AfroCentric Investment Corporation Limited ($ACT)

Good morning, ladies and gentlemen and fellow directors. It is my pleasure to welcome you all to AfroCentric's 20th Virtual Annual General Meeting. I am Professor Anna Mokgokong, the Chairman of the AfroCentric Group. I also extend a welcome to our CEO, Gerald Van Wyk; our CFO, Thato Moloele; Bruno Fernandes, our Lead Independent Director and Chairman of the Audit and Risk Community. Dr. Nkateko Munisi, Chairperson of the Social and Ethics Committee; Alice le Roux, Chaperon of the Remuneration Committee and the rest of my fellow Board members who've joined the AGM. I further acknowledge the following individuals who are also in attendance. Lebohang Mpumlwana, the Group Company Secretary; Zola Desetti, our group audit partner from KPMG, and Don [indiscernible] representing our sponsors, Questco. As the Board reflects on the developments within the AfroCentric Group over the past year, we do so with clarity. As South Africa's leading health care administrators, our purpose remains unchanged, to enable accessible, affordable and quality health care. We continue to pursue this mandate through clinical excellence, operational discipline and strategic partnerships designed to improve health outcomes while containing costs. However, the environment in which we must deliver on this mandate has shifted materially over the past year. In the first instance, last week, the constitutional court had 2 significant legal challenges to the National Health Insurance Act. Focusing on whether parliament adequately considered public input during the legislative process. The outcome of this matter could have far-reaching implications for the future of the legislation. If the applicant succeed, Parliament may be required to reconsider the NHI Act, potentially leading to substantial amendments and further delays. We continue to keenly monitor all developments on this front, which have the potential to fundamentally alter health care industry landscape. Another key matter of interest for our shareholders and other stakeholders, is met schemes pending litigation with Bonitas, which is due to be held early next month. I would like to highlight the Board's commitment to taking this bold action, but also clarify that legal proceedings were not our preferred option. We made several efforts to engage with Bonitas after media coverage arising from whistleblower reports suggested that the RFP process had been compromised possibly with a fixed outcome planned. These attempts resulted in no constructive response leaving us with little choice, but to approach the cuts for relief. The method remains ongoing. And Medscheme continues to pursue an order to interdict the implementation of the Bonitas RFP award until the CMS forensic investigation is fully concluded. We are not challenging competition. We are supporting proper process and regulatory scrutiny prior to implementation. Regulatory supervision is essential to ensure government concerns are fully investigated before decisions affecting members become irreversible. We pride ourselves on upholding solid governance standards and acting in the best interest of our members, stakeholders and broader industry. We expect the court to hear the case in the coming weeks. Throughout the litigation process, our primary focus continues to be on business stabilization. I would like to emphasize that this litigation has not affected nor will it affect the quality of service or performance Medscheme provides to its other clients. Looking ahead to the next 12 months, the Board has directed management to implement a single integrated turnaround program. The sequencing of this strategy is deliver it, stabilization first, recovery second. Our immediate priorities are to protect liquidity, execute a structural cost reset and reshape the organization to align with its revised scale. These actions are essential to ensure that AfroCentric emerges through this period, leaner, stronger and more resilient. I wish to acknowledge and express my gratitude to management and the employees of the AfroCentric Group, who have displayed remarkable resilience, tenacity and dedication during this challenging period, and we'll continue to embrace the impending changes with Grace and integrity. We remain grateful for your dedicated service to the group. In closing, I wish to thank my fellow Board members for their continued leadership and support in navigating the group through this transition, in particular, on behalf of the entire Board, I also wish to extend my appreciation to Miranda [indiscernible] for her dedicated service to Afrocentric as she concluded a tenure on the 1st of March as a non-Executive Director and member of the Investment Committee. We thank our shareholders and stakeholders for your continued trust and confidence in us. I now move on to the formal proceedings. For the purpose of determining quorum, I refer to the company's memorandum of incorporation, which requires that there be 3 members and 25% of all the voting rights that are entitled to be exercised in respect of the methods under consideration to be present. I will take this moment to request for the Computershare representative, who is appointed as scrutineer in the AGM to please confirm that we