Announcement PDF AUSTRALIAN BAUXITE LIMITED NOTICE OF THE ANNUAL GENERAL MEETING AND EXPLANATORY STATEMENT The Annual General Meeting of Australian Bauxite Limited ACN 139 494 885 will be held at Level 2 131 Macquarie Street Sydney at 2pm on 28 May 2015 NOTICE OF THE ANNUAL GENERAL MEETING Australian Bauxite Limited ACN 139 494 885 Notice is hereby given that the Annual General Meeting of members of Australian Bauxite Limited (the Company) will be held at the registered office of the Company, Level 2 131 Macquarie Street Sydney at 2pm on 28 May 2015. Ordinary Business 1. Financial Statements and Reports To receive the Company’s financial statements and the reports of the Directors and the Auditors thereon for the financial year ended 31 December 2014. 2. Resolution 1: Ordinary resolution to adopt the Remuneration Report To consider and, if thought fit, pass the following resolution as a non-binding resolution. “That the Directors’ Remuneration Report for the year ended 31 December 2014 be and is hereby adopted for the purposes of the Corporations Act 2001”. NOTE: this Remuneration Report is set out on pages 26 to 28 of the Directors’ Report contained in the 2014 Annual Report in accordance with Section 250R(3) of the Corporations Act 2001 (the Act). Voting Exclusion Statement The company will disregard any votes cast on Resolution 1 (in any capacity, whether as proxy or as shareholder) by any of the following: (a) Key Management Personnel; and (b) Closely Related Parties of Key Management Personnel. However, the Company need not disregard a vote if it is: 3. (c) Cast by a person as a proxy appointed in accordance with the directions of the proxy form that specifies how the proxy is to vote on Resolution 1; and the vote is not cast on behalf of a person described in subparagraphs (a) and (b) above; or (d) Cast by the chair of the Meeting as proxy appointed in accordance with the directions of the proxy form for a person who is entitled to vote, and such appointment on the proxy form expressly authorises the chair to exercise the proxy even if the resolution is connected directly with the remuneration report; and the vote is not cast on behalf of a person described in subparagraphs (a) and (b) above. Election of Directors Resolution 2: Ordinary resolution to re-elect Mr Ken Boundy as a Director of the Company To consider and, if thought fit, pass the following resolution as an ordinary resolution: “That Ken Boundy, retiring in accordance with Article 49.1.4 of the Company’s Constitution, be elected as a Director of the Company”. Note: the qualifications and experience of Mr Boundy is provided in the 2014 Annual Report tabled at this Annual General Meeting. 4. Ratification of Previous Share Issues a) Resolution 3: Ordinary resolution to ratify previous share issue To consider and, if thought fit pass, with or without amendment, the following resolution as an ordinary resolution: “That for the purposes of ASX Listing Rule 7.4, and for all other purposes, the shareholders of the Company hereby approve and ratify the allotment and issue of 12,500,000 fully paid ordinary shares at an issue price of $0.30 each on the terms and conditions set out in the Explanatory Statement.” Australian Bauxite Limited Annual General Meeting 28 May 2015 P a g e |3 Voting Exclusion Statement The Company will disregard any votes cast on Resolution 3 by: • any person who has participated in the shares issued under this Resolution 3; and • an associate of any of those persons. However, the Company will not disregard the vote if: • it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or • it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form to vote as the proxy decides. 5. Resolution 4: Special resolution to approve an additional 10% placement facility To consider, and if thought fit, pass with or without amendment, the following resolution as a special resolution: “That, pursuant to and in accordance with ASX Listing Rule 7.1A and for all other purposes, approval is given by the shareholders to allow the Company to issue equity securities up to 10% of the issued capital of the Company (at the time of the issue), calculated in accordance with the formula prescribed in ASX Listing Rule 7.1A.2 and on the terms and conditions set out in the explanatory statement attached hereto.” Note: this resolution is a special resolution and can only be passed if at least 75% of the votes cast, in person or by proxy, by members who are entitled to vote on the resolution, vote in favour. Voting Exclusion Statement The Company will disregard any votes cast on Resolution 4 by any person who may participate in the share issue under this Resolution 4 or a person who may obtain a benefit, except a benefit solely in the capacity of a security holder, or an associate of any of those persons, if Resolution 4 is passed. However, the Company will not disregard the