Good morning, everyone. My name's Elizabeth Bryan, and I'm the Chairman of Virgin Australia Group. I'd like to welcome you to the 2019 Annual General Meeting of Virgin Australia Holdings Limited. Before we begin proceedings, I'd like to acknowledge the traditional custodians of the land, Turrbal and the Jagera people, and I'd like to pay my respects to their elders, past, present, and emerging. I note that we have the necessary quorum, and I declare the meeting open. As a matter of courtesy, I'd like to ask that everyone makes sure that their mobile phones are off, especially down here in the front row. Turn them off or put them on silent, if you wouldn't mind, for the meeting. Let me now introduce you to your CEO and Managing Director, the Non-Executive Directors, and the Company Secretary.
On the stage with me today, way across there is Paul Scurrah, our Chief Executive Officer and Managing Director, and sitting next to him is Sharyn Page, our Company Secretary. The other directors are sitting in the row down here in front of me, and I'll introduce them in turn, and perhaps you might stand up so people can recognize you for later. Let me start with Trevor Bourne, who's an Independent Director, and Trevor is Chair of the Safety and Operational Risk Review Committee. Next is Mark Chellew, an Independent Director and Chairman of the Remuneration Committee. Sitting next to him is Ken Dean, an Independent Director and Chair of the Audit and Risk Management Committee. Sir Angus Houston is an Independent Non-Executive Director. Judith Swales is an Independent Non-Executive Director.
Good morning.
Warwick Negus is a Non-Executive Director nominated by Virgin Group. Marvin Tan is a Non-Executive Director nominated by Singapore Airlines. Ray Gammell is a Non-Executive Director nominated by Etihad Aviation Group. Mr. Chiping Xing is a Non-Executive Director nominated by Nanshan Group. Unfortunately, Mr. Hou Wei, who's nominated by the HNA Group, is unable to attend today's meeting due to overseas commitments, and he has extended his apologies to you. Mr. Du Ming, his Alternate Director, is here today.
Good morning.
I'd also like to introduce John Wigglesworth, and Trent Duvall, who are partners from our auditor, KPMG, and they are sitting just in the second row behind you. John has been our lead audit partner for several years, including the recent 2019 audit. He's here with Trent today to respond to any questions you might have relating to the 2019 audit. In accordance with the legal requirements for auditor rotation, Trent has replaced John as KPMG's lead audit partner for the 2020 financial year. I'd like at this moment to take the opportunity to thank you, John, for your contribution, for your professionalism, and for your insights over your term as our auditor. Thank you. Before we move on to the formal part of the meeting, I'll give a short address, followed by a presentation from our CEO and Managing Director, Paul Scurrah.
Let me begin my Chairman's address to you by saying that the 2019 financial year was challenging for our business. The external environment was challenging, and it clearly demonstrated that we need to do more to increase the resilience of our business. In terms of financial outcomes, the group delivered an underlying loss of AUD 71.2 million. At the statutory level, including restructuring costs, accounting adjustments, impairment, the business reported a loss of AUD 315.4 million. These results are very disappointing for your Board, for the management team, for employees, and of course, for you, our shareholders. The Board acknowledges that these losses have been ongoing. This year, we have made a change at the CEO level. The appointment of a new CEO was a critical one for the Board, and our focus was on ensuring the person who stepped into that job had a strong ability to improve our business.
That person was Paul Scurrah, who has a proven track record of driving profitability in businesses. We set him a clear mandate to return the company to a profitable position, the board is very pleased with his early decisions. In his first week in the role, Paul was faced with the Boeing 737 MAX issue. He worked quickly to defer the MAX order, which not only provided a longer timeline for the Boeing 737 MAX delivery, it also deferred a significant amount of capital expenditure. We were very pleased to see how fast he acted to deliver a positive outcome. He was able to turn his attention to the organization. He restructured the executive leadership team and enhanced accountability and created a simplified structure with reduced complexity.
The renewed executive team, who are in the room with us this morning, are high caliber and possess capabilities and experiences to drive change and inspire the organization through its next phase. He announced a program to remove 750 roles from the workforce, a difficult but necessary decision that ensures the size of the team matches the scale of our operations. The group also undertook a fleet capacity and network review and is making progress on its full review of all our suppliers. Most importantly, Paul has been leading a comprehensive review to clarify the group's focus and drive profitability, and he will share his focus with you shortly. Paul, welcome to your first AGM. I'm sure the shareholders are going to enjoy hearing from you very shortly. Let me move now to other important matters. This year, we continued to deliver excellence in terms of safety and customer satisfaction.
Safety is the underlying imperative of our business and will always come first. In terms of customer experience, there have been a number of achievements over the past year. Virgin Australia was the most reliable major airline in the country for departures and the least likely to cancel a flight. We know on-time performance is the biggest deliverer of customer satisfaction, and this is something we should be very proud of. Virgin Australia was placed fifth in the AirlineRatings.com Top Airline Awards globally. It won the world's best cabin crew by AirlineRatings.com, and it was awarded a five-star rating by the Airline Passenger Experience Association, putting us in the top 9% of airlines worldwide based on our passenger feedback. Velocity Frequent Flyer won best redemption ability in the Middle East and Oceania, an incredibly important measure for our loyal Velocity customers.
These achievements are testament to the hard work of the Virgin Australia Group employees. Let me move to sustainability and to our community contribution. For all companies, there is a wide customer and stakeholder concern with sustainability issues. For Virgin, as it is for all major companies, climate is top of mind. Technological change to reduce the aviation industry's impact is underway, it will take time. Right now at Virgin, we're working to manage our impact in three ways. First, we are more efficient with fuel. Our group-wide approach to fuel efficiency has reduced our fuel consumption by nine million kilograms or 28,000 tons of carbon per annum. This, they tell me, is the equivalent of planting 420,000 trees. In August, we became the first local airline to install split scimitar winglets to reduce drag on the wing.
They have saved more than 160,000 kg of fuel and reduced carbon emissions by around 115 tonnes per aircraft, per year. Second, one of the most promising opportunities for airlines to reduce our emissions remains low carbon alternative fuels. In 2019, we also worked with partners to deliver the country's first trial of sustainable aviation fuel at Brisbane Airport. More than 700 flights flew with low-carbon sustainable levels of fuel. Finally, we continued to improve our carbon offset programs. These support important projects with Greening Australia, the Tasmanian Land Conservancy, and the South East Arnhem Land Fire Abatement. To date, Virgin Australia and Tigerair have offset more than 550 tons with these programs. In addition, we're continuing to reduce waste across our network through a number of initiatives.
