Registration Prospectus (Clean) (131010)

PROSPECTUS DATED 13 OCTOBER 2010
(REGISTERED BY THE MONETARY AUTHORITY OF SINGAPORE ON 13 OCTOBER 2010)

COMPANY OVERVIEW
Leading integrated chemical systems engineering and technology solutions
provider to the PRC petrochemical and chemical industries, in particular,
manufacturers of ammonia and methanol based products
Based on our core principles of production efficiency, energy saving and environmental protection, our range of integrated
chemical systems engineering and technology solutions can be broadly categorised into 3 segments:
(i) Chemical systems engineering and technology design services (CET Design Services)
(ii) Chemical systems and components (CSC Business)
(iii) Oxidative and reductive catalysts
Our chemical systems and components are generally used by our customers to produce ammonia and methanol, which are
subsequently used as crucial feedstock in our customers’ production systems to produce other downstream products such as
urea, compound fertiliser, methanol fuel, formaldehyde, dimethyl ether and explosives.
ANCHUN INTERNATIONAL HOLDINGS LTD.

Anchun’s Value Chain
Anchun’s Customers’ Anchun’s Customers’ Products and
Production Process Industry Applications
Preparation
System Design of raw gas
Chemical industries Petrochemical
Chemical fertilisers industry
including urea and Methanol fuel and
Gas purification compound fertilisers other related products
Feedback from customers

Integrated
for energy uses
ANCHUN INTERNATIONAL HOLDINGS LTD. chemical
systems
engineering and
(More than 90% of
ammonia produced in Other industries
(Incorporated in the Republic of Singapore on 29 October 2009)
System production technology the PRC is used in Feedstock for various
(Company Registration No. 200920277C) solutions Ammonia / Methanol
the manufacturing of industries such as
and
synthesis
project management chemical fertilisers) pharmaceutical and
solvents industries
Ammonia / Methanol
output
Ammonia / Methanol
After-sales Ammonia / methanol Ammonia-based Methanol-based
IMPORTANT NOTE of this Prospectus. Registration of this Prospectus with the used as feedstock in products products
Authority does not imply that the Securities and Futures Act other sub-processes
This document is important. If you are in any doubt as to of Singapore, or any other legal or regulatory requirements,
the action you should take, you should consult your legal, have been complied with. The Authority has not, in any way,
financial, tax, or other professional adviser. considered the merits of the Shares (including the Vendor We intend to create long-term value for our customers through our core principles of achieving production efficiency, energy
Shares) and the New Shares, as the case may be, being saving and environmental protection.
We have made an application to the Singapore Exchange offered for investment.
Securities Trading Limited (the “SGX-ST”) for permission
to deal in and for quotation of all the ordinary shares (the Investing in the Shares involves risks which are described in
“Shares”) in the capital of Anchun International Holdings Ltd. the section entitled “Risk Factors” of this Prospectus.
(the “Company”) already issued (including the Vendor Shares
as defined herein) and the new Shares (the “New Shares”) No Share shall be allotted or allocated on the basis of this
which are the subject of this Invitation (as defined herein). Prospectus later than six (6) months after the date of registration
Such permission will be granted when our Company has been of this Prospectus by the Authority.
admitted to the Official List of the SGX-ST.
ANCHUN INTERNATIONAL HOLDINGS LTD. Acceptance of applications of the Invitation Shares (as
defined herein) will be conditional upon the SGX-ST granting
Invitation in respect of 130,000,000 Invitation
permission to deal in and for quotation of all of the existing Shares of S$0.28 each comprising 105,000,000
Principal place of business:
issued Shares (including the Vendor Shares) and the New New Shares and 25,000,000 Vendor Shares as
Shares. Monies paid in respect of any application accepted follows:-
No
No.539,
No.53
o.539,
39, Lusong
Luso
L Road will, in the event such permission is not granted, be returned
Changsha
Cha
Changs
angsha
gshaa National
Natio
National
nal Hi-tech
Hi-te Indus
IIndustrial Development
ment Zone to you at your own risk without interest or any share of (a) 2,000,000 Offer Shares at S$0.28 for each
revenue or other benefit arising therefrom, and you will Offer Share by way of public offer; and
Changsha City, Hunan Province, PRC 410205
Tel:
Te
el: (8
(86)
86) 731-8514
7 8687
not have any claim against our Company, the Vendors, the
Manager, or the Underwriter and Placement Agent. Quotation (b) 128,000,000 Placement Shares at S$0.28 for
COMPETITIVE STRENGTHS
of and dealing in the Shares will be in Singapore dollars.
Fax: (86) 731-8514 8687 each Placement Share by way of placement;
The SGX-ST assumes no responsibility for the correctness of
Leading enterprise and brand name in the PRC chemical systems engineering
any of the statements made, reports contained or opinions payable in full on application. and technology solutions industry with numerous accolades
expressed in this Prospectus. Admission to the Official List of
the SGX-ST is not to be taken as an indication of the merits • 2009 Forbes China Up & Comers award by Forbes China magazine
of the Invitation, our Company, our Subsidiary, the existing Manager, Underwriter and Placement Agent
issued Shares (including the Vendor Shares) and the New • Advanced New Technology Enterprise in 2008
Shares.
• China Petrochemical & Chemical Industries Outstanding Private Enterprise in 2005
A copy of this Prospectus has been lodged with and registered
by the Monetary Authority of Singapore (the “Authority”). KIM ENG CORPORATE FINANCE PTE. LTD. • China Chemical Industry Technology Innovation Model Enterprise in 2004
The Authority assumes no responsibility for the contents
COMPANY OVERVIEW

Preparation

Integrated
for energy uses
systems
engineering and
(More than 90% of
and
synthesis
solvents industries
Ammonia / Methanol
output
Ammonia / Methanol
No
No.539,
No.53
o.539,
39, Lusong
Luso
Changsha
Cha
Changs
angsha
gshaa National
Natio
National
nal Hi-tech
Hi-te Indus
Tel:
Te
el: (8
(86)
86) 731-8514
7 8687
Shares.
Leading and established management team with proven track record of delivering
sustainable growth and profitability
Xie Ding Zhong, Executive Chairman & Chief Executive Officer, has
accumulated more than 40 years of experience in the chemical industry.
• Organic growth by dedicated key management team with an

average of approximately 32 years of relevant professional
experience which has been working together since inception
of Anchun
• Professionally-managed by industry leaders with extensive
network, experiences, market knowledge to deliver sustainable
FINANCIAL HIGHLIGHTS
Historical Revenue (RMB ‘million) and Growth (%) Historical Gross Profit (RMB ‘million) and Margin (%)
growth and profitability
from L to R: Dai Feng Yu, Liang Gong Zeng, Xie Ding Zhong,
Li Chun Yang, Li Bin, Leow Wei Chang
Order
books of
RMB256 .4
million
as at 1
Sept
2010 ,
excluding
revenue
from 1
Apr – 31
Aug 201 0
Partnering with our extensive and notable Historical Net Profit (RMB ‘million), Margin (%) and
Integrated business model anchored on strong R&D capabilities and registered customer network across China in creating cash from operating activities
patents for our key technologies. long-term value for our shareholders
• Integrated business model provides operational efficiency MAJOR CUSTOMERS
• Project-driven and advance payment business model reduces inventory and credit risks China XLX group Listed on SGX-ST and HKSE*
• Margin-protected through inter-weaving operational efficiency and proprietary and patented technologies
Sinofert group Listed on HKSE*, part of Sinochem group, which is
listed on the SSE*
Shanxi Tianze group Large petrochemical & chemical group based in
Shanxi
PROSPECTS Jincheng Anthracite
Mining group
Large petrochemical & chemical group based in
Shanxi
Yunnan Yunwei group Listed on SSE*
Steady growth in production volume and capacity of ammonia and methanol in
China Haohua group Large petrochemical & chemical group based
the PRC is expected to continue in Hebei & part of the China National Chemical
Corporation group
• The PRC needs to feed 21% of the world’s population with only 9% of global arable area. Use of fertiliser is crucial in Guizhou Kailin group Chemical fertiliser & chemical group in Guizhou
ensuring the PRC’s food security.
• Persistent and stable increase in demand for fertiliser to expand crop production and in other industry uses for *HKSE: Hong Kong Stock Exchange
ammonia. *SSE: Shanghai Stock Exchange
• Methanol is an important feedstock to the petrochemical and chemical industries. The PRC’s demand for energy Premium customer base of over 320 customers across the PRC. Please
security necessitate the development of alternative fuel. refer to the sector entitled “Our Major Customers” for detailed listing of
• Increasing use of dimethyl ether as alternative fuel for cooking and heating and methanol to olefin process to produce our major customers.
ethylene and propylene, the top 2 petrochemical feedstock.
FUTURE PLANS
Existing producers required to increase capital expenditure to upgrade production
Expand our production facilities and capabilities
facilities
Increase the annual combined production capacity for chemical systems and components as well as catalysts up to 18,125 tonnes
• 83.3% and 85.2% of the PRC’s ammonia and methanol producers operate in inefficient plants producing less than and 4,100 tonnes respectively
180kt/yr and 200 kt/yr respectively.
Enhance our R&D capabilities and widen our range of innovative and cost-effective solutions
Continue to research on ways to enhance our existing technology to further reduce the energy consumption per unit product of
Coal-based ammonia and methanol synthesis technologies continue to be predominantly ammonia and methanol
used in the PRC market
Expand our sales and marketing capabilities and initiatives
• Limited natural gas and oil resources in the PRC. Cost advantages persist for coal-based synthesis technologies.
Explore opportunities in strategic investments or alliances and acquisitions

of Anchun
Order
books of
RMB256 .4
million
as at 1
Sept
2010 ,
excluding
revenue
from 1
Apr – 31
Aug 201 0
listed on the SSE*
Shanxi
Mining group
Shanxi
Corporation group
FUTURE PLANS
facilities
CONTENTS
Page
1. CORPORATE INFORMATION ................................................................................................ 5
2. DEFINITIONS .......................................................................................................................... 8
3. GLOSSARY OF TECHNICAL TERMS .................................................................................... 15
4. CAUTIONARY NOTE ON FORWARD-LOOKING STATEMENTS .......................................... 17
5. INDUSTRY AND MARKET DATA ............................................................................................ 18
6. SELLING RESTRICTIONS ...................................................................................................... 19
7. DETAILS OF THE INVITATION ................................................................................................ 20

LISTING ON THE SGX-ST ...................................................................................................... 20
INDICATIVE TIMETABLE FOR LISTING .................................................................................. 24
8. THE INVITATION ...................................................................................................................... 25
9. PLAN OF DISTRIBUTION ...................................................................................................... 26
10. CLEARANCE AND SETTLEMENT ........................................................................................ 28
11. USE OF PROCEEDS AND LISTING EXPENSES .................................................................. 29
12. MANAGEMENT, UNDERWRITING AND PLACEMENT ARRANGEMENTS.......................... 31
13. PROSPECTUS SUMMARY...................................................................................................... 33

OUR COMPANY ...................................................................................................................... 33
OUR BUSINESS ...................................................................................................................... 33
OUR COMPETITIVE STRENGTHS ........................................................................................ 33
OUR FINANCIAL PERFORMANCE ........................................................................................ 34
OUR BUSINESS STRATEGIES AND FUTURE PLANS .......................................................... 34
14. ISSUE STATISTICS.................................................................................................................. 35
15. RISK FACTORS ...................................................................................................................... 37

RISKS RELATING TO OUR BUSINESS OR OUR INDUSTRY .............................................. 37
RISKS RELATING TO PRC ...................................................................................................... 43
RISKS RELATING TO AN INVESTMENT IN OUR SHARES .................................................. 46
16. EXCHANGE RATES ................................................................................................................ 48
17. DIVIDEND POLICY .................................................................................................................. 49
18. CAPITALISATION AND INDEBTEDNESS .............................................................................. 50
19. DILUTION ................................................................................................................................ 52
1
Page
20. SHARE CAPITAL .................................................................................................................... 55
21. RESTRUCTURING EXERCISE .............................................................................................. 58
22. GROUP STRUCTURE.............................................................................................................. 63
23. INDUSTRY OVERVIEW............................................................................................................ 64
24. HISTORY AND BUSINESS ...................................................................................................... 73

HISTORY .................................................................................................................................. 73
BUSINESS OVERVIEW............................................................................................................ 76
COMPETITIVE STRENGTHS .................................................................................................. 78
OUR INTEGRATED BUSINESS MODEL ................................................................................ 82
OUR CORE PRINCIPLES OF PRODUCTION EFFICIENCY, ENERGY SAVING AND
ENVIRONMENTAL PROTECTION .......................................................................................... 83
OUR VALUE CHAIN ................................................................................................................ 85
OUR CHEMICAL SYSTEMS AND COMPONENTS AND MANUFACTURING PROCESS .... 88
OUR CATALYSTS AND MANUFACTURING PROCESS.......................................................... 91
PRODUCTION FACILITIES, EQUIPMENT AND CAPACITY .................................................. 92
QUALITY CONTROL ................................................................................................................ 94
SALES AND MARKETING ...................................................................................................... 96
AWARDS AND ACCREDITATION ............................................................................................ 97
OUR MAJOR CUSTOMERS .................................................................................................... 99
OUR MAJOR SUPPLIERS ...................................................................................................... 101
RESEARCH AND DEVELOPMENT ........................................................................................ 103
INTELLECTUAL PROPERTY .................................................................................................. 105
PROPERTIES AND FIXED ASSETS ...................................................................................... 107
STAFF TRAINING .................................................................................................................... 108
INSURANCE ............................................................................................................................ 109
PERMITS, APPROVALS, CERTIFICATIONS & GOVERNMENT REGULATIONS .................. 109
COMPETITION ........................................................................................................................ 112
25. SELECTED FINANCIAL INFORMATION ................................................................................ 113

BASIS OF PREPARATION OF OUR GROUP’S COMBINED FINANCIAL STATEMENTS...... 113
OPERATING RESULTS OF OUR GROUP .............................................................................. 114
FINANCIAL POSITION OF OUR GROUP .............................................................................. 115
2
Page
26. MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND

FINANCIAL POSITION ............................................................................................................ 116
OVERVIEW .............................................................................................................................. 116
REVIEW OF RESULTS OF OPERATIONS .............................................................................. 126
REVIEW OF PAST FINANCIAL POSITION ............................................................................ 133
LIQUIDITY AND CAPITAL RESOURCES ................................................................................ 135
MATERIAL CAPITAL EXPENDITURES AND DIVESTMENTS ................................................ 139
MATERIAL COMMITMENTS AND CONTINGENCIES ............................................................ 139
FOREIGN EXCHANGE EXPOSURE ...................................................................................... 140
CHANGES IN ACCOUNTING POLICIES ................................................................................ 140
CREDIT MANAGEMENT.......................................................................................................... 140
INVENTORY MANAGEMENT .................................................................................................. 142
27. PROSPECTS, BUSINESS STRATEGIES AND FUTURE PLANS.......................................... 144

PROSPECTS............................................................................................................................ 144
TREND INFORMATION............................................................................................................ 147
BUSINESS STRATEGIES AND FUTURE PLANS .................................................................. 148
28. DIRECTORS, KEY EXECUTIVES AND EMPLOYEES .......................................................... 151

DIRECTORS ............................................................................................................................ 151
KEY EXECUTIVES .................................................................................................................. 157
MANAGEMENT REPORTING STRUCTURE .......................................................................... 159
SERVICE AGREEMENTS ........................................................................................................ 159
DIRECTORS’ AND KEY EXECUTIVES’ REMUNERATION .................................................... 160
EMPLOYEES ............................................................................................................................ 160
CORPORATE GOVERNANCE ................................................................................................ 161
29. PRINCIPAL SHAREHOLDERS................................................................................................ 165

SHAREHOLDING AND OWNERSHIP STRUCTURE .............................................................. 165
TRUST AGREEMENTS ............................................................................................................ 166
VENDORS ................................................................................................................................ 168
MORATORIUM ........................................................................................................................ 169
30. INTERESTED PERSON TRANSACTIONS.............................................................................. 170

PAST INTERESTED PERSON TRANSACTIONS.................................................................... 170
ON-GOING INTERESTED PERSON TRANSACTIONS .......................................................... 171
REVIEW PROCEDURES FOR INTERESTED PERSON TRANSACTIONS .......................... 172
31. POTENTIAL CONFLICT OF INTERESTS .............................................................................. 173
32. GENERAL AND STATUTORY INFORMATION ...................................................................... 175
3
Page
33. APPENDIX A – AUDITED COMBINED FINANCIAL STATEMENTS OF ANCHUN

INTERNATIONAL HOLDINGS LTD. AND ITS SUBSIDIARIES FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2007, 2008 AND
2009 .......................................................................................................... A-1
34. APPENDIX B – UNAUDITED COMBINED FINANCIAL STATEMENTS OF ANCHUN

INTERNATIONAL HOLDINGS LTD. AND ITS SUBSIDIARY FOR
THE FINANCIAL PERIOD FROM 1 JANUARY 2010 TO 31 MARCH
2010 .......................................................................................................... B-1
35. APPENDIX C – TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION AND

ACCEPTANCE .......................................................................................... C-1
36. APPENDIX D – SELECTED EXTRACTS OF OUR ARTICLES OF ASSOCIATION.......... D-1
37. APPENDIX E – DESCRIPTION OF RELEVANT PRC LAWS AND REGULATIONS ........ E-1
38. APPENDIX F – DESCRIPTION OF SINGAPORE COMPANY LAW RELATING TO

SHARES .................................................................................................... F-1
39. APPENDIX G – DESCRIPTION OF SINGAPORE LAW RELATING TO TAXATION.......... G-1
4
CORPORATE INFORMATION
Board of Directors : Xie Ding Zhong (Executive Chairman and CEO)

Liang Gong Zeng (Executive Director and COO)
Dai Feng Yu (Executive Director)
Xie Ming (Non-Executive Director)
Ma Ong Kee (Non-Executive Director)
Andrew Bek (Alternate Director to Ma Ong Kee)
Lee Gee Aik (Lead Independent Director)
Tan Min-Li (Independent Director)
Pan De Run (Independent Director)
Company Secretary : Tan Wei Shyan (LLB (Hons))
Our Registered Office : 1 Robinson Road

#17-00 AIA Tower
Singapore 048542
Telephone : (65) 6535 1944

Facsimile : (65) 6535 8577
Our Principal Office and Contact Details : No.539, Lusong Road

Changsha National Hi-tech Industrial Development Zone
Telephone : (86) 731 8514 8687

Facsimile : (86) 731 8514 8687
Share Registrar and Share Transfer : Boardroom Corporate & Advisory Services Pte. Ltd.
Agent 50 Raffles Place
#32-01 Singapore Land Tower
Singapore 048623
Manager : Kim Eng Corporate Finance Pte. Ltd.

9 Temasek Boulevard
#08-03 Suntec Tower Two
Singapore 038989
Underwriter and Placement Agent : Kim Eng Corporate Finance Pte. Ltd.
9 Temasek Boulevard
Singapore 038989
Reporting Accountants and Auditors : Ernst & Young LLP

One Raffles Quay
North Tower, Level 18
Singapore 048583
(Partner-in-charge: Max Loh Khum Whai)

(Certified Public Accountant, a member of the Institute of
Certified Public Accountants of Singapore)
Solicitors to the Invitation and : Shook Lin & Bok LLP

Legal Advisers to our Company 1 Robinson Road
on Singapore Law #18-00 AIA Tower
Singapore 048542
5
Solicitors to the Manager, Underwriter : Wee Woon Hong & Associates LLC
and Placement Agent 30 Raffles Place
#19-04 Chevron House
Singapore 048622
Legal Advisers to our Company on : Haihua Yongtai Law Firm

PRC Law Room 701,West Eton Place
69 Dongfang Rd
Shanghai, PRC 200120
Principal Bankers : China Construction Bank (Furong Branch)

No.218, Middle Furong Road, Changsha City, Hunan
Province, PRC 410015
: China Construction Bank (South Shuyuan Road

Branch)
No.38, South Shuyuan Road, Changsha City, Hunan
: Industrial and Commercial Bank of China

(Nanmenkou Branch)
No.304 West Laodong Road, Changsha City, Hunan
: Industrial and Commercial Bank of China (Jinpeng

Branch)
No.436 South Yinpen Road, Changsha City, Hunan
: China Merchants Bank (Baisha Branch)

No.388, Zhibang Garden, West Laodong Road,
Receiving Banker : Citibank N.A., Singapore Branch

3 Temasek Avenue
#11-00 Centennial Tower
Singapore 039190
Vendors : Vision Top Holdings Limited

C/o 10A Gemmill Lane
Singapore 069251
Skyven Growth Opportunities Fund Pte. Ltd.

2 Alexandra Road
#06-02, Delta House
Singapore 159919
Go Power Investments Limited

P.O.Box, 957 Offshore Incorporations Centre
Road Town, Tortola, British Virgin Islands
6
Naresh Nanubhai Desai
C/o 30 Robinson Road
#13-05 Robinson Towers
Singapore 048546
Quek Yiang Hang

83 Meyer Road
20-02, Meyer Park
Singapore 437910
Wong Chao Hsiung

50 Hume Avenue
#04-08, Summerhill
Singapore 596229
7
DEFINITIONS
In this Prospectus, the accompanying Application Forms and, in relation to the Electronic Applications,
the instructions appearing on the screens of the ATMs of Participating Banks, the IB websites of the
relevant Participating Banks, unless the context otherwise requires, the following definitions apply
throughout where the context so admits:-
Companies within our Group

“Company” or “Anchun” : Anchun International Holdings Ltd.
“Group” : Our Company and our Subsidiary following the completion of the
Restructuring Exercise
“Hunan Anchun” or “Subsidiary” : Hunan Anchun Advanced Technology Co., Ltd.

, a wholly-owned subsidiary incorporated in the PRC of
our Company
Other Companies, Organisations and Agencies

“Able Gallery” : Able Gallery Limited
“Ace Sense” : Ace Sense Holdings Limited
“Authority” : Monetary Authority of Singapore
“CDP” : The Central Depository (Pte) Limited
“China XLX” : China XLX Fertiliser Ltd.
“CNCIC” : China National Chemical Information Centre
“Dawn Vitality” : Dawn Vitality International Limited
“Giant Yield Global” : Giant Yield Global Limited
“Go Power” : Go Power Investments Limited
“Haihua Yongtai” : Haihua Yongtai Law Firm
“Inventive Result Enterprises” : Inventive Result Enterprises Limited
“ISO” : International Organisation for Standardization, a worldwide

federation of national standards bodies from more than 140
countries, whose mission is to develop industrial standards that
facilitate international trade
“Jingtian Gongcheng” : Jingtian & Gongcheng Attorneys at Law
“Manager”, “Underwriter” or : Kim Eng Corporate Finance Pte. Ltd.

“Placement Agent”
“Mainboard” : The Mainboard of the SGX-ST
“Oriental Eagle” : Oriental Eagle Holdings Limited
“Reporting Accountants and : Ernst & Young LLP

Auditors”
8
“SGX-ST” : Singapore Exchange Securities Trading Limited
“Sinostate Management” : Sinostate Management Limited
“SkyVen” : Skyven Growth Opportunities Fund Pte. Ltd.
“Solicitors” : Shook Lin & Bok LLP, Wee Woon Hong & Associates LLC, Haihua
Yongtai Law Firm and Jingtian & Gongcheng Attorneys at Law
“State Council” : The State Council of the PRC
“Vision Top” : Vision Top Holdings Limited
General
“1H” : Financial period between 1 January and 30 June
“2H” : Financial period between 1 July and 31 December
“1Q” : Financial period between 1 January and 31 March
“2Q” : Financial period between 1 April and 30 June
“Accountants’ Reports” : Reports from the Reporting Accountants and Auditors entitled
“Audited Combined Financial Statements of Anchun International
Holdings Ltd. and its Subsidiaries for the Financial Years ended 31
December 2007, 2008 and 2009” and “Unaudited Combined
Financial Statements of Anchun International Holdings Ltd. and its
Subsidiary for the Financial Period from 1 January 2010 to 31
March 2010” as set out in Appendix A and Appendix B of this
Prospectus
“Act” or “Companies Act” : The Companies Act (Chapter 50) of Singapore, as amended,
supplemented or modified from time to time
“Adjusted NAV” : NAV per Share as at 31 March 2010 and adjusted for the
Conversion
“Application Forms” : The printed application forms for the Invitation Shares which form
part of this Prospectus
“Application List” : The list of applications for the subscription and/or purchase of the
Invitation Shares
“Articles” : The articles of association of our Company, as amended,

supplemented or modified from time to time
“ATM” : Automated teller machine of a Participating Bank
“ATM Application” : An application for Offer Shares made through an ATM in

accordance with the terms and conditions of this Prospectus
“Audited Combined Financial : The Audited Combined Financial Statements of Anchun

Statements” International Holdings Ltd. and its Subsidiaries for the Financial
Years ended 31 December 2007, 2008 and 2009 as set out in
Appendix A of this Prospectus
“Audit Committee” : The audit committee of our Company as at the date of this
Prospectus
9
“Board” : Board of Directors of our Company as at the date of this
Prospectus
“BVI” : British Virgin Islands
“CAGR” : Compound annual growth rate
“CEO” : Chief executive officer of our Company as at the date of this

Prospectus
“CFO” : Chief financial officer of our Company as at the date of this

Prospectus
“COO” : Chief operations officer of our Company as at the date of this

Prospectus
“Committee” : Administrative Committee of Changsha National Hi-tech Industrial

Development Zone
“Conversion” : The conversion of the RMB80.0 million convertible loan into an

aggregate of 800 ordinary shares of our Company on 2 August
2010 pursuant to the convertible loan agreement dated 22
December 2009, supplemented by a deed of accession and
ratification dated 30 April 2010
“CPF” : Central Provident Fund
“Director” : A director of our Company as at the date of this Prospectus
“Electronic Application” : An ATM Application or IB Application
“EPS” : Earnings per Share
“Executive Director” : An executive Director of our Company as at the date of this

Prospectus
“Key Executives” : Our key executives as at the date of this Prospectus whose names
are set out in the section entitled “Key Executives” of this
Prospectus
“FY” or “Financial Year” : Financial year ended or, as the case may be, ending 31 December
“IB” : Internet banking
“IB Application” : An application for Offer Shares made through an IB website in

accordance with the terms and conditions of this Prospectus
“Independent Director” : An independent non-executive Director of our Company as at the

date of this Prospectus
“Invitation” : The invitation by our Company and the Vendors to the public to
subscribe for and/or purchase the Invitation Shares at the Invitation
Price, upon the terms and subject to the conditions set out in this
Prospectus
“Invitation Price” : S$0.28 for each Invitation Share
10
“Invitation Shares” : The 130,000,000 Shares which are the subject of this Invitation,
comprising 105,000,000 New Shares and 25,000,000 Vendor
Shares
“IPO” : Initial public offering
“ISO9001 Quality System” : The part of the ISO9000 series “Quality System – Model for quality
assurance in design/development, productions, installation and
servicing” which covers the following areas: quality management
system, management responsibility, resource management,
product realisation, measurement, analysis and improvement
“Lufeng Plant” : Our factory plant located at No.65, Lufeng Road, Changsha
National Hi-tech Industrial Development Zone
with a site area and gross production area of
approximately 23,500 sqm and 7,000 sqm, respectively
“Lusong Plant” : Our factory plant located at No.539, Lusong Road, Changsha
National Hi-tech Industrial Development Zone
with a site area and gross production area of
approximately 57,051 sqm 15,000 sqm, respectively
“Latest Practicable Date” : 1 September 2010, being the Latest Practicable Date before the
lodgement of this Prospectus with the Authority
“Listing Manual” : Listing manual of the SGX-ST, as amended, supplemented or

modified from time to time
“Market Day” : A day on which the SGX-ST is open for trading in securities
“NAV” : Net asset value
“New Shares” : The 105,000,000 new Shares for which our Company invites
applications to subscribe for pursuant to the Invitation, upon the
terms and subject to the conditions set out in this Prospectus
“Nominating Committee” : The nominating committee of our Company as at the date of this
Prospectus
“Non-Executive Director” : A non-executive Director of our Company as at the date of this

Prospectus
“NTA” : Net tangible assets
“Offer” : The offer by our Company and/or the Vendors of the Offer Shares
to the public in Singapore for subscription and/or purchase at the
Invitation Price, upon the terms and subject to the conditions set
out in this Prospectus
“Offer Shares” : The 2,000,000 Invitation Shares which are the subject of the Offer
“Participating Banks” : DBS Bank Ltd (including POSB) (“DBS”), Oversea-Chinese

Banking Corporation Limited (“OCBC”) and United Overseas Bank
Limited and its subsidiary, Far Eastern Bank Limited (the ”UOB
Group”)
“Placement” : The placement of the Placement Shares by the Placement Agent

on behalf of our Company and the Vendors for subscription and/or
purchase at the Invitation Price upon the terms and subject to the
conditions set out in this Prospectus
11
“Placement Shares” : 128,000,000 of the Invitation Shares which are the subject of the
Placement
“PRC” : People’s Republic of China, but for the purposes of this Prospectus
and for geographical reference only (unless otherwise indicated)
excludes Macau, Hong Kong and Taiwan
“Pre-IPO Investors” : Sinostate Management, Able Gallery, Vision Top, China XLX, Go
Power, SkyVen, Naresh Nanubhai Desai, Wong Chao Hsiung and
Quek Yiang Hang
“Prospectus” : This prospectus dated 13 October 2010
“R&D” : Research and development
“Remuneration Committee” : The remuneration committee of our Company as at the date of this
Prospectus
“Restructuring Exercise” : The restructuring exercise implemented in connection with the

Invitation, more fully described in the section entitled “Restructuring
Exercise” of this Prospectus
“Securities Account” : The securities account maintained by a Depositor with CDP but
does not include a securities sub-account
“Securities and Futures Act” : The Securities and Futures Act (Chapter 289) of Singapore, as
amended, supplemented or modified from time to time
“Service Agreements” : The service agreements entered into between our Company and
our Executive Directors as described in the section entitled
“Service Agreements” of this Prospectus
“Sub-division” : The sub-division of every ordinary share into 8,000 ordinary shares
as described in the section entitled “Share Capital” of this
Prospectus
“Shares” : Ordinary shares in the capital of our Company
“Trust Agreements” : The trust agreements dated 2 November 2009 pursuant to which Li
Chun Yang, Dai Feng Yu, Li Bin and Liang Gong Zeng were
appointed as the trustees for and on behalf of an aggregate
number of 397 beneficiaries to hold the share interest in each of
Oriental Eagle, Dawn Vitality, Inventive Result Enterprises and
Giant Yield Global, and make general management decisions in
relation to the business operation of our Group for their benefit
“Unaudited Combined Financial : The Unaudited Combined Financial Statements of Anchun

Statements” International Holdings Ltd. and its Subsidiary for the Financial
Period from 1 January 2010 to 31 March 2010 as set out in
Appendix B of this Prospectus
“United States” or “US” : The United States of America
“Vendors” : Vision Top, Go Power, SkyVen, Naresh Nanubhai Desai, Wong

Chao Hsiung and Quek Yiang Hang
“Vendor Shares” : The 25,000,000 issued and fully paid-up Shares owned by the
Vendors for which the Vendors invite applications to purchase on
the terms and subject to the conditions set out in this Prospectus
12
“WFOE” : Wholly foreign owned entity
Currencies
“S$” or “$” and “cents” : Singapore dollars and cents, respectively
“RMB” and “RMB fen” : PRC Renminbi and Renminbi fen, respectively
“US$” : United States dollars
Units and Others

“%” or “per cent.” : Percentage or per centum
“kt/yr” : 1,000 tonnes per year
“MPa” : Megapascal
“mu” : Equivalent to approximately 66.7 sqm per mu
“n.a.” : Not applicable
“n.m.” : Not meaningful
“sqm” : Square metres
“Φ” : The diameter of the ammonia/methanol synthesis reactor in

millimetre
The expressions “Associate”, “Associated Company”, “Associated Entity”, “Controlling Interest-Holder”,

“Related Corporation”, “Related Entity”, “Entity At Risk”, “Interested Person”, “Interest Person Transaction”,
“Subsidiary Entity”, “Substantial Shareholder” and “Substantial Interest Holder” shall have the meanings
ascribed to them respectively in the Fourth Schedule of the Securities And Futures (Offers Of
Investments) (Shares And Debentures) Regulations 2005.
The expression “Business Trust” has the same meaning as in section 2 of the Business Trusts Act
(Chapter 31A of Singapore).
The expression “Controlling Shareholder” has the meaning ascribed to it in the Listing Manual.
The expression “Entity” includes a corporation, an unincorporated association, a partnership and the
government of any state, but does not include a trust.
The expressions “Depositor”, “Depository Agent” and “Depository Register” shall have the meanings
ascribed to them respectively in Section 130A of the Companies Act.
References in this Prospectus to Appendix or Appendices are references to an appendix or appendices

respectively to this Prospectus.
Any discrepancies in tables included herein between the total sum of amounts listed and the totals shown
are due to rounding. Accordingly, figures shown as totals in certain tables may not be an arithmetic
aggregation of the figures which precede them.
Words importing the singular shall, where applicable, include the plural and vice versa and words
importing the masculine gender shall, where applicable, include the feminine and neuter genders and
vice versa. References to persons shall include corporations.
13
Any reference in this Prospectus, the Application Forms and Electronic Applications to any enactment is a
reference to that enactment as for the time being amended or re-enacted.
Any word defined under the Companies Act, the Securities and Futures Act or any statutory modification
thereof and used in this Prospectus, the Application Forms and Electronic Applications shall, where
applicable, have the meaning ascribed to it under the Companies Act, the Securities and Futures Act or
any statutory modification thereto, as the case may be.
Any reference in this Prospectus, the Application Forms and Electronic Applications to Shares being
allotted and/or allocated to you includes allotment and/or allocation to CDP for your account.
Any reference to a time of day in this Prospectus, the Application Forms or the Electronic Applications is
a reference to Singapore time unless otherwise stated.
Any reference to “we”, “us” and “our” in this Prospectus is a reference to our Company, our Group or any
member of our Group as the context requires.
Certain names with Chinese characters have been translated into English. Such translations are provided
solely for the convenience of Singapore-based investors. The English names may not have been
registered with the relevant PRC authorities and should not be construed as representations that the
English names actually represent the Chinese characters.
14
GLOSSARY OF TECHNICAL TERMS
To facilitate a better understanding of our business, the following glossary provides a description of some
of the technical terms and abbreviations commonly found in our industry. The terms and their assigned
meanings may not correspond to standard industry or common meanings, as the case may be, or usage
of these terms:-
“alcohol-hydrocarbon reactors” : The alcohol-hydrocarbon reactors are chemical system

components in which the raw gas is purified by removing the CO
and CO2 so that the reaction gas compositions will be in
compliance with industrial standards required for ammonia or
methanol synthesis, and useful gases are separated prior to
entering the ammonia or methanol synthesis reactors
“alcohol-hydrocarbonylation : A raw gas refining process which refines the raw gas through
refining process” chemical reaction instead of physical reaction to convert the gas
impurities, such as CO and CO2, into other chemicals (such as
methanol and dimethyl ether), which can be separated from the
useful gases easily
“ammonia synthesis reactor” : The ammonia synthesis reactor is a chemical system component in
which hydrogen and nitrogen is synthesised into ammonia under
the required pressure, temperature and other conditions with the
aid of a catalyst
“catalyst” : A chemical substance which is used to either increase

or decrease the rate of a chemical reaction. Unlike other reagents
that participate in a chemical reaction, a catalyst is not consumed
by the reaction itself
“chemical system component” : The chemical system components include the chemical synthesis
reactors, pressure vessels, heat exchanger and separation
equipment manufactured by Hunan Anchun which are used by our
customers in their production of ammonia and methanol
“chemical synthesis reactors” : Means the alcohol-hydrocarbon reactors, ammonia synthesis

reactor and methanol synthesis reactor
“CO” : Carbon monoxide
“CO2” : Carbon dioxide
“cover head” : A machinery part used to seal the two ends of the shell body of a
chemical system component
“forged part” : A forged part is metal which is shaped by using compressive

forces. Forged parts usually require further processing to achieve a
finished machinery part
“heat exchanger” : The heat exchanger is a chemical system component used for
efficient heat transfer from one medium to another, causing the
reacting substances to be heated or cooled during the chemical
reactions in the ammonia or methanol manufacturing processes
15
“H2” : Hydrogen
“methanol synthesis reactor” : The methanol synthesis reactor is a chemical system component in
which carbon monoxide, carbon dioxide and hydrogen are
synthesised into methanol under the required pressure,
temperature and other conditions with the aid of a catalyst
“methanol” : A liquid with chemical formula CH3OH. It is the simplest form of

alcohol, and is a light, volatile, colourless, flammable, poisonous
liquid with a distinctive odour
“N2” : Nitrogen
“raw gas” : Raw gas for ammonia/methanol synthesis comprises N2, H2,
methane, and some gaseous impurities such as oxides of sulphur
(i.e. SO2) and oxides of carbon (i.e. CO, CO2)
“separation equipment” : The separation equipment is a chemical system component used

for separation of substances, such as ammonia, methanol and oil,
from a chemical mixture
“SO2” : Sulphur dioxide
16
CAUTIONARY NOTE ON FORWARD-LOOKING STATEMENTS
All statements contained in this Prospectus, statements made in press releases and oral statements that
may be made by us or our Directors, our Key Executives or our employees acting on our behalf that are
not statements of historical fact constitute ‘‘forward-looking statements”. You can identify some of these
forward-looking statements by terms such as ‘‘may”, ‘‘will”, ‘‘would”, ‘‘could”, ‘‘expects”, ‘‘anticipates”,
‘‘intends”, ‘‘estimates”, ‘‘believes”, ‘‘plans”, or similar words and phrases. However, you should note that
these words are not the exclusive means of identifying forward-looking statements. All statements
regarding our expected financial position, business strategy, plans and prospects are forward-looking
statements.
These forward-looking statements involve known and unknown risks, uncertainties and other factors that
may cause our actual results, performance or achievements to be materially different from any future
results, performance or achievements expressed or implied by these forward-looking statements.
All forward-looking statements by or attributable to us, or persons acting on our behalf, contained in this
Prospectus are expressly qualified in their entirety by such factors. Given the risks and uncertainties that
may cause our actual future results, performance or achievements to be materially different than
expected, expressed or implied by the forward-looking statements in this Prospectus, we advise you not
to place undue reliance on those statements.
Neither we, the Vendors, the Manager, the Underwriter and Placement Agent, nor any other person is
representing or warranting to you that our future results, performance or achievements will be as
discussed in those statements. Further, we disclaim any responsibility to update any of those forward-
looking statements or publicly announce any revisions to those forward-looking statements to reflect
future developments, events or circumstances. We are, however, subject to the provisions of the
Securities and Futures Act and the Listing Manual regarding corporate disclosure.
17
INDUSTRY AND MARKET DATA
This document includes references to market share, market position and industry data and forecasts as
well as other macroeconomic information that we obtained from the report dated 13 September 2010
prepared by China National Chemical Information Centre (“CNCIC”) and other sources of publicly
available information such as the National Bureau of Statistics of China. In particular, market and industry
data contained in the sections entitled “Industry Overview”, “Management’s Discussion and Analysis of
Results of Operations and Financial Position” and “Prospects, Business Strategies and Future Plans” of
this Prospectus have been obtained from the abovementioned sections prepared by CNCIC (which also
references certain other third party sources) and the National Bureau of Statistics of China. Industry
publications, surveys and forecasts generally state that the information contained therein has been
obtained from sources believed to be reliable, but there can be no assurance as to the accuracy or
completeness of such included information. While we have taken reasonable actions to ensure that the
information is extracted accurately and in its proper context, we have not independently verified any of the
data from third party sources or ascertained the underlying economic assumptions relied upon therein,
and none of us, the Vendors, or the Manager, the Underwriter and Placement Agent make any
representation as to the accuracy or completeness of that information.
18
SELLING RESTRICTIONS
This Prospectus does not constitute an offer, solicitation or invitation to subscribe for and/or purchase our
Shares in any jurisdiction in which such offer, solicitation or invitation is unlawful or is not authorised or to
any person to whom it is unlawful to make such offer, solicitation or invitation. No action has been or will
be taken under the requirements of the legislation or regulations of, or of the legal or regulatory
authorities of, any jurisdiction, except for the filing and/or registration of this Prospectus in Singapore in
order to permit a public offering of our Shares and the public distribution of this Prospectus in Singapore.
The distribution of this Prospectus and the offering of our Shares in certain jurisdictions may be restricted
by the relevant laws in such jurisdictions. Persons who may come into possession of this Prospectus are
required by our Company, the Vendors, the Manager, the Underwriter and Placement Agent to inform
themselves about, and to observe and comply with, any such restrictions at their own expense and
without liability to us.
Persons to whom a copy of this Prospectus has been issued shall not circulate to any other person,
reproduce or otherwise distribute this Prospectus or any information herein for any purpose whatsoever
nor permit or cause the same to occur.
Hong Kong
The contents of this Prospectus have not been reviewed by any regulatory authority in Hong Kong. You
are advised to exercise caution in relation to the offer. If you are in any doubt about any of the contents of
this document, you should obtain independent legal advice. Please note that (i) Shares may not be
offered or sold in Hong Kong by means of this Prospectus or any other document other than to
professional investors within the meaning of Part I of Schedule 1 to the Securities and Futures Ordinance
of Hong Kong (Cap. 571) and any rules made thereunder (“professional investors”), or in other
circumstances which do not result in the document being a “prospectus” as defined in the Companies
Ordinance of Hong Kong (Cap. 32) or which do not constitute an offer or invitation to the public for the
purposes of the Companies’ Ordinance, and (ii) no person may issue or have in its possession for the
purposes of issue, whether in Hong Kong or elsewhere, this Prospectus or any other advertisement,
invitation or document relating to the Shares which is directed at, or the contents of which are likely to be
accessed or read by, the public in Hong Kong (except if permitted to do so under the securities laws of
Hong Kong) other than with respect to Shares which are or are intended to be disposed of only to
persons outside Hong Kong or only to professional investors.
19
DETAILS OF THE INVITATION
LISTING ON THE SGX-ST

An application has been made to the SGX-ST for permission to deal in and for quotation of all our Shares
already issued (including the Vendor Shares) and the New Shares on the Official List of the SGX-ST.
Such permission will be granted when we have been admitted to the Official List of the SGX-ST.
Acceptance of applications of the Invitation Shares (as defined herein) will be conditional upon the
completion of the Invitation, which is subject to certain conditions, including the SGX-ST granting
permission to deal in and for quotation of all our existing issued Shares (including the Vendor Shares)
and the New Shares. In the event that completion of the Invitation does not occur or such permission
from the SGX-ST is not granted or for any other reason, monies paid in respect of any application
accepted will be returned to you at your own risk, without interest or any share of revenue or other benefit
arising therefrom and you will not have any claim against our Company, the Vendors, our Directors, the
Manager or the Underwriter and Placement Agent.
Under the Securities and Futures Act, the Authority may, in certain circumstances issue a stop order (the
“Stop Order”) to our Company, directing that no Invitation Share or no further share to which this
Prospectus relates, be allotted and/or allocated or issued and/or sold. Such circumstances will include a
situation where this Prospectus (i) contains a statement or matter, which in the opinion of the Authority is
false or misleading; or (ii) omits any information that should be included in accordance with the Securities
and Futures Act; or (iii) does not, in the opinion of the Authority, comply with the requirements of the
Securities and Futures Act; or (iv) where the Authority is of the opinion that it is in the public interest to
issue a Stop Order.
In the event that the Authority issues a Stop Order and where applications to subscribe for and/or
purchase the Invitation Shares to which this Prospectus relates have been made prior to the Stop Order,
and:
(a) where the Invitation Shares have not been issued and/or sold to you, your application shall be
deemed to have been withdrawn and cancelled and our Company (on behalf of itself and the
Vendors) shall, within fourteen (14) days from the date of the Stop Order, return to you at your own
risk all monies you have paid on account of your application for the Invitation Shares, without
interest or any share of revenue or other benefit arising therefrom; or
(b) where the Invitation Shares have been issued and/or sold to you, the issue and/or sale of the
Invitation Shares shall be deemed to be void and our Company shall (on behalf of itself and the
Vendors), within fourteen (14) days from the date of the Stop Order, return to you at your own risk
all monies you have paid on account of your applications for the Invitation Shares, without interest
or any share of revenue or other benefit arising therefrom; or
(c) where the Invitation Shares have been transferred to you, the sale of the Invitation Shares shall be
deemed to be void and our Company (on behalf of itself and the Vendors) shall (i) if no documents
purporting to evidence title to those Invitation Shares have been issued to you, within seven (7)
days from the date of the Stop Order, pay to you at your own risk all monies paid by you for those
Invitation Shares, or (ii) if documents purporting to evidence title to those Invitation Shares have
been issued to you, within seven (7) days from the date of the Stop Order, inform you to return
such documents to our Company within fourteen (14) days from that date and within seven (7)
days from the date of receipt of such documents or the date of the Stop Order, whichever is earlier,
pay to you at your own risk all monies paid by you for those Invitation Shares.
In each of the above instances where monies are refunded to you pursuant to a Stop Order, you will not
have any claim against our Company, the Vendors, our Directors, the Manager, or the Underwriter and
Placement Agent.
20
The SGX-ST assumes no responsibility for the correctness of any of the statements made, reports
contained or opinions expressed in this Prospectus. Admission to the Official List of the SGX-ST is not to
be taken as an indication of the merits of the Invitation, our Company, our Subsidiary, our existing issued
Shares (including the Vendor Shares) and the New Shares.
A copy of this Prospectus together with copies of the Application Forms have been lodged with and
registered by the Authority. The Authority assumes no responsibility for the contents of this Prospectus.
Registration of this Prospectus by the Authority does not imply that the Securities and Futures Act, or any
other legal or regulatory requirements, have been complied with. The Authority has not, in any way,
considered the merits of our existing issued Shares (including the Vendor Shares) or the New Shares, as
the case may be, being offered or in respect of which the Invitation is made, for investment. We have not
lodged or registered this Prospectus in any other jurisdiction.
Neither our Company, the Vendors, our Directors, the Manager, the Underwriter and Placement Agent,
nor any other parties involved in the Invitation is making any representation to any person regarding the
legality of an investment in our Shares by such person under any investment or other laws or regulations.
No information in this Prospectus should be considered as being business, legal or tax advice. You should
consult your own professional or other advisers for business, legal or tax advice regarding an investment
in our Shares. No person has been or is authorised to give any information or to make any representation
not contained in this Prospectus in connection with the Invitation and, if given or made, such information
or representation must not be relied upon as having been authorised by our Company, the Vendors, our
Directors, the Manager, or the Underwriter and Placement Agent. Neither the delivery of this Prospectus
and the Application Forms nor any documents relating to the Invitation shall, under any circumstances,
constitute a continuing representation or create any suggestion or implication that there has been no
change in our affairs or in the statements of fact or information contained in this Prospectus since the
date of this Prospectus. Where such changes occur, we will promptly make an announcement of the
same to the SGX-ST and to the public and, if required, lodge a supplementary or replacement prospectus
with the Authority and make an announcement of the same to the SGX-ST and to the public and will
comply with the requirements of the Securities and Futures Act. You should take note of any such
announcement and, upon release of such an announcement, shall be deemed to be given notice of such
changes. Save as expressly stated in this Prospectus, nothing herein is, or may be relied upon as, a
promise or representation as to the future performance or policies of our Company or our Subsidiary.
In the event that a supplementary or replacement prospectus is lodged with the Authority, the Invitation
shall be kept open for at least fourteen (14) days after the lodgement of such supplementary or
replacement prospectus.
We are subject to the provisions of the Securities and Futures Act and the Listing Manual regarding
corporate disclosure. In particular, if after this Prospectus is registered but before the close of the
Invitation, we become aware of:-
(a) a false or misleading statement in this Prospectus;
(b) an omission from this Prospectus of any information that should have been included in it under
Section 243 of the Securities and Futures Act; or
(c) a new circumstance that has arisen since the Prospectus was lodged with the Authority which
would have been required by Section 243 of the Securities and Futures Act to be included in this
Prospectus if it had arisen before this Prospectus was lodged,
that is materially adverse from the point of view of an investor, we may lodge a supplementary or
replacement prospectus with the Authority pursuant to Section 241 of the Securities and Futures Act.
21
Where prior to the lodgement of the supplementary or replacement prospectus, applications have been
made under this Prospectus to subscribe for and/or purchase our Invitation Shares and:
(a) where the Invitation Shares have not been issued and/or sold to you, our Company (on behalf of
itself and the Vendors) shall either:
(i) within two (2) days (excluding any Saturday, Sunday or public holiday) from the date of
lodgement of the supplementary prospectus or replacement prospectus, give you notice in
writing of how to obtain, or arrange to receive, a copy of the same and provide your with an
option to withdraw your applications and take all reasonable steps to make available within a
reasonable period the supplementary or replacement prospectus to you who have indicated
you wish to obtain, or who have arranged to receive, a copy of the supplementary or
replacement prospectus; or
(ii) within seven (7) days from the date of lodgement of the supplementary or replacement
prospectus, give you the supplementary or replacement prospectus, as the case may be,
and provide you with an option to withdraw your applications; or
(iii) treat the applications as withdrawn and cancelled, in which case your applications shall be
deemed to have been withdrawn and cancelled, and our Company shall (on behalf of itself
and the Vendors), within seven (7) days from the date of lodgement of the supplementary or
replacement prospectus, return all monies paid in respect of any application to you at your
own risk, without interest or any share of revenue or other benefit arising therefrom; or
(b) where the Invitation Shares have been issued and/or sold to you, our Company shall (on behalf of
itself and the Vendors) either:
(i) within two (2) days (excluding any Saturday, Sunday or public holiday) from the date of
lodgement of the supplementary prospectus or replacement prospectus, give you notice in
writing of how to obtain, or arrange to receive, a copy of the same and provide you with an
option to return to our Company the Invitation Shares, which you do not wish to retain title in,
and take all reasonable steps to make available within a reasonable period the
supplementary or replacement prospectus to you who have indicated you wish to obtain, or
who have arranged to receive, a copy of the supplementary or replacement prospectus; or
(ii) within seven (7) days from the date of lodgement of the supplementary or replacement
prospectus, give you the supplementary or replacement prospectus, as the case may be,
and provide you with an option to return to our Company the Invitation Shares, which you do
not wish to retain title in; or
(iii) (A) in the case of the New Shares, deem the issue as void and refund your payments for the
New Shares (without interest or any share of revenue or other benefits arising therefrom and
at your own risk) within seven (7) days from the date of lodgement of the supplementary or
replacement prospectus; and (B) in the case of the Vendor Shares, deem the sale of the
Vendor Shares as void, and in the case where documents to evidence title to the Vendor
Shares (“title documents”) have been issued to you, within seven (7) days from the date of
lodgement of the supplementary or replacement prospectus, inform you to return the title
documents within fourteen (14) Market Days from the date of lodgement of the
supplementary or replacement prospectus, and within seven (7) days from receipt of the title
documents or the date of lodgement of the supplementary or replacement prospectus,
whichever is the later, refund your payments for the Vendor Shares (without interest or any
share of revenue or other benefits arising therefrom and at your own risk) within seven (7)
Market Days from the date of lodgement of the supplementary or replacement prospectus,
and you will not have any claim against our Company, the Vendors, the Manager, the
Underwriter and Placement Agent.
22
If you wish to exercise your option under paragraph (a)(i) and (ii) above to withdraw your
application in respect of the Invitation Shares, you shall, within fourteen (14) days from the date of
lodgement of the supplementary or replacement prospectus, notify our Company of this,
whereupon our Company shall (on behalf of itself and the Vendors), within seven (7) days from the
receipt of such notification, return to you all monies you have paid on account of your application
for and/or purchase of such Invitation Shares, without interest or any share of revenue or other
benefit arising therefrom, at your own risk.
If you wish to exercise your option under paragraph (b)(i) and (ii) above to return the Invitation
Shares issued and/or sold to you, you shall, within fourteen (14) days from the date of lodgement
of the supplementary or replacement prospectus, notify our Company of this and return all
documents, if any, purporting to be evidence of title to those Shares, to our Company, whereupon
our Company shall (on behalf of itself and the Vendors), within seven (7) days from the receipt of
such notification and documents, if any, return to you all monies you have paid for those Shares
without interest or any share of revenue or other benefit arising therefrom and the issue and/or
sale of those Shares shall be deemed to be void.
This Prospectus has been prepared solely for the purpose of the Invitation and may only be relied upon
by you in connection with your application for and/or purchase of the Invitation Shares and may not be
relied upon by any other person or for any other purpose.
This Prospectus does not constitute an offer of, or invitation or solicitation to subscribe for and/or
purchase the Invitation Shares in any jurisdiction in which such offer or invitation or solicitation is
unauthorised or unlawful nor does it constitute an offer or invitation or solicitation to any person
to whom it is unlawful to make such offer or invitation or solicitation.
Copies of this Prospectus and the Application Forms and envelopes may be obtained on request, subject
to availability, from:-
Kim Eng Corporate Finance Pte. Ltd.

9 Temasek Boulevard
Singapore 038989
and from members of the Association of Banks in Singapore and members of the SGX-ST and merchant
banks in Singapore.
A copy of this Prospectus is also available on:
(a) the SGX-ST website at http://www.sgx.com; and
(b) the Authority’s website at http://masnet.mas.gov.sg/opera/sdrprosp.nsf.
The Application List will open immediately upon the registration of the Prospectus with the
Authority and will remain open until 12.00 noon on 21 October 2010 or for such further period or periods
as our Directors may, in consultation with the Manager decide, subject to any limitations under all
applicable laws, PROVIDED ALWAYS THAT where a supplementary prospectus or replacement
prospectus has been lodged with the Authority pursuant to Section 241 of the Securities and
Futures Act, the Application List shall be kept open for at least fourteen (14) days after the
lodgement of the supplementary prospectus or replacement prospectus.
Details of the procedures for application for the Invitation Shares are set out in Appendix C entitled
“Terms, Conditions and Procedures for Application and Acceptance” of this Prospectus.
23
INDICATIVE TIMETABLE FOR LISTING
The indicative timetable is set out below for the reference of applicants:-
Indicative date/time Event
21 October 2010, 12.00 noon Close of Application List and closing date and time for the Invitation
22 October 2010 Balloting of applications, or otherwise as may be approved by the

SGX-ST (in the event of an over-subscription for the Offer Shares)
25 October 2010, 9.00 a.m. Commence trading on a “ready” basis
28 October 2010 Settlement date for all trades done on a “ready” basis
The above timetable is only indicative as it assumes that the date of closing of the Application List will be
on 21 October 2010, the date of admission of our Shares to the Official List of the SGX-ST will be
25 October 2010, the SGX-ST’s shareholding spread requirement will be complied with and the New
Shares will be issued and fully paid-up prior to 25 October 2010.
The above timetable and procedure may be subject to such modification as the SGX-ST may, in its
absolute discretion, decide, including the decision to permit commencement of trading on a “ready” basis
and the commencement of such trading.
In the event of any changes in the closure of the Application List or the time period during which the
Invitation is open, we will publicly announce the same:
(i) through a SGXNET announcement to be posted on the Internet at the SGX-ST website
http://www.sgx.com; and
(ii) in a local English newspaper.
Results of the Invitation including the allotment and/or allocation of the Invitation Shares and balloting (in
the event of an over-subscription for the Offer Shares) will be provided through the channels in (i) and (ii)
above.
You should consult the SGX-ST announcement of the “ready” trading date on the Internet (at the SGX-ST
website http://www.sgx.com) or the newspapers, or check with your brokers on the date on which trading
on a “ready” basis will commence.
24
THE INVITATION
Invitation Size : 130,000,000 Invitation Shares comprising 105,000,000 New Shares and
25,000,000 Vendor Shares. The New Shares, which form part of the
Invitation, will, upon issue and allotment, rank pari passu in all respects with
our existing issued Shares.
Invitation Price : S$0.28 for each Invitation Share.
Purpose of Invitation : Our Directors consider that the listing and quotation of our Shares on the
Official List of the SGX-ST will enhance our public image and enable us to
tap the capital markets for the expansion of our business operations.
The Offer : The Offer comprises an invitation by our Company and the Vendors to the
public in Singapore to subscribe for and/or purchase of the 2,000,000 Offer
Shares at the Invitation Price, subject to and on the terms and conditions of
this Prospectus.
The Placement : The Placement comprises an offering by the Placement Agent on behalf of
our Company and the Vendors of 128,000,000 Placement Shares at the
Invitation Price by way of placement, subject to and on the terms of this
Prospectus.
Listing Status : Prior to the Invitation, there has been no public market for our Shares. Our
Shares will be quoted on the SGX-ST, subject to our admission to the
Official List of the SGX-ST and permission for dealing in and for quotation of
our Shares being granted by the SGX-ST and that no Stop Order is issued
by the Authority.
25
PLAN OF DISTRIBUTION
Prior to the Invitation, there has been no public market for the Invitation Shares. The Invitation Price was
determined by the Vendors and us in consultation with the Manager, the Underwriter and Placement
Agent based on market conditions and estimated market demand for our Shares determined through a
book-building process. The Invitation Price is the same for all Invitation Shares and is payable in full on
application.
The Invitation comprises the following:
(1) Offer Shares

The Offer Shares are made available to the members of the public in Singapore for subscription
and/or purchase at the Invitation Price. Applications for the Offer Shares may be made by way of
Offer Shares Application Forms or by way of IB Application or ATM Application. The terms and
conditions and procedures for application and acceptance are described in Appendix C entitled
“Terms, Conditions and Procedures for Application and Acceptance” of this Prospectus. Pursuant to
the terms and conditions contained in the Management and Underwriting Agreement signed
between our Company, the Vendors, the Manager and the Underwriter dated 13 October 2010, the
Underwriter has agreed to underwrite our Offer Shares. The Underwriter may, at its absolute
discretion, appoint one or more sub-underwriters.
In the event of an under-subscription for the Offer Shares as at the close of the Application List,
that number of Offer Shares not subscribed for and/or purchased shall be made available to satisfy
excess applications for the Placement Shares to the extent there is an over-subscription for the
Placement Shares as at the close of the Application List.
In the event of an over-subscription for the Offer Shares as at the close of the Application List
and/or the Placement Shares are fully subscribed or over-subscribed as at the close of the
Application List, the successful applications for the Offer Shares will be determined by ballot or
otherwise as determined by our Directors in consultation with the Manager, and approved by the
SGX-ST.
(2) Placement Shares

The Placement Shares are reserved for placement to members of the public in Singapore and
institutional investors at the Invitation Price. Applications for the Placement Shares may only be
made by way of Application Forms. The terms, conditions and procedures for application and
acceptance of the Placement Shares are set out in Appendix C entitled “Terms, Conditions and
Procedures for Application and Acceptance” of this Prospectus.
Pursuant to the terms and conditions in the Placement Agreement signed between our Company,
the Vendors and the Placement Agent dated 13 October 2010, the Placement Agent has agreed to
subscribe for and/or purchase and/or procure subscriptions and/or purchasers for the Placement
Shares at the Invitation Price. The Placement Agent may, at its absolute discretion, appoint one or
more sub-placement agents.
In the event of an under-subscription for the Placement Shares as at the close of the Application
List, that number of Placement Shares not subscribed for and/or purchased shall be made
available to satisfy excess applications for the Offer Shares to the extent that there is an over-
subscription for the Offer Shares as at the close of the Application List.
Subscribers of Placement Shares may be required to pay brokerage (and if so required, such
brokerage will be up to 1.0% of the Invitation Price), as well as stamp duties and other similar
charges.
26
None of our Substantial Shareholders or Directors intends to subscribe for and/or purchase Shares
in the Invitation. None of the members of our Company’s management or our employees intend to
subscribe for and/or purchase more than 5% each of the Invitation Shares in the Invitation. To the
best of our knowledge, we are unaware of any person who intends to subscribe for and/or
purchase more than 5% of the Invitation Shares.
Further, no Share shall be allotted or allocated on the basis of this Prospectus later than six
months after the date of registration of this Prospectus.
Please also refer to the section entitled “Management, Underwriting and Placement Arrangements”
of this Prospectus for further details.
27
CLEARANCE AND SETTLEMENT
Upon listing and quotation on the SGX Mainboard, our Shares will be traded under the book-entry
settlement system of the CDP, and all dealings in and transactions of the Shares through SGX-ST will be
effected in accordance with the terms and conditions for the operation of securities accounts with the
CDP, as amended from time to time.
Our Shares will be registered in the name of CDP or its nominee and held by CDP for and on behalf of
persons who maintain, either directly or through Depository Agents, securities accounts with CDP.
Persons named as direct securities account holders and Depository Agents in the Depository Register
maintained by the CDP, rather than CDP itself, will be treated, under our Articles and the Companies Act,
as members of our Company in respect of the number of Shares credited to their respective securities
accounts.
Persons holding our Shares in securities accounts with CDP may withdraw the number of Shares they
own from the book-entry settlement system in the form of physical share certificates. Such share
certificates will, however, not be valid for delivery pursuant to trades transacted on the SGX Mainboard,
although they will be prima facie evidence of title and may be transferred in accordance with our Articles.
A fee of S$10.00 for each withdrawal of 1,000 Shares or less and a fee of S$25.00 for each withdrawal of
more than 1,000 Shares is payable upon withdrawing the Shares from the book-entry settlement system
and obtaining physical share certificates. In addition, a fee of S$2.00 or such other amount as our
Directors may decide, is payable to the share registrar for each share certificate issued and a stamp duty
of S$10.00 is also payable where our Shares are withdrawn in the name of the person withdrawing our
Shares or S$0.20 per S$100.00 or part thereof of the last-transacted price where it is withdrawn in the
name of a third party. Persons holding physical share certificates who wish to trade on the SGX
Mainboard must deposit with CDP their share certificates together with the duly executed and stamped
instruments of transfer in favour of CDP, and have their respective securities accounts credited with the
number of Shares deposited before they can effect the desired trades. A fee of S$20.00 is payable upon
the deposit of each instrument of transfer with CDP.
Transactions in our Shares under the book-entry settlement system will be reflected by the seller’s
securities account being debited with the number of Shares sold and the buyer’s securities account being
credited with the number of Shares acquired. No transfer of stamp duty is currently payable for the
Shares that are settled on a book-entry basis.
A Singapore clearing fee for trades in our Shares on the SGX Mainboard is payable at the rate of 0.04
per cent of the transaction value subject to a maximum of S$600.00 per transaction. The clearing fee,
instrument of transfer deposit fee and share withdrawal fee may be subject to Singapore Goods and
Services Tax at the prevailing rate of 7.0%.
Dealings of our Shares will be carried out in Singapore dollars and will be effected for settlement on CDP
on a scripless basis. Settlement of trades on a normal “ready” basis on the SGX Mainboard generally
takes place on the third Market Day following the transaction date, and payment for the securities is
generally settled on the following business day. CDP holds securities on behalf of investors in securities
accounts. An investor may open a direct account with CDP or a sub-account with a CDP Depository
Agent. The CDP Depository Agent may be a member company of the SGX-ST, bank, merchant bank or
trust company.
28
USE OF PROCEEDS AND LISTING EXPENSES
The total net proceeds from the Invitation (after deducting the estimated expenses in relation to the
Invitation of approximately S$3.8 million) is estimated to amount to approximately S$32.6 million.
Listing expenses include professional fees, underwriting and placement commissions and brokerage fees,
and miscellaneous expenses. The professional fees and miscellaneous expenses will be borne by our
Company. The underwriting and placement commissions and brokerage fees will be borne by our
Company and the Vendors in the proportion in which the Invitation Shares are offered by our Company
and each of the Vendors.
Net proceeds from the issue of the New Shares

The estimated net proceeds attributable to our Company from the issue of the New Shares (after
deducting the estimated expenses to be borne by our Company in relation to the Invitation of
approximately S$3.5 million) is approximately S$25.9 million. The allocation of the gross proceeds raised
from the New Shares for each principal intended use of proceeds and each principal item of expenses is
set out below:
Amount allocated for

each dollar of the
proceeds raised from
the Invitation (as a % of
Use of Proceeds S$’000 the gross proceeds)
Expand our production facilities and capabilities (1)

21,500 73.1
Enhance our R&D capabilities and widen our range of
innovative and cost-effective solutions 3,000 10.2
Working capital purposes 1,371 4.7
Sub-total 25,871 88.0
Listing Expenses borne by our Company

Professional fees 2,000 6.8
Underwriting and placement commissions and brokerage fees 1,029 3.5
Miscellaneous expenses (including listing fees) 500 1.7
Sub-total 3,529 12.0
Total 29,400 100.0
Note:-
(1) We expect these expansion plans to be completed within one and a half years from the date of our Company’s admission to
the SGX-ST. In the event of any material delay in the completion of such expansion plans, we will publicly announce the
reasons for such delay and expected completion timing on the SGXNET.
Please refer to the section entitled “Prospects, Business Strategies and Future Plans” of this Prospectus
for more details on our future plans and use of proceeds.
In the event that the amount set aside to meet our Company’s portion of the estimated expenses listed
above is in excess of the actual expenses incurred in the connection with the Invitation, such excess
amount will be applied towards our working capital purposes.
Pending the deployment of the net proceeds as aforesaid, the net proceeds may be added to our Group’s
working capital, placed as deposits with banks or financial institutions, or used for investments in short-
term deposits, money market or debt instruments, as our Directors may deem appropriate in their
absolute discretion.
29
The foregoing represents our best estimate of our allocation of our net proceeds from the Invitation based
on our current plans and estimates regarding our anticipated expenditures. Actual expenditures may vary
or deviate from these estimates, and we may find it necessary or advisable to re-allocate our net
proceeds within the categories described above.
In the event that there is any material deviation from the stated use of net proceeds from the Invitation,
we will publicly announce the reasons for such deviations on the SGXNET, and seek approval from our
Shareholders.
We shall announce on the SGXNET as and when the proceeds of the Invitation have been materially
disbursed, and provide a status report on the use of proceeds of the Invitation in the annual report(s) of
our Company.
In the opinion of our Directors, no minimum amount must be raised from the Invitation.
None of the proceeds of the Invitation will be used to discharge, reduce or retire any indebtedness of our
Group.
In accordance with applicable accounting standards, the underwriting and placement commissions and
brokerage fees to be borne by our Company, as well as the professional fees and miscellaneous
expenses to be borne by the Company, will be offset against the gross proceeds raised from the New
Shares in our share capital account. The remaining professional fees and miscellaneous expenses will be
treated as expenses in our financial statements, which is expected to amount to approximately S$2.0
million in FY2010.
Net proceeds from the sale of the Vendor Shares

The net proceeds attributable to the Vendors from the sale of the Vendor Shares (after deducting the
Vendors’ share of the estimated expenses in relation to the sale of the Vendor Shares of approximately
S$0.3 million) will be approximately S$6.7 million.
30
MANAGEMENT, UNDERWRITING AND PLACEMENT ARRANGEMENTS
Pursuant to the management and underwriting agreement dated 13 October 2010 (the “Management and
Underwriting Agreement”) entered into between our Company, the Vendors, the Manager and the
Underwriter, our Company and the Vendors have appointed the Manager to manage the Invitation.
The Manager will receive a management fee from our Company for its services rendered in connection
with the Invitation.
Pursuant to the Management and Underwriting Agreement, the Underwriter agreed to underwrite the
Offer Shares for a commission of 3.5% of the Invitation Price for each Offer Share, payable by our
Company and each of the Vendors in the proportion in which the Offer Shares are offered by our
Company and each of the Vendors. The Underwriter may, at its absolute discretion, appoint one or more
sub-underwriters for the Offer Shares.
Pursuant to the placement agreement dated 13 October 2010 (the “Placement Agreement’’) entered into
between our Company, the Vendors and the Placement Agent, the Placement Agent agreed to subscribe
for and/or purchase or procure subscriptions and/or purchasers for the Placement Shares for a placement
commission of 3.5% of the Invitation Price for each Placement Share, payable by our Company and each
of the Vendors in the proportion in which the Placement Shares are offered by our Company and each of
the Vendors. The Placement Agent may, at its absolute discretion, appoint one or more sub-placement
agents for the Placement Shares.
For the Offer Shares, the brokerage will be paid by our Company to members of the Association of Banks
in Singapore, members of the SGX-ST and merchant banks in respect of successful applications made
on Application Forms bearing their respective stamps, or to the Participating Banks in respect of
successful applications made through Electronic Applications at their respective ATMs at the rate of
0.25% of the Invitation Price for each Offer Share, or in the case of DBS Bank, 0.50% of the Invitation
Price for each Offer Share. In addition, DBS levies a minimum brokerage fee of S$10,000 that will be
payable by our Company.
Subscribers of the Placement Shares may be required to pay brokerage of up to 1.0% of the Invitation
Price to the Placement Agent (or any sub-placement agent appointed by the Placement Agent), as well
as stamp duties and any other similar charges (subject to any GST, where applicable).
The Management and Underwriting Agreement may be terminated by the Manager on behalf of the
Underwriter at any time on or before the close of the Application List on the occurrence of certain events
including, inter alia:-
(a) any change or any development involving a prospective change or any crisis in national, regional or
international monetary, financial, political, industrial, legal, taxation, exchange controls or economic
conditions (including but without limiting thereto, conditions in the stock market, in the foreign
exchange market, inter-bank market and conditions with respect to interest rates, in Singapore and
overseas); or
(b) any change or introduction, or any prospective change or introduction of any legislation, regulation,
policy, directive, order, guideline, notice, request or interpretation or application thereof, by any
government body in Singapore or elsewhere, the Securities Industry Council of Singapore, or the
SGX-ST, the Authority or relevant authorities in the PRC or elsewhere; or
(c) the issue of a Stop Order by the Authority in accordance with Section 242 of the Securities and
Futures Act; or
(d) foreign exchange controls in Singapore and overseas or any occurrence of a combination of any
such changes or developments or crisis, or any deterioration of any such conditions; or
(e) any adverse change, or any development involving a prospective adverse change, in the condition
(financial or otherwise) of the Company or of the Group as a whole,
31
which event or events shall in the opinion of the Manager or the Underwriter (1) result or be likely to
result in a material adverse fluctuation or adverse conditions in the stock market in Singapore or
elsewhere or (2) be likely to prejudice the success of the offer, subscription or sale of the Invitation
Shares (whether in the primary market or in respect of dealings in the secondary market) or (3) make it
impossible, impracticable or uncommercial to proceed with any of the transactions contemplated in the
Management and Underwriting Agreement or (4) be likely to have a material adverse effect on the
business, trading position, operations or prospects of the Company or of the Group as a whole or (5) be
such that no reasonable underwriter would have entered into the Management and Underwriting
Agreement or (6) result or be likely to result in the issue of a Stop Order by the Authority pursuant to the
Securities and Futures Act or (7) make it uncommercial or otherwise contrary to, or outside the usual
commercial practices of underwriting in Singapore for, the Underwriter to observe or perform or be
obliged to observe or perform the terms of the Management and Underwriting Agreement.
In the event the Management and Underwriting Agreement is terminated, our Company reserves the
right, at the absolute discretion of the Directors, to cancel the Invitation.
The Placement Agreement is conditional upon the Management and Underwriting Agreement not being
terminated or rescinded pursuant to the provisions of the Management and Underwriting Agreement.
Save as disclosed above, we do not have any material relationship with the Manager, Underwriter and
Placement Agent or any sub-placement agent in relation to the Invitation.
32
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by, and is subject to, the more detailed information and
financial statements (including the notes thereto) appearing elsewhere in this Prospectus. You should
carefully consider all the information presented in this Prospectus, particularly the matters set out in the
section entitled “Risk Factors” of this Prospectus before making an investment decision.
OUR COMPANY
On 29 October 2009, our Company was incorporated in Singapore under the Singapore Companies Act
as a private company limited by shares under the name of “Anchun Holdings Pte. Ltd.”. On 9 September
2010, we changed our name from “Anchun Holdings Pte. Ltd.” to “Anchun International Holdings Pte. Ltd.”
so as to align with our strategic direction of business development. On 14 September 2010, we were
converted into a public limited company and changed our name to “Anchun International Holdings Ltd.”.
Our Company registration number is 200920277C. Our registered office is located at 1 Robinson Road,
#17-00 AIA Tower, Singapore 048542 whereas we carry out our principal business at No.539, Lusong
Road, Changsha National Hi-tech Industrial Development Zone, Changsha City, Hunan Province, PRC
. Our telephone number is (86)-731- 8514 8687
and our facsimile number is (86)-731- 8514 8687.
OUR BUSINESS
We are a leading integrated chemical systems engineering and technology solutions provider to the PRC
petrochemical and chemical industries, in particular, manufacturers of ammonia and methanol based
products. Since our inception, we have established a track record of operational excellence, technological
breakthroughs and national awards for our achievements. In addition, we have obtained several
enterprise awards and accolades, including 2009 Forbes China Up & Comers award by Forbes China
magazine (ranked 98th enterprise across all industries nationwide for enterprise growth potential) and
2005 China Petrochemical and Chemical Industries Outstanding Private Enterprise
by China Petroleum and Chemical Industries Association.
A detailed discussion of our business and the services we provide is set out in the section entitled
“History and Business” of this Prospectus.
OUR COMPETITIVE STRENGTHS

Our Directors believe that our competitive strengths are as follows:-
Leading and established management team
Integrated business model anchored on strong R&D capabilities and registered patents for our key
technologies
Established track record of operational excellence, technological breakthroughs and national

awards
Widely-recognised as a leading enterprise and brand name in the PRC chemical systems
engineering and technology solutions industry
Extensive and notable customer network across the PRC
High barriers to entry to our industry
A detailed discussion of our competitive strengths is set out in the section entitled “Competitive Strengths”
of this Prospectus.
33
OUR FINANCIAL PERFORMANCE
Our financial performance for the periods under review is summarized below:-
Audited Unaudited
RMB’000 FY2007 FY2008 FY2009 1Q2009 1Q2010
Revenue 114,780 121,009 294,841 104,445 67,295
Gross profit 52,531 56,591 118,802 40,410 40,746
Profit before tax 27,859 25,637 88,303 34,904 29,166
Profit net of tax attributable to

Shareholders 22,718 21,304 75,161 29,656 25,063
Please refer to the section entitled “Management’s Discussion and Analysis of Results of Operations and
Financial Position” of this Prospectus and the Accountants’ Reports for further details.
OUR BUSINESS STRATEGIES AND FUTURE PLANS

Leveraging on our brand name and position as a leading integrated chemical systems engineering and
technology solutions provider to the PRC petrochemical and chemical industries, in particular,
manufacturers of ammonia and methanol based products, we intend to adopt the following strategies to
drive our future growth and increase our shareholder value:-
In view of our Group’s future plans, our Directors consider that the listing of our Shares on the SGX-ST
will provide our Group with a new channel to gain access to the capital markets, promote our corporate
profile and further enhance our Group’s image, all of which are in the interests of our Group’s future
growth and development.
A detailed discussion of our future plans is set out in the section entitled “Prospects, Business Strategies
and Future Plans” of this Prospectus.
34
ISSUE STATISTICS
INVITATION PRICE 28.0 cents

(approximately
RMB141.4 fen)(1)
Adjusted NAV (as at end of 1Q2010) per Share
(a) before adjusting for the estimated net proceeds of the New Shares and RMB34.1 fen
based on the pre-Invitation share capital of 400,000,000 Shares
(b) after adjusting for the estimated net proceeds of the New Shares and based RMB52.9 fen
on the post-Invitation share capital of 505,000,000 Shares
Premium of Invitation Price per Share over the Adjusted NAV per Share:-
(a) before adjusting for the estimated net proceeds of the New Shares and 314.3%
based on the pre-Invitation share capital of 400,000,000 Shares
(b) after adjusting for the estimated net proceeds of the New Shares and based 167.3%
on the post-Invitation share capital of 505,000,000 Shares
EARNINGS
Historical net EPS of our Group for FY2009 based on the pre-Invitation share RMB18.8 fen
capital of 400,000,000 Shares
Historical net EPS of our Group for FY2009 had the Service Agreements been in RMB18.5 fen
place from the beginning of FY2009(2) and based on the pre-Invitation share capital
of 400,000,000 Shares
PRICE EARNINGS RATIO

Historical price earnings ratio based on the Invitation Price and the historical net 7.5 times
EPS of our Group for FY2009
Historical price earnings ratio based on the Invitation Price and the historical net 7.7 times
EPS of our Group for FY2009 had the Service Agreements been in place from the
beginning of FY2009(2)
NET OPERATING CASH FLOW (3)

Historical net operating cash flow per Share of our Group for FY2009 based on the RMB14.5 fen
pre-Invitation share capital of 400,000,000 Shares
Historical net operating cash flow per Share of our Group for FY2009 had the RMB14.1 fen
Service Agreements been in place from the beginning of FY2009(2) and based on
the pre-Invitation share capital of 400,000,000 Shares
PRICE TO NET OPERATING CASH FLOW

Historical price to net operating cash flow ratio based on the Invitation Price and the 9.8 times
historical net operating cash flow per Share for FY2009
Historical price to net operating cash flow ratio based on the Invitation Price and the 10.0 times
historical net operating cash flow per Share for FY2009 had the Service
Agreements been in place from the beginning of FY2009(2)
35
MARKET CAPITALISATION
Market capitalisation based on the Invitation Price and post-Invitation share capital S$141.4 million
of 505,000,000 Shares
Notes:-
(1) Calculated based on the exchange rate of S$1.00 = RMB5.049 as at the Latest Practicable Date.
(2) Had the Service Agreements been in existence for FY2009, the aggregate remuneration (including contributions, bonus, and
benefits-in-kind) paid to the Executive Directors would have been approximately RMB2.3 million (approximately S$0.5 million)
instead of approximately RMB1.1 million (approximately S$0.23 million) and the profit after tax of our Group would have been
approximately RMB73.9 million (approximately S$15.7 million) instead of approximately RMB75.2 million (approximately
S$16.0 million).
(3) Net operating cash flow is defined as net cash generated from operating activities which is derived from profit before tax after
adjustments as set out in the Audited Combined Financial Statements.
36
RISK FACTORS
You should evaluate carefully each of the following considerations and all of the other information set forth
in this Prospectus before deciding to invest in our Shares. Some of the following considerations relate
principally to the industry in which we operate and our business in general. Other considerations relate
principally to general social, economic, political and regulatory conditions, the securities market and
ownership of our Shares, including possible future dilution in value of our Shares.
If any of the following considerations and uncertainties develop into actual events, our business, financial
condition or results of operations could be materially and adversely affected. In such case, the trading
price of our Shares could decline due to any of these considerations, and you may lose all or part of your
investment.
Apart from the specific factors listed below and general business and economic conditions to which all
commercial businesses are exposed to, we are of the view that we are not vulnerable in any material way
to any other factors which can be reasonably anticipated.
RISKS RELATING TO OUR BUSINESS OR OUR INDUSTRY

We are affected by the prices, availability and quality of our direct materials used in our
production
Our direct materials are steel (such as carbon steel and stainless steel) and certain machinery parts
(such as cover head and forged parts) for manufacturing our chemical systems and components. We do
not enter into long term contracts with our suppliers and prices are normally fixed at the time when the
contracts are signed. Any unexpected price fluctuations, shortage, delay in delivery, quality defects, or
any factors beyond our control may result in an interruption in the supply of our direct materials. In the
event that we fail to secure sufficient quantities of such direct materials from our suppliers at acceptable
quality and prices in a timely manner, our business and financial performance may be adversely affected.
In particular, we are vulnerable to the risk of rising steel prices, which are determined by demand and
supply conditions in the global and the PRC markets as well as government policies. The cost of steel
material accounted for an average of approximately 73.4%, 71.7%, 73.8% and 69.4% of our total cost of
sales for FY2007, FY2008, FY2009 and 1Q2010, respectively. Please refer to the section entitled
“Management’s Discussion and Analysis of Results of Operations and Financial Position” of this
Prospectus for more information on the cost of our steel purchases. Our contracts are negotiated with our
customers based on existing market prices of materials, possible selling prices of our products/services
and our intended gross margins. Hence, we fix the prices of required materials at approximately the same
time as the contracts we sign with our customers so as to protect our gross margins. Nevertheless,
should there be any significant increases in steel prices, and we are unable to pass on such increases in
prices to our customers or find alternative suppliers/sources of direct materials who are able to supply us
the direct materials at competitive prices, our business and financial performance will be adversely
affected. As at the Latest Practicable Date, we have not encountered any instances where we were
unable to pass on significant increases in steel prices to our customers.
Our products and technology solutions may become obsolete due to technological developments
in the market and our R&D activities may not yield the benefits that we expect
We constantly strive to develop new products and technology solutions in order to meet our customers’
preferences and market demands. R&D activities require considerable human resources and capital
investment. As at the Latest Practicable Date, we have over 120 project/process engineers who actively
participate in the R&D process through their respective job functions. For FY2007, FY2008, FY2009 and
1Q2010, we spent approximately RMB9.1 million, RMB8.8 million, RMB8.8 million and RMB5.9 million on
our R&D activities, accounting for approximately 7.9%, 7.2%, 3.0% and 8.7% of our total revenue,
respectively.
37
We may not be able to accurately anticipate trends in technological or product developments and market
demand. If the anticipated development trend or market demand does not materialise, our R&D efforts
may become obsolete. Furthermore, our R&D efforts may not be successful or yield the anticipated level
of economic benefits. Even if our R&D efforts are successful, we may not be able to apply these newly
developed technologies to our products that will be accepted by the market or apply them in a timely
manner to take advantage of the opportunities presented in the market, which in turn may have an
adverse impact on our business and financial performance.
In addition, the level of economic benefits that can be derived from newly developed technology solutions
or products may be affected by how quickly our competitors can replicate these technology solutions or
products or develop newer or cheaper alternatives. If our technology solutions or products are replicated,
replaced or made redundant in a manner that we did not anticipate, our revenue may not offset the costs
incurred in developing the new technology solutions and products, and our competitiveness, business and
financial performance may be adversely affected.
We may not be able to adequately safeguard our intellectual property rights

Our business is reliant on the trademarks, patented technologies described in the sections entitled
“Research and Development” and “Intellectual Property” of this Prospectus. As at the Latest Practicable
Date, we have 13 registered patents and another 4 patent pending applications in the PRC.
We cannot assure you that our licensees as well as third parties will not misappropriate our intellectual
property, or that our competitors will not independently develop alternative technologies that are
equivalent or superior to technologies based on our intellectual property. We had submitted a petition to
an Intermediate People’s Court in the PRC against one of our PRC competitors for infringing our alcohol-
hydrocarbonylation refining process technology in 2006. After careful evaluation, we withdrew the petition
in the same year as there was no significant impact on our operations and business. The legal regime
governing intellectual property in the PRC is still evolving and the level of protection of intellectual
property rights in the PRC differs from that in other jurisdictions. The degree of protection of our
proprietary intellectual property against the infringing parties may not be sufficient and it may be difficult
for us to obtain sufficient compensation from the infringing parties.
We have entered into confidentiality agreements with our key R&D personnel and other contractual
agreements with our employees, as well as limited the access to and distribution of our proprietary
intellectual property to protect our proprietary intellectual property. However, our efforts in this regard may
be inadequate to deter misappropriation of our proprietary information or we may be unable to detect
unauthorised use and take appropriate steps to enforce our legal and proprietary rights. Policing
unauthorised use of our proprietary intellectual property is difficult and there can be no assurance that
the steps taken by us will prevent misappropriation of our proprietary intellectual property.
Where litigation is necessary to safeguard our proprietary technical know-how, or to determine the validity
and scope of the proprietary rights of others, this could result in substantial costs and diversion of our
resources, which could have a material adverse effect on our business, financial performance or future
prospects.
We may be affected by the level of business activities and financial performance of our
customers, in particular our major customers
Our financial results are affected by the level of business activities of our customers, and their financial
performance, which in turn is affected by the general shifts in economic conditions especially in the
petrochemical and chemical industries, level of economic activities in the industries and markets that they
serve, the demands for their products as well as the cost of their products affected by fluctuations in the
prices of their raw materials. This is particularly so for our major customers as they contribute to a large
portion of our revenue. For example, the revenue contribution from our 5 major customers in FY2009 was
74.6% of our FY2009 revenue in aggregate. Please refer to the section entitled “Our Major Customers” of
this Prospectus for details on our major customers.
38
In addition, as our customers are in the petrochemical and chemical industries, their business activities
and financial performance are affected by the applicable laws and regulations in these industries, such as
environmental protection measures, including the policies and procedures established by local authorities
designed for the implementation of such laws and regulations. We cannot assure you that our customers
had been able to comply or are able to continue to comply with all the relevant PRC laws, regulations and
measures. Further, there is no assurance that the current PRC laws and regulations will not be changed
in the future. In the event that our customers are unable to comply with such laws and regulations,
penalties such as fines or suspension of business may be imposed on them.
Therefore, a change or decline in the level of business activities of our customers, or deterioration of their
financial performance or positions may result in our customers undertaking less production capacity
expansion/capital expenditure projects and therefore requiring less of our products and services, or delay
and/or cancellation of the projects they have awarded to us, which could have a material adverse effect
on our business, revenues and financial performance.
We may be unable to effectively manage our expansion

We have identified several growth plans as set out in the section entitled “Prospects, Business Strategies
and Future Plans” of this Prospectus. Our ability to implement our business plans depends on, inter alia,
global economic conditions, our capital resources, our R&D capabilities for new products and technology
solutions, our ability to commercially realise the R&D results, our ability to obtain any necessary
government or regulatory approval or licenses, and the availability of management, financial and other
resources. We may not be able to grow at a rate comparable to our growth in the past, either in terms of
revenue or net profit. If we fail to effectively implement strategies to manage our growth and successfully
manage our expansion, we may encounter operational and financial difficulties which would in turn
adversely affect our business and financial performance.
Our customers may make claims against us and/or terminate our services in whole or in part
prematurely should we fail to satisfy their requirements and expectations
Any defect or malfunction in our system designs, products and/or technology solutions, or failure to satisfy
the requirements and expectations of our customers, could lead to claims made against us and/or
termination of our services in whole or in part. This may arise from unsatisfactory design or workmanship,
staff turnover, human errors, misinterpretation of and failure to adhere to regulations and procedures.
Further, as our system designs, products and technology solutions are applied in the process of
manufacture of chemicals, if it is established that any damages in and/or loss of property, as well as
personal injuries and/or death resulted from defects in or malfunction of our system designs, products
and/or technology solutions, we may be required to further compensate our customers and/or victims for
such loss, damages, personal injuries and/or death.
In addition, we may also be subject to potential liability from legal suits for any losses suffered by our
customers due to delay of delivery of our products or services.
In the event that we are involved in any legal dispute or court proceedings with our customers, our
reputation will be adversely affected and we may have to spend a significant amount of resources to
defend ourselves, which may adversely affect our business and financial performance. As at the Latest
Practicable Date, we have not encountered any form of termination by our customers.
Our financial performance may fluctuate from period to period due to the nature of our business
We are vulnerable to revenue volatility due to the nature of our business. We derive a substantial portion
of our revenue from the sale of our chemical systems and components as well as provision of technology
design services, both of which are project-based in nature. As such products and services mainly relate
to production capacity expansion projects which are capital expenditure items of our customers, our
customers typically do not make recurrent purchases of the same quantum and/or types of products
and/or services from period to period. For instance, our chemical systems and components comprise (i)
outer layer, which are the pressure vessels; and (ii) inner layer components which include chemical
synthesis reactors, heat exchanger and separation equipment. The average replacement cycle for the
outer and inner layer components are 10-15 years and 5-10 years respectively. Nevertheless, many
39
existing systems in the PRC are considered either technologically outdated or not economically viable in
the long run. Ammonia and methanol production systems with production capacities of less than 180 kt/yr
and 200 kt/yr respectively are considered to be inefficient and not economically viable in the long run.
Please refer to the section entitled “Industry Overview” for more information on the ammonia and
methanol industry in the PRC. Currently, our Group’s ammonia and methanol synthesis reactors have
production capacities of up to 330 kt/yr and 300 kt/yr respectively. Please refer to the section entitled “Our
Chemical Systems and Components and Manufacturing Process” for more information.
Accordingly, in the event that we are not able to continuously and consistently secure new contracts of
similar or higher value and volume, our business and financial performance would fluctuate and may be
adversely affected.
Furthermore, we recognise proceeds from the sale of our chemical systems and components as revenue
only upon the acceptance of our chemical systems and components by our customers, which is after the
successful commissioning and acceptance-testing of the entire production system. The commissioning
and acceptance-testing of the entire production system is dependent on, inter alia, the length of time
required for the completion of our chemical systems and components, the installation schedule of the
remaining production system and our customers’ production schedule. Notwithstanding that we may have
already received milestone payments in accordance with our contracts with our customers (which are
recorded as advances from customers on our balance sheet), our revenue recognised during any given
period reflects the quantity of our chemical systems and components which have been successfully
commissioned and passed the acceptance-testing by our customers during that period, and may be
affected by, inter alia, any rescheduling by our customers, and may not be indicative of the actual demand
of our chemical systems and components during that period due to the production/delivery lead time as
aforementioned. As production/delivery lead time for each contract will differ, this may cause further
fluctuation in our financial performance from period to period.
We are exposed to the credit risk of our customers

We are exposed to payment delays and/or defaults by our customers and our financial position and
financial performance are dependent on the creditworthiness of our customers. In general, we require our
customers to make payment of 30% of the project value as advance payment after signing of the
contract, and up to 65% of the project value will be payable according to the milestone payments as set
out in our contracts with our customers. A retention sum of approximately 5% of the project value for a
period of twelve months is required as a deposit for warranty of quality. Trade receivables turnover for
FY2007, FY2008, FY2009 and 1Q2010 were 57 days, 19 days, 9 days and 29 days, respectively. As at
31 March 2010, we have trade receivables amounting to RMB6.6 million that are more than 180 days but
not considered impaired. As at the Latest Practicable Date, approximately RMB1.8 million of such past
due trade receivables remain. To the best of our management’s knowledge and belief, no further
allowance for impairment for these receivables are required as such trade receivables are considered
recoverable since these customers are operational and have low insolvency risk.
There is no guarantee on the timeliness of all or any part of our customers’ payments and whether they
will be able to fulfil their obligations, which may arise from their financial difficulties, cashflow difficulties,
deterioration in their business performance, or a downturn in the global economy. If such events or
circumstances occur, our financial performance and our operating cash flow may be adversely affected.
Please refer to the section entitled “Credit Management” of this Prospectus for further details.
We are dependent on our management team and skilled employees

Our success to date has been largely attributable to the continuing efforts of our management team
comprising our Executive Directors and Key Executives, most of whom have been working with us since
our establishment and have substantial experience in our industry. We believe our continued success is
dependent to a large extent on our ability to attract, retain and motivate these personnel.
In addition, our business will also require skilled employees, such as technicians, engineers and research
personnel, to develop new products and technology solutions. There can be no assurance that we will be
able to attract, train and retain the necessary skilled employees to accomplish our business objectives.
40
Although we have entered into employment contracts with our Executive Directors, Key Executives and
skilled employees, we cannot assure you that we will be able to continue to engage their services in the
future after the aforesaid agreements have lapsed or are terminated. The loss of the services of the
above-mentioned personnel without adequate replacements or the inability to attract new qualified
personnel at a reasonable cost would have an adverse effect on us. Please refer to the section entitled
“Directors, Key Executives and Employees” of this Prospectus for further details.
We are dependent on our existing licenses, certificates and permits in relation to the manufacture
of our products and/or provision of our design services
We are required to obtain various licenses, certificates and permits issued by the relevant government
authorities for the manufacture of our products and provision of our design services in the industries and
markets we serve. Please refer to section entitled “Permits, Approvals, Certifications & Government
Regulations” of this Prospectus for further details of such licenses, certificates and permits. There can be
no assurance that these licenses, certificates and permits will be renewed in future or that we will be able
to maintain these or any of these licenses, certificates and permits for the manufacture of our products
and provision of our design services. Should any of these licenses, certificates or permits not be renewed
and thus result in the discontinuance of production of certain products or termination of qualification of
providing design services, our business and financial performance would be adversely affected.
We may inadvertently infringe on third party intellectual property rights

We may be unaware of a third party’s intellectual property rights that cover some of our products and
technologies. Third parties may assert claims against us alleging that we have infringed their intellectual
property rights. It may be difficult for us to establish or protect our proprietary intellectual property rights
against such third parties and any litigation regarding patents or other intellectual property could be costly
and time-consuming and could divert our management and key personnel from our business operations
resources in defending any claims relating to proprietary rights. If any party succeeds in asserting a claim
against us relating to the disputed proprietary intellectual property rights, we may need to enter into costly
license agreements or seek alternative technologies.
In the event that we are unable to obtain license agreements on terms acceptable to us, we may need to
cease our operations in relation to a particular range of products or technologies. We may also be subject
to significant damages or injunctions against the development and sale of certain of our products or use
of our technologies. As at the Latest Practicable Date, to the best of our knowledge, we have never
infringed on any third party’s intellectual property rights.
Our production activities may be affected due to fire, power shortage, natural calamities or
outbreak of severe communicable diseases in the PRC
Our production activities may be disrupted due to factors beyond our control, such as the occurrence of
fire, disruptions in the power supply, or natural calamities resulting in significant loss or damage to our
production facilities, direct materials and inventory. These would adversely affect our production
capabilities, result in longer lead time for production and delayed delivery to our customers. The
occurrence of such events could damage our reputation and may, as a result, lead to potential
compensation claims from our customers and affect our ability to attract new businesses.
In addition, the PRC has experienced outbreaks of several communicable diseases such as the
occurrence of bird flu or severe acute respiratory syndrome (“SARS”) in the last few years. If any of our
employees are affected by such severe communicable disease outbreaks, we may be required to
temporarily shut down and quarantine all relevant staff to prevent the spread of the disease, which could
adversely affect and/or disrupt our production and the relevant plants and impact our financial
performance. Further, such outbreak of communicable diseases, if uncontrolled, could have an adverse
effect on the overall business sentiments and environment in the PRC, which in turn may have an
adverse impact on our business and operations.
41
We may not have sufficient insurance coverage
We have maintained insurance coverage for our plant and equipment and our employees, details of which
are set out in the section entitled “Insurance” of this Prospectus. However, we currently do not maintain
any insurance policies against loss of key personnel and business interruption, product liability claims or
delays or damages in in-progress projects. There is no assurance that our insurance coverage would be
sufficient and as such, any uninsured loss or a loss in excess of insured limits will have a material impact
on our business and financial performance.
Our inability to maintain our competitiveness would adversely affect our financial performance
We face competition from competitors which are able to manufacture products that are similar to ours and
compete with us on key attributes which include scale and capacity of our production facilities, pricing,
brand name, timely delivery and customer service. Please refer to the sections entitled “Competition” and
“Competitive Strengths” of this Prospectus for details on competitors and our competitive strengths.
Competition in the products we manufacture could increase as a result of new market entrants, or our
competitors may be able to price their products more attractively, or may develop or acquire technology
that is comparable to or more advanced than our proprietary technologies. In addition to local
competitors, we also face competition from foreign companies, which may have access to greater
financial, technological and other resources than we do.
There is no assurance that we will be able to compete successfully in the future. Any failure by us to
remain competitive would adversely affect our financial performance.
Prolonged disruptions to the global credit and capital markets and their impact on the PRC
economy may materially and adversely affect our liquidity, financial performance, prospects and
future expansion plans
Since the second half of 2008, the general slowdown in the global economy and challenging market
conditions have resulted in reduced liquidity, greater volatility, a reduction in available financing and a lack
of market confidence. These factors, combined with declining consumer confidence and increased
unemployment around the world, have precipitated a global economic slowdown and may lead to reduced
orders, pressure on selling prices and longer trade receivables turnover days. Given the dramatic change
in the overall credit environment and global economy, it is difficult to predict how long these conditions will
exist and the extent to which we may be affected.
In addition, we cannot assure you that measures implemented by governments around the world to
stabilise the credit and capital markets will improve market confidence and the overall credit environment
and economy. As a result, prolonged disruptions to the global credit and capital markets could limit our
financing options, increase our financing cost or cause our financing to be more expensive or subject to
less favourable terms, which in turn may materially and adversely affect our liquidity, financial
performance, prospects and future expansion plans.
We may be subject to foreign exchange risk

Under the present unified floating exchange rate system largely based on market supply and demand, the
People’s Bank of China publishes a daily exchange rate for the RMB based on the previous day’s
dealings in the inter-bank foreign exchange market. Under this unified floating exchange rate system,
fluctuations in the exchange rate of the RMB against other currencies are to a certain extent subject to
interplay of market forces.
Currently, our sales, purchases and operating expenses are denominated in RMB and we do not face any
foreign exchange risk. However, in the future we may purchase machinery and equipment or transact with
foreign customers and/or suppliers in foreign currencies. To the extent that we make such purchases or
enter into such transactions which are payable and/or receivable in currencies other than RMB, any
changes in the foreign currency exchange rate will affect our sales value and/or cost of purchases. Any
significant depreciation of RMB against foreign currencies would materially and adversely affect our
financial performance.
42
Furthermore, there is no assurance that the RMB will not be subject to devaluation due to legislative
intervention by the PRC government or adverse market movements. Any devaluation in the RMB will
adversely affect the dividends (in foreign currency terms) received by our Company, and then by our
Shareholders.
Cessation of income tax incentives will have an adverse impact on our net profit
On 16 March 2007, the National People’s Congress of the PRC
passed the New Income Tax Law, which took effect as of 1 January 2008. Pursuant to the New Income
Tax Law, a unified enterprise income tax rate of 25% and unified tax deduction standards will apply
equally to both domestic enterprises and foreign-invested enterprises. In accordance with Article 28 of the
New Income Tax Law, enterprises which are accredited as advanced new technology enterprises are
entitled to enjoy tax reduction under the current income tax laws in accordance with the requirements and
periods specified by the current income tax laws. Hunan Anchun has renewed its status as an Advanced
New Technology Enterprise in November 2008, and is therefore subject to a reduced income tax rate of
15% for a period of three years ending November 2011. Had our Group been subjected to the income tax
rate of 25%, our income tax payable and net income after tax for FY2007, FY2008, FY2009 and 1Q2010
would have been approximately RMB2.0 million, RMB1.8 million, RMB18.8 million and RMB7.0 million,
and RMB19.3 million, RMB18.4 million, RMB66.4 million and RMB20.8 million, respectively.
There is no assurance that there will not be further change to laws relating to taxation which may result in
the removal, loss, suspension or reduction of the above tax incentives, and we cannot assure you that
Hunan Anchun can be maintained as a high technology enterprise and therefore enjoy such reduced
income tax rate in future. In the event that such tax incentives currently granted to Hunan Anchun cease
or expire, our Group’s financial performance will be adversely affected.
RISKS RELATING TO PRC

