Ladies and gentlemen, good afternoon and welcome to the 25th Discovery Limited Annual General Meeting. I would like to start this meeting by observing a minute's silence for one of our independent non-executive directors, the late Tito Mboweni, who passed away on the 12th of October 2024. Tito had a strong and long-standing history with the Discovery Group and always gave us his unwavering support. Tito made many important contributions in and to the board and its committees, and also in his capacity as the chairperson of the Discovery Life and Invest and Discovery Insure boards. It was a privilege and a pleasure working with him. He will be greatly missed for his intellect, integrity, conviction, energy, and sense of humor.
In addition to his contribution to the Discovery business, he had an immense impact on South Africa as the former Minister of Finance and Reserve Bank Governor, playing an instrumental role in shaping the country's economic development and labor policies. He leaves behind an incredible legacy. Our sincere and heartfelt condolences to his family. Now, please, may I ask you to join me in a minute's silence? Thank you. Proxies representing 74.78% of the issued share capital of the company have been received. Given that more than three members are present, we have a quorum, and I therefore declare this meeting duly constituted. I declare this meeting open as the notice convening the meeting has been in your hands for the prescribed period since the 23rd of October. I further propose that the notice be taken as read.
With respect to clause 25 of the Memorandum of Incorporation of the company, I propose that we conclude the six ordinary and three special resolutions together with the advisory votes by poll. The AGM is being webcasted through the Computershare platform where you can ask questions as well as cast your votes. At this time, I would like to acknowledge the Discovery Limited board members who are in attendance. Of course, Adrian Gore, Barry Swartzberg, Christine Ramon, Deon Viljoen, Lisa Chiume, and Richard Farber, as well as the following board committee chairpersons who are available to answer any questions you may have: David Macready, Faith Khanyile, and Marquerithe Schreuder.
Before we proceed with the formal business of the meeting, I would like to make a few opening remarks on, firstly, the external environment in which we've been operating, secondly, the group's performance, and thirdly, the group's diversity and succession planning. With respect to the external environment and the economic outlook, the last year has seen considerable complexity across the markets that Discovery operates in. Global GDP growth was moderate, with uneven economic performance across regions, and despite inflation rates declining from the highs reached in previous years, cumulative interest rate increases heightened the pressure on consumers in many countries. In parallel, political risks increased as we progressed through what was the biggest election year on record, with more than 2 billion voters going to the poll. In South Africa, initial volatility driven by uncertainty around election outcomes subsided with the emergence of the Government of National Unity.
The GNU represents a significant point of inflection that brings inclusion and optimism. While risks remain in the South African market, we are encouraged by the green shoots of recovery that are emerging. The United Kingdom also held a general election that led to a change of government. Fiscal challenges accelerated the utilization of private medical insurance as backlogs in the National Health Service persisted, and in China, there were both macro and microeconomic challenges and growth constraints. Looking ahead, we expect the macro environment will continue to be characterized by increased uncertainty and complexity. In terms of the group performance, the group carefully and thoughtfully navigated the complexity I have just mentioned and focused on delivering strong growth in earnings, cash generation, and capital resilience. It created two composites with competitive advantage within each and entered a new promising phase of growth in the life cycle of the group.
This combined course of action has served us well, demonstrated by Discovery's financial performance, with normalized operating profit increasing by 17% and normalized headline earnings increasing by 15%. As of 30th of June 2024, our board comprised 13 directors, 10 non-executive and 3 executive. We have made major strides in increasing board diversity. This is reflected by female representation at board level at 46% against 18% in financial year 2020, and representation of Black directors at 38% as against 29% in financial year 2020. As we move into the next phase of development and growth for the group, our focus continues to ensure that there is an appropriate mix of required skills at board level, with an emphasis on Black and female representation. There are plans to strengthen the board with two additional Black directors coming over the next year. Let us move to the formal business of the meeting.
We will now transact the business of the AGM. Once again, I refer you to the notice of AGM published on 23rd of October 2024. This notice sets out in some detail the business to be transacted at this meeting, as well as the applicable procedures. I will take the notice as read. The voting will be opened until the end of the resolutions, and then we will take any questions, both verbal and written, for clarity purposes. The first order of business is a presentation of the annual financial statements. The summarized consolidated financial statements of the company are set out in Annex 1, pages 11 - 27. I will take these as read. The second order of business is the audit committee report.
