Perpetual Limited (PPT) Earnings Call Transcript & Summary

Good morning. Good morning, everyone. I'll just start with an apology in the sense that in -- because we're online, I'll be tending to be looking into the camera. So it's not to ignore people on my left in any sense at all. So I do apologize in advance for that. Those on this side, of course, you get a good glimpse. So I thank you. Good morning, and I'm Tony D'Aloisio, the Chairman of Perpetual. It is 10 a.m. And as I have been advised, a quorum is present, and I declare the 2022 Annual General Meeting open. And once again, I welcome you all to Perpetual's AGM, both in person and in the hybrid online. We acknowledge the traditional owners of the land we're present on today, the Gadigal people of the Eora Nation as the custodians of this land, recognizing their connection to land, waters and community. We pay our respects to Australia's first peoples and to their elders past, present and emerging. We would like to extend our respect to and welcome any aboriginal and Torres Strait Islander People who are joining us today. And we also acknowledge the traditional owners of the many lands where our attendees are situated today, both here and in our operations overseas. So again, welcome, shareholders, proxy holders, guests here in person and online. Now for those that are joining us virtually today, we hope you found the virtual meeting guide and welcome and summary letter provided to you on our website useful. I'll say a few words shortly concerning how I propose to run today's hybrid meeting and the procedure for voting and submitting questions. But firstly -- or first, I'd like to make some introductions in relation to our Board, management and our auditor. In the room, seated at the main table, I'm joined by our Chief Executive Officer and Managing Director, Rob Adams; Mona Aboelnaga Kanaan, Nonexecutive Director; our Company Secretary, Sylvie Dimarco; Ian Hammond, Nonexecutive Director; Nancy Fox, Nonexecutive Director and Chairman of the People and Remuneration Committee; and Greg Cooper, Nonexecutive Director. For Mona, this is her first-time visit in Australia. So welcome, Mona. And I hope that you enjoy your visit to Sydney with our staff and our clients and now our shareholders, and we compare very well to New York. So thank you, and thank you for joining us. And importantly, joining us for the meeting today virtually are 2 other nonexecutive directors, Craig Ueland in the U.S. He changes his location in the U.S. from time to time. I think he's in Utah from what I can see. Thank you. That's Craig. And in Melbourne, Fiona Trafford-Walker. Morning, Fiona. I'd like to introduce the members of our executive team in person and -- but they're in person here. Group Executive for Perpetual Asset Management, Australia, Amanda Gillespie; our Chief Financial Officer, Chris Green; our Group Executive, Perpetual Asset Management, International, David Lane; Group Executive Perpetual Corporate Trust, Richard McCarthy; our Chief Risk Officer, Sam Mosse; and Group Executive, Perpetual Private, Mark Smith. Also joining us today is Executive General Manager, People and Culture, Paul Chasemore. And attending the meeting virtually are 2 other executives, Amanda Gazal, Group Executive, Integration; and our Deputy Chief Operating Officer, Craig Squires. Finally and importantly, I'd like to welcome Brendan Twining, who is the company's auditor from KMG (sic) [ KPMG ]. I don't just see where he's sitting now. I'll just keep an eye on you, Brendan. Thank you. Brendan is available to answer any questions that shareholders may have in relation to the financial year '22 financial statements and the auditor's independence, and we will deal with those questions under the first item of the agenda. And that brings me to the agenda. What we'll cover today is the presentation of financial year '22, the financial statements and reports. Then we have the adoption of the remuneration report, the reappointment of Greg Cooper as a Nonexecutive Director, the increase in nonexecutive director remuneration pool, and the approval of the financial year '22 variable incentive equity grants and KMP growth long-term incentive equity grant for the CEO and Managing Director, Rob Adams. There will also be opportunities to ask questions and -- when presenting the financial year statements and reports and also in relation to each resolution. But I'll make a point of encouraging because of the Pendal acquisition that we've announced, which I'll talk about in a moment. Under that item of business, I welcome any questions from shareholders on that proposed acquisition. Turning to the Notice of Meeting. Further information about each of the items that I've just mentioned, of course, are in that Notice of Meeting. I'll take the Notice of Meeting as read. As described -- and probably now I need to cover a number of other formalities. So please bear with me, they're important. Firstly, the proxies. As described in the Notice of Meeting, proxy appointments were able to be lodged up to 48 hours before the meeting. Where I, as Chairman of the meeting, have been appointed as a shareholder proxy or become their proxy by default, I will vote directed proxies as directed in the proxy appointment, and I will vote any available undirected proxies in favor of each resolution. If you are participating as a shareholder and hold proxies, then you will have received an e-mail setting out instructions on how to vote those proxies using the voting mechanism on the platform. Now some formalities about questions in person and online. Following comments and questions for each of the voting resolutions, I will confirm the proxy votes that will appear on the screen or received before the meeting. Each resolution today is an ordinary resolution and needs to be passed by a simple majority. We will take questions from shareholders in the room, take questions from shareholders using online and the platform. We'll also take questions received over the phone. Now let me turn to outline the process for voting and questions for shareholders just to separate out those attending in person, voting in person, the procedures for voting for the shareholders in the room. We'll be voting by a poll and not a show of hands. You will have received a yellow voting card when you registered today. That will be used to cast your vote. Once counted, the outcome will be announced to the ASX this afternoon. That's voting for people here. Questions in relation to each resolution, I'll ask some questions in the room. If you wish to ask a question, please raise your hand and a staff member will provide a roving microphone for you to address the meeting. Please provide your full name to the staff member so that I can introduce you prior to asking your question. Now let me move to voting and questions for those shareholders in this hybrid meeting that are participating online. If you are online, you can cast your vote at any time during the meeting now that the poll is open. Indeed, that also applies to people here. The poll will remain open for 5 minutes at the end of today's meeting. And at the conclusion of the AGM, for those online, you'll see a red bar appear on the top of the online platform with a countdown timer of how long you have to cast your vote. Voting on each resolution will be conducted by way of a poll. Karen Hopkins from KPMG will act as scrutineer and Nicholas O'Hagan of Link Market Services as the returning officer for the purpose of the poll. Now these are the steps, if you want to -- if you wish to vote online. You'll see from this slide, to register, vote -- to register a vote, click the Get a Voting Card button on the web page. The adjacent slide shows the button you need to select the platform to exercise your vote. You need to enter your SRN and HIN number. If you're appointed proxy, please enter the proxy number that Link has provided. Then click Submit Details and vote. And you'll get a voting card, fill that in and click Submit. And you will see from the slide how you can cast your vote online, and you can vote on all resolutions at any time until the poll closes. Now if you experience difficulties, there's a help number, 1800 990 363, to call, and that's displayed on the screen as well. So if you are online and you haven't registered to vote as yet, please do so now. And subject to any applicable restrictions, the Board recommends that shareholders vote in favor of each item. And the voting restrictions are set out in the resolutions in the Notice of Meeting. Now to move to questions for those who are online. If you're participating online, there's an opportunity to ask questions or make a written comment during the meeting, and this function is also now open. You need to click Ask a Question, then the Ask a Question box will pop up, and you can type your question regarding each or any one or each or other or general comment to resolutions in the regarding box. If your question concerns the financial '22 financial statements, financial year statements, please mention that at the beginning of your question and then type your question and click Submit. I will address all written questions that we receive, and I'll do so under each relevant item of business. And the way that will occur is the company secretary will read the questions through the meeting. They'll be read in full, and I will then respond or designate someone to respond on our behalf. Now you can also ask questions by phone. The steps to ask a question by phone during the meeting there, you call Link on -- this is a bit -- not the simplest thing to do, but it's available to you to do. You call Link on 1800 990 363, and they will issue you with a unique PIN. To ask the question online, you call 1800 316 512. The moderator will then ask you -- the person answering the call will ask for your PIN and verify that you're a security holder. You'll then be put on wait and invited questions at a time -- at that time you're invited, you need to dial star 1 on your keyboard. And the teleconference moderator will then introduce you to the meeting and you can ask your question. As I say, there is a help line if there are any difficulties in relation to that. Now that completes the formalities. Hopefully, next year, we'll have an in-person meeting and not a hybrid meeting with COVID being behind us. But it was important, I think, this year to still hold a hybrid meeting. And hopefully, next year, we'll have an in-person meeting, and these formalities will be a bit simpler. But I think the hybrid meeting is still important for those that wish to participate online for this year. As I said, that completes the formalities. And in a moment, I'm going to ask the CEO, Rob Adams, to deliver his address. But before I do that, I'd like to make some observations and then hand over to Rob. I note that the prepared AGM speeches from the CEO and the Chairman and the People and Remuneration Committee Chair have been released to the market. As I said shortly, I'll ask Rob to deliver his address. But I'd like to do 2 things. First, I want to provide some comments on our results and performance in financial year '22. And secondly, I want to provide -- I'd like to provide an update to shareholders on our announcement on the 25th of August 2022, which is the proposed acquisition of the Pendal Group. Now as you'll see from our annual report in financial year '22, we achieved strong increases in revenue, profit and dividends to shareholders. In what was another year of uncertainty, with COVID-19 lockdowns continuing and geopolitical instability offshore, all of Perpetual's 4 business divisions, covering both domestic and international asset management, wealth management and corporate trustee services, delivered strong growth. In financial year '22, our group revenue increased 20% to $767.7 million, and I'll be using all Australian dollars. Underlying profit after tax, UPAT, increased 21% to $148.2 million. Net profit after tax was $101.2 million, up 39% on financial year '21, despite a number of one-off costs associated with the acquisitions of Jacaranda and Laminar. Overall, Perpetual achieved an underlying growth in earnings, EPS, earnings per share of 18%. For our shareholders, this result allowed us for total dividends in financial year '22 to be $2.09 per share, up 16% on financial year '21. This represents a payout ratio of 80% of UPAT, which is towards the upper end of the Board's stated policy of 60% to 90% UPAT each year. The Board also determined to continue the dividend reinvestment plan, enabling shareholders to reinvest their dividends without transaction costs. Ensuring that we continue to maintain a strong and robust balance sheet is a key priority for the Board. It's one of the key measures that's enabled us to consider and ultimately progress the acquisition of the Pendal Group. Financial year '22 saw Perpetual continue to execute on its growth strategy, which we set some 3 years ago, investing further in all areas of our business to drive both organic and inorganic growth. We expanded our offering in Perpetual Private, PP, through the acquisition of Jacaranda Financial Planning in August '21, and for Perpetual Corporate Trust, called PCT, through the acquisition of Laminar Capital in October '21. Both Jacaranda and Laminar have already positively contributed to the group's earnings growth, highlighting the importance of acquiring businesses that are aligned with Perpetual's client-focused and high-performance culture. Financial year '22 saw strong progress on Perpetual's strategy to strengthen and grow our asset management business. Following the successful acquisition of Barrow Hanley in financial year '21, Perpetual Asset Management International, PAMI, continued to build out its international presence by