Cromwell Property Group (CMW) Earnings Call Transcript & Summary

Good afternoon securityholders and attendees, and welcome to the 2021 Annual General Meeting of Cromwell Corporation Limited. My name is Gary Weiss, and I'm the Nonexecutive Chair of Cromwell Property Group. I'm also the Chair of today's Annual General Meeting. Cromwell Property Group is acutely aware of the current circumstances resulting from COVID-19 and the impact it is having on physical meetings. As a result of the potential of health risk and government restrictions and responses to the pandemic, today's Annual General Meeting is held as a hybrid meeting. I warmly welcome all Cromwell securityholders to the meeting, whether you're joining in Cromwell's Brisbane office or through the online platform provided by our registry, Link Market Services Limited. The Cromwell Board thanks all securityholders for their participation. May I begin by acknowledging the traditional custodians of the land on which we meet today and pay my respects to their elders past, present and emerging. Next, I would like to recognize my fellow Directors of Cromwell Corporation Limited. First, joining me here in Cromwell Sydney office, we have Independent Nonexecutive Director, Rob Blain; Deputy Chair and Senior Independent Director, Eng Peng Ooi; Independent Managing Director and Chief Executive Officer, Jonathan Callaghan; and Independent Nonexecutive Director, Joseph Gersh. Joining in Cromwell's Brisbane office, we have Independent Nonexecutive Director, Tanya Cox. And joining online, we have Independent Nonexecutive Director, Lisa Scenna, who's joining us from Edinburgh at the very early hour of 4 a.m.; and Nonexecutive Director, Jialei Tang, who joins us from Boston at the very late hour of 11 p.m. I speak for all Cromwell directors when I say that we would like to be there with you in Brisbane in person. However, COVID-19-related travel restrictions mean that we are meeting with you from Cromwell's Sydney office, Cromwell's Brisbane office and Boston. Company Secretary and Corporate Counsel, Lucy Laakso, is present at the Brisbane meeting location today to coordinate the virtual component of our meeting. Mr. David Rodgers is also at the Brisbane meeting location today. David is a partner of Deloitte Touche Tohmatsu, which is Cromwell Property Group's auditor. Later in the meeting, you will have the opportunity to ask Mr. Rodgers questions about the financial statements and the independence of the auditor in relation to the conduct of the audit. As a matter of housekeeping, at the Brisbane meeting location, please ensure you've checked in via the Queensland check-in app and also signed in at the COVID-19 registration desk. If you have not signed in, please see one of the Cromwell team members now. In the unlikely event that you need to evacuate the building, please follow the emergency exit signs and directions of staff to safely move down the stairs and towards our assembly area in the Brisbane Botanic Gardens. Please do not use the lifts. I would now like to open the meeting. I have been informed that a quorum for the meeting is present, and I formally declare the meeting open. I will start with a few remarks before handing over to Jonathan to take you through the year in review. It will be of no surprise that COVID-19 continues to be the dominant issue impacting national economies, markets as well as investors, tenant customers, friends, families and loved ones around the world. Thankfully, vaccination programs have been progressed sufficiently that most countries are reopening their borders and relaxing restrictions even as the virus continues to circulate. As I've said previously, the Board's priorities during this time have been to ensure the safety and well-being of Cromwell's people and their families to minimize and mitigate the commercial and financial impact of the pandemic and to safeguard the interests of securityholders and investors. This year, the Board has been successfully and substantively renewed and reinvigorated. This process has included my election as Chair in March and a subsequent appointment of 3 other new Nonexecutive Directors, Eng, Rob and Jialei. Our new Managing Director and Chief Executive Officer, Jonathan Callaghan, also joined us at the start of last month. Jonathan is an outstanding leader, and we are confident that his deep experience and skills in property and funds management will drive our strategy forward for the benefit of securityholders. We are pleased to have a strong, committed and cohesive Board to guide the business. As we stated in our full year results presentation in August this year, the Board has been actively reviewing Cromwell's strategy and business model. The aim is to simplify the group structure with a view to improving capital efficiency using our existing portfolio assets to create new funds and accelerate the growth in our fund management and development businesses. This process has involved not only looking at the commercial strategy of the group but also the vision, values and culture of Cromwell and how these contribute to successfully executing on the ultimately approved strategy. Our overall goal is to seek to simplify the business, making it more efficient and transparent and enhancing long-term securityholder value. While the review is ongoing, there are 2 strategic initiatives which have commenced or are being explored: first, a sale process is being conducted by RBC Capital Markets in relation to Cromwell's investment in LDK Seniors Living, with stage 1 of the process already underway; and secondly, a process to explore the establishment of separately listed Cromwell-managed portfolio of high-quality Australian office assets. Work on this proposal is ongoing, with Barrenjoey and Crédit Suisse having been appointed as financial advisers. We will update the market on these initiatives as they develop. Finally, I would like to acknowledge my predecessor, Jane Tongs. Jane joined the Cromwell Board in 2014 and was an active contributor to the Board and committees up to her retirement in March of this year. On behalf of securityholders, I would like to thank Jane for her 7 years of service. I would now like to hand over to Managing Director and Chief Executive Officer, Jonathan Callaghan, for his address. Thank you.