vote if: 6. a) it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or b) it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form to vote as the proxy decides. Resolution 5: Ordinary resolution to issue securities to Sophisticated and Professional Investors. To consider and, if thought fit, pass the following resolution as an ordinary resolution: “That, for the purposes of ASX Listing Rule 7.1 and for all other purposes, the directors are authorized to issue up to 28,000,000 shares in the Company, by way of placements, to sophisticated, eligible and professional investors (being persons to whom a disclosure document is not required to be provided by virtue of s708(8), s708(10) or s708(11) of the Act), at an issue price of not less than eighty percent (80%) of the average market price of the shares of the Company calculated over the last 5 days on which sales in the shares were recorded before the day on which the issue is to be made, and otherwise on the terms and conditions set out in the Explanatory Statement attached hereto.” Note: the shares will be issued no later than three (3) months from the date of the meeting. Voting Exclusion Statement The Company will disregard any votes cast on Resolution 5 by the participants in the proposed share issue under this Resolution 5 or a person who might obtain a benefit, except a benefit solely in the capacity of a security holder, if Resolution 5 is passed or an associate of any of those persons. However, the Company will not disregard the vote if: a) it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or b) it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance Australian Bauxite Limited Annual General Meeting 28 May 2015 P a g e |4 with the directions on the proxy form to vote as the proxy decides. 7. Other Business To transact any other business that in accordance with the Company’s Constitution and the Corporations Act, may be legally brought before an Annual General Meeting. By Order of the Board of Directors Julian Rockett Joint Company Secretary Dated: 17 April 2015 This Notice of Meeting is accompanied by an Explanatory Statement that explains the purpose of the Meeting and the resolutions to be considered at the Meeting. Australian Bauxite Limited Annual General Meeting 28 May 2015 P a g e |5 EXPLANATORY STATEMENT This Explanatory Statement is intended to provide shareholders of Australian Bauxite Limited (the Company) with sufficient information to assess the merits of the Resolutions contained in the accompanying Notice of Annual General Meeting of the Company. The Directors recommend that shareholders read this Explanatory Statement in full before making any decision in relation to the Resolutions. If you have any queries regarding the matters set out in this Explanatory Statement or the preceding Notice please contact the Company or your professional advisor. 1. Financial Statements and Reports The Corporations Act 2001 requires the Financial Report, Directors’ Report and Auditor’s Report for the past financial year to be tabled before the Annual General Meeting, and the Company’s Constitution provides for such reports to be received and considered at that meeting. Neither the Corporations Act 2001 nor the Company’s Constitution requires a vote of shareholders at the Annual General Meeting on such Reports. The Annual General Meeting provides a forum for shareholders to ask questions and make comments on the Company’s reports and accounts and on the business and operations of the Company for the year ended 31 December 2014. In addition, shareholders may, at the meeting, ask questions of the auditor in relation to the following matters: • • • • the conduct of the audit; the content of the auditor’s report; the accounting policies adopted by the Company for the preparation of the financial statements; and the auditor’s independence in relation to the above items. Shareholders may view the Company’s Annual Financial Report on the Company’s website www.australianbauxite.com.au/investors 2. Resolution 1 – Adoption of Directors’ Remuneration Report In accordance with section 250R(2) of the Corporations Act 2001 a resolution that the Remuneration Report be adopted must be put to a vote at the Company’s Annual General Meeting. The vote on this resolution is advisory only and does not bind the Directors or the Company. The Remuneration Report is set out in the Company’s year 2014 Annual Report and is also available from the Company’s website www.australianbauxite.com.au. The Remuneration Report: • describes the policies behind, and the structure of, the remuneration arrangements of the Company and the link between the remuneration of executives and the Company’s performance; • sets out the remuneration arrangements in place for each director and for certain members of the senior management team; and • explains the difference between the bases for remunerating non-executive directors and senior executives, including the Chief Executive Officer. If the Company’s Remuneration Report resolution receives ‘NO’ votes of 25% or more of the votes cast at the meeting, the Company’s subsequent remuneration report will include a report on actions taken by the Board in the Company’s next annual report. The Board will take the outcome of the vote, even if it received a less than 25% ‘NO’ vote into consideration when reviewing the Company’s remuneration policy. A ‘NO’ vote of 25% or more was not received at the Company’s 2014 Annual General Meeting. 