Our Group’s operations and significant assets are located in the PRC. Furthermore, all of our revenue are
derived from customers within the PRC. Accordingly, risks relating to the PRC may affect our business
and financial performance. Please refer to the following for details of risks relating to our business in the
PRC:-
Uncertainty in the PRC legal system may make it difficult for us to predict the outcome of any
disputes that we may be involved in
The PRC legal system is based on the PRC Constitution and is made up of written laws, regulations,
circulars and directives. The PRC government is still in the process of developing its legal system, so as
to meet the needs of investors and to encourage foreign investment. As the PRC economy is undergoing
development generally at a faster pace than its legal system, some degree of uncertainty exists in
connection with whether and how existing laws and regulations will apply to certain events or
circumstances.
Some of the laws and regulations, and the interpretation, implementation and enforcement thereof, are
still subject to policy changes. There is no assurance that the introduction of new laws, changes to
existing laws and the interpretation or application thereof or the delays in obtaining approvals from the
relevant authorities will not have an adverse impact on our business or prospects.
Further, precedents on the interpretation, implementation and enforcement of the PRC laws and
regulations are limited, and unlike other common law countries such as Singapore, decisions on
precedent cases are not binding on lower courts. As such, the outcome of dispute resolutions may not be
consistent or predictable as in the other more developed jurisdictions and it may be difficult to obtain swift
or equitable enforcement of the laws in the PRC, or obtain enforcement of judgment by a court of another
jurisdiction.
43
Our business and financial performance are highly susceptible to changes in the PRC’s political,
economic and social conditions as our revenue is currently wholly derived from our operations in
the PRC
Since 1978, the PRC government has undertaken various reforms of its economic systems. Such reforms
have resulted in economic growth of the PRC in the last three decades. However, many of the reforms
are unprecedented or experimental, and are expected to be refined and modified from time to time. Other
political, economic and social factors may also lead to further readjustment of the reform measures. This
refinement and adjustment process may consequently have a material impact on our operations in the
PRC or a material adverse impact on our financial performance. Our business and financial performance
may be adversely affected by changes in the PRC’s political, economic and social conditions and by
changes in policies of the PRC government or changes in laws, regulations or the interpretation or
implementation thereof.
PRC foreign exchange control may limit our ability to utilise our revenue effectively and affect our
ability to receive dividends and other payments from Hunan Anchun
Our Subsidiary, Hunan Anchun is subject to the PRC rules and regulations on currency conversion. In the
PRC, the State Administration for Foreign Exchange (“SAFE”) regulates the conversion of the RMB into
foreign currencies. Currently, foreign investment enterprises (“FIEs”) are required to apply to SAFE for
“Foreign Exchange Registration Certificates for FIEs”. With such registration certifications (which need to
be examined annually), FIEs are allowed to open foreign currency accounts including the “basic account”
and “capital account”. Currently, conversion within the scope of the “basic account” (e.g. remittance of
foreign currencies for payment of dividends, etc.) can be effected without requiring the approval of SAFE.
However, conversion of currency in the “capital account” (e.g. for capital items such as direct investments,
loans, securities, etc.) still requires the approval of SAFE.
The applicable law in respect of conversion of RMB into other currencies is the Regulation on Foreign
Exchange Controls of the PRC (“Regulation”), which came into effect on 1 April 1996 and amended as of
14 January 1997 and 5 August 2008. The Regulation regulates the general matters in connection with
foreign exchange control on a broad perspective. Under the Regulation:-
(a) Conversion of RMB into foreign currencies for the use of recurring items, including the distribution
of dividends and profits to foreign investors of FIEs is permissible and the approval of SAFE is not
required, and FIEs are permitted to remit foreign currencies from their foreign currency bank
accounts in the PRC upon presentation to the banks of board resolutions which authorise the
distribution of profits or dividends and subject to other requirements being satisfied.
(b) However, conversion of RMB into foreign currencies for capital items, such as repatriation of
capital, repayment of loans and for securities investment, is still under control and needs the
approval of SAFE, where such approval procedures by the local SAFE branch should not create
any legal obstacles for the FIEs. Nevertheless, the time taken to obtain approval will depend on
SAFE and the foreign investors of FIEs may not receive the approval on a timely basis, which may
affect their timing of receipt of the repatriated funds for the said capital items.
In addition, as part of PRC foreign exchange control, the Notice on Issues concerning Foreign Exchange
Management in Financing by PRC Residents by Overseas Special Purpose Vehicle (“SPV”) and Return-
investments
(“Notice 75”) promulgated by SAFE, which came into force on 1 November 2005, may also affect the
repatriation of funds by Hunan Anchun to our Company in the form of dividend income or otherwise.
Notice 75 generally applies to matters concerning foreign exchange control specifically on equity
financing and round-trip investment through SPVs by domestic residents. Under Notice 75:-
(a) SPVs are foreign companies that are established by or controlled by PRC residents for raising
financing outside of PRC by way of equity issue or convertible debt. Such PRC residents
(“Relevant PRC Residents”) are required to file an “overseas investment foreign exchange
registration” before the establishment of such SPV and subsequently, to update such registration
on the occurrence of specified events (“Specified Events”) such as (i) the injection of assets or
44
shares of a PRC domestic company into the SPV; (ii) subsequent equity financing by such SPV
outside of the PRC; (iii) capital reduction; and (iv) share transfers or share swaps. Subject to
completion of the aforesaid registration, payment of dividends, profits and other payments to such
SPV will be permitted.
(b) The Relevant PRC Residents are required to repatriate, within 180 days, distributed dividends or
profits which such Relevant PRC Residents receive from a SPV and/or income deriving from
changes in their shareholdings in such SPV.
(c) Failure by such Relevant PRC Residents to comply with Notice 75 would subject the Relevant PRC
Residents to certain penalties, and may in turn affect the ability of the FIE to repatriate its revenues
to the relevant SPV in the form of dividend income or otherwise under the applicable PRC rules on
foreign exchange control.
Liang Gong Zeng, Dai Feng Yu, Li Chun Yang and Li Bin, who are PRC-resident shareholders and have
control over our Company for the purposes of Notice 75, are deemed Relevant PRC Residents under
Notice 75. Therefore, they are required to repatriate, within 180 days, distributed dividends or profits they
receive from our Company and/or income deriving from changes in their shareholdings in our Company.
In addition, they are required to complete the aforesaid registration with the local SAFE with regard to
their ownership of our Company, as well as changes in their ownership of our Company in connection
with the Restructuring Exercise in compliance with the requirements of Notice 75.
Liang Gong Zeng, Dai Feng Yu, Li Chun Yang and Li Bin have completed the aforesaid registration with
the local SAFE with regard to their ownership of our Company through Giant Yield Global, Dawn Vitality,
Oriental Eagle and Inventive Result Enterprises.
Notwithstanding that our Company and the relevant PRC residents, namely, Liang Gong Zeng, Dai Feng
Yu, Li Chun Yang and Li Bin, have complied with all the relevant PRC laws and regulations on foreign
exchange control as at the date of this Prospectus, there is no assurance that the current PRC laws and
regulations on foreign exchange control will not be changed or even tightened in the future. In the event
that there is a further tightening of the PRC laws and regulations on the foreign exchange control, the
ability of Hunan Anchun to repatriate such revenues to our Company in the form of dividend income or
otherwise may be adversely affected.
PRC tax polices may have an effect on the dividends declared by Hunan Anchun
Under the Enterprise Income Tax Law of the PRC and its implementation regulations, the dividends from
the PRC companies to their foreign shareholders are subject to a withholding tax generally at a rate of
10%, unless it is entitled to tax incentives or tax exemption under the relevant tax treaties. Pursuant to the
Avoidance of Double Taxation Agreement between Singapore and China
dated 11 July 2007 and the Circular in
relation to How to Understand and Determine “Beneficial Owner” under Taxation Conventions
dated 27 October 2009 issued by the State Taxation
Administration of PRC, the withholding tax rate on the dividend distribution by the foreign investment
enterprise shall be 5% of the total dividend declared if the beneficial owner of the dividends is a company
that holds at least 25% of the share capital of the company paying the dividend. In the event that a
company is not considered as a beneficial owner of the dividends by the local tax bureau, the preferential
tax rate on the dividends distribution does not apply and the withholding tax rate shall be 10% instead.
Therefore, if our Company is not considered as the beneficial owner of the dividend by the local tax
authorities, our Company will be subjected to a withholding tax rate of 10%.
However, there is no assurance that our Company will be eventually deemed as the beneficial owner of
the dividends by the local tax authorities and entitled to the preferential 5% withholding tax rate as
aforementioned. In the event that such preferential 5% withholding tax rate does not apply, it may affect
the amount of dividends paid out by Hunan Anchun, and therefore our Group’s financial performance may
be adversely affected.
45
RISKS RELATING TO AN INVESTMENT IN OUR SHARES
There is no prior market for our Shares and the Invitation may not result in an active or liquid
market for our Shares
Prior to this Invitation, there has been no public market for our Shares. The SGX-ST has approved our
application to list our Shares on the SGX-ST. However, we cannot assure you that an active public
market will develop or be sustained after the Invitation. Active, liquid trading markets generally result in
lower price volatility and more efficient execution of buy and sell orders for investors. Liquidity of a
securities market is often a function of the volume of the underlying shares that are publicly held by
unrelated parties.
The Invitation Price has been determined through a book-building exercise and negotiations between our
Company, the Vendors, the Manager, the Underwriter and Placement Agent, and may not be indicative of
prices that will prevail in the trading market. You may not be able to resell your Shares at or above the
Invitation Price. Volatility in the trading price of our Shares may be caused by factors outside our control
and may be unrelated or is disproportionate to our financial performance.
Our share price may be volatile in future which could result in substantial losses for investors
purchasing Shares pursuant to the Invitation
The trading price of our Shares may fluctuate significantly and rapidly after the Invitation as a result of,
among others, the following factors, some of which are beyond our control:-
(i) variations of our operating results;
(ii) changes in securities analysts’ estimates of our financial performance;
(iii) announcements by us of significant acquisitions, strategic alliances or joint ventures;
(iv) additions or departures of key personnel;
(v) fluctuations in stock market prices and volume;
(vi) involvement in litigation; and
(vii) changes in general economic and stock market conditions.
Future sale or issuance of Shares could adversely affect our share price
Any future sale, availability or issuance of Shares can have a downward pressure on our share price. The
sale of a significant amount of Shares in the public market after the Invitation, or the perception that such
sales may occur, could materially and adversely affect the market price of our Shares. These factors also
affect our ability to sell additional equity securities. Except as otherwise described in the section entitled
“Moratorium” of this Prospectus, there will be no restriction on the ability of our existing Shareholders to
sell their Shares either on the SGX-ST or otherwise.
Negative publicity which includes those relating to any of our Directors, Key Executives or
Substantial Shareholders may adversely affect our share price
Negative publicity or announcement relating to any of our Directors, Key Executives or Substantial
Shareholders may adversely affect the market perception or the share performance of our Company,
whether or not it is justified. Examples of these include unsuccessful attempts in joint venture,
acquisitions or takeovers, or involvement in insolvency proceedings.
We may require additional funding for our growth plans, and such funding may result in a dilution
of your investment
We attempted to estimate our funding requirements in order to implement our growth plans as set out in
the section entitled “Prospects, Business Strategies and Future Plans” of this Prospectus.
46
In the event that the costs of implementing such plans exceed these estimates significantly or that we
come across opportunities to grow through expansion plans which cannot be predicted at this juncture,
and our funds generated from our operations prove insufficient for such purposes, we may need to raise
additional funds to meet these funding requirements.
These additional funds may be raised by issuing equity or debt securities or by borrowing from banks or
other resources. We cannot ensure that we will be able to obtain any additional financing on terms that
are acceptable to us, or at all. If we fail to obtain additional financing on terms that are acceptable to us,
we will not be able to implement such plans fully. Such financing even if obtained, may be accompanied
by conditions that (i) increase our vulnerability to general adverse economic and industry conditions, (ii)
limit our ability to pay dividends or require us to seek consent for the payment of dividends, (iii) require us
to dedicate a portion of our cash flow from operations to payments of our debts, which would
consequently reduce the availability of our cash flow to fund capital expenditures, working capital
requirements and other general corporate purposes, or (iv) restrict our freedom to operate our business
by requiring lender’s consent for certain corporate actions.
Further, in the event we raise additional funds by way of a limited placement or by a rights offering or
through the issuance of new shares, any Shareholders who are unable or unwilling to participate in such
an additional round of fund raising may suffer dilution in their investment.
Investors may find it difficult to commence legal action in Singapore or enforce a Singapore
judgement against our Group or management
Our Group’s operations and significant assets are located outside Singapore. Our management
comprises persons who are non-residents of Singapore and whose substantial assets are located outside
Singapore.
Accordingly, Shareholders may encounter difficulties in effecting service of process in Singapore for
commencement of a legal action against our Group or management, or the enforcement of a Singapore
judgement against the assets of our Group or our management.
Investors in our Shares would face immediate and substantial dilution in the Adjusted NAV per
Share and may experience future dilution
Our Invitation Price of 28.0 cents is higher than our Group’s Adjusted NAV per share of 10.5 cents based
on the post-Invitation issued share capital. If we were liquidated immediately following this Invitation, each
investor subscribing to this Invitation would receive less than the price they paid for their Shares. Please
refer to the section entitled “Dilution” of this Prospectus for further details.
Control by our Controlling Shareholder, Ace Sense, who will beneficially own approximately 21.4%
of our enlarged share capital after the Invitation, may limit your ability to influence the outcome of
decisions requiring the approval of Shareholders
After the completion of the Invitation, our Controlling Shareholder, Ace Sense (wholly-owned by our Non-
Executive Director, Xie Ming, who is the daughter of our Executive Chairman and CEO, Xie Ding Zhong),
will beneficially own approximately 21.4% of our enlarged share capital after the Invitation. As a result,
Ace Sense will be able to significantly influence all matters requiring approval by our Shareholders. Such
concentration of ownership will place it in a position to affect significantly our corporate actions such as
mergers or takeover attempts (notwithstanding that the same may be synergistic or beneficial to our
Group) in a manner that could conflict with the interests of our public Shareholders.
47
EXCHANGE RATES
The reporting currency of our Group is RMB. The following table sets forth, for the financial periods
indicated, the exchange rate of RMB to one Singapore dollar, based on the average of the closing
exchange rates on the last trading day of each month during each financial period. Where applicable, the
exchange rates in this table are used for our Company’s financial statements disclosed elsewhere in this
Prospectus:-
RMB / S$ 1.00
Average(1) Closing
FY2007 5.049 5.081

FY2008 4.918 4.724
FY2009 4.703 4.870
1Q2009 4.523 4.496
1Q2010 4.868 4.877
The table below sets forth the highest and lowest exchange rates of RMB to one Singapore dollar for
each month for the six months prior to the Latest Practicable Date of this Prospectus. The table below
indicates how much RMB can be bought with one S$:-
RMB / S$ 1.00
Highest Lowest
March 2010 4.905 4.855

April 2010 4.989 4.874
May 2010 4.971 4.816
June 2010 4.939 4.876
July 2010 4.980 4.856
August 2010 5.027 4.976
As at the Latest Practicable Date, the exchange rate was S$1.00 = RMB5.049.
The above exchange rates have been calculated with reference to exchange rates quoted from
Bloomberg L.P.(2) and should not be construed as representations that the RMB or S$ amounts (as the
case may be) actually represent such S$ or RMB amounts, could have been, or could be, converted into
S$ or RMB (as the case may be) at any particular rate, the rate indicated above or at all.
For the convenience of potential investors, certain parts of this Prospectus contain translations of RMB
amounts into S$ and vice versa. Unless otherwise noted, the exchange rate used for these translations
was S$1.00 = RMB5.049.
Notes:-
(1) The average exchange rates between RMB and S$ are calculated using the average of the exchange rates on the last day of
each month during the financial period year or period.
(2) Source: Bloomberg L.P.. Please note that Bloomberg L.P. has not consented to the inclusion of the information and thereby is
not liable for such information under Section 253 and 254 of the Securities and Futures Act. Our Directors are aware that
Bloomberg L.P. does not guarantee or assume any responsibility that the information is accurate, current or reliable, or may
be used for any purpose other than for general reference. We are unable to verify the accuracy of the contents of the relevant
information and have included such information in its proper form and context in this Prospectus.
48
DIVIDEND POLICY
No dividend has been declared by our Company since incorporation. The dividends declared by Hunan
Anchun in FY2007, FY2008 and FY2009 were RMB1.23 million, RMB25.4 million and RMB48.0 million
respectively. The aforementioned dividends relate to past profits attributable to the existing shareholders
of Hunan Anchun prior to the Restructuring Exercise. The dividends declared in FY2007 and FY2008
have been fully paid. The dividend declared in FY2009 has been partially paid, of which RMB36.2 million
remains unpaid as at the date of this Prospectus. Please refer to the sections entitled “Capitalisation and
Indebtedness” and “Interested Person Transactions” of this Prospectus for more details.
We currently do not have a formal dividend policy. Past dividends declared are not indicative of future
dividend payment. There can be no assurance that dividends will be paid in the future or as to the timing
or amount of any dividends that are to be paid in the future. The declaration and payment of future
dividends will depend upon our operating results, financial conditions, other cash requirements including
capital expenditure, the terms of borrowing arrangements (if any), dividend yield of comparable
companies (if any) listed in Singapore and other factors deemed relevant by our Directors.
We expect to declare dividends either in S$ or RMB and make payment of the dividends in S$.
Shareholders should note that there will be exchange rate exposure in respect of dividends declared in
RMB and subsequently paid to them in S$ equivalent amounts. Shareholders whose Shares are held
through CDP will receive their dividends in S$. CDP will make the necessary arrangement to convert
these dividends received from our Company in RMB into S$ equivalent at such foreign exchange rate as
CDP may determine for onward distribution to such Shareholder entitled thereto. Neither our Company
nor CDP will be liable for any loss howsoever arising from the conversion of the dividend entitlement of
Shareholders holding their Shares through CDP from RMB into S$ equivalent.
49
CAPITALISATION AND INDEBTEDNESS
The following table shows our cash and cash equivalents, capitalisation and indebtedness of our Group:-
(a) on an actual basis as at 31 March 2010 based on our Unaudited Combined Financial Statements;
(b) on an actual basis as at 1 September 2010 (being a date no earlier than 60 days prior to the
lodgement of the Prospectus) based on our Group’s management accounts; and
(c) as adjusted for the Conversion and net proceeds from the issue of New Shares pursuant to the
Invitation and application of the net proceeds from the Invitation.
You should read this table in conjunction with the Accountants’ Reports as set out in Appendix A and
Appendix B of this Prospectus and the section entitled “Management’s Discussion and Analysis of
Results of Operations and Financial Position” of this Prospectus.
As adjusted
for the net
proceeds
As at from the
As at 1 September issue of the
RMB ’000 31 March 2010 2010 New Shares (6)
Cash and cash equivalents 79,853 124,157 254,780
Indebtedness
Convertible loan (1) 14,967 – –
Bank loans (interest-bearing, secured and non-guaranteed) (2)
4,875 – –
Other loans (interest-free, non-secured and non-guaranteed) (3) 16,485 73,395 73,395
Dividends payables (4) 43,200 36,200 36,200
Total indebtedness 79,527 109,595 109,595

Shareholders’ equity 131,475 163,208 293,831
Total capitalisation and indebtedness 211,002 272,803 403,426
Net gearing ratio (5) net cash net cash net cash
Notes:-
(1) Based on the terms of the convertible loan agreement, the convertible loan was automatically converted to 800 ordinary
shares of our Company prior to the Invitation. Pursuant to the Conversion, the Pre-IPO Investors have received an aggregate
of 800 Shares (prior to the Sub-division) and the convertible loan settled. Please see the section entitled “Restructuring
Exercise” of this Prospectus for further details.
(2) The bank loans were secured by the pledge of certain properties. Upon the full repayment of the bank loans, such
encumbrances on our properties were released on 25 August 2010. Further details of our banking facilities are set out in the
section entitled “Liquidity and Capital Resources” of this Prospectus.
(3) Other loans as at 31 March 2010 pertained to (i) loan of approximately RMB2.0 million from one of the Pre-IPO Investors
(which has been settled in May 2010); and (ii) Hunan Anchun‘s past shareholders’ loans of approximately RMB14.5 million.
These past shareholders refer to the shareholders of Hunan Anchun prior to the Restructuring Exercise, namely the
registered shareholders Xie Ding Zhong, Li Chun Yang, Jiang Jing Fu and Yan Chao Jian and certain beneficiaries whose
shareholding interests in Hunan Anchun were held in trust by the registered shareholders. As part of the negotiations
between the Pre-IPO investors and Hunan Anchun‘s past shareholders, the past shareholders had agreed to provide the
RMB75 million funds to be received for the sale of the entire share capital of Hunan Anchun back to Hunan Anchun as loans
to supplement the working capital of our Group. Please refer to the section entitled “Restructuring Exercise” for more
information. As at 1 September 2010, such past shareholders’ loans has increased to approximately RMB73.4 million (as
adjusted for foreign exchange translation) from 31 March 2010 due to receipt of the remaining loan proceeds pursuant to the
loan agreements between Hunan Anchun and the past shareholders as aforementioned. These loans are renewable on a
yearly basis up to five years by Hunan Anchun, and are interest-free for the first year. Please refer to the section entitled
“Interested Person Transactions” of this Prospectus for further details.
50
(4) Dividends payables as at 31 March 2010 pertained to the remaining RMB43.2 million dividends payables to past
shareholders of Hunan Anchun in respect of the RMB48.0 million dividends declared by Hunan Anchun in FY2009 (of which
RMB4.8 million has been paid in 1Q2010). Another RMB7.0 million has been paid subsequently and accordingly, the amount
of remaining dividends payables as at the Latest Practicable Date stood at RMB36.2 million. The aforementioned dividends
relate to past profits attributable to the existing shareholders of Hunan Anchun prior to the Restructuring Exercise. The
directors of Hunan Anchun had considered the adequacy of the liquidity and resources of Hunan Anchun prior to declaring
such dividends (the RMB48 million dividends declared in FY2009 represented 63.9% and 83.0% of the Group’s net profits
and net cash flow from operating activities for FY2009 respectively). Based on PRC rules, there is no time limit for the
payment of dividends to shareholders. Accordingly, pursuant to an agreement between Hunan Anchun and its past
shareholders dated 18 June 2010, it was agreed that (i) Hunan Anchun will withhold the remaining payments for the RMB36.2
million dividends payables for a year from the date of such agreement and such amount due will be interest-free during the
year; and (ii) in the event that such amount due is extended beyond the first year, interest will be charged based on the
annual prevailing benchmark lending rates of the People’s Bank of China. Please refer to the sections entitled “Dividend
Policy” and “Interested Person Transactions” of this Prospectus for further details.
(5) Net gearing ratio is computed based on (indebtedness – cash and cash equivalents) divided by shareholders’ equity.
(6) Translated based on an exchange rate of RMB5.049:S$1.00.
In respect of the abovementioned past shareholders’ loans of approximately RMB73.4 million and
dividend payables of RMB36.2 million, our Group expects to repay these balances in the future through
existing working capital and future cashflows generated from operating activities.
Save as disclosed above and in the section entitled “Material Commitments and Contingencies” of this
Prospectus, as at the Latest Practicable Date, our Group has no other borrowings or indebtedness and
liabilities under acceptances (other than normal trading bills) or acceptance credits, mortgages, charges,
obligations under finance leases, guarantees or other material contingent liabilities.
51
DILUTION
Dilution is the amount by which the Invitation Price paid by the applicants for our Invitation Shares in this
Invitation exceeds our NAV per Share of our Group immediately after this Invitation. Based on the
Unaudited Combined Financial Statements, our NAV per Share as at 31 March 2010, as adjusted for the
Conversion of the convertible loan, but before adjusting for the net proceeds from the Invitation (the
“Adjusted NAV”) and based on the pre-Invitation share capital of 400,000,000 was 6.8 cents per Share. (1)
Note:-
(1) The Adjusted NAV per Share was translated based on the exchange rate of RMB5.049:S$1.00 as at the Latest Practicable
Date.
Based on the issue of 105,000,000 New Shares at the Invitation Price pursuant to the Invitation and after
deducting estimated listing expenses incurred in connection with the Invitation, the Adjusted NAV of our
Group as at 31 March 2010 after the Invitation would have been 10.5 cents per Share as based on the
Unaudited Combined Financial Statements. This represents an immediate increase in Adjusted NAV of
3.7 cents per Share to our existing Shareholders and an immediate dilution of 17.5 cents per Share to
our new public investors. The following table illustrates this per Share dilution:-
As at
31 March 2010
(cents)
Invitation Price per New Share 28.0

Adjusted NAV per Share before Invitation based on pre-Invitation share capital
of 400,000,000 Shares 6.8
Increase in Adjusted NAV per Share pursuant to the Invitation 3.7
Adjusted NAV per Share after the Invitation 10.5
Dilution in Adjusted NAV per Share to new public investors 17.5
The following table summarises the total number of Shares acquired by our Directors, Substantial
Shareholders and their Associates at any time during the past three years before the Latest Practicable
Date, the total consideration paid to us and the average price per Share paid by our Directors, Substantial
Shareholders, other Shareholders (after adjusting for the Restructuring Exercise and Sub-division) and by
our new public investors pursuant to the Invitation:-
Number of
Shares Total Average price
Acquired Consideration per Share
S$ (cents)
Directors
Xie Ding Zhong – – –
Liang Gong Zeng (1)
– – –
Dai Feng Yu (2)
– – –
Xie Ming (3)
– – –
Ma Ong Kee (6),(11)
– – –
Andrew Bek (9)
– – –
Pan De Run – – –
Lee Gee Aik – – –
Tan Min-Li – – –
52
Number of
Shares Total Average price
Acquired Consideration per Share
S$ (cents)
Substantial Shareholders (other than Directors)

Ace Sense(3) 108,000,000 13,500 0.01
Giant Yield Global(1) 45,600,000 5,700 0.01
Dawn Vitality(2) 41,200,000 5,150 0.01
Oriental Eagle (4)
52,000,000 6,500 0.01
Inventive Result Enterprises (5)
41,200,000 5,150 0.01
Sinostate Management (6), (11)
24,000,000 3,000 0.01
Go Power (7), (11)
16,400,000 3,610,899 22.02
Other Shareholders
China XLX(8), (11) 19,600,000 4,315,561 22.02
Vision Top (6), (11)
13,104,000 2,885,231 22.02
Able Gallery (9), (11)
16,000,000 2,000 0.01
Other Pre-IPO Investors (10), (11)
22,896,000 5,041,230 22.02
New public investors 130,000,000 36,400,000 28.00
Notes:-
(1) Giant Yield Global is an investment holding company incorporated in the British Virgin Islands. Liang Gong Zeng, who is our
Executive Director and COO, owns 25.41%, with the remaining 74.59% held on trust by him for the 103 beneficiaries under
the Trust Agreements. Please refer to the section entitled “Trust Agreements” of this Prospectus for details.
(2) Dawn Vitality is an investment holding company incorporated in the British Virgin Islands. Our Executive Director, Ms Dai
Feng Yu, owns 25.24%, with the remaining 74.76% held on trust by her for the 143 beneficiaries under the Trust Agreements.
Please refer to the section entitled “Trust Agreements” of this Prospectus for details.
(3) Ace Sense is an investment holding company incorporated in the British Virgin Islands. Our Non-Executive Director, Xie Ming,
who is the daughter of our Executive Chairman and CEO, Xie Ding Zhong, is deemed interested in the Shares held by Ace
Sense by virtue of her 100% shareholding interest held in Ace Sense.
(4) Oriental Eagle is an investment holding company incorporated in the British Virgin Islands. Our Head of Sales and Marketing
Department, Li Chun Yang, owns 31.57%, with the remaining 68.43% held on trust by him for the 11 beneficiaries under the
Trust Agreements. Please refer to the section entitled “Trust Agreements” of this Prospectus for details.
(5) Inventive Result Enterprises is an investment holding company incorporated in the British Virgin Islands. Our Head of System
Design Department, Li Bin, owns 24.90%, with the remaining 75.10% held on trust by him for the 140 beneficiaries under the
(6) Sinostate Management and Vision Top are investment holding companies incorporated in the British Virgin Islands. Sinostate
Management and Vision Top are wholly owned by Ma Ong Kee, who is our Non-Executive Director.
(7) Go Power is an investment company incorporated in the British Virgin Islands. It is a substantial shareholder of China XLX
which owns approximately 28.1% of the shareholding interest in China XLX, a Singapore- and Hong Kong-listed company.
Yan Yun Hua, a PRC natural person, owns 100% of the shareholding interest in Go Power, of which approximately 12.7% is
held for her own beneficial interest and approximately 87.3% is held by her on trust for 1,463 beneficiaries, comprising of
PRC natural persons or entities, being current and past employees/business associates of China XLX and their related
persons. Go Power is deemed interested in the 4.9% shareholding interest held by China XLX in our Company. Go Power and
its PRC shareholders are not related to our Directors, Key Executives and Controlling Shareholders of our Company.
(8) China XLX is a company dual-listed on both SGX-ST and Hong Kong Stock Exchange, which is not related to the Directors,
Key Executives and Controlling Shareholders of our Company.
(9) Able Gallery is an investment holding company incorporated in the British Virgin Islands. Able Gallery is wholly owned by
Andrew Bek, who is the alternate Director to our Non-Executive Director, Ma Ong Kee.
53
(10) Other Pre-IPO Investors include SkyVen, Naresh Nanubhai Desai, Wong Chao Hsiung and Quek Yiang Hang. SkyVen is a
company incorporated in Singapore. It is a private equity investment fund, established and managed in Singapore. Its
shareholders comprise mainly institutional investors and high net worth individuals. The investment manager is SkyVen Asset
Management Pte Ltd. The shareholders of SkyVen and SkyVen Asset Management Pte Ltd (which is owned by Peter Tan
Boon Huan and Chew Ghim Bok) are not related to any of our Directors, Key Executives or Controlling Shareholders of our
Company.
Naresh Nanubhai Desai, Wong Chao Hsiung and Quek Yiang Hang are individual investors who are not related to our
Directors, Key Executives and Controlling Shareholders of our Company.
(11) Total consideration paid by the Pre-IPO Investors includes the monies paid for the subscription of shares in our Company and
the investment in our Company through the convertible loan agreement, which was translated based on an exchange rate of
RMB5.049:S$1.00. Please refer to the section entitled “Restructuring Exercise” of this Prospectus for more details.
54
SHARE CAPITAL
Our Company (Registration No. 200920277C) was incorporated in Singapore on 29 October 2009 under
the Companies Act as a private company limited by shares under the name of “Anchun Holdings Pte.
Ltd.”. On 9 September 2010, we changed our name from “Anchun Holdings Pte. Ltd.” to “Anchun
International Holdings Pte. Ltd.” so as to align with our strategic direction of business development.
As at the Latest Practicable Date, the issued share capital of our Company was S$16,049,200 comprising
50,000 ordinary shares.
Pursuant to the written shareholders’ resolutions dated 9 September 2010 and 12 October 2010, in lieu of
extraordinary general meetings, our shareholders approved, inter-alia, the following:-
(a) the sub-division of each ordinary share in the existing issued share capital of our Company into
8,000 ordinary shares;
(b) conversion of our Company into a public limited company and the change of our name to “Anchun
International Holdings Ltd.”;
(c) the adoption of a new set of Articles of Association (the “Articles”);
(d) the issue of 105,000,000 New Shares pursuant to the Invitation which when fully paid, allotted and
issued, will rank pari passu in all respects with the existing issued Shares (the “Issue of New
Shares”); and
(e) that our Directors be authorised to: (i) allot and issue Shares in our Company (other than the New
Shares); and (ii) issue convertible securities and any Shares in our Company pursuant to the
conversion of such convertible securities (whether by way of rights, bonus or otherwise) at any time
and from time to time thereafter upon such terms and conditions, whether for cash or otherwise,
and for such purposes and to such persons as our Directors may think fit for the benefit of our
Company, provided that the aggregate number of Shares and convertible securities to be issued
pursuant to such authority shall not exceed 50% of the post-Invitation issued shares of our
Company (excluding treasury shares) and provided that the aggregate number of Shares to be
issued other than on a pro-rata basis to the then existing shareholders of our Company shall not
exceed 20% of the post-Invitation issued share capital of our Company, and, unless revoked or
varied by our Company in general meeting, such authority shall take effect from the date of listing
of our Shares on the SGX-ST and shall continue to be in force until the conclusion of our next
annual general meeting or the date by which our next annual general meeting is required by law or
by our Articles to be held, whichever is earlier.
For the purposes of this resolution, and pursuant to Rules 806(3) and 806(4) of the Listing Manual,
“post-Invitation issued share capital” shall mean the enlarged issued and paid-up share capital of
our Company after the completion of the Invitation, after adjusting for: (i) new Shares arising from
the conversion or exercise of any convertible securities; (ii) new Shares arising from the exercise of
share options or the vesting of share awards outstanding or subsisting at the time such authority is
given, provided the options or awards were granted in compliance with the Listing Manual; and (iii)
any subsequent consolidation or sub-division of Shares.
As at the date of this Prospectus, our Company has only one class of shares in the capital of our
Company, being the Shares. The voting rights and privileges of our Shares are stated in our Articles, a
summary of which is set out in Appendix D entitled “Selected Extracts of our Articles of Association” of
this Prospectus.
There are no founders, management, deferred or unissued Shares reserved for any purpose. The New
Shares shall have the same interest and voting rights as our existing issued Shares that were issued
prior to this Invitation and there are no restrictions to the free transferability of our Shares.
55
Details of changes in our issued and paid-up share capital since as at 31 December 2009, and
immediately after the Invitation are as follows:-
Number of
Shares S$
Issued and paid-up share capital as at 31 December 2009 9,200 9,200

Increase in issued and paid-up share capital on 3 May 2010 40,000 40,000
Issue of new ordinary shares pursuant to the Conversion on 2 August 2010 800 16,000,000
Share capital prior to Sub-division 50,000 16,049,200

Sub-division 400,000,000 –
New Shares to be issued pursuant to the Invitation 105,000,000 29,400,000
Post-Invitation issued and paid-up share capital 505,000,000 45,449,200
Save as set out in this section and the subsequent paragraph, there was no change in the issued and
paid-up share capital of our Company or our Subsidiary within the three years preceding the date of
lodgement of this Prospectus:-
Our Company
Issue Price Number Resultant
Purpose of Issue or S$ per of shares Issued
Date of Issue investment)/Consideration Share issued(1) Capital
(S$)
29 October 2009 Issued and fully paid-up Shares as at

incorporation 1.00 1 1.00
3 November 2009 Increase in capital contribution 1.00 999 1,000
18 December 2009 Increase in capital contribution 1.00 8,200 9,200
3 May 2010 Increase in capital contribution 1.00 40,000 49,200
2 August 2010 Conversion of the Loan 20,000 800 16,049,200
Note:-
(1) Prior to the Sub-division.
56
Hunan Anchun
Increase Resultant
in Paid-up Paid-up
Date of Issue Purpose of Issue Capital Share Capital
(RMB) (RMB)
28 September 1998 Issued and fully paid-up Shares as at incorporation 1,064,000 1,064,000
18 November 2001 Increase in capital contribution 11,236,000 12,300,000
31 December 2008 Increase in capital contribution 19,700,000 32,000,000
24 March 2010 Increase in capital contribution 43,000,000 75,000,000
Save as disclosed in this section and the foregoing paragraph, no share in or debenture of our Company
or any of our Subsidiary has been issued, or is proposed to be issued, as fully or partly paid-up for cash,
or for a consideration other than cash, within the three years preceding the date of lodgement of this
Prospectus.
Save as disclosed in this section, no option to subscribe for or purchase shares in or debentures of our
Company or our Subsidiary has been granted to, or was exercised by any person.
57
RESTRUCTURING EXERCISE
Our Group was formed through the Restructuring Exercise in preparation for the listing of our Company
on the SGX-ST. Pursuant to the Restructuring Exercise, our Company became the holding company of
our Group.
The restructuring steps were as follows:-
(a) Establishment of our Company

Our Company was incorporated on 29 October 2009 in Singapore as an investment vehicle with an
issued share capital of S$1.00, comprising 1 ordinary share, which was held by an unrelated
nominee.
(b) First share subscription in the share capital of our Company

On 3 November 2009, the unrelated nominee transferred his entire interest in our Company to Ace
Sense, which is wholly-owned by Xie Ming, a US citizen. In addition, 999 shares were allotted and
issued to Sinostate Management (wholly-owned by Ma Ong Kee, our Non-Executive Director), Ace
Sense (wholly-owned by Xie Ming, our Non-Executive Director, who is the daughter of our
Executive Chairman and CEO, Xie Ding Zhong), Oriental Eagle (wholly-owned by Li Chun Yang,
our Key Executive), Dawn Vitality (wholly-owned by Dai Feng Yu, our Executive Director), Inventive
Result Enterprises (wholly-owned by Li Bin, our Key Executive) and Giant Yield Global (wholly-
owned by Liang Gong Zeng, our Executive Director and COO) (collectively, the “BVI
Shareholders”), resulting in the shareholding interests in our Company being 28.0% held by
Sinostate Management, 27.0% held by Ace Sense, 13.0% held by Oriental Eagle, 10.3% held by
Dawn Vitality, 10.3% held by Inventive Result Enterprises and 11.4% held by Giant Yield Global,
respectively.
Pursuant to the Trust Agreements dated 2 November 2009, Li Chun Yang, Dai Feng Yu, Li Bin and
Liang Gong Zeng were appointed as trustees to each of Oriental Eagle, Dawn Vitality, Inventive
Result Enterprises and Giant Yield Global to hold the shareholding interests in each of the
abovementioned BVI companies on trust for 397 beneficiaries who are existing and past
employees of our Group as well as the related persons of these employees. Please refer to the
section entitled “Trust Agreements” of this Prospectus for details.
(c) Acquisition of Hunan Anchun

Pursuant to an equity transfer agreement dated 20 November 2009, our Company acquired the
entire equity interests of Hunan Anchun from four registered shareholders of Hunan Anchun,
namely, Xie Ding Zhong (our Executive Chairman and CEO, 50.25%), Li Chun Yang (our Key
Executive, 16.4%), Jiang Jing Fu (an ex-employee of Hunan Anchun, 16.4%) and Yan Chao Jian
(an ex-employee of Hunan Anchun, 16.95%), who held the shareholding interests of Hunan
Anchun in trust for 398 beneficiaries who are existing and past employees of Hunan Anchun as
well as the related persons of these employees, for a total consideration of RMB75.0 million (the
“Acquisition”). The consideration of RMB75.0 million for the Acquisition was funded through the
Convertible Loan Investment as described in paragraph (e) below. Jiang Jing Fu and Yan Chao Jian
previously held management roles in Hunan Anchun, but had subsequently relinquished
management roles when they retired in 2009 due to their advanced age. In addition, Jiang Jing Fu
and Yan Chao Jian had never held the role of legal representative of Hunan Anchun, where such
role was held by Xie Ding Zhong since its inception.
The Acquisition was carried out on an arm’s length basis, and the purchase consideration was
based on, inter alia, the valuation of approximately RMB78.4 million by an independent valuer
Hunan Rongxin Asset Valuation Co., Ltd. on 18 November 2009,
which had taken into account, inter alia, the NAV of Hunan Anchun of approximately RMB82.4
million as at 31 January 2009. The purchase consideration was fully paid in cash by May 2010.
Following the completion of the Acquisition, Hunan Anchun became a wholly-owned subsidiary of
our Company.
58
The relevant PRC legal requirements
On 8 August 2006, the Ministry of Commerce (the “MOC”), China Security and Regulatory
Commission (the “CSRC”), State Administration for Foreign Exchange
(the “SAFE”) and three other PRC authorities promulgated the Rules on the
Mergers and Acquisitions of Domestic Enterprise by Foreign Investors
(“Provision 10”), which came into effect on 8 September 2006, and was revised on 22
June 2009.
Article 11 of Provision 10 provides that, where a PRC domestic entity or individual intends to take
over its domestic related entities through an offshore entity which is lawfully established or
controlled by such PRC domestic entity or individual, it shall be subject to the examination and
approval of the MOC. Articles 39 and 40 of Provision 10 provide that, the listing of offshore special
purpose vehicles (“SPV”), which are directly or indirectly established or controlled by the PRC
domestic entities or individuals, are subject to prior approval from the CSRC (the “CSRC
Approval”). “SPV” means an overseas company which is directly or indirectly controlled by a PRC
domestic company or natural person, for the purpose of listing abroad by using its PRC domestic
company’s interests. Accordingly, if it is established that the offshore entity is a SPV as defined in
Articles 39 and 40, pursuant to Article 11 of Provision 10, the acquisition of related PRC domestic
entities by the SPV will need to be approved by the MOC.
Further, on 21 September 2006, the CSRC promulgated the Guidelines on Domestic Enterprises
Indirectly Overseas Issuing or Listing and Trading Their Securities
(the “CSRC Permit Guidelines”), which provides that the listing of
SPVs referred to in Articles 39 and 40 of Provision 10 are subject to the CSRC Approval.
In addition, the MOC authorises the provincial level authority to verify and approve foreign-invested
enterprises in the encouraged category and permitted category set out in the Catalogue for the
Guidance of Foreign Investment Industries (the “Catalogue”) with a total investment value of less
than US$100 million.
Compliance with PRC legal requirements

Based on a notice issued by the People’s Government of Hunan Province on 11 August 2009,
Haihua Yongtai and Jingtian Gongcheng have opined that the Administrative Committee of
Changsha National Hi-tech Industrial Development Zone (the
“Committee”) is an authorised governmental agency to verify and approve the establishment or the
changes of foreign-invested enterprises in the encouraged category and permitted category set out
in the Catalogue with a total investment value of less than US$100 million as well as supervise the
enforcement of relevant laws and regulations, including Provision 10.
On 26 November 2009, given that Hunan Anchun’s total investment is less than US$100 million,
the Acquisition was approved by the Committee and Hunan Anchun was changed to a wholly
foreign-owned enterprise on 31 December 2009.
In respect of the applicability of Article 11 of Provision 10, Haihua Yongtai and Jingtian Gongcheng,
have also opined that, pursuant to the confirmation letters in respect of the applicable laws and
regulations to the Acquisition issued by the Committee on 9 December 2009 and Department of
Commerce of Hunan Province (the “DCHP”) on 30 December 2009 respectively,
given that the foreign investors, being Ma Ong Kee (a Malaysian Citizen), through Sinostate
Management, and Xie Ming (a US citizen), through Ace Sense, collectively hold 55% of
shareholding interests in our Company, and that our Company is not set up and controlled by
domestic residents, our Company does not fall within the definition of SPV in Provision 10.
Accordingly, the Acquisition does not require any approvals from MOC or CSRC pursuant to
Provision 10, and Article 11 of Provision 10 does not apply to the Restructuring Exercise.
59
(d) Second share subscription in the share capital of our Company
On 18 December 2009, the issued and paid-up share capital of our Company was increased to
S$9,200, comprising 9,200 ordinary shares, pursuant to a cash injection of S$8,200 by the BVI
Shareholders and one new BVI company, Vision Top, which is currently controlled by Ma Ong Kee,
our Non-Executive Director. Accordingly, the shareholding proportion in our Company was changed
to Vision Top (6.96%), Sinostate Management (14.78%), Ace Sense (29.35%), Oriental Eagle
(14.13%), Dawn Vitality (11.2%), Inventive Result Enterprises (11.2%) and Giant Yield Global
(12.39%).
(e) Third share subscription in the share capital of our Company and the convertible loan
investment
Pursuant to a convertible loan agreement dated 22 December 2009, supplemented by a deed of
accession and ratification dated 30 April 2010, it was agreed that:-
(i) the BVI Shareholders, Vision Top, Able Gallery, China XLX, Go Power, SkyVen, Naresh
Nanubhai Desai, Wong Chao Hsiung and Quek Yiang Hang shall subscribe for an aggregate
of 40,000 ordinary shares at S$1.0 per share in the share capital of our Company;
(ii) Vision Top, China XLX, Go Power, SkyVen, Naresh Nanubhai Desai, Wong Chao Hsiung and
Quek Yiang Hang shall invest RMB80.0 million (the “Loan”) in our Company through a
convertible loan (the “Convertible Loan Investment”); and
(iii) the Convertible Loan Investment shall be used for the Acquisition as described in paragraph
(c) above, and the balance shall be retained by our Group for working capital purposes. In
addition, the amount paid to the vendors of Hunan Anchun shall be immediately transferred
to Hunan Anchun as a loan. Please refer to the section entitled “On-going Interested Person
Transactions” of this Prospectus for details.
Subsequently, through a capital injection of S$40,000, the share capital of our Company was
increased from S$9,200, comprising 9,200 ordinary shares, to S$49,200, comprising 49,200
ordinary shares on 3 May 2010, and the resultant shareholding proportion in our Company was
changed to Ace Sense (27.44%), Sinostate Management (6.10%), Oriental Eagle (13.21%), Dawn
Vitality (10.47%), Inventive Result Enterprises (10.47%), Giant Yield Global (11.59%), Vision Top
(3.03%), Able Gallery (4.07%), China XLX (4.54%), Go Power (3.8%), SkyVen (3%), Naresh
Nanubhai Desai (1.8%), Wong Chao Hsiung (0.25%) and Quek Yiang Hang (0.25%)(1).
Note:-
(1) The figures do not add up to 100% due to rounding.
Conversion
Based on the terms of the convertible loan agreement, the convertible loan will be automatically
converted to 800 ordinary shares of our Company prior to the Invitation.
On 2 August 2010, our Company issued the conversion notices (as prescribed under the
Convertible Loan Investment) to Vision Top, China XLX, Go Power, SkyVen, Naresh Nanubhai
Desai, Wong Chao Hsiung and Quek Yiang Hang, pursuant to which the Loan was converted into
an aggregate of 800 shares in the share capital of our Company, which were allotted and issued to
Vision Top (146 shares), China XLX (218 shares), Go Power (182 shares), SkyVen (144 shares),
Naresh Nanubhai Desai (86 shares), Wong Chao Hsiung (12 shares) and Quek Yiang Hang (12
shares), respectively (the “Conversion”).
Following the Conversion, the resulting shareholding structure of our Company was Ace Sense
(27.00%), Sinostate Management (6.00%), Vision Top (3.28%), Able Gallery (4.00%), Oriental
Eagle (13.00%), Dawn Vitality (10.3%), Inventive Result Enterprises (10.3%), Giant Yield Global
(11.4%), China XLX (4.90%), Go Power (4.10%), SkyVen (3.24%), Naresh Nanubhai Desai
(1.94%), Wong Chao Hsiung (0.27%) and Quek Yiang Hang (0.27%).
60
It is noted that Go Power is an investment holding company incorporated in the BVI and ultimately
owned by unrelated PRC nationals. Yan Yun Hua, a PRC natural person, holds 12.7% beneficial
interest in Go Power, with the remaining 87.3% held in trust by Yan Yun Hua for certain
beneficiaries (PRC natural persons or entities) under a trust agreement. Accordingly, the
participation of Go Power in the Convertible Loan Investment has resulted in the change in the
direct shareholding of our Company held and controlled by non-PRC persons from 55.0% to 50.9%
after taking into account the shares issued and allotted to Go Power following the Conversion.
In addition, Go Power currently holds 28.1% interest in China XLX, which also participated in the
Convertible Loan Investment with a direct investment interest of 4.9%. Pursuant to Section 7(4A) of
the Act, as Go Power holds not less than 20% of voting rights in China XLX, Go Power (and Yan
Yun Hua) is deemed interested in China XLX’s 4.9% shareholding interest in our Company.
However, China XLX is a company dual-listed in Singapore and Hong Kong with its own self-
governing board of directors and management, and neither Go Power nor Yan Yun Hua holds a
majority interest in China XLX. Accordingly, neither Go Power nor Yan Yun Hua is considered to
have control over China XLX’s interests in our Company.
The Legal Advisers to our Company on the PRC Law, Haihua Yongtai Law Firm, has advised that
since Go Power and Yan Yun Hua are not related to our Company or the existing shareholders of
our Company, Article 11 of Provision 10 is not applicable with respect to the interests held and
controlled by Go Power and Yan Yun Hua in the share capital of our Company, and our Company is
not deemed to be the SPV as defined in the Articles 39 and 40 of Provision 10.
Notwithstanding the above-mentioned change to the shareholding structure, Haihua Yongtai and
Jingtian Gongcheng have both provided their confirmation that the above-mentioned change will
not have any impact on their respective initial legal opinions that the Acquisition does not require
any approvals from MOC or CSRC pursuant to Provision 10, and that Article 11 of Provision 10
does not apply to the Restructuring Exercise.
Accordingly, following the Restructuring Exercise as described above, save for the entry of Ace
Sense in place of Xie Ding Zhong, and the participation of the Pre-IPO Investors, the ultimate
shareholders of our Company remained substantively the same as those of Hunan Anchun prior to
the Acquisition. Please refer to the section entitled “Trust Agreements” of this Prospectus for more
details.
(f) Disposal of Hunan Anchun Biotech Co., Ltd. (“Anchun Biotech”)

Anchun Biotech was set up by Hunan Anchun as a wholly-owned subsidiary in December 2007
with an initial share capital of RMB2,000,000. It was engaged in the business of manufacture and
sales of health supplements. In order to streamline our Group’s business and resources for the
purpose of the Invitation, Hunan Anchun decided to dispose of all its equity interest in Anchun
Biotech and transfer certain intangible assets including 6 trademarks, 1 patent and 2 production
permits for health supplements which were registered under Hunan Anchun’s name but not
relevant to Hunan Anchun’s business (the “Intangible Assets”).
Pursuant to a sale and purchase agreement dated 12 October 2009, supplemented by a

supplemental agreement dated 8 January 2010, Hunan Anchun disposed all its equity interest in
Anchun Biotech and the Intangible Assets to Xie Ding Zhong (our Executive Chairman and CEO),
Yan Chao Jian (our ex-employee), Jiang Jing Fu (our ex-employee) and Li Chun Yang (our Key
Executive), at a consideration of RMB2,000,000. The consideration, which was fully paid by June
2010, was determined on a “willing buyer and willing seller” basis, and taking into account, inter
alia, the valuation reports dated 7 January 2010 issued by Changsha Gongli Asset Valuation Co.,
Ltd. appraising the value of Anchun Biotech and the Intangible Assets
to be approximately RMB1.9 million as at 30 September 2009. This transaction was carried out on
an arms’ length basis.
61
In addition, there was an amount owing from Anchun Biotech to Hunan Anchun of approximately
RMB745,000 relating to certain expenses previously paid on behalf of Anchun Biotech by Hunan
Anchun. Pursuant to an agreement between Hunan Anchun and Anchun Biotech dated 24 June
2010, Hunan Anchun agreed to waive the collection of such amount due from Anchun Biotech as a
gesture of goodwill (as Anchun Biotech is a new start-up, it has low cash balances and hence will
be unable to repay Hunan Anchun in the near term) and accordingly, there are no amounts owing
from Anchun Biotech to Hunan Anchun as at 30 June 2010. The above transaction was not carried
out on an arm’s length basis. Our Group does not expect to enter into any future transactions of the
above nature.
The disposal of Anchun Biotech did not result in any material financial impact to our Group. The
revenue of Anchun Biotech was approximately nil, RMB30,000 and RMB10,000 for FY2007,
FY2008 and FY2009, respectively. The loss after tax of Anchun Biotech was approximately nil,
RMB1.2 million and RMB0.5 million for FY2007, FY2008 and FY2009, respectively. In addition, our
Group recognised a gain on disposal of RMB1.7 million in FY2009 in relation to the disposal of
Anchun Biotech. Accordingly, had Anchun Biotech been disposed prior to the periods under review,
our Group’s profit after tax would have been RMB22.7 million, RMB22.5 million and RMB74.0
million for FY2007, FY2008 and FY2009 respectively, instead of RMB22.7 million, RMB21.3 million
and RMB75.2 million for FY2007, FY2008 and FY2009, respectively.
62
GROUP STRUCTURE
Our Group structure is as shown below:-
Our Company
100%
Hunan Anchun
OUR SUBSIDIARY
Details of our Subsidiary, Hunan Anchun, are as follows:-
% Ownership
/ % voting
Date and Place Principal Business/ power held by
Name of Company of Incorporation Principal Place of Business our Company
Hunan Anchun 29 September 1998 High technology development and transfer of 100
Changsha City, achievements for oil, coal, natural gas and
Hunan Province, biochemical industry; design, manufacture and
PRC general contracting for sale of chemical new
technological process, new equipment
integration; projects for energy saving and
environmental protection; development and
sale of software and electric products;
manufacture and sale of chemical products
(excluding dangerous products)/Hunan
Province, PRC
Hunan Anchun is not listed on any stock exchange. We do not have any associated companies.
63
INDUSTRY OVERVIEW
This is an executive summary extracted from an industry report entitled “Report on Technologies and
Equipment in China’s Fertiliser and Methanol Industries” prepared by the Fertiliser Department of China
National Chemical Information Centre (the “CNCIC Report”) for the purposes of incorporation in this
Prospectus and issued to our Company on 13 September 2010. This CNCIC Report contains certain
statements that are “forward-looking” and are based on underlying assumptions containing variables that
may have changed since the date of issue. This information has not been independently verified by us,
the Manager, Underwriter and Placement Agent, or any of our and their respective affiliates or advisors.
The information may not be consistent with other information compiled within or outside the PRC. Please
see the section entitled “Cautionary Note On Forward-looking Statements” of this Prospectus.
CNCIC, formerly the Scientific and Technological Information Research Institute of the Ministry of
Chemical Industry of PRC, is a comprehensive information research centre which specialises in the
market research of the PRC chemical fertiliser industry. It is a state-owned enterprise and receives
funding support from the Ministry of Science and Technology of the PRC. At present, the centre has more
than 300 research specialists and operates over 10 chemical-related websites and publishes over 10
periodicals.
The Fertiliser Department of CNCIC is one of the most authoritative and renowned consulting
organisations in the PRC engaged in the investment consultancy and market analysis of fertilisers and
chemical products, and performs feasibility studies of chemical projects. At the present, it has more than
100 experienced professionals and several different kinds of professional information databases and has
provided information services for thousands of fertiliser enterprises, chemical enterprises, government
organisations and research institutes in the PRC and abroad, such as China XLX Fertiliser Ltd., Sinofert
Holdings Limited and Shindoo Chemi-Industry Co., Ltd..
OVERVIEW OF THE AMMONIA AND METHANOL INDUSTRIES IN THE PRC

Overview of the Ammonia Industry
Ammonia is a compound of nitrogen and hydrogen with the formula NH3. It is a colourless gas with a
characteristic pungent odour. Ammonia contributes significantly to the nutritional needs in the world by
serving as a precursor to food and fertilisers. Ammonia, either directly or indirectly, is an important
feedstock in the petrochemical, chemical and pharmaceuticals industries.
Because of its many uses, ammonia is one of the most highly produced inorganic chemicals. The
worldwide ammonia production capacity and volume in 2009 were 187,500 kt/year and 152,500 kt/yr
tonnes respectively. Global production capacity and volume are expected to increase to approximately
200,000 kt/yr and 170,000 kt/yr respectively in 2012. Consuming more than 1% of all man-made power,
the production of ammonia is a significant component of the world energy budget.
64
The PRC has both the largest production capacity and volume of ammonia globally. Approximately 510
PRC ammonia producers with more than 600 ammonia production facilities accounted for the total
production capacity and volume of 63,000 kt/yr and 51,400 kt/yr respectively, or approximately 34% of the
global production capacity and volume in 2009. The number of ammonia producers and their respective
total and average production volume in each of the provinces, autonomous regions and municipalities in
the PRC in 2009 are set out below:
Average
No. of Production production
Area producers Volume (kt/yr) volume (kt/yr)
Shandong Province 56 6,174 110

Henan Province 54 5,476 101
Hebei Province 44 3,577 81
Sichuan Province 43 4,171 97
Shanxi Province 37 4,997 135
Jiangsu Province 36 3,250 90
Hubei Province 33 3,351 102
Hunan Province 30 2,222 74
Anhui Province 26 2,310 89
Yunnan Province 17 1,838 108
Shaanxi Province 16 1,292 81
Fujian Province 16 1,058 66
Chongqing Municipality 14 981 70
Guizhou Province 13 1,482 114
Zhejiang Province 13 633 49
Guangxi Zhuang Autonomous Region 12 849 71
Ningxia Province 7 1,081 154
Liaoning Province 7 792 113
Inner Mongolia 7 750 107
Heilongjiang Province 5 828 166
Gansu Province 5 677 135
Jilin Province 5 524 105
Xinjiang Uygur Autonomous Region 4 1,512 378
Jiangxi Province 3 365 122
Guangdong Province 3 76 25
Hainan Province 2 844 422
Tianjin Municipality 2 240 120
Total 510 51,355 101
Source: CNCIC
After a series of consolidation in recent years, the number of ammonia producers was reduced to 510 in
2009 from over 1,600 in the 1980s. The distribution of production capacities of PRC ammonia producers
in 2009 is set out below:
Distribution of production capacities No. of ammonia % of total Production % of total

among PRC ammonia producers (kt/yr) producers producers volume (kt/yr) producers
Higher than 300 33 6.5 15,123 29.5

180 - 300 52 10.2 11,163 21.7
180 and below 425 83.3 25,074 48.8
Total 510 100.0 51,360 100.0
Source: CNCIC
Production facilities with production capacities of less than 180 kt/yr are typically considered within the
ammonia industry to be inefficient and are not economically viable in the long run. Accordingly,
notwithstanding that majority of the ammonia producers have production capacities of less than 180 kt/yr,
they only accounted for 48.8% of total production volume in 2009.
65
Ammonia is an important raw material used in the production of fertilisers such as urea and other
compound fertilisers. More than 90% of ammonia used in the PRC is the production of fertiliser. The use
of fertiliser can increase crop production yield by 40% to 60%. With only 9% of the global arable area
supporting 21% of the world’s population, fertilisers play an important role in ensuring the PRC’s food
security. Accordingly, the agriculture industry in PRC enjoys preferential policies which include VAT
exemption as well as subsidies on electricity and transportation.
The remaining 10% of ammonia produced in the PRC is used for the production of other industrial
products such as nitric acid, urea-formaldehyde resin, caprolactam, acrylonitrile, phenolic resin, etc. In
addition, it can also be used as refrigerant and corrosion inhibitor.
The top 10 ammonia producing countries and their respective production capacities and volumes for
2009 is set out below:
70,000
60,000
50,000
40,000
kt/yr
30,000
20,000
10,000
0
a
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a
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an
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ai
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an
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in
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Production Capacity Production Output
Source: International Fertiliser Association
66
Coal-based ammonia synthesis technologies being the predominant production technique used in
the PRC
While different types of raw materials such as natural gas and ammonia synthesis technologies exist for
the production of ammonia, coal and coal-based ammonia synthesis technologies were the predominant
raw materials and technologies for the production of ammonia historically. This is because the PRC has
relatively limited natural gas and oil resources as compared to coal, which resulted in the average
historical production volume of ammonia from natural gas and oil to account for approximately 20.8% and
2.1% of the total ammonia production volume respectively. The percentage of ammonia produced by the
various types of raw materials from 2005 to 2009 is as follows:-
Total % of total ammonia produced using

production
Year volume (kt/yr) Coal Natural gas Oil Others
2005 45,960 75.2 21.5 2.4 0.9

2006 48,930 76.5 21.2 2.0 0.3
2007 50,940 77.1 20.2 2.0 0.7
2008 49,950 77.2 20.1 2.0 0.7
2009 51,360 76.4 20.9 1.9 0.8
Source: CNCIC; Others includes: coke oven gas, coke, etc.
Coal remains as the predominant raw material used in the production of ammonia in the PRC. The
production volume of coal-based ammonia accounted for approximately 76.4% of the total production
volume in 2009.
Prospects of the Ammonia Industry in the PRC

Steady growth in production volume and capacity is expected to continue
Total Production Capacity, Volume and Utilisation Rate, 2000 – 2012F
75,000 100.0%
60,000 80.0%
45,000 60.0%
kt/yr
30,000 40.0%
15,000 20.0%
0 0.0%
2000 2002 2004 2006 2008 2010(F) 2012(F)
Production Capacity Production Volume Utilisation Rate (%)

Source: CNCIC
Production utilisation rate ranges between 80.2% and 90.1% between 2000 and 2009. Production
utilisation rate, as measured by dividing production volume by production capacity, of between 80% and
90% is considered normal for the ammonia industry as a result of the inclusion of smaller-scale,
uneconomically-viable ammonia production facilities as well as scheduled maintenance time of the
remaining ammonia production facilities.
67
Production capacity and volume are expected to grow steadily from 63,000 kt/yr and 51,360 kt/yr
respectively in 2009 to 70,000 kt/yr and 63,000 kt/yr respectively in 2012, representing a CAGR of
approximately 3.6% and 7.0% in the same period. The key reasons underpinning such expected steady
growth in the ammonia industry are as follows:-
a) Persistent and stable increase in demand for fertiliser to expand crop production and in other
industry uses for ammonia
To maintain food self-sufficiency for a growing middle class, the PRC government will continue its
preferential policies to increase crop production yield, including but not limited to direct subsidies
for purchasing agricultural machinery and tools as well as promoting steady growth of the
production volume of fertiliser. Total direct subsidies from such preferential policies amounted to
RMB120.0 billion in 2009. It is expected that crop production will increase by at least 1% every year
from 2010 to 2012, increasing the total crop production from 530,800 kt/yr in 2009 to 547,000 kt/yr
in 2012. The growth in crop production is expected to contribute significantly to the growth in
demand for fertiliser and consequently, ammonia.
Furthermore, as the chemical fibre and plastic industry continues to develop in the PRC, industrial
uses and demand of ammonia is expected to increase from approximately 5,000 kt in 2009 to
7,000 kt in 2012 to produce chemical products such as caprolactam (an organic compound which
is the precursor to synthetic polymer), artificial silk and phenol formaldehyde resin.
b) Continued consolidation and expansion of ammonia production capacities in a highly-fragmented

industry induced by competition and requirement for energy-efficiency
At its peak, the number of ammonia producers numbered over 1,600 in the 1980s. Many of these
producers operate ammonia production facilities which are considered to be inefficient, with
production outputs lower than 80.0 kt/yr. Such production facilities typically have a comprehensive
energy consumption of between 1,600 and 1,800 kg standard coal/tonnage ammonia (i.e., the
amount of standard coal in kg required to produce a ton of ammonia). According to “The Norm of
Energy Consumption per Unit Product of Synthetic Ammonia” published by Standardization
Administration of PRC in 2008, the comprehensive energy consumption level above 1,500 kg
standard coal/tonnage ammonia is considered inefficient. Furthermore, according to “Admittance
Condition of Ammonia Industry” which will be published by National Development and Reform
Commission in 2010, production activities at ammonia production facilities with a comprehensive
energy consumption of more than 1,500 kg standard coal/tonnage ammonia will be prohibited from
2015 onwards. Comprehensive energy consumption of less than 1,500 kg standard coal/tonnage
ammonia is typically achieved with production capacities of more than 80 kt/yr.
Notwithstanding that comprehensive energy consumption production facilities of less than 1,500 kg
standard coal/tonnage ammonia is typically achieved with production capacities of more than 80
kt/yr, production capacities of less than 180 kt/yr are typically considered within the ammonia
industry to be inefficient and are not economically viable in the long run. Over 83.3% of the existing
ammonia producers operate production facilities with production capacities of less than 180 kt/yr. It
is expected that these ammonia producers will either upgrade and expand their existing production
capacities or undergo further consolidation to increase their competitiveness in the market.
As a result of the expected increase in demand for ammonia from agriculture and other industries, the
domestic demand for ammonia is expected to increase from 51,636 kt/yr in 2009 to 60,000 kt/yr in 2012,
representing a CAGR of approximately 5.1% in the same period.
Overview of the methanol industry

Methanol, also known as methyl alcohol, wood alcohol, wood naphtha or wood spirits, is a chemical with
formula CH3OH (often abbreviated MeOH). It is the simplest alcohol, and is a light, volatile, colourless,
flammable liquid with a distinctive odour that is very similar to but slightly sweeter than ethanol (drinking
alcohol). Methanol, either directly or indirectly, is an important feedstock to the petrochemical and
chemical industries.
68
The largest use of methanol by far is in making other chemicals. About 40% of methanol is converted to
formaldehyde, which is further processed into products as diverse as plastics, plywood, paints,
explosives, and permanent press textiles. Methanol is also used widely in the production of
pharmaceutical products, pesticides, dyestuffs, plastics, synthetic fibre, synthetic rubber, solvents and
fuel.
Methanol is an important material for the chemical industry in the PRC. Approximately 87.7% of all
methanol produced in the PRC is used as a type of fuel or as raw material for the production of
formaldehyde, methyl tertiary butyl ether (“MTBE”), dimethyl ether (“DME”) and acetic acid. DME can be
used as aerosol spray propellant or be blended with liquefied petroleum gas (“LPG”) for home heating
and cooking.
The PRC has both the largest production capacity and volume of methanol globally. Approximately 250
PRC methanol producers accounted for the total production capacity and volume of 28,400 kt/yr and
13,200 kt/yr respectively, or approximately 30% of the global production volume in 2009. Methanol can be
produced singly from dedicated methanol synthesis reactors or as a by-product during the production
process of ammonia. Approximately 180 of these methanol producers produced methanol as a by-
product. Production capacities from such co-producing facilities are usually below 200 kt/yr.
The distribution of production capacities of PRC methanol producers in 2009 is set out below:-
Distribution of production capacities No. of methanol % of total Production % of total

among PRC methanol producers (kt/yr) producers producers volume (kt/yr) producers
Higher than 200 38 14.8% 7,260 55.0%

Lower than 200 218 85.2% 5,940 45.0%
Total 256 100.0 13,200 100.0
Source: CNCIC
Production facilities with production capacities of less than 200 kt/yr are typically considered within the
methanol industry to be inefficient and are not economically viable in the long run. Accordingly,
notwithstanding that 85.2% of the methanol producers have production capacities of less than 200 kt/yr,
they only accounted for 45.0% of total production volume in 2009. Such methanol production facilities of
less than 200 kt/yr would require hardware and technological upgrade to be economically viable.
The proportion of methanol production volume in various provinces, autonomous regions and
municipalities in the PRC in 2009 are set out below:-
Henan, 14.0%
Others, 19.5%
Inner Mongolia, 14.0%

Heilongjiang, 4.0%
Chongqing, 4.2%
Shanghai, 4.6%
Shanxi, 5.2% Shannxi, 13.0%
Hebei, 5.4%
Shandong , 12.0%
Hainan, 5.4%
The majority of the methanol production facilities set up in recent years are located in areas rich in coal
resources, such as Inner Mongolia and Henan.
69
Coal-based methanol synthesis technologies being the predominant production technique used in
the PRC
As aforementioned, as the PRC has relatively limited natural gas and oil resources as compared to coal,
the average historical production volume of methanol from natural gas and coke oven gas accounted for
approximately 35.2% and 5.0% of the total methanol production volume respectively. The percentage of
methanol produced by the various types of raw materials from 2005 to 2009 is as follows:-
Total % of total methanol produced using

production
Year volume (kt/yr) Coal Natural gas Coke oven gas
2005 5,356 58.5 36.3 5.2

2006 7,623 59.6 35.3 5.1
2007 10,764 59.8 35.4 4.8
2008 12,850 60.0 34.4 5.6
2009 13,200 60.5 34.5 5.0
Source: CNCIC
Prospects of the methanol industry in the PRC

Source: CNCIC
Production utilisation rate ranges between 46.5% and 82.4% between 2005 and 2009. The low production
utilisation rate was due mainly to the switch by operators of co-production facilities to concentrate on
increasing production volume for ammonia instead of methanol in 2009. The switch by these operators
was due mainly to the higher average selling price of ammonia of RMB2,400 per tonne as compared to
RMB1,900 for methanol in 2009. Furthermore, methanol producers with methanol production facilities of
less than 200 kt/yr generally face higher average cost of production as compared to the other methanol
producers operating methanol producing facilities of more than 200 kt/yr. Accordingly, these methanol
producers generally lowers the utilisation rate of their methanol producing facilities when the average
selling price of methanol exceeds their average cost of production, contributing to the industry-wide low
production utilisation rate.
70
Notwithstanding that, strong growth in the methanol industry is expected to increase both production
capacity and volume of methanol from 28,400 kt/yr and 13,200 kt/yr respectively in 2009 to 33,000 kt/yr
and 23,100 kt/yr respectively in 2012, representing an increase in production utilisation rate from 46.5%
in 2009 to 70.0% in 2012 as a result of the following:-
a) Increase in demand for DME and methanol-to-olefin uses
As the PRC government seeks to ensure its energy security, it is increasingly seeking alternative
fuel sources. DME is a promising fuel in diesel engines, petrol engines, and gas turbines owing to
its high cetane number (a measurement of combustion quality). In addition, the use of blended
DME and LPG as an alternative cooking or heating fuel in the PRC is expected to increase.
Accordingly, the industry demand for methanol as a result of an increase in demand for DME, is
expected to increase from 1,380 kt/yr in 2007 to 4,200 kt/yr in 2012, representing a CAGR of
24.9%
Furthermore, using the methanol to olefin (“MTO”) process, methanol can also be converted to
ethylene and propylene, the two largest chemicals produced by the petrochemical industry. Such
breakthrough in technologies is expected to increase the demand for methanol from nil in 2007 to
4,650 in 2012. The table below sets out the forecasted growth in methanol consumption as a result
of increase in demand for other methanol-based chemicals:-
2007 2012 2007 – 2012
Industry Consumption % Consumption % CAGR

(kt/yr) (kt/yr) (%)
Formaldehyde 4,690 42.4 5,300 23.8 2.5

Fuel 1,750 15.8 3,000 13.5 11.0
Acetic acid 1,170 10.6 2,400 10.8 15.5
MTBE 710 6.4 950 4.3 6.0
Dimethyl ether 1,380 12.5 4,200 18.8 24.9
Methylamine 500 4.5 550 2.5 1.9
Chlorinated methanes 250 2.3 300 1.3 3.7
Methanol to olefin 0 0.0 4,650 20.9 n.m
Other 600 5.4 950 4.3 9.6
Total 11,050 100.0 22,300 100 15.1
Source: CNCIC
b) Competition and energy-efficiency induced consolidation in a highly-fragmented industry and

expansion of methanol production capacities
218 of the existing methanol production facilities have production capacities in the PRC of less than
200 kt/yr, and would require hardware and technological upgrade to be economically viable.
Increase in competition is expected to result in industry consolidation, leading to a slower absolute
growth in production capacities while increasing overall production efficiency of the PRC methanol
industry through the replacement of existing low-efficiency methanol production facilities. The
higher growth rate in demand for methanol than production capacities growth rate is expected to
increase the production utilisation rate to 70.0% in 2012.
As a result of the increase in demand for methanol as alternative fuel and for other uses, the
domestic demand for methanol is expected to increase from 11,050 kt/yr in 2007 to 22,300 kt/yr in
2012, representing a CAGR of approximately 15.1%.
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Prospects of coal-based ammonia and methanol synthesis technologies
Coal-based ammonia and methanol synthesis technologies are expected to continue to dominate the
PRC market, with increasing focus on increasing scale of production and adopting environmentally
friendly technologies with low energy consumption
While natural gas is an excellent raw material for the production of ammonia and methanol, China has
limited natural gas resources as compared to coal. In addition, current natural gas-based ammonia and
methanol production facilities are mainly located in the southwest and northwest part of the PRC, which
is far away from the fertiliser consumption market, mainly located in the eastern and middle part of China.
Furthermore, the Natural Gas Utilisation Policy, as promulgated by National Development and Reform
Commission in 2007 specifies that ammonia and methanol producers are prohibited from using natural
gas in the production of ammonia and methanol, due mainly to tight supply of natural gas and high
consumption levels for natural gas in China. As a result of the above, the use of coal as raw materials for
the production of ammonia and methanol is expected to continue to dominate the PRC ammonia and
methanol industry, and accordingly, coal-based ammonia and methanol synthesis technologies are
expected to be the dominant technologies used in the PRC.
The PRC is the largest ammonia and methanol producing country in the world, accounting for
approximately 34% and 30% of the global production volume of ammonia and methanol in 2009,
respectively. As aforementioned, coal is predominantly used as raw materials for the production of
ammonia and methanol. Accordingly, there is strong demand for coal-based ammonia and methanol
synthesis technologies, chemical systems and components as well as catalysts. Hunan Anchun operates
one of the largest R&D centres in the PRC, based on the number and qualifications of its research
personnel and their collective research capability, as well as one of the largest manufacturing facilities for
the ammonia and methanol related systems and technologies in the PRC, based on its manufacturing
and production capacity. It is widely considered to be a leading enterprise and brand name in the PRC,
providing integrated chemical systems engineering and technology solutions to the PRC petrochemical
and chemical industries, in particular, manufacturers of ammonia and methanol based products.
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HISTORY AND BUSINESS
HISTORY
On 29 October 2009, our Company was incorporated in Singapore under the Companies Act as a private
company limited by shares under the name of “Anchun Holdings Pte. Ltd.”. Pursuant to the Restructuring
Exercise as described under the section entitled “Restructuring Exercise” of this Prospectus, our
Company became the holding company of our wholly-owned Subsidiary, Hunan Anchun. On 9 September
2010, we changed our name from “Anchun Holdings Pte. Ltd.” to “Anchun International Holdings Pte. Ltd.”
so as to align with our strategic direction of business development. On 14 September 2010, our name
was changed to Anchun International Holdings Ltd. in connection with our conversion to a public
company limited by shares.
The origins of our business can be traced back to 1993 when our Subsidiary’s predecessor, Hunan
Anchun Energy Saving Technology Co., Ltd. (“Anchun Energy Saving”) was
set up as a joint venture by our founding management team, led by our Executive Chairman and CEO,
Xie Ding Zhong, with a state-owned enterprise to engage in the research and development of ammonia
synthesis reactors as well as provision of technical consultant services to fertiliser manufacturers.
Subsequently, the joint venture was discontinued and the operations of Anchun Energy Saving were
ceased. Thereafter, our founding management team and then employees established our Subsidiary,
Hunan Anchun, to carry on the business in September 1998 with an initial share capital of
RMB1,064,000.
From our inception, our aim was to become an integrated chemical systems engineering and technology
solutions provider to the PRC petrochemicals and chemical industries (in particular, manufacturers of
ammonia and methanol based products), as we seek to capture value at each of the value-chain such as
research and development, system design and development, system production, and overall project
management. In 1994, leveraging on our research and development expertise and reputation in the
fertiliser industry, we acquired the capabilities to produce proprietary ammonia synthesis reactors (up to
Φ600) with annual capacity of up to approximately 25,000 tonnes and started to market these products to
our customers.
In the same year, as a testament to its technological innovation, outstanding operational results and great
economic benefits, our methanol-methane technology (patent number: ZL 94 1 10903.8) was endorsed
by the Technology Department of the Ministry of Chemical Industry of PRC to be applied in the ammonia
industry.
In 1995, the proprietary ammonia synthesis reactor technology developed by our founding management
team was awarded the National Scientific and Technological Progress Award (2nd-highest honours)
by the National Science and Technology Committee of PRC in recognition of
its stable and outstanding operational performance in energy saving and production efficiency.
In 1996, we developed a new technology for the gas distribution processes in ammonia synthesis
systems (patent number: ZL96 1 18424.8), which greatly improved
synthesis efficiency and reduced energy consumption. In addition, we obtained the Class C engineering
design qualifications to provide certain engineering design services for chemical systems and processes.
Thereafter, we successfully assimilated our aforementioned gas distribution processes technology into
our proprietary ammonia synthesis reactor technology as well as our engineering design capabilities.
Pursuant thereto, we began providing such integrated chemical systems and components and technology
solutions to our customers, such as Hunan Qiaokou Nitrogen Fertiliser Factory and
Hunan Xiangyin Nitrogen Fertiliser Factory .
In 1998, we clinched an expansion project commissioned by Hunan Hengyang Nitrogen Fertiliser Factory
and successfully applied our newly developed alcohol-hydrocarbonylation refining
process technology (patent number: ZL 02 1 09000.9), which became one of our
core competitive technologies. We continued to modify and improve upon such technology over the years.
As a testament to the alcohol-hydrocarbonylation refining process technology’s outstanding operational
73
performance, wide applicability and breakthrough in technological achievements as well as its contribution
to the development of the PRC chemical industry, we were conferred the China Petroleum and Chemical
Industrial Technology Progress Award (2nd-highest honours) by
China Petroleum and Chemical Industries Association in 2002 and the 2003 National Scientific and
Technological Progress Award (2nd-highest honours) by the State
Council in 2004.
In 2000, we focused our R&D efforts on increasing the production capacity of our ammonia synthesis
reactors, so as to meet the increasing demand for larger scale ammonia synthesis reactors. Accordingly,
we successfully developed a breakthrough in our ammonia synthesis reactor technology where we
overcame the limitations of our previous reactors and improved our ammonia synthesis reactors to Φ1600
reactors with annual capacity of up to approximately 150,000 tonnes. These were readily accepted by our
customers such as Yueyang Fertiliser Factory (currently part of Hunan Tian Run Chemical Development
Co., Ltd. , a company listed on the Shenzhen Stock Exchange in the
PRC). In 2005, we submitted the patent application in respect of this technology to the State Intellectual
Property Office of the PRC and received the registered patent in 2008 (patent number: ZL 2005 1
0032358.3).
In this year, we also commenced the production of oxidative catalysts with an annual production capacity
of approximately 300 tonnes.
In 2003, we obtained the Class A national engineering design qualifications to provide certain
engineering design services in respect of chemical system and components, technological process,
instruments and electrical equipment nation-wide. As a testament to the quality of our engineering design
capabilities, the project we undertook for Feng Xi Fertiliser Group, Linyi Branch Company
was awarded the 2003 Chemical Industry Outstanding Engineering Design
(2nd-highest honours) by the China Petroleum and Chemical
Engineering Survey and Design Association in 2004.
In 2004, to meet the increasing demand for our chemical systems and components, we established
Lufeng Plant with a production area of approximately 5,000 sqm and expanded our production capacity to
approximately 1,600 tonnes annually. In addition, we successfully developed our methanol synthesis
reactor (up to Φ2800) with annual capacity of up to approximately 120,000 tonnes, which was registered
as a patent for invention with the State Intellectual Property Office of the PRC in 2007 (patent number: ZL
2004 1 0046980.5). Our first customer for this technology was Shandong Deqilong Chemical Co., Ltd.
(currently part of the Sinofert Holdings Limited ), a
listed company on the Hong Kong Stock Exchange.
In 2006, we successfully developed the multi-layer radial ammonia synthesis reactor

(patent number: ZL 2007 1 0035684.9). This further improved the production capacity and efficiency
of our ammonia synthesis reactors to Φ2000 reactors with annual capacity of up to approximately
200,000 tonnes. We believe that this was then the largest ammonia synthesis equipment in terms of
ammonia production capacity available in the PRC, which was independently designed and produced by
a PRC enterprise. We subsequently provided such technology to various established PRC fertiliser
manufacturers, such as (i) Henan Xinlianxin Chemical Co., Ltd. , an affiliate of
China XLX Fertiliser Ltd., a company dual-listed on both SGX-ST and Hong Kong Stock Exchange, (ii)
Shandong Hualu Hengsheng Chemical Co., Ltd. , a company listed on
Shanghai Stock Exchange, and (iii) Shandong Mingshui Chemical Joint-stock Co., Ltd.
. Please refer to section entitled “Our Major Customers” of this Prospectus
for more information.
In 2007, we expanded our production area at our Lufeng Plant from approximately 5,000 sqm to
approximately 7,000 sqm. As a result of the expansion, our production capacity of chemical systems and
components increased from approximately 3,000 tonnes to approximately 4,370 tonnes. We also doubled
our manufacturing capacity of oxidative catalysts, resulting in an increase in the annual production
capacity to approximately 1,200 tonnes. In addition, we started to manufacture pressure vessels of
varying specifications and pressures up to 10MPa for use in our chemical systems so as to reduce our
reliance on third party suppliers and expand our product range.
74
In the same year, as a testament to its innovative design, improved synthesis efficiency and reduced
energy consumption, our methanol synthesis reactor technology was endorsed by the China Nitrogen
Fertiliser Industry Association and Shandong Fertiliser Industry Association
to be applied in the methanol industry. Such endorsement increased the market
awareness of our methanol synthesis reactor and enabled us to attract and secure more customers in the
chemical industry.
In December 2007, we set up Anchun Biotech as a wholly-owned subsidiary of Hunan Anchun with an
initial share capital of RMB2,000,000. It was engaged in the business of manufacture and sales of health
supplements. In order to streamline our Group’s business and resources for the purpose of the Invitation,
we disposed of all the equity interest in Anchun Biotech and transferred certain intangible assets
including 6 trademarks, 1 patent and 2 production permits for health supplements which were registered
under Hunan Anchun’s name but which were not relevant to Hunan Anchun’s business. Please refer to
the section entitled “Restructuring Exercise” of this Prospectus for more information.
In mid 2008, we established our Lusong Plant with a gross production area of approximately 15,000 sqm
and expanded our combined production capacity at our Lufeng Plant and Lusong Plant to approximately
8,750 tonnes of chemical systems and components and approximately 1,500 tonnes of catalysts for
FY2008. In addition, we obtained additional qualifications to manufacture high pressure vessels of varying
specifications and pressures up to 100MPa, which allowed us to increase our product range of pressure
vessels.
In the same year, we integrated our methanol synthesis reactor technology into our ammonia synthesis
systems. Such integration of technologies allowed our customers to produce both ammonia and methanol
concurrently, enabling them to achieve flexibility in production and wider product portfolio, as well as
outstanding energy saving results.
In 2009, our combined production capacity at our Lufeng Plant and Lusong Plant reached approximately
13,125 tonnes of chemical systems and components and approximately 1,650 tonnes of catalysts. In
addition, we further improved the production capacity and efficiency of our ammonia synthesis reactors to
Φ2500 reactors with annual capacity of up to approximately 300,000 tonnes and successfully installed
such reactors for Henan Xinlianxin Fertiliser Co., Ltd. . We also improved the
production capacity of our methanol synthesis reactor to Φ3800 reactors with annual capacity of up to
approximately 300,000 tonnes.
In 2010, we further improved the production capacity and efficiency of our ammonia synthesis reactors to
Φ2600 reactors with annual capacity of up to approximately 330,000 tonnes and successfully secured an
order from Guizhou Kailin Group for such reactor.
In addition, we expanded our engineering design services under our Class A national engineering design
qualifications to include all engineering design services for chemical engineering within the chemical,
petrochemical and pharmaceutical industries as well as specific environmental engineering for waste
water, waste gas and solid waste treatment. Tapping on our existing R&D and manufacturing capabilities,
we believe this has further strengthened our competitiveness in the PRC petrochemical and chemical
industries as we have become a leading integrated chemical systems engineering and technology
solutions provider to these industries, in particular, manufacturers of ammonia and methanol based
products.
75
BUSINESS OVERVIEW
Based on the CNCIC Report dated 13 September 2010, we have one of the largest R&D and
manufacturing capabilities for ammonia and methanol related systems and technologies in the PRC.
Please refer to the sections entitled “Industry Overview” and “Research and Development” of this
Prospectus for more information.
Our integrated business model is anchored on our strong R&D capabilities and registered patents for our
key technologies, and allows us to capture value across the value chain from system design, system
production and project management, and after-sales. Based on core principles of production efficiency,
energy saving and environmental protection, our range of integrated chemical systems engineering and
technology solutions can be broadly categorised as follows:-
(i) Chemical systems engineering and technology design services;
(ii) Chemical systems and components, including alcohol-hydrocarbon reactors technology, ammonia
synthesis reactor technology and methanol synthesis reactor technology, pressure vessels and
other auxiliary equipment; and
(iii) Oxidative and reductive catalysts.
As a testament of our success in achieving our core principles of production efficiency, energy saving and
environmental protection, we have been accorded awards by the PRC government and national bodies
such as 2003 National Scientific and Technological Progress Award (2nd-highest honours)
by the State Council in recognition of outstanding operational results,
economic and social benefits of the alcohol-hydrocarbonylation refining process technology being a
technological progress; and 2007 State Focus Environmental Protection Application Technology (Grade
A) by China Environmental Protection
Industry Association in affirmation of our alcohol-hydrocarbonylation refining
process technology being energy saving and environmentally acceptable to prevent environmental
pollution and ecological damage.
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Our chemical systems and components are generally used by our customers to produce ammonia and
methanol, which are subsequently used as crucial feedstock in our customers’ production system to
produce other downstream products such as urea, compound fertiliser, methanol fuel, formaldehyde,
dimethyl ether and explosives. The following diagram illustrates our value chain vis-à-vis our customers’
value chain, products and industry applications:-
Our Customers’
Our Customers’ Our Customers’ Products and
Our Value
Our Value Chain
Chain
ProductionProcess
Preparation of raw gas

System Design
Agriculture chemical Petrochemical
industry industry
Chemical fertilisers Methanol fuel and
including urea and other related
Gas purification compound fertilisers products for energy
Integrated
chemical uses
systems (More than 90% of
engineering ammonia produced Other industries
and Ammonia / Methanol in the PRC are used Feedstock for
System production and
technology synthesis in the manufacture of various industries
project management
solutions chemical fertilisers) such as
pharmaceutical and
solvents industries
Ammonia / Methanol
output
Ammonia / Methanol

used as feedstock in products products
other sub-processes
Please refer to the section entitled “Our Integrated Business Model” of this Prospectus for more
information.
We have a leading and established management team who have an average of approximately 32 years of
relevant professional experience in our industry, and have been working together since the founding years
of our Group. Since our inception, we have also established an extensive and notable customer base
across the PRC. As at the Latest Practicable Date, we have a customer base of approximately 320
customers (of which certain customers belong to the same group of companies) across 26 province-level
administrative units comprising provinces, autonomous regions and municipalities in the PRC. Our
customers include notable groups such as China XLX Fertiliser Ltd. (dual-listed on both SGX-ST and
Hong Kong Stock Exchange), Shandong Hualu Hengsheng Chemical Co., Ltd.
(listed on Shanghai Stock Exchange) and Sinofert Holdings Limited (listed
on Hong Kong Stock Exchange), Guizhou Kailin Group and Shanxi Jincheng Anthracite
Mining Group .
77
We believe our competitive strengths are as follows:-
Leading and established management team

We have a leading and established management team that has successfully spearheaded our operations
through rapid organic growth and progressively expanded our portfolio of integrated products and
services. Our top management, namely our Executive Chairman and CEO Xie Ding Zhong, Executive
Directors Liang Gong Zeng and Dai Feng Yu, Head of Sales and Marketing Department Li Chun Yang
and Head of System Design Department Li Bin, have an average of approximately 32 years of relevant
professional experience in our industry, and have been working together since the founding years of our
Group.
Our top management are considered leading professionals in our industry and have been respectively
accorded various individual awards for their professional achievements. Some of them also hold key
appointments in various national industry associations and bodies, such as Methanol Technology
Committee of National Chemical Ammonia Synthesis Design Centre
, China Chemical Industry Environmental Protection Association ,
Synthetic Ammonia Design Committee of China Petroleum and Chemical Engineering Survey and Design
Association . Please refer to the section entitled
“Directors, Key Executives and Employees” of this Prospectus for more information on our management
team. We believe that our management team’s extensive experience and contacts within our industry will
enable us to anticipate and cater to the requirements and demand of our customers and industry,
allowing us to continue our business expansion and growth going forward.
Integrated business model anchored on strong R&D capabilities and registered patents for our
key technologies
By leveraging on our strong R&D capabilities and registered patents for our key technologies, we are
focused on providing integrated chemical systems engineering and technology solutions based on core
principles of production efficiency, energy saving and environmental protection to the PRC petrochemical
and chemical industries, in particular, manufacturers of ammonia and methanol based products. Our
Class A national engineering design qualifications (which include all engineering design services for
chemical engineering in the chemical, petrochemical and pharmaceutical industries as well as specific
environmental engineering for waste water, waste gas and solid waste treatment) and integrated business
model allow us to capture value across the value chain from system design, system production and
overall project management, and after-sales. Our range of integrated chemical systems engineering and
Chemical systems engineering and technology design services;
Chemical systems and components, including alcohol-hydrocarbon reactors technology, ammonia

auxiliary equipment; and
Oxidative and reductive catalysts.
Please refer to the section entitled “Our Integrated Business Model” of this Prospectus for more
information.
Based on the CNCIC Report, we are one of the largest R&D centres of the ammonia industry and
methanol industry in the PRC and one of the largest manufacturing bases of equipment for ammonia and
methanol industries. Our R&D activities are initiated and led by our Executive Chairman and CEO Xie
Ding Zhong and Executive Director Dai Feng Yu. As at the Latest Practicable Date, we have over 120 of
our project/process engineers who actively participate in the R&D process through their respective job
functions. Our research philosophy emphasises collaboration across technical and functional boundaries
and applying leading-edge technologies to solve customer and industry problems. We also work with
reputable academic institutions and research institutes to jointly undertake specific R&D projects on an
ad-hoc basis. These collaborations allow us to adapt and adopt the technical expertise of the relevant
academic institutions and external research institutes thereby boosting our competitiveness. Our R&D
initiatives are focused on developing and introducing new technologies to cater to our customers’ evolving
needs and thereby expanding our range of integrated products and solutions.
78
As at the Latest Practicable Date, we have 13 registered patents and another 4 patent pending
applications in the PRC. Our patents include key technologies such as our multi-layer radial ammonia
synthesis reactor and methanol synthesis reactor. Please refer to the sections entitled “Research and
Development” and “Intellectual Property - Patents” of this Prospectus for more information.
Established track record of operational excellence, technological breakthroughs and national

awards
Through our focus on our core principles of production efficiency, energy saving and environmental
protection, our R&D efforts, product safety and reliability and customised solutions for our customer
needs, we have established a strong track record of operational excellence and technological
breakthroughs since our inception. Our significant achievements include:-
Year Significant achievements
1994, Developed our proprietary ammonia synthesis reactors (up to Φ600) with annual capacity
1995 of up to 25,000 tonnes
This technology was awarded the National Scientific and Technological Progress Award
(2nd-highest honours) by the National Science and Technology
Committee of PRC in 1995
Our methanol-methane technology was endorsed by the Technology Department of the

Ministry of Chemical Industry of PRC to be applied in the ammonia industry in recognition
of its technological innovation, outstanding operational results and great economic
benefits
1996 Developed a new technology for the gas distribution processes in synthesis systems,
which greatly improved synthesis efficiency and reduced energy consumption
1998, Developed our alcohol-hydrocarbonylation refining process technology, which we

2002, continued to modify and improve upon over the years
2003
In relation to this technology, we were conferred the China Petroleum and Chemical
Industrial Technology Progress Award (2nd-highest honours)
by the China Petroleum and Chemical Industry Association in 2002 and the
2003 National Scientific and Technological Progress Award (2nd-highest honours)
by the State Council in 2004
2000 Developed a breakthrough in our ammonia synthesis reactor technology where we

overcame the limitations of our previous reactors and improved our ammonia synthesis
reactors to Φ1600 reactors with annual capacity of up to approximately 150,000 tonnes
2003, Obtained the Class A national engineering design qualifications to provide certain
2004 engineering design services in respect of chemical systems and components,
technological process, instruments and electrical equipment nation-wide
One of our projects was awarded the 2003 Chemical Industry Outstanding Engineering
Design (2nd-highest honours) by the China Petroleum and
Chemical Engineering Survey and Design Association
in 2004
2006 Developed the multi-layer radial ammonia synthesis reactor. This further improved the
production capacity and efficiency of our ammonia synthesis reactors to Φ2000 reactors
with annual capacity of up to approximately 200,000 tonnes
79
Year Significant achievements
2007 Our methanol synthesis reactor technology was endorsed by the China Nitrogen Fertiliser
Industry Association and Shandong Fertiliser Industry Association
for its innovative design, improved synthesis efficiency and reduced
energy consumption
2009 Improved the production capacity and efficiency of our ammonia synthesis reactors to
Φ2500 reactors with annual capacity of up to approximately 300,000 tonnes
Improved the production capacity of our methanol synthesis reactor to Φ3800 reactors
with annual capacity of up to approximately 300,000 tonnes
2010 Improved the production capacity and efficiency of our ammonia synthesis reactors to
Φ2600 reactors with annual capacity of up to approximately 330,000 tonnes
Obtained our Class A national engineering design qualifications to include all engineering
design services for chemical engineering in the chemical, petrochemical and
pharmaceutical industries as well as specific environmental engineering for waste water,
waste gas and solid waste treatment
Please refer to the section entitled “History” of this Prospectus for more information on the above.
Widely-recognised as a leading enterprise and brand name in the PRC chemical systems
engineering and technology solutions industry
We believe that in recent years we have become widely-recognised as a leading enterprise and brand
name in the PRC chemical systems engineering and technology solutions industry. As testament to our
leading position and in addition to our established track record of operational excellence, technological
breakthroughs and national awards as aforementioned, we have obtained several enterprise awards and
accolades, including:-
2009 Forbes China Up & Comers award by Forbes China magazine (ranked 98th enterprise across
all industries nationwide for enterprise growth potential)
China Petrochemical and Chemical Industries Outstanding Private Enterprise

in 2005 by China Petroleum and Chemical Industries Association
Top 500 China Chemical Industry Profitable Enterprise in 2007 by

China Chemical Enterprise Management Association and China National Chemical Information
Association
China Chemical Industry Technology Innovation Model Enterprise

in 2004 by China Petroleum and Chemical Industries Association
Advanced New Technology Enterprise by Science and Technology Department of

Hunan Province, Finance Department of Hunan Province, State Taxation Bureau of Hunan
Province, Local Taxation Bureau of Hunan Province in 2008
Please refer to the section entitled “Awards and Accreditation” of this Prospectus for more information on
the above.
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Extensive and notable customer network across the PRC
Since our inception, we have also established an extensive and notable customer base across the PRC.
As at the Latest Practicable Date, we have a customer base of approximately 320 customers (of which
certain customers belong to the same group of companies) across 26 province-level administrative units
comprising provinces, autonomous regions and municipalities in the PRC. Our major customers include
notable groups such as:-
Jincheng Anthracite Mining group (“JAMG”)
Shanxi Tianze group
Sinofert group (listed on Hong Kong Stock)
China XLX group (dual-listed on both the SGX-ST and the Hong Kong Stock
Exchange)
Please refer to the section entitled “Our Major Customers” of this Prospectus for more information on our
customers. Other notable customers include Shandong Hualu Hengsheng Chemical Co., Ltd.
(listed on the Shanghai Stock Exchange), Jiangsu Huachang Chemical
Co., Ltd. (listed on the Shenzhen Stock Exchange) and subsidiary of
Sichuan Meifeng Chemical Industry Co., Ltd. (listed on the Shenzhen Stock
Exchange).
To ensure our market presence and attend to existing and potential customers across the PRC, we have
a dedicated sales and marketing team headed by our Head of Sales and Marketing, Li Chun Yang.
High barriers to entry to our industry

Due to the specialised nature of our industry, which is heavily regulated with high barriers to entry, certain
permits, certifications and licenses from the relevant authorities are necessary to conduct operations in
this industry.
For example, pressure vessels are classified based on the pressure that a pressure vessel can bear, from
low pressure (below 1.6MPa) to ultra-high pressure (above 100MPa). As such, any entity engaged in
design and manufacture of pressure vessels shall obtain the relevant design qualification and
manufacture qualification respectively, pursuant to which the category of pressure vessels that such entity
can design or manufacture is clearly prescribed in the design or manufacture qualification certificate.
Accreditation of such design qualification or manufacture qualification will take into account, inter alia, the
qualification and experience of the designer and/or technicians, quality control system, and testing
capability (for manufacture of pressure vessels). We currently have both the design qualification and
manufacturing qualification, which allow us to design and manufacture high pressure vessels of varying
specifications and pressures up to 100MPa.
In addition, any entity engaged in the business of provision of engineering design in the PRC shall obtain
engineering design qualifications. Such qualifications are classified into four categories including
comprehensive engineering design qualifications, industry engineering design qualifications, specialised
engineering design qualifications and engineering design qualifications for special project by taking into
account, inter alia, the designer’s track record, technical capabilities and human resources, independent
design capabilities and industry reputation. We currently possess Class A national engineering design
qualifications, which allows us to perform all engineering design services for chemical engineering within
the chemical, petrochemical and pharmaceutical industries as well as specific environmental engineering
for waste water, waste gas and solid waste treatment.
Please refer to the section entitled “Permits, Approvals, Certifications & Government Regulations” of this
Prospectus for further details.
81
In addition to the above regulatory qualifications, customers of our industry also place much emphasis on
requisite management expertise and experience, track record and R&D and technical capabilities during
their selection of vendors. As such, these factors generally enable larger and more established
companies such as our Group to be more competitive vis-à-vis smaller competitors and restrict new
entrants to our industry.
OUR INTEGRATED BUSINESS MODEL

Our integrated business model is anchored on strong R&D capabilities and registered patents for our key
technologies, and allows us to capture value across the value chain from system design, system
technology solutions can be broadly categorised into three business segments as follows:-
(i) Chemical systems engineering and technology design services (“CET Design Services”);
(ii) Chemical systems and components, including alcohol-hydrocarbon reactors technology, ammonia
other auxiliary equipment (“CSC Business”); and
(iii) Oxidative and reductive catalysts (“Catalysts Business”).
Our chemical systems and components are generally used by our customers to produce ammonia and
methanol, which are subsequently used as crucial feedstock in our customers’ production system to
produce other downstream products such as urea, compound fertiliser, methanol fuel, formaldehyde,
dimethyl ether and explosives. The following diagram illustrates our value chain vis-à-vis our customers’
value chain, products and industry applications:-
Our Customers’
Our Customers’ Our Customers’ Products and
Our Value
Our Value Chain
Chain
Production
ProductionProcess
Process Industry Applications
Preparation of raw gas

