Murray River Organics : Remuneration Report

For personal use only

ABN 74 159 039 175

32 Crompton Way,

Dandenong South Victoria 3175

Phone: [phone]

Email:[e-mail]

Web: www.murrayriverorganics.com.au

28 January 2022

Remuneration Report

Ahead of the annual general meeting of Murray River Organics Group Ltd (ASX: MRG) (Company) on Monday, 31 January 2022 at 2:00pm (AEDT), the Company provides its preliminary Remuneration Report for information for shareholders.

Authorised for release by Graeme Fallet, CFO and Company Secretary of the Company.

Graeme Fallet

Chief Financial Officer

P: [phone]

E: [e-mail]

For further information please visit www.murrayriverorganics.com.au

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Murray River Organics Group Limited

Remuneration Report

For personal use only

This Remuneration Report details remuneration strategy of the board and the nature and amount of remuneration for Director's and Key Executives of Murray River Organics Group Limited ("Murray River Organics" or the "Company") and its controlled subsidiaries (the "Group").

For the purpose of the Remuneration Report, key management personnel ("KMP") include all Directors of the Board (executive and non-executive) and the Chief Financial Officer of the Group.

During the FY21 financial year overall financial targets were not reached, and any Short-Term Incentive payments to Executives have been made at board discretion. No LTI awards were granted during the year.

The KMP of the Group during the year ended 30 June 2021 were as follows:

	Period of Responsibility		KMP Position
Non-Executives
Andrew Monk	Appointed 24 January 2018		Non-Executive Independent Chairman
Stuart McNab	Appointed 15 May 2020		Non-Executive Independent Director
	Resigned 26 November 2020
Paul McDonald	Appointed 22 May 2020		Non-Executive Independent Director
Naseema Sparks	Appointed 9 June 2020		Non-Executive Independent Director
	Resigned 21 December 2021
John Maher	Appointed 30 November 2020		Non-Executive Independent Director
	Resigned 21 December 2021
Executives
Valentina Tripp	Appointed 16 April 2018		Managing Director and
	Resigned 15 January 2021		Chief Executive Officer (CEO)
Birol Akdogan	Interim 15 January 2021		Managing Director and
	Appointed 5 March 2021		Chief Executive Officer (CEO)
	Appointed 1 September 2020		Chief Financial Officer (CFO)
	Resigned as CFO 11 March 2021
Graeme Fallet	Appointed 11 March 2021		Chief Financial Officer (CFO)

Role of the Remuneration and Nomination Committee

Composition

In accordance with the Remuneration and Nomination Committee Charter, the Group has established a Remuneration and Nomination Committee consisting of at least three members, a majority of whom must be independent with an independent Chairperson who is nominated by the Board of Murray River Organics Group Limited. The Remuneration and Nomination Committee is currently comprised solely of Non-executive Directors.

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Murray River Organics Group Limited

For personal use only

Functions

The role of the Remuneration and Nomination Committee is to assist the Board by ensuring that Murray River Organics:

• Has coherent remuneration policies and practices which enable the company to attract and retain executives and Directors who will create value for shareholders, including succession planning for the Board and executives;
• Fairly and responsibly remunerate Directors and executives, having regard to the performance of the company, the performance of the executives and the general remuneration environment;
• Has procedures to evaluate the performance of the Board, individual Directors and executives on (at least) an annual basis;
• Has effective policies and procedures to attract, motivate and retain appropriately skilled and diverse persons to meet the company's needs; and
• Has succession plans for the CEO and senior executives

Further information about remuneration structures and the relationship between remuneration policy and company performance is set out below.

The Remuneration and Nomination Committee Charter, which outlines the terms of reference under which it operates, is available online atwww.murrayriverorganicsinvestors.com.au.

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Murray River Organics Group Limited

For personal use only

Remuneration Policy

The remuneration strategy of Murray River Organics Group Limited has been designed to align Director and executive remuneration with accretion of shareholder wealth and achievement of business objectives by providing a fixed remuneration component and offering specific short-term incentives (STI) and long-term incentives (LTI) based upon key performance areas affecting the Group's financial results. The Board of Murray River Organics Group Limited believes the remuneration policy to be appropriate and effective in its ability to attract and retain the best executives and Directors to run and manage the Group, as well as create goal congruence between Directors, executives and shareholders.

The Board's policy for determining the nature and amount of remuneration for Board members and senior executives of the Group is as follows:

• Executive remuneration has been reviewed by reference to the Group's performance, executive individual performance and comparable information from industry sectors and other listed companies in similar industries. The performance of executives is measured against agreed criteria and is based predominantly on the forecast growth of the Group's profits and shareholders' value. All bonuses and incentives are linked to predetermined operational and financial performance criteria.
• The Directors and executives receive a superannuation guarantee contribution required by the law, and do not receive any other retirement benefits.
• The Board strategy is to remunerate Non-executive Directors at market rates for comparable companies for time, commitment and responsibilities. The Board determines payments to the Non-executive Directors and reviews their remuneration annually, based on market practice, duties and accountability. In recognition of the adverse performance of the Company during FY21, the Non-Executive Directors agreed to reduce the board fees by 20%
• The maximum aggregate amount of fees that can be paid to Non-executive Directors is subject to approval by shareholders at the annual general meeting. The maximum aggregate amount of fees that can be paid to non-executive Directors as per last approval is $500,000. Fees for Non-executive Directors are not linked to the performance of the Group. In FY19 share options were issued to Non-executive Directors as remuneration for additional work undertaken as part of the capital raise dated 24 October 2018

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Murray River Organics Group Limited

For personal use only

Short Term Incentive ("STI") Plan

Valentina Tripp, Birol Akdogan and Graeme Fallet

For FY2021, Valentina Tripp, Birol Akdogan, Graeme Fallet and certain other employees as determined by the Board were entitled to participate in a cash-based STI Plan under the terms of their employment contracts, and in accordance with the terms of the STI Plan in place for FY2021.

The maximum amount that an Executive KMP is entitled to under the STI Plan is as follows:

• Valentina Tripp, up to 60% of Valentina's fixed remuneration (base salary plus superannuation); and
• As CEO, Birol Akdogan, up to 60% of Birol's fixed remuneration (base salary plus superannuation) As CFO, Birol Akdogan, up to 35% of Birol's fixed remuneration (base salary plus superannuation);
• Graeme Fallet, up to 40% of Graeme's fixed remuneration (base salary plus superannuation).

The table below sets out, in respect of Valentina Tripp, Birol Akdogan, and Graeme Fallet's entitlement, the percentage of their entitlement that will be paid on satisfaction of certain key performance indicators.

Measure	Entitlement to be paid
EBITDA before SGARA	50%
Cashflow Management	40%
Health and Safety	10%

Furthermore, at the Boards discretion Other Incentivisation payments up to 40% of Fixed Remuneration may be granted on the achievement of certain strategic and restructuring initiatives.

During the year the Board exercised its discretion and awarded Other Incentivisation payments to the Chief Executive Officer Birol Akdogan and Chief Financial Officer Graeme Fallet. The Board considered that while the EBITDA gateway was not achieved a discretionary payment was warranted following the restructure the Groups debt facility, sale of the Mourquong facility, and other corporate restructure initiatives. The CEO was granted a $88,000 bonus and the CFO was granted a $40,000 bonus payable at or after 30 November 2021. The CEO was also granted 222,222 shares at $0.18 per share which was the fair value at grant date. The shares are subject to shareholder approval. No STI awards were paid to Valentina Tripp.

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