Ricegrowers Limited (7H0.F) Earnings Call Transcript & Summary

Good morning. I'd like to welcome you to today's Annual General Meeting. It's 10:30 a.m., and I have been advised by the company secretary that we have a quorum and declare the meeting open. Today marks the 70th Annual General Meeting of Ricegrowers Limited and the first Virtual AGM in our history. These are unsettling times, as you know, given the escalation of COVID-19 cases, and our AGM location's proximity to the Victorian border, we made the decision to hold today's meeting online-only. I've spoken to many of our A Class and B Class shareholders over the past few weeks and want to thank you all again for your understanding and your participation. For those of you who haven't met me, my name is Laurie Arthur, your Chairman. As you can see, we have put in place appropriate social distancing. In the room with me are Rob Gordon, our Chief Executive Officer and a Director; Kate Cooper, our acting Company Secretary; and Dimitri Courtelis, our Group Chief Financial Officer. Two of our independent nonexecutive directors are standing for reelection today, and they are joining us via video link, Ian Glasson and Luisa Catanzaro. Joining us today online are Directors John Bradford, Andrew Crane, Gillian Kirkup, Ian Mason, Jeremy Morton, Leigh Vial and Julian Zanatta. Joining us by phone, we have Mark Dow, our auditor and a partner of PricewaterhouseCoopers. I would also like to welcome Quentin Digby, our legal adviser from Herbert Smith Freehills, who will act as our moderator today. We will answer as many of your questions as possible just as we would in Jerilderie, and we would -- we'll work through the detail on how to do this shortly. In terms of today's agenda, Kate will go through procedural matters next before I give my Chairman's address. Rob will then deliver his CEO presentation, and we will take your questions before conducting the formal business of the meeting. There will also be time for general business. Immediately following the AGM or at 12:20, whichever is later, we will commence the B Class meeting. This will be through a different link than the one you are joining us with now. Once the results of both meetings are known, they will be announced on the ASX and the SunRice website. Given this is a virtual meeting, and you are able to vote now, I declare the poll on each of the resolutions open. I confirm that I am holding undirected proxies in my capacity as Chairman of the meeting, and I will vote those proxies in favor of each resolution. I will vote all directed proxies in accordance with the directions provided by shareholders. I'd now like to hand over to acting Company Secretary, Kate Cooper, who will explain how to vote and ask questions during the meeting. Thanks. Kate?

Thank you, Chairman. Voting today will be by way of poll. The resolutions in the Notice of Annual General Meeting are only able to be voted on by A Class shareholders. Three of these are ordinary resolutions, which require a simple majority of votes cast to proceed. Resolution 4 is a special resolution, which requires a 75% majority of votes cast to proceed. In line with standard corporate practice in Australia, we will share with you the proxy and direct voting results of each resolution before you vote. Please note voting will close 5 minutes after the AGM ends. A Class shareholders attending the meeting online are able to cast their votes using the electronic voting card available to them after registering as shown on screen now. Please note, you will need to enter your SRN or HIN, along with the post code of your shareholding, to access your voting card. If you have already submitted a direct vote and wish to change your vote, you will need to call Link Market Services on the help number displayed on screen to do so. Votes cast today during the meeting will override votes previously submitted. As the Chairman noted, there will be time for questions from both A and B Class shareholders. [Operator Instructions] Questions or comments previously submitted by shareholders over the course of the last few weeks will be addressed first. If you have questions already prepared on any of the agenda items, please submit them now so that we can answer as many questions as possible during the meeting. Please note the resolution number, your question relates to at the start of your question. I note we will group the questions by agenda item, and we'll respond to them when we come to each item of business. A Class shareholders who wish to comment on a specific resolution are invited to do so through the ask-a-question function. B Class shareholders who wish to comment or ask questions about the management of SunRice, the conduct of the audit or preparation and content of the auditor's report are also invited to do so through the ask-a-question function. Again, please submit your comments or questions now if you can. You don't need to wait until the item is under discussion. On your screen, you can download the Notice of Meeting, the 2020 annual report and the virtual meeting help guide, all of which have been provided to shareholders in advance of today's meeting. A copy of the Chairman and CEO presentations were also lodged on the ASX market announcements platform prior to the commencement of the AGM. If at any point, you experience technical issues or need help, please call the Link Market Services number on screen. Support staff are on standby to help. If we do experience any technical issues today, a short recess or an adjournment may be required depending on the number of shareholders being affected. If this occurs, the Chairman will advise you accordingly. Thank you, Chairman.

