Good morning, ladies and gentlemen, and welcome to the 2021 Annual General Meeting of Cochlear Limited. I'm Alison Deans, the Chair of Cochlear, and it's my pleasure to welcome you to today's meeting. There are 76 shareholders online attending our virtual meeting. There being a quorum of members present, I now declare the meeting open. I would like to acknowledge the traditional custodians on the various lands on which we meet today and pay respects to all Aboriginal elders past and present and acknowledge today's Aboriginal communities who are the custodians of these lands.
Due to government restrictions on travel and gathering in response to the COVID-nineteen outbreak in Sydney and the potential health risks to our shareholders of meeting physically during the COVID-nineteen pandemic. The Board determined again to hold this year's Annual General Meeting virtually. We thank you for joining our virtual meeting and appreciate your understanding. We very much look forward to being able to meet with our shareholders in person once again at future meetings. The Notice of Meeting has been sent to all shareholders.
You can also find our notice of meeting together with our annual report and online meeting guide on our website and at the top of the online AGM platform. I will go through the technical and procedural matters shortly. I'm joined in person by our CEO and President, Dick Howatt our Group General Counsel and Company Secretary, Ray Jarman Director Glenn Borum AM, who is standing for reelection today and will take the chair when my reelection is considered and our newly appointed Director, Christine McLaughlin AM, who is standing for election today. I confirm that we are following all safety protocols and are all fully vaccinated. Attending virtually from their homes are our other directors, Yasmin Allen, Sir Michael Daniel, Andy Denver and Professor Bruce Robinson, AC.
Also attending today's meeting is Julian MacPherson from KPMG, our external auditor. Julian will be available to answer questions about the audit of the financial statements later in the meeting. The prepared AGM speeches from the Chair and the CEO have been released to the market. Before moving to these addresses, I'll run through the question and voting procedures for this virtual meeting. As is usual, we're only taking questions from shareholders today or their properly appointed representatives.
Shareholders can submit written questions at any time and do not need to wait until we reach the relevant item of business. We encourage you to submit your questions as soon as possible, noting the resolution it relates to. We will try to address your questions during the discussion on the appropriate item of business and we hope to answer as many questions as we can. To ask a written question, select the messaging tab at the top of the Loomi platform. At the top of that tab, There is a section for you to type your question.
There is a character limit of 1,000 characters for written questions. Once you've finished typing, please hit the arrow symbol to send. Written questions sent via the online meeting platform will be moderated to avoid repetition and if questions are particularly lengthy, we may need to summarize them in the interest of time. Only questions relevant to this meeting will be answered and we will not answer any inappropriate questions. We've also received written questions from shareholders in advance of the meeting which will be addressed during the meeting.
This year, we've also introduced a telephone line for shareholders to ask questions orally. Pre registered shareholders on our telephone line may notify their intent to ask a question by pressing star 1. Written questions that will be read aloud by a Cochlear staff member and all written and oral questions will be addressed by me in the first instance. I may refer a question to another director for response if I consider it appropriate. We will address written questions first followed by any oral questions.
I also advise that there may be a slight delay between the broadcast and what you're watching, So please remember that if you want to ask a question. Shareholders who were not able to participate in this meeting Could vote directly or appoint a proxy before the meeting. I will call for a poll on each item of business set out in the notice of meeting. The directors' voting recommendations are set out in the notice. In order to provide enough time to vote, polling is open now and I encourage shareholders to vote early.
If you are eligible to vote at this meeting, a new voting tab will appear. Selecting this tab will bring up the list of resolutions and present you with the voting options. To cast your vote, simply select one of the options. There is no need to hit a submit or enter button as the vote is automatically recorded. You can change your vote up until the time I declare voting closed, and I will give you a warning before I close voting.
Any properly appointed proxy who has been given discretion on how to vote should vote in the same manner. Any appointed proxy that has been directed to vote in a certain manner and has no discretionary cast votes to cast does not need to vote as these votes will automatically be counted in accordance with those directions. The results of the poll will be released to the ASX after the meeting and we will also post the results on our dedicated AGM webpage on the Cochlear website. If you experience any difficulties with the online platform, the helpline number to contact Computershare is displayed at the top of the information page as well as via the help button located on the login screen. The helpline number is +6 3, 9415-4024.
If we experience significant technical difficulties during the AGM, we'll adjourn the meeting until 3:30 p. M. Sydney time today unless otherwise stated. If this occurs, a market announcement will be made and our website updated. Shareholders, Proxy holders and guests who have registered to watch this meeting will be notified via email.
