Thank you. Good morning, and welcome to today's annual general meeting. I'd like to begin by acknowledging the Wiradjuri people, traditional custodians of the land on which we meet today, and pay our respects to their elders, past and present. I extend that respect to Aboriginal and Torres Strait Islander peoples here today. It's 10:00 AM, and I've been advised by the company secretary that we have a quorum and declare the meeting open. Please note the important notice and disclaimer on the screen. This can also be found within the presentation lodged on the ASX and the SunRice investor website. Today marks the 73rd annual general meeting of Ricegrowers Limited. For those of you who haven't met me, my name is Laurie Arthur, your chairman.
It's wonderful to be here in Leeton today with our growers and shareholders, and I also extend a warm welcome to those of you joining via the live webcast. Seated at the head table with me today are Rob Gordon, our Chief Executive Officer and a director, Dimitri Courtellis , our Group Chief Financial Officer, and Kate Cooper, our Company Secretary. Our other directors are also here, and I ask them to stand as I mention their names. Deputy Chair, John Bradford.
Morning.
Luisa Catanzaro.
Morning.
Dr. Andrew Crane.
Morning.
Ian Glasson.
Morning.
Ian Mason.
Morning.
Julian Zanatta.
Morning.
Of course, Dr. Leigh Vial , who did not seek re-election and whose term concludes at the end of today's annual general meeting. I'd also like to thank Jeremy Morton. If Jeremy's here. Yeah, Jeremy is here, for standing in the grower director elections, and whose term will also conclude at the end of today's annual general meeting. I will formally acknowledge Leigh and Jeremy's contribution in my chairman's address. We are keenly aware that this is Rob's last day as Managing Director and Group CEO, following his impressive almost 12-year tenure, and we will farewell him formally later in the meeting. The SunRice Group also welcomes incoming Group CEO, Paul Serra, who is with us today, and I ask him to stand. Welcome, Paul.
Morning.
Also with us are the President of the RGA, Peter Herrmann, and Executive Director of the RGA, Graeme Kruger, and Rice Marketing Board member and incoming SunRice Director, Melissa De Bortoli. I particularly welcome all our growers and shareholders. In terms of today's agenda, Kate will go through the procedural matters next before I give my chairman's address. Rob will then deliver his group CEO presentation. After that, we will conduct the formal business of the AGM. We will consider the annual financial report, directors' report, and the independent audit report for the year ended 30th of April, 2023. During that item, shareholders as a whole will be given a reasonable opportunity to ask questions or make comments about the management of the company. We will then proceed to considering the resolutions set out in the notice of meeting.
There will then be an opportunity to hear from our incoming Group CEO, Paul Serra, before the AGM draws to a close. The B class meeting will follow either at 11:30 AM or immediately after the AGM, whichever time is later. Once the results of today's meeting are known, they will be announced on the ASX and the SunRice investor website. I confirm that I am holding undirected proxies in my capacity of chairman of the meeting. I will vote those proxies in favor of each resolution. I'd now like to hand over to the Company Secretary, Kate Cooper, who will explain how to vote and ask questions during today's AGM. Thanks, Kate.
Thank you, Chairman. Voting today will be by way of poll. The resolutions in the notice of annual general meeting are only able to be voted on by A-Class shareholders. The vote on resolution 1 and resolution 2 are by ordinary resolution, which require a 50% majority of votes cast to pass. In accordance with the constitution, if you are the holder of a shareholding of first A-Class shares or multiple first A-Class shares, you are entitled to one vote in respect of that shareholding, and if you are the registered holder of a second A-Class share, you are entitled to one additional vote. We will share with you the proxy and direct voting results of each resolution before you vote today. Please note voting will close once Link Market Services has collected the voting cards at the end of today's AGM.
As communicated in the notice of meeting, online proxy and other forms of voting ahead of the meeting closed at 10:00 AM on Monday morning. A-class shareholders present at the meeting here today are, however, able to cast their votes using the voting card they received during registration this morning. Before we go any further, I just wanted to check that everyone present here today is holding either a voting or admission card. A-class shareholders and their proxies, attorneys, and representatives will use the yellow voting cards for each resolution. A-class shareholders who are not voting at the general meeting, for example, in joint holdings, should be holding a blue non-voting admission card for this meeting.
B-class shareholders who are not also A-class shareholders are not able to vote at today's AGM and should be holding blue non-voting cards. Visitors have been issued with red admission cards and are not able to ask questions today. Does anyone not have a card? Great. A representative of Link Market Services will conduct the poll as Returning Officer. At the end of today's meeting, the Link team will collect your voting card. If you have to leave after the poll is opened, but before the end of the meeting, please leave your voting card in the poll box on the registration table. I should note that if you have previously voted by proxy, your votes cast here today will override your previous proxy direction. As the chairman noted, there will be time for questions from shareholders.
However, as with all shareholder meetings, I ask you to confine your questions or comments to the matters under consideration today. If you have any general questions or comments about the management of the company, or any questions or comments relating to the annual financial report, directors report, or independent audit report, please ask your questions or make your comments during our discussion of those reports. If you have any questions or comments relating to the remuneration report or the re-election of Mr. Ian Glasson, please ask those questions or make those comments during our discussion of the relevant resolution. In order to provide shareholders as a whole a reasonable opportunity to speak today, I ask that you initially limit the number of your questions or comments to two.
If time permits, we may allow you to ask further questions or make further comments once other shareholders have also had an opportunity to speak. I note shareholders who were unable to attend today's meeting were able to submit questions in advance, as we outlined in the notice of meeting. These questions will be responded to first before we open the floor to questions from shareholders present with us here in Leeton. For those shareholders who'd like to ask a question or comment at the right time, just a reminder to hold up your yellow or blue card and wait for a microphone. Please also state your name for the room. Thank you. I will now hand back to the chairman.
Thank you, Kate. Welcome, everyone. It's wonderful to be here with you today in Leeton, at the center of the Riverina rice-growing industry. I also want to welcome those A and B Class Shareholders and other valued stakeholders who are viewing today's annual general meeting via the webcast. A few weeks ago, many of us came together in Griffith to celebrate the Australian rice industry at the Australian Rice Growers' Conference, hosted by RGA and concluded with the Rice Industry Awards and gala dinner. I have to say that this year's conference was once again delivered to a very high standard, and the sentiment amongst participants was very positive. Congratulations to the organizing committee and which comprised of staff from the RGA, AgriFutures Australia, and SunRice for delivering such a great event.
Financial year 2023 delivered an exceptional set of financial results for the SunRice Group, including the highest recorded revenue in the company's history. This financial performance demonstrates the resilience of the SunRice business model and the strength of the growth strategy, allowing us to deliver value to both classes of shareholders. This included the highest ever naturally determined paddy price of AUD 461 per tonne for our A-class shareholders, and a record fully franked dividend of AUD 0.50 per share to our B-class shareholders. These record results, which exceeded the previous record set in financial year 2022, were achieved despite widespread inflationary pressure, pressures that continued to impact our operations during this time.
I believe the 23 performance once again firmly validates our rice pool model, which, although subject to commodity price fluctuations, just like many other commodities, has an inherent flexibility that allows it to adapt to market conditions and realize new opportunities as they arise. The inherent resilience of the SunRice business is based on our people and partners, some of the world's most skilled rice growers, and many of them are here today, locally and around the world. I just want to recognize all those that have contributed to this year's impressive performance and thank them. Our sustainability strategy also remains an important commitment of the company to create long-term value for our shareholders, and I know firsthand the pride our growers take in passing their land on to future generations in a better state than when they started to farm it.
In financial year 23, we saw good progress against the targets of our sustainability strategy, including our water productivity targets across crop year 22, Riverina rice crop, a 1.06 tonne per megaliter average irrigated water use efficiency was achieved. The 23 result put the business in a strong position in the year ahead, which Rob Gordon will talk to in more detail in his group CEO presentation. After harvesting 417,000 paddy tonne in 21, and 688,000 tonne in 22, which was our largest crop in five years, we are now processing and marketing the recently harvested 2023 crop of 500,000 paddy tonnes, representing a third year of strong Australian rice production.
