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BABYLON PUMP & POWER LIMITED — AGM Information 2011
Oct 23, 2011
64557_rns_2011-10-23_f2bbe1be-70f9-402e-9aa6-9499128e2480.pdf
AGM Information
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IM MEDICAL LIMITED
A C N 0 0 9 4 3 6 9 0 8
NOTICE OF ANNUAL GENERAL MEETING
The Annual General Meeting of the Company will be held at The Quest Beaumont Kew, 7 Studley Park Road, Kew on November 23, 2011 at 2.00 pm (AEDT)
This Notice of Annual General Meeting should be read in its entirety. If Shareholders are in doubt as to how they should vote, they should seek advice from their accountant, solicitor or other professional adviser prior to voting.
Should you wish to discuss any matter please do not hesitate to contact the Company Secretary by telephone on (03) 9613 4100.
1
IM MEDICAL LIMITED
A C N 0 0 9 4 3 6 9 0 8
NOTICE OF ANNUAL GENERAL MEETING
Notice is hereby given that an Annual General Meeting of shareholders of IM Medical Limited ( Company ) will be held at The Quest Beaumont Kew, 7 Studley Park Road, Kew on Tuesday November 23, 2011 at 2.pm (AEDT) ( Meeting ).
The Explanatory Memorandum to this Notice provides additional information on matters to be considered at the Meeting. The Explanatory Memorandum and the Proxy Form form part of 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 on November 21, 2011 at 5.00pm (AEDT).
Terms and abbreviations used in this Notice and the Explanatory Memorandum are defined in Section 6 of the Explanatory Memorandum.
A G E N D A
1. Annual Report
To receive and consider the financial statements of the Company for the financial year ended 30 June 2011 together with the Financial Report, Director’s Report and the Auditor’s Report.
2. Resolution 1 – Adoption of Remuneration Report
To consider and, if thought fit, to pass the following resolution as a non-binding resolution:
“That the Remuneration Report of the Company (as contained in the Directors’ Report) for the year ended 30 June 2011 be adopted.”
Voting Exclusion
In accordance with section 250R of the Corporations Act, a vote on this Resolution 1 must not be cast (in any capacity) by, or on behalf of:
-
(a) a member of the Key Management Personnel whose remuneration details are included in the Remuneration Report; or
-
(b) a Closely Related Party of such member.
However, a person described above may cast a vote on Resolution 1 if:
-
(a) the person does so as a proxy appointed by writing that specifies how the proxy is to vote on Resolution 1; and
-
(b) the vote is not cast on behalf of a person described in subparagraphs (a) or (b) above.
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3. Resolution 2 – Authorise Sale of Radiology Business
To consider and, if thought fit, to pass with or without amendment, the following resolution as an ordinary resolution:
"That, in accordance with Listing Rule 11.2 and for all other purposes, Shareholders approve and authorise the Company to dispose of the Radiology Business pursuant to the Sale Agreement between the Company and Capitol Health on the terms and conditions in the Explanatory Memorandum."
Voting Exclusion
The Company will disregard any votes cast on this Resolution by a person (or any associate of such a person) who might obtain a benefit except a benefit solely in their capacity as holders of ordinary securities if the Resolution is passed.
However, the Company will not disregard a vote if:
-
(a) it is cast by the person as proxy for a person who is entitled to vote, in accordance with 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 a direction on the Proxy Form to vote as the proxy decides.
4. Resolution 3 – Approval of Equal Reduction of Capital
To consider and, if thought fit, to pass, the following Resolution as an ordinary resolution:
“That, for the purposes of section 256B and section 256C(1) of the Corporations Act, and for all other purposes, approval is given for the Company to reduce the share capital of the Company by returning to Eligible Shareholders up to 45,559,021 fully paid ordinary shares in Capitol Health Limited held by the Company on a pro rata basis on and subject to the terms and conditions set out in the Explanatory Memorandum accompanying the Notice of this Meeting ”.
5. Resolution 4 – Re-election of Dr Mark Scott as a Director
To consider and, if thought fit, to pass with or without amendment, the following resolution as an ordinary resolution:
"That, Dr Mark Scott, who retires in accordance with Article 13.2 of the Constitution, being eligible and offering himself for re-election, be re-elected as a Director."
BY ORDER OF THE BOARD
==> picture [92 x 53] intentionally omitted <==
Richard Wadley Director and Company Secretary Dated: October 24, 2011
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IM MEDICAL LIMITED
A C N 0 0 9 4 3 6 9 0 8
EXPLANATORY MEMORANDUM
This Explanatory Memorandum has been prepared for the information of Shareholders in connection with the business to be conducted at the Annual General Meeting of IM Medical Limited.
The Directors recommend Shareholders read this Explanatory Memorandum in full before making any decision in relation to the resolutions.
A Proxy Form is attached to the Notice. This is to be used by Shareholders if they wish to appoint a representative (a "proxy") to vote in their place. 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 the Company in accordance with the instructions provided. Lodgement of a Proxy Form will not preclude a Shareholder from attending and voting at the Meeting in person.
Terms and abbreviations used in this Explanatory Memorandum are defined in Section 6.
1. Financial Statements and Report
Under the Corporations Act 2001, the directors of the Company must table the financial report, the Directors’ Report and the Auditor’s Report for the Company for the year ended 30 June 2011 at the annual general meeting.
Shareholders will be offered the opportunity to discuss the Financial Report, Directors' Report and Auditor's Report at the Meeting. Copies of these reports can be found on the Company’s website www.immedical.com.au or by contacting the Company on (03) 9860 0904.
There is no requirement for Shareholders to approve the Financial Report, Directors' Report and Auditor's Report.
Shareholders will be offered the following opportunities:
-
(a) discuss the Annual Report for the financial year ended 30 June 2011;
-
(b) ask questions or make comment on the management of the Company;
(c) ask the auditor questions about the conduct of the audit and the preparation and content of the Auditor's Report.
In addition to taking questions at the Meeting, written questions to the Chairman about the management of the Company, or to the Company's auditor about:
-
(a) the preparation and the content of the Auditor's Report;
-
(b) the conduct of the audit;
-
(c) accounting policies adopted by the Company in relation to the preparation of the financial statements; and
-
(d) the independence of the auditor in relation to the conduct of the audit,
may be submitted no later than 5 business days before the Meeting to the Company Secretary at the Company's registered office.
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2. Resolution 1 – Adoption of Remuneration Report
Section 250R(2) of the Corporations Act provides that the Company is required to put the Remuneration Report to the vote of Shareholders. The Directors' Report contains a Remuneration Report which sets out the remuneration policy for the Company and reports the remuneration arrangements in place for the executive and non-executive directors.
Section 250R(3) of the Corporations Act provides that Resolution 1 is advisory only and does not bind the Directors of the Company. Of itself, a failure of Shareholders to pass Resolution 1 will not require the Directors to alter any of the arrangements in the Remuneration Report.
However, the Corporations Act has been amended by the Corporations Amendment (Improving Accountability on Director and Executive Remuneration) Act ( Director and Executive Remuneration Act ) which received the Royal Assent on 27 June 2011 and came into effect on 1 July 2011.
