First I ask as a courtesy to other shareholders that you turn off your mobile phones until the meeting is concluded. Thank you.

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1 PMP LIMITED ANNUAL GENERAL MEETING 2008

2 Good morning Ladies and Gentlemen welcome to PMP s 2008 Annual General Meeting. First I ask as a courtesy to other shareholders that you turn off your mobile phones until the meeting is concluded. Thank you. I understand the necessary quorum is present so I am pleased to declare this year s AGM open. My name is Graham Reaney, and I am your Chairman. The Board and senior management group are here today to report on PMP s performance in 2007/08 and to discuss the Group s outlook for the current year and beyond. Presentations from today s meeting will be posted on the PMP Website which also contains copies of all our press releases together with any material provided at analyst briefings. PMP LIMITED ANNUAL GENERAL MEETING

3 FORMAL BUSINESS In the format for today s meeting, the formal business will follow the presentations from myself and the Chief Executive Officer. Shareholders will be invited to vote on a number of matters, including the Remuneration Report and the re appointment of two Non Executive Directors. PMP LIMITED ANNUAL GENERAL MEETING

4 At this point let me remind shareholders of the voting procedure and the use of voting cards that you will have received after registering it i for the meeting. Only those holding blue cards are eligible to vote, as they represent voting shareholders and proxyholders. Pink cards represent shareholders who have already lodged a proxy and who are therefore not eligible to vote from the floor today. However, these shareholders are welcome to speak to motions. White cards are held by non shareholders who are not eligible to vote. Notice of Meeting The Notice convening this Meeting has been sent to all registered shareholders. If there is no objection I shall take the Notice as read, thank you. PMP LIMITED ANNUAL GENERAL MEETING

5 INTRODUCTIONS Before proceeding I would like to introduce your Non Executive Directors. They are, from the far end: Mr Peter George, Ms Marcia Griffin, Mr Ian Fraser and Dató Ng Jui Sia, who joined the Board as a representative of Singapore based Times Publishing Ltd following PMP s acquisition of Times Printers (Australia) last November. And finally our CEO, Mr Brian Evans. This AGM marks the completion of Brian s third year as chief executive of PMP. Many of you will be aware that the Board recently was pleased to announce an extension of Brian s term as CEO, for another three years. I will refer to this when we come to consideration of the Remuneration Report. The Board is accompanied today by PMP s senior management group, who are seated in the front row. External Auditor Your external auditors Deloitte Touche Tohmatsu are here this morning. The Audit Partner, Greg Couttas, is available to answer questions should you have any later in the meeting. In my address as Chairman I will comment in broad terms on PMP s performance and outlook, while Brian in the CEO s address to follow will provide a more detailed overview. After these presentations we will open the meeting to questions from shareholders before voting on the formal resolutions circulated in the Notice of Meeting. PMP LIMITED ANNUAL GENERAL MEETING

6 OVERVIEW I am pleased to report a good year for PMP in 2007/08, marked by a solid operating performance and continued strengthening of our balance sheet. This time last year we spoke about PMP s plans to acquire Times Printers (Australia), which was previously Australia s third largest commercial printer, for a net cost of around $50 million. This transaction was completed in November last year, and is of enormous strategic value to our company. It delivers PMP the required upgrade to print operations in Victoria at a steep discount and two years ahead of its planned schedule. PMP now has a modern, multi site print capability that offers a competitive advantage because of speed to market and production back up. Although there has been a delay in realising the benefits from the integration of the plant and equipment and site consolidation, these benefits are forecast to progressively flow from the beginning of 2009, a three to four month delay on what was originally planned. PMP has engaged external consultants to assist in this optimisation process and the implementation stage will commence this month. PMP LIMITED ANNUAL GENERAL MEETING

7 In our Distribution and Fulfilment division Gordon and Gotch continued its trend of improved performance based on a strong sales result and cost containment. ti t In August Gordon and Gotch announced the purchase of Scribo at an upfront cost of $21 million, with incentive payments over the next three years based on performance. Scribo is a major book distributor in Australia and there is scope for considerable synergies with Gordon and Gotch s existing business. PMP Edge, a major sales and marketing initiative, resulted in a stronger second half result which is expected to be maintained in the current year. PMP LIMITED ANNUAL GENERAL MEETING