While opportunities still exist in the short term for our Australian rice in the international markets, these are expected to be countered by a degree with northern hemisphere markets returning from drought earlier than expected, particularly in the United States, which will increase competition and potentially reduce global rice prices in both consumer and tender markets this year. Given these circumstances, the paddy price range of AUD 390-AUD 450 per tonne, announced in February 2023 for the crop year 2023 crop, I'm sorry, remains in place at this stage.
As we look ahead to planning for the 2024 Riverina crop that we're about to plant, favorable season conditions are expected to result in a fourth consecutive year of abundant Australian rice production. Our ability to market a large Australian rice crop could be limited in the short term by the availability of premium international markets. Earlier this month, incoming SunRice CEO, Paul Serra, and I welcomed the Honorable Chris Minns, M.P., Premier of New South Wales, and the Honorable Tara Moriarty, M.L.C., Minister for Agriculture and Regional New South Wales, for a meeting and tour of the SunRice Leeton Mill. It was a productive and positive visit in which we were able to share a presentation about the SunRice Group business, the Riverina rice industry, and the important contribution our company and the industry make to regional New South Wales.
One important issue that was discussed was the Australian Bureau of Agricultural and Resource Economics and Sciences, ABARES, independent report, which was delivered to the New South Wales Agricultural Minister in late May 2023. Although we understand the ABARES report is still under consideration by the New South Wales Government, we continue to advocate for the retention of the structured marketing arrangements, known as rice vesting, beyond June 30th, 2027. Another important issue discussed during the visit was the federal government's intention to fully implement the Murray-Darling Basin Plan, and as you will note, there were further discussions put forward or announcements made by Minister Plibersek yesterday.
Riverina annual irrigators are the most impacted water users in the Murray-Darling Basin. Now, as of yesterday, the Federal Minister has announced an agreement of Murray-Darling ministers to deliver the Basin Plan in full, which is a concern to us. SunRice, working with the RGA, will continue to engage and put solutions to the state and federal governments, seeking outcomes that will benefit the Australian economy, regional communities, and the environment. These outcomes are not mutually exclusive. There are a number of important items, items being considered at today's annual general meeting. The board is seeking support from A Class shareholders to adopt the remuneration report for the year ended April 30th, 2023. Also for the re-election of our non-executive director, Ian Glasson, for a further term of three years.
Ian was elected at the 2020 annual general meeting for a 3-year term, and the board, with Ian abstaining, recommends that shareholders support his re-election. We will hold a separate B Class meeting immediately following the conclusion of the annual general meeting, where B Class shareholders will be asked to consider and approve the long-term incentive award and one-off retention award for our new group CEO, Paul Serra. I will go into more detail regarding those resolutions later in today's proceedings. There are a few acknowledgements that I want to make before closing. As we all know, after nearly 12 years of service, Rob Gordon retires as Group CEO of the SunRice Group at the conclusion of this annual general meeting.
Rob's, during Rob's tenure as Group CEO, the business has further grown into a global food group and one of Australia's leading branded food exporters, despite the challenges of droughts, floods, record low crops, and the COVID-19 pandemic. Rob was instrumental in the listing of the company on the Australian Securities Exchange in 2019, and overseeing the development of a resilient business model, moving from a largely, from largely selling an Australian rice crop to a truly multi-origin, multi-market food business with sources, which sources, rice from 12 different countries. Rob also oversaw the diversification, diversification of the group's earnings through the acquisition of several complementary businesses, investment in our Lap Vo Mill in Vietnam, and new market expansions, including more recently, those arising from the Australian, United- Australia-United Kingdom Free Trade Agreement.
I'd ask you to join me in thanking Rob for his service to the SunRice Group. We also farewell two of our grower directors at the conclusion of this annual meeting. At the 2021 annual general meeting, a special resolution was passed to reduce the size of the SunRice board from 10- 9 directors, which takes effect from the date of this AGM. Accordingly, we farewell Dr. Leigh Vial, who decided not to seek re-election to the SunRice board. Leigh has served as a grower director on the board since 2015 and has made strong contribution, not only to this company, but the broader Australian rice industry, including through his research work on a number of Australian Centre for International Agricultural Research, known as ACIAR projects. We also farewell Jeremy Morton.
Jeremy has served on the board since 2019 and was a member of the Grower Services, Safety Health and Sustainability Committee. I would like to thank Jeremy for standing in the grower director elections and also acknowledge his important contribution as chair of the National Irrigators' Council at this important time. I'm sure that Jeremy is going to be very busy looking after your interests and our interests over the next several months and possibly years. I'd ask you to join me in thanking both Jeremy and Leigh for their service. Thank you. We congratulate Melissa De Bortoli on her successful... Melissa is known to us as a current director of the Rice Marketing Board of New South Wales and brings relevant knowledge of the rice industry. Melissa, welcome. I look forward to working with you.
Melissa, would you stand so everybody can see you? Thank you. I'd also like to use this opportunity to acknowledge former SunRice director, Noel Graham, who's not here today, but he will be with us tonight, and congratulate him on being awarded the Member of the Order of Australia at the King's Birthday 2023 Honors List for his significant service to agriculture through the rice growing industry. Noel served on the board of SunRice for over 15 years, until 2017, and was deputy chairman from 2013- 2015.
Finally, I want to thank the President of the Ricegrowers' Association of Australia, Peter Herrmann, who's with us today, and the RGA for their efforts over the last 12 months, the Chair of the Rice Marketing Board for the State of New South Wales, Victoria Taylor, the RMB directors, as well as SunRice's staff and management team, and last but not least, my fellow board directors. I look forward to working closely with our incoming Group CEO, Paul Serra, as we continue to look to build upon this year's strong performance. I now invite our Group CEO, Rob Gordon, to make his final presentation and address as the SunRice Group CEO. Thank you. Thanks, Rob.
Thank you, Laurie, and good morning, everyone, everyone who's joined us here today. It's a real pleasure to be with you here in Leeton, in the heart of the Riverina, and to provide my final update on the performance of your company as the SunRice Group CEO. At last year's AGM, I was able to stand here and share that the SunRice Group had delivered record group revenue, naturally determined paddy price, and total fully franked dividend, following 2 years of extraordinary challenges. I'm proud to stand here today, once again, and report that your company delivered another impressive financial performance in financial year 2023, with group revenue, naturally determined paddy price, and total fully franked dividend exceeding the records we set last year.
These results demonstrate the flexibility and resilience of our business model and strategy, and our ongoing focus on delivering value for both A Class and B Class shareholders. We were also able to deliver the outstanding financial performance despite a number of headwinds, including a high inflationary environment, which drove a material increase in key business input costs. Now, our ability to withstand the headwinds we faced throughout the financial year reflects the strength of our brands and market positioning, and draws from the various organic and strategic growth initiatives we've delivered in recent years. It's also the result of the efforts of our talented workforce of over 2,000 people around the world, who are aligned behind our growth strategy, our values, and our purpose. While we continue to face macroeconomic pressures, the business has had a strong start to this financial year as well.
Financial year 2023 was an outstanding year for the SunRice Group, in which we achieved record group revenue with growth across all segments. The business also delivered the highest naturally determined paddy price for A Class shareholders, and highest total dividend for B Class shareholders in its history. As this slide shows, some of our highlights from the financial year include a top-line revenue of AUD 1.64 billion, and that's up 23% on the prior period. EBITDA of AUD 117 million, up 18% on the prior period. Net profit after tax of AUD 54.8 million, up 12% on prior period.
A naturally determined paddy price, as I've said, of AUD 461 per tonne for medium grain rice, and a total fully franked dividend of AUD 0.50 per B Class share, representing a 60% payout ratio and a dividend of 8.1% based on the B Class share price applicable on the 30th of April, 2023. There was a range of factors which drove the strong performance in financial year 2023. These included abundant Riverina rice production, with the CY 2022 Riverina rice crop 65% larger than the prior year, supporting strong sales, sales volumes in key premium markets, expansion in territories impacted by drought, and improving the profitability of the group segments that rely on inputs from the Australian rice pool business.