The Director and Executive Remuneration Act introduced new sections 250U and 250Y, among others, into the Corporations Act, giving Shareholders the opportunity to remove the Board if the Remuneration Report receives a 'no' vote of 25% or more at two consecutive annual general meetings ( Two Strikes Rule ).
Under the Two Strikes Rule, where a resolution on the Remuneration Report receives a 'no' vote of 25% or more at two consecutive annual general meetings, the Company will be required to put to Shareholders at the second annual general meeting, a resolution on whether another meeting should be held (within 90 days) at which all Directors (other than the managing director) who were in office at the date of approval of the applicable Directors' Report must stand for re-election.
In summary, if the Remuneration Report receives a 'no' vote of 25% or more at this Meeting, Shareholders should be aware that if there is a 'no' vote of 25% or more at the next annual general meeting the consequences are that all Directors (other than the managing director) will be up for re election.
The Chairman will allow a reasonable opportunity for Shareholders as a whole to ask about, or make comments on the Remuneration Report.
3. Resolution 2 – Authorise Sale of Radiology Business
3.1 Background
The Company seeks Shareholder approval under Listing Rule 11.2 for the disposal of its main undertaking, the Radiology Business.
The Radiology Business was acquired by the Company from companies associated with the Director, Mr Mark Scott, following approval by Company shareholders in July 2010.
Since being acquired by the Company, the trading performance of the Radiology Business has not met expectations and was a significant contributor to the loss recorded by the Company in the year to 30 June 2011.
Following a review of the performance of the Radiology Business, in January 2011 the Directors concluded that the Radiology Business was not sustainable in its current form. Having regard to the cashflow position of the Company and the difficulty in raising the amount of capital required to turn the Radiology Business around, the Directors resolved to progress the sale of the Radiology Business.
The Company entered into an agreement, pursuant to which, amongst other things, it was agreed that the Company would sell and Capitol Health would purchase, the Radiology Business.
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3.2 Sale Agreement and Management Agreement
The material terms of the agreement dated 13 July 2011 between the Company and Capitol Health ( Sale Agreement ) are as follows:
-
(a) Completion of the Sale Agreement is subject to the following conditions precedent:
-
(i) the parties obtaining ASX and any other regulatory approvals as may be required in order to effect the sale of the Radiology Business; and
-
(ii) there being no prescribed occurrences in respect to Capitol Health, which include, amongst other things, changes to the capital structure of Capitol Health, disposal of a substantial part of its business or property or any insolvency events occurring.
-
(b) If any of the conditions listed above are not satisfied (or waived by the parties) on or before 30 November 2011 (or such other date as the parties agree in writing) the Sale Agreement terminates.
-
(c) The consideration payable by Capitol Health for the Radiology Business is up to 45,559,021 ordinary fully paid shares in the capital of Capitol Health ( Capitol Health Shares ), together with a performance bonus payable in three instalments of $200,000 on each date that is 12 months, 18 months and 24 months periods after the date of completion of the sale. These additional payments are subject to the Radiology Business achieving agreed post sale operating revenue performance milestones. The number of Capitol Health Shares will be determined after certain completion adjustments. The key potential adjustment relates to the exercise of an option to renew the lease of one of its major premises, which is disputed by the landlord. These premises are used by the Radiology Business, Capitol Health is entitled to reduce the number of Capitol Health Shares to be issued to the Company by 20% if the premises are not able to be utilised by Capitol Health. The Company has received legal advice that the exercise of the option is effective.
-
(d) To allow for the delay in Shareholder approval of the Radiology Business Sale being sought, the agreements relating to the Radiology Business Sale and the management of the Radiology Business by Capitol Health have been extended to 30 November 2011, and now include a management fee of $100,000 payable by the Company to Capitol Health in consideration for the delays in Capitol Health being able to integrate the operations. The management fee of $100,000 is not payable unless completion of the Radiology Business Sale occurs.
-
(e) The Company has provided certain warranties with respect to the Radiology Business as are typical for a transaction of this nature.
-
(f) The Company undertakes that it will, within 3 months of completion of the sale of the Radiology Business and subject to approval by Shareholders and the satisfaction of any regulatory requirements, distribute to Shareholders by way of an in specie distribution, up to 45,559,021 shares in Capitol Health received as part consideration for the sale of the Radiology Business.
Pursuant to the management agreement in respect of the Radiology Business ( Management Agreement ), Capitol Health, through its subsidiary Capitol Radiology Pty Ltd ( Capitol Radiology ), has been appointed to manage the operations of the Company's Radiology Business from the commencement date of 28 March 2011 until the earlier of 30 November 2011 (this date was extended from 28 August 2011 by agreement between the parties) or the completion of the sale of the Radiology Business.
Capitol Radiology will have the right to occupy the business premises at which the Radiology Business is carried out and will have an ability to make use of the Company's assets and financed equipment during the term of the appointment.
During the term of the appointment, Capital Radiology will be entitled to all trading income and moneys receivable by the Radiology Business in connection with the operation of the Radiology
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Business in order for Capital Radiology to continue managing and conducting the Radiology Business. The Company is required to pay a management fee of $100,000 to Capitol Health following completion of the sale of the Radiology Business.
If the management agreement comes to an end by any reasons other than upon completion of the sale of the Radiology Business, Capital Radiology must, amongst other things, deliver to the Company the assets of the Radiology Business and give up full and unfettered control of the Radiology Business including the goodwill.
Any profits derived by Capital Radiology must be paid to the Company if the completion of the sale of the Radiology Business does not occur for reasons other than failure of the Company to obtain regulatory approval or shareholder approval.
The Company indemnifies Capitol Radiology in respect of the operation of the Radiology Business prior to the commencement of the management arrangements and Capitol Radiology indemnifies the Company in respect of conduct of the business during the management arrangements.
3.3 Listing Rule 11.2 - Substantial asset and main undertaking
Listing Rule 11.2 provides that a company may not dispose of its main undertaking (that is, its main asset or business) without the approval of its shareholders. The sale of the Radiology Business requires the approval by way of an ordinary resolution of the Shareholders.
Resolution 2 is an ordinary resolution.
3.4 Advantages and disadvantages of the Sale Agreement
The advantages and disadvantages to Shareholders of the sale of the Radiology Business pursuant to the Sale Agreement are as follows:
-
(a) Advantages
-
(i) Eliminate operating losses and working capital outflow that has occurred from the ownership of the Radiology Business and that has had a negative impact on the Company’s balance sheet, capital and solvency position.
-
(ii) Management of the Company will be able to focus on identifying and acquiring assets that will provide maximum Shareholder value.
-
(iii) The Directors are satisfied that they have achieved the best possible price attainable for the Radiology Business after interest in the Radiology Business was canvassed with a number of major industry participants.
-
(iv) Provide an opportunity for Shareholders to continue to participate in the radiology sector via the shares held in Capitol Health received as consideration for the sale of the Radiology Business.
-
(v) Potential future benefits from the payment by Capital Health of up to $600,000 in performance bonuses based on the future revenue performance of the Radiology Business.
-
(b) Disadvantages
-
(i) The Company will cease to retain any immediate upside exposure to any assets. However, the Company’s shareholders will maintain an indirect ability to gain from any future upside from the Radiology Business as it will receive shares in Capitol Health as consideration for the sale of the Radiology Business. This benefit will be distributed to Shareholders subject to the future in specie distribution referred to in Resolution 3.
