Rivco Australia Ltd (RIV) Earnings Call Transcript & Summary

Welcome, everybody. As everybody knows, I do not like reading speeches. I hate that. But to make sure that everything matches and that everybody's got exactly the same information, I'm going to do what I do every year. I'm very happy at the end of it to answer questions and have a little bit more freewheeling, but to make sure that everybody has exactly the same information, I'm going to go through the process that we've done for the last couple of years. It's great to see everybody here, by the way. It's now just after 2:00, and I'd like to welcome everyone to the 7th Annual General Meeting of Duxton Water Limited. This year, we're doing things a little bit differently. We're going to live stream this AGM online. So a quick, warm welcome and hello to everyone who's dialed in to this afternoon's meeting. For those of you who don't know me, my name is Ed Peter, I'm Chairman of Duxton Water Limited. For those who I have met before, which I'm sure many of you sitting around this room, I'm pleased to once again be presenting on behalf of the Board of D2O. Just a quick piece of housekeeping if you haven't already. Can I please ask you to put your mobile phones on silent as I will do right now. Since last year, mine went off in the middle of the meeting, which was very embarrassing. Okay. Now to introduce the Board. I've got Mr. Stephen Duerden here immediately to my left; Dr. Vivienne Brand sitting between the 2 gentlemen; and Mr. Mutton who's going to be live, but by video or by voice conference because he's not able to attend because he's gone through surgery recently, and so is not here in person; Mr. Brendan Ranaldi, who was appointed in April 2022. And I'm sure you've all seen his CV in the -- in our last announcement. We're very pleased to have him on the Board. And he's been a great source of wisdom into the financial markets as everybody else here. Dirk Wiedman, all the way from Switzerland, who should be on the screen, I believe, for anybody who can't see him, but up there and below and he's also online; and Katelyn Adams, who is -- just over here. Hey, Dirk. Wave to everybody. He's actually a puppet. Don't tell anybody. I'm not supposed to say things like that. You can read more about each of our Board members in the company's latest annual report or in the Appendix section of this presentation, which has been released to the ASX this morning. Over to the Duxton Water team, who is responsible for running the day-to-day operations of our business. On the top row, we have our investment team. We've got Lachie and Lachie. Tall Lachie and short Lachie. That's up here. We used to call them old and young, but they're the same age, so we can't tell the difference. Then beyond that, we've got Mercedes, one of our senior analysts; Harry and Caroline. Down below that, we've got our finance team, where we've got Michael, James, Marcus, Tanya. And finally from our business development team, we have Sam Venning. Most deduction people are sort of clustered in here, and we'll leave them in piece for the time being. A big thank you to the Board and the management team for all their efforts over the last 12 months. You've all contributed immensely to the strong result for our shareholders and what has ended up being a truly challenging year for the global equity markets. Now I'd like to confirm that we have a quorum and I'd like to introduce an agenda. I advise that in accordance with the company's constitution, a quorum is present. In accordance with the Corporations Act, I advise that the notice of Annual General Meeting was dispatched to all shareholders on the 14th of April 2023. Accordingly, I declare the meeting properly constituted and open. Today, I'll provide an overview of our performance in 2022. Lachie Beech will provide a portfolio update, and then Lachie Campbell will give us an outlook for financial year 2023. We will then look to cover off on the formal items of business and finish up with any shareholder questions. I'm going to ask you to kindly hold your questions to the relevant section of the meeting. When you arrived at today's meeting, you should have been given either a blue, pink or white attendee card. If you've not received this card, please go to the registration desk outside the meeting room and get one. Only those holding a blue or pink attendee card are entitled to speak or ask questions at today's meeting. And if you received a blue card, this will be used in voting in the polls, which will be opened at the end of the meeting. Where proxy vote has been given to the Chairman without voting instructions, I intend to vote in favor of all resolutions. The Corporations Act and the company's constitution empowers the Chair of the company to call for a poll on resolution put in the general meeting. Today, I call for a poll on each of the resolutions to be considered at this meeting. Now I refer you all to my Chairman's report in the company's annual report for the year ended 31 December '22 and provide the following overview. In summary, we had a great last 12 months in what was quite a challenging year for the stock market. For investors, our business generated a 12% return to shareholders. In the 12 months ended December 31, 2022, not 1922, that would have been a long time ago. This is comprised of a 6% gross dividend yield and 6% capital gain. During this year, we grew our portfolio by $37 million through a combination of debt and capital growth. We increased our NAV by $0.11 to $1.90 per share, and our share price increased $0.09 to $1.62 as at 31st December 2022. We continue to structure our entitlement portfolio to align with climatic cycle. During this year, we added a further 3.6 gigaliters to our portfolio that now sits at 83.6 gigaliter Finally, as at 31st December 2022, we had 54% of our portfolio locked in to long-term leases. We'll provide more detail on our lease portfolio shortly. But what I will say is that we've had a great success in locking in new long-term leases to start 1st July 2023, with some of Australia's most prominent farming businesses. We look forward to working back to within our long-term lease target of having 70% to 80% of our portfolio locked in to longer-term leases. When we started our business in 2016, our aim was to partner with farmers, both large and small, to offer choice and flexibility when it came to their water. I'm proud to say that over the last 6 years, we have helped and supported hundreds of Australian farming businesses with their annual water requirements, and we will continue to do so for many years to come. In 2022, the Murray-Darling Basin experienced the most significant flooding event since 1956. We have continued to support our customers through this difficult year, and our thoughts go out to those who have been impacted by the most recent floods. Whilst some expected water entitlement values to fall on the back of the recent conditions, the opposite has occurred. Water entitlements across the southern Murray-Darling Basin experienced an average price increase of 7% in the 12 months to 31st December 2022. Whilst returns from allocation sales were lower this year, consistent leasing revenue and realized capital gain from rebalancing the