Ar2002 PDF

OUR VISION
To be a world-leading water treatment company.
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. Its So Clear, the new company tagline, is not only pertinent
to the Groups main business of water treatment, but also signals Hyflux as clearly the partner of choice in its industries. Creative
and sophisticated, Hyfluxs new branding is the perfect companion for its rising international stature.
GROUP CEO & PRESIDENTS

MESSAGE TO SHAREHOLDERS
GROWING WITH THE FLOW

The year 2002 will be remembered as a year of record growth in
our business and in our financial results. Our achievements in 2002
marked several significant milestones for Hyflux; the successful
completion of Hyfluxs first municipal project the Bedok NEWater
Factory; the award of Singapores third NEWater plant at Seletar
which uses Hyfluxs in-house ultrafiltration (UF) membrane
Kristal300 ; the award of Most Admired Sesdaq Company
by the Smart Investors magazine; and being listed as one of the
Best 200 Small Companies in the world by Forbes.
In 2002, we also garnered a S$27 million contract by PUB to supply

the entire membrane filtration system for a raw water treatment
plant at Chestnut. When completed in end 2003, the potable
water treatment plant will be one of the worlds largest to utilise
advanced membrane technology for potable water treatment.
These large-scale municipal projects have enabled us to sustain
our growth momentum in the Singapore market despite weak
industrial demand in 2002.
In China, we were awarded our largest industrial project amounting
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

chance. Since going public in early 2001, we have been building
up our expertise and infrastructure in preparation for our leap into
the big league to take on large municipal projects.
When the Public Utilities Board (PUB) of Singapore embarked on
the development of alternative sources of water such as NEWater
and desalinated water to augment Singapores conventional water
sources, we were well prepared to bid for these projects against
some of the worlds biggest players in the water treatment market.
What is especially fulfilling about these milestone projects is that

they are the fruit of years of developmental work, research and pilot
studies conducted in collaboration with our industrial and municipal
partners. Such close collaboration with our partners has enabled
us to harness our process know-how and create value-add and
purpose-built solutions for our customers in both the industrial and
the municipal markets. Equally significant is that these projects have
provided us with the experience and credentials to compete for
similar large-scale projects in the international arena.
GEARING UP FOR SUSTAINED GROWTH
In late 2001, PUB invited tenders for the first two municipal
NEWater plants at Bedok and Kranji. Of these, Hyflux won the tender
for the NEWater plant at Bedok, which also forms part of the
NEWater Visitor Centre. In the third quarter of 2002, PUB invited
tenders for the third NEWater plant at Seletar. Hyflux again won this
contract worth some S$27.8 million. Apart from being the biggest
project that we have secured in 2002, the key significance of this
project is that our own in-house developed UF membrane system
has been accepted by PUB for use in the Seletar NEWater plant.
In 2002, we continued to build up our business capabilities,

particularly in terms of personnel, capital, facilities and technology.
Our head count grew from 257 employees at the beginning of the
year to 352 by year-end. Most of the increases were in the
engineering, technical, sales and marketing divisions of our local
and Shanghai offices. Apart from employment of temporary
construction workforce, we do not foresee any substantial increase
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

of 10.0 million new ordinary shares at S$1.235 a share in June
2002. The net proceeds raised, of about S$12 million, are used
for our working capital, as well as for funding the investment of
US$1.7 million for a 19.5% stake in Sinolac (Singapore) Pte Ltd.
In 2002, we also focused on expansion of our facilities both in
Singapore, as well as in Shanghai to support our growing market.
In Singapore, we have completed the renovation of our 60-year
leasehold factory building at Changi that houses our membrane
production lines, warehouse facilities and fabrication workshop.
In China, we have moved into our new 50-year leasehold factory at
Pudong, Shanghai, which enables us to increase our production
capabilities three-fold.
On the technological front, our research and development
programme continued to generate market-driven products and
processes that have led to numerous patent applications which are
being filed in 2003.
IMPACT ON FINANCIAL PERFORMANCE
The sales and profits achieved in 2002 were at an all-time high, yielding
a return on equity (ROE) of 23% and a 58% growth in earnings per
share (EPS). This is despite the continued investment in our business
infrastructure and share issues from private placement through the
Hyflux Employee Share Option Scheme. The year also recorded a
healthy year-end balance sheet with a relatively low debt to equity
ratio of 0.14. This means we have considerable debt capacity that
we can tap on in the future to fund our growing business.
OUTLOOK
We entered 2003 with an order book valued at $76 million. Further

underpinning our business in 2003 and beyond, we clinched 2 major
deals in January. The first was the award of Singapores first
seawater desalination plant to Singspring, our consortium with the
Ondeo group under a Build-Own-Operate (BOO) agreement with
PUB to supply some 136,000 cubic metres of desalinated water a
day for 20 years. The project involves detailed design, construction
and operation of one of the worlds largest seawater desalination
plants. The second deal was our investment in an initial 2% equity
stake (US$1,000,000) in a US-incorporated entity that owns the
patents to a portable, electrical-powered appliance capable of
producing potable water from ambient air, which we call Aquovate
Technology. Under this deal, an irrevocable exclusive licence has
been granted to Hyflux Aquosus (Singapore) Pte Ltd to manufacture
and sell products with Aquovate Technology in Asia and Oceania.
The significance of these 2 deals cannot be over-emphasised. These

deals serve to provide us with a stable recurring revenue stream.
Furthermore, as observed by a research house, Hyflux now has the
potential to be the ultimate player in the water treatment industry,
with the capability and technical know-how to cover the entire
waterscape, recovering clean water from the land (NEWater), the
sea (desalinated water); and the air (Aquovate Technology). Equally
important is that these capabilities are firmly anchored on our
proprietary membrane and process technology.
Going forward, we will continue to play a leading role in the local
municipal water treatment market. This will allow us to stay engaged
in the Singapore market while waiting for the upturn in the industrial
sector. In China, we shall continue to focus on the industrial market,
particularly on applications involving treatment of liquid streams in
manufacturing processes of biotechnological and pharmaceutical
industries.
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
not foresee any further equity cash calls for the next 6 to 9 months.
During this period, any financing required will come from our
unutilised bank credit lines and from the debt market.
A PERSONAL TRIBUTE
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 our employees, I wish to express my heartfelt appreciation for
your dedication and commitment in delivering our promises to our
customers and to our shareholders. Each year brings with it fresh
opportunities and challenges. I am confident that, working together
as a team, we shall once again be able to achieve another year of
profitable growth.
GROUP CEO & PRESIDENT
OLIVIA LUM OOI LIN
BOARD OF DIRECTORS
GROUP CEO & PRESIDENT
OLIVIA LUM OOI LIN
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 Groups 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 Singapores 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.
EXECUTIVE VICE PRESIDENT
DEIRDRE MURUGASU
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 Groups 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.
EXECUTIVE VICE PRESIDENT
FOO HEE KIANG
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 Groups 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 Groups products and services. Mr Foo
holds a Bachelor of Engineering degree from NUS.
P.04.
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 Groups 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.
05
SENIOR MANAGEMENT
EXECUTIVE VICE PRESIDENT, CHIEF FINANCIAL OFFICER AND COMPANY SECRETARY
LIM KIM SENG
Mr Lim is Executive Vice President, Chief Financial Officer and Company Secretary for the
Group. He is responsible for the Groups 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.
SENIOR VICE PRESIDENT, CORPORATE SERVICES
CHRISTOPHER MURUGASU
Mr Murugasu is Senior Vice President for Corporate Services. He is responsible for the
Groups 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.
SENIOR VICE PRESIDENT, STRUCTURED PROJECTS
HURN DAVID CHARLES
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 Hurns current
position with Hyflux is to lead development for the Groups subsidiary, Hyflux Engineering,
which invests in the growing market of privately financed water projects and other process
industries that utilise Hyfluxs membrane technologies. He holds a Masters degree from
Cambridge University, UK.
VICE PRESIDENT, FINANCE
GRACE GOH
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.
P.06.
VICE PRESIDENT, OPERATIONS
LEE LENG KEONG
Mr Lee is Vice President for Operations. He is responsible for the Groups 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.
SENIOR VICE PRESIDENT, CHINA OPERATIONS
CHONG EE YONG, STEPHEN
Mr Chong is Senior Vice President for Hyfluxs 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.
VICE PRESIDENT, GENERAL MANAGER, CHINA OPERATIONS
GE WEN YUE
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.
VICE PRESIDENT, FINANCE & ADMINISTRATION, CHINA OPERATIONS
GU JIA LONG
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.
07
CORPORATE MILESTONES
MAY
2002
APRIL
APRIL 2003
OCTOBER 2002
Upgraded to SGX Mainboard Listing
Hyflux Engineering secured

USD15.4 million contract to supply
process plant for Sinolac
manufacturing facility in China
Ranked as one of the Worlds 200
Best Small Companies by Forbes
Global Magazine
FEBRUARY 2003
Awarded Singapores Best Small

Company 2002" by Asiamoney
JANUARY 2003
Awarded Contract by PUB for

Singapores first ever 30MGD 20-yr
BOO Desalination Plant
Investment in revolutionary water

generator Aquovate Technology
SEPTEMBER 2002
Awarded Chestnut Avenue

Waterworks contract worth S$27
million for the upgrading of potable
water treatment works utilising
membrane filtration system
2003
Minister for Environment, Mr Lim Swee Say,

finding out more about the revolutionary Aquovate
Technology from Executive Vice President,
Mr Foo Hee Kiang, at Water & WasteTech 2003.
DECEMBER 2002
Awarded contract by PUB for

NEWater Plant at Seletar which will
produce 24,000 cubic metres of
NEWater a day
JUNE 2002
Hyfluxs Strategic
Corporate Brand Redevelopment
MAY 2002
NOVEMBER 2002
Presented the Most Admired

Sesdaq Company Award by
Smart Investor Magazine
Attainment of ISO 9001: 2000

Certification
The official launch of the Bedok NEWater

Visitors Centre.
Hyflux Engineering signed a

water service agreement with ISK
Singapore Pte Ltd, to build a water
treatment facility to supply high
grade industrial water and
deionised water to ISKs titanium
dioxide plant at Tuas for an initial
period of 3 years
Minister for Trade and Industry, BG George Yeo with
Hyflux Board of Directors at the launch of
Hyfluxs new corporate identity.
P.08.
09
FINANCIAL HIGHLIGHTS
$000
1998
1999
2000
2001
2002
Turnover
Profit Before Tax and Minority Interest
Minority Interest
Profit Attributable to Shareholders
6,391
1,058
681
6,929
430
79
20,759
8,631
6,370
27,235
9,447
5
7,355
45,267
11,603
402
12,261
Non-current Assets
Net Current Assets
Non-current Liabilities
Shareholders Equity
Minority Interests
332
1,644
284
1,719
795
(12)
482
310
4,861
4,867
597
9,131
15,066
21,163
1,513
31,366
3,350
18,517
42,784
4,892
53,915
2,494
1.17
0.47
0
0.21
0.05
0
6.3
4.4
0.6
15.6
3.38
0.5
21.3
5.33
1.0
10.7%
39.6%
1.1%
25.5%
30.7%
69.8%
12%
27.0%
23.4%
10%
27.1%
22.7%
10%
Net Tangible Assets per share (cents)

Earnings per share (cents)
Dividend per share (cents)
Return on Turnover (%)
Return on Equity (%)
Dividend yield (%)
S$MILLIONS
S$MILLIONS
50
50
45
45
40
40
35
35
30
30
25
25
20
20
15
15
10
10
Others
98
99
00
01
China
Singapore
98
02
99
00
01
02
GROUP TURNOVER (S$MILLIONS)

