Regal Partners Global Investments Limited (6L20.F) Earnings Call Transcript & Summary

Okay. Terrific. Okay. Everyone, welcome. Good afternoon, and welcome. I will begin today by acknowledging the traditional custodians of the land on which we meet, the Gadigal people of the Eora Nation, and pay my respects to elders past, present and emerging. My name is David Jones, and I'm the Chairman of VG1. Thank you for joining us today at our 2023 AGM. The Company Secretary has advised me that we have a quorum, so I'll declare the meeting open. The notice of meeting, which was sent to shareholders on the 30th of October, will be taken as read. I'm chairing today's meeting from Customs House in Sydney. And with me in the room are my fellow Directors, Lawrence Myers, Adelaide McDonald and Noel Whittaker. Also present Ian Cameron and Candace Driver who are our Company Secretaries; Brendan O'Connor, the CEO of Regal Partners, which is the manager of VG1 that is here and representatives of our share registry Boardroom. Our auditors, Pitcher Partners are represented by Scott Whiddett and Evans. We are pleased to conduct today's meeting in a hybrid format, meaning that people can participate in person, online or over the phone. There will be plenty of opportunities for shareholders to ask questions during the meeting. Please refer to the meeting materials distributed to shareholders for information on how to participate, and I'll run through the key points shortly. Now turning to today's agenda. As shown here, given that the portfolio managers webinar was held a few weeks ago, today's meeting will be focused on the key items in the notice of meeting. I will firstly give a short introductory address, we'll then move on to the resolutions where I will take questions on each resolution. Following this, there will be an opportunity to ask general questions, and we will then collect the votes. Once we formally conclude the AGM, we will host light refreshments for shareholders in person here. And please note that the RG8 AGM will follow shortly there afterwards. Now to all of the mechanics of voting, and I'll try to belt through this as quick as I can. For those in the room, when you registered today, you would have received 1 of 3 colored cards. Blue cards were given to shareholders who have not submitted proxy forms prior to the meeting or and proxy holders. Blue Card holders can therefore vote on the resolutions being put forward. You're entitled to ask questions when prompted throughout the course of the meeting. Red cards were giving to shareholders who have submitted proxy forms prior to this meeting, and therefore, cannot cast votes during the meeting. You are also welcome to ask questions when we reach the relevant parts of the meeting. White cards were given to nonshareholder guests who cannot vote or ask questions during the meeting. You can complete your voting at any time during the meeting. Just make sure that you give your card to one of our boardroom representatives before we close the voting at the end of the meeting. In terms of asking questions in the room, when we reach the relevant sections of the meeting, we'll ask people with questions who have a blue or red card to make their way to the microphone and show their card before asking their questions. Depending on time and the number of questions, we may need to limit each shareholder to 2 questions or comments per item of business. For those of you who have logged into the webcast with your user name and passwords, you'll have the opportunity to submit questions online as well as vote on the resolutions. If you have already prepared a question, please submit it now, we'll aim to answer it at the appropriate stage. If your question relates to a specific resolution or the financial report, please state the resolution number or reference the financial report at the start of the question. All other questions will be considered during the section for general questions. If we receive multiple questions on the same topic, we may group these together. Again, depending on time and the number of questions, we may also need to limit each shareholder to 2 questions or comments per item of business. With regard to online voting, to give you ample time to vote, we are going to open the polls now. This means you can submit your online votes at any time between now and when we close the polls at the end of the meeting. If you change your mind about any vote, you can also override your original online vote between now and when the polls close. For those of you who have logged into the webcast as a guest, you'll be able to view our webcast but not submit questions or vote. Finally, for shareholders who have joined over the phone, this is indeed a multidimensional enterprise. If you have provided your pass code to the call center and been verified, you will be able to ask questions. Please note that the process for rendering your question is very different to the webcast. For those on the phones, please do not try to register for any questions or comments yet as we will only open the phone lines when we reach each item of business. So when we arrive at the first item, we will ask if you want to register for a question on that topic. You can register at that point by pressing star 1. Once we have finished that item business, we will move to the next item of business and repeat the process. Please do not register to ask a question for an item of business until we reach that item. So we can give all shareholders a reasonable opportunity to ask their questions. Once we have answered a shareholders' question, we'll move to the next person in the phone queue. If you have additional question or comment on that same item of business, please press star 1 to register for the queue again. For other people on the phone, that is guests and shareholders who have not provided their passcode to the call center, please note the phones will be listen-only. I should also point out that if you are listening on the phone, but viewing on the webcast as well, the webcast may lag the phone by 10 seconds or more. So it may be simpler to use the webcast for the sound as well. You will note that we will not be able -- you will note that you will not be able to vote over the phone. I hope everyone got all that. [We'll have exam] on that later. With those procedural matters handled, I will now deliver my formal address. Ingrid, are you happy? I haven't bugged that up. Okay. All right. That's complicated. Okay. Very complicated. Okay. This is my -- now this is my Chairman's address, which released to the ASX this morning. On behalf of the Board of VGI Partners Global Investments Limited, I would like to welcome all shareholders to today's Annual General Meeting. We thank you for your support of VG1. Regarding today's meeting format, as many of you will be aware, the VG1 investment team and Phil King provided a detailed portfolio update by webinar a few weeks ago. I hope you all had the opportunity to watch this. But for those who missed it, there is a replay available on the VG1 website. Given this recent portfolio update, the focus this afternoon will be on the formal business as set out in the notice of meeting, and I will keep my opening remarks relatively short to ensure we have plenty of time for shareholder questions. Turning firstly to a review of FY '23. In the 12 months to June 2023, the company reported a net profit after tax of $53.8 million, representing earnings per share of $0.151. This outcome was achieved in a year of heightened inflation and sharply rising interest rates, both of which can be challenging for equity markets. Against this backdrop, the company delivered a net portfolio return of 13.9%. Pleasingly, VG1 shareholders also benefited from a reduction in the discount to NTA and received a total shareholder return of 17.3% over the year. This metric takes into account the increase in the share price and dividends and is before including any benefit from franking. With regard to the portfolio return, it is important to keep in mind that this was achieved with an average net exposure of 59%. The relatively low exposure reflected the portfolio's cautious positioning in the first half of the financial year when the portfolio had an average net exposure of 47% and was during a period when share prices of technology stocks were particularly put under pressure. Many key global and U.S.-based indices recorded returns in the low single digits or even negative returns during this period. In a rapid reversal of events, Global Indices rebounded in the 6 months to June 2023, and the investment team quickly repositioned the portfolio for this change of conditions with the portfolio returning 19.7% in the second half of the financial year June. During FY '23, 2 dividends were paid, comprising a 73% franked dividend of $0.045 per share in September 22, and a fully franked dividend, also $0.045 per share in March 2023. These dividends were in line with the company's announcement in August 2022, that is dividend policy would target a dividend of at least $0.045 per share every 6 months. It is also worth reiterating at this point that a key benefit of VG1 being a listed investment company is its ability to smooth its dividends. This is because a listed investment company, unlike a unit trust, can choose to allocate undistributed profits to a profit reserve, out of which future dividends can be paid. As at 30 June 2023, the company's profit reserve was $242.3 million. Due to this strong position, the company declared a final fully franked dividend for the second half of FY '23 of $0.05 per share, which was paid in September of this year. Following this, in October, the company formally increased its dividend payout target to at least $0.05 per share every 6 months. We've received positive feedback from shareholders on this updated dividend policy, especially given the current economic climate, where many people are seeking investments that provide a regular income payment. The new annual dividend rate of $0.10 per annum represents a net dividend yield of 6.3% at yesterday's closing price or 9.0% gross yield if those dividends are fully franked. After adjusting for the payment of the recent dividend, the profit reserve is now over $225 million, equivalent to approximately 7 years of coverage at this new 6 monthly dividend rate of $0.05 a share. On the subject of capital management, in FY '23, the on-market buyback was also very active with over 33 million shares purchased for approximately $50.2 million. A further 14 million shares have been bought between the end of June and today. This represents a total of 81.2 million shares or approximately 20% of VG1's capital that has been acquired and canceled since VG1's buyback was initiated in mid-calendar 2020. The Board continues to support the buyback program on the basis that it is accretive to shareholders when conducted at a discount and provides additional liquidity to those seeking to trade. On the 2nd of August, the company announced the renewal of the on-market buyback for a further 12 months and later in today's meeting, we will be seeking shareholder approval for a resolution to increase VG1's buyback capacity from 10% to 25% for the next 12 months. Now turning to corporate aspects. Many of you -- many of you would recall that VG1's Investment Manager, VGI Partners merged with Regal funds management in June 2022. This has been positive on a number of fronts, and it has been particularly pleasing to see VG1's strong portfolio performance of 13.4% for the year to October because this occurred after the team completed a thorough review of the portfolio in mid-2022 after the merger and made a number of changes to some long-standing positions. As stated at the time of the merger, one of the benefits of joining with Regal was that it would allow the VGI team to access and collaborate with Regal sector and regional specialists such as their analyst team in Singapore. This collaboration has continued to deliver positive benefits, enabling VGI's team to increase the number of stocks under consideration and to diversify the portfolio into areas where Regal has particular expertise such as health care and energy-related industrials. Regal has continued to broaden and strengthen its global equities capabilities, including the recently announced -- including recently announcing the acquisition of Specialist Global Long/Short Equities Investment Manager, PM Capital. We've also seen an improvement in the performance of VG1's short portfolio. This was clearly evident in October when the MSCI World Index fell 2.9% on a net basis, but the VG1 portfolio rose 3.4% with shorts adding materially to the return. This increased depth -- this increased depth of capability and broader diversity of investment team members has benefited shareholders well. As most recently evidenced by the smooth transition of investment responsibilities during our VGI's Chief Investment Officer, Robert Luciano's sabbatical and subsequent departure. Further, VG1 and the VGI investment team have also benefited from Regal's experienced distribution and marketing team, which continues to expand as well as Regal's operational, trade and risk management support. In particular, it was pleasing to see that one of the earliest steps in the integration after the merger June of last year was the rollout of Regal's proprietary IT and trading systems to the VGI Partners portfolios, enabling management to access a firm-wide view of portfolio attribution and risk management metrics and providing additional data for the investment team to assess performance, conduct back testing and assist with portfolio construction. In terms of closing VG1's discount to NTA, we continue to believe that investment performance, shareholder engagement and capital management, including the dividend policy and buybacks are all key. And we note that the manager is continuing to focus on delivering in all of these areas. We're also aware that shareholders are always keen to see that the manager is aligned with them. And note that entities and funds associated with Regal Partners and Phil King on a combined basis, became a substantial shareholder in VG1 in August with a stake of approximately 6.4%. I hope this helps to demonstrate to VG1 shareholders that the Regal team is very focused on achieving alignment and that everyone is very motivated to increase both the company's net tangible assets and its share price. In closing, I would like to acknowledge a number of people. Firstly, on behalf of the Board, I would like to thank Robert Luciano, who established VG1 in 2017 and VGI Partners back in 2008. Robert has clearly dedicated many years to the broader business, and we thank him for his contribution to portfolio management over the years, including the challenging period of the COVID pandemic and the macroeconomic events that followed, we wish him well for the future. We also thank the investment and operating teams at VGI Partners and Regal partners for their ongoing stewardship of our shareholders' wealth. Finally, we thank our shareholders. We understand there have been some challenges over the years, but hopefully, you can see the progress that has been made in the last year. As mentioned, the team is very aligned with you, our shareholders. and will do their utmost to deliver the best possible outcome. So thank you. So with that, that concludes my opening remarks. We'll now turn to the formal business of the meeting. I will take each item and resolution in the order set out in the notice of meeting. Our meeting today involves tabling and reviewing the accounts and 5 resolutions to be decided. In terms of logistics, when we reach the point for questions, we will start with online from the webcast, then questions over the phone, then questions from the room. For those online, please remember that you could submit your questions at any time during the meeting. Please just type clearly at the top of your question, the number of the resolution that it is about or whether it relates to our financial reports or is a general question, noting we will cover general questions after the formal business. As a reminder for those on the phone, please wait until we reach item of business before registering for a question on that item. Please press star 1 to register, star 2 to cancel. As I mentioned earlier, we will conduct a poll on all resolutions today, combining votes submitted before the meeting with votes that are cast during the meeting, both in the room and online. Since the online polls are already open, if you would like to vote now, please do so. Alternatively, it is also fine if you prefer to only vote after we have discussed each resolution. I will also allow some time at the end of the meeting for you to finalize your votes. For those voting online, if you make a mistake or change your mind, please just select your preferred voting option, and that will override your original vote. I note that Boardroom are the returning officers for today's meeting and will conduct the poll. Certain votes will be excluded in accordance with the Corps Act and the ASX listing rules. The proxy votes will be shown after discussion of each individual resolution. I advise the meeting that I will be voting all undirected proxies in favor of the resolutions as indicated in the notice of meeting. As the results of the poll will not be available before the meeting closes, they will be released to the ASX and made available on our website later today. So with that, we'll turn to the first item of formal business. The company is required to lay before the meeting the last audited financial statements and reports. These were released to the ASX on the 15th of August 2023 as part of the company's 2023 annual report. No resolution on this matter is required. However, I now invite shareholders and their proxies to ask questions on the reports. Questions may be asked of the auditors in relation to the conduct of the audit, the content of the audit report, the accounting policies adopted by the company and the independence of the auditor in carrying out the audit. So as I said earlier, we'll start with online questions and Rebecca Fesq as the Head of Client Business and Strategic Partners -- Partnerships at Regal Partners to read out any questions if they've come through online. Thanks, Rebecca.

