CIRCULAR DATED 14 DECEMBER 2010 THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt about its contents or the action you should take, you should consult your bank manager, stockbroker, solicitor, accountant or other professional adviser immediately. If you have sold or transferred your shares in the capital of Joyas International Holdings Limited, you should immediately forward this Circular and the attached Notice of the Special General Meeting and Proxy Form to the purchaser or transferee or to the bank, stockbroker or agent through whom the sale or transfer was effected, for onward transmission to the purchaser or transferee. The Singapore Exchange Securities Trading Limited (the “SGX-ST”) assumes no responsibility for the correctness of any of the statements made, reports contained or opinions expressed in this circular.
JOYAS INTERNATIONAL HOLDINGS LIMITED (Incorporated in Bermuda with limited liability) (Company registration no. 38991)
CIRCULAR TO SHAREHOLDERS IN RELATION TO THE APPOINTMENT OF MESSRS BDO LIMITED, CERTIFIED PUBLIC ACCOUNTANTS, HONG KONG AND MESSRS BDO LLP CERTIFIED PUBLIC ACCOUNTANTS, SINGAPORE AS JOINT AUDITORS
IMPORTANT DATES AND TIMES: Latest date and time for lodgement of Proxy Form
:
28 December 2010 at 10.00 a.m.
Date and time of Special General Meeting
:
30 December 2010 at 10.00 a.m.
Place of Special General Meeting
:
Flat A-C, 14/F., Dragon Centre 79 Wing Hong Street Cheung Sha Wan Kowloon, Hong Kong
CONTENTS Page LETTER TO SHAREHOLDERS 1.
INTRODUCTION ......................................................................................................................
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2.
ABOUT BDO LIMITED AND BDO LLP ....................................................................................
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3.
RECOMMENDATION OF AUDIT COMMITTEE........................................................................
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4.
RECOMMENDATION OF DIRECTORS....................................................................................
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5.
SPECIAL GENERAL MEETING ..............................................................................................
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6.
ACTION TO BE TAKEN BY SHAREHOLDERS ........................................................................
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7.
DIRECTORS’ RESPONSIBILITY STATEMENT ........................................................................
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8.
DOCUMENTS AVAILABLE FOR INSPECTION ......................................................................
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NOTICE OF SPECIAL GENERAL MEETING ....................................................................................
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LETTER TO SHAREHOLDERS
JOYAS INTERNATIONAL HOLDINGS LIMITED (Incorporated in Bermuda with limited liability) (Company registration no. 38991)
Board of Directors: Mr Mr Mr Mr Mr Mr
Registered Office:
Lau Chor Beng, Peter, Managing Director and Chairman Cheung Wai Hung, Danny, Executive Director and Deputy Chairman Chan Shui Ki, Executive Director Ong Chor Wei, Non-executive Director Cheung King Kwok, Independent Non-executive Director Lim Siang Kai, Independent Non-executive Director
Canon’s Court 22 Victoria Street Hamilton HM12 Bermuda
14 December 2010
To:
The Shareholders of Joyas International Holdings Limited
Dear Sir or Madam APPOINTMENT OF MESSRS BDO LIMITED, CERTIFIED PUBLIC ACCOUNTANTS, HONG KONG AND MESSRS BDO LLP CERTIFIED PUBLIC ACCOUNTANTS, SINGAPORE AS JOINT AUDITORS 1.
INTRODUCTION As previously announced on 5 October 2010, Joyas International Holdings Limited (the “Company”) had for reasons of engagement economics, on 30 September 2010 received formal notice from its auditors, Messrs HLB Hodgson Impey Cheng, Chartered Accountants, Certified Public Accountants, Hong Kong (“HLB”) that they will be resigning as the auditors of the Company. The Company has sourced for a suitable audit firm to fill the vacancy left by HLB and the Company proposed to appoint Messrs Grant Thornton, Certified Public Accountants, Hong Kong (“Grant Thornton Hong Kong”) as the auditors of the Company. Having considered all relevant circumstances, the Company believes that Grant Thornton Hong Kong is a suitable audit firm to act as the Company’s auditors. In addition, the Company will also benefit from the more competitive fees quoted by Grant Thornton Hong Kong. Subsequent to the Company’s announcement on 5 October 2010, as detailed in section 2 below, Messrs Grant Thornton Hong Kong had recently decided to merge their business with BDO Limited, the BDO member firm in Hong Kong. BDO LLP is the BDO member firm in Singapore. Accordingly, the Directors of the Company are convening a Special General Meeting (“SGM”) to be held on 30 December 2010 at Flat A-C, 14/F., Dragon Centre, 79 Wing Hong Street, Cheung Sha Wan, Kowloon, Hong Kong at 10.00 a.m. to seek the approval of the Company’s shareholders (“Shareholders”) for the appointment of BDO network firms in Hong Kong and Singapore as Joint Auditors of the Company for the financial year ending 31 December 2010. The purpose of this Circular is to provide Shareholders with information pertaining to the aforesaid proposal to be tabled at the SGM.
