Summerset Group Holdings Limited (SUM) Earnings Call Transcript & Summary

Ladies and gentlemen, my name is Mark Verbiest, I'm the Chairman of Summerset Group Holdings. Today, we're very pleased to welcome you here on both in person and as online participants through our virtual meeting platform provided by our share registrar, Link Market Services. Welcome to our 2024 Annual Meeting. [Operator Instructions]. Also in attendance are my fellow directors, Fiona Oliver, Dr. Marie Bismark, Venasio-Lorenzo Crawley, Grainne Troute, Dr. Andrew Wong; and Stephen Bull. We have an apology from our Future Director, Andrea Scown, who unfortunately couldn't be here today. And of course, I'm here with our CEO, Scott Scoullar. [Operator Instructions]. Now for the formalities of the meeting. The company secretary has informed me that the notice of meeting has been duly given to shareholders and all other persons entitled to receive it and the meeting has been properly convened. We will turn to the resolutions later in the meeting. I can confirm that the requirement for a quorum for this meeting has been met and to clear the meeting open. The agenda for today's meeting will be as follows. I will give a Chairman's address. You will hear from our CEO, Scott. We'll have an update from each of the Board committee chairs. There will be business and shareholder discussion. Formal business of the meeting, which includes the resolutions will follow and be at the very end. [Operator Instructions]. I can confirm that proxies have been appointed for the purposes of the meeting in respect of approximately 122.6 million shares being roughly 52% of the issued capital. As indicated on the proxy form, I intend to vote all undirected proxies. I have received as Chairman in favor of all resolutions before the meeting other than resolution 3, for which I'm excluded from voting because I'm directly interested in it. I'm holding up to 130,382 undirected proxies for each resolution. The results of the proxies will be displayed following the voting. The financial statements for the 12-month period to 31 December 2023, together with the auditor's report and set out in the company's annual report has been distributed to shareholders, and we will address any questions relating to the financial statements in the general business section of the meeting. It is my pleasure to address you today at my third annual general meeting on Summerset's Board Chair. Over the past year, Summerset has proudly continue to deliver value for our residents and shareholders during one of the most challenging periods we've experienced as a company. We achieved record sales of occupation rights, delivered our forecasted new homes, including our first Australian homes and continue to strengthen our development pipeline. We also continue to experience strong demand for our offering. This is assisted by a growing population aged over 75 along with the desire for improved lifestyle health and a greater sense of community. We are now home to over 8,000 residents. Another key achievement was releasing our first sustainability review for the financial years 2018 to 2022 around the time of last year's AGM. The report documented the first 5 years of our sustainability work and the significant progress we've made to date. That was our first step in to ESG, environmental, social and governance reporting and shows how we are contributing and working to have an impact beyond just the environmental aspects of our operations. We've since released our first sustainability review and climate-related disclosures document, along with our 2023 annual report. We're genuinely proud of our sustainability record and are one of the first companies in the country to release our climate-related disclosures. A copy of this report is available on our website or on the climate-related disclosures registered that is now held by the New Zealand Companies office. I'll now provide a brief progress report in relation to the 2023 financial year. And courses are fully documented in our annual report. Summerset has been participating in growth in the sector with people aged over 75 projected to almost triple in the next 50 years. We currently reinvest significant operational cash flows back into the business to finance our future growth. 2023, we invested $668.5 million in the business, primarily in relation to new and existing retirement villages and care centers. The last year proved the value of our flexible build program and help can support business performance and what is being experienced in the economy. After taking a cautious approach to the first half of the year, deliveries were weighted to the second half of last year in line with generally improving market conditions. While we had budgeted to deliver at the bottom end of our 2023 guidance, we still managed to close out the year having delivered a record 682 new units in New Zealand. Summerset's unit portfolio reached 7,371 units at year-end, and there were only 408 new units and 156 resale units still available for sale and unsold at that time. After purchasing 2 further sites in New Zealand in 2023 at Rolleston and Mosgiel, we will look to further bolster our land bank this year with a number of good opportunities we are looking to progress. Across Australia and New Zealand, we currently have the potential to build a further 6,909 units and care beds, which should roughly put us a double the size we are today. We have the ability to scale up or down as a result of focusing on building our broad-acre villages. Summerset holds the largest retirement village land bank and has been listed retirement build it in New Zealand for several years now. Again, the build rate actually puts us as being one of the more general top residential builders in the country. In terms of Australia, we're very pleased with the progress we're making over there. Our first site to be consented and commenced construction on in Australia Cranbourne North reached a significant milestone where we welcomed our first residents into that village last month. Second stage of the development is progressing well, and we will commence work on the villages main building this year. Enablement works are underway and construction will begin at our second village at Chirnside Park also at Melbourne. We have 2 further sites consented to proceed now and 3 others are progressing well through the plant is and build a strong leg and have a high percentage of our sites now consented to provide our build program with the flexibility we prefer as demand and supply necessitates. Summerset's purpose is bringing the best of life in the business is continuing to offer opportunities to innovate and improve on the experience that we provide our residents in our villages. We continue to invest in technology to enhance lives and experiences of our residents around the country. In our care centers, we've commenced the installation of sealing hoists above beds, giving staff the ability to assist residents with more comfortable and safe access to their beds. The rollout of our residents' experience, experience service platform known as Lumin, is progressing very well and is now installed at 7 of our villages with a further 8 to follow over the next 12 months. Summerset remains one of the few village operators in the country to offer this type of technology to residents. Our emergency preparedness and responsiveness was tested in 2023 with Cyclone Gabrielle. Following the event, we completed a comprehensive review of our actions and preparedness and have made significant changes, including purchasing more generators, installing Starlink wireless broadband and updating our emergency response and business continuity plans based on lessons that we learned from that event. Overall, we were very pleased that our residents and staff were unharmed during the cyclone and that our villages all went through without any serious damage. It was a testament to the village teams in Hawke's Bay, in particular, how they supported and cared for our residents during what was a pretty scary and uncertain time. Our care offering and our continuum of care model is a very important part of why residents choose to deliver at Summerset. As a large company, we can and will continue to provide care. While we continue to be committed to providing the very best possible care for our residents, and we are investing in care, we are rationalizing our offering. And by that, I mean our care centers will be smaller going forward and will be targeted primarily at providing the continuum of care to our village residents. Summerset and many other aged care sector operators continue to be very concerned about government underfunding in the wider aged care sector. The population of New Zealand is over 75. As I mentioned, is set to triple over the next number of years and estimates indicate that another 40,000 aged residential care beds will actually be needed in the sector. Instead of the necessary growth, however, underfunding contributed to 1,000 aged care beds being permanently closed across New Zealand last year. Success of governments have failed to invest in aged care and the sector has become unsustainable. We will continue to support the New Zealand Aged Care Association's work to highlight this underfunding without aged care beds, more elderly New Zealanders will end up in hospital beds, which in turn will impact all New Zealanders who need hospital care. In 2023, the Ministry of Housing and Urban Development commenced a review of the Retirement Villages Act. I can confirm that most of Summerset's practices already aligned with the proposals and the review. For example, we stopped weekly fees for a resident after someone vacates their home. There are no charges for maintenance and repairs, and we've worked very hard to provide our residents with plain English documentation. As signaled in our half year report, the Board undertook a review of our dividend policy to ensure it remained appropriate for the business going forward. The review involved benchmarking against comparable New Zealand and Australian listed companies, testing alternatives and seeking feedback from a range of investors. After completing that, we determined to stay with our current policy subject to adjusting the payout range. During the review, it was also highlighted to us that it was important to investors that our dividend policy remain free from technical adjustments, so it could easily be forecast by the investment community and understood easily by retail investors. With all that in mind, the Board decided to leave the current measure of underlying profit unchanged for now. But we did change the policy range of paying out 30% to 50% of underlying profit to a more flexible and prudent approach that we thought was appropriate for us and moved it to 20% to 30% of underlying profit. That change gives us more scope to invest or reinvest profits when needed or desirable and provide us with the flexibility to pursue significant growth opportunities in New Zealand, Australia. Our focus does remain on participating in the ongoing growth in the sector while maintaining appropriate capital and funding settings. To the extent that our settings allow and assuming excess cash continues to be available, our policy will look to continue distributions to shareholders to maximize returns. And then just quickly looking ahead, the economic outlook remains somewhat uncertain as I'm sure everyone will appreciate. And we continue to see broader tough property market conditions. We remain on track to deliver the 675 to 725 new homes in 2024 that we signaled earlier, including significant deliveries in the second half of this year with, of course, the planned openings of our St. John's Village in the main Village at Boulcott in Lower Hutt. Key to our 2024 financial performance, we'll be executing on new sales at these villages as well as broader sales and resales elsewhere in the second half of this year. We will be providing our next sales update after the end of the first half of this year in July. I'd like to thank my fellow Board members for their work and support over the last year and to thank sincerely the Summerset team for all that they do in supporting our purpose and vision. I'd also like to thank you, our shareholders, for your support and trust in us as we work to continue to grow and build excellent retirement villages. I'll now hand over to Scott to address the meeting.