Thanks, David. We haven't had any questions come through online as yet. If we can just turn to the operator to see if there's any questions on the phone.

There are no phone questions at this time.

Right. Excellent. So any questions from the room, please, on the financial statements or the audit. Mark, do you want to grab the microphone.

David. Financial performance for FY '23 of $53 million looks superficially impressive compared to last year's massive loss of $192 million. Hopefully, you'll be able to smooth that under the guidance of Brendan and his team over the next coming years. But looking a bit deeper, it's probably no surprise to anyone here that the total operating profit of VG1 over the last 5 years is a tiny $19 million. That's extraordinary. Who would have thought that VG1 would fail to deliver on its prospectus promises of 10% to 15% per annum words that were only removed recently from VGI's marketing material. David, the tide of that specious claim is going to follow you and Luciano and your fellow directors for some time to come. Over the same 5-year period, NTA has fallen 17% from around about $240 to under $102 include some dividends. I appreciate that. On last week's NTA, it's 18% down over 5 years. Since inception of VGI1 has returned to Tiny 2.3% per annum your numbers. Shareholders who paid $2 in the IPO in 2017 have had to rely on some recent dividends in a couple of years of modest buybacks to prop up their returns. Shareholders have been badly mislead here. And you and your fellow directors and your managers stood by and said, "Well, discounts just a feature of LICs and the good performance will reduce the discount." The reality is that the discount has been sustained and the performance hasn't come close to market indices. Chronic discounts of 18% to 20% are not good. The depriving shareholders in this case of around about $125 million of their money, which they could bank. If you and your Board had done the right thing and restructured VGI to allow for redemptions at NTA. Lawrence, is my troubling you on the phone message or something like that? Are you listening to this?

I'm acute attention [ indiscernible ] thing you're saying as well, you should please continue.

You heard it before.

Many, many times. Go ahead.

I heard enough. I still think the 3 AGMs and repeated that simple message every year. But you've always know and better, you've chosen to ignore the issue of the discount remains coupled with some relatively poor performance. So that's possibly the worst nightmare of an asset manager. And the only active capital management initiative you've taken over 5 years is to buy back shares on market and bump up the dividends, which I acknowledge. So far, you bought back 17% and if the proposed 25% buyback is approved today, you'll have shrunk the capital of VGI by something in the order of 30%, 32%. That 1989 movie, Honey, I Shrunk the Kids comes to mind here where Rick Marianas played that to Mason character Wayne Szalinski. It's an extraordinary admission of failure, in my opinion, VG1 is the link that will eat itself to death. Sadly, it's a slow death, marked by sustained discounts, high fees, poor performance and no apology of attrition from the Board, which is disappointing. Yet the discount remains. Since the buyback was announced, the discount has pushed out a few more points to 20% worst in class. LICs are a failed business model, in my opinion, unless, of course, you're a manager of LIC. Numerous other managers have been honest with their shareholders in recent years and have restructured to allow shareholders to exit at NTA. The only reason you probably haven't done so, I suggest is that it will reduce the fee income to legal partners, the manager and your former boss. We've spoken out about the failures of VG1 for nearly 3 years to try and convince you to change the business model. You sent lawyers into [ indiscernible ]. You publicly rejected their claims. You blocked their e-mails and phone calls. Yet you've done nothing to give shareholders the opportunity to cash in on the missing $125 million of value, their money, not yours. So I'd like to hear something new from you this year, David, not the same [old]. And specifically, what process did you go through if any, to select a 25% on market buyback? And what reasons do you have for not proposing a more substantial buyback of, say, 50% today assuming we want to retain a structure? And the second part of that question, David, is in response, could you please talk about the process you went through to make this capital management decision? Did you take external advice? And if so from whom? That's the question. Thank you.

