Elders Limited (ELD) Earnings Call Transcript & Summary

Good morning, everyone. My name is Ian Wilton, and I am the Chair of your company. As it is now past 10 a.m. Adelaide time, I'd like to welcome you to the 2020 Annual General Meeting of Elders Limited. I'm advised by the company secretary that we have the required quorum for the meeting to proceed. I therefore, declare the 2020 Annual General Meeting of Elders Limited open. Welcome, and thank you for attending. I would like to begin by acknowledging the traditional custodians of country throughout Australia and their connections to land, sea and community. We pay our respect to their elders past, present and emerging and extend that respect to all aboriginal and Torres Strait Islander peoples today. Although we are not able to meet together in person, I'm pleased that we can come together virtually to update you on your company. Before convening the formal business of the agenda for this meeting, I would like to introduce my fellow directors and our company secretary. Due to social distancing and technology limitations, not all your directors are physically with me in the room today. With me at the desk this morning are: on my left, Mark Allison, our Managing Director and CEO; and further to the left, Peter Hastings, our company Secretary and General Counsel. Joining us remotely, we have Robyn Clubb. Robin is Chair of the Audit, Risk and Compliance Committee and a member of each of the other Board committees. Diana Eilert, Diana is Chair of the Remuneration and Human Resources Committee and a member of each of the other board committees. Matthew Quinn, Matthew was appointed to the Board in February this year and is a member of each of the Board committees. Mr. Andrew Forman of PricewaterhouseCoopers, the company's auditor, is also attending the meeting remotely to answer any questions you have relevant to the conduct of the audit and the preparation and content of the auditor's report. Finally, Mr. Richard Davey, our CFO, is also attending the meeting remotely. Before moving to the formal part of the meeting, I will briefly outline how I propose to deal with the business of the day, beginning with how to vote and submit questions. Voting on all resolutions to be considered at the meeting is now open. Voting takes place on the Lumi platform through which you have joined this meeting. The voting icon is the 3 bar graph icon that appears at the top left of your screen. Please refer to the slide I am displaying on your screen now for visual instructions. You do not need to push any button on your computer or mobile device to save or submit your votes as you select for, against -- for or abstain. Your vote automatically will be recorded. You may change your vote on Lumi until I declare the polls closed. Any change to your vote as the meeting progresses will be automatically recorded. This means that if you choose to vote early in the meeting and you experience any technical difficulties after you have voted, your vote will still be received and counted in the poll. I will endeavor to advise at the close of the poll on items 2 to 7 inclusive 5 minutes before the poll closes. Please note that if you have already voted by direct voting, or if you have appointed a proxy to vote for you, you are not able to vote today on Lumi. Only shareholders, their attorneys, proxy holders and authorized company representatives are entitled to vote on each poll. To vote, you must log in using the voting access code provided by our share registrar boardroom in order for the votes to be counted. If you are attending the meeting in multiple capacities, for example, as a shareholder and proxy holder, boardroom will have provided you with either multiple voting access codes or instructions on how to log in and vote. If you have not obtained a single voting access code allowing you to vote simultaneously in multiple capacities, you will need to log in separately for each capacity in which you are attending. A voting access code may be used to log into the meeting on 1 device only. Finally, anyone logged into the meeting as a guest is unable to vote. Shareholders, their attorneys and appointed proxies may also submit comments and questions from now on the Lumi platform on which you are watching this meeting. To do so, click on the speech icon on your screen. This will open a new screen with a section to type your question. Please refer to the slide displayed on your screen now for visual instructions. At the start of your question, please state your name and whether you are a shareholder in your own right or an attorney, proxy or corporate representative of a shareholder. Once you have finished typing your question, please click on the arrow icon to send it. Questions and comments submitted today are limited to 1,000 characters. So I encourage you to be succinct. If you have more than 1 question, do not hesitate to ask each of them separately. I will call for final questions towards the end of the meeting. Today's meeting will run in the following order: Firstly, I will provide a summary of the procedural rules applying to the meeting. Secondly, Mark and I will address the meeting. Thirdly, the meeting will consider the first 7 agenda items and 6 resolutions followed by a question-and-answer session. At the close of the Q&A, the polls will also close. We will pause briefly to review the results of the polls. If necessary, agenda Item 8, the spill resolution, will be put to the meeting. If this happens, I will open a second question-and-answer time. Once all questions have been answered, the question, facility and poll will be closed. And the result of the spill resolution, if put, will be announced. I will then close the meeting. I will now provide an overview of the way in which I will deal with your questions and comments. I would like to remind you that this is a shareholders meeting and only shareholders, their attorneys, proxies and authorized company representatives are entitled to make comments and ask questions. You may submit your questions and comments at any time until I close the question time. I will also pause briefly after each item is put to allow time to type and submit your questions and comments. After Item 7, I will answer the questions and read out the comments that you have submitted. During this time, I will try and answer questions on similar topics in groups. I will also wait a short amount of time after the last question to ensure any shareholder still typing has an opportunity for their question to be answered. If your question is the same or substantially similar to another question, I will answer those questions as one in the interest of meeting efficiency. Finally, shareholders are attending today's meeting to discuss matters of interest to shareholders as a group. If you have questions specific to your own shareholding that are not relevant to the group, we are happy to take your questions after the meeting either through boardroom or our company secretary. I turn now to the resolutions and voting. Our meeting today involves 8 items of business and 7 resolutions. The last item on the agenda, the spill resolution, is conditional on the result of the remuneration report poll. As required by the Corporations Act, I will only put that item to the meeting if 25% or more of the votes on the REM report poll are against adoption of the report. I will read out all resolutions as set out in the notice of meeting. The resolutions will also be displayed on the slides visible in the webcast. The polls will close on the resolutions related to items 2 to 7 at the conclusion of questions and answers. A short break will then be required to gather the results of the polls. In keeping with modern practice, I will not seek proposers or seconders for the resolutions. I trust that this approach will result in an efficient meeting. All resolutions will be decided by a