Thank you, Kate. I will now give my Chairman's address. As we celebrate 70 years of SunRice, I acknowledge that financial year 2020 was a challenging year. The Board was clear from the outset that it would be a difficult 12 months given the impact of successive years of low water availability, high water prices on Australian rice production. However, as Rob will speak to, financial year '20 also brought with it deteriorating conditions in key global markets and a series of unexpected impacts on the group, not least of which was COVID-19. There would be few companies in Australia that would be able to retain their profitability when faced with a 91% reduction in the availability of their core input, even before the other challenges we faced are factored in. As Chairman, this is a clear demonstration of the underlying resilience of our company and the performance of our management team led by our CEO. As you will hear later, we were pleased to see our management team exceeded most -- almost all of the KPIs we set for them and deliver what was a creditable result in a challenging context. The Board has had a strong focus on the Riverina cyclical downturn but also, for the past 3 years, the execution of the group's 2022 Growth Strategy. This is designed to strengthen and grow the company to provide sufficient scale to navigate challenges and meet the needs of customers in a dynamic global environment. In financial year 2020, we continued to leverage the group's strong balance sheet to pursue strategic growth and build value for our growers and investors following our listing on the ASX in 2019. Despite the operational challenges of the past 12 months, we were pleased to declare a fully franked dividend of $0.33 per B Class share, representing a dividend yield of 6.4%. This was largely made possible due to the diversification of earnings across the group's portfolio and our global sourcing capabilities in a year in which the Australian rice crop was scarce. We remain focused on delivering value for our B Class shareholders, particularly in the context of lower volumes of Australian rice, which impact on our Profit Businesses in the form of underutilized milling and storage assets. While our stated revenue goal of $2 billion under the 2022 Growth Strategy will now take longer to achieve, our innovation pipeline remains strong, and we have the balance sheet strength to continue to pursue and integrate value-accretive merger and acquisition opportunities. We have also taken the decision to cancel the share buyback scheme, which we announced in December 2019. The scheme was launched as part of our commitment to efficiently manage capital while maintaining balance sheet flexibility to pursue future growth and investment opportunities. However, the recent improvement in B Class share price meant it had not been necessary for us to participate in the market. Understanding the impact of low water availability and high water prices on our A Class grower shareholders, as a Board, we exercised our discretion to defer the redemption of A Class shares during the year. In order to incentivize production to maintain baseline Riverina operations, our growers were offered fixed price contracts of $500 per paddy tonne for medium-grain Reiziq and up to $1,350 per paddy tonne for organic varieties in crop year '19. However, only 54,000 tonnes of paddy were harvested, which, as I mentioned earlier, was a 91% reduction on the 623,000 tonnes harvested in the prior year. In August 2019, the Board took the decision to offer record fixed price contracts to stimulate C20 plantings. This crop, harvested in mid-2020, was being marketed in financial year 2021, was smaller again at approximately 45,000 tonnes. The Board is cognizant that the impact of low production is not only felt by our growers but across our New South Wales growing regions. In crop years of around 600,000 tonnes, SunRice directly contributes close to $400 million to the Riverina economy in the form of payments to growers, shareholders, employees and other suppliers. In contrast, in crop years such as those we are currently experiencing, our direct contribution is significantly smaller. While there have been ongoing drought conditions, there is growing evidence that the allocation yield of New South Wales' general security water entitlements has been significantly eroded as a by-product of Australian water reform. Despite assurances contained in the 2004 National Water Initiative, the burden of these New South Wales and federal reforms are not being shared equally. This, combined with the complexity and lack of clarity in the water allocation process, has led to a loss of confidence by our Riverina growers in the management of the southern-connected Murray-Darling Basin system. As such, the Board intensified its advocacy efforts with the New South Wales and federal government in financial year 2020 to address these unintended consequences and will continue to do so in conjunction with the Ricegrowers' Association of Australia. Beyond our focus on group strategic direction and performance, there were changes to Board membership following the grower director elections and a review of Board composition, size and tenure during FY '20. This included welcoming new nonexecutive grower directors, Jeremy Morton and Julian Zanatta. We are clear that at 11 directors, the Board is too large for a company of our size and took steps to ensure that we rightsize the Board and our governance framework for the future. Today's resolution on this matter is designed to ensure that we are well placed to oversee the group's growth and the many cycles our company faces: from foreign exchange impacts and drought and economic fluctuations in key global markets to unforeseen jolts such as those experienced in FY '20. As a Board, we also strengthened our risk management framework and continued to monitor the group's performance under the Board's 2017 Sustainability Charter. This included our commitment to mitigating the risks of a variable climate and the approval of a new SunRice Supplier Sustainability Code. I note we now are well placed to issue our first Modern Slavery Statement in financial year '21. As the year closed, COVID-19 demonstrated that the Australian public demands access to their preferred staple food in times of crisis. The cleanout of rice from our supermarket shelves in the first weeks was a stark example of the importance of our rice industry not only to Australia but also potentially to our nearest neighbors. Our rice industry has taken nearly a century to build and should not be taken for granted. With reasonable access to water, we can play a significant role in the recovery of rural Australia post COVID-19. In line with this, I would like to briefly speak to the pricing offers we have made our Riverina growers to stimulate plantings for the next year's, '21, crop. As many of you will know, we received significant interest in our recent fixed price offer of $475 per tonne for Reiziq, $525 per tonne for Doongara and $625 per tonne for Koshi. Contracts were opened on the 29th of July to critical year growers who grew in the past 2 years and then to all other growers on the 31st of July. The initial offer was fully subscribed in 4 days, and as a result, we have already contracted substantially more volume than was grown in the 2019 or 2020 seasons. Following recent increased rainfalls, inflows to major water storages and allocations, yesterday we announced the opening of a pool for the '21 Riverina rice season ahead of the October planting window. Significantly, this is the first pool that the group has run since 2018, and we are pleased to provide an estimated range of $390 to $450 per tonne for medium-grain Reiziq. With pricing for other annual crops under pressure, SunRice's reputation for always paying, the demonstrated suitability of rice to our farming systems and conditions turning in our favor, the Board believes the estimated range for the pool is a compelling proposition for growers. Pool #1 will open to critical year growers on the 7th of September 2020 and to all other growers on 9th of September 2020. We are seeking commitments from our growers so that we can undertake critical planning, including determining how much seed will remain after the '21 crop is planted. The small volume from past crops, which is currently being milled, is expected to be exhausted in early 2021. Our intention is to utilize any excess seed to maintain a milling program at Leeton and Deniliquin for the period between the exhaustion of our current paddy and the '21 harvest. It is clear that there is a desire to grow rice, provided the economics work for individual farmers, and we are increasingly optimistic of a much larger rice crop being planted in '21. We look forward to receiving strong response from our growers, particularly given the positive flow-on effects for both A and B Class shareholders that the increased volume delivers for our facilities in the Riverina. I am proud to be Chairman of a company that has consistently demonstrated resilience and innovation across multiple cycles of adversity and opportunity. We have not only endured, but thrived, for 70 years and will continue to do so. I thank my fellow Directors, our growers, shareholders, the RGA and RMB and our dedicated employees, led ably by CEO Rob Gordon, for ensuring the company's continued success. We have an excellent team at the helm and are firmly focused on executing our growth strategy for the benefit of both A and B Class shareholders as well as the many communities that rely on us across the Riverina and around the world. Thank you for your support today. I look forward to the journey ahead. I'd now like to invite CEO, Rob Gordon, to speak.

