Notice of Annual General Meeting & Explanatory - HotCopper

Notice of Annual General Meeting & Explanatory - HotCopper

Notice of Annual General Meeting & Explanatory Memorandum For the Meeting of Members to be held at Suite 8, Level 14, 370 Pitt Street, Sydney NSW 2000...

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Notice of Annual General Meeting & Explanatory Memorandum For the Meeting of Members to be held at Suite 8, Level 14, 370 Pitt Street, Sydney NSW 2000 at 1000 hours (AEDT), Monday, 27 November 2017.

PREPARED BY: AUSTIN HAWORTH & LEXON LEGAL (SYDNEY) | SUITE 1204 / 87-89 LIVERPOOL STREET, SYDNEY 2000

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PREPARED BY: AUSTIN HAWORTH & LEXON LEGAL (SYDNEY) | SUITE 1204 / 87-89 LIVERPOOL STREET, SYDNEY 2000

Australia United Mining Limited ACN 126 540 547

NOTICE OF ANNUAL GENERAL MEETING Notice is hereby given that the annual general meeting of Shareholders of Australia United Mining Limited (AYM) will be held at Suite 8, Level 14, 370 Pitt Street, Sydney NSW 2000 on Monday, 27 November 2017 at 1000 hours (AEDT) (Meeting). The Explanatory Memorandum provides additional information on the business of the Meeting. The Explanatory Memorandum and the Proxy Forms are included in this Notice. The Directors have determined pursuant to regulation 7.11.37 of the Corporations Regulations 2001 (Cth) that the persons eligible to vote at the Meeting are those who are registered as Shareholders of AYM at 1900 hours on Sunday, 26 November 2017. Capitalised terms and abbreviations used in the Notice are defined in Schedule 1.

Business ITEM 1.

AYM Financial Report

To receive the financial statements, Directors’ report and auditor’s report for AYM and its controlled entities for the financial year ended 30 June 2017.

ITEM 2.

Remuneration Report*

To consider and if thought fit, pass the following resolution as an ordinary resolution: “That the Remuneration Report of AYM and its controlled entities for the financial year ended 30 June 2017 as set out in the Annual Report be adopted.” *Note: this resolution is advisory only and does not bind AYM or the Directors. The Directors will consider the outcome of the vote and comments made by shareholders on the remuneration report at the meeting when reviewing AYM’s remuneration policies. Restrictions on eligibility to vote apply pursuant to Section 250R.

ITEM 3

Re-election of Director – Jianbing ZHANG

To consider and if thought fit, pass the following as an ordinary resolution: “That the following individual, having retired from his office as a Director pursuant to Article 59.1 of the Constitution, be re-elected as Directors pursuant to the Constitution: 1)

Jianbing ZHANG.”

ITEM 4

Re-election of Director – Jia YU

To consider and if thought fit, pass the following as an ordinary resolution: “That the following individual, having retired from her office as a Director pursuant to Article 59.1 of the Constitution, be re-elected as Directors pursuant to the Constitution: 1)

ITEM 5

Jia YU.”

Appointment of Director

To consider and if thought fit, pass the following as an ordinary resolution: PREPARED BY: AUSTIN HAWORTH & LEXON LEGAL (SYDNEY) | SUITE 1204 / 87-89 LIVERPOOL STREET, SYDNEY 2000

“That, pursuant to Article 57.3 of the Constitution, appoint James WANG as a Director.”

ITEM 6

Additional capacity to issue equity securities

To consider and if thought fit, pass the following as a special resolution: “That, pursuant to ASX Listing Rule 7.1A, AYM to have additional capacity to issue a further 10% of its issued share capital over and above the 15% placement capacity specified in ASX Listing Rule 7.1.”

BY ORDER OF THE BOARD

Jason Ding Company Secretary 24 October 2017

PREPARED BY: AUSTIN HAWORTH & LEXON LEGAL (SYDNEY) | SUITE 1204 / 87-89 LIVERPOOL STREET, SYDNEY 2000

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PREPARED BY: AUSTIN HAWORTH & LEXON LEGAL (SYDNEY) | SUITE 1204 / 87-89 LIVERPOOL STREET, SYDNEY 2000

Australia United Mining Limited ACN 126 540 547

Explanatory Memorandum A.

