Good morning, ladies and gentlemen. I would like to extend a warm welcome to our shareholders here in Sydney, those joining us online, and all my Origin colleagues. My name is Scott Perkins, and I'm the Chair of Origin Energy Limited. It's my privilege to chair this, Origin's 24th annual general meeting. Before I formally declare the meeting open, I would like to acknowledge the Gadigal people of the Eora Nation, the traditional custodians of this land, and pay my respects to their elders, past, present, and future. I would like to provide you with some important information regarding the safety procedures we all need to follow in the unlikely event of an emergency. You will all note the emergency exits in the ballroom. Should there be an emergency situation, you will hear two tones.
The first tone is a pre-alert tone, and you should remain seated and await directions from hotel staff. If you hear a second tone, this will be the evacuation tone, and you should move to the nearest exit. Listen to the instructions from the hotel staff. For any medical matters, please contact any member of the staff. Security will then be notified and provide you with first aid assistance. Thank you. It is now 10:00 A.M., and as there is a quorum of shareholders present, I formally declare the meeting open. I'm pleased to welcome all shareholders and visitors here today. In addition to those present, the holders of approximately 1.05 billion shares, or approximately 61% of the issued capital, are here represented by proxy. I will take the notice convening the meeting as read.
The minutes of the 2022 AGM have been signed, and copies are available on request from the Company Secretary. Please also note that this meeting is being webcast live, and a copy of its recording will also be available on our website after the meeting. Before commencing formal proceedings, I'd like to introduce the Board and Senior Members of the Management Team who are here with us today. From your left are Mr. Mick McCormack, Non-Executive Director, Dr. Nora Scheinkestel, Non-Executive Director, Mr. Greg Lalicker, Non-Executive Director, Ms. Maxine Brenner, Non-Executive Director, Mr. Frank Calabria, CEO and Managing Director, Ms. Helen Hardy, Company Secretary, Ms. Ilana Atlas, Non-Executive Director, Ms. Joan Withers, Non-Executive Director, Mr. Steve Sargent, Non-Executive Director. In the front of the room are other members of Origin's Senior Management Team.
Jon Briskin, Executive General Manager, Retail; Greg Jarvis, Executive General Manager, Energy Supply and Operations; Kate Jordan, our General Counsel and Executive General Manager, Company Secretariat, Risk and Governance; Tony Lucas, Executive General Manager, Future Energy and Technology; James Magill, Executive General Manager, Origin Zero; Sharon Ridgway, Executive General Manager, People and Culture; Samantha Stevens, Executive General Manager, Corporate Affairs; Andrew Thornton, Executive General Manager, Integrated Gas, and last but not least, Lawrie Tremaine, our Chief Financial Officer. Mr. Andrew Price of EY, the company's auditor, is also present. The order of business today will commence with my address, following which Frank will discuss our results and the prospects for the coming year. Finally, we will consider the formal business and resolutions set out in the notice of meeting.
Refreshments will be served at the end of the meeting, which will also give you the opportunity to meet with directors and management. I will now move to my address to today's meeting. This past year has been an important one in Origin's history. We gained momentum in the execution of our strategy and ambition to lead the energy transition. We recorded a strong recovery in operational and financial performance, and these improved fundamentals lead us to expect further growth in the 2024 financial year. Most significantly, in March, we entered into a binding scheme implementation deed in relation to a transaction with a consortium comprising Brookfield Asset Management and MidOcean Energy for the acquisition of Origin by way of a scheme of arrangement. The scheme is conditional upon the satisfaction of certain conditions.
I will provide an update on the progress of the transaction as part of my address today. First, I want to make some general comments on the environment in which Origin is operating. The energy transition is accelerating towards the Australian Government's ambitious target of 82% renewables by 2030. With renewables meeting around 35% of supply today, the scale of the challenge ahead and the investment required is truly enormous. More than 10,000 km of new transmission lines will need to be built. An additional 44 GW of renewables are required, of which 28 GW will come from utility-scale wind and solar, along with 15 GW of new firming capacity, including batteries and gas peakers, to back up renewables supply.
To put this in context, 28 GW of utility-scale renewables is the equivalent of building approximately 110 large energy projects of around 250 MW over the remainder of the decade, or at least one major wind or solar project every month. The ambition is clear, and indeed, the urgency to act to avoid the worst impacts of climate change is well understood. However, what has become increasingly clear this year, with several major renewable and transmission projects delayed, is Australia is not moving fast enough. The pace of the change is highlighting some key challenges and policy gaps. Chief amongst them are challenges in the delivery of transmission infrastructure, which is facing significant delays. Transmission is critical to unlock the renewables necessary to achieve the 2030 targets, and industry and government must work together with communities to address this challenge.
The delay to delivering new cleaner energy infrastructure has other implications. It is causing governments to carefully assess the timing of coal-fired power stations exiting the market, including Origin's Eraring Power Station, as they seek to ensure reliable supply to customers under all scenarios. Inflation, challenges in the construction and contracting market, and supply chain issues are also contributing to the delays and increasing project costs. Costs that will ultimately be borne by customers at a time when they have already been managing higher energy costs amid broader cost of living pressures. We must remain cognizant of the impact of the cost of the transition on customers and ensure a least cost approach where possible. We must improve support and protections for those less able to pay.
We must also be honest about both the costs of the transition and the near-term challenges and impacts we must navigate, not only the benefits society will reap over time. Managing reliability, affordability, and community acceptance are all crucial if we are to maintain the continued public support for the transition. Notwithstanding these near-term challenges, Origin remains firm in our belief that in the long term, the energy transition will be good for customers, good for our business, and good for the planet. Why do we have that view? The energy transition is one of, if not the defining societal and investment thematic of our time. Science, entrepreneurship, financial and human capital, and governments are all focused on achieving a smooth energy transition.
While there are no doubt significant challenges to be navigated in the near term, we remain convinced that over the longer term, we have the skills, the knowledge, and the technology that will address this enormous opportunity. Origin's ambition to lead the energy transition through cleaner energy and customer solutions is consistent with this belief. We have made rapid progress on our priorities this year, and Frank will provide further insights on this and the transition in his detailed operational and financial review. As Chair, I wanted to make some brief remarks on the strength of the recovery in Origin's business, which underscores the value of the company's strategic positioning in the energy transition.
Operational performance across Origin was strong in the 2023 financial year, with higher earnings contributions from Energy Markets, Integrated Gas, and Octopus Energy, the U.K. energy and technology business in which Origin owns a 20% interest. This performance and the progressive strengthening of our balance sheet over recent years enabled us to pay shareholders total dividends of AUD 0.365 per share for the year, representing 66% of the company's adjusted free cash flow. This was 26% higher than the total dividends paid in the prior year. The payout ratio was above the target range, reflecting Origin's earnings outlook and strong balance sheet. Execution of Origin's strategy is gaining momentum, and the strong performance is enabling capital to be reinvested into the business. We are rapidly building our pipeline of renewable and storage projects.
We approved the construction of the first phase of the large-scale battery at Eraring, acquired the Warrane prospective wind development site in the New England Renewable Energy Zone, and continued to progress several renewable and brownfield battery development options across the portfolio. Australia Pacific LNG continues to operate well and deliver strong cash flows to Origin, supporting investment into the energy transition. I would like to highlight the continued success of Octopus Energy, in which Origin holds a 20% interest. Having acquired Bulb Energy and Shell Energy in U.K. in the past year, subject to regulatory approvals, Octopus is now the second-largest energy retailer in the U.K., whilst continuing to grow licensing of Kraken and pursue a range of growth options in the U.K. and other markets. Underpinning Octopus' success is its superior customer experience, low-cost operating model, and market-leading Kraken operating platform.