reinvesting further in international distribution, marketing and product development. We said that we would deliver, with that acquisition, earnings accretion of 20% or more in the first full year, which is November to November, and this was achieved. For Perpetual Asset Management Australia, PAMA, 3 new active EDFs will launch, providing investors with simple and easy access to the group's world-class investment capabilities, aligning with our strategy and providing contemporary investment solutions to our clients. In financial year '22, relative investment performance across both asset management businesses, PAMI and PAMA, continue to be strong, led by our Australian equities capabilities and Barrow Hanley's range of equity strategies. Now over 90% of our equity strategies have delivered strong outperformance over their respective benchmarks over the last 3 years. This has added value to our clients during periods of high volatility, positioning us well for future growth. Moving away from the financials to other important matters for the Board to draw your attention to shareholders. Let me comment on a number of those. The first is sustainability. As part of our annual sustainability report for financial year '22, we were pleased to announce a new business-wide sustainability strategy known as Perpetual's Prosperity Plan, and Rob Adams will outline and talk more about this shortly. The Board sees this as a major milestone for Perpetual and was developed following extensive internal and external stakeholder engagement, staff and the Board. The strategy provides clear and ambitious targets for the business to reach, with some 35 commitments to be reported on annually as part of that Perpetual sustainability report. And the Board and the executive committee clearly look forward to progressing these commitments and, importantly, reporting to you, our shareholders, over the coming years. On the important topic of ESG. Across our investment teams, as a diversified multi-boutique business, each of our asset managers have their own investment philosophy and approach to ESG. Our investment teams exercise independence in determining their investment strategies. As active managers, they do this through integrating ESG and climate risk consideration within their investment processes. For example, Trillium is an impact-driven, ESG-focused firm dedicated to aligning ESG and investment objectives and applies ESG risk-based screening across their strategies. Barrow Hanley uses a proprietary composite ESG score as a key element of their investment process. In Australia, ESG factors are considered as part of PAMA's long-established investment process and proprietary research tools. An example of this proprietary research was a review undertaken by our Australian equities team to assess how prepared companies in the ASX 300 are for a low carbon transition. Now a lot more detail is contained in our sustainability report on our website, and Rob will talk a bit more about it later. The Board and the executive committee -- turning to that -- to the Board and the executive committee. There were no changes to the Board or that committee during the financial year. In today's meeting, shareholders will have the opportunity to vote on the reappointment of Greg Cooper as an independent Director. Greg has been a Nonexecutive Director since September 2019 and has played an important role in the transformation of Perpetual over the past 3 years. And he comes to you with the unanimous support of our Board. In relation to the proposed acquisition of Pendal, which I'll talk to in a moment, in order to ensure continuity of knowledge and representation, up to 3 Pendal Board members will be invited to join the Perpetual Board immediately after the completion of their transactions. Their appointments would then, in the normal course, come before you at our next AGM. On executive remuneration, our approach to executive remuneration and the proposed changes planned for financial year '23, as set out in the remuneration report, which we'll discuss later in the meeting and hear from the Chairman of that committee, Nancy Fox. As illustrated by the level of activity and progress of our strategy over the past 12 months, we are at an important point in the ongoing transformation of Perpetual. With additional pressures across the market attracting and retaining high-quality people, the Board considers that a fairly rewarded and incentivized senior team is going to be crucial to the execution of our strategies in the coming years. And related to that, we've added an additional growth incentive, which we'll also talk about later, which is really aimed at aligning shareholder returns with management returns. And we'll talk about why we have added that and its significance. Now there is, on your agenda, a proposal to increase the nonexecutive director remuneration pool from $2.25 million to $3.5 million. Before you get excited that we're going to all vote ourselves increases, that ceiling hasn't been raised for some years since -- in fact, since 2006. But it's really being raised to reflect and give us the ability to bring in the additional directors with the Pendal acquisition. So that's what I wanted to cover, hopefully, yes, was a report from our Board to you on financial year '22. I now want to turn to the second subject and talk about the Pendal Group acquisition. On the 25th of August, we announced that we've entered into a binding scheme implementation deed with the Pendal Group, under which we would acquire 100% and control of the shares in Pendal by way of a scheme of arrangement. First, the deal itself. We've offered Perpetual scrip and cash. 7.5 Pendal shares will be exchanged for 1 Perpetual share, plus cash of 197.6 cents or in my terminology, $1.976. But anyway, look, it's $1.976 for each Pendal share. The offer would secure control with Perpetual shareholders having approximately -- with our shareholders having 53% of the combined group and Pendal 47%. That deal has the unanimous support of the Pendal Board, and we look forward to welcoming Pendal shareholders onto our register upon completion. Now at arriving at that offer price, as you would expect, your Board carefully assessed the relative fundamental value of Perpetual and its 4 businesses and Pendal, and important factors such as synergies, both expenses and revenues, and the benefits of inorganic growth of Perpetual over organic growth of our asset management businesses. And as you will also expect, the Board had the benefit of extensive external advice on valuation. The Board's judgment is that our offer for control when looked at the totality of the Pendal business and the Perpetual businesses is in the best interest of shareholders and is fair and reasonable. Secondly, why Pendal? As I said earlier, Perpetual set a growth plan to lift underlying earnings and shareholder value some 3 years ago across all businesses, but importantly, in asset management. The acquisitions of Barrow Hanley and Trillium and the addition of important international distribution capability is now providing results and has extended our operations beyond Australia into the U.S., the U.K. and Europe, opening up growth opportunities beyond Australia. The combination with Pendal provides Perpetual with the opportunity to potentially be a real international leader in multi-boutique asset management across equities, cash and fixed interest, multi-asset and dedicated ESG investments, with strong presence -- with a strong presence in key markets. And this should translate into a stronger combined group, both competitively and financially. Targeted pretax synergies of $60 million are expected to be fully realized on an annualized basis within 2 years, resulting in material value accretion to shareholders, double-digit accretion in the first 12 months post implementation. The transaction accelerates our growth given the complementary footprints of the Pendal and Perpetual Asset Management businesses across distribution channels, products and geography. And we believe that there is substantially more upside in value creation in establishing a diverse international asset management business with a leading voice in ESG. Importantly, in addition to scale in asset management, and this is important to emphasize to some of the media, we will continue to grow PCT and PP. Both are important businesses for Perpetual. And as I outlined earnings, they're achieving impressive results. And your Board believes that we should continue to grow these businesses for our shareholders. They continue to add strength to the combined group. Thirdly, extracting value from acquisitions to achieve growth is not easy and your Board is well aware of that. It requires discipline. And the Board is confident that our management team has the credentials and capability to deliver. In coming to that conclusion, we've reviewed management's track record in delivering what we said to shareholders we would do. For example, I mentioned earlier, the EPS accretion with Barrow Hanley. And with the acquisition of Pendal, that provides us with an opportunity to further strengthen our management team. The Board, as you would expect, has specific benchmarks to be achieved by management from the acquisition of Pendal over the next 2 to 3 years, and we will report to you against those. Now to further incentivize the management's focus on delivering the financial benefits, and this is really more of an initiative from the Board, both -- and to incentivize their focus on the financial benefits, both for this strategy and for other strategies we've put in place over the past few years, we have put in place a special incentive plan, which operates over 5 years to reward management for significant growth based on absolute TSR of a minimum of 10% to 15% to fully vest. Nancy Fox will expand on this when we consider the remuneration report. So on the deal and on management, we are confident that we can deliver the benefits I've been referring to. Fourthly, your Board has carefully assessed our leverage, particularly testing it to withstand market cycles, and has set down a paydown schedule just as it did for the Barrow Hanley acquisition for the borrowing to fund the cash component of the Pendal acquisition. As I said earlier, it's a share swap, plus consider -- plus the $1.90-something, $1.976, which is to fund that -- and that paydown schedule has been set down in the context that we would maintain existing dividend policy. And the Board will also continue to monitor the operational and financial performance of the Pendal business and our business up to completion. Now it's probably worth also saying that in considering further growth opportunities for the group, it's unlikely that the Board would approve any major new acquisition until we are comfortable that the use of shareholder funds for these acquisitions, both Pendal and the previous acquisitions, are providing the appropriate return to our shareholders. There are some -- finally, there are some important comments I need to make on the completion of that acquisition. While our expectation from the Pendal Board's unanimous support is that the deal will complete, the deal requires Pendal shareholders to vote in favor, some 75%. And in addition, there are a number of other terms and conditions in the scheme implementation deed for the benefit of both Pendal and Perpetual, which need to be met before completion. Pendal has indicated that their vote should take place around December, with completion expected in January, subject to regulatory approval and the satisfaction of the conditions I've just referred to. That vote will be preceded by a scheme booklet, which Pendal will send to its shareholders explaining the transaction and why their Board is unanimous in their decision. Now the deal, as a scheme, does not require Perpetual shareholder approval under the ASX rules. However, at our end, we have been and continue to speak to shareholders on the merits of the acquisition, monitor the markets and Pendal's business. Today's meeting, as I said, we'll provide an opportunity for any questions at this stage on the transaction. So in summary, the fundamental rationale for the combination of Perpetual and Pendal is compelling, notwithstanding current market volatility. As we work through the terms and conditions to completion, your Board's objective will continue to be to ensure that we act in the best interests of our shareholders. And as I said, happy to take questions when we get to the first item of business on that and on the financial report, of course. So just some concluding remarks and handing over to Rob. The Board continues to be proud of the manner in which the teams at Perpetual continue to deliver outcomes for clients and shareholders. The Board and I would like to thank our CEO, Rob Adams, and the entire leadership team who have maintained their disciplined focus and continue to execute on our strategy. And I'd like to extend our thanks to the many, many people across Perpetual that have worked extremely hard throughout the year to deliver not only a very strong financial result, but also to support the growth of our business through the new products, capabilities, acquisitions and many other strategic initiatives. Importantly, on behalf of the Board, I'd like to thank our clients. We wouldn't be here without them. So we thank our clients. And to thank you, our shareholders, for your support. And I'd also like to thank my colleagues on the Board. As you will see from the number of meetings that have been called upon to do at all hours, I thank them for their continued dedication and, more fundamentally, for their strategic insights into our business and where we should be taking it. Thank you. And I'll now hand over to Rob. Thanks, Rob.

