Are you ready for your 2019 AGM?

Corporate News - 03 September 2019

It is that time of year again for public companies with a financial year of 30 June to start the process of annual reporting to members and calling an annual general meeting (AGM). AGMs will need to be held by 29 November 2019 (given 30 November is a Saturday this year) which means that AGM notices of meeting together with the explanatory statement and proxy form (Notices) will need to be finalised and sent to shareholders by the end of October 2019.

Steinepreis Paganin is very happy to help in reviewing and preparing AGM Notices so please contact us as soon as possible to ensure that AGMs are held within the statutory time requirements. 

Key issues to think about this year’s AGMs are set out below. 

Timing Considerations
It is important to ensure that enough time is allowed to:

  • prepare the Notice (which will depend on the complexity of the approvals sought but roughly one week);
  • obtain ASIC and/or ASX regulatory approval prior to the Notice being printed (which can take up to 21 days combined);
  • print and dispatch the Notice (usually 2-3 business days); and
  • provide shareholders with sufficient notice of the AGM (usually 28 clear days’ notice (or 21 days’ notice for unlisted public companies)).
Issues and resolutions to think about
Commons resolutions and issues to consider when preparing an AGM Notice include the following:

Types of Resolutions Issues to consider
Financial benefits to related parties
  • Proposed issues of securities or other financial benefits to related Chapter 2E of the Corporations Act. Note: if required, ASIC review period of 14 days with $802 fee payable (or $932 if an abridgement of the review period is sought).
Director elections
  • Election of directors who have been appointed to fill a casual vacancy since the company’s last AGM/general meeting (as applicable).
  • election of directors retiring by rotation.
Director remuneration
  • strikes resolution where 25% of eligible votes cast were against the previous remuneration report.
Issues of securities and incentive plans
  • Ratification of previous security issues in order to refresh additional placement capacity under LR 7.1 or LR 7.1A.
  • Future capital raising approvals.
  • Refreshing shareholder approval of incentive security plans (every 3 years).
Constitution amendments
  • General updates to reflect Corporations Act and Listing Rule depending on when current constitution was last adopted.
  • It is becoming more common for companies to permit shareholders to make direct votes on resolutions as an alternative to appointing a proxy where the member is unable to attend the meeting.  Updates to a company’s constitution will be required if companies wish to give shareholders this flexibility.
  • Renewal of proportional takeover provisions (every 3 years).
  • Auditor if it is the first AGM for the company.
Corporate governance issues
Early adopters of the Corporate Governance Council Principles and Recommendations – 4th Edition (Recommendations – 4th Edition) will need to ensure Notices comply with the new edition.  New Recommendation 6.4 provides that voting on substantive resolutions should be conducted by a poll rather than a show of hands. Early adopters of the Recommendations - 4th Edition will need to make if not, why not disclosure in their corporate governance statement if resolutions are not conducted by poll at this year’s AGM. The Recommendations – 4th Edition also highlight the need to ensure that directors are remunerated fairly and responsibly and that companies facilitate and encourage shareholder participation at AGMs.

ASX Listing Rule Changes
As mentioned in an earlier Corporate News alert, the proposed ASX Listing Rule changes set out in ASX’s consultation paper “Simplifying, clarifying and enhancing the integrity and efficiency of the ASX Listing Rules” are due to be released in late September/early October this year with an effective date of 1  December 2019 (after the 2019 AGM season).  Therefore, the first AGMs which will need to comply with those changes are those held in 2020.

As always, we are very happy to help clients review of prepare the AGM Notices so please contact us in our Perth office on +61 8 9321 4000 or our Melbourne office on +61 3 9111 9400 if you would like assistance.

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