Integral Diagnostics Limited (IDX) Earnings Call Transcript & Summary

Welcome to the Annual General Meeting of Integral Diagnostics Limited. My name is Helen Kurincic, Chair of the company. It is now the appointed time for holding the meeting. I'm advised that a quorum is present, so I declare this Annual General Meeting of the shareholders of Integral Diagnostics open. In doing so, I would like to acknowledge the [ traditional ] owners and custodians of the land I am joining you from, the Boon wurrung people and pay our respects to their elders, past, present and emerging. Thank you for attending online. Whilst I'm pleased to be able to use technology again this year to safely deliver our AGM, I look forward to hopefully being able to hold a hybrid meeting next year. Today's meeting is being held online via the Lumi platform. This allows shareholders, proxies and guests to attend the meeting virtually. All attendees can watch a live webcast of the meeting. In addition, shareholders and proxies have the ability to ask questions and submit votes. On the screen and attending the meeting online are my fellow directors, Dr. Ian Kadish, Managing Director and CEO; John Atkin, Non-Executive Director, Chair of the People and Remuneration Committee and member of the Audit, Risk and Compliance Committee and Nomination Committee; Raelene Murphy, Non-Executive Director and Chair of the Audit, Risk and Compliance Committee and a member of the People and Remuneration Committee; Rupert Harrington, Non-Executive Director, member of the Audit, Risk and Compliance Committee, Nomination Committee and the People and Remuneration Committee; Rupert also leads our M&A working group; Dr. Jacqueline Milne, Executive Director, member of our Integral Clinical Leadership Committee and an accredited radiologist with South Coast Radiology in Queensland; and Dr. Nazar Bokani, Executive Director, member of our Integral Clinical Leadership Committee and an accredited radiologist with Apex Radiology in Western Australia; Kirsty Lally, Company Secretary; Anne Lockwood, Chief Financial and Commercial Officer; Paul McCrow, Chief Operating Officer; Dr. Lisa Sorger, Chief Medical Officer; and members of Integral Diagnostics' management team are attending the meeting, along with Jason Perry, partner with the company's auditor, PricewaterhouseCoopers. Jason will be available to answer questions on the accounts at the appropriate time. The agenda for today's meeting is as follows: I will shortly present my address. Following that, Dr. Ian Kadish, our Managing Director and CEO, will present his review of the company's activities, which will include an introduction to the company's new Chief Medical Officer, Dr. Lisa Sorger. We'll then proceed with the formal business of the meeting. Before we start, I would like to outline a few procedural matters. Recent questions can be submitted at any time. To ask a question, select the messaging tab at the top of the Lumi platform. At the top of that tab, there is a section for you to type your question. Once you have finished typing, please hit the arrow symbol to send. When asking your question, please include the resolution it relates to. Please note that you can submit questions from now on, and I'll address them at the relevant time in the meeting. Please also note that your questions may be moderated or, if we receive multiple questions that are very similar, amalgamated together. For those shareholders who wish to ask a verbal question, an audio question facility is available during this meeting. To use this service, please pause the broadcast on the Lumi platform and then click on the link under Asking Audio Questions. A new page will open where you will be prompted to enter your name and the resolution and topic of your question before being connected. This will help us address your question at the appropriate time. You will listen to the meeting on this page, while waiting to ask your question. If you have any issues using this system, please return to the Lumi platform. Voting today will be conducted by way of a poll on all items of business. In order to provide you with enough time to vote, I will shortly open voting for all resolutions. At that time, if you are eligible to vote at this meeting, a new voting tab will appear. Selecting this tab will bring up a list of resolutions and present you with voting options. To cast your vote, simply select one of the options. There is no need to hit submit or enter button as the vote is automatically recorded. You do, however, have the ability to change your vote up until the time I declare voting closed. I now declare voting open on all items of business. The voting tab will soon appear. Please submit your votes at any time. I will give you a warning before I move to close voting. And now to my address. It is important to acknowledge upfront the significant impact COVID-19 has had on our lives and our work, which has produced challenges for everyone, including your specialist health care company. I'm proud of the resilience of our people who have continued to firmly focus on patient care and service, our values and strategic priorities for the benefit of stakeholders. Together, our team delivered over 2 million diagnostic imaging services to patients and referrers, helping to improve health outcomes through early detection, diagnosis and further management of illness and injury, often eliminating unnecessary procedures and avoidable costs. Over the 12 months ended 30 June 2021, your company achieved statutory net profit after tax of $31.3 million, 36.1% higher than prior year and a 25.3% increase in operating net profit after tax of $38.1 million. Operating diluted earnings per share grew 14.5% to $0.19 per share. Operating revenue grew 27.3% to $348.8 million, driven by organic growth, investments in high-end modalities, an additional 4 months of Imaging Queensland revenue when compared