Thanks, Tony. Good morning, everybody. Good morning to everybody in the room. Good morning to people online. Good morning to people on the telephone. Everything is a bit more confusing these days, isn't it? But nice that people can come to us through a variety of means. Thanks very much, Tony. Let me progress straight into -- financial year 2022 was a year that was characterized by investment and growth across all areas of Perpetual's business, in particular, the continued build-out of our investment capabilities and our global distribution team in our international asset management business. We've made very good progress in executing our strategy, including investing in new growth opportunities across all of our divisions while delivering strong financial results at a time when global investment market volatility is indeed increasing. Soon after the completion of the 2022 financial year, we announced our proposed acquisition of the Pendal Group on which I'll provide an update on shortly. Turning first to our FY '22 results. Our strong results demonstrate the solid outcomes and positive momentum across all areas of our business, with every division delivering double-digit growth in earnings for the first time in 7 years. Over the course of the year, we have delivered new investment capabilities. We've launched new products and services. We've opened up distribution channels. And we have continued to invest in our trusted brand. We've also continued to invest in environmental, social and governance, ESG, capabilities across all of our businesses. Our investment has remained focused and disciplined, with our expense growth for the full year delivered within guidance. Perpetual delivered total revenue of $767.7 million, up 20% on the prior year. Underlying profit after tax was $148.2 million, up 21%. Our net profit after tax was $101.2 million, up 39% on the prior year. And our return on equity rose 44 basis points to 16.2%. Key drivers of this result included a full year contribution from Barrow Hanley, improved relative investment performance across a vast majority of our investment capabilities and higher average equity markets when compared to the previous year. Additional earnings from our acquisitions of both Jacaranda Financial Planning and Laminar Capital for Corporate Trust, of course, Jacaranda Financial Planning for Perpetual Private, and strong organic growth in both PCT, as we call Corporate Trust, and PP, Perpetual Private. Our Board, as a result, declared a fully franked dividend for FY '22 of $2.09 per share, which represents a payout ratio of 80%, which is up 16% when compared to the prior corresponding period. Turning now to some of our operational highlights for the year. In our asset management businesses, Perpetual Asset Management, known as PAMI, and -- sorry, Perpetual Asset Management International, known as PAMI, and Perpetual Asset Management Australia, known as PAMA, our combined assets under management totaled $90.4 billion at the end of the financial year, which was lower than the prior year, driven primarily by declines in global investment markets, particularly towards the end of the period, and net outflows, fund outflows, in PAMI. Despite these market movements, our relative investment performance across our asset management businesses has been very strong, with 79% of our strategies outperforming over the 3 years to 30th of June. I'll provide a more recent update on our investment performance later in the presentation. We continue to see solid interest in our range of ESG capabilities, and in FY '22, we received over $1 billion in net inflows across those capabilities, with Trillium, in particular, having another strong year of growth. We are also seeing growing interest in our variety of global equity strategies. In particular, Barrow Hanley's global capabilities with just over $3 billion in net inflows over the year across all of our global equity strategies. Locally, our asset management business in Australia, PAMA, saw its strongest year of inflows from the important intermediary channel in 7 years, and that positive momentum has continued into this new financial year. In PCT, which, as you know, provides essential infrastructure for key parts of the financial services industry, we achieved a new milestone with funds under administration surpassing the $1 trillion mark. In Perpetual Private, we saw yet another year of positive inflows, making FY '22 the ninth consecutive year of positive flows, which we believe reflects Perpetual Private's market position as a trusted financial advice business. Lastly, but something we are particularly proud of this year, we delivered a Net Promoter Score of plus 49, which is a record score for Perpetual and reflects the positive client advocacy and client relationships across each of our divisions. So as you can see, across Perpetual, we are delivering strong outcomes across each of our businesses. Our unique business combination, with around 30% of our total revenues coming from nonmarket-linked sources in PCT and PP, has supported us extremely well through this difficult market cycle. We have diversity in services, diversity in clients and markets with exposure across equity markets, credit markets, real assets, personal wealth as well as philanthropy. In the chart -- hang on a sec. I beg your pardon. I've lost my place. Forgive me. Where was I? Yes, on the chart on the left. Yes, there we go. The slide wasn't right. Forgive me. In the chart on the left, you can see our FY '22 operating revenue of $767.7 million represented here by division. PAMI contributed 29% of total group revenue; PAMA, 22%; Perpetual Private, 28%; and Perpetual Corporate Trust, 21%. This diversification of sources of revenue has served us particularly well during the volatility that we've seen in global investment markets during the course of the year. Perpetual's unique combination of businesses is particularly important in what is an increasingly uncertain global investment market environment. You can see from these series of charts how U.S. equities and bond yields have responded to recent global geopolitical and market events and the growing impact of global inflation. The chart on the top right shows the yield from Australian 10-year bonds. Surging bond yields have resulted from central banks responding to a rising inflation with quantitative tightening across all major economies, leading to a material correction in equity markets and, in particular, for growth stocks. The chart on the bottom left corner shows the outperformance of Australian value stocks in the context of previous cycles as the value period in Australia now becomes even more evident. While declining markets have impacted our sector and our business, our active value style capabilities position us very well through this cycle. It's during such cycles that both Perpetual's Australian equities team and our various capabilities in Barrow Hanley should perform well, and I'm pleased to report they are. Both these teams have generated substantial outperformance of relevant indices and have added material value to our clients, which positions us well for the future. Turning to the Q1 FY '23 summary. Yesterday, we released our first quarter business update for FY '23, with all business divisions performing well given the context of the difficult market environment. In PAMI, our total assets under management were $68.5 billion as at 30th of September, down slightly on the prior quarter. We reported total outflows of $1.4 billion, mainly as a result of outflows from U.S. equity strategies, which continue to be a difficult sector. In Trillium, we reported strong flows in global equities, reflecting the hard work over the last 12 months in distribution and marketing to set Trillium up to attract its largest-ever institutional client in ESG capabilities. In Barrow Hanley, relative investment performance remains very strong with 93% of equity strategies outperforming their benchmark over the important 3-year time frame. That's to September 30. However, total net flows are still beneath our expectations. When we acquired Barrow Hanley back in November 2020, we estimated that we would be able to turn flows positive within 3 years post completion. Whilst current market conditions are, of course, having an impact, we remain confident of achieving that original ambition. In PAMA, assets under management were stable at $21.1 billion compared to the prior quarter. We were thrilled that PAMA, Asset Management Australia, last Friday received the Zenith Fund Manager of the Year Award for the second year running. As one of Australia's longest-serving and most trusted investment managers, this award highlights the dedication and the expertise of our investment teams in remaining focused on delivering strong outcomes for our clients while navigating unprecedented times, staying true to label despite a long period of growth winning out over value, which has really reinforced the importance of active management and has reinforced the importance of our proven investment process. Relative investment performance of PAMA's funds has been exceptionally strong with 92% of Australian equity strategies outperforming their respective benchmarks over that important 3-year time frame to 30th of September. Importantly, we continue to bring new capabilities to the market. And in the quarter, we launched the Barrow Hanley Emerging Markets Fund to Australian investors. Turning now to PCT, which continues to deliver consistent growth in assets under -- sorry, funds under administration. That total increasing 3% over the quarter to reach $1.12 trillion. PCT's Managed Funds Services business was a standout in the quarter, delivering 8% growth in funds under administration, with capital flows and valuations remaining positive in the real asset business, leading to 16% growth in wholesale trustee, 7% growth in custody and 4% growth in funds under administration from our Singapore business. In Debt Market Services, funds under administration increased $1.5 billion or 0.2% over the quarter. DMS, Debt Market Services, which mainly services both banks and nonbanks in residual mortgage securitization, saw a good level of activity in the nonbank market with RMBS up 4%, while bank securitization was softer as a result of the slowing residential market. Importantly, the work to grow Perpetual Digital's client base saw 2 new client wins during the September quarter, including a joint MFS and Laminar Capital service capability winning a large wealth management client mandate. These new clients will be onboarded over the next 6 to 12 months. Lastly, in Perpetual Private, we once again had a quarter of positive net flows. And our native title and philanthropy businesses continue to be areas of strength with 4 new native title clients won during the quarter. We continue in PP to execute on our plan to expand Jacaranda Financial Planning across the Australian eastern seaboard, launching our first Jacaranda and Priority Life joint event in Melbourne during the quarter. So as you can see, there continues to be a good level of momentum across each of our businesses despite the broader equity market moves that we've seen and the generally softening economic environment. Moving to Perpetual's Prosperity Plan. As Tony highlighted, last month, we launched a comprehensive new sustainability strategy, which we have called Perpetual's Prosperity Plan. It is a major milestone for Perpetual and builds on our existing sustainability activities across the business. The plan sets out a clear vision and a suite of firm commitments to ensure Perpetual has a continued positive environmental and social impact and to uphold the high standards of governance that have underpinned our trusted business and brand since our creation 136 years ago. The strategy was developed following extensive internal and