Introduction

This Explanatory Memorandum has been prepared for the information of Shareholders of AYM in connection with the business to be conducted at the Meeting of Shareholders to be held on at Suite 8, Level 14, 370 Pitt Street, Sydney NSW 2000 on Monday, 27 November 2017 at 1000 hours (AEDT). This Explanatory Memorandum should be read in conjunction with and forms part of the accompanying Notice. The purpose of this Explanatory Memorandum is to provide information to Shareholders in deciding whether or not to pass the Resolution in the Notice. Capitalised terms and abbreviations used in the Explanatory Memorandum are defined in Schedule 1. A Proxy Form is located at the end of the Explanatory Memorandum. The Resolution, if passed will have an impact on AYM. This Explanatory Memorandum provides the information considered necessary for Shareholders to make an informed decision whether to support the Resolution. However it is also appropriate that shareholders consider the impact on AYM in the event that the Resolution is passed.

B.

Voting at the Meeting

Shareholders should read the Notice, including the Explanatory Memorandum carefully before deciding how to vote on each Resolution. Votes by proxy (a) a member of AYM entitled to attend and vote at the Meeting may appoint not more than two proxies to attend and vote at the general meeting on that member’s behalf; (b) A proxy needs not be a member of AYM; (c) If a member appoints one proxy, that proxy may, subject to the Corporations Act, vote on a show of hands; (d) If a member appoints two proxies and the appointment does not specify the proportion or number of the member’s votes each proxy may exercise, each proxy may exercise half the votes; (e) A proxy may demand or join in demanding a poll; (f) A proxy may vote or abstain as he or she chooses except where the appointment of the proxy directs the way the proxy is to vote on a particular resolution. If an appointment directs the way the proxy is to vote on a particular resolution: a. The proxy need not vote on a show of hands, but if the proxy does so, the proxy must vote that way; b. If the proxy has two or more appointments that specify different ways to vote on the resolution – the proxy must not vote on a show of hands; c. If the proxy is the chair – the proxy must vote on a poll and must vote that way; and d. If the proxy is not the chair – the proxy need not vote on a poll, but if the proxy does so, the proxy must vote that way. (g) If: a. A member nominates the chairperson of the meeting as the proxy; or b. The chairperson is to act as proxy under Article 51 of the Constitution or otherwise under a default appointment according to the terms of the proxy form, Then the person acting as chairperson in respect of an item of business at the meeting must act as proxy under the appointment in respect of that item of the business. The proxy form A Proxy Form is enclosed with the Notice. This is to be used by Shareholders if they wish to appoint a representative (a proxy) to vote in their place. PREPARED BY: AUSTIN HAWORTH & LEXON LEGAL (SYDNEY) | SUITE 1204 / 87-89 LIVERPOOL STREET, SYDNEY 2000

All Shareholders are invited and encouraged to attend the Meeting or, if they are unable to attend in person, sign and return the Proxy Form to AYM in accordance with the instructions thereon. Lodgement of a proxy form will not preclude a Shareholder from attending the Meeting in person. The enclosed Proxy Form provides further details on appointing proxies and Proxy Form lodgement.

ITEM 1. Financial Report The financial statements, Directors’ report and auditor’s report for ASX for the year ended 30 June 2017 will be laid before the meeting. There is no requirement for shareholders to approve these reports. However, the Chairman will allow a reasonable opportunity for shareholders to ask questions about, or make comments on, the operations and management of AYM. Shareholders will be given a reasonable opportunity to ask the auditor questions about the conduct of the audit and the content of the auditor’s report. BOARD RECOMMENDATION The board of directors recommends that you vote in favour of this item.

