Ann: MEETING: JWI: Annual Meeting - Chairman'

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• Summary: MEETING: JWI: Annual Meeting - Chairman's and Founding Director Addresses
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					JWI
24/10/2013 14:17
MEETING

REL: 1417 HRS Just Water International Limited

MEETING: JWI: Annual Meeting - Chairman's and Founding Director Addresses

Following are the Chairman's and Founding Director's addresses from the
Annual Meeting of Just Water International Ltd held 11.00am Thursday 24th
October 2013:

Chairman's Address:
Good Morning.  I am Paul Connell, Chairman of the Board and I'd like to
welcome you to this, the tenth Annual Meeting of Just Water International
Limited.

In a moment, I will formally open the meeting.

I will then move the receipt of the company's Annual Report, followed by a
few remarks.

After that, our founding director, Tony Falkenstein, will make some comments,
and there will be a full opportunity for your questions and comments.

We will then proceed with the other two resolutions, which were notified in
the formal Notice of Meeting.

I will then formally close the meeting and invite you to join the directors
and other Just Water personnel on an informal basis over refreshments.

It's now my pleasure formally to declare open this 10th Annual Meeting of
Just Water International Limited.

I confirm that a quorum is present and that the meeting is duly constituted.
The notice of meeting has been circulated to all shareholders and I propose
to take it as read.

Are there any apologies?  I confirm that the company has received apologies
from Colin Giffney. There are no other apologies.

Let me introduce my colleagues at the table, from left to right -

o Firstly, Simone Iles, who is one of the two independent directors on the
board; Simone is also Chairperson of the Remuneration Committee;

o Ian Malcolm, a non-executive director and Chairman of the Audit Committee,
who is retiring at this meeting;

o Tony Falkenstein, the Company's Founder;

o Brian Rosenberg, who is the only nomination for the director's position,
being made vacant by the retirement of Ian Malcolm. Brian will be saying a
few words about himself later on in the meeting;

o Ian Ormiston, who commenced as  Chief Executive Officer last month;

o And Eldon Roberts, our Chief Financial Officer.

We also have in the front row:
o Peter Molloy, who is General Manager of our Australian operation,
Clearwater Filter Systems.
o Jay Harraway, the General Manager of Just Water New Zealand.
o We also have other staff here from both Clearwater Filter Systems and Just
Water.

I record that proxies have been received and are held by myself and other
named persons totalling 9,966,078 shares representing 11.14 % of the shares
on issue.

The Minutes of the previous Annual Meeting of Just Water International
Limited, held on Thursday 25 October 2012, have been available for inspection
at the registered office of the Company, and are also available at this
meeting.

In accordance with normal practice, these Minutes were considered by the
company's board at a meeting following the last Annual Meeting, and were
regarded, at that time, as a true and correct record of that meeting

It is therefore proposed to take them as read.

Is there any discussion on the Minutes?

There is no discussion.

We come now to the resolutions set out in the Notice of Meeting.

In dealing with these, I will conduct a vote taken on the floor of the
meeting by a formal show of hands.

The first item on the Agenda is the receipt of the Company's Annual Report
for the year to 30 June 2013, including the auditors' report be received.

I will shortly deal formally with that Resolution and the others that have
been notified.

However, it's appropriate that I take this opportunity to make some
preliminary comments.

The Annual Report has been made available to you as shareholders and I don't
intend to repeat what is contained in that document.

I will make some comments on the overall performance, while Tony Falkenstein
will address the current situation and future.

As signalled at last year's AGM, we did not pay any dividends in the 2012
year, as we continued to focus on reducing company debt. The company has been
able to pay down a greater amount of debt than anticipated which puts the
company in good standing for the future.

Your directors' consider this item of dividends very carefully each year, as
they are conscious of the lack of return to shareholders over recent years.
Shareholders will recall that we ran into serious problems in our Australian
operation, and also with our NZ computer system, which resulted in a higher
debt level than is prudent. The directors feel that it is more important in
the long-term interest of shareholders that free cash flow be used to reduce
debt, and to fund growth, currently through small acquisitions.  Your Board
is intent on continuing to reduce debt levels significantly, but is
consciously looking at acquisition opportunities where they complement and
make sense to the longer term business operations and will restore growth.

 A key measure of gearing is the debt to equity ratio. We currently have a
debt to equity ratio of 76:24. It could be considered prudent to reduce that
ratio to, say, 60:40 before commencing dividend payments again. This could
occur within the next two to three years providing nothing else changed.  It
would also be prudent to ensure that there is a platform of growth in place.

Overall, this year's results are an improvement on last year - generally the
business performance has continued to make improvements and efficiencies in
terms of people, processes and profitability.