We also saw sales price increases across most of the group segments and product categories, which helped to offset inflationary pressures. We saw favorable changes in product mix in some markets, and CopRice's continued recovery, with the segment returning to profitability and benefiting from the first full year contribution of the Pryde's EasiFeed acquisition, which we acquired in January 2022. The group was able to accelerate profitable growth and maintain balance sheet flexibility despite facing a number of headwinds, including widespread and worsening inflationary pressures, exchange rate flex, volatility, and global supply chain disruptions, which added some AUD 79 million of freight and distribution costs compared to the prior year. I'd like, now like to briefly discuss the results of each of our segments, which are displayed on this slide.
Looking first at the Australian Rice Pool Business, this segment benefited from the largest harvest in five years, supporting a strong increase in revenue to AUD 335 million, and that was up some 36% on the prior year. The larger crop provided the base for higher sales volumes in both domestic and international markets, including territories impacted by drought. Pool returns were also supported by a low Australian dollar, which supported rice exports and sales price increases across the segment's portfolio, which followed current trends in world rice prices and helped to partially offset the significant inflationary pressures incurred during the year.
In our international rice segment, while revenue increased by 18% on the prior year to AUD 735 million, the segment did face a number of challenges which have weighed heavily on profitability in the financial year, as their impact was only partly offset by countering sales price increases taken during the year due to the time lag in their implementation. These challenges included disrupted and limited access to rice supply from China, increases in international rice prices, volatility in foreign exchange, and ongoing disruption to local and international supply chains. As a result, the EBITDA for this segment decreased by 9% against the prior year to AUD 39.9 million.
Turning to our rice food segment, EBITDA increased by 40% on the prior year to AUD 11.1 million, and revenue increased by 6% to AUD 113 million. The segment benefited from a focus on new product launches, sales price increases across several product categories, and reduced costs from the greater availability of broken rice for rice flour production. However, ongoing disruptions to supply chains partially offset some of these benefits. Within Riviana Foods, while the segment achieved record revenue of AUD 215 million in the financial year, there were a number of factors which impacted profit margins. These included the sharp rise in the cost of imported products, driven by a weakening Australian dollar and rising commodity costs due to geopolitical issues, and ongoing systemic disruption to the global shipping industry.
As a result, similarly to the international rice segment, EBITDA decreased by 55% on the prior year to $6.3 million, due to the time lag in implementing countering pricing measures. Our CopRice business continued its recovery and delivered record revenue of $236 million in financial year 2023, improved EBITDA from the prior year to $12.4 million. Despite ongoing challenges, CopRice's return to profitability was driven by the continued momentum in the Australian ruminant business and companion animal portfolio, the first full year of Pryde's EasiFeed, which delivered ahead of expectations. Finally, looking at the corporate segment, EBITDA for the period increased by 79% on the prior year to $26.3 million.
This increase reflects the higher levels of brand and asset financing charges that were received from the Australian Rice Pool Business during financial year 2023, driven by the improved availability of Riverina rice and the corresponding increase in branded sales levels of Australian rice, together with a sharp rise in the cost of capital due to interest rate hikes. If shareholders would like further detail on individual segment performance, our more detailed financial year 2023 results presentation is available on the ASX and out on our investor website. As Laurie said, sustainability remains integral to how we create value for our stakeholders, and financial year 2023 saw a continued focus on embedding sustainability across the group and improving how we track our performance.
In financial year 2023, we saw progress against the Australian rice industry's aspirational target to achieve an average of 1.5 tons of paddy rice per megaliter of water by 2027. We committed to setting science-based targets, including developing our roadmap to net zero no later than 2050. We became a foundation supporter of the National Plastics Recycling Scheme to assist with meeting Australia's national packaging targets. We commenced a 1-megawatt solar photovoltaic installation at our Woodlands mill in California. We also commenced several development programs that will grow the domestic capability and capacity of certain markets in which we operate, in addition to the many community programs which we support, which also saw us donate AUD 1.1 million to community organizations.
This included launching a public-private partnership with the Australian Centre for International Agricultural Research and other parties, including The University of Queensland, to establish a traceable, quality assured value chain for tropical medium grain rice in the Mekong Delta in Vietnam. We also launched our Trukai Smart Farmer Program program in Papua New Guinea, which is a two-week course delivered in partnership with the PNG University of Technology to help support the broader development of a commercial rice growing industry in Papua New Guinea. The financial performance of the SunRice Group delivered in financial year 2023 demonstrates the strength of our business model and strategy.
It also builds, as shown on this slide, on our strong history of performance through the cycle following the Millennium Drought, highlights how the realization of a number of strategic initiatives has enabled us to consistently deliver value to both A and B Class shareholders. We've been able to increase grower returns over time, including delivering record paddy prices over the last two years. Between financial year 2012 and financial year 2023, we've delivered an average compound annual growth rate of 5.5% for the paddy price we pay to growers. We've also delivered consistently strong dividends and increased returns for our B Class shareholders. Since the beginning of financial year 2012, we've delivered a total shareholder return of 634%, compared to the ASX 300 cumulative index total shareholder return of 262%.
We've also continued to invest in the growth of our business, investing AUD 411 million since the beginning of financial year 2012, including AUD 119 million in strategic acquisitions and AUD 292 million in capital expenditure. The SunRice Group has been able to achieve this growth and deliver value to both classes of shareholders while maintaining a strong focus on capital management and balance sheet flexibility. Our net debt of 2.5x EBITDA, core debt of 0.6x EBITDA, and gearing of 34% at the 30th of April 2023, reflect this and demonstrate how the group is well-placed to take advantage of future organic or strategic growth opportunities. Throughout financial year 2023, we continued to execute our growth strategy to deliver on our objectives to increase returns to both classes of shareholders.
Some notable achievements for the year include delivering the strong financials with the record group revenue of AUD 1.64 billion, continuing to build our premium branded position with the launch of the Kokusai brand into Costco stores in the U.S., and the Australia-United Kingdom Free Trade Agreement, creating new opportunities for Australian short and medium-grain rice. Achieving better returns in tender markets, diversifying our earnings through the acceleration of the performance of the recently acquired KJ&Co Brands and Pryde's EasiFeed businesses, and expanding our resilient global supply chain through conducting the second consecutive year of successful trials of Australian Rice Company, which provides some onshoring manufacturing capability. We've also achieved several development programs under our sustainability strategy, which I spoke about a little earlier.
Looking ahead, the SunRice Group's strong momentum from the second half of financial year 2023 has actually continued into the first quarter of the current financial year. Ongoing growth in group revenue has so far been supported by a number of favorable conditions, which we anticipate will continue throughout financial year 2024. These include the positive effects of cycling annualized price increases from the prior year, additional pricing reviews in financial year 2024, further expansion in international markets, and a weakening Australian dollar, which is supporting Australian rice exports. Most of these factors are also currently driving an improvement in group profitability, further supported by improvements in freight and logistics costs and the ongoing recovery of our rice business.
However, we continue to monitor and manage a number of headwinds, which include volatility in exchange rates, particularly for our import businesses, surging energy prices, the global interest rate environment, and the impact of inflationary pressures on consumer spending. We also continue to monitor rice growing conditions offshore. Maintaining balance sheet flexibility and a disciplined approach to capital management remains a core focus for the group, and we continue to explore a well-developed pipeline of potential strategic opportunities, including acquisitions, as well as the divestments of non-core and non-operating assets.
Turning now to our Australian Rice Pool Business, and as the Chairman said in his address, the estimated range for the CY 2023 pool, the one we're marketing currently, remains at AUD 390-AUD 450 per tonne for medium-grain rice, and that's given our expectation of increased global supply and competition in some of our key markets. Based on current favorable seasonal conditions, including water availability, we're expecting a fourth consecutive year of abundant rice production in CY 2024. The group is also expecting a large amount of CY 2023 crop to be carried over at the end of the financial year.
Now, coupled with the Northern Hemisphere markets returning from drought earlier than we'd expected, particularly in the United States, these factors have the potential to moderate returns for the Australian Rice Pool business, given the finite opportunities for placing Australian medium-grain rice into premium markets. The group is exploring options for managing these complexities while maximizing returns to growers, and will provide a further update when the CY 2024 seed circular is issued in the next few weeks. Now, after almost 12 years with the SunRice Group, today does mark my last day as CEO, ahead of finishing up with the company on Friday. Having navigated some of the worst years of drought and the disruption of COVID-19 in recent years, and with the business in a great position, I believe now is the right time for me to retire from the SunRice Group.
