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EQUITY 

the trusted voice of shareholders December 2012 Vol 26 #12 

January 2013 

35 ASA AGM 

REPORTS 

ASA: 

NATIONAL 

CONFERENCE 

www.australianshareholders.com.au 

BONUS 

DOUBLE 

ISSUE 

RETAIL 

INVESTORS 

SHOULD 

BE HEARD 

STOCK 

VALUATION 

PART III

EQUITY 

the trusted voice of shareholders 

FEATURES THIS MONTH 

MORE INSIDE... 

STOCK 

WATCH 

BrickBats 

BOUQUEts& 

CHAIR 

REPORT 

11 

17 

41 

EQUITY December 2012 / January 2013 Page 2 

Company 

04 

RETAIL INVESTORS 

SHOULD BE HEARD 

DEC/JAN VOL 26 #12 

CONTENTS 

Few investors could resist salivating over such 

impressive returns, and yet that was Hastie Group 

Limited’s (HST) dizzying share price performance in 

July 2009, having risen from $9.97 to $19.80 in just 

two months. 

12 WESTERN AREAS 

MINE SITE TOUR 

STOCK VALUATION 

PART III 

This is the third in a series of articles on stock valuation. 

The first two explored the early development of 

valuation methods both in Europe and the US. 

iNVEstOr 

BEHaViOUr 

14 

ASA 

NEWS 

DESK 

16 

BETTER 

Reports 18 INVESTING 38 

REGIONAL 

GROUPS 

AROUND 

AUSTRALIA 

36 

Hyden, a wheatbelt town just under 350 kilometres east 

of Perth, is notable for the tourist attraction of Wave Rock. 

A group of members made the journey there recently, not 

only to have a tour of the strange rock formation but to 

look over the Western Areas mine site in Forrestania. 

42 

GROUP 

NatiONaL 

cONFErENcE 

48

CEO 

Vas Kolesnikoff 

I welcome you to this final edition of EQUITY magazine for 2012; our year-end bumper issue 

including a selection of 35 AGM reports. I wish everyone a very happy and safe festive season 

and look forward to seeing members again in the New Year. 

2012 was a challenging year for investors as global markets continued to be volatile and uncertain. 

With this backdrop, it has also been a very busy year for the ASA as we have been increasingly 

called upon by boards, media, regulators and policy makers to represent small investors. We 

have also continued to work on a number of projects in the National Office including the policy 

review, continued IT systems work, and the review and expansion of our company monitoring 

and research services. There has also been planning for the 2013 conference and a review of 

investor education needs and ASA services. 

I thank all members for supporting your association this year. The ASA is an association of likeminded 

people and everything we do is aimed at the interests of our members who are small, 

self-funded or self-managed investors. In the current economic environment, I recognise that some 

of our members are feeling the financial pinch; so to you, a special thank you for your continued 

support, as the ASA aims to support you. 

Our association has a very small and lean National Office, with a significant contribution made 

by our volunteer members. I would like to thank the Board, State and Company Monitoring 

Committee Chairs, company monitors, state committees, meeting convenors, education officers 

and all other members who give up their time to contribute to our association. There are many 

changes taking place, and they do not happen quickly and without planning. Through the 

contribution of our volunteers, we have embarked on a program of increasing ASA’s efficiency, 

effectiveness and advocacy, and in increasing the breadth of services to members and engaging 

the broader community. 

The 2012 AGM season is, in the majority, complete. The ASA’s continuing rise in prominence 

represents recognition that your association is genuinely representative of the views of Australian 

investors. We have seen significant engagement with the media and boards and executives of 

corporations which we monitor. The development of the ASA’s policy framework and presence is 

an evolving process, so I urge members to remain engaged and support our efforts to encourage 

new membership. We are increasingly being followed by institutional investors and analysts, with 

strategies in place to support engagement to ensure that the interests of the “retail” investor are 

not forgotten. 

As the ASA continues to develop a strong and credible voice, our company monitors play a 

significant part of this process. Monitors meet with company executives and boards and attend 

AGMs to vote proxies and publicly hold directors to account. The importance of this contribution 

cannot be underscored, as we are the only organisation performing this function. The ASA is 

the only representative body safeguarding the interests of small investors, and it needs support 

through membership. If you are interested in company monitoring in 2013, please email your 

State Chair on the email address provided or contact the National Office. The support, training 

and information that company monitors receive should also assist you in other investing activities. 

This month our feature article has been written for the ASA by Mr Elmer Funke Kupper, Chief 

Executive Officer and Managing Director of ASX Limited. He has also accepted our invitation to 

address our conference next year. The ASA has been prominent in the debate on issues affecting 

market integrity, and Mr Funke Kupper recognises the importance of listening to, and protecting 

retail investors. He gives us his insights on High Frequency Trading, Dark Pools and issues of 

competition and market integrity, and what needs to happen. 

Members regularly ask me one question; how can we make it easier for people to appoint the 

Australian Shareholders’ Association as their proxy. The answer is found on the ASA website by 

typing “Standing Proxy Form” in the Search Site box, and looking for the Link Market Services 

and Computershare forms. Investors need to complete one standing proxy form for each stock 

they hold. This will remove the burden of filling in proxy forms annually, as you only need to do 

this once. You will also have comfort that ASA monitors will vote your shares. I encourage all 

members to tell their friends and associates about the ASA and this option, as we want all investors 

to join us and have their votes counted. 

As I look to the New Year, I am excited to invite members and non-members to the 2013 ASA 

Making a Difference National Conference to be held in May at the Sheraton on the Park (see the 

back page). We have assembled a tremendous list of industry leading speakers encompassing 

understanding the global economy, investing in shares, hybrids and corporate bonds, and many 

other topics which will grab your interest. We have also incorporated a few social events for 

members to enjoy some lighter moments, so book your place early. 

BOARD OF DIRECTORS 

Ian Curry FCPA, FCIS, Dip Fin Planning, Chairman 

Betty Clarke-Wood ACIP 

Denis O’Sullivan BCom, AAUQ, ANZIIF, SAFin, FCPA 

Barry Nunn AO, BE 

Geoff Sherwin FCA, F Fin, FAICD 

NATIONAL OFFICE 

Vas Kolesnikoff 

Chief Executive Officer 

Silvana Eccles 

Member Services Manager 

Kate Machattie 

Accounting Manager 

Stephen Mayne 

Policy & Engagement Co-ordinator 

Katrina Meggitt 

Member Services Coordinator 

Katrina Panazzolo 

Administrative Assistant 

STATE BRANCHES 

ACT Edward Patching act@asa.asn.au 

NSW Michael Perry nsw@asa.asn.au 

QLD Alison Harrington qld@asa.asn.au 

SA Kevin Parken sa@asa.asn.au 

VIC Don Hyatt vic@asa.asn.au 

WA Barry Nunn wa@asa.asn.au 

EQUITY EDITOR 

Silvana Eccles equity@asa.asn.au 

EQUITY DESIGNER 

Mark Pallot 

CONTACT DETAILS 

TELEPHONE 1300 368 448 

02 9411 1505 

FAX 02 9411 6663 

ADDRESS Level 7, North Tower 

1-5 Railway Street 

Chatswood NSW 2067 

PO Box 519 

Chatswood NSW 2057 

EMAIL share@asa.asn.au 

WEBSITE www.asa.asn.au 

www.australianshareholders.com.au 

DISCLAIMER 

This material in EQUITY is provided for information only. 

No responsibility or any form of contractual, tortious or 

other liability is accepted for decisions made on the 

basis of the information contained herein. Nothing in 

EQUITY is intended or should be interpreted as being 

investment advice. Investment advice can only be 

obtained from persons who are licensed in accordance 

with the Corporations Act. Views expressed in articles in 

EQUITY do not necessarily reflect ASA policy. The ASA 

does not endorse or favour any specific commercial 

product or company. The ASA is often able to negotiate 

discounts or benefits for ASA members however the 

inclusion of discounts or advertisements in EQUITY, on 

the ASA website or within other ASA communications 

does not constitute an endorsement for the products, 

services or companies mentioned. 

COPYRIGHT 

All material published in Equity is copyright, as are ASA 

Policy Statements whether published in Equity or not. 

Reproduction in whole or in part is not permitted without 

written authority from the Chief Executive Officer. 

Finally, in reflecting on this busy year, and sometimes in difficult circumstances, I thank my team, All graphs for the Company Reports derive from www. 

Silvana, the two Katrina’s, Kate and our special consultant, Stephen Mayne, for the support and netquote.com.au. Any correspondence regarding 

contributions they have made. We have much work ahead, but we know our goals of growing matters covered in this magazine should be addressed 

the ASA and its services are on the top of our minds. 

EQUITY December to the Chief 2012 Executive / January Officer. 

2013 Page 3

RETAIL 

INVESTORS 

SHOULD 

BE HEARD 

Elmer Funke Kupper 

ASX Managing 

Director & CEO 

Retail investors are the bedrock upon which the Australian 

equities market is based. The last Share Ownership Study, 

published in May 2011, showed that 43% of the adult 

population own shares, ranking Australia among the leading 

share-owning nations in the world. And recent Australian 

Bureau of Statistics data suggest that retail investors – 

either directly or through institutionally-managed funds 

– control around 40% of the value of the Australian equity 

market. Clearly, retail matters. 

And yet, despite its size, the retail investor voice, and that 

of other end customers of the market, like fund managers 

and superannuation funds, is rarely heard in debates about 

changes to Australia’s market infrastructure. Regulators, 

banks and exchanges tend to dominate the discussion. 


This is surprising when structural change is often argued 

as being in the interests of retail investors. 

As changes are being made to the way the market operates, 

the orders that you place with your broker are being treated 

differently. We think you need to understand what those 

changes are and how they impact on you. You can then 

decide whether the changes are in your interest. 

Some of changes currently being considered by regulators 

relate to the processes that are invisible to investors 

because they happen automatically after an investor 

completes a share trade. They are complex and critically 

important processes designed to ensure that share trades 

are executed appropriately and that ownership and money 

changes hands. The technical terms for these processes 

are clearing and settlement. 

By clearing equity transactions ASX removes a considerable 

amount of risk for investors. Effectively, clearing means 

that the exchange becomes the central counterparty – the 

buyer to every seller and the seller to every buyer. The 

clearing function is supported by considerable amounts of 

capital and collateral – over $4 billion in the equity market 

alone – and is overseen by Australian regulators and subject 

to Australian law.

While the clearing process may be invisible to retail 

investors, any changes to the way it works could affect how 

share trades are executed – and in turn, impact on the risks 

that investors take. Australia is a well regulated and highly 

efficient marketplace. One needs a good reason to change 

the way it works, and investors need to receive direct and 

significant benefits. Otherwise, why do it? 

It is important that the interests of retail investors are 

carefully considered when changes are made to our market 

structure. They need to have a voice, either directly or 

through the work of their representative bodies, like the 

Australian Shareholders’ Association and superfunds. 

Clearing is central to the value ASX provides Australia’s 

financial markets as one of the world’s leading fully 

integrated, multi-asset class exchange groups. Being a 

fully integrated exchange means that ASX facilitates trading 

in both equities and derivatives, and operates all key steps 

in the investment process – from listings to trading, clearing 

and settlement. 

The ASX business model is the most attractive, most robust 

and most successful exchange model. Significantly, it is the 

business model that prevails in Asia. If Asia is our future, 

what our neighbours are doing should be relevant. 

Much has already been made of the Federal Government’s 

recent white paper, Australia in the Asian Century. This 

important document outlines a long-term strategic direction 

for Australia and its interaction with the region. 

The document provides a framework against which new 

policy decisions can be tested. From today, if we are 

serious about our ambitions, the decisions we make must 

strengthen Australia’s position in the Asian century. The 

white paper forces us to look north more and less to Europe 

and North America for guidance. In financial markets this 

is now more important than ever. 

ASX is not against change. Far from it. Throughout our 

history we have led the exchange industry by merging 

Australia’s equities and derivatives exchanges, embracing 

electronic trading and adopting a modern corporate 

governance structure. ASX successfully adapts to new 

conditions and regulatory arrangements every day, and 

the company is investing to ensure that Australia’s market 

infrastructure remains world-class. 

The debate about our financial markets is not about ASX. 

It is about the quality and long-term competitiveness of 

Australia’s financial markets, and the confidence and 

continued participation of investors. 

Competition in equities trading has not 

delivered the promised benefits 

Australia’s recent experience in changing its financial 

market structure has not been good. Last year, we 

implemented a new market structure for equities trading. 

Chi-X now provides an alternative platform to trade the 

top 200 ASX securities and some exchange-traded funds. 

The idea behind this change seemed simple: fees will come 

down, new investors will enter the market and liquidity will 

go up. 

Sadly, these promises have yet to be delivered. And they 

may never be delivered. Overall, costs have gone up, not 

down. This is despite ASX cutting its trading fees. The 

reason for this is that the additional costs to the brokers 

and the banks of operating in a much more complex market 

structure were higher than the savings. It is hard to find 

any financial winners. 

Moreover, we are now having a significant debate about 

high frequency trading, fragmentation and dark pools. This 

debate was always going to arrive, but we should be clear 

that the new market structure has amplified their effects 

and, thereby, the related concerns. We now need to deal 

with these concerns. The good news is that there is still 

time to act. Investors, in my view, can continue to have 

confidence in our market. Our collective job is to ensure 

that it stays this way. 

Nevertheless, there is clear evidence, both in Australia and 

overseas, that an increase in dark execution, where trading 

takes place away from the central, public market (which we 

call the ‘lit’ market), results in widening spreads and higher 

costs for investors. Despite some claims to the contrary, 

fragmentation is the enemy of efficient markets. Today, 

investors can buy and sell BHP and Telstra, for example, 

in at least 18 different places in Australia: two exchanges 

and some 16 dark pools. This makes no sense for a market 

the size of Australia. 

This issue of fragmentation can be easily managed if 

we adopt the following principle: all trades should be 

executed in the one market place that everyone has 

equal access to (the ‘lit’ market) unless there is a good 

reason not to execute it there. 

And there are some good reasons not to send all orders 

to the lit market. An example is a large, institutional block 

trade that would send a disproportionate price signal to the 

market and be difficult to match with the liquidity available 

at the time. This is not new – large orders have always been 

executed away from the lit market. ASX believes that such 

block trades should be allowed to be matched off-market. 

Small orders, however, should go to the lit market so that 

all retail investors get access to the same matching process 

and the same commercial terms. That is why ASX has been 

calling for a $25,000 threshold to be implemented, below 

which all orders should be executed on the lit market. ASIC 

has previously raised the idea of a $50,000 threshold. We 

would be happy with either outcome, recognising that the 

number cannot be zero. 

ASIC and Minister Shorten understand the issues and are 

developing a regulatory response. If the recommendations 

that ASX has put forward are implemented, the Australian 

market will continue to be one of the best regulated in the 

world. 

EQUITY December 2012 / January 2013 Page 5

no more Change without a full 

Cost-benefit analysis 

Retail investors and superannuation funds have not seen 

any benefit from the recent changes to our equity market. 

This suggests that we should think harder about the impact 

on investors and the risks they assume. In short, we have 

to do a full cost-benefit analysis and apply a national 

interest test before we push the change button again. This 

is particularly important when it comes to clearing, which 

is critical to the stability of our national financial system. 

Regulators are now considering if Australia should change 

the market for clearing by licensing a second clearing 

house. This second clearing house may even be located 

overseas. 

In undertaking a cost-benefit analysis to ensure that the 

decision is the right one for investors and for Australia, 

decision-makers must answer three questions: 

1. Will the proposed change in market structure provide 

tangible benefits to end users – companies, retail 

investors, fund managers, superannuation funds? 

2. Can regulators give an assurance that risks will not 

increase and that they can manage any increased 

risks, particularly if the activities, capital and collateral 

are located overseas? 

3. Does a new market structure improve Australia’s 

competitive position, support the development of a 

financial centre, and advance our ambitions in the 

Asian century? 

Let’s briefly run through each of these questions for 

clearing. 

First, the financial business case. The total cost to the 

Australian economy of equities clearing is $46 million per 

annum – or only 27 cents for an average transaction of 

$7,000. That is not a lot for our economy. 

Most market analysts estimate that the introduction of a 

second clearing house could reduce clearing fees paid to 

ASX by $15-20 million. And while ASX does not comment 

on what it would do if a second clearing house were to 

arrive, let’s assume for now that $15-20 million is the 

maximum gross benefit for Australia. 

Unfortunately, there are likely to be material new costs 

that more than offset these potential savings. These 

costs would come from reduced efficiency in the clearing 

and settlement processes, and higher technology and 

regulatory costs. Australia is a relatively small market and 

inefficiencies show up very quickly. ASX conservatively 

estimates that the additional costs to end users from the 

change would be in the range of $20-30 million per annum. 

In other words, the additional costs are higher than the 

potential savings. 

Second, the risks involved in clearing. If clearing takes 

place overseas the risks to Australian investors will increase 


materially. Australian regulators will not be able to manage 

this directly. They will have to rely on overseas regulators 

- and we know that many overseas financial markets and 

their economies are not in good shape. 

We also know from the experiences with the collapse 

of Lehmans and more recently MF Global that there is a 

significant difference between ‘regulatory equivalence’ to 

manage risk and actually getting our money back when 

there is a material default. Australian clients of MF Global 

are still waiting to recover several hundred million dollars 

more than 12 months after the firm collapsed, with money 

tied up in overseas insolvency processes. 

Third, our ambitions as a country. Australia’s current 

clearing market structure is one that has been adopted by 

every other key market in the world, including the US. Only 

Europe, with the peculiarities of the Eurozone experiment, 

operates more than one clearing house. It makes no sense 

to abandon international best practice, particularly when 

we consider that the upside is small and the risks material. 

Moreover, ASX is making significant investments that will 

give Australia one of the best market infrastructures in the 

world. It is the strength of our existing exchange model 

that enables us to do this. 

The ASX investments include significant upgrades 

to Australia’s clearing and settlement infrastructure; 

the adoption of globally recognised risk management 

standards; the development of new clearing services; 

the creation of multi-currency capabilities; and the 

establishment of a new collateral management service to 

allow customers to better utilise the collateral held in ASX’s 

equities and fixed income depositories. 

These investments will provide services and benefits that 

few other exchanges can offer. And they should deliver 

real savings to ASX clients. 

In addition, there are other initiatives ASX is undertaking 

that will directly benefit retail investors, such as a trial equity 

research scheme for small to mid-cap companies; plans 

to reduce the timetable for rights issues; a new on-market 

bookbuild facility; and enhanced disclosure requirements 

for reserves and resources reporting by mining and oil and 

gas companies. 

ASX’s level of innovation and investment will put Australia in 

a very strong position to compete with the region’s existing 

financial centres. Further detail is contained in our various 

public submissions available on our website: http://www. 

asxgroup.com.au/public-consultations.htm. 

ConClusion 

ASX welcomes competition where this provides a clear net 

benefit to investors, supports the profitability and stability 

of Australia’s financial markets, and improves Australia’s 

global competitive position. When it comes to clearing, the 

case to fragment this activity has not been made. 

ASX believes that the regulators and the 

Treasurer understand the issues and are 

giving them proper consideration. A decision 

may be made before Christmas. Your voice 

matters in this process and should be part of 

the discussion, directly or through the ASA. 

Australia must get this one right.

Is the ASX a 

Stock Market? 

The role of IT, Mathematics & Commerce 

‘In my view HFT is at best front running of real 

client orders, and at worst market manipulation. I urge 

ASIC to look at these issues.’ 

Matt Williams, Perpetual. 

‘I’ve been in the markets for 30 years, but I can’t 

even be bothered to watch throughout the day now.’ 

John Abernethy, Clime Investment Management, MD. 

‘HFT crackdown needed, funds say’ 

Australian Financial Review 

THE ISSUES 

It is difficult to understand and evaluate the recent major 

change in stock market trading known as high frequency 

trading, HFT. The systems are complex and difficult to 

follow and even those who organize the systems do not 

understand what is causing disturbing glitches. 

Algorithmic decision systems are coming to dominate 

trading, replacing human decision making because of 

their effectiveness on speed alone. The systems were only 

introduced in the mid to late 2000s. Decisions are based 

on data gleaned from market activity – which they monitor 

with the thoroughness of a machine. Rules and formulae 

structure the decisions and trading on the market, hence 

the term algorithmic trading. This is the sort of change often 

typified as a ‘quantum leap’. 

My argument focuses on the nature of the market for share 

capital: the stock exchange. I am particularly concerned 

to establish how it is being changed by the development 

of HFT. To understand how this is happening we need to 

look at the role of mathematics, information technology (IT), 

business and commerce and econometrics, as well as the 

observations of monitors of market activity. 

EVALUATING CHANGE 

Algorithmic trading now dominates major world markets 

like the NYSE and the London exchange, accounting for 

more than 70 per cent of trading volume. Furthermore the 

systems have speed on their side, light speed in identifying 

opportunities to profit from trading and executing a strategy. 

There are three main criteria to consider in an evaluation 

of the change: effectiveness, efficiency and equity. 

Effectiveness is the simplest, being the judgement about 

whether the system works – and hopefully we would be 

looking for improvements. Efficiency includes effectiveness, 

as well as considering costs of operating the systems. 

Efficiency is the concept we find most frequently applied 

in economic evaluations. 

Equity considers the distribution of outcomes among 

those exchanging shares in the capital value of companies. 

The simplest basis for evaluation is the equality in the 

distribution among groups. In a distinct example if one 

group is disadvantaged or loses a position they hold or 

are excluded from entry this would be an example of 

loss of equity. Equity judgements are concerned with 

fairness, introducing the idea of equality being tempered 

by deservedness. 

WHAT IS THE STOCK MARKET? 

Ken Johnson 

ASA Member 

Stock markets need to provide a reasonably fair trading 

system that is effective and efficient in its functioning. Stock 

exchanges are a key to a capitalist economy because they 

allocate the shares held in the capital of companies. 