Thank you, Gary. I would like to also extend a warm welcome to securityholders, my fellow Cromwell directors and attendees joining this meeting both physically and online. This is my first Cromwell Annual General Meeting, and I would like to acknowledge the support I received from the Board and everyone at Cromwell since I joined at the start of last month. As Gary has intimated, 2021 has been -- has seen substantive change at both the Board and executive management level, with the Chief Financial Officer, Michael Wilde, becoming acting CEO on 1 January and continuing that role up until my arrival. I would like to extend my thanks to Michael for his stewardship of the business, and I am pleased to be able to work with him as Cromwell's CFO. Brett Hinton, who in turn became acting CFO during this time, has recently been appointed as Head of Funds Management, Australia, underpinning Cromwell's focus on growing this part of the business. The Board's view, which I share, is that Cromwell has substantial unrealized potential. Unlocking this potential for the benefit of our securityholders, investors and people is my key priority. And after a transitionary year, the executive team and I are now very much focused on the future. Cromwell has strong core real estate asset management and development capabilities that continue to add value to our investment portfolio and the assets we manage on behalf of others. The business has been actively enhancing its funds management capabilities, including the appointment of Pertti Vanhanen in Europe at the start of the year as well as Brett's more recent appointment. Coupled with an established operating platform, which can provide access to capital across 3 continents, I believe we are well positioned to drive growth in funds management. In my short time at Cromwell, I have been hugely impressed with the entrepreneurial values and can-do spirit of the team. I look forward to building on these strengths in the months and years ahead. In August, under Michael's stewardship, Cromwell reported full year FY '21 statutory profit of $308.2 million, equivalent to $0.1178 per security. This represented a 73% increase on the prior year due in part to a $97.5 million increase in the fair value of investment properties. Operating profit was $192.2 million, equivalent to $0.0735 per security. This represented a 13% fall when compared with the prior period, which benefits from a $32 million fee from the sale of Northpoint Tower. Operating profit, excluding this fee, actually increased by $3 million. During the year, net tangible assets increased from $0.99 per security to $1.02 per security. Gearing of 42% remained unchanged. Debt was re-profiled and extended with a weighted average debt maturity of 3.2 years, and Cromwell maintained substantial liquidity and covenant headroom with a strong Interest coverage ratio of 6.1. Cromwell's real estate investments are valued at $3.9 billion and comprise of an Australian investment portfolio of 18 primarily office assets, co-investments in funds managed by Cromwell and a 50% interest in LDK Seniors Living. Over the year, the Australian investment portfolio of 18 assets increased in value by $101.2 million to be worth $3.1 billion, reflecting fair value gains in the portfolio. Cromwell's significant co-investments include a 28% interest in the Cromwell European REIT, a diversified pan-European fund listed on the Singapore Stock Exchange; a 100% interest in the Cromwell Polish Retail Fund, or CRPF -- or CPRF, which owns interests in 7 Polish retail assets. This interest is planned to be sold down when conditions allow; and 100% interest in the Cromwell Urban Logistics Fund, or CULF, which owns 7 logistics assets leased to DHL in Italy. These assets will form the seed assets of what is hoped to be a larger fund, and Cromwell will sell down its interest as new investors join. Cromwell's 28% stake in CEREIT was valued at $621 million, and the financial year saw a $2.7 million increase in CULF's value and a $6.4 million valuation fall in CPRF. Total profit was $193.6 million for the Property segment, a small decrease of $2.6 million or 1.3% on the prior year. Total third-party funds under management pleasingly increased to $7.6 billion from $7.2 billion in the prior year. The European platform has benefited from the arrival of Managing Director of Europe, Pertti Vanhanen, who commenced in January 2021. Pertti brings deep institutional funds management experience and has already agreed a joint venture with Dasos Capital for a wooden building fund and has signed agreements with new capital partners in Germany and Italy. As mentioned, he has also taken Cromwell Urban Logistics Fund to market and is preparing CPRF to follow a similar process. Retail funds management continues to perform well, with unitholders in Cromwell Property Trust 12 and Cromwell Direct Property Fund electing to continue their investments after liquidity events. The Cromwell Direct Property Fund also acquired 545 Queen Street at the entrance to Brisbane CBD's Golden Triangle for $117.5 million in May and has also recently agreed to acquire 100 Creek Street, Brisbane for $184.7 million. That acquisition is expected to settle shortly. A key ongoing focus for the team is to identify development opportunities within Cromwell's managed property portfolio. This will unlock potential value and ensure a higher, more consistent and regular flow of future revenues. [Audio Gap] past the initial assessment stage have a combined estimated end development value of $2.2 billion, covering gross floor area of circa 329,000 square meters. While not all projects will proceed, a robust future development pipeline will add significant value for both Cromwell and its capital partners. In August, we stated that the economic and social impacts of the pandemic would continue to cause uncertainty and dislocation throughout FY '22 and that this was likely to impact market activity and the timing of related transaction and performance fees. Given this economic backdrop, Cromwell elected not to provide guidance for the year but had sufficient confidence in the underlying strength of its people, platform and capability to confirm that it expected to pay -- continue to pay distributions at the quarterly rate of $0.01625 per security until further notice. This policy will be considered by the Board as part of the strategic review process. The September 2021 quarter distribution of $0.01625 per security will be paid this Friday, 19 November 2021. I have been in the CEO role for 6 weeks now, and while it's still early days, I really believe we are making constructive progress working with the Board and the executive team in setting the path to deliver on our key strategic priorities with a number of initiatives already underway, as Gary has mentioned. I am very conscious of the feedback that has been provided to us both by our retail and institutional securityholders. You have been very clear that you expect the Board to work together harmoniously and for us to get on with the job and focus on enhancing long-term value for securityholders. This is exactly what we intend to do. I would like to hand back to Gary for the formalities. Thank you.

