EML Payments Limited (EML) Earnings Call Transcript & Summary

Welcome, everybody, and good morning. Welcome to the 2022 EML Payments Annual General Meeting. My name is Peter Martin. I'm the Non-Executive Chairman of EML and Chairman of the meeting here today. I'd like to start the meeting by acknowledging the traditional owners of the land on which we meet today, the Gadigal people of the Eora Nation and pay my respects to their elders, past and present. I extend that respect to Aboriginal and Torres Strait Islander people here today. Thanks for attending today's meeting. It's hard to believe that this is the first in-person AGM since the COVID-19 pandemic began in March 2020. It's a pleasure for the EML Board to be present in Sydney today to meet investors in-person once again. May I ask you to make sure your mobile phones are switched to silent while the meeting is in progress. And I'll also ask you to note where your nearest exit is in the unlikely event that it becomes necessary to evacuate the building. In the event of an emergency, please follow the instructions of the venue staff. The notice to convene this meeting has been made available to all registered shareholders. The necessary quorum is present here today, and I'm pleased to declare this meeting open. Today's meeting is being conducted as a physical meeting. For shareholders unable to attend in person, we've provided an opportunity to lodge a proxy or a direct vote and ask questions in advance of the meeting. We'll film the meeting for the purposes of making it available to shareholders unable to attend. A recording of the AGM will be available on our website as soon as possible after the meeting. I'll now explain the running order for today's meeting before making my main address. Emma Shand, EML's Managing Director and Group CEO, will then provide her presentation. We'll then attend to the formal business of the meeting. I'd like to take this opportunity to introduce my fellow directors joining us here today. Emma Shand is the Managing Director and Group CEO; Tony Adcock, Independent Non-Executive Director and Chairman of the Audit and Risk Committee; David Liddy, Independent Non-Executive Director and Deputy Chairman; Melanie Wilson, Independent Non-Executive Director and Chair of the Remuneration Committee. And we also have today Brent Cubis, who is incoming -- an incoming Independent Non-Executive Director, who puts himself forward for election at today's meeting to join the Board effectively on 6th February 2023. I'd also like to introduce Rob Shore, our Chief Financial Officer; Sonya Tissera - Isaacs, Company Secretary; Ryan Chellingworth, Group Investment Relations Officer; and Stephen Tarling of Deloitte Touche Tohmatsu, the company's current auditor, who are also present. During the formal part of the meeting, I'd ask you to restrict your questions to matters concerning the resolutions. Shareholders will be given the opportunity to ask questions in relation to each resolution. Following the conclusion on the formal business of the meeting, shareholders will be given an opportunity to ask any further questions of the Board and management. Turning to my main address. And what a year it's been. The world has changed dramatically in the last 12 months. We've seen many countries in the world, including Australia, slowly emerge from COVID restrictions. There's a horrific war in Ukraine. There's global supply issues. Interest rates are rising across economies and there's global energy security issues, all contributing to global uncertainty. Stock markets, in general, have taken a big hit. In particular, the fintech sector has retreated in dramatic fashion. As far as EML is concerned, it's been one of the toughest years in our history. Our market cap is the lowest since 2016. It's clear that uncertainty about EML's future prospects has led to a loss of confidence and contributed to the fall in market value. I'm referring particularly to the continuing regulatory issues in our Irish subsidiary, PFS Card Services and our U.K. subsidiary Prepaid Financial Services and also the related costs associated with those issues. As previously advised, we've already taken a provision for potential fines from any enforcement action. Despite our genuine efforts, there's been a lack of clarity about what these issues mean to EML and how we are going about fixing the problems. I and the Board do take full responsibility, and we're determined to rectify both of those issues. Just to clarify, these particular business units contribute 45% of fiscal 2022 revenues. So not the entire business. It's important for shareholders to understand that the respective regulators being the Central Bank of Ireland and the Financial Conduct Authority in the U.K. have actually given approval for them to grow, although with some restrictions. And that's during the remediation processes, which we now expect to complete during 2023. Clearly, EML is also wearing significant costs to fix the regulatory issues we face in our General Purpose Reloadable business. However, in the medium term, we anticipate that the overheads to income ratio will decline driven by cost savings and growth across the businesses as outlined in the strategic review that you'll hear more about from Emma shortly. The Board is very cognizant of the impact of the share price decline on our shareholders. And thanks to you, for your patience and sticking with us. We are determined to reverse the trend. But realistically, that won't happen overnight. It has become very clear to the Board that EML needs to fundamentally transform and streamline our business to successfully compete and grow in what is a hypercompetitive global fintech environment. In July of this year, Emma Shand, our new CEO, took the reins from the outgoing CEO, Tom Cregan, who resigned after being in the role for 11 years. Emma is eminently suited to this role. She's had 25 years of experience in international management in particularly financial market infrastructure. She's led complex technology and transformational change programs. She's worked around the world as a senior executive with NASDAQ for over 17 years. EML is extremely fortunate to have a leader of her caliber in these times. She leads by example and the company will benefit hugely from her knowledge, commitment and drive. Whenever Emma was appointed, the Board approved undertaking a comprehensive root and branch, strategic review of the company's operations. In finalizing the strategic plan for EML's future, the Board has decided to not proceed with the buyback at this time, although capital management remains an important agenda item for the Board in the future. Emma's brief was to formulate a strategic plan to transform the business, plus review and strengthen our technology platform and data. No stone has been left unturned. A critical part of the plan is to embed a robust risk, compliance and regulatory culture in all aspects of EML's business operations. Emma and her team have also identified the most attractive growth segments available to the company. And she'll talk more about the strategic plan in some of those initiatives shortly. EML also had some significant successes in 2022. Our Gifting business is growing steadily. Our businesses in Australia and the U.S. and our Sentenial/Nuapay open banking business in Europe are unaffected by the regulatory concerns in our U.K. and Irish subsidiaries. Despite the challenges, payment volumes are up over 300%, primarily due to the acquisition of Sentenial. Group revenues grew 21% to $234 million. However, the EBITDA declined 4% due to the increasing costs, primarily across our European business. We're also winning top-tier customers, including major banks and governments in the U.K., Europe and Australia. Given the very significant future opportunities we see for the company, we are substantially strengthening our senior management team, particularly in Europe. Fiona Flannery, who is CEO of our Irish subsidiary, PCSIL, is here today sitting in the front row. We're also adding senior management talent across a range of areas of the company. Board renewal is also a significant item on my agenda. We recently announced Brent Cubis as a new Non-Executive Director commencing in February next year. Brent is here today and will introduce himself later. Brent brings deep experience as a Non-Executive Director, Advisory Board Member and International Chief Financial Officer across a variety of sectors, including health, financial technology, media and hospitality. I'm delighted to welcome Brent who will make an excellent addition to the Board. Also, given the center of gravity of the EML business is now actually in Europe, we're presently seeking European-based non-executive directors with deep payments, regulatory and technology expertise to add to the Board. I anticipate we'll make a further European Director appointment announcement in the very near future. In conclusion, I'd like to thank all our EML employees for working incredibly hard to deliver to our customers through some very challenging times. The Board and I would also express thanks to our shareholders for investing in the company and your patience as we work through this difficult period. I'm confident that the changes we're making will strengthen EML and return us to a strong and sustainable growth path. I'd also like to thank our Board members for their support, hard work and commitment during the past year. It's now my pleasure to invite Emma, your Group CEO, to address you. And following Emma's presentation, we'll move to the formal part of today's meeting. Emma Shand.