The stock market is the one of the best examples of a 

market because buyers and sellers trade in one place. Price 

and activity data are readily available. Typically, people and 

institutions hold shares in a company for the longer term. 

Short-term investment therefore is not an intent or feature 

of trading where the focus of interest is in earnings and 

capital growth. 

The prices established are a key indicator of the status 

of the economy, its sectors and companies. Public and 

private decisions take into account the state of this market. 

Furthermore stock markets closely observe price levels on 

other markets and particularly follow the world’s leading 

stock markets, the New York Stock Exchange in particular. 

Hence I want to establish if the stock market has diverged 

from being a ‘true market’ and what the implications might 

be for all traders. 

Before machines came to manage trading it was conducted 

in a place where brokers facilitated trading on the floor of 

the market. Price responded to the balance between the 

demand for and supply of shares on the market. 

As computers became common and more effective, stock 

exchanges adopted systems to organise and record 

trading, and also report the outcomes of transactions. 

Orders to buy and sell came to be placed by brokers from 

computers. Simple trading rules were developed so that 

human beings were not required to monitor each sale. The 

computer assisted trading system provided an effective and 

efficient system capable of managing trading. 


ALGORITHMIC TRADING 

The basis for algorithmic trading is in the development and 

integration of computers and communication systems. It 

uses a wide range of data from the economy as well as the 

stock market and applies this to trading using mathematics 

to formulate rules and participate in the market. 

Experts who have examined the development of algorithmic 

trading are critical of the stability of a market where 

algorithms are active. Their criticism is focussed on two 

main issues: 

1. Individually, algorithms focus on the short and very 

short-term. They trade exceptionally quickly and only 

hold positions in the market for a day or less. Their 

speed means they can adopt market strategies very 

effectively. Hence they create a very different market. 

The algorithms are seeking marginal gains from trading 

that shaves margins from prices in high volume trading 

to make profits. The systems are myopic in the sense 

of taking this very short-term view. 

2. Collectively, their interaction can lead to problems 

not foreseen from traditional trading, and particularly 

exceptional changes in price in very short time spans. 

In fact to understand algorithmic trading some experts 

turn to models of ecology. 

Trading strategies are complex and include: liquidity 

detection, pricing inefficiencies and predatory action. Most 

strategies seem to be favoured and enhanced by having 

HFT systems to gain advantage. 

Counter to this view of algorithmic trading causing problems 

is that of market economists. In essence these studies 

see improvements in efficiency of price setting being 

an outcome of HFT. The searching activity of algorithms 

detects opportunities in price trends that algorithms can 

trade on. This is claimed to reduce volatility and create a 

situation of greater ‘price efficiency’, presumably through 

the ability of algorithms to detect small opportunities earlier 

and trade. 

But there is a problem in the approach of these studies 

because an overall view of trading over a year or more is 

taken. By doing this the phenomena of ‘flash crashes’ is 

lost in the extensive times of more normal price variation. 

Of the nearly 10,000 of these abrupt and brief glitches 

detected by market monitors from 2006 to 2010 the most 

notorious happened on May 6 2010. The NYSE lost 9.2 per 

cent in a few hectic minutes. 

The Flash Crash of May 6 2010 on the NYSE (from Golub) 


A similar event was detected just recently, September 

13 2012 at 12:25:27. Observers at Nanex, a company 

supplying real time data as well as monitoring the NYSE, 

observed that: 

The market ‘experienced an evaporation of liquidity at such 

an alarming rate that it produced one of the most disturbing 

charts on market stability we have ever seen. This event 

tells us that either one firm controls 80% of this contract, 

or that algorithms have become dangerously susceptible 

to herd behaviour and can be triggered to stampede in a 

heartbeat.’ 

This type of break down in the market is expected by those 

who understand the nature of algorithms and interactions 

in trading. 

CONCLUSIONS 

HFT managed by algorithms has created a binary market 

in the two totally different systems of value involved: 

1. the ‘real’ one seeks an interest in the capital wealth of 

companies, a long term interest a market for capital; 

2. the second seeks to make money from price change, 

a very short term interest. 

In this second system there is no interest in holding a 

share in a company. The real intent of stock markets has 

now become, or is rapidly becoming, the minor part of the 

market. We can say that the market has been stolen or at 

least corrupted. 

The division is a recent one made possible by HFT. Its 

development has meant a reduction in the effectiveness, 

and possibly efficiency, of the market because of the 

instability introduced by HFT. The ‘flash crashes’ are 

observed but how they happen is little understood. ‘Flash 

crashes’ could be more serious, even triggering market 

collapse. Furthermore the introduction of HFT has created 

marked inequities between the new algorithmic systems 

and those trading by the slow lane. 

The systems, being new, are far from perfect and financial 

institutions, like Credit Suisse, are being fined for failures. 

The Knight Capital fiasco, a loss of $US440M in a few 

hours caused by its own HFT failure, shows how not only 

the market is threatened but traders can be damaged 

by ineffective systems. On 28 September the Australian 

Financial Review reprinted a New York Times report which 

reviewed the interest developing world wide in the light of 

US experience. 

We should be concerned because so much of our future 

prosperity is in investments traded on the exchange, not to 

mention the central place of the exchange in the economy. 

Public policy has promoted private investment to reduce 

the demands of an ageing population on the public purse. 

Investment in shares and funds holding shares on the stock 

market dominates Australian superannuation schemes. 

Such a fundamental system has to have an effective, 

efficient and equitable market. A failure of the market in 

its complex form will put much greater pressure on public 

pensions. It is difficult to agree with the sanguine view of 

the ASX that there is efficiency in algorithmic trading.

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^These returns were calculated by Lincoln as a measure of the historical performance of the strategy as at the date displayed above. To understand 

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up and down. Past performance is not a reliable indicator of future performance. 

Important information: Lincoln Indicators Pty Ltd ACN 006 715 573. AFSL 237740. Our advice has been prepared without taking into account your 

personal circumstances. You should therefore consider its appropriateness in light of your objectives, financial situation and needs, before acting on it. 

Investments can go up and down. Past performance is not a reliable indicator of future performance. 

© 2012 Lincoln Indicators Pty Ltd. All rights reserved. 


Whilst the average couple retire with around $300,000 in 

super, self managed super fund (SMSF) trustees have an 

average of $900,000 in their fund which is enough for most 

to not only retire with a comfortable income of more than 

$50,000 per annum but also to be able to attract some 

age pension and ancillary benefits from Centrelink as the 

asset test rises to $1,050,000 for a home-owning couple. 

Of the $1.4 trillion in superannuation in Australia, around 

35% or more is held in SMSFs encompassing more than 

900,000 individual members. Interestingly, from a wealth 

distribution aspect, around 4.2% of the population control 

more than one third of all funds held in the superannuation 

environment. Conclusively, SMSFs are one of the primary 

wealth vehicles for the financially fit. 

SMSFs are growing at a rate of around 7-9,000 new 

establishments per quarter and around 25% have less than 

$200,000 in their fund, 50% have between $200,000 and 

$1million and 25% have more than $1 million. Two thirds 

of all funds fall into NSW and Victoria with the Northern 

territory making up a minor 0.3% of all funds. 

Statistics aside, the growth of SMSFs have been 

precipitated by a number of key factors including the point 

that trustees simply want to be in control of their destiny and 

the master of their own domain. Control and flexibility are 

key reasons to the many establishments of SMSFs however, 

the growth can also be attributed to professional including 

accountants and financial advisers recommending clients 

establish a SMSF. 

Throughout the enduring years the GFC, many investors 

become disenfranchised with passive default funds in 

the industry and retail superannuation sectors losing 

money owing to the their exposure to asset investors 

didn’t understand and had no control over. Today SMSFs 

typically invest into Australian shares and cash which 

held up better than many international products allowing 

SMSFs to outperform in times of volatility. The sustenance 

of this strategy is currently being tested however a recent 

Roy Morgan survey indicated 64% of SMSF trustees are 

satisfied with their returns from super compared to 49% 

for industry funds and 45% for retail funds. 

Whilst some industry and retail funds outperformed their 

SMSF counterparts, SMSF trustees still rates their funds 

more highly. You see, it’s not just about returns. It’s about 

control, comfort, the ability to control risk better and the 

understanding of where and how your funds are invested. 

SMSF trustees are more engaged and better educated and 

thus have a greater level of satisfaction with superannuation 

as an investment vehicle. 

Moreover, the choice of available investments has also 

proved a boon for SMSFs. For example, many small 


sMsFs BEcOME 

tHE MOst pOpULar 

rEtirEMENt VEHicLE 

FOr tHE wEaLtHy 

by Sam Henderson 

CEO & Senior Financial Adviser 

Henderson Maxwell 

business owners choose to buy their business property in 

their super fund and this primarily creates their funding for 

retirement. SMSF trustees can buy direct shares and be 

selective in their choice of stocks. So too, they can buy 

self-funding instalment warrants allowing them to gear and 

take advantage of reducing contribution taxes in super and 

leveraging their portfolios. Conservative minded trustees 

can invest in term deposits without having to worry about 

global economics and political instability in countries they 

have only read about that have been negatively affecting 

their peers’ retirement savings. 

Whilst shares and cash have been the primary focus of 

SMSF trustees, recent statistics indicate the ability to 

borrow money and buy property in SMSFs has led to 

many younger couples now using SMSFs to pool their 

super resources. This is evidenced in the recent Australian 

Taxation Office Statistics showing a rise in directly held 

property and gearing in SMSFs. 

Why wouldn’t a couple combine their super funds and use 

the proceeds to build a property or share portfolio using 

the benefits of gearing to leverage their ability to buy more 

valuable assets and then repay that debt with tax effective 

super contributions. Then at retirement, under the current 

legislation, they can sell the asset free of capital gains tax 

or live off the income without paying income tax on their 

drawings or tax on the rent. 

So too, by holding shares at retirement, which often makes 

more sense than property owing to property’s higher 

holding costs and lower yields, you receive all your franking 

credits back as a tax refund and you are devoid of capital 

gains tax and income tax on your account based pensions. 

With all the tax benefits of superannuation combined with 

the control and flexibility provided by using a SMSF vehicle, 

it’s little wonder their popularity is exploding. Essential to 

the process though, is ensuring a solid understanding of 

the rules and regulations surrounding SMSFs. Download 

the ATOs SMSF booklets so you don’t fall foul of their 

extensive audit program at www.ato.gov.au and follow the 

prompts to the SMSF area to download their booklets on 

how to run a SMSF. 

My final piece of advice is to seek advice. Talk to your 

Accountant or a financial adviser who specialises in SMSFs 

and who is ideally member of SPAA (Self Managed Super 

Fund Professional Association of Australia) and if you ever 

want any tips or ideas, you can always catch me every 

Friday night on Sky News Business at 8pm for Your Money 

Your Call - Retirement. Remember, there’s never a silly 

question when it comes to your own money.

STOCK 

WATCH 

Elio D’Amato, Chief Executive Officer of Lincoln Indicators 

profiles automotive dealership, AP Eagers Limited (APE). 

APE has been one of the few standouts in the retail sector, 

delivering high profit growth despite subdued consumer 

sentiment. 

APE attained its Stock Doctor Star Stock status after 

delivering strong operating results for the June 2012 interim 

period and subsequently announcing a strong outlook for the 

remainder of FY2012. Due to a long history of profitability, 

strong cash generation and moderate gearing levels, the 

company is in a position of Strong Financial Health. Low 

gearing levels reflect the company’s use of bailment finance 

(a cost effective form of finance in which the liability is 

secured against vehicle inventory). 

The company delivered underlying pre-tax profit of $37 

million for the June 2012 interim period, up nearly 33% 

compared to the same time last year when trading was 

negatively impacted by a shortage in new vehicle stock as a 

result of natural disasters in Japan and Thailand. Additionally, 

low interest rate finance deals offered by car manufacturers 

helped to stimulate demand, as did the strong Australian 

dollar which made imported car brands more affordable. 

Consequently, pre-abnormal earnings per share (EPS) rose 

29% from 12.43 cents to 16.00 cents. Annualised return on 

assets (ROA) improved from 8% to 10%, reflecting increased 

revenues and profit margins. 

APE owns 97 dealerships selling new and used motor 

vehicles under franchise agreements and has a diversified 

portfolio of automotive brands, including all of the top 

selling car brands in Australia such as Toyota and Mazda. 

The portfolio also includes eight of the nine bestselling 

luxury car brands in Australia such as BMW, Land Rover 

and Porsche. In addition, the company distributes car parts 

and accessories, provides repair and maintenance services 

and facilitates vehicle financing through third party sources. 

APE’s dealerships tend to be strategically clustered, the 

majority (65%) of which are operated from company owned 

real estate located on high profile main roads. At the end of 

June 2012, the property portfolio was valued at $337 million 

with most of the properties located in Queensland and NSW. 

AP EAGERS LTD 

(APE) 

by Elio D’Amato, Chief Executive Officer 

and Head of Research at Lincoln 

Although APE’s share price has outperformed the All 

Ordinaries Index in the last 12 months, the last closing price 

of $3.91 (9 November 2012) represents a 12% discount to 

the Lincoln Valuation of $4.47, indicating that it is possibly 

undervalued. 

APE has consistently returned profits to shareholders in the 

form of fully franked dividends, and given its ample cash 

flows, we are expecting dividends to continue. At current 

prices the stock currently possesses a dividend yield of 

5.12%. 

Source: Lincoln Stock Doctor 

Despite challenging retail conditions, APE’s prospects look 

promising and the company is expecting to grow pre-tax 

profit to around $75 million in FY2012, up from $58 million in 

the previous year. The demand for motor vehicles continues 

to be strong, driven by favorable financing terms provided 

by car manufacturers. 

Our greatest concern for APE however is the outlook for 

unemployment, which could increase if global economic 

uncertainty continues to impact Australia especially in the 

resources and manufacturing sectors. 

Lincoln is one of Australia’s premier fundamental analysis research 

houses and fund manager offering intelligent share market solutions 

for all Australian investors no matter what level of investor they are 

through its tiered Stock Doctor member program. 

Important Information Lincoln Indicators Pty Ltd ACN 006 715 573 (Lincoln) AFSL 237740. This information is current as at 14 November 2012. 

This communication is for educational purposes but may contain general product advice. The advice has been prepared without taking into account your personal circumstances. You should 

therefore consider the appropriateness of the advice in light of your objections, financial situation and needs, before acting on it. Investments can go up and down. Past performance is not a 

reliable indicator of future performance. 

Lincoln Indicators Pty Ltd, its director, its employees and/or its associates may hold interests in any stocks mentioned in this communication. This position could change at any time without notice. 

Indices data source: ASX-listed company data is copyright and provided by Morningstar Australasia Pty Ltd (‘Morningstar’) © 2009 ABN: 95 090 665 544, AFSL: 240892 (a subsidiary of Morningstar, 

Inc). All rights reserved. The data and content contained herein are not guaranteed to be accurate, complete or timely. Neither Morningstar, nor its affiliates nor their content providers will 

have any liability for use or distribution of any of this information. To the extent that any of this information constitutes advice, it is general advice that has been prepared by Morningstar without 

reference to your objectives, financial situation or needs. Before acting, you should consider the appropriateness of the advice and obtain financial, legal and taxation advice before making any 

financial investment decision. Investors should obtain the relevant product disclosure statement and consider it before making any decision to invest. Please refer to our Financial Services 

Guide (FSG) for more information www.morningstar.com.au/fsg.asp. Some of the material provided is published under licence from ASX Operations Pty Limited ACN 004 523 782 (‘ASXO’). 

Consensus forecast data is copyright Thomson Financial. 

Economic and other information taken into account in forming any opinions are subject to change and therefore opinions expressed as to future matters may no longer be reliable. Lincoln Indicators 

Pty Ltd, its director, employees and agents, makes no representation and gives no warranty as to the accuracy, reliability and completeness or suitability of the information contained in this 

communication and do not accept any responsibility for any errors, or inaccuracies in, or omissions from this communication; and shall not be liable for any loss or damage howsoever arising 

(including by reason of negligence or otherwise) as a result of any person acting or refraining from acting in reliance on any EQUITY information December contained herein. 2012 No reader / January should 2013 rely on this Page commu- 11 

nication, as it does not purport to be comprehensive or to render personal advice. This disclaimer does not purport to exclude any warranties implied by law that may not be lawfully excluded.

stOck 

VaLUatiON 

part iii 

By Michael Kemp 

Chief Analyst, Barefoot Blueprint 

This is the third in a series of articles on stock valuation. 

The first two explored the early development of valuation 

methods both in Europe and the US. 

In this article we’ll enter the 20th Century. This is the era 

when equity valuation methods, although already well 

established and understood, were shaped into the formulae 

and vocabulary more familiar to today’s investors. 

LEgisLatiVE cHaNgE BEFittiNg a NEw Era 

The dawn of the twentieth Century saw the creation of the 

first billion-dollar company. Following brief negotiations 

US Steel was floated on the New York Stock Exchange 

in 1901. This $US1.4 billion corporate gorilla symbolised 

the growing shift from private to public ownership of large 

industrial enterprises. The shift was driven by a growing 

need for large quantities of capital. Enter the new age - the 

age of broad-based share ownership by the common man. 

This introduced a need for improved financial communication. 

No longer did management and ownership coexist in the 

hands of a single person or family. Shareholders were the 

new owners. And they were demanding more information 

on how their companies were performing. 

The New York Stock Exchange became increasingly aware 

of this need. In 1895, only six years prior to the US Steel 

float, it had proposed what was then a radical new idea 

- that companies distribute annual earnings reports to 

shareholders. But a proposal in the absence of legislation 

remains just a proposal. Compliance rates remained low. 

Companies offered many excuses for this. Here’s a couple 

of the more interesting ones, as they were stated at the time: 


• that in making their affairs known companies would 

“lay their trade secrets before competitors.” 

• that stockholders should be wholly satisfied in receiving 

regular dividends and that financial disclosure would 

likely subject the directors to “annoying inquisitions 

from tax gatherers.” 

The whole debate regarding the need for better levels of 

financial reporting gained momentum as the new century 

unfolded. Henry Clews, an influential broker of the day, was 

an early advocate for reform and his calls were increasingly 

backed by some of the more ethically minded financiers. 

But it takes massive shifts in public opinion for real reform to 

occur. And there’s nothing like a full-blown financial crisis to 

heighten public opinion. There were two substantial crises 

around this time – the Panic of 1907 and The Crash of 1929. 

The public were fed up with boardroom opacity. Their 

concerns were addressed by two substantial government 

inquiries. In the wake of the 1907 Panic it was the Pujo 

investigation. In the wake of the 1929 Crash it was the 

Pecora-led Senate Commission. 

Leading up to the 1929 Crash less than one third of listed 

companies in the US published quarterly reports. A third 

didn’t publish reports at all. New legislation was about to 

change all that. The Senate Commission which followed 

the 1929 Crash led to the Securities Act of 1933 and the 

establishment of The Securities and Exchange Commission. 

Regular financial reporting became mandatory for listed 

companies. 

Financial information was now freely available. This became 

a fertile period for the development and refinement of

financial analysis. Early contributions came from great 

thinkers like John Burr Williams, Ben Graham, Frank Knight 

and John Maynard Keynes. Many of the concepts and 

methods they proposed in the 1930s are still used today 

in the trenches of broking and investment houses around 

the world. 

So I think it’s now time to leave the historical theme behind 

and swing into a more contemporary mode. Let’s start 

with the Dividend Discount Model, still used today, and 

popularized by John Burr Williams in his 1938 book, “The 

Theory of Investment Value.” 

DiViDEND DiscOUNt MODEL 

The Dividend Discount Model (DDM) is often credited to 

Williams. But even Williams acknowledged (in his book) 

that the idea wasn’t his. The DDM was most likely first used 

back in the 17th Century. 

It’s a conceptually simple way of calculating a stock’s 

intrinsic value. It’s based on the valid premise that a stock is 

worth the present value of the future cash flows ownership 

provides. What are those cash flows? Dividends. The DDM 

asks the analyst to only consider dividends in the valuation. 

Not earnings. That’s because shareholders don’t receive 

that part of earnings which is retained by the company. 

Some readers might question the last statement, arguing 

that undistributed earnings are also important, and should 

be included in any valuation model. After all, don’t the 

earnings retained by the company drive capital gains? And 

aren’t capital gains realised by the shareholder when the 

shares are sold? Therefore don’t retained earnings also 

have a value? The answer is “yes” to all three questions. 

But the DDM takes retained earnings into consideration. 

To understand how you need to ask: who will deliver the 

capital gain to you when you sell? The answer is: the person 

who buys your shares. Then ask: how will that person value 

the shares they purchase? Answer: the present value of 

the dividend stream they expect to receive in the future. 

Put another way, the capital gain you receive forms part 

of the new owner’s dividend expectation. The earnings 

which were retained by the company during the term of 

your ownership have increased its capital base allowing it 

to deliver larger dividends in the future. So it’s possible to 

deliver a valuation by considering dividends alone. 

Confused? Then it might be clearer if you ignore ownership 

changes altogether. Imagine that only one person ever 

holds the shares. To simplify the example ignore capital 

raisings and capital returns. All he or she will ever receive 

is dividends. The underlying value of the shares doesn’t 

change just because ownership does. 

Sounds great. Where’s the catch? As I said earlier the DDM 

is conceptually simple. But as a practical tool it borders on 

useless. Problems? Here are three biggies. 

Firstly who knows what the future dividends are going to 

be? It’s difficult enough predicting next year’s dividend yet 

alone those well into the future. 

The second problem is the changing value of money. 

Assuming an inflationary environment future dollars will 

be worth less than today’s dollars. This means each future 

dividend has to be discounted by an appropriate factor to 

bring it back to a present value. After all, its present value 

which you are attempting to calculate. This factor is termed 

the discount rate. It also varies with the degree of risk 

associated with the investment. What is the appropriate 

discount rate to use? There isn’t one single rate applicable 

to all companies or time periods. Nor has anyone developed 

a suitable method for calculating what it might be. (CAPM 

isn’t it!) Which is quite a problem since the valuation derived 

from using the DDM is extremely sensitive to variations in 

the discount rate used. 

