IGNITE LIMITED — AGM Information 2013

Oct 30, 2013

==> picture [153 x 62] intentionally omitted <==

Clarius Group Chairman’s Address to Shareholders AGM October 31 2013

Good morning ladies & gentlemen and welcome. My name is Penny Morris and I am your Company's Chairman. It is my pleasure to welcome you to the 2013 Annual General Meeting of Clarius Group Limited.

I would like to introduce my fellow Directors to you:

Ms Kym Quick, our Managing Director, and Geoff Moles, and Garry Sladden, both of whom are non-executive directors.

I had also hoped to introduce Simon Kelly to you today, but it is with great regret that I advise that Simon resigned as a Director of Clarius yesterday with immediate effect. Simon was very disappointed to have to resign due to the ever increasing work and travel demands of his executive position. Simon is an outstanding Director and has contributed great value during his 2 years at Clarius.

Also at the table is Nick Geddes, our Company Secretary.

I also acknowledge and welcome our Executive Leadership Team and other staff members who are at today’s meeting, many of whom are also shareholders.

The Company’s auditors, KPMG, are represented here by Mr John Wigglesworth the Audit Partner. Welcome John, and thank you for being available to answer any questions today on the conduct of the audit, and the Audit Report.

Before I proceed with the formal business of this meeting I would like to speak briefly to three matters:

• recent Governance changes at Clarius,

• the Company’s 2013 results, and

• some of the key issues facing Clarius, and the recruitment industry generally.

Governance Changes: on the 8[th] of August this year Lawrence Gibbs our former Chairman stood down as Chairman and also indicated he did not wish to seek re-election at this year’s AGM.

Subsequently on 10[th] of September Lawrence resigned as a Director. Each of his decisions were taken in order that he be able to spend more time on his considerable work load outside of Clarius.

On the 8[th] of August I was nominated by the Board to assume the Chairman’s role-which I said I was prepared to do in an interim capacity - until the appointment of a new and more permanent Chairman.

Also as I noted before, Simon Kelly resigned yesterday.

At present I am working with search consultants Boardroom Partners, to identify potentially suitable Chairman candidates for consideration and final selection by the Board, and also to find a replacement for Simon.

It is our objective to have a new Chairman announced by the end of this year/very early next year, with a view to having that person actually commence directly after the announcement of the Company’s half year results in February 2014.

Our other recent Board change was the appointment of Garry Sladden on the 10[th] of September.

Garry was a recommended Director ‘appointee’ by our largest shareholder Mr John Plummer.

Each ‘then’ Board member met with Garry over July and August and all of us considered him to be a worthwhile addition to the Board.

Garry has no direct or close association, either now or in the past, with Mr John Plummer, or any other major shareholders.

As such Garry is considered an independent non-executive Director as am I.

The other governance change I should mention is our change of Auditor from KPMG to Deloitte-the formalisation of which is at Resolution 4 on our order of business today.

Every three or four years Clarius invites submissions from up to 4 providers for its external audit service requirements. We consider it good governance to periodically test the market for these services. In the selection process carried out in September this year, KPMG chose not to participate this time. Deloitte were our preferred supplier.

Accordingly KPMG have formally submitted their resignation, and Deloitte are being formally appointed today at our AGM today, as the Company’s Auditor.

Clarius’s 2013 Results. The Board and senior Executive of Clarius were obviously extremely disappointed to have to announce the first operating loss for the Clarius Group since it floated in 1997.

Our 2013 operating loss was $0.9m down from an operating profit the year before of $2.1m.

In addition the company provided for impairment of goodwill of $40.9m as well as derecognising tax losses in New Zealand of $0.4M.

As such the statutory net loss for the company in 2013 was $42.2m.

Some of Challenging Issues Facing Clarius and the recruitment industry generally

There is no doubt the recruitment industry is facing a paradigm shift with increasingly fierce competition from networking sites and online advertising.

Rapid growth in the development of new technology solutions has, in large part, replaced many of the more traditional recruitment ‘techniques.’

Strained economic times have also and still are, putting further pressure on the industry as the opportunity for permanent and contract employment is reduced.

In addition, there is a trend in some companies to move recruitment back ‘in-house.’

All these challenges remain a part of the ‘landscape’ within which we are operating.

At present the really positive aspects for Clarius are our international offices throughout Asia-which have started to show signs of sustainable revenue and earnings.

In light of the key issues facing the Clarius Group-the Board and our senior Executives are very focused on two key deliverables in particular, in 2014.

• getting the right technology in place to best service the new recruitment methodologies, as well as enhancing our more traditional methodologies, AND

• getting the right people in place across the business to better deliver on our old and new methodologies and thus achieve our budgeted financial outcomes for 2014.

In addition, the Board is always ready to consider diversification and or acquisition opportunities that will add further growth potential for the Clarius Group.

As is our usual practice, the Managing Director, Kym Quick, will make a presentation on the Company after the conclusion of the formal part of the meeting.

She will no doubt also elaborate further on a number of the points I have very briefly referenced.

There will also be an opportunity after Kym’s presentation for shareholders to ask questions about the Company.