poll. Shareholders should note that it is my intention to vote all open votes available to me in favor of items 2 to 7 and against Item 8, if that item is put to the meeting. I appoint Stacey Spence from BoardRoom Proprietary Limited, who is connected remotely today as returning officer. The returning officers duties are to a range for collection of all votes in accordance with the voting exclusions set out in the notice of meeting and to advise me of the results of the polls. Final voting results will be released to the ASX following conclusion of today's meeting. I now move to the formal business of the meeting. I've been advised by the company secretary that the notice of meeting has been properly circulated. And with your consent, I will take the notice of meeting as read. A copy of the minutes of last year's Annual General Meeting of the company held on Thursday, the 12th of December 2019, are available for inspection by shareholders. If you wish to inspect the minutes, please contact the company secretary after the meeting. Before tabling the financial report of the company for the year ended 30 September 2020, I will make some comments. The agricultural sector has withstood remarkable obstacles in a year full of volatility from extreme weather and natural disasters to the COVID-19 pandemic. Yet throughout, agriculture has emerged more resilient and continued to perform strongly as has Elders. FY '20 saw Elders close out our second 8-point plan, delivering consistent financial returns through the agricultural cycles and highlighting our advantage of being a pure-play agribusiness. This year's results highlight the resilience of our business. The benefits of our diversification across both geographies and products and our acquisition strategy. In FY '20, we recorded an underlying after-tax profit of $107.7 million, which significantly exceeded the results of FY '19 on both an absolute and an earnings per share basis. We are particularly proud of these results given they were achieved despite ongoing drought and bushfires in the first half of the year and without any government assistance in the form of Job Keeper or other COVID-19 support measures. Your Managing Director and Chief Executive Officer, Mark Allison, will go into more detail of our operational achievements in his address. However, from your Board's perspective, the results demonstrate the resilience of the Elders business model. The key focus of your Board is to maximize returns to shareholders. And I'm pleased to report the Board has announced a final fully franked dividend of $0.13 per share, taking the full year dividend to $0.22. Our number one priority at Elders is the safety of our people and this has been even more vital in a year filled with health and safety challenges. Mark Allison will address this in more detail, but I must reiterate the Board's strong support for organizational safety initiatives such as the Elders Safety 7 plan, our new safety and risk reporting tools and the way we have committed to ensuring our operations and workplaces remain COVID safe. Elders' response to COVID-19 has been a safety first program aimed at keeping our employees, customers, contractors and other stakeholders as protected from COVID-19 infection in the workplace as possible. While COVID-19 has introduced significant uncertainty, both globally and domestically, its impact on Elders in FY '20 were limited to short-term impacts. These included chemical supply chains, wool supply chains and livestock supply chains. Other impacts include real estate transactions and cross-border activities caused by regulation directed at limiting social mobility. In aggregate, however, these impacts were not material to Elder's financial performance and have meant amongst other things that we did not need to apply for Job Keeper assistance. Given the uncertainty caused by COVID-19, Elders chose in May of this year to secure from its financiers, an additional 2-year $50 million working capital facility and an increased committed limit of its debtor securitization program with an additional 12-month extension. Elders has since chosen to terminate the COVID-19 facility as it is now surplus to requirements. Moving to remuneration. Last year, we received a first strike against the remuneration report at the 2019 AGM. The feedback received from major shareholders and proxy advisers indicated this was largely due to our calculation and payment of one element of the FY '17 long-term incentive grant that vested in FY '19, this being the earnings per share measure. Your Board spent significant time in 2020, reflecting on improvements to remuneration arrangements and outcomes so that shareholder concerns could be thoroughly addressed. The Board completed a comprehensive review of executive remuneration practices with a focus on the remuneration strategy, frameworks, governance and decision-making processes. As part of this review, the Board also consulted with shareholder advisory groups and major shareholders. As a result, the Board has made several changes to our executive remuneration framework for FY '21. These are detailed in the FY '20 annual report. Last year, I committed Elders to matching the best governance and sustainability standards practiced by top Australia-listed businesses. Our disclosure of matters relating to sustainability were not considered best practice. I'm pleased we have taken initial steps to achieve this and have published our first sustainability report in this year's annual report. The report provides transparent and accountable measures of Elders actions and performance on material topics during the year and addresses a range of important topics from community impact and investment to climate change, health and safety, animal welfare and corporate governance. The results show our commitment to farmers and communities, keeping people safe and investing in the industry's future. I'm proud to highlight, in FY '20, we contributed over $1.5 million in donations and sponsorships to local community groups, industry innovation, health and well-being and grassroots supporting teams and events. This is just the start, and we need and intend to do more. In 2019, we spoke of strengthening the depth and breadth of skills, knowledge and experience on our Board. To that end, we welcomed to Matthew Quinn as a non-Executive director in February. You'll have the opportunity to hear from both Diana Eilert and Matthew Quinn, in items 3 and 4 of today's meeting as we address their reelection and election, respectively. The next period for Elders will be guided by our third 8-point plan, which takes us through to 2023. And as with the previous two 8-point plans, the third outlines how we will achieve our ambition of delivering consistent and compelling shareholder returns through the agricultural cycles. In this third plan, we have also introduced two new stated ambitions: to be the most trusted agribusiness brand in rural and regional Australia and to deliver authentic and industry-leading sustainability outcomes. The strategy will position us to achieve our goals. I have no doubt that the Elders team will again deliver admirably. Finally, on behalf of the Board, thank you to our over 2,100 people who continue to go above and beyond for our clients and our company. You have adapted admirably to the COVID-19 situation, finding new ways of working and keeping each other safe. And in times of crisis, you've been there for your clients and your communities. This was evident during the summer of bushfires, where Elders people fought fires, mend defenses, fed livestock, and provided a shoulder to lean on for so many. I would also like to thank my fellow directors for their support and input. And of course, thank you to our shareholders for your continued support. I'll now invite our Managing Director and Chief Executive Officer, Mark Allison, to give his presentation.