Thank you, Laurie, and good morning to everyone who has joined us. At last year's AGM in Jerilderie, I don't think any of us could have predicted that we would be gathering for this year's AGM in this fashion. While we had intended to hold our meetings physically in Jerilderie and online, with the continued escalation of COVID-19 cases in Victoria and New South Wales, we took the decision to move to online-only. While we felt this was a necessary thing to do for the well-being of our shareholders and the community, we do appreciate it's a different medium, and I thank you for your patience. This is reflective of the many changes we've had to make to the business in response to the extraordinary circumstances associated with the global COVID-19 pandemic. Please note our standard disclaimer notice on screen, which includes the nonstandard elements of SunRice's share structure. Today's presentation has already been lodged with the ASX and on our website if you'd like to read this in detail later. We have a full agenda today covering the 70th anniversary of the company; context for the financial year 2020 and challenges faced, including the Australian bushfires and, of course, COVID-19; our financial year 2020 financial results; an update on our strategy and highlights; the outlook for the 2021 Riverina rice season and steps taken by the company to build momentum; and a look ahead at financial year 2021. Before we start on this agenda, I wanted to acknowledge and highlight that 2020 is, in fact, our 70th anniversary. I am incredibly proud to have led the company for the past 8 years, and I'm thankful for the ongoing strong support of the Board and Chairman and for the opportunity to be able to build on the achievements of the generations that have gone before. Of course, a lot has changed in the 70 years since Ricegrowers Co-operative Mills Limited formed in 1950, and this slide shows just a selection of those key developments: from building the Deniliquin Mill, to establishing Trukai Industries Limited and acquiring CopRice in the 1970s, to establishing our rice research division in the 1980s. Then in the 1990s, our Solomon Islands business, SolRice, was acquired, as was Riviana Foods, further diversifying the company's earnings into nonrice products. In the 2000s, SunRice became the new trading name for RCL. And in 2005, the company was corporatized, becoming Ricegrowers Limited. We listed on the NSX in 2007, hit $1 billion in revenue in 2012 and, of course, last year, listed on the Australian Securities Exchange. Over that time, we have become an international company, selling products to more than 50 markets and having operations in 9 countries around the world, and diversifying our supply sources through acquisition of processing mills in California and Vietnam and sourcing rice from 12 different countries, including Australia. Today, we are not just a company responsible for marketing the Australian rice crop but a truly international fast-moving consumer goods and global rice food business with a tremendous reputation. The Riverina is our heritage and remains a critical part of our business, and we have taken those values and implanted them in every place around the world in which we operate. Despite the fact that SunRice has built such strong branded positions around the world and diversified its earnings and structure, the heart of our business remains based in the Riverina, and therefore, we are still exposed to the Australian agricultural cycle. I want to share with you what we've achieved through that cycle since coming out of the millennium drought in 2012. Our share performance has increased by 106%, outperforming the S&P/ASX 200 Consumer Staples Index, which had growth of 56%. We've paid out more than $2 billion in Riverina paddy payments and more than $148 million in fully franked dividends to B Class shareholders. The group's net tangible assets grew 53% with more than $234 million invested in capital expenditure. And total shareholder return increased by 210% between 2012 and 2020, which outperformed the ASX 200 Consumer Staples Index, which had an increase of 112% in that same period. And we've improved the strength of our balance sheet with gearing reduced from 40% to 15%. Of course, the most -- the 2 most recent years have once again been affected by drought, low water availability and high water prices in the Riverina. But as you'll see later in the presentation, we haven't lost the focus on growing your business so that when we come out of this low point in the Australian agricultural cycle, we should return to even greater success. At the start of last year, with a crop of only 54,000 tonnes available from the Riverina, representing 5% of our global demand, we knew that the overhead recovery of our asset base would be challenging, and we planned accordingly. But we did carry in approximately 300,000 tonnes of crop from 2018 which, although lower yielding, allowed us to set aside the 54,000-tonne crop and combine it with the 2020 crop to mill in the current financial year. We also activated our international sourcing capability to bridge the gap between the small Riverina crop and global demand of more than 1 million paddy tonnes. However, as the year progressed, it became truly extraordinary with the challenges posed by the drought conditions exacerbated by a number of other significant headwinds. In Papua New Guinea, our biggest market, and the rest of the Pacific, we saw a continuation of deteriorating economic conditions. The devastating bushfires, which hit Australia last summer, had a negative impact on our at-home entertaining business and the Riviana Foods segment, with barbecues banned in many parts of Australia. And continued devaluation of foreign exchange, mainly the Australian dollar and Papua New Guinea kina against the U.S. dollar and euro, impacted the profitability of a number of our segments, including Rice Food, Riviana Foods, Trukai, SolRice and our International Rice segment. In addition to all of these challenges, you would be, of course, aware that the global COVID-19 pandemic has had a dramatic impact on many Australian businesses, including in our sector, with many of our peers canceling dividends, raising fresh capital to strengthen their balance sheets and finding themselves under financial stress. I would now like to share some detail on how your company has responded and managed through these very troubled times. Our approach to COVID-19 has been focused on 3 key pillars: implementing new working arrangements to protect the health and well-being of our staff; Maintaining business continuity and production to the highest levels possible; and keeping in close contact with our key stakeholders, including our customers and suppliers. Throughout this crisis, our operational staff in Australia and around the world have continued to work to ensure that our products, which are a critical food staple in high demand in many of our markets, could continue to be produced and delivered to customers. Our office-based employees have continued to launch new products, source rice, manage complex disrupted supply chains and do their level best to continue business as usual, despite working from home. And some 5 months later, they're still working from home. And to make life even more difficult, on the weekend prior to our office-based employees working from home, we experienced heightened cybersecurity activity, which impacted upon some of our key systems. And I just want to acknowledge all of the people in our organization who contributed to managing such difficult circumstances. I'm immensely proud of the ingenuity and commitment of our employees. Our CopRice employees have had to find new ways of doing business given restrictions in New South Wales and Victoria, which limited their ability to travel onto farms. In our facilities in the Riverina, a number of employees who had been made redundant due to the small 2019 crop agreed to stay on for a period of time to help us respond to the sudden spike in demand. We put in place additional safety measures in our facilities, which meant that each time an employee suspected they might have COVID-19, we shut down the facility and undertook a deep clean. We also redesigned our offices for social distancing and registered our Australian premises as being COVID-safe. Employees across our global group have found new ways to stay connected with each other and their customers, suppliers and key stakeholders despite the inability to travel and the extra burden of restrictions, including, for some, the responsibility of juggling homeschooling. We had increased demand for many of our retail products with demand, in some cases, more than 200% of forecasts due to changes in consumer shopping patterns. This sudden spike in demand exceeded existing levels of supply. We ramped up production to respond to this event. However, there was a real change in the channel mix of our business, with customer relationships being challenged at times. The restrictions in Australia and other markets saw a collapse in demand for our foodservice products, with sales in this channel down by as much as 60%. And there were states of emergency declared in the Solomon Islands and PNG, and martial law was imposed in Jordan and that remains in place today. Price freezes imposed by some governments due to food security and affordability concerns prevented us from recovering the negative impact of foreign exchange fluctuations, and there were a number of complex supply chain disruptions, including access to some ports being interrupted and shipments being put on go slow between particular destinations. We also saw severe export restrictions on rice imposed in Cambodia and Vietnam, highlighting our key role in providing food security for Pacific Island nations. Perhaps these impacts on our business are best illustrated by a couple of examples. Our stock destined for Middle East markets in time for Ramadan became trapped in an Italian port when Italy closed its borders. We sent back-up stock, but this was delayed as shipping companies took advantage of low oil prices and avoided the direct route via the Suez, traveling a longer route, which meant that the inventory arrived after the celebrations. And in Hawaii, our largest market serviced from SunFoods, cruise ship and tourist volumes were decimated as can be seen in the chart onscreen, showing the reduction in domestic and international arrivals. I hope this provides an insight into why I'm so proud of the dynamic response our employees have demonstrated in delivering this strong result in spite of such difficult circumstances. As we continue to respond to the COVID-19 pandemic, the safety of our people, customers and suppliers continues to be of the utmost importance to us as well as ensuring that the role we play in food security is fulfilled in every market in which we operate. So against that backdrop, what are the key numbers for financial year 2020? Well, in financial year 2020, we delivered group revenue of $1.13 billion and net profit after-tax of $22.7 million, down 5% and 31% year-on-year, respectively, and we declared a fully franked dividend of $0.33 per B Class share. We also paid high paddy prices of between $500 and $1,350 per tonne, dependent on varieties. Our balance sheet remained strong with gearing of only 15%. Now to deliver these results in the face of the above challenges, I think, stands us apart from our peers on the ASX and highlights the resilience and strength of our business model. As I highlighted earlier, we successfully met global demand for our products of in excess of 1 million paddy tonnes, with only 5% of this volume available from the 2019 Riverina harvest. Flexing of this capability enabled us to maintain our leading positions in many of the approximately 50 markets in which we sell branded products globally. While in our 2022 Growth Strategy, we wanted to drive top line revenue growth, the chart on the right