Thank you, Jonathan. We now move to the formal part of the meeting. Cromwell Property Group is a stapled enterprise consisting of Cromwell Corporation Limited, which is referred to as the company; and the Cromwell Diversified Property Trust, the responsible entity of which Cromwell Property Securities Limited. Today's meeting is the Annual General Meeting of the company. I will now address the meeting formalities. Shortly, securityholders will be asked to vote on 6 ordinary resolutions to be put to at this meeting of the company. As Chair of the meeting, I've called for a poll on each resolution. So voting on the resolutions will be conducted on a poll. I appoint Matt Foster of Link Market Services as the returning officer to conduct the polls. I address the following comments to attendees of the Brisbane meeting location. First, securityholders and proxyholders who have registered to vote will have received a yellow voting card. You will use those cards as ballot papers for each poll. Only securityholders, proxyholders or duly appointed representatives or attorneys are entitled to vote. If you are voting on your own securities and as proxy or representative for securities of one or more other securityholders, you will have one yellow voting card for your own holding and one separate yellow voting card for all other security holdings which you are appointed as proxy or representative. If you are a proxyholder with a directive proxy, that is you have been appointed a proxy by a securityholder who has instructed you how to vote on the relevant resolution on their proxy form, you just need to hand in the yellow voting card when they are collected. You will be treated as having voted in accordance with those instructions. The for and against boxes will only be used to record open or discretionary votes, that is you have been appointed a proxy by a securityholder who did not instruct you how to vote on the relevant resolution on their proxy form. Nonvoting attendees at the principal meeting location will have received a blue nonvoting card. Visitors will have received a white visitor card. Turning now to those securityholders participating online, I'll make the following comments for your reference. Securityholders and any proxyholders holding open proxies will have received an electronic voting card on registration to enable you to cast your vote. If are voting on your own securities and as proxy for securities of one or more other securityholders, you will have one electronic voting card for your own holding and one separate electronic voting card for all other security holdings for which you are appointed as a proxy. Proxyholders holding directed proxies will have received an electronic voting card on registration, if requested, which notes that the proxyholder has no discretionary votes and the proxies are still lodged even if the voting card is not submitted. In line with statutory requirements, details of all proxies in respect of each resolution will be recorded in the minutes. Each Cromwell director who holds Cromwell Property Group securities has voted in favor of resolutions 2, 3, 4, 5 and, where eligible, 6. They have not voted on resolution 7 because they are excluded from doing so by the Corporations Act and the ASX Listing Rules. As Chair of the meeting, I intend to vote undirected proxies in favor of each of the resolutions. Cromwell securityholders and proxyholders will be provided with an opportunity to ask questions or comment on the resolutions. For attendees at the Brisbane meeting location, please use the microphone available. Before asking a question, please show your yellow voting card or blue nonvoting card and then state your name and, if applicable, the name of each securityholder you represent. For attendees participating online, you can ask a question by selecting the Ask a Question tab within the online platform. This year, securityholders can also ask questions verbally by phone. Information about asking a question by phone, including the numbers to dial to access the facility, is contained in the virtual meeting online guide. To ask a question by phone, securityholders must use the unique PIN that was provided when they registered with Link Market Services to use the facility. Please note that securityholders may not vote by phone. Visitors are not entitled to ask questions or make comments or vote. The business of today's meeting is described in the notice of meeting sent to securityholders, and I will take the notice as having been read. The minutes of the 2020 Annual General Meeting of the company were approved by the Board and are being signed as a true direct record. Those minutes are available for inspection by securityholders if required. The first item on the agenda is the consideration of reports. Cromwell's 2021 annual report has been made available to securityholders that contains the financial report, directors' report and auditor's report of the company for the year ended 30 June 2021. This item of business for consideration via the meeting has intended to provide an opportunity for securityholders to raise questions on the report and on the performance of the company generally. I now invite questions and discussions in relation to the company's 2021 annual report. If you wish to ask a question or make a comment, please wait to be acknowledged and then give your name. All questions and comments will be directed to me as Chair of the meeting. I will call on specific directors or senior management to respond to your questions or comments as necessary. Are there any questions or matters to raise in relation to [indiscernible] annual report?

Thank you, Gary. There are no questions here in Brisbane. Operator, are there any questions or comments from telephone participants?

No, ma'am, there are no questions on the audio call.

Thank you. Gary, we've received some online questions. I'll start with the first question. It's put to us by [ Steven Maine ], securityholder. The annual report notes that Gary Weiss took over as Chair in March 2021. Gary is arguably the busiest professional director in Australia at the moment. Why did he add the Cromwell Chair to his already very full dance card? And is he proposing to relinquish any of his other commitments?

Thank you, [ Steven ]. So you'd be trialing my annual meeting. So the response on this issue is the same as I've given previously. I'm very conscious of my obligations and commitments in terms of all the Boards that I sit on. I have no reason to believe that I'm not adequately and appropriately fulfilling my commitments and obligations to Cromwell.

Thank you, Gary. We have another question, and I'm going to direct it to you in accordance with the script. Also on item 1, consideration of reports. Could Jonathan place comment on whether he has had any contact with Paul Weightman to assist with understanding the full history of Cromwell? How embedded was the Weightman culture in the company? And has it been a challenge changing this culture?

I'll actually respond. Jonathan, as everyone is well aware, has only been with the group for 6 weeks. So he needs a period of time to familiarize himself clearly with the business. In addition, as will be -- everyone will be well aware, travel restrictions impede Jonathan's travel to the Brisbane office, and that is something that clearly Jonathan will look to do once all the restrictions cease. Next question, Lucy.

Thank you, Gary. Third one from [ Steven Maine ]. Did any of the 5 main proxy advisers in the Australian market, ACSI, ASA, Ownership Matters, Glass Lewis and ISS, recommend a vote against any of today's resolutions, including the remuneration report? Has there been a material proxy protest vote against any of today's resolutions? Will you disclose the proxy votes before the debate on today's resolutions so shareholders can ask questions if there have been any protest votes?

Thank you. The proxy results will be shown on the screen as we deal with each resolution. Lucy, perhaps you may be able to respond on the question of the proxy votes reports.

Taking them in turn, ACSI followed all of the Board recommendations. ASA followed all of the Board recommendations and was undecided on resolution 5. Ownership Matters followed all of the Board recommendations. Glass Lewis followed all of the Board recommendations. ISS followed all of the Board recommendations except for resolution 5, which they took an against position. Thank you, Gary. We have no further online questions or comments, Gary.

Thank you, Lucy. As I mentioned at the start of the meeting, David Rodgers is present at the Brisbane meeting location today. David is a partner of Deloitte Touche Tohmatsu, which is the auditor of the company for the 2021 financial year. Securityholders have the opportunity to ask Mr. Rodgers questions that are relevant to the conduct of the audit of the company, the preparation and content of the auditor's report, the accounting policies adopted by the company in relation to the preparation of the financial statements or the independence of the auditor in relation to the conduct of the audit of the company. I confirm that we did not receive any relevant questions on these matters prior to the meeting. Does any securityholder have question for the company's auditor in relation to any of the matters mentioned?

Thank you, Gary. We've received no questions or comments here in Brisbane. Operator, are there any questions or comments from telephone participants?

No, Lucy, we do not have any questions on the audio participants.