If you're a shareholder, Please ensure you have registered your email address with Computershare on www.investorcenter.com.au. A representative from Computershare will act as the Returning Officer for the purposes of conducting and determining the results of the poll. I'd now like to move to my address. Ladies and gentlemen, 2021 is an important milestone for Cochlear, marking our 40th anniversary and 4 decades serving as the global leader in implantable hearing solutions. In such an important year, we're pleased to report much improved momentum in our Operations and strengthening of our strategic position.
In an eventful 18 months, Defined in many ways by the impact and disruption caused by COVID, we have been consistently guided by our mission. It is our mission that drives the organization and focuses our strategy. Throughout the disruption, we've maintained our focus on supporting and empowering our existing customers who rely on Cochlear now and over their lifetime. At the same time, we've stepped up our efforts to serve the unmet needs of candidates who could benefit from a cochlear or acoustic implant. We have continued to invest in building awareness and in our work to transform the way people understand and treat hearing loss.
And we have continued to innovate, strengthening our product portfolio. We've also continued to invest in our people. We know that it is the remarkable people and culture of Cochlear that will deliver on the mission over the long term and in turn will deliver long term sustainable value for our shareholders. Cochlear is in a strong financial position. This year, we delivered record sales and the related improvement in profits enabled us to resume paying dividends with the target payout of 70% achieved by the end of the year.
Our long term goal is to deliver value by helping more people to hear. To do this, we need support from many stakeholders And we also need to deliver value to each of those stakeholders. This year, we've sought to clarify our model for long term value creation. This model recognizes the key inputs to our activities and describes the outcomes of our activities on all our key stakeholders: our customers, our people and our shareholders, as well as society more broadly. This model is helping us to understand, build and communicate these relationships more effectively.
By having this broader view of our impact, we will be better aligned to delivering sustainable positive outcomes and sustainable financial returns for shareholders over the long term. There were many highlights this year across these Dimensions of Value Creation. These were outlined in the annual report and I'll touch on just a few. I'll start with our work to create value by building a healthier and more productive society. We do this by building societal awareness of the importance of hearing health and paving the way for improved access to hearing solutions including cochlear and acoustic implants.
Over recent years, we've been focused on driving adoption of cochlear implants in the adults and seniors segment. There are compelling health, economic and societal benefits to cochlear implantation in this segment, but only around 3% Of the adults and seniors who could benefit from an implant currently have 1. To address this low level of penetration, We have a long term goal to contribute to the development of a consistent treatment pathway for adults. This year, there were several important developments towards this goal. The first of these was the publication in March of the World Health Organization's World Report on Hearing.
This landmark publication affirms the effectiveness and cost effectiveness of cochlear implants and highlights the benefits of implants for both children and adults. It also contains a roadmap for governments to follow, which includes adoption of hearing screening, treatment and rehabilitation into primary healthcare systems. It's also significant that the report confirmed that age should not be a barrier to a cochlear implant. It points out that the greatest societal and economic burden from hearing loss comes from age related hearing loss and that this burden is expected to increase with ongoing demographic shifts. This year also saw the publication of cost effectiveness studies highlighting the economic and societal benefits of adult implantation.
These studies play an important role in educating payers and providers on the economic benefits of cochlear implants as well as the quality of life benefits to recipients. There's now a growing body of evidence demonstrating the superior outcomes of cochlear implants over hearing aids for many people with a severe or higher hearing loss. However, it remains challenging for professionals and consumers to quantify the potential improvement in hearing outcomes that can be achieved with a cochlear implant. To build on the existing evidence, we've provided funding for an independent, randomized control trial to investigate this. The trial aims to provide gold standard clinical evidence of the efficacy of cochlear implants relative to hearing aids and we look forward to seeing the evidence generated by this study in the coming years.
Another priority segment is emerging markets where we have a primary focus on children. While this segment has been growing rapidly, penetration rates remain very low, but we know that if children with hearing loss do not receive support early in life. They often experience lower performance at school and ultimately this can impact economic outcomes of their lifetime. Cochlear is focused on building awareness in these markets of the importance of addressing hearing health through public education campaigns and on improving the rates of hearing screening for children. Last month, Cochlear announced a partnership between the Cochlear Foundation and the Malala Fund with the joint aim of removing hearing loss as a barrier to education.
We hope this partnership will raise awareness of the need for governments and societies to prioritize hearing health in children. In doing so, children with hearing loss will be empowered to connect with life's opportunities on a more even playing field. Secondly, we create value by building a strong organization with thriving people. We have an engaged, capable and high performing team. It's a diverse workforce with over 4,000 people across the globe in over 180 countries.