System Design
Agriculture chemical Petrochemical
industry industry
Chemical fertilisers Methanol fuel and
including urea and other related
Gas purification compound fertilisers products for energy
Integrated
chemical uses
systems (More than 90% of
engineering ammonia produced Other industries
and Ammonia / Methanol in the PRC are used Feedstock for
System production and
technology synthesis in the manufacture of various industries
project management
solutions chemical fertilisers) such as
pharmaceutical and
solvents industries
Ammonia / Methanol
output
Ammonia / Methanol

used as feedstock in products products
other sub-processes
82
As illustrated above, our chemical systems and components used by our customers can be broadly
categorised into three main sub-processes in their production of ammonia and methanol, namely (i)
preparation of raw gas; (ii) gas purification; and (iii) ammonia/methanol synthesis. These three sub-
processes are briefly described as follows:-
(i) Preparation of raw gas – depending on whether natural gas or coal is used as the raw material,
either the heterogeneous catalytic process or the gasification process is used to prepare the
natural gas or coal respectively for the next process.
(ii) Gas purification – raw gas is purified and refined to remove the gaseous impurities, such as CO,
CO2 and SO2, from the reaction gas which mainly contains H2 and N2. Such process can be further
divided into three sub-processes, namely, (1) gas conversion process where CO and vapour are
converted into CO2 and hydrogen, (2) gas desulphurisation and decarbonisation process where
oxides of sulphur and oxides of carbon are removed, and (3) gas refining process where the
remaining CO and CO2 are removed so that the reaction gas compositions will be in compliance
with industrial standards required for ammonia or methanol synthesis.
(iii) Ammonia/methanol synthesis – H2 and N2 are synthesised into ammonia in an ammonia synthesis
reactor by subjecting the aforementioned gases under pre-determined temperature, pressure and
other conditions with the aid of catalyst, before being deposited in storage tanks for further use as
feedstock to produce other downstream products such as urea, compound fertiliser and explosives.
CO, CO2 and H2 are synthesised into methanol in a methanol synthesis reactor by subjecting the
aforementioned gases under pre-determined temperature, pressure and other conditions with the
aid of catalyst, before being deposited in storage tanks for further use as feedstock to produce
other downstream products such as methanol fuel, formaldehyde and dimethyl ether.
OUR CORE PRINCIPLES OF PRODUCTION EFFICIENCY, ENERGY SAVING AND ENVIRONMENTAL

PROTECTION
We are committed to the core principles of achieving production efficiency, energy saving and
environmental protection in the provision of integrated chemical systems engineering and technology
solutions to our customers. We are aware of the economic, social and environmental impacts of our
business and products, and our related corporate social responsibilities. Accordingly, we believe that our
core principles will enable us to create long-term value for our Group, our stakeholders and society at
large through the following:-
(i) Production efficiency – Given that coal and natural gas are the main raw materials for ammonia
and methanol production systems, and the limited and precious nature of such natural resources,
improvement of production efficiencies of our chemical systems operated by our customers are
important as these will lead to increases of production yields per measure of direct material input.
Hence, greater production efficiency will lead to lower levels of coal and natural gas usage in our
customers’ industry.
(ii) Energy saving – Energy resources and consumption (such as electricity) are critical to our
operations and our chemical systems operated by our customers. Hence, energy saving
innovations will lead to reduction of consumption levels of energy by our operations and our
chemical systems.
(iii) Environmental protection – Due to the nature of the petrochemical and chemical industries,
pollution control is important as pollution may lead to widespread economic, social and
environmental impacts. Hence, we seek to design and manufacture chemical systems with minimal
or nil emissions of pollutants into the environment.
Furthermore, we also place emphasis on workplace safety, product safety and quality to ensure that our
operations and use of our chemical systems will not result in any work safety issues to our production
workers or those of our customers.
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Effects of our technology solution and products
By leveraging on our strong R&D capabilities and registered patents for our key technologies, we are
focused on providing integrated chemical systems engineering and technology solutions to our customers
based on the above core principles of production efficiency, energy saving and environmental protection.
Through such focus and efforts over the years, we have developed and patented several technologies
and products. We set out below examples of certain patented technologies and products that
demonstrate our core principles:-
(i) Alcohol-hydrocarbonylation refining process technology – This technology eliminates the discharge
of toxic fluid or other pollutants such as CO and CO2 to the environment. As the chemical system
which employs this technology is a closed-system, there is no emission of pollutants into the
environment when this technology is used. On the other hand, the previous gas refining process
technologies utilised by our customers prior to the adoption of our alcohol-hydrocarbonylation
refining process technology usually results in discharge of toxic fluid which has high bronze
concentration, CO and CO2, where each of these pollutant emissions is harmful to our
environment. In addition, our alcohol-hydrocarbonylation refining process technology recycles CO
and CO2 produced during the chemical synthesis processes through our alcohol-
hydrocarbonylation reactors and separation equipment, into other useful chemicals such as
methanol and dimethyl ether, thereby increasing the production yield over previous technologies.
(ii) Gas distribution technology – This technology, which is applied to both our ammonia synthesis
reactors and methanol synthesis reactors, increases production yield and reduces energy
consumption through the optimization of the quantity and flow directions of various gases in the
respective synthesis reactors, thereby increasing the synthesis reaction rate of ammonia and/or
methanol.
(iii) Ammonia and methanol synthesis reactor technologies - Our innovative reactor technologies are
proven to have high production efficiencies and energy saving levels. For example, through our
customised chemical system design, we are able to reduce the energy consumption of our
customers by re-using the heat generated through the chemical synthesis process to generate,
inter alia, steam which is then directed through carefully planned piping and heat exchange
systems to maintain and/or achieve certain pressures which are optimal for our chemical synthesis
reactors in the production of ammonia or methanol. Furthermore, our ammonia and methanol
synthesis reactor processes generally do not result in any emissions of pollutants into the
environment.
Recognition and awards by the PRC government and national bodies

As a testament of our success in achieving our core principles of production efficiency, energy saving and
environmental protection, we were, inter alia, accorded the following awards:-
(i) 2003 National Scientific and Technological Progress Award (2nd-highest honours)
by the State Council in recognition of outstanding operational results, economic and
social benefits of the alcohol-hydrocarbonylation refining process technology being a technological
progress
(ii) 2007 State Focus Environmental Protection Application Technology (Grade A)

by China Environmental Protection Industry Association
in affirmation of our alcohol-hydrocarbonylation refining process
technology being energy saving and environmentally acceptable to prevent environmental pollution
and ecological damage
(iii) Underpinning Technology for Recycling Economy of the Nitrogen Fertiliser Industry (2007-2010) –
waste treatment solutions in nitrogen fertiliser production
by China Nitrogen Fertiliser Industry Association
in recognition of its great environmental protection benefits and outstanding energy saving
results
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(iv) Underpinning Technology of the Nitrogen Fertiliser Industry – methanol synthesis reactor
technology by China Nitrogen Fertiliser
Industry Association in recognition of its innovative design, improved synthesis
efficiency and reduced energy consumption
Please refer to the section entitled “Awards and Accreditation” of this Prospectus for more information on
other awards and accreditations received by our Group.
Applicable environmental standards/regulations on our manufacturing processes and operation of our

chemical systems
Due to the nature of our manufacturing processes, our operations generally do not result in any
significant produce or discharge of any toxic fluid or other pollutants such as CO and CO2. Save for
general environmental protection laws and regulations applicable to businesses in the PRC, there are no
specific environmental laws and regulations regulating our manufacturing activities. Please refer to
Appendix E entitled “Description of Relevant PRC Laws and Regulations” of this Prospectus for details.
Nevertheless, our experienced management team carries out strict supervision of our manufacturing
process so as to reduce our carbon footprint. We also invest in advanced equipment and technologies,
such as motorised electronically-controlled milling and drilling machine and electronically-controlled
furnace, which reduce energy consumption during the manufacturing process. To date, our manufacturing
activities have not been censured or subject to any penalties or investigations by the relevant PRC
authorities due to environmental issues.
On the part of our customers, they are generally subjected to the compliance of PRC environmental laws
and regulations on matters such as control of atmospheric pollution, discharge of waste water and other
pollutants due to the chemical nature of their production processes. Nevertheless, as our integrated
chemical systems engineering and technology solutions and systems are designed and manufactured
based on our core principles and in consideration of such environmental compliance needs by our
customers, the operations of our systems (when properly operated by our customers) will generally
comply with the relevant PRC environmental laws and regulations. To date, to the best of our knowledge,
we are not aware of any breach of environmental laws and regulations by our customers, which were due
to the defects of our technologies and/or products.
OUR VALUE CHAIN

As aforementioned, our value chain can be broadly categorised into three main processes, namely (i)
system design process; (ii) system production and project management; and (iii) after sales. We set out
below details on these three main processes:-
I. System Design Process

Our R&D activities are initiated and led by our Executive Chairman and CEO, Xie Ding Zhong,
assisted by our Executive Director, Dai Feng Yu, both of whom hold key appointments in various
national and provincial industry associations and bodies. Our R&D activities are intertwined with
our system design teams, where we focus on developing and introducing new technologies to cater
to our customers’ evolving needs.
Our system design teams, led by our Head of System Design Department, Li Bin, are responsible
for providing our customers with our CET Design Services. These teams are cross-functional in
nature, comprising a combination of various members such as research engineers, project and
process engineers, budgeting and costing personnel and quality assurance personnel. We provide
chemical systems engineering and technology design services in a fully computerised
environment, using specialised software such as AutoCAD, SPDA, SW6, CAESAR2, MX-JJPJ and
GPCAD.
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Our CET Design Services contracts, which typically relate to our customers’ new expansion of
production capacity or enhancement of their existing production systems, are generally secured
through direct marketing and/or tendering process. Before securing the contracts, our cross-
functional system design team will be involved in extensive discussions with our customers to
understand the specific requirements of the project that they will be undertaking. Based on our
strong R&D capabilities and existing technical expertise, we are able to present to our customers
on various existing and in-development technological and system design options that are available
to them based on their project size and budget and advise them on the optimal combination of
technology and system design. If required, we will also provide feasibility studies. Once a
preliminary system design proposal is confirmed in consultation with our customers, we will
formally sign the contracts with our customers and our customers are required to make an advance
payment of up to 30% of the total contract value.
Upon securing the contracts, our cross-functional system design team will conduct site visits at our
customer’s factory sites and work with our customers to prepare the detailed design proposal,
taking into consideration of their specific technical specifications, requirements and factory layout.
Our detailed design proposal will include the blue-prints for the chemical systems, site-construction
and control instruments, project management plans as well as the operating procedures and
manual. Our system design process will usually take up to 3 - 6 months to complete, and where
necessary, we will fine-tune and adjust our designs based on our customers’ feedback.
As part of regulatory requirements, we have attained, inter alia, a Class A national engineering
design qualifications to provide engineering design services for chemical engineering within the
chemical, petrochemical and pharmaceutical industries as well as specific environmental
engineering for waste water, waste gas and solid waste treatment. Due to the specialised nature of
our industry, certain permits, certifications and licenses from the relevant authorities are necessary
to conduct operations in this industry. Such engineering design qualifications are classified into
different categories, taking into account, inter alia, the designer’s track record, technical capabilities
and human resources, independent design capabilities and industry reputation. Please refer to the
section entitled “Permits, Approvals, Certifications & Government Regulations” of this Prospectus
for further details.
As a demonstration of the quality of our engineering design capabilities, the project we undertook
for Feng Xi Fertiliser Group, Linyi Branch Company was awarded the
Chemical Industry Outstanding Engineering Design (2nd-highest honours)
by the China Petroleum and Chemical Engineering Survey and Design Association
in 2003. In addition, our engineering design for the ammonia
synthesis and urea production system for Shandong Deqilong Chemical Co., Ltd.
(currently part of the Sinofert Holdings Limited , a listed
company on the Hong Kong Stock Exchange, was awarded the Excellent Engineering Design of
Hunan Province (First-prize) by Construction Department of Hunan Province in 2005.
II. System Production and Project Management Process

An illustration of our Group’s system production and project management process is as follows:-
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We set out below details on these sub-processes:-
(a) Securing contracts

Our system production and project management contracts, which form our CSC Business
segment, typically follow-on from our system design contracts. Once our customers are
satisfied with our detailed system design proposals, we will proceed to negotiate terms with
our customers for the supply of the designed chemical systems and components and
catalysts. Such terms include pricing, payment terms and delivery schedule (including
liquidated damages for late delivery). In general, we require our customers to make an
advance payment of up to 30% of the total contract value upon the execution of the contract.
(b) Procurement and production of chemical systems and components

Based on the finalised design proposal and project management plan, we will procure from
pre-selected suppliers the direct materials and certain machinery parts and components
required for the manufacture and assembly of our chemical systems and components. In
general, we manufacture and fabricate our chemical systems and components in our
factories before delivering to our customers for on-site assembly and installation. Please
refer to the section entitled “Our Chemical Systems and Components and Manufacturing
Process” of this Prospectus for more information.
(c) Delivery of chemical systems and components

Depending on our customers’ requirements, we may also supply our catalysts under our
Catalysts Business segment to our customers together with our chemical systems and
components. Catalysts are used by our customers in their production processes to increase
the rate and efficiency of certain chemical reactions. The supply of catalysts do not form part
of our system production and project management contracts, and accordingly, we enter into
separate contracts with our customers in respect of the supply catalysts. Please refer to the
section entitled “Our Catalysts and Manufacturing Process” of this Prospectus for more
information.
After our chemical systems and components and/or our catalysts are delivered to the
customer’s factory site, our customer or its sub-contractors will undertake assembly and
installation work on-site. Under our specific guidance and instructions, our customer or its
sub-contractors will integrate our chemical systems and components to the rest of our
customers’ basic infrastructure facilities such as emission outlets and utilities supplies as well
as the other aspects of our customers’ sub-processes.
(d) Testing, commissioning and handover

Subsequent to the installation and integration of our chemical systems and components to
our customers’ production system, our engineers will be present on-site to undertake a
testing and commissioning process to ensure that the chemical systems and components
function in accordance to the specified standards and requirements.
Once the customer confirms that our chemical systems and components are in working
order and comply with their specifications as provided in the contract, our chemical systems
and components are handed over to the customer and an acceptance report will be issued
by the customer.
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III. After-Sales Services
Our contracts usually provide for a retention sum, which generally amounts to approximately 5% of
the contract value. The retention monies are usually payable after the warranty period.
In general, we offer our customers on-site rectification warranty for up to 12 (twelve) months.
Pursuant to this warranty, we are obliged to provide free on-site rectification works against any
defects. Following the expiration of the warranty period, we provide maintenance services as well
as supply replacement components and catalysts to our customers for separate fees.
Our sales and marketing team will also visit our customers after the warranty period to obtain
feedback on the performance of our chemical systems and components. We believe that such
after-sale visits is critical as it keeps us abreast of our customers’ future needs and allow our
research engineers to improve upon their chemical systems engineering and technology design
services, creating a virtuous cycle which improves our chances of securing future business
opportunities.
Project lead times

Our three business segments have different project lead time characteristics, illustrated as follows:-
Type of contract Project lead times

CET Design Services Approximately 3 - 6 months
CSC Business
– Synthesis reactor systems & components Approximately 9 - 12 months
– Pressure vessels Approximately 6 - 8 months
Catalysts Business Approximately 2 - 3 months
As our customers would take into consideration the required project lead times when placing
orders with us, the length of time that customers normally place their orders in advance and our
order books get filled are approximately the same as the above project lead times for the
respective segment.
OUR CHEMICAL SYSTEMS AND COMPONENTS AND MANUFACTURING PROCESS

Our chemical systems and components comprise (i) outer layer, which are the pressure vessels; and (ii)
inner layer components which include synthesis reactors, heat exchanger and separation equipment. The
average replacement cycle for the outer and inner layer components are 10-15 years and 5-10 years
respectively. Nevertheless, many existing systems in the PRC are considered either technologically
outdated or not economically viable in the long run. Ammonia and methanol production systems with
production capacities of less than 180 kt/yr and 200 kt/yr respectively are considered to be inefficient and
not economically viable in the long run. Please refer to the section entitled “Industry Overview” for more
information on the ammonia and methanol industry in the PRC. Currently, our ammonia and methanol
synthesis reactors have production capacities of up to 330 kt/yr and 300 kt/yr respectively. We set out
below more information on our chemical systems and components.
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Our chemical systems and components can be broadly categorised as follows:-
Chemical systems and

components
Chemical synthesis Heat exchangers & Pressure vessels

reactors separation equipment
Alcohol- Ammonia Methanol

hydrocarbon synthesis synthesis
reactors reactors reactors
We set out below details on these sub-systems and components:-
(a) Chemical synthesis reactors

Chemical synthesis reactors are vessels designed to contain chemical reactions that are normally
enclosed within pressure vessels. The chemical synthesis reactors produced can be further
categorised into alcohol-hydrocarbon reactors, ammonia synthesis reactor and methanol synthesis
reactor, described as follows:-
(i) Alcohol-hydrocarbon reactors

The alcohol-hydrocarbon reactors are chemical system components in which the raw gas is
purified and refined, and useful gases are separated prior to entering the ammonia synthesis
reactors. The alcohol-hydrocarbon reactors utilise our patented and award-winning alcohol-
hydrocarbonylation refining process technology which was first
developed in 1998 and consequently became one of our core competitive technologies. We
continued to modify and improve upon such technology over the years. As a testament of the
alcohol-hydrocarbonylation refining process technology’s outstanding operational
performance and breakthrough in technological achievements as well as its contribution to
the development of the PRC chemical industry, we were conferred the China Petroleum and
Chemical Industrial Technology Progress Award (2nd-highest honours)
by the China Petroleum and Chemical Industries Association in 2002,
2003 National Scientific and Technological Progress Award (2nd-highest honours)
by the State Council in 2004 and Class A Technology of National Key
Practical Technology in Environmental Protection by
China Environmental Protection Industry Association in 2004 and
2007.
(ii) Ammonia synthesis reactor

The ammonia synthesis reactor is a chemical system component in which hydrogen and
nitrogen is synthesised into ammonia under the required pressure, temperature and other
conditions with the aid of catalyst. It is considered to be the most important production
device in the ammonia production process as its performance will largely determine the
ammonia output and energy consumption.
Underpinning the ammonia synthesis reactor is our patented multi-layer radial ammonia
synthesis reactor technology. Currently, our ammonia synthesis reactors have annual
capacity of up to approximately 330,000 tonnes.
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(iii) Methanol synthesis reactor
The methanol synthesis reactor is a chemical system component in which carbon monoxide,
carbon dioxide and hydrogen are synthesised into methanol under the required pressure,
temperature and other conditions with the aid of catalyst. It is considered to be the most
crucial production device in the methanol production process as its performance will largely
determine the methanol output and energy consumption.
Underpinning the methanol synthesis reactor is our patented water-piping isothermal

methanol reactor technology. Currently, our methanol synthesis reactors have annual
capacity of up to approximately 300,000 tonnes.
In 2007, as a testament of its innovative design, improved synthesis efficiency and reduced
energy consumption, our methanol synthesis reactor was endorsed by the China Nitrogen
Fertiliser Industry Association and Shandong Fertiliser Industry
Association to be applied in the methanol industry. Such endorsement
increased the market awareness of our methanol synthesis reactor and enabled us to attract
and secure more customers in the chemical industry.
(b) Heat exchangers and separation equipment

Heat exchangers and separation equipment are specialised and necessary components of the
chemical systems. Heat exchangers are designed for efficient heat transfer, resulting in the heating
up or cooling down of the mediums, as well as heat utilisation. Separation equipment are used for
separation of substances, such as ammonia, methanol and oil, from a chemical mixture.
Underpinning the heat exchanger and separation equipment is our patented steam generator
technology and ammonia synthetic gas cooling and condensing separator technology.
(c) Pressure vessels

The pressure vessels are hermetic equipment designed to provide a stable environment to induce
chemical or physical reactions under a given temperature or pressure. They are widely used in
various industries including petrochemical, metallurgy and pharmaceutical.
Pressure vessels are normally classified in accordance with the pressure rating from low pressure
to ultra-high pressure. For safety reason, design and manufacture of pressure vessels requires
specific license under the PRC laws and regulations and such license is classified into several
categories according to the types of pressure vessels and the technical capability of the designer
or the manufacturer. Please refer to the section entitled “Permits, Approvals, Certifications &
Government Regulations” of this Prospectus for details.
Currently, we have the qualification to design and manufacture pressure vessels of varying
specifications and pressures up to 100MPa.
Manufacturing process of our chemical systems and components

An illustration of our Group’s manufacturing process for our chemical systems and components is as
follows:-
Processing of
Procurement direct materials
Painting, packing
& testing of into product Assembly Testing
& warehousing
direct materials components &
testing
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(i) Procurement and testing of direct materials: Based on the project planning, we procure direct
materials, mainly stainless steel and carbon steel, from our pre-selected suppliers. For fabrication
purpose, we also procure certain machinery parts and components such as electrical components,
fastener, seal components and safety accessories. We conduct quality testing on all of the direct
materials, machinery parts and components.
(ii) Processing of direct materials into product components and testing: According to the
necessary technical specifications required, the direct materials are processed by cutting, drilling,
punching, gas cutting, bending, welding and polishing to form the specified product components.
Various tests will be conducted to ensure that sizes, characteristics, properties and structures are
in line with the technical standards and specifications required.
(iii) Assembly: Product components such as shell body, flange, fastener, seal components and safety
accessories are further assembled into finished products according to the necessary technical
standards and specifications.
(iv) Testing: Overall testing includes non-destructive testing, pressure testing, air tightness testing are
conducted on finished products as a whole.
(v) Painting, packing and warehousing: Finished products which pass inspection stages and the
final test are painted, packed and stored in the warehouse, ready for despatch to customers.
OUR CATALYSTS AND MANUFACTURING PROCESS

Catalysts are used by our customers in their production processes to increase the rate and efficiency of
certain chemical reactions without actually changing the products of reaction. The types of catalysts
produced by us are generally oxidative catalysts and reductive catalysts.
Oxidative catalysts can be sub-divided into alcohol-hydrocarbon catalysts and ammonia synthesis
catalysts. Our alcohol-hydrocarbon catalysts are developed exclusively for use in our proprietary alcohol-
hydrocarbonylation refining process. Our proprietary alcohol-hydrocarbonylation refining systems and
related proprietary alcohol-hydrocarbon catalysts were new technologies and products developed by our
Group and we believe there are currently no similar systems and/or catalysts offered by other companies.
Accordingly, our customers who had procured our proprietary alcohol-hydrocarbonylation refining systems
are reliant on us to supply alcohol-hydrocarbon catalysts to them. As such, our alcohol-hydrocarbon
catalysts are generally able to command higher margins than our other types of catalysts as there are
currently no known substitutable catalysts for use in our proprietary alcohol-hydrocarbonylation refining
systems. Our ammonia synthesis catalysts are used in ammonia synthesis reactor systems to increase
the rate and efficiency of ammonia synthesis reaction and enhance rate of production, where such
oxidative catalysts undergo deoxidising and remove electrons from other chemical substances. Ammonia
synthesis catalysts are commonly supplied by other manufacturers in the industry and hence our
ammonia synthesis catalysts would generally have lower margins as compared to our alcohol-
hydrocarbon catalysts.
Reductive catalysts are a form of synthesis catalysts that offers greater efficiency as compared to
ammonia synthesis catalysts. Reductive catalysts are produced by deoxidising the oxidative catalysts,
where the oxidative catalysts undergo deoxidising and remove electrons from other chemical substances.
The reductive catalysts we manufacture can shorten the production lead time of ammonia from 7 days to
6 hours, as compared to existing oxidative catalysts produced by other manufacturers in the PRC. Due to
the more advanced production nature of reductive catalysts, our reductive catalysts generally command
better margins as compared to ammonia synthesis catalysts.
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An illustration of our Group’s manufacturing process for the catalysts is as follows:-
Smashing &
Blending Fusion Cooling Sifting Packaging
Smoothening
(i) Blending: The raw materials such as iron ore powders and other chemical reagents are mixed
together.
(ii) Fusion: The mixed raw materials are then sent to the fusion furnace and are heated to
approximately 1,600 degree Celsius. At this stage, raw materials are melted into metallic liquor
after the removal of contaminants.
(iii) Cooling: The heated metallic liquid flows through the cooling tank where cold water on the outer
layer of the cooling tank solidify the metallic liquid into solid catalyst block.
(iv) Smashing and smoothening: The cooled catalyst blocks are then crushed and smashed into
smaller catalyst pieces, and further smoothened.
(v) Sifting: Sieves of different diameters are used to screen catalyst pieces. Catalyst pieces that are
too small to be deemed useful are collected and recycled into step (ii) – fusion process, and the
remaining processes are repeated. On the other hand, catalyst pieces that are outsize will be left
on the top sieve and gathered to repeat step (iv) – smashing and smoothening process.
(vi) Packaging: The finished products are packed and stored in the warehouse.
PRODUCTION FACILITIES, EQUIPMENT AND CAPACITY

Production Facilities & Equipment
We carry out all our manufacturing activities at our Lufeng Plant and Lusong Plant.
(a) Lufeng Plant

Lufeng Plant is located at No.65, Lufeng Road, Changsha National Hi-tech Industrial Development
Zone, with a gross production area of approximately 7,000 sqm. We have three production lines in
the Lufeng Plant for manufacture of oxidative catalysts and a manufacturing plant for manufacture
of chemical system and components.
(b) Lusong Plant

Lusong Plant is located at No.539, Lusong Road, Changsha National Hi-tech Industrial
Development Zone, with a gross production area of approximately 15,000 sqm. We have one
production line in the Lusong Plant for manufacture of reductive catalysts and a manufacturing
plant for manufacture of chemical systems and components.
We carry out periodic maintenance and servicing for our production equipment. Save for such planned
maintenance and servicing shutdowns, we have not experienced any major shutdown or disruption to our
manufacturing operations.
Save that the utilisation of pressure vessels for manufacture of reductive catalysts shall comply with the
Regulations on Safety Supervision over Special Equipment ,
there is no PRC regulatory requirement or environmental issues that may materially affect our utilisation
of our fixed assets, all of which are located in PRC.
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Production Capacity and Utilisation
Our production capacity is generally limited by our production built-in area, equipment and manpower. The following table illustrates the aggregate maximum
production capacity and the approximate utilisation rate for the production of our chemical systems and components and catalysts at our Lufeng Plant and
Lusong Plant (which commenced operations in 2H2008) for each of FY2007, FY2008, FY2009 and 1Q2010:
FY2007 FY2008 FY2009 1Q2010

Maximum Actual Approximate Maximum Actual Approximate Maximum Actual Approximate Maximum Actual Approximate
Production Production Utilisation Production Production Utilisation Production Production Utilisation Production Production Utilisation
Capacity Output Rate Capacity Output Rate Capacity Output Rate Capacity Output Rate
(tonnes) (tonnes) (%) (tonnes) (tonnes) (%) (tonnes) (tonnes) (%) (tonnes) (tonnes) (%)
Chemical systems 4,370 (1) 3,200 (3) 73.2 (3) 8,750 (1) 5,500 (3) 62.9 (3) 13,125 (1) 5,800 44.2 (4) 3,280 (1) 2,200 67.1
and components
Catalysts 1,200 (2) 782 65.1 1,500 (2) 1,400 (3) 93.3 (3) 1,650 (2) 1,238 75.0 (4) 525 (2) 280 53.3
Notes:-
(1) CSC Business - The maximum annual production capacity of the production equipment used for the production of our chemical systems and components in FY2007, FY2008, FY2009 and
1Q2010 was calculated based the two factory premises located at Lufeng Plant and Lusong Plant, which have production areas of 7,000 sqm and 15,000 sqm respectively. Based on their
respective production areas, Lufeng Plant and Lusong Plant have a daily production capacity of approximately 14.6 tonnes and 29.2 tonnes per 14 man-hours respectively. Save that Lusong Plant
commenced operations in 2H2008 and had an aggregate of 150 operating days in FY2008, the number of operating days each year is 300 days. Without the capacity expansion attributed to the
new Lusong Plant which commenced operations in 2H2008, our Group would have to rely only on the older Lufeng Plant which has an estimated production capacity of approximately 4,370
tonnes per annum, as opposed to the new Lusong Plant which has an estimated production capacity of approximately 8,755 tonnes per annum. In addition, the newer and bigger facilities at
Lusong Plant allowed fabrication of more large-sized structures and consequently, the securing of contracts with higher value for our CSC Business. In line with the opening of the Lusong Plant
and increased production capacity from 2H2008 onwards, our Group was able to pursue more contracts of higher values where such contracts secured subsequently were mostly completed in
FY2009 onwards. Hence, the capacity expansion attributed to the new Lusong Plant was crucial to our Group’s business expansion in our CSC Business from FY2008 onwards.
(2) Catalyst Business - The maximum annual production capacity of the production equipment used for the production of catalysts in FY2007, FY2008, FY2009 and 1Q2010 varies between different
types of catalysts, namely oxidative and reductive catalysts. For the production of oxidative catalysts, the maximum annual production capacity was calculated based on three 8 man-hours shift
per day with a total of 330 operating days per year. Each oxidative catalyst production line has a daily production capacity of approximately 1.8 tonnes per day. In FY2007 and FY2008, there were
two oxidative catalyst production lines. In view of the increase in orders for our oxidative catalysts in FY2008, we added another production line in FY2009. The third production line started
operation in the last quarter of FY2009 with an aggregate of 82 operating days. For the production of reductive catalysts, the maximum annual production capacity was calculated based on
production cycles. One production cycle requires 6 operating days of 24 hours each. The reductive catalyst production line has the capacity to produce approximately 5.5 tonnes per cycle. The
maximum annual production capacity was calculated based on a total of 330 operating days per year. The reductive catalyst production line which started operation in FY2008 had an aggregate
of 55 cycles in FY2008.
(3) During FY2008, our actual production output and utilisation rates were relatively high as we deliberately increased our actual production output due to materials requirements of secured contracts
due for delivery in early FY2009 and anticipation of economic upturn and improved sales demand in FY2009. In addition, we were able to increase our actual production output from 2H2008 with
the increase in our production capacities as a result of the completion of our new production facilities at Lusong Plant in mid 2008. Accordingly, the actual production output in FY2008 was in
excess over actual sales volumes in FY2008, where such excess production output resulted in our higher inventory balances as at end of FY2008. Please also see the section entitled “Inventory
Management” of this Prospectus for more information.
(4) During FY2009, the decrease in the utilisation rates of the chemical systems and components production equipment was due mainly to the increase in production capacity by 50%, from 8,750
tonnes in FY2008 to 13,125 tonnes in FY2009, despite an absolute increase in actual production output. The decrease in utilisation rates of the catalysts production equipment in was mainly due
to lower actual production output in FY2009 versus FY2008 as we had deliberately increased our actual production output in FY2008 in anticipation of greater demand for our catalysts in FY2009
as aforementioned.
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Notwithstanding that we have disclosed in the above the production capacity and actual production
volumes of our CSC Business during the periods under review, the sales volumes (in tonnes) of our CSC
Business and the computation of average sales value per tonne cannot be used reliably as a measure of
our revenue and profitability, respectively. This is because each of our chemical systems may be
designed, manufactured and assembled according to our customers’ specifications and requirements. As
the various products under our chemical systems and components business have different pricing and
physical attributes, and may be customised according to our customers’ specifications, the aggregate
inventory and sales volumes in tonnes of our chemical systems and components business during the
periods under review cannot accurately reflect the economic values and trends of our chemical systems
and components inventories and sales for the corresponding periods.
On the other hand, our catalyst products are generally standard products. Accordingly, the aggregate
inventory and sales volumes in tonnes of our catalyst products during the periods under review are
relatively more in line with the economic values and trends of our catalysts inventories and sales for the
corresponding periods, save for effects arising from changing inventories and sales mix and selling
prices. Please refer to the section entitled “Management’s Discussion and Analysis of Results of
Operations and Financial Position” of this Prospectus for more information.
Power Supply
Electricity is the principal source of energy for our manufacturing operations. To date, we have not
experienced any prolonged power shortages or stoppages which have material and adverse effects on
our operations.
QUALITY CONTROL
We believe that having an established quality management system is one of the main factors contributing
to our success and is crucial to us maintaining our reputation as a manufacturer of quality products. As a
testimony to our commitment, efforts as well as capability in maintaining a quality management system,
we have been accredited by Moody International Certifications Ltd., for compliance with the requirements
of ISO 9001 Quality System since January 2001.
We conduct quality checks on all the products manufactured and oversee the implementation of the
quality controls at every stage of our production process in line with our quality management system. The
following quality control procedures have been implemented in our production process in line with our
quality management system:-
(a) Establishment of quality control standards

For manufacturing of chemical systems and components and catalysts, we have set in place
stringent quality control standards to implement strict measures for quality control in the
manufacturing. Such standards follow strictly in accordance with the national and industry
standards as well as the standards and guidance set in accordance with the ISO 9001 Quality
System. We also take into account customers’ specifications and requirements and quality
feedback from our previous customers to supplement our quality control standards.
For our system design, we ensure the design of every project is carried out in line with (i) the
relevant PRC laws and regulations; (ii) the relevant technical specifications and industry standards;
and (iii) our customers’ requirements.
(b) Quality control during procurement

Direct materials are purchased only from pre-selected suppliers after evaluation and testing by our
procurement personnel, quality control personnel and production personnel based on stringent
selection criteria such as quality of their raw materials and services, material sources, pricing,
accreditations, track record, financial condition and market reputation. For certain crucial direct
materials used in our production, we may conduct site visits prior to the appointment as one of our
pre-selected suppliers. The list of pre-selected suppliers is subject to further review by our
Executive Director and COO, Liang Gong Zeng, and/or our senior management on an annual
basis.
94
(c) Quality control during manufacturing process
Before the production, incoming direct materials are subject to inspections by our quality control
personnel to ensure that they are supplied by approved suppliers, and that the quality, grade and
quantity of such direct materials conform to our specifications and requirements as well as our
quality control standards. For direct materials which fail to comply with these specifications, these
direct materials will be rejected or modified for other utilisation.
We continuously monitor our manufacturing process and carry out inspections at systematic
intervals throughout the process to ensure consistency in the quality of the chemical systems and
components and catalysts. Our quality control personnel and production personnel conduct tests
and inspections at the various stages of production to ensure that defective semi-completed
products do not proceed to the next stage of the production. In particular, the pressure vessels are
subject to further testing and examination by the local Administrative Department of Safety
Inspection for Special Equipment . Any defective part will be removed
from the production line and get rectified if possible, thereby minimising defective products from
being produced.
As to system design, we will maintain close communication and engage constant discussion with
our customers so that we can modify our engineering design in accordance with customers’
feedback and requirements and relevant technical specifications and industry standards, and avoid
affecting the progress and quality.
(d) Quality control on finished products

We conduct overall inspections and testing on finished products before they are painted, packed
and stored in the warehouse, ready for despatch to customers.
In addition, after the chemical systems and components are sent to customers’ factory sites, they
undergo a series of inspections and testing to ensure compliance with our quality standards and
customers’ design and specifications.
Upon the successful testing and commissioning of our system design and/or chemical systems and
components by our customers, the warrant period (which is usually a period of 12 months)
commences and during this period, we will attend to any complaints regarding defects in the
equipment or systems.
As at the Latest Practicable Date, we have not encountered any instances where our products or
services were materially rejected by our customers due to quality concerns.
(e) Review on our quality management system

To create a virtuous circle of our quality management system, we take into account the feedbacks
from our employees who are involved in each of the quality control processes, as well as feedbacks
on the performance of our products and system design from our customers. Thereafter, we review
and improve upon our quality management systems to ensure quality products and services.
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SALES AND MARKETING
Our Head of Sales and Marketing Department, Li Chun Yang, heads our sales and marketing department
which is staffed by 19 sales and marketing personnel as at 31 March 2010. Our sales and marketing
team is responsible for formulating sales and marketing strategies through market research and survey,
cultivating new customers and businesses, participation in open tenders and direct marketing,
maintaining customer relationships, coordinating and providing pre-sale and after-sale customer services.
Even though we have customers who approach us directly as a result of our reputation or customer
referrals, we place emphasis on promoting market awareness of our products and technology solutions.
Our sales and marketing strategies include:-
(i) Direct sales and marketing activities

For potential customers, based on our market survey and research and understanding of their
needs and technical specifications, we provide pre-sales consultation to them and recommend
products and technology solutions tailored to their purposes. We will also arrange the potential
customers to visit our existing customers’ production facilities to allow them gain an overall and
better understanding of our technical capability, product performance and quality as well as our
services and therefore build up confidence in our products and technology solutions.
For existing customers, our sale personnel may also conduct meetings and visits to obtain
feedback on the performance and operating results of our products and the systems we designed
so as to understand their changing needs. Given that these existing customers are already using
and familiar with our chemical systems and components, whenever we successfully develop new
product and technology and after analysing their applicability and compatibility to the existing
customers’ production systems, we will introduce them to our customers for their consideration.
(ii) Tendering for project

In an attempt to expand our customer base, we also source business through open tenders via
various channels such as invited tenders and announcements by our customers, where competitive
bidding processes are arranged by the potential customers.
(iii) Participation in industrial conferences and exhibitions

We participate in various industrial conferences and exhibitions in the PRC, such as 2008 China
International Nitrogen Fertiliser and Methanol Conference 2008 , in order to
identify new customers and generate increased awareness of our products and technologies. This
also helps us keep abreast of current market trends and use the information gathered to respond
to the evolving needs of our customers in a timely manner.
(iv) Publication and advertisement

We publish thesis on our products and technology solutions in various industry publications and
also make advertisements in such publications. Such professional publications include Fertiliser
Design , Fertiliser Industry , Nitrogen Fertiliser Design , which are
widely subscribed by our customers and potential customers in our industry.
As at the end of FY2009, we have a customer base of approximately 320 different customers (of which
comprising provinces, autonomous regions and municipalities in PRC. As part of our future plans, we
intend to expand our sales and marketing capabilities and initiatives. Please refer to the section entitled
“Business Strategies and Future Plans” of this Prospectus for more information.
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AWARDS AND ACCREDITATION
Our Group’s commitment to excellence is evidenced by the following national and provincial
awards/accreditations:-
Date Awards Certification Body Significance
5 April 1999 Golden Medal for Gas-solid Organising Committee of Affirmation of the ammonia
Ammonia Synthesis Reactor in China Inventions and New synthesis reactor technology
China Fair of Inventions and Technologies Fair being a technological
New Technologies sponsored and breakthrough
by the State Intellectual Specialist Committee of
Property Office of PRC China Inventions and New
Technologies Fair
18 December China Petroleum and China Petroleum and In recognition of outstanding

2002 Chemical Industrial Technology Chemical Industries operational results, economic
Progress Award (2nd-highest Association and social benefits of the
honours) alcohol-hydrocarbonylation
refining process technology
20 January 2003 National Scientific and State Council of PRC In recognition of outstanding
2004 Technological Progress Award operational results, economic
(2nd-highest honours) – and social benefits of the
alcohol-hydrocarbonylation alcohol-hydrocarbonylation
refining process technology refining process technology
being a technological
progress
March 2004 2003 Outstanding Engineering China Petroleum and The alcohol-hydrocarbonylation
Design (2nd-highest honours) Chemical Engineering Survey refining and ammonia
– engineering design provided and Design Association synthesis system is well-
to Feng Xi Fertiliser Group, designed and stable, and it
Linyi Branch Company has achieved satisfactory
operational and outstanding
energy-saving results
December 2004 China Chemical Industry China Petroleum and Affirmation of technological
Technology Innovation Model Chemical Industries innovation capabilities
Enterprise Association
September 2005 2005 China Petrochemical and China Petroleum and Affirmation of integrated
Chemical Industries Chemical Industries capabilities and growth
Outstanding Private Enterprise Association potential in the petrochemical
and chemical industries
2005 Excellent Engineering Design Construction Department of The ammonia synthesis and
of Hunan Province (First-prize) Hunan Province urea production system is
– engineering design provided well-designed and stable,
to Shandong Deqilong and it has achieved
Chemical Group Co., Ltd. satisfactory operational and
outstanding energy-saving
results
November 2006 Scientific and Technological China Nitrogen Fertiliser In recognition of great
Progress Award (First-prize) – Industry Association environmental protection
waste treatment solutions in benefits and outstanding
nitrogen fertiliser production energy-saving results
97
November 2006 Underpinning Technology for China Nitrogen Fertiliser Endorsed by the China
Recycling Economy of the Industry Association Nitrogen Fertiliser Industry
Nitrogen Fertiliser Industry Association in recognition of
(2007-2010) – waste treatment its great environmental
solutions in nitrogen fertiliser protection benefits and
production outstanding energy saving
results
February 2007 2007 State Focus China Environmental Affirmation of the application
Environmental Protection Protection Industry of the alcohol-
Application Technology (Grade Association hydrocarbonylation refining
A) process technology being
energy saving and
environmentally acceptable
to prevent environmental
pollution and ecological
damage
October 2007 Top 500 China Chemical China Chemical Enterprise Affirmation of our business
Industry Profitable Enterprise Management Association and operations being
and profitable in the chemical
China National Chemical industry
Information Association
January 2008 Proprietary Technology China Petroleum and Affirmation of our proprietary
Certificates Chemical Engineering rights over the alcohol-
Survey and Design hydrocarbon reactors
Association technology, ammonia
synthesis reactor technology
and methanol synthesis
reactor technology, which are
popular and innovative
technologies
November 2008 Advanced New Technology Science and Technology Affirmation of our strong
Enterprise Department of Hunan R&D capabilities and
Province , competitive strengths
Finance Department of
Hunan Province
, State Taxation Bureau
of Hunan Province
, Local Taxation
Bureau of Hunan Province
August 2009 Underpinning Technology of China Nitrogen Fertiliser Endorsed by the China
the Nitrogen Fertiliser Industry Industry Association Nitrogen Fertiliser Industry
– methanol synthesis reactor Association in recognition of
technology its innovative design,
improved synthesis efficiency
and reduced energy
consumption
8 April 2010 Certificate of Registration for Moody International Quality control for
Compliance of ISO 9001 : Certification Ltd. manufacture of chemical
2008 Quality Management systems and components,
System catalyst as well as provision
of technology solutions being
in compliance with the ISO
9001 : 2008 standards
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August 2009 Underpinning Technology of China Nitrogen Fertiliser Endorsed by the China
the Nitrogen Fertiliser Industry Industry Association Nitrogen Fertiliser Industry
– XA201 ammonia synthesis Association in recognition of
catalyst technology its superior performance in
the ammonia synthesis
process
January 2009 2009 Forbes China Up & Forbes China magazine Affirmation of its growth
Comers potential
OUR MAJOR CUSTOMERS

Our customers are mainly from the petrochemical and chemical industries in the PRC. As at the end of
FY2009, we have a customer base of approximately 320 different customers (of which certain customers
belong to the same group of companies) across 26 province-level administrative units comprising
provinces, autonomous regions and municipalities in the PRC.
Our major customers who accounted for 5% or more of our business for FY2007, FY2008, FY2009 and
1Q2010 are as follows:
Types of Products/ As a percentage of our

Name of Customer Services (1) Group’s revenue (%)
FY2007 FY2008 FY2009 1Q2010
Jincheng Anthracite Mining group A, B, C 26.3 21.8 35.6 7.4

(2)
Shanxi Tianze group A, B, C 15.8 0.5 8.4 –

(3)
Sinofert group A, B, C 10.0 2.1 – –

(4)
China XLX group A, B, C 8.8 3.7 17.8 –

(5)
Guizhou Kailin group A, B, C – 7.2 6.3 –

(6)
Fubao group B – 6.3 – –

(7)
Shandong Ruixing Runyin Biochemical A, B – – 6.5 –

Co. Ltd.
(8)
Yunnan Yunwei Group Co., Ltd. A, B 2.0 – 0.9 33.2

(9)
China Haohua Chemical group B – – 0.3 21.9

(10)
Yangmei group A, B, C – – 0.1 8.5

(11)
Total 62.9 41.6 75.9 71.0
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Notes:-
(1) “A” refers to chemical systems engineering and technology design services; “B” refers to chemical systems and components;
and “C” refers to catalysts.
(2) We supplied the full range of our products and services to various customers within Jincheng Anthracite Mining group
(“JAMG”) , namely Shandong Mingshui Chemical Joint-stock Co., Ltd. , Shanxi Jinfeng
Coal Chemical Co., Ltd. , Jiangsu Hengsheng Fertiliser Co., Ltd. ,
Dafeng Jingli Fertiliser Co., Ltd. , Kaifeng Jinkai Chemical Co., Ltd.
and Hubei Sanning Chemical Joint-stock Co., Ltd. . To the best of our knowledge and belief,
JAMG is based in Shanxi province and is a large petrochemical and chemical group in the PRC.
(3) We supplied the full range of our products and services to various customers within Shanxi Tianze group ,
namely Shanxi Tianze Coal Chemical Co., Ltd. and Jincheng Tianze Yongfeng Fertiliser Co.,
Ltd. . To the best of our knowledge and belief, Shanxi Tianze group is based in Shanxi
province and is a large petrochemical and chemical group in the PRC.
(4) We supplied the full range of our products and services to Zhonghua Pingyuan Chemical Co., Ltd.
(formerly known as Shandong Deqilong Chemical Co., Ltd. ), which is part of the Sinofert group
. To the best of our knowledge and belief, Sinofert group has various presences across the PRC and is a large
chemical fertiliser group in the PRC, of which the holding company of the Sinofert group, Sinofert Holdings Limited, is listed
on the Hong Kong Stock Exchange. Sinofert group is part of the Sinochem group , which is also listed on the
Shanghai Stock Exchange.
(5) We supplied the full range of our products and services to Henan Xinlianxin Chemical Co., Ltd. , an
affiliate of the China XLX group , in FY2007 and FY2008, and Henan Xinlianxin Fertiliser Co., Ltd.
, which is the main operating subsidiary of the China XLX group , in FY2008 and
FY2009. To the best of our knowledge and belief, the plant and equipment procured by Henan Xinlianxin Chemical Co., Ltd.
from us were being utilised by and subsequently transferred to the China XLX group. China XLX group is based in Henan
province and is a large chemical fertiliser and chemical group in the PRC, of which the holding company of the China XLX
group, China XLX Fertiliser Ltd., is dual-listed on both the SGX-ST and the Hong Kong Stock Exchange.
As part of our sales and marketing initiatives, we had entered into a memorandum of understanding with China XLX group to
enhance mutual cooperation in respect of new technologies and equipment used in the production of chemical fertilisers on
30 April 2010 which is valid for two years from the date of the memorandum. Such cooperation include (i) Hunan Anchun and
China XLX group notifying each other at the first instance in respect of any new development in technologies or equipment
and requirements for new technologies and equipment, as the case may be; (ii) giving priority to each other in the
procurement or supply of such technologies and equipment respectively. Nevertheless, such memorandum is not legally-
binding and terms of any future transactions between both parties shall be negotiated on arm’s length basis and subject to
the execution of formal sale and purchase contracts. We may also enter into similar collaborations with other customers as
and when the opportunities arise.
(6) We supplied the full range of our products and services to Guizhou Kailin Jianjiang Fertiliser Co., Ltd.
, which is part of the Guizhou Kailin group . To the best of our knowledge and belief, Guizhou Kailin
group is a chemical fertiliser and chemical group based in Guizhou province, PRC.
(7) We supplied chemical systems and components to Fujian Shunchang Fubao Industry Co., Ltd.
, which is part of the Fubao group . To the best of our knowledge and belief, Fubao group is a chemical fertiliser
and chemical group based in Fujian province, PRC.
(8) We supplied chemical systems engineering and technology design services as well as chemical systems and components to
Shandong Ruixing (Runyin) Biochemical Co., Ltd. . To the best of our knowledge and
belief, it is a chemical fertiliser and chemical enterprise based in Shandong province, PRC.
(9) We supplied chemical systems engineering and technology design services as well as chemical systems and components to
Yunnan Yunwei Group Co., Ltd. . To the best of our knowledge and belief, Yunnan Yunwei Group Co.,
Ltd. is a petrochemical and chemical enterprise based in Yunnan province, PRC, and is listed on the Shanghai Stock
Exchange.
(10) We supplied chemical systems and components to China Haohua Group Chemical Co., Ltd. ,
which is part of the China Haohua Chemical group (“CHC group”) . To the best of our knowledge and
belief, CHC group is based in Hebei province and is a large petrochemical and chemical group under the China National
Chemical Corporation group (“ChemChina”) .
(11) We supplied the full range of our products and services to Shanxi Yangmei Fengxi Fertiliser Group Co., Ltd.
and Yangmei Group Shenzhou Fertiliser Factory , both of
which are part of the Yangmei group . To the best of our knowledge and belief, Yangmei group is based in Shanxi
province and has diversified business interests (including chemical fertiliser and chemical industries) with two listed entities
on the Shanghai Stock Exchange and Shenzhen Stock Exchange respectively.
100
During the periods under review, our major customers generally did not make recurrent purchases from
us of the same quantum (if any) and/or same types of products and/or services in consecutive financial
years/periods. This was due mainly to the nature of our products and services, which mainly relate to
production capacity expansion/enhancement and hence capital expenditure projects of our customers.
Accordingly, our customers typically will not execute such production capacity expansion/enhancement
plans and capital expenditure projects in consecutive periods. Please refer to the section entitled “Risk
Factors - Our financial performance may fluctuate from period to period due to the nature of our
business” of this Prospectus for more information.
In addition to the above major customers, our other notable customers include Shandong Hualu
Hengsheng Chemical Co., Ltd. (listed on the Shanghai Stock
Exchange), Jiangsu Huachang Chemical Co., Ltd. (listed on the Shenzhen
Stock Exchange) and subsidiary of Sichuan Meifeng Chemical Industry Co., Ltd.
(listed on the Shenzhen Stock Exchange).
To the best of our Directors’ knowledge, we are not aware of any information or arrangements which
would lead to a cessation or termination of our current relationship with any of our major customers of our
business.
Go Power and China XLX participated in the investment in our Company through the Convertible Loan
Investment. Upon the Conversion, Go Power and China XLX will hold 4.1% and 4.9% shareholding
interest in the pre-Invitation share capital of our Company, respectively. Please refer to the section entitled
“Restructuring Exercise” of this Prospectus for details. Pursuant to Section 7(4A) of the Act, as Go Power
holds not less than 20% of voting rights in China XLX, Go Power (and Yan Yun Hua) is deemed interested
in China XLX’s 4.9% shareholding interest in our Company. As such, Go Power is a Substantial
Shareholder of our Company by virtue of its 4.1% direct interest in our Company and 4.9% deemed
interest held through China XLX.
Henan XLX, one of our major customers, is the wholly-owned subsidiary of China XLX in the PRC
(collectively, the “China XLX group”). Go Power, which owns approximately 28.1% of the shareholding
interest in China XLX, is deemed interested in Henan XLX.
Save as disclosed above, none of our Directors or Substantial Shareholders or their respective associates
has any interest, direct or indirectly, in any of the above major customers, or vice versa. Please refer to
the sections entitled “Restructuring Exercise”, “Shareholding and Ownership Structure” and “Potential
Conflict of Interests” of this Prospectus for more information.
OUR MAJOR SUPPLIERS

Direct materials used by our Group comprised mainly different types of steel (such as carbon and
stainless steel) as well as different types of chemicals (such as copper and cobalt). Of which, steel
accounted for 73.4%, 71.7%, 73.8%, 78.1% and 69.4% of the overall cost of sales for our Group in
FY2007, FY2008, FY2009, 1Q2009 and 1Q2010, respectively. Accordingly, all of our major suppliers are
suppliers of steel-related products. Please refer to the section entitled “Management’s Discussion and
Analysis of Results of Operations and Financial Position” of this Prospectus for more information.
We typically select our suppliers for each of the direct materials used in our production having regard to
criterions such as pricing, product quality and ability to deliver on time. To facilitate timely purchases of
direct materials, we keep a list of qualified suppliers who had demonstrated reliability in product quality
and delivery time as well as pricing competitiveness. Such list is subject to review by our senior
management and our Executive Director and COO, Liang Gong Zeng, on an annual basis.
We have access to a large pool of suppliers for our direct materials as our production facilities are located
in Changsha City, which has a multimodal transportation network connecting it to major cities in the PRC.
Our direct materials are currently sourced from within the PRC and therefore, all of our purchases are
transacted in RMB. Accordingly, we are not subjected to any significant risk in exchange rates fluctuations
in the purchase of direct materials.
101
We do not enter into long term contracts with our suppliers and we do not hedge or have the intention to
hedge the price or volume of our direct materials in the near future due to, inter alia, our practice of fixing
the prices of the direct materials required at approximately the same time as the contracts we signed with
our customers. Please refer to the section entitled “Inventory Management” of this Prospectus for more
information.
Our major suppliers of direct materials who accounted for 5% or more of our total purchases for FY2007,
FY2008, FY2009 and 1Q2010 are as follows:
Materials
Name of Supplier supplied Percentage of total purchases (%)
FY2007 FY2008 FY2009 1Q2010
Wuhan Tongshun Metal Products Co., Ltd. Steel 24.1 20.0 16.7 13.2
Hunan Jinghua Metal Co., Ltd. Steel 15.8 4.6 1.6 0.7
Changzhou Jiangyang Stainless Steel Co., Ltd. Steel 5.5 3.1 1.5 3.4
Xuchang Peiyang Materials Co., Ltd. Steel 5.2 11.3 18.0 11.3
Jiangsu Changshu Yixing Steel Co., Ltd. Steel 4.8 5.1 3.5 1.2
Hunan Ruilin Trading Co., Ltd. Steel 4.2 4.6 5.5 3.8
Wuxi Xinyutong Stainless Steel Co., Ltd. Steel 3.4 5.1 2.3 5.4
Hunan Shunxing Stainless Steel Trading Steel 1.3 1.9 5.2 5.5
Co., Ltd.
Taian Shankou Forging Co., Ltd. Steel 0.5 2.3 5.4 2.7
Hangzhou Tongdi Heavy Forging Co., Ltd. Steel 0.4 0.8 6.1 4.3
Total 65.2 58.8 65.8 51.5
During the periods under review, the above year-to-year fluctuations in our purchases from amongst our
major suppliers were due mainly to competitive pricing reasons as well as changes in mix of
specifications, materials and quality requirements.
To the best of our Directors’ knowledge, we are not aware of any information or arrangements which
would lead to a cessation or termination of our current relationship with any of our major suppliers of our
business.
None of our Directors or Substantial Shareholders or their respective associates has any interest, direct
or indirectly, in any of the above major suppliers, or vice versa.
102
RESEARCH AND DEVELOPMENT
Our R&D activities are initiated and led by our Executive Chairman and CEO, Xie Ding Zhong, assisted
by our Executive Director, Dai Feng Yu, both of whom hold key appointments in various national and
provincial industry associations and bodies, such as Methanol Technology Committee of National
Chemical Ammonia Synthesis Design Centre ,
China Chemical Industry Environmental Protection Association , and Chemistry and
Chemical Industry Academy of Hunan Province . As at the Latest Practicable Date,
we have over 120 of our project/process engineers who actively participate in the R&D process through
their respective job functions.
Our R&D capabilities

Based on the CNCIC report dated 13 September 2010, we have one of the largest R&D and
manufacturing capabilities for ammonia and methanol related systems and technologies in the PRC.
Please refer to the section entitled “Industry Overview” of this Prospectus for more information. Our R&D
is crucial in providing us with a competitive edge which keeps us ahead of our competitors. Our
significant R&D success is evidenced by the following awards and endorsements granted by various PRC
governmental authorities and/or industry associations and bodies:-
2003 National Scientificand Technological Progress Award (2nd-highest honours)

by the State Council which were regarded as one of the most
prestigious awards in recognition of contribution to the PRC national technological advancement
Golden Medal in China Fair of Inventions and New Technologies sponsored by the State
Intellectual Property Office of PRC by the Organising Committee of China Inventions and New
Technologies Fair and Specialist Committee of China Inventions
and New Technologies Fair
13 registered patents and another 4 patent pending applications in the PRC, and 1 international
patent pending in the United States, Canada and European Union (1)
Advanced New Technology Enterprise by Science and Technology Department of Hunan Province
, Finance Department of Hunan Province , State Taxation
Bureau of Hunan Province , Local Taxation Bureau of Hunan Province
Three proprietary technologies(2) endorsed by China Petroleum and Chemical

Engineering Survey and Design Association
Three underpinning technologies(3) of the Nitrogen Fertiliser Industry

endorsed by China Nitrogen Fertiliser Industry Association
2007 State Focus Environmental Protection Application Technology (Grade A)

by China Environmental Protection Industry Association
Notes:-
(1) Pursuant to the relevant patent laws in the United States, a patent shall be applied for in the name or names of the actual
inventor or inventors. Therefore, in the process of the patent application, the patent applicants are the individual inventors
instead of Hunan Anchun. The individual inventors have affirmed that this patent is an employee invention, patent ownership
of which shall be registered under Hunan Anchun. They have relinquished the ownership rights over this patent to Hunan
Anchun and undertaken to transfer the patent to Hunan Anchun after the international patent is successfully registered in the
United States, Canada and European Union. Please refer to the section entitled “Intellectual Property – Patent” of this
Prospectus for more detail.
(2) The three proprietary technologies are alcohol-hydrocarbon reactors technology, ammonia synthesis reactor technology and
methanol synthesis reactor technology.
(3) The three underpinning technologies are methanol synthesis reactor technology, XA201 ammonia synthesis catalyst
technology and waste treatment solutions in nitrogen fertiliser production.
103
Please refer to the sections entitled “Awards and Accreditation” and “Intellectual Property” of this
Our R&D activities

Our R&D initiatives are focused on developing and introducing new technologies to cater to our
customers’ evolving needs and thereby expanding our range of integrated products and solutions. With
the aims to creating long-term value for our customers, we strive towards seeking environmentally
acceptable solutions to conserve resources, reduce pollutant emissions, and increase the production
capacity, efficiency, stability and durability of our chemical systems and components. Please refer to the
section entitled “Our Core Principles of Production Efficiency, Energy Saving and Environmental
Protection” of this Prospectus for more information on the effects of our technology solutions and
products.
We rely on feedback from our customers and market resources such as exhibition and seminars,
websites and international and domestic professional journals and publications, to understand market
demands and our customers’ needs, technology development trends and our competitors’ products and
technologies. By leveraging on our strong R&D capabilities and manufacturing expertise, we are able to
commercialise our R&D efforts into successful new technologies and products within a shorter period.
In response to our customers’ needs, we are in the process of developing two new chemical systems and
components, namely, (i) the gas making system and components , which are used to
process the coal and obtain raw gas for ammonia and methanol synthesis; and (ii) raw gas conversion
system and components , which are used to convert CO and water
vapour (H2O) into CO2 and H2 in the raw gas purification process. The two new technologies aim to
resolve the current technological restrictions and environmental issues, such as unstable and intermittent
reactions, low efficiency, waste of energy and pollutions. If successful, we will be able to expand our
product range and technology solutions to better serve our customers, as well as reinforce our leading
position and enhance our competitiveness in the PRC chemical systems engineering and technology
solutions industry.
Collaborations with other institutions and our customers

We work with reputable academic institutions and research institutes as well as our customers to jointly
undertake specific R&D projects on an ad-hoc basis. We believe that such collaborations enable us to,
inter alia, (i) reduce the time-to-market for our R&D initiatives; (ii) increase the industrial applicability of
our products and services; and (iii) enable us to tap onto the technical expertise of the relevant academic
institutions and external research institutes and thereby boosting our competitiveness. For example, in
2003, we co-operated with the China Nitrogen Fertiliser Industry Association to
develop waste treatment solutions in nitrogen fertiliser production ,
which integrates our key technologies for waste treatment. This technology is considered to be an
underpinning technology for the recycling economy in the PRC nitrogen fertiliser industry which allows
the nitrogen fertiliser manufacturers to engage in environmentally friendly production.
Our R&D expenses

Our R&D expenses for FY2007, FY2008, FY2009 and 1Q2010 was approximately RMB9.1 million,
RMB8.8 million, RMB8.8 million and RMB5.9 million respectively, which was approximately 7.9%, 7.2%,
3.0% and 8.7% of our revenue in each of those years/periods.
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INTELLECTUAL PROPERTY
Trademarks
We believe that our trademarks have significant value and are important to our brand-building efforts and
the marketing of our business.
As at the Latest Practicable Date, Hunan Anchun owns the following trademarks:-
No. Trademark Place of Registration Class(1) Trademark Number Validity Term
1 PRC 7 No.1625702 From 28-08-2001

To 27-08-2011
2 PRC 35 No.4412672 From 14-07-2008

To 13-07-2018
Note:-
(1) Class 7 is used for products including synthesis reactor; fertiliser equipment; condensing tower; ammonia separating tower;
water scrubber. Class 35 is for product to be used in advertisement; tender and quotation; organisation for technology
exhibitions; management and consulting of human resources; documents copy; words processing; accounting; business
information; advertisements posting.
Our Directors are not aware of any reason which would cause or lead to non-renewal of the above
trademark registrations in respect of our trademarks.
To the best of our Directors’ knowledge and belief, our Company is not aware of any third party that is
currently using a trademark similar to our trademarks in the PRC.
Patents
We believe that our patented technologies have significant value and are important to our business and
profitability.
As at the Latest Practicable Date, Hunan Anchun has obtained the following patents in the PRC:-
Patent
No. Patent Type Name Number Validity Term Date of Grant
1 Invention Patent Flow dividing process for ZL96 1 From 22-11-1996 03-03-2006
ammonia or alcohol synthesis 18424.8 To 21-11-2016
reaction system
2 Invention Patent Water-piping isothermal methanol ZL 2004 1 From 26-11-2004 05-09-2007

reactor 0046980.5 To 25-11-2024
3 Invention Patent Multistage gas solid chemical ZL 2005 1 From 09-11-2005 26-03-2008
reactor 0032358.3 To 08-11-2025
4 Invention Patent Multi-layer radial ammonia ZL 2007 1 From 05-09-2007 14-04-2010

synthesis reactor 0035684.9 To 04-09-2027
5 Invention Patent Ammonia-alcohol ratio ZL 94 1 From 30-03-1994 13-01-2006

adjustable technology for 10903.8 To 29-03-2014
refining raw-material gas for
synthesis of ammonia
105
Patent
No. Patent Type Name Number Validity Term Date of Grant
6 Invention Patent A joint process for preparing ZL 02 1 From 16-04-2002 16-02-2005

alcohol-ether, alcohol- 09000.9 To 15-04-2022
hydrocarbon and synthesising
ammonia
7 Utility Model Patent Radial cold pipe bundle ZL 02 2 From 07-02-2002 22-10-2003
for gas-solid phase reactor 23452.7 To 06-02-2012
8 Utility Model Ammonia synthetic gas cooling ZL 02 2 From 06-08-2002 17-09-2003

Patent and condensing separator 77027.5 To 05-08-2012
9 Utility Model Hanging water pipe isothermal ZL 2005 2 From 09-11-2005 21-03-2007
Patent methyl alcohol reactor 0052396.0 To 08-11-2015
10 Utility Model Steam generator employing ZL 2005 2 From 09-11-2005 27-12-2006

Patent synthetic reaction heat 0052395.6 To 08-11-2015
11 Utility Model Synthesis reactor and reaction ZL 2006 2 From 18-04-2006 08-08-2007
Patent heat utilisation 2 in 1 device 0050709.3 To 17-04-2016
12 Utility Model Separately-loaded phase- ZL 2007 2 From 31-01-2007 12-03-2008

Patent change cooling reactor 0062372.2 To 30-01-2017
13 Utility Model Water-pipe type isothermal ZL 2004 2 From 15-11-2004 09-11-2005

Patent methanol reactor 0069178.3 To 14-11-2014
In addition, we have applied for an international patent under the Patent Cooperation Treaty (“PCT”) for
the technology known as a joint process for preparing alcohol-ether, alcohol-hydrocarbon and
synthesising ammonia in the United States, Canada and the
European Union in 2003 (the “PCT Patent”).
However, pursuant to the relevant patent laws in the United States, a patent is applied for in the name or
names of the actual inventor or inventors. Therefore, in the process of the PCT Patent application in the
United States, the PCT Patent’s applicants are the individual inventors who are all employees of Hunan
Anchun, namely, Xie Ding Zhong, Dai Feng Yu, Feng Yong and Li Chun Yang, rather than Hunan Anchun.
Pursuant to the confirmation letter dated 17 April 2003 and notarised declaration dated 29 June 2010,
each of Xie Ding Zhong, Dai Feng Yu, Feng Yong and Li Chun Yang has affirmed that the PCT Patent is
an employee invention, patent ownership of which shall be registered under Hunan Anchun. They have
relinquished the ownership rights over this patent to Hunan Anchun and undertaken to transfer the PCT
Patent to Hunan Anchun after the PCT Patent is successfully registered in the United States.
106
In addition, the following patents have been submitted under Hunan Anchun’s name to the State
Intellectual Property Office of the PRC and subject to its further review:-
No. Patent Type Name Application Date
1 Invention Patent Method of controlling and utilizing ammonia synthesizing 25-12-2006

reaction heat
2 Invention Patent Isothermal and low-temperature CO exchange reactor 04-12-2009
3 Invention Patent Swirl molten bath gasifier 04-01-2010
4 Utility Model Patent Swirl molten bath gasifier (1)

04-01-2010
Note:-
(1) On 6 August 2010, the State Intellectual Property Office of the PRC notified Hunan Anchun that the patent right in respect of
the utility model patent (No. 201020003302.1) has been approved in principle, subject to the payment of the applicable patent
registration fee and the completion of the relevant registration procedures by 21 October 2010. Thereafter, the State
Intellectual Property Office of the PRC will announce the registration of the patent accordingly and Hunan Anchun will be
officially granted the patent right. The patent right will be effective after the announcement date for a period of ten years from
the application date.
We have also entered into confidentiality agreements with our employees who may come into possession
of our proprietary technologies in the course of their employment with us, and control access to, and
distribution of, our documentation of our proprietary technologies.
PROPERTIES AND FIXED ASSETS

Properties
As at the Latest Practicable Date, the following table sets out all the material properties owned and used
by our Group.
Industrial Lands:-
Approximate
Land Area Use/
No. Description and Location (sqm) Tenure Activities Encumbrance
1 Industrial Base of Wang 22,592.82 26-08-2052 Industrial Nil

Cheng Po in Changsha City, Use
Hunan Province, PRC
2 National Hi-tech Industrial 906.92 20-12-2052 Industrial Nil

Development Zone in Use
Changsha City, Hunan
Province, PRC
3 No. 776, Furong Middle 176.52 03-08-2049 Commercial Nil

Road, Tianxin District, use
Province, PRC
4 National Hi-tech Industrial 57,051.14 31-12-2056 Industrial Nil

Development Zone in Use
Province, PRC
107
Buildings
Approximate
Built-in Area
No. Description and Location (sqm) Use/Activities Encumbrance
1 No. 776, Furong Middle 1,422.49 Office Building Nil

Road, Tianxin District,
Province, PRC
2 No. 65, Lufeng Road, Yuelu 5,714.11 Factory Building Nil

District, Changsha City, and Office
Hunan Province, PRC

District, Changsha City,
Hunan Province, PRC

District, Changsha City, and Office
Hunan Province, PRC
Fixed Assets
Other material fixed assets used by our Group comprise the equipment deployed at our Lufeng Plant and
Lusong Plant, details of which are set out in the section entitled “Production Facilities, Equipment and
Capacity” of this Prospectus.
As at the end of 1Q2010, net book value of our property, plant and equipment amounted to RMB117.2
million. Our Group has obtained all relevant certificates for its land use rights and buildings.
STAFF TRAINING
The training that we conduct can be divided into basic training, compulsory training and enhancing
training.
Basic training includes orientation training and occupational safety training. Orientation training is to
educate the new employees on company policies and basic skills and knowledge as would be relevant to
their respective job functions. Occupational safety training is to educate our production staff on
occupational safety at our production facilities and to train them on safety precautions which they are
expected to adopt in the course of their work. This includes knowledge about handling machinery and
emergency situations such as the occurrence of accidents or fires or other situations which may require
medical attention.
Compulsory training is training required by laws and regulations, which are for the purpose of maintaining
our employees’ relevant qualifications and accreditations and keeping them informed of the skills and
knowledge necessary for their respective job functions. Such training is normally given by relevant
accrediting bodies, governmental and industrial organisations and quality assurance associations.
Enhancing training is for the purpose of improving our employees’ professional skills and updating them
on the latest development trends and technologies. We also engage external trainers to conduct training
or select employees to participate in short-term training courses.
108
INSURANCE
We maintain insurance for our full-time employees which provides coverage for retirement, work-related
accidents, retrenchment, maternity benefits and medical expenses.
As at the Latest Practicable Date, we also hold property insurance policies to cover Hunan Anchun’s fixed
assets including plant and equipment with a total coverage of approximately RMB122.2 million.
All the above policies are in existence and the premiums have been paid thereon. These insurance
policies are reviewed annually to ensure that the coverage is adequate. Our Directors believe that the
coverage from these insurance policies is adequate for our present operations.
Currently, we have not taken up any product liability insurance for the products manufactured by us or for
our work-in-progress products as it is neither an industry requirement nor practice within our industry to
do so. Since our inception, we have not experienced any significant product defects to date. Please also
refer to the section entitled “Risk Factors – We may not have sufficient insurance coverage” of this
PERMITS, APPROVALS, CERTIFICATIONS & GOVERNMENT REGULATIONS

As a chemical systems engineering and technology solutions provider in the PRC, our business involves,
inter alia, provision of chemical systems engineering and technology design services, design,
manufacture and/or sale of chemical systems and components (such as pressure pipelines and pressure
vessels). Accordingly, we are required to comply with the following PRC laws and regulations which are
specifically applicable to our business:-
Engineering Consulting Entities in the PRC must comply with the Measures on Certification of
Qualification of Engineering Consultancy Entities , promulgated by the
National Development and Reform Commission of the PRC on 4 March 2005. Engineering Consultancy
Entities mean independent legal enterprises and entities, which are engaged in the engineering
consultancy business in the PRC. Any entity engaged in engineering consultancy business shall obtain
the certificate of qualified engineering consultancy entity. The certificate of qualified engineering
consultancy entity is issued by the National Development and Reform Commission of the PRC and can
be classified into Class A, Class B and Class C taking into account various factors including the entity’s
track record, registered capital, technology level and equipment, technical personnel and management,
etc. The valid duration of the certificate is five years.
The entity with the business scope of engineering investigation and design must comply with the
Provisional Measures on the Certification of Qualification of Engineering Investigation and Design Entities
, promulgated by the National Development and
Reform Commission of the PRC on 30 June 1986. Any entity engaged in the business of engineering
investigation and design shall obtain the certificate of qualified engineering investigation and design
entity. The certificate of qualified engineering investigation and design entity is classified into four
categories including Class A, B, C and D, taking into account various factors including industrial
reputation, technology and equipment, technical personnel, etc.. Class A or B can undertake engineering
investigation and design within its business scope in the nation-wide projects. Entity with Class C can
only undertake engineering investigation and design within its business scope in its own region or
industry. Entity with Class D can only undertake engineering investigation and design within its business
scope in its own county or entity.
The Administrative Regulation for the Qualification of Construction Engineering Investigation and Design
was promulgated by the Ministry of Construction of the PRC
(superseded by the Ministry of Housing and Urban-Rural Development of PRC )
on 30 December 2006 and came into force on 1 September 2007. The Qualification Standards of
Engineering Design ( hereinafter the “Standards”) was promulgated by the Ministry of
Construction of the PRC (superseded by the Ministry of Housing and Urban-Rural Development of PRC
) on 29 March 2007. Under the two regulations, any entity engaged in the
business of engineering investigation and design shall obtain the requisite qualifications for engineering
investigation and design. The engineering design qualifications are classified into four categories
109
including comprehensive engineering design qualifications, industry engineering design qualifications,
specialised engineering design qualifications and special engineering design qualifications, taking into
account, inter alia, creditworthiness, track record, technical capabilities and human resources, technology
equipment and management level. Each entity can only engage in the engineering design business within
the prescribed scope in the engineering design certificate.
The entity with the comprehensive engineering design qualifications can provide engineering design
services to the 21 industries as prescribed in the Standards. The entity with the industry engineering
design qualifications can provide engineering design services for a specific industry. The entity with
specialised engineering design qualifications can provide the engineering design services to specific
field(s) in a specific industry. The entity with special engineering design qualifications can provide the
engineering design services and/or construction in respect of a particular technology. The valid term of
engineering design certificate is five years.
The Trial Measures for the Implementation of Administrative Permit for Special Equipment
was promulgated by the General Administration of Quality
Supervision, Inspection and Quarantine of the PRC on 2 June 2003, pursuant to which the design of
special equipment and the manufacture of special equipment require the administrative permit
respectively. The administrative permit for special equipment shall be issued by the General
Administration of Quality Supervision, Inspection and Quarantine of the PRC uniformly. Any entity without
such permit is not permitted to carry out the prescribed business activities.
The production of special equipment (including design, manufacture, maintenance, installation and
reconstruction) or the use, check, test and inspection of special equipment shall comply with the
Regulations on Safety Supervision over Special Equipment ,
which was promulgated by the State Council, came into force on 1 June 2003 and revised on 24 January
2009. Under the regulation, special equipment means pressure vessel, pressure pipeline, elevator, lifting
appliances, passage transport ropeway, special automobiles in the factory or comprehensive
entertainment facilities and boilers dangerous to people’s life and safety. Entity that designs and/or
manufacture special equipment shall obtain corresponding administrative permit from the safety
supervision department of special equipment under the State Council (the “State Safety Supervision
Department”). Factors taken into account include the qualification and experience of the designer and/or
technicians, quality control system, management, and testing capability (for manufacture of special
equipment) etc. Entity that uses and/or manufactures special equipment shall be inspected by the State
Safety Supervision Department in the course of installation, reconstruction and material maintenance.
Regulation on Safety Management and Supervision over Pressure Pipelines

was promulgated by the Ministry of Labour and came into force on 1 July 1996 (the “Regulation
on Pressure Pipelines”). Pressure pipelines refer to special equipment used in manufacturing or in
everyday life, which may have relative higher risks to lead to explosion or intoxication. The design,
manufacture, installation, use, test, check, repair and reconstruction of special equipment shall comply
with the Regulation on Pressure Pipelines. The safety supervision department of pressure vessel and
boiler under the Ministry of Labour of the PRC is responsible for safety inspection and supervision of
pressure pipeline. Any entity providing design of pressure pipeline shall obtain the design license from the
governing authority above the provincial level, and file with the labour administrative department above
the provincial level. The entity providing design of pressure pipeline shall be responsible for the safety and
technical performance of designed pressure pipelines. The valid duration of the license is four years.
The Measures on the Supervision and Management of the Manufacture of Boiler and Pressure Vessel
was issued by the General Administration of Quality Supervision,
Inspection and Quarantine of the PRC on 1 July 2002 and came into force on 1 January 2003 (the
“Regulation on Boiler and Pressure Vessel”). Any entity which manufactures pressure vessels shall obtain
manufacturing license. In addition, the entity is subjected to compulsory supervision in respect of the
safety and product function of boiler and pressure vessels by qualified inspection body or organisation
designated by the local provincial quality and technology supervision authority. Such supervision shall be
carried out in the process of the manufacturing of the boiler and pressure vessels. The valid duration of
the license is four years. The General Administration of Quality Supervision, Inspection and Quarantine of
the PRC and its local related departments are responsible for the implementation of the Regulation on
Boiler and Pressure Vessel.
110
On October 31 2007, the National Development and Reform Commission and MOFCOM jointly
promulgated the Catalogue of Industries for Guiding Foreign Investment (as amended in 2007)
, which came into effect on 1 December 2007 (the
“Catalogue”). The Catalogue lists out the industries and economic activities which are encouraged,
restricted or prohibited by the PRC government for foreign investment. The Catalogue does not specify
which business activities are in the permitted category. Instead, if the business activities are not listed in
the encouraged, the restricted or the prohibited category, they shall be construed as being in the
permitted category. Pursuant to the Catalogue, the manufacture of catalyst, development of energy-
saving technology and development and manufacture of software product are within the encouraged
category. None of Hunan Anchun’s business activities are listed in the limited or banned category.
Save as disclosed above, as at the Latest Practicable Date, our business operations in the PRC are not
subject to any special legislation or regulatory controls which have a material effect on our business and
operations, other than those generally applicable to companies and businesses operating in the PRC set
out under Appendix E entitled “Description of Relevant PRC Laws and Regulations”.
We have obtained all the necessary licenses and permits for our business operations in the PRC and
have complied with all relevant laws and regulations of the PRC. In addition, we will carry out renewal for
all the relevant licenses and permits as and when required. Our Directors are not aware of any reason
which would cause or lead to non-renewal of any of the necessary licenses and permits for our business
operations in the PRC. The necessary licenses and permits obtained by our Group are as follows:-
Licenses, permits and Valid Term/

Date certificates Remark Renewal Period Authority
8 October Design License of Special Qualification for the design 7 October General
2006 Equipment in PRC of pressure piping 2010(1) Administration of
(Pressure Pipe) Quality Supervision,
Inspection and
Quarantine of PRC
12 March Manufacture License of Qualification for the 27 December General

2009 Special Equipment in manufacturing of pressure 2013 Administration of
PRC (pressure vessel) vessels Quality Supervision,
Inspection and
Quarantine of PRC
22 November Design License of Special Qualification for the design 21 November General
2007 Equipment in PRC of pressure vessels 2011 Administration of
(pressure vessel) Quality Supervision,
Inspection and
Quarantine of PRC
10 December Engineering Consultancy Qualification for the 10 December National

2007 Entity Certificate provision of project 2012 Development and
feasibility reports and Reform Commission
engineering design in of PRC
the chemical industry
Note:-
(1) Our Company has passed the examination and inspection conducted by the relevant authority for renewal of the Design
License of Special Equipment in PRC (Pressure Pipe), and we expect the renewed license to be issued in due course.
111
.
Licenses, permits and Valid Term/
Date certificates Remark Renewal Period Authority
23 April Qualification Certificate Qualification for the 20 April Ministry of Housing

2010 of Engineering Design provision of engineering 2015 and Urban-Rural
(Class A) design for chemical Development of PRC
engineering within the
chemical, petrochemical
and pharmaceutical
industries (specialised
engineering design
qualifications) and
environmental engineering
for waste water, waste gas
and solid waste treatment
(special engineering
design qualifications)
COMPETITION
We believe that the primary elements of competition for our business are industry reputation, R&D and
technical capability, quality, customer service, management expertise and experience.
To the best of our knowledge and belief, we believe that our main competitor in our industry in the PRC is
Nanjing GoodChina Chemical Technologies Co., Ltd. . In addition, we also
face competition from international companies, such as KBR group, Uhde GmbH group and Haldor
Topsøe group.
None of our Directors, Key Executives or Substantial Shareholders have any interest, direct or indirect, in
any of our above competitors.
112
SELECTED FINANCIAL INFORMATION
The following selected group financial information should be read in conjunction with the full text of this
Prospectus, including the Audited Combined Financial Statements as set out in Appendix A and the
Unaudited Combined Financial Statements as set out in Appendix B of this Prospectus, where the
selected group financial information has been derived from.
BASIS OF PREPARATION OF OUR GROUP’S COMBINED FINANCIAL STATEMENTS

Our current Group structure as shown in the section “Group Structure” of this Prospectus consist of our
Company and its wholly-owned subsidiary, Hunan Anchun. Pursuant to the Restructuring Exercise, our
Company became the holding company of our Group. Our Company was incorporated on 29 October
2009 in Singapore. Pursuant to an equity transfer agreement dated 20 November 2009, our Company
acquired the entire equity interests of Hunan Anchun from 402 beneficial shareholders, including 4
registered shareholders who held the shares in trust for 398 beneficiaries for a total consideration of
RMB75.0 million. The beneficial shareholders of our Company remained substantively the same as those
of Hunan Anchun, save for the entry of Xie Ming in place of Xie Ding Zhong and the Pre-IPO Investors.
Please refer to the section entitled “Restructuring Exercise” of this Prospectus for more information.
During the Restructuring Exercise, there was neither any major alteration in Hunan Anchun’s business
activities nor combination with any other businesses. Hence, other than Hunan Anchun’s existing
business activities, our Group did not conduct any other new or additional business activities as a result
of the Restructuring Exercise.
Our Group combined financial statements (as found in Appendices A and B of this Prospectus) have
been prepared in accordance with Singapore Financial Reporting Standards (“SFRS”). In the preparation
of our financial statements, FRS 103 Business Combinations (“FRS 103”) is not applicable since the
Restructuring Exercise does not constitute a business combination under FRS 103 as there is no
combination of businesses as aforementioned. Furthermore, the shareholder group of our Company
remained substantively the same as those of Hunan Anchun, save for the entry of Xie Ming in place of
Xie Ding Zhong and the Pre-IPO Investors.
FRS 8 Accounting Policies, Changes in Accounting Estimates and Errors (“FRS 8”) requires that in the
absence of specific guidance in SFRS, management shall use its judgement in developing and applying
an accounting policy that is relevant and reliable. In making that judgement, management may also
consider the most recent pronouncements of other standard-setting bodies that use a similar conceptual
framework to develop accounting standards, to the extent that these do not conflict with the SFRS
framework or any other FRS or interpretation.
As there is no specific SFRS guidance on the consolidation method to be used in the preparation of our
Group combined financial statements, our management in consultation with our Reporting Accountants
and Auditors, Ernst & Young LLP, have determined that the pooling of interests method would be the most
appropriate method. The assets and liabilities of our Company and our Subsidiary are reflected at their
carrying amounts reported in the combined financial statements. Any difference between the
consideration and the share capital of the Subsidiary acquired is reflected within equity as merger
reserve. The statement of comprehensive income reflects the results of our Company and our Subsidiary
for the entire periods under review.
On the other hand, the purchase method of consolidation was deemed as inappropriate as it requires the
acquiring entity to, inter alia, record the net assets acquired at its fair market value in its financial
accounts and record any excess of the purchase price over the fair market value of the net assets as
goodwill. Accordingly, the financial statements prepared by using the purchase method would not be
reflective of the fact that notwithstanding the Restructuring Exercise, our Group’s business activities are
the same as the existing business activities of Hunan Anchun and there was neither any major alteration
in Hunan Anchun’s business activities nor combination with any other businesses.
113
OPERATING RESULTS OF OUR GROUP
Audited Unaudited
RMB’000 FY2007 FY2008 FY2009 1Q2009 1Q2010
Revenue 114,780 121,009 294,841 104,445 67,295
Cost of sales (62,249) (64,418) (176,039) (64,035) (26,549)
Gross profit 52,531 56,591 118,802 40,410 40,746
Finance and other income 2,419 6,416 2,654 21 325
Marketing and distribution expenses (4,091) (6,036) (3,999) (697) (1,188)
Administrative expenses (21,918) (28,957) (27,049) (4,600) (10,371)
Finance costs (1,082) (2,377) (2,105) (230) (346)
Profit before tax 27,859 25,637 88,303 34,904 29,166
Income tax expenses (5,141) (4,333) (13,142) (5,248) (4,103)
Profit net of tax attributable 22,718 21,304 75,161 29,656 25,063

to Shareholders
Net gain / (loss) on available-for-sale 438 (131) 133 – –

financial assets
Total comprehensive income attributable

to Shareholders 23,156 21,173 75,294 29,656 25,063
EPS (based on pre-Invitation share capital)

(RMB fen) (1) 5.7 5.3 18.8 7.4 6.3
EPS (based on post-Invitation share capital)

(RMB fen) (2) 4.5 4.2 14.9 5.9 5.0
Notes: -
(1) For comparative purposes, EPS (based on the pre-Invitation share capital) for the periods under review is computed based
on the net profit attributable to Shareholders and the pre-Invitation share capital of 400,000,000 Shares. Please refer to the
Audited Combined Financial Statements and Unaudited Combined Financial Statements in Appendix A and Appendix B of
this Prospectus for more information on EPS computation.
(2) For comparative purposes, EPS (based on the post-Invitation share capital) for the periods under review is computed based
on the net profit attributable to Shareholders and the post-Invitation share capital of 505,000,000 Shares.
114
FINANCIAL POSITION OF OUR GROUP
Audited as at Unaudited as at
RMB’000 31 December 2009 31 March 2010
Non-current assets
Property, plant and equipment 114,853 117,219
Intangible assets 143 207
Land use rights 16,632 16,541
Deferred tax assets 846 886
Investment securities 933 933
Prepayments 6,131 11,123
Total non-current assets 139,538 146,909
Current assets
Inventories 95,831 98,601
Trade and other receivables 47,355 63,886
Prepayments 10,793 16,176
Cash and cash equivalents 88,410 79,853
Total current assets 242,389 258,516
TOTAL ASSETS 381,927 405,425
Current liabilities
Trade and other payables 69,300 87,980
Advances from customers 160,030 155,558
Other liabilities 9,061 3,679
Loans and borrowings 19,200 4,875
Income tax payable 3,145 6,600
Total current liabilities 260,736 258,692
Net current liabilities (18,347) (176)
Non-current liabilities
Loans and bank borrowings 14,745 14,967
Derivative financial instrument 34 34
Deferred tax liabilities – 257
TOTAL LIABILITIES 275,515 273,950
NET ASSETS 106,412 131,475
Shareholders’ equity
Share capital 45 45
Other reserves 58,310 101,310
Accumulated profits 48,057 30,120
TOTAL EQUITY 106,412 131,475
NAV per Share (RMB fen) (1)

26.6 32.9
Adjusted NAV per Share (RMB fen) (2) 27.8 34.1
Notes:-
(1) NAV per Share has been computed based on the respective net assets as at 31 December 2009 and 31 March 2010, and
the pre-Invitation share capital of 400,000,000 Shares.
(2) Adjusted NAV per Share has been computed based on the respective net assets as at 31 December 2009 and 31 March
2010, adjusted for the conversion of the Pre-IPO Investors’ convertible loan as at the respective balance sheet dates and the
pre-Invitation share capital of 400,000,000 Shares.
115
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL POSITION
OVERVIEW
Our integrated business model is anchored on strong R&D capabilities and registered patents for our key
technologies, and allows us to capture value across the value chain from system design, system
(i) Chemical systems engineering and technology design services (“CET Design Services”);
(ii) Chemical systems and components, including alcohol-hydrocarbon reactor technology, ammonia
synthesis reactor technology and methanol synthesis reactor technology, pressure vessels and and
other auxiliary equipment (“CSC Business”); and
(iii) Oxidative and reductive catalysts and other products (“Catalysts Business”).
Our chemical systems are generally used by our customers to produce ammonia and methanol, which
are subsequently used as crucial feedstock in our customers’ production system to produce other
downstream products such as urea, compound fertiliser, methanol fuel, formaldehyde, dimethyl ether and
explosives. Please refer to the section entitled “Business Overview” of this Prospectus for more
information.
In addition, we have a diversified customer base of approximately 320 different customers (of which
comprising provinces, autonomous regions and municipalities in the PRC. Our major customers include
notable state-owned and/or publicly-listed groups such as Jincheng Anthracite Mining group
, Sinofert group , China XLX group , Yunnan Yunwei
Group Co., Ltd. and China Haohua Chemical group . Please
refer to the section entitled “Our Major Customers” of this Prospectus for details.
No segmental information by geographical location is presented since all our revenue in FY2007,
FY2008, FY2009 and 1Q2010 was derived in the PRC.
Revenue
Our revenue from our product and service offerings as an integrated chemical systems engineering and
technology solutions provider can be categorised into three business segments as follows:-
CET Design Services, which refers to revenue derived from chemical systems engineering and
technology design services such as feasibility studies, system design and solutions for production of
ammonia and methanol. Please refer to the section entitled “Our Value Chain – System Design Process”
of this Prospectus for more information.
116
CSC Business, which refers to revenue derived from manufacture and supply of our chemical systems
and components and related project management contracts. Please refer to the sections entitled “Our
Value Chain – System Production and Project Management Process” and “Our Chemical Systems and
Components and Manufacturing Process” of this Prospectus for more information.
Catalysts Business, which refers to revenue derived from supply of catalysts and other products. Please
refer to the section entitled “Our Catalysts and Manufacturing Process” of this Prospectus for more
information on our Catalysts Business. Revenue from other products mainly relates to revenue of health
products previously sold by Anchun Biotech, which was insignificant and accounted for only
approximately 0.01%, 0.2% and nil of our revenue from Catalysts Business for FY2007, FY2008 and
FY2009 respectively. Anchun Biotech was subsequently disposed as part of our Restructuring Exercise.
Please refer to the sections entitled “Restructuring Exercise” and “Interested Person Transactions” of this
Prospectus for more information on the disposal of Anchun Biotech.
Due to the strategic importance and uses of ammonia (primarily for manufacture of agricultural chemical
fertilisers) and methanol (manufacture of fuel, formaldehyde, methyl tertiary butyl ether, dimethyl ether
etc), the PRC ammonia and methanol industries and its production capacities has been growing steadily
and is poised to continue such growth trend going forward. The strong industry conditions and prospects
for our Group arose from customer needs due to new production capacity expansion and upgrading of
existing facilities, many of which are considered to be already inefficient and are not economically viable
in the long run. Please refer to the section entitled “Industry Overview” of this Prospectus for details.
Riding on such positive industry conditions and trend, our Group was able to achieve strong growth in our
business operations and financial performance during the periods under review.
We set out below the breakdown of our revenue by business segments for FY2007, FY2008, FY2009,
1Q2009 and 1Q2010:
Revenue by Segments Audited Unaudited
FY2007 FY2008 FY2009 1Q2009 1Q2010

RMB ‘000 % RMB ‘000 % RMB ‘000 % RMB ‘000 % RMB ‘000 %
CET Design Services 13,722 12.0 7,616 6.3 15,883 5.4 1,480 1.4 8,148 12.1
CSC Business 87,057 75.8 92,543 76.5 259,566 88.0 96,302 92.2 55,277 82.1
Catalyst Business 14,001 12.2 20,850 17.2 19,392 6.6 6,663 6.4 3,870 5.8
Total 114,780 100 121,009 100 294,841 100 104,445 100 67,295 100
From FY2007 to FY2008, our total revenue increased by approximately RMB6.2 million, or 5.4%, from
RMB114.8 million in FY2007 to RMB121.0 million in FY2008, notwithstanding the general slowdown in
economic conditions in the PRC during FY2008. From FY2008 to FY2009, our total revenue increased
significantly by approximately RMB173.8 million, or 143.6%, from RMB121.0 million in FY2008 to
RMB294.8 million in FY2009, as we were able to achieve strong business growth, in particular our CSC
Business, during FY2009 in line with the positive effects of the government economic stimulus plan to
increase domestic demand and stimulate economic growth by investing an estimated RMB4.0 trillion in
various areas as a response to the global financial crisis, as announced by the State Council of the PRC
on 9 November 2008. Such economic stimulus initiatives boosted overall optimism in the PRC economy
and led to positive effects in the economy, resulting in overall GDP growth and increased investments in
fixed assets by manufacturers of chemical material and chemical products as well as growth of production
capacities of the ammonia and methanol industry in the PRC in 2009. Furthermore, in line with the
opening of our Lusong Plant in mid 2008, we had expanded our production capacities for our CSC
Business from 2H2008 which allowed us to pursue more contracts of higher value, where such contracts
secured were subsequently mostly completed in FY2009 onwards. Please refer to the section entitled
“Review of Results of Operations - FY2008 vs. FY2009” of this Prospectus for details of the above.
117
In line with the positive economic conditions in the PRC, our strong revenue performance in FY2009 has
continued into the following year. For 1Q2010, our total revenue was RMB67.3 million (notwithstanding it
was lower than our total revenue in 1Q2009). In addition, our order books as at the Latest Practicable
Date stood at approximately RMB256.4 million of unfulfilled secured contracts which we expects to
deliver RMB235.5 million and RMB20.9 million worth of contracts in FY2010 and FY2011 respectively.
The above fluctuations of our revenues during the periods under review will be further explained in the
subsequent section “Review of Results of Operations” of this Prospectus.
Our revenues may be affected by, inter alia, the following key factors:
(a) Revenue recognition policies

For our CET Design Services, revenue is recognised upon the completion of the services. Revenue
is not recognised to the extent where there are significant uncertainties regarding recovery of the
consideration due or associated costs. For both our CSC Business and Catalyst Business, revenue
is recognised upon the transfer of significant risk and rewards of ownership of the goods to the
customer (such as successful delivery and/or installation of the products). Revenue is not
recognised to the extent where there are significant uncertainties regarding recovery of the
consideration due, associated costs or the possible return of goods.
Our products or services may not be completed within the same financial year/period in which the
contract was secured. Hence, the overall revenue recognised in that financial year/period is
determined by the contract values and the number of successful installation of products and
completion of services occurred in that financial year/period. In addition, depending on the contract
terms, a retention sum of 5% of the contract value may be required as deposits for assurance of
product quality, which will be released to us after the expiry of the defects liability period. The
defects liability period is typically 12 months after delivery of the goods. The retention sum is based
on the contract signed and determined at the contract negotiation stage, depending on our
customers’ requirement. The retention sums are only recognised as revenue together with the
corresponding cost of sales of such retention sums after the applicable defects liability period.
Generally there would not be significant corresponding cost of sales (arising from revenue from
retention sums) as all cost of sales relating to the production of the products or provision of the
services would have already been recognised together with the aforementioned initial revenue
recognition upon successful installation of products and completion of services. As a result,
increased contribution from retention sums revenue in any given period will generally improve our
gross profit margins for that period (such as during 1Q2010).
(b) Market demand

We provide our products and services mainly to customers which are primarily producers of
ammonia and methanol related products such as agriculture fertilisers and fuel production
chemicals which mainly are used in the agriculture and energy industries respectively. Hence, the
demand of our products and services is dependent on the industry performance, financial strength,
business operations and capital expenditures of these customers in the PRC as well as the
government policies and directives for the relevant industries.
(c) Our ability to secure contracts

Our ability to secure contracts is dependent on, inter alia, our engineering design qualification,
manufacturing certification as well as our overall performance as an integrated chemical systems
engineering and technology solutions provider vis-à-vis market competition. Such qualifications and
certifications allow us to provide highly specialised design and manufacturing services which can
only be done by qualified service providers or certified manufacturers which has been permitted by
the government.
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(d) Our ability to keep abreast with technological advances
We are in an industry where technology plays a critical role in influencing the demand for our
products and services. Hence, our ability to stay abreast of technological advancements and to
introduce new and enhanced products/services on a timely basis is a key factor affecting our
revenue.
(e) Competition
Competition in our industry could increase as a result of new market entrants, or our competitors
may be able to price their products/services more attractively, or may develop or acquire
technology that is comparable to or more advanced than our proprietary technical know-how. In
addition to local competitors, we also face competition from foreign companies, which may have
access to greater financial, technological and other resources than we do. Our revenue will be
affected if we fail to compete successfully with our competitors in terms of technology, pricing,
design, quality and timely project delivery.
(f) General economic, social and political conditions of the PRC economy
Currently, all of our revenue are derived from customers within the PRC. As such, fluctuations in
the general economic, social and political conditions of the PRC will have an impact on the demand
of our products.
(g) Product pricing

The prices of our products and/or services are determined by several factors, including general
economic conditions, industry competitiveness, demand and supply of our products and/or
services, availability of direct materials and our price competitiveness as compared to other
competitors. Other factors which impact our pricing policies also include freight and transportation
costs, the credit standing/history of the customers, insurance costs and expected foreign exchange
rates movement. As a result, any change in these factors or in the demand from our customers
may affect our financial performance.
(f) Production capacity

Our future growth in sales volumes must be matched by corresponding expansion in production
capacity where we may encounter various difficulties as a result of, inter alia, capacity constraints,
labour shortage, construction delays, delay in ramping-up production at new plants and upgrading
or expansion of existing plants.
Please refer to the section entitled “Risk Factors” of this Prospectus for a more comprehensive discussion
of the above and other factors which may affect our business operations and financial performance.
Seasonality - Due to the nature of our industry, our business is generally not subject to seasonality on a
calendar-year basis, save for during the Chinese New Year holidays where many of our customers
generally do not accept delivery for a period of two to three weeks.
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Cost of Sales
Breakdown of cost of sales by business segment
The following table provides a breakdown of our cost of sales by business segment for FY2007, FY2008,
FY2009, 1Q2009 and 1Q2010:
Cost of Sales by
Segments Audited Unaudited
FY2007 FY2008 FY2009 1Q2009 1Q2010

CET Design Services 1,682 2.7 526 0.8 2,214 1.3 227 0.3 915 3.4
CSC Business 54,762 88.0 54,054 83.9 162,550 92.3 59,612 93.1 23,964 90.3
Total 62,249 100 64,418 100 176,039 100 64,035 100 26,549 100
We set out below further descriptions of our cost of sales under each segment:-
(i) Cost of sales for CET Design Services

Cost of sales for CET Design Services comprised mainly direct labour and other overheads. There
is no direct material cost due to the nature of our CET Design Services.
(ii) Cost of sales for CSC Business

Cost of sales of CSC Business comprised mainly direct materials, direct labour and manufacturing
overheads.
(iii) Cost of sales for Catalysts Business

Cost of sales of Catalysts Business comprised mainly direct materials, direct labour and
manufacturing overheads.
For the periods under review, the above trends of the costs of sales of the business segments were
generally in line with the corresponding revenue trends of the respective segment. The above fluctuations
of the costs of sales during the periods under review will be further explained in the subsequent section
“Review of Results of Operations” of this Prospectus.
120
Please see below for further discussion on the trends and breakdown of our costs of sales by direct
material, direct labour and manufacturing and other overheads.
Breakdown of cost of sales by nature