Thank you, Mark. [Foreign Language]. Good afternoon, everyone. As Mark mentioned, we experienced another very challenging year in 2023. Having to adapt to rapidly increasing inflation recruitment shortages, falling residential property market and the devastating effects of Cyclone Gabrielle. This is on the back of managing impact of COVID- 19 in our villages over the last 3 years as well. However, through all that, our almost 11,000 residents and staff have again shown what a great place Summerset is to live and work. It was a highlight for me personally to see resident satisfaction in our villages at 96% for independent living villages and 95% for our care residents. And at the same time, our staff engagement scores increased to be at 8.1 out of a possible 10. We were named the Best Provider Nationwide and Aged Advisers annual People's Choices Award. And that's pretty special for us and staff and that stat our residents and customers out there voting on who they think the best provider is. So, it was special to win that. We also won gold for the 2024 Readers Digest Quality Service Awards as well. These are all really pleasing endorsements of our work that show what Summerset offers and that it really resonates within. There was also some other highlights in 2023 that I'd just like to touch on. Our construction teams, they were active on 18 sites building. Last year, we opened 4 new villages across the country last year in New Zealand. Separate to that, we opened our first village in Australia as well. And in New Zealand, like outside of opening villages in terms of building the development pipeline. We achieved resource consent for Half Moon Bay Village and our Kelvin Grove in Palmerston on North Village. At the same time, we bought 2 new sites in Rolleston and in Mosgiel. And these are just a few of the highlights and a very pleasing year, but I'll now take the opportunity to just focus on some of the key areas of our business performance during 2023. The first thing I'd like to talk about more specifically is really is growth in our portfolio. I mentioned earlier, the delivery of our first times in our Australia and Village and Cranbourne North. We're just about to embark work on our second village over there. So that's our site and Chirnside Park. So pretty excited about that. In New Zealand, we also completed our Kenepuru and our Hobsonville villages obviously, people likely or known pro pretty well. At the same time, we built and finished our village centers and both Bell Block and Te Awa, handed over our first home Cambridge, Boulcott, Waikanae and Milldale villages. I think there's 4 of them there. That's quite a few like normally we'd open 2 villages a year. So last year was a big year for ageing new villages with twice that mini. And we also commenced construction at a number of new sites as well, including Rangiora and Half Moon Bay, which I mentioned before was consented. Work is also progressing well at our other New Zealand sites under development. So, St. John's village, just to give you an update on that. That's on schedule ready to be handed over later this year. About 60% of that product will be handed over at that point in time. We'll not only hand over independent living homes will also hand over both the care facilities and the village main center. So, like when that village opens, it will open with full sort of continuum of care, it will open with all the recreation and amenity that you normally expect whereas often we're doing brought our villages, you don't get those for a couple of years after the village opens. Our planning and supplier relationships also meant that we've sort of kept a tight lid on construction costs throughout the year. So you'll note in the reports that we have developed a margin of 1.6%, which was pleasingly significantly ahead of the 20% to 25% build rate guidance that we gave around development margin last year. Our design and consenting programs position us well for growth in both New Zealand and Australia as well. So, in New Zealand, we've got 75% of our villages resource consented. So, the pipeline is pretty well resource consented. In Australia, we're somewhere around ordering along 70% now so making good progress in Australia so to get it on that even platform with New Zealand, where there's a lot of strength to the pipeline. We've got a lot of villages that we can build from. Australia also continues to offer good growth opportunities for us. So, Melbourne, in particular, we have Oakleigh South, which is consent approved, and we have Craigieburn, which is also content approved. So we will start moving now more towards a path of building on those 2 sites. And at the same time, we just received approval from local Torquay community to build a village there as well. On our other 2 sites of Mernda and Drysdale, they're progressing pretty well. We're now looking at Queensland is a logical next step for our growth phase in Australia. That move will provide us with more diversity essentially in our portfolio. It also provides us with an ability to manage market conditions across and having less exposure to one particular market in Australia, both from an economic sense, property market sense, labor workforce sense. The second thing I'd just talk about more specifically is life in our villages. For more than 25 years, we've been dedicated to creating retirement villages that go beyond providing homes and evolving to thriving communities. We introduced a suite of holiday homes, offering short-term accommodation for both residents and [ their friends ] and families, so qualifies families come to stay. That was really successful for us last year. So, we're looking to double that this year and introduce another 3 homes across the country as well. We also increased the range of events offered residents to include things like Best Garden competitions, nationwide Summerset Challenge Quiz competitions, and we also kept and play our Summerset Sessions, which is an entertainment series that we run for people living in their villages as well. In the design space, we continue to review how our greenspaces look and feel. And so, things like children's playgrounds, water streets, community parks and things we're looking at right now are indoor golf, driving ranges, external golf driving ranges. We're having a look at a whole lot of that stuff to add increased facilities to villages. We're also investing in our older builders at the same time. So, our care centers and Levin, Trentham and Havelock North are all under way with the refurbishment, which will essentially allow anyone staying in a care bed in those facilities to have full access to on suites. The third thing I was just going to talk about was our ESG reporting. So, some of said the ambition is to develop, build and manage more sustainable retirement villages. We've been really on this study for quite some time now. So, we started that June in 2017. So, we're a good 7 years into that journey. Our comment to sustainability, we take super serious. We're focusing on sustainable practices really right across our business. So, we're looking at things in the construction sector, just as much as we're looking in terms of running a violates on a day-to-day basis. So on a day-to-day basis, we'll be looking at things like water usage, rubbish disposal, but on the construction side of things, we're looking at things like construction waste and looking to defer as much as that we can from landfill. Our sustainability review and climate-related disclosures, full year '23 report, we released in February this year. That's the first time the company has reported its climate-related disclosures. I'm also proud to add that Summerset was the first company to register the mandated climate-related disclosures with the New Zealand company's office as well. In terms of sustainability, we won a 2023 construction sector Beacon Award for really minimization of construction waste. And also, we won, our Think Green program. We had a Think Green program on and underway in our villages, and we won an award with the RVA for Best Operator led initiative on that as well. We're also proud to be again recognized by for Forsyth Barr in their second carbon and ESG ratings surveys that they do for NZX-listed companies. So we were, again, 11th on that list and the top-rated retirement village operator. Now last, but importantly, I'll talk about our people. We obvious people into the business. We've got 3,000 staff who come to work each day. Without great people supporting our residents, we wouldn't come close to achieving our goals to bring the best of life to our residents. Our current staff engagements that I mentioned right at the start of 8.1 out of 10, just context around that. That's the top 25% of all health care providers around the world. So, we're really proud of that achievement. And I think it's a testament really to the environment we foster both in our villages and our head offices and our construction sites as well. One of the many aspects we improved this year for our people was our employee benefits. So, we introduced an improved parental leave offering. We migrated our employee assistance program to TELUS Health and are also preparing to launch our new staff again platform. And we also recognize that the cost of the wing was impacting our teams. So, to assist with that, we bought it a one-off payment of $250 to over 1,600 staff last year. And in addition to that, nearly 2,000 staff also received $1,000 freshers as part of our annual staff share investment plan. To help staff looking to advance their careers, we also established a joint partial Careerforce that supports work-based learning and enables staff to achieve nationally recognized qualifications. What's really pleasing for us, I think, above all of that stuff is that we're seeing these efforts start to pay off in our staff retention numbers. So, by the end of the year, some set staff retention last year had in crystal almost 80% relative to a [indiscernible] benchmark, which is less than 70%. And look, in closing, I'd just like to echo Mark's note of thanks to our investors and our residents and also to our onset team, their families and support and their works for delivering us another successful year. Thank you, and I'll now hand back to Mark.