Good morning, and thank you for joining us online today for our FY '20 Annual General Meeting. We have long said that the Elders business is built on trust, respect and understanding. And in FY '20, Roy Morgan Research found that unprompted, Elders was the most trusted agribusiness brand in regional and rural Australia. We are very proud of our role in developing agricultural communities across Australia, and Elders has been an important ingredient in their success and development since 1839. Despite the unprecedented challenges we all faced in FY '20, our second 8-point plan ensured we are able to achieve a strong financial performance and continue to -- our commitment to making good money in bad seasons and great money in good seasons. In FY '20, we achieved an underlying after-tax profit of $107.7 million, an increase of some 69% on the FY '19 results. Underlying earnings before interest and tax was $120.6 million, a 64% increase on last year. This result highlights the resilience of our business model and represents outperformance against the second 8-point plan goal of 5% to 10% EBIT growth through the agricultural cycles. The result was driven by strong growth across all state geographies, products and services, combined with an ongoing, highly disciplined approach to cost and capital management and allocation. The performance of our rural products area was a highlight. The acquisition and integration of the AIRR wholesale business provided an EBIT contribution of $21.9 million and has exceeded business case expectations after only 10.5 months of ownership. We also made excellent progress on our backward integration strategy, selling more of our own TitanAg branded products at a higher margin. Elders return on capital of 18.7% was 0.5 percentage points up on FY '19. If the effect of the AIRR acquisition is excluded, our return on capital of 20.2% is in line with the 20% ROC hurdle, we set ourselves at the start of the second 8-point plan period. Following the declaration of the COVID-19 pandemic in March, we acted early and decisively forming a dedicated COVID-19 Response Committee. The committee oversaw several measures, including establishing new ways of working as well as contactless service arrangements in our branches and on farm. From an operational perspective, COVID-19 created supply chain disruption and border-crossing challenges for our business and for local communities to navigate. I commend our people for the resilience and adaptability they've demonstrated in maintaining our commitment to our clients through the COVID-19 period and delivering an essential service to Australia's agricultural sector. As our Chair highlighted earlier, an ambition and one of the key strategic priorities in our third 8-point plan is developing and delivering an authentic and industry-leading sustainability program across health and safety, community, environment and governance. This year, we published our first sustainability report, including a comprehensive review of our current initiatives and our future sustainability initiatives and targets. We believe that an authentic and industry-leading approach to sustainability will drive profitability and build a better business for our customers, our people, regional and rural Australia and our stakeholders to associate with, invest in and working. This program is underpinned by the following 4 key principles, which are integrated into our way of doing business: firstly, we provide our customers and clients with the goods and services they need; secondly, we support our people and the industries and communities in which we operate; thirdly, we do our part to look after the environment and the animals in our care; and finally, we operate ethically into the high standards of our One Elders values. Safety is embedded in everything we do and remain central to our operations and a priority for all of our people from the boardroom to the salad. Our new safety 7 plan outlines his commitment to care for our people and those who we interact with each and every day. This year, we reintroduced our successful standup speak up safety video series to the business a new has at an instant reporting tool for more accurate and efficient reporting and new capital equipment to ensure the safety of our team at our Killara feedlot. In FY '20, we reported 2 lost time injuries, which represents a significant improvement on the 9 lost time injuries recorded in the FY '19 period. Nonetheless, we strive for 0 workplace injuries. Our first 8-point plan was developed 6 years ago, working with 40 of our most senior managers. Having exceeded our commitments of the first and second 8-point plans, we have now launched our third 8-point plan, which will guide us through until the end of FY '23. In developing the third 8-point plan, we worked with our investors and key stakeholders to set appropriate objectives. In this plan, our ambition is to achieve 5% to 10% growth in EBIT and earnings per share through the cycles at a minimum of 15% return on capital. The 5 strategic priorities for the next 3 years include winning market share, capturing more gross margin, strengthening and expanding our service offerings, optimizing our feed and processing businesses and further developing our sustainability program. Our 3 enablers for the third 8-point plan include our systems modernization program, developing the best people in a safe and inclusive environment and maintaining our unflinching financial discipline. Continuing to deliver on the synergies available to us through our acquisition of AIRR and TitanAg, will be a key focus in capturing more gross margin. While we have made good progress, there's more value to be realized through further utilization of our warehouses, consolidation and streamlining procurement of products across both businesses and enhanced margin management and marketing. None of this will be possible without our enablers, including continuing to invest in our people, maintaining financial discipline and embarking on a new systems modernization program, which is currently in the design phase. The outlook for Australian agriculture -- for agriculture commodity production in markets gives us reason for optimism with an average summer crop being forecast. This is in contrast to the relatively low summer crop activity in recent years. We are also hopeful of emerging stability in our export markets following the signing of the regional comprehensive economic partnership. This has set the platform to deliver opportunities for greater integration of regional supply chains for ASEAN, North Asian countries and China. The current geopolitical issues are of concern to Australia and the agricultural sector more specifically. Although recent history is a testament to the Elders business model remaining resilient under both domestic and international challenges. Through this very challenging year, I've gained great comfort from our people controlling what we can control and remaining focused on what's important, namely the health and prosperity of our people, the communities we serve and our shareholders. Elders is very well set to deliver the third 8-point plan due to its strategic clarity, highly diversified business model, strict financial discipline and a commitment to keeping the safety and prosperity of clients, communities and staff across Australia, always at the forefront of our actions as we move into a 182nd year.

