Notice of Annual Meeting

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Notice is hereby given that the Annual Meeting
of Solution Dynamics Limited is to be held at the
Company’s offices, 18 Canaveral Drive, Albany,
Auckland on 23 October 2019 commencing at
10.30am.
Business
The business of the meeting is:
• Chairman’s address.
• To receive and consider the annual report for
the year ended 30 June 2019, together with the
financial statements and auditor’s report.
Resolutions
Ordinary Business
To consider, and if thought fit, to pass, the following
ordinary resolutions:
1. That the board be authorised to fix the
remuneration of Grant Thornton as the Company’s
auditors. See Explanatory Note 1.
2. To re-elect Mr Elmar Toime who is retiring by
rotation as required by clause 17 of the Company’s
constitution, and being eligible, offers himself
for re-election as director. Please review Elmar’s
biography under Explanatory Note 2.
3. Having been appointed during the year by the
Board and holding office only until the Annual
Meeting, that Andrew (Andy) Preece be elected as
a director. Please review Andy Preece’s biography
under Explanatory Note 3.
4. Having been appointed during the year by the
Board and holding office only until the Annual
Meeting, that Lee Eglinton be elected as a director.
Please review Lee Eglinton’s biography under
Explanatory Note 4.
5. That the directors be authorised to fix the
remuneration of the directors of the Company from
the close of this meeting as per the table shown in
Explanatory Note 5.
Special Business - adoption of new Constitution
6. To consider, and if thought fit, to pass the
following special resolution, in accordance with
section 32(2) of the Companies Act:
a. the Company’s existing constitution is
revoked; and
b. the proposed constitution (as presented to the
Annual Meeting of Shareholders) be adopted
as the constitution of the Company.
General Business
To consider such other business as may lawfully be
raised at the meeting.
Procedural Notes
• Ordinary resolutions: Resolutions 1 to 5 must be
passed by an ordinary resolution of shareholders
(i.e., by a simple majority of the votes of those
shareholders entitled to vote and voting on the
resolution in person or by proxy).
• Special resolution: Resolution 6 must be passed
by a special resolution of shareholders (i.e., by a
majority of 75% of the votes of those shareholders
entitled to vote and voting on the resolution in
person or by proxy).
• Persons entitled to vote: The only persons
entitled to exercise votes at the meeting will
be those who are registered as shareholders at
10.30am on 21 October 2019, and only the shares
registered in those shareholders’ names at that
time will carry a right to vote at the meeting. This
does not limit the right of eligible shareholders
to appoint a proxy (or, if they are a company, a
corporate representative).
• Proxies:
»All shareholders of the Company entitled to
attend and vote at the meeting are entitled to
appoint a proxy to attend and vote for them
instead.
»A proxy need not be a shareholder of the
Company.
»A proxy form is enclosed and to be effective
must be lodged at the registered office of the
Company at least 48 hours before the meeting
is due to begin (i.e. by no later than 10.30am
on 21 October 2019).
»A proxy will vote as directed in the proxy form
or, if voting is left to the proxy’s discretion,
then the proxy will decide how to vote on the
resolutions.
»If you wish to appoint a director, as your proxy,
the Company’s chairman (John McMahon) is
willing to act on your behalf. If the chairman
is appointed as proxy and the voting is left to
his discretion, the chairman intends to vote in
favour of each of the Resolutions.
• Representatives: A body corporate which is
a shareholder may appoint a representative to
attend the Annual Meeting on its behalf in the
same manner as that in which it could appoint a
proxy.
Explanatory Notes
Explanatory notes in respect of the resolutions are set
out overleaf.
By Order of the Board of Directors
Solution Dynamics Limited
2 October 2019
Notice of Annual Meeting

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Explanatory Notes
Explanatory Note 1 – Auditor’s Remuneration:
Grant Thornton is automatically reappointed as the
auditor of the Company under section 207T of the
Companies Act 1993. The Board proposes that,
consistent with past practice, the auditor’s fees
be fixed by the Directors. The Board unanimously
recommends that shareholders vote in favour of
Resolution 1.