Good morning, ladies and gentlemen. Welcome, and I thank those of you who have joined us today for your continued interest and investment in EML. I'm honored to address shareholders at my first AGM as CEO of EML. This is an important day in EML's journey. We are turning a new chapter. I want to share with you today the outcomes of the strategic review, which I have led after having a good firsthand look at the company's global operations. I want to make it clear from the outset that this strategic review is not simply my observations with a fresh set of eyes. The review has been an enterprise-wide data-driven review of the global business and broader market setting. Whilst the review has identified a number of shortcomings, which must be addressed as an absolute priority, I'm confident that we can address these challenges and build EML into a highly competitive value proposition for our stakeholders. It won't happen overnight, as Peter said, but we can do it. I will start with the observations and current assessments and then address the plan for action and change. For those new to EML, we serve a broad range of corporates, governments, banks and payment service providers across Australia, Europe, the U.K. and the U.S. We offer gift, incentive, disbursement and reloadable cards and newer innovations in payments, including open banking and real-time payments. The breadth of EML's offerings and industry sectors is unrivaled in the payment space and we're highly regarded for our tailored, feature-rich, white-labeled solutions. Of EML's 7 acquisitions between FY '15 and FY '21, 6 were prepaid card businesses. However, there are challenges. The acquired businesses have largely been left to operate in silos, missing an opportunity to integrate, extract synergies and align culturally. We have regulatory remediations underway in our European and U.K. prepaid reloadable card businesses and unintegrated acquisitions bring with it fragmented technology and processes, many of which are manual and a longer time to market for our solutions. Data is also fragmented, impacting operational efficiency and masking valuable insights into customer and product profitability. Our employees have sought a clear vision for the future and a remote first working stance has limited opportunities for genuine collaboration. Finally, while EML's point solutions are well appreciated by our loyal client base, these highly bespoke point solutions are not easily scaled, and we currently serve across 10-plus industry verticals. These are challenges that we have identified and will be addressed by our new strategy. This strategic review also looked beyond the business and into its global markets. In the hypercompetitive world of payments, it is essential to business strategy to be sure we have an objective view of what forces are at play and how EML should position itself to win. It is clear that the future of payments will be different. I believe the payments industry will go through a period of radical transformation. Traditional players will need to challenge their payment strategies and operating models to ultimately offer value beyond the combined -- confines of traditional transactions. Several forces are reshaping payments. They are becoming more instant, frictionless and embedded within customer journeys. Technology advances and an often prescriptive stance taken by governments and regulators to introduce market competition have heralded new infrastructure approaches. These new infrastructures are real-time payments, message and transportation protocols and more affordability in cross-border flows. Open banking is set to become a game changer. Adoption rates are certainly increasing. In the U.K., for example, there were 2.8 million users at December 2020. Today, there are more than 6 million users. And at current growth rates, almost 2/3 of the adult population of the U.K. will be users of open banking by the end of next year. Open banking puts customers firmly in control of their data, identity and ability to initiate payments disbursements and/or collections. Despite recent headwinds, Buy Now Pay Later will continue to evolve and grow. However, players in this space will need to maintain a viable operating model to deliver sustained profitability and consumer protection given the rising cost of capital and increased regulatory scrutiny. Digital wallets and the drive towards a holistic customer experience before and after payments have seen the rise, particularly in Asia, of the super app as a one-stop shop, not just for managing finances but supporting the lifestyle journey of users. Embedded payments are expected to scale, constituting the largest subsector within embedded finance where their market value is estimated to be approximately $4.5 trillion by 2030. Embedded payments are associated with business models where nonfinancial services companies; think Uber, Shopify, offer payment functionalities to their business customers. So businesses, be they B2B2C or B2B2B, are themselves adopting a platform or a marketplace approach, providing their customers with more personalized, frictionless experiences. No conversation about the future of payments would be complete without touching on digital currencies. But importantly, it's the initiatives underway from central banks worldwide in their evolution of central bank digital currencies, which is of greater interest. This signals not only a new payment method, but new infrastructure, enabling instant atomic settlement through distributed ledger technology. This brings with it programmability, smart contracts and tokenization. It's a space to keenly track over coming years. The bottom line from all of these developments is that to have an enduring right to play in the future, payments companies will have to offer specialized product and customer value propositions. These products and value propositions will need to be driven by meaningful data insights, underpinned by scalable technology and have compliance and operational capabilities that allow quick time to market and quick time to value. So given this backdrop, EML certainly has a clear strategic imperative to develop new capabilities and offerings and also to change. I and the EML team are truly excited by that opportunity. Firstly, though, we must rebuild confidence and trust with all our stakeholders. We must focus on today's customer needs and innovation whilst operating within our risk appetite. We must be clear on purpose and vision and empower our people to deliver on it every day. We must continuously assess megatrends and public policy reshaping payments. We must foster financial safety and inclusion in the community. Today, we start a 3-year transformation to focus the business for responsible growth and to be future fit to successfully compete in the world of payments over the coming 5-plus years. The 3 pillars of our transformation are Elevate, Streamline and Reposition for Growth. We will elevate our European U.K. remediation efforts, embedding a strong risk aware culture in our business. This is the strengthening of the core that will hold us in good stead as we navigate a rapidly evolving payments and regulatory landscape. We will streamline customer and operational efficiencies. There are levers we are looking to pull to drive better operating margin. Repositioning for growth entails transitioning the base and evolving from prepaid cards into an embedded finance leader in 4 sectors. Our transformation strategy will be driven by 5 key enablers. We will define and clearly articulate one set of purpose and values to define and reinforce our culture across all operations and regions. We will be a product-led company, compliant by design and with strong technology capabilities in PayTech and RegTech. Data is both a key enabler and asset from which to unlock value, helping us deliver on strategy. So with that overall strategic framework, let me now describe each of our 3 transformation pillars in some more detail, starting with Elevate. The current regulatory remediations are a clear catalyst for this pillar of our transformation strategy. However, it's important to understand that our efforts and the implementation of technology, processes and controls will endure long past remediation. The Irish subsidiary remediation program commenced in June 2021, as many of you know. We expect a full embedding of controls and completion of a third-party assessment prior to the expiry in December next year of the Central Bank of Ireland's material growth restriction on the business. Given commonality of framework design and controls, the remediation of our U.K. subsidiary, PFS, it's commenced and has targeted a completion in line with that of its Irish subsidiary, PCSIL. The remediation itself is focused on design framework and controls across 5 key areas that I thought I'd share with you today. One, proportionate governance and risk management control mechanisms and procedures; two, conduct and culture guided by robust risk management frameworks and consumer duty policy and procedures; three, an accretive and sustainable business model with adequate financial resources and timely regulatory returns; four, operational resilience; five, financial crime prevention through robust Anti-Money Laundering and Counter-Terrorism Financing Control frameworks and risk assessment. Moving to our Streamline pillar of the strategy. As Peter said, an examination of all aspects of EML's business and operations revealed a significant opportunity to enhance customer and operational effectiveness. The priorities fall into 6 key areas across our business. Customer journey and service delivery will be transformed, including automated onboarding, life cycle management and customer self-service portals. We'll be rightsizing the organization with a structure aligned to strategy and simplifying the operations over time. For example, consolidating regulated and nonregulated entities, ensuring we responsibly optimize tax benefits and R&D in jurisdictions in which we operate. We will also rationalize legacy and duplicative technology and modernize technology and operating platforms. We'll create a single source of data, which will provide operational insights to inform decision-making and automated and low-touch processes spanning finance, regulatory reporting, customer and partner services. We'll also form a centralized technology, operations, innovation and delivery hub to serve EML's targeted business lines as well as new payments frontiers. This will focus on more disciplined supplier and vendor management via global procurement to drive cost savings. Finally, we will strengthen compliance, which will be based on tech-enabled behavioral science modeling to enhance controls and regulatory horizon scanning to inform our product roadmaps and preparedness for new developments. To our third pillar, Reposition for Growth. There is a significant and exciting opportunity to evolve our business over time from being predominantly in prepaid cards, to an embedded finance leader within the next 5 years. We've identified 4 attractive sectors. The first is financial services with embedded payment solutions. Secondly, human capital management, which is the way people get paid and also get rewarded for their work. Thirdly, retail, which is more than gift cards. And finally, government, where there is a growing drive to really replace cash and paper-based payments with digital alternatives. The global addressable payments market for the 4 sectors is large at $704 billion, and this represents 70% of the total addressable payments revenue globally. Our serviceable market, which looks specifically at the regions, we want to focus our growth opportunity is $114 billion. Today's penetration of this serviceable market for EML is 0.15%, so we have a great opportunity to grow our share of customer wallet and capture new business. These 4 sectors are strategically a great fit for EML. They house a significant portion of our customer base and product offerings today. Focusing on these 4 sectors will enable us to bring together previously siloed solutions into a more feature-rich product that services an industry. The financial services market is significant, and we believe the serviceable market size is $23 billion with a 5-year CAGR of 6% within the regions we serve. Real-time banking -- 24/7 banking and digital payments and the growing importance for identity security in the digital world are all key trends that will drive opportunities in revenue for a provider like EML. We've invested in integration and connectivity with most U.K. and European banks through open banking and also provide more traditional account-to-account processing services to 3 of the top 7 U.K. banks. Combined, this gives us the platform to reposition our prepaid wallet service to actually move into fintech, non-lenders or non-bank lenders, I should say, and corporates, creating a more embedded payment experience for customers. So there's a clear pathway to replicate this offering as open banking adoption continues a pace, while growing our embedded suite of payment services. Human Capital Management is a market that is growing and evolving rapidly with an estimated total revenues of more than $53 billion and a 5-year CAGR prediction of 6%. Employees are increasingly wanting on-demand pay, essentially, people receiving their wages as they earn them, allowing them to better manage their cash flows. They also see work has been more than just money and our solutions help employers enhance their employee value proposition. EML has a strategic advantage to play in this area. We have an established footprint and credibility with the large enterprise customers in this space. And here, especially in Australia, where we service over 90% of the salary packaging market. Again, linking identity and account-based EML solutions with our traditional white-labeled prepaid solutions enhances how we serve both employers and employees. Retail is the third sector we'll focus on. We have relationships with over 1,000 customers across retail, a service or a sector rather that has a serviceable market size of $23 billion with strong growth over the next 3 to 5 years, a 7% CAGR. EML currently serves predominantly shopping mall clients with well-packaged repeatable product offerings across cards. There is an opportunity to transition and expand into account-to-account and open banking offerings. We have the potential to serve brands and wholesale clients and move further into e-commerce, especially in Europe and North America, where 50% of our existing customers already have an e-commerce presence. Government is our fourth sector with a serviceable market being $12 billion and growing at 8% CAGR. Governments are undertaking major digital transformation strategies, including the digitization of cash and paper-based payments, particularly in Europe. The rising cost of living is driving a greater need for welfare support and inclusion programs in the community. We are recognized today as a leader in the U.K. with a proven track record working with national government agencies and over 100 councils. Moving beyond cards and focusing on identity and account-based disbursement solutions, we will be able to lift the experience of beneficiaries to more mainstream payment solutions, driving real financial inclusion. We also see opportunities for open banking to offer new ways to service government's wider payment needs, for example, supplier payments. So what does success look like for EML in the next 1, 3 and 5 years? Our business will look fundamentally different. We will be focused on 4 sectors and be a leader in the embedded finance space. We will optimize operations. Our structure, aligned to strategy, will be leaner and we will have more standardized scalable products. We will have the right talent in the right roles and we'll have fewer technology platforms. We will have one source of data to drive our decision-making and build stronger relationships with our customers, at the same time as delivering them a better customer experience. We will have successfully concluded our remediation programs in Ireland and the U.K. and we will also have robust risk and compliance frameworks with a risk aware culture across our whole organization. We have a target of controllable cost out of the business of 10% to 15% commencing in FY '24 with full impact in FY '25. We will deliver our first sustainability report with benchmarking against recognized ESG standards in FY '24. I am confident we have a strategy to build a strong and resilient and profitable company, delivering long-term value for shareholders. I look forward to updating you on the execution of our strategy at our half year results in February and every 6 months thereafter. So if we now look back over the financial year of 2022, it was a mixed year for EML. Gross debit volumes increased 308% to $80.2 billion. This included a 9-month contribution from Sentenial - Nuapay acquisition. Revenue was up 21% to $234.1 million. While the underlying performance of the business was solid, significantly increased costs impacted EBITDA down 4% to $51.2 million. Underlying business overheads increased 41% due to a need to increase resources in our European operation to manage regulatory challenges. Moving on to the Q1 update for you. So performance in Q1 FY '23 has been challenging with results significantly behind the prior corresponding period on an underlying basis. We have presented the results on an underlying basis to exclude the impact of $14 million of costs relating to European regulatory matters, one-off restructuring, executive retentions and European fraud costs. Revenue was down 5% or $2.3 million versus PCP. However, the period -- the prior period included $5.3 million of one-off revenues relating to several nonrecurring items, including breakage and establishment income relating to the one-off stimulus programs that we had that year. The impact of those items also reduced gross profit by $3.5 million. Overheads were up 29% on PCP. Although Q1 FY '23 overheads were behind Q4 FY '22 overheads, we expect further costs to be incurred throughout FY '23 in managing our regulatory measures. So looking at Q1, we saw General Purpose Reloadable volumes were up 9% on PCP with solid growth in core Australian and European programs. The GPR revenue yield was lower than PCP as it was impacted by the nonrecurring items outlined previously. On a positive note, the Gifting segment has commenced the key seasonal trading period pretty strongly. GDV is up 30% on PCP for the 6 weeks leading up to 20 November, driven by incentives and with malls up 20%. Given the seasonality in this segment, GDV in the 2 weeks leading up to Christmas will drive segment performance. In Digital Payments segment, which includes Sentenial, volumes were lower than Q4 FY '22, and this was due to lower direct debit volumes. So the focus of this segment is very much on open banking, where volumes were up 40% on PCP. Open banking annualized revenue as of October is now running at $6 million versus $4 million at March 2022. Nuapay has been successful in contracting with many large organizations and the focus is now very much on revenue conversion, aided by the recruitment of a partnership success team and measures introduced today in our strategy. As we move through FY '23, the interest benefits we flagged at the full year results are being delivered with $2.5 million of net interest income in Q1 FY '23 versus $1.4 million throughout the full 12 months of FY '22. We had previously forecast interest of $10 million in FY '23. However, as interest rates continue to rise, for the month of November, we now estimate that EML will make $1.8 million of net interest income, which equates to an annualized run rate of $21 million. Consequently, we have increased our FY '23 interest rate guidance from $10 million in August 2022 to a range of $17 million to $21 million. Now turning to our FY '23 guidance. Further investment is required to complete the remediation programs and commence streamlining our business. As previously noted, Non-recurring Account Maintenance Fee revenue of $17.9 million will not recur in FY '23. However, we assume that Gifting volumes will not be impacted in a similar way to FY '22 when there was the impact of the Omicron variant. As noted, we expect benefits from the normalization of interest rates to their historic low levels or from rather their historic low levels and expect this to add between $16 million to $20 million to EBITDA. Annualization of our investments made in FY '22 and further investment that is required to transform the cost base in the medium to longer term will result in an increase to the cost base of $27 million to $37 million in FY '23. As a result, our guidance for FY '23 is revenue of between $240 million to $260 million, gross profit margin of approximately 67%, overheads of $135 million to $145 million, underlying EBITDA of $26 million to $34 million. The guidance numbers exclude the $14 million of one-off costs we previously noted. We will adopt a similar approach for the rest of the year. So while it's a tough period for the company, I want to recap the key points of the strategy. We have a 3- to 5-year plan to transform this business. It will be fundamentally different. It will be stronger, more efficient and more profitable in the future, creating long-term value for you, our shareholders. We are changing this business to be an embedded finance leader over time so that we can be a strong competitor and stay at the forefront of the payments industry. We will have a laser focus on the execution of this strategy. The hard work starts now. Thank you for your support.