Their knowledge, expertise, passion and focus on excellence is key to achieving future success. We've worked deliberately and actively to build an inclusive organization and a healthy corporate culture. This culture is strongly connected to our mission and puts the customer at the center of everything we do. Last year, we introduced Culture Champions, a group focused on actively shaping our culture through communications, training and education. We also implemented training in inclusive leadership and Unconscious Bias, and we better aligned our remuneration and reward structures to our cultural objectives.
We're pleased to report that our employee engagement remains strong at 80% and with 93% of employees reporting that they feel proud to tell people they work at Cochlear. Achieving gender equality is an important element of our diversity and inclusion strategy. Our goal for gender balance is forty-forty-twenty and we're close to achieving this target amongst our senior leaders with 38% female representation. At Board level, this year, we reached our target of 30% female representation. These goals are being supported by focused activities in the areas of talent acquisition, personal development and succession planning with the aim of strengthening our pipeline of female leaders.
We're always committed to ensuring the safety and well-being of our people and have adapted well to the challenges of the global pandemic. With many of our employees continuing to work remotely, we have increased communications and provided additional resources to support both physical and mental health, with a strong focus on staying connected to colleagues. Finally, I'd like to highlight changes to the Board. Over recent years, we've continued our process of Board renewal, adding new directors with diverse perspectives and relevant experience while maintaining continuity and corporate knowledge. We're pleased with our recent appointments with Christine McLaughlin and Michael Daniel adding valuable new perspectives to our Board discussions.
In July, Abbas Hussain was appointed to a full time executive position in Europe and unfortunately resigned from our Board. We thank him for his contribution to Cochlear and wish him well in his exciting new role. In August of this year, Our long serving Chairman, Rick Holliday Smith, retired from the Board. Rick instilled a relentless focus on our mission and the importance of investment to drive long term sustainable growth. Under his stewardship, the corporate culture thrived and the ongoing investment in innovation and market development has strengthened our market position and our growth outlook.
On behalf of the Board and management of Cochlear, I would like to thank Rick for his great contributions over many years. I believe that we currently have an appropriate mix of skills and experience on the Board, but as we consider ongoing renewal, We'll continue to review the skills needed to best serve Cochlear now and into the future. As incoming Chair, I'd like to take this opportunity to say that it is an honor to be appointed to this position. I look forward to working with the Board and the management team to build on the strength of the business, working towards long term sustainable value and the mission of helping more people to hear. I will now hand over to our CEO and President, Dick Howlett, who will talk to progress on our other value drivers.
Thank you, Alison, and good morning, everyone, and thank you for joining us today. As Alison said, I'll talk about Our value drivers and briefly on our outlook. We do create value for our recipients by innovating to build market Leading portfolio of products and services that supports a lifetime of hearing solutions for recipients. We have achieved this through a multi decade philosophy Investing to grow and an unwavering commitment to innovation. In financial year 'twenty one, we invested $195,000,000 in R and D representing 13% of our sales revenue with 8 new products and services achieving FDA approval over the past 18 months across all parts of our portfolio.
I'll touch on a few of our new products now. Our new implantable product offering, the Cochlear Ossia II System, represents a significant improvement in performance And aesthetics and quality for the life quality of life for bone conduction patients. It has received enthusiastic response from surgeons And patients in the U. S. Since launch.
And we are excited about the potential for the Osia-two system with the opportunity For both increased penetration of bone conduction implants as well as geographic expansion in the coming years. Remote Check is the 1st telehealth patient assessment tool for cochlear implants recipients. It is designed to be convenient, Provide at home testing that allows people with a Cochlear Nucleus 7 or Kanso II sound processor to complete a series of hearing checks from home. Results are then sent remotely to the recipient's clinic for review by their clinician. This technology can provide significant cost savings by offering a convenient time saving option for care that does not require travel to a clinic.
Remote care is a core pillar of our long term innovation strategy With access to care crucial to people who rely on a cochlear implant. We also create value by empowering our customers. We aim to improve the well-being of our recipients by providing them with the latest sound processor technology and easy to use aftercare to support a lifetime of hearing outcomes. We invest in education and clinical support tools to ensure our professional A few of our latest offerings include the Cochlear Nucleus Kanso II Sound Processor, which brings the features of Cochlear Nucleus 7 Sound Processor In an off the ear form factor. Also the Cochlear Baha 6 Max sound processor, which is a broader fitting range, longer and longer battery life it's predecessor and direct streaming from both Android and Apple Devices.
And Cochlear Copilot, a new mobile app designed to improve hearing techniques. It was developed using the latest clinical evidence and proven rehabilitation practices. The iPhone app provides cochlear implant recipients with information, personalized support, practical tips for hearing, listening and communication. It also features interactive skill builders designed to help improve listening and communication skills. And finally, we deliver sustained value to deliver consistent revenue and earnings growth over time.