The report of the Audit Committee activities during the period under review on matters which are within the mandate of that committee is set out on pages 3 - 9 of the annual financial statements and will be taken as read. The third order of business is the Social and Ethics Committee Report. The report of the Social and Ethics Committee activities during the year under review on matters which are within the mandate of that committee is set out on page 31 of the governance report and will be taken as read. We will now proceed to those items on the agenda which require to be voted on. The ordinary and special resolutions of this meeting are being moved by Mr. Stuart Cohen and seconded by Ms. Jackie Symons. We will now table the respective resolutions for voting.
I would like to propose that we do not take questions while I am proposing the resolutions, but that I allow the opportunity for questions after all the resolutions have been tabled and before closing the voting. For those preferring written questions, may I ask you to start submitting your questions now? This can be done by clicking on the Q&A icon, typing your question into the text box, and pressing send. For verbal questions, you will be granted an opportunity to pose them at the appropriate time. To move to ordinary resolution one, the appointment of the joint independent external auditors. These appointments are proposed by way of separate ordinary resolution. Ordinary resolution 1.1 that KPMG is reappointed as the joint independent external auditor of the company as nominated by the company's audit committee until conclusion of the next AGM, where Mr.
Mark Danckwerts as the individual registered auditor who will undertake the audit. Ordinary resolution 1.2 that Deloitte & Touche is reappointed as the joint independent external auditor of the company as nominated by the company's audit committee until conclusion of the next AGM, with Mr. Stephen Munro as the individual registered auditor who will undertake the audit. Thank you, and you may vote now. Ordinary resolution number 2, reelection of Ms. Monhla Hlahla. The resolution reads as follows. Ms. Monhla Hlahla was appointed by the board to serve as a director being and is hereby reelected by rotation as a director of the company. Ordinary resolution 2.2, reelection of Bridget van Kralingen. The resolution reads as follows. Ms. Bridget van Kralingen, who was appointed by the board to serve as a director being and is hereby reelected by rotation as a director of the company.
Ordinary resolution 2.3, reelection of Ms. Marquerithe Schreuder. The resolution reads as follows. Ms. Marquerithe Schreuder, who was appointed by the board to serve as a director, being and is hereby reelected by rotation as director of the company. Thank you, and you may vote now. Ordinary resolutions 3.1 - 3.5, election of the audit committee members. The directors being put forward to discharge the responsibilities of the audit committee are as follows. Mr. David Macready, Ms. Lisa Chiume, Mr. Sango Ntsaluba, Ms. Christine Ramon, and Ms. Marquerithe Schreuder. Sango will be appointed subject to her reelection as director pursuant to the ordinary resolution we've just spoken about. Similarly, Marquerithe would be appointed subject to her reelection as a director pursuant to ordinary resolution 2.3. The profiles of the directors standing for election to the audit committee are set out in Annex 2 on pages 28 - 31.
The resolution reads as follows. Resolve that the following non-executive director is hereby elected as a member of the Audit Committee from the conclusion of the AGM and the next AGM until the next AGM of the company. Ordinary resolution 3.1, election of Mr. David Macready. Ordinary resolution 2, election of Lisa Chiume. Ordinary resolution 3.3, election of Ms. Monhla Hlahla. Ordinary resolution 3.4, election of Ms. Christine Ramon. And ordinary resolution 3.5, election of Ms. Marquerithe Schreuder. Thank you, and you may vote now. Ordinary resolution 4.1 - 4.5, election of the Social and Ethics Committee members. The Social and Ethics Committee members being put forward to discharge responsibilities are as follows. Faith Khanyile, Monhla Hlahla, Christine Ramon, Dr. Ayanda Ntsaluba, and Ms. Zimkhitha Saungweme . Monhla will be appointed subject to her reelection as a director pursuant to 2.1 above.
The profiles of the directors and executive committee members standing for reelection to the Social and Ethics Committee are set out on Annex 2 on pages 28- 32. The resolution reads as follows. Resolve that the following non-executive director and executive committee members be and are hereby elected as a member of the Social and Ethics Committee from the conclusion of the AGM until the next AGM of the company. Ordinary resolution 4.1, election of Faith Khanyile. Ordinary resolution 4.2, election of Monhla Hlahla. Ordinary resolution 4.3, election of Ms. Christine Ramon. Ordinary resolution 4.4, election of Ayanda Ntsaluba. Ordinary resolution 4.5, election of Ms. Zimkhitha Saungweme . Thank you, and you may vote now. The detailed requirements for shareholders to give the board authority to issue any of the three classes of preference share have been fully disclosed in the notice of the AGM.