In addition, the Origin Foundation continued its important work, contributing more than AUD 2.1 million to our community partners to support programs that use education to help break the cycle of disadvantage and empower young Australians to reach their potential. Our people donated more than 7,000 hours of their own time to volunteer with the foundation's community partners. Turning now to the proposed acquisition of Origin. In August 2022, Origin was approached by the consortium with a confidential, non-binding, indicative proposal to acquire all of the shares at Origin at a price of AUD 7.95. The Board rejected this and a subsequent proposal before deciding to engage with the consortium and provide access to due diligence, following a further indicative proposal of AUD 9 per share. That offer was at a premium of almost 55% to Origin's share price on the prior trading day.
The proposal confirmed that Origin represents a highly strategic platform and one ideally positioned to benefit from the energy transition. In March this year, Origin and the consortium entered into the scheme implementation deed on customary terms. Under that deed, the consortium proposed the scheme, and Origin commits to put it to shareholders and for the Origin Board to recommend the same, subject to the independent expert concluding it to be in the best interests of Origin's shareholders and in the absence of a superior proposal. At the time, this represented an implied consideration of AUD 8.91 per Origin share, consisting of Australian dollar consideration of AUD 5.78 per share and U.S. dollar consideration of $2.19 per share. The split of Australian dollars and U.S. dollars has changed since that time, and the exchange rate has also moved.
Updated information on the consideration will be provided to shareholders ahead of a scheme meeting. The Board unanimously recommends that Origin shareholders vote in favor of the scheme in the absence of a superior proposal, subject to an independent expert concluding the scheme is in the best interest of Origin and subject to regulatory approvals and, more importantly, a shareholder vote. At the time of signing the Scheme Implementation Deed, the Board had visibility of various factors shaping the outlook for the business, and this was taken into account when deciding whether to enter into this agreement on the terms on which it did. The Board was also cognizant of the fact that the independent expert would take into account the current performance and prospects for Origin, informing its opinion as to whether the scheme is in the best interest of Origin shareholders.
We note that Origin's share price closed trading yesterday at AUD 9.30 per share, which is AUD 0.39 above the implied consideration of AUD 8.91 per share, announced at the time of the signing of the scheme implementation deed. Ultimately, the scheme requires shareholder approval and to proceed, and the Board will continue to work to facilitate that. Shareholders should note that the trading price of Origin shares is impacted by the proposed scheme and that the share price may not necessarily trade at these levels in the absence of a proposed scheme. If the scheme does not proceed, the share price may fall. Following the Australian Competition and Consumer Commission's granting of the authorization for the proposed acquisition on the 10th of October, we have been working to finalize the preparation of the scheme booklet, including the independent expert's report.
Later this afternoon, a hearing is scheduled at the Supreme Court of New South Wales, in which Origin will seek approval to convene a scheme meeting and issue the scheme booklet to shareholders. If the Court approves, we anticipate the scheme booklet and notice of scheme meeting will be lodged with the ASX within the next 24 hours, following registration with the Australian Securities and Investments Commission. Again, if the Court approves, by early next week, we expect to send all Origin shareholders the scheme booklet, which contains all the information you need to make an informed decision on how to vote in respect to the scheme, including the independent expert's report. The booklet will also include a detailed timeline with a target date for the transaction to be implemented.
We will continue to keep shareholders informed of the next steps in the process, and when the time comes, we encourage all shareholders to have your say in determining the future ownership of Origin. The proposed acquisition has required the Board to dedicate significant additional time this last year, well beyond the ordinary course of business. For their measured, wise advice, I thank all of my fellow Board directors. The only director standing for re-election at this meeting is Ms. Maxine Brenner. Maxine was due to retire this year, but given the proposed acquisition, Maxine has agreed to our request to seek re-election to facilitate smooth governance during this period. Should the transaction not proceed, Maxine intends to retire prior to the conclusion of her three-year term, allowing appropriate period for Board renewal and transition. Maxine has been an exemplary director, and I recommend her reappointment to you all.
I finally want to acknowledge the leadership team here at Origin, and our CEO, Frank Calabria, and his colleagues, who are all seated at the front row of the meeting today. Despite the additional challenges of this year, they have remained focused on Origin's long-term future and continuing to create value for all of our shareholders. It's something you have all heard before, but this year, more than usual, it's clear that Origin's greatest asset is our people. Our immediate focus remains on the day-to-day operations of Origin, operating safely and responsibly, while facilitating the consortium's offer so that it can be considered by shareholders on a fully informed basis. Regardless of the outcome of that transaction, your Board and your Management Team are confident of Origin's prospects.
Execution of the strategy is gaining momentum, and we believe that our customer base, portfolio of assets, and team position the company well for the future. Thank you again for joining us today and for your continued support. I now invite Chief Executive, Frank Calabria, to address the meeting.
Thank you, Scott, and good morning, everyone. I would like to also begin by acknowledging the Gadigal people of the Eora Nation and pay my respects to their elders, past and present. I would also like to extend a warm welcome to our shareholders that are both here in Sydney and also those that are joining us by webcast. It's certainly been another extraordinary year at Origin and in the energy sector more broadly, as the awareness and urgency of Australia's energy transition has greatly increased. And you've heard from Scott just what's before us in terms of that energy transition. And it does bring with it heightened focus from governments, policymakers, and regulators, along with greater interest from investors, communities, and also our customers. Origin's ambition is to lead the energy transition through cleaner energy and customer solutions.
I welcome the greater focus on accelerating Australia's energy transition and on addressing some of the challenges that are emerging if we are to achieve our nation's climate goals. As shareholders, you will be aware we have been positioning Origin for some time to capture value from the energy transition and deliver benefits to our customers, communities, and to our shareholders. We made important progress against our strategy and priorities over the past year, and I look forward to sharing further detail a little later in my address. But first, a recap of Origin's financial and operating performance for the 2023 financial year. Origin's performance reflected the strength of our business and strategy, with higher earnings from energy markets, integrated gas, and from our 20% interest in Octopus Energy in the U.K., all driving a strong uplift in underlying profit.
This was partially offset by a higher income tax expense, which was associated with unfranked distributions from Australia Pacific LNG. Our underlying profit increased to AUD 774 million from AUD 407 million in the prior year, and our statutory profit rose to AUD 1,055 million from a loss proceeding in the, you know, from a loss in the preceding year. Origin's 27.5% stake in Australia Pacific LNG delivered record revenue and a cash distribution of AUD 1,783 million, buoyed by elevated commodity prices, and continued to be one of the largest suppliers to the East Coast domestic gas market. Net of oil hedging, Origin received Australia Pacific LNG cash distributions of AUD 1,489 million.
Turning to our operational performance, the underlying EBITDA for the Energy Markets division rose by AUD 637 million to AUD 1,038 million, as higher wholesale electricity costs in the previous periods were recovered in electricity tariffs. It also is through optimization of the electricity trading portfolio and as the cost of coal supply fell on the introduction of the temporary coal price cap. In addition, the natural gas segment reported higher sales revenue and strong trading results. We significantly increased support for residential customers experiencing financial hardship, investing AUD 30 million in our Power On program, and we have set aside a further AUD 45 million for vulnerable customer support this financial year and continue to work with governments and regulators on efforts to support those in the community most in need.