Thanks very much, Emma. It's now time to address the formal business of the meeting. I want to make some comments on the second item on today's agenda, the remuneration report, Resolution 2. I hope you can see that. It's very difficult to see even from here. But based on the direct votes and proxies lodged ahead of the meeting, EML is likely to receive a first strike on the rem report. This is obviously a disappointing result, but we'll take this outcome into account and review our remuneration structure in FY '23 to consider opportunities to further align the structure with company performance and longer-term shareholder value. Proxies received -- valid proxies have been received from shareholders for a total of 164,053,673 shares, representing 43.8% of the company's voting shares. The notice of meeting sets out 5 items of business. A poll will be conducted on each resolution. Conducting the formal voting by poll will ensure that the views of all shareholders who wish to vote are represented, including those who have lodged valid proxies and direct votes in advance of today's meeting. The direct and proxy votes for each individual resolution will be displayed on the screen. As far as voting procedures are concerned, upon registering your attendance of the meeting, you'll be handed a registration card or have been by a representative from the company's share registry. It's only those shareholders with a green card who can vote on the items business at the meeting. If you have a yellow card, you can ask questions, but you can't vote. And as a reminder, visitors holding a red card are not eligible to vote or speak at the meeting. It's a bit like the World Cup. For efficiency, I'll put all resolutions to the meeting and advise the proxy voting for each and provide shareholders with an opportunity to ask questions in relation to each of the resolutions. I'll then ask all those shareholders with a green voting slip to follow the instructions on that paper and vote on all 5 resolutions. I've nominated Emma Khoury of Link Market Services Directors Returning Officer for today's meeting. Once you've completed your voting slip, please hand it to Emma Khoury for processing. While the votes are being calculated, we'll take questions from the floor before determining the outcome of the poll vote. Votes will be counted and the results notified to the ASX before the end of today and posted on the company website. Does anyone have any questions on the proposed format of today's meeting? Okay. Now turning to the first item of business, the financial statements. The first item of business in today's meeting deals with the presentation of the annual financial report of the company, for the financial period ended 30 June 2022, together with the declaration of the directors, the directors' report and the auditor's report. No resolution is required to be moved in respect of this item. However, shareholders are now invited to ask questions and make comments on the accounts and on the business, operations and management and performance of the company. Shareholders may also ask the company's auditor, Stephen Tarling of Deloitte Touche Tohmatsu, questions relevant to the conduct of the audit, the preparation and content of the independent audit report, the accounting policies adopted by the company in relation to the preparation of the accounts, the independent -- independence of the auditor in relation to the conduct of the audit. So if you have any questions, please put up your hand. Yes, sir.