Thank you, Mark. I now table the financial report for the company, together with the Director's report, an independent audit report for the year ended 30th of September 2020. I remind you that you may submit a question and vote at any time before the polls close. Questions on items 1 to 7 will be considered together after these items have been put to the meeting. I will now move on to the resolutions before the meeting. The first resolution relates to the company's 2020 Remuneration report, which can be found on Pages 88 to 107 of the company's 2020 annual report. Agenda Item 2 is shown on the slides that are visible on the webcast. The resolution is the same as the resolution in agenda item 2 of the notice of meeting. The resolution states that the remuneration report, which forms part of the Director's report for the 12-month period ended 30 September 2020, be adopted. Please note that the Corporations Act provides that the vote on this resolution is advisory only and does not bind the company or its directors. Notwithstanding that, that the vote is advisory, the company respects the views of shareholders, and we welcome feedback from you pursuant to this item of business. We have taken the feedback provided by shareholders and others on the company's 29 remuneration report very seriously. As a result of the feedback received, we have conducted a comprehensive review of executive remuneration. Details of our response and changes to executive remuneration have been included in the 2020 report. If 25% or more of the votes cast are against this resolution when the poll closes, the conditional resolution in Item 8 will be put to the meeting. Any votes by key management personnel and their closely-related parties, other than votes exercised by myself as appointed proxy for other shareholders, will be disregarded. The proxy and direct voting details are displayed on the slides visible in the webcast. By way of reminder, all votes cast today will be added to those already cast by shareholders who voted before the meeting using the direct voting facility. I will now pause to allow shareholders to submit questions and vote. But please remember, questions will be addressed after Item 7 has been put to the meeting. [Voting]

