Sapphire Corporation Limited Annual Report 2013

Sharpening Focus
Expanding Possibilities
Sapphire Corporation Limited Annual Report 2013
01 Financial Highlights
02 Corporate Prole
04 Chairmans Message
08 Group CEOs Review
14 Board of Directors
& Key Executive
18 Results At A Glance
20 Corporate Structure
CONTENTS
FINANCIAL
HIGHLIGHTS
Sapphire Corporate Limited
Annual Report 2013 1
2009 2010 2011 2012 2013*
Group $000 $000 $000 $000 $000
Revenue 133,828 119,861 135,538 137,199 174,489
Gross Prot 17,582 25,499 24,198 18,865 2,247
Prot / (Loss) Before Income Tax 45,416 85,593 (25,060) (23,394) (157,931)
Shareholders Funds 209,065 285,696 268,230 224,749 73,485
REVENUE
($000)
SHAREHOLDERS FUNDS
($000)
13
12
11
10
09
224,749
73,485
268,230
285,696
13
12
11
10
09
137,199
174,489
135,538
119,861
133,828
209,065
* Including discontinued operations
PROFIT / (LOSS)
BEFORE INCOME TAX
($000)
13
12
11
10
09
(23,394)
(157,931)
(25,060)
85,593
45,416
GROSS PROFIT
($000)
13
12
11
10
09
18,865
2,247
24,198
25,299
17,583
CORPORATE
PROFILE
2
Sharpening Focus
Sapphire Corporation Limited (Sapphire or the Group) is principally engaged in the
mining services business and investment holding following its recent plan to exit the
steel business. Sapphire now owns 100% in the capital of Mancala Holdings Pty Ltd
(Mancala), a specialist mining services company based in Australia that provides raised
bore, shaft excavation, engineering services and other mining services.
Mancala has a strong track record, having completed more than 100 projects both in
Australia and internationally since its incorporation in 1990. It is now operating the
largest nickel mine in Son La Province, Vietnam.
The Group is and has also been exploring other investment opportunities, which include
expanding its business in the resource sector, diversifying its investment base and
embarking on a Merger & Acquisition spree when the opportunities arise.
Sapphire is based in Singapore and has been listed on the Singapore Exchange
since 1999.
Mancala
Mancala100%Mancala
1990Mancala100
1999
SHARPENING
FOCUS
CHAIRMANS
MESSAGE
4
Sharpening Focus
Change of Board Members
I am honoured to be appointed as the Non-Executive Chairman
of the Company in October 2013. Refreshing and renewing board
members will bring a diversied expertise for the Group and thus
I am pleased to welcome Mr. Teh Wing Kwan as Group Chief
Executive Ofcer, Mr. Tao Yeoh Chi and Mr. Fong Heng Boo as
Independent Directors.
I would like to thank Mr. Teo Cheng Kwee and Mr. Roger Foo,
the Groups previous top management, who have continued to
serve the Group as Non-Executive Directors. At the same time,
I would like to thank my predecessor, Dr. Tan Eng Liang as well
as Independent Director Mr. Roger Chan and Non Independent
Director Mr. Dai Bin, who retired from the Board, for their past
contributions to the Group.
201310
Steven Lim

Non-Executive Chairman
Dear
Shareholders,
Translated Version
Year Under Review
The Group had just recorded its third year of losses in FY2013,
continued from the previous two nancial years. In FY2013, there
were signicant losses arising from assets impairment and a fall in
fair value of the steel business reecting the severity of the steel
market condition. As a result, the Group recorded another year
of losses and there is an increasingly urgent need to streamline
operations for improvement and recovery.
The appointment of new board members has also seen the Group
announcing certain important strategic plans and one of which
was the Boards decision to exit the loss-making steel business
after issuing a prot warning to shareholders in October 2013.
The steel market remains weak and the independent steel industry
specialists hold the same views. They have advised us that the
market condition in China is challenging and warned that the
uncertainties can severely cripple us going forward. Particularly,
steel prices continue to fall and yet costs are escalating due to
higher imported materials price and local operating expenses.
Given these factors, we do agree that there will be limited
expansion opportunity in China over the medium term, prompting
an even weaker industrial outlook.
As reected in the nancial performance of our steel business,
there was no improvement towards the end of FY2013. As such,
the Boards decision to streamline the steelmaking operations
came just in time as the production lines had not been able to
achieve optimal capacity utilization rates and following which, our
intention to sell the steel business have unanimously been agreed
by the Board members.
New Acquisition
In October 2013, we invested in an Australia-based mining
services company . The mining sector in Australia is facing a
downturn with signicant excess of production capacity and
the commodity prices have been volatile. This has impacted
many junior miners which often need recurring working capital
to continue their production . In this aspect, we see those
mining services companies which could (i) provide good logistic
management in deploying resources and (ii) manage project
timeline in meeting production targets, fall within our investment
parameters. These mining services companies could help to
create greater economic value by bringing mining resources into
production and Mancala is one of them. The recent depreciation
of Australian dollars also posts an opportunity to acquire those
local companies at better valuation.
20132013
201310

2013

201310
(i)
(ii)
Mancala

CHAIRMANS
MESSAGE
6
Sharpening Focus
Mancala is a specialist mining services company which provides
raised bore, shaft excavation, engineering services and other
related mining services. Mancala has signicant experience and
a strong track record, having completed more than 100 projects
since its incorporation in 1990. It also has international experience
in countries specically in Botswana, New Zealand, Papua New
Guinea, Fiji and more recently, Vietnam where Mancala is currently
operating the largest nickel mine in Son La Province. Mancala
became our wholly-owned subsidiary in January 2014.
Going Forward
In 2014, while we are consolidating the Groups businesses,
we also need to effectively navigate the current market volatility
within the industry which we are operating. The top management
teams have been proactive in assessing the situation. They are also
experienced in recommending and executing important strategic
plans for the Group. As such, we urge your continual support for
our business plans and we will work towards getting the Group
back on track to protability. We strive to deliver long-term
shareholder value.
The Board will meet you in the upcoming AGM.

Thank you.
Steven Lim
Non-Executive Chairman
Mancala
Mancala
1990100
Mancala
Mancala20141

2014
EXPANDING
POSSIBILITIES
EXPANDING
POSSIBILITIES
GROUP CEO'S
REVIEW
8
Sharpening Focus
When I was rst asked to join Sapphire as Group CEO, I was
well aware of its position it had recorded consecutive years of
signicant losses and this loss-making trend appeared to continue in
2013 amid the weak steel market condition, which made its struggle
for prots seemed quite tiring. Whilst I know this was obviously a
backbreaking job to take on, there were compelling reasons to work
so and I am now almost 6 months at the helm. Since then, I know
you the owners of Sapphire have probably read what we have
done strategically and are certainly keen to see Whats Next for
Sapphire.
During the last quarter of the year, with meetings all round the year-
end holiday season, I spent my Christmas and New Year Eve with
my MacBook. We directed key strategic reviews, trimmed budgets,
cut capex, rationalized assets, streamlined businesses, keep enough
cash and have since invested in Australia. It was a rather eventful but
fruitful period indeed.
In this annual report, I have gone to some length to write about
those key factors affecting our steel business, the rationale leading
to our key decisions and the strategies being executed, as yet. I think
it is important to keep you informed. I hope you nd this report
together with Results at a Glance and Quick Review of Operations
useful. You may also write to me via email if you wish so. Please also
nd email address of my CFO on the Corporate Information page.
---
6
----
2013
Dear
Shareholders,
Translated Version
Teh Wing Kwan

Group Chief Executive Ofcer

Overview
The importance of steel in China is no doubt. More often than
not, industry analysts do take growth of the steelmaking industry
as an indicative sign of economic strength in one way or another.
Yet importance sometime does not translate into meaningful
dollars-and-cents for the smaller scale steelmakers and more
recently, this is quite apparent in China. The most pressing concern
here is overcapacity, a massive overcapacity. Overcapacity causes
destocking, destocking results in falling prices and falling prices
means declining margins while costs are increasingly higher which
give it the latest blow. It seems that too little has been done to
address the root cause and there also seems to be other
non-commercial reasons for the local steelmakers to just keep their
facilities busy; or possibly just to earn a very, very thin margin, at
best. There is uncertainty as to when this chain reaction will last.
Against this context, I learned that some sectors within the steel
industry could be quite attractive as they have differentiated
characteristics of higher growth and better margins potential. Silicon
steels are one such area of opportunity. However, to upgrade and
expand ours into this segment, we need signicant amount of cash
or a much larger asset base to leverage. A quick internal analysis also
shows that the estimated capital commitment is huge and that is
to say, the expected investment recovery could stretch longer than
what we would have liked.
Considering these commercial factors, we shut down and scaled
back a signicant part of our steel business capacity. We also held
back expansion plans given the weak market condition. Following
the operational streamlining, we made a decision to sell our steel
business and we are now in active discussions. To be transparent,
we now call our steel business Discontinued Operation and
Assets Held-For-Sale on the face of our Prot & Loss and Balance
Sheet respectively. You would also note that our full-year results
announcement eshed out with details explaining our basis, grounds
and assumptions for the signicant impairment and fair value losses
given our plan to exit the steel industry. The decision to sell has not
been easy and it was not made without strenuous efforts. The Board
members agrees with me unanimously in this regard.
Post year end, we completed the acquisition of a specialist mining
services company the Australia-based Mancala when New Year
2014 had just started and we now own 100% of this company. Most
notably, Mancalas previous track record had been convincing, of
which it had been protable consecutively for more than 20 years.
In 2013, it however recorded its rst ever loss and quite obviously,
attributed to the fall in commodity prices. Mancala now operates
the largest nickel mine in Vietnam and has started to quote more
jobs outside Australia. Their existing orders book of some S$75
million is healthy.
--
2013
2014Mancala
100%
Mancala20
2013
Mancala
7500
GROUP CEO'S
REVIEW
10
Sharpening Focus
The Board-Change
Just to share a bit of history of our recent board-change Dr
Tan, our ex-Chairman, Teo, our ex-CEO and Roger Chan, our ex-
independent director, had been searching for new faces in the past
to refresh the board members after their many years of service with
Sapphire they had served Sapphire since 1985. Their many years of
experience meant relevant knowledge and good leadership, which
helped to lead the Group during both the explosive growth and
cyclical period of the steel business. I need to thank Dr Tan, Teo and
Roger here and the PRC-based directors, who know the steel industry
well.
Following that, Steven Lim is now our newly appointed non-
executive Chairman. Tao and Heng Boo have also been appointed
as our new independent directors. They are all corporate veterans.
Both Teo and Foo have continued to serve Sapphire as non-executive
directors. My discussions with the PRC-based director, Yang Jian,
have also been constructive. Working closely with the current
board members, my COO (Emma) and CFO (Kit), I will bring more
new investment perspectives to evaluate and drive the next board
conversation. The board members and my management team have
been very supportive.
Financial Performance

For your easy reference, you may want to read this review notes
together with Results At a Glance on Page 18. You may also nd
below Quick Review of Operations useful. In line with our plans to
sell the steel business, we have presented our nancials under the
segments of Continuing and Discontinued. The explanatory notes
below follow these through.

1985
18

- Completed acquisition on
7 January 2014
- As part of our recent
strategic reviews, we had
ceased the loss-making
minerals trading operation
- We recorded net losses of:
FY2013 ($ 4.7m)
FY2012 ($14.0m)
- Shut down operations - Scaled down capacity - Held back expansion plan
Result 2013 2012
Assets impairment - due mainly to a fall in (i) ' value-in-use' of plant and
equipment and (ii) fair value of available-for-sale investments in China $87.3m $9.6m
Loss on re-measurement of Assets-Held-For-Sale $58.0m -
Loss from discontinued operations $7.2m $5.8m
Net Loss from discontinued operations $152.5m $15.4m
Group's Operations
Continuing Operations
Discontinued Operations
(Steel Business)
Mancala Holdings Pty Ltd Corporate and Others Hot Roll Coil Rebar/Vanadium Cold Roll Coil
Quick Review of Operations
- Streamlined operations
- Trimmed budget
- Cut capex
- Rationalised assets
We had done these during 4Q13
Continuing Operations
Continuing operations was previously our trading business (which we had
since ceased); and are now our corporate ofce functions and Mancalas
operation (which we owned in 2014). You may take comfort that:
we had ceased operations of the loss-making minerals trading
segment entirely, as part of our recent strategic decisions; and
we kept our administrative costs relatively unchanged despite
higher professional fees for our new acquisition and those one-off
compensation paid on our rationalization exercise meaning that our
corporate expenses (ex such non-recurring expenses) fell given our
cost-cutting measures. We will continue to monitor these budgets
closely for you.
Given that and with an exchange gain arising from a stronger US$
(against our book currency in S$), net loss from continuing operations
in FY2013 narrowed to S$4.7 million from S$14.0 million.
Discontinuing Operations
This segment is a stressful one the steel business. More specically
revenues for steel business rose due largely to higher trade volume.
The higher revenues base was however achieved at lower average
unit selling prices and further burdened by higher unit production
costs thereby resulting in signicantly lower gross margin;
there was a provision for obsolete stocks for Hot Roll Coil following
our decision to shut down this loss-making production line entirely;
other income fell sharply in the absence of dividend income, interest
income and other fair value gain despite additional rent from the
lease of industrial properties in China;
both distribution and administrative expenses rose, given higher sales
transactions, inationary effects and additional land taxes; and
nance costs fell sharply on the back of lower borrowings. We held
back expansion plans and capped borrowings for capex.
Given the signicant movements in other expenses, it requires
detailed explanations. Other expenses comprised
loss on disposal of quoted shares investment of S$0.6 million;
impairment loss of S$60.9 million provided for the plant and
equipment and intangibles of the steel business. The value-in-use of
these operating assets was expected to be signicantly lower given
our decision to shut down the operation of Hot Roll Coil and scale
down the capacity of Rebar and Vanadium;
impairment loss of S$26.4 million provided for our available-for-sale
investments in China, which are loss-making business units;
impairment loss of S$58.0 million provided for re-measurement of
fair value (in accounting terms) of the steel business based on a range
of market values as suggested by an independent professional valuer.
The steel business is now an Assets Held-For-Sale and has since been
marked to market in our books.
Mancala2014
)
20131400470

:
60;
6090
2640

5800
GROUP CEO'S
REVIEW
12
Sharpening Focus
Given the above, net loss for discontinued operations the steel business
rose sharply to S$152.5 million from S$15.4 million. Excluding those
impairment and fair value accounting losses, operating net loss for the
steel business rose by 24.1% to S$7.2 million.
Financial Position
We recorded a net asset of S$73.5 million as at 31 December 2013,
after accounting for the signicant impairment and fair value losses.
There were signicant changes in those itemized assets and liabilities
on the face of our balance sheet as we have since reclassied these
items to Assets and Liabilities Held-For-Sale. Please also nd other
explanatory details for nancial position in 'Results at a glance' on
Page 19.
You may also note the following positions as at 31 December 2013:
the Assets Held-For-Sale was valued at S$66.0 million, marked to market
at close to its lowest range as suggested by the professional valuer;
for every dollar of liabilities the Group (including the held-for-sale
steel business) incurred, it had invested in S$1.32 worth of assets;
net assets or shareholders equity means assets and monies you have
entrusted with us. Your entrusted funds with us was $73.5 million or
S$0.091 per share; and
out of the total net assets you have entrusted with us, we kept some
$6.7 million in cash.
Moving Forward
It is important to tell you a lot more here what we have done so
far, why did we do that and how are we going to execute various
plans in mind, going forward.
We have just invested in mining sector. In this sector, whilst many
of us might have read goods news with a glimmer of hope now and
then, there are still many mixed signals here and there. So, we must
be specic in our parameter we acquired a specialist mining service
company and not a mining concession owner. But we are speaking
to mining concession owners who could and would outsource their
production to those mining service companies. We also noted that
cash ows of some of these mining services companies are more
predictable and their orders book is still largely visible.
What is even more relevant, the recent volatility in commodity prices
has further accelerated operational streamlining of many junior miners
(some have since fagged out), resulted in more friendlier expectation,
less aggressive capex decision and better cost-control discipline.
Given the push factors, we hope to exploit this pricing anomaly in the
mining sector. Specically that, the purchase price for our investment
in Mancala was structured as tranches of secured loan and deferred
1540
15250.
24.1%720
20131231
7350
19
20131231
6600

1.32

73500.091
670
Mancala
800
Mancala
consideration (which tie to a 2-year accumulated net prot target of
not less than A$8 million). The good news is, we are also getting a
giant equipment-leasing house to evaluate if they could support the
equipment nancing needs for Mancala and our discussions with them
have so far been very encouraging.
The current board members are backed by strong corporate nance
background and proven restructuring track records with signicant
commercial experience in negotiating and executing proposed
corporate investment, acquisition and divestment plans. We speak
to each other very often and work very closely together. We are
and have also been exploring other investment propositions which
include expanding our resource business, diversifying our investment
base and embarking on a more active M&A spree as and when such
opportunities arise.
In doing so, there are many strategies. We may be of the same thought
that focusing on a combination of stable-income and high-growth
would still be practically ideal. After all, these strategies aim to build
wealth. More specically, those targets which we have evaluated and
would evaluate, exhibit the following combined characteristics:
targets which record modest but rm protability. This strategy aims
to stabilize our earnings base and reduce earnings uctuation;
targets which generate stable cash ows but require more working
capital to fund their increasingly higher trade volume. This strategy
aims to make a protable target even more protable; and
well-run but undervalued targets which face a cyclical industry
downturn and urgently require nancial turnaround. This strategy
aims to potentially tag along with their strong growth prospects.
The implementation of these strategies also means we could
potentially explore one or more industries and spread risks across.
As and when required, we will seek your approval in general
meetings. Whilst it does take us time to rm up the proposed sale
deal, support Mancala, expand new initiatives, evaluate various
investment propositions and sharpen our focus, we assure you that,
in doing so, our strategic decisions will seek to unlock and enhance
shareholder value.
Meanwhile, I do agree that if there are ongoing uncertainties, there
could be opportunities. While there are always good reasons to be
cautious in the current state of ux, I believe I could root on my
cautious optimism to steer the business back into prots-making.
In point of fact, while I am exploring other earnings accretive deals,
I want our turnaround initiatives to gain traction. In this aspect, I
remain quietly condent and I will write to update you soon.
Thank you, my management and our very faithful shareholders.
Many thanks indeed.
Regards
Teh Wing Kwan
Group Chief Executive Ofcer
Email: wkteh@sapphirecorp.com.sg
Mancala
wkteh@sapphirecorp.com.sg
BOARD OF DIRECTORS
& KEY EXECUTIVE
14
Sharpening Focus
Mr Lim Jun Xiong Steven
Non-Executive Chairman and Independent Director
Mr Lim Xun Xiong Steven has been appointed as the Non-Executive
Chairman and Non-Executive Director of the Company with effect
from 1 October 2013. Mr. Lim is currently the Chief Executive
Ofcer of SG Trust (Asia) Ltd, a subsidiary of Societe Generale
Private Banking. He has more than 30 years experience in the
nancial, trust and wealth management industry. He holds several
directorships in companies listed on Singapore Stock Exchange (SGX)
including Bund Center Investment Ltd, Mirach Energy Ltd and Keong
Hong Holdings Ltd. He has a Bachelors degree in Commerce from
the University Of Newcastle, Australia.
2013101

30
Mirach Energy Ltd
1. Mr Lim Jun Xiong Steven 2. Mr Teh Wing Kwan 3. Mdm Emma Cheung Kam Wa
4. Mr Teo Cheng Kwee 5. Mr Foo Tee Heng 6. Mr Yang Jian
7. Mr Fong Heng Boo 8. Mr Tao Yeoh Chi 9. Mr Ng Hoi Gee, Kit
(Non-board member)
Mr Teh Wing Kwan
Group Chief Executive Ofcer and Executive Director
Mr Teh Wing Kwan has been appointed as the Group Chief Executive
Ofcer (CEO) and Executive Director of the Company with effect
from 3 October 2013.
Mr Teh specializes in corporate nance, corporate restructuring and
merger & acquisition. He has had signicant experience having been
a nancial professional advising and investing in companies, family-
owned enterprises and regional asset owners with their businesses
listed in and preparing to list in Singapore, Hong Kong, Australia,
Malaysia, Vietnam and Taiwan. He is currently a non-executive and
non-independent director of Heng Fai Enterprises Limited (listed
on the Hong Kong Stock Exchange and previously known as Xpress
Group Limited), CCM Group Limited (listed on the Catalist of the
SGX-ST) and Asian American Medical Group Limited (listed on the
Australian Securities Exchange and previously known as Asian Centre
For Liver Diseases And Transplantation Limited). Mr Teh is also a
sophisticated investor, a Director of BMI Capital Partners Limited
(Hong Kong), and appointed Advisor to the Board of Koda Ltd (listed
on the Main Board of the SGX-ST). He was also previously appointed
Audit Committee Chairman and Independent Director of other
public companies listed on the SGX-ST.
Mr Teh is a Fellow of the Association of Chartered Certied
Accountants (United Kingdom), a Chartered Accountant of Institute
of Singapore Chartered Accountant, a Chartered Accountant of
Malaysian Institute of Accountants and a Full Member of Singapore
Institute of Directors.
Madam Emma Cheung Kam Wa
Chief Operating Ofcer and Executive Director
Mdm Cheung Kam Wa Emma has been appointed as a Member
of the Board with effect from 14 November 2012. She joined the
Company as Chief Operating Ofcer on 1 January 2012. She has
more than 20 years of company management experience mainly in
the area of commodity trading, logistics, merger and acquisition and
is familiar with China and Hong Kong commercial and accounting
regulations. Prior to joining the Company, Mdm Cheung held senior
management position in Sichuan TranVic Group in China and as
the General Manager of HSC Resources Ltd in Hong Kong. Now
she assists the Chief Executive Ofcer in the Companys day-to-day
operations. She holds a Master Degree in law from the Graduate
School, Chinese Academy of Social Sciences.
Mr Teo Cheng Kwee
Non-Executive Director
Mr Teo Cheng Kwee has been re-designated as Non-Executive
Director of the Company with effect from 3 October 2013. He was
the founder of the Group and was the Companys CEO for nearly 40
years before his re-designation. During his reign, he was responsible
for charting the Companys direction and has led a series of
successful acquisitions that enhances the value of the company. He
also brought the Company to the Mainboard of SGX in 2011 from its
Catalist listing. Mr Teos vast experience and acute business acumen
would value-add to the Company going forward.
2013103
, Asian
American Medical Group Limited
Asian Centre For Liver Diseases And Transplantation
Limited
BMI

201211142012
13 20
2013103
, 40
2011

BOARD OF DIRECTORS
& KEY EXECUTIVE
16
Sharpening Focus
Mr Foo Tee Heng
Non-Executive Director
Mr Foo Tee Heng has been re-designated as Non-Executive Director
of the Company with effect from 3 October 2013. Prior to the re-
designation, he was its Executive Director overseeing the marketing,
administration and human resource matters. Mr Foo has more than
30 years of experience in the building and construction industry and
has led the Company to set foot in Myanmar as early as 1978 for its
construction business.
Mr Yang Jian
Non-Executive and Non Independent Director
Mr Yang Jian has been appointed to the Board with effect from
20 July 2009. He was last re-elected on 24 April 2012. Mr Yang
holds directorships in several other companies including Trisonic
International Limited (since 2006) and Sichuan Chuanwei Group Co.,
Ltd (since 2001). Prior to that, he was also the Company Secretary
of Sichuan Chuanwei Group Co., Ltd (since 1998). Mr Yang holds a
Masters Degree in Administration from Chongqing University.
Mr Fong Heng Boo
Non-Executive and Independent Director
Mr Fong Heng Boo has been appointed to the Board on 15 January
2014 as a Non-Executive and Independent Director. Mr Fongs career
started in 1975 as an Auditor in Singapore Auditor- Generals Ofce.
He was holding the appointment of Assistant Auditor General when
he left in 1993. He later joined Amcol Holdings as General Manger
(Corporate Development) and then Easy Call International Pte Ltd
as Chief Financial Ofcer. In 1998, he was Deputy General Manager
(Corporate Service) in Singapore Turf Club and was later promoted to
Senior Vice President (Corporate Service). In 2004, he was seconded
to Singapore Totalisator Board as Director (Special Duties) where he
led the Boards nance & Investment functions. Mr Fongs expertise
lies in the area of audit, nance and corporate management. He
holds directorship in three other public-listed companies. Mr Fong
graduated in 1973 from National University of Singapore with
a Second Class Honours Degree in Bachelor of Accountancy. He
is also a Fellow member of the Institute of Singapore Chartered
Accountant.
Mr Tao Yeoh Chi
Independent Director
Mr Tao Yeoh Chi has been appointed to the Board with effect from
1 October 2013 as an Independent Director. Mr Tao started his
career in the public service sector, held senior positions in various
ministries and the Prime Ministers ofce. He later joined a few
multi-national companies before he started his own business. He
holds directorship in several companies listed on SGX, including
Hanwell Corporation, Eratat Lifestyle, Next Generation, CCM Group
and ST Telecommunications (Beijing). Mr Tao graduated in 1975
2013103
301978
200972 02012424