permanent entitlement portfolio has enabled the company to continue to deliver balanced return. We believe this continued growth in water entitlement prices to be largely reflective of the long-term demand and supply drivers that underpin Australia's water markets. That is increased plantings of permanent horticulture and reducing supply of water available for agricultural use. Looking back over the last 6 years, we have experienced some extraordinary events, including extreme dry and wet conditions, a global pandemic and Australia's steepest tightening of monetary policy in the last generation. In all of this, water entitlement values are trading at near all-time highs. Our portfolio generated an annualized return of 13%. On a net asset value basis, this includes dividends paid, of course. Since the company's inception in 2016, this is our best performance. While 2022 was a challenging year for global equity markets, we continued to perform well in the market. This is not only due to the defensive nature of our business and balance sheet, but also the fact there wasn't a single asset class out there that's correlated to Australian water entitlements. During 2022, the company delivered on both its dividend targets, paying fully franked dividends of $0.065 per share during the year. This is up from $0.61 fully franked in 2021. In total, the company has paid out $0.342 per share of dividends to shareholders since November 2017, with the last 9 dividends being fully franked and each dividend being larger than last. This consistent growth in dividends has resulted in shareholders benefiting from a 5% annual growth rate in dividends since inception. Since the end of 2022 financial year, in keeping with our previously stated dividend targets, the company has paid its 12th consecutive an increasing dividend of $0.034 per share, of course, fully franked on the 28th of April 2023. While we have indicated the following on our current dividend guidance out to the end of 2024, we will turn to 12 -- so after that period, we're going to return to a 12-month dividend guidance better aligned with standard market practice. That said, we are pleased to reinforce our current dividend guidance for the next 18 months. Interim 2023, we're expecting to pay $0.035 per share; final 2023, $0.036 per share; and interim 2023, $0.037 per share. It's fully expected that all dividend targets will be fully franked. Financial results. We are pleased to report that in full year 2022, Duxton Water reported its highest ever net profit before tax of $14 million. This was 15% higher when compared to last year's net profit before tax of $12.2 million. The flowing effect of this was an increase in the company's earnings per share, which is $0.084 per share in 2022, 18% higher than the previous year. This growth in earnings was reflected -- is a reflection of several factors: a strong leasing revenue stream; an ability to effectively trade permanent water entitlements; and a favorable interest rate swap valuations that reflected the company's successful management of its interest rate swap portfolio. We successfully delivered on both our dividend targets for the year. Dividends paid to shareholders in 2022, as I said earlier, totaled $0.065 per share, fully franked. This would have been a little bit over 6% as gross dividend yield. Another key factor for us last year has been to seek new leasing partnerships to further diversify our lease book. While demand for leases in the second half of 2022 was lower than usual due to the extremely wet conditions and the irrigators favoring the spot market, we have seen a significant increase in demand for leases as we've moved through the beginning of 2023. We are pleased to advise that over the last 6 months, we have successfully executed several new leases with new and existing counterparties. We believe these new leasing partnerships will provide significant upside for both our shareholders and our lessees at the same time. Finally, we look forward to building our leased percentage back to 70% to 80% of our book. The normalizing of weather conditioning, the increasing demand for leases will be the big driving forces behind us once -- as we move through this next year. Financial results. The company's net asset value from a fair value perspective at 31st of December 2022 was $1.90 a share. This is up $0.12 from $1.78 per share when compared to the previous year. The largest driver of NAV was appreciation of the value of our water entitlement portfolio. Throughout 2022, we saw $18 million of capital growth within the portfolio, driven both by high and general security entitlement values. Unfortunately, due to the way that Australian accounting standards work, we are still not able to recognize this uplift in our annual financial statements. Therefore, our statutory net asset value as of 31st of December 2022 is $1.22 a share. This metric excludes our $114 million of unrealized capital gains that are sitting within our portfolio. For this reason, the statutory NAV is not an indication of fair market value of the portfolio. We made the decision early in the current water year to sell down the majority of our unleased allocation into the spot market to support summer irrigation. We did this as we took the view that allocation pricing would be more favorable towards the beginning of the water year due to the wet outlook, which turned out to be very correct. Therefore, we only hold allocations to the value of about $100,000 at the 31st of December 2022. These surplus allocations had -- have either been sold off already or will be carried into the next water year. Financial results. The Board has continued to use sensible debt funding within Duxton Water's balance sheet. At the 31st of December, we had a total gearing of about 30% against our portfolio and an effective interest rate for the full year of 2022 of about 3.04%. Interest rates up until May 2022 were at all-time lows, at which point, we had an all-in interest rate of 1.4%. This meant we were able to borrow well below lease rates and provide enhanced returns to shareholders in the form of higher EPS. And of course, NAV appreciated as water prices increased. While we've been very successful in using hedging instruments, fixed interest rate swaps to fixed interest rates over the last 4 years, we decided to cash in our fixed rate swaps over the last 6 months and we took the view that the longer end of the yield curve would start to come back on us, which it has. By doing so, this not only crystallized the capital gain, but also protected us against any downward movements on our mark-to-market valuations that would have occurred had we not taken these swaps off. In effect, we decided to take our interest saving upfront in cash as opposed to over the duration of the swaps. While the company is happy to continue holding debt within its balance sheet, the Board is aware that we are in a different interest rate environment now than we were compared to 12 months ago. We will continue to manage our gearing and hedging as we move through the economic and climatic cycles. I'm now going to hand over to Lachie Beech, who will provide you with the portfolio update. Over to you, Lachie. This one is short Lachie as opposed to tall Lachie.

