group;
and General Information on our Group Legal Opinion from King & Wood Mallesons of this Offer
Document in the form and context in which they appear in this Offer Document, and to act in such
capacity in relation to this Offer Document. The above opinions were prepared for the purpose of
incorporation in this Offer Document.
31. WGM, the Independent Geologist, has given and has not withdrawn its written consent to the issue
of this Offer Document with the inclusion herein of its name and all references thereto and the
WGM Technical Report included in Appendix J to this Offer Document, in the form and context
in which they appear in this Offer Document and to act in such capacity in relation to this Offer
Document. The above report was prepared for the purpose of incorporation in this Offer Document.
32. JLLCAA, the Independent Valuer, has given and has not withdrawn its written consent to the issue
of this Offer Document with the inclusion herein of its name and all references thereto and the
Independent Valuation Report included in Appendix K to this Offer Document, in the form and
context in which they appear in this Offer Document and to act in such capacity in relation to this
Offer Document. The above report was prepared for the purpose of incorporation in this Offer
Document.
33. CRU, the Independent Market Consultant, has given and has not withdrawn its written consent to
the issue of this Offer Document with the inclusion herein of its name and all references thereto
and the CRU Industry Report included in Appendix L to this Offer Document, in the form and
context in which they appear in this Offer Document and to act in such capacity in relation to this
Offer Document. The above report was prepared for the purpose of incorporation in this Offer
Document.
34. UOB, the Sponsor and Underwriter, has given and has not withdrawn its written consent to the
issue of this Offer Document with the inclusion herein of its name and references thereto in the
form and context in which they appear in this Offer Document and to act in such capacity in relation
to this Offer Document.
205
GENERAL AND STATUTORY INFORMATION
35. Asiasons, the Placement Agent, has given and has not withdrawn its written consent to the issue
of this Offer Document with the inclusion herein of its name and references thereto in the form and
context in which it appears in this Offer Document and to act in such capacity in relation to this
Offer Document.
36. Each of the Solicitors to the Invitation, Solicitors to the Sponsor and Underwriter and the
Placement Agent, Legal Advisers to the Sponsor and Underwriter and the Placement Agent on
PRC Law, the Share Registrar and Share Transfer Agent, the Receiving Bank and the Principal
Banker does not make or purport to make any statement in this Offer Document or any statement
upon which a statement in this Offer Document is based and, to the maximum extent permitted by
law, expressly disclaims and takes no responsibility for any liability to any person which is based
on, or arises out of, the statements, information or opinions in this Offer Document.
RESPONSIBILITY STATEMENT BY OUR DIRECTORS AND VENDORS
37. The Directors and the Vendors collectively and individually accept full responsibility for the
accuracy of the information given in this Offer Document and conrm after making all reasonable
enquiries, that to the best of their knowledge and belief, this Offer Document constitutes full and
true disclosure of all material facts about the Invitation and our Group, and the Directors and
the Vendors are not aware of any facts the omission of which would make any statement in this
Offer Document misleading. Where information in this Offer Document has been extracted from
published or otherwise publicly available sources or obtained from a named source, the sole
responsibility of the Directors and the Vendors has been to ensure that such information has been
accurately and correctly extracted from those sources and/ or reproduced in this Offer Document in
its proper form and context.
DOCUMENTS AVAILABLE FOR INSPECTION
38. Copies of the following documents may be inspected at our registered ofce at 1 Robinson Road,
#17-00, AIA Tower, Singapore 048542, during normal business hours for a period of six (6) months
from the date of this Offer Document:
(a) the Memorandum and Articles of Association of our Company;
(b) the Audited Combined Financial Statements for the nancial years ended 31 December
2010, 2011 and 2012 set out in Appendix A to this Offer Document;
(c) the Unaudited Interim Condensed Combined Financial Statements for the three months
period ended 31 March 2013 set out in Appendix B to this Offer Document;
(d) the Unaudited Pro Forma Combined Financial Information for the nancial year ended 31
December 2012 and the three months period ended 31 March 2013 set out in Appendix C
to this Offer Document;
(e) the material contracts referred to in the section entitled General and Statutory Information
Material Contracts of this Offer Document;
(f) the audited nancial statements of our Company for the nancial period from 3 January 2012
(date of incorporation) to 31 December 2012 and Norwest Chemicals and its subsidiary for
the nancial years ended 31 December 2010, 2011 and 2012;
(g) the service agreements of the Directors referred to in the section entitled Management and
Corporate Governance Service Agreements of this Offer Document;
(h) the letters of consent referred to in the section entitled General and Statutory Information
Consents of this Offer Document;
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GENERAL AND STATUTORY INFORMATION
(i) the rules of the AsiaPhos Performance Share Plan set out in Appendix F to this Offer
Document;
(j) the WGM Technical Report set out in Appendix J to this Offer Document;
(k) the Independent Valuation Report set out in Appendix K to this Offer Document
(l) the CRU Industry Report as set out in Appendix L to this Offer Document; and
(m) the opinions in relation to PRC law from King & Wood Mallesons as set out in the sections
entitled Risk Factors; Dividend Policy; General Information on our Group Mining
Operations approvals and permits; General Information on our Group Properties leased
by our Group; and General Information on our Group Legal Opinion from King & Wood
Mallesons of this Offer Document.
A-1
APPENDIX A: AUDITED COMBINED FINANCIAL STATEMENTS FOR THE
FINANCIAL YEARS ENDED 31 DECEMBER 2010, 2011 AND 2012
Independent Auditors Report on
Audited Combined Financial Statements of
AsiaPhos Limited and its Subsidiaries
For the nancial years ended 31 December 2010, 2011 and 2012
25 September 2013
The Board of Directors
AsiaPhos Limited
Dear Sirs
Report on the Financial Statements
We have audited the accompanying nancial statements of AsiaPhos Limited (formerly known as
AsiaPhos Private Limited) (the Company) and its subsidiaries (collectively, the Group), comprising
the combined balance sheets as at 31 December 2010, 2011 and 2012, its combined statements of
comprehensive income, statements of changes in equity and statements of cash ows for each of the
years ended 31 December 2010, 2011 and 2012, and a summary of signicant accounting policies and
other explanatory notes, as set out on pages A-3 to A-58.
Managements Responsibility for the Financial Statements
The Companys management is responsible for the preparation and fair presentation of these combined
nancial statements in accordance with the provisions of Singapore Financial Reporting Standards, and
for devising and maintaining a system of internal accounting controls sufcient 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 prot and loss accounts and balance sheets and to maintain accountability of assets.
Auditors Responsibility
Our responsibility is to express an opinion on these combined nancial 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 combined nancial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the combined nancial statements. The procedures selected depend on the auditors judgment, including
the assessment of the risks of material misstatement of the combined nancial statements, whether due
to fraud or error. In making those risk assessments, the auditor considers internal control relevant to
the entitys preparation and fair presentation of combined nancial statements 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 entitys 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 combined nancial statements.
A-2
APPENDIX A: AUDITED COMBINED FINANCIAL STATEMENTS FOR THE
FINANCIAL YEARS ENDED 31 DECEMBER 2010, 2011 AND 2012
Independent Auditors Report on
Audited Combined Financial Statements of
AsiaPhos Limited and its Subsidiaries
For the nancial years ended 31 December 2010, 2011 and 2012
We believe that the audit evidence we have obtained is sufcient and appropriate to provide a basis for
our audit opinion.
Opinion
In our opinion, the abovementioned combined nancial statements of the Group present fairly, in
all material respects, the state of affairs of the Group as at 31 December 2010, 2011 and 2012 and
its results of operations, changes in equity and cash ows for each of the nancial years ended 31
December 2010, 2011 and 2012 in accordance with Singapore Financial Reporting Standards.
Restriction on Distribution and Use
This report is made solely to you as a body and for the inclusion in the Offer Document to be issued in
relation to the proposed listing of the shares of the Company in connection with the Companys listing on
the Singapore Exchange Securities Trading Limited.
ERNST & YOUNG LLP
Public Accountants and
Chartered Accountants
Singapore
Partner-in-charge: Ng Boon Heng
A-3
APPENDIX A: AUDITED COMBINED FINANCIAL STATEMENTS FOR THE
FINANCIAL YEARS ENDED 31 DECEMBER 2010, 2011 AND 2012
Combined Statements of Comprehensive Income
For the nancial years ended 31 December 2010, 2011 and 2012
Note 31 December
2010 2011 2012
$000 $000 $000
Revenue 5 2,775 4,522 4,897
Cost of sales (2,373) (2,148) (2,796)
Gross prot 402 2,374 2,101
Other income 6 981 2,535 3,538
Selling and distribution costs (426) (483) (227)
General and administrative costs (2,738) (1,484) (3,899)
Other operating income 627
Finance costs (52) (9) (4)
(Loss)/prot before tax 7 (1,206) 2,933 1,509
Taxation 8 28 (284)
(Loss)/prot for the year attributable to owners of
the Company (1,178) 2,933 1,225
Other comprehensive (loss)/income
Foreign currency translation (101) 535 (918)
Total comprehensive (loss)/income for the year
attributable to owners of the Company (1,279) 3,468 307
(Loss)/earnings per share (cents)
Basic 28 (0.17) 0.42 0.17
Adjusted 28 (0.15) 0.37 0.15
The accompanying accounting policies and explanatory notes form an integral part of the nancial
statements.
A-4
APPENDIX A: AUDITED COMBINED FINANCIAL STATEMENTS FOR THE
FINANCIAL YEARS ENDED 31 DECEMBER 2010, 2011 AND 2012
Combined Balance Sheets
As at 31 December 2010, 2011 and 2012
Note 31 December
2010 2011 2012
$000 $000 $000
Non-current assets
Mine properties 9 906 813 675
Land use rights 10 815 1,763 1,642
Property, plant and equipment 11 2,346 16,474 28,778
Prepayments 12 2,599 3,928 2,093
6,666 22,978 33,188
Current assets
Stocks 13 1,983 3,043 2,907
Trade receivables 14 183 198 137
Other receivables 15 165 380 1,750
Deferred expenses 16 308 343
Prepayments 17 291 313 492
Cash and bank balances 18 983 3,213 4,772
3,605 7,455 10,401
Total assets 10,271 30,433 43,589
Current liabilities
Trade payables 19 166 470 1,306
Other payables 20 4,548 8,036 10,172
Advances from customers 368 627 147
Amounts due to ultimate holding company 21 600 2,050 646
Interest-bearing bank loans 22 912
6,594 11,183 12,271
Net current liabilities (2,989) (3,728) (1,870)
The accompanying accounting policies and explanatory notes form an integral part of the nancial
statements.
A-5
APPENDIX A: AUDITED COMBINED FINANCIAL STATEMENTS FOR THE
FINANCIAL YEARS ENDED 31 DECEMBER 2010, 2011 AND 2012
Combined Balance Sheets (contd)
As at 31 December 2010, 2011 and 2012
Note 31 December
2010 2011 2012
$000 $000 $000
Non-current liabilities
Deferred tax liabilities 23 42 42 320
Deferred income 24 2,247 2,348 2,231
Provision for rehabilitation 25 54 58 158
2,343 2,448 2,709
Total liabilities 8,937 13,631 14,980
Net assets 1,334 16,802 28,609
Equity attributable to owners of the Company
Share capital 26 9,048 21,048 32,548
Reserves 27 (7,714) (4,246) (3,939)
Total equity 1,334 16,802 28,609
The accompanying accounting policies and explanatory notes form an integral part of the nancial
statements.