2006 2001
( 1998 )
2014115
1975
1993Amcol
()Easy Call International Pte Ltd
1998
2004
1973
2013101

from Newcastle University, Australia with a First Class Honours
Degree in Bachelor of Engineering and a Degree in Bachelor of Arts
(Economics).
Mr Wei Jian Ping
Non-Executive and Independent Director
Mr Wei Jian Ping has been appointed to the Board with effect from
18 September 2008. He was last re-elected on 25 April 2011. Mr Wei
graduated from Southwest China University of Political Science and
also holds a degree from China Sichuan University of Economics. He
joined the province of Sichuan Department of Justice from 1986 to
1994. Since 1997, he has been with Sichuan Tianwen Law Firm and
is presently a senior partner of the rm. He was the Vice Chairman
of the Ninth Sichuan Province Federation of Commerce and Industry
and a Vice President of the Sichuan Province Bar Association. He is
also a representative of Sichuan Peoples Congress Committee.
Mr Duan Bing
Non-Executive and Non Independent Director
Mr Duan Bing has been appointed to the Board with effect from 8
June 2009. He was last re-elected on 24 April 2012. Mr Duan started
as an Application Specialist of Singapore Winsys Technology Pte Ltd
in August 2001 and later joined Nanyang Technological University
as a Project Ofcer. Currently, he is the manager of Chongqing
Guanyu Corporation Limited. Mr Duan graduated from Department
of Communication Engineering of Chongqing University. He also
holds Masters Degree in Engineering from Nanyang Technological
University.
Mr Ng Hoi Gee, Kit
Chief Financial Ofcer (Non-board member)
Mr Ng Hoi Gee, Kit was appointed as Chief Financial Ofcer on 1
May 2011. He joined the Group in 2009 as Chief Financial Ofcer
of Neijiang Chuanwei Special Steel Corporation Ltd, a subsidiary
of the Group Prior to joining the Group, Mr Ng was a Senior Audit
Manager in the Audit Group at KPMG Huazhen in Beijing and KPMG
Singapore. He has also worked as a Group Finance Manager of a
public listed company in Singapore. In his current capacity as CFO,
he manages and oversees the nance and accounting function of the
Group. Mr Ng graduated from the Association of Chartered Certied
Accountants and is a member of Institute of Singapore Chartered
Accountant
1975
2008 918 2009 422
1986 1994
1997
2009682012424
20018Singapore Winsys Technology Pte
LtdApplication Specialist
Project Officer
201151200910
RESULTS
AT A GLANCE
18
Sharpening Focus
Group
Results of Continuing Operations 2013
$000
2012
$000
Revenue 6 29,429
Cost of sales (5) (30,189)
Gross prot 1 (760)
Other income 1,845 290
Distribution costs - (79)
Administrative expenses (6,104) (6,108)
Other expenses (490) (7,149)
Loss from operations (4,748) (13,806)
Finance costs - (2)
Share of results of associates 44 (173)
Loss before income tax (4,704) (13,981)
Income tax expense - -
Loss from continuing operations (4,704) (13,981)
Discontinued operations
Loss from discontinued operations (net of tax) (152,472) (15,434)
Loss for the year (157,176) (29,415)
Group
Results of Discontinued Operations 2013
$000
2012
$000
Revenue 174,483 107,770
Cost of sales (172,237) (88,145)
Gross prot 2,246 19,625
Other income 4,452 9,621
Distribution costs (963) (856)
Other expenses
- Other operating expenses (3,869) (10,339)
- Assets impairment (87,349) (9,641)
- Loss on re-measurement of
Assets Held-For-Sale
(58,001) -
(Loss)/prot from operations (149,415) 3,668
Finance costs (3,812) (6,713)
Share of results of associates - (6,368)
Loss before income tax (153,227) (9,413)
Income tax expense 755 (6,021)
Loss from discontinued operations (152,472) (15,434)
Net operating loss after tax (7,122) (5,793)
Assets impairment and loss on
re-measurement of Assets Held-For-Sale (145,350) (9,641)
Revenue
Fell on cessation of the loss-making mineral trading business.
Other income
Increased by $1.6 million mainly due to exchange gain arising from a
stronger US$ against the S$.
Administrative expenses
Relatively unchanged operating costs were lower after cost-cutting
but burdened by one-off redundancy and other rationalization cost;
and higher professional fees for new acquisition.
Other expenses
Fell by $6.7 million due to lower provision of doubtful debts of $5.1
million, in the absence of loss on inventory of $0.8 million and other
NRV adjustment on development properties of $0.6 million.
Loss from continuing operations
Given the above, net loss for Continuing Operations narrowed to
$4.7 million.
Discontinued operations (steel business) comprise the Groups
investments in its 100%-owned subsidiaries Sapphire Mineral
Resources (HK) Ltd and Lucky Art Holdings Limited and available-for-
sale financial assets in 16% Prime Empire Limited (PEL) and 16%
Precise Skill Limited (PSL). We plan to sell the entire steel business.
Revenue
Increased due to additional revenue stream from sale of cold rolled
coil and higher sales for vanadium products.
Gross prot
Fell sharply despite higher revenue due to lower average unit selling
price, higher unit production costs and provision for obsolete stock
for HRC.
Other income
Fell in the absence of dividend income, interest income and fair value
hedge gain despite additional rental income from lease of Longweis
industrial land, building and equipment.
Other operating expenses
Fell in the absence of goodwill write-off.
Assets impairment
The impairment loss of $87.3 million consists of $26.4 million loss from
fair value assessment of investment in PEL and PSL, impairment loss of
$59.8 million on property, plant & equipment and impairment loss of
$ 1.1 million on intangibles for the HRC, rebar and V2O5 CGU : these
impairment losses were due mainly to a fall in value-in-use given the
weak steel market condition which caused lower capacity utilization.
Loss on re-measurement of Assets Held-For-Sale
Assets Held-For-Sale is now recorded at $66 million with an
impairment loss of $58 million on marked to market valuation .
Finance costs
Fell due to lower interest expense on back of lower bank borrowings
(we capped borrowings for capex).
Share of results of associates
This relates to the share of loss of PEL, which was reclassified to
available for sale financial assets when the Company lost significant
influence over its operations in 2012.
Net operating loss after tax
Increased due mainly to significantly lower gross margin.
RESULTS
AT A GLANCE
Total non-current assets
Fell sharply due to reclassication of various
assets item to Assets Held-For-Sale
Development properties
The development properties were sold in April
2013 with no profit/loss.
Short term loans receivables
There was a $2.3 million secured loan receivable
from the Australia-based Mancala prior to
completion of the acquisition. We received full
payment of $0.9 million from Trisonic in 2013.
Current assets items
Fell due to reclassification of various assets as
Assets Held-For-Sale
Fair Value of Assets Held-For-Sale
Consist of the Groups Steel Business and
such related investments.
Assets classied as Held-For-Sale $295,630
Liabilities classied as Held-For-Sale $229,630
-----------
Fair value of assets Held-For-Sale* $ 66,000
-----------
* An independent professional rm has been
engaged to assess the fair value (based on
market value approach), with indicative fair
value to be between $65 million and $89 million.
Total equity
Fell due mainly to current year operating losses,
assets impairment losses and marked-to-market
loss.
Liabilities items
Fell due to reclassification of various liabilities
as Liabilities Held-For-Sale
Financial liabilities
Fully repaid during the year
Group
Balance Sheet 31/12/2013
$000
31/12/2012
$000
Assets
Property, plant and equipment 144 179,447
Intangible assets - 1,860
Prepaid leases - 45,278
Interests in subsidiaries - -
Interests in associates 883 913
Other investments 1 40,846
Total non-current assets 1,028 268,344
Development properties - 5,555
Short term loans receivables 2,255 933
Inventories - 23,722
Trade and other receivables 300 87,012
Deposit with an afliated party - 60,654
Current tax asset - 217
Cash at bank and in hand 6,719 36,514
Assets classied as held for sale 295,630 -
Total current assets 304,904 214,607
Total assets 305,932 482,951
Equity
Share capital 260,489 260,489
Reserves (187,004) (35,740)
Total equity 73,485 224,749
Liabilities
Long term payable to an afliated party - 103,986
Deferred tax liabilities - 12,176
Total non-current liabilities - 116,162
Trade and other payables 2,616 114,335
Current tax liabilities - 747
Provisions 201 305
Liabilities classied as held for sale 229,630 -
Financial liabilities - 26,653
Total current liabilities 232,447 142,040
Total liabilities 232,447 258,202
Total equity and liabilities 305,932 482,951
CORPORATE
STRUCTURE
20
Sharpening Focus
Sapphire
Corporation
Limited
Sapphire Mineral
Resources Pte Ltd
Sapphire Mineral
Resources (HK) Ltd
100%
100%
Mancala Holdings
Pty Ltd
Mancala Pty Ltd
Mancala Asia Ltd (HK)
Mancala Mining
Pty Ltd
Mancala Mine
Services Pty Ltd
Spectrum Resources
Australia Pty Ltd
100%
100%
100%
100%
100%
100%
Lucky Art
Holdings Ltd
Neijiang Chuanwei
Special Steel Co Ltd
Sichuan Longwei
Metal Product
Co., Ltd
Chengdu Lucky
Fortune Trading
Co., Ltd
Chengdu Sapphire
Cellar I/E Co., Ltd
100%
100%
100%
100%
100%
Assets held for Sale
Industrial Contracts
Marketing
(2001) Pte Ltd
Hainan IRE Letian
Construction
Sapphire
Construction &
Development Pte Ltd
36.67%
49%
100%
100%
Tudor Jaya
Sdn Bhd
22 CORPORATE GOVERNANCE REPORT
38 DIRECTORS REPORT
43 STATEMENT BY DIRECTORS
44 INDEPENDENT AUDITORS REPORT
45 BALANCE SHEETS
46 CONSOLIDATED INCOME STATEMENT
47 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
48 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
50 STATEMENT OF CHANGES IN EQUITY
51 CONSOLIDATED CASH FLOW STATEMENT
53 NOTES TO THE FINANCIAL STATEMENTS
115 ADDITIONAL INFORMATION
116 SHAREHOLDINGS STATISTIC
118 NOTICE OF GENERAL MEETING
PROXY FORM
CONTENTS
22
Annual Report 2013
CORPORATE GOVERNANCE REPORT
The Company recognises the importance of good corporate governance and the ofering of high standards of accountability to shareholders.
This report describes the Companys corporate governance framework and practices in compliance with the principles and guidelines of the
Code of Corporate Governance 2012 (the Code).
THE CODE
The Code is divided into four main sections:
(A) Board Matters
(B) Remuneration Matters
(C) Accountability and Audit
(D) Shareholder Rights and Responsibilities
(A) BOARD MATTERS
BOARDS CONDUCT OF ITS AFFAIRS (PRINCIPLE 1)
The Board conducts at least four meetings a year and where necessary, additional board meetings are held to address signifcant issues or
transactions. The Companys Articles of Association allow a board meeting to be conducted by way of a telephone conference or by means
of similar communication equipment whereby all directors participating in the meeting are able to hear each other. The attendance of the
directors at meetings of the Board and Board committees during the fnancial year ended 31 December 2013 is as follows:
BOARD AUDIT AND RISK
COMMITTEE
NOMINATING
COMMITTEE
REMUNERATION
COMMITTEE
No. of Meeting No. of Meeting No. of Meeting No. of Meeting
Held Attended Held Attended Held Attended Held Attended
Mr Lim Jun Xiong Steven 5 2
(1)
4 1
(1)
1 -
(1)
1 -
(1)
Mr Teh Wing Kwan 5 2
(2)
4 1
#
1 - 1 -
Madam Cheung Kam Wa 5 5 4 4
#
1 - 1 -
Mr Teo Cheng Kwee 5 5 4 4
#
1 1
#
1 1
#
Mr Foo Tee Heng 5 5 4 4
#
1 - 1 -
Mr Yang Jian 5 4 4 4
#
1 1
(3)
1 1
(3)
Mr Duan Bing 5 4 4 4
#
1 1
(4)
1 1
(4)
Mr Tao Yeoh Chi 5 2
(5)
4 1
(5)
1 -
(5)
1 -
(5)
Mr Wei Jian Ping 5 4 4 1 1 1
(6)
1 1
Mr Fong Heng Boo 5 -
(7)
4 -
(7)
1 -
(7)
1 -
(7)
Besides the formal Board meetings, the directors also speak on specifc subjects, discussed major transactions and decisions including the
intention to dispose the steel business and other business plans.
#
By invitation
(1) Appointed as a Director, Chairman of Board and NC and a member of the ARC and RC on 1 October 2013
(2) Appointed as a Director on 3 October 2013
(3) Resigned as a member of NC on 3 October 2013
(4) Resigned as a member of the RC and NC on 3 October 2013
(5) Appointed as a Director, Chairman of RC and a member of the ARC and NC on 1 October 2013
(6) Resigned as a member of NC and appointed as a member of ARC on 3 October 2013
(7) Appointed as a Director, Chairman of ARC and a member of the NC and RC on 15 January 2014
The key roles of the Board are:
to guide the corporate strategy and directions of the Group, approve the broad policies, strategies and fnancial objectives of
the Group and monitoring the performance of management;
to ensure efective management leadership of the highest quality and integrity;
to approve annual budgets, major funding proposals, investment and divestment proposals; and
to provide overall insight in the proper conduct of the Groups business.
Matters which are specifcally reserved for decision by the Board include those involving mergers and acquisitions, material acquisitions and
disposals of assets, corporate or fnancial restructuring, major investments, declaration and proposal of dividends, major corporate policies
on key areas of operations, the release of the Groups quarterly and full-year results, and substantial transactions which have a material efect
on the Group.
When new Directors are appointed to the Board, they are provided with a formal letter setting out the Directors duties and responsibilities. The
orientation programme for a new director includes briefngs by the Chief Executive Ofcer on the Groups business, policies and governance
practices; on-site visits to the various overseas places of operations; continous and ongoing training programmes were made available,
including participaton at courses, seminars and talks on directors duties and responsibilities.
To keep pace with regulatory changes, the directors own initiatives are supplemented from time to time with information, updates and
sponsored seminars conducted by external professionals, including any changes in legislation and fnancial reporting standards, government
policies and regulations and guidelines from SGX-ST that afect the Company and/or the directors in discharging their duties. The directors
are informed of developments relevant to the Group, including changes in laws, regulations and risks that may impact the Group.
Non-executive directors are encouraged to purchase shares in the Company and to hold them until they leave the Board.
BOARD COMPOSITION AND BALANCE (PRINCIPLE 2)
The Board comprises 10 directors of whom 8 are Non-Executive Directors. Of the 8 Non-Executive directors, 4 are independent of the
management and the substantial shareholders.
The Board now comprises the following:-
Mr Lim Jun Xiong Steven - Chairman, Independent and Non-Executive Director
Mr Teh Wing Kwan - Executive Director and Group Chief Executive Ofcer
Madam Cheung Kam Wa - Executive Director and Group Chief Operating Ofcer
Mr Tao Yeoh Chi - Independent and Non-Executive Director
Mr Wei Jian Ping - Independent and Non-Executive Director
Mr Fong Heng Boo - Independent and Non-Executive Director
Mr Teo Cheng Kwee - Non-Executive and Non Independent Director
Mr Foo Tee Heng - Non-Executive and Non Independent Director
Mr Duan Bing - Non-Executive and Non Independent Director
Mr Yang Jian - Non-Executive and Non Independent Director
There is no alternate director on the Board.
24
Annual Report 2013
The Nominating Committee reviews the independence of each director annually. Each independent director is required to complete a
Directors Independence Form annually to confrm his independence based on the guidelines as set out in the Code. The directors must also
confrm whether they consider themselves independent despite not having any relationship identifed in the Code.
There is a clear separation of the role of the Chairman and the Chief Executive Ofcer. This will provide a healthy professional relationship
between the Board and Management to shape the strategic process. The Board is also supported by other board key committees to provide
independent oversight of Management. These key committees are the Audit and Risk Committee (ARC), Remuneration Committee (RC)
and Nominating Committee (NC) and are mainly made up of independent or non-executive directors. The non-executivve independent
directors are encouraged to communicate amongst themselves with the Companys Auditor and Senior Management directly.
Board Composition and Committees
Audit and Risk
Committee
Nominating
Committee
Remuneration
Committee
Board Member
Lim Jun Xiong Steven M C M
Teh Wing Kwan
Cheung Kam Wa
Tao Yeoh Chi M M C
Wei Jian Ping M M
Fong Heng Boo C M M
Teo Cheng Kwee M M
Foo Tee Heng
Duan Bing
Yang Jian M
Note: C: Chairman
M: Member
Membership in the diferent committees are carefully managed to ensure that there is equitable distribution of responsibilities among the
Board members. This is to maximise the efectiveness of the Board and to foster active participation and contribution from the Board
members. Diversity of experience and appropriate skills are also considered.
The Board comprises business leaders and professionals with industry and fnancial background. The Board is of the view that the current
board size of 10 directors is appropriate after taking into consideration the nature and scope of the Groups operations for the efective
conduct of the Groups afairs. The Board believes that the Board and its board committees have a good balance of directors who have
extensive business, fnancial, accounting, human resource and management experience. Details of the Directors academic and professional
qualifcations are set out in the Board of Directors section of this Annual Report.
CHAIRMAN AND CHIEF EXECUTIVE OFFICER (PRINCIPLE 3)
There is a clear separation of the roles and responsibilities between the Chairman and the Chief Executive Ofcer of the Company. The
Chairman who is Independent and Non-Executive is responsible for the functioning of the Board and is free to act independently in the best
interests of the Group and shareholders while the Chief Executive Ofcer is responsible for the Groups corporate strategies, development
and execution of such corporate and operational decisions. The Chairman ensures that the members of the Board work together with the
Management and have the capability and authority to engage Management in constructive views on various matters, including strategic
issues and business planning processes.
NOMINATING COMMITTEE (PRINCIPLE 4 AND 5)
The key roles of the NC are:
to review and make recommendations to the Board on all appointments and re-appointment of members of the Board;
to evaluate and assess the efectiveness of the Board as a whole, and the contribution by each director to the efectiveness of
the Board; and
to determine the independence of directors in accordance with Guideline 2.3 of the Code.
The NC comprises the following 4 Non-Executive Directors:
Mr Lim Jun Xiong Steven - Chairman, Independent and Non-Executive Director
Mr Teo Cheng Kwee - Non-Independent and Non-Executive Director
The NC evaluated the Boards performance as a whole in FY2013 based on performance criteria set by the Board. Each individual director
assessed the performance of the Board. The assessment parameters include amongst others, Board team spirit, quality of decision making,
performance against specifc targets, Directors independence and quality and timeliness of board papers. KPIs used to assess individual
Directors include chairmanship/membership of Board Committees, attendance record at the meetings of the Board and the relevant
committees, intensity of participation at meetings, quality of discussions, helping to gain access to new businesses and/or new markets and
any special contributions. The performance measurements ensure that the mix of skills and experience of the directors continue to meet the
needs of the Group. The NC is of the view that each individual director has contributed to the efectiveness of the Board as a whole.

The NC has in place a selection and nomination process for the appointment of new Director. For appointment of new directors to the
Board, the NC would, in consultation with the Board, evaluate and determine the selection criteria with due consideration to the mix of skills,
knowledge and experience of the existing Board. The NC does so by frst evaluating the existing strengthens and capabilities of the Board,
before it proceeds to assess the likely future needs of the Board, assess whether this need can be fulflled by the appointment of one person
and if not, then to consult the Board with respect to the appointment of two persons, seek likely candidates widely and source resumes for
review, undertake background checks on the resumes received, narrow this list of resumes to a short list and then to invite the shortlisted
candidates to an interview which may include a briefng of the duties required to ensure that there are no expectations gap, and to ensure
that any new director appointed has the ability and capacity to adequately carry out his duties as a director of the Company, taking into
consideration the number of listed company board representations he holds and other principal commitments he may have. The NC will seek
candidates widely and beyond persons directly known to the Directors and is empowered to engage professional search frms and also give
due consideration to candidates identifed by any persons. The NC will interview all potential candidates in frank and detailed meetings and
make recommendations to the Board for approval.
The NC, in determining whether to recommend a director for reappointment, will have regard to such directors contribution and performance
to the Group and whether such director has been adequately carrying out his or her duties as a director, taking into consideration that
directors number of listed company board representations and other principal commitments. The NC notes that directors with multiple listed
company board representation have been taking independent actions to address the issue, and it is satisfed that adequate time and attention
have been given to the afairs of the Company, through attendance at meetings of the Board and Board Committees, including electronic and
telephone communications, by all Directors.
26
Annual Report 2013
The present and past directorships (held in the last 5 years) of the directors with other public listed companies are set out in the following
tables:
Other directorship with public listed companies
Company Listed on Position
Keong Hong Holdings Limited SGX Independent Director
Bund Center Investment Ltd SGX Independent Director
Mirach Energy Limited SGX Independent Director
Past directorship with other public listed companies (held in the last 5 years)
Passion Holdings Limited SGX Independent Director
MAP Technology Holdings Limited SGX Independent Director
Mr Teh Wing Kwan
Heng Fai Enterprises Limited HKEx Non-Executive and Non Independent
Director
Asian American Medical Group Ltd ASX Non-Executive Director and Non
CCM Group Limited SGX Non-Executive Director and Non
Creative Master Bermuda Limited SGX Independent Director
China Titanium Ltd SGX Independent Director
Mr Tao Yeoh Chi
Hanwell Holdings SGX Independent Director
Eratat Lifestyle Ltd SGX Independent Director
CCM Group Limited SGX Independent Director
China Titanium Ltd SGX Independent Director
Mr Teo Cheng Kwee