Thank you, Ed. Firstly, I'd like to thank everybody for coming today. Your interest and support is much appreciated. For those of you who haven't attended one of our AGMs before or met me, my name is Lachie Beech, and I've been with Duxton Water for the last 4.5 years. Today, I'm going to cover off on the portfolio performance, portfolio diversification and provide you with an update on the lease portfolio. Following this, I'll hand over to my colleague, Lachie Campbell, who will provide an update on the business -- our outlook for the business before handing back to Ed to close the informal part of today's meeting. Permanent entitlement pricing across the southern Murray-Darling basin strengthened during the year, on average, increasing in value by 7%. The major contributor to this was general security entitlement values which appreciated in value, anywhere from 10% to 50% across the most sites. Permanent water pricing has continued to strengthen over the last 12 months with the D2O portfolio increasing in value by $37 million or 11% on during FY 2022. Approximately 50% of this value or $18 million can be attributed to the capital gain, with the balance coming from the deployment of debt in early 2022. This is an exceptional result for the business, given that the southern Murray-Darling Basin experienced the wettest conditions over the -- of the last 60 years. This proves 2 things. One, pricing for the permanent water assets, which comprises of 99% of their asset base is given -- is driven by longer-term demand and supply drivers as opposed to shorter-term climatic influences. And two, a diversification strategy of owning a mixture of water entitlements that differ by class, time and location has continued to work exceptionally well for the company and its shareholders. We will continue to seek well-priced trade opportunities and actively manage the portfolio within the climatic cycle. The Duxton Water portfolio has been assembled in a strategic and targeted manner. The composition allows for a dynamic approach when it comes to delivering on our lease obligations as well as being able to maximize our return from the capital deployed. The mix of general and high security assets means that the portfolio will continue to perform well in both wet and dry years and enables us to support our irrigators right across the basin throughout all seasons. When deploying capital, we look at where future demand is likely to come from and what areas of the river system give us the most flexibility when offering our water supply products to the market. Since inception, Duxton Water has primarily focused in the southern Murray-Darling Basin region and we believe there is still significant value within this region as the market remains somewhat fragmented. As industries shift and irrigators plan for succession, water parcels will continue to come to market. The company is consistently assessing investment opportunities outside of the southern Murray-Darling Basin. Expanding into these areas outside of the southern Murray-Darling Basin will further diversify the portfolio and continue to add value for existing and future shareholders. The lease portfolio. One of our key focuses for 2022 was to continue building out our relationships with irrigators and expand our lease book. Due to the extremely wet conditions, demand for leases in the second half of 2022 was lower than usual as irrigators took advantage of favorable spot market prices. However, due to the drier outlook expected from mid- to low 2023, lease demand has significantly increased. At 31 December '21, lease revenue is $9.2 million. While at 31 December '22, lease revenue was $8.2 million. The company's lease percentage was 78% at 31 December '21 and 54% at 31 December '22. This is due to leases rolling off and, as mentioned, wet conditions making irrigators favor the spot market. We are pleased to announce that we have since locked in a number of new 5- to 10-year leases with new and existing counterparties. Long-term water lease contracts provide irrigators with secure water supply, excellent pricing visibility and all the characteristics of owning the same water entitlements, but at a fraction of the cost of owning them outright. Moving forward, we will continue to engage with existing and new customers in order to lock in further long-term leasing arrangements, which will support both our weighted average lease expiry and our leasing revenue stream as varying leases roll off annually. On the back of the drier outlook and increased demand for long-term leases, we will work back towards our long-term goal of having 70% to 80% of our portfolio leased to Australian farming businesses. I'll now hand over to Lachie Campbell. Thank you.