The third major problem is the sheer logistics of the 

calculation. The DDM asks you to perform a separate 

calculation for every cash flow yet to be received. Assuming 

an infinite company life, that’s a lot of dividends to throw 

into a formula - nothing short of a mathematical nightmare. 

It’s therefore no wonder that investment great, Ben Graham 

had this to say (shortly before his death in 1976) of the DDM: 

“Clearly, Mr. William’s method stands or falls not on his 

formulas (which are unimpeachable) but on his assumptions 

with respect to their numerous variables – e.g., the rates 

of growth, of distribution of profits, and of interest; and 

the “terminal value” when growth ceases. One wonders 

whether there may be not too great a discrepancy between 

the necessarily hit-or-miss character of these assumptions 

and the highly refined mathematical treatment to which 

they are subjected.” 

What an eloquent way of saying “garbage in, garbage out”. 

gOrDON grOwtH MODEL 

The Gordon Growth Model is another stock valuation tool 

based on dividends. In reality it’s just a modification of the 

DDM. Its advantage is it addresses the third of the abovementioned 

criticisms. By adding one further assumption 

– that of constant dividend growth - it turns the laborious 

DDM calculation into a simple one. It states: 

intrinsic value = d1 

r - g 

Where: 

D1 = Estimate of next year’s dividend. 

r = Discount Rate. 

g = Growth rate of dividends 

It can be applied when dividend growth is expected to be 

constant. If not, analysts typically use the DDM and the 

Gordon Growth Model together. They apply the DDM to the 

near term – using estimates for individual dividends likely 

paid over the next several years. And they use the Gordon 

Growth Model to calculate a value for all dividends paid 

beyond the last single dividend estimate (to produce a so 

called terminal value). 

Is the Gordon Growth Model overly simplistic? You betcha. 

Is it a useful formula? Not really. In fact I feel a bit sorry for 

Myron Gordon, the US economist after which the formula 

is named. He was a smart guy. His 1962 book, “The 

Investment, Financing and Valuation of the Corporation” 

is a good one. Yet his name is associated with a formula 

which people love to criticize. The irony is Gordon criticized 

it as well. He presented the formula in his book and then 

used it as a conceptual punching bag. He too was critical 

of its simplicity. Trouble is people have forgotten his book 

but remembered the formula. 

In the next edition of EQUITY I’ll continue the search for an 

appropriate intrinsic value formula. 


iNVEstOr 

BEHaViOUr 

& cHart pattErNs 

By Bill Dodd 

ASA MEMBER 

This is the second of two articles on investor behaviour. Most 

successful investing strategies are trend following which 

means that the investor buys a trending stock and manages 

the open position to optimize profit and minimize loss and the 

stock is sold as or before the trend fails. This means that an 

investor who understands the trend can use knowledge of 

continuation and reversal patterns to advantage. 

This present discussion centres on patterns which confirm that 

the trend will continue. These continuation patterns are often 

referred to as consolidation patterns. A consolidation is a point 

in the uptrend where there is a sideways move which may last 

for many weeks or months before the trend continues. While 

it is useful to note that these patterns exist and contribute to 

profitable investing it is important to understand the role that 

trader/investor psychology plays in their formation. These 

patterns recur time and time again and if the trader/investor 

understands the psychological basis of the battle between 

buyer and seller which causes pattern formation they are in 

a better position to profit in the market. There are a number 

of patterns which are typical of consolidations but here only 

the triangle and flag patterns are discussed. 

TRIANGLES 

There are a number of different types of triangles but the 

discussion here is confined to the right angled triangle, so 

named because one of the boundaries is almost horizontal. 

The chart below shows a right angled triangle which is more 

specifically described as an ascending triangle, named 

because the price is expected to rise from the triangle. The 

ascending triangle (and its counterpart in a down trend, the 

descending triangle) is a high probability continuation pattern. 

This is a pattern that traders/investors use to advantage by 

buying the stock on a breakout from the horizontal top of the 

triangle which usually precedes a significant move. 


Reference:Edwards, R.D and Magee, J. (1992) 

Technical Analysis of Stock Trends. NY Institute of Finance 

But why does this pattern occur so often and why should it 

reliably predict a continuation of the trend? The top boundary 

of the pattern is caused by sellers who take a profit, believing 

that the stock price is unlikely to go any higher. The horizontal 

top of the triangle is maintained by sellers while the lower 

up sloping part of the triangle is caused by increasing buyer 

demand coming in at higher and higher prices as more buyers 

enter the market. Eventually supply is absorbed as a result of 

buyer demand and price breaks out from the top of the triangle 

pattern. The price breakout is often spectacular as is shown 

in the above chart. 

A stock which is in high demand may experience a series 

of triangles as is shown in the next chart, with each triangle 

showing the same characteristics and breaking out as the 

trend continues. 

The other interesting aspect of the triangle is that the pattern 

can often be used reliably to predict future price targets. Here 

a projection of the base of the triangle provides the minimum 

projected move for the stock after it breaks from the triangle 

pattern. This price projection is often very accurate, to the 

point where traders will enter the stock with a buy stop on 

breakout from the pattern and immediately place a sell order 

in the market at the projected target price. 

THE SYMMETRICAL TRIANGLE 

The symmetrical triangle seen in the chart below must not be 

confused with the right angled triangle and is not a continuation 

pattern. This appropriately named triangle gives the investor 

little information because there is no indication whether the 

subsequent movement will be up or down and movement out 

of this triangle is usually very abrupt and often spectacular.

FLAG PATTERNS 

Flag patterns are perhaps less common on charts but provide 

some interesting opportunities for investors who recognize 

them. The chart below is a good example of a flag pattern. 

The flag pole is formed from the very strong trending move 

which terminates in the flag which comprises a small 

parallelogram sloping back against the prevailing trend. The 

consolidation phase of the flag is often accompanied by a 

significant reduction in volume, although this is more obvious 

in low cap stocks. The flag formation starts when there is a 

marked fall in demand for the stock probably caused by profit 

taking after the very rapid price rise. There is a subsequent 

pull back which is short lived and is followed by a series of 

rallies and retreats. With each fluctuation there is a lower top 

and lower bottom which is usually bounded by parallel lines to 

form the flag. An abrupt breakout from the flag pattern usually 

results in a resumption of a strong trend. These patterns are 

more evident on daily charts but may also occur on longer term 

charts. An example is the weekly chart of Commonwealth 

Bank shown below, where the flag is inverted as part of the 

down trend as part of the long term pattern. 

The flag pattern on CBA occurred in 2008 near the end of 

the bear market. This chart was used at an investor meeting 

in October 2008 as an example of a flag pattern with the 

comment being made at the time, that the pattern projected a 

market fall (based on a projection from the flag pole length) of 

this stock to about $24. The next chart shows how accurate 

that projection was, with a low of $24.03 set during January 

of 2009. 

The interesting observation about flag patterns is that they may 

often occur near the end of trends, in which case the projected 

target from the pattern is in fact a projection of the end of the 

trend. The Commonwealth Bank chart is one such example. 

Another example where a flag pattern indicates the end of a 

trend is from the recent daily chart of RIO below. Here the flag 

formation on the daily chart provided a projected target very 

close to the market bottom. Technical analysis using RSI and 

other methods suggested that the price of $48.37 was the low 

for this trend of RIO. Time will tell if this is the low or whether 

the current pattern is merely a counter trend. 

CONCLUSION 

Breakouts from both flags and triangle patterns not only offer a 

high probability of a future market move but often result in very 

fast moves which prove to be very profitable for experienced 

traders/investors. 

While the classical text on market patterns by Edward and 

Magee considers that the triangle and flag patterns are more 

reliable on daily charts and only over very short time frames, 

these patterns are also present on weekly and monthly charts 

where they give high probability outcomes. The above chart 

of CBA is one example of this. 

The stock market is often illogical and shows significant 

volatility. An understanding of chart patterns such as triangles 

and flags, which form as a result of crowd psychology 

provide the investor with an insight into high probability of 

trend continuation patterns which is a very useful adjunct to 

fundamental analysis. 

Bill Dodd is an independent investor who believes that anyone can learn to invest and become financially independent. His courses on investing in the 

stock market provide an understanding of the stock market and how to develop an investment EQUITY strategy. December He continues 2012 to provide / January investor 2013 education Page 15 

on his website at http://aust-investor.com

asa cHristMas OFFicE HOUrs 

The ASA office will close on Thursday, 20 December and 

reopen on Monday, 7 January. On behalf of the staff we 

would like to wish all members a joyous Christmas, a safe 

and prosperous new year and look forward to working with 

members next year to both improve services and grow 

the ASA. 

HigH FrEQUENcy traDiNg sUrVEy 

ASA members were invited to participate in a survey on high 

frequency trading conducted between September 5 and 

October 7 this year. Of the 1754 respondents, 73.5% were 

retail investors, 12.7% were private client advisor/brokers 

and 5.8% were fund managers. The remainder included 

analysts, institutional representatives and listed company 

representatives. The key findings from the survey were: 

• 96.6% of respondents believe high frequency and 

algorithmic trading is having negative impact on ASX; 

• 89.3% of respondents believe high frequency and 

algorithmic trading impacts the ability of the ASX to 

conduct a fair and transparent market; 

• 90.3% believe the greatest impact of high frequency 

and algorithmic trading is a decrease in fairness and 

market transparency on the ASX; 

• 78.1% of respondents say the algorithmic and high 

frequency trading makes them reluctant to trade on 

the ASX (this increases to 85% among retail investors); 

• Respondents varied on preferred methods of controlling 

the impact of high frequency and algorithmic trading 

on the ASX; and 

• Majority of respondents believe ASIC has inadequate 

regulatory and supervisory powers and tools. 

Almost half of all respondents were focused primarily on 

ASX-listed small cap/micro-cap companies, while 25.5% 

were focused on ASX 300 companies, 20% on ASX 200 

companies and 5.5% on ASX 100 companies. 


NEWSDESK 

BrisBaNE cHristMas LUNcH 

ASA Christmas lunches are a great opportunity for 

members to gather and enjoy social interaction. The 

December meeting of ASA in Brisbane will be very special 

as for the first time in many years the presenters will be 

our very own Queensland Company Monitors. We will find 

out firsthand the stories behind the AGM and Proxy Voting 

process. Queensland has some very interesting companies 

so this should be very informative. Following this meeting 

members and guests are welcome to stay in our room to 

partake in Christmas cheer. 

Date: Wednesday, 12 December 2012 

Time: 11.00am, lunch will follow from approximately 

12.30pm, registration opens at 10.30am 

Cost: $20.00pp for finger food and unlimited tea/coffee. 

Drinks may be purchased at bar prices. 

Venue: The Melbourne Hotel, The 12 Function Room 

10 Browning Street, West End 

Register: Members and guests will pay on entry and be 

given an identifying sticker. Payments to be made by 11am 

on 12 December. 

syDNEy cHristMas LUNcH 

Sydney will hold their Christmas lunch at the Kirribilli Hotel 

on Tuesday, 18 December. Guest speaker will be ASA 

CEO Vas Kolesnikoff who will outline in depth the range of 

issues faced by the organisation in addressing shareholder 

concerns. His topic titled ASA Policy – A current season 

wrap will no doubt entertain, enlighten and inform you. 

Partners, guests and non-members are most welcome. 

Date: Tuesday, 18 December 2012 

Time: 12.00 midday, registration 11.30am 

Cost: $44.00pp for two course seated meal. 

Drinks may be purchased at bar prices. 

Venue: Kirribilli Hotel, 35-37 Broughton Street 

Register: Call 1300 368 448 or register online at 

www.asa.asn.au via ASA EVENTS. 

RSVP: Registrations close Thursday, 13 December

BrickBats 

To Link Market Services for providing bodgie Origin 

shareholder data to their mailing house causing Origin to 

postpone the AGM. Mailing the Notice of Meeting and 

Annual Report is a core service provision and a one that 

should work first time, every time. 

To Perpetual for joining with the Queensland Government 

and voting in favour of the QR National remuneration report, 

thereby saving them from a “first strike”. The QR National 

board has used discretion to increase management bonuses 

for two years in a row. Perpetual received a large allocation 

of shares in the recent $500 million placement by the 

Queensland Government. 

To Linc Energy for failing to reform its remuneration policies 

after a “first strike” in 2011 and then calling the spill meeting 

for half an hour after the AGM. CEO Peter Bond owns almost 

40% and clearly intends to simply re-instate the board. 

EQUITY provides a platform for ASA members to contribute 

their comments for the benefits of other members. Comments 

included here do not necessarily reflect those of all members. 

Please email your contributions to equity@asa.asn.au or mail 

your contribution to ASA, PO Box 519, Chatswood NSW, 

2057. Thank you to all of our contributors. 

A HEADLINE GRABBING 

2012 AGM SEASON fOR 

The 2012 AGM season was a very busy time for ASA with 

monitors attending almost 100 meetings in just 9 weeks, 

including several smaller companies facing “second 

strikes”. 

ASA generated a record amount of media coverage 

this season, partly due to the tactic of drawing greater 

attention to our various Voting Intentions reports. 

And with that greater focus on our written reports, there 

was consequently also increased media coverage of 

the issues raised verbally by ASA monitors at AGMs 

across the country. All up, ASA was in mentioned in the 

mainstream media on issues relating to about 30 different 

stocks. 

AGM reports averaging 400-600 words have been pouring 

in and almost 100 of these are now freely available on 

the ASA website. It wasn’t easy reducing this down to 

35 written reports for Equity averaging about 320 words 

each. 

Rather than only covering the biggest companies, we 

focused on AGM reports where something interesting 

happened, such as a protest vote against a director or a 

board avoiding a second strike. 

BOUQUEts 

To the new Board of PaperlinX - all appointed just weeks 

before the AGM following the resignation of the previous 

board. The new directors voted against the Remuneration 

Report resolution citing certain payments which they 

considered inappropriate. Whilst having no accountability 

for the report the new board, acting on principle, has been 

part of a First Strike vote upon itself. 

To Origin for doing the right thing by shareholders and 

postponing its AGM. Link Market Services inadvertently 

dropped about a third of shareholders off the notice of 

meeting mailing list. By postponing, Origin gave all 

shareholders adequate notice to consider the resolutions 

to be put before the meeting. Inconvenient certainly, but 

the right call. 

To AFIC chairman Bruce Teele who highlighted and 

forewarned that franking credits through Government policy 

are being whittled away. By excluding both the mining tax 

(MRRT) and the carbon tax, the franking system is bypassed 

and lessened. The franking system is also threatened 

as Australian manufacturing moves offshore and when 

overseas companies buy locally-listed companies. 

The publishing schedule 

meant it wasn’t possible to 

include reports from late 

November, but we will have 

another bumper edition in the 

February edition of Equity. 

You’ll notice in the following 17 pages that we’ve also 

introduced snappy headlines for the first time. A quick 

read of the reports will show a continuing strong focus 

on remuneration issues, plus ongoing strength in our 

proxy voting power. 

We recommended against a lot less remuneration reports 

this year and the overall against voting was significantly 

lower, which suggests the “two strikes” regime is working 

and boards are putting in place more appropriate 

remuneration arrangements. 

Finally, I’d like to thank all monitors for their dedication and 

commitment throughout the AGM season and especially 

our over-worked Company Monitoring Committee chairs 

in each state – Ian Curry, John Campbell, Michael Perry, 

Denis O’Sullivan and Bob Ritchie. 

By stEpHEN MayNE 

pOLicy aND ENgagEMENt cO-OrDiNatOr 


BY IAN CURRY 

AMCOR AGM: 

AMCOR LTD [AMC] 

Date: 25th October 2012 

Venue : Park Hyatt Hotel Melbourne 

Value of proxies : $21 million 

Market capitalisation: $9.39 billion 

Pre AGM meeting: Yes. 

NPAT: $436.8 million 

Current PE Ratio: 22.9 

ANSELL [ANN] 

BY RICHARD GILES 

Date: 22 October 2012 

Venue RACV Club Bourke St 

Value of proxies : $4.2m 

ANSELL AGM: 

ASA REVERSES PAST OPPOSITION AS 

REM REPORT SAILS THROUGH 

Amcor achieved further growth in 2011-12 with net profit up 15.7% to $412.6 million. 

The company continues to have significant items relating to acquisitions and closing of 

old plants, which totalled $222.3 million in 2011-12 courtesy of Alcan Packaging, Ball 

Plastics and the opening of the new mill at Botany. Free cash flow was $443.6 million 

and the annual dividend lifted 1c to 37c. Gearing at 51% is comfortably managed 

and interest cover is high at 7.6 times. 

Amcor has improved its safety record over the past 7 years. It is expected that 

dividends in future will increase and buybacks may take place. Acquisitions are seen 

as a means of profitable growth and emerging markets are a key focus. The new 

recycled paper machine at Botany will have a significant impact on the environment. 

First quarter results are on track and increased earnings are forecast for the 2013 year. 

Flexibles and Rigid Plastics will do well while Australasia and Packaging Distribution 

results will be around the same as 2012. 

Shareholders asked questions about dividends, hybrid securities, waste and litter. 

Chairman Chris Roberts was asked about compliance with Accounting standards 

and advised the accounts were prepared in accordance with them and the Auditors 

had signed off without any concerns. ASA asked about the impact of plain packaging 

for cigarettes. The company disagrees with this action and advised this segment 

accounts for around 8% of revenue. 

Directors facing re-election addressed the meeting and received over 98% of votes 

in favour. The remuneration report and the issue of performance rights to the MD 

were approved with votes in favour of 97%. After extensive dialogue, ASA voted in 

support of both resolutions but will continue to discuss further improvements in overall 

incentive arrangements. 

Alterations to the Constitution were approved by more than 98%. However, ASA was 

critical of two changes. The first was to give the company power to refuse the transfer 

of unmarketable parcels of shares if this was paper based. This would impact on 

dealing with shares held in deceased estates. The second change would require a 

shareholder giving a proxy to a body corporate such as ASA to not only put the name 

in full but also the full name or title of the individual representative of the corporate body. 

In most instances the shareholder will not know that name and the present proxy form 

does not provide space to do so. The Chairman agreed to look further at this issue. 

BARNES IN, BARNES OUT AS 

BARNSTORMING PERfORMANCE 

CONTINUES 

The meeting commenced with the usual type of presentations by the Chairman and 

CEO, during which earnings guidance for 2012-13 was confirmed with an increase 

of 6-11% over 2011-12 expected. The CEO said that results for the 1st quarter of 

2013 were slightly below plan but he was confident the shortfall would be made up 

later in the year. 

The company utilised direct electronic voting for the first time with total votes displayed 

immediately after each voting item, without a separate figure for the proxy component, 

which is probably more than 95% of the total. Total votes cast represented about 

75% of the shares on issue. 

There was one director re-election (Marrissa Peterson) and one director election (John 

Bevan). Both candidates spoke to the meeting and received around 99% in favour. The 

ASA supported both candidates. The meeting was the last for Peter Barnes, a former 

Phillip Morris executive who has served as Metcash chair and a News Corp director, 

who retired after 11 years on the Board and 7 years as Chairman. He is succeeded 

by former NAB executive Glenn Barnes (no relation) who joined the Board in 2005. 

In regard to Remuneration, the Company has introduced in 2012 a new long term 

incentive scheme with a 50% equity component (100% for the CEO) replacing a 

more modest scheme. The substantially increased equity component clearly troubled 

some shareholders as the CEO’s performance rights attracted an 8% against vote. 

The Remuneration Report received an Against vote of just over 5%, compared with 

about 6.5% in 2011. The ASA supported both resolutions but spoke at the meeting 

to express disappointment at the low current shareholdings of all senior execs, except 

for one. Some senior execs have no shares and the CEO only has 10,000. 

Market capitalisation $2.1 billion 

At one level, Ansell executives do appear excessively paid, but the globalised company 

Pre AGM meeting: Yes 

has performed well for Pacific Dunlop shareholders who stayed in for the ride and it 

is based in the US where the executive market is more generous. 

NPAT: $130m 

If Pacific Dunlop had also hung onto Cochlear in the mid-1990s it would have been 

PE EQUITY Ratio: 16 December 2012 / January 2013 Page 18a 

fabulously successful conglomerate like Wesfarmers, rather than what is generally 

regarded as a failed experiment in diversification.

BY HARRY GREEN 

ARGO AGM: 

ARGO 

INVESTMENTS [ARG] 


Venue: Adelaide Convention Centre 

Value of proxies: $39.7M 

Market Capitalisation: $3.2B 

ARRIUM [ARI] 

BY GEOFF ORROCK 

ARRIUM AGM: 

Date: 19 November 2012 

Venue: Melbourne Recital Centre, Southbank 

Value of proxies: $4.9m 

Market capitalisation: $950 million 

Pre AGM Meeting: Yes 

ASA’S LARGE VOTING POWER 

NOT DEPLOyED IN POLL 

Adelaide is the AGM attendance capital of Australia so it was no surprise when 550 

shareholders attended the Argo AGM. ASA held proxies representing 590 holdings 

or 7.8 million shares which at 1.25% of issued capital made us bigger than anyone 

in the top 20 of a stock dominated by retail investors. Sydney-based chairman Ian 

Martin and Adelaide-based CEO Jason Beddow reviewed the marginal profit decline, 

steady 26c dividend and portfolio changes. Argo is cashed up with $160 million 

available to fund new investment. 

We published the following about Mr Martin in our Voting Intentions: 

“We will vote open proxies in favour of this resolution, even though we remember the 

billions that were lost by Babcock & Brown when he was an independent director of 

that company from the 2004 float through until it collapsed in 2009. Before Babcock, 

Mr Martin had a strong record at BT which is more relevant to the needs of Argo.” 

Shareholders were not at all concerned as Mr Martin was re-elected with more than 

95% of the vote in favour. 

