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VECTION TECHNOLOGIES LTD — AGM Information 2017
Oct 30, 2017
66017_rns_2017-10-30_5f30a993-ac9d-460f-a29c-6c18727628ce.pdf
AGM Information
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SERVTECH GLOBAL HOLDINGS LTD ACN 614 814 041
NOTICE OF ANNUAL GENERAL MEETING
The Annual General Meeting of the Company will be held at the Bellanhouse Board Room, Level 19, Alluvion, 58 Mounts Bay Road, Perth, Western Australia on Thursday, 30 November 2017 at 4.00pm (WST).
The 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 1300 202 101
Shareholders are urged to attend or vote by lodging the proxy form attached to the Notice
SERVTECH GLOBAL HOLDINGS LTD
A C N 6 1 4 8 1 4 0 4 1
NOTICE OF ANNUAL GENERAL MEETING
Notice is hereby given that the annual general meeting of Shareholders of ServTech Global Holdings Ltd ( Company ) will be held at the Bellanhouse Board Room, Level 19, Alluvion, 58 Mounts Bay Road, Perth, Western Australia on Thursday, 30 November 2017 at 4.00pm (WST) ( Meeting ).
The Explanatory Memorandum provides additional information on matters to be considered at the Meeting. The Explanatory Memorandum and the Proxy Form form part of the 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 the Company on Tuesday, 28 November 2017 at 4.00pm (WST).
Terms and abbreviations used in the Notice are defined in Schedule 1.
AGENDA
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Annual Report
To consider the Annual Report of the Company and its controlled entities for the financial year ended 30 June 2017, which includes the Financial Report, the Directors' Report and the Auditor's Report.
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Resolution 1 – Remuneration Report
To consider and, if thought fit, to pass with or without amendment, as an ordinary resolution the following:
"That the Remuneration Report be adopted by the Shareholders on the terms and conditions in the Explanatory Memorandum."
Voting Exclusion
In accordance with section 250R of the Corporations Act, a vote on this Resolution must not be cast by or on behalf of a member of the Key Management Personnel whose remuneration details are included in the Remuneration Report, or a Closely Related Party of such member.
A vote may be cast by such person if the vote is not cast on behalf of a person who is excluded from voting on this Resolution, and:
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- the person is appointed as proxy by writing that specifies the way the proxy is to vote on the Resolution; or
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the person is the Chair and the appointment of the Chair as proxy does not specify the way the proxy is to vote on this Resolution, but expressly authorises the Chair to exercise the proxy even if this Resolution is connected with the remuneration of a member of the Key Management Personnel.
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Resolution 2 – Election of Director - Mr Bryn Hardcastle
To consider and, if thought fit, to pass with or without amendment, as an ordinary resolution the following:
"That, in accordance with Article 10.3(j) of the Constitution, Listing Rule 14.4 and for all other purposes, Mr Brynmor Hardcastle, who retires and being eligible, offers himself for election, is elected as a Director on the terms and conditions in the Explanatory Memorandum."
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Resolution 3 – Election of Director - Mr Nicholas Cernotta
To consider and, if thought fit, to pass with or without amendment, as an ordinary resolution the following:
"That, in accordance with Article 10.3(j) of the Constitution, Listing Rule 14.4 and for all other purposes, Mr Nicholas Cernotta, who retires and being eligible, offers himself for election, is elected as a Director on the terms and conditions in the Explanatory Memorandum."
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Resolution 4 – Election of Director – Mr David Newman
To consider and, if thought fit, to pass with or without amendment, as an ordinary resolution the following:
"That, in accordance with Article 10.3(j) of the Constitution, Listing Rule 14.4 and for all other purposes, Mr David Newman, who retires and being eligible, offers himself for election, is elected as a Director on the terms and conditions in the Explanatory Memorandum."
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Resolution 5 - Approval of 10% Placement Facility
To consider and, if thought fit, to pass with or without amendment, as a special resolution the following:
"That, pursuant to and in accordance with Listing Rule 7.1A and for all other purposes, Shareholders approve the issue of Equity Securities of up to 10% of the issued capital of the Company, calculated in accordance with the formula prescribed in Listing Rule 7.1A.2 and on the terms and conditions in the Explanatory Memorandum."
Voting Exclusion
The Company will disregard any votes cast on this Resolution by a person (and any associates of such a person) who may participate in the 10% Placement Facility and a person who might obtain a benefit if this Resolution is passed, except a benefit solely in the capacity of a holder of Shares, and any associate of that person (or those persons).
The Company will not disregard a vote if:
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it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form; or
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it is cast by the Chair 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.
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Resolution 6 – Non-Executive Directors' Remuneration
To consider and, if thought fit, to pass with or without amendment, as an ordinary resolution the following:
"That, for the purposes of Article 10.5(a) of the Constitution, Listing Rule 10.17 and for all other purposes, Shareholders approve the maximum total aggregate fixed sum per annum to be paid to Non-Executive Directors be set at $300,000 in accordance with the terms and conditions set out in the Explanatory Statement."
Voting Exclusion
The Company will disregard any votes cast on this Resolution by a Director and any of their associates.
