MICRO-MECHANICS (HOLDINGS) LTD. 
By
Minutes of the Seventeenth Annual Generai Meeting of the Company held at NTUC Centre, Level
8, Room 801, One Marina Boulevard, Singapore 018989 on Monday, 28 October 2013 at 3.00 p.m.
The Chairman, Ms Sumitri Menon chaired the Annual Generai Meeting ("AGM") and as a quorum was present, the meeting was called to arder. Ms Menon welcomed ali who attended the AGM.
After the Directors introduced themselves to the shareholders, the Chairman invited the Chief Executive Officer, Mr Christopher Borch (''CEO") to present his report on the full year results of the Group. The CEO informed that since the announcement on the first quarter financial results of the Group for FY2014 was released to SGX earlier that day, he would also include a report on the Group's first quarter financial performance for FY2014 in his presentation.
The CEO together with the Chief Operating Officer, Mr Low Ming Wah ("COO") and the Chief Financial Officer, Mr Chow Kam Wing ("CFO") went through the presentation slides which covered "Corporale Highlights", "Financial Review" and "Outlook". These presentation slides are available from the announcement made by the Company after the AGM.
The CEO presented a roadmap on how the Group had progressed for the past 30 years from a small company in Singapore to become a public listed corporation with a global presence in Singapore, Malaysia, China, Thailand, Philippines, USA, Taiwan, Indonesia and Europe. The financial performance of the Group's 2 business divisions in Semiconductor Tooling business and Customer Machining & Assembly business ("CMA") in FY2013 and 1QFY2014 were also highlighted. On the key operating strategies of the Group, the CEO commented that against a volatile, uncertain and competitive environment, the Group would need to stay focus and adopt a clear approach for the long term in arder to achieve sustainable growth. In doing so, he informed that the Group would continue to embark and deploy its resources in 3 main areas, firstly investment in high-tech and state of art technology to bring about development of automated processes that are repeatable, scalable and cast effective for less labour intensive operations. An amount of S$4million for FY2014 had been planned and set aside as capitai investment in additional equipment to enhance automation. Secondly, investment in the people and equip them with the required technical knowledge to enhance efficiency and productivity and thirdly, to create customers' value coupled with a mission objective to deliver "Perfect parts and tools, on lime, every lime based on scalable, repeatable and cost-effective processes".
In addition, the CEO informed that with the adoption of the core competencies and implementation of initiatives such as 24/7 machining, il had brought forth improved results in the Group's performance and productivity level resulting in a graduai reduction of the Group's headcount by aver 20% from a total of 601 at the beginning of FY2012 to a current headcount of 471 by end of
1QFY2014. On transparency and governance rating, the CFO reported that the Group had
climbed from 22"d position last year to the current 181
position out of 664 companies listed on the
Stock Exchange. He added that based on the latest report on Governance and Transparency lndex ("GTI") released on 2 August 2013, the Group's GTI had improved from 71 points to 82 points.
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Micro-Mechanics (Holdings) Ltd.
Minutes of the 17'" Annua! Generai Meeting
Page2
Q&A on the presentation slides:-
Question: Reference was made to presentation slide 11 entitled "Shareholder Value - Total dividends of 31.9 cents per share since listing (- S$44.2 million in total)". As at the end of FY2013, the Group's Net Tangible Assets ("NTA") stood at about 28 cents per share. Query on whether the NTA, without imputing dividends, had been flat throughout the years and whether the Group had adopted an approach in rewarding its shareholders based on the value and return of equity generated annually. The shareholder who posed the question also commended the Group's healthy and efficient cash position as at the end of FY2013.
Reply: CFO confirmed that the NTA had been flat throughout the years. CEO pointed aut that the Group had adopted the same practice as regards dividend payment throughout the years. He added that the cash position of the Group had improved from S$9 million as at 30 June 2013 to S$11 million as at 1QFY2014 without any bank borrowings to-date.
Question: Another shareholder commended the good track record of the Group's disclosure and corporale governance practices. He suggested that in arder to better understand the trends and the Group's flnancial performance, the Board could consider, in addition to geographical segment reporting, to include producisegment reporting based on the 2 business divisions in future Annual Reports. Further, from pages 70 and 71 of the Annual Report, he observed that the revenue in the CMA business in USA had declined and resulted in a loss of S$1.26 million as at end of FY2013 compared to a loss of S$1.1 million as at end of FY2012. However in the presentation slides, it was reported that far 1QFY2014, the CMA business recovered and played a good part in the revenue increase. The shareholder wanted to know whether the other business divisions of the Group were performing and profitable as well.
Reply: CFO replied that ali business divisions in alllocations were profitable in 1QFY2014. CEO informed the Group was not ready to present a breakdown on the revenue and results far each business division in its future Annual Reports as it would be tedious and entail more resources to draw up the additional business segment reports. On the breakdown of the gross proflt of each business division, he informed that the information had already been reported and presented today in slide 17.
