CIRCULAR DATED 14 OCTOBER 2008 THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt as to the action you should take, you should consult your stockbroker, banker, solicitor, accountant or other professional adviser immediately. If you have sold all your shares in the capital of K Plas Holdings Limited, you should immediately forward this Circular, the enclosed Notice of Extraordinary General Meeting and the Proxy Form to the purchaser or to the stockbroker, bank or agent through whom you effected the sale for onward transmission to the purchaser. The Singapore Exchange Securities Trading Limited assumes no responsibility for the correctness of any statement made, opinion expressed or report contained in this Circular. K PLAS HOLDINGS LIMITED (Company Registration No. 200300326D) (Incorporated in the Republic of Singapore on 9 January 2003) CIRCULAR TO SHAREHOLDERS IN RELATION TO THE PROPOSED CHANGE OF AUDITORS IMPORTANT DATES AND TIMES:- Last date and time for lodgment of Proxy Form : 29 October 2008 at 9.30 a.m. Date and time of Extraordinary General Meeting : 31 October 2008 at 9.30 a.m. Place of Extraordinary General Meeting : 18 Cross Street, 8 th Floor Marsh & McLennan Centre, Singapore 048423
CONTENTS Page DEFINITIONS... 3 LETTER TO SHAREHOLDERS 1. INTRODUCTION... 5 2. PROPOSED CHANGE OF AUDITORS... 5 3. INFORMATION ON BAKER TILLY... 6 4. AUDIT COMMITTEE S STATEMENT... 6 5. EXTRAORDINARY GENERAL MEETING... 6 6. ACTION TO BE TAKEN BY SHAREHOLDERS... 6 7. DIRECTORS RECOMMENDATIONS... 7 8. DIRECTORS RESPONSIBILITY STATEMENT... 7 9. DOCUMENTS AVAILABLE FOR INSPECTION... 7 NOTICE OF EXTRAORDINARY GENERAL MEETING... 8 PROXY FORM 2
DEFINITIONS In this Circular, the following definitions shall apply throughout unless the context otherwise requires:- Audit Committee : The audit committee of the Company, comprising Leong Kin Weng, Wong Kok Hoe and Chin Fah Auditors : The auditors of the Company for the time being Baker Tilly : Messrs Baker Tilly TFWLCL Board : The board of directors of the Company as at the date of this Circular CDP : The Central Depository (Pte) Limited Chio Lim : Messrs RSM Chio Lim Circular : This circular to Shareholders dated 14 October 2008 Companies Act : The Companies Act, Chapter 50 of Singapore, as amended or modified from time to time Company : K Plas Holdings Limited Directors : The directors of the Company as at the date of this Circular EGM : The extraordinary general meeting of the Company to be held on 31 October 2008 at 9.30 a.m., notice of which is set out on page 8 of this Circular Group : The Company and its subsidiaries Listing Manual : Listing Manual of the SGX-ST, as amended or modified from time to time Proposed Change of Auditors : The proposed change of auditors of the Company from Chio Lim to Baker Tilly SGX-ST : Singapore Exchange Securities Trading Limited Shareholders : Registered holders of Shares in the register of members of the Company, except where the registered holder is CDP, the term Shareholders shall, in relation to such Shares, mean the Depositors whose securities accounts maintained with CDP are credited with Shares Shares : The ordinary shares in the share capital of the Company The words Depositor and Depository Register shall have the meanings ascribed to them respectively in Section 130A of the Companies Act. Words importing the singular shall, where applicable, include the plural and vice versa, and words importing the masculine gender shall, where applicable, include the feminine and neuter genders and vice versa. 3
Words importing persons include corporations. Any reference in this circular to any enactment is a reference to that enactment as for the time being amended or re-enacted. Any word defined under the Companies Act or the Listing Manual or any modification thereof and not otherwise defined in this Circular shall have the meaning assigned to it under the Companies Act or the Listing Manual or any modification thereof, as the case may be, unless otherwise provided. Any reference to a time of day in this Circular shall be a reference to Singapore time. 4