China Vanadium Titano-Magnetite Mining
Company Limited
HKEx Non-Executive and Non Independent
Director
NIL
Mr Fong Heng Boo
CapitaRetail China Trust Management
Limited
SGX Independent Director
Pteris Global Limited SGX Independent Director
Asian American Medical Group Limited ASX Independent Director
Colex Holdings Limited SGX Independent Director
NIL
Mdm Cheung Kam Wa Emma (COO), Mr Foo Tee Heng (Non-Executive Director), Mr Yang Jian (Non-Executive Director), Mr Duan Bing
(Non-Executive Director) and Mr Wei Jian Ping (Independent Director) do not hold directorship with other public listed companies and also
did not hold such directorship in the past 5 years.
Although the non-executive directors and the CEO hold directorships in other companies which are not in the Group, the Board is of the view
that such multiple board representations did not hinder them from carrying out their duties as directors. These directors would contribute
their invaluable experiences to the Board and give it a broader perspective. The Companys current policy stipulates that if a director is an
executive director or a key management personnel, he/she should not hold more than six listed company board representation concurrently.
During the year, no Director held more than six board seats in other listed companies concurrently.
28
Annual Report 2013
ACCESS TO INFORMATION (PRINCIPLE 6)
The Management will provide quarterly management accounts and other relevant information to the Board. The Management will submit the
periodical group performance report and other relevant information to the Board. In addition, all other relevant information on material events
and transactions are circulated by electronic mail and facsimile to the directors for review and approval. The senior management staf may
be invited to attend the Board and Audit and Risk Committee Meetings to answer queries and to provide insights into its Groups operations.
The Board has separate and independent access to the senior management and the Company Secretary at all times. The Board will consult
independent professional advice where appropriate. The Company Secretary attends all board meetings and most committee meetings and
is responsible to ensure that board procedures are followed. The Company Secretary assists the Board to ensure that applicable rules and
regulations (in particular the Companies Act, Cap. 50 and SGX-ST Listing Manual) are complied with.
The appointment and removal of the Company Secretary are subject to the Boards approval.
(B) REMUNERATION MATTERS
PROCEDURES FOR DEVELOPING REMUNERATION POLICIES (PRINCIPLE 7 AND 8)
The RC has adopted specifc terms of reference. The RC will seek independent professional advice, if necessary.
The RC comprises the following 6 Non-Executive Directors:
Mr Tao Yeoh Chi - Chairman, Independent and Non-Executive Director
Mr Lim Jun Xiong Steven - Independent and Non-Executive Director
Mr Teo Cheng Kwee - Non-Independent and Non-Executive Director
Mr Yang Jian - Non-Independent and Non-Executive Director
RCs main functions are:
to review and recommend to the Board in consultation with Management and Chairman of the Board, a framework of
remuneration and to determine specifc remuneration packages and terms of employment for each of the executive directors
of the Group including those employees related to executive directors and substantial/controlling shareholders of the Group;
to recommend to the Board in consultation with management and the Chairman of the Board, the Sapphire Share Award
Scheme or any long term incentive schemes which may be set up from time to time and to do all acts necessary in connection
therewith; and
to carry out its duties in the manner that it deemed expedient, subject always to any regulations or restrictions that may be
imposed upon the RC by the Board of Directors from time to time.
As part of its review, the RC shall ensure that:
all aspects of remuneration including directors fees, salaries, allowances, bonuses, options and benefts in-kinds should be
covered;
the remuneration packages should be comparable within the industry practices and norms and shall include a performance
related element coupled with appropriate and meaningful measures of assessing individual executive directors performances;
and
the remuneration package or employees related to executive directors and controlling shareholders of the Group are in line with
the Groups staf remuneration guidelines and commensurate with their respective job scopes and levels of responsibilities.
No director is involved in deciding his own remuneration.
The remuneration of non-executive directors should be appropriate to the level of contribution, taking into account factors such as efort and
time spent and responsibilities of the directors. Non-executive directors shall not be over-compensated to the extent that their independence
may be compromised. The non-executive and independent directors do not have any service contracts. They are paid a basic fee and
additional fees for serving on any of the Committees. The Board recommends payment of such fees to be approved by shareholders as a
lump sum payment at the AGM of the Company.
The executive directors do not receive directors fees. Service contracts for Executive Directors are for a fxed appointment period and are
not to be excessively long or with onerous removal clauses. The RC considers what compensation the directors contracts of service would
entail in the event of early termination and aims to be fair and avoid rewarding poor performance. The service contracts will be reviewed
by the RC before expiry. Executive Directors remuneration packages consist of salary, allowances and bonuses. There are no onerous
compensation commitments on the part of the Company in the event of termination of services of the executive directors.
The RC also reviews the remuneration of senior management.
The RC also administers the Sapphire Shares Award Scheme (the Scheme). The Scheme is based on the principle of strengthening the
Companys competitiveness in attracting and retaining superior local and foreign talent. The scheme allows the Company to target specifc
performance objectives and to provide an incentive for participants to achieve these targets. The purpose of the Scheme is to improve
the Companys fexibility and efectiveness in rewarding, retaining and motivating its employees (including Directors) and to improve their
performance.
Persons eligible to participate in the Scheme are as follows:
(i) Group Employees who have been employed for a minimum of one year or such shorter period as the Committee may determine;
(ii) Executive Directors; and
(iii) Non-Executive Directors.
Other information relating to the Scheme is set out below:
(i) The aggregate number of shares to be delivered (Award Shares) on any date shall not exceed ffteen percent (15%) of the issued
shares of the Company on the day preceding that date;
(ii) The Committee may grant Award Shares at any time during the fnancial year of the Company;
30
Annual Report 2013
(iii) The awards of performance shares are conditional on performance target set within the prescribed performance period;
(iv) The selection of a participant, the number of shares to be awarded, the performance target(s) and other conditions of the award shall
be determined at the absolute discretion of the Committee, which shall take into account criteria such as rank, job performance, years
of service, potential for future development, contribution to the success of the Company and its subsidiaries (the Group) and extent
of efort required to achieve the performance targets within the performance period set;
(v) The participant has continued to be in employment with the Group from the date of the Award; and
(vi) The participant who met the performance targets but had ceased to be employed by the Company will receive the shares as allowed
by the Scheme.
During the fnancial year ended 31 December 2013, no shares award was granted.
DISCLOSURE OF REMUNERATION (PRINCIPLE 9)
Since the commencement of the Scheme to 31 December 2013, the aggregate number of shares granted to the Directors of the Company
were as follows:-
Shares Award granted to the Directors on 11 August 2008
Number of Shares
Awarded
(1)
Former executive Directors
Teo Cheng Kwee
(2)
2,880,000
Foo Tee Heng
(2)
600,000
Former Non-executive Directors
Dr Tan Eng Liang
(3)
660,000
Chan Kum Onn Roger
(3)
595,000
Goh Chee Whui
(4)
400,000
5,135,000
Note:
(1) Equivalent number of shares after consolidation of twenty (20) ordinary shares into one (1) ordinary share in the capital of the Company
on 28 February 2011
(2) Re-designated as non-executive on 3 October 2013
(3) Resigned on 2 October 2013
(4) Resigned on 20 July 2009
Since the commencement of the Scheme, no shares award have been granted to controlling shareholders of the Company or associates of
the Company and no employees have received 5% or more of the total share awards available under the Scheme.
Annual Remuneration (excluding compensation) of Board of Directors and Key Executive
Name of Director
Remuneration
Band Salary Bonus
Other
Benefts
Directors
Fees
(1)
Total
$ % % % % %
Executive Directors
Mr Teh Wing Kwan
(appointed on 3 October 2013)
500,000 to
749,999
(2)
99 0 1 0 100
Mdm Cheung Kam Wa Emma 250,000 to
499,999
66 10 24 0 100
Independent Directors
0 to 249,999 0 0 0 100 100
Mr Tao Yeoh Chi
0 to 249,999 0 0 0 100 100
Mr Wei Jian Ping 0 to 249,999 0 0 0 100 100
Non-Executive Directors
Mr Teo Cheng Kwee
(3)
250,999 to
499,999
68 25 6 1 100
Mr Foo Tee Heng
(3)
0 to 249,999 77 10 12 1 100
Mr Yang Jian 0 to 249,999 0 0 0 100 100
Mr Duan Bing 0 to 249,999 0 0 0 100 100
Former Independent Directors
Dr Tan Eng Lian
(resigned on 2 October 2013)
0 to 249,999 0 0 0 100 100
Chan Kum Onn Roger
0 to 249,999 0 0 0 100 100
Former Non-Executive Directors
Dai Bin
(4)
0 to 249,999 21 46 23 10 100
Key Executive
(5)
Mr Ng Hoi Gee Kit 0 to 249,999 75 11 14 100
Due to confdentiality, the Company only disclosed the remuneration (excluding compensation) of the Board of Directors and key executive
in bands of $250,000. The Company believes the disclosure of further details is disadvantageous to its business interests, given the highly
competitive industry conditions, where poaching has become common place in a liberalised environment.
32
Annual Report 2013
Note:
(1) These fees comprise Board and Board Committee fees for FY2013, which are subject to approval by shareholders as a lump sum at
the 2014 AGM.
(2) This is disclosed based on the annualised remuneration of Mr. Teh Wing Kwan. Mr Teh Wing Kwan was appointed as Group CEO on
3 October 2013, serving the Group for approximately 3 months only in FY2013.
(3) Mr Teo Cheng Kwee and Mr Foo Tee Hengs salary, bonus and other beneft relates to their compensation as executive directors. They
have been re-designated as non-executive since 3 October 2013. Their directors fees are pro-rated for the period as non-executive
directors of the Company. In addition to the above, there were compensation paid to Mr Teo Cheng Kwee and Mr Foo Tee Heng on
early termination of their service contract amounting to $335,250 and $111,750, respectively in FY2013.
(4) Dai Bins remuneration includes his salary, bonus and other benefts for his appointment as Chairman, Legal Representative and
General Manger of Neijiang Chuanwei Special Steel Co., Ltd, a subsidiary of the Group.
(5) The Code requires the remuneration of at least the top 5 key executives who are not also Directors to be disclosed in the bands of
$250,000. As the Company has only one key executive (who is not a Director), only Mr Ng Hoi Gee Kits remuneration has been
disclosed.
The Company does not have any employee share option schemes or other long-term incentive scheme for directors, except for the Sapphire
Shares Award Scheme which was established by the Company in FY2008 and service contracts for Executive Directors.
The overall wage policy for the employees is linked to performance of the Group as well as individual and is determined by the Board and its
Remuneration Committee (where applicable). The Board will respond to any queries raised at AGMs pertaining to such policies. Accordingly,
it is the opinion of the Board that there is no necessity for such policies to be approved by the shareholders.
No spouse, children and immediate family members relating to the Companys Directors are working for the Group in the year 2013.
(C) ACCOUNTABILITY AND AUDIT (PRINCIPLE 10 TO 13)
AUDIT AND RISK COMMITTEE
The Audit Committee was renamed the Audit and Risk Committee with efect from 26 February 2013.
The ARC comprises the following 4 Non-Executive Directors:
Mr Fong Heng Boo - Chairman, Independent and Non-Executive Director
Mr Lim Jun Xiong Steven - Independent and Non-Executive Director
The Board considers that the members of the ARC are appropriately qualifed to fulfll their responsibilities as the members bring with them
invaluable managerial and professional expertise in the fnancial, business and industry domain.
The ARC has written terms of reference. The ARC meets at least four times a year to perform the following functions:
to review the Groups audit plans, scope and results with the external auditors and the evaluation of the Groups system of
internal controls with the internal auditors;
to review and approve the quarterly and year-end announcement results and annual fnancial statements before submission to
Board of Directors;
to review interested parties transactions;
to nominate the external auditors for re-appointment and review their independence;
to review the co-operation given to auditors;
to review the adequacy of the internal controls and compliance; and
to oversee the Groups risk management framework and policies.
The ARC is kept abreast by the Management and the external auditors of changes to accounting standards, Listing Rules of the SGX-ST and
other regulations which could have an impact on the Groups business and fnancial statements.
In line with the requirements of SGX-ST, negative assurance confrmations on interim fnancial results were issued by the Board confrming
that to the best of its knowledge, nothing had come to the attention of the Board which would render the Companys quarterly results to be
false or misleading in any material respect.
The Company has a whistle blowing policy to encourage and provide a channel to employees to report in good faith and in confdence, their
concerns about possible improprieties in fnancial reporting or other matters, such as suspected fraud, corruption, dishonest practices etc.
Pursuant to such whistle-blowing procedures, employees are free to submit complaints confdentially or anonymously to the chairman of the
ARC and in this regard a dedicated email address has been set up which is accessible only by the chairman of the ARC and/or a designated
member of the ARC. The procedures for submission of complaints have been explained to all employees of the Group. All complaints are to
be treated as confdential and are to be brought to the attention of the ARC. All reports including unsigned reports, reports weak in details
and verbal reports are considered. In the event that the report is about a director, that director shall not be involved in the review and any
decisions with respect to that report. Assessment, investigation and evaluation of complaints are conducted by or at the direction of the ARC
and the ARC, if it deems appropriate, may engage at the Companys expense independent advisors. Following investigation and evaluation
of a complaint, the ARC will then decide on recommended disciplinary or remedial action, if any. The action so determined by the ARC to be
appropriate shall then be brought to the Board for authorisation and to the appropriate members of senior management for implementation.
The policy aims to encourage the reporting of such matters in good faith, with the confdence that any employees making such reports will
be treated fairly and be protected from reprisals. Details of the whistle-blowing policy have been made available to all employees.
The external and internal auditors have full access to the ARC and the ARC has full access to the Management. The ARC has the authority
to commission investigations into any matters, which has or is likely to have material impact on the Groups operating and fnancial results.
The ARC meets with the auditors, without the presence of management, at least once a year. The ARC reviews the fndings from the auditors
and the assistance given to the auditors by the management.
The ARC has reviewed all non-audit services provided by the external auditors for Year 2013 and is satisfed that such services would not
afect the independence of the external auditors. The external auditors, during their course of audit, will evaluate the efectiveness of the
Companys internal controls and report to the ARC, together with their recommendations, any material weakness and non-compliance of the
internal controls. The ARC has reviewed the external audit reports and based on the controls in place, is satisfed that there are adequate
internal controls in the Group.
34
Annual Report 2013
The ARC has appointed PricewaterhouseCoopers LLP as the internal auditor of the Group to perform internal audit work under a 2 year
internal audit plan. The internal auditors report directly to the Chairman of the ARC. The internal auditors will submit a report on their fndings
to the ARC for review and approval yearly. The ARC has reviewed the internal audit reports and based on the controls in place, is satisfed
that there are adequate internal controls in the Group.
The Company confrms that it has complied with SGX Listing Rules 712 and Rule 715 for the Year 2013.
NON AUDIT FEES
The audit fees paid to the Auditors of the Company for FY2013 was approximately $380,000.
The non audit fees paid to the Auditors of the Company for FY2013 was approximately $54,000.
RISK MANAGEMENT
The Board with the oversight of the ARC is responsible for the Groups risk management framework and policies. During the year 2013,
the ARC had engaged KPMG Services Pte. Ltd. to assist in developing and establishing an enterprise risk management framework to
identify, evaluate and monitor the Groups material and signifcant risks. The Groups material and signifcant risks are proactively identifed
and addressed thought implementation of efective internal controls. The Company has also defned and documented clear roles and
responsibilities for the Board and Management in risk mitigation, monitoring and reporting.
KPMG Services Pte. Ltd. and the internal auditors will review policies and procedures as well as key controls and will highlight any issues
to the Directors and the ARC. Additionally, in performing their audit of the fnancial statements, the external auditors perform tests over
operating efectiveness of certain controls that the auditors intend to rely on that are relevant to the Groups preparation of its fnancial
statements. The external auditors also report any signifcant defciencies in such internal controls to the Directors and the ARC.
Action plans to manage the risks are continuously being monitored and refned by management and the ARC. Any material non-compliance
or lapses in internal controls together with corrective measures are reported to the Directors and the ARC.

The Board has received assurance from the CEO and CFO:
(a) that the fnancial records have been properly maintained and the fnancial statements give a true and fair view of the companys
operations and fnances; and
(b) the companys risk management and internal control systems are both adequate and efective.
Based on the framework established and the reviews conducted, the Board opines, with the concurrence of the ARC, that there are adequate
and efective internal controls in place within the Group addressing fnancial, operational and compliance risks.
KEY OPERATIONAL RISKS
The Board is aware of the operational risks which may adversely afect the Groups steel business if any of these risk factors and uncertainties
develops into actual events (Please note that most, if not all, of the following events have occurred during the year under review and it should
also be noted that the followings are a non-exhaustive list of those key operational risks, which may afect or have afected the Groups
operations). Despite the fact that the Group has reclassifed the steel business as discontinued operation and Assets Held-for-Sale on the
face of Proft and Loss Account and Balance Sheet respectively, the management is of the opinion that highlight of the following risks factor
is important.
General economic condition the Groups steel business may be afected by global economic conditions and is particularly sensitive to the
economic growth in China. Slowing down in such economic activities may result in weaker demand for overall steel products in China and
afect the revenues growth of the steel business.
Overcapacity the steel industry in China has a high level of overcapacity as a result of weaker-than-expected demand, which continues
to lag far behind supply. The overcapacity issue has caused steel prices to fall. The overcapacity issues have adversely afected the Groups
operations.
Lower factory utilization rate the Groups steel business has not been able to achieve optimal capacity utilization due mainly to weaker
demand for its steel products and given its lower-than-expected utilization rate, the Groups steel business does not appear to be competitive
in its pricing.
Higher raw materials costs some steelmakers in China in the industry is heavily dependent on the need to import raw materials such as iron
ore and metallurgical coal, which mean these steelmakers may have little infuence over their raw materials prices. If such costs are getting
increasingly higher, the operating margins for the steelmakers will be adversely afected. The Groups operations are in no exception.
Higher compliance cost more recently, the steelmaking industry is subject to more stringent environmental control, which means the related
compliance costs have since become increasingly higher. The Groups operations are thus required to invest for better pollution and emission
control and these investments require huge capital outlay.
High debts level the steelmaking industry is capital intensive and most of the capital investments have been funded by borrowings. Some
statistics suggested that the debts level per metric ton produced is now at historic high on average. The high gearing position has further
been burdened by higher cost of fund. The gearing for the Groups steel business is high.
Capacity upgrade while excess capacity remains a signifcant issue in the China steel industry, the country continues to urbanise which
need more steel, but this will be in diferent proportions, forms and specifcations. To a larger extent, the steel industry is thus expected to
move up the value chain by upgrading their facilities but such upgrade means heavier capital expenditure at higher cost of funds with longer
investment recovery period in meeting such long-term demand growth. The Groups expansion capability under such circumstances is
however limited.

Currency risk Foreign currency exchange efects could be volatile. The Group is exposed to currencies movements such as US$/S$ and
Chinese Renminbi/S$. Any adverse movements in these currencies will afect the Groups fnancial performance. The Group will continue
to monitor the foreign currency exchange exposure closely and may hedge the exposure by either entering into relevant foreign exchange
forward contracts or relying on natural hedge or a combination of both.
(D) SHAREHOLDER RIGHTS AND RESPONSIBIITIES (PRINCIPLE 14, 15 AND 16)
The Company recognizes the need to communicate with the shareholders on all material matters afecting the Group and does not practise
selective disclosure.
Price sensitive announcements including quarterly and full year results are released through SGXNET and make available on the Companys
website. A copy of the Annual Report and Notice of AGM will be sent to every shareholder.
The Company supports active shareholder participation at general meetings. At AGMs, shareholders are given the opportunity to air their
views and ask questions regarding the Group and its businesses. If shareholders are unable to attend the meetings, the Companys Articles
of Association allow a shareholder of the Company to appoint up to two proxies to attend and vote in place of the shareholder. The Company
currently does not have the appropriate provisions in its Articles of Association to allow for absentia voting by mail, facsimile or email to
ensure proper authentication of the identity of shareholders and their voting intent. Separate resolutions on each distinct issue are proposed
at general meetings for approval.
36
Annual Report 2013
The Chairman of the Board and the respective Chairman of the various board committees are in attendance at the AGMs to address
shareholders queries. The external auditors are also present to assist the directors to address any queries raised by shareholders about
the conduct of the audit and the preparation and content of the auditors report. Minutes of general meetings which include substantial and
relevant comments or queries from shareholders relating to the agenda of the meeting, and responses from the Board and Management,
were prepared and made available to shareholders upon request.
The Directors are mindful of their obligation to provide shareholders with timely disclosure of material information that is presented in a fair
and objective manner. Shareholders and other investors are provided regularly with:
a. an Annual Report;
b. quarterly fnancial results and other fnancial announcements as required;
c. other announcements on important developments (such as business update); and
d. a website and portal (http://www.sapphirecorp.com.sg/); and
On the Companys website, investors will fnd information about the Companys contact details as well as all publicly disclosed fnancial
information, corporate announcements, annual reports and profles of the Group.
To enable shareholders to contact the top management more easily, the email address of the CEO and CFO can be found in the Group CEOs
Review and on Corporate Information page respectively.
The fnancial statements are released onto the SGX-ST website. All shareholders will receive the annual report of the Company and notice
of AGM by post and through notices published in the newspapers within the mandatory period.
The Group does not have a concrete dividend policy at present. The form, frequency and amount of dividends declared each year will take
into consideration the Groups proft growth, cash position, positive cash fow from generated from operations, projected capital requirements
for business growth and other factors as the Board may deem appropriate.
DEALINGS IN SECURITIES
The Company has in place a policy prohibiting share dealings by directors and employees of the Company during the period commencing
two weeks before the announcement of the Companys fnancial statements for each of the frst three quarters of its fnancial year and one
month before the announcement of the Companys full year fnancial statements. Directors and employees are also prohibited to deal in the
Companys securities on short-term considerations, and are expected to observe the insider trading laws at all times even when dealing in
securities within permitted trading period. The incumbent employees are also required to report to the directors whenever they deal in the
Companys shares.
INTERESTED PERSON TRANSACTIONS
The Company has in place a policy in respect of any transactions with interested person and has established procedures for review and
approval of the interested person transactions entered into by the Group. The ARC has reviewed the rationale and terms of the Groups
interested person transactions and is of the view that the interested person transactions are on normal commercial terms and are not
prejudicial to the interests of the shareholders.
The ARC and Board have reviewed all transactions conducted with interested persons as tabled under Additional Information and have
ascertained that these transactions were carried out accordingly to the Shareholders Mandate.
MATERIAL CONTRACTS
Other than transactions mentioned under lnterested Person Transactions above, and save for the disclosures made in the Directors Report,
there were no material contracts involving the Group with the CEO, Directors, Controlling Shareholder nor their associates during FY2013.
38
Annual Report 2013
DIRECTORS REPORT
We are pleased to submit this annual report to the members of the Company together with the audited fnancial statements for the fnancial
year ended 31 December 2013.
DIRECTORS
The directors in ofce at the date of this report are as follows:
Mr Lim Jun Xiong, Steven (Chairman) (Appointed on 1 October 2013)
Mr Teh Wing Kwan (Chief Executive Ofcer) (Appointed on 3 October 2013)
Ms Cheung Kam Wa, Emma (Chief Operating Ofcer)
Mr Teo Cheng Kwee
Mr Foo Tee Heng
Mr Yang Jian
Mr Wei Jian Ping
Mr Duan Bing
Mr Tao Yeoh Chi (Appointed on 1 October 2013)
Mr Fong Heng Boo (Appointed on 15 January 2014)
DIRECTORS INTERESTS
According to the register kept by the Company for the purposes of Section 164 of the Companies Act, Chapter 50 (the Act), particulars of
interests of directors who held ofce at the end of the fnancial year (including those held by their spouses and infant children) in shares in the
Company (other than wholly-owned subsidiaries) are as follows:
Name of director and corporation
in which interests are held
Holdings
at beginning
of the year/
date of
appointment
Holdings
at end
of the year
Company
Ordinary shares
Yang Jian 8,005,050 8,005,050
Teo Cheng Kwee
- interests held 7,009,581 7,009,581
- deemed interest 870,125 870,125
Foo Tee Heng 1,021,887 1,021,887
Cheung Kam Wa, Emma 437,750 437,750
Except as disclosed in this report, no director who held ofce at the end of the fnancial year had interests in shares or debentures of the
Company or of related corporations, either at the beginning/date of appointment or at the end of the fnancial year.
There were no changes in any of the above mentioned interests in the Company between the end of the fnancial year and 21 January 2014.
DIRECTORS REPORT
Except as disclosed under the Shares Award Scheme of this report, neither at the end of, nor at any time during the fnancial year, was the
Company a party to any arrangement whose objects are, or one of whose objects is, to enable the directors of the Company to acquire
benefts by means of acquisition of shares in or debentures of the Company or any other body corporate.
Except for salaries, bonuses and fees and those benefts that are disclosed in this report and in note 34 to the fnancial statements, since the
end of the last fnancial year, no director has received or become entitled to receive, a beneft by reason of a contract made by the Company
or a related corporation with the director, or with a frm of which he is a member, or with a company in which he has a substantial fnancial
interest.
SAPPHIRE SHARES AWARD SCHEME
The Sapphire Shares Award Scheme (the Scheme) of the Company was approved and adopted by its members at an Extraordinary General
Meeting held on 25 April 2008. The Scheme is administered by the Companys Remuneration Committee (the Committee) whose function
is to assist the Board of Directors in reviewing remuneration and related matters. The Committee is responsible for the administration of the
Scheme and comprises fve directors, Tao Yeoh Chi, Lim Jun Xiong Steven, Fong Heng Boo, Wei Jian Ping, Teo Cheng Kwee and Yang Jian.
The purpose of the Scheme is to improve the Companys fexibility and efectiveness in rewarding, retaining and motivating its employees
(including Directors) and to improve their performance.
Persons eligible to participate in the Scheme are as follows:
(i) Group Employees who have been employed for a minimum of one year or such shorter period as the Committee may determine;
(ii) Executive Directors; and
(iii) Non-Executive Directors.
Other information relating to the Scheme is set out below:
(i) The aggregate number of shares to be delivered (Award Shares) on any date shall not exceed ffteen percent (15%) of the issued
shares of the Company on the day preceding that date;
(ii) The Committee may grant Award Shares at any time during the fnancial year of the Company;
(iii) The awards of performance shares are conditional on performance targets set within the prescribed performance period;
(iv) The selection of a participant, the number of shares to be awarded, the performance targets and other conditions of the award shall
be determined at the absolute discretion of the Committee, which shall take into account criteria such as rank, job performance, years
of service, potential for future development, contribution to the success of the Company and its subsidiaries (the Group) and extent
of efort required to achieve the performance targets within the performance period set;
(v) The participant has continued to be in employment with the Group from the date of the Award; and
(vi) The participant who met the performance targets but had ceased to be employed by the Company will receive the shares as allowed
by the Scheme.
40
Annual Report 2013
DIRECTORS REPORT
The details of shares awarded to participants of the Company under the Scheme are as follows:
Participants
Award Shares granted
during the fnancial year
Aggregate number of shares
awarded since commencement
of Scheme to
31 December 2013
Former Executive Directors, who are now non-executive directors 3,480,000
Former non-Executive Directors 1,655,000
Key Executives 2,200,000
Group Employees 1,232,000
Total Award Shares granted 8,567,000
The Company consolidated twenty (20) ordinary shares into one (1) ordinary share in the capital of the Company in 2011.
No share award was given to any participant during the fnancial year. Since the commencement of the Scheme, no share has been granted
to the controlling shareholders of the Company or their associates and no participant under the Scheme has received 5% or more of the total
share awards available under the Scheme.
During the fnancial year, there were:
(i) no options granted by the Company or its subsidiaries to any person to take up unissued shares in the Company or its subsidiaries;
and
(ii) no shares issued by virtue of any exercise of option to take up unissued shares of the Company or its subsidiaries.
As at the end of the fnancial year, there were no unissued shares of the Company or its subsidiaries under option.
DIRECTORS REPORT
The Audit Committee was renamed the Audit and Risk Committee with efect from 15 January 2013. The Audit and Risk Committee
members at the date of this report are:
Fong Heng Boo (Chairman, Independent and Non-Executive Director)
Lim Jun Xiong, Steven (Independent and Non-Executive Director)
Tao Yeoh Chi (Independent and Non-Executive Director)
Wei Jian Ping (Independent and Non-Executive Director)
The Audit and Risk Committee performs the functions specifed in Section 201B of the Act, the SGX Listing Manual and the Code of
Corporate Governance.
The Audit and Risk Committee has held four meetings since the last directors report. In performing its functions, the Audit and Risk
Committee also reviewed the overall scope of the internal and external audits, the independence of the external auditors and the assistance
given by the Companys ofcers to the auditors. It met with the Companys external and internal auditors to discuss the results of their
examinations and their evaluation of the Companys system of internal accounting controls over fnancial reporting as part of their audit.
The consolidated fnancial statements of the Group and the fnancial statements of the Company were reviewed by the Audit and Risk
Committee prior to their submission to the directors of the Company for adoption. The Audit and Risk Committee also reviewed interested
person transactions conducted under a Shareholders Mandate during the fnancial year. The Audit and Risk Committee has full access to
management and is given the resources for it to discharge its functions. The external and internal auditors have unrestricted access to the
Audit and Risk Committee.
The Audit and Risk Committee is satisfed with the independence and objectivity of the external auditors and has recommended to the Board
of Directors that the auditors, KPMG LLP, be nominated for re-appointment as auditors at the forthcoming Annual General Meeting of the
Company.
In appointing our auditors for the Company, subsidiaries and signifcant associated companies, we have complied with Rules 712 and 715
of the SGX Listing Manual.
42
Annual Report 2013
DIRECTORS REPORT
The auditors, KPMG LLP, have indicated their willingness to accept re-appointment.
On behalf of the Board of Directors
Teh Wing Kwan
Director
Cheung Kam Wa, Emma
Director
31 March 2014
STATEMENT BY DIRECTORS
In our opinion:
(a) the fnancial statements set out on pages 45 to 114 are drawn up so as to give a true and fair view of the state of afairs of the Group
and of the Company as at 31 December 2013 and of the results, changes in equity and cash fows of the Group and the changes in
equity of the Company for the year ended on that date in accordance with the provisions of the Singapore Companies Act, Chapter
50 and Singapore Financial Reporting Standards; and
(b) at the date of this statement, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they
fall due.
The Board of Directors has, on the date of this statement, authorised these fnancial statements for issue.
On behalf of the Board of Directors
Teh Wing Kwan
Director
Cheung Kam Wa, Emma
Director
31 March 2014
44
Annual Report 2013
INDEPENDENT AUDITORS REPORT
MEMBERS OF THE COMPANY
SAPPHIRE CORPORATION LIMITED
Report on the fnancial statements
We have audited the accompanying fnancial statements of Sapphire Corporation Limited (the Company) and its subsidiaries (the Group), which
comprise the balance sheets of the Group and the Company as at 31 December 2013, the income statement, statement of comprehensive
income, statement of changes in equity and cash fow statement of the Group, and the statement of changes in equity of the Company for
the year then ended, and a summary of signifcant accounting policies and other explanatory information, as set out on pages 45 to 114.
Managements responsibility for the fnancial statements
Management is responsible for the preparation and fair presentation of fnancial statements that give a true and fair view in accordance
with the provisions of the Singapore Companies Act, Chapter 50 (the Act) and Singapore Financial Reporting Standards, and for devising
and maintaining a system of internal accounting controls sufcient to provide a reasonable assurance that assets are safeguarded against
loss from unauthorised use or disposition; and transactions are properly authorised and that they are recorded as necessary to permit the
preparation of true and fair proft and loss accounts and balance sheets and to maintain accountability of assets.
Auditors responsibility
Our responsibility is to express an opinion on these fnancial statements based on our audit. We conducted our audit in accordance with
Singapore Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to
obtain reasonable assurance about whether the fnancial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fnancial statements. The
procedures selected depend on the auditors judgement, including the assessment of the risks of material misstatement of the fnancial
statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entitys
preparation and fair presentation of the fnancial statements in order to design audit procedures that are appropriate in the circumstances,
but not for the purpose of expressing an opinion on the efectiveness of the entitys internal control. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating
the overall presentation of the fnancial statements.
We believe that the audit evidence we have obtained is sufcient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the consolidated fnancial statements of the Group and the balance sheet and statement of changes in equity of the Company
are properly drawn up in accordance with the provisions of the Act and Singapore Financial Reporting Standards to give a true and fair view
of the state of afairs of the Group and of the Company as at 31 December 2013 and the results, changes in equity and cash fows of the
Group and the changes in equity of the Company for the year ended on that date.
Report on other legal and regulatory requirements
In our opinion, the accounting and other records required by the Act to be kept by the Company and by those subsidiaries incorporated in
Singapore of which we are the auditors have been properly kept in accordance with the provisions of the Act.
KPMG LLP
Public Accountants and
Chartered Accountants
Singapore
31 March 2014
BALANCE SHEETS
AS AT 31 DECEMBER 2013
Group Company
Note 2013 2012 2013 2012
$000 $000 $000 $000
Assets
Property, plant and equipment 4 144 179,447 144 18
Intangible assets 5 1,860
Prepaid leases 6 45,278
Interests in subsidiaries 7 76,061
Interests in associates 8 883 913 637 637
Other investments 9 1 40,846 1 40,846
Total non-current assets 1,028 268,344 782 117,562
Short-term loan receivables 10 2,255 933 2,255 933
Inventories 11 23,722
Development properties 12 5,555
Deposit with an afliated party 13 60,654
Trade and other receivables 14 300 87,012 15,610 52,063
Current tax asset 217
Cash and cash equivalents 18 6,719 36,514 6,303 2,734
Assets classifed as held for sale 19 295,630 50,687
Total current assets 304,904 214,607 74,855 55,730
Total assets 305,932 482,951 75,637 173,292
Equity
Share capital 20 260,489 260,489 260,489 260,489
Reserves 21 (187,004) (35,740) (187,289) (89,734)
Total equity 73,485 224,749 73,200 170,755
Liabilities
Long term payable to an afliated party 22 103,986
Deferred tax liabilities 23 12,176
Total non-current liabilities 116,162
Trade and other payables 24 2,616 114,335 2,248 2,239
Financial liabilities 25 26,653 5
Provisions 26 201 305 189 293
Current tax liabilities 747
Liabilities classifed as held for sale 19 229,630
Total current liabilities 232,447 142,040 2,437 2,537
Total liabilities 232,447 258,202 2,437 2,537
Total equity and liabilities 305,932 482,951 75,637 173,292
The accompanying notes form an integral part of these fnancial statements.
46
Annual Report 2013
CONSOLIDATED INCOME STATEMENT
YEAR ENDED 31 DECEMBER 2013
Group
Note 2013 2012
$000 $000
Restated *
Revenue 27 6 29,429
Cost of sales (5) (30,189)
Gross proft/(loss) 1 (760)
Other income 28 1,845 290
Distribution costs (79)
Other expenses (490) (7,149)
Loss from operations (4,748) (13,806)
Finance costs 29 (2)
Share of results of associates 44 (173)
Loss before income tax 30 (4,704) (13,981)
Income tax expense 31
Loss from continuing operations (4,704) (13,981)
Loss from discontinued operations (net of tax) 32 (152,472) (15,434)
Loss for the year (157,176) (29,415)
Earnings per share 33
Basic (cents) (19.38) (3.62)
Diluted (cents) (19.38) (3.62)
Earnings per share continuing operations 33
Basic (cents) (0.58) (1.72)
* Refer to Notes 3.19, 19 and 32
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Group
2013 2012
$000 $000
Loss for the year (157,176) (29,415)
Other comprehensive income
Items that are or may be reclassifed subsequently to proft and loss:
Translation diferences relating to fnancial statements of foreign subsidiaries 6,531 (4,957)
Share of associates translation reserve (2,309)
Movement of available-for-sale fnancial assets reserve (1,324) (7,870)
Reclassifcation to proft or loss from equity on disposal of available-for-sale fnancial assets 705
Reversal of fair value reserves of available-for-sale fnancial assets used for repayment of loan 959
Realisation of reserves upon loss of signifcant infuence in an associate 111
Other comprehensive income for the year, net of tax 5,912 (14,066)
Total comprehensive income for the year (151,264) (43,481)
48
Annual Report 2013
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50
Annual Report 2013
STATEMENT OF CHANGES IN EQUITY
Share
capital
Capital
reserve
Other
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Fair value
reserve
Accumulated
(losses)/
profts Total equity
$000 $000 $000 $000 $000 $000
Company
At 1 January 2012 260,489 1,084 (1,353) 10,991 (102,438) 168,773
Total comprehensive income
Proft for the year 2,599 2,599
Movement of available-for-sale fnancial assets
reserve 11,708 11,708
Reversal of fair value reserve of available-for-
sale fnancial assets transferred to subsidiary
for repayment of loan (12,325) (12,325)
Total other comprehensive income (617) (617)
Total comprehensive income (617) 2,599 1,982
At 31 December 2012 260,489 1,084 (1,353) 10,374 (99,839) 170,755
Total comprehensive income
Loss for the year (88,678) (88,678)
Movement of available-for-sale fnancial assets
reserve (8,547) (8,547)
Reclassifcation to proft or loss from equity on disposal
of available-for-sale fnancial asset (330) (330)
Total other comprehensive income (8,877) (8,877)
Total comprehensive income (8,877) (88,678) (97,555)
At 31 December 2013 260,489 1,084 (1,353) 1,497 (188,517) 73,200
CONSOLIDATED CASH FLOW STATEMENT
Note 2013 2012
$000 $000
Restated *
Cash fows from operating activities
Loss before income tax from continuing operations (4,704) (13,981)
Adjustments for:
Depreciation of property, plant and equipment 68 99
Interest expense 2
Interest income (32) (201)
Loss on disposal of property, plant and equipment 82
Provision made for rectifcation costs 80
Share of results of associates (44) 173
Operating loss before working capital changes (4,712) (13,746)
Changes in working capital:
Development properties 595
Inventories 3,577
Trade and other payables (7,841) 486
Trade and other receivables 7,544 5,570
Cash used in operating operations (5,009) (3,518)
Payment of rectifcation costs (104) (113)
Cash fows used in operating activities (5,113) (3,631)
Net cash from/(used in) operating activities from discontinued operations 32 26,231 (9,140)
21,118 (12,771)
Investing activities
Dividend income received from an associate 37
Interest received 32 200
Proceed from disposal of development properties 5,061
Payment for purchase of property, plant and equipment (175) (1)
Proceed from disposal of property, plant and equipment 1 9
Repayment of loan from an afliated party 933 4,322
Loan to a third party (2,255)
Cash fows generated from investing activities 3,597 4,567
Cash fows generated from investing activities from discontinued operations 32 8,334 21,341
11,931 25,908
52
Annual Report 2013
CONSOLIDATED CASH FLOW STATEMENT (CONTD)
Note 2013 2012
$000 $000
Restated *
Cash fows from fnancing activities
Payment of fnance lease liabilities (5) (16)
Release of fxed deposit pledged to bank 611
Cash fows from/(used in) fnancing activities 606 (16)
Cash fows used in fnancing activities from discontinued operations 32 (27,581) (34,246)
(26,975) (34,262)
Net increase/(decrease) in cash and cash equivalents 6,074 (21,125)
Cash and cash equivalents at beginning of year 2,923 3,563
Efect of exchange rate changes on the balances held in foreign currencies 857 15,588
Cash and cash equivalents classifed as held for sale 18 (3,135) 4,897
Cash and cash equivalents at end of year 18 6,719 2,923
Signifcant non-cash transactions
In 2012:
- A bank received, on behalf of the Company, a dividend income of $2,311,000. The Company also elected to make a payment to
the bank so that the cap price of the collar instrument need not be adjusted for the Companys receipt of the dividend. Both these
transactions were settled on a net basis, with the Company receiving a net amount of $208,000 from the bank.
- The collared share fnancing agreement was terminated pursuant to the occurrence of hedging disruption. As a result of the termination,
the Group paid to the bank a net amount of $2,822,000 (US$2,316,000), together with 174,141,000 quoted equity shares with
market value at termination date of approximately $43,804,000 (US$35,949,000), the outstanding loan amount of $88,502,000
(US$72,632,000) had been fully settled.
The above signifcant non-cash transactions in 2012 relate to the cash fows from discountinued operations.
There were no signifcant non-cash transactions in 2013.
NOTES TO THE FINANCIAL STATEMENTS
These notes form an integral part of the fnancial statements.
The fnancial statements were authorised for issue by the directors on 31 March 2014.
1. DOMICILE AND ACTIVITIES
Sapphire Corporation Limited (the Company) is incorporated in the Republic of Singapore and has its registered ofce at 80, Robinson
Road, #02-00, Singapore 068898. Its principal place of business is at 3 Shenton Way, #25-01 Shenton House, Singapore 068805.
The principal activities of the Company are those relating to general contractor for building construction and upgrading works and
investments in resources and infrastructure-related companies. The principal activities of the subsidiaries are set out in note 7.
The consolidated fnancial statements relate to the Company and its subsidiaries (together referred to as the Group and individually
as Group entities) and the Groups interests in associates.
2. BASIS OF PREPARATION
2.1 Statement of compliance
The fnancial statements have been prepared in accordance with the Singapore Financial Reporting Standards (FRS).
2.2 Basis of measurement
The fnancial statements have been prepared on the historical cost basis except as otherwise described below.
Notwithstanding the Boards intention to dispose of the Steel Business (as set out in note 19), the fnancial statements have been
prepared on a going concern basis as the Board has a reasonable expectation that the Group has sufcient resources to continue in
existence for the foreseeable future and there are plans to invest in and expand into new businesses, as evident from the acquisition
of Mancala Holdings Pty Ltd (note 40).
2.3 Functional and presentation currency
These fnancial statements are presented in Singapore dollars, which is the Companys functional currency. All fnancial information
presented in Singapore dollars have been rounded to the nearest thousand, unless otherwise stated.
2.4 Use of estimates and judgements
The preparation of the fnancial statements in conformity with FRSs requires management to make judgements, estimates and
assumptions that afect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses.
Actual results may difer from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the
period in which the estimates are revised and in any future periods afected.
54
Annual Report 2013
2. BASIS OF PREPARATION (CONTD)
2.4 Use of estimates and judgements (contd)
Information about critical judgements in applying accounting policies that have the most signifcant efect on the amounts recognised
in the fnancial statements is as follows:
Classifcation and measurement of disposal group as held for sale