The Company will not disregard a vote if:
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it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form; or
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it is cast by the Chair 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.
Voting Prohibition
In accordance with section 250BD of the Corporations Act, a person appointed as a proxy must not vote, on the basis of that appointment, on this Resolution if:
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the proxy is either a member of the Key Management Personnel or a Closely Related Party of such a member; and
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the appointment does not specify the way the proxy is to vote on this Resolution.
However, the above prohibition does not apply if:
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- the proxy is the Chair; and
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- the appointment expressly authorises the Chair to exercise the proxy even though this Resolution is connected directly or indirectly with remuneration of a member of the Key Management Personnel.
Resolution 7 – Approval to issue Shares to Directors in lieu of consultancy and directors' fees
To consider and, if thought fit, to pass with or without amendment, each as a separate ordinary resolution the following:
"That, pursuant to and in accordance with Listing Rule 10.11, section 195(4) of the Corporations Act and for all other purposes, Shareholders approve the issue of Shares to the following Directors (or their respective nominees) in lieu of consultancy and directors' fees payable:
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(a) Mr Brett Quinn;
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(b) Mr Nicholas Cernotta;
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(c) Mr Bryn Hardcastle; and
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(d) Mr David Newman,
on the terms and conditions set out in the Explanatory Memorandum."
Voting Exclusion
The Company will disregard any votes cast on this Resolution by any Director (and their respective nominees), and any associates of those persons.
However, the Company will not disregard a vote if:
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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
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it is cast by the Chair 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.
Voting Prohibition
In accordance with section 250BD of the Corporations Act, a person appointed as a proxy must not vote, on the basis of that appointment, on this Resolution if:
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the proxy is either a member of the Key Management Personnel or a Closely Related Party of such a member; and
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the appointment does not specify the way the proxy is to vote on this Resolution.
However, the above prohibition does not apply if:
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the proxy is the Chair; and
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the appointment expressly authorises the Chair to exercise the proxy even though this Resolution is connected directly or indirectly with remuneration of a member of the Key Management Personnel.
Shareholders should note that waivers of Listing Rules 10.13.3 and 10.13.5 are required in order for the approvals under Resolution 7 to be effective. The Company will be applying to ASX for the waivers and will advise Shareholders when ASX finalises its decision. If, before the Meeting, ASX advises the Company that it will not grant the waivers, then Resolution 7 will be withdrawn.
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Resolution 8 – Approval of Auditor
To consider and, if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution:
''That, for the purpose of section 327B(1)(a) of the Corporations Act and for all other purposes, BDO Audit (WA) Pty Ltd, having been nominated by a Shareholder and having consented in writing to act in the capacity of auditor, be appointed as auditor of the Company with effect from the conclusion of this Meeting.''
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BY ORDER OF THE BOARD
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Brett Quinn Chief Executive Officer and Managing Director ServTech Global Holdings Ltd Dated: 27 October 2017
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SERVTECH GLOBAL HOLDINGS LTD
A C N 6 1 4 8 1 4 0 4 1
EXPLANATORY MEMORANDUM
1. Introduction
The Explanatory Memorandum has been prepared for the information of Shareholders in connection with the business to be conducted at the Meeting to be held at the Bellanhouse Board Room, Level 19, Alluvion, 58 Mounts Bay Road, Perth, Western Australia on Thursday, 30 November 2017 at 4.00pm (WST).
The Explanatory Memorandum forms part of the Notice which should be read in its entirety. The Explanatory Memorandum contains the terms and conditions on which the Resolutions will be voted.
The Explanatory Memorandum includes the following information to assist Shareholders in deciding how to vote on the Resolutions:
| Section 2 | Action to be taken by Shareholders |
|---|---|
| Section 3 | Annual Report |
| Section 4 | Resolution 1 – Remuneration Report |
| Section 5 | Resolutions 2 – 4 (inclusive) – Election of Directors – Messrs Hardcastle, Cernotta and Newman |
| Section 6 | Resolution 5 - Approval of 10% Placement Facility |
| Section 7 | Resolution 6 – Non-Executive Directors' Remuneration |
| Section 8 | Resolution 7 – Approval to issue Shares to Directors in lieu of consultancy and directors' fees |
| Section 9 | Resolution 8 – Approval of Auditor |
| Schedule 1 | Definitions |
A Proxy Form is located at the end of the Explanatory Memorandum.
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Action to be taken by Shareholders
Shareholders should read the Notice including the Explanatory Memorandum carefully before deciding how to vote on the Resolutions.
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Voting in person
To vote in person, attend the Meeting on the date and at the place set out above.
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Proxies
- (a) Voting by proxy
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 thereon. Lodgement of a Proxy Form will not preclude a Shareholder from attending and voting at the Meeting in person.
Please note that:
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(i) a member of the Company entitled to attend and vote at the Meeting is entitled to appoint a proxy;
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(ii) a proxy need not be a member of the Company; and
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(iii) a member of the Company entitled to cast two or more votes may appoint two proxies and may specify the proportion or number of votes each proxy is appointed to exercise, but where the proportion or number is not specified, each proxy may exercise half of the votes.