A-6
APPENDIX A: AUDITED COMBINED FINANCIAL STATEMENTS FOR THE
FINANCIAL YEARS ENDED 31 DECEMBER 2010, 2011 AND 2012
Combined Statements of Changes in Equity
For the nancial years ended 31 December 2010, 2011 and 2012
Group
Share
capital
Retained
earnings
Foreign
currency
translation
reserve
Safety
fund
surplus
reserve
Total
reserves
Total
Equity
$000 $000 $000 $000 $000 $000
1 January 2010 9,048 (8,012) 1,577 (6,435) 2,613
Loss for the year, net of tax (1,178) (1,178) (1,178)
Other comprehensive loss (101) (101) (101)
Total comprehensive loss for the year (1,178) (101) (1,279) (1,279)
At 31 December 2010 9,048 (9,190) 1,476 (7,714) 1,334
Prot for the year, net of tax 2,933 2,933 2,933
Other comprehensive income 535 535 535
Total comprehensive income for the year 2,933 535 3,468 3,468
Issue of new shares 12,000 12,000
At 31 December 2011 21,048 (6,257) 2,011 (4,246) 16,802
Prot for the year, net of tax 1,225 1,225 1,225
Other comprehensive income (918) (918) (918)
Total comprehensive income for the year 1,225 (918) 307 307
Issue of new shares 11,500 11,500
Others
Transfer to safety fund surplus reserve (46) 46
Utilisation of safety fund reserve 46 (46)
At 31 December 2012 32,548 (5,032) 1,093 (3,939) 28,609
The accompanying accounting policies and explanatory notes form an integral part of the nancial
statements.
A-7
APPENDIX A: AUDITED COMBINED FINANCIAL STATEMENTS FOR THE
FINANCIAL YEARS ENDED 31 DECEMBER 2010, 2011 AND 2012
Combined Statements of Cash Flow
For the nancial years ended 31 December 2010, 2011 and 2012
31 December
2010 2011 2012
$000 $000 $000
Cash ow from operating activities
(Loss)/prot before tax (1,206) 2,933 1,509
Adjustments for:
Depreciation of property, plant and equipment 83 175 275
Amortisation of mine properties and land use rights 155 134 164
Impairment loss on property, plant and equipment written back (633)
Interest on bank loans 52 7
Interest income (25) (9) (9)
Gain on disposal of property, plant and equipment (106) (2)
Gain on relocation (1,874) (3,471)
Unwinding of discount for provision for rehabilitation 2 4
Listing expenses 1,780
Operating (loss)/prot before working capital changes (1,574) 1,262 250
Decrease/(increase) in stocks 990 (922) (16)
Decrease/(increase) in receivables 1,364 (406) (303)
Increase/(decrease) in payables 81 (143) (1,531)
Cash generated from/(used in) operations 861 (209) (1,600)
Interest received 25 9 9
Interest paid (52) (7)
Tax paid (6)
Net cash ows generated from/(used in) operating activities 828 (207) (1,591)
The accompanying accounting policies and explanatory notes form an integral part of the nancial
statements.
A-8
APPENDIX A: AUDITED COMBINED FINANCIAL STATEMENTS FOR THE
FINANCIAL YEARS ENDED 31 DECEMBER 2010, 2011 AND 2012
Combined Statements of Cash Flow (contd)
For the nancial years ended 31 December 2010, 2011 and 2012
31 December
2010 2011 2012
$000 $000 $000
Cash ow from investing activities
Purchase of property, plant and equipment (a) (1,182) (10,302) (8,215)
Payment for mine properties (30)
Payments made in advance of:
- land use rights (2,312) (997) (509)
- property, plant and equipment (365) (1,828) (45)
Proceeds from disposal of property, plant and equipment 294 2
Compensation proceeds from government for relocation of factory 3,293 3,519
Incidental costs in relation to relocation (124) (479)
Net cash ows used in investing activities (3,859) (9,664) (5,757)
Cash ow from nancing activities
Repayment of bank loans (925) (905)
Proceeds from bank loans 1,361
Receipt of government grant 2,314
Amount due to ultimate holding company 300 1,450 (1,404)
Proceeds from issue of new shares 12,000 11,500
Payments incurred in relation to the initial public offering (242) (1,281)
Net cash ows generated from nancing activities 3,050 12,303 8,815
Net increase in cash and cash equivalents 19 2,432 1,467
Cash and cash equivalents at beginning of the year 839 824 3,047
Effects of exchange rate changes on cash and cash equivalents (34) (209) 99
Cash and cash equivalents at end of the year (Note 18) 824 3,047 4,613
The accompanying accounting policies and explanatory notes form an integral part of the nancial
statements.
A-9
APPENDIX A: AUDITED COMBINED FINANCIAL STATEMENTS FOR THE
FINANCIAL YEARS ENDED 31 DECEMBER 2010, 2011 AND 2012
Combined Statements of Cash Flow (contd)
For the nancial years ended 31 December 2010, 2011 and 2012
Notes to the combined statements of cash ow
(a) Purchase of property, plant and equipment
31 December
2010 2011 2012
$000 $000 $000
Current year additions (Note 11) 1,753 13,677 13,669
Less: Prepayments made in prior years (2,225)
Increase in payables related to property,
plant and equipment (516) (3,375) (4,133)
Provision for rehabilitation (55) (100)
Sale of samples produced when testing equipment 1,004
Net cash outow for purchase of property, plant and
equipment 1,182 10,302 8,215
The accompanying accounting policies and explanatory notes form an integral part of the nancial
statements.
A-10
APPENDIX A: AUDITED COMBINED FINANCIAL STATEMENTS FOR THE
FINANCIAL YEARS ENDED 31 DECEMBER 2010, 2011 AND 2012
Notes to the Combined Financial Statements - 31 December 2010, 2011 and 2012
1. Corporate information
AsiaPhos Limited (the Company) was incorporated in the Republic of Singapore on 3 January
2012 as a private company limited by shares under the name of AsiaPhos Private Limited. On
6 September 2013, the Company changed its name to AsiaPhos Limited in connection with its
conversion to a public company limited by shares. The Company was incorporated for the purpose
of acquiring the subsidiaries pursuant to the Restructuring Exercise as described in Note 2 to the
combined nancial statements.
The registered ofce and the principal place of business of the Company is located at 1 Robinson
Road, #17-00, AIA Tower, Singapore 048542 and 600 North Bridge Road, Parkview Square #12-
01, Singapore 188778 respectively.
The principal activity of the Company is that of investment holding. The principal activities of the
subsidiaries are disclosed in Note 2.1.
AsiaPhos Limited and its subsidiaries (collectively, the Group) operate in Singapore and the
Peoples Republic of China (PRC).
The ultimate holding company of the Group is Eastcomm Pte Ltd (Eastcomm), a company
incorporated in Singapore.
2. The Restructuring Exercise
Prior to the Restructuring Exercise, Eastcomm holds two subsidiaries (i.e. Norwest Chemicals Pte
Ltd (Norwest Chemicals) and Sichuan Mianzhu Norwest Phosphate Chemical Company Limited
(Mianzhu Norwest)). A Restructuring Exercise was carried out which resulted in the Company
being the holding company of Norwest Chemicals and Mianzhu Norwest.
The details of the Restructuring Exercise are as follows:
(a) Incorporation of the Company
The Company was incorporated in Singapore on 3 January 2012 in accordance with the
Companies Act as a private company limited by shares with an initial paid-up share capital
of S$2.00 comprising two (2) Shares held by Eastcomm.
(b) Acquisition of the entire issued and paid-up share capital of Norwest Chemicals
The Company entered into a restructuring agreement (the Restructuring Agreement) dated
19 June 2013 with Eastcomm to acquire the entire issued and paid-up share capital of
Norwest Chemicals for an aggregate purchase consideration of S$33,544,782, based on the
unaudited net asset value of Norwest Chemicals as at 30 April 2013.
A-11
APPENDIX A: AUDITED COMBINED FINANCIAL STATEMENTS FOR THE
FINANCIAL YEARS ENDED 31 DECEMBER 2010, 2011 AND 2012
Notes to the Combined Financial Statements - 31 December 2010, 2011 and 2012
2. The Restructuring Exercise (contd)
(b) Acquisition of the entire issued and paid-up share capital of Norwest Chemicals
(contd)
Pursuant to the Restructuring Agreement, the purchase consideration was satised by the
allotment and issuance of new ordinary shares in the Company (the Consideration Shares)
as follows:
(i) 16,000,000 Consideration Shares were allotted and issued to Eastcomm; and
(ii) the balance of the Consideration Shares (after the Share Split as further described in
Note 2(c) below) were allotted and issued as follows:
(a) 474,724,129 Consideration Shares to Eastcomm; and
(b) 163,675,863 Consideration Shares to the Noteholders (as further described in
Note 2(d) below).
(c) Sub-Division of Shares (the Share Split)
On 16 September 2013, 16,000,002 shares in the Company were sub-divided into
64,000,008 shares.
(d) Redemption of Notes in Eastcomm held by Noteholders
In 2010, 2012 and 2013, Eastcomm had entered into investment agreements and
supplemental letters, (the Investment Agreements), with various parties (the Noteholders).
On 16 September 2013, Eastcomm redeemed the Notes issued by Eastcomm to the
Noteholders.
In lieu of payment of cash, Eastcomm directed the Company to allot and issue 163,675,863
Consideration Shares to the Noteholders. These Consideration Shares were issued by the
Company as part of the consideration for the Companys acquisition of Norwest Chemicals
from Eastcomm.
A-12
APPENDIX A: AUDITED COMBINED FINANCIAL STATEMENTS FOR THE
FINANCIAL YEARS ENDED 31 DECEMBER 2010, 2011 AND 2012
Notes to the Combined Financial Statements - 31 December 2010, 2011 and 2012
2. The Restructuring Exercise (contd)
2.1 The Subsidiaries
The subsidiaries of the Company subsequent to the Restructuring Exercise are as follow:
Name of company
(Country of
registration)
Principal activity
(Place of business)
Effective ownership
held by the Group
subsequent to
the Restructuring
Exercise
Norwest Chemicals Pte Ltd
#

(Republic of Singapore)
Investing in chemical projects
general wholesale trade and
trading of chemicals
(Republic of Singapore)
100%
Held by Norwest Chemicals
Sichuan Mianzhu Norwest
Phosphate Chemical Company
Limited *
(Peoples Republic of China)
Exploration, mining and sale of
phosphate rocks, the production
and sale of phosphorus and
phosphate based chemical
products
(Peoples Republic of China)
100%
#
Audited by Ernst & Young LLP, Singapore
* Audited by Ernst & Young Hua Ming LLP, Chengdu Branch
For the nancial years ended 31 December 2010, 2011 and 2012, Eastcomm is the immediate
and ultimate holding company of Norwest Chemicals and Mianzhu Norwest is a wholly owned
subsidiary of Norwest Chemicals.
Although the Company was incorporated on 3 January 2012 and the Restructuring Exercise was
completed on 16 September 2013, the combined nancial statements presented for the years
ended 31 December 2010, 2011 and 2012 for the purpose of inclusion in the Offer Document
are that of the Company and its subsidiaries prepared in accordance with RAP 12 Merger
Accounting for Common Control Combinations for nancial statements prepared under Part IX of
the Fifth Schedule to the Securities and Futures (Offers of Investments) (Shares and Debentures)
Regulations 2005.
