CIRCULAR DATED 16 JULY 2014 THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. PLEASE READ IT CAREFULLY. If you are in any doubt about the contents of this Circular or the action you should take, you should consult your stockbroker, bank manager, solicitor, accountant or other professional adviser immediately. If you have sold or transferred all your shares in Stratech Systems Limited (the Company ) held through The Central Depository (Pte) Limited ( CDP ), you need not forward this Circular to the purchaser or transferee as arrangements will be made by CDP for a separate Circular to be sent to the purchaser or transferee. If you have sold or transferred all your ordinary shares in the capital of the Company through other means, you should at once hand this Circular to the purchaser or transferee or to the bank, stockbroker or agent through whom you effected the sale, for onward transmission to the purchaser or transferee. The Singapore Exchange Securities Trading Limited assumes no responsibility for the correctness of any of the statements made, reports contained or opinions expressed in this Circular. STRATECH SYSTEMS LIMITED (Incorporated in Singapore) (Company Registration Number: 199608251Z) CIRCULAR TO SHAREHOLDERS IN RELATION TO the PROPOSED CHANGE OF AUDITORS FROM RT LLP TO Baker Tilly TFW LLP IMPORTANT DATES AND TIMES: Last date and time for lodgement of Proxy Form : 29 July 2014 at 4 p.m. Date and time of Annual General Meeting : 31 July 2014 at 4 p.m. Place of Annual General Meeting : Function Room 1 31 International Business Park Level 1, Creative Resource (Main Lobby), Singapore 609921
CONTENTS HEADINGS PAGE DEFINITIONS...3 1. INTRODUCTION...5 2. THE PROPOSED CHANGE OF AUDITORS...5 3. DIRECTORS RECOMMENDATION...7 4. AUDIT AND RISK MANAGEMENT COMMITTEE S RECOMMENDATION...7 5. ANNUAL GENERAL MEETING...7 6. ACTION TO BE TAKEN BY SHAREHOLDERS...8 7. DIRECTORS RESPONSIBILITY STATEMENT...8 8. DOCUMENTS AVAILABLE FOR INSPECTION...8 2
DEFINITIONS Except where the context otherwise requires, the following definitions apply throughout this Circular: AGM : Annual general meeting of the Company to be held on Thursday, 31 July 2014 at 4.00 p.m.]. Articles or Articles of Association Audit and Risk Management Committee : The Articles of Association of the Company, as amended, supplemented or modified from time to time. : The audit and risk management committee of the Company comprising Chew Hai Chwee, Sajjad Ahmad Akhtar and Chew Heng Ching. Auditors : The auditors of the Company for the time being. Baker Tilly TFW : Baker Tilly TFW LLP having its registered office at 15, Beach Road, #03-10, Singapore 189677. Board : The Board of Directors of the Company as at the date of this Circular. CDP : The Central Depository (Pte) Limited. Companies Act : Companies Act (Chapter 50) of Singapore, as amended or modified from time to time. Company : Stratech Systems Limited. Directors : The directors of the Company as at the date of this Circular. FY or Financial Year : Financial year ending 31 March, as the case may be. Group : The Company and its subsidiaries. Listing Manual : The listing manual of the SGX-ST, as amended or modified from time to time. Memorandum : The Memorandum of Association of the Company. month : A calendar month. Proposed Change of Auditors : The proposed change of auditors of the Company from RT to Baker Tilly TFW. RT : RT LLP (formerly LTC LLP) having its registered office at 1 Raffles Place, #17-02, One Raffles Place, Singapore 048616. SGX-ST : Singapore Exchange Securities Trading Limited. Shareholders : Registered holders of Shares in the register of members of the Company, except that where CDP is the registered holder, the term Shareholders shall, in relation to such Shares, mean the Depositors who have Shares entered against their names in the Depository Register. Any reference to Shares held by or shareholdings of Shareholders shall include Shares standing to the credit of their respective Securities Account. 3
DEFINITIONS Shares : Ordinary shares in the share capital of the Company. The terms Depositor, Depository Register and Depository Agent 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. Words importing the masculine gender shall, where applicable, include the feminine and neuter genders and vice versa. References to persons shall 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 any statutory modification thereof and used in this Circular shall have the meaning assigned to it under the Companies Act or any statutory modification thereof, as the case may be. Any reference to a time of day in this Circular shall be a reference to Singapore time unless otherwise stated. 4