Pleasingly, more customers are choosing Origin as their energy retailer, and customer accounts have grown across all key product lines to 4.52 million accounts, the largest retail energy customer base of any Australian energy company. All electricity and natural gas customers have now been migrated to the Kraken platform, consistent with our strategic aim to deliver superior service at lower cost. Stabilization of this migration continues to progress well, and we're on track to deliver cash forecast cost savings of AUD 200 million-AUD 250 million from a baseline in financial year 2018, and we'll deliver those benefits by 2025.
Origin Zero, our division servicing business customers, is tracking well against its ambition to supply more customers with a broader range of cleaner energy solutions, doubling the number of customers on solutions, including rooftop solar, batteries, electric vehicles, and demand management, and securing several key account wins during the year. Origin's stake in Octopus Energy delivered a step change in earnings contribution during the year, with underlying EBITDA of AUD 240 million, up from a loss of AUD 36 million the previous year. Octopus has acquired Bulb Energy and recently announced the acquisition of Shell Energy U.K., becoming the U.K.'s second-largest energy retailer. At the same time, Kraken licensing continues to grow for Octopus. It growing rapidly, with more than 40 million accounts now contracted to be on the software platform.
globally, and following two recent, material licensing agreements announced in the past week, with Tokyo Gas and the U.K. water utility Severn Trent signing up. And with the potential to add Tokyo Gas's 10 million gas customer accounts in the future, this would take total Kraken accounts to 50 million and halfway towards the target of 100 million customer accounts on Kraken by 2027. In addition, Octopus continues to pursue a range of other growth options in the U.K. and internationally. Turning to Integrated Gas, underlying EBITDA was AUD 1,919 million, up AUD 82 million from the prior financial year on the back of higher commodity prices. Our teams in Queensland have worked very hard to bring more wells online and optimize well performance following the impacts of wet weather during the first half of the year, and that has boosted production.
Turning now to our outlook for the financial year 2024, which I'm pleased to report has marginally improved. At our full year results in August, the forecast was for further growth in Energy Markets underlying EBITDA. Due to improved operational performance and market conditions, we are now expecting an uplift in the lower end of the Energy Markets' underlying EBITDA guidance range. And in Integrated Gas, our forecast was for Australia Pacific LNG production to rebound and cash flow to remain strong. We now expect a further improvement in the Australia Pacific LNG production towards the top end of our guidance range previously provided. All other guidance provided at Origin's full-year results in August remain unchanged. At last year's annual general meeting, I articulated three strategic pillars that underpin our strategy: unrivaled customer solutions, accelerate renewable and cleaner energy, and deliver reliable energy through the transition.
I'm delighted to say that today we are executing the strategy at pace with the strong performance of the business, enabling a range of investment decisions. Our focus on providing unrivaled customer solutions has been propelled by the completion of the customer migration to the Kraken platform. With an average customer satisfaction measure, known as the Customer Happiness Index, at 66%, we're aiming to improve this to more than 70% this financial year. We continue to expand and refine our product offering across electricity, rooftop solar, gas, LPG, batteries, and e-mobility solutions. We've seen a strong uplift in broadband customers during the financial year and are targeting this to significantly increase over the next three years. This increased offering to customers is proving successful, with Origin winning the Canstar Blue Best Rated Bundled Energy and Telecommunications Award this year.
We've invested in building a market-leading virtual power plant, what we call a VPP, which we believe will be an increasingly important part of our portfolio through the energy transition. Our VPP has more than 343,000 connected services now that include home batteries, electric vehicles, and hot water systems, and these can be aggregated and orchestrated to help optimize supply and demand in the grid, allowing Origin to share benefits with customers and helping to avoid unnecessary investment in centralized energy infrastructure. The VPP is scaling rapidly with more than 1 GW of capacity today, and we continue to target growth to 2 GW. The past year has seen real momentum on our ambition to accelerate renewable energy and storage in our portfolio.
We've commenced construction for the first phase of the Eraring Battery, committing to invest more than AUD 600 million over the next two years for a 460-MW battery storage system with a dispatch duration of two hours, anticipated to come online in the final quarter of the 2025 calendar year. There is an option to increase this battery to 700 MW and four hours' dispatch duration in the future. We're also progressing several battery development options across our other generation sites across various states. In renewable energy, we acquired the Warrane prospective wind development site in the New South Wales New England Renewable Energy Zone, and we progressed several renewable and brownfield battery development options across the portfolio. Origin is also in discussions with the New South Wales Government regarding plans for the closure of the Eraring Power Station.
This process followed the release of the government-commissioned Electricity Supply and Reliability Check Up, which recommended the state government engage with Origin to delay the closure to Eraring to support reliability of energy supply. We do not shy away from the need to exit all coal-fired power generation as soon as renewable energy, storage, and firming generation can replace it, as we have committed in our climate and emissions targets. Origin is also progressing the proposed Hunter Valley Hydrogen Hub and has been awarded State and Federal Government funding towards developing a safe and reliable commercial-scale hydrogen supply chain in the Newcastle Industrial Port Precinct. Pending a final investment decision, first hydrogen production is being targeted from 2026. As renewable energy sources proportionally increase, firming generation, including batteries, pumped hydro, and gas peakers, will be crucial for maintaining reliability of supply, given the variable output of renewables.
Origin owns the nation's largest fleet of gas peakers, and we maintain our view that gas-fired generation will play an important role in ensuring reliable power supply under all scenarios. As more renewables enter the market, the Origin's view is new gas-fired generation will be required, and a functioning capacity mechanism that includes gas will be important to encourage the necessary investment in this new firming capacity. The delivery of reliable energy through the energy transition is a critical focus. We are positioned well with the strong gas production and record cash distribution from Australia Pacific LNG. The coal stockpile has also been restored and supply stabilized, and so we're very, very much focused on delivering reliable energy through this time. It is my privilege to lead a talented team of some 5,500 people at Origin, who make a significant contribution each and every day.
I also want to thank our people out on sites around the country, working to provide reliable energy around the clock, as well as those who support them and deliver for our customers. I am pleased that Origin's employee engagement score has increased to 7.7, and the number of females in senior leadership positions has increased to 46%. Importantly, our safety performance also improved this past year, with total recordable injury frequency rate, or what we call TRIFR, lowering to 3.8 compared to 4.0 at June 2022. Our ambition is to do better on these metrics, and we continue to apply an intensive focus to our target of a zero-harm workplace. Before concluding, I want to briefly touch on the potential acquisition of Origin by Brookfield and MidOcean Energy Consortium.
This is a significant moment in Origin's history, and shortly, pending Court approval, shareholders will have before you the information you need to make an informed decision how to vote in respect of the scheme. When the time comes, I encourage all shareholders to have your say on the future ownership of Origin. In the meantime, Origin is in a strong position with momentum and performance carrying over into the early part of the 2024 financial year. We are clear on our focus, which is to continue executing on our strategy and priorities and delivering good outcomes for our customers, communities, and planet. Thank you all for your continued support.
Thank you, Frank. Ladies and gentlemen, I now turn to the formal business of today's meeting. It's my duty as chair to ensure that shareholders as a whole have had a reasonable opportunity to ask questions about or comment on the management of the company, the remuneration report, and other items of business before the meeting today. To achieve this, the following procedures for this meeting will be adopted. First, please note that as this is a shareholders' meeting, only holders of Origin shares, their attorneys, proxies, and authorized corporate representatives are entitled to vote and speak. If you are here as a proxy and have been instructed on how to vote, I ask you to ensure that any vote you cast is in accordance with those instructions. Second, you may ask questions or make comments on the management and operations of the company.