ASA supported the remuneration report but 7.1 million or 20% of the directed proxies 

went against. Had a poll been called and ASA had voted its undirected proxies against, 

only the chairman’s use of 14.47 million undirected proxies would have saved Argo 

from a first strike. 

Argo consulted ASA about its remuneration practices and we were pleased that retesting 

of performance rights have been removed and the company had moved to 

a four year performance period along with clawback provisions on the STI and no 

bonus payments if EPS growth is negative. 

On considering the proxy position after the meeting, it was disappointing that the 

chairman or no shareholder called a poll to ensure ASA’s undirected proxies were voted. 

Two new directors, Joycelyn Morton and Roger Davis, were both comfortably elected. 

Both candidates addressed the meeting, but ASA opposed Mr Davis on the grounds 

of an excessive workload. Had our proxies been voted in a poll, his majority would 

have been reduced to about 90%. 

Without institutional investors on the register, ASA’s voting power is magnified at listed 

invested companies as we held about 8 percent of the generally available vote, rising 

to about 11 percent for the remuneration report. 

POOR PERfORMANCE, CONTROLLING 

CHAIR AND PAy PROTESTS 

Arrium’s 2011-12 net profit fell 75% to $58 million on a 6% rise in sales revenue. Free 

cash flow was $69 million but debt rose 24% to $2.14 billion. 

Long-serving chairman Peter Smedley blamed external factors for the company’s 

ongoing decline which has seen shareholders lose billions over the past 5 years. He 

staunchly defended the Board’s strategic shift to greater iron ore sales along with 

expanding the mining consumables business in South America and Asia and exiting 

non-performing steel businesses. He noted that as these projects ramp up, it will 

provide a natural conclusion to the current MD’s term and the Board has put in place 

plans for a smooth succession. 

The Chairman made no mention of Board succession, a question asked by your 

monitor in a letter to the company in October 2012, given that six of the eight directors 

have been in place for more than 8 years and three, including the Chairman, have 

seen 12 years of service. 

The formal part of the meeting was conducted by electronic poll, which also allowed 

control over questions raised. The acoustics were ordinary in a venue designed for 

acoustic clarity. 

Mr Smedley defended Arrium’s remuneration policies which controversially include 

some bonuses for project delivery irrespective of financial performance. 

The ASA voted its open proxies against the Remuneration report and this constituted 

the majority of the difference between 127.6 million proxies cast against and the final 

figure of 132.15 million against votes in the poll, which represented 19.6% of the 

total directed votes. 

The ASA also voted in favour of the 2 directors up for re-election, neither of whom 

were permitted to address the meeting by the controlling chairman. 


AUSTIN 

ENGINEERING AGM: 

AUSTIN 

ENGINEERING [ANG] 

BY DON HYATT 



Pre AGM meeting: No 


BENDIGO AGM: 

BENDIGO & ADELAIDE 

BANK [BEN] 

AVOIDS SECOND STRIKE 

BIG PLACEMENT, PROTEST 

After copping a 28% first strike against its remuneration report at last year’s AGM in 

Sydney, this Brisbane-based company headed to Melbourne for its 2012 AGM and 

ASA was there with about 30 other attendees. 

Chairman Paul Reading talked up its eighth successive year of growth with revenue 

up 42%, NPAT up 38% and dividends up 22%. There was a strong emphasis on 

growth through acquisition and geographical expansions. Acquisitions had increased 

gearing to 33%. 

Managing director Michael Buckland presented a thorough analysis of all the 

geographical and industry specific divisions operating in the company. Australian 

divisions: Brisbane, McKay, Hunter Valley, Perth, Pilbara Hire and COR Cooling were 

largely on target with the conditions described as choppy. 

The mining companies were delaying maintenance work and repairing, rather 

than replacing aging equipment. South America was growing well and ANG was 

establishing itself within new markets there. Indonesia and the Middle East were 

potentially looking like having a strong future. Russia, Mongolia and Africa are also in 

the early stages of development. 

ASA voted against the remuneration report due to the large proportion of cash 

bonuses and LTIs having only a two year vesting period. A second strike was easily 

avoided with 98% in favour. ASA also opposed the resolution seeking pre-approval 

for the placement of up to 8 million shares on the grounds that we prefer proportional 

rights issues. We also voted against the increase in non-executive directors’ fees from 

$400,000 to $500,000 as the previous year fees amounted to $285,000 and there 

was ample provision for growth within the current cap. 

We supported the re-election of chairman Paul Reading. All Resolutions were passed 

on a show of hands and the proxies were comfortably in favour with the exception of 

the placement resolution which was opposed by more than 40% of the voted shares. 

A poll should have been called on the placement resolution so that ASA’s 183,000 

undirected proxies could have been added to the 21 million in the “against” tally. 

ExECUTIVE RESTRAINT BUT 

BOARD fEES STILL RISING 

The only company which runs a live AGM across two venues – Adelaide and Bendigo 

– attracted about 350 attendees, whilst ASA represented 610 shareholders with 2.94 

million proxies. 

We voted for the remuneration report because retesting no longer applied to senior 

executive bonuses. No bonuses were granted to senior executives this year and their 

pay fell considerably because TSR was down. 

In an unusual development, the front page of the bank’s AGM results statement to 

the ASX included the following: 

“In relation to the vote on the 2012 Remuneration Report, of the 7.81 million open 

discretionary votes, 5.34 million were held by the chairman and 2.455 million held 

by the ASA, both of which voted in favour of the resolution. On this basis, if the vote 

was conducted by poll, the vote in favour would have been 91.3%.” 

BY REX MCKENZIE 

If the board wanted to make this point, why didn’t they call a poll to generate actual 

results as these assumptions exclude everyone else in the room? 

We also asked why, in the current circumstances of write-downs and earnings 

weakness, non-executive directors received fee increases over the last two years of 


27% (plus $36,222) and the chairman 51% (plus $163,000). The chairman replied 

Venue: Intercontinental Adelaide, Bendigo 

ASA proxies: 2.94m worth $24m 

they were in a competitive market for board members, shareholders had voted in 

favour of increasing the fee pool last year and he had given the reasons then. 

Market capitalisation: $4.2billion 

A shareholder in Adelaide asked CEO Mike Hirst if he were deciding his pay would 

he pay himself less? The MD said he was on record as saying that executives in the 


finance industry were paid too much and that in his first year as MD he had taken a 

NPAT: $195m 

voluntary pay cut as part of a cost cutting exercise. 


PE Ratio: 16.4

BILLABONG AGM: 

BILLABONG 

INTERNATIONAL [BBG] 

BY BILL SEYMOUR 


Venue: Sofitel Hotel Broadbeach QLD 

ASA proxies: 346,252 

Market capitalisation: $450m 

Pre AGM meeting: No 

NPAT: $276.7m loss 

ASA HOLDS THE LINE AS BIG 

PROTESTS DELIVERED 

This was my 5th year of monitoring this company so it was disappointing to see how 

far it had fallen. Here is a summary of some of our remarks at the AGM which was 

attended by a record crowd of more than 300. 

1. Opening remark: Mr Chairman (Ted Kunkel), why are you still on the payroll as a 

director of this company? The board and management have been responsible for 

considerable value destruction for all shareholders over the past 4 years. Your CEO 

Derek O’Neill has paid the ultimate price, but you as chairman must take the major 

responsibility. You should have had the good grace to resign at least twelve months 

ago when fellow director Margaret Jackson departed. 

2. To new CEO Launa Inman. We note that you are also a Director of the 

Commonwealth Bank. Is it your intention to retain this position? Reason for asking: 

By your own admission you have taken on a difficult and challenging position to seek 

to turn this company around and that it could take up to 4 years to do so. We have 

a concern with any CEO taking the role as a director of another public company 

because of potential workloads. The controlling chairman did not allow the new CEO 

to answer this question. 

3. To Director Gordan Merchant on the question of his re-election. If private equity 

firm TPG International, when they made their first indicative offer in February 2012 

of $3.30 per share, had allowed you to retain all of your shareholding, would you 

have accepted? The chairman again would not allow Mr Merchant to answer. We 

persisted and after much debate, including what the intention of his solicitor’s letter 

to the company on behalf of himself and fellow director-shareholder Collette Paull 

was all about, we were allowed to read said letter to the meeting. 

4. Question to Mr Paul Naude (Executive Director) when considering the remuneration 

report. Shareholders accept you have a long standing contractual agreement with 

Billabong to receive 18 months salary in lieu of notice which now conflicts with 

legislation passed by Federal Parliament in recent years. In view of this conflict, in 

your role as a director of the company would you now consider it fair and reasonable 

to voluntarily agree to reduce this arrangement to twelve months? Chairman Kunkel 

again refused to allow his director to answer and persisted to claim it was a contractual 

agreement which would not be altered. Despite reminding him that the dismissal of 

former CEO Derek O’Neill had cost shareholders 24 months salary, he persisted with 

this line. We have long maintained that the Chairman had demonstrated excessive 

focus on the interests of board members and senior management, as opposed to 

the wider shareholder base and can only conclude that his actions at his last AGM 

confirmed this belief. 

The voting results were very interesting. Despite intense pressure in the form of legal 

letters, we maintained our recommendation against the re-election of Gordan Merchant 

and Collette Paull and were gratified to see they both received against votes in the 

proxies of 31%. 

Executive director Paul Naude, who has recently stood aside to attempt to raise 

finance for a leveraged buyout, received an even bigger against vote of 44% on the 

proxies, which made the chairman’s failure to call a poll all the more disappointing. 

Such was the size of the protest, it was only Mr Merchant’s circa 15% which saved 

Mr Naude’s board seat and if he’d voted against himself and Collette Paull, both 

would have been defeated. 

There was substantial media coverage of ASA’s position both before and after the 

AGM. Indeed, it is hard to think of a set of ASA voting intentions that have ever received 

such media and legal attention. 

The remuneration report and Launa Inman’s LTI grant were both opposed by about 

12% of the proxies whilst Mr Naude’s LTI grant drew opposition from 21%. 

Chairman Kunkel’s final mistake of many (remember the billions Foster’s lost in wine), 

during his public company career was the failure to call a poll on all resolution given the 

size of the against votes on the proxies. Equally, shareholders attending the meeting 

should have done likewise, although many attendees were loyal company supporters 

as all resolutions passed comfortably on the show of hands. 

With Mr Kunkel now safely out the door, the pressure is on new chairman Ian Pollard, 

a veteran professional NED from Sydney who previously chaired retailer Just Group, 

to help turn around Billabong’s fortunes. 


BLACKMORES AGM: 

BLACKMORES [BKL] 

BY MARY CURRAN 


Venue Blackmores HQ, Warriewood 

ASA proxies: 185,012 shares worth $5.5m 


BLUESCOPE 

STEEL AGM: 

BLUESCOPE STEEL [BSL] 

BY REX MCKENZIE 


Venue: Melbourne Convention Centre 

ASA proxies: 6.5m shares worth $3m 

Market capitalisation: $1.2b 



PAy PROTEST BARELy NOTICED WITH 

POPULAR STRONG PERfORMER 

It’s a pleasant drive through the Wakehurst Parkway to the relatively new HQ of 

Blackmores, an impressive building and facilities with parking available on site. Not 

an officially monitored company by ASA, I picked up 105 proxies and am a personal 

shareholder. 

First impressions are that Blackmores is a company well supported by their 

shareholders. There was certainly a very positive vibe in the room. Maybe everyone 

was looking forward to the impressive luncheon. 

Chairman Marcus Blackmore is also the largest shareholder with 26% and clearly has 

plenty of skin in the game with a business that was founded by his family. 

Both the Chairman and CEO Christine Holgate gave excellent presentations about 

the company performance and future plans. The financial controller, Chris Last, also 

spoke and answered the finance questions in a manner comprehendible to a retail 

shareholder. 

Shareholders enjoyed a record net profit of $27.8m in 2011-12 as sales grew 11% 

to $261 million. Asian sales were up 20% and this division now represents 26% of 

group profit, despite the strong Australia dollar. 

The recent purchase of BioCeuticals was fully debt funded and the board believes it 

will add to EPS this year. 

All motions, namely the re-election of Marcus Blackmore and Brent Wallace, the 

Remuneration Report and Approval for financial assistance, passed easily on a show 

of hands. With the Blackmore family unable to vote, there was a 17% protest vote 

against the remuneration report on the proxies, which would have risen to about 20% 

had ASA voted against in a poll and the chairman had not cast his undirected proxies. 

In hindsight, the board really should have called a poll on this item. 

BILLIONS LOST, 

DON’T BLAME THE BOARD 

There was no acknowledgement of error by chairman Graham Kraehe for successive 

years of billion dollar losses. He described this year as one of “transformational 

change in which hard decisions had been taken” including the closure of a blast 

furnace, exiting the export steel business and asset sales, which helped cut debt by 

$970 million. He did not acknowledge in either the annual report or his chairman’s 

address that the major driver of debt reduction was the $577m of shareholder funds 

obtained from an issue of shares at just 40c during the year. That’s a long way from 

the $11 peak 4 years ago. 

The chairman talked up a new joint venture with Nippon Steel (NS) which will assist 

in entering new markets in a business which has 29 manufacturing plants in seven 

countries in Asia and the US. The venture will involve a $540m payment to Bluescope 

from NS which will further reduce debt. 

After last year’s 39% against vote on the remuneration report, Bluescope was facing 

a second strike. Substantial improvements were made as retesting of hurdles for 

bonuses was removed and the incentives were more accurately described. Because 

much progress had been made, we voted in favour and it was passed by 98% of 

voted shares, as was the LTI grant for CEO Paul O’Malley. 

The three directors standing for re-election spoke to the meeting and were all strongly 

supported. Veteran director Kevin McCann was in hospital but he went to the trouble 

of recording a video supporting his re-election, which won’t be for another full 3 year 

term. We asked why there was no evidence of Board renewal and were told that 

it was not appropriate to make changes when the company was in the process of 

radical change.

BORAL [BLD] 

BY ALLAN GOLDIN 


Venue: City Recital Hall, Sydney 

Value of proxies $9.55m 

Market capitalisation: $7.5b 


BORAL AGM: 

CARSALES.COM AGM: 

CARSALES.COM [CRZ] 

BY STEPHEN MAYNE 

Date: October 26, 2012 

Venue: The Langham, Southbank 

Value of proxies: $1.4m 


CEO PUNTED, PAy PROTEST 

AS TOUGH TIMES CONTINUE 

The Australian and US building industry have suffered lean times in the last couple of 

years and the Chairman clearly faced up to the poor results; profits before abnormals 

down 42% to $101m, net debt up by $1 billion, dividend down to 11c from 14.5c. 

Particularly hard hit was the building Products Division with a 75% decline in EBIT. 

The new CEO Mike Kane along with the Chairman pledged to reduce fixed costs and 

decrease overheads. The plan is currently being worked on and will be in place from 

January 2013, with full details revealed in the half yearly report. 

2012 saw a number of acquisitions with the major one being Asian plasterboard 

where big growth is forecast for this year and the future, though it stumbled in the 

first quarter with lower than expected results. 

The sudden departure of the last CEO, Mark Selway, was put down to him being 

an effective change agent but now the company needed someone to build on the 

changes. He received a $1.9 million termination payment and total pay of $7.35 million, 

although much of this is contingent on share price performance in the years ahead. 

Boral has eliminated paying STI based on unmeasurable criteria that are really part 

of the executive’s normal job description and it now based totally on EBIT, which is 

why only one person received any bonus. However, there are still concerns such as 

STI being paid in cash instead of 50% in equity, LTIs with only one test and relative 

TSR with a low hurdle to achieve 50%. Given that the testing period is also too short, 

ASA joined with the meaningful 10.24% protest against the remuneration report. 

The award of Rights to the new CEO was backed by 97.4%, but not ASA because 

of deficiencies in the LTI scheme. Both John Marlay and Catherine Brenner were reelected 

to the board with a 92.1% vote. 

SUPER STAR CEO ALMOST HAS LTI 

GRANT KNOCKED Off 

Carsales.com has a terrific story to tell, although the share price fell by more than 

5% after the AGM presentations were released to the ASX. After about 20 minutes 

of presentations, the ASA monitor was the sole shareholder to participate in debate 

and made 7 separate contributions to proceedings. 

The board was engaged about a recent ACSI study which suggested CRZ did not 

have a majority of independent directors, a point contested by chairman Wal Pisciotta. 

With the business performing well, the major point of interest related to remuneration 

issues after institutional investors registered against votes of 11.3% and 25.7% 

respectively on the remuneration report and CEO’s LTI grant at last year’s AGM. 

We asked for disclosure of the proxy votes before the debate and initially it seemed 

like concerns had been allayed when only 7.85m proxies were voted against the 

remuneration report, down from 17.4m in 2011. 

But the opposite happened with the proposed LTI grant to founder and CEO Greg 

Roebuck as the against vote almost doubled from 45.1m votes in 2011 to 80.97m 

votes this year. The chairman gave a passionate defence of the CEO and professed 

to be bemused about institutions which follow the advice of proxy advisers when they 

don’t really share their concerns. 

The ASA defended the roll of proxy advisers and pointed out allowing partial vesting 

of LTI’s after 2 years was too short a time frame. Sure, this had been extended from 

just 1 year in earlier iterations, but ASA policy is for a 4 year performance period. 

Given the super performance of CRZ over the past year and since it listed at $3.50 in 

2009, ASA went into the AGM undecided on how it would vote on the LTI resolution. 

However, after seeing the size of the protest vote and listening to the debate, we 

used our representation on behalf of 44 shareholders to call a poll and then voted 

approximately 209,000 undirected proxies against the resolution. 


CENTRO RETAIL AGM: 

CENTRO RETAIL [CRf] 

BY ELLEN STODDART 


Venue: The Sofitel, Melbourne 

ASA proxies: 196,187 shares worth $421k 

Market capitalisation: $3 billion 

Pre AGM Meeting: Yes. 

COCHLEAR AGM: 

COCHLEAR [COH] 

BY STEPHEN MAYNE 

AfTER “THE ARRANGEMENT”, 

A PHOENIx RISES 

Chairman Bob Edgar and CEO Steven Sewell were very pleased to report that results 

so far, since the “Arrangement” [aka dismemberment] in December 2011, have 

exceeded those forecast and the first dividend was paid on 28 August 2012. They 

advised all Class Actions have now been finalised, with $200 million going to those 

involved, contributed by CRF, the old Centro, auditor PwC and insurance. In response 

to our question, the Chair said the promised simplified organisational structure would 

result in a reduction in syndicate financing. 

Six Directors were up for election, 5 having been appointed last December. We 

voted against the first, Mr Clive Appleton, because he is overloaded and seemingly 

conflicted with other property board seats. All directors were comfortably elected in a 

poll with Charles Macek attracting the most opposition with 6.2 million against votes. 

This year’s Remuneration Report was a mishmash of the old Centro and CRF, so it 

was difficult to meaningfully compare with previous years. When we questioned the 

high sign-on and termination payments, the Chair said the first was a market necessity 

and the others were inherited under the terms of the “Arrangement”. The latter was 

also the defence against our criticisms of excessive short term bonuses and LTIs of 

just over 2 years. ASA voted against the Report. 

ASA also voted against the final resolution, the grant of LTI equity securities to the CEO, 

because the period from grant to vesting is less than 3 years, the vesting scales are 

too generous, the target “underlying EPS” criterion for half the grant is not disclosed 

and it will increase the percent of his ‘at risk’ bonus remuneration above the already 

high level of 220% in 2011-12. 

Predictably, the Chair held substantial proxies and both these resolutions were 

comfortably passed. 

Editors note: Dr Ellen Stoddard retired as Centro monitor at the end of the AGM and 

was presented with flowers by the company in recognition of her efforts and scrutiny 

over many years. 

AGM COMES INTO ITS OWN 

AS PAy DEAL ExPOSED 

There is no greater darling stock on the ASX than Cochlear, the fabulous Australian 

success story which has brought hearing to more than 250,000 profoundly deaf people 

globally. And for investors who paid just $2.50 a share when the panic-stricken Pacific 

Dunlop floated the business in 1994, Cochlear has been a magnificent investment as 

it now trades above $70. But having a feel-good story that delivers for shareholders 

doesn’t mean the basics around executive pay, good corporate governance and 

disclosure should be ignored. 

And so it was with the shareholder revolt at this year’s AGM against Cochlear’s 

remuneration report and the proposal to issue long-serving CEO, Dr Chris Roberts, 

231,161 options to buy shares at $62.78 a pop in August 2015. Never before had 

the CEO’s annual options play being so big, as it will require a hefty cheque of $14.5 

million if Dr Roberts takes up the shares in August 2015. And the performance hurdles 

weren’t tough because the one-off product recall smashed 2011-12 earnings. Indeed, 

underlying EPS would have to fall by more than 37% by 2015 for Dr Roberts not to 

satisfy this particular hurdle, which applied to 50% of the allocation. The other half 

has a hurdle based around total shareholder returns which is genuinely challenging. 

That ridiculously low EPS hurdle may have been defensible if Cochlear was only issuing 

100,000 options, but this is where the real controversy kicks in. 

It turns out that Cochlear’s management came up with a proposed 33% discount 

Date: October 16 2012 

on the option valuation for the risk of not meeting the EPS hurdle. But surely that 

ridiculously low EPS hurdle of -37% was unmissable because of the recall? Whilst 

Venue: ASX Auditorium, Sydney 

KPMG may have looked at the inputs into this formula and signed off on them, the 

ASA proxiesy: 270,000 shares worth $19m inputs themselves were supplied by the company and not changed by KPMG, which 

also happens to be Cochlear’s auditor. 



The key lesson from this saga is that the board’s remuneration committee should 

have commissioned a genuinely independent valuation of the options. The one hour 

debate on all this, remuneration issues was one of the best examples in years as to 

why the AGM is an important event. All the key information was disclosed in public 

EQUITY December 2012 / January 2013 Page 24and 

the management team had to sit there squirming whilst the full board looked silly.