of screen demonstrates how we've managed to maintain revenue while reinventing our supply chains in response to reduced production in Australia. Further, the financial year 2020 bottom line results were delivered despite having to absorb under recoveries in the Rice Pool business, incurring redundancy costs of $4.5 million associated with reducing our Riverina employment due to the small 2019 crop, incurring $4.5 million in nonrecurring costs associated with the increased level of risk due to COVID-19 and negative foreign exchange impacts for our importing businesses of approximately $8.5 million. The result was further supported by the implementation of cost savings of more than $10 million across the group. In addition, we have had ongoing reductions in employment in our Riverina operations due to the low production, with head count in the Riverina reducing by approximately 200 positions between November 2018 and April 2020. The continuous financial discipline exercised by the group resulted in the generation of a positive net cash flow in year despite the challenging conditions that we experienced. We also reduced the level of debt from $132 million to $122 million and successfully refinanced the group's debt in April 2020, extending its average maturity for a further 2 years, with facility tranches maturing now in 2023 and '24. In the current economic environment, the credit market has been severely disrupted by COVID-19, resulting in toughened conditions in accessing banking facilities. Our ability to secure and refinance long-term debt with favorable terms and conditions is a testament to the resilience and strength of our balance sheet and the confidence of our banking syndicate. This slide briefly shows the results of each of our segments and some commentary on key drivers. If shareholders would like more detail on individual segment performance, this presentation and our more detailed financial year 2020 financial results presentation are both available on the ASX and our website. Now I wanted to spend a bit more time focusing on the impact on the business of the extremely low Riverina production these past 2 years and how we responded. With Australian supply dropping from approximately 800,000 paddy tonnes (sic) [ 802,000 paddy tonnes ] in 2017 to 623,000 tonnes in '18 and then to 54,000 tonnes and 45,000 tonnes in 2020, we have to totally reinvent our supply chains. As this slide shows, for the current financial year, we are sourcing rice from 12 countries and are forecast to supply more than 1 million paddy tonnes of rice to our customers around the world. Many other companies would just go into loss-making territory when faced with this sort of a challenge, but we were determined to maintain profitability and to find alternative supply sources to ensure we met our global demand of more than 1 million paddy tonnes to keep premium markets open and available for when Australian rice production returned. This meant our teams mobilizing more than 60 changes of source for product sold into markets across the Australasian, Pacific, Middle East and Asian regions across the last financial year. This involved finding a grain that was suitable for the end market, including testing to ensure it matched our stringent quality and sensory specifications; identifying partners in each of our markets with packing capability in the right format; adjustments to our marketing programs; and then securing enough margin from these markets to recover 2 sets of overheads, the under recovery of our underutilized assets in the Riverina and then the additional overheads in the particular market from the new supply chain. Our teams not only managed this successfully, but they maintained an active pipeline of new product development and other initiatives to drive growth in coming years. We have also continued to build our people capability, hiring great talent, particularly across our offices in the Asian region, to drive further expansion and growth. I will go through some of these initiatives in the coming slides. So throughout all of these challenges, we haven't taken our eye off the ball when it comes to delivering against our growth strategy. An active capital investment program was maintained for much of the year, with the pursuit of new value-accretive merger and acquisition opportunities to further diversify and increase earnings. In total, we have invested approximately $70 million in the 2019 and '20 financial years in strategic, expansionary and other capital expenditure. Highlights of the execution of our growth strategy last year included a continued improvement and scaling of our Lap Vo Mill in Vietnam, which achieved profitability in its first full year of operation; commissioning the new $10 million bran stabilization plant in Leeton, which is producing valuable rice bran products for the Rice Food and CopRice segments; the launch of Low GI Instant Rice cups in China, focusing on hospital and online channels as an option for diabetics; extension of our healthier rice-based snacks range to rice puffs and rice cracker chips as well as expanding our geographic footprint in snacks to the Middle East and Asia; acquiring and upgrading for a combined $6 million of the FeedRite assets to expand CopRice's pet food production capabilities; establishing production of brown rice chips in Australia, which will allow for greater product innovation and further export opportunities; and commencement of a $4.5 million upgrade to Leeton's microwave rice facilities to reduce operating costs and improve product innovation and quality; we also repurposed the Coleambally Mill into Australia's largest ruminant nutrition plant for less than $3 million; and we activated new supply sources, including in South America. And as we look forward to FY2021, we are continuing to accelerate pursuit of both organic growth opportunities and key initiatives on the merger and acquisition front. Touching on organic growth projects first. Our innovation pipeline remains strong right across the group, with the launch of several initiatives aligned with our growth strategy. These include planned launch of our new infant rice-based product range in Australia and China; continued growth of our expanding rice snack portfolio through broader distribution channels internationally; development of a new market entry strategy for the Philippines and launching our brands in Europe; maintaining SunRice as a leading supplier of rice flour to food manufacturers focused on meeting demand for free-from foods; increased product innovation and export opportunities following the establishment of brown rice chip production in Australia; building CopRice's industry-leading animal nutrition business, with initiatives spanning dairy, sheep, beef, equine and companion animals; and in Riviana Foods, we are pursuing growth of the Always Fresh, Fehlbergs and Roza's Gourmet brands through continual new retail offerings. And when it comes to strategic growth, as this slide shows, we are continuing to leverage our strong balance sheet to pursue and integrate value-accretive merger and acquisition opportunities across the group. We are continuing to invest in upgrades to the FeedRite plant that CopRice acquired in Wangaratta. And while this has been a cost to date, we are expecting this plant to come online later this year and deliver benefits. And we, just this month, announced that we have signed a purchase agreement to acquire the beef and dairy business of Riverbank Stockfeeds, which will further expand CopRice's footprint in the Victorian market and, particularly, the key Gippsland dairy market. Looking ahead there are a number of other acquisitions that we are currently exploring across the group which, if executed, are expected to diversify and increase earnings and are aligned to our 2022 Growth Strategy. The record-low crops of the last 2 years despite record-high prices are a reflection of the lack of water availability and the very high water pricing, making rice growing almost impossible for most growers. While in part caused by drought, we also believe those impacts have been exacerbated by state and national water reform, with the burden being disproportionately borne by annual irrigators in the southern Murray-Darling Basin. As the Chairman has highlighted, we intensified our advocacy with state and federal governments and other key stakeholders around these issues as a group. Fortunately, the recent improvement in seasonal conditions in the southern Murray-Darling Basin gives us all reason for optimism for the coming Riverina rice crop. Having kept premium markets open for Australian rice growers, we were pleased earlier this season to be able to offer fixed price contracting that was taken up very quickly and then, earlier this week, to open up a pool. And the response has been very positive. We've already secured more volume than last year. And with pricing for other annual crops under pressure and SunRice's reputation for always paying, there is positivity towards rice this season. Riverina rice production is at the heart of our business. We've demonstrated resilience through the last 2 years of drought cycle. And if indeed the season does continue to improve, we should see the performance of the Australian Riverina rice business come back and also reap the benefits of those strategic initiatives. While we've been able to manage well despite the last 2 years of low production, the group is undeniably at its strongest when we have increased production in the Riverina. This enables us to efficiently operate our milling, storage and other assets and have supply of high-quality Australian rice, which we can sell as value-added branded products to customers in our most premium markets. However, we still have to deal with the year at hand. The small Riverina crops harvested in 2019 and 2020, which are currently being processed, are expected to lead to a significant under recovery of the Australian Rice Pool segment in financial year '21. It is anticipated that this will lead to a paddy price supplement being required, which would be similar in size to that applied in financial year '17. We will be reliant on our international sourcing and our subsidiaries to once again do the heavy lifting on meeting global demand, overhead recovery and profit delivery for the business. The combined paddy from the last 2 seasons, which we are currently processing, is expected to maintain a base milling program at the Deniliquin and Leeton mills until early next calendar year. As water availability and markets develop between now and the October 2020 planting window, we are hopeful that the size of next year's crop, being C21, will mean that we more than recover the overheads of the pool, and it puts us in a position where we can reengage some of the valued staff that we've had to let go. Away from the Riverina, we continue to monitor a range of factors that have the potential to impact group revenue and margins in the short term, and these include international rice prices; the fluctuating Australian dollar affecting input costs in a number of the group's segments; ongoing deteriorating economic conditions in key Pacific markets; aggressive pricing strategies from competitors; global uncertainty due to the COVID-19 pandemic; and out-of-home dining channels remaining subdued, impacting Riviana's foodservice business. With the ongoing volatility due to COVID-19, we will consider if we are able to provide reliable guidance to the market at the half year in December 2020. Strategic growth opportunities and our international sourcing efforts have largely been able to compensate for the loss of the Australian crop these last 2 years. If the Australian crop returns, we are well placed to accelerate growth, and the recovery of the Riverina would be an important part of our long-term success. I'd like to thank you for your time today. I'll now hand back to the Chairman and look forward to any questions you may have.