We've improved the sustainability of our in-flight product, through our partnerships with OzHarvest, donated a significant amount of food and beverages to people that are in need or where the food would have otherwise gone to waste. We also remain focused on our role as a corporate citizen and continue our community programs. We work with a number of community partners, making a difference to Australians dealing with serious illness, with hardship, and mental health challenges. A highlight was operating a special charter for the Starlight Children's Foundation, Starlight recipients, and their families on the occasion of that organization's 30th anniversary. We're Starlight's official wish-granting partner and have helped grant more than 1,200 wishes since we began. Importantly, Virgin has also been there to support communities impacted by natural disasters, including support for rural families impacted by drought, through food relief and fundraising.
These contributions reflect Virgin Australia's commitment to be an active member of our community. These efforts will continue. Now to the board. I've reported changes previously. There has been ongoing renewal of the board this year. We have an exceptional depth of talent in our directors, some with deep commercial experience, others with strong knowledge of aviation and the technical side of our business. In terms of the Independent Directors, we welcome Sir Angus Houston. He has given us some unique insights from a very distinguished history in aviation. I'm delighted also to welcome Judith Swales. She has some very deep experience in digital and customer roles. There were some changes to nominee directors for our major shareholders. We welcome Ray Gammell, who's the nominee Director of Etihad Aviation.
We welcome Hou Wei, who's joined us as a Non-Executive Director nominated by HNA, and Mr. Du Ming as Alternate Director for Mr. Hou. The changes to the board follow a number of directors stepping down, including Mark Vaile, Sam Mostyn, Mr. Xiang Qi, Lo Jiang, and Robin Kamark I extend my sincere thanks to all of our outgoing directors and on behalf of the board and our shareholders for their counsel and commitment to the organization. This morning, you'll have the opportunity to hear from our new directors standing for election as they introduce themselves and share some detail about their skills and experience. As Chairman, I'm confident we have the right diversity of skills and experience to guide our company through its next phase. In closing, I want us to remember the important contribution of our business.
Air travel plays a critical role in Australia, socially and economically. Virgin Australia transports more than 25 million passengers a year, providing important competition and choice for consumers and ensuring that our market is not a monopoly. In this sense, it is vital for travelers and the economy for our business to have a strong future. This strong future must be underpinned by a profitable business. A strong future enables us to continually invest in our product and in our consumer experience. It means we have solid and sustainable earnings base on which we can grow. It delivers greater value to our shareholders. It's a future your board, management, and the group's employees continue to pursue. To all of our shareholders, thank you for your support and commitment to the Virgin Australia Group.
Importantly, also, I want to acknowledge and thank everyone in Virgin Australia Group for their effort and commitment. Many of them are the face of our business, and our success relies on the exceptional customer experience they provide. To my fellow directors, thank you for your contribution, for your guidance, and for your counsel. I'll now invite Paul to provide further detail around the key focus areas of the group. Thank you. Paul?
Thank you.
Thanks, Elizabeth, good morning and welcome to our team members on either side of the room, the people that work in our management team, our board, and importantly, all shareholders. It's an absolute pleasure to speak to you for the first time as the group's new CEO. Since joining in late March, I've spent time getting to know our business and our people. We run a strong airline with an excellent safety record, great people, and exceptional customer experiences. However, I've made no secret that I see room for improvement financially. Since I started, we've taken immediate steps to turn a great airline into a great business. To do this, we are reorienting the focus away from market share, revenue growth, and network growth towards profit, cash flow generation, and return on investment. There is a great opportunity.
Notwithstanding the current softness in the market, we operate in what is fundamentally a very strong and attractive domestic aviation market. Australia has enjoyed long periods of economic growth. It's categorized by long distances between major cities with high population concentration and little alternative for air travel. This makes routes between Sydney, Melbourne, and Brisbane, in particular, some of the busiest routes in the world. In fact, three of the top 30. It's led to steady passenger growth, with a cumulative annual growth rate of 3.5% in domestic passenger numbers since the year 2000. Geographically, we're also very well-positioned to capitalize on a new golden era of aviation. International passenger numbers to Australia are increasing, driven by a growing middle class in nearby China, India, and Indonesia. We already have a strong position in a good two-player industry that is growing.
In this great market, we run a great airline. We now carry more than 25 million passengers a year. We provide access to more than 450 destinations with a network of strong airline partners. We have 10 million members in our award-winning loyalty program. We have a relatively young fleet with an average age of 8.7 years, and we now generate AUD 5.8 billion in revenue. With a great market and a great airline, we have every reason to be successful. To do that, there are a number of immediate focus areas that will drive us to profitability. One, responsible capacity management. Two, a relentless focus on revenue quality. Three, a very tight focus on cost management. These are the ingredients that will help us succeed in turning our business into a profitable position.
Of course, we will do this with an unrelenting focus on safety and delivery of the great Virgin experience people know and love across all of our brands. What have we done? Since I started in March, we've taken immediate steps to increase this focus and the discipline. First, as mentioned by Elizabeth, we took the opportunity to defer the Boeing MAX order. Given we have a relatively young fleet, it gives us the opportunity to push capital expenditure down the track and maximize our young fleet age. We also made changes to the order, which gave us access to the superior economics of the MAX 10. Second, we moved to a simpler organizational structure with single and clear lines of accountability. We renewed the executive team who are charged with maintaining our number one focus on safety, but with a greater focus on profitability and customer experience.
Third, we announced a rightsizing program that will remove 750 roles from the company and save AUD 75 million a year. Fourth, we're doing a review of all suppliers, including airports and aircraft lessors, targeting AUD 50 million in annualized savings. Fifth, a fleet network and capacity review that will provide a laser focus on profitable lines of flying. Given capacity management is a key lever, we've already adjusted our capacity downwards year-to-date by 1.5%, and we have a further announcement today that we'll speak to shortly. Sixth, we're absolutely thrilled to be buying back the Velocity business and bringing it back under the airline. Velocity, with its 10 million members, is a very important part of our future. It's an attractive cash-generating growth business.
Once the acquisition is complete, we will again distribute 100% of the cash flows of Velocity to the Virgin Australia Group. This acquisition will enable AUD 20 million in synergies. It also allows us to move from a very successful member acquisition phase to one focused on improving the engagement and earnings quality of those 10 million members. The deal is essentially self-funding. The interest on borrowings will be paid through the increased distribution, along with the AUD 20 million of synergies. In addition to these six initiatives, at the same time, we've invested time doing a deeper review of our company and our business. Coming into the company six months ago, I had a pretty good idea of where I wanted to take things as the new CEO, but that thinking needed validation. We've been working to understand our customers and what drives our earnings.
