Announcement PDF 26 October 2016 ASX Market Announcements ASX Limited 20 Bridge Street Sydney NSW 2000 NOTICE OF ANNUAL GENERAL MEETING AND ANNUAL REPORT Please find attached the company’s Notice of Annual General Meeting to be held on Monday, 28 November 2016 at 11.00am. The company advises that the Annual Report comprises only the documents previously lodged with ASX. Yours faithfully John Geary Company Secretary ABN 59 142 014 873 Notice of Annual General Meeting Explanatory Statement and Proxy Form Date of Meeting Monday 28 November 2016 Time of Meeting 11.00am (WST) Place of Meeting The Celtic Club 48 Ord Street West Perth WA 6005 NOTICE OF ANNUAL GENERAL MEETING Notice is hereby given that the Annual General Meeting of members of Ventnor Resources Limited (Ventnor or the Company) will be held on Monday 28 November 2016, commencing at 11.00am (WST) at The Celtic Club, 48 Ord Street, West Perth, Western Australia. The enclosed Explanatory Statement accompanies and forms part of this Notice of Annual General Meeting. AGENDA ORDINARY BUSINESS Accounts and Reports To receive and consider the annual financial report for the financial year ended 30 June 2016, together with the reports by directors and auditors thereon. To consider and, if thought fit, pass the following resolutions as ordinary resolutions: 1. Resolution 1: Adoption of Remuneration Report That for the purpose of section 250R(2) of the Corporations Act and for all other purposes, the Remuneration Report set out in the Company’s Annual Report for the financial year ended 30 June 2016 be adopted. Note: The vote on this resolution is advisory only and does not bind the directors of the Company. Voting Exclusion Statement: Pursuant to section 250R(4) of the Corporations Act, the Company is required to disregard any votes cast on Resolution 1 (in any capacity) by or on behalf of any of the following persons: (a) member of the Key Management Personnel, details of whose remuneration are included in the Remuneration Report; or (b) a Closely Related Party of such a member (together “prohibited persons”). However, the Company will not disregard a vote if: (c) the prohibited person does so as a proxy appointed by writing that specifies how the proxy is to vote on the proposed resolution; and (d) the vote is not cast on behalf of a prohibited person. 2. Resolution 2: Re-election of Director (Mr P Pawlowitsch) That Mr Peter Pawlowitsch, being a Director of the Company who retires by rotation in accordance with Clause 11.3 of the Company’s Constitution and, being eligible, offers himself for re-election, be re-elected as a director of the Company. Ventnor Resources Limited Page 1 SPECIAL BUSINESS 3. Resolution 3: Approval of 10% Placement Capacity To consider and, if thought fit, to pass, with or without amendment, the following resolution as a special resolution: “That, for the purpose of Listing Rule 7.1A and for all other purposes, approval is given for the issue of Equity Securities totalling up to 10% of the Shares on issue, calculated in accordance with the formula prescribed in Listing Rule 7.1A.2 and on the terms and conditions set out in the Explanatory Statement accompanying this Notice of annual general meeting.” Voting Exclusion: The Company will disregard any votes cast on this Resolution by any person who may participate in the issue of Equity Securities under this Resolution and a person who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities, if the Resolution is passed and any associates of those persons. However, the Company will not disregard a vote if 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, 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 4: Proposed Grant of Options to Mr Paul Boyatzis To consider and, if thought fit, to pass the following resolution as an ordinary resolution: “That, for the purposes of ASX Listing Rule 10.11 and Chapter 2E of the Corporations Act and for all other purposes, the Directors be and are hereby authorised to issue 1,000,000 Incentive Options to Mr Paul Boyatzis or his nominee, on the terms and conditions set out in the Explanatory Statement forming part of this Notice of annual general meeting.” Voting Exclusion Statement For the purposes of Listing Rule 10.13.6, the Company will disregard any votes cast on this resolution by Mr Paul Boyatzis and any associate of Mr Paul Boyatzis. However, the Company need not disregard a vote if it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides. 5. Resolution 5: Proposed Grant of Options to Mr Bruce Maluish To consider and, if thought fit, to pass the following resolution as an ordinary resolution: “That, for the purposes of ASX Listing Rule 10.11 and Chapter 2E of the Corporations Act and