Thank you, Rob. Kate, have we received any questions from shareholders in relation to my presentation or Rob's?

Yes, Chairman. Shareholders [ Jeffrey ] and [ Pamela Walker ] ask, where is the plan for expansion of the industry outside of the current areas?

Yes. Look, thanks, [ Jeffrey ] and [ Pamela ]. Currently, we've got an operation up on the Burdekin where we see that the future expectation of climate change in Australia means that we need to have a presence in the tropics, in the north of Australia. So that's working along, and we're finding varieties and working on farmer systems there. But also what we're doing on an international stage is we're -- we've got global supply sources. And Rob just mentioned to you that we've got -- we're looking at South America. So there aren't many places in the world where we're not actually understanding where rice production is able to be done profitably for us. And one of the other things that's important for us is that we specialize very much in our medium-grain rices. So we've got that -- very much focused. So we've got options in Australia and also globally. And we think probably our Riverina operations have probably stabilized. And we hope that we're going to continue to have -- and I believe so, I honestly believe we'll have a strong base in our Riverina going forward. But thank you for that question. Kate, are there any further questions?

Yes. The next question is from shareholder [ Joshua Kersten ]. He asks, could the Chairman elaborate on future mergers and acquisitions? How sustainable is the dividend moving forward?

Thanks very much for that question. I think that will be a great question for our CEO, Rob.

Thank you, Chairman. Whilst, obviously, it's very difficult to comment on very specific merger and acquisition targets, what I can say is that detailed in our strategic plan, which is summarized in my presentation today but also available on our website, you can see that we have a number of priorities. It's -- with regard to CopRice, it's looking to expand geographically and also move into value-added companion animal. With regard to Riviana, it's about category expansion with potentially the opportunity to expand geographically. And then you'd be aware that we've launched a number of value-add rice opportunities in different geographies. And we're always looking for the chance to acquire new sourcing opportunities like we did in Vietnam a year or so ago. And also to create new sources of demand in different markets around the world where our branded presence, our reputation for high-quality rice, will be appreciated by consumers there. With regard to the second part of the question on dividends, obviously, dividends are actually decided by the Board, reflective of the company's performance on a year-by-year basis. But I would highlight that we have a very strong balance sheet, and we have a very good track record of paying a consistent dividend.

Kate, are there any further questions?

Yes, Chairman. The next question is from shareholder Raviana Pty Ltd. They ask, what steps should the company be taking to be able to keep expanding and grow profits with limited Riverina rice, including below 200,000 tonnes if this becomes the normal? What direction should we be taking? And what options should we be looking at?

Look, thanks very much for that question. I think when we reflect on a figure of 200,000 tonnes, I'm quite confident that we can stabilize it at a figure a lot more than that. And I think we'll get a chance in this season to show what we can actually do with adequate access to water. So we're taking steps to make sure, not only in access to water but also how we operate as a company with things like carryover of paddy, to make sure that we keep a figure more significant than that. I think also it's very important that we look at long-term direction as well as not only just short-term direction. So one of the key things you'll see is that we've really been expanding our access internationally. So there aren't many supply chains that we don't understand now. And Rob and his team are really focused on how we can make sure any shortfalls from the Australian crop are covered. And particularly, we have an aspiration to continue to build our sales right around the world. So if there's -- so that's continually being looked at. And then we look at the mix. And hopefully, it's Australian rice. But we're looking at the mix of supply from internationally and also in Australia to make sure that we continue to price that. But that's a very good question. Any further questions, Kate?

Yes, Chairman. The next question is from shareholders [ Graham ] and [ Judith Nichols ]. They ask, at what stage are you going to reduce the dividend and reinvest more money in the company?

I think that's a good question for Rob. I'll hand over to our CEO.