ITEM 2. Remuneration Report Section 317(1) of the Act requires the Company’s financial report, Director’s report and the auditor’s report for the financial year ended 30 June 2017 to be laid before the Meeting. There is no requirement for a formal resolution on this item. The Annual Report, which contains the Directors’ Report, the Financial Report and the Remuneration Report, is available on AYM’s website (http://australiaunitedmining.com.au/) and ASX’s website (http://www.asx.com.au/asxpdf/20171002/pdf/43mvyqn575cygz.pdf). Voting exclusion: In accordance with section 250R(4) of the Act, a vote on this resolution must not be cast (in any capacity, whether as proxy or as shareholders) by or on behalf of either of the following persons: (a) a member of the key management personnel details of whose remuneration are included in the remuneration report; (b) a closely related party of such a member. However, the above persons may cast a vote on this resolution if: (c) the person does so as a proxy appointed in accordance with the directions of the proxy form that specifies how the proxy is to vote on this resolution; and the vote is not cast on behalf a person described in subparagraph (a) and (b) above; or (d) the person is the chair of the meeting appointed as proxy 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 authorise the chair to exercise the proxy even if the resolution is connected directly with the remuneration report; and the vote is cast on behalf of a person described in subparagraph (a) and (b) above.

BOARD RECOMMENDATION The board of directors recommends that you vote in favour of this item.

ITEM 3 & 4. Re-election of Directors Article 59.1 of the Constitution requires two (2) Directors to retire at the close of each Annual General Meeting. Accordingly, Mr. Zhang and Ms. Yu retire from their office as Directors in accordance with Article 59.1 of the Constitution and, being eligible under Article 59.5 of the Constitution, offer themselves for reelection as Directors. Please refer to the 2015 and 2014 Annual Reports for information about Mr. Zhang and Ms Yu. BOARD RECOMMENDATION The board of directors recommends that you vote in favour of these items. PREPARED BY: AUSTIN HAWORTH & LEXON LEGAL (SYDNEY) | SUITE 1204 / 87-89 LIVERPOOL STREET, SYDNEY 2000

ITEM 5. Appointment of Director – James WANG James WANG graduated from Beijing University of Aeronautics and Astronautics and holds a Real Estate Licence and Australia Credit Licence. Mr. Wang was the Chief Executive Officer of Credit Asset Management Limited T/A SAM Loans, and Director of Sam Real Estate Pty Ltd T/A SAM Real Estate and the Chairman of E-Property Group and E-Property Platform and E-Property Asset Management. Mr. Wang also has 19 years experiences in the mortgage industry and 10 years experiences in Real Estate as set out below: July 2016 – Present

E-Property Group and E-Property Platform Pty Ltd

Dec 2004 – Dec 2016

Credit Asset Management Limited (CAML), Credit Mortgage Pty Ltd and Sam Real Estate Chief Executive Officer (MFAA Full Membership and Real Estate Agent’s Full Licence) Broaden lending products includes personal loan, car loan and equipment loan. Built in new commercial loan lending providers with some major banks include Citibank, Bankwest Westpac and National Australia Bank. Set up Real Estate business both in Sydney and Melbourne which called Sam Real Estate. The company employed about 30 full time stuff and 60 agents cross Sydney, Melbourne and Brisbane

Jan 2000 – Nov 2004

Credit Mortgage Pty Ltd in Victoria Branch State Manager During the establishment period of Victoria Branch, involved in every step of loan application from pre-check of application to the settlement. This includes pre-check, credit analysis, approval, settlement and post settlement.

June 1997 – Jan 2000

Real Estate sub-agent and Mortgage broker Working as a real estate agent and mortgage and mortgage broker to do my own market and sell non-banking products.

June 1995 – June 1997

Gaming Technician for AWA Ltd in Victoria

August 1985 – Feb. 1992

Die & Mould Institute of Beijing I was working in Automatic Control Dept. as an Electronic Engineer.

The board of directors consider Mr. Wang’s skills complement and are valuable to the board’s existing skills and experience and that Mr. Wang’s nomination had been accepted by AYM on 6 October 2017, being at least 35 business days before the date of the Meeting. BOARD RECOMMENDATION The board of directors recommends that you vote in favour of this item.