Thank you, Scott. I'm going to ask each of our Board subcommittee chairs to make some brief comments on their committee work and the work that they've completed during the year. And just to put this in some context, boards these days a lot of key risks and key strategic issues are covered off in these committees as opposed to the full board necessarily. So, they actually have quite well-developed programs. So just so you're aware, Fiona Oliver chairs our Audit Committee. Stephen Bull chairs our construction development and construction committee. He's actually got a proxy to speak for him today, Andrew Wong because Stephen's lost his voice. So has apologies for that, but I think we will hear more naturally from Andrew. Grainne Troute chairs our People and Culture Committee and Marie Bismark, chairs our Clinical Governance Committee, all very important committees for the Board. So, Fiona, I'll ask you if you wouldn't mind to speak first.

Thank you, Mark. Thank you. [Foreign Language]. Good afternoon, all. My name is Fiona Oliver, and I have been Chair of Summerset's Audit and Risk Committee since March last year when I was appointed to the Board. I want to start today by outlining the committee's membership and attendance policy. The other Board members of the committee include our Chair, Mark Verbiest, Grainne Troute, Stephen Bull and Venasio-Lorenzo Crawley. Standing invitations are given to our Chief Executive, Scott, our Chief Financial Officer, Will, our Head of Finance Sara as well as to KPMG, our internal auditors and our external auditors. We also have other Summerset team members attend committee meetings to present their specialist operational items. We encourage broad participation at the Audit and Risk Committee. It's really important to us that we hear directly from the people whose every day job is to manage those items of business that we are discussing. And we think it does make us more effective governors if we do get to know these people better in what they do. We also meet with Sam and [ Shobi ] from EY regularly without management to discuss the performance of the auditor's role. Our work plan. It's been another really busy and interesting year, particularly with regard to the climate-related disclosures regime that's come into force. This is the third time in half an hour, you've heard about this work. So, I do apologize for repeating it. I hope it just underlines the importance that we give to it in terms of ultimately long-term sustainability as a business. And it has been a milestone and a welcome part of the committee's oversight to see the combined sustainability review and climate-related disclosures report come into publication. We actually had established internal specialist capability just to do this work and reporting and to well, our Chief Financial Officer. When you bring these sorts of reports together, it just doesn't come from one part of the business. It's a whole business approach. We need to look right across the business and take all of that work that's going on and what people are doing to improve the management and/or reduction of risk into account when we write the reports. So, it's a big deal. And ultimately, they have to come to the committee and then the Board for full approval. So, no small task. And of course, our work isn't done yet. The work this year will be on including the financial disclosures that the regime requires. But I would like now to acknowledge this work and the significance of it, the significance of the workload that it puts on our management team, but also not just because this is compliance. This is actually, as Scott has referred to what we do every day at Summerset. There is substantive action underway to reduce and manage our environmental, social and governance risk. More generally, in respect of risk management, we continue to oversee the emerging and existing enterprise risks to the business. As you know and as Mark referred to and indeed Scott, so the time for this as well as the external environment we've been working on has been very uncertain and in the near term, will continue to be. It's really critical, therefore, that our committee continues to work and discuss with management what is occurring from a risk perspective, both internally and outside our operating environment to ensure that we are appropriately addressing both short term and long term, the risks that may occur to the business. In terms of financial reporting and internal audit, we have, as required, been overseeing the probity of the financial systems and processes and, of course, compliance with our financial reporting obligations. We've had a very comprehensive internal audit program this year and looking at processes across the business, including culture and conduct, land acquisition and development and Australian procurement processes. And we've also, of course, had a wire alongside us to ensure we comply with our reporting obligations to you, shareholders. This year, the Summerset team put considerable thought into how we could improve certain aspects of our financial disclosures. And the market had indicated it's hard to understand some of it. So, we did attempt to improve our project level recycling disclosures as well as our operating cash flow statement. And I wish to assure you that is only with the intent to attempt to improve the reader's understanding of the disclosures as opposed to anything else underneath. And in my capacity as Chair of Summerset's Audit and Risk Committee, I'm confident in our financial systems and processes and that we meet our financial reporting obligations. And to this end, thank you to the Summerset team for their work, your commitment to transparency and placing our shareholders' interests at the forefront of what you do. Thank you to my committee colleagues for their valuable contributions and to both KPMG and EY. So, I'm very much looking forward to the year ahead, working with the committee, the Board members and the Summerset team being part of what Summerset can achieve. Thank you.