to the prior year and a 10-month contribution from Ascot Radiology who became part of IDX in FY '21. In December 2020, we negotiated an extension of our finance facilities with $407 million committed and a further $105 million in an accordion with a 5-year term to February 2026. As at 30 June 2021, our debt-to-equity ratio of 0.54:1 and net debt to last 12 months EBITDA ratio of 1.4x reflects strong capital management to support our continued growth ambitions. We declared a fully franked final dividend of $0.07 per share, a total of $0.125 per share for FY '21, an increase of 31.6% on the prior year, reflecting the performance and cash flow position of your company. The dividend reinvestment plan, allowing shareholders the option to reinvest their returns in the company without incurring any brokerage or transaction fees was also in operation for FY '21. Management of the impact of government-imposed restrictions due to COVID-19 continued to be a feature of the year. The Australian government provided JobKeeper assistance of $6.7 million after tax, which was partially utilized to offset the impacts of COVID-19 in FY '21 to retain and support our highly skilled workforce, and the portion that was not used, $2 million after tax, was voluntarily returned to the government. We did not profit from JobKeeper. In September 2020, we completed the acquisition of the highly regarded Ascot Radiology Group in Auckland, New Zealand. Ascot Radiology comprises 9 diagnostic imaging clinics, including key sites at Ascot Private Hospital and 22 doctors and staff. Despite the high challenge of travel restrictions, we have made progress with the integration of Ascot into our group. In December 2020, we announced our joint venture with U.K.-based Medica Group with the intent to provide teleradiology reporting services and additional reporting capacity in Australia and New Zealand, the U.K. and Ireland. While this venture is not expected to impact earnings in the near term, it is a step forward in expanding our reach and technology-driven services. Total capital expenditure was $23.1 million, including conservative growth CapEx of $6.3 million in FY '21, reflecting the COVID-19 environment. $16.8 million was spent on equipment replacements and upgrades to continue to deliver highest quality to patients and referrers. Turning to FY '22. It is clear that COVID-19 restrictions will again impact our business as we had flagged in August with our FY '21 results announcements. Overall, Integral Diagnostics has delivered organic revenue growth of 3.6% to the end of October in this financial year. The navigation of COVID-19 is expected to continue to be challenging with impacts on trading, including our workforce and supply chains. Going forward, the impact on the company of the COVID-19 pandemic and associated government responses remains uncertain and cannot be accurately predicted. Despite the pandemic, our strategy continues to be progressed with the same high discipline. The acquisition of the X-ray Group located in Albury-Wodonga on the Victorian-New South Wales border announced on 30th of September, completed on the 1st of November. XRG is a strategic, clinical and cultural fit with IDX, and we warmly welcome the XRG team. XRG is a regional leader in providing complex modalities including MRI, CT and nuclear medicine, which are services positioned to experience growth. As a Board, we are committed to leading a high-performance culture with transparency and accountability, whilst continuing to improve what we do as we grow. We are proud to have a governance model for our specialist medical business that includes radiologist executive directors. The Board includes 2 radiologists, medical specialists who are on the front line servicing patients and referrers using technology and equipment and as such, a valuable inclusions on our Board as we set and execute on strategy. As part of its succession planning, Dr. Nazar Bokani was appointed as an Executive Director, effective 26th of April 2021, taking over from Dr. Chien Ho who retired from the Board on 1st of March 2021. I would like to warmly thank Dr. Ho for his contributions over nearly 13 years as not only a Board member but as a clinical leader of the company, and the inaugural chair of the Integral Clinical Leadership Committee. We also appointed New Zealand Board Advisory members to provide input to the IDX Board on New Zealand matters at its meetings on a regular basis. The inaugural members are Dr. David Rogers, the founding Managing Partner of Ascot Radiology and Dr. James Caldwell from Trinity MRI. Your Board is continuing its commitment to its environmental, social and governance responsibilities and released our second stand-alone ESG report and first report prepared in accordance with the Global Reporting Initiative Standards: Core option. We prepared and lodged our first modern slavery statement in line with government regulations and completed a supplier screening risk rating review. During FY '21, a materiality assessment was undertaken to determine what is important to stakeholders and we engaged with 554 stakeholders as part of this process. The materiality assessment assisted us in developing an explicit ESG strategy, which aligns with the United Nations' Sustainable Development Goals. We also measured and reported our carbon footprint for both FY '20 and FY '21, with FY '20 being our baseline year. I would like to especially acknowledge our MD, CEO, Dr. Ian Kadish, the senior leadership team, directors, radiologists and staff, who served over 797,000 patients and engaged with 35,264 referrers in a challenging environment. Finally, thank you, our shareholders, for your continued support and interest in our company, which plays a pivotal role in affordable quality health care for patients and referrers. I now invite our MD and CEO, Dr. Ian Kadish, to discuss Integral Diagnostics' operational review.