The substance is that the Group is a continuation of Norwest Chemicals and Mianzhu Norwest.
The combined nancial statements of the Group for the years ended 31 December 2010, 2011 and
2012 have been presented as if the Group had been in existence for all periods presented and the
assets and liabilities are brought into the combined nancial statements at the existing carrying
amounts. The retained earnings recognised in the combined nancial statements are the retained
earnings of Norwest Chemicals and Mianzhu Norwest as at 31 December 2010 and 2011 and the
retained earnings of the Company, Norwest Chemicals and Mianzhu Norwest as at 31 December
2012.
A-13
APPENDIX A: AUDITED COMBINED FINANCIAL STATEMENTS FOR THE
FINANCIAL YEARS ENDED 31 DECEMBER 2010, 2011 AND 2012
Notes to the Combined Financial Statements - 31 December 2010, 2011 and 2012
3. Summary of signicant accounting policies
3.1 Basis of preparation
The combined financial statements of the Group have been prepared in accordance with
Singapore Financial Reporting Standards (FRS).
The nancial statements have been prepared on a historical cost basis and are presented in
Singapore Dollar (SGD or $). All values in the tables are rounded to the nearest thousand ($000)
as indicated.
3.2 Fundamental accounting concept
As at 31 December 2012, the Groups current liabilities exceeded its current assets by
approximately $1,870,000 (2011: $3,728,000 and 2010: $2,989,000).
The directors have prepared the combined nancial statements on a going concern basis as the
directors are of the view that the Group will be able to generate net cash inows from its operating
activities for a period of 12 months from the date these nancial statements were approved.
Furthermore, subsequent to year end, the shareholder approved the capitalisation of amount due
to ultimate holding company amounting to $646,400 by way of issuance of 646,400 new ordinary
shares of $1 each in Norwest Chemicals and an additional capital injection of $1,200,000 by way of
issuance of 1,200,000 new ordinary shares of $1 each in Norwest Chemicals (Note 35).
3.3 Adoption of new accounting policies
The Group has adopted all the new and revised standards and interpretations of FRS (INT
FRS) that are effective for annual periods beginning on or after 1 January 2010, 2011 and 2012.
The adoption of these standards and interpretations did not have any effect on the nancial
performance or position of the Group.
3.4 Standards issued but not yet effective
The Group has not adopted the following standards and interpretations that have been issued but
are not yet effective:
Description
Effective for annual
periods beginning
on or after
Amendments to FRS 1 Presentation of Items of Other Comprehensive
Income 1 July 2012
Revised FRS 19 Employee Benets 1 January 2013
FRS 113 Fair Value Measurement 1 January 2013
Amendments to FRS 107 Disclosures Offsetting Financial Assets and
Financial Liabilities 1 January 2013
A-14
APPENDIX A: AUDITED COMBINED FINANCIAL STATEMENTS FOR THE
FINANCIAL YEARS ENDED 31 DECEMBER 2010, 2011 AND 2012
Notes to the Combined Financial Statements - 31 December 2010, 2011 and 2012
3. Summary of signicant accounting policies (contd)
3.4 Standards issued but not yet effective (contd)
Description
Effective for annual
periods beginning
on or after
Improvements to FRSs 2012 1 January 2013
- Amendment to FRS 1 Presentation of Financial Statements 1 January 2013
- Amendment to FRS 16 Property, Plant and Equipment 1 January 2013
- Amendment to FRS 32 Financial Instruments: Presentation 1 January 2013
Revised FRS 27 Separate Financial Statements 1 January 2014
Revised FRS 28 Investments in Associates and Joint Ventures 1 January 2014
FRS 110 Consolidated Financial Statements 1 January 2014
FRS 111 Joint Arrangements 1 January 2014
FRS 112 Disclosure of Interests in Other Entities 1 January 2014
Amendments to FRS 32 Offsetting Financial Assets and Financial Liabilities 1 January 2014
Amendments to FRS 110, FRS 111 and FRS 112 Transition Evidence 1 January 2014
Amendments to FRS 110, FRS 112 and FRS 27 Investment Entities 1 January 2014
Except for the Amendments to FRS 1 and FRS 112, the directors expect that the adoption of the
other standards and interpretations above will have no material impact on the nancial statements
in the period of initial application. The nature of the impending changes in accounting policy on
adoption of the Amendments to FRS 1 and FRS 112 are described below.
Amendments to FRS 1 Presentation of Items of Other Comprehensive Income
The Amendments to FRS 1 Presentation of Items of Other Comprehensive Income (OCI) is
effective for nancial periods beginning on or after 1 July 2012.
The Amendments to FRS 1 changes the grouping of items presented in OCI. Items that could
be reclassied to prot or loss at a future point in time would be presented separately from items
which will never be reclassied. As the Amendments only affect the presentations of items that
are already recognised in OCI, the Group does not expect any impact on its nancial position or
performance upon adoption of this standard.
FRS 112 Disclosure of Interests in Other Entities
FRS 112 Disclosure of Interests in Other Entities is effective for nancial periods beginning on or
after 1 January 2014.
FRS 112 is a new and comprehensive standard on disclosure requirements for all forms of
interests in other entities, including joint arrangements, associates, special purpose vehicles and
other off balance sheet vehicles. FRS 112 requires an entity to disclose information that helps
users of its nancial statements to evaluate the nature and risks associated with its interests in
other entities and the effects of those interests on its nancial statements. As this is a disclosure
standard, it will have no impact to the nancial position and nancial performance of the Group
when implemented in 2014.
A-15
APPENDIX A: AUDITED COMBINED FINANCIAL STATEMENTS FOR THE
FINANCIAL YEARS ENDED 31 DECEMBER 2010, 2011 AND 2012
Notes to the Combined Financial Statements - 31 December 2010, 2011 and 2012
3. Summary of signicant accounting policies (contd)
3.5 Basis of consolidation
The nancial statements of the subsidiaries used in the preparation of the nancial statements are
prepared for the same reporting date as the Company. Consistent accounting policies are applied
to like transactions and events in similar circumstances.
All intra-group balances, income and expenses and unrealised gains and losses resulting from
intra-group transactions and dividends are eliminated in full.
Subsidiaries are consolidated from the date of acquisition, being the date on which the Group
obtains control, and continue to be consolidated until the date that such control ceases.
Losses within a subsidiary are attributed to the non-controlling interest even if that results in a
decit balance.
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an
equity transaction. Where a change in interest of a subsidiary results in the loss of control over it,
the Group:
- De-recognises the assets (including goodwill) and liabilities of the subsidiary at their carrying
amounts at the date when control is lost;
- De-recognises the carrying amount of any non-controlling interest;
- De-recognises the cumulative translation differences recorded in equity;
- Recognises the fair value of the consideration received;
- Recognises the fair value of any investment retained;
- Recognises any surplus or decit in prot or loss;
- Re-classifies the Groups share of components previously recognised in other
comprehensive income to prot or loss or retained earnings, as appropriate.
The combined nancial statements of the Group for the years ended 31 December 2010, 2011 and
2012 have been presented as if the Group had been in existence for all periods presented and the
assets and liabilities are brought into the combined nancial statements at the existing carrying
amounts. The retained earnings recognised in the combined nancial statements are the retained
earnings of Norwest Chemicals and Mianzhu Norwest as at 31 December 2010 and 2011 and the
retained earnings of Norwest Chemicals, Mianzhu Norwest and the Company as at 31 December
2012.
Under this method, the Company has been treated as the holding company of Norwest Chemicals
and its subsidiary for the nancial years presented rather than from the date of completion of the
Restructuring Exercise. Accordingly, the combined results of the Group for the respective years
include the results of the subsidiaries for the entire years under review.
A-16
APPENDIX A: AUDITED COMBINED FINANCIAL STATEMENTS FOR THE
FINANCIAL YEARS ENDED 31 DECEMBER 2010, 2011 AND 2012
Notes to the Combined Financial Statements - 31 December 2010, 2011 and 2012
3. Summary of signicant accounting policies (contd)
3.5 Basis of consolidation (contd)
Pursuant to this,
- Assets, liabilities, reserves, revenue and expense of Norwest Chemicals and its subsidiary
are consolidated at their existing carrying amounts;
- No amount is recognised for goodwill; and
- For the purpose of the preparation of the combined nancial statements, the share capital
as at 31 December 2010 and 2011 represented the issued and paid up share capital of
Norwest Chemicals. The issued share capital as at 31 December 2012 represented the
share capital of the Company and Norwest Chemicals.
3.6 Functional and foreign currency
Items included in the nancial statements of each entity in the Group are measured using the
currency of the primary economic environment in which the entity operates (functional currency).
The Groups combined nancial statements are presented in Singapore Dollar which is also the
Companys functional currency.
(a) Foreign currency transactions and balances
Transactions in foreign currencies are measured in the respective functional currencies of
the Company and its subsidiaries and are recorded on initial recognition in the functional
currencies at exchange rates approximating those ruling at the transaction dates. Monetary
assets and liabilities denominated in foreign currencies are translated at the closing rate of
exchange ruling at the balance sheet date. Non-monetary items that are measured in terms
of historical cost in a foreign currency are translated using the exchange rates as at the
dates of the initial transactions. Non-monetary items measured at fair value in a foreign
currency are translated using the exchange rates at the date when the fair value was
determined.
Exchange differences arising on the settlement of monetary items or on translating monetary
items at the balance sheet date are recognised in the prot or loss except for exchange
differences arising on monetary items that form part of the Groups net investment in foreign
operations, which are recognised initially in other comprehensive income and accumulated
under foreign currency translation reserve in equity. The foreign currency translation reserve
is reclassied from equity to prot or loss of the Group on disposal of the foreign operation.
(b) Foreign currency translation
The assets and liabilities of foreign operations are translated into SGD at the rate of
exchange ruling at the balance sheet date and their statement of comprehensive income
are translated at average exchange rates for the year which approximate the exchange rates
prevailing at the date of the transactions. The exchange differences arising on the translation
are recognised initially in other comprehensive income and accumulated under foreign
currency translation reserve in equity. On disposal of a foreign operation, the cumulative
amount recognised in foreign currency translation reserve relating to that particular foreign
operation is recognised in the prot or loss.
In the case of a partial disposal without loss of control of a subsidiary that includes a foreign
operation, the proportionate share of the cumulative amount of the exchange differences are
re-attributed to non-controlling interest and are not recognised in prot or loss.
A-17
APPENDIX A: AUDITED COMBINED FINANCIAL STATEMENTS FOR THE
FINANCIAL YEARS ENDED 31 DECEMBER 2010, 2011 AND 2012
Notes to the Combined Financial Statements - 31 December 2010, 2011 and 2012
3. Summary of signicant accounting policies (contd)
3.7 Property, plant and equipment
All items of property, plant and equipment are initially recorded at cost. Such cost includes the cost
of purchase price or construction cost, any cost that is directly attributable to bringing the asset
to the location and condition necessary for it to be capable of operating in the manner intended
by the management and the initial estimate of the rehabilitation obligation. The direct attributable
costs include costs of testing whether the asset is functioning properly, after deducting the net
proceeds from selling any items produced while bringing the asset to that location and condition.
