Professional Documents
Culture Documents
Ar2002 PDF
Ar2002 PDF
OUR MISSION
To create superior value for our stakeholders through advanced membrane technology.
OUR VALUES
We embody the entrepreneurial spirit, daring to dream with the aim to excel.
We are committed to enhancing the environment and delivering innovative solutions, executed with the
utmost professionalism and integrity.
We value our partnerships with our collaborators and customers; and every employee and
his contribution.
In 2002, the Hyflux Group underwent a strategic corporate rebranding exercise. Armed with a fresh Corporate Identity, Hyflux now
has a new look which encapsulates the leading technology behind the brand. It represents the passion, professionalism and
performance increasingly associated globally with the name of Hyflux. “It’s So Clear”, the new company tagline, is not only pertinent
to the Group’s main business of water treatment, but also signals Hyflux as clearly the partner of choice in its industries. Creative
and sophisticated, Hyflux’s new branding is the perfect companion for its rising international stature.
GROUP CEO & PRESIDENT’S
MESSAGE TO SHAREHOLDERS
GROWING WITH THE FLOW In 2002, we also garnered a S$27 million contract by PUB to supply
the entire membrane filtration system for a raw water treatment
The year 2002 will be remembered as a year of record growth in plant at Chestnut. When completed in end 2003, the potable
our business and in our financial results. Our achievements in 2002 water treatment plant will be one of the world’s largest to utilise
marked several significant milestones for Hyflux; the successful advanced membrane technology for potable water treatment.
completion of Hyflux’s first municipal project – the Bedok NEWater These large-scale municipal projects have enabled us to sustain
Factory; the award of Singapore’s third NEWater plant at Seletar our growth momentum in the Singapore market despite weak
which uses Hyflux’s in-house ultrafiltration (“UF”) membrane – industrial demand in 2002.
Kristal300 ™ ; the award of “Most Admired Sesdaq Company”
by the Smart Investors magazine; and being listed as one of the In China, we were awarded our largest industrial project amounting
“Best 200 Small Companies” in the world by Forbes. to US$15.4 million to build a process plant for an organic acid
manufacturing facility by a subsidiary of Sinolac (Singapore) Pte Ltd.
ACCOMPLISHMENTS DESPITE THE ODDS
Our ability to deliver better than expected results was no means by What is especially fulfilling about these milestone projects is that
chance. Since going public in early 2001, we have been building they are the fruit of years of developmental work, research and pilot
up our expertise and infrastructure in preparation for our leap into studies conducted in collaboration with our industrial and municipal
the big league to take on large municipal projects. partners. Such close collaboration with our partners has enabled
us to harness our process know-how and create value-add and
When the Public Utilities Board (“PUB”) of Singapore embarked on purpose-built solutions for our customers in both the industrial and
the development of alternative sources of water such as NEWater the municipal markets. Equally significant is that these projects have
and desalinated water to augment Singapore’s conventional water provided us with the experience and credentials to compete for
sources, we were well prepared to bid for these projects against similar large-scale projects in the international arena.
some of the world’s biggest players in the water treatment market.
GEARING UP FOR SUSTAINED GROWTH
In late 2001, PUB invited tenders for the first two municipal In 2002, we continued to build up our business capabilities,
NEWater plants at Bedok and Kranji. Of these, Hyflux won the tender particularly in terms of personnel, capital, facilities and technology.
for the NEWater plant at Bedok, which also forms part of the
NEWater Visitor Centre. In the third quarter of 2002, PUB invited Our head count grew from 257 employees at the beginning of the
tenders for the third NEWater plant at Seletar. Hyflux again won this year to 352 by year-end. Most of the increases were in the
contract worth some S$27.8 million. Apart from being the biggest engineering, technical, sales and marketing divisions of our local
project that we have secured in 2002, the key significance of this and Shanghai offices. Apart from employment of temporary
project is that our own in-house developed UF membrane system construction workforce, we do not foresee any substantial increase
has been accepted by PUB for use in the Seletar NEWater plant. in our permanent staff strength in 2003.
HYFLUX GROUP OF COMPANIES
P.02. 03
“The success of our company is a result of the steadfast support we received from you,
our shareholders, customers, suppliers and business partners all these years.
I wish to thank you and I look forward to your continued support in 2003 and beyond.”
To strengthen our capital base, we made a private placement The significance of these 2 deals cannot be over-emphasised. These
of 10.0 million new ordinary shares at S$1.235 a share in June deals serve to provide us with a stable recurring revenue stream.
2002. The net proceeds raised, of about S$12 million, are used Furthermore, as observed by a research house, Hyflux now has the
for our working capital, as well as for funding the investment of potential to be the ultimate player in the water treatment industry,
US$1.7 million for a 19.5% stake in Sinolac (Singapore) Pte Ltd. with the capability and technical know-how to cover the entire
waterscape, recovering clean water from the land (NEWater), the
In 2002, we also focused on expansion of our facilities both in sea (desalinated water); and the air (Aquovate™ Technology). Equally
Singapore, as well as in Shanghai to support our growing market. important is that these capabilities are firmly anchored on our
In Singapore, we have completed the renovation of our 60-year proprietary membrane and process technology.
leasehold factory building at Changi that houses our membrane
production lines, warehouse facilities and fabrication workshop. Going forward, we will continue to play a leading role in the local
In China, we have moved into our new 50-year leasehold factory at municipal water treatment market. This will allow us to stay engaged
Pudong, Shanghai, which enables us to increase our production in the Singapore market while waiting for the upturn in the industrial
capabilities three-fold. sector. In China, we shall continue to focus on the industrial market,
particularly on applications involving treatment of liquid streams in
On the technological front, our research and development manufacturing processes of biotechnological and pharmaceutical
programme continued to generate market-driven products and industries.
processes that have led to numerous patent applications which are
being filed in 2003. In January 2003, we made a private placement of 11,811,000 new
ordinary shares at S$1.00 a share, to raise S$11.8 million. We do
IMPACT ON FINANCIAL PERFORMANCE not foresee any further equity cash calls for the next 6 to 9 months.
The sales and profits achieved in 2002 were at an all-time high, yielding During this period, any financing required will come from our
a return on equity (ROE) of 23% and a 58% growth in earnings per unutilised bank credit lines and from the debt market.
share (EPS). This is despite the continued investment in our business
infrastructure and share issues from private placement through the A PERSONAL TRIBUTE
Hyflux Employee Share Option Scheme. The year also recorded a The success of our company is a result of the steadfast support we
healthy year-end balance sheet with a relatively low debt to equity received from you, our shareholders, customers, suppliers and
ratio of 0.14. This means we have considerable debt capacity that business partners all these years. I wish to thank you and I look
we can tap on in the future to fund our growing business. forward to your continued support in 2003 and beyond.
Ms Lum is the Managing Director, founder, Group CEO and President of the Hyflux Group.
She worked as a chemist for three years with Glaxo Pharmaceuticals Pte Ltd before leaving
to start up Hydrochem (S) Pte Ltd in 1989. Managing the Group for more than ten years now,
she is the main driving force behind the Group’s growth and business expansion and decides
on its strategies, policies and corporate direction. A nominated Member of Parliament since
July 2002, Ms Lum also holds several positions in the public service. She is a board member
of SPRING Singapore as well as Singapore’s representative to the APEC Business Advisory
Council (ABAC) and a member in the SME “Get-Up” Committee. Ms Lum has a Bachelor of
Science (Hons) degree from NUS.
Dr Murugasu is the Chief Operating Officer and Executive Vice President of the Group.
She worked for nine years with the Ministry of Health before joining Hyflux in 1996. Her last
appointment there was as a specialist in Family Medicine. Her previous appointment in
Hydrochem was as Head of Business Development, for which she was responsible for
development, application and marketing of new products and services of the Group to
relevant market sectors. Her current appointment as the Group COO entails overseeing
the Group’s operations, including day to day operations, sales and marketing. Dr Murugasu
is also a director in three other companies in Singapore. She holds a Masters of Medicine
(Family Medicine) from NUS.
Mr Foo is Executive Director and Executive Vice President for Special Projects. He worked
as a Sales Manager for Multico System Engineers Pte Ltd, a construction equipment and
building materials company, for eight years before joining Hyflux in 1998. Mr Foo is in
charge of the Group’s special projects, which require intensive management expertise and
structured planning. With more than 15 years of marketing and sales experience behind
him, he also takes on marketing and sales of the Group’s products and services. Mr Foo
holds a Bachelor of Engineering degree from NUS.
HYFLUX GROUP OF COMPANIES
P.04. 05
NON-EXECUTIVE DIRECTOR
GAY CHEE CHEONG
Mr Gay was appointed Non-executive Director of the Group on 3rd August 2001. Currently
Deputy Chairman/ CEO of 2G Capital Pte Ltd, he was JIT Group’s Group Executive Director
and MD to the various JIT companies in Singapore and overseas during the four years he
was there. Mr Gay holds directorships in a number of companies in Singapore. He holds
honours degrees in Electronic Engineering from Royal Military College of Shrivenham, UK
and in Economics from University of London, as well as a Masters in Business Administration
from NUS. He also attended the Royal Military Academy (RMA) in Sandhurst and was
awarded Best Overseas Student.
INDEPENDENT DIRECTOR
LEE JOO HAI
Mr Lee was appointed Independent Director of the Group on 19 December 2000. A CPA
with memberships to ICPAS and Institute of Chartered Accountants in England and Wales,
he is a partner in a public accounting firm in Singapore. He has more than 20 years of
experience in accounting, auditing, taxation and company secretarial work. Mr Lee holds
directorships in a number of other companies in Singapore.
INDEPENDENT DIRECTOR
TEO KIANG KOK
Mr Teo was appointed Independent Director of the Group on 19 December 2000. A lawyer
with more than 19 years of experience in legal practice, he is currently a senior partner of
Shook Lin & Bok, a firm of advocates and solicitors, heading its corporate finance and
China practice groups. He specialises in corporate finance, international finance and
securities and has advised listed companies extensively on corporate law and compliance
requirements. Mr Teo holds directorships in a number of other companies in Singapore.
SENIOR MANAGEMENT
Mr Lim is Executive Vice President, Chief Financial Officer and Company Secretary for the
Group. He is responsible for the Group’s financial and corporate secretarial affairs. Mr Lim
has over 20 years of experience in industry and in banking. Prior to joining the Group in
2000, he held senior managerial positions in finance, corporate secretarial functions and
human resources with major American MNCs and a leading local bank. Mr Lim graduated
with a degree in accountancy from the University of Singapore and holds a MBA from
National University of Singapore. He is a non-practising member of the Institute of Certified
Public Accountants.
Mr Murugasu is Senior Vice President for Corporate Services. He is responsible for the
Group’s human resource, procurement, information technology and general administration
functions. Prior to joining Hyflux in August 2001, Mr Murugasu accumulated over 15 years
of experience in the public sector well as with a foreign bank. He holds an honours degree
in Computing Science from Imperial College and a Masters degree from the London School
of Economics.
Mr Hurn is Senior Vice President for Structured Projects. Prior to joining Hyflux, he worked
for more than 10 years in the power industry, initially in the construction of power stations
and later in the development and financing of independent power projects. Mr Hurn’s current
position with Hyflux is to lead development for the Group’s subsidiary, Hyflux Engineering,
which invests in the growing market of privately financed water projects and other process
industries that utilise Hyflux’s membrane technologies. He holds a Masters degree from
Cambridge University, UK.
Ms Goh is the Vice President for Finance. She joined the Group in August 2002 and is
responsible for the financial management, internal controls and accounting functions of
the Group. Ms Goh has more than 15 years of experience in external audit, financial
management and control, internal audit and human resource administration with both
MNCs and SMEs. She has worked in Singapore, China, Hong Kong and the United States.
She holds a Degree in Accountancy from the University of Singapore and an MBA from the
University of Wales and Manchester Business School (UK). Ms Goh is also a Certified
Internal Auditor and non-practicing member of the Institute of Certified Public Accountants
of Singapore.
HYFLUX GROUP OF COMPANIES
P.06. 07
Mr Lee is Vice President for Operations. He is responsible for the Group’s overall operations.