Thank you, Helen. I'm proud to report that despite another challenging year for the world and for our company, our FY '21 financial performance was strong. Our doctors, staff and management team stepped up to the challenges and delivered another strong set of results. Most importantly, our patients and referrers were well taken care of by the heroes on the front line of all IDX businesses. Our teams worked hard every day to deliver the best health outcomes for our patients. These are the doctors and staff who always put our patients first. I could not be prouder of the people that I'm privileged to work with. In FY '21, we again delivered strong growth, consistent with the growth delivered over the previous 4 or 5 years. We delivered 27% revenue growth, 23% EBITDA growth, 25% growth in net profit after tax and 14.5% increase in earnings per share. We grew our revenue organically and through the acquisition of Ascot Radiology in New Zealand in September 2020, and we maintained our industry-leading margins in a challenging year. IDX's vision is to build a healthier world, and we do this by delivering the best health outcomes for every patient we serve. Our company's values are listed at the top of each one of the pillars on this page, and we live our values at IDX, as demonstrated by the outcomes delivered in each one of these 5 value pillars. The value of your company has increased more than fourfold in 4 years, and the value of your shares have increased from around $1.50 in June 2017 to $5.01 at yesterday's close. At least 88 of our doctors are now shareholders in IDX. We expanded our reach in FY '21 with the addition of Ascot Radiology in Auckland. This acquisition consolidated our Auckland presence by providing the IDX New Zealand practices with leading specialists and modalities in complementary areas, including our first PET-CT in New Zealand and 3 more MRIs in Auckland. And earlier this week, we completed the acquisition of the X-ray Group in Albury-Wodonga, further expanding our presence up to the border in regional Victoria and entering the Southern New South Wales market. Diagnostic imaging remains an integral and essential component of quality medical care. All medical practitioners, GPs and specialists, will continue to rely on quality imaging to make every important medical diagnosis. The growing elderly population, the increased prevalence of chronic disease, particularly cardiovascular disease and oncology, and the introduction of promising new digital imaging and artificial intelligence technologies, will continue to drive industry growth into the future, particularly in the high-value modalities, incorporating CT, MRI and nuclear medicine. Currently, there are no material changes in the Australian regulatory environment, although 2022 is a federal election year. In the last federal election year, 53 new MRI licenses were granted by the federal government. The major change in the New Zealand environment has been the emergence of new referrer-owned radiology practices. IDX New Zealand is working with the New Zealand Institute of Independent Radiologists to ensure that patient choice is retained and that quality of care is maintained. We are delighted with our latest acquisition of the X-ray Group, the premium radiology business based in Albury and Wodonga in the Victoria-New South Wales border region. The group's 5 radiology practices are strategically located close to specialist and GP referrers in Albury-Wodonga and the surrounding towns. The radiologists, clinical and support staff operate a similar medical leadership model to IDX, are also committed to high-end quality care and service and are an excellent cultural and strategic fit. Our priorities this year are not without some challenges. However, I have every confidence that our quality orientation, our highly trained specialist and subspecialty skill set and our focus on high value-add modalities position us well to compete as the markets evolve. FY '22 strategy and year-to-date trading update. COVID-19 and the associated government responses can be expected to continue to have an impact on the group, which cannot be accurately projected at this time. To the 31st of October, the first half of FY '22 has been affected as a result of the impacts of COVID-19 and government lockdowns and border closures across all the geographic areas in which we operate. Up until the 31st of October, year-to-date revenue is down approximately 7% from our budgeted expectations but is up approximately 4.8% on prior year revenue or 3.6% net of the additional Ascot Radiology contribution from September. This includes the impacts of the Level 4 lockdowns in New Zealand from the 18th of August until the 21st of September 2021, which has resulted in New Zealand revenue being down year-to-date approximately 24.9% from our budgeted expectations. We are slowly seeing a return of examination volumes, however ongoing impacts of COVID-19 due to border closures including labor workforce shortages and supply chain pressures continue to impact our ability to return to expected performance. We expect to invest between $20 million and $24 million in brownfields and greenfields in FY '22 on 5 new sites across Victoria and New Zealand, Western Australia and Queensland as well as increased investment in digital and AI technologies. Execution continues on our clear strategy, in line with our vision, purpose and values to deliver the best health outcomes for our patients. The appointment of a Chief Medical Officer is an important milestone in IDX's growth and development. Dr. Sorger engages the radiologist team to drive continuous improvement, quality care, service and leadership. Dr. Sorger will continue to spend about half her time on the tools, that is working as a high-quality subspecialty-trained radiologist. Dr. Sorger is also an effective conduit between radiologists and management and is an integral member of both the clinical and management teams. I'll now invite Lisa to introduce herself and to update our shareholders on a promising addition that was added to the Medicare Benefits Schedule earlier this week.