The enclosed Proxy Form provides further details on appointing proxies and lodging Proxy Forms.
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(b)
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Proxy vote if appointment specifies way to vote
Section 250BB(1) of the Corporations Act provides that an appointment of a proxy may specify the way the proxy is to vote on a particular resolution and, if it does:
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(i) the proxy need not vote on a show of hands, but if the proxy does so, the proxy must vote that way (i.e. as directed);
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(ii) if the proxy has 2 or more appointments that specify different ways to vote on the resolution – the proxy must not vote on a show of hands;
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(iii) if the proxy is the chair of the meeting at which the resolution is voted on – the proxy must vote on a poll, and must vote that way (i.e. as directed); and
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(iv) if the proxy is not the chair – the proxy need not vote on the poll, but if the proxy does so, the proxy must vote that way (i.e. as directed).
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(c) Transfer of non-chair proxy to chair in certain circumstances
Section 250BC of the Corporations Act provides that, if:
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(i) an appointment of a proxy specifies the way the proxy is to vote on a particular resolution at a meeting of the Company's members;
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(ii) the appointed proxy is not the chair of the meeting;
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(iii) at the meeting, a poll is duly demanded on the resolution; and
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(iv) either the proxy is not recorded as attending the meeting or the proxy does not vote on the resolution,
the chair of the meeting is taken, before voting on the resolution closes, to have been appointed as the proxy for the purposes of voting on the resolution at the meeting.
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Voting Prohibition by Proxy Holders (Remuneration of Key Management Personnel)
In accordance with sections 250BD and 250R of the Corporations Act, a vote on Resolutions 1, 6 and 7 must not be cast (in any capacity) by, or on behalf of:
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a member of the Key Management Personnel whose remuneration details are included in the Remuneration Report; or
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a Closely Related Party of such member.
However, a person described above may cast a vote on Resolutions 1, 6 and 7 if the vote is not cast on behalf of a person who is excluded from voting on Resolutions 1, 6 and 7:
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the person is appointed as proxy by writing that specifies the way the proxy is to vote on the Resolution; or
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the person is the Chair and the appointment of the Chair as proxy does not specify the way the proxy is to vote on the resolution, but expressly authorises the Chair to exercise the proxy even if the Resolution is connected with the remuneration of a member of the Key Management Personnel.
The Chair intends to exercise all available proxies in favour of Resolutions 1, 6 and 7.
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Annual Report
In accordance with section 317 of the Corporations Act, Shareholders will be offered the opportunity to discuss the Annual Report, including the Financial Report, the Directors' Report and the Auditor's Report for the financial year ended 30 June 2017.
There is no requirement for Shareholders to approve the Annual Report.
At the Meeting, Shareholders will be offered the opportunity to:
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discuss the Annual Report which is available online at www.servtechglobal.com.au;
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ask questions about, or comment on, the management of the Company; and
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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 Chair about the management of the Company, or to the Company's auditor about:
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the preparation and content of the Auditor's Report;
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the conduct of the audit;
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accounting policies adopted by the Company in relation to the preparation of the financial statements; and
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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Resolution 1 – Remuneration Report
In accordance with subsection 250R(2) of the Corporations Act, the Company must put the Remuneration Report to the vote of Shareholders. The Directors' Report contains the Remuneration Report which sets out the remuneration policy for the Company and the remuneration arrangements in place for the executive Directors, specified executives and non-executive Directors.
In accordance with subsection 250R(3) of the Corporations Act, Resolution 1 is advisory only and does not bind the Directors. If Resolution 1 is not passed, the Directors will not be required to alter any of the arrangements in the Remuneration Report.
If the Company's Remuneration Report receives a 'no' vote of 25% or more ( Strike ) at two consecutive annual general meetings, Shareholders will have the opportunity to remove the whole Board, except the managing director (if any).
Where a resolution on the Remuneration Report receives a Strike 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 any managing director) who were in office at the date of approval of the applicable Directors' Report must stand for re-election.
This Meeting is the first annual general meeting since the Company was incorporated on 14 September 2016. If the Remuneration Report receives a Strike at this Meeting, Shareholders should be aware that if a second Strike is received at the 2018 annual general meeting, this may result in the re-election of the Board.
The Chair will allow a reasonable opportunity for Shareholders as a whole to ask about, or make comments on, the Remuneration Report.
Resolution 1 is an ordinary resolution.
The Chair intends to exercise all available proxies in favour of Resolution 1.
If the Chair is appointed as your proxy and you have not specified the way the Chair is to vote on Resolution 1, by signing and returning the Proxy Form, you are considered to have provided the Chair with an express authorisation for the Chair to vote the proxy in accordance with the Chair's intention, even though the Resolution is connected directly or indirectly with the remuneration of a member of the Key Management Personnel of the Company.
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Resolutions 2 – 4 (inclusive) – Election of Directors – Messrs Hardcastle, Cernotta and Newman
General
Listing Rule 14.4 provides that a director appointed to fill a casual vacancy, or as an addition to the board, must not hold office (without re-election) past the next annual general meeting of the entity.