external stakeholder engagement and includes 35 specific measurable commitments across 4 key pillars where we believe Perpetual can make the most impact. Those 4 pillars are planet, people, community and governance. Major commitments within the plan include, and I'll run through a few for you, for Perpetual to have carbon-neutral operations by FY '23; for our overall business operations to use 100% renewable energy sources by FY '25; for us to give the equivalent of 1% of our underlying profit before tax through community giving and through volunteering; launching a global human rights framework by FY '25; delivering our 2021 to 2023 Stretch Reconciliation Action Plan known as a RAP; noting that aside from the major 4 banks in Australia, Perpetual is the only other financial services company with a Stretch RAP; we want to exceed 40% of women in leadership across the Perpetual business by FY '24; we're going to be very focused on increasing our ESG skills, products and capabilities; and we wish to maintain a strong client advocacy, seeking a Net Promoter Score of at least plus 40 every year. Importantly, the progress that we make towards each of these commitments will be reported annually as part of our Perpetual sustainability report. And of course, throughout the year, we continue to progress on a sustainability agenda. And it's been a very active program across those 4 pillars, as you can see. I won't go through every point here, but just to call out a few highlights. In planet, we have continued to expand our ESG offerings, providing our clients with a broader choice of world-class ESG investment capabilities. This calendar year, it included the launch of 5 SFDR, which is a European regulation surrounding categorization of ESG -- levels of ESG investing. SFDR Article 8 ESG funds in Europe, so launching 5 new funds. And we actually successfully raised over $800 million in new client money into those 5 new funds over the course of the year. In addition to Trillium's own commitment to be net 0 by 2050, as a signatory of the net 0 managers initiative, the team at Trillium have published an interim net 0 target for 75% of holdings in their larger capitalization equity strategies to commit to setting science-based targets by 2030. Now some call-outs in relation to the people pillar. We firmly believe that building a more diverse organization leads to greater diversity of inputs, diversity of opinions and creates more diverse conversations, which in turn lead to better decisions, which is simply better for Perpetual. Pleasingly, we once again being recognized by the Workplace Gender Equality Agency, known as WGEA, as an Employer of Choice for Gender Equality. However, we know there is always more work to do to improve the representation of women in our business and our sector. As a part of our Prosperity Plan, Perpetual has a target to increase the representation of women in senior leadership roles to 40% by the end of FY '24. Currently, 34% of our senior leader cohort are women across all of our businesses globally. As we emerge from the COVID-19 pandemic, mental health and well-being remains a critical priority across all of our businesses. We continue to be committed to a hybrid working model where our people are encouraged to work where they work best and to achieve a better balance between home and work life. In addition to measures introduced during the pandemic to support our employees' mental health and well-being, we've introduced a range of new initiatives, which include an additional community and well-being leave and an annual wellbeing allowance of $275 per person across the firm. Moving now to the communities pillar. We continue, as I mentioned, to make progress on our Stretch RAP and to build positive outcomes with aboriginal and Torres Strait Islander clients and communities. The specific aspirations within our RAP are an important focus for our people across the business. And through this focus and ongoing good governance, we are confident of positive outcomes. As one of Australia's largest managers and distributors of philanthropic funds, we act as trustee for around 1,100 charitable trusts and endowments. Perpetual has $3.5 billion in funds under advice on behalf of philanthropists, not-for-profit organizations and native title trusts. In FY '22, our clients distributed $120 million of their philanthropic funds, which rose from $103 million the prior year. Through our community giving and volunteering program, Perpetual gave the equivalent of around $2.4 million over the course of the year. And finally on governance. We are committed to upholding the high standards of corporate governance that exist across the firm and promoting strong corporate governance practices as outlined in our FY '22 corporate governance statement. In FY '22, we are focused on continuing to strengthen our responsible investment approaches and capabilities in ESG investing across all of our businesses. Turning now to the Pendal -- the proposed Pendal acquisition. This is indeed one of the most defining moments in Perpetual's 136-year history, the proposed acquisition of the Pendal Group. Pendal is a highly respected global multi-boutique asset management firm comprising of a number of significant brands. The Pendal brand itself, a highly respected investment brand with leading Australian equities, global equities, cash, multi-asset and fixed income capabilities. J O Hambro, a London-based global equities asset manager with specialist investment capabilities across U.S., U.K., European, Asian, emerging markets and global equities as well as multi-asset and fixed income capabilities. TSW, a U.S.-based value-oriented firm with a 50-year history of delivering to clients across U.S. equities, international equities, multi-asset and fixed income. And Regnan, a responsible investment business which provides advice and insights on important ESG issues and also manages impact-driven global investment strategies. These brands, together with Barrow Hanley and Trillium in PAMI and of course, Perpetual's industry-leading Australian asset management businesses, will continue to -- will combine to create a global leader in multi-boutique asset management with more than $194 billion in assets under management as at 30 September this year. All 7 boutique asset management brands will be retained with a materially enhanced global distribution team supporting investment professionals, looking after more than 100 investment strategies, covering all key global markets. Importantly, of the $194 billion in assets under management, more than $15 billion will be dedicated ESG assets under management, creating a global leader in ESG investing through the combination of Trillium, Regnan and other dedicated ESG capabilities across all investment teams. Like all industries, the asset management industry continues to evolve. Independently, both Perpetual and Pendal have built strong brands and reputations that have served clients for generations. As the asset management industry globally has matured and evolved, it has become increasingly competitive and increasingly global. This growth in competition and globalization has created margin pressures in an environment where the cost of business is only growing. We firmly believe that bringing these 2 high-quality businesses together combines the advantages of their true global multi-boutique approaches whilst providing both firms with the necessary advantages associated with size and scale needed to actively compete in the ever increasingly competitive global marketplace. Moving to the strategic rationale and expected benefits. This proposed acquisition presents a strategically and financially compelling opportunity for both sets of shareholders. For clients of both businesses, we will preserve, protect and promote the independence of each investment team and their investment autonomy. There will be no changes to key investment teams or key investment capabilities. This highly complementary combination of 7 premium and trusted brands will not only create a strong organizational and cultural alignment, but it will also provide us with an opportunity to immediately assume a leadership position as a global multi-boutique asset management firm. The significant widening and deepening of our global distribution footprint when added to the broad array of world-class investment capabilities with substantial -- all with substantial capacity for future growth provides us with a unique opportunity. Added to that, as mentioned, the leadership position in ESG investing that the combined group will hold. I'm sure you can all see why we are so genuinely excited by this opportunity. Since the acquisition announcement in August, we are pleased to report that we have made good progress on integration planning with the formation of a joint transaction integration committee, chaired by Sam Mosse, our Chief Risk Officer, who has been appointed as Transaction Director. Amanda Gazal, our Chief Operating Officer, has been appointed as Group Executive of Integration and will lead the integration program globally. There has been positive engagement with both Pendal teams and clients. And the Pendal client consent process is underway and progressing in line with expectation. Importantly, the positive momentum across our asset management businesses here at Perpetual as evidence -- continues as evidenced through our engagement with research consultants, asset consultants and clients. It's been a very much business as usual environment for Perpetual as evidenced through the fact that we've recently seen a number of really positive fund upgrades and various industry awards such as The Fund Manager of the Year Award, as I mentioned. Both businesses are focused on the preparation as required as part of the process of finalizing the transaction. Preparation of the scheme booklet is well advanced and is targeted to be released in November, with the scheme meeting held in December, subject to regulatory approvals. This transaction remains targeted to be completed by January 2023. Okay. In summary and outlook. In summary, we continue to see positive momentum across all of our businesses in FY '22, as I've mentioned, with all divisions delivering double-digit growth in earnings. Our unique business combination with nonmarket-linked revenues in PCT and PP have supported us extremely well through this more difficult market cycle. And they've provided a real anchor for the group and giving us capacity to continue to invest in our businesses through the cycle. Our investment performance is very strong with 93% of Barrow Hanley's equity strategies and 92% of our Australian equity strategies outperforming their benchmarks over 3 years. And we are well positioned for future growth in ESG with strong interest in our ESG investment capabilities and further expansion of those capabilities planned. Whilst the current market environment certainly presents some challenges, we remain confident of our ability to positively execute on our strategy, which now includes the path to completion of the proposed acquisition of Pendal. We believe, as I've mentioned, that the combination of the strengths of Perpetual and Pendal represents a unique opportunity for there to be an Australian-based leader in global multi-boutique asset management, combined with industry-leading advice business and an industry-leading corporate trust business. And the combination is a compelling growth opportunity for our shareholders. Before I hand back to Tony, I'd like to thank my fellow executive committee members who have worked incredibly hard over the course of the year, as have all of our people across Perpetual. They've continued to deliver the best possible results for our clients as well as for our shareholders. And I would also like to thank Tony and the Board for their ongoing support. Thank you.