8 New Zealand recorded a satisfactory result given deteriorating economic conditions, particularly in the second hlf half. This trend dhas continued into the current financial i year and although h the web based operations are expected to hold up reasonably well, other divisions are forecasting substantially lower results. Brian Evans will cover all operating areas in greater detail in his presentation. PMP LIMITED ANNUAL GENERAL MEETING

9 FINANCIAL PERFORMANCE Let me move now to a discussion of the Group s results for fiscal 2007/2008. PMP s financial performance was solid in the context of both highly competitive conditions and signs of uncertainty emerging in the market generally. Sales revenue was up 4.6% to $1.347 billion. EBIT before significant items was $85.1 million, down 6.8% on the previous year but in line with market guidance provided in May. The softer EBIT result is attributed to reduced average selling prices in the Print business coupled with the weakening of the New Zealand economy and also some additional costs associated with the integration of the Times Printing business. Net profit before significant items was $52.3 million, up 7.7% on the previous year. Significant items provided a net benefit to PMP of $26.6 million, leading to a net profit result of $78.9 million, well up on last year. Included in the significant items was $43.0 million tax benefit booked following settlement of a longstanding tax matter with the ATO. This benefit was offset by one off restructuring costs mostly associated with the Times acquisition the impairment of plant, equipment and goodwill, and write downs on some assets held for sale. PMP LIMITED ANNUAL GENERAL MEETING

10 BALANCE SHEET Over recent years a key priority for the Board was to see the continued strengthening of PMP s balance sheet. I am pleased to be able to report that with net debt at 30 June 2008 under two times EBITDA we have achieved this objective and will ensure in these financially troubled times we maintain this position. We aim to keep net debt to EBITDA (pre significant items) in the times range but under current circumstances will maintain it at the lower end of this range. At 30 June, Group net debt stood at $199.6 million, well below our forecast of $220 million. This accelerated retirement of debt has been made possible by an improved working capital management and the sale of the Times Printers site in Melbourne. Importantly, this debt position reduces PMP s debt to equity ratio to 50.5% from 93.9% the previous year, and boosts interest cover from 5.4 to 6.5 times. While prudent financial management remains a priority for PMP, our balance sheet leaves the Group well positioned to take advantage of growth opportunities in areas aligned to our existing capabilities. PMP s acquisition of book distribution company Scribo, announced in August, is one example. We may see more opportunities emerge at attractive valuations as the economy slows and difficult market conditions prevail. PMP LIMITED ANNUAL GENERAL MEETING

11 DIVIDEND POLICY AND BUY BACK With balance sheet strength restored, PMP was able to pay a final dividend of three cents, 60% franked, bringing the total dividend for 2007/08 to 4.5 cents. As we have now utilised all available franking credits, our policy going forward will be to pay one dividend in October each year. The dividend will be limited to the extent of available franking credits and as a guide in the foreseeable future we would expect this to be in the 2 3 cent per annum range. We must point out that the ATO settlement has increased the carry forward tax losses available to PMP and at June 2008 these amounted to $174.2 million gross. Our scope to generate franking credits will be limited until these losses are fully utilised. Looking ahead, capital management will be increasingly important. At the full year results announcement PMP flagged intentions to conduct a buy back of up to 5% of issued shares. Because of the volatility and uncertainty in capital markets we deferred implementing this until markets had stabilised and the outlook for the banking system had become more certain. With the market price of PMP dropping, its value proposition was compelling and the Board decided to commence the buy back not withstanding that markets remain volatile. By 6 th November we had brought back approximately 310,000 shares at an average cost of approximately 86 cents per share. PMP LIMITED ANNUAL GENERAL MEETING

12 ENVIRONMENT AND PEOPLE The environment is something we take very seriously at PMP. You will be aware of the debate underway around climate change and the Federal Government s move to introduce an emissions reduction scheme. PMP is monitoring these developments closely and has taken steps to ensure we are ahead of the curve when an emissions trading scheme comes into effect. PMP s Green blueprint sets out concrete measures to reduce the impact of group operations in areas such as electricity, gas and water consumption, paper and printing ink. Last year the Board approved the creation of a $5 million fund to invest in the company s environmental initiatives. Already $4 million of this has been invested in energy efficiency programs. Projects underway include: New equipment to reduce chemical emissions and improve energy efficiency in print Upgrades to lighting and metering for energy savings Rainwater and stormwater catchment programs PMP LIMITED ANNUAL GENERAL MEETING