Cost of Sales by Nature Audited Unaudited
FY2007 FY2008 FY2009 1Q2009 1Q2010

Direct Materials
- Steel materials 45,694 73.4 46,167 71.7 129,861 73.8 50,022 78.1 18,415 69.4
- Other materials 6,214 10.0 8,182 12.7 12,066 6.8 4,158 6.5 2,486 9.3
Sub-total for direct 51,908 83.4 54,349 84.4 141,927 80.6 54,180 84.6 20,901 78.7
materials
Direct labour 2,339 3.7 2,862 4.4 8,784 5.0 2,511 3.9 1,705 6.4
Manufacturing and 8,002 12.9 7,207 11.2 25,328 14.4 7,344 11.5 3,943 14.9
other overheads
Total 62,249 100 64,418 100 176,039 100 64,035 100 26,549 100
(i) Direct materials

Direct material costs accounted for 83.4%, 84.4%, 80.6%, 84.6% and 78.7% of our overall cost of
sales for FY2007, FY2008, FY2009, 1Q2009 and 1Q2010 respectively. The increasing trend in
nominal direct material costs for the periods under review was generally in line with the
corresponding increasing trend in our business and sales activities for our CSC Business and
Catalysts Business. We do not incur direct material costs for our CET Design Services due to the
nature of the business.
Direct materials used in our CSC Business comprised mainly steel materials (such as carbon steel,
stainless steel and other steel parts), other production materials and packaging material. Direct
materials used in our Catalysts Business comprised mainly production materials (such as copper
and cobalt) and packaging material. Our direct materials cost is dependent, inter alia, on our
production volume and average materials costs.
We have access to a large pool of suppliers for our materials as our production facilities are
located in Changsha City, which is highly-accessible to other manufacturing and industrial hubs in
the PRC. Please refer to the section entitled “Our Major Suppliers” of this Prospectus for more
information. Our materials are currently sourced from within the PRC and therefore, all of our
purchases are transacted in RMB. Accordingly, we are not subjected to any significant risk in
exchange rates fluctuations in the purchase of direct materials.
Generally, we do not enter into long term contracts with our suppliers and we currently do not
hedge or have the intention to hedge the price or volume of our materials in the near future due to,
inter alia, our cost mark-up approach to contract negotiation with our customers. Our contracts are
negotiated with our customers based on existing market prices of materials, possible selling prices
of our products/services and our intended gross margins. Hence, we fix the prices of required
materials at approximately the same time as the contracts we signed with our customers so as to
protect our gross margins. Please refer to the section entitled “Inventory Management” of this
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Steel materials was the most significant component in our materials costs, and accounted for
73.4%, 71.7%, 73.8%, 78.1% and 69.4% of our overall cost of sales in FY2007, FY2008, FY2009,
1Q2009 and 1Q2010 respectively. Our steel purchase costs are subjected to price fluctuations in
the commodity metal markets. Our average steel purchase costs for FY2007, FY2008, FY2009 and
1Q2010 were approximately RMB22,400/tonne, RMB21,400/tonne, RMB10,900/tonne, and
RMB13,600/tonne respectively, which were generally in line with the fluctuations of steel market
prices over the same periods. Notwithstanding such market movements in steel prices, we were
generally able to maintain stable gross margins for our CSC Business and Catalysts Business as
we adopt a cost mark-up approach to contract negotiation with our customers as aforementioned.
(ii) Direct labour

Direct labour engaged in our CSC Business and Catalysts Business comprised salaries and other
related expenses of our plant operators, technicians and staff who are directly involved in the
manufacture of our products. Direct labour engaged in our CET Design Services comprised
salaries and other related expenses of our engineers, technicians and staff who are directly
involved in the provision of chemical systems engineering and technology design services. Our
direct labour cost is dependent, inter alia, on the number of production (both full-time and part-
time) staff employed, the production volume, the industry wage level and availability of labour in the
market with the required skill sets.
Direct labour costs accounted for 3.7%, 4.4%, 5.0%, 3.9% and 6.4% for FY2007, FY2008, FY2009,
1Q2009 and 1Q2010 respectively. The increasing trend in nominal direct labour costs for the
periods under review was generally in line with the corresponding increasing trend in our business
and sales activities for the periods under review.
(iii) Manufacturing and other overheads

Manufacturing and other overheads incurred in our CSC Business and Catalysts Business
comprised mainly depreciation of our machinery and equipment used at our factories, production
and services premises and utilities charges, consumables and supplies, and other related costs.
Overheads incurred in our CET Design Services comprised mainly sales tax as well as other
miscellaneous overheads.
Manufacturing and other overheads accounted for 12.9%, 11.2%, 14.4%, 11.5% and 14.9% for
FY2007, FY2008, FY2009, 1Q2009 and 1Q2010 respectively. The decrease in manufacturing and
other overheads by approximately RMB0.8 million from RMB8.0 million in FY2007 to RMB7.2
million in FY2008 was due mainly to the decrease in sales tax in relation to our CET Design
Services, in line with the decrease in revenue from our CET Design Services over the same period.
The increase in manufacturing overheads from FY2008 to FY2009 was in line with the increase in
business activities for our Group. Due to the expansion in production capacity in mid FY2008 and
the relatively fixed nature of manufacturing overheads (mainly as a result of depreciation charges),
the increase in our manufacturing overheads from FY2008 to FY2009 was more-than-proportionate
when compared to the increase of our revenue for the same period.
Our costs of sales are affected by, inter alia, the following key factors:
(i) The supply and prices of materials (in particular steel materials), which are affected by, inter alia,
market volatility, market demand and supply conditions and governmental regulations. Should there
be any significant increases in the price of our materials, and if we are unable to pass on such
increases in prices to our customers or find alternative suppliers/sources of materials that are able
to supply us materials at competitive prices, our financial performance will be adversely affected;
(ii) Possible labour shortages and rising labour costs; and
(iii) System disruptions arising from disruption of electricity supply or machinery breakdown.
Please refer to the section entitled “Risk Factors” of this Prospectus for a more comprehensive discussion
of the above and other factors which may affect our business operations and financial performance.
122
Gross Profit and Gross Profit Margin
The following tables provides a breakdown of our gross profit and gross profit margin by business
segment for FY2007, FY2008, FY2009, 1Q2009 and 1Q2010.
Gross Profit by
Segments Audited Unaudited
FY2007 FY2008 FY2009 1Q2009 1Q2010

CET Design Services 12,040 22.9 7,090 12.5 13,669 11.5 1,253 3.1 7,213 17.8
CSC Business 32,295 61.5 38,489 68.0 97,016 81.7 36,690 90.8 31,333 76.8
Total 52,531 100 56,591 100 118,802 100 40,410 100 40,746 100
Gross Profit Margin

by Segments FY2007 FY2008 FY2009 1Q2009 1Q2010
CET Design Services 87.7% 93.1% 86.1% 84.7% 88.7%
CSC Business 37.1% 41.6% 37.4% 38.1% 56.7%
Catalyst Business 58.5% 52.8% 41.9% 37.0% 56.8%
Total 45.8% 46.8% 40.3% 38.7% 60.5%
Our gross profit margin is affected by our sales mix, selling prices of our products and services and
relative cost of sales. Our overall gross profit margin was 45.8%, 46.8%, 40.3%, 38.7% and 60.5% for
FY2007, FY2008, FY2009, 1Q2009 and 1Q2010 respectively. The decrease in our overall gross profit
margin to 40.3% in FY2009 was mainly due to general decreases in all our segmental gross profit
margins. In 1Q2010, our overall gross profit margin increased to 60.5% due to general increases in all our
segmental gross profit margins, in particular increase in our CSC Business gross profit margin to 56.7%
(explained further below). Nevertheless, we do not expect such increase in our overall gross profit margin
in 1Q2010 to continue for the rest of FY2010. Accordingly, we expect our overall gross profit margin for
FY2010 to be not as high as that of 1Q2010, but instead closer to the range of our overall gross profit
margins for the past three financial years. Please also refer to the section entitled “Trend Information” of
this Prospectus.
We set out below further descriptions of our gross profit margins under each segment:-
(i) CET Design Services

Our CET Design Services generally commands relatively better gross profit margins, with a simple
average gross profit margin of 89.0% for FY2007, FY2008 and FY2009, as this segment relies
mainly on manpower resources and has no direct material cost as compared to our CSC Business
and Catalysts Business. The relatively higher gross profit margin (“GPM”) of 93.1% in FY2008 as
compared to 87.7% in FY2007 was due to greater-than-proportionate decline in cost of sales of
CET Design Services which decreased by 71% from RMB1.7 million in FY2007 to RMB0.5 million
in FY2008 (as compared to the decrease in corresponding revenue by 45% from RMB13.7 million
in FY2007 to RMB7.6 million in FY2008) as we incurred relatively less direct labour costs and other
overheads (such as sales tax) under this segment due to decreased activities in FY2008.
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(ii) CSC Business
Our gross profit margin from CSC Business was relatively stable, with a simple average gross profit
margin of 38.7% for FY2007, FY2008 and FY2009 as we adopt a cost mark-up approach to
contract negotiation with our customers. Nevertheless, our gross profit margins in this segment
were relatively higher at 41.6% and 56.7% in FY2008 and 1Q2010 respectively as a result of
greater-than-proportionate contribution from retention sums being recognised as revenue in these
periods (RMB6.2 million and RMB6.6 million in FY2008 and 1Q2010 respectively). Such retention
sums are based on the contracts signed and determined at the contract negotiation stage,
depending on the customers’ requirement. The retention sums are only recognised as revenue
together with the corresponding cost of sales of such retention sums after the applicable defects
liability period, which is typically 12 months. Generally there would not be significant corresponding
cost of sales (arising from revenue from retention sums) as all cost of sales relating to the
production of the products or provision of the services would have already been recognised
together with the aforementioned initial revenue recognition upon successful installation of products
and completion of services. As a result, increased contribution from retention sums revenue in any
given period will generally improve our gross profit margins for that period (such as during FY2008
and 1Q2010). For illustrative purpose, the percentage contribution of our CSC Business’s retention
sums revenue in 1Q2010 was 9.8% of total revenue as compared to 0.8% in 1Q2009 respectively.
(iii) Catalysts Business

Our gross profit margin from Catalysts Business generally fluctuated between periods as a result of
changing sales mix and selling prices, with a simple average gross profit margin of 51.1% for
FY2007, FY2008 and FY2009. Our gross profit margin in this segment improved to 56.8% in
1Q2010 as a result of change in sales mix and selling prices where there was greater-than-
proportionate contribution from sales of our specialised oxidative catalyst with high margins (for use
in our proprietary alcohol-hydrocarbonylation refining systems).
Finance and other income

Finance and other income comprises mainly interest income from fixed deposits, government grants,
sales of scrap metals, gain on disposal of a subsidiary, gain on disposal of property, plant and equipment,
and other sundry income. Our finance and other income represented 2.1%, 5.3%, 0.9%, 0% and 0.5% of
our revenue for FY2007, FY2008, FY2009, 1Q2009 and 1Q2010 respectively.
Our relatively higher finance and other income in FY2008 were mainly due to higher government grants
of RMB5.3 million recognised and received in FY2008. The government grants relate to grants received
from the government for our research and development efforts and recognised as income and are usually
one-off in nature.
Marketing and distribution expenses

Marketing and distribution expenses comprise distribution expenses, marketing and promotional
expenses, salary and other staff-related expenses and other selling expenses, representing 3.6%, 5.0%,
1.4%, 0.7% and 1.7% of our revenue in FY2007, FY2008, FY2009, 1Q2009 and 1Q2010 respectively.
Our relatively higher marketing and distribution expenses in FY2008 was mainly due to additional
marketing and distribution expenses attributed to marketing and promotional expenses relating to Anchun
Biotech’s health products launch in the same year, where such expenses will not recur going forward
since Anchun Biotech has been disposed as part of our Restructuring Exercise.
124
Administrative expenses
Administrative expenses comprise research and development, depreciation and amortisation, office staff
and directors’ remuneration, travelling and transportation expenses, allowance/written off of debts and
inventories, rental, maintenance and utilities expense, professional fee, loss on disposal of property, plant
and equipment, donations, other sundry expenses as well as other general expenses. Our administrative
expenses represented 19.0%, 23.9%, 9.2%, 4.4% and 15.4% of our revenue in FY2007, FY2008,
FY2009, 1Q2009 and 1Q2010 respectively. The general increasing trend in nominal administrative
expenses for the periods under review was in line with our expanding business activities over the same
periods.
Finance costs
Finance costs mainly comprised interest expense on our bank borrowings, loans from
employee/shareholders and convertible loan. Our finance costs represented 0.9%, 2.0%, 0.7%, 0.2% and
0.5% of our revenue in FY2007, FY2008, FY2009, 1Q2009 and 1Q2010 respectively. The marginally
higher interest expense during FY2008 was mainly due to higher bank borrowings taken to partially
finance the expansion of our production capacities in the same year.
Income tax expense

Our Group effective income tax rate was approximately 18.5%, 16.9%, 14.9% and 14.1% in FY2007,
FY2008, FY2009 and 1Q2010 respectively.
Singapore
Our Company was incorporated in the Republic of Singapore in FY2009. The corporate income tax rate
applicable to our Company in Singapore was 17% in FY2009. Our Company had no taxable income for
FY2009 and 1Q2010.
PRC
Our Subsidiary, Hunan Anchun was taxed according to the prevailing tax regulations in the PRC and the
corporate income tax applicable to Hunan Anchun in FY2007 was 15%, pursuant to “Regulations on the
Tax Policy for the National Advanced New Technology Industries Development Zone”
, issued in 1991. Furthermore, according to the Enterprise Income Tax Law of the
PRC, promulgated by the State Council and the Administrative Measure for Determination of Advanced
New Technology Enterprises, issued by the Ministry of Science and Technology, Finance and State
Administration of Tax and effective on 1 January 2008, Advanced New Technology Enterprises that
require key state support are subject to the applicable enterprise income tax rate of 15%.
Given that Hunan Anchun has received the certificate of Advanced New Technology Enterprise since
2007, it enjoys the preferential income tax rate of 15% from 1 January 2007 to 31 December 2012.
Without such tax incentive, the normal applicable tax rate is currently 25%.
The above fluctuations of our respective profit and loss items during the periods under review will be
further explained in the subsequent section “Review of Results of Operations” of this Prospectus.
Inflation
Our financial performance during the periods under review was not materially affected by inflation.
125
REVIEW OF RESULTS OF OPERATIONS
FY2007 vs. FY2008
Revenue
Our revenue increased by approximately RMB6.2 million, or 5.4%, from RMB114.8 million in FY2007 to
RMB121.0 million in FY2008, notwithstanding the general slowdown in economic conditions in the PRC
during FY2008. Our major customers and their respective revenue contributions in FY2008 were mainly
Jincheng Anthracite Mining group (RMB26.4 million), Guizhou Kailin group (RMB8.7 million) and Fubao
group (RMB7.7 million), as compared to our major customers in FY2007, namely Jincheng Anthracite
Mining group (RMB30.2 million), Shanxi Tianze group (RMB18.2 million), Sinofert group (RMB11.4
million) and China XLX group (RMB10.1 million). The aggregate percentage contribution from our 3 major
customers in FY2008 was 35.3% as compared to aggregate 60.9% from 4 major customers in FY2007.
Please refer to the section “Our Major Customers” of this Prospectus for more information.
The increase in revenue was mainly due to increases in revenues from our CSC Business and Catalyst
Business, which were partially offset by a decrease in revenue from our CET Design Services, further
described as follows:-
(i) Revenue from our CET Design Services

Revenue from CET Design Services decreased by RMB6.0 million, or 43.8%, from RMB13.7
million in FY2007 to RMB7.7 million in FY2008. The decrease in revenue from CET Design
Services was due mainly to the decrease in demand for design services pertaining to capital
expenditure projects as a result of general slowdown in economic conditions in the PRC during
FY2008, resulting in the decrease in number of contracts completed, from 44 contracts in FY2007
to 27 contracts in FY2008, as well as a decrease in average contract value of approximately
RMB0.5 million in FY2007 to approximately RMB0.3 million in FY2008.
(ii) Revenue from our CSC Business

Revenue from our CSC Business increased by RMB5.4 million, or 6.2%, from RMB87.1 million in
FY2007 to RMB92.5 million in FY2008. The increase in revenue from CSC Business was mainly
due to higher retention sums being recognised as revenue in FY2008 of RMB6.2 million. In
addition, notwithstanding an increase in the number of completed CSC Business contracts
completed from 49 in FY2007 to 65 in FY2008, such increase was generally offset by decrease in
average contract values from RMB2.3 million in FY2007 to RMB1.6 million in FY2008.
(iii) Revenue from our Catalysts Business

Revenue from our Catalysts Business increased by RMB6.8 million, or 48.6%, from RMB14.0
million in FY2007 to RMB20.8 million in FY2008. The increase in revenue from Catalysts Business
was mainly due to an increase in our sales volume, from 838 tonnes in FY2007 to 1,035 tonnes in
FY2008 as well as an increase in the average selling price of our catalysts as a result mainly of an
increase in direct material costs of our catalysts.
Cost of sales and gross profit margin

Cost of sales increased by RMB2.2 million, or 3.5%, from RMB62.2 million in FY2007 to RMB64.4 million
in FY2008. The increase in cost of sales was mainly due to the increase in the cost of sales for our
Catalyst Business (by RMB4.0 million, or 69.0%, from RMB5.8 million in FY2007 to RMB9.8 million in
FY2008). This was partially offset by (i) decrease in the cost of sales for our CET Design Services by
RMB1.2 million, or 70.6%, from RMB1.7 million in FY2007 to RMB0.5 million in FY2008; as well as (ii)
decrease in the cost of sales for our CSC Business by RMB0.7 million, or 1.3%, from RMB54.8 million in
FY2007 to RMB54.1 million in FY2008. These fluctuations in segmental cost of sales were generally in
line with the corresponding fluctuations in segmental revenue between FY2007 and FY2008 as
aforementioned.
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In terms of gross profit margin, our overall gross profit margin marginally increased from 45.8% in
FY2007 to 46.8% in FY2008. This was mainly due to improvement in margins of (i) our CET Design
Services from 87.7% in FY2007 to 93.1% in FY2008, which was due to greater-than-proportionate
decline in cost of sales of CET Design Services as compared to the decrease in corresponding revenue
as we incurred less manpower and other costs in this segment due to decreased business needs; and (ii)
our CSC Business from 37.1% in FY2007 to 41.6% in FY2008, which was mainly due to higher retention
sums being recognised as revenue in FY2008 of RMB6.2 million as aforementioned (which improved our
gross profit margin in this period since there were generally no significant corresponding costs of sales as
explained earlier). These were offset by decrease in margin of our Catalyst Business from 58.5% in
FY2007 to 52.8% in FY2008 due to change in sales mix where there was greater contribution from lower
margin products.

Finance and other income increased by approximately RMB4.0 million, or 166.7%, from RMB2.4 million
in FY2007 to RMB6.4 million in FY2008. The increase was mainly due to an increase of RMB4.6 million
in government grants to RMB5.3 million in FY2008, which was partially offset by mainly a decrease in
sale of scrap metal by RMB0.4 million.

Marketing and distribution expenses increased by approximately RMB1.9 million, or 46.3%, from RMB4.1
million in FY2007 to RMB6.0 million in FY2008. Our relatively higher marketing and distribution expenses
in FY2008 was mainly due to (i) increase in distribution expenses by RMB0.7 million due to us bearing
certain outward freight costs as part of our market penetration efforts for a new catalyst product; (ii)
increase in salary and other staff-related expenses by RMB0.5 million as we increased our marketing
staff headcount to meet growing business needs; and (iii) additional marketing and distribution expenses
attributed to one-off RMB0.8 million marketing and promotional expenses relating to Anchun Biotech’s
health products launch in FY2008, where such expenses will not recur going forward since Anchun
Biotech has been disposed as part of our Restructuring Exercise.
Administrative expenses increased by RMB7.1 million, or 32.4%, from RMB21.9 million in FY2007 to
RMB29.0 million in FY2008. The increase in administrative expenses was due mainly to (i) increase in
salaries and other staff related expenses of RMB3.7 million due mainly to increase in bonuses payment
of RMB1.9 million and increase in staff welfare expenses of RMB0.9 million, as well as travelling and
transportation expenses of RMB0.4 million; (ii) increase in maintenance and utilities expenses of RMB0.7
million as well as depreciation expenses of RMB0.7 million as a result of an expansion in our production
facilities; and (iii) one-off share-based payment charge of RMB1.7 million in FY2008 as a result of the
issuance of shares to certain employees of Hunan Anchun to reward their past efforts and contributions
to the business. In conjunction with FRS 102 Share-based Payment, the RMB1.7 million share-based
payment charge was based on fair value of the aforementioned shares issued to the employees, which
was based on the share valuation report dated 31 May 2010 issued by an independent valuer Nexia TS
Pte. Ltd..
Finance costs
The increase in finance costs by RMB1.3 million from RMB1.1 million in FY2007 to RMB2.4 million was
due mainly to the increase in interest expense for bank loans by RMB0.9 million from RMB0.6 million in
FY2007 to RMB1.5 million in FY2008. The increase in interest expense for bank loans was due to the
higher average bank borrowings in FY2008 that were undertaken to partially finance the expansion of our
production facilities.
Income tax expense

Income tax expense decreased by RMB0.8 million or 15.7% from RMB5.1 million in FY2007 to RMB4.3
million in FY2008. The decrease in income tax expense was in line with the decrease in the profit before
tax from RMB27.9 million in FY2007 to RMB25.6 million in FY2008. Our effective tax rates were 18.5%
and 16.9% for FY2007 and FY2008 respectively.
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Net profit attributable to Shareholders
As a result of the foregoing, our net income decreased by RMB1.4 million, or 6.2%, from RMB22.7 million
in FY2007 to RMB21.3 million in FY2008.
FY2008 vs. FY2009

Revenue
Our revenue significantly increased by approximately RMB173.8 million, or 143.6%, from RMB121.0
million in FY2008 to RMB294.8 million in FY2009. This was mainly attributed to our strong business
growth, in particular our CSC Business during FY2009 in line with the positive effects of the government
economic stimulus plan to increase domestic demand and stimulate economic growth by investing an
estimated RMB4.0 trillion in various areas as a response to the global financial crisis, as announced by
the State Council of the PRC on 9 November 2008. These areas include infrastructure, technology
advances and industry restructuring, and other economic projects. Such economic stimulus initiatives
boosted overall optimism in the PRC economy and led to positive effects in the economy, resulting in
overall GDP growth rate of 8.7% from 2008 to 2009. In addition, in line with the positive economic
conditions in the PRC in 2009, investment in fixed assets by manufacturers of chemical material and
chemical products increased from RMB478.7 billion in 2008 to RMB600.6 billion in 2009, representing
year-on-year growth rate of 25.5% (note: economic data based on publicly available information provided
by National Bureau of Statistics of China (1)).
According to the CNCIC Report, the production capacities of the ammonia and methanol industry in the
PRC grew at 5.5% and 21.5% respectively between 2008 and 2009. The aforesaid growth rates in
production capacities were in absolute terms and did not include the replacement of obsolete or
economically inefficient manufacturing plants (where such information on replacement production
capacity is not available from CNCIC). Accordingly, the actual capital expenditures by the ammonia and
methanol manufacturers during any given period should be higher than the corresponding increases in
the absolute production capacities of ammonia and methanol due to replacement production capacities.
Furthermore, in line with the opening of our Lusong Plant in mid 2008, we had expanded our production
capacities for our CSC Business from 2H2008 which allowed us to pursue more contracts of higher value,
where such contracts secured were subsequently mostly completed in FY2009 onwards. Without the
capacity expansion attributed to the new Lusong Plant which commenced operations in 2H2008, our
Group would have to rely only on the older Lufeng Plant which has an estimated production capacity of
approximately 4,370 tonnes per annum for our CSC Business, as opposed to the new Lusong Plant
which has an estimated production capacity of approximately 8,755 tonnes per annum for our CSC
Business. In addition, the newer and bigger facilities at Lusong Plant allowed fabrication of more large-
sized structures and consequently, the securing of contracts with higher value for our CSC Business. In
line with the opening of the Lusong Plant and increased production capacity for our CSC Business from
2H2008 onwards, our Group was able to pursue more large contracts where such contracts secured
subsequently were mostly completed in FY2009 onwards. Hence, the capacity expansion attributed to the
new Lusong Plant was crucial to our Group’s business expansion in our CSC Business from FY2008
onwards. Please refer to the section “Production Facilities, Equipment and Capacity – Production
Capacity and Utilisation” of this Prospectus for more information.
Our major customers and their respective revenue contributions in FY2009 were mainly Jincheng
Anthracite Mining group (RMB105.0 million), Shanxi Tianze group (RMB24.8 million), China XLX group
(RMB52.5 million), Guizhou Kailin group (RMB18.6 million) and Shandong Ruixing Runyin Biochemical
Co. Ltd. (RMB19.2 million), which were significantly more than our major customers’ revenue contribution
in FY2008. The aggregate percentage contribution from our 5 major customers in FY2009 was 74.6% as
compared to aggregate 35.3% from 3 major customers in FY2008. Please refer to the section “Our Major
Customers” of this Prospectus for more information.
Note:-
(1) Please note that the National Bureau of Statistics of China has not consented to the inclusion of the information and thereby
is not liable for such information under Section 253 and 254 of the Securities and Futures Act. Our Directors are aware that
the National Bureau of Statistics of China does not guarantee or assume any responsibility that the information is accurate,
current or reliable, or may be used for any purpose other than for general reference. We are unable to verify the accuracy of
the contents of the relevant information and have included such information in its proper form and context in this Prospectus.
128
The increase in our revenue can be attributed to increases in revenues from our CET Design Services
and CSC Business, which was partially offset by a marginal decrease in revenue from our Catalysts
Business, further described as follows:-

Revenue from CET Design Services increased by RMB8.2 million, or 106.5%, from RMB7.7 million
in FY2008 to RMB15.9 million in FY2009. The increase in revenue from CET Design Services was
due mainly to the increase in demand for higher-valued design services pertaining to capital
expenditure projects as our customers seek production expansion and growth in line with the
strong recovery in economic conditions in the PRC during FY2009 as aforementioned. This
resulted in the marginal increase in number of contracts completed from 27 in FY2008 to 28 in
FY2009, as well as significant increase in average contract value of approximately RMB0.3 million
in FY2008 to approximately RMB0.7 million in FY2009. The increase in average contract value was
due mainly to the completion of contracts which were higher in value due to greater technical
complexity and R&D efforts.

Revenue from our CSC Business increased by RMB167.1 million, or 180.6%, from RMB92.5
million in FY2008 to RMB259.6 million in FY2009. This increase was mainly to the completion of
certain large contracts in FY2009 for our major customers such as Jincheng Anthracite Mining
group, Shanxi Tianze group, China XLX group, Guizhou Kailin group and Shandong Ruixing Runyin
Biochemical Co. Ltd. as aforementioned. The number of completed CSC Business contracts and
average contract value increased from 65 contracts and RMB1.6 million respectively in FY2008 to
68 contracts and RMB4.7 million respectively in FY2009.

Revenue from our Catalysts Business marginally decreased by RMB1.5 million, or 7.2%, from
RMB20.9 million in FY2008 to RMB19.4 million in FY2009. This marginal decrease was mainly due
to our continued marketing efforts to increase market awareness and usage of our catalysts by
offering competitive prices which resulted in decreases in our average selling prices of our
catalysts while sales volume marginally increased from 1,035 tonnes in FY2008 to 1,066 tonnes in
FY2009.

Cost of sales increased by approximately RMB111.6 million or 173.3% from RMB64.4 million in FY2008
to RMB176.0 million in FY2009. The increase in cost of sales was mainly due to increases in all 3
segmental costs of sales, namely (i) the increase in the cost of sales for our CET Design Services by
RMB1.7 million, or 340%, from RMB0.5 million in FY2008 to RMB2.2 million in FY2009; (ii) the increase
in the cost of sales for our CSC Business by RMB108.5 million, or 200.9%, from RMB54.0 million in
FY2008 to RMB162.5 million in FY2009; and (iii) the increase in the cost of sales for our Catalysts
Business by RMB1.5 million, or 15.3%, from RMB9.8 million in FY2008 to RMB11.3 million in FY2009.
These increases in segmental cost of sales were generally in line with the corresponding increases in
segmental revenue between FY2008 and FY2009 as aforementioned and also higher depreciation
charges in FY2009 due to expansion of our production facilities.
In terms of gross profit margin, our overall gross profit margin decreased from 46.8% in FY2008 to 40.3%
in FY2009. This was mainly due to (i) greater-than-proportionate increase in gross profits percentage
contribution from our CSC Business from 68.0% in FY2008 to 81.7% in FY2009, which caused our
overall gross profit margin to decline as our CSC Business typically has lower margins as compared to
other segments; and lower gross profit margins from all 3 business segments, described as follows:-
129
Our CET Design Services margins decreased from 93.1% in FY2008 to 86.1% in FY2009 as a result of
greater-than-proportionate increase in cost of sales of CET Design Services as compared to the increase
in corresponding revenue as we incurred more manpower and other costs in this segment due to
increased business needs. Our CSC Business margins decreased from 41.6% in FY2008 to 37.4% in
FY2009 due mainly to greater-than-proportionate increase in overheads, which mainly pertained to higher
depreciation charges in FY2009 due to expansion of our production facilities in mid FY2008 as
aforementioned. Our Catalyst Business margin decreased from 52.8% in FY2008 to 41.9% in FY2009 as
a result of us offering competitive prices for marketing purposes as aforementioned.

Finance and other income decreased by approximately RMB3.7 million or 57.8% from RMB6.4 million in
FY2008 to RMB2.7 million in FY2009. The decrease was mainly due to the RMB5.2 million decrease in
government grants received from RMB5.3 million in FY2008 to RMB0.1 million in FY2009, which was
partially offset by mainly a gain on disposal of our ex-subsidiary, Anchun Biotech, of RMB1.7 million.
Please refer to the section entitled “Restructuring Exercise” of this Prospectus for more information on the
disposal of Anchun Biotech.

Marketing and distribution expenses decreased by approximately RMB2.0 million, or 33.3%, from RMB6.0
million in FY2008 to RMB4.0 million in FY2009. The decrease was mainly due to (i) decrease in
distribution expenses of RMB0.6 million as we borne less outward freight costs on behalf of our
customers; (ii) decrease in other marketing and distribution expenses of RMB0.6 million; and (iii) absence
of one-off RMB0.8 million marketing and promotional expenses relating to Anchun Biotech’s health
products launch in FY2008, where such expenses will not recur going forward since Anchun Biotech has
been disposed as part of our Restructuring Exercise.
Administrative expenses decreased marginally by approximately RMB1.9 million, or 6.6%, from RMB29.0
million in FY2008 to RMB27.1 million in FY2009. The decrease in administrative expenses was due
mainly to (i) the absence of one-off share based payment charge of RMB1.7 million in FY2008 as a result
of the issuance of shares to certain employees of Hunan Anchun to reward their past efforts and
contributions to the business; and (ii) marginal decrease in other general and administrative expenses of
RMB0.2 million.
Finance costs
Finance costs decreased by approximately RMB0.3 million or 12.5% from RMB2.4 million in FY2008 to
RMB2.1 million in FY2009, which was mainly due to the decrease in interest expenses as a result of
lower average interest-bearing borrowings in FY2009.
Income tax expense

Income tax expense increased by approximately RMB8.8 million, or 204.7%, from RMB4.3 million in
FY2008 to RMB13.1 million in FY2009. This was in line with the increase in our profit before tax from
RMB25.6 million in FY2008 to RMB88.3 million in FY2009. Our effective tax rates were 16.9% and 14.9%
for FY2008 and FY2009 respectively.

As a result of the foregoing, our net profit for the year increased by RMB53.9 million, or 253.0%, from
RMB21.3 million in FY2008 to RMB75.2 million in FY2009.
130
1Q2009 vs. 1Q2010
Revenue
In line with the positive economic conditions in the PRC, our strong revenue performance in FY2009 has
continued into the following year. For 1Q2010, our total revenue was RMB67.3 million, notwithstanding it
was lower than our total revenue in 1Q2009. Our revenue decreased by approximately RMB37.1 million,
or 35.6%, from RMB104.4 million in 1Q2009 to RMB67.3 million in 1Q2010, as our revenue recorded in
1Q2009 was relatively strong as we had delivered several large contracts on the back of strong recovery
in economic conditions in the PRC during the same period. Nevertheless, we have strong order books
from unfulfilled secured contracts as at the Latest Practicable Date, please refer to the section entitled
“Prospects, Business Strategies and Future Plans” of this Prospectus for more information.
Our major customers and their respective revenue contributions in 1Q2010 were mainly Jincheng
Anthracite Mining group (RMB5.0 million), Yunnan Yunwei Group Co., Ltd. (RMB22.3 million). China
Haohua group (RMB14.7 million) and Yangmei group (RMB5.7 million). The aggregate percentage
contribution from our 4 major customers in 1Q2010 was 71.0% as compared to aggregate 74.6% from 5
major customers in FY2009. Please refer to the section “Our Major Customers” of this Prospectus for
more information.
The decrease in revenue was mainly due to decreases in revenue from our CSC Business and Catalysts
Business, which were partially offset by an increase in revenue from our CET Design Services, further
described as follows:-

Revenue from CET Design Services increased by RMB6.6 million, or 440.0%, from RMB1.5 million
in 1Q2009 to RMB8.1 million in 1Q2010. The increase in revenue from CET Design Services was
due mainly to the increase in demand for design services pertaining to capital expenditure projects
as our customers seek production expansion and growth in line with the positive economic
conditions in the PRC as aforementioned. Accordingly, the number of contracts completed
increased from 4 contracts in 1Q2009 to 23 contracts in 1Q2010, as well as an increase in average
contract value of approximately RMB0.3 million in 1Q2009 to approximately RMB0.6 million in
1Q2010. The significant increase in number of contracts completed in 1Q2010 was also in line with
our order books of RMB256.4 million as at the Latest Practicable Date, where subsequent to the
completion of the provision of our CET Design Services, these customers continued to place
orders for our chemical systems and components as well as catalysts.

Revenue from our CSC Business decreased by RMB41.0 million or 42.6% from RMB96.3 million in
1Q2009 to RMB55.3 million in 1Q2010. Such decreases in revenue between 1Q2009 and 1Q2010
was due mainly to the lower completed average contract values, which decreased from RMB7.5
million in 1Q2009 to RMB4.7 million in 1Q2010, as well as marginally lower number of such
completed contracts from 16 contracts in 1Q2009 to 13 contracts in 1Q2010. Nevertheless, we
successfully completed 4 large contracts for the abovementioned major customers, in particular for
Yunnan Yunwei Group Co., Ltd and China Haohua group. In addition, we also recognised as
revenue in 1Q2010 retention sums amounting to RMB6.6 million.

Revenue from our Catalysts Business decreased by RMB2.8 million or 41.9% from RMB6.7 million
in 1Q2009 to RMB3.9 million in 1Q2010, which was in line with lower sales volume from 363
tonnes in 1Q2009 to 185 tonnes in 1Q2010, notwithstanding a marginal increase in average selling
prices.
131
Cost of sales decreased by approximately RMB37.5 million or 58.6% from RMB64.0 million in 1Q2009 to
RMB26.5 million in 1Q2010. The decrease in cost of sales was mainly due to (i) the decrease in the cost
of sales for our CSC Business by RMB35.6 million, or 59.7%, from RMB59.6 million in 1Q2009 to
RMB24.0 million in 1Q2010, which was due mainly to the decrease in direct material costs by RMB33.3
million or 61.4% from RMB54.2 million in 1Q2009 to RMB20.9 million in 1Q2010. These were in turn
mainly due to the 42.6% decrease in revenue from CSC Business as well as greater-than-proportionate
contribution from retention sums revenue in our CSC Business during 1Q2010 (see below for details);
and (ii) the decrease in the cost of sales for our Catalysts Business by RMB2.5 million, or 59.5%, from
RMB4.2 million in 1Q2009 to RMB1.7 million in 1Q2010. The greater than proportionate decrease in the
cost of sales for the Catalysts Business as compared to the 41.9% decrease in revenue for the Catalysts
Business was due mainly to better gross profit margins as a result of the relatively greater proportion of
its alcohol-hydrocarbonylation catalysts sold during 1Q2010, which has higher margins as compared to
our other catalysts (see below for details). These decreases were partially offset by the increase in the
cost of sales for our CET Design Services by RMB0.7 million, or 350.0%, from RMB0.2 million in 1Q2009
to RMB0.9 million in 1Q2010, which was in line with the increase in revenue from CET Design Services
for the same period. These fluctuations in segmental cost of sales were generally in line with the
corresponding fluctuations in segmental revenue between 1Q2009 and 1Q2010 as aforementioned.
As a result of the foregoing, our overall gross profit increased marginally by approximately RMB0.3 million
or 0.7 % from RMB40.4 million in 1Q2009 to RMB40.7 million in 1Q2010 and our gross profit margin
increased from 38.7% in 1Q2009 to 60.5% in 1Q2010. The improvement in our overall gross profit margin
was mainly due to significant increase in margins of our CSC Business from 38.1% in 1Q2009 to 56.7%
in 1Q2010, which was mainly a result of greater-than-proportionate contribution from retention sums of
RMB6.6 million being recognised as revenue in our CSC Business during 1Q2010 (which improved our
gross profit margin in this period since there were generally no significant corresponding costs of sales as
explained earlier). For illustrative purpose, the percentage contribution of our CSC Business’s retention
sums revenue to in 1Q2010 was 9.8% of total revenue as compared to 0.8% in 1Q2009 respectively.
Furthermore, the greater-than-proportionate increase in gross profits percentage contribution from our
CET Design Services from 3.1% in 1Q2009 to 17.8% in 1Q2010 also caused our overall gross profit
margin to significantly improve as our CET Design Services typically has higher margins as compared to
other segments. In addition, the margins of our CET Design Services and Catalyst Business were also
higher in 1Q2010 as compared to 1Q2009. Gross profit margin of CET Design Services increased from
84.7% in 1Q2009 to 88.7% in 1Q2010, where we generally obtained better pricing for contracts
completed in 1Q2010 due to relatively better economic conditions at the times when such design
contracts were secured. Gross profit margin of Catalyst Business increased from 37.0% in 1Q2009 to
56.8% in 1Q2010, due mainly to change in sales mix and selling prices where there was greater-than-
proportionate contribution from sales of our specialised alcohol-hydrocarbon oxidative catalyst for use in
our proprietary alcohol-hydrocarbonylation refining systems. As mentioned in the section entitled “Our
Catalysts and Manufacturing Process” of the Prospectus, our alcohol-hydrocarbon oxidative catalysts for
our alcohol-hydrocarbonylation refining systems were able to command higher margins than other types
of catalysts as there are currently no known substitutable catalysts for use in our proprietary alcohol-
hydrocarbonylation refining systems. For illustrative purpose, our specialised alcohol-hydrocarbon
oxidative catalyst contributed approximately 66% of the 1Q2010 revenue from Catalysts Business as
compared to approximately 58% of the 1Q2009 revenue from Catalysts Business.
Notwithstanding the above, we do not expect such increase in our overall gross profit margin in 1Q2010
to continue for the rest of FY2010 as we do not expect overall proportion of contribution from retention
sums revenue to total revenue of FY2010 to be as high as 1Q2010 as aforementioned. Our overall gross
profit margin was 45.8%, 46.8%, 40.3%, 38.7% and 60.5% for FY2007, FY2008, FY2009, 1Q2009 and
1Q2010 respectively. Accordingly, we expect our overall gross profit margin for FY2010 to be not as high
as that of 1Q2010, but instead closer to the range of our overall gross profit margins for the past three
financial years. Please also refer to the section entitled “Trend Information” of this Prospectus.
132
Finance and other income increased by approximately RMB0.3 million or more than 100% from
approximately RMB21,000 in 1Q2009 to approximately RMB0.3 million in 1Q2010. The increase was
mainly due to increase in interest income of RMB0.2 million.

Marketing and distribution expenses increased by approximately RMB0.5 million, or 71.4%, from RMB0.7
million in 1Q2009 to RMB1.2 million in 1Q2010. The increase was mainly due to the increase in
marketing and promotional expenses of RMB0.5 million as a result of increased marketing activities and
advertisements placed in industry magazines and publications.
Administrative expenses increased significantly by approximately RMB5.8 million, or 126.0%, from
RMB4.6 million in 1Q2009 to RMB10.4 million in 1Q2010. The increase in administrative expenses was
due mainly to (i) increase in R&D expenses of RMB4.5 million due to increased R&D activities; (ii)
increase in staff and staff related cost of RMB0.4 million due to additional headcount to meet growing
administrative manpower needs; and (iii) net increase in other general and administrative expenses of
RMB0.9 million.
Finance costs
Finance costs increased by approximately RMB0.1 million or 50.0% from RMB0.2 million in 1Q2009 to
RMB0.3 million in 1Q2010. The increase was mainly due to the increase in interest expenses arising from
the Pre-IPO Investors’ convertible loan which was partially offset by decrease in interest expenses arising
from lower bank borrowings.
Income tax expense

Income tax expense was relatively unchanged at RMB5.2 million in 1Q2009 and RMB4.1 million in
1Q2010, which was generally in line with our profit before tax of RMB34.9 million and RMB29.2 million in
1Q2009 and 1Q2010 respectively. Our effective tax rates were 15.0% and 14.1% for 1Q2009 and 1Q2010
respectively.

As a result of the foregoing, our net profit for the year marginally decreased from RMB29.7 million in
1Q2009 and to RMB25.1 million in 1Q2010.
REVIEW OF PAST FINANCIAL POSITION

We set out below a description of our most recent balance sheet as at 31 March 2010, which should be
read in conjunction with the full text of this Prospectus, including the Audited Combined Financial
Statements as set out in Appendix A and the Unaudited Combined Financial Statements as set out in
Appendix B of this Prospectus.
Non-current assets
Non-current assets comprised property, plant and equipment, intangibles assets, land use rights, deferred
tax assets and investment securities. As at 31 March 2010, our non-current assets amounted to
approximately RMB146.9 million or 36.2% of our total assets, comprising property, plant and equipment
of approximately RMB117.2 million, intangibles assets of approximately RMB0.2 million, land use rights of
approximately RMB16.5 million, deferred tax assets of approximately RMB0.9 million, investment
securities of approximately RMB0.9 million and long-term prepayments of approximately RMB11.1 million.
Long-term prepayments are prepayments made to contractors for the acquisition of property, plant and
equipment, such as the construction of the Group’s R&D and office building. Such prepayments were
made within a year but were classified as long-term due to the nature of the assets for which such
prepayments were made for.
133
Our property, plant and equipment was the most significant component of our non-current assets and
comprised leasehold buildings, plant and equipment, motor vehicles, furniture and fittings and
construction-in-progress. Leasehold buildings accounted for approximately RMB61.5 million or 52.5% of
our property, plant and equipment whereas other plant and equipment accounted for approximately
RMB55.7 million or 47.5% of our property, plant and equipment as at 31 March 2010.
Current assets
Current assets comprised inventories, trade and other receivables, prepayments, and cash and cash
equivalents. Our current assets as at 31 March 2010 amounted to approximately RMB258.5 million or
63.8% of our total assets.
As at 31 March 2010, our inventories amounted to approximately RMB98.6 million or 38.1% of our
current assets, where our inventories comprised direct materials of RMB21.3 million, work-in-progress of
RMB47.1 million and finished goods of RMB30.2 million. As most of the materials used in the CSC
Business are stainless steel or carbon steel, such inventories are unlikely to become obsolete or
experience any diminution in value. Materials used in the Catalysts Business have a general expiry period
of 2 years, while finished goods have a general expiry period of 5 years. Further, approximately 70% of
the direct materials inventories were backed by customer orders while 100% of all work-in-progress and
finished goods were backed by customer orders. Furthermore, our inventories relate to our leading
advanced technologies and products which are considered to be at the forefront of our industry in the
PRC. Accordingly, it is unlikely for our inventories to become obsolete or experience any diminution in
value.
Trade and other receivables amounted to approximately RMB63.9 million or 24.7% of our current assets.
Trade receivables amounted to RMB32.5 million as at 31 March 2010, of which RMB6.6 million were past
due but not impaired. As at the Latest Practicable Date, RMB1.8 million of such past due trade
receivables remain to be collected. To the best of our knowledge and belief, no further allowance for
impairment for these receivables are required as such trade receivables are considered recoverable
because these customers are still operational and currently have low insolvency risk.
Prepayments amounted to approximately RMB16.2 million or 6.3% of our current assets and cash and
cash equivalents amounted to approximately RMB79.9 million or 30.9% of our current assets as at 31
March 2010.
Current liabilities
Current liabilities comprised trade and other payables, advances from customers, other liabilities, loans
and borrowings and income tax payables. Our current liabilities as at 31 March 2010 amounted to
approximately RMB258.7 million.
As at 31 March 2010, trade and other payables amounted to approximately RMB88.0 million or 34.0% of
our current liabilities. Of this, dividends payables to past shareholders of Hunan Anchun amounted to
RMB43.2 million. As at the Latest Practicable Date, RMB36.2 million of such dividends payables remains
to be paid. According to PRC rules, there is no time limit for the payment of dividends to shareholders.
Please refer to the section “Capitalisation and Indebtedness” of this Prospectus for more information.
Advances from customers relate to payments received from our customers in respect of secured
contracts which we have yet to deliver, and comprised (i) initial advance payment of 30% of the contract
value and (ii) subsequent progress payments, each between 25% and 40% of the contract value based
on the progress of the project as provided for in the contract. The contracts usually provided for 2 – 3
subsequent payments at various milestones (such as after 1 – 2 months after the execution of the
contracts, upon completion of certain percentage of the production process as well as upon delivery)
depending on the type of products/services provided and negotiation with the customers. Such advances
from customers amounted to approximately RMB155.6 million or 60.1% of our current liabilities as at 31
March 2010, which comprised approximately RMB92.0 million of initial advance payment and
approximately RMB63.6 million of subsequent progress payment.
Other liabilities amounted to RMB3.7 million or 1.4% of our current liabilities, loans and borrowings
amounted to RMB4.9 million or 1.9% of our current liabilities and income tax payables amounted to
RMB6.6 million or 2.6% of our current liabilities as at 31 March 2010.
134
Non-current liabilities mainly comprised loans and borrowings, which relate to the Pre-IPO Investors’
convertible loan and amounted to approximately RMB15.0 million. Other non-current liabilities relate to
derivative financial instrument of approximately RMB34,000 and deferred tax liabilities of approximately
RMB0.3 million as at 31 March 2010. The derivative financial instrument refers to the fair value of the
derivative component of the convertible loans, where such derivative component relates to the Pre-IPO
Investors’ right to receive compensation at the annual rate of 20% per annum in the event that our
Company is granted the eligibility-to-list letter from the SGX-ST but chooses not to carry out the initial
public offering.
Share capital and reserves

As at 31 March 2010, our share capital and reserves amounted to approximately RMB131.5 million.
LIQUIDITY AND CAPITAL RESOURCES

Our growth and operations have been funded by a combination of internal and external sources of funds.
Internal sources of funds comprise mainly cash generated from our operating activities and our cash and
cash equivalents while external sources comprise mainly financing facilities from financial institutions, and
loans and capital contribution from shareholders.
The principal uses of these funds are for working capital purposes such as payment of inventories and
trade payables, financing of trade receivables balances and operating expenses, as well as for our capital
expenditure and repayment of loans and advances.
Please refer to the section entitled “Capitalisation and Indebtedness” of this Prospectus for further details
of our cash and cash equivalents and level of borrowings.
Banking facilities
As at 31 March 2010, we had total banking facilities of RMB4.9 million, of which RMB4.9 million had been
utilised. Brief particulars of our banking facilities as at 31 March 2010 are as follows:-
Total Interest
Nature of amount rates
Name of facilities / available Utilised Unutilised Maturity (% per
bank purpose RMB’000 RMB’000 RMB’000 Profile annum)
China Working 4,875 4,875 – August Based on

Construction capital 2010 China
Bank Co., Ltd. (1) Interbank
Offered
Rate
(“CHIBOR”)
Total 4,875 4,875 –
Note:-
(1) The bank loan was originated in 2007 for principal loan amount of RMB27.5 million for up to 3 years tenure, and was secured
by (i) certain land use rights with carrying amount of approximately RMB11.0 million as at 31 March 2010 and certain
buildings with carrying amount of approximately RMB14.1 million as at 31 March 2010. The Group has made repayments for
the principal loan amount over the years and as at 31 March 2010, only RMB4.875 million of the original loan amount
remained outstanding. As at the Latest Practicable Date, our Group has repaid the aforesaid loan amount and such
encumbrances on our properties had been released.
To the best of our Directors’ knowledge, we are not in breach of any of the terms and conditions or
covenants associated with any credit arrangement or bank loan which could materially affect our financial
position and results of business operations or the investment by our Shareholders.
Our Directors are of the opinion that, after taking into account our internal and external sources of funds,
our Group has sufficient working capital as at the date of this Prospectus to meet our present
requirements.
135
Cash Flows
We set out below a summary of our Group’s net cash flows for FY2007, FY2008, FY2009 and 1Q2010:
RMB’000 FY2007 FY2008 FY2009 1Q2010
Net cash from operating activities 38,447 45,913 57,838 6,651

Net cash used in investing activities (38,571) (46,412) (23,660) (11,771)
Net cash generated from/(used in) financing activities 24,567 (9,433) 9,807 (3,437)
Net increase/(decrease) in cash and cash equivalents 24,443 (9,932) 43,985 (8,557)
Cash and cash equivalents at beginning of financial 29,914 54,357 44,425 88,410
year/period
Cash and cash equivalents at end of financial 54,357 44,425 88,410 79,853
year/period
Net cash generated from operating activities

FY2007
In FY2007, we recorded net cash inflow from operating activities of approximately RMB38.4 million, which
comprised operating cash flows before changes in working capital of approximately RMB33.8 million,
adjusted for net working capital inflow of approximately RMB12.5 million, interest income received of
approximately RMB0.6 million, interest payment of approximately RMB1.1 million and income tax
payment of RMB7.4 million. The net working capital inflows were mainly the result of:
(i) increase in advances from customers, trade and other payables, and other liabilities of
approximately RMB47.8 million, RMB3.8 million, and RMB2.5 million respectively, which were
mainly due to increases in receipts of deposit or progressive payments from our customers arising
from secured contracts and procurement of materials; and
(ii) decrease in trade and other receivables of approximately RMB9.5 million as we had reduced our
receivables balances by exercising more debt collection efforts.
The above working capital inflows were partially offset by:
(iii) increase in inventories of approximately RMB43.4 million to meet expected higher production
demand in line with our Group’s expansion plans; and
(iv) increase in prepayments of approximately RMB7.6 million mainly due to advances to suppliers in
line with the increase in direct material procurements to meet expected higher production demand
as aforementioned.
FY2008
comprised operating cash flows before changes in working capital of approximately RMB33.2 million,
adjusted for net working capital inflow of approximately RMB17.6 million, interest received of
approximately RMB0.6 million, interest payment of RMB2.4 million and income tax payment of
approximately RMB3.0 million. The net working capital outflows were the result of:
(i) increase in advances from customers of approximately RMB126.6 million mainly due to increases
in receipts of deposit or progressive payments from our customers arising from secured contracts
and procurement of materials, and increase in other liabilities of approximately RMB2.7 million; and
(ii) decrease in prepayments of approximately RMB8.6 million as we paid our suppliers for the
procurements of materials.
136
The above working capital inflows were partially offset by:
(iii) increase in inventories of approximately RMB98.0 million to meet expected higher production
demand in line with our Group’s expansion plans and order books;
(iv) increase in trade and other receivables of approximately RMB17.2 million, which were mainly due
to increase in VAT receivables as a result of inventory procurement; and
(v) decrease in trade and other payables of approximately RMB5.1 million as we paid our suppliers for
the procurements of materials.
FY2009
comprised operating cash flows before changes in working capital of approximately RMB99.8 million and
adjusted for net working capital outflow of approximately RMB35.4 million, interest received of
approximately RMB0.7 million, interest payment of approximately RMB2.1 million, and income tax
payment of approximately RMB5.2 million. The net working capital outflows were the result of:-
(i) decrease in advances from customers of approximately RMB138.5 million, which was mainly due
to recognition of revenues upon completion of the several contracts in FY2009; and
(ii) increases in trade and other receivables of approximately RMB3.1 million and prepayments of
approximately RMB4.1 million, which were generally in line with increased business activities in
FY2009.
The above working capital outflows were partially offset by:
(iii) decrease in inventory of approximately RMB103.8 million, which was mainly due to completion and
handover of several large contracts in FY2009; and
(iv) increase in trade and other payables, and other liabilities of approximately RMB3.7 million and
RMB2.8 million respectively.
1Q2010
In 1Q2010, we recorded net cash inflow from operating activities of approximately RMB6.6 million, which
comprised operating cash flows before changes in working capital of approximately RMB32.1 million and
adjusted for net working capital outflow of approximately RMB25.1 million, interest received of
approximately RMB0.2 million, interest payment of approximately RMB0.1 million, and income tax
payment of approximately RMB0.4 million. The net working capital outflows were the result of:-
(i) decrease in advances from customers of approximately RMB4.5 million, which was mainly due to
recognition of revenues upon completion of certain contracts in 1Q2010, and decrease in other
liabilities of approximately RMB5.4 million due to reduced accrued salaries and bonus after the
year end;
(ii) increase in trade and other receivables of approximately RMB16.7 million, which was mainly due to
the increase in current trade receivables as a result of longer trade receivables’ turnover days in
1Q2010 due mainly to the Chinese New Year holiday in third week of February 2010, where many
of our customers were closed for extended period. Notwithstanding that, the average trade
receivables’ turnover days were still within the range of credit terms we grant our customers;
(iii) increase in inventory and prepayments of approximately RMB2.8 million and RMB4.9 million
respectively.
137
The above working capital outflows were partially offset by:
(iv) increase in trade and other payables of approximately RMB9.1 million, mainly as a result of
increased procurement activities.
Net cash used in investing activities

FY2007
In FY2007, we recorded a net cash outflow from investing activities of approximately RMB38.6 million.
This was mainly due to the purchase of property, plant and equipment for expansion of our production
facilities.
FY2008
This was mainly due to the purchase of property, plant and equipment for expansion of our production
facilities partially offset by cash inflow arising from the proceeds from disposal of equipment.
FY2009
This was mainly due to the purchase of property, plant and equipment and net cash outflow from disposal
of subsidiary.
1Q2010
In 1Q2010, we recorded a net cash outflow from investing activities of approximately RMB11.8 million.
This was mainly due to the purchase of property, plant and equipment.
Net cash generated from/(used in) financing activities

FY2007
In FY2007, we recorded a net cash inflow from financing activities, which amounted to RMB24.6 million
as a result of the proceeds from loans and borrowings of RMB27.5 million, which was secured by
properties belonging to our Group with fair value amounting to RMB26.6 million. This was partially offset
by repayment of loans and borrowings by RMB1.7 million, dividend payment of RMB0.98 million and net
repayment of loan from shareholders and employees of RMB0.2 million.
FY2008
In FY2008, we recorded a net cash outflow from financing activities, which amounted to approximately
RMB9.4 million as a result of the repayment of bank borrowings of RMB9.3 million and dividend payment
of RMB1.2 million. These were partially offset by net loans from shareholders and employees amounting
to RMB0.7 million.
FY2009
In FY2009, we recorded a net cash inflow from financing activities, which amounted to approximately
RMB9.8 million. This was mainly due to proceeds from bank borrowings and convertible loan of
approximately RMB12 million and RMB15 million respectively, which were partially offset by repayment of
bank borrowings and net repayment of loan from shareholders and employees of approximately RMB9.3
million and RMB6.7 million respectively, as well as dividend payment of approximately RMB1.3 million.
1Q2010
In 1Q2010, we recorded a net cash outflow from financing activities, which amounted to approximately
RMB3.4 million as a result of the repayment of bank borrowings of RMB14.3 million and dividend
payment of RMB4.8 million. These were partially offset by increase in loans from shareholders by
RMB15.7 million.
138
MATERIAL CAPITAL EXPENDITURES AND DIVESTMENTS
The material capital expenditures made by our Group for FY2007, FY2008, FY2009, 1Q2010 and for the
period from 1 April 2010 up to the Latest Practicable Date were as follows:-
Audited Unaudited
1 April 2010
to the
Latest
Practicable
RMB ‘000 FY2007 FY2008 FY2009 1Q2010 Date
Property, plant and equipment 42,333 54,076 13,739 4,887 4,724
Total 42,333 54,076 13,739 4,887 4,724
The above material capital expenditures during the periods under review mainly pertained to our Group’s
expansion in production facilities and/or capacities during the same periods.
Save for the disposal of Anchun Biotech, there were no material divestments by our Group during the
periods under review and up to the Latest Practicable Date. Please refer to the section entitled
“Restructuring Exercise” of this Prospectus for more information on the disposal of Anchun Biotech.
MATERIAL COMMITMENTS AND CONTINGENCIES

We have various contractual obligations, some of which are required to be recorded as liabilities in our
financial statements, including long-term and short-term loans. Others, such as purchase obligations, are
not generally required to be recorded as liabilities on our financial statements. We have certain additional
commitments and contingencies that are not recorded on our financial statements but may result in future
cash and/or other requirements.
Encumbrance over our Group’s properties

As at the Latest Practicable Date, none of our properties is mortgaged to any bank or financial institution
to secure any facility.
Capital Commitments
As at the Latest Practicable Date, we have capital commitments arising from additions to properties, plant
and equipment of approximately RMB8.7 million.
Operating Lease Commitments

As at the Latest Practicable Date, our Group has no operating lease commitments.
Save as disclosed above and in the section entitled “Prospects, Business Strategies and Future Plans” of
this Prospectus, we do not have other material plans on capital expenditures, divestments and
commitments as at the Latest Practicable Date.
139
FOREIGN EXCHANGE EXPOSURE
Our reporting currency is in RMB. All our business operations are carried out in the PRC. During the
periods under review, all of our purchases and sales, and substantially our expenses, were denominated
in RMB. Our books and records are maintained in RMB. However, to the extent that we may enter into
transactions in currencies other than RMB in the future, our financial results may be subject to
fluctuations between such foreign currencies and RMB. Transactions in currencies other than the
functional currency during the period, if any, will be translated into the functional currency at exchange
rates in effect at the time of the transactions. Monetary assets and liabilities denominated in currencies
other than the functional currency at the balance sheet date, if any, will be translated into the functional
currency in effect at the balance sheet date. Exchange gains and losses are dealt with in the profit and
loss accounts of our Group.
We have no material foreign currency exchange gain or loss during the periods under review. Currently,
we do not have any hedging policy with respect to foreign exchange exposure and we did not use any
financial instruments for hedging purposes during the periods under review and up to the Latest
Practicable Date. We will continue to monitor our foreign exchange exposure and may employ hedging
instruments to manage our foreign exchange exposure should the need arise.
CHANGES IN ACCOUNTING POLICIES

Except as disclosed in the Audited Combined Financial Statements as set out in Appendix A and the
Unaudited Combined Financial Statements as set out in Appendix B of this Prospectus, there have been
no changes in our accounting policies for the last three (3) financial years ended 31 December 2009 and
three (3) months ended 31 March 2010.
CREDIT MANAGEMENT
In general, we require our customers to make advance payment of 30% of the contract value upon
signing of the contract after assessing their creditworthiness. Thereafter, we will invoice our customers
based on the progress of the projects as provided for in the contract. Credit terms extended to our
customers are generally 90-180 days. We typically received about 95% of the contract value upon
delivery of our products and/or services to our customers.
Depending on the contract terms, our customers generally retain 5% of the contract sum which will be
released to us after the expiry of the defects liability period. The defects liability period is typically 12
months after delivery of the goods. The retention sum is based on the contract signed and determined at
the contract negotiation stage, depending on our customers’ requirement. The retention sums are only
recognised as revenue after the applicable defects liability period. Please refer to the section entitled “Our
Integrated Business Model – System Design Process” of this Prospectus for more information.
In assessing the credit terms to be extended to a customer, we take into account the nature of the
contract with such customer, creditworthiness of such customer, payment history of such customer (for an
existing customer) and the relationship that we have with such customer. For extension of credit terms
beyond 90 days, further assessment generally will be conducted by our Head of Sales and Marketing, Li
Chun Yang, together with our senior management.
Trade receivables are non-interest bearing and were generally in line with our business activities for
FY2007, FY2008, FY2009 and 1Q2010. As at the end of FY2007, FY2008, FY2009 and 1Q2010, the
aggregate trade receivables amounted to approximately RMB9.7 million, RMB3.1 million, RMB10.8 million
and RMB32.5 million respectively. As at the Latest Practicable Date, we had collected RMB10.7 million of
the trade receivables of RMB32.5 million as at 31 March 2010 and RMB21.8 million have yet to be
collected. Of this amount, RMB1.8 million were past due but not impaired as these trade debtors are
mainly state-owned enterprises, listed companies, or have on-going business relations or repayment
arrangements.
To the best of our knowledge and belief, no further allowance for impairment for these receivables are
required as such trade receivables are considered recoverable because these customers are still
operational and currently have low insolvency risk.
140
Allowance for impairment of trade receivables
In the event that a customer fails to pay us within the stipulated period, our Finance and Sales and
Marketing departments will follow up with the customer to attempt to recover the debt before seeking
legal recourse. We monitor all outstanding debts closely so that specific allowances may be made in the
event that the recovery of any debt appears doubtful. The quantum of such provision is dependent on the
duration for which the debt is overdue as well as our assessment of the likelihood that such debt may be
unrecoverable. We did not have any bad debts written off for FY2007, FY2008, FY2009 and 1Q2010.
During the periods under review, our charges relating to allowance for impairment of trade receivables
were as follows:-
RMB’000 FY2007 FY2008 FY2009 1Q2010
Allowance for impairment of trade receivables 2,079 2,406 1,154 170
The above allowance for impairment of trade receivables amounted to 1.8%, 2.0%, 0.4% and 0.3% of the
total revenue for FY2007, FY2008, FY2009 and 1Q2010 respectively. Accordingly, such allowances did
not significantly affect our Group’s financial performance during the periods under reviews.
Trade receivables’ turnover in days

Our average trade receivables’ turnover days for FY2007, FY2008, FY2009 and 1Q2010 are as follows:
FY2007(1) FY2008(1) FY2009(1) 1Q2010(2)
Trade receivables’ turnover in days 57 19 9 29
Notes:-
(1) Trade receivables turnover = (Average trade receivables / revenue) X 365 days. Where “Average trade receivables” is defined
as the average of the opening and closing trade receivables amount of the relevant year.
(2) Trade receivables turnover = (Average trade receivables / revenue) X 90 days. Where “Average trade receivables” is defined
as the average of the opening and closing trade receivables amount of the relevant period.
Trade receivables’ turnover days decreased from 57 days in FY2007 to 19 days and 9 days in FY2008
and FY2009 respectively. The lower turnover days in FY2008 and FY2009 were mainly because of our
debt collection efforts and prompt payment from our customers. Further, we do not expect the
improvement trend of trade receivables’ turnover in days to continue but instead expect the trade
receivables’ turnover in days to be within the range of trade receivables’ turnover in days for the past
three financial years. Trade receivables’ turnover days increased to approximately 29 days in 1Q2010 due
mainly to the Chinese New Year holiday in February, where many of our customers were closed for
extended period. Notwithstanding that, the average trade receivables’ turnover days were still within the
range of credit terms we grant our customers.
Aging Analysis
The ageing schedule for trade receivables as at 31 March 2010 is as follows:-
As at 31 March 2010
RMB ’000 %
Within 1 year 33,192 86.6

Between 1 year to 2 years 3,101 8.1
More than 2 years 2,048 5.3
Total trade receivables 38,341 100.0

Allowance for impairment of trade receivables (5,809)
Net trade receivables 32,532
Amount received as at the Latest Practicable Date 10,658
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Credit policy of our suppliers
Credit terms granted by our trade creditors may vary from supplier to supplier. In general, our credit terms
granted by our suppliers are usually 30 days. Our average trade payables’ turnover days for FY2007,
FY2008 and FY2009 are as follows:
FY2007(1) FY2008(1) FY2009(1) 1Q2010(2)
Trade payables’ turnover in days 30 30 11 30
Notes:-
(1) Trade payables turnover = (Average trade payables / cost of sales) X 365 days. Where “Average trade payables” is defined as
the average of the opening and closing amount of trade payables of the relevant year.
(2) Trade payables turnover = (Average trade payables / cost of sales) X 90 days. Where “Average trade payables” is defined as
the average of the opening and closing amount of trade payables of the relevant period.
Our trade payables’ turnover in days was relatively stable and in line with the credit terms granted by our
suppliers, save for FY2009. The relatively lower trade payables’ turnover for FY2009 was due mainly to
greater repayments to our suppliers just prior to the end of FY2009.
In the course of our procurement process, we may also make certain deposits to suppliers which are
accounted for as prepayments on our balance sheet. Such prepayments to suppliers amounted to
RMB12.6 million, RMB5.4 million, RMB7.3 million and RMB10.0 million as at end of FY2007, FY2008,
FY2009 and 1Q2010 respectively. We have not previously encountered any incidences where we suffered
material losses in relation to such prepayments to suppliers.
INVENTORY MANAGEMENT
Our inventory comprises mainly raw and other materials, work-in-progress and finished goods. Our
inventories amounted to RMB101.8 million, RMB199.9 million, RMB95.8 million and RMB98.6 million for
FY2007, FY2008, FY2009 and 1Q2010 respectively, where a significant portion of our inventories
pertained to work-in-progress and finished goods. As at the end of FY2007, FY2008, FY2009 and
1Q2010, the aggregate work-in-progress and finished goods amounted to RMB76.8 million, RMB174.5
million, RMB77.2 million and RMB77.3 million, which represented 75.4%, 87.2%, 80.6% and 78.3% of
our inventory balances respectively.
Our inventory level is optimally maintained based on secured orders placed by customers and taking into
account of our estimated future sales and production needs, price trends of direct materials and our
working capital. We conduct stock checks on a regular basis and generally maintain sufficient commonly
used steel materials (such as carbon and stainless steel) for production based on our management
estimates.
We set out the general expiry period for the CSC Business and Catalysts Business below:
CSC Business Catalysts Business
Materials Not applicable 2 years

Work-in-progress Not applicable Not applicable
Finished goods Not applicable 5 years
There are no inventories for the CET Design Services. As most of the materials used in the CSC
Business are stainless steel or carbon steel, such inventories are unlikely to become obsolete or
experience any diminution in value. Materials used in the Catalysts Business have a general expiry period
of 2 years, while finished goods have a general expiry period of 5 years. In addition, approximately 93%
of the total inventories as at 31 March 2010 are backed by customer orders. Furthermore, our inventories
relate to our leading advanced technologies and products which are considered to be at the forefront of
our industry in the PRC. Accordingly, it is unlikely for our inventories to become obsolete or experience
any diminution in value.
142
Generally, we do not enter into long term contracts with our suppliers and we currently do not hedge or
have the intention to hedge the price or volume of our materials in the near future due to, inter alia, the
following:-
(i) Our cost mark-up approach to contract negotiation with our customers. Our contracts are
negotiated with our customers based on existing market prices of materials, possible selling prices
of our products/services and our intended gross margins. Hence, we fix the prices of required
materials at approximately the same time as the contracts we signed with our customers so as to
protect our gross margins;
(ii) As our chemical systems and components may be customised according to our customers’
specifications, the resulting materials requirements may vary from contract to contract; and
(iii) We monitor the market prices of steels through frequent contact with our suppliers so as to be
constantly appraised on potential market price fluctuations.
Allowance for impairment and write-off of inventories

Currently, we do not have general allowance policy for slow-moving or obsolete inventories. Nevertheless,
we will make allowances for inventory obsolescence when the net realisable value of our inventory is
below its corresponding carrying cost. There has been no inventory written-off or allowance for inventory
impairment for FY2007, FY2008, FY2009 and 1Q2010.
Inventory turnover in days

Our average inventory turnover days for FY2007, FY2008 and FY2009 are as follows:
FY2007(1) FY2008(1) FY2009(1) 1Q2010(2)
Inventory turnover in days 470 855 307 330
Notes:-
(1) Inventory turnover = (Average inventory balances / cost of sales) X 365 days. Where “Average inventory balances” is defined
as the average of the opening and closing amount of inventory of the relevant year.
(2) Inventory turnover = (Average inventory balances / cost of sales) X 90 days. Where “Average inventory balances” is defined
as the average of the opening and closing amount of inventory of the relevant period.
Our inventory turnover days increased from 470 days in FY2007 to 855 days in FY2008. The increase in
inventory turnover days in FY2008 was due mainly to the significant increase in inventories from
RMB101.8 million in FY2007 (FY2006: RMB58.5 million) to RMB199.9 million in FY2008, while cost of
sales only increased marginally from RMB62.2 million in FY2007 to RMB64.4 million in FY2008 (which
was in line with the revenue trend for the corresponding periods). The significant increase in inventories
was mainly due to the increase in work-in-progress and finished goods from RMB76.8 million in FY2007
to RMB174.5 million in FY2008, which was due mainly to materials requirements of secured contracts
due for delivery in early FY2009 and anticipation of economic upturn and improved sales demand in
FY2009. In addition, we were able to increase our actual production output from 2H2008 with the
increase in our production capacities as a result of the completion of our new production facilities in mid
2008.
Our inventory turnover days subsequently declined to 307 days and 330 days in FY2009 and 1Q2010
respectively. This was due to both the increase in the cost of sales to RMB176.0 million in FY2009 and
RMB26.5 million in 1Q2010 (which were in line with the revenue trends for the corresponding periods),
and decreases in inventory balances to RMB95.8 million and RMB98.6 million as at end of FY2009 and
1Q2010 respectively. The lower inventory values was mainly due to (i) significantly lower steel costs which
was in turn due to decrease in market prices where our average steel purchase costs declined from
RMB21,400/tonne in FY2008 to RMB10,900/tonne and RMB13,600/tonne in FY2009 and 1Q2010
respectively; and (ii) relatively lower stock levels of inventory units as compared to end of FY2009. Please
refer to the section entitled “Management’s Discussion and Analysis of Results of Operations and
Financial Position” of this Prospectus for more details on our revenue and cost of sales trends.
143
PROSPECTS, BUSINESS STRATEGIES AND FUTURE PLANS
PROSPECTS
Information under this section is extracted from the executive summary of the CNCIC Report for the
purposes of incorporation in this Prospectus and issued to our Company in September 2010. This CNCIC
Report contains certain statements that are “forward-looking” and are based on underlying assumptions
containing variables that may have changed since the date of issue. This information has not been
independently verified by us, the Manager, Underwriter and Placement Agent, or any of our and their
respective affiliates or advisors. The information may not be consistent with other information compiled
within or outside the PRC. Please see the section entitled “Cautionary Note On Forward-looking
Statements” of this Prospectus.
Prospects of the Ammonia Industry in the PRC

75,000 100.0%
60,000 80.0%
45,000 60.0%
kt/yr
30,000 40.0%
15,000 20.0%
0 0.0%
2000 2002 2004 2006 2008 2010(F) 2012(F)
Production Capacity Production Volume Utilisation Rate (%)

Source: CNCIC
Production utilisation rate ranges between 80.2% and 90.1% between 2000 and 2009. Production
utilisation rate, as measured by dividing production volume by production capacity, of between 80% and
90% is considered normal for the ammonia industry as a result of the inclusion of smaller-scale,
uneconomically-viable ammonia production facilities as well as scheduled maintenance time of the
remaining ammonia production facilities.
Production capacity and volume are expected to grow steadily from 63,000 kt/yr and 51,360 kt/yr in 2009
to 70,000 kt/yr and 63,000 kt/yr in 2012, respectively, representing a CAGR of approximately 3.6% and
7.0% in the same period. The key reasons underpinning such expected steady growth in the ammonia
industry are as follows:-
a) Persistent and stable increase in demand for fertiliser to expand crop production and in other
industry uses for ammonia
To maintain food self-sufficiency for a growing middle class, the PRC government will continue its
preferential policies to increase crop production yield, including but not limited to direct subsidies
for purchasing agricultural machinery and tools as well as promoting steady growth of the
production volume of fertiliser. Total direct subsidies from such preferential policies amounted to
RMB120.0 billion in 2009. It is expected that crop production will increase by at least 1% every year
from 2010 to 2012, increasing the total crop production from 530,800 kt/yr in 2009 to 547,000 kt/yr
in 2012. The growth in crop production is expected to contribute significantly to the growth in
demand for fertiliser and consequently, ammonia.
144
Furthermore, as the chemical fibre and plastic industry continues to develop in the PRC, industrial
uses and demand of ammonia is expected to increase from approximately 5,000 kt in 2009 to
7,000 kt in 2012 to produce chemical products such as caprolactam (an organic compound which
is the precursor to synthetic polymer), artificial silk and phenol formaldehyde resin.
b) Continued consolidation and expansion of ammonia production capacities in a highly-fragmented

industry induced by competition and requirement for energy-efficiency
At its peak, the number of ammonia producers numbered over 1,600 in the 1980s. Many of these
producers operate ammonia production facilities which are considered to be inefficient, with
production outputs lower than 80.0 kt/yr. Such production facilities typically have a comprehensive
energy consumption of between 1,600 and 1,800 kg standard coal/tonnage ammonia (i.e., the
amount of standard coal in kg required to produce a ton of ammonia). According to “The Norm of
Energy Consumption per Unit Product of Synthetic Ammonia” published by Standardization
Administration of PRC in 2008, the comprehensive energy consumption level above 1,500 kg
standard coal/tonnage ammonia is considered inefficient. Furthermore, according to “Admittance
Condition of Ammonia Industry” which will be published by National Development and Reform
Commission in 2010, production activities at ammonia production facilities with a comprehensive
energy consumption of more than 1,500 kg standard coal/tonnage ammonia will be prohibited from
2015 onwards. Comprehensive energy consumption of less than 1,500 kg standard coal/tonnage
ammonia is typically achieved with production capacities of more than 80 kt/yr.
Notwithstanding that comprehensive energy consumption production facilities of less than 1,500 kg
standard coal/tonnage ammonia is typically achieved with production capacities of more than 80
kt/yr, production capacities of less than 180 kt/yr are typically considered within the ammonia
industry to be inefficient and are not economically viable in the long run. Over 83.3% of the existing
ammonia producers operate production facilities with production capacities of less than 180 kt/yr. It
is expected that these ammonia producers will either upgrade and expand their existing production
capacities or undergo further consolidation to increase their competitiveness in the market.
As a result of the expected increase in demand for ammonia from agriculture and other industries uses,
the domestic demand for ammonia is expected to increase from 51,636 kt/yr in 2009 to 60,000 kt/yr in
2012, representing a CAGR of approximately 5.1% in the same period.
Prospects of the methanol industry in the PRC

Source: CNCIC
145
Production utilisation rate ranges between 46.5% and 82.4% between 2005 and 2009. The low production
utilisation rate was due mainly to the switch by operators of co-production facilities to concentrate on
increasing production volume for ammonia instead of methanol in 2009. The switch by these operators
was due mainly to the higher average selling price of ammonia of RMB2,400 per tonne as compared to
RMB1,900 for methanol in 2009. Furthermore, methanol producers with methanol production facilities of
less than 200 kt/yr generally face higher average cost of production as compared to the other methanol
producers operating methanol producing facilities of more than 200 kt/yr. Accordingly, these methanol
producers generally lowers the utilisation rate of their methanol producing facilities when the average
selling price of methanol exceeds their average cost of production, contributing to the industry-wide low
production utilisation rate.
Notwithstanding that, strong growth in the methanol industry is expected to increase both production
capacity and volume of methanol from 28,400 kt/yr and 13,200 kt/yr in 2009 to 33,000 kt/yr and 23,100
kt/yr in 2012, respectively, representing an increase in production utilisation rate from 46.5% in 2009 to
70.0% in 2012 as a result of the following:-
a) Increase in demand for DME and methanol-to-olefin uses

As the PRC government seeks to ensure its energy security, it is increasingly seeking alternative
fuel sources. DME is a promising fuel in diesel engines, petrol engines, and gas turbines owing to
its high cetane number (a measurement of combustion quality). In addition, the use of blended
DME and LPG as an alternative cooking or heating fuel in the PRC is expected to increase.
Accordingly, the industry demand for methanol as a result of an increase in demand for DME, is
expected to increase from 1,380 kt/yr in 2007 to 4,200 kt/yr in 2012, representing a CAGR of
24.9%
Furthermore, using the methanol to olefin (“MTO”) process, methanol can also be converted to
ethylene and propylene, the two largest chemicals produced by the petrochemical industry. Such
breakthrough in technologies is expected to increase the demand for methanol from nil in 2007 to
4,650 in 2012. The table below sets out the forecasted growth in methanol consumption as a result
of increase in demand for other methanol-based chemicals:-
2007 2012 2007 – 2012
Industry Consumption % Consumption % CAGR (%)

(kt/yr) (kt/yr)
Formaldehyde 4,690 42.4 5,300 23.8 2.5

Fuel 1,750 15.8 3,000 13.5 11.0
Acetic acid 1,170 10.6 2,400 10.8 15.5
MTBE 710 6.4 950 4.3 6.0
Dimethyl ether 1,380 12.5 4,200 18.8 24.9
Methylamine 500 4.5 550 2.5 1.9
Chlorinated methanes 250 2.3 300 1.3 3.7
Methanol to olefin 0 0.0 4,650 20.9 n.m
Other 600 5.4 950 4.3 9.6
Total 11,050 100.0 22,300 100 15.1
Source: CNCIC
b) Competition and energy-efficiency induced consolidation in a highly-fragmented industry and

expansion of methanol production capacities
218 of the existing methanol production facilities have production capacities in the PRC of less than
200 kt/yr, and would require hardware and technological upgrade to be economically viable.
Increase in competition is expected to result in industry consolidation, leading to a slower absolute
growth in production capacities while increasing overall production efficiency of the PRC methanol
industry through the replacement of existing low-efficiency methanol production facilities. The
higher growth rate in demand for methanol than production capacities growth rate is expected to
increase the production utilisation rate to 70.0% in 2012.
146
As a result of the increase in demand for methanol as alternative fuel and for other uses, the domestic
demand for methanol is expected to increase from 11,050 kt/yr in 2007 to 22,300 kt/yr in 2012,
representing a CAGR of approximately 15.1%.
Prospects of coal-based ammonia and methanol synthesis technologies

Coal-based ammonia and methanol synthesis technologies are expected to continue to dominate the
PRC market, with increasing focus on increasing scale of production and adopting environmentally
friendly technologies with low energy consumption
While natural gas is an excellent raw material for the production of ammonia and methanol, China has
limited natural gas resources as compared to coal. In addition, current natural gas-based ammonia and
methanol production facilities are mainly located in the southwest and northwest part of the PRC, which
is far away from the fertiliser consumption market, mainly located in the eastern and middle part of China.
Furthermore, the Natural Gas Utilisation Policy, as promulgated by National Development and Reform
Commission in 2007 specifies that ammonia and methanol producers are prohibited from using natural
gas in the production of ammonia and methanol, due mainly to tight supply of natural gas and high
consumption levels for natural gas in China. As a result of the above, the use of coal as raw materials for
the production of ammonia and methanol is expected to continue to dominate the PRC ammonia and
methanol industry, and accordingly, coal-based ammonia and methanol synthesis technologies are
expected to be the dominant technologies used in the PRC.
The PRC is the largest ammonia and methanol producing country in the world, accounting for
approximately 34% and 30% of the global production volume of ammonia and methanol in 2009,
respectively. As aforementioned, coal is predominantly used as raw materials for the production of
ammonia and methanol. Accordingly, there is strong demand for coal-based ammonia and methanol
synthesis technologies, chemical systems and components as well as catalysts. Hunan Anchun operates
one of the largest R&D centres in the PRC, based on the number and qualifications of its research
personnel and their collective research capability, as well as one of the largest manufacturing facilities for
the ammonia and methanol related systems and technologies in the PRC, based on its manufacturing
and production capacity. It is widely considered to be a leading enterprise and brand name in the PRC,
providing integrated chemical systems engineering and technology solutions to the PRC petrochemical
and chemical industries, in particular, manufacturers of ammonia and methanol based products.
TREND INFORMATION
For the periods under review up to the Latest Practicable Date, our Directors have observed the following
trends:-
(i) Increasing demand for our integrated chemical systems engineering and technology solutions as a
result of general increase in demand for ammonia and methanol as well as demand for
replacement chemical systems to improve the production efficiencies of existing ammonia and
methanol plants in the PRC.
Order books
Pursuant to strong industry demand as aforementioned, we have secured strong order books as at
the Latest Practicable Date, which stood at approximately RMB256.4 million of unfulfilled secured
contracts which we expects to deliver RMB235.5 million and RMB20.9 million worth of contracts in
FY2010 and FY2011 respectively.
(ii) Steel materials was the most significant component in our materials costs, and accounted for
73.4%, 71.7%, 73.8%, 78.1% and 69.4% of our overall cost of sales in FY2007, FY2008, FY2009,
1Q2009 and 1Q2010 respectively. Our steel purchase costs are subjected to price fluctuations in
the commodity metal markets. Our average steel purchase costs for FY2007, FY2008, FY2009 and
1Q2010 were approximately RMB22,400/tonne, RMB21,400/tonne, RMB10,900/tonne, and
RMB13,600/tonne respectively, which were generally in line with the fluctuations of steel market
147
prices over the same periods. We expect the prices of steel materials to remain volatile going
forward, nevertheless, we adopt a cost mark-up approach to contract negotiation with our
customers. Given our track record, we believe that we should be able to pass on any increase in
steel materials prices to our customers. Accordingly, we do not expect our profit margin to be
significantly and adversely affected due to any steel price volatility.
(iii) Labour costs have generally been on an increasing trend due to a tightening labour market in the
PRC, particularly so for skilled labour and engineers. Our Directors believe that the trend of
increasing labour costs will generally continue going forward.
(iv) Our overall gross profit margin was 45.8%, 46.8%, 40.3%, 38.7% and 60.5% for FY2007, FY2008,
FY2009, 1Q2009 and 1Q2010 respectively. In 1Q2010, our overall gross profit margin increased to
60.5% due to general increases in all our segmental gross profit margins, in particular increase in
our CSC Business gross profit margin to 56.7% (mainly as a result of greater-than-proportionate
contribution from retention sums being recognised as revenue in the same period, which improved
our gross profit margin in 1Q2010 since there were generally no significant corresponding costs of
sales for retention sums in the same period as explained earlier. Please refer to the section entitled
“Management’s Discussion and Analysis of Results of Operations and Financial Position” of this
Prospectus for more information.). Nevertheless, we do not expect such increase in our overall
gross profit margin in 1Q2010 to continue for the rest of FY2010 as we do not expect overall
proportion of contribution from retention sums revenue to total revenue of FY2010 to be as high as
1Q2010 as aforementioned. Accordingly, we expect our overall gross profit margin for FY2010 to be
not as high as that of 1Q2010, but instead closer to the range of our overall gross profit margins for
the past three financial years.
Save as disclosed above and in the sections “Risk Factors”, “Management’s Discussion and Analysis of
Results of Operations and Financial Position” and “Prospects, Business Strategies and Future Plans” of
this Prospectus and barring any unforeseen circumstances, our Directors believe that there are no other
significant known recent trends in production, sales and inventory, and in the costs and selling prices of
our products and/or services, or other known trends, uncertainties, demands, commitments or events that
are reasonably likely to have a material effect on our net sales or revenue, profitability, liquidity, or capital
resources, or that would cause financial information disclosed in this Prospectus to be not indicative of
our future operating results or financial conditions.
BUSINESS STRATEGIES AND FUTURE PLANS

As at the end of 1Q2010, our combined production capacities are approximately 13,125 tonnes of
chemical systems and components and approximately 2,100 tonnes of catalysts per annum. Please refer
to the section entitled “Production Facilities, Equipment and Capacity” of this Prospectus for details.
To meet the anticipated increase in market demand for our products in the future, we intend to increase
our Group’s production facilities and capabilities by increasing our production area and/or acquiring plant
and equipment progressively. We estimate that our annual combined production capacity of chemical
systems and components will increase by up to 5,000 tonnes from approximately 13,125 tonnes to
approximately 18,125 tonnes, and our production capacity of catalysts will increase by up to 2,000
tonnes, resulting in our combined production capacity of catalysts increasing from 2,100 tonnes to 4,100
tonnes. We expect these expansion plans will be completed within one and a half years from the date of
our Company’s admission to the SGX-ST. In the event of any material delay in the completion of such
expansion plans, we will publicly announce the reasons for such delay and expected completion timing on
the SGXNET.
In addition, to facilitate the expansion of our production area and capacity, we intend to lease or acquire a
site in Changsha to establish our third plant. In this regard, we have identified a particular site with an
area of approximately 300 mu located within the Changsha National Hi-tech Industrial Development Zone
and have signed a letter of understanding with the Administrative Committee of Changsha National Hi-
tech Industrial Development Zone (the “Committee”) setting out our
148
intention to acquire such site. The eventual acquisition of such site is subject to satisfactory due diligence,
negotiation and execution of conclusive binding land use right agreements with the relevant local land
resources authority on mutually agreeable terms. In the event that we do not proceed to acquire the said
site, we believe that there are other alternative sites available within Changsha for our consideration. To
date, we have not entered into any specific legally-binding contracts or agreements to acquire any land.
We intend to utilise S$21.5 million (or approximately RMB108.6 million) of our net proceeds from the
Invitation for the expansion of our production facilities and capabilities.
We believe that one of the key reasons for our success in offering customised and cost-effective solutions
to our customers is our strong R&D capabilities. We intend to continue to place strong emphasis on R&D
so as to be able to offer a wider range of innovative and cost effective solutions to our customers. In
particular, we intend to research on ways to enhance our existing technology to further reduce the energy
consumption per unit product of ammonia and methanol. For example, we are in the process of
developing the gas making system and components and raw gas conversion system
and components , which aim to resolve the current technological
restrictions and environmental issues, such as unstable and intermittent reactions, low efficiency, waste of
energy and pollutions. As such, we intend to increase the number of engineers and expand our R&D
facilities and equipment.
In addition, as part of our R&D initiatives, we intend to continuously explore R&D opportunities to
collaborate with other institutions, including but not limited to, academic and research institutions as well
as our customers. We believe that such collaborations enable us to (i) reduce the time-to-market for our
R&D initiatives; (ii) increase the industrial applicability of our products and services; and (iii) enable us to
tap onto the technical expertise of the relevant institutions and customers, thereby boosting our
competitiveness.
We intend to utilise S$3.0 million (or approximately RMB15.1 million) of our net proceeds from the
Invitation mainly for investing in additional R&D related equipments and premises, systems and materials
so as to strengthen our R&D capabilities and widen our range of innovative and cost-effective solutions.

