AGMs

Question asked at 2021 Ausnet AGM


July 17, 2021

After a friendly pre-AGM engagement with Ausnet, the following questions were lodged at the July 15 AGM.

FOUR QUESTIONS SUBMITTED TO INVESTOR RELATIONS BEFORE THE MEETING

  1. Could one of the State Grid nominees on the board please comment about the rising tensions between Australia and China and whether this could lead to State Grid selling its 20% stake in Ausgrid.

  2. Could Peter Mason please comment on the likely timing for chair succession and could one of the Singapore Power and State Grid nominees please comment on whether they are committed to the model of retaining an independent chair of Ausgrid.

  3. What has been the financial impact on Ausnet so far from the recent storms in Gippsland and the Dandenongs and what is the timing on when we are likely to recover these costs over time through regulator approved price rises.

  4. Old time power industry watchers have commented that the extended power outages in the Dandenongs “wouldn't have happened under the SECV”. Given that SECV employment peaked at about 24,000 in the 1980s and the same assets are managed today with less than 10,000 employees, were we caught short in terms of surge workforce capacity because of too many job cuts in Victoria's now privately owned electricity industry? Has there ever been a time before when crews from NSW had to be called in to assist with reconnecting power to homes?
EIGHT QUESTIONS SUBMITTED DURING THE MEETING

5. Thank you for providing full archives of the webcast of the past two AGMs on the Ausnet website. Could you please go one better in 2021 by publishing a full transcript of today's proceedings, similar to the best practice adopted by the likes of Woolworths and Transurban in recent years.

6. Spark Infrastructure lodged a slide with the ASX this morning quoting from a 2020 AER Benchmarking study which measured Multilateral Total Factor Productivity (MTFP) Rankings. This slide from a presentation given to the ASA ranked Ausnet 11th out of 13 amongst Distribution providers and 5th of 5 amongst Transmission providers. Why are we ranked so lowly and what does this measure mean?

7. KKR and Ontorio Teachers have today offered $2.70 a share to buy our rival Spark Infrastructure, valuing the enterprise at almost $6 billion. Have we yet, or are we going to, retain any advisers to help navigate through the current surge in takeover activity around infrastructure assets and what does the Spark bid mean for us?

8. Thank you for disclosing the proxy votes ahead of the meeting commencing with the slide pack of the formal addresses lodged with the ASX at 1.29pm. The only material protest vote was 255.8 million shares against the re-election of Singapore Power nominee Alan Chan Heng Loon. Did any of the proxy advisers recommend against any of the resolutions today and what insight do you have into the 17.3% vote against Mr Loon by the independent shareholders who voted by proxy?

9. Well done to all concerned for announcing an orderly chair succession process complete with a commitment to retain an independent chair. Thanks to Mr Mason for his leadership and service in stabilising Ausnet after the previous board ructions. Will a head hunting firm be involved in the selection of the next chair or is it more likely that the next chair is one of the existing independent directors. Does Mr Mason agreed that it would be preferable for the next chair to be based in Melbourne, given that all of our assets are in Victoria.

10. Could one of the two State Grid directors please comment on the value that they feel State Grid brings to Ausnet. Would State Grid require FIRB or regulatory approval to lift its stake about 20% and have any discussions been held with regulatory authorities about this happening. Given current relations with China, do the State Grid nominees regard it as unlikely that approval would be given to lift their stake?

11. Victoria has one of the world's highest rates of gas reticulation penetration. Are we concerned that government entities such as the City of Yarra, controlled by 5 Greens councillors, are actively pushing plans to encourage residents to disconnect from gas and move to renewable electricity? Is stranded gas assets becoming a more prominent risk on our risk register?

12. Given that the total payments to the NEDs was only $1.9 million in the previous financial year and there are no plans for any increases, why the need for an increase in the fee cap. Could the next chair be paid more than the current chair? NOT ASKED

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