Yay! Give him a hand, come on. So long as at the end you clap me as well. Just a joke. Thanks, Rob, and you should see congratulations on you and the team's achievements. Now we're down to the business end of the agenda, the present first -- the presentation of financial year '22 financial statements and statutory reports. This is the first item of business is to consider the full financial statements. I now formally table the financial report, the directors' report, the auditor's report for the financial year 30 June 2022. This is not, as I said earlier, a voting meeting, but shareholders will have an opportunity to ask questions and make comments. And the way I intend to handle the section at the meeting is as follows. First, I'll cover the questions that we received prior to the meeting. Then I'll invite questions from shareholders in the room. Thirdly, I will then provide -- answer written questions that we received online during the meeting. And fourth, I will then move to answer questions over the phone. As noted previously at this time, we will also take questions concerning the Pendal acquisition. As I previously mentioned, Brendan Twining, our audit partner from KPMG, is available to answer any questions, as I said earlier, in relation to their work. So let's open it up. Sylvie Dimarco, our Company Secretary, will be assisting the meeting by reading out the questions. Sylvie, questions before the meeting. Did we receive any questions for the auditor before the meeting?

Yes, Chairman, we received several questions from the Australian Shareholders' Association, the ASA. The first question is, since asking a question of you last year about Perpetual cybersecurity, there is now a heightened focus on cybersecurity as a result of the recent Optus hack. In light of this, as Chair of the Audit Risk and Compliance Committee, can you advise the meeting if there have been any upgrades or changes to Perpetual cybersecurity arrangements during the last year?

Thanks, Sylvie. I think that means there were no questions for the auditor. So I think you're okay, Brendan. So we've moved to questions received before the meeting more generally. I'll ask Ian Hammond to reply to that question.

Yes. Thanks, Chair. And thanks, Mr. Williams from Australian Shareholders' Association for that question. Good morning, shareholders. It's a very relevant question. And obviously, cyber is an area that continues to receive attention at the Audit Risk Committee and the Board itself. We have made considerable investments in cyber defense systems. And over the past 3 years, we've invested close to $13 million on cybersecurity measures. Much of that work was based on an input from an external review and recommendations. But cyber is an area where you could never stop investing, and we're conscious of that. We have an ongoing program in place to strengthen protection against cyber risk, which includes building data security principles into the design of all our significant digital projects. In FY '22, our privileged access management solution was implemented, which enables us to better control and monitor administrative access to our servers. Multi-factor authentication has been expanded, where 2 or more forms of verification and now required to gain external access to our IT platforms. Dedicated information security team exists now that provides security specific operations, incident response and solution design and IT risk assessments. And we have a 24/7 security operations center. Supporting this is a technology leadership team and a technology steering committee that manages overall technology strategy and risk. The mandatory notification of cybersecurity incidents is in place. And following recent incidents, which I'm sure you referred to in Australia of cybersecurity breaches. We are undertaking our own review to ensure that the protection mechanisms we have in place remain robust. We remain committed to continuous improvement in this area. Certainly, an area you can never stop investing in and focusing on and it continues to be the focus of both our Board and executive team.

Thanks, Ian. The next question, Sylvie.

The next 2 questions are from the ASA regarding the proposed Pendal acquisition. The first question, in relation to the acquisition of Pendal Group, can you please outline the quantum of the new debt facility which is intended to cover $757 million cash component of the Pendal offer as well as refinancing the existing debt facility and including undrawn headroom for liquidity management purposes? What is the quantum of the undrawn headroom likely to be?

Thank you. In short, in terms of making up, we have our facility less existing commitments and so on, but the headroom will be in the order of $100 million to $150 million post acquisition.