Cost also includes replacing part of the property, plant and equipment and borrowing costs that are
directly attributable to the acquisition, construction or production of a qualifying property, plant and
equipment. The cost of an item of property, plant and equipment is recognised as an asset if, and
only if, it is probable that future economic benets associated with the item will ow to the Group
and the cost of the item can be measured reliably.
Waste removal costs are incurred in the development phase of a mine before the production phase
commences. These costs are capitalised under mining infrastructure. Waste removal costs that
are incurred during the production phase are deferred for those operations where this is the most
appropriate basis for matching the cost against the related economic benets and the effect is
material. This is generally the case where there are uctuations in waste removal costs over the
life of the mine.
Subsequent to recognition, property, plant and equipment are measured at cost less accumulated
depreciation and accumulated impairment losses. When signicant parts of property, plant and
equipment are required to be replaced in intervals, the Group recognises such parts as individual
assets with specic useful lives and depreciation, respectively. Likewise, when a major inspection
is performed, its cost is recognised in the carrying amount of the property, plant and equipment as
a replacement if the recognition criteria are satised. All other repair and maintenance costs are
recognised in the prot or loss as incurred.
Depreciation of plant and machinery and waste removal costs is calculated to write off the costs
over their estimated useful life using the unit-of-production method.
Depreciation of property, plant and equipment, other than plant and machinery and waste removal
cost under mining infrastructure, begins when it is available for use and is computed on a straight-
line basis over the estimated useful life of the asset as follows:
Leasehold buildings - 5%
Motor vehicles, ofce equipment, mining infrastructure and leasehold improvements - 20%
Construction-in-progress included in property, plant and equipment are not depreciated as these
assets are not yet available for use.
The carrying values of property, plant and equipment are reviewed for impairment when events or
changes in circumstances indicate that the carrying value may not be recoverable.
The residual values, useful lives and depreciation methods are reviewed at each nancial year-end,
and adjusted prospectively, if appropriate.
An item of property, plant and equipment is derecognised upon disposal or when no future
economic benets are expected from its use or disposal. Any gain or loss on derecognition of the
asset is included in the prot or loss in the year the asset is derecognised.
A-18
APPENDIX A: AUDITED COMBINED FINANCIAL STATEMENTS FOR THE
FINANCIAL YEARS ENDED 31 DECEMBER 2010, 2011 AND 2012
Notes to the Combined Financial Statements - 31 December 2010, 2011 and 2012
3. Summary of signicant accounting policies (contd)
3.8 Exploration and evaluation expenditure
Pre-licence costs
Expenditure incurred prior to the obtainment of the exploration right is expensed in the period in
which they are incurred.
Successful efforts method
Once the legal right to explore has been acquired, costs that lead directly to the discovery,
acquisition or development of specic, discrete mineral reserves are capitalised and become
part of the capitalised costs of each individual exploration right. These costs include the cost of
acquiring exploration rights, topographical and geological surveys, exploratory drilling, sampling
and trenching and activities in relation to commercial and technical feasibility studies, and deferred
amortisation and depreciation charges in respect of assets consumed during the exploration
activities. Costs that fail to meet the criterion are charged to prot or loss as incurred.
When technical feasibility and commercial viability of extracting mineral resources are
demonstrable, exploration and evaluation assets are tested for impairment and transferred to mine
properties under the category of Mines under construction. No amortisation is charged during the
exploration and evaluation phase.
Impairment of exploration and evaluation assets
Exploration and evaluation assets are assessed for impairment, when fact and circumstances
indicate that the carrying amount of an exploration and evaluation assets may exceed its
recoverable amount. An impairment test is performed if any of the following indicators is present:
(a) The period for which the entity has the right to explore in the specic area has expired
during the period or will expire in the near future, and is not expected to be renewed;
(b) Substantive expenditure on further exploration for and evaluation of mineral resources in the
specic area is neither budgeted nor planned;
(c) Exploration for and evaluation of mineral resources in the specic area have not led to the
discovery of commercially viable quantities of mineral resources and the entity has decided
to discontinue such activities in the specic area; or
(d) Sufcient data exist to indicate that, although a development in the specic area is likely
to proceed, the carrying amount of the exploration and evaluation asset is unlikely to be
recovered in full from successful development or through sale.
An impairment loss is recognised for the amount by which the exploration and evaluation assets
carrying amount exceeds their recoverable amount. The recoverable amount is the higher
of the exploration and evaluation assets fair value less costs to sell and their value in use. For
the purposes of assessing impairment, the exploration and evaluation assets subject to testing
are grouped with existing cash-generating units of production elds that are located in the same
geographical region.
As at 31 December 2010, 2011 and 2012, there are no exploration and evaluation assets.
A-19
APPENDIX A: AUDITED COMBINED FINANCIAL STATEMENTS FOR THE
FINANCIAL YEARS ENDED 31 DECEMBER 2010, 2011 AND 2012
Notes to the Combined Financial Statements - 31 December 2010, 2011 and 2012
3. Summary of signicant accounting policies (contd)
3.9 Mine properties
Mine properties comprise of Mines under construction and Producing mines. Mine properties
which are acquired separately, are measured initially at cost. The cost of mine properties acquired
in a business combination is their fair value as at the date of acquisition. Mine properties are
written off to prot or loss if the mine is abandoned.
Mines under construction
Upon transfer of Exploration and evaluation assets into Mines under construction, all subsequent
expenditure on the construction of the mine, installation or completion of infrastructure facilities are
capitalised within Mines under construction. Development expenditure is net of proceeds from the
incidental sale of rocks extracted during the development phase. After production starts, all assets
included in Mines under construction are transferred to Producing mines.
Mines under construction are not depreciated until construction is completed.
As at 31 December 2010, 2011 and 2012, there are no mines under construction. All have been
transferred to Producing mines.
Producing mines
Upon completion of mine construction, the assets are transferred into Producing mines.
Producing mines are stated at cost, less accumulated amortisation and accumulated impairment
losses.
When a mine construction project moves into the production stage, the capitalisation of certain
mine construction costs ceases and costs are either regarded as part of the cost of inventory or
expensed, except for costs which qualify for capitalisation relating to mining asset additions or
improvements, underground mine development or mineable reserve development.
Producing mines are amortised over the unexpired period of the mining rights of 4 to 8 years on a
straight-line basis.
3.10 Land use rights
Land use rights are initially measured at cost. Following initial recognition, land use rights are
measured at cost less accumulated amortisation and accumulated impairment losses. The land
use rights are amortised over the Groups licensed tenure of 50 years.
A-20
APPENDIX A: AUDITED COMBINED FINANCIAL STATEMENTS FOR THE
FINANCIAL YEARS ENDED 31 DECEMBER 2010, 2011 AND 2012
Notes to the Combined Financial Statements - 31 December 2010, 2011 and 2012
3. Summary of signicant accounting policies (contd)
3.11 Impairment of non-nancial assets
The Group assesses at each reporting date whether there is an indication that an asset may be
impaired. If any such indication exists, or when annual impairment assessment for an asset is
required, the Group makes an estimate of the assets recoverable amount.
An assets recoverable amount is the higher of an assets or cash-generating units fair value less
costs to sell and its value in use and is determined for an individual asset, unless the asset does
not generate cash inows that are largely independent of those from other assets or group of
assets. Where the carrying amount of an asset or cash-generating unit exceeds its recoverable
amount, the asset is considered impaired and is written down to its recoverable amount. In
assessing value in use, the estimated future cash ows expected to be generated by the asset
are discounted to their present value using a pre-tax discount rate that reects current market
assessments of the time value of money and the risks specic to the asset. In determining fair
value less costs to sell, recent market transactions, if available, are taken into account. If no such
transactions can be identied, an appropriate valuation model is used. These calculations are
corroborated by valuation multiples or other available fair value indicators.
The Group bases its impairment calculation on detailed budgets and forecast calculations which
are prepared separately for each of the Groups cash-generating units to which the individual
assets are allocated. These budgets and forecast calculations generally cover a period of ve
years. For longer periods, a long-term growth rate is calculated and applied to project future cash
ows after the fth year.
Impairment losses are recognised in other operating costs in the combined statement of
comprehensive income.
For assets, an assessment is made at each reporting date as to whether there is any indication
that previously recognised impairment losses may no longer exist or may have decreased. If such
indication exists, the Group estimates the assets or cash-generating units recoverable amount. A
previously recognised impairment loss is reversed only if there has been a change in the estimates
used to determine the assets recoverable amount since the last impairment loss was recognised.
If that is the case, the carrying amount of the asset is increased to its recoverable amount. The
increase cannot exceed the carrying amount that would have been determined, net of depreciation,
had no impairment loss been recognised previously. Such reversal is recognised in prot or loss.
After such a reversal, the depreciation charge for the asset shall be adjusted in future periods to
allocate the assets revised carrying amount, less its residual value (if any), on a systematic basis
over its remaining useful life.
3.12 Subsidiaries
A subsidiary is an entity over which the Group has the power to govern the nancial and operating
policies so as to obtain benets from its activities. The Company generally has such power when
it, directly or indirectly, holds more than 50% of the issued share capital, or controls more than half
of the voting power, or controls the composition of the Board of Directors.
A-21
APPENDIX A: AUDITED COMBINED FINANCIAL STATEMENTS FOR THE
FINANCIAL YEARS ENDED 31 DECEMBER 2010, 2011 AND 2012
Notes to the Combined Financial Statements - 31 December 2010, 2011 and 2012
3. Summary of signicant accounting policies (contd)
3.13 Financial assets
Initial recognition and measurement
Financial assets are recognised on the balance sheet when, and only when, the Group becomes
a party to the contractual provisions of the nancial instrument. The Group determines the
classication of its nancial assets at initial recognition.
When nancial assets are recognised initially, they are measured at fair value, plus, in the case of
nancial assets not at fair value through prot or loss, directly attributable transaction costs.
Subsequent measurement for loans and receivables
Non-derivative nancial assets with xed or determinable payments that are not quoted in an
active market are classied as loans and receivables. Subsequent to initial recognition, loans and
receivables are measured at amortised cost using the effective interest method, less impairment.
Gains and losses are recognised in the prot or loss when the loans and receivables are
derecognised or impaired, as well as through the amortisation process.
Derecognition
A nancial asset is derecognised where the contractual right to receive cash ows from the asset
has expired. On derecognition of a nancial asset in its entirety, the difference between the
carrying amount and the sum of the consideration received and any cumulative gain or loss that
had been recognised in other comprehensive income is recognised in prot or loss.
All regular way purchases and sales of nancial assets are recognised or derecognised on the
trade date i.e., the date that the Group commits to purchase or sell the asset. Regular way
purchases or sales are purchases or sales of nancial assets that require delivery of assets within
the period generally established by regulation or convention in the marketplace concerned.
3.14 Impairment of nancial assets
The Group assesses at each balance sheet date whether there is any objective evidence that a
nancial asset is impaired.
Financial assets carried at amortised cost
For nancial assets carried at amortised cost, the Group rst assesses whether objective evidence
of impairment exists individually for nancial assets that are individually signicant, or collectively
for nancial assets that are not individually signicant. If the Group determines that no objective
evidence of impairment exists for an individually assessed nancial asset, whether signicant or
not, it includes the asset in a group of nancial assets with similar credit risk characteristics and
collectively assesses them for impairment. Assets that are individually assessed for impairment
and for which an impairment loss is, or continues to be recognised are not included in a collective
assessment of impairment.