Thank you. And Gary, we've received no online comments or questions.

Thank you. As there are no questions, we will now move to the second item of business. Item 2 is a resolution relating to the reelection of Tanya Cox as director of the company. Tanya is an Independent Nonexecutive Director of Cromwell. In the notice of meeting, you can find Tanya's biographical details. The resolution reads that Ms. Tanya Cox, who retires by rotation in accordance with the constitution of Cromwell Corporation Limited and offers herself for reelection, is reelected as a director of Cromwell Corporation Limited. I now invite Tanya to give some comments to the meeting.

Thank you, Gary. My name is Tanya Cox, and I've been a Nonexecutive Director of Cromwell Property Group since November 2019. As an executive, my career spanned over 20 years in the banking and financing industry, primarily with blue chip organizations such as [ Bank and Trust ], Bank of New Zealand, Rothschild and Deutsche Bank. The last 11 years of my executive career I spent with Dexus Property Group as Chief Operating Officer and Company Secretary. And at Dexus, I had overall responsibility for the entire of the operations of the business as well as in latter the years, facilities management, property management, alternative income initiatives, energy efficiency and sustainability. Since leaving Dexus in 2014, I've worked as a nonexecutive director in various ASX listed and nonlisted companies, including property securities, property technology and property sustainability businesses. I'm also currently the Chair of the World Green Building Council, and I'm a director and past Chair at the Green Building Council in Australia. As a nonexecutive director of Cromwell, I've served as a member of the Audit and Risk Committee, and I'm Chair of the Nomination and Remuneration Committee. I'm also commenced as Chair of the Cromwell Retail Funds Management, responsible entity [indiscernible] in January of this year. As a director at Cromwell over the last -- my first 18 months, in fact, I've attended 86 Board and Board Committee meetings and worked with the Board as we oversaw Cromwell's response to the COVID pandemic, the ongoing review of the strategy and strategic direction of the business, a number of executive management changes, a review and resetting of the remuneration policy, and of course, the recruitment of our new CEO, Jonathan Callaghan. I'm a fellow at the Australian Institute of Company Directors, a fellow at the Institute of Chartered Secretaries & Administrators and a fellow at the Governance Institute of Australia. I'm also a member of Chief Executive Women and a member of St James Ethics Centre. And I look forward to continuing the opportunity to work with you if you so choose. Thank you.

Thank you, Tanya. Are there any questions or comments on the resolution?

Gary, we have no questions here in Brisbane. Operator, do we have any questions from telephone participants?

No, Lucy, we do not have any questions on the telephone line.

Thank you. Gary, we've received a question from [ Steven Maine ], securityholder. I'll direct it to you in the first instance. Could Tanya please comment on whether the Board has assessed whether Chair, Gary Weiss, has the time to remain as Chair of Cromwell and what her views are on whether Cromwell should have an Independent Chair as opposed to Gary who spearheaded the ARA campaign to oust Paul Weightman? As part of the pace, isn't it time to have an Independent Chair?

Tanya, would you like to address the question?

Yes, Gary, I'd be happy to. I think that securityholders know that Gary joined the Board in September 2020 and since that time has not failed to meet or attend any Board or Board committee meeting. Gary is a member of a number of the Board committees but not all of the Board committees, but has chosen to attend every single meeting since I've been here. The Nomination and Remuneration Committee has conducted a review of the performance of the nonexecutive directors. It does so every year and it did so in the middle of this year, and we satisfied ourselves that all of the directors who are putting a considerable amount of time into the Cromwell business have the time and availability and have demonstrated that through evidence. So we've been comfortable. Is there another half of the -- this is the biggest question you've ever said.

[indiscernible]

Thank you. Tanya, thank you. Lucy, any further questions?

No further questions, Gary. Thank you.

Thank you. In accordance with Section 250L of the Corporations Act, I've called the voting on this resolution to be conducted on a poll. I now put the resolution to a poll. For attendees at the Brisbane meeting location, please complete your yellow voting card for this resolution. Proxyholders holding directed proxies do not need to do anything at this time. Please reclaim your yellow voting card because you will need this to vote on the next resolution. For attendees participating online, please complete your electronic voting card for this resolution. Proxyholders holding directed proxies do not need to do anything at this time. The Cromwell directors unanimously recommend that shareholders of the company vote in favor of the resolution. Ms. Cox abstained from voting on the resolution. The proxies are displayed on the screen. Can you please complete your voting card now? Thank you. [Voting]

The next item of business relates to the resolution for the election of Mr. Eng Peng Ooi as a director of the company. Mr. Ooi is Cromwell's Independent Nonexecutive Deputy Chair, and the notice of meeting contains Eng's biographical details. The resolution reads that Mr. Eng Peng Ooi, who is eligible and having offered himself for election, is elected as a director of Cromwell Corporation Limited. I now invite Eng to give some comments to the meeting.

Thank you, Gary, and good afternoon. My name is Eng Ooi. As background, my executive career spans over 30 years in real estate and funds management, both in Australia and other international markets. I began my career as an accountant in Australia back in 1981 with Lendlease and spent 30 great years with them. During that time, I held various senior finance and operational roles across the various business sectors within Lendlease, including development, project management and construction, retirement living and funds investment and management. I also spent some time in corporate HQ, in corporate reporting and treasury. I spent 13 years [indiscernible] with Lendlease over 2 stints. The last stint was from early 2006 as the CEO of the Asian Investment Management and Retail Development business and concluding as the CEO of Lendlease Asia. During this period, I was responsible for investing, retail development, funds management, including capital raising, project management and construction business of Lendlease in Asia. Lendlease develop and manage retail assets in Singapore and Malaysia of around AUD 2.5 billion and raise international institutional capital for the first Lendlease Asian retail fund to co-invest in this development. It was also the first green shopping mall in Singapore, achieving the Singapore Green Building Council Platinum status, which is equal to the 5 star rating in Australia. During my executive career, I came to appreciate very early on that whilst creating value for securityholders and social responsibility, including sustainability, is very important, specifically involving of all employees and staff is the most important. In 2011, I retired from my executive role with Lendlease and remained in Singapore for a few years before returning to Sydney to be closer to my family. Since 2012, I have joined various Boards of listed and nonlisted companies in Singapore and Australia. My experience as nonexecutive director includes in Singapore as Chair of the Audit and Risk Committees of a retail REIT from 2012 to 2014; a real estate group from 2015 to 2020; and an industrial REIT from 2012 to 2016; and later, as a Chairman of ESR-REIT from 2017 in Singapore when ESR came and acquired a manager of an industrial REIT. In Australia, I was on the Board of Frasers Australia from 2014 to 2018 after they acquired Australand. As you may know, I recently joined the Board of the Cromwell European REIT, which is [ based in Singapore ] to share my [indiscernible] and international experience with the existing CEREIT Board and management group. I believe I can bring to Cromwell Property Group significant local and international experience in real estate, funds and investment management as well as skills in leadership, culture, people, risk management and experience in managing capital funds. The last 7 months with Cromwell Property Group had been very busy but rewarding, and the Board is working very well together. I will continue to work very hard and diligently for all stakeholders, and I look forward to your support if you so choose. Thank you.