We balance maximized spending to grow the market with investment to maintain our competitive position. We also ensure we have agile, efficient and environmentally responsible business processes to support our growth ambitions. As the Chair outlined, we delivered record sales revenue and significant improvement in profits in financial year 'twenty one. The balance sheet remains strong with operating cash flow sufficient to fund investing activities and capital expenditure whilst delivering dividends to shareholders. Over the past few years, we have been increasing our focus on environmental sustainability.
We are developing a comprehensive approach To understanding, reporting and reducing our carbon emissions. We have a relatively low level of carbon emissions as a business With around 50% of total reported carbon emissions generated from Scope 3 or indirect emissions. Business travel was our single biggest source of carbon emissions pre COVID. This year, we've introduced our 1st public emissions reduction target. We're committing to a 50% absolute reduction in business Flight related carbon emissions by financial year 'twenty five, equivalent to around 25% in overall reported carbon emissions compared to our financial year 'nineteen baseline.
We will achieve this through a combination of reductions in business flights With a targeted 20% reduction in business flights per full time employee and investment in carbon offsets. We also commit to using 100% renewable energy at all our manufacturing sites by the end of financial year 'twenty 2. During financial year 'twenty two, we will develop a roadmap for setting measurable and practical reduction targets that will get us to net 0 for our global operations well ahead of 2,050. We will aim to complete the work on our carbon emissions reduction roadmap And confirm a net zero target in time for our financial year 'twenty two results announcement. As we look to the future, we remain confident of the opportunity to grow our markets.
There remains a significant unmet and addressable clinical need for cochlear And acoustic implants that is expected to continue to underpin the long term sustainable growth of the business. Our clear growth opportunity and strategy combined with a strong balance sheet mean that we are well placed to create value for our stakeholders now and over the long term. We provided earnings guidance for financial year 'twenty two at the release of our results in August, Outlining how we expect to increase underlying net profit by between 12% 20%, and this continues to be the case. Sales revenue is expected to benefit from market growth with the continuing recovery in surgery rates across many countries more affected by We will continue our investment in market growth activities with the net profit margin expected to remain a little below our long term target of 18%. Developed markets are expected to continue to grow through the year.
While hospitals and clinics have adapted to operating during the pandemic, surgery rates continue to be variable across many countries. The rate of recovery in emerging markets has varied. We expect continued improvement at a slower rate in developed markets With some countries well down on financial year 'nineteen levels and not likely to recover fully in financial year 'twenty two. Our earnings guidance factors in some continuing near term COVID impact and during the Q1, we did experience COVID related surgery delays That will continue into the Q2 in a few markets, including the U. S.
And Australia. Our sales revenue and profit, however, remain in line with our forecasts. A more material disruption from COVID that significantly impact Sales or the supply chain remains a risk factor that does not form part of our guidance. We are confident of the resilience of our hearing implant business Given the improvements in surgery rates experienced across financial year 'twenty one. And finally, the Board is committed to maintaining the dividend policy which targets a 70% payout underlying net profit.
Thank you and I'll now pass back to Alison.
Thank you, Dick. I would now like to Move to consider the formal motions of the meeting. Resolution 1.1 deals with the receipt and consideration of Cochlear's financial report, Director's report and the Auditor's report for the financial year ended 30 June 2021. They're incorporated in the 2021 Annual Report which has been sent or made available to all shareholders and is also available today at the top of the online platform. The motion is now displayed on the screen.
The company has received direct votes and proxy votes in relation to the resolution before the meeting today. I intend to display the number of direct votes and proxy votes held for and against each resolution on the screen before any discussion on each resolution. I intend to vote all available proxies for the Chair's discretion in favor of the motions. I now ask that the direct and proxy votes be displayed on the screen. Thank you.
This item provides shareholders with an opportunity to ask questions on the company's financial and general performance. Shareholders have already raised a number of questions directly with the company. I've answered some of these in my address and others I've grouped and will answer them now. Any shareholder who has any other question or comment on these reports or on the business in general or on the management of the company should raise them now. This is also the appropriate Time to raise any questions you may have of the auditor, including questions on the conduct of the audit and the preparation and conduct content of the audit report.
Any questions will be directed through me in the first instance and I may refer a question to another Director to respond if I consider it appropriate. We'll start by addressing questions that have been submitted by shareholders prior to the meeting. We'll then address questions received during the meeting The first question received prior to the meeting relates to the dividend and at what point Cochlear would be likely to return to paying a fully franked dividend. As stated in our FY 'twenty one results, the franking account was depleted by losses in FY 'twenty. These losses were due to the impact of COVID-nineteen on sales revenue as well as the impact of patent litigation expenses.
