questions to be answered at the agm

1. When did the company become aware that it was no going to be able to make the original guidance figure of $24 million (Original Guidance) in the 2007/8 financial year?
2. Given that the Original Guidance was issued at the end of August 2007 and the Revised Guidance was issued approximately 2 months later, what changed during that period?
3. If the changes in circumstances were observable at the beginning of November, to what extent were they observable prior to this; in particular at the beginning of both September and October?
4. When did the company become aware that that the expansion was not going as well as expected:
a. The costs would be greater that expected?
b. Both the new and existing staff would be less productive that expected?
c. Both margins and revenue would be lower than expected?
In particular were any of these ‘disappointments’ evident in the 2006/7 financial year and were any provisions included in the annual results for that period
5. With respect to the 2006/7 Annual Accounts were the provisions for writing down ‘investments’ conservative or optimistic? And although the auditors signed off on the accounts did they have any concerns with the Company’s accounting practices?
6. How long does the Company now think it will take before performance returns to normal/budget?
7. What actions are the Company taking to correct the problems of declining margins?
8. Is the decrease in margins the result of the long term preferred supplier agreements it has signed up to? Or put another way, is the pricing in these arrangements less favourable than anticipated? And, given that these are long term arrangements, is there anything the Company can do to alter the terms?
9. Is the growing global Credit Crunch negatively impacting the company’s ability to collect revenues from its retail clients?
10. The company has bank loan(s) of $125m. This arrangement is in place until January 2009. Given these circumstances:
a. Is the Company anticipating increasing the size of its borrowings in order to ‘get through’ the current period of under performance?
b. Does the company have the full support of its bankers and does the Company anticipate that the current loan arrangements will be renewable and renewed on similar on similar terms when this(ese) facility(s) are renewed during 2008?
11. Does the Company Management now accept that its expansion plans for the current period were too ambitious? If yes, why did the Company not foresee the current difficulties?
12. When will you be providing guidance for the 2008/9 financial year and do you now believe that this will also be another period of consolidation and disappointment or do you expect to have been able to resolve all of the issues by then?
13. Does the Company anticipate issuing further earnings guidance notices during the current financial year and if so, when are these likely to be?
14. Does the Company accept that its Original Guidance mislead shareholders?
15. Did Geoffrey Lucas act inappropriately or was he in possession of ‘price sensitive information’ when he sold 140,000 shares in September? And more importantly, at the time Mr Lucas sold these shares, was he aware that the Company was not meeting its monthly budgets for both revenue and costs and looked likely to continue in this vein for the remainder of the financial year?