Chairman‟s Address to Annual General Meeting Wednesday, 17th November 2010, 2.30pm Sydney time Good Afternoon Ladies & Gentlemen I am Desmond Smale, the Chairman and Managing Director. On behalf of the Board of Directors, I would like to welcome you to our Annual General Meeting. Thank you for making the effort to be here today. We are grateful to you for your enthusiasm and interest in the progress of the Company. I would like to start off by introducing the Board of Directors and Management staff, to you. Roger Smith who has been a member of the Board of Multi Channel Solutions almost since its inception. His knowledge, advice, support and frequent input has been invaluable and greatly appreciated John White - a very hard working non executive Director who joined the Board on 21st December 2009 and has provided immeasurable support to me and to the Company. John‟s experience is of great value to us. Clay Moore is in charge of the US operation and has made a special effort to be here today. Even though we are in opposite time zones we have always been able to communicate and work through issues on a daily basis. Clay was appointed to the Board on 21st December 2009 Errol Graham, our Chief Financial Officer, who took over the role of Company Secretary on 31st December 2009 and whose advice and Management skills are invaluable in the day to day operations of the Company I would also like to take this opportunity to thank Roland Tudor, who was a member of the Board from 22nd November 2007 until his retirement from the Board on 31st December 2009. Roland made a very significant contribution before, during and after the takeover of Bronson Marketing by Multi Channel Solutions Ltd. Thank you very sincerely Roland, the Board is greatly appreciative of your contribution. I believe we have an excellent team dedicated to building this Company and taking it to the next level. I open this meeting with a sense of optimism, exhilaration and apprehension. I am optimistic because I know we have turned the corner in respect of both, the Australian and the US operations. Exhilaration because I know we have some exciting opportunities ahead. I am also apprehensive because we will soon be experiencing an exponential growth curve particularly in the US and this brings its own challenges which we are prepared to face. We have certainly sailed through stormy waters and come through very challenging times. The share price movement in the 12 months to June 2010 bears testimony. The trading conditions in Australia were very tough. In the US we had many projects in the pipeline but progress was slow. It came down to believing in the future and persevering. We have no doubt that our shareholders would have also been frustrated at the apparent inactivity but we have been chipping away all the time. I would like to now provide you with an update on both the Australian and US operations. It gives us immense pleasure to report that the Australian subsidiary - Bronson Marketing has delivered a profit every month in this financial year and is currently 14.1% above budget, as at the end of October 2010. This has been aided by greater sales volumes up 31.9% for July to October over the comparative period last year. Our results have also been aided by significant cost cutting measures particularly the move to this new office/warehouse complex. The strengthening Australian dollar has helped reduce the cost of imports. Looking to the future, we have a new range of 9 items of Shampoos, Conditioners and Hair Gel accepted into IGA stores as well as one new product going into the largest retailer in Australia effective January next year. These new lines pale into insignificance as I take much pleasure in advising you that during my visit to Phoenix, Arizona a few weeks ago, we were given the exclusive rights by the licensor to manufacture and market the Cat Litter product under our own brand name in Australia. The active ingredient will be supplied by the licensor in America while the base material will be sourced locally. The US operation has certainly taken a long time to start delivering results. I can assure all shareholders that this was not for want of effort. Under normal circumstances, projects do take a long time to come to fruition. Our basic business of supplying High Definition cables, Hand Sanitizers and Media Racks etc was not sufficient to sustain the US operation but we persevered. The new Desert‟s Sand Cat Litter product has been sensational for us. While I spoke earlier of long lead times under normal conditions, it has been a totally new scenario in this case. It generally requires at least 3 to 4 presentations and an average lead time of 12 months for a normal product to be accepted by Retailers. The bigger the Company the longer this process takes. With all our Cat Litter customers to date, it has been just one presentation and we have received almost instant acceptance. In the case of Kroger, the second largest Food Retail chain with 2,400 outlets, the total time frame between presentation and delivery of stock was less than 6 months. The responses from buyers who have seen the demonstration has varied from unbelievable‟ to Oh My God. These are buyers who know the Cat Litter category. For your information, when we presented to Kroger, we were one of 81 Cat Litter products offered. Indeed competition is intense in America. As you know we have also been accepted and have commenced delivery of product to Pet Food Experts, a major Pet product wholesaler with 1,600 outlets and also to the Stop & Shop chain of supermarkets consisting of 400 outlets. We are especially pleased that we have now received strong repeat orders from Kroger for our Cat Litter. Acceptance of product by the various retailers gives us an additional asset of significant value. We are given a vendor number‟ by these retailers. Without a vendor number it is hard to break down the castle door. We now have much easier entry as an established vendor to submit new products. The major obstacle to entry to these retailers has been removed. As an update to all shareholders, we have made formal presentations to Wal Mart, Safeway, K Mart and other smaller retailer chains. We now await their decision on ranging the product. I would like to place on record my sincere appreciation for the hard work undertaken by the management and staff of Bronson Marketing and also Home & Business Consumer Products in Seekonk, Massachusetts, throughout the year. It has been a tough road with limited resources but we see a new chapter ahead. I would also like to thank the shareholders for their continued patience and support through a very difficult period. I look forward to keeping you updated on new developments in the coming months. Desmond Smale Chairman
MUT Price at posting:
0.9¢ Sentiment: Buy Disclosure: Held