Thank you, Eng. Lucy, are there any questions or comments on the resolution?

Gary, there are no questions here in Brisbane. Operator, are there any questions from phone participants?

No, Lucy, we do not have any audio questions.

Thank you. Gary, we have a question from [ Steven Maine ], securityholder. Could Eng Peng Ooi please state how the background as to how he came to be appointed as a Cromwell director? And has he ever personally met Gordon Tang? Was he comfortable with the campaign run against Paul Weightman to change the control situation on Cromwell Board?

I'm going to deal with that. Eng, as his background indicates, is one of the most highly credentialed people in the property industry, not only in Australia but indeed, particularly, in Asia, where, clearly, Cromwell already has a significant presence through CEREIT. So Eng was approached to become a director, and we're delighted that he agreed to accept that appointment. Is there any other questions, Lucy?

No further questions, Gary. Thank you.

Thank you. In accordance with Section 250L of the Corporations Act, I've called for voting on this resolution to be conducted on a poll. I now put the resolution to a poll. For attendees at the Brisbane meeting location, please complete your yellow voting card for this resolution. Proxyholders holding directed proxies do not need to do anything at this time. Please reclaim your yellow voting card because you will need it to vote on the next resolution. For attendees participating online, please complete your electronic voting card for this resolution. Proxyholders holding directed proxies do not need to do anything at this time. The Cromwell directors unanimously recommend that shareholders of the company vote in favor of the resolution. Mr. Ooi abstained from voting on the recommendation. The proxies are displayed on the screen. Please complete your voting card now. [Voting]

The next item of business relates to the election of Rob Blain as a director of the company. Rob is an Independent Nonexecutive Director of Cromwell, and the notice of meeting contains his biographical details. The resolution reads that Mr. Robert Blain, who is eligible and having offered himself for election, is elected as a director of Cromwell Corporation Limited. I now invite Rob to give some comments to the meeting.

Thank you, Gary. Good afternoon all. Most of my details have already been published. But I've had 40 years experience in property and real estate services industry, of which 22 of those have been based in Asia, '94 to '97 in Singapore and 2001 through 2020 in Hong Kong. During that time, especially over the last 15 years, I've had overall responsibility for CBRE's activities across the Asia Pacific region. I also was a member of the Global Operating Committee based in the U.S.A., which defined and drove the CBRE global business strategy. There are only 25 committee people representing global business [indiscernible]. I retired at the end of December 2019. I lived in Hong Kong and returned to Australia. From an operational point of view, my experience in Asia Pacific, in particular, I had oversight of 94 offices in 15 countries, which had approximately 19,000 employees. The primary focus was strategic development of the business with particular emphasis on client strategies, cross-border activity and cost flow and activity within the capital markets. When I joined CBRE in 2001, the regional revenue was USD 100 million with an EBITDA of 6%. On retirement, after 19 years, the regional revenues was USD 2.2 billion and an EBITDA of 11%. My primary focus, adding on to what I've already mentioned, is driving the value for stakeholders, with the senior leadership team solely focused on creating an integrated operational platform to enhance overall return to all involved. Governance is a pillar of any company. As the Section 16 officer of the New York Stock Exchange listed CBRE entity for 12 years, I've got a great understanding of the importance of the overall umbrella of governance. I was responsible for the Asia Pacific business, [indiscernible] and third-party audit. I joined the Board in March. At the Board level, I'm Chair of the Investment Committee and member of the Independent [indiscernible] and member of Nomination and Remuneration Committee. Finally, I [indiscernible] CEO and [indiscernible]. I'm confident with the [indiscernible] existing business as well as having a good understanding of the strategic direction for the future, Cromwell is in an excellent position for an extremely positive outcome. If elected, I assure you that my independence is there to represent all stakeholders, and I look forward to broaden my relationships with all involved. Thank you, Gary.

Thank you, Rob. Lucy, are there any questions or comments on the resolution?

Gary, there are no questions here in Brisbane. Operator, are there any questions from telephone participants?

No, Lucy, we do not have any questions on audio.

Gary, we've received a question from [ Steven Maine ], securityholder. Many thanks for disclosing all the proxy adviser recommendations and congratulations on winning their support with the exception of resolution 5. Does Robert Blain share the concerns of Glass Lewis about resolution 5? And did the independent directors express any concerns when Gordon Tang proposed nominating his 26-year-old daughter to the Board? Did the full Board interview any other candidates?

I'll respond to that. As was a feature of the ARA campaign for Board representation, the Board of Cromwell took the view that in all the circumstances, they felt that it was appropriate for major and substantial securityholders to have representation if they so chose to do so. That was a unanimous view of the Cromwell Board, which resulted in an invitation being extended to the Tang family with an aggregate [indiscernible] in excess of 15% of the issued capital of Cromwell to appoint a Board representative. And we're delighted that Jialei was their nominee. We'll come to Jialei's appointment in due course. Are there any other questions, Lucy?