BY COUNTRY
GROUP TURNOVER (S$MILLIONS)
S$MILLIONS
12
11
10
9
8
7
6
48%
82%
18%
4
3
02
01
52%
GROUP TURNOVER (%)
BY SEGMENT
Municipal
Industrial
98
99
00
PBT (S$MILLIONS)
01
02
OPERATIONS REVIEW
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.
NUMBER OF EMPLOYEES AS AT 31 DECEMBER
2001
2002
Singapore
Shanghai
Hangzhou and Ningbo
82
85
90
169
105
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 groups 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 years 27%.
P.10.
11
CASH FLOWS AND CASH MANAGEMENT
For FY2002, net cash generated from operating activities amounted to S$3.4 million compared to net cash used in operations of
S$4.6 million in FY2001. The substantial increase in cash generated from operating activities came primarily from profits generated
from operations and the reduction in working capital requirements. For the investing and financing activities, the group raised a total of
S$17.6 million from a private equity placement and bank loans. Partially offsetting the cash inflows were the payment of dividends of
S$1.83 million and a total of S$6.1 million in purchases of fixed assets, development of intellectual properties and a long-term investment.
As at 31 December 2002, the groups cash balance stood at S$17.1 million, S$13.5 million higher than that of FY2001.
EARNINGS PER SHARE (EPS)
EPS for FY2002 was 5.33 cents, up 58% from 3.38 cents in FY2001. The higher EPS was a result of a significantly higher profit after tax
in FY2002, which more than offset the increase in issued shares arising from the private share placement and bonus issues.
Shareholders 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
P.12.
13
Artists impression of the

Seletar NEWater Plant.
RISING VISIBILITY - OUR PROJECTS

2002 marked a groundbreaking year for Hyflux when it took on
high recognition projects in both the industrial and municipal
markets. Demand from the biotechnological and pharmaceutical
sectors in China continued to be lively as Hyflux ventured
aggressively into the region. In Singapore, the Group has secured
large municipal projects, utilising municipal membrane-based water
treatment technology.
In September 2002, Hyflux also achieved another first by clinching

PUBs first advanced membrane potable water treatment plant to
be constructed at the Chestnut Avenue Waterworks at a cost of
S$27 million. With a capacity of 273 million cubic metres daily, the
Chestnut Avenue Waterworks will be the second largest membranebased raw water treatment plant in the world when it is completed
in 2003.
Hyfluxs maiden project for the municipal sector was won in

December 2001. The S$16.1 million contract with the Public Utilities
Board (PUB), Singapore was to supply process equipment for an
advanced dual membrane high grade water reclamation plant at
Bedok, Singapore. Completed in late 2002, the plant now processes
32,000 cubic metres a day of high-grade water or NEWater from
treated wastewater. NEWater is used primarily for direct non-potable
use in the wafer fabrication industry for wafer production and in
commercial buildings for air-con cooling purposes. In addition, some
of the NEWater is also used for indirect potable use.
CARRIED ON A CREST
NEWater is a sustainable and reliable alternative water resource for

Singapore. It plays a strategic role in Singapores long-term plan to
be self-sufficient in water supply. Hyflux is proud to be part of this
NEWater initiative to ensure that Singapores future water supply
remains a sustainable and sufficient resource.
After a year buoyed by success, Hyflux took a giant step into the
big league by landing Singapores first seawater desalination project
awarded by PUB, worth S$250 million. This landmark deal aims to
supply 136,000 cubic metres of desalinated water a day when
completed in 2005. The plant will have the capacity to meet some
10% of the islands water needs.
The consortium Singspring will build, own and operate the plant,
with Hyflux owning a 70% stake in the consortium and partnering
Ondeo. Singspring has the strength and stability of an internationally
recognised company, and the flexibility and local knowledge
afforded by a home-grown specialist. The Hyflux Group expects to
secure contracts worth at least S$100 million in engineering,
construction and procurement activities largely from the supply
of Hyfluxs proprietary membrane systems. Recurring income is also
expected from operations and maintenance activities until 2025.
SUSTAINING THE FLOW
Following Hyfluxs successful first venture into the municipal market,

another NEWater project was secured in December 2002. This time,
the contract worth S$27.8 million is for the design and construction
of a NEWater plant at Seletar, Singapore.
The Seletar plant, with a capacity of 24,000 cubic metres daily, will
be equipped with advanced membrane and ultraviolet technologies.
More significantly, Hyfluxs proprietary Kristal300 TM Ultrafiltration
membrane technology has been selected for use in the Seletar
NEWater plant and this is a clear endorsement of the companys
capabilities in providing advanced membrane products and services
for municipal-sized water treatment facilities. This project has also
enhanced the Groups 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.
As the first-ever desalination plant in Singapore to supply drinking

water, this project marks a significant milestone in the Groups
focused endeavour to become a world-leading water treatment
company. It places Hyflux firmly within the international water
treatment arena and positions the Group as a potential strategic
player for future large-scale municipal projects in Singapore
and beyond.
MAKING WAVES
IN THE REGION
P.14.
15
GATHERING MOMENTUM
W ith continual growth in the scope and complexity of its
projects and operations, Hyflux is fast becoming a major player in
Asia Pacifics water industry.
Of the four major water treatment contracts awarded in Singapore
between December 2001 and January 2003, Hyflux was successful
in tendering for and clinching three of them the two NEWater
plants at Bedok and Seletar, and Chestnut Avenue Waterworks,
a raw water treatment plant.
With the Singapore government singling out four national taps
direct import of water, local water sources, NEWater and desalination
to ensure long term supply of water for the country, Hyflux is now
playing a pivotal role in the development of the latter three. This is
testament to the capabilities and direct competitiveness of the
Group. It also highlights Hyfluxs technical competence and
management strength to take on large scale municipal projects.
For a project as significant as the Bedok plant, one involving the
production of NEWater and bearing implications for Singapores
future water sufficiency, it was an impressive feat for Hyflux, a homegrown company, to deliver the project in record time.
The Bedok NEWater plant is now fully equipped with an advanced
dual membrane and UV disinfection system built by Hyflux to
rigorous specifications, and showcased to the public by a gleaming
Bedok NEWater Visitors Centre which provides a clear view of the
plants design and operations .
Securing Singapores first seawater desalination project will prove to
have even broader implications for Hyflux. Not only a deal of landmark
size, this project will position Hyflux as a strategic player in Singapore,
showing the way to large municipal projects in the future, and put the
Group on firm footing to expand into Asia and beyond.
Despite highly competitive tenders for the project from global players,
Singspring was selected as it was able to offer the lowest price for
desalinated water over a 20-year period, while fully meeting the
comprehensive technical and performance standards. As the
designer, builder, operator and investor for the project, the Group is
able to offer the most reliable and optimised Build-Own-Operate
(BOO) solution. In fact, this venture is Asias very first project-financed
30MGD water deal. Indeed, Singspring is proud to be able to transform
the promise of desalination into a sustainable reality in Singapore.
Previously mostly out of bounds due to the limited capital of the young
company, this award will provide the Group with the critical mass to
compete against international heavyweights for foreign projects in
the future a market estimated to be worth US$400 billion annually.
SIMPLY KRISTAL CLEAR
Hyflux began as a small integration player, buying and assembling

packaged systems for industrial clients. Since then, it has expanded
its portfolio to become a full-fledged manufacturer of advanced
proprietary membranes as well. The ability to develop and
manufacture membranes provides a robust foundation for further
business growth and helps differentiate the Group from its
competitors. Hyfluxs proprietary membranes are also finding
demand in overseas markets.
The transformation began in the early 1990s when Hyflux founder

Olivia Lum realised the potential in membrane technology and was
convinced it was the future of water treatment. However, testing of
off-the-shelf membranes from large suppliers revealed that they were
designed for specific applications and were not easily customisable
for clients. Hence, Hyflux launched into customised membrane
manufacturing which would allow the Group to experiment and
manufacture membranes of different formulations in order to provide
value-add to the clients and industries. The Kristal300TM ultrafiltration
membrane that will be used in the Seletar NEWater plant is an
example of Hyfluxs focused efforts in membrane technology.
Over the past decade, membrane technology has made great strides
in water and wastewater treatment. It is enjoying widespread use
and are increasingly applied to treat not only water but also other
liquids in the biotechnological, pharmaceutical, and oil and gas
industries. Clearly, with the enormous customisable flexibility of
Hyfluxs proprietary membranes, the market potential arising from
their development is enormous.
TAPPING THE PULSE OF THE FUTURE - BIOTECHNOLOGY
Leveraging on proprietary in-house R&D, Hyflux has pioneered a

membrane system, the first of its kind, capable of filtering liquids
for the production of organic acids in biotechnology-related
industries such as pharmaceutical and food processing.
With biotechnology considered a fast growing sunrise sector in
many growing economies worldwide, and especially in China, the
market potential of this membrane is exciting. In October 2002,
Hyflux Engineering Pte Ltd, a wholly owned subsidiary, acquired
a 19.5% equity interest in Sinolac (Singapore) Pte Ltd for
US$1.7 million. Sinolac was incorporated to own and operate
a biotechnology manufacturing facility for the production of lactic
acid. The facility, to be completed in late 2004, will have an initial
production capacity of 10,000 metric tons of organic acid a year,
with a staged expansion to 50,000 metric tons per year.
Under the arrangements of the contract, Hyflux Engineering will
discharge a US$15.4 million deal to supply the process plant for
the Sinolac manufacturing facility. In return, Sinolac will pay a
US$2 million licensing fee for a period of 5 years to use Hyfluxs
proprietary membrane filtration technology. The Group will further
benefit from new proprietary know-how gleaned from the design
and fabrication of the membrane-based liquid treatment plant
and filtration systems. The Sinolac project is a clear example of
Hyflux harnessing existing capabilities for innovative solutions.
In addition, it has also helped Hyflux to secure a constant source of
revenue from the biotechnological sector, an added market for
membrane technology.
When completed in 2004, the plant will be the largest source of
revenue for the Hyflux Group in China. China currently already
accounts for a substantial part of the Groups revenues.
Industrialisation and growing affluence in the country will offer
exciting opportunities for Hyflux as the Group continues its march
towards regional growth.
CLEARLY A
REFRESHING WAY FORWARD
P.16.
1. Artists Impression of 30MGD

Desalination Plant
1.
17
2.
2. Draft Schematic Layout of Part of the

Desalination Plant
WAVES OF INNOVATION
At present, Singapores water supply is collected through three main
sources, also known as the three taps. They are namely: (a) water
catchment areas like the local reservoirs, (b) importation of water
and (c) new alternative sources like NEWater. In 2005, the nations
very first desalination plant will become the fourth tap to meet the
increasing demand of water consumption.
Through Hyfluxs 2% stake in Air 2 Water Inc, an American company

which holds the 20-year patent for the Air 2 Water technology, Hyflux
will manufacture the machines in Asia. Hyflux has established
companies having exclusive manufacturing and marketing rights
covering almost all of Asia, China, India and Australia. Hyflux has a
75% equity stake in both joint ventures.
The Group is always searching for new and cutting edge technologies
to meet modern, escalating water needs, through the spirit of
entrepreneurial endeavour.
With original manufacturing targets of 10, 000 units in 2003, it is

targeting the Asian market where bottled water consumption hit
25.6 billion litres in 2000, representing 23% of the global bottled
water consumption. Currently, Asia accounts for 15% of the bottled
water market global share valued in 2000 at US$4.7 billion, but this
is expected to surge significantly in coming years. Furthermore, the
three largest Asian markets China, Indonesia and Thailand have
joined the worlds top ten markets for the bottled water market.
Clearly there is excellent global potential for Hyflux AquovateTM
revolutionary patented technology.
At Hyflux, a true entrepreneurial culture is painstakingly nurtured at

all levels of management. Motivation runs high for all staff, a clear
effect of overall dynamism and business vitality.
The Group is ever vigilant in seizing new opportunities and
assimilating best practices to stay ahead of the competition, being
a firm believer in training and infusing new technology at its business
activities.
THE 5TH TAP - AQUOVATETM TECHNOLOGY
Our commitment to water safety in an increasingly uncertain world

drives breakthrough technologies.
As the technology that makes water out of thin air, Hyflux launch of
Aquovate TM Technology marks the Groups first foray into the
consumer market. This patented technology, based on the building
blocks of Hyfluxs 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.
Aquovate TM with its roots in originality is a versatile, source
independent and high performance generator technology for the
home or work area. AquovateTM is the process of extracting, purifying
and continually refreshing water by re-circulation through
Ultraviolet(UV) purification and Hyflux ultrafiltration technology.
It is a safe, convenient, economical, and virtually unlimited water
source. It also provides the additional benefit of purifying the ambient
air. Not requiring any external water source, Aquovate TM technology
provides the freedom of free-of-any-piping or storage requirements.
It is a Hyflux-made product built for performance, value and reliability.
Products made to harness the Aquovate TM Technology will bear the

made-in-Singapore label, a well known mark of quality. This will
help establish the Made in Singapore brand name on the global
technology map. In addition, Hyflux will market and brand
Aquovate TM Technology aggressively with great care over its image
and profile. Hyflux will further increase and deepen its product
portfolio in the future and concurrently developing new markets
and opportunities.
REACHING NEW HEIGHTS