Thanks, Malcolm. As you would expect, I have a differing view on many of those matters during that commentary. We are very focused on this Board of the LIC on capital management and on seeking to improve the discount. The major thing, as we discussed last year, is the merger. And it occurred, as you know, in June of last year. So what's that 18 -- 16 months ago and we've started to see the results. I've had them up during my comments. A 13% portfolio return and a 17% net shareholder return for the period to June. And as I said in my comments, it's been a similar one through the 12 months to this past October of around 13% in spite of very choppy capital markets as we've seen massive global tightening and hence, equity market premium, particularly from the U.S. essentially evaporating. So as a Board, we're very pleased with what the manager is doing. We're very pleased with the outcome of the merger, and we're excited about the future of the manager and how the manager is evolving, as touched on, if someone could -- if you guys can mute your phones, please. And so Malcolm, we are very excited about the additional expertise that we're able to bring to the portfolio management here. You're not checking your e-mails during my answer. Are you, Malcolm? Just so I thought I'd confirm that. And so -- and so we are excited about what's coming in terms of portfolio management here. We've seen a very rough 18 months in equity markets and our performance has been solid. So we're pleased with the merger. And as I said during my prepared remarks, there are 3 parts to our program. One is -- and firstly, and most importantly, is in best performance. Secondly, it's about shareholder and engagement and Rebecca and Rob Sonders and the whole team under Brendan, they have an excellent IR team. And then thirdly, it is around these capital management initiatives. As you'd expect, Malcolm, I'm not prepared to share exactly what the Board did or didn't deliberate and everything we sort of went through. But we have thought this through carefully. And it is another thing in our armor. It's not to say we'll use all 25% at all. We've just found that over the last year, in the, what's commonly called the 10, 12 rule, we were hitting against the ceiling. So we thought let's just give more capacity and we shall see. But -- so that's our approach to the buyback.

Just a follow-up on that, David, if I may. I specifically asked -- what were the real triggers to suggest 25% and not 50%? And quite frankly, the 10% buyback over 12 months really had no impact on treating the discount. No. It hasn't budged. And we've seen that in numerous other situations, 25%, there aren't that many 25%. Let's see how it goes. But recently in another U.K. fund, they're a major investor in, said exactly that, 25% is not enough. We want 50%. And I'm sure they've had discussions with you. I might ask you directly to whether they've shared that advice with you on this particular occasion?

So is that the question?

That's one question.

Yes. We'll...

And in response, the second part of the question I had for me previously, which you also decline to ignore or decided to ignore is did you take external advice, paid external advice, independent consultant advice apart from asking Brendan, what he thought?

Well, as I said a minute ago, I'm not prepared to evolve what the Board or has or hasn't done and who we've spoken to and who we haven't spoken to. What I do is I will repeat. The Board has had a thorough discussion about this. We have taken this very seriously in discussions with the manager and we were -- we've been hitting the ceiling on the 10, 12 rule. So we thought let's increase the capacity for that mechanism. So -- and look, with regard to various shareholders, shareholders move up and down the share register. I do know the Regal IR team has been talking to many of them. I will speak to any of them if they are interested. In your opening comments, I haven't blocked my e-mails. You still have my phone number. So -- well, no, no, no. We all can choose how we want to approach this. So that's where we're at.

[indiscernible]

Malcolm, you can conclude whatever you'd like to conclude. Thank you. are there any other questions? How could I guess? Mr. Kingston?

Good afternoon, David, Adelaide and all, good to see you here today.

Good afternoon.

Look, I totally in Malcolm's comments, I think they're well expressed, totally independent to mine, but a little bit of overlap, but a lot of different perspectives that I would like to raise with the shareholders today. Yes. My name is David Kingston, [ indiscernible ] Capital. To be frank, David, the VG1 continues or maybe it's better to describe it as a circus. I agree with Malcolm. VG1 is a flawed investment vehicle with very bad performance since inception and a toxic market rating. Another misleading share address today, David, that ignores the elephant in the room, Malcolm says $125 million. I'm generous. I said -- I'll say $120 million discount to NTA. It's a lot of money, David. It barely cracked a mission in your summary. I'd like to ask -- focus a bit on David. The notice of meeting states that you are not independent. We also know that he used to be an executive of the manager and you were on its Board until May 2023. So it seems, David, you are dependent on the ongoing largest of the Manager of Regal. Thank you, Brendan. Certainly, you seem to have a large conflict of interest, David, and your ongoing hypocracy is astounding. I saw a sense, David, you've got a split personality, maybe a schizophrenic, maybe bipolar.

Should I lie down on the couch?