I now move to the second resolution, which relates to the reelection of Diana Eilert as a director. The resolution is the same as the resolution in agenda item 3 of the notice of meeting. That Diana Eilert being a director of the company, who retires pursuant to Rule 815b of the constitution of the company and being eligible is reelected as a Director of the company. Diana has been a nonexecutive member of the Board since the 14th of November 2017 and was elected by shareholders that same year. Her skills and experience are set out in the notice of meeting. Diana is currently chair of the remuneration and Human Resources Committee and a member of the Work, Health and Safety Committee; Audit, Risk and Compliance Committee and Nomination and Prudential Committee. Diana is considered by the Board to be an independent director, and her nomination for reelection has the unanimous support of the Board. Diana has prepared a statement regarding her reelection.

Good morning, fellow Elders shareholders. My name is Diana Eilert, and I'm sticking reelection for a second term as an independent nonexecutive Director of Elders. I've been a member of the Elders Board for 3 years and for the past 12 months, I've also chaired the HR and Remuneration committee. I bring to Elders more than 30 years' experience as an executive and non executive. And with particular emphasis on running large businesses on technology and digital expertise and customer strategy. My executive career, including running businesses. The most substantial, which was with Suncorp, which is an ASX top 20 company. I ran the entire insurance business of Suncorp, including GIO and Suncorp brands. At the time, the business generated revenue of more than $2.5 billion and $700 million to a profit before tax. Following the insurance role, I ran technology, HR and marketing for the entire Suncorp group. In an earlier phase of my career, I consulted to large businesses on their strategies, their customer strategy, data and technology as a principle with AT Kearney and a partner with IBM. I also ran strategy and corporate development for News Corp., the time when the disruption of the traditional print and video businesses was taking hold. Since 2012, I've worked as a non-executive director with diverse companies. These include ASX 100 businesses, governments and very early stage start-ups. The industries I've worked with include water, electricity, data and data analytics, insurance, property and global education. I've also chaired 4 separate people and remuneration committees. Of course, I have a passion for Matt as rule. Some of my early years were spent on a farm with my first score being a school of 8 children in Genola New South Wales. My family continued to have small farm holdings, and I know spend most of my time at our small farm on the New South Wales South Coast, where we have some cropping and beef cattle. Elders is one of Australia's iconic companies and most trusted brands. Under the leadership of Mark Allison, the company has gone from being very financially stressed to a very solid diversified agricultural business. As Elders enters the next phase of growth, my skills and experience in customer strategy, data and technology will be very valuable. I bring to the Board diverse experience, long-term thinking and an independence of thought. I'm delighted to offer myself for reelection, subject to your vote. Thank you.