7
-
(ii) Following the sale, the Company will not have any active business operations. The Company will have no source of operating revenue to offset operating expenses until another operating business is acquired or undertaken.
-
(iii) There is a risk that the Company may not be able to locate and acquire suitable new projects in a reasonable timeframe.
3.5 Entitlements Issue
The Company is currently undertaking an entitlement issue to raise a minimum amount of $2,800,000 ( Entitlement Issue ). If the minimum amount is not raised, no Shares will be issued pursuant to the Entitlement Issue and any application monies for Shares received by the Company will be refunded to applicants (without interest). Funds raised under the Entitlement Issue will be expended as follows:
-
(a) Repay Converting Loans;
-
(b) Repay trade and other creditors of the Company;
-
(c) Pay revenue and the management fee payable to Capitol Health;
-
(d) Pay costs of the Entitlement Issue; and
-
(e) Increase working capital.
3.6 Future of the Company after the Sale of the Radiology Business
Following completion of the sale of the Radiology Business, the Company will not have an operating business and intends to investigate acquisition and investment opportunities to restore Shareholder value, including opportunities across a range of sectors which may take the Company away from its medical services focus. In the first instance, the Directors will seek to employ a well-credentialed Chief Executive Officer (CEO) with resource sector expertise, to lead the search for investment opportunities and to lead the rebuilding of the Company.
If the Company acquires a business or assets or otherwise changes its activities in a way which requires the Company to comply with Chapters 1 and 2 of the Listing Rules, the Company will undertake a consolidation of its capital to comply with Listing Rule 2.1 condition 2. The ASX will generally tolerate the existence of a cash box for up to 6 months, with the intent that during that time the entity will look to find another business to acquire. If a suitable acquisition is not identified in 6 months, ASX would normally suspend trading in the entity's securities.
3.7 Future of the Company if the Sale of the Radiology Business is not approved
In the event Shareholders do not approve to sale of the Radiology Business, the Company expects that the management arrangements with Capitol Health (refer to Section 3.2 above for further details) will terminate.
Subject to successful completion of the Entitlement Issue, the Company’s focus will turn to recruitment of management with the skills and experience to lead the Radiology Business and to try to return it to profitability.
In the event the Entitlement Issue is not successful, the Company will retain ownership of the loss making Radiology Business, without having sufficient funds to finance the business or invest in the business. The Company will continue to be loss making, with significant negative cashflows. In these circumstances the Directors do not expect to have sufficient available funds to meet all obligations to the Company's creditors and there is therefore a possibility that the Company will be required to enter into voluntary administration. In this situation the Directors can give no assurance that there would be any recoverable value for Shareholders.
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3.8 Financial Performance of the Radiology Business
The Radiology Business was acquired by the Company from companies associated with a director, Dr Mark Scott, following approval by Company shareholders in July 2010 and completion of the acquisition in August 2010. The Radiology Business is held by the Company’s wholly owned subsidiary, eHealth Imaging Pty Ltd.
Since being acquired by the Company, the trading performance of the Radiology Business has not met expectations and was a significant contributor to the net loss of $4.07 million recorded by the Company in the year to 30 June 2011.
The table below shows the financial performance of the Company’s Radiology Business for the period from 1 January 2011 to 31 August 2011.
Radiology Business Divisional Income Statement
| . Revenue Radiology Interest income Total revenue Direct Costs Direct personnel costs Other direct costs Total direct costs Gross profit/(loss) Indirect Costs Corporate administration Office occupancy Depreciation & Amortisation Consultancy expenses Equipment costs Interest expense Total indirect costs Net profit/(loss) Net profit/(loss) per Month |
1 Jan 2011 to 31 March 20111 1 April 2011 to 30 September 20112 Total $ $ $ $1,514,758 $3,157,403 $4,672,161 $558 $0 $558 |
|---|---|
| $1,515,316 $3,157,403 $4,672,719 |
|
| $898,572 $2,269,978 $55,530 $271,362 $326,892 |
|
| $954,102 $2,541,340 |
|
| $561,214 $616,063 $1,177,277 $392,000 $633,867 $103,125 $214,782 $317,907 $108,150 $1,188 $109,338 $6,173 $79,786 $85,959 $304,151 $230,746 $534,897 $2,800 $0 $2,800 |
|
| $916,399 $1,160,369 $2,076,768 |
|
| ($355,185) ($544,306) ($899,491) ($118,395) ($90,718) ($112,436) |
Notes
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Managed by the Company during the period. Audited as part of the Company’s consolidated 30 June 2011 audit.
-
Managed by Capitol Health under a management agreement. The period from 1 April 2011 to 30 June 2011 has been audited as part of the Company’s consolidated 30 June 2011 audit. The period from 1 July 2011 to 30 September 2011 has not been audited.
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The Radiology Business was managed by the Company during the period 1 January 2011 to 31 March 2011. The Radiology Business has been managed by Capitol Health under the terms of the management agreement since 1 April 2011. The Radiology Business was loss making when the management agreement with Capitol Health was entered into and continues to be loss making.
The financial results set out above have been audited as part of the Company’s consolidated 30 June 2011 audit for the period 1 January 2011 to 30 June 2011. The financial results for the period from 1 July 2011 to 30 September 2011 are based on management accounts and have not been audited.
3.9
Other Material Information
There is no other information material to the making of a decision by a Shareholder whether or not to approve Resolution 2 (being information that is known to any of the Directors and which has not been previously disclosed to Shareholders) other than as disclosed in this Explanatory Memorandum.
3.10
Directors' Recommendation
After considering all relevant factors, the Directors (with the exception of Dr Mark Scott) unanimously recommend the Shareholders vote in favour of Resolution 1 for the following reasons:
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(a) after a full and proper assessment of all available information they believe that the proposed sale of the Radiology Business is in the best interests of the Shareholders and the Company;
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(b) in the opinion of the Directors, the advantages of the sale of the Radiology Business outweigh its disadvantages; and
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(c) the directors are satisfied they have achieved the best possible terms for the sale of the Radiology Business in the circumstances facing the Company.
Dr Mark Scott, a Director, has excluded himself from this recommendation as he has a relevant interest in Resolution 2.
4. Resolution 3 – Approval of Equal Capital Reduction
4.1 Background
As set out in section 3.2 the consideration payable to the Company for the sale of the Radiology Business includes the issue of the Capitol Health Shares, being up to 45,559,021 ordinary fully paid shares in the capital of Capitol Health. Under the terms of the Sale Agreement, the Company agreed, subject to receiving the necessary Shareholder approval, to undertake an in specie distribution of the Capitol Health Shares to Eligible Shareholders within 3 months of completion of the sale of the Radiology Business ( Capital Reduction ).
Although Shareholders may pass Resolution 3, the final decision to proceed with the Distribution will be made by the Directors, at their absolute discretion, and the Directors advise that the Capital Reduction will not proceed unless the Radiology Sale and Entitlement Issue are both completed.