13 A large part of our effort has been directed at reducing our carbon footprint, mainly by reducing consumption of energy and re using heat wherever possible. Already this focus is paying dividends. In 2007/08 PMP lowered the energy used per tonne of output by 6%. We have commenced purchasing future dated carbon credits through tree planting activity and we expect to step up our participation in these markets in coming years. We are using more renewable energy particularly in New Zealand. Smarter use of paper is part of PMP s sustainability strategy. PMP s print plants at Moorebank, Clayton and Salisbury have moved to win accreditation for their use of sustainably forested paper. Already 30 forestry accredited contracts have been completed for book and heat set customers. In keeping with the theme of sustainable operations, we have made workplace safety a priority for the Board and seniorleadership team. In recent years we have invested significantly in employee education on workplace safety across group operations. We are determined now to convert this into practical action and real improvement and Brian has visited every site and held meetings with all employees to reinforce the importance of an improved performance in this area. Finally, the Board would like to acknowledge the contribution of Brian, Group Executives and all employees during the year. Their dedication and commitment has resulted in PMP providing improved returns to all stakeholders. PMP LIMITED ANNUAL GENERAL MEETING

14 GOVERNANCE The Annual Report provides a detailed report on the various issues associated with the management of PMP. PMP has continued to enhance its corporate governance during the last year. Of particular note is the continuing emphasis on improvement in financial systems, controls, and risk management throughout the Group. This is leading to increasing reliability and accuracy in historical and forecast reporting which is essential in these turbulent times. During the year we had an external facilitator review both individual Directors and overall Board performance, and the learnings and outcomes from this process are being implemented at both individual and corporate level. I now call on our CEO, Brian Evans, to address the meeting. PMP LIMITED ANNUAL GENERAL MEETING

15 OUTLOOK The poor performance of the Clayton site and the difficult market conditions in New Zealand have led to an EBIT reduction of approximately $6 million for the first four months of this year compared with last year. These production problems have now been overcome and the two main plants at Clayton and Moorebank have strong volumes booked through to December. It is clear that our EBIT result for the 2009 financial i year will be lower than the 2008 result how much lower will be determined by the extent of the economic slowdown. However we are already implementing a comprehensive print cost reduction and optimisation strategy aimed at offsetting anticipated lower print volumes. This is being implemented with the assistance of external consultants, and considerable opportunities have been identified. PMP is again paying dividends to its shareholders, and together with the on market buy back, we expect that the balance sheet will continue to remain strong with gearing (debt/equity) at around 50% at the end of the current financial year. I am confident that with PMP s strong management and leading businesses, we are well placed to see through the current challenging market conditions in the short term, and continue to grow the business over the longer term. PMP LIMITED ANNUAL GENERAL MEETING

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40 FORMAL BUSINESS 2008 ACCOUNTS The Board has received and agreed to adopt the Financial Statements, Directors Report and the Audit Report of PMP Limited for the financial year ended 30 June PMP LIMITED ANNUAL GENERAL MEETING

41 While there is no need for shareholders to formally approve the accounts I will now open the meeting to questions and comments on the 2008 financial i results and the Operations Report. If you have a question could you please move to a microphone and state your name, and, if you represent an organisation, the name of that organisation. I would remind you that only shareholders are entitled to ask questions. PMP LIMITED ANNUAL GENERAL MEETING

42 REMUNERATION REPORT Moving on to consider the formal resolutions the first one deals with the Remuneration Report. PMP LIMITED ANNUAL GENERAL MEETING

43 I would now like to give shareholders an opportunity to ask questions about the Remuneration Report, which h was published in the Annual lreport. The Remuneration Report is a detailed and comprehensive disclosure of all matters that the Company is now required by law to disclose regarding the total remuneration arrangements for the CEO and the relevant senior executives. As you will have seen in this report, PMP s remuneration policy provides a direct link between remuneration and corporate performance. The policy requires executives to achieve performance criteria to be eligible for incentive payments. Typically these criteria include a mix of financial targets such as EBIT and earnings per share, as well as measures of organisational performance such as safety and development along with individual goals and objectives. PMP LIMITED ANNUAL GENERAL MEETING