OF RECOGNITION
P.18.
19
A HIGH WATER MARK

Water is an increasingly precious global resource, and water
treatment a growing industry. The United Nations estimates that
by 2025, about 5 billion people will find it difficult or impossible to
meet their needs for fresh water. In Singapore and beyond, Hyflux
is determined to be a key part of the answer to this increasingly
urgent need.
HARNESS PROPRIETARY TECHNOLOGY
Since 1989, Hyflux has successfully partnered with more than 200
clients from Asia Pacific and Africa. International players have singled
out Hyflux as a preferred partner for their flagship projects due to
the Groups outstanding professionalism and world wide recognition
of its capabilities and values.
BUILD RECURRING INCOME STREAMS AND FOCUS ON
In 2002, Hyflux continued to receive accolades for outstanding

performance.
Hyflux will continually be on the look-out for new and applicable

technology in the fluid and water treatment business. Hyflux will
step up in-house R & D activities and also look to the possibility of
acquiring complementary technologies through direct investment
or joint development.
CORE BUSINESS
The Group seeks to grow the core business and increase market
share in the industrial and municipal sectors by offering outright
sales or BOT programs, at the same time leveraging proprietary
technology to secure larger value projects and developing new
applications and new markets.
INVEST IN SYNERGISTIC BUSINESSES
ISO 9001:2000
In May 2002, Hyflux announced the attainment of ISO 9001: 2000

for The Manufacturing of Membrane Products for Filtration.
The certification is a reflection of a high standard of manufacturing
quality for in-house manufactured membranes. It also signals
Hyfluxs commitment to go the extra mile to ensure that its products
will consistently meet the high expectations of all its customers.
Hyflux will leverage proprietary membrane technology to develop

new applications for the treatment of process streams and other
liquids, especially in the high value and fast growing area of
biotechnology. The group will also explore potential tie-ups with
synergistic partners to apply these new technologies in large growing
markets such as China and other parts of Asia.
THE CLEAR PROMISE
FORBES WORLDS 200 BEST SMALL COMPANIES 2002
Hyflux made a debut on Forbes Global magazines list of the worlds

200 best small companies in 2002. The 200 Best list is, according
to Forbes, a compilation of financially strong small-cap businesses
and that each company on this list has earned its place and is,
indeed, good enough to be called one of the best.
MOST ADMIRED SESDAQ COMPANY 2002
Hyflux was presented with the Most Admired Sesdaq Company

Award in November 2002 by Smart Investor magazine. A poll was
conducted with 400 readers of Smart Investor between August and
September 2002. The Hyflux Group received the most votes in the
poll. This is recognition of the investment communitys confidence
in the company and the direction in which the management is leading
the company.
BEST SMALL COMPANY IN ASIAMONEYS BEST MANAGED
COMPANIES POLL 2002
Hyflux was awarded Singapores Best Small Company 2002" by

Asiamoney in the categories of Southeast Asia Best Managed
Companies, Best Corporate Governance and Deals of the Year 2002.
This marked the recognition which global investors accord Hyflux.
CASCADING SUCCESS
Hyfluxs strategy reinforces its aim to be the world leading water

treatment company. It is founded on the recognition that Hyflux needs
to focus on building on its proprietary membrane know-how and core
business in order to expand overseas and secure long-term growth.
With business opportunities in water reclamation picking up around
the region, Hyfluxs priority will be to build a solid platform in Singapore
and strengthen customer and product delivery for regional expansion.
2002 has laid the foundation for strong future success. The Hyflux
Group has embarked on an infrastructure-building exercise to
prepare for the realisation of big league projects. Recent acquisitions
have increased the number of membrane production lines, expanded
fabrication workshops and upgraded R & D facilities. Hyflux looks
to the future with optimism borne of entrepreneurial spirit and
innovation, a commitment to improve the environment and total
professionalism.
The Groups clients have been a source of constant strength and
support for Hyfluxs growth, both in Singapore and abroad. Hyflux
values its partnerships with its clients and embarks on every project
with the understanding to provide the best value proposition in
terms of experience, innovation, speed and cost-efficiency.
In the past year, the Hyflux Group won several milestone water
treatment projects. This has placed Hyflux on the regional map as
a major water treatment company capable of competing on equal
footing with internationally recognised water treatment firms.
The continued success of the Hyflux Group is largely due to the
sound business fundamentals and the entrepreneurial spirit that
exists in our company.
Hyfluxs strength lies in the common vision shared by all in the Hyflux
group of companies. We have witnessed the passion and drive of
the staff at all levels within Hyflux and together, Hyflux will continue
to play a major role in Singapore as well as in the region to meet the
need for advanced membrane filtration, and above all, clean water
for tomorrows needs, today.
CORPORATE STRUCTURE
HYFLUX LTD
SINGSPRING
PTE LTD
(70%)
HYFLUX
AQUOSUS
(SINGAPORE)
PTE LTD
(75%)
HYFLUX
AQUOSUS
(SHANGHAI)
CO. LTD.
(100%)
HYFLUX
INTERNATIONAL
LTD
(100%)
HYFLUX
ENGINEERING
PTE LTD
(100%)
HYDROCHEM
(S) PTE LTD
(100%)
HYDROCHEM
ENGINEERING
(S) PTE LTD
(100%)
HANGZHOU
ZHEDA HUALU
MEMBRANE
ENGINEERING
CO. LTD.
(55%)
HYDROCHEM
ENGINEERING
(SHANGHAI)
CO. LTD.
(100%)
NINGBO HUALU
MEMBRANE
TECHNOLOGY
CO. LTD.
(75%)
DIRECTORS
Olivia Lum Ooi Lin

Deirdre Murugasu
Foo Hee Kiang
Teo Kiang Kok
Lee Joo Hai
Gay Chee Cheong
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
HYFLUX LTD AND SUBSIDIARIES

DIRECTORS REPORT AND AUDITED FINANCIAL STATEMENTS
31 DECEMBER 2002
CONTENTS
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
01
DIRECTORS REPORT
(AMOUNT EXPRESSED IN SINGAPORE DOLLARS UNLESS OTHERWISE STATED)
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:
Olivia Lum Ooi Lin
Deirdre Murugasu
Foo Hee Kiang
Teo Kiang Kok
Lee Joo Hai
Gay Chee Cheong
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.
RESULTS FOR THE FINANCIAL YEAR

GROUP
COMPANY
$000
$000
Profit after taxation and minority interests

Accumulated profit brought forward
12,261
9,948
15,369
324
Dividend
22,209
(1,834)
15,693
(1,834)
Accumulated profit carried forward
20,375
13,859
MATERIAL MOVEMENTS IN RESERVES OR PROVISIONS

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)
ACQUISITION AND DISPOSAL OF SUBSIDIARIES

During the financial year, the Company incorporated the following subsidiary:
NAME OF SUBSIDIARY
COUNTRY OF
INCORPORATION
Hyflux International Ltd
British Virgin Islands
EQUITY
INTEREST HELD
Investment holding, selling, distribution,

import and export of products and
component systems in liquid treatment.
Provision of engineering expertise,
maintenance services and technical
know-how.
100%
There were no acquisitions or disposals of subsidiaries during the financial year.
ISSUE OF SHARES OR DEBENTURES

(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.
ARRANGEMENTS TO ENABLE DIRECTORS TO ACQUIRE SHARES OR DEBENTURES

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.
P.02.
03
DIRECTORS INTERESTS IN SHARES OR DEBENTURES

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:
OTHER SHAREHOLDINGS IN WHICH

THE DIRECTOR IS DEEMED TO
HAVE AN INTEREST
HELD BY DIRECTOR
AT 1
JANUARY
2002
AT 31
DECEMBER
2002
AT 21
JANUARY
2003
AT 1
JANUARY
2002
AT 31
DECEMBER
2002
AT 21
JANUARY
2003
THE COMPANY
Ordinary shares of $0.05 each

Olivia Lum Ooi Lin
Deirdre Murugasu
Foo Hee Kiang
Gay Chee Cheong
98,691,576
5,572,446
2,271,016
100,000
91,904,056
6,965,562
2,850,020
125,000
114,930,070
6,965,562
2,850,020
125,000
10,281,280
21,511,000
21,511,000
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
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
1,834
921
DIRECTORS REPORT
(CONTINUED)
BAD AND DOUBTFUL DEBTS

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.
CHARGES ON ASSETS AND CONTINGENT LIABILITIES

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.
ABILITY TO MEET OBLIGATIONS

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.
OTHER CIRCUMSTANCES AFFECTING THE FINANCIAL STATEMENTS

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.
P.04.
05
UNUSUAL ITEMS AFTER THE FINANCIAL YEAR

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.
DIRECTORS CONTRACTUAL BENEFITS

Except as disclosed in the financial statements, since the end of the previous financial year, no director of the Company has received
or become entitled to receive a benefit by reason of a contract made by the Company or a related corporation with the director, or with
a firm of which the director is a member, or with a company in which the director has a substantial financial interest.
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:
AGGREGATE OPTIONS
GRANTED SINCE
COMMENCEMENT OF
SCHEME TO END OF
FINANCIAL YEAR
OPTIONS GRANTED
DURING THE
FINANCIAL YEAR
AGGREGATE OPTIONS
EXERCISED SINCE
COMMENCEMENT OF
SCHEME TO END OF
FINANCIAL YEAR
AGGREGATE OPTIONS
OUTSTANDING AS
AT END OF
FINANCIAL YEAR
Options to subscribe for

ordinary shares of $0.05
each exercisable at
$0.504* per share
between the period
15 October 2002 to
27 September 2011
Deirdre Murugasu
Foo Hee Kiang
*
**
100,000**
100,000**
500,000
500,000
(100,000)
500,000
400,000
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.
(1,186,000)
(983,000)
9,543,500
625,000
655,000
25,000
250,000
800,000
32,500
250,000
181,250
56,250
96
1
7
1
1
3
1
1
4
76
PRICE
1.104
0.913
1.013
1.032
1.062
0.773
1.032
1.019
0.773
0.504
PERIOD
EXERCISABLE
15.10.2002 - 27.09.2011
11.01.2003 - 27.09.2011
25.01.2003 - 27.09.2011
25.03.2003 - 27.09.2011
28.03.2003 - 27.09.2011
8.04.2003 - 27.09.2011
3.05.2003 - 27.09.2011
8.07.2003 - 27.09.2011
1.08.2003 - 27.09.2011
16.09.2003 - 27.09.2011
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.
These additional options arose due to the bonus issue of shares on 17 June 2002.
1,926,500
2,736,000
7,050,000
625,000
655,000
1.08.2002
16.09.2002
5,000
50,000
20,000
200,000
800,000
3.05.2002
8.07.2002
8.04.2002
(25,000)
6,500
50,000
41,250
26,000
200,000
165,000
25.03.2002
28.03.2002
25.01.2002
6,668,500
(983,000)
(1,161,000)
11,250
1,762,500
45,000
7,050,000
15.10.2001
11.01.2002
EXERCISED
LAPSED
OPTIONS*
GRANTED
1.1.2002
OF OPTIONS
EXERCISE
AS AT
31.12.2002
AS AT
31.12.2002
OPTIONS
OPTIONS
BONUS
OPTIONS
AS AT
NO.OF
HOLDERS
BALANCE
BALANCE
DATE OF
GRANT
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:
(CONTINUED)
SHARE OPTIONS
(CONTINUED)
DIRECTORS REPORT
P.06.
DIRECTORS REPORT
07
(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:
Lee Joo Hai (Chairman)
Olivia Lum Ooi Lin
Teo Kiang Kok
Gay Chee Cheong
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 Groups 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
AUDIT COMMITTEE
(CONTINUED)
(CONTINUED)
(CONTINUED)
OTHER INFORMATION REQUIRED