In assessing the classifcation of the Groups steel business as disposal group classifed as held for sale (note 19), management
applied judgement when considering the following factors:
- The directors have the intention and commitment to sell the steel business within the next 12 months;
- The disposal group is available for immediate sale in its present condition; and
- There is an active programme to locate a buyer and market the disposal group for sale at a price that is reasonable in
relation to its current fair value.
Any changes in the above factors will have an impact on the classifcation and measurement of the disposal group as held for
sale.
Information about assumptions and estimation uncertainties that have a signifcant risk of resulting in a material adjustment within the
next fnancial year are as follows:
Depreciation of property, plant and equipment
The Groups management determines the estimated residual values, useful lives and depreciation charges for the property,
plant and equipment with reference to the estimated periods that the Group intends to derive future economic benefts from
the use of these assets. This estimation is based on the historical experience of the actual useful lives of items of property,
plant and equipment of similar nature and functions. It could change signifcantly as a result of technical innovations and
actions of its competitors. The Group reviews annually the estimated useful lives of property, plant and equipment and their
residual values, if any. The depreciation charge for future periods is adjusted if there are signifcant changes from the previous
estimates.
Impairment of property, plant and equipment
The Group reviews the carrying amounts of its property, plant and equipment at the end of each reporting period to determine
whether there is any indication of impairment. If any such indications exist, the recoverable amount is estimated. The
recoverable amount is the greater of their net selling price and value in use. In assessing value in use, the estimated future
cash fows are discounted to their present value using a pre-tax discount rate that refects market assessments of the time
value of money and the risks specifc to the asset, which requires signifcant judgement between earnings and operating cost.
The Group uses all readily available information in determining an amount that is a reasonable approximation of recoverable
amount, including estimates based on reasonable and supportable assumptions and projections of revenue and amount of
operating costs.
Impairment on investment in associates and subsidiaries
The Group determines whether there is impairment on the investments in associates and subsidiaries where events or
changes in circumstances indicate that the carrying amounts of the investments may be impaired. If any such indications
exist, the recoverable amount is estimated. The level of allowance is evaluated by the Group on the basis of factors that
afect the recoverability of the investments. These factors include, but are not limited to, the activities and fnancial position
of the entities, and market factors. The Group estimates the future cash fows expected from the cash-generating units and
an appropriate discount rate in order to calculate the present value of the future cash fows. Management has evaluated the
recoverability of those investments based on such estimates.
2.4 Use of estimates and judgements (contd)
Impairment of available-for-sale investments
The Group follows the guidance of FRS 39 Financial Instruments: Recognition and Measurement in determining when an
investment or fnancial asset is other than temporarily impaired. This determination requires signifcant judgement. The Group
evaluates, among other factors, the duration and extent to which the fair value of an investment and fnancial asset is less than
its cost; and the fnancial health of and near-term business outlook for the investment or fnancial asset, including factors such
as industry and sector performance, changes in technology and operational and fnancing cash fow.
Allowance for impairment losses on doubtful receivables
The Group makes allowances for doubtful debts based on an assessment of the recoverability of trade receivables where
events or changes in circumstances indicate that the balances may not be collectible. The identifcation of doubtful debts
requires the use of judgement and estimates. Where the expectation is diferent from the original estimate, such diferences
will impact the carrying value of trade receivables and doubtful debts expenses in the period in which such estimate has been
changed.
Impairment on re-measurement of disposal group classifed as held for sale
In accordance with FRS 105 Non-current Assets Held for Sale and Discontinued Operations, the Groups steel business was
reclassifed as disposal group held for sale and thereafter measured at the lower of their carrying amount and fair value less
costs to sell. The Group has engaged an independent professional frm to assess the fair value less cost to sell of the Groups
steel business. The estimate of the fair value less cost has been assessed based on factors that afect the fair value of the
steel business. These factors include, but are not limited to, the activities and fnancial position of the steel business, and
market factors (note 19). Any change in these factors in future period, will impact the fair value estimate of the steel business,
or any diference between the actual sales consideration of the steel business and the indicative fair value less cost to sell in
the future, will impact the proft or loss.
2.5 Changes in accounting policies
Fair value measurement
FRS113 establishes a single framework for measuring fair value and making disclosures about fair value measurements, when such
measurements are required or permitted by other FRSs. In particular, it unifes the defnition of fair value as the price at which an
orderly transaction to sell an asset or to transfer a liability would take place between market participants at the measurement date.
It also replaces and expands the disclosure requirements about fair value measurements in other FRSs, including FRS 107 Financial
Instruments: Disclosures.
From 1 January 2013, in accordance with the transitional provisions of FRS 113, the Group has applied the new fair value measurement
guidance and the comparative information has been presented accordingly. Notwithstanding the above, the change had no signifcant
impact on the measurements of the Groups assets and liabilities. The additional disclosures necessary as a result of the adoption of
this standard has been included in note 35.
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Annual Report 2013
2.5 Changes in accounting policies (contd)
Presentation of items of other comprehensive income
From 1 January 2013, as a result of the amendments to FRS 1, the Group has modifed the presentation of items of other comprehensive
income in its consolidated statement of comprehensive income, to present separately items that would be reclassifed to proft or loss
in the future from those that would never be. Comparative information has also been re-presented accordingly.
The adoption of the amendment to FRS 1 has no impact on the recognised assets, liabilities and comprehensive income of the Group.
Except for the above, the adoption of the other new or amended FRSs and interpretations to FRS that are mandatory for application
on or after 1 January 2013 did not result in substantial changes to the Group and Companys accounting policies and had no material
efect on the amounts reported for the current or prior fnancial years.
3. SIGNIFICANT ACCOUNTING POLICIES
The accounting policies set out below have been applied consistently to all periods presented in these fnancial statements, and have
been applied consistently by Group entities, except as explained in note 2.5 which addresses changes in accounting policies.
3.1 Basis of consolidation
Business combinations
Business combinations are accounted for using the acquisition method in accordance with FRS 103 Business Combination as at
the acquisition date, which is the date on which control is transferred to the Group. Control is the power to govern the fnancial and
operating policies of an entity so as to obtain benefts from its activities. In assessing control, the Group takes into consideration
potential voting rights that are currently exercisable.
The Group measures goodwill at the acquisition date as:
the fair value of the consideration transferred; plus
the recognised amount of any non-controlling interests in the acquiree; plus
if the business combination is achieved in stages, the fair value of the pre-existing equity
interest in the acquiree, over the net recognised amount (generally fair value) of the identifable assets acquired and liabilities
assumed.
The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are
generally recognised in proft or loss.
Costs related to the acquisition, other than those associated with the issue of debt or equity securities, that the Group incurs in
connection with a business combination are expensed as incurred.
Any contingent consideration payable is recognised at fair value at the acquisition date. If the contingent consideration is classifed
as equity, it is not remeasured and settlement is accounted for within equity. Otherwise, subsequent changes to the fair value of the
contingent consideration are recognised in proft or loss.
For non-controlling interests that are present ownership interests and entitle their holders to a proportionate share of the acquirees net
assets in the event of liquidation, the Group elects on a transaction-by-transaction basis whether to measure them at fair value, or at
the non-controlling interests proportionate share of the recognised amounts of the acquirees identifable net assets, at the acquisition
date. All other non-controlling interests are measured at acquisition-date fair value or, when applicable, on the basis specifed in
another standard.
3. SIGNIFICANT ACCOUNTING POLICIES (CONTD)
3.1 Basis of consolidation (contd)
Subsidiaries
Subsidiaries are entities controlled by the Group. The fnancial statements of subsidiaries are included in the consolidated fnancial
statements from the date that control commences until the date that control ceases.
The accounting policies of subsidiaries have been changed when necessary to align them with the policies adopted by the Group.
Losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling interests even if doing so causes
the non-controlling interests to have a defcit balance.
Loss of control
Upon the loss of control, the Group derecognises the assets and liabilities of the subsidiary, any non-controlling interests and the other
components of equity related to the subsidiary. Any surplus or defcit arising on the loss of control is recognised in proft or loss. If
the Group retains any interest in the previous subsidiary, then such interest is measured at fair value at the date that control is lost.
Subsequently, it is accounted for as an equity-accounted investee or as an available-for-sale fnancial asset depending on the level of
infuence retained.
Investments in associates
Associates are those entities in which the Group has signifcant infuence, but not control, over the fnancial and operating policies.
Signifcant infuence is presumed to exist when the Group holds between 20% and 50% of the voting power of another entity.
Investment in associates are accounted for using the equity method and are recognised initially at cost. The consolidated fnancial
statements include the Groups share of the income and expenses and equity movements of investment in associates, after
adjustments to align the accounting policies with those of the Group, from the date that signifcant infuence commences until the date
that signifcant infuence ceases. When the Groups share of losses exceeds its interest in an equity-accounted investee, the carrying
amount of that interest, including any long-term investments, is reduced to zero, and the recognition of further losses is discontinued
except to the extent that the Group has an obligation or has made payments on behalf of the investee.
Acquisition of non-controlling interests
Acquisitions of non-controlling interests are accounted for as transactions with owners in their capacity as owners and therefore
the carrying amounts of assets and liabilities are not changed and goodwill is not recognised as a result of such transactions. The
adjustments to non-controlling interests are based on a proportionate amount of the net assets of the subsidiary. Any diference
between the adjustment to non-controlling interests and the fair value of consideration paid is recognised directly in equity and
presented as part of equity attributable to owners of the Company.
Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are eliminated
in preparing the consolidated fnancial statements. Unrealised gains arising from transactions with associates are eliminated against
the investment to the extent of the Groups interest in the investee. Unrealised losses are eliminated in the same way as unrealised
gains, but only to the extent that there is no evidence of impairment.
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Annual Report 2013
3.2 Accounting for subsidiaries and associates by the Company
Investments in subsidiaries and associates are stated in the Companys balance sheet at cost less accumulated impairment losses.
3.3 Afliated party
For the purpose of these fnancial statements, an afliated party means an entity over which a controlling shareholder of the Company
(as defned in the SGX-ST Listing Manual) during the year has signifcant infuence.
3.4 Foreign currency
Foreign currency transactions
Transactions in foreign currencies are translated to the respective functional currencies of Group entities at exchange rates at the
dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated
to the functional currency at the exchange rate at that date. The foreign currency gain or loss on monetary items is the diference
between amortised cost in the functional currency at the beginning of the period, adjusted for efective interest and payments during
the period, and the amortised cost in foreign currency translated at the exchange rate at the end of the reporting period.
Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional
currency at the exchange rate at the date that the fair value was determined.
Foreign currency diferences arising on retranslation are recognised in proft or loss, except for diferences arising on the retranslation
of available-for-sale equity instruments and qualifying cash fow hedges, which are recognised in other comprehensive income. Non-
monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date
of the transaction.
Foreign operations
The assets and liabilities of foreign operations, excluding goodwill and fair value adjustments arising on acquisition, are translated to
Singapore dollars at exchange rates at the reporting date. The income and expenses of foreign operations are translated to Singapore
dollars at exchange rates at the dates of the transactions. Goodwill and fair value adjustments arising on the acquisition of a foreign
operation on or after 1 January 2005 are treated as assets and liabilities of the foreign operation and translated at the exchange rate
at the end of the reporting period. For acquisitions prior to 1 January 2005, the exchange rates at the date of acquisition were used.
Foreign currency diferences are recognised in other comprehensive income and presented in the foreign currency translation reserve
(translation reserve) in equity. However, if the foreign operation is a non-wholly-owned subsidiary, then the relevant proportionate
share of the translation diference is allocated to the non-controlling interests. When a foreign operation is disposed of, in part or in
full, the relevant amount in the currency translation reserve is transferred to proft or loss as part of the gain or loss on disposal.
Exchange diferences arising from monetary items that in substance form part of a net investment in a foreign operation are recognised
in proft or loss. Such exchange diferences are recognised in other comprehensive income, and are presented within equity in the
currency translation reserve. When the foreign operation is disposed of, the cumulative amount in equity is transferred to proft or loss.
3.5 Financial instruments
Non-derivative fnancial assets
The Group initially recognises loans and receivables and deposits on the date that they are originated. All other fnancial assets are
recognised initially on the trade date at which the Group becomes a party to the contractual provisions of the instrument.
The Group derecognises a fnancial asset when the contractual rights to the cash fows from the asset expire, or it transfers the rights
to receive the contractual cash fows on the fnancial asset in a transaction in which substantially all the risks and rewards of ownership
of the fnancial asset are transferred. Any interest in transferred fnancial assets that is created or retained by the Group is recognised
as a separate asset or liability.
Financial assets and liabilities are ofset and the net amount presented in the balance sheet when, and only when, the Group has a
legal right to ofset the amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.

