AGM ISSUES

 

Deadlines

 

• AGM required within 5 months of public company's financial year end (s250N) .  Notice period is 28 clear days for a listed company and this cannot be shortened -s249HA.

• Last opportunity to lodge draft notice of meeting for approval if necessary under LR 15.1 is 5 days before required to be used.

• Last day for notice [based upon the Replaceable Rules] is 3 days after mailing s249J(4)

• Last day for sending financial statements to members [earlier of 21 days before AGM or 4 months after end of company's financial year] [for cost reasons normally sent with the notice].s315

• Last day for receipt of proxies is 48 hours before meeting – s250B

• Last opportunity to lodge Chair's address (if listed company) is no later than the start of the AGM - LR 3.13. 

 

Deferral of AGM

Extension of time to hold the AGM should be lodged at least 1 month before the required date of the AGM.

 

Quorum

Replaceable Rule s249T

 

Appointing Chair at AGM

 

• RR s249U(1) does not permit the members to appoint the AGM chairperson unless the directors fail to do so.

• Chair of board is usually chair of AGM but any person to be appointed

• Members bound by constitution – s140(1) . Change to method of appointing the chair requires an amendment under s136

 

 

Role of Chair at AGM

 

•  Can refuse motion to replace chair
•  Preserve order 
•  Run proceedings

•  Ensure decisions of meeting ascertained

•  Needs knowledge of law, meetings, constitution and common sense

•  Determine meeting properly called and quorum

•  Discussion and business confined to agenda

•  Exercises control firmly (if needed) but fairly

•  Can impose time limits on speeches

•  Deals with points of order

•  Can adjourn meeting if disorderly

•  Can order members removed by reasonable force

•  Chair must give members a reasonable opportunity to question or comment on:

                A    management of company – s250S

                B    Remuneration report –s250SA; and

                C    To question the auditors – s250T

 

Procedures for adding members’ item on AGM

• Ss 249 N, 249O & 249P – 5% or 100 members

• Written notice must state resolution and be signed by members

• Must be given 2 months before and sent at company’s cost (if resolution received before notice sent)
• S 249 P – supporting statement can accompany notice

• Company’s right to refuse to send a statement if longer than 1000 words or defamatory

 

Notice of AGM

 

• Contents of Notice – s249L (date, time, place and business)

• Wording of proxy – s250A

• Non binding resolution re directors’ remuneration – s250R

 

Notice of meeting

 

• General rule- section 249H: 21 days (shorter notice allowed for AGM if all eligible members agree beforehand)

   

• For listed company: 28 clear days notice – s249HA plus 3 days for posting – s249J

 

Auditor and AGM

 

• Auditor gets notice – s249K

• Auditor must attend  listed company AGM– s250RA and can be heard – s249V

• Questions may be asked – s250T

• Written questions can be submitted for listed company – s250PA

 

 

Proxy

Proxy is valid if complies with s250A

 

•  A member can appoint the chair but is able to appoint any person – s249X

•  If Chair is appointed they must vote as directed and cannot vote on show of hands if holding conflicting proxies – s250(4)(b)

•   Proxy must be lodged 48 hours before the meeting – s250B, unless constitution reduces that period – s250B(5)

• Right to appoint corporate representative is not a proxy– s250D is not subject to 48 hour rule

 

 

Remuneration report

Under s300A, a listed public company's annual directors' report must contain a discussion on remuneration of directors, secretary and senior managers in a separate remuneration report.

 

Sections 249L(2) and 250R(2) require that at a listed company’s AGM, the members vote on an advisory (non-binding) resolution that the remuneration report be adopted.

 

Even though a vote to reject a remuneration report is not binding, a company should explain to its shareholders what action, if any, it intends to take in response.

The members must be allowed a resonable opportunity to ask questions about the report: s250SA

 

The Corporations Act is silent on the consequences if a Board proceeds with its remuneration proposals despite a negative shareholder vote.

 

 

POSTPONEMENT OF AGM

 

• Can’t postpone meeting once called [Smith v Paringa Mines Ltd, Bell Resources Ltd v Turnbridge P/L].