It's been a real privilege to be part of the SunRice Group. I'm proud to have led an organization where, as part of my role, I was able to look at ways to help change health outcomes in the Pacific, to provide an important source of food security to underprivileged communities in the Middle East, and to support smallholder farmers in Vietnam to improve their farming practices and connect their products with international markets to improve their returns. It's a truly unique role, and one which I've thoroughly enjoyed holding, and I'm proud of everything we've achieved for our people, growers, shareholders, customers, and the Australian rice industry.
I'm particularly proud that over the last decade, the SunRice Group has improved paddy prices for our growers, acquired our Lap Vo mill in Vietnam, established a substantial trading hub in Singapore, listed on the ASX, we've revitalized our brands, developed and implemented our sustainability strategy, and diversified our earnings through the acquisition of several businesses, including KJ&Co, Roza's Gourmet, and Pryde's EasiFeed. Most of all, I'm proud of the talented workforce we've built and the highly capable management team we have in place now. The strong position the business is in is a testament to their efforts, as well as everyone who's chosen to be part of the SunRice Group, not just now, but over the years. It's been a pleasure to have been to have had this opportunity. Pardon me, I thought I wasn't gonna do that.
It's been a pleasure to have had the opportunity to work closely with Paul Serra, the incoming group CEO, over the last couple of months. We've looked to provide as smooth a possible leadership transition as we can. Paul is a highly capable and accomplished executive, and I look forward to seeing the SunRice Group go from strength to strength under your leadership, Paul. I wish you the very best as the new and incoming group CEO. Finally, I'd like to sincerely thank the board, our management team, our employees, growers, and shareholders for your support during my tenure. I also want to acknowledge our chairman, Laurie, and the board for the assistance, guidance that they've provided me over the years. I've truly valued it. Thank you.
Thank you, Rob. As the formal proceedings are about to commence, I will declare the poll for on each of the resolutions open. As Kate has just mentioned, for the purposes of voting, each A-class shareholder or their proxy, attorney, or representative will have received one yellow voting card. If you are the registered holder of a shareholding of a first A-class share or multiple first A-class shares, you are entitled to vote one vote in respect of that shareholding. If you are the registered holder of a second A-class share, you are entitled to a vote, to one additional vote. You will see that this voting card includes a space for voting on each of the resolutions. A-class shareholders may use their yellow voting card and place an X in the relevant for or against, or abstain boxes for each resolution.
Agenda item one, all members have been provided with the annual report, including the financial report, directors' report, and independent audit report for the year ended 30th of April 2023. I note Mark Dow, our partner from our auditing firm, PwC Australia, is with us here today in Leeton and available to answer any questions. You have heard from both Rob and myself. Kate, are there any comments or questions in relation to these documents, or any general comments or questions about the management of the company submitted by shareholders in advance of today's meeting?
Yes, Chairman. So our first question is from Robert Slonim and Chen Chang Huang, and it's a comment as well. An article in The Australian Financial Review on 23 July 2023 states India has banned exports of non-Basmati white rice to ensure availability in the domestic market. Does the company have any contracts or agreements and currency hedging arrangements for exported Indian rice? What will the material financial impact as a result of the Indian export ban be?
Thank you. That's a great question. It's been very prominent in the press. Rob, would you mind answering that question, please?
Yeah. Thanks very much, Chairman. I think as, as stated in the question, the Indian government recently banned the export of non-Basmati white rice for an indeterminate period. We buy Basmati rice from India, and therefore, we anticipate that we will not have problems with the contracts that we have in place for Basmati rice. However, what is evident, is that the long grain pricing complex around the world has spiked as a consequence. India, these days, is responsible for normally, in a normal year, for about 10 million tons of such exports, and withdrawing those from the global market is a significant move.
To give you an idea, if the other, the next two exporters were to empty their strategic stocks, they could only make up 40% of that 10 million tons. Therefore, there's a, there's a, there's a short on long grain rice in world markets. When you have a look at the production figures out of India, however, it's actually tells a slightly different story, which is that at their finishing stocks are pretty much the same as ever, and their production is slightly higher than in prior years.
It would be easy to interpret it, not so much as a rice shortage, as actually a more of a political move ahead of an election, which is due in the first quarter of next year, and the need to keep rice prices for the voting public at a low level. Whilst it has spiked price rises, and is likely to maintain those prices at a high level between now and that election, we anticipate that post that, it's likely that the ban will come off and prices are likely to fall. It's been put to me at the Rice Conference that this is likely to have a significant impact on our rice returns. I'd love to say it is.
The reality is we play in a very different market with medium grain and short grain, in other words, japonica. That's more influenced by the availability of Californian rice. I think people would be aware that the Californians have had a really significant water inflow into all of their storages. The rice crop is up at the highest level it's been in a number of years, and they've still got a lot of water for next year. We anticipate that the japonica market is likely to be more moderated rather than influenced by those long grain prices. We will see an influence is where we compete with tropical medium grains, where farmers can either grow long grain or tropical medium grain. Those prices are likely to elevate.
We'll need to, where we source those products, take more price in the market to offset them. Otherwise, we don't have other hedging arrangements in place, Chairman.
Thanks, Rob.
Chairman, we have a second question from Jennifer Anne McNeice: A well-publicized problem is that PwC Australia indicates potential risks of dishonest and unethical behavior, possibly organization-wide, as part of the corporate culture. What actions has the board taken to date to satisfy itself that the retention of PwC does not represent an unacceptable risk?
Thank you. I'd like our head of FRAC to answer that question. We have Luisa Catanzaro.
Very good question. I can confirm that management, the Finance, Risk and Audit Committee, and the whole of the board have taken quite some time to seriously consider these issues and discuss these matters, alleged matters, with PricewaterhouseCoopers, both our audit partner, Mark Dow, and with senior leadership at PricewaterhouseCoopers. Pricewaterhouse are our audit firm providers. They are also our tax advisors. Coincidentally, we were, nothing to do with this, looking at tendering the tax audit services of, to find the appropriate tax advisor going forward. As part of that process, I can actually confirm that PwC have been precluded from the tender. We are yet to announce who the successful tax firm is.
I'd like to also mention at the same time, it is not because we doubted the integrity of any of our tax service people who worked on the PwC account. It was just part and parcel of a process we were going to initiate as well, but we did find that it would be disingenuous to include them in the process. We have very thoroughly considered the matters. We have discussed it with the highest levels of leadership at PwC and have looked at their supposed and part and parcel rectification plans that they are putting in place against these allegations. I just wanted to reiterate that we are holding and very comfortable with PricewaterhouseCoopers as our audit providers and Mark as our audit partner. I think that should address the question as put.
Thank you. I'd like to add that, it's been a pleasure to work with Mark, and Mark operates at the highest standards. Thank you, Mark.
Yeah.
Okay.
Okay, Chairman, our third question is from Claire Maron and Antonio Maron . It's a comment: I hope you guys campaign about our water. It is getting worse.
Thank you, that's a very pertinent question, I will agree with you that the situation around water and the delivery of the Basin Plan , it is getting worse. As I mentioned earlier in my speech, the Federal Water Minister, Tanya Plibersek, has announced that they intend to try and deliver another 750 megalitres, and that's about the Australian rice crop. It's a real concern. That's the reason why SunRice and RGA have been working very closely to tackle these problems. You'll note we had meetings with Premier Minns a couple of weeks ago, we're also in a very fortunate position that we have some very skilled people advocating on our behalf.
While we've-- You know, it's a challenge we're looking at. We are looking at a range of programs to secure our water, which we'll go into more detail. I also-- The people I'm sort of talking about, Rachel Kelly. Many of you will know Rachel. Rachel is the chair of the Basin Community Committee, which is a very important position in going forward. We also have Linda working with the RGA, so we've got some of the two of the, you know, most qualified water experts going forward. It's an absolute high priority for SunRice. It underpins our ability to produce rice, so we're providing additional resources, working very closely with the RGA, and there are not many doors we can't get through.