STRATECH SYSTEMS LIMITED (Incorporated in Singapore) (Company Registration Number: 199608251Z) Directors: Registered Office: David Chew Khien Meow (Executive Chairman) 31 International Leong Sook Ching (Executive Director and Chief Corporate Officer) Business Park Sajjad Ahmad Akhtar (Independent Director) #02-02 Chew Hai Chwee (Independent Director) Creative Resource Chew Heng Ching (Independent Director) Singapore 609921 Lim Kim Choon (Non-independent Non-Executive Director) 16 July 2014 To: The Shareholders of Stratech Systems Limited Dear Sir/Madam, THE PROPOSED CHANGE OF AUDITORS 1. INTRODUCTION The Directors propose to seek Shareholders approval at its forthcoming AGM to be held at Function Room 1, 31 International Business Park, Level 1, Creative Resource (Main Lobby), Singapore 609921 on Thursday, 31 July 2014 at 4.00 p.m.]in relation to the Proposed Change of Auditors. The purpose of this Circular is to provide Shareholders with the relevant information relating to the Proposed Change of Auditors and to seek Shareholders approval for the Ordinary Resolution relating to the same as set out in the notice of the AGM. 2. THE PROPOSED CHANGE OF AUDITORS 2.1 Rationale for the Proposed Change of Auditors The Company s existing auditors, RT, have been the Auditors since FY 2007. RT was re-appointed as Auditors at the last AGM held on 31 July 2013. RT has been the Auditors for the past eight (8) Financial Years. Following its continuing review of the corporate governance practices of the Company and in order that the Company may tap into the different perspectives and views that new auditors may bring to the Group, the Audit and Risk Management Committee invited proposals from five (5) audit firms to provide audit services to the Group. Pursuant to the review and having interviewed the five (5) audit firms, the Audit and Risk Management Committee has recommended the Proposed Change of Auditors. A renewal of this nature is also indicative of the Company s efforts to ensure that there would be no actual or perceived issues of independence of the auditors of the Company for good corporate governance. The Board, after reviewing the credentials of five (5) audit firms, accepted the Audit and Risk Committee s recommendation for the appointment of Baker Tilly TFW in place of RT, subject to the approval of the Shareholders at the AGM. In this regard, the Proposed Change of Auditors has been discussed with RT and RT has given notice to the Directors of their withdrawal of consent to act as Auditors on 7 July 2014, and Baker Tilly TFW has given their consent to be appointed as the auditors on 7 July 2014, subject to the approval of the Shareholders at the AGM. The withdrawal to act as Auditors of RT and the 5
appointment of Baker Tilly TFW will take effect upon and subject to obtaining the approval of the Shareholders at the AGM. 2.2 Information on Baker Tilly TFW Baker Tilly TFW is registered with the Accounting and Corporate Regulatory Authority of Singapore and is an independent member firm of Baker Tilly International. Baker Tilly International, a fast growing network of professional accounting firms, is represented by 161 independent firms in over 137 countries. More information about Baker Tilly International is provided at www. bakertillyinternational.com. In Singapore, Baker Tilly TFW has 12 partners, 2 directors and a staff strength of over 200. Baker Tilly TFW offers business services such as assurance, tax consulting, corporate advisory, corporate governance and risk management services, accounting and corporate secretarial services. More information about Baker Tilly TFW is provided at Baker Tilly TFW s website at www.bakertillytfw.com. Mr Sim Guan Seng ( Mr Sim ) will be the audit engagement partner assigned to the audit of the Group. Mr Sim graduated from the National University of Singapore and is a practicing member of the Institute of Singapore Chartered Accountants. Mr Sim is a member of the Certified Internal Auditor (CIA), Institute of Internal Auditors (Singapore Chapter). Mr Sim also serves on the Singapore QP Development Panel that developed the Singapore QP, the Finance Board of the Diocese of Singapore, and the Audit Committee for NCC Research Fund and Community Cancer Fund. Mr Sim is the managing partner of Baker Tilly TFW and he has over 25 years of audit experience in Singapore with international accounting firms and has extensive experience in the audit of local, multinational companies and listed companies in diverse industries. 2.3 Opinion of the Audit and Risk Management Committee The Audit and Risk Management Committee has reviewed and deliberated, and after taking into consideration the suitability of Baker Tilly TFW and compliance with the Listing Manual, has recommended the Proposed Change of Auditors. 2.4 Opinion of the Directors The Directors have taken into account the Audit and Risk Management Committee s recommendation and considered the following factors: (a) (b) (c) (d) (e) the adequacy of the resources and experience of Baker Tilly TFW; the audit engagement partner assigned to the audit; the other audit engagements of Baker Tilly TFW; the size and complexity of the Group s operations; and the number and experience of supervisory and professional staff assigned to the audit of the financial statements of the Group, and are of the opinion that Baker Tilly TFW will be able to meet the audit requirements of the Group under Rule 712 of the Listing Manual. Accordingly, the Directors recommend the appointment of Baker Tilly TFW as the auditors of the Company in place of RT. 6