The Group has the following non-derivative fnancial assets: loans and receivables and available-for-sale fnancial assets.
Loans and receivables
Loans and receivables are fnancial assets with fxed or determinable payments that are not quoted in an active market. Such
assets are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, loans and
receivables are measured at amortised cost using the efective interest method, less any impairment losses.
Loans and receivables comprise loan receivables, trade and other receivables (excluding prepayment and club membership), deposit
with an afliated party and cash and cash equivalents.
Cash and cash equivalents comprise cash balances and bank deposits. For the purpose of the consolidated cash fow statement,
cash and cash equivalents comprise cash balances and fxed deposits with maturity of up to three months.
Available-for-sale fnancial assets
Available-for-sale fnancial assets are non-derivative fnancial assets that are designated as available-for-sale and that are not classifed
in the previous category. The Groups investments in equity securities are classifed as available-for-sale fnancial assets. Subsequent
to initial recognition, they are measured at fair value and changes therein, other than impairment losses, are recognised in other
comprehensive income and presented within equity in the fair value reserve. When an investment is derecognised, the cumulative
gain or loss in other comprehensive income is transferred to proft or loss.
Available-for-sale fnancial assets only comprise equity securities.
Non-derivative fnancial liabilities
All fnancial liabilities are recognised initially on the trade date at which the Group becomes a party to the contractual provisions of the
instrument. The Group derecognises a fnancial liability when its contractual obligations are discharged or cancelled or expired.
Financial assets and liabilities are ofset and the net amount presented in the balance sheet when, and only when, the Group has a
legal right to ofset the amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.
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Annual Report 2013
3.5 Financial instruments (contd)
Non-derivative fnancial liabilities (contd)
Financial liabilities are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition,
these fnancial liabilities are measured at amortised cost using the efective interest method. If the estimates of payments or receipts
are revised, the carrying amount of the fnancial liabilities will be adjusted to refect the revised estimated cash fows. The carrying
amount is re-measured at the present value of estimated future cash fows at the original efective interest rate. The adjustment is
recognised in proft or loss as income or expense.
The Group has the following non-derivative fnancial liabilities: fnancial liabilities, trade and other payables and long term payable due
to an afliated party.
Share capital
Ordinary shares
Ordinary shares are classifed as equity. Incremental costs directly attributable to the issue of ordinary shares and share options are
recognised as a deduction from equity, net of any tax efects.
3.6 Property, plant and equipment
Recognition and measurement
Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses.
Construction in progress represents plant and property under construction and machinery under installation and testing and is stated
cost less any impairment losses and is not depreciated. This includes costs of construction, plant and equipment and other direct
costs. Construction in progress is reclassifed to the appropriate category of fxed assets when the relevant assets are completed and
are capable of operating in the manner intended by management.
Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the
cost of materials and direct labour, any other costs directly attributable to bringing the assets to a working condition for their intended
use, the costs of dismantling and removing the items and restoring the site on which they are located and capitalised borrowing costs.
Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment.
When parts of an item of property, plant and equipment have diferent useful lives, they are accounted for as separate items (major
components) of property, plant and equipment.
Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal
with the carrying amount of property, plant and equipment, and are recognised net within other income/other operating expenses in
proft or loss.
3.6 Property, plant and equipment (contd)
Subsequent costs
The cost of replacing a part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable
that the future economic benefts embodied within the part will fow to the Group, and its cost can be measured reliably. The carrying
amount of the replaced part is derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised
in proft or loss as incurred.
Depreciation
Depreciation is calculated over the depreciable amount, which is the cost of an asset, or other amount substituted for cost, less its
residual value.
Depreciation is recognised in proft or loss on a straight-line basis over the estimated useful lives of each part of an item of property,
plant and equipment, since this most closely refects the expected pattern of consumption of the future economic benefts embodied
in the asset. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that
the Group will obtain ownership by the end of the lease term.
Depreciation is recognised from the date that the property, plant and equipment are installed and are ready for use, or in respect of
internally constructed assets, from the date that the asset is completed and ready for use.
The estimated useful lives are as follows:
Buildings - 20 to 45 years
Plant and machinery - 5 to 20 years
Furniture, fttings and ofce equipment - 5 to 10 years
Motor vehicles - 5 to 10 years
Renovation - 5 years
Depreciation methods, useful lives and residual values are reviewed at the end of each reporting period and adjusted if appropriate.
3.7 Intangible assets
Intangible assets that are acquired by the Group and have fnite useful lives are measured at cost less accumulated amortisation and
accumulated impairment losses.
Intangibles arising on the acquisition of associates are presented together with investment in associates.
Amortisation
Amortisation is calculated over the cost of the asset, less its residual value.
Amortisation is recognised in proft or loss on a straight-line basis over the estimated useful lives of intangible assets, other than
goodwill, from the date that they are available for use, since this most closely refects the expected pattern of consumption of the
future economic benefts embodied in the asset.
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Annual Report 2013
3.7 Intangible assets (contd)
Amortisation (contd)
The estimated useful lives are as follows:
Customer relationships - 5 years
Trademarks - 5 years
Amortisation methods, useful lives and residual values are reviewed at the end of each reporting period and adjusted if appropriate.
3.8 Leased assets
Leases in which the Group assumes substantially all the risks and rewards of ownership are classifed as fnance leases. Upon initial
recognition, the leased asset is measured at an amount equal to the lower of its fair value and the present value of the minimum lease
payments. Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy applicable to that
asset.
Other leases are operating leases where the leased assets are not recognised in the Groups balance sheet.
3.9 Inventories
Inventories are measured at the lower of cost and net realisable value. The cost of inventories is based on the frst-in frst-out principle
for mineral ores and weighted average cost formula for inventories related to steel-making operations and wines, and it includes
expenditure incurred in acquiring the inventories, production or conversion costs and other costs incurred in bringing them to their
existing location and condition. In the case of manufactured inventories and work in progress, cost includes an appropriate share of
production overheads based on normal operating capacity.
Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling
expenses.
3.10 Development properties
Development properties are those properties which are held with the intention of development and sale in the ordinary course of
business. They are stated at the lower of cost plus, where appropriate, a portion of attributable proft, and estimated net realisable
value, net of progress billings. Net realisable value represents the estimated selling price less costs to be incurred in selling the
property.
The cost of properties under development comprise specifcally identifed costs, including acquisition costs, development expenditure,
borrowing costs and other related expenditure. Borrowing costs payable on loans funding a development property, if any, are also
capitalised, on a specifc identifcation basis, as part of the cost of the development property until the completion of development.
3.11 Non-current assets and liabilities held for sale
Non-current assets and liabilities or disposal groups comprising assets and liabilities, that are highly probable to be recovered primarily
through sale rather than through continuing use, are classifed as held for sale. Immediately before classifcation as held for sale, the
assets, or components of a disposal group, are re-measured in accordance with the Groups accounting policies. Thereafter, the
assets and liabilities, or disposal group, are generally measured at the lower of their carrying amount and fair value less costs to sell.
Any impairment loss on a disposal group is frst allocated to goodwill, and then to remaining appropriate assets and liabilities on pro
rata basis, except that no loss is allocated to inventories, fnancial assets and deferred tax assets, which continue to be measured in
accordance with the Groups accounting policies. Impairment losses on initial classifcation as held for sale and subsequent gains or
losses on re-measurement are recognised in proft or loss. Gains are not recognised in excess of any cumulative impairment loss.
Intangible assets and property, plant and equipment once classifed as held for sale are not amortised or depreciated.
3.12 Impairment
Non-derivative fnancial assets
A fnancial asset not carried at fair value through proft or loss is assessed at each reporting date to determine whether there is
objective evidence that it is impaired. A fnancial asset is impaired if objective evidence indicates that a loss event has occurred after
the initial recognition of the asset, and that the loss event had a negative efect on the estimated future cash fows of that asset that
can be estimated reliably.
Objective evidence that fnancial assets (including equity securities) are impaired can include default or delinquency by a debtor,
restructuring of an amount due to the Group on terms that the Group would not consider otherwise, indications that a debtor or
issuer will enter bankruptcy, the disappearance of an active market for a security. In addition, for an investment in an equity security,
a signifcant or prolonged decline in its fair value below its cost is objective evidence of impairment.
Loans and receivables
The Group considers evidence of impairment for loans and receivables at both a specifc asset and collective level. All individually
signifcant loans and receivables are assessed for specifc impairment. All individually signifcant loans and receivables found not to
be specifcally impaired are then collectively assessed for any impairment that has been incurred but not yet identifed. Loans and
receivables that are not individually signifcant are collectively assessed for impairment by grouping together loan and receivables with
similar risk characteristics.
In assessing collective impairment, the Group uses historical trends of the probability of default, timing of recoveries and the amount
of loss incurred, adjusted for managements judgement as to whether current economic and credit conditions are such that the actual
losses are likely to be greater or less than suggested by historical trends.

An impairment loss in respect of a fnancial asset measured at amortised cost is calculated as the diference between its carrying
amount and the present value of the estimated future cash fows discounted at the assets original efective interest rate. Losses are
recognised in proft or loss and refected in an allowance account against receivables. When a subsequent event causes the amount
of impairment loss to decrease, the decrease in impairment loss is reversed through proft or loss.
Available-for-sale fnancial assets
Impairment losses on available-for-sale fnancial assets are recognised by reclassifying the losses accumulated in the fair value reserve
in equity to proft or loss. The cumulative loss that is reclassifed from equity to proft or loss is the diference between the acquisition
cost, net of any principal repayment and amortisation, and the current fair value, less any impairment loss recognised previously in
proft or loss. Changes in cumulative impairment provisions attributable to application of the efective interest method are refected as
a component of interest income. If, in a subsequent period, the fair value of an impaired available-for-sale debt security increases and
the increase can be related objectively to an event occurring after the impairment loss was recognised, then the impairment loss is
reversed. The amount of the reversal is recognised in proft or loss. However, any subsequent recovery in the fair value of an impaired
available-for-sale equity security is recognised in other comprehensive income.
Non-fnancial assets
The carrying amounts of the Groups non-fnancial assets, other than inventories and development properties, are reviewed at each
reporting date to determine whether there is any indication of impairment. If any such indication exists, then the assets recoverable
amount is estimated. For goodwill, the recoverable amount is estimated each year at the same time.
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Annual Report 2013
3.12 Impairment (contd)
Non-fnancial assets (contd)
The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In
assessing value in use, the estimated future cash fows are discounted to their present value using an after-tax discount rate that
refects current market assessments of the time value of money and the risks specifc to the asset. For the purpose of impairment
testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generates cash infows
from continuing use that are largely independent of the cash infows of other assets or groups of assets (the cash-generating unit, or
CGU).
Subject to an operating segment ceiling test, for the purposes of goodwill impairment testing, CGUs to which goodwill has been
allocated are aggregated so that the level at which impairment is tested refects the lowest level at which goodwill is monitored for
internal reporting purposes. Goodwill acquired in a business combination is allocated to groups of CGUs that are expected to beneft
from the synergies of the combination.
The Groups corporate assets do not generate separate cash infows and are utilised by more than one CGU. Corporate assets are
allocated to CGUs on a reasonable and consistent basis and tested for impairment as part of the testing of the CGU to which the
corporate assets is allocated.
An impairment loss is recognised if the carrying amount of an asset or its CGU exceeds its estimated recoverable amount. Impairment
losses are recognised in proft or loss. Impairment losses recognised in respect of CGUs are allocated frst to reduce the carrying
amount of any goodwill allocated to the units, and then to reduce the carrying amounts of the other assets in the unit (group of units)
on a pro rata basis.
An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior periods are
assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed
if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the
extent that the assets carrying amount does not exceed the carrying amount that would have been determined, net of depreciation
or amortisation, if no impairment loss had been recognised.
Goodwill that forms part of the carrying amount of an investment in an associate is not recognised separately, and therefore is not
tested for impairment separately. Instead, the entire amount of the investment in an associate is tested for impairment as a single
asset when there is objective evidence that the investment in an associate may be impaired.
3.13 Employee benefts
Defned contribution plans
A defned contribution plan is a post-employment beneft plan under which an entity pays fxed contributions into a separate entity and
will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defned contribution pension plans
are recognised as an employee beneft expense in proft or loss in the periods during which services are rendered by employees.
Short-term employee benefts
Short-term employee beneft obligations are measured on an undiscounted basis and are expensed as the related service is provided.
A liability is recognised for the amount expected to be paid under short-term cash bonus or proft-sharing plans if the Group has a
present legal or constructive obligation to pay this amount as a result of past service provided by the employee, and the obligation
can be estimated reliably.
3.13 Employee benefts (contd)
Share-based payment transactions
Under the Sapphire Shares Award Scheme (Award Shares), participants will receive fully paid ordinary shares of the Company for no
consideration, provided that certain pre-determined corporate performance targets are met within a prescribed performance period.
The Award Shares are accounted for as equity-settled share-based payments. Equity-settled share-based payments are measured
at fair value at the date of the grant. The Award Shares expense is recognised in proft or loss with a corresponding adjustment to
equity.
3.14 Provision for rectifcation costs
A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated
reliably, and it is probable that an outfow of economic benefts will be required to settle the obligation. Provisions are determined by
discounting the expected future cash fows at a pre-tax rate that refects current market assessments of the time value of money and
the risks specifc to the liability. The unwinding of the discount is recognised as fnance cost.
Upon completion of a contract, unutilised provision for future rectifcation costs is transferred to a provision for rectifcation costs. Any
surplus or provision will be written back at the end of the warranty period while additional provision, where necessary, is made when
foreseeable. The provision is made based on estimated costs to carry out the rectifcation works.
3.15 Revenue
Sales of goods
Revenue from the sale of goods in the course of ordinary activities is measured at the fair value of the consideration received or
receivable, net of returns, trade discounts and volume rebates. Revenue is recognised when persuasive evidence exists, usually in the
form of an executed sales agreement, that the signifcant risks and rewards of ownership have been transferred to the buyer, recovery
of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, there is no continuing
management involvement with the goods, and the amount of revenue can be measured reliably. If it is probable that discounts will
be granted and the amount can be measured reliably, then the discount is recognised as a reduction of revenue as the sales are
recognised.
The timing of the transfers of risks and rewards varies depending on the individual terms of the contract of sale. For sales of
manufactured steel and vanadium products, transfer usually occurs when the product is received at the customers warehouse. For
trading of minerals, transfer depends on the shipping terms between the customers. Transfer usually occurs upon loading the goods
onto the port designated by the customers. For sales of wine, transfer occurs upon delivery to the customer.
Processing fees for rebars and hot-rolled coil
Revenue from processing of rebars and hot-rolled coil supplied by customers is recognised in proft or loss when the customer has
accepted the processed rebars and hot-rolled coil. Revenue excludes value added tax or other sales taxes and is after deduction of
any trade discounts.
66
Annual Report 2013
3.15 Revenue (contd)
Commission from trading of steel products
When the Group does not have the signifcant risks and rewards of ownership of goods for the trading of steel products, revenue
is recognised net based on the amount billed to the customer less the amount paid to the supplier and presented as commission
income.
Revenue from building maintenance and services
Revenue from building maintenance and services is recognised in proft and loss in the period in which the services are provided by
the Group.
Dividends
Dividend income is recognised in proft or loss when the shareholders right to receive payment is established which in the case of
quoted securities is the ex-dividend date.
Interest income
Interest income is recognised as it accrues, using the efective interest method.
Rental income
Rental income from operating leases of property, plant and equipment is recognised in other income on a straight-line basis over the
term of the lease.
3.16 Finance costs
Finance costs comprise interest expense on borrowings and amortisation of fee in relation to loans. All borrowing costs are recognised
in proft or loss using the efective interest method, except to the extent that they are capitalised as being directly attributable to the
acquisition, construction or production of an asset which necessarily takes a substantial period of time to be prepared for its intended
use or sale.
3.17 Lease payments and prepaid leases
Payments made under operating leases are recognised in proft or loss on a straight-line basis over the term of the lease. Lease
incentives received are recognised as an integral part of the total lease expense, over the term of the lease.
Minimum lease payments made under fnance leases are apportioned between the fnance expense and the reduction of the
outstanding liability. The fnance expense is allocated to each period during the lease term so as to produce a constant periodic rate
of interest on the remaining balance of the liability.
Contingent lease payments are accounted for by revising the minimum lease payments over the remaining term of the lease when the
lease adjustment is confrmed.
Prepaid leases are land use rights in the Peoples Republic of China (PRC) which are stated at cost less accumulated amortisation
and impairment losses. Amortisation is recognised in proft or loss on a straight-line basis over the period of the land use rights.
3.18 Income tax
Income tax expense comprises current and deferred tax. Current tax and deferred tax are recognised in the income statement except
to the extent that it relates to a business combination, or items recognised directly in equity or in other comprehensive income.
Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively
enacted at the reporting date, and any adjustment to tax payable in respect of previous years.
Deferred tax is recognised in respect of temporary diferences between the carrying amounts of assets and liabilities for fnancial
reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following temporary diferences:
the initial recognition of assets or liabilities in a transaction that is not a business combination and that afects neither accounting nor
taxable proft or loss, and diferences relating to investments in subsidiaries to the extent that it is probable that they will not reverse
in the foreseeable future. In addition, deferred tax is not recognised for taxable temporary diferences arising on the initial recognition
of goodwill.
Deferred tax is measured at the tax rates that are expected to be applied to temporary diferences when they reverse, based on the
laws that have been enacted or substantively enacted by the reporting date.
Deferred tax assets and liabilities are ofset if there is a legally enforceable right to ofset current tax liabilities and assets, and they
relate to income taxes levied by the same tax authority on the same taxable entity, or on diferent tax entities, but they intend to settle
current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.
A deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary diferences, to the extent that it is
probable that future taxable profts will be available against which they can be utilised. Deferred tax assets are reviewed at each
reporting date and are reduced to the extent that it is no longer probable that the related tax beneft will be realised.
In determining the amount of current and deferred tax, the Group takes into account the impact of uncertain tax positions and
whether additional taxes and interest may be due. The Group believes that its accruals for tax liabilities are adequate for all open tax
years based on its assessment of many factors, including interpretations of tax law and prior experience. This assessment relies on
estimates and assumptions and may involve a series of judgements about future events. New information may become available that
causes the Group to change its judgement regarding the adequacy of existing tax liabilities; such changes to tax liabilities will impact
tax expense in the period that such a determination is made.
3.19 Discontinued operations
A discontinued operation is a component of the Groups business, the operations and cash fows of which can be clearly distinguish
from the rest of the Group and which:
Represents a separate major line of business or geographical area of operations;
Is part of a single co-ordinated plan to dispose of a separate major line of business or geographical area of operations; or
Is a subsidiary acquired exclusively with a view to resale.
Classifcation as a discontinued operation occurs upon disposal or when the operation meets the criteria to be classifed as held for
sale, if earlier. When an operation is classifed as a discontinued operation, the comparative statement of proft or loss is re-presented
as if the operation had been discontinued from the start of the comparative year.
68
Annual Report 2013
3.20 Earnings per share
The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the
proft or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding
during the period, adjusted for own shares held. Diluted EPS is determined by adjusting the proft or loss attributable to ordinary
shareholders and the weighted average number of ordinary shares outstanding, adjusted for own shares held and for the efects of all
dilutive potential ordinary shares.
3.21 Segment reporting
An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur
expenses, including revenues and expenses that relate to transactions with any of the Groups other components. All operating
segments operating results are reviewed regularly by the Groups CEO to make decisions about resources to be allocated to the
segment and assess its performance, and for which discrete fnancial information is available.
Segment results that are reported to the CEO include items directly attributable to a segment as well as those that can be allocated
on a reasonable basis. Unallocated items comprise mainly corporate assets (primarily the Companys headquarters), head ofce
expenses, and tax assets and liabilities.
Segment capital expenditure is the total cost incurred during the year to acquire property, plant and equipment and intangible assets.
3.22 Financial guarantee contracts
Financial guarantee contracts are accounted for as insurance contracts and treated as contingent liabilities until such time they
become probable that the Group will be required to make a payment under the guarantee. A provision is recognised based on the
Groups estimate of the ultimate cost of settling all claims incurred but unpaid at the reporting date. The provision is assessed by
reviewing individual claims and tested for adequacy by comparing the amount recognised and the amount that would be required to
settle the guarantee contract.
3.23 New standards and interpretations not adopted
A number of new standards, amendments to standards and interpretations are efective for annual periods beginning after 1 January
2013, and have not been applied in preparing these fnancial statements. None of these are expected to have a signifcant efect on
the fnancial statements of the Group and the Company.
4. PROPERTY, PLANT AND EQUIPMENT
Note Buildings
Plant and
machinery
Furniture,
fttings
and ofce
equipment
Motor
vehicles Renovation
Construction
in progress Total
$000 $000 $000 $000 $000 $000 $000
Group
Cost
At 1 January 2012 24,400 81,057 224 238 168 106,087
Acquisition of a subsidiary 35,816 44,888 16 88 1,554 82,362
Additions 30,734 173 32 887 31,826
Disposals (29) (17) (154) (200)
Translation diferences on
consolidation (1,229) (4,078) (3) (2) (5,312)
At 31 December 2012 58,987 152,572 393 356 14 2,441 214,763
Additions 54 587 20 168 424 1,253
Disposals/write-of (65) (82) (147)
Transfer 612 2,309 (2,921)
consolidation 3,854 9,917 16 10 56 13,853
Reclassifed to assets held
for sale 19 (63,507) (165,385) (265) (163) (229,320)
At 31 December 2013 99 121 182 402

Accumulated
depreciation
At 1 January 2012 2,885 23,556 171 182 51 26,845
Depreciation for the year 1,081 8,824 28 32 32 9,997
Disposals (20) (14) (75) (109)
consolidation (154) (1,261) (2) * (1,417)
At 31 December 2012 3,812 31,099 183 214 8 35,316
Depreciation for the year 2,185 15,496 62 42 37 17,822
Impairment loss 59,844 59,844
Disposals/write-of (62) (81) (143)
consolidation 299 3,837 4 2 4,142
Reclassifed to assets held
for sale 19 (6,296) (110,276) (95) (56) (116,723)
At 31 December 2013 92 121 45 258
Carrying amounts
At 1 January 2012 21,515 57,501 53 56 117 79,242
At 31 December 2012 55,175 121,473 210 142 6 2,441 179,447
At 31 December 2013 7 137 144
* Less than $1,000
70
Annual Report 2013
4. PROPERTY, PLANT AND EQUIPMENT (CONTD)
Furniture,
fttings
and ofce
equipment
Motor
vehicles Renovation Total
$000 $000 $000 $000
Company
Cost
At 1 January 2012 109 203 86 398
Additions 1 1
Disposals (16) (72) (88)
At 31 December 2012 94 203 14 311
Additions 7 168 175
Disposals (2) (82) (84)
At 31 December 2013 99 121 182 402
Accumulated depreciation
At 1 January 2012 84 177 34 295
Depreciation for the year 12 25 17 54
Disposals (14) (42) (56)
At 31 December 2012 82 202 9 293
Depreciation for the year 12 36 48
Disposals (2) (81) (83)
At 31 December 2013 92 121 45 258
Carrying amounts
At 1 January 2012 25 26 52 103
At 31 December 2012 12 1 5 18
At 31 December 2013 7 137 144
As at 31 December 2012, the Group had mortgages over its buildings and plant and machinery with net book value of $28,303,000
and $45,729,000 respectively to secure loans borrowed by afliated parties (note 22).
4. PROPERTY, PLANT AND EQUIPMENT (CONTD)
Impairment loss
Since January 2013, steel price continued to decrease, with increasing production costs and weak outlook of the steel industry.
During the year, management streamlined the steel operations by reducing budgets, rationalizing assets and reallocating resources,
and decided to shut down the entire operations of the hot-rolled coil production line which was operating in less than optimal
utilisation rate and scale down the production capacity of rebars and vanadium pentoxide fakes.
The Group assessed the recoverable amounts of the cash-generating units (CGUs) within its two subsidiaries, Neijiang Chuanwei
Special Steel Co., Ltd (Special Steel) and Sichuan Longwei Metal Product Co., Ltd. (Longwei), as follows:
Special Steel:
Hot-rolled coils (HRC) and Rebar CGU
Vanadium Pentoxide (V2O5) CGU
Longwei:
Cold-rolled coils (CRC) CGU
The recoverable amounts of the respective CGUs were determined based on value-in-use calculations using cash fow projections
with the following key assumptions:
Special Steel Longwei
HRC
and Rebar V2O5 CRC
Period of cash fow projections 5 years 8 years 5 years
After-tax discount rate 11.2% 11%
12.6% for frst 5 years
11% for terminal value
Terminal growth rate No terminal value No terminal value 2%
The cash fow projections are based on fnancial forecasts prepared by the management. The discount rates applied to the cash fow
projections were estimated by using an appropriate required rate of return on invested capitals. The valuations of the CGUs were
performed by an external independent professional valuer, having appropriate recognised professional qualifcations and experience.
As the recoverable amount of the Special Steels CGUs are determined to be lower than its carrying amount, an impairment loss is
recognised and allocated frst to reduce the carrying amount of the intangibles and then to the property, plant and equipment of the
Special Steel CGUs by $1,105,000 and $59,844,000, respectively, in accordance with the accounting policy set out in note 3.12. No
impairment loss is recognised for the Longweis CGU as its recoverable amount is determined to be higher than its carrying amount.
The property, plant and equipment was subsequently reclassifed as assets held for sale and included in the Steel Business, which
was re-measured to the lower of its carrying amount and its fair value less costs to sell (note 19).
72
Annual Report 2013
5. INTANGIBLE ASSETS
Customer
relationships Trademarks Total
$000 $000 $000
Group
Cost
At 1 January 2012 2,531 5,437 7,968
Translation diferences on consolidation (127) (274) (401)
At 31 December 2012 2,404 5,163 7,567
Translation diferences on consolidation 156 334 490
Reclassifed to assets held for sale (2,560) (5,497) (8,057)
At 31 December 2013
Accumulated amortisation
At 1 January 2012 1,426 2,906 4,332
Amortisation for the year 529 1,077 1,606
Translation diferences on consolidation (75) (156) (231)
At 31 December 2012 1,880 3,827 5,707
Amortisation for the year 273 555 828
Impairment loss 273 832 1,105
Translation diferences on consolidation 134 283 417
Reclassifed to assets held for sale (2,560) (5,497) (8,057)
At 31 December 2013
Carrying amounts
At 1 January 2012 1,105 2,531 3,636
At 31 December 2012 524 1,336 1,860
At 31 December 2013
The amortisation of customer relationships and trademarks is included in other operating expenses.
The details of the impairment are set out in note 4.
6. PREPAID LEASES
$000
Group
Cost
At 1 January 2012 7,903
Acquisition of subsidiary 38,667
Translation diferences on consolidation (397)
At 31 December 2012 46,173
Additions 414
Translation diferences on consolidation 2,983
Reclassifed to assets held for sale (note 19) (49,570)
At 31 December 2013
Accumulated amortisation
At 1 January 2012 679
Amortisation for the year 252
Translation diferences on consolidation (36)
At 31 December 2012 895
Amortisation for the year 1,202
Translation diferences on consolidation 86
Reclassifed to assets held for sale (note 19) (2,183)
At 31 December 2013
Carrying amounts
At 1 January 2012 7,224
At 31 December 2012 45,278
At 31 December 2013
The amortisation of prepaid leases is included in other operating expenses.
As at 31 December 2012, the Group had mortgages over its prepaid leases with net book value of $$38,667,000 to secure loans
borrowed by afliated parties (note 22).
The prepaid leaves were subsequently reclassifed as assets held for sale and included in the Steel Business, which was re-measured
to the lower of its carrying amount and its fair value less cost to sell (note 19).
74
Annual Report 2013
7. INTERESTS IN SUBSIDIARIES
Company
2013 2012
$000 $000
Unquoted equity shares at cost
At 1 January 112,655 112,655
Reclassifed as assets held for sale (note 19) (70,798)
At 31 December 41,857 112,655
Less: Impairment losses
At 1 January 36,594 35,331
Impairment during the year 5,263 1,263
Impairment on re-measurement of subsidiary classifed as assets held for sale 29,711
Reclassifed as assets held for sale (note 19) (29,711)
At 31 December 41,857 36,594
Net 76,061
In view of the recurring losses of certain subsidiaries, the Company has reassessed the recoverable amount of the Companys
investments in these subsidiaries. The recoverable value was determined based on the subsidiaries estimated fair value. The
subsidiary that was subsequently reclassifed as assets held for sale was included in the Steel Business, which was re-measured to
the lower of its carrying amount and its fair value less costs to sell (note 19).
Details of the subsidiaries are as follows:
Name of subsidiaries Principal activities
Country of
incorporation
Efective equity
interest held by the
Group
2013 2012
% %
Sapphire Construction & Development
Pte. Ltd.
(1)
and its subsidiary:
Construction and development of properties Singapore 100 100

