Hi Everyone,
As a refresher, here are the questions that have been put to the board in November and we will be expecting answers come this Wednesday's AGM.
And as always, we are open to any suggested questions you may have.
From the previous AGM cancellation fiasco, I will film the AGM proceedings for all those that can't attend this time around. Unless of course, it's cancelled again.
TheSecretary
APG N.L
Dear Sir,
ANNUAL GENERAL MEETING OFAPG
Matters to be addressed under Agenda Item 3 of theCompany’s 2019 Notice of Meeting
You are respectfully asked to provide answers to the questions set outunder A. and B. for the purposes of providing information to members at theCompany’s 2019 Annual General Meeting. The questions relate to theCompany’s Notice of Meeting (the absence of a conditional spill motion) and thecontent of its 2019 Annual Report (including matters set out in itsRemuneration Report).
- Failure to Comply with Corporations Act Second Strike Rule
Under the“two strikes” legislation which came into effect on 1 July 2011, if at least25% of the votes cast on the adoption of the remuneration report of the Companyat two consecutive AGMs are against the adoption of the remuneration report,the Company must put to the shareholders a “spill resolution” at the secondAGM.
If thespill resolution is passed, the Company must hold another general meeting ofshareholders (“spill meeting’) within 90 days of the passing of the resolution.All of the directors of the Company who were in office when the directors’report (including the remuneration report) was approved (and who remain inoffice at the spill meeting), cease to hold office immediately before the endof the spill meeting and may stand for re-election.
At theCompany’s 2018 AGM, the Company received a “first strike” because more than 25%of the votes cast on the resolution to adopt the Company’s resolution to adoptthe 2018 Remuneration Report were cast against its adoption.
Question1
Why is itthat the Company’s Agenda notice for its 2019 AGM hasn’t included a conditionalspill motion in accordance with the requirements of section 250V of theCorporations Act? The Company’s failure to include aconditional spill resolution on the Agenda (in anticipation that it mightreceive a second strike) seems an error of judgment. How is this defectto be cured?
Question2
Has thecompany taken legal advice on this matter and does it believe it is incompliance with its obligations under the Corporations Act?
RELEVANTLAW
What does the Act say?
Section250V of the Act states:
At the later AGM there must be put to the vote a resolution (the spillresolution) that:
(a)another meeting (the spill meeting) of the company’s members be held within 90days; and
(b)all the company’s directors cease to hold office immediately before the end ofthe spill meeting;
(c)and resolutions to appoint persons to offices that will be vacated immediatelybefore the end of the spill meeting be put to the vote at the spillmeeting.
Section250W then discusses the process if the spill resolution is passed, namely, thefollowing conditions must be complied with.
Section250W(2) The company must hold the spill meeting within 90 days after the spillresolution was passed.
Section250W(3) Nothing in subsection (2) authorises any person to disregard:
1.(a) section 249HA (Amount of notice of meetingsof listed company); or
2.(b) if a person intends to move a resolutionrelating to the appointment of a director of the company – any provision of thecompany’s constitution that requires a minimum period of notice for such aresolution.
Compliancewith s 250W
Section250W(2) states that the spill meeting must be held within 90 days after thespill resolution is passed.
Requirements for Spill Resolution
Atthe same AGM at which the ‘second strike’ occurs, the company needs to put theresolution known as a ‘spill resolution’ to shareholders.
Thespill resolution must outline that another meeting (the spill meeting) will beheld. This meeting must take place within 90 days from the date of the AGM atwhich the company receives the second strike.
Thismeans that companies which have received a first strike need to plan for asecond strike and a spill resolution, when setting the agenda for the AGM. Theagenda must include the usual resolution to approve the remuneration report anda spill resolution.
Thespill resolution will be conditional upon receipt of the second strike and onlyneeds to be put to the shareholders if a company receives the second strike.Unlike the resolutions in relation to the first and second strikes, the spillresolution requires a simple majority (that is more than 50 per cent) of thoseeligible to vote to succeed.
Question3
Whatremediation, if any, does the Company propose?
Membershave a right to expect the Company to comply with the Corporations Act andmembers will look forward to your considered responses to each of the above 3questions..
- ADDITIONAL QUESTIONS FOR THE COMPANY UNDER AGENDA ITEM 3 – OTHER BUSINNESS
Please kindly address the following questions concerning mattersreported in the Company’s 2019 Annual Report:
- Please advise the nature of the Share Capital Receivable reported at Note 9 of the Notes to the Financial Statements of the 2019 Annual Report.
- If the Share Capital Receivable is a current asset when does the Company expect the Receivable to be paid and by whom?
- Please advise if the amount of the related party loan (director) ($200,000) is still outstanding, in full or in part, and if so inform members of the right of the director to convert the loan balance into ordinary shares of the Company?
- Please advise whether the directors other than Mr Cuthbertson currently hold shares in the Company and, if not, how is this consistent with the Remuneration Report of the Company which states:
“Non-executive directors havelong been encouraged by the Board to hold shares in the company …”
- Please explain why a related party of the company Secretary (Notsag Pty Limited) was paid an amount of $142,560 for underwriting fees in 2018-19 and please advise whether the related party was issued shares pursuant to the placements in respect of which the related party received underwriting fees?
- Is any amount due and payable on any shares issued by the Company to Notsag Pty Limited and if so why haven’t these amounts been paid in full as required under the company’s Articles of Association?
- What lessons has the board learnt from its issue of convertible notes to Bergen in 2017-18 and is the Board satisfied it conducted proper due diligence before it entered that transaction?
- What confidence can members have that the Board has the requisite commercial acumen and legal skills to avoid repeating its Bergen misadventure?
- Does the Board take responsibility for the reduction in the company’s share price from 1c per ordinary share to .1c per share which occurred after Bergen converted its notes into shares and immediately sold these shares without regard to its impact on the interests of the company and its other members?
- Is the Board satisfied with the corporate and financing expertise of Notsag Pty Limited given its close involvement in arranging and vetting the Bergen note issue transaction?
- Why is Notsag still being used to arrange placements when it was a prime facilitator of the ‘value-destroying’ Bergen transactions?
Yourssincerely
Lets make APG great again
Rickaroonie