Explanatory Note 2 – Re-Election of Director:
Under Listing Rule 2.7.1 of the NZX Listing Rules,
a Director must not hold office (without re-election)
past the third annual meeting following the Director’s
appointment or 3 years, whichever is longer. If a Director
is eligible, they may offer themselves for re-election by
shareholders at the meeting. In this case, Elmar Toime
retires by rotation and, being eligible, offers himself for
re-election by shareholders at the Annual Meeting.
Having had regard to the factors described in the NZX
Corporate Governance Code that may impact director
independence, the Board considers that Mr Elmar
Toime will be an Independent Director.
Director’s Biography
With a lifetime achievement award for leadership in the
postal sector, Elmar Toime is an independent advisor
to the postal sector, based in London. He is a non-
executive director of Qatar Post and chair of Postea
Group, a US technology company. He was on the
supervisory board of Deutsche Post DHL from 2006 to
2016, Executive Deputy Chair of the Royal Mail Group
from 2003 to 2004, and CEO of New Zealand Post
from 1993 to 2003.
Elmar holds qualifications in science and economics
from the University of Melbourne and is a Fellow of the
Royal Society for the Arts, Manufactures, and Science
in the UK and a Fellow of the Institute of Managers and
Leaders in NZ.
Explanatory Note 3 – Re-Election of Director:
Under Listing Rule 2.7.1 of the NZX Listing Rules, a
Director appointed by the Board must not hold office
(without re-election) past the next annual meeting
following the Director’s appointment. If a Director is
eligible, they may offer themselves for re-election
by shareholders at the meeting. In this case, the
appointment of Andy Preece by the Board was
announced on 2 May 2019 and, being eligible, offers
himself for re-election by shareholders at the Annual
Meeting.
Having had regard to the factors described in the NZX
Corporate Governance Code that may impact director
independence, the Board considers that Andy Preece
will continue to be an Independent Director.
Director’s Biography
Andy’s executive roles have included Managing
Director and Chief Executive Officer of ASX-Listed
Spicers, a multinational merchant group offering
products and services to the printing, signage, visual
display, graphics and digital industries. He has multi-
national experience over 25 years in manufacturing,
merchanting and wholesaling, originating in the UK
packaging industry.
Andy was previously a non-Executive Director of
ASX-listed Spicers and he is currently Chairman of
Yellow Holdings Ltd and a partner in an equity fund
that is the major shareholder in a portfolio of import
and distribution businesses in New Zealand. Andy
has a proven record of turning around businesses
and delivering sustainable shareholder returns, along
with experience managing acquisition and divestment
activities globally.
Andy is the chair of the Company’s Audit & Risk
Committee.
Explanatory Note 4 – Re-Election of Director:
Under Listing Rule 2.7.1 of the NZX Listing Rules, a
Director appointed by the Board must not hold office
(without re-election) past the next annual meeting
following the Director’s appointment. If a Director is
eligible, they may offer themselves for re-election
by shareholders at the meeting. In this case, the
appointment of Lee Eglinton by the Board was
announced on 29 May 2019 and, being eligible, offers
herself for re-election by shareholders at the Annual
Meeting.
Having had regard to the factors described in the NZX
Corporate Governance Code that may impact director
independence, the Board considers that Lee Eglinton
will continue to be an Independent Director.
Director’s Biography
Lee’s executive roles have included General Manager
Australia/NZ and NZ Country Manager of an IT
services and consulting business, where she was
employed for seven years. Prior to that she spent
eight years at IBM NZ in a range of roles including
Consulting Services, the company’s CRM practice, and
business analytics and optimisation. Lee has a broad
range of experience across the technology, consumer
electronics and telecommunications sectors. Lee is
currently a non-Executive Director of several private
companies including Homecare Medical (New Zealand)
Limited Partnership and HOBANZ. Lee’s experience
includes strategy and business transformation, sales
performance and sales management, and applying
technology to business and market challenges. She
has particular focus on organisational culture and
building high performing teams.