On the performance of CMA business in USA, the CEO pointed aut that an update on the financial performance of this business division had been reported consistently in every quarter financial results. He added that the CMA business in USA would require a period of time to develop and produce results as it was a relatively new and developing business based on a new way of manufacturing centered on 24/7 machining. However, he was encouraged by the results of CMA business which saw an improved gross profit margin to 20.7% in 1QFY2014. He was optimistic that the CMA business would continue to improve aver time.
Question: Query on the major factors that contributed to the significant improvement in revenue in the Philippines and Thailand far FY2013 compared to FY2012.
Reply: COO replied that as many customers were moving aut of Japan to these 2 countries after the natural disaster, the Group was able to attrae! them due to the Group's track record and the ability lo deliver its products and services with increased efficiency and cycle lime.
Prior to the discussion of the formai business, the Chairman reminded the meeting that ali resolutions to be put to the vote at the AGM would be voted on by way of a poli as stated in the Notice of AGM. The meeting then proceeded to discuss the formai business of the AGM. With permission from the members, the Notice of AGM was taken as read.
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Micro-Mechanics (Holdings) Ltd.
Minutes of the 11'' Annual Generai Meeting
Page 3
1.1 The following Ordinary Resolution No. 1 was duly proposed by Ms Michelle Lim Bee Sia and seconded by Mr Yeo Seng Chong:-
"lt was resolved that the Directors' Report and Audited Accounts for the financial year ended 30 June 2013 and the Auditors' Report thereon be received and adopted."
1.2 Q&A on Ordinary Resolution 1:
Question: Whether any analyst had been briefed on the financial performance of the
Group lo bring about an awareness and improvement in the share price.
Reply: Chairman replied that a meeting had been scheduled with an analyst on that day.
Question: Reference was made to page 2 of the Annua! Report which mentioned that the CMA factory in the USA had reached a key R&D milestone with 100 parts engineered for production on the new 24/7 machining line as al end of FY2013. Query on how many R&D milestones were set and the current status in terms of reaching full automation.
Reply: GEO replied that there were internai goals set by the Group with an objective to achieve the timelines at various stages. The targeted timelines would be aligned to the mission objective which was to deliver "Perfect parts and tools, on lime, every lime based on scalable, repeatable and cost-effective processes".
Question: Query on the percentages allocated for the Semiconductor Tooling business and the CMA business out of the total S$4 million which was planned for CAPEX investment for FY2014.
Reply: CFO replied that the CAPEX of S$4 million for FY2014 was mainly for the Semiconductor Tooling business. He stressed that the acquisition of IT equipment was to increase capability with efficiency and not to increase capacity. He replied that the overall capitai utilisation of the Group was about 51%.
Question: Whether any inventories were kept by the Group since the parts produced for one customer would not be suitable for another.
Reply: COO informed that the Group kept inventories but they were not significant. lnventories kept by the Group were needed for own use in manufacturing tooling for machinery.
Question: Query on the main factor driving the CMA business. Could ilbe the Company building on capability lo attraci businesses or were the businesses improving built on capability.
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Micro-Mechanics (Holdings) Ltd.
Minutes of the 1710 Annual Generai Meeting
Page4
Reply: GEO replied !ha!both factors attributed to the success of the CMA business. He added that the CMA business had allowed the Group to venture outside the semiconductor tooling industry in reaching aut to other industries and beyond the traditional customers' base. This had led to the overall growth of the Group's business which had placed more tactical demands an the Group. With the initiative of 24/7 machining rolled aut in the Asia region, more energy had been invested in the CMA USA planiin arder to explore and find ways an how lo manufacture products efficiently with a view to reduce dependency an skilled labour in the manufacturing process and replacing them with engineering talen!in the front end of the development process.
1.3 The Chairman called far a poli an the resolution. She also announced that TS Tay Public Accounting Corporation was appointed the scrutineers far the purpose of the poli. The shareholders were requested to exercise their votes an Ordinary Resolution No. 1 by completing the poli voting slips and lo retain the voting slips in arder lo cast their votes far the resiof the resolutions.
2. Declaration of Final dividend
2.1 The following Ordinary Resolution No. 2 was duly proposed by Mr Yeo Seng Chong and seconded by Mr Mui Weng Chiew:-
"Ilwas resolved that a final dividend of 2.0 cents per ordinary share one-tier tax exempt far the financial year ended 30 June 2013 be paid an 19 November 2013 lo members registered in the books of the Company an 5 November 2013."
2.2 Q&A an Ordinary Resolution 2:
Question: Given the improved financial performance of the Group far the past 3 years, whether the dividend rate could be improved going forward.