Look, as you said to Malcolm, whatever you choose. But look, why are you schizophrenic or bipolar or split personality, you've done a fantastic job, David, in maximizing the fees of Regal, the manager. Congratulations well done. Hope you're happy, Brandan. In contrast, the other side of the coin, you've done a terrible job in optimizing the interest of the shareholders, you are the producer duty [towards]. I had the pleasure of meeting you on several occasions, David. You certainly are not a dumb guy. You worked in the private equity arena for many years. I think you went to Macquarie, which is certainly a money-making machine. And you were educated at home. And you also obtained an MA -- AM, sorry. I'm not sure what you got that for, but I doubt it was from services to VG1 shareholders. I think you'd agree, David, that private equity would not tolerate the outcome that VG1 has delivered shareholders since its inception 6 years ago. And you were a signatory to the prospectus. Been Chairman since day 1, I believe. So you've got a lot of blood on your hands, David. It is really said and disturbing, there are so many positive initiatives you could have done to fix the mess. We pointed that out to you, Malcolm and I pointed that out to you a couple of years ago. You ignored it. Many other directors of other LICs have adopted those approaches to properly look after their shareholders, but you haven't. David, VG1 isn't a charity benefit fund to keep feeding huge fees to its managers at Regal. clearly if you move aside your conflict to ensure shareholders are properly looked after. In my opinion, you have failed miserably. So let's look at the facts, not the glossed over Chairman's address. What have you delivered as Chairman in the 6 years you've been Chair of the company? What have you delivered for the shareholders that you owe legal for duty towards? As Malcolm pointed out in the IPO prospectus, VGI targeted a 10% to 15% return. Its performance relative to that is a disgrace. Since inception 6 years ago, pathetic portfolio return of 2.3%. But David, and I'll also include you Lawrence, you've been there for ages, So have you Adelaide, so have you Noel. If you adjust for the discount to share price, you know what you've delivered, you and the Board have delivered? A fat 0, 0. Unbelievable. As well as the abysmal portfolio returns since inception of 2.3%. The toxic rating means it's trading at the $120 million discount to NTA. But don't worry, the schizophrenic, David, seems to be happy. He actually used the word excellent and excited before on a number of questions. Shareholders aren't excited, David, I can guarantee you that. financial year '23, VG1 has paid another $10 million annual management fee to Brendan's company, the manager, 1.5% per annum to Regal. The only consolation of the terrible results is the user's 15% performance fee has not been paid to the manager. Why? Because there's 0 performance. It's under the high watermark. It's really [ indiscernible ] unfair that under your watch, the Board, the manager has received huge fees, the IPO investors, the big donuts. Maybe that comes from David's experience at Macquarie, which is renowned for the logo, the big donut. The IPO VG1 investors who entrusted their [ indiscernible ] to you and accepted the representation of each director on the Board, grossly misleading representation of 10% to 15% return. They've been slaughtered, blood on your hands, everyone. Let's look at what's happening. It's not an investment company. It's a punting club, rob Luciano's punting Club. I think [all] like a bit of trading too. VG1's total share purchases for the year were $2.1 billion, which compares with the shareholders' funds of $700 million. Wow, it's not an investment company. It's a punting club. Let's look at the -- I do have a question to the auditor a little bit later. You did pick up the positives, the gloss, as always, you ignore the negatives. Yes, the company does have a $200 million plus profit reserve, but what you failed to point out, David, it also has a matching roughly $200 million loss provision. So net-net, the truth is the company has 0 net profits. And that is why the more important thing, David, instead of the hype and the gloss and spend, the more important thing is that VG1 has minimal franking credits remaining. Note 14 of the accounts spells it out in black and white. After the recent dividend, you're down to $465,000 of franking. So David, when you pointed out that the dividend growth net, it might be around about 6.5%, 7%, maybe you said. And you said if that's grossed up with franking, it goes up into the 9%. That's highly unlikely to happen, David, because you don't have any franking at the moment. Let me also move on a litany of issuers. VG1, it continue to mislead in your correspondents to shareholders. Malcolm and I reported you to ASIC a couple of years ago. At least you had the decency to remove the 10% to 15% nonsense target out of your monthly statements. but it's nothing short of bizarre, David, and the Board, you're all guilty. When you refer to the philosophy of avoiding permanent loss of capital. We don't need to calculate it. Noel Whittaker, you're a respected commentator. I hope you're embarrassed. We don't need to calculate it. The IPO price was $2. You did a rights issue at $2.32. Stock today is $1.58. 6 years after people trusted you, David, put the money in at [$2], you've lost them a lot of capital. You might say it's not a permanent loss of capital. It's only temporary. But so much misleading stuff coming out of this company, it's very unsatisfactory. Let's look at another issue. I know you'll enjoy, David, Malcolm surprisingly didn't raise it, but I will. David smiling already, and I think he knows my next comment. After we raised some serious concerns with you, David, when we had that great discussion, we described Luciano as the Wizard of Oz, you wrote us a letter on the 16th of March 2021. I won't bore you with all the details, but you stated and "we are in vigorous agreement with you that it is unacceptable for LICs to trade at a substantial discount for a sustained period." David, how long does it take for you to honor your written promise? We're now over 2.5 years later, David. Sadly, VG1 is a discredited very poor investment vehicle. If it was a dog, it would be euthanized. Let me move to some external commentary, David, not mine, not Malcolm, but fairly objective external commentary. Street talk in the AFR, 4th of October '23 a couple of months ago severely criticized VG1 -- sorry,, the leading rating agency severely criticized VG1 and downgraded VG1. I won't go into too much detail, but I'll cut to the chase. The Zenith report advised, number one, that Luciano was integral to VG1 success. I don't necessarily agree, but anyway, he's gone. But more importantly, Zenith stated what Malcolm and I have said to you and Luciano and Brendan and anyone involved in this company that the dynamics of the company are skewed. They're skewed very unfairly in favor of the manager and against the investor. Zenith, which is a very well-regarded ratings agency, but interestingly, you actually pay money for their reports. So they're hardly going to be unfair on you. Their conclusion was that VG1's management and performance fees were uncompetitive relative to peers and poorly constructed due to a lack of appropriate benchmark, which means that in the event that you ever make profits in the future, you will take Brandon 15% of those profits, subject to high watermark. But without any benchmark at all, which, in my view, is improper. I did have some success with another Regal management fee recently where top thorny opportunities managed to [badly] inevitable and change their fees, Brendan, maybe you should as well now that Zenith has publicly criticized you being avaricious unfair. Let me move on. David, you may claim excuses every year for the terrible results. What you've done is you mocked around in 2021 and 2022.[ ] initiatives such as mall communication and higher dividends, they had 0 impact. I think largely because of what Malcolm and I did, there was a shotgun marriage in 2022, Luciano put the right flag up, Regal moved in. But notwithstanding your comment that that's for you. It hasn't moved the dial, David, the discount is still horrible. We move on to Luciano exiting recently. That hasn't moved the dial either. So what happens? Belatedly, something that we suggested to you a couple of years ago, you offer a 25% buyback, albeit you've now hedged your bets and said you won't necessarily use it. Wow, how deflating, David. But it's just too little too late. VG1 is a poisonous entity with a horrible market rating. Clearly, David, the market doesn't respect you or your colleagues on the board. and that's why VG1 continues to trade around the 20% discount to NTA level. David, they won't even buy you at $0.80 on the dollar. So I'm not sure why you continue with this service. When you really should allow long-suffering shareholders the option to get their money back at NTA. Clearly, the predominant beneficiary from the VG1 mess at the moment is Regal the manager. That's you, Brendan. In contrast, there are a range of people. I won't mention them all, but Alliston Global, Alliston Asia, [ indiscernible ], [ Monash ], even Jeff Wilson, eventually the right thing in hand of the money back. Very recently, Brendan and David and Board, you've been reminded by Steve John Smith at Forager that LICs are a flawed structure. He's moving away from it. You've also been reminded by another big company, much bigger than you are, Meituan. They're moving away from it as well. They're going to unwind the structure. They're all going to allow investors an exit at near NTA. But David Jones, Lawrence Myers, Adelaide McDonald, Noel Whittaker continue to dig their heels in and not do the right thing. I've got no doubt, David, that 90% of your shareholders would be delighted if you offered them the ability to exit at NTA $1.96 rather than top a punitive 20% discount and exit today on the ASX at $1.58. depriving of $120 million. And you continue to fail to deliver that option for shareholders to access NTA exit, yet you owe them a legal fiduciary duty. I've only got one more commentary to make. You'll be pleased to know. And it's a little bit of a question for you and the Board and Brendan. There's multiple descriptions we could apply to this farcical saga over the last 6 years of its existence. Absolutely horrendous. But let's go through a few of them. We'll run a quiz, [what] your favorite, David, after I finish. Infamous, notorious, failure, smelly, miserable, big fees, big discounts, pathetic underperformance, unfair, inequitable, indeed shameful, a win for the manager, a loss for the IPO investors, D-grade results, their election of duty to shareholders, disingenuous platitudes, the Board is complicit. David's complected. David continues to breach his written promise to remove the discount, and there is hypocrisy. So I move to my question, David. Given you continue to fail to honor your written March 2021 promise to remove discount when there are multiple examples of other LICs who have removed the discount, do you believe that VG1 has been cowardly, I repeat cowardly, to not confront Brendan O'Connor, Phil King at Regal, effectively to allow investors the option of exiting near NTA? Thank you.

So the answer to your questions is no, David. I thank you for your opinion, mix of exaggeration, and offensive, we'll see you again next year. Many things you said are just misrepresented and just wrong. I'll just touch on 2 quick little ones. I am completely independent of Regal Partners Limited. The ASX has a rule when you leave an executive or a Board capacity, you're not deemed independent for 3 years. So I'm serving my technical time out. I left the Board in June, and I haven't -- and I have no other relationship with them other than my role on this Board and on RG8. So I happen to be entities I'm associated with have some in investments, I am a client in a number of products, but I have no relationship with the group, no relationship with the Board I have no economic interest. So that's just as with many of your other things, that's just factually wrong and misrepresented, David. And the other thing, as you know, about franking credits is when you sell something for a profit, as we did in this year just gone where we made $50 million profits, and we returned 13.9% portfolio return that generates franking credits. So just because we don't have any franking credits now, it doesn't mean we will not have them when we pay our dividend. So again, that's just a misrepresentation among the other myriad misrepresentations, David.

In a blanket waffle response, but let me ask you a specific one, David, because otherwise, you will waffle. Why have you breached your promise in March 2021? Are you not an honorable man? What's your excuse for breaching that 2.5 years later and continuing to punish each and every one of the shareholders that you're meant to be representing as Chairman of this company?

Well, again, David, just suggesting that was a promise [ is couple ] and another classic. We don't like the discounts either. We are doing things to fix them, as I've outlined, and that's our plan. I -- again, to represent that I said it's like saying I'll represent something that I can't control. I can't control it. So I am not -- so that, again, is just another one of your ways to construe things, but it's just not accurate, David.

One for everyone by reading out the letter, but it's a very accurate representation of David's commitment that he has breached for many years. And you are in addition to being able to influence the outcome, David. Just like so many other prominent LIC directors have, in my view, done the honorable thing and rather than continuing to punish the shareholders, they are allowing them to exit an NTA. But you're not prepared to maybe because you used to be an employee at Regal, the manager. Anyway, thank you,. That's my first question.

Right?