have -- a present or by authorized proxy, the necessary quorum representing 3 members and 25% of the issued Afrocentric shares. Thank you very much. They've have confirmed that. Accordingly, I declare that the quorum required in accordance with the company's memorandum of incorporation and the Company's Act is present. I would like to confirm that this AGM has been convened in terms of the notice of the Annual General Meeting, which is contained on Pages 113 to 138 of the 2025 integrated annual report. And that the requisite notice was dissimated in the manner and form required in the company's act for an Annual General Meeting. I hereby declare the meeting duly constituted. Please note, that we will deal with the formal Annual General Meeting matters, after which I will open the floor for general questions before the results are announced. Since the full details of the ordinary resolutions and special resolutions, together with their respective explanatory notes are provided in the integrated annual report, it is not necessary for me to read them out in detail. Voting will proceed by way of a poll, facilitated by Computershare. You would have received a ballot paper from Computershare, which you've asked in the notice of the AGM, that you complete an e-mail back to [email protected]. If you have not received your ballot paper, please email Computershare. We will now proceed with the business of the meeting. Presentation of the audited financial statements. Regarding the presentation of the audited financial statements, I note that in terms of Section 33D of the Companies Act, the financial statements of the company and the group for the year ended 31st December 2025 have been approved by the Board and published in the integrated annual report for the shareholders. Are there any questions regarding the annual financial statements? I would like to thank our external auditors KPMG for their cooperation in completing the audit and having the annual financial statements ready for the presentation to our shareholders. Presentation of Social and Ethics Committee report. A report of the members of the Social and Ethics committee for the year ended on the 31st of December 2025 as included in the integrated report 2025 is available on the company's website. Are there any questions pertaining to the report of the Social and Ethics Committee? No questions. Thank you. We will now move to voting on the ordinary resolutions. I do not intend to read the full text of each ordinary resolution, but rather to refer to the resolutions as contained in the notice of the AGM. Voting in today's proceedings will be conducted by way of a poll with 1 vote for each ordinary share held. Should you not have already submitted your proxy form to Computershare. You can vote on each resolution by placing a tick in the boxes labeled for, against or abstain and e-mail the Form to Computershare at the end of the meeting before the votes are tallied. For all ordinary resolutions to be passed, votes in favor must represent at least 50 plus 1 of all votes cast all exercised at the meeting. Should there be any questions during the voting process, shareholders may type their questions in the comment box made available, and all questions will be addressed. Ordinary Resolution 1 relates to the election of directors appointed during the year. I propose ordinary resolution number one, relating to the election of Ms. [indiscernible] as a Non-Executive Director of the company. I now put the motion that ordinary resolution 1 as set out in the notice be voted on your ballot papers. [Voting] Ordinary Resolution 2 relates to the reelection of directors as set out in the company's memorandum of incorporation. A summary of the directors, resumes is available on Page 39 of the AGM notice. I propose ordinary resolution #2.1, relating to the reelection of Mr. JB Fernandes as a non-Executive Director of the company. I now put the motion that ordinary resolution #2.1, as set out in the notice, be voted on your valid papers. I propose ordinary resolution #2.2, relating to the reelection of Mr. MJ Madungandaba as a Non-Executive Director of the company. I now put the motion that ordinary resolution #2 as set out in the notice, be voted on your ballot papers. I propose ordinary resolution #2.3 relating to the reelection of Ms. [indiscernible] as a nonexecutive director of the company. I now put the motion that ordinary resolution #3 as set out in the notice be voted on your ballot papers. Ordinary Resolution 3 relates to the appointment of the Group Audit and Risk Committee members. A summary of the directors resumes is available on Page 41 of the AGM notice. I propose ordinary resolution #3.1 relating to the election of Mr. JB Fernandez as the Chairperson and a member of the Audit and Risk Committee. I now put the motion that ordinary resolution #3.1 as set out in the notice, be voted on your ballot papers. I propose ordinary resolution #3.2, relating to the election of Ms. A.M le Roux as a member of the Audit and Risk Committee. I now put the motion that ordinary resolution #3.2 as set out in the notice, be voted on your ballot papers. I propose ordinary resolution #3.3, relating to the election of Ms. K. Morule as a member of the Audit and Risk Committee. I now