BY THE SINGAPORE EXCHANGE SECURITIES TRADING LIMITED
(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 Groups working capital.
AUDITORS
Ernst & Young have expressed their willingness to accept re-appointment as auditors.
On behalf of the board of directors,
OLIVIA LUM OOI LIN

DIRECTOR
DEIRDRE MURUGASU
DIRECTOR
SINGAPORE
17 MARCH 2003
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.
On behalf of the board of directors,
OLIVIA LUM OOI LIN

DIRECTOR
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 Companys 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.
ERNST & YOUNG

CERTIFIED PUBLIC ACCOUNTANTS
SINGAPORE
17 MARCH 2003
P.10.
11
BALANCE SHEETS
AS AT 31 DECEMBER 2002
(AMOUNTS EXPRESSED IN SINGAPORE DOLLARS)
NOTE
GROUP
2002
$000
COMPANY
2001
$000
2002
$000
3,770
13,338
5,402
12,813
16,195
2,379
3,657
899
2,880
4,819
14,342
1,583
132
9,283
619
2,613
1,006
26,400
4,757
46
113
223
15,135
1,435
53,897
28,180
44,810
16,952
5,374
1,932
387
50
47
14
1,686
1,623
135
1,385
1,471
2,269
50
49
5
1,208
445
469
437
1,154
161
182
Total current liabilities
11,113
7,017
2,060
343
Net current assets
42,784
21,163
42,750
16,609
3
4
5
6
7
8
Total current assets

CURRENT LIABILITIES
Bank overdrafts (unsecured)

Trade creditors
Other creditors and accruals
Provision for income tax
Provision for warranty
Hire purchase creditors, current
Finance lease creditors, current
Short-term loans
Long-term loans, current
9
10
11
12
13
9
9
$000
CURRENT ASSETS
Cash and bank balances

Fixed deposits
Stocks
Trade debtors
Work-in-progress
Other debtors, deposits and prepayments
Due from subsidiaries (non-trade)
Due from subsidiaries (trade)
2001
BALANCE SHEETS
(CONTINUED)
AS AT 31 DECEMBER 2002
NOTE
GROUP
2002
$000
COMPANY
2001
$000
2002
$000
2001
$000
NON-CURRENT ASSETS
Fixed assets
Subsidiaries
Associated company
Long-term investment
Intangibles
14
15
16
17
18
13,021
255
1,735
3,506
11,204
306
3,556
1,103
8,039
646
4,631
18,517
15,066
9,142
5,277
73
63
489
4,267
119
14
489
891
3,846
4,892
1,513
3,846
56,409
34,716
48,046
21,886
11,809
22,378
(647)
20,375
8,909
12,653
(144)
9,948
11,809
22,378
13,859
8,909
12,653
324
Share capital and reserves before minority interests

Minority interests
53,915
2,494
31,366
3,350
48,046
21,886
Total capital and reserves attributable to members
56,409
34,716
48,046
21,886
Total non-current assets

NON-CURRENT LIABILITIES
Hire purchase creditors, non-current

Finance lease creditors, non-current
Deferred tax liabilities
Long-term loans, non-current
12
13
30
9
Total non-current liabilities

Total net assets
SHARE CAPITAL AND RESERVES
Share capital
Share premium
Translation reserve
Revenue reserve
19
20
21
The accounting policies and explanatory notes on pages 17 to 45 form an integral part of the financial statements.
P.12.
13
PROFIT AND LOSS ACCOUNTS

FOR THE YEAR ENDED 31 DECEMBER 2002
NOTE
GROUP
2002
$000
COMPANY
2001
$000
2002
$000
2001
$000
TURNOVER
22
45,267
27,235
18,635
Other operating income

Raw materials and consumables used
Personnel expenses
Research and development costs
Depreciation and amortisation
Other operating expenses
23
24
25
1,541
(18,535)
(6,890)
(2,301)
(6,959)
212
(8,714)
(4,798)
(298)
(1,394)
(2,880)
1,505
(293)
(456)
(232)
(1,216)
5
(371)
(158)
(140)
(533)
26
28
29
12,123
(353)
83
9,363
(64)
176
17,943
(226)
16
1,133
(2)
128
11,853
(50)
9,475
(28)
17,733
1,259
11,803
56
9,447
(2,097)
17,733
(2,364)
1,259
(229)
Minority interests
11,859
402
7,350
5
15,369
1,030
NET PROFIT FOR THE YEAR
12,261
7,355
15,369
1,030
5.33
5.24
3.38
3.38
PROFIT FROM OPERATIONS
Financial expenses
Financial income
2,330
PROFIT BEFORE SHARE OF RESULTS OF

ASSOCIATED COMPANY
Share of results of associated company

PROFIT BEFORE TAXATION AND MINORITY INTERESTS
Taxation
30
PROFIT AFTER TAXATION AND BEFORE

MINORITY INTERESTS
EARNINGS PER SHARE (CENTS)
Basic
Fully diluted
31
STATEMENTS OF CHANGES IN EQUITY


SHARE
CAPITAL
GROUP
SHARE
PREMIUM
$000
TRANSLATION
RESERVE
$000
REVENUE
RESERVE
$000
TOTAL
$000
$000
BALANCE AT 31 DECEMBER 2000 AS
7,234
(3)
2,593
645
9,824
645
Issue of shares for cash

Expenses in connection with issuance of shares
Foreign currency translation differences
Net profit for the year
Dividend (Note 32)
7,234
1,675
13,600
(947)
(3)
(141)
3,238
7,355
(645)
10,469
15,275
(947)
(141)
7,355
(645)
BALANCE AT 31 DECEMBER 2001
8,909
12,653
(144)
9,948
31,366

Bonus issue of 1 ordinary share for every
4 existing ordinary shares of $0.05 each
Foreign currency translation differences
Dividend (Note 32)
2,900
12,296
(219)
15,196
(219)
(2,352)
(503)
12,261
(1,834)
(2,352)
(503)
12,261
(1,834)
11,809
22,378
(647)
20,375
53,915
PREVIOUSLY STATED
Change in accounting policy (Note 2)

BALANCE AT 1 JANUARY 2001 AS RESTATED
SHARE
CAPITAL
COMPANY
SHARE
PREMIUM
$000
REVENUE
RESERVE
$000
TOTAL
$000
$000
BALANCE AT 31 DECEMBER 2000 AS
7,234
2
(63)
7,236
(63)

Dividend (Note 32)
7,234
1,675
13,600
(947)
(61)
1,030
(645)
7,173
15,275
(947)
1,030
(645)
8,909
12,653
324
21,886

Bonus issue of 1 ordinary share for
every 4 existing ordinary shares of $0.05 each
Dividend (Note 32)
2,900
12,296
(219)
15,196
(219)
(2,352)
15,369
(1,834)
(2,352)
15,369
(1,834)
11,809
22,378
13,859
48,046
PREVIOUSLY STATED
Change in accounting policy (Note 2)

BALANCE AT 1 JANUARY 2001 AS RESTATED
P.14.
15
CONSOLIDATED STATEMENT OF CASH FLOWS

NOTE
2002
2001
$000
$000
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before taxation

Adjustments:
Amortisation of intangibles
Provision for doubtful trade debts
Bad debts written off
Write-back of provision for warranty
Provision for stock obsolescence
Depreciation of fixed assets
(Gain) loss on disposal of fixed assets
Interest expense
Interest income
Grants
11,803
50
998
601
850
13
1,303
(1)
353
(83)
(76)
28
385
300
(194)
1,009
10
64
(176)
(349)
Operating profit before working capital changes

Stocks
Trade debtors
Work-in-progress
Due from affiliated companies (trade)
Trade creditors
Progress billings in excess of work-in-progress
15,811
(2,523)
(9,488)
(1,853)
(795)
3,988
461
10,524
(1,066)
908
(12,237)
399
646
(806)
(432)
(261)
5,601
(353)
(2,325)
(64)
(1,826)
(2,220)
3,422
(4,609)
(1,216)
(3,210)
(1,735)
15
83
76
930
(499)
(6,579)
7
500
176
349
(5,987)
(5,116)
Cash generated from (used in) operations

Interest paid
Income taxes paid
Net cash generated from (used in) operating activities
9,447
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of subsidiaries, net of cash acquired

Acquisition of intangibles
Purchase of fixed assets
Long-term investment
Proceeds from disposal of fixed assets
Redemption of short-term notes
Interest received
Grants received
Net cash used in investing activities
15
14
CONSOLIDATED STATEMENT OF CASH FLOWS
(CONTINUED)
NOTE
2002
2001
$000
$000
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of new shares, net of expenses

Proceeds from minority shareholders of a subsidiary
Proceeds from (payment of) long-term loans, net
Proceeds from short-term loan
Payment of hire purchase creditors
Payment of finance lease creditors, net
Payment of dividends
12,625
4,554
478
(48)
(26)
(1,834)
14,328
4
(95)
575
(182)
(5)
(2,344)
Net cash generated from financing activities
15,749
12,281
NET INCREASE IN CASH AND CASH EQUIVALENTS
13,184
4,421
(497)
2,556
2,040
(175)
17,108
4,421
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR

EFFECT OF EXCHANGE RATE CHANGES
CASH AND CASH EQUIVALENTS AT END OF YEAR

A. CASH AND CASH EQUIVALENTS
GROUP
2002
$000

Fixed deposits
Bank overdrafts
2001
$000
3,770
13,338
3,657
899
(135)
17,108
4,421
P.16.
17
NOTES TO THE FINANCIAL STATEMENTS

01. CORPORATE INFORMATION

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 Companys 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.
02. SIGNIFICANT ACCOUNTING POLICIES

(A)
BASIS OF PREPARATION
The financial statements of the Company and of the Group which are expressed in Singapore dollars, are prepared in
accordance with Singapore Statements of Accounting Standard (SAS) and under the historical cost convention.
(B)
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the financial statements of the Company and its subsidiaries.
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 Groups share of the post-acquisition results of associated companies is included in the consolidated profit and
loss account. The Groups 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.
(CONTINUED)
02. SIGNIFICANT ACCOUNTING POLICIES

(C)
(CONTINUED)
SUBSIDIARIES AND ASSOCIATED COMPANIES
Investments in subsidiaries and associated companies are stated in the financial statements of the Company at cost.
Provision is made where there is a decline in value that is other than temporary.
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.
(D)
LONG-TERM INVESTMENTS
Investments held for long-term purposes are stated at cost. Provision for impairment for long-term investments is
made when there is a decline, other than temporary, in value of the investments.
(E)
FIXED ASSETS
Fixed assets are stated at cost, net of depreciation and any impairment loss. The cost of an asset comprises its
purchase price and any directly attributable costs of bringing the asset to working condition for its intended use.
Expenditure for additions, improvements and renewals are capitalised and expenditure for maintenance and repairs
are charged to the profit and loss account. When assets are sold or retired, their cost and accumulated depreciation
are removed from the financial statements and any gain or loss resulting from their disposal is included in the profit and
loss account.
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:
Plant and machinery
Motor vehicles
Computers
Office equipment
Leasehold properties and improvements
Furniture and fittings
Renovation
4 - 5 years
4 - 5 years
1 - 4 years
4 - 5 years
Over the lease period
4 - 10 years
4 - 5 years
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.
(II)
RESEARCH AND DEVELOPMENT EXPENDITURE
Research and development costs are charged against income in the period incurred except for development
costs that are expected to have future benefits. Development costs that have been capitalised are amortised
on a straight-line basis over the period of their expected benefits, which normally does not exceed 5 years.
(III)
LICENSING FEES
The initial cost of acquiring licenses is capitalised and amortised on a straight-line basis over the period of
the licensing agreement.
P.18.
02.
SIGNIFICANT ACCOUNTING POLICIES

(G)
19
(CONTINUED)
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.
Provision is made for deteriorated, damaged, obsolete and slow-moving stocks.
(H)
WORK-IN-PROGRESS
Work-in-progress is stated at cost plus attributable profit net of progress billings and provision for foreseeable losses.
(I)
TRADE AND OTHER DEBTORS
Trade and other debtors which generally have 30 - 90 day terms, are recognised and carried at original invoice amount
less an allowance for any uncollectible amounts. An estimate for doubtful debts is made when collection of the full
amount is no longer probable. Bad debts are written off as incurred.
Receivables from related parties are recognised and carried at cost less provision for doubtful debts.
(J)
CASH AND CASH EQUIVALENTS
Cash and cash equivalents are defined as cash on hand and cash with banks, including bank overdrafts, demand
deposits and short-term, highly liquid investments readily convertible to known amounts of cash and subject to
insignificant risk of changes in values.
(K)
IMPAIRMENT OF ASSETS
Fixed assets, intangibles and investments are reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount of the asset may not be recoverable. Whenever the carrying amount of an asset
exceeds its recoverable amount, an impairment loss is recognised in the profit and loss account for items of fixed
assets, intangibles and investments carried at cost. The recoverable amount is the higher of an assets net selling price
and value in use. The net selling price is the amount obtainable from the sale of an asset in an arms length transaction.
Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset
and from its disposal at the end of its useful life. Recoverable amounts are estimated for individual assets or, if it is not
possible, for the cash-generating unit.
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.
(L)
TRADE AND OTHER CREDITORS
Trade and other creditors which are normally settled on 30 - 90 day terms, are carried at cost which is the fair value of
the consideration to be paid in the future for goods and services received.
Payables to related parties are carried at cost.
(M)
PROVISION FOR WARRANTY
Provision for warranty claims is made on the basis of estimated cost to fulfil warranty obligations. The provision represents
the best estimate of the Groups liability to repair or replace products still under warranty at the balance sheet date.
(CONTINUED)
02.

