SAN
30/01/2013 14:00
ADDRESS
REL: 1400 HRS Sanford Limited
ADDRESS: SAN: Sanford Limited Annual Meeting - Chairman's Address
SANFORD LIMITED
SUSTAINABLE SEAFOOD
30 January 2013
Chairman of Directors Jeff Todd's Speech
Sanford Annual Meeting
30 January 2013
The Directors of Sanford are pleased to present to shareholders their report
for the year ended 30 September 2012. A full account of the Board's work is
provided in the Annual Report but I want to highlight briefly the Board's
main points of focus through last year.
The Board is elected by Shareholders to provide strategic direction, strong
corporate governance and control of the Company's activities.
Our focus this year has remained on those three critical areas.
1 Leadership in strategic direction. The Company remains focussed on the
seafood and aquaculture business in New Zealand and internationally. Through
this past year the Board has continued to direct its attention to achieving
cost of capital returns on each of the Company's operations to achieve growth
in shareholder returns and share value. We acknowledge the challenges we
have faced in this task. While the Board accepts that the weak and slow
recovery of world markets from the Global Financial Crisis and the
historically high exchange rate of our dollar against the US dollar is the
new "normal", we have in this more difficult trading environment faced a
number of other issues which have proved to be a distraction from our
principal operating objectives. In the last financial year the Company has
faced difficult growing conditions for mussels in the Coromandel and the
withdrawal of one of our partners in that venture, an over-supply of salmon
depressing prices in some of our major markets, higher fuel costs, industry
issues with foreign charter vessels, a dry dock fire on board the Ocean
Breeze and US court action in relation to the San Nikunau. On the positive
side, continuing improvement in profitability of our Greenshell mussel
business in the South Island and improved market returns on a range of
products as a result of identifying more profitable channels to market have
to some limited extent offset unwelcome costs and losses faced in other areas
of the business. To the extent that last year's result was impacted by
significant one-off events, the result achieved by year end indicates the
Company is well placed to deliver improved returns in coming years.
Our Board and Management workshops this year have again emphasised the need
to obtain an adequate return on investment from every division and branch of
the Company and from every asset. In operational and investment activity,
the Board remains confident that the interests of shareholders, the Board and
Management are totally aligned.
2 Corporate Governance. Sanford expects the highest standards of corporate
governance and ethical conduct in all aspects of our business. We are proud
of our record in the sustainability of seafood for future generations.
Identification and mitigation, where possible, of business risks coupled with
the integrity of management systems and the quality and relevance of
reporting to the Board and to Shareholders are key responsibilities of the
Board. During the year we have reviewed the function and operation of our
Human Resource and Health and Safety functions. While the Board believes the
Company's systems and controls around employee health and safety are robust,
the Royal Commission on the Pike River Coal Mine Tragedy has highlighted the
need for regular review and assessment by the Board of proper standards of
performance. As a result, the Board has established a new Board Committee to
replace the existing Remuneration Committee. The new committee, known as the
Employment and Regulatory Compliance Committee will report to the Board on
statutory and other compliance issues.
During the year and consistent with corporate governance best practice, the
Board engaged the services of independent consultants to evaluate the
performance of the Board and individual directors. The results were
generally satisfactory and suggestions for improvement have been implemented.
Directors Fees - following last year's shareholders' endorsement of an
increase in Directors' fees to a total of $550,000 per annum, I wish to
report to you on payments made last year out of that pool and payments
proposed in the current financial year. As agreed at last year's Annual
Meeting, the Board restricted Board fees paid to $500,000 in total out of the
allowable $550,000 in recognition of the Company's less than satisfactory
performance in 2011. Given the 2012 results, the Board now confirms to
shareholders their intention to hold total fees payable in the current year
to the same level, $500,000. However, individual Board members' basic fees
will be increased marginally to levels reflecting market rates at May 2011
using fees available from the reduction in size of the Board. The total cost
to the Company will remain unchanged in 2013 at $500,000.
I am pleased to report that following discussions on this proposal with the
Chairman of The Shareholders Association, Mr John Hawkins wrote to me
confirming that the NZSA Board is comfortable with these arrangements. I
thank John for his understanding and support.
3 Succession Planning. Twelve months ago it was my great pleasure to
introduce to you Liz Coutts who joined the Board in June 2011 and Mark
Cowsill who was appointed to the Board in October 2011. Today, I am sorry to
inform you that our long-standing and respected director Mr David Anderson
has decided not to seek re-election at today's Annual Meeting which marks the
end of his current term. We are sorry to see David leave us and I will talk
further about David's contribution at the end of the meeting.
On behalf of the Board, I have three other matters I wish to share with you.
1 The first announcement I have relates to our esteemed Managing Director, Mr
Eric Barratt. Regrettably, after 15 years in the top job, Eric has decided
to retire from Sanford and has formally advised me and the Board of his
intention to do so. The Board accepted his notice of retirement reluctantly
but I am delighted to report Eric has agreed to assist the Board as it enters
into a process of international search for his replacement. Eric has agreed
to continue in his current role and subsequently as an independent advisor if
necessary, through the period of leadership transition until 31 December 2013
at latest. There is much to say about Eric and his contribution to Sanford
over many years. We will ensure that his retirement as Managing Director is
marked in an appropriate way and at an appropriate time and we will, of
course, keep shareholders informed of developments.
Eric, I'm sure you have the very best wishes for the future from all
shareholders as you step down from the demanding role of Managing Director at
Sanford after 15 years.
2 Timetable for next year. Today the board agreed that we will tighten the
timeframe for our annual reporting cycle so that will mean we will be able to
schedule next year's annual meeting prior to Christmas and at this early
stage we have tentatively scheduled the meeting for Friday 20 December 2013.
3 To say farewell to David Anderson.
He has been a strong contributor to the Company and the Board for many years,
joining the Board in 1982 and serving as Managing Director from 1991 to 1997.
David also held the distinguished positions of Deputy Chair of the New
Zealand Fishing Industry Board and President of the New Zealand Fishing
Industry Association. He was also a respected member of the Ministerial
Advisory Committee on Oceans Policy. David, your wisdom and knowledge of the
industry will be missed at the Board table and your experience and
understanding of our fishing fleet will be hard to replace. David had clear
views on the big issues at the Board table and was a valuable sounding board
for new initiatives. But David will also be long remembered by everyone who
worked with him at Sanford as a true friend who always took a personal
interest in each one as an individual. David, you will be missed.
End CA:00232443 For:SAN Type:ADDRESS Time:2013-01-30 14:00:01