ITEM 6. Additional capacity to issue equity securities Introduction PREPARED BY: AUSTIN HAWORTH & LEXON LEGAL (SYDNEY) | SUITE 1204 / 87-89 LIVERPOOL STREET, SYDNEY 2000

ASX Listing Rule 7.1A was introduced in 2012 and enables eligible entities (those which are not included in the S&P/ASX300 index and which have a market capitalisation equal to or less than $300 million) to issue up to a further 10% of their issued share capital, over and above the 15% placement capacity specified in ASX Listing Rule 7.1. AYM is an eligible entity as it is not included in the S&P/AX 300 index and has a current market capitalisation that is below $300 million. To date, AYM has never obtained approval under ASX Listing Rule 7.1A before as it had never been tabled at any annual general meetings. Any securities issued must be in the same class as an existing class of quoted securities. AYM currently has 1 class of securities on issue, being the shares (ASX code: AYM). The exact number of additional securities that AYM may issue with the passage of the resolution pursuant to Listing Rule 7.1A will be calculated according to the following formula: (A x B) – c Where: A

Is the number of shares on issue 12 months before the date of issue or agreement: 1)

Plus the number of shares issued in the previous 12 months under an exception in ASX Listing Rule 7.2;

2)

Plus the number of partly paid shares that became fully paid in the previous 12 months;

3)

Plus the number of shares issued in the previous 12 months with approval of Shareholders under Listing Rules 7.1 and 7.4 and not including issues of securities under AYM’s 15% placement capacity without Shareholder’s approval; and

4)

Less the number of shares cancelled in the previous 12 months.

B

Is 10%.

C

Is the number of 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 resolution is proposed as an approval at large for the purpose of allowing AYM to have an additional mean of raising capitals in the subsequent 12 months only. Pursuant to ASX Listing Rule 7.1A.1, an approval of this resolution allows AYM to have the option of issuing additional securities in the 12 months calculated from the date of the Meeting. The benefit of being able to issue additional securities is that, before the capacity is raised, AYM would only able to issue up to 15% of its issued capital on a non-pro-rata basis without shareholder approval in any rolling 12 month period; after the passage of the resolution, AYM shall be allowed to issue an additional 10% of its issued capital, bringing its total head-room or placement capacity to 25%. Passing the said resolution will improve AYM’s access to capital and funding, especially considering its narrow range of shareholders and the limited usefulness of pro-rata rights issues as a fundraising tool. Further, with speculative investments, the ability to return regularly to shareholders for further injections of capital on a pro-rata basis can also be limited. As such, placements are a very common and crucial source of capital for companies fitting AYM’s profile. ASX analysis showed that in 2011, placements provided close to 70% of the secondary capital needs for small to mid-level companies. At the moment, AYM does not have any plan nor has contemplated any specific parties to whom such additional securities shall be issued. Should AYM formulates or intends to make such issues, the Shareholders shall be duly notified of the following: 1) 2) 3) 4)

The proposed date of such issue(s); The purpose(s) of such issue(s); If any of the issue(s) is for non-cash consideration; as well as AYM’s allocation policies in relation to any such issue(s).

Issuance of new securities and its effect(s) Notwithstanding AYM not having any specific intentions at the moment to issue additional securities, if AYM does intend to do so, such securities shall be issued with a minimum price calculated by PREPARED BY: AUSTIN HAWORTH & LEXON LEGAL (SYDNEY) | SUITE 1204 / 87-89 LIVERPOOL STREET, SYDNEY 2000

reference to 80% of the volume weighted average price of AYM’s securities of the relevant class, calculated over 15 ASX trading days on which trades in that class were recorded immediately before: 1) 2)

The date on which the price at which the securities are to be issued is agreed; or If the securities are not issued within 5 ASX trading days of the date in the previous paragraph, the date on which the securities are issued.