Thank you, Chairman. The second question, given that Perpetual has identified $60 million in annual pretax expense synergies within the first 2 years and that the one-off cost to achieve these synergies is $110 million with the majority incurred over 18 months and other transaction costs of $40 million, noting that before taking these costs into account Perpetual's expense growth guidance for FY '23 is 4% to 6%. Does this mean that once the one-off and other transaction costs have paid out that any overall group annual expense growth will decline by $60 million per annum in future years?

Thank you for the question. Yes. The synergy numbers are expected to be realized in the first 2 years post implementation and the reduction to remain in place beyond that. Perpetual's expense growth in financial year '23 of 4% to 6%, which we reaffirmed yesterday, applies only to Perpetual, of course, and not the combined group. And as we stated yesterday, we will continue to actively manage our expenses in light of external influences, including volatile investment markets and the current inflationary environment. But in essence, the answer to the question is yes. It's not a one-off. It continues through our results in future years.

Thank you, Chairman. The next question also from the ASA is in regard to Barrow Hanley. Given that Barrow Hanley's assets under management were down 14% in U.S. dollar terms as a result of the net outflows and market declines. What steps is Barrow Hanley taking to arrest net fund outflows given that these outflows are occurring during a market swing back to Barrow Hanley's strength in value investing.

Thank you. I'll ask Rob to take that question.

Thanks, Tony, and thanks for the question. In many ways, I covered some of the response in my earlier presentation. But yes, I think with Barrow Hanley, I think it's entirely a fair representation in that the -- we're very pleased with our investment performance from those tenders, which is incredibly strong. We're very pleased with the growth we're getting out of our global equity strategies. However, we're less pleased with the flow position coming from the U.S. equities component of the business and the U.S. fixed income component of the business. What have we done about that over the course of the year, and we continue to do this. We've invested heavily in people, and we've invested very heavily in product and platforms in order to allow us to distribute the investment capabilities of Barrow Hanley to a broader audience. That's included launching a U.S. mutual fund range, which are retail funds. It's a retail fund structure and a similar structure covering the U.K., Europe and Asia, called the UCITs platform. So for the first time, Barrow Hanley now has exposure to those more retail-oriented markets in the U.S. and across Europe. And the investment we've made in our people to then support that platform has been significant over the course of the year. So we're just starting to see the fruit of those labors in some ways. And I mentioned, for example, we launched 5 ESG funds on that European platform during the course of the year. I think it's -- I think 3 or 4 of those were Barrow Hanley products. So of the UCITs, here.

2 or more for the company.

Yes. So 3, there will be 3 on that platform, and we've already received several hundred million dollars of support. So there's still work to do. Again, I said in my words earlier that our original ambition was for Barrow Hanley flows to turn positive in the third year. That was our best estimate. And whilst times are certainly tougher now in this more volatile investment market environment, and there is a feeling of risk off right now, we're still holding to that ambition of turning flows positive in the third year. Sorry, long answer.

Thanks, Rob. Next question, please.

Another question from the ASA is about Perpetual Digital. The CEO's report mentions the establishment of a new division within Perpetual Corporate Trust Core Perpetual Digital. Can you please elaborate on the business of Perpetual Digital and why Perpetual is excited about its growth potential.

Thank you. And I'll ask Rob to take that as well.

Thanks, Tony. And thanks again ASA for the question. It's good to be able to highlight Perpetual Digital. It's a business that we are very excited about. Perpetual Digital really represents the coming together of a number of important parts of our Corporate Trust business. For many, many years, we have been providing data services in relation to information -- unique information data, risk tools and analytics associated with asset-backed securities that's been going on for more than 20 years. More recently, it was back in late 2018, we acquired a business called Perpetual Roundtables, which is effectively a subscription-based business that gets C-suite and senior people, risk people, particularly across banking -- the banking and financial services industry together to discuss critical industry matters. And we've had a business called Perpetual Intelligence for some time, which is a cloud-based platform as a service business that provides automated data management and analytics to the banking and financial services industry. And then more recently, it was October last year, we acquired a business called Laminar Capital. Laminar Capital provides treasury and debt market specialization services to capital markets and a range of digital solutions to the Australian banking financial services industry. So we brought all those components together and put them under the banner of Perpetual Digital believing that it's a large enough segment to be represented by itself and it's a business where we've obviously invested very heavily. And we're excited about the ability to effectively sell more of those products and services through to our debt market services' clients and others over time. Thank you.

Thank you. And Sylvie, are there any further pre-meeting questions?

No, Chairman, there are not.

Thank you. All right. Now we get to questions from those of you who have been patient at the meeting. Are there questions from the floor here? Please raise your hands, and we'll come with a microphone and go from there. Just one there as well.

Mr. Chairman, I'd like to introduce you to Rita [indiscernible].

Good morning, Chair and Board.

Good morning. Good to see you again in person.

Can I just say thank you for having a hybrid meeting unlike CBA last week that cut everybody off virtually unless you were there in person. So it's actually a really good mechanism to keep going every year because a lot of people can't travel. And with people -- people have lost their jobs, they can't afford to get to AGM. So I would encourage you to think about doing this process every year.

Well, thank you. Thank you for that comment. I say, I think our objective is to try to work out a way to simplify some of the formalities and the technology. I think at the moment, it's still a little bit process driven. So we'll give that some thought. Thank you.

Okay. My question is in regards to the Pendal acquisition. I'm raising this because of my intimate knowledge regarding the subject. And I just want to get the views to the Board. So regarding Pendal's assets under management, it's approximately $111 billion as at 30th of June, according to the annual report. And that the business operates across Australia, Europe, U.K. and the U.S. Now previously, Pendal was called BT Investment Management, which was owned by Westpac. And around May 2018, Westpac notified APRA in a meeting, it was exiting BTIM, as it saw a conflict in selling its own manufactured products. Around the same time, a conflicting news article quoted Peter King, who was Westpac's CFO at the time, saying the manager -- sorry, saying the bank no longer needed the stake in BTIM because BT Financial Group's priorities centered on the distribution of wealth products. Further, in Westpac's 2019 AGM, Peter King said that BT Financial Group's focus was supporting wealth needs and not needing to own an asset manager anymore. So in regards to the annual report on Page 38, under managing risk within Perpetual, it says that risk management continues to be a fundamental focus within our business with the Perpetual board having the responsibility and commitment to ensure that Perpetual has a sound risk management framework in place. So given Westpac's history of recent years of significant breaches in multiple areas within their business, and that they realize -- they only realized whilst the Financial Services Royal Commission was active that BTIM was a direct conflict for them. This begs the question how legitimate the assets within the acquisition were obtained. So how confident is Perpetual in the Board that this significant transaction and its underlying assets are not going to cause significant losses for Perpetual shareholders in the future because they may have been obtained by wrongdoing such as fraudulent actions?

Thank you for...

Sorry.

No, no. And for the history. First off, let me say, Westpac strategy and their position with setting up BTIM and divesting themselves of asset management and wealth is really a matter for them. It's not -- our objective has been Pendal and we've conducted extensive due diligence in relation and have an access as part of the negotiations to that due diligence. And I'll ask Rob to comment further in a moment. But certainly, your Board is entirely focused on ensuring that the -- what we're buying is what we think we're buying and we're not buying problems in terms that may or won't be there. I think we've carried out that due diligence. We're continuing, and we are satisfied with that business and what it's doing in asset management for us. But I'll ask Rob to comment further.

Sure, sure. I think, [Brenda] good to see you again. I think Tony has touched on the really important points. And that is our due diligence process, which has been extensive. It's going on for months and has involved scores of people across the organization. And we've had good access to all the right materials to make the right assessment of the quality of the client, the client book effectively at Pendal. Importantly, the vast majority of their assets under management are from completely independent sources with no relationship with Westpac. Having said that, the assets that Westpac is a client of their business as they are a client of our business and each of the underlying investors from those sources are individuals like you and me, like anybody in this room. So it is a true third-party client business. The vast majority of the assets are from a range of different sources, institutional investors in Australia, around the world, a range of different wealth management organizations for advice businesses. It's a very diverse book of business. So it's important to stress that point. But as Tony said, I think the key point is the depth and breadth and extensiveness of our due diligence process.

And just touching on if something was to occur, am I correct in that -- in the annual report, it says that Perpetual Limited has a guarantee for liabilities across all its consolidated entities to cover any losses?

In relation to the existing position of Perpetual, it provides guarantees to subsidiaries and letters of comfort and that's in place. I would expect that, that would also occur with other -- with acquisitions that we make. But you need to bear in mind that there's a scheme implementation deed in place, and we're still working through the conditions relating to that. But that settlement, we expect to get a company that's clean, and that's what our due diligence has been about.

Okay. Thank you.

Thank you. Next question.