Thanks, Fiona. I'll now ask Andrew Wong, if he could give us an outline of the development and construction committees work during the year.

Thank you, Mark. [Foreign Language] and good afternoon, everybody. My name is Andrew Wong, and I'm a member of the Development and Construction Committee of the Board. It's a pleasure to be with you here today and to be able to provide you with an update on the work of the committee. Development & Construction is a very significant part of the Summerset business, as you all know. The many achievements of the group this year in relation to our development and construction activities have been already outlined by Mark and by Scott, and I won't go into those in a great amount of detail. Suffice it to say, it was very pleasing to see that the business continues to deliver on its targets this year in a very challenging environment. The role of the committee is to provide governance and oversight of the group's activities in this space. And to this end, we wanted to point out some of the key areas of focus for the committee this year. The main area of focus has not changed, but with the constantly changing operating environment, it is important that the committee continues to stay abreast of these changes and how they impact the business. It is important to note that the committee this year continued its approach of visiting our development sites, both in Australia and New Zealand, so we could see firsthand how the business is performing in each of these key areas. Firstly, health and safety. At every committee meeting, management present on our ongoing health and safety performance. This includes measurement of key metrics, trends in this area and initiatives to support our team to maintain our focus on health and safety. This is a critical area for the group and the committee. As mentioned, various site visits were held during the year, and a big part of this was for the committee to see how health and safety is actually being undertaken at each site. Site visits give the committee the opportunity to meet with staff in the field and to get a sense of our culture for safety within the business. Understanding the culture is as important as having the right processes and procedures and it's a critical part of good governance. The second area of focus, making prudent investment decisions. As we all know, the cost of capital and the cost of construction remains at elevated levels. In addition, our customers are under increasing financial pressure. These things continue to sit on the committee's mind as we work with management to interrogate all investment decisions made by the group. The new decision gate process that was introduced last year continues to work well, and we would like to thank management for the level of openness and transparency that they bring to the table when putting forward any investment recommendations. This will continue to position the group well in terms of the financial robustness of the important investment decisions we are making. The committee has also continued visibility and oversight of individual project financial metrics over the life cycle of these projects. A good example of the group's prudent investment decision-making process was the decision to place our [ Parnell ] site into a sale process. While the long-term metrics for [ Parnell ] were positive, the group formed the view that it was important to manage the number of concurrent capital-intensive projects underway in the current economic environment. Third area of focus, oversight of the design, procurement and construction process in Australia. Australia is a different market to New Zealand, and the group must adopt a different procurement and construction model there. As such, it is important that the committee continues to understand these differences and work with management to ensure all risks are well managed. The Australian team present at every committee meeting, providing updates on the contractor market generally, the performance of contractors we have specifically engaged, the performance of individual projects and any future opportunities. These are all discussed at length at the committee meetings, including the group's decision to explore opportunities in Queensland. The wider board traveled to Melbourne and March this year to meet with the senior leadership team there and gain more visibility of the challenges and opportunities in project development in the Australian setting. Members of the committee visited potential opportunities in Queensland over recent months, and the full Board will be meeting there in Queensland in June. The final area of focus is design and ESG. The committee continues to oversee the great work the team are doing in terms of the design thinking of our villages. Learnings from each village are applied on future villages. Ongoing changes to the layout of our care centers and main building as well as the homes within our retirement villages are the result of much research and are focused on both consumer amenity and construction efficiency. At a recent visit to our Auckland development sites, the committees will firsthand how the team are evolving our thinking on design and adapting design to specific environments. Management continued to present on new thinking about materials and construction techniques to continue to improve the sustainability of our villages. The group's ever-increasing focus on ESG is being embedded into the way the team work every day, which is very pleasing to see. As mentioned, the actual achievements of the year have been outlined already. The committee was really pleased to see the business perform so well given the external challenges at play. It was particularly pleasing to see the team continue to focus on the important areas outlined today while managing to deliver the strong results you have seen. Thank you.

Thank you very much, Andrew. I'll ask now Dr. Marie Bismark, to tell us about the work of the Clinical Governance Committee.

