SOUTHERN CROSS ELECTRICAL ENGINEERING LTD — Share Issue/Capital Change 2017

Nov 6, 2017

Rule 2.7, 3.10.3, 3.10.4, 3.10.5

Appendix 3B

New issue announcement, application for quotation of additional securities and agreement

Information or documents not available now must be given to ASX as soon as available. Information and documents given to ASX become ASX’s property and may be made public.

Introduced 01/07/96 Origin: Appendix 5 Amended 01/07/98, 01/09/99, 01/07/00, 30/09/01, 11/03/02, 01/01/03, 24/10/05, 01/08/12, 04/03/13

Name of entity

Southern Cross Electrical Engineering Limited

ABN

92 009 307 046

We (the entity) give ASX the following information.

Part 1 - All issues

You must complete the relevant sections (attach sheets if there is not enough space).

1 +Class of +securities issued or to be issued 2 Number of +securities issued or to be issued (if known) or maximum number which may be issued	Financial Year 2018 Performance Rights granted under the Southern Cross Electrical Engineering Limited Senior Management Long Term Incentive Plan.
	1,241,118

• See chapter 19 for defined terms.

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• 3 Principal terms of the[+] securities The key terms of the FY18 Performance Rights are: (e.g. if options, exercise price and  to be performance tested over a three year expiry date; if partly paid period from 1 July 2017 to 30 June 2020. No +securities, the amount Performance Rights will vest until 30 June 2020. outstanding and due dates for  performance testing criteria are 50% against payment; if +convertible Absolute Total Shareholder Return (“TSR”) securities, the conversion price performance, and 50% against Earnings per and dates for conversion) Share (“EPS”) performance, as detailed below.  expiry on the 4th anniversary of the Grant Date, unless an earlier lapsing date applies

TSR

The TSR formula is:

((Share Price at Test Date – Share Price at Start Date) + ($ Dividends Received))/Share Price at Start Date

The 2018 Performance Rights will be assessed against the following TSR targets:

• For threshold performance: 8% per annum compounded over the Performance Period; and

• For stretch performance: 12% per annum compounded over the Performance Period.

The vesting schedule is as follows, TSR performance over relevant Performance Period:

• Less than 8% per annum compounded -

• 0% of the Performance Rights vest;

• 8% per annum compounded - 50% of the Performance Rights vest;

• Between 8% and 12% per annum compounded – a pro rata number between 50% and 100% of the Performance Rights vest;

• At or above 12% per annum compounded – 100% of the Performance Rights vest.

EPS

The Company’s EPS performance will be measured in the 2020 financial year. For the purposes of performance testing the Performance Rights, EPS in the 2020 financial year will be the Basic EPS for the year, as prescribed by the accounting standards and set out in the Company's Financial Reports, adjusted to remove the following non-cash items from the calculation of profit or loss attributable to ordinary shareholders in the year, in order to reflect the companies underlying profitability:

(a) amortisation of acquired intangibles; (b) unwinding of interest on deferred acquisition consideration payments; (c) adjustments to the assessment of deferred consideration payable; and (d) acquisition costs. The 2018 Performance Rights will be assessed against the following TSR targets:

• For threshold performance: EPS of 5.7 cents per share in the year ended 30 June 2020; and

• For stretch performance: EPS of 6.1 cents per share in the year ended 30 June 2020.

The vesting schedule is as follows for the applicable EPS performance over the relevant Performance Period. If EPS in the year ended 30 June 2020 is:

• Less than 5.7 cents per share – 0% of the Performance Rights vest;

• 5.7 cents per share - 50% of the Performance Rights vest;

• Between 5.7 and 6.1 cents per share– a pro rata number between 50% and 100% of the Performance Rights vest;

• At or above 6.1 cents per share– 100% of the Performance Rights vest.

Once the performance measurement calculation has been finalised the company will allot and issue the equivalent number of shares at nil consideration on the basis of one ordinary share per vested Performance Right for all Performance Rights exercised.