Simon [ indiscernible ] Delta asset management. We spoke last year. I think I said to you, if we find ourselves in the same situation 12 months hence, we need to do something more drastic. We got rid of the fund manager, we've promised to pay more dividends. These are all good things. But as has been pointed out, the discount is exactly the same as of that time. It's still 18%. Now in 2021, there were 8,400 shareholders in this business -- company. A year later, there was about 7,000 just under 20% less. This year's only report shows about 5,500. So another 20% less shareholders. It seems patently obvious that people are leaving in droves, and it will continue to go like that. I mean, I know we've talked about this a lot, but surely, the obvious thing to do is to make it possible for the majority of these people and they've got hedge funds and less friendly people on your register just do the right thing and give us an exit mechanism if this passes the 25% buyback, we'll let everybody do it at NTA. We tried it your way, and it is not closing the dividend. What can you say about the fact that the shareholders are leaving?

Discount.

Well, the discount, we need to fix it and you haven't. But does not worry you the fact that 20% of the shareholders each year are leaving.

Well, when you buy back a lot of shares, people are leaving the register, yes, and we're buying back and canceling the shares. And we have bought back about, as I said in my opening comments, about 20% of the stock since -- about 20% of the shares on issue in the middle of 2020. So that's a natural consequence of it. But look, more to your broader point, we're not happy that the discount hasn't closed yet, we're expected that it will. We're hopeful that it will, and we believe we're doing the right things to do it. That is when I say we were through the manager. We believe this is the right way forward. That's why we're choosing to stick to this path. We're not happy. And it has taken longer than what we thought with the new merger of the manager. As I said earlier, we're pleased with how that merger has gone. We're pleased to have produced a solid double-digit portfolio return for the year to June and through to October. But -- and we would have hoped -- we expected the discount might have closed a bit more than it actually has. We think this is the right way forward.

But this has not worked for anyone else. The only thing that works is offer of a free for all for people to sell shares back at close to NTA if they so choose. By doing that, you would rip the company of all your activists and all the people who are just interested in staying in or you turn it into a trust. And that's what the majority of the other -- the other fund managers who have been mentioned today are doing. Our suggestion is that is the simplest thing to do, otherwise, we back in next year, big discount in, more aggression, just do the simple thing.

Thanks for your comments.

representing my self-managed super fund. I'm just curious about franking credits. I take it these as a result of share trading. So can you tell me what sort of churn there is in the portfolio on an annual basis or what's happened in the last year?

Yes. I can speak generally in that it is -- there are a couple of points to franking credits. One is if you receive dividends locally, then you get a franking -- most of our portfolios are offshore, basically all of it. And so those don't pass through. So you don't get -- you don't get dividends, don't contribute. I think that it is accurate to say generally that with the new portfolio approach, the turnover has gone up, has increased. And I think that's partly the sort of Regal style to be a bit more active. And I think the other thing though that is important in the context is the last financial year really was a year of 2 halves when -- as interest rates rose really fast and global equity markets, particularly in tech stocks had a very tough time. So there was -- there was the repositioning of the portfolio in the first half of last financial year due to the merger of the manager. And then there was another reset after Christmas. So at the start of this calendar year, as equity markets started to move again. And if you look at the short positions for instance in the portfolio, it got right up to 40 -- high 40s percent and then back down to sort of 20% kind of thing. So that's quite a dramatic change in the construction of the portfolio but also coming back to franking credits, most particularly around the composition of the loans. And so if you hold something and then you sell it at a profit, that generates a franking credit. And so there is the ability to franking credits get generated as the portfolio turns over, and the portfolio has turned over more frequently over the last 12 months than in, say, prior 5 years. Now can I say definitely, the dividends for the next year at $0.05 a share will be fully franked? No. But we will see because at least it's my view on the LIC Board, but I think the manager holds the [ ] -- the guys that run the portfolio, the portfolio managers, they're trying to get the best gross return and not think about franking credits. And they're just an output and kind of a sort of consequence. We're trying to compound the capital base. -- and if there happens to be franking credits, it's terrific. Am I helping? Am I making sense?

I appreciate most of that, but you haven't actually told we what sort of churn there was?

Well, it's gone up. I don't have the number. I can come back to you. But -- versus -- which is about 3x the portfolio, and that's more than prior years.

[ indiscernible ].

It is correct that when you pay company tax, you get franking credits? Absolutely.

That's right. And that Okay -- got to the profits.

Is there anything else on resolution 1? Thanks, Malcolm. Anything -- David, hello.

Bear in mind, we're talking about profits. Look, I had a question for the auditor. Are they online?

They're here. Scott is here.

Scott, look, the accounts are pretty clear, $735 million of issued capital, profits reserve of $242 million that David accentuated. David ignored the $275 million of accumulated losses, typical spend from David Jones. Can you just clarify briefly, I don't want to be too technical, but why are the accumulated losses not netted off against the profit reserve? Clearly, on a franking side, David, as I pointed out, you're down to 0, effectively under $1 million. So there's no franking there at the moment. So unless you make profits and pay tax, you can't frank anything, David, going forward. But I understand your point that you accentuate normal positive spend to $42 million of profits reserve. In a number of years, you can pay dividends. But why technically at the accounting level are we not netting off the accumulated losses, which are greater than the profit reserves?

Yes, go ahead, Scott. Thank you.

Okay. So the corporation's law changed in 2011 that no longer require a company to have to pay a dividend. As a consequence of that, the Australian tax office issued a ruling that set out that you can't frank a dividend if you don't have profits and that will specify the need to quarantine profits into a profit reserve. For example, a company that doesn't make profits 1 year and then make profit the next year can only pay frank dividends from this year's profit if it's separated from prior year losses. And so most companies, most of the LICs, should establish a profit deserved to quarantine when they make it so they can pay frank dividends to shareholders as opposed to leaving it all go to retained earnings, which would have been the case over 13 years ago. So that's the main reason. So that's why it's separate.

Thanks, Scott. That's clear. Thank you. Anything else on the accounts? Okay. Sorry, Charlie.

Charlie Kingston. Just 2 questions, please. The first one, David, you've mentioned a few times that you think you are doing the right thing by investors in terms of your actions to close the discount. Clearly, it has not worked. You said it a few times, you think you're doing the right thing and you think it will work. But it has been mentioned today in many, many examples of other managers and what they're doing to close the discount, Forager, [ NBI ] and [ indiscernble ] are putting it to a vote. If they should convert to a measure. Allison has done it. Lots of other managers have done what they thought was the right thing, and it has worked. It has allowed their shareholders to have access to NTA. So -- which I hope we can agree on, but it has worked in closing their discounts. But again, coming back to your comment that you think you're doing the right thing, what my take is that you guys suggesting those other managers in what they're doing and what they're proposing, like converting to unlisted structures is the wrong thing. So I'd just like to hear from you as to why you think that is the case? Why you're taking your course of action and you think you're right compared to those managers who also think they're right by doing what they're doing for their shareholders and they do have a precedence on the side to back them up, but it does work in closing the discount?

And why are you standing there? Did you say you had a second one?

Yes.

Do you want to give me that one now or...

A separate topic.

Okay. So just on that, look, obviously, I won't comment on the circumstances of what other managers choose to do. That's totally for them, and that's not for me to opine on whether they're doing the right thing or the wrong thing. They actually have particular circumstances. As I've said, we believe through this merger and the broader capability that we believe we can drive sustained positive portfolio performance as we've demonstrated in the 12 months to June and the 12 months to October. We didn't let the manager -- the merger would fix everything in half an hour. This -- we had hoped the discount would have moved more than it has, for sure, but we didn't expect this to be a very quick sort of turnaround thing. So again, what the other managers are doing, that's totally for them and their own circumstances. We've just had a major merger. We've got new blood, new ideas, and we've started to see performance through the portfolio and aware of the view that the -- as the Board of the LIC that this manager is on the right course and they are providing valuable services. So that's what we wish to pursue.

We can all agree and you do accept that the path those measures have taken has succeeded in closing the discount as opposed to what...

I'm not going to -- I just can't comment on what those other guys.