4.2
Reasons for the Equal Capital Reduction
The primary reason the Directors have proposed the in-specie distribution of Capitol Health Shares following completion of the sale of the Radiology Business is to ensure that the benefit of the sale goes directly to Shareholders. By doing this, Shareholders are able to retain a direct interest in their investment in the radiology sector. The in specie distribution of Capitol Health shares also allows the Company to pursue its new investment focus.
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If Shareholders approve Resolution 3, and the Entitlement Issue is completed, the Distribution of Capitol Health Shares will be pro-rata, based on the number of Shares held by Eligible Shareholders on the Record Date, by way of an equal Capital Reduction under section 256B of the Corporations Act.
4.3 Timetable
The anticipated timetable for the Capital Reduction and in specie distribution is set out below:
| Despatch of Notice of Annual General Meeting to approve Capital Reduction |
24 October 2011 |
|---|---|
| Annual General Meeting to approve Capital Reduction | 23 November 2011 |
| Ex date for Capital Reduction – the date on which Shares commence trading without the entitlement to participate in the Distribution |
25 November 2011 |
| Record Date for Capital Reduction | 1 December 2011 |
| Despatch date | 8 December 2011 |
The timetable above (other than the date of the Annual General Meeting) is indicative only, and may be changed at the discretion of the Directors (subject to the Listing Rules) or as required by ASX.
4.4 Requirements under section 256B and section 256C of the Corporations Act
The in specie distribution of the Capitol Health Shares to Eligible Shareholders by way of Capital Reduction is an equal reduction of capital under the Corporations Act. Under section 256C of the Corporations Act, an equal reduction must be approved by an ordinary resolution passed at a general meeting of the Company.
Section 256B of the Corporations Act provides that the Company may only reduce its share capital if the reduction:
-
(a) is fair and reasonable to the Shareholders as a whole;
-
(b) does not materially prejudice the Company’s ability to pay its creditors; and
-
(c) is approved by Shareholders under section 256C of the Corporations Act.
For the reasons set out in this Explanatory Memorandum, the Directors are of the view that the proposed Capital Reduction is fair and reasonable to Shareholders and that the reduction of capital will not prejudice the Company’s ability to pay its creditors.
4.5
The effect of the Capital Reduction on Shareholders
The Capitol Health Shares will be distributed to Eligible Shareholders on a pro-rata basis, with fractional entitlements to be rounded down to the nearest whole share.
Eligible Shareholders will not be required to pay any additional consideration for the Capitol Health Shares as the Company would make an appropriate Capital Reduction to reflect the Distribution. The terms of the Capital Reduction are the same for each Eligible Shareholder (subject to sections 4.10 and 4.11 of this Explanatory Memorandum).
As at the date of this Notice of Meeting, the Company has 110,549,956 Shares on issue. No additional Shares will be issued as a result of the Distribution. Assuming the Company’s
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Entitlement Issue is fully subscribed and no Options are exercised, the Company will have 773,849,692 Shares on issue as at the Record Date.
The Directors propose to distribute up to 45,559,021 Capitol Health Shares, so assuming the maximum number of Capitol Health Shares and that there are 773,849,692 Shares on issue on the Record Date, the ratio for distribution of the Capitol Health Shares will be 1 Capitol Health Shares for every 16.99 Shares held by Eligible Shareholders on the Record Date. If the Entitlement Issue is not fully subscribed or any existing Options are exercised prior to the Record Date, this will impact on the ratio for the Distribution.
The number of Shares held by Shareholders will not change, and Shareholders will (subject to Shareholders’ take up under the Entitlement Issue) retain their current percentage shareholding interest in the Company, after the Capital Reduction. If Shareholders do not take up their entitlements under the Entitlement Issue, their percentage Shareholding in the Company will be diluted to the extent of the take up under the Entitlement Issue (which will in turn impact on the number of Capitol Health Shares that may be distributed to them under the Distribution).
The rights attaching to Shares will not be altered by the Capital Reduction.
A general summary of the taxation consequences of the Capital Reduction and Distribution for Shareholders is set out in section 4.12 of this Explanatory Memorandum.
Given the Capital Reduction is equal and the Company will still have positive net assets following the Capital Reduction (see section 4.6 of this Explanatory Memorandum) the Directors consider the Capital Reduction is fair and reasonable to Shareholders as a hole.
4.6 The Effect of Capital Reduction on the Company
If Resolution 3 is approved, the Capital Reduction will have the effect of reducing the Company’s net assets by $1.59 million (assuming the full 45,559,021 Capitol Health Shares are distributed and based on the closing price of Capitol Health Shares on ASX of 3.5 cents per Capitol Health Share).
To illustrate the effect of the return of capital on the financial position of the Company, the Pro Forma Statement of Financial Position (unaudited) set out below has been based on the Company’s reviewed financial statements at 30 June 2011 adjusted to reflect the minimum subscription under the Entitlement Issue and the Capital Reduction.
| Current Assets Cash and cash equivalents Assets classified as held for sale Investments Prepayments Trade and other receivables Total current assets Non Current Assets Plant and equipment Receivables Total non current assets Total assets Current liabilities Trade and other payables Other financial liabilities Provisions Liabilities classified as held for sale Total current liabilities |
30 June 2011 (Pro-forma Minimum Entitlement Issue) $ Capital Reduction $ 30 June 2011 (Pro-forma after Capital Reduction) $ 1,906,807 1,906,807 - - 1,594,600 (1,594,600) - 50,621 41,553 50,621 41,553 |
|---|---|
| 3,593,581 (1,594,600) 1,998,981 168,630 217,454 168,630 217,454 |
|
| 386,084 - 386,084 |
|
| 3,979,665 (1,594,600) 2,385,065 1,081,236 1,081,236 2,457 2,457 5,753 5,753 - - |
|
| 1,089,446 1,089,446 |
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Non current liabilities
Other financial liabilities
| er nanca aes Total non current liabilities Total liabilities Net assets Equity Issued capital Reserve Accumulated losses Total equity |
- - - - |
|---|---|
| 1,089,446 1,089,446 |
|
| 2,890,219 (1,594,600) 1,295,619 23,314,551 (1,594,600) 21,719,951 - - (20,424,332) (20,424,332) |
|
| 2,890,219 (1,594,600) 1,295,619 |
Basis of Preparation
The above pro forma statement of financial position has been prepared in accordance with the draft ASIC Guide to Disclosing Pro Forma Financial Information (issued July 2005).
The Pro-forma statements of financial position as at 30 June 2011 have been prepared to provide Shareholders with information on the assets and liabilities of the Company and proforma assets and liabilities of the Company. The historical and pro-forma financial information is presented in an abbreviated form, insofar as it does not include all of the disclosures required by Australian Accounting Standards applicable to annual financial statements.
The pro forma statement of financial position is based on the audited statement of financial position as at 30 June 2011 and has then been adjusted to reflect the following material transactions, assuming Shareholder approval is obtained for the Entitlement Issue and the sale of the Company’s Radiology Business to Capitol Health:
Pro-forma Adjustments – Minimum Entitlements
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Receipt of rights issue proceeds net of capital raising costs of $2,466,743 (Gross rights issue proceeds are $2,800,000 and capital raising costs associated with both convertible note and Entitlement Issue are $333,257). This is on the assumption minimum entitlements are taken up under the Entitlement Issue.