You may also ask questions of the auditor on the conduct of the audit, the preparation and content of the auditor's report, accounting policies adopted by the company, and on any matter relating to the independence of the auditor. If there are any questions of that nature raised today, Mr. Andrew Price of EY is available to answer them. I may also ask direct questions of a more detailed nature to the Chief Executive Officer, Frank Calabria, or the Chief Financial Officer, Lawrie Tremaine, or another member of management. However, in the first instance, all questions are to be addressed to me as Chair. I can confirm that the external auditor did not receive any written questions from shareholders prior to the meeting. Third, I ask that you defer any questions or comments on a specific resolution until that resolution is put to the meeting.
Fourth, if you have questions relating to your personal dealings with Origin as a customer, I ask you speak with the company's representative, [Vanya Panton], after the meeting. [Vanya], may I please ask that you identify yourself? Thank you. Fifth, if you wish to speak today, please come to the microphone, identify yourself, and state whether you are here as a shareholder or a proxyholder. There are microphones in each aisle, and I will ask you to put your questions in turn. In order to allow a reasonable opportunity for all shareholders to speak, I will limit shareholders to no more than two questions or comments at a time. If you have more than one question or comment, please ask them together upfront, and I will respond to both.
If you have additional questions, there will be an opportunity for you to ask them once the other shareholders have had a chance to speak. I would like to stress that it's not in the best interests of this meeting, nor respectful of the other shareholders attending, for questions to be repeated, nor for individual shareholders to dominate proceedings with large numbers of questions. I would like to give all shareholders wishing to ask a question the opportunity to do so, and therefore, won't permit repeated questioning on essentially the same matters. Finally, please ask your questions or raise your comments in a courteous and respectful way. I now move to the first item on the notice of meeting, being the financial report and the reports of the directors and auditor for the year ended 30th June 2023. These are now laid before the meeting for consideration. Please note, this item of business does not require any shareholder vote. I now open the floor for discussion.
Welcome. Yes. Yep. I've, well, that's. I'd like to ask Mr. Lawrie Tremaine to answer that question. Lawrie?
Hi, thanks for the question, and good morning, all. If you look at both total assets or net assets in our balance sheet, you'll see that they are substantially lower year-on-year, and that reflects particularly the volatility of commodity prices that our business has faced. And in particular, we carry a lot of derivative derivatives on our balance sheet, and because of very, very high energy prices, particularly in June of 2022, that valued up that increased the value of our derivative assets in June. Of course, we've seen global energy prices come off this year, and so those assets have revalued lower, and so you see a contraction a reduction in our total and net assets in 2023.
Right. The... There was related to that is, your decrease in your, what's it? Sort of net cash flow of nearly AUD 1 billion. So, was that progressive over the year, or was that just in a particular quarter because of those changes?
Yeah. Quite right. So, so in, in our cash position, you'll see, so we have two businesses. One business, the, the upstream gas business, has been reasonably consistent year on year. In our Energy Markets business, though, we've had very, very high cash generation in 2022, so higher than, than normal. And so when you look at cash generation in 2023, it looks, it looks lower. Indeed, it is lower, largely driven by some of the same factors I just mentioned, that we had a very high working capital changes from period to period, which has meant our conversion of earnings to cash has been impacted.
It means that 2023 has been an abnormal year, and we would expect to get back to more like normal cash generation from 2024 onwards.
Right. Thank you.
Thank you.
Just got, well, my sort of second question, even though the first one was sort of like part A and B. I know that the auditor's remuneration has increased rather significantly by some 29%, like from AUD 3.7 million to AUD 4.8 million, which in a billion-dollar company sort of doesn't sound much, but it is a fairly substantial increase in percentage terms. And I understand that, you know, there are things happening with the scheme arrangements and the like, but it does seem a little bit excessive. Can you explain or justify the increase?
Yes. A significant additional workload was being placed on the auditors. Those fees are reviewed intensively by both our audit committee and the Board.
Mm-hmm.
And in the production of the year-end account. So we continue to think that they actually represent very good value for money.
Okay, thank you. I've got another question, but I'll.
Thank you. Thank you, shareholder.
Uh, I.
Please.
[Rowan Weir], shareholder. I think I'm probably at the wrong time, but never mind. COVID has shown us how little was made here in the four years that we've had nothing, that we're just a primary industry nation. And in this four years, we have built up our industry, and we have the people here that in universities, in energy, and everything here now. And we're a small nation, and I think it's vital that we keep our energy in our own name and not take this big, just sold off because there's the, the largest market in the world is just north of us, and we can go back to manufacturing, bring the industry here, bring in people. We need population, and we need to do this. And energy is changing so quickly that it is vital that we keep this.
As we all bought our shares to keep Australia here, and you see that there's nothing, that unless if we lose Origin, it, we will become last because they will manufacture here or take it. But everybody, there's a bigger market north of us, and I think it's probably the wrong time, but never mind.
No, well, I think it's absolutely the right time. So thank you very much, shareholder, for your question. I think there are a number of different elements to answering that quite far, quite broad, and, but I think entirely appropriate question. The first element is the people who will decide the future of Origin is all of you, all the shareholders. And it's our job during the course of this, of the proposed scheme, to present to you all the information so that you can make an informed decision. The first thing. The second point is the acquisition of Origin remains subject to Foreign Investment Review Board scrutiny. So issues of foreign ownership, and the credentials of the purchasers will be scrutinized by those regulators.
Thirdly, having said that, it has been very clear to us that the two proponents of the scheme, Brookfield and EIG, have excellent credentials, and we believe will be a responsible owner of Origin going forward, should that eventuate. And it is interesting in the context of what is now on the public record through the ACCC proposal. Brookfield's strategy is to accelerate what Origin is already doing, and they've made it very clear to us that they're very supportive of Origin's strategy and our people. So while I think you raise a very good question, shareholder, I think in the circumstances of this prospective acquisition, we're dealing with responsible counterparties who will actually accelerate what Origin's already doing. Thank you for the question. Sir?
Good morning, Mr. Chairman. My name's [Kevin Daley]. I've just got a very quick question for you. You said you've been negotiating with the state government over Eraring for quite a while now. I'm just wondering if you're serious about the negotiations or whether you're just leaving the problem for Brookfield when they come in?
Thank you for your question. No, we are very seriously engaged with the New South Wales state government over potential options for Eraring. I think as Frank mentioned in his speech and I did as well, there have been now a number of independent reports, most recently the O'Reilly report, that indicated the potential case for keeping Eraring open for somewhat longer period. The economics, the long-term economics of managing and operating coal-fired power in an increasingly renewable marketplace remain very challenging. But we, as we have done from the moment we put our notice in, are in a very constructive dialogue with the government, and when we have something more to say on that, we will. We're certainly not intending to leave it to anybody else but Origin.
Thank you.
Thank you. Madam?
Thank you, Chair. Yeah, [Natasha Lee], shareholder again. This might be a little bit academic, given what's happening with the scheme arrangement, but I was interested to hear about your thoughts about sort of your strategy to progress towards renewables. I noticed that you've got about 25% renewables at the moment, and I saw that you're moving towards about 82% by the end of the decade. I understand the constraints with things like transmission lines. But to what degree are you looking at what things are under your control rather than by other parties, such as the government on transmission lines, but also sort of local supply of renewable energy? I noted in the Stockland report that you've got a partnership there for PV on a number of their sites.
But, those sorts of things which, in my sort of non-electrical engineering mind, potentially bypasses some of those constraints, like transmission lines, and helps to accelerate the adjustment to renewables.
Thank you for. That's an excellent question. So we're certainly not doing everything we can under our control to meet our renewable target of four gigawatts of additional renewable and storage capacity by 2030, and there are a number of things we can do. So firstly, I draw your attention to the decision we made to invest in the Eraring large-scale battery.
