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Notice of Extraordinary General Meeting201042343719


Notice of Extraordinary General Meeting201042343719

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									N O T I C E    O F   E X T R A O R D I N A R Y    G E N E R A L    M E E T I N G

Notice of Extraordinary
General Meeting
              Notice is given to the members of David Jones Limited ACN 000 074 573
              ("the Company") that an Extraordinary General Meeting of the Company will
              be held at the Wesley Conference Centre, 220 Pitt Street, Sydney on Monday,
              26 July 1999 at 10.00 am.

              1. To consider, and if thought fit, pass the following resolution as an ordinary
                “THAT, in accordance with section 256C(1) of the Corporations Law, the
                share capital of the Company be reduced from approximately $394.2
                million to approximately $315.3 million by the payment of $0.20 per fully
                paid ordinary share in the capital of the Company ("Ordinary Share") to
                each holder of Ordinary Shares (which, in accordance with the SCH
                Business Rules, confer an entitlement to participate in the reduction)
                registered in the books of the Company on Tuesday, 3 August 1999.”
                Further information in relation to the proposed capital reduction is set out in
                the accompanying Explanatory Statement.
              2. To consider, and if thought fit, pass the following resolution as an ordinary
                “Mr Reginald John Clairs be elected as a Director of the Company, effective
                at the conclusion of the meeting.”
                Mr Reginald John Clairs was appointed as a Director on 22 February 1999
                as an addition to the board of Directors. In accordance with rule 6.1(e) of
                the Company’s constitution, Mr Clairs retires as a Director, effective at the
                conclusion of the meeting, and, being eligible, offers himself for election.

              A member entitled to attend and vote at the meeting is entitled to appoint a
              proxy. Any member entitled to cast two or more votes may appoint two
              proxies to attend and vote in his or her stead and each proxy may be
              appointed to represent a specified proportion or number of the member’s
              votes. If a member appoints two proxies and the appointment does not
              specify the proportion or number of the member’s votes each proxy may
              exercise, each proxy may exercise half of the votes. The person or persons so
              appointed need not necessarily be members of the Company.
      N O T I C E   O F   E X T R A O R D I N A R Y   G E N E R A L   M E E T I N G

    To be effective, the proxy form must be received by Computershare Registry
    Services Pty Ltd., Level 3, 60 Carrington Street, Sydney NSW 2000 by
    10.00 am on Saturday, 24 July 1999, being not less than 48 hours before the
    time for holding the meeting. The proxy form may also be sent by facsimile to
    (02) 8234 5050 to be received by that time. No facility exists for receiving
    proxy forms by e-mail.

    C O R P O R AT E R E P R E S E N TAT I V E
    If your holding is registered in a company name and you would like to attend
    the meeting (and do not intend to return a completed proxy form), please
    bring with you to the meeting a duly completed Appointment of Corporate
    Representative Form to enable you to attend and vote at the Extraordinary
    General Meeting. You may contact the Share Registry who will forward to you
    a form for completion.

    For the purposes of section 1109N of the Corporations Law, the Board has
    determined that in relation to the Extraordinary General Meeting being
    convened by this Notice, shares will be taken to be held by the persons who
    are the registered holders at 10.00 am Sydney time on Saturday, 24 July
    1999. Accordingly, share transfers registered after that time will be
    disregarded in determining entitlements to attend and vote at the meeting.


    John A. Simmonds

    23 June 1999
E X P L A N A T O R Y   S T A T E M E N T

Explanatory Statement

           David Jones Limited ("the Company") has announced a financial restructure
           and certain other initiatives designed to provide a platform for future growth to
           enhance shareholder value. An integral part of this restructure is a proposed
           return of capital of $0.20 per share to holders of Ordinary Shares ("the Capital
           The Corporations Law permits the Company to reduce its share capital
           pursuant to an equal reduction if:
           • it is fair and reasonable to shareholders as a whole;
           • it does not materially prejudice the Company’s ability to pay its creditors;
           • it is approved by shareholders by ordinary resolution in a general meeting.
           The Capital Return is a distribution of capital, surplus to the Company's
           current requirements and your Directors consider that the Capital Return is
           fair and reasonable to shareholders as a whole.
           Your Directors believe the Capital Return will not impact the Company’s ability
           to meet its obligations to creditors or give effect to its business plans.
           As required by the Corporations Law, the Company will hold an Extraordinary
           General Meeting on Monday 26 July at 10.00 am at which shareholders will
           be asked to consider the Capital Return. This Explanatory Statement has
           been prepared to provide shareholders of the Company with material
           information known to the Company to enable shareholders to make an
           informed decision on the proposed Capital Return.
           Your Directors recommend that you vote in favour of the Capital
           Return. Each Director who is eligible to vote on the Capital Return
           resolution proposes to vote in favour of the Capital Return.
      E X P L A N A T O R Y    S T A T E M E N T

    T I M E TA B L E
    A summary timetable for the Capital Return is set out below. The timetable
    depends on shareholders approving the Capital Return at the Extraordinary
    General Meeting.

