10 October 2021
Notice to Members | 55th Annual General Meeting | Coastline Credit Union Ltd
Coastline Credit Union Ltd will be conducting its 55th Annual General Meeting on Thursday 11 November 2021 at the Central Kempsey Branch, 26 Smith Street, Kempsey NSW 2440 commencing at 5.45 pm.
1 Annual Report
To consider and receive the Directors Report, Financial Statements and Audit Report
2 Appointment of Director
To consider, and if thought fit, to pass the following ordinary resolutions:
2.1 That Matt Ryan be reappointed as a director.
2.2 That Tony Ferris be reappointed as a director.
3 Directors Remuneration
To considering, and if thought fit, passing the following Ordinary Resolution: That aggregate Directors fees for the 2021/22 financial year be set at $508,626 including statutory superannuation and Retirement Benefit Provision.
4 Amendments to Constitution – Mutual Capital Instruments
To consider and, if thought fit, to pass the following resolution as a special resolution to amend the Constitution:
That the Credit Union’s Constitution be amended to allow for the issue of mutual capital instruments (MCIs) by making the amendments marked-up in the copy of the Constitution which is tabled at the Meeting and signed by the Chair of the Meeting for the purposes of identification.
Note: The proposed amendments to the Credit Union’s Constitution are described in the Explanatory Notes to this Notice. A copy of the Constitution marked-up with the proposed amendments is available on our website at coastline.com.au. Alternatively, members can request a copy by contacting the Credit Union 1300 36 1066. A copy will also be available to view at the Annual General Meeting.
By order of the Board of Directors
Company Secretary – 12 October 2021
A member including a body corporate entitled to attend and vote at this meeting of the Credit Union is entitled to appoint a proxy to vote on their behalf. A proxy need not be a member of the Credit Union.
To have effect, proxy forms must reach the Coastline’s registered office, 64 Elbow Street West Kempsey NSW 2440 not later than 48 hours before the start of the meeting. Proxy forms are available at www.coastline.com.au or by calling 1300 36 1066.
Agenda Item 4. Amending Constitution – Mutual Capital Instruments
This special resolution will amend the Credit Union’s Constitution to allow for the issue of Mutual Capital Instruments (MCIs). MCIs are a new bespoke type of share provided for by law, that can only be issued by mutual entities. MCIs allow mutual entities to raise capital without jeopardising their mutual status or structure. The ability to issue MCIs gives mutual entities access to a broader range of capital raising and investment options than they previously had, to help innovate, grow and compete.
The Credit Union is a mutual entity as defined in the Corporations Act (each member has no more than 1 vote in general meeting for each capacity in which a person is a member) and thus is eligible to issue MCIs. However, the Credit Union’s Constitution must first be amended to allow it to issue MCIs. This special resolution will amend the Credit Union’s Constitution to address the specific legal requirements for MCIs, by:
- stating that the Credit Union is intended to be an MCI mutual entity;
- ensuring that rights attaching to MCIs or a class of MCIs can only be varied or cancelled by a special resolution of the Credit Union and either:
- a special resolution of all persons holding the same class of MCI; or
- obtaining written consent of 75 per cent of the holders of the class of MCI;
- specifying that MCIs can only be issued as a fully paid share;
- stating that dividends in respect of the MCI are non-cumulative;
- setting out the rights attached to the MCI with respect to participation in surplus assets and profits.
Currently the Credit Union is only able to issue member shares. If the amendments are made it will also be able to issue MCIs. In addition to the matters described above the key features and rights of MCIs will be as summarised below:
- the terms of issue, including rights attaching to, MCIs will be as determined at the time by the board;
- the Credit Union may issue different classes of MCIs with different rights;
- the Credit Union may issue other types of securities on terms that they will or may convert to MCIs;
- MCIs may carry a right to dividends;
- MCIs may carry a right in the event of the winding-up of the Credit Union to payment of their subscription price, but cannot otherwise carry any right to share in surplus assets – by default this payment can only made after the subscription price on all member shares has been paid, however classes of MCIs may be issued on terms that give them priority to payment of subscription price before member shares and other MCIs;
- MCIs may carry a right to vote in general meeting and in the election of directors, but capped at 1 vote per MCI holder – if an MCI holder is also a member that person cannot cast more than 1 vote in total;
- MCIs do not carry any right to vote on a Demutualisation Resolution as defined in Schedule 3 of the Constitution;
- MCIs may carry rights that are preferred, equal, or deferred to the rights of members and any other class of MCIs.
The amendments seek to provide the board with flexibility as to the terms of issue of MCIs to be best placed to address commercial and regulatory requirements for capital raising purposes. Whether or not MCIs carry any of the above permitted rights is a matter for the board to determine if and when it decides to issue MCIs.
The special resolution will also make consequential amendments to the Constitution in recognition that the Credit Union may have shareholders other than members (i.e. MCI holders), and that MCI holders, not just members, may be entitled to vote in general meetings and in the election of directors. Rules about general meetings will be modified so they apply to all meetings of shareholders, including meetings for holders of a class of shares. This includes modifying the quorum for shareholders’ meetings to half the number of shareholders eligible to attend and vote if this is less than the current fixed quorum of 25.
Exemption from, and amendments to, Schedule 3 Consideration of Demutualisation Procedures
Schedule 3 of the Credit Union’s Constitution sets out special procedures required before a Demutualisation Resolution can take effect. These require, amongst other things, approval of the Demutualisation Resolution by a Direct Ballot that at least 25% of members participate in and at least 75% of votes are in favour of, in addition to approval by special resolution in general meeting.
Although the proposed amendments to the Constitution to allow for the issue of MCIs are not a demutualisation as generally understood and would not jeopardise the Credit Union’s status as a mutual entity, the amendments, or subsequent issue of MCIs, may technically trigger Schedule 3 as they allow for the issue of MCIs with voting rights.
In recognition that many mutual entities have Constitutional rules with similar effect to Schedule 3, the law permits the Credit Union to amend its Constitution to allow for the issue of MCIs without complying with Schedule 3. Instead, the amendments can be made simply via a special resolution of members in general meeting.
To ensure that the future issue of MCIs (or of securities that may convert to MCIs) will not itself trigger Schedule 3, the Constitutional amendments include consequential changes to Schedule 3 to allow for the issue of MCIs with voting rights.
Note that only members, not MCI Holders, are eligible to vote in the Direct Ballot to approve a Demutualisation Resolution under Schedule 3. In addition, MCI Holders will not be entitled to vote in general meeting on a Demutualisation Resolution.
To be passed this special resolution requires the approval of at least 75% of the votes cast by members.
Your directors unanimously support this special resolution and recommend that you vote FOR it.
For more information, please click here to view the Mutual Capital Instruments FAQ.