We have a very strong balance sheet, and we've paid a consistent dividend, as I mentioned a moment ago. But that hasn't actually detracted from our investment. So as I mentioned earlier in my presentation, in the last 2 years, we've spent some $70 million in acquisitions and capital expansion. And over the course of the last 8 years, we've spent $234 million in the business. And you've seen our gearing has reduced over that time. And as I mentioned earlier, we also have just reset all of our debt headroom so that we have plenty of opportunity to invest in the business and pay a dividend. So I think that's really a testament to the strength of the balance sheet, the prudence with which we've run the company but also the opportunity that lies ahead that we've continued to pursue despite the downturn in the Australian crop size.

Kate, are there any further questions?

Yes, Chairman. We have also received the following comment from shareholder [ Dellapool Nominees Pty Ltd ]. Critically, the paddy price is set at a price for growers to make a profit. This is not achievable at $475 per tonne due to current high water prices. Make the price a fixed cash price so growers can budget properly property or a minimum price.

Thanks very much for that question. I think one of the most significant points of feedback we've had is we recently, in our first contract that we released about 3 weeks ago, I suppose, now, that contract was filled in 4 days. And so as we outlined, it's -- the amount we've contracted is quite a significant amount when you reference the very small crops we've had. So I think we're very pleased. And I've received a lot of feedback from our growers that, that was on the money. So -- and that that's quite profitable for growers. I suppose when I throw my other occupation, which is as a rice grower, I'm pleased to say that I'm looking forward to growing rice this year. And so I believe that on those figures, it is achievable. And I think another thing that's very interesting is we're -- and you mentioned high water prices, when you look back 3 weeks ago, water pricing was at above $200 per megaliter, which puts the pressure on rice growing. And I've noticed now that, in the last couple of days, there have been transactions, both in the Murrumbidgee and the Murray of around $150 a tonne. So I think it makes it even more achievable. And you'll know we've just released yesterday a pool for the first time in 3 years. So I'm quite excited about the proposition. And I know I've had some very positive comment. And I know I've got neighbors that they're going to grow rice for the first time in 2 years. So we're pretty excited about it. But thank you very much for that comment. Kate, are there any further questions?

Chairman, I confirm we have no further questions.

Well, thank you, everyone. I will now move on to the agenda items. All members have been provided with the annual report, including the financial report, directors' report and independent auditor reports for the year ended 30th of April 2020. You've heard from both Rob and myself. Kate, are there any comments or questions from shareholders on these documents?

Chairman, I confirm that no questions have been received.

Thank you. I'd like to move on to the next item of business. All members have been provided with the remuneration report for the year ended 30th of April 2020. As outlined in the Notice of Annual General Meeting, the remuneration report forms part of the directors' report, and a vote on this resolution is advisory only and will not bind the directors or the company. However, the Board will take the outcome of the vote into consideration when reviewing the remuneration practices and policies of the company. As described in the notice of meeting, a voting exclusion statement applies to this resolution. I'd like to clarify that the intention of this resolution is to endorse the remuneration report for the prior financial year. As you've already heard, financial year 2020 was an extraordinary year. Not only did we face COVID-19 and increasing pressure in global markets but the impact of multiple droughts and minimal allocations. We've had to deal with uncertainty and difficulty across the group, and the results Rob and the team have achieved the business and for our growers and shareholders are creditable in the circumstances. I'd like to reiterate that there wouldn't be many businesses in Australia that could deliver the results we had when facing a loss of 91% of their primary input. As many of you are aware, following Rob's outstanding contribution over the past 8 years, we're seeking to secure him for another 3 years, and his long-term incentive plan will be put to B Class shareholders during the B Class meeting. I'd now like to invite the Chairman of the Remuneration Committee, Independent Director, Ian Glasson, to introduce the remuneration report.

Thank you, Chairman. The outcomes in the remuneration report reflect the strong performance of the management team in delivering against agreed objectives in the face of the very difficult circumstances the group encountered in 2020. Specifically, despite the significant headwinds, the management team demonstrated enormous effort in achieving or exceeding most agreed objectives and targets. This included delivering net profit after-tax, declaring a fully franked dividend in line with the prior year and continuing to execute against the 2022 Growth Strategy. The management team excelled despite these circumstances and, in many cases, exceeded the KPIs we set them in what we knew would already be a very difficult year. So thank you, Chairman. Back to you.

Thank you, Ian. Kate, are there any online comments or questions?

Chairman, we have not received any online comments or questions -- apologies, we have got one. Shareholder Frank Dal Bon has submitted a comment in relation to the resolution as follows. Mr. Chairman, as an A and B Class shareholder, I would like to thank the Board and our CEO, Rob Gordon, for a job well done during these extremely challenging times. It gives me confidence that SunRice will continue to grow into a valuable world food company of which it gives me confidence to continue investing in.

I'd like to -- yes, thanks for those comments. And as we all know, Frank's one of our valued growers in the Riverina. Thanks, Kate. Are there any further questions?

The following question is from shareholders [ Gwyneth and Peter McCallum ]. I believe Rob Gordon to be sufficiently well remunerated. And I would question the issue of B Class shares. We are an Australian company battling with Australian conditions, and I question strongly the need for increase and also for the directors' increases.

Look, thanks very much for that question, [ Gwyneth ] and [ Peter ]. I think one of the key issues for me is, when you look at the challenges for the company, so we've had plant where we've been putting -- an 800,000-tonne plant, our plants in the Riverina, we've been putting about -- as they can handle that capacity. We've been putting back 40,000 tonne. We've had small crops, such incredibly small crops, and we've managed to retain profitability in the company. Also, I think it's really important to note that what we used to do as a company, we required Rob to take his incentive payments or his long-term incentive in cash. And so he now is required to take those as a share payment. So I'll now pass over to the Chair of the Remuneration Committee. Ian, do you have any comments to make?

Yes. Thanks, Laurie, and it's probably a good point raised by [ Gwyneth ] and [ Peter ] because I had a number of discussions with shareholders who have raised this question about the B Class shares. So maybe I could spend a little bit of time clarifying some of the concerns there. Firstly, Rob currently has about 100,000 B Class shares, and that's after 8 years as CEO. As you mentioned, we put in place a long-term incentive program for Rob, which we converted formally just as a cash payment into shares. And that's very much in line with what companies need to do in the ASX. So the CEO is seen to have skin in the game and make sure that his reward is aligned with the interest of shareholders. And I know when I've been talking with A Class shareholders, they've been concerned, well, but that's an alignment just with B. But very importantly, Rob has these rights being held in trust, and they're only awarded to him if he and the group meet the performance objectives we set them. And those performance objectives are very much balanced and very much targeted also to the Riverina as well as to the traditional financial objectives of any ASX company. So it's a very well balanced. And importantly, for the program, if Rob doesn't achieve the outcomes focused as much on Riverina as they are on the B Class objectives, those conditions wouldn't be met, and the shares wouldn't be granted. So I think we're all hoping Rob does achieve those objectives and he's granted the shares because if he does, that means the company is a lot better off. The other point to clarify around that is that these are share rights, and we set the number based on the cash component of Rob's salary at the time of -- the LTI at the time. That number will increase or decrease depending on the share price. So I think we want to see 2 things. We want to see the company successful enough and achieve its objectives, so Rob's awarded those shares. And secondly, we want to see a high share price around those as well. That's what success would look like. Back to you, Laurie.