Lee is a member of the Company’s Audit & Risk
Committee.
Explanatory Note 5 – Directors’ fees:
The proposed resolution is to change the structure
of directors’ fees from a total Director fee pool cap
(currently $140,000 per annum – as set in 2015) to
a per Director rate. This allows full transparency of
fees and enables the Board to proactively advance
succession planning. The Board comprises four
Independent Directors, as well as the Chairman (not
Independent) and the Managing Director. Given the
transition of the Company to the NZX Main Board
and the need to obtain an appropriate mix of skills
and knowledge, two new Independent Directors
were appointed by the Board during the year. In
setting the proposed rates, the Board commissioned
an independent benchmarking review of both the
structure of payments and the current level of
Directors’ fees by Ernst & Young. A summary of Ernst
& Young’s advice, together with their attestation of
independence, is available on the Company’s website

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at solutiondynamics.com/investor-centre/ under Board
Governance.
The proposed structure and rates are as follows:
Position Current Proposed
Chairman $45,000 $60,000
Independent Director $25,000 $40,000
Audit & Risk Committee Chair $nil $7,500
Hourly rates for abnormal/ Previously $250/hour
particularly time intensive $nil
projects or transactions
outside the scope of
typical Board work
(all amounts exclusive of GST – if any)
The proposed structure and rates are in line with Ernst
& Young’s recommendations. The changes result in
total Directors’ fees (not including ad hoc fees) for
the current Directors of $227,500 per annum. This
represents an overall increase of $87,500 or 62.5% as
compared to the current fee pool, which was approved
by shareholders in 2015.
A significant portion of the increase is the result of
aligning chairman’s remuneration to the median for
the comparator group (by revenue) of $60,000 to
reflect the additional responsibilities and workload
of the chair and increasing the remuneration of non-
executive directors to $40,000. In the latter case, this
increase was based on both relativity to the median
for comparable companies and maintaining a typical
market ratio between the remuneration of the chairman
and that of other non-executive directors of 1.5 to 1.6
times. In addition, it was recommended that the Chair
of the Audit and Risk Committee be paid an additional
fee of $7,500, which equates to 75% of the median of
the market data sample (in this case of 3 companies –
rather than the 11 used for the comparators of the chair
and non-executive director remuneration).
If Resolution 5 is approved by shareholders then this
will replace the current total Directors’ fee pool cap
and the set rates above will apply from the close
of this meeting. Going forward the rates would be
reviewed every second year by the Board in advance
of the Annual Meeting with any adjustment put to
shareholders for approval.
Voting Restrictions:
In accordance with NZX Listing Rule 2.11.1, the fees
payable to Directors must be approved by an ordinary
resolution of the shareholders. In accordance with
NZX Listing Rule 6.3.1, no Director who is intended
to receive payment of these fees or their Associated
Persons (as defined under the NZX Listing Rules) can
vote on any such resolution, unless casting votes under
an expressly directed proxy of a person who is not
disqualified from voting.
Explanatory Note 6 – Adoption of a new
Constitution:
Introduction
The Board has previously advised shareholders of the
Company’s migration from the NZX Limited’s NZAX
Board to the NZX Main Board equity security market.
The Company completed the migration to the Main
Board on 28 May 2019.
One of impacts of migration to the Main Board is that,
from the date of migration, the Company is required to
comply with the new Main Board Listing Rules, which
came into effect on 1 January 2019. Whilst that has
meant there is a need to update some governance
policies and procedures, NZX Regulation has granted
a series of class waivers that assist the process of
migration by NZAX Issuers to the Main Board and
which include allowing migrating NZAX issuers to
postpone the process of updating the constitution until
the next annual meeting (or a special meeting – if held
earlier).
Constitution
The Company’s existing constitution does not meet all
the requirements of the NZX Listing Rules. As a result,
the Company is required to adopt a constitution that
complies with the NZX Listing Rules. To adopt a new
constitution, a special resolution of shareholders is
required under section 32 of the Companies Act. The
special resolution required is a resolution approved
by 75% or more of the eligible votes cast on the
resolution.