Thank you, everyone, for coming along this afternoon. It means a lot to see people here supporting our organization. I'm Professor Marie Bismark, I chair the Clinical Quality Committee. I'd like to acknowledge the contribution of my committee members, Andrew Grainne and Fiona. Thank you for all your work. And often the other Board members come along to our committee meetings as well, which I think reflects the importance of [ colon ] care quality to our organization. The focus this year has really been in 3 areas. So, people, places and programs. People are absolutely at the heart of everything that we do. I want to start by acknowledging our staff and the importance of our staff for the quality of care that we can deliver. And [indiscernible] an organization is caring for our staff, we can't expect our staff to be caring for our residents. So as you already heard from Mark and Scott, we're absolutely delighted to see such high and improving scores around staff engagement and to see our staff retention scores improving as well, really reflecting that we do to make sure that Summerset is a safe and supportive and rewarding place for our staff to work. Our residents are absolutely at the heart of everything we do. It's one thing to sit here and to hear about our 96% resident satisfaction scores. It's something else to actually go into the villages and have a cup of tea with some residents and to hear about the joy that they find living in a Summerset village and to see the companionship and the life within those villages. We often hear people say that they were really only before they moved to a Summerset village that they were anxious or worried about what would happen if things went wrong and the big old family home that they were living for in what a sense of companionship and safety, they've found living within a Summerset village. So, our residents are absolutely at the heart. And I'm so proud of the continuum of care that we offer. I spend a lot of time in Australia where often as couples age and their care needs differ. They might be moved to 2 separate facilities. And I'm so proud that at Summerset, we really prioritize being able to meet the different care needs of couples and to be able to get them together throughout their lives. And then the other group of people or the stakeholders who play a really important role in what we do, that includes People like the Health and Disability Commissioner who our committee will meet with to understand what's happening within the health sector. Fiona spoke about a whole of organization approach, and that's really true in clinical quality as well. You might not necessarily think that property managers or the design and construction team contribute a lot to clinical quality, but actually, they do, and we really saw that through the pandemic, that Summerset moved very quickly to improve air quality within our villages to make sure that we had really high-quality airflow and air filters and that really contributed to [ infection ] rates within our villages. So, we really want to acknowledge how closely all the different parts of the organization work together. Similarly, we know that beautiful grounds and beautiful gardens make a huge difference to people's quality of life and their recovery after owners. So those principles of Bioselect design are really important to us. And when you visit one of our memory care centers, you can see all the thought that has gone into it. For example, the memory care centers are built in the round around a beautiful central courtyard so that if you're not quite sure which room is yours, you can just keep walking in a circle and you'll eventually come back to your room, which is identified with pictures and colors and things to mark that you are, in fact, back at your room. So, a huge amount of thought and care that goes into design that supports people's quality of life. And then finally, we have our clinical strategy, which includes of programs focused on areas like improving nutrition, reducing infections, improving wound care. And here, I think it's really important to talk about this principle of the dignity of risk, which is a term that some of you may have come across. So, when we think about things like reducing falls, if all of our residents were strapped down into a wheelchair all day and couldn't move, we might be able to get our falls down to 0, but that wouldn't be a very good quality of life. So, we think a lot about the dignity of risk and really balancing the importance of safety and high-quality clinical care with also supporting people's independence and ability to live meaningful lives. So those are some of the areas that our committee has been focused on. I want to offer my huge thanks to the leadership team and in particular, to Eleanor and Linda, who does so much to drive this work and really make a difference to residents. We were sitting as a Board last night having dinner and one of the other people having dinner restaurants up and came over to our Board table and she just said, my mother and law of broker hip and she's been moved into a Summerset Village, and I just want to say thank you for the amazing quality of care that you've all been providing. And I think that is really what underpins some of the work that we do.

Thanks, Marie. Grainne?

Thank you, Mark. Good afternoon, everybody. Summerset's People and Culture Board subcommittee assists the Board to optimize executive remuneration policies and practices, company culture, leadership and capability, succession, and that's of both the leadership team and the Board, employee development, inclusion, diversity and engagement. This makes for a comprehensive schedule of work over the course of the year. In 2023, we met formally 5x along with several shorter single-topic meetings. Our agendas over the year that's under discussion considered matters relating to staff engagement and turnover particularly to diversity and inclusion to the leadership talent development and succession throughout and down through the organization. Some particular clinical workforce challenges we were having and strategies to address those staff well-being, learning and development and, of course, remuneration. We've made refinements to ensure our remuneration structure optimally aligns with shareholder interests and company strategic priorities and that particularly relates to executive remuneration. In this regard, we've broadened the comparator group against which we judge our relative total shareholder return for our long-term incentive scheme to now include the entire NZX50. Enhancements were also made to the short-term incentive scheme key performance indicators or KPIs and weightings to tighten their alignment to market practice. Readers of this year's annual report will no doubt have noticed that we've included a separate remuneration report for the first time. The report was introduced in response to the template developed by the NZX for the purpose of making reporting on the often complicated elements of executive and director remuneration, more comprehensive and more transparent. We've already had feedback that the report is useful to readers and we'll continue to focus on refining and enhancing future versions. Finally, I'd like to note that we've been delighted to welcome Summerset's new GM of People and Culture, Chris Lokum to the team. I personally have very much appreciated Chris' expert contribution to the committee deliberations alongside Scott and alongside the other committee members, Mark, Marie and Vena and the entire board. Thank you for your attention this afternoon, [Foreign Language]. Mark?

Thanks, Grainne. I would now like to give shareholders the opportunity to ask questions, whether related to the presentations, the financial statements or the management of the company. [Operator Instructions]. If your question is received late, you can be assured that we will address it post the meeting if we can't get to it in the meeting. You may also ask follow-up questions by submitting further questions online -- will allow a pretty reasonable time for you to ask questions. If we do run short and are unable to answer your questions online today, we will, as I said, and divide answer them post the meeting. If we receive a number of questions related to the same or similar topic we may put these questions together and just provide a single response. If we receive questions related to Village operational managers, we will forward those questions to relevant villages for discussion at the Village GMs. Each village has an AGM every year as opposed to this annual meeting. If that makes sense. So, the floor is yours shareholders. Yes, lady over here.

My name is [ Joy Mcnickel ]. Can you hear me with my mask on?

Yes, we can.

I noted in the annual report, you talked about a smoking ceremony in Australia. What is that and why?

Well, as I understand it, but correct me if I'm wrong. It is a ceremony that the indigenous population of Australia undertaken. It's basically a blessing in of the site and what dwelling that's going to be placed on that site.

Very interesting. And secondly, St. John's, why that name for the Boulcott Village. I presume that's that? Or is it a second village?

Boulcott is a separate village in Lower Hutt.

That's all right. Where is the St. John's?

It's an Auckland.

And I need to tell you that the Hospital Board is sending people home rather than keeping them in the hospital when they have lost memory as a result of hearth, et cetera, and when they're feeling unable to cope because of their complex medical needs. And so, I'm wondering how many residents you have who only have national superannuation to pay for whatever they need. That to me is quite a big point about what the retirement villages, what role they have to pay? Do they get extra government-funded?

Scott, do you want to add to that?

Yes, I can answer that question. What you're describing is a real thing. Like we do get our feedback across the villages, people living independently with us placed in pretty challenging situations at times site away from hospitals, even in the middle of the night. And at times, we're called upon to trying to sort cars into perspective to provide repro services for those people living in their own homes. That's tough for us as well because we're not funded for that. We're not staffed for that. We're actually staffed to run those key facilities. So, we do find ourselves in that situation. We wouldn't understand or know of the wealth of personal circumstances of our individual residents living. So, we wouldn't say nothing about the ability to pay for support services, which I think were maybe talking about. But yes, we experienced the same challenge. Look, and we don't get any funding for that. We don't give any support for that from government.