I've got a question that relates to governance issues. And very briefly, I'd like to say, can the EML Board and Chair explain the circumstances around the resignations of 2 EML directors 2 weeks apart in July 2021. For one director, Kirstin Ferguson, Chair of Culture, Governance and Nominations Committee to resign may be considered unfortunate. For the second, well-credentialed U.S. based Director George Gresham of 14 months on the Board to shortly followed that resignation, in my view, raises potential red flags. Mr. Gresham's resignation in such a short period of time is highly unusual. Furthermore, was there any discord months [indiscernible] prior to these resignations that would explain those resignations. With discord related to share sales by directors, potentially breaching company's governance rules. And would the Board be prepared to cooperate in enabling examination of the Section 247A of the Companies Act, the minutes of Board meetings and any external advise that the Board may have received on such issues since July 1, 2021?

Okay. I can certainly answer the first questions. Kirstin Ferguson did resign from the Board. At the same time, she also resigned from another Board. She advised the Board that she was completing a book and that she had to free up her time to complete the book, which actually I think was published a number of months later. George Gresham, certainly resigned from the Board. George's reasons for resigning were his -- let's say, he was an American-based Director, resident in Colorado. We found the demands of the activities there are incredibly time-consuming and demanding. And we had, I think that particular year, we had -- I can't remember how many Board meetings, but we had a lot of Board meetings, and George was on the calls almost 24/7, well, calls not every day, but many, many different calls. The issues of share trading, we have explained to the market numerous times that EML has a share trading policy and that we are very careful to ensure that any share trading that occurs, occurs in relation to that policy, and that is, in fact, what happened in that instance. Personally, I've made it very clear to the market that I will trade shares periodically. In fact, I made statement about it 3 years ago. I think saying I will trade periodically small parcels of shares as I think as is my right, seeing I've been a shareholder for over 10 years and still hold 6.6 million shares. And that was made very clear to the market, and we always enforce the share trading policies of the company through the letter.

So I take it you had no objection incorporating with Section 247A making the company's [indiscernible], available for inspection by shareholders as requested.

That would be a question I'd have hand pass to our general counsel.

[indiscernible].

Thanks, Paul. Any other questions?

Just to clarify 100%, you are saying that there has been no direct trade between [indiscernible].

Correct.

That is my understanding, is that's correct?

Yes.

Okay. And could I just clarify with you -- I presume so that you are a very thorough reader of Board papers and management reports. That would be the case?

Yes.

And in April this year, one presume you would have read that report that the budget papers or financial reports would have told you the business was tracking all into budget, yet you executed a trade setting aside that intelligence 2 weeks before and earnings downgrade.

Could you explain that to me again? What you're -- you're saying that...

Well' I'm trying to understand that your decision to trade in April when the company was 9 months into a financial year, presumably, your Board papers addressed the financial performance against budget, Yes? And then you chose to set aside that intelligence to execute a trade that in 2 weeks later we've seen earnings downgrade. So I think there's a number of shareholders that are concerned about that conduct. The window may have been open but it goes to your personal judgment.

I think if you will recollect, we made an announcement to the market relating to that share trading. The share trading was done absolutely in complete accordance with the internal policies of the company. And the reality with the company like EML, which I think has been explained, is that it is never clear until the numbers are put together exactly where the company is going to be at any period of time. If there's any inside information, we're in a trading blackout. And that's something I enforce rigorously for myself, our Company Secretary enforces, our General Counsel. So we have very strong policies around that. So that what you're implying did not occur and that was explained very clearly to the market at the time.

[indiscernible].

Sorry?

[indiscernible].

It may not show any of those things because those conclusions are made at the time just prior to an announcement as we gather information from our global operations.

[indiscernible].

If there was -- can I just explain, if there was any information that wasn't -- was material would have been made available to the market and there would -- or there would have been no trading occurring. Our policy is to look very carefully at all the information available to directors and employees of the company. If there's any information that's not available to the market, we don't trade.

Can I ask this in another way? At the time, just before you sold your shares, would you have been aware that the company was relying on getting the CBI to approve its new bond issuance in order to get a $6 million interest benefit in order to meet guidance? Were you aware that the company was on track to get that in order to meet guidance or not?

That's a difficult question to answer. I can't remember the specifics of those sort of line transactions that you're referring to.

With the Board minutes show that the management was indicating that the company was running behind meeting or ahead of budget. And was it dependent on this CBI approval of this bond issue?