Dividends will not be franked in FY 'twenty two and the timing of a return to franking of dividends will depend on the profits we generate in the future and the taxes paid which will rebuild the franking account balance. The next question relates to our Australian business and asks what effect COVID-nineteen has had on Australian earnings. We don't disclose information on earnings in specific countries because this will be valuable information for our competitors. We've described the impact of COVID-nineteen on our business at a broader level in FY 'twenty one results and in our addresses at this meeting and this included information on the variation in the impact of COVID by broader geography. We've also received a question about whether Cochlear Limited makes political donations.
In compliance with our global code of conduct, Cochlear does not make political donations. We do avail ourselves of legitimate and reasonable opportunities to engage with political and government stakeholders and this includes paying fees for attendance at events such as conferences, policy workshops and roundtable discussions. Further information on our public policy engagement is set out in our sustainability report, which is available on our website. We've been asked questions about whether Cochlear would consider introducing a dividend reinvestment plan. I can say at this stage Cochlear does not intend to implement a dividend reinvestment plan.
Our balance sheet is in a strong position and is expected to service our short and medium term capital and cash requirements. As such, there's no need for Cochlear to introduce a dividend reinvestment plan. We've received the following question from Mr. Vikram Malhotra. The company gives equity and options to its directors as an incentive to improve performance and share price.
Why is there no disincentive when the company performance and share price do not perform well. I should first clarify that the company offers equity incentives to its executives which includes Executive Director, CEO and President Dick Howett, but the company does not grant Any equity or offer any incentives to its non executive directors. In terms of our incentives for executives, There are performance thresholds that must be met for any incentive to be granted to our executives. This is true for both our short term incentive plan and our long term incentive plan including cash and equity components. For example, no short term incentives were granted or paid for FY 'twenty and this included both cash incentives and equity rights that were available under the program.
The next question is about litigation and why Cochlear has been a party of patent infringement. Cochlear operates in an industry where intellectual property is a significant source of competitive advantage And this intellectual property is developed through extensive investment in R and D, so protecting and defending IP is important. We have a thorough program for identifying and patenting our inventions and we will vigorously protect our intellectual property. At the same time, we respect the intellectual property rights of others and we have procedures in place to avoid infringing on their rights. From time to time, there will be differences of opinion regarding the validity or application of patents and these may result in litigation.
As a result, patent litigation activity is part of doing business in our industry and the outcomes can be unexpected or uncertain. Understanding the role of IP in our industry, we've invested significantly over many years in maturing our IP strategy and processes and we will continue to do so. We've received a question on the percentage of Cochlear Limited profits that are now comprised of Conduit Foreign Income or CFI. Again, let me start by clarifying that none of Cochlear's Profits are comprised of CFI. Cochlear's CFI balance is comprised of dividends received from foreign wholly owned subsidiaries which are non taxable in Australia.
These are not part of the Cochlear Group profits because they're internal dividends and eliminated from group profits. However, we do have a large accumulated CFI balance and therefore paid our FY 'twenty one dividend as 100% CFI. I'll now check whether we've received any additional questions.
Thank you, Chair. We have received the following question ahead of the meeting from Ms. Patricia Beale, representing the Australian Shareholders Association with around 165,000 shares. Ms. Beale is also a shareholder.
Firstly, congratulations, Alison, on your election as Chair of Cochlear. It is also pleasing that the proportion of females on the Board has Has the board reviewed its effectiveness and identified areas that may need to be strengthened To better respond to the uncertainty that comes with events like the pandemic.
Thank you, Ms. Beale for your question and for your kind, Kind words. As a Board, we conduct reviews every year to assess our effectiveness and we look to identify opportunities for improvement. Specifically in related to our response to COVID, We were pleased with the way the Board and the organization responded. During this period of great uncertainty, We found that it was our mission, our culture and that focus on long term value creation that gave us real clarity and allowed us to respond decisively.
This focus on the long term led to us having 3 clear priorities throughout the pandemic. The first was to ensure the health and safety of our employees. The second was to provide ongoing support to our existing recipients, clinics and health partners. And the third was to make the business secure and sold for the long term value of the company. This led to retaining our valuable workforce and continuing to invest in R and D and market development.
So 18 months on, when we look back sorry, if we look now, we find ourselves in a stronger competitive position. Our product Pipeline is strong, our balance sheet is strong and we've maintained very high levels of employee engagement with our valuable team. So while COVID is still a factor looking forward, we feel on reflection these were the right priorities and would use the same approach again and going forward.