Your Board remains focused on delivering a positive return to shareholders
and is looking for growth in the current year.

I want to thank my fellow directors, each of whom has made an excellent
contribution to Just Water's governance.  Each of them brings real, valuable
and complementary skills to the business.

Some of you will recall that we announced as a policy in our original
prospectus, that directors would compulsorily retire after a 3 year period to
allow new dynamics and thinking into the Board. We extended that to 5 years,
as more realistic, and thus Renny Cunnack, one of the original directors
retired in 2007. You will recall that the original Chairman, the Honourable
Jim McLay, retired when he was appointed NZ Ambassador to the United Nations.

Ian Malcolm the other original director retires today, and is not seeking
re-election.

As I have previously observed, ours is still a small board, and deliberately
so; and I am grateful to each member for their respective contributions.

I know Tony will make some remarks later, but Ian has really been a part of
Just Water right from the beginning, and his contribution in my time has been
outstanding. He has carried out the role as Chairman of the Audit Committee,
so I suppose that we have had no audit qualifications is due to his tight
control. Thank you Ian for your support.

The Board is now supporting the nomination of Brian Rosenberg to the Board.
Brian has had extensive experience as an operating executive of some large
companies, with particular expertise in acquisitions amongst his talents. He
now holds several directorships, with Just Water being his first as a public
company director.  Welcome Brian - you join us in exciting times. As I
mentioned earlier Brian will say a few words when we get to the resolution to
appoint him.

Your board had spent considerable time and effort ensuring that the company's
governance structures meet the highest standards, and in these challenging
times we continue to seek a mix of stability and strength partnered with new
thinking.

I am also pleased that our auditors have given us a clean bill of health and
also that we have complied with all bank covenants.

We do take our governance responsibilities very seriously; and the process of
continuous governance improvement will continue.

Finally, I want to thank the entire Just Water team across both Australia and
New Zealand, for their efforts over the year.

Prior to going to the formal business, I'd like to invite our Founder and
major shareholder, Tony Falkenstein, to address the meeting.

Founding Shareholders address:
Thank you Paul.

In another month it will be 25 years since I first bought 6 water coolers,
and started Just Water, as a division of my fax rental company Red Eagle
Corporation, which I had started 2 years prior. Most of you aren't old enough
but you might remember the world was just emerging from the financial crisis
of 1987.

Starting a company is not easy, especially the first few years, and although
we survived, we certainly went close to failing on many occasions.

I will just recall one story, when in 1992, our former bankers called me in
for an afternoon tea. I thought we had had a good year, increasing our base
of water coolers significantly.  Unfortunately our debt had also increased,
and the bank was calling it in within 4 weeks. A week later we were opening
our new Head Office, and invited then Prime Minister Jim Bolger to officially
cut the ribbon.  "Due to my Government" he said, "small companies like Just
Water have prospered". I remember thinking at the time, "We've only got
enough cash to survive for three more weeks". Fortunately our current
bankers, the BNZ, recognised that conventional balance sheet analysis does
not apply to rental companies, and our funding was based on cash flow.

Sometimes I think that our shareholders are being punished by that same
conventional balance sheet analysis, which is reflected in our low share
price, whilst we have off balance sheet receivables of over $80 million.

I am delighted to have been able to announce the appointment of Ian Ormiston
to the position of CEO last month.  Ian comes to the Company with a great
pedigree, holding senior roles at Carter Holt, Les Mills International and SP
Health, and having spent the last seven years in Australia and the USA. I am
sure Ian will make an excellent contribution in growing the Company over
future years.  That is his brief, purely and simply!

Yes, we are looking at acquisition opportunities, and, as previously
announced, have acquired two companies in Australia in recent months. In the
one case, Pure Rain, it gives us over 3,000 additional filter accounts, with
the opportunity to sell filter cartridges on a yearly basis, as well as
upgrade the units through our experienced telesales team in Sydney. In the
other case, Aquaman, we have purchased over 600 additional water coolers to
add to our base. These are sensible 'add-on' purchases, and we think more of
these will arise over the coming year.

In terms of the business in New Zealand, we have come under immense pricing
pressure over the past year.  We have faced this aggressively, but it has
meant reducing revenues to compete. To explain the relevance, we are six
times larger than our number two water cooler competitor and 12 times larger
than our number three - we believe we can sustain this pricing pressure far
better than either of them, and they are destroying value of their own
companies as they continue this pricing pressure.

In terms of Australia, we have maintained our base of water coolers, but here
also there has been pricing pressure to compete.  We believe that a better
cost of acquisition is to buy existing companies, as we have done with our
Pure Rain and Aquaman purchases. The untapped opportunity in Australia is the
significant level of water delivery as opposed to point of use supply
compared with New Zealand and most of the western world. If or when the
market moves to a higher percentage point of use supply, in keeping with
world trends, our addressable market could increase materially.