     Deadline for return of proxies            10.00 am Saturday, 24 July 1999

     Time for determining shareholders 10.00 am Saturday, 24 July 1999
     entitled to attend and vote at meeting

     Extraordinary General Meeting              10.00 am Monday, 26 July 1999

     ASX notified of outcome of resolution                 Monday, 26 July 1999

     Shares trade ex Capital Return                        Tuesday, 27 July 1999

     Record date for Capital Return                      Tuesday, 3 August 1999

     Cheques despatched to shareholders                Tuesday, 10 August 1999

    R E A S O N F O R C A P I TA L R E T U R N
    On 22 June 1999 the Company made an announcement and sent a letter to
    shareholders which detailed a financial restructure and certain other initiatives
    designed to more effectively utilise the Company’s balance sheet, provide a
    platform for future growth, and enhance shareholder value.
    The financial restructure and other initiatives comprise the following.
    • Securitisation of the Company's credit card receivables portfolio, which will
      release approximately $200 million.
    • The Capital Return to shareholders of $0.20 per share.
    • The repayment of part of the Company's existing debt facilities.
    • The continuation of the Company's existing store opening program.
    • The extension of the David Jones brand to new stand alone concepts.
    Following the restructure, the Company will be in a strong position to make
    acquisitions and continue to explore growth initiatives as opportunities arise.
    The Company will also consider the sale and lease back of its property
    portfolio, which could release in excess of $200 million. Should this occur the
    additional funds released from this transaction will be used to support
    additional growth initiatives.
    Following the securitisation, and having regard to the proposed uses of those
    proceeds, the Company will have capital in excess of its current requirements.
    This has resulted in your Directors resolving to return $0.20 per share to all
    shareholders by way of the Capital Return.
E X P L A N A T O R Y   S T A T E M E N T

           R E A S O N F O R C A P I TA L R E T U R N
           The Directors believe that a Capital Return of $0.20 per share will not
           prejudice the Company's ability to meet its obligations or implement its
           business plans. Following the Capital Return, the Company will have a strong
           balance sheet with the capacity to fund further growth opportunities as
           they arise.
           The Directors concluded that the Capital Return is the most appropriate
           mechanism to return capital to shareholders. Its major advantages compared
           to a share buy back are simplicity, greater certainty of outcome and its more
           equitable treatment for all shareholders.

           E F F E C T O N T H E C O M PA N Y
           On completion of the securitisation of the credit card receivables, the
           Company will receive net proceeds of approximately $200 million. The
           Directors have considered the use of these funds and determined that it is
           appropriate that part of the funds be returned to shareholders by way of a
           Capital Return.

           Share Capital
           Based on 392,996,480 shares, being the number of shares on issue at the
           date of this Explanatory Statement, and the Capital Return of $0.20 per
           share, an amount of approximately $79 million will be charged against the
           Company’s share capital account and paid to shareholders. The Company’s
           share capital account will therefore be reduced by approximately $79 million
           following the Capital Return.
           All shareholders will hold the same number of shares in the Company
           immediately after the Capital Return as they held immediately before the
           Capital Return. The Capital Return will not affect either the total number of
           shares on issue or the number of shares held by each shareholder.
           Shareholders will not need to sell any shares.

           The source of funds for the Capital Return will be the proceeds from the credit
           card securitisation. Overall, borrowings will decrease as the proceeds from
           the credit card securitisation are significantly higher than the amount required
           for the Capital Return.
           Based on the half yearly accounts as at 23 January 1999, net borrowings
           would decrease by $135 million (representing securitisation proceeds equal to
           credit card receivables of $214 million, less the Capital Return of $79 million)
           to $111 million. The Company’s proforma debt to equity ratio at 23 January
           1999 would fall from 50% to 27%. This impact is detailed in the table below.
       E X P L A N A T O R Y             S T A T E M E N T

    E F F E C T O N T H E C O M PA N Y ( C O N T I N U E D )

    Proforma Gearing Impact

                                                      (1)                      (1)
                                         Reported                 Proforma                     Notes
      Debt                  $m                246                      111                         (2)
      Equity                $m                484                      406                         (3)
      Debt/Equity            %                 50                       27

    (1) Reported information for the Company has been extracted from the half yearly accounts as at
        23 January 1999. Proforma information reflects adjustments for the impact of the securitisation, Capital
        Return and debt repayment. In preparing the proforma information there have been no changes in
        accounting policies.
    (2) Repayment of debt of $135 million.
    (3) Capital Return of $79 million.