This will see us focus on a number of further improvements. Moving forward, you'll see us further capitalize on our core earnings engines, being Virgin Australia's domestic business and Velocity. These businesses are the major source of our profit. Our domestic business is then supported by our complementary and strategically important businesses, our low-cost carrier, Tigerair, and our international business. Tigerair complements our offer and allows for customer and route segmentation. Our international business leverages our virtual global network and our strong strategic alliances to drive traffic into our domestic business. It also gives Velocity members international redemptions, which help us continue to attract new members. In line with our focus on responsible capacity management, today we've announced a series of changes from our network and fleet review. They result in at least a 2% reduction in group domestic capacity in the second half of the 2020 financial year.
Some of these announcements are about getting the balance right between Tigerair and Virgin Australia. There are many instances where we have both aircraft and both brands operating on the same routes at the same time. For example, we're looking to focus Virgin Australia on routes that have a business and leisure combined orientation, and we're also looking to refocus Tigerair flights on key holiday destinations. Other changes will see us exiting uneconomic routes and selecting more profitable routes to fly. On this note, today, we are announcing the suspension of Melbourne to Hong Kong. This route has continued to underperform in line with the political landscape, and we feel this destination is best served through our Sydney service. Excitingly, we have also announced our Brisbane to Tokyo route, which is a great opportunity to a growing market.
From a fleet perspective, we will remove five aging aircraft in line with these changes. Two A320s will come out of the Tigerair fleet and three Fokker 100s from our regional business. Flying to the right destinations with the right customer demand and the right size fleet will improve our financial performance. From a customer perspective, you are going to see us focus on delivering the Virgin DNA in everything we do. A great customer experience is something we are famous for, and we want to be even more famous for it. We have a very attractive business to the corporate sector, which we will continue to focus on. We will continue to have a strong focus on the large and important leisure market. We will do this through a balance of our premium and low-cost products, utilizing them on the right routes to capture the right market segments.
Both carriers will cater to the leisure market. With Tigerair, we are refocusing our low-cost carrier on leisure destinations that we know it is well suited to. This will really help us position both domestic brands for future success. Before I close, let me talk to the current market conditions. We are seeing continued softness in the market compared to a very robust first half last year. However, we are continuing to manage capacity very tightly. We are ensuring we're meeting market demand with the right capacity. We'll continue to be watching that with a laser focus to ensure that we keep the cost down during a challenging period. In closing, I've spoken about turning a great airline into a great business. I've spoken about reorienting this business from a focus on market share, revenue growth and network growth towards profit, cash flow generation and return on investment.
We will do that while reinvigorating the unique Virgin brand. We want to continue to focus on the things that are important, such as safety and on-time performance. We want to offer the best value to customers and retain our excellent customer satisfaction records by continuing to offer our unique customer experiences. We want to better manage our cost base by acting on the identified initiatives to strengthen Virgin Australia Group's overall profitability. I look forward to updating you on the progress. Finally, a note of thanks. First, to our board. Since being appointed, I've had the privilege of visiting all of our major shareholders, including Etihad Aviation, Virgin Group, Singapore Airlines, Nanshan, and the HNA Group. I am very grateful for the warm welcome that I've received and the diverse thinking that a global board of this caliber provides.
I'd also like to thank the Independent Directors for their guidance and support as well. I'd also like to thank the people of Virgin, for their hard work and contribution and for what you do to contribute to us being a fantastic airline. Finally, I'd like to thank you, our shareholders, for your continued support. Thank you.
Thank you very much, Paul. I'll now turn to the formal business of the meeting. The notice of meeting has been sent to shareholders, and I will take it as read. We have four items of business to be put to the meeting today. Three of them include resolutions requiring a vote. The items requiring a vote are the proposed resolutions set out in items two, three, and four of the notice of meeting. To assist with the efficient conduct of the meeting, I declare that each of those proposed resolutions is now properly before the meeting without the need to be moved when we come to the relevant item. After discussion on each of the proposed resolutions, I'll show the proxy positions for the relevant resolution on the screen behind me. This will be the proxy position as at 10:00 A.M. Brisbane time, Monday 4 November 2019.
This was the closing time for appointment of proxies. As outlined in the notice of meeting, each of the proposed resolutions will be put to a poll at today's meeting. The polls will be conducted at the end of the meeting rather than after each item has been discussed. If you need to leave before the end of the meeting, please ensure you lodge your completed and signed voting card at the registration desk outside the room. I declare the polls open on each of the proposed resolutions in items two, three, and four of the notice of meeting, and appoint Wayne Hopkins of Computershare to be the Returning Officer for the conduct of the polls. I give the Returning Officer power to appoint members of his staff and the staff of the company to act as agents in conducting the poll.
Purple cards are held by the shareholder proxyholder and give the holder the right to speak and vote. Yellow cards are held by a non-voting shareholder, that's used for joint holders, and give the holder only the right to speak. White cards are held by visitors and have no voting or speaking right, but the Chairman may exercise discretion to permit them to ask questions. Each shareholder or proxy who registered today and is entitled to vote would have received a purple voting card. Yellow cards have been given to non-voting shareholders who have the right to speak at the meeting. Should you wish to ask a question at the appropriate time, please raise your purple or yellow card and one of our team members will be at the microphone to help you. You should then identify yourself as a shareholder or proxyholder and state your name.
Please note that only shareholders and their representatives are permitted to raise questions during the meeting. All questions are to be addressed to me as Chairman. The first item of business concerns the receipt and consideration of the financial report, the directors' report, and the auditor's report for the company for the year ended 30 June 2019. These reports are included in the company's 2019 annual report, and I present the reports to the meeting. A printed copy of the annual report was sent to those shareholders who requested a copy, and an online copy is available at our website. Copies are also available at the registration desk. There is no requirement to pass a resolution on this item. During this item, shareholders and their representatives may ask questions about and make comments on the various reports and on the business operations and management of the Virgin Australia Group.
You may also ask questions of the company's auditor during this item relating to the auditor's report, the conduct of the audit, and other related matters outlined in the notice of meeting. I ask that questions on other agenda items be deferred until we come to those items. I now open item one for discussion. Are there any questions or comments? Yes.
My name's David Teague. I'm a shareholder and a frequent flyer in most respects. I was pleased to see in the annual report, and hear in your address that flight cancellations are at a minimum. For a customer experience, there is nothing worse than being abandoned in a foreign city, meaning Sydney- late on a Thursday night, trying to find accommodation. This occurred to me last November, and I won't say what I was thinking about 10:00 on the Thursday night while I was going from hotel to hotel trying to get accommodation. Now, we were given a form where we could claim AUD 120 expenses. The hotel I ended up at was AUD 360. Now, I filled the form, put all the details in, the ticket slips and everything, and sent it in.