Mr Lee has over 18 years of experience in the Automation and Control business and held
senior managerial positions with MNCs covering a wide range of industries including
Petrochemicals, Oil and Gas, Power, Water Treatment, Construction Materials, Pulp and
Paper, and Food. He also worked overseas in China, Hong Kong and Thailand for eight
years. Mr Lee holds a Bachelors degree in Electrical and Electronic Engineering from
Nanyang Technological University of Singapore.
Mr Chong is Senior Vice President for Hyflux’s operations in China. He has over ten years
of experience in setting up companies and managing operations overseas. Mr Chong had
established and managed operations in Ho Chi Minh City, Shanghai, Tianjin, Budapest,
Zhuhai, Shenzhen and Hong Kong. Mr Chong holds a Bachelor of Engineering (Civil) from
the Royal Military College (UNSW), Australia. He is also a graduate of the Royal Military
College of Science (Shrivenham), UK and has a GDFM from Singapore Institute of
Management.
Mr Ge is Vice President for Business Development and the General Manager of Hydrochem
Engineering (Shanghai) Co. Ltd. He joined Hydrochem in 1994. Being a pioneer in the
China operations, he is also responsible for overseeing the research, development and
sales of membrane technology in China. He holds a Bachelor of Chemistry degree from
Shanghai Science and Technology University.
Mr Gu is Vice President for Finance and Administration and the Vice General Manager of
Hydrochem Engineering (Shanghai) Co. Ltd. He joined the Group in 1999 and is responsible
for the daily operations, financial jurisdiction and general administration of Hydrochem.
Mr Gu has more than 36 years of experience in a wide range of industries. Having headed
chemical factories and institutions and development companies, he has also covered
portfolios in finance and human resource.
CORPORATE MILESTONES
➔
MAY 2002 ➔
APRIL 2003 ➔
P.08. 09
FINANCIAL HIGHLIGHTS
Net Tangible Assets per share (cents) 1.17 0.21 6.3 15.6 21.3
Earnings per share (cents) 0.47 0.05 4.4 3.38 5.33
Dividend per share (cents) 0 0 0.6 0.5 1.0
S$MILLIONS S$MILLIONS
50 50
45 45
40 40
35 35
30 30
25 25
20 20
15 15
10 10
Others
5 5
China
0 0 Singapore
‘98 ‘99 ‘00 ‘01 ‘02 ‘98 ‘99 ‘00 ‘01 ‘02
S$MILLIONS
12
11
10
6
48%
5
18% 82% 4
3
‘01 ‘02
2
Municipal 1
Industrial 0
52% ‘98 ‘99 ‘00 ‘01 ‘02
MARKETING REVIEW
Group sales grew by 66% to $45.3 million in 2002. Both our core markets of Singapore and China posted growth of 113% and 60% to
$23.9 million and $19.8 million respectively.
In Singapore, most of our sales were to the municipal sector where we won two new projects, each with a contract value of $27 million.
As a result, municipal sales accounted for about 48% of total sales in 2002, up from about 18% a year ago while Singapore regained its
position as our largest market with a 53% share of our total sales.
In China, we continued to focus on the industrial market, serving customers particularly in the biotechnology and the pharmaceuticals
sectors. This culminated in our securing our largest industrial project of US$15.4 million to supply the process plant for an organic acid
manufacturing facility. Thus despite the weak industrial market in Singapore, our industrial sales were still up by 5% to $23.5 million.
ORGANISATION REVIEW
Our staff strength rose from 257 at the beginning of the year to 352 at year-end. As a result, personnel expenses were up by 44% to
$6.9 million in 2002. Most of the increase was in our engineering, technical, sales and marketing teams at our Singapore and our Shanghai
operations.
Singapore 82 169
Shanghai 85 105
Hangzhou and Ningbo 90 78
Total 257 352
FINANCIAL REVIEW
TURNOVER
Turnover grew by 66% to S$45.3 million compared to FY2001. The increase came primarily from municipal sales in Singapore from the
completion of Bedok NEWater project and the award of two new contracts during the year – the raw water treatment plant at Chestnut
and the NEWater plant at Seletar. Municipal sales jumped by 352% to S$21.8 million in FY 2002, compared to S$4.8 million a year ago.
Industrial sector turnover of S$23.5 million was 5% higher than that achieved in FY2001. China registered a 60% increase in industrial
sales to S$19.8 million, boosted by sales growth in the biotechnological and pharmaceutical industries. Partially offsetting these growth
was the fall in Singapore industrial sales resulting from the slow recovery from the industrial sectors.
PROFIT
The group registered profit after tax of S$12.3 million, a year on year increase of 67%. The higher profit after tax was largely due to
strong growth in the group’s two main core markets in Singapore and China, which recorded a growth of 113% and 60% respectively.
By geographical segments, net margin from operations for the Singapore and China markets average 21% and 36% as against 31% and
38% respectively in 2001. The lower margins were attributed to the higher municipal sales in Singapore and the expansion of engineering,
technical, sales and marketing functions in both the Singapore and Shanghai offices. In absolute terms, however, group profit from
operations grew by 29% to S$12.1 million. Partially offsetting the increase in business, selling, administrative and financial expenses was
the fall in tax expense of S$2.1 million arising from the tax incentives enjoyed by the Company and its subsidiary in Shanghai, China.
Through prudent fiscal planning, the Group was able to continue to forge ahead in its competitive core markets while maintaining net profit
margin at last year’s 27%.
HYFLUX GROUP OF COMPANIES
P.10. 11
Shareholder’s fund ended the year up S$22.5 million to S$53.9 million, enhanced by private shares placement and retained profits.
Debt equity ratio stood at 0.14, up from 0.09 in FY2001.
RISING
TO A
CRESCENDO
HYFLUX GROUP OF COMPANIES
P.12. 13
2002 marked a groundbreaking year for Hyflux when it took on In September 2002, Hyflux also achieved another first by clinching
high recognition projects in both the industrial and municipal PUB’s first advanced membrane potable water treatment plant to
markets. Demand from the biotechnological and pharmaceutical be constructed at the Chestnut Avenue Waterworks at a cost of
sectors in China continued to be lively as Hyflux ventured S$27 million. With a capacity of 273 million cubic metres daily, the
aggressively into the region. In Singapore, the Group has secured Chestnut Avenue Waterworks will be the second largest membrane-
large municipal projects, utilising municipal membrane-based water based raw water treatment plant in the world when it is completed
treatment technology. in 2003.
Hyflux’s maiden project for the municipal sector was won in CARRIED ON A CREST
December 2001. The S$16.1 million contract with the Public Utilities After a year buoyed by success, Hyflux took a giant step into the
Board (PUB), Singapore was to supply process equipment for an big league by landing Singapore’s first seawater desalination project
advanced dual membrane high grade water reclamation plant at awarded by PUB, worth S$250 million. This landmark deal aims to
Bedok, Singapore. Completed in late 2002, the plant now processes supply 136,000 cubic metres of desalinated water a day when
32,000 cubic metres a day of high-grade water or NEWater from completed in 2005. The plant will have the capacity to meet some
treated wastewater. NEWater is used primarily for direct non-potable 10% of the island’s water needs.
use in the wafer fabrication industry for wafer production and in
commercial buildings for air-con cooling purposes. In addition, some The consortium “Singspring” will build, own and operate the plant,
of the NEWater is also used for indirect potable use. with Hyflux owning a 70% stake in the consortium and partnering
Ondeo. Singspring has the strength and stability of an internationally
NEWater is a sustainable and reliable alternative water resource for recognised company, and the flexibility and local knowledge
Singapore. It plays a strategic role in Singapore’s long-term plan to afforded by a home-grown specialist. The Hyflux Group expects to
be self-sufficient in water supply. Hyflux is proud to be part of this secure contracts worth at least S$100 million in engineering,
NEWater initiative to ensure that Singapore’s future water supply construction and procurement activities – largely from the supply
remains a sustainable and sufficient resource. of Hyflux’s proprietary membrane systems. Recurring income is also
expected from operations and maintenance activities until 2025.
SUSTAINING THE FLOW
Following Hyflux’s successful first venture into the municipal market, As the first-ever desalination plant in Singapore to supply drinking
another NEWater project was secured in December 2002. This time, water, this project marks a significant milestone in the Group’s
the contract worth S$27.8 million is for the design and construction focused endeavour to become a world-leading water treatment
of a NEWater plant at Seletar, Singapore. company. It places Hyflux firmly within the international water
treatment arena and positions the Group as a potential strategic
The Seletar plant, with a capacity of 24,000 cubic metres daily, will player for future large-scale municipal projects in Singapore
be equipped with advanced membrane and ultraviolet technologies. and beyond.
More significantly, Hyflux’s proprietary Kristal300 TM Ultrafiltration
membrane technology has been selected for use in the Seletar
NEWater plant and this is a clear endorsement of the company’s
capabilities in providing advanced membrane products and services
for municipal-sized water treatment facilities. This project has also
enhanced the Group’s reputation and regional recognition
as a leading provider of high quality, high performance ultrafiltration
membrane systems for demanding applications. It has also put the
group on the world stage as a recognised membrane manufacturer.
MAKING WAVES
IN THE REGION
HYFLUX GROUP OF COMPANIES
P.14. 15
GATHERING MOMENTUM
W ith continual growth in the scope and complexity of its The transformation began in the early 1990’s when Hyflux founder
projects and operations, Hyflux is fast becoming a major player in Olivia Lum realised the potential in membrane technology and was
Asia Pacific’s water industry. convinced it was the future of water treatment. However, testing of
off-the-shelf membranes from large suppliers revealed that they were
Of the four major water treatment contracts awarded in Singapore
designed for specific applications and were not easily customisable
between December 2001 and January 2003, Hyflux was successful
for clients. Hence, Hyflux launched into customised membrane
in tendering for and clinching three of them – the two NEWater
manufacturing which would allow the Group to experiment and
plants at Bedok and Seletar, and Chestnut Avenue Waterworks,
manufacture membranes of different formulations in order to provide
a raw water treatment plant.
value-add to the clients and industries. The Kristal300TM ultrafiltration
With the Singapore government singling out four “national taps” – membrane that will be used in the Seletar NEWater plant is an
direct import of water, local water sources, NEWater and desalination example of Hyflux’s focused efforts in membrane technology.
– to ensure long term supply of water for the country, Hyflux is now
Over the past decade, membrane technology has made great strides
playing a pivotal role in the development of the latter three. This is
in water and wastewater treatment. It is enjoying widespread use
testament to the capabilities and direct competitiveness of the
and are increasingly applied to treat not only water but also other
Group. It also highlights Hyflux’s technical competence and
liquids in the biotechnological, pharmaceutical, and oil and gas
management strength to take on large scale municipal projects.
industries. Clearly, with the enormous customisable flexibility of
For a project as significant as the Bedok plant, one involving the Hyflux’s proprietary membranes, the market potential arising from
production of NEWater and bearing implications for Singapore’s their development is enormous.
future water sufficiency, it was an impressive feat for Hyflux, a home-
TAPPING THE PULSE OF THE FUTURE - BIOTECHNOLOGY
grown company, to deliver the project in record time.
Leveraging on proprietary in-house R&D, Hyflux has pioneered a
The Bedok NEWater plant is now fully equipped with an advanced membrane system, the first of its kind, capable of filtering liquids
dual membrane and UV disinfection system built by Hyflux to for the production of organic acids in biotechnology-related
rigorous specifications, and showcased to the public by a gleaming industries such as pharmaceutical and food processing.