44 On 29 th September following the release of the Annual Report PMP announced that it had modified and extended dthe contract tfor Bi Brian Evans by three years to now expire on 30 th September The options issued under the previous long term incentive plan have been cancelled and replaced with a medium term deferred share plan. Under the revised incentive arrangements the CEO has the ability to earn up to 160% of his base salary, on achievement of annual key performance indicators which are approved annually by the Remuneration Committee and the full Board. Based on the actual achievement of these KPI s up to 100% of the 160% is paid as a cash incentive and up to 60% will be used to acquire PMP shares on market and will vest half one year after purchase and the balance two years after purchase. All other terms and conditions remain as per the original agreement. PMP LIMITED ANNUAL GENERAL MEETING

45 Questions on Remuneration Report If you have any questions about the Remuneration Report, please proceed to a microphone and give your name to the representative there. Vote on Remuneration Report I would now like to ask shareholders to adopt the Remuneration Report by way of a non binding Resolution. (Proxy Result Appears) The proxy votes for this resolution have been cast as shown on the screen, and I will now put the resolution to a vote. Remember only those present holding blue shareholder/proxy cards are eligible to vote. For this and subsequent resolutions I intend to direct the open votes in favour of the resolutions. All those in favour please raise your blue shareholder/proxyholder voting card. All those against, please raise your blue shareholder/proxyholder voting card. I declare the resolution carried. OR The resolution appears not to have been successful on a show of hands, so we will put it to a poll at the end of the meeting. PMP LIMITED ANNUAL GENERAL MEETING

46 RE ELECTION OF DIRECTORS The next item of business is the re election of Non Executive Directors Peter George and Ng Jui Sia. Peter George We shall deal with the reappointment of Mr George first. Mr George is an experienced Executive and Non Executive Director with a strong background in telecommunications, media and corporate finance. He served for four years on the Board of Optus Communications, and served in executive leadership roles with Optus. Mr George is currently Executive Chairman of Nylex Ltd and is a Non Executive Director of Asciano Limited. Questions Does any shareholder wish to comment in respect of the proposed resolution? (Proxy Result Appears) The proxy votes for this resolution have been cast as shown on the screen and I will now put the resolution to a vote. All those in favour please raise your blue shareholders/proxyholder voting card. All those against, please raise your blue shareholders/proxyholder voting card. I declare the resolution carried. OR The resolution does not appear to be successful on a show of hands, so we will put it to a poll at the end of the meeting. PMP LIMITED ANNUAL GENERAL MEETING

47 Ng Jui Sia We now move to the re appointment of Dató Ng Jui Sia as a Non Executive Director. Dató Ng Jui Sia joined PMP s Board in November 2007, following PMP s acquisition of Times Printers (Australia) from Times Publishing, a division of Singapore based Fraser & Neave. Dató Ng Jui Sia is CEO and Director of Times Publishing, which is Singapore s largest printing and publishing company. He has held financial and general management roles in businesses operating across Singapore, Hong Kong, China and Malaysia. Dató Ng Jui Sia joined Fraser & Neave (F&N) in September 1995 and held the position of General Manager F&N Coca Cola in Singapore and then Malaysia until 2006, when he was appointed to his current position. He is a Non Executive Director of a number of subsidiaries of the F&N Group. He holds a Bachelor s degree in Business Administration and is an associate member of the Institute of Chartered Accountants in England and Wales. Questions Does any shareholder wish to comment in respect of the proposed resolution? (proxy Result appears) The proxy votes for this resolution have been cast as shown on the screen and I will now put the resolution to a vote. All those in favour please raise your blue shareholders/proxyholder voting card. All those against, please raise your blue shareholders/proxyholder voting card. I declare the resolution carried. OR The resolution does not appear to be successful on a show of hands, so we will put it to a poll at the end of the meeting. PMP LIMITED ANNUAL GENERAL MEETING

48 OTHER BUSINESS That concludes the formal business before the meeting. Thank you for your attendance and we would invite you to stay for light refreshments and the opportunity to meet with the Directors. PMP LIMITED ANNUAL GENERAL MEETING

For personal use only

For personal use only Order of Proceedings for AGM Thursday 27 th October 2016 Good morning Ladies and Gentlemen. Welcome to the Annual General Meeting of SAI Global Limited for 2016. I am Andrew Dutton, your chairman. A quorum