A short time later, maybe a week or two, I received the whole lot back by email saying I should resubmit it to a different address.
No.
I submitted to the address that was on the form. This ensured over the next period of time, various questions, resubmissions, until I finally got paid in mid-January. I even offered to go down to head office to collect the payment. That really upsets the customer experience. I was speaking to the gentleman who was in charge of the Tigerair division a couple of years ago at this meeting, and he assured me there was no reason why refunds shouldn't be paid very promptly. Thank you.
First of all, let me say that I'm appalled to hear about your experience, that this is not the experience we wish to offer to our customers. It's an unusual experience for us to happen. I will have Paul and the team really look into this for you. I think Paul will catch up with you after the meeting just to get some more details to make sure that we understand what happens. We're so sorry that you went through that experience and that difficulty finding accommodation. It's not who we are, who we want to be, or what we offer our customers. We need to get to the bottom of it, sir, and we certainly apologize for the trouble that you've been through. Are there any other questions? Yes.
Hello. My name is David Cant. I'm a shareholder. I fly with the airline, and I'm very pleased every time I do. I've been a shareholder for a number of years. I think the share value is now at its lowest point. It's very encouraging to have a candid assessment of the problems that the company faces. I'd be interested to hear, and I know we live in an uncertain world and predictions are always fraught with difficulty, but it would be interesting to know by when you believe the company will be profitable and by what year the shares might have recovered perhaps half of the losses they've endured in the last five years. Thank you.
Okay. Thank you for the question. I think from a shareholder's point of view, it's a very important question to ask us. It's not, of course, something that I'm able to respond to or able to predict at this stage or at any stage. I'm going to ask Paul to join me on the lectern. Come across. It was my original intention to have him here close by my side for those kinds of questions, but somehow it got left out of the script for me.
Yes.
He has his own microphone. The question that you have put to us is the question that the board and the management team are determined to solve. It's the question that was behind our move to select a new CEO with the experiences that Paul has. It's a core part of the briefing that we have given him to make this airline profitable and sustainable in the long term. He has already spoken to some of the key actions that he's taking to start to get this movement going, and I'm going to use your question to give him another chance to elaborate on that. We can't give you timelines and we can't give you estimates, but we're more than happy to discuss the issues that Paul sees and the actions that he is taking to remediate them. Paul.
Thanks, Elizabeth. As Elizabeth said, we've elected not to give earnings guidance or an outlook. What I would like to focus on, though, is last year's results showed us that we have to become more resilient. We have to lower our cost base, and make sure that we are profitable when the headwinds that we saw in the last couple of years are coming at us. That gives us the opportunity to be profitable in the downturn, also gives us a chance to be profitable, very profitable in the upturn. What I'll turn my attention to here is what are we doing about that to make sure that we're in that position as soon as possible? That goes to the 750 headcount reduction or the AUD 75 million. The supplier review that we're doing that's targeting AUD 50 million in annualized savings.
Importantly, as I said before, capacity management and capacity constraint is a very, very important profitable lever, profit lever in the organization. With John MacLeod's appointment, our new Chief Commercial Officer, and responsible capacity management, we are planning on our yield and our revenue quality going up. It is about improving the revenue quality, reducing the cost, getting us into profit. The reason we choose not to give guidance on these sorts of things is there are some elements that are outside of our control that we mitigate the risk for. For example, last year, we wore AUD 158.8 million worth of fuel headwinds over and above what we were expecting.
We will make sure that all of the measures that we can control are in far better shape next year, and that will drive us to profitability as soon as possible.
I hope that gives you some indication of the seriousness with which we're taking your question, and the depth of our understanding of the issues you're raising. Any other questions? Yes.
Shareholder, David. I'm just going to relate one of my experiences and I don't need an apology. It's fine. I'm a frequent flyer. I'm just used to certain airlines and not particularly Virgin. I'm not having a go at anyone. We've had a couple of IT outings in Sydney over the past year. I'd just like a little bit of feedback of what you're going to do about that. Maybe a new IT manager, possibly. I fly a lot of remote sectors, Uluru, et cetera, like that. They're obviously a tourist-based sector. I was delayed. My baggage was delayed in Sydney through rerouting from Brisbane, Sydney, Uluru. My bags didn't make it for 24 hours. As I said, I don't want the apology, it's fine. I was issued with Qantas pajamas.
Is this good or bad?
Bad.
Bad. Okay.
Badly. If I can get some feedback from yourself.
Sure.
About, one, about the IT situation in Sydney, which has affected some shareholders, I'm sure. When something does go wrong, we don't offer Qantas pajamas. There's a little bit more feedback and we're actually looked after a little bit better. I'm not talking from a shareholder point of view. I'm talking more from a customer-
From a customer point of view.
frequent flyer point of view. In my aviation experience, which is through the Middle East for quite some years, I've always been looked after by the carrier, not given Qantas pajamas. It just doesn't sit right with me. I'm looking back as a reflection of the shareholder and thinking, they didn't even bother to have the right sort of toiletries for somebody who's lost their baggage.
Yeah
lost all their work equipment.
Sure
Let us know about what you think about that.
Yeah. Thanks, David.
Okay. Let us test Paul out on his knowledge of our customers and the service that we try and provide to you.
I think the first thing to point out is, I acknowledge that those incidents do happen. With a customer base of 25 million people, we're going to have some disruption. No airline can promise perfection because of many things outside of our control. Despite the fact that our customer satisfaction ratings are very high and improving, at which we're proud about, and we do have statistically more reliable data than our competitor. One thing we do know that we need to do better is disruption management. That's showing up in our data. We're okay. We're really good when things are going well. We're not as good as we need to be when things aren't going well. That's the point you're raising.
In my new structure, I've specifically created a role of the Chief Experience Officer, which is really about understanding the weaknesses we have in our customer offering and understanding how we improve on those. We're investing heavily. It's interesting you mentioned IT as well. Investing heavily on making sure that the digital offering that allows disruption management is actually there and in more of your control, so that we can do some of those things. Danielle, I know is sitting down there at the moment. She's also implementing far more real-time customer data. I don't just want to be told about when things go right. In fact, people can find me pretty easily, I've learnt, since I got the job to tell me when things go wrong, and it gives me no joy to see that happening.
I know we can't be perfect because there's things we can't control, like the weather. I do know we can be much better in the space you're talking about. That is a big focus of what Danielle's got in her future.