Bedok NEWater Visitors’ Centre which provides a clear view of the
With biotechnology considered a fast growing “sunrise” sector in
plant’s design and operations .
many growing economies worldwide, and especially in China, the
Securing Singapore’s first seawater desalination project will prove to market potential of this membrane is exciting. In October 2002,
have even broader implications for Hyflux. Not only a deal of landmark Hyflux Engineering Pte Ltd, a wholly owned subsidiary, acquired
size, this project will position Hyflux as a strategic player in Singapore, a 19.5% equity interest in Sinolac (Singapore) Pte Ltd for
showing the way to large municipal projects in the future, and put the US$1.7 million. Sinolac was incorporated to own and operate
Group on firm footing to expand into Asia and beyond. a biotechnology manufacturing facility for the production of lactic
acid. The facility, to be completed in late 2004, will have an initial
Despite highly competitive tenders for the project from global players,
production capacity of 10,000 metric tons of organic acid a year,
Singspring was selected as it was able to offer the lowest price for
with a staged expansion to 50,000 metric tons per year.
desalinated water over a 20-year period, while fully meeting the
comprehensive technical and performance standards. As the Under the arrangements of the contract, Hyflux Engineering will
“designer, builder, operator and investor” for the project, the Group is discharge a US$15.4 million deal to supply the process plant for
able to offer the most reliable and optimised “Build-Own-Operate” the Sinolac manufacturing facility. In return, Sinolac will pay a
(BOO) solution. In fact, this venture is Asia’s very first “project-financed” US$2 million licensing fee for a period of 5 years to use Hyflux’s
30MGD water deal. Indeed, Singspring is proud to be able to transform proprietary membrane filtration technology. The Group will further
the promise of desalination into a sustainable reality in Singapore. benefit from new proprietary know-how gleaned from the design
and fabrication of the membrane-based liquid treatment plant
Previously mostly out of bounds due to the limited capital of the young
and filtration systems. The Sinolac project is a clear example of
company, this award will provide the Group with the critical mass to
Hyflux harnessing existing capabilities for innovative solutions.
compete against international heavyweights for foreign projects in
the future – a market estimated to be worth US$400 billion annually. In addition, it has also helped Hyflux to secure a constant source of
revenue from the biotechnological sector, an added market for
SIMPLY KRISTAL CLEAR
membrane technology.
Hyflux began as a small integration player, buying and assembling
packaged systems for industrial clients. Since then, it has expanded When completed in 2004, the plant will be the largest source of
its portfolio to become a full-fledged manufacturer of advanced revenue for the Hyflux Group in China. China currently already
proprietary membranes as well. The ability to develop and accounts for a substantial part of the Group’s revenues.
manufacture membranes provides a robust foundation for further Industrialisation and growing affluence in the country will offer
business growth and helps differentiate the Group from its exciting opportunities for Hyflux as the Group continues its march
competitors. Hyflux’s proprietary membranes are also finding towards regional growth.
demand in overseas markets.
CLEARLY A
REFRESHING WAY FORWARD
HYFLUX GROUP OF COMPANIES
P.16. 17
WAVES OF INNOVATION
At present, Singapore’s water supply is collected through three main Through Hyflux’s 2% stake in Air 2 Water Inc, an American company
sources, also known as the “three taps”. They are namely: (a) water which holds the 20-year patent for the Air 2 Water technology, Hyflux
catchment areas like the local reservoirs, (b) importation of water will manufacture the machines in Asia. Hyflux has established
and (c) new alternative sources like NEWater. In 2005, the nation’s companies having exclusive manufacturing and marketing rights
very first desalination plant will become the “fourth tap” to meet the covering almost all of Asia, China, India and Australia. Hyflux has a
increasing demand of water consumption. 75% equity stake in both joint ventures.
The Group is always searching for new and cutting edge technologies With original manufacturing targets of 10, 000 units in 2003, it is
to meet modern, escalating water needs, through the spirit of targeting the Asian market where bottled water consumption hit
entrepreneurial endeavour. 25.6 billion litres in 2000, representing 23% of the global bottled
water consumption. Currently, Asia accounts for 15% of the bottled
At Hyflux, a true entrepreneurial culture is painstakingly nurtured at water market global share valued in 2000 at US$4.7 billion, but this
all levels of management. Motivation runs high for all staff, a clear is expected to surge significantly in coming years. Furthermore, the
effect of overall dynamism and business vitality. three largest Asian markets – China, Indonesia and Thailand – have
joined the world’s top ten markets for the bottled water market.
The Group is ever vigilant in seizing new opportunities and Clearly there is excellent global potential for Hyflux AquovateTM
assimilating best practices to stay ahead of the competition, being revolutionary patented technology.
a firm believer in training and infusing new technology at its business
activities. Products made to harness the Aquovate TM Technology will bear the
made-in-Singapore label, a well known mark of quality. This will
THE 5TH TAP - AQUOVATETM TECHNOLOGY help establish the “Made in Singapore” brand name on the global
Our commitment to water safety in an increasingly uncertain world technology map. In addition, Hyflux will market and brand
drives breakthrough technologies. Aquovate TM Technology aggressively with great care over its image
and profile. Hyflux will further increase and deepen its product
As the technology that makes water out of thin air, Hyflux launch of portfolio in the future and concurrently developing new markets
Aquovate TM Technology marks the Group’s first foray into the and opportunities.
consumer market. This patented technology, based on the building
blocks of Hyflux’s advanced membrane and purification technology,
will revolutionise the drinking water industry. In a broader framework,
it is the viable solution to more than 1 billion people worldwide who
were previously denied ready access to high quality drinking water.
P.18. 19
Water is an increasingly precious global resource, and water HARNESS PROPRIETARY TECHNOLOGY
treatment a growing industry. The United Nations estimates that Hyflux will continually be on the look-out for new and applicable
by 2025, about 5 billion people will find it difficult or impossible to technology in the fluid and water treatment business. Hyflux will
meet their needs for fresh water. In Singapore and beyond, Hyflux step up in-house R & D activities and also look to the possibility of
is determined to be a key part of the answer to this increasingly acquiring complementary technologies through direct investment
urgent need. or joint development.
Since 1989, Hyflux has successfully partnered with more than 200 BUILD RECURRING INCOME STREAMS AND FOCUS ON
clients from Asia Pacific and Africa. International players have singled CORE BUSINESS
out Hyflux as a preferred partner for their flagship projects due to The Group seeks to grow the core business and increase market
the Group’s outstanding professionalism and world wide recognition share in the industrial and municipal sectors by offering outright
of its capabilities and values. sales or BOT programs, at the same time leveraging proprietary
technology to secure larger value projects and developing new
In 2002, Hyflux continued to receive accolades for outstanding applications and new markets.
performance.
INVEST IN SYNERGISTIC BUSINESSES
ISO 9001:2000 Hyflux will leverage proprietary membrane technology to develop
In May 2002, Hyflux announced the attainment of ISO 9001: 2000 new applications for the treatment of process streams and other
for “The Manufacturing of Membrane Products for Filtration”. liquids, especially in the high value and fast growing area of
The certification is a reflection of a high standard of manufacturing biotechnology. The group will also explore potential tie-ups with
quality for in-house manufactured membranes. It also signals synergistic partners to apply these new technologies in large growing
Hyflux’s commitment to go the extra mile to ensure that its products markets such as China and other parts of Asia.
will consistently meet the high expectations of all its customers.
THE CLEAR PROMISE
FORBES WORLD’S 200 BEST SMALL COMPANIES 2002 2002 has laid the foundation for strong future success. The Hyflux
Hyflux made a debut on Forbes Global magazine’s list of the world’s Group has embarked on an infrastructure-building exercise to
200 best small companies in 2002. The “200 Best” list is, according prepare for the realisation of big league projects. Recent acquisitions
to Forbes, “a compilation of financially strong small-cap businesses” have increased the number of membrane production lines, expanded
and that “each company on this list has earned its place and is, fabrication workshops and upgraded R & D facilities. Hyflux looks
indeed, good enough to be called one of the best”. to the future with optimism borne of entrepreneurial spirit and
innovation, a commitment to improve the environment and total
MOST ADMIRED SESDAQ COMPANY 2002 professionalism.
Hyflux was presented with the Most Admired Sesdaq Company
Award in November 2002 by Smart Investor magazine. A poll was The Group’s clients have been a source of constant strength and
conducted with 400 readers of Smart Investor between August and support for Hyflux’s growth, both in Singapore and abroad. Hyflux
September 2002. The Hyflux Group received the most votes in the values its partnerships with its clients and embarks on every project
poll. This is recognition of the investment community’s confidence with the understanding to provide the best value proposition – in
in the company and the direction in which the management is leading terms of experience, innovation, speed and cost-efficiency.
the company.
In the past year, the Hyflux Group won several milestone water
BEST SMALL COMPANY IN ASIAMONEY’S BEST MANAGED treatment projects. This has placed Hyflux on the regional map as
COMPANIES POLL 2002 a major water treatment company capable of competing on equal
Hyflux was awarded “Singapore’s Best Small Company 2002" by footing with internationally recognised water treatment firms.
Asiamoney in the categories of Southeast Asia Best Managed The continued success of the Hyflux Group is largely due to the
Companies, Best Corporate Governance and Deals of the Year 2002. sound business fundamentals and the entrepreneurial spirit that
This marked the recognition which global investors accord Hyflux. exists in our company.
CASCADING SUCCESS Hyflux’s strength lies in the common vision shared by all in the Hyflux
Hyflux’s strategy reinforces its aim to be the world leading water group of companies. We have witnessed the passion and drive of
treatment company. It is founded on the recognition that Hyflux needs the staff at all levels within Hyflux and together, Hyflux will continue
to focus on building on its proprietary membrane know-how and core to play a major role in Singapore as well as in the region to meet the
business in order to expand overseas and secure long-term growth. need for advanced membrane filtration, and above all, clean water
With business opportunities in water reclamation picking up around for tomorrow’s needs, today.
the region, Hyflux’s priority will be to build a solid platform in Singapore
and strengthen customer and product delivery for regional expansion.
CORPORATE STRUCTURE
HYFLUX LTD
HANGZHOU
HYFLUX HYFLUX
SINGSPRING HYFLUX HYDROCHEM HYDROCHEM ZHEDA HUALU
AQUOSUS INTERNATIONAL
PTE LTD ENGINEERING (S) PTE LTD ENGINEERING MEMBRANE
(SINGAPORE) LTD
(70%) PTE LTD (100%) (S) PTE LTD ENGINEERING
PTE LTD (100%) (100%) (100%) CO. LTD.
(75%)
(55%)
COMPANY SECRETARY
Lim Kim Seng
REGISTERED OFFICE
40 Changi South Street 1
Singapore 486764
AUDITORS
Ernst & Young
Partner in charge: Max Loh Khum Whai (since 2002)
BANKERS
The Development Bank of Singapore
Oversea-Chinese Banking Corporation
DIRECTORS’ REPORT 01
STATEMENT BY DIRECTORS 09
AUDITORS’ REPORT 10
BALANCE SHEETS 11
PROFIT AND LOSS ACCOUNTS 13
STATEMENTS OF CHANGES IN EQUITY 14
CONSOLIDATED STATEMENT OF CASH FLOWS 15
NOTES TO THE FINANCIAL STATEMENTS 17
SUPPLEMENTARY INFORMATION 46
HYFLUX LTD AND SUBSIDIARIES
01
DIRECTORS’ REPORT
The directors are pleased to present their report to the members together with the audited financial statements of the Company and
of the Group for the financial year ended 31 December 2002.
DIRECTORS
The directors of the Company in office at the date of this report are:
PRINCIPAL ACTIVITIES
The principal activities of the Company are those of an investment holding company and manufacturing of membranes. The principal
activities of the subsidiaries are shown in Note 15 to the financial statements.
There have been no significant changes in the nature of these activities during the financial year.
GROUP COMPANY
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
$’000 $’000
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
Except as disclosed in the financial statements, there were no material transfers to or from reserves or provisions during the financial year.
DIRECTORS’ REPORT (CONTINUED)
During the financial year, the Company incorporated the following subsidiary:
Hyflux International Ltd British Virgin Islands Investment holding, selling, distribution, 100%
import and export of products and
component systems in liquid treatment.
Provision of engineering expertise,
maintenance services and technical
know-how.
(a) During the financial year, the Company increased its issued and paid up capital as follows:
(i) Issue of 10,000,000 new ordinary shares of $0.05 each at $1.235 per share to BNP Paribas Peregrine as private placement
agent for cash;
(ii) Bonus issue of 1 ordinary share for every 4 existing ordinary shares of $0.05 each; and
(iii) Issue of 983,000 ordinary shares of $0.05 each at $0.504 per share for cash pursuant to the Hyflux Employees’ Share
Option Scheme.
(b) During the financial year, the subsidiaries issued the following shares:
(i) Hyflux International Ltd issued 2 ordinary share of US$1 each at par for cash for the purposes of incorporation;
(ii) Hydrochem (S) Pte Ltd increased its authorised share capital from $800,000, comprising 800,000 ordinary shares of $1 each
to $2,000,000, comprising 2,000,000 ordinary shares of $1 each. It also issued 1,000,000 ordinary shares of $1 each at par
for cash to provide additional working capital.