When I had a friend who was a presbyterian home. She was able to make up some of the benefit superannuation benefit charges. But that was not nearly enough to keep her in that place. Okay, it was very basic. I thought it was discussed. But do you have people who can only who are in your facilities who only have national offer? That's my big question.

As I said, I don't know that for sure. That's personal sort of information for yes. I mean I think you can definitely apply for additional support. But typically, what you find is that might be weeks after they're actually released from home. So, it's that initial period of where they actually have to look after themselves as a challenge for us.

Yes. Your name?

[ Michael Small ]. I'm a resident of Trenton. I can make an observation about the ladies question. I would believe that an air village approximately 50% of the residents are only on the national offer. You may remember the rates rebate that came in a few years ago for Village Residents and Summerset's view was there are there might be 2 or 3 people that might be able to claim. It's well over 50% of the residents, particularly singles, are able to claim.

Thank you for that. The broad point is that there is clear underfunding in the sector and that should be addressed.

[indiscernible]. I've already asked this question of your national offers, and I have yet to receive a reply despite following it up several times. Could you tell me, do Summerset provide AEDs in each village and if not, why not?

We do. Yes.

So every village, even this one?

Yes.

Great, that's into where are they located, I've yet to some.

I think normally in the village center, though, yes.

And possibly other locations.

So just for people who might not know that's automatic external defibrillator that you're referring to. Say somebody has a heart attack within the village so that there's a defibrillator available on site while you're waiting for the ambulance to come.

That is fantastic because there are other providers out there who are refusing to put them in the villages. So I think some are said are leading the way. Thank you.

My name is [ Brian Busby ]. I have 2 questions. You talk about sustainability. This one really is directed at Andrew, I think. Is there any [indiscernible] generation going on in any of the villages?

Yes. And we're looking at installing more retrospectively into the villages as well.

Excellent. So the other question is a little devious really. You talked about site visits for health and safety. Are those signaled in advance? Or do you have a habit of turning up unexpectedly?

Bit of both. Good bit of both.

I'm pleased to hear that. Thank you.

[ Kim Site ] shareholder. At what point during the sales process, either a new unit or a retail unit is that booked?

Sorry, at the point that the person pays the money across moves into the home. Pricing settlement yes.

When we get the money in the…

So we're not incurring it in advance.

The second question is almost all of the other listed operators have run into problems in the last few years with stretch balance sheets, et cetera. What is Summerset doing differently to ensure that they don't end up in that particular point?

Well, I would say the biggest thing is that our broad focus is on broad-acre villages because we can stage those developments and start collecting cash, realizing cash much more quickly. We've got one major capital-intensive project underway that's to be delivered late this year at John's, as you know. And whereas we were going to progress our Parnell Village, that was also a capital-intensive site. We thought that was going to be quite a stretch for us from a financial point of view, notwithstanding the longer-term returns. So, I would say, very active balance sheet and funding management.

And just finally, is Parnell still for sale? Or is it actually sold?

It's still for sale. We're talking with a party or parties at the moment. It's in progress. If there was something to announce, we would say so.

Yes. I'm [ Marilyn Power ]. I've got 3 questions. it's Mark, you see that focusing on having the facilities for resident care only. So, what was the alternative to that have been?

That we would accept applicants from outside of the villages. In other words, people who hadn't necessarily been resident before and are just coming to us and asking if they can take up a key suite, for example, from outside.

That would not make them a resident if they took up a per suite. been for some time because they can use the I'm not saying that the bed looking what you're saying?

Yes. It's effectively that it would provide for you if you're an existing resident is the model that we're talking about.

So you need to have been there for a period of time before they can get the..

Yes. But I mean we have we defined the…

Independently so living in and the village essentially. So we'll cater for anyone with the need who has previously been living in the village. There's no time constraint or some time attached to that, obviously, other than the fact that they have to port home in the village.

Yes, I can see it makes financial sense ticking in. So you're more focused on people in the little units in the villages. And because you're not wanting to be at the…

But a key quality perspective, it's really about ensuring that we can provide that continuum of care so that if people have been living with us as independent residents and their key needs increase, then they will have priority for going into the key unit within our village as opposed to someone who's been living at home, head of fall, they're in a hospital and they need care, and they're wanting to come straight into one of our key facilities. We would be giving priority to someone who had previously been a resident of our village.

I do realize a lot of [indiscernible] that are actually like in the business of property. So I do understand that, but just getting at what it was. Another way, you're saying age 75 plus is growing. Yes, okay. I do say. But I'm noticing just generally that there's a lot of younger people who've seen disabled, like 50 plus. Are you finding more demand from younger people?

No, not so much. And our policies tend to focus on the what's it over 70. It's probably broadly what we look to.

Right, because we don't want people staying in a unit for 30 years, anyway, do we?

Okay. Partly just that they have very different needs. So previously, for example, we've had people in their 50s who've had a hit injury and a motorbike accident come into one of our villages. And we find that even though they are disabled and need care, that actually the key needs of a 50-year-old whether heat injury is very different from the key needs of a 75-year old. And so I think just in terms of focusing on what we're really good at, we're focusing on the older population rather than thinking we can provide key to younger disabled people who might have very different needs.

That's okay I'm not criticizing, just checking whether it's been a demand for younger people. Then a question for Fiona. You're talking about the risks managing the risks. But which risks are top of your mind? And that's my last question.

On top of mind, the rest on an enterprise level or health and safety, clinical care, cybersecurity, financial risk. When I actually look at the audit and risk committee, we oversee all of us -- so we effectively at each what we call business lines. So, we had the operations, which includes our year. We hit our development and construction and we have our corporate office, and each of those have their own risks and in that, that process that's undertaken there then rolls up to what we call an enterprise receive. So, we look at general risk across the entire business.

So it's not just something like crop going down for people are living to [indiscernible] or just the homes are not coming online quickly enough for the notice.

Ultimately, every enterprise risk has within operational risk that will be impacted. So yes, all those things are underneath the hood. And when we question a certain area of what we call an enterprise risk, then sometimes we get down to thinking about that little detail. Specifically in terms of finances, where it ranges really from our reporting obligations and what we're required to do in meeting all of the accounting standards and the right treatment right through to what is the macroeconomic environment looks like in terms of and interest rates and where could they go and how does it affect our debt levels and impact from bank quite wide range.