Thank you, Lachie, and thank you, everybody, for your attendance this afternoon. My name is Lachlan Campbell, and it is a pleasure to once again be presenting at our Annual General Meeting. Since we spoke last year, a lot has changed. We've seen more extreme flooding events, more rainfall, higher interest rates and declining equity markets. And in all of this, as Ed said, we generated a 12% return back to shareholders in the 12 months to 31 December '22. I maintain that we are well placed to continue to meet our investment objectives and deliver stable returns to our shareholders over the course of the climatic cycle. The extreme wet conditions seen over the last 2 to 3 years are reflective of a rare alignment of climatic drivers that has only been seen twice in recorded history causing devastating flooding effects on both occasions with 2022 being one of those years. Fortunately, a couple of months ago, the Bureau of Meteorology announced that the current La Nina and extreme wet conditions were likely to come to an end by mid-2023, a much-needed reprieve for Australian irrigators. That being said, the weather outlook continues to be forecast drier-than-average conditions for the coming months. With the Bureau of Meteorology maintaining their forecast of at least a 50% chance of El Niño occurring and a high likelihood of a positive IOD or negative -- or sorry, Indian Ocean Dipole event forming later this year. Both of these events commonly cause below-average rainfall for the eastern half of Australia. The BOM's next ENSO outlook is due to be released next week. Interestingly, though last Thursday, the National Ocean Atmospheric Administration (sic) [ National Oceanic and Atmospheric Administration ] or NOAA, the USA's equivalent to the BOM, updated their forecast to include a greater than 90% chance of El Niño forming over the coming months. The prospect of a drier outlook has caused a significant increase in demand for leases as irrigators prepare for the next part of the climatic cycle. We continue to talk to irrigators of all sizes about the importance of having a tight and strong water security in place ahead of the upcoming anticipated change in climatic conditions. Since 2008, the Australian government has bought back about 30% of water licenses on issue. Now while these licenses still exist, they're currently in use for environmental projects, where they are expected to remain into perpetuity. While the Australian government hasn't been active in water buybacks since 2011, this all changed when the Labor came to power with the support of The Greens in 2022. Since taking office, Labor has declared their intention to make good on the water recovery targets as outlined in the Murray-Darling Basin plan. In order to do so, they would need to recover approximately 500 gigaliters out of the consumptive pool and allocate these licenses to environmental uses by 30 June 2024. In April 2023 last month, the Labor recommenced voluntary water buybacks for 49 gigaliters across 6 catchments. The objective of this buyback is to fulfill the primary water recovery target of the Murray-Darling Basin plan. The buyback is open and closes tomorrow. For those of you who are unfamiliar with the concept of water buybacks, they are a mechanism by which the government voluntarily purchases water licenses from willing sellers and transfers them to the Commonwealth Environmental Water Holder. By doing so, these licenses are taken out of the consumptive pool of water available for agricultural use. Secondly and finally, there is a secondary water recovery target outlined in the Murray-Darling Basin plant, which relates to the 450 gigaliters of enhanced environmental outcomes. As per the current legislation, this target needs to be achieved through infrastructure upgrades. This is where the government comes out to a property, upgrades all their water infrastructure. And in return, the owner of that farm surrenders these water licenses back to the government as the theory is that they now have a farm that uses less water. The Labor government continues to talk about changing the current legislation to allow this 450 gigaliters to be recovered through water buybacks and we are expecting a decision on this to be made around the middle of this year. To summarize, we maintain that water is well positioned to outperform traditional asset classes. It is a defensive asset that offers low correlation and a fantastic inflation hedge and a reliable dividend. Our focus for the years ahead will be to continue to provide our shareholders with a biannual dividend franked to the greatest extent possible. We will continue to build long-term strategic partnerships with Australian farming businesses. And we will continue to seek opportunities to scale and grow our business that will ultimately lead to stronger market liquidity and greater flexibility within our portfolio. We will continue to monitor investment opportunities outside of the Murray-Darling Basin to add further diversification to our portfolio. This will allow us to access new markets, new customers and ultimately help more Australian farming businesses to unlock their balance sheets and invest into their land and production assets. Finally, we remain confident in our strategy to continue delivering balanced returns to shareholders across all parts of the climatic cycle. I'll now hand back to Ed to close out the informal part of today's meeting. Thank you.