Thank you. Thank you for your question. Do we have any other questions? Yes.
A shareholder, Noel Levy. My question is relating to, on the balance sheet, you've got cash of AUD 1.7 billion. It's a lot of cash. I realize that for airlines, for purchases and leases, you need a lot of cash. However, now you're going to spend AUD 700 million on this Velocity buyback, which, of course, you sold for AUD 350 million, I think. First of all, that's a sad reflection on the company, the directors over the years. Some of the directors are from different airlines. They're still from the same airlines. They were there when the decision was made. It's very poor decisions on the part of some of those directors.
The second thing is, because of this cancellation that you've been able to do with these other aircraft, has this been a kind of a plan B to spend AUD 700 million in buying back these Velocity benefits? To me, like, it does seem as far as a change of plan because you don't have to get these airlines. They might still be available. It doesn't mean they're there indefinitely. Will you have a shortage of cash then? Because it'll be down to AUD 1 billion. Seeing you If you're going to borrow the money, fair enough, I suppose you still.
No, not-
It's just the question is why are you going this way?
Okay. Thank you for that question. Let me deal with the first part of it, and I'll ask Paul to pick up on the second part of your question. The Velocity buyback. You're correct in the numbers that you've quoted. Velocity was sold down to, we sold 30 odd percent, of it at a time when the company needed the cash. That has served us very well. It was an important move at the time. Velocity has grown very significantly over the intervening years. We are comfortable that we've bought Velocity back at fair value, so the difference between what we sold for and what we've purchased is actually the growth in Velocity. We understand now that we're more able, if we own 100% of Velocity, to use it for the benefit of the airline, and to integrate the two businesses in a much better and more profitable way.
As Paul mentioned to you a minute ago, the money we borrowed to buy Velocity is covered by the income stream that will come from owning 100% of Velocity, and it will enable us to better strategically position the company. Overall, we think that it has been a very positive move for the organization to acquire it, and we're comfortable that the price that we paid is actually the true value that has been generated in Velocity over the years, since we sold it. Paul, with that, can you have a go at the second part?
I can. Without going into too much detail, I think the important point to note is that our cash balance is complemented by a capital raising or debt raising we just went through in order to pay the AUD 700 million for Velocity. Our cash balance will still be, I think, where's Keith, AUD 1.3 or four. Where are you, Keith? Yeah, AUD 1.3 to AUD 1.4 after that transaction. We carry a far higher cash balance because we are a single-B airline. That allows us to be well-prepared should there be any industry downturn for whatever reason. To the point about aircraft, when they start coming online, there's always many different options on financing those aircraft, and that can be done in a way that you don't have to dip into your cash balance. That's an important thing for us to keep an eye on.
We do have a very young fleet. It's 8.7 years of age, which gives us a lot of flexibility around continuing to push out those orders. We're in pretty good position as far as that is concerned. On the Velocity acquisition, I can't comment on what was done prior to my arrival, but it is important for airlines to have full control and ownership of their frequent flyer program for many reasons. This one is similar to what Air Canada's just done with Air Miles in buying that back. A South American airline did a similar thing. It's a very important part of our business. Data is becoming more and more valuable and important. In my view, it was very important to buy that back. As I mentioned in my speech and as Elizabeth said, it is self-funding through the dividend stream coming in and the synergies.
There's also a big upside in how we use that 10 million person database to market.
Yes.
Can I have another comment?
Another one?
Yes.
Yes, sir. Of course, sir.
This relates to, I used to fly Virgin until on one occasion I did make a phone call to make a reservation and at that stage there were charges for using credit cards and that, which is AUD 7 or AUD 8. The person that I spoke to, they said there was a AUD 30, I think, service charge. I said, "I'm not paying that. I'll pay the other." They wouldn't reduce it. I said, "Oh, well, I'm not making any reservation." I rang up Jetstar, they're the opposition, and they had exactly the same thing. They'd changed as well at the same time. Neither of them had that charge previously.
I said to them, "Well, I'm not paying it." They accepted that, and they just made my reservation, and I paid my normal credit card charge, or whatever it was, which I accepted. Since then, I've been flying with Jetstar. I thought before, because I come up from Sydney this time, I thought I'd check out this time and see how Virgin are going. I'm on the internet, but I don't use it for financial actions. I made my telephone call, or I went to the telephone directory to check up Virgin, but I couldn't find the telephone number in the telephone directory for Virgin. That surprised me. I couldn't make the call.
I was in the library and I just checked on the internet there for I said, "I'll try Tiger." There was a number for Tiger on the internet. I found out it was a Brisbane number. I rang there and I was put through, and it must have been a call center, and the first thing they said was, "There's a call center charge of AUD 30." I said goodbye. I went back to Jetstar, and I came up by Jetstar. To me, maybe it's the law that you have to tell customers straight away, but it's very off-putting. It's very off-putting to me because, it was Tigerair Australia, and I thought there'd be reasonably cheap fares. To be hit straight away, first thing they said was, "There's a service charge, a call center service charge.
Okay. Thank you.
Not happy about it.
No, I can understand that. I think I'm going to ask one of our executives to follow up with you after the meeting and perhaps make sure that we clearly understand the issues for you and see if we can help you with some of those problems. Danielle? Anything else? Yes, sir.
Yes. My name's Ed Kobrzynski, and I've been a shareholder since the beginning, and the price has dropped a fair bit, but that's another story. Now, I've got a complaint. I come back through L.A. on October the seventh, come back to Brisbane, October the ninth, and I tell you what, you get the bum steer around there. We were given on our boarding pass gate 45. We're going up the escalator, and they said, "You're in the wrong place." Anyway, they were telling us to go to terminal three at L.A. Takes you about half an hour to get down there, but that's another story. Anyway, then they said, "No, you're in the wrong place. Go down there." We go down there, back to terminal three again. This is starting to piss us off, me and me friend.
We finally found it's gate 133 upstairs, not gate 145. I don't know how that got on there. We finally got up there. Chap was very nice. He let us through. He's a shareholder, and he said, "In America, the share is only worth AUD 0.10," which is pretty low. What I was thinking of, besides the stuffing around and all that, and you got to get people down there who know what they're talking about, because you talk to a lot of people down there, they don't know what they're doing. You ask, "Where do you go to get your flight?" "Not sure." You've got to get people who know what they're talking about, not idiots. To me, if people like me, I'm a shareholder, okay, I'll give it a go.
People who aren't shareholders, they catch it the first time saying, "Virgin giving us the crap." Well, you're not gonna catch them anymore. You've got to improve your staff there, so they know what they're talking to people about. That's a big problem.