- Tudor Jaya Sdn. Bhd.
(2)
Property development Malaysia 100 100
Sapphire Mineral Resources Pte. Ltd.
(SMRPL)
(1)
and its subsidiaries:
Trading in minerals Singapore 100 100
- TIL Mineral Resources Pte.
Ltd.
(3)
Dormant Singapore 100
- Sapphire Nickel Resources
Pte. Ltd.
(3)
Dormant Singapore 100
7. INTERESTS IN SUBSIDIARIES (CONTD)
Subsidiaries classifed as assets held for sale
Name of subsidiaries Principal activities
Country of
incorporation
Efective equity
interest held
by the Group
2013 2012
% %
Lucky Art Holdings Limited
(Lucky Art)
(2)
Investment holding Hong Kong 100 100

- Neijiang Chuanwei Special
Steel Co., Ltd (Special
Steel)
(2)
Manufacturing and sale of steel and
vanadium pentoxide products
Peoples Republic
of China
100 100
- Chengdu Sapphire Cellar
I/E Co., Ltd ( Cellar)
(4)
Sales of wine Peoples Republic
of China
100 100
- Chengdu Lucky Fortune
Trading Co., Ltd. (Lucky
Fortune)
(4)
Trading of steel products Peoples Republic
of China
100 100
- Sichuan Longwei Metal
Products Co., Ltd.
(Longwei)
(2)
Manufacturing and sale of cold-rolled steel
coil
Peoples Republic
of China
100 100
Sapphire Mineral Resources #
(HK) Limited (SMRHK)
(2)

and its subsidiary
Investment holding Hong Kong 100 100
- Chance Lead Enterprises
Ltd
(3)
Dormant British Virgin
Islands
100
# Wholly-owned subsidiary of SMRPL
(1)
Audited by KPMG LLP.
(2)
Audited by other member frm of KPMG International.
(3)
The entities have been struck of in 2013.
(4)
The entities are insignifcant to the Group and are audited by other auditors.
76
Annual Report 2013
8. INTERESTS IN ASSOCIATES
Details of the associates are as follows:
Name of associates Principal activities
Country of
incorporation
Efective equity
interest held
by the Group
2013 2012
% %
Industrial Contracts Marketing (2001)
Pte Ltd
(1)
Provision of painting and renovation services Singapore 36.67 36.67
Hainan I.R.E. Letian Construction &
Decoration Engineering Co., Ltd
(1)
Provision of building renovation services Peoples Republic
of China
49 49
(1)
The entities are insignifcant to the Group and are audited by other auditors.
The fnancial information of the associates which is not adjusted for the percentage of ownership held by the Group is as follows:
Group
2013 2012
$000 $000
Assets and liabilities
Total assets 7,785 7,286
Total liabilities (5,317) (4,797)
Results
Revenue 16,083 474,784 *
Proft/(Loss) after income tax 63 (39,522) *
* The results in 2012 include the results of an associate till the date on which it was reclassifed as available-for-sale equity
securities during that year.
There were no contingent liabilities as at 31 December 2013 and 31 December 2012.
9. OTHER INVESTMENTS
Group and Company
2013 2012
$000 $000
Available-for-sale equity securities
Quoted equity shares 1 4,846
Unquoted equity shares 36,000
1 40,846
The movement and fair value information (provided by an external independent professional valuer, having appropriate recognised
professional qualifcations and experience) on the unquoted equity shares are disclosed in note 35. An impairment loss based on the
decrease in fair value of available-for-sale equity securities which amount to $26,400,000 (2012: $9,641,000) was recognised in other
operating expenses. The unquoted equity shares was reclassifed as assets held for sale in 2013 (note 19).
10. SHORT-TERM LOAN RECEIVABLES
Group Company
2013 2012 2013 2012
$000 $000 $000 $000
Short term loan receivables (secured) from:
- Afliated party
(1)
933 933
- Third party
(2)
2,255 2,255
2,255 933 2,255 933
(1)
The loan to an afliated party was fully repaid in January 2013.
(2)
The loan to a third party was in connection with the acquisition of a subsidiary after the year end (note 40). The loan bears
interest at 4% per annum, is repayable within one year and is secured by the shares to be acquired.
At the reporting date, the maximum exposure to credit risk for loan receivables for the Group and Company (by geographical area) is:
Group Company
2013 2012 2013 2012
$000 $000 $000 $000
Australia 2,255 2,255
China and Hong Kong 933 933
78
Annual Report 2013
11. INVENTORIES
Group
2013 2012
$000 $000
Steel and vanadium products
- Raw materials 8,821
- Finished goods 2,508
- Spare parts 12,145
Wines 248
23,722
Inventories recognised in cost of sales 58,760 50,073
In 2013, the write-down of inventories to net realisable value amounted to $4,802,000 (2012: $63,000) as a result of cessation of a
production line and is included in cost of sales.
As at 31 December 2013, the inventories were reclassifed to assets held for sale (note 19). They comprise raw materials of
$15,464,000, work-in-progress of $1,621,000, fnished goods of $5,037,000 and spare parts of $3,261,000 for the steel and
vanadium products and wines of $586,000.
12. DEVELOPMENT PROPERTIES
Group
2013 2012
$000 $000
Leasehold land 5,555
The sale of the development properties of the Group in Melaka Bandaraya Bersejarah in Malaysia, was completed with no gain or loss
in 2013.

In 2012, the Group had recognised a cumulative net realisable value adjustment of $6,934,000 on these properties. The write-down
of development properties to net realisable value, being sales consideration less costs to sell, amounted to $595,000 and is included
in other expenses in 2012.
13. DEPOSIT WITH AN AFFILIATED PARTY
This relates to deposit placed with an afliated party by a subsidiary to secure purchases of raw materials at favourable prices in China.
The deposit is refundable upon demand and is secured with a charge over the inventory of the afliated party. The carrying value of
the collateral is approximately $153,462,000 (2012: $104,940,000) at the reporting date.

As at 31 December 2013, the deposit with an afliated party was reclassifed to assets held for sale (note 19).
14. TRADE AND OTHER RECEIVABLES
Group Company
Note 2013 2012 2013 2012
$000 $000 $000 $000
Trade receivables 15 20 25,565 19 16
Amounts due from subsidiaries 16 15,339 51,567
Other receivables 17 48 23,835 21 112
68 49,400 15,379 51,695
Deposits 63 91 63 83
Loans and receivables 131 49,491 15,442 51,778
Prepayments 35 4,801 34 151
Prepayment for trading of steel products 32,586
Club memberships, at cost 134 134 134 134
300 87,012 15,610 52,063
In 2012, prepayment for trading of steel products includes an amount of $15,840,000 relating to the prepayment with an afliated
party.
As at 31 December 2013, trade and other receivables of $70,850,000 were reclassifed to assets held for sale (note 19). Included in
the trade and other receivable classifed as held for sale are trade receivable from afliated parties of $148,000, other receivables from
afliated parties of $4,246,000 and prepayment for trading of steel products with an afliated party of $2,863,000.
The maximum exposure to credit risk for loans and receivables at the reporting date for the Group and Company (by geographical
area) is:
Group Company
2013 2012 2013 2012
$000 $000 $000 $000
Singapore 110 112 15,421 177
China and Hong Kong 49,219 51,601
British Virgin Islands 160
Australia 21 21
131 49,491 15,442 51,778
As at 31 December 2013, the loans and receivables included in the assets held for sale relates mainly to China.
80
Annual Report 2013
14. TRADE AND OTHER RECEIVABLES (CONTD)
Impairment losses
Gross
Impairment
losses Net Gross
Impairment
losses Net
2013 2013 2013 2012 2012 2012
$000 $000 $000 $000 $000 $000
Group
Not past due 104 104 49,259 49,259
Past due 0 30 days 5 5
Past due 31 120 days 27 27 15 15
Past due 121 365 days 198 (193) 5
More than one year 9,613 (9,613) 10,752 (10,545) 207
9,744 (9,613) 131 60,229 (10,738) 49,491
Company
Not past due 52,956 (37,514) 15,442 51,706 51,706
More than one year 144 (144) 5,387 (5,340) 47
53,100 (37,658) 15,442 57,118 (5,340) 51,778
The movement in allowance for impairment in respect of trade and other receivables during the year is as follows:
Group Company
2013 2012 2013 2012
$000 $000 $000 $000
At 1 January 10,738 5,773 5,340 5,492
Impairment losses recognised 237 5,214 37,590 98
Impairment losses written back (121) (5,242)
Impairment losses utilised (1,241) (250) (30) (250)
Translation diferences 1
At 31 December 9,613 10,738 37,658 5,340
As at 31 December 2013, the trade and other receivables included in the assets held for sale are mainly not past due, with no
impairment made.
The Group monitors its recoverables periodically for collectability. The Group evaluates whether there is any objective evidence that
the trade and other receivables are impaired and determines the amount of impairment loss as a result of the inability of the customers
to make required payments. Based on past repayment trends and the nature of the receivables, the Group believes that no additional
impairment losses beyond amounts provided is necessary in respect of trade and other receivables neither past due nor impaired
because of no signifcant change in credit quality and the amounts are still considered recoverable.
14. TRADE AND OTHER RECEIVABLES (CONTD)
Impairment losses (contd)
The Group has recognised an impairment written back of $94,000 (2012: $Nil) in respect of the amounts owed by an afliated party
during the fnancial year.
As at 31 December 2012, the Groups most signifcant customer, an afliated party, accounted for 41.7% of the Groups total
outstanding trade and other receivables (including deposit with an afliated party). There is no concentration of credit risk as at 31
December 2013. However, 47.1% of the total trade and other receivables classifed as assets held for sale (note 19) relates to deposit
placed with and prepayment to an afliated party.
15. TRADE RECEIVABLES
Group Company
2013 2012 2013 2012
$000 $000 $000 $000
Trade receivables
- notes receivables 12,007
- afliated parties 13,262
- others 20 928 19 16
20 26,197 19 16
Impairment losses (632)
20 25,565 19 16
16. AMOUNTS DUE FROM SUBSIDIARIES
Company
2013 2012
$000 $000
Trade advances 280
Loans 52,853 56,529
52,853 56,809
Impairment losses (37,514) (5,242)
15,339 51,567
Loans due from subsidiaries are interest-free, unsecured and repayable on demand.
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Annual Report 2013
17. OTHER RECEIVABLES
Group Company
2013 2012 2013 2012
$000 $000 $000 $000
Advances to
- staf 1
- subcontractors/suppliers 500
Deposit for purchases of minerals 6,949 7,039
Interest receivable from
- afliated parties 30 30
- bank 6 6
- a third party 21 21
Other receivables from
- associate 30 30
- afliated parties 513 3,337 46 46
- others
#
2,178 22,998 98 98
9,661 33,941 165 210
Impairment losses (9,613) (10,106) (144) (98)
48 23,835 21 112
#
Included in the above other receivables of the Group in 2012, is an amount of $21,553,000 relating to proceeds due from
the disposal of certain businesses by Longwei prior to its acquisition by the Group, pursuant to the terms of the acquisition
of Longwei. This amount is presented net of $$6,423,000 payable to the same party. The amount was repaid in the current
year.
18. CASH AND CASH EQUIVALENTS
Group Company
2013 2012 2013 2012
$000 $000 $000 $000
Fixed deposits 29,301 1,218
Cash and bank balances 6,719 7,213 6,303 1,516
Cash and cash equivalents 6,719 36,514 6,303 2,734
Fixed deposits pledged to the bank for:
- notes payables (trade) (28,083)
- letter of credit facility (611)
Cash and bank balances represented as discontinued operations for
cash fow statement purpose (4,897)
Cash and cash equivalents in the cash fow statement 6,719 2,923
The weighted average efective interest rates per annum relating to cash and cash equivalents at the reporting date for the Group and
Company are 0.40% (2012: 1.54%) and 0.40% (2012: 1.06%) respectively. Interest rates are repriced within one year.
As at 31 December 2013, cash and cash equivalents of $22,792,000 were reclassifed to assets held for sale (note 19). Included in
cash and cash equivalents classifed as assets held for sale are fxed deposits of $19,657,000 pledged to the bank for notes payables
and cash and bank balances of $3,135,000.
19. ASSETS AND LIABILITIES CLASSIFIED AS HELD FOR SALE
The Groups steel-making operations consist of investments in (i) its 100%-owned subsidiaries, namely Sapphire Mineral Resources
(HK) Limited (SMRHK) and Lucky Art Holdings Limited (Lucky Art); and (ii) its available-for-sale fnancial assets, 16% interests in
Prime Empire Limited (Prime Empire) and 16% interest in Precise Skill Limited (Precise Skill) (collectively the Steel Business). In
view of the Boards intent and commitment to sell the Steel Business within the next 12 months, the assets and liabilities related to
the Steel Business were classifed as assets and liabilities held for sale in the balance sheet as at 31 December 2013.
The fair value less cost to sell value of the Steel Business of $66 million is determined by an external independent professional frm
having appropriate recognised professional qualifcation and experience. Although the Group believes that its estimates of fair value
are appropriate, the use of diferent methodologies or assumptions could lead to diferent measurements of fair value. The fair value
less cost to sell of the Steel Business is determined using level 3 valuation method (as defned in note 35) using the market approach,
with the key assumption, EV/EBITDA of 8.48x, which was determined based on comparable listed companies in China.
An impairment loss of $58,001,000 on the re-measurement of the Steel Business to the lower of its carrying amount and its fair value
less costs to sell has been recognised in other expenses (note 32). The impairment loss has been allocated to property, plant and
equipment and prepaid leases of the Steel Business for the Group. The Company recorded an impairment loss of $29,711,000 on
re-measurement of the subsidiary classifed as assets held for sale and the impairment loss has been allocated against the Companys
interest in subsidiaries (note 7):
Group
2013
Property, plant and equipment Note $000
Carrying value before re-measurement 4 112,597
Impairment loss on re-measurement (40,821)
Property, plant and equipment classifed as held for sale 71,776
Group
2013
Prepaid Leases Note $000
Carrying value before re-measurement 6 47,387
Impairment loss on re-measurement (17,180)
Prepaid leases classifed as held for sale 30,207
As at 31 December 2013, the steel business comprised the following assets and liabilities:
Group Company
2013 2013
Group Note $000 $000
Assets classifed as held for sale
Property, plant and equipment 71,776
Prepaid leases 30,207
Interest in subsidiaries 7 41,087
Other investments 9 9,600 9,600
Inventories 11 25,969
Deposit with an afliated party 13 63,184
Current tax asset 1,252
Cash and cash equivalents 18 22,792
295,630 50,687

84
Annual Report 2013
19. ASSETS AND LIABILITIES CLASSIFIED AS HELD FOR SALE (CONTD)
Group Company
2013 2013
Group Note $000 $000
Liabilities classifed as held for sale
Long term payable to an afliated party 22 110,708
Deferred tax liabilities 23 9,043
Trade and other payables 24 109,879
229,630
Net assets 66,000 50,687
As at 31 December 2013 included in the above assets classifed as held for sale, the Group had mortgages over its property, plant
and equipment and prepaid leases with net book value of $47,950,000 and $25,629,000 respectively to secure loans borrowed by
afliated parties (note 22).
Cumulative income or expense recognised in other comprehensive income
As at 31 December 2013, the Group has a cumulative translation gain of $1,110,000 recognised in other comprehensive income
relating to the Steel Business and the Company has a cumulative fair value gain of $1,497,000 recognised in other comprehensive
income relating to the other investments.
Sensitivity analysis
Changing one or more of the assumptions used to reasonably possible alternative assumptions may change the fair value of the Steel
Business to between $65 million and $89 million for the Group and between $50 million and $69 million for the Company, with the
following efects:
Group Company
Favourable Unfavourable Favourable Unfavourable
$000 $000 $000 $000
Increase/(decrease) in proft or loss 23,000 (1,000) 18,086 (755)
In addition, the Company has assessed the recoverability of an amount due from a subsidiary, which owns part of the Steel Business
using the same basis of valuation. A similar change in one or more of the assumptions used will afect the assessment of impairment
for the amount due from a subsidiary, with the following efects:
Company
Favourable Unfavourable
$000 $000
Increase/(decrease) in proft or loss 4,914 (245)
The favourable and unfavourable efects of using reasonably possible alternative assumptions have been calculated by recalibrating
the key assumption of EV/EBITDA to 9.33x and 8.44x respectively, based on comparable listed companies in China.
20. SHARE CAPITAL
Group and Company
2013 2012
No. of
shares
000
No. of
shares
000
Issued and fully paid ordinary shares, with no par value:
At 1 January and At 31 December 810,949 810,949
The holders of ordinary shares are entitled to receive dividends as declared from time to time, and are entitled to one vote per share
at meetings of the Company. All shares rank equally with regard to the Companys residual assets.
Capital Management
The Boards objective is to maintain a strong capital base so as to maintain investor, creditor and market confdence and to sustain
future development of the business. The Board of Directors monitors the return on capital, which the Group defnes as net operating
income divided by total shareholders equity excluding non-controlling interests. The Board also reviews and monitors the level of
dividends to ordinary shareholders.
The Group regularly reviews and manages its capital to maintain a balance between the higher shareholder returns that might be
possible with higher levels of borrowings and the advantages and security aforded by a sound capital position, and make adjustments
to the capital structure in light of changes in economic conditions by adjusting the amount of dividends paid to shareholders, issuing
new shares, returning capital to shareholders, raising new debt fnancing or selling assets to reduce debts.
The capital structure of the Group consists of debts, which includes borrowings disclosed in note 25, issued capital, reserves and
retained earnings.
There were no changes in the Groups approach to capital management during the fnancial year. The Group is not subject to
externally imposed capital requirements for the fnancial year ended 31 December 2013 and 31 December 2012.
21. RESERVES
Group Company
2013 2012 2013 2012
$000 $000 $000 $000
Capital reserve 1,235 1,235 1,084 1,084
Merger reserve 418 418
Other reserves (1,353) (1,353) (1,353) (1,353)
Statutory reserve 4,954 4,803
Currency translation reserve 333 (6,198)
Fair value reserve 619 1,497 10,374
Accumulated losses (192,591) (35,264) (188,517) (99,839)
(187,004) (35,740) (187,289) (89,734)
Capital reserve comprises the equity component of convertible bonds and convertible bank loan for the Group and Company.
86
Annual Report 2013
21. RESERVES (CONTD)
Merger reserve represents the diference between the nominal value of shares issued by the Company in exchange for the nominal
value of shares acquired in respect of the acquisition of a subsidiary, Sapphire Construction & Development Pte Ltd, accounted for
under the pooling of interest method.
Other reserves represent expenses incurred in relation to the issue of shares of the Company and share of associates other reserves.
The statutory reserve comprises amounts set aside in accordance with Company Law of PRC and the respective articles of association
of subsidiary in mainland China (the PRC Subsidiary) and the share of post-acquisition statutory reserves of associates. The PRC
Subsidiary is required to allocate 10% of its profts after tax, as determined in accordance with the Accounting Standards for Business
Enterprise and the Accounting Regulation for Business Enterprise issued by the Ministry of Finance of the PRC, to the statutory
reserve until such reserve reaches 50% of its registered capital. Statutory reserve shall only be used to make up losses, to expand
the PRC Subsidiarys production operations, or capitalised as share capital.
The currency translation reserve comprises foreign exchange diferences arising from the translation of net assets/liabilities of foreign
subsidiaries and share of associates foreign currency translation reserves and the exchange diference arising from the revaluation of
intra-group loan that in substance form part of the Companys net investment in a foreign operation.
Fair value reserve comprises the cumulative net change in the fair value of the available-for-sale fnancial assets until the investments
are derecognised or impaired.

The capital reserve, merger reserve and statutory reserve are not available for distribution as dividends.
22. LONG TERM PAYABLE TO AN AFFILIATED PARTY
Terms and debt repayment schedule
Terms and conditions of outstanding loans and borrowings are as follows:
2013 2012
Nominal
interest rate
Year of
maturity
Face
value
Carrying
amount
Face
Value
Carrying
amount
$000 $000 $000 $000
Group
Long term payable 3.00%
#
107,520 103,986
The salient terms of the long term payable to an afliated party are:
- the long term payable bears interest at 3% per annum;
- the subsidiary shall have the sole discretion as to the timing and quantum of repayment; and
- in the event that on the date of expiry of the corporate guarantees (note 37) and loans (borrowed by afliated parties for which
mortgages were granted over the Groups buildings, plant and machinery and prepaid leases (note 4 and 6)), the long term
payable remains outstanding, the afliated party may renew or extend these corporate guarantees and loans. Vice versa,
upon repayment, the afliated party will release the corporate guarantees and mortgages at a value equivalent to the amount
of repayment.
#
The long term payable has no fxed term of repayment and is not expected to be repaid within the next 12 months.
22. LONG TERM PAYABLE TO AN AFFILIATED PARTY (CONTD)
Terms and debt repayment schedule (contd)
As at 31 December 2013, long term payable to an afliated party of $110,708,000 was reclassifed to liabilities held for sale (note 19).
The face value of the long term payable as at 31 December 2013 was $114,470,000. The salient terms of the outstanding amount
remains the same as in 2012.
23. DEFERRED TAX LIABILITIES
Recognised deferred tax liabilities
Deferred tax liabilities are attributable to the following:
2013 2012
Group $000 $000
Property, plant and equipment 632
Intangible assets 465
Prepaid leases 7,799
Undistributed profts of a subsidiary 2,396
Long term payable to an afliated party 884
12,176
88
Annual Report 2013
23. DEFERRED TAX LIABILITIES (CONTD)
Movement in temporary diferences during the year
At
1 January
2012
Acquisition
of
subsidiary
Recognised
in income
statement
(note 31)
Exchange
diferences
At 31
December
2012
Recognised
in income
statement
(note 31)
Exchange
diferences
Reclassifed
to assets
held for sale
(note 19)
At 31
December
2013
$000 $000 $000 $000 $000 $000 $000 $000 $000
Group
Property, plant and
equipment 600 63 (31) 632 (659) 27
Intangible assets 909 (401) (43) 465 (483) 18
Prepaid leases 657 7,197 (22) (33) 7,799 (196) 499 (8,102)
Undistributed profts
of a subsidiary 3,545 (979) (170) 2,396 (2,490) 94
Long term payable
to an afliated
party 884 884 57 (941)
5,711 8,081 (1,339) (277) 12,176 (3,828) 695 (9,043)
At 31 December 2013, the undistributed profts generated since 1 January 2008 of a PRC subsidiary amounted to $2,236,000 (2012:
$24,682,000). Deferred tax liabilities of $NIL (2012: $2,396,000) have been recognised for dividends declared by the subsidiary
after the year end. Deferred tax liabilities of $223,000 (2012: $72,000) have not been recognised in respect of the tax that would
be payable on the distribution of these retained profts as the Group controls the dividend policy of the subsidiary and it has been
determined that it is probable that profts will not be distributed in the foreseeable future.
As at 31 December 2013, these undistributed profts and deferred tax liabilities not recognised relates to assets held for sale (note 19).
24. TRADE AND OTHER PAYABLES
Group Company
2013 2012 2013 2012
$000 $000 $000 $000
Notes payables to an afliated party 19,800
Trade payables to:
- subsidiary 358
- afliated party 5
- others 64 45,098 44 248
Accrued operating expenses 2,239 2,055 1,891 945
Amount due to:
- afliated parties (non-trade) 33,890
- subsidiaries (non-trade) 311 311 686
Trade receipts in advance from:
- afliated parties 1,807
- customers 7,854
Other payables 2 3,826 2 2
2,616 114,335 2,248 2,239
As at 31 December 2013, trade and other payables of $109,879,000 were reclassifed to liabilities held for sale (note 19). Included
in the trade and other payables classifed as held for sale are trade payables to afliated party of $7,893,000, amount due to afliated
parties (non-trade) of $3,434,000 and trade receipts in advance from afliated parties of $25,352,000.
As at 31 December 2012, amount due to afliated parties (non-trade) includes amounts due to an afliated party for the acquisition of
Longwei of $$21,970,000 and amounts outstanding for the purchase of hot-rolled reinforcement bars production line of $1,980,000.
The non-trade payable to subsidiaries of $311,000 at Group level as at 31 December 2013 relates to amount payable to subsidiaries
which are classifed as held for sale.
The trade and non-trade amounts due to subsidiary and afliated parties are interest-free, unsecured and repayable on demand.
25. FINANCIAL LIABILITIES
Group Company
2013 2012 2013 2012
$000 $000 $000 $000
Current liabilities
Current portion of secured bank loans 26,648
Finance lease liabilities 5 5
26,653 5