I'd have to go back to those Board minutes to see what those Board minutes are saying because I mean, that's a level of detail that I don't carry around in my head. All I can stress is we and I and any members of the Board and management do not trade shares if there's relevant material information that the market should be aware of. Any other questions? Okay. Let's move on to Resolution 2, which is the directors' remuneration report. The second item of business concerns the adoption of the remuneration report for the company for the year ended 30 June 2022. I put to the meeting that shareholders consider, and if in favor, to pass the following advisory resolution under Section 250R2 of the Corporations Act that the remuneration report for the financial year ended 30th June 2022, be adopted. Proxy votes received in respect to this resolution as displayed on the screen. Now look, I'm sorry, they're very difficult to read.

Anyway we can wide that up a little bit, Mr. Chairman?

Look, I'm not certain. We'd have to -- I don't think we can, actually. I can't even read them from here to be honest.

[indiscernible]

Are there any questions on the resolution? There's no further questions. I'll move on to the next resolution. I think this is relating to my re-election. So I'll turn it over to the Deputy Chairman, Mr. Liddy.

Thanks, Peter. Look, before I put the resolution to you, I'd like to make some comments. As you can see from the proxy votes or maybe you can't. So I'll read them out. Can you read them out?

Okay. Can everyone hear me? Okay. For the 76,536,404 votes For; Open, 1,094,103; and Abstain (sic) [ Against ], 79,826,489. The percentage is 48.61% or 0.69% for Open and 50% Against, sorry.

Could you repeat that again?

Sorry, the number of shares?

The percentages.

The percentage, it's 50.7% Against and 48.61% For.

What's the number of votes Against?

79,826,489. And that's the total amount of issued capital that was available is 42.10%.

So as you can see from the proxy votes that we've just read out, Mr. Martin's re-election is a very close call and a successful outcome really does rest of your votes to be conducted by poll today. I feel it's really important to point out that Peter's chosen or elected not to vote his own personal shares, which are about $6.6 million in favor of his own re-election. And I think that's really important point of independence that Peter is displaying. We all acknowledge the decline in share price that the company suffered. I can absolutely confirm that at all times our Board did not lose focus on our key responsibility to U.S. shareholders. However, as I know you will appreciate, it is the role of management to manage and the role of the Board to set the strategic direction and oversee management. The Board can really only operate effectively if provided with appropriate information from management and where necessary, challenge that information. As Peter said, it's clear that uncertainty about EML's future prospects has led to a loss of confidence in our business, leading to a significant fall in market value. Our past 2 years difficulties relating to the continuing regulatory issues in our Irish subsidiary, PFS, Card Services, and our U.K. business, Prepaid Financial Services have been well announced to the market. And Peter has led the way forward in addressing our issues, particularly with the CBI remediation program. He has led from the front on all aspects of restoring future value for our shareholders and is absolutely committed to the future success of EML. He is personally involved himself with the CBI and FCA having met with them recently and is guiding our new CEO, Emma Shand, in developing our strategic direction and embedding successful business model for future shareholder benefit. Peter is the right person to lead a revitalized Board and management team towards success, and I encourage you to support Peter in his re-election. So the resolution is that Peter Martin, who retires by rotation in accordance with Rule 3.6A of the company's constitution, and being eligible, offers himself for re-election, to be re-elected as a director of the company. You've already seen the proxy votes or who had heard the proxy votes. Mr. Martin will not vote on this matter. Are there any questions on the resolution?

My question was on the tenure of the board, whose current board is [indiscernible] in position for some execs spend more than 10 years, [indiscernible] requirements and suggestions that you [indiscernible] Where is the renewal coming from and when is it going to happen, we've had lots of promises [indiscernible] see as before here today, but there's no costs involved in what that's -- what they're trying to [indiscernible] shareholders. The buyback is [indiscernible] because the capital is going to be okay to [indiscernible] costs. So what the shareholders are looking at for the next 20 years of offers right, there's no dividends and it's not even [indiscernible] exactly where the costs are going to be. In fact the suggestion I take away from the presentation is the problem with [indiscernible] there's not enough detail to shareholders there to understand what's going on. [indiscernible] the Directors aren't accelerating that process [indiscernible]

Okay. Take your point. Look, there is a renewal process in place. As the Chairman indicated, Brent will join our Board in February or earlier. We're in the process of electing or probably in the long end of it, 1 Director in Europe, and we're reasonably confident there's another Director that we'll be able to appoint in the near future. As we appoint these new Directors, the longer-term Directors of our company, which includes me, will gradually roll off the Board, certainly within the next 12 to 18 months. We have a renewal process in place, and that's been led by Peter.

Can I ask how [indiscernible] there have been a trading blackout [indiscernible] to a month after the Sentenial acquisition was announced, given that it was subjects of regulatory overview?

Look, I can't recall the exact dates of any blackout, I'm sorry. We'd have to go back through the minutes to identify that. But I can reassure you on the basis of Peter's...

[indiscernible] company's secretary has a view on that? I mean it was an acquisition subject to regulatory approval. Will that not [indiscernible] a trading blackout?

Well, as the Chairman indicated, no Board member has traded in a blackout period.

So there was no blackout period after the Sentenial acquisition?

I can't recall that. All I'm saying is, and I'm repeating what the Chairman said, that no Directors traded in a blackout period. Okay. Next question.

This question relates to, I guess, old Board members, but specifically to Peter Martin. This is about shareholders having trust in the Board and to realize full value for shareholders in this company. Now we know that being private equity, approached the company late last year, and they made a takeover offer for the company around November last year. Can the Board confirm what was the takeover price at the time considering the shares were trading around in the $2?

You've made a couple of assumptions there. We never received a takeover offer from any company in the last 12 to 18 months. We've received some unsolicited highly conditional proposals to look at whether companies may wish to make firm offers for EML. If we'd received proposals that were material and were firm and fixed, we would, for obvious reasons, we were obligated to make those known to the market and to our investors. We -- there's a lot of people on this board with a lot of financial background. We have very good advisers working with us in Goldman Sachs and Herbert Smith Freehills. We run very comprehensive financial models on the business, which are adjusted according to market circumstances as interest rate rises, the discount rate in the model rises, that reduces the underlying fundamental value of the company. So as we go along, we're always tracking what is fundamental value of the company. And we have never received an offer that in any way, it was firm and fixed that represented the fundamental value of the company. Otherwise, it would have been presented to shareholders. The Board's obligation is to ensure that we don't -- we do the right thing by our shareholders, but we don't present to shareholders open-ended, unsolicited, highly conditional offers that may come in.

So let me phrase that. Did the Board receive a non-binding conditional potential change of control approaches. And obviously, it was reported in the media, it was confirmed by the company, that Bain, did approach the company.

We received -- we -- absolutely, and absolutely, we did receive highly conditional proposals with -- that were open-ended, non-binding proposals from more than 1, including Bain and others, but none of them were of such -- could meet the criteria to take back to you, the shareholders, or to take to the market.

I mean most companies on ASX received the same type of conditional non-binding proposals. We've seen a lot of them recently, majority of Boards actually tell shareholders that they received these offers. EML Board chose not to disclose any of them and was forced by media leaks in the financial review to disclose these approaches to shareholders. So how can shareholders trust the Board to engage with any potential suiter for this business, if you don't disclose these approaches to the market, and only after the media, newspapers leak it to this?

Well, I should stress what I just said before. Unsolicited, highly conditional offers that don't meet our analysis and our adviser's analysis of what is fair value, won't be presented to shareholders. And I think your assumption that many company -- all the companies do it, I think, is totally incorrect. The job of the Board is to assess any offer and say, does it meet the conditions, the valuation of the business? Is it firm enough to take to shareholders as a proposal or is it not? And the approaches we received were neither fixed nor firm, were highly conditional and were proposals.

But the potential prices which were conditional and non-binding that were offered, you're saying they weren't materially above the share price at the time?