If there is objective evidence that an impairment loss on nancial assets carried at amortised cost
has incurred, the amount of the loss is measured as the difference between the assets carrying
amount and the present value of estimated future cash ows discounted at the nancial assets
original effective interest rate. If a loan has a variable interest rate, the discount rate for measuring
any impairment loss is the current effective interest rate. The carrying amount of the asset is
reduced through the use of an allowance account. The impairment loss is recognised in the prot
or loss.
A-22
APPENDIX A: AUDITED COMBINED FINANCIAL STATEMENTS FOR THE
FINANCIAL YEARS ENDED 31 DECEMBER 2010, 2011 AND 2012
Notes to the Combined Financial Statements - 31 December 2010, 2011 and 2012
3. Summary of signicant accounting policies (contd)
3.14 Impairment of nancial assets (contd)
Financial assets carried at amortised cost (contd)
When the asset becomes uncollectible, the carrying amount of impaired nancial assets is reduced
directly or if an amount was charged to the allowance account, the amounts charged to the
allowance account are written off against the carrying value of the nancial asset.
To determine whether there is objective evidence that an impairment loss on nancial assets has
been incurred, the Group considers factors such as the probability of insolvency or signicant
nancial difculties of the debtor and default or signicant delay in payments.
If, in a subsequent period, the amount of the impairment loss decreases and the decrease can
be related objectively to an event occurring after the impairment was recognised, the previously
recognised impairment loss is reversed to the extent that the carrying amount of the asset does not
exceed its amortised cost at the reversal date. The amount of reversal is recognised in the prot or
loss.
3.15 Cash and cash equivalents
Cash and cash equivalents comprise cash on hand, cash at bank and xed deposits which are
subjected to an insignicant risk of changes in value. Cash and cash equivalents exclude pledged
deposits held for mine activities.
3.16 Stocks
Stocks are stated at the lower of cost and net realisable value. Costs incurred in bringing the
stocks to their present location and condition are accounted for as follows:-
- Raw materials: purchase costs and other directly attributable costs, on a weighted average
basis.
- Finished goods: costs include direct material, mining processing, direct labour and an
appropriate proportionate of variable and xed overhead costs. These costs are assigned on
a weighted average basis.
Where necessary, allowance is provided for damaged, obsolete and slow moving items to adjust
the carrying value of stocks to the lower of cost and net realisable value.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated
costs of completion and the estimated costs necessary to make the sale.
3.17 Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a
result of a past event, it is probable that an outow of resources embodying economic benets will
be required to settle the obligation and the amount of the obligation can be estimated reliably.
A-23
APPENDIX A: AUDITED COMBINED FINANCIAL STATEMENTS FOR THE
FINANCIAL YEARS ENDED 31 DECEMBER 2010, 2011 AND 2012
Notes to the Combined Financial Statements - 31 December 2010, 2011 and 2012
3. Summary of signicant accounting policies (contd)
3.17 Provisions (contd)
Provisions are reviewed at each balance sheet date and adjusted to reect the current best
estimate. If it is no longer probable that an outow of economic resources will be required to
settle the obligation, the provision is reversed. If the effect of the time value of money is material,
provisions are discounted using a current pre tax rate that reects, where appropriate, the risks
specic to the liability. When discounting is used, the increase in the provision due to the passage
of time is recognised as a nance cost.
The Group records the present value of estimated costs of legal and constructive obligations
required to restore mining location in the period in which the obligation is incurred. The nature of
these restoration activities includes dismantling and removing structures, rehabilitating mines and
dismantling operating facilities, closure of plant and waste sites, and restoration, reclamation and
re-vegetation of affected areas.
The obligation generally arises when the asset is installed or the ground environment is disturbed
at the mining location. The Group estimates its liabilities for nal rehabilitation and mine closure
based on calculations of the amount and timing of the future cash expenditure to perform the
required work. Spending estimates are escalated for ination, then discounted at a discount rate
that reects current market assessments of the time value of money and the risks specic to the
liability such that the amount of provision reects the present value of the expenditures expected
to be required to settle the obligation. When the liability is initially recognised, the present value
of the estimated cost is capitalised by increasing the carrying amount of the related mining
infrastructure. Over time, the discounted liability is increased for the change in present value based
on the appropriate discount rate. The periodic unwinding of the discount is recognised within
nance costs in the prot or loss. The asset is depreciated using the straight line method over its
expected life and the liability is accreted to the projected expenditure date.
Additional disturbances or changes in estimates (such as mine plan revisions, changes in
estimated costs, or changes in timing of the performance of reclamation activities) will be
recognised as additions or charges to the corresponding assets and rehabilitation liabilities when
they occur at the appropriate discount rate. Any reduction in the rehabilitation liability and therefore
any deduction from the asset to which it relates, may not exceed the carrying value of that asset. If
it does, any excess over the carrying value is taken immediately to prot and loss.
3.18 Government grants
Government grants are recognised at their fair value when there is reasonable assurance that the
grant will be received and all attached conditions will be complied with. Where the grant relates
to an asset, the fair value is recognised as deferred income grant on the balance sheet and is
amortised in the prot or loss on a systematic and rational basis over the useful life of the relevant
asset. When the grant relates to income, it is recognised in the prot or loss on a systematic basis
over the periods in which the entity recognises the related costs as expenses for which the grant is
intended to compensate. Grants related to income are deducted in reporting the related expenses
in prot or loss.
A-24
APPENDIX A: AUDITED COMBINED FINANCIAL STATEMENTS FOR THE
FINANCIAL YEARS ENDED 31 DECEMBER 2010, 2011 AND 2012
Notes to the Combined Financial Statements - 31 December 2010, 2011 and 2012
3. Summary of signicant accounting policies (contd)
3.19 Financial liabilities
Initial recognition and measurement
Financial liabilities are recognised on the balance sheet when, and only when, the Group becomes
a party to the contractual provisions of the nancial instrument. The Group determines the
classication of its nancial liabilities at initial recognition.
All nancial liabilities are recognised initially at fair value and in the case of other nancial liabilities,
plus directly attributable transaction costs.
Subsequent measurement
After initial recognition, nancial liabilities, other than the nancial liabilities measured at fair value
through prot or loss, are subsequently measured at amortised cost using the effective interest
method. Gains and losses are recognised in prot or loss when the liabilities are derecognised,
and through the amortisation process.
Derecognition
A nancial liability is derecognised when the obligation under the liability is discharged or cancelled
or expires. When an existing nancial liability is replaced by another from the same lender on
substantially different terms, or the terms of an existing liability are substantially modied, such an
exchange or modication is treated as a derecognition of the original liability and the recognition of
a new liability, and the difference in the respective carrying amounts is recognised in the prot or
loss.
3.20 Borrowing costs
Borrowing costs are capitalised as part of the cost of a qualifying asset if they are directly
attributable to the acquisition, construction or production of that asset. Capitalisation of borrowing
costs commences when the activities to prepare the asset for its intended use or sale are in
progress and the expenditures and borrowing costs are incurred. Borrowing costs are capitalised
until the assets are substantially completed for their intended use or sale. All other borrowing costs
are expensed in the period they occur. Borrowing costs consist of interest and other costs that an
entity incurs in connection with the borrowing of funds.
3.21 Employee benets
Dened contribution plan
The Group participates in the national pension schemes as dened by the laws of the countries in
which it has operations. In particular, the Singapore companies in the Group make contributions
to the Central Provident Fund scheme in Singapore, a dened contribution pension scheme.
Contributions to dened contribution pension schemes are recognised as an expense in the period
in which the related service is performed.
The employees of the subsidiary in Peoples Republic of China are required to participate in a
dened contribution retirement scheme. The subsidiary is required to make contributions to a local
social security bureau and housing fund management bureau at a rate of 20% and 5% respectively
of the employees salaries, and charge to the prot or loss as incurred. The Group has no further
obligations for payment of pension benets beyond the annual contributions to the local social
security bureau.
A-25
APPENDIX A: AUDITED COMBINED FINANCIAL STATEMENTS FOR THE
FINANCIAL YEARS ENDED 31 DECEMBER 2010, 2011 AND 2012
Notes to the Combined Financial Statements - 31 December 2010, 2011 and 2012
3. Summary of signicant accounting policies (contd)
3.21 Employee benets (contd)
Employee leave entitlement
Employee entitlements to annual leave are recognised as a liability when they accrue to the
employees. The estimated liability for leave is recognised for services rendered by employees up
to the balance sheet date.
3.22 Leases
The determination of whether an arrangement is, or contains a lease is based on the substance of
the arrangement at inception date: whether fullment of the arrangement is dependent on the use
of a specic asset or assets or the arrangement conveys a right to use the asset, even if that right
is not explicitly specied in an arrangement.
As lessee
Operating lease payments are recognised as an expense in the prot or loss on a straight-line
basis over the lease term. The aggregate benet of incentives provided by the lessor is recognised
as a reduction of rental expense over the lease term on a straight-line basis.
3.23 Revenue recognition
Revenue is recognised to the extent that it is probable that the economic benets will ow to
the Group and the revenue can be reliably measured regardless of when the payment is made.
Revenue is measured at the fair value of consideration received or receivable, taking into account
contractually dened terms of payment, excluding discounts, rebates, and sales taxes or duty. The
Group assesses its revenue arrangements to determine if it is acting as principal or agent. The
Group has concluded that it is acting as a principal in all of its revenue arrangements.
(i) Sale of goods
Revenue from sale of goods is recognised upon the transfer of signicant risks and rewards
of ownership of the goods to the customer, which generally coincides with delivery and
acceptance of the goods sold. Revenue is not recognised to the extent where there are
signicant uncertainties regarding recovery of the consideration due, associated costs or the
possible return of goods.
(ii) Interest income
Interest income is recognised using the effective interest method.
A-26
APPENDIX A: AUDITED COMBINED FINANCIAL STATEMENTS FOR THE
FINANCIAL YEARS ENDED 31 DECEMBER 2010, 2011 AND 2012
Notes to the Combined Financial Statements - 31 December 2010, 2011 and 2012
3. Summary of signicant accounting policies (contd)
3.24 Taxes
(a) Current income tax
Current income tax assets and liabilities for the current and prior periods are measured
at the amount expected to be recovered from or paid to the taxation authorities. The tax
rates and tax laws used to compute the amount are those that are enacted or substantively
enacted by the balance sheet date, in the countries where the Group operates and
generates taxable income.
Current income taxes are recognised in the prot or loss except to the extent that the tax
relates to items recognised outside the prot or loss, either in other comprehensive income
or directly in equity. Management periodically evaluates positions taken in the tax returns
with respect to situations in which applicable tax regulations are subject to interpretation and
establishes provisions where appropriate.
(b) Deferred tax
Deferred tax is provided using the liability method on temporary differences at the balance
sheet date between the tax bases of assets and liabilities and their carrying amounts for
nancial reporting purposes.
Deferred tax liabilities are recognised for all temporary differences, except:
- where the deferred income tax liability arises from the initial recognition of goodwill or
of an asset or liability in a transaction that is not a business combination and, at the
time of the transaction, affects neither the accounting prot nor taxable prot or loss;
and
- in respect of taxable temporary differences associated with investments in
subsidiaries, where the timing of the reversal of the temporary differences can be
controlled and it is probable that the temporary differences will not reverse in the
foreseeable future.