You should try and fix that up. As I said, another thing is with Velocity, I think if you're a shareholder, you should be able to get preferences to go into the flights. Also, Brisbane, you opened up that new thing where you've got to pay AUD 60. I reckon if you're a shareholder, you should be able to get that for free. If you don't get any dividends, you've got to get some fringe benefits. That's my story.
All right. Thank you for those comments, and we'll certainly note those views of yours. Any other questions? Yes.
My name's Simon Graham, a shareholder, avid fan of Virgin Australia. Thank you. Thank you, Paul, for coming on board. In the last 18 months, I'm just a small shareholder. I'm not a big player in the scheme of things. Me and my family fly Virgin. We only fly Virgin. I made that assessment based on the Velocity program. Just some feedback for you there. I'm so much of a fan that every flight attendant receives a Caramello Koala when I fly.
Do they?
Just
No, you hadn't told us about that.
All of your staff, all of your flight attendants here today receive one also. That's just a very small token gift from me to you, and to your team. If there are any other frequent flyers here, do something nice for someone else. It's really, really simple. My question, though, is I'm a bit nervous in an audience like this. I've never been to an AGM.
Sure
before. Has there been any thought by the board to expanding the domestic shareholder base? I appreciate that there are large airlines that hold a key stake in the airline. Has there been thought to more of a domestic shareholder base, either by public offer or otherwise? Has there been any thought to an employee share scheme? Importantly for me, I have an accounting background, but not by any stretch of the imagination at a corporate level, but any thought for director remuneration and/or share bonus or incentive? I noticed in the annual report that there is only cash offerings based on short, medium, long-term incentives. I don't know. I'm a shareholder. I put my money at risk in the equity of the company, as do we all. I just think that would be a really good Australian thing for the board to consider.
If they have considered that, great. I appreciate your comments. If not, as a small shareholder, may I encourage you to perhaps consider that in some way.
Okay.
Thanks.
Well, thank you very much for those suggestions. The board's been here, all here and all heard the suggestions. As a board, we keep capital structure of our organization always under review. At the moment, our focus is to the things that Paul and I have been talking about today, which is ensuring the long-term profitability of this company and the long-term sustainability of this company. Once we've achieved that, then as you would understand, that gives us more flexibility to think a little more widely about other ways we might deal with our shareholders and structure our business. First task is the return to long-term profitability. That's right at the front of our mind. Thank you for your interest. Thank you for the Koala chocolates and thank you for your continued patronage of Virgin. We value you very much. Anything else? Okay.
That lets you sit down for a while, Paul. Thank you. Let me now move to the items of business, where we have proposed resolutions we want to put to the vote. Before we consider and discuss each proposed resolution, I'd like to remind you that the vote on each resolution will be conducted by a poll at the end of the meeting. Our Company Secretary will provide more information on the polling process at the end of the meeting. The next item of business is item two, which concerns the election and re-election of directors. We have six Non-Executive Directors standing for election or re-election at today's meeting. Five of these directors have been appointed by the board since last year's Annual General Meeting and are required to stand for election by shareholders at this meeting in accordance with the company's constitution.
The sixth director, Marvin Tan, is standing for re-election today as it's three years since he was elected by shareholders. We'll start with item 2A on the agenda, and this concerns the election of Ray Gammell as a Director. The proposed resolution for Ray's election is shown on the screen. Ray was appointed to the board as a director on 20 December 2018. Ray is the shareholder representative Director nominated by Etihad Aviation Group, a major shareholder of the company. Ray is also a member for the Audit and Risk Management Committee and the Remuneration Committee. Some additional details on Ray are set out in the notice of meeting. I'd now like to invite Ray to say a few words in relation to his election.
Right. Thank you, Elizabeth. Good morning, ladies and gentlemen. It's a pleasure and a privilege to be here standing for election as a Non-Executive Director. I was appointed, as Elizabeth said, to the board last December as the nominated representative of Etihad Aviation Group. I've been a member of Etihad's executive management team for almost 11 years, and I'm afraid to say I have over 40 years of international business experience across both the corporate sector and the armed forces. Etihad, for those of you who don't know, is the national airline of the UAE. It's a huge strategic importance to the nation of the UAE. My time there was spent mainly in the people, talent, culture space. My specific role at Etihad today is leading on the equity partner strategy, whereby I'm responsible for making sure we maximize our strategic alliances around the world.
Bringing strategy and organization together, I recognize the importance of the culture of the organization and how important the culture of Virgin is to its future. Having operated in different global industries, I can say with some conviction that the airline industry is an extremely tough business. It requires determined, agile, and expert leadership. In this context, I believe my experience enables me to make a valuable contribution to the board's role in overseeing the strategy, the management, and performance of the Virgin Australia Group. Finally, Virgin plays an integral role, as we've heard, in the Australian aviation industry and is a key partner to Etihad. If I were to be elected, it would be a privilege to continue to serve on the board, represent the interests of all shareholders, and I welcome the comments and inputs from shareholders today in this challenging but exciting new chapter.
You've heard from new management, new leadership at the top of the company, you've heard, and I believe, in a new determination to refocus the organization on market success and shareholder returns. Thank you very much.
Thank you, Ray. Are there any comments or questions on Ray's proposed election? Okay, the proxy position on this resolution is now on the screen. That brings us to our next director standing for election, which is Mr. Hou Wei. The proposed resolution for Mr. Hou's election is shown on the screen. Mr. Hou was appointed to the board on 28 May 2019 and is the shareholder representative director nominated by HNA, a major shareholder of the company. Mr. Hou is a member of the Safety and Operational Risk Review Committee. Some of Mr. Hou's additional details are set out in the notice of meeting. As I mentioned earlier, Mr. Hou is unfortunately not able to join us today. Mr. Hou has asked his Alternate Director, Mr. Du Ming, to say a few words on his behalf. Mr. Du is also known to us on the board as Damon.
I now invite Damon to address the meeting.
Good morning. It is a pleasure to address the meeting on behalf of Mr. Hou Wei , who is standing for election as a Non-Executive Director on the Virgin Australia Group board. Mr. Hou was appointed as HNA Group's nominated representative on the board in May this year, and he appointed me to act as his alternate at the same time. Mr. Hou is an experienced aviation executive. His roles with HNA Group have included executive Chairman of Hong Kong Airlines International Holding Limited, president of Capital Airlines, vice president marketing for Hainan Airlines, and marketing director of Hainan Airlines. From these executive-level roles with HNA Group, Mr. Hou has deep industry knowledge and strong leadership experience to bring to the Virgin Australia Group board. I request the support of shareholders in the election of Mr. Hou to the board at today's meeting. Thank you.
