I attended yesterday's AGM and here are my notes & thoughts...

Introduction

The AGM was well attended by around 20 shareholders, I'd estimate. Compared to other AGMs that I'd attended, I'd say that Brian Count ran proceedings in a highly shareholder-friendly manner, though the format was perhaps not optimally efficient, comprising:

  • A brief presentation
  • 30mins Q&A
  • Formal business
  • Further opportunity for questions
  • Opportunity for attendees to chat with directors on a one-to-one basis.

Reasonably, Brian wanted to conlude the formal business relatively early, to allow any attending specifically for that purpose to leave promptly. Proceedings were drawn to a close around 12:30 (after a 10:30 scheduled start), as the Board had a meeting scheduled.

I know that Ceres' Board will read this writeup, so I will suggest a more conventional format for next year:

  • Introduction
  • Formal business, including questions relating specifically to the resolutions (Brian will need to be strict to enforce the latter point, having explained that there will be plenty of opportunity to ask more general questions later)
  • Presentation
  • Q&A

This avoids the two Q&A sessions which are more likely to lead to duplication/overlap - and is on the assumption that none of the resolutions are likely to be controversial.

There was some timewasting debate over the fact that Brian had been advised to show the proxy voting figures before the vote for each resolution was taken on a show of hands.

 

Placing

Naturally, there was a fair bit of discussion revolving around the placing. During and after the meeting, it became clear that a number of factors had led to the decision to raise funds via an equity issue now:

  • The rate of cashburn in 2008/9 was artificially low, due to receiving significant advance payments from customers, reflected in the big increase in "trade payables" & reduction in working capital. This will not be repeated in 2009/10, when operating costs also rise as CHP development & production moves into a higher gear.
  • The current very low interest rates mean that investment income from Ceres' cash will be lower than was previously expected.
  • Ceres had been expecting that its supply chain partners would be funding a significant part of the development of the non-fuel cell related CHP components. The "credit crunch" has, however, scotched that idea, with those partners not having the cash available to make such investments. In the long run, this has…

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