We do understand that it is very concerning to our grower community, and it's concerning to us, as a company, when you, you've noted that we've dropped down to... We had a, a sequence of, you know, 40,000 and 50,000 ton crops, and then we've rebounded. So we're working on ways to take those, you know, vacillations out of our production base, and I think we've got some pretty sound strategies there. It, it is a concern, but I can assure Claire and Antonio that it's a high priority for us. We're actually, we're resourcing it. We have Jeremy up there, with the National Irrigators' Council. We're prominent in all the organizations, and we take a very pragmatic and strong approach to these issues, but it is a concern.
Thank you.
One final question, Chair, from Ian Hardy: When can we expect Riviana to return to making a reasonable gross margin and profit?
Thank you for that question. I'd ask our Chief Financial Officer, Dimitri Courtelis, to answer that question, please.
Thank you, Chair. Whilst we don't give specific BU guidance on our segments, I can give a bit of context to Riviana. Rivi's had a bit of a trifecta of challenges over the last 12 months with the exchange rates, when you consider the depreciation of the Australian dollar against both the euro and the USD. We've also had shipping rates go through the roof, and that's the overhang from the COVID challenges over the last few years. Of course, wheat prices and other inputs going through the roof with the challenges in Ukraine. Now, when we consider the current environment, we are seeing shipping prices starting to come off, but it's not without its challenges. We're still in a depressed environment from an Australian dollar perspective, and we are also looking at onshoring opportunities.
As, as Rob alluded to earlier, we purchased The Waffle Company in Australia, which is helping to provide some of that support in Riviana. We do have a, a long-term view. We, we believe we're in a low point in the cycle in Riviana. If you look at CopRice over the last two years, working through that cycle, looking forward to again, apply that same logic to Riviana, deliver for our shareholders going forward.
Thank you. Kate, do we have any other questions?
No further questions.
Thank you. Now, I'd like to invite comments or questions from shareholders present with us today in Leeton on the annual financial report, directors' report, and the independent audit reports. I note we've got Ian I've noted your question, I'll come to that. This will also be your final opportunity during the AGM to ask any general questions or comments about the management of the company, but you will have an opportunity to make comment and questions around our resolutions. So I see Ian Blight. Ian, Ian's one of our growers from over Griffith way.
Hello. Ian Blight.
Thank you, Ian.
Congratulations, Rob. I'll shake your hand later.
Thank you.
Mine's a foreign exchange question. We've always had an ongoing problem in getting the U.S. dollars out of PNG.
Yeah.
Is it still a problem or is it resolving?
Yeah, thanks, Ian. That's a very pertinent question. I'd ask Rob Gordon to respond to that.
Certainly. It is an ongoing challenge, Ian. You know, if I go back to the beginning of my tenure here, it was less of a problem. The PNG economy was very strong. It's an oil or resources-based economy, and they had a good inflow of U.S. dollars. You know, as you, you referred to a number of years ago, that turned around, as a consequence, U.S. dollar liquidity is hard to come by. We get a strong prioritization, nevertheless, you know, the IMF is currently involved, putting a loan into the government of Papua New Guinea, and is now controlling evaluation of the kina, and is limiting the amount of kina liquidity. We monitor this very, very frequently.
We get high prioritization from the central bank there, and it's something that, you know, we're constantly working on how we can re-reduce the balance. It's not helped that supply chains have been quite disrupted. In order to keep PNG in food security, we've advanced certain deliveries of rice into country, which of course then mean that we have more working capital tied up. So that's boosted, as you've probably seen in the accounts, has boosted the amount that of outstanding money that's in kina. We mark to market each month, so there's no risk sitting there. We take the pain each month as it devalues, and that's reflected in our results and is, and also in my comments of the outlook. Still remains positive despite that.
As we work off those, and the supply chains calm down, working capital will come down, and if we can get the liquidity, that balance will come off.
Thanks, Rob. Do we have any other questions of a general nature? Very happy to take them now. We've got the CFO, we've got Rob, we've got Kate, we've got the whole team here if you've got any questions. Okay. Thank you. We'll now move on to the next item of business. Resolution one: All members have been provided with a Remuneration Report for the year ended 30th of April, 2023. As outlined in the notice of meeting, the Remuneration Report forms part of the Directors' Report, and the vote on this resolution is advisory only and will not bind the directors of the company. However, the board will take the outcome of the vote into consideration when reviewing the remuneration practices and policies of the company. As described in the notice of meeting, a voting exclusion statement applies to this resolution.
I would like to clarify that the intention of this resolution is to endorse the remuneration report for the prior financial year. I would now like to invite Chairman of the People & Remuneration Committee, Independent Director, Ian Glasson, to introduce the remuneration report. Thank you, Ian.
Thanks, Laurie. As outlined earlier, the group delivered excellent performance in financial year 2023, despite obviously a challenging inflationary environment, resulting in improved profitability and record revenue. The record naturally earned paddy price for medium grain rice each, and record totally fully franked dividend, reflect the group's ongoing focus to deliver value for both classes of shareholders. Combined with the group's improved safety performance, this strong financial performance resulted in positive short-term incentive payouts for the majority of eligible employees across the business, including the senior management team and the group's CEO, Rob Gordon. The remuneration outcomes for this past year also reflect the management team's performance in delivering against agreed objectives and progressing the company's growth strategy.
Excellent achievements, particularly in the current labor market, which is challenging in attracting and retaining employees, with low unemployment rates, high interest rates, and candidate-aligned market due to increased job vacancies. Despite these challenges, the SunRice Group has achieved its highest engagement outcomes to date, further underscoring the outstanding achievements over the year. The SunRice Group recognizes the importance of ensuring that our employees are paid fairly and responsibly, and of setting remuneration at the right level to attract and retain high-quality directors, and to attract, retain, and motivate high-quality executives. There's no greater test of this than when we go to the market, as we've just done with the appointment of our new Group CEO, Paul Serra.
The key terms of Paul Serra's remuneration were explained at the time of his appointment. In summary, we've taken the opportunity to realign the Group CEO's package to have a larger % at risk through incentives, both short and long term, with a slightly lower base salary in line with current market practice. The details of the incoming Group CEO's incentive plans form part of the resolutions for the B Class meeting later this morning. There is no special termination payment for Rob Gordon, who is being paid pro rata on his existing terms up until his retirement as the Group CEO after today's AGM. The remuneration report reflects his 2022-2023 financial year salary and incentives. We're very grateful to Rob for his own many achievements and in also ensuring a smooth transition to Paul Serra.
Finally, as the board size is being reduced, we are reviewing the non-executive director fees, which have been well below market, to ensure they become more comparable with our peers while staying conscious of the total fee pool size. We have a good board with enormous dedication and commitment to SunRice. It's pleasing on behalf of the board and company to see this achievement today. I therefore commend the remuneration report. Thank you, Chairman.
Thanks, Ian. I'll get you to stay while, in case we have any questions. Thank you, Ian. Kate, are there any comments or questions from shareholders, submitted in advance?
No comments or questions in advance, Chairman.
Okay. Thanks, Kate. I'd now like to invite comments or questions relating to the remuneration report from shareholders present with us today in Leeton. Any questions on our remuneration report? Noting in mind that we're going to be looking at the resolutions for the B Class shareholders at the B Class meeting. Any questions around that remuneration report? Thank you. Thanks, Ian. Thanks for that presentation. We'll now move on to the vote for this resolution by way of a poll. The ballot, proxy, and direct votes for this resolution are on the screen. A Class shareholders, if you haven't already done so, please cast your votes on resolution 1 of your yellow voting card. Oh, yes. Good, thanks. Norm? Yes.
What we're going to do, we're going to do the next resolution, when you've done that, we'll collect them both, so at the conclusion of the next resolution. Thanks, Norm. Thank you. The second and final item of business relates to the re-election of Independent Director, Ian Glasson, for a further term of three years. Ian has significant career experience in the branded food and agricultural sectors across several international markets. His professional experience includes direct interaction with grower and owner groups, he has developed a strong knowledge of agri- agribusiness, integrated supply chains, commodity and financial markets, as well as experience with listed organizations and corporate transaction processes.
