CF - SGS 5
Terms
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- What are the statutory references that require companies to hold AGMs?
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S. 336(1) CA 06; and
E2 Corporate Governance Code - What matters are usually considered at AGMs?
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1) Annual report and accounts
2) Results and performance
3) Gain shareholder approval
- What section requires a directors' remuneration report to be approved?
- S. 439(1) CA 06
- How often is a directors' remuneration report required?
- Annually
- What section requires the approval of the directors' remuneration policy?
- S. 439A(1) CA 06
- How often does the directors' remuneration policy need to be passed?
- Once every three years.
- How should you describe the nature of the resolution to pass the directors' remuneration policy?
- Should be descried as binding (see s. 226B CA 06).
- What do you need to consider when reviewing a company's previous AGM notice specifically in connection with the directors' remuneration policy?
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1. Does the company have a valid DRP, i.e. was a policy approved last year?
2. Is the policy changing, i.e. does a new policy need to be approved this year? - In the context of AGMs, what should be mindful of if a director is appointed by the board?
- That director will need to be re-elected at the AGM.
- When directors are required to retire by rotation, what should you note?
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1. That the newest board member (to be re-elected) may count towards the total number of directors to calculate the proportion of directors to retire; and
2. The directors are retiring by rotation and standing for re-election at the AGM. - What is the added advantage of disapplying pre-emption rights even when making a pre-emptive offer?
- Allows the company to gather fractional entitlements that couldn't be given to a shareholder. Additional shares can be sold on behalf of the company.
- What are most things sent to shareholders deemed to be?
- Circulars (see LR 13.3.1)
- What might need to be sent along with an AGM notice if the notice includes 'special business' as set out in the company's AOA?
- An explanatory circular must accompany the circular must accompany the notice (LR 13.8.8).
- How should you describe the reasoning for disapplying pre-emption rights owing to overseas investors?
- The requirement to receive local law advice and understand the relevant law may cost far more than will be made from issuing the shares (and the point of doing a secondary issue is to raise money).