for all other purposes, the Directors be and are hereby authorised to issue 2,000,000 Incentive Options to Mr Bruce Maluish or his nominee, on the terms and conditions set out in the Explanatory Statement forming part of this Notice of annual general meeting.” Voting Exclusion Statement For the purposes of Listing Rule 10.13.6, the Company will disregard any votes cast on this resolution by Mr Bruce Maluish and any associate of Mr Bruce Maluish. However, the Company need not disregard a vote if it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides. Ventnor Resources Limited Page 2 6. Resolution 6: Proposed Grant of Options to Mr Peter Pawlowitsch To consider and, if thought fit, to pass the following resolution as an ordinary resolution: “That, for the purposes of ASX Listing Rule 10.11 and Chapter 2E of the Corporations Act and for all other purposes, the Directors be and are hereby authorised to issue 1,000,000 Incentive Options to Peter Pawlowitsch or his nominee, on the terms and conditions set out in the Explanatory Statement forming part of this Notice of annual general meeting.” Voting Exclusion Statement For the purposes of Listing Rule 10.13.6, the Company will disregard any votes cast on this resolution by Mr Peter Pawlowitsch and any associate of Mr Peter Pawlowitsch. However, the Company need not disregard a vote if it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides. 7. Resolution 7: Proposed Grant of Options to Mr John Geary To consider and, if thought fit, to pass the following resolution as an ordinary resolution: “That, for the purposes of ASX Listing Rule 7.1 and for all other purposes, the Directors be and are hereby authorised to issue 1,000,000 Incentive Options to Mr John Geary or his nominee, on the terms and conditions set out in the Explanatory Statement forming part of this Notice of annual general meeting.” Voting Exclusion Statement For the purposes of Listing Rule 7.3.8, the Company will disregard any votes cast on this resolution by Mr John Geary and any associate of Mr John Geary. However, the Company need not disregard a vote if it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides. Voting at Annual General Meeting The Directors have determined pursuant to Regulations 7.11.37 and 7.11.38 of the Corporations Regulations 2001 (Cth) that the persons eligible to vote at the Annual General Meeting are those who are registered Shareholders of the Company at 11.00am (WST) on Saturday 26 November 2016. Accordingly, transactions registered after that time will be disregarded in determining entitlements to attend and vote at the general meeting. Proxy and Voting Entitlement Instructions are included on the Proxy Form accompanying this Notice of Annual General Meeting. Annual Report Online Shareholders who have not elected to receive a hard copy of the Annual Report can access the report on the company’s website at www.ventnorresources.com.au BY ORDER OF THE BOARD John Geary Company Secretary 17 October 2016 Ventnor Resources Limited Page 3 EXPLANATORY STATEMENT 1. INTRODUCTION This Explanatory Statement has been prepared for the information of members of Ventnor Resources Limited (“the Company”) in connection with the business to be conducted at the Annual General Meeting of members to be held at The Celtic Club, 48 Ord Street, West Perth, Western Australia on Monday 28, November 2016 at 11.00am (WST). This Explanatory Statement forms part of and should be read in conjunction with the accompanying Notice of Annual General Meeting. 2. 2016 ANNUAL REPORT In accordance with the requirements of the Company’s Constitution and the Corporations Act, the 2016 Annual Report will be tabled at the Annual General Meeting. Shareholders will have the opportunity of discussing the Annual Report and making comments and raising queries in relation to the Annual Report. There is no requirement for a formal resolution on this item. Representatives from the Company’s auditors, RSM Australia Partners, will be present to take shareholders’ questions and comments about the conduct of the audit and the preparation and content of the audit report. 