K PLAS HOLDINGS LIMITED (Company Registration No. 200300326D) (Incorporated in the Republic of Singapore on 9 January 2003) Directors:- Registered Office:- Chin Fook Lai (Non-Executive Chairman) 19 Loyang Way Chan Siew Lim (Managing Director) #06-22 Chin Fah (Non-Executive Director) Singapore 508724 Leong Kin Weng (Independent Director) Wong Kok Hoe (Independent Director) Date: 14 October 2008 To: The Shareholders of K Plas Holdings Limited Dear Sir/Madam THE PROPOSED CHANGE OF AUDITORS 1. INTRODUCTION The Directors are convening an EGM to seek the approval of the Shareholders for the Proposed Change of Auditors. The purpose of this Circular is to provide Shareholders with information pertaining to the Proposed Change of Auditors. The approval of Shareholders for the Proposed Change of Auditors will be sought at the EGM to be held on 31 October 2008 at 9.30 a.m. at 18 Cross Street, 8 th Floor Marsh & McLennan Centre, Singapore 048423. 2. PROPOSED CHANGE OF AUDITORS The Group s existing auditors, Chio Lim, have been the auditors of the Group since the Company s listing on the SGX-Sesdaq (now known as Catalist) in 2003. On 19 August 2008, the Company engaged Stone Forest Corporate Advisory Pte. Ltd. ( SFCA ), an affiliate of Chio Lim, to provide certain non-audit services to the Group. The amount of fee payable to SFCA may be significant and it is contingent upon the successful completion of the scope of services to be provided by it. In view of the magnitude of the non-audit services provided by SFCA, the potential impairment on the independence of Chio Lim as the Auditors and for good corporate governance, Chio Lim had, on 11 September 2008, withdrawn their consent to act as the Auditors of the Company and their resignation would take effect from the extraordinary general meeting of the Company to appoint a replacement Auditors. In this connection, the Directors had obtained a fee proposal from Baker Tilly for audit of the Group s financial statements for the year ending 31 December 2008. The Directors have considered, in consultation with the Audit Committee, the adequacy of resources and experience as well as the audit engagements of Baker Tilly and in particular, their proposed audit arrangements for the Group and the number and experience of supervisory and professional staff proposed to be assigned to the audit of the financial statements of the Group. The Directors are satisfied that Baker Tilly would be able to meet the audit requirements of the Group and that Rule 712 of the Listing Manual has been complied with. 5
Baker Tilly had, on 18 September 2008, given their written consent to be appointed as the Auditors of the Company. Pursuant to Section 205(15) of the Companies Act, the resignation of Chio Lim will only take effect upon the appointment of Baker Tilly at a general meeting to be convened for this purpose. The appointment of Baker Tilly would therefore, take effect upon approval of the Shareholders being obtained at the EGM for the Proposed Change of Auditors. In compliance with Rule 1203(5) of the Listing Manual, the Directors confirm that:- (a) there were no disagreements with Chio Lim on accounting treatments within the last 12 months of the date of this Circular; (b) (c) the Company is not aware of any circumstances connected with the Proposed Change of Auditors that ought to be brought to the attention of Shareholders; and the specific reason for the Proposed Change of Auditors is to avoid any potential impairment on the independence of the existing Auditors of the Company. Chio Lim has confirmed to Baker Tilly that it is not aware of any professional reasons why Baker Tilly should not accept appointment as Auditors of the Company. The Proposed Change of Auditors has been deliberated upon extensively and recommended by the Audit Committee and the Board for approval by Shareholders. 3. INFORMATION ON BAKER TILLY With 9 partners and staff strength of about 180, Baker Tilly specialises in providing an integrated range of business services including audit, tax consulting, internal audit, corporate advisory, accounting and corporate secretarial services on a local, regional and international basis. More information can be obtained from www.tfwlcl.com. Baker Tilly is an independent member of Baker Tilly International ( BTI ) with its headquarters located in London, United Kingdom, the 8 th largest network of accounting firms in the world by fee income. BTI is represented by 126 firms in about 138 countries with a global aggregate fee income of about US$2.3 billion and over 21,900 staff worldwide. More information can be obtained from www.bakertillyinternational.com. 4. AUDIT COMMITTEE S STATEMENT The Audit Committee has reviewed and deliberated on the Proposed Change of Auditors and recommended the same for approval by the Board after taking into consideration the suitability of Baker Tilly and compliance with the requirements of the Listing Manual. 