put the motion that ordinary number Resolution 3.3 as set out in the notice be voted on new ballot papers. Ordinary resolution #4 relates to the appointment of the group, social and ethics committee members. A summary of the directors resume is available on Page 43 of the AGM notice. I propose ordinary resolution #4.1, relating to the election of Dr. N.D. Munisi as the chairperson and a member of the Social and Ethics Committee. I now put the motion that ordinary resolution #4.1, as set out in the notice, be voted on your valued papers. I propose ordinary resolution #4.2, relating to the election of Ms. Moloele as a member of the Social and Ethics Committee. I now put the motion that ordinary resolution #4.2, as set out in the notice, we voted on your ballot papers. I propose ordinary resolution #4.3 relating to the election of [indiscernible] as a member of the Social and Ethics Committee. I now put the motion that ordinary resolution # 4.3 as set out in the notice, be voted on your ballot papers. Ordinary resolution #5 relates to the appointment of the independent auditor. The Audit and Risk Committee reviews the performance of the external auditor annually and have recommended the reappointment of KPMG as the independent auditors for the group until the next AGM. I now put the motion that ordinary resolution #5 as set out in the notice be voted on your ballot papers. Ordinary resolution #6 relates to the general authority to repurchase shares. For ordinary resolution #6 to be passed, votes in favor must represent at least 50% of all votes cast and exercised in the meeting. I propose ordinary resolution #3, grating the directors a general authority in terms of the MOI of the company and the listings requirements for the acquisition by the company or by a wholly-owned subsidiary of the company of shares issued by the company. I will now put the motion that ordinary resolution #6, as set out in the notice, be voted on your ballot papers. We then move to the ordinary resolutions relating to remuneration, being ordinary resolution 7 and 8. The chairperson of the Remuneration Committee is in attendance. Should there be any questions relating to the following 2 ordinary resolutions as well as special resolution #1, relating to the remuneration of nonexecutive directors. I propose ordinary resolution #7 relating to the nonbinding advisory vote on the company's remuneration policy. The reason for proposing this resolution is to enable shareholders to express their views on the remuneration policy. I will now put the motion that ordinary resolution #7, as set out in the notice, be voted on your ballot papers. I propose ordinary resolution 8 relating to the nonbinding advisory vote on the company's remuneration implementation report. I will now put the motion that ordinary resolution as set out in the notice be voted on your ballot papers. We will now move to voting on the special resolutions. For all special resolutions, votes in favor must represent at least 75% of all votes cost. I propose special resolution number one relating to the approval of nonexecutive director fees. The reason for proposing this resolution is to approve the remuneration of nonexecutive directors for the 6-month period commencing on the first of July 2026 to 30th June 2027. I will now put the motion that Special Resolution 1 as set out in the notice, be voted on your ballot papers. I hereby propose special resolution #2, authorizing the company to issue shares for cash. The reason for proposing this resolution is to grant the directors as a general authority in terms of the memorandum of incorporation of the company and the JSE listing requirement to issue authorized, but unissued ordinary shares for cash as and when they deem it appropriate. I will now put the motion that special resolution #2 as set out in the notice, be voted on your ballot papers. I propose special resolution #3 relating to the approval for the provision of financial assistance to a related or interrelated company in terms of Section 45 of the company's Act. The reason for proposing this resolution is to grant the Board the authority to provide financial assistance as contemplated in Section 45 of the act to a related or interrelated company or corporation incorporated outside of the Republic of South Africa. I will now put the motion that special resolution #3 as set out in the notice, be voted on your ballot papers. I propose special resolution #4 relating to the approval for the provision of financial assistance in terms of Section 44 of the Companies Act. The reason for proposing this resolution is to grant the Board the authority to provide financial assistance for the subscription of shares to related or interrelated companies. as contemplated in Section 44 of the act. I will now put the motion that special resolution 4, as set out in the notice, be voted on your ballot papers. We will now deal with the question-and-answer aspect. Ladies and gentlemen, we will now respond to all questions from shareholders on the special and ordinary resolutions contained in the notice as well as any other questions of a general nature. Questions will be answered and dealt with by a member of the Board who may be best suited to answering your questions. Are there any questions?