We have a team of experienced and established sales and marketing personnel in the PRC. We believe
the quality of our sales and marketing personnel is one of our key success factors and we intend to
expand our sales and marketing capabilities and initiatives. We intend to take the following measures to
achieve this objective:-
(i) Increase the number of sales and marketing personnel in our Group to undertake increased sales
and marketing activities;
(ii) Widen our corporate customer base by sourcing for more customers to gain entry into or enhance
our presence in the targeted markets; and
(iii) Foster closer relationships and explore cooperation opportunities with existing customers, in
particular our major customers. In this regard, we had entered into a memorandum of
understanding with China XLX group to enhance mutual cooperation in respect of new
technologies and equipment used in the production of chemical fertilisers on 30 April 2010. Such
cooperation include (i) Hunan Anchun and China XLX group notifying each other at the first
instance in respect of any new development in technologies or equipment and requirements for
new technologies and equipment, as the case may be; (ii) giving priority to each other in the
procurement or supply of such technologies and equipment respectively. Nevertheless, such
memorandum is not legally-binding and terms of any future transactions between both parties shall
be negotiated on arm’s length basis and subject to the execution of formal sale and purchase
contracts. We may also enter into similar collaborations with other customers as and when the
opportunities arise.
We intend to utilise our working capital for the abovementioned purposes.
149
In order to improve our technological capabilities and expand our business, we intend to, subject to
commercial viability, enter into strategic investments or alliances and/or acquire businesses in related
fields, where opportunities arise. To date, we have not identified any specific investments, alliances or
acquisition opportunities. Should such opportunities arise, we will seek approvals, where necessary, from
our Shareholders and the relevant authorities as required by the prevailing rules and regulations.
150
DIRECTORS, KEY EXECUTIVES AND EMPLOYEES
DIRECTORS
Our Directors are entrusted with the responsibility for the overall management of our Group. The
particulars of our Directors are listed below:-
Country of
Principal Designation/Principal
Name Age Residential Address Residence occupation
Xie Ding Zhong 72 #2-304, Block 4, No.135, Yuejin Road, PRC Executive Chairman
䇶ᅮЁ Tianxin District, Changsha City, and CEO
Hunan Province, PRC
␪फⳕ䭓≭Ꮦ໽ᖗऎ䎗䖯䏃135
ো4ᷟ2䮼304᠓
Liang Gong Zeng 46 #1-301, Block 17, No.13, PRC Executive Director
ṕᙁ๲ West Xinjian Road, Changsha City, and COO
Hunan Province, PRC
䭓≭Ꮦ䲼㢅ऎᮄᓎ㽓䏃13ো17
ᷟ1䮼301᠓
Dai Feng Yu 44 #5-901, No.68, Nanhu Road, PRC Executive Director

᠈Є㚆 Yong Hong Jia Yuan, Changsha City,
Hunan Province, PRC
␪फⳕ䭓≭Ꮦफ␪䏃68ো∌ᅣ
Շು5ᷟ901ᅸ
Xie Ming 37 7406 Trail Hollow, Missouri City, United States Non-Executive
䇶ᯢ TX 77459, USA Director/senior
analytical chemist
Ma Ong Kee 45 10A Gemmill Lane, Singapore 069251 Singapore Non-Executive

Director/managing
director of OneEquity
SG Private Limited
Andrew Bek 43 #09-04, Blk 816, Lavender Garden, Singapore Alternate Director to
Jellicoe Road, Singapore 200816 Ma Ong Kee/
investment director of
OneEquity SG Private
Limited and executive
director of Metax
Engineering
Corporation Limited
Lee Gee Aik 52 78 Cashew Crescent Singapore Lead Independent

Singapore 679820 Director/Practicing
Public Accountant
Tan Min-Li 42 7 Oriole Crescent, Singapore Independent Director/

Singapore 288601 Practicing Lawyer
Pan De Run 66 #1-502&602, Block 23, Sheng PRC Independent Director/

┬ᖋ⍺ Gu Nan Li, Chaoyang District, Chairman of the
Beijing, PRC Consulting Committee
࣫ҀᏖᳱ䰇ऎ㚰সफ䞠23ὐ1 of China Petroleum
䮼502ো602ো and Chemical
Industries Federation
and Chairman of
China Nitrogen
Fertiliser Industry
Association
151
The business and working experience of our Directors is summarised below:-
Xie Ding Zhong

Xie Ding Zhong is our Executive Chairman and CEO. He was appointed to our Board on 2 November
2009 and is responsible for directing our Group’s strategic directions and growth. He has accumulated
more than 40 years of experience in the chemical industry. Between 1961 and 1974, Xie Ding Zhong was
a lecturer in the chemical engineering faculty of Hunan University. From 1975 to 1976, he was an
technician in Dongting Nitrogen Fertiliser Factory. Between 1976 and 1993, he was the chief engineer in
Fertiliser Industry Company of Hunan Province, where he took charge of the production, R&D and
system design of the small-sized nitrogen fertiliser manufacturers and provided solutions to technological
problems as well as promoted technical innovation in Hunan Province. Between 1993 and 1998, he was
the legal representative and general manager cum general engineer of Anchun Energy Saving in charge
of the overall operations and management. In 1998, when operations of Anchun Energy Saving ceased,
he set up Hunan Anchun with our founding management team and then employees to carry on the
business, and he has since then been the legal representative and general manager cum general
engineer responsible for directing the strategic directions and growth of Hunan Anchun.
Xie Ding Zhong graduated with a bachelor degree in chemical engineering from Hunan University in
1961. In November 1999, he was qualified as a registered senior engineer (research fellow), which is the
highest rank of engineers in the PRC. He is a committee member of various national specialist
committees in the chemical industry, such as China Nitrogen Fertiliser Industry Association and China
Petroleum and Chemical Engineering Survey and Design Association, etc. He has won numerous awards
at national, provincial and city levels in recognition of his achievement and contribution to the chemical
industry. The significant awards that Xie Ding Zhong had won include the National Scientific and
Technological Progress Award (2nd-highest honours) ೑ᆊ⾥ᄺᡔᴃ䖯ℹѠㄝ༪ by the National Science
and Technology Committee of PRC in 1995, and the 2003 National Scientific and Technological Progress
Award (2nd-highest honours) 2003ᑈᑺ೑ᆊ⾥ᄺᡔᴃ䖯ℹѠㄝ༪ by the State Council in 2004 , which is
regarded as one of the most prestigious awards in the PRC as affirmation of achievement and
contribution to scientific and technological progress. In addition, in recognition of his contributions towards
the development of engineering technology in the PRC, he has been entitled to a special subsidy granted
by the State Council since 1991.
Liang Gong Zeng

Liang Gong Zeng is our Executive Director and COO. He was appointed to our Board on 9 September
2010 and is responsible for our Group’s overall operations and management, with focus on the production
activities, procurement of direct materials, quality control and human resources. Liang Gong Zeng has
more than 20 years of experience in the chemical industry. Between 1988 and 1993, he worked in
Changsha Chemical Machinery Factory responsible for conducting quality inspection of pressure vessels
and equipment. In 1994, he joined Anchun Energy Saving as the deputy head of equipment
manufacturing department and oversaw the manufacture of chemical equipment and the technical
matters in the production process. In 1998, when operations of Anchun Energy Saving ceased and
Hunan Anchun was established, he was the head of chemical equipment manufacturing department
responsible for the production, technical matters in the production process and quality control till 2004.
Thereafter, he was promoted to deputy general manager in 2004 to take charge of the production, quality
control, procurement of direct materials and technical matters in the production process and promoted to
general manager in 2009 to be in charge of the overall operations and management of Hunan Anchun.
Liang Gong Zeng holds a bachelor degree in metal material and heat treatment from Huazhong
University of Science and Technology. He was qualified as a registered senior engineer in 2001. The
significant awards that Liang Gong Zeng has won include the 2003 National Scientific and Technological
Progress Award (2nd-highest honours) 2003ᑈᑺ೑ᆊ⾥ᄺᡔᴃ䖯ℹѠㄝ༪ by the State Council in 2004,
the Model Worker in the China Petroleum and Chemical Industry by the Ministry of Human Resources
and Social Security of the PRC and the China Petroleum and Chemical Industries Association in 2008
and the Hunan Province Technology Innovation Outstanding Individual ␪फⳕᡔᴃ߯ᮄ‫ܜ‬䖯ϾҎ by the
Economic Committee of Hunan Province in 2008.
152
Dai Feng Yu
Dai Feng Yu is our Executive Director. She was appointed to our Board on 9 September 2010 and is
responsible for overall R&D including provision of basic supporting technologies, initiating new R&D
projects and management of the company’s proprietary intellectual property rights. Dai Feng Yu has more
than 20 years of experience in the chemical industry. Between 1988 and 1993, she was a R&D staff in
Changsha Chromic Salts Factory responsible for catalysts quality improvement and new product
development. Between 1993 and 1998, she was head of the laboratory of Anchun Energy Saving and
was responsible for the research and development of catalysts as well as the introduction of catalysts to
the market. In 1998, when operations of Anchun Energy Saving ceased and Hunan Anchun was
established, she remained head of the laboratory of Hunan Anchun and was subsequently promoted to
deputy general manager to be in charge of the overall R&D matters and management of Hunan Anchun’s
proprietary intellectual property rights in 2002.
Dai Feng Yu holds a bachelor degree in industrial catalyst from East China University of Science and
Technology (formerly known as the East China Institute of Chemical Technology). She was qualified as a
registered senior engineer in 2001. The significant awards that Dai Feng Yu has won include the 2003
National Scientific and Technological Progress Award (2nd-highest honours) 2003ᑈᑺ೑ᆊ⾥ᄺᡔᴃ䖯
䖯ℹѠㄝ༪ by the State Council in 2004, the Excellent Engineering Consultancy Award (2nd-highest
honours) by the China Petroleum and Chemical Engineering Survey and Design Association in 2006 and
the Outstanding Individual of Hunan Province contributed to scientific and technological progress by the
Economic Committee of Hunan Province in 2008.
Xie Ming
Xie Ming is our Non-Executive Director. She was appointed to our Board on 2 November 2009. She is
currently a senior analytical chemist in the R&D department of Champion Technologies, Inc., a US
specialty chemical company offering customised solutions to oil & gas production problems. Between
1995 and 1998, she was a specialty chemical engineer in Guangzhou General Petrochemicals Factory of
China Petrochemical Corporation responsible for performance enhancement of functional aerosols.
Thereafter, she went to the United States to pursue her master degree in the University of Louisiana at
Monroe between 1999 and 2000. After graduation, she was engaged as a research associate in diabetes
research in the Health & Science Centre of Louisiana State University till 2002. Prior to joining Champion
Technologies, Inc., she worked as an analytical chemist in the research laboratory of INVISTA, an
integrated producer of polymers and fibres between 2003 and 2007.
Xie Ming holds a bachelor degree in fine chemical engineering from Jiangsu Institute of Petrochemical
and Chemical Engineering and a master degree in science from Department of Chemistry, University of
Louisiana at Monroe, USA.
Ma Ong Kee
Ma Ong Kee is our Non-Executive Director. He was appointed to our Board on 2 November 2009. Ma
Ong Kee has close to 20 years of experience in corporate and financial planning, risk management,
investment management and private equity investments. He is currently the managing director of
OneEquity SG Private Limited, a private equity and investment firm incorporated in Singapore which he
founded in 2006. Ma Ong Kee started his career as a treasury accountant in Great Western Bank,
Beverly Hills, California in 1988, where he oversaw co-merger group banking operations and involved in
the funding requirements, treasury management and risk management. Since 1989, he joined the family
business, together with other family members, and was in charge of the corporate and strategic planning
as well as planning the floatation exercise of the Ramatex group which was successfully listed on the
Main Board of the Bursa Malaysia Securities Berhad (formerly known as Kuala Lumpur Stock Exchange)
(the “Bursa”) in 1996. Between 1996 and 2006, he was the executive director of Ramatex Berhad, and
oversaw the treasury, corporate finance and business development functions of the Ramatex group of
companies. Ramatex Berhad was delisted from the Bursa in August 2007 through a privatisation exercise.
Ma Ong Kee holds a bachelor degree in Accounting from Southern Illinois University, the USA.
153
Andrew Bek
Andrew Bek is the alternate Director to Ma Ong Kee and was appointed to our Board on 2 August 2010.
He is currently an investment director of OneEquity SG Private Limited responsible for assessment of
investment opportunities, risk assessment, market research and analysis and making recommendations
to the investment committee, and an executive director of Metax Engineering Corporation Limited
responsible for corporate strategies and corporate finance. Prior to joining OneEquity SG Private Limited,
Andrew Bek was an assistant manager in Ernst & Young Malaysia, where he was responsible for
supervising the audit team members and attended to compliance and regulatory requirements of
companies from 1999 to 2007. Between 1997 and 1998, he was an account manager at Vest Hong
Enterprise Sdn. Bhd., a steel manufacturing company based in Malaysia, in charge of accounts, treasury
and finance department. Between 1988 and 1997, he was an audit senior with Arthur Andersen & Co
where he gained extensive experience in review and preparation of financial forecast and projections and
actively involved in initial public offering process.
Lee Gee Aik

Lee Gee Aik is our Lead Independent Director. He was appointed to our Board on 9 September 2010. He
is currently a partner of R Chan & Co, a member firm of the KS International network of accountants and
is an independent director of three Singapore-listed companies. Lee Gee Aik started his career as an
auditor in KPMG Singapore in 1979 and was subsequently seconded to KPMG USA Executive Office
from 1986 to 1988, specialising in professional development and research work in audit methodologies
and financial reporting. In 1988, he was promoted to senior audit manager in KPMG Singapore
responsible for the audit of a portfolio of clients. Thereafter, from 1993 to 1998, Lee Gee Aik was the
regional controller of Omni Marco Polo Hotel Singapore. In 1998, Lee Gee Aik founded G A Lee &
Associates, a certified public accounting firm, which was subsequently merged with R Chan & Co.
Lee Gee Aik was qualified as a Chartered Certified Accountant with The Association of Chartered
Certified Accountants, United Kingdom in 1984. He holds a master degree in Business Administration
from Henley Management College, United Kingdom. He is currently a Fellow with The Association of
Chartered Certified Accountants, United Kingdom and The Institute of Certified Public Accountants of
Singapore.
Tan Min-Li
Tan Min-Li is our Independent Director, and was appointed to our Board on 9 September 2010. She is
currently a partner at Colin Ng & Partners LLP, a firm of advocates and solicitors in Singapore, and has
over 15 years of experience in the legal profession. Tan Min-Li has considerable experience in the areas
of initial public offerings, regional investments, corporate restructuring, cross border joint ventures and
mergers and acquisitions in the region. She regularly advises on Singapore Exchange compliance and
corporate governance issues.
Tan Min-Li heads the Greater China Practice Group and Japan Focus Group and is co-head of the
Corporate Finance Practice Group at Colin Ng & Partners LLP. Her principal areas of practice are in
corporate and financial services with particular emphasis on corporate finance and mergers and
acquisitions in Singapore and the region. Prior to joining Colin Ng & Partners LLP in 2003, she was a
partner with KhattarWong, a firm of advocates and solicitors in Singapore, and had also held other
positions at other law firms since graduation. She graduated with a Bachelor of Laws (Honours) from the
National University of Singapore and a Master of Laws from University College London, University of
London, and was admitted as an Advocate and Solicitor of the Supreme Court of Singapore in 1992.
Pan De Run
Pan De Run is our Independent Director. He was appointed to our Board on 9 September 2010. He is
currently the Chairman of the Consulting Committee of China Petroleum and Chemical Industries
Federation Ё೑⷇⊍੠࣪ᄺᎹϮ㘨ড়Ӯ (“CPCIF”) (formerly known as China Petroleum and Chemical
Industries Association (“CPCIA”)) and Chairman of China Nitrogen Fertiliser Industry Association. Pan De
Run started his career as a technician responsible for maintenance of the calcium carbide furnace and
manufacture of auxiliary components of the calcium carbide furnace in Xia Hua Yuan Calcium Carbide
Factory, Zhangjiakou City, Hebei Province in 1968. Between 1978 and 1993, he was an officer in the
Chemical Industry Department of the Ministry of Chemical Industry of PRC (the “Ministry”) where he was
responsible for the production coordination of the key national chemical enterprises and overall
management of the production and development of the PRC chemical industry. Between 1993 and 1996,
154
he was an officer in the Planning Department of the Ministry where he was responsible for the
development strategies of the national chemical industry, research and formulation of national industrial
policies and guidance and investment in national chemical projects. In September 1996, he was promoted
to be the Deputy Head of General Office of the Ministry to take charge of the daily routine in the Ministry
until the Ministry was renamed to the State Bureau of Petroleum and Chemical Industries of the PRC (the
“Bureau”) in April 1998. Thereafter, he held the same position in the Bureau till April 2001, when the
Bureau was revoked and substituted for CPCIA. From May 2001 to May 2010, he was the Deputy
Chairman cum Secretary-General of CPCIA responsible for overall management of the association.
Pan De Run is a certified senior engineer and holds a bachelor degree in aerial automatic weapon from
Ha Er Bin Military Engineering College of the Chinese People’s Liberation Army.
Experience and Expertise of our Directors

All our Directors possess the relevant experience and expertise to act as Directors of our Company, as
evidenced by their business and working experience set out above. Our Lead Independent Director, Lee
Gee Aik has prior experience as director of public listed companies in Singapore, and is familiar with the
roles and responsibilities of a director of a public listed company in Singapore. Our Independent Director,
Tan Min-Li has extensive experience as an advocate and solicitor advising on Singapore listing
requirements. The other directors do not have prior experience as directors of public listed companies in
Singapore but have received training to familiarise themselves with the roles and responsibilities of a
director of a listed company on SGX-ST.
The list of present and past directorships of each Director over the last five years preceding the date of
this Prospectus, excluding those held in our Company, is set out below:-
Name Present Directorships Past Directorships
Xie Ding Zhong Group Companies Group Companies

Hunan Anchun Nil
Other Companies Other Companies

Nil Nil
Liang Gong Zeng Group Companies Group Companies

Hunan Anchun Nil

Giant Yield Global Nil
Dai Feng Yu Group Companies Group Companies

Hunan Anchun Nil

Dawn Vitality Nil
Xie Ming Group Companies Group Companies

Nil Nil

Ace Sense Nil
Ma Ong Kee Group Companies Group Companies

Nil Nil

Vision Top Snoopy Place Pte. Ltd.
Sinostate Management Beanstalk 1 Pte. Ltd.
Elitex Trading Pte. Ltd. Beanstalk Ventures Pte. Ltd.
Midas Fort Sdn Bhd Jazworks Industries Pte. Ltd.
Investcapital Limited Wm Capital Management Ltd.
Strategic Capital Holdings Limited Ramatex Berhad
Xi An Film Studio Pte. Ltd. Ramatex Textiles Industrial Sdn Bhd
OneEquity Sg Private Limited Acelevel Group Limited
155
Onecapital Asia Fund I Ltd. Jervic International Limited

Fortune Onecapital Pte. Ltd. Onesolar Limited
CleanPower Limited Gimmill Industrial (Pte.) Ltd.
OneCapital Sg Limited Ramatex (North Asia) Pte. Ltd.
OneMedia Limited Pure Essence Group Limited
China Dongyuan Environment Pte. Ltd. China Environment Fund
OneEnvironment Fund Capital Hub Sdn Bhd
Galaxier Pte. Ltd. Regal Honour Investments Limited
Xi’an Zhaoguang Estate Co Ltd.
Lewiston Pte. Ltd.
OneEquity Sg (Hk) Pte. Ltd.
OneEnvironment Technology Investment Limited
Andrew Bek Group Companies Group Companies

Nil Nil

Able Gallery Gates Engineering Pte. Ltd.
Prosper City International Limited Infinitron Asia Limited
China Environment Ltd.
Metax Engineering Corporation Limited
Galaxier Pte. Ltd.
One Asia Capital Pte. Ltd.
Lee Gee Aik(1) Group Companies Group Companies

Nil Nil

Westminster Travel Ltd. Econat Fiber Limited
Sinostar PEC Holdings Ltd. HealthBiz Resources Pte. Ltd.
Corporate and Business Services Pte. Ltd. China Wines Group Limited
Leader Environmental Technologies Limited CAPE plc
R Chan & Associates PAC
Tan Min-Li(1) Group Companies Group Companies

Nil Nil

Magic Kingdom Ventures Pte. Ltd. CNP Compliance Pte. Ltd.
Cloud 9 Concepts Pte. Ltd.
Pan De Run Group Companies Group Companies

Nil Nil

Nil Nil
Note:
(1) Companies in which Lee Gee Aik and Tan Min-Li were appointed as directors for the purpose of incorporation only and in the
course of their professional practice, or as nominee directors have not been included.
156
KEY EXECUTIVES
Our day-to-day operations are entrusted to our Executive Directors and our Key Executives. An
experienced and qualified team of Key Executives is responsible for the different functions of our Group.
The particulars of our Key Executives are set out below:-
Country of
Principal
Name Age Residential Address Residence Designation
Leow Wei Chang 34 462 Corporation Road #05-03 Singapore CFO

Singapore 649816
Li Chun Yang 60 No.351, Wuyi Road, Furong District, PRC Head of

ᴢ᯹䰇 Changsha City, Hunan Province, PRC Sales and
␪फⳕ䭓≭Ꮦ㡭㪝ऎѨϔ໻䘧351ো Marketing
Department
Li Bin 51 #17-1403, No.397, North PRC Head of

ᴢᕀ Xinyao Road, Shen Ao Mei Yu, System Design
Changsha City, Hunan Province, PRC Department
␪फⳕ䭓≭Ꮦᮄྮ࣫䏃397ো⬇༹㕢
㕢ඳ17ᷟ1403ো
The business and working experience of our Key Executives is set out below:-
Leow Wei Chang

Leow Wei Chang is our CFO and is responsible for the overall corporate finance, financial reporting,
compliance and internal control functions of our Group. Prior to joining our Group in December 2009, he
was the financial controller responsible for the financial planning, business development and investor
relations in Soya China Pte. Ltd., the holding company of a PRC food manufacturing group, between
October 2007 and November 2009. Between September 2000 and September 2007, he was in
PricewaterhouseCoopers from where he got promoted from associate to manager in the same period.
Leow Wei Chang holds a bachelor degree in accountancy and a minor in banking and finance from
Nanyang Technological University. He also holds a Diploma in Psychology from the American Institute of
Arts and Sciences. He was awarded the Chartered Financial Analyst designation from CFA Institute in
2005. He is a non-practising member of the Institute of Certified Public Accountants of Singapore.
Li Chun Yang
Li Chun Yang is our Head of Sales and Marketing Department responsible for our Group’s sales and
marketing and maintenance of customer relationships. Li Chun Yang has had almost 40 years of
experience in the chemical industry. Between 1970 and 1972, he worked in Hunan Hengnan County
Nitrogen Fertiliser Factory. Thereafter, he pursued his bachelor degree in Hunan University and graduated
in 1975. Thereafter, he was engineer and head of workshop of Hunan Hengnan County Nitrogen Fertiliser
Factory between 1975 and 1984 and later held the same position in Hunan Hengyang City Nitrogen
Fertiliser Factory between 1984 and 1987, where he was responsible for the overall production activities.
Between 1987 and 1993, he worked in Hunan Fertiliser Industry Company, a state-owned company which
was delegated to manage the provincial fertiliser industry and he was responsible for provision of
management advice and technical support to laggard fertiliser companies in Hunan Province. In 1993, he
was the deputy general manager of Anchun Energy Saving responsible for sales and marketing,
customer services and maintenance of customer relationships. In 1998, when operations of Anchun
Energy Saving ceased and Hunan Anchun was established, he joined Hunan Anchun and has since then
focused on the sales and marketing, maintenance of customer relationships and human resources of
Hunan Anchun.
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Li Chun Yang holds a bachelor degree in inorganic chemistry from Hunan University. He was qualified as
a registered senior engineer in 1994 and a certified chemical engineer in 2004. The significant awards
that Li Chun Yang has won include the National Scientific and Technological Progress Award (2nd-highest
honours) ೑ᆊ⾥ᄺᡔᴃ䖯ℹѠㄝ༪ by the National Science and Technology Committee of PRC in 1995
and 2003 National Scientific and Technological Progress Award (2nd-highest honours) 2003ᑈᑺ೑ᆊ⾥
⾥ᄺᡔᴃ䖯ℹѠㄝ༪ by the State Council in 2004, the Outstanding Individual contributing to Nitrogen
Fertiliser Industry in 1998 by the Ministry of Chemical Industry of the PRC, and the Scientific and
Technological Progress Award (2nd-highest honours) by China Petroleum and Chemical Industries
Association in 2002.
Li Bin
Li Bin is our Head of System Design Department responsible for our chemical systems engineering and
technology design services. Li Bin has had over 20 years of experience in the chemical industry. Between
1982 and 1994, he was head of the product design department of Changsha Chemical Machinery
Factory responsible for product design. Thereafter, he joined Anchun Energy Saving in 1994 as an
engineer responsible for product design. He has been in charge of our system design department since
the operations of Anchun Energy Saving ceased and Hunan Anchun was established in 1998.
Lin Bin holds a diploma in chemical machinery from Chemical Industry College of Hunan Province. He
was qualified as a registered senior engineer in 2003. The significant awards that Li Bin has won include
the Excellent Engineering Design of Hunan Province (2nd-highest honours) in 2001 by the Construction
Department of Hunan Province, the Excellent Engineering Design (2nd-highest honours) by China
Petroleum and Chemical Engineering Survey and Design Association in 2003 and the 2003 National
Scientific and Technological Progress Award (2nd-highest honours) 2003ᑈᑺ೑ᆊ⾥ᄺᡔᴃ䖯ℹѠㄝ༪
by the State Council in 2004.
The list of present and past directorships of each Key Executive over the last five years preceding the
date of this Prospectus, excluding those held in our Company, is set out below:-
Leow Wei Chang Group Companies Group Companies

Nil Nil

Nil Nil
Li Chun Yang Group Companies Group Companies

Hunan Anchun Nil

Oriental Eagle Nil
Li Bin Group Companies Group Companies

Hunan Anchun Nil

Inventive Result Enterprises Nil
Save that Xie Ding Zhong, our Executive Chairman and CEO, is the father of Xie Ming, our Non-
Executive Director, there is no family relationship between any of our Directors and/or Key Executives, or
between any of our Directors, Key Executives and Substantial Shareholders.
Save for Ma Ong Kee, who is nominated by the Pre-IPO Investors onto the Board, there is no
arrangement or understanding with any of our Substantial Shareholders, customers, suppliers or any
other person, pursuant to which any of our Directors or Key Executives was selected as our Director or
Key Executive.
Our Independent Directors, namely, Lee Gee Aik, Tan Min-Li and Pan De Run, do not have any existing
business relationships or financial dealings with, nor are they directly or indirectly, engaged or concerned
or interested in any capacity in any business, trade or occupation which has any existing business
relationship or financial dealing with, our Company or our Subsidiary.
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MANAGEMENT REPORTING STRUCTURE
Our management reporting structure is as follows:-
B o a rd o f D irecto rs
E xe cu tive
C h a irm a n and C E O
X ie D in g Z h on g
F in a nce a n d S a le s a n d COO R&D S yste m D esign

A ccou n tin g M a rke tin g L ia n g G o n g Z e n g D a i F e ng Y u L i B in
L e o w W ei C h an g Li Chun Yang
SERVICE AGREEMENTS
On 12 October 2010, our Company entered into separate service agreements (the “Service Agreements”)
with each of our Executive Directors, namely, Xie Ding Zhong, Liang Gong Zeng and Dai Feng Yu. Save
for Xie Ding Zhong, the employment of Liang Gong Zeng and Dai Feng Yu shall be for an initial term of
three (3) years commencing with effect from the date of our listing on the SGX-ST, subject to automatic
renewal for another three-year term on the same terms and conditions upon the expiry thereof.
In accordance with S153 of the Act, Xie Ding Zhong’s employment shall commence with effect from the
date of our listing on the SGX-ST up to the conclusion of our Company’s next annual general meeting,
and thereafter, his continued appointment as a director of our Company shall be subject to Shareholders'
approval by way of ordinary resolution at each annual general meeting of our Company.
During the term of employment, the parties to the Service Agreements may terminate the respective
service agreement by either party giving not less than three (3) months' notice in writing to the other. We
may also terminate the Service Agreements by notice upon the occurrence of certain events such as
serious misconduct, bankruptcy or criminal conviction.
Pursuant to the terms of the respective Service Agreements, each of Xie Ding Zhong, Liang Gong Zeng
and Dai Feng Yu will receive an annual salary of RMB900,000, RMB720,000 and RMB720,000,
respectively.
Apart from the above, Xie Ding Zhong, Liang Gong Zeng and Dai Feng Yu will each be entitled to receive
an annual incentive bonus (the “Incentive Bonus”), which will be based on a share of an annual
management incentive bonus pool to be calculated based on the formula in the following table. The
apportionment of each individual’s share of the aggregate incentive bonus pool will be determined and
approved by the Remuneration Committee on annual basis.
Annual management incentive bonus pool computation formula
PBT Incentive bonus pool
PBT < RMB100 million Nil
RMB100 million < PBT < RMB150 million 3% of PBT in excess of RMB100 million
RMB150 million < PBT < RMB200 million 3.5% of PBT in excess of RMB150 million
PBT > RMB200 million 4% of PBT in excess of RMB200 million
“PBT” for the purposes of computing the Incentive Bonus means the consolidated audited profit before
tax of our Group (before the Incentive Bonus and minority interests) for any FY.
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Had the Service Agreements been in existence for FY2009, the aggregate remuneration (including
contributions, bonus, and benefits-in-kind) paid to the Executive Directors would have been approximately
RMB2.3 million (approximately S$0.5 million) instead of approximately RMB1.1 million (approximately
S$0.23 million) and the profit after tax of our Group would have been approximately RMB73.9 million
(approximately S$15.7 million) instead of approximately RMB75.2 million (approximately S$16.0 million).
Save as disclosed above, there are no existing or proposed service contract entered or to be entered into
by our Directors with our Group. There is no existing or proposed service agreement entered into or to be
entered into by our Directors with our Group which provide for benefits upon termination of employment.
Our Group has also previously entered into various letters of employment with all our Key Executives.
Such letters typically provide for the salary and Incentive Bonus payable to our Key Executives, their
working hours, medical benefits, grounds of termination and certain restrictive covenants.
DIRECTORS’ AND KEY EXECUTIVES’ REMUNERATION

The compensation paid to our Directors and our Key Executives for FY2008 and FY2009, and the
estimated compensation to be paid to our Directors and our Key Executives for FY2010 (on an aggregate
basis and in remuneration bands(1)) are as follows:-
Estimated amount
FY2008 FY2009 for current FY2010(2)
Directors
Xie Ding Zhong Band A Band A Band A
Liang Gong Zeng Band A Band A Band A
Dai Feng Yu Band A Band A Band A
Xie Ming N.A N.A Band A
Ma Ong Kee N.A N.A Band A
Andrew Bek N.A N.A Band A
Lee Gee Aik N.A N.A Band A
Tan Min-Li N.A N.A Band A
Key Executives
Leow Wei Chang N.A Band A Band A
Li Chun Yang Band A Band A Band A
Li Bin Band A Band A Band A
Notes:-
(1) ‘A’ means between S$0 and S$250,000.
(2) For the purpose of this estimation, no account is made for the bonuses or profit sharing that our Executive Directors are
entitled under their respective service agreements, the details of which are set out under the section entitled “Service
Agreements” of this Prospectus.
EMPLOYEES
As at 31 March 2010, our Group has 424 permanent employees. Save for our CFO, Leow Wei Chang,
who is based in Singapore, all of our Group’s employees were based in the PRC for each of FY2007,
FY2008, FY2009 and 1Q2010.
Our employees are organised under a trade union formed to protect the legal interests of the employees.
The relationship and co-operation between our management and the trade union have always been good
and this is expected to continue in the future. There has not been any incidence of work stoppages or
labour disputes which affected our operations. We do not experience any significant seasonal fluctuations
in the number of employees.
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The number of our Group’s permanent employees for FY2007, FY2008, FY2009 and 1Q2010 are as
follows:-
FY2007 FY2008 FY2009 1Q2010
General and administration (inclusive of our

Executive Directors) 81 72 79 86
Sales and marketing 13 15 16 19
Design and production (including R&D,

system design, procurement and quality control) 198 288 311 319
Total 292 375 406 424
The number of permanent employees is not subject to any significant seasonal fluctuations. The
increasing trend of our number of employees is in line with our business expansion during the periods
under review.
Save as required under the statutory requirements of the PRC laws and regulations, we have not set
aside or accrued any amount of money to provide for pension, retirement or similar benefits.
CORPORATE GOVERNANCE
Corporate governance refers to the processes and structure by which the business and affairs of a
company are directed and managed, in order to enhance long-term shareholder value through enhancing
corporate performance and accountability. Good corporate governance therefore embodies both
enterprise (performance) and accountability (conformance).
Recognising the importance of corporate governance and the importance of offering high standards of
accountability to our Shareholders, our Company has implemented the corporate governance model as
set out below:-
Board of Directors
Remuneration Nominating
Audit Committee
Committee Committee
Chairman Chairman Chairman
Lee Gee Aik Tan Min-Li Pan De Run
Members Members Members

Tan Min-Li Pan De Run Ma Ong Kee
Pan De Run Xie Ming Tan Min-Li
Board Of Directors
Our Articles of Association provide that our Board will consist of not less than 2 Directors.
We currently have 8 Directors on our Board, comprising 3 Executive Directors, 2 Non-executive Director
and 3 Independent Directors.
None of our Directors are appointed for any fixed terms. Each Director, save for Xie Ding Zhong(1) shall
retire from office at least once every three years. Directors who retire are eligible to stand for re-election.
Note:
(1) In accordance with S153 of the Act, Xie Ding Zhong’s appointment will only be effective until the conclusion of the next
annual general meeting of our Company as he is 72 years old. Thereafter, he may only be re-appointed as a director by an
ordinary resolution passed at an annual general meeting of our Company.
161
Audit Committee
Our business and operations are presently under the management and close supervision of our
Executive Directors who are assisted by our Key Executives.
After our listing on the SGX-ST, our Executive Directors and Key Executives will manage the business
and operations of our Group. Our Audit Committee will assist our Board of Directors with regards to
discharging its responsibility to safeguard our Company’s assets, maintain adequate accounting records,
and develop and maintain effective systems of internal controls with an overall objective to ensure that
our management has created and maintained an effective control environment in our Company, and that
our management demonstrates and stimulates the necessary aspect of our Group’s internal control
structure among all parties.
Our Audit Committee comprises our Independent Directors, Lee Gee Aik, Tan Min-Li and Pan De Run.
Our Audit Committee will be chaired by Lee Gee Aik.
Our Audit Committee will meet quarterly to discuss and review the following where applicable:-
(a) to review with both the internal and external auditors the audit plan, scope of work, their evaluation
of the system of internal accounting controls, their management letter and our management’s
response, and results of our audits conducted by both of our auditors;
(b) to review the half-yearly and annual, and quarterly, if applicable, financial statements and results
announcements before submission to our Board 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 financial reporting standards as well as compliance
with the Listing Manual and any other statutory/regulatory requirements;
(c) to review the effectiveness and adequacies of our internal control and procedures, including
accounting and financial controls and procedures and ensure co-ordination between both of our
auditors and our management, reviewing the assistance given by our management to the auditors,
and discuss problems and concern, if any, arising from the interim and final audits, and any matters
which the auditors may wish to discuss (in the absence of our management where necessary);
(d) to 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 our Group’s operating results or financial position, and our management’s response;
(e) consider the appointment or re-appointment of both of the auditors and matters relating to the
resignation or dismissal of the auditors;
(f) to review significant financial reporting issues and judgments with the CFO and the external
auditors so as to ensure the integrity of the financial statements of our Company and any formal
announcements relating to our Group’s financial performance before their submission to our Board
of Directors;
(g) to review the adequacy and effectiveness of our Company’s material internal controls with the CFO
and the auditors, including financial, operational and compliance controls and risk management via
reviews carried out by the internal auditors;
(h) to review and approve transactions falling within the scope of Chapter 9 and Chapter 10 of the
Listing Manual (if any);
(i) to review any potential conflicts of interest;
(j) to review the adequacy of potential business risk management processes;
(k) to review and approve all hedging policies and instruments (if any) to be implemented by our
Group;
162
(l) to undertake such other reviews and projects as may be requested by our Board and report to our
Board its findings from time to time on matters arising and requiring the attention of our Audit
Committee;
(m) to review and establish procedures for receipt, retention and treatment of complaints received by
our Group, inter alia, criminal offences involving our Group or its employees, questionable
accounting, auditing, business, safety or other matters that impact negatively on our Group; and
(n) generally to undertake such other functions and duties ad may be required by statue or the Listing
Manual, and by such amendments made thereto from time to time.
Upon the admission of our Company to the Official List of the SGX-ST, our Audit Committee will appoint a
suitable firm of independent Singapore Certified Practicing accountants for the purpose of internal audit
to review and assess the system of internal controls of our Group on an annual basis (the “Internal
Auditor”). Such appointment of the Internal Auditor will continue for as long as our Audit Committee
deems necessary.
In addition, our Audit Committee will review all transactions entered into between our Group and China
XLX group on a quarterly basis to ensure that all the transactions with China XLX group are carried out
on normal commercial terms and are not prejudicial to the interests of our Shareholders. Such review
procedures will continue to be in place as long as the aggregate interest of China XLX and Go Power in
the share capital of our Company exceeds 5%. Please refer to the sections entitled “Our Major
Customers” and “Potential Conflict of Interests” of the Prospectus for more information. Going forward, in
the event that China XLX is deemed as an Interested Person of the Group, all transactions with China
XLX group thereafter shall be subject to the then prevailing rules and regulations of the SGX-ST, in
particular Chapter 9 of the Listing Manual.
Apart from the above functions, our Audit Committee will also commission and review the findings of
internal investigations into matters where there is any suspected fraud or irregularity, or failure of internal
controls, or infringement of any law, rule or regulation which has or is likely to have a material impact on
our Company’s operating results or financial position. Each member of our Audit Committee will abstain
from voting in respect of matters in which he is interested.
In addition, all future transactions with related parties shall comply with the requirements of the Listing
Manual. Our Directors shall also abstain from voting in any contract or arrangement or proposed
contract/arrangement in which he has a personal material interest.
Suitability of our CFO

Our Audit Committee has considered the qualifications and past working experience of Leow Wei Chang
(as described in the section entitled “Directors, Key Executives and Employees” of this Prospectus), as
the basis for the view that Leow Wei Chang is suitable to be our CFO. In addition, Leow Wei Chang has
almost ten years of experience in finance and accounting, including seven years of audit experience with
PricewaterhouseCoopers Singapore and two years of experience as a financial controller of a PRC food
manufacturing group. Leow Wei Chang has been with our Group for over six months since December
2009 and is thus familiar with our Group’s business and our finance and accounting functions. Based on
the interactions that our Audit Committee has had with Leow Wei Chang in his capacity as our CFO
during the course of our preparation for this Invitation and the views of and feedback from our Executive
Directors, our Audit Committee has not been made aware of any matter that would question Leow Wei
Chang’s suitability for the position of CFO.
163
Remuneration Committee
Our Remuneration Committee comprises our Independent Directors, Tan Min-Li and Pan De Run, and our
Non-Executive Director, Xie Ming. Our Remuneration Committee is chaired by Tan Min-Li.
Our Remuneration Committee is responsible for the following:-
(a) to recommend to our Board a framework of remuneration for Directors and Key Executives, and to
determine specific remuneration packages for each Executive Director and the CEO (or executive
of equivalent rank), if the CEO is not an Executive Director, such recommendations to submitted for
endorsement by our entire Board and should cover all aspects of remuneration, including but not
limited to director’s fees, salaries, allowances, bonuses, options, benefits in kind;
(b) in the case of service contracts, to consider what compensation commitments the Directors’ or Key
Executives’ contracts of service, if any, would entail in the event of early termination with a view to
be fair and avoid rewarding poor performance;
(c) to perform an annual review of the remuneration of employees related to our Directors and
Substantial Shareholders (if any) to ensure that their remuneration packages are in line with our
staff remuneration guidelines and commensurate with their respective job scopes and level of
responsibilities. The Remuneration Committee will also review and approve any bonuses, pay
increases and/or promotions for these employees; and
(d) in respect of long-term incentive schemes including share schemes as may be proposed from time
to time, to consider whether directors should be eligible for benefits under such long-term incentive
schemes and/or share schemes.
Each member of the Remuneration Committee shall abstain from voting on any resolution in respect of
his remuneration package.
Nominating Committee
Our Nominating Committee comprises our Independent Directors, Pan De Run and Tan Min-Li, and our
Non-executive Director, Ma Ong Kee. Our Nominating Committee is chaired by Pan De Run.
The Nominating Committee is responsible for the following:-
(a) to make recommendations to the Board on all board appointments, including re-nominations,
having regard, to the director’s contribution and performance (for example, attendance,
preparedness, participation and candour) including, if applicable, as an independent director;
All directors should be required to submit themselves for re-nomination and re-election at regular
intervals and at least every three years;
(b) to determine annually whether or not a director is independent;
(c) in respect of a director who has multiple board representations on various companies, to decide
whether or not such director is able to and has been adequately carrying out his/her duties as
director, having regard to the competing time commitments that are faced when serving on multiple
boards; and
(d) to decide how the Board’s performance may be evaluated and propose objective performance
criteria, as approved by the Board that allows comparison with its industry peers, and address how
the Board has enhanced long term shareholders’ value.
Each member of the Nominating Committee shall abstain from voting on any resolution relating to his re-
nomination as Director.
164
PRINCIPAL SHAREHOLDERS
SHAREHOLDING AND OWNERSHIP STRUCTURE

Our shareholders and their respective shareholdings as at the Latest Practicable Date and after the
Invitation are summarised below:-
Before the Invitation After the Invitation

Direct Interest Deemed Interest Direct Interest Deemed Interest
No. of No. of No. of No. of
Shares % Shares % Shares % Shares %
Directors
Xie Ding Zhong – – – – – – – –
Liang Gong Zeng(1) – – 45,600,000 11.40 – – 45,600,000 9.03
Dai Feng Yu(2) – – 41,200,000 10.30 – – 41,200,000 8.16
Xie Ming(3) – – 108,000,000 27.00 – – 108,000,000 21.39
Ma Ong Kee(6) – – 37,104,000 9.28 – – 32,554,000 6.45
Andrew Bek (9)
– – 16,000,000 4.00 – – 16,000,000 3.17
Pan De Run – – – – – – – –
Lee Gee Aik – – – – – – – –
Tan Min–Li – – – – – – – –
Substantial Shareholders
(other than Directors)
Giant Yield Global(1) 45,600,000 11.40 – – 45,600,000 9.03 – –
Dawn Vitality (2)
41,200,000 10.30 – – 41,200,000 8.16 – –
Ace Sense(3) 108,000,000 27.00 – – 108,000,000 21.39 – –
Oriental Eagle (4)
52,000,000 13.00 – – 52,000,000 10.30 – –
Inventive Result
Enterprises(5) 41,200,000 10.30 – – 41,200,000 8.16 – –
Sinostate Management(6) 24,000,000 6.00 – – 24,000,000 4.75 – –
Go Power(7) 16,400,000 4.10 19,600,000 4.90 3,900,000 0.77 19,600,000 3.88
Other Shareholders
Vision Top(6) 13,104,000 3.28 – – 8,554,000 1.69 – –
China XLX (8) 19,600,000 4.90 – – 19,600,000 3.88 – –
Able Gallery(9) 16,000,000 4.00 – – 16,000,000 3.17 – –
SkyVen (10)
12,960,000 3.24 – – 8,460,000 1.68 – –
Naresh Nanubhai Desai(11) 7,776,000 1.94 – – 5,076,000 1.00 – –
Wong Chao Hsiung (11)
1,080,000 0.27 – – 705,000 0.14 – –
Quek Yiang Hang(11) 1,080,000 0.27 – – 705,000 0.14 – –
Public – – – – 130,000,000 25.74 – –
TOTAL 400,000,000 100 505,000,000 100
Notes:-
1. Giant Yield Global is an investment holding company incorporated in the British Virgin Islands. Liang Gong Zeng, who is our
Executive Director and COO, owns 25.41%, with the remaining 74.59% held on trust by him for the 103 beneficiaries under
the Trust Agreements. Please refer to the section entitled “Trust Agreements” of this Prospectus for details.
2. Dawn Vitality is an investment holding company incorporated in the British Virgin Islands. Our Executive Director, Dai Feng Yu,
owns 25.24%, with the remaining 74.76% held on trust by her for the 143 beneficiaries under the Trust Agreements. Please
refer to the section entitled “Trust Agreements” of this Prospectus for details.
3. Ace Sense is an investment holding company incorporated in the British Virgin Islands. Our Non-Executive Director, Xie Ming,
who is the daughter of our Executive Chairman and CEO, Xie Ding Zhong, is deemed interested in the 108,000,000 Shares
by virtue of her 100% shareholding interest held in Ace Sense.
165
4. Oriental Eagle is an investment holding company incorporated in the British Virgin Islands. Our Head of Sales and Marketing
Department, Li Chun Yang, owns 31.57%, with the remaining 68.43% held on trust by him for the 11 beneficiaries under the
5. Inventive Result Enterprises is an investment holding company incorporated in the British Virgin Islands. Our Head of System
Design Department, Li Bin, owns 24.90%, with the remaining 75.10% held on trust by him for the 140 beneficiaries under the
6. Sinostate Management and Vision Top are investment holding companies incorporated in the British Virgin Islands. Sinostate
Management and Vision Top are wholly owned by Ma Ong Kee, who is our Non-Executive Director.
7. Go Power is an investment company incorporated in the British Virgin Islands. It is a substantial shareholder of China XLX,
which owns approximately 28.1% of the shareholding interest in China XLX, a Singapore and Hong Kong-listed company. Yan
Yun Hua, a PRC natural person, owns 100% of the shareholding interest in Go Power, of which approximately 12.7% is held
for her own beneficial interest and approximately 87.3% is held by her on trust for 1,463 beneficiaries, comprising of PRC
natural persons or entities, being current and past employees/business associates of China XLX and their related persons.
Go Power is deemed interested in the 4.9% shareholding interest held by China XLX in our Company. Go Power and its PRC
shareholders are not related to the Directors, Key Executives and Controlling Shareholders of our Company.
8. China XLX is a company dual-listed on both SGX-ST and Hong Kong Stock Exchange, which is not related to the Directors,
Key Executives and Controlling Shareholders of our Company.
9. Able Gallery is an investment holding company incorporated in the British Virgin Islands. Able Gallery is wholly owned by
Andrew Bek, who is the alternate Director to our Non-Executive Director, Ma Ong Kee.
10. SkyVen is a company incorporated in Singapore. It is a private equity investment fund, established and managed in
Singapore. Its shareholders comprise mainly institutional investors and high net worth individuals. The investment manager is
SkyVen Asset Management Pte Ltd. The shareholders of SkyVen and SkyVen Asset Management Pte Ltd (which is owned by
Peter Tan Boon Huan and Chew Ghim Bok) are not related to any of our Directors, Key Executives or Controlling
Shareholders.
11. Naresh Nanubhai Desai, Wong Chao Hsiung and Quek Yiang Hang are individual investors who are not related to the
Directors, Key Executives and Controlling Shareholders of our Company.
The Shares of all our Directors and Substantial Shareholders were acquired in connection with the
Restructuring Exercise.
Save as disclosed in the section entitled “Restructuring Exercise” of this Prospectus, there has been no
change in the percentage ownership of Shares by our Directors and Substantial Shareholders in the past
three years prior to the Latest Practicable Date. There is no known arrangement, the operation of which
may, at a subsequent date, result in a change in the control of our Company.
The Shares held by our Directors, Substantial Shareholders and other Shareholders do not carry voting
rights that are different from the Invitation Shares.
As at the Latest Practicable Date, our Company has only one class of shares, being our Shares which
are in registered form. There is no restriction on the transfer of fully paid ordinary shares in scripless form
except where required by law or the listing rules of the SGX-ST.
Save as disclosed above, our Company is not directly or indirectly owned or controlled, whether severally
or jointly by any person or government.
TRUST AGREEMENTS
(a) The Trust Agreements
Pursuant to the Trust Agreements dated 2 November 2009, Li Chun Yang owns 31.57% share
interest of Oriental Eagle and holds the remaining 68.43% share interest on trust for 11
beneficiaries; Dai Feng Yu owns 25.24% share interest of Dawn Vitality and holds the remaining
74.76% share interest on trust for 143 beneficiaries; Liang Gong Zeng owns 25.41% share interest
of Giant Yield Global and holds the remaining 74.59% share interest on trust for 103 beneficiaries;
and Li Bin owns 24.90% share interest of Inventive Result Enterprises and holds the remaining
75.10% share interest on trust for 140 beneficiaries (collectively, the “Shareholder Beneficiaries”
and individually, a “Shareholder Beneficiary”). The Trust Agreements will be valid for a period of ten
years upon the date of signing.
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(b) Rationale of the Trust Agreements
Prior to the Acquisition, the management of Hunan Anchun had allowed the employees and the
related persons of these employees to partake in the equity of Hunan Anchun. To simplify the
corporate structure of Hunan Anchun, the equity interests of Hunan Anchun were registered under
the name of Xie Ding Zhong (our Executive Chairman and CEO), Li Chun Yang (our Key
Executive), Jiang Jing Fu (an ex-employee of Hunan Anchun) and Yan Chao Jian (an ex-employee
of Hunan Anchun), who held the beneficiary interests on trust for 398 employees and their related
persons. The level of participation in terms of Hunan Anchun’s shareholding proportion of the
employees and their related persons were based on their contribution to the paid-up share capital
of Hunan Anchun. Therefore, the 398(1) employees and their related persons were also the ultimate
shareholders of Hunan Anchun (the “Hunan Anchun Trust Arrangement”).
Subsequently, to facilitate the Restructuring Exercise and continue to reflect the beneficial interests
of the 397(1) employees and their related persons in Hunan Anchun, Oriental Eagle, Dawn Vitality,
Inventive Result Enterprises and Giant Yield Global were incorporated and the Trust Agreements
were executed to simplify the corporate structure of our Shareholders and facilitate our Group to
manage the day-to-day operations and decide on strategic directions. Save that Xie Ding Zhong
who does not hold any shareholding interest in our Company, and Jiang Jing Fu and Yan Chao
Jian had ceased to be the trustees due to their retirement from our Group, no change was made to
the above-mentioned trust arrangements after the Restructuring Exercise.
Note:-
(1) Prior to the Restructuring Exercise, Xie Ding Zhong, Li Chun Yang, Jiang Jing Fu and Yan Chao Jian were the
trustees, and Dai Feng Yu, Liang Gong Zeng and Li Bin were 3 of the 398 Shareholder Beneficiaries. After the
Restructuring Exercise, Dai Feng Yu, Liang Gong Zeng and Li Bin replaced Xie Ding Zhong, Yan Chao Jian and Jiang
Jing Fu to be the trustees and Jiang Jing Fu and Yan Chao Jian became 2 of the 397 Shareholder Beneficiaries.
(c) Key terms of the Trust Agreements

Under the Trust Agreements, the Shareholder Beneficiaries are entitled to the following rights:-
(i) information in relation to the management of his/her beneficial interest;
(ii) any dividends declared in proportion to his/her beneficial interest; and
(iii) make his/her own divestment decision in relation to his/her beneficial interest.
The Shareholder Beneficiaries’ entitlements under the Trust Agreements are not conditional on
their continued employment with our Group. Each of the Shareholder Beneficiaries may make
his/her own divestment decision in relation to his/her interest. Subject to the right of first refusal of
other Shareholder Beneficiaries, a Shareholder Beneficiary is allowed to dispose his/her shares in
the relevant BVI company to a third party on the terms and conditions that are not more favourable
than those offered to the remaining Shareholder Beneficiaries in that relevant BVI company.
The Shareholder Beneficiaries have irrevocably authorised Li Chun Yang (in respect of Oriental
Eagle), Dai Feng Yu (in respect of Dawn Vitality), Liang Gong Zeng (in respect of Giant Yield
Global) and Li Bin (in respect of Inventive Result Enterprises) respectively as sole director of the
relevant BVI company to exercise the following rights:-
(i) voting rights and general management decisions of the relevant BVI company;
(ii) to dispose of or transfer or enter into agreement to dispose of or transfer, upon the
Shareholder Beneficiaries’ instructions, his/her beneficial interest in the relevant BVI
company; and
(iii) to give the moratorium undertakings on behalf of the Shareholder Beneficiaries in relation to
his/her beneficial interest in the relevant entity upon the listing of our Company.
167
(d) Voting arrangements of the Shareholder Beneficiaries within the relevant BVI companies and
between Oriental Eagle, Dawn Vitality, Giant Yield Global and Inventive Result Enterprises
As aforementioned, the Shareholder Beneficiaries have irrevocably authorised Li Chun Yang, Dai
Feng Yu, Liang Gong Zeng and Li Bin to exercise voting rights and general management decisions
of the relevant BVI companies at their discretion and on behalf of the Shareholder Beneficiaries.
Accordingly, these Shareholder Beneficiaries cannot exercise split votes.
There is no existing voting arrangement between Li Chun Yang, Dai Feng Yu, Liang Gong Zeng and
Li Bin regarding their voting rights in our Company held through the relevant BVI companies and it
is not compulsory for any of them to vote in the same way as each other.
(e) Administration of the Trust Agreements

Our Group maintains a constant record of the Trust Agreements, including the identity,
shareholding proportion of the beneficiaries and all divestments or new issuance of shares in
Oriental Eagle, Dawn Vitality, Inventive Result Enterprises and Giant Yield Global. In the event that
our Company declares dividends, the amount of dividends received by the relevant BVI companies
will be in proportion to their respective interest in the share capital of the Company and the amount
of dividends received by the relevant Shareholder Beneficiaries will be in proportion to their
beneficial interest in the relevant BVI companies. The distribution of dividends received by the
relevant BVI companies to the Shareholder Beneficiaries will be administered by their respective
trustees.
(f) Legality of the Trust Agreements

Our PRC counsel, Haihua Yongtai has confirmed that based on applicable PRC laws, the Trust
Agreements are legal and valid.
VENDORS
The name of the Vendors and the number of Vendor Shares which they will offer pursuant to the Invitation
are set out below:-
No. of No. of
Vendor Vendor No. of
No. of Shares as a Shares as a No. of Shares as a
Shares % of pre- % of post- Shares % of post-
held No. of Invitation Invitation held Invitation
before the Vendor share share after the share
Name Invitation Shares capital capital Invitation capital
Go Power Investments
Limited 16,400,000 12,500,000 3.13 2.48 3,900,000 0.77
Vision Top Holdings

Limited 13,104,000 4,550,000 1.14 0.90 8,554,000 1.69
Skyven Growth
Opportunities Fund Pte. Ltd. 12,960,000 4,500,000 1.13 0.89 8,460,000 1.68
Naresh Nanubhai Desai 7,776,000 2,700,000 0.68 0.53 5,076,000 1.00
Wong Chao Hsiung 1,080,000 375,000 0.09 0.07 705,000 0.14
Quek Yiang Hang 1,080,000 375,000 0.09 0.07 705,000 0.14
Total 52,400,000 25,000,000 6.26 4.94 27,400,000 5.42
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MORATORIUM
To demonstrate their commitment to our Company:-
Ace Sense, which will hold 108,000,000 Shares, representing approximately 21.4% of our Company’s
post-invitation share capital, has undertaken not to dispose of, transfer, or realise any part of its interest in
our Company for a period of 12 months from our Company’s date of admission to the Official List of the
SGX-ST. In addition, Xie Ming, being the sole director and shareholder of Ace Sense, has undertaken not
to dispose of, transfer, or realise any part of her interests in Ace Sense for a period of 12 months from
our Company’s date of admission to the Official List of the SGX-ST.
Each of Oriental Eagle, Dawn Vitality, Inventive Result Enterprises and Giant Yield Global, which will hold
52,000,000 Shares, 41,200,000 Shares, 41,200,000 Shares and 45,600,000 Shares, representing
approximately 10.3%, 8.2%, 8.2% and 9.0% of our Company’s post-invitation share capital, has
undertaken not to dispose of, transfer, or realise any part of its interest in our Company for a period of 6
months from our Company’s date of admission to the Official List of the SGX-ST.
In addition, each of Li Chun Yang, Dai Feng Yu, Li Bin, Liang Gong Zeng, (i) has undertaken not to
dispose of, transfer, or realise any part of his/her interests in Oriental Eagle, Dawn Vitality, Inventive
Result Enterprises and Giant Yield Global respectively for a period of 6 months from our Company’s date
of admission to the Official List of the SGX-ST, and (ii) has been authorised by the 397 Shareholder
Beneficiaries under the Trust Agreement to comply with such applicable moratorium requirements in
respect of our Company’s admission to the Official List of the SGX-ST.
Each of Sinostate Management, Vision Top, China XLX, Able Gallery, Go Power, SkyVen, Naresh
Nanubhai Desai, Wong Chao Hsiung and Quek Yiang Hang, has undertaken not to dispose of, transfer,
or realise any part of its interest in our Company for a period of 6 months from our Company’s date of
admission to the Official List of the SGX-ST.
Ma Ong Kee has undertaken not to dispose of, transfer, or realise any part of his interest in Sinostate
Management and Vision Top for a period of 6 months from our Company’s date of admission to the
Official List of the SGX-ST.
Andrew Bek has undertaken not to dispose of, transfer, or realise any part of his interest in Able Gallery
for a period of 6 months from our Company’s date of admission to the Official List of the SGX-ST.
Yan Yun Hua has undertaken not to dispose of, transfer, or realise any part of her interest in Go Power for
a period of 6 months from our Company’s date of admission to the Official List of the SGX-ST.
SkyVen is a private equity investment fund managed by Skyven Asset Management Pte. Ltd.. Skyven
Asset Management Pte. Ltd. has undertaken not to dispose of, transfer, or realise any part of the Shares
held by SkyVen for a period of 6 months from our Company’s date of admission to the Official List of the
SGX-ST.
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INTERESTED PERSON TRANSACTIONS
In general, transactions between our Group and any of our Interested Persons (namely, our Directors
(including our CEO), Controlling Shareholders of our Company or the Associates of such Directors
(including our CEO) or Controlling Shareholders) are Interested Person Transactions.
This section sets out the Interested Person Transactions entered into by our Group for FY2007, FY2008,
FY2009, 1Q2010 and for the period commencing from 1 April 2010 to the Latest Practicable Date on the
basis of each member of our Group (namely, our Company and our Subsidiary) being an Entity At Risk
and with Interested Persons being construed accordingly.
Save as disclosed in this section and under the section entitled “Restructuring Exercise” of this
Prospectus, there has been no Interested Person Transaction in FY2007, FY2008, FY2009, 1Q2010 and
for the period commencing from 1 April 2010 to the Latest Practicable Date involving our Group which are
material in the context of this Invitation.
Interested Persons Relationship
Xie Ding Zhong : Our Executive Chairman and CEO
Liang Gong Zeng : Our Executive Director and COO
Dai Feng Yu : Our Executive Director
Vision Top : Vision Top is an investment holding company

incorporated in the British Virgin Islands, which is
wholly-owned by our Non-Executive Director, Ma Ong
Kee.
OneEquity SG Private Limited (“OneEquity”) : OneEquity is a company incorporated in Singapore

engaged in investment business and provision of
business management and consultancy services.
OneEquity is wholly-owned by our Non-Executive
Director, Ma Ong Kee.
PAST INTERESTED PERSON TRANSACTIONS

(1) Directors’ loan to Hunan Anchun
From 2005 to 2009, in order to raise sufficient working capital for enlarging business and increasing
sales orders, the then shareholders and employees of Hunan Anchun, including our Executive
Directors, namely, Xie Ding Zhong, Liang Gong Zeng and Dai Feng Yu, had extended some loans
to Hunan Anchun at an annual interest rate of 6-8%, taking into account, inter alia, the then
prevailing interest rates published by the People’s Bank of China.
Details of the amounts granted by our Executive Directors in the last three financial years and up to
the Latest Practicable Date are as follows:-
Largest
amount
outstanding
up to the As at the
As at 31 As at 31 As at 31 As at 31 Latest Latest
December December December March Practicable Practicable
RMB’000 2007 2008 2009 2010 Date Date
Xie Ding Zhong 628 1,214 – – 1,214 –

Liang Gong Zeng 52 52 – – 52 –
Dai Feng Yu 15 15 – – 15 –
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The loans from the then shareholders and employees of Hunan Anchun were fully settled in
October 2009. Please refer to the Audited Combined Financial Statements for details. They were
unsecured and had no fixed term of repayment. The above transactions were carried out on an
arm’s length basis. Our Group does not expect to enter into any future transaction of the above
nature.
(2) Amounts due to Vision Top and OneEquity

In the last three financial years and up to the Latest Practicable Date, there were amounts due to
Vision Top and OneEquity from our Group, details of which are as follows:-
Largest
amount
outstanding
up to the As at the
As at 31 As at 31 As at 31 As at 31 Latest Latest
December December December March Practicable Practicable
RMB’000 2007 2008 2009 2010 Date Date
Vision Top – – 798 2,011 2,011 –

OneEquity – – 102 – 102 –
The above amounts arose from advances by Vision Top and OneEquity to our Company in relation
to professional expenses incurred for our Group’s listing. The above amounts were unsecured,
interest-free and had no fixed term of repayment. These amounts have been fully settled by the
Latest Practicable Date. As no interests were paid for these amounts, the transactions were not
carried out on an arm’s length basis. Our Group does not expect to enter into any future
transaction of the above nature.
ON-GOING INTERESTED PERSON TRANSACTIONS

(1) Loan agreements between Hunan Anchun and Xie Ding Zhong, Li Chun Yang, Jiang Jing Fu and
Yan Chao Jian
Xie Ding Zhong, Li Chun Yang, Jiang Jing Fu and Yan Chao Jian were the past shareholders of
Hunan Anchun (the “Past Shareholders”) prior to the Restructuring Exercise. Pursuant to the loan
agreements dated 22 December 2009, 5 January 2010 and 9 June 2010, in order to support
Hunan Anchun’s future development, the Past Shareholders loaned the consideration paid for the
Acquisition of Hunan Anchun, amounting to an aggregate of approximately RMB73.4 million (as
adjusted for foreign exchange translation), to Hunan Anchun to supplement the working capital of
the Group. It was agreed that:-
(a) the tenure will be for a year from the date of disbursement of the loans, renewable on a
yearly basis up to five years by Hunan Anchun;
(b) such loans will be interest-free and unsecured during the first year; and
(c) In the event that the loans due are extended beyond the first year, interest will be charged
based on the annual prevailing benchmark lending rates of the People’s Bank of China.
The above transactions are not carried out on an arm’s length basis for the first year as no interest
is charged. They will be carried out on an arm’s length basis in the event that the loans due are
extended and interest is charged based on the annual prevailing benchmark lending rates of the
People’s Bank of China from the second year onwards. Our Group does not expect to enter into
any future transaction of the above nature. In addition, our Group expects to repay such Past
Shareholders’ loan in the future through existing working capital and future cashflows generated
from operating activities.
171
(2) Arrangement between Hunan Anchun and the Past Shareholders for dividends payable
As at 31 March 2010, dividends of RMB43.2 million remain payable to the Past Shareholders in
respect of the RMB48.0 million dividends declared by Hunan Anchun for FY2009, of which RMB4.8
million has been paid in 1Q2010. Another RMB7.0 million has been paid subsequently and
accordingly, the amount of remaining dividends payables as at the Latest Practicable Date stood at
RMB36.2 million. The aforementioned dividends relate to past profits attributable to the existing
shareholders of Hunan Anchun prior to the Restructuring Exercise. Please refer to the sections
“Capitalisation and Indebtedness” and “Dividend Policy” of this Prospectus for more information.
Based on PRC rules, there is no time limit for the payment of dividends to shareholders.
Accordingly, pursuant to an agreement between Hunan Anchun and its past shareholders dated 18
June 2010, it was agreed that (i) Hunan Anchun will withhold the remaining payments for the
RMB36.2 million dividends payables for a year from the date of such agreement and such amount
due will be interest-free and unsecured during the year; and (ii) in the event that such amount due
is extended beyond the first year, interest will be charged based on the annual prevailing
benchmark lending rates of the People’s Bank of China.
The above arrangement is not carried out on an arm’s length basis for the first year as no interest
is charged. It will be carried out on an arm’s length basis in the event that the amount of dividends
due is extended and interest is charged based on the annual prevailing benchmark lending rates of
the People’s Bank of China from the second year onwards. Our Group does not expect to enter into
any future transaction of the above nature. In addition, our Group expects to repay such dividends
payable in the future through existing working capital and future cashflows generated from
operating activities.
REVIEW PROCEDURES FOR INTERESTED PERSON TRANSACTIONS

Our Audit Committee will review all Interested Person Transactions on a quarterly basis to ensure that
they are carried out on normal commercial terms and are not prejudicial to the interests of our
Shareholders by ensuring that the following policies were adopted by the management and reviewed by
the internal auditors:-
(a) market rates (where available) will be used as benchmarks for Interested Person Transactions;
(b) in determining the appropriate pricing, the suitability, quality and cost of the product or service, and
the experience and expertise of the supplier will be taken into consideration; and
(c) in relation to sales from our Group to Interested Persons, unless otherwise approved by the Audit
Committee, the Interested Persons will be charged at rates not lower than that charged to
independent third parties.
In the event that a member of the Audit Committee is interested in any of the Interested Person
Transactions, he will abstain from reviewing that particular transaction.
Internal auditors will be appointed to review all Interested Person Transactions on a periodic basis to
ensure full compliance with the terms of the executed agreements and rules and regulations implemented
by the SGX-ST for both on-going and future Interested Person Transactions. The report of such internal
auditors will be submitted to the Audit Committee for their review. The Audit Committee will review the
internal audit reports to ascertain that the guidelines and procedures established to monitor Interested
Person Transactions have been complied with.
The report shall detail the basis and procedures used to determine the terms of the transactions and
whether the terms are on normal commercial terms and not prejudicial to the interests of our
Shareholders. Please refer to the section entitled “Corporate Governance” of this Prospectus for more
details of our Audit Committee.
Our Audit Committee will also review all Interested Person Transactions to ensure that the then prevailing
rules and regulations of the SGX-ST (in particular Chapter 9 of the Listing Manual) are complied with. We
will also endeavour to comply with the principles of and best practices set out in the Listing Manual.
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POTENTIAL CONFLICT OF INTERESTS
In general, a conflict of interest arises when any of our Directors, Controlling Shareholders or their
Associates is carrying on or has any interest in any other corporation carrying on the same business or
dealing in similar products as our Group. Save as disclosed in the section entitled “Interested Person
Transactions” of this Prospectus, during the past three financial years ended 31 December and up to the
Latest Practicable Date:-
(a) none of our Directors or Controlling Shareholders or their Associates has had any interest, direct or
indirect, in any material transactions to which we were or are a party;
(b) none of our Directors or Controlling Shareholders or their Associates has had any interest, direct or
indirect, in any company carrying on the same business or carrying on a similar trade as us; and
(c) none of our Directors or Controlling Shareholders or their Associates has had any interest, direct or
indirect, in any enterprise or company that is our customer or supplier of goods or services.
In addition, to address any unforeseen future potential conflict of interests, pursuant to the deeds of
undertaking dated 13 October 2010, each of our Executive Directors and Key Executives has undertaken
to our Company that:-
(a) he/she will not, and shall procure that his/her associates (whether present or future) will not, carry
on any business that is directly or indirectly in competition with the business of our Group;
(b) he/she will not, and shall procure that his associates will not, have any interest in or provide any
financial assistance to any other person to carry on any business or other activity that will directly
or indirectly compete with our Group;
(c) he/she will not either alone or jointly with or as a manager, agent for, director or executive or
employee of any person, firm or company, directly or indirectly, carry on or be engaged or
concerned or interested in any capacity in or provide any financial assistance to any other
business, trade or occupation whatsoever, except in a business, trade or occupation which does
not compete directly or indirectly with any business (“Relevant Business”) carried on or engaged in
or concerned with or interested in or proposed to be carried on or engaged in or concerned with or
interested in our Company or any company in our Group;
(d) he/she will not, either on his/her own account or for any other person directly or indirectly solicit,
interfere with or endeavour to entice away from our Company or any company of our Group any
person who to his/her knowledge is now or has been a client, customer, or executive or employee
of, or in the habit of dealing with our Company or any company in our Group; and
(e) he/she will inform our Company immediately should he/she be aware that any breach of any terms
of his/her deed of undertaking is imminent.
None of our Directors, Controlling Shareholders or their Associates is carrying on or has any interest in
any other corporation carrying on the same business or dealing in similar products as our Group.
China XLX’s and Go Power’s interests in our Company
Go Power is an investment holding company incorporated in the British Virgin Islands and ultimately
owned by unrelated PRC nationals. Yan Yun Hua, a PRC natural person, holds 12.7% beneficial interest
in Go Power, with the remaining 87.3% held in trust by Yan Yun Hua for certain beneficiaries (PRC natural
persons or entities) under a trust agreement. China XLX is a company dual-listed in Singapore and Hong
Kong. Go Power currently holds approximately 28.1% shareholding interest in China XLX.
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Go Power and China XLX participated in the investment in our Company through the Convertible Loan
Investment. Upon the Conversion, Go Power and China XLX will hold 4.1% and 4.9% shareholding
interest in the pre-Invitation share capital of our Company, respectively. Please refer to the section entitled
“Restructuring Exercise” of this Prospectus for details. Pursuant to Section 7(4A) of the Act, as Go Power
holds not less than 20% of voting rights in China XLX, Go Power (and Yan Yun Hua) is deemed interested
in China XLX’s 4.9% shareholding interest in our Company. As such, Go Power is a Substantial
Shareholder of our Company by virtue of its 4.1% direct interest in our Company and 4.9% deemed
interest held through China XLX.
Henan XLX, one of our major customers, is the wholly-owned subsidiary of China XLX in the PRC
(collectively, the “China XLX group”). Go Power, which owns approximately 28.1% of the shareholding
interest in China XLX, is deemed interested in Henan XLX.
However, our Directors are of the view that there is no conflict of interests between China XLX group and
our Group for the reasons that (i) China XLX and Go Power are passive investors of our Group. They
have no right to appoint directors to our Board and currently do not have any representatives on our
Board or in our management team. Accordingly, they will not be involved in any Board or management
decision-making process within our Group; (ii) save for the abovementioned customer-supplier
relationship and participation of China XLX and Go Power as Pre-IPO Investors, our Group, our Directors
and management do not have any beneficial interests in China XLX/Go Power, or vice versa; and (iii) all
the transactions between XLX Group and our Group are and will be negotiated and conducted based on
arm’s length basis and normal commercial terms under the oversight of our management.
Furthermore, our Audit Committee will review all transactions entered into between our Group and China
XLX group on a quarterly basis to ensure that all the transactions with China XLX group are carried out
on normal commercial terms and are not prejudicial to the interests of our Shareholders. Such review
procedures will continue to be in place as long as the aggregate interest of China XLX and Go Power in
the share capital of our Company exceeds 5%.
Going forward, in the event that China XLX is deemed as an Interested Person of the Group, all
transactions with China XLX group thereafter shall be subjected to the then prevailing rules and
regulations of the SGX-ST, in particular Chapter 9 of the Listing Manual.
174
GENERAL AND STATUTORY INFORMATION
1. INFORMATION ON DIRECTORS AND KEY EXECUTIVES

No Director or Key Executive or Controlling Shareholder:-
(a) has, at any time during the last 10 years, had an application or a petition under any
bankruptcy laws of any jurisdiction filed against him or against a partnership of which he was
a partner at the time he was a partner or at any time within 2 years from the date he ceased
to be a partner;
(b) has, at any time during the last 10 years, had an application or a petition under any law of
any jurisdiction filed against an entity (not being a partnership) of which he was a director or
an equivalent person or key executive at the time when he was a director or an equivalent
person or a key executive of that entity or at any time within 2 years from the date he ceased
to be a director or an equivalent person or a key executive of that entity, for the winding up or
dissolution of that entity or, where that entity is the trustee of a business trust, that business
trust, on the ground of insolvency;
(c) has any unsatisfied judgement against him;
(d) has ever been convicted of any offence, in Singapore or elsewhere, involving fraud or
dishonesty which is punishable with imprisonment, or has been the subject of any criminal
proceedings (including any pending criminal proceedings of which he is aware) for such
purpose;
(e) has ever been convicted of any offence, in Singapore or elsewhere, involving a breach of any
law or regulatory requirement that relates to the securities or futures industry in Singapore or
elsewhere, or has been the subject of any criminal proceedings (including any pending
criminal proceedings of which he is aware) for such breach;
(f) has, at any time during the last 10 years, had judgement entered against him in any civil
proceedings in Singapore or elsewhere involving a breach of any law or regulatory
requirement that relates to the securities or futures industry in Singapore or elsewhere, or a
finding of fraud, misrepresentation or dishonesty on his part, nor has he been the subject of
any civil proceedings (including any pending civil proceedings of which he is aware) involving
an allegation of fraud, misrepresentation or dishonesty on his part;
(g) has ever been convicted in Singapore or elsewhere of any offence in connection with the
formation or management of any entity or business trust;
(h) has ever been disqualified from acting as a director or equivalent person of any entity
(including the trustee of a business trust), or from taking part directly or indirectly in the
management of any entity or business trust;
(i) has ever been the subject of any order, judgement or ruling of any court, tribunal or
governmental body, permanently or temporarily enjoining him from engaging in any type of
business practice or activity;
(j) has ever, to his knowledge, been concerned with the management or conduct, in Singapore
or elsewhere, of the affairs of:-
(i) any corporation which has been investigated for a breach of any law or regulatory
requirement governing corporations in Singapore or elsewhere; or
(ii) any entity (not being a corporation) which has been investigated for a breach of any
law or regulatory requirement governing such entities in Singapore or elsewhere, or
175
(iii) any business trust which has been investigated for a breach of any law or regulatory
requirement governing business trusts in Singapore or elsewhere; or
(iv) any entity or business trust which has been investigated for a breach of any law or
regulatory requirement that relates to the securities or futures industry in Singapore or
elsewhere,
in connection with any matter occurring or arising during the period when he was so
concerned with the corporation or partnership, entity or business trust; or
(k) has ever been the subject of any current or past investigation or disciplinary proceedings, or
has been reprimanded or issued any warning, by the Authority or any other regulatory
authority, exchange, professional body or government agency, whether in Singapore or
elsewhere.
2. MEMORANDUM AND ARTICLES OF ASSOCIATION

The nature of our Company’s business has been stated earlier in this Prospectus. Our Company’s
objects can be found in our Memorandum of Association which is available for inspection at our
registered office as stated in the section entitled “Documents for Inspection” of this Prospectus.
An extract of our Articles of Association relating to, inter alia, Directors’ powers to vote on contracts
in which they are interested, Directors’ remuneration, Directors’ borrowing powers, Directors’
retirement, Directors’ share qualification, rights pertaining to shares, convening of general meetings
and alteration of capital are set out in Appendix D of this Prospectus. The Articles of Association of
our Company is available for inspection at our registered office in the section entitled “Documents
for Inspection” of this Prospectus.
3. MATERIAL CONTRACTS
The following contracts, not being contracts entered into in the ordinary course of business, to
which our Company or any member of our Group is a party, for the period of two years before the
date of lodgement of this Prospectus, are or may be material:-
(a) Equity transfer agreement dated 20 November 2009 between our Company, Xie Ding Zhong
(our Executive Chairman and CEO, 50.25%), Li Chun Yang (our Key Executive, 16.4%),
Jiang Jing Fu (an ex-employee of Hunan Anchun, 16.4%) and Yan Chao Jian (an ex-
employee of Hunan Anchun, 16.95%), pursuant to which our Company acquired the entire
equity interests of Hunan Anchun for a total consideration of RMB75.0 million (the
“Acquisition”). The purchase consideration, which was fully paid in cash by May 2010, was
arrived at, after taking into consideration, inter alia, the NAV of Hunan Anchun as at 31
January 2009 as appraised by an independent valuer Hunan Rongxin Asset Valuation Co.,
Ltd. ␪फⳕ㤷ֵ䌘ѻ䆘Ԅ᳝䰤݀ৌ on 18 November 2009. Please refer to the section
entitled “Restructuring Exercise” of this Prospectus for more information;
(b) Convertible loan agreement dated 22 December 2009, supplemented by a deed of

accession and ratification dated 30 April 2010 between (1) Vision Top Holdings Limited,
China XLX Fertiliser Ltd., Go Power Investment Limited, Skyven Growth Opportunities Fund
Pte. Ltd., Naresh Nanubhai Desai, Wong Chao Hsiung and Quek Yiang Hang (as
“Investors”), (2) Xie Ding Zhong (as “Executive Chairman”); (3) Li Chun Yang, Dai Feng Yu, Li
Bin and Liang Gong Zeng (as “Founding Shareholders”); (4) Ma One Kee, Xie Ming and Able
Gallery Limited (as “Seed Investors”); (5) Oriental Eagle Holdings Limited, Dawn Vitality
International Limited, Inventive Result Enterprises Limited, Giant Yield Global Limited,
SinoState Management Limited and Ace Sense Holdings Limited (as “Existing
Shareholders”) and (6) our Company (as “Borrower”), pursuant to which the Investors agreed
to extend a convertible loan of an aggregate amount of RMB80.0 million to our Company.
Please refer to the section entitled “Restructuring Exercise” of this Prospectus for more
information;
176
(c) Sale and purchase agreement dated 12 October 2009, supplemented by a supplemental
agreement dated 8 January 2010, pursuant to which Hunan Anchun disposed all its equity
interest in Anchun Biotech and the certain intangible assets, including 6 trademarks, 1 patent
and 2 production permits for health supplements, to Xie Ding Zhong (our Executive
Chairman and CEO), Yan Chao Jian (our ex-employee), Jiang Jing Fu (our ex-employee)
and Li Chun Yang (our Key Executive), at a consideration of RMB2,000,000. The
consideration, which was fully paid by June 2010, was determined on a “willing buyer and
willing seller” basis, and taking into account, inter alia, the valuation reports dated
7 January 2010 issued by Changsha Gongli Asset Valuation Co., Ltd. 䭓≭݀ゟ䌘ѻ䆘Ԅ
᳝䰤݀ৌ. Please refer to the section entitled “Restructuring Exercise” of this Prospectus for
more information;
(d) An agreement dated 24 June 2010 between Hunan Anchun and Anchun Biotech pursuant to
which an amount owing from Anchun Biotech to Hunan Anchun of approximately
RMB745,000 was waived by Hunan Anchun. Please refer to the section entitled
“Restructuring Exercise” of this Prospectus for more information;
(e) Loan agreements dated 22 December 2009, 5 January 2010 and 9 June 2010 between Xie
Ding Zhong, Li Chun Yang, Jiang Jing Fu, Yan Chao Jian (the “Past Shareholders”) and
Hunan Anchun, pursuant to which loans amounting to an aggregate of approximately
RMB73.4 million (as adjusted for foreign exchange translation) were extended by the Past
Shareholders to Hunan Anchun for working capital purposes. Please refer to the section
entitled “On-going Interested Person Transactions” of this Prospectus for more information;
(f) Agreement dated 18 June 2010 between the Past Shareholders and Hunan Anchun in
relation to the arrangement on payment of dividends due to the Past Shareholders, pursuant
to which dividends of RMB36.2 million payable to the Past Shareholders will be withheld by
Hunan Anchun for working capital purposes. Please refer to the section entitled “On-going
Interested Person Transactions” of this Prospectus for more information;
(g) Management and Underwriting Agreement between our Company, the Vendors, the Manager
and the Underwriter dated 13 October 2010 for the management of the Invitation and the
underwriting of the Offer Shares;
(h) Placement Agreement between our Company, the Vendors and the Placement Agent dated
13 October 2010 for the placement of the Placement Shares.
4. LITIGATION
Neither our Company nor our Subsidiary is engaged in any legal or arbitration proceedings,
including those which are pending or known to be contemplated, which may have or which have
had in the 12 months immediately preceding the date of lodgement of the Prospectus, a material
effect on our Group’s financial position or profitability.
5. FINANCIAL CONDITION AND OPERATIONS OF OUR GROUP

(a) Saved as disclosed in this Prospectus, our Directors are not aware of any relevant material
information including trading factors or risks which are unlikely to be known or anticipated by
the general public and which could materially affect the profits of our Group.
(b) Saved as disclosed in this Prospectus, the financial condition and operations of our Group
are not likely to be affected by any of the followings:-
(i) known trends or demands, commitments, events or uncertainties that will result in or
are reasonably likely to result in our Group’s liquidity increasing or decreasing in any
material way;
(ii) material commitments for capital expenditure;
177
(iii) unusual or infrequent events or transactions or any significant economic changes that
materially affect the amount of reported income from operations; and
(iv) known trends or uncertainties that have had or that we reasonably expect will have a
material favourable or unfavourable impact on revenues or operating income.
(c) save as disclosed in this Prospectus, our Directors are not aware of any event which has
occurred since 1 April 2010, which may have a material effect on the financial information
provided in the “Audited Combined Financial Statements of Anchun International Holdings
Ltd. and its Subsidiaries for the Financial Years ended 31 December 2007, 2008 and 2009”
and “Unaudited Combined Financial Statements of Anchun International Holdings Ltd. and
its Subsidiary for the Financial Period from 1 January 2010 to 31 March 2010” included as
Appendix A and Appendix B respectively of this Prospectus to the Latest Practicable Date
which may have a material effect on the financial position and results of our Group.
6. CONSENTS
(a) Ernst & Young LLP, the Reporting Accountants and Auditors, has given and has not
withdrawn its respective written consent to the issue of this Prospectus with the inclusion
herein of the Accountants’ Reports in the form and context in which they appear in this
Prospectus and references to its name in the form and context in which it appears in this
Prospectus and to act in such capacity in relation to this Prospectus.
(b) China National Chemical Information Centre (at #601, Tower B, Huaxin Building, No. 53,
Xiaoguan Street, An Ding Men Wai, Beijing, PRC) has given and has not withdrawn its
written consent to the issue of this Prospectus with the inclusion herein of its name and the
reference to its name and industry report entitled “Report on Technologies and Equipment in
China’s Fertiliser and Methanol Industries” dated 13 September 2010 in the form and context
in which they appear in this Prospectus and to act in such capacity in relation to this
Prospectus.
(c) The Manager and Underwriter has given and has not withdrawn its written consent to the
issue of this Prospectus with the inclusion herein of and reference to its name in the form
and context in which it appears in this Prospectus and to act in such capacity in relation to
this Prospectus.
(d) Hunan Rongxin Asset Valuation Co., Ltd. ␪फⳕ㤷ֵ䌘ѻ䆘Ԅ᳝䰤݀ৌ (at #1904, Hunan
Fortune Plaza, No. 468, Middle Furong Road, Changsha City, Hunan Province, PRC) has
given and has not withdrawn its written consent to the issue of this Prospectus with the
inclusion of its name and reference to its valuation report dated 18 November 2009 set out
under the sections entitled “Restructuring Exercise” and “Material Contracts” of this
Prospectus in the form and context in which they appear in this Prospectus and to act in
such capacity in relation to this Prospectus.
(e) Changsha Gongli Asset Valuation Co., Ltd. 䭓≭݀ゟ䌘ѻ䆘Ԅ᳝䰤݀ৌ (at #827, Fuli
Building, Xin Fu Cheng, No. 31, Jiu Cai Yuan, Furong District, Changsha City, Hunan
Province, PRC) has given and has not withdrawn its written consent to the issue of this
Prospectus with the inclusion of its name and reference to its valuation reports dated 7
January 2010 set out under the sections entitled “Restructuring Exercise” and “Material
Contracts” of this Prospectus in the form and context in which they appear in this Prospectus
and to act in such capacity in relation to this Prospectus.
(f) Nexia TS Pte. Ltd. (at 5 Shenton Way, #16-00 UIC Building, Singapore 068808) has given
and has not withdrawn its written consent to the issue of this Prospectus with the inclusion of
its name and reference to its share valuation report dated 31 May 2010 set out under the
section entitled “Review of Results of Operations” of this Prospectus in the form and context
in which they appear in this Prospectus and to act in such capacity in relation to this
Prospectus.
178
(g) Haihua Yongtai Law Firm, the Legal Advisers to our Company on the PRC Law, has given
and has not withdrawn its written consent to the issue of this Prospectus with the inclusion of
its opinion in relation to PRC law set out under the sections entitled “Restructuring Exercise”
and “Trust Agreements” of this Prospectus in the form and context in which they appear in
this Prospectus and references to its name and context in which they appear in this
Prospectus and to act in such capacity in relation to this Prospectus.
(h) Jingtian & Gongcheng Attorneys at Law (at 34/F, Tower 3, China Central Place, 77 Jianguo
Road, Beijing 100025, China) has given and has not withdrawn its written consent to the
issue of this Prospectus with the inclusion of its opinion in relation to PRC law set out under
the section entitled “Restructuring Exercise” of this Prospectus in the form and context in
which they appear in this Prospectus and references to its name and context in which they
appear in this Prospectus and to act in such capacity in relation to this Prospectus.
(i) Each of the Solicitors to the Invitation and Legal Advisers to our Company on Singapore
Law, the Solicitors to the Manager, Underwriter and Placement Agent, the Share Registrar
and Share Transfer Agent, the Receiving Bank and Principal Bankers does not make, or
purport to make, any statement in this Prospectus or any statement upon which a statement
in this Prospectus is based and, to the maximum extent permitted by law, expressly disclaim
and take no responsibility for any liability to any person which is based on, or arises out of,
the statements, information or opinions in this Prospectus.
7. GENERAL
No expert is employed on a contingent basis by our Company or our Subsidiary has a material
interest, whether direct or indirect, in the shares of our Company or our Subsidiary, or has a
material economic interest, whether direct or indirect, in our Company, including an interest in the
success of the Invitation.
There has not been any public take-over, by a third party in respect of our Company’s Shares or by
our Company in respect of the shares of another corporation or units of a business trust, which has
occurred between FY2009 and the Latest Practicable Date.
Save as disclosed in the section entitled “Management, Underwriting and Placement

Arrangements” of this Prospectus, no director, proposed director or promoter of the relevant
corporation or any expert is entitled to receive any commission for subscribing and/or purchasing
or agreeing to subscribe for and/or purchase, or procuring or agreeing to procure a subscription
and/or purchase, for any shares in, or debentures of our Company.
8. STATEMENT BY OUR DIRECTORS AND THE VENDORS

This Prospectus has been seen and approved by the Directors and the Vendors of our Company
and they individually and collectively accept full responsibility for the accuracy of the information
given in this Prospectus and confirm, having made all reasonable enquiries, that to the best of their
knowledge and belief, the facts stated and the opinions expressed in this Prospectus are fair and
accurate in all material respects as at the date of this Prospectus and that there are no material
facts the omission of which would make any statement herein misleading.
9. STATEMENT BY THE MANAGER

The Manager acknowledges that, having made due and careful enquiry and to the best of its
knowledge and belief, based on information furnished to it by our Group, this Prospectus
constitutes a full and true disclosure of all the material facts about the Invitation and our Group,
and it is not aware of any other facts, the omission of which would make any statements herein
misleading.
179
10. DOCUMENTS FOR INSPECTION
Copies of the following documents may be inspected at our registered office during normal
business hours for a period of six months from the date of this Prospectus:-
(a) the Memorandum and Articles of Association of our Company;
(b) the material contracts referred to in the section entitled “Material Contracts” of this section;
(c) the Service Agreements referred to in the section entitled “Service Agreements” of this
Prospectus;
(d) the letters of consents referred to in the section entitled “Consents” of this Prospectus;
(e) the “Audited Combined Financial Statements of Anchun International Holdings Ltd. and its
Subsidiaries for the Financial Years ended 31 December 2007, 2008 and 2009” as set out in
Appendix A of this Prospectus;
(f) the “Unaudited Combined Financial Statements of Anchun International Holdings Ltd. and its
Subsidiary for the Financial Period from 1 January 2010 to 31 March 2010” as set out in
Appendix B of this Prospectus; and
(g) the CNCIC Report as referred to in the sections entitled “Industry Overview”, “Management’s
Discussion and Analysis of Results of Operations and Financial Position” and “Prospects,
Business Strategies and Future Plans – Prospects” of this Prospectus.
180
APPENDIX A – AUDITED COMBINED FINANCIAL STATEMENTS OF
ANCHUN INTERNATIONAL HOLDINGS LTD. AND ITS SUBSIDIARIES FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2007, 2008 AND 2009
Index Page
Statement by Directors A-2
Independent Auditors’ Report A-3
Combined Statements of Comprehensive Income A-5
Combined Balance Sheets A-6
Combined Statements of Changes in Equity A-7
Combined Statements of Cash Flows A-8
Notes to the Combined Financial Statements A-11
A-1
ANCHUN INTERNATIONAL HOLDINGS LTD. AND ITS SUBSIDIARIES
STATEMENT BY DIRECTORS
We, Xie Ding Zhong and Dai Feng Yu, being two of the directors of Anchun International Holdings
Ltd. (the “Company”), do hereby state that, in the opinion of the directors,
(i) the accompanying combined financial statements together with notes thereto are drawn up
so as to present fairly, in all material respects, the state of affairs of the Group as at 31
December 2007, 2008 and 2009 and the results of the business, changes in equity and cash
flows of the Group for the years ended on those dates, 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.
On behalf of the board of directors:
Xie Ding Zhong

Director
Dai Feng Yu
Director
13 October 2010
A-2
REPORT FROM THE INDEPENDENT AUDITORS IN RELATION TO THE AUDITED COMBINED
FINANCIAL STATEMENTS OF ANCHUN INTERNATIONAL HOLDINGS LTD. AND ITS
SUBSIDIARIES FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2007, 2008 AND 2009
13 October 2010
The Board of Directors

Anchun International Holdings Ltd.
1 Robinson Road
#17-00 AIA Tower
Singapore 048542
Dear Sirs
We have audited the accompanying combined financial statements of Anchun International

Holdings Ltd. (the "Company") and its subsidiaries (collectively, the "Group”), which comprise the
balance sheets of the Group as at 31 December 2007, 2008 and 2009, the statements of changes
in equity of the Group and the statements of comprehensive income and cash flow statements of
the Group for the years then ended, and a summary of significant accounting policies and other
explanatory notes.
Management's responsibility for the financial statements
Management is responsible for the preparation and fair presentation of these financial statements
in accordance with Singapore Financial Reporting Standards. This responsibility includes devising
and maintaining a system of internal accounting controls sufficient to provide a reasonable
assurance that assets are safeguarded against loss from unauthorised use or disposition; and
transactions are properly authorised and that they are recorded as necessary to permit the
preparation of true and fair profit and loss accounts and balance sheets and to maintain
accountability of assets; selecting and applying appropriate accounting policies; and making
accounting estimates that are reasonable in the circumstances.
Auditors' responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We
conducted our audit in accordance with Singapore Standards on Auditing. Those standards require
that we comply with ethical requirements and plan and perform the audit to obtain reasonable
assurance whether the financial statements are free from material misstatement.
A-3
REPORT FROM THE INDEPENDENT AUDITORS IN RELATION TO THE AUDITED COMBINED
FINANCIAL STATEMENTS OF ANCHUN INTERNATIONAL HOLDINGS LTD. AND ITS
SUBSIDIARIES FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2007, 2008 AND 2009
Auditors' responsibility (cont’d)
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on the auditor's judgment,
including the assessment of the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor considers internal control
relevant to the entity's preparation and fair presentation of the financial statements in order to
design audit procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the entity's internal control. An audit also includes
evaluating the appropriateness of accounting policies used and the reasonableness of accounting
estimates made by directors, as well as evaluating the overall presentation of the financial
statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinion.
Opinion
In our opinion, the accompanying combined financial statements of the Group present fairly, in all
material respects, the state of affairs of the Group as at 31 December 2007, 2008 and 2009 and the
results, changes in equity and cash flows of the Group for the financial years ended on those dates
in accordance with Singapore Financial Reporting Standards.
This report has been prepared solely for inclusion in the Prospectus in connection with the
proposed listing of the Company’s shares on the Singapore Exchange Securities Trading Limited.
ERNST & YOUNG LLP

Public Accountants and
Certified Public Accountants
Singapore
Partner in charge: Max Loh Khum Whai
A-4
COMBINED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2007, 2008 AND 2009
(Amounts expressed in Renminbi)
Note 2007 2008 2009

Rmb’000 Rmb’000 Rmb’000
Revenue 4 114,780 121,009 294,841
Cost of sales (62,249) (64,418) (176,039)
Gross profit 52,531 56,591 118,802
Other item of income

Finance and other income 5 2,419 6,416 2,654
Other items of expense

Marketing and distribution expenses (4,091) (6,036) (3,999)
Administrative expenses (21,918) (28,957) (27,049)
Finance costs 9 (1,082) (2,377) (2,105)
Profit before tax 6 27,859 25,637 88,303
Income tax expense 10 (5,141) (4,333) (13,142)
Profit net of tax attributable to equity

holders of the Company 22,718 21,304 75,161
Other comprehensive income:

Net gain (loss) on available-for-sale
financial assets 438 (131) 133
Other comprehensive income for the

year, net of tax 438 (131) 133
Total comprehensive income for the

year attributable to equity holders of
the Company 23,156 21,173 75,294
Earnings per share attributable to

equity holders of the Company (Rmb
fen per share)
Basic and diluted 11 5.68 5.33 18.79
The accompanying accounting policies and explanatory notes form an integral part of the combined
financial statements.
A-5
COMBINED BALANCE SHEETS

AS AT 31 DECEMBER 2007, 2008 AND 2009

Note 2007 2008 2009
Rmb’000 Rmb’000 Rmb’000
ASSETS
Non-current assets
Property, plant and equipment 13 63,524 111,142 114,853
Intangible assets 14 104 226 143
Land use rights 15 17,362 16,997 16,632
Deferred tax assets 16 312 684 846
Investment securities 17 931 800 933
Prepayments 20 5,456 6,100 6,131
87,689 135,949 139,538
Current assets
Inventories 18 101,842 199,858 95,831
Trade and other receivables 19 29,072 43,924 47,355
Prepayments 20 15,303 6,723 10,793
Cash and cash equivalents 21 54,357 44,425 88,410
Income tax receivable 1,660 4,979 –
202,234 299,909 242,389
Total assets 289,923 435,858 381,927
EQUITY AND LIABILITIES

Current liabilities
Trade and other payables 22 27,064 35,763 69,300
Advances from customers 171,899 298,520 160,030
Other liabilities 23 3,496 6,223 9,061
Loans and borrowings 24 9,300 9,300 19,200
Income tax payable – – 3,145
211,759 349,806 260,736
Net current liabilities (9,525) (49,897) (18,347)
Loans and borrowings 24 16,500 7,200 14,745
Derivative financial instrument 25 – – 34
Total liabilities 228,259 357,006 275,515
Net assets 61,664 78,852 106,412
Equity attributable equity holders of the Company

Share capital 26 12,300 32,000 45
Other reserves 27 6,781 16,215 58,310
Accumulated profits 42,583 30,637 48,057
Total equity 61,664 78,852 106,412
Total equity and liabilities 289,923 435,858 381,927
A-6
COMBINED STATEMENTS OF CHANGES IN EQUITY

Attributable to equity holders of the Company

Share Other
Capital reserves Accumulated
(Note 26) (Note 27) profits Total equity
Rmb’000 Rmb’000 Rmb’000 Rmb’000
Year ended 31 December 2007

Opening balance at 1 January 2007 12,300 4,626 22,812 39,738
year – 438 22,718 23,156
Dividends (Note 28) – – (1,230) (1,230)
Transfer to statutory reserve fund – 1,717 (1,717) –
Closing balance at 31 December 2007 12,300 6,781 42,583 61,664

year – (131) 21,304 21,173
Dividends (Note 28) – – (25,410) (25,410)
Share-based compensation expense – 1,725 – 1,725
Issuance of shares of subsidiary 19,700 – – 19,700
Closing balance at 31 December 2008 32,000 16,215 30,637 78,852

year – 133 75,161 75,294
Dividends (Note 28) – – (48,000) (48,000)
Equity component of convertible loan – 221 – 221
Adjustment pursuant to Restructuring
Exercise (32,000) 32,000 – –
Issuance of shares of the Company 45 – – 45
Closing balance at 31 December 2009 45 58,310 48,057 106,412
A-7
COMBINED STATEMENTS OF CASH FLOWS

2007 2008 2009

Rmb’000 Rmb’000 Rmb’000
Operating activities
Profit before tax 27,859 25,637 88,303
Adjustment for:
Depreciation of property, plant and
equipment 2,685 6,207 9,765
Amortisation of intangible assets 56 93 124
Amortisation of land use rights 365 365 365
Allowance for impairment of trade
receivables 2,079 2,406 1,154
Allowance (write-back) for impairment of
other receivables 302 (15) 447
Income tax grant – (4,976) –
Finance costs 1,082 2,377 2,105
Finance income (594) (557) (741)
Share-based compensation expense – 1,725 –
Loss (gain) on disposal of property,
plant and equipment 8 (31) 1
Gain on disposal of subsidiary – – (1,720)
Operating cash flows before changes

in working capital 33,842 33,231 99,803
Changes in working capital
Decrease (increase) in:
Inventories (43,398) (98,016) 103,792
Trade and other receivables 9,455 (17,243) (3,142)
Prepayments (7,634) 8,580 (4,070)
Increase (decrease) in:
Trade and other payables 3,751 (5,119) 3,652
Advances from customers 47,830 126,621 (138,490)
Other liabilities 2,509 2,727 2,838
Total changes in working capital 12,513 17,550 (35,420)
Cash flows from operations 46,355 50,781 64,383

Interest received 594 557 741
Interest paid (1,082) (2,377) (2,105)
Income taxes paid (7,420) (3,048) (5,181)
Net cash flows from operating

activities 38,447 45,913 57,838
A-8

Note 2007 2008 2009

Rmb’000 Rmb’000 Rmb’000
Investing activities
Purchase of property, plant and
equipment A (38,554) (46,479) (23,211)
Purchase of intangible assets - software (18) (215) (41)
Proceeds from disposal of property,
plant and equipment 1 282 –
Disposal of subsidiary, net of cash B – – (408)
Net cash flows used in investing

activities (38,571) (46,412) (23,660)
Financing activities
Proceeds from loans and borrowings 27,500 – 12,000
Repayment of loans and borrowings (1,700) (9,300) (9,300)
Proceeds from convertible loan – – 15,000
Proceeds from issuance of shares of
subsidiary – 388 –
Dividends paid to the then existing
shareholders of Hunan Anchun (984) (1,230) (1,270)
Proceeds from issuance of shares of the
Company – – 45
Loans from shareholders 270 1,392 1,849
Repayment of loans from shareholders (726) (684) (6,706)
Loans from employees 380 700 984
Repayment of loans from employees (173) (699) (2,795)
Net cash generated from(used in)

financing activities 24,567 (9,433) 9,807
Net increase(decrease) in cash and

cash equivalents 24,443 (9,932) 43,985
Cash and cash equivalents at
1 January 29,914 54,357 44,425
Cash and cash equivalents at

31 December 21 54,357 44,425 88,410
A-9

Notes to the combined cash flow statement
A. Property, plant and equipment
2007 2008 2009

Rmb’000 Rmb’000 Rmb’000
Current year additions to property, plant

and equipment (Note 13) 42,333 54,076 13,739
Less: Payable to creditors (7,037) (15,278) (5,837)
Prepayments made in prior year (3,760) (5,456) (6,100)
31,536 33,342 1,802

Add: Payments for prior year purchase 1,562 7,037 15,278
Prepayments made in current year 5,456 6,100 6,131
Net cash outflow for purchase of property,

plant and equipment 38,554 46,479 23,211
B. Disposal of subsidiary
The Company disposed of Hunan Anchun Biotech Co., Ltd, a wholly owned subsidiary
during the year ended 31 December 2009.
The assets disposed of and the liabilities discharged as a result of the disposal of the
above named subsidiary are as follows:
2009
Rmb’000
Property, plant and equipment 262
Inventories 235
Trade and other receivables 110
Cash and bank balances 408
Trade and other payables (735)
Carrying value of net assets 280

Gain on disposal 1,720
Sale consideration 2,000

Cash and cash equivalents disposed of (408)
Less: Other receivables (2,000)
Net cash outflow on disposal of a subsidiary (408)
A-10
NOTES TO THE COMBINED FINANCIAL STATEMENTS

31 DECEMBER 2007, 2008 AND 2009
1. Corporate information
1.1 The Company
The Company was incorporated in Singapore on 29 October 2009 under the Companies
Act as a private exempt company limited by shares under the name of Anchun Holdings
Pte Ltd. The Company was incorporated for the purpose of acquiring the existing Hunan
Anchun Advanced Technology Co., Ltd. pursuant to the Group Restructuring Exercise. On
14 September 2010, the Company was converted to a public limited company and changed
its name in connection therewith to Anchun International Holdings Ltd.
The registered office of the Company is at 1 Robinson Road, #17-00 AIA Tower, Singapore
048542 and the principal place of business of the Group is located at No. 539, Lusong
Road, Changsha National Hi-tech Industrial Development Zone, Changsha City, Hunan
Province, PRC 410205.
The principal activity of the Company is that of investment holding. The principal activities
of the subsidiaries are disclosed in Note 12.
1.2 The Restructuring Exercise
The Group was formed through the Restructuring Exercise which involved a series of
acquisitions and the rationalisation of the corporate and shareholding structure for the
purposes of the Invitation. Pursuant to the Restructuring Exercise, the Company became
the holding company of the Group.
The Restructuring Exercise involved the following steps:
(a) Establishment of the Company
The Company was incorporated on 29 October 2009 in Singapore as an

investment vehicle with an issued share capital of S$1.00, comprising 1 ordinary
share, which was held by an unrelated nominee.
(b) First share subscription in the share capital of the Company
On 3 November 2009, the unrelated nominee transferred his entire interest in the
Company to Ace Sense, which is wholly owned by Xie Ming, a US citizen. In
addition, 999 shares were allotted and issued to Sinostate Management (wholly-
owned by Ma Ong Kee, Non-Executive Director), Ace Sense (wholly-owned by Xie
Ming, Non-Executive Director, who is the daughter of Executive Chairman and
CEO, Xie Ding Zhong), Oriental Eagle (wholly-owned by Li Chun Yang, Key
Executive), Dawn Vitality (wholly-owned by Dai Feng Yu, Executive Director),
Inventive Result Enterprises (wholly-owned by Li Bin, Key Executive) and Giant
Yield Global (wholly-owned by Liang Gong Zeng, Executive Director) (collectively,
the “BVI Shareholders”), resulting in the shareholding interests in the Company
being 28.0% held by Sinostate Management, 27.0% held by Ace Sense, 13.0%
held by Oriental Eagle, 10.3% held by Dawn Vitality, 10.3% held by Inventive
Result Enterprises and 11.4% held by Giant Yield Global, respectively.
Pursuant to the Trust Agreements dated 2 November 2009, Li Chun Yang, Dai
Feng Yu, Li Bin and Liang Gong Zeng were appointed as trustees to each of
Oriental Eagle, Dawn Vitality, Inventive Result Enterprises and Giant Yield Global
to hold the shareholding interests in each of the abovementioned BVI companies in
trust for 397 beneficiaries who are existing and past employees of the Group as
well as the related persons of these employees.
A-11

31 DECEMBER 2007, 2008 AND 2009
1. Corporate information (cont’d)
1.2 The Restructuring Exercise (cont’d)
Pursuant to an equity transfer agreement dated 20 November 2009, the Company

acquired the entire equity interests of Hunan Anchun from four registered
shareholders of Hunan Anchun, namely, Xie Ding Zhong (Executive Chairman and
CEO, 50.25%), Li Chun Yang (Key Executive, 16.4%), Jiang Jin Fu (an ex-
employee of Hunan Anchun, 16.4%), and Yan Chao Jian (an ex-employee of
Hunan Anchun, 16.95%) who held the shareholding interests of Hunan Anchun in
trust for 398 beneficiaries who are existing and past employees of Hunan Anchun
as well as the related persons of these employees, for a total consideration of
RMB75.0 million (the “Acquisition”). The consideration of RMB75.0 million for the
Acquisition was funded through the Convertible Loan Investment as described in
paragraph (e) below. Jiang Jing Fu and Yan Chao Jian previously held
management roles in Hunan Anchun, but had subsequently relinquished
management roles when they retired in 2009 due to their advanced age. In addition,
Jiang Jing Fu and Yan Chao Jian had never held the role of legal representative of
Hunan Anchun, where such role was held by Xie Ding Zhong since its inception.
The Acquisition was carried out on an arm’s length basis, and the purchase
consideration was based on, inter alia, the valuation of approximately RMB78.4
million by an independent valuer Hunan Rongxin Asset Valuation Co., Ltd. on 18
November 2009, which had taken into account, inter alia, the NAV of Hunan
Anchun of approximately RMB82.4 million as at 31 January 2009. The purchase
consideration was fully paid in cash by May 2010. Following the completion of the
Acquisition, Hunan Anchun became a wholly owned subsidiary of the Company.
In respect of the applicability of Article 11 of Provision 10, Haihua Yongtai Law Firm
and Jingtian Gongcheng Attorneys at Law, have opined that, pursuant to the
confirmation letters in respect of the applicable laws and regulations to the
Acquisition issued by the Committee on 9 December 2009 and Department of
given that the foreign investors, being Ma Ong Kee (a Malaysian Citizen), through
Sinostate Management, and Xie Ming (a US citizen), through Ace Sense,
collectively hold 55% of shareholding interests in the Company, and that the
Company is not set up and controlled by domestic residents, the Company does
not fall within the definition of SPV in Provision 10. Accordingly, the Acquisition
does not require any approvals from the Ministry of Commerce (the “MOC”) or the
China Security and Regulatory Commission (the “CSRC”) pursuant to Provision 10,
and Article 11 of Provision 10 does not apply to the Restructuring Exercise.
(d) Second share subscription in the share capital of the Company
On 18 December 2009, the issued and paid-up share capital of the Company was
increased to S$9,200, comprising 9,200 ordinary shares, pursuant to a cash
injection of S$8,200 by the BVI Shareholders and one new BVI company, Vision
Top Holdings Limited, which is currently controlled by Ma Ong Kee (“Vision Top”).
Accordingly, the shareholding proportion in the Company was changed to Vision
Top (6.96%), Sinostate Management (14.78%), Ace Sense (29.35%), Oriental
Eagle (14.13%), Dawn Vitality (11.2%), Inventive Result Enterprises (11.2%) and
Giant Yield Global (12.39%).
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31 DECEMBER 2007, 2008 AND 2009
(e) Third share subscription in the share capital of the Company and the convertible
loan investment
Pursuant to a convertible loan agreement dated 22 December 2009, supplemented

by a deed of accession and ratification dated 30 April 2010, it was agreed that:-
(i) the BVI Shareholders, Vision Top, Able Gallery, China XLX, Go Power,
SkyVen, Naresh Nanubhai Desai, Wong Chao Hsiung and Quek Yiang Hang
shall subscribe for an aggregate of 40,000 ordinary shares at S$1.0 per share
in the share capital of the Company;
(ii) Vision Top, China XLX, Go Power, SkyVen, Naresh Nanubhai Desai, Wong
Chao Hsiung and Quek Yiang Hang shall invest RMB80.0 million (the “Loan”)
in the Company through a convertible loan (the “Convertible Loan
Investment”); and
(iii) the Convertible Loan shall be used for the Acquisition as described in
paragraph (c) above, and the balance shall be retained by the Group for
working capital purposes. In addition, the amount paid to the vendors of
Hunan Anchun shall be immediately transferred to Hunan Anchun as a loan.
Subsequently, through a capital injection of S$40,000, the share capital of the

Company increased from S$9,200, comprising 9,200 ordinary shares, to S$49,200,
comprising 49,200 ordinary shares on 3 May 2010, and the resultant shareholding
proportion in the Company was changed to Ace Sense (27.44%), Sinostate
Management (6.10%), Oriental Eagle (13.21%), Dawn Vitality (10.47%), Inventive
Result Enterprises (10.47%), Giant Yield Global (11.59%), Vision Top (3.03%),
Able Gallery (4.07%), China XLX (4.54%), Go Power (3.8%), SkyVen (3%), Naresh
Nanubhai Desai (1.8%), Wong Chao Hsiung (0.25%) and Quek Yiang Hang
(0.25%). (1)
Conversion
On 2 August 2010, the Company issued the conversion notices (as prescribed
under the Convertible Loan Investment) to Vision Top, China XLX, Go Power,
SkyVen, Naresh Nanubhai Desai, Wong Chao Hsiung and Quek Yiang Hang,
pursuant to which the Loan was converted into an aggregate of 800 shares in the
capital of the Company, which were allotted and issued to Vision Top (146 shares),
China XLX (218 shares), Go Power (182 shares), SkyVen (144 shares), Naresh
Nanubhai Desai (86 shares), Wong Chao Hsiung (12 shares) and Quek Yiang
Hang (12 shares), respectively (the “Conversion”).
Following the Conversion, the resulting shareholding structure of the Company was
Ace Sense (27.00%), Sinostate Management (6.00%), Vision Top (3.28%), Able
Gallery (4.00%), Oriental Eagle (13.00%), Dawn Vitality (10.3%), Inventive Result
Enterprises (10.3%), Giant Yield Global (11.4%), China XLX (4.90%), Go Power
(4.10%), SkyVen (3.24%), Naresh Nanubhai Desai (1.94%), Wong Chao Hsiung
(0.27%) and Quek Yiang Hang (0.27%).
(1)
Figures do not add to 100% due to rounding.
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31 DECEMBER 2007, 2008 AND 2009
loan investment (cont’d)
It is noted that Go Power is an investment holding company incorporated in the BVI

and ultimately owned by unrelated PRC nationals. Yan Yun Hua, a PRC natural
person, holds a 12.7% beneficial interest in Go Power, with the remaining 87.3%
held in trust by Yan Yun Hua for certain beneficiaries (PRC natural persons or
entities) under a trust agreement. Accordingly, the participation of Go Power in the
Convertible Loan Investment has resulted in the change in the direct shareholding
of the Company held and controlled by non-PRC persons from 55.0% to 50.9%
after taking into account the shares issued and allotted to Go Power following the
Conversion.
In addition, Go Power currently holds 28.06% interest in China XLX, which also
participated in the Convertible Loan Investment with a direct investment interest of
4.9%. Pursuant to Section 7(4A) of the Act, as Go Power holds not less than 20%
of voting rights in China XLX, Go Power (and Yan Yun Hua) is deemed interested
in China XLX’s 4.9% shareholding interest in the Company. However China XLX is
a company dual-listed in Singapore and Hong Kong with its own self-governing
board of directors and management, and neither Go Power nor Yan Yun Hua holds
a majority interest in China XLX. Accordingly, neither Go Power nor Yan Yun Hua
is considered to have control over China XLX‘s interest in the Company.
Haihua Yongtai Law Firm has advised that since Go Power (and Yan Yun Hua) are
not related to the Company or the existing shareholders of the Company, Article 11
of Provision 10 is not applicable with respect to the interests held and controlled by
Go Power (and Yan Yun Hua) in the share capital of the Company, and the
Company is not deemed to be the SPV as defined in the Articles 39 and 40 of
Provision 10.
Notwithstanding the aboved change to the shareholding structure, Haihua Yongtai

and Jingtian Gongcheng have both provided their confirmation that the above-
mentioned change will not have any impact on their respective legal opinions that
the Acquisition does not require the approvals from MOC, and that Article 11 of
Provision 10 does not apply to the Restructuring Exercise.
Accordingly, following the Restructuring Exercise as described above, save for the
entry of Ace Sense in place of Xie Ding Zhong, and the participation of the Pre-IPO
Investors, the ultimate shareholders of the Company remained substantively the
same as those of Hunan Anchun prior to the Acquisition.
Anchun Biotech was set up by Hunan Anchun as a wholly-owned subsidiary in

December 2007 with an initial share capital of Rmb2,000,000. It was engaged in
the business of manufacture and sales of health supplements. In order to
streamline the Group’s business and resources for the purpose of the Invitation,
Hunan Anchun decided to dispose of all its equity interest in Anchun Biotech and
transfer certain intangible assets including 6 trademarks, 1 patent and 2 production
permits for health supplements which were registered under Hunan Anchun’s name
but not relevant to Hunan Anchun’s business (the “Intangible Assets”).
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31 DECEMBER 2007, 2008 AND 2009
(f) Disposal of Hunan Anchun Biotech Co., Ltd. (“Anchun Biotech”) (cont’d)
Pursuant to a sale and purchase agreement dated 12 October 2009, supplemented

by a supplemental agreement dated 8 January 2010, Hunan Anchun disposed of its
entire equity interest in Anchun Biotech and the Intangible Assets to Xie Ding
Zhong (Executive Chairman and CEO), Yan Chao Jian (ex-employee), Jiang Jing
Fu (ex-employee) and Li Chun Yang (Key Executive), at a consideration of
Rmb2,000,000. The consideration, which was fully paid by June 2010, was
determined on a “willing buyer and willing seller” basis, and taking into account,
inter alia, the valuation reports dated 7 January 2010 issued by Changsha Gongli
Asset Valuation Co., Ltd. appraising the value of Anchun Biotech and the Intangible
Assets to be approximately Rmb1.9 million as at 30 September 2009. This
transaction was carried out on an arms’ length basis.
2. Summary of significant accounting policies
2.1 Basis of preparation
The combined financial statements of the Group have been prepared in accordance with
Singapore Financial Reporting Standards (“FRS”).
The financial statements have been prepared on a historical cost basis except as disclosed
in the accounting policies below.
The combined financial statements are presented in Renminbi (“Rmb”). All values are
rounded to the nearest thousand (Rmb’000) except when otherwise indicated.
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31 DECEMBER 2007, 2008 AND 2009
2. Summary of significant accounting policies (cont’d)
2.2 Changes in accounting policies
The accounting policies have been consistently applied by the Group during the financial
years ended 31 December 2007, 2008 and 2009, except for the changes in accounting
policies discussed below.
(a) Standards and interpretations mandatory for annual financial periods beginning on or
after 1 January 2007 are as follows:
• FRS 107 Financial Instruments: Disclosures

• FRS 1 Amendments to FRS 1 (Revised), Presentation of Financial Statements
(Capital Disclosures)
• FRS 40 Investment Property
• INT FRS 108 Scope of FRS 102, Share-based Payment
• INT FRS 107 Applying the Restatement Approach under FRS 29, Financial
Reporting in Hyperinflationary Economies
• INT FRS 109 Reassessment of Embedded Derivatives
• INT FRS 110 Interim Financial Reporting and Impairment
Adoption of these standards and interpretations did not have any effect on the financial
performance or position of the Group. They did however give rise to additional
disclosures, including, in some cases, revisions to accounting policies.
The principal effects of these changes are as follows:
FRS 107 Financial Instruments: Disclosures
FRS 107 introduces new disclosures to improve the information about financial
instruments. It requires the disclosure of qualitative and quantitative information about
exposure to risks arising from financial instruments, including specified minimum
disclosures about credit risk, liquidity risk and market risk, including sensitivity analysis
to market risk.
FRS 1 Amendments to FRS 1 (Revised), Presentation of Financial Statements (Capital

Disclosures)
The amendment to FRS 1 requires the Group to make new disclosures to enable
users of the financial statements to evaluate the Group’s objectives, policies and
processes for managing capital.
(b) Standards and interpretations mandatory for annual financial periods beginning on or
• INT FRS 111 FRS 102 – Group and Treasury Share Transactions
• INT FRS 112 Service Concession Arrangements
• INT FRS 114 FRS 19 – The Limit on a Defined Benefit Asset, Minimum Funding
Requirements and their Interaction
Adoption of these standards and interpretations did not have any effect on the
financial performance or position of the Group.
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31 DECEMBER 2007, 2008 AND 2009
2.2 Changes in accounting policies (cont’d)
(c) Standards and interpretations mandatory for annual financial periods beginning on or
• FRS 1 Presentation of Financial Statements (Revised)

• Amendments to FRS 18 Revenue
• Amendments to FRS 23 Borrowing Costs
• Amendments to FRS 32 Financial Instruments: Presentation and FRS 1
Presentation of Financial Statements – Puttable Financial Instruments and
Obligations Arising on Liquidation
• Amendments to FRS 101 First-time Adoption of Financial Reporting Standards
and FRS 27 Consolidated and Separate Financial Statements – Cost of an
Investment in a Subsidiary, Jointly Controlled Entity or Associate
• Amendments to FRS 102 Share-based Payment – Vesting Conditions and
Cancellations
• Amendments to FRS 107 Financial Instruments: Disclosures
• FRS 108 Operating Segments
• Improvements to FRSs issued in 2008
• INT FRS 113 Customer Loyalty Programmes
• INT FRS 116 Hedges of a Net Investment in a Foreign Operation
• Amendments to INT FRS 109 Reassessment of Embedded Derivatives and FRS
39 Financial Instruments: Recognition and Measurement – Embedded
Derivatives
• INT FRS 118 Transfers of Assets from Customers
Adoption of these standards and interpretations did not have any effect on the financial
performance or position of the Group. They did however give rise to additional
disclosures, including, in some cases, revisions to accounting policies.
The principal effects of these changes are as follows:
FRS 1 Presentation of Financial Statements – Revised presentation
The revised FRS 1 separates owner and non-owner changes in equity. The statement
of changes in equity includes only details of transactions with owners, with all non-
owner changes in equity presented in the statement of other comprehensive income.
In addition, the Standard introduces the statement of comprehensive income which
presents income and expense recognised in the period. This statement may be
presented in one single statement, or two linked statements. The Group has elected to
present this statement as one single statement. The Group has early adopted the
revised FRS 1 on 1 January 2007.
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31 DECEMBER 2007, 2008 AND 2009
Amendments to FRS 23 Borrowing Costs
FRS 23 has been revised to require capitalisation of borrowing costs that are directly
attributable to the acquisition, construction or production of a qualifying asset. The Group’s
previous policy was to expense borrowing costs as they were incurred. The Group has
amended its accounting policy based on the revised FRS 23. In accordance with the
transitional provisions of the Standard, the Group has adopted this as a prospective
change. The amendments to FRS 23 do not have any impact on the financial statements
as during the financial years ended 31 December 2007, 2008 and 2009, no borrowing costs
have been capitalised on property, plant and equipment.
Amendments to FRS 107 Financial Instruments: Disclosures
The amendments to FRS 107 require additional disclosure about fair value measurement
and liquidity risk. Fair value measurements are to be disclosed by source of inputs using a
three level hierarchy for each class of financial instrument. In addition, reconciliation
between the beginning and ending balance for Level 3 fair value measurements is now
required, as well as significant transfers between Level 1 and Level 2 fair value
measurements. The amendments also clarify the requirements for liquidity risk disclosures.
The fair value measurement disclosures and liquidity risk disclosures are presented in Note
31 and Note 32 to the financial statements respectively. The Group has early adopted the
revised FRS 1 on 1 January 2007.
FRS 108 Operating Segments
FRS 108 requires disclosure of information about the Group’s operating segments and
replaces the requirement to determine primary and secondary reporting segments of the
Group. Disclosures about each of the segments are shown in Note 29.
The Group has early adopted Amendments to FRS 108, Operating Segments which is to
be effective for the accounting periods beginning on or after 1 January 2010. Amendments
to FRS 108 requires disclosure of a measure of total assets for each reportable segment
only if such an amount is regularly provided to the entity’s chief operating decision maker.
Improvements to FRSs issued in 2008
In 2008, the Accounting Standards Council issued an omnibus of amendments to FRS.