BY JOHN CURRY & 

DR PETER TALLENTIRE 

CROWN AGM: 

CROWN LTD [CWN] 


Venue: Crown Perth 

ASA proxies: 522,521 proxies worth $4.93m 




PE Ratio: 13.6 

CSL [CSL] 

CSL AGM: 

BY DON HYATT 


Venue: Melbourne Park 




NPAT: $983 million 

PE Ratio: 23.5 

JAMES PACKER’S CASINO COMPANy 

AVOIDS SECOND STRIKE 

Only about 50 people attended the Crown AGM held at Crown Perth where the big 

news was James Packer comfortably avoiding a spill meeting after only 6.7% was 

voted against the remuneration report compared with 55% last year. 

ASA opposed last year’s report but after significant reforms and engagement, 

supported the 2011-12 report. 

After CEO Rowan Craigie presented the financials, executive chairman James Packer 

spoke passionately about his vision for Crown Sydney and the idea of building Crown 

into a global brand that can tap into the emerging Asian middle class. 

Mention was made that the NSW government had progressed Crown’s proposal 

from the initial phase to the next stage which involves Crown working with the NSW 

government in the further development and assessment of Crown’s Unsolicited 

Proposal. 

All the retiring directors, namely Ms Helen Coonan, Mr Benjamin Brazil, Mrs Rowena 

Danziger, Professor John Horvath and Mr Michael Johnston were re-elected with 

comfortable majorities. 

Only the ASA raised questions from the floor. 

The ASA monitor from Victoria Mr John Curry had held extensive pre-AGM discussions 

with Crown and his questions to the Board were asked by a Western Australian 

member. 

ASA also questioned the STI policy that Crown has in place. No part is taken in equity 

with a period during which these shares could not be sold. ASA requested that the 

remuneration committee give serious consideration to this issue. 

ASA also asked about the high base salary that Mr Rowan Craigie was paid compared 

with CEOs of much more complex companies such as CBA, BHP, and Rio Tinto. The 

chairman agreed with this comment, amidst some laughter, but felt he was worth it. 

The small gathering at Crown Perth concluded after just 45 minutes. 

fAREWELL TO THE LEGENDARy CEO 

DR BRIAN MCNAMEE 

The Chairman, Prof John Shine, acknowledged a positive relationship with the ASA 

in his introductory remarks. In his address he indicated that overseas markets were 

growing strongly, particularly the immunoglobulins. The approval of Gardasil for use by 

boys was also of major benefit to the company. The Australian market was described 

as mature, growing at a slower pace than overseas operations. The strong Australian 

dollar had impacted on earnings by $108 million for the financial year. Research and 

development continued to expand and testing of new products were progressing 

without any major mishaps. Prof Shine informed the meeting that the current year 

buyback of $900 million was nearing completion and he announced a further share 

buyback of $900 million for the forthcoming year amounting to about 4% of the 

shares on issue. He acknowledged that this would be the final meeting of CEO Dr 

Brian McNamee. The previously published profit guidance of 12% for the upcoming 

year was reaffirmed. 

Brian McNamee outlined the range of operations and products manufactured by 

CSL and identified breakthrough products that were being developed. It should be 

pointed out that the transition to new CEO Dr Paul Perreault will take place early next 

calendar year. He currently runs the CSL Behrings division in the US. 

The ASA congratulated the MD and CEO Dr Brian McNamee for his outstanding 

service to the company and the shareholder community stating that “The ASA would 

like to put on record that we acknowledge that Dr McNamee could rightly claim to 

be one of the most successful CEOs currently serving in Australia” and supporting 

that statement by explaining that the share price in CSL had risen about 60 times 

since its listing in 1994, without accounting for dividends. This statement received 

widespread media attention. 

The ASA supported the adoption of the Remuneration Report, as they broadly met 

the ASA guidelines, and the re-elections of 2 Directors. All items were passed with 

more than 96% in favour. 


ECHO ENT. AGM: 

ECHO 

ENTERTAINMENT [EGP] 

BY LEE BUCKLAND & 

STEPHEN MAYNE 


Venue: Jupiters Casino & Hotel, Gold Coast 

ASA proxies: 1.81m proxies worth $6m 

Market capitalisation: $2.95bn 


NPAT: $42.2m 

PE Ratio:20.4 

fAIRfAx MEDIA AGM: 

fAIRfAx MEDIA [fxJ] 

BY DAVID ALLEN & 

STEPHEN MAYNE 

Date: Wednesday, October 24, 2012 

Venue: The Park Hyatt, Melbourne 

ASA proxies: 2.51m shares worth $1 million 

CHAIRMAN UNDER PRESSURE AfTER 

PACKER WEAKENS COMPETITOR 

‘The Star’ casino hotel complex in Sydney is a world class facility recently renovated 

and extended at a cost of $870m, but it is facing potential competition from a Crown 

high roller casino at Barangaroo from 2019. 

In July the current debt of $443m was retired using the proceeds of the entitlement 

offer announced shortly after James Packer’s enormous public campaign against 

Echo chairman John Story secured his resignation. 

Just weeks after John O’Neill assumed the chair, it was announced that CEO Larry 

Mullin would also be departing. Apart from his formal address, he contributed little 

to the AGM. 

Mr Mullin finishes in January 2013 and Echo continues to search for a replacement. 

The meeting was meant to deal with six items of business but the LTI grant to Mr 

Mullin was withdrawn a few days before the AGM after the chair reached a financial 

agreement with him on the terms of his departure. 

ASA recommended against the remuneration report and LTI grants and we went in 

undecided on John O’Neill’s re-election. 

His refusal to disclose Mr Mullin’s payout lead to defeat for both the remuneration 

and his own re-election on the show of hands, at which point we called for a poll on 

all items, although Echo tried to claim our representation of 567 shareholders wasn’t 

enough to call for a poll in our own right. 

Recent events at Echo have been troubling for shareholders and the AGM didn’t 

provide much cause for confidence. 

The board and senior management ranks have been seriously weakened at a time 

when Echo’s prize monopoly licence in Sydney is under threat from a wealthy and 

politically connected competitor. We remain to be convinced that Mr O’Neill is the 

man to drive Echo forward and, after listening to his performance at the AGM, voted 

our undirected proxies against his re-election. 

All items were passed with more than 95% in favour and the AGM debate generated 

substantial media coverage. 

NEGOTIATING A PAy CUT WITH THE 

CHAIRMAN fROM THE fLOOR 

After almost 4 hours of gruelling debate, chairman Roger Corbett finally closed what 

will probably be his last AGM as Fairfax Media chairman. Billionaire Gina Rinehart 

used her 15% stake to deliver Fairfax a destabilising “first strike” on its remuneration 

report and it was done in a highly unusual way with Hancock Prospecting’s chief 

development officer, John Klepec, voting the stake from the floor in a poll. 

Mr Corbett pre-emptively revealed during his opening address that 19% of the proxies 

were against the remuneration report, so with Hancock joining the protest, the final 

Against vote finished at 34.4%. Hancock Prospecting also voted against the LTI grant 

for CEO Greg Hywood and the election of newly appointed director James Millar. 

The ASA held 2.2 million undirected proxies and, after seeing that outside board 

challenger Peter Cox only had support from 2.4% of the proxy votes, we urged Mr 

Klepec to send the board a message and support Mr Cox in the poll. To the surprise 

of many, she did this, lifting Mr Cox’s final result to a respectable 24%. Mr Cox is 

a veteran media figure who performed well at the AGM, adding much colour and 

interest to the debate. 

ASA was first to the microphone in the debate, attempting to engage Mr Corbett in 

some retrospective analysis of where it all went wrong at a company that once had 

a $5 share price. The ducking, weaving and stonewalling from the chair was very 

disappointing, confirming our view that he should retire after 9 disappointing years 

on the board. Mr Corbett’s best contribution to the meeting came right at the end 

when he accepted our spur of the moment proposal to vote ASA’s undirected proxies 

in favour of the remuneration report if he undertook to cut his chairman’s fee from 

$432,000 in 2011-12, to less than $400,000 in 2012-13. 


If nothing else, this demonstrated how the 272 Fairfax shareholders who appointed 


ASA to represent them at the AGM, collectively provided voting leverage which 

extracted some pay restraint at the very top of the company. And who said the AGM 

EQUITY December 2012 / January 2013 Page 26is 

dead? There was widespread media coverage of the AGM, including about the 

role played by the ASA.

fORTESCUE METALS 

AGM: 

fORTESCUE 

METALS [fMG] 

BY PETER KENT & KERRY CROSS 

Date: 14th November 2012 

Venue: Hyatt Regency, Perth 

ASA proxies: 6.61m shares worth $26.5m 



GOODMAN 

fIELDER [Gff] 

BY ROGER ASHLEY 

GOODMAN 

fIELDER AGM: 


Venue: Company HQ, North Ryde, NSW 

ASA proxies: 2m shares worth $1.2m 



THE BIG NAMED ORGANISATION STARES 

DOWN TWIGGy CHARM OffENSIVE 

The chairman, Andrew Forrest, stated that China will be a positive force in the next 

decade and this had good implications for FMG. He acknowledged the changes of 

leadership in China and compared the new regime to a company with a new board, 

new CEO, and new management team. 

The CEO, Neville Power, gave a review of operations. Notable highlights included 

57.5mt of ore shipped in 2012 and an expectation of achieving a 95 mtpa run rate 

by the end of this year. As a result of the drop in the price of iron ore prices in the last 

few months, FMG have reduced their cost base by $300m pa, laid off 1,000 workers, 

and deferred $1.6 billion of capital projects (King’s Project). In addition by renegotiating 

their debt FMG will not have to make any debt repayments until November 2015. 

The ASA supported the election of Mr Cao Huiquan and the re-election of Mr Elliot 

but spoke against the rem report and the LTI plan. The chairman dismissed the ASA 

point questioning the ROE hurdle as not being a reasonable incentive metric. FMG 

has set the ROE incentive hurdle at 15% despite an average achievement of 55% 

pa over the last three years. His response was a 15% to 25% ROE was an excellent 

outcome. He went on to say he would like to see all of the CEO’s salary as at risk as 

he believes this drives performance. 

The chairman acknowledged the pre-AGM meeting with the ASA, but called it a big 

name for a small organisation. He was critical of the ASA policy guidelines that could 

not be overturned by argument, describing the meeting as mere “theatre” if our view 

was pre-determined. 

All resolutions were passed on a show of hands with no debate apart from the input 

from the ASA. Several institutions agreed with our view on the rem report as there 

was 16% against on the proxies. 

UNDERSTANDING SHAREHOLDERS 

DESPITE POOR RESULTS 

Goodman Fielder’s share price has fallen from $2.43 at the IPO in 2005 to around 

58c currently. In particular, the combination of high debt, high commodity prices and 

the aggressive pricing policies of Coles and Woolies has accelerated the company’s 

decline in the last three years. Two statutory losses in the past two years have resulted, 

albeit assisted by non-cash impairment charges. Dividends were suspended for the 

first time since the IPO for 2012. 

With this history, one might have expected some fireworks at the AGM from 

shareholders aggrieved at the rapid erosion of their wealth. Not so; the tenor of the 

meeting was one of an understanding of the confluence of woes visited upon the 

company and acceptance that changes were afoot. 

The balance sheet is looking healthier as the result of a renounceable share issue and 

the sale of the Integro Foods operation. These measures are part of a restructuring 

exercise which will continue until 2015, put in place by a new CEO, and which is 

expected to have a positive annual profit impact of $100 million. Although annual 

savings of some $40m have been claimed to date, operating profits in 2012 were 

significantly impacted by a loss of volume attributed largely to the loss of a private 

label contract. The chairman advised that the results for the first half of 2013 had not 

shown significant improvement. 

The ASA voted against the remuneration report and the related grant of share rights 

to the CEO. We commended the Board for not awarding incentives given the results 

and for not resorting to retesting and other ruses to allow incentives to be paid. The 

basis of our vote was explained as relating to the structure of the incentive schemes, 

not any payments relating to the current year. Both items were strongly supported. 

The other two motions were for the election of two female directors out of a Board 

of six independent directors and the managing director. We voted open proxies in 

favour of these two motions which passed by a majority of some 99%. 


GUD HOLDINGS AGM: 

GUD HOLDINGS [GUD] 

BY NORM WEST 

Date: 1 November, 2012 

Venue: RACV Club, Melbourne 

ASA proxies: 1.06m votes worth $8.8m 



HILLS HOLDING AGM: 

HILLS HOLDINGS [HIL] 

BY JOSEPH TAN WITH 

DEPUTIES MALCOLM KEYNES & 

YING YOUNG YU 


Venue: Adelaide Entertainment Centre 

ASA proxies: 2m proxies worth $1.7m 

Market capitalisation: $209M 

fIRST STRIKE GALVANISES BOARD 

INTO POSITIVE ACTION 

In 2012 sales revenue was up 4% to a record $609.1m. Net profit after tax was a 

record $92.8m including a post- tax contribution from the Breville shareholding sale. 

Underlying net profit after tax declined 10% to $44.1m. The annual dividend was 

increased to 65c with an additional special dividend of 35c. The Chairman commented 

that all the GUD businesses experienced tough and challenging trading conditions 

which sees the first half trading down. 

The ASA commended GUD on the substantial reduction in borrowings and gearing. 

The ASA asked if Dexion was now meeting projected earnings after significant 

restructures. It was stated that Dexion was ahead of 2011. The Managing Director 

explained that all three manufacturing locations now make a common product range 

which improves manufacturing and supply flexibility and lowers costs. 

Existing directors Peter Hay, Mark Smith, Graeme Billings and David Robinson were 

all elected with overwhelming support. The ASA supported the Directors as they met all 

ASA criteria and form a Board with a good balance of experience and new members. 

The Remuneration Report received a “first strike” in 2011. The Chairman, Mr Herron, 

and the Remuneration Committee Chairman, Mr Hay, consulted widely with interested 

parties, including the ASA and employed PwC to review their remuneration policies. 

The 2012 report contains a number of improvements. In 2013 performance rights 

will be introduced to replace cash rewards in LTIs. Vesting hurdles are now at market 

typical levels. The MD’s total remuneration package will remain frozen in 2013. STIs are 

set according to Cash Value Added (CVA) targets with no retesting. The LTI relates to 

the group’s TSR relative to a comparator group of companies. The ASA commended 

the positive response of the company. 

The ASA advocates a longer four year term for LTIs and will monitor the effectiveness of 

the new hurdles. As the overall changes were very positive the report was supported. 

It passed on a show of hands with proxies 25.2m For and 1.5m Against. 

THE HILLS ARE ALIVE WITH THE 

SOUND Of TED PRETTy SLASHING 

This year’s AGM for Hills Holdings marked the introduction of the new CEO Ted Pretty 

and the announcement of a brutal company restructure. 

The company’s revenue to end of last financial year was steady at just under $1.1 

billion and has been relatively flat for the previous five years. Net cash flow from 

operating activities was $52.7m, an encouraging increase from last year. Net profit for 

the previous financial year was $28.8m, but now shareholders are suddenly facing a 

$100 million restructuring charge largely related to the “Building and Industrial” group. 

The highlight of the AGM was to hear from the new CEO Ted Pretty, and the urgency 

in which the company is looking to restructure and focus more on its ‘Electronics 

and Communications’ business group. The main points from Mr Pretty is that Hills 

must improve costs in the manufacturing business, focus on cash generation and 

improve working capital. 

Despite the recent 30% drop in share price, the mood at the AGM was subdued 

with only one shareholders expressing dissatisfaction directly to the board. The ASA 

asked if former CEO Graham Twartz was awarded a ‘Golden Handshake’ on his 

departure, but this was denied. 

The re-election or election of Jennifer Hill-Ling, Peter Stancliffe and Matthew Campbell 

were passed overwhelmingly with more than 95% in favour. 

The Adoption of the Remuneration Report was carried in favour with 91% in favour. 

This resolution was voted by poll and the ASA as per our published voting intentions 

decided to vote against due to not meeting our policy guidelines for a four-year 

assessment of Long-Term Incentive hurdles. We feel this biased too strongly for the 

short term and was insufficiently designed to motivate senior executives to pursue 

the long-term growth and success of the company. 


The day after the AGM, the company received significant press coverage regarding 

EQUITY December 2012 / January 2013 Page 28its 

plunging share price, write-downs, restructuring and proposed job losses. All up, 

it wasn’t Pretty.

IINET [IIN] 

BY PETER JENSEN & 

STAN TAYLOR 

IINET AGM: 


Venue: iiStore, Hay Street, Subiaco 




LEND LEASE AGM: 

LEND LEASE [LLC] 

BY ROGER JUCHAU 


Venue: Westin, Sydney 



UNANIMOUS fROM THE fLOOR 

DESPITE NEAR fIRST STRIKE 

This year’s AGM was held in the new ground floor “iiStore” to show shareholders 

another retail aspect of their growing company. 

Chairman Michael Smith gave an entertaining and professional address, which (along 

with the Managing Director’s more detailed presentation) was released as an ASX 

announcement before the meeting. 

The financial reports were received by the meeting, following some pertinent questions 

from local ASA members. The five formal resolutions were then put to the meeting, to 

be considered on a show of hands, with proxies received by the company displayed 

on screen before each vote. The ASA supported all resolutions as detailed in our 

voting intentions. 

Three directors were each re-elected with only a small percentage of proxy votes 

against. We questioned the Chairman about his workload and received a satisfactory 

answer with strong support from senior NED Peter James. 

The resolution for the adoption of the remuneration report brought a surprise against 

vote in proxies received of close to 23%. It is believed that the majority of this 

dissent came from clients of ISS, the institutional proxy advisor and was directed at 

the level of incentive paid to Michael Malone, the MD. The chair of the remuneration 

committee gave an explanation of the basis of this remuneration and the good link 

to shareholder returns, which we found to be satisfactory and those at the meeting 

strongly supported. The resolution was passed on a unanimous show of hands. 

The final resolution on the fee pool for NEDs was passed without incident, again with 

large percentage of supportive proxies. 

The MD presentation which followed highlighted the great returns for shareholders, 

outlining the current and planned focus of the company. Michael Malone 

enthusiastically answered a number of interesting questions following his talk. After 

the meeting we enjoyed the opportunity to speak to directors, the MD and a number 

of our members who regularly attend this annual event. 

CRAWfORD UNDER PRESSURE AfTER 

SURPRISING “fIRST STRIKE” 

Long-serving chairman David Crawford and well-paid CEO Steve McCann used the 

words “strong” and “excellent” liberally in their addresses to the AGM. 

Strong financial performance and their confidence in prospects, together with LLC’s 

record of operational excellence and its positives on OH&S were emphasised. Both 

stressed that investors should be comforted by the earnings that will flow when 

construction backlogs and development pipelines are realised. The Chairman dealt 

with the Abigroup accounting problems and claimed that there would be no material 

impact on future financial results. 

Your monitor raised with the Chairman and CEO the enduring challenges faced 

by LLC with its unsatisfactory operational cash flow, cash flow adequacy and the 

relatively high gearing (68%) which largely accounted (via the equity multiplier) for the 

return on equity (13%) in 2012. CEO McCann’s response implied that their debt levels 

were manageable and that cash reserves and cash access (3rd parties) more than 

compensate for issues about debt and cash flow. 

LLC will gain more public profile with the Barangaroo South project. Although there 

are uncertain conditions in Europe and UK, and some recovery in the USA, LLC’s 

strategy of a diversified portfolio of projects across location and price points, underpin 

the Chairman’s confident outlook of strong earnings in FY13 and FY14. 

The Chairman put six resolutions to the meeting. ASA was opposed to the remuneration 

report and just over 25 per cent of votes were against, constituting a “first strike” 

which wasn’t widely anticipated. This isn’t the first major protest against remuneration 

practices at Lend Lease which is also one of the few Australian companies which 

pays directors a bonus when travelling. 

Resolutions on CEO performance securities and capital reduction and reallocation 

were passed, although 21% opposed the LTI grant and there was even a 15% protest 

against the re-election of director Phillip Colebatch. 


MACMAHON AGM: 

MACMAHON [MAH] 

BY TONY MCAULIFFE & 

VAL GREEN 


Venue: Pan Pacific Hotel, Perth 

Value of proxies: $746,118 

Market capitalisation:$225m 


BY DICK MORGAN 

PACIfIC 

BRANDS AGM: 

PACIfIC BRANDS [PBG] 


Venue: Computershare Centre, Abbotsford 




CHAIRMAN SURVIVES BUT 

SHAREHOLDERS DELIVER “fIRST STRIKE” 

Announcing a shock profit downgrade, ousting the CEO and seeing the shares tumble 

39% in one day is not what directors should do 8 weeks before an AGM. Welcome 

to Macmahon Holdings, where about 100 attended the AGM to hear chairman Ken 

Scott-Mackenzie explain what went wrong and seek his own re-election. 

The upbeat record 2011-12 profit of $56.1 million on revenue of $1.871 billion revenue 

was largely rendered obsolete by the disclosure in September of challenges within the 

Construction Division, notably the WA Business Unit and its Hope Downs 4 rail project. 

The Chairman outlined the terms former CEO’s termination arrangement, thanking 

Nick Bowen for his significant contribution. 

However, his legacy is a forecast loss in the current half, although regular profit 

margins are expected in the second half. The new CEO, Mr Ross Carroll, addressed 

the meeting, acknowledging the strengths of the Executive Leadership Group and 

provided details of revised company strategy. 

ASA raised detailed concerns about the risk management process suggesting that 

the Board and senior management shared responsibility. This was the basis of our 

recommendation against the two directors seeking re-election but they were supported 

by more than 95% of the voted shares. 

We also spoke against the Remuneration report on the usual grounds of cash/equity 

split on STIs, vesting periods and vesting percentages on the 50th percentile in the 

LTI plan. We also queried the timing of the announcement of the CEO termination 

arrangement on the day before the AGM. 

All Resolutions were carried on a poll. The remuneration report incurred a “First Strike” 

with a 28% against vote, despite Leighton voting its stake in favour. 