• 4 Do the[+] securities rank equally in all respects from the[+] issue date with an existing[+] class of quoted +securities?

If the additional[+] securities do not rank equally, please state:

• the date from which they do

• the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment

No.

Prior to vesting, the Performance Rights do not carry a right to vote, receive dividends, or generally participate in corporate actions. When the Performance Rights have vested and are exercised, ordinary fully paid shares are issued which will rank equally with the Company's already quoted securities.

• the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment

• 5 Issue price or consideration

Nil.

• See chapter 19 for defined terms.

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6 Purpose of the issue (If issued as consideration for the acquisition of assets, clearly identify those assets) 6a Is the entity an +eligible entity that has obtained security holder approval under rule 7.1A? If Yes, complete sections 6b – 6h in relation to the +securities the subject of this Appendix 3B, and comply with section 6i 6b The date the security holder resolution under rule 7.1A was passed 6c Number of +securities issued without security holder approval under rule 7.1 6d Number of +securities issued with security holder approval under rule 7.1A 6e Number of +securities issued with security holder approval under rule 7.3, or another specific security holder approval (specify date of meeting) 6f Number of +securities issued under an exception in rule 7.2 6g If +securities issued under rule 7.1A, was issue price at least 75% of 15 day VWAP as calculated under rule 7.1A.3? Include the +issue date and both values. Include the source of the VWAP calculation.	The Performance Rights are being issued under the Southern Cross Electrical Engineering Limited Senior Management Long Term Incentive Plan (“Plan”). The Plan, which was approved by shareholders at the 2017 AGM, seeks to reward performance in support of the achievement of the strategy of the business. Included in the issue are 570,175 FY18 Performance Rights issued to the Managing Director, Graeme Dunn, in accordance with a resolution passed by shareholders at the Company’s AGM on 31 October 2017.
	Yes
	31 October 2017
	Nil
	Nil
	Nil
	1,241,118
	N/a

6h If +securities were issued under rule 7.1A for non-cash consideration, state date on which valuation of consideration was released to ASX Market Announcements 6i Calculate the entity’s remaining issue capacity under rule 7.1 and rule 7.1A – complete Annexure 1 and release to ASX Market Announcements 7 +Issue dates Note: The issue date may be prescribed by ASX (refer to the definition of issue date in rule 19.12). For example, the issue date for a pro rata entitlement issue must comply with the applicable timetable in Appendix 7A. Cross reference: item 33 of Appendix 3B. 8 Number and +class of all +securities quoted on ASX (including the +securities in section 2 if applicable) 9 Number and +class of all +securities not quoted on ASX (including the +securities in section 2 if applicable)	N/a	N/a
	Remaining 7.1 capacity – 28,070,864 Remaining 7.1A capacity – 18,713,909
	7 November 2017
	Number	+Class
	187,139,097	Fully paid ordinary shares
	Number	+Class
	2,678,311	Financial Year 2016 Performance Rights
	1,310,069	Financial Year 2017 Performance Rights
	1,241,118	Financial Year 2017 Performance Rights

• See chapter 19 for defined terms.

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10 Dividend policy (in the case of a N/a trust, distribution policy) on the increased capital (interests)

Part 2 - Pro rata issue

11 Is security holder approval required? 12 Is the issue renounceable or non- renounceable? 13 Ratio in which the +securities will be offered 14 +Class of +securities to which the offer relates 15 +Record date to determine entitlements 16 Will holdings on different registers (or subregisters) be aggregated for calculating entitlements? 17 Policy for deciding entitlements in relation to fractions 18 Names of countries in which the entity has security holders who will not be sent new offer documents Note: Security holders must be told how their entitlements are to be dealt with. Cross reference: rule 7.7. 19 Closing date for receipt of acceptances or renunciations 20 Names of any underwriters 21 Amount of any underwriting fee or commission 22 Names of any brokers to the issue	N/a
	N/a
	N/a
	N/a
	N/a
	N/a
	N/a
	N/a
	N/a
	N/a
	N/a
	N/a