Deferred tax assets are recognised for all deductible temporary differences, carry forward of
unused tax credits and unused tax losses, to the extent that it is probable that taxable prot
will be available against which the deductible temporary differences, and the carry forward of
unused tax credits and unused tax losses can be utilised except:
- where the deferred tax asset relating to the deductible temporary difference arises
from the initial recognition of an asset or liability in a transaction that is not a business
combination and, at the time of the transaction, affects neither the accounting prot
nor taxable prot or loss; and
- in respect of deductible temporary differences associated with investments in
subsidiaries, deferred tax assets are recognised only to the extent that it is probable
that the temporary differences will reverse in the foreseeable future and taxable prot
will be available against which the temporary differences can be utilised.
A-27
APPENDIX A: AUDITED COMBINED FINANCIAL STATEMENTS FOR THE
FINANCIAL YEARS ENDED 31 DECEMBER 2010, 2011 AND 2012
Notes to the Combined Financial Statements - 31 December 2010, 2011 and 2012
3. Summary of signicant accounting policies (contd)
3.24 Taxes (contd)
(b) Deferred tax (contd)
The carrying amount of deferred tax assets is reviewed at each balance sheet date and
reduced to the extent that it is no longer probable that sufcient taxable prot will be
available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred
tax assets are reassessed at each balance sheet date and are recognised to the extent
that it has become probable that future taxable prot will allow the deferred tax asset to be
utilised.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply
in the year when the asset is realised or the liability is settled, based on tax rates (and tax
laws) that have been enacted or substantively enacted at the balance sheet date.
Deferred tax relating to items recognised outside prot or loss is recognised outside prot or
loss. Deferred tax items are recognised in correlation to the underlying transaction either in
other comprehensive income or directly in equity and deferred tax arising from a business
combination is adjusted against goodwill on acquisition.
Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists
to set off current tax assets against current income tax liabilities and the deferred taxes
relate to the same taxable entity and the same taxation authority.
(c) Sales tax
Revenues, expenses and assets are recognised net of the amount of sales tax except:
Where the sales tax incurred on a purchase of assets or services is not recoverable
from the taxation authority, in which case the sales tax is recognised as part of the
cost of acquisition of the asset or as part of the expense item as applicable; and
Receivables and payables that are stated with the amount of sales tax included.
The net amount of sales tax recoverable from, or payable to, the taxation authority is
included as part of receivables or payables in the balance sheet.
3.25 Segment reporting
For management purposes, the Group is organised into operating segments based on their
products. The management of the Group regularly reviews the segment results in order to allocate
resources to the segments and to assess the segment performance. Additional disclosures on
each of these segments are shown in Note 29, including the factors used to identify the reportable
segments and the measurement basis of segment information.
A-28
APPENDIX A: AUDITED COMBINED FINANCIAL STATEMENTS FOR THE
FINANCIAL YEARS ENDED 31 DECEMBER 2010, 2011 AND 2012
Notes to the Combined Financial Statements - 31 December 2010, 2011 and 2012
3. Summary of signicant accounting policies (contd)
3.26 Contingencies
A contingent liability is:
(a) a possible obligation that arises from past events and whose existence will be conrmed
only by the occurrence or non-occurrence of uncertain future event(s) not wholly within the
control of the Group; or
(b) a present obligation that arises from past events but is not recognised because:
(i) it is not probable that an outow of resources embodying economic benets will be
required to settle the obligation; or
(ii) the amount of obligation cannot be measured with sufcient reliability.
A contingent asset is a possible asset that arises from past events and whose existence will be
conrmed only by the occurrence or non-occurrence of one or more uncertain future events not
wholly within the control of the Group.
3.27 Related parties
A related party is dened as follows:
(a) A person or a close member of that persons family is related to the Group and Company if
that person:
(i) Has control or joint control over the Company;
(ii) Has signicant inuence over the Company; or
(iii) Is a member of the key management personnel of the Group or Company or of a
parent of the Company.
(b) An entity is related to the Group and the Company if any of the following conditions applies:
(i) The entity and the Company are members of the same group (which means that each
parent, subsidiary and fellow subsidiary is related to others);
(ii) One entity is an associate or joint venture of the other entity (or an associate or joint
venture of a member of a group of which the other entity is a member);
(iii) Both entities are joint ventures of the same third party;
(iv) One entity is a joint venture of a third entity and the other entity is an associate of the
third entity;
(v) The entity is a post employment benet plan for the benet of employees of either the
Company or an entity related to the Company. If the Company is itself such a plan, the
sponsoring employers are also related to the Company;
A-29
APPENDIX A: AUDITED COMBINED FINANCIAL STATEMENTS FOR THE
FINANCIAL YEARS ENDED 31 DECEMBER 2010, 2011 AND 2012
Notes to the Combined Financial Statements - 31 December 2010, 2011 and 2012
3. Summary of signicant accounting policies (contd)
3.27 Related parties (contd)
(vi) The entity is controlled or jointly controlled by a person identied in (a); or
(vii) A person identied in (a)(i) has signicant inuence over the entity or is a member of
the key management personnel of the entity (or of a parent of the entity).
3.28 Share capital and share issuance expenses
Proceeds from issuance of ordinary shares are recognised as share capital in equity. Incremental
costs directly attributable to the issuance of ordinary shares are deducted against share capital.
4. Signicant accounting estimates and judgements
The preparation of the Groups nancial statements requires management to make judgements,
estimates and assumptions that affect the reported amounts of revenue, expenses, assets
and liabilities, and the disclosure of contingent liabilities at the balance sheet date. However,
uncertainty about these assumptions and estimates could result in outcomes that could require a
material adjustment to the carrying amount of the asset or liability affected in the future periods.
4.1 Judgements made in applying accounting policies
In the process of applying the Groups accounting policies, management has made the following
judgements, apart from those involving estimations, which has the most signicant effect on the
amounts recognised in the nancial statements:
Determination of functional currency
The Group measures foreign currency transactions in the respective functional currencies of the
Company and its subsidiaries. In determining the functional currencies of the entities in the Group,
management has to use its judgement to determine the functional currency that most faithfully
represents the economic effects of the underlying transactions, events and conditions.
Labour and materials are sourced in the PRC and together with other selling costs, they are
denominated and settled in RMB. Management has assessed Mianzhu Norwests process of
determining sales prices and concluded that RMB is the currency that mainly inuences sales
prices for its products. On this basis, management has used its judgement and determined RMB
to be Mianzhu Norwests functional currency which most faithfully represents the economic effects
of the underlying transactions, events and conditions.
4.2 Key sources of estimation uncertainty
The key assumptions concerning the future and other key sources of estimation uncertainty at the
balance sheet date, that have a signicant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next nancial year are discussed below.
(a) Income taxes
The Group recognises liabilities for expected tax issues based on estimates of whether
additional taxes will be due. Where the nal tax outcome of these matters is different from
the amounts that were initially recognised, such differences will impact the income tax and
deferred tax provisions in the period in which such determination is made. The carrying
amount of the Groups deferred tax liabilities at 31 December 2010, 2011 and 2012 was
$42,000, $42,000 and $320,000 respectively.
A-30
APPENDIX A: AUDITED COMBINED FINANCIAL STATEMENTS FOR THE
FINANCIAL YEARS ENDED 31 DECEMBER 2010, 2011 AND 2012
Notes to the Combined Financial Statements - 31 December 2010, 2011 and 2012
4. Signicant accounting estimates and judgements (contd)
4.2 Key sources of estimation uncertainty (contd)
(b) Provision for rehabilitation
Provision for rehabilitation is based on estimates of future expenditures expected to be
incurred by the Group to undertake rehabilitation and restoration work which are discounted
at a rate reecting the term and nature of the obligations (3.64% as of 31 December 2010
and 2011 and 3.36% as of 31 December 2012) to present values. Signicant estimates and
assumptions are made in determining the provision for rehabilitation as there are numerous
factors that will affect the ultimate liability payable. These factors include estimates of the
extent and costs of rehabilitation activities, technological changes, regulatory changes,
cost increases and changes in discount rate. Those uncertainties may result in future
actual expenditure differing from the amounts currently provided. The provision at the end
of the reporting period represents managements best estimate of the present value of the
future rehabilitation costs required. For the nancial years ended 31 December 2010, 2011
and 2012, the carrying amounts of provision for rehabilitation were $54,000, $58,000 and
$158,000.
5. Revenue
Revenue represents invoiced trading sales and is shown net of allowances.
6. Other income
31 December
2010 2011 2012
$000 $000 $000
Interest income 25 9 9
Subsidy income
(1)
74 4 44
Insurance claims
(2)
420
Reversal of accrued expenses
(3)
300 421
Sale of scrap 161 113
Gain on relocation
(4)
1,874 3,471
Gain on disposal of property, plant and equipment 106 2
Others 1 8 12
981 2,535 3,538

(1)
There are no unfullled conditions or contingencies attached to these subsidies.
(2)
Insurance claims relate to claims made and received by the PRC subsidiary for the damages suffered during the
earthquake.
(3)
These accrued expenses were reversed as such accruals are no longer required.
(4)
On 29 April 2011, a subsidiary entered into an agreement with the Municipal Government of Hanwang Town
of Mianzhu, Sichuan, pursuant to which the subsidiary agreed to relocate its existing factory to Gongxing Town of
Mianzhu, Sichuan and surrender the land use rights where the old factory was erected (the Land Use Rights) to the
Municipal Government of Hanwang Town for a total compensation of RMB35,000,000 (approximately $6,800,000). In
2011, after the receipt of RMB17,000,000 (approximately $3,293,000) from the Municipal Government of Hanwang
Town, the subsidiary surrendered the Land Use Rights with net book value of $801,000 and incurred incidental costs
of $618,000 in relation to the relocation. In 2012, the subsidiary received an additional amount of RMB17,800,000
(approximately $3,519,000) and incurred incidental relocation costs of RMB243,000 (approximately $48,000).
A-31
APPENDIX A: AUDITED COMBINED FINANCIAL STATEMENTS FOR THE
FINANCIAL YEARS ENDED 31 DECEMBER 2010, 2011 AND 2012
Notes to the Combined Financial Statements - 31 December 2010, 2011 and 2012
7. (Loss)/prot before tax
The following items have been (charged)/credited in arriving at (loss)/prot before tax:
31 December
2010 2011 2012
$000 $000 $000
Amortisation of mine properties (132) (127) (130)
Amortisation of land use rights (23) (7) (34)
Depreciation of property, plant and equipment (83) (175) (275)
Exchange gain/(loss) * 21 (24) (178)
Staff costs (304) (525) (854)
Dened contribution plan (143) (124) (99)
Directors fees * (103) (100) (83)
Directors remuneration * (201) (192) (254)
Allowance written-back for stocks obsolescence 10 42
Allowance written-back/(made) for doubtful receivables
- trade 10 (10) (11)
- non-trade (4) 34
Impairment loss on property, plant and equipment
written back 633
Survey and valuation fees * (351)
Reversal of bad debts previously written off 342
Finance costs
Interest on bank loans (52) (7)
Unwinding of discount for provision for rehabilitation (2) (4)
Listing expenses * (1,780)
* Included in General and administrative costs in the combined statement of comprehensive income.