Thank you, Gary. Another question from [ Steven Maine ], securityholder. Both Robert and Eng are excellent recruits given their deep property expertise. Thanks for the comprehensive speeches, too. Is Robert intending to buy any more Cromwell shares when the windows open?

So again, I'll respond on that. All directors are well aware of the policy in respect of security holdings in Cromwell. As has already been touched upon in both my remarks and Jonathan's, the Board has been heavily engaged in an overall review of strategy and direction for Cromwell. And in accordance with insider trading laws, the ability for members of the Board to acquire securities has been significantly limited. But all Board members are well aware of the policy and intend to comply with it in accordance with applicable laws and regulations. Are there any other questions?

No further questions, Gary.

In accordance with Section 250L of the Corporations Act, I've called for voting on this resolution to be conducted on a poll. I now put the resolution to a poll. For attendees at the Brisbane meeting location, please complete your yellow voting card for this resolution. Proxyholders holding directed proxies do not need to do anything at this time. Please reclaim your yellow voting card because you will need it to vote on the next resolution. For attendees participating online, please complete your electronic voting card for this resolution. Proxyholders holding directed proxies do not need to do anything at this time. The Cromwell directors unanimously recommend that shareholders of the company vote in favor of the resolution. Mr. Blain abstained from voting on the recommendation. The proxies in respect of this resolution are displayed on the screen. Would you please complete your voting card now. [Voting]

The next item of business relates to the election of Ms. Jialei Tang as a director of the company. Ms. Tang is a Nonexecutive Director of Cromwell, and the notice of meeting contains Jialei's biographical details. The resolution reads that Ms. Jialei Tang, who is eligible and having offered herself for election, is elected as a director of Cromwell Corporation Limited. I now invite Jialei to give some comments to the meeting.

Good morning, everyone. My name is Jialei Tang. I have extensive experience in international investment, executive and Board experience in diverse range of industries, including finance, real estate, hospitality, pharmaceuticals and technology. This experience I have largely gained as a director of my family office, including current executive director roles in real estate companies, Silver City Properties and Ariva Hospitality. In the real estate space, I have been deeply involved in the investment design and development of numerous projects in the retail, office and residential sectors with an aggregated value in excess of AUD 3 billion. This includes the new UBS Singapore headquarters and office and retail mixed use development. Outside of real estate, I'm on the Board of TauRx Pharmaceuticals Ltd, whose drug for therapeutic treatment of Alzheimer's disease is in its Phase III trials and will seek FDA, EMA and NMPA approval upon successful results. And I'm currently pursuing a Masters in Urban Planning at Harvard University while maintaining my executive and nonexecutive responsibilities. As we shift into a world that emphasizes sustainability, diversity and technological dexterity, it is important for Cromwell Property Group to understand and engage with these issues. My multi-culture experiences can provide such input to such narratives and Board discussions, while my professional and academic backgrounds can contribute practical perspectives. I'm also passionate about sustainability and will direct efforts to championing an increased focus on sustainability for Cromwell if elected as a Board member. In my personnel capacity, I hold 4.7% of Cromwell's issued securities. I have conviction in the strength of Cromwell's business and its prospects, and my interests are fully aligned with all of you, the securityholders of Cromwell Property Group. I shall certainly dedicate my best efforts in prioritizing the interests of securityholders in order to see growth in the value of their investments. My fellow securityholders, I look forward to serving you in your best interest should you so choose. Thank you.

Thank you, Jialei. Lucy, are there any questions or comments on the resolution?

Thank you, Gary. We have one question here in Brisbane from Kelly Buchanan of the Australian Shareholders' Association. Kelly, go ahead, please.

Good afternoon, Mr. Chairman. As Lucy said, I'm Kelly Buchanan from the Australian Shareholders' Association. We have a question about Ms. Tang. In addition to her being on the Board of Cromwell, she's the CEO of a property and investment management company in the United States. She's involved in acquisition, planning and development of real estate projects in Singapore. She's a member of the Board of Directors of a Scotland-based pharmaceutical company. She handles communication and philanthropy for her family's business interests in Singapore. And she's studying for Masters in Urban Planning at Harvard. By any measure, she's thinly stretched over multiple businesses in 4 different time zones. How will she have time to adequately carry out her Cromwell duties when she already has so many other commitments, not to mention any work-life balance that would help her in her decision-making processes?

Thank you. I'll address that. Obviously, Jialei, somewhat like myself as has been already remarked upon by an earlier questioner, has a number of commitments, but I can assure you that it's part of the process by which Jialei was appointed to the Board and invited to become a director of Cromwell. The Board was keen to ensure that Jialei had adequate time to meet her commitments and obligations as director of Cromwell, and I'm pleased to say that Jialei has faithfully attended every meeting of Cromwell to which she's eligible to attend. And the Board has no reason to believe that Jialei will not make herself available to promote the interest of Cromwell and to fulfill her obligations as a director. Are there any other questions, Lucy?

Kelly, are you asking -- no more questions?

No. Thank you for your answer.

Thank you. Gary, there are no more questions here in Brisbane. Operator, are there any questions from phone participants?

No, Lucy, we do not have any audio questions.

Thank you, Gary. We have an online question from [ Steven Maine ], securityholder. Could the Chair please explain why the notice of meeting didn't disclose that Jialei is the 26-year-old daughter of Gordon Tang, the controlling shareholder of ARA? Surely this should have been disclosed.

I don't think there's anything that requires addition to the notice of meeting and details in the notice of meeting. As has already been touched upon, the Tang family were invited to consider the appointment of a representative. And as I said before, the Board was delighted that Jialei was nominated as their representative. And the family, as I mentioned earlier, has a very significant holding in Cromwell. And as Jialei herself has observed, that share in her own right holds over 4% of the issued capital of Cromwell. Are there any other questions?

Another question from [ Steven Maine ], securityholder, Gary. Jialei is only 26 and is the daughter of Cromwell's major investor, Gordon Tang. Could you explain why she agreed to be one of her father's nominees on the Board and whether she agrees with all of the aggressive tactics deployed to oust Cromwell founder, Paul Weightman?