Certainly. Covering that way down. Is it hard being short. Thank you, Lachie 1 and Lachie 2. I'd like to take this opportunity to say thank you to both of you guys. Well done, and thank you, team as a whole. This year has not been without its challenges. I'm proud -- very proud to say we've navigated our way through with a great result being delivered to all shareholders, including myself as a reasonably large shareholder. As a Board, we have great confidence in the outlook of our business. We have a weather forecast that suggests that more normal conditions are not too far away. And we hope that brings much needed relief to Australian farmer -- to the Australian farming community. We have a clear strategy in place to ensure we can continue to meet our business objectives and deliver value for both our customers and for our shareholders. As a management team, we'll continue to do our best to deliver the most prudent, consistent results we can, and we look forward to continuing our strong momentum into 2023 and, hopefully, well beyond. Now, I table the notice of meeting, which was made available to all shareholders on the 14th of April 2023. And if there's no objection, I propose that the notice of meeting be taken as read. Any objections? Okay? I advise that no notice of any other items for today's agenda has been received, and therefore, declare that only matters for our meeting today that can be dealt with are those set out in the notice of meeting. We will open a poll after all items of the notice have been introduced and discussed. I will then ask all shareholders holding a blue card to vote on their attendee cards, which will be collected once the poll closes. I'll conduct the meeting by referring to the resolutions on the PowerPoint presentation behind me. Should any member have a question with regard to any of the motions being considered, there will be an opportunity to ask prior to voting. I now refer to those matters set out in the notice of meeting. I also note that I'm going to read out on in full from my script, and we will then move to the others in short form. Financial reports. The full -- first item of business today is to receive and consider the financial report, directors' report and independent auditor's report for the financial period ended 31st December 2022. I wish to advise that a copy of the company's annual report for the period ended 31st December 2022 was lodged with ASX on 28th of February 2023 and sent to those shareholders who requested a hard copy. A copy of the company's financial year 2022 annual report is also available for download from the company's website. Please note that Mr. Darren Ball from KPMG, the company's auditor, is also present today. If you have any questions from Darren, you're way back there. We're not required to formally adopt these reports. However, I invite any discussion or questions in relation to the company's annual financial statements. Does anybody have any questions? Darren looks like you might be -- please?