2.
ABOUT BDO LIMITED AND BDO LLP
2.1
Established in 1949, Grant Thornton Hong Kong has around 600 partners and staff. Grant Thornton Hong Kong has extensive experience in handling capital market work. It has over 100 recurring listed audit clients of which more than 20 are listed on the SGX-ST.
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LETTER TO SHAREHOLDERS Grant Thornton Hong Kong offers a full range of professional business advisory services. Grant Thornton Hong Kong assists its clients across a whole range of service including assurance, business risk services, corporate finance, forensic & investigations, restructuring, investigations & insolvency and tax. In order to cope with its fast expanding business, the business opportunities in the Mainland China and around the region, Grant Thornton Hong Kong has recently decided to merge their business with BDO Limited, the BDO member firm in Hong Kong. BDO is a global accountancy network with over 1,100 offices in 110 countries and 46,000 people providing accounting and advisory services throughout the world. BDO is the world’s fifth largest accounting network. Once all formalities are completed, Grant Thornton Hong Kong will practise in the name of BDO Limited. The enlarged BDO Limited in Hong Kong will have more than 1,000 staff with over 50 partners and approximately 200 clients listed in Hong Kong and overseas. Messrs BDO LLP, Certified Public Accountants, Singapore (“BDO LLP”) is the BDO member firm in Singapore. The services provided by BDO LLP include accounting, audit and assurance, business advisory, taxation, consulting and corporate advisory services. BDO LLP is also the external or internal auditors of several publicly listed companies in Singapore. The Directors note that both BDO Limited and BDO LLP had not provided any services to the Company prior to this proposed appointment of the BDO network firms in Hong Kong and Singapore as the Joint Auditors of the Group. The Directors, having considered the fee structure, the adequacy of the resources and the experience of the BDO network firms in Hong Kong and Singapore as stated above, the number and experience of the supervisory and professional staff to be assigned to the audit of the consolidated financial statements of the Group and BDO’s proposed audit arrangements for the Company and the size and complexity of the Group’s operations, are of the opinion that the BDO network firms in Hong Kong and Singapore will be able to meet the audit requirements of the Company and that Rule 712 of the Listing Manual has been complied with. Further, as Grant Thornton Hong Kong is currently in the process of merging its business with BDO Limited, the Company proposes to appoint the member firms of the BDO network in Hong Kong, BDO Limited, and in Singapore, BDO LLP, to be the Joint Auditors of the Company, to hold office until the next annual general meeting of the Company. 2.2
For purposes of Rule 1203(5) of the Listing Manual:(a)
HLB has confirmed, by way of their letter dated 8 October 2010, that they are not aware of any professional reasons why Grant Thornton Hong Kong, being the new Auditors, should not accept appointment as Auditors;
(b)
the Directors confirm that there were no disagreements with HLB on accounting treatments within the last twelve (12) months from the date of this Circular;
(c)
the Directors confirm that the Company 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; and
(d)
the specific reason for the Proposed Change of Auditors is due to engagement economics, in the light of rising business costs. Accordingly, HLB had on 30 September 2010, given notice to the Directors of their resignation as Auditors. The Proposed Change of Auditors is not due to the dismissal of HLB, or due to HLB declining to stand for election.
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LETTER TO SHAREHOLDERS 2.3
The appointment of BDO network firms in Hong Kong and Singapore as the Joint Auditors of the Group following the resignation of HLB must be approved by Shareholders by way of an ordinary resolution. Where the Proposed Change of Auditors is approved at the SGM, BDO Hong Kong and BDO Singapore will act as the joint Auditors of the Company and the Group with effect from the approval of the same by the Shareholders at the SGM and will hold office until the conclusion of the next annual general meeting of the Company.
3.
RECOMMENDATION OF AUDIT COMMITTEE The proposed change of Auditors has been reviewed and recommended by the Audit Committee, as the Audit Committee note that the proposed change in Auditors will result in an approximately twenty (20) per cent cost savings for the Company. Further, the Directors have on 18 November 2010 obtained the Consent to Act from the BDO Limited and BDO LLP to act as Auditors of the Company for the financial year ending 31 December 2010.
4.
RECOMMENDATION OF DIRECTORS The Directors are of the opinion that the proposed appointment of BDO Limited and BDO LLP as the Joint Auditors of the Company for the financial year ending 31 December 2010 is in the best interests of the Company and the Shareholders. Accordingly, the Directors recommend that Shareholders vote in favour of the Ordinary Resolution in respect of the proposed change of Auditors.
5.
