SDL
12/12/2012 13:55
ADDRESS
REL: 1355 HRS Solution Dynamics Limited
ADDRESS: SDL: SDL Annual Meeting - Chairmans Address
Shareholders, ladies and gentlemen.
Welcome to the 2012 Annual Meeting of Solution Dynamics Limited.
I'm your chairman, Colin Giffney.
The board secretary has confirmed to me that the notice of meeting has been
sent in good time to all shareholders recorded in the register.
As we have present in person and by proxy or representative a quorum, I
declare the meeting to be properly constituted and open for business.
I'd now like to present to you those at the top table.
On my right are:
Nelson Siva our CEO
Julian Beavis and Mike Smith & Chris Veale
Also present today are;
Senior managers of Solution Dynamics and
our company Solicitors, Russell McVeagh.
Are there any apologies for the meeting?
Apologies were received from Scott Richardson and Ken Perrin.
12 shareholders have appointed proxies for the purposes of the meeting in
respect of 5,563,275 shares. Most of these proxies have been directed.
As Chairman of the meeting, I hold 7 proxies carrying 3,902,528 votes.
The directors have approved the minutes for the last meeting as true and
correct. They are available if any shareholder wishes to see them.
The Notice of Meeting was sent to shareholders. The business of the meeting
is
A. To receive and consider the annual report for the year ended 30 June 2012,
together with financial statements and auditors report.
B. To consider and, if thought fit, to pass the following ordinary
resolutions.
1. That the board be authorized to fix the auditors remuneration.
2. That Mr. John McMahon be elected as director.
3. That Mr. Dave Thornber be elected as director.
4. That Mr. Aleksander Zivaljievic be elected as director.
In moving that we receive the Annual Report, I will make a few comments.
Chairman's address
Your directors made complete disclosure in the Annual Report this year. This
was because we were subject to corporate actions that may have required
shareholders to make decisions about their shares and it was important that
shareholders knew the current state of play. I do not intend to repeat those
statements.
In retrospect, 2012's fast start may have lulled us into a feeling that we
were going to succeed quickly with our software strategy. At this time last
year, pipelines and prospects were very encouraging. However we scrambled at
half year to meet our budgets and slowly, as the second half unfolded, it
became clear that a number of the prospects were not going to convert. The
brutal fact is that our execution has not worked within our expected
timeline. As a result a number of actions have occurred.
Late in June, we received an unsolicited approach regarding the possible
acquisition of our Service Division. Those discussions dragged on and then
other parties entered the fray further distracting our focus. Despite an
intense effort none of the subsequent discussions, lead to any agreement
being reached. Bluntly it is good to be able to report to you that all those
discussions have now ceased. They were very distracting for both management
and staff. They created uncertainties that are always very hard to manage.
They caused us to maintain expenses and delayed a number of decisions to our
cost.
As previously advised we pursued the strategy of funding software development
from the cash flow of the mail house business. When the software sales didn't
come through at the expected level, we carried more people than we needed.
We were delayed addressing this while we dealt with the corporate intrusions
but now free of them our instructions to management have been quite simple:
o Drive the business for profitability - remove costs.
o Strive to achieve transactions in the software space to reduce costs and
focus activities.
o Aim to eliminate debt as quickly as possible, hopefully within a year.
We have now started that process.
Short term we have to consolidate the balance sheet and remove cost. The
main risk in the software business has been the dependency on license sales.
We have to take this risk out of the business - hence the demand to align
costs in software with recurring revenue.
If we can eliminate the debt, we should add 4- 5 cents to shareholder value.
Every $100,000 we can increase profit should increase shareholder value by
another 2 to 4 cents. The initiative of the senior management team of 2
years or so ago to see what could be done with software is complete for the
time being. The aim now is to consolidate what we have, re-capture
shareholder value and then reconsider the new software strategy.
'Services' was our traditional 'mail house' activity. Over the past few
years Services has transitioned to provide increasingly technology driven
solutions. In our Services business, we embrace technology and have led the
move to more flexible solutions in colour print, web, email etc. Our
technology base gives us the competitive position in the market. The
challenge is the ability to secure growth in a market that is shrinking and
one with enormous pressure on margins.
Last year I spoke about the lumpiness management have to contend with month
by month in software. While our services business has natural seasons that
we are mostly able to predict it is extremely difficult to predict software
license sales. The directors have sought a budget for software where costs
are aligned to recurring revenues minimizing the risk to the company.
By the end of this month, we will have a better idea of how the realignment
is proceeding and at the interim report, directors will be able to give a
better idea of progress.
Notwithstanding, at this stage for the full 2012-year management believe we
are on track to lift profit (EBITDA) from $126,000 to approximately $600,000,
net of restructuring costs.
Annual Report
I have moved adoption of the annual report.
Are there any questions?
I have moved that the Annual Report of SOLUTION DYNAMICS LIMITED for the
financial year ended 3O June 2011 be received. Do I have a seconder? The
motion was seconded by Mr John McMahon and passed on a show of hands.
Auditors
I would like to move that Grant Thornton be appointed auditor of the Company
for the ensuing year and that the Board of the Company be authorised to fix
the auditor's remuneration for the ensuing year.
The motion was passed by a poll, see below.
Directors
I am standing down as a director of the company. Mike Smith, Nelson Siva and
Julian Beavis continue as directors. We have three shareholders standing to
be elected as a Director of Solution Dynamics Limited. Constitutionally we
have room for all directors on the board. In practice I will suggest to you
that more than 4 directors on the board of this tiny company makes no sense.
To achieve that you would have to vote for one of the three directors and
against the others aspirants.
I am adopting the following proceedure.
Each person standing for election will have 3 minutes to present to the
meeting. At the end I will invite questions to any of the candidates. I am
then going to invoke my power as chairman to seek a poll to vote on the
candidates.
While the poll is being counted we will adjourn for refreshments. Once
counted we will reconvene the meeting, announce the results and close the
meeting. I will call the aspirant directors in the order they are recorded
in the notice of meeting.
1) Mr. John McMahon
2) Mr. Dave Thornber
3) Mr. Aleksandar Zivaljievic
The meeting was reconvened and based on total votes cast Mr John McMahon was
elected as a director. Neither Mr Dave Thornber or Mr Aleksandar Zivaljievic
were elected to the board.
In a meeting of directors held immediately following the Annual Meeting, Mr
John McMahon was elected as Chairman by the Board.
Questions?
Dave Thornber and others raised questions on the future direction of the
company. The Chairman noted the on-going commitment to the Software
business. The implementation of this strategy would be a matter for the
board to resolve.
Any Other Business
I declare the meeting closed. Thank you for your attendance.
End CA:00231017 For:SDL Type:ADDRESS Time:2012-12-12 13:55:18