Good afternoon. I am Bob Richie, appointed to represent the Australian Shareholders Association. My apology to start with. You have always been available to us to meet ahead of AGMs. And this year due to our own circumstances, we were unable to take up that opportunity. So some of the questions are ones that would have been asked well before the meeting. The first is simple. Do you expect to pay fully franked dividends after financial year '24?

At this point in time, for everything we see, yes.

And your descriptions of both the performance and the management fee arrangements are very clear in the annual report. The formulas are clear, but they lack a little bit of clear information. For example, the best one would be the -- I think you call it the high point, the high water mark. If those sort of information can be just slipped into the report in future, that would make it easy for those retail shareholders who like to do their own analysis and check things out.

Understood and clear, and I think that shouldn't be that difficult.

And the last question concerns -- perhaps, you might want to refer it to the auditor, perhaps not. But on Page 73, there's the audit management report which very clearly and well deals with the, what do you call it, in part, the independent valuer's reports. My reading of it is -- and I'm open to be corrected. My reading of it is that the work by the independent valuer has been assessed by the auditor to make sure that any impairment that might be due was, in fact, implemented that seems to be covered. I don't get the impression that the auditor was also checking that the calculation of the performance fee based on that independent report was, let's say, verified/checked, verified is the wrong word was ordered, of course, they never claim to verify. But checked out by the auditor. If you could give us a bit of an indication about that, it would be very nice.

Darren, can I pass that one to you?

So the 2 parts of the question was around the valuation from an impairment point of view. And as we've articulated, within auditor reports, we include what we consider the key audit matter, which is what we think is the most significant part of the financial statements, and we outline the procedures that we do with respect to that. And in summary, what we do is have our own internal specialists form their own view as to what the valuation is to compare it against what the expert that the business uses. The other part of your question with regard to the performance fee. As that number forms part of the profit and loss within the business, we do, do order procedures around that, including its compliance with the formula within the agreement. So we do audit that number and that was also, we can refer to, the opinion we provide over the remuneration report in the directors' report of the financial statements. Sorry, my voice is just going a little bit. So hopefully, that answers your question.

Thank you. That's very clear and answered the question well.

Thank you. And thank you for the question. Is there any further questions?

