Last year there were issues with bonuses paid to directors.
In my opinion these issues still have not been accepted by the directors AND in addition I believe that the directors should agree to a reduction in their salaries until such time as the company is moving forward profitably.
The directors 'took' their bonuses in the previous year because as they say, the company made a profit in 2010.
The company recorded a profit in the books but it was not from profitable trading BUT from 'book figures'.
THE 2010 NET PROFIT after tax from continuing operations was $3,291,709. Two of the major items that 'made this profit' consisted of 'government grants' for $813,637 and 'gain on bargain purchase' of $2,952,487 - a total of $3,766,124.
In other words, without these 2 extraneous items there would have been a 'trading loss' of $474,415.
In my mind this did NOT justify that the directors receive a bonus.
I believe that the directors should return these bonuses and have them credited back into shareholders funds.
At the moment we need the funds.
Included in the 2011 report there were 'Other expenses - Impairment of Intangible Assets' totaling (wait for it!!) $6,055,873. I am sure that some of that 'impairment' was a reversal of the 'gain on bargain purchase' from the previous year that the directors received their bonuses from.
Now the 'impairment' has not been detailed so at this stage it is only an assumption unless the directors decide to give us some detail.
This is probably one of the issues that the auditors have recoded as not being handled in good corporate governance.
We don't know this because the directors have not told us what the issues were.
In this instance I recommend that:-
1. Shareholders write or call the directors and ask them to return their bonuses and ,
2. That shareholders vote 'AGAINST' the change of auditors.
It is recommended that shareholders take a close look at the accounts provided and do their own research.
If this company is to develop into a sound business then there needs to be more due diligence and scrutiny by the directors.
Regards..........
MEM Price at posting:
2.8¢ Sentiment: Hold Disclosure: Held