Thank you, Ian, and good morning. As Ian mentioned, I am the Chief Medical Officer of IDX and a practicing radiologist. I have practiced for over 15 years in both Australia and the U.K. and have had experience as a clinical leader most recently in Western Australia and in the Northern Territory. In addition to my radiology responsibilities, I hold leadership roles with the Royal Australian and New Zealand College of Radiologists, where I advocate for Medicare funding for new diagnostic items, access to imaging in regional Australia and emerging nuclear medicine imaging and treatment technologies. The approval for FDG-PET scanning for the diagnosis of Alzheimer's type dementia will be tremendously beneficial to our patients, given that dementia is the second leading cause of death in Australia. The addition of FDG PET to the Medicare Benefits Schedule will increase opportunities for early diagnosis of Alzheimer's type dementia, will facilitate earlier beneficial intervention and will improve patient outcomes and lower costs. The potential benefits are significant for patients and their families and for the wider society, including payers, insurers and providers, both public and private. I'll hand back to our CEO, Dr. Ian Kadish now.

Thank you, Lisa. The appointment of Lisa as CMO rounds out our senior leadership team and augments our skill set and capabilities. As previously announced, our Chief Financial and Commercial Officer, Anne Lockwood, has resigned from IDX and will be leaving us on the 28th of January 2022, and we thank Anne for her valuable contributions. Recruitment is well underway, and we have had a strong interest in the role. In closing, once again, I would like to express my gratitude to the heroes on the health care front line of all health care businesses at IDX and elsewhere, who work every day to deliver the best health outcomes for patients, the doctors and staff who always put patients first. My sincere thanks to our Chair, Board and management team for their wise counsel, insight, commitment and support. My thanks also to our patients who put their trust in us, to our loyal referrers who trust their patients to us and to you, our shareholders, who put your faith in us. Good medicine is still good business.