I don't think that's an appropriate question to be directed to Jialei. As has already been commented upon, the Tang family, the second largest securityholder in aggregate in Cromwell, were invited by the Board of Cromwell to appoint a representative. And as I said, again, and I repeat, the Board was delighted that Jialei was proposed as their representative. Are there any other questions?

Thank you, Gary. No further questions.

In accordance with Section 250L of the Corporations Act, I've called for voting on this resolution to be conducted on a poll. I now put the resolution to a poll. For attendees at the Brisbane meeting location, please complete your yellow voting card for this resolution. Proxyholders holding directed proxies do not need to do anything at this time. Please reclaim your yellow voting card because you will need it to vote on the next resolution. For attendees participating online, please complete your electronic voting card for this resolution. Proxyholders holding directed proxies do not need to do anything at this time. Cromwell directors unanimously recommend that shareholders of the company vote in favor of the resolution. Mr. Tang abstained from voting on the recommendation. The proxies are displayed on the screen. Please complete your voting card now. [Voting]

The next item on the agenda relates to the adoption of the remuneration report. The resolution reads that the remuneration report of Cromwell Corporation Limited for the financial year ended 30 June 2021 is adopted. I remind securityholders that this vote is advisory only and does not bind the directors of the company or the company itself. The notice of meeting contain details of the Corporations Act requirements in relation to voting on this resolution. Voting exclusions apply for this resolution, and those exclusions are stated in the notice of meeting. I take the notice as having been read. Are there any questions of comments on the resolution?

Gary, there are no questions here in Brisbane. Operator, are there any questions from phone participants?

No questions on audio part.

Gary, we do have a question from online. Just waiting for that to come through. It is a question from [ Steven Maine ], securityholder. Given the interesting discussions across a range of topics today, including this rem report, could the Chair undertake to make an archived copy of the webcast plus a full transcript of proceedings available on the company's website? Nine Entertainment Chairman, Peter Costello, who appreciates the benefit of a parliamentary hands-on transcript where MPs don't have to scroll through all videos to find out what was said, made this change last week and had a full transcript of Nine AGM online before the end of the day.

Thank you for the question. We'll take that on notice and look at the practicalities of implementing such a process. In accordance with Section 250L of the Corporations Act, I've called for voting on this resolution to be conducted on a poll. I now put the resolution to a poll. For attendees at the Brisbane meeting location, please complete your yellow voting card for this resolution. Proxyholders holding directed proxies do not need to do anything at this time. Please reclaim your yellow voting card because you will need it to vote on the next resolution. For attendees participating online, please complete your electronic voting card for this resolution. Proxyholders holding directed proxies do not need to do anything at this time. The Cromwell directors unanimously recommend that shareholders of the company vote in favor of the resolution. The proxies are displayed on the screen. Would you please complete your voting card now. [Voting]

The final resolution for today's meeting relates to an increase in directors' fees. The notice of meeting contain a commentary about this resolution. The resolution reads that for the purposes of ASX Listing Rule 10.17 and clause 68.1 of the company's constitution, the aggregate maximum fees payable to the directors, other than executive directors as a whole, be increased by $500,000 per annum from $1 million to $1.5 million per annum effective from 1 July 2021. Voting exclusions apply for this resolution, and those exclusions are stated in the notice of meeting. I'll take the notice as having been read. Are there any questions or comments on the resolution?

Gary, there are no questions -- yes, certainly, there's a question here in Brisbane. If you don't mind just identifying yourself, sir, before you ask your question. Thank you.

In 2018 capital raising, December, you raised capital at $0.98. The share price is now at $0.84. You're probably aware that when you decrease the distribution, naturally enough the share price is going to drop. Why do you ask as directors of this company for an increase in your directors' fees when the company is suffering in [indiscernible] by about 50% from $1.33 down to $0.84 over a period of 2 years?

So I'll deal with that. None of the directors present here in office in 2018. Clearly, I think we are all in an agreement that the current security price does not reflect the underlying intrinsic value of Cromwell. And we believe there are a number of reasons why that may be the case. And as has already been touched upon in my remarks and in Jonathan's remarks, the Board is actively reviewing the strategy with a view to simplifying the group and producing greater transparency in respect to the underlying assets and business of Cromwell, which we would hope would lead to a re-rating of Cromwell's security price in due course. Are there any other questions, Lucy?

No other questions here in Brisbane, Gary. Operator, are there any phone questions?

No phone questions at this time.

Gary, we've received no online questions. Thank you.

Thank you. In accordance with Section 250L of the Corporations Act, I've called for voting on this resolution to be conducted on a poll. I now put the resolution to a poll. For attendees at the Brisbane meeting location, please complete your yellow voting card for this resolution. Proxyholders holding directed proxies do not need to do anything at this time. For attendees participating online, please complete your electronic voting card for this resolution. Proxyholders holding directed proxies do not need to do anything at this time. The Cromwell directors as a whole abstained from voting on the recommendation in respect of the resolution and make no recommendation in view of the personal interest of nonexecutive directors on the matter. The proxies are displayed on the screen. Given online registration of voting open 30 minutes before the meeting started, the poll on this and all prior resolutions will remain open now for a further 2 minutes. Please complete your voting card now. [Voting]

Thank you, Lucy. I now declare the poll for the resolutions closed. For attendees at the Brisbane meeting location, please place your completed yellow voting cards and directed proxies in one of the ballot boxes being circulated by Link Market Services representatives. Lucy, at the Brisbane meeting location, has everyone with a yellow voting card completed and handed in the card?

Yes. Thank you, Gary. Yes, all yellow voting cards have been completed and handed to Link Market Services representatives.

Thank you. Now that we have dealt with these specific business of the meeting, in accordance with the requirements of Section 250S of the Corporations Act, I would like to offer securityholders the opportunity to ask questions about or make comments on the management of the company in addition to the questions or comments already made on the items of business earlier.