Thank you, Diana. The proxy and direct voting details are displayed on the slide shown in the webcast. I will now pause to allow shareholders to submit questions and vote. But please remember, you may submit questions any time until the polls are closed, and they will be addressed after item 7 has been put to the meeting. [Voting]

I now move to the third resolution, which relates to the election of Matthew Quinn as a director. The resolution is the same as the resolution in agenda item 4 of the notice of meeting. That Matthew Quinn, having been appointed by the Board since the last annual General meeting, who retires in accordance with Rule 815a of the constitution of the company and being eligible, is elected a Director of the company. Matthew was appointed by the Board as a non-Executive director in February this year. He is also a member of each of the Board's committees. Matthew's skills and experience are set out in the notice of meeting. He is considered by the Board to be an independent director, and his nomination has the unanimous support of the Board. Matthew has also prepared a statement regarding his election.

It was a great honor to be invited to join the Elders Board earlier this year as an independent non-Executive director. I live in-country New South Wales, and I'm passionate about the Australian rural sector and its essential place in the fabric of the country and indeed, the important role it plays in the global economy. In my executive career, principally as CEO of Stockland, I learned a lot about leadership, strategy and operational excellence that serve me well in being able to make a positive contribution to Elders. Since I finished my full-time Executive career some 8 years ago, I have deepened my experience as a nonexecutive director. And I'm fully aware of the responsibilities that come with the role and my obligation to bring a balanced care and independent judgment to the Board table. Our primary responsibility is non-executive directors is to ensure that CEO and management team have the right strategy in place and the right operating model to deliver good returns for our shareholders and meet the social license we have with the broader community. Mark Allison and the team have done a wonderful job in turning around the fortunes of the company over the last few years, and they have reaffirmed Elders as the preeminent agricultural services company in the country. I've joined the Board at the perfect time when Mark and the team with the support and guidance of the Board, can use this strong foundation to take Elders to new heights. I look forward to playing my role in achieving this and delivering strong returns for our shareholders. Thank you for your support today and in giving me the opportunity to be part of such an iconic Australian company. Thank you.

Thank you, Matthew. The proxy and direct voting details are again displayed on the slide shown in the webcast. I will now pause to allow shareholders to submit questions and vote. [Voting]

I now move to the fourth resolution, which relates to the proposed grant of performance rights to the Managing Director under the company's long-term incentive plan. The resolution is displayed on the slide in the webcast and is the same as the resolution in agenda item 5 of the notice of meeting. The proposed resolution is that for the purposes of ASX listing Rule 10.14 and for all other purposes, the grant of 101,000 performance rights to the Managing Director and Chief Executive Officer, Mr. Mark Charles Allison, on the terms specified in the accompanying explanatory notes be approved. Your Board believes the incentive arrangements for our MD and CEO, Mark Allison, are an essential and key component to achieving our long-term goals. The terms of the proposed grant are set out in the notice of meeting. A number of the terms of the grant have been adjusted from prior years to address the feedback received regarding the FY '19 remuneration report. The directors believe the terms and the conditions of the grant are both balanced and challenging. The incentive is aligned with shareholders' interests. If the rights proposed to be granted to Mr. Allison vest in their entirety, benefits will flow to shareholders by way of growth in shareholder returns and improved earnings per share. The proxy and direct voting details are again displayed on the slide shown in the webcast. Any votes cast on this item by or on behalf of Mark Allison, or any of his associates or by a member of the key management personnel and their closely related parties, acting as a proxy, will be disregarded. Exceptions to this are set out in the notice of meeting. I now pause again momentarily to allow shareholders to submit questions and vote. [Voting]

I now move to the fifth resolution, a proposed change to the company constitution, we're crying -- sorry, requiring the resolution to be passed as a special resolution. This means that at least 75% of the total votes cast must be in favor of the resolution for it to be passed. The resolution is displayed on the slide in the webcast and is the same as the resolution in agenda item 5 of the notice of meeting. The resolution states that for the purposes of Section 136(2) of the Corporations Act and for all other purposes, the constitution of the company be amended in the manner set out in the accompanying explanatory notes with effect from the close of the meeting. This change to the constitution has arisen due to a change in the ASX listing rules. ASX-listed entities that issue or have issued restricted securities must now have certain provisions in their constitutions. So Elders does not presently have restricted securities on issue or any current intention to issue such securities. The amendments are sought now to ensure that your company is not impeded by a lack of constitutional provisions if they become relevant at a future date. The proxy and direct voting details are displayed on the slide shown in the webcast. I will now pause again to allow time for questions to be submitted and votes to be cast. [Voting]