The board, with the assistance of the nomination committee, have reviewed Ian's performance with a particular focus on the skills, knowledge and experience that he brings to the board and his contribution to board discussions. Accordingly, my fellow directors and I, with Ian abstaining, unreservedly support his re-election. I'd now like to invite Ian to say a few words ahead of the vote. If you'd come back, please, Ian. Thanks.
Thanks, Laurie. SunRice has certainly achieved excellent growth to emerge through the difficult years of drought and COVID-19 in a very strong position to deliver further for both A and B Class shareholders. I congratulate the management team for this achievement, wish Rob well in his retirement, and warmly welcome Paul as CEO. I'd like to thank my colleagues on the SunRice board, and in particular, Laurie, as Chairman, for their support and respect during my tenure. I seek your support in serving again for a further three years, where I hope to bring my international agribusiness experience to assist in delivering the strategy and importantly, providing some continuity during the CEO succession.
I look forward to seeing further growth in SunRice, where increased earnings diversity, particularly in global rice, will offer greater stability through the Riverina waters cost cycles, while offering new and potentially higher value markets for Australian rice. Importantly, help build an internationally sized business of scale. I look forward to your support and now hand back to Laurie. Thank you.
Thank you, Ian. Kate, are there any comments or questions from shareholders submitted in advance?
No, Chairman.
No comments or questions have been submitted in advance. Thank you, Kate. I'd now like to invite comments or questions relating to Ian's re-election from shareholders present with us today. Are there any questions for Ian? Okay, thank you. We'll now move on to the vote for this resolution by way of a poll. The ballot, proxy, and direct votes on for this resolution are on screen. A Class shareholders, if you haven't already done so, please cast your vote on resolution 2 on your yellow voting card. I better do mine as well. Excuse me. Thank you. Okay. That concludes today's resolutions. Please remain seated, but hold up your completed voting card, and a representative of Link Market Services will collect it from you. I believe those that wish to vote in the poll have now done so.
If there is anyone who has not yet had their completed voting card collected by Link Market Services, please raise your hand. I believe that Link has now collected all the voting cards at today's meeting. Accordingly, I will now close the poll. Now, as I mentioned at the start of the meeting, I would like to invite incoming Group CEO, Paul Serra, to address the meeting. Paul has had the opportunity over the last seven weeks to immerse himself in the business, with a number of visits already to the Riverina, meeting with growers, staff, and key stakeholders. Welcome, Paul.
Okay. Firstly, it's a pleasure to be here in Leeton today, and to be joining SunRice at, at such a critical point in its history. By way of introduction, I thought I'd explain a little bit about my professional career, and after a very brief but productive six-week transition with Rob, some of my initial insights around the group and what I'm most looking forward to. After growing up in Far North Queensland in a fourth-generation farming family, and completing my secondary education there, I earned an honors degree in mechanical engineering from The University of Queensland. Upon completion of this degree, I started my lifelong love and involvement with the, the global food industry. And, and that was with The Campbell's Company in a, in a global management program.
I spent 20 years with Campbell's, working across many areas of their global businesses here in Australia, as well as through Asia and in the USA. During that time in Campbell's, I worked across operations, supply chain, marketing, general management, and business transformation, and gained a deep and insightful understanding of global branded consumer markets and supply chains across the world. Upon leaving Campbell in 2020, I've spent the last 3 years with the Olam Group, first as their President and Head of Global Operations, and more recently as the Head of North American business based in the U.S. During this time, in addition to the global brand and consumer knowledge I got through Campbell's, I got a deep understanding of global commodity and food ingredient supply chains across the world.
Personally, after spending more than 10 years away with my family, it's been a pleasure to get back here to Australia, most of my time was spent in Asia and the USA, and to be joining SunRice. I have followed the SunRice Group with, with interest for some years, and I'm honored to be joining the company at such an exciting time in its evolution. I think my professional experiences across global consumer market and branded businesses, as well as more recently in commodity and, and food ingredient supply chains, stands me in good stead to continue to build on the success SunRice has had over many years. I'll, I'll share a few of my insights, and after 6 weeks, they're, they're still crystallizing in my mind, but it's been a very productive handover with Rob.
I think firstly, we have a very united rice industry in Australia, which is rare for agriculture in this country. The strength of our branded position that SunRice has been able to develop enables us to place the rice grown here in the most premium markets across the globe and return best for our grower groups. The industry's focus on innovation, efficiency, and water improvement productivity is a strength and will be very critical in the coming years. In addition, the SunRice Group has significantly grown and diversified over the time, from largely selling an Australian rice crop, to now having mutually beneficial supply chains across the globe that benefit both our Rice Pool business and profit businesses.
During this time, as we've heard today, the group has also diversified our earnings profile through the Riverina and CopRice businesses, as well as our international rice businesses, and we have a strong and prudently managed balance sheet. The SunRice Group is now a leading Australian food exporter and marketer across the world, and I'm very excited to be joining. This success, in a large part, is a direct reflection of Rob Gordon's leadership over the past 11+ years, and the engagement that he has had, not just in the international markets, but with the rice-growing communities here in Australia. I would personally like to thank Rob for the very strong position that he leaves the company in, and his contribution to the group over the years, and personally like to thank Rob for a very productive 6-week handover.
I'm sure he's only a phone call away. I'm sure I'll take him up on that phone call over time. I look forward to building on this legacy and the underlying strength of the group, both here in Australia and across the globe, and indeed, to working with many of you in this room in the coming years. Thank you very much, and I'll hand, hand back to the chairman.
Thanks, Paul.
Thanks, Rob.
Thanks, Paul. That concludes the business of the day, and I will now close the annual general meeting, subject to the finalization of the poll. The B Class meeting of the Ricegrowers Limited will start at 11:30 here in Leeton. For those of you joining us online, please note the B Class meeting will be broadcast on the same link as the AGM. Please note the results of the AGM will be announced, announced on the ASX and posted on the SunRice investor website. Thank you for your attendance today. We'll be back at 10:30, and then we'll, we will start the B Class meeting. Oh, sorry, did I say 10:30? I do apologize. Yeah. At 11:30. Sorry.
We'll, we'll have a break now, and we'll encourage you to go and enjoy yourselves for another 20 minutes when you join us back. Thank you. Thank you, everybody. We'll be commencing the B Class meeting in a couple of minutes. If you would all mind taking your seats, we need to commence at 11:30. Thank you. Thank you. If you could all take your seats, and we'll get underway. Thank you. We'll be starting in about 30 seconds. Thank you. It is now 11:30. Thank you. Good morning, and welcome to today's B Class Meeting, Ricegrowers Limited. It's 11:30 AM, and I have been advised by the company secretary that we have a quorum and declare the meeting open. Please note the important notice and disclaimer on the screen.
This can also be found within the presentation lodged on the ASX and the SunRice investor website. I realize most of you are joining us from the AGM held earlier this morning, but for those of you who haven't met me, my name is Laurie Arthur, your chairman. I'd like to reiterate how pleasing it is to be here in Leeton today with our growers and shareholders, and I also extend a warm welcome to those of you joining us via the live webcast. Seated at the head table with me today are Rob Gordon, who officially stepped down as Group CEO and a director of the SunRice at the conclusion of the AGM today. We have asked Rob to remain at the table to respond to any questions from shareholders about financial year 2023.
Dimitri Kourtellis, our Group Chief Financial Officer, and Kate Cooper, our Company Secretary. Our other directors are also here, and I ask them to stand as I mention their names. Deputy Chair, John Bradford.
Good morning.
Luisa Catanzaro.
Good morning.
Dr. Andrew Crane.
Good morning.
Ian Glasson.
Good morning.
Ian Mason.
Good morning.