Similarly, Article 10.3(j) of the Constitution requires directors appointed to office by the Board to retire at the next annual general meeting and being eligible, they may be re-elected at that meeting. As this Meeting is the Company's first annual general meeting following each directors' appointment to office, each director is required to retire and be put themselves before Shareholders for election.
In accordance with Listing Rule 14.4 and Article 10.3(a) of the Constitution, Mr Brett Quinn, in his capacity as Managing Director, is exempt from these election requirements.
The Directors (other than the Managing Director) were appointed to the Board on the following dates:
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Mr Brynmor Hardcastle on 14 September 2016;
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Mr Nicholas Cernotta on 17 October 2016; and
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Mr David Newman on 10 November 2016.
Accordingly, Messrs Hardcastle, Cernotta and Newman will retire and, being eligible, will seek election.
The Board (excluding each Director to which the resolution directly relates) recommends that Shareholders vote in favour of Resolutions 2-4 (inclusive).
Resolutions 2-4 (inclusive) are ordinary resolutions.
The Chair intends to exercise all available proxies in favour of Resolutions 2-4 (inclusive).
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Mr Brynmor Hardcastle
Mr Hardcastle is an experienced corporate lawyer specialising in corporate, commercial and securities law. He is the principal of Bellanhouse which predominantly advises on equity capital markets, re-compliance transactions and takeovers across a variety of industries. Mr Hardcastle has extensive international legal experience and has advised on numerous cross border transactions working in the United Kingdom, Middle East and North America. Mr Harcastle is also a non-executive director of New Century Resources Limited (ASX: NCZ), Cre8tek Limited (ASX: CR8) and MHM Metals Ltd (ASX: MHM).
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Mr Nicholas Cernotta
Mr Cernotta, Director of Operations at Fortescue Metals Group, has more than 30 years' experience in the mining industry, spanning various commodities and operations. Mr Cernotta comes with a solid operational background and experience in both the public
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and private sectors. Prior to joining Fortescue Metals Group, Mr Cernotta held many senior executive roles such as Chief Operating Officer.
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Mr David Newman
Mr Newman has over 30 years' experience as an executive in financial services, with a successful track record in managing and guiding organisations through major and challenging transformations. He is currently Executive Director and Head of Business Development for Sentry Group, a national and respected nonaligned financial planning licensee with over 240 authorised representatives. Mr Newman holds a Diploma in Financial Planning and has undertaken Advanced and Executive Management Programs at the Melbourne Business School.
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Resolution 5 - Approval of 10% Placement Facility
General
Listing Rule 7.1A enables eligible entities to issue Equity Securities up to 10% of their issued share capital through placements over a 12 month period after the annual general meeting ( 10% Placement Facility ). The 10% Placement Facility is in addition to the Company's 15% placement capacity under Listing Rule 7.1.
An eligible entity for the purposes of Listing Rule 7.1A is an entity that is not included in the S&P/ASX 300 Index and has a market capitalisation of $300 million or less. Based on the ASX closing price on 23 October 2017, the Company is an eligible entity as it has a market capitalisation of approximately $6.4 million.
The Company is seeking Shareholder approval by way of a special resolution to have the ability to issue Equity Securities under the 10% Placement Facility. The number of Equity Securities to be issued under the 10% Placement Facility will be determined in accordance with the formula prescribed in Listing Rule 7.1A.2 (refer to Section 6.2(c) below).
The Board unanimously recommends that Shareholders vote in favour of Resolution 5.
Resolution 5 is a special resolution and therefore requires approval of 75% of the votes cast by Shareholders present and eligible to vote (in person, by proxy, by attorney or, in the case of a corporate Shareholder, by a corporate representative).
The Chair intends to exercise all available proxies in favour of Resolution 5.
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Listing Rule 7.1A
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Shareholder approval
The ability to issue Equity Securities under the 10% Placement Facility is subject to Shareholder approval by way of a special resolution at an annual general meeting.
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Equity Securities
Any Equity Securities issued under the 10% Placement Facility must be in the same class as an existing quoted class of Equity Securities of the company.
The Company, as at the date of the Notice, has on issue Shares.
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Formula for calculating 10% Placement Facility
Listing Rule 7.1A.2 provides that eligible entities which have obtained shareholder approval at an annual general meeting may issue or agree to issue during the 12 month period after the date of the annual general meeting, a number of Equity Securities calculated in accordance with the following formula:
(A x D) – E
A is the number of shares on issue 12 months before the date of issue or agreement:
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(A) plus the number of fully paid shares issued in the 12 months under an exception in Listing Rule 7.2;
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(B) plus the number of partly paid shares that became fully paid in the 12 months;
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(C) plus the number of fully paid shares issued in the 12 months with Shareholder approval under Listing Rule 7.1 and 7.4. This does not include an issue of fully paid shares under the entity's 15% placement capacity without Shareholder approval;
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(D) less the number of fully paid shares cancelled in the 12 months.
Note that A has the same meaning in Listing Rule 7.1 when calculating an entity's 15% placement capacity.