I do not propose to read out these requirements. It is proposed that shareholders provide requisite authority to the directors to issue up to 10 million A preference shares, 12 million B preference shares, and 20 million C preference shares by passing the following ordinary resolution number 5.1, ordinary resolution 5.2, and ordinary resolution 5.3. Thank you, and you may vote now. Ordinary resolution 6. I propose that any director of the company or the company secretary be and is hereby authorized to do all such things, sign all such documents, and take all such actions as may be necessary for or incidental to the implementation of the ordinary and special resolutions to be proposed at the annual general meeting convened to consider this ordinary resolution. Advisory votes.
In terms of King IV, shareholders of the company are provided with an opportunity to pass non-binding advisory votes on the remuneration policy and the implementation report. The vote allows shareholders to express their views on the REM policies adopted and the implementation thereof, but will not be binding on the company. Furthermore, King IV recommends the REM policy should record the measures the board commits to in the event that either the REM policy or the implementation report or both have been voted against by 25% or more of the voting rights exercised by the shareholders. Non-binding advisory vote 1, it is proposed to endorse the company's REM policy as set out in the REM report.
Non-binding advisory vote 2. It is proposed to endorse the company's implementation report as set out in the REM report, excluding the REM of the non-executive directors for their services as members of the board. Thank you, and you may vote now. Special resolutions. Approval of non-executive directors' remuneration. A broad inflationary increase and, where applicable, a market-related increase in fees is proposed for the next financial year. I propose that payment of the fees as set out on page 6 of your AGM notice for the year ended 30th of June 2024 be approved as the basis for calculating the REM of the non-executive directors for their services as members of the board for the financial year ending 30th of June 2025. Thank you. You may vote now. Special resolution 2.
I propose that the board is hereby authorized by way of a renewable general authority in terms of the provisions of the JSE Listings Requirements, the Companies Act, and as permitted by the company's MOI to approve the repurchase of its ordinary shares by the company and the repurchase of ordinary shares in the company by any of its subsidiaries. Upon such terms and conditions and in such amount as the board may from time to time determine, but subject to the MOI of the company, the provisions of the Companies Act and the JSE Listings Requirements where applicable. The restrictions that the JSE prescribes have been included in the notice of the AGM, and I will not repeat them here. Thank you, and you may vote now. Special Resolution 3.
I propose that to the extent required by the Companies Act, the board of directors of the company may, subject to compliance with the requirements of the company's MOI, the Companies Act, and the JSE Listings Requirements, each as presently constituted and as amended from time to time, authorize the company to provide direct or indirect financial assistance as contemplated in section 44 and/or section 45 of the Companies Act. The detail of the authority has been included in the notice of the meeting, and I'm not going to repeat this here. The authority shall endure until the forthcoming AGM of the company. Thank you, and you may vote now.
Ordinary resolutions 1- 6 contained in the AGM notice require the approval by more than 50% of the votes exercised on the resolutions by shareholders present or represented by proxy at the AGM, and further subject to the provisions of the Companies Act, the company's MOI, and the JSE Listings Requirements. Special resolutions 1 to 3 and the advisory votes contained in this notice of AGM require at least 75% approval of the votes exercised on the resolutions by shareholders, and further subject to the provisions of the Companies Act, our MOI, and the JSE Listings Requirements. We will now spend time just dealing with questions submitted on the platform in written form. Company secretary, do we have any questions?
We don't have any questions so far from the platform.
Okay. Let's move from the platform to the room. Are there any questions in the room?
Is there one question? Sorry. No? No questions. Okay. I think, as well. Oh, as there were no questions, we can move straight to closing the polls. I now hereby close the polls.
So we do have one question which just came through now. So if you can just open the line for us for the shareholder to post the question. There's two now. Good afternoon. You may pose your questions. Okay. They've decided to post them, Chair. So I will read them. There's a question from Nomsazi Banda. It's actually a comment. She says, "Thank you for the transformation and diversity commitments at board level." And she asks, "May we please see the same commitment at Exco level?" That's Nomsazi Banda on diversity and transformation.
Adrian?