Instead of proposing a long list of amendments to
the existing constitution, the Board has chosen to
present to shareholders for adoption a new constitution
incorporating the proposed amendments (the proposed
constitution).
To assist shareholders, the key changes to the existing
constitution are highlighted below and a clean copy
of the proposed constitution for adoption at the
meeting is available on the Company’s website: http://
www.solutiondynamics.com. In addition, copies of
the clean proposed constitution are available from
the Company (telephone (09) 970 7700, email info@
solutiondynamics.com, and postal address of PO Box
301-248, Albany, Auckland 0752 (attention Chris Veale,
Chief Financial Officer)).
The Board is also taking the opportunity to improve
and modernise aspects of the existing constitution
(for example, by putting the meeting procedures in
schedules) which do not relate directly to the proposed
NZX migration to the Main Board.
Listing Rules
The proposed constitution incorporates by reference
(instead of in full) a number of provisions from the
Listing Rules.
A copy of the Main Board Listing Rules (1 January
2019) is on NZX’s website (www.nzx.com).
Scope of Explanatory Note
This Explanatory Note describes some of the provisions
of the proposed constitution which are not in the
existing constitution. It does so at a high level only,
and the Board recommends to shareholders that they
review the proposed constitution and the NZX Listing
Rules to understand fully the effect of the proposed
constitution. In particular, this Explanatory Note is not
intended to be a substitute for a review of the proposed
constitution and NZX Listing Rules.
Key Changes
• Clause 1.1: Definitions: The definitions section
has been updated to include additional definitions
to assist in the interpretation of the constitution and
existing definitions have been revised to align with
the Listing Rules.

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• Clause 1.4: Incorporation by reference. In keeping
with current constitutions, an element of future of
proofing has been added to deal with changes to
the Listing Rules. As a result, for so long as the
Company is listed on the NZX, the constitution is
deemed to incorporate all provisions of the NZX
Listing Rules required under the NZX Listing Rules
to be contained or incorporated by reference
as those provisions apply from time to time and
as if those provisions were set out in full in the
constitution itself.
• Clause 1.7: Impact of changes to the Listing Rules.
For clarity, if the NZX Listing Rules are changed
so that anything done by the Company which was
formerly prohibited by the NZX Listing Rules, is
subsequently allowed or required, it is deemed
to be authorised with effect from the date of the
change.
• Clause 1.13: Ceasing to be listed. For clarity,
clauses 1.2j and 1.4 to 1.10 apply only for so long
as the Company is listed on the NZX.
• Clause 3.6: Financial assistance. For clarity, the
provision by the Company of financial assistance
for the purpose of, or in connection with, the
acquisition of any its Shares is prohibited - unless
it is in accordance with the provisions of the
Companies Act and the NZX Listing Rules.
• Clause 3.7: Bonus issues. For clarity, the Board
is granted a specific power to issue new Shares
(or pay up amounts unpaid on existing Shares) by
means of a bonus issue.
• Clause 6: Distributions: This clause has been
updated and clarified, including by clarifying the
issue of dividends payable in respect of Shares
which are not fully paid up.
• Clause 8.2c and d: Electronic transfers. As another
example of future-proofing, scope is provided for
share transfers by any approved system of transfer
by electronic means which operates in relation to
trading in securities on any other stock exchange
on which the Company’s Shares are traded and
in accordance with any other system of transfer
approved by legislation.
• Clause 8.7 to 8.12: Sale of less than a Minimum
Holding: The notice of refusal to register in respect
of sales that would result in the transferee having
less than a Minimum Holding shall advise of the
Board’s intention to sell those Shares unless the
Shareholder acquires further Shares (so as to
ensure that they have at least a Minimum Holding.
• Clause 8.14: Transfer of Securities other than
Shares. For clarity, clause 8 also applies to
transfers of Securities of the Company other than
Shares.
• Clause 10: Proceedings at meetings of
Shareholders and Interest Groups. As noted above,
the procedural requirements for meetings have
been shifted into Schedules (for ease of reference).