8. Taxation
The major components of income tax expense for the nancial years ended are:
31 December
2010 2011 2012
$000 $000 $000
Deferred taxation (Note 23)
- origination and reversal of temporary differences (28) 1,720
- benets of previously unrecognised tax losses (1,436)
(28) 284
A-32
APPENDIX A: AUDITED COMBINED FINANCIAL STATEMENTS FOR THE
FINANCIAL YEARS ENDED 31 DECEMBER 2010, 2011 AND 2012
Notes to the Combined Financial Statements - 31 December 2010, 2011 and 2012
8. Taxation (contd)
A reconciliation between the corporate tax rate of the Company to the average effective tax rate of
the Group for the years ended 31 December 2010, 2011 and 2012 is as follows:
31 December
2010 2011 2012
% % %
Domestic statutory tax rates (17.00) 17.00 17.00
Adjustments on tax effect of:
Non-deductible expenses 0.75 1.24 21.52
Income not subject to taxation (9.34) (14.19) (1.63)
Benets from previously unrecognised tax losses (0.77) (23.13)
Deferred tax assets not recognised 18.78 1.56 7.48
Differences in tax rates 4.49 (4.84) (2.42)
Effective tax rate (2.32) 18.82
No provision for income tax has been made by the Group for the years ended 31 December 2010,
2011 and 2012 as the Group did not have any assessable prots subjected to tax during the
respective years.
Pursuant to the relevant tax rules and regulations of the PRC applicable to foreign investment
enterprise (FIE), a FIE is entitled to a tax holiday whereby it is exempted from PRC income tax for
its rst two prot making years (after deducting losses incurred in prior years) and is entitled to a
50% tax reduction for the subsequent three years.
On 16 March 2007, the National Peoples Congress approved the PRC Corporate Income Tax
(CIT) Law (the New CIT Law), which became effective on 1 January 2008. The New CIT Law
introduces a wide range of changes which include, but are not limited to, the unication of the
income tax rates for domestic-invested and foreign-invested enterprises at 25%. In accordance
with the New CIT Law, where enterprises were entitled to preferential treatments in the form of tax
holiday, they can continue to enjoy the tax holiday until the tax holiday benets expire, but where
they have yet to start enjoying the tax holiday due to accumulated losses, the period of tax holiday
shall be deemed to have begun effective from 1 January 2008. Accordingly, the PRC subsidiary
was entitled to exemption from PRC CIT in 2008 and 2009 and was entitled to a 50% tax reduction
for the subsequent three years (2010 to 2012). It will be subject to CIT rate of 25% thereafter. The
PRC subsidiary had accumulated tax losses and did not have to pay income taxes for the nancial
years ended 31 December 2010, 2011 and 2012.
A-33
APPENDIX A: AUDITED COMBINED FINANCIAL STATEMENTS FOR THE
FINANCIAL YEARS ENDED 31 DECEMBER 2010, 2011 AND 2012
Notes to the Combined Financial Statements - 31 December 2010, 2011 and 2012
9. Mine properties
Producing
mines
$000
Cost
At 1 January 2010 2,424
Currency realignment (129)
At 31 December 2010 and 1 January 2011 2,295
Currency realignment 103
At 31 December 2011 and 1 January 2012 2,398
Currency realignment (120)
Additions 30
At 31 December 2012 2,308
Accumulated amortisation
At 1 January 2010 1,332
Currency realignment (75)
Charge for the year 132
At 31 December 2010 and 1 January 2011 1,389
Currency realignment 69
Charge for the year 127
At 31 December 2011 and 1 January 2012 1,585
Currency realignment (82)
Charge for the year 130
At 31 December 2012 1,633
Net carrying amount
At 31 December 2010 906
At 31 December 2011 813
At 31 December 2012 675
A-34
APPENDIX A: AUDITED COMBINED FINANCIAL STATEMENTS FOR THE
FINANCIAL YEARS ENDED 31 DECEMBER 2010, 2011 AND 2012
Notes to the Combined Financial Statements - 31 December 2010, 2011 and 2012
10. Land use rights
31 December
2010 2011 2012
$000 $000 $000
Cost
At 1 January 1,196 1,132 1,763
Currency realignment (64) 80 (88)
Additions 1,674
Disposal (1,123)
At the end of the year 1,132 1,763 1,675
Accumulated amortisation
At 1 January 311 317
Currency realignment (17) (2) (1)
Amortisation for the year 23 7 34
Disposal (322)
At the end of the year 317 33
Net carrying amount 815 1,763 1,642
Amount to be amortised:
Not later than one year 23 35 34
Later than one year but not more than ve years 91 141 137
Later than ve years 701 1,587 1,471
815 1,763 1,642
Remaining useful lives 36 50 49
Land use rights represent cost of land use rights in respect of leasehold land located in Sichuan,
PRC.
As disclosed in Note 6, land use rights in Hanwang Town of Mianzhu, Sichuan, PRC, were
surrendered in 2011 pursuant to an agreement signed on 29 April 2011 with the local government.
The land use rights where the existing factory was erected had a net book value of approximately
$801,000, when surrendered, and had tenure of 50 years when granted in 1996.
The PRC subsidiary has obtained a land use right in Gongxing Town, Mianzhu, Sichuan, PRC in
December 2011, with tenure of approximately 50 years.
Amortisation of land use rights are recognised in the General and administrative costs in the
Statement of Comprehensive Income.
A-35
APPENDIX A: AUDITED COMBINED FINANCIAL STATEMENTS FOR THE
FINANCIAL YEARS ENDED 31 DECEMBER 2010, 2011 AND 2012
Notes to the Combined Financial Statements - 31 December 2010, 2011 and 2012
11. Property, plant and equipment
Group
Leasehold
buildings
Leasehold
improve-
ments
Plant and
machinery
Motor
vehicles
and ofce
equipment
Mining
infrastructure
Construction-
in-progress Total
$000 $000 $000 $000 $000 $000 $000
Cost
At 1 January 2010 7,615 137 8,398 821 72 17,043
Currency realignment (431) (7) (565) (44) (1) (20) (1,068)
Additions 843 245 26 55 584 1,753
At 31 December 2010
and 1 January 2011 8,027 130 8,078 803 54 636 17,728
Currency realignment 2 6 306 40 2 674 1,030
Additions 202 493 365 12,617 13,677
Transfers 219 96 (315)
Disposals (7,189) (3,434) (305) (172) (11,100)
At 31 December 2011
and 1 January 2012 1,261 136 5,539 903 56 13,440 21,335
Currency realignment (68) (7) (405) (46) (13) (902) (1,441)
Additions 223 261 77 492 12,616 13,669
Transfers 9 1,080 (1,089)
Disposals (21) (21)
At 31 December 2012 1,425 129 6,475 913 535 24,065 33,542
Accumulated
depreciation and
impairment
At 1 January 2010 7,615 137 8,398 689 72 16,911
Currency realignment (406) (7) (524) (38) (4) (979)
Charge for the year 15 7 61 83
Impairment loss written
back for the year (633) (633)
At 31 December 2010
and 1 January 2011 7,224 130 7,248 712 68 15,382
Currency realignment (52) 6 241 21 1 (1) 216
Charge for the year 44 28 93 10 175
Disposals (7,147) (3,393) (305) (67) (10,912)
At 31 December 2011
and 1 January 2012 69 136 4,124 521 11 4,861
Currency realignment (5) (7) (309) (28) (2) (351)
Charge for the year 74 40 102 59 275
Disposals (21) (21)
At 31 December 2012 138 129 3,855 574 68 4,764
Net carrying amount
At 31 December 2010 803 830 91 54 568 2,346
At 31 December 2011 1,192 1,415 382 45 13,440 16,474
At 31 December 2012 1,287 2,620 339 467 24,065 28,778
A-36
APPENDIX A: AUDITED COMBINED FINANCIAL STATEMENTS FOR THE
FINANCIAL YEARS ENDED 31 DECEMBER 2010, 2011 AND 2012
Notes to the Combined Financial Statements - 31 December 2010, 2011 and 2012
11. Property, plant and equipment (contd)
Impairment of assets
During the year ended 31 December 2010, after considering the general rising trend in metal
prices, the directors of the Group reassessed the recoverable amount of certain plant and
machinery that were previously impaired with reference to the fair values less costs to sell based
on publicly available information on metal prices. As a result, an amount of impairment loss
previously recognised $633,000 was written back for the year ended 31 December 2010.
The impairment written back of $633,000 in FY2010 was recognised in Other operating income in
the combined statement of comprehensive income.
12. Prepayments
Payments made in respect of:
31 December
2010 2011 2012
$000 $000 $000
Land use rights 2,245 1,632 2,049
Property, plant and equipment 354 2,296 44
2,599 3,928 2,093
Prepayments for land use rights as at 31 December 2010, 2011 and 2012 relate to 2, 1 and 2
leasehold lands respectively in Mianzhu, Sichuan, PRC.
During the nancial year ended 31 December 2011, the Group obtained the land use right
certicate for 1 of the leasehold land in Mianzhu, Sichuan, PRC. Accordingly, the prepayments
relating to this leasehold land has been reclassied to land use rights as disclosed in Note 10 to
the nancial statements.
Property, plant and equipment that have been prepaid for will be received in the following nancial
years.
A-37
APPENDIX A: AUDITED COMBINED FINANCIAL STATEMENTS FOR THE
FINANCIAL YEARS ENDED 31 DECEMBER 2010, 2011 AND 2012
Notes to the Combined Financial Statements - 31 December 2010, 2011 and 2012
13. Stocks
31 December
2010 2011 2012
$000 $000 $000
Balance sheet
Packaging and raw materials, at cost 796 1,038 1,587
Finished goods 1,229 2,005 1,320
2,025 3,043 2,907
Less: Allowance for stocks obsolescence (42)
1,983 3,043 2,907
Movement for allowance for stocks obsolescence:
Balance at beginning of the year 55 42
Currency realignment (3)
Write-back of allowance for stocks obsolescence (10) (42)
Balance at end of the year 42
During the nancial years ended 31 December 2010, 2011 and 2012, write-back of allowance for
stocks obsolescence of approximately $10,000, $42,000 and $Nil respectively, were made as the
nished goods that were being provided for were sold in the respective years.
31 December
2010 2011 2012
$000 $000 $000
Prot or loss
Stocks recognised as an expense in cost of sales 1,914 797 2,796
14. Trade receivables
31 December
2010 2011 2012
$000 $000 $000
Trade receivables 183 198 137
Trade receivables are non-interest bearing and are generally on 30 to 60 days terms. They are
recognised at their original invoice amounts which represents their fair values on initial recognition.
Trade receivables denominated in foreign currencies at 31 December are as follows:
31 December
2010 2011 2012
$000 $000 $000
United States Dollar 16 19 70
A-38
APPENDIX A: AUDITED COMBINED FINANCIAL STATEMENTS FOR THE
FINANCIAL YEARS ENDED 31 DECEMBER 2010, 2011 AND 2012
Notes to the Combined Financial Statements - 31 December 2010, 2011 and 2012
14. Trade receivables (contd)
Receivables that are past due but not impaired
The aging analysis of trade receivables that were past due at the balance sheet date but not
impaired is as follows:
31 December
2010 2011 2012
$000 $000 $000
Less than one month past due 62 31
More than one month but less than three months
past due 4
Over three months past due 12
62 12 35
Receivables that are impaired
Trade receivables that were impaired at the balance sheet date and the movement of the allowance
account used to record the impairment are as follows:
31 December
2010 2011 2012
$000 $000 $000
Trade receivables nominal amounts 29 41 50
Less: Allowance for doubtful receivables (29) (41) (50)

Movements in allowance for doubtful receivables:
Balance at beginning of the year 41 29 41
Currency realignment (2) 2 (2)
(Write back)/allowance for doubtful debts (10) 10 11
Balance at end of the year 29 41 50
Trade receivables that were individually determined to be impaired at the balance sheet date
relate to debtors that are in signicant nancial difculties and have defaulted on payments. These
receivables are not secured by any collateral or credit enhancements.