Thanks for that question. Firstly, just to say that the company has set some pretty stringent targets around transformation.
We spent a lot of this year analyzing how we get there, and I think we're progressing well. The comment is well made at the Exco level. We understand that challenge, but it's something that is on our radar. The comment is taken very, very seriously. Thank you for it.
Okay. No more questions, Ayanda?
It looks like there's someone that's typing, Chair.
She's trying on the.
Yep. So yeah, maybe we can open the floor for any other questions from the floor.
Any other questions from the floor?
Chair, the question is here, and it comes from Chris Logan. So if you can, please just open the platform for him. He wants to ask a verbal question.
I have a question on the phone from the line of Chris Logan, Opportune Investments. Your line is open.
Thanks very much. Thanks, Mr. Chairman. Can you hear me?
Yeah, we can hear you.
Okay. Just before asking some questions, I'd just like to say thanks very much to all the value created by Discovery over the years. I've been a shareholder for many years, and it's great to see that it looks as if there's a lot more to come from looking at your Capital Markets Day very briefly. I'd like to address some questions relating to your REM policy. First of all, I see the minimum shareholding requirement was up from three times to five times for the CEO, which is a very positive development, even though I realize it's somewhat academic because of Mr. Gore's shareholding. But what motivated that change? Because traditionally in South Africa, shareholding requirements are pretty low. The bank's rule is three times, and South African requirements are very low compared to international benchmarks. So yeah, please, what motivated that positive change?
Okay. Let me pass to the chair of the committee. Faith, to you.
Thank you very much, Chris, for that question. The reason why we, as Discovery, decided to up that minimum shareholding requirement is that we've really received feedback from our rating agencies to stretch that. Also, just, I guess, given the nature of our business, so we've complied to that because we were already far above that minimum shareholding requirement. Anyway, thank you.
Okay. Thank you. Sure. I mean, I'm just asking because there's a wide body of evidence which links the shareholding requirements to performance globally. And for instance, leading companies globally often have far higher requirements than this. For instance, JPMorgan, the shareholding requirement of their CEO, Jamie Dimon, is 50 x his basic pay. And that filters down to the top tier of management. In the case of Discovery, our CEO is a founder.
Couldn't the shareholding requirement be pushed up a lot more and also the levels below that?
I think you make a point that I think we should certainly go back and look at. I think at this point, let us go back and look at what the market does both here and internationally. But we've got the question, and we'll log it, and we'll make sure that we follow up on it.
Yeah. I can just make the point to South African markets very low compared to dynamic markets like the States. And yeah, I'd happily supply you with some of the papers in that I've referred to because I think it's important from a long-term value creation perspective.
So that will be helpful. I think the U.S., as you say, is higher. The U.K. is lower.
So I think there's a mix. Let us look at this, put it in the round, and ask Faith to think through it.
Yeah. I would just add that,
sorry. I just wanted to mention also that we do receive independent advice to the remuneration committee on these matters and to find best practice and to ensure that we remain in line.
Yeah. But traditionally, the problem is South Africa is at a very low level. I mean, for instance, all the big banks are at three times compared to, say, a JPMorgan at 50 times. That's just one example. The South African is very distorted low. The most dynamic market in the world is the States, and there they recognize the value of these type of measures.
Your point is well made. We'll take it away and come back to you.
Okay. Thanks a lot.
And thanks very much for the opportunity to ask questions, and all the best going forward.
Thank you. Thank you for the questions, and thank you for your support of the group.
Chair, there are no more questions online. I'm not sure if we do have questions from the floor.
Let me close the poll now, and if I can ask the results of the voting to be disclosed. Can we scroll down just to make sure we see all the resolutions? Okay. I can confirm that all resolutions have passed. We've now come to the end of the proceedings, and I'd like to convey the board's great thanks and appreciation to all our employees for their hard work, their diligence, and for their exceptional commitment to serving our customers. All you do is highly valued by the board, and I know our shareholders.
I would also like to thank our non-executive directors for all your excellent support and challenge through complex and uncertain times. It is much appreciated. To Tito, may you rest in peace. You are hugely missed. On behalf of the board, I would like to extend my sincere appreciation to Adrian and the group executive team for their strong and ethical leadership and unwavering commitment and energy, and of course, for their delivery and for their resilience and for their delivery of impressive results. Finally, to everyone in attendance in person and online.