I now turn to the seventh item of business. The reinstatement of the proportional takeover rule in the constitution. This is another special resolution, which to be passed requires 75% of the votes cast to approve the resolution. The resolution is displayed on the slide shown in the webcast and is the same as the resolution in agenda item 5 of the notice of meeting. It states, that the proportional takeover approval rule in the form of Rule 6 of the company's constitution as last approved by shareholders on the 14th of December 2017, be reinstated in the constitution for a period of 3 years from the date of meeting. Rule 6 of the constitution prohibits the company from registering a transfer of shares resulting from a proportional takeover scheme unless and until shareholders in a general meeting approve the offer. This rule is designed to assist shareholders to receive proper value for their shares if a proportional takeover offer is made. In accordance with the Corporations Act, this rule ceases to have effect at the end of the third anniversary of its adoption. As Rule 6 was last approved by shareholders in a general meeting on the 14th of December 2017, Rule 6 has ceased to have effect, but may be reinstated if it is approved again today. The notice of meeting sets out the information required by the Corporations Act in relation to this resolution. The directors consider that shareholders should have the opportunity to vote on a proposed proportional takeover bid. Without Rule 6, a proportional takeover may enable control of the company to be acquired by a party holding less than the majority interest and without shareholders having the opportunity to dispose of all their shares with the attendant risk of shareholders being left as part of a minority interest. Rule 6 prevents this situation arising without shareholder approval. The proxy and direct voting details are again displayed on the slide shown in the webcast. The directors unanimously recommend that shareholders vote in favor of this resolution to ensure that any takeover proposal is a full bid unless shareholders approve a proportional bid. I now pause again for the final time before we begin to answer questions. To allow time for questions to be submitted and votes to be cast. [Voting]

Your views as shareholders are very important to us, and we are always eager to receive your feedback. I will now allow reasonable time for shareholders to ask questions or make comments on the management of the company, the remuneration report and other items of business before the meeting today. Questions will be read out before they are answered, beginning with questions received in writing prior to the meeting. I would like to remind you that those logged in using a voting access code may also continue to submit questions online until I advise this question-and-answer time is closed. I will endeavor to ensure that all relevant questions are answered prior to the close of this question-and-answer session.

Prior to the meeting, the Board received 2 questions for which answers have been prepared. Therefore, I would like to take this opportunity to advise that the polls on items 2 to 7 will close at the conclusion of this question-and-answer time. I anticipate this will be in approximately 3 or 4 minutes' time unless additional questions are received online today. As noted earlier, Mr. Andrew Forman of PwC, the company's auditor, is also connected remotely to answer any questions you have relevant to the conduct of the audit and the auditor's report. Prior to the meeting, no questions have been addressed to Mr. Forman. Will the moderator, please read out the first question.

Chair, the first question comes from Helen Hasen. Helen asks, when is the Board going to restrict the remuneration packages of Board members and executives to no more than 10 times the amount paid to the lowest worker. Bonuses should be stopped.

Thank you for your question, Helen. I would like to say at Elders, we do not have a policy of restricting the remuneration packages of Board members and senior executives to no more than 10 times the amount paid to the lowest paid worker. I also note that bonuses are not paid to our non-executive directors. Our remuneration principles, policy and framework are designed to support the delivery of Elders' strategy, drive long-term shareholder value, reward and retain key talent and the attraction of talent to Elders. Incentives are earned by employees across the whole organization and all employee salaries are reviewed annually. We believe our remuneration framework is objective, applied consistently and in line with best practice.

Thank you, Chair. The next question comes from Shapria Ranganathan. Shapria asks, as an agribusiness, Elders is in a unique position of being able to go beyond carbon neutral and become carbon negative. What is Elders doing in being environmentally responsible?