(N)
(CONTINUED)
HIRE PURCHASE AND LEASES
Fixed assets acquired under hire purchase or finance lease are capitalised and depreciated over their estimated useful
lives. The capital elements of hire purchase or finance lease obligations are recorded as liabilities, while the interest
elements are charged to the profit and loss account over the period of the lease to produce a constant rate of charge
on the balance of capital repayments outstanding.
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.

(P)
REVENUE RECOGNITION
When the outcome of a contract can be estimated reliably, revenue from a fixed price contract is recognised using the
percentage-of-completion method, measured by the value of work performed to date to estimated total contract value.
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 shareholders rights to receive payment is established.
Group turnover excludes intercompany transactions and turnover of associated companies.
(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.
(R)
EMPLOYEE BENEFITS
(I)
DEFINED CONTRIBUTION PLANS
As required by law, the Company makes contribution to the Central Provident Fund (CPF). CPF contributions
are recognised as compensation expense in the same period as the employment that gives rise to the
contribution.
(II)
EQUITY COMPENSATION BENEFITS
Pursuant to the Hyflux Employees Share Option Scheme, certain directors and employees have been granted
non-transferable options to purchase the Companys shares. There are no charges to the profit and loss
account upon the grant or exercise of options. When the options are exercised, shareholders equity is
increased by the amount of the proceeds received.
(S)
DEFERRED TAXATION
Deferred income tax is provided, using the liability method, on all temporary differences at the balance sheet date
between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred tax
assets and liabilities are measured using the tax rates expected to apply to taxable income in the years in which those
temporary differences are expected to be recovered or settled based on tax rates enacted or substantively enacted at
the balance sheet date.
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.
P.20.
02.

(S)
DEFERRED TAXATION
21
(CONTINUED)
(CONTINUED)
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.
(T)
FOREIGN CURRENCIES
Foreign currency transactions are translated into Singapore dollars at exchange rates closely approximating those
ruling at the transaction dates. Foreign currency monetary assets and liabilities at the balance sheet date are translated
into Singapore dollars at exchange rates approximating those ruling at that date. All resulting exchange differences are
recognised in the profit and loss account.
(U)
FINANCIAL INSTRUMENTS
Financial assets and financial liabilities carried on the balance sheet include cash and cash equivalents, trade and
other accounts receivables and payable, loans and borrowings. The accounting policies on recognition and measurement
of these items are disclosed in the respective accounting policies found in this Note.
(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 arms length basis.
(W)
CHANGES IN ACCOUNTING POLICIES
SAS 12 (2001): Income Taxes

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 Groups increased by $644,362.
(CONTINUED)
03. FIXED DEPOSITS

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
2002
COMPANY
2001
$000
2002
$000
$000
2001
$000
AT COST
Raw materials
Work-in-progress
Finished goods
Goods-in-transit
3,562
528
1,019
497
2,587
36
459
198
421
113
5,606
(204)
3,082
(202)
619
113
5,402
2,880
619
113
Movements in provision for stock obsolescence during the

financial year:
At beginning of year
Arising from acquisition of subsidiaries
Provision for the year
Translation difference
202
13
(11)
191
11
At end of year
204
202
Raw materials carried at net realisable value amounted to approximately $3,358,000 (2001: $2,385,000).
05. TRADE DEBTORS

GROUP
2002
Trade debtors
Provision for doubtful debt
COMPANY
2001
$000
2002
$000
$000
2001
$000
14,351
(1,538)
6,099
(1,280)
2,613
12,813
4,819
2,613
P.22.
05. TRADE DEBTORS
(CONTINUED)
GROUP
2002
COMPANY
2001
$000
23
Movements in provision for doubtful debts during the

financial year:
Provision for the year
Provision utilised
1,280
601
(300)
(43)
At end of year
1,538
2002
$000
$000
2001
$000
170
767
300
43
1,280
06. WORK-IN-PROGRESS
GROUP
2002
$000
Project costs and attributable profits

Less: progress billings
2001
$000
16,195
14,342
16,195
14,342
07. OTHER DEBTORS, DEPOSITS AND PREPAYMENTS

GROUP
2002
COMPANY
2001
$000
$000
2002
$000
2001
$000
Deposits
Prepayments
Sundry debtors
39
136
2,271
145
299
1,210
1,006
177
46
Provision for doubtful debts
2,446
(67)
1,654
(71)
1,006
223
2,379
1,583
1,006
223
Movements in provision for doubtful debts during the

financial year:
71
(4)
67
4
At end of year
67
71
(CONTINUED)
08. DUE FROM SUBSIDIARIES (NON-TRADE)

These non-trade balances are unsecured, interest-free and expected to be repaid within 12 months.
09. BANK OVERDRAFTS/SHORT-TERM LOANS/LONG-TERM LOANS

(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
2002
Long-term bank loans

Not later than 1 year
1 year to 5 years
COMPANY
2001
$000
2002
$000
$000
2001
$000
1,623
4,267
445
891
1,154
3,846
5,890
1,336
5,000
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.
10. OTHER CREDITORS AND ACCRUALS

GROUP
2002
Other creditors
Accrued operating expenses
Advance payments from customers
Deferred revenue
COMPANY
2001
$000
2002
$000
$000
2001
$000
917
574
107
334
535
379
223
334
226
211
19
163
1,932
1,471
437
182
P.24.
25
11. PROVISION FOR WARRANTY

GROUP
2002
$000
2001
$000
Write-back of provision
50
244
(194)
At end of year
50
50
12. HIRE PURCHASE CREDITORS

GROUP
MINIMUM
LEASE
PAYMENTS
$000
PRESENT
VALUE OF
PAYMENTS
INTEREST
$000
$000
2002
1 year to 5 years
85
54
(12)
(7)
73
47
139
(19)
120
139
56
(20)
(7)
119
49
195
(27)
168
2001
1 year to 5 years
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.
(CONTINUED)
13. FINANCE LEASE CREDITORS

GROUP
MINIMUM
LEASE
PAYMENTS
$000
PRESENT
VALUE OF
PAYMENTS
INTEREST
$000
$000
2002
1 year to 5 years
66
15
(3)
(1)
63
14
81
(4)
77
16
7
(2)
(2)
14
5
23
(4)
19
2001
1 year to 5 years
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.
1,211
320
At 31.12.2002
Charge for 2001
2,236
1,859
At 31.12.2002
At 31.12.2001
NET BOOK VALUE
814
850
259
1,089
(18)
(36)
(23)
44
78
176
376
102
274
333
810
465
769
At 1.1.2002
Charge for the year
Disposals
ACCUMULATED DEPRECIATION
454
1,939
3,447
156
467
50
247
(2)
97
(31)
183
714
At 31.12.2002
(9)
(27)
(42)
(18)
6,883
6,806
144
419
201
218
7,225
(4)
(66)
124
7,101
426
339
136
142
198
20
187
(7)
(7)
60
141
385
(9)
(12)
123
283
318
360
1,624
889
2,628
At 1.1.2002
Additions
Disposals
COST
GROUP
$000
127
88
40
184
(3)
(2)
45
144
272
(3)
21
(17)
271
$000
$000
$000
$000
$000
$000
IN-PROGRESS
CONSTRUCTION-
$000
1,179
2,298
2,298
(96)
1,179
1,215
RENOVATION
AND
FITTINGS
EQUIPMENT
TOTAL
$000
11,204
13,021
1,009
3,713
(53)
(76)
1,303
2,539
16,734
(90)
(213)
3,294
13,743
COMPUTERS
VEHICLES
MACHINERY
FURNITURE
AND
IMPROVEMENTS
OFFICE
MOTOR
PLANT AND
LEASEHOLD
PROPERTIES
14. FIXED ASSETS
P.26.
27
(CONTINUED)
14. FIXED ASSETS
(CONTINUED)
PLANT AND
MACHINERY
MOTOR
VEHICLES
$000
TOTAL
$000
$000
COMPANY
COST
At 1.1.2002
Additions
641
689
150
791
689
1,330
150
1,480
110
202
35
30
145
232
At 31.12.2002
312
65
377
Charge for 2001
110
30
140
At 31.12.2002
1,018
85
1,103
At 31.12.2001
531
115
646
At 31.12.2002
ACCUMULATED DEPRECIATION
At 1.1.2002
Charge for the year
NET BOOK VALUE
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.
P.28.
29
15. SUBSIDIARIES
COMPANY
2002
$000
Unquoted equity shares, at cost
$000
8,039
NAME OF COMPANY
2001
4,631
PRINCIPAL
COUNTRY OF
INCORPORATION
AND PLACE
EFFECTIVE
EQUITY
INTEREST
HELD BY
COST OF
ACTIVITIES
OF BUSINESS
THE GROUP
INVESTMENT
2002
2001
2002
$000
2001
$000
HELD BY THE COMPANY
Hydrochem (S)
Pte Ltd
Manufacturing and
processing of water
treatment equipment.
Provision of turnkey
engineering services
and installation of
industrial equipment.
Singapore
100
100
1,800
800
Hydrochem
Provision of
Engineering (S)
consultancy and design
Pte Ltd
services in the installation
of industrial equipment
and in the application of
chemicals for industrial use.
Wholesale of chemical
and fabricated parts.
Singapore
100
100
2,280
2,280
Hyflux
Engineering
Pte Ltd
Operation of water and

liquid treatment plants
and sale of treated water.
Singapore
100
100
Hyflux
International
Ltd (1)
Investment holding,
selling, distribution,
import and export of
products and component
systems in liquid treatment.
Provision of engineering
expertise, maintenance
services and technical
know-how.
British
Virgin
Islands
100
(CONTINUED)
15. SUBSIDIARIES
(CONTINUED)
PRINCIPAL
ACTIVITIES
NAME OF COMPANY
EFFECTIVE
EQUITY
INTEREST
HELD BY
THE GROUP
COUNTRY OF
INCORPORATION
AND PLACE
OF BUSINESS
2002
COST OF
INVESTMENT
2001
2002
$000
2001
$000
HELD BY THE COMPANY

(CONTINUED)
Hangzhou Zheda Hyflux

Hualu Membrane
Technology Co., Ltd (2)
Production
of materials,
machinery and
equipment for
membrane
separation
Peoples
Republic
of China
55
55
3,959
1,551
8,039
4,631
HELD BY SUBSIDIARIES
Hydrochem Engineering
(Shanghai) Co., Ltd (2)
Ningbo Hualu
Membrane
Technology
Co., Ltd (3)
*
(1)
(2)
(3)
Development,
manufacture
and sale of
manufactured
equipment and
parts for membrane
filtration technology.
Provision of technical
and consultancy
services, installation
and commissioning
of liquid separation
and treatment
systems.
Peoples
Republic
of China
100
100
Development and
manufacture of
equipment and
parts for membrane
filtration technology
Peoples
Republic
of China
75
75
Denotes amounts less than $1,000

Not required to be audited by the law of the country of incorporation.
Audited by Shu Lun Pan Certified Public Accountants Co., Ltd., PRC.
Audited by Ningbo Hai Cheng Certified Public Accountants Co., Ltd., PRC.
P.30.
15. SUBSIDIARIES
31
(CONTINUED)
There was no acquisition of subsidiaries during the financial year.

