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Newspaper report I have given a newspaper report example from a news article from a previous year below. Note that your article must bear a 2019 date. Sometimes in summarising the facts you may need to look to earlier news reports or other sources for the background to the specific issue currently being reported. That is fine. Sometimes other legal issues will be involved. You are welcome to discuss these but ensure that the main part of your report has the corporations law issues as the focus. Sometimes there will be a range of things which could be discussed. There is more than one way that a commentary or analysis might be approached and students who choose the same article might legitimately focus their discussion on different aspects. Sources need to be acknowledged in accordance with the Australian Guide to Legal Citation but I am not expecting to see a wide variety of sources. Refer to 6.5 of AGLC on how to cite newspapers. While that requires you to cite the hard copy version where one exists I am happy for you to cite the online version even if a hard copy equivalent exists.

Fairfax buyback surprises as profit beats forecasts Max Mason The Canberra Times, 19 February 2015 http://www.canberratimes.com.au/business/media-and-marketing/fairfax-buybacksurprises-as-profit-beats-forecasts-20150219-13irgk.html Fairfax media has announced an on market buy-back of up to 121 million shares about 5 per cent of its stock over the next 12 months.1 Employment advertising was under severe pressure but digital advertising revenue grew. The property website Domain reported a jump in earnings but the CEO, Mr Hywood said there was no plan to split the Domain business from Fairfax and list it on the ASX. In December Fairfax announced a merger with Macquarie Radio which is expected to be completed in March. An interim dividend of 2 cents will be paid on March 18. The article refers to analyst surprise at the move on the basis that the stock doesn’t look cheap and it signals a lack of growth opportunities. The CEO Greg Hywood said there was room to reward shareholders while having enough cash and debt facility for mergers and acquisition opportunities. Traditionally companies were prohibited from purchasing their own shares because it offends against the principle of capital maintenance. The principle of capital maintenance is to some extent a counterweight to the principle of limited liability. It is designed to 1

Mason M, Fairfax buyback surprises as profit beats forecasts, The Canberra Times (online), 19 February 2015,< http://www.canberratimes.com.au/business/media-andmarketing/fairfax-buyback-surprises-as-profit-beats-forecasts-20150219-13irgk.html>

ensure that the company’s capital should be maintained for the benefit of creditors. It recognises that capital might be lost in the course of trading. Little practical protection is offered in the case of companies which have a nominal paid up capital. The prohibition against companies buying their own shares still exists in the legislation in section 257A Corporations Act 2001 (Cth) so how does Fairfax come to be announcing a buy-back of its own shares? The legislation allows buy-backs in certain circumstances, chiefly where the buy-back does not materially prejudice the company’s ability to pay its creditors. The principle of capital maintenance is thereby not offended or at least the buy-back is consistent with the aim of creditor protection. The two most common types of buy-backs are on-market which is the type being used by Fairfax and an equal access scheme. In both schemes, shareholders have an opportunity to participate but the mechanism is different. In the on-market buy-back the company’s broker enters the market and offers to buy shares at a particular price. The protection which is built in to protect the interests of creditors is that there is a limit on the amount of shares which can be bought back. 2It is known as the 10/12 rule. A company cannot buy-back more than 10% of its shares in a 12 month period. If the proposal would exceed that limit it needs to be approved by an ordinary resolution of members.3 Fairfax’s proposal is under the 10/12 limit. An alternative to a buy-back is a reduction of capital provided for in section 256B Corporations Act 2001 (Cth). The key difference from the shareholder’s point of view is that with a buy-back the shareholder has the choice whether to accept the offer or not. If a reduction of capital is approved by shareholders then all shareholders are bound and have no choice, whether they voted for the reduction of capital or not. The article also refers to payment of an interim dividend. The rules about dividends also incorporate protections designed to protect the interests of creditors. Under section 254T Corporations Act 2001 (Cth) directors may declare and pay a dividend if there is an excess of assets over liabilities, it is fair and reasonable and there is no material prejudice to the ability of the company to pay its creditors. This provision is relatively recent, replacing the requirements that dividends be paid out of profit.

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S 257A Corporations Act 2001 (Cth). S 257C Corporations Act 2001 (Cth).

References Corporations Act 2001 (Cth)...