Mm.
460 MW, AUD 600 million, a very significant investment at a very strategic site. This is one of the embedded assets and advantages that Origin enjoys. Where we have existing generation assets, they're usually accompanied by a very strong transmission connection, which make them ideally located for to as a battery location. So first stage of Eraring is underway. A number of the Board Directors have been out there and seen the quite significant construction program that started, and that site is also capable of being upgraded, and we will consider the merits of a further upgrade to that site to potentially 700 megawatts. We also have similar strategically located sites in Darling Downs and Mortlake, both gas peaking plants, which are intrinsically well-suited to further battery investment.
So those remain under active consideration by the company. The second area that again, we can control is quite astonishing progress we've made in our VPP. In essence, the VPP is a capital light battery of sort. It's a way of actually storing and shifting energy. And as Frank talked about, we're beyond 1 GW. We have a 2-GW t arget, several hundred thousand, 300,000 devices under management. That's effectively. We don't require transmission to do that. We've been working with customers seeking to manage their load for mutual benefit.
Mm.
The third area I would say is we are very actively looking at building, and we have been building our renewables pipeline. Of course, one of the criteria that is important when we consider that is transmission access, and what is the timing and likelihood of completion of various aspects of the transmission program that has been outlined by the regulators as a matter of priority. Through that, we can identify transmission zones that are more likely to meet our certainty and timing thresholds.
Mm.
The final point is, of course, hydrogen. It's somewhat further out, but another potential use case for to meeting our renewable targets, and we can talk about, Frank mentioned that, and we can talk about that some more, in some more detail if a question's asked. So we're not totally reliant on transmission, but, you know, to meet our four gigawatts, we will be. But meanwhile, we're not wasting time getting on with what we can control.
Right. Thank you.
Thank you.
Mr. Chairman, [Jonathan Gray], retail shareholder.
Welcome.
Can I start by commending the team and the Board for the performance over the last 12 months, in particular, and through COVID, and in particular, supporting those in need? I'd like to express or a question first around the Octopus investment in the Kraken platform, commending the success of the original concept and the ongoing support of that. Can you enumerate for the benefit of the shareholders, the last three valuation points, in particular, the most recent valuation point, taking into account the Tokyo Gas license arrangement?
Can I also make a comment that, I, in view of the trajectory of the share price, the de-leveraging of the balance sheet, the performance of each business unit taken individually and collectively, and that lack of reflection, in my view, of the, in the share price, can I ask why the Board has not initiated the invocation of the material change provisions of the scheme implementation deed to terminate the deed and retain the value of the company in the hands of the present shareholders instead of foreign owners?
So let me thank you, shareholder, for your two questions. And let me address the Octopus one first, then I'll address the broader questions. So we're delighted with the performance of Octopus. You know, since we made that investment in 2020, it, s orry. Is that better? Can shareholders hear me?
That's better.
Thank you. Shout out if you can't. I'll go louder, and maybe they'll adjust the microphone to help you at the back there as well. So absolutely, we're delighted with the performance of Octopus. Value has continued to accrete, and we believe has accreted beyond the last valuation point, which is, as you said, some time ago. The company has continued to meet its objectives, and as you rightly point out, recent announcements have furthered the number of customers on the Kraken platform. And with several acquisitions now pending, completed and/or pending, one still pending, will again, I think, continue to generate value in the company.
And here, we're pleased with the progress we've made on implementing the Kraken platform, and you've heard Frank restate our commitment to AUD 200 million-AUD 250 million worth of savings out of that platform by 2025. So, that's Octopus. The broader question you raise is one, there's both the value point you raise and the foreign ownership point. I believe I've dealt with the foreign ownership point. I won't come back to that, but I will address the underlying question you raised, and it's an entirely fair and reasonable question to have raised. Our duty is to act in the best interests of Origin and all its shareholders. We can't control the share price tomorrow, but we can control the information that we put in your hands to make an informed decision.
We're on the verge of being able to do that, we hope, pending on the New South Wales Supreme Court decision. That will contain an independent expert report. It will contain further information, and if that independent expert report concludes it's in Origin's best interests to do so, it will contain a linked recommendation from shareholders. We do not have the capacity under the SID, under conventional terms, to unilaterally walk away from the scheme implementation deed because of Origin's improved performance. However, Origin's performance, all the information, will be included in the independent expert report and any material information thereafter, we're under an obligation to share that with you as well. We are acutely aware of where the current stock price is, trading some AUD 0.39 above terms.
We're also aware of the comments made by our significant and long-term supporter shareholder, AustralianSuper, about the value of the company. We remain engaged with the consortium and with shareholders seeking to facilitate a successful scheme.
Thank you for your answer, sir.
Thank you. Welcome.
[Brian Allison], shareholder, and as a shareholder of some 20 years, I'm very disappointed in this takeover. We seem to have gone through a lot of pain in that time. We've foregone dividends to invest in the new projects and all that sort of thing, and just when there seems to be some green shoots appearing, we wanna jump ship and it. When you said that we were committed to the scheme, is there a break fee involved if we decide to pull out of that?
There's no opportunity for, under the customary terms of the scheme, to terminate the scheme and pay a break fee. It's only under specific regulatory-related events, so there's no out on that. But what I would say to your question is, this is exactly why the Board rejected three approaches from the consortium before we agreed to permit due diligence. And as a result of due diligence, which enabled us to share what we saw was the rapid recovery in earnings coming down the pipeline at Origin, enabled us to secure, at the time, a very attractive premium. The second point, sir, is again, it's an entirely reasonable question.
I would encourage you to scrutinize the independent expert's report because it really does speak to Origin and its prospects, and ultimately it will be up to you to decide whether this is something you wish to vote in favor for. I would encourage you to get yourself fully informed and exercise your democratic right as a shareholder in respect of the future of Origin. But we, we too, our duty is to act in Origin's and all of its shareholders' long-term best interests, and we have an eye to making sure that shareholders are adequately compensated through that process. That's why the scheme has been structured the way it is, with an independent expert presenting you with all the information to make your decision.
So just to understand the position, we can't terminate the scheme. Therefore, what options do we have if the independent expert's report says that it's not good value? Number one, apparently-
I beg your pardon. If the independent expert concludes that it's not in the interests of shareholders, the scheme does not proceed.
Okay, so.
If the independent expert report concludes that it is in shareholders' and Origin's best interests, then you have a decision to make. In the independent expert report, I would also draw to your attention the sections there that explain why shareholders might choose to accept the offer and why shareholders may choose not to accept the offer. We will set that out quite transparently to enable you to, to arrive at that balance and determine whether you feel it's in your best interests. Ultimately, the shareholders of Origin will decide.
So if the scheme can't be terminated, what meaning does the shareholders vote have? If the shareholders vote no.
It won't be a shareholder vote.
That's the only way it can be terminated. Is that correct?
Sorry, I'm not sure I quite understand. If you could repeat the question.
If the shareholders vote against the scheme.
Yes.
Uh, that, that is, uh.
Termination
Grounds for termination.
There's no need for termination 'cause the scheme, scheme has been terminated by the vote.
Okay.
So that is.
Right.
Thank you for your question.
Okay, thank you.
Are there any other comments or questions on the financial reports or the management of the company? Sir, Beg your pardon.
Good morning, Chairman. [John Marsan], shareholder. Can I say at the beginning that I think that the sound system is, in this room, meeting room, is sort of far from satisfactory?
That's not good at all.
Yes.
We'll, we'll ask our sound engineers to try and improve the-
Uh.
Were you at the back of the room, sir?
Beg my.