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D is 10%
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E is the number of Equity Securities issued or agreed to be issued under Listing Rule 7.1A.2 in the 12 months before the date of the issue or agreement to issue that are not issued with Shareholder approval under Listing Rule 7.1 or 7.4.
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Listing Rule 7.1 and Listing Rule 7.1A
The ability of an entity to issue Equity Securities under Listing Rule 7.1A is in addition to the entity's 15% placement capacity under Listing Rule 7.1.
The actual number of Equity Securities that the Company will have capacity to issue under Listing Rule 7.1A will be calculated at the date of issue of the Equity Securities in accordance with the formula prescribed in Listing Rule 7.1A.2 (refer to Section 6.2(c)).
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Minimum Issue Price
The issue price of Equity Securities issued under Listing Rule 7.1A must be not less than 75% of the VWAP of Equity Securities in the same class calculated over the 15 Trading Days on which trades in that class were recorded immediately before:
(ii) the date on which the price at which the Equity Securities are to be issued is agreed; or
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(iii) if the Equity Securities are not issued within 5 Trading Days of the date in paragraph (i) above, the date on which the Equity Securities are issued.
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- 10% Placement Period
Shareholder approval of the 10% Placement Facility under Listing Rule 7.1A is valid from the date of the annual general meeting at which the approval is obtained and expires on the earlier to occur of:
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(iv) the date that is 12 months after the date of the annual general meeting at which the approval is obtained; or
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(v) the date of Shareholder approval of a transaction under Listing Rules 11.1.2 (a significant change to the nature or scale of activities) or 11.2 (disposal of main undertaking),
( 10% Placement Period ).
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Listing Rule 7.1A
The effect of Resolution 5 will be to allow the Directors to issue the Equity Securities under Listing Rule 7.1A during the 10% Placement Period without using the Company's 15% placement capacity under Listing Rule 7.1.
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Specific information required by Listing Rule 7.3A
In accordance with Listing Rule 7.3A, information is provided as follows:
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The Equity Securities will be issued at an issue price of not less than 75% of the VWAP for the Company's Equity Securities over the 15 Trading Days on which trades in that class were recorded immediately before:
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(i) the date on which the price at which the Equity Securities are to be issued is agreed; or
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(ii) if the Equity Securities are not issued within 5 Trading Days of the date in paragraph (i) above, the date on which the Equity Securities are issued.
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If this Resolution is approved by Shareholders and the Company issues Equity Securities under the 10% Placement Facility, the existing Shareholders' voting power in the Company will be diluted as shown in the below table (in the case of Options, only if the Options are converted into Shares). There is a risk that:
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(i) the market price for the Company's Equity Securities may be significantly lower on the date of the issue of the Equity Securities than on the date of the Meeting; and
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(ii) the Equity Securities may be issued at a price that is at a discount to the market price for the Company's Equity Securities on the issue date or the Equity Securities are issued as part of consideration for the acquisition of a new asset,
which may have an effect on the amount of funds raised by the issue of the Equity Securities.
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- The below table shows the dilution of existing Shareholders on the basis of the current market price of Shares and the current number of ordinary securities for variable "A" calculated in accordance with the formula in Listing Rule 7.1A.2 as at the date of the Notice.
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The table also shows:
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(i) two examples where variable "A" has increased, by 50% and 100%. Variable "A" is based on the number of ordinary securities the Company has on issue. The number of ordinary securities on issue may increase as a result of issues of ordinary securities that do not require Shareholder approval (for example, a pro rata entitlements issue or scrip issued under a takeover offer) or future specific placements under Listing Rule 7.1 that are approved at a future Shareholders' meeting; and
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(ii) two examples of where the issue price of ordinary securities has decreased by 50% and increased by 100% as against the current market price.
| Variable 'A' in Listing Rule 7.1A.2 |
Variable 'A' in Listing Rule 7.1A.2 |
Dilution | ||
|---|---|---|---|---|
| $0.031 50% decrease in Issue Price |
$0.062 Issue Price |
$0.124 100% increase in Issue Price |
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| Current Variable A 103,273,131 Shares |
10% Voting Dilution |
10,327,313 Shares |
10,327,313 Shares |
10,327,313 Shares |
| Funds raised | $320,147 | $640,293 | $1,280,587 | |
| 50% increase in current Variable A 154,909,697 Shares |
10% Voting Dilution |
15,490,970 Shares |
15,490,970 Shares |
15,490,970 Shares |
| Funds raised | $480,220 | $960,440 | $1,920,880 | |
| 100% increase in current Variable A |
10% Voting Dilution |
20,654,626 Shares |
20,654,626 Shares |
20,654,626 Shares |
206,546,262 Shares |
Funds raised | $640,293 | $1,280,587 | $2,561,174 |
The table has been prepared on the following assumptions:
-
The Company issues the maximum number of Equity Securities available under the 10% Placement Facility.
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No Options (including any Options issued under the 10% Placement Facility) are exercised or converted into Shares before the date of the issue of the Equity Securities.
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The 10% voting dilution reflects the aggregate percentage dilution against the issued share capital at the time of issue. This is why the voting dilution is shown in each example as 10%.