3. ADOPTION OF REMUNERATION REPORT – Resolution 1 3.1 General The Corporations Act requires that at a listed company’s annual general meeting, a resolution that the remuneration report be adopted must be put to the shareholders. However, such a resolution is advisory only and does not bind the Directors of the Company. If at least 25% of the votes cast on Resolution 1 are voted against adoption of the Remuneration Report at the Annual General Meeting, and then again at the Company’s 2017 annual general meeting, the Company will be required to put to Shareholders a resolution proposing the calling of an extraordinary general meeting to consider the appointment of directors of the Company (Spill Resolution). If more than 50% of the Shareholders vote in favour of the Spill Resolution, the Company must convene an extraordinary general meeting (Spill Meeting) within 90 days of the Company’s 2017 annual general meeting. All of the Directors who were in office when the Company’s 2017 Directors Report was approved, other than the managing director of the Company, will cease to hold office immediately before the end of the Spill Meeting but may stand for re-election at the Spill Meeting. Following the Spill Meeting those persons whose election or re-election as Directors is approved will be the Directors of the Company. At the Company’s previous annual general meeting the votes cast against the remuneration report considered at that annual general meeting were less than 25%. Accordingly, the Spill Resolution is not relevant for this annual general meeting. The Remuneration Report sets out the Company’s remuneration arrangements for the Directors and senior management of the Company. The Remuneration Report is part of the Directors’ report contained in the annual financial report of the Company for the financial year ended 30 June 2016. A reasonable opportunity will be provided for discussion of the Remuneration Report at the Annual General Meeting. Ventnor Resources Limited Page 4 3.2 Proxy Restrictions Pursuant to the Corporations Act, if you elect to appoint the Chair, or another member of the Key Management Personnel or any Closely Related Party as your proxy to vote on this Resolution 1, you must direct the proxy how they are to vote. Where you do not direct the Chair, or another member of the Key Management Personnel or Closely Related Party on how to vote on this Resolution 1, the proxy is prevented by the Corporations Act from exercising your vote and your vote will not be counted in relation to Resolution 1. The above note on voting does not apply if the voter is the Chair of the Meeting and the undirected proxy expressly authorises the Chair to exercise the proxy even though Resolution 1 is connected directly or indirectly with the remuneration of a member of the Key Management Personnel for the Company. 3.3 Definitions Key Management Personnel has the same meaning as in the accounting standards and broadly includes those 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. Closely Related Party of a member of the Key Management Personnel means: (a) (b) (c) (d) (e) (f) A spouse or child of the member; A child of the members spouse; A dependent of the member or the members spouse; Anyone else who is one of the member’s family and may be expected to influence the member, or be influenced by the member, in the member’s dealing with the entity; A company the member controls; or A person prescribed by the Corporations Regulations 2001 (Cth). Remuneration Report means the remuneration report set out in the Directors’ report section of the Company’s annual financial report for the year ended 30 June 2016. 4. RE-ELECTION OF DIRECTOR: Resolution 2 Resolution 2 relates to the re-election of Mr Peter Pawlowitsch as a Director. In accordance with the requirements of clause 11.3 of the Company’s Constitution and the Corporations Act, one-third of the directors of the Company retire from office at this Annual General Meeting of the Company. Mr Pawlowitsch retires by rotation and, being eligible, offers himself for re-election. A summary of the qualifications and experience of Mr Pawlowitsch is provided in the Annual Report. All the Directors, except for Mr Pawlowitsch, recommend that Shareholders vote in favour of Resolution 2 5. APPROVAL of 10% PLACEMENT CAPACITY: Resolution 3 5.1 General ASX Listing Rule 7.1A provides that an Eligible Entity may seek Shareholder approval at its annual general meeting to allow it to issue Equity Securities up to 10% of its issued capital over a period up to 12 months after the annual general meeting (10% Placement Capacity). The Company is an Eligible Entity. Ventnor Resources Limited Page 5 If Shareholders approve Resolution 3, the number of Equity Securities the Eligible Entity may issue under the 10% Placement Capacity will be determined in accordance with the formula prescribed in ASX Listing Rule 7.1A.2 (as set out in Section 5.2 below). The effect of Resolution 3 will be to allow the Directors to issue Equity Securities up to 10% of the Company’s fully paid ordinary securities on issue under the 10% Placement Capacity during the period up to 12 months after the Meeting, without subsequent Shareholder approval and without using the Company’s 15% annual placement capacity granted under Listing Rule 7.1. Resolution 3 is a special resolution. Accordingly, at least 75% of votes cast by Shareholders present and eligible to vote at the Meeting must be in favour of Resolution 3 for it to be passed. 