Of interest was the announcement of a 10% voluntary reduction in salaries by members 

of the Board and the Executive leadership Group for the remainder of this financial year. 

A gesture of solidarity with shareholders! The proceedings received wide coverage in 

the print media, including The AFR which published a good summary of our concerns 

as expressed at the meeting. 

NEW CHAIR, NEW CEO AND 

BOARD SPILL AVOIDED 

The chairman, CEO and CFO all addressed the meeting with a common theme of 

persistent tough trading conditions. 

The recently appointed chairman, Peter Bush, said that the loss of the Kmart 

business, the high cotton price and the depressed retail environment had presented 

the most challenging conditions the company had ever faced. However, the extensive 

transformational changes that had been made to the company’s supply and distribution 

operations would position it to benefit from an improved retail environment. 

The new CEO, former Foster’s boss John Pollaers, outlined his impressions of the 

company’s operations and future prospects. In the 50 days that he has been in the job 

he has visited the company’s major suppliers and met with the staff and workforce. He 

has been impressed by the talent, creativity and energy evident in all the business units. 

Whilst not specific about his plans, the CEO said he would be exploring expanding the 

geographic footprint of the operations along with the development of a direct shopping 

experience, including greater reliance on internet sales. The Chairman said the board 

had taken note of majority shareholder opposition to last year’s remuneration report. 

Appropriate changes had been made to avoid a “second strike” and the remuneration 

report passed with 98% in favour. 

The ASA supported both the remuneration report and the proposed LTI grant to the 

new CEO, which suffered a 28% against vote, although media reports suggested 

some of this was caused by a voting error. 

As you would expect given the recent losses suffered by investors, we criticised the 

board for the overall performance of Pacific Brands, which the chairman said would 

hopefully be reversed by the new CEO. 

The two NEDs standing for re-election, Nora Scheinkestel and James King, outlined 

their skills and experience to the meeting and were re-elected with nearly 99% of 

EQUITY December 2012 / January 2013 Page 30the 

vote in favour.

PAPERLINx AGM: 

PAPERLINx [PPx] 

BY GEOFF BOWD 


Venue: Melbourne Convention Centre 

ASA proxies: 1.3m shares worth $66,000 

Market capitalisation: $32million 

Pre AGM Meeting: Yes. 

PENRICE SODA AGM: 

PENRICE SODA [PSH] 

BY GENEVIEVE WARD 



ASA proxies: 500,000 shares worth $35,000 

Market capitalisation: $7m (book value $2m) 


BOARD COUP, NEW GUARD VOTE 

DOWN REM REPORT 

The Board which retained control after the November 2011 AGM all resigned and the 

three new directors, chairman Mike Barker, Robert Kaye and Andrew Price, took office 

in September. The new board could not be held accountable for past performance 

or even the latest Annual Report. Each stood for election, had ASA support and 

received 99% of votes. 

PaperlinX reported a statutory loss of $266.7 million in 2011-12 and an underlying 

loss of $19 million compared to an underlying profit of $17 million in 2010-11. The 

statutory loss reflects a write down of goodwill inherited with poorly performing 

European operations. Debt has been reduced but PaperlinX is still in a negative cash 

flow position. 

The Chairman and interim CEO Andrew Price acknowledged the reality that demand 

for office paper products is in continuous decline. The thrust of their outlook was 

active consideration of opportunities for both vertical and horizontal consolidation 

and that PaperlinX must construct a different procurement and distribution operation. 

Andrew Price, a paper merchanting veteran, will immediately reside in Europe to 

oversee further restructuring, particularly with the embattled German and Netherlands 

businesses. A further major top-down restructuring which will see 370 employees 

leave the UK business was confirmed at the AGM. 

The ASA affirmed the criticism it has made at AGMs for the past eight years in which 

the share price has fallen from $5 to 5 cents. The chairman said a return to profit 

was planned in 2013-14. 

Questions were asked by holders of hybrid shares which had an issue price of $100 

but currently trade at about $9. A committee lead by Robert Kaye will consult to 

seek a resolution. 

The ASA opposed the 2012 remuneration report. We commended the directors 

when they announced that they and their proxies would vote against the resolution. 

This is a principled action which brought a First Strike (56% against) albeit for a board 

which did not actually have any accountability for the report. 

HISTORy MADE AS ADELAIDE 

TIDDLER fACES fIRST SPILL 

An Adelaide-based company with a puny market capitalisation of $7 million would 

not normally receive attention in EQUITY. 

But angry Penrice Soda shareholders made history on October 30, 2012 when it 

became the first company to face a board spill under the new “two strikes” regime. 

And deservedly so. 

Shareholders reacted badly to a loss of $65 million in 2011-12, representing 97% 

of book value. This was the second straight year in which shareholder wealth was 

destroyed. 

The company had been inadequately resourced when it was floated in 2005 and 

the chair and CEO provided explanation of advances which had occurred but were 

offset by difficult conditions. 

This didn’t wash with major shareholders such as London City Equities which delivered 

a triple hit when director John Hirst, who owns no shares, was voted off the board, 

a second strike was triggered and then investors followed through by supporting a 

board spill. 

The voting saw 13m shares support Mr Hirst’s election with 16.5m against. Only 10.5m 

supported the remuneration report with 17.5m against and the spill was backed by 

16.9m votes with 10.6m against, although there was no poll on this item. 

Disappointingly, a majority of the shares on issue were not voted. 

Penrice Soda is now down to its minimum of 3 directors and the EGM is likely to be 

held early in the new year. ASA will be attending. 


PERPETUAL AGM: 

PERPETUAL [PPT] 

BY HELEN MAIR 

Date: 1 November, 2012 

Venue: Westin Hotel, Sydney 




QR NATIONAL AGM: 

QR NATIONAL [QRN] 

BY STEPHEN MAYNE & 

LEE BUCKLAND 


Venue: Brisbane Convention Centre 

Value of proxies: $2.25 million 




SPILL AVERTED AS CHAIRMAN 

SLASHES PAy By 42% 

Regrettably for shareholders Perpetual is not the company it was 5 years ago. Market 

cap has slipped from $3.2 billion in 2007 to less than $1 billion. 2011-12 was another 

challenging year as the outflow of funds continued. The company is onto its 3rd CEO 

in as many years. While new CEO Geoff Lloyd provided forward guidance on the 

continued costs of restructuring, the company was not prepared to provide growth 

aspirations, although the 3 year LTI stretch goal is 10% EPS growth, an indication of 

management thinking. 

Two thirds of the costs in this business are related to remuneration. PPT suffered a 

1st strike at last year’s AGM. The 2nd strike was the elephant in the room. 

Chairman Peter Scott and the CEO gave excellent presentations on the company’s 

comeback strategy. Remuneration Committee Chair Elizabeth Proust presented the 

meaningful changes to the remuneration report. You have to wonder though, when 

the fortunes of this company are presented as being so closely linked to the whims of 

the stock market over which the executives have no influence, why so many people 

get paid so much. It’s the industry we’re told, but for how long can the largesse last? 

It was an arduous meeting. The Board looked grim and clearly viewed the first strike 

very seriously. The Chairman led by example. Peter Scott took a 42% fee cut. Board 

fees and costs were reduced by $500,000. There’s a pay freeze in place although 

some executives received pay increases during the year. Perhaps financial services 

executives don’t read market signals and shareholder sentiment as keenly as this 

Board. Once again, it’s the industry we’re told. 

Polls were taken rather than a show of hands. We continue to object to aspects of 

the LTI and STI, such as the CEO achieving up to 200% of fixed pay if the market 

moved up dramatically. So we voted Against the remuneration report. The Chairman 

argues the plan is working in that the KMP aren’t earning LTI bonuses. 11.3% of 

voting shareholders exercised their right to say it isn’t. 

It wasn’t a second strike, but that is still a meaningful protest. 

UPROAR AS ACCOUNTING CHANGES 

BOOST CEO’S PAy PACKET 

Eye-brows were raised at QR National’s first AGM in 2011 after the board used its 

discretion to grant bonuses to the senior executives in 2010-11 even though they 

failed to meet performance targets because of the Queensland floods. 

Compensating executives for bad weather is one thing, but in 2011-12 the board 

approved changes to accounting treatments which added $51 million to the 

reported EBIT. The proposals to capitalise spending on ballast and reduce the annual 

depreciation of locomotives were management initiatives which added more than $1 

million to the pay packet of CEO Lance Hockridge. 

These changes were not flagged in the prospectus and had the effect of extending Mr 

Hockridge’s total remuneration to $4.56 million in 2011-12. Chairman John Prescott 

then had the temerity to claim these accounting changes had created shareholder 

value when surely they had destroyed value by transferring more shareholder funds 

to the management team than was necessary. 

As a result, ASA prosecuted the case against the remuneration report strongly at 

the AGM but a first strike was avoided after the Queensland Government voted its 

residual 16% in favour, as did Perpetual which owns 8.28%. 

ASA’s presence at the AGM generated substantial press coverage and the lacklustre 

performance of the 72 year old chairman has raised questions over his tenure. 

Mr Prescott shielded both the auditor and individual directors from questions, 

even though a number of institutions voted against the re-election of remuneration 

committee member Graeme John.

SEVEN WEST 

MEDIA [SWM] 

BY JOHN CAMPBELL 

SEVEN WEST 

MEDIA AGM: 


Venue: The Hyatt Regency, Perth 




TELSTRA [TLS] 

BY GEOFF READ 

TELSTRA AGM: 


Venue: Melbourne Exhibition Centre 



SHOCK, HORROR: PAy RISE fOR 

DIRECTORS VOTED DOWN 

The chairman Kerry Stokes told the meeting Seven West Media was the best 

performing media company in Australia and undervalued by analysts. 

CEO Don Voelte said the company had implemented restructuring which would 

deliver $60 million in improved revenue and reduced expenses in 2012-13. First half 

2013 EBIT was expected to be down $60m at $250m before one-off restructuring 

costs. He said the goal was to maintain, and hopefully increase, net profit after tax as 

compared to 2012’s $226.9 million. The report of his address sparked a surge in the 

depressed share price for SWM from $1.16 to a high of $1.41 on the day and it has 

since pushed closer to $1.60 after the Stokes camp started creeping up the register. 

We asked if it was still possible to achieve the 2011 prospectus forecast that the 

acquisition of Seven assets would be earnings accretive, but were told economic 

circumstances had changed. We opposed the re-election of Ryan Stokes and Doug 

Flynn and said we’d prefer to have an independent chairman, which Kerry Stokes 

took to mean that we were calling for his resignation. In the end, all candidates were 

re-elected with more than 90% in favour. 

The real protest came with the defeat of a proposal to increase the directors’ fee 

pool from $1.5m to $1.8m. This was withdrawn and Kerry Stokes instead offered to 

reduce his $290,000 annual fee to the extent necessary to enable newly-appointed 

directors to be paid at agreed rates. He said that the board intended to appoint 

another independent director when a suitable candidate was identified. 

We welcomed improvements to the remuneration report. However, concerns remain 

involving the TSR hurdle in the LTI being set at 50% award for average performance, the 

LTI appraisal period of only 3 years, discretionary payments being made to executives, 

a lack of transparency with respect to STI hurdles and excessive cash salaries. The 

remuneration report was passed by a majority of just 76.04% meaning a first strike 

was avoided by just 430,000 votes out of 412 million cast. ASA voted its undirected 

proxies against the remuneration report in a poll. 

SATISfIED SHAREHOLDERS 

DELIVER A RECORD SHORT AGM 

This 2012 Telstra AGM was attended by about 700 shareholders and was notable for 

being the shortest in the history of the company, finishing in just under 2 hours. When 

Sol Trujillo and Donald McGauchie were around, sometimes the formal presentations 

went for two hours. 

The trade unions and other vested interest groups were all absent this year. Telstra is 

to be congratulated for holding a series of shareholder information meetings around 

the country one month prior to the AGM. Clearly these meetings diffused many of the 

usual customer service questions. Chair Catherine Livingstone outlined the board’s 

position on the capital needs of the company which whilst not precluding a return of 

capital or buyback, would seem to indicate that capital management initiatives are 

some years away. 

We raised issues such as the relative decline of Sensis and the $831 million unfunded 

superannuation liability Telstra is carrying. We also requested, and the Chairman 

agreed, that the various NBN related revenues be expressed clearly in a single table in 

the annual report. Whilst these amounts are modest this year they will increase quickly 

so as to rival some of Telstra’s divisions. The other questions from the attendees all 

related to customer service, jobs for Australia and ethical issues. Dr John Stocker 

has finally retired from the board. He was a director of Telstra prior to the first float in 

1997-98 and was given thanks by the acclamation of all those present. 

The resolution to elect Tim Chen as a director was withdrawn as he has resigned his 

directorship after just 6 months to supposedly focus on a full-time CEO role based in 

China. Bizarrely, he was then appointed CEO of Telstra’s International division three 

weeks later. All of the other resolutions were adopted after a poll with no meaningful 

protests. The least popular item was a proposal to increase the director fee cap from 

by $500,000 to $3.5 million. It was only supported by 97.11% of the voted shares! 

Telstra’s strong share price recovery after the Future Fund exited and the NBN deal 

was finalised has clearly left investors feeling strongly supportive of the board and 

management. 


TOLL HOLDINGS AGM: 

TOLL HOLDINGS [TOL] 

BY GRAHAM WALKER & 

IAN CURRY 

Date: Friday 26th October 2012 

Venue: Melbourne Exhibition Centre 

ASA proxies: 2.5m worth $10.7m 


Pre AGM meeting : Yes 

NPAT $64.6 million on statutory basis 

BY GEOFF READ 

TREASURy WINE 

ESTATE AGM: 

TREASURy WINE 

ESTATE [TWE] 


15% VOTE AGAINST REM 

CHAIR HARRy BOON 

Toll’s profit result for 2011-12 was adversely affected by a $203 million write-down of 

property and business values, including for the Footwork Express business in Japan. 

Toll reiterated its commitment to its Asian growth strategies on which it has spent $1 

billion over recent years, however, an ongoing strategic review due for completion in 

March 2013 will determine what adjustments to these, if any, are required. 

Further acquisitions, divestments or write-downs were not specifically excluded. In 

reply to an ASA question, Toll advised that it would be satisfied with an eventual return 

on capital for the group of greater than 10%. Toll stated that the expected reduction 

in development expenditure in the Australian resources sector will not impact profits 

in the short term. 

A new service titled Toll Consumer Delivery aimed at servicing the trend towards online 

retail shopping was presented, along with a promotional video. 

The resolution to approve the remuneration report was carried with a vote in favour of 

94.9% and related resolutions for the issue of options and rights to senior executives 

were also carried with a similar majority. ASA voted open proxies against these 

resolutions on the grounds that LTI vests after three years and allows for retesting, 

LTI vests in full on satisfaction of performance criteria (i.e. there is no deferral) and 

50% of the LTI is paid at the 50th percentile of Total Shareholder Return for the 

comparator group. 

Other comments from the floor objected to ‘excessively generous’ executive pay rates, 

the overly complicated pay structure and an emphasis on short-term outcomes. The 

chair of the remuneration committee defended the current remuneration practices. 

ASA opposed the re-election of remuneration committee chair Harry Boon on the 

grounds of poor performance at companies such as Paperlinx and Hastie Group, plus 

residual concerns about past remuneration practices at Toll. The resolution was carried 

with a significant vote of 15.6% against, including 0.7% from ASA’s undirected proxies. 

SHARES TANK, PAy PROTESTS 

AND A DRy ARGUMENT 

The room at The Langham Hotel was packed to bursting for what was the first TWE 

AGM to be held in Melbourne. CEO David Dearie told the meeting that due to poor 

vintages in 2011, an increase in the IT costs associated with the separation from 

Foster’s and tough trading in North America, earnings would be reduced in 2012-13 

to mid single digit growth. With that, the share price duly tanked almost 10% in two 

days, although shareholders are still well ahead on the Foster’s demerger. 

The only questions for the chairman came from the ASA. We asked the company 

to amend the long term incentive plan (LTIP) so that shares which vested after the 

3 year performance period would have a holding lock applied to them so that in the 

event of material unforeseen events some or all of the shares could be clawed back. 

The company offered to consider this. 

We also asked the company to cease paying directors a travel allowance when their 

travel on company business exceeds 4 hours. We consider this to be out of line with 

common board practice. Chairman Paul Raynor declined our suggestion claiming 

that this allowance assisted in the recruitment of excellent overseas based directors. 

The fact that it applies equally to Australian based directors seemed to elude him. 

The ASA, along with 6.4% of voted shares, opposed the election of Mr Garry Hounsell 

to the board on the grounds that, whilst well qualified, he was grossly overloaded 

with other commitments. 

Venue: The Langham Hotel, Melbourne The only big protest of the day was against the remuneration report with 20.5% 

against in the poll. Interestingly, the LTI grant was only opposed by 9.4% but this 


did not reflect all the concern as a chunky 72.8 million votes abstained on this item. 

Market capitalisation:$3.4b 

Finally, it was somewhat surprising that the world’s biggest premium wine company 


booked a 5 star hotel for its AGM and then did not offer shareholders any of its product 

Company P/E ratio: 39.6 

after the meeting concluded at about 4pm. This may lead to a smaller attendance 

next year. 


WESfARMERS AGM: 

WESfARMERS [WES] 

BY JOHN CAMPBELL & 

GEOFF FIELD 


Venue: Perth Convention & Exhibition Centre 

ASA proxies:5.57m shares worth $191m 



WOOLWORTHS EGM: 

WOOLWORTHS [WOW] 

BY DOUG CAMPBELL 



Value of proxies:$157m 


Pre EGM Meeting? Yes. 

RESIDUAL PAy CONCERNS AS 

CONGLOMERATE fORGES AHEAD 

Chairman Bob Every introduced each of the directors prior to giving a review of the 

financial year just past. He noted that profit was up 10% to $2.126 billion, EPS rose, 

cashflow was strong and annual dividend had been increased by 15c per share. In 

response to ASA comment he agreed that return on capital was still inadequate and 

that Coles gives the opportunity for further improvement. 

Group MD Richard Goyder said that performance in the current year was in line with his 

earlier outlook statement with pleasing results from the retail divisions and insurance. 

Resolutions proposing to increase the number of directors and the directors’ fee pool 

were passed without dissent. The four directors up for election addressed the meeting 

to outline their skills and experience. We raised the potential conflicts of interest which 

director James Graham may face as chief executive of Gresham Partners but were 

assured both by Dr Every and Mr Graham that WES has strong protocols in relation 

to such conflicts. He has been involved with WES since 1976 and a director since 

1998. A 10% protest vote was recorded against his re-election, suggesting some 

institutional investors are also concerned about a potential lack of independence. 

The remuneration report and resolutions granting performance rights to the executive 

directors received ‘against’ votes of between 10% and 12%. We expressed concern 

at the quantum of remuneration for both Mr Goyder and Coles MD Ian McLeod. We 

said that Mr Goyder’s fixed pay exceeded that of any other Australian CEO at the time 

of our review. We also criticised the potentially high percentage of incentive payments 

being based on a high platform set by Mr Goyder’s fixed pay and allowed to exceed 

100% of fixed pay. We said we would prefer one measure of LTI performance to be 

an absolute rather than relative measure and the Chair indicated he would take the 

issues to the Board to consider. He was satisfied with remuneration procedures and 

noted that WES wanted world class executives and thus had to offer competitive 

remuneration plans. 

GETUP’S POKIES CLAMPDOWN 

OVERWHELMINGLy REJECTED 

Activist organisation GetUp gathered a group of Woolworths shareholders to call an 

EGM to vote on its proposed alteration to the company’s Constitution to limit playing 

hours, bet size and button push rates on poker machines in an attempt to reduce 

problem gambling. ASA’s responsibility was to inform investors of the likely investment 

outcomes of the proposed altered pokies regime. Published voting intentions called 

for informed directed proxies so that proxy givers could reflect personal values with 

their investment considerations. 

ASA held 5.16m proxies comprising 564,785 (11%) FOR the GetUp resolution, 

917,794 (18%) AGAINST and 3.67m (71%) open. ASA voted 4.59m (89%) of its 

directed and undirected proxies against. The EGM result was 2.5% FOR and 97.5% 

AGAINST, a convincing rejection of the GetUp proposal. 

WOW is Australia’s biggest liquor retailer which first got into the pokies business 

because Queensland law requires bottle shops to be attached to hotel licences. It 

then teamed up with Melbourne-based pokies billionaire Bruce Mathieson to buy the 

spun off Foster’s hotels business ALH in 2004, thus becoming Australia’s biggest 

pokies operator with about 12,000 machines. 

The EGM lasted for about 100 minutes and was courteous and useful. WOW and 

GetUp gave opening addresses. Undisputable experiences were given of individual 

and family harms wrought by addicted gamblers. Woolworths has introduced new 

programs for problem gamblers and asserted that it was Australia’s most responsible 

pokies operator. 

ASA’s Woolworths monitor believes that GetUp has unfairly targeted Woolworths, 

giving competitors a free kick. The altered Constitution would increase WOW costs 

and reduce revenue. Shareholder returns would marginally fall because share price 

and earnings per share would deteriorate. Neither side could (or would?) quantify 

cost or benefits of changes. Your ASA representative came away convinced that 

progress needs Commonwealth leadership as State and Territory government social 

obligations conflict with their heavy EQUITY reliance December on gaming 2012 revenue. / January 2013 Page 35

wEstErN arEas NL 

MiNE sitE tOUr 

24 OctOBEr 2012 

Hyden, a wheatbelt town just under 350 kilometres east 

of Perth, is notable for the tourist attraction of Wave Rock. 

A group of members made the journey there recently, not 

only to have a tour of the strange rock formation (think of 

a giant, petrified surfing break) but also to look over the 

Western Areas mine site in Forrestania (88 kilometres on a 

gravel road from Hyden). 