Thank you for your questions, Shapria. Elders takes environmental risk, sustainability and responsibility very seriously. Our ambition is to develop and deliver an authentic industry-leading sustainability program with disclosures aligned to the TCFD recommendations. Next year's sustainability report will disclose our progress. We have identified climate change, water availability and energy and waste management as the key environmental topics that matter most to our stakeholders. We have multiple initiatives to address these issues. Some of the key activities we are involved in are improving energy efficiency across our business, industry research to increase productivity and lower emissions of livestock and feed supplements, improving water use efficiency at our Killara feedlot, recycling chemical containers, reducing paper waste within our branches, supporting our clients to improve the sustainability of their own farming operations. More specific detail of our sustainability activities and initiatives is available in our sustainability report included in our annual report. I will now pause briefly to allow any final question still being typed to be sent and received. Moderator, have any further questions been received?

Chair, there have been 3 questions. The first question is a comment from Australian Shareholders' Association. Item 1, financial statements and reports. Ken Wakeman of the Australian Shareholders' Association representing 48 shareholders and almost 300,000 shares. Mr. Chairman, I would like to thank you, together with the CEO and the company Secretary, for meeting with us prior to the AGM. We note the excellent results and appreciate the improvements to the annual report. Together with 3 other South Australian companies, we consider it to be a model annual report. The ASA supports all motions with the exception of the spill motion should this be put to the meeting.

Thank you, Ken. We very much appreciate your support.

Second item from the Australian Shareholders' Association in regards to the remuneration report. We found the remuneration report to be clear and concise with many improvements, particularly around the explanation of STIs and LTIs. However, we are disappointed that you do not take the opportunity to move to a 4-year time horizon for LTIs. With Elders' market cap continuing to move up the ASX, we encourage the Board to consider moving to a 4-year time horizon in the future.

Ken, we note your comments and acknowledge that some companies are moving to a longer horizon. However, our own 3-year 8-point plan is closely linked to the long-term incentive arrangements for our executives. And I think until we move away from that 3-year cycle, it would be wrong to move to a 4-year period for the LTI, but we will continue to keep it under consideration.

Thank you, Chair. I have a final question from Mr. Thomas Line. With Agtech advancing rapidly globally, how is Elders positioning itself to be a future, if not current supplier of critical ag tech, does LDs -- does becoming a significant revenue driver within the next 5 years?

That's a very interesting question, and thank you. It's certainly something that's very much on our watch list, if you like, we're developing a range of best-of-breed options for our customers. I might ask Mark to answer and give you a few more specific examples of what we're doing.

Yes. Thanks, Ian. And I think the Elders has been at the forefront in a lot of the early development of ag technologies. Certainly, in bringing a Vogue Ag, which is a premier event with 1,500 specialists from around the world coming into Melbourne over the last few years. Our sense is that we're currently, as we noted in the preferred 8-point plan, our systems modernization program as a critical platform for us to really launch strongly into this area. Currently, we have a number of ag tech initiatives. And we're very, very supportive through our agronomic services through Thomas Elder Institute and Thomas Elder Consulting in driving these initiatives forward. But there are multiple areas, and there's a nice overlap with our sustainability initiatives because a number of them are actually run in parallel, whether it's through precision agriculture, variable rate fertilizer use, monitoring of watering for remote livestock. So they do run hand-in-hand, but it is a critical issue that we're driving along with the industry. And one of the limitations, I think everyone is aware, is the connectivity around regional rural area, where there still are a number of black spots. However, we're comfortable and confident that good infrastructure work is being done there as well.

Thanks, Mark. Well, thank you, everyone. As no further questions have been received. I'm now advised that the polls on items 2 to 7 and the ability so questions are closed. We will now review the preliminary outcome of the polls, including item 2, which is the resolution to adopt the 2020 remuneration report. Please note that these are results -- these results are preliminary, and final results will be announced to the ASX after the meeting. While we collect the voting tallies, I would like to take this opportunity to share something that demonstrates the support Elders and Elders people provided to our rural communities during our grueling summer of bushfires earlier this year. [Presentation]

A summary of the preliminary voting outcomes is now displayed on the slide visible in the webcast. As shown on your screen, all resolutions put to the meeting have been passed, including the resolution to adopt the 2020 remuneration report. We thank you for your support and welcome your ongoing feedback so that we may continue to make appropriate improvements to our remuneration structures. That concludes the formal business of the meeting. I will arrange for the results of all polls to be announced to the ASX. Thank you for joining us. I hope you have found the virtual format to be both easy to use and effective. We're sorry we've not been able to catch up face-to-face, including for an informal chat after the meeting as we normally would. Thank you for your attendance at this year's Annual General Meeting.