SPECIAL GENERAL MEETING The SGM, notice of which is set out on page 7 of this Circular, will be held on 30 December 2010 at Flat A-C, 14/F., Dragon Centre, 79 Wing Hong Street, Cheung Sha Wan, Kowloon, Hong Kong at 10.00 a.m. for the purpose of considering and, if thought fit, passing with or without modification the Ordinary Resolution set out in the Notice of SGM.
6.
ACTION TO BE TAKEN BY SHAREHOLDERS If a Shareholder is unable to attend the SGM and wishes to appoint a proxy to attend and vote at the SGM on his behalf, he must complete, sign and return the attached Proxy Form in accordance with the instructions printed thereon as soon as possible and, in any event, so as to arrive at the office of the Company’s Share Registrar & Transfer Agent in Singapore, Boardroom Corporate & Advisory Services Pte. Ltd., at 50 Raffles Place, #32-01 Singapore Land Tower, Singapore 048623 not less than forty-eight (48) hours before the time fixed for the SGM. The completion and return of a Proxy Form by a Shareholder does not preclude him from attending and voting in person at the SGM if he so wishes. A Depositor shall not be regarded as a member of the Company entitled to attend the SGM to speak and vote thereat unless his name appears in the Depository Register forty-eight (48) hours before the SGM.
7.
DIRECTORS’ RESPONSIBILITY STATEMENT The directors of the Company collectively and individually accept full responsibility for the accuracy of the information given in this Circular and confirm that, to the best of their knowledge and belief, this Circular constitutes full and true disclosure of all material facts about the proposed appointment of BDO Limited and BDO LLP, BDO member firms in Hong Kong and Singapore, respectively, as the Joint Auditors of the Company, and the directors are not aware of any facts the omission of which would make any statement in this Circular misleading.
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LETTER TO SHAREHOLDERS 8.
DOCUMENTS AVAILABLE FOR INSPECTION Copies of the following documents may be inspected by Shareholders at the registered office of the Company at Canon’s Court, 22 Victoria Street, Hamilton HM 12, Bermuda during normal business hours from the date of this Circular up to and including the date of the SGM:(a)
the Memorandum of Association and Bye-laws of the Company;
(b)
notice of resignation as Auditors dated 30 September 2010 from HLB;
(c)
HLB’s professional clearance letter to Grant Thornton Hong Kong dated 8 October 2010;
(d)
Consent to Act from the BDO Limited and BDO LLP to act as Joint Auditors dated 18 November 2010.
Yours faithfully, For and on behalf of the Board of Directors of Joyas International Holdings Limited
Lau Chor Beng, Peter Managing Director and Chairman
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NOTICE OF SPECIAL GENERAL MEETING
JOYAS INTERNATIONAL HOLDINGS LIMITED (Incorporated in Bermuda with limited liability) (Company registration no. 38991)
NOTICE IS HEREBY GIVEN THAT a Special General Meeting of the Company will be held at Flat A-C, 14/F., Dragon Centre, 79 Wing Hong Street, Cheung Sha Wan, Kowloon, Hong Kong on 30 December 2010 at 10.00 a.m., to consider and if thought fit, passing with or without any modification the following resolution which will be proposed as an Ordinary Resolution:ORDINARY RESOLUTION APPOINTMENT OF NEW AUDITORS “THAT Messrs BDO Limited, Certified Public Accountants, Hong Kong and Messrs BDO LLP, Certified Public Accountants, Singapore be and are hereby appointed Joint Auditors of the Company, in place of Messrs HLB Hodgson Impey Cheng, Chartered Accountants, Certified Public Accountants, Hong Kong to hold office until the conclusion of the next Annual General Meeting, at a remuneration to be agreed between the Directors and Messrs BDO Limited and BDO LLP.”
BY ORDER OF THE BOARD
Tan Min-Li Lui Mui Ching Company Secretaries 14 December 2010 Singapore
NOTES:1.
With the exception of The Central Depository (Pte) Limited (who may appoint more than two proxies), a member of the Company who is entitled to attend and vote at the Special General Meeting (“SGM”) is entitled to appoint no more than two proxies to attend and vote in his stead and a proxy need not be a member of the Company.
2.
A Depositor whose name appears in the Depository Register (both terms as defined in Section 130A of the Companies Act (Cap. 50) of Singapore) and who wishes to attend and vote at the SGM, or appoint a proxy to attend and vote on his behalf thereat, should complete, sign and return the attached proxy form in accordance with the instructions printed thereon. A Depositor that has appointed a proxy to attend and vote at the SGM on his behalf may attend and vote in person at the SGM if he so wishes.
3.
All proxy forms must be lodged at the office of the Company’s Share Registrar & Transfer Agent in Singapore, Boardroom Corporate & Advisory Services Pte. Ltd. at 50 Raffles Place, #32-01 Singapore Land Tower, Singapore 048623 not later than 48 hours before the time appointed for holding the SGM.
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