-
Repayment of the $750,000 converting loan including a redemption payment of $150,000 and accrued interest at 10% p.a. from 15 April 2011 to 8 November 2011 (estimated completion date of Entitlement Issue) of $42,534.
-
Accrued other related costs of $130,000. Included in this figure is a $100,000 management fee payable by the company to Capitol Health.
-
Completion of the sale of the Company’s radiology business to Capitol Health Limited, resulting in 45,559,021 shares in Capitol Health Limited held as an investment asset pending an in specie distribution to shareholders of the Company. Reclassification of assets held for sale $2,093,482 and liabilities held for sale $281,428 as investment of $1,594,600 (45,559,021 CAJ ordinary shares at 3.5 cents per share), and extinguishment of liabilities held for sale of $281,428. Receivables of $217,454 represent potential bonus payments in relation to the sale amounting to up to $600,000 adjusted by the probability of receiving the bonuses and by a discount factor representing the time value over the period until the payments may be due. The value of Investments and of Assets classified as held for sale is based on a share price for Capitol Health Limited of 3.5 cents per share. Any change in the Capitol Health share price will affect the value of these assets.
Pro-forma Adjustments – Capital Reduction
- The return of capital to Shareholders under the Capital Reduction which will have the effect of reducing the Company’s assets and issued capital by $1.59 million (assuming the full 45,559,021 Capitol Health Shares are distributed and based on the closing price of Capitol Health Shares on ASX of 3.5 cents per Capitol Health Share).
Subject to completion of the Entitlement Issue (which will occur prior to the Capital Reduction), the net assets of the Company will remain positive following the Capital Reduction and the
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Directors consider the Capital Reduction will not materially prejudice the Company’s ability to pay its creditors.
4.7 The effect of the Capital Reduction on Optionholders
Optionholders must exercise their Options and be registered on the Company’s share register on the Record Date in order to participate in the Distribution.
In accordance with Listing Rule 7.22.3, the number of Options on issue following the Distribution will remain the same, but the exercise price of each Option will be reduced by the same amount as the amount returned in relation to each Share.
The amount returned in relation to each Share will depend on the number of Shares on issue at the Record Date and the market price of Capitol Health Shares at the time of the Distribution. That amount and the reduction of the exercise price of each Option will be promptly advised to ASX following the Distribution.
For example, assuming there are 773,849,692 Shares on issue on the Record Date, the full 45,559,021 million Capitol Health Shares are distributed and the market price of Capitol Health Shares at the time of the Distribution is 3.5 cents, the amount of the reduction will be $1.59 million in total, or 0.21 cents per Share. This means the exercise price of each Option remaining on issue at the time of the Distribution will be reduced by approximately 0.21 cents.
4.8 Capitol Health
Through organic growth and acquisitions, Capitol Health has become Victoria's third largest diagnostic imaging provider. Capitol Health operates 33 radiology clinics and associated practices across Melbourne and regional Victoria and offers a full range of procedures ranging from basic Xrays through to specialising in Nuclear Imaging. Capitol Health reported a net profit of $962,000 for the year to 30 June 2011. Capitol Health is listed on the ASX (ASX: CAJ) with a market capitalisation of approximately $9 million as at 7 October 2011.
A summary of the major activities and financial information relating to the Capitol Health for the financial year ended 30 June 2011 is in the Annual Report which was lodged with ASX on 30 September 2011 and is available at www.asx.com.au.
Capitol Health has not given any disclosure notices to notify ASX of information relating to Capitol Health during the period from the date of lodgement of the Annual Report referred to in paragraph above and before the date of this Notice.
Capitol Health is a disclosing entity under the Corporations Act. It is subject to regular reporting and disclosure obligations under both the Corporations Act and the Listing Rules. These obligations require Capitol Health to notify ASX of information about specific events and matters as they arise for the purpose of ASX making the information available to the securities market conducted by ASX. In particular, Capitol Health has an obligation under the Listing Rules (subject to certain limited exceptions), to notify ASX once it is, or becomes aware of information concerning Capitol Health which a reasonable person would expect to have a material effect on the price or value of its securities.
4.9
Rights attaching to Capitol Health Shares
The following is a summary of the more significant rights and liabilities attaching to Capitol Health Shares to be distributed to Shareholders. This summary is not exhaustive and does not constitute a definitive statement of the rights and liabilities of Shareholders as shareholders of Capitol Health. To obtain such a statement, persons should seek independent legal advice.
Full details of the rights and liabilities attaching to Capitol Health Shares are set out in Capitol Health’s constitution, a copy of which is available for inspection at Capitol Health’s registered office during normal business hours.
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(a) General Meetings
Capitol Health shareholders are entitled to be present in person, or by proxy, attorney or representative to attend and vote at general meetings of Capitol Health.
Shareholders may requisition meetings in accordance with Section 249D of the Corporations Act and the constitution of Capitol Health.
(b) Voting Rights
Subject to any rights or restrictions for the time being attached to any class or classes of Capitol Health shares, at general meetings of shareholders or classes of shareholders:
-
(i) each shareholder entitled to vote may vote in person or by proxy, attorney or representative;
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(ii) on a show of hands, every person present who is a shareholder or a proxy, attorney or representative of a shareholder has one vote; and
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(iii) on a poll, every person present who is a shareholder or a proxy, attorney or representative of a shareholder shall, in respect of each share held by him, or in respect of which he is appointed a proxy, attorney or representative, have one vote for each share held, but in respect of partly paid shares shall have a fraction of a vote equivalent to the proportion which the amount paid up bears to the total issue price for the share.
(c) Dividend Rights
The directors of Capitol Health may from time to time declare and pay or credit a dividend in accordance with the Corporations Act. Subject to any special right as to dividends attaching to a share, all dividends will be declared and paid according to the proportion which the amount paid on the share is to the total amount payable in respect of the shares (but any amount paid during the period in respect of which a dividend is declared only entitles the shareholder to an apportioned amount of that dividend as from the date of payment). The directors of Capitol Health may from time to time pay or credit to the shareholders such interim dividends as they may determine. No dividends shall be payable except out of profits. A determination by the directors of Capitol Health as to the profits of Capitol Health shall be conclusive. No dividend shall carry interest as against Capitol Health.
The directors of Capitol Health may from time to time grant to shareholders or any class of shareholders the right to elect to reinvest cash dividends paid by Capitol Health by subscribing for shares in Capitol Health on such terms and conditions as the directors think fit. The directors of Capitol Health may, at their discretion, resolve in respect of any dividend which it is proposed to pay or to declare on any shares of Capitol Health, that holders of such shares may elect to forgo their right to the whole or part of the proposed dividend and to receive instead an issue of shares credited as fully paid to the extent and on the terms and conditions of the constitution. The directors of Capitol Health may set aside out of the profits of Capitol Health such amounts as they may determine as reserves, to be applied at the discretion of the directors, for any purpose for which the profits of Capitol Health may be properly applied.
(d) Winding-Up
If Capitol Health is wound up, the liquidator may, with the authority of a special resolution, divide among the shareholders in kind the whole or any part of the property of Capitol Health, and may for that purpose set such value as he considers fair upon any property to be so divided, and may determine how the division is to be carried out as between the shareholders or different classes of shareholders. The liquidator may, with the authority of a special resolution, vest the whole or any part of any such property in trustees upon such trusts for the benefit of the contributories as the
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liquidator thinks fit, but so that no shareholder is compelled to accept any shares or other securities in respect of which there is any liability.