Yes, thank you. Kate, are there any further questions?

Chairman, I confirm no further questions have been received.

We'll now move on to the vote for this resolution by way of a poll. The ballot proxy and direct votes for this resolution are on the screen. A Class shareholders, if you haven't already done so, please cast your vote on resolution 1 on your electronic voting card. [Voting]

The next 2 items of business relate to the reelection of independent nonexecutive directors. Currently, the terms of all 3 of our independent nonexecutive directors are due to expire at the same time, with all 3 positions up for reelection at the 2021 AGM. In order to align with best practice governance and to ensure continuity, Ian Glasson and Luisa Catanzaro are standing for reelection today for terms of 3 and 2 years, respectively. This will ensure that moving forward, one independent director will stand for reelection at the Annual General Meeting each year as opposed to all 3 standing for reelection once every 3 years. Resolution 2 relates to the reelection of Independent Nonexecutive Director, Ian Glasson. Ian continues to be a sought-after director, and we are privileged to have someone of his experience standing on the SunRice Board. Anyone who meet him quickly understands that his key driver is to see Australian companies, particularly those in the agricultural sector, thrive and compete at the highest levels internationally. Ian's depth of experience and previous leadership roles are an asset to us. And the Board, with Ian abstaining, unreservedly support his reelection. I'd now like to invite Ian to say a few words ahead of the vote.

Thank you, Laurie. Well, it's certainly been a very challenging, although satisfying, time since I joined the SunRice Board in 2016. As a Board, we've worked incredibly hard through the ASX listing and with management to develop and implement a very robust growth strategy, at the same time, dealing with the underlying decline in the Riverina crop. So I look forward to your support today to continue to participate on the Board, hopefully, with a stronger Riverina base and continue to build both Riverina base and our strategic growth. And I would like to thank you, Laurie. As Chairman, you've done an enormous job, and I know you're incredibly committed to the company and spend enormous number of hours, which are not recognized, I think, appropriately for the business. And thank you, too, for the rest of the Board for their hard work and support. So with the support of shareholders, I look forward to serving the company for another term. Thank you, Laurie.

Thank you, Ian. As Chairman, I move the resolution as set out in the Notice of Meeting and on the screen. Kate, are there any online comments or questions?

Thank you, Chairman. Shareholder Robert Glenn has submitted a comment in relation to the resolution as follows. I would like to support Ian Glasson's reelection for another term as director. He has vast commercial experience, particularly in Asia, and most recently served as CEO of Pgg Wrightson in New Zealand. I thank him for his contribution to the company.

Thanks, Robert. Kate, are there any online comments or questions?

Chairman, there are no further comments or questions on this resolution.

Okay. We'll now move on to the vote for this resolution by way of a poll. The valid proxy and direct votes for this resolution are on the screen. A Class shareholders, if you haven't already done so, please cast your vote on resolution 2 of your electronic voting card. [Voting]

The next item of business today relates to the reelection of Independent Nonexecutive Director, Luisa Catanzaro. As you've just heard, this change in term is designed to ensure continuity for our Board going forward. Luisa has an astute ability to look at a set of financials and analyze what needs to be done. Her leadership of the Finance Risk and Audit Committee has been outstanding, and it is a privilege to have her experience and insight and ability on our Board. The Board, with Luisa abstaining, unreservedly support her reelection. I'd now like to invite Luisa to say a few words ahead of the vote.

Thank you, Laurie. Firstly, thank you to the Chair and my fellow directors for all your support over the last 2 years and your endorsement of my reelection. I do not take it for granted. Secondly, to our growers and our shareholders, I would like to repeat what I said 2 years ago: it is an honor to be on the Board of your company. I believe I have the skill set, which complements that of my colleagues, and is appropriate as the Chair of the Audit and Finance Risk Committee. I'm proud of what we have accomplished as a committee and as a Board over the past 2 years, including the successful listing of your company on the Australian Stock Exchange. In addition, I am very proud of all the management and our employees have achieved over the past 2 years despite very difficult and tough trading and external conditions. And I look forward, if reelected, to playing my part in helping to grow your company and helping to deliver on our stated 2022 Growth Strategy. Thank you.

Thank you, Luisa. As Chairman, I move the resolution as set out in the Notice of Meeting and on the screen. Kate, are there any online comments or questions?

Thank you, Chairman. Shareholder Angela Urquhart has submitted a comment in relation to the resolution as follows. I fully support Luisa's reelection to the SunRice Board as an Independent Nonexecutive Director. Luisa's 30 years of professional experience in senior finance executive roles across a range of industries, including in the FMCG and agriculture sectors and with ASX-listed companies, make our own assets to the SunRice Board. The independence, diversity and experience that Luisa provides is crucial to good governance and sound decision-making within the SunRice Board.

Thank you, Kate. Are there any further questions?

Chairman, there are no further questions on this resolution.

We'll now move to a vote on this resolution by way of a poll. The ballot proxy and direct votes for this resolution are onscreen. A Class shareholders, if you haven't already done so, please cast your vote on resolution 3 of your electronic voting card. [Voting]

The final item of business today relates to proposed amendments to the SunRice constitution. This is a special resolution and requires 75% of votes cast to be in favor to proceed. The Board has regular reviews of its performance. And at the last review, one of the strongest recommendations was to reduce the number of Board directors from 11 to 9. Currently, ASX best practice for a medium company such as our own is to have 6 to 8 directors in total. Accordingly, we seek support from A Class shareholders to reduce the size of the Board from 11 to 10 directors at this year's AGM. We intend to seek your support at the '21 AGM for a further reduction from 10 to 9. The Board is strongly of the view that there should always be a majority of grower directors and support this reduction, which would ultimately result in 3 non-grower independent directors, 1 executive director and 5 grower directors by 2023. The proposed amendments to the constitution today also ensure there's grower majority into the future. SunRice has a long history of modifying our Board to ensure that we make decisions in the best interest of our growers and shareholders. By way of example, in 1968, there were 16 on the SunRice Board. This was reduced over the years to 10 prior to our listing on the ASX in 2019 when the number was increased to 11 by adding an additional independent director. At the time, the addition of the independent director was made to reflect the increasing importance of our international operations. We believe in -- we believe a reduction in directors will continue to improve our efficiency as a Board and assure we have a board large enough to have diversity of skills and a grower majority but small enough to be efficient, agile and make fast decisions in the best interest of both A and B Class shareholders and the company. If approved by A Class shareholders today, the resolution will result in 1 RMB director not being appointed to the SunRice Board in 2021, which is when the current term of the 3 RMB directors expires. I've consulted with A Class shareholders regarding this resolution, and I'm pleased to report that there has been strong support expressed, including from the RGA Central Executive, which has passed a unanimous motion in support. The SunRice Board has consulted with the RMB in relation to this proposal, and it is also supportive. As Chairman, I move the resolution as set out in the Notice of Meeting and onscreen. Kate, are there any online comments or questions?