Where were you located? Just so the sound engineers can.
Third row.
Okay. I'll also speak up.
Okay. What I was going to say was, having heard Frank deliver his forecast for the future, and having seen that the company has sort of had a few rough time, now it looks better again, I can't believe that the Board is still so keen to sell the company. Going forward, I think the shareholders are, will probably do quite well by not getting involved with the takeover, and I can't believe that the price at the moment, you know, would reflect the way we're going at the moment. Thank you.
Thank you, sir, and I think I've substantively addressed the underlying points there, but I will just restate them. We agree that Origin's prospects are strong. We agree that Origin has staged a significant recovery in earnings in recent years, and we've taken all of that into account in our decision to reject several proposals and enter into due diligence with another one, and enter into a process that ultimately relies on the independent expert and their view, and your democratic right as a shareholder to exercise your vote. Thank you, sir.
Good morning.
Welcome.
Is this? My question is, looking at, I still haven't got over the shock from the revelation, Senate revelation of consultants, the four consultants.
Sorry, could you please speak up, sir?
I'm sorry. Can you hear me now?
That's better.
I haven't got over the shock that came out of the Senate inquiry into the use of consultants. Now, does Origin use consultants for advice or strategic advice or any of those?
Modestly and selectively.
Selectively.
We try and get multiples of value for money for what we pay.
Okay, which of those four consultants do you use, consulting firms? How much money spent?
We use a number of them, sir. We use a number of them, a number of the consultants of the accounting firms and consulting firms, but.
Can you?
We're not a heavy user of consultants.
Can you give us a figure of how much money is spent? The reason I'm asking is how much money and effort is devoted to developing expertise within the company, rather than throwing money at the consultants whose behavior has been shocking. I mean, completely unethical, robbing and snouts in the trough. I mean, it's, it's still going on, and they still haven't told us the truth.
So you're absolutely right that the Origin's primary responsibility is to grow capabilities in-house: technical, engineering, research, and we have very substantially invested into that. The mere fact today that we're talking about a VPP, a virtual power plant, is the result of years of investment in gathering data, cleansing data, designing the artificial intelligence layer that sits over that, developing the customer interface in order to control the devices, developing the commercial product propositions in order to generate revenue streams out of that. The mere fact we're talking here today about APLNG being such a significant cash flow contributor is due to the operational excellence shown day in, day out by the integrated gas team, many of whom are here today. Through that operational excellence, when we benchmark it, is world-class.
So we certainly don't, w e're not a culture that relies on third parties to get stuff done or third parties to develop particular expertise. Of course, there will be specialized consultants, universities-- other areas of real deep research excellence, where it makes sense for Origin to partner or to effect or to hire their expertise rather than build in-house. So we try and get it, strike the right balance, but the balance is certainly significantly weighted, if not almost totally weighted, to building skills in-house.
You've repeatedly mentioned the independent expert.
Yep.
Who are these experts? Are they drawn from one of the four consulting firms?
No, they're not one of the. Well, the independent expert for the Origin scheme is Grant Samuel. That is a firm that has a long track record of deliberations and advice in respect of takeovers and schemes of arrangement, and we hire them in the context of that expertise.
Do you have any figures on how much money was spent on the use of consultants in the last 12 months?
It's not a material item, sir. It's not a material number.
Okay. And did Origin get JobKeeper? How much, and have any of that money been returned?
To the best of my recollection, we got no JobKeeper money at all.
Okay, thank you.
Thank you for your questions. Are there any other comments or questions? Sir, please.
[Peter Breaton], shareholder. Has the Federal Treasurer made any comment or given his blessing or not to the scheme?
The Federal Treasurer has a seat at the table via FIRB. We are awaiting the FIRB approval, Foreign Investment Review Board approval. Thank you.
Good morning, Mr. Chairman.
Good morning.
Matt Leffers on behalf of HBK Capital. First of all, please allow me to congratulate the company, the management, and Board on the excellent results over the past year. In the next two months, shareholders will be asked to evaluate an offer put forward by the consortium of MidOcean and Brookfield. An important component of that evaluation is going to be the value assigned to the stake that Origin has in Octopus. As far as we are aware, the last disclosed valuation publicly that has been made available is GBP 3.5 billion, but that's almost two years old. In order to help shareholders make a decision and a proper evaluation, could the Board please advise and disclose what was the value that the Board considered around the time in March when decided to recommend the implementation of the scheme? Thank you.
Thank you. A very good question, and one that thankfully will be fully disclosed in the independent expert's report. They form their own view of the value of Octopus, and you'll be able to interrogate the information provided by the independent expert report. At this point, we're not permitted to disclose the Board's view of value on that, but we remain extremely excited and enthusiastic about our investment in Octopus, as the results show.
Okay. Will you be able to disclose that value after the publication of the scheme?
No. We're required to, o ur recommendation is a function of the independent expert. The independent expert has all of our information on Octopus.
Okay.
Thank you.
Thank you.
Sorry.
Welcome back.
Thank you. It's more a comment that all this technology is here. Science is 30 years, 40 years ahead of today, and it was all discovered here at CSIRO about 30-odd years ago, the solar panels, everything. But because we didn't have the money to do it, it went overseas to China and everywhere else. And I don't want to. And we're an island nation of a small population, and it'll go again because we'll be put last, and we need to keep the skills here and to bring people in. And as I say, does the science, does the expert have any science knowledge or what, that is in analyzing what is needed here for Origin Energy, and that Australia should come first in this case and not last?
Thank you for your question. The expert has got considerable experience in the sector and has also, as will be revealed in a document, taken additional expert advice, backing up their own position on certain technical matters, including on the oil and gas front. But to your point, we would love to be, and are, working with sources of domestic innovation to try and commercialize and grow Australian capability. I know that, Greg Jarvis and the team, alongside the work we're doing in the establishment of the Eraring Battery, which uses conventional, lithium-ion technology, we're also working with a young startup company called Allegro Energy, Australian-owned with some very innovative flow battery technology that we're quite excited about. So more on that.
Yes. Well, all these, most of these inventions with CSIRO and University of New South Wales, the various universities, and they all went overseas because we couldn't afford to do it, and we should keep it here... and not lose it. And as I say, science is 50 years at least ahead of today, so we should keep what we've got now, 'cause you don't know what the future is. Yeah.
Thank you very much. Sir?
Good morning. [Bob Fawcett], shareholder. On my way in here, I was, I had to work my way through a crowd of, what appeared to be Knitting Nannas who, you know, are protesting, about the activities of Origin. Origin, as you've made well aware, and, and which I've read elsewhere, is, making, definite steps towards, transition, which I assume is the overall basis of their complaint. Are you aware of the reason why, in view of that, the protest has gone ahead? Has there been any efforts by the Origin Board or, management, to engage with the Knitting Nannas to find out their point of grievances, point of grievance or, to, allay their concerns by providing them with, information? And basically, that's it, yep.
Thank you for your question. We were informed, as a Board this morning, just prior to commencing the AGM, that there were going to be some protests. We're not actually sure of what is being protested at the moment. We have a very long history, sir, of extensive engagement with stakeholders around everything that Origin does. So we have extensively consulted with communities that are impacted by our actions, upstream, APLNG, also the Eraring community in respect to the potential closure of the Eraring Power Station. What we tend to find these days is there will be people protesting that we're not moving too fast, and there'll be people protesting that we're not moving fast enough. There will be people protesting that we should keep Eraring open, and people protesting we should keep Eraring closed.
So, we totally respect their right to express their views, and I'm sure that we'll make ourselves available to speak with them, to listen to their views.