A-39
APPENDIX A: AUDITED COMBINED FINANCIAL STATEMENTS FOR THE
FINANCIAL YEARS ENDED 31 DECEMBER 2010, 2011 AND 2012
Notes to the Combined Financial Statements - 31 December 2010, 2011 and 2012
15. Other receivables
31 December
2010 2011 2012
$000 $000 $000
Other receivables 158 117 1,480
Amount due from a director related company 7 18 28
Refundable deposits 245 242
165 380 1,750
Receivables that are impaired
Other receivables that were impaired at the balance sheet date and the movement of the allowance
account used to record the impairment are as follows:
31 December
2010 2011 2012
$000 $000 $000
Other receivables nominal amounts 68 75 38
Less: Allowance for doubtful receivables (68) (75) (38)

Movements in allowance for doubtful receivables:
Balance at beginning of the year 378 68 75
Currency realignment (5) 3 (3)
Allowance made/(written-back) 4 (34)
Amount written off (305)
Balance at end of the year 68 75 38
16. Deferred expenses
Deferred expenses represent portion of incremental costs, including professional fees that are
directly attributable to the issuance of new shares upon the listing of the Company. Deferred
expenses will be deducted against share capital when the Group completes the listing of the
Company.
17. Prepayments
31 December
2010 2011 2012
$000 $000 $000
Prepayments 12 9 29
Advances to suppliers 279 304 463
291 313 492
A-40
APPENDIX A: AUDITED COMBINED FINANCIAL STATEMENTS FOR THE
FINANCIAL YEARS ENDED 31 DECEMBER 2010, 2011 AND 2012
Notes to the Combined Financial Statements - 31 December 2010, 2011 and 2012
18. Cash and bank balances
Cash and cash equivalents included in the combined statements of cash ow comprise:
31 December
2010 2011 2012
$000 $000 $000
Cash and bank balances 983 3,213 4,772
Less: Pledged deposits held for mine activities (159) (166) (159)
Cash and cash equivalents 824 3,047 4,613
Cash at bank earns interest at oating rates based on daily bank deposit rates. The weighted
average effective interest rates for pledged deposits as at 31 December 2010, 2011 and 2012 for
the Group were 0.37%, 0.47% and 0.45% respectively.
As at 31 December 2010, 2011 and 2012, the PRC subsidiary has cash and bank balances which
are denominated in Singapore Dollar, of $Nil, $1,282,000 and $2,811,000 respectively.
Cash and bank balances denominated in foreign currencies at 31 December are as follows:
31 December
2010 2011 2012
$000 $000 $000
United States Dollar 62 98 192
19. Trade payables
Trade payables are normally settled on 30 days terms, unsecured, non-interest bearing and are to
be settled in cash.
20. Other payables
31 December
2010 2011 2012
$000 $000 $000
Payables related to:
Taxes other than income tax 1,223 763 228
Payroll and welfare payable 1,109 1,323 356
Property, plant and equipment 501 4,078 7,926
Other payables 889 993 637
Deposits received 109 119 146
Accrued liabilities 680 239 807
Incidental costs in relation to relocation of plant 521 72
Compensation payable for loss of lives in earthquake 37
4,548 8,036 10,172
A-41
APPENDIX A: AUDITED COMBINED FINANCIAL STATEMENTS FOR THE
FINANCIAL YEARS ENDED 31 DECEMBER 2010, 2011 AND 2012
Notes to the Combined Financial Statements - 31 December 2010, 2011 and 2012
20. Other payables (contd)
Other payables are unsecured, non-interest bearing and are repayable on demand.
Other payables denominated in foreign currencies are as follows:
31 December
2010 2011 2012
$000 $000 $000
Canadian Dollar 34 31
British Pound 11
21. Amounts due to ultimate holding company
The amounts due to ultimate holding company represent advances made and are non-trade in
nature, unsecured, interest-free and repayable on demand via capitalisation of debt to share
capital.
For the nancial years ended 31 December 2010, 2011 and 2012, Eastcomm is the immediate and
ultimate holding company of Norwest Chemicals and Mianzhu Norwest respectively.
22. Interest-bearing bank loans
31 December
2010 2011 2012
$000 $000 $000
Short term bank loans 912
Short term bank loans bore interest at 5.84% per annum for the financial years ended
31 December 2010 and 2011 and were repriced within a year.
As at 31 December 2010, short-term bank loans are secured by pledge of xed deposits of
$2,000,000 belonging to the ultimate holding company.

During the nancial year ended 31 December 2011, the loans were fully repaid and the pledge of
xed deposits of $2,000,000 belonging to the ultimate holding company was discharged.
A-42
APPENDIX A: AUDITED COMBINED FINANCIAL STATEMENTS FOR THE
FINANCIAL YEARS ENDED 31 DECEMBER 2010, 2011 AND 2012
Notes to the Combined Financial Statements - 31 December 2010, 2011 and 2012
23. Deferred tax liabilities
The following are the deferred tax liabilities recognised and movements thereon during the years
ended 31 December 2010, 2011 and 2012:
Unutilised
tax losses
Unremitted
foreign
income
Difference in
depreciation
for tax
purpose Total
$000 $000 $000 $000
At 1 January 2010 70 70
Credit to prot or loss during the year
(Note 8) (28) (28)
At 31 December 2010, 1 January 2011
and 31 December 2011 42 42
(Credit)/charge to prot or loss during
the year (Note 8) (1,436) 1,720 284
Currency realignment 28 (34) (6)
At 31 December 2012 (1,408) 42 1,686 320
Unrecognised tax losses
As at 31 December 2010, 2011 and 2012, the Group had tax losses of approximately $6,156,000,
$6,083,000 and $330,000 respectively for offset against future taxable prots of the companies
in which the losses arose, for which no deferred tax asset is recognised due to uncertainty of its
recoverability.
As at 31 December 2012, benefits arising from previously unrecognised tax losses of
approximately $5,745,000 has been recognised as deferred tax assets as one of the Groups
production facility has commenced production and the Group expects future taxable prot to be
available against which the unused tax losses can be utilised.
24. Deferred income
31 December
2010 2011 2012
$000 $000 $000
Balance at beginning of the year 2,247 2,348
Currency realignment (67) 101 (117)
Received during the year 2,314
Balance at end of the year 2,247 2,348 2,231
Deferred income received during the nancial year ended 31 December 2010, represented
government grants received for the construction of certain plant and equipment. Deferred income
will be recognised in prot or loss over the expected useful life of the relevant plant and equipment
when the construction of the relevant plant and equipment is complete and capable of operating in
the manner intended by the Group.
A-43
APPENDIX A: AUDITED COMBINED FINANCIAL STATEMENTS FOR THE
FINANCIAL YEARS ENDED 31 DECEMBER 2010, 2011 AND 2012
Notes to the Combined Financial Statements - 31 December 2010, 2011 and 2012
25. Provision for rehabilitation
31 December
2010 2011 2012
$000 $000 $000
Balance at beginning of the year 54 58
Currency realignment (1) 2 (4)
Recognised during the year 55 100
Unwinding of discount 2 4
Balance at end of the year 54 58 158
The Group makes provision for the future cost of rehabilitating mine sites on a discounted basis
at a rate of 3.64%, 3.64% and 3.36% as at 31 December 2010, 2011 and 2012 respectively. The
rehabilitation provision represents the present value of rehabilitation costs relating to mine sites,
which are expected to be incurred. These provisions have been created based on the Groups
internal estimates. Assumptions, based on the current economic environment, have been
made which management believes are a reasonable basis upon which to estimate the future
liability. These estimates are reviewed regularly to take into account any material changes to the
assumptions. However, actual rehabilitation costs will ultimately depend upon future market prices
for the necessary decommissioning works required and will depend on market conditions at the
relevant time. Furthermore, the timing of rehabilitation is likely to depend on when the mines cease
to produce at economically viable rates. This, in turn, will depend upon phosphate rocks prices,
which are inherently uncertain.
26. Share capital
31 December
2010 2011 2012
No. of
shares
No. of
shares
No. of
shares
000 $000 000 $000 000 $000
Issued and paid-up
Balance at the beginning of
the year 9,048 9,048 9,048 9,048 21,048 21,048
Issue of new shares 12,000 12,000 11,500 11,500
Balance at the end of the
year 9,048 9,048 21,048 21,048 32,548 32,548
For the purpose of the preparation of the combined balance sheets, issued share capital as at 31
December 2010 and 2011 represent the issued share capital of Norwest Chemicals. The issued
share capital as at 31 December 2012 represents the share capital of the Company and Norwest
Chemicals.
The holders of ordinary shares are entitled to receive dividends as and when declared by the
Company. All ordinary shares carry one vote per share without restrictions. The ordinary shares
have no par value.
A-44
APPENDIX A: AUDITED COMBINED FINANCIAL STATEMENTS FOR THE
FINANCIAL YEARS ENDED 31 DECEMBER 2010, 2011 AND 2012
Notes to the Combined Financial Statements - 31 December 2010, 2011 and 2012
27. Reserves
31 December
2010 2011 2012
$000 $000 $000
Foreign currency translation reserve 1,476 2,011 1,093
Retained earnings (9,190) (6,257) (5,032)
Safety fund surplus reserve
(7,714) (4,246) (3,939)
Foreign currency translation reserve represents exchange differences arising from the translation of
the nancial statements of foreign operation whose functional currency is different from that of the
Groups presentation currency.
In accordance with the Notice regarding Safety Production Expenditure jointly issued by the
Ministry of Finance and the State Administration of Work Safety of the PRC in February 2012,
the PRC subsidiary is required to make appropriation to a Safety Fund Surplus Reserve based
on the volume of mineral ore extracted. The reserve is utilised upon incurrence of specic safety
production expense.
28. (Loss)/earnings per share
For illustrative purposes, basic (loss)/earnings per share was calculated by dividing the Groups
(loss)/prot for the year attributable to owners of the Company by the pre-offering share capital of
702,400,000 ordinary shares.
For illustrative purposes, adjusted (loss)/earnings per share was calculated by dividing the Groups
(loss)/prot for the year attributable to owners of the Company by the post-invitation share capital
of 800,000,000 ordinary shares.
29. Segment information
For management purposes, the Group is organised into business units based on their products and
services and has two reportable segments as follows:
(i) The upstream segment is in the business of exploration, mining and sale of phosphate rocks.
(ii) The downstream segment is in the business of manufacturing, sale and trading of
phosphate-based chemical products.
No operating segments have been aggregated to form the above reportable operating segments.
The Chief Operating Decision Maker monitors the operating results of its business units separately
for the purpose of making decisions about resource allocation and performance assessment.
Segment performance is evaluated based on operating prot or loss which in certain respects, as
explained in the table below, is measured differently from operating prot or loss in the combined
nancial statements. Group nancing (including nance costs) and income taxes are managed
on a group basis and are not allocated to operating segments. The Chief Operating Decision
Maker does not monitor assets and liabilities by segments. The assets and liabilities are managed
on a group basis. However, the information on additions to mine properties, land use rights and
property, plant and equipment by operating segments is regularly provided to the Chief Operating
Decision Maker.
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