Western Areas NL operates two nickel mines and is 

Australia’s third largest producer of nickel. It listed in 2000, 

and since then nickel prices have ranged from US$3.00/ 

lb to US$23.00/lb. The first mine we went to was called 

“Flying Fox” and the second one was called “Spotted 

Quoll”. Whilst nickel prices are presently down, current 

nickel prices still allow for profitable production at Western 

Areas. They are in the ASX 200 with a market capitalisation 

of approximately $800 million, are a proven dividend payer 

and have a strong balance sheet. 

At the Flying Fox Mine we were met by Duncan Sutherland, 

the Site Manager. We watched slide presentations giving 

us details of the mine depth (1200m), average ore grade 

(4.5%) and the staffing rosters for the 185 workers and 16 

technical staff. We were also served a morning tea worthy 

of a Subiaco coffee house. All our questions were answered 

in great detail and we left there most impressed with the 

welcome that we were given. 

We then headed to the Spotted Quoll mine site. After 

a short slide presentation, our group was decked out in 

hard hats and fluoro jackets for a visit to the viewing area 

overlooking the former open cut mine. Huge empty trucks 

roared down the steep spiralling roadway around the 

concave cone of the pit and disappeared into the entrance 

portal of the current underground mine at the bottom, and 

re-emerged in rapid time with a full load of rock for the 

processing plant. 

A short time later we drove to the Cosmic Boy Concentrator 

(don’t you just love the names of these places?) for another 

presentation and a detailed look at the workings of the ore 

processing plant. We were made to feel very welcome by 

the Cosmic Boy staff and our numerous questions were 

answered freely, openly and expertly by these professional 

men and women in simple, plain English that we investors 

could understand. 

After the presentation we boarded the Western Areas 

bus and one of the staff, Chris, drove us around the 

plant, pointing out items of interest such as the ball mill 

and the heaps of processed nickel ready to be loaded 

into containers bound for China, via Esperance Port, or 

transported to BHP in Kambalda. 

Next we visited the ‘core yard’, where Ciara and other 

staff met us and showed us the visible evidence of nickel 

sulphide in the drill cores taken from the “Sunrise” and 

“Lounge Lizard” sites (told you the names were fascinating) 

where major drilling programs will commence in the next 

six months. 


Lunch was served at the Cosmic Boy Village. What a 

spread! It was amazing to see the quality, variety and 

quantity of the foods, fruit and health bars available to staff. 

Our host Duncan continued to provide answers to our many 

questions on the life of the fifo (fly-in/fly-out) workers. At 

3.00 pm our visit concluded and we headed back to our 

various destinations, each with our own souvenir ‘show 

bag’ containing a cap, mug, pen and key ring to remind us 

of the fantastic experience we had. 

Everyone commented on how much they enjoyed the tour 

and remarked on how much they had learned. 

Western Areas’ employees were very generous with their 

time and we truly appreciated their giving to each of us a 

day to remember.

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returns. 


HSN 

HANSEN TECHNOLOGIES 

The Melbourne based business was founded by the late 

Mr Ken Hanson in 1971. From humble beginnings Hansen 

Technologies Ltd was ASX listed in 2000 (ASX:HSN) with 

an issue price of $1.00 per share. 

HSN provide development, integration and support 

of tailored billing systems software for power utilities, 

telecommunications, water and gas companies. A 

more recent development has been the provision of 

superannuation member administration software for 

superannuation fund managers. 

HSN employ some 250 people with offices and support 

staff in Australia, NZ, UK and USA. Approximately 43% of 

gross revenue is from offshore operations. 

HSN adopt a hands on collaborative approach with 

their clients to achieve cost effective billing systems and 

customer care programs for today’s flexible and dynamic 

pricing models employed in the telecommunication, retail 

electricity, water and gas sectors. The development of the 

proprietary IT software is carried out in Melbourne. 

HSN are at the leading edge of IT software to service the 

“Time of use” and “Smart Grid Optimization” being rolled 

out in Australia by the retail electricity industry. HSN NZ 

have been actively engaged in this field for many years. 

YE June 30 2012 headline numbers are; 

Operating Revenue $56.6m 

EBITDA $19.2m 

NPAT $12.9m 

EPS 8.2 cents 

RISKS 

In considering forward growth, the review committee saw 

the following as the main business risks; 

1. Retention of the professional software design and 

development engineers. 

2. Upholding HSN’s disciplined review approach for 

acquisition opportunities. 

3. Regular detailed review by the directors of operational 

and financial performance of offshore business units 

in NZ, USA and UK. 

4. Continuance of the good customer relationships HSN 

has cultivated (reinforced by high number of contract 

renewals). 

5. Share ownership change resulting from decease of 

founder. 


BIG MEMBERS 

LEN ROY 

LLOYD PHILLIPS 

LORRAINE GRAHAM 

BARRY NUNN 

STEPHEN WESTON 

PETER TALLENTIRE 

STAN TAYLOR 

PETER JENSEN 

GEOFF SHERWIN 

SUSAN WALKER 

REFERENCES 

PRELIMINARY 2012 

FINAL REPORT 

INTERIM REPORTS 

COMPANY WEBSITE 

ASX RELEASES 

COMMSEC 

NOVEMBER 

2012 

THIS REPORT WAS COMPILED BY LEN ROY AND LORRAINE GRAHAM WITH 

SIGNIFICANT INPUT FROM THE PERTH BIG E GROUP. 

DIRECTORS 

Mr David Trude Chairman, Non Exec, Independent 

| Appointed Chairman Aug 2011 

Mr Andrew Hansen 

Managing Director | Appointed MD 2000 

Mr Bruce Adams 

Non Exec Director | Appointed 2000 

Mr Phil James 

Non Exec Director, Independent | Appointed 2008 

Mr David Osborne 

Non Exec Director | Appointed 2006 

Mr Grant John Lister 

CFO | Appointed CFO 2002 

The board has a good mix of qualified directors with relevant 

experience. However, we consider the succession planning 

should address the non compliance with ASX Corporate 

Governance Council principles and guidelines relevant to 

Independent directors and gender representation. 

It was noted that director attendance at eligible board 

meetings was 100% for all directors. Bruce Adams was 

previously an Independent NED but he was appointed a 

Trustee of the (former Chairman) Ken Hansen estate. 

MAJOR SHAREHOLDERS 

The largest shareholder with 92.6m shares (57%) is 

Othonna Pty Ltd, interests associated with the former 

founder and chairman, the late Mr. Ken Hansen. 

REMUNERATION CULTURE 

It was acknowledged that NEDs of HSN receive a flat 

remuneration and are not eligible for any incentive 

payments. Also, the HSN Annual Report includes a 

“Shareholder Alignment” chart clearly displaying EBITDA, 

EPS, Share Price, Market Cap, and DPS for the 5 year 

period YE2008 to YE2012. 

The MD is eligible for bonuses and share options as part of 

his incentivized remuneration package. KMP are eligible for 

STI and LTI with the main KPI being EBITDA. STI awards are 

in the form of cash bonuses. LTI awards “at the absolute 

discretion of the board” are in the form of options. 

To ensure long term focus and sustainable financial 

performance we would prefer to see 4 year vesting of 

options compared to the HSN policy of 3 years.

10 YEAR 5 YEAR 1 YEAR BETTER 

INVESTING 

GROUP 

AUDITOR REPORT 

The June 30 2012 Audit Report did not contain any qualifications. Total remuneration paid to the auditor for YE 

June 30 2012 was $386k made up of $294k for audit and review of financials and $92k for non-audit services. 

FINANCIALS 

Group Financial Performance since listing: 

Jun-07 Jun-08 Jun-09 Jun-10 Jun-11 Jun-12 

Revenues (m) 51.2 39.1 54.3 57.8 57.7 56.7 

Net Profit (m) 3.3 15.4 8.1 11.1 13.5 12.9 

Operating margin (%) 17.3 27.9 26.3 29.7 35.6 33.7 

Earnings (cents) 2.1 10.1 5.3 7.2 8.6 8.1 

Dividends (cents) 0.9 5.0 5.0 5.0 6.0 6.0 

Franking (%) 0.0 20.0 100.0 100.0 83.0 67.0 

Dividend Yield (%) 3.5 12.8 11.9 8.8 6.6 6.5 

Debt/Equity (%) 1.0 0.0 0.0 0.0 0.0 0.0 

NTA 0.1 0.15 0.1 0.1 0.1 0.2 

Market Cap (m) 43.0 60.0 65.0 87.0 142.0 145.0 

Return on capital (%) 9.0 37.0 18.0 22.0 26.0 22.0 

Return on Equity (%) 9.1 36.8 17.7 22.3 25.6 22.4 

FY June 30 2012 results were similar to FY June 30 2011 results and we noted YE2011 had been the best financial 

results for HSN since listing. The share price 52 week high was $1.05 and the low $0.81. Based on a share price 

of 87c at time of review, the market cap was $138m. 

Shares on issue at YE June 30 2012 were 158,072,120 compared to shares on issue YE June 30 2011 156,197,163. 

The difference being due to: 

• shares issued under dividend reinvestment plan 1,192,677 

• dividend issued under the employee share plan 152,280 

• options exercised 530,000 

It was noted that the HSN balance sheet YE2012 was free of short and long term debt. Dividend yield has been 

consistently strong over the last 5 years. Similarly, HSN has recorded a healthy EBITDA margin consistency over 

the last 5 years. Cash at bank at YE June 30 2012 was a healthy $23.967m. 

Total Intangible assets for YE2012 $29.6m is made up of: 

• Goodwill, patents and contracts $31.965m less accumulated amortization and impairment $6.027mand 

software development. Net $25.938m. 

• Software development costs $27.402m less accumulated amortization $23.747m. Net $3.655m. 

Strong operating cash flow has been a feature of HSN YE financials over the last 5 years. Book value has 

progressively improved over the 5 year period to 36c per share as at YE June 30 2012. 

Notwithstanding the generally good financial performance and the board’s conservative approach to growth, the 

share price possibly reflects a combination of overall market sentiment, the passing of the founder and former 

chairman in September 2012 plus apprehension on the overseas activities, particularly in the light of the economies 

in the UK and USA at this time. 

A related party transaction of $900k involves a lease / rental between the company and A & K Hansen. 

DISCLAIMER: This report was prepared by a member of the ASA for use by a Better Investing Group. The content included in this Better Investing Group 

Discussion Report should not be interpreted as investment advice or be taken as representing the ASA’s view of the company. While ASA representatives 

report on their analysis of company reports, investment advice can only be obtained from persons appropriately licensed to give it. Neither the Association nor 

its representatives are licensed to provide financial advice and accept no responsibility for decisions made on the basis of information contained in this report.

Employee share schemes 

As an employee of a company, you may be invited to 

participate in an employee share scheme. They can be a 

great way of gaining access to discount shares, but always 

think about how they fit into your investment strategy before 

you decide to take part. 

How employee share schemes work 

Employee share schemes (also known as employee 

share purchase plans or employee equity schemes) give 

employees shares in the company they work for, or the 

opportunity to buy shares in the company. 

Share purchase plans offer eligible employees the chance 

to buy shares, sometimes through a loan from their 

employer. The shares are often paid for through salary 

sacrifice over a set period (for example, 6 months), or by 

using the dividends received on the shares. Some share 

purchase plans also allow employees to pay for the shares 

in full, up front. 

Employees on higher incomes are often eligible to receive 

shares as a performance bonus or as a form of remuneration 

instead of receiving a higher salary. 

The share schemes of larger companies usually offer 

employees ‘ordinary shares’ that provide an equity 

investment in the company. Smaller companies may only 

offer ‘pseudo’ equity schemes that pay dividends but do 

not give employees the rights associated with traditional 

share ownership, such as the right to vote at annual general 

meetings. 

The benefits 

Employee share schemes are a way of attracting, retaining 

and motivating staff as they align employees’ interests with 

shareholders’ interests. Employees can benefit financially 

if the company performs well. 

The shares might be offered without a brokerage fee or 

at a discount to the market price. There may also be tax 

benefits, but this will depend on your financial situation and 

the unique features of the share scheme. 

The drawbacks 

There are often limitations on when employees can buy, sell 

and access shares through their company’s share scheme. 

There may only be an annual ‘window’ during which shares 

can be bought or sold. Employees may also have to get 

permission from the company before buying or selling the 

shares. 


If the employee is paying back the cost of the shares over 

a period of time, they do not have the right to sell them 

until they have been paid for. 

Even if the shares have been paid for, some companies 

may insist that employees give back their shares when 

they leave, or sell them at the current market price even if 

that price is less than what they paid. 

Some share packages come with restrictions, where 

employees only receive part or all of the shares if certain 

performance targets are met, and they remain with the 

company for a certain number of years. 

Things to consider 

Before you decide to participate in an employee share 

scheme you should do some research about the company 

to determine how well it is doing and whether the shares 

are likely to increase in value. 

If you decide to buy the shares it’s important that they’re 

part of a diversified investment plan, so that you avoid 

losing a large part of your investment portfolio if your 

employer goes out of business. 

It’s also important to consider your own personal 

circumstances. For example, you may have other priorities 

for your money like paying off your mortgage or contributing 

extra to your super. 

Each employee share scheme is different, so you should 

carefully read the offer documents, which set out the terms 

and conditions of the offer. Look for information about when 

you can buy and sell the shares, whether you are entitled 

to dividend payments and what happens to the shares if 

you leave the company. 

Speak to your accountant or financial adviser if you need 

professional advice. The Australian Taxation Office website 

also has information about employee share schemes, 

including calculators to work out the tax implications of 

buying shares through an employee share scheme. 

For more information on investing and buying and selling 

shares, see ASIC’s MoneySmart website: 

www.moneysmart.gov.au. 

by Robert Drake 

Australian Securities & Investments Commission

Members reading this final edition of EQUITY for 2012 

will have mixed feelings about the last twelve months and 

considerable uncertainty regarding 2013. This uncertainty is 

not confined to the share market or investments generally. 

There is political uncertainty as both government and 

opposition flail around attempting to discredit each other 

rather than address challenges which are emerging and 

have serious effects on the Australian economy. 

It is becoming obvious that government revenues at Federal 

and State levels are below estimates due to reduced GST 

revenue, company tax receipts, capital gains tax and 

savings replacing expenditure. There is a general loss 

of confidence in the community that our governments 

have policies which meet the needs and aspirations of all 

Australians. 

The failure, across the country, to invest in the infrastructure 

needed to improve productivity and provide the opportunities 

for individuals to build a secure future is troubling. It is 

time for our leaders to state, clearly, that all the capital 

works being demanded, the better pay and conditions for 

teachers, nurses, police and others who meet community 

needs cannot be met without significant increases in 

taxation in various forms. Reductions in income tax paid 

by individuals are finished. Arguably government surpluses 

should have been invested for the future. 

The claim that reducing corporate tax will stimulate 

investment and productivity is untested. It may well have 

the effect of increasing profits and dividends. Increasing 

the GST rate is the logical step to take and at the same 

time eliminate all the exemptions which complicate the 

taxation system. 

Whenever you hear governments talk about simplifying 

anything the reality is often more rules and regulations. Is 

it time to genuinely tackle our taxation arrangements and 

remove all the concessions and complexities which have 

to be fought over and defended? 

Confidence in the share market is at an all-time low. 

Company monitors are reporting a decline in the number 

of shareholders shown in annual reports. Computershare 

has noted this decline across the companies for which 

they act as the share registry. There has been a fall in 

share volumes traded and the value of those trades. 

High Frequency Trading has been blamed for creating 

uncertainty as to the integrity of the market and an equal 

IAN CURRY 

CHAIR REPORT 

DECEMBER 2012 

playing field. Individual shareholders and those managing 

their own superannuation funds are turning to short-term 

investments which appear to carry more certainty even if 

returns are not attractive on an after-tax basis. 

Company monitoring has been the main and in many 

cases the only task for many of our volunteers over the 

last few months. ASA has received considerable publicity 

in the media and companies have been particularly keen 

to talk with us to explain their results and assure us that 

their remuneration structures are appropriate. The impact 

of the two strikes legislation has been significant and many 

companies have taken steps to ensure that executive 

rewards are linked to shareholder rewards. Executives have 

failed to earn short-term bonuses and will have difficulty in 

receiving incentives over the longer term as most of these 

are based on Total Shareholder Return (TSR) and share 

prices have been down or flat for many companies. 

Company Monitors deserve the highest recognition for 

the work they do analysing financial accounts, preparing 

voting intentions, attending annual meetings, asking 

questions and writing a report on those meetings. They 

and ASA deserve the support of all members and granting 

us your proxy strengthens our position as the only really 

independent commentator on company performance. The 

appointment of Stephen Mayne as a consultant has had a 

positive impact on our monitoring efforts. 

Your directors meet in December to review the year and 

consider budgets for 2013. We need to re-consider our 

strategic direction and structure to make sure we continue 

to offer existing and potential members value for money. 

We will consider the conference programme and progress 

on our IT rebuild. 

Your association is built around a small group of staff 

and a large number of volunteers across Australia. Our 

Branches are run by dedicated committees in the capital 

cities, suburban and rural areas. I want all volunteers to 

know their work is valued by the directors and members. 

I encourage new members to come forward and find out 

where they can help. To Vas, Silvana, both Katrinas and 

Kate my thanks for your work over the year. To my fellow 

directors your support has made it easier for me to address 

the challenges we have. 

To all members I wish you all the best for Christmas and 

the New Year. 


NSW 


REGIONAL GROUPS 

AROUND AUSTRALIA 

New members and visitors are welcome to all groups in all States 

ALBURY WODONGA GROUP 

The Albury-Wodonga Group meets 11 times a year, 

excluding December. Meetings are held on the fourth 

Tuesday of each month from 10.00 to 12.30pm at the 

Commercial Club, Albury. Guest speakers from Melbourne 

or Sydney are invited to the February, May, August and 

November meetings and discussion groups are held in 

all other months. An ASA SMSF Group meets after each 

discussion group. Following the meetings, members linger 

on to eat at a choice of two eating areas. 

Convenor: Linda Martin, linda.martin.air@gmail.com 

BONDI DISCUSSION GROUP 

The Bondi Group meet on the first Tuesday of each month, 

except January, from 10.30am at Waverley Council’s Mill 

Hill Centre, Bondi Junction – about 200 metres from the 

railway station. The meetings are unstructured general 

discussions on any topic related to investments and 

shares. Anyone attending is invited to raise any topics or 

questions they would like to hear other people’s views 

about. Convenor: Peter Barker, pbarker@acm.org 

MID NORTH COAST GROUP 

This group was established in 2006 by Les Smith, who 

remains the Convenor today, with the objective to converse 

and interact with like-minded local investors. The group 

meet on the second Friday of each month from 10.00am 

at the Senior Citizens’ Rooms, Port Macquarie. A guest 

presenter is invited to every second month. At every 

other meeting the group discuss ASA matters of concern, 

global issues, the local stock market, general investment 

topics and conduct stock reviews. Convenor: Les Smith, 

lespmq@bigpond.com, 02 6559 5133 

NEWCASTLE HUNTER GROUP 

The Newcastle Hunter group meet at the Club Macquarie, 

Argenton on the last Monday of the odd month from 11.00 

to 12.30pm. However, due to the public holiday the January 

meeting will be held on Monday, 21 January. Following a 

short report by a member of the Monitoring Group, a guest 

speaker will address a subject of interest to retail investors. 

Convenor: John Truscott, 02 4946 5590 

SYDNEY INVESTOR FORUM 

From 2013, monthly meetings will switch back to the 

third Tuesday of each month, except for February, 

March and December, which will be held on the second 

Tuesday. Meetings will commence from midday at the 

Sydney Mechanics School of Arts Theatre. Following the 

presentation, the group discuss branch issues and meet 

informally over a coffee for which there is a $2pp charge. 

This forum offers the opportunity to discuss your portfolio 

and current investment ideas with other members. 

Convenor: John Upton 

SYDNEY NORTH SHORE DISCUSSION GROUP 

Sydney North Shore discussion group meet on the third 

Friday of each month, including December and January, 

from 10.00am to 11.45am, followed by a 30 minute coffee/ 

tea break to socialize. The venue is the Killara Uniting 

Church Hall, Killara. Following a 15 minute update of ASA 

matters, the group divide into two subgroups and discuss 

agenda items agreed at the previous meeting. 

Convenor: David Magnusson 

VIC 

BALLARAT REGIONAL GROUP 

Ballarat meet on the second Wednesday of every month 

(excepting January). The ‘even’ months are public meetings 

with a guest speaker, whilst alternate months are informal 

discussion groups. All meetings are held at the Eastwood 

Leisure Complex, Ballarat, between 7.30 – 9.00 pm 

followed by supper. The Ballarat Group began in June 

2002 and regularly holds social and educational functions 

and runs a lending library. The convenor also has a regular 

radio programme where ASA matters are aired. 

Convenor: Betty Clarke-Wood, 03 5333 4720. 

BENDIGO GROUP 

In 2013 the Bendigo Group will be holding speaker 

meetings in February, May, August and November. The 

months of March, April, June, July, September and October 

will be discussion group meetings with a designated theme. 

Meetings are held at the Bendigo Club from 10:00am to 

11.30am on the third Wednesday in the month. Discussion 

group meetings, from 5.30 to 7.00pm, will be trialled on the 

third Wednesday in March and June. 

Convenor: Norm West, 03 5441 2027 

GEELONG GROUPS 

Geelong holds a number of meetings. A meeting with a 

guest speaker is held on the second Tuesday of the even 

months (first Tuesday in December) from 6.00pm at the 

Geelong Football Club. Following the meeting the majority 

of members dine in the Cats Bistro at the Football Club. 

An evening discussion group is held on the third Tuesday 

of the even months (second Tuesday in December) from 

7.00pm at the St George Workers’ Club. Many of the group 

will arrive early for dinner from 6pm. A daytime discussion 

group meet on the second Tuesday of the odd months from 

1.00pm at the Elephant & Castle Hotel. Many of the group 

will arrive early for lunch from 12 noon. 

Convenors: Peter Johnston, 0419 104 473 or Graeme 

Hawkins, 03 5229 0006. 