If the offer -- well, there's two issues there, isn't it? Is the price in the valuation range of the company or is it fixed and firm so we can go out to the market and say, we've received something that's realistic that we need to take to shareholders. If the Board receives realistic offers that meet our valuation criteria, we're obligated to go to shareholders and say, "We've received an offer that we think stacks up, that is fixed and firm in the way it's structured." But when you receive -- when -- there's plenty of offers in the market -- not offers, proposals floating around the market that are just -- highly conditional. And the Board receives those proposals. We look at them very carefully, we do a lot of analysis, and we determine -- we have plenty of internal debates about the nature of the proposal we've received and whether we should take it out to the market, and we haven't received any proposals that meet the criteria to take them to the market.

All I would say finally is that you look at the share price of EML at $0.50, I think maybe the Board view of the company's real value is not realistic. That's all.

[indiscernible] share the Board's view with the shareholders [indiscernible] to satisfy our valuation [indiscernible]

No, at this stage, I can't and...

[indiscernible]

No, I can't. Because if and when we received a proposal, we would look at the valuation of the company.

[indiscernible]

I think every investor has a view as to what a company is worth and every investor takes into account different criteria. When and if we receive a proposal, we...

[indiscernible]

I understand what you're saying, but what I'm saying is we don't sit here as a Board and run numbers on the company daily and look at the share price. We run the company to be successful in the medium to long term. And if a proposal comes across to us, we will then look at what we believe is a fair value for the company at that time. We're not doing it daily. We don't watch the share prices. We -- obviously, we're very concerned to make sure the share price represents fair value for the company, but it's not something that Board spends its time concerned about it.

[indiscernible]

Well, that's for you as an investor to determine. What we...

All I'm saying is [indiscernible] about how's that going to be accomplished and how is that going to be achieved in the longer terms. We understand why you followed Piper down the road, because there's been a presentation that's why the question is being asked today, because there's been so much value destruction is happening in the last 2 years [indiscernible] We as shareholders are angry about the performance of the board, because that's who is responsible for this. [indiscernible]

There's a lot of questions and assertions wrapped up in your question, but I'd say once again, the Board is focused on transforming the business, as Emma said. You will see, as we -- as the transition rolls out, you will see...

[indiscernible] we have a presentation.

Well, I think it's like walk the -- talk to talk and walk to walk. If -- you need to wait and see the execution of the strategy. There is no -- we've done a truckload of very detailed work, pulling apart the business, putting it back together, deciding what the value drivers...

[indiscernible]

Well, I think the strategy -- we have to look at all that.

[indiscernible] why would you not be doing that?

The share buyback decision, we have to look at the strategy of the company, the use of its capital in this period of time and given the strategy of the company, we've elected to postpone the share buyback for this present time. We haven't canceled the share buyback, we've postponed it. Now...

[indiscernible]

I'm sorry?

[indiscernible] transition programs that might need back.

No.

[indiscernible] what you're saying is buybacks are going to cancel, [indiscernible]

No. That's not what I'm saying. What I'm saying is the buyback is being canceled for the moment. That's what we said, postponed. It hasn't been canceled permanently. That's what I said. Now can we move on to the next -- I think we should move on to the next question.

I have a question. Prior to Emma's appointment, was there an official succession plan in place that was Board-endorsed and approved that outlined the skills and experience required for such a unique business? And another one -- and as part of the succession plan where any other external candidates interviewed for the CEO role?

EML has a succession plan in place for our senior executives. When Tom Cregan resigned, we weren't interviewing external candidates because he resigned, he elected to resign at a certain period of time. We are fortunate to have Emma on the Board. We've been talking to Emma about working with us on our European business with her expertise, obviously, on technology, et cetera. And she was the obvious candidate for the job. She's highly qualified. She meets all the criteria we needed for a new CEO, and it was pretty clear to the Board that we had at the candidate we needed in place at the time of Tom's resignation. So we appointed her. We weren't out looking for a new CEO externally.

I mean, obviously, EML is a payments business and just from looking at Emma's resume, she doesn't have direct -- any direct payments industry experience. Why wasn't there an official and pre-planned succession for a CEO? And why wasn't she appointed as an interim CEO and then you can go through an external review of other potential CEOs that have direct payments experience?

Very good questions, but the reality is payments is going into a new realm. We're talking about digital currencies, we're talking about technology-driven businesses. The expertise to run a business like EML doesn't come from having 20 years in the payments industry. That is beneficial, and we're adding -- we'll be -- you'll be seeing people added to the Board who have 20 and plus 30 years of payments experience in Europe. We're very close to appointing one now, and there's another one we're talking to. All these people have got technology skills, payment skills, they understand where this is going. What we have to do as a company is look beyond today. I mean it's like saying, "Hey, I'm in locomotives, therefore, I'm not going to worry about airplanes." We have to worry about where the business is going in 5 years. So a transformational CEO is someone who can take the experience they've had, particularly technology, which is really critical to the future of business like EML, capture our data, which we're not using particularly effective now -- effectively now and think about where the business is going in the future. So in fact, Emma's personal characteristics are ideal to lead this business in the view of the Board.

Just last question for me. Are there any other regulatory issues at present that have not been disclosed to the market?

We're always dealing with regulators, and if any issues come up that are disclosable in our businesses, they will be disclosed.

[indiscernible]

Yes. Emma's just saying, she'd be happy to respond to anybody to talk about her background and expertise in transformational technology -- in transforming technology businesses. Okay. Any other questions, please?

[indiscernible] happened over a weekend, that's what we're trying to get to the bottom of.

Well, let's...

Sorry, I wanted to ask your point about fair value, so the Board having a fair value assessment in assessing these [indiscernible] Just in terms of any of the [indiscernible] have any of them got into due diligence [indiscernible]

The Board didn't believe the offers that we received were fixed and firm enough to go forward. To be honest, the Board -- the proposals, not offers, the proposals were highly conditional, subject to so many conditions, so many uncertainties, the Board decided that they weren't firm enough to even proceed. And I think everyone understands, perhaps, I'm just adding a bit of flavor to that. Everyone understands that once you proceed into full due diligence, that is a situation where you really are opening the kimono to an external party, you have to be sure that they're genuine. They actually want to proceed with the acquisition. They're not going to put up a notional proposed price and then come back 3 months later with a price that's half of what they put on the table in the beginning. So we use highly qualified professional advisers to advise us on the nature of the bid, the conditions that are put on any proposal. And then in essence, they will help us determine whether we should go forward and whether we shouldn't. In some cases, partial -- when I say partial due diligence was started, they're very, let's say, how would you describe it, well, non-conclusive, partial due diligence. Can we move on? Yes, sir.

Sorry, just going back to the buyback thing. When you announced that in August, the stock was trading around $1, and now it's trading around half that. And you said, you've got these sort of internal models from Goldman Sachs, you had evaluation from. Surely, it just makes so much sense that when the stock is trading around half of what was when you made that notification, you would execute that. And it just seems like the only reason you wouldn't execute those from a cash reserve standpoint. So this would be really helpful to understand exactly why you're putting it on hold for now?

Can I just have a break in the meeting for a second. This is about the resolution of the re-election of Peter as a Director. I suggest we stick to that resolution, and we're open to ask any other questions at the conclusion of the meeting, which is open to shareholders. So let's just move with this resolution, park any other questions not related to that resolution to the end of the meeting.

[indiscernible] exactly it's all relevant.

Okay. What I'm saying is, I think you've had a fair go on this resolution.

Well, I think it's a very close call and I think it's important to everyone gets to ask all the questions if I'd like to determine the outcome.

Okay. What's your next question?

Just why not execute the buyback? I mean it seems like a very clear reasons to do it?