5. EXTRAORDINARY GENERAL MEETING The EGM, notice of which is set out on page 8 of this Circular, will be held on 31 October 2008 at 9.30 a.m. at 18 Cross Street, 8 th Floor Marsh & McLennan Centre, Singapore 048423 for the purpose of considering and, if thought fit, passing with or without modifications, the ordinary resolution set out in the notice of EGM. 6. ACTION TO BE TAKEN BY SHAREHOLDERS Shareholders who are unable to attend the EGM and who wish to appoint a proxy to attend on their behalf are requested to complete, sign and return the Proxy Form attached to this Circular in accordance with the instructions printed thereon as soon as possible and, in any event, so as to reach the registered office of the Company not less than 48 hours before the time fixed for the EGM. The completion and lodgment of the Proxy Form by a Shareholder will not prevent him from attending and voting at the EGM in person if he so wishes. 6
A Depositor shall not be regarded as a member of the Company entitled to attend the EGM and to speak and vote thereat unless his name appears on the Depository Register at least 48 hours before the EGM. 7. DIRECTORS RECOMMENDATIONS Having fully considered the rationale and benefit of the Proposed Change of Auditors, the Directors are of the opinion that the Proposed Change of Auditors is in the best interests of the Company and, accordingly, recommend that Shareholders vote in favour of the ordinary resolution as set out in the notice of EGM in this Circular. 8. DIRECTORS RESPONSIBILITY STATEMENT This Circular has been seen and approved by all Directors who collectively and individually accept responsibility for this Circular and confirm, after having made all reasonable enquiries, that to the best of their knowledge and belief, the facts stated and opinions expressed in this Circular are fair and accurate in all material respects as at the date of this Circular and that there are no material facts the omission of which would make any statement in this Circular misleading. Where any information contained in this Circular has been extracted from published or otherwise publicly available sources, the sole responsibility of the Directors has been to ensure that such information has been accurately and correctly extracted from these sources. 9. DOCUMENTS AVAILABLE FOR INSPECTION The following documents may be inspected at the registered office of the Company at 19 Loyang Way #06-22 Singapore 508724 during normal business hours from the date hereof up to and including the date of the EGM:- (a) (b) (c) the Memorandum and Articles of Association of the Company; the notice of resignation as Auditors dated 11 September 2008 from Chio Lim; and the letter of consent to act as Auditors dated 18 September 2008 from Baker Tilly. Yours faithfully for and on behalf of the Board of Directors K PLAS HOLDINGS LIMITED Chin Fook Lai Non-Executive Chairman 7
K PLAS HOLDINGS LIMITED (Company Registration No. 200300326D) (Incorporated in the Republic of Singapore on 9 January 2003) NOTICE OF EXTRAORDINARY GENERAL MEETING ORDINARY RESOLUTION PROPOSED CHANGE OF AUDITORS That the resignation of Messrs RSM Chio Lim as Auditors of the Company be and is hereby accepted and that Messrs Baker Tilly TFWLCL be and is hereby appointed as Auditors of the Company in place of Messrs RSM Chio Lim, to hold office until the conclusion of the next annual general meeting of the Company, at a fee to be agreed between the Directors of the Company and Messrs Baker Tilly TFWLCL. By order of the Board of Directors Maureen Low Mei Mei Chong Kian Lee Company Secretaries 14 October 2008 Singapore NOTICE IS HEREBY GIVEN that an Extraordinary General Meeting of K Plas Holdings Limited (the Company ) will be held at 18 Cross Street, 8 th Floor Marsh & McLennan Centre, Singapore 048423 on 31 October 2008 at 9.30 a.m. for the purpose of considering and, if thought fit, passing with or without modifications, the following ordinary resolution:- Notes:- 1. A member of the Company entitled to attend and vote at the Extraordinary General Meeting is entitled to appoint a proxy or proxies (not more than two) to attend and vote on his/her behalf. A proxy need not be a member of the Company. 2. The instrument appointing a proxy or proxies must be under the hand of the appointor or of his/her 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 common seal or under the hand of an officer or attorney duly authorised. 3. The instrument appointing a proxy or proxies must be deposited at the registered office of the Company at 19 Loyang Way #06-22 Singapore 508724 not less than 48 hours before the time fixed for holding the Extraordinary General Meeting. 8