(e) Transfer of Shares
Generally, shares in Capitol Health are freely transferable, subject to formal requirements, the registration of the transfer not resulting in a contravention of or failure to observe the provisions of a law of Australia and the transfer not being in breach of the Corporations Act and the Listing Rules.
(f) Future Increase in Capital
The allotment and issue of any new shares is under the control of the directors of Capitol Health. Subject to restrictions on the issue or grant of securities contained in the Listing Rules, the constitution of Capitol Health and the Corporations Act (and without affecting any special right previously conferred on the holder of an existing share or class of shares), the directors of Capitol Health may issue shares as they shall, in their absolute discretion, determine.
(g) Variation of Rights
Under Section 246B of the Corporations Act, Capitol Health may, with the sanction of a special resolution passed at a meeting of shareholders vary or abrogate the rights attaching to shares.
If at any time the share capital is divided into different classes of shares, the rights attached to any class (unless otherwise provided by the terms of issue of the shares of that class), whether or not Capitol Health is being wound up, may be varied or abrogated with the consent in writing of the holders of three quarters of the issued shares of that class, or if authorised by a special resolution passed at a separate meeting of the holders of the shares of that class.
4.10 Overseas Shareholders
Distribution of the Capitol Health Shares to Overseas Shareholders will be subject to legal and regulatory requirements in the relevant overseas jurisdiction. The Company has decided it is unreasonable to distribute Capitol Health Shares to Overseas Shareholders, due to the substantial costs of complying with the legal and regulatory requirements in the various overseas jurisdictions.
Accordingly, the Capitol Health Shares to which Overseas Shareholders would otherwise be entitled will be sold by the Company on their behalf as soon as practicable after the Distribution date, and the Company will then account to those Overseas Shareholders for the net proceeds of sale after deducting the costs and expenses of sale. The price of the Capitol Health Shares will vary from time to time and the net proceeds of sale may be more or less than the closing price for Capitol Health Shares on the day of distribution of the Capitol Health Shares to Shareholders.
4.11
Transferring Capitol Health Shares in marketable parcels
Transfers of Capitol Health Shares under the Distribution will only be undertaken in respect of parcels of Capitol Health Shares with a value of $250 or more.
For example, assuming a ratio of 1 Capitol Health Share for every 16.99 Shares held and a Capitol Health Share price of 3.5 cents, Shareholders who hold fewer than 121,358 Shares on the Record Date (rounded up to the nearest whole share) will not be eligible to receive a minimum of a Marketable Parcel of Capitol Health Shares.
Accordingly, the Capitol Health Shares to which those Eligible Shareholders who hold less than the required number of Shares to receive a Marketable Parcel of Capitol Health Shares would otherwise be entitled will be sold by the Company on behalf of the Eligible Shareholder, and the
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Company will then account to those Eligible Shareholders for the proceeds of sale (less costs and expenses of the sale) as the amount of Capital Reduction they are entitled to.
4.12 Tax consequences
The Company believes the distribution will constitute a disposal for capital gains tax (CGT) purposes of Capitol Health Shares by the Company at the time of the Distribution. The Capitol Health Shares will be deemed to have been disposed of by the Company for capital proceeds equal to their market value on the date of the Distribution. The Company will derive a capital gain where the market value of the Capitol Health Shares on the Distribution date exceeds the cost base of those Capitol Health Shares (being the price paid by the Company upon acquisition of the Capitol Health Shares). Conversely, the Company will incur a capital loss if the market value of the Capitol Health Shares on the Distribution date is less than their cost base. However, the Company has carried forward taxation losses in excess of the likely capital gain, and hence no taxation liability is expected to arise to the Company.
The Company believes the taxation implications to Shareholders will be a reduction in the cost base of their Shares in the Company equal to the value of the Capitol Health Shares distributed to them. Should the value of the Capitol Health Shares distributed exceed this cost base, then an assessable capital gain may result-based on the number of Capitol Health Shares being distributed and the value at which Shares have traded on ASX, the Company believes this is unlikely to be the case. Shareholders should consult their own professional advisors to confirm these implications as they may vary depending on individual circumstances and taxation positions.
The Company has not sought any class ruling from the ATO as to the tax implications of the return of capital to Shareholders. For specific taxation advice, Shareholders should consult their own taxation adviser so that their particular circumstances are taken into consideration.
4.13 Advantages and Disadvantages of the Capital Reduction
The principal advantages and disadvantages to Shareholders of the Capital Reduction and Distribution are as follows:
Advantages
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(a) Returns value to Eligible Shareholders from assets that are non-core assets.
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(b) Returns value to Eligible Shareholders without the need for Shareholders to dispose of Company securities.
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(c) Enables Eligible Shareholders to retain a direct and ongoing interest in a major radiology business through a direct shareholding in Capitol Health.
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(d) Enables the Company to return value to Shareholders without selling the Capitol Health Shares it holds on market, which may depress the value of the Capitol Health Shares generally (and hence impact on the value of the Capitol Health Shares it will receive as consideration under the Radiology Sale).
Disadvantages
- (a) The Directors believe that there are no disadvantages, particularly as all Eligible Shareholders will participate on a pro-rata basis.
4.14 Risk Factors
As Capitol Health is in the same industry as the Company, being radiology services, the risks to the Company’s Shareholder, being shareholders of Capitol Health, are the same as the risks of having an investment in the Company.
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(a) Key Personnel
The Capitol Health’s businesses are reliant on the continued performance and expertise of key personnel, including radiologists. There is a risk that Capitol Health may fail to attract, retain or develop key employees or consultants and this would have the effect on the development of Capitol Health. The loss of any of these individuals could have an adverse impact on the business of Capitol Health. Capitol Health has in place service contracts with select employees and consultants and provides appropriate contract conditions to assist in the retention of key personnel.
(b) Integration Risks of Acquisitions
The operating results of Capitol Health will depend on the success of management in integrating any proposed acquisitions. There is no guarantee that Capitol Health will be able to integrate the new acquisitions into its business successfully, or that any economic benefits will be able to be realised. There is a risk that Capitol Health’s future profitability and prospects could be adversely impacted if successful integration is not achieved in an orderly and timely fashion.
(c) Government Policy and Regulations
There are a number of Federal and State policies and regulations that, if changed, may have a material impact on the financial and operational performance of Capitol Health.
The risks relating to these policies and regulations to Capitol Health’s business include:
-
(i) changes to the nature and extent of the regulation or licensing systems could result in a change in industry structure, which could adversely impact the growth opportunities for and profitability of its business;
-
(ii) as the radiology business is heavily dependent on funding agreements between industry associations and the Australian Federal Government, if new funding agreements between the Federal Government and industry associations are not effected when the existing agreements expire, or adverse changes are made to the existing agreements, the profitability of these businesses could be adversely impacted;
-
(iii) changes to the Federal Government initiatives which promote private health insurance and encourage health fund membership, including health insurance rebate;
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(iv) changes to private hospital licensing policy which could have the effect of reducing the barriers to entry and exposing Capitol Health to increased competition and additional compliance costs; and
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(v) changes to the Medicare regime, including any reduction of Medicare rebates for radiology services.