And you're not planning to come to our shareholders for more funding.

That's not an immediate term, no.

We don't tend to focus on people living too long either, but just to clarify.

We love to celebrate 100th birthday.

Absolutely. es.

[ Susan Sintec ]. Apologies if I missed it in the annual report, but do we pay the living wage to ourself?

Yes. We do, don't we?

No.

Minimum wage.

I didn't quite get the answer.

So we pay above the minimum wage, but not all of our staff receive what's called the living wage, but we do provide additional benefits in addition to paying above the minimum wage, but it's a really good question, and it's something that we do talk about at Board level and really try to make sure that we're paying people fairly for the skills that they have, as you've heard a few times today, the government funding for aged care is really low. We would love it if there was enough support for us to be able to pay staff for living wage. That's a great question.

I presume there are benefits to paying slightly over the loads and staff retention.

Yes, that's right. And I think you really see that with the improvement in our staff retention and the improvement in our staff engagement over recent years, it's been a really big focus for that and some of that is about asking staff what really matters to them and what makes the difference to the quality of life. So, for example, if we have cares who have [ silage ] children having more flexibility around our rosters so that they're able to work for us at times that suit them, making sure that we're providing staff with good quality uniforms. Many of our staff get access to, for example, health insurance. We have some hardship funds if staff are needing to access those. So really trying to be responsive to what it is that matters to our people and being a good employer.

[ Case ] shareholder plus of investments [indiscernible] question has to do with utilities power. Do you have one through the right or the country for all of your villages?

No, I think we've got a couple, don't we?

Do you get any benefits from them, like where was Genesis shares if you're looking to thinking of your residents?

Yes. I think we are. Look, we're using 2 power suppliers at the moment, and predominantly try to get leverage and scale leverage for our residents that we can pass on discounts through via that.

Are they getting cheaper as the PA cheaper than other companies?

We have a commitment to normally be the cheapest in the market, I think, from memory. So, like we do just do benchmarking against other power suppliers and…

So, who are you with?

At the moment, we're by [ Meridian and Pioneer ], I think, the 2.

Yes. So, they're cheaper than, say, Genesis or anyone else?

Because we're buying at that large scale and entity passing it just down to residents.

Right. Okay. The other question is I'm looking at saying to [ anti ] as opposed to the landing, which has got all the bells and whistles. It is set out better for the sun. I get all day so I've got a view at the so I look at is Bosch. The land is got double glazing. [ Anti ] doesn't -- you're thinking of the health of the residents would you putting double glazing which is a very important.

Super good question. We've been in these debates in the organization at times do you double gazing back end across all the existing pillars when they come up for [ residents ], but we made a decision to leave that as an optional extra for residents. So when you're coming in, you can actually have a choice to -- and we will like discount that by 50%. So we'll have half the cost to put it in. But it's that balance between keeping homes affordable so that residents can't come in actually for to live life versus actually double glazing. So yes, there's a choice there. that's a 50% discount of…

Even when I'm looking at that mill in the same thing and the lending $1 million that's got [ vertigo ].

Typically, it might be a different size home or it's sort of hard to tell like exactly say afterwards have a chat afterwards. But normally, you would find that [ Kier ] would be more expensive than I had if that is cheap the same price, you're probably getting pretty odd…

Sounds to me like Scott's negotiable, and you should talk to him afterwards.

The other question was if we went into a cost of $1 million, your deferred fee is 25 as is a 20. So therefore, the state would end up with 750,000. My husband has been eventually is going to need memory care has been off now. Do we paid $1 million? Do I have to turn around and pay like a $500,000 for an apartment in the memory?

If you're living with the [ billet ] you don't have to incur another capital outlay, but you do have to pay a second deferred management fee.

So what would that be because…

Going to be 25% of the price of that memory care home. I can check to you after if you want about that. But just in terms of your comment about 20% versus 25%, I'd say this is one-off mainstream operator who's 20%, but most people would be 25% to 30% across the market.

Yes. I can see you all need to please.

[indiscernible] Just one other question about your continuum of care. So, someone moves from a villa and then they move into the rest home and in the hospital and then they need advanced hospital for memory or whatever. Will that be available all villages?

It's not available or villages. There's a couple of legacy villages that we have where we didn't build care facilities and always build to cut down key facilities. But essentially for all the new villages we're building going forward for the vast majority of villages, you do get full continue of gear.

Right. So can you tell me what Trenton has?

Trenton does [ when we have full ] container of care. We're going through that refurbishment process and treatment…

Go to end of life, if someone needed it if they were…

Yes. No memory care, our debt goes up hospital level here. The vast majority of our facilities got to hospital care, but that would be a very high proportion of people.

So if someone had to move to another village, would they still take priority, as you mentioned earlier. One of your villages with someone [ Livingston ], we've had to move to [ Kinea ], would they take priority over an outsider?

Trying to recall, you definitely have priority with you within the village. I'm pretty sure you have priority even across the villages, but I just need to double check that. For example, where you have a memory care facility in [ Kinea.] And so yes, that's available for people right across those sorts of network. We're just about to open another one also in Boulcott.

There are no more questions, none online. Ladies and gentlemen, we now come to the formal matters requiring resolution, which are outlined in the notice of meeting, and there will be the opportunity if you want to ask questions on each matter being to shareholders. I will call a poll in relation to each of the resolutions. Shareholders join us here in the room today, you should have been given your shareholder voting card. And if you are a shareholder and didn't register on arrival and wish to vote, please make your way to the registration desk outside of the room and the staff from Link will assist. Please mark your voting intention for each resolution and the voting cards will be elected at the appropriate time. Shareholders and attendance online will be able to cast their vote using the electronic voting card received when online registration is validated. To vote online, you will need to get voting card with the online meeting platform. You will then be asked to enter your shareholder or proxy number to validate and you can mark your voting card in the way you wish by clicking 4 against or abstain on the voting card. Once you've made your selection, you can then press submit vote on the bottom of the card to lodge your vote. Voting will remain open for 5 minutes after the conclusion of the meeting, and the results of the vote will be published and announced through the NZX and ASX. If you're participating online in need assistance, please refer to the online portal guide or use the help line that's specified. Each of the resolutions in the Notice of Meeting are to be considered as an ordinary resolution and as such, will be approved if they're passed by a simple majority of the votes cast by you, the shareholders entitled to vote in voting on the resolutions. And the outcome of the proxy votes will be displayed for your information after voting on all resolutions has been completed. Firstly, turning to the matter relating to the company's auditors. The motion concerns the fixing of the auditor's remuneration and seeks shareholder approval that the directors be authorized to fix Ernst & Young's remuneration. Are there any questions? Thank you. If you could now on your voting card, select either for, against or abstain for the first resolution. The next resolution concerns the reelection of Marie as a Director of the company having retired by rotation. The Board recommends Marie to you as a Summerset Director and unanimously support to reelection. Marie, would you like to say a few words?

