Brimstone Investment Corporation Limited (BRT) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. Welcome to the 29th Annual General Meeting of the members of Brimstone Investment Corporation. The meeting will be conducted entirely by electronic communication. I am Fred Robertson, your Chairman for the meeting. We will now proceed to the formal part of the meeting. There are 58 members present represented either in person or by proxy and representing 179 million shares. The number of votable shares is 264 million, of which I advise I hold 17 proxies, representing 112 million shares. Since the minimum of 3 members are present at this meeting and more than 25% members are represented, the requirement for a quorum has been met. 68% of the multiple shares are represented and I now declare the meeting duly constituted. The notice convening this Annual General Meeting has been in your hands for the prescribed period of time. Voting will be conducted by way of a poll and questions will be taken after all the resolutions have been table. All the resolutions have been proposed by Mr. Liyaqat Parker and seconded by Mr. Nazeem Khan in the capacities as shareholders. Computershare will be acting as scrutinous for the meeting. The voting platform has been open and will remain open while I read out all the resolutions. You will be allowed to vote on each resolution during this time. So kindly cast your votes accordingly. Questions will be taken after all the resolutions have been tabled, but before voting is closed. You can submit questions by clicking on the question and answer, icon, typing the question into the text box at the bottom of the screen and hitting send. Please note, as I said, questions will be taken after all resolutions have been tabled, but before the voting is closed. Ordinary resolution number 1.1 to 1.4, reelection of directors. In terms of the company's MOI, the following directors retired by rotation Ms. T. Moodley, Mrs. M. Ndlovu, F. Robertson and LAD Wort and are being eligible, offer themselves for election. Ordinary resolution number 2.1 to 2.6, appointment of members of the Audit and Risk Committee. In terms of the company's act, the following directors of the company, namely Mrs. N. Khan, PL Campher, M. Ndlovu, LA Parker, Ms. FD Roman and Mr. LAD Wort are hereby appointed as members of the Audit and Risk Committee until the conclusion of the next AGM. Three: Ordinary resolution number 3.1 to 3.6. Appointment of members of the Social and Ethics Committee. In terms of the new amendments to the company's act, the following directors of the company namely Mrs. MJT Hewu, MA Brey, PL Campher, N. Khan, F. Robertson and LAD Wort are hereby appointed as members of the Social and Ethics Committee until the conclusion of the next AGM. Four: Ordinary resolution number 4. Reappointment of auditors. You are asked to reappoint Ernst & Young as external auditors for the ensuing financial year until the date of the next AGM. Five: Ordinary resolution number 5. To place the unissued shares under the director's control. Ordinary resolution, number 5, the effect of which is to place the unissued shares -- unissued ordinary and "N" Ordinary shares in the company under the director's control. Six: Ordinary resolution number 6. Approval to issue shares for cash. Ordinary resolution number 6, the effect of which is to authorize the directors to issue up to 15% of Brimstone's ordinary and "N" Ordinary shares for cash, excluding treasury shares. Seven: The ordinary resolution number 7. Specific authority to directors to offer different dividend alternatives. Ordinary resolution number 7, the effect of which is authorized directors to issue ordinary and "N" Ordinary shares as capitalization shares to permit shareholders to receive a cash payment or a distribution in lieu of a capitalization share. Non-binding advisory vote, the remuneration policy of the company has set out in the remuneration report on Pages 33 to 39 of the Integrated Report. Nine (sic) [Eight]: Non-binding advisory resolution implementation report. You are asked to approve as a non-binding advisory vote, the implementation report on the remuneration policy of the company has set as set out on Pages 33 to 39 of the Integrated Report. Please be reminded to kindly cast your votes. 10 (sic) [Nine]: Special resolution number one. Nonexecutive directors fees. Special resolution number one, the effect of which is to approve the nonexecutive directors fees for the year ending 31 December 2025. 11 (sic) [10]: Special resolution number two. General authority to repurchase ordinary and "N" Ordinary shares. Special resolution number two, the effect of which is to authorize the company and/or its subsidiaries as a general authority to repurchase up to 20% of its own securities. 12 (sic) [11]: Special resolution number three. General authority for financial assistance in terms of Section 44 of the app. Special resolution number three, the impact of which is to authorize the company to provide direct or indirect financial assistance in terms of Section 44 of the company's act. 13 (sic) [12]: Special resolution number four. General authority for financial assistance in terms of Section 45 of the act. Special resolution number four, the effect of which is to authorize the company to provide direct or indirect financial assistance in terms of Section 45 of the Companies Act. 14 (sic) [13]: Special resolution number five. Authority to issue shares to persons falling within the ambit of Section 41(1) of the act for the purpose of distribution reinvestment alternatives. Special resolution number five, the effect of which is to give the directness of the company the authority to issue shares to persons falling within the ambit of Section 41(1) of the company's act for the purpose of distribution investment alternatives. 15 (sic) [14]: Special resolution number six. Specific authority to repurchase "N" Ordinary shares. Special resolution number six, the effect of which is to authorize the company through a wholly-owned subsidy to repurchase its own "N" Ordinary shares from participants of the Brimstone profitable share plan scheme. Shareholders are advised that the shareholders who are also participants in the profitable share plan scheme are precluded from voting on this resolution. 16 (sic) [15]: We will now take questions and I, all my fellow directors will do our best to answer it. I need to say to you and note that we have received a letter from one of our shareholders, setting our suggestions and proposals relating to Brimstone's remuneration policy and dividend payment options. I can confirm that we are engaging with our remuneration experts in this regard, and we are, as a management team, thank the shareholders for this constructive input. Ladies and gentlemen, we are open to questions and suggestions or any other participation you would want to have in this AGM.

