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MONITORS: IAN GRAVES AND PHILIP LAIRD Date 23 October 2014 Venue City Recital Hall, Sydney Attendees ASA proxies Value of proxies Proxies voted Market cap Pre-AGM meeting 189 shareholders/ proxyholders and 119 visitors 3.7m shares from 905 holders $12.3m Yes, by poll $9.1bn AGL AGM Yes, with Chairman 23.8% PROTEST VOTE ON REMUNERATION DESPITE RECORD HIGH STATUTORY PROFIT Chairman Jerry Maycock reported on the FY2014 results noting that although the statutory profit of $570 million was a record high, the underlying profit which the company uses was $562 million down 3.9% on the prior year. This was a consequence of lower demand of electricity and increased funds employed. The Chairman explained that the Macquarie Generation acquisition was the reason for AGL’s capital raising, which was by way of renounceable rights issue to all shareholders, which is in line with ASA’s policy. The raising was a success with 95% of institutional shareholders and 70% of retail shareholders accepting the offer. He then addressed the coal seam gas exploration and development in NSW and AGL’s involvement. The meeting was reminded that fracking was not a new technology. AGL has been operating 150 wells near Camden for 13 years, without incident, 100 of these having been developed by use of the fracking process. In concluding his report, he thanked retiring CEO Michael Fraser for his support and efforts over the past seven years and advised that an executive recruitment company would assist in the selection of Mr Fraser’s replacement. The remuneration report was presented by Mr Les Hosking, Chair of the People and Performance Committee. This year, ASA after a review process, which was not unanimous, recommended support for the resolution. Although still having concerns about the early vesting and large proportion of the LTI share performance rights, 40%, being awarded after one year. Before the voting on the resolution, ASA sought an assurance that the Board would be reviewing the report especially in relation to ASA’s concerns. The Chairman provided the meeting with this assurance. 23.8% voted against the remuneration report and the Board was aware how close they were to a “first strike”. In relation to the termination benefits for eligible senior executives, ASA asked the Chairman whether he could confirm that this resolution only applied to the CEO and the 4 named executives. The Chairman advised that it applied to 23 executives in total. Except for the remuneration report, all resolutions were passed comfortably. MONITOR: DAVID BROOKE Date 29 October 2014 Venue Perth Convention and Exhibition Centre Attendees Approx 100 ASA proxies 601,604 shares from 62 holders Value of proxies Approx $200,000 Proxies voted ATLAS IRON AGM Yes, by poll Market cap $327m Pre-AGM meeting Yes, with Chair, CEO, Company Secretary and IR executive ALL RESOLUTIONS PASSED WHILST ATLAS CONTINUES SWIMMING WITH SHARKS Chairman David Flanagan opened the meeting by thanking his team and providing an overview of the company’s achievements throughout the year. During the presentation, he twice referred to the company’s compliance with a request from the ASA concerning a poll on all motions. In reviewing the company’s performance, the Chairman discussed the falling iron ore price and its resulting impact on share price of all junior iron ore miners. In this context, he asserted that the major producers were significantly expanding production and that they “were swimming with sharks”. The remuneration report received a vote of 3% against. The ASA voted ‘for’ this resolution on the basis that the company was making progress towards ASA policy objectives. The other two resolutions were supported by the ASA and concerned the re-election of a director and a proportional takeover position. Both were carried with about 1% against. The other seven resolutions concerned the issue of performance rights to directors and approval for shares for incentives shares to be issued outside the 15% ceiling. The ASA voted against these motions on the principle that performance shares should be purchased off the market or failing that taken from the 15% cap. Despite the ASA’s views, all these motions were carried with about 97% approval. CEO Ken Brinsden reviewed prospects for the company. In his presentation, he claimed that the company was still striving for a rail transport solution but viewed, as a potential fallback, road transport from some of its deposits within a 200km radius from Port Hedland (Corrunna Downs and McPhee Creek). Mr Brinsden also reiterated his position that the company was not a high cost iron ore supplier and that some of the higher cost Chinese domestic producers were currently going out of business due to falling prices. In response to ASA questioning on possible tariff protection for domestic producers, he produced figures which demonstrated that much of the high cost supply was from imports and not Chinese domestic sources.