GIPPSLAND REGIONAL GROUP 

This group has had a recent change of structure as the long 

standing and efficient Secretary, Mike Hall, recently suffered 

a stroke. Oliver Raymond has kindly agreed to take on 

the role as convenor and the first meeting for 2013 will be 

held on Wednesday, 13 March at the Wan Loy Restaurant,

Church Street, Traralgon, starting at 11.00am. There 

will be a charge to cover the one course lunch and the 

guest speaker will be ASA’s own Stephen Mayne. 

Convenor: Oliver Raymond, oliverraymond@widebrand. 

net.au 

KINGSTON DISCUSSION GROUP 

The Kingston Group meet on the second Thursday 

of the month from 10.30 to 12.00 midday at a local 

community centre, Longbeach Place, Chelsea. Each 

meeting has a theme leader who has an interest in 

the particular topic of the day and has prepared some 

information to share and discuss. Following the meeting 

the attendees go to lunch at a local venue. Convenor: 

Sally Holleywell, 03 9528 2146 

MANNINGHAM DISCUSSION GROUP 

The Manningham Discussion Group meet on the 

second Tuesday of each month, excluding January, 

from 10.00am at Koonarra Hall, Bulleen. It resembles a 

tennis club! Additional parking is available in a car park 

off Furneaux Grove. Following the meeting attendees 

adjourn to the Manningham Club for lunch. Convenor: 

Geoff Read 

MELBOURNE EVENING MEETING 

The Melbourne Evening Meeting is held on the third 

Thursday of the month from February to November 

from 6.00pm at The Rising Sun Hotel. The format is to 

have a presentation from a visiting speaker for an hour, 

followed by questions and answers and then the ASA 

meeting follows until 7.30pm. Dinner is available at the 

hotel after the meeting and members are encouraged 

to attend to meet fellow members. 

Convenor: Adrienne Skarbek, 0438 616 362 

MELBOURNE INVESTOR FORUM 

The Melbourne Investor Forum is held at noon on 

the first Wednesday each month from February to 

December at the Telstra Conference Centre. With high 

profile speakers covering a wide range of topics from 

stock selection techniques through an overview of the 

economy, there will be something to meet the needs 

of all investors. Following the presentation there is 

the opportunity to interact with other ASA members. 

Convenor: Don Hyatt, vic@asa.asn.au 

MONASH GROUP 

The Monash group meets the third Tuesday of the 

month, February to November, from 10.00am at 

the Wheelers Hill Library, Wheelers Hill. For most 

meetings the group has an invited speaker, selected 

to cover a wide range of topics that are appropriate 

to shareholders. The ASA’s monitoring report is 

also presented, after which the group has a general 

discussion on investment matters. 

Convenor: Peter Bacon, 03 9885 7166 

MORNINGTON PENINSULA GROUP 

This group has been in operation for twelve years 

and meets on the third Thursday from February until 

December from 10.00am. The meetings alternate, 

with meetings in even months held at The Mornington 

Information Centre. These meetings provide an update 

from the Victorian Branch on ASA matters and 

general discussion, followed by a guest speaker. The 

discussion group is held in the odd months at Kirks on 

the Esplanade Hotel, Mornington. 

Convenor: Lindsay Gordon, ljg2001@hotmail.com 

WA 

BUSSELTON DISCUSSION GROUP 

Busselton meet on the last Wednesday of every month, 

except December, from 9.30am. The usual venue is the 

Goose Cafe. Approximately 20 to 30 members gather 

to discuss a wide range of investment issues. Generally, 

a guest speaker is invited for every second meeting. 

Meetings conclude no later than 11.30am but it’s not 

uncommon for members to stay on for lunch at the 

award-winning Goose Cafe.Convenor: Bernie Masters, 

bmasters@iinet.net.au, 0408 944 242 

MANDURAH REGIONAL GROUP 

The Mandurah Regional Group was formed in 2007. It 

meets on the first Wednesday of each month, excluding 

January, from 10.00 to 12.00 midday at the Lady Brand 

Lifestyle Village, Mandurah, followed by coffee and 

nibbles. The meetings take the form of discussion 

groups at which members may raise subjects of interest. 

Convenors: Clive Newland, 08 9535 9515 and Val Green 

08 9537 7182 

PERTH INVESTOR CORNER 

Commencing February 2013 the Perth Investor Corner 

will meet on the third Thursday of each month from 

10.00am at the Citiplace Community Centre, City Station 

Complex, Wellington Street, Perth. The Convenor, Len 

Roy, is also responsible for convening the Perth BIG E 

Group. 

Convenor: Len Roy, 08 9448 5620 or 0400 292 171 

PERTH MONTHLY MEMBERS MEETING 

The Perth monthly members meeting is held for an hour 

on the first Tuesday of each month (except January and 

a week later in November), at the State Library Theatre 

in Northbridge at 10:30am before the Investor Forum, 

which follows at noon. The meeting may have a guest 

speaker, relate member experiences and skills, or be a 

discussion forum. Convenor: Peter Jensen, pjfollyfarm@ 

gmail.com, 0402 910 707 

PERTH NORTH OF THE RIVER GROUP 

The Perth Western Australia ‘North of the River’ group 

meets on the second Tuesday of each month (except 

January) at the Paddington Ale House, Mount Hawthorn 

from 9.30am. The two meeting convenors, Barrie Baker 

and Bert Pryor, provides lists of companies, which have 

been identified as recent movers in the market, and in 

depth analysis of recent buying and selling patterns to 

guide investment policy. 

Convenors: Barrie Baker and Bert Pryor 

PERTH SOUTH OF THE RIVER GROUP 

The Perth South of the River group has been meeting 

for around 11 years. The format is to discuss a chosen 

topic for approximately 40 minutes and then break for 

a coffee and reform into small groups of six or seven a 

table to generally discuss investing. Half way through 

the remaining time, members swap places to talk with 

more than one group. Recently the venue changed to 

the Eco Centre and the meeting date is not stable as yet. 

Convenor: Gerry Pauley, 08 9258 5465 


QLD 

QLD 

BAYSIDE DISCUSSION GROUP 

This group meet on the third Monday of each month, 

except in January and December, from 7.00pm at the 

Donald Simpson Centre, Cleveland. Presentations or 

discussions are conducted by ASA members or visiting 

speakers. Convenor: Steve McSherry 

BRISBANE INVESTOR FORUM 

Brisbane meet on the second Wednesday, of each 

month, except January, from 11am at the Melbourne 

Hotel, West End. There is a speaker on a topic of interest 

followed by a short ASA member discussion time. Those 

who wish to stay adjourn for lunch downstairs where 

they can meet other members. In 2013 it is planned to 

sometimes conduct workshops and other educational 

activities after lunch. Convenor: Alison Harrington, 

qld@asa.asn.au 

GOLD COAST GROUP 

Commencing in 2013 this group will meet on the second 

Tuesday of each month, except January, from 9.30am 

at the Robina Community Centre, located opposite the 

Robina Library, Robina. Following a presentation by a 

guest speaker, members are encouraged to stay for 

informal discussion over morning tea for which there is 

a small charge. Convenor: Chris Kelly 

SUNSHINE COAST GROUP 

This group was formed about ten years ago and still 

meet regularly on the third Tuesday of every alternate 

month starting in February from 10.00am. The meetings 

are held at the Goodlife Community Centre, Buderim. 

The group have an active committee who help source 

the guest speakers. 

Convenor: Don Matthews, 07 5445 1563. 

ASA MEDIA 

ExPOSURE 

With the AGM in full swing the ASA has featured 

regularly in the press. Below are a sample of ASA’s 

publicity. Many more are posted to the ‘ASA in the 

Media’ at www.asa.asn.au. 

TRADING ROOM 

15 October 2012 – Murdoch to face shareholder 

discontent 

THE AUSTRALIAN 

15 October 2012 –Tatts chair defends record as ASA 

opposes his re-election 

THE CANBERRA TIMES 

16 October 2012 – Cochlear cops first ‘strike’ of the 

season 


SA 

The South Australian Branch holds a number of meetings 

with the likelihood of the venue changing for 2013. A 

discussion group is held on the first Wednesday of the 

month from 10.30am; a “Resources’ discussion group 

is held on the second Wednesday of the month from 

10.30am and the ASA General Meeting followed by the 

Investor Forum is held on the third Wednesday of the 

month, commencing at 11.30am. Some members have 

coffee before, and lunch after, meetings. Convenor: Kevin 

Parken, sa@asa.asn.au 

ACT 

ACT NORTHSIDE DISCUSSION GROUP 

The ACT Northside group meets on the second Wednesday 

of each month, except for January, from 12.30 to 2.30 pm 

at Black Mountain Guides Hall, Lyneham. A $2 donation 

covers costs. Presentations or discussions are conducted 

by ASA members or visiting speakers. As a learning 

exercise the group monitors a hypothetical portfolio 

with decisions reached by consensus. ACT Committee 

and or monitor meetings sometimes follow this meeting. 

Convenor: Doug Campbell, dougcampbell@grapevine.net. 

au, 0428 844 032 

ACT SOUTHSIDE DISCUSSION GROUP 

The ACT Southside group meets on the first Tuesday of 

each month, except in January when there is no meeting 

and in November when the meeting is held on the second 

Tuesday, from 12.30 to 2.30pm at The Weston Club, 

Weston. A $2 donation covers costs. The format is the same 

as for the Northside Group. Convenor: Marguerite Ranicar, 

marguerite@oceanicsolutions.com.au, 02 6282 6947 

SYDNEY MORNING HERALD 

16 October 2012 – Getting your start in the share market 


16 October 2012 – High-speed trading ‘ripping off’ 

investors 

ABC NEWS 

16 October 2012 – News Corp’s restive shareholders 

NINEMSN 

17 October 2012 – CSL’s outgoing CEO McNamee 

praised 

ABC NEWS 

17 October 2012 – Shareholders welcome Bluescope 

CEO pay cut 


20 October 2012 – Shareholders’ message coming in loud 

and clear for directors

EDUCATION 

To register call 

Note: 

Early bird available 

until two weeks 

prior to the event. 

STOCK 

SELECTION 

It is easy to name great companies that everyone would recognise. 

However, they do not always give the best returns, partly because their 

very size limits their ability to grow in percentage terms. Instead we should 

be seeking out companies that a just a little less well-known that have 

superior potential for growth in earnings and dividends. Colin Nicholson 

will conduct an all-day workshop in which he will first show his framework 

for how he finds and assesses these companies. 

LEARNING OUTCOMES 

Participants will be exposed to a methodology that has been proven 

over time. You will go away having had first-hand experience analysing 

and assessing a real company as it stands right then, in a small group 

environment. 

REQUIRED KNOWLEDGE 

These workshops are strictly limited to 30 participants. You will have 

some experience and a basic knowledge of the key accounting ratios will 

be assumed. More important is a good general background in the stock 

market and awareness of the economy and the commercial world. You 

will ideally have read Colin’s book Building Wealth in the Stock Market 

before attending the Masterclass. 

COLIN NICHOLSON 

Colin Nicholson BEc, SF Fin has been investing his own money in 

Australian shares for over 45 years. He has taught both technical analysis 

and fundamental analysis for FINSIA, where he is a Senior Fellow. He has 

been a highly rated speaker at many investor conferences. He has written 

five books on investing and written for numerous publications. 

FINANCIAL REVIEW 

22 October 2012 – Treasury’s tipples too large for ISS 


23 October 2012 – Ansell’s estimates still fit 

BUSINESS SPECTATOR 

23 October 2012 – Fairfax board faces remuneration 

backlash 

BUSINESS SPECTATOR 

24 October 2012 – ASA calls for new Tatts chairman 

ABC ONLINE 

24 October 2012 – Billabong founder hangs onto board 

membership 

HERALD SUN 

24 October 2012 – Rinehart strikes back at Fairfax board 

FINANCIAL REVIEW 

29 October 2012 – Perpetual expects to pass muster on pay 

1300 368 448 

or register 

online at 

www.asa.asn.au 

MASTERCLASS 

BRISBANE COURSE 09.03.2013 

Time : 9am to 4.30pm, registration from 8.30am 

Venue : Mantra Southbank, 161 Grey Street, South Bank 

MELBOURNE COURSE 16.03.2013 


Venue : Oaks on Collins, 480 Collins Street, Melbourne 

SyDNEy COURSE 23.03.2013 

Includes lunch, 

refreshments 

and handouts 


Venue : North Sydney Harbourview Hotel, 17 Blue Street 

Members early bird $150pp 

Members standard $170pp 

Book early to avoid 

disappointment! 

Numbers strictly limited 

to 30 per workshop. 


31 October 2012 – Funke Kupper joins Tabcorp board 


2 November 2012 – Shareholders approve Qantas exec pay 


2 November 2012 – Tinkler haunting presence for 

Whitehaven 


13 November 2012 – Seven narrowly avoids first strike 

THE AGE 

14 November 2012 – Clock ticking down for Cabcharge 


15 November 2012 – PaperlinX gets first strike in protest 

over payments to former execs 


ASA Meetings December 2012 / January 2013 

Location Date Time Venue Speaker Topic 

Perth North 

of the River 

Group 

Perth South of 

the River 

Perth 

Investors' 

Corner 

Perth South 

of the River 

Group 

11-Dec-12 9.30am Paddington Ale House, 

141 Scarborough Beach 

Road, Mt Hawthorn 

18-Dec-12 10.00am Canning River Eco 

Education Centre, Wilson 

20-Dec-12 10.00am 1F, Citiplace Community 

Centre, Wellington St, 

Perth 

18-Jan-13 10.00am Canning River Eco 

Education Centre, Wilson 

Busselton 30-Jan-13 9.30am The Goose Restaurant, 

Geographe Bay Rd, 

Busselton 

Perth 

Members 

Meeting 

Perth 

Investors 

Forum 

05-Feb-13 10:30am State Library Building, 

Perth 

05-Feb-13 12:00 

midday 


State Library Building, 

Perth 

Victoria 

Discussion group led by Barrie 

Baker, ASA 

Discussion group led by Gerry 

Pauley 

Discussion group led by Lloyd 

Phillips and Len Roy, ASA 

Discussion group led by Gerry 

Pauley 

Discussion group led by Bernie 

Masters, ASA 

Barry Nunn 

ASA 

TBA TBA 

Investment related topics 

Company analysis & General 

discussion 

A different investment related 

topic each month 

Company analysis & General 

discussion 

Investment related topics 

ASA Matters 


Manningham 11-Dec-12 10.00am Koonarra Hall, 7 Balwyn 

Road, Bulleen 

Geelong 11-Dec-12 6.00pm St George Workers Club, 

212 Pakington Street, 

Geelong West 

Ballarat 12-Dec-12 7.30pm Eastwood Leisure 

Complex, 20 Eastwood 

Street, Ballarat 

Kingston 13-Dec-12 10.30am Longbeach Place, 15 

Chelsea Road, Chelsea 

Mornington 20-Dec-12 11.00am Mornington Information 

Centre, 320 Main Street, 

Mornington 

Geelong 08-Jan-13 12:00 

Midday 

Albury 

Wodonga 

Melbourne 

Investors Forum 

Monash 

Meeting 

22-Jan-13 10.00am Commercial Club, 618 

Dean Street, Albury 

06-Feb-13 12:00 

Midday 

Manningham Discussion 

Group 

Discussion Group 

Geelong Discussion Group General investment topics 

Tim Hovey, Prowse, Perrin & 

Twomey 

Christmas stocks and stocktake 

Kingston Discussion Group Short selling round the table 

Bruce Billson, MP Forum Discussion 

Elephant & Castle Hotel Geelong Discussion Group General investment topics 

Conference Centre, 242 

Exhibition St, Melbourne 

19-Feb-13 10.00am Monash Public Library 

Wheelers Hill 

Bendigo 20-Feb-13 10.00am Bendigo Club, 22 Park 

Street, Bendigo 

Melbourne 

Evening 

21-Feb-13 6:00pm Rising Sun Hotel 

South Melbourne 

Melbourne 16-Mar-13 9.00- 

4.30pm 

Western Australia 

Oaks on Collins, 480 

Collins Street, Melbourne 

Merv McDougal A Monitors Report - Two 

Companies 

George Boubouras, UBS 2013 Outlook: Implications for 

your portfolio 

Stephen Mayne, 

ASA 

TBA TBA 

Michael Hefferman 

Lonsec 

AGM Season 

Where’s the Market Heading? 

Colin Nicholson Stock selection masterclass

Visit www.australianshareholders.com.au for all the latest 

Queensland 


Brisbane 

Investor Forum 

12-Dec-12 11.00am The Melbourne Hotel,10 

Browning St, West End 

Sunshine Coast 18-Dec-12 10.00am Good Life Centre, 100 

Buderim Pines Road 

Brisbane 


13-Feb-13 11.00am The Melbourne Hotel, 10 

Browning St, West End 

Brisbane 09-Mar-13 9.00- 

4.30pm 

Mantra Southbank 161 

Grey Street South Bank 

ASA Members Christmas Lunch & Company 

Monitor Reports 

Alison Harrington, ASA An ASA update 

TBA TBA 

Australian Capital Territory 

Colin Nicholson Stock selection masterclass 


Lyneham 12-Dec-12 12.30pm Black Mountain Guides 

Hall, 44 Clianthus Street 

Weston 05-Feb-13 12.30pm Weston Club, 1 Liardet 

Street, Weston 

Lyneham 13-Feb-13 12.30pm Black Mountain Guides 

Hall, 44 Clianthus Street 

South Australia 

Northside Discussion 

Group 

Southside Discussion 

Group 

Northside Discussion 

Group 

General investment topics 




Adelaide 


12-Dec-12 12.00 

midday 

Union Theatre, L5, 

University of Adelaide 

Adelaide 19-Dec-12 10.30am University of Adelaide 

Club,Adelaide 

Adelaide 16-Jan-13 12:00 

Midday 

New South Wales 


Sydney Investor 

Forum 

12-Dec-12 12.00 

midday 

Sydney Mechanics' 

School of Arts, 280 Pitt St 

Port Macquarie 14-Dec-12 10.00am Senior Citizens Centre, 

Munster Street 

Sydney 18-Dec-12 12.00 

midday 

Sydney - North 

Shore 

Sydney Investor 

Forum 

Kirribilli Hotel, 35-37 

Broughton St, Kirribilli 

21-Dec-12 10.00am Killara Uniting Church Hall, 

9 Karranga Avenue, Killara 

15-Jan-13 12.00 

midday 

Sydney Mechanics' School 

of Arts, 280 Pitt St, Sydney 

Port Macquarie 11-Jan-13 10.00am Senior Citizens Centre, 

Munster Street 

Sydney - North 

Shore 

18-Jan-13 10.00am Killara Uniting Church Hall, 9 

Karranga Avenue, Killara 

Newcastle 21-Jan-13 10.45am Club Macquarie, 458 Lake 

Road, Argenton 

Albury- 

Wodonga 

22-Jan-13 10.00am Commercial Club, 618 

Dean Street, Albury 

Bondi Junction 05-Feb-13 10.30am Meeting Room 1, Mill Hill 

Centre, 31-33 Spring St 

Sydney 23-Mar-13 9.00- 

4.30pm 

North Sydney 

Harbourview, 17 Blue St 

Peter Thornhilll 

Motivated Money 

Mid North Coast Discussion 

Group 

Tony Catt, Catapault Wealth Investment in the New Year 

Chaired by Keith Potts, ASA 

Member 

Cash or Shares? The Right 

Balance 

Christmas meeting 

Vas Kolesnikoff, ASA CEO Christmas Lunch: The AGM 

wrap up 

Sydney North Shore 


Steven Johnson, Intelligent 

Investor Funds 

General investment related 

topics 

Outlook for 2013 

Clime Asset Management Clime Masterclass 

Sydney North Shore 


Michael Perry NSW 

Chairman 


topics 


topics 

Merv McDougal A Monitors Report - Two 

Companies 

Bondi Discussion Group Investment related topics 

Colin Nicholson Stock selection masterclass 

Resource related topics 

Hackney Hotel ASA luncheon SA 2013 start to the 

New Year lunch 


THE CONfERENCE 

The ASA making a difference Conference is for all 

investors who want to know more about: 

• the economy 

• markets and sector issues facing your portfolio 

• alternative investment options in shares, hybrids, 

bonds, fixed income and property 

• different investment strategies to meet your needs 

• establishing and managing a self managed 

superannuation fund 

• good corporate governance to maximise your 

investment returns 

SAVE $100 

regiSTer BY 28Th feBrUarY 

EARLY BIRD MEMBER REGISTRATION 

includes lunch, 

refreshments, papers, 

happy hours 

$545 

EARLY BIRD NON MEMBER REGISTRATION 

includes the above 

and a 1 year classic 

membership 

$660 

Making a 

Difference 

fEATURING 

NatiONaL 

cONFErENcE 

6-8 MAy 

2013 

syDNEy 

SHERATON ON THE PARK 

PRU BENNETT, Director, Blackrock 

PETER BOBBIN, Managing Director, Argyle Lawyers 

PETER COX, Cox Media 

AARON DUNN, Managing Director, The SMSF Academy 

ELMER FUNKE KUPPER, CEO, ASX 

GLYN LAWCOCK, Managing Director, UBS 

JON LECHTE, CEO, FIIG Securities 

STEPHEN MAYNE, ASA Policy & Engagement Coordinator 

GREG MEDCRAFT, Chairman, ASIC 

ROGER MONTGOMERY, CIO, The Montgomery Fund 

COLIN NICHOLSON, Author & Educator 

SHANE OLIVER, Chief Economist, AMP Capital 

SHERATON ON THE PARK 

are offering delegates an 

exceptional rate of $245 

per night or $260 including 

breakfast for one. An 

additional breakfast will be 

$15pp (RRP $42!) 

for More inforMaTion or To regiSTer 

www.asa.asn.au or 1300 368 448 

HARBOUR DINNER CRUISE 

includes canapés 

3 course seated dinner 

and drinks 

$99

Read more - Henderson Maxwell

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