Schedule 1 governs meetings of Shareholders. In
addition, Schedule 1 shall also govern meetings of
any Interest Group (where required to be held by
the Companies Act, the NZX Listing Rules, or the
constitution). Note that a quorum for an Interest
Group meeting shall be the members of the Interest
Group holding 5% or more of the voting rights
entitled to be exercised on any of the questions to
be considered at a meeting of the Interest Group in
question.
• Clause 12: Appointment, rotation and removal
of Directors: The NZX Listing Rules set out
requirements in relation to the composition of
the Board, which have been incorporated into
the proposed constitution. For example, the
NZX Listing Rules require a minimum of two
independent Directors if there are up to 8 Directors,
or if there are 8 Directors (the maximum currently
provided for in this constitution), three independent
Directors (or one-third rounded up to the nearest
whole number). In accordance with the NZX Listing
Rules:
»each director’s appointment must be voted on
individually; and
»no director shall hold office longer than 3 years
without retiring and offering himself or herself
for re-election.
Additionally, to avoid any uncertainty, clause 12.12
clarifies the timing of retirement and appointment
of a director.
Note also that the new NZX Listing Rules
require that the Company establish an Audit
Committee (and provide for the composition and
responsibilities of the Audit Committee). This
change is addressed in clause 12.13.
• Clause 13: Executive Director: In a significant
change, the new NZX Listing Rules do not allow
an Executive Director (such as Managing Director)
to be exempted from rotation – by being subject
to a 5-year term. As a result, clause 13.2 provides
that an Executive Director is subject to the same
provisions as to resignation and removal as the
other Directors of the Company.
• Clause 14: Alternate Directors: This clause
has been updated and a handful of points of
clarification added (including by addressing
such administrative matters as notices of Board
meetings, remuneration and expenses, cessation
of appointment and rights and powers).
• Clause 15: Directors’ remuneration: This clause
has been updated and simplified to incorporate
by reference the relevant NZX Listing Rules and
provisions of the Companies Act in respect of
directors’ remuneration. The provisions around
“special” remuneration have been brought in line
with the NZX Listing Rules.
• Clause 16: Proceedings of the Board. As noted
above, the procedural requirements for meetings
have been shifted into Schedules (for ease of
reference). The Schedule 2 governs proceedings of
the Board.
• Clause 18: Notices: Clause 18 has been simplified,
and updated to include communication by
electronic mail message. Clause 18.2 has been
inserted to clarify how notice is provided to a
security holder who does not have a known
address within New Zealand.

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• Schedule 1 - Proceedings at Meetings of Shareholders: As noted above, the procedural requirements
for meetings have been shifted into Schedules (for ease of reference). Schedule 1 largely consolidates, with
some updating, the procedural requirements for meetings of Shareholders that are contained in the existing
constitution.
Those provisions to which particular attention is drawn are:
Clause 4.2 – Numbers
for quorum
The amended quorum requirement (three shareholders) for meetings of shareholders is
designed to reflect current practice by NZX Main Board listed companies. This is not a
material change to the threshold required by the existing constitution.
Clause 5.3 – Evidence
that resolution carried
For clarity, a declaration by the chairperson that a resolution is carried – is conclusive
evidence of that fact unless a poll is demanded.
Clauses 5.4 – 5.13 - Polls
Again, for clarity, much more detail has been added in relation to the conduct of polls,
specifically providing for:
• who may demand and poll (and when);
• more detail around voting and counting of votes;
• scrutineers; and
• declaration of the result.
Clause 6 - Proxies
Again, for clarity, additional detail has been added in relation to handling or proxies –
including a specific requirement to include the proxy form with the notice of meeting.
Clause 9 – Shareholder
proposals
A specific provision has been added to recognise the scope for Shareholder proposals –
in accordance with the Companies Act.
• Schedule 2 - Proceedings of the Board: As noted above, the procedural requirements for meetings have
been shifted into Schedules (for ease of reference). Schedule 2 consolidates, and modernises, the procedural
requirements for Board meetings that are contained in the existing constitution.