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The table does not show an example of dilution that may be caused to a particular Shareholder by reason of placements under the 10% Placement Facility, based on that Shareholder's holding at the date of the Meeting.
-
The table shows only the effect of issues of Equity Securities under Listing Rule 7.1A, not under the 15% placement capacity under Listing Rule 7.1.
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The issue of Equity Securities under the 10% Placement Facility consists only of Shares. If the issue of Equity Securities includes Options, it is assumed that those Options are exercised into Shares for the purpose of calculating the voting dilution effect on existing Shareholders.
-
The issue price is $0.062, being the closing price of the Shares on ASX on 23 October 2017.
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Final date for issue
The Company will only issue the Equity Securities during the 10% Placement Period.
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Purpose of issues under 10% Placement Facility
The Company may seek to issue the Equity Securities for the following purposes:
-
(i) as cash consideration, in which case the Company intends to use funds raised for development of the Company's technology and for general working capital; or
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(ii) as non-cash consideration for the provision of services to the Company or the acquisition of new projects, assets and investments. In such circumstances the Company will provide a valuation of the non-cash consideration as required by Listing Rule 7.1A.3.
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Allocation Policy
The Company's allocation policy is dependent on the prevailing market conditions at the time of any proposed issue pursuant to the 10% Placement Facility. The identity of the allottees of Equity Securities will be determined on a case-by-case basis having regard to the factors including but not limited to the following:
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(i) the methods of raising funds that are available to the Company, including but not limited to, rights issue or other issue in which existing security holders can participate;
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(ii) the effect of the issue of the Equity Securities on the control of the Company;
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(iii) the financial situation and solvency of the Company; and
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(iv) advice from corporate, financial and broking advisers (if applicable).
The allottees under the 10% Placement Facility have not been determined as at the date of the Notice but may include service providers, existing Shareholders and/or new Shareholders who are not a related party or an associate of a related party of the Company.
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Further, if the Company is successful in acquiring new projects, assets or investments, it is possible that the allottees under the 10% Placement Facility will be the vendors of the new assets or investments.
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Issues in the past 12 months
The Company has not previously obtained Shareholder approval under Listing Rule 7.1A.
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Voting exclusion statement
A voting exclusion statement is included in the Notice.
At the date of the Notice, the Company has not approached any particular existing Shareholder or security holder or an identifiable class of existing security holder to participate in the issue of the Equity Securities. No existing Shareholder's votes will therefore be excluded under the voting exclusion in the Notice.
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Resolution 6 – Non-Executive Directors' Remuneration
Article 10.5(a) of the Constitution requires that the total aggregate fixed sum per annum to be paid to the Directors (excluding salaries of executive Directors) from time to time will not exceed the sum determined by the Shareholders in general meeting and the total aggregate fixed sum will be divided between the Directors as the Directors shall determine and, in default of agreement between them, then in equal shares.
Listing Rule 10.17 provides that an entity must not increase the total aggregate amount of directors' fees payable to all of its non-executive directors without the approval of holders of its ordinary securities.
The total aggregate fixed sum per annum to be paid to the non-executive Directors has not previously been set by Shareholders. Resolution 6 seeks Shareholder approval to set the total aggregate fixed sum per annum to be paid to the non-executive Directors at $300,000.
The total amount of Directors' fees payable includes superannuation contributions made by the Company for the benefit of non-executive Directors and any fees which a non-executive Director agrees to sacrifice on a pre-tax basis. It does not include reimbursement of genuine out-of-pocket expenses, genuine "special exertion" fees paid in accordance with the Constitution or securities issued to a Director under Listing Rule 10.11 or 10.14 with approval of Shareholders.
The total aggregate fixed sum per annum has been determined after reviewing similar companies listed on ASX and the Directors believe that this level of remuneration is in line with corporate remuneration of similar companies.
This proposed level of permitted fees does not mean that the Company must pay the entire amount approved as fees in each year, rather the proposed limit is requested to ensure that the Company:
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maintains its capacity to remunerate both existing and any new non-executive Directors joining the Board;
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remunerates its non-executive Directors appropriately for the expectations placed upon them both by the Company and the regulatory environment in which it operates; and
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has the ability to attract and retain non-executive Directors whose skills and qualifications are appropriate for a company of the size and nature of the Company.
In the past three years, the Company has not issued non-executive Directors, or their nominees, any Equity Securities with prior Shareholder approval under Listing Rules 10.11 or 10.14.
Given the interest of the non-executive Directors in this Resolution, the Board makes no recommendation to Shareholders regarding this Resolution.
Resolution 6 is an ordinary resolution.
The Chair intends to exercise all available proxies in favour of Resolution 6.
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Resolution 7 – Approval to issue Shares to Directors in lieu of consultancy and directors' fees
General
Each of the Directors, being Messrs Brett Quinn, Nicholas Cernotta, Bryn Hardcastle and David Newman, has agreed that they (or one of their nominees) (together, Related Parties ) will accept the issue of Shares in lieu of their respective consultancy or directors' fees ( Related Party Shares ), subject to Shareholder approval.