Thank you, Ian. I will now proceed to the formal business as set out in the notice of meeting. Each of the resolutions will be taken in turn. I will introduce each resolution, shareholders will have the chance to ask questions on the resolution, and I'll display the proxy results for the resolution on screen before we move on to the next resolution. If you have not already submitted a question, the steps for submitting a question are now displayed on screen. To ask a question, a written question, sorry, select the messaging tab at the top of the Lumi platform. At the top of that tab, there is a section for you to type your question. Once you have finished typing, please hit the arrow symbol to send. For those shareholders who wish to ask a verbal question via the audio questions facility, the steps for asking a question verbally are now displayed. To ask an audio question, please pause the broadcast on the Lumi platform and then click on the link under Asking Audio Questions. A new page will open where you'll be prompted to enter your name and the resolution and topic of your question before being connected. This will help us address your question at the appropriate time. You will listen to the meeting on this page while waiting to ask your question. If you have any issues using the system, please return to the Lumi platform. If you have not already voted, the voting process is now displayed on the screen. Selecting the voting icon will bring up the list of resolutions and present you with voting options. To cast your vote, simply select one of the options. There is no need to hit a submit or enter button as the vote is automatically recorded. You have the ability to change your vote up until the time I declare voting closed. The first item of business is to receive and consider the financial report of the company and its controlled entities and the reports of the directors and auditors for the year ended 30 June, '21. The Corporations Act and the company's constitution require these statements and reports to be laid before shareholders but do not require a vote from shareholders to be taken on them. In accordance with the Corporations Act, this is your opportunity to ask questions about or make comments on the company's financial statements and reports. Jason Perry, partner with the company's auditor, PricewaterhouseCoopers, from PwC, is online. You may ask the auditors' questions relevant to the conduct of the audit, the preparation and content of the auditors' report, the accounting policies adopted by the company in relation to the preparation of the financial statements as a whole and the independence of the auditor in relation to the conduct of the audit. I now invite questions on this agenda item.

Helen, we have a number of questions on this item. The first is a comment from [ Norm West ], shareholder. The company and Board are congratulated on the achievement of their positive financial results in 2021. It was also pleasing for shareholders to see that JobKeeper was used for staff support, not a profit generator. The company should be commended for returning the excess JobKeeper payments. The increased dividend is warmly welcomed in a difficult year.

Thank you for your positive comments on the company's performance and for the commenting regarding payment of -- the repayment of JobKeeper. We returned those funds that were not utilized to retain and support our skilled workforce. It was the right thing to do. We did not profit from JobKeeper. Are there any further questions, Kirsty?

The next question relates to IDX's diverse spread of clinics, suburban and regional. What factors or areas contributed to the slight drop in operating net profit after tax as a percentage of operating revenue?

Okay. The key factors leading to the drop in operating NPAT as a percentage of operating revenue were cost pressures, which included employee costs, which increased as a percentage of revenue due to radiologist cost pressures present in the industry and the increased use of paid quarantine/isolation leaves in the COVID-19 environment. Consumable costs also increased as a percentage of revenue due to the higher cost of consumables for higher-end modalities and the increased usage of PPE due to COVID-19 as well as equipment costs due to equipment coming out of warranty and increased service level cover for equipment. In terms of geographic areas that contributed to lower operating NPAT as a percentage of operating revenue, Victoria would have been the biggest contributor as this was the hardest hit with COVID-19 restrictions and the metro areas were more impacted than regional areas. Next question, Kirsty?

Question from [ Norm West ], shareholder. Cybersecurity and data integrity are identified as issues. Without compromising any company security, which areas will require detailed focus and scrutiny?

Cybersecurity and data integrity is an ongoing high focus area for the IDX Board, our Audit, Risk and Compliance Committee and management as well as our staff who are the first line of defense. It is an area of continued and increasing investment. We've engaged industry experts to assist us in assessing our cyber maturity, which has provided us with a clear pathway as we align with global security standards such as NIST and the Essential 8. The security of our patient information remains paramount and we'll continue to invest in its protection. Are there further questions, Kirsty?

The next question is from [ Norm West ], shareholder. Are the new greenfield sites wholly owned or leased?

The new greenfield sites are leased, but the plant, machinery and improvements are owned by IDX.

The next question is to our auditor. What negative events or assumptions, excluding COVID, did they identify, could influence the recoverable amount of goodwill and brands and the amount of any resulting impairment?

Thank you for that question. We've got rigorous processes in place to assess the recoverable amount of our assets. This includes considering a range of possible outcomes in the future cash flow estimates. PwC can provide a perspective on the audit work related to the assumptions. Jason, if you'd like to comment?