In addition, Capitol Health may become subject to other regulations which could increase its regulatory and compliance obligations. Any new regulatory restrictions or changes in government attitudes or policies in relation to any or all of the existing regulatory areas may adversely impact on the financial performance and position, and future prospects of Capitol Health.
(d) Competition
Capitol Health operates in a competitive and dynamic market. Competitors as yet unknown to Capitol Health may emerge from time to time. The introduction of new competitors or a more aggressive competitive response from existing participants may affect the operating performance of Capitol Health. Future costs may rise and prices
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within the existing operating paradigm may fall, which may or may not restrict Capitol Health’s ability to compete profitably.
(e) General Risks
Factors such as inflation, interest rates, levels of tax, taxation law and accounting practices, government legislation or intervention, natural disasters, social upheaval and war may have an impact on prices, operating costs and market conditions generally. Accordingly, Capitol Health’s future possible revenue and operations can be affected by these factors, which are beyond the control of Capitol Health.
General movements in local and international stock markets, and economic conditions could all affect the market price of Capitol Health’s Shares.
- (f) Economic Factors
Factors such as inflation, currency fluctuation, interest rates, supply and demand and industrial disruption have an impact on operating costs, commodity prices and stock market prices. Capitol Health’s future possible revenue and share price can be affected by these factors, which are beyond the control of Capitol Health and its Directors.
- (g) Government Policy Changes
Government policies are subject to review and changes from time to time. Such changes are likely to be beyond the control of Capitol Health and may affect industry profitability.
- (h) Stock Market Conditions
Share market conditions may affect the listed shares regardless of the operating performance. Share market conditions are affected by many factors such as:
-
(i) general economic outlook;
-
(ii) movements in, or outlook on, interest rates and inflation rates;
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(iii) currency fluctuations;
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(iv) commodity prices;
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(v) changes in investor sentiment towards particular market sectors; and
-
(vi) the demand for, and supply of, capital.
4.15 Prospectus
Pursuant to ASIC’s Regulatory Guide 188 entitled Disclosure in Reconstructions, an invitation to Shareholders to vote on Resolution 3 for the in-specie distribution of the Capital Health Shares constitutes an offer for securities under Chapter 6D of the Corporations Act and a prospectus is required unless an exemption applies.
As no exemption is currently available to the Company, a prospectus will be lodged with ASIC. The prospectus is attached in Annexure 1 and will be sent to Shareholders at the same time that this Notice of General Meeting is sent to Shareholders. The prospectus will also allow Shareholders to sell their Capitol Health Shares within the first 12 months of receiving them.
4.16 Directors' Interests
The Directors do not hold shares in the Company, and accordingly will not participate in the return of capital to Shareholders.
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Dr Mark Scott, a director has an interest in 88,747,603 options in IMI. The exercise price of the options will be adjusted as set out in section 4.7 as a result of the reduction in capital.
4.17 Directors' Recommendation
After considering all relevant factors, the Directors unanimously recommend the Shareholders vote in favour of Resolution 3.
5. Resolution 4 – Re-election of Dr Mark Scott as an Executive Director
Clause 13.2 of the Constitution requires that at every annual general meeting, one third of the Directors must retire from office, provided always that no Director (except a Managing Director) shall hold office for a period in excess of 3 years.
A Director who retires by rotation under clause 13.2 of the Constitution is eligible for re-election.
Dr Scott retires by rotation and seeks re-election.
Dr Mark Scott was appointed as an Executive Director of the Company on 30 July 2010. Dr Scott is the founder of Melbourne Specialist Imaging. Dr Scott has over 25 years experience in radiology, specialising in head, neck and dental imaging. Dr Scott has held senior positions in public and private hospitals and has been an independent specialist provider of radiology services since the early 1990’s. As current Director of Radiology at the Royal Victorian Eye and Ear Hospital, he is involved in a wide range of ongoing research and training and conducts regular teaching sessions for registrars.
Capitol Health Limited has offered Dr Scott a position as a contract radiologist in the event that the Resolution 2 is passed and the sale of the Radiology Business is completed.
Dr Scott held no other listed company directorships within the last 3 years before the financial year ended 30 June 2011.
The Board unanimously supports the re-election of Dr Scott.
Resolution 4 is an ordinary resolution.
6. Definitions
In this Explanatory Memorandum and the Notice of Annual General Meeting and Proxy Form:
Annual Report means the Directors’ Report, the Financial Report and the Auditor’s Report thereon, in respect of the financial year ended 30 June 2011.
Article means an article of the Constitution.
ASIC means Australian Securities and Investments Commission.
ASX means ASX Limited (ABN 98 008 624 691) and, where the context permits, the Australian Securities Exchange operated by ASX Limited.
Auditor’s Report means the auditor’s report on the Financial Report.
Capital Reduction has the meaning in Section 4.1
Capitol Health means Capitol Health Limited ACN 117 391 812.
Closely Related Party has the meaning in section 9 of the Corporations Act.
Company means IM Medical Limited ACN 009 436 908.
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Constitution means the constitution of the Company.
Converting Loans means the loans of an aggregate amount $750,000 convertible into the Converting Securities.
Corporations Act means the Corporations Act 2001 (Cth).
Director(s) mean the directors of the Company.
Directors’ Report means the annual directors’ report prepared under chapter 2M of the Corporations Act for the Company and its controlled entities.
Entitlement Issue has the meaning in Section 3.5.
Eligible Shareholder means a person registered as the holder of Shares on the Record Date.
AEDT means Australian Eastern Daylight Time.
Financial Report means the 2011 annual financial report prepared under chapter 2M of the Corporations Act for the Company and its controlled entities.
Key Management Personnel means a person having authority and responsibility for planning, directing and controlling the activities of the Company, directly or indirectly, including any Director (whether executive or otherwise) of the Company.
Management Agreement has the meaning in Section 3.2.
Meeting has the meaning in the introductory paragraph of the Notice.
Listing Rules means the official listing rules of ASX.
Notice means the Notice of Annual General Meeting which this Explanatory Memorandum accompanies.
Option means an option to acquire a Share.
Overseas Shareholder means an Eligible Shareholder with a registered address outside of Australia on the Record Date.
Proxy Form means the proxy form attached to the Notice.
Radiology Business means the Company's radiology services business.
Record Date means the record date for the Capital Reduction in the timetable in Section Error! Reference source not found. .
Sale Agreement has the meaning in Section 3.2.
Security means a Share or Option.
Share means a fully paid ordinary share in the capital of the Company.
Shareholder means a holder of a Share.
In this Explanatory Memorandum and the Notice of words importing the singular include the plural and vice versa.
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Annexure 1
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PROXY FORM
THIS DOCUMENT IS IMPORTANT. IF YOU ARE IN DOUBT AS TO HOW TO DEAL WITH IT, PLEASE CONTACT YOUR STOCK BROKER OR LICENSED PROFESSIONAL ADVISOR.