There are separate transitional provisions for each amendment. The adoption of the
following amendments resulted in changes to accounting policies but did not have any
impact on the financial position or performance of the Group:
x FRS 1 Presentation of Financial Statements: Assets and liabilities classified as held for
trading in accordance with FRS 39 Financial Instruments: Recognition and
Measurement are not automatically classified as current in the balance sheet. The
Group amended its accounting policy accordingly and analysed whether management’s
expectation of the period or realisation of financial assets and liabilities differs from the
classification of the instrument. This did not result in any re-classification of financial
instruments between current and non-current in the balance sheet.
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31 DECEMBER 2007, 2008 AND 2009
Improvements to FRSs issued in 2008 (cont’d)
x FRS 16 Property, Plant and Equipment: Replaces the term “net selling price” with “fair
value less costs to sell”. The Group amended its accounting policy accordingly, which
did not result in any change in the financial position.
x FRS 23 Borrowing Costs: The definition of borrowing costs is revised to consolidate the
two types of items that are considered components of “borrowing costs’ into one – the
interest expense calculated using the effective interest rate method calculated in
accordance with FRS 39. The Group has amended its accounting policy accordingly
which did not result in any change in its financial position.
2.3 Standards issued but not yet effective
The Group has not adopted the following FRS and INT FRS that have been issued but not
yet effective:
Effective for annual
periods beginning
Description on or after
Amendments to FRS 27 Consolidated and Separate Financial 1 July 2009

Statements
Amendments to FRS 39 Financial Instruments: Recognition and 1 July 2009
Measurement – Eligible Hedged Item
Revised FRS 103 Business Combinations 1 July 2009
Amendments to FRS 105 Non-current Assets Held for Sale and 1 July 2009
Discontinued Operations
INT FRS 117 Distributions of Non-cash Assets to Owners 1 July 2009
Improvements to FRSs issued in 2009:
– Amendments to FRS 38 Intangible Assets 1 July 2009
– Amendments to FRS 102 Share-based Payment 1 July 2009
– Amendments to INT FRS 109 Reassessment of Embedded 1 July 2009
Derivatives
– Amendments to INT FRS 116 Hedges of a Net Investment in a 1 July 2009
Foreign Operation
– Amendments to FRS 1 Presentation of Financial Statements 1 January 2010
– Amendments to FRS 7 Statement of Cash Flows 1 January 2010
– Amendments to FRS 17 Leases 1 January 2010
– Amendments to FRS 36 Impairment of Assets 1 January 2010
– FRS 39 Financial Instruments: Recognition and Measurement 1 January 2010
– Amendments to FRS 101 Additional Amendments for First-time 1 January 2010
Adopters
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31 DECEMBER 2007, 2008 AND 2009
2.3 Standards issued but not yet effective (cont’d)

periods beginning
– Amendments to FRS 102 Share-based Payment – Amendment 1 January 2010
relating to Group Cash-settled Share-based Payment
Transactions
– Amendments to FRS 105 Non-current Assets Held for Sale and 1 January 2010
Discontinued Operations
– Amendments to FRS 32 Financial Instruments: Disclosure and 1 February 2010
Presentation – Amendment relating to Classification of Rights
Issues
Revised FRS 24 Related Party Disclosures 1 January 2011
INT FRS 119 Extinguishing Financial Liabilities with Equity 1 July 2010
Instruments
Amendments to INT FRS 114 Prepayments of a Minimum Funding 1 January 2011
Requirement
Except for the revised FRS 103 and the amendments to FRS 27, the directors expect
that the adoption of the other standards and interpretations above will have no material
impact on the financial statements in the period of initial application. The nature of the
impending changes in accounting policy on adoption of the revised FRS 103 and the
amendments to FRS 27 are described below.
Revised FRS 103 Business Combinations and Amendments to FRS 27 Consolidated

and Separate Financial Statements
The revised standards are effective for annual periods beginning on or after 1 July
2009. The revised FRS 103 introduces a number of changes in the accounting for
business combinations occurring after 1 July 2009. These changes will impact the
amount of goodwill recognised, the reported results in the period that an acquisition
occurs, and future reported results. The Amendments to FRS 27 require that a change
in the ownership interest of a subsidiary (without loss of control) is accounted for as an
equity transaction. Therefore, such transactions will no longer give rise to goodwill, nor
will they give rise to a gain or loss. Furthermore, the amended standard changes the
accounting for losses incurred by the subsidiary as well as the loss of control of a
subsidiary. Other consequential amendments were made to FRS 7 Statement of Cash
Flows, FRS 12 Income Taxes, FRS 21 The Effects of Changes in Foreign Exchange
Rates, FRS 28 Investments in Associates and FRS 31 Interests in Joint Ventures. The
changes from revised FRS 103 and Amendments to FRS 27 will affect future
acquisitions or loss of control and transactions with minority interests. The standards
may be early applied. However, the Group does not intend to early adopt.
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31 DECEMBER 2007, 2008 AND 2009
2.4 Basis of consolidation
The combined financial statements comprise the financial statements of the Company and
its subsidiaries as at the balance sheet date. The financial statements of the subsidiaries
used in the preparation of the combined financial statements are prepared for the same
reporting date as the Company. Consistent accounting policies are applied for like
transactions and events in similar circumstances.
All intra-group balances, transactions, income and expenses and profits and losses
resulting from intra-group transactions that are recognised in assets are eliminated in full.
the pooling of interest method as the Group is a continuation of the existing subsidiary’s
business. The assets and liabilities of the Company and its subsidiary are reflected at their
carrying amounts reported in the combined financial statements. Any difference between
the consideration and the share capital of the subsidiary acquired is reflected within equity
as merger reserve. The statement of comprehensive income reflects the results of the
Company and its subsidiary for the entire periods under review.
Consolidation of the subsidiary in the PRC is based on the subsidiary’s financial statements
prepared in accordance with FRS. Profits reflected in the financial statements prepared in
accordance with FRS may differ from those reflected in the PRC statutory financial
statements of the subsidiary, prepared for PRC reporting purposes. In accordance with the
relevant laws and regulations, profits available for distribution by the PRC subsidiary is
based on the amounts stated in the PRC statutory financial statements.
2.5 Functional and foreign currency
(a) Functional currency
The Group’s principal operations are conducted in the PRC. The management has
determined the currency of the primary economic environment in which the Group
operates, i.e. functional currency, to be Renminbi (“Rmb”). Sales prices and major
costs of providing goods and services including major operating expenses are primarily
influenced by fluctuations in Rmb. The functional currency of the Company is Renminbi
(“Rmb”).
(b) Foreign currency transactions
Transactions in foreign currencies are measured in the respective functional currencies

of the Company and its subsidiaries and are recorded on initial recognition in the
functional currencies at exchange rates approximating those ruling at the transaction
dates. Monetary assets and liabilities denominated in foreign currencies are translated
at the rates of exchange ruling at the balance sheet date. Non-monetary items that are
measured in terms of historical cost in a foreign currency are translated using the
exchange rates as at the dates of the initial transactions. Non-monetary items
measured at fair value in a foreign currency are translated using the exchange rates at
the date when the fair value was determined.
Exchange differences arising on the settlement of monetary items or on translating

monetary items at the balance sheet date are recognised in profit or loss.
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31 DECEMBER 2007, 2008 AND 2009
2.6 Property, plant and equipment
All items of property, plant and equipment are initially recorded at cost. The cost of an item
of property, plant and equipment is recognised as an asset if, and only if, it is probable that
future economic benefits associated with the item will flow to the Group and the cost of the
item can be measured reliably.
Subsequent to recognition, property, plant and equipment are stated at cost less
accumulated depreciation and any accumulated impairment losses. When significant parts
of property, plant and equipment are required to be placed in intervals, the Group
recognises such parts as individual assets with specific useful lives and depreciation,
respectively. Likewise, when a major inspection is performed, its cost is recognised in the
carrying amount of the plant and equipment as a replacement if the recognition criteria are
satisfied. All other repair and maintenance costs are recognised in profit or loss as incurred.
Depreciation of an asset begins when it is available for use and is computed on a straight-
line basis over the estimated useful life of the assets as follows:
Years
Buildings 20
Plant and machinery 3 - 10
Office equipment and furniture 5
Motor vehicles 5
Assets under construction relates to buildings and plant and machinery which are
depreciated only when they become available for use.
The carrying values of property, plant and equipment are reviewed for impairment when
events or changes in circumstances indicate that the carrying values may not be
recoverable.
The residual value, useful life and depreciation method are reviewed at each financial year-
end, and adjusted prospectively, if appropriate.
An item of property, plant and equipment is derecognised upon disposal or when no future
economic benefits are expected from its use or disposal. Any gain or loss arising on
derecognition of the asset is included in profit or loss in the year the asset is derecognised.
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31 DECEMBER 2007, 2008 AND 2009
2.7 Intangible assets
Intangible assets acquired separately are measured initially at cost. The cost of intangible
assets acquired in a business combination is their fair values as at the date of acquisition.
Following initial recognition, intangible assets are measured at cost less any accumulated
amortisation and any accumulated impairment losses.
Intangible assets with finite useful lives are amortised on a straight-line basis over their
estimated useful lives and assessed for impairment whenever there is an indication that the
intangible asset may be impaired. The amortisation period and the amortisation method are
reviewed at least at each financial year-end. Changes in the expected useful life or the
expected pattern of consumption of future economic benefits embodied in the asset is
accounted for by changing the amortisation period or method, as appropriate, and are
treated as changes in accounting estimates. The amortisation expense on intangible assets
with finite lives is recognised in profit or loss in the expense category consistent with the
function of the intangible asset.
Intangible assets with indefinite useful lives or not yet available for use are tested for
impairment annually, or more frequently if events and circumstances indicate that the
carrying value may be impaired either individually or at the cash-generating unit level. Such
intangible assets are not amortised. The useful life of an intangible asset with an indefinite
useful life is reviewed annually to determine whether the useful life assessment continues
to be supportable. If not, the change in useful life from indefinite to finite is made on a
prospective basis.
Gains or losses arising from derecognition of an intangible asset are measured as the
difference between the net disposal proceeds and the carrying amount of the asset and are
recognised in profit or loss when the asset is derecognised.
Computer software
Computer software is measured at cost less accumulated amortisation and any impairment
loss. It is amortised on a straight-line basis over its estimated useful life of 3 years.
2.8 Land use rights
Land use rights are initially measured at cost. Following initial recognition, land use rights
are measured at cost less accumulated amortisation and accumulated impairment losses.
The land use rights are amortised over the lease term of 50 years.
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31 DECEMBER 2007, 2008 AND 2009
2.9 Impairment of non-financial assets
The Group assesses at each reporting date whether there is an indication that an asset
may be impaired. If any such indication exists, or when annual impairment assessment for
an asset is required, the Group makes an estimate of the asset’s recoverable amount.
An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s fair

value less costs to sell and its value in use and is determined for an individual asset, unless
the asset does not generate cash inflows that are largely independent of those from other
assets. In assessing value in use, the estimated future cash flows expected to be
generated by the asset are discounted to their present value using a pre-tax discount rate
that reflects current market assessments of the time value of money and the risks specific
to the asset. In determining fair value less costs to sell, an appropriate valuation model is
used. These calculations are corroborated by valuation multiples, quoted share prices for
publicly traded subsidiaries or other available fair value indicators. Where the carrying
amount of an asset exceeds its recoverable amount, the asset is written down to its
recoverable amount.
Impairment losses are recognised in profit or loss except for assets that are previously
revalued where the revaluation was taken to other comprehensive income. In this case the
impairment is also recognised in other comprehensive income up to the amount of any
previous revaluation.
An assessment is made at each reporting date as to whether there is any indication that
previously recognised impairment losses may no longer exist or may have decreased. A
previously recognised impairment loss is reversed only if there has been a change in the
estimates used to determine the asset’s recoverable amount since the last impairment loss
was recognised. If that is the case, the carrying amount of the asset is increased to its
recoverable amount. That increase cannot exceed the carrying amount that would have
been determined, net of depreciation, had no impairment loss been recognised previously.
Such reversal is recognised in profit and loss unless the asset is measured at revalued
amount, in which case the reversal is treated as a revaluation increase.
2.10 Subsidiaries
A subsidiary is an entity over which the Group has the power to govern the financial and
operating policies so as to obtain benefits from its activities.
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31 DECEMBER 2007, 2008 AND 2009
2.11 Related parties
A party is related to an entity if:
(a) directly, or indirectly through one or more intermediaries, the party:
(i) controls is controlled by, or is under common control with, the entity (this includes
parents, subsidiaries and fellow subsidiaries);
(ii) has an interest in the entity that gives it significant influence over the entity; or
(iii) has joint control over the entity;
(b) the party is an associate (as defined in FRS 28 Investments in Associates) of the
entity;
(c) the party is a joint venture in which the entity is a venturer (see FRS 31 Interests in
Joint Ventures);
(d) the party is a member of the key management personnel of the entity or its parent;
(e) the party is a close member of the family of any individual referred to in (a) or (d);
(f) the party is an entity that is controlled, jointly controlled or significantly influenced by,
or for which significant voting power in such entity resides with, directly or indirectly,
any individual referred to in (d) or (e); or
(g) the party is a post-employment benefit plan for the benefit of employees of the entity,
or of any entity that is a related party of the entity.
2.12 Financial assets
Financial assets are recognised on the balance sheet when, and only when, the Group
becomes a party to the contractual provisions of the financial instrument.
When financial assets are recognised initially, they are measured at fair value, plus, in the
case of financial assets not at fair value through profit or loss, directly attributable
transaction costs.
A financial asset is derecognised where the contractual right to receive cash flows from the
asset has expired. On derecognition of a financial asset in its entirety, the difference
between the carrying amount and the sum of the consideration received and any
cumulative gain or loss that has been recognised directly in other comprehensive income is
recognised in profit or loss.
All regular way purchases and sales of financial assets are recognised or derecognised on
the trade date i.e. the date that the Group commits to purchase or sell the asset. Regular
way purchases or sales are purchases or sales of financial assets that require delivery of
assets within the period generally established by regulation or convention in the
marketplace concerned.
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31 DECEMBER 2007, 2008 AND 2009
2.12 Financial assets (cont’d)
Loans and receivables
Financial assets with fixed or determinable payments that are not quoted in an active
market are classified as loans and receivables. Subsequent to initial recognition, loans and
receivables are measured at amortised cost using the effective interest method. Gains and
losses are recognised in profit or loss when the loans and receivables are derecognised or
impaired, and through the amortisation process.
Available-for-sale financial assets
Available-for-sale financial assets are financial assets that are not classified in any of the
other categories. After initial recognition, available-for-sale financial assets are measured at
fair value. Any gains or losses from changes in fair value of the financial asset are
recognised in other comprehensive income, except that impairment losses, foreign
exchange gains and losses on monetary instruments and interest calculated using the
effective method are recognised in profit or loss. The cumulative gain or loss previously
recognised in other comprehensive income is reclassified from equity to profit or loss as a
reclassification adjustment when the financial asset is derecognised.
Investments in equity instruments whose fair value cannot be reliably measured are
measured at cost less impairment loss.
2.13 Impairment of financial assets
The Group assesses at each balance sheet date whether there is any objective evidence
that a financial asset or group of financial assets is impaired.
(a) Assets carried at amortised cost
If there is objective evidence that an impairment loss on financial assets carried at

amortised cost has been incurred, the amount of the loss is measured as the
difference between the asset’s carrying amount and the present value of estimated
future cash flows discounted at the financial asset’s original effective interest rate.
The carrying amount of the asset is reduced through the use of an allowance
account. The impairment loss is recognised in profit or loss.
When the asset becomes uncollectible, the carrying amount of impaired financial
assets is reduced directly or if an amount was charged to the allowance account,
the amounts charged to the allowance account are written off against the carrying
value of the financial asset.
To determine whether there is objective evidence that an impairment loss on

financial assets has been incurred, the Group considers factors such as the
probability of insolvency or significant financial difficulties of the debtor and default
or significant delay in payments.
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31 DECEMBER 2007, 2008 AND 2009
2.13 Impairment of financial assets (cont’d)
(a) Assets carried at amortised cost (cont’d)
If in a subsequent period, the amount of the impairment loss decreases and the
decrease can be related objectively to an event occurring after the impairment was
recognised, the previously recognised impairment loss is reversed to the extent
that the carrying amount of the asset does not exceed its amortised cost at the
reversal date. The amount of reversal is recognised in profit or loss.
(b) Assets carried at cost
If there is objective evidence (such as significant adverse changes in the business

environment where the issuer operates, probability of insolvency or significant
financial difficulties of the issuer) that an impairment loss on financial assets carried
at cost has been incurred, the amount of the loss is measured as the difference
between the asset’s carrying amount and the present value of estimated future
cash flows discounted at the current market rate of return for a similar financial
asset. Such impairment losses are not reversed in subsequent periods.
(c) Available-for-sale financial assets
Significant or prolonged decline in fair value below cost, significant financial

difficulties of the issuer or obligor, and the disappearance of an active trading
market are considerations to determine whether there is objective evidence that
investment securities classified as available-for-sale financial assets are impaired.
If an available-for-sale financial asset is impaired, an amount comprising the

difference between its cost (net of any principal payment and amortisation) and its
current fair value, less any impairment loss previously recognised in profit or loss, is
transferred from equity to profit or loss. Reversals of impairment losses on debt
instruments are recognised in profit or loss if the increase in fair value of the debt
instrument can be objectively related to an event occurring after the impairment
loss was recognised in profit or loss.
2.14 Cash and cash equivalents
Cash and cash equivalents comprise cash and bank balances and bank deposits. Cash
equivalents are short-term, highly liquid investments that are readily convertible to known
amounts of cash and which are subject to an insignificant risk of changes in value.
2.15 Inventories
Inventories are valued at the lower of cost and net realisable value. Costs incurred in
bringing each product to its present location and condition are accounted for as follows:
Raw materials: purchase cost on a weighted average basis
Finished goods and work-in-progress: cost of direct materials and a proportion of

manufacturing overheads based on normal operating capacity but excluding borrowing
costs. These costs are assigned on a first-in first-out basis.
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31 DECEMBER 2007, 2008 AND 2009
2.15 Inventories (cont’d)
When necessary, allowance is provided for damaged, obsolete and slow-moving items to
adjust for the carrying amount of inventories to the lower of cost and net realisable value.
Net realisable value is the estimated selling price in the ordinary course of business, less
estimated costs of completion and the estimated costs necessary to make the sale.
2.16 Provisions
Provisions are recognised when the Group has a present obligation as a result of a past
event, it is probable that an outflow of economic resources will be required to settle the
obligation and the amount of the obligation can be estimated reliably.
Provisions are reviewed at each balance sheet date and adjusted to reflect the current best
estimate. If it is no longer probable that an outflow of economic resources will be required
to settle the obligation, the provision is reversed. If the effect of the time value of money is
material, provisions are discounted using a current pre tax rate that reflects, where
appropriate, the risks specific to the liability. When discounting is used, the increase in the
provision due to the passage of time is recognised as a finance cost.
2.17 Financial liabilities
Financial liabilities within the scope of FRS 39 are recognised on the balance sheet when,
and only when, the Group becomes a party to the contractual provisions of the financial
instrument.
Financial liabilities are recognised initially at fair value, plus, in the case of financial
liabilities other than derivatives, directly attributable transaction costs.
Subsequent to initial recognition, derivatives are measured at fair value. Other financial
liabilities (except for financial guarantees) are measured at amortised cost using the
effective interest method.
For financial liabilities other than derivatives, gains and losses are recognised in profit or
loss when the liabilities are derecognised, and through the amortisation process. Any gains
or losses arising from changes in fair value of derivatives are recognised in the income
statement. Net gains or losses on derivatives include exchange differences.
A financial liability is derecognised when the obligation under the liability is extinguished.
When an existing financial liability is replaced by another from the same lender on
substantially different terms, or the terms of an existing liability are substantially modified,
such an exchange or modification is treated as a derecognition of the original liability and
the recognition of a new liability, and the difference in the respective carrying amounts is
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31 DECEMBER 2007, 2008 AND 2009
2.18 Borrowing costs
Borrowing costs are capitalised as part of the cost of a qualifying asset if they are directly
attributable to the acquisition, construction or production of that asset. Capitalisation of
borrowing costs commences when the activities to prepare the asset for its intended use or
sale are in progress and the expenditures and borrowing costs are incurred. Borrowing
costs are capitalised until the assets are substantially completed for their intended use or
sale.
2.19 Convertible loans
When convertible loans are issued, the liability component and the equity component are
separately presented on the balance sheet. On initial recognition, the embedded derivative
component of the convertible loan is measured at its fair value and presented as part of
derivative financial instruments. The loan component is recognised at its fair value
determined using a market interest rate for equivalent non-convertible bonds. The carrying
amount of the equity instrument represented by the option to convert the instrument into
ordinary shares is determined by deducting the fair value of the financial liability (including
the embedded derivative) from the fair value of the compound financial instrument as a
whole.
The derivative is subsequently measured at fair value through profit or loss and the loan is
subsequently measured at amortised cost using the effective interest method. The equity
component is not remeasured subsequently.
On conversion, the financial liability component (including the embedded derivative) is

derecognized with a corresponding recognition of share capital. The original equity
component remains as equity (although it may be transferred from one line item within
equity to another). There is no gain or loss on conversion at maturity.
2.20 Government grants
Grant income is received from the local PRC government at a discretionary amount as
determined by the government. It is recognised at its fair value where there is reasonable
assurance that the grant will be received and all attaching conditions will be complied with.
When the grant relates to an expense item, it is recognised in profit or loss over the period
necessary to match it on a systematic basis to the costs that it is intended to compensate.
When the grant relates to an asset, the fair value is recognised as deferred grant income
on the balance sheet and is amortised to profit or loss over the expected useful life of the
relevant asset by equal annual instalments.
2.21 Research costs
Research costs are expensed as incurred.
A-29

31 DECEMBER 2007, 2008 AND 2009
2.22 Employee benefits
(a) Defined contribution plans - pension benefits
The Group participates in the national pension schemes as defined by the laws of the
countries in which it has operations.
The subsidiaries in the PRC are required to provide certain staff pension benefits to
their employees under existing PRC regulations. Pension contributions are provided at
rates stipulated by PRC regulations and are contributed to a pension fund managed by
government agencies, which are responsible for administering these amounts for the
subsidiaries’ employees.
Pension contributions are recognised as an expense in the period in which the related
services are performed.
(b) Employee share-based payment
On 31 December 2008, the Company’s subsidiary, Hunan Anchun Advanced

Technology Co., Ltd. (“Hunan Anchun”) declared Rmb 24,140,000 of dividends to 314
existing shareholders out of which Rmb 19,312,000 was settled in the form of
19,312,000 new shares issued to these 314 shareholders in proportion to their
shareholding. In addition, one of the shareholders subsequently distributed 620,000 of
the new shares that he received to 88 new shareholders who are employees of Hunan
Anchun.
The grant date is the date of distribution of the shares to the 88 new shareholders. A
valuation exercise was carried out to estimate what the price of those shares would
have been on the measurement date in an arm’s length transaction between
knowledgeable, willing parties. The valuation technique shall be consistent with
generally accepted valuation methodologies for pricing financial instruments, and shall
incorporate all factors and assumptions that knowledgeable, willing market participants
would consider in setting the price. There is no vesting period as the shares are issued
on grant date. The amount of employee expense to be recognised in profit or loss is
computed using the grant date fair value and the number of shares vested, with a
corresponding increase in equity.
2.23 Revenue
Revenue is recognised to the extent that it is probable that the economic benefits will flow
to the Group and the revenue can be reliably measured. Revenue is measured at the fair
value of consideration received or receivable.
(a) Sale of goods
Revenue from sale of goods is recognised upon the transfer of significant risk and
rewards of ownership of the goods to the customers. Revenue is not recognised to
the extent where there are significant uncertainties regarding recovery of the
consideration due, associated costs or the possible return of goods. Retention
sum, representing 5% of the total contract amount, which will be payable upon the
maturity of defects liability period of 12 months, is recognised as revenue at the
end of the retention period.
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31 DECEMBER 2007, 2008 AND 2009
2.23 Revenue (cont’d)
(b) Rendering of services
Revenue from providing chemical engineering and technology (“CET”) design

services is recognised by reference to the stage of completion at the balance sheet
date. Stage of completion is determined by reference to labour hours incurred to
date as a percentage of total estimated labour hours for each contract. Where the
contract outcome cannot be measured reliably, revenue is recognised to the extent
of the expenses recognised that are recoverable. Retention sum, representing 5%
of the total contract amount, which will be payable upon the maturity of defects
liability period of 12 months, is recognised as revenue at the end of the retention
period.
(c) Interest income
Interest income is recognised using the effective interest method.
(d) Dividend income
Dividend income is recognised when the Group’s right to receive payment is

established.
2.24 Income taxes
(a) Current tax
Current tax assets and liabilities for the current and prior periods are measured at
the amount expected to be recovered from or paid to the taxation authorities. The
tax rates and tax laws used to compute the amount are those that are enacted or
substantively enacted by the balance sheet date.
Current taxes are recognised in profit or loss except to the extent that the tax
relates to items recognised outside profit or loss, in which case it is recognised in
other comprehensive income or directly in equity.
(b) Deferred tax
Deferred income tax is provided using the liability method on temporary differences
at the balance sheet date between the tax bases of assets and liabilities and their
carrying amounts for financial reporting purposes.
Deferred tax liabilities are recognised for all temporary differences, except:
– where the deferred income tax liability arises from the initial recognition of
goodwill or of an asset or liability in a transaction that is not a business
combination and, at the time of the transaction, affects neither accounting
profit nor taxable profit or loss; and
– in respect of taxable temporary differences associated with investments in

subsidiaries where the timing of the reversal of the temporary differences can
be controlled and it is probable that the temporary differences will not reverse
in the foreseeable future.
A-31

31 DECEMBER 2007, 2008 AND 2009
2.24 Income taxes (cont’d)
(b) Deferred tax (cont’d)
Deferred income tax assets are recognised for all deductible temporary differences,
carry forward of unused tax credits and unused tax losses, to the extent that it is
probable that taxable profit will be available against which the deductible temporary
differences, and the carry forward of unused tax credits and unused tax losses can
be utilised except:
– where the deferred income tax asset relating to the deductible temporary
difference arises from the initial recognition of an asset or liability in a
transaction that is not a business combination and, at the time of the
transaction, affects neither accounting profit nor taxable profit or loss; and
– in respect of deductible temporary differences associated with investments in

subsidiaries, associates and interests in joint ventures, deferred income tax
assets are recognised only to the extent that it is probable that the temporary
differences will reverse in the foreseeable future and taxable profit will be
available against which the temporary differences can be utilised.
The carrying amount of deferred tax asset is reviewed at each balance sheet date
and reduced to the extent that it is no longer probable that sufficient taxable profit
will be available to allow all or part of the deferred tax asset to be utilised.
Unrecognised deferred tax assets are reassessed at each balance sheet date and
are recognised to the extent that it has become probable that future taxable profit
will allow the deferred tax asset to be utilised.
Deferred tax assets and liabilities are measured at the tax rates that are expected
to apply to the year when the asset is realised or the liability is settled, based on
tax rates and tax laws that have been enacted or substantively enacted at the
balance sheet date.
Deferred income tax relating to items recognised outside profit and loss is
recognised outside profit and loss. Deferred tax items are recognised in correlation
to the underlying transaction either in other comprehensive income or directly in
equity and deferred tax arising from a business combination is adjusted against
goodwill on acquisition.
Deferred income tax assets and deferred income tax liabilities are offset, if a legally
enforceable right exists to set off current tax assets against current income tax
liabilities and the deferred income taxes relate to the same taxable entity and the
same taxation authority.
A-32

31 DECEMBER 2007, 2008 AND 2009
(c) Value-added-tax (“VAT”)
The Group’s sales of goods in the PRC are subjected to VAT at the applicable tax
rate of 17% for PRC domestic sales.
Revenues, expenses and assets are recognised net of the amount of VAT except:
ƒ Where the VAT incurred on a purchase of assets or services is not

recoverable from the taxation authority, in which case the VAT is recognised
as part of the cost of acquisition of the asset or as part of the expense item as
applicable; and
ƒ Receivables and payables that are stated with the amount of VAT included.
The net amount of VAT recoverable from, or payable to, the taxation authority is
included as part of trade and other receivables or trade and other payables on the
balance sheet.
2.25 Share capital and share issue expenses
Proceeds from issuance of ordinary shares are recognised as share capital in equity.
Incremental costs directly attributable to the issuance of ordinary shares are deducted
against share capital.
2.26 Segment reporting
For management purposes, the Group is organised into operating segments based on their
products and services which are independently managed by the respective segment
managers responsible for the performance of the respective segments under their charge.
The segment managers report directly to the management of the Company who regularly
review the segment results in order to allocate resources to the segments and to assess
the segment performance. Additional disclosures on each of these segments are shown in
Note 29, including the factors used to identify the reportable segments and the
measurement basis of segment information.
2.27 Contingencies
A contingent liability or asset is a possible obligation or asset that arises from past events
and whose existence will be confirmed only by the occurrence or non-occurrence of
uncertain future event(s) not wholly within the control of the Group.
Contingent liabilities and assets are not recognised on the balance sheet of the Group.
A-33

31 DECEMBER 2007, 2008 AND 2009
3. Significant accounting estimates and judgements
The preparation of the Group's financial statements requires management to make

judgments, estimates and assumptions that affect the reported amounts of revenues,
expenses, assets and liabilities, and the disclosure of contingent liabilities, at the reporting
date. However, uncertainty about these assumptions and estimates could result in
outcomes that could require a material adjustment to the carrying amount of the asset or
liability affected in the future.
3.1 Judgements made in applying accounting policies
In the process of applying the Group’s accounting policies, management has made the
following judgements, apart from those involving estimations, which has the most
significant effect on the amounts recognised in the financial statements:
(a) Fair value of financial instruments
Where the fair values of financial instruments recorded on the balance sheet cannot be
derived from active markets, they are determined using a variety of valuation
techniques that include the use of valuation models. The inputs to these models are
derived from observable market data where possible, but where observable market
data are not available, judgement is required to establish fair values. The judgements
include considerations of liquidity and model inputs regarding the future financial
performance of the investee, its risk profile, and economic assumptions regarding the
industry and geographical jurisdiction in which the investee operates. The valuation of
financial instruments is described in more detail in Note 31.
3.2 Key sources of estimation uncertainty
The key assumptions concerning the future and other key sources of estimation uncertainty
at the balance sheet date, that have a significant risk of causing a material adjustment to
the carrying amounts of assets and liabilities within the next financial year are discussed
below.
(a) Useful lives of plant and machinery
The cost of plant and machinery is depreciated on a straight-line basis over the
estimated useful life of the assets. Management estimates the useful life of the plant
and machinery to be 3 to 10 years. This is a common life expectancy applied in the
manufacturing industry. The carrying amount of the Group’s plant and machinery as at
31 December 2007, 2008 and 2009 was Rmb 22,618,000, 42,177,000 and Rmb
45,573,000 respectively.
Changes in the expected level of usage and technological developments could impact
the economic useful life of the plant and machinery, therefore future depreciation
charges could be revised. A 5% difference in the expected useful lives of the plant and
machinery from management’s estimates would not result in any significant variance in
profit for the respective years.
A-34

31 DECEMBER 2007, 2008 AND 2009
3. Significant accounting estimates and judgements (cont’d)
3.2 Key sources of estimation uncertainty (cont’d)
(b) Impairment of loans and receivables
The Group assesses at each balance sheet date whether there is any objective
evidence that a financial asset is impaired. To determine whether there is objective
evidence of impairment, the Group considers factors such as the probability of
insolvency or significant financial difficulties of the debtor and default or significant
delay in payments.
When there is objective evidence of impairment, the amount and timing of future cash
flows are estimated based on historical loss experience for assets with similar credit
risk characteristics. The carrying amount of the Group’s loans and receivables at
balance sheet date is disclosed in Note 19 to the financial statements.
(c) Impairment of non-financial assets
The Group assesses whether there are any indicators of impairment for all non-
financial assets at each reporting date. Goodwill is tested for impairment annually and
at other times when such indicators exist. Other non-financial assets are tested for
impairment when there are indicators that the carrying amounts may not be
recoverable.
When value in use calculations are undertaken, management must estimate the
expected future cash flows from the asset or cash-generating unit and choose a
suitable discount rate in order to calculate the present value of those cash flows.
A-35

31 DECEMBER 2007, 2008 AND 2009
4. Revenue
2007 2008 2009

Rmb’000 Rmb’000 Rmb’000
Chemical systems and components

(“CSC”) Business 87,057 92,543 259,565
Catalyst Business 14,000 20,784 19,383
Chemical engineering and
technology (“CET”) Design
Services 13,722 7,616 15,883
Others 1 66 10
114,780 121,009 294,841
5. Finance and other income
2007 2008 2009

Rmb’000 Rmb’000 Rmb’000
Sales of scrap materials 888 505 82

Dividend income from investment
securities 121 9 3
Government grants 730 5,277 100
Gain on disposal of property plant and
equipment – 31 –
Gain on disposal of subsidiary – – 1,720
Interest income on bank balances 594 557 741
Others 86 37 8
2,419 6,416 2,654
A-36

31 DECEMBER 2007, 2008 AND 2009
6. Profit before tax
The following items have been included in arriving at profit before tax:
2007 2008 2009

Rmb’000 Rmb’000 Rmb’000
Amortisation of land use rights 365 365 365
Amortisation of intangible assets 56 93 124
receivables 2,079 2,406 1,154
Allowance(write-back) for impairment of
other receivables 302 (15) 447
Advertising expenses 942 1,238 150
equipment 2,685 6,207 9,765
Employee benefit expense * (Note 8) 12,429 23,185 23,721
Research expenses 9,076 8,762 8,821
Loss on disposal of property, plant and
equipment 8 – 1
* Includes directors’ remuneration and remuneration of key management personnel as

disclosed in Note 7.
7. Related party transactions
Compensation of key management personnel
2007 2008 2009

Rmb’000 Rmb’000 Rmb’000
Salaries, representing total compensation

to key management personnel 807 1,351 1,601
Comprises amounts paid to:

- Directors of the Company 543 891 1,088
- Other key management personnel 264 460 513
807 1,351 1,601
A-37

31 DECEMBER 2007, 2008 AND 2009
8. Employee benefits expense
2007 2008 2009

Rmb’000 Rmb’000 Rmb’000
Wages and salaries 11,356 17,782 17,917

Welfare expense – 1,153 3,247
Contribution to defined contribution plans 1,073 2,525 2,557
Share-based compensation expense – 1,725 –
12,429 23,185 23,721
9. Finance costs
2007 2008 2009

Rmb’000 Rmb’000 Rmb’000
Interest expense on:

- bank loans 592 1,509 1,491
- loans from employees/shareholders 490 868 614
1,082 2,377 2,105
10. Income tax expense
The major components of income tax expense for the financial years ended 31 December
2007, 2008 and 2009 are:
2007 2008 2009

Rmb’000 Rmb’000 Rmb’000
Combined statement of comprehensive

income:
Current income tax:
Current year income tax expense 5,453 4,705 13,304
Deferred income tax:

Origination and reversal of temporary
differences (312) (372) (162)
Income tax expense recognised in profit or

loss 5,141 4,333 13,142
A-38

31 DECEMBER 2007, 2008 AND 2009
10. Income tax expense (cont'd)
A reconciliation between tax expense and the product of profit before tax multiplied by the
applicable tax rate for the financial years ended 31 December 2007, 2008 and 2009 is as
follows:
2007 2008 2009

Rmb’000 Rmb’000 Rmb’000
Profit before income tax 27,859 25,637 88,303
Tax at the domestic tax rates 4,179 3,725 13,191

Tax effects of:
- expenses not deductible for tax purposes 962 308 56
- deferred tax assets not recognised – 300 153
- income not subjected to taxation – – (258)

loss 5,141 4,333 13,142
Anchun International Holdings Ltd. (the “Company”)
The Company is incorporated in Singapore and is subjected to a tax rate of 17% for
FY2009. It has no taxable income in FY2009.
Hunan Anchun Advanced Technology Co., Ltd. (“Hunan Anchun”)
According to the Enterprise Income Tax Law of the PRC, promulgated by the State Council
and the Administrative Measure for Determination of High and New Technology
Enterprises, issued by the Ministry of Science and Technology, Finance and State
Administration of Tax and effective on 1 January 2008, High and New Technology
Enterprises that require key state support are subject to the applicable enterprise income
tax rate of 15%.
According to regulations on the Tax Policy for the National New and High Technology
Industries Parks, promulgated by the State Administration of Taxation and effective on 6
March 1991, Article 4, the ratified High and New Technology Enterprises in the New and
High Technology Industries Parks approved by the State Council can be levied at a
reduced rate of 15% income tax from the date of their ratification.
Given that Hunan Anchun has received the certificate of High and New Technology
Enterprise since 2007, it enjoys the preferential income tax rate of 15% from 1 January
2007 to 31 December 2012.
Hunan Anchun Biotech Co., Ltd (“Anchun Biotech”)
Anchun Biotech has no taxable income during the financial years ended 31 December
2008 and 2009.
11. Earnings per share
Basic and diluted earnings per share is calculated by dividing the Group’s net profit
attributable to ordinary equity holders for the financial year by the pre-Invitation share
capital of 400,000,000 ordinary shares which were assumed to be in issue throughout the
entire financial years presented.
A-39

31 DECEMBER 2007, 2008 AND 2009
12. Investment in subsidiaries
The Company had the following subsidiaries as at 31 December:
Name of Country of Equity interest held by

company incorporation Principal activities the Group
2007 2008 2009

% % %
Held by the Company:
Hunan Anchun PRC High technology 100 100 100

Advanced development and
Technology transfer of
Co., Ltd. achievements for oil,
(“Hunan coal, natural gas and
Anchun”) (1) biochemical industry;
design, manufacture
and general contracting
for sale of chemical new
technological process,
new equipment
integration; projects for
energy saving and
environmental
protection; development
and sale of software
and electric products;
manufacture and sale of
chemical products
(excluding dangerous
products)
Held by Hunan Anchun:
Hunan Anchun PRC Researching and 100 100 –

Biotech Co., manufacturing of bio-
Ltd. (“Anchun products
Biotech”) (2)
(1)
Audited by Hunan Zhengyang Certified Public Accountants Co., Ltd for PRC statutory
reporting purpose.
(2)
reporting purpose.
Disposal of Anchun Biotech
On 12 October 2009, Hunan Anchun transferred all shares of Anchun Biotech to four
shareholders namely, Xie Ding Zhong, Li Chun Yang, Yan Chao Jian and Jiang Jing Fu for
a total consideration of Rmb 2,000,000. The net gain on disposal amounting to
Rmb1,720,000 has been taken to other income in 2009.
A-40

31 DECEMBER 2007, 2008 AND 2009
13. Property, plant and equipment
Plant and Office Motor Construction

Buildings machinery equipment vehicles -in- progress Total
Rmb’000 Rmb’000 Rmb’000 Rmb’000 Rmb’000 Rmb’000
31 December 2007
Cost
At the beginning of
the year 16,011 10,451 137 1,402 2,287 30,288
Additions – 16,907 557 140 24,729 42,333
Disposals – (123) – – – (123)
Reclassification 3,969 – – – (3,969) –
At the end of the

year 19,980 27,235 694 1,542 23,047 72,498
Accumulated
depreciation
At the beginning of
the year (2,475) (3,368) (41) (519) – (6,403)
Depreciation charge
for the year (1,020) (1,363) (82) (220) – (2,685)
Disposals – 114 – – – 114
At the end of the

year (3,495) (4,617) (123) (739) – (8,974)
Net carrying
amount
At the end of the
year 16,485 22,618 571 803 23,047 63,524
A-41

31 DECEMBER 2007, 2008 AND 2009
13. Property, plant and equipment (cont'd)
Office
equipment
Plant and and Motor Construction
Buildings machinery furniture vehicles -in- progress Total
31 December 2008
Cost
At the beginning of
the year 19,980 27,235 694 1,542 23,047 72,498
Additions – 23,171 1,225 1,033 28,647 54,076
Disposals – (707) – – – (707)
Reclassification 51,384 – – – (51,384) –
At the end of the

year 71,364 49,699 1,919 2,575 310 125,867
Accumulated
depreciation
At the beginning of
the year (3,495) (4,617) (123) (739) – (8,974)
Depreciation charge
for the year (2,333) (3,361) (152) (361) – (6,207)
Disposals – 456 – – – 456
At the end of the

year (5,828) (7,522) (275) (1,100) – (14,725)
Net carrying
amount
At the end of the
year 65,536 42,177 1,644 1,475 310 111,142
A-42

31 DECEMBER 2007, 2008 AND 2009
Office
equipment
Plant and and Motor Construction-
Buildings machinery furniture vehicles in- progress Total
31 December 2009
Cost
At the beginning of
the year 71,364 49,699 1,919 2,575 310 125,867
Disposal of
subsidiary – (305) (5) – – (310)
Additions 33 6,122 186 243 7,155 13,739
Disposals – (170) – – – (170)
Reclassification 126 3,135 – – (3,261) –
At the end of the

year 71,523 58,481 2,100 2,818 4,204 139,126
Accumulated
depreciation
At the beginning of
the year (5,828) (7,522) (275) (1,100) – (14,725)
Disposal of
subsidiary – 47 1 – – 48
Depreciation charge
for the year (3,391) (5,602) (376) (396) – (9,765)
Disposals – 169 – – – 169
At the end of the

year (9,219) (12,908) (650) (1,496) – (24,273)
Net carrying
amount
At the end of the
year 62,304 45,573 1,450 1,322 4,204 114,853
Assets pledged as securities
Certain buildings with a total net book value of Rmb 16,150,000, Rmb 15,220,000 and Rmb
14,289,000 as at 31 December 2007, 2008 and 2009 respectively have been mortgaged to
China Construction Bank to secure banking facilities (Note 24).
A-43

31 DECEMBER 2007, 2008 AND 2009
14. Intangible assets
2007 2008 2009

Rmb’000 Rmb’000 Rmb’000
Cost
At 1 January 193 211 426
Additions 18 215 41
At 31 December 211 426 467
Accumulated amortisation
At 1 January (51) (107) (200)
Amortisation charge for the year (56) (93) (124)
At 31 December (107) (200) (324)
Net carrying amount

At 31 December 104 226 143
Intangible assets pertain to computer software purchased from vendors. The amortisation
of intangible asset is included in the “Administrative expenses” line item in the statement of
comprehensive income.
15. Land use rights
2007 2008 2009

Rmb’000 Rmb’000 Rmb’000
Cost
At 1 January 18,271 18,271 18,271
Additions – – –
At 31 December 18,271 18,271 18,271
At 1 January (544) (909) (1,274)
Amortisation charge for the year (365) (365) (365)
At 31 December (909) (1,274) (1,639)
Net carrying amount

At 31 December 17,362 16,997 16,632
Amount to be amortised:
- Not later than one year 365 365 365
- Later than one year but not later
than five years 1,461 1,461 1,461
- Later than five years 15,536 15,171 14,806
The Group has land use rights over three plots of state-owned land in the People’s
Republic of China (PRC) where the Group’s PRC manufacturing and storage facilities
reside. As at 31 December 2007, 2008 and 2009, the remaining amortisation periods for
land use rights are 46 years, 45 years and 44 years respectively.
A-44

31 DECEMBER 2007, 2008 AND 2009
15. Land use rights (cont’d)
Land use rights with net carrying amounts of Rmb 11,564,000, Rmb 11,323,000 and Rmb
11,082,000 as at 31 December 2007, 2008 and 2009 respectively have been mortgaged to
China Construction Bank to secure banking facilities (Note 24).
16. Deferred tax assets/liabilities
Deferred income tax arises as a result of:
2007 2008 2009

Rmb’000 Rmb’000 Rmb’000
Deferred tax assets

receivables 312 684 846
The movement in the deferred tax assets during the financial years is as follows:
Rmb’000
At 1 January 2007 –
Credit to profit or loss 312
At 31 December 2007 and 1 January 2008 312


At 31 December 2009 846
Deferred tax liabilities
On 22 February 2008, the State Administration of Taxation of China issued a circular

Caishui [2008] No.001, which imposes withholding tax on distribution of dividends from
post 1 January 2008 profits to foreign investors. Accordingly, no deferred tax liabilities arise
from undistributed profits of the Company’s PRC subsidiaries accumulated up till 31
December 2007. Provision for deferred tax liabilities however, would be required on profits
accumulated from 1 January 2008 onwards.
The accumulated profits of Hunan Anchun as at 31 December 2008 were fully distributed to
the PRC shareholders of Hunan Anchun in FY2009 prior to the completion of the
acquisition of Hunan Anchun by the Company. Accordingly, no deferred tax liabilities is
required to be provided on the accumulated profits of Hunan Anchun as at 31 December
2008.
Deferred tax liabilities of approximately Rmb 2,410,000 have not been recognised for taxes
that would be payable on the distribution of the undistributed earnings of Hunan Anchun for
the financial year ended 31 December 2009 as the Group has determined that the
undistributed earnings of Hunan Anchun will not be distributed in the foreseeable future.
A-45

31 DECEMBER 2007, 2008 AND 2009
17. Investment securities
2007 2008 2009

Rmb’000 Rmb’000 Rmb’000
Non-current:
- Equity instruments (quoted) 931 800 933
18. Inventories
2007 2008 2009

Rmb’000 Rmb’000 Rmb’000
Balance sheet:
Raw materials, at cost 25,058 25,360 18,591
Work-in-progress, at cost 40,824 98,978 28,056
Finished goods, at cost 35,960 75,520 49,184
Total inventories, at cost 101,842 199,858 95,831
Statement of comprehensive income:

Inventories recognised as an expense in
cost of sales 51,909 54,349 141,928
During the financial years ended 31 December 2007, 2008 and 2009, there has been no
inventory written off or allowance for inventory obsolescence.
A-46

31 DECEMBER 2007, 2008 AND 2009
19. Trade and other receivables
2007 2008 2009

Rmb’000 Rmb’000 Rmb’000
Trade receivables 9,680 3,079 10,833

Bills receivables 8,825 13,569 7,959
VAT receivables 10,002 26,024 10,449
Amount due from shareholders – – 2,000
Amount due from pre-IPO investors – – 14,580
Amount due from director-related company – – 745
Others 565 1,252 789
29,072 43,924 47,355

Add:
Cash and cash equivalents (Note 21) 54,357 44,425 88,410
Total loans and receivables 83,429 88,349 135,765
Trade receivables are non-interest bearing and are normally settled on 90 to 180 days’
terms. They are recognised at their original invoiced amounts which represent their fair
values on initial recognition.
Trade receivables
Trade receivables that are past due but not impaired
As at 31 December 2009, the Group has trade receivables amounting to Rmb 2,533,000
(2008: Rmb 1,499,000 and 2007: Rmb 2,057,000) that were past due but not impaired.
These trade receivables are unsecured and the analysis of their aging at the balance sheet
date is as follows:
2007 2008 2009

Rmb’000 Rmb’000 Rmb’000
Trade receivables past due:

1 - 360 days 6 301 1,108
1 year to 2 years 185 – 788
More than 2 years 1,866 1,198 637
2,057 1,499 2,533
A-47

31 DECEMBER 2007, 2008 AND 2009
19. Trade and other receivables (cont'd)
Trade receivables that are impaired
The Group’s trade receivables that are impaired at the balance sheet date and the
movement of the allowance accounts used to record the impairment are as follows:
2007 2008 2009

Rmb’000 Rmb’000 Rmb’000
Trade receivables at nominal amounts 2,079 4,485 5,639

Less: allowance for impairment of trade
receivables (2,079) (4,485) (5,639)
– – –
Movement in the allowance account during the financial years are as follows:
2007 2008 2009

Rmb’000 Rmb’000 Rmb’000
At beginning of financial year – 2,079 4,485

Charge for the year 2,079 2,406 1,154
At end of financial year 2,079 4,485 5,639
Trade receivables that are individually determined to be impaired at the balance sheet date
relate to debtors that are in significant financial difficulties and have defaulted on payments.
These receivables are not secured by any collateral or credit enhancements.
Bills receivables
Bills receivables are interest-free and have maturity periods of approximately 90 days.
Amount due from shareholders
Amount due from shareholders relates to the sale consideration of Anchun Biotech which
has not been received as at 31 December 2009.
Amount due from pre-IPO investors
Amount due from pre-IPO investors relates to payment to the existing shareholders of
Hunan Anchun on behalf of pre-IPO investors which was funded from the proceeds of the
convertible loan (Note 24). This is for partial purchase consideration payable by the pre-
IPO investors to the then existing shareholders of Hunan Anchun for their shareholdings in
the Group. The amount is interest-free, and repayable on demand.
Amount due from director-related company
Amount due from director-related company relates to operating expenses paid on behalf of
Anchun Biotech by Hunan Anchun.
A-48

31 DECEMBER 2007, 2008 AND 2009
20. Prepayments
2007 2008 2009

Rmb’000 Rmb’000 Rmb’000
Non-current
Prepayments relating to acquisition of
property, plant and equipment 5,456 6,100 6,131
Current
Prepayments to trade suppliers 12,569 5,361 7,317
Prepaid operating expenses 3,070 1,683 3,787
Prepaid listing expenses – – 457
Less: Allowance for impairment (336) (321) (768)
15,303 6,723 10,793
Movement in the allowance account during the financial years are as follows:
2007 2008 2009

Rmb’000 Rmb’000 Rmb’000
At beginning of financial year 34 336 321

Charge(write-back) for the year 302 (15) 447
At end of financial year 336 321 768
21. Cash and cash equivalents
2007 2008 2009

Rmb’000 Rmb’000 Rmb’000
Cash at banks and on hand 53,857 44,425 88,410

Fixed deposits 500 – –
Cash and cash equivalents 54,357 44,425 88,410
Cash at banks earns interest at floating rates based on daily bank deposit rates. Short term
deposits are made for a period of three months depending on the immediate cash
requirements of the Group, and earn interest at the respective short term deposit rates.
A-49

31 DECEMBER 2007, 2008 AND 2009
22. Trade and other payables
2007 2008 2009

Rmb’000 Rmb’000 Rmb’000
Trade payables 6,174 4,492 5,896

Deferred revenue 4,689 942 1,241
Dividends payables 1,230 1,270 48,000
Payables to suppliers of property, plant and
equipment 7,037 15,278 5,837
Loans from employees 1,810 1,811 –
Loans from shareholders 4,947 5,655 798
Amount due to related company (non-trade) – – 102
Withholding tax on dividends – 4,828 4,828
Other operating tax payables 5 65 450
Other payables 1,172 1,422 2,148
27,064 35,763 69,300

Add:
Other liabilities (Note 23) 3,496 6,223 9,061
Loans and borrowings (Note 24) 25,800 16,500 33,945
Total financial liabilities carried at amortised

cost 228,259 357,006 272,336
Trade payables
Trade payables are non-interest bearing and are normally settled on 30 to 60 days’ term.
Loans from employees/shareholders
Loans from employees/shareholders in FY2007 and FY2008 bear interest rates ranging
from 6% to 8% per annum and are repayable on demand.
Loans from shareholders in FY2009 relates to loan from Vision Top Holdings Ltd, a
shareholder of the Company, for working capital purposes. These loans are interest free
and repayable on demand.
Amount due to related company (non-trade)
These relates to expenses paid by OneEquity SG Pte Ltd, a director-related company, on

behalf of the Company.
Other payables
Other payables are non-interest bearing and have an average term of six months.
A-50

31 DECEMBER 2007, 2008 AND 2009
23. Other liabilities
2007 2008 2009

Rmb’000 Rmb’000 Rmb’000
Accrued salaries and bonus 2,702 4,845 7,154

Accrued welfare expenses 564 1,073 1,582
Accrued interest expenses 230 305 325
3,496 6,223 9,061
24. Loans and borrowings
2007 2008 2009

Rmb’000 Rmb’000 Rmb’000
Current:
China Construction Bank1 – – 12,000
China Construction Bank2 9,300 9,300 7,200
9,300 9,300 19,200
Non-current:
China Construction Bank2 16,500 7,200 –
Convertible loan3 – – 14,745
16,500 7,200 14,745
Total loans and borrowings 25,800 16,500 33,945
1
The short-term bank loan bears interest at CHIBOR + 10% per annum and is
secured by land use rights with carrying amount of approximately Rmb 11,082,000
as at 31 December 2009 (Note 15) and certain buildings with carrying amount of
approximately Rmb 14,289,000 as at 31 December 2009 (Note 13). The maturity
date of the short term bank loan is within twelve months from the financial year end.
2
These long-term loans bear interest at CHIBOR and is secured by certain land use
rights with carrying amount of approximately Rmb 11,564,000, Rmb 11,323,000 and
Rmb 11,082,000 as at 31 December 2007, 2008 and 2009 respectively (Note 15)
and certain buildings with carrying amount of approximately Rmb 16,150,000, Rmb
15,220,000 and Rmb 14,289,000 as at 31 December 2007, 2008 and 2009
respectively (Note 13). These loans are repayable every quarter and will mature in
2010.
3
In connection with the Restructuring Exercise, a Pre-IPO Investor, Vision Top
Holdings Limited (“the Investor”), Existing Shareholders of the Company and the
Company entered into a convertible loan agreement dated 22 December 2009
pursuant to which the investor agreed to advance an aggregate sum of RMB
80,000,000 to the Company. The Loan is intended for use by the Company for the
purposes to fund the Restructuring and for working capital purposes.
A-51

31 DECEMBER 2007, 2008 AND 2009
24. Loans and borrowings (cont’d)
The terms of the convertible loan shall commence from the drawdown date and
expire on 30 June 2011 (the “Final Maturity” or “IPO Target Date”) or upon
conversion of the Loan Facility.
Compensation costs shall be payable by the Company to the Investor in the following
manner:
(a) In the event that the Company is not successfully listed in Singapore (for
reasons other than the Company’s decision not to apply for an IPO) before
Final Maturity, compensation costs (net of any withholdings, taxes or any
other applicable deductions) at the annual rate of 5.0% per annum;
(b) In event that the Company is granted an Eligibility-To-List letter (the “ETL”)
from SGX for an IPO through a public listing on the SGX-ST but chooses not
to carry out the IPO before the IPO Target Date, or upon the occurrence of a
material breach by any of the Warrantors of any of the terms, conditions,
covenants, warranties, representations or undertakings (including the
occurrence of any Event of Default) under this Agreement, compensation
costs (net of any withholdings, taxes or any other applicable deductions) at
the annual rate of 20.0% per annum on the full principal amount of RMB80
million; and
(c) All compensation costs shall be cumulative and calculated on the basis of
the actual days elapsed and a 365-day year, commencing from the relevant
funding date in respect of each portion of the principal amount disbursed
above up to the repayment date.
Rmb 5,000,000 of the loan shall be automatically converted into Eight Hundred (800)
fully paid new ordinary shares (“New Shares”) of the Company, to be allotted and
issued to the Investor, within five (5) Business Days from the issuance of the written
notice (the “Automatic Conversion Notice”) by the Company to the Investor informing
the Company’s receipt of the Eligibility-to-List (“ETL”) from SGX-ST (the “Automatic
Conversion”). In the event that the ETL has not been received by the IPO Target
Date, the Investor shall have the option (but not the obligation) to nevertheless covert
the Principal Amount into the New Shares and the Company shall allot and issue the
New Shares to the Investor and/or its nominees.
The remaining Rmb 75,000,000 will be used to pay the existing shareholders of
Hunan Anchun as puchase consideration for the IPO investors’ shareholding in the
Group.
A-52

31 DECEMBER 2007, 2008 AND 2009
24. Loans and borrowings (cont’d)
As of 31 December 2009, Rmb 15,000,000 of the convertible loan has been drawn
down. No amounts of the convertible loan have been converted to shares or repaid to
the Investor.
The carrying amount of the liability component of the convertible loan at the balance
sheet date is arrived at as follows:
2007 2008 2009
Rmb’000 Rmb’000 Rmb’000
Face value of convertible loan – – 15,000
Fair value of derivative financial
instrument at date of drawdown
(Note 25) – – (34)
Equity component (Note 27) – – (221)
Liability component of convertible

loan at initial recognition and at the
year end – – 14,745
25. Derivative financial instrument
Details of the derivative financial instrument are as follows:
2007 2008 2009

Rmb’000 Rmb’000 Rmb’000
Derivative financial instrument at initial
recognition – – 34
Fair value adjustment – – –
Derivative financial instrument at year end – – 34
Derivative component of the convertible loan relates to the investors’ right to receive
compensation at the annual rate of 20% per annum in the event that the Company is
granted the Eligibility-to-List from SGX but chooses not to carry out the IPO.
The fair value of the derivative financial instrument as at 31 December 2009 approximates
the value at initial recognition, hence no fair value adjustment is made.
A-53

31 DECEMBER 2007, 2008 AND 2009
26. Share capital
2007 2008 2009

Rmb’000 Rmb’000 Rmb’000
Share capital of Hunan Anchun
At 1 January 12,300 12,300 32,000
Additional paid-in-capital by existing
shareholders – 388 –
Reinvestment of dividends declared to
existing shareholders (Note 28) – 19,312 –
– 19,7001 –
At 31 December 12,300 32,000 32,000
Share capital of the Company

At date of incorporation (29 October
2009) and at 31 December 2009 – – 452
Combined balance sheets

Share capital of Hunan Anchun 12,300 32,000 32,000
Share capital of the Company – – 45
Exercise – – (32,000)3
Share capital at 31 December 12,300 32,000 45
1
On 31 December 2008, the existing shareholders of Hunan Anchun made an
additional capital contribution of Rmb 388,000 and on the same day, dividends
amounting to Rmb 19,312,000 declared to the then existing shareholders of Hunan
Anchun was reinvested into Hunan Anchun.
2
The ordinary shares of the Company have no par value. All issued ordinary shares
are fully paid. The holders of ordinary shares are entitled to receive dividends as
and when declared by the Company. All ordinary shares carry one vote per share
without restrictions.
3
Pursuant to the completion of the Acquisition as disclosed in Note 1.2(c) in 2009,
the share capital of Hunan Anchun is adjusted to merger reserve based on the
“pooling of interest method”.
A-54

31 DECEMBER 2007, 2008 AND 2009
27. Other reserves
2007 2008 2009

Rmb’000 Rmb’000 Rmb’000
Fair value adjustment reserve 631 500 633

Statutory reserve fund 6,150 13,990 23,731
Convertible loan reserve – – 221
Contribution from shareholder – 1,725 1,725
Merger reserve – – 32,000
6,781 16,215 58,310
(a) Fair value adjustment reserve
Fair value adjustment reserve represents the cumulative fair value changes, net of tax,
of available-for-sale financial assets until they are disposed of or impaired.
(b) Statutory reserve fund
In accordance with the Foreign Enterprise Law applicable to entities in the People’s
Republic of China (PRC), the Company’s PRC subsidiaries are required to make
appropriation to a Statutory Reserve Fund (SRF). At least 10% of the statutory after tax
profits as determined in accordance with the applicable PRC accounting standards and
regulations must be allocated to the SRF until the cumulative total of the SRF reaches
50% of the subsidiary’s registered capital. Subject to approval from the relevant PRC
authorities, the SRF may be used to offset any accumulated losses or increase the
registered capital of the subsidiary. The SRF is not available for dividend distribution to
share holders.
2007 2008 2009

Rmb’000 Rmb’000 Rmb’000
At 1 January 4,433 6,150 13,990

Transferred from accumulated profits 1,717 7,840 9,741
At 31 December 6,150 13,990 23,731
(c) Convertible loan reserve
The convertible loan reserve is made up of two components, namely:
(i) the investors’ right to receive additional shares from existing shareholders in the
event that the Company fails to meet certain pre-determined profit targets for
the financial years ended 31 December 2009 and 31 December 2010; and
(ii) the conversion feature of the convertible loan, which is the residual value after
deducting the fair value of the liability component, embedded derivative
component and the equity component as mentioned in (i) above from the face
value of the convertible loan at inception.
A-55

31 DECEMBER 2007, 2008 AND 2009
27. Other reserves (cont’d)
(d) Contribution from shareholder
Contribution from shareholder represents the shares given by a shareholder to

employees.

Anchun. There is no vesting period as the shares are issued on grant date, which is the
date of distribution of the shares to the 88 new shareholders.
The fair value of the 620,000 shares was assessed by an independent valuer by using
the Market Approach to arrive at the fair value of the shares. The Market Approach
includes using Guideline Public Companies Multiples such as price-earnings ratio to
capitalise an estimated future maintainable income. Based on the valuer’s analysis, the
fair value of the 620,000 shares granted was determined to be Rmb 1,725,000.
Accordingly, the aggregate fair value of the shares granted to the 88 new shareholders,
amounting to Rmb 1,725,000 has been recognised in profit or loss for the financial year
ended 31 December 2008.
The following table lists the inputs to the model used for valuation of the shares granted
on 31 December 2008:
Earnings (Rmb) 21,193,000

PE Ratio 6
Discount rate 30%
Number of shares 32,000,000
Fair value per share (Rmb) 2.78
(e) Merger reserve
Pursuant to the completion of the Restructuring Exercise as disclosed in Note 1.2(c) in

2009, the share capital of Hunan Anchun is adjusted to merger reserve based on the
28. Dividends
2007 2008 2009

Rmb’000 Rmb’000 Rmb’000
Dividends declared to the then existing

shareholders of Hunan Anchun 1,230 25,4101 48,000
1
Dividends amounting to Rmb 19,312,000 declared to the then existing shareholders of
Hunan Anchun on 31 December 2008 was reinvested into Hunan Anchun on the same
day (Note 26).
A-56

31 DECEMBER 2007, 2008 AND 2009
29. Segment information
For management purposes, the Group is organised into business units based on their
products and services, and has three reportable operating segments as follows:
(i) Catalyst Business
The catalyst business segment involves manufacturing of a variety of catalysts for

use in the process of gas-making, ammonia synthesis and methanol synthesis.
(ii) Chemical engineering and technology (“CET”) Design Services
This segment involves providing chemical systems engineering and technology

design services for the production of ammonia and methanol related products such
as agriculture fertilisers and biodiesel which are mainly used in the agriculture and
energy industries.
(iii) Chemical systems and components (“CSC”) Business
This segment involves manufacturing of chemical equipment designed by the

chemical engineering and technology consultancy services department.
(iv) Others
This relates to sale of health products by Anchun Biotech which was disposed of in
2009 (Note 12).
Except as indicated above, no operating segments have been aggregated to form the
above reportable operating segments.
Management monitors the operating results of its business units separately for the purpose
of making decisions about resource allocation and performance assessment. Segment
performance is evaluated based on gross profit or loss.
Segment assets and liabilities are not disclosed as they are not regularly provided to the
chief operating decision maker.
Transfer prices between operating segments are on an arm’s length basis in a manner
similar to transactions with third parties.
A-57

31 DECEMBER 2007, 2008 AND 2009
29. Segment information (cont’d)
Catalyst CET Design

Business Services CSC Business Others Total
Rmb’000 Rmb’000 Rmb’000 Rmb’000 Rmb’000
31 December 2007
Revenue
External
customers 14,001 13,722 87,057 – 114,780
Total
revenue 14,001 13,722 87,057 – 114,780
Results:
Segment
gross profit 8,196 12,040 32,295 – 52,531
Depreciation
of property,
plant and
equipment (2,685)
Amortization
of
intangible
assets (56)
Amortization
of land use
rights (365)
Allowance
for
impairment
of trade
receivables (2,079)
Allowance
for
impairment
of other
receivables (302)
Finance
costs (1,082)
Finance
income 594
Unallocated
expenses,
net (18,697)
Profit before
tax 27,859
A-58

31 DECEMBER 2007, 2008 AND 2009
Catalyst CET Design

31 December 2008
Revenue
External
customers 20,820 7,616 92,543 30 121,009
Total
revenue 20,820 7,616 92,543 30 121,009
Results:
Segment
gross profit 11,036 7,090 38,489 (24) 56,591
Depreciation
of property,
plant and
equipment (6,207)
Amortisation
of
intangible
assets (93)
Amortisation
of land use
rights (365)
Allowance
for
impairment
of trade
receivables (2,406)
Write-back
for
impairment
of other
receivables 15
Finance
costs (2,377)
Finance
income 557
Unallocated
expenses,
net (20,078)
Profit before
tax 25,637
A-59

31 DECEMBER 2007, 2008 AND 2009
Catalyst CET Design

31 December 2009
Revenue
External
customers 19,382 15,883 259,566 10 294,841
Total
revenue 19,382 15,883 259,566 10 294,841
Results:
Segment
gross profit 8,139 13,669 97,016 (22) 118,802
Depreciation
of property,
plant and
equipment (9,765)
Amortisation
of
intangible
assets (124)
Amortisation
of land use
rights (365)
Allowance
for
impairment
of trade
receivables (1,154)
Allowance
for
impairment
of other
receivables (447)
Finance
costs (2,105)
Finance
income 741
Unallocated
expenses,
net (17,280)
Profit before
tax 88,303
A-60

31 DECEMBER 2007, 2008 AND 2009
Geographical information
No geographical information is provided as the principal assets employed by the Group are
located in the PRC and the Group’s revenue and profits are derived primarily from
customers in the PRC.
Information about major customers
During the financial year ended 31 December 2009, revenue from the Group’s customers
who accounted for more than 10% of the Group’s sales amounted to Rmb 85,291,000
(2008: Rmb Nil and 2007: Rmb 35,616,000).
30. Commitments
Capital expenditure contracted for as at balance sheet dates but not recognised in the
financial statements is as follows:
2007 2008 2009

Rmb’000 Rmb’000 Rmb’000
Commitment in respect of purchase

contracts entered into for:
Property, plant and equipment 1,295 – 2,224
Raw materials 1,419 180 9,280
2,714 180 11,504
31. Fair value of financial instruments
The fair value of a financial instrument is the amount at which the instrument could be
exchanged or settled between knowledgeable and willing parties in an arm’s length
transaction, other than in a forced liquidation or sale.
(a) Fair value of financial instruments that are carried at fair value
Fair value hierarchy
The Group classifies fair value measurement using a fair value hierarchy that reflects
the significance of the inputs used in making the measurements. The fair value
hierarchy has the following levels:
x Level 1 – Quoted prices (unadjusted) in active markets for identical assets or

liabilities
x Level 2 – Inputs other than quoted prices included within Level 1 that are
observable for the asset or liability either directly (i.e., as prices) or indirectly (i.e.,
derived from prices); and
x Level 3 – Inputs for the assets or liability that are not based on observable market
data (unobservable inputs)
A-61

31 DECEMBER 2007, 2008 AND 2009
31. Fair value of financial instruments (cont’d)
(a) Fair value of financial instruments that are carried at fair value (cont’d)
The following table shows an analysis of financial instruments carried at fair value by
level of fair value hierarchy:
2007 2008 2009

Rmb’000 Rmb’000 Rmb’000
Quoted prices in active markets for identical
investments (Level 1)
Financial assets:
Available-for-sale financial assets (Note 17)
- Investment securities 931 800 933
2007 2008 2009

Rmb’000 Rmb’000 Rmb’000
Significant unobservable inputs (Level 3)
Financial liabilities:
Derivative financial instrument (Note 25) – – 34
Determination of fair value
Quoted equity instruments (Note 17): Fair value is determined directly by reference to
their published market bid prices as the balance sheet date.
Derivative financial instrument (Note 25): Fair value is determined using a valuation
technique based on probability of the Company being granted ETL from SGX but
chooses not to carry out the IPO that is not supportable by observable market data.
(b) Fair value of financial instruments by classes that are not carried at fair value and
whose carrying amounts are a reasonable approximation of fair value
Trade and other receivables (Note 19), cash and cash equivalents (Note 21), trade and
other payables (Note 22) and loans and borrowings (Note 24)
The carrying amounts of these financial assets and liabilities are a reasonable
approximation of fair values, either due to their short term nature or that they are
floating rate instruments that are repriced to market interest rates on or near the
balance sheet date.
A-62

31 DECEMBER 2007, 2008 AND 2009
32. Financial risk management objectives and policies
The Group is exposed to financial risks arising from its operations and the use of financial
instruments. The key financial risks include interest rate risk, liquidity risk and credit risk.
The management reviews and agrees policies and procedures for the management of
these risks. It is, and has been throughout the years under review, the Group’s policy that
no trading in derivative financial instruments shall be undertaken.
The following sections provide details regarding the Group’s exposure to the above-
mentioned risks and the objectives, policies, and processes for the management of these
risks.
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of the Group’s financial
instruments will fluctuate because of changes in market interest rates. The Group’s
exposure to interest rate risk arises primarily from its floating rate cash at bank balances
and loans and borrowings. The Group obtains additional financing through funding from
shareholders. The Group’s policy is to obtain the most favourable interest rates available.
Sensitivity analysis for interest rate risk
At the balance sheet date, if RMB interest rates had been 100 basis points lower/higher
with all other variables held constant, the Group’s net of tax would have been Rmb 243,000
(2008: Rmb 237,000 and 2009: Rmb 588,000) lower/higher, arising mainly as a result of
lower/higher interest income on floating rate cash at bank balances. The assumed
movement in basis points for interest rate sensitivity analysis is based on the currently
observable market environment, showing a significantly higher volatility than prior years.
Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting financial
obligations due to shortage of funds. The Group’s exposure to liquidity risk arises primarily
from mismatches of the maturities of financial assets and liabilities. The Group’s objective is
to maintain a balance between continuity of funding and flexibility through the use of stand-
by credit facilities.
The Group's objective is to maintain a balance between continuity of funding and flexibility
through the use of bank loans. Approximately 36%, 56% and 57% of the Group’s loans and
borrowings will mature in less than one year based on the carrying amounts reflected in the
financial statements as at 31 December 2007, 2008 and 2009 respectively.
A-63

31 DECEMBER 2007, 2008 AND 2009
32. Financial risk management objectives and policies (cont’d)
Liquidity risk (cont’d)
Analysis of financial instruments by remaining contractual maturities
The table below summarises the maturity profile of the Group's financial assets and
liabilities at 31 December 2007, 2008 and 2009 based on contractual undiscounted
repayment obligations.
One year or One to

less five years Total
Rmb’000 Rmb’000 Rmb’000
31 December 2007
Financial assets
Trade and other receivables 29,072 – 29,072
Cash and cash equivalents 54,357 – 54,357
Total undiscounted financial assets 83,429 – 83,429
Financial liabilities
Trade and other payables (27,064) – (27,064)
Advances from customers (171,899) (171,899)
Other liabilities (3,496) – (3,496)
Loans and borrowings (10,784) (17,408) (28,192)
Total undiscounted financial liabilities (213,243) (17,408) (230,651)
Total net undiscounted financial

liabilities (129,814) (17,408) (147,222)
One year or One to

Rmb’000 Rmb’000 Rmb’000
31 December 2008
Financial assets

liabilities (262,365) (7,330) (269,695)
A-64

31 DECEMBER 2007, 2008 AND 2009
Liquidity risk (cont’d)
Analysis of financial instruments by remaining contractual maturities (cont’d)
One year or One to

Rmb’000 Rmb’000 Rmb’000
31 December 2009
Financial assets

liabilities (121,997) (16,125) (138,122)
Credit risk
Credit risk is the risk of loss that may arise on outstanding financial instruments should a
counterparty default on its obligations. The Group’s exposure to credit risk arises primarily
from trade and other receivables. For other financial assets (including cash and cash
equivalents), the Group minimises credit risk by dealing exclusively with high credit rating
counterparties.
The Group’s objective is to seek continual revenue growth while minimising losses incurred
due to increased credit risk exposure. The Group trades only with recognised and
creditworthy third parties. It is the Group’s policy that all customers who wish to trade on
credit terms are subject to credit verification procedures. In addition, receivable balances
are monitored on an ongoing basis with the result that the Group’s exposure to bad debts is
not significant.
Exposure to credit risk
At the balance sheet date, the Group’s maximum exposure to credit risk is represented by
the carrying amount of each class of financial assets recognised on the balance sheets.
Credit risk concentration profile
The Group operates solely in the chemical equipment manufacturing industry sector.
As at 31 December 2009, 25.8% (2008: 5.7%; 2007: 11.1 %) of trade receivables relate to
five major customers of the Group.
A-65

31 DECEMBER 2007, 2008 AND 2009
Credit risk (cont’d)
Financial assets that are neither past due nor impaired
Trade and other receivables that are neither past due nor impaired are creditworthy debtors
with good payment record with the Group. Cash and cash equivalents that are neither past
due nor impaired are placed with or entered into with reputable financial institutions or
companies with high credit ratings and no history of default.
Financial assets that are either past due or impaired
Information regarding financial assets that are either past due or impaired is disclosed in
Note 19 (Trade and other receivables).
Foreign currency risk
The Group’s operations are primarily conducted in the PRC in Rmb. Currently, the PRC
government imposes control over foreign currencies, Rmb, the official currency in the PRC,
is not freely convertible. Enterprises operating in the PRC can enter into exchange
transactions through the People’s Bank of China or other authorised financial institutions.
As at balance sheet date, sensitivity analysis for foreign currency risk is not applicable as
the Group maintains minimal balances in foreign currency and thus has minimal exposure
to foreign currency risk.
33. Capital management
The primary objective of the Group’s capital management is to ensure that it maintains a
strong credit rating and healthy capital ratios in order to support its business and maximise
shareholder value.
The Group manages its capital structure and makes adjustments to it, in light of changes in
economic conditions. To maintain or adjust the capital structure, the Group may adjust the
dividend payment to shareholders, return capital to shareholders or issue new shares. No
changes were made in the objectives, policies or processes during the years ended 31
December 2007, 2008 and 2009.
As disclosed in Note 27, the Company’s PRC subsidiaries are required by the relevant laws
and regulations of the PRC to contribute to and maintain a non-distributable statutory
reserve fund whose utilisation is subject to approval by the relevant PRC authorities. This
externally imposed capital requirement has been complied with by the subsidiaries for the
financial years ended 31 December 2007, 2008 and 2009.
The Group monitors capital using a gearing ratio, which is net debt divided by total capital
plus net debt. The Group includes within net debt, trade and other payables, advances
from customers, other liabilities and loans and borrowings, less cash and cash equivalents.
Capital consists of equity attributable to equity holders of the Company less the above
mentioned reserve fund.
A-66

31 DECEMBER 2007, 2008 AND 2009
33. Capital management (cont’d)
2007 2008 2009

Rmb’000 Rmb’000 Rmb’000
Trade and other payables (Note 22) 27,064 35,763 69,300

Other liabilities (Note 23) 3,496 6,223 9,061
Loans and borrowings (Note 24) 25,800 16,500 33,945
Less: Cash and cash equivalents (Note 21) (54,357) (44,425) (88,410)
Net debt 173,902 312,581 183,926
Equity attributable to equity holders of the

Company 61,664 78,852 106,412
Less: Reserve fund (Note 27) (6,150) (13,990) (23,731)
Total capital 55,514 64,862 82,681
Capital and net debt 229,416 377,443 266,607
Gearing ratio 76% 83% 69%
34. Proforma financial information
The convertible loan granted by the Pre-IPO Investor to the Company shall be converted to
new shares of the Company in specified circumstances as set out in Note 24. Had the
convertible loan been converted to ordinary shares of the Company as at 31 December
2009, the net assets of the Group as at 31 December 2009 would have increased by
Rmb4,779,000.
35. Subsequent events
(i) On 3 May 2010, the Company increased its share capital from Rmb 45,000 to
Rmb240,086 by the allotment of 40,000 ordinary shares in the Company for a cash
consideration of S$40,000. These new shares rank pari passu in all respects with
the existing issued shares of the Company.
(ii) On 2 August 2010, the Company issued the conversion notices (as prescribed
capital of the Company. These new shares rank pari passu in all respects with the
existing issued shares of the Company.
A-67

31 DECEMBER 2007, 2008 AND 2009
35. Subsequent events (cont’d)
(iii) Pursuant to the written shareholders’ resolutions dated 9 September 2010 and 12
October 2010, in lieu of extraordinary general meetings, the shareholders
approved, inter-alia, the following:
(a) the sub-division of each ordinary share in the existing issued share capital
of the Company into 8,000 ordinary shares;
(b) Conversion of the Company into a public limited company and the change
of the name to “Anchun International Holdings Ltd.”;
(d) the issue of 105,000,000 New Shares pursuant to the Invitation which when
fully paid, allotted and issued, will rank pari passu in all respects with the
existing issued Shares (the "Issue of New Shares"); and
(e) that the Directors be authorised to: (i) allot and issue Shares in the
Company (other than the New Shares); and (ii) issue convertible securities
and any Shares in the Company pursuant to the conversion of such
convertible securities (whether by way of rights, bonus or otherwise) at any
time and from time to time thereafter upon such terms and conditions,
whether for cash or otherwise, and for such purposes and to such persons
as the Directors may think fit for the benefit of the Company, provided that
the aggregate number of Shares and convertible securities to be issued
pursuant to such authority shall not exceed 50% of the post-Invitation
issued shares of the Company (excluding treasury shares) and provided
that the aggregate number of Shares to be issued other than on a pro-rata
basis to the then existing shareholders of the Company shall not exceed
20% of the post-Invitation issued share capital of the Company, and, unless
revoked or varied by the Company in general meeting, such authority shall
take effect from the date of listing of the Shares on the SGX-ST and shall
continue to be in force until the conclusion of the next annual general
meeting or the date by which the next annual general meeting is required
by law or by the Articles to be held, whichever is earlier.
For the purposes of this resolution, and pursuant to Rules 806(3) and 806(4)
of the Listing Manual, “post-Invitation issued share capital” shall mean the
enlarge issued and paid-up share capital of the Company after the
completion of the Invitation after adjusting for: (i) new Shares arising from
the conversion or exercise of an convertible securities; (ii) new Shares
arising from the exercise of share options or the vesting of share awards
outstanding or subsisting at the time such authority is given, provided the
options or awards were granted in compliance with the Listing Manual; and
(iii) any subsequent consolidation or sub-division of Shares.
36. Authorisation of financial statements
The combined financial statements for the years ended 31 December 2007, 2008 and 2009
were authorised for issue in accordance with a resolution of the directors on 13 October
2010.
A-68
APPENDIX B – UNAUDITED COMBINED FINANCIAL STATEMENTS OF
ANCHUN INTERNATIONAL HOLDINGS LTD. AND ITS SUBSIDIARY FOR
THE FINANCIAL PERIOD FROM 1 JANUARY 2010 TO 31 MARCH 2010
Index Page
Statement by Directors B-2
Independent Auditors’ Report B-3
Combined Statement of Comprehensive Income B-5
Combined Balance Sheet B-6
Combined Statement of Changes in Equity B-7
Combined Statement of Cash Flows B-8
Notes to the Combined Financial Statements B-11
B-1
ANCHUN INTERNATIONAL HOLDINGS LTD. AND ITS SUBSIDIARY
STATEMENT BY DIRECTORS
We, Xie Ding Zhong and Dai Feng Yu, being two of the directors of Anchun International Holdings
Ltd. (the “Company”), do hereby state that, in the opinion of the directors,
(i) the accompanying unaudited combined financial statements together with notes thereto are
drawn up so as to present fairly, in all material respects, the state of affairs of the Group as
at 31 March 2010 and the results of the business, changes in equity and cash flows of the
Group for the period ended on that date, 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.
On behalf of the board of directors:
Xie Ding Zhong

Director
Dai Feng Yu
Director
13 October 2010
B-2
REPORT FROM THE INDEPENDENT AUDITORS IN RELATION TO THE UNAUDITED
COMBINED FINANCIAL STATEMENTS OF ANCHUN INTERNATIONAL HOLDINGS LTD. AND
ITS SUBSIDIARY FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2010 TO 31 MARCH 2010
13 October 2010
The Board of Directors

Anchun International Holdings Ltd.
1 Robinson Road
#17-00 AIA Tower
Singapore 048542
Dear Sirs
We have reviewed the accompanying unaudited combined financial statements of Anchun

International Holdings Ltd. (the "Company") and its subsidiaries (collectively, the "Group”), which
comprise the balance sheet of the Group as at 31 March 2010, the statement of changes in equity
of the Group and the statement of comprehensive income and cash flow statement of the Group for
the period then ended, and a summary of significant accounting policies and other explanatory
notes.
Management's responsibility for the financial statements
Management is responsible for the preparation and fair presentation of these interim financial
statements in accordance with Singapore Financial Reporting Standards FRS 34 Interim Financial
Reporting (“FRS 34”).
Auditors' responsibility
Our responsibility is to express a conclusion on these interim financial statements based on our
review.
Scope of Review
We conducted our review in accordance with Singapore Standard on Review Engagements 2410,
“Review of Interim Financial Information Performed by the Independent Auditor of the Entity”. A
review of interim financial information consists of making inquiries, primarily of persons responsible
for financial and accounting matters, and applying analytical and other review procedures. A review
is substantially less in scope than an audit conducted in accordance with Singapore Standards on
Auditing and consequently does not enable us to obtain assurance that we would become aware of
all significant matters that might be identified in an audit. Accordingly, we do not express an audit
opinion.
B-3
REPORT FROM THE INDEPENDENT AUDITORS IN RELATION TO THE UNAUDITED
COMBINED FINANCIAL STATEMENTS OF ANCHUN INTERNATIONAL HOLDINGS LTD. AND
ITS SUBSIDIARY FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2010 TO 31 MARCH 2010
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the
accompanying interim unaudited combined financial statements of the Group do not present fairly,
in all material respects, the financial position of the Group as at 31 March 2010 and of its results,
changes in equity and cash flows for the three-month period then ended in accordance with FRS
34.
This report has been prepared solely for inclusion in the Prospectus in connection with the
proposed listing of the Company’s shares on the Singapore Exchange Securities Trading Limited.
ERNST & YOUNG LLP

Public Accountants and
Certified Public Accountants
Singapore
Partner in charge: Max Loh Khum Whai
B-4
COMBINED STATEMENT OF COMPREHENSIVE INCOME

FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2010 TO 31 MARCH 2010
Unaudited period from

1 January 1 January
2010 to 31 2009 to 31
Note March 2010 March 2009
Rmb’000 Rmb’000
Revenue 4 67,295 104,445
Cost of sales (26,549) (64,035)
Gross profit 40,746 40,410
Other items of income

Finance and other income 5 325 21
Other items of expense

Marketing and distribution expenses (1,188) (697)
Administrative expenses (10,371) (4,600)
Finance costs 9 (346) (230)
Profit before tax 6 29,166 34,904
Income tax expense 10 (4,103) (5,248)
Profit for the period, representing total

comprehensive income attributable to equity
holders of the Company 25,063 29,656
Earnings per share attributable to equity holders of

the Company (Rmb fen per share)
Basic and diluted 11 6.27 7.41
B-5
COMBINED BALANCE SHEET

AS AT 31 MARCH 2010

Unaudited Audited
as at as at
31 March 31 December
Note 2010 2009
Rmb’000 Rmb’000
ASSETS
Non-current assets
Property, plant and equipment 13 117,219 114,853
Intangible assets 14 207 143
Land use rights 15 16,541 16,632
Deferred tax assets 16 886 846
Investment securities 17 933 933
Prepayments 20 11,123 6,131
146,909 139,538
Current assets
Inventories 18 98,601 95,831
Trade and other receivables 19 63,886 47,355
Prepayments 20 16,176 10,793
Cash and cash equivalents 21 79,853 88,410
258,516 242,389
Total assets 405,425 381,927
EQUITY AND LIABILITIES

Current liabilities
Trade and other payables 22 87,980 69,300
Other liabilities 23 3,679 9,061
Loans and borrowings 24 4,875 19,200
Income tax payable 6,600 3,145
258,692 260,736
Net current liabilities (176) (18,347)
Loans and borrowings 24 14,967 14,745
Derivative financial instrument 25 34 34
Deferred tax liabilities 16 257 –
Total liabilities 273,950 275,515
Net assets 131,475 106,412
Equity attributable equity holders of the Company

Share capital 26 45 45
Other reserves 27 101,310 58,310
Accumulated profits 30,120 48,057
Total equity 131,475 106,412
Total equity and liabilities 405,425 381,927
B-6
COMBINED STATEMENT OF CHANGES IN EQUITY

Attributable to equity holders of the Company

Share Other
Capital reserves Accumulated
(Note 26) (Note 27) profits Total equity
Rmb’000 Rmb’000 Rmb’000 Rmb’000
Unaudited
Period ended 31 March 2009
Balance at 1 January 2009 32,000 16,215 30,637 78,852
period – – 29,656 29,656
Balance at 31 March 2009 32,000 16,215 60,293 108,508
Unaudited
Period ended 31 March 2010
Balance at 1 January 2010 45 58,310 48,057 106,412
period – – 25,063 25,063
Transfer of retained earnings to share
capital of Hunan Anchun 43,000 – (43,000) –
Exercise (43,000) 43,000 – –
Balance at 31 March 2010 45 101,310 30,120 131,475
B-7
COMBINED STATEMENT OF CASH FLOWS


1 January 1 January
2010 to 31 2009 to 31
March 2010 March 2009
Rmb’000 Rmb’000
Operating activities
Profit before tax 29,166 34,904
Adjustment for:
Depreciation of property, plant and equipment 2,521 2,335
Amortisation of intangible assets 25 34
Amortisation of land use rights 91 91
Allowance for impairment of trade receivables 170 –
Finance costs 346 230
Finance income (222) (18)
Operating cash flows before changes in working

capital 32,097 37,576
Changes in working capital
(Increase) decrease in:
Inventories (2,770) 51,232
Trade and other receivables (16,701) 16,483
Prepayments (4,872) (11,883)
Increase (decrease) in:
Trade and other payables 9,087 14,458
Other liabilities (5,382) (2,878)
Total changes in working capital (25,110) (17,262)
Cash flows from operations 6,987 20,314

Interest received 222 18
Interest paid (124) (230)
Income taxes paid (434) (200)
Net cash flows from operating activities 6,651 19,902
B-8


1 January 1 January
2010 to 31 2009 to 31
Note March 2010 March 2009
Rmb’000 Rmb’000
Investing activities
Purchase of property, plant and equipment A (11,682) (15,079)
Purchase of intangible assets - software (89) (13)
Proceeds from disposal of property, plant and
equipment – 1,200
Net cash flows used in investing activities (11,771) (13,892)
Financing activities
Proceeds from loans and borrowings – 12,000
Repayment of loans and borrowings (14,325) (2,325)
Dividends paid to the then existing shareholders of
Hunan Anchun (4,800) (1,269)
Loans from shareholders 15,688 –
Repayment of loans from employees – (1,810)
Net cash (used in) generated from financing

activities (3,437) 6,596
Net (decrease) increase in cash and cash

equivalents (8,557) 12,606
Cash and cash equivalents at 1 January 88,410 44,425
Cash and cash equivalents at 31 March 21 79,853 57,031
B-9