Mr. Chairman, I'd like to introduce Mr. [Ron McFall]

My question is a bit based on curiosity. I worked for the state government quite a while ago. We used to get 4 weeks annual leave, 3 months long service leave after 10 years and another 3 months. I noticed some on one of the slides, these days, the staff get 2 weeks well-being leave, 20 weeks maternity leave. And I meant -- we used to get 30 days sick leave. I imagine the staff of Perpetual gets quite a bit of sick leave, long service leave, maternity leave and well-being leave, it seems like conditions are far better these days than what they were in my day. Is that true?

It's certainly better when you and I started. Yes. I'll ask Paul Chasemore, who heads our people just to run through what those benefits are and the competitive need that we have because we are in a very competitive market for talent. And it's -- we need and why those benefits are passed on to staff and then maybe Rob might want to say something. But Paul? If you probably stand focus of the camera?

Well, fortunately or unfortunately, that is kind of market practice now across a number of aspects of leaves. So yes, we're seeing that we've got a war for talent in the market, and we need to be competitive to attract the best globally -- across the globe. And so yes, this is the reality of the world we live in, and I'm personally glad that well-being is focused on more than historically. And so I think it's the right path that we support women and men when they're having families and yet provide additional well-being leave for people to -- yes, have head space from what's become a longer working day, I think, to the past in terms of where we've all got devices that are accessing work from 7 in the morning until midnight at night. And so I think it's a right step. And unfortunately, that didn't exist in the past. But I think we're in a better place today than we were historically.

Yes. Thanks, Paul. Rob, did you want to add anything?

I think Paul's covered it well.

Good. Thanks, Paul. Any other questions from the floor?

Mr. Chairman, I'd like to introduce Mr. Peter Gregory.

Good to see you again.

Good to see you, too. Thank you very much for the results the company has achieved and also like to express my particular thanks for the increased dividend. Much appreciated.

I'm glad you could say that. It's good.

I thought you'd like that. I'm speaking both as a shareholder since 2007 and as a beneficiary of a trust it started before I was born. As is well known, Perpetual's trustee business is, of course, its foundation. It's a rather unique business that creates customers for life for Perpetual. This means, of course, that beneficiaries of customers are committed to stay and therefore, lack the usual freedom to vote with their feed if they're not satisfied. On the face of it, this means an imbalance between the trustee and the beneficiary. But fortunately, for beneficiaries, there is an offset to this imbalance in the Trust Act, which outlines the expectations of how our trustee will manage its trust portfolio. In this context, I'd like to ask the Chair of the Audit and Risk Committee how they've satisfied themselves that Perpetual is meeting the intent and the words of the Trust Act and in particular, Section 14?

Thank you for the question. I'll ask Ian for an overview and then perhaps we should take the question on notice as well and come back to you much more specifically as we do that. But I'll ask Ian to comment, but then we will, after the meeting, take your details and come back in more detail. It's a very specific question, and you've got something in mind so we'd like to ensure that we answer that for you. Ian?

Yes. So thank you for the question. As Chair of the Audit and Risk Committee, we have quite an extensive compliance program that covers all the legal obligations that as an organization that we have to meet and other obligations as well, and it covers a review of the systems that we -- and controls that we have in place to ensure that we are complying with the requirements, including the ones you referred to. Obviously, that's part of our frontline responsibility of our staff. And then we have various layers of defense to ensure that those procedures and compliance procedures are operating. I'd need to be -- take on notice more specifically, your reference to Section 14, but happy to take that offline.

Section 14, just for your information, just deals with the responsibilities of the trustee and managing the trust.

Yes. And we can go through how we do that and maybe reference it back to your specific case.

Okay. If I could just add another question that I was going to ask. As I said at the outset, I'm a shareholder and a trust beneficiary. And I don't like distracting AGMs with details of specific issues. But I'm going to make the overall statement that from my perspective as a beneficiary, there hasn't been such a good experience between -- a good connection between my actual experience and that of the requirements of the Trust Act. Let me add. I don't believe there's any reason that I've been treated any differently to any other beneficiary. And as a consequence, I would suggest that there might be some inherent risks that need examining. And I'd like to ask to meet with appropriate people after this meeting to talk about general experiences and also specific issues that I've got.

Sure. Absolutely. Thank you and there should be no concern about raising those sorts of issues at an AGM. We're here to take on questions from shareholders and in your case, shareholder beneficiary. That's fine, and we will pick that up with you after the meeting. Okay. I think there is one -- sorry.

Can I introduce Ms. [indiscernible].

Chairman, Board. I'm attending this AGM that Perpetual will consider a matter regarding my home. I promised to be brief and to concisely outline the nature of my concerns.

I wonder would you be able to speak up a bit, it's coming down. I'm not picking it up. I'm terribly sorry.

I might trigger a cough, though.

Sorry. Let's see how we go.

Okay. My home is in Melbourne. For the past 3 years, I've been a carer for my sister who has advanced early onset Alzheimer's disease. Back in 2006, a low documentary loan for $460,000 was granted to me by Perpetual. It was arranged by my partner and secured against my home in circumstances that solicitors, Anna [indiscernible] felt to be unconscionable. And during 2012, working pro bono wrote directly to Perpetual and Advantedge Financial Services. When in response your solicitor Russell Kennedy rejected all of the allegations of unconscionable lending. My dire financial circumstances eventually left me no option but to reluctantly agree to a settlement. Commensurate with Perpetual's exemplary code of conduct, I ask you to consider the circumstances surrounding the granting of the low documentation loan. Details of which are brought with me to this meeting. As a result of the low documentary loan, I'm now in the invidious position thereby I have for all of the intervening 16 years, being able to only make the interest payments for the loan and therefore, have a debt of $580,000 hanging over my head. I simply do not have the resources to make any payments toward the capital having survived hand to mouth. And by the benefices of a dear friend, it was she who took me to see her family lawyers. [indiscernible]. Chairman. I hope you will ensure that I have an opportunity to discuss this matter I raise with your senior management. There is a little bit more.

I'm sorry.

Okay. With the exception of $40,000. Balance of the loan was paid unbeknownst to me directly to the NAB to settle the debt from my de facto partner of 16 years who tragically died shortly after. In 2018, I spoke very briefly with Mr. Peter Scott, the previous Chairman of Perpetual who upon learning of the nature of my plight, disappointingly then demured meeting with me and directed my inquiry to Russell Kennedy in Melbourne. Sadly, Russell Kennedy in a perfunctory manner, had already chosen to reject any and all allegations of unconscionable lending and fraud. In support of my claims, I have before me 2 versions of the relevant loan application of which both Perpetual and solicitor Russell Kennedy, a familiar. The first shows that I have no income at all and no assets other than my apartment and inexpensive secondhand car, savings of $25,000 and $100,000 worth of marketable personal effects. Whilst the second version, which was [Eden Burns] listened to me by Mr. Paul McCarthy of Russell Kennedy solicitors on the 21st of October 2014 has added to it that I had an income of $90,000 per annum and a share portfolio worth $600,000. The fraud committed in the second version of the loan application is obvious and as yet hasn't been acknowledged by Perpetual nor its solicitors.

Thank you. That's a very complex set of facts. And given at this point, what I'd like to do is we meet with you after this meeting and go through that in more detail with you. And as I said a moment ago, that is the best way to deal with it. It's very difficult to absorb the detail of that at a meeting such as this, but we'll assure you we will look into it with you, and thank you for raising it. Question up here?

Mr. Chairman, I would like to introduce Mr. [Paul Hathway]

Thank you. Difficult to follow the last questioner. A very moving story, and I hope that the Board and management of our company will take it very seriously. My question was a little bit lighter. I noticed reference to our company becoming net carbon neutral by June next year, I think, in the annual report, and I just wanted to ask how that's going?

Okay. I think -- thank you for the question. We're lucky enough to have a room, organizational specialist, Iva Gibbons. I might ask Iva to make a few comments here. He's forgotten more than I know about the target.

So yes, thank you for the question. That target relates to our operational emissions and so that's predominantly our offices or Scope 2 emissions to use their technical term. So that will -- we will be going carbon-neutral in our operations by FY '23. The way that we'll be doing that will be seeking to reduce our emissions -- well, particularly our energy use. Initially, and also to procure renewable power. And then we will purchase quality offsets with additionality in terms of the residual -- additional residual emissions looking to reduce those over time as we find ways to reduce that energy use and those emissions.

Mr. Chairman, I'd like to welcome back [Rita Marvelous]

Hello. Just in regards to the earlier question on cybersecurity. How does Perpetual manage third-party access, security across various systems, across multiple jurisdictions?