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IM MEDICAL LTD
REGISTERED OFFICE:
ABN: 47 009 436 908
LEVEL 1 117 CHURCH STREET HAWTHORN VIC 3122
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SHARE REGISTRY: Security Transfer Registrars Pty Ltd All Correspondence to: PO BOX 535, APPLECROSS WA 6953 AUSTRALIA 770 Canning Highway, APPLECROSS WA 6153 AUSTRALIA T: +61 8 9315 2333 F: +61 8 9315 2233 E: [email protected] W: www.securitytransfer.com.au
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Code: IMI
Holder Number:
SECTION A: Appointment of Proxy
I/We, the above named, being registered holders of the Company and entitled to attend and vote hereby appoint:
OR
The meeting Chairperson The name of the person you are appointing (mark with an "X") (if this person is someone other than the Chairperson of the meeting).
or failing the person named, or if no person is named, the Chairperson of the Meeting, as my/our Proxy to act generally at the meeting on my/our behalf and to vote in accordance with the following directions (or if no directions have been given, as the Proxy sees fit, except for Resolution 1) at the Annual General Meeting of the Company to be held at 2.00 pm (AEDT) on Wednesday, November 23, 2011 at The Quest Beaumont Kew, 7 Studley Park Road, Kew and at any adjournment of that meeting.
Important for Resolution 1 - If the Chairman of the meeting is appointed as your proxy, or may be appointed as your proxy by default, and you have not directed him how to vote on Resolution 1 below, please mark the box below. If you do not mark this box and you have not directed your proxy how to vote on Resolution 1 in Section B below, the Chairman will not cast your votes on Resolution 1 and your votes will not be counted in computing the required majority if a poll is called on this Resolution.
If you appoint the Chairman of the Meeting as your proxy you can direct the Chairman how to vote on Resolution 1 by either marking the relevant boxes in Section B below (for example if you wish to vote against or abstain from voting) or by marking the box below in this Section A (in which case the Chairman will vote in favour of Resolution 1).
The Chairman of the Meeting intends to vote all available proxies in favour of Resolution 1.
The Chairman of the Meeting intends to vote undirected proxies in favour of Resolution 1:
-
I/We (except where I/we have indicated a different voting intention below):
-
(a) direct the Chairman of the Meeting to vote in accordance with the voting intentions of the Chairman on Resolution 1 to vote in favour of this Resolution; and
-
(b) authorise, in respect of Resolution 1, the Chairman of the Meeting to vote as described even though Resolution 1 is connected directly or indirectly with the remuneration of a member of the Key Management Personnel for the Company and even if the Chairman of the Meeting has an interest in the outcome of Resolution 1; and
-
(c) acknowledge that votes cast by the Chairman of the Meeting for Resolution 1 other than as proxy holder will be disregarded because of that interest.
SECTION B: Voting Directions to your Proxy
Please mark "X" in the box to indicate your voting directions to your Proxy.
Resolution
1. Adoption of Remuneration Report
-
Authorise Sale of Radiology Business
-
Approval of Equal Reduction of Capital
4. Re-election of Dr Mark Scott as a Director
For Against Abstain*
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If no directions are given my proxy may vote as the proxy thinks fit or may abstain.
- If you mark the Abstain box for a particular item, you are directing your Proxy not to vote on your behalf on a show of hands or on a poll and your votes will not be counted in computing the required majority on a poll.
SECTION C: Please Sign Below
This section must be signed in accordance with the instructions overleaf to enable your directions to be implemented.
Individual or Security Holder Security Holder 2 Security Holder 3 Sole Director and Sole Company Secretary Director Director / Company Secretary
Director / Company Secretary
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9366562120
Reference Number:
IMI
1
1
My/Our contact details in case of enquiries are: NAME
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TELEPHONE NUMBER ( )
NOTES
1. Name and Address
This is the name and address on the Share Register of IMI Medical Ltd. If this information is incorrect, please make corrections on this form. Shareholders sponsored by a broker should advise their broker of any changes. Please note that you cannot change ownership of your shares using this form.
2. Appointment of a Proxy
If you wish to appoint the Chairperson of the Meeting as your Proxy please mark "X" in the box in Section A. Please also refer to Section B of this proxy form and ensure you mark the box in that section if you wish to appoint the Chairperson as your Proxy.
If the person you wish to appoint as your Proxy is someone other than the Chairperson of the Meeting please write the name of that person in Section A. If you leave this section blank, or your named Proxy does not attend the meeting, the Chairperson of the Meeting will be your Proxy. A Proxy need not be a Shareholder of IMI Medical Ltd.
3. Directing your Proxy how to vote
To direct the Proxy how to vote place an "X" in the appropriate box against each item in Section B. Where more than one Proxy is to be appointed and the proxies are to vote differently, then two separate forms must be used to indicate voting intentions.
4. Appointment of a Second Proxy
You are entitled to appoint up to two (2) persons as proxies to attend the meeting and vote on a poll. If you wish to appoint a second Proxy, an additional Proxy form may be obtained by telephoning the Company's share registry +61 8 9315 2333 or you may photocopy this form.
To appoint a second Proxy you must:
-
(a) On each of the Proxy forms, state the percentage of your voting rights or number of securities applicable to that form. If the appointments do not specify the percentage or number of votes that each Proxy may exercise, each Proxy may exercise half of your votes; and
-
(b) Return both forms in the same envelope.
5. Signing Instructions
Individual: where the holding is in one name, the Shareholder must sign.
Joint Holding: where the holding is in more than one name, all of the Shareholders must sign.
Power of Attorney: to sign under Power of Attorney you must have already lodged this document with the Company's share registry. If you have not previously lodged this document for notation, please attach a certified photocopy of the Power of Attorney to this form when you return it.
Companies: where the Company has a Sole Director who is also the Sole Company Secretary, this form must be signed by that person. If the Company (pursuant to section 204A of the Corporations Act 2001) does not have a Company Secretary, a Sole Director may sign alone. Otherwise this form must be signed by a Director jointly with either another Director or Company Secretary. Please indicate the office held in the appropriate place.
If a representative of the corporation is to attend the meeting the appropriate "Certificate of Appointment of Corporate Representative" should be lodged with the Company before the meeting or at the registration desk on the day of the meeting. A form of the certificate may be obtained from the Company's share registry.
6. Lodgement of Proxy
Proxy forms (and any Power of Attorney under which it is signed) must be received by Security Transfer Registrars Pty Ltd no later than 2.00 pm (AEDT) on Monday, November 21, 2011, being 48 hours before the time for holding the meeting. Any Proxy form received after that time will not be valid for the scheduled meeting.
Security Transfer Registrars Pty Ltd PO BOX 535 Applecross, Western Australia 6953
Street Address: Alexandrea House, Suite 1 770 Canning Highway Applecross, Western Australia 6153
Telephone +61 8 9315 2333 Facsimile +61 8 9315 2233 Email [email protected]
PRIVACY STATEMENT
Personal information is collected on this form by Security Transfer Registrars Pty Ltd as the registrar for securities issuers for the purpose of maintaining registers of securityholders, facilitating distribution payments and other corporate actions and communications. Your personal details may be disclosed to related bodies corporate, to external service providers such as mail and print providers, or as otherwise required or permitted by law. If you would like details of your personal information held by Security Transfer Registrars Pty Ltd or you would like to correct information that is inaccurate please contact them on the address on this form.
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7521562121