BENDIGO BANK AGM MONITOR: REX MCKENZIE Date 27 October 2014 Venue Capital Theatre, Bendigo Attendees 120 ASA proxies 2.67m shares from 551 holders Value of proxies Proxies voted Market cap Pre-AGM meeting $27.2m Yes, by poll $5.4bn Yes, with Chairman and Company Secretary “LONG TERM” INCENTIVES FOR MANAGING DIRECTOR A MYTH AT TWO YEARS Profit increased to $372 million with increases in net interest margin, earnings per share and dividends. Basil 2 accreditation work has increased in order to apply for advanced accreditation in March 2015. This will, if successful, improve control of risks and reduce the cost of doing business, according to Managing Director Mike Hirst. Rural banking is strengthened by the purchase of Rural Finance Corporation, which was paid for by an institutional placement followed by a share purchase plan. We asked why a pro-rata renounceable rights issue was not used because it would be fairer to retail shareholders. Chairman Robert Johanson responded that because the Bank had to pay the vendor by 1 July, there was insufficient time for a rights issue. Shareholders did appreciate that the Bank increased the intended cap of $5,000 to $7,500 per shareholder after representation to the Bank by the ASA. A shareholder asked about doubtful debts with Great Southern investors and other rural debts. The Chairman said that the settlement reached with Great Southern investors was being considered for ratification by the Supreme Court. The outstanding rural debts are mainly to cattle properties affected by the earlier live cattle to Indonesia embargo and years of drought. The Bank is helping these clients and hopes in time to recover the debts. We supported the re-election of Jacqueline Hey and asked why directors were not expected to hold a reasonable number of shares in the company, particularly in view of the use of deferred shares as part of the base pay of senior executives. We suggested a third of their fees after three years; she has about a quarter of that. The Chairman did not like the idea. Although senior executive payments are mainly in line with shareholder interests, 65% of incentive shares which vest at the median point of total shareholder returns is too high. The Managing Director’s five year contract was extended by two years, making it impossible to award long term incentives (LTI) of four years and align his remuneration with shareholder interests. An alternative type of contract could allow for longer LTIs. We voted open proxies against the remuneration report and in favour of the rest, including the resolution on approval of securities for the placement. Jacqueline Hey was elected, the remuneration report and the approval of securities for the share purchase plan passed with 99%, 96% and 85% respectively in favour. MONITORS: JOSEPH TAN AND MALCOLM KEYNES Date 31 October 2014 Venue Adelaide Entertainment Centre Attendees Approx 150 ASA proxies Value of proxies Proxies voted 1.5m shares from 180 holders $1.9m Market cap $280m Pre-AGM meeting HILLS AGM Yes, on rem items only Yes, with Chairman and Deputy CFO ONGOING TRANSFORMATION UNDERWAY, AS SECOND STRIKE IS AVOIDED The key theme for the AGM was the company’s transformation to an IT and technology services company. Both the Chairman and Managing Director reiterated their commitment to the company’s transformation: the past year has been the company’s consolidation for future business growth. It was obvious during the AGM that this episode of the company’s history has been causing tensions for some of the company’s employees and ex-employees. The company’s revenue from continuing operations in FY2014 was $448.3 million, a slight decrease from FY2013. Net cash flow from operating activities was -$15.3 million due to the restructuring and redundancy costs. The company reported a net profit for FY2014 of $26.4 million. The company did highlight that due to the previous year’s tax losses, the company does not expect to produce franked dividends in the short to medium term period. A major part of Hill’s growth strategy is the acquisitions of businesses. In the past year, six companies were acquired in building and healthcare services. 28 new products were developed over the past 12 months, generating $2 million in revenue. The mood at the meeting was generally cordial; noted were probing questions from shareholders about the company’s share buy backs, financial performance, and heated questions on the strategy of the company now being a services and systems importer. The re-election or election of Ian Elliot and Phillip Bullock were passed in favour by over 95%. Last year’s AGM was marked by a first strike against the Remuneration Report. Hills has been consulting and working with shareholders and their representatives (including the ASA) to avoid a second strike. This year’s report was clear and unambiguous and we voted undirected proxies ‘for’ this resolution. No performance rights vested during FY2014. For the long term incentive, the ASA would prefer a performance period of four years with a two year holding period. The company’s strategy for a quick turn transformation was the reason to skew the remuneration more towards the short-term. The Remuneration Report was voted in favour by over 95%, so a second strike was avoided. The approval of performance rights to CEO Ted Pretty was voted by poll and was voted in favour by 88%. We voted ‘for’ this resolution, although the long term incentive plan had a three year performance period with one year holding period, we recognise that the company is prioritising a quick turnaround of the company and remunerating in this direction. EQUITY December 2014 Page 11
Page 1 and 2: EQUITY the trusted voice of shareho
Page 3 and 4: BOARD OF DIRECTORS Ian Curry FCPA F
Page 5 and 6: INFRASTRUCTURE’S KEY BENEFITS ARE
Page 7 and 8: Portfolio planning for the holidays
Page 9: FOR A COMPLIMENTARY REPORT AND PORT
Page 13 and 14: MONITORS: RICHARD MCDONALD AND JOHN
Page 15 and 16: BRICKBATS BOUQUETS To the New Zeala
Page 17 and 18: INVESTING TIPS: What is CHESS and h
Page 19 and 20: Good buy. Cruel world. Intelligent
Page 21 and 22: MORNINGTON ANNUAL DINNER The Mornin
Page 23 and 24: Location Date Time Venue Speaker To

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