16 questions lodged at 2021 AMA AGM

November 18, 2021

Here is the text of the 16 questions lodged by Stephen Mayne at the 2021 AMA Group AGM held on November 18.

1. Did any of the 5 main proxy advisers in the Australian market - ACSI, ASA, Ownership Matters, Glass Lewis and ISS - recommend a vote against any of today's resolutions? Which of the proxy advisers are covering us and has there been a material proxy protest vote against any of today's resolutions? Will you disclose the proxy votes before the debate on today's resolutions so shareholders can ask questions if there have been any protest votes?

2. After pocketing $63.6 million in JobKeeper for 3342 staff over two financial years, why did we pay executive bonuses in 2020-21 which included this government handout as revenue, particularly given shareholder have received such poor returns? Has this controversial move triggered a remuneration strike today?

3. Treasury Wine Estates has voluntarily moved to annual elections for directors in line with best practice that occurs in both the US and the UK. Dual listed companies like News Corp, BHP and Rio Tinto all do this due to the laws in the US and UK. What does the chairman, and the new directors being elected for the first time today, think about Mineral Resources adopting this model at the 2022 AGM so that all directors can be more regularly accountable to shareholders.

4. When disclosing the outcome of all resolutions today, will the chair support the idea of publicly disclosing how many shareholders voted for and against each item, similar to what happens with a scheme of arrangement? This will provide a better gauge of retail shareholder sentiment on all resolutions and was a disclosure initiative recently adopted by Metcash and Southern Cross Media after their AGMs. What does the chair think of this idea?

5. Given the interesting discussions across a range of topics today, could the chair undertake to make an archived copy of the webcast plus a full transcript of proceedings available on the company's website. Nine Entertainment chairman Peter Costello, who appreciates the benefit of a parliamentary Hansard transcript where MPs don't have to scroll through old videos to find out what was said, made this change last week & had a full transcript of Nine AGM online before the end of the day.

6. Could Leith Nicholson comment on how many millions of dollars his law firm Nicholson Ryan Lawyers has billed AMA since it first became involved in 2009. Has AMA been among the firm's top 5 clients for billings in many years since 2009? Could the audit committee chair comment on how much has been paid by AMA to Nicholson Ryan Lawyers as related party transactions since Leith joined the AMA board in 2015. Over that 6 year period, did we ever put our legal work out to tender? Finally, can you name any other comparable ASX listed companies that have an out-sourced “general counsel”.

7. What is going on with the amateur hour substantial shareholder reporting on page 114 of the 2020-21 annual report? This is meant to be a list of beneficial shareholders above 5% but you're included 3 nominee shareholders with more than 5% - HSBS Nominees with 27.5%, JP Morgan nominees with 21% and Citicorp Nominees with 5.05%. You have then gone on to list UBS Nominees with 4.55% and National Nominees with 3.25% when they are both below 5%. Please name any actual beneficial shareholders who own more than 5% and undertake to get this disclosure right in next year's annual report.

8. Whose idea was it to limit the ability of your 4000 retail shareholders to only apply for additional shares equivalent to 50% of their entitlement in the recent $47 million 1-for-2.8 retail offer? Do you agree this unnecessary and unwarranted restriction triggered a $17 million shortfall on the $47 million offer with windfall gains going to the Swiss under-writer UBS and its unknown institutional clients. With the stock at 45c today, do you agree that retail shareholders have been collectively diluted out of $3.4 million in value. Are you prepared to launch a $30,000 Share Purchase plan for retail shareholders as a make good for this unfair structuring.

9. Could outside candidate Peter Taylor comment on whether he believes the board has treated him fairly in the way this contested election has been conducted. Was his platform in the notice of meeting censored? Was the full notice of meeting snail mailed to all shareholders who hadn't signed up for electronic communications? Did the board provide access to the email addresses of shareholders for proxy solicitation? How much did the board charge for the share register? Was he invited to prepare a video for the AGM and has he been invited to answer questions at today's AGM. Is there anything Peter would like to add to the discussion at this point?

10. How important is the Suncorp relationship going forward both as a shareholder and a client. Have we explored a potential strategic relationship with Insurance Australia Group and its 30% shareholder partner in NSW and Victoria, namely RACV Victoria, which is Australia's richest remaining mutual worth an estimated $3 billion. If IAG/RACV bought a 10-20% stake in AMA, they would have an incentive to direct their repair work our way. Does our existing Suncorp relationship undermine our relationship with IAG/RACV.

11. Why is Simon Moore going again given that he is a long term director associated with past private equity investments in AMA and the performance in recent years has been so poor. Could Simon please speak for himself and will candidates up for election today be addressing shareholders?

12. Given that land values are surging at the moment, have we looked at rationalising or redeveloping any of our sites a bit like the way Brickworks and CSR make a fortune from repurposing and selling off old sites. What is the book value of our company owned repair shops, what proportion do we lease and are the clean up costs adequately provisioned on the balance sheet.

Answer: we only rent.

13. Has Paul Ruiz had any dealings with external candidate Peter Taylor? If there wasn't litigation, would he potentially be a suitable director?

13. Did the directors have line of site in terms of who sub-underwrote the recent capital raising. Was Kyle aware that Thorney was one of the under-writers and how did Kyle himself play the capital raising? Is he going to buy more shares when the windows open?

14. As a former chair of NRMA with direct auto industry experience, Kyle is an excellent appointment to the board. Well done in securing his services and does he think the Suncorp connection limits our relationship with IAG, which was spun off from NRMA almost 20 years ago.

15. Private equity firms are notorious for gearing up companies they own and also often deploy leverage such as making long term lease commitments rather than owning free-hold. What TPG did with Myer was the worst example. Could Simon Moore comment on whether he was involved in the strategic decision for AMA to not own any freehold and is he comfortable that the leasehold liability is adequately reported. Are they are balloon payments in the backend of leases like what TPG did with Myer.

16. Thank you for reading out all of my questions without any editing. Why are we bothering with this partial takeover renewal when a partial takeover might be quite useful for an unloved stock. Also, when disclosing the outcome of all resolutions, including this item, will you publicly disclose how many shareholders voted for and against each item, similar to what happens with a scheme of arrangement? This will provide a better gauge of retail shareholder sentiment on all resolutions and was a disclosure initiative recently adopted by Metcash and Southern Cross Media after their AGMs. Go on chair, give us a small disclosure win like this one, or agreeing to a transcript.

Answer: The lawyer on the board Leith Nicholson said this was standard and predicted strong support when it actually attracted the biggest protest vote of the day with 17% against.