Thank you, Damon. Are there any comments or questions on Mr. Hou's proposed election? Okay, we now put up the proxy position on the proposed resolution for you to see. The next director standing for election is Sir Angus Houston. The proposed resolution for Sir Angus' election is shown on the screen. Sir Angus was reported to the board on 12 December 2018. He's a member of the Audit and Risk Management Committee and the Safety and Operational Risk Review Committee. Some additional details on Sir Angus are set out in the notice of meeting. The board considers Sir Angus to be an Independent Director of the company. I now invite Sir Angus to say a few words in relation to his election.
Thank you, Elizabeth. Ladies and gentlemen, good morning. I'm standing for an election as an independent, Non-Executive Director on the Virgin Australia Group board. I thought it was probably important just to say a few words about my background. Actually, I beat you by 10 years, Ray. I started my aviation career 50 years ago as a Royal Australian Air Force cadet pilot. In my younger years, I flew extensively on many different types of aircraft, and I guess I rose through the ranks and eventually became the Chief of Air Force. Very privileged to hold that position for four years, and in that position, I was the ADF Airworthiness Authority. I had responsibility for the biggest and most diverse fleet of aircraft in Australia. I might add, through that period, I was the first Chief to enjoy a period of duty where there were no fatal aviation accidents.
I'm very pleased to say that that trend has continued to the current day. The Air Force has gone over 20 years without a fatal accident. When I think back to the beginning of those 50 years, it's a marked change from where we were in the '70s and '80s of the last century. In the Air Force, I led major cultural change. I also developed the strategic plans that have given us the wonderful fleet of aircraft, fifth-generation aircraft, that the Air Force operates today. After Chief of Air Force, I was honored to be the Chief of Defense Force for six years. I had command of 90,000 people. I was involved very much in a period of high operational tempo, a lot of crisis management. A lot of risk management, because we conducted 58 operations and deployed 65,000 people on those operations.
More recently, I've been Chair of Airservices Australia. At Airservices Australia, the board decided to embark on a reform program that took AUD 170 million a year out of the business and returned Airservices Australia to profit, and indeed, recently, gave rebates to the two major customers, Qantas and Virgin. I'm also a chancellor of the University of the Sunshine Coast, and we've initiated a new way of governance there, which makes the university council run much more like a business board. As you've probably seen from my bio, I'm involved in a lot of other areas, and they're usually not-for-profits and charities, and I must say, I enjoy that part of my role. I have extensive strategic leadership, governance, and people skills, and I have a lot of experience in acquisition and sustainment of complex platforms, particularly airplanes.
I have also worked extensively with international and national leaders in government and non-government roles. I'm delighted to be here today, and I would be deeply honored to be elected as a director of this exciting company on its new journey. If elected, I undertake to work collaboratively with my board colleagues and management to achieve robust business outcomes and safety always, for the benefit of all the shareholders that support this company so well. Thank you very much.
Thank you, Sir Angus. Are there any comments or questions on Sir Angus's proposed election? The proxy position on the screen, please. The proxy position is there for your information. The next director standing for election is Judith Swales. The proposed resolution for Judith's election is shown on screen. Judith was appointed to the board on 29 May 2019, and she's a member of the Remuneration Committee. Some additional details on Judith are set out in the notice of meeting. The board considers Judith to be an Independent Director of the company. I now invite Judith to say a few words on her election.
Thank you, Elizabeth, and good morning, everybody. You're certainly a tough act to follow, Sir Angus. Thank you for the opportunity to address the meeting regarding my election as a director on the Virgin Australia Group board. I was delighted to be appointed as an Independent Non-Executive Director on the Virgin Australia Group board in May of this year. I have extensive experience on listed company boards, having been a non-exec director for DuluxGroup and for Foster's. From my executive leadership roles in companies such as Fonterra, Heinz Australia, Goodyear, and Angus & Robertson WH Smith Australia, I also understand the intricacies of managing large, complex organizations. These roles also gave me extensive experience in driving consumer and customer strategies, particularly in the new world of digital and data.
This experience provides me the skills and expertise to play a valuable role in the oversight of the airlines group strategy, its direction, and its management. As an independent member of the board, I think I bring a unique experience, and perspective to board discussions. I'm firmly committed to representing the interests of all shareholders in the journey that we're on. It would be an honor to be elected as a Director, and if I were to be successful and given this opportunity, I would continue to work with my fellow directors, with the management team to foster strong business outcomes, to focus on profitability and the growth for the benefit of all shareholders. Thank you.
Thank you, Judith. Are there any comments or questions on Judith's proposed election? Okay, let's have a look at the proxies that we've got in on Judith. Again, for your information. The next Director standing for election is Mr. Chiping Xing. Chiping is known to us on the board as Kevin. The proposed resolution for Kevin's election is shown on the screen. Kevin was appointed to the board on 27 September 2019. He is the shareholder representative Director nominated by Nanshan Group, a major shareholder of the company. Kevin is also a member of the Safety and Operational Risk Review Committee. Additional details on Kevin are set out in the notice of meeting. I now invite Kevin to say a few words in relation to his election.
[Non-English content]
Good afternoon. I would like to thank the Chairman for the opportunity to address the meeting. I'm pleased to be standing for election to the board of Virgin Australia Group as the nominator representative for the Nanshan Group.
[Non-English content]
I have a responsibility for overseeing a range of business activity for Nanshan Australia, including wool trade, merger acquisition, property development, agribusiness. I have also been involved in Nanshan Australia's other business area, such as hotels, aviation, and funds management.
[Non-English content]
From this experience, I believe I have the skills and the business judgment to make a valuable contribution towards the complex strategic, financial, and operational matters that are considered by the board.
[Non-English content]
It will be a privilege to represent the Nanshan Group on the Virgin Australia Group board and to work with my fellow directors to ensure that this airline group to provide strong competition within Australian aviation market.
[Non-English content]
Thank you very much.
Thank you, Kevin. Are there any comments or questions on Kevin's proposed election? Okay, if we can have the proxy position on the board, again, for your information. We now turn to the next item, which concerns the re-election of Marvin Tan as the director. The proposed resolution for Marvin's re-election is shown on screen. Marvin was appointed to the board on 1 January 2016. He's the shareholder representative director nominated by Singapore Airlines, a major shareholder in our company. Marvin was last elected by shareholders three years ago at the 2016 annual general meeting. Some additional details on Marvin are set out in the notice of meeting. I now invite Marvin to say a few words in relation to his re-election.