(iii) Hangzhou Zheda Hyflux Hualu Membrane Technology Co., Ltd increased its paid-in capital from RMB18,034,091 to
RMB24,450,000 for cash.
(c) During the financial year, Hydrochem Engineering (Shanghai) Co., Ltd increased its paid-in capital from US$1,204,423 to
US$1,920,000 for cash.
All new shares issued rank pari passu in all respects with the existing ordinary shares of the respective companies.
Except as disclosed above, the Company and its subsidiaries did not issue any other shares or debentures during the financial year.
Except for the Hyflux Employees’ Share Option Scheme granted to certain directors of the Company, neither at the end of nor at any
time during the financial year was the Company a party to any arrangement whose object was to enable the directors of the Company
to acquire benefits by means of the acquisition of shares or debentures of the Company or any other body corporate.
HYFLUX LTD AND SUBSIDIARIES
P.02. 03
The interests of the directors who held office at the end of the financial year in the shares or debentures of the Company and related
corporations, according to the register kept by the Company for the purposes of Section 164 of the Companies Act, were as follows:
AT 1 AT 31 AT 21 AT 1 AT 31 AT 21
JANUARY DECEMBER JANUARY JANUARY DECEMBER JANUARY
2002 2002 2003 2002 2002 2003
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
THE COMPANY
By virtue of Section 7 of the Companies Act, Cap. 50, Lum Ooi Lin is deemed to have an interest in the shares held by the Company
in all its subsidiaries.
No other director had an interest in any shares or debentures of the Company or related corporations either at the beginning or the
end of the financial year or 21 January 2003.
DIVIDENDS
Dividends paid or proposed since the end of the previous financial year were as follows:
$’000
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
An interim dividend of 1 cent per share, less tax at 22%, in respect of the year ended 31 December 2002,
proposed and paid 1,834
A final dividend of 0.5 cent per share, less tax at 22%, in respect of the year ended 31 December 2002,
proposed by the directors and subject to approval by shareholders at the forthcoming Annual General Meeting of
the Company 921
DIRECTORS’ REPORT (CONTINUED)
Before the profit and loss account and balance sheet of the Company were made out, the directors took reasonable steps to ascertain
that proper action had been taken in relation to the writing off of bad debts and the making of provision for doubtful debts, and have
satisfied themselves that no debts of the Company need to be written off as bad and that no provision for doubtful debts was required.
At the date of this report, the directors are not aware of any circumstances which would render any amount written off or the amount
of provision for doubtful debts in the Group inadequate to any substantial extent.
CURRENT ASSETS
Before the profit and loss account and balance sheet of the Company were made out, the directors took reasonable steps to ascertain
that any current assets which were unlikely to realise their book values in the ordinary course of business have been written down to
their estimated realisable values or adequate provision had been made for the diminution in value of such current assets.
At the date of this report, the directors are not aware of any circumstances which would render the values attributed to current assets
in the consolidated financial statements misleading.
Since the end of the financial year, and up to the date of this report, no charge on the assets of the Company or any corporation in the
Group which secures the liabilities of any other person and no contingent liability of the Company or any corporation in the Group
has arisen.
No contingent or other liability has become enforceable or is likely to become enforceable within the period of twelve months after the
end of the financial year which, in the opinion of the directors, will or may substantially affect the ability of the Company or of the Group
to meet their obligations as and when they fall due.
At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in this report or in the consolidated
financial statements which would render any amount stated in the financial statements of the Company and consolidated financial
statements misleading.
UNUSUAL ITEMS
In the opinion of the directors, the results of the operations of the Company and of the Group during the financial year have not been
substantially affected by any item, transaction or event of a material and unusual nature.
HYFLUX LTD AND SUBSIDIARIES
P.04. 05
In the opinion of the directors, no item, transaction or event of a material and unusual nature has arisen in the interval between the end
of the financial year and the date of this report which would affect substantially the results of the operations of the Company and of the
Group for the financial year in which this report is made.
SHARE OPTIONS
The Hyflux Employees’ Share Option Scheme (the “Scheme”) was approved by the members of the Company at an Extraordinary
General Meeting held on 27 September 2001. The Scheme provides an opportunity for employees of the Company and its subsidiaries,
other than substantial shareholders of the Company, to participate in the equity of the Company.
The Scheme is administered by a committee comprising directors, namely Ms Olivia Lum Ooi Lin and Mr Gay Chee Cheong who are
not participants of the Scheme. It shall continue to be in force at the discretion of the Committee for a period of 10 years from
27 September 2001. However, the period may be extended with the approval of members at a general meeting of the Company and
of any relevant authorities which may then be required.
The options granted by the Company to directors holding office at the end of the financial year were as follows:
* On 17 June 2002, the Company made a bonus issue of 1 ordinary share for every 4 existing ordinary shares of $0.05 each.
Correspondingly, the quantity and exercise price on the options granted previously on 15 October 2001 were adjusted.
The exercise price was adjusted from $0.63 per share to $0.504 per share.
** These additional options arose due to the bonus issue of shares on 17 June 2002, as described above.
Except for the above, no options have been granted to controlling shareholders or directors of the Company or their associates and no
employee has received 5% or more of the total options available under the Scheme.
DIRECTORS’ REPORT (CONTINUED)
At the end of the financial year, details of the options granted under the Scheme on the unissued ordinary shares of $0.05 each of the Company were as follows:
NO.OF
DATE OF BALANCE BALANCE HOLDERS EXERCISE
GRANT AS AT OPTIONS BONUS OPTIONS OPTIONS AS AT AS AT PRICE EXERCISABLE
OF OPTIONS 1.1.2002 GRANTED OPTIONS* LAPSED EXERCISED 31.12.2002 31.12.2002 $ PERIOD
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
* These additional options arose due to the bonus issue of shares on 17 June 2002.
Except as disclosed above, no other options to take up unissued shares of the Company or any subsidiary were granted and no other shares were issued by virtue of the exercise of options
to take up unissued shares of the Company or any subsidiary.
HYFLUX LTD AND SUBSIDIARIES
P.06. 07
DIRECTORS’ REPORT (CONTINUED)
AUDIT COMMITTEE
The Audit Committee comprises three independent directors, one of whom is also the Chairman of the Audit Committee and one
Executive Director. The members of the Audit Committee are:
The Audit Committee performs its functions in accordance with Section 201B(5) of the Companies Act, Cap 50 and the requirements
of the Singapore Exchange.
The Audit Committee meets periodically to discuss and review the following:
(a) review with the external auditors the audit plan, their evaluation of the system of internal controls, their audit report and their
management letter relating to improvements in internal control;
(b) review the half-year and annual financial statements and balance sheet and profit and loss accounts before submission to the
Board of Directors for approval, focusing in particular, on changes in accounting policies and practices, major risk areas, significant
adjustments resulting from the audit, the going concern statement, compliance with accounting standards as well as compliance
with any stock exchange and statutory/regulatory requirements;
(c) review the internal control and procedures and ensure co-ordination between the external auditors and the management, reviewing
the assistance given by the management to the auditors, and discussing problems and concerns, if any arising from the interim
and final audits, and any matters which the auditors may wish to discuss (in the absence of the management where necessary);
(d) review and discuss with the external auditors any suspected fraud or irregularity, or suspected infringement of any relevant laws,
rules or regulations, which has or is likely to have a material impact on the Group’s operating results or financial position;
(e) consider the appointment or re-appointment of the external auditors and matters relating to resignation or dismissal of the auditors;
(f) review transactions falling within the scope of Chapter 9A and Clause 1006 of the SGX-ST Listing Manual;
(g) undertake such other reviews and projects as may be requested by the Board and will report to the Board of Directors its findings
from time to time on matters arising and requiring the attention of the Audit Committee; and
(h) generally undertake such other functions and duties as may be required by statute or the Listing Manual, and by such amendments
made thereto from time to time.
The Audit Committee has recommended to the Board of Directors the nomination of Ernst & Young for re-appointment as auditors at
the forthcoming Annual General Meeting of the Company.
DIRECTORS’
DIRECTORS’ REPORT
REPORT (CONTINUED)
(CONTINUED)
(a) No material contracts to which the Company or any subsidiary is a party and which involve directors’ interests subsisted at the
end of the financial year, or have been entered into since the end of the previous financial year.
(b) The net proceeds of the Private Placement were used for the Group’s working capital.
AUDITORS
Ernst & Young have expressed their willingness to accept re-appointment as auditors.
DEIRDRE MURUGASU
DIRECTOR
SINGAPORE
17 MARCH 2003
HYFLUX LTD AND SUBSIDIARIES
P.08. 09
STATEMENT BY DIRECTORS
We, Olivia Lum Ooi Lin and Deirdre Murugasu, being two of the directors of Hyflux Ltd, do hereby state that, in the opinion of the directors,
(i) the accompanying balance sheets, profit and loss accounts, statements of changes in equity and consolidated cash flow statement
together with notes thereto, set out on pages 11 to 45 are drawn up so as to give a true and fair view of the state of affairs of the
Company and of the Group as at 31 December 2002 and of the results and changes in equity of the Company and of the Group
and cash flows of the Group for the year then ended, and
(ii) at the date of this statement there are reasonable grounds to believe that the Company will be able to pay its debts as and when
they fall due.
The board of directors authorised these financial statements for issue on 17 March 2003.
DEIRDRE MURUGASU
DIRECTOR
SINGAPORE
17 MARCH 2003
AUDITORS’ REPORT TO THE MEMBERS OF HYFLUX LTD
We have audited the financial statements of Hyflux Ltd set out on pages 11 to 45. The financial statements comprise the balance
sheets of the Company and of the Group as at 31 December 2002, the profit and loss accounts and the statements of changes in
equity of the Company and of the Group and cash flows statement of the Group for the year ended 31 December 2002, and notes
thereto. These financial statements are the responsibility of the Company’s directors. Our responsibility is to express an opinion on
these financial statements based on our audit. The financial statements for the year ended 31 December 2001 were audited by
another auditor, whose report dated 8 April 2002, expressed an unqualified opinion on those financial statements.
We conducted our audit in accordance with Singapore Standards on Auditing. Those Standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by the directors, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion,
(a) the financial statements are properly drawn up in accordance with the provisions of the Singapore Companies Act (Act) and
Singapore Statements of Accounting Standard and so as to give a true and fair view of:
(i) the state of affairs of the Company and of the Group as at 31 December 2002 and of the results and changes in equity of the
Company and of the Group and cash flows of the Group for the year ended on that date; and
(ii) the other matters required by section 201 of the Act to be dealt with in the consolidated financial statements;
(b) the accounting and other records required by the Act to be kept by the Company and by those subsidiaries incorporated in
Singapore of which we are the auditors have been properly kept in accordance with the provisions of the Act.
We have considered the financial statements of the subsidiaries of which we have not acted as auditors, being financial statements
included in the consolidated financial statements. The names of these subsidiaries are stated in Note 15.
We are satisfied that the financial statements of the subsidiaries that have been consolidated with the financial statements of the
Company are in form and content appropriate and proper for the purposes of the preparation of the consolidated financial statements
and we have received satisfactory information and explanations as required by us for those purposes.
The auditors’ reports on the financial statements of the subsidiaries were not subject to any qualification and in respect of subsidiaries
incorporated in Singapore did not include any comment made under section 207(3) of the Act.