Those provisions to which particular attention is drawn are:
Clause 1 – Chairperson
• A Director may not simultaneously hold the positions of Chief Executive and
chairperson of the Board. This has been inserted to ensure that a non-executive
director is the chairperson of the Board.
• The chairperson holds that office until he or she dies or resigns or the Directors
elect a chairperson in his or her place.
Clause 2 – Notice of
Meeting
• A number of (mostly) minor clarifications have been added – along with the scope
to give notice of a Board meeting by telephone (as well as electronically).
• If a Director is resident outside New Zealand (or is temporarily absent from New
Zealand) and has appointed an Alternate Director – then notice must be given to
the Alternate Director.
Clause 4 – Quorum
An Alternate Director present at a meeting may be included for the purpose of
establishing a quorum.
Clause 5 – Voting
For clarity:
• In the case of an equality of votes the chairperson will not have a casting vote
except where only two Directors form a quorum and are present at the meeting.
• In accordance with the NZX Listing Rules an “interested” Director shall not:
»vote on a Board resolution in respect of that matter; nor
»be included among the quorum in considering that matter,
»except that a Director may vote in respect of and be counted in the quorum -
for a matter in which that Director is interested if the matter is one in respect of
which, pursuant to an express provision of the Companies Act, Directors are
required to sign a certificate or one which relates to the grant of an indemnity
under the Companies Act.
• An Alternate Director may attend and Vote at meetings of the Board in accordance
with and subject to clause 14 of the constitution if the Director that has appointed
the Alternate Director is absent from the meeting.
Clause 6 – Written
resolution
This has been updated to enable a majority of directors to vote on a resolution in
writing, which has the practical benefit of not requiring every director to sign each
written resolution. For example, should a director be travelling or otherwise unavailable,
the resolution may still be passed should a majority agree.

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NZX Approval
The proposed new constitution has been the subject
of a solicitor’s opinion in accordance with the Listing
Rules.
Important Information: General note applicable to all
resolutions requiring votes at the Annual Meeting.
Pursuant to section 125 of the Companies Act 1993,
the Board has determined that, for the purposes of
voting at the Annual Meeting, only those registered
shareholders of the Company as at 10.30am on
Monday, 21 October 2019, being a day not more than
20 working days before the meeting, shall be entitled to
exercise the right to vote at the meeting either in person
or by appointing a proxy to attend and vote instead of
that shareholder.
Voting will be 1 share: 1 vote and shall be conducted by
way of a poll.
You may vote:
1. By Attending: You should bring the Voting/Proxy
Form (included with this Notice) with you since
voting shall be by way of a poll.
2. By Proxy. If you do not plan to attend, you can
appoint a proxy to vote for you. A Voting/Proxy
Form is included with this Notice of Annual Meeting
which allows you to vote either for, against, or
abstain from, the resolutions notified in this Notice
of Meeting. Any shareholder of the Company
who is entitled to attend and vote at the Annual
Meeting, is entitled to appoint a proxy to attend
the meeting and vote on his or her behalf. A proxy
need not be a shareholder of the Company. If you
appoint a proxy, you may either direct your proxy
how to vote for you, or you may give the proxy
discretion to vote as he or she sees fit. If you wish
to give your proxy discretion then you should make
the appropriate election on the Proxy Form, to
grant your proxy that discretion.
Except as discussed below, you will be deemed to
have given your proxy discretion if you do not make
an election in relation to any of the resolutions. The
Chairman of the meeting is willing to act as proxy
for any shareholder who appoints him or her for that
purpose. The Chairman and any Directors appointed as
proxy will vote any discretionary proxies in favour of the
resolutions.
A proxy form is enclosed with this Notice of Meeting. If
you wish to vote by proxy you must complete the form
and return it to the registered office of the Company, so
as to ensure that it is received by 10.30am on Monday,
21 October 2019. Details of where to return the
completed proxy form are set out on the Proxy Form.