2.5 Rule 1203(5) of the Listing Manual In accordance with Rule 1203(5) of the Listing Manual, the Company confirms that: (a) (b) there were no disagreements with RT on accounting treatments within the last 12 months; it is not aware of any circumstances connected with the Proposed Change of Auditors that should be brought to the attention of the Shareholders which has not been disclosed in this Circular; (c) the specific reasons for the Proposed Change of Auditors are as disclosed in section 2.1 above; and (d) it is in compliance with Rule 712 and Rule 715 of the Listing Manual in relation to the appointment of Baker Tilly TFW. In accordance with Rule 1203(5) of the Listing Manual, RT has confirmed to Baker Tilly TFW, by way of their letter dated 7 July 2014, that it is not aware of any professional reason why Baker Tilly TFW should not accept the appointment as auditors of the Company. 2.6 Rule 715 of the Listing Manual Following and subject to the approval of the Shareholders for the Proposed Change of Auditors, Baker Tilly TFW will become the auditors of the Company in place of RT. It is the intention of the Board, upon the recommendation of the Audit and Risk Management Committee, that subject to the approval of the Shareholders being obtained for the Proposed Change of Auditors at the AGM, and following the appointment of Baker Tilly TFW as the auditors of the Company, the auditors for the Company s (a) Singapore-incorporated subsidiaries and significant associated companies; and (b) significant foreign-incorporated subsidiaries and associated companies, would be changed to Baker Tilly TFW as well. The Board and the Audit and Risk Management Committee of the Company are satisfied that the appointment of Baker Tilly TFW aforementioned would not compromise the standard and effectiveness of the audit of the Group. 3. DIRECTORS RECOMMENDATION Having 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. Accordingly, the Directors unanimously recommend that the Shareholders vote in favour of the ordinary resolution in respect of the Proposed Change of Auditors at the AGM. 4. AUDIT AND RISK MANAGEMENT COMMITTEE S RECOMMENDATION The Audit and Risk Management Committee has reviewed and deliberated on the Proposed Change of Auditors and recommends the same for approval after having satisfied itself of the suitability of Baker Tilly TFW and the requirements of the Listing Manual. 5. ANNUAL GENERAL MEETING The AGM, notice of which is set out in the Annual Report 2014, will be held at Function Room 1, 31 International Business Park, Level 1, Creative Resource (Main Lobby), Singapore 609921 on Thursday, 31 July 2014 at 4.00 p.m. for the purpose of considering, and if thought fit, passing the Ordinary Resolution set out in the notice of AGM. 7
6. ACTION TO BE TAKEN BY SHAREHOLDERS Shareholders who are unable to attend the AGM and who wish to appoint a proxy to attend and vote at the AGM on their behalf should complete, sign and return the proxy form attached to the Annual Report 2014 in accordance with the instructions printed thereon as soon as possible and in any event so as to arrive at the Company s registered address at 31 International Business Park, #02-02, Singapore 609921, not less than 48 hours before the time fixed for the AGM. The appointment of a proxy by a Shareholder does not preclude him from attending and voting in person at the AGM should he subsequently decide to do so, although the appointment of the proxy shall be deemed to be revoked by such attendance. A proxy need not be a Shareholder of the Company. A Depositor shall not be regarded as a Shareholder entitled to attend the AGM and to speak and vote thereat unless he is shown to have Shares entered against his name in the Depository Register, as certified by the CDP, as at 48 hours before the AGM. 7. DIRECTORS RESPONSIBILITY STATEMENT The Directors collectively and individually accept full responsibility for the accuracy of the information given in this Circular and confirm after making all reasonable enquiries that, to the best of their knowledge and belief, this Circular constitutes full and true disclosure of all material facts about the Proposed Change of Auditors, the Company and its subsidiaries, and the Directors are not aware of any facts the omission of which would make any statement in this Circular misleading. Where information in this Circular has been extracted from published or otherwise publicly available sources or obtained from a named source, the sole responsibility of the Directors has been to ensure that such information has been accurately and correctly extracted from those sources and/or reproduced in this Circular in its proper form and context. 8. DOCUMENTS AVAILABLE FOR INSPECTION Copies of the following documents are available for inspection at the registered office of the Company during normal business hours on any weekday (public holidays excepted) up to and including the date of the AGM: (a) (b) the Memorandum and Articles of Association of the Company; the letter from RT dated 7 July 2014, setting out their withdrawal to act as Auditors; (c) the professional clearance letter issued by RT to Baker Tilly TFW dated 7 July 2014; (d) the consent to act as auditors of the Company from Baker Tilly TFW dated 7 July 2014; and (e) the Annual Report of the Company for FY 2014. Yours faithfully For and on behalf of the Board of Directors of STRATECH SYSTEMS LIMITED David K.M. Chew Executive Chairman 8