The fnancial liabilities were fully repaid in the current year.
90
Annual Report 2013
25. FINANCIAL LIABILITIES (CONTD)
Terms and debt repayment schedule
Terms and conditions of outstanding loans and borrowings are as follows:
2013 2012
Nominal
interest rate
Year of
maturity
Face
value
Carrying
amount
Face
value
Carrying
amount
$000 $000 $000 $000
Group
Secured bank loan 1 3.00% 3.60% 2011 2013 20,870 20,708
Secured bank loan 2 7.22% 2013 5,940 5,940
Finance lease liabilities 2.50% 2013 5 5
26,815 26,653
Company
Finance lease liabilities 2.50% 2013 5 5
The carrying amounts of the above loans include the unamortised amount of fees in relation to the bank loans.
The following are the contractual undiscounted cash infows (outfows) of fnancial liabilities, including interest payments and excluding
the impact of netting agreements:
Cash fows
Carrying
amount
Contractual
cash fows
Within
1 year
Within
1 to 5 years
$000 $000 $000 $000
Group
2013
Trade and other payables 2,616 (2,616) (2,616)
2012
Secured bank loan 1 20,708 (20,972) (20,972)
Secured bank loan 2 5,940 (6,057) (6,057)
Finance lease liabilities 5 (5) (5)
Long term payable to an afliated party (note 22) 103,986 (110,745) (3,226) (107,519)
25. FINANCIAL LIABILITIES (CONTD)
Liabilities held for sale
The trade and other payables classifed as liabilities held for sale are to be settled within a year. The contractual undiscounted cash
outfows of the long term payable to an afliated party classifed as held for sale amount to $117,904,000 comprising $3,434,000 to
be repaid within one year and $114,470,000 that is expected to be repaid within 1 to 5 years.
Cash fows
Carrying
amount
Contractual
cash fows
Within
1 year
Within
1 to 5 years
$000 $000 $000 $000
Company
2013
2012
Finance lease liabilities 5 (5) (5)
In 2012, the terms of the bank loans of the Group are as follows:
(i) Loan 1 of US$65,000,000 is repayable in 3 tranches by year 2013 and is secured by guarantees granted by the Company,
certain substantial shareholders of the Company, Lucky Art, PSL and PEL, and equity pledges against the shares held by
Lucky Art, PEL and PSL in Special Steel, Chengyu and Bowei respectively. Interest rates are repriced every month.
(ii) Loan 2 of RMB30,000,000 is repayable by year 2013 and are unsecured and guaranteed by afliated parties and a director of
the subsidiary. Interest rates are repriced every year.
Finance lease liabilities
In 2012, the obligations under fnance leases are for the purchase of a motor vehicle. The Group and the Company have obligations
under fnance leases that are payable as follows:
Future minimum
lease payments Interest Payments
$000 $000 $000
2012
Within 1 year 5 5
92
Annual Report 2013
26. PROVISIONS
Group Company
Rectifcation
costs
Rectifcation
costs
$000 $000
2013
At 1 January 2013 305 293
Provision made during the year
Provision utilised (104) (104)
At 31 December 2013 201 189
2012
At 1 January 2012 339 326
Provision made during the year 80 80
Provision utilised (114) (113)
At 31 December 2012 305 293
Rectifcation costs
The provision for rectifcation costs is based on estimates from known and expected rectifcation work and contractual obligation
for further work to be performed after completion, as well as historical data for claims for warranty associated with similar work and
services. The Group and Company expects to incur most of the liability over the next year.
27. REVENUE
Group Group
Discontinued operations Continuing operations
2013 2012 2013 2012
$000 $000 $000 $000
Sale of manufactured vanadium products 63,201 54,244
Processing fees for rebars and hot-rolled coil 30,346 43,132
Trading of minerals 29,374
Sale of manufactured steel products 79,322 8,828
Commission from trading of steel products 1,191 1,421
Sale of wine 423 145
Building maintenance and services 6 55
174,483 107,770 6 29,429
28. OTHER INCOME
Group Group
2013 2012 2013 2012
$000 $000 $000 $000
Dividend income from available-for-sale fnancial assets 2,311
Interest income:
- afliated parties 2,095 174
- banks 422 369 12 27
- third party 20
Exchange gain/(loss) (net) 950 676 1,763 (96)
Net result from fair value hedge 3,646
Rental income 3,065
Others 15 524 50 185
4,452 9,621 1,845 290
29. FINANCE COSTS
Group Group
2013 2012 2013 2012
$000 $000 $000 $000
Amortisation of fees in relation to bank loans 166 3,220
Interest expense:
- long term payable to afliated party 3,378
- fnance lease 2
- banks 268 3,493
3,812 6,713 2
94
Annual Report 2013
30. LOSS BEFORE INCOME TAX
The following items have been included in arriving at loss before income tax:
Group Group
2013 2012 2013 2012
$000 $000 $000 $000
Allowance for impairment losses on doubtful receivables 116 5,214
Amortisation of intangible assets and prepaid leases 2,030 1,858
Audit fees
- auditors of the Company 176 206
- other auditors 200 118 4 4
Depreciation of property, plant and equipment 17,754 9,898 68 99
Directors remuneration and fees
- directors of the Company 2,084 1,957
Exchange (gain)/loss (net) (950) (676) (1,763) 96
Impairment loss on available-for-sale fnancial assets 26,400 9,641
Goodwill written of 6,963
Impairment loss on intangibles 1,105
Impairment loss on property, plant and equipment 59,844
Impairment loss on re-measurement of assets held for sale 58,001
Loss on disposal of available-for-sale fnancial assets 670
Loss from realisation of fair value reserve upon utilisation of available-
for-sale fnancial assets for repayment of loan 959
Loss from realisation of reserves upon loss of signifcant infuence in
associates 111
Loss on disposal of property, plant and equipment 82
Net realisable value adjustment on development property 595
Net realisable value adjustment on inventories 4,802 63
Non-audit fees
- auditors of the Company 46 36
- other auditors 52 46 29 13
Operating lease expenses 234 231
Provision made for rectifcation costs 80
Staf costs (include direct costs) 9,683 7,648 1,906 2,286
Contributions to defned contribution plans included in staf costs 1,041 1,034 137 146
31. INCOME TAX (CREDIT)/EXPENSE
Group Group
2013 2012 2013 2012
$000 $000 $000 $000
Current tax expense
Current year 3,152 7,070
(Over)/underprovided in prior years (79) 290
3,073 7,360
Deferred tax expense
Origination and reversal of temporary diferences (3,828) (1,339)
(755) 6,021
Reconciliation of effective tax rate
Group
2013 2012
$000 $000
Loss for the year (157,176) (29,415)
Total income tax (credit)/expense (755) 6,021
Total share of results of associates (44) 6,541
Loss before tax (157,975) (16,853)
Tax calculated using Singapore tax rate at 17% (2012: 17%) (26,856) (2,865)
Efect of diferent tax rates in other countries (5,091) 1,075
Expenses not deductible for tax purposes 30,899 3,194
Income not subject to tax (905)
Provision for withholding tax on dividends by a subsidiary 2,417
Deferred tax beneft not recognised 1,710 2,815
Changes in unrecognised temporary diferences (1,338)
(Over)/underprovided in prior years (79) 290
(755) 6,021
Income tax recognised in other comprehensive income
There are no tax efects relating to other comprehensive income presented in the statement of comprehensive income.
96
Annual Report 2013
31. INCOME TAX (CREDIT)/EXPENSE (CONTD)
Unrecognised deferred tax assets
Deferred tax assets have not been recognised in respect of the following items:
Group
2013 2012
$000 $000
Deductible temporary diferences 21,976 27,064
Tax losses 78,460 85,702
Unutilised capital allowances 2,612 2,612
103,048 115,378
Deferred tax assets not recognised in respect of tax losses and deductible temporary diferences of $14,241,000 and $1,556,000,
respectively relate to the discontinued operations.
Deferred tax assets have not been recognised in respect of these items because it is not probable that future taxable proft will be
available against which the Group can utilise the benefts therefrom.
The unutilised tax losses and capital allowances which are available to set-of against future taxable income, are subject to agreement
by the tax authorities and compliance with tax regulations prevailing in the respective countries.
32. DISCONTINUED OPERATIONS
Following the Boards intention and commitment to sell the Steel Business within the next 12 months (note 19), the comparable proft
or loss for the Steel Business has been re-presented to show the discontinued operations separately from continuing operations.
Group
2013 2012
Note $000 $000
Revenue 27 174,483 107,770
Cost of sales (172,237) (88,145)
Gross proft 2,246 19,625
Other income 28 4,452 9,621
Distribution costs (963) (856)
Other expenses
- Other operating expenses (91,218) (19,980)
- Loss on re-measurement of Steel Business 19 (58,001)
(Loss)/proft from operating activities (149,415) 3,668
Finance costs 29 (3,812) (6,713)
Share of results of associates (6,368)
Loss before income tax 30 (153,227) (9,413)
Income tax credit/(expense) 31 755 (6,021)
32. DISCONTINUED OPERATIONS (CONTD)
Group
2013 2012
Note $000 $000
Earnings per share of discontinued operations 33
Basic (cents) (18.80) (1.90)
Cash fows from discontinued operations
Net cash from/(used in) operating activities 26,231 (9,140)
Net cash from investing activities 8,334 21,341
Net cash used in fnancing activities (27,581) (34,246)
Net cash fows for the year 6,984 (22,045)
33. EARNINGS PER SHARE
The calculation of basic earnings per share (EPS) at 31 December 2013 was based on the following loss attributable to owners of
the Company divided by the weighted average number of ordinary shares outstanding of 810,949,000 (2012: 810,949,000) during
the year.
2013 2012
Continuing Discontinued Total Continuing Discontinued Total
$000 $000 $000 $000 $000 $000
Group
Loss attributable to owners of the
Company (4,704) (152,472) (157,176) (13,981) (15,434) (29,415)
In 2012 and 2013, the diluted earnings per share are the same as basic earnings per share as the Group does not have any dilutive
capital instruments.
98
Annual Report 2013
34. RELATED PARTIES
Key management personnel compensation
Compensation payable to key management personnel comprises:
Group
2013 2012
$000 $000
Short-term employee benefts 2,851 2,454
Post-employment benefts 39 38
2,890 2,492
No share award was given to any participant in 2012 and 2013.
Other transactions with key management personnel
During the year, the Group and the Company had sales of wine of $8,000 (2012: $19,000) to a company in which a director of the
Company has substantial equity interests. The sales were made on the same terms as other third parties.
Other related party transactions
Other than disclosed elsewhere in the fnancial statements, the transactions with afliated parties and associates at terms agreed
between the parties are as follows:
Group
2013 2012
$000 $000
Afliated parties
- Commission from trading of steel products (84) (956)
- Processing fee from rebars and hot-rolled coil (30,346) (34,409)
- Sale of goods and others (15,920) (995)
- Sale of iron ore (26,221)
- Sale of wine (200) (52)
- Acquisition of hot-rolled reinforcement bars production line 30,983
- Commission expense for trading of minerals 94
- Fees paid for service rendered 400
- Purchase of material and others 56,269 33,954
- Reimbursement of costs 12,431 16,543
35. FINANCIAL RISK MANAGEMENT
Overview
Risk management is integral to the whole business of the Group. The Group has a system of controls in place to create an acceptable
balance between the cost of risks occurring and the cost of managing the risks. The management continually monitors the Groups
risk management process to ensure that an appropriate balance between risk and control is achieved. Risk management policies
and systems are reviewed regularly to refect changes in market conditions and the Groups activities.
The Audit and Risk Committee oversees how management monitors compliance with the Groups risk management policies and
procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Group. The function of
the Audit and Risk Committee is set out under the Corporate Governance Report.
Credit risk
The Groups credit risk is primarily attributable to its cash and cash equivalents, trade and other receivables, deposit with an afliated
party (classifed as held for sale as at 31 December 2013) and loan receivables. Some of these fnancial instruments are secured as
disclosed in notes 10 and 13 to the fnancial statements.
The Group has a credit policy in place which establishes credit limits for customers and monitors their balances on an ongoing basis.
Credit evaluations are performed on all customers requiring credit over a certain amount.
The Group establishes an allowance for impairment that represents its estimate of incurred losses in respect of trade and other
receivables. The main components of this allowance are a specifc loss component that relates to individually signifcant exposures,
and a collective loss component established for groups of similar assets in respect of losses that have been incurred but not yet
identifed. The collective loss allowance is determined based on historical data of payment statistics for similar fnancial assets.
The allowance account in respect of trade and other receivables is used to record impairment losses unless the Group is satisfed that
no recovery of the amount owing is possible. At that point, the fnancial asset is considered irrecoverable and the amount charged to
the allowance account is written of against the carrying amount of the impaired fnancial asset.
Please refer to note 37 for the credit risk exposures arising from fnancial guarantees which may be called upon.
Cash and fxed deposits are placed with banks and fnancial institutions which are regulated.
Liquidity risk
The Group monitors its liquidity risk and maintains a level of cash and cash equivalents deemed adequate by management to fnance
the Groups operations and to mitigate the efects of fuctuations in cash fows. Typically the Group ensures that it has sufcient cash
on demand to meet expected operational expenses, including the servicing of fnancial obligations; this excludes the potential impact
of extreme circumstances that cannot reasonably be predicted, such as natural disasters.
Analysis of contractual cashfows of fnancial liabilities is set out in note 25. Also refer to note 37 for fnancial guarantees which may
be called upon.
100
Annual Report 2013
35. FINANCIAL RISK MANAGEMENT (CONTD)
Market risk
Market risk is the risk of changes in market prices, such as interest rates, foreign exchange rates and equity prices that will afect
the Groups income or the value of its holdings of fnancial instruments. The objective of market risk management is to manage and
control market risk exposures within acceptable parameters, while optimising the return on risk.
Interest rate risk
At the reporting date, the Groups and the Companys exposure to market risk for changes in interest rates relates primarily to the
Groups and the Companys debt obligations. The Group and the Company do not use derivative fnancial instruments to hedge its
exposure in the fuctuations of interest rate.
At the reporting date, the interest rate profle of the interest-bearing fnancial instruments was:
Group Company
Carrying amount Carrying amount
2013 2012 2013 2012
$000 $000 $000 $000
Fixed rate instruments
Fixed deposits 29,301 1,218
Loan receivables 2,255 933 2,255 933
Finance lease liabilities (5) (5)
Long term payable to an afliated party (103,986)
2,255 (73,757) 2,255 2,146
Variable rate instruments
Secured bank loans (26,648)
As at 31 December 2013, included in assets and liabilities held for sale (note 19), are fxed deposits of $19,657,000 and long term
payable to an afliated party of $110,708,000, which are fxed rate instruments. There are no variable rate instruments included in the
assets and liabilities held for sale.
Fair value sensitivity analysis for fxed rate instruments
The Group does not account for any fxed rate fnancial assets at fair value through proft or loss. Therefore a change in interest rates
at the reporting date would not afect proft or loss.
Interest rate risk (contd)
Cash fow sensitivity analysis for variable rate instruments
In 2012, a change of 100 basis points (equivalent to 1 percentage point) in interest rates at the reporting date would have increased/
(decreased) proft or loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency
rates, remain constant. There are no variable rate instruments in 2013.
Proft or loss
100 bp
Increase
100 bp
decrease
Group $000 $000
31 December 2012
Variable rate instruments (266) 266
Foreign currency risk
The Group is exposed to foreign currency risk on sales, purchases, receipts, payments and borrowings that are denominated in
a currency other than the respective functional currencies of Group entities. The currencies arose from the monetary assets and
liabilities that give rise to this risk are primarily United States (US) dollar, Australian (AUS) dollar and Hong Kong (HK) dollar.
The exposures to foreign currency are as follows:
2013 2012
US
dollar
HK
dollar
AUS
dollar
US
dollar
HK
dollar
AUS
dollar
$000 $000 $000 $000 $000 $000
Group
Short-term loan receivable 2,255
Cash and cash equivalents 3,734 1,020 2,008 113
Trade and other payables (311) (66,076)
3,423 1,021 2,276 (13,426) 4,959
Company
Short-term loan receivable 2,255
Cash and cash equivalents 3,734 1,020 2,008 110
Trade and other payables (311) (686)
3,423 1,021 2,276 51,632 4,956
102
Annual Report 2013
Foreign currency risk (contd)
As at 31 December 2013, included in assets and liabilities held for sale (note 19), are trade and other receivable of $2,674,000 and
trade and other payables of $49,119,000 denominated in US dollar with exposures to foreign currency.
Sensitivity analysis foreign currency risk
A 10% strengthening of Singapore dollar against the following currencies at the reporting date would increase/(decrease) equity and
proft or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant.
Group Company
Equity Proft or loss Equity Proft or loss
$000 $000 $000 $000
31 December 2013
US dollar (342) (342)
HK dollar (102) (102)
AUS dollar (228) (228)
31 December 2012
US dollar 1,343 (5,163)
HK dollar (485) (11) (485) (11)
AUS dollar
A 10% strengthening of the Singapore dollar against the US dollar will increase proft or loss of the Steel Business by $4,645,000.
A 10% weakening of Singapore dollar against the above currencies would have had the equal but opposite efect on the above
currencies to the amounts shown above, on the basis that all other variables remain constant.
Price risk
The Group is exposed to equity securities price risk arising from the quoted equity securities classifed as available-for-sales fnancial
asset for which prices in the future are uncertain.
Sensitivity analysis equity price risk
A 25% (2012: 25%) increase in the underlying equity prices at the reporting date would increase/(decrease) the fair value of the quoted
equity securities by the following amounts:
Group and Company
2013 2012
$000 $000
Increase in share price
Increase in fair value of quoted equity securities charged to equity 1,212
Decrease in share price
Decrease in fair value of quoted equity securities charged to equity (1,212)

This analysis assumes that all other variables remain constant.
Estimation of fair values
The following summarises the signifcant methods and assumptions used in estimating the fair value of fnancial instruments.
Investments in equity securities
The fair value of available-for-sale fnancial assets is determined by reference to their quoted bid prices at the reporting date (quoted
equity securities) or estimated using the market approach and income capitalisation approach with the following key assumptions
(unquoted equity securities):
EV/EBITDA of 8.88x and 7.52x, applied in the market approach is based on the EV/EBITDA of comparable listed companies
in China.
Growth rates of 2.5% and 2% are applied to derive the free cash fows used in the income capitalisation method.
Fair value hierarchy
The table below analyses fnancial instruments carried at fair value, by valuation method. The diferent levels have been defned as
follows:
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e.,
as prices) or indirectly (i.e., derived from prices).
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
Level 1 Level 2 Level 3 Total
$000 $000 $000 $000
Financial assets carried at fair value
Group and Company
31 December 2013
Available-for-sale equity securities (quoted) 1 1
Available-for-sale equity securities (unquoted)
#
9,600 9,600
1 9,600 9,601
31 December 2012
Available-for-sale equity securities (quoted) 4,846 4,846
Available-for-sale equity securities (unquoted) 36,000 36,000
4,846 36,000 40,846
#
The unquoted available-for-sale equity securities are classifed as asset held for sale (note 19).
During the fnancial year, there were no transfers (2012: Nil) of fnancial instruments between Levels 1, 2 and 3.
104
Annual Report 2013
Fair value hierarchy (contd)
The following table shows a reconciliation from the beginning balance to the ending balance for fair value measurements in Level 3 of
the fair hierarchy:
Group Company
Available-for-
sale equity
securities
(unquoted)
Available-for-
sale equity
securities
(unquoted)
$000 $000
31 December 2013
At 1 January 36,000 36,000
Total loss recognised in other comprehensive income (7,069)
Total losses recognised in proft or loss (26,400) (19,331)
Reclassifed to assets held for sale (note 19) (9,600) (9,600)
At 31 December
31 December 2012
At 1 January 7,250 7,250
Reclassifed from investment in associates
#
36,826 22,081
Total gains recognised in other comprehensive income 1,565 6,669
Total losses recognised in proft or loss (9,641)
At 31 December 36,000 36,000
#
In 2012, the Group and Company re-classifed an equity investment from associates to available-for-sale fnancial assets due
to loss of signifcant infuence. As the investee company is not listed on any stock exchange, quoted market prices were not
available.
Although the Group believes that its estimates of fair value are appropriate, the use of diferent methodologies or assumptions could
lead to diferent measurements of fair value. For fair value measurements in Level 3, changing one or more of the assumptions used
to reasonably possible alternative assumptions (described below) would have the following efects (prior to reclassifcation of the
investments to assets held for sale):
2013 2012
Favourable Unfavourable Favourable Unfavourable
$000 $000 $000 $000
Group
Increase/(decrease) in equity 1,543 5,502
Increase/(decrease) in proft or loss 3,672 (4,171) (6,888)
Company
Increase/(decrease) in equity 3,508 (2,270) 5,502 (6,888)
Increase/(decrease) in proft or loss 1,707 (1,901)
The favourable and unfavourable efects of using reasonably possible alternative assumptions have been calculated by recalibrating
the EV/EBITDA (increase/(decrease) by 5%, 2012: 10%) in the market approach and the growth rate (range of 0 to 3%) in the income
capitalisation method based on the average of the Groups ranges of possible outcomes.
Level 1 Level 2 Level 3 Total
$000 $000 $000 $000
Financial assets not carried at fair value but for
which fair values are disclosed*
Group
31 December 2013
Long-term payable to an afliate
(classifed as asset held for sale, note 19) 110,708 110,708
31 December 2012
Long-term payable to an afliate 103,986 103,986
* Excludes fnancial assets and fnancial liabilities whose carrying amounts approximate their fair value due to their short-term
nature.
106
Annual Report 2013
The fair value of the long term payable to an afliated party is estimated by discounting its estimated cash fows. The interest rates
used to discount estimated cash fows of long term payable to an afliated party, where applicable, are based on a market-related
rate for similar instruments at the reporting date, and are as follows:
2013 2012
% %
Long term payable to an afliated party (classifed as asset held for sale, note 19) 6.4 6.4
36. CLASSIFICATION OF FINANCIAL ASSETS AND LIABILITIES
Available-for-
sale
Loans and
receivables
Other
fnancial
liabilities
within scope
of FRS 39
Other
fnancial
liabilities
outside
scope of
FRS 39
Total
carrying
amount
Group $000 $000 $000 $000 $000
2013
Assets
Other investments 1 1
Cash and cash equivalents 6,719 6,719
Short-term loan receivables 2,255 2,255
Trade and other receivables
(1)
131 131
1 9,105 9,106
Liabilities
2,616 2,616
2012
Assets
Other investments 40,846 40,846
Short-term loan receivables 933 933
Deposit with an afliated party 60,654 60,654
(1)
49,491 49,491
40,846 147,592 188,438
Liabilities
Secure bank loans 26,648 26,648
Long term payable to an afliated party 103,986 103,986
244,969 5 244,974
36. CLASSIFICATION OF FINANCIAL ASSETS AND LIABILITIES (CONTD)
Available-for-
sale
Loans and
receivables
Other
fnancial
liabilities
within scope
of FRS 39
Other
fnancial
liabilities
outside
scope of
FRS 39
Total
carrying
amount
Company $000 $000 $000 $000 $000
2013
Assets
Other investments 1 1
Short-term loan receivables 2,255 2,255
(1)
15,442 15,442
1 24,000 24,001
Liabilities
2,248 2,248
2012
Assets
Other investments 40,846 40,846
Short-term loan receivables 933 933
(1)
51,778 51,778
40,846 55,445 96,291
Liabilities
2,239 5 2,244
(1)
Excludes prepayment and club membership
108
Annual Report 2013
37. CONTINGENT LIABILITIES
At 31 December 2013, except as disclosed elsewhere in the notes to the fnancial statements, the contingent liabilities are as follows:
Group Company
2013 2012 2013 2012
$000 $000 $000 $000
Corporate guarantees
Financial guarantees given to afliated parties for bank loans 111,133
Unsecured guarantees given to bank for issuance of trade facilities on
behalf of a subsidiary 18,263
As at 31 December 2012, $42,075,000 of the above corporate guarantees are subject to the terms agreed for the long term payable
in note 22.