Okay. If there's no further discussion on the first item of the business. I'll now move on to the next item. And thank you very much, Darren. I can tell you from having seen Darren and his teamwork, they are very, very, very thorough. And definitely, we enjoy having them in the office. And they -- I think they count the dust on the desks as well, but we're not going to go there. Remuneration report I inform the meeting that the explanatory notes accompanying the notice of meeting and the company's financial statements provides the background and details of the remuneration report. I now move the motion to consider and if thoughts -- and if thought fit to pass with or without amendment, the resolution as shown on the screen as an ordinary resolution. Please note the key management personnel of the company, including directors and the close parties or excluded from voting on this resolution as set out in the notice of meeting, also in accordance with Section 250R(3) of the Corporations Act, this resolution is advisory only and does not bind the Board of Directors of the company. The slide behind me shows the details of votes received by proxy. The directors unanimously recommend that shareholders vote in favor of adopting the remuneration report. I now invite discussion of the motion. Voting on this resolution will be held over until the conclusion of the final item of business to allow the poll to be conducted. Election of director, that's me. So I'm actually going to pass this one over to Stephen or Viv. Viv, you got it.

Thanks, Ed. Good afternoon, everyone, and a warm welcome to those listening online as well. My name is Vivienne Brand, and I joined the Board of Duxton Water in November 2020. I'd like to take a couple of seconds here just to talk about that involvement. When Ed asked me to consider putting myself forward as a member of the Board, I was immediately happy to do so. I have a long-standing passion for sustainable use of water and a lifelong connection with the irrigation community dating back to my childhood, making this a really interesting company that we are part of. Reflecting on my time on the Board to date, the standout element to me is the quality of the people behind this business. They demonstrate a higher level of intellectual rigor, enthusiasm and a highly professional approach to doing good business. This is what I believe will hold Duxton Water in good stead going forward and this is what will contribute greatly to our continued success. So back to the main formal proceedings. Item 3, election of Mr. Edouard Peter. More background can be found in the explanatory notes. I now move the motion to consider and if thought fit to pass, with or without amendment, the resolution as an ordinary resolution that Edouard Peter having retired as a director in accordance with Clause 17.3 of the Constitution and for all other purposes, be reelected as a director of the company. The slide behind me shows the details of votes received by proxy. Each of the directors other than Ed, who abstains, recommend shareholders vote in favor of the resolution. I now invite discussion of that motion.

Thank you. I will preface the question by saying this has no -- question has absolutely no disrespect for the candidate. He's got excellent qualities. However, in the description in the annual report, his directorships, the one other directorship is down for an ASX company and it's one of the Duxton companies, Duxton Farms. My question is, can that list of other directorships be elucidated by dealing with -- by identifying some of the non-ASX-listed companies, which is the usual practice in other companies? I understand that there are some like I've seen one on the website. A local investment fund, I think it is a local fund manager where Ed's a director.

Thank you for the question. Ed, would you like to comment?

Absolutely. There we go. So I sit on the Boards of other Duxton entities as well as Duxton Capital. So the other companies that Duxton manages or is involved with both listed and unlisted, I have tended to have seats on. That said, over the last year, I started giving up chairmanships and changing that around. But all of the businesses I sit in directorships of are either Duxton entities or private entities that I've got with myself and my family. I'm happy to address any specific company that you'd like to ask about, but it's in line with our Duxton portfolio. Does that answer? Or do you -- Okay. Understood.

Thank you very much for your question. Are there any other points of discussion? If not, then voting on this resolution will be held over until the conclusion of the final item of business to allow the poll to be conducted. I'll now invite Ed back to stand to carry on with formal proceedings. Thank you, Ed.