SINGAPORE
17 MARCH 2003
HYFLUX LTD AND SUBSIDIARIES
P.10. 11
BALANCE SHEETS
AS AT 31 DECEMBER 2002
CURRENT ASSETS
Cash and bank balances 3,770 3,657 132 46
Fixed deposits 3 13,338 899 9,283 –
Stocks 4 5,402 2,880 619 113
Trade debtors 5 12,813 4,819 2,613 –
Work-in-progress 6 16,195 14,342 – –
Other debtors, deposits and prepayments 7 2,379 1,583 1,006 223
Due from subsidiaries (non-trade) 8 – – 26,400 15,135
Due from subsidiaries (trade) – – 4,757 1,435
Total current assets 53,897 28,180 44,810 16,952
CURRENT LIABILITIES
Bank overdrafts (unsecured) 9 – 135 – –
Trade creditors 5,374 1,385 469 161
Other creditors and accruals 10 1,932 1,471 437 182
Provision for income tax 387 2,269 – –
Provision for warranty 11 50 50 – –
Hire purchase creditors, current 12 47 49 – –
Finance lease creditors, current 13 14 5 – –
Short-term loans 9 1,686 1,208 – –
Long-term loans, current 9 1,623 445 1,154 –
Total current liabilities 11,113 7,017 2,060 343
Net current assets 42,784 21,163 42,750 16,609
BALANCE SHEETS (CONTINUED)
AS AT 31 DECEMBER 2002
NON-CURRENT ASSETS
Fixed assets 14 13,021 11,204 1,103 646
Subsidiaries 15 – – 8,039 4,631
Associated company 16 255 306 – –
Long-term investment 17 1,735 – – –
Intangibles 18 3,506 3,556 – –
Total non-current assets 18,517 15,066 9,142 5,277
NON-CURRENT LIABILITIES
Hire purchase creditors, non-current 12 73 119 – –
Finance lease creditors, non-current 13 63 14 – –
Deferred tax liabilities 30 489 489 – –
Long-term loans, non-current 9 4,267 891 3,846 –
Total non-current liabilities 4,892 1,513 3,846 –
Total net assets 56,409 34,716 48,046 21,886
The accounting policies and explanatory notes on pages 17 to 45 form an integral part of the financial statements.
HYFLUX LTD AND SUBSIDIARIES
P.12. 13
PROFIT AND LOSS ACCOUNTS
FOR THE YEAR ENDED 31 DECEMBER 2002
PROFIT BEFORE TAXATION AND MINORITY INTERESTS 11,803 9,447 17,733 1,259
Taxation 30 56 (2,097) (2,364) (229)
The accounting policies and explanatory notes on pages 17 to 45 form an integral part of the financial statements.
STATEMENTS OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2002
The accounting policies and explanatory notes on pages 17 to 45 form an integral part of the financial statements.
HYFLUX LTD AND SUBSIDIARIES
P.14. 15
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2002
$’000 $’000
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
$’000 $’000
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
GROUP
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
2002 2001
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
$’000 $’000
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
The accounting policies and explanatory notes on pages 17 to 45 form an integral part of the financial statements.
HYFLUX LTD AND SUBSIDIARIES
P.16. 17
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2002
The financial statements of Hyflux Ltd and the consolidated financial statements of the Group for the year ended 31 December
2002 were authorised for issue in accordance with a directors’ resolution on 17 March 2003.
The Company is a public limited company domiciled and incorporated in Singapore. The address of the Company’s registered
office is 40 Changi South Street 1 Singapore 486764.
The principal activities of the Company are those of an investment holding company and the manufacturing of membranes.
The principal activities of the subsidiaries are shown in Note 15 to the financial statements.
The Company and the Group employed Nil and 352 employees (2001: Nil and 257) as at 31 December 2002, respectively.
A subsidiary, Hydrochem (S) Pte Ltd, provides operational and administrative support to the Company.
The results of subsidiaries acquired or sold during the year are consolidated for the periods from or to the date of
acquisition or disposal. All intercompany balances, transactions and any unrealised profit or loss on intercompany
transactions are eliminated on consolidation.
When a subsidiary or associated company is acquired, any difference between the consideration paid and the fair
values of the net assets acquired is amortised on a straight-line basis to the consolidated profit and loss account over
the period of expected benefit not exceeding 5 years.
Investment in associated company is accounted for in the consolidated financial statements using the equity method.
The Group’s share of the post-acquisition results of associated companies is included in the consolidated profit and
loss account. The Group’s share of the post-acquisition accumulated profits and reserves of associated companies is
included in the carrying value of the investment in the consolidated balance sheet.
Goodwill and fair value adjustments arising on the acquisition of a foreign subsidiary are treated as assets or liabilities
of the foreign subsidiary and translated at exchange rates ruling at the balance sheet date.
In the preparation of the consolidated financial statements, the balance sheets of foreign subsidiaries and associated
companies are translated into Singapore dollars at rates of exchange ruling at the balance sheet date except for share
capital and reserves which are translated at historical rates of exchange. Operating results are translated at average
rates of exchange for the year. Translation differences are taken to translation reserve.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
A subsidiary is a company in which the Group, directly or indirectly, holds more than half of the issued share capital,
or controls more than half of the voting power, or controls the composition of the board of directors.
An associated company is a company, not being a subsidiary, in which the Group has an interest of not less than 20%
of the equity and in whose financial and operating policy decisions the Group exercises significant influence.
Depreciation is provided on all fixed assets at the following rates to write off the cost, less estimated residual value of
each asset on a straight-line basis over their estimated useful lives:
Construction-in-progress represents buildings and plants under construction and is stated at cost. This includes cost
of construction, plant and equipment and other direct costs. Construction-in-progress is not depreciated until such
time as the relevant assets are completed and put into operational use.
(F) INTANGIBLES
(I) INTELLECTUAL PROPERTY RIGHTS
The initial cost of acquiring intellectual property rights is capitalised and amortised on a straight-line basis
over the period of their expected benefits, which normally does not exceed 5 years.
P.18. 19
(G) STOCKS
Stocks are valued at the lower of cost and net realisable value. Costs include materials, all direct expenditure and all
costs in bringing the stocks to their present location and condition, determined on a first-in, first-out basis.
Net realisable value represents the estimated selling price in the ordinary course of business, less estimated costs of
completion and the estimated costs necessary to make the sale.
(H) WORK-IN-PROGRESS
Work-in-progress is stated at cost plus attributable profit net of progress billings and provision for foreseeable losses.
Receivables from related parties are recognised and carried at cost less provision for doubtful debts.
Reversal of an impairment loss recognised in prior years is recorded when there is an indication that the impairment
loss recognised for an asset no longer exists or has decreased. The reversal is recorded in the profit and loss account
or as a revaluation increase.
Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased assets are
classified as operating leases. Operating lease payments are recognised as an expense in the profit and loss account
on a straight-line basis over the lease term.
(O) BORROWINGS
Borrowings are carried at cost net of transaction costs.
When the outcome of a contract cannot be estimated reliably, revenue is recognised only to the extent of contract
costs incurred that is probable to be recoverable.
Dividend income is recognised when the shareholder’s rights to receive payment is established.
(Q) GRANTS
These relate to grants received from the National Science and Technology Board (“NSTB”) and Economic Development
Board (“EDB”) for certain projects undertaken by the Company. Such grants received are taken to the profit and loss
account and matched against related costs incurred during the year which they are intended to compensate.
Deferred tax liabilities are recognised for all taxable temporary differences associated with investments in subsidiaries
and associates except where the timing of the reversal of the temporary difference can be controlled and it is probable
that the temporary difference will not reverse in the foreseeable future.
HYFLUX LTD AND SUBSIDIARIES
P.20. 21
Deferred tax assets are recognised for all deductible temporary differences and carry-forward of unused tax losses,
to the extent that it is probable that taxable profit will be available against which the deductible temporary differences
and carry-forward of unused tax losses can be utilised.
At each balance sheet date, the Group re-assesses unrecognised deferred tax assets and the carrying amount of
deferred tax assets. The Group recognises a previously unrecognised deferred tax asset to the extent that it has
become probable that future taxable profit will allow the deferred tax asset to be recovered. The Group conversely
reduces the carrying amount of a deferred tax asset to the extent that it is no longer probable that sufficient taxable
profit will be available to allow the benefit of part or all of the deferred tax asset to be utilised.
(V) SEGMENTS
For management purposes, the Group is organised into 2 major geographical segments. The divisions are the basis on
which the Group reports its primary segment information.
Segment revenue, expenses and results include transfers between geographical segments and between business
segments. Such transfers are accounted for on an arm’s length basis.
During the financial year, the Group applied SAS 12 (2001), Income Taxes, which became effective for financial years
beginning on or after 1 April 2001.
SAS 12 (2001) requires deferred tax to be calculated using the balance sheet liability method, for all temporary differences
at the balance sheet date between the carrying amounts of assets and liabilities and the amounts used for income tax
purposes. Deferred tax assets should be recognised when it is probable that sufficient taxable profit will be available
against which the deferred tax assets can be utilised. Previously tax was deferred on account of differences only to the
extent that a tax liability was expected to materialise in the foreseeable future.
There is no significant impact on the current financial statements as a result of this change in accounting policy.
During the financial year ended 31 December 2001, the Group retroactively changed its policy from recognising dividends
proposed or declared after balance sheet date as a liability to disclosing such dividends as a subsequent event in
accordance with SAS 10, Events after the Balance Sheet Date. As a result, as at 1 January 2001, the accumulated
profits of the Company decreased by $62,665 while that of the Group’s increased by $644,362.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
These fixed deposits bear interest at rates ranging from 0.4375% to 1.6600% (2001: 0.93% to 6.04%) per annum with maturities
within one year.
04. STOCKS
GROUP COMPANY
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
AT COST
Raw materials carried at net realisable value amounted to approximately $3,358,000 (2001: $2,385,000).
GROUP COMPANY
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
P.22. 23
GROUP COMPANY
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
06. WORK-IN-PROGRESS
GROUP
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
2002 2001
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
$’000 $’000
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
GROUP COMPANY
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
Deposits 39 145 – –
Prepayments 136 299 – 177
Sundry debtors 2,271 1,210 1,006 46
2,446 1,654 1,006 223
Provision for doubtful debts (67) (71) – –
2,379 1,583 1,006 223
These non-trade balances are unsecured, interest-free and expected to be repaid within 12 months.
(a) For the previous financial year ended 31 December 2001, the bank overdrafts were unsecured and guaranteed by joint
and several personal guarantees from certain directors. Interest was charged at the prevailing prime lending rate of
the banks.
(b) The short-term bank loans are unsecured and interest rates range from 4.8675% to 6.4170% (2001: 5.35% to 5.85%)
per annum.
(c)
GROUP COMPANY
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
The long-term bank loans are unsecured. One of the long-term bank loans has interest charged at Swap Offer Rate plus 1.5%
per annum, which is hedged using an interest rate swap. The remaining loans have interest charged at 5.49% to 5.94%
(2001: 5.94%) per annum.
GROUP COMPANY
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
P.24. 25
GROUP
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
2002 2001
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
$’000 $’000
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
GROUP
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
MINIMUM PRESENT
LEASE VALUE OF
PAYMENTS INTEREST PAYMENTS
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
2002
2001
Hire purchase terms range from 5 to 7 years. Hire purchase terms do not contain restrictions concerning dividends, additional
debt or further hire purchase. The effective interest rate is 5.19% (2001: 5.19%) per annum.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
GROUP
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
MINIMUM PRESENT
LEASE VALUE OF
PAYMENTS INTEREST PAYMENTS
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
2002
2001
Lease terms are 5 years with options to purchase at the end of the lease terms. Lease terms do not contain restrictions
concerning dividends, additional debt or further leasing. The effective interest rate is 7.86% (2001: 9.05%) per annum.
14. FIXED ASSETS
LEASEHOLD
PROPERTIES FURNITURE
PLANT AND MOTOR OFFICE AND AND CONSTRUCTION-
MACHINERY VEHICLES COMPUTERS EQUIPMENT IMPROVEMENTS FITTINGS RENOVATION IN-PROGRESS TOTAL
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
GROUP
COST
At 1.1.2002 2,628 1,624 318 339 7,101 283 271 1,179 13,743
Additions 889 360 136 426 124 123 21 1,215 3,294
Disposals (4) (18) – (42) – (9) (17) – (90)
Translation difference (66) (27) – (9) – (12) (3) (96) (213)
At 31.12.2002 3,447 1,939 454 714 7,225 385 272 2,298 16,734
ACCUMULATED DEPRECIATION
At 1.1.2002 769 810 274 183 218 141 144 – 2,539
Charge for the year 465 333 102 97 201 60 45 – 1,303
Disposals – (36) – (31) – (7) (2) – (76)
Translation difference (23) (18) – (2) – (7) (3) – (53)
At 31.12.2002 1,211 1,089 376 247 419 187 184 – 3,713
COMPANY
COST
At 1.1.2002 641 150 791
Additions 689 – 689
At 31.12.2002 1,330 150 1,480
ACCUMULATED DEPRECIATION
At 1.1.2002 110 35 145
Charge for the year 202 30 232
At 31.12.2002 312 65 377
The Group had motor vehicles and office equipment under hire purchase and finance leases with net book values of approximately
$163,000 and $76,000 (2001: $292,000 and $20,000) respectively.