I will start with the following questions which we have received in advance of the meeting. Question: What initiatives has Cromwell put in place to help improve its performance and move the security price materially higher, improve earnings of the security and bring the security price closer to [ NTA ] for securityholders? As I mentioned earlier, the Board is very conscious of the performance of the security price and has a clear objective of unlocking value for securityholders. The Board has been actively reviewing Cromwell's strategy and business model, and this has been further developed following Jonathan's commencement as CEO. The aim of this review, as I've mentioned earlier, has been to simplify the group structure with a view to improving capital efficiency using our existing portfolio assets to create new funds and accelerate the growth in our fund management and development businesses. This review process is a priority for everyone involved, and an update will be provided at the half year results or earlier if appropriate. Next question. Has the Cromwell Board resolved issues with ARA, my appointment as Chair? And can they all work together for the benefit of Cromwell securityholders? The answer in short is yes. As I noted in my formal remarks, the Board has seen a refresh over the past year, including my appointment as Chair and 3 new nonexecutive directors. We are working together harmoniously and collaboratively with the aim of unlocking value for our securityholders. The next question reads, I understand Ms. Jialei Tang is part of the Tang Group. What are the intention of the Tangs and how do they align with Cromwell? Are there any joint ventures, cross-investments between the Tangs and ARA? And how does their presence unlock value for Cromwell and business? I observed that both ARA and the Tang family are entirely different entities. Jialei is the largest individual securityholder on Cromwell's register in her own right, and as I previously mentioned, holding over 4% of the capital, and actually, herself expressed, has a strong alignment to the interests of other securityholders. Next question. How specifically will the new major securityholders and Cromwell with their interest in Asia contribute to Cromwell's success? Clearly, I cannot speak for the specific investment objectives of third parties. Suffice it to say that the combined [ ISA ], ARA will be one of the largest real estate fund managers in the world. Having a relationship with an organization of that size and global reach can only be a positive for Cromwell. Next question. Does the Board intend to continue with the European strategy? The Board believes the European platform has significant potential, and the strategic review will consider how we can further and realize that potential. That strategy may change and evolve. We will work through the process and update you as we go. Next question. Is there a plan by Cromwell for further investment in Europe and other European countries besides Italy and Poland? The short answer is no. We are confident the European business has sufficient capital to grow and can do so by recycling the current capital committed into other opportunities. Next question. Is the plan to move away from retail shopping assets and focus on logistics distribution hubs? Cromwell's strategy was always to temporarily hold the Polish retail assets before finding a capital partner or partners or transferring them into a fund. The time frame for this was clearly impacted by the onset of the COVID-19 pandemic, but the fundamental strategy remains unchanged. With regards to logistics, Cromwell has been quite active in the sector on behalf of capital partners, in particular, setting up a fund for the Italian logistics portfolio, but it's unlikely to invest more of its capital unless it's within the sector until we make further progress on the fund. How does Cromwell intend to achieve its target gearing band of 30% to 40%? A successful sell-down of Cromwell's interest in the Polish retail and Italian logistics assets to capital partners in accordance with the agreed strategy is expected to support the paydown of debt and return gearing to well within the stated target range. Are there any further questions or comments on the management of the company, Lucy?

Yes, Gary, we've received 4 online questions. I'll start with the first one. It's from securityholder, [ Fred Pachia ]. In fact, there are 2 from [ Fred ]. I'll ask one before the other, Gary. The first one is confronted with a forthcoming challenging economic environment due to higher inflation and interest rates, what is the management's strategy to protect shareholders in terms of value share price -- value/share price and current dividend? [ Fred Pachia ].

Thank you. As I said, considerable work is going on to refine the business model and strategy for Cromwell. And I outlined in my remarks 2 particular initiatives that the Board currently has underway or is exploring. We are very conscious of the current inflationary pressures that are coursing through many economies as we emerge from the pandemic, and we will certainly have regard to the impact of inflation on interest rates. And of course, there is a very real question as to whether some central banks believe these current inflationary pressures are transient or rather more embedded. But these are matters that are constantly under review.

Thank you, Gary. [ Mr. Pachia's ] follow-up question is as follows. The Board will undertake a strategic review. When will this review be completed and disseminated to shareholders?

As I've indicated in my remarks, we've already called out 2 areas either underway or being explored, and we will update securityholders and the market generally on those matters and, indeed, any other matters that arise out of our continued review of the operations of Cromwell.

Thank you, Gary. We have 2 further questions. The first is from [ Steven Maine ], securityholder. Many thanks for reading out all questions and for also disclosing the proxy votes before the debate on each item. It was also a good effort to get director candidates to address the meeting whilst juggling unprecedented logistical challenges. It was a shame no questions came from Brisbane. Were there any independent shareholders actually in Brisbane? Best of luck with the turnaround ahead and well done on recruiting a highly regarded CEO. Gary, I'm...

Thank you, [ Steven ]. Lucy, you're present in Brisbane.

I'm here at control center, Gary, and I can certainly confirm that there are independent shareholders actually in Brisbane. And apologies to the gentleman in the front row, the question was launched before you asked your question. So please rest assured that we'll certainly record it. Thank you, Gary.

Thank you. Are there any other questions, Lucy?

Yes. One final one, Gary, from [ Steven Maine ], securityholder. Having come in cold on the early Board battles, it has been an enlightening AGM. Having listened carefully, on balance, I'm now a supporter of the coup and have confidence that we are pursuing the right strategies and have recruited the right personnel. That said, Chair, you probably need to address the work load issue at some point, but you do seem to be right across the issues every time you are grilled and you performed impressively at AGMs. Good luck.

Thank you, [ Steven ]. I think in the words of Oscar Wilde, the flatterer is seldom interrupted, so I didn't seek to intercede with any of your comments.

No further questions, Gary.

Securityholders -- I'm sorry?

There are no further questions, Gary.

Thank you. And I really would like to thank securityholders for their attendance today and particularly for their contributions. And we've had some interesting questions and comments, and I can assure you that your views are duly noted and taken into consideration by the Cromwell Board. The results of the poll for each of the resolutions as conducted and advised by Link Market Services will be counted. So we will close the meeting, and the results will be announced by the ASX as soon as they are available. In the absence of any other business lawfully brought forward or otherwise required to be dealt within this meeting, I formally declare the 2021 Annual General Meeting of Cromwell Corporation Limited closed. Thank you once again for your attendance and for your continuing support. Good afternoon.