23 Fee or commission payable to the broker to the issue 24 Amount of any handling fee payable to brokers who lodge acceptances or renunciations on behalf of security holders 25 If the issue is contingent on security holders’ approval, the date of the meeting 26 Date entitlement and acceptance form and offer documents will be sent to persons entitled 27 If the entity has issued options, and the terms entitle option holders to participate on exercise, the date on which notices will be sent to option holders 28 Date rights trading will begin (if applicable) 29 Date rights trading will end (if applicable) 30 How do security holders sell their entitlements in full through a broker? 31 How do security holders sell part of their entitlements through a broker and accept for the balance? 32 How do security holders dispose of their entitlements (except by sale through a broker)? 33 +Issue date	N/a
	N/a
	N/a
	N/a
	N/a
	N/a
	N/a
	N/a
	N/a
	N/a
	N/a

Part 3 - Quotation of securities

You need only complete this section if you are applying for quotation of securities

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• See chapter 19 for defined terms.

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• (a) +Securities described in Part 1

(b) All other[+] securities

Example: restricted securities at the end of the escrowed period, partly paid securities that become fully paid, employee incentive share securities when restriction ends, securities issued on expiry or conversion of convertible securities

Entities that have ticked box 34(a)

Additional securities forming a new class of securities

Tick to indicate you are providing the information or documents

35 If the[+] securities are[+] equity securities, the names of the 20 largest holders of the additional[+] securities, and the number and percentage of additional[+] securities held by those holders

36 If the[+] securities are[+] equity securities, a distribution schedule of the additional +securities setting out the number of holders in the categories

1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 and over

37 A copy of any trust deed for the additional[+] securities

Entities that have ticked box 34(b)

38 Number of[+] securities for which N/a +quotation is sought 39 +Class of +securities for which N/a quotation is sought

40 Do the[+] securities rank equally in N/a all respects from the[+] issue date with an existing[+] class of quoted +securities? If the additional[+] securities do not rank equally, please state:  the date from which they do  the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment  the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment

41 Reason for request for quotation now Example: In the case of restricted securities, end of restriction period

N/a

• (if issued upon conversion of another[+] security, clearly identify that other[+] security)

• Number +Class

• 42 Number and +class of all N/a +securities quoted on ASX ( including the[+] securities in clause 38)

Quotation agreement

• 1 +Quotation of our additional +securities is in ASX’s absolute discretion. ASX may quote the[+] securities on any conditions it decides.

• 2 We warrant the following to ASX.

• The issue of the[+] securities to be quoted complies with the law and is not for an illegal purpose.

• There is no reason why those +securities should not be granted +quotation.

• See chapter 19 for defined terms.

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• An offer of the[+] securities for sale within 12 months after their issue will not require disclosure under section 707(3) or section 1012C(6) of the Corporations Act.

Note: An entity may need to obtain appropriate warranties from subscribers for the securities in order to be able to give this warranty

• Section 724 or section 1016E of the Corporations Act does not apply to any applications received by us in relation to any[+] securities to be quoted and that no-one has any right to return any[+] securities to be quoted under sections 737, 738 or 1016F of the Corporations Act at the time that we request that the[+] securities be quoted.

• If we are a trust, we warrant that no person has the right to return the +securities to be quoted under section 1019B of the Corporations Act at the time that we request that the[+] securities be quoted.

• 3 We will indemnify ASX to the fullest extent permitted by law in respect of any claim, action or expense arising from or connected with any breach of the warranties in this agreement.

• 4 We give ASX the information and documents required by this form. If any information or document is not available now, we will give it to ASX before +quotation of the +securities begins. We acknowledge that ASX is relying on the information and documents. We warrant that they are (will be) true and complete.