During the financial year, the Group acquired fixed assets with an aggregate cost of $3,294,883 (2001: $6,592,486) which $84,410
(2001: $13,602) was acquired by means of finance lease. Cash payments of $3,210,473 (2001: $6,578,884) were made to
purchase fixed assets.
HYFLUX LTD AND SUBSIDIARIES
P.28. 29
15. SUBSIDIARIES
COMPANY
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
2002 2001
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
$’000 $’000
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
EFFECTIVE
COUNTRY OF EQUITY
INCORPORATION INTEREST
PRINCIPAL AND PLACE HELD BY COST OF
NAME OF COMPANY ACTIVITIES OF BUSINESS THE GROUP INVESTMENT
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
% % $’000 $’000
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
EFFECTIVE
COUNTRY OF EQUITY
INCORPORATION INTEREST
PRINCIPAL AND PLACE HELD BY COST OF
NAME OF COMPANY ACTIVITIES OF BUSINESS THE GROUP INVESTMENT
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
% % $’000 $’000
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
HELD BY SUBSIDIARIES
P.30. 31
2002 2001
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
$’000 $’000
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
Stocks – 1,167
Trade debtors – 623
Due from holding company (non-trade) – 4,215
Other debtors, deposits and prepayments – 1,060
Cash and bank balances – 930
Trade creditors – (1,014)
Other creditors and accruals – (1,286)
Short-term loan – (632)
Fixed assets, net – 685
Intangibles – 2,407
Associated company – 334
Term loan – (1,265)
Minority interests – (3,350)
Goodwill on consolidation – 341
GROUP
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
2002 2001
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
$’000 $’000
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
COUNTRY OF
INCORPORATION EFFECTIVE EQUITY
AND PLACE OF INTEREST HELD
NAME PRINCIPAL ACTIVITIES BUSINESS BY THE GROUP
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
2002 2001
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
% %
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
GROUP
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
2002 2001
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
$’000 $’000
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
18. INTANGIBLES
INTELLECTUAL
GOODWILL ON PROPERTY DEVELOPMENT LICENSING
GROUP CONSOLIDATION RIGHTS COSTS FEES TOTAL
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
COST
At beginning of year 1,158 2,407 499 – 4,064
Adjustment (185) – – – (185)
Additions – – 657 559 1,216
At end of year 973 2,407 1,156 559 5,095
ACCUMULATED AMORTISATION
At beginning of year 297 161 50 – 508
Amortisation for the year 195 459 158 186 998
Translation difference – 83 – – 83
At end of year 492 703 208 186 1,589
HYFLUX LTD AND SUBSIDIARIES
P.32. 33
INTELLECTUAL
GOODWILL ON PROPERTY DEVELOPMENT LICENSING
GROUP CONSOLIDATION RIGHTS COSTS FEES TOTAL
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
2002 2001
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
$’000 $’000
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
Authorised:
– 1,000,000,000 ordinary shares of $0.05 each 50,000 50,000
At end of year
– 236,198,492 (2001: 178,172,394) ordinary shares of $0.05 each 11,809 8,909
During the financial year, the Company increased its issued and paid up capital as follows:
(i) Issue of 10,000,000 new ordinary shares of $0.05 each at $1.235 per share to BNP Paribas Peregrine as private placement
agent for cash;
(ii) Bonus issue of 1 ordinary share for every 4 existing ordinary shares of $0.05 each; and
(iii) Issue of 983,000 ordinary shares of $0.05 each at $0.504 per share for cash pursuant to the Hyflux Employees’ Share
Option Scheme.
All new shares issued rank pari passu in all respects with the existing ordinary shares of the Company.
The Hyflux Employees’ Share Option Scheme (“the Scheme”) was approved by the members of the Company at an Extraordinary
General Meeting held on 27 September 2001. The Scheme provides an opportunity for employees of the Company and its
subsidiaries, other than substantial shareholders of the Company, to participate in the equity of the Company.
The Scheme is administered by a committee comprising directors, namely Ms Olivia Lum Ooi Lin and Mr Gay Chee Cheong
who are not participants of the Scheme. It shall continue to be in force at the discretion of the Committee for a period of
10 years from 27 September 2001. However, the period may be extended with the approval of members at a general meeting
of the Company and of any relevant authorities which may then be required.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
At the end of the financial year, details of the options granted under the Scheme on the unissued ordinary shares of $0.05 each of the Company were as follows:
NO. OF
DATE OF BALANCE BALANCE HOLDERS EXERCISE
GRANT OF AS AT OPTIONS BONUS OPTIONS OPTIONS AS AT AS AT PRICE EXERCISABLE
OPTIONS 1.1.2002 GRANTED OPTIONS* LAPSED EXERCISED 31.12.2002 31.12.2002 $ PERIOD
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
* These additional options arose due to the bonus issue of shares on 17 June 2002.
HYFLUX LTD AND SUBSIDIARIES
P.34. 35
The share premium account may be applied only for the purposes specified in the Companies Act. The balance is not available for
distribution of dividends except in the form of shares.
GROUP
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
2002 2001
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
$’000 $’000
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
Retained by:
– the Company 13,859 324
– subsidiaries 6,594 9,652
– associated company (78) (28)
20,375 9,948
22. TURNOVER
Turnover represents contract revenue recognised using the percentage-of-completion method, dividend income from unquoted
subsidiaries and sale of membranes. Intra-group transactions have been excluded from Group turnover.
GROUP COMPANY
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
GROUP COMPANY
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
GROUP COMPANY
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
GROUP
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
2002 2001
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
$’000 $’000
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
P.36. 37
GROUP COMPANY
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
2002 2001
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
GROUP COMPANY
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
Interest expense
– bank overdrafts 4 – 1 –
– finance lease 1 2 – –
– hire purchase 8 12 – 2
– bills payable – 4 – –
– term loan 340 46 225 –
353 64 226 2
GROUP COMPANY
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
Interest income
– bank deposits 7 8 – –
– fixed deposits 76 81 16 41
– commercial papers – 87 – 87
83 176 16 128
Major components of income tax expense for the year ended 31 December were:
GROUP COMPANY
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
Current tax
– current year – 2,058 2,364 229
– over provision in respect of prior year (56) (33) – –
Deferred tax
– current year – 72 – –
(56) 2,097 2,364 229
HYFLUX LTD AND SUBSIDIARIES
P.38. 39
The reconciliation of the tax expense and the product of accounting profit multiplied by the applicable tax rate is as follows:
GROUP COMPANY
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
Tax at the applicable rate of 22% (2001: 24.5%) 2,597 2,314 3,901 308
Tax effect of:
– expenses not deductible for tax purposes 123 170 – –
– application of group relief – – (289) –
– income not subject to tax (2,972) (358) (1,248) (79)
– deferred tax assets not recognised 252 4 – –
– overprovision in respect of prior year (56) (33) – –
Tax (credit)/expense (56) 2,097 2,364 229
GROUP
In accordance with the “Income Tax Law of the People’s Republic of China for Enterprises with Foreign Investment and Foreign
Enterprises”, the subsidiary, Hydrochem Engineering (Shanghai) Co., Ltd, is entitled to full exemption from Enterprise Income
Tax (“EIT”) for the first two years and a 50% reduction in EIT for the next three years, commencing from the first profitable year
after offsetting all tax losses carried forward from the previous five years. The subsidiary is in its second profitable year after
offsetting all accumulated losses. Accordingly, no EIT is payable.
In accordance with the tax laws of the British Virgin Islands (“BVI”), the subsidiary, Hyflux International Ltd, is exempt from all
income taxes in the BVI.
COMPANY
The Company has been granted Pioneer Status in respect of production and sale of membranes. Accordingly, the Company
will enjoy for a period of 7 years, commencing from 1 September 2001, tax exemption on income arising from sale of membranes
subject to the terms and conditions of the Pioneer Status.
GROUP COMPANY
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
Earnings per share is calculated by dividing the Group’s profit after taxation and minority interests by the weighted average
number of shares in issue during the financial year of 230,241,909 (2001: 217,412,743) shares.
For fully diluted earnings per share, the weighted average number of shares in issue is adjusted for the effect of all dilutive
potential ordinary shares. Earnings per share is calculated by dividing the Group’s profit after taxation and minority interests by
234,127,416 (2001: 217,412,743) shares, being the weighted average number of shares adjusted for dilution in respect of
unissued shares of the Company pursuant to the Hyflux Employees’ Share Option Scheme.
32. DIVIDEND
2002 2001
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
$’000 $’000
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
The directors propose a final dividend of 0.5 cent per share, less tax at 22%, amounting to $921,174, in respect of the financial year
ended 31 December 2002, subject to approval by shareholders at the Annual General Meeting of the Company. The proposed final
dividend has not been recognised as a liability as at year end in accordance with SAS 10, Events after the Balance Sheet Date.
GROUP
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
2002 2001
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
$’000 $’000
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
P.40. 41
(II) AWARD OF DESALINATION PLANT PROJECT BY PUBLIC UTILITIES BOARD OF SINGAPORE (“PUB”)
PUB announced the award of the tender for the supply of 136,000 cubic metres of desalinated water a day through a
build-own-operate project to Singspring Pte Ltd, a subsidiary of the Company.
These patents cover claims for a technology that is able to produce potable water from ambient atmospheric
water vapour.
The Company will be forming two joint venture companies (“JV”) with A2W in Singapore to commercialise the Product.
The JVs will have exclusive manufacturing and marketing rights covering almost all of Asia, including ASEAN, the
People’s Republic of China, the Indian subcontinent and Australia. The Company is committed to invest US$3,750,000
in total for a 75% equity stake in each of the two JVs.
In addition to the related party information disclosed elsewhere in the financial statements, significant transactions with related
parties, on terms agreed between the parties, are as follows:
GROUP
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
2002 2001
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
$’000 $’000
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
INCOME
Service fee income from an investee company 1,329 –
Contract revenue from an investee company 5,146 –
Contract revenue from affiliated companies – 3,337
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
Information relating to the Group’s interest rate exposure is also disclosed in the notes on the Group’s borrowings, including
leasing obligations.
LIQUIDITY RISK
The Group’s main exposure to liquidity risk is in respect of funding of its project costs and other operating expense.
The Group monitors and maintains cash and cash equivalents deemed adequate by the management to finance the Group’s
operations. Short-term credit facilities are available for contingency purposes.
Currently, the Group does not have a foreign currency hedging policy. However, the management monitors foreign exchange
exposure and will consider hedging material foreign exposure should the need arise. It is the Group’s policy not to trade in
derivative contracts.
CREDIT RISK
For project contracts, management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis.
The carrying amount of cash and cash equivalents, trade debtors, other debtors and intercompany balances represent the
Group’s maximum exposure to credit risk in relation to financial assets. No other financial asset carries a significant exposure
to credit risk.
Geographical concentrations of the Group’s significant financial assets as at 31 December 2002 are as follows:
PEOPLE’S
REPUBLIC
SINGAPORE OF CHINA OTHERS GROUP
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
P.42. 43
FAIR VALUES
The following methods and assumptions are used to estimate the fair value of each class of financial instrument for which it is
practicable to estimate fair value.
Long-term investments
It is not practicable to determining the fair values of unquoted investments because of the lack of quoted market prices and
the assumptions used in valuation models to value these investments cannot be reasonably determined.
Trade debtors, other debtors and deposits and trade creditors and intercompany balances
The carrying amounts approximate fair values because these assets and liabilities are of short-term maturity.
Long-term loans
The carrying amounts approximate fair values as these instruments bear interest at variable rates.
As at 31 December, the fair values of financial assets and financial liabilities which do not approximate the carrying amounts in
the balance sheet are presented in the following table:
2002 2001
UNDERLYING CARRYING ESTIMATED CARRYING ESTIMATED
NOTE PRINCIPAL AMOUNT FAIR VALUE AMOUNT FAIR VALUE
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
Others include revenue from projects in Malaysia and other countries and dividend income.
The financial effect of the change in accounting policy disclosed in Note 2 is reflected in the Others segment for the financial
year ended 31 December 2001.