We've covered the question on the buyback. You just asked -- you're literally just asking the same question all over again. The answer is we relooked at our strategy for the company. We determined that the buyback should be put on hold for the present time and that it's not off the table. And that's the answer. It's a simple answer. Okay, any other...

[indiscernible] not why, it's just a what really.

Any other questions?

Did the Board actively engage with every bid? And if you did or didn't, what would you do differently this time?

I don't think we do anything differently, to be honest. We engage with every proposal that came in. And we held extensive discussions with the proposals. So the honest truth is we wouldn't do anything different. We just followed the process. We used our external advisers comprehensively, both legal and investment banking. We would do exactly the same thing today because the rules don't change. I mean we understand the rules. We understand our obligations to you, our shareholders, and also to keep the market informed, and we followed them religiously. So the answer is no, we wouldn't have -- wouldn't make any change. hindsight is a great thing. You can look back and say, "Oh, I should have, would have, could have." But in fact, we just followed the same process all the way through.

And what was the initial indicative bid that received?

That's not for public consumption. I'm not going to talk about that because it was a highly conditional open-ended proposal.

I would have thought you'd want to talk about it considering the prices that have been floated in the press.

It's not relevant to what we're discussing today. It was a highly conditional proposal. It was actually confidential, highly confidential on behalf of the other -- the proposer. Okay. Any other questions, I'm more than happy to answer any questions you've got of me before you make up your mind to vote one way or the other? Okay. Thank you.

Thanks, Peter. As there's no other questions on the resolution, I will now stand down and pass over the meeting to the Chairman. Thank you.

Okay. Resolution 3B, election of Brent Cubis as a Director of the company. I'd like to invite Brent to say a few words.

Thank you, Peter, for the opportunity to outline my credentials and support my election as a Non-Executive Director of EML Payments. As a Non-Executive Director, I will draw another 20 years' experience in senior executive roles across a broad range of industries and companies, where I dealt extensively with all the boards. These companies included most recently, the CFO of Cochlear and prior to that in PBL Media, which was the old channel Nine News and ACP Magazines, FCP in [indiscernible] and Bankers Trust in Westfield and recently, a couple of fintechs. I've been a Non-Executive Director for the ASX listed Prime Media before and also chaired their Audit and Risk Committee prior to it being sold to Seven West Media earlier this year. I'm currently a Director and Chair of the Audit and Risk Committee for the ASX listed A2B and for the privately owned Silverchain Group, which is a national home care provider, which services over 100,000 patients a year around Australia. Together with the other Directors on the Board, I will apply a high level of diligence and commitment in serving the interest of all EML shareholders. Thank you.

Thanks, Brent. I now put to the meeting that the shareholders consider, and if in favor, to pass the following resolution as an ordinary resolution that Mr. Brent Cubis, who is in accordance with Rule 33.4 of the company's constitution and being eligible offers himself for election, be elected as a Director of the company with effect from 6 February, 2023. I know this is -- we're going to have to call these out.

[indiscernible]

Are there any questions on the resolution? Okay. If there's no further questions or no questions, I'll move to the next resolution. This is Resolution 4, grant of sign-on service rights to the Group Chief Executive Officer and Managing Director. Resolution 4 deals with the approval to grant sign-on service rights to the Group Chief Executive Officer and Managing Director. I put to the meeting that shareholders consider and if in favor to pass the following resolution as an ordinary resolution. But for the purposes of the ASX Listing Rule 10.14 and all other purposes, approval is given for the company to grant -- to the company's Group Chief Executive Officer and Managing Director, Ms. Emma Shand, 1,612,903 service rights under the EML Payments Limited rights plan on the terms set out in the explanatory notes to this Notice of Meeting. Proxy votes received in respect to this resolution are again displayed on the screen.

[indiscernible] For 51.09%; Against 47.44%.

Are there any questions on this resolution? Okay. If there's no questions, I'll move on to the next resolution. Resolution 5 is the grant of long-term incentive performance rights to Chief Executive Officer and Managing Director. Resolution 5 deals with the approval to grant long-term incentive performance rights to the Chief Executive Officer and Managing Director. I put to the meeting that shareholders consider, and if in favor, to pass the following resolution as an ordinary resolution. And for the purposes of ASX listing 10.14 and all other purposes, approval is given for the company to grant to the company's Group Chief Executive Officer and Managing Director, Ms. Emma Shand, 1,827,957 performance rights under the ERL Pay on the terms set out in the explanatory memorandum to this motion of Notice of Meeting. Proxy votes received. In respect to this resolution are displayed on the screen.

And it's For 73.66%, Against 25.68%.

Are there any questions in relation to this resolution? Yes.

[indiscernible]

Well, that's -- I'll turn to my [indiscernible]

[indiscernible]

[indiscernible]

Not on that day. No, it was just normal process.

[indiscernible]

No. The answer is no. That was the board, it's Emma. Okay. If there are no...

[indiscernible]

We set -- it was in line with market. We set the remuneration according to what we believe was an appropriate level for someone of Emma's capabilities and track record to take the company forward.

[indiscernible]

I think -- I don't think -- we didn't use the rem consultant at all. I mean we have -- obviously, we have industry comparables and we do understand the numbers. But no, we didn't use them. Are there any other questions? Yes, sir.

[indiscernible]

Well, in fact, the senior executives all participate in the short-term incentive plan and the long-term incentive plan of the company. That's a good question. You've got to make sure that the...

[indiscernible]

Well, they're obviously different and they relate to the roles of the various people in the company like any normal company. The CEO is a stand-alone package, and it's all in the -- covered in the remuneration report. So we're very concerned about making sure we get the best senior management bench and we keep them. And a transition plan, I mean you're right to point out, that qualities of a senior management are critical and the alignment of the senior management with the plan working with Emma is critical. Okay. Any other questions on this resolution? Okay. Then I think that's it. Yes, we've got -- that's the final resolution to be put to the meeting. I'll now open the poll and ask all shareholders and proxy holders who are entitled to vote at today's meeting to complete your voting card and hand it to Emma Khoury who's wandering around to collect them up. So these green forms, make sure you've ticked the boxes at the back and hand them to Emma. We'll just wait for Emma to click the voting cards. It will probably take up to 15, 20 minutes-or-so for link to process the votes. So in the meantime, any further questions you may have or any questions you may have to address to myself or Emma or -- we're more than that welcome to take questions. Yes, sir.

This question is to Emma. In terms of -- previously, the company disclosed its new business pipeline opportunity to the market. Just wanted to know sort of what's the current new business pipeline? If you can quantify it, is it lower or higher or what is it compared to the previous disclosure by the company?

Okay. Thanks for the question. I don't actually have the previous disclosure on the pipeline that was made. What I can tell you is that there's been a huge amount of focus by the company around our open banking business and converting those many connections that we have into revenue and also being focused especially this time of year in our gifting segment. And you saw just on the Q1 numbers and the latest update up to November, those numbers are pretty promising. So as we go into the holiday season, the gifting area looks quite confident that should be quite nice numbers coming out of gift and incentive, also spent quite a bit of time on product packaging. And one of the new products which we have out to the market is called Perx, and that's had a massive increase in prior year in terms of its distribution. It's digital cards, digital gifting cards, and it's also really leveraging some of the government incentives around tax-free gifting by employers. Ireland is a great example. You can have a EUR 500, now it's up to EUR 1,000 tax-free gift to employers -- sorry, employees. So I think we're very focused on our products and packaging good go-to-market solutions. So that's been our focus for the last few months. But pipeline-wise, I can't give you that across each of our business segments at the moment. But I can assure you that we're very focused on our customers, particularly as we go through this transformation because it's those customers that will benefit a lot from some of these transformation priorities, which we've announced today.