Thank you very much, Elizabeth. A very, very good morning to all our shareholders, my colleagues on the board, the many members of the Virgin Australia family here today, and our other guests attending the AGM. I've served on the board of the Virgin Australia Group since July 2014. First as an alternate to Mr. Goh Choon Phong, before being appointed as a Non-Executive Director from January 2016. During this time, it's been a real privilege to work closely with Chairman Elizabeth Bryan, my fellow board members, and both John Borghetti and now Paul Scurrah. This is a significant and exciting time for the Virgin Australia organization, with Paul and his new executive team, together with the board's guidance, working very hard to chart and execute the next phase of the group's evolution and growth.
You've heard a lot of emphasis today on safety, the fantastic people at Virgin Australia, and notwithstanding the areas of for improvement we've heard today, a great customer experience. These are all the ingredients of a great airline, and the determination is there to make this a great business. I've been with the Singapore Airlines Group for over 20 years, serving in a range of different roles, such as Chief Executive of SilkAir, Singapore Airlines regional subsidiary, as a Board Director on Scoot Pte. Ltd., Singapore Airlines' low-cost arm, and currently as Senior Vice President for Customer Services and Operations for the parent airline. I believe that I have the knowledge and experience necessary to contribute to the Virgin Australia mission and to serve the group and the shareholders well.
I would be honored to be re-elected as a Director of the Virgin Australia Group and to have the opportunity to continue serving on the board. Thank you very much.
Thank you. Thank you, Marvin. Are there any comments or questions on Marvin's proposed re-election? If we can have the proxy position again for information shown on the screen. The next item of business, I've had some tall people up here, is the adoption of the remuneration report, which commences on page 22 of the 2019 annual report. The proposed resolution for the adoption of the remuneration report is shown on the screen. While the vote on the remuneration report is advisory only, it provides an important indication to the directors as to whether there are any concerns about the company's remuneration policies. Your directors are committed to considering any such concerns in terms of remuneration policies going forward. Are there any comments or questions on the remuneration report? Okay, thank you. We'll have the proxy position on the screen.
That now brings us to the final item of business, which concerns the allocation of an equity-based long-term incentive to our new CEO, Mr. Paul Scurrah. The proposed resolution for this item is shown on the screen. The board is seeking shareholder approval to allocate 50% of Paul's maximum long-term incentive opportunity for the period from his start date in March this year until 30 June 2020 in the form of equity-based performance rights. The performance rights would give the CEO a conditional right to acquire fully paid shares in the company if, and to the extent, that performance hurdles based on the company's relative and total shareholder return are satisfied over a three-year performance period. Further information about the performance rights, including the details of the performance hurdles, are provided in the notice of meeting.
The board considers that the proposed grant of equity-based performance rights will enhance the alignment between the CEO's interests and the long-term interests of all shareholders. Are there any comments or questions on the proposed grant of performance rights to the CEO? Yes.
Yes. It's a bit confusing. It says a long-term incentive scheme, it's awarded over one year between the 25th of March and the 30th of June 2020. That's not very long-term. People have complained about three years being not long enough for a long-term incentive scheme, this is the best I've seen. It's only long-term incentive scheme over one year. That's one reason I don't like it. The other thing is there's too much cash in this incentive scheme. I realize the chief executive wouldn't be all that keen in getting equity at the performance of the share price. There is an overemphasis on cash payments for the executive. Sometimes the short-term is cash, in this case, 50% go for cash as well in the long term.
This is the most generous cash incentive scheme that I've seen, and I would definitely not be in favor of it.
Okay. Thank you for those comments. Let me just clarify a couple of the points you made. First, it's a long-term incentive scheme. It is awarded to him for the period that's shown on the screen. In fact, this scheme vests over three years. It's normal in Australia for long-term incentive schemes to vest over a three or four-year period. Paul's is over three years. The comment that you make on 50% of it being equity-based, is a correct comment. Normally, in a public company, it would be mostly equity-based. In this company, we provide some cash component because of the difficult liquidity available in the share market for the executives. That is unusual. I accept your comments.
Thank you for your interest in it, but that's the way that we've been able to design a scheme that both aligns to the shareholders and is attractive for an incoming CEO. Are there any more questions? Okay. If I could have the proxies up on the screen. Again, there are the proxy votes and how they stand. As we've concluded the discussion of the last item of business, we'll now conduct the polls on the proposed resolutions set out in items two, three, and four of the notice of meeting. Our company secretary, Sharyn Page, will shortly explain the procedure to be followed in the polls. Ladies and gentlemen, thank you for your attendance here today, and thank you for your interest in the company. I declare that the meeting will close once the polls have been conducted, subject to counting and declaration of the poll results.
After the votes have been counted, the results of the polls will be announced to the Australian Securities Exchange and published on our website. Once you've lodged your votes, you're invited to join the directors and members of the executive management team outside for refreshments. Thank you, Sharyn.
Thank you, Elizabeth. We'll now conduct the polls on the proposed resolutions set out in items two, three, and four of the notice of meeting. You are entitled to vote on the polls if you are a shareholder or a proxy attorney or representative of a shareholder, and hold a purple voting card. If you believe you're entitled to vote, but you have not been issued with a purple voting card, please raise your hand and a Computershare representative will assist you. Please note that voting exclusions apply to some of the proposed resolutions in items three and four , as outlined in the notice of meeting. If the voting exclusions apply, please ensure that you abstain from voting on items three and four where required. To vote in the polls, you need to complete the reverse side of the purple voting card.
This lists each item of business being put to the vote. The proposed resolutions being voted on for those items are set out in the notice of meeting. If you are a shareholder, please place a tick or a cross in one of the boxes beside each item of business. If you wish to split your vote, please follow the instructions on the voting card. If you are a proxyholder, you will have received a summary of proxy voting forms with your voting card. This provides details of any directed and open proxies that you hold. Any directed proxies must be voted in the way that you have been directed. To vote as directed, all you need to do is sign the voting card and lodge it in a ballot box.
To the extent that you hold directed proxies, the boxes on the voting cards do not apply and will be disregarded if they are marked. If you are holding any open proxies, you will need to mark a box beside each item of business to indicate how you wish to cast those open proxies. When you have completed your voting card, please sign the card and place it in a ballot box. Please raise your hand if you require any assistance and a Computershare representative will help you. Please raise your hand if you require more time to complete or lodge your proxy voting form. Please make sure that you have signed your voting card before putting it in the ballot box. Okay. Thank you. All votes have now been posted. I now declare the polls closed.
After the votes have been counted, the results of the poll will be released to the ASX and published on our website. As Elizabeth mentioned, you are now welcome to join us for refreshments in the adjoining bar area. Thank you very much.