Julian Zanatta and newly appointed director, Melissa De Bortoli. I'd also like to acknowledge Dr. Leigh Vial, who did not seek re-election and whose term concluded at the end of today's annual general meeting. I'd also like to thank Jeremy Morton for standing for re-election in the grower director elections. Whose term also concluded at the end of today's annual general meeting. As I mentioned in the AGM, today is Rob's last day as managing director and group CEO, following his impressive almost 12-year tenure. We will farewell him formally later in the meeting. The SunRice Group's new Group CEO, Paul Serra, is with us today. I ask him to stand. Welcome, Paul. Paul addressed us at the end of the AGM. With us are the President of the RGA, Peter Herrmann, and Executive Director of the RGA, Graeme Kruger.
I also particularly welcome all our growers and shareholders. In terms of today's agenda, Kate will recap on the procedural matters next, before we conduct the formal business of the meeting. Thank you, Kate. Oh, sorry, no. Shareholders as a whole will be given a reasonable opportunity to ask questions or make comments about the management of the company during question time and answer time. Once the results of today's meeting are known, they will be announced on the ASX and the SunRice website. I confirm that I am holding undirected proxies in my capacity as chairman of the meeting, and I will vote those proxies in favor of each resolution. I will vote all directed proxies in accordance with the directions provided by shareholders. None of the other non-direct executive directors will be voting undirected proxies on this resolution.
I'd now like to hand over to Company Secretary Kate Cooper, who will explain how to vote and ask questions during today's meeting. Thanks, Kate.
Thanks, Chairman. Voting today will be by way of poll. The resolution in the notice of B Class meeting is only able to be voted on by B Class shareholders. Resolutions 1 and 2 are ordinary resolutions, which require a 50% majority of votes cast to pass. We will share with you the proxy and direct voting results before you vote. Please note voting will close once Link Market Services has collected the voting cards at the end of today's meeting. As communicated in the notice of meeting, online proxy and other forms of voting ahead of today's meeting closed at 11:30 A.M. on Monday. B Class shareholders present at the meeting here today are, however, able to cast their votes using the voting card they received during registration this morning.
Before we go any further, I need to check that everyone present at today's B Class meeting is holding either a voting or admission card. B Class shareholders and their proxies, attorneys, and representatives will use the white voting cards for today's resolutions. B Class shareholders who are not voting at the B Class meeting, for example, in joint holdings, should be holding a blue non-voting admission card for this meeting. A Class shareholders who are not also B Class shareholders are not able to vote at today's meeting and should be holding blue non-voting cards. Visitors have been issued with red admission cards and are not able to ask any questions today. Does anyone not have a card? A representative of Link Market Services will conduct the poll as Returning Officer. At the end of today's meeting, the Link team will collect your voting card.
If you have to leave after the poll is opened but before the end of the meeting, please leave your voting card in the poll box on the registration table. I should note that if you have previously voted by proxy, your votes cast here today will override your previous proxy direction. As the Chairman noted, there will be time for questions from shareholders. However, as with all shareholder meetings, I ask you to confine your questions or comments to the matters under consideration today. If you have any questions or comments relating to the long-term incentive award for the incoming Group CEO, please ask your questions or make any comments during discussion of resolution number one. If you have any questions or comments relating to the one-off retention award for the incoming Group CEO, please ask your questions or make your comments during our discussion of Resolution 2.
If you have any general comments or questions about the management of the company, please ask your questions or make your comments during the general question and answer time. In order to provide shareholders as a whole a reasonable opportunity to speak today, I ask that you initially limit the number of your questions or comments to two. If time permits, we may allow you to ask further questions or make further comments once other shareholders have had an opportunity to speak. I note shareholders who were unable to attend today's meeting were able to submit questions in advance, as outlined in the notice of meeting. These questions will be responded to first, before we open the floor to questions from shareholders present with us today in Leeton.
For those shareholders who'd like to ask a question or comment at the right time, just a reminder to hold up your white or blue card and wait for a microphone. Please also state your name for the room. Thank you. I'll now hand back to the chairman.
Thank you, Kate. As the formal proceedings are about to commence, I will declare the poll on the resolutions open. As Kate's just mentioned, for the purpose of voting, each B Class shareholder or their proxy, attorney, or representative will have received one white voting card. B Class shareholders are invited to place an X in the relevant for, or against, or abstain box for the resolution under consideration. Resolution 1. As outlined in the notice of meeting, we are seeking B Class shareholder approval for the grant of the group's CEO long-term incentive, or LTI, award under the SunRice Group LTI scheme, Sun Shares. The LTI award is designed to create long-term value for the company and our shareholders. The LTI is an equity-based plan, whereby eligible participants are allocated rights that vest over a three-year term. Subject to performance period applicable to Mr.
Paul's LTI award is 3rd of July, 2023 to the 30th of April, 2026. The board has determined the performance conditions that apply to the rights and has selected hurdles that are aligned to the group's strategic objectives and financial performance. The performance conditions for Paul are structured around maximizing grower returns, value creation for investors, strategic growth, and people metrics. The LTI award is a significant component of the group CEO's remuneration package and designed to reward performance that is in line with the performance of the company and returns for both classes of shareholder. Accordingly, the board recommends shareholders vote in favor of this resolution. Kate, are there any comments or questions relating to the long-term incentive award for the group CEO submitted in advance?
Yes, Chairman. Our first question is from Peter O'Connor, who asks, "Why are we being asked to approve a large number of B Class Shares, 117,000, with AUD 750,000 as a sign-on payment for the new CEO, especially since he has not worked for SunRice to earn the benefit being requested?
Thank you. Thanks, Peter. I'd like to invite Ian Glasson to answer that question. Ian, of course, is the head of our Remuneration Committee.
Yeah, thanks, Peter. It's very much standard practice, and indeed, if you look at last year's report, this has been part of our ability to hire key employees. We're hiring people out of senior positions, senior roles, where there is already some retention in place. There's a very additional part of that process to provide some compensation. We've importantly done in a way that provides retention components. Rather than just paying out a lump of cash, we've done that in terms of shares, with a very small tranche, about one third that vest after a year, and the balance held for two years before there's any vesting. By which time, we'll then move into our normal long-term incentive scheme to have this continued incentive to be retained.
It's also part of a, of a scheme where we are required under ASX to ensure that directors and senior management have skin in the game, and that's a very important part of the consideration. Hope that helps answer your question.
Thanks, Ian.
Thank you.
Kate, our second question?
Yes, Chair, thanks. Our second question is from, also from Peter O'Connor, and he's asked: "Should there be a limit that applies to the issue or grant of shares to the CEO and other executives, so that their benefits do not dilute the value of other B Class Shares or the dividend paid to B Class shareholders?
Thank you. Ian, if you could answer that question as well. Thanks for the question, Peter.
Yeah, partly, I guess, part of that answer was previously, but as in our shift to the ASX, we're absolutely needing to comply with the expectations of proxy holders and investors. That expectation today is that all senior management will have a significant part of skin in the game. In fact, most people are insisting on a minimum of at least 12 months' salary to be held. As to dilution, if, if it works, if you look in the case of Rob, you look at what the share price was when he started his first issue. Today, even though there's a substantial grant of shares, the shares have gone up, that's what we wanted to achieve. We want to achieve growth through increase in share price.
We want the CEO to be focused on the alignment with the shareholders, and that's been very much part of the REM strategy.
Thank you, Ian. I'd like to now invite comments or questions relating to the long-term incentive award for the CEO from shareholders present with us today. Any further questions? Thanks, Peter.
Thank you. Peter O'Connor from Coleambally. The reason for putting those 2 questions, Laurie, is the number of shares rather than the principle. Now, just by way of comparison, besides having a few shares in SunRice, I've got a few in a couple of other companies.
Yep.
One of them is Fortescue Metals. Fortescue has a shareholder base of 3.1 billion issued shares.
Yep.
a capital backing through those shares of AUD 65 billion.
Mm-hmm.
SunRice has got about AUD 450-odd million in share issue and about 66 million shares.
Yep.
Now, this is not a reflection on, on the performance of the, the going or the coming in CEO. It's just a comment.
Yep.
Rob's share issue as part of his performance adds up to a total available of around about 550,000 shares, which when you can work that out as a percentage of the total shareholding, is 0.8% of the entire base of shareholding in SunRice.
Yep.
Which will be the equivalent, at current dividends, of AUD 250,000 per year until he's in the ground, and it goes to his family, or he sells the shares. Whichever way you want to look at it.