PEOPLE’S
REPUBLIC
2002 SINGAPORE OF CHINA OTHERS ELIMINATIONS GROUP
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
TURNOVER
External sales 23,902 19,820 1,545 – 45,267
Inter-segment sales 1,485 323 – (1,808) –
Dividend income – – 10,741 (10,741) –
Total turnover 25,387 20,143 12,286 (12,549) 45,267
OTHER INFORMATION
Assets 44,272 27,406 – – 71,678
Unallocated assets 736
Total assets 72,414
P.44. 45
PEOPLE’S
REPUBLIC
2001 SINGAPORE OF CHINA OTHERS ELIMINATIONS GROUP
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
TURNOVER
External sales 11,219 12,364 3,652 – 27,235
Inter-segment sales 1,399 308 – (1,707) –
Dividend income – – 936 (936) –
Total turnover 12,618 12,672 4,588 (2,643) 27,235
OTHER INFORMATION
Assets 19,601 16,001 6,478 – 42,080
Unallocated assets 1,166
Total assets 43,246
BUSINESS SEGMENTS
Turnover is reported according to business segments as follows:
TURNOVER
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
2002 2001
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
$’000 $’000
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
Segmentation by assets and capital expenditure is not meaningful as the assets are applied interchangeably amongst the
business segments.
APPROXIMATE
TOTAL GROUP’S
SITE AREA EXISTING LETTABLE EFFECTIVE
DESCRIPTION LOCATION (SQ M) USE AREA (SQ M) INTEREST (%) TENURE
Office and 5, Changi South 10,472 Office and 5,630 100 60 years
Factory Street 1, Factory commencing
Singapore from
486764 1 March 1997
Factory No.99 JuLi Road 5,633 Office and 3,241 100 50 Years
Building Zhangjiang Factory commencing
High Tech, from
Pudong 26 April 2001
Shanghai,
China 01204
MATERIAL CONTRACTS
There were no material contracts of the Company or its subsidiaries involving the interests of the Chief Executive Officer (as defined in
the SGX-ST Listing Manual), each director or controlling shareholder, either still subsisting at the end of the financial year or if not then
subsisting, entered into since the end of the previous financial year.
HYFLUX LTD AND SUBSIDIARIES
P.46. 47
SUPPLEMENTARY INFORMATION
- SGX-ST LISTING MANUAL REQUIREMENTS (CONTINUED)
CORPORATE GOVERNANCE STATEMENT
The Company is committed to maintaining a high standard of corporate governance to ensure better protection of shareholder’s
interest and value. As part of this commitment, the Group subscribes to the Code of Corporate Governance issued by the Corporate
Governance Committee in March 2001. This statement outlines the main corporate governance practices of the Company with specific
reference to the Code of Corporate Governance (the “Code”).
The Board holds regular meetings each year and has held two meetings during the financial year. The Board may convene additional
meetings to address any specific significant matters that may arise from time to time.
The Directors’ attendance at the Board and Committee Meetings for the financial year ended 31 December 2002 is as follows:
NOMINATING REMUNERATION
BOARD OF DIRECTORS AUDIT COMMITTEE COMMITTEE# COMMITTEE*
THE BOARD
She is also an Independent Director of Yeo Hiap Seng Ltd. Ms Lum holds a Bachelor of Science (Hons) degree from the National
University of Singapore.
DEIRDRE MURUGASU
Dr Murugasu was appointed as an Executive Director on 31 March 2000. She is primarily responsible for the development, application
and marketing of new products and services of the Group to relevant market sectors. Dr Murugasu holds a Masters of Medicine
(Family Medicine) from the National University of Singapore. Prior to her appointment as an Executive Director, she was a Registrar
with the Ministry of Health. She was last re-elected to the Board on 25 May 2001.
He serves on the board of a number of other companies, including Pentex-Schweizer Circuits Ltd, Avaplas Ltd and Raffles Lasalle Ltd.
He serves on the board of a number of other companies, including IPC Corporation Ltd and Unisteel Technology Limited.
He serves on the board of a number of other companies, including Giant Wireless Technology Limited, Jadason Enterprises Ltd,
SM Summit Holdings Limited, Tat Seng Packaging Group Ltd and Unisteel Technology Ltd.
P.48. 49
CHAIRMAN
The Company currently does not have a Chairman to preside over the Board. The Board is of the opinion that the process of decision-
making by the Board has been independent and had been based on collective decisions without any individual exercising any
considerable concentration of power or influence.
Independent and Non-Executive members of the Board exercise no management function in the Company or any of its subsidiaries.
Although all the directors have equal responsibilities for the performance of the Group, the role of Non-Executive Directors is primarily
to ensure that the strategies proposed by the executive management are fully discussed, vigorously examined, taking into consideration
the long-term interest of the shareholders, employees, customers, suppliers and the communities in which the Group conducts
its business.
COMMITTEES
To assist in the execution of its responsibilities, the Board has established the following specialised committees:
Each of the above Committees has its respective written terms of reference and operating procedures, which will be reviewed on a
regular basis.
with legal, accounting, financial management expertise or experience and is chaired by a Non-Executive Independent Director.
a) review with the external auditors the scope and results of the audit, system of internal controls, their management letter and
management’s response;
b) review the half-year and annual results before submission to the Board for approval including financial processes, risk management,
audit processes and compliance with the accounting standards and other regulatory requirements;
c) review the internal control and procedures and risk management;
d) review and discuss with the external auditors any suspected fraud or irregularity;
e) review the interested person transactions in accordance with the Listing Rules of the Singapore Exchange Securities Trading
Limited (“SGX-ST”);
f) review all non-audit services provided by the external auditors so as to ensure that any provision of such services would not affect
the independence of external auditors;
g) consider and recommend the appointment or re-appointment of the external auditors;
SUPPLEMENTARY INFORMATION
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CORPORATE GOVERNANCE STATEMENT (CONTINUED)
h) undertake such other reviews and projects as may be requested by the Board;
i) review the scope and results of the audit and its cost effectiveness and the independence and objectivity of the external
auditors annually;
j) to investigate any matter within its terms of reference, having full access to and co-operation by Management and full discretion to
invite any director or executive officer to attend its meetings, and reasonable resources to enable it to discharge its functions
properly;
k) generally undertake such other functions and duties as may be required by statute or the Listing Rule.
A majority of the current members are Non-Executive Directors. The Managing Director, Ms Olivia Lum Ooi Lin, has remained in the
Committee as the Committee is of the opinion that she plays an important role in contributing in-depth information on the business
aspects of the Group, as well as knowledge and understanding of the industry. The Committee has established a set of guidelines
such that any decision made by the Audit Committee requires the votes of all the Non-Executive Independent Directors.
The Committee held two meetings during the year. Amongst other things, it reviewed and recommended to the Board the release of
year-end and half-yearly financial statements, and considered and reviewed the Audit Plan for 2002.
The Audit Committee had reviewed the non-audit services provided by the external auditors which comprised tax services and is
satisfied that the provision of such services did not affect their independence. Save for fees paid for tax services rendered, no other
non-audit fees were paid.
The Audit Committee has full access to the external auditors and will hold meetings with them at least once a year without the
presence of Management. The Audit Committee has authority to access all personnel, records and other information to enable it to
properly discharge its function.
The Remuneration Committee is governed by written terms of reference and is chaired by a Non-Executive Independent Director.
A majority of the current members are Non-Executive Directors. Ms Lum plays an important role in appraising the performance of the
top executives and senior management and is therefore, a Committee member.
a) review the remuneration packages and procedures for fixing the remuneration packages of individual directors and key executive
personnel;
b) review the remuneration packages of employees who are related to the director or substantial shareholder.
Each member of the Remuneration Committee is not allowed to set his or her own remuneration.
The Non-Executive Directors are paid fees annually, taking into consideration individual contribution, attendance at various meetings
and responsibilities held at the Committee level. Such remuneration is subject to the approval of shareholders at the annual general
meeting every year.
HYFLUX LTD AND SUBSIDIARIES
P.50. 51
The Committee has full authority to engage any external professional advice on matters relating to remuneration as and when the
need arises.
The Company has existing service agreements entered into with the Executive Directors, namely, Ms Olivia Lum Ooi Lin,
Dr Deirdre Murugasu and Mr Foo Hee Kiang, which are renewable every three years. Each service agreement includes an incentive
component that is linked to the profits of the Group. The profit sharing scheme has been terminated by mutual agreement with effect
from 1 January 2002.
The Committee and the Board are of the view that the remuneration of the Directors is adequate and not excessive.
A majority of the current members are Non-Executive Directors. The Committee is of the opinion that Ms Lum’s business and technical
knowledge in this industry will assist the Committee in assessing the re-appointment of Directors, as well as in identifying suitable
candidates for appointment as members of the Board.
(a) make recommendations to the Board on the appointment of members to the Board and the Board Committees, including
recommending the appointment of Chairman of the Board as and when the need arises, having regard to the size and composition
of the Board;
(b) assess the effectiveness of the Board as a whole and the contribution by each individual Director to the effectiveness of the
Board, particularly where a Director serves on multiple Boards;
(c) assess the contribution by each Director in the Board Committees where the Director is a member; and
(d) determine the independence of each director on annual basis.
The Nominating Committee will also review and recommend to the Board on the appointment of key executives, including the Managing
Director.
The Company’s Articles of Association provide that one-third of the Board is to retire annually, by rotation at the Company’s annual
general meeting, with each director retiring at least once in every three years and newly appointed directors to retire at the next annual
general meeting following their appointment. The retiring directors are eligible to offer themselves for re-election. The Committee has
recommended the re-election of Dr Deirdre Murugasu and Mr Teo Kiang Kok who are retiring at this forthcoming Annual General
Meeting to be held on 22 May 2003. The Board has accepted the recommendation and the retiring directors would be offering
themselves for re-election.
Accordingly, Directors receive regular and timely information from Management about the Group so that they are fully equipped for
Board meetings. Detailed Board papers are prepared for each meeting and disseminated to the members before the Board meetings.
The Board papers include sufficient information from Management on financial, business and corporate matters of the Company to
enable the Directors to be properly briefed on issues to be considered at Board meetings. The Board has separate and independent
access to the Management of the Group.
Furthermore, the Board seeks independent professionals’ advice, whenever necessary for the furtherance of their duties.
The Board has full and independent access to the Company Secretary. Apart from ensuring that the Group complies with the Companies
Act, Chapter 50 and the Listing Rules of the SGX-ST, the Company Secretary is responsible for ensuring that Board procedures are
followed. The Company Secretary is required to attend all Board meetings, including the meetings of the various committees.
REMUNERATION MATTERS
Company’s Directors receiving remuneration from the Group for the year ended 31 December 2002 and 2001:
2002 2001
P.52. 53
Summary compensation table for the year ended 31 December 2002 (Group):
ALLOWANCES
AND OTHER
SALARY BONUS FEES BENEFITS TOTAL
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
BELOW S$250,000
Deirdre Murugasu 70% 6% 10% 13% 100%
Foo Hee Kiang 67% 6% 13% 14% 100%
Gay Chee Cheong 0% 0% 100% 0% 100%
Lee Joo Hai 0% 0% 100% 0% 100%
Teo Kiang Kok 0% 0% 100% 0% 100%
BELOW S$250,000
KEY EXECUTIVES OF THE GROUP
Lim Kim Seng 84% 7% 0% 9% 100%
Christopher Murugasu 78% 8% 0% 14% 100%
Stephen Chong 48% 4% 0% 48% 100%
David Hurn 75% 6% 0% 19% 100%
Grace Goh 79% 7% 0% 15% 100%
In presenting the annual financial statements and quarterly announcements to shareholders, it is the aim of the Board to provide
shareholders with a balanced and comprehensible assessment of the Group’s position and prospects on a quarterly basis. Management
provides the Board with appropriately detailed management accounts of the Group’s performance, position and prospects on a
periodic basis.
(a) satisfy itself by such means as it shall consider appropriate counter measures (that is mechanisms and processes, such as
sound internal control systems) are in place to identify and mitigate any material business risks associated with the group;
(b) ensure that a review of effectiveness of the Group’s material internal controls, including financial, operating and compliance
controls and risk management is conducted at least annually. Such review can be carried out by external auditors;
(c) ensure that the internal control recommendations made by the external auditors have been addressed or implemented by
the Management;
(d) ensure that the Board is in the position to comment on the adequacy of the internal controls of the group.