Thank you, everyone. I feel like most people in this room know me quite well by now. So I'm Marie Bismark. I think serving on the Board since 2013. It's been one of the greatest privileges of my life to be a member of the Summerset Board. When I was first appointed as a Board member, my youngest daughter was only 10 years old, and she spent many, many school holidays being told that visiting Summerset villages was an exciting thing to do with her school holidays and she would sit in the nursing station and place has with the nurses, while I did a tour of the village. And my youngest girl is now about to turn 21. So that tells you how long I've been serving on the Board. I am seeking your support for a further term, which is an unusual thing to do given how long I've been on the board. So, I think it's up to me to convince you that I have an unusual set of skills and experience, which remain valuable for the organization. So just a little bit about my background. I'm an experienced company director. I've been serving on board for around 20 years now. I was previously on the Board of ACC in New Zealand currently as well as some of the native on the Board of the Royal Women's Hospital in Melbourne and on the board of GM HBA. I'm a fellow of the Australian Institute of Company Directors and have recently been appointed as a council member of the Australian Institute of Company Directors. Secondly, I'm a practicing doctor. I'm currently working as a psychiatrist on the Kapiti Coast, providing mental health care. So that gives me a very on-the-ground understanding of the challenges involved in providing care within a resource-constrained sector to people with complex health needs. I've previously worked in hospitals in Australia for around 6 years. And I think with our organization's expansion into Australia, that understanding of the Australian health care sector, has been hopeful, and I hope will continue to be useful for Summerset. Thirdly, I'm a qualified lawyer I'm registered as a barrister and solicitor of the High Court of New Zealand. I'm a professor of law at the University of Melbourne, where I teach patient rights with Professor Ron Petersen, I think that aged care operates within a really complex regulatory and legal context in the understanding of health law and protection of patient rights is really important for our organization. Fourthly, I'm an internationally recognized health research I lead a public health research team at the University of Melbourne focused on the relationship between clinician well-being and patient quality outcomes. And I think within the Board, it's really useful that I can bring a very evident informed approach to ensuring that what we're doing within Summerset in terms of care quality is really at the forefront of international practice. And finally, and most importantly, I'm absolutely passionate about the organization and the work that we do. Professionally, we are seeing a huge increase in the proportion of older people living in the community in New Zealand and Australia. I think in many ways, society is really unprepared for those demographic changes, and it feels enormously important to me to be part of a company that is helping to prepare for those demographic changes and to make sure that older people receive the quality of life and care that they really deserve I've been incredibly proud over the time that I've served on pharmacy to be leading the clinical quality committee and to see the growth and maturity in the way in which we improve our clinical quality and continue to innovate in the best interest of our residents and our staff. And at a very personal level, I've really seen the difference that Summerset makes in people's lives. As I mentioned at the last AGM, my dad was a residential summer seat last year, and it gave me a very personal commitment to this organization and continuing the work that we do. So, thank you for your support over so many years. I would like to offer myself for reelection. I'd be very grateful for your support, and I'm happy to answer any questions. Thank you.

Thanks, Marie. As you can tell from Marie's Resume, she is imminently qualified and we're very lucky to have her. But are there any questions concerning the resolution to reelect Marie? Thank you. If you could now select either for, against or abstain on resolution 2 of the voting card. Turning to resolution. The final resolution is about the increase in the fee pool for directors' fees. The current fee pool is $904,450 plus GST. Actually, what we've paid is 854,220 plus GST. Standard directors' fees haven't increased since 2022 -- people and culture committee has engaged PwC to benchmark the fees paid to Summerset directors against a peer group of NZX listed companies selected on the basis of comparable market capitalization. A copy of that report was available on the website. Based on PwC's report, the Board recommends to shareholders the maximum annual directors' fee pool payable to all directors of Summerset taken together be increased by 15,550 which will bring the total pool to 1, and 10,000 plus GST. This would allow for standard director fees to be increased to the median level identified by PwC in the benchmarking report as set out in the notice of meeting. This includes the payment of new committee member fees to directors other than me who are members of a standing committee. This fee would be paid once for directors, whereas most companies that have committees actually pay a per committee fee. So, in our case, there would just be one fee even if members are sitting on more than one committee. As I described earlier, and you would have heard from each of the committee chairs, the workload of each committee is not insignificant. A lot of the heavy lifting that happens at Board level is done within those committees and indeed on an individual director by director basis. You'll see from our published material committees hold a number of meetings throughout the year have extensive work programs and are particularly designed to deal with key risks and issues from a governance point of view. So, it makes good sense that we spend extra time in those areas. The proposed increase would provide a little bit of headroom of $50,000, and that would be only used in order for the Board to approve special payments to directors for assuming additional responsibilities well above and beyond the normal duties that you one would expect. For example, if we were to receive a takeover proposal. As you can imagine, something like that happened, there would be a substantial amount of work extra work involved. So. I now put the motion -- the proposal that the maximum annual director fee remuneration payable Alecto all directors of Summerset taken together be increased by $105,550 to $1,010,000 per annum plus GST. Any questions?

What other benefits do you compete?

None.

No expense accounts?

Well, we're attending meetings, for example, we'll get our air fares paid in our accommodation. That's it.

Yes. And the other thing, of course, in the current recessionary climate, perhaps giving why to be in for more money?

Well, it hasn't been an increase for 2 years. The last increase is actually going to get us to the median and the rate of inflation has been quite a bit higher. So, we think it's appropriate. We have taken the into consideration the current economic times. But equally, we've got to make sure that we pay people appropriately. Any other questions? All right. If you could please now select either for, against or abstain for resolution 3 on the voting cards. At this time, I'd like to advise the outcome of the proxy votes that were lodged in respect of each of the resolutions. I will not read the proxy results for each resolution, but they're shown on the screen, I think. Everyone can see those. Link Market Services will now move through this room in order to collect your voting cards. For the shareholders online, you can now submit your vote. Voting will be open until 5 minutes after the conclusion of the meeting. Results of the poll will be announced on the NZX and ASX after the conclusion of the meeting. Ladies and gentlemen, I thank you for your attendance at this year's Summerset Annual Meeting, and I now declare the meeting closed. Thank you very much.