There is one question Frederick and this is from [indiscernible] and he says, congrats on the initiatives to reduce debt and head office costs. At the recent investment presentation, the Chairman stated that head office costs were 66 million and will be reduced. In the annual report, the Chair mentioned that the entire digital team have taken salary cuts ranging from 20% to 40%. Will the Chair please advise as to what the level of head office costs will be reduced in the 2025 year and if there are targets for further reductions thereafter?

Thank you, Chris. Mustaq, do you want to answer that?

Yes. Yes. Thanks, [Chair]. We are hoping to reduce cost to under ZAR 50 million in the current financial year. That's what the intention this year. From the ZAR 66 million or ZAR 67 million where it was [indiscernible]. And on target at the moment to do that.

Chris, I hope that answers your question. From ZAR 66 million to below ZAR 50 million. I think Mustaq's just leaving a little margin for himself, but I think it's going to be quite a bit below the ZAR 50 million mark. Any other questions, Chris?

None at the moment.

Chair, we have received one additional question, I need to quickly push it through.

In the interest of the company to buy shares from the recipient of these listed shares?

Special resolution number 6.

[indiscernible] the shares have been issued and brought back...

Mainly for the payment of the income tax portion. So generally, it's 45% of the value.

[indiscernible] it's -- thank you for that question. And it is about for the individuals to settle the tax base. And it's only a limited amount that we buy back to cover the tax issue. We encourage our recipients to actually hang on to their shares and be part of the plant going forward with all shareholders. Hopefully, that answers your question. I just need to tell all people posting questions on this that if they are not satisfied with the answer, they are most welcome to engage with us after this meeting at any time or at their convenience. Any other questions? Is there another question? There's one.

From [indiscernible] in the media where it was mentioned that there was a deep instant investor skepticism. Our research indicates major problems with poor capital allocation, misaligned remuneration incentives and [falling] returns, et cetera -- [falling returns], et cetera. Can the Chair please advise whether it is not time for Brimstone to adopt a far more hands-on approach?

Thank you for that question. Firstly, let me say that Brimstone is vigilant in the Board meeting and also speaking to the management. But it is a question may be best placed at the AGM of [indiscernible] which is later this week. And I ask you kindly to reserve that question for that meeting. Is there anything else? If there are no other questions, any questions in the room? Any comments? If not, we will now ask you to cast your votes. The voting platform after we've dealt with all the questions, if there's none popping up, the voting platform will now be closed, and the results will be displayed as soon as they are available. [Voting]

I can confirm that all ordinary and special resolutions passed by the requisite majority. We will share the results shortly, and we will also provide the consolidated voting results to be uploaded to SENS. I'll share those results shortly.

Thank you. We can confirm that all the resolutions have been passed with the appropriate requirement votes, and we will post the actual results on SENS and also on our website. So as there are no other business, which has been put on our agenda -- is that result coming up already. The results are under screen now for those who are remote. But these results will also go out in SENS as well as will be posted on our website. Thank you. As there are no other matters that was asked for on this agenda as all the business for this meeting has been transacted, and there being no other -- as I say, no other matters, I thank you for your presence. I thank you for your input. Thank you for your support of Brimstone, and I close this meeting.