Reply: The Chairman replied that the Board had taken note of the suggestion of the shareholder.
2.3 The Chairman called far a poli an the resolution. The shareholders were requested lo exercise their votes an Ordinary Resolution No.2 by completing the poli voting slips.
3. Re-election of Director
3.1 The following Ordinary Resolution No. 3 was proposed by Mr Ow Leong Chuan and seconded by Ms Goh Gnee Leng:-
"lt was resolved that Mr Girija Prasad Pande retiring in accordance with Article 91 of the Company's Articles of Association, but being eligible and offering himself far re-election, be re-elected as Director of the Company."
3.2 The Chairman called far a poli an the resolution. The shareholders were requested to exercise their votes an Ordinary Resolution No. 3 by completing the poli voting slips.
4. Re-election of Director
4.1 The following Ordinary Resolution No. 4 was proposed by Mr Steven Chen and seconded by Mr Herman Phua:-
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Micro-Mechanics (Holdings) Ltd.
Minutes of the 1i" Annua! Generai Meeting
Page5
"Il was resolved that Mr Low Ming Wah retiring in accordance with Article 91 of the Company's Articles of Association, buibeing eligible and offering himself far re-election, be re-elected as Director of the Company."
4.2 The Chairman called far a poli on the resolution. The shareholders were requested lo exercise their votes on Ordinary Resolution No. 4 by completing the poli voting slips.
5.1 The following Ordinary Resolution No. 5 was proposed by Mr Ken Lim Heng Hock and seconded by Mr Joseph Chua Chee Hiong:-
"Ilwas resolved that a sum of S$208,200/- be approved far payment as Directors' fees far the financial year ended 30 June 2013."
5.2 Q&A on Ordinary Resolution 5:
Question: Query on the number of directors entitled lo be paid directors' fees and whether the total sum was the same as the previous year.
Reply: Chairman replied !ha!ali 6 directors would receive directors' fees. The amount of directors' fee far FY2013 was the same as !ha!far FY2012.
5.3 The Chairman called far a poli on the resolution. The shareholders were requested to exercise their votes on Ordinary Resolution No. 5 by completing the poli voting slips.
6.1 The following Ordinary Resolution No. 6 was proposed by Ms Ellen Lim Soon Boey and seconded by Mr Yeo Seng Chong:-
"l!was resolved !ha! KPMG LLP be re-appointed Auditors of the Company to hold office until the conclusion of the next Annual Generai Meeting and !ha! the Directors be authorized !o fix their remuneration."
6.2 Q&A on Ordinary Resolution No. 6:
Question: Whether there was an increase in auditors' fees far FY2013 compared !o
FY2012.
Reply: Chairman replied !ha!there was a slight increase and the breakdown in fees was furnished on page 60 of the Annual Repori.
6.3 The Chairman called far a poli on the resolution. The shareholders were requested to exercise their votes on Ordinary Resolution No. 6 by completing the poli voting slips.
7.1 The following Ordinary Resolution No. 7 was duly proposed by Mr Yeo Seng Chong and seconded by Ms Clara Liu Yun:-
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Micro-Mechanics (Holdings) Ltd.
Minutes cf the 17rn Annua! Generai Meeting
Page 6
"Ilwas resolved that pursuant to Section 161 of the Companies Acl, Chapter 50 (Acl), the Articles of Association and the listing rules of the Singapore Exchange Securities Trading Limited (SGX-ST), authority be and is hereby given to the directors of the Company to:-
(a) (i) allo!and issue shares in the capitai of the Company (Shares) (whether by way of rights, bonus or otherwise); and/or
(ii) make or gran!offers, agreements, or options (collectively, lnstruments) that might or would require Shares to be issued, including but not limited to the creation and issue of warrants, debentures or other instruments convertibie into Shares,
at any lime and upon such terms and conditions and for such purposes and to such persons as the directors may in their absolute discretion deem fit; and
(b) (notwithstanding the authority conferred by this Resolution may have ceased to be in force) issue Shares in pursuance of any lnstruments made or granted by the directors while this Resolution was in force,
provided that:
(1) the aggregate number of Shares to be issued pursuant to this Resolution (including Shares to be issued in pursuance of lnstruments made or granted pursuant to this Resolution) does not exceed 50% of the total number of issued Shares (excluding treasury shares, if any) at the lime of the passing of this Resolution (as calculated in accordance with sub-paragraph (2) below), of which the aggregate number of Shares issued other than on a pro-rata basis to existing shareholders (including Shares to be issued in pursuance of lnstruments made or granted pursuant to this Resolution) does not exceed 10% of the Company's total number of issued Shares (excluding treasury shares, if any) (as calculated in accordance with sub-paragraph (2) below); and
(2) (subject to such manner of calculation as may be prescribed by the SGX-ST) for the purpose of determining the aggregate number of Shares that may be issued under sub-paragraph (1) above, the total number of issued Shares (excluding treasury shares, if any) shall be calculated based on the total number of issued Shares (excluding treasury shares, if any) at the time of the passing of this Resolution, after adjusting for:-
(a) new Shares arising from the conversion or exercise of convertible securities;
(b) new Shares arising from the exercise of share options or vesting of share awards outstanding or subsisting at the lime this Resolution is passed, provided the options or awards were granted in compliance with Part VIli of Chapter 8 of the SGX-ST Listing Manual; and
(c) any subsequent bonus issue, consolidation or subdivision of Shares;
(3) in exercising the authority conferred by this Resolution, the Company shall comply with the requirements imposed by the SGX-ST from time to time and the provisions of the listing rules of the SGX-ST for the lime being in force (unless such compliance has been waived by the SGX-ST) and the Articles of Association for the time being of the Company; and
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Micro-Mechanics (Holdings) Ltd.