Very well.

How do you protect the privacy and private information?

Such that the Board is comfortable. Sorry, go ahead. Please finish your question.

That's all right. No, no, no. Just in regards to protecting client privacy and personal information and going across the globe, basically now.

Okay. Thank you. Rob, do you want to?

I'm going to do the double pass again Chairman. Thank you. Online, hopefully, I'll give Craig Squires is online. So hopefully, Craig can respond. Craig has been with the firm just for several months now. He was employed as Head of our IT and more recently has moved into a role acting as our Chief Operating Officer, while Amanda Gazal heads up our integration. And there he is. Craig, did you hear that question?

I did hear that question. Thanks, Rob. Look, the first thing is that all of the access to our systems is via multifactor. So there's no ability that will log in with just a simple password. You need a multifactor solution to be able to connect. And then all of the critical data is actually encrypted and stored in Australia for Australian clients; in the U.S. for U.S. clients, et cetera. So data doesn't move across geographical boundaries and the appropriate encryption solutions are in place with 2-factor authentication.

Okay. Yes. No, that's good. Could I just also add people might realize or know from previous years, I'm actually an aggrieved Perpetual customer, but I am liaising with Mr. Adams and having a meeting with him later. And we have communicated for a couple of years and also the Chair.

And with me.

Thank you. Yes. So I acknowledge that. I would just like to acknowledge this young lady here who I don't know and her unfortunate circumstances. And I just want to thank you for committing to meeting with her because it's very -- it's not a good position. And being someone who helps financial victims across Australia. When you're prepared to meet with the person that's been victimized whether it's through something that you're aware of through your business or not. It's very important that the customer gets to give you their circumstances and see what you can do. So thank you.

And you would have seen that because you've been to other AGMs. You've seen that's a consistent approach that I've had and the Board's had.

Yes. That's why I wanted to know.

I have many years.

Yes. Thank you. Thanks.

Thank you. Okay. If there are no further questions, Sylvie, can we now move to questions you've received online?

Mr. Chairman, we have several questions. The first question is from Stephen Maine. Which 3 Pendal directors will be joining our Board? And do we have veto rights in terms of choosing who we would like to join? Or is it up to them as a group? How big is the field of candidates and have any of the existing Pendal directors ruled themselves out at this point?

Thank you for the question. In the scheme implementation deed we've provided that up to 3 Pendal directors would be invited to join. And up to 3 may or may not accept those discussions and who they are going on, and we expect that we will make an announcement on that, probably post the scheme booklet that is certainly leading into the voting by the Pendal shareholders. We've been very pleased that the directors of Pendal have indicated their wish, a number of them that do wish to come on and help settle the business down. In terms of the process, the process of appointment is that we will finish that and make our decisions on who we invite to join. Having done that, that appointment is likely to be when the transaction completes. And then at the next AGM, those directors would be offering themselves for reelection by shareholders. So there will be an opportunity for shareholders to look at the Board again when that when that occurs. In terms of rights of veto, I don't understand that part of the question, but no one has a right of veto. It's an issue of negotiation, discussion invitation, appointment and then shareholder approval.

Chairman, the next question is from Craig Caulfield. He says, good morning, the financial review reported on 26 August that the planned Pendal takeover will boost earnings that carries significant risk that clients and staff may head for the door, say in that Atlas. Perpetual, I read is one of the most shorted stocks on the ASX since Pendal announcement, the share price has tanked. How confident are you that Pendal clients will all transfer to Perpetual and not take leakage that will undermine the acquisition?

I'll make 2 comments, and then also ask Rob to comment. The Board in looking at this transaction and engaging with Pendal had very early on a very clear condition precedent that needed to be met, which was the consent and approval of a range of their key people or asset managers. And that went through discussions and when we were comfortable they would come across, we then got further into the deal. In terms of the share price and what's occurring with schemes of arrangement, broadly basically because of the gap between the time the offer and the voting plays in the market, try and position us to where -- what the completion risk is and take bets about it completing or not completing, and that's been a key factor in our share price. Basically, what we're saying to shareholders is you've got to look through that. You've got to look at the fundamental value and see as we get nearer to completion, we expect that gap to narrow. And what will matter is -- what matters to us is the underlying value of Pendal. And as I said earlier, we're very confident about that underlying value that Pendal has as a quality business that we would be acquiring. And it needs to be borne in mind that some years back Pendal and Perpetual pretty much the same. It's only been in a more recent time that this has become an opportunity for us. Rob, do you want to?

Yes. I mean, I think Tony has probably covered the main things. Maybe if I provide a bit more color in relation to the specific question in regards to the potential for clients not to come across through the transaction. As Tony alluded to, one of the key provisions or requirements that must be met is that a certain percentage of Pendal's clients must consent to the change of control. And there's a number which is 82.5%, if -- less than 82.5% of clients consent to come across, then that is a material condition where we could reconsider completion of the transaction. We did comment in yesterday's Q1 business update that, that client consent process was underway. It's obviously run by Pendal and that to date, that client consent process is proceeding in line with expectation. And so we will obviously monitor that position very closely.

So in summary, both in terms of getting the asset managers across and the consents in relation to that, that we get the people that go to business and the clients, there was the initial condition about the asset managers and as Rob has explained, there's also the 82.5%, I think, in relation to clients coming across. So we, as a Board, we've looked carefully at ensuring -- at the end of the day, we have to ensure that what we're paying for is what we're going to get. That's the key to this, and that's what we've been working through.

Thank you, Chairman.

Next question?

The next question is from Stephen Maine. Rather than overpaying for Pendal, why didn't we make a play for Magellan, which has been in crisis for months now and looks cheap? Have we looked at Magellan or had any discussions with them? Similarly, at Regal recently snapped up a 5.5% stake in Platinum. Have we looked at Platinum or had discussions with them, particularly when it became apparent major shareholder, Judith Neilson was a sellout over the past 2 years?

Thank you. Look, it's not a game of seeing who's on the market, who's in trouble and you go and buy them. I mean fundamentally, what's important for our business is that we strengthen the underlying business that we have. And the Pendal opportunity, the style of investment where they're at in their development is what aligns with what we need as an organization. Clearly, we look at a lot of things and management bring up things and quite a number of them get rejected by the board or they don't put them up in any event. I don't wish to comment on any of the names that have been mentioned other than to assure our shareholders that it's about fundamental value adding to our business, and Pendal is the one that provides us with the opportunity at this point of time, notwithstanding the difficulties that are inherent in getting them across the line and getting the shareholder vote. This is not in the bag. I mean there's still a way to go. But what guides us is the strategy. As I said earlier, we have an asset management strategy in terms of what we're building out in the U.S. and now with Pendal in Europe. And we have a trust strategy, a wealth strategy in our business. And that -- what we look at is how do we add value to those businesses. It's not simply looking at who could be available and who you could buy cheaply. If you could combine the 2, that would be great. But unfortunately, life doesn't work that way because good businesses are generally hard to find.

I might just add, I agree with everything the Chairman said. I would add that in the case of Pendal, having had the opportunity to meet all of the key individuals across the firm whether they be here in Australia, in the U.K. or across the U.S., it's a very high-quality business, very high-quality investment professionals. Having personally been in asset management, working with individuals such as these for 35 years, I would put some of the key investment professionals as amongst the best I've ever seen. This is a very high-quality business, and we think we can add value to that business over time.

Thanks, Rob. Sylvie?.

The next question is from Craig Corfield. Net Promoter Score is quoted on Pages 3, 8, 11, 12 and 13 of our annual report as a metric of customer satisfaction. Forbes quoted NPS results are easy to manipulate and some companies remind only happy customers to take the survey. At the 2019 AGM, 4 long-standing customer complaints were ventilated. While Mazalevskis case remains unresolved, Ms. Mazalevskis has never been asked to rate Perpetual in NPS. If wholesale customers are asked and retail customers aren't asked results -- sorry, results are distorted. How is NPS audited?

Thank you. Thank you for the question. There may be a couple of people that who want to comment on this in a moment. But certainly, in my experience and with other organizations of all the metrics that you look at, the NPS is actually quite a good metric when it's conducted independently and you've given the results. So over the years, as I say, my own experience has been that it is a good system. But in terms of the detail of ours, I'll ask -- Rob, do you want to pick that up? I'll ask Rob to pick up as in more detail and reassure you about the independence and the selection process of customers.

I'll make some initial high-level comments that passed to our Chief Financial Officer, Chris Green, who can make some comments. Get a mic to Chris or do you have a mic? There's one. Thanks.