Notes to the combined cash flow statement
A. Property, plant and equipment

1 January 1 January
2010 to 31 2009 to 31
Rmb’000 Rmb’000
Current period additions to property, plant

and equipment 4,887 4,383
Less: Payable to creditors (4,545) (5,993)
Prepayments made in prior year (6,131) (6,100)
(5,789) (7,710)
Add: Payments for prior year purchase 5,837 15,278
Prepayments made in current period 11,634 7,511
Net cash outflow for purchase of property,
plant and equipment 11,682 15,079
B-10
NOTES TO THE COMBINED FINANCIAL STATEMENTS – 31 MARCH 2010
1. Corporate information
1.1 The Company
The Company was incorporated in Singapore on 29 October 2009 under the Companies
Act as a private exempt company limited by shares under the name of Anchun Holdings
Pte Ltd. The Company was incorporated for the purpose of acquiring the existing Hunan
Anchun Advanced Technology Co., Ltd. pursuant to the Group Restructuring Exercise. On
14 September 2010, the Company was converted to a public limited company and changed
its name in connection therewith to Anchun International Holdings Ltd..
The registered office of the Company is at 1 Robinson Road, #17-00 AIA Tower, Singapore
048542 and the principal place of business of the Group is located at No. 539, Lusong
Road, Changsha National Hi-tech Industrial Development Zone, Changsha City, Hunan
Province, PRC 410205.
The principal activity of the Company is that of investment holding. The principal activities
of the subsidiaries are disclosed in Note 12.
1.2 The Restructuring Exercise
The Group was formed through the Restructuring Exercise which involved a series of
acquisitions and the rationalisation of the corporate and shareholding structure for the
purposes of the Invitation. Pursuant to the Restructuring Exercise, the Company became
the holding company of the Group.
The Restructuring Exercise involved the following steps:
(a) Establishment of the Company
The Company was incorporated on 29 October 2009 in Singapore as an

investment vehicle with an issued share capital of S$1.00, comprising 1 ordinary
share, which was held by an unrelated nominee.
(b) First share subscription in the share capital of the Company
On 3 November 2009, the unrelated nominee transferred his entire interest in the
Company to Ace Sense, which is wholly owned by Xie Ming, a US citizen. In
addition, 999 shares were allotted and issued to Sinostate Management (wholly-
owned by Ma Ong Kee, Non-Executive Director), Ace Sense (wholly-owned by Xie
Ming, Non-Executive Director, who is the daughter of Executive Chairman and
CEO, Xie Ding Zhong), Oriental Eagle (wholly-owned by Li Chun Yang, Key
Executive), Dawn Vitality (wholly-owned by Dai Feng Yu, Executive Director),
Inventive Result Enterprises (wholly-owned by Li Bin, Key Executive) and Giant
Yield Global (wholly-owned by Liang Gong Zeng, Executive Director) (collectively,
the “BVI Shareholders”), resulting in the shareholding interests in the Company
being 28.0% held by Sinostate Management, 27.0% held by Ace Sense, 13.0%
held by Oriental Eagle, 10.3% held by Dawn Vitality, 10.3% held by Inventive
Result Enterprises and 11.4% held by Giant Yield Global, respectively.
Pursuant to the Trust Agreements dated 2 November 2009, Li Chun Yang, Dai
Feng Yu, Li Bin and Liang Gong Zeng were appointed as trustees to each of
Oriental Eagle, Dawn Vitality, Inventive Result Enterprises and Giant Yield Global
to hold the shareholding interests in each of the abovementioned BVI companies in
trust for 397 beneficiaries who are existing and past employees of the Group as
well as the related persons of these employees.
B-11
ANCHUN INTERNATONAL HOLDINGS LTD. AND ITS SUBSIDIARY
Pursuant to an equity transfer agreement dated 20 November 2009, the Company

acquired the entire equity interests of Hunan Anchun from four registered
shareholders of Hunan Anchun, namely, Xie Ding Zhong (Executive Chairman and
CEO, 50.25%), Li Chun Yang (Key Executive, 16.4%), Jiang Jin Fu (an ex-
employee of Hunan Anchun, 16.4%), and Yan Chao Jian (an ex-employee of
Hunan Anchun, 16.95%) who held the shareholding interests of Hunan Anchun in
trust for 398 beneficiaries who are existing and past employees of Hunan Anchun
as well as the related persons of these employees, for a total consideration of
RMB75.0 million (the “Acquisition”). The consideration of RMB75.0 million for the
Acquisition was funded through the Convertible Loan Investment as described in
paragraph (e) below. Jiang Jing Fu and Yan Chao Jian previously held
management roles in Hunan Anchun, but had subsequently relinquished
management roles when they retired in 2009 due to their advanced age. In addition,
Jiang Jing Fu and Yan Chao Jian had never held the role of legal representative of
Hunan Anchun, where such role was held by Xie Ding Zhong since its inception.
The Acquisition was carried out on an arm’s length basis, and the purchase
consideration was based on, inter alia, the valuation of approximately RMB78.4
million by an independent valuer Hunan Rongxin Asset Valuation Co., Ltd. on 18
November 2009, which had taken into account, inter alia, the NAV of Hunan
Anchun of approximately RMB82.4 million as at 31 January 2009. The purchase
consideration was fully paid in cash by May 2010. Following the completion of the
Acquisition, Hunan Anchun became a wholly owned subsidiary of the Company.
In respect of the applicability of Article 11 of Provision 10, Haihua Yongtai Law Firm
and Jingtian Gongcheng Attorneys at Law, have opined that, pursuant to the
confirmation letters in respect of the applicable laws and regulations to the
Acquisition issued by the Committee on 9 December 2009 and Department of
given that the foreign investors, being Ma Ong Kee (a Malaysian Citizen), through
Sinostate Management, and Xie Ming (a US citizen), through Ace Sense,
collectively hold 55% of shareholding interests in the Company, and that the
Company is not set up and controlled by domestic residents, the Company does
not fall within the definition of SPV in Provision 10. Accordingly, the Acquisition
does not require any approvals from the Ministry of Commerce (the “MOC”) or the
China Security and Regulatory Commission (the “CSRC”) pursuant to Provision 10,
and Article 11 of Provision 10 does not apply to the Restructuring Exercise.
(d) Second share subscription in the share capital of the Company
On 18 December 2009, the issued and paid-up share capital of the Company was
increased to S$9,200, comprising 9,200 ordinary shares, pursuant to a cash
injection of S$8,200 by the BVI Shareholders and one new BVI company, Vision
Top Holdings Limited, which is currently controlled by Ma Ong Kee (“Vision Top”).
Accordingly, the shareholding proportion in the Company was changed to Vision
Top (6.96%), Sinostate Management (14.78%), Ace Sense (29.35%), Oriental
Eagle (14.13%), Dawn Vitality (11.2%), Inventive Result Enterprises (11.2%) and
Giant Yield Global (12.39%).
B-12
loan investment
Pursuant to a convertible loan agreement dated 22 December 2009, supplemented

by a deed of accession and ratification dated 30 April 2010, it was agreed that:-
(i) the BVI Shareholders, Vision Top, Able Gallery, China XLX, Go Power,
SkyVen, Naresh Nanubhai Desai, Wong Chao Hsiung and Quek Yiang Hang
shall subscribe for an aggregate of 40,000 ordinary shares at S$1.0 per share
in the share capital of the Company;
(ii) Vision Top, China XLX, Go Power, SkyVen, Naresh Nanubhai Desai, Wong
Chao Hsiung and Quek Yiang Hang shall invest RMB80.0 million (the “Loan”)
in the Company through a convertible loan (the “Convertible Loan
Investment”); and
(iii) the Convertible Loan shall be used for the Acquisition as described in
paragraph (c) above, and the balance shall be retained by the Group for
working capital purposes. In addition, the amount paid to the vendors of
Hunan Anchun shall be immediately transferred to Hunan Anchun as a loan.
Subsequently, through a capital injection of S$40,000, the share capital of the

Company increased from S$9,200, comprising 9,200 ordinary shares, to S$49,200,
comprising 49,200 ordinary shares on 3 May 2010, and the resultant shareholding
proportion in the Company was changed to Ace Sense (27.44%), Sinostate
Management (6.10%), Oriental Eagle (13.21%), Dawn Vitality (10.47%), Inventive
Result Enterprises (10.47%), Giant Yield Global (11.59%), Vision Top (3.03%),
Able Gallery (4.07%), China XLX (4.54%), Go Power (3.8%), SkyVen (3%), Naresh
Nanubhai Desai (1.8%), Wong Chao Hsiung (0.25%) and Quek Yiang Hang
(1)
(0.25%).
Conversion
On 2 August 2010, the Company issued the conversion notices (as prescribed
capital of the Company, which were allotted and issued to Vision Top (146 shares),
China XLX (218 shares), Go Power (182 shares), SkyVen (144 shares), Naresh
Nanubhai Desai (86 shares), Wong Chao Hsiung (12 shares) and Quek Yiang
Hang (12 shares), respectively (the “Conversion”).
Following the Conversion, the resulting shareholding structure of the Company was
Ace Sense (27.00%), Sinostate Management (6.00%), Vision Top (3.28%), Able
Gallery (4.00%), Oriental Eagle (13.00%), Dawn Vitality (10.3%), Inventive Result
Enterprises (10.3%), Giant Yield Global (11.4%), China XLX (4.90%), Go Power
(4.10%), SkyVen (3.24%), Naresh Nanubhai Desai (1.94%), Wong Chao Hsiung
(0.27%) and Quek Yiang Hang (0.27%).
(1)
Figures do not add to 100% due to rounding.
B-13
loan investment (cont’d)
It is noted that Go Power is an investment holding company incorporated in the BVI

and ultimately owned by unrelated PRC nationals. Yan Yun Hua, a PRC natural
person, holds a 12.7% beneficial interest in Go Power, with the remaining 87.3%
held in trust by Yan Yun Hua for certain beneficiaries (PRC natural persons or
entities) under a trust agreement. Accordingly, the participation of Go Power in the
Convertible Loan Investment has resulted in the change in the direct shareholding
of the Company held and controlled by non-PRC persons from 55.0% to 50.9%
after taking into account the shares issued and allotted to Go Power following the
Conversion.
In addition, Go Power currently holds 28.06% interest in China XLX, which also
participated in the Convertible Loan Investment with a direct investment interest of
4.9%. Pursuant to Section 7(4A) of the Act, as Go Power holds not less than 20%
of voting rights in China XLX, Go Power (and Yan Yun Hua) is deemed interested
in China XLX’s 4.9% shareholding interest in the Company. However China XLX is
a company dual-listed in Singapore and Hong Kong with its own self-governing
board of directors and management, and neither Go Power nor Yan Yun Hua holds
a majority interest in China XLX. Accordingly, neither Go Power nor Yan Yun Hua
is considered to have control over China XLX‘s interest in the Company.
Haihua Yongtai Law Firm has advised that since Go Power (and Yan Yun Hua) are
not related to the Company or the existing shareholders of the Company, Article 11
of Provision 10 is not applicable with respect to the interests held and controlled by
Go Power (and Yan Yun Hua) in the share capital of the Company, and the
Company is not deemed to be the SPV as defined in the Articles 39 and 40 of
Provision 10.
Notwithstanding the aboved change to the shareholding structure, Haihua Yongtai

and Jingtian Gongcheng have both provided their confirmation that the above-
mentioned change will not have any impact on their respective legal opinions that
the Acquisition does not require the approvals from MOC, and that Article 11 of
Provision 10 does not apply to the Restructuring Exercise.
Accordingly, following the Restructuring Exercise as described above, save for the
entry of Ace Sense in place of Xie Ding Zhong, and the participation of the Pre-IPO
Investors, the ultimate shareholders of the Company remained substantively the
same as those of Hunan Anchun prior to the Acquisition.
Anchun Biotech was set up by Hunan Anchun as a wholly-owned subsidiary in

December 2007 with an initial share capital of Rmb 2,000,000. It was engaged in
the business of manufacture and sales of health supplements. In order to
streamline the Group’s business and resources for the purpose of the Invitation,
Hunan Anchun decided to dispose of all its equity interest in Anchun Biotech and
transfer certain intangible assets including 6 trademarks, 1 patent and 2 production
permits for health supplements which were registered under Hunan Anchun’s name
but not relevant to Hunan Anchun’s business (the “Intangible Assets”).
B-14
(f) Disposal of Hunan Anchun Biotech Co., Ltd. (“Anchun Biotech”) (cont’d)
Pursuant to a sale and purchase agreement dated 12 October 2009, supplemented

by a supplemental agreement dated 8 January 2010, Hunan Anchun disposed of its
entire equity interest in Anchun Biotech and the Intangible Assets to Xie Ding
Zhong (Executive Chairman and CEO), Yan Chao Jian (ex-employee), Jiang Jing
Fu (ex-employee) and Li Chun Yang (Key Executive), at a consideration of
Rmb2,000,000. The consideration, which was fully paid by June 2010, was
determined on a “willing buyer and willing seller” basis, and taking into account,
inter alia, the valuation reports dated 7 January 2010 issued by Changsha Gongli
Asset Valuation Co., Ltd. appraising the value of Anchun Biotech and the Intangible
Assets to be approximately Rmb1.9 million as at 30 September 2009. This
transaction was carried out on an arms’ length basis.
2.1 Basis of preparation
Singapore Financial Reporting Standards (“FRS”).
The financial statements have been prepared on a historical cost basis except as disclosed
in the accounting policies below.
The combined financial statements are presented in Renminbi (“Rmb”). All values are
rounded to the nearest thousand (Rmb’000) except when otherwise indicated.
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2.2 Changes in accounting policies
The accounting policies have been consistently applied by the Group and are consistent
with those used in the previous financial year, except for the changes in accounting policies
discussed below.
Standards and interpretations mandatory for annual financial periods beginning on or after
1 January 2010 are as follows:
• Amendments to FRS 27 Consolidated and Separate Financial Statements

• Amendments to FRS 39 Financial Instruments: Recognition and Measurement –
Eligible Hedged Item
• Revised FRS 103 Business Combinations
• Amendments to FRS 105 Non-current Assets Held for Sale and Discontinued
Operations
• INT FRS 117 Distributions of Non-cash Assets to Owners
• Improvements to FRSs issued in 2009:
– Amendments to FRS 38 Intangible Assets
– Amendments to FRS 102 Share-based Payment
– Amendments to INT FRS 109 Reassessment of Embedded Derivatives
– Amendments to INT FRS 116 Hedges of a Net Investment in a Foreign
Operation
– Amendments to FRS 1 Presentation of Financial Statements
– Amendments to FRS 7 Statement of Cash Flows
– Amendments to FRS 17 Leases
– Amendments to FRS 36 Impairment of Assets
– FRS 39 Financial Instruments: Recognition and Measurement
– Amendments to FRS 101 Additional Amendments for First-time Adopters
– Amendments to FRS 102 Share-based Payment – Amendment relating to Group
Cash-settled Share-based Payment Transactions
– Amendments to FRS 105 Non-current Assets Held for Sale and Discontinued
Operations
Adoption of the standards and interpretations above did not have any effect on the
financial performance or position of the Group.
B-16
2.3 Standards issued but not yet effective
The Group has not adopted the following FRS and INT FRS that have been issued but not
yet effective:

periods beginning
Amendments to FRS 32 Financial Instruments: Disclosure and 1 February 2010

Presentation – Amendment relating to Classification of Rights
Issues
INT FRS 119 Extinguishing Financial Liabilities with Equity 1 July 2010
Instruments
Revised FRS 24 Related Party Disclosures 1 January 2011
Amendments to INT FRS 114 Prepayments of a Minimum Funding 1 January 2011
Requirement
The directors expect that the adoption of the above pronouncements will have no material
impact to the financial statements in the period of initial application.
2.4 Basis of consolidation
The combined financial statements comprise the financial statements of the Company and
its subsidiaries as at the balance sheet date. The financial statements of the subsidiaries
used in the preparation of the combined financial statements are prepared for the same
reporting date as the Company. Consistent accounting policies are applied for like
transactions and events in similar circumstances.
All intra-group balances, transactions, income and expenses and profits and losses
resulting from intra-group transactions that are recognised in assets are eliminated in full.
the pooling of interest method as the Group is a continuation of the existing subsidiary’s
business. The assets and liabilities of the Company and its subsidiary are reflected at their
carrying amounts reported in the combined financial statements. Any difference between
the consideration and the share capital of the subsidiary acquired is reflected within equity
as merger reserve. The statement of comprehensive income reflects the results of the
Company and its subsidiary for the entire periods under review.
Consolidation of the subsidiary in the PRC is based on the subsidiary’s financial statements
prepared in accordance with FRS. Profits reflected in the financial statements prepared in
accordance with FRS may differ from those reflected in the PRC statutory financial
statements of the subsidiary, prepared for PRC reporting purposes. In accordance with the
relevant laws and regulations, profits available for distribution by the PRC subsidiary is
based on the amounts stated in the PRC statutory financial statements.
B-17
2.5 Functional and foreign currency
(a) Functional currency
The Group’s principal operations are conducted in the PRC. The management has
determined the currency of the primary economic environment in which the Group
operates, i.e. functional currency, to be Renminbi (“Rmb”). Sales prices and major
costs of providing goods and services including major operating expenses are primarily
influenced by fluctuations in Rmb. The functional currency of the Company is Renminbi
(“Rmb”).
(b) Foreign currency transactions
Transactions in foreign currencies are measured in the respective functional currencies

of the Company and its subsidiaries and are recorded on initial recognition in the
functional currencies at exchange rates approximating those ruling at the transaction
dates. Monetary assets and liabilities denominated in foreign currencies are translated
at the rates of exchange ruling at the balance sheet date. Non-monetary items that are
measured in terms of historical cost in a foreign currency are translated using the
exchange rates as at the dates of the initial transactions. Non-monetary items
measured at fair value in a foreign currency are translated using the exchange rates at
the date when the fair value was determined.
Exchange differences arising on the settlement of monetary items or on translating

monetary items at the balance sheet date are recognised in profit or loss.
2.6 Property, plant and equipment
All items of property, plant and equipment are initially recorded at cost. The cost of an item
of property, plant and equipment is recognised as an asset if, and only if, it is probable that
future economic benefits associated with the item will flow to the Group and the cost of the
item can be measured reliably.
Subsequent to recognition, property, plant and equipment are stated at cost less
accumulated depreciation and any accumulated impairment losses. When significant parts
of property, plant and equipment are required to be placed in intervals, the Group
recognises such parts as individual assets with specific useful lives and depreciation,
respectively. Likewise, when a major inspection is performed, its cost is recognised in the
carrying amount of the plant and equipment as a replacement if the recognition criteria are
satisfied. All other repair and maintenance costs are recognised in the profit or loss as
incurred.
Depreciation of an asset begins when it is available for use and is computed on a straight-
line basis to write off the cost of property, plant and equipment over the estimated useful
life of the assets as follows:
Years
Buildings 20
Plant and machinery 3 - 10
Office equipment and furniture 5
Motor vehicles 5
Assets under construction relates to buildings and plant and machinery which are
depreciated only when they become available for use.
B-18
2.6 Property, plant and equipment (cont’d)
The carrying values of property, plant and equipment are reviewed for impairment when
events or changes in circumstances indicate that the carrying values may not be
recoverable.
The residual value, useful life and depreciation method are reviewed at each financial year-
end, and adjusted prospectively, if appropriate.
An item of property, plant and equipment is derecognised upon disposal or when no future
economic benefits are expected from its use or disposal. Any gain or loss arising on
derecognition of the asset is included in profit or loss in the year the asset is derecognised.
2.7 Intangible assets
Intangible assets acquired separately are measured initially at cost. The cost of intangible
assets acquired in a business combination is their fair values as at the date of acquisition.
Following initial recognition, intangible assets are measured at cost less any accumulated
amortisation and any accumulated impairment losses.
Intangible assets with finite useful lives are amortised on a straight-line basis over their
estimated useful lives and assessed for impairment whenever there is an indication that the
intangible asset may be impaired. The amortisation period and the amortisation method are
reviewed at least at each financial year-end. Changes in the expected useful life or the
expected pattern of consumption of future economic benefits embodied in the asset is
accounted for by changing the amortisation period or method, as appropriate, and are
treated as changes in accounting estimates. The amortisation expense on intangible assets
with finite lives is recognised in profit or loss in the expense category consistent with the
function of the intangible asset.
Intangible assets with indefinite useful lives or not yet available for use are tested for
impairment annually, or more frequently if events and circumstances indicate that the
carrying value may be impaired either individually or at the cash-generating unit level. Such
intangible assets are not amortised. The useful life of an intangible asset with an indefinite
useful life is reviewed annually to determine whether the useful life assessment continues
to be supportable. If not, the change in useful life from indefinite to finite is made on a
prospective basis.
Gains or losses arising from derecognition of an intangible asset are measured as the
difference between the net disposal proceeds and the carrying amount of the asset and are
recognised in profit or loss when the asset is derecognised.
Computer software
Computer software is measured at cost less accumulated amortisation and any impairment
loss. It is amortised on a straight-line basis over its estimated useful life of 3 years.
2.8 Land use rights
Land use rights are initially measured at cost. Following initial recognition, land use rights
are measured at cost less accumulated amortisation and accumulated impairment losses.
The land use rights are amortised over the lease term of 50 years.
B-19
2.9 Impairment of non-financial assets
The Group assesses at each reporting date whether there is an indication that an asset
may be impaired. If any such indication exists, or when annual impairment assessment for
an asset is required, the Group makes an estimate of the asset’s recoverable amount.
An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s fair

value less costs to sell and its value in use and is determined for an individual asset, unless
the asset does not generate cash inflows that are largely independent of those from other
assets. In assessing value in use, the estimated future cash flows expected to be
generated by the asset are discounted to their present value using a pre-tax discount rate
that reflects current market assessments of the time value of money and the risks specific
to the asset. In determining fair value less costs to sell, an appropriate valuation model is
used. These calculations are corroborated by valuation multiples, quoted share prices for
publicly traded subsidiaries or other available fair value indicators. Where the carrying
amount of an asset exceeds its recoverable amount, the asset is written down to its
recoverable amount.
Impairment losses are recognised in profit or loss except for assets that are previously
revalued where the revaluation was taken to other comprehensive income. In this case the
impairment is also recognised in other comprehensive income up to the amount of any
previous revaluation.
An assessment is made at each reporting date as to whether there is any indication that
previously recognised impairment losses may no longer exist or may have decreased. A
previously recognised impairment loss is reversed only if there has been a change in the
estimates used to determine the asset’s recoverable amount since the last impairment loss
was recognised. If that is the case, the carrying amount of the asset is increased to its
recoverable amount. That increase cannot exceed the carrying amount that would have
been determined, net of depreciation, had no impairment loss been recognised previously.
Such reversal is recognised in profit and loss unless the asset is measured at revalued
amount, in which case the reversal is treated as a revaluation increase.
2.10 Subsidiaries
A subsidiary is an entity over which the Group has the power to govern the financial and
operating policies so as to obtain benefits from its activities.
B-20

.
2.11 Related parties
A party is related to an entity if:
(a) directly, or indirectly through one or more intermediaries, the party:
(i) controls is controlled by, or is under common control with, the entity (this includes
parents, subsidiaries and fellow subsidiaries);
(ii) has an interest in the entity that gives it significant influence over the entity; or
(iii) has joint control over the entity;
(b) the party is an associate (as defined in FRS 28 Investments in Associates) of the
entity;
(c) the party is a joint venture in which the entity is a venturer (see FRS 31 Interests in
Joint Ventures);
(d) the party is a member of the key management personnel of the entity or its parent;
(e) the party is a close member of the family of any individual referred to in (a) or (d);
(f) the party is an entity that is controlled, jointly controlled or significantly influenced by,
or for which significant voting power in such entity resides with, directly or indirectly,
any individual referred to in (d) or (e); or
(g) the party is a post-employment benefit plan for the benefit of employees of the entity,
or of any entity that is a related party of the entity.
2.12 Financial assets
Financial assets are recognised on the balance sheet when, and only when, the Group
becomes a party to the contractual provisions of the financial instrument.
When financial assets are recognised initially, they are measured at fair value, plus, in the
case of financial assets not at fair value through profit or loss, directly attributable
transaction costs.
A financial asset is derecognised where the contractual right to receive cash flows from the
asset has expired. On derecognition of a financial asset in its entirety, the difference
between the carrying amount and the sum of the consideration received and any
cumulative gain or loss that has been recognised directly in other comprehensive income is
All regular way purchases and sales of financial assets are recognised or derecognised on
the trade date i.e. the date that the Group commits to purchase or sell the asset. Regular
way purchases or sales are purchases or sales of financial assets that require delivery of
assets within the period generally established by regulation or convention in the
marketplace concerned.
B-21
2.12 Financial assets (cont’d)
Loans and receivables
Financial assets with fixed or determinable payments that are not quoted in an active
market are classified as loans and receivables. Subsequent to initial recognition, loans and
receivables are measured at amortised cost using the effective interest method. Gains and
losses are recognised in profit or loss when the loans and receivables are derecognised or
impaired, and through the amortisation process.
Available-for-sale financial assets are financial assets that are not classified in any of the
other categories. After initial recognition, available-for-sale financial assets are measured at
fair value. Any gains or losses from changes in fair value of the financial asset are
recognised in other comprehensive income, except that impairment losses, foreign
exchange gains and losses on monetary instruments and interest calculated using the
effective method are recognised in profit or loss. The cumulative gain or loss previously
recognised in other comprehensive income is reclassified from equity to profit or loss as a
reclassification adjustment when the financial asset is derecognised.
Investments in equity instruments whose fair value cannot be reliably measured are
measured at cost less impairment loss.
2.13 Impairment of financial assets
The Group assesses at each balance sheet date whether there is any objective evidence
that a financial asset or group of financial assets is impaired.
(a) Assets carried at amortised cost
If there is objective evidence that an impairment loss on financial assets carried at

amortised cost has been incurred, the amount of the loss is measured as the
difference between the asset’s carrying amount and the present value of estimated
future cash flows discounted at the financial asset’s original effective interest rate.
The carrying amount of the asset is reduced through the use of an allowance
account. The impairment loss is recognised in profit or loss.
When the asset becomes uncollectible, the carrying amount of impaired financial
assets is reduced directly or if an amount was charged to the allowance account,
the amounts charged to the allowance account are written off against the carrying
value of the financial asset.
To determine whether there is objective evidence that an impairment loss on

financial assets has been incurred, the Group considers factors such as the
probability of insolvency or significant financial difficulties of the debtor and default
or significant delay in payments.
B-22
2.13 Impairment of financial assets (cont’d)
(a) Assets carried at amortised cost (cont’d)
If in a subsequent period, the amount of the impairment loss decreases and the
decrease can be related objectively to an event occurring after the impairment was
recognised, the previously recognised impairment loss is reversed to the extent
that the carrying amount of the asset does not exceed its amortised cost at the
reversal date. The amount of reversal is recognised in profit or loss.
(b) Assets carried at cost
If there is objective evidence (such as significant adverse changes in the business

environment where the issuer operates, probability of insolvency or significant
financial difficulties of the issuer) that an impairment loss on financial assets carried
at cost has been incurred, the amount of the loss is measured as the difference
between the asset’s carrying amount and the present value of estimated future
cash flows discounted at the current market rate of return for a similar financial
asset. Such impairment losses are not reversed in subsequent periods.
(c) Available-for-sale financial assets
Significant or prolonged decline in fair value below cost, significant financial

difficulties of the issuer or obligor, and the disappearance of an active trading
market are considerations to determine whether there is objective evidence that
investment securities classified as available-for-sale financial assets are impaired.
If an available-for-sale financial asset is impaired, an amount comprising the

difference between its cost (net of any principal payment and amortisation) and its
current fair value, less any impairment loss previously recognised in profit or loss, is
transferred from equity to profit or loss. Reversals of impairment losses on debt
instruments are recognised in profit or loss if the increase in fair value of the debt
instrument can be objectively related to an event occurring after the impairment
loss was recognised in profit or loss.
2.14 Cash and cash equivalents
Cash and cash equivalents comprise cash and bank balances and bank deposits. Cash
equivalents are short-term, highly liquid investments that are readily convertible to known
amounts of cash and which are subject to an insignificant risk of changes in value.
2.15 Inventories
Inventories are valued at the lower of cost and net realisable value. Costs incurred in
bringing each product to its present location and condition are accounted for as follows:
Raw materials: purchase cost on a weighted average basis
Finished goods and work-in-progress: cost of direct materials and a proportion of

manufacturing overheads based on normal operating capacity but excluding borrowing
costs. These costs are assigned on a first-in first-out basis.
B-23
2.15 Inventories (cont’d)
When necessary, allowance is provided for damaged, obsolete and slow-moving items to
adjust for the carrying amount of inventories to the lower of cost and net realisable value.
Net realisable value is the estimated selling price in the ordinary course of business, less
estimated costs of completion and the estimated costs necessary to make the sale.
2.16 Provisions
Provisions are recognised when the Group has a present obligation as a result of a past
event, it is probable that an outflow of economic resources will be required to settle the
obligation and the amount of the obligation can be estimated reliably.
Provisions are reviewed at each balance sheet date and adjusted to reflect the current best
estimate. If it is no longer probable that an outflow of economic resources will be required
to settle the obligation, the provision is reversed. If the effect of the time value of money is
material, provisions are discounted using a current pre tax rate that reflects, where
appropriate, the risks specific to the liability. When discounting is used, the increase in the
provision due to the passage of time is recognised as a finance cost.
2.17 Financial liabilities
Financial liabilities within the scope of FRS 39 are recognised on the balance sheet when,
and only when, the Group becomes a party to the contractual provisions of the financial
instrument.
Financial liabilities are recognised initially at fair value, plus, in the case of financial
liabilities other than derivatives, directly attributable transaction costs.
Subsequent to initial recognition, derivatives are measured at fair value. Other financial
liabilities (except for financial guarantees) are measured at amortised cost using the
effective interest method.
For financial liabilities other than derivatives, gains and losses are recognised in profit or
loss when the liabilities are derecognised, and through the amortisation process. Any gains
or losses arising from changes in fair value of derivatives are recognised in the income
statement. Net gains or losses on derivatives include exchange differences.
A financial liability is derecognised when the obligation under the liability is extinguished.
When an existing financial liability is replaced by another from the same lender on
substantially different terms, or the terms of an existing liability are substantially modified,
such an exchange or modification is treated as a derecognition of the original liability and
the recognition of a new liability, and the difference in the respective carrying amounts is
B-24
2.18 Borrowing costs
Borrowing costs are capitalised as part of the cost of a qualifying asset if they are directly
attributable to the acquisition, construction or production of that asset. Capitalisation of
borrowing costs commences when the activities to prepare the asset for its intended use or
sale are in progress and the expenditures and borrowing costs are incurred. Borrowing
costs are capitalised until the assets are substantially completed for their intended use or
sale.
2.19 Convertible loans
When convertible loans are issued, the liability component and the equity component are
separately presented on the balance sheet. On initial recognition, the embedded derivative
component of the convertible loan is measured at its fair value and presented as part of
derivative financial instruments. The loan component is recognised at its fair value
determined using a market interest rate for equivalent non-convertible bonds. The carrying
amount of the equity instrument represented by the option to convert the instrument into
ordinary shares is determined by deducting the fair value of the financial liability (including
the embedded derivative) from the fair value of the compound financial instrument as a
whole.
The derivative is subsequently measured at fair value through profit or loss and the loan is
subsequently measured at amortised cost using the effective interest method. The equity
component is not remeasured subsequently.
On conversion, the financial liability component (including the embedded derivative) is

derecognized with a corresponding recognition of share capital. The original equity
component remains as equity (although it may be transferred from one line item within
equity to another). There is no gain or loss on conversion at maturity.
2.20 Government grants
Grant income is received from the local PRC government at a discretionary amount as
determined by the government. It is recognised at its fair value where there is reasonable
assurance that the grant will be received and all attaching conditions will be complied with.
When the grant relates to an expense item, it is recognised in profit or loss over the period
necessary to match it on a systematic basis to the costs that it is intended to compensate.
When the grant relates to an asset, the fair value is recognised as deferred grant income
on the balance sheet and is amortised to profit or loss over the expected useful life of the
relevant asset by equal annual instalments.
2.21 Research costs
Research costs are expensed as incurred.
B-25
2.22 Employee benefits
(a) Defined contribution plans - pension benefits
The Group participates in the national pension schemes as defined by the laws of the
countries in which it has operations.
The subsidiaries in the PRC are required to provide certain staff pension benefits to
their employees under existing PRC regulations. Pension contributions are provided at
rates stipulated by PRC regulations and are contributed to a pension fund managed by
government agencies, which are responsible for administering these amounts for the
subsidiaries’ employees.
Pension contributions are recognised as an expense in the period in which the related
services are performed.
(b) Employee share-based payment

Anchun.
The grant date is the date of distribution of the shares to the 88 new shareholders. A
valuation exercise was carried out to estimate what the price of those shares would
have been on the measurement date in an arm’s length transaction between
knowledgeable, willing parties. The valuation technique shall be consistent with
generally accepted valuation methodologies for pricing financial instruments, and shall
incorporate all factors and assumptions that knowledgeable, willing market participants
would consider in setting the price. There is no vesting period as the shares are issued
on grant date. The amount of employee expense to be recognised in profit or loss is
computed using the grant date fair value and the number of shares vested, with a
corresponding increase in equity.
2.23 Revenue
Revenue is recognised to the extent that it is probable that the economic benefits will flow
to the Group and the revenue can be reliably measured. Revenue is measured at the fair
value of consideration received or receivable.
(a) Sale of goods
Revenue from sale of goods is recognised upon the transfer of significant risk and
rewards of ownership of the goods to the customers. Revenue is not recognised to
the extent where there are significant uncertainties regarding recovery of the
consideration due, associated costs or the possible return of goods. Retention
sum, representing 5% of the total contract amount, which will be payable upon the
maturity of defects liability period of 12 months, is recognised as revenue at the
end of the retention period.
B-26
2.23 Revenue (cont’d)
(b) Rendering of services
Revenue from providing chemical engineering and technology (“CET”) design

services is recognised by reference to the stage of completion at the balance sheet
date. Stage of completion is determined by reference to labour hours incurred to
date as a percentage of total estimated labour hours for each contract. Where the
contract outcome cannot be measured reliably, revenue is recognised to the extent
of the expenses recognised that are recoverable. Retention sum, representing 5%
of the total contract amount, which will be payable upon the maturity of defects
liability period of 12 months, is recognised as revenue at the end of the retention
period.
(c) Interest income
Interest income is recognised using the effective interest method.
(d) Dividend income
Dividend income is recognised when the Group’s right to receive payment is

established.
2.24 Income taxes
(a) Current tax
Current tax assets and liabilities for the current and prior periods are measured at
the amount expected to be recovered from or paid to the taxation authorities. The
tax rates and tax laws used to compute the amount are those that are enacted or
substantively enacted by the balance sheet date.
Current taxes are recognised in profit or loss except to the extent that the tax
relates to items recognised outside profit or loss, in which case it is recognised in
other comprehensive income or directly in equity.
(b) Deferred tax
Deferred income tax is provided using the liability method on temporary differences
at the balance sheet date between the tax bases of assets and liabilities and their
carrying amounts for financial reporting purposes.
Deferred tax liabilities are recognised for all temporary differences, except:
– where the deferred income tax liability arises from the initial recognition of
goodwill or of an asset or liability in a transaction that is not a business
combination and, at the time of the transaction, affects neither accounting
profit nor taxable profit or loss; and
– in respect of taxable temporary differences associated with investments in

subsidiaries where the timing of the reversal of the temporary differences can
be controlled and it is probable that the temporary differences will not reverse
in the foreseeable future.
B-27
(b) Deferred tax (cont’d)
Deferred income tax assets are recognised for all deductible temporary differences,
carry forward of unused tax credits and unused tax losses, to the extent that it is
probable that taxable profit will be available against which the deductible temporary
differences, and the carry forward of unused tax credits and unused tax losses can
be utilised except:
– where the deferred income tax asset relating to the deductible temporary
difference arises from the initial recognition of an asset or liability in a
transaction that is not a business combination and, at the time of the
transaction, affects neither accounting profit nor taxable profit or loss; and
– in respect of deductible temporary differences associated with investments in

subsidiaries, associates and interests in joint ventures, deferred income tax
assets are recognised only to the extent that it is probable that the temporary
differences will reverse in the foreseeable future and taxable profit will be
available against which temporary differences can be utilised.
The carrying amount of deferred tax asset is reviewed at each balance sheet date
and reduced to the extent that it is no longer probable that sufficient taxable profit
will be available to allow all or part of the deferred tax asset to be utilised.
Unrecognised deferred tax assets are reassessed at each balance sheet date and
are recognised to the extent that it has become probable that future taxable profit
will allow the deferred tax asset to be utilised.
Deferred tax assets and liabilities are measured at the tax rates that are expected
to apply to the year when the asset is realised or the liability is settled, based on
tax rates and tax laws that have been enacted or substantively enacted at the
balance sheet date.
Deferred income tax relating to items recognised outside profit and loss is
recognised outside profit and loss. Deferred tax items are recognised in correlation
to the underlying transaction either in other comprehensive income or directly in
equity and deferred tax arising from a business combination is adjusted against
goodwill on acquisition.
Deferred income tax assets and deferred income tax liabilities are offset, if a legally
enforceable right exists to set off current tax assets against current income tax
liabilities and the deferred income taxes relate to the same taxable entity and the
same taxation authority.
B-28
(c) Value-added-tax (“VAT”)
The Group’s sales of goods in the PRC are subjected to VAT at the applicable tax
rate of 17% for PRC domestic sales.
Revenues, expenses and assets are recognised net of the amount of VAT except:
▪ Where the VAT incurred on a purchase of assets or services is not

recoverable from the taxation authority, in which case the VAT is recognised
as part of the cost of acquisition of the asset or as part of the expense item as
applicable; and
▪ Receivables and payables that are stated with the amount of VAT included.
The net amount of VAT recoverable from, or payable to, the taxation authority is
included as part of trade and other receivables or trade and other payables on the
balance sheet.
2.25 Share capital and share issue expenses
Proceeds from issuance of ordinary shares are recognised as share capital in equity.
Incremental costs directly attributable to the issuance of ordinary shares are deducted
against share capital.
2.26 Segment reporting
For management purposes, the Group is organised into operating segments based on their
products and services which are independently managed by the respective segment
managers responsible for the performance of the respective segments under their charge.
The segment managers report directly to the management of the Company who regularly
review the segment results in order to allocate resources to the segments and to assess
the segment performance. Additional disclosures on each of these segments are shown in
Note 28, including the factors used to identify the reportable segments and the
measurement basis of segment information.
2.27 Contingencies
A contingent liability or asset is a possible obligation or asset that arises from past events
and whose existence will be confirmed only by the occurrence or non-occurrence of
uncertain future event(s) not wholly within the control of the Group.
Contingent liabilities and assets are not recognised on the balance sheet of the Group.
B-29
3. Significant accounting estimates and judgements
The preparation of the Group's financial statements requires management to make

judgments, estimates and assumptions that affect the reported amounts of revenues,
expenses, assets and liabilities, and the disclosure of contingent liabilities, at the reporting
date. However, uncertainty about these assumptions and estimates could result in
outcomes that could require a material adjustment to the carrying amount of the asset or
liability affected in the future.
3.1 Judgements made in applying accounting policies
In the process of applying the Group’s accounting policies, management has made the
following judgements, apart from those involving estimations, which has the most
significant effect on the amounts recognised in the financial statements:
(a) Fair value of financial instruments
Where the fair values of financial instruments recorded on the balance sheet
cannot be derived from active markets, they are determined using a variety of
valuation techniques that include the use of valuation models. The inputs to these
models are derived from observable market data where possible, but where
observable market data are not available, judgement is required to establish fair
values. The judgements include considerations of liquidity and model inputs
regarding the future financial performance of the investee, its risk profile, and
economic assumptions regarding the industry and geographical jurisdiction in
which the investee operates. The valuation of financial instruments is described in
more detail in Note 30.
3.2 Key sources of estimation uncertainty
The key assumptions concerning the future and other key sources of estimation uncertainty
at the balance sheet date, that have a significant risk of causing a material adjustment to
the carrying amounts of assets and liabilities within the next financial year are discussed
below.
(a) Useful lives of plant and machinery
The cost of plant and machinery is depreciated on a straight-line basis over the
estimated useful life of the assets. Management estimates the useful life of the
plant and machinery to be 3 to 10 years. This is a common life expectancy applied
in the manufacturing industry. The carrying amount of the Group’s plant and
machinery as at 31 March 2010 was Rmb 45,499,000 (31 December 2009: Rmb
45,573,000).
Changes in the expected level of usage and technological developments could

impact the economic useful life of the plant and machinery, therefore future
depreciation charges could be revised. A 5% difference in the expected useful lives
of the plant and machinery from management’s estimates would not result in any
significant variance in profit for the respective periods.
B-30
3. Significant accounting estimates and judgements (cont’d)
3.2 Key sources of estimation uncertainty (cont’d)
(b) Impairment of loans and receivables
The Group assesses at each balance sheet date whether there is any objective
evidence that a financial asset is impaired. To determine whether there is objective
evidence of impairment, the Group considers factors such as the probability of
insolvency or significant financial difficulties of the debtor and default or significant
delay in payments.
When there is objective evidence of impairment, the amount and timing of future
cash flows are estimated based on historical loss experience for assets with similar
credit risk characteristics. The carrying amount of the Group’s loans and
receivables at balance sheet date is disclosed in Note 19 to the financial
statements.
(c) Impairment of non-financial assets
The Group assesses whether there are any indicators of impairment for all non-
financial assets at each reporting date. Goodwill is tested for impairment annually
and at other times when such indicators exist. Other non-financial assets are tested
for impairment when there are indicators that the carrying amounts may not be
recoverable.
When value in use calculations are undertaken, management must estimate the
expected future cash flows from the asset or cash-generating unit and choose a
suitable discount rate in order to calculate the present value of those cash flows.
4. Revenue

1 January 1 January
2010 to 31 2009 to 31
Rmb’000 Rmb’000
Chemical systems and components (“CSC”)

Business 55,297 96,303
Catalyst Business 3,870 6,662
Chemical engineering and technology
(“CET”) Design Services 8,128 1,480
67,295 104,445
B-31
5. Finance and other income

1 January 1 January
2010 to 31 2009 to 31
Rmb’000 Rmb’000
Sales of scrap materials – 3

Government grants 100 –
Gain from contract penalty 3 –
Interest income on bank balances 222 18
325 21
6. Profit before tax
The following items have been included in arriving at profit before tax:

1 January 1 January
2010 to 31 2009 to 31
Rmb’000 Rmb’000
Amortisation of land use rights 91 91

Amortisation of intangible assets 25 34
receivables 170 –
Advertising expenses 346 15
equipment 2,521 2,335
Employee benefit expense * (Note 8) 4,396 6,850
Research expenses 5,865 1,738
* Includes directors’ remuneration and remuneration of key management personnel as

disclosed in Note 7.
B-32
7. Related party transactions
Compensation of key management personnel

1 January 1 January
2010 to 31 2009 to 31
Rmb’000 Rmb’000
Salaries, representing total compensation to

key management personnel 271 116
Comprises amounts paid to:

- Directors of the Company 79 65
- Other key management personnel 192 51
271 116
8. Employee benefits expense

1 January 1 January
2010 to 31 2009 to 31
Rmb’000 Rmb’000
Wages and salaries 3,328 5,783

Welfare expense 413 363
Contribution to defined contribution plans 655 704
4,396 6,850
9. Financial costs

1 January 1 January
2010 to 31 2009 to 31
Rmb’000 Rmb’000
Interest expense on:

- bank loans 124 230
- convertible loan 222 –
346 230
B-33
10. Income tax expense
The major components of income tax expense for the three-month period ended 31 March
2010 are:

1 January 1 January
2010 to 31 2009 to 31
Rmb’000 Rmb’000
Combined statement of comprehensive

income:
Current income tax:
Current year income tax expense 3,886 5,248
Deferred income tax:

Current year 217 –

loss 4,103 5,248
A reconciliation between tax expense and the product of profit before tax multiplied by the
applicable tax rate for the three-month period ended 31 March 2010 is as follows:

1 January 1 January
2010 to 31 2009 to 31
Rmb’000 Rmb’000
Profit before income tax 29,166 34,904
Tax at the domestic tax rates 4,367 5,236

Tax effects of:
- expenses not deductible for tax purposes 97 12
- non-taxable income (618) –
- Deferred tax provision relating to
withholding tax for undistributed profits of
Hunan Anchun 257 –

loss 4,103 5,248
Anchun International Holdings Ltd. (the “Company”)
The Company is incorporated in Singapore and is subjected to a tax rate of 17% for the
financial period ended 31 March 2010. It has no taxable income for the financial period.
B-34
10. Income tax expense (cont'd)
Hunan Anchun Advanced Technology Co., Ltd. (“Hunan Anchun”)
According to the Enterprise Income Tax Law of the PRC, promulgated by the State Council
and the Administrative Measure for Determination of High and New Technology
Enterprises, issued by the Ministry of Science and Technology, Finance and State
Administration of Tax and effective on 1 January 2008, High and New Technology
Enterprises that require key state support are subject to the applicable enterprise income
tax rate of 15%.
According to regulations on the Tax Policy for the National New and High Technology
Industries Parks, promulgated by the State Administration of Taxation and effective on 6
March 1991, Article 4, the ratified High and New Technology Enterprises in the New and
High Technology Industries Parks approved by the State Council can be levied at a
reduced rate of 15% income tax from the date of their ratification.
Given that Hunan Anchun has received the certificate of High and New Technology
Enterprise since 2007, it enjoys the preferential income tax rate of 15% from 1 January
2007 to 31 December 2012.
Hunan Anchun Biotech Co., Ltd (“Anchun Biotech”)
Anchun Biotech has no taxable income during the financial period ended 31 March 2009.
11. Earnings per share
Basic and diluted earnings per share is calculated by dividing the Group’s net profit
attributable to ordinary equity holders for the financial period by the pre-Invitation share
capital of 400,000,000 ordinary shares which were assumed to be in issue throughout the
entire financial periods presented.
B-35
12. Investment in subsidiaries
The Company has the following subsidiary as at 31 March 2010 and 31 December 2009:
Country of Equity interest held by the

Name of company incorporation Principal activities Group
2010 2009
% %
Held by the Company:
Hunan Anchun PRC High technology 100 100(1)

Advanced development and
Technology Co., transfer of
Ltd. (“Hunan achievements for
Anchun”) oil, coal, natural
gas and
biochemical
industry; design,
manufacture and
general
contracting for
sale of chemical
new technological
process, new
equipment
integration;
projects for energy
saving and
environmental
protection;
development and
sale of software
and electric
products;
manufacture and
sale of chemical
products
(excluding
dangerous
products)
(1)
reporting purpose.
B-36
13. Property, plant and equipment
Office
equipment
Plant and and Motor Construction
Buildings machinery furniture vehicles -in- progress Total
31 March 2010
Cost
At the beginning of
the period 71,523 58,481 2,100 2,818 4,204 139,126
Additions – 1,135 136 313 3,303 4,887
At the end of the

period 71,523 59,616 2,236 3,131 7,507 144,013
Accumulated
depreciation
At the beginning of
the period (9,219) (12,908) (650) (1,496) – (24,273)
Depreciation charge
for the period (849) (1,209) (131) (332) – (2,521)
At the end of the

period (10,068) (14,117) (781) (1,828) – (26,794)
Net carrying
amount
At the end of the
period 61,455 45,499 1,455 1,303 7,507 117,219
B-37
Office
equipment
Plant and and Motor Construction-
Buildings machinery furniture vehicles in- progress Total
31 December 2009
Cost
At the beginning of
the year 71,364 49,699 1,919 2,575 310 125,867
Disposal of
subsidiary – (305) (5) – – (310)
Additions 33 6,122 186 243 7,155 13,739
Disposals – (170) – – – (170)
Reclassification 126 3,135 – – (3,261) –
At the end of the

year 71,523 58,481 2,100 2,818 4,204 139,126
Accumulated
depreciation
At the beginning of
the year (5,828) (7,522) (275) (1,100) – (14,725)
Disposal of
subsidiary – 47 1 – – 48
Depreciation charge
for the year (3,391) (5,602) (376) (396) – (9,765)
Disposals – 169 – – – 169
At the end of the

year (9,219) (12,908) (650) (1,496) – (24,273)
Net carrying
amount
At the end of the
year 62,304 45,573 1,450 1,322 4,204 114,853
Assets pledged as securities
As at 31 March 2010, certain buildings with a total net book value of Rmb 14,056,000 (31
December 2009: Rmb 14,289,000) have been mortgaged to China Construction Bank to
secure banking facilities (Note 24).
B-38
14. Intangible assets
Rmb’000
Cost
At 1 January 2008 426
Additions 41

Additions 89
At 31 March 2010 556
At 1 January 2008 (200)
Amortisation charge for the year (124)
At 31 December 2009 and 1 January 2010 (324)

Amortisation charge for the period (25)
At 31 March 2010 (349)
Net carrying amount

At 31 December 2009 143
At 31 March 2010 207
Intangible assets pertain to computer software purchased from vendors. The amortisation
of intangible asset is included in the “Administrative expenses” line item in the statement of
comprehensive income.
B-39
15. Land use rights
Rmb’000
Cost
At 1 January 2008 18,271
Additions –
At 31 December 2009 and 1 January 2010 18,271

Additions –
At 31 March 2010 18,271
At 1 January 2008 (1,274)
Amortisation charge for the year (365)
At 31 December 2009 and 1 January 2010 (1,639)

Amortisation charge for the period (91)
At 31 March 2010 (1,730)
Net carrying amount

At 31 December 2009 16,632
At 31 March 2010 16,541
2010 2009
Amount to be amortised:
- Not later than one year 365 365
- Later than one year but not later than five years 1,461 1,461
- Later than five years 14,715 14,806
The Group has land use rights over three plots of state-owned land in the People’s
Republic of China (PRC) where the Group’s PRC manufacturing and storage facilities
reside. As at 31 March 2010 and 31 December 2009, the remaining amortisation periods
for land use rights are 43.75 years and 44 years respectively.
As at 31 March 2010, certain land use rights with net carrying amounts of Rmb 11,022,000,
(31 December 2009: Rmb 11,082,000) have been mortgaged to China Construction Bank
to secure banking facilities (Note 24).
B-40
16. Deferred tax assets / deferred tax liabilities
Deferred income tax arises as a result of:
Unaudited Audited
as at as at
2010 2009
Rmb’000 Rmb’000
Deferred tax liabilities

Withholding tax on undistributed
profits by PRC subsidiaries1 257 –
Deferred tax assets

receivables 886 846
The movement in the deferred tax assets is as follows:
Rmb’000
At 1 January 2009 684

At 31 March 2010 886
1
On 22 February 2008, the State Administration of Taxation of China issued a circular
Caishui [2008] No.001, which imposes withholding tax on distribution of dividends from
post 1 January 2008 profits to foreign investors. Accordingly, no deferred tax liabilities
arise from undistributed profits of the Company’s PRC subsidiaries accumulated up till 31
December 2007. Provision for deferred tax liabilities however, would be required on
profits accumulated from 1 January 2008 onwards.
Deferred tax liabilities of approximately Rmb 1,029,000 (31 December 2009:

Rmb2,410,000) have not been recognised for taxes that would be payable on the
distribution of the undistributed earnings of Hunan Anchun for the financial period ended
31 March 2010 as the Group has determined that the undistributed earnings of Hunan
Anchun will not be distributed in the foreseeable future.
17. Investment securities
Unaudited Audited
as at as at
2010 2009
Rmb’000 Rmb’000
Non-current:
- Equity instruments (quoted) 933 933
B-41
18. Inventories
Unaudited Audited
as at as at
2010 2009
Rmb’000 Rmb’000
Balance sheet:
Raw materials, at cost 21,291 18,591
Work-in-progress, at cost 47,119 28,056
Finished goods, at cost 30,191 49,184
Total inventories, at cost 98,601 95,831
Statement of comprehensive income:

Inventories recognised as an expense in cost
of sales 21,198 141,928
During the financial period ended 31 March 2010 and financial year ended 31 December
2009, there has been no inventory written off or allowance for inventory obsolescence.
19. Trade and other receivables
Unaudited Audited
as at as at
2010 2009
Rmb’000 Rmb’000
Trade receivables 32,532 10,833

Bills receivables 6,385 7,959
VAT receivables 6,008 10,449
Amount due from shareholders 2,000 2,000
Amount due from pre-IPO investors 14,580 14,580
Amount due from director-related company 745 745
Other receivables 1,636 789
63,886 47,355
Add:
Cash and cash equivalents (Note 21) 79,853 88,410
Total loans and receivables 143,739 135,765
Trade receivables
Trade receivables are non-interest bearing and are normally settled on 90 to 180 days’
terms. They are recognised at their original invoiced amounts which represent their fair
values on initial recognition.
B-42
Trade receivables that are past due but not impaired
As at 31 March 2010, the Group has trade receivables amounting to Rmb 6,634,000 (31
December 2009: Rmb 2,533,000) that were past due but not impaired. These trade
receivables are unsecured and the analysis of their aging at the balance sheet date is as
follows:
Unaudited Audited
as at as at
2010 2009
Rmb’000 Rmb’000
Trade receivables past due:

1 - 360 days 6,004 1,108
1 year to 2 years 630 788
More than 2 years – 637
6,634 2,533
Trade receivables that are impaired
The Group’s trade receivables that are impaired at the balance sheet date and the
movement of the allowance accounts used to record the impairment are as follows:
Unaudited Audited
as at as at
2010 2009
Rmb’000 Rmb’000
Trade receivables at nominal amounts 5,809 5,639

Less: Allowance for impairment of trade
receivables (5,809) (5,639)
– –
Details for movement in the allowance account are as follows:
At beginning of financial year 5,639 4,485

Charge for the year 170 1,154
At end of financial year 5,809 5,639
Trade receivables that are individually determined to be impaired at the balance sheet date
relate to debtors that are in significant financial difficulties and have defaulted on payments.
These receivables are not secured by any collateral or credit enhancements.
Bills receivables
Bills receivables are interest-free and have maturity periods of approximately 90 days.
B-43
Amount due from shareholders
Amount due from shareholders relates to the sale consideration of Anchun Biotech which
has not been received as at 31 March 2010.
Amount due from pre-IPO investors
Amount due from pre-IPO investors relates to payment to the then existing shareholders of
Hunan Anchun on behalf of pre-IPO investors which was funded from the proceeds of the
convertible loan (Note 24). This is for partial purchase consideration payable by the pre-
IPO investors to the then existing shareholders of Hunan Anchun for their shareholdings in
the Group. The amount is interest-free, and repayable on demand.
Amount due from director-related company
Amount due from director-related company relates to operating expenses paid on behalf of
Anchun Biotech by Hunan Anchun.
20. Prepayments
Unaudited Audited
as at as at
2010 2009
Rmb’000 Rmb’000
Non-current
Prepayments relating to acquisition of
property, plant and equipment 11,123 6,131
Current
Prepayments to trade suppliers 10,041 7,317
Prepaid operating expenses 5,035 3,787
Prepaid listing expenses 1,868 457
Less: Allowance for impairment (768) (768)
16,176 10,793
Details for movement in the allowance account are as follows:
Unaudited Audited
as at as at
2010 2009
Rmb’000 Rmb’000
At beginning of financial year 768 321

Charge for the year – 447
At end of financial year 768 768
B-44
21. Cash and cash equivalents
Cash and cash equivalents comprises cash at banks which earns interest at floating rates
based on daily bank deposit rates.
22. Trade and other payables
Unaudited Audited
as at as at
2010 2009
Rmb’000 Rmb’000
Trade payables 12,073 5,896

Deferred revenue 1,834 1,241
Dividends payables 43,200 48,000
Payables to suppliers of property, plant and
equipment 4,545 5,837
Loans from shareholders 16,485 798
Amount due to related company (non-trade) – 102
Withholding tax on dividends 4,828 4,828
Other operating tax payables 2,197 450
Other payables 2,818 2,148
87,980 69,300
Add:
Other liabilities (Note 23) 3,679 9,061
Loans and borrowings (Note 24) 19,842 33,945
Total financial liabilities carried at amortised

cost 267,059 272,336
Trade payables
Trade payables are non-interest bearing and are normally settled on 30 to 60 days’ term.
Amount due to related company (non-trade)
These relate to expenses paid by OneEquity SG Pte Ltd, a director-related company, on

behalf of the Company.
Loans from shareholders
Loans from shareholders amounting to Rmb 2,011,000 (31 December 2009: Rmb 798,000)
relate to loan from Vision Top Holdings Limited, a shareholder of the Company for working
capital purposes. These loans are interest free and repayable on demand.
In addition, certain shareholders granted a loan amounting to Rmb 14,474,000 (31

December 2009: Rmb Nil) to the Company. The tenure of the loan is for a period of one
year and is renewable on a yearly basis up to five years. The loan is unsecured and
interest free during the first year and in the event that it is extended beyond the first year,
interest will be charged based on the annual prevailing market banking rates of the
People’s Bank of China.
B-45
22. Trade and other payables (cont’d)
Other payables
Other payables are non-interest bearing and have an average term of six months.
23. Other liabilities
Unaudited Audited
as at as at
2010 2009
Rmb’000 Rmb’000
Accrued salaries and bonus 1,638 7,154

Accrued welfare expenses 1,716 1,582
Accrued interest expenses 325 325
3,679 9,061
24. Loans and borrowings
Unaudited Audited
as at as at
2010 2009
Rmb’000 Rmb’000
Current:
China Construction Bank1 – 12,000
China Construction Bank2 4,875 7,200
4,875 19,200
Non-current:
Convertible loan3 14,967 14,745
14,967 14,745
Total loans and borrowings 19,842 33,945
1
The short-term bank loan bears interest at CHIBOR + 10% per annum and is
secured by land use rights with carrying amount of approximately Rmb 11,082,000
as at 31 December 2009 (Note 15) and certain buildings with carrying amount of
approximately Rmb 14,289,000 as at 31 December 2009 (Note 13). It had been fully
repaid as at 31 March 2010.
2
This term loan bears interest at CHIBOR and is secured by certain land use rights
with carrying amount of approximately Rmb 11,022,000 and Rmb 11,082,000 as at
31 March 2010 and 31 December 2009 respectively (Note 15) and certain buildings
with carrying amount of approximately Rmb 14,056,000 and Rmb 14,289,000 as at
31 March 2010 and 31 December 2009 respectively (Note 13). This loan is repayable
every quarter and will mature in August 2010.
B-46
24. Loans and borrowings (cont'd)

3
In connection with the Restructuring Exercise, a Pre-IPO investor, Vision Top
Holdings Limited (the “Investor”), Existing Shareholders of the Company and the
Company entered into a convertible loan agreement dated 22 December 2009
pursuant to which the investor agreed to advance an aggregate sum of RMB
80,000,000 to the Company. The Loan is intended for use by the Company for the
purposes to fund the Restructuring and for working capital purposes.
The terms of the convertible loan shall commence from the drawdown date and
expire on 30 June 2011 (the “Final Maturity” or “IPO Target Date”) or upon
conversion of the Loan Facility.
Compensation costs shall be payable by the Company to the Investor in the following
manner:
(a) In the event that the Company is not successfully listed in Singapore (for reasons
other than the Company’s decision not to apply for an IPO) before Final Maturity,
compensation costs (net of any withholdings, taxes or any other applicable
deductions) at the annual rate of 5.0% per annum;
(b) In event that the Company is granted an Eligibility-To-List letter (the “ETL”) from
SGX for an IPO through a public listing on the SGX-ST but chooses not to carry
out the IPO before the IPO Target Date, or upon the occurrence of a material
breach by any of the Warrantors of any of the terms, conditions, covenants,
warranties, representations or undertakings (including the occurrence of any
Event of Default) under this Agreement, compensation costs (net of any
withholdings, taxes or any other applicable deductions) at the annual rate of 20%
per annum on the full principal amount of RMB 80,000,000; and
(c) All compensation costs shall be cumulative and calculated on the basis of the
actual days elapsed and a 365-day year, commencing from the relevant funding
date in respect of each portion of the principal amount disbursed above up to the
repayment date.
Rmb 5,000,000 of the loan shall be automatically converted into Eight Hundred (800)
fully paid new ordinary shares (“New Shares”) of the Company, to be allotted and
issued to the Investor, within five (5) Business Days from the issuance of the written
notice (the “Automatic Conversion Notice”) by the Company to the Investor informing
the Company’s receipt of the Eligibility-to-List (“ETL”) from SGX-ST (the “Automatic
Conversion”). In the event that the ETL has not been received by the IPO Target
Date, the Investor shall have the option (but not the obligation) to nevertheless covert
the Principal Amount into the New Shares and the Company shall allot and issue the
New Shares to the Investor and/or its nominees.
The remaining Rmb 75,000,000 will be used to pay the existing shareholders of
Hunan Anchun as puchase consideration for the IPO investors’ shareholding in the
Group.
As of 31 March 2010, Rmb 15,000,000 of the convertible loan has been drawn down.
No amounts of the convertible loan have been converted to shares or repaid to the
Investors.
B-47
24. Loans and borrowings (cont'd)
The carrying amount of the liability component of the convertible loan at the balance
sheet date is arrived at as follows:
Unaudited Audited
as at as at
2010 2009
Rmb’000 Rmb’000
Face value of convertible loan 15,000 15,000

Fair value of derivative financial
instrument at date of drawdown
(Note 25) (34) (34)
Equity component (Note 27) (221) (221)
Liability component of convertible loan
at initial recognition 14,745 14,745
Interest expense recognised during the
financial period/year 222 –
Liability component of convertible loan

at period / year end 14,967 14,745
25. Derivative financial instrument
Unaudited Audited
as at as at
2010 2009
Rmb’000 Rmb’000
Derivative financial instrument at initial

recognition 34 34
Fair value adjustment – –
Derivative financial instrument at period /

year end 34 34
Derivative component of the convertible loan relates to the investors’ right to receive
compensation at the annual rate of 20% per annum in the event that the Company is
granted the Eligibility-to-List from SGX but chooses not to carry out the IPO.
The fair value of the derivative financial instrument as at 31 March 2010 and 31 December
2009 approximates the value at initial recognition, hence no fair value adjustment is made.
B-48
26. Share capital
Unaudited Audited
as at as at
2010 2009
Rmb’000 Rmb’000
Share capital of Hunan Anchun

At 1 January 32,000 32,000
Transfer from retained earnings 43,0001 –
At 31 March 2010 / 31 December 2009 75,000 32,000
Share capital of the Company

At date of incorporation (29 October 2009)
and at 31 March 2010 / 31 December 2009 452 452
Combined balance sheet

Share capital of Hunan Anchun 75,000 32,000
Share capital of the Company 45 45
Exercise (75,000)3 (32,000)3
At 31 March 2010 / 31 December 2009 45 45
1
During the three-months ended 31 March 2010, Hunan Anchun increased its share
capital by capitalising retained earnings amounting to Rmb 43,000,000.
2
The ordinary shares of the Company have no par value. All issued ordinary shares
are fully paid. The holders of ordinary shares are entitled to receive dividends as
and when declared by the Company. All ordinary shares carry one vote per share
without restrictions.
3
Pursuant to the completion of the Acquisition as disclosed in Note 1.2(c) in 2009,
the share capital of Hunan Anchun is adjusted to merger reserve based on the
B-49
27. Other reserves
Unaudited Audited
as at as at
2010 2009
Rmb’000 Rmb’000
Fair value adjustment reserve 633 633

Statutory reserve fund 23,731 23,731
Convertible loan reserve 221 221
Contribution from shareholder 1,725 1,725
Merger reserve 75,000 32,000
101,310 58,310
(a) Fair value adjustment reserve
Fair value adjustment reserve represents the cumulative fair value changes, net of
tax, of available-for-sale financial assets until they are disposed of or impaired.
(b) Statutory reserve fund
In accordance with the Foreign Enterprise Law applicable to entities in the People’s
Republic of China (PRC), the Company’s PRC subsidiary is required to make
appropriation to a Statutory Reserve Fund (SRF). At least 10% of the statutory
after tax profits as determined in accordance with the applicable PRC accounting
standards and regulations must be allocated to the SRF until the cumulative total of
the SRF reaches 50% of the subsidiary’s registered capital. Subject to approval
from the relevant PRC authorities, the SRF may be used to offset any accumulated
losses or increase the registered capital of the subsidiary. The SRF is not available
for dividend distribution to shareholders.
Unaudited Audited
as at as at
2010 2009
Rmb’000 Rmb’000
At 1 January 23,731 13,990

Transferred from accumulated profits – 9,741
At 31 March / 31 December 23,731 23,731
(c) Convertible loan reserve
The convertible loan reserve is made up of two components, namely:
(i) the investors’ right to receive additional shares from existing shareholders in
the event that the Company fails to meet certain pre-determined profit targets
for the financial years ended 31 December 2009 and 31 December 2010; and
(ii) the conversion feature of the convertible loan, which is the residual value after
deducting the fair value of the liability component, embedded derivative
component and the equity component as mentioned in (i) above from the face
value of the convertible loan at inception.
B-50
27. Other reserves (cont’d)
(d) Contribution from shareholder
Contribution from shareholder represents the shares given by a shareholder to

employees.

Technology Co., Ltd (“Hunan Anchun”) declared Rmb 24,140,000 of dividends to
314 existing shareholders out of which Rmb 19,312,000 was settled in the form of
shareholding. In addition, one of the shareholders subsequently distributed 620,000
of the new shares that he received to 88 new shareholders who are employees of
Hunan Anchun. There is no vesting period as the shares are issued on grant date,
which is the date of distribution of the shares to the 88 new shareholders.
The fair value of the 620,000 shares was assessed by an independent valuer by
using the Market Approach to arrive at the fair value of the shares. The Market
Approach includes using Guideline Public Companies Multiples such as price-
earnings ratio to capitalise an estimated future maintainable income. Based on the
valuer’s analysis, the fair value of the 620,000 shares granted was determined to be
Rmb 1,725,000. Accordingly, the aggregate fair value of the shares granted to the 88
new shareholders, amounting to Rmb 1,725,000 has been recognised in profit or
loss for the financial year ended 31 December 2008.
The following table lists the inputs to the model used for valuation of the shares
granted on 31 December 2008:
Earnings (Rmb) 21,193,000

PE Ratio 6
Discount rate 30%
Number of shares 32,000,000
Fair value per share (Rmb) 2.78
(e) Merger reserve
Pursuant to the completion of the Restructuring Exercise as disclosed in Note

1.2(c) in 2009, the share capital of Hunan Anchun is adjusted to merger reserve
based on the “pooling of interest method”.
B-51
28. Segment information
For management purposes, the Group is organised into business units based on their
products and services, and has three reportable operating segments as follows:
(i) Catalyst Business
The catalyst business segment involves manufacturing of a variety of catalysts for

use in the process of gas-making, ammonia synthesis and methanol synthesis.
(ii) Chemical engineering and technology (“CET”) Design Services
This segment involves providing chemical systems engineering and technology

design service for the production of ammonia and methanol related products such
as agriculture fertilisers and biodiesel which are mainly used in the agriculture and
energy industries.
(iii) Chemical systems and components (“CSC”) Business
This segment involves manufacturing of chemical equipment designed by the

chemical engineering and technology consultancy services department.
Except as indicated above, no operating segments have been aggregated to form the
above reportable operating segments.
Management monitors the operating results of its business units separately for the purpose
of making decisions about resource allocation and performance assessment. Segment
performance is evaluated based on operating profit or loss.
Segment assets and liabilities are not disclosed as they are not regularly provided to the
chief operating decision maker.
Transfer prices between operating segments are on an arm’s length basis in a manner
similar to transactions with third parties.
B-52
28. Segment information (cont'd)
Catalyst CET Design

Business Services CSC Business Total
Rmb’000 Rmb’000 Rmb’000 Rmb’000
Unaudited
1 January 2010 to 31 March 2010
Revenue
External customers 3,870 8,148 55,277 67,295
Total revenue 3,870 8,128 55,297 67,295
Results:
Segment gross profit 2,200 7,213 31,333 40,746
Depreciation of property,
plant and equipment (2,521)
Amortisation of intangible
assets (25)
Amortisation of land use
rights (91)
Allowance for impairment of
trade receivables (170)
Finance costs (346)
Finance income 222
Unallocated expenses, net (8,649)
Profit before tax 29,166
1 January 2009 to 31 March 2009
Revenue
External customers 6,663 1,480 96,302 104,445
Total revenue 6,663 1,480 96,302 104,445
Results:
Segment gross profit 2,467 1,253 36,690 40,410
Depreciation of property,
plant and equipment (2,335)
Amortisation of intangible
assets (34)
Amortisation of land use
rights (91)
Finance costs (230)
Finance income 18
Unallocated expenses, net (2,834)
Profit before tax 34,904
B-53
28. Segment information (cont'd)
Geographical information
No geographical information is provided as the principal assets employed by the Group are
located in the PRC and the Group’s revenue and profits are derived primarily from
customers in the PRC.
Information about major customers

For the financial periods ended 31 March 2010 and 31 March 2009, the Group does not
have revenue from transactions with a single customer that amounted to 10 per cent or
more of the Group’s revenue.
29. Commitments
Capital expenditure contracted for as at balance sheet dates but not recognised in the
financial statements is as follows:
Unaudited Audited
as at as at
2010 2009
Rmb’000 Rmb’000
Commitment in respect of purchase contracts

entered into for:
Property, plant and equipment 6,510 2,224
Raw materials 5,158 9,280
11,668 11,504
30. Fair value of financial instruments
The fair value of a financial instrument is the amount at which the instrument could be
exchanged or settled between knowledgeable and willing parties in an arm’s length
transaction, other than in a forced liquidation or sale.
(a) Fair value of financial instruments that are carried at fair value
Fair value hierarchy
The Group classifies fair value measurement using a fair value hierarchy that
reflects the significance of the inputs used in making the measurements. The fair
value hierarchy has the following levels:
- Level 1 – Quoted prices (unadjusted) in active markets for identical assets or

liabilities
- Level 2 – Inputs other than quoted prices included within Level 1 that are
observable for the asset or liability either directly (i.e., as prices) or indirectly
(i.e., derived from prices); and
- Level 3 – Inputs for the assets or liability that are not based on observable
market data (unobservable inputs)
B-54
30. Fair value of financial instruments (cont'd)
(a) Fair value of financial instruments that are carried at fair value (cont’d)
The following table shows an analysis of financial instruments carried at fair value
by level of fair value hierarchy:
Unaudited Audited
as at as at
2010 2009
Rmb’000 Rmb’000
Quoted prices in active markets
for identical investments
(Level 1)
Financial assets:
(Note 17)
- Investment securities 933 933
Unaudited Audited
as at as at
2010 2009
Rmb’000 Rmb’000
Significant unobservable inputs
(Level 3)
Financial liabilities:
Derivative financial instrument (Note
25) 34 34
Determination of fair value
Quoted equity instruments (Note 17): Fair value is determined directly by reference
to their published market bid prices as the balance sheet date.
Derivative financial instrument (Note 25): Fair value is determined using a valuation
technique based on probability of the Company being granted ETL from SGX but
chooses not to carry out the IPO that is not supportable by observable market data.
(b) Fair value of financial instruments by classes that are not carried at fair value and
whose carrying amounts are a reasonable approximation of fair value
Trade and other receivables (Note 19), cash and cash equivalents (Note 21), trade
and other payables (Note 22) and loans and borrowings (Note 24)
The carrying amounts of these financial assets and liabilities are a reasonable
approximation of fair values, either due to their short term nature or that they are
floating rate instruments that are repriced to market interest rates on or near the
balance sheet date.
B-55
31. Financial risk management objectives and policies
The Group is exposed to financial risks arising from its operations and the use of financial
instruments. The key financial risks include interest rate risk, liquidity risk and credit risk.
The management reviews and agrees policies and procedures for the management of
these risks. It is, and has been throughout the years under review, the Group’s policy that
no trading in derivative financial instruments shall be undertaken.
The following sections provide details regarding the Group’s exposure to the above-
mentioned risks and the objectives, policies, and processes for the management of these
risks.
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of the Group’s financial
instruments will fluctuate because of changes in market interest rates. The Group’s
exposure to interest rate risk arises primarily from its floating rate cash at bank balances
and loans and borrowings. The Group obtains additional financing through funding from
shareholders. The Group’s policy is to obtain the most favourable interest rates available.
Sensitivity analysis for interest rate risk
At the balance sheet date, if RMB interest rates had been 100 basis points lower/higher
with all other variables held constant, the Group’s net of tax would have been Rmb 168,000
(31 December 2009: Rmb 588,000) lower/higher, arising mainly as a result of lower/higher
interest income on floating rate cash at bank balances. The assumed movement in basis
points for interest rate sensitivity analysis is based on the currently observable market
environment, showing a significantly higher volatility than prior years.
Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting financial
obligations due to shortage of funds. The Group’s exposure to liquidity risk arises primarily
from mismatches of the maturities of financial assets and liabilities. The Group’s objective is
to maintain a balance between continuity of funding and flexibility through the use of stand-
by credit facilities.
The Group's objective is to maintain a balance between continuity of funding and flexibility
through the use of bank loans. Approximately 25% of the Group’s loans and borrowings will
mature in less than one year based on the carrying amounts reflected in the financial
statements as at 31 March 2010 (31 December 2009: 57%).
B-56
31. Financial risk management objectives and policies (cont'd)
Analysis of financial instruments by remaining contractual maturities
The table below summarises the maturity profile of the Group's financial assets and
liabilities at 31 March 2010 and 31 December 2009 based on contractual undiscounted
repayment obligations.
One year or One to

Rmb’000 Rmb’000 Rmb’000
31 March 2010
Financial assets

liabilities (108,409) (16,125) (124,534)
One year or One to

Rmb’000 Rmb’000 Rmb’000
31 December 2009
Financial assets

liabilities (121,997) (16,125) (138,122)
B-57
Credit risk
Credit risk is the risk of loss that may arise on outstanding financial instruments should a
counterparty default on its obligations. The Group’s exposure to credit risk arises primarily
from trade and other receivables. For other financial assets (including cash and cash
equivalents), the Group minimises credit risk by dealing exclusively with high credit rating
counterparties.
The Group’s objective is to seek continual revenue growth while minimising losses incurred
due to increased credit risk exposure. The Group trades only with recognised and
creditworthy third parties. It is the Group’s policy that all customers who wish to trade on
credit terms are subject to credit verification procedures. In addition, receivable balances
are monitored on an ongoing basis with the result that the Group’s exposure to bad debts is
not significant.
Exposure to credit risk
At the balance sheet date, the Group’s maximum exposure to credit risk is represented by
the carrying amount of each class of financial assets recognised on the balance sheets.
Credit risk concentration profile
The Group operates solely in the chemical equipment manufacturing industry sector.
As at 31 March 2010, 37.5% (31 December 2009: 25.8%) of trade receivables relate to five
major customers of the Group.
Financial assets that are neither past due nor impaired
Trade and other receivables that are neither past due nor impaired are creditworthy debtors
with good payment record with the Group. Cash and cash equivalents that are neither past
due nor impaired are placed with or entered into with reputable financial institutions or
companies with high credit ratings and no history of default.
Financial assets that are either past due or impaired
Information regarding financial assets that are either past due or impaired is disclosed in
Note 19.
Foreign currency risk
The Group’s operations are primarily conducted in the PRC in Rmb. Currently, the PRC
government imposes control over foreign currencies, Rmb, the official currency in the PRC,
is not freely convertible. Enterprises operating in the PRC can enter into exchange
transactions through the People’s Bank of China or other authorised financial institutions.
As at balance sheet date, sensitivity analysis for foreign currency risk is not applicable as
the Group maintains minimal balances in foreign currency and thus has minimal exposure
to foreign currency risk.
B-58
32. Capital management
The primary objective of the Group’s capital management is to ensure that it maintains a
strong credit rating and healthy capital ratios in order to support its business and maximise
shareholder value.
The Group manages its capital structure and makes adjustments to it, in light of changes in
economic conditions. To maintain or adjust the capital structure, the Group may adjust the
dividend payment to shareholders, return capital to shareholders or issue new shares. No
changes were made in the objectives, policies or processes during the period ended 31
March 2010.
As disclosed in Note 27, the Company’s PRC subsidiary is required by the relevant laws
and regulations of the PRC to contribute to and maintain a non-distributable statutory
reserve fund whose utilisation is subject to approval by the relevant PRC authorities.
The Group monitors capital using a gearing ratio, which is net debt divided by total capital
plus net debt. The Group includes within net debt, trade and other payables, advances
from customers, other liabilities and loans and borrowings, less cash and cash equivalents.
Capital consists of equity attributable to equity holders of the Company less the above
mentioned reserve fund.
Unaudited Audited
as at as at
2010 2009
Rmb’000 Rmb’000
Trade and other payables (Note 22) 87,980 69,300

Other liabilities (Note 23) 3,679 9,061
Loans and borrowings (Note 24) 19,842 33,945
Less: Cash and cash equivalents (Note 21) (79,853) (88,410)
Net debt 187,206 183,926
Equity attributable to equity holders of the

Company 131,475 106,412
Less: Reserve fund (Note 27) (23,731) (23,731)
Total capital 107,744 82,681
Capital and net debt 294,950 266,607
Gearing ratio 63% 69%
33. Proforma financial information
The convertible loan granted by the Pre-IPO Investor to the Company shall be converted to
new shares of the Company in specified circumstances as set out in Note 24. Had the
convertible loan been converted to ordinary shares of the Company as at 31 March 2010,
the net assets of the Group as at 31 March 2010 would have increased by Rmb 5,001,000.
B-59
34. Subsequent events
(i) On 3 May 2010, the Company increased its share capital from Rmb 45,000 to
Rmb240,086 by the allotment of 40,000 ordinary shares in the Company for a cash
consideration of S$40,000. These new shares rank pari passu in all respects with
the existing issued shares of the Company.
(ii) On 2 August 2010, the Company issued the conversion notices (as prescribed
capital of the Company. These new shares rank pari passu in all respects with the
existing issued shares of the Company.
(iii) Pursuant to the written shareholders’ resolutions dated 9 September 2010 and 12
October 2010, in lieu of extraordinary general meetings, the shareholders
approved, inter-alia, the following:
(a) the sub-division of each ordinary share in the existing issued share capital
of the Company into 8,000 ordinary shares;
(b) Conversion of the Company into a public limited company and the change
of the name to “Anchun International Holdings Ltd.”;
(d) the issue of 105,000,000 New Shares pursuant to the Invitation which when
fully paid, allotted and issued, will rank pari passu in all respects with the
existing issued Shares (the "Issue of New Shares"); and
(e) that the Directors be authorised to: (i) allot and issue Shares in the
Company (other than the New Shares); and (ii) issue convertible securities
and any Shares in the Company pursuant to the conversion of such
convertible securities (whether by way of rights, bonus or otherwise) at any
time and from time to time thereafter upon such terms and conditions,
whether for cash or otherwise, and for such purposes and to such persons
as the Directors may think fit for the benefit of the Company, provided that
the aggregate number of Shares and convertible securities to be issued
pursuant to such authority shall not exceed 50% of the post-Invitation
issued shares of the Company (excluding treasury shares) and provided
that the aggregate number of Shares to be issued other than on a pro-rata
basis to the then existing shareholders of the Company shall not exceed
20% of the post-Invitation issued share capital of the Company, and, unless
revoked or varied by the Company in general meeting, such authority shall
take effect from the date of listing of the Shares on the SGX-ST and shall
continue to be in force until the conclusion of the next annual general
meeting or the date by which the next annual general meeting is required
by law or by the Articles to be held, whichever is earlier.
B-60
34. Subsequent events (cont’d)
For the purposes of this resolution, and pursuant to Rules 806(3) and 806(4)
of the Listing Manual, “post-Invitation issued share capital” shall mean the
enlarge issued and paid-up share capital of the Company after the
completion of the Invitation after adjusting for: (i) new Shares arising from
the conversion or exercise of an convertible securities; (ii) new Shares
arising from the exercise of share options or the vesting of share awards
outstanding or subsisting at the time such authority is given, provided the
options or awards were granted in compliance with the Listing Manual; and
(iii) any subsequent consolidation or sub-division of Shares.
35. Comparatives
Prior period comparative figures which relates to the financial period from 1 January 2009
to 31 March 2009 are prepared by the Management. These financial information are
presented for comparative purposes only and have not been reviewed or audited.
36. Authorisation of financial statements
The combined financial statements for the period ended 31 March 2010 were authorised
for issue in accordance with a resolution of the directors on 13 October 2010.
B-61
APPENDIX C – TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION
AND ACCEPTANCE
You are invited to apply for the subscription for and/or purchase the Invitation Shares at the Invitation
Price for each Offer Share and each Placement Share subject to the following terms and conditions:
1. YOUR APPLICATION MUST BE MADE IN LOTS OF 1,000 INVITATION SHARES AND

INTEGRAL MULTIPLES THEREOF. YOUR APPLICATION FOR ANY OTHER NUMBER OF
INVITATION SHARES WILL BE REJECTED.
2. Your application for Offer Shares may be made by way of printed Offer Shares Application Forms
or by way of Electronic Applications through ATMs of the Participating Banks (“ATM Electronic
Applications”) or through Internet Banking (“IB”) websites of the relevant Participating Banks
(“Internet Electronic Applications” which, together with ATM Electronic Applications, shall be
referred to as “Electronic Applications”). Your application for the Placement Shares may only be
made by way of Placement Shares Application Forms. YOU MAY NOT USE CPF FUNDS TO
APPLY FOR THE INVITATION SHARES.
3. You (not being an approved nominee company) are allowed to submit only one application
in your own name for the Offer Shares or the Placement Shares. If you submit an
application for Offer Shares by way of an Offer Shares Application Form, you MAY NOT
submit another application for Offer Shares by way of an Electronic Application and vice
versa. Such separate applications shall be deemed to be multiple applications and will be
liable to be rejected at our discretion, in consultation with the Manager, Underwriter and
Placement Agent.
If you submit an application for Offer Shares by way of Internet Electronic Application, you MAY
NOT submit another application for Offer Shares by way of ATM Electronic Application and vice
versa. Such separate applications shall be deemed to be multiple applications and will be liable to
be rejected at our discretion, in consultation with the Manager, Underwriter and Placement Agent.
If you have submitted an application for Offer Shares in your own name, you should not submit any
other application for Offer Shares, whether by way of an Offer Shares Application Form or by way
of an Electronic Application, for any other person. Such separate applications shall be deemed to
be multiple applications and will be liable to be rejected at our discretion, in consultation with the
Manager, Underwriter and Placement Agent.
If you have made an application for Placement Shares, you should not make any application
for Offer Shares either by way of an Offer Shares Application Form or by way of an
Electronic Application and vice versa. Such separate applications shall be deemed to be
multiple applications and will be liable to be rejected at our discretion, in consultation with
the Manager, Underwriter and Placement Agent.
Conversely, if you have made an application for Offer Shares either by way of an Electronic
Application or by way of an Offer Shares Application Form, you may not make any
application for Placement Shares. Such separate applications shall be deemed to be
multiple applications and will be liable to be rejected at our discretion, in consultation with
the Manager, Underwriter and Placement Agent.
Joint applications shall be rejected. Multiple applications for Invitation Shares will be liable
to be rejected at our discretion, in consultation with the Manager, Underwriter and
Placement Agent. If you submit or procure submissions of multiple share applications for
Offer Shares, Placement Shares or both Offer Shares and Placement Shares, you may be
deemed to have committed an offence under the Penal Code, Chapter 224 of Singapore and
the Securities and Futures Act, Chapter 289 of Singapore, and your applications may be
referred to the relevant authorities for investigation. Multiple applications or those
appearing to be or suspected of being multiple applications will be liable to be rejected at
our discretion, in consultation with the Manager, Underwriter and Placement Agent.
C-1
4. We will not accept applications from any person under the age of 18 years, undischarged
bankrupts, sole-proprietorships, partnerships, chops or non-corporate bodies, joint Securities
Account holders of CDP and from applicants whose addresses (furnished in their Application
Forms or, in the case of Electronic Applications, contained in the records of the relevant
Participating Banks) bear post office box numbers. No person acting or purporting to act on behalf
of a deceased person is allowed to apply under the Securities Account with CDP in the deceased
name at the time of application.
5. We will not recognise the existence of a trust. Any application by a trustee or trustees must be
made in his/their own name(s) and without qualification or, where the application is made by way of
an Application Form, in the name(s) of an approved nominee company or approved nominee
companies after complying with paragraph 6 below.
6. WE WILL NOT ACCEPT APPLICATIONS FROM NOMINEES EXCEPT THOSE MADE BY

APPROVED NOMINEE COMPANIES ONLY. Approved nominee companies are defined as banks,
merchant banks, finance companies, insurance companies, licensed securities dealers in
Singapore and nominee companies controlled by them. Applications made by persons acting as
nominees other than approved nominee companies shall be rejected.
7. IF YOU ARE NOT A NOMINEE COMPANY, YOU MUST MAINTAIN A SECURITIES ACCOUNT
WITH CDP IN YOUR OWN NAME AT THE TIME OF YOUR APPLICATION. If you do not have an
existing Securities Account with CDP in your own name at the time of your application, your
application will be rejected (if you apply by way of an Application Form), or you will not be able to
complete your Electronic Application (if you apply by way of an Electronic Application). If you have
an existing Securities Account but fail to provide your Securities Account number or provide an
incorrect Securities Account number in Section B of the Application Form or in your Electronic
Application, as the case may be, your application is liable to be rejected. Subject to paragraph 8
below, your application shall be rejected if your particulars, such as name, NRIC/passport number,
nationality and permanent residence status provided in your Application Form or in the records of
the relevant Participating Bank at the time of your Electronic Application, as the case may be, differ
from those particulars in your Securities Account as maintained with CDP. If you possess more
than one individual direct Securities Account with CDP, your application shall be rejected.
8. If your address as stated in the Application Form or, in the case of an Electronic
Application, in the records of the relevant Participating Bank, as the case may be, is
different from the address registered with CDP, you must inform CDP of your updated
address promptly, failing which the notification letter on successful allotment will be sent to
your address last registered with CDP.
9. We reserve the right to reject any application which does not conform strictly to the
instructions set out in the Application Form and in this Prospectus or which does not
comply with the instructions for an Electronic Application or with the terms and conditions
of this Prospectus or, in the case of an application by way of an Application Form, which is
illegible, incomplete, incorrectly completed or which is accompanied by an improperly
drawn remittance or an improper form of remittance. We further reserve the right to treat as
valid any applications not completed or submitted or effected in all respects in accordance
with the instructions set out in the Application Form or the instructions for an Electronic
Application or the terms and conditions of this Prospectus and also to present for payment
or other processes all remittances at any time after receipt and to have full access to all
information relating to, or deriving from, such remittances or the processing thereof.
10. We reserve the right to reject or to accept, in whole or in part, or to scale down or to ballot any
application, without assigning any reason therefore, and we will not entertain any enquiry and/or
correspondence on our decision. This right applies to applications made by way of Application
Forms and by way of Electronic Applications. In deciding the basis of allotment, we will give due
consideration to the desirability of allotting or allocating the Invitation Shares to a reasonable
number of applicants with a view to establishing an adequate market for our Shares.
C-2
11. Share certificates will be registered in the name of CDP and will be forwarded only to CDP. It is
expected that CDP will send to you, at your own risk, within 15 Market Days after the close of the
Application List, a statement of account stating that your Securities Account has been credited with
the number of Invitation Shares allotted and/or allocated to you. This will be the only
acknowledgement of application monies received and is not an acknowledgement by us. You
irrevocably authorise CDP to complete and sign on your behalf as transferee or renouncee any
instrument of transfer and/or other documents required for the issue or transfer of the Invitation
Shares allotted and/or allocated to you. This authorisation applies to applications made by way of
Application Forms and by way of Electronic Applications.
12. In the event of an under-subscription for Offer Shares as at the close of the Application List, we will
make available that number of Offer Shares not subscribed for or purchased to satisfy applications
for Placement Shares to the extent that there is an over-subscription for Placement Shares as at
the close of the Application List.
In the event of an under-subscription for Placement Shares as at the close of the Application List,
we will make available that number of Placement Shares not subscribed for or purchased to satisfy
applications for Offer Shares to the extent that there is an over-subscription for Offer Shares as at
the close of the Application List.
In the event of an over-subscription for Offer Shares as at the close of the Application List and/or
Placement Shares are fully subscribed or over-subscribed as at the close of the Application List,
the successful applications for Offer Shares will be determined by ballot or otherwise as
determined by our Directors and in consultation with the Manager, and approved by the SGX-ST.
In all of the above instances, the basis of allotment of the Invitation Shares as may be decided
upon by our Company and the Vendors in ensuring a reasonable spread of shareholders of our
Company, shall be made public, as soon as is practicable, via an announcement through the SGX-
ST and through a paid advertisement in a local newspaper.
13. You irrevocably authorise CDP to disclose the outcome of your application, including the number of
Invitation Shares allotted and/or allocated to you pursuant to your application, to our Company, the
Manager, the Underwriter and Placement Agent and any other parties so authorised by CDP, our
Company, the Vendors, the Manager, the Underwriter and Placement Agent.
14. Any reference to the “you” in this section shall include an individual, a corporation, an approved
nominee and trustee applying for the Offer Shares by way of an Application Form or by way of an
Electronic Application and/or an individual, a corporation, an approval nominee and trustee
applying for the Placement Shares through the Placement Agent by way of a Placement Shares
Application Form.
15. By completing and delivering an Application Form or by making and completing an Electronic
Application by (in the case of an ATM Electronic Application) pressing the “Enter” or “OK” or
“Confirm” or “Yes” key on the ATM (as the case may be) or by (in the case of an Internet Electronic
Application) clicking “Submit” or “Continue” or “Yes” or “Confirm” on the IB website screen (as the
case may be) in accordance with the provisions of this Prospectus, you:-
(a) irrevocably offer to subscribe for and/or purchase the number of Invitation Shares specified
in your application (or such smaller number for which the application is accepted) at the
Invitation Price and agree that you will accept such Invitation Shares as may be allotted
and/or allocated to you, in each case on the terms of this Prospectus and on the terms of
the conditions set out in, this Prospectus and the Memorandum of Association and Articles
of Association of our Company;
(b) agree that in the event of any inconsistency between the terms and conditions for application
set out in this Prospectus, or the IB websites or ATMs of the Participating Banks, the terms
and conditions set out in this Prospectus shall prevail;
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(c) agree that the aggregate Invitation Price for the Invitation Shares applied for is due and
payable to our Company and the Vendors forthwith;
(d) warrant the truth and accuracy of the information contained, and representations and
declarations made, provided in your application, and acknowledge and agree that such
information, representations and declarations will be relied on by our Company and the
Vendors in determining whether to accept your application and/or whether to allot or sell any
Invitation Shares to you; and
(e) agree and warrant that if the laws of any jurisdictions outside Singapore are applicable to
your application, you have complied with all such laws and none of our Company, the
Vendors, the Manager, the Underwriter and Placement Agent will infringe any such laws as a
result of the acceptance of your application.
16. Our acceptance of applications will be conditional upon, inter alia, we being satisfied that:-
(a) permission has been granted by the SGX-ST to deal in and for quotation for all our existing
Shares (including the Vendor Shares) and the New Shares;
(b) no Stop Order which directs that no further Shares to which this Prospectus be allotted
and/or allocated has been issued by the Authority under the Securities and Futures Act; and
(c) the Management and the Underwriting and Placement Agreement referred to in the section
entitled “Management, Underwriting and Placement Arrangements” of this Prospectus have
become unconditional and have not been terminated or cancelled prior to such date as our
Company may determine.
17. In the event that a Stop Order in respect of the New Shares is served by the Authority or other
competent authority and applications to subscribe for the New Shares have been made prior to the
Stop Order, then
(a) in the case where the New Shares have not been issued, all applications shall be deemed to
have been withdrawn and cancelled and our Company shall, within 14 days of the date of
the stop order, pay to you all monies on account of your application for the New Shares
(without interest or any share of revenue or other benefit arising therefrom and at your own
risk); or
(b) in the case where the New Shares have already been issued, the issue of the New Shares
shall be deemed to be void and our Company shall, within 14 days from the date of stop
order, pay to you all monies paid on account of your application for the New Shares (without
interest or any share of revenue or other benefit arising therefrom and at your own risk).
This shall not apply where only an interim stop order has been served.
18. In the event that an interim stop order in respect of the New Shares is served by the Authority or
other competent authority, no New Shares shall be issued to you during the time when the interim
stop order is force. The Authority shall not serve a stop order in respect of the New Shares if the
New Shares have been issued, listed for quotation on a securities exchange and trading in the New
Shares has commenced.
19. We will not hold any applications in reserve.
20. We will not allot and/or allocate Shares on the basis of this Prospectus later than six months after
the date of registration of this Prospectus.
21. Additional terms and conditions for applications using printed Application Forms are set out on
pages C5 to C7 of this Prospectus.
22. Additional terms and conditions for Electronic Applications are set out on pages C8 to C15 of this
Prospectus.
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ADDITIONAL TERMS AND CONDITIONS FOR APPLICATIONS USING PRINTED APPLICATION
FORMS
You shall make an application by way of Application Forms made on and subject to the terms and
conditions of this Prospectus including but not limited to the terms and conditions appearing below as
well as those set out under the section on “TERMS, CONDITIONS AND PROCEDURES FOR
APPLICATION AND ACCEPTANCE” on pages C1 to C15 of this Prospectus, as well as the
Memorandum of Association and Articles of Association of our Company.
1. Your application must be made using the WHITE Application Forms for Offer Shares and the BLUE
Application Forms for Placement Shares accompanying and forming part of this Prospectus. We
draw your attention to the detailed instructions contained in the respective Application Forms and
this Prospectus for the completion of the Application Forms which must be carefully followed. We
reserve the right to reject applications which do not conform strictly to the instructions set
out in the Application Forms and this Prospectus or to the terms and conditions of this
Prospectus or which are illegible, incomplete, incorrectly completed or which are
accompanied by improperly drawn remittances or improper form of remittances.
2. Your Application Forms must be completed in English. Please type or write clearly in ink using
BLOCK LETTERS.
3. All spaces in the Application Forms except those under the heading “FOR OFFICIAL USE ONLY”
must be completed and the words “NOT APPLICABLE” or “N.A.” should be written in any space
that is not applicable.
4. Individuals, corporations, approved nominee companies and trustees must give their names in full.
You must make your application, in the case of individuals, in your full names appearing in your
identity cards (if applicants have such identification documents) or in your passports and, in the
case of corporations, in your full names as registered with a competent authority. If you are a non-
individual completing the Application Form under the hand of an official, you must state the name
and capacity in which that official signs. If you are a corporation completing the Application Form,
you are required to affix your Common Seal (if any) in accordance with your Memorandum and
Articles of Association or equivalent constitutive documents. If you are a corporate applicant and
your application is successful, a copy of your Memorandum and Articles of Association or
equivalent constitutive documents must be lodged with our Share Registrar and Share Transfer
Office. We reserve the right to require you to produce documentary proof of identification for
verification purposes.
5. (a) You must complete page 1 and Sections A and B of the Application Forms.
(b) You are required to delete either paragraph 7(a) or 7(b) on page 1 of the Application Forms.
Where paragraph 7(a) is deleted, you must also complete Section C of the Application
Forms with particulars of the beneficial owner(s).
(c) If you fail to make the required declaration in paragraph 7(a) or 7(b), as the case may be, on
page 1 of the Application Forms, your application is liable to be rejected.
6. You (whether you are an individual and corporate applicant, whether incorporated or
unincorporated and wherever incorporated or constituted), will be required to declare whether you
are a citizen or permanent resident of Singapore or a corporation in which citizens or permanent
residents of Singapore or any body corporate constituted under any statute of Singapore have an
interest in the aggregate of more than 50% of the issued share capital of or interests in such
corporations. If you are an approved nominee company, you are required to declare whether the
beneficial owner of the Invitation Shares is a citizen or permanent resident of Singapore or a
corporation, whether incorporated or unincorporated and wherever incorporated or constituted, in
which citizens or permanent residents of Singapore or any body corporate whether incorporated or
unincorporated and wherever incorporated or constituted under any statute of Singapore have an
interest in the aggregate of more than 50 per cent. of the issued share capital of or interests in
such corporation.
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7. Each application must be accompanied by a remittance in Singapore currency for the full amount
payable, in respect of the number of Offer Shares applied for, in the form of a BANKER’S DRAFT
and CASHIER’S ORDER drawn on a bank in Singapore, made out in favour of “ ANCHUN SHARE
ISSUE ACCOUNT” crossed “A/C PAYEE ONLY”, and with the name and address of the applicant
written clearly on the reverse side. Applications not accompanied by any payment or accompanied
by ANY OTHER FORM OF PAYMENT WILL NOT BE ACCEPTED. Remittances bearing the “Not
Transferable” or “Non Transferable” crossings will be rejected. No acknowledgement of receipt will
be issued by us or the Manager for applications and application monies received.
Monies paid in respect of unsuccessful applications are expected to be returned (without interest or
any share of revenue or other benefit arising therefrom) to you by ordinary post within 24 hours of
the balloting after the close of the Application List at your own risk. Where your application is
rejected or accepted in part only, the full amount or the balance of the application monies, as the
case may be, will be refunded (without interest or any share of revenue or other benefit arising
therefrom) to you by ordinary post at your own risk within 14 Market Days after the close of the
Application List. In the event that the Invitation is cancelled by us following the termination of the
Management and Underwriting Agreement and/or the Placement Agreement, the application
monies received will be refunded or paid back to you (as the case may be) (without interest or any
share of revenue or other benefit arising therefrom) by ordinary post at your own risk within five
days of the termination of the Invitation.
8. Capitalised terms used in the Application Forms and defined in this Prospectus shall bear the
meanings assigned to them in this Prospectus.
9. By completing and delivering the Application Form, you agree that:-
(a) in consideration of us having distributed the Application Form to you and agreeing to close
the Application List at 12.00 noon on 21 October 2010 or such other time or date as our
Directors and the Vendors may, in consultation with the Manager, decide and by completing
and delivering the Application Form, you agree that:-
(i) your application is irrevocable; and
(ii) your remittance will be honoured on first presentation and that any monies returnable
may be held pending clearance of your payment without interest or any share of
revenue or other benefit arising therefrom;
(b) all applications, acceptances and contracts resulting therefrom under the Invitation shall be
governed by and construed in accordance with the laws of Singapore and that you
irrevocably submit to the non-exclusive jurisdiction of the Singapore courts;
(c) in respect of the New Shares for which your application has been received and not rejected,
acceptance of your application shall be constituted by written notification and not otherwise,
notwithstanding any remittance being presented for payment by or on our behalf; you will not
be entitled to exercise any remedy of rescission for misrepresentation at any time after
acceptance of your application;
(d) in making your application, reliance is placed solely on the information contained in this
Prospectus and none of our Company, the Vendors, the Manager, the Underwriter for the
Offer, the Placement Agent or any other person involved in the Invitation shall have any
liability for any information not so contained;
(e) you consent to the disclosure of your name, NRIC/passport number, address, nationality,
permanent resident status, CDP Securities Account number and share application amount to
our Share Registrar, SGX-ST, CDP, Securities Clearing & Computer Science (Pte) Ltd
(“SCCS”), our Company, the Vendors, the Manager, the Underwriter and Placement Agent;
and
C-6
(f) you irrevocably agree and undertake to subscribe for the number of New Shares applied for
as stated in the Application Form or any smaller number of such New Shares that may be
allocated to you in respect of your application. In the event that our Company decides to
allocate or allot any smaller number of New Shares or not to allocate or allot any New
Shares to you, you agree to accept such decision as final.
Applications For Offer Shares