Thanks, Viv. Much appreciated. And I can't -- well, I love all my Board members and think highly of them all. I cannot tell you how nice it is to have Vivienne's great intellect from a farming community on the river as part of our team. Okay. I'd like to go to item #4, the election of Dirk Wiedmann. I now move to -- for the reelection of Mr. Dirk Wiedmann. His background, again, can be found in the explanatory notes. I move the motion and consider -- to consider and, if thought fit, pass with or without amendment the resolution as shown on the screen is an ordinary resolution. Please see the screen for details of the votes received by proxy. Each of these -- each of the directors other than Dirk who abstains recommends shareholders vote in favor of the resolution. I now invite discussion on the motion. Voting on this resolution will be held over to the conclusion of the next item of business to allow a poll to be conducted. Item 5, the approval of 10% placement capacity. I now move item 5, approval of 10% placement capacity be forwarded. Again, the background can be found in explanatory notes as approval of the 10% placement facility, I can speak English, is a special resolution. I note that in order to pass, it requires the approval of 75% of the votes cast by shareholders on this resolution. I now move the motion to consider and, if thought fit, to pass with or without amendment. The resolution is shown on the screen as a special resolution. The screen is showing those votes received by proxy. The directors believe that this resolution is in the best interest of the company and unanimously recommend to shareholders that we vote in favor, in particular, the ability of the company to issue new shares under the 10% placement capacity will enable the company to issue shares in circumstances where it might otherwise be submitted to cost delay and uncertainty of having to go back to the shareholders for approval. The additional flexibility and speed to conduct a capital raising will better position the company to pursue its interest in prevailing market conditions. I should quickly mention here that should this resolution be passed, it doesn't necessarily mean the company will raise capital in line with the resolution. I now invite discussion on the motion. Voting on this resolution will be held over until the conclusion of the final item of business to allow the pole to be conducted. Item 6. The renewal of proportional takeover provisions. I now move to item 6, the renewal of proportional takeover provisions. Again, more background can be found in the explanatory notes. As the approval of the renewal of proportional takeover provisions in the constitution is a special resolution, I note that in order to pass, it requires approval of 75% of the votes cast by shareholders on this resolution. I now move the motion to consider and, if thought fit, to pass, with or without amendment. The resolution is shown on the screen as a special resolution. The screen is showing those votes received by proxy. A proportional takeover bid is a takeover bid in which the offer to each shareholder is only for a proportion of that shareholder's shares. The company's constitution includes provisions that enable the company to refuse to register shares under proportional takeover unless a resolution is passed by shareholders approving the offer. Under the Corporations Act, these provisions expire unless renewed by a special resolution of shareholders. Accordingly, the directors consider that the shareholders should have the opportunity to vote on a renewal of the provisions in the constitution. The explanatory statement outlines potential advantages and disadvantages of the renewal of takeover provisions on the balance. The directors consider that the possible advantages outweigh the possible disadvantages that such a renewal of the proportional takeover provisions are in the best interest of shareholders. The directors, therefore, unanimously recommend that shareholders vote in favor of the resolution. I now invite discussion. Voting on this resolution will take place in the next couple of minutes. Opening of the poll. We will now vote on all resolutions included in the notice of meeting. I appoint Computershare representatives Gemma [indiscernible] to be the returning officer and the pole. Gemma has the power to coop, as her agents, members of her staff, staff of the company. And I'm going to pass over to you, Gemma.

Thank you, Ed. Firstly, if there are -- if there is any person present who believes they are entitled to vote but has not registered to vote, would you please raise your hand for assistance. The persons entitled to vote on this poll are all shareholders, representatives and attorneys of shareholders and proxy holders who hold blue admission cards. On the reverse of your blue admission card is your voting paper and instructions. I will now go through the procedures for filling in the voting papers. Proxy holders have attached to their admission card a summary of proxy votes, which details the voting instructions for business items on the appointment documents in your favor. By completing the voting paper, when instructed to vote in a particular manner, you are deemed to have voted in accordance with those instructions. In respect of any open votes, a proxy holder may be entitled to cast, you need to mark a box beside the resolution to indicate how you wish to cast your open votes. Proxy holders should refer to the summary of proxy votes form attached to your voting paper for further information. Shareholders also need to mark a box beside the resolution to indicate how you wish to cast your votes. Please ensure you print your name where indicated and signed the voting paper. When you have finished filling in your voting paper, please lodge it in a ballot box, which will be circulated to ensure your votes are counted. If you require any assistance, please raise your hand. Would you please indicate by raising your hand if you require more time to complete and lodge your voting paper. The boxes are coming through now. [Voting]

Please indicate if you need more time to vote. Okay. Back to you, Ed.