3. Election of Directors Resolution 2 – Re-election of Mr Ken Boundy as a Director Mr Ken Boundy retires in accordance with Article 49.1.4 of the Company’s Constitution which provides that any director for whom this would be the third annual general meeting since their last appointment automatically retires at the conclusion of the next Annual General Meeting of the Company. Mr Boundy was appointed as a non-executive director of the company on 6 June 2012. Being eligible, Mr Boundy offers himself for re-election. Australian Bauxite Limited Annual General Meeting 28 May 2015 P a g e |6 4. Resolution 3 - Ratification of Previous Share Issue of 12,500,000 shares December 2014 Resolution 3 seeks shareholder ratification of the issue of 12,500,000 fully paid ordinary shares at an issue price of $0.30 per share pursuant to a private placement to sophisticated and professional investors made on 4 December 2014. Subject to certain exceptions, Listing Rule 7.1 restricts a company from issuing or agreeing to issue equity securities in any 12 months period which amount to more than 15% of the Company’s ordinary securities on issue at the commencement of that period without shareholder approval. ASX Listing Rule 7.4 permits the ratification of previous issues of securities made without prior shareholder approval, provided the issue did not breach the 15% threshold in Listing Rule 7.1. If subsequent approval to ‘personal offer’ is provided by shareholders, it will “refresh” the Company’s ability to issue shares up to the 15% limit without the need for shareholder approval. The Company seeks shareholder ratification of the issue of shares under the personal offer, so that the Company will have flexibility to issue further securities should the need or opportunity arise. In accordance with the requirements of ASX Listing Rule 7.5, the following information is provided to shareholders to allow them to assess Resolution 3: 5. a) A total number of 12,500,000 shares were allotted and issued. b) The shares were issued at an issue price of $0.30 per share. c) The private placement was an “excluded offer” to sophisticated investors determined in accordance with Section 708 of the Corporations Act. The shares were placed with State One Stockbroking Limited, Gleneagle Securities and Calibre Investments in accordance with Section 708 of the Corporation Act. d) None of the allottees is a related party of the Company. e) The shares issued were fully paid ordinary shares and rank equally in all respects with the existing fully paid ordinary shares on issue. f) The securities were issued on 4 December 2014. g) The funds raised will be used to fund exploration development programs in Tasmania, Queensland and New South Wales. h) A Voting Exclusion Statement is included for the purpose of Resolution 3. Resolution 4 –Special resolution to approve an additional 10% placement facility The Company obtained the same approval at last year’s AGM under ASX Listing Rule 7.1A but did not use the 10% Placement Facility. This special resolution is put to members again this year so that the Company retains a high level of capital raising flexibility to meet significant opportunity that may arise. ASX Listing Rule 7.1 prohibits a listed company from issuing equity securities representing more than 15% of its issued capital in any twelve month period without obtaining shareholder approval (subject to certain exceptions). However, under ASX Listing Rule 7.1A, a company can seek shareholder approval to allow up to an additional 10% capacity to issue the same class as existing quoted class of securities over a twelve month period after an annual general meeting. An eligible entity for the purposes of ASX Listing Rule 7.1A is an entity that is not included in the S&P/ASX 300 Index and has a market capitalisation of $300 million or less. The Company is an eligible entity. The Company is now seeking shareholder approval by way of a special resolution to have the ability to issue equity securities under the 10% Placement Facility. A special resolution requires at least 75% of the share voting. If Resolution 4 is approved as a special resolution then the Company, within 12 months after shareholder approval, may issue an additional 10% equity securities calculated in accordance with the formula