As at 31 December 2013, the subsidiaries classifed as held for sale, had given fnancial guarantees to afliated parties for bank loan
of $118,317,000, of which $44,795,000 corporate guarantees are subject to the terms agreed for the long term payable in note 22.
Nonetheless, an afliated party has given a counter security whereby it will indemnify the subsidiary against any claims, liabilities or
losses which may be made against the subsidiary or which the subsidiary may incur in connection with any default by the afliated
parties.
Continuing fnancial support
The Company has given formal undertakings, which are unsecured, to provide fnancial support to its subsidiaries. At 31 December
2013, the net current liabilities and defcits in shareholders funds of these subsidiaries amounted to approximately $61,058,000
(2012: $26,185,000) and $45,746,000 (2012: $15,893,000) respectively.
38. COMMITMENTS
Lease commitments
At 31 December, the Group and the Company have commitments for future minimum lease payments in respect of non-cancellable
operating leases as follows:
Group Company
2013 2012 2013 2012
$000 $000 $000 $000
Within 1 year 243 234 243 230
Between 1 and 5 years 22 265 22 265
265 499 265 495
The Group and the Company lease a number of ofces and housing under operating leases. The leases typically run for an initial
period of one year or two years, with an option to renew the lease after that date. None of the leases includes contingent rentals.
There are no lease commitments arising from the discontinued operations.
39. SEGMENT REPORTING
The Group has four reportable segments, as described below, which are the Groups strategic business units. The strategic business
units ofer diferent products or services, and are managed separately. For each of the strategic business units, the Group CEO
reviews internal management reports on at least a quarterly basis. The following summary describes the operations in each of the
Groups reportable segments:
- Steel-making operations (manufacturing and Investments);
- Trading of minerals;
- Development properties; and
- Others (include building maintenance and services and sales of wine)
Following the Boards intention and commitment to sell the steel-making operations (including the sales of wine business) over the
next 12 months (note 19), the segment reporting have been re-presented to refect the discontinued operations of the steel-making
operations and the comparatives of which have also been re-presented as part of the discontinued operations.
Information regarding the results of each reportable segment is included below. Performance is measured based on segment proft
before income tax, as included in the internal management reports that are reviewed by the Groups CEO. Segment proft is used to
measure performance as management believes that such information is the most relevant in evaluating the results of certain segments
relative to other entities that operate with these industries. Segment results, assets and liabilities include items directly attributable to a
segment as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly corporate assets (primarily
the Companys headquarters), head ofce expenses, and tax assets and liabilities.
Integrated steel-making operations segment has two categories:
(1) Manufacturing: Mainly manufacture of steel and vanadium products and processing fee; and
(2) Investments: This includes the Groups share of results from associates which engage in activities similar to the segment.
Transactions relating to available-for-sale fnancial assets, comprising equity investments in companies involved in integrated
steel-making operations and the fnancing of such assets, are also included in this segment.
110
Annual Report 2013
39. SEGMENT REPORTING (CONTD)
Discontinued steel-making operations Continuing operations
Manu-
facturing Investments Others
Trading of
minerals
Development
properties Others Total
$000 $000 $000 $000 $000 $000 $000
Revenue and expenses
2013
Total revenue from external
customers 174,060 423 6 174,489
Inter-segment revenue
Interest income 421 1 422
Interest expenses (3,490) (156) (3,646)
Depreciation and amortisation (19,784) (20) (19,804)
Share of results of associates 44 44
Reportable segment loss before
income tax (126,175) (26,687) (365) (822) (85) (58) (154,192)
Other material non-cash items:
- Allowance for impairment loss
on doubtful receivables (39) (77) (116)
- Impairment loss of available-for-
sale fnancial assets (26,400) (26,400)
- Impairment loss of property,
plant and equipment (59,844) (59,844)
- Net realisable value adjustment
on inventories (4,802) (4,802)
- Impairment loss of
re-measurement of steel
business (58,001) (58,001)
- Impairment loss on intangible (1,105) (1,105)
Investment in associates 883 883
Reportable segment assets 285,058 9,600 972 284 47 2,455 298,416
Capital expenditure 1,489 3 1,492
Reportable segment liabilities 229,153 24 453 339 4 581 230,554
Discontinued steel-making operations Continuing operations
Manu-
facturing Investments Others
Trading of
minerals
Development
properties Others Total
$000 $000 $000 $000 $000 $000 $000
Revenue and expenses
2012
Total revenue from external
customers 107,557 213 29,374 55 137,199
Inter-segment revenue
Interest income 367 2,095 2 174 2,638
Interest expenses (149) (3,344) (3,493)
Share of results of associates (6,368) (173) (6,541)
Reportable segment proft/(loss)
before income tax 13,540 (22,554) (399) (8,371) (686) 101 (18,369)
Other material non-cash items:
- Allowance for impairment loss
on doubtful receivables (5,086) (128) (5,214)
- Goodwill written of (6,963) (6,963)
- Impairment loss of available-for-
sale fnancial assets (9,641) (9,641)
- Loss on inventory (760) (760)
on development properties (595) (595)
on inventories (63) (63)
- Net result from fair value hedge 3,646 3,646
- Realisation of fair value reserve
upon utilisation of available-
for-sale fnancial assets for
repayment of loan (959) (959)
Investment in associates 913 913
Reportable segment assets 429,362 40,846 1,101 442 6,024 1,092 478,867
Reportable segment liabilities 222,065 20,740 602 517 571 578 245,073
112
Annual Report 2013
Reconciliations of reportable segment revenue, proft or loss, assets and liabilities and other material items
2013 2012
$000 $000
Revenue
Total revenue for reportable segments 174,489 137,199
Elimination of inter-segment
Consolidated revenue 174,489 137,199
Proft or loss
Total loss before income tax for reportable segments (154,192) (18,369)
Elimination of inter-segment proft
Unallocated amounts:
- Other income 1,945 24
- Other expense (5,684) (5,049)
- Tax expense 755 (6,021)
Consolidated loss for the year (157,176) (29,415)
Assets
Total assets for reportable segments 298,416 478,867
Elimination of inter-segment assets
Investments in associates 883 913
Other unallocated amounts 6,633 3,171
Consolidated total assets 305,932 482,951
Liabilities
Total liabilities for reportable segments 230,554 245,073
Elimination of inter-segment liabilities
Other unallocated amounts 1,893 13,129
Consolidated total liabilities 232,447 258,202
Reconciliations of reportable segment revenue, proft or loss, assets and liabilities and other material items (contd)
Reportable
segment total
Unallocated
amounts
Consolidated
total
$000 $000 $000
Other material items 2013
Interest income 422 32 454
Interest expenses (3,646) (3,646)
Other material items 2012
Interest income 2,638 27 2,665
Interest expenses (3,493) (3,493)
Geographical segments
Geographical segments are analysed by two principal geographical areas: Singapore and Peoples Republic of China (China and
Hong Kong).
In presenting information on the basis of geographical segments, segment revenue is based on a geographical location of customers.
Segment non-current assets are based on the geographical location of the assets.
Geographical information
Revenue
Non-current
assets
$000 $000
31 December 2013
Singapore 6 1,028
Peoples Republic of China 174,483 111,583*
174,489 112,611
* The non-current assets disclosed above has been reclassifed to assets held for sale (note 19) and included in current assets
on the balance sheet in 2013.
31 December 2012
Singapore 55 951
Peoples Republic of China 137,144 267,393
137,199 268,344
114
Annual Report 2013
Major customers
Revenue from one customer of the steel operations segment and Nil (2012: one) customer of the trading of minerals represent
approximately $30,346,000 (2012: $60,470,000) of the Groups total revenue. Revenue from the steel operations had been
discontinued (note 32).
40. SUBSEQUENT EVENT
On 9 October 2013, the Group announced the proposed acquisition of Mancala Holdings Pty Ltd (Mancala), for an aggregate
consideration of up to A$15 million, payable in 3 separate tranches. The consideration payable is to be satisfed with cash of up to
A$5 million and up to A$10 million by the issue of such number of new ordinary shares of the Company.
In connection with the proposed acquisition, the Company and Mancala have entered into a loan, pursuant to which the Company
has agreed to grant a loan of A$2 million to Mancala.
The proposed acquisition was completed on 7 January 2014. The Group is in the process of obtaining and assessing the information
as of the acquisition date for the purpose of the initial accounting for the business combination.
ADDITIONAL INFORMATION
Interested person transactions carried out during the fnancial year pursuant to the shareholders mandate obtained under Chapter 9 of the
Listing Manual of the Singapore Exchange Securities Limited (SGX) by the Group as follows:
Name of Interested Persons and
Transactions
Aggregate value of all interested
person transactions during the
fnancial year under review (excluding
transactions less than S$100,000
and transactions conducted under
shareholders mandate pursuant to
Rule 920)
Aggregate value of all interested
person transactions conducted under
shareholders mandate pursuant to
Rule 920 (excluding transactions less
than S$100,000)
2013 2012 2013 2012
$000 $000 $000 $000
Purchase of Steel billets and Vanadium
slags by Special Steel from Chengyu
- - 17,798 32,602
Processing of rebar by Special Steel for
Chengyu
- - 26,008 32,075
Reimbursement of costs for provision of
gases from Special Steel to Chengyu and
Bowei
- - 9,583 16,146
Processing of hot rolled coil by Special
Steel for Chengyu
4,635 2,181 - -
Advance to Longwei by Special Steel - 658 - -
Sales of steel cutting head and scrap
steel from Special Steel to Chengyu
- 248 - -
Short term loan to Trisonic International
Limited by Sapphire Corporation Limited
- 3,852
#
- -
Sales of iron ores by Sapphire Mineral
Resources Pte Ltd to HSC Resources Ltd
- - - 26,221
Sales of hot rolled coil by Special Steel to
Longwei
- - - 484
Service rendered by Trisonic to SMRHK - 400 - -

#
The loan was extended and repaid in 2Q2012.
Note: With the change of shareholdings on 29 August 2013, Mr. Wang Jin no longer holds directly or indirectly 15% or more of
the total number of issue shares in the Company and is now not a controlling shareholder. Accordingly, the transactions are not
considered as interested person transaction and not refected as such from 29 August 2013.
116
Annual Report 2013
SHAREHOLDINGS STATISTICS
AS AT 12 MARCH 2014
Class of shares - Ordinary shares
Voting rights - 1 vote per ordinary share
ANALYSIS OF SHAREHOLDINGS
Range of Shareholdings No. of Shareholders % No. of Shares %
1 - 999 1,597 16.91 486,587 0.06
1,000 - 10,000 4,461 47.23 24,100,924 2.97
10,001 - 1,000,000 3,348 35.45 201,900,631 24.90
1,000,001 and above 39 0.41 584,461,186 72.07
9,445 100.00 810,949,328 100.00
TOP 20 SHAREHOLDERS
No. Name of Shareholders No. of Shares %
1 Phillip Securities Pte Ltd 192,748,659 23.77
2 UOB Kay Hian Pte Ltd 177,297,146 21.86
3 HSBC (Singapore) Nominees Pte Ltd 37,021,000 4.57
4 Nippon Paint (Singapore) Company Private Limited 25,896,334 3.19
5 Sichuan Shuntong Mining Industry Group Co Ltd 18,154,166 2.24
6 Rafes Nominees (Pte) Ltd 11,548,533 1.42
7 United Overseas Bank Nominees Pte Ltd 11,101,500 1.37
8 OCBC Securities Private Ltd 10,620,400 1.31
9 Yang Jian 8,005,050 0.99
10 Bank of Singapore Nominees Pte Ltd 7,159,581 0.88
11 Lim Jiahui 6,406,000 0.79
12 DBS Nominees Pte Ltd 5,998,037 0.74
13 Zhang Zhihu 5,875,000 0.72
14 Maybank Kim Eng Securities Pte Ltd 5,816,864 0.72
15 DBSN Services Pte Ltd 5,730,000 0.71
16 Nippon Paint (H.K.) Company Limited 4,460,100 0.55
17 CIMB Securities (S) Pte Ltd 4,249,312 0.52
18 Foo Sing Fat 3,890,000 0.48
19 Toh Sui Ah 3,627,300 0.45
20 Hoo Su Hen@ Ho Su Hen or Ho Ting Luan (He Tingluan) 3,577,000 0.44
549,181,982 67.72
SHAREHOLDINGS STATISTICS
AS AT 12 MARCH 2014
SUBSTANTIAL SHAREHOLDERS
Substantial Shareholder Direct Interests Deemed Interests
Direct and
Deemed Interests
Number of
Shares %
Number of
Shares %
Number of
Shares %
Shi Yin Jun 100,768,191 12.43 - - 100,768,191 12.43
ACH Investments Pte Ltd 185,426,181 22.87 - - 185,426,181 22.87
Christopher Chong Meng Tak * - - 185,426,181 22.87 185,426,181 22.87
Rosanna Ai Leng Lam* - - 185,426,181 22.87 185,426,181 22.87
Note:
* Mr Christopher Chong Meng Tak and Ms Rosanna Ai Leng Lam are deemed to be interested in the shares in which ACH Investments
Pte Ltd has an interest.
Shareholdings Held in Hands of Public
Based on information available to the Company as at 12 March 2014 approximately 62.46% of the issued ordinary shares of the Company
is held by the public and therefore Rule 723 of the Listing Manual is complied with.
The Company did not hold any treasury shares as at 12 March 2014.
118
Annual Report 2013
NOTICE OF ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN that the Twenty-Eighth Annual General Meeting of SAPPHIRE CORPORATION LIMITED will be held at 55,
Market Street, #03-01, Singapore 048941, on Wednesday, 23 April 2014 at 11.00 a.m. for the following purposes:
ORDINARY BUSINESS
1. To receive the audited accounts for the year ended 31 December 2013 and the Reports of the Directors and Auditors.
(Resolution 1)
2. To approve Directors Fees of S$207,883 for the year ended 31 December 2013. (2012: S$212,326) (Resolution 2)
3. To re-elect the following Directors who retire in accordance with the Companys Articles of Association and who, being eligible, ofer
themselves for re-election: -

(i) Mr Teo Cheng Kwee (Article 91) (Resolution 3)
(ii) Mr Foo Tee Heng (Article 91) (Resolution 4)
(iii) Mr Teh Wing Kwan (Article 97) (Resolution 5)
(iv) Mr Lim Jun Xiong Steven (Article 97) (Resolution 6)
(v) Mr Tao Yeoh Chi (Article 97) (Resolution 7)
(vi) Mr Fong Heng Boo (Article 97) (Resolution 8)
(See Explanatory Note 1)
4. To re-appoint Messrs KPMG LLP as Auditors of the Company and to authorise the Directors to fx their remuneration.
(Resolution 9)
SPECIAL BUSINESS
To consider and, if thought ft, to pass the following resolutions as Ordinary Resolutions, with or without Amendments:-
5. Authority to Directors to Issue Shares (General) (Resolution 10)
That pursuant to Section 161 of the Companies Act, Cap. 50 and the listing rules of the Singapore Exchange Securities Trading
Limited, authority be and is hereby given to the directors of the Company to issue shares and convertible securities in the Company
(whether by way of rights, bonus or otherwise) at any time to such persons and upon such terms and conditions and for such
purposes as the directors may in their absolute discretion deem ft, provided that the aggregate number of shares and convertible
securities to be issued pursuant to this resolution does not exceed 50% of the total number of issued shares excluding treasury
shares of the Company, of which the aggregate number of shares and convertible securities to be issued other than on a pro-rata
basis to existing shareholders of the Company does not exceed 20% of the total number of issued shares excluding treasury shares
of the Company. For the purposes of this resolution, the total number of issued shares excluding treasury shares shall be based on
the total number of issued shares excluding treasury shares of the Company at the time this resolution approving the mandate is
passed (after adjusting for any new shares arising from the conversion or exercise of convertible securities; or new shares arising from
exercising share options or vesting of share awards outstanding or subsisting at the time of the passing of this resolution approving
the mandate, provided the option or awards were granted in compliance with Part VIII of Chapter 8 of the Listing Manual; and any
subsequent bonus issue, consolidation or subdivision of shares in the Company), and unless revoked or varied by the Company in
general meeting, such authority shall continue in force until the conclusion of the next annual general meeting of the Company or the
date by which the next annual general meeting of the Company is required by law to be held, whichever is the earlier.

6. Proposed Renewal of the Share Buy-Back Mandate (Resolution 11)
That:
(a) for the purposes of the Companies Act (Chapter 50) of Singapore (the Act), the exercise by the Directors of the Company
of all the powers of the Company to purchase or otherwise acquire Shares not exceeding in aggregate the Prescribed Limit
(as hereafter defned), at such price(s) as may be determined by the Directors of the Company from time to time up to the
Maximum Price (as hereafter defned), whether by way of:
(i) market purchases (Market Purchases) on the Singapore Exchange Securities Trading Limited (the SGX-ST); and/
or
(ii) of-market purchases (Of-Market Purchases) efected otherwise than on the SGX-ST in accordance with any equal
access schemes as may be determined or formulated by the Directors of the Company as they consider ft, which
schemes shall satisfy all the conditions prescribed by the Act, and otherwise in accordance with all other provisions
of the Act and listing rules of the SGX-ST as may for the time being be applicable, be and is hereby authorised and
approved generally and unconditionally (the Mandate);
(b) unless varied or revoked by the Company in General Meeting, the authority conferred on the Directors of the Company
pursuant to the Mandate may be exercised by the Directors at any time and from time to time during the period commencing
from the passing of this Resolution and expiring on the earlier of:
(i) the date on which the next annual general meeting of the Company is held or required by law or the Articles of
Association of the Company to be held;
(ii) the date on which the share buy-backs are carried out to the full extent mandated; or
(iii) the date on which the authority contained in the Mandate is varied or revoked,
(the Relevant Period);
(c) in this Resolution:
Prescribed Limit means 10% of the issued ordinary share capital of the Company as at the date of passing of this Resolution
unless the Company has efected a reduction of the share capital of the Company in accordance with the applicable provisions
of the Act, at any time during the Relevant Period, in which event the issued ordinary share capital of the Company shall be
taken to be the amount of the issued ordinary share capital of the Company as altered (excluding any treasury shares that may
be held by the Company from time to time);

Maximum Price in relation to a Share to be purchased, means an amount (excluding brokerage, stamp duties, applicable
goods and services tax and other related expenses) not exceeding:
(i) in the case of a Market Purchase, one hundred and fve per cent (105%) of the Average Closing Price;
(ii) in the case of an Of-Market Purchase pursuant to an equal access scheme, one hundred and twenty per cent (120%)
of the Highest Last Dealt Price, where:
Average Closing Price means the average of the closing market prices of a Share over the last fve (5) market
days, on which transactions in the Shares were recorded, immediately preceding the day of the Market Purchase, and
deemed to be adjusted for any corporate action that occurs after such fve market day period;
120
Annual Report 2013
Highest Last Dealt Price means the highest price transacted for a Share as recorded on the SGX-ST on the market
day on which there were trades in the Shares immediately preceding the day of the making of the ofer pursuant to the
Of-Market Purchase;
day of the making of the ofer means the day on which the Company announces its intention to make an ofer
for the purchase of Shares from shareholders of the Company, stating the purchase price (which shall not be more
than the Maximum Price calculated on the foregoing basis) for each Share and the relevant terms of the equal access
scheme for efecting the Of-Market Purchase; and
market day means a day on which SGX-ST is open for trading in securities; and
(d) the Directors of the Company be and are hereby authorised to complete and do all such acts and things (including executing
such documents as may be required) as they may consider expedient or necessary to give efect to the transactions
contemplated by this Resolution.
7. To transact any other business that may be transacted at an Annual General Meeting of which due notice shall have been given.
By Order of the Board
Lee Wei Hsiung
Company Secretary
Singapore
8 April 2014
NOTES:-
A member entitled to attend and vote at the Meeting is entitled to appoint not more than two proxies to attend and vote in his stead. A proxy
need not be a member of the Company. The instrument appointing a proxy must be deposited at the Companys Registered Ofce, 80
Robinson Road, #02-00 Singapore 068898 not less than 48 hours before the time fxed for holding the Meeting.
EXPLANATORY NOTES:
(1) Ordinary Resolution No. 3 is for the re-election of Mr Teo Cheng Kwee as a Director of the Company who retires by rotation at
the Annual General Meeting. Mr Teo shall, upon re-election as a Director of the Company, remain as a member of the Nominating
Committee and Remuneration Committee.
Ordinary Resolution No. 4 is for the re-election of Mr Foo Tee Heng as a Director of the Company who retires by rotation at the
Annual General Meeting.
Ordinary Resolution No. 5 is for the re-election of Mr Teh Wing Kwan as a Director of the Company who joined the Board of
Directors of the Company on 3 October 2013.
Ordinary Resolution No. 6 is for the re-election of Mr Lim Jun Xiong Steven as a Director of the Company who joined the Board of
Directors on 1 October 2013. Mr Lim shall, upon re-election as a Director of the Company, remain as the Chairman of the Nominating
Committee and a member of the Audit and Risk Committee and Remuneration Committee. Mr Lim shall be considered independent
for the purposes of Rule 704(8) of the Listing Manual of the Singapore Exchange Securities Trading Limited (SGX-ST).
Ordinary Resolution No. 7 is for the re-election of Mr Tao Yeoh Chi as a Director of the Company who joined the Board of Directors
on 1 October 2013. Mr Tao shall, upon re-election as a Director of the Company, remain as the Chairman of the Remuneration
Committee and a member of the Audit and Risk Committee and Nominating Committee. Mr Tao shall be considered independent for
the purposes of Rule 704(8) of the Listing Manual of the SGX-ST.
Ordinary Resolution No. 8 is for the re-election of Mr Fong Heng Boo as a Director of the Company who joined the Board of
Directors on 15 January 2014. Mr Fong shall, upon re-election as a Director of the Company, remain as the Chairman of the Audit
and Risk Committee and a member of the Nominating Committee and Remuneration Committee. Mr Fong shall be considered
independent for the purposes of Rule 704(8) of the Listing Manual of the SGX-ST.
The Directors who have ofered themselves for re-election have each confrmed that, they do not have any relationships (including
immediate family relationships) with the other Directors, the Company or its 10% shareholders.
The current directorships in other listed companies and details of other principal commitments held by each of these Directors are set
out on the Corporate Governance Report section of this Annual Report.
(2) Ordinary Resolution No. 10, if passed, will empower the Directors of the Company from the date of the above Meeting until the
conclusion of the next Annual General Meeting or the date by which the next Annual General Meeting of the Company is required
by law to be held, whichever is earlier, to issue shares and convertible securities in the Company up to 50% of the Companys
total number of issued shares excluding treasury shares in the capital of the Company, with an aggregate sub-limit of 20% of the
Companys total number of issued shares excluding treasury shares for any issue of shares and convertible securities not made on a
pro-rata basis to existing shareholders of the Company, as more particularly set out in the resolution.
(3) Ordinary Resolution No. 11 relates to the renewal of the Share Buy-back Mandate which was approved by the Shareholders of the
Company on 24 April 2013, and if passed, will authorise the Directors of the Company from the date of this Meeting until the next
Annual General Meeting of the Company, or the date by which the next Annual General Meeting of the Company is required by law
to be held or such authority is revoked or varied by the Company at a general meeting, whichever is earlier, to purchase up to 10% of
the total number of issued ordinary shares in the capital of the Company. Please refer to Appendix accompanying the Annual Report
for details.
This page has been intentionally left blank.
*I/We (Name)
of (Address)
being a member/members of Sapphire Corporation Limited (the Company), hereby appoint
Name NRIC/Passport No.
Proportion of shareholdings
No. of Shares %
Address
and/or (delete as appropriate)
Name NRIC/Passport No.
Proportion of shareholdings
No. of Shares %
Address
as my/our proxy/proxies to vote for me/us and on my/our behalf and, if necessary, to demand a poll, at the 28
th
Annual General Meeting of
the Company to be held at 55, Market Street, #03-01, Singapore 048941 on Wednesday 23 April 2014 at 11.00 a.m. and at any adjournment
thereof.
(Please indicate with an X in the spaces provided whether you wish your vote(s) to be cast for or against the Resolutions to be proposed at
the Meeting as indicated hereunder. In the absence of specifc directions, the proxy/ proxies will vote or abstain as he/they may think ft, as
he/they will on any other matter arising at the Meeting.
No. Resolutions relating to For Against
1 To receive the Directors Report and the Audited Accounts for the year ended 31 December 2013
together with the Auditors report thereon.
2 To approve Directors Fees for the year ended 31 December 2013.
3 To re-elect Mr Teo Cheng Kwee as a Director
4 To re-elect Mr Foo Tee Heng as a Director
5 To re-elect Mr Teh Wing Kwan as a Director
6 To re-elect Mr Lim Jun Xiong Steven as a Director
7 To re-elect Mr Tao Yeoh Chi as a Director
8 To re-elect Mr Fong Heng Boo as a Director
9 To re-appoint Messrs KPMG LLP as Auditors and to authorize the Directors to fx their remuneration
10 To authorise Directors to issue shares (General)
11 To renew Share Buy-back Mandate
12 To transact any other business
Dated this __________ day of _______________________ 2014
Signature(s) of Member(s)/Common Seal
IMPORTANT
1. For investors who have used their CPF monies to buy the Companys
shares, this Report is forwarded to them at the request of the CPF
Approved Nominees and is sent solely FOR INFORMATION ONLY.
2. This Proxy Form is not valid for use by CPF investors and shall be
inefective for all intents and purposes if used or purported to be used
by them.
3. CPF investors who wish to attend the Meeting as an observer must
submit their requests through their CPF Approved Nominees within
the timeframe specifed. If they also wish to vote, they must submit
their voting instructions to the CPF Approved Nominees within the
timeframe specifed to enable them to vote on their behalf.
(Incorporated in the Republic of Singapore)
Registration No.198502465W
PROXY FORM
(Please see notes overleaf before completing this Form)
Total number of shares in: No. of shares
(a) CDP Register
(b) Register of Members
Notes:-
1. Please insert the total number of Shares held by you. If you have Shares entered against your name in the Depository Register (as
defned in Section 130A of the Singapore Companies Act, Chapter 50), you should insert that number of Shares. If you have Shares
registered in your name in the Register of Members, you should insert that number of Shares. If you have Shares entered against your
name in the Depository Register and Shares registered in your name in the Register of Members, you should insert the aggregate
number of Shares entered against your name in the Depository Register and registered in your name in the Register of Members. If
no number is inserted, the instrument appointing a proxy or proxies shall be deemed to relate to all the Shares held by you.
2. A member of the Company entitled to attend and vote at a meeting of the Company is entitled to appoint one or two proxies to attend
and vote instead of him.
3. Where a member appoints more than one proxy, the appointments shall be invalid unless he specifes the proportion of his shareholding
(expressed as a percentage of the whole) to be represented by each proxy.
4. The instrument appointing a proxy or proxies must be deposited at the registered ofce of the Company at 80 Robinson Road, #02-
00, Singapore 068898, not less than 48 hours before the time appointed for the Annual General Meeting.
5. The instrument appointing a proxy or proxies must be under the hand of the appointor or of his attorney duly authorised in writing.
Where the instrument appointing a proxy or proxies is executed by a corporation, it must be executed either under its seal or under
the hand of an ofcer or attorney duly authorised.
6. A corporation which is a member may authorise by resolution of its directors or other governing body such person as it thinks ft to act
as its representative at the Annual General Meeting, in accordance with Section 179 of the Singapore Companies Act, Chapter 50.
GENERAL:
The Company shall be entitled to reject the instrument appointing a proxy or proxies if it is incomplete, improperly completed or illegible or
where the true intentions of the appointor are not ascertainable from the instructions of the appointor specifed in the instrument appointing a
proxy or proxies. In addition, in the case of Shares entered in the Depository Register, the Company may reject any instrument appointing a
proxy or proxies lodged if the member, being the appointor, is not shown to have Shares entered against his name in the Depository Register
as at 48 hours before the time appointed for holding the Annual General Meeting, as certifed by The Central Depository (Pte) Limited to the
Company.
CORPORATE
INFORMATION
BOARD OF DIRECTORS
(Chairman)
Mr Teh Wing Kwan
(Group Chief Executive Ofcer)
Mdm Cheung Kam Wa Emma
(Group Chief Operating Ofcer)
Mr Teo Cheng Kwee
Mr Foo Tee Heng
Mr Yang Jian
Mr Duan Bing
Mr Tao Yeoh Chi
Mr Wei Jian Ping
Mr Fong Heng Boo
Mr Fong Heng Boo
(Chairman)
Mr Tao Yeoh Chi
Mr Wei Jian Ping
NOMINATING COMMITTEE
(Chairman)
Mr Tao Yeoh Chi
Mr Fong Heng Boo
Mr Teo Cheng Kwee
REMUNERATION COMMITTEE
Mr Tao Yeoh Chi
(Chairman)
Mr Fong Heng Boo
Mr Wei Jian Ping
Mr Teo Cheng Kwee
Mr Yang Jian
CHIEF FINANCIAL OFFICER
Mr Ng Hoi Gee, Kit
Email: kitng@sapphirecorp.com.sg
COMPANY SECRETARY
Lee Wei Hsiung, ACIS
REGISTERED OFFICE
80 Robinson Road #02-00
Singapore 068898
Tel: 6236 3333
Fax: 6236 4399
SHARE REGISTRAR
M & C Services Private Limited
112 Robinson Road #05-01
Singapore 068902
AUDITORS
KPMG LLP
Certied Public Accountants
16 Rafes Quay
#22-00 Hong Leong Building
Singapore 048581
PARTNER-IN-CHARGE
Lee Jee Cheng Philip
(Partner from Financial Year Ended 2013)
PRINCIPAL BANKER
China Citic Bank International Limited
8 Marina View
#28-02 Asia Square Tower 1
Singapore 018960
Registration Number : 198502465W
3 Shenton Way
#25-01 Shenton House
Singapore 068805
Tel: (65) 6250 3838 Fax: (65) 6253 8585
url: http://www.sapphirecorp.com.sg
email: info@sapphirecorp.com.sg

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