Yeah, I accept that, but I'm referring to the time period more proximate to this meeting. Like, they're out there now. They've been out there... I don't know what time they got here, but and certainly it's organized, so, you know, people knew that they were going to be here. So what my point is that they would be aware of what the general nature of the direction Origin's taken, but, obviously, it hasn't, the information that they've been given in more recent times, has not allayed their concerns.
Mm.
Has there been any steps in recent times to engage specifically with the Knitting Nanna group?
Let me follow up on that, sir, and we'll certainly make ourselves available at the end of the meeting to meet with them. Thank you. Sir?
Good morning. My name's [Parbury], [Piers Parbury]. I'm a shareholder. You mentioned the Australian target of renewables is 82% by 2030. Do you know what it is now? What, how far, how far, the organizations or the industry h as got towards that target?
35%, 35%, approximately. About 35%, yeah.
Sorry, repeat that, please.
35% .
35%?
Yeah.
Wow, that's an ambitious target to do the rest in seven years. And there's a current proposal to, s orry about the microphone. I'll just hold it. There's a current proposal to develop offshore wind farms, I believe up near Newcastle, but currently, there's been a bit of consultation around the Illawarra area. Curiously, there is a lot of opposition to it, curiously by people who would normally advocate very strongly for renewables. Do you, is Origin interested in developing, in that scheme, in developing offshore wind farms?
Yes, we most definitely are. We have scoured the world for what we think is the ideal partner and have entered into a joint venture agreement with a U.K.-based company, [RZ Energy], which has got a strong background in construction, as well as one of the, if not the world leader in offshore wind development. So we are actively engaged with both the Victorian and New South Wales governments in respective offshore wind tenements.
Oh, that's interesting. Yes, I've noticed that there's a company in Scotland that makes the turbines. That was actually part of my next part of the question about where they're going to be made. There's some hope that the steel made in Wollongong or Port Kembla could be used to make the turbines, or not the actual turbines, but the structure. Any ambition to having a manufacturing plant here in Australia?
To your first question, the sheer volume required of renewable infrastructure to be built is going to re-energize and broaden the domestic capacities that are required to make that happen. Now, whether it's going to be specifically in wind turbine blades, I don't know. But as we saw with the construction of the three LNG plants up in Gladstone, it really, you know, the multiplier effects throughout the local economies are really quite significant. So we would certainly expect technical expertise to be built.
Mm, oh, that's promising. They have informed us, well, people who are taking an interest, that the scheme's a good eight to 10 years away, if it happens. And of course, we don't know if it's financially viable. But of course, that's already beyond 2030. So, that, a nd that's just to complete the scheme, let alone get the benefits from it. But oh well, I, thanks for the answers.
Thank you, shareholder. Are there any other comments or questions on the financial reports or management of the company? I will now move to the remaining items of business. Voting on each of the remaining items of business for consideration at today's meeting will be determined by means of a poll. Boardroom, the company share registrar, will be the returning officer for the purpose of the poll. The persons who are entitled to vote on this poll are all shareholders and representatives, and attorneys, and shareholders, and proxyholders, except those precluded by operation of law or listing rule as set out in the notice of meeting and explanatory notes. Like we have in prior years, we will be using electronic devices to vote on all resolutions. While many of you have used these devices before, I will now provide some brief instructions on how to vote.
First, please ensure that the smart card you received on registering today is inserted correctly into the device. Place your smart card into the top of the handset, making sure that the arrows at the bottom of the smart card are inserted and facing towards you. A welcome message and your name will appear when the card is inserted correctly. When I open voting shortly, your device will become active, and instructions will appear on the device screen. You may use the red, green, and blue buttons to navigate through the screens. Voting appears. Options will appear on the screen. You will also see an option to vote on all resolutions in accordance with my voting intentions as chair of the meeting. Once you've voted, confirmation that your vote has been received will also appear on the screen.
You can also cancel or change your vote on any of the items by following the prompts on the screen. If you are here as a proxyholder, you should vote using the handset device in respect of any open votes that are available to you. If you are voting in more than one capacity, for example, as a shareholder and proxyholder, you can use the same handset. Your smart card will contain all eligible voting shares in each capacity. If you wish to abstain from voting, you should select the abstain option on your handset. I advise that subject to the voting exclusions set out in the notice of meeting, on a poll, every member who is present in person or by proxy, attorney, or representative, will have one vote for each share held by her or him.
If you require assistance in submitting your vote, please raise your hand, and the staff from Boardroom will come to assist you. I will now. Boardroom, we have a shareholder down here who needs some assistance, please. I will now open the poll for voting and move to the remaining items of business. Your handsets should now be activated, and you may submit your votes at any time in case you need to leave the meeting early. But we encourage all of you to stay for the discussion to ask any questions. If you wish to leave early, please submit your votes on the electronic device and return it to the registry staff as you exit the room. As we move through the relevant items of business, I will give you an opportunity to cast your votes using the handset.
I will also give you a final opportunity to cast your votes if you haven't already done so, before I close the poll towards the end of the meeting. The next resolution is the re-election of Ms. Maxine Brenner. Maxine joined the Board in 2013 and was last re-elected in 2020. As I noted earlier, Maxine was scheduled to retire at the conclusion of today's AGM. However, given the proposed acquisition of Origin under the scheme, the Board requested Maxine to stand for re-election due to the constrained ability to recruit new directors at this time, as well as to provide continuity for the Board, particularly given Ms. Brenner's significant relevant legal and corporate transaction experience. Accordingly, Maxine now seeks re-election by shareholders under the ASX listing rules and the company's constitution.
Should Maxine be re-elected and the scheme not be implemented, Maxine intends to support the Board through the process to recruit a new independent non-executive director and retire prior to the end of her three-year term. Maxine is Chair of the Safety and Sustainability Committee and a member of the Audit, Nomination, and Risk Committees. Further details of Maxine's biographical information are set out in the notice of meeting. Maxine is considered an independent director by the Board. The process for re-election involves an assessment by the Board of all the relevant factors going to the director's expertise, skill and experience, and his or her performance and contribution to the work of the Board over the past twelve months. The results of this assessment form the basis of the Board's recommendation to shareholders.
The Board has assessed Maxine's performance and concluded that during her time on the Board, Maxine has made an outstanding contribution to Origin. The Board, with Maxine absent, unanimously recommends her re-election. I will now ask Maxine to speak to her re-election.
Thank you, Chair, and good morning, fellow shareholders. I also wish to acknowledge the Gadigal people of the Eora nation and pay my respects to elders, past and present. Today, I'm seeking re-election as a director of our company. Since I last addressed our meeting, I was appointed Chair of Sustainability and Safety. Safety always comes first at Origin, and we have rigorously focused on our performance, how we've gone, what we could do better, and more particularly, developing a learning safety culture. To evolve our learning is critical, as it is this culture which drives us not only to act safer, but to have the courage to call things out when they are not. We were pleased to report that our key safety metric, TRIFR, was down from last year.
The committee is also charged with producing our first Climate Transition Action Plan, which details how we will move forward in decarbonizing our business. The plan was put to last year's AGM, and as some of you will remember, received overwhelming shareholder support of around 95%. One of Origin's most material actions to reduce emissions will be the retirement of Eraring Power Station. Our teams have been working hard to support that transition and have already provided 93% of employees with individual support plans. Additionally, they're working with contractors and the wider Eraring community, and I commend all of those involved for their dedication and work in relation to the transition. As a committee, we've regularly visited to understand the progress being made, and it's been significant.