in ASX Listing Rule 7.1A.2 which is as follows: Australian Bauxite Limited Annual General Meeting 28 May 2015 P a g e |7 (A x D) – E Where A = the number of fully paid ordinary shares on issue 12 months before the date of issue or agreement to issue: a) plus the number fully paid ordinary shares issued in the last 12 months under an exception to ASX Listing Rule 7.2; b) plus the number of partly paid ordinary shares that became fully paid within the last 12 months; c) plus the number of fully paid ordinary shares issued in the 12 months with approval of holders of shares under ASX Listing Rule 7.1 and 7.4 (this does not include an issue of fully paid shares under the equity’s 15% capacity without shareholder approval); d) less the number of fully paid ordinary shares cancelled in the 12 months. Note that A has the same meaning in ASX Listing Rule 7.1 when calculating an entity’s 15% placement capacity. D = 10% E = the number of equity securities issued or agreed to be issued under ASX Listing Rule 7.1A.2 in the 12 months before the date of issue or agreement to issue that are not issued with the approval of shareholders under ASX Listing Rule 7.1 or 7.4. The following information is provided to shareholders for the purposes of obtaining shareholder approval pursuant to ASX Listing Rule 7.3A: a) b) The minimum price at which equity securities can be issued will be calculated in accordance with ASX Listing Rule 7.1A.3 which states the issue price of each equity security must be no less than 75% of the volume weighted average price for equity securities in that class calculated over the 15 days trading days on which trades in that class were recorded immediately before: • the date on which the price at which equity securities are to be issued is agreed; or • if the equity securities are not issued within 5 trading days of the date in paragraph (a), the date on which the equity securities are issued. If Resolution 4 is approved by shareholders and the Company issues equity securities under the 10% Placement Facility, existing shareholders voting power in the Company will be diluted as shown in the table below under point c). There is a risk that: • the market price for the Company’s equity securities may be significantly lower on the date of the issue of the equity securities than on the date of this approval under rule 7.1A; and • the equity securities may be issued at a price that is at a discount to the market price for the Company’s equity securities on the issue date; which may have an effect on the amount of funds raised by the issue of the equity securities. c) d) As at the date of this Notice, the Company would have capacity to issue: • 21,926,160 (139,507,730 x 15%) ordinary shares on the basis that Resolutions 3 is approved pursuant to ASX Listing Rule 7.1; or • 6,551,160 (127,007,730 x 15%)- 12,500,000) ordinary shares, if Resolutions 3 is not approved pursuant to ASX Listing Rule 7.1; and • 13,950,773(139,507,730 x 10%) shares pursuant to ASX Listing Rule 7.1A on the basis that Resolutions 3 and 4 are approved. The below table shows examples of possible dilution of existing shareholders, on the basis of the market price of $0.30 per share on 4 December 2014 and the number of fully-paid ordinary shares on issue of 139,507,730 pursuant to the definition of variable “A” under ASX Listing Rule 7.1A; Australian Bauxite Limited Annual General Meeting 28 May 2015 P a g e |8 Variable A as per ASX Listing Rule 7.1A2 Dilution $0.15 $0.30 50% decrease issue price in issue price $0.60 100% increase in issue price 13,950,773 shares 13,950,773 shares 13,950,773 shares Dilution Funds Raised $2,092,616 $4,185,232 $8,370,464 20,926,160 shares 20,926,160 shares $6,277,848 $12,555,696 27,901,546 shares 27,901,546 shares $8,370,464 $16,740,928 Current Variable A 10% 139,507,730 shares Voting 50% Increase in 10% 20,926,160 Current Variable A Voting shares 209,261,595 shares Dilution Funds Raised $3,138,924 100% Increase in 10% 27,901,546 Current Variable A Voting shares 279,015,460 shares Dilution Funds Raised $4,185,232 3 This table has been prepared on the following assumptions: - - All shares have been issued. the Company issues the maximum number of equity securities available under the 10% Placement Facility. the 10% voting dilution reflects the aggregate percentage dilution against the issued share capital at the time of issue. the table does not show an example of dilution that may be caused to a particular shareholder by reason of placements under the 10% Placement Facility, based on that shareholder's holding at the date of the Meeting. the table shows only the effect of issues of equity securities under ASX Listing Rule 7.1A, not under the 15% Placement Capacity under ASX Listing Rule 7.1. e) Shareholder approval of the additional 10% as per ASX Listing Rule 7.1A is valid from the date of the annual general meeting at