GROUP
2002
$000
2001
$000
Stocks
Trade debtors
Due from holding company (non-trade)
Trade creditors
Short-term loan
Fixed assets, net
Intangibles
Associated company
Term loan
Minority interests
Goodwill on consolidation
1,167
623
4,215
1,060
930
(1,014)
(1,286)
(632)
685
2,407
334
(1,265)
(3,350)
341
Net assets acquired

Less: Purchase consideration satisfied via share issue
Less: Cash and bank balances
4,215
(4,215)
(930)
Net cash inflow from acquisition of subsidiaries
(930)
16. ASSOCIATED COMPANY

GROUP
2002
$000

Share of post acquisition reserves
2001
$000
334
(78)
(1)
334
(28)
255
306
(CONTINUED)
16. ASSOCIATED COMPANY
(CONTINUED)
NAME
COUNTRY OF
INCORPORATION
AND PLACE OF
BUSINESS
EFFECTIVE EQUITY
INTEREST HELD
BY THE GROUP
2002
Xiamen Zheda
Huatong
Membrane
Technology
Co., Ltd
Development, manufacture of
equipment and parts primarily for
membrane filtration technology,
sale of manufactured equipment
and ancillary parts, provision of
installation and commissioning of
relevant projects and provision of
technical services and consultation
Peoples
Republic
of China
2001
30
30
17. LONG-TERM INVESTMENT

GROUP
2002
$000
2001
$000
1,735
18. INTANGIBLES
INTELLECTUAL
PROPERTY
RIGHTS
GOODWILL ON
CONSOLIDATION
GROUP
$000
DEVELOPMENT
COSTS
$000
LICENSING
FEES
$000
TOTAL
$000
$000
COST
Adjustment
Additions
1,158
(185)
2,407
499
657
559
4,064
(185)
1,216
973
2,407
1,156
559
5,095
Amortisation for the year
297
195
161
459
83
50
158
186
508
998
83
At end of year
492
703
208
186
1,589
At end of year
ACCUMULATED AMORTISATION
P.32.
18. INTANGIBLES
(CONTINUED)
INTELLECTUAL
PROPERTY
RIGHTS
GOODWILL ON
CONSOLIDATION
GROUP
$000
33
DEVELOPMENT
COSTS
$000
LICENSING
FEES
$000
TOTAL
$000
$000
NET BOOK VALUE
At 31.12.2002
481
1,704
948
373
3,506
At 31.12.2001
861
2,246
449
3,556
19. SHARE CAPITAL

GROUP AND COMPANY
2002
$000
Authorised:
1,000,000,000 ordinary shares of $0.05 each
$000
50,000
50,000
Issued and fully paid

178,172,394 (2001: 144,687,992) ordinary shares of $0.05 each
8,909
7,234
Issued during the year

2,900
1,675
11,809
8,909
At end of year
2001
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.
(1,186,000)
(983,000)
These additional options arose due to the bonus issue of shares on 17 June 2002.
1,926,500
2,736,000
7,050,000
625,000
655,000
1.08.2002
16.09.2002
5,000
50,000
20,000
200,000
800,000
3.05.2002
8.07.2002
8.04.2002
28.03.2002
(25,000)
6,500
50,000
41,250
25.01.2002
25.03.2002
9,543,500
625,000
655,000
25,000
250,000
800,000
32,500
250,000
181,250
56,250
6,668,500
(983,000)
(1,161,000)
11,250
1,762,500
45,000
200,000
26,000
165,000
7,050,000
15.10.2001
11.01.2002
EXERCISED
96
1
7
1
1
3
1
1
4
76
LAPSED
OPTIONS*
GRANTED
1.1.2002
OPTIONS
PRICE
1.104
0.913
1.013
1.032
1.062
0.773
1.032
1.019
0.773
0.504
EXERCISE
AS AT
31.12.2002
AS AT
31.12.2002
OPTIONS
OPTIONS
BONUS
OPTIONS
PERIOD
EXERCISABLE
15.10.2002 - 27.09.2011
11.01.2003 - 27.09.2011
25.01.2003 - 27.09.2011
25.03.2003 - 27.09.2011
28.03.2003 - 27.09.2011
8.04.2003 - 27.09.2011
3.05.2003 - 27.09.2011
8.07.2003 - 27.09.2011
1.08.2003 - 27.09.2011
16.09.2003 - 27.09.2011
AS AT
NO. OF
HOLDERS
BALANCE
BALANCE
DATE OF
GRANT OF
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:
(CONTINUED)
19. SHARE CAPITAL
(CONTINUED)
P.34.
35
20. SHARE PREMIUM

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.
21. REVENUE RESERVE

GROUP
2002
$000
Retained by:
the Company
subsidiaries
associated company
2001
$000
13,859
6,594
(78)
324
9,652
(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
2002
Contract revenue
Sale of membranes
Dividend income from unquoted subsidiaries
COMPANY
2001
$000
2002
$000
$000
2001
$000
45,267
27,235
6,631
1,263
10,741
1,394
936
45,267
27,235
18,635
2,330
23. OTHER OPERATING INCOME

GROUP
2002
Service fee income from an investee company

Sundry income
COMPANY
2001
$000
$000
2002
$000
2001
$000
1,329
212
212
1,329
176
1,541
212
1,505

24. PERSONNEL EXPENSES

GROUP
2002
Wages, salaries and bonuses

Pension contributions
Other personnel expenses
COMPANY
2001
$000
2002
$000
$000
2001
$000
5,536
403
951
3,853
426
519
429
5
22
125
10
23
6,890
4,798
456
158
16
326
6,906
5,124
456
158
Wages and salaries included in research and

development costs (Note 25)
25. RESEARCH AND DEVELOPMENT COSTS

GROUP
2002
$000
Material costs
Wages and salaries
Grants received
2001
$000
60
16
321
326
76
(76)
647
(349)
298
P.36.
37
26. PROFIT FROM OPERATIONS

This is determined after charging (crediting) the following:
GROUP
2002
Auditors remuneration
auditors of the Company
other auditors
Bad trade debts written off
Non-audit fees
auditors of the Company
other auditors
Directors fees
Directors remuneration
Foreign exchange loss (gain), net
(Gain) loss on disposal of fixed assets
Operating lease expenses
Preliminary expenses written off
Provision for doubtful trade debts
Professional fees paid to a firm of which a director is a member
Write-back of provision for warranty
Depreciation of fixed assets
COMPANY
2001
$000
2002
$000
$000
2001
$000
998
385
67
11
850
67
6
29
29
17
2
132
609
(169)
10
103
68
300
(194)
1,009
180
232
132
140
18
180
613
406
(1)
189
601
13
5
1,303
27. DIRECTORS REMUNERATION

Number of directors of the Company in remuneration bands.
2002
$500,000 and above

$250,000 to $499,000
Below $250,000
2001
1
5
1
5
(CONTINUED)
28. FINANCIAL EXPENSES

GROUP
2002
Interest expense
bank overdrafts
finance lease
hire purchase
bills payable
term loan
COMPANY
2001
$000
2002
$000
$000
2001
$000
4
1
8
340
2
12
4
46
225
353
64
226
29. FINANCIAL INCOME

GROUP
2002
Interest income
bank deposits
fixed deposits
commercial papers
COMPANY
2001
$000
$000
2002
$000
2001
$000
7
76
8
81
87
16
41
87
83
176
16
128
30. TAXATION/DEFERRED TAX LIABILITIES

Major components of income tax expense for the year ended 31 December were:
GROUP
2002
Current tax
current year
over provision in respect of prior year
Deferred tax
current year
(56)
(56)
COMPANY
2001
$000
2002
$000
$000
2001
$000
2,058
(33)
2,364
229
72
2,097
2,364
229
P.38.
30. TAXATION/DEFERRED TAX LIABILITIES
39
(CONTINUED)
The reconciliation of the tax expense and the product of accounting profit multiplied by the applicable tax rate is as follows:
GROUP
2002
Accounting profit
Tax at the applicable rate of 22% (2001: 24.5%)
Tax effect of:
expenses not deductible for tax purposes
application of group relief
income not subject to tax
deferred tax assets not recognised
overprovision in respect of prior year
COMPANY
2001
$000
2002
$000
$000
2001
$000
11,803
9,447
17,733
1,259
2,597
2,314
3,901
308
(289)
(1,248)
(79)
2,364
229
123
(2,972)
252
(56)
170
(358)
4
(33)
(56)
2,097
Tax (credit)/expense
GROUP
In accordance with the Income Tax Law of the Peoples 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.
Deferred taxation as at 31 December relate to the following:
GROUP
2002
Deferred tax liabilities

excess of net book value over tax written down
value of fixed assets
489
COMPANY
2001
$000
$000
489
2002
$000
$000
2001
(CONTINUED)
31. EARNINGS PER SHARE

Earnings per share is calculated by dividing the Groups 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 Groups 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
GROUP AND COMPANY
2002
$000
Interim (2001: final) dividend of 1 cent (2001: 0.503 cent)

per share, less tax at 22% (2001: 24.5%)
2001
$000
1,834
645
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.
33. COMMITMENTS AND CONTINGENCIES

(I)
NON-CANCELLABLE OPERATING LEASE COMMITMENTS
The Group has various operating lease agreements for offices and rental of land. Most leases contain renewable
options. Some of the leases contain escalation clauses. Lease terms do not contain restrictions on the Groups activities
concerning dividends, additional debt or further leasing.
Future minimum rentals under non-cancellable leases are as follows as at 31 December:
GROUP
2002
$000
Within one year

After one year but not more than five years
More than five years
(II)
2001
$000
192
714
6,885
200
714
7,183
7,791
8,097
CAPITAL COMMITMENTS
The Group is committed to increase the registered/paid-in capital of a subsidiary and a long-term investment by
US$160,000 and US$700,000, respectively.
P.40.
41
34. SUBSEQUENT EVENTS

Subsequent to the financial year end,
(I)
PRIVATE PLACEMENT TO SELETAR INVESTMENTS PRIVATE LIMITED
On 9 January 2003, 11,811,000 new ordinary shares of $0.05 each were issued at $1.00 per share for cash pursuant
to a private placement to Seletar Investments Private Limited, a wholly-owned subsidiary of Temasek Holdings
(Private) Limited.
(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.
(III) STRATEGIC ALLIANCE AGREEMENT WITH AIR 2 WATER INC.
The Company signed a Strategic Alliance Agreement to take an initial 2% equity stake for US$1,000,000 and up to
a 10% equity stake in Air 2 Water Inc (A2W) of California, USA. A2W will own 100% of Worldwide Water Inc. (WWI),
the owner of various patents, granted and pending, in USA and in several other countries in Europe and in Asia.
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
Peoples 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.
35. RELATED PARTY INFORMATION

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
$000
1,329
5,146
$000
INCOME
Service fee income from an investee company

Contract revenue from an investee company
Contract revenue from affiliated companies
2001
3,337
(CONTINUED)
36. FINANCIAL INSTRUMENTS

FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The main risks arising from the Groups financial instruments are interest rate, liquidity, foreign exchange and credit risks.
The management reviews, manages and monitors each of these risks and will recommend necessary actions to the Board
as appropriate.
INTEREST RATE RISK
The Group obtains additional financing through bank borrowings and leasing arrangements. The Groups policy is to obtain
the most favourable interest rates available without increasing its foreign currency exposure.
Surplus funds are placed with reputable banks.
Information relating to the Groups interest rate exposure is also disclosed in the notes on the Groups borrowings, including
leasing obligations.
LIQUIDITY RISK
The Groups 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 Groups
operations. Short-term credit facilities are available for contingency purposes.
FOREIGN EXCHANGE RISK
The Groups income is mainly in Singapore Dollar (S$), United States Dollar (US$) and China Renminbi (RMB). Any significant
fluctuation in US$ and RMB against the Groups base currency, S$, will result in fluctuation in the Groups income.
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 Groups 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
Groups 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 Groups significant financial assets as at 31 December 2002 are as follows:
PEOPLES
REPUBLIC
OF CHINA
SINGAPORE
$000
Trade debtors
Fixed deposits
Sundry debtors
6,559
13,338
929
1,095
OTHERS
$000
6,233
2,839
1,284
GROUP
$000
21
$000
12,813
13,338
3,770
2,379
P.42.
36. FINANCIAL INSTRUMENTS
43
(CONTINUED)
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.
Cash and cash equivalents
The carrying amounts approximate fair values due to their nature and liquidity.
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.
Short-term loans and bank overdrafts
The carrying amounts approximate fair values as they are short term in nature.
Long-term loans
The carrying amounts approximate fair values as these instruments bear interest at variable rates.
Hire purchase creditors
The fair value is determined by discounting the relevant cash flow using current interest rates for similar instruments at balance
sheet date.
Off-balance sheet financial instruments
The fair value of interest rate swaps are calculated based on the present value of the estimated future cash flows.
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:
UNDERLYING
PRINCIPAL
NOTE
$000
Hire purchase creditors

Finance lease creditors
Interest rate swap
12
13
5,000
2002
ESTIMATED
FAIR VALUE
CARRYING
AMOUNT
$000
120
77
$000
128
67
(27)
2001
ESTIMATED
FAIR VALUE
CARRYING
AMOUNT
168
19
GEOGRAPHICAL SEGMENTS
The Group is organised into 2 main geographical segments, based on the location of the customers, namely:
Singapore
Peoples Republic of China
Inter-segment pricing is on an arms length basis.
$000
37. SEGMENT INFORMATION
Others include revenue from projects in Malaysia and other countries and dividend income.
$000
176
20
(CONTINUED)

(CONTINUED)
(CONTINUED)
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.
2002
PEOPLES
REPUBLIC
OF CHINA
SINGAPORE
$000
OTHERS
$000
ELIMINATIONS
$000
GROUP
$000
$000
TURNOVER
External sales
Inter-segment sales
Dividend income
23,902
1,485
19,820
323
1,545
10,741
(1,808)
(10,741)
45,267
Total turnover
25,387
20,143
12,286
(12,549)
45,267
4,991
7,048
84
SEGMENT RESULTS
12,123
Financial expenses
Financial income
Share of results of
associated company
Taxation
(353)
83
(50)
56
Profit after taxation
11,859
OTHER INFORMATION
Assets
Unallocated assets
44,272
27,406
Total assets
Liabilities
Unallocated liabilities
72,414
10,034
4,761
Total liabilities
Capital expenditure
Depreciation
Other non-cash expenses
71,678
736
14,795
1,210
16,005
3,333
1,036
344
1,367
1,697
267
459
97
195
5,030
1,303
998
1,464
P.44.

(CONTINUED)
(CONTINUED)
2001
PEOPLES
REPUBLIC
OF CHINA
SINGAPORE
$000
45
OTHERS
$000
ELIMINATIONS
$000
GROUP
$000
$000
TURNOVER
External sales
Inter-segment sales
Dividend income
11,219
1,399
12,364
308
3,652
936
(1,707)
(936)
27,235
Total turnover
12,618
12,672
4,588
(2,643)
27,235
3,486
4,742
1,135
SEGMENT RESULTS
9,363
Financial expenses
Financial income
Taxation
(64)
176
(28)
(2,097)
Profit after taxation
7,350
OTHER INFORMATION
Assets
Unallocated assets
19,601
16,001
6,478
42,080
1,166
Total assets
43,246
Liabilities
Unallocated liabilities
2,229
2,375
834
5,438
3,092
Total liabilities
8,530
Capital expenditure
Depreciation
Other non-cash expenses
4,447
709
50
268
1,504
161
160
(162)
641
139
175
6,592
1,009
385
106
BUSINESS SEGMENTS
Turnover is reported according to business segments as follows:

TURNOVER
2002
$000
Industrial
Municipal
2001
$000
23,455
21,812
22,404
4,831
45,267
27,235
Segmentation by assets and capital expenditure is not meaningful as the assets are applied interchangeably amongst the
business segments.
38. COMPARATIVE FIGURES

Comparative figures were audited by a firm of certified public accountants other than Ernst and Young.
SUPPLEMENTARY INFORMATION
- SGX-ST LISTING MANUAL REQUIREMENTS
SUMMARY OF MAJOR PROPERTIES
APPROXIMATE
SITE AREA
EXISTING
TOTAL
LETTABLE
GROUPS
EFFECTIVE
DESCRIPTION
LOCATION
(SQ M)
USE
AREA (SQ M)
INTEREST (%)
TENURE
Office and
Factory
5, Changi South
Street 1,
Singapore
486764
10,472
Office and
Factory
5,630
100
60 years
commencing
from
1 March 1997
Office
40, Changi South

Street 1,
Singapore
486764
2,426
Office
1,328
100
60 years
commencing
from
1 Dec 1996
Factory
Building
No.99 JuLi Road

Zhangjiang
High Tech,
Pudong
Shanghai,
China 01204
5,633
Office and
Factory
3,241
100
50 Years
commencing
from
26 April 2001
Apartment
Jinqiao Garden
Service
Apartment,
Block A, Floor 9,
Unit 2,
Shanghai, China
32
Staff quarters
59
100
70 years
commencing
from
15 Feb 1994
INTERESTED PERSON TRANSACTIONS

There were no interested person transactions during the financial year.
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.
P.46.
47
(CONTINUED)
CORPORATE GOVERNANCE STATEMENT
The Company is committed to maintaining a high standard of corporate governance to ensure better protection of shareholders
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).
BOARD OF DIRECTORS (PRINCIPLES 1, 2, 3 AND 4)

ROLE OF THE BOARD
The primary role of the board of directors of the Company (the Board) is to protect and enhance long-term shareholders value. It is
responsible for setting the strategic direction of the Group. It also supervises the management of the Group (the Management),
including establishing goals for Management and monitoring the achievement of these goals. Other matters within the purview of the
Board include the appointment of directors, review of the Groups financial performance and major funding or investment proposals
and other material transactions.
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:
NAME
NOMINATING
REMUNERATION
BOARD OF DIRECTORS
AUDIT COMMITTEE
COMMITTEE#
COMMITTEE*
NO. OF
MEETINGS
NO. OF
MEETINGS
NO. OF
MEETINGS
NO. OF
MEETINGS
NO. OF
MEETINGS
NO. OF
MEETINGS
NO. OF
MEETINGS
NO. OF
MEETINGS
HELD
ATTENDED
HELD
ATTENDED
HELD
ATTENDED
HELD
ATTENDED
Olivia Lum Ooi Lin

Foo Hee Kiang
Deirdre Murugasu
Gay Chee Cheong
Teo Kiang Kok
Lee Joo Hai
2
2
2
2
2
2
2
2
2
2
2
2
2
NA
NA
2
2
2
2
NA
NA
2
2
2
1
NA
NA
1
1
1
1
NA
NA
1
1
1
1
NA
NA
1
1
1
1
NA
NA
1
1
1
# Nominating Committee was formed on 3 September 2002

* Remuneration Committee was formed on 3 September 2002
TRAINING FOR DIRECTORS
The Board has in place programmes for each newly appointed director to receive appropriate training, including an orientation programme
to familiarize him with the Groups structure and its business. In addition, the Executive Directors have regularly participated in seminars
and/or conferences to keep abreast of the latest developments which are relevant to the Group.
BOARD COMPOSITION AND BALANCE
The directors of the Company in office as at the date of this report are set out in the Directors Report. The Nominating Committee has
reviewed the size and composition of the Board. It is satisfied that the current Board size is appropriate and effective, and that the
Board comprises professionals who are suitably qualified to meet the Companys objectives. The Board comprises 6 members who
have business or management experience or professionals with a financial or legal background
(CONTINUED)
(CONTINUED)
(CONTINUED)
THE BOARD
OLIVIA LUM OOI LIN
Ms Lum is the founder of the Group and was appointed as the Managing Director on 31 March 2000. She is overall responsible for the
Groups business operations.
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.
FOO HEE KIANG
Mr Foo was appointed as an Executive Director on 8 September 2000. He is primarily responsible for the marketing and sales of the
products and services of the Group. Mr Foo holds a Bachelor of Engineering degree from the National University of Singapore. He was
last re-elected on 17 May 2002.
GAY CHEE CHEONG
Mr Gay was appointed as a Non-Executive Non-Independent Director on 3 August 2001. He is also a member of the Audit, Remuneration
and Nominating Committees. Mr Gay holds Bachelor of Science (Hons) in Engineering from the Royal Military College of Shrivenham,
UK and an Economics degree from the University of London, as well as a Masters of Business Administration from the National
University of Singapore.
He serves on the board of a number of other companies, including Pentex-Schweizer Circuits Ltd, Avaplas Ltd and Raffles Lasalle Ltd.
Mr Gays last re-election was on 17 May 2002.
LEE JOO HAI
Mr Lee was appointed as a Non-Executive Independent Director on 19 December 2000. He is also the Chairman of the Audit Committee
and members of the Remuneration and Nominating Committee. He is a Certified Public Accountant of Singapore and is a member of
the Institute of Chartered Accountants in England and Wales. Mr Lee is currently a partner in a public accounting firm in Singapore.
He serves on the board of a number of other companies, including IPC Corporation Ltd and Unisteel Technology Limited.
Mr Lees last re-election was on 17 May 2002.
TEO KIANG KOK
Mr Teo was appointed as a Non-Executive Independent Director on 19 December 2000. He is also the Chairman of the Remuneration
and Nominating Committee and a member of the Audit Committee. Mr Teo is a senior partner of Shook Lin & Bok, a firm of advocates
and solicitors. He holds a LLB (Hons) Barrister-at-Law (Lincolns Inn) from the Singapore University and is an Advocate and Solicitor
under the Legal Profession Act of Singapore.
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.
Mr Teos last re-election was on 25 May 2001.
P.48.
49
(CONTINUED)
CHAIRMAN
The Company currently does not have a Chairman to preside over the Board. The Board is of the opinion that the process of decisionmaking 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 OF DIRECTORS
The Board has 2 Non-Executive Independent members, representing one-third of the Board. They are Mr Teo Kiang Kok and
Mr Lee Joo Hai. The Board has one Non-Executive Non-Independent Director, namely, Mr Gay Chee Cheong. The Board considers an
independent director as one who has no relationship with the Company, its related Companies or its officers that could interfere or be
reasonably perceived to interfere, with the exercise of the directors independent business judgement.
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:
- the Audit Committee
- the Remuneration Committee
- the Nominating Committee
Each of the above Committees has its respective written terms of reference and operating procedures, which will be reviewed on a
regular basis.
AUDIT COMMITTEE (PRINCIPLE 11)
The Audit Committee comprises the following members:

Lee Joo Hai (Chairman)
Teo Kiang Kok
Olivia Lum Ooi Lin
Gay Chee Cheong
appointed
appointed
appointed
appointed
on
on
on
on
17
17
17
23
January 2001
January 2001
January 2001
August 2001
with legal, accounting, financial management expertise or experience and is chaired by a Non-Executive Independent Director.
The primary functions of the Audit Committee are as follows:
a) review with the external auditors the scope and results of the audit, system of internal controls, their management letter and
managements 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;
(CONTINUED)
(CONTINUED)
(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.
REMUNERATION COMMITTEE (PRINCIPLES 7 AND 8)
The Remuneration Committee was established on 3 September 2002 and comprises the following members:
Teo Kiang Kok (Chairman)
Lee Joo Hai
Gay Chee Cheong
Olivia Lum Ooi Lin
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.
The Remuneration Committee undertakes the following responsibilities:
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.
P.50.
51
(CONTINUED)
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.
NOMINATING COMMITTEE (PRINCIPLES 4 AND 5)
The Nominating Committee was established on 3 September 2002 and comprises two Non-Executive Independent Directors, one of
whom is appointed as Chairman, one Non-Executive Director and one Executive Director:
Teo Kiang Kok (Chairman)
Lee Joo Hai
Gay Chee Cheong
Olivia Lum Ooi Lin
A majority of the current members are Non-Executive Directors. The Committee is of the opinion that Ms Lums 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.
The role of the Nominating Committee is to:
(a)
(b)
(c)
(d)
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;
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;
assess the contribution by each Director in the Board Committees where the Director is a member; and
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 Companys Articles of Association provide that one-third of the Board is to retire annually, by rotation at the Companys 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.
ACCESS TO INFORMATION (PRINCIPLE 6)
The Company fully recognises that the continual flow of relevant information on an accurate and timely basis is critical for the Board to
be effective in the discharge of its duties.
(CONTINUED)
(CONTINUED)
(CONTINUED)
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
DISCLOSURE ON REMUNERATION (PRINCIPLES 8 AND 9)
The Groups remuneration policy is to provide compensation packages at market rates which will reward successful performance and
attract, retain and motivate talent at all levels, including Managers and Directors.
Details of remuneration to the Directors are set out below:
Companys Directors receiving remuneration from the Group for the year ended 31 December 2002 and 2001:
REMUNERATION BAND
S$500,000 and above

S$250,000 to below S$500,000
Below S$250,000
NUMBER OF DIRECTORS
2002
2001
0
1
5
0
1
5
P.52.
REMUNERATION MATTERS
53
(CONTINUED)
Summary compensation table for the year ended 31 December 2002 (Group):
SALARY
BONUS
ALLOWANCES
AND OTHER
BENEFITS
FEES
TOTAL
BETWEEN S$250,000 TO S$500,000
Olivia Lum Ooi Lin
74%
6%
7%
13%
100%
70%
67%
0%
0%
0%
6%
6%
0%
0%
0%
10%
13%
100%
100%
100%
13%
14%
0%
0%
0%
100%
100%
100%
100%
100%
84%
78%
48%
75%
79%
7%
8%
4%
6%
7%
0%
0%
0%
0%
0%
9%
14%
48%
19%
15%
100%
100%
100%
100%
100%
BELOW S$250,000
Deirdre Murugasu
Foo Hee Kiang
Gay Chee Cheong
Lee Joo Hai
Teo Kiang Kok
BELOW S$250,000
KEY EXECUTIVES OF THE GROUP
Lim Kim Seng

Christopher Murugasu
Stephen Chong
David Hurn
Grace Goh
ACCOUNTABILITY AND AUDIT (PRINCIPLE 10)

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 Groups position and prospects on a quarterly basis. Management
provides the Board with appropriately detailed management accounts of the Groups performance, position and prospects on a
periodic basis.
INTERNAL CONTROLS (PRINCIPLE 12)
The Board acknowledges that it is responsible for the overall internal control framework but recognises that no cost effective internal
control systems will preclude all errors or irregularities, as a system is designed to manage rather than to eliminate the risk of failure to
achieve business objectives, and can provide only reasonable but not absolute assurance against material misstatement or loss.
Nevertheless, the Audit Committee will:
(a)
(b)
(c)
(d)
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;
ensure that a review of effectiveness of the Groups 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;
ensure that the internal control recommendations made by the external auditors have been addressed or implemented by
the Management;
ensure that the Board is in the position to comment on the adequacy of the internal controls of the group.
(CONTINUED)
(CONTINUED)
ACCOUNTABILITY AND AUDIT (PRINCIPLE 10)
(CONTINUED)
INTERNAL AUDIT (PRINCIPLE 13)
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 Groups operations.
COMMUNICATION WITH SHAREHOLDERS (PRINCIPLES 14 AND 15)

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 Boards 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)
(b)
(c)
(d)
(e)
(f)
(g)
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;
half-year and full-year financial statements comprising a summary of the financial information and affairs of the Group for the
relevant period;
explanatory memoranda for annual general meetings (AGM) and extraordinary general meetings;
media and analyst meetings for the Groups interim and annual financial results, as well as other briefings, as appropriate;
press releases on major developments of the Group;
disclosures to the SGX-ST via MASNET; and
the Groups 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 Groups 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.
P.54.
55
(CONTINUED)
STATISTICS OF SHAREHOLDINGS
AS AT 14 APRIL 2003
DISTRIBUTION OF SHAREHOLDINGS
SIZE OF HOLDINGS
NO. OF SHAREHOLDERS
NO. OF SHARES
1 999
1,000 10,000
10,001 1,000,000
1,000,001 and above
78
1,488
434
15
3.87
73.85
21.54
0.74
33,655
6,583,750
22,508,060
219,148,527
0.01
2.65
9.07
88.27
Total
2,015
100.00
248,273,992
100.00
TWENTY LARGEST SHAREHOLDERS

NAME
NO. OF SHARES
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
Olivia Lum Ooi Lin

Citibank Nominees Singapore Pte Ltd
2G Capital Pte Ltd
Raffles Nominees Pte Ltd
DBS Nominees Pte Ltd
Seletar Investments Pte Ltd
Deirdre Murugasu
Ma Wong Ching
HSBC (Singapore) Nominees Pte Ltd
Foo Hee Kiang
Wu Tzu Ho @ Jimmy Wu
Oversea-Chinese Bank Nominees Pte Ltd
United Overseas Bank Nominees Pte Ltd
HL Bank Nominees (S) Pte Ltd
Amy Chung
Koh Lip Lin
Ho Soo Min
DB Nominees (S) Pte Ltd
UOB Kay Hian Pte Ltd
Morgan Stanley Asia (Singapore) Securities Pte Ltd
Total
99,930,070
21,977,750
19,511,000
18,665,750
18,092,000
11,811,000
6,965,562
6,570,000
5,694,500
2,820,020
2,340,000
1,370,125
1,180,750
1,120,000
1,100,000
930,221
872,000
782,500
754,250
724,500
40.25
8.85
7.86
7.52
7.29
4.76
2.81
2.65
2.29
1.14
0.94
0.55
0.48
0.45
0.44
0.37
0.35
0.32
0.30
0.29
223,211,998
89.91
47.94% of the Companys 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
NAME OF SHAREHOLDER
Olivia Lum Ooi Lin

2G Capital Pte Ltd
DIRECT
99,930,070
19,511,000
DEEMED INTEREST
(CONTINUED)
NOTICE OF ANNUAL GENERAL MEETING

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
ended 31 December 2002 together with the Auditors Report thereon.
(RESOLUTION 1)
2.
To declare a first and final dividend of 0.5 cents per ordinary share less income tax of 22% for the
year ended 31 December 2002.
(RESOLUTION 2)
3.
To re-elect the following Directors retiring pursuant to Article 89 of the Companys Articles of
Association :
Deirdre Murugasu
(Retiring under Article 89)
Teo Kiang Kok
(Retiring under Article 89)
(RESOLUTION 3)
(RESOLUTION 4)
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
(previous year: S$132,000.00).
(RESOLUTION 5)
5.
To re-appoint Ernst & Young as the Companys Auditors and to authorise the Directors to fix their
remuneration.
(RESOLUTION 6)
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
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 Companys 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)]
(RESOLUTION 7)
P.56.
AS SPECIAL BUSINESS
8.
57
(CONTINUED)
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)]
By Order of the Board
LIM KIM SENG

SECRETARY
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 Companys 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.
- SGX LISTING MANUAL REQUIREMENTS
(CONTINUED)
NOTICE OF BOOKS CLOSURE

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 Companys 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
being a member/members of Hyflux Ltd (the Company), hereby appoint:
NAME
NRIC/PASSPORT NO.
PROPORTION OF SHAREHOLDINGS
NO. OF SHARES
ADDRESS
and/or (delete as appropriate)

NAME
NRIC/PASSPORT NO.
PROPORTION OF SHAREHOLDINGS
NO. OF SHARES
ADDRESS
or failing 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.)
NO.
RESOLUTIONS RELATING TO:
Directors Report and Audited Accounts for the year ended 31 December 2002
Payment of proposed first & final dividend
Re-election of Dr Deirdre Murugasu
Re-election of Mr Teo Kiang Kok
Approval of Directors fees amounting to S$180,000.00
Re-appointment of Ernst & Young as Auditors
Authority to allot and issue new shares
Authority to allot and issue shares under the Hyflux Employees Share Option Scheme
Dated this
day of
Signature of Shareholder (s)

or, Common Seal of Corporate Shareholder
* Delete where inapplicable
FOR
AGAINST
2003
TOTAL NUMBER OF SHARES IN
(a) CDP Register

(b) Register of Members
NO. OF SHARES
NOTES:
1.
Please insert the total number of Shares held by you. If you have Shares entered against your name in the Depository Register (as defined in Section 130A of the
Companies Act, Chapter 50 of Singapore), you should insert that number of Shares. If you 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

Singapore 486764
Tel 65.6214 0777
Fax 65.6214 1211
www.hyflux.com
A RAINDANCE DESIGN
& PRODUCTION
HYFLUX LTD

Singapore 486764
Tel
65. 6214 0777
Fax 65. 6214 1211

www.hyflux.com

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OUR VISION

To be a world-leading water treatment company.

GROUP CEO & PRESIDENTS

GROWING WITH THE FLOW

In 2002, we also garnered a S$27 million contract by PUB to supply

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

In 2002, we continued to build up our business capabilities,

HYFLUX GROUP OF COMPANIES

To strengthen our capital base, we made a private placement

We entered 2003 with an order book valued at $76 million. Further

The significance of these 2 deals cannot be over-emphasised. These

The success of our company is a result of the steadfast support we

GROUP CEO & PRESIDENT

OLIVIA LUM OOI LIN

GROUP CEO & PRESIDENT

OLIVIA LUM OOI LIN

FOO HEE KIANG

HYFLUX GROUP OF COMPANIES

GAY CHEE CHEONG

LEE JOO HAI

TEO KIANG KOK

EXECUTIVE VICE PRESIDENT, CHIEF FINANCIAL OFFICER AND COMPANY SECRETARY

LIM KIM SENG

SENIOR VICE PRESIDENT, CORPORATE SERVICES

SENIOR VICE PRESIDENT, STRUCTURED PROJECTS

HURN DAVID CHARLES

VICE PRESIDENT, FINANCE

HYFLUX GROUP OF COMPANIES

VICE PRESIDENT, OPERATIONS

LEE LENG KEONG

SENIOR VICE PRESIDENT, CHINA OPERATIONS

CHONG EE YONG, STEPHEN

VICE PRESIDENT, GENERAL MANAGER, CHINA OPERATIONS

VICE PRESIDENT, FINANCE & ADMINISTRATION, CHINA OPERATIONS

Upgraded to SGX Mainboard Listing

Hyflux Engineering secured

Awarded Singapores Best Small

Awarded Contract by PUB for

Investment in revolutionary water

Awarded Chestnut Avenue

Minister for Environment, Mr Lim Swee Say,

Awarded contract by PUB for

Presented the Most Admired

Attainment of ISO 9001: 2000

The official launch of the Bedok NEWater

Hyflux Engineering signed a

HYFLUX GROUP OF COMPANIES

Net Tangible Assets per share (cents)

GROUP TURNOVER (S$MILLIONS)

GROUP TURNOVER (S$MILLIONS)

HYFLUX GROUP OF COMPANIES

CASH FLOWS AND CASH MANAGEMENT

HYFLUX GROUP OF COMPANIES

Artists impression of the

RISING VISIBILITY - OUR PROJECTS

In September 2002, Hyflux also achieved another first by clinching

Hyfluxs maiden project for the municipal sector was won in

NEWater is a sustainable and reliable alternative water resource for

SUSTAINING THE FLOW

Following Hyfluxs successful first venture into the municipal market,

As the first-ever desalination plant in Singapore to supply drinking