Minutes of the 17'" Annua! Generai Meeting
Page 7
(4) (unless revoked or varied by the Company in generai meeting) the authority conferred by this Resolution shall continue in force until the conclusion of the next annual generai meeting of the Company or the date by which the next annual generai meeting of the Company is required by Jaw to be held, whichever is earlier."
7.2 The Chairman calied for a poli on the resolution. The shareholders were requested to exercise their votes on Ordinary Resolution No. 7 by completing the poli voting slips.
8. Authority to allot and issue shares under Micro-Mechanics Performance Share Pian
8.1 The following Ordinary Resolution No. 8 was proposed by Mr Herman Phua and seconded by Ms Lisa Heng:-
"l!was resolved !ha!the Directors of the Company be and are hereby authorised to offer and gran!awards (the Awards) in accordance with the provisions of the Micro-Mechanics Performance Share Pian and !o deliver existing Shares, including treasury shares, and !o allo!and issue from !ime to !ime such number of Shares in the capitai of the Company as may be required !o be allotted and issued pursuant to the vesting of Awards under the Micro-Mechanics Performance Share Pian, provided !ha! the aggregate number of new Shares to be allotted and issued pursuant to the Micro-Mechanics Performance Share Pian shall no!exceed five per cent of the total number of issued Shares in the capitai of the Company (excluding treasury shares) from !ime to !ime."
8.2 The Chairman reminded the meeting !ha! the directors and employees who were shareholders and eligible !o participate in the Pian should abstain from voting on Ordinary Resolution No. 8.
8.3 The Chairman called for a poli on the resolution. The shareholders were requested !o exercise their votes on Ordinary Resolution No. 8 by completing the poli voting slips. Thereafter, the scrutineers collected ali the poli voting slips for counting.
9. Results of the Poli
9.1 Less !han half an hour later, the scrutineers submitted their report to the Chairman. Based on the scrutineers' report, the results of the poli are as follows:-
Annua! Generai Meeting | For | Against |
Annua! Generai Meeting | Number of Shares | Numberof Shares |
Ordinary Business | ||
Resolution 1 Adoption of Reports and Accounts | 94,781,337 | NIL |
Resolution 2 Declaration of final dividend | 94,781,337 | NJL |
Resolution 3 Re-election of Mr Girija Prasad Pande as director | 94,781,337 | NIL |
Resolution 4 Re-election of Mr Low Ming Wah as director | 94,781,337 | NIL |
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Micro-Mechanics (Holdings) Ltd.
Minutes cf the 11'" Annual Generai Meeting
Page8
Annual Generai Meeting | For | Against |
Annual Generai Meeting | Number of Shares | Numberof Shares |
Ordinary Business | ||
Resolution 5 Approvai of directors' fees | 94,781,337 | NIL |
Resolution 6 Re-appointment of KPMG LLP as auditors | 94,781,337 | NIL |
Special Business | ||
Resolution 7 Authority lo allo!and issue new shares | 94,765,837 | NIL |
Resolution 8 Authority lo allo!and issue shares under Micro-Mechanics Performance Share Pian | 47,698,838 | 2,000 |
9.2 Accordingly, the Chairman declared :-
9.2.1. Ordinary Resolution No. 1 carried unanimously.
9.2.2. Ordinary Resolution No. 2 carried unanimously.
9.2.3. Ordinary Resolution No. 3 carried unanimously.
9.2.4. Ordinary Resolution No. 4 carried unanimously.
9.2.5. Ordinary Resolution No. 5 carried unanimously.
9.2.6. Ordinary Resolution No. 6 carried unanimously.
9.2.7. Ordinary Resolution No.7 carried unanimously.
9.2.8. Ordinary Resolution No. 8 carried by the requisite majority. There being no further business, the meeting ended al4.30 p.m.
SUMITRI MENON CHAIRMAN
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