Sign here:

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Date: 7 November 2017

(Company secretary)

Print name: COLIN HARPER

== == == == ==

Appendix 3B – Annexure 1

Calculation of placement capacity under rule 7.1 and rule 7.1A for eligible entities

Introduced 01/08/12 Amended 04/03/13

Part 1

Rule 7.1 – Issues exceeding 15% of capital

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Step 1: Calculate “A”, the base figure from which the placement
capacity is calculated
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Insert number of fully paid [+] ordinary 159,426,058
securities on issue 12 months before the
+ issue date or date of agreement to issue
Add the following:
• Number of fully paid [+] ordinary 232,879
securities issued in that 12 month
period under an exception in rule 7.2
• Number of fully paid [+] ordinary
securities issued in that 12 month
27,480,160
period with shareholder approval
• Number of partly paid [+] ordinary
securities that became fully paid in that
12 month period
Note:
• Include only ordinary securities here –
other classes of equity securities
cannot be added
• Include here (if applicable) the
securities the subject of the Appendix
3B to which this form is annexed
• It may be useful to set out issues of
securities on different dates as
separate line items
Subtract the number of fully paid Nil
+ ordinary securities cancelled during that
12 month period
“A” 187,139,097
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• See chapter 19 for defined terms.

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Step 2: Calculate 15% of “A”

“B” 0.15 [Note: this value cannot be changed] Multiply “A” by 0.15 28,070,864

Step 3: Calculate “C”, the amount of placement capacity under rule 7.1 that has already been used

Insert number of[+] equity securities issued Nil or agreed to be issued in that 12 month period not counting those issued:

• Under an exception in rule 7.2

• Under rule 7.1A

• With security holder approval under rule 7.1 or rule 7.4

Note:

• This applies to equity securities, unless specifically excluded – not just ordinary securities

• • Include here (if applicable) the securities the subject of the Appendix 3B to which this form is annexed

• • It may be useful to set out issues of securities on different dates as separate line items

• “C” Nil

Step 4: Subtract “C” from [“A” x “B”] to calculate remaining placement capacity under rule 7.1

“A” x 0.15 28,070,864 Note: number must be same as shown in Step 2 Subtract “C” Nil Note: number must be same as shown in Step 3 Total [“A” x 0.15] – “C” 28,070,864 [Note: this is the remaining placement capacity under rule 7.1]

Part 2

art 2	art 2
Rule 7.1A – Additional placement capacity for eligible entities
Step 1: Calculate “A”, the base figure from which the placement capacity is calculated
“A” Note: number must be same as shown in Step 1 of Part 1	187,139,097
Step 2: Calculate 10% of “A”
“D”	0.10 Note: this value cannot be changed
Multiply“A” by 0.10	18,713,909
Step 3: Calculate “E”, the amount of placement capacity under rule 7.1A that has already been used
Insertnumber of +equity securities issued or agreed to be issued in that 12 month period under rule 7.1A Notes: • This applies to equity securities – not just ordinary securities • Include here – if applicable – the securities the subject of the Appendix 3B to which this form is annexed • Do not include equity securities issued under rule 7.1 (they must be dealt with in Part 1), or for which specific security holder approval has been obtained • It may be useful to set out issues of securities on different dates as separate line items	Nil
“E”	Nil

• See chapter 19 for defined terms.

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Step 4: Subtract “E” from [“A” x “D”] to calculate remaining placement capacity under rule 7.1A

Step 4: Subtract “E” from [“A” x “D”] to calculate remaining placement capacity under rule 7.1A	Step 4: Subtract “E” from [“A” x “D”] to calculate remaining placement capacity under rule 7.1A
“A” x 0.10 Note: number must be same as shown in Step 2	18,713,909
Subtract“E” Note: number must be same as shown in Step 3	Nil
Total[“A” x 0.10] – “E”	18,713,909 Note: this is the remaining placement capacity under rule 7.1A