We continue to promote healthy living as part of our mission - I am
continuing my campaign against obesity, and am making a major speech at a
symposium "Sugary Drink Free Pacific by 2030" in February 2014. This is being
coordinated by the Universities of Otago and Auckland, and the Symposium will
be reporting back to Government.

As some of you know Ian Malcolm has lived through the Just Water journey from
its earliest days - he has been my personal financial mentor, although I have
to say not always 'financial'. He certainly has an entrepreneurial streak,
and we have made some good and bad decisions, although he will always say he
warned me on the bad ones! Ian was part of the team which bought Just Water
to the market in 2005, and he will continue to be my advisor, and I am sure
we will not lose the intimate knowledge he has in Just Water. Thank you Ian.

I am sure you are all interested in the future - we have a new CEO, a new
director, and obviously we would like a new performance!

Just to give you an indication of results for the first quarter, and in
recognition that this is the quietest quarter of the year, revenue is
slightly down, and EBIT before unrealised exchange gains are up by 13%. By
switching some of our New Zealand debt to Australian dollars, this has
resulted in an additional unrealised exchange gain of $116K during the
quarter.

In terms of our base of contracts with recurring income, we have attained
stability in our base for the quarter, with sales of water up 10% on the same
quarter of last year.

Our debt since September a year ago has reduced by $2.4 million, and this is
after paying just over $1 million for the acquisition of Pure Rain and
Aquaman.

I just want to finish off by saying that we are happy with our continuing
reduction in debt levels, which have been an area of focus over the last
three years, and are looking forward to seeing increased revenue and
profitability, and the reinstatement of dividends

Maybe at this time we can take any questions.

I will now hand back to the Chairman.

In response to a question from the floor as to whether the board had
considered selling its Australian business, the Chairman advised that the
board regularly considered the scope of the group as part of a standard
strategic review. Currently the position concluded is that this would not be
advantageous to the company.  The Chair advised that Just Plants was holding
its own and a decision will be made of whether to divest or not before the
next AGM.

Chairman:
Are there any questions on my or Tony's remarks?

We will now move on to the formal business and resolutions which were advised
in the Notice of Meeting; [and discussion of the first of these will include
an opportunity for shareholders to comment on or ask questions in respect of
any aspect of the remarks Tony and I have just made.]

Resolution 1
As I have indicated, Resolution 1 is to receive the Annual Report, (which
includes the Auditors' Report), for the year ended 30 June 2013.

Would a shareholder like to move the resolution?
Thank you.

As the Resolution has been properly notified, there is no formal need to seek
a Mover and Seconder; but it is still appropriate to do so if someone wishes
to go on record to that effect.

Is there any discussion on the resolution?

I now put the resolution.  All those in favour please raise your hand.

Those against?

I declare the motion carried.
Let's now move to resolution 2.

Resolution 2
Resolution 2 relates to Auditors' Remuneration

The Resolution is: That the company's board of directors be authorised to fix
the auditors' remuneration.

Would a shareholder like to move the resolution?
Thank you.

Again, as the Resolution has been properly notified, there is no formal need
to seek a Mover and Seconder; but, on the same basis, I will ask if there is
someone who wishes to be a Mover? and a Seconder?

I now put the resolution:  All those in favour, please raise their hands.

All those against, please raise their hands.

I declare the motion - carried

Resolution 3
Resolution 3 relates to the election of a director. Ian Malcolm retires at
this meeting, and is not seeking re-election, as I advised earlier.

We have gone through an extensive process to find a suitable replacement for
Ian Malcolm, and I believe that Brian Rosenberg will be a fitting replacement
for Ian.

The Board is recommending that he be appointed to the board.

The Resolution is:  That Brian Harry Rosenberg be elected as a director of
the Company.

Would a shareholder like to move the resolution?

Thank you.

Before continuing, I would like to ask Brian to introduce himself.

Thank you Brian.  Is there any discussion, comment or query on the
resolution?

I now put the resolution:  All those in favour, please raise their hands.

All those against, please raise their hands.

I declare the resolution carried; and that Brian Harry Rosenberg is elected
to the board.

General Business

Is there any General Business or are there any further questions - including
any queries or comments on Tony's or my remarks?

Conclusion
Ladies and Gentlemen:  That concludes this Annual Meeting; and I formally
declare the meeting closed.

Thank you all for attending, and I invite you to join us for refreshments at
the back of the room.

Paul Connell (Chairman) Tony Falkenstein (Founding Director)
End CA:00242828 For:JWI    Type:MEETING    Time:2013-10-24 14:17:33