Thank you, Chair. Ms. Patricia Beale has also asked the following: How is remote monitoring progressing? Do you see it occupying a permanent place in alternatives for patients?
Thank you again, Ms. Biel. As Digg covered in his address, remote care is very much a pillar of our long term strategy, giving our recipients more convenient access to the care they need. Remote check is really just the first step And as Dig mentioned, it's a convenient at home testing tool that allows recipients to complete a series of checks from home and it's generated a great deal of interest both from clinicians and recipients and is currently rolling out in many markets. In addition, last week we announced the imminent launch of our next remote care solution which is remote assist which will allow remote programming and processor adjustments.
So we expect remote care to be an increasing part of the services that we deliver to our customers.
Thank you, Chair. The first question via the online platform is from a representative Of Menander Investments Proprietary Limited, who asks, in financial year 'twenty two, are implants and accessory unit sales expected to increase And by how much?
Thank you for the question. We give guidance at a macro level On FY 'twenty two, but we don't, we don't give guidance or expected sales at a breakdown level between different products or between implants and accessories. So next question.
Thank you. Our next question is also from the representative Of Monanda Investments Proprietary Limited and the question is follows. Has Australia's strained relationship With China impacted on Cochlear operations in China or imports of Australian made units?
Yes. Look, Thank you for the question. This is obviously something we're very conscious of. As always, we focus on our mission and the long term view and we know that there are children and adults in Cochlear who would in China who would benefit from a cochlear implant and we're committed to serving them. And so that's why in recent years we've continued to invest in this fast growing and significant market.
While we're focused on the long term opportunity in China, we are conscious of the current political tensions between Australia and China. We haven't had any impact on our business. However, we do continue to monitor the situation closely.
Thank you, Chair. The representative from Menander Investments Proprietary Limited also asked, What is the ForEx rates forecast for the next 1 to 2 years?
Thank you for the question. We don't disclose Forex rates, into the future. Sorry, next question.
Ms. Athena Pizzoli asks, How serious to Cochlear is the latest court action?
Yes. Look, by way of background, so thank you for the question. By way of background, In September, the University of Pittsburgh advised us of a complaint for patent infringement. We believe that none of our products infringe the university's patent and we'll defend the lawsuit. Specifically, we have legacy products and patents that predate the university's patent by several years and these earlier products and patents embody the alleged invention of the university's patent and so accordingly, we believe it's invalid.
Next question.
We've received another question from Ms. Athena Pizzoli. How much will it cost Cochlear to meet such extremely tight emission targets well before Cochlear is required?
Thank you, Ms. Pozzoli. We are, As Dig has said, we're very we're conscious of our responsibility to meet the challenge of climate change. We have a relatively small footprint but we are determined to play our part. So and so that is why we've been strengthening our position in terms of understanding, reducing and reporting the emissions and we're going to continue to do so.
During the year, we will have we have committed to an integrated road map for reducing carbon emissions and that will get us to net 0 well ahead of 2,050. But the but we see that very much as an important part of ensuring the sustainability of Cochlear and meeting the expectations of our various stakeholders.
Thank you, Chair. We've received some questions from Mr. Kar Fat Tan. Many global companies which have in China are now relocating to countries outside China. What is Cochlear's intention for its factory in China?
Does Cochlear plan to relocate its factory in China back to Australia or to other countries? On shoring back to Australia will help the employment And Economy in Australia.
Thank you. As I said, we're committed to the long term in China and we are, building a manufacturing facility there which will come online in the next few years. We currently haven't seen any impact to our operations and our business in China, but we're monitoring it carefully.
Thank you, Chair. We've received a further question from the representative of Monanda Investments Proprietary Limited. Has the China facility been completed and is it now operating?
The China facility is still in being put into operation. It's not yet in production.
Thank you, Chair. That concludes the questions received by the online platform. I can also confirm that there are no shareholders who wish to ask a question on the telephone line.
Okay. Thank you for all those questions. As I mentioned earlier, voting is already open and I will give you a warning before I close voting at the end of the meeting. Please cast your vote now on this item. The next item of business is to vote on the adoption of the remuneration report set out on Pages 56 to 73 of the 2021 Annual Report which is available on our AGM website and at the top of the online platform.
The motion is now displayed on screen. This is a non binding resolution. Voting exclusions apply to this resolution as set out in the notice of meeting. I now ask that the direct and proxy votes be displayed on the screen. I intend to vote all available proxies in favor of the resolution.
Thank you. Are there any shareholder questions in relation to the motion?
Thank you, Chair. I can confirm we have received no questions via the online platform or via the telephone line.