Yep.
If the same formula is applied.
Yep.
You're looking very young, Rob. If the same formula of 0.8 going to the CEO were applied to the CEO of Fortescue Metals.
Yep
... they would be given, as part of their performance, shares issued to a total of 248 million shares with a value of AUD 500 million, sorry, a value of AUD 5.1 billion and an annual dividend on the shares of over AUD 500 million. I think that would be considered by the shareholders of Fortescue to be excessive.
Yep.
I think the SunRice board, while the ASX has an expectation that you will have the upper executives and the directors with skin in the game, they don't want that much skin that the shares in the company are being transferred to the management in large proportion compared to the number of shares on issue. There's two questions I think need to be asked by the board on anything that they are doing is performance issue of shares. The first one is: if the shares were to be purchased off the ASX for the equivalent dollar value to get the number of shares that you want, could those shares be purchased in a period of 15 minutes to 30 minutes? The answer for Fortescue would be yes, for 117,000 shares.
For SunRice, it would be no. It would take days to weeks to get that because the volume of shares is not there in trade. The second one is: if the amount of shares being put up were to be purchased from the existing shareholder base through the ASX, would there be a material impact on the value of the shares as they were being purchased? Would it push the price up because of the sheer number being purchased compared to what is available? I think in the case of SunRice, that would be yes. If those two questions come out with a no first and a yes afterwards, perhaps the amount of shares being put in as performance bonuses, while expected by the ASX to be there, might be considered to be a bit overly generous in a smallish company.
Even though we think we're big, we're not compared to BHP, Fortescue, Commonwealth Bank, and companies like that. I'm not against having skin in the game. I just want a little bit of the game left for the shareholders after another 50 CEOs go through.
Thanks, Peter. I'm gonna get Ian to answer that, and I'll make a comment after Ian's made some comments. Thank you for the question.
Thanks, Peter. I think what you've rightly pointed out is the distinction between, you know, what is a sensible LTI scheme and the issue about the liquidity of the company. I won't go into that, and that's something that perhaps Dimitri or Rob might want to comment on around liquidity, since it's not a personal issue. That's, that's the challenge, and we're well aware of the lack of liquidity in SunRice stock, and that's the point I think you're, you're dealing with. In the meantime, we are conscious of that, but we're also conscious that we can sensibly deal with share issues in line with the ASX expectations. The long-term challenge is how do we improve liquidity and capitalization of the business? Perhaps I can then defer back to Laurie.
Yeah, thanks. Thanks, Ian. When we, when Rob indicated he'd like to, stand down or, or retire from SunRice, that was quite a few years, 2 years ago, he very generously extended for us. One of the things I think we've all got to be aware is there's, there's not a local market for CEOs, there's an international determination to get the highest talent. When you look at Rob's performance over the last 12 years, that's an example. If you get the right person to head up your company, the results can happen. I believe in, in Paul's case, you know, after an extensive international search, we've got the right person here. It wouldn't surprise you that people of Paul's caliber and Rob's caliber, the international market for CEOs is considerable.
The board has the view that having the right CEO in place is absolutely fundamental to the success of this company, and there is a very active market there. Those, those issues you bring up, Peter, we, we certainly consider those aboard, as a board, and I think one of the issues you have highlighted is the, the issue around liquidity, which is one of the things that certainly Paul's mentioned to me, and, and we've had extensive discussions around that. That's one of the issues we need to solve with the company. We knew that when we went to the ASX, that it would be a, a, a longer-term grind to, to get our liquidity up. It's certainly a primary focus for the company. So, so thank you for those comments.
Look, Rob, because you're not personally, would you just like to make some comments around liquidity? Nothing else, but just improving the liquidity of the company.
Yeah, thank, thanks, Chair. I guess liquidity is one of the issues with regard to the share price. Certainly, when we listed on the ASX and intended to raise some capital, we intended to improve liquidity in the share, in the shares. As a consequence of us anticipating drought, we didn't want to give new shareholders a drought experience as their first experience in SunRice, and as a consequence, we didn't raise, raise that, raise that extra capital. We also didn't need it at the time. What has happened is that there is very low trading volumes, and I don't really think that the, the trading volumes and liquidity is a, is another piece of data, but I don't think it particularly relates to being able to attract and retain talent.
One of the challenges I think we face is: how do we get more liquidity, attract more capital? Because the whole point of going to the ASX was to be able to get liquidity into the business, capital into the business, on a stock exchange that was well-priced, and not have to rely on keep coming back to our grower shareholders to raid their balance sheets to grow the total business.
Over time, I anticipate that we will need to tap the market so that we can keep building a resilient business of great scale, which then can do all of the things that we need to do, compete against the multinationals, ride through the droughts even more effectively than we are now, and therefore, it's the benefit of A and B Class shareholders. I think the liquidity challenge is something I wish I'd been able to address more fulsomely, but I think it's gonna be something for the board and Paul Serra to address in the coming years.
Thanks. Thanks, Rob. Any other questions? Thank you. We'll now move on to the vote for this resolution by way of a poll. The valid proxy and direct votes for this resolution are on the screen. B Class shareholders, if you hadn't or haven't already done so, please cast your votes for Resolution 1 on your white voting card. Thank you. I think you can see those up on the screen. Are you able to see those up on the screen? It's a little bit awkward. Thank you. Resolution 2. The second and final resolution relates to a shareholder approval for a 1-off grant of rights to the company's Chief Executive Officer, Mr. Paul Serra, under the SunRice Group Retention Scheme.
The award will be delivered in the form of rights to B Class Shares and in 2 tranches to further support the alignment of the group CEO remuneration and shareholder interests. As outlined in the notice of meeting, the rights award cover the period from July 3rd, 2023, to April 30th, 2025, and is subject to Mr. Serra's satisfactory performance and ongoing employment with the SunRice Group during the period. B Class Share rights were selected because they create share price alignment between Mr. Serra and shareholders, but do not provide the full, full benefits of share ownership, such as dividend and voting rights, unless and until the retention rights vest and are exercised and B Class Shares are awarded. The board recommends that B Class Shareholders vote in favor of the resolution.
Kate, are there any comments or questions relating to the one-off retention award for the CEO?
No comments or questions in advance.
Right. Thank you, Kate. I'd like to now invite comments or questions relating to the one-off retention award for the group CEO from shareholders present with us today in Leeton. Any questions on that specific issue? Thank you. We'll now move on to the vote of this resolution by way of a poll. The valid proxy and direct votes for this share, for this resolution are on the screen. B class shareholders, if you haven't already done so, please cast your vote on Resolution 2 of your white voting card. Thank you. That concludes today's formal matters. Please remain seated, but hold up your completed voting cards, and a representative of Link Market Services will collect them from you. Now collect the cards. I believe that those who wished to vote in the poll have now done so.
If there is anyone who has not yet had their completed voting card collected by Link Market Services, please raise your hand. Okay. I believe that Link has now collected all the voting cards at today's meeting. Accordingly, I will now close the poll. As I mentioned at the start of the meeting, we will now consider any questions or comments from shareholders about the management of the company. Kate, have we received any general comments or questions about the management of the company submitted by shareholders in advance?
Nothing in advance, Chairman.
Good. Thanks, Kate. I'd like to now invite any general comments or questions about the management of the company from shareholders present with us today in Leeton. If not... That concludes the business of the day. I will now close the B Class Shares meeting, subject to the finalization of the poll. The results of today's meeting will be announced on the ASX and posted on the SunRice investor website once available. Finally, I'd like you all to join me to acknowledge the extraordinary contribution that Rob Gordon has made to the SunRice Group and the Australian rice industry more broadly. He has made an enormous impact as Group CEO of SunRice over more than a decade, and I wish him all the best in his retirement.
I'd also like to say it's been an absolute pleasure to work with Rob, and Rob's been an integral part of the board and his, his guidance for me, et cetera, has been incredibly important. I just want to congratulate you, Rob, on an enormous contribution, so we give you all the join. Thank you again for your attendance and participation, particularly for the, to those shareholders who attended both meetings. For those of you here in Leeton, we invite you to join us for refreshment. I wish you a good day. Thank you.