The rationale for the issue of the Related Party Shares is to preserve cash within the Company, strengthen the Company's balance sheet, align Directors' remuneration with Company and Shareholders' objective and to provide the Directors with an incentive to enhance Shareholder value.
The maximum value of the Related Party Shares to be issued to the Related Parties in lieu of consultancy and directors' fees for the 12 month period from 1 November 2017 to 30 October 2018, is as follows:
| Related Party | Maximum value of fees ($) |
|---|---|
| Brett Quinn | $300,000 |
| Nicholas Cernotta | $60,000 |
| Bryn Hardcastle | $36,000 |
| David Newman | $36,000 |
| TOTAL | $432,000 |
The deemed issue price for any Related Party Share will be the 30-Day VWAP up to but excluding the date each month that the consultancy and directors' fees are due to be paid. As the number of Related Party Shares is based on the 30-Day VWAP, the number of Related Party Shares which may be issued is uncertain. Accordingly, the parties have agreed to cap the maximum aggregate number of Related Party Shares which may be
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issued at 10,327,313 Shares ( Cap ), being 10% of the total Shares on issue at the date of this Notice.
Consequently, the following table is provided for illustrative purposes only.
| Maximum number of Related Party Shares |
Dilution to **Shareholders1 ** |
|
|---|---|---|
| Based on highest closing Share price over last 12 months ($0.215) |
2,009,302 | 1.95% |
| Based on lowest closing Share price over the last 12 months ($0.060) |
7,200,000 | 6.97% |
| Based on closing Share price on 23 October 2017 ($0.062) |
6,967,742 | 6.75% |
| Based on the Cap | 10,327,313 | 10.00% |
Notes:
- Dilution to Shareholders is based on the Company's Shares on issue as at the date of this Notice.
Resolution 7 seeks Shareholder approval in accordance with Listing Rule 10.11 for the issue of the Related Party Shares to the Related Parties (or their respective nominees). Each of the resolutions which form part of Resolution 7 is a separate ordinary resolution.
As each Director has an interest in a resolution which forms part of Resolution 7, the Board makes no recommendation to Shareholders regarding this Resolution.
The Chair intends to exercise all available proxies in favour of each of the resolutions
which form part of Resolution 7.
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Chapter 2E of the Corporations Act
In accordance with Chapter 2E of the Corporations Act, in order to give a financial benefit to a related party, the Company must:
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obtain the approval of the public company's members in the manner set out in sections 217 to 227 of the Corporations Act; and
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give the benefit within 15 months following such approval,
unless the giving of the financial benefit falls within an exception set out in sections 210 to 216 of the Corporations Act.
The issue of Related Party Shares to the Related Parties (or their respective nominees) constitutes the giving of a financial benefit and the Related Parties are related parties of the Company by virtue of being Directors.
The Directors consider that the issue of Shares in lieu of consultancy and directors' fees is both on arm's length terms and reasonable remuneration in the circumstances given the issue is in essence a conversion of the Directors' existing cash entitlements to Shares on the basis of the market price of Shares, and does not involve any additional remuneration to the Directors. The Directors therefore consider that Shareholder approval is not required under Chapter 2E of the Corporations Act.
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It is noted that as Messrs Quinn, Cernotta, Hardcastle and Newman may have a material personal interest in the outcomes of the resolutions which form part of Resolution 7, the Directors may not be able to form a quorum at a Directors' meeting to consider these Resolutions. Accordingly, the Directors are seeking Shareholder approval pursuant to section 195(4) of the Corporations Act.
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Listing Rule 10.11
Listing Rule 10.11 provides that a company must not (subject to specified exceptions) issue or agree to issue Equity Securities to a related party without the approval of shareholders. Shareholder approval is required under Listing Rule 10.11 to issue the Related Party Shares to the Related Parties as they are related parties of the Company by virtue of being Directors.
If approval is given under Listing Rule 10.11, Shareholder approval is not required under Listing Rule 7.1. Accordingly, the issue of these Shares will not be included in the use of the Company's 15% annual placement capacity pursuant to Listing Rule 7.1.
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Specific information required by Listing Rule 10.13
For the purposes of Listing Rule 10.13, the following information is provided in relation to the issue of the Related Party Shares:
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the Related Parties are related parties of the Company by virtue of being Directors;
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as the number of Related Party Shares which may be issued is based on the 30-Day VWAP, the maximum number of Related Party Shares which may be issued is unknown, but is subject to the Cap of 10,327,313 Shares. The maximum value of the Related Party Shares to be issued to the Related Parties (or its nominee), is $432,000.