5.2 ASX Listing Rule 7.1A ASX Listing Rule 7.1A enables an Eligible Entity to seek shareholder approval at its annual general meeting to issue Equity Securities in addition to those under the Eligible Entity’s 15% annual placement capacity. An Eligible Entity is one that, as at the date of the relevant annual general meeting: (a) is not included in the S&P/ASX 300 Index; and (b) has a maximum market capitalisation (excluding restricted securities and securities quoted on a deferred settlement basis) of $300,000,000. The Company is an Eligible Entity as it is not included in the S&P/ASX 300 Index and has a current market capitalisation (at the date of this Explanatory Statement) of $3,447,358. Any Equity Securities issued must be in the same class as an existing class of quoted Equity Securities. The Company currently has one class of Equity Securities on issue, being the Shares (ASX Code: VRX). The exact number of Equity Securities that the Company may issue under an approval under Listing Rule 7.1A will be calculated according to the following formula: (A x D) – E Where: A is the number of Shares on issue 12 months before the date of issue or agreement: (i) plus the number of Shares issued in the previous 12 months under an exception in ASX Listing Rule 7.2; (ii) plus the number of partly paid shares that became fully paid in the previous 12 months; (iii) plus the number of Shares issued in the previous 12 months with approval of holders of Shares under this rule; and (iv) less the number of Shares cancelled in the previous 12 months. D is 10%. E is the number of Equity Securities issued or agreed to be issued under ASX Listing Rule 7.1A.2 in the 12 months before the date of issue or agreement to Ventnor Resources Limited Page 6 issue that are not issued with the approval of holders of Ordinary Securities under ASX Listing Rule 7.1 or 7.4. 5.3 Technical information required by ASX Listing Rule 7.1A Pursuant to and in accordance with ASX Listing Rule 7.3A, the information below is provided in relation to this Resolution 3: (a) Minimum Price The minimum price at which the Equity Securities may be issued is 75% of the volume weighted average price of Equity Securities in that class, calculated over the 15 ASX trading days on which trades in that class were recorded immediately before: (b) (i) the date on which the price at which the Equity Securities are to be issued is agreed; or (ii) if the Equity Securities are not issued within 5 ASX trading days of the date in Section 5.3(a)(i), the date on which the Equity Securities are issued. Date of Issue The Equity Securities may be issued under the 10% Placement Capacity commencing on the date of the Meeting and expiring on the first to occur of the following: (i) 12 months after the date of this Meeting; and (ii) the date of approval by Shareholders of any transaction under ASX Listing Rules 11.1.2 (a significant change to the nature or scale of the Company’s activities) or 11.2 (disposal of the Company’s main undertaking), or such longer period if allowed by ASX (10% Placement Capacity Period). The approval under Resolution 3 for the issue of Equity Securities will cease to be valid in the event that shareholders approve a transaction under Listing Rules 11.1.2 or 11.2. (c) Risk of voting dilution Any issue of Equity Securities under the 10% Placement Capacity will dilute the interests of Shareholders who do not receive any Shares under the issue. If Resolution 3 is approved by Shareholders and the Company issues the maximum number of Equity Securities available under the 10% Placement Capacity, the economic and voting dilution of existing Shares would be as shown in the table below. The table below shows the dilution of existing Shareholders calculated in accordance with the formula outlined in ASX Listing Rule 7.1A(2), on the basis of the current market price of Shares and the number of Equity Securities currently on issue. The table also shows the voting dilution impact where the number of Shares on issue (variable A in the formula) changes and the economic dilution where there are changes in the issue price of Shares issued under the 10% Placement Capacity. Ventnor Resources Limited Page 7 Dilution Number of Number of Shares Shares issued on Issue under 10% Placement Capacity 164,159,921 (Current) 16,415,992 246,239,881 24,623,988 (50% increase) 328,319,842 (100% increase) 32,831,984 Funds raised based on issue price of $0.01 Funds raised based on issue price of $0.021 Funds raised based on issue price of $0.031 (50% decrease in issue price) (issue price) (50% increase in issue price) $164,160 $344,736 $508,896 $246,240 $517,104 $763,344 $328,320 $689,493 $1,017,792 *The number of Shares on issue (variable A in the formula) could increase as a result of the issue of Shares that do not require Shareholder approval (such as under a pro-rata rights issue or scrip issued under a takeover offer) or that are issued with Shareholder approval under Listing Rule 7.1. The table above uses the following assumptions: 1. 