Thanks, Helen, and hi, [ Norm ]. Look, thanks for your interest in the audit. The audit is designed to provide an opinion on the accounts as a whole and not on the individual elements. But in relation to impairment, it was a key audit matter, and the detailed work on that is included in the audit report in the financial report. But in relation to the assumptions, we assessed and focused on a range of sensitivities and possible outcomes and assess their impact on the impairment test. In particular, we focused on the discount rate, the long-term growth rates and the margins, and those ranges of sensitivities did not result in an impairment, and I was satisfied that the impairment testing and the outcomes are in accordance with the accounting standards. Thanks, Helen.

We have one last question relating to item 1 from [ Norm West ], shareholder. Dr. Kadish has mentioned the priority of managing COVID impacts. Could you expand on the possible future impacts?

The safety of our patients and staff has been the priority in managing COVID-19 throughout. COVID-19 and associated government responses can be expected to continue to have an impact on the group, which can't be accurately projected at this time. To date, first half '22 has been affected as a result of the impacts of COVID-19 and government lockdowns and border closures across all geographic areas in which we operate, impacting revenue, workforce and supply chains as discussed in the CEO address. However, I believe the long-term underlying fundamentals of the diagnostic imaging industry will remain unchanged. It is an essential medical specialist service. Are there any further questions, Kirsty?

Helen, we have no further questions on this item at this time.

Thank you. As there are no further questions, that concludes our discussion on item 1, and I now move to the next agenda item. The next item of business relates to the reelection of Rupert Harrington as a director of the company and details of his reelection are set out in the notice of meeting. I would invite Rupert to say a few words regarding his reelection.

Thank you, Helen, and good morning, everyone. Thank you for considering my reelection. I've been a nonexecutive director of IDX since just prior to its listing on the ASX in 2015. I'm also a member of the Audit, Risk and Compliance Committee and the People and Remuneration Committee and the Nomination Committee and chair the company's mergers and acquisitions working group. I have extensive experience in business strategy and in mergers and acquisitions. I've served on the Board of more than 30 companies in sectors including manufacturing, technology and health care. It has been very satisfying to work with the IDX Board and management in delivering good growth in shareholder returns over the last 6 years. I currently serve on 2 other IDX companies. I am Chairman of Clover Corporation and Non-Executive Director of Pro-Pac Packaging. I also Chair Advent Partners' Investment Committee. My association with Advent Partners commenced in 1987, and until late in 2020, I was a substantial shareholder and Chairman. My role at Advent Partners for the last 5 years or so has been to chair the Investment Committee with appropriate mechanisms in place to avoid potential conflicts of interest with IDX. Recently Advent invested in a diagnostic imaging business, and this was managed so that I was totally excluded from the process. However, this has the potential to create a possible perception of conflict of interest at some future stage. To avoid this, I've provided notice of my resignation to Advent. I'm firmly committed to the IDX strategy. Subject to my reelection, I look forward to working with the Board and management to continue to achieve growth and improvement in the business with the prospect of better outcomes for patients and referrers and in turn, our shareholders. Back to you, Helen.

Thanks, Rupert. The Board, with Mr. Harrington abstaining, unanimously recommends the reelection of Mr. Harrington as a director of the company and recommends that you vote in favor of the resolution. I now invite questions on this agenda item. Kirsty, is there any questions on this item?

Helen, there are no questions on this item at this time.

As there are no questions on this resolution, I now table valid proxies received for item 2 by the company. I move that Mr. Rupert Harrington, who retires by rotation and being eligible, be reelected as a director of the company. That concludes item 2. And I move to the next item of business relating to the re -- sorry, the election of Dr. Nazar Bokani as a director of the company who is offering himself for election in accordance with Rule 8 of the company's constitution. Details of his election is set out in the notice of meeting. I would invite Nazar to say a few words regarding his election.