Okay, thank you. Please cast your vote now on this item. The next item of business is the election and reelection of directors. As I mentioned earlier, in accordance with Cochlear's constitution, Our recently appointed Director, Christine McLaughlin, is retiring at this AGM and standing for election And Glenn Borum and myself are retiring at this AGM and standing for reelection. Ladies and gentlemen, as this resolution Is in regard to my reelection, I will now vacate the Chair and ask Glenn Borum to act as Chair for the consideration of this resolution.
Thank you, Alison. Alison Deans has offered herself for reelection. Her background has been set out in the notice of meeting. I will now move the motion for the reelection of Alison Deans. The motion appears on screen.
I'll now ask Alison Back to speak to her reelection.
Thanks, Glen. I think we all believe that Cochlear is a remarkable company. It's fueled by its purpose of helping more people to hear and the unwavering focus on that purpose is supported by a clear strategy, a positive culture and an extraordinary team. The business has achieved so much over the last 40 years, but we still have so much to do. Since I joined Cochlear in 2015, the business has continued to build on its strengths while also developing some new capabilities.
We've continued to strengthen our market position through innovative products that deliver meaningful benefits to our customers both through our devices and increasingly through our connected care capability. We've strengthened our sales and marketing capability with a stronger focus on awareness and access, working towards establishing cochlear implants as a standard of care for severe to profound hearing loss irrespective of age. And we continue to strengthen the capability, Culture and effectiveness of our organization. Ultimately, it will be our people who deliver on our mission. Over the last 6 years, I've been a member of the Audit and Risk Committee and the People and Culture Committee And in recent years, I've served as the Chair of the Technology and Innovation Committee.
In all these committees And in the work of the Board, we focus on stewardship of the company towards achieving its potential, always focused on long term value creation. We challenge and support the executive team in developing and implementing our strategy and ensuring value to all stakeholders. In serving on this Board, I draw on my experience in global strategy consulting as a consultant with McKinsey and my career as an executive in high growth technology companies where I worked with global leaders as well as local entrepreneurs, and my experience as a CEO, advisor, investor and director. I also draw on my current experience as a Director of Innovative High Growth Companies as well as Leading ASX Companies. I currently serve as a Director of Ramsay Healthcare and Deputy, a global SaaS platform.
I'm also on the Investment Committee of Main Sequence Ventures, the Deep Tech Venture Capital Fund of CSIRO. It is a privilege as well as a great responsibility to serve on this Board. I thank you for your support over the last 6 years and seek your support to continue to serve you and Cochlear for another term.
Thanks, Alison. I now ask that the direct and proxy votes be displayed on the screen. The Chair intends to vote all available proxies in favor of the resolution. Are there any shareholder questions on the motion?
Thank you, Chair. I can confirm that we've received no questions via the online platform or via the telephone line.
Thank you. Please cast your vote on this item now. I'll now hand the chair back to Alison.
Thank you, Glenn. Pelamborum AM is the next Director standing for reelection. His background has been set out in the notice of meeting. I now move the motion for the reelection of Glenn Borum AM. The motion appears on screen and I'll now ask Glenn to speak to his reelection.
Thank you, Chair, and good morning to our shareholders who have joined the meeting. I'd like to start by saying it's been an absolute privilege To serve on the Board of Cochlear for almost 7 years and I seek your support to be reelected for a further term. There are two priorities I have in the next few years. Firstly, through my role chairing the Board's People and Culture Committee, Supporting the continued evolution of the culture at Cochlear. It's crucial as we grow the business We continue to build outstanding global leaders and share consistent behaviors that are based on our values.
Secondly, my own executive career was 30 years in information technology. So I hope to assist A number of once in a generation technology projects that Cochlear currently has underway. These will provide the foundations for the success of our business, improving agility and providing an even better customer experience. This is a truly unique company, Australian headquartered but genuinely global, a world leader in its field, A company with the wonderful purpose to help around 100 people here each day. As such, I would welcome your support to continue to work as part of this team.
Thank you.
Thank you, Glen. I now ask that the direct and proxy votes be displayed on the screen And note that I intend to vote all available proxies in favor of the resolution. Thank you. Are there any shareholder questions on the motion?
Thank you, Chair. I can confirm we have received no questions via the online platform or via the telephone line.
Thank you. Please cast your vote now on this item. Christine McLaughlin AM is standing for election as a Director. Her background has been set out in the notice of meeting. I now move the motion for the election of Christine McLaughlin AM.
The motion appears on screen and I'll now ask Christine to speak to her election.
Thank you, Chair. Good afternoon. Good morning, shareholders. It is a privilege to stand for election to the Board of Cochlear following my appointment as a Director in November 2020. And like you, I am also a shareholder.