    The Capital Return will not adversely impact the Company’s remaining assets
    or its ability to use those assets to meet liabilities as and when they fall due.

    Proforma Earnings per Share and Return on Equity
    Based on an interest rate of 6%, the funding of the Capital Return reduces the
    Company's net profit after tax by approximately $3 million.
    The estimated impact of the Capital Return on earnings per share and return
    on equity, based on the financial statements for the year ended 25 July 1998
    as if the Capital Return was applied for the full year is set out below.
                                                            Reported                  Proforma after
                                                                                     Capital Return
      Net profit after tax                $m                  32.6                          29.6
      Equity                              $m                   475                           396
      Earnings per share                 cents                 8.3                           7.5
      Return on Equity                    %                    6.9                           7.5

    (1) Reported results based on the accounts for the year ended 25 July 1998.
    (2) Based on a Capital Return of $79 million, an interest cost of 6% fully tax deductible at a tax rate of 36%.
    (3) The EPS decline does not take into account the benefit to shareholders of receiving $0.20 per share
        which the Directors believe puts shareholders in a better position overall.

    The Directors intend that the Company's present dividend per share rate of
    $0.07 per share will be maintained on the reduced capital following the
    Capital Return.
E X P L A N A T O R Y   S T A T E M E N T

           C A P I TA L R E T U R N
           As of the date of this notice, the number of shares and options held by, or by
           persons associated with, each Director of the Company is as follows:

             Director                                 Shares               Options
             Richard Warburton                        32,292                   -
             Michael Ball                             40,000                   -
             Reginald Clairs                         100,000                   -
             John Coates                              10,000                   -
             Geoffrey Heeley                          50,000                   -
             Katie Lahey                               8,712                   -
             Elizabeth Nosworthy                       5,000                   -
             Peter Wilkinson                           5,000              3,000,000
             Robert Wright                             5,381               500,000

           Each of the Directors who hold Ordinary Shares will receive $0.20 per share in
           respect of each Ordinary Share held by that Director on 3 August 1999. The
           effect of the Capital Return on the executive options held by Mr Peter
           Wilkinson and Mr Robert Wright is described below.


           Impact on Employee Share Plans
           Any shares held under the David Jones Employee Share Plan adopted at the
           time of the Company's float will participate in the Capital Return. In
           accordance with the trust deed governing that plan, the trustee will be
           required to apply amounts received in respect of the Capital Return to reduce
           the outstanding balance of loans made to the relevant employees to enable
           them to participate in the plan.
           No shares have yet been issued under the David Jones Limited Deferred
           Employee Share Plan or the David Jones Limited Exempt Employee Share
           Plan approved by shareholders at the 1998 Annual General Meeting.

           Impact on Options Issued to Executives
           As required under the ASX Listing Rules, if the Capital Return is approved, the
           Company will reduce the exercise price of all options issued by the Company
           under executive option schemes by an amount equal to the Capital Return of
           $0.20 per share. This will include the 3,000,000 options and 500,000 options
           held respectively by Mr Peter Wilkinson and Mr Robert Wright.
      E X P L A N A T O R Y   S T A T E M E N T

    TA X I M P L I C AT I O N S F O R S H A R E H O L D E R S
    The tax implications for each shareholder receiving a Capital Return may differ
    depending upon the status of their shareholding. Accordingly, it is
    recommended that each shareholder seek specific tax advice to confirm their
    personal tax position.
    As the Capital Return is being made equally to all shareholders and its
    purpose is to return capital to shareholders which is in excess of the
    Company’s requirements, the Company does not believe that the payment to
    shareholders will be treated as a dividend for tax purposes.

    Investment Shares
    For those shareholders who hold their shares for investment purposes (ie. not
    share traders), the cost base of their shares will be reduced by the amount of
    the Capital Return. Accordingly, the Capital Return should not give rise to a
    capital gain.

    Share Traders
    Share traders who carry on a business of share trading and who hold their
    shares for trading purposes may have different tax consequences as the
    Capital Return may be regarded as proceeds from share trading and therefore
    may be assessable in the year of receipt. It is recommended that those
    shareholders carrying on share trading activities obtain specific advice
    regarding the tax implications of the Capital Return.

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