1. Your applications for Offer Shares MUST be made using the WHITE Offer Shares Application
Forms and WHITE official envelopes “A” and “B”. ONLY ONE APPLICATION should be enclosed
in each envelope.
2. You must:
(a) enclose the WHITE Offer Shares Application Form, duly completed and signed, together with
your remittance in the WHITE envelope “A” provided;
(b) in the appropriate spaces on WHITE envelope “A”:
(i) write your name and address;
(ii) state the number of Offer Shares applied for; and
(iii) affix adequate Singapore postage;
(c) SEAL WHITE ENVELOPE “A”;
(d) write, in the special box provided on the larger WHITE envelope “B” addressed to
Boardroom Corporate & Advisory Services Pte. Ltd. 50 Raffles Place #32-01 Singapore
Land Tower Singapore 048623, the number of Offer Shares you have applied for; and insert
WHITE envelope “A” into WHITE envelope “B”, seal WHITE envelope “B” and thereafter
DESPATCH BY ORDINARY POST OR DELIVER BY HAND at your own risk to Boardroom
Corporate & Advisory Services Pte. Ltd. 50 Raffles Place #32-01 Singapore Land Tower
Singapore 048623, to arrive by 12.00 noon on 21 October 2010 or such other time as we
may, in consultation with the Manager, decide. Local Urgent Mail or Registered Post
must NOT be used. No acknowledgement of receipt will be issued for any application or
remittance received.
3. Applications that are illegible, incomplete or incorrectly completed or accompanied by improperly

drawn remittances are liable to be rejected.
Applications For Placement Shares

1. Your application for Placement Shares MUST be made using the BLUE Placement Shares
Application Forms. ONLY ONE APPLICATION should be enclosed in each envelope.
2. The completed BLUE Placement Shares Application Form and your remittance with your name
and address written clearly on the reverse side, must be enclosed and sealed in an envelope to be
provided by you. The sealed envelope must be DESPATCHED BY ORDINARY POST OR
DELIVERED BY HAND at your own risk to Boardroom Corporate & Advisory Services Pte. Ltd.
50 Raffles Place #32-01 Singapore Land Tower Singapore 048623, to arrive by 12.00 noon on 21
October 2010 or such other time as we may, in consultation with the Manager, decide. Local
Urgent Mail or Registered Post must NOT be used. No acknowledgement of receipt will be
issued for any application or remittance received.
C-7
ADDITIONAL TERMS AND CONDITIONS FOR ELECTRONIC APPLICATIONS
The procedures for Electronic Applications at ATMs are set out on the ATM screens (in the case on ATM
Electronic Applications) and the IB website screens (in the case of Internet Electronic Applications) of the
relevant Participating Banks. Currently, DBS Bank and the UOB Group are the only Participating Banks
through which Internet Electronic Applications can be made. For illustration purposes, the procedures for
Electronic Applications through ATMs of DBS Bank and the IB website of DBS Bank are set out
respectively in the “Steps for an Electronic Application for Offer Shares through of DBS Bank ATMs
(including POSB)” and the “Steps for an Internet Electronic Application through the IB website of DBS
Bank” (the “Steps”) appearing on pages C12 to C15 of this Prospectus.
The Steps set out the actions that you must take at an ATM or IB website of DBS Bank to complete an
Electronic Application. Please read carefully the terms of this Prospectus, the Steps and the terms and
conditions for Electronic Applications set out below before making an Electronic Application. Any
reference to “you” in the additional terms and conditions for Electronic Applications and the Steps shall
refer to you making an application for Offer Shares through an ATM or the IB website of a relevant
Participating Bank.
You must have an existing bank account with and be an ATM cardholder of one of the Participating Banks
before you can make an Electronic Application at the ATMs. An ATM card issued by one Participating
Bank cannot be used to apply for Offer Shares at an ATM belonging to other Participating Banks. For an
Internet Electronic Application, you must have an existing bank account with and an IB User Identification
(“User ID”) and a Personal Identification Number/Password given by a relevant Participating Bank. The
Steps set out the actions that you must take at ATMs of DBS Bank or the IB website of DBS Bank to
complete an Electronic Application. The actions that you must take at ATMs or the IB websites of other
Participating Banks are set out on the ATM screens or the IB website screens of the relevant Participating
Banks. Upon the completion of your Electronic Application transaction, you will receive an ATM
transaction slip (“Transaction Record”), confirming the details of your Electronic Application. Upon
completion of your Internet Electronic Application, there will be an on-screen confirmation (“Confirmation
Screen”) of the application which you can print out for your record. The Transaction Record or your
printed record of the Confirmation Screen is for your retention and should not be submitted with any
Application Form.
You must ensure that you enter your own Securities Account number when using the ATM card issued to
you in your own name. If you operate a joint bank account with any of the Participating Banks, you must
ensure that you enter your own Securities Account number when using the ATM card issued to you in
your own name. Using your own Securities Account number with an ATM card which is not issued to you
in your own name will render your Electronic Application liable to be rejected.
For an Internet Electronic Application, you must have a bank account with and a User Identification ID
(“User ID”) and a Personal Identification Number (“PIN”) given by the relevant Participating Banks. Upon
completion of your Internet Electronic Application through the IB website of DBS Bank, there will be an
on-screen confirmation (“Confirmation Screen”) of the application which can be printed out by you for
your record. This printed record of the Confirmation Screen is for your retention and should not be
submitted with any printed Application Form.
You must ensure, when making an Internet Electronic Application that:-
(a) you are currently in Singapore at the time of making such application;
(b) your mailing address for IB with the relevant Participating Bank is in Singapore;
(c) you are not a US person(1) (as such term is defined in Regulation S under the United States
Securities Act of 1933, as amended from time to time);
and you will be asked to declare accordingly. Otherwise, your application is liable to be rejected.
Note:-
(1) For details, please refer to definition of “US person” on the IB websites.
C-8
You shall make an Electronic Application on the terms and subject to the conditions of this Prospectus
including but not limited to the terms and conditions appearing below and those set out under the section
on “TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION AND ACCEPTANCE” on pages
C1 to C15 of this Prospectus as well as the Memorandum of Association and Articles of Association of
our Company.
1. In connection with your Electronic Application for Offer Shares, you are required to confirm
statements to the following effect in the course of activating the ATM for your Electronic
Application:-
(a) that you have received a copy of this Prospectus and has read, understood and
agreed to all the terms and conditions of application for Offer Shares and this
Prospectus prior to effecting the Electronic Application and agree to be bound by the
same;
(b) that you consent to the disclosure of your name, NRIC/passport number, address,
nationality, permanent resident status, CDP Securities Account number, and share
application amount (the “Relevant Particulars”) from your account with that
Participating Bank to the Share Registrar, CDP, SCCS, the Company, the Vendors, the
Manager, the Underwriter and Placement Agent (the “Relevant Parties”); and
(c) that this is your only application and it is made in your own name and at your own
risk.
Your application will not be successfully completed and cannot be recorded as a completed
transaction in the ATM unless you press the “Enter” or “OK” or “Confirm” or “Yes” key. By doing so,
you shall be treated as signifying your confirmation of each of the above three statements. In
respect of statement 1(b) above, your confirmation, by pressing the “Enter” or “OK” or “Confirm” or
“Yes” key, shall signify and shall be treated as your written permission, given in accordance with the
relevant laws of Singapore including Section 47(4) of the Banking Act (Chapter 19) of Singapore to
the disclosure by that Participating Bank of the Relevant Particulars to the Relevant Parties.
2. BY MAKING AN ELECTRONIC APPLICATION, YOU CONFIRM THAT YOU ARE NOT APPLYING
FOR OFFER SHARES AS NOMINEE OF ANY OTHER PERSON AND THAT ANY ELECTRONIC
APPLICATION THAT YOU MAKE IS THE ONLY APPLICATION MADE BY YOU AS BENEFICIAL
OWNER.
YOU SHOULD MAKE ONLY ONE ELECTRONIC APPLICATION FOR OFFER SHARES AND
SHOULD NOT MAKE ANY OTHER APPLICATION FOR OFFER SHARES, WHETHER AT THE
ATM OR THE IB WEBSITES OF ANY PARTICIPATING BANK OR ON THE APPLICATION
FORMS. IF YOU HAVE MADE AN APPLICATION FOR OFFER SHARES ON AN APPLICATION
FORM, YOU SHALL NOT MAKE AN ELECTRONIC APPLICATION FOR OFFER SHARES AND
VICE VERSA.
3. You must have sufficient funds in your bank account with your Participating Bank at the time you
make your Electronic Application, failing which your Electronic Application will not be completed.
Any Electronic Application which does not conform strictly to the instructions set out on
the screens of the ATM or IB website through which your Electronic Application is being
made shall be rejected.
4. You irrevocably agree and undertake to subscribe for and to accept the number of Offer Shares
applied for as stated on the Transaction Record or any lesser number of Offer Shares that may be
allotted or allocated to you in respect of your Electronic Application. In the event that we decide to
allot or allocate any lesser number of such Offer Shares or not to allot any Offer Shares to you, you
agree to accept such decision as final. If your Electronic Application is successful, your
confirmation (by your action of pressing the “Enter” or “OK” or “Confirm” or “Yes” key on the ATM or
clicking “Confirm” or “OK” on the IB website screen) of the number of Offer Shares applied for shall
signify and shall be treated as your acceptance of the number of Offer Shares that may be allotted
or allocated to you and your agreement to be bound by the Memorandum of Association and
Articles of Association of our Company.
C-9
5. We will not keep any applications in reserve. Where your Electronic Application is
unsuccessful, the full amount of the application monies will be refunded in Singapore dollars
(without interest or any share of revenue or other benefit arising therefrom) to you by being
automatically credited to your account with your Participating Bank within 24 hours balloting.
Trading on a “WHEN ISSUED” basis, if applicable, is expected to commence after such
refund has been made.
Where your Electronic Application is rejected or accepted in part only, the full amount or the
balance of the application monies, as the case may be, will be refunded in Singapore dollars
(without interest or any share of revenue or other benefit arising therefrom) to you by being
automatically credited to your account with your Participating Bank within 14 Market Days after the
close of the Application List.
Responsibility for timely refund of application monies arising from unsuccessful or partially
successful Electronic Applications lies solely with the respective Participating Banks. Therefore,
you are strongly advised to consult your Participating Bank as to the status of your Electronic
Application and/or the refund of any monies to you from unsuccessful or partially successful
Electronic Application, to determine the exact number of Offer Shares allotted to you before trading
the Offer Shares on the SGX-ST. Neither the SGX-ST, the CDP, the SCCS, the Participating
Banks, our Company, the Vendors, the Manager, the Underwriter nor Placement Agent assume any
responsibility for any loss that may be incurred as a result of you having to cover any net sell
positions or from buy-in procedures activated by the SGX-ST.
If your Electronic Application is unsuccessful, no notification will be sent by the relevant

Participating Banks.
If your Internet Electronic Application made through the IB websites of DBS Bank or UOB Group is
unsuccessful, no notification will be sent by such Participating Bank.
If you make Electronic Applications through the ATMs of the following banks, you may check the
results of your Electronic Applications as follows:-
Service expected
Bank Telephone Available at Operating hours from
UOB 1800 222 2121 ATM (Other ATM / Phone Evening of the
Group Transactions – “IPO Banking – balloting day
Enquiry”)(1) 24 hours a day
http://uobgroup.com(1),(2) Internet Banking – Evening of the

24 hours a day balloting day
DBS 1800 339 6666 Internet Banking 24 hours a day Evening of the
Bank (for POSB account http://www.dbs.com(2) balloting day
holders)
1800 111 1111

(for DBS account
holders)
OCBC 1800 363 3333 ATM/Internet Banking/ 24 hours a day Evening of the
Bank Phone Banking(3) balloting day
Notes:-
(1) If you have made your Electronic Offer Shares Application through the ATMs or IB website of the UOB Group, you
may check the results of your application through UOB Personal Internet Banking, ATMs of the UOB Group or UOB
Phone Banking services.
(2) If you have made your Internet Offer Shares Application through the IB websites of the UOB Group or DBS Bank, you
may also check the results of your application through the same channels in the table above in relation to ATM
Electronic Offer Shares Application made at ATMs of the UOB Group or DBS Bank.
(3) If you have made your Electronic Offer Shares Application through the ATMs of OCBC Bank, you may check the
results of your application through the same channels listed in the table above.
C-10
6. Electronic Applications shall close at 12.00 noon on 21 October 2010 or such other time as
we may, in consultation with the Manager, decide. All Internet Electronic Applications must
be received by 12.00 noon on 21 October 2010. Subject to paragraph 8 below, an Internet
Electronic Application is deemed to be received when it enters the designated information system
of the relevant Participating Bank.
7. You are deemed to have requested and authorised us to:
(a) register the Offer Shares allotted to you in the name of CDP for deposit into your Securities
Account;
(b) send the relevant Share certificate(s) to CDP;
(c) return or refund (without interest or any share of revenue earned or other benefit arising
therefrom) the application monies, should your Electronic Application be rejected, by
automatically crediting your bank account with your Participating Bank with the relevant
amount within 24 hours after balloting; and
(d) return or refund (without interest or any share of revenue or other benefit arising therefrom)
the full amount or balance of the application monies, should your Electronic Application be
accepted in part only, by automatically crediting your bank account with your Participating
Bank with the relevant amount within 14 Market Days after the close of the Application List.
8. You irrevocably agree and acknowledge that your Electronic Application is subject to risks of
electrical, electronic, technical and computer-related faults and breakdowns, fires, acts of God and
other events beyond the control of the Participating Banks and if, in any such event, we, the
Manager and/or the relevant Participating Bank do not receive your Electronic Application, or data
relating to your Electronic Application is lost, corrupted or not otherwise accessible, whether wholly
or partially for whatever reason, you shall be deemed not to have made an Electronic Application
and you shall have no claim whatsoever against us, the Manager and/or the relevant Participating
Bank for Offer Shares applied for or for any compensation, loss or damage.
9. We do not recognise the existence of a trust. Any Electronic Application by a trustee must be
made in your own name and without qualification. We will reject any application by any person
acting as nominee.
10. All your particulars in the records of your Participating Bank at the time you make your Electronic
Application shall be deemed to be true and correct and your Participating Bank and the Relevant
Parties shall be entitled to rely on the accuracy thereof. If there has been any change in your
particulars after making your Electronic Application, you shall promptly notify your Participating
Bank.
11. You should ensure that your personal particulars as recorded by both CDP and the relevant
Participating Bank are correct and identical, otherwise, your Electronic Application is liable
to be rejected. You should promptly inform CDP of any change in address, failing which the
notification letter on successful allotment will be sent to your address last registered with CDP.
12. By making and completing an Electronic Application, you are deemed to have agreed that:-
(a) in consideration of us making available the Electronic Application facility, through the
Participating Banks acting as our agents, at the ATMs and the IB websites (if any):-
(i) your Electronic Application is irrevocable; and
(ii) your Electronic Application, our acceptance and the contract resulting therefrom under
the Invitation shall be governed by and construed in accordance with the laws of
Singapore and you irrevocably submit to the non-exclusive jurisdiction of the
Singapore courts;
C-11
(b) none of our Company, the Manager or the Participating Banks shall be liable for any delays,
failures or inaccuracies in the recording, storage or in the transmission or delivery of data
relating to your Electronic Application to us or CDP due to breakdowns or failure of
transmission, delivery or communication facilities or any risks referred to in paragraph 9
above or to any cause beyond their respective controls;
(c) in respect of Offer Shares for which your Electronic Application has been successfully
completed and not rejected, acceptance of your Electronic Application shall be constituted by
written notification by or on our behalf and not otherwise, notwithstanding any payment
received by or on our behalf;
(d) you will not be entitled to exercise any remedy of rescission for misrepresentation at any
time after acceptance of your application; and
(e) reliance is placed solely on information contained in this Prospectus and that none of our
Company, the Vendors, the Manager, the Underwriter and Placement Agent nor any other
person involved in the Invitation shall have any liability for any information not so contained.
The instructions for Electronic Applications will appear on the ATM screens and the IB website
screens. For illustration purposes, the steps for making an Electronic Application through an ATM
belonging to DBS Bank or through the IB website of DBS Bank are shown below. Instructions for
Electronic Applications on the ATM screens and the IB websites screens (if any) of the
Participating Banks, other than DBS Bank, may differ from those represented below.
Steps for an Electronic Application for Offer Shares through DBS Bank ATMs (including POSB
ATMs)
Instructions for ATM Electronic Applications will appear on the ATM screens of the Participating Banks.
For illustration purposes, the steps for making an ATM Electronic Application through a DBS Bank ATM
(including POSB ATM) are shown below. Certain words appearing on the screen are in abbreviated form
(“A/c”, “amt”, “appln”, “&”, “I/C”, “SGX” and “No.” refer to “Account”, “amount”, “application”, “and”, “NRIC”,
“SGX-ST” and “Number” respectively. Instructions for ATM Electronic Applications on the ATM screens of
Participating Banks (other than DBS Bank (including POSB ATMs)), may differ slightly from those
represented below.
Step 1 : Insert your personal DBS Bank or POSB ATM Card.
2 : Enter your Personal Identification Number.
3 : Select “MORE SERVICES”.
4 : Select “LANGUAGE” (FOR CUSTOMERS USING MULTI-LANGUAGE CARD).
5 : Select “ESA-IPO SHARE”.
6 : Select “ELECTRONIC SECURITY APPLICATION (IPOS/BOND/ST-NOTES/

SECURITIES)“.
7 : Read and understand the following statements which will appear on the screen:-
THE OFFER OF SECURITIES (OR UNITS OF SECURITIES) WILL BE MADE IN,

OR ACCOMPANIED BY, A COPY OF THE PROSPECTUS/DOCUMENT OR
PROFILE STATEMENT (AND IF APPLICABLE, A COPY OF THE REPLACEMENT
OR SUPPLEMENTARY PROSPECTUS/DOCUMENT OR PROFILE STATEMENT)
WHICH CAN BE OBTAINED FROM ANY DBS/POSB BRANCH IN SINGAPORE
AND, WHERE APPLICABLE, THE VARIOUS PARTICIPATING BANKS DURING
BANKING HOURS, SUBJECT TO AVAILABILITY.
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(IN THE CASE OF SECURITIES OFFERING THAT IS SUBJECT TO A
PROSPECTUS/OFFER INFORMATION STATEMENT/DOCUMENT REGISTERED
WITH THE MONETARY AUTHORITY OF SINGAPORE) ANYONE WISHING TO
ACQUIRE THESE SECURITIES (OR UNITS OF SECURITIES) SHOULD READ
THE PROSPECTUS/DOCUMENT OR PROFILE STATEMENT (AS
SUPPLEMENTED OR REPLACED, IF APPLICABLE) BEFORE SUBMITTING HIS
APPLICATION WHICH WILL NEED TO BE MADE IN THE MANNER SET OUT IN
THE PROSPECTUS/DOCUMENT OR PROFILE STATEMENT (AS
SUPPLEMENTED OR REPLACED, IF APPLICABLE). A COPY OF THE
REPLACEMENT OR SUPPLEMENTARY PROSPECTUS/DOCUMENT OR
PROFILE STATEMENT AND IF APPLICABLE, A COPY OF THE REPLACEMENT
OR SUPPLEMENTARY PROSPECTUS HAS BEEN LODGED WITH AND
REGISTERED BY THE MONETARY AUTHORITY OF SINGAPORE WHO
ASSUMES NO RESPONSIBILITY FOR ITS OR THEIR CONTENTS.
PRESS THE “ENTER” KEY TO CONFIRM THAT YOU HAVE READ AND
UNDERSTOOD.
8 : Select “ANCHUN” to display details.
9 : Press the “Enter” key to acknowledge:-
YOU HAVE READ, UNDERSTOOD AND AGREED TO ALL TERMS OF THE

APPLICATION AND PROSPECTUS/DOCUMENT OR PROFILE STATEMENT,
AND IF APPLICABLE, THE REPLACEMENT OR SUPPLEMENTARY
PROSPECTUS/DOCUMENT OR PROFILE STATEMENT.
YOU CONSENT TO DISCLOSE YOUR NAME, NRIC/PASSPORT NO., ADDRESS,

NATIONALITY, CDP SECURITIES A/C NO., CPF INVESTMENT A/C NO. AND
SECURITY APPLICATION AMOUNT FROM YOUR BANK A/C(S) TO SHARE
REGISTRARS, SGX, SCCS, CDP, CPF AND THE ISSUER/ VENDOR(S).
FOR FIXED AND MAX PRICE SECURITY APPLICATION, THIS IS YOUR ONLY
APPLICATION AND IT IS MADE IN YOUR OWN NAME AND AT YOUR OWN
RISK.
THE MAXIMUM PRICE FOR EACH SHARE IS PAYABLE IN FULL ON

APPLICATION AND SUBJECT TO REFUND IF THE FINAL PRICE IS LOWER.
FOR TENDER SECURITY APPLICATIONS, THIS IS YOUR ONLY APPLICATION

AT THE SELECTED TENDER PRICE AND IT IS MADE IN YOUR OWN NAME
AND AT YOUR OWN RISK.
YOU ARE NOT A US PERSON AS REFERRED TO IN THE

PROSPECTUS/DOCUMENT OR PROFILE STATEMENT, AND IF APPLICABLE,
THE REPLACEMENT OR SUPPLEMENTARY PROSPECTUS/DOCUMENT OR
PROFILE STATEMENT.
THERE MAY BE A LIMIT ON THE MAXIMUM NUMBER OF SECURITIES THAT

YOU CAN APPLY FOR SUBJECT TO AVAILABILITY, YOU MAY BE ALLOCATED A
SMALLER NUMBER OF SECURITIES THAN YOU APPLIED FOR OR (IN THE
CASE OF AN EARLIER CLOSURE UPON FULL SUBSCRIPTION) YOUR
APPLICATION MAY BE REJECTED IF ALL THE AVAILABLE SECURITIES HAVE
BEEN FULLY ALLOCATED TO EARLIER APPLICANTS.
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10 : Select your nationality.
11 : Select your payment method (i.e. by cash, CPF Funds, or a combination of cash and CPF
Funds).
12 : Select the DBS Bank account (Autosave/Current/Savings/Savings Plus) or the POSB

account (Current/Savings) from which to debit your application monies.
13 : Enter the number of securities you wish to apply for using cash.
14 : Enter the number of securities you wish to apply for using CPF Funds (if applicable).
15 : Enter or confirm (if your CDP Securities Account number has already been stored in DBS
Bank’s records) your own 12-digit CDP Securities Account number. (Note: This step will
be omitted automatically if your Securities Account number has already been stored in
DBS Bank’s records).
16 : Check the details of your share application, your NRIC or Passport Number and CDP
Securities Account Number and number of securities on the screen and press the
“ENTER” key to confirm application.
17 : Remove the Transaction Record for your reference and retention only.
Steps for an Internet Electronic Application through the IB Website of DBS Bank
For illustrative purposes, the steps for making an Internet Electronic Application through the DBS Bank IB
website is shown below. Certain words appearing on the screen are in abbreviated form (“A/c”, “amt”,
“&”, “I/C”, “SGX” and “No.” refer to “Account”, “amount”, “and”, “NRIC”, “SGX-ST” and “Number”
respectively).
Step 1 : Click on to DBS Bank website www.dbs.com.
2 : Login to Internet Banking.
3 : Enter your User ID and PIN.
4 : Select “Electronic Security Application (ESA)”.
5 : Click “Yes” to proceed and to warrant, inter alia, that you are currently in Singapore, you
have observed and complied with all applicable laws and regulations and that your
mailing address for DBS Internet Banking is in Singapore and that you are not a US
person (as such term is defined in Regulation S under the US Securities Act of 1993, as
amended).
6 : Select your country of residence and click “I confirm”.
7 : Click on “ANCHUN” and click the “Submit” button.
8 : Click “I Confirm” to confirm, inter alia:-
(a) You have read, understood and agreed to all terms of application and the
Prospectus/Document or Profile Statement and if applicable, the Supplementary or
Replacement Prospectus/Document or Profile Statement;
(b) You consent to disclose your name, IC or passport number, address, nationality,
CDP Securities Account number, CPF Investment account number (if applicable)
and securities application amount from your DBS/POSB Account(s) to registrars of
securities, SGX, SCCS, CDP, CPF Board and issuer/ vendor(s);
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(c) You are not a US person (as such term defined in Regulation S under the US
Securities Act of 1933, as amended);
(d) You understand that the securities mentioned herein have not been and will not be
registered under the United States Securities Act of 1993 as amended (the “US
Securities Act”) or the securities laws of any state of the United States and may not
be offered or sold in the United States or to, or for the account or benefit of any
“US person” (as defined in the Regulation S under the US Securities Act) except
pursuant to an exemption from or in a transaction subject to, the registration
requirements of the US Securities Act and applicable state securities laws. These
will be no public offer of the securities mentioned herein in the United States. Any
failure to comply with this restriction may constitute a violation of the United States
securities laws;
(e) This application is made in your name and at your own risk; and
(f) For FIXED/MAX price share application, this is your only application. For TENDER
price securities application, this is your only application at the selected tender price
Step 9 : Fill in details for share application and click “Submit”.
Step 10 : Check details of your share application, your I/C/passport No. and click “OK” to confirm
your application.
Step 11 : Print Confirmation Screen (optional) for your reference & retention only.
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APPENDIX D – SELECTED EXTRACTS OF OUR ARTICLES OF ASSOCIATION
The discussion below provides information about certain provisions of our Memorandum and Articles of
Association and the laws of Singapore. This description is only a summary and is qualified by reference to
Singapore law and our Articles.
The instruments that constitute and define our Company are the Memorandum and Articles of
Association of our Company.
Memorandum of Association
The registration number with which our Company was incorporated is (Registration No.200920277C).
Our Memorandum of Association states that the liability of our Shareholders is limited to the amount, if
any, for the time being unpaid on the shares respectively held by them.
Articles of Association
The provisions in the Articles of Association of our Company relating to:-
(a) a Director’s power to vote on a proposal, arrangement or contract in which the Director is
Interested
Article 100
A Director shall not vote in respect of any contract or arrangement or any other proposal
whatsoever in which he has any interest, directly or indirectly. A Director shall not be counted in the
quorum at a meeting in relation to any resolution on which he is debarred from voting.
(b) the Director’s power to vote on remuneration (including pension or other benefits) for himself or for
any other director, and whether the quorum at an meeting of the board of Directors to vote on
Directors’ remuneration may include the director whose remuneration is the subject of the vote
Article 77
The ordinary remuneration of the Directors, which shall from time to time be determined by an
Ordinary Resolution of the Company, shall not be increased except pursuant to an Ordinary
Resolution passed at a General Meeting where notice of the proposed increase shall have been
given in the notice convening the General Meeting and shall (unless such resolution otherwise
provides) be divisible among the Directors as they may agree, or failing agreement, equally, except
that any Director who shall hold office for part only of the period in respect of which such
remuneration is payable shall be entitled only to rank in such division for a proportion of
remuneration related to the period during which he has held office. The ordinary remuneration of an
executive Director may not include a commission on or a percentage of turnover and the ordinary
remuneration of a non-executive Director shall be a fixed sum, and not by a commission on or a
percentage of profits or turnover.
Article 78
Any Director who holds any executive office, or who serves on any committee of the Directors, or
who otherwise performs services which in the opinion of the Directors are outside the scope of the
ordinary duties of a Director, may be paid such extra remuneration by way of salary, commission or
otherwise as the Directors may determine, other than by a commission on or percentage of
commission or turnover, Provided that such extra remuneration (in case of an executive Director)
shall not by way of commission on or a percentage of turnover and (in the case of a non-executive
Director) shall be by a fixed sum, and not by a commission on or a percentage of profits or
turnover.
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Article 79
The Directors may repay to any Director all such reasonable expenses as he may incur in
attending and returning from meetings of the Directors or of any committee of the Directors or
General Meetings or otherwise in or about the business of the Company.
Article 80
The Directors shall have power to pay and agree to pay pensions or other retirement,
superannuation, death or disability benefits to (or to any person in respect of) any Director for the
time being holding any executive office and for the purpose of providing any such pensions or other
benefits to contribute to any scheme or fund or to pay premiums.
(c) borrowing powers exercisable by the Directors and how such borrowing powers can be varied
Article 108
Subject as hereinafter provided and to the provisions of the Statutes, the Directors may exercise all
the powers of the Company to borrow money, to mortgage or charge its undertaking, property and
uncalled capital and to issue debentures and other securities, whether outright or as collateral
security for any debt, liability or obligation of the Company or of any third party.
(d) retirement or non-retirement of Directors under an age limit requirement
Article 89
At each Annual General Meeting, one-third of the Directors for the time being (or, if their number is
not a multiple of three, the number nearest to but not less than one-third) shall retire from office by
rotation, Provided that no Director holding office as Managing Director shall be subject to
retirement by rotation or be taken into account in determining the number of Directors to retire. For
the avoidance of doubt, each Director (other than a Director holding office as Managing Director)
shall retire at least once every three years.
Article 90
The Directors to retire by rotation shall include (so far as necessary to obtain the number required)
any Director who is due to retire at the meeting by reason of age or who wishes to retire and not to
offer himself for re-election. Any further Directors so to retire shall be those of the other Directors
subject to retirement by rotation who have been longest in office since their last re-election or
appointment and so that as between persons who became or were last re-elected Directors on the
same day, those to retire shall (unless they otherwise agree among themselves) be determined by
ballot. A retiring Director shall be eligible for re-election.
Article 91
The Company at a General Meeting at which a Director retires under any provision of these
Articles may by Ordinary Resolution fill the office being vacated by electing thereto the retiring
Director or some other person eligible for appointment. In default, the retiring Director shall be
deemed to have been re-elected except in any of the following cases:-
(a) where at such meeting it is expressly resolved not to fill such office or a resolution for the re-
election of such Director is put to the meeting and lost; or
(b) where such Director has given notice in writing to the Company that he is unwilling to be re-
elected; or
(c) where the default is due to the moving of a resolution in contravention of the next following
Article; or
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(d) where such Director has attained any retiring age applicable to him as Director.
The retirement shall not have effect until the conclusion of the meeting except where a resolution is
passed to elect some other person in the place of the retiring Director or a resolution for his re-
election is put to the meeting and lost and accordingly a retiring Director who is re-elected or
deemed to have been re-elected will continue in office without a break.
(e) the number of shares, if any, required for Director’s qualification
Article 76
A Director shall not be required to hold any shares of the Company by way of qualification. A
Director who is not a member of the Company shall nevertheless be entitled to receive notice of
and to attend and speak at General Meetings.
(f) rights, preferences and restrictions attaching to each class of shares
Article 3
(A) Subject to the Act and these Articles, no shares may be issued by the Directors without the
prior approval of the Company in General Meeting pursuant to Section 161 of the Act, but
subject thereto and the terms of such approval, and to Article 5, and to any special rights
attached to any shares for the time being issued, the Directors may allot and issue shares or
grant options over or otherwise dispose of the same to such persons on such terms and
conditions and for such consideration and at such time and whether or not subject to the
payment of any part of the amount thereof in cash or otherwise as the Directors may think
fit, and any shares may, subject to compliance with Sections 70 and 75 of the Act, be issued
with such preferential, deferred, qualified or special rights, privileges, conditions or
restrictions, whether as regards dividend, return of capital, participation in surplus assets
and profits, voting, conversion or otherwise, as the Directors may think fit, and preference
shares may be issued which are or at the option of the Company are liable to be redeemed,
the terms and manner of redemption being determined by the Directors in accordance with
the Act, Provided Always that no options shall be granted over unissued shares except in
accordance with the Act and the Designated Stock Exchange’s listing rules.
(B) The Directors may, at any time after the allotment of any share but before any person has
been entered in the Register of Members as the holder, recognize a renunciation thereof by
the allottee in favour of some other person and may accord to any allottee of a share a right
to effect such renunciation upon and subject to such terms and conditions as the Directors
may think fit to impose.
(C) Except so far as otherwise provided by the conditions of issue or by these Articles, all new
shares shall be issued subject to the provisions of the Statutes and of these Articles with
reference to allotment, payment of calls, lien, transfer, transmission, forfeiture or otherwise.
Article 8
(A) Preference shares may be issued subject to such limitation thereof as may be prescribed by
the Designated Stock Exchange. Preference shareholders shall have the same rights as
ordinary shareholders as regards receiving of notices, reports and balance-sheets and
attending General Meetings of the Company, and preference shareholders shall also have
the right to vote at any General Meeting convened for the purpose of reducing capital or
winding-up or sanctioning a sale of the undertaking of the Company or where the proposal
to be submitted to the General Meeting directly affects their rights and privileges or when the
Dividend on the preference shares is more than six months in arrear.
(B) The Company has power to issue further preference capital ranking equally with, or in
priority to, preference shares already issued.
D-3
Article 9
(A) Whenever the share capital of the Company is divided into different classes of shares, the
variation or abrogation of the special rights attached to any class may, subject to the
provisions of the Act, be made either with the consent in writing of the holders of three-
quarters of the total number of issued shares of the class or with the sanction of a Special
Resolution passed at a separate General Meeting of the holders of the shares of the class
(but not otherwise) and may be so made either whilst the Company is a going concern or
during or in contemplation of a winding-up. To every such separate General Meeting all the
provisions of these Articles relating to General Meetings of the Company and to the
proceedings thereat shall mutatis mutandis apply, except that the necessary quorum shall be
two or more persons holding at least one-third of the total number of the issued shares of
the class present in person or by proxy or attorney and that any holder of shares of the class
present in person or by proxy or attorney may demand a poll and that every such holder
shall on a poll have one vote for every share of the class held by him where the class is a
class of equity shares within the meaning of Section 64(1) of the Companies Act or at least
one vote for every share of the class where the class is a class of preference shares within
the meaning of Section 180(2) of the Act, Provided Always that where the necessary
majority for such a Special Resolution is not obtained at such General Meeting, the consent
in writing, if obtained from the holders of three-quarters of the total number of the issued
shares of the class concerned within two months of such General Meeting, shall be as valid
and effectual as a Special Resolution carried at such General Meeting.
(B) The provisions in Article 9(A) shall mutatis mutandis apply to any repayment of preference
capital (other than redeemable preference capital) and any variation or abrogation of the
rights attached to preference shares or any class thereof.
(C) The special rights attached to any class of shares having preferential rights shall not unless
otherwise expressly provided by the terms of issue thereof be deemed to be varied by the
creation or issue of further shares ranking as regards participation in the profits or assets of
the Company in some or all respects pari passu therewith but in no respect in priority
thereto.
Article 14
Every person whose name is entered as a Member in the Register of Members shall be entitled,
within ten market days (or such period as the Directors may determine having regard to any
limitation thereof as may be prescribed by the Designated Stock Exchange from time to time) after
the closing date of any application for shares or (as the case may be) the date of lodgement of a
registrable transfer, to one certificate for all his shares of any one class or to several certificates in
reasonable denominations each for a part of the shares so allotted or transferred.
Article 34
(A) There shall be no restriction on the transfer of fully paid up shares (except where required by
law or by the rules, bye-laws or listing rules of the Designated Stock Exchange) but the
Directors may in their discretion decline to register any transfer of shares upon which the
Company has a lien, and in the case of shares not fully paid up, may refuse to register a
transfer to a transferee of whom they do not approve, Provided Always that in the event of
the Directors refusing to register a transfer of shares, the Company shall within ten market
days (or such period as the Directors may determine having regard to any limitation thereof
as may be prescribed by the Designated Stock Exchange from time to time) after the date
on which the application for a transfer of shares was made, serve a notice in writing to the
applicant stating the facts which are considered to justify the refusal as required by the
Statutes.
D-4
(B) The Directors may decline to register any instrument of transfer unless:-
(a) such fee not exceeding S$2.00 (or such other fee as the Directors may determine
having regard to any limitation thereof as may be prescribed by the Designated Stock
Exchange from time to time) as the Directors may from time to time require is paid to
the Company in respect thereof;
(b) the amount of proper duty (if any) with which each instrument of transfer is chargeable
under any law for the time being in force relating to stamps is paid;
(c) the instrument of transfer is deposited at the Office or at such other place (if any) as
the Directors may appoint accompanied by a certificate of payment of stamp duty (if
stamp duty is payable on such instrument of transfer in accordance with any law for
the time being in force relating to stamp duty,), the certificates of the shares to which it
relates, and such other evidence as the Directors may reasonably require to show the
right of the transferor to make the transfer and, if the instrument of transfer is executed
by some other person on his behalf, the authority of the person so to do; and
(d) the instrument of transfer is in respect of only one class of shares.
Article 41
A reference to a member shall be a reference to a registered holder of shares in the Company, or
where such registered holder is CDP, the Depositors on behalf of whom CDP holds the shares,
Provided that:-
(a) a Depositor shall only be entitled to attend any General Meeting and to speak and vote
thereat if his name appears on the Depository Register maintained by CDP forty eight (48)
hours before the General Meeting as a Depositor on whose behalf CDP holds shares in the
Company, the Company being entitled to deem each such Depositor, or each proxy of a
Depositor who is to represent the entire balance standing to the Securities Account of the
Depositor, to represent such number of shares as is actually credited to the Securities
Account of the Depositor as at such time, according to the records of CDP as supplied by
CDP to the Company, and where a Depositor has apportioned the balance standing to his
Securities Account between two proxies, to apportion the said number of shares between
the two proxies in the same proportion as previously specified by the Depositor in appointing
the proxies; and accordingly no instrument appointing a proxy of a Depositor shall be
rendered invalid merely by reason of any discrepancy between the proportion of Depositor’s
shareholding specified in the instrument of proxy, or where the balance standing to a
Depositor’s Securities Account has been apportioned between two proxies the aggregate of
the proportions of the Depositor’s shareholding they are specified to represent, and the true
balance standing to the Securities Account of a Depositor as at the time of the General
Meeting, if the instrument is dealt with in such manner as is provided above;
(b) the payment by the Company to CDP of any dividend payable to a Depositor shall to the
extent of the payment discharge the Company from any further liability in respect of the
payment;
(c) the delivery by the Company to CDP of provisional allotments or share certificates in respect
of the aggregate entitlements of Depositors to new shares offered by way of rights issue or
other preferential offering or bonus issue shall to the extent of the delivery discharge the
Company from any further liability to each such Depositor in respect of his individual
entitlement; and
(d) the provisions in these Articles relating to the transfers, transmissions or certification of
shares shall not apply to the transfer of book-entry securities (as defined in the Statutes).
D-5
Article 42
Except as required by the Statutes or law, no person shall be recognised by the Company as
holding any share upon any trust, and the Company shall not be bound by or compelled in any way
to recognize (even when having notice thereof) any equitable, contingent, future or partial interest
in any share, or any interest in any fractional part of a share, or (except only as by these Articles or
by the Statutes or law otherwise provided) any other right in respect of any share, except an
absolute right to the entirety thereof in the registered holder and nothing in these Articles contained
relating to CDP or to Depositors or in any depository agreement made by the Company with any
common depository for shares shall in any circumstances be deemed to limit, restrict or qualify the
above.
Article 63
In the case of joint holders of a share, the vote of the senior who tenders a vote, whether in person
or by proxy, shall be accepted to the exclusion of the votes of the other joint holders and for this
purpose seniority shall be determined by the order in which the names stand in the Register of
Members or, as the case may be, the order in which the names appear in the Depository Register
in respect of the joint holding.
Article 64
Where in Singapore or elsewhere a receiver or other person (by whatever name called) has been
appointed by any court claiming jurisdiction in that behalf to exercise powers with respect to the
property or affairs of any member on the ground (however formulated) of mental disorder, the
Directors may in their absolute discretion, upon or subject to production of such evidence of the
appointment as the Directors may require, permit such receiver or other person on behalf of such
member, to vote in person or by proxy at any General Meeting, or to exercise any other right
conferred by membership in relation to meetings of the Company.
Article 65
No member shall be entitled in respect of shares held by him to vote at a General Meeting either
personally or by proxy or to exercise any other right conferred by membership in relation to
meetings of the Company if any call or other sum payable by him to the Company in respect of
such shares remains unpaid.
(g) any change in capital
Article 10
The Company may by Ordinary Resolution:-
(A) consolidate and divide all or any of its share capital;
(B) sub-divide its shares, or any of them, provided always that in such subdivision the proportion
between the amount paid and the amount (if any) unpaid on each reduced share shall be
same as it was in the case of the share from which the reduced share is derived;
(C) convert or exchange any class of shares into or for any other class of shares; and/or
(D) cancel the number of shares which at the date of the passing of the resolution in that behalf
have not been taken or agreed to be taken by any person or which have been forfeited and
diminish the amount of its share capital by the number of the shares so cancelled.
D-6
Article 11
(A) The Company may reduce its share capital or any other undistributable reserve in any
manner permitted, and with, and subject to, any incident authorized, and consent or
confirmation required, by law.
(B) The Company may purchase or otherwise acquire its issued shares subject to and in
accordance with the provisions of the Statutes and any applicable rules of the Designated
Stock Exchange hereafter, the “Relevant Laws”), on such terms and subject to such
conditions as the Company may in General Meeting prescribe in accordance with the
Relevant Laws. Any shares purchased or acquired by the Company as aforesaid shall,
unless held in treasury in accordance with the Act, be deemed to be cancelled immediately
on purchase or acquisition by the Company. On the cancellation of any share as aforesaid,
the rights and privileges attached to that share shall expire. In any other instance, the
Company may hold or deal with any such share which is so purchased or acquired by it in
such manner as may be permitted by, and in accordance with the Relevant Laws. Without
prejudice to the generality of the foregoing, upon cancellation of any share purchased or
otherwise acquired by the Company pursuant to these Articles and the Statutes, the number
of issued shares of the Company shall be diminished by the number of shares so cancelled,
and, where any such cancelled share was purchased or acquired out of the capital of the
Company, the amount of share capital of the Company shall be reduced accordingly.
(h) any change in the respective rights of the various classes of shares including the action necessary
to change the rights
Article 9
(A) Whenever the share capital of the Company is divided into different classes of shares, the
variation or abrogation of the special rights attached to any class may, subject to the
provisions of the Act, be made either with the consent in writing of the holders of three-
quarters of the total number of the issued shares of the class or with the sanction of a
Special Resolution passed at a separate General Meeting of the holders of the shares of the
class (but not otherwise) and may be so made either whilst the Company is a going concern
or during or in contemplation of a winding-up. To every such separate General Meeting all
the provisions of these Articles relating to General Meetings of the Company and to the
proceedings thereat shall mutatis mutandis apply, except that the necessary quorum shall be
two or more persons holding at least one-third of the total number of the issued shares of
the class present in person or by proxy or attorney and that any holder of shares of the class
present in person or by proxy or attorney may demand a poll and that every such holder
shall on a poll have one vote for every share of the class held by him where the class is a
class of equity shares within the meaning of Section 64(1) of the Act or at least one vote for
every share of the class where the class is a class of preference shares within the meaning
of Section 180(2) of the Act, Provided Always that where the necessary majority for such a
Special Resolution is not obtained at such General Meeting, the consent in writing, if
obtained from the holders of three-quarters of the total number of the issued shares of the
class concerned within two months of such General Meeting, shall be as valid and effectual
as a Special Resolution carried at such General Meeting.
(B) The provisions in Article 9(A) shall mutatis mutandis apply to any repayment of preference
capital (other than redeemable preference capital) and any variation or abrogation of the
rights attached to preference shares or any class thereof.
(C) The special rights attached to any class of shares having preferential rights shall not unless
otherwise expressly provided by the terms of issue thereof be deemed to be varied by the
creation or issue of further shares ranking as regards participation in the profits or assets of
the Company in some or all respects pari passu therewith but in no respect in priority
thereto.
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(i) dividends and distribution
Article 123
The Company may by Ordinary Resolution declare dividends but no such dividend shall exceed the
amount recommended by the Directors.
Article 124
If and so far as in the opinion of the Directors, the profits of the Company justify such payments,
the Directors may declare and pay the fixed dividends on any class of shares carrying a fixed
dividend expressed to be payable on fixed dates on the half-yearly or other dates prescribed for the
payment thereof and may also from time to time declare and pay interim dividends on shares of
any class of such amounts and on such dates and in respect of such periods as they think fit.
Article 125
Subject to any rights or restrictions attached to any shares or class of shares and except as
otherwise permitted under the Act:-
(A) all Dividends in respect of shares must be paid in proportion to the number of shares held by
a Member, but where shares are partly paid, all Dividends must be apportioned and paid
proportionately to the amounts paid or credited as paid on the partly paid shares; and
(B) all Dividends must be apportioned and paid proportionately to the amounts so paid or
credited as paid during any portion or portions of the period in respect of which the Dividend
is paid.
For the purposes of this Article, an amount paid or credited as paid on a share in advance of a call
is to be ignored.
Article 126
(A) No Dividend shall be paid otherwise than out of profits available for distribution under the
provisions of the Statutes. The payment by the Directors of any unclaimed dividends or other
moneys payable on or in respect of a share into a separate account shall not constitute the
Company a trustee in respect thereof. All Dividends remaining unclaimed after one year from
having been first payable may be invested or otherwise made use of by the Directors for the
benefit of the Company, and any Dividend or any such moneys unclaimed after six (6) years
from having been first payable shall be forfeited and shall revert to the Company provided
always that the Directors may at any time thereafter at their absolute discretion annul any
such forfeiture and pay the Dividend so forfeited to the person entitled thereto prior to the
forfeiture. If CDP returns any such Dividend or moneys to the Company, the relevant
Depositor shall not have any right or claim in respect of such Dividend or moneys against
the Company if a period of six years has elapsed from the date of the declaration of such
Dividend or the date on which such other moneys are first payable.
(B) A payment by the Company to CDP of any Dividend or other moneys payable to a Depositor
shall, to the extent of the payment made, discharge the Company from any liability to the
Depositor in respect of that payment.
Article 127
No dividend or other monies payable on or in respect of a share shall bear interest as against the
Company.
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Article 128
(A) The Directors may retain any dividend or other monies payable on or in respect of a share
on which the Company has a lien and may apply the same in or towards satisfaction of the
debts, liabilities or engagements in respect of which the lien exists.
(B) The Directors may retain the dividends payable upon shares in respect of which any person
is under the provisions as to the transmission of shares herein before contained entitled to
become a member, or which any person is under those provisions entitled to transfer, until
such person shall become a member in respect of such shares or shall transfer the same.
Article 129
The waiver in whole or in part of any dividend on any share by any document (whether or not
under seal) shall be effective only if such document is signed by the member (or the person
entitled to the share in consequence of the death or bankruptcy of the holder) and delivered to the
Company and if or to the extent that the same is accepted as such or acted upon by the Company.
Article 130
The Company may upon the recommendation of the Directors by Ordinary Resolution direct
payment of a dividend in whole or in part by the distribution of specific assets (and in particular of
paid-up shares or debentures of any other company) and the Directors shall give effect to such
resolution. Where any difficulty arises with regard to such distribution, the Directors may settle the
same as they think expedient and in particular, may issue fractional certificates, may fix the value
for distribution of such specific assets or any part thereof, may determine that cash payments shall
be made to any member upon the footing of the value so fixed in order to adjust the rights of all
parties and may vest any such specific assets in trustees as may seem expedient to the Directors.
Article 131
Any dividend or other monies payable in cash on or in respect of a share may be paid by cheque
or warrant sent through the post to the registered address appearing in the Register of Members or
(as the case may be) the Depository Register of the member or person entitled thereto (or, if two or
more persons are registered in the Register of Members or (as the case may be) entered in the
Depository Register as joint holders of the share or are entitled thereto in consequence of the
death or bankruptcy of the holder, to any one of such persons) or to such person and such address
as such member or person or persons may by writing direct.
Every such cheque or warrant shall be made payable to the order of the person to whom it is sent
or to such person as the holder or joint holders or person or persons entitled to the share in
consequence of the death or bankruptcy of the holder may direct and payment of the cheque or
warrant by the banker upon whom it is drawn shall be a good discharge to the Company. Every
such cheque or warrant shall be sent at the risk of the person entitled to the money represented
thereby.
Article 132
If two or more persons are registered in the Register of Members or (as the case may be) the
Depository Register as joint holders of any share, or are entitled jointly to a share in consequence
of the death or bankruptcy of the holder, any one of them may give effectual receipts for any
dividend or other monies payable or property distributable on or in respect of the share.
Article 133
Any resolution declaring a dividend on shares of any class, whether a resolution of the Company in
General Meeting or a resolution of the Directors, may specify that the same shall be payable to the
persons registered as the holders of such shares in the Register of Members or (as the case may
be) the Depository Register at the close of business on a particular date and thereupon the
dividend shall be payable to them in accordance with their respective holdings so registered, but
without prejudice to the rights inter se in respect of such dividend of transferors and transferees of
any such shares.
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(j) any limitation on the right to own Shares, including limitations on the right of non-resident or foreign
Shareholders to hold or exercise voting rights on their Shares
Article 5
(A) Subject to any direction to the contrary that may be given by the Company in General
Meeting or except as permitted by the rules of the Designated Stock Exchange, all new
shares shall before issue be offered to such persons who as at the date (as determined by
the Directors) of the offer are entitled to receive notices from the Company of General
Meetings in proportion, as far as the circumstances admit, to the number of the existing
shares to which they are entitled. The offer shall be made by notice specifying the number
of shares offered, and limiting a time within which the offer, if not accepted, will be deemed
to be declined, and, after the expiration of that time, or on the receipt of an intimation from
the person to whom the offer is made that he declines to accept the shares offered, the
Directors may dispose of those shares in such manner as they think most beneficial to the
Company. The Directors may likewise so dispose of any new shares which (by reason of the
ratio which the new shares bear to shares held by persons entitled to an offer of new shares)
cannot, in the opinion of the Directors, be conveniently offered under this Article 5(A).
(B) Notwithstanding Article 5(A) above, the Company may by Ordinary Resolution in General
Meeting give to the Directors a general authority, either unconditionally or subject to such
conditions as may be specified in the Ordinary Resolution, to:–
(a) (i) issue shares in the capital of the Company (“shares”) whether by way of rights,
bonus or otherwise; and/or
(ii) make or grant offers, agreements or options (collectively, “Instruments”) that

might or would require shares to be issued, including but not limited to the
creation and issue of (as well as adjustments to) warrants, debentures or other
instruments convertible into shares; and
(b) (notwithstanding the authority conferred by the Ordinary Resolution may have ceased
to be in force) issue shares in pursuance of any Instrument made or granted by the
Directors while the Ordinary Resolution was in force,
Provided that:–
(1) the aggregate number of shares to be issued pursuant to the Ordinary

Resolution (including shares to be issued in pursuance of Instruments made or
granted pursuant to the Ordinary Resolution) shall be subject to such limits and
manner of calculation as may be prescribed by the Designated Stock Exchange;
(2) in exercising the authority conferred by the Ordinary Resolution, the Company
shall comply with the provisions of the listing rules of the Designated Stock
Exchange for the time being in force (unless such compliance is waived by the
Designated Stock Exchange) and these Articles; and
(3) (unless revoked or varied by the Company in General Meeting) the authority
conferred by the Ordinary Resolution shall not continue in force beyond the
conclusion of the Annual General Meeting of the Company next following the
passing of the Ordinary Resolution, or the date by which such Annual General
Meeting of the Company is required by law to be held, or the expiration of such
other period as may be prescribed by the Act (whichever is the earliest).
(C) The Company may, notwithstanding Articles 5(A) and 5(B) above, authorize the Directors not
to offer new shares to Members to whom by reason of foreign securities laws, such offers
may not be made without registration of the shares or a prospectus or other document, but
to sell the entitlements to the new shares on behalf of such Members on such terms and
conditions as the Company may direct.
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Article 34
(A) There shall be no restriction on the transfer of fully paid up shares (except where required by
law or by the rules, bye-laws or listing rules of the Designated Stock Exchange) but the
Directors may in their discretion decline to register any transfer of shares upon which the
Company has a lien, and in the case of shares not fully paid up, may refuse to register a
transfer to a transferee of whom they do not approve, Provided Always that in the event of
the Directors refusing to register a transfer of shares, the Company shall within ten market
days (or such period as the Directors may determine having regard to any limitation thereof
as may be prescribed by the Designated Stock Exchange from time to time) after the date
on which the application for a transfer of shares was made, serve a notice in writing to the
applicant stating the facts which are considered to justify the refusal as required by the
Statutes.
(B) The Directors may decline to register any instrument of transfer unless:-
(a) such fee not exceeding S$2.00 (or such other fee as the Directors may determine
having regard to any limitation thereof as may be prescribed by the Designated Stock
Exchange from time to time) as the Directors may from time to time require is paid to
the Company in respect thereof;
(b) the amount of proper duty (if any) with which each instrument of transfer is chargeable
under any law for the time being in force relating to stamps is paid;
(c) the instrument of transfer is deposited at the Office or at such other place (if any) as
the Directors may appoint accompanied by a certificate of payment of stamp duty (if
stamp duty is payable on such instrument of transfer in accordance with any law for
the time being in force relating to stamp duty,), the certificates of the shares to which it
relates, and such other evidence as the Directors may reasonably require to show the
right of the transferor to make the transfer and, if the instrument of transfer is executed
by some other person on his behalf, the authority of the person so to do; and
(d) the instrument of transfer is in respect of only one class of shares.
Article 42
Except as required by the Statutes or law, no person shall be recognised by the Company as
holding any share upon any trust, and the Company shall not be bound by or compelled in any way
to recognise (even when having notice thereof) any equitable, contingent, future or partial interest
in any share, or any interest in any fractional part of a share, or (except only as by these Articles or
by the Statutes or law otherwise provided) any other right in respect of any share, except an
absolute right to the entirety thereof in the registered holder and nothing in these Articles contained
relating to CDP or to Depositors or in any depository agreement made by the Company with any
common depository for shares shall in any circumstances be deemed to limit, restrict or qualify the
above.
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APPENDIX E – DESCRIPTION OF RELEVANT PRC LAWS AND REGULATIONS
PRC legal system

The PRC legal system is based on the PRC Constitution and is made up of written laws, regulations and
directives. Decided court cases do not constitute binding precedents.
The National People’s Congress of the PRC (“NPC”) and the Standing Committee of the NPC are
empowered by the PRC Constitution to exercise the legislative power of the state. The NPC has the
power to amend the PRC Constitution and to enact and amend primary laws governing the state organs,
civil and criminal matters. The Standing Committee of the NPC is empowered to interpret, enact and
amend laws other than those required to be enacted by the NPC.
The State Council of the PRC is the highest organ of state administration and has the power to enact
administrative rules and regulations. Ministries and commissions under the State Council of the PRC are
also vested with the power to issue orders, directives and regulations within the jurisdiction of their
respective departments. Administrative rules, regulations, directives and orders promulgated by the State
Council and its ministries and commissions must not be in conflict with the PRC Constitution or the
national laws and, in the event that any conflict arises, the Standing Committee of the NPC has the power
to annul such administrative rules, regulations, directives and orders.
At the regional level, the people’s congresses of provinces, municipalities and autonomous regions and
their standing committees may enact local rules and regulations and the people’s governments may
promulgate administrative rules and directives applicable to their own administrative areas. These local
laws and regulations may not be in conflict with the PRC Constitution, any national laws or any
administrative rules and regulations promulgated by the State Council.
Rules, regulations or directives may be enacted or issued at the provincial or municipal level or by the
State Council of the PRC or its ministries and commissions in the first instance for experimental
purposes. After sufficient experience has been gained, the State Council may submit legislative
proposals to be considered by the NPC or the Standing Committee of the NPC for enactment at the
national level.
The power to interpret laws is vested by the PRC Constitution in the Standing Committee of the NPC.
According to the Decision of the Standing Committee of the NPC Regarding the Strengthening of
Interpretation of Laws passed on 10th June, 1981, the Supreme People’s Court has the power to give
general interpretation on application of laws in judicial proceedings apart from its power to issue specific
interpretation in specific cases. The State Council and its ministries and commissions are also vested
with the power to give interpretation of the rules and regulations which they promulgated. At the regional
level, the power to give interpretation of regional laws is vested in the regional legislative and
administrative organs which promulgate such laws. All such interpretations carry legal effect.
1. Judicial system
The People’s Courts are the judicial organs of the PRC. Under the PRC Constitution and the Law
of Organisation of the People’s Courts of the People’s Republic of China, the People’s Courts
comprise the Supreme People’s Court, the local people’s courts, military courts and other special
people’s courts. The local people’s courts are divided into three levels, namely, the basic people’s
courts, intermediate people’s courts and higher people’s courts. The basic people’s courts are
divided into civil, criminal, administrative and economic divisions. The intermediate people’s courts
have divisions similar to those of the basic people’s courts and, where the circumstances so
warrant, may have other special divisions (such as intellectual property divisions). The judicial
functions of people’s courts at lower levels are subject to supervision of people’s courts at higher
levels. The people’s procuratorates also have the right to exercise legal supervision over the
proceedings of people’s courts of the same and lower levels. The Supreme People’s Court is the
highest judicial organ of the PRC. It supervises the administration of justice by the people’s courts
of all levels.
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The people’s courts adopt a two-tier final appeal system. A party may before the taking effect of a
judgment or order appeal against the judgment or order of the first instance of a local people’s
court to the people’s court at the next higher level. Judgments or orders of the second instance of
the same level and at the next higher level are final and binding. Judgments or orders of the first
instance of the Supreme People’s Court are also final and binding. If, however, the Supreme
People’s Court or a people’s court at a higher level finds an error in a final and binding judgment
which has taken effect in any people’s court at a lower level, or the presiding judge of a people’s
court finds an error in a final and binding judgment which has taken effect in the court over which
he presides, a retrial of the case may be conducted according to the judicial supervision
procedures.
The PRC civil procedures are governed by the Civil Procedure Law of the People’s Republic of
China (the “Civil Procedure Law”) adopted on 9 April 1991 and amended as of 28 October 2007.
The Civil Procedure Law contains regulations on the institution of a civil action, the jurisdiction of
the people’s courts, the procedures in conducting a civil action, trial procedures and procedures for
the enforcement of a civil judgment or order. All parties to a civil action conducted within the
territory of the PRC must comply with the Civil Procedure Law. A civil case is generally heard by a
court located in the defendant’s place of domicile. The jurisdiction may also be selected by express
agreement by the parties to a contract provided that the selection is not contrary to some special
requirements of jurisdictions, and the jurisdiction of the people’s court selected has some actual
connection with the dispute, that is to say, the plaintiff or the defendant is located or domiciled, or
the contract was executed or implemented in the jurisdiction selected, or the subject-matter of the
proceedings is located in the jurisdiction selected. A foreign national or foreign enterprise is
accorded the same litigation rights and obligations as a citizen or legal person of the PRC. If any
party to a civil action refuses to comply with a judgment or order made by a people’s court or an
award made by an arbitration body in the PRC, the aggrieved party may apply to the people’s court
to enforce the judgment, order or award. The time limits on the right to apply for such enforcement
is two years.
A party seeking to enforce a judgment or order of a people’s court against a party who or whose
property is not within the PRC may apply to a foreign court with jurisdiction over the case for
recognition and enforcement of such judgment or order. A foreign judgment or ruling may also be
recognised and enforced according to PRC enforcement procedures by the people’s courts in
accordance with the principle of reciprocity or if there exists an international or bilateral treaty with
or acceded to by the foreign country that provides for such recognition and enforcement, unless the
people’s court considers that the recognition or enforcement of the judgment or ruling will violate
fundamental legal principles of the PRC or its sovereignty, security or social or public interest.
2. Arbitration and enforcement of arbitral awards

The Arbitration Law of the PRC (the “Arbitration Law”) was promulgated by the Standing
Committee of the NPC on 31st August, 1994 and came into effect on 1st September, 1995. It is
applicable to, among other matters, trade disputes involving foreign parties where the parties have
entered into a written agreement to refer the matter to arbitration before an arbitration committee
constituted in accordance with the Arbitration Law. Under the Arbitration Law, an arbitration
committee may, before the promulgation by the PRC Arbitration Association of arbitration
regulations, formulate interim arbitration rules in accordance with the Arbitration Law and the PRC
Civil Procedure Law. Where the parties have by an agreement provided arbitration as a method for
dispute resolution, the parties are not permitted to institute legal proceedings in a people’s court.
Under the Arbitration Law, an arbitral award is final and binding on the parties and if a party fails to
comply with an award, the other party to the award may apply to the people’s court for
enforcement. A people’s court may refuse to enforce an arbitral award made by an arbitration
committee if there were mistakes, an absence of material evidence or irregularities over the
arbitration proceedings, or the jurisdiction or constitution of the arbitration committee.
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A party seeking to enforce an arbitral award of a foreign affairs arbitration body of the PRC against
a party who or whose property is not within the PRC may apply to a foreign court with jurisdiction
over the case for enforcement. Similarly, an arbitral award made by a foreign arbitration body may
be recognised and enforced by the PRC courts in accordance with the principles of reciprocity or
any international treaty concluded or acceded to by the PRC.
In respect of contractual and non-contractual commercial-law-related disputes which are

recognised as such for the purposes of PRC law, the PRC has acceded to the Convention on the
Recognition and Enforcement of Foreign Arbitral Award (“New York Convention”) adopted on 10th
June, 1958 pursuant to a resolution of the Standing Committee of the NPC passed on 2nd
December, 1986. The New York Convention provides that all arbitral awards made by a state which
is a party to the New York Convention shall be recognised and enforced by other parties to the
New York Convention subject to their right to refuse enforcement under certain circumstances
including where the enforcement of the arbitral award is against the public policy of the state to
which the application for enforcement is made. It was declared by the Standing Committee of the
NPC at the time of the accession of the PRC that (1) the PRC would only recognise and enforce
foreign arbitral awards on the principle of reciprocity and (2) the PRC would only apply the New
York Convention in disputes considered under PRC laws to be arising from contractual and non-
contractual mercantile legal relations.
3. Taxation
(a) Enterprise Income tax
On 1 January 2008, the Foreign-funded Enterprise and Foreign Enterprise Income Tax Law
of the PRC was abolished, and the
Enterprise Income Tax Law of the PRC , promulgated on
16 March 2007, became effective (the “New Income Tax Law”). Pursuant to the New Income
Tax Law, the income tax rate for both domestic enterprises and foreign enterprises is 25%.
Notice of the State Council on the Implementation of the Transitional Preferential Policies in
respect of Enterprise Income Tax
came into effect on 26 December 2007. Enterprises that previously enjoyed the preferential
policies of low tax rates shall be gradually subject to the statutory tax rate within five years
after the implementation of the New Income Tax Law. Accordingly, the enterprises that
enjoyed enterprise income tax rate of 15% shall be subject to the rate of 18% in 2008, 20%
in 2009, 22% in 2010, 24% in 2011 and 25% in 2012. The enterprises that previously
enjoyed the tax rate of 24% shall be subject to the tax rate of 25% as of 2008. As of 1
January 2008, the enterprises that previously enjoyed “two-year exemption and three-year
half payment”, “five-year exemption and five-year half payment” of enterprise income tax and
other preferential treatments in the form of periodic tax deductions and exemptions may, after
the implementation of the New Income Tax Law, can continue to enjoy the relevant
preferential treatments under the preferential measures and the time period prescribed in the
former tax law, administrative regulations and relevant documents until the expiration of the
said time period. However, if such enterprise has not enjoyed the preferential treatments yet
due to its failure to make profits, its preferential time period shall be calculated from 2008.
The expression “enterprises enjoying the preferential policies” as mentioned above refers to
the enterprises established and registered in the industrial and commercial administrative
department and in other registration administrative departments prior to 16 March 2007.
(b) Value added tax

The Provisional Regulations of the People’s Republic of China Concerning Value Added Tax
promulgated by the State Council came into effect on 1st January, 1994. Under these
regulations and the Implementing Rules of the Provisional Regulations of the People’s
Republic of China Concerning Value Added Tax, value added tax is imposed on goods sold
in or imported into the PRC and on processing, repair and replacement services provided
within the PRC.
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Value added tax payable in the PRC is charged on an aggregated basis at a rate of 13% or
17% (depending on the type of goods involved) on the full price collected for the goods sold
or, in the case of taxable services provided, at a rate of 17% on the charges for the taxable
services provided but excluding, in respect of both goods and services, any amount paid in
respect of value added tax included in the price or charges, and less any deductible value
added tax already paid by the taxpayer on purchases of goods and service in the same
financial year.
(c) Business tax

With effect from 1 January 1994, business that provides services, assigns intangible assets
or sells immovable property became liable to business tax at a rate ranging from three to five
per cent. of the charges of the services provided, intangible assets assigned or immovable
property sold, as the case may be.
(d) Tax on dividends from PRC enterprise with foreign investment

Under the PRC tax laws effective prior to 1 January 2008, dividend payments to foreign
investors made by foreign-invested enterprises were exempted from the PRC withholding
tax. In 2007, the PRC government adopted the New Income Tax Law and the related
implementation regulations. Under the New Income Tax Law and its implementation
regulations, all domestic companies are subject to a uniform enterprise income tax at the
rate of 25% and dividends from the PRC companies to their foreign shareholders are subject
to a withholding tax generally at a rate of 10%, unless it is entitled to tax incentives or tax
exemption under the relevant tax treaties.
Pursuant to the Avoidance of Double Taxation Agreement between Singapore and

China
dated 11 July 2007, the withholding tax rate on the dividends distribution by the foreign
investment enterprises shall not exceed 5% of the total dividends declared if the beneficial
owner of the dividends is a company that holds at least 25% of the share capital of the
foreign investment enterprises paying the dividend.
On 27 October 2009, the Circular in relation to How to Understand and Determine

“Beneficial Owner” under Taxation Conventions
was issued by the State Taxation Administration of PRC. The circular
stipulates that a beneficial owner is a person who has both ownership and right of control
over the income or the assets or rights generating the income and generally is engaged in
substantive business.
4. Wholly foreign-owned enterprise

Wholly foreign-owned enterprises are governed by the Law of the people’s Republic of China
Concerning Enterprises with Sole Foreign Investments, which was promulgated on 12th April, 1986
and amended on 31 October 2000, and its Implementation Regulations promulgated on 12th
December, 1990 and amended on 12 April 2001 (together the “Foreign Enterprises Law”).
(a) Procedures for establishment of a wholly foreign-owned enterprise

The establishment of a wholly foreign-owned enterprise will have to be approved by the
MOC (or its delegated authorities). If two or more foreign investors jointly apply for the
establishment of a wholly foreign-owned enterprise, a copy of the contract between the
parties must also be submitted to the MOC (or its delegated authorities) for its record. A
wholly foreign-owned enterprise must also obtain a business license from the State
Administration for Industry and Commerce of the PRC (“SAIC”) before it can commence
business.
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(b) Nature
A wholly foreign-owned enterprise is a limited liability company under the Foreign
Enterprises Law. It is a legal person which may independently assume civil obligations,
enjoy civil rights and has the right to own, use and dispose of property. It is required to have
a registered capital contributed by the foreign investor(s). The liability of the foreign
investor(s) is limited to the amount of registered capital contributed. A foreign investor may
make its contributions by instalments and the registered capital must be contributed within
the period as approved by the MOC (or its delegated authorities) in accordance with relevant
regulations.
(c) Profit distribution

The Foreign Enterprise Law provides that after payment of taxes, a wholly foreign-owned
enterprise must make contributions to a reserve fund, a enterprise development fund and an
employee bonus and welfare fund. The allocation ratio for the employee bonus and welfare
fund may be determined by the enterprise. However, at least 10 per cent. of the after tax
profits must be allocated to the reserve fund. If the cumulative total of allocated reserve
funds reaches 50% of an enterprise’s registered capital, the enterprise will not be required to
make any additional contribution. The reserve fund may be used by a wholly foreign-owned
enterprise to make up its losses and with the consent of the examination and approval
authority, can also be used to expand its production operations and to increase its capital.
The enterprise is prohibited from distributing dividends unless the losses (if any) of previous
years have been made up. The development fund is used for expanding the capital base of
the company by way of capitalisation issues. The employee bonus and welfare fund can only
be used for the collective benefit and facilities of the employees of the wholly foreign-owned
enterprise.
5. Environmental Protection Regulations

In accordance with the Environmental Protection Law of the PRC adopted by the Standing
Committee of the NPC on 26th December, 1989, the bureau of environmental protection of the
State Council sets the national guidelines for the discharge of pollutants. The provincial and
municipal governments of provinces, autonomous regions and municipalities may also set their
own guidelines for the discharge of pollutants within their own provinces or districts in the event
that the national guidelines are inadequate.
A company or enterprise which causes environmental pollution and discharges other polluting
materials which endanger the public should implement environmental protection methods and
procedures into their business operations. This may be achieved by setting up a system of
accountability within the company’s business structure for environmental protection; adopting
effective procedures to prevent environmental hazards such as waste gases, water and residues,
dust powder, radioactive materials and noise arising from production, construction and other
activities from polluting and endangering the environment. The environmental protection system
and procedures should be implemented simultaneously with the commencement of and during the
operation of construction, production and other activities undertaken by the company. Any company
or enterprise which discharges environmental pollutants should report and register such discharge
with relevant bureaus of environmental protection and pay any fines imposed for the discharge. A
fee may also be imposed on the company for the cost of any work required to restore the
environment to its original state. Companies which have caused severe pollution to the
environment are required to restore the environment or remedy the effects of the pollution within a
prescribed time limit.
If a company fails to report and/or register the environmental pollution caused by it, it will receive a
warning or be penalised. Companies which fail to restore the environment or remedy the effects of
the pollution within the prescribed time will be penalised or have their business licenses terminated.
Companies or enterprises which have polluted and endangered the environment must bear the
responsibility for remedying the danger and effects of the pollution, as well as to compensate any
losses or damages suffered as a result of such environmental pollution.
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6 Foreign Exchange Controls
Major reforms have been introduced to the foreign exchange control system of the PRC since
1993.
On 28 December 1993, the People’s Bank of China (“PBOC”), with the authorization of the State
Council, issued the Notice on Further Reform of the Foreign Exchange Control System, which
came into effect on 1 January 1994. Other new regulations and implementation measures include
the Regulations on the Foreign Exchange Settlement, Sale and Payments which were promulgated
on 20 June 1996 and took effect on 1 July 1996 and contain detailed provisions regulating the
settlement, sale and payment of foreign exchange by enterprises, individuals, foreign organizations
and visitors in the PRC, and the Regulation on Foreign Exchange Control of the PRC which took
effect on 1 April 1996 and was amended on 14 January 1997 and 5 August 2008, which contains
detailed provisions in relation to foreign exchange control.
The foreign exchange earnings of all PRC enterprises, other than those foreign investment
enterprises (“FIE”), which are allowed to retain part of their regular foreign exchange earnings or
specifically exempted under the relevant regulations, shall be sold to designated banks. Foreign
exchange earnings obtained from borrowings from foreign institutions or issues of shares or bonds
denominated in foreign currency do not need to be sold to designated banks, but must be kept in
foreign exchange bank accounts of designated banks unless specifically approved.
At present, control on the purchase of foreign exchange is loosen. Enterprises in the PRC which
require foreign exchange for their ordinary trading and non-trading activities, import activities and
repayment of foreign debts may purchase foreign exchange from designated banks if the
application is supported by the relevant documents. Furthermore, FIEs may distribute profit to their
foreign investors with funds in their foreign exchange bank accounts kept with designated banks.
Should such foreign exchange be insufficient, enterprises may purchase foreign exchange from
designated banks upon the presentation of the resolutions of the directors in respect of the profit
distribution plan.
On 21 October 2005, SAFE promulgated the Circular of the State Administration of Foreign
Exchange Concerning Relevant Issues on Financing and Repatriation of Investments by Domestic
Residents through Foreign Special Purpose Vehicles (the “Notice 75”)
and on 29 May 2007, SAFE promulgated
the Notice on the Issuance of the Manipulation Rules of the Circular of the State Administration of
Foreign Exchange Concerning Relevant Issues on Financing and Repatriation of Investments by
Domestic Residents through Foreign Special Purpose Vehicles and Return Investment (the “Notice
106”).
. Under the Notice 75 and the Notice 106, PRC citizens or residents
must register with SAFE or its branch in connection with their establishment or control of a special
purpose vehicle (the “SPV”) established for the purpose of overseas equity financing involving a
repatriation investment whereby the SPV acquires or controls onshore assets or equity interests
held by the PRC citizens or residents. In addition, such PRC citizens or residents must update their
SAFE registrations when the offshore SPV undergoes material events relating to increases or
decreases in investment amount, transfers or exchanges of shares, mergers or divisions, long-term
equity or debt investments, external guarantees, or other material events that do not involve
repatriation investments.
The Notice 75 and the Notice 106 also require PRC residents in the overseas invested companies
to register, modify or record with the local foreign exchange authority within 30 days from the date
of any increase/decrease of capital, share transfer, mergers/demergers, change in long-term equity
or debts investments and outward guarantees in the SPV. Moreover, profits, dividends and foreign
exchange relating to capital changes received by PRC residents from the SPV shall be repatriated
to the PRC within 180 days of receiving such amounts. For SPVs which were incorporated or
restructured prior to the issue of the new rules, the Notice 75 requires the domestic residents to
complete the supplemental registration before 31 March 2006.
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7. Labour Protection Regulations
The companies in the PRC are subject to various labour and safety laws and regulations in the
PRC, including the PRC Labour Law , the PRC Labour Contract Law
, the Implementation Regulation for the PRC Labour Contract Law
, the Regulation of Insurance for Labour Injury
, the Unemployment Insurance Law , the Provisional Insurance
Measures for Maternity of Employees , the Interim Regulation on
the Collection and Payment of Social Insurance Premiums and the
Regulations for the Housing Provident Fund Contributions . Under these
PRC laws and regulations, enterprises are required to provide their employees with welfare
schemes including pension premium, work-related injury insurance, medical insurance,
unemployment insurance, maternity insurance and training in relation to occupational safety, etc.
The principal regulations governing the employment contract is the PRC Employment Contracts
Law , which was promulgated by the Standing Committee of the
NPC on 29 June 2007 and came into effect on 1 January 2008. Pursuant to the Employment
Contracts Law, employers shall establish employment relationship with employees on the date of
their employment. To establish the employment relationship, a written employment contract shall be
entered into between the parties, failing which the employers shall be held liable. Furthermore, the
probation period and liquidated damages shall be restricted by the law to safeguard employees’
rights and interests.
E-7
APPENDIX F – DESCRIPTION OF SINGAPORE COMPANY LAW
RELATING TO SHARES
The following statements are brief summaries of the rights and privileges of Shareholders conferred by
the laws of Singapore and the Articles of Association (the “Articles”) of the Company.
These statements summarise the material provisions of the Articles but are qualified in entirety by
reference to the Articles.
ORDINARY SHARES
All of the ordinary shares of the Company are in registered form. The Company may, subject to the
provisions of the Companies Act (Chapter 50) of Singapore (“Companies Act”) and the rules of the
Singapore Exchange Securities Trading Limited (“SGX-ST”), purchase its own ordinary shares. However,
it may not, except in circumstances permitted by the Companies Act, grant any financial assistance for
the acquisition or proposed acquisition of its own ordinary shares.
NEW ORDINARY SHARES

New ordinary shares may only be issued with the prior approval in a general meeting of the shareholders
of the Company. The aggregate number of shares to be issued pursuant to such approval may not
exceed 50% (or such other limit as may be prescribed by the SGX-ST) of its issued share capital at the
time of grant of such approval for the time being, of which the aggregate number of shares to be issued
other than on a pro-rata basis to its shareholders may not exceed 20% (or such other limit as may be
prescribed by the SGX-ST) of its issued share capital at the time of grant of such approval for the time
being. The approval, if granted, will lapse at the conclusion of the annual general meeting following the
date on which the approval was granted. Subject to the foregoing, the provisions of the Companies Act
and any special rights attached to any class of shares currently issued, all new ordinary shares are under
the control of the board of Directors of the Company (the “Board of Directors”) who may allot and issue
the same with such rights and restrictions as it may think fit.
SHAREHOLDERS
Only persons who are registered in the register of shareholders of the Company and, in cases in which
the person so registered is The Central Depository (Pte) Limited (“CDP”), the persons named as the
Depositors in the Depository Register maintained by CDP for the ordinary shares, are recognised as
shareholders of the Company. The Company will not, except as required by law, recognise any equitable,
contingent, future or partial interest in any ordinary share or other rights for any ordinary share other than
the absolute right thereto of the registered holder of that ordinary share or of the person whose name is
entered in the Depository Register for that ordinary share. The Company may close the register of
shareholders for any time or times if it provides the Singapore Registry of Companies and Businesses at
least 14 days’ notice and the SGX-ST at least ten clear market days’ notice. However, the register may
not be closed for more than 30 days in aggregate in any calendar year. The Company typically closes the
register to determine shareholders’ entitlement to receive dividends and other distributions.
TRANSFER OF ORDINARY SHARES

There is no restriction on the transfer of fully paid ordinary shares except where required by law or the
listing rules or the rules or by-laws of any stock exchange on which the Company is listed. The Board of
Directors may decline to register any transfer of ordinary shares which are not fully paid shares or
ordinary shares on which the Company has a lien. Ordinary shares may be transferred by a duly signed
instrument of transfer in a form approved by any stock exchange on which the Company is listed. The
Board of Directors may also decline to register any instrument of transfer unless, among other things, it
has been duly stamped and is presented for registration together with the share certificate and such other
evidence of title as they may require. The Company will replace lost or destroyed certificates for ordinary
shares if it is properly notified and if the applicant pays a fee which will not exceed $2 and furnishes any
evidence and indemnity that the Board of Directors may require.
F-1
GENERAL MEETINGS OF SHAREHOLDERS
The Company is required to hold an annual general meeting every year. The Board may convene an
Extraordinary General Meeting whenever it thinks fit and must do so if shareholders representing not less
than 10% of the total voting rights of all shareholders request in writing that such a meeting be held. In
addition, two or more shareholders holding not less than 10% of the issued share capital of the Company
may call a meeting. Unless otherwise required by law or by the Articles, voting at general meetings is by
ordinary resolution, requiring an affirmative vote of a simple majority of the votes cast at that meeting. An
ordinary resolution suffices, for example, for the appointment of directors. A special resolution, requiring
the affirmative vote of at least 75% of the votes cast at the meeting, is necessary for certain matters
under Singapore law, including voluntary winding up, amendments to the Memorandum of Association
and the Articles, a change of the corporate name and a reduction in the share capital, share premium
account or capital redemption reserve fund. The Company must give at least 21 days’ notice in writing for
every general meeting convened for the purpose of passing a special resolution. Ordinary resolutions
generally require at least 14 days’ notice in writing. The notice must be given to every shareholder who
has supplied the Company with an address in Singapore for the giving of notices and must set forth the
place, the day and the hour of the meeting and, in the case of special business, the general nature of that
business.
VOTING RIGHTS
A shareholder is entitled to attend, speak and vote at any general meeting, in person or by proxy. Proxies
need not be a shareholder. A person who holds ordinary shares through the SGX-ST book-entry
settlement system will only be entitled to vote at a general meeting as a shareholder if his name appears
on the Depository Register maintained by CDP 48 hours before the general meeting.
Except as otherwise provided in the Articles, two or more shareholders must be present in person or by
proxy to constitute a quorum at any general meeting. Under the Articles, on a show of hands, every
shareholder present in person and by proxy shall have one vote (provided that in the case of a
shareholder who is represented by two proxies, only one of the two proxies as determined by that
shareholder or, failing such determination, by the Chairman of the meeting in his sole discretion shall be
entitled to vote on a show of hands), and on a poll, every shareholder present in person or by proxy shall
have one vote for each ordinary share which he holds or represents. A poll may be demanded in certain
circumstances, including by the chairman of the meeting or by any shareholder present in person or by
proxy and representing not less than 10% of the total voting rights of all shareholders having the right to
attend and vote at the meeting or by any two shareholders present in person or by proxy and entitled to
vote. In the case of a tie vote, whether on a show of hands or a poll, the chairman of the meeting shall be
entitled to a casting vote.
DIVIDENDS
The Company may, by ordinary resolution of its shareholders, declare dividends at a general meeting, but
it may not pay dividends in excess of the amount recommended by the Board of Directors. The Company
must pay all dividends out of its profits; however, the Company may capitalise its share premium account
and apply it to pay dividends, if such dividends are satisfied by the issue of shares to shareholders of the
Company. See “Bonus and Rights Issue”. The Board of Directors may also declare an interim dividend
without the approval of its shareholders. All dividends are paid pro rata among the shareholders in
proportion to the amount paid up on each shareholder’s ordinary shares, unless the rights attaching to an
issue of any ordinary share provides otherwise. Unless otherwise directed, dividends are paid by cheque
or warrant sent through the post to each shareholder at his registered address. Notwithstanding the
foregoing, the payment by the Company to CDP of any dividend payable to a shareholder whose name is
entered in the Depository Register shall, to the extent of payment made to CDP, discharge the Company
from any liability to that shareholder in respect of that payment.
F-2
BONUS AND RIGHTS ISSUE
Our Board of Directors may, with approval of our shareholders at a general meeting, capitalise any
reserves or profits (including profits or monies carried and standing to any reserve or to the share
premium account) and distribute the same as bonus Shares credited as paid-up to our Shareholders in
proportion to their shareholdings. Our Board of Directors may also issue rights to take up additional
Shares to Shareholders in proportion to their shareholdings. Such rights are subject to any conditions
attached to such issue and the regulations of any stock exchange on which we are listed.
CAPITALISATION AND RIGHTS ISSUES

The Board of Directors may, with approval by the shareholders at a general meeting, capitalise any profits
and distribute the same as shares credited as paid-up to the shareholders in proportion to their
shareholdings. The Board of Directors may also issue rights to take up additional ordinary shares to
shareholders in proportion to their shareholdings. Such rights are subject to any conditions attached to
such issue and the regulations of any stock exchange on which the Company is listed.
TAKEOVERS
The Securities and Futures Act (Chapter 289) of Singapore and the Singapore Code on Takeovers and
Mergers regulate the acquisition of ordinary shares of public companies and contain certain provisions
that may delay, deter or prevent a future takeover or change in control of the Company. Any person
acquiring an interest, either on his own or together with parties acting in concert with him, in 30% or more
of the voting shares in the Company must extend a takeover offer for the remaining voting shares in
accordance with the provisions of the Singapore Code on Takeovers and Mergers. “Parties acting in
concert’’ include a company and its related and associated companies, a company and its directors
(including their relatives), a company and its pension funds, a person and any investment company, unit
trust or other fund whose investment such person manages on a discretionary basis, and a financial
advisor and its client in respect of shares held by the financial advisor and shares in the client held by
funds managed by the financial advisor on a discretionary basis. An offer for consideration other than
cash must be accompanied by a cash alternative at not less than the highest price paid by the offeror or
parties acting in concert with the offeror within the preceding six months. A mandatory takeover offer is
also required to be made if a person holding, either on his own or together with parties acting in concert
with him, between 30% and 50% of the voting rights acquires additional voting shares representing more
than 1% of the voting shares in any six month period.
LIQUIDATION OR OTHER RETURN OF CAPITAL

If the Company liquidates or in the event of any other return of capital, holders of ordinary shares will be
entitled to participate in any surplus assets in proportion to their shareholdings, subject to any special
rights attaching to any other class of shares.
INDEMNITY
As permitted by Singapore law, the Articles provide that, subject to the Companies Act, the Board of
Directors and officers shall be entitled to be indemnified by the Company against any liability incurred in
defending any proceedings, whether civil or criminal, which relate to anything done or omitted to have
been done as an officer, director or employee and in which judgment is given in their favour or in which
they are acquitted or in connection with any application under any statute for relief from liability in respect
thereof in which relief is granted by the court. The Company may not indemnify directors and officers
against any liability which by law would otherwise attach to them in respect of any negligence, default,
breach of duty or breach of trust of which they may be guilty in relation to the Company.
LIMITATIONS ON RIGHTS TO HOLD OR VOTE SHARES

Except as described in “Voting Rights” and “Takeovers” above, there are no limitations imposed by
Singapore law or by the Articles on the rights of non-resident shareholders to hold or vote on ordinary
shares.
F-3
MINORITY RIGHTS
The rights of minority shareholders of Singapore-incorporated companies are protected under Section
216 of the Companies Act, which gives the Singapore courts a general power to make any order, upon
application by any shareholder of the Company, as they think fit to remedy any of the following situations:-
(a) the affairs of the Company are being conducted or the powers of the Board of Directors are being
exercised in a manner oppressive to, or in disregard of the interests of, one or more of the
shareholders; or
(b) the Company takes an action, or threatens to take an action, or the shareholders pass a resolution,
or propose to pass a resolution, which unfairly discriminates against, or is otherwise prejudicial to,
one or more of the shareholders, including the applicant.
Singapore courts have wide discretion as to the reliefs they may grant and those reliefs are in no way
limited to those listed in the Companies Act itself. Without prejudice to the foregoing, Singapore courts
may:-
(a) direct or prohibit any act or cancel or vary any transaction or resolution;
(b) regulate the conduct of the affairs of the Company in the future;
(c) authorise civil proceedings to be brought in the name of, or on behalf of, the Company by a person
or persons and on such terms as the court may direct;
(d) provide for the purchase of a minority shareholder’s shares by the other shareholders or by the
Company and, in the case of a purchase of shares by the Company, a corresponding reduction of
its share capital;
(e) provide that the Memorandum of Association or the Articles be amended; or
(f) provide that the Company be wound up.
EXCHANGE CONTROLS
There are no Singapore governmental laws, decrees, regulations or other legislation that may affect the
following:-
(a) the import or export of capital, including the availability of cash and cash equivalents for use by our
Group; and
(b) the remittance of dividends, interest or other payments to non-resident holders of our Company’s
securities.
F-4
APPENDIX G – DESCRIPTION OF SINGAPORE LAW RELATING TO TAXATION
The following is a discussion of certain tax matters arising under the current tax laws in Singapore and is
not intended to be and does not constitute legal or tax advice. While this discussion is considered to be a
correct interpretation of existing laws in force as at the date of this Prospectus, no assurance can be
given that courts or fiscal authorities responsible for the administration of such laws will agree with this
interpretation or that changes in such laws will not occur. The discussion is limited to a general
description of certain tax consequences in Singapore with respect to ownership of our Shares by
Singapore investors, and does not purport to be a comprehensive nor exhaustive description of all of the
tax considerations that may be relevant to a decision to purchase our Shares. Prospective investors
should consult their tax advisors regarding Singapore tax and other tax consequences of owning and
disposing our Shares. It is emphasised that neither our Company, our Directors nor any other persons
involved in the Invitation accepts responsibility for any tax effects or liabilities resulting from the
subscription for, purchase, holding or disposal of our Shares.
Individual Income Tax

Individual taxpayers who are Singapore tax residents are subject to tax on income accrued in or derived
from Singapore. All foreign-sourced income (except for income received through a partnership in
Singapore) received on or after 1 January 2004 in Singapore by tax resident individuals will be exempt
from tax. Certain Singapore-sourced investment income (such as interest from debt securities) derived by
tax resident individuals on or after 1 January 2004 from certain financial instruments (other than income
derived through a partnership in Singapore or from the carrying on of a trade, business or profession) will
be exempt from tax.
For a Singapore tax resident individual, the tax rate will vary according to the individual’s circumstances
but is subject to a maximum rate of 20%.
Non-resident individuals, subject to certain exceptions, are generally subject to income tax on income
accrued in or derived from Singapore at the prevailing rate of 20%.
An individual will be regarded as being resident in Singapore in a year of assessment if, in the preceding
year, he was physically present in Singapore or exercised employment in Singapore (other than as a
director of a company) for 183 days or more, or if he resides in Singapore.
Corporate Income Tax

Corporate taxpayers who are Singapore tax residents are subject to Singapore income tax on income
accrued in or derived from Singapore and subject to certain exceptions, on foreign-sourced income
received or deemed to be received in Singapore from outside Singapore. Foreign-sourced income in the
form of dividends, branch profits and services income received or deemed to be received in Singapore by
resident taxpayers on or after 1 June 2003 will be exempt from tax if certain prescribed conditions are
met.
Non-resident corporate taxpayers are subject to income tax on income accrued in or derived from
Singapore and on foreign income received or deemed to be received in Singapore, subject to certain
exceptions.
A corporate taxpayer is regarded as resident for Singapore tax purposes if the management and control
of its business is exercised in Singapore.
The prevailing corporate tax rate in Singapore is 17%. Corporate tax exemption will apply to the first
S$300,000 of a company’s chargeable income as follows:-
(i) 75% of up to the first S$10,000 of a company’s chargeable income; and
(ii) 50% of up to the next S$290,000 of a company’s chargeable income.
G-1
In addition, certain companies will, subject to certain conditions, be eligible for full tax exemption on their
normal chargeable income of up to S$100,000 a year and partial tax exemption of 50% of up to the next
$200,000 of normal chargeable income for each of the company’s first three years of assessment falling
in or after year of assessment 2008. The conditions which a new company must satisfy in order to claim
this exemption for a year of assessment include (a) it must be incorporated in Singapore; (b) it must be
tax resident in Singapore for that year of assessment; and (c) it must have no more than 20 shareholders
all of whom are individuals or at least one of whom is an individual holding at least 10% of the total
number of issued ordinary shares of the company throughout the basis period for that year of
assessment. The remaining chargeable income (after the tax exemption) will be taxed at the applicable
corporate tax rate.
Cash Dividend Distributions

Dividends paid by the Company being tax resident in Singapore, would be considered as sourced from
Singapore. Dividends received in respect of the Shares by either Singapore tax resident or non-
Singapore tax resident taxpayers are not subject to Singapore withholding tax.
With effect from 1 January 2003, Singapore has adopted the “One-Tier” Corporate Tax System (“One-
Tier System”). Under this One-Tier System, the tax collected from corporate profits is the final tax and
the Company can pay tax exempt (one-tier) dividends which are tax exempt in the hands of its
shareholders, regardless of the tax residency status or the legal form of the shareholders.
The Company is in the One-Tier System. Hence, dividends paid by the Company will be exempt from tax
in the hands of its Shareholders.
Bonus Issues And Scrip Dividends

Under current Singapore tax law and practice, a capitalisation of profits followed by the issue of new
shares, credited as fully paid, pro-rata to shareholders (“bonus issue”) does not represent a distribution
of dividends by a company to its shareholders. Therefore, a Singapore resident shareholder receiving
shares by way of a bonus issue should not have a liability to Singapore tax.
When a dividend is to be satisfied wholly or in part in the form of an allotment of ordinary shares credited
as fully paid, the dividend declared will be treated as income to its shareholders. However, as the
Company is under the One-Tier System, such a dividend will be exempt from Singapore tax. Similarly,
when shareholders are given the right to elect to receive an allotment of ordinary shares credited as fully
paid in lieu of cash, the dividend declared will be treated as exempt (one-tier) dividend income and will
not be subject to Singapore tax.
Capital Gains on Disposal of Ordinary Shares

Singapore does not impose tax on capital gains. However, there are no specific laws or regulations which
deal with the characterisation of capital gains, and hence, gains may be construed to be of an income
nature and subject to tax if they arise from activities which the Inland Revenue Authority of Singapore
(“IRAS”) regards as the carrying on of a trade or business in Singapore.
Any profits from the disposal of the Shares are not taxable in Singapore unless the seller is regarded as
having derived gains of an income nature in Singapore, in which case, the disposal profits would be
taxable as trading income.
G-2
Adoption of FRS 39 treatment for Singapore income tax purposes
On 30 December 2005, the IRAS issued a circular entitled “Income Tax Implications arising from the
adoption of FRS 39 Financial Instruments: Recognition and Measurement” (“FRS 39 Circular”).
Legislative amendments to give effect to the FRS 39 Circular have been enacted via the Income Tax
(Amendment) Act 2006, with such amendments having been deemed to come into operation on 1
January 2005.
Prospective investors should consult their own accounting and tax advisers regarding FRS 39 and the
related Singapore income tax consequences of their acquisition, holding or conversion of the Shares.
Stamp Duty
There is no stamp duty payable on the subscription, allotment or holding of the Shares.
Stamp duty is payable on the instrument of transfer of the Shares at the rate of S$0.20 for every S$100
or any part thereof, computed on the amount or value of consideration. The amount or value of
consideration is the actual consideration or market value of the Shares, whichever is higher.
The purchaser is liable for stamp duty, unless there is an agreement to the contrary. No stamp duty is
payable if no instrument of transfer is executed or the instrument of transfer is executed outside
Singapore. However, stamp duty would be payable if the instrument of transfer which is executed outside
Singapore is received in Singapore.
Stamp duty is, however, not applicable in respect of electronic transfers of the Shares through the Central
Depository system.
Goods and Services Tax (“GST”)

The sale of the Shares by an investor belonging to Singapore through a SGX-ST member or to another
person belonging in Singapore is an exempt supply not subject to GST. Any GST directly or indirectly
incurred by the investor in respect of this exempt supply will become an additional cost to the investor.
Where the Shares are sold by a GST registered investor to a person belonging outside Singapore, the
sale is a taxable supply subject to GST at zero-rate. Any GST incurred by a GST registered investor in
the making of this supply in the course of furtherance of a business may, subject to the provisions of the
Goods and Services Tax Act, be offset against the investor’s GST liability and, in the event of an excess
input tax credit, be recovered from the Comptroller of GST of Singapore.
Services such as brokerage, handling and clearing services rendered by a GST registered person to an
investor belonging in Singapore in connection with the investor’s purchase, sale or holding of the Shares
will be subject to GST at the prevailing rate, that is, 7%. Similar services rendered to an investor
belonging outside Singapore are subject to GST at zero-rate, provided that the investor belongs in a
country outside Singapore when the services are performed and the services provided do not directly
benefit any Singapore persons.
G-3

of Anchun
Order
books of
RMB256 .4
million
as at 1
Sept
2010 ,
excluding
revenue
from 1
Apr – 31
Aug 201 0
listed on the SSE*
Shanxi
Mining group
Shanxi
Corporation group
FUTURE PLANS
facilities
COMPANY OVERVIEW

Preparation

Integrated
for energy uses
systems
engineering and
(More than 90% of
and
synthesis
solvents industries
Ammonia / Methanol
output
Ammonia / Methanol
No
No.539,
No.53
o.539,
39, Lusong
Luso
Changsha
Cha
Changs
angsha
gshaa National
Natio
National
nal Hi-tech
Hi-te Indus
Tel:
Te
el: (8
(86)
86) 731-8514
7 8687
Shares.

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PROSPECTUS DATED 13 OCTOBER 2010

(REGISTERED BY THE MONETARY AUTHORITY OF SINGAPORE ON 13 OCTOBER 2010)

(ii) Chemical systems and components (CSC Business)

(iii) Oxidative and reductive catalysts

ANCHUN INTERNATIONAL HOLDINGS LTD.

Feedback from customers

(ii) Chemical systems and components (CSC Business)

(iii) Oxidative and reductive catalysts

ANCHUN INTERNATIONAL HOLDINGS LTD.

Feedback from customers

• Organic growth by dedicated key management team with an

• Organic growth by dedicated key management team with an

1. CORPORATE INFORMATION ................................................................................................ 5

3. GLOSSARY OF TECHNICAL TERMS .................................................................................... 15

4. CAUTIONARY NOTE ON FORWARD-LOOKING STATEMENTS .......................................... 17

5. INDUSTRY AND MARKET DATA ............................................................................................ 18

6. SELLING RESTRICTIONS ...................................................................................................... 19

7. DETAILS OF THE INVITATION ................................................................................................ 20

8. THE INVITATION ...................................................................................................................... 25

9. PLAN OF DISTRIBUTION ...................................................................................................... 26

10. CLEARANCE AND SETTLEMENT ........................................................................................ 28

11. USE OF PROCEEDS AND LISTING EXPENSES .................................................................. 29

12. MANAGEMENT, UNDERWRITING AND PLACEMENT ARRANGEMENTS.......................... 31

13. PROSPECTUS SUMMARY...................................................................................................... 33

14. ISSUE STATISTICS.................................................................................................................. 35

15. RISK FACTORS ...................................................................................................................... 37

16. EXCHANGE RATES ................................................................................................................ 48

17. DIVIDEND POLICY .................................................................................................................. 49

18. CAPITALISATION AND INDEBTEDNESS .............................................................................. 50

19. DILUTION ................................................................................................................................ 52

20. SHARE CAPITAL .................................................................................................................... 55

21. RESTRUCTURING EXERCISE .............................................................................................. 58

22. GROUP STRUCTURE.............................................................................................................. 63

23. INDUSTRY OVERVIEW............................................................................................................ 64

24. HISTORY AND BUSINESS ...................................................................................................... 73

25. SELECTED FINANCIAL INFORMATION ................................................................................ 113

26. MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND

27. PROSPECTS, BUSINESS STRATEGIES AND FUTURE PLANS.......................................... 144

28. DIRECTORS, KEY EXECUTIVES AND EMPLOYEES .......................................................... 151

29. PRINCIPAL SHAREHOLDERS................................................................................................ 165

30. INTERESTED PERSON TRANSACTIONS.............................................................................. 170

31. POTENTIAL CONFLICT OF INTERESTS .............................................................................. 173

32. GENERAL AND STATUTORY INFORMATION ...................................................................... 175

33. APPENDIX A – AUDITED COMBINED FINANCIAL STATEMENTS OF ANCHUN

34. APPENDIX B – UNAUDITED COMBINED FINANCIAL STATEMENTS OF ANCHUN

35. APPENDIX C – TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION AND

36. APPENDIX D – SELECTED EXTRACTS OF OUR ARTICLES OF ASSOCIATION.......... D-1

38. APPENDIX F – DESCRIPTION OF SINGAPORE COMPANY LAW RELATING TO

39. APPENDIX G – DESCRIPTION OF SINGAPORE LAW RELATING TO TAXATION.......... G-1

Board of Directors : Xie Ding Zhong (Executive Chairman and CEO)

Company Secretary : Tan Wei Shyan (LLB (Hons))

Our Registered Office : 1 Robinson Road

Telephone : (65) 6535 1944

Our Principal Office and Contact Details : No.539, Lusong Road

Telephone : (86) 731 8514 8687

Manager : Kim Eng Corporate Finance Pte. Ltd.

Reporting Accountants and Auditors : Ernst & Young LLP

(Partner-in-charge: Max Loh Khum Whai)

Solicitors to the Invitation and : Shook Lin & Bok LLP

Legal Advisers to our Company on : Haihua Yongtai Law Firm

Principal Bankers : China Construction Bank (Furong Branch)

: China Construction Bank (South Shuyuan Road