2. 3. 4. 5. 6. 7. The current shares on issue are the Shares on issue as at 14 October 2016. The issue price set out above is the closing price of the Shares on the ASX on 14 October 2016. The Company issues the maximum possible number of Equity Securities under the 10% Placement Capacity. The Company has not issued any Equity Securities in the 12 months prior to the Meeting that were not issued under an exception in ASX Listing Rule 7.2 or with approval under ASX Listing Rule 7.1. The calculations above do not show the dilution that any one particular Shareholder will be subject to. All Shareholders should consider the dilution caused to their own shareholding depending on their specific circumstances. This table does not set out any dilution pursuant to approvals under ASX Listing Rule 7.1. Resolution 3 has been approved by Shareholders at the Meeting. Shareholders should note that there is a risk of economic and voting dilution of existing ordinary security holders that may result from an issue of Equity Securities under Listing Rule 7.1A.2, including the risk that: (d) (i) the market price for the Company’s Shares may be significantly lower on the issue date than on the date of the Meeting; and (ii) the Shares may be issued at a price that is at a discount to the market price for those Shares on the date of issue, or issued for non-cash consideration for the acquisition of a new asset. Purpose of Issue under 10% Placement Capacity The Company may issue Equity Securities under the 10% Placement Capacity for the following purposes: Ventnor Resources Limited Page 8 (e) (i) as cash consideration in which case the Company intends to use funds raised for exploration and evaluation of the company’s existing projects and general working capital; or (ii) as non-cash consideration for the acquisition of new assets and investments, in such circumstances the Company will provide a valuation of the non-cash consideration as required by listing Rule 7.1A.3. Allocation under the 10% Placement Capacity The Company’s allocation policy is dependent on the prevailing market conditions at the time of any proposed issue pursuant to the 10% Placement Capacity. The identity of the allottees of Equity Securities will be determined on a case-by-case basis having regard to a number of factors, including: (i) the purpose of the issue; (ii) alternative methods for raising funds available to the Company at that time, including, but not limited to, an entitlement issue or other offer where existing Shareholders may participate; (iii) the effect of the issue of the Equity Securities on the control of the Company; (iv) the circumstances of the Company, including, but not limited to, the financial position and solvency of the Company; and (v) advice from corporate, financial and broking advisers (if applicable). The allottees under the 10% Placement Capacity have not been determined as at the date of this Notice but may include existing Shareholders and/or new investors who are not related parties or associates of a related party of the Company. Further, if the Company is successful in acquiring new assets or investments, it is possible that the allottees under the 10% Placement Capacity will be the vendors of the new assets or investments. (f) Previous Approval under ASX Listing Rule 7.1A The Company previously obtained approval under ASX Listing Rule 7.1A at its annual general meeting held on 9 November 2015. In accordance with ASX Listing Rule 7.3A.6, the following information is provided to shareholders regarding the equity securities issued in the previous 12 months preceding the date of the Annual General Meeting (that is, 28 November 2016). Listing Rule 7.3A.6(a) The table below shows the total number of equity securities issued in the previous 12 months preceding the date of the Annual General Meeting and the percentage that those issues represent of the total number of equity securities on issue at the commencement of that 12 month period. Total number of equity securities issued in the 12 months preceding the date of the meeting Percentage that they represent of the total number of equity securities on issue at the commencement of that 12 month period Ventnor Resources Limited 26,562,816 19.3% Page 9 Listing Rule 7.3A.6(b) The