Just another one then. The reloadable business in Europe, my understanding is the largest customer by far is Correos in Spain. And I think it's 30%, 40% of the business, correct me if I'm wrong. And what are you doing to make sure that, that client, that customer doesn't leave EML in the near term, considering the regulatory issues with Ireland? And that customer being a government-owned entity and wanting the regulation of its products within Spain rather than in Ireland. How are you addressing that risk of that customer?

So again, a good question, and we are looking at the risk profile of all of our customers and making some decisions as to the products and services that we're being providing those customers within the level of commercial terms that we'd be satisfied with, can measure without risk, and also if we're aligned on our product road map. So I myself have met with Correos, and I've been down there in Madrid, and they have a lot of exciting things on the go, so do we. So we need to look at our product road maps and think how they align. And yes, they're a very strong customer of ours, and we look forward to working with them well into the future.

I guess my question is, is there a risk that customer will leave because you decide to remain regulated with the CBI?

So I'll address the regulatory issue. And I really think it's important for you just all to understand because there's been so much talk about should we look at light touch jurisdictions, and they don't exist. So this is payments regulation, e-money licenses, it's European -- pan-European, I'd suggest to you. And the FCA and their e-money licenses are not much different to the European licenses. So we are absolutely fine to be held to the highest standards of our regulatory obligations and moving jurisdictions, does not solve that. So I just would ask you all to be quite thoughtful when we're thinking about licensed jurisdictions in Europe or elsewhere. So we keep all of our options open, and it would be in your interest that we're always looking at different jurisdictions, different licensed. We have different strategies perhaps when it comes to our open banking business versus our prepaid business and that will have license implications as well. So we're constantly looking at where we can best serve our customers in the most optimal cost-effective jurisdiction.

Can I add a comment on this regulatory issue? Because I think there's a real lack of understanding about what regulation is happening in Europe. We are not the lone ranger, most companies, including major banks are going through very serious regulatory scrutiny in Europe. And the bar is being lifted across all jurisdictions. So the idea that we can move from Ireland to Spain or over to Lithuania or somewhere else, it's really a figment of people's imagination. Yes, the personalities of the individuals in the regulator will change because of the nature of the culture of that country, et cetera. But they're all living under European regulations. And when I was in Madrid with [ Fiona ], we actually went to a conference, we listened to the President of the Central Bank of Europe talking about the fact that European regulation is going to increase in intensity as digital currencies come on, they were talking about cyber security, they were talking about Bitcoin and all these things, the bar is being lifted for everybody. And the key message to all our shareholders is we are determined to get across the bar. Quite a few of our competitors are hitting the wall on regulation. They can't jump the bar. It's expensive, and you've got to commit to it. And then you've got to determine that you can offset the cost with savings and alignment of the rest of your business and you can grow the business aggressively to ensure that you're getting a really solid payback from your compliance and your regulatory framework that you've got to put in place. This is not trivial.

As far as I'm aware, and maybe you can name any other European payments business who currently has a growth restriction on its license. Can you name one, apart from EML?

It's all these things are confidential. I mean we don't know. We hear in the market, but we don't know because these things aren't announced publicly. The only companies that -- companies like us who are publicly listed in the framework of continuous disclosure in Australia have to announce these things, many other companies, this is just business as usual. This is going on in the background. The major banks that's going on all the time. They don't announce it, unless the mega issues we're announcing what our regulator -- what we believe are important issues to announce in the environment of Australia because we're a listed public company. They don't -- the regulators do not come out publicly and say, we're doing this to these people, and we are investigating those people. So in fact, we wouldn't know how many companies have been investigated or have growth restrictions put on their business at all. All we know is that we have to live within the framework as we remediate and transform, we have to live within some restrictions that our regulator puts on us. And by the way, they're nowhere near as acute as they could possibly be. We are allowed to grow our businesses which I don't think the market here understands. We actually are allowed to grow both our British business and our Irish business within constraints.

Do you know how many non-bank fintechs are regulated with the CBI compared with Lithuania, for example?

No.

That's to you, Emma.

There's a lot that hold an e-money license in Ireland with the Central Bank of Ireland. I don't know the Lithuania numbers. But there's well over, I think, 20 or 30 in Ireland, but I don't have the exact number.

[indiscernible]

I had heard there was something like 86 in Lithuania, but I mean that's just scuttled, but I don't have any evidence of that.

[indiscernible]

Well, it's interesting the -- as we understand it, the Lithuania environment was, if you like, very gentle compared to the Irish environment, but that's all changed. You have a look at Lithuania now, what tends to happen is they all talk to each other. So one regulator will lift the bar or a new rule comes in across Europe, they've all got to jump that and they all talk to each other, and it tends to be a leveling of the regulatory standards across the board. So what we're seeing talking to the regulators and also going to some of the conferences is that, as Emma said, there's no soft touch. There's no, let's go to Malta and those guys are soft because they've got all those gambling companies over there. We can get away with it. No, it doesn't exist. And why would you? We're trying to build a world-class highly competitive business here. If we want to compete in Europe, we've got to be world-class, and I mean that seriously. That's not motherhood, we have to compete with the biggest and the best. We are determined to do it. Therefore, the regulatory compliance and framework is critical. This is a key success factor in this business. This is not, "Oh yes, it's nice to do because the regulator says we have to do it." This is an absolute key success factor for EML to meet the minimum standards and exceed them and be shown to be -- hopefully, will be a poster-child for CBI or the FCA in meeting their requirements. That's why we're putting so much time, money and effort into it because we believe it's the foundation stones of the business. Yes, sir.

Is it fair to say that [indiscernible]

There's no doubt that -- absolutely, there's no doubt that you have to put serious resources into like an Irish business to meet the standards of the Irish regulator because the Irish regulator basically says, we don't want a bunch of people sitting in London as part of the administration of this license. We want a local board. We want local executives like [ Fiona ], she losing [ Galway ] by the way. We want local Irish people running that business. And the trick for EML, is not a trick. We have to leverage their skill sets over as much as we can without doing the wrong thing by another regulator or other regulated entities. So a lot of what we learn in Ireland is being transferred to the work we're doing for the FCA in the U.K., which is all very similar. I mean none of this stuff varies that much. It's pretty much the same thing. So if you're putting policies and procedures and systems for the Irish business, you're actually doing a lot of the work that might be required, the FCA in the U.K. And the FCA in the U.K. doesn't need -- and some put to me, you've got to put $30 million worth of resources into the U.K. business, and I sort of fell off from the seat. We need -- the regulator in the U.K. will require a certain minimum number of people to live in that jurisdiction like an independent Board with, I think, 3 individuals on it, and there could be 2 or 3, 4 or 5 other people needed to be in the business, but it doesn't mean recreate all the infrastructure we've got in Ireland and do it again in London. So we have to amortize our investment over multiple jurisdictions while still meeting the requirements of that particular regulator in their own jurisdiction.

Can I just ask a follow-up question?

Sure.

If I think about the cost [indiscernible] cash reserves, question here is kind of bouncing around the share buyback, what are the cash reserves [indiscernible]

Well, I think we've shown our balance sheet, we've got $68 million on the balance sheet. But Rob, do you want to talk to that one?

[indiscernible]

Yes. Okay. Peter, yes.

I've got a comment that it's pleasing that the market says they reacted very positively for the announcements for the share price up 15%. So maybe it's a start.

Well, maybe it's a beginning, and there's a long way to go. So thanks for the observation. It looks like the votes are going to take some time. So unless there's further questions, and I'm more than happy to take them, we'll close the meeting, and we'll be informing the market and all of you via our website, what the results of the resolutions are. I'm sorry -- the ASX, I should say. So look, thanks for coming. It's been a tough year and -- but we're doing our best, we'll get this company back on the road and it will take some time. So please be patient, but we're working flat-out to deliver the results. So thanks very much.