Thank you, Helen, and good morning, everyone. I am very pleased to present myself today for election to the IDX Board. My background and current employment as a full-time general and specialist diagnostic and interventional radiologist provide me with a unique perspective to be able to contribute to the Board. Not only have I practiced as a radiologist in Australia, but I have also practiced in the U.K. and the Netherlands, and I'm currently located in Western Australia. I am a member of the company's Integral Clinical Leadership Committee, where my radiology skills and experience allow me to promote and support a collegiate culture across all practices and to provide advice on all clinical governance matters, including patient care, clinical standards and quality assurance. I have very much enjoyed being involved in the implementation of artificial intelligence across the company and assisting with the setup of the company's teleradiology offering. Using technology to assist in diagnosis is an interest of mine and one that I believe is important to the ongoing evolution of the diagnostic imaging industry. I was pleased to be appointed as the Chair of the IDX Artificial Intelligence Steering Committee, which will have an impact on the company's adoption of artificial intelligence. IDX has a wonderful future, and I would welcome the opportunity to be part of that future. Thank you very much, and back to you, Helen.

Thanks, Nazar. The Board, with Dr. Bokani abstaining, unanimously recommends the election of Dr. Bokani as a director of the company and recommends that you vote in favor of the resolution. I now invite questions on this agenda item. Kirsty, are there any questions?

Helen, there are no questions on this item at this time.

As there are no questions on this resolution, I now table valid proxies received for item 3 by the company. I move that Dr. Nazar Bokani, who was appointed on 26th of April 2021, retires and being eligible, be elected as a director of the company. That concludes item 3, and I move to item 4, the adoption of the remuneration report. The remuneration report is contained in the annual report. It describes the policies and sets out the remuneration arrangements in place for directors and senior executives. The company has a remuneration framework which aims to ensure that reward for performance is competitive and aligned to shareholders' interests. The vote on this item is advisory only and does not bind the directors or the company. Nevertheless, the People and Remuneration Committee will take into account the discussion on this item and the outcome of the vote when considering the future remuneration policies and practices of the company. The Corporations Act provides that the results of the vote on the remuneration report may trigger the first leg of the 2 strikes rule. I now invite questions on this agenda item. Kirsty, are there any questions?

Helen, there are no questions on this item at the moment.

Since there are no questions on this resolution, I now table valid proxies received for item 4 by the company. I move that the remuneration report for the year ended 30 June 2021 be adopted. I draw shareholders' attention to the voting restrictions applicable to this resolution as contained within the Notice of Annual General Meeting. That concludes item 4, and I move to item 5. The approval of the long-term incentive grant of FY '22 rights to the Managing Director, Chief Executive Officer. The Board, with Dr. Kadish abstaining, unanimously recommends that shareholders approve the grant of FY '22 rights to Dr. Kadish and recommends that you vote in favor of the resolution. Details of the terms and conditions of the proposed rights are set out in the notice of meeting. I now invite questions on this agenda item. Kirsty, are there any questions?

Helen, there are no questions on this item at this time.

As there are no questions on this resolution, I now table valid proxies received for item 5 by the company. I move that approval be given for all purposes, including ASX Listing Rule 10.14 for the grant of rights to Dr. Ian Kadish as his annual long-term incentive grant for the year ended 30 June 2022 on the terms described in the explanatory memorandum accompanying this notice of meeting. I draw shareholders' attention to the voting restrictions applicable to this resolution as contained within the Notice of Annual General Meeting. Are there any remaining shareholder questions regarding the resolutions before the meeting, Kirsty?

Helen, we have one question remaining. It is from a representative of Finbar Proprietary Limited. What is the policy of vaccination for the radiologists? Are there issues arising from this for radiologist numbers?

Thank you for the question. Safety is clearly the most important issue for our company and the safety of our staff, our visitors and our patients. As you'd be aware, vaccination is required by most government health orders and policies of hospital providers across Australia and New Zealand. We're currently in the process of educating and encouraging our staff to get vaccinated and running question-and-answer sessions with experts for them and ensuring compliance with all mandates for vaccination. We do not believe currently that this is impacting radiologist numbers. Kirsty, are there any further questions?

Helen, there are no further questions.

As there are no more questions, that concludes our discussion on the items of business. In a couple of minutes, I'll close the voting system. Please ensure that you have cast your vote on all resolutions. I'll now pause to allow you time to finalize those votes. [Voting]

Voting is now closed. The results of these votes will be released to the stock exchange later today. As there is no further business, that now concludes the Integral Diagnostics 2021 Annual General Meeting. I would like to warmly thank you for your attendance today and for your continued support of Integral Diagnostics Limited. Be well and stay safe. Thank you.