The formula used to calculate the number of Related Party Shares to be issued in lieu of the consultancy and directors' fees will be calculated each month using the following formula:
A = B/C
Where:
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A = the number of Related Party Shares to be issued to the relevant Related Party (or its nominees) that month;
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B = the portion of the monthly consultancy or directors' fee that the Related Party elects to be paid in Shares; and
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C = the relevant 30-Day VWAP;
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the Company will be applying to ASX for a waiver in respect of Listing Rule 10.13.3 to allow the Related Party Shares to be issued no later than 12 months after the date of the Meeting. The Company will advise Shareholders when ASX finalises its decision. If before the Meeting, ASX advises the Company that it will not grant the waiver, each of the resolutions which form part of Resolution 7 will be withdrawn and the Company will pay the relevant consultancy and directors' fees in cash;
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the Company will also be applying to ASX for a waiver in respect of Listing Rule 10.13.5 to allow the deemed issue price per Related Party Share to be
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equal to the 30-Day VWAP for the relevant month. The Company will advise Shareholders when ASX finalises its decision. If before the Meeting, ASX advises the Company that it will not grant the waiver, each of the resolutions which form part of Resolution 7 will be withdrawn and the Company will pay the relevant consultancy and directors' fees in cash;
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- the Related Party Shares will be fully paid ordinary shares in the capital of the Company ranking equally in all respects with the Company's existing Shares on issue;
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- the Related Party Shares will be issued for nil cash consideration in lieu of consultancy or directors' fees as set out in Section 8.1, and accordingly no funds will be raised from the issue of the Related Party Shares; and
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- a voting exclusion statement is included in the Notice.
Resolution 8 – Approval of Auditor
Pursuant to section 327A of the Corporations Act, the Directors of a public company must appoint an auditor within one month of registration. The Directors have appointed BDO Audit (WA) Pty Ltd ( BDO ) as the Company's auditor.
In accordance with section 327B of the Corporations Act, an auditor of a public company who was appointed within one month of the Company's registration holds office until the first annual general meeting of the Company. The auditor must then be re-appointed at the first annual general meeting so that they may continue to act as auditor of the Company.
In accordance with section 328B of the Corporations Act, the Company has received written notice of nomination from a Shareholder for BDO to be appointed as the Company's auditor. A copy of the notice of nomination is attached to this Explanatory Memorandum as Annexure A.
BDO has given its written consent to act as the Company's auditor (subject to Shareholder approval).
If Resolution 8 is passed, the appointment of BDO as the Company's auditor will take effect at the conclusion of this Meeting.
The Board recommends that Shareholders vote in favour of this Resolution.
Resolution 8 is an ordinary resolution.
The Chair intends to exercise all available proxies in favour of Resolution 8.
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– Definitions
In the Notice, words importing the singular include the plural and vice versa.
$ means Australian Dollars.
10% Placement Facility has the meaning given in Section 6.1.
10% Placement Period has the meaning given in Section 6.2(f).
30-Day VWAP means the VWAP for Shares calculated over the 30 Trading Days before the relevant date.
Annual Report means the Directors' Report, the Financial Report, and Auditor's Report, in respect to the year ended 30 June 2017.
ASX means the 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 in the Financial Report.
BDO means BDO Audit (WA) Pty Ltd ACN 112 284 787.
Board means the board of Directors of the Company.
Chair means the person appointed to chair the Meeting of the Company convened by the Notice.
Closely Related Party means:
(a) a spouse or child of the member; or
(a) has the meaning given in section 9 of the Corporations Act.
Company means ServTech Global Holdings Ltd ACN 614 814 041.
Constitution means the constitution of the Company as at the date of the Meeting.
Corporations Act means the Corporations Act 2001 (Cth).
Director means a director 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.
Equity Security has the same meaning as in the Listing Rules and Equity Securities has the
corresponding meaning.
Explanatory Memorandum means the explanatory memorandum which forms part of the Notice.
Financial Report means the annual financial report prepared under Chapter 2M of the Corporations Act for the Company and its controlled entities.
Key Management Personnel has the same meaning as in the accounting standards issued by the Australian Accounting Standards Board and means those persons having authority and responsibility for planning, directing and controlling the activities of the Company, or if the Company is part of a consolidated entity, of the consolidated entity, directly or indirectly,
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including any Director (whether executive or otherwise) of the Company, or if the Company is part of a consolidated entity, of an entity within the consolidated group.
Listing Rules means the listing rules of ASX.
Meeting has the meaning given in the introductory paragraph of the Notice.
Notice means this notice of general meeting.
Proxy Form means the proxy form attached to the Notice.
Related Parties means each of the Directors, being Messrs Brett Quinn, Nicholas Cernotta, Bryn Hardcastle and David Newman.
Related Party Shares has the meaning given in Section 8.1.
Remuneration Report means the remuneration report of the Company contained in the Directors' Report.
Resolution means a resolution referred to in the Notice.
Schedule means a schedule to the Notice.
Section means a section of the Explanatory Memorandum.
Share means a fully paid ordinary share in the capital of the Company.
Shareholder means a holder of a Share.
Strike means a 'no' vote of 25% or more on the resolution approving the Remuneration Report.
Trading Day means a day on which ASX is open for trading securities.
VWAP means volume weighted average price.
WST means Western Standard Time, being the time in Perth, Western Australia.
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Annexure A – Nomination of Auditor
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AGM Registration Card
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026 243 SVT 1320023010102201202221000000000000000000001012220001333112221233013
X0036296020
Vote by Proxy: SVT
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✓ ✓ ✓ Complete the form overleaf in accordance with the instructions set out below.
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----- Start of picture text -----
https://automic.com.au/
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