In joining this Board, I've now experienced firsthand the passion And commitment of all people at Cochlear to our goal of delivering value by helping more people to hear and contributing to building a healthier more productive society. Innovation is a part of the DNA of Cochlear and has underpinned the success of the last 40 years And now being the global leader in implantable hearing solutions. The Cochlear experience comes alive when we have The opportunity as a Board to meet with our empowered recipients whose stories keep us highly motivated to keep making a difference. Our extraordinary people who've continued to adapt and use technology to deliver better outcomes for recipients, led by our leadership team who are committed to delivering the best possible outcome for all of our stakeholders. As a Director of Cochlear, I'm proud of the way that our people in countries around the globe have successfully navigated the unprecedented challenges of the last 18 months of the pandemic.
The consequences of the global health pandemic for our teams, our customers, Our supply chains and our communities has been extensive and the Cochlear team has continued to adapt and innovate. And as a Board, we have seen how much effort the teams have put into that and hopefully next year as Board is open, I will have the privilege of meeting our people offshore in person as much of the past 18 months has been in a virtual format like this. My executive and Board experience has spanned leading ASX listed companies in health, Financial Services, Resources and Infrastructure and more broadly, serving on government boards and in the education sector. I also have deep involvement in the not for profit sector with a particular passion for sport, communities and inclusion. I'm currently Chairman of Suncorp, The Chancellor of the University of Wollongong, Chairman of Destination New South Wales and Chairman of the Minerva Network, a not for profit I co founded to support the professional careers of elite women athletes.
I also serve as the elected Australian Private Sector Representative to the G20 Empower Council, which is focused on women's economic representation globally. I believe that each of these roles adds to my perspective as a director and complements the other skills and experience of your board, my colleagues. As a director elected by you, our shareholders, I'm well aware of the need for us to deliver long term value to our shareholders while balancing the interests of multiple stakeholders. I have extensive experience in the public company environment And have been Chairman of Remuneration, Risk and Audit Committees in heavily regulated environments. And now at Cochlear, I'm a member of the Nomination Committee, People and Culture Committee, the Audit and Risk Committee and the Technology and Innovation Committee.
With Cochlear's mission, core to everything that we do, if reelected, I look forward to serving you on the Board and representing the interests
Thanks, Christine. I now ask that the direct and proxy votes be displayed on the screen And note that I intend to vote all available proxies in favor of the resolution. Are there any shareholder questions on the motion?
Thank you, Chair. I can confirm we have received no questions via the online platform or via the telephone line. Thank
you. Please cast your vote now on this item. We now move to Agenda Item 4, approval of securities to be granted to the CEO and President under the Cochlear Equity Incentive Plan. The motion appears on screen. As noted in the notice of meeting, while the terms of the Cochlear Equity Incentive Plan, the CEIP, mean that an exception to ASX Listing Rule 10.14 applies.
The company is seeking approval for the grant of CEIP Long term incentive awards to the CEO and President as it's the company's practice to do so and it reflects good corporate governance. The maximum value of the LTI offer is 125% of the CEO and President's base salary in FY 'twenty two compared with 100% of base salary in FY 'twenty one. This increase in total remuneration for the CEO and President aligns the remuneration package more closely to market and in a way that ensures our CEO and President is incentivized to drive long term value for shareholders. Voting exclusions apply to this resolution as set out in the notice of meeting. I now ask that the direct and proxy votes be displayed on the screen and note that I intend to vote all available proxies in favor of the resolution.
Are there any shareholder questions on the motion?
Thank you, Chair. We've received the following question from a representative of Monanda Investment Proprietary Limited. Does Cochlear regularly review its remuneration policies?
Thank you for the question. I can confirm that we absolutely do review the remuneration policies regularly. It's one of the core roles of the remuneration, the People and Culture Committee which is chaired by Glen Borrow. The key objectives of our remuneration remain unchanged. We need to attract, retain and motivate the talent we need to drive the business and we need to align our executives with long standing value creation.
But over the He lives with long standing value creation but over the last few years, we make improvements to our remuneration policies and structures over time to best do that. Thank you.
Thank you, Chair. We have received no further questions on the online platform And I can confirm that there are no shareholders who wish to ask a question on the telephone line.
Thank you. Please cast your vote now on this item. Ladies and gentlemen, that concludes our Voting is now closed. As I indicated previously, the poll results will be released to the ASX as soon as they're available And we will also post the results on our dedicated AGM webpage on the Cochlear website. This brings us to the end of the 2021 AGM.
Thank you for your participation today. A webcast of the meeting will be made available on our AGM web Page, I now declare the meeting closed.