This is only one step in the journey to our energy transition, an energy transition which is moving ahead with the introduction of increasing amounts of renewables and storage facilities. As Frank mentioned, during the year, we took final investment decision on a 460 MW Stage 1 Eraring Battery, which will provide significant storage in the area. With your support, I would feel privileged to continue these efforts until the scheme or until I'm replaced. My executive experience is of particular relevance at this time, given the context of the scheme offer. I've specialized in advising on mergers and acquisitions for over 25 years, both from a financial and legal perspective, and I've drawn on these skills in assisting the Board and management navigate our current proposal. As a former member of the Takeovers Panel, I can bring a different perspective to the discussions.
Additionally, my experience helps in navigating our increasingly complex regulatory environment and charting a roadmap for our climate and sustainability responses more broadly. I've both the commitment and time to devote myself to the role, and with your support, would be privileged to work with my Board colleagues and management to create ongoing, ongoing value for you, our shareholders, customers, employees, communities, and partners. Thank you.
Thank you, Maxine. Is there anyone who wishes to speak on the motion? Shareholder.
Thank you, Chair. [Natasha Lee] again. This comment is relevant if the scheme doesn't go ahead. I note that there is good female representation on the Board, but I think that the Board, should the scheme not go ahead, needs to be mindful of maintaining the both the female diversity as well as other forms of diversity. You seem to be lacking, you know, say, cultural diversity and other things. And also it would be helpful if some of that information is conveyed in the annual report. There just seems to be a focus on gender diversity without having transparency or an assurance to the rest of the community that the Board does reflect the makeup of the community in general.
Thank you for your feedback, and we'll consider that for future disclosures. Thank you. As you rightly point out, the Board does have excellent diversity from a gender perspective. Thank you. The screen behind me shows how shareholders have directed that proxy votes be cast. You'll see that 92.52% of the votes have been cast in favor of the motion. Undirected proxies held by me as the Chair will be cast in favor of the motion. As indicated earlier, voting on this resolution will be by means of a poll. Please now vote on your electronic device. The next item of business on the agenda is to adopt the remuneration report of the company.
The disclosures in the remuneration report focus on the company's policy for setting director and executive remuneration and the actual amounts paid to directors and key executives for the year just past. While the vote on the remuneration report is non-binding and advisory only, as we have done in prior years, we will take into account any comments from shareholders and the outcome of the vote when considering the future remuneration arrangements of the company. Our remuneration framework is designed to support the company's strategy and to reward our people for its successful execution. It's designed around three principles of attract and retain the right people, pay fairly, and drive focus and discretionary effort. During FY 2023, no material changes were made to our remuneration framework. We reviewed it to ensure alignment with our purpose, strategy, values, and behaviors.
We balanced metrics which were within management's control and those which were not, but which materially influence our shareholder experience, such as commodity prices. We ensured our focus on long-term decision-making was reflected in the choice of short-term metrics and long-term measures of success, consistent with that focus. We reviewed the balance of fixed versus at-risk remuneration and undertook a comprehensive benchmarking to ensure competitive levels of remuneration opportunity. As our strategy develops, so too will elements of the remuneration framework to ensure alignment. The Remuneration and People Committee continues to test the remuneration framework against these objectives. We review various alternative structures, engage openly with our major shareholders and proxy advisors and remuneration experts, and seek to simplify and refine the framework in line with changing industry conditions. The directors recommend that you vote in favor of adopting the remuneration report.
I now move that the remuneration report be adopted. Is there anyone who wishes to speak to the motion?
Good morning, Mr. Chairman and Board. My name is Lewis Gomes. I represent the Australian Shareholders Association. I do notice that our numbers of shareholders has actually fallen by about 25% since this time last year, which is disappointing. I guess it was because the takeover offer just was dragged out so long. Some people just either couldn't wait or gave up. But I can speak for about 340 shareholders holding about 2.3 million shares. Just like to make a comment on the remuneration report and then end with a question. Firstly, thank you, Mr. Chairman and Mr. Sargent and others, for meeting with us on a regular basis.
We always value the opportunity to raise sometimes difficult questions, but we always appreciate your very informed and gracious responses. On the remuneration report, we'd particularly, through you, Chairman, like to acknowledge the work done by Steve Sargent and the HR team and others. It's been a very, very difficult period, the last four or five years, holding the team together. We know the LTI hasn't worked, so a lot of executives have probably felt somewhat disadvantaged relative to some other businesses. So I think the ability to hold that team together during those difficult years was terrific with the change that you made to the long-term share scheme.
More recently, of course, we've had the takeover offer come in, which must surely have created a whole lot more disturbance within the, not just the executive team, the business as a whole. People wondering, "Will it happen? Will it not happen? Will I still have a job? Will I not have a job?" We notice you've come to arrangements with a certain number of key staff at a pretty nominal cost, and I think that's been terrific because, as they say, we need to keep the band together, whether the proposal goes through or not. So I just wanted to acknowledge that terrific effort. It's very complex, I don't understand it, but I'm sure Steve and others do understand it, and I'm sure they've done a great job.
My question's a simple one. Obviously, the share price has lifted over the last year, presumably, partly at least because of the takeover offer and partly because probably of the improved performance. Can you just explain how that increase in share price, influenced by the takeover offer, was taken into consideration in the LTI assessment, looking at total shareholder return?
So the first thing I'd like to say, Lewis, thank you again for attending the meeting. I'd like to also especially thank the ASA for your diligent and probing questions, and we certainly appreciate the long history of engagement we have with you and your colleagues. I think you do a terrific job. I'd also like to thank you for drawing to everybody's attention that, largely through Frank's effort, but supported by the Board, I think Origin has a terrific Management Team, and we have retained that Management Team at times when it's been quite challenging as Origin's been going through its own transformation and when the stock price certainly didn't reflect underlying value. So the way the STI...
The way the LTIs will work, the particular challenge we face is in respect of the forthcoming year, when we no longer have a share price benchmark, which is why we have adopted to use cash-settled instruments as opposed to equity. In respect of the 2023 year, then, yes, the LTI, the year-end share price, as measured under the conventional VWAP terms, reflected the uplift in value as a result of the takeover, and so it should have. You know, the takeover, in many respects, validated Origin's strategy at that point in time, understanding full well, as I think I've been at pains to explain during the course of the meeting, the steps that still need to be taken.
So yes, the prevailing stock price at year-end 2023 did take into account the stock price, which was affected by the takeover. Going forward, the retained equity elements of both the STI and the LTI are going to be cash-settled, as set out in the remuneration report. I do note that the LTI will still have three-year retention elements to it and will be the subject, potentially, of the new owners of the business. If that doesn't go ahead, the scheme doesn't proceed, we will revert to, for the following year, the conventional Origin approach.
Good. Thank you.
Thank you very much, Lewis. On the screen, I now show how shareholders have directed that proxy votes be cast. You'll see that 97.88% of the votes have been cast in favor of the motion. I will vote available and undirected proxies held by me in favor of the motion. Voting on this resolution will now be by means of a poll. Please now vote on your electronic device. Has everyone who wishes to vote entered their selection? If you have not yet entered your vote, then please do so now, as we will be closing the poll shortly. If you're having any difficulty casting your votes, please raise your hand, and a member of Boardroom will come and assist you. I now declare the poll closed. I will shortly display the results of all resolutions put to the meeting today.
The results of the poll will also be announced to the ASX. I would like to thank all of my Board colleagues and Frank Calabria and the executive leadership team and the thousands of employees and contractors for their dedication and commitment in the past year. Finally, I would like to thank you, shareholders, for your ongoing support for Origin and for attending today's meeting. I declare the meeting closed. Refreshments will be served outside. Thank you very much.