That's fine. And then the second question, just something that you mentioned in terms of the alignment of the manager in terms of Phil King and his stake. I'd just like to agree with that. Rob Luciano also had a stash in VG1. Clearly, that did not prevent the significant large shareholders value for VG1 shareholders, 20% below the IPO price, despite Rob, I think he still does own some shares. So yes, Phil owns some shares today, but I'd just like to push back and suggest that I don't think that's going to prevent or correctly align the manager with shareholders. Rob, as we know, has now resigned, he's obviously made a lot of money, given he has a very large stake in the manager, the manager extract fees from the [funds in with managers.] Going back to the history of the IPO of VG1, I believe there's been over $100 million of fees paid, roughly half performance fee, roughly half base management fees, those base management fees continue. And that has been the majority of the wealth created for Luciano. Nancy's retired to run his own office, well done. But investors don't get those fees back. We're still sitting on the 20% loss from the IPO. Phil King, obviously, is much more aligned to the manager, given his stake is many, many, many multiples of the stake that he has in the VG1. So again, I'd just like to push back on that comment, but I would just like to understand, again, IPO investors in VG1 have lost 20% of their capital. Yes, there have been some dividends but the manager, whether it be VGI or Regal in total, has received over $100 million of fees. They are paid. We're not getting them back. So I'd just like to understand, going forward, do you think that's a fair outcome? And if not, would you look to claw back some of those performance fees, restructure the performance fee or the base fee? I just appreciate your thoughts on how you can realign that so that if the manager wins, which clearly it has, $100 million richer, investors will also win.

Thanks, Jay. Look, just 2 things there if that I'll pick up on. It was never suggested that by the manager or people involved with the manager like Phil by owning shares that would fix everything. But I think what you would agree with is it's better than everyone owns shares than doesn't. Because then we all live and die by it. We all go up and down with it. So we're all shareholders. So I think the concept of alignment is -- remains central to our philosophy. And indeed, I just saw a comment just in the paper during the week from one of the proxy adviser firms saying that big corporate Boards have gone too far away from not having alignment and not having directors with shareholdings, et cetera. So again, I think to construe that as somehow fix it or that Robert shareholding and so it is more just -- it is another signal. It's another part of our DNA that we all invest into the products that we're sort of part of. And I think that absolutely makes sense. On the point about the fees, Charlie, the fees -- other fees are the fees. They were crystal clear in the prospectus that what they are. They are structured in a certain way for certain reasons. And other people do their fees in other ways. And -- but there's no discussion about thinking about changing. Okay. Anything else on the account? So I'm conscious of time. We've got David.

Just a final one on fees. Mr. Chairman, bearing in mind, Zenith has publicly criticized the Board of VGI for inappropriate fee structure. Have you had a discussion with Regal about changing the fees because you're now -- it's on record, Zenith thinks your fees are wrong? I'll also just make a macro comment the theory of corporate finance, which you understand well, David. Any 2 reasons you invest, Brendan, a bit of education here, dividends and capital gain. If someone takes 1.5% per annum out of the cash flow management fee, let's say it's 10% return, 15% is gone. If someone takes 15% out of the capital growth through the performance fee, 15% is gone. So I actually think the current discount, David, is probably about right for this lousy company. Because with that punitive arrangement, the 1.5% management fee from 15% performance fee is a transfer of value of at least 15% to the manager and therefore, the 20% discount is about right, unless this Board actually makes a structural change. I'll put it to you, Brendan. I think you've got a bit of soul searching to do.

Thanks for that comment, David. Okay. I think we're done on observing the accounts.

We hope so.

So with that, I'll now put up the proxies for this motion -- open proxies in favor of the Chair -- hang on. Am I doing the right thing? Lies. That was the resolution, sorry. There is no resolution here. That was just to observe the accounts. So we're all done there. We'll move to resolution 1. Sorry, I almost gave you a heart attack, Ingrid. Under the Corps Act, listed companies are required to include as part of their directors' report a remuneration report. A remuneration report financial year ended 30 June 2023 is included in the company's 2023 annual report. The Corporations Act requires companies to put to shareholders a nonbinding vote to enable shareholders to voice their opinion on matters included in the rem report. Your vote is advisory only, it does not bind the Board or the company. However, the Board will take the outcome of the vote into account when considering future remuneration decisions. At this point, is it worth noting that Regal Partners, the manager pays the bulk of VG1's operating costs, including the cost of this AGM. This is a central plank of the Regal Partners' philosophy of alignment. As a result, VG1 only bears the cost of its nonexecutive directors plus directors and officers insurance. And I'll just embellish on this. We -- when we established VG1, we sought for the manager to pay everything. But -- the ASX said you can pay everything except -- they are firstly said, no one ever pays, it's managers charge -- charge for it separately. I said, no, no, we don't want to take any of this. We want to manage to bear it all. And they told us the manager can bear it all, even though that's not usual except for the nonexec directors fees and the D&O insurance. So that's the reason why it's just these 2 items are in the rem costs of the LIC. So the Board recommends the shares vote in favor of adopting the 2023 rem report. I will now move this resolution. Are there any questions or comments on the REM report? Rebecca, can we start with online questions?

There's no questions.

And phone?

There are no phone questions at this time.

Okay. Thank you. So questions in the room on the rem report. Malcolm?

Thanks, David. Very shortly on the rem report not too much to look at there, but we've talked a bit about a lot of interest today and there's mixed views on what alignments of interest that are effective. In fact -- but I noticed that this is really a question directed to Adelaide McDonald. About her current shareholding in VG1. I see you've got 33,000 shares at current prices. That's less than a year of total comp, which I think is 70,000. I don't think that's an alignment of interest with shareholders similar to what we've been discussing today. It just fails the pub test of having skin in the game. So my question is this, are you going to commit to buying more shares before the buyback commences?

Well, as we've stated in the release, the directors aren't going to participate in the buyback, but I'm not going to make any statements about buying shares other than to say, I participate in the dividend reinvestment plan, but I don't think I need to make any specific statements.

So I'll take the answer as no. That'd be fair?

Sure. You can take it as no.

The second part that is really about all directors and other insiders. Are they going to be precluded from buying shares during the course of the buyback given the inherent conflict in the interest? I didn't see any specific disclosure on that. That's probably a question for you to answer, David.

Yes, I'm not -- we run a blackout period when the buybacks active so that we're not competing against the buyback.

No, I accept that. I understand. That's standard practice industry, isn't it?

Yes.

Yes. So the buyback hasn't started, have an approved resolution. The director is going to buy. And are they free to buy now before the buyback starts?

Well, I don't think it's appropriate for the directors to be declaring there intentions at any time, but we have a protocol, Malcolm. As you would imagine, and every other company has the same one where you approach the Company Secretary or CFO, and you check that the windows are open and you go and head and do what you need to do and then you declare then it gets released to the ASX.

So let's drill down to that one. Is this an open period for directors to buy now ahead of the buyback commencing?

Well, the buybacks ongoing, we've got a buyback going the whole time, we're operating today under the 10.12 program.

So no, directors have precluded from buying during the buyback -- operation of the buyback?

We have a protocol, I will repeat myself, where we check whether the window is open or not prior to buying.

Now I'm not sure this is a great pertinent to this meeting...

That's another mess of an answer, David.

Yes, cheers. Okay. So with that, we'll turn to -- okay.

Lawrence, you're not on any further resolutions later on, whereas Adelaide is. So I'll ask a couple of questions to little bit later. But once you've got to distinguished CV. You've been on the Board for some time. You've heard today that the performance of the company is woeful. It's woeful against many of its peers. Are you embarrassed by the outcome Lawrence?

David, is this relevant to resolution 1, which is the approval of the REM report? We have an option for the general questions later. That doesn't sound like it's relevant at all. Can you keep that wonderful question for a bit later, please. We have another meeting starting in 35 minutes, and I need to get through this stuff. You can go to 2:59 with these sorts of questions. Let's get through the resolutions, please.

The reason it's relevant is that these 4 directors are key management personnel, if you know the REM report. You don't have any direct employees. So the REM report is all about remuneration. You get David, Lawrence...

So is your question going to the REM of us as directors or the D&O insurance? I don't [ indiscernible ], David.

It's going to be issued because David one has to assess whether the Lawrence Myers, who is taking a fee, is contributing objectively to the enhancement of value on behalf of shareholders. That's the relevance of the question.

We are approving the REM report.

And part of that is whether Lawrence Mines is doing a good job for the shareholders. How can anyone form that view without hearing from about the most fundamental question about shareholders are interested in the performance of the company? Are you embarrassed by Lawrence?

I'll answer your direct question because it will save us all a lot of time. I'm not embarrassed by the performance of the company in relation to the discharge of my director's duties in accordance with both the Corporations Act and the ASX listing rules, we've done a full 360 assessment of the Board, amongst ourselves and each other, and I'm very comfortable that I've discharge my obligations in full. Thank you.

Chair, we're not going to be -- that's fine. Your answer...