Further, should new securities be issued, the Shareholders need to be advised that their voting powers will decrease (explained in paragraph a below) and there is a risk for the values of AYM’s shares to decrease significantly (explained in paragraph b below). Whereas these risks exist whenever new securities are issued, the passage of the resolution has the ability to magnify the risks as AYM shall be able to issue 10% more securities than it would ordinarily issue. (a) Dilution of voting power Shareholders need to be advised that any issue of additional securities will dilute the interests of existing Shareholders who do not receive any shares under the issue. If the resolution is approved and passed by the Shareholders and AYM issues the maximum number of shares it is able to issue, the economic and voting dilution of existing Shares would be as shown in the table below. The table below shows the dilution of existing Shareholders calculated in accordance with the formula outlined in ASX Listing Rule 7.1A(2), on the basis of the current market price of AYM shares and the current number of AYM shares on issue as at the date of this Notice of Meeting. The table also shows the voting dilution impact where the number of shares on issue (variable A in the formula) changes and the economic dilution where there are changes in the issue price of Shares issued pursuant to the passage of the resolution.1 Dilution Number of shares on issue

Issue price (per Share)

1,269,532,682

$0.0015

$0.003

$0.0045

50% decrease in issued price

Issued price

50% increase in issued price

10% voting dilution

1,269,532,682 shares

1,269,532,682 shares

1,269,532,682 shares

Funds raised

$1,904,299

$3,808,598

$5,712,897

10% voting dilution

1,904,299,023 shares

1,904,299,023 shares

1,904,299,023 shares

Funds raised

$2,856,449

$5,712,687

$8,569,346

2,539,065,364

10% voting dilution

(100% increase)

2,539,065,364 shares

2,539,065,364 shares

2,539,065,364 shares

Funds raised

$3,808,598

$7,617,196

$11,425,794

(Current) 1,904,299,023 (50% increase)

Figure 1

Figure 1 adopts the following assumptions: 1) There are 1,269,532,682 shares on issue; 2) The 10% voting dilution reflects the aggregate dilution against the issued share capital at the time of issue. 3) AYM issues the maximum possible number of securities pursuant with the passage of the resolution. 4) AYM has not issued any securities in the 12 months prior to the Meeting. 5) The calculations in Figure 1 do not show the dilution that any one particular shareholder will be subjected to. All shareholders should consider the dilution caused to their own shareholding depending on their specific circumstances. (b) Risk of decreased share value Shareholders should be advised that market price for AYM’s shares may be significantly lower on the issue date than on the date of the Meeting as a result of market’s expectations.

Shareholders should be advised that number of shares on issue (variable A in the formula) could increase as a result of the issue of shares that do not require Shareholder approval (such as under a pro-rata rights issue or those issued under a takeover offer) or that are issued with Shareholder approval under ASX Listing Rule 7.1. 1

PREPARED BY: AUSTIN HAWORTH & LEXON LEGAL (SYDNEY) | SUITE 1204 / 87-89 LIVERPOOL STREET, SYDNEY 2000

Shareholders should also be advised that shares may be issued at a price that is at a discount to the market price for those shares on the date of issue. Approval to issue additional securities may cease to be valid Notwithstanding the passage of the resolution, ASX Listing Rule 7.1A.1 nevertheless sets out that the approval to issue additional securities must be for a period commencing on the date of the annual general meeting at which the approval is obtained and expiring on the first to occur of the following: 1) The date that is 12 months after the date of the annual general meeting at which the approval is obtained. 2) The date of the approval by holders of the +eligible entity’s +ordinary securities of a transaction under rule 11.1.2 or rule 11.2. Rule 11.1.2 events refer to the approval by Shareholders of significant changes (directly or indirectly) to the nature or scale of AYM’s activities in a meeting. Rule 11.2 events refer to the approval by Shareholders for AYM to dispose of its main undertakings in a meeting. Purpose of issue AYM may issue securities pursuant to the resolution for the following purposes: 1) As cash consideration in which case AYM intends to use funds raised for the acquisition of new resources, assets and investments (including associated expenses), continued projectmanagement expenditures and general working capital; or 2) As non-cash consideration for the acquisition of new resource assets and investment, for which AYM shall provide valuations for such non-cash consideration. Allocation policy AYM‘s allocation policy for the issue of additional securities pursuant to the resolution will be determined by the prevailing market conditions at the time of such propose placement(s) and/or issues. The allottees of the securities for such additional securities have not been determined at present. However, the allottees of such securities could consist of current Shareholders or new investors or both, none of whom will be related parties of AYM unless specifically approved. AYM shall determine the allottees at the time of the issue of such additional securities, having regard to the following factors: 1) The purpose of the issue; 2) Alternative methods for raising funds available to AYM at the time, including but no limited to any entitlement to issue or other offers where existing Shareholders may participate; 3) The effect of the issue on the control of AYM; 4) The circumstances of AYM, including but not limited to the financial position and solvency of AYM; 5) Prevailing market conditions; and 6) Any advice from any advisers if applicable. ASX Listing Rules 7.1A.4 and 3.10.5A When AYM issues additional securities pursuant to the resolution, it will give to ASX: 1) 2)