which the approval is obtained. This approval will cease on the earlier to occur of: • the date that is 12 months after the date of the annual general meeting at which the approval is gained; or • the date of the approval by shareholders of a transaction under ASX Listing Rules 11.1.2 (a significant change to the nature or scale of activities) or 11.2(disposal of main undertaking). f) The Company may seek to issue the equity securities for the following purposes: • non-cash consideration for the acquisition of new assets and investments. In such circumstances the Company will provide a valuation of the non-cash consideration as required by Listing Rule 7.1A.3; or • cash consideration. As disclosed in recent ASX announcements and reports, the Company is actively pursuing further growth opportunities. Any funds raised using this additional 10% capacity may be used to grow the business and/or additional working capital to fund growth opportunities. The Company will comply with the disclosure obligations under ASX Listing Rules 7.1A (4) and 3.10.5A upon issue of any equity securities. The Company's allocation policy is dependent on the prevailing market conditions at the time of any proposed issue pursuant to the 10% Placement Facility. The identity of the allottees of equity securities will be determined on a case-by-case basis having regard to the factors including, but not limited to, the following: Australian Bauxite Limited Annual General Meeting 28 May 2015 P a g e |9 • • • • the methods of raising funds that are available to the Company, including but not limited to, rights issue or other issue in which existing security holders can participate; the effect of the issue of the equity securities on the control of the Company; the financial situation and solvency of the Company; and advice from corporate, financial and broker advisers (if applicable). The allottees under this facility have not been determined as at the date of this notice but may include new or existing shareholders who are not related parties or associates of a related party of the Company. Further, if the Company is successful in acquiring new assets or investments, it is likely that the allottees under the 10% Placement Facility will be the vendors of the new assets or investments. g) The Company has previously obtained security holder approval under 7.1A. • In the previous 12 months, the Company has issued 12,500,000 FPO being 9.84% of the securities on issue 12 months ago. • There was only one issue of securities in the previous 12 month period per an Appendix 3B (5 December 2014). Details of the issue include: o 12,500,000 equity securities were issued; o Fully paid ordinary shares ranking pari pasu with existing shares on issue. o 12,500,000 was an “excluded offer” to sophisticated investors determined in accordance with Section 708 of the Corporations Act. The shares were placed with State One Stockbroking Limited, Gleneagle Securities and Calibre Investments in accordance with Section 708 of the Corporation Act.. o The shares were issued at an issue price of $0.30 per share. o 12,500,000 shares were issues for cash and the funds raised were and are being used to fund exploration development programs in Tasmania, Queensland and New South Wales. A voting exclusion statement is included in the Notice for the purpose of Resolution 4. 6. Resolution 5 – Approve issue of shares to Sophisticated or Professional Investors Resolution 5 seeks shareholders’ approval, for the purposes of ASX Listing Rule 7.1 and for all other purposes, to authorize the directors to issue, by way of placements, up to 28,000,000 shares to sophisticated, eligible and/or professional investors (being persons to whom a disclosure document is not required to be provided by virtue of s708(8), s708(10) or s708(11) of the Corporations Act), at an issue price of not less than eighty percent (80%) of the average market price of the shares calculated over the last 5 days on which sales of the shares were recorded before the day on which the issue is to be made. For example, if the five day average market price of the shares at the time at which the issue is to be made is 50 cents, the shares would be issued at not less than 40 cents. ASX Listing Rule 7.1 prohibits a company from issuing or agreeing to issue equity securities in any 12-month period which amount to more than 15% of its ordinary securities without the approval of holders of its ordinary securities. Further, equity securities issued with approval of holders of a company’s ordinary securities in accordance with ASX Listing Rule 7.1 are not then required to be included in the 15% limit imposed by ASX Listing Rule 7.1. As at the date of this explanatory statement, the issued share capital of the Company before and after the issue of the shares the subject of this Resolution 5 will be as follows: Current issued share capital Issue of shares to Sophisticated, Eligible and/or Professional Investors Total new issued share capital *Assumptions: Effective Date 15 April 2015. Resolution 3 of this Notice of Meeting are approved. Australian Bauxite Limited Annual General Meeting 28 May 2015 P a g e | 10 139,507,730* 28,000,000 167,507,730 The Company therefore proposes to issue 28,000,000 shares to sophisticated, eligible and/or professional investors, which represents 20.07% of its current issued capital (of 139,507,730 shares). The Company therefore seeks shareholder approval to issue the shares to sophisticated and professional investors pursuant to ASX Listing Rule 7.1. The following information is provided in accordance with ASX Listing Rule 7.3:1. 