Your question is asked and answered. We can move on now, Mr. Chairman. Thank you.

[ indiscernible ] as well because, again, he's not the subject of any further resolutions. Now you are a respected financial contact. You've rightfully have said that you've written books. People who are listening to you. Are you embarrassed by the debarker of this company? You've been on the Board for a long time. It has been woeful for you embarrassed?

I am an investor and I state being investor, and I'm quite happy.

So you're not embarrassed?

Thanks, Malcolm.

Okay. Dave is my name.

David, sorry. I get you 2 fellows. I get -- well, I'm not taking a lot of notice of who's asking frankly, but anyway, we'll move on. So right. I think the second 1 is about me [ indiscernible ], I got to read out the proxies. Do I have to read them out? I'll share the proxy votes on the screen -- this is for REM -- resolution 1, the REM report. Open proxies in favor of the chair of the meeting showed at the time of the meeting voted in favor of the resolution adjusting for these, the votes are 76,850,034 in favor. 50,396 other proxy discretion and 142,748 against. This equates to 98.1% in favor. 0.1% proxy, 1.8% against. For those in the room at Blue Card or for a shareholder or proxy holder and vote online, could you please now complete your vote for resolution 1? Alternatively if you prefer to wait, please complete your voting at any time now at the end of the meeting. Now Resolution 2, which refers to me, I'm going to ask Lawrence to drive this, please.

Thanks, David. We will now move to Resolution 2, the reelection of Mr. David Jones as a Director of the company. Resolution 2, the reelection of Director, Mr. David Jones, to consider and if thought fit pass the following as an ordinary resolution, that Mr. David Jones AM, who retires by rotation in accordance with the company's constitution and being eligible, offers himself for reelection, be reelected as a director of the company. With regard to this resolution, David Jones was appointed to the Board on the 9th of June 2017. Mr. Jones is retiring by rotation and being eligible is standing for reelection. In accordance with Rule 6.7 of the company's constitution, Mr. Jones' details are set out in explanatory memorandum of the notice of the meeting and the are highlighted here on this slide. In summary, Mr. Jones has more than 30 years of experience in investment markets, the majority as a general partner in private equity firms and prior to that in general management and management consulting. Mr. Jones has been a board member of numerous private and public businesses, including the wealth management sector. In 2021, Mr. Jones was made a member of the Audit of Australia for significant services to the museums and galleries sector and the community. In terms of other listed companies, Mr. Jones is currently a Director of Regal Asian Investments Limited and the Chair of Catalyst Metals Limited. He stepped down from his role as a Director of Regal Partners Limited in May of this year. Mr. Jones is also a member of VG1's Audit and Risk Committee. The Board, with Mr. Jones abstaining, supports the reelection of David Jones as a Director. I now move that David Jones be reelected as Director of the company. I will now move to questions. Rebecca, are there any online questions for this resolution?

No, Lawrence.

Are there any phone questions for this resolution?

There are no phone questions at this time.

Right. Are there any questions from the floor? Malcolm, welcome.

Thank you, Lawrence. always to see you again.

Likewise.

I'm not going to be able to get your meeting after this. So I'll my apologies now. Okay. My question is to David. I don't understand, David, why you're standing again for reelection? During your watch, the discount is buying out to 20% being sustained at that level despite the 15% -- 10% to 15% return claims in the prospectus now a [spurious false]. You've tried to close the gap. You bought back shares, you spent $120 million doing so. You're going to spend another $150 million or something doing so as well if the 25% goes ahead. There are plenty of other red flags to point out as well. Your former boss, Rob Luciano took 6 months off the end of this financial year and then quit 2 weeks ago. I think that's a very wise decision, which should be applauded. Yet, he was the manager for the whole of the year. Last year, your boss put up the white flag and sold out to Phil Kings Regal in June 2022. And then Brendan O'’Connor disclosed to us last year, earlier this year that Phil King is not a key management person at Regal. And then Brendan tells us that he has the power to hire and fire everyone at Regal. So that will be a watch how that plays out. It's been a horrible year, David, for the shareholders of VG1 and you've presided over this mess. The obvious conclusion would be you also to walk the plank and resign and not stand for reelection today. But because of these facts, it's around this reelection, and your Board has not found any other way to stop the right to shrink the discount gap will provide a liquidity event at NTA, if your long-suffering shareholders. That's what we've been asking for nearly 3 years. That's what your 2 substantial shareholders wants capital. And if [ indiscernible ] Winstein was here today, I think you'd hear his words in his comments in words on a little about the performance of the company today. And I can assure you they won't be positive. 1607 capital partners and other material substantial shareholder. Jim Milleri was here today. Well, I don't think it'd be expressing support for your data, so cleverly displayed at the outset of this meeting. And what about the other 5,500 VG1 shareholders? Yes, they have been shrinking. Why? Because of the buyback, as I clearly pointed out by the other speaker, but because of the discount gap and the failed performance. David, I won't repeat the whole 5 pages in your representation letter to us of the 16th of March 2021, but I will repeat because I wanted to go on the record. We are in vigorous agreement with you that it's unacceptable for LICs trade at a substantial discount for a sustained period. You'll remember those words. And you went on to say a second time further down the letter. We agree with you. that it's unacceptable for VGI Partners LICs to trade at a large discount to NTA. It's something VGI Partners, now Regal partners, and the Boards of VG1 and VG8, are determined to rectify well, everybody has failed on that account. Brendan, we're looking to you to bring some sense to this mess, and I'm sure you'll focus on it after the meeting. I appreciate it's getting a bit upward. David, it hasn't really worked out so well, has it.

You've made these representations when you're on Luciano's payroll. That changed and rightly, you acknowledge that you're not independent. So wouldn't it be fair to shareholders and a better look for everybody if you had an independent chair to protect in advance the interests of shareholders, someone that is tainted by a long-term commercial relationship with a failed past manager? David, you might have the votes to hang on today, but I ask you to do 2 things for us all. Firstly, was apologize to shareholders today now, do it now for the failure of the Board, on behalf of your colleagues to eliminate the discount, the failure to turn around the performance of your manager and the failure to give shareholders a liquidity event at NTA. And secondly, undertake to us here today you'll resign before the 2024 AGM just like [ indiscernible ] at the Qantas, this is your Quantas moment, David and find a new independent Board member to take on the chair. Thank you.

Okay. I don't believe there was a question, so I think we should perhaps move to the vote.

Lawrence, there was a request for an apology by vote.

Okay. Your request is noted. Thank you. Are they -- sorry, you're asking for a response from me?

From David.

Yes. No. Look, no. And look, now I've got -- I'll just you again, I have no relationship with Regal. I don't think I've ever met Brendan or Phil before about 2 years ago, I don't think when we started the chat and ended up being a merger, we started about Christmas '21 merger middle of '22. As I said earlier, but maybe you weren't seeing Malcolm. The only reason I'm not declared independent is because of this 3-year statutory -- we'll stop presenting that I'm dependent on Regal. I am not. I have nothing to do with them. as I said about an hour ago. So thanks for the commentary, but it's just not accurate. David?

Yes. Lawrence. Look, before I round votes on David, I'd just like to understand another one of your perspectives, David. VG1 obviously has a contractual relationship with Regal manager. Regal share price fallen dramatically since the shotgun marriage with VG1 -- VGI rather that was announced to early mid-2022. Its priced per tonne of the merger was around $4. It's currently $2.30. So Regal's fallen in value of huge $400 million. Do you think that the malaise for VG1 is partly due to the loss in market rating of Regal? So -- yes, is the market losing confidence in Regal as a trustee of investors hard-earned money? Is that part of the problem for this massive going discount?

Thanks, David. I can't comment on the view of the Regal stock or Regal shareholders because as I've said, I don't have anything to do with them.

All right. I'll take it up with Brandon afterwards. Let's second the short one. Look, you are a sensible guide, David, as I said earlier on, your experience, you understand the corporate world. You as Chairman is the funny word suggests shareholders into subscribing for the prospectus in 2017. However, you represented to shareholders, prospective shareholders, the 3 key managers were going to be Luciano, Tynan and Poiner, 3 key managers. They've all gone. So the whole basis of this totally disasters flow of VG1 is actually now changed because the people that people were back in there [ indiscernible ]. Having regard to that, have you sort of thought about the possibility at law, there's a fundamental breach of contract here, but the contract is not void on the ground party you originally contracted with effectively no longer exists because the guys have gone. Thank you.