K PLAS HOLDINGS LIMITED (Company Registration No. 200300326D) (Incorporated in the Republic of Singapore on 9 January 2003) PROXY FORM FOR EXTRAORDINARY GENERAL MEETING IMPORTANT: 1. For investors who have used their CPF monies to buy shares in the capital of K Plas Holdings Limited, this Circular is forwarded to them at the request of their 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 ineffective for all intents and purposes if used or purported to be used by them. I/We, of being a member/members of K PLAS HOLDINGS LIMITED hereby appoint:- (Name) (Address) Name Address NRIC / Passport Proportion of Number Shareholdings (%) and/or (delete as appropriate) Name Address NRIC / Passport Proportion of Number Shareholdings (%) as my/our proxy/proxies to attend and vote for me/us on my/our behalf at the Extraordinary General Meeting of the Company to be held at 18 Cross Street, 8 th Floor Marsh & McLennan Centre, Singapore 048423 on 31 October 2008 at 9.30 a.m. and at any adjournment thereof. I/We direct my/our proxy/proxies to vote for or against the Ordinary Resolution to be proposed at the Extraordinary General Meeting as indicated hereunder. If no specific direction as to voting is given, the proxy/proxies will vote or abstain from voting at his/their discretion, as he/they will on any other matter arising at the Extraordinary General Meeting. ORDINARY RESOLUTION For Against To approve the change of auditors of the Company from Messrs RSM Chio Lim to Messrs Baker Tilly TFWLCL (Please indicate with a cross [X] in the space provided whether you wish your vote to be cast for or against the Resolution as set out in the Notice of the Meeting.) Signed this day of 2008 Total number of Shares in: No. of Shares (a) (b) CDP Register Register of Members Signature of Shareholder(s)/Common Seal of Corporate Shareholder IMPORTANT: PLEASE READ NOTES OVERLEAF
NOTES:- 1. Please insert the total number of shares held by you. If you have shares entered against your name in the Depository Register (as defined in Section 130A of the Companies Act, Chapter 50), you should insert that number. If you have shares registered in your name in the Register of Members of the Company, you should insert that number. If you have shares entered against your name in the Depository Register and registered in your name in the Register of Members, you should insert the aggregate number. If no number is inserted, this form of proxy will be deemed to relate to all the shares held by you. 2. A member entitled to attend and vote at a meeting of the Company is entitled to appoint not more than two proxies to attend and vote on his behalf. A proxy need not be a member of the Company. 3. The instrument appointing a proxy or proxies must be deposited at the Company s registered office at 19 Loyang Way #06-22 Singapore 508724, not less than 48 hours before the time set for the meeting. 4. Where a member appoints more than one proxy, the appointments shall be invalid unless he specifies the proportion of his holding to be represented by each proxy. 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 under its common seal or under the hand of its officer or attorney duly authorised. 6. Where an instrument appointing a proxy is signed on behalf of the appointor by an attorney, the power of attorney (or other authority) or a duly certified copy thereof must (failing previous registration with the Company) be lodged with the instrument of proxy, failing which the instrument may be treated as invalid. 7. A corporation which is a member may authorise by resolution of its directors or other governing body such person as it thinks fit to act as its representative at the meeting, in accordance with Section 179 of the Companies Act, Chapter 50. 8. The Company shall be entitled to reject an instrument of proxy which is incomplete, improperly completed, illegible or where the true intentions of the appointor are not ascertainable from the instructions of the appointor specified on the instrument of proxy. In addition, in the case of shares entered in the Depository Register, the Company may reject an instrument of proxy if the member, being the appointor, is not shown to have shares entered against his name in the Depository Register as at 48 hours before the time appointed for holding the meeting, as certified by The Central Depository (Pte) Ltd to the Company.
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