We have a question from Alan [indiscernible]. The question relates to Forrester. The question reads. In 2021, the medical cluster board Forrester for an amount of ZAR 320 million from a Spanish company, no other details were provided. This was just a subsidiary purchase. Now the pharma cluster as a whole is being sold ZAR 400 million as a whole. How do you justify that price? The second question also related to the pharmaceutical, yes, they're related. And the question is, why do you not just unbundle the pharmaceutical cluster? Thato Moloele, our Group CFO, will answer the questions.

Good morning, shareholders, and Alan. Maybe just to clarify just on the origins of the transaction. At the time that the transaction occurred in 2021, it qualified as a category 2 transaction. So from a [ JSE ] reporting perspective, a significant amount of detail actually was provided on the since new exchange network of the JSE. And then maybe just to answer the question with regards to the valuation and maybe the configuration of the disposal assets. Maybe just to confirm that the disposal assets comprised of Forrester [indiscernible] or less the Activo business. And I think you would have seen throughout the past several years that there's been sustained value erosion within those businesses, mainly driven through margin suppression. And those are very -- mostly been as a result of the impact of SEP pricing as well as of the impacted and the elevated level of the cost of goods as well. So unfortunately, the performance of the assets has not aligned with our overall expectations, culminating in several loan payments, which we recorded over the past financial years. And on that basis and really just looking at the outlook of the performance of the asset, we've taken the decision as management to rather exit the assets and then to focus on the areas of our core strength and capability and those areas being within managed care, health administration as well. So that is really the driving factors behind the overall transaction price and really what has impacted the valuation of the asset.

Second question from Alan [indiscernible] once again, is the current price of the share is about ZAR 1. Did Sanlam just make a huge mistake when they paid ZAR 6 for the lots of their shares.

Thank you again for the question. So what I can say is that the AfroCentric Group and the health care capabilities from a strategic enabler to the Sanlam Group and then looking at health strategy and solution. As such, I wouldn't say that the devaluation of the overall share price forms a mistake by Sanlam as it's of strategic importance to the overall entity.

The final question relates to Dennis. The question is Dennis is part of the health care assets? Is it also being disposed off?

Dennis is not being disposed off. Dennis remains part of the AfroCentric Group. As I stated, the disposal assets comprised of Activo Health Care assets as well as Forrester Pharma..

There may be further questions to the answers given -- provided, can you check?

No, none.

Okay. I think we have dealt with questions with the appropriate answers that we provided. And thank you very much for your participation. As usual, we remain very transparent on all issues and shareholders are welcome to inquire or request answers to the questions and so on. So there've been no further questions. We shall proceed -- okay. I would like to request for any shareholders that have not yet submitted their ballot forms to please send these to [email protected] now. We shall have a short adjournment, during which Computershare will tell you the results of the poll. Let's take a short break. [Break]

Ladies and gentlemen, I'm back online again. The scrutineer has now handed me the results of the poll, all of which have passed with the requisite shareholder support. The results will be announced on SENS, the actual details of the numbers and the percentages, but by an overwhelming majority. That, ladies and gentlemen, concludes the official business of the meeting. And let me share with you that there have been other questions that followed after we close the question and answer session. And those will be addressed after the meeting by our management, our CEO and CFO. We have a short utmost transparency, and this will be dealt with accordingly. In closing, I extend my heartfelt gratitude to the shareholders of Afrocentric, all partners, leadership teams and employees. Your support and commitment remain the cornerstone of our progress. We look forward to the future and your ongoing support and confidence in us, encourages us to bring good commercial judgment and sense and sound moral compass to the task. Together, we look forward to shaping a healthier and more inclusive future for South Africa. I thank you very much.