SUPPLEMENTARY INFORMATION
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CORPORATE GOVERNANCE STATEMENT (CONTINUED)
The Group is in the process of forming an in-house internal audit function that is independent of the activities it audits. The internal
audit unit will review the effectiveness of the material internal controls of the Group and report to the Audit Committee. The internal
auditors are expected to meet or exceed the standards set by nationally or internationally recognised professional bodies, including
the Standards for the Professional Practice of Internal Auditing set by The Institute of Internal Auditors.
Within this framework, the internal audit function will provide reasonable assurance that the risk incurred by the Group in each major
activity will be identified, analysed and managed by the Management. Internal Audit will also make recommendations to enhance the
effectiveness and security of the Group’s operations.
In line with the continuous disclosure obligations of the Company, pursuant to the listing rules of SGX-ST and the Companies’ Act,
Chapter 50, the Board’s policy is to keep shareholders adequately informed of major developments of the Group.
Information will be communicated to shareholders on a timely basis. Where there is inadvertent disclosure made to a select group, the
Company will make the same disclosure publicly as soon as practicable. Communication is made through:
(a) annual reports that are prepared and issued to all shareholders. The Board makes every effort to ensure that the annual report
includes all relevant information about the group, including future development and other disclosures required by the Companies’
Act, Chapter 50, and Singapore Statements of Accounting Standards;
(b) half-year and full-year financial statements comprising a summary of the financial information and affairs of the Group for the
relevant period;
(c) explanatory memoranda for annual general meetings (“AGM”) and extraordinary general meetings;
(d) media and analyst meetings for the Group’s interim and annual financial results, as well as other briefings, as appropriate;
(e) press releases on major developments of the Group;
(f) disclosures to the SGX-ST via MASNET; and
(g) the Group’s website at http://www.hyflux.com at which shareholders can access information on the Group.
In addition, shareholders are encouraged to attend the annual general meetings to ensure a high level of accountability and to stay
informed of the Group’s strategies and growth. As the annual general meeting is the principal forum for dialogue with shareholders, the
presence of the chairpersons of the audit, nominating and remuneration committees are required so as to address any question raised
at the annual general meeting.
SECURITIES TRANSACTIONS
The Company has issued a policy on dealings in the securities of the Company to its Directors and Management, setting out the
implications of insider trading and guidance on such dealings. It has adopted the Best Practices Guide on Dealings in Securities
issued by SGX-ST.
HYFLUX LTD AND SUBSIDIARIES
P.54. 55
SUPPLEMENTARY INFORMATION
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STATISTICS OF SHAREHOLDINGS
AS AT 14 APRIL 2003
DISTRIBUTION OF SHAREHOLDINGS
47.94% of the Company’s shares are held in the hands of the public. Accordingly, the Company has complied with Rule 723 of the
Listing Manual of SGX-ST.
SUBSTANTIAL SHAREHOLDERS
HYFLUX LTD
(INCORPORATED IN SINGAPORE WITH LIMITED LIABILITY)
NOTICE IS HEREBY GIVEN that the Annual General Meeting of Hyflux Ltd (“the Company”) will be held at 40 Changi South Street 1,
Singapore 486764 on 22 May 2003 at 2.30pm for the following purposes:
AS ORDINARY BUSINESS
1. To receive and adopt the Directors’ Report and the Audited Accounts of the Company for the year (RESOLUTION 1)
2. To declare a first and final dividend of 0.5 cents per ordinary share less income tax of 22% for the (RESOLUTION 2)
3. To re-elect the following Directors retiring pursuant to Article 89 of the Company’s Articles of
Association :
Deirdre Murugasu (Retiring under Article 89) (RESOLUTION 3)
Mr Teo will, upon re-election as Director of the Company, remain as member of the Audit Committee
and will be considered independent for the purposes of Rule 704(8) of Listing Manual of the Singapore
Exchange Securities Trading Limited.
4. To approve the payment of Directors’ fees of S$180,000.00 for the year ended 31 December 2002 (RESOLUTION 5)
5. To re-appoint Ernst & Young as the Company’s Auditors and to authorise the Directors to fix their (RESOLUTION 6)
remuneration.
6. To transact any other ordinary business which may properly be transacted at an Annual General
Meeting.
AS SPECIAL BUSINESS
To consider and if thought fit, to pass the following resolutions as Ordinary Resolutions, with or without
any modifications:
7. Authority to allot and issue shares up to 50 per centum (50%) of issued capital (RESOLUTION 7)
That pursuant to Section 161 of the Companies Act, Cap. 50 and Rule 806(2) of the Listing Manual
of the Singapore Exchange Securities Trading Limited, the Directors be empowered to allot and
issue shares in the capital of the Company at any time and upon such terms and conditions and for
such purposes as the Directors may, in their absolute discretion, deem fit provided that the aggregate
number of shares to be allotted and issued pursuant to this Resolution shall not exceed fifty per
centum (50%) of the issued share capital of the Company at the time of the passing of this resolution,
of which the aggregate number of shares to be issued other than on a pro rata basis to all
shareholders of the Company shall not exceed twenty per centum (20%) of the issued capital of
the Company and that such authority shall, unless revoked or varied by the Company in general
meeting, continue in force until the conclusion of the Company’s next Annual General Meeting or
the date by which the next Annual General Meeting of the Company is required by law to be held,
swhichever is earlier.
[See Explanatory Note (i)]
HYFLUX LTD AND SUBSIDIARIES
P.56. 57
8. Authority to allot and issue shares under the Hyflux Employees’ Share Option Scheme (RESOLUTION 8)
That pursuant to Section 161 of the Companies Act, Cap. 50, the Directors be authorised and
empowered to allot and issue shares in the capital of the Company to all the holders of options
granted by the Company, whether granted during the subsistence of this authority or otherwise,
under the Hyflux Employees’ Share Option Scheme (“the Scheme”) upon the exercise of such
options and in accordance with the terms and conditions of the Scheme, provided always that the
aggregate number of additional ordinary shares to be allotted and issued pursuant to the Scheme
shall not exceed fifteen per centum (15%) of the issued share capital of the Company from time to time.
[See Explanatory Note (ii)]
SINGAPORE
7 MAY 2003
EXPLANATORY NOTES:
(i) The Ordinary Resolution proposed in item 7 above, if passed, will empowered the Directors from the date of the above
meeting until the date of the next Annual General Meeting, to allot and issue shares in the Company. The number of shares
that the Directors may allot and issue under this Resolution would not exceed fifty per centum (50%) of the issued capital of
the Company at the time of passing this resolution. For issue of shares other than on a pro rata basis to all shareholders, the
aggregate number of shares to be issued shall not exceed twenty per centum (20%) of the issued capital of the Company. The
percentage of issued capital is based on the Company’s issued capital after adjusting for new shares arising from the exercise
of employee share options in issue at the time the proposed Ordinary Resolution is passed and any subsequent consolidation
or subdivision of shares.
(ii) The Ordinary Resolution proposed in item 8 above, if passed, will empower the Directors of the Company, from the date of the
above Meeting until the next Annual General Meeting, to allot and issue shares in the Company of up to a number not exceeding
in total fifteen per centum (15%) of the issued share capital of the Company from time to time pursuant to the exercise of the
options under the Scheme.
Notes:
1. A Member entitled to attend and vote at the Annual General Meeting (the “Meeting”) is entitled to appoint a proxy to attend and vote in his/her stead. A proxy
need not be a Member of the Company.
2. The instrument appointing a proxy must be deposited at the Registered Office of the Company at 40 Changi South Street 1, Singapore 486764 not less than
48 hours before the time appointed for holding the Meeting.
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- SGX LISTING MANUAL REQUIREMENTS (CONTINUED)
HYFLUX LTD
NOTICE IS HEREBY GIVEN that the Share Transfer Books and Register of Members Of Hyflux Ltd (the “Company”) will be closed on
31 May 2003 for the preparation of dividend warrants.
Duly completed registrable transfers received by the Company’s Share Registrar, Lim Associates (Pte) Ltd, 10 Collyer Quay #19-08
Ocean Building, Singapore 049315 up to 5.00 p.m. on 30 May 2003 will be registered to determine shareholders’ entitlements to the
said dividend. Members whose Securities Accounts with The Central Depository (Pte) Limited are credited with shares at 5.00 p.m. on
30 May 2003 will be entitled to the proposed dividend.
Payment of the dividend, if approved by the members at the Annual General Meeting to be held on 22 May 2003 will be made on
10 June 2003.
PROXY FORM
(PLEASE SEE NOTES OVERLEAF BEFORE COMPLETING THIS FORM)
HYFLUX LTD
(INCORPORATED IN SINGAPORE WITH LIMITED LIABILITY)
I/We, of
NO. OF SHARES %
ADDRESS
NO. OF SHARES %
ADDRESS
or failing him/her, the Chairman of the Meeting as my/our proxy/proxies to vote for me/us on my/our behalf at the Annual General
Meeting (the “Meeting”) of the Company to be held on 22 May 2003 at 2.30 p.m. and at any adjournment thereof. I/We direct my/our
proxy/proxies to vote for or against the Resolutions proposed at the Meeting as indicated hereunder. If no specific direction as to
voting is given or in the event of any other matter arising at the Meeting and at any adjournment thereof, the proxy/proxies will vote or
abstain from voting at his/her discretion.
(Please indicate your vote “For” or “Against” with a tick [ ✔] within the box provided.)
1 Directors’ Report and Audited Accounts for the year ended 31 December 2002
2 Payment of proposed first & final dividend
3 Re-election of Dr Deirdre Murugasu
4 Re-election of Mr Teo Kiang Kok
5 Approval of Directors’ fees amounting to S$180,000.00
6 Re-appointment of Ernst & Young as Auditors
7 Authority to allot and issue new shares
8 Authority to allot and issue shares under the Hyflux Employees’ Share Option Scheme
1. Please insert the total number of Shares held by you. If you have Shares entered against your name in the Depository Register (as defined in Section 130A of the
Companies Act, Chapter 50 of Singapore), you should insert that number of Shares. If you have Shares registered in your name in the Register of Members, you
should insert that number of Shares. If you have Shares entered against your name in the Depository Register and Shares registered in your name in the Register
of Members, you should insert the aggregate number of Shares entered against your name in the Depository Register and registered in your name in the Register
of Members. If no number is inserted, the instrument appointing a proxy or proxies shall be deemed to relate to all the Shares held by you.
2. A member of the Company entitled to attend and vote at a meeting of the Company is entitled to appoint one or two proxies to attend and vote in his/her stead.
A proxy need not be a member of the Company.
3. Where a member appoints two proxies, the appointments shall be deemed to be alternative unless he/she specifies the proportion of his/her shareholding
(expressed as a percentage of the whole) to be represented by each proxy.
4. The instrument appointing a proxy or proxies must be deposited at the registered office of the Company at 40 Changi South Street 1, Singapore 486764 not less
than 48 hours before the time appointed for the Meeting.
5. The instrument appointing a proxy or proxies must be under the hand of the appointor or of his attorney duly authorised in writing. Where the instrument
appointing a proxy or proxies is executed by a corporation, it must be executed either under its seal or under the hand of an officer or attorney duly authorised.
Where the instrument appointing a proxy or proxies is executed by an attorney on behalf of the appointor, the letter or power of attorney or a duly certified copy
thereof must be lodged with the instrument, failing which the instrument may be treated as invalid.
6. A corporation which is a member may authorise by resolution of its directors or other governing body such person as it thinks fit to act as its representative at
the Meeting, in accordance with Section 179 of the Companies Act, Chapter 50 of Singapore.
GENERAL:
The Company shall be entitled to reject the instrument appointing a proxy or proxies if it is incomplete, improperly completed or illegible or where the true intentions of the
appointor are not ascertainable from the instructions of the appointor specified in the instrument appointing a proxy or proxies. In addition, in the case of Shares entered
in the Depository Register, the Company may reject any instrument appointing a proxy or proxies lodged if the member, being the appointor, is not shown to have Shares
entered against his name in the Depository Register as at 48 hours before the time appointed for holding the Meeting, as certified by The Central Depository (Pte) Limited
to the Company.
HYFLUX LTD