a list of the allottees of the securities and the number of securities allotted to each allottee in accordance with ASX Listing Rule 7.1A.4; and the information required by the ASX Listing Rule 3.10.5A for release to the market.

Voting exclusion: In accordance with ASX Listing Rule 14.11, a vote on this resolution must not be cast (in any capacity, whether as proxy or as shareholders) by or on behalf of either of the following persons: (a) a person who may participate in the proposed issue;2 and

The words “a person who may participate in the proposed issue” require more than the mere possibility that the person will participate in the proposed issue. For a person’s vote to be excluded in these circumstances, it must be known that that person will participate in the proposed issue. At the moment, AYM does not have specific intentions to issue any additional securities notwithstanding the increased capacity. 2

PREPARED BY: AUSTIN HAWORTH & LEXON LEGAL (SYDNEY) | SUITE 1204 / 87-89 LIVERPOOL STREET, SYDNEY 2000

(b) a person who might who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities if the resolution is passed.3 However, the above persons may cast a vote on this resolution if: (c) the person does so as a proxy appointed in accordance with the directions of the proxy form that specifies how the proxy is to vote on this resolution; and the vote is not cast on behalf a person described in subparagraph (a) and (b) above; or (d) the person is the chair of the meeting appointed as proxy 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 authorise the chair to exercise the proxy even if the resolution is connected directly with the remuneration report; and the vote is cast on behalf of a person described in subparagraph (a) and (b) above.

BOARD RECOMMENDATION The board of directors recommends that you vote in favour of this item.

DECLARATION Other than the information above and otherwise in this Explanatory Memorandum, AYM believes that there is no other information that would be reasonably required by Shareholders in order to decide whether or not it is in AYM shareholder’s best interests to pass the Resolution herein.

Pursuant to footnote 1 and AYM’s non-intention to issue additional securities, Shareholders must consider the proposed resolution on the basis that the person whose vote shall be excluded may or may not get a benefit and that it is possible that their holding will be diluted. 3

PREPARED BY: AUSTIN HAWORTH & LEXON LEGAL (SYDNEY) | SUITE 1204 / 87-89 LIVERPOOL STREET, SYDNEY 2000

Australia United Mining Limited ACN 126 540 547

Schedule 1 - Definitions In the Notice of Meeting, words importing the singular include the plural and vice versa. Annual Report means the report for the financial year ending on 30 June 2017 that is available at http://australiaunitedmining.com.au/ and http://www.asx.com.au/asxpdf/20171002/pdf/43mvyqn575cygz.pdf. ASX means the ASX Limited (ABN 98 008 624 691) and where the context permits the Australian Securities Exchange operated by ASX Limited; Company means Australia United Mining Limited ACN 126 540 547 (ASX: AYM); Constitution means the constitution of AYM as at the date of the Meeting; Corporations Act means the Corporations Act 2001 (Cth); Director means a director of AYM; Explanatory Memorandum means the explanatory memorandum attached to the Notice of Meeting; Meeting means the meeting the subject of the Notice of Meeting; Notice of Meeting means this notice of meeting dated 24 October 2017; Proxy Form means the proxy form attached to this Notice of Meeting; Resolution means a Resolution contained in this Notice of Meeting; Shares means AYM Shares.

PREPARED BY: AUSTIN HAWORTH & LEXON LEGAL (SYDNEY) | SUITE 1204 / 87-89 LIVERPOOL STREET, SYDNEY 2000

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PREPARED BY: AUSTIN HAWORTH & LEXON LEGAL (SYDNEY) | SUITE 1204 / 87-89 LIVERPOOL STREET, SYDNEY 2000

Suite 6, Level 14 97-99 Bathurst St Sydney NSW 2000