2. 3. 4. 5. 6. 7. The maximum number of shares the Company will issue to sophisticated, eligible and/or professional investors is 28,000,000 shares; The shares will be issued within three months of the date of this annual general meeting; The issue price(s) for the shares will be not less than eighty (80%) of the average market price of the shares calculated over the last 5 days on which sales in the shares were recorded before the day on which the issue(s) are to be made; The names of the allottees of the shares are not known at this time: the shares will be issued to sophisticated, eligible and/or professional investors (being persons to whom a disclosure document is not required to be provided by virtue of s708(8), s708(10) or s708(11) of the Corporations Act), none of whom will be related parties; The shares will be issued on the same terms as, and rank pari passu with, the existing issued shares of the Company and application will be made for quotation of these shares on the Australian Securities Exchange; The purpose of the proposed share issue is to raise funds that will be used for providing ongoing working capital for the further development of the projects of the Company and its subsidiaries; The Company anticipates issuing the shares progressively as and when investors desiring to invest in the Company are identified (but in any event within three months of the date of this annual general meeting). Voting Information: Voting Entitlement at the Annual General Meeting in accordance with Regulation 7.11.37 of the Corporations Regulations 2001. For the purpose of determining a person's entitlement to vote at the Annual General Meeting, a person will be recognised as a member of the Company and the holder of shares if that person is registered as a holder of those shares at 5.00pm Sydney time on 26 May 2015, being the second day prior to the date of the Annual General Meeting. Votes of Members On a show of hands, each member present in person or by proxy (or, in the case of a body corporate, by a representative) at the Annual General Meeting shall have one vote. On a poll, every member present in person or by attorney or by proxy (or, in the case of a body corporate, by a representative) shall have one vote for each share held provided that all shares are fully paid. Voting Please note that for a resolution to be passed, except where otherwise indicated, a simple majority of votes from shareholders attending in person or voting by proxy is required. Amendments to proxy voting Shareholders are advised that the Federal government has introduced the Corporations Amendment (improving Accountability on Director and Executive Remuneration) Act 2011 (Cth) (the CA Act), which came into effect on 1 July 2011. The CA Act introduced new prohibitions on Key Management Personnel and their Closely Related Parties from voting their shares (or voting undirected proxies) on, amongst other things, remuneration matters. However, the chair of a meeting may vote an undirected proxy (ie. a proxy that does not specify how it is to be voted), provided the shareholder who has lodged the proxy has given informed consent, in the form of an express voting direction to the chair to exercise the undirected proxy, even if the resolution is connected with the remuneration of a member of Key Management Personnel (Informed Consent). In light of these legislative requirements, the Company recommends that shareholders consider the following options to ensure the validity of their votes: Australian Bauxite Limited Annual General Meeting 28 May 2015 P a g e | 11 a) that shareholders direct proxies on a remuneration related resolution instead of leaving them undirected; or b) that shareholders nominate a proxy who is not a member of Key Management Personnel or any of their Closely Related Parties to vote on a remuneration related resolution; or c) that shareholders who wish to vest their undirected proxies in the chair on a remuneration related resolution ensure that they follow instructions provided on the proxy form in order to provide Informed Consent. Australian Bauxite Limited Annual General Meeting 28 May 2015 P a g e | 12