Attachments: 1. Supporting Attachment 2. MAPS Group Ltd correspondence, notice of meeting and State Government approval.

Management report to Council Agenda item 6.5 MAPS Group Ltd: Proposed change to Memorandum of Articles of Association Council Presenter: Phu Nguyen, Chief Financial Officer 24 November 2015

Purpose and background

1. The purpose of this report is to advise Council of the Company’s request to change the Memorandum of Articles of Association by resolution at the Extraordinary General Meeting to be held 25 November 2015.

2. The Municipal Authorities Purchasing Scheme (MAPS) was formed in 1985 when 14 inner metropolitan local governments, using infrastructure provided by the Council, co-operated to organise purchasing contracts for commonly used goods in pursuit of high quality products at lower prices. The Council administered the scheme, providing resources including staff and a central store facility.

3. In March 1993, MAPS Group Ltd (the Company) acquired the MAPS business from Council for $350,000 represented by the issue to Council of 250,000 fully paid ordinary shares and the payment of $100,000. The Company has issued a total of 396,862 fully paid ordinary shares. Council holds 250,000 shares in the Company, being 63 per cent of the issued capital of the Company. While Council is the majority shareholder it does not have a controlling vote.

Key issues

4. The Company has updated its Memorandum of Articles of Association to enable it to expand its service offering to both the private and public sectors. The Company advises this will enable it to achieve greater financial strength and stability through diversifying its revenue streams, and improve negotiating power to achieve greater service levels and returns to members.

5. The changes have been approved by the State Treasurer and the Minister for Local Government.

Recommendation from management

6. That Council approves the changes to the Memorandum of Articles of Association and authorises management to vote in favour of the special resolution at the Extraordinary General Meeting to be held on 25 November 2015.

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Attachment 1 Agenda item 6.5

Council 24 November 2015

1

Supporting Attachment

Legal

1. The report is for noting only and no direct legal implications arise from the recommendation made from management.

Finance

2. The Company paid a dividend of 21.5 cents for the 2014 financial year. The City of Melbourne received dividend payment of $53,750 on 12 December 2014.

3. The Company has advised that it has received an unqualified audit opinion for 2013–14.

Conflict of interest

4. The Deputy Lord Mayor is Council’s representative on the Company board.

5. No member of Council staff, or other person engaged under a contract, involved in advising on or preparing this report has declared a direct or indirect interest in relation to the matter of the report.

Stakeholder consultation

6. Consultation with the Company’s management was undertaken in preparation of this report.

Environmental sustainability

7. There is no significant impact on environmental sustainability associated with the recommendation in this report.

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• • •

• • •

• • Celebrating rhirty Years

Procurement Australia

19th October, 2015

Mr Ben Rimmer Chief Executive Officer Melbourne City Council GPO Box 1603 MELBOURNE VIC 3001

Dear Ben,

Strategic changes to Procurement Australia's Memorandum of Articles of Association (MAA) approved by the Victorian Government

The Minister for Local Government, the Hon. Natalie Hutchins MP has approved strategic changes to Procurement Australia's MAA; these were also subsequently approved by the Treasurer.

The approved update to our MAA will enable us to offer our services to both private and public sector organisations around Australia, giving us a broader market within which to operate.

This change will bring financial and other benefits for Procurement Australia members and shareholders alike. These include greater financial strength and stability through diversifying our revenue streams; larger contract sizes leading to better negotiating power and lower contracted prices; and a strengthening and deepening of the our internal skill base which in turn will deliver a greater service level to all our members.

We can now put into place the outcomes of our strategic planning process and execute our 2013-2018 Strategic Plan fully, taking up expansion opportunities beyond the government sector and our traditional geographic reach. By targeting the commercial sector within our existing markets and geographies, and expanding into new territories such as Queensland and Western Australia, we will realise identified growth opportunities.

In seeking Government approval, we built a strong business case, identifying and setting incremental steps to establish the right resourcing levels and refine our capability to achieve sustainable and profitable expansion.

The key areas we are focusing on are the range of contract categories we offer, our contract terms and conditions, our marketing and sales team resources, and our channel partners.

/oe Arena ' Chief Executive Officer

MAPS Group Limited t/a Procurement Australia ABN 45 058 335 363 enquiries@paltd.com.au www.procurementaustralia.com.au

Hawthorn East VIC 3123 Tel. 03 9810 8600 Fax 03 9810 8699

Head Office Melbourne 447 Auburn Road

Duality ISO 9001

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Procurement • Australia

AGENDA EXTRAORDINARY GENERAL MEETING MAPS Group Ltd - Trading as Procurement Australia

25th November 2015 for 10:00 am, at

Arts Centre Melbourne Level 7, Members Dining Lounge 100 St. Kilda Road, Melbourne, VIC 3004

(1) Welcome / Apologies

(2) Proxies

(3) Special Resolution for Member Approval

That the Members consider and if thought fit, approve by way of a special resolution, the following amendments to the Memorandum and Articles of Association of the Company:

(a) clause 1.2(a) of the Articles of Association is repealed and replaced with the following definition of 'person':

"the word person includes on individual, corporation, trustee of a validly subsisting trust estate, body corporate, partnership, an unincorporated association or a Public Authority (as constituted under an Act of Parliament of a State, Territory or the Commonwealth of Australia) and whether operating on a for-profit or a not-for-profit basis and whether or not a resident of Australia;"

(b) to insert in the Memorandum of Association the following new paragraph 4(d) as a further object of the Company after paragraph 4(c):

"(d) to undertake any of the above activities referred to in paragraphs 4(a), (b) and (c) for a person as defined in clause 1.2(a) of the Articles of Association."

(4) Explanation of Changes to Constitution

The Board has received Ministerial approval from Tim Pallas, Treasurer of Victoria dated 1 September 2015 and from Natalie Hutchins, Minister for Local Government, Victorian Government dated 30 July 2015 for an amendment to be made to the Memorandum and Articles of Association of the Company enabling the Company to provide its services to 'for profit' entities in the private sector.

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The amendments do not affect the primary purpose and objects of the Company which are to provide its services to its Members or other "approved persons" (as defined in Article 1.7).

The amendments firstly broaden the current definition of 'person' contained in Article 1.2(a) to include by way of example and without limitation other types of legal persons recognised at law and whether those persons operate on a 'for profit' or 'not for profit' basis and whether or not resident or foreign non-residents of Australia.

The amendments secondly add in a new paragraph 4(d) to the objects of the Company contained in the Memorandum of Association which will enable the Company to undertake any of the activities described in existing paragraphs 4(a), (b) and (c) for or on behalf of a 'person' as defined in Article 1.2(a). .

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LOCAL GOVERNMENT ACT 1989 SECTION 193

MAPS GROUP LIMITED - APPROVAL OF ARRANGEMENTS

I, Tim Pallas MP, Treasurer and I, Natalie Hutchins MP, Minister for Local Government, acting in accordance with the Approval granted in 1992 for the formation and acquisition of MAPS Group Limited ('Procurement Australia^, hereby approve Procurement Australia to change its Memorandum and Articles of Association to enable it, in addition to the current objects for which the Company is established, to carry out these objects for the purpose of private sector entities.

This approval does not and cannot represent a guarantee or acceptance of responsibility by the State Government in relation to liabilities incurred, or in relation to any aspects of the municipal enterprises or its future funding.

Hon Tim Pallas MP Treasurer I /°\l 2015

Hon Natalie Hutchins MP Minister for Local Government 3Ql 7/ 2015

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