tables below set out specific details for each issue of equity securities that have taken place in the 12 month period prior to the date of the Annual General Meeting. Date of issue Number issued Summary of terms Names of the persons who received securities or basis on which those persons were determined Price Discount to market price (if any) For cash issues Total cash consideration received Amount of cash consideration spent Use of cash consideration Intended use for remaining amount of cash (if any) 14 October 2016 26,562,816 Ordinary fully paid shares ranking equally with existing shares on issue Non Renounceable Rights Issue to Eligible Existing Shareholders on a 1 share for every two shares held 1.5 cents 25% $398,442 Nil N/A Unspent funds: $398,442 Funds to be used to conduct further review, evaluation and exploration programs on the company’s existing projects and for working capital purposes. For non-cash issues Non-cash consideration paid Current value of that non-cash consideration 6.4 Nil Nil Voting Exclusion A voting exclusion statement is included in this Notice. As at the date of this Notice, the Company has not invited any existing Shareholder to participate in an issue of Equity Securities under ASX Listing Rule 7.1A. Therefore, no existing Shareholders will be excluded from voting on Resolution 3. 6. PROPOSED GRANT OF OPTIONS (Resolutions 4 to 6) Resolutions 4 to 6 of the Notice propose the issue of Incentive Options to Directors. ASX Listing Rule 10.11 relevantly provides that the prior approval of shareholders of Ventnor is required for the issue of equity securities to a related party. If approval is given for the issue of securities under ASX Listing Rule 10.11, approval is not required under ASX Listing Rule 7.1. ASX Listing Rule 10.13 sets out the information to be provided to shareholders in the notice of meeting. Chapter 2E of the Corporations Act regulates the provision of financial benefits to related parties by a public company. Section 208 of the Act prohibits, subject to certain exceptions, a company from giving a financial benefit to a related party of the company without prior shareholder approval. A “financial benefit” is defined in the Act in broad terms and includes a public company issuing securities. Ventnor Resources Limited Page 10 For the purpose of this meeting, a “related party” includes a director of the Company. Accordingly, the proposed grant of Incentive Options to the specified director involves the provision of a financial benefit to a related party of the Company. Where no exception is applicable (as is the case in these circumstances), Section 208 of the Act provides that for a public company to give a financial benefit to a related party of that Company, the public company must (a) obtain the approval of members in the way set out in Sections 217 to 227 of the Act; and (b) give the benefit within 15 months after the approval is obtained. The information required by Chapter 2E of the Act to be provided to shareholders is contained within this Explanatory Statement and the Notice. The purpose of the issue is to align the interest of Directors (together the “Participating Directors”) with those of the Company shareholders. The Directors believe that the future success of the Company will depend in large measure on the skills and motivation of the people engaged in and overseeing the management of the Company’s operations. It is therefore important that the Company is able to attract and retain people of the highest calibre. The Directors consider that the most appropriate means of achieving this is to provide the Participating Directors with an opportunity to participate in the Company’s future growth and give them an incentive to contribute to that growth. Issue of options as part of the remuneration packages of Directors is a well established practice of junior publicly listed companies and, in the case of the Company, has the benefit of conserving cash whilst properly rewarding the Directors. In determining the number of Incentive Options to be issued and the terms, consideration was given to the relevant experience and role of each of the Participating Directors, their respective overall remuneration terms, the market price of the Company’s shares over the past 12 months, and the terms of the options. The proposed participants in the issue of Incentive Options and the number of Incentive Options to be issued are: Name Position Paul Boyatzis Bruce Maluish Peter Pawlowitsch Non-Executive Chairman Managing Director Non-Executive Director Incentive Options 1,000,000 2,000,000 1,000,000 ASX Listing Rule 10.11 and Chapter 2E of the Corporations Act require shareholder approval to be obtained for the issue of