Thank you, Chairman. Shareholder Martin van der Sluys has submitted a comment in relation to this resolution, which is as follows. I support the resolution to reduce the size of the Board. I believe that it will result in more efficient decision-making while maintaining corporate governance. Importantly, it will maintain grower control.

Kate, are there any further questions?

No Chairman, no further comments or questions have been received on this resolution.

We'll now move on to the vote for this resolution by way of a poll. The valid proxy and direct votes for this resolution are on the screen. A Class shareholders, if you haven't already done so, please cast your votes on resolution 4 on your electronic voting card. [Voting]

That concludes today's resolutions. Please note, online voting will close 5 minutes after the AGM ends. We'll shortly move on to general business and then open the B Class meeting. But first, I wish to say a few words about SunRice's 70-year milestone. It's humbling to consider that we're all here today, following the entrepreneurial spirit of a group of Riverina Rice growers, many of whom were returned servicemen who pooled their money to fund a single rice mill in late 1950. From that vision, we have grown to become a truly global food group that we are today. SunRice has consistently demonstrated resilience and innovation across multiple cycles of adversity and opportunity. And throughout it all, the Australian rice industry has remained the backbone of SunRice's heritage. As I noted earlier, we have not only endured but thrived for 70 years, and we will continue to do so. I now speak for all of our directors and our management team when I say, in different circumstances, we would have really liked to have celebrated this milestone with you in person. In time, I hope there will be an opportunity to do so. Until then, a sincere thanks to all of our growers, investors, directors, employees and strategic partners, past and present, for your contribution. It's sincerely appreciated. Just before we close, we will consider any general business. Kate, have we received any questions or comments for general business?

Chairman, we haven't received any additional comments or questions for general business, but I do understand that there has been a technical glitch, and some of the results on the resolutions may not have been displayed to some viewers. So we're just going to ask that you read out the votes received to date on all 4 of the resolutions, please, Chair.

Thank you. Thanks, Kate. Look, sorry about that glitch. I do apologize. These things happen. So I'll run through them. So on the remuneration report, we have the votes received. Votes for, 184; votes against, 38; votes open, 19; and abstain, 0. So that's for resolution 1, and that's the remuneration report. I'll now move to resolution 2, and that's the reelection of Ian Glasson. The votes received for that resolution were 213 in support, 17 against, open were 19 and 0 abstained. So for resolution 3, and that's the reelection of Luisa Catanzaro. We have for, 218 votes; against, 12 votes; 19 votes were open; and 0 abstained. Now moving to the constitutional vote, and that was the changes to constitution and remembering that, that was a -- required a 75% majority: against, 19; and open were 20; and it is 0 abstain. So I hope that makes it clear. I do apologize for that. But we do get some technological glitches. So just before we close, so I'll just give another opportunity if there's any general business because that might have distracted some of our shareholders. So Kate, do we have any more questions or comments?

Thank you, Chairman. No additional comments or questions for general business -- apologies, please bear with me.

So we're just making doubly sure that we don't have any further questions.

Okay. Apologies, Chairman. We have received a comment from a shareholder, Jason Fields.

Thank you.

He asked, why do so many white collar roles need to be based in an expensive office building in Sydney when SunRice's heritage is in the Riverina? Not only could a proportion of the office rental croft in Sydney be saved, but it could bring more money back to the Riverina and use the unutilized offices in Leeton and Deniliquin.

Certainly, a number of them -- a majority of them are in the Riverina. What we attempt to do is to put [ our -- for ] both the cost of office accommodation but also the availability of talent in any particular area. And wherever possible, we do actually employ people in the Riverina. Recently, we've moved some accounts payable receivable functions in the finance area from Melbourne to the Riverina because we can actually get the talent we need in the Riverina. And they sit alongside our other finance people, HR, grower services, some of the engineering staff in our Leeton office. But of course, when it comes to things like international tax experts and perhaps people who are having to visit international markets under non-COVID times, the availability of that talent and the convenience of them being able to travel to international markets to develop them, it's best to have them located in metro cities, close to large international airports. So certainly, a sentiment very close to my heart is that if we can get the talent and we have the office accommodation that's recently been spruced up in Leeton, then we'll make good use of it. And we are very prudent with regard to when we put employees into expensive office space. So hopefully, that explains the situation.

Thanks very much for that, Rob. Kate, are there any further questions?

Thank you, Chair. We have a question here from shareholders [ Gwyneth ] and [ Peter McCallum ] who asked, is it true that rice growers did not support Helen Dalton's bill to increase transparency in the water market? If so, why not?

At SunRice, we always adopt a bipartisan position on politics. So we don't get involved in that. But what I would like to talk about is the advocacy we've been going forward with -- on the water issues. So the access to water for SunRice is absolutely crucial. So I'm really pleased with the advocacy that RGA provide us. But we've also decided that from SunRice's point of view, we can be quite profound about issues around employment, around -- and the employment we are providing in New South Wales and around the world. So we're really focused now on the concerns we've got around the erosion of your general security water entitlements. So we believe it's above and beyond a drying climate. And so we're having deep discussions with both federal and state governments about these issues. So we will continue to be involved in these advocacy issues. And I think one of the biggest mistakes we could make is to say, "Well, we've got a better season now. Let's not worry about it." We will be worrying about it, and we'll continue to advocate for your proper access to water because we believe it provides a very balanced southern-connected irrigation horizon for the whole industry. So we'll continue to do that. Thank you very much for that question. Kate, are there any further questions?

Thank you, Chairman. I confirm that there are no further questions or comments.

That concludes the business of the day, and I will now close the Annual General Meeting, subject to the finalization of the poll. Just a reminder that our AGM voting will close in 5 minutes. The results of the AGM will be announced on the ASX and posted on the SunRice website. The B Class meeting of Ricegrowers Limited will start at 12:20 p.m. on a different web link, as shown on the screen. If you will be joining us for the B Class meeting, please make sure you select the exit meeting button at the top right-hand of your screen first, then go to the link for the B Class meeting and log in. Again, if you need any technical support to access this meeting, call Link Market Services on 1 (800) 237 764. Thanks very much for your attendance today.