Thanks, David. Like a number of your thoughts, that's a spacious construct, and it's just not worth commenting on. Thank you.

David, I think I'm a much better lawyer than you are, David.

Great. I studied engineering.

Charlie.

Charlie.

Thank you, charlie. Welcome.

Just a quick one for David. I think I may have asked it last year, just hoping for some sort of a commitment in terms of how long you will accept the current discount. There's clearly been plenty of discussion today around previous comments that you've made about stating your intention to close the discount, it's failing. Given we're looking at the funds management industry, clearly, if a fund underperforms for a certain amount of time. Brendan, I'm sure you would remove that fund manager from the VGI -- of Master Fund. I'm pretty sure most of that farm has evaporated given shareholders were able to withdraw an NTA. So given it's been 5 years of losses for shareholders of VG1, but you have tolerated the discount has not improved. That's been said at nauseam today despite your thinking that you are doing the right thing. So in my belief, I think it would be the right thing for you to give us a commitment, retiming if we are here in another year and the discount persists the performance remains poor. And the manager continues to get rich while investors get poor. Just hoping you can do the right thing and actually give us a commitment, retiming when either you would pass on the baton to somebody else to [ indiscernible ] as we suggested or actually doing something that other managers have done, which clearly has worked in closing the discount. So just looking for you to do the right thing and give us a commitment, please?

Yes. Thanks, Charlie. No, I can't do that. Thank you.

Okay.

Okay. I think we'll now move to the votes. As you can see on the screen, the proxy shows -- the proxy votes are shown. Open proxies in favor of the Chairman meeting at the time of the meeting will be voted in favor of the resolution. Adjusting for the 76,226,996 votes in favor, 50,396 other proxy discretion and 2,491,625 against. This equates to 96.8% in favor, 0.1% other proxy discretion and 3.1% against. Could everyone who is eligible, now please complete your vote for resolution 2? Thank you. I'd like to now hand this back to David Jones to chair the remainder of the AGM. Thanks.

Great. Thanks, Lawrence. Now Resolution 3, Adelaide. Look, and I really will ask, given that nearly all the questions have come from Malcolm, David and Charlie. We do have another meeting starting at 3:00 p.m. So we're pleased. The commentary is noted, but let's just get to any questions. So we'll move now to Resolution 3. With regard to this resolution, Adelaide McDonald was appointed the Board on 1 July 2019. Ms. McDonald is retiring by rotation and being eligible and for reelection in accordance with 6.7 of the company's constitution. Ms. McDonald's details are set out in explanatory memorandum of the notice of meeting, and they are shown here on this slide. In summary, Ms. Mcdonald have got 15 years in corporate advisory and equity research Ms. McDonald is currently a non-Exec Director of Extech Limited, an independent non-Exec Director of Legal Asian Investments Limited and an Executive Director of MDH Proprietary Limited, one of -- one of Australia's largest integrated beef producers. In addition, McDonald has been a Director at KPMG in the mergers and acquisitions practice in previous roles at Wilson and HTM and BDO Kendalls. Ms. McDonald is also a member of VG1's Audit Risk Committee. The Board, with Ms. McDonald Staying, supports the reelection of Ms. McDonald as a director. I now move Adelaide McDonald be reelected as Director of the company. Rebecca, are there any online questions for this resolution?

None online.

Anything on the phone, please?

There are no phone questions.

Anything in the room, please. Malcolm?

Thanks, David. Again, going for you with the discount discussion franking credits...

Malcolm please go straight to the question.

About the 25% market buyback, which hasn't really given the sugar hit that you thought in March. But that tells me of 2 things. It's not enough and it doesn't fix the underlying discount environment where performance and reputation is also under pressure.

Malcolm.

It says that you have 15 years of experience in corporate advisory and equity research. Congratulations. In addition, you've held the Director of KPMG.

Malcolm, get to the question, please.

My question, David, for Adelaide is this. If you were not a Director of VG1, and you were still a corporate adviser of KPMG [ indiscernible ]. How would you go about advising the Board of VG1? And can you describe in your own words because we haven't heard much from you at any meeting, especially today, describe in your own words, what good capital management looks like? And how would you advise the Board to permanently eliminate the discount to give shareholders access to NTA? Please don't tell me that it's a 25% on market buyback.

Thanks, Malcolm. The capital management that the Board is put forward in the resolution today is to take a 25% -- is for 25% buyback. So that would be my recommendation.

Thank you. David? And please straight to the question. I know it's not easy for you to do. Go to the question -- go to the last sentence.

As I said I'm a great lawyer, David, [ indiscernible ]. I have 2 questions, Adelaide. What have you personally done to earn your directors team to allow investors access to NTA? And secondly, which is an interrelated part of the question. Why do you personally think David Jones's promise to remove the NTA discount has not been fulfilled?

I actively contribute to the Board amongst all the discussions and in particular, with the resolution that's being put up towards the buyback. So I believe I actively contribute otherwise, I wouldn't be putting myself back up for reelection. As for your second part, I'm not going to comment on the conversations you had with David Jones.

Thanks, Adelaide. Okay. I think that's it. Thanks for being briefer than usual Malcolm and David. Let's go, let's go, let's go. I'll now show the proxy votes on the screen, open proxy to the chair of the meeting at time of the meeting for the media resolution adjusted for those, there are 76,870,664 in favor. 50,396 other proxy discretion and 2,375,620 against. This equates to 96.9% in favor, 0.1% on the proxy discretion, 3% against. anyone is now out to please complete your vote on resolution 3. I'll now move to Resolution 4, approval of additional capacity for the on-market buyback. The background of this resolution set out in the expanded notice that may have taken as read. I'll touch on the key points as stated in the meeting. The Board is supportive on market buyback program on the basis that is accretive to shareholders when conducted at a discount and provides additional liquidity to those seeking to trade. This resolution seeks shareholder approval to undertake an on-market buyback of up to 82,607,530 shares in the company over a 12-month period following approval of this resolution. This amount represents 25% of the shares on issue of the company as at 9 October 2023 being the last practical day prior to the finalization of the notice of meeting. The reason for the resolution is that the company's existing on-market buyback program is currently being conducted according to what is commonly called the 10.12 limit of the Corps Act. This allows the company to buy back shares on market without shareholder approval provided that the total number of shares bought back does not exceed 10% of the smallest number of votes attaching to voting shares on issue during the previous 12 months. Gaining shareholder approval, resolution 4 will materially increase the company's ability to buy back shares, providing additional flexibility for its capital management program. The Board recommends that shareholders vote in favor of resolution 4. I'll now move resolution 4. Rebecca?

Nothing online.

Nothing? On the phones?

There are no phone questions at this time.

Thank you. Malcolm, straight to the last sentence.

This is going to solve the fundamental issue today.

What's the question, Malcolm?

VG1 is a broken business.

Malcolm. This is unfair to RGH shareholders. You have to get to the question.

There are 3 dot points and 1 question.

Get to the question.

The same title of...

Malcolm, I am able to turn your microphone off, mate. What's the question? What's the question? Malcolm, you are being rude to everyone, including RGH shareholders. What's the question? What's the question? Then you can make your statements.

If this resolution is approved, and if in say, 6 months from now, May next year, are you with me, the prevailing discount is more than 5%. Will you propose a restructure to shareholders that allows redemptions at NTA? And by that, I mean you start the preparation work now to be in a position to announce an AGM in June to approve a restructure to a listed or unlisted unit trust. It's not brain surgery, but a fix to the chronic.

Thank thanks, Malcolm. Thanks.

Will you do it?

No. Are there any other questions? Thank you. Okay. We will now go to the votes. I'll now share the -- Charlie?

Quick question. Yes. Can you point to some examples, please, in which a 25% discount has worked for other managers? There have been plenty of examples of off-market buybacks at NTA, which certainly supported the share price.

As I said earlier, Charlie, our view is there are 3 things that we are focused on the sale to seeking to compress and hopefully eventually removing any discount in investment performance, improved IR communications and capital management. Part of capital management is steady and growing dividends, and the other part is a buyback. We have hit the ceiling on the 10.12 rule. As I've said, multiple times, we're increasing the capacity to add that element.

I Just appreciate it. I presume you've done the research to understand.

We've done plenty of research. Thank you.

I have taken this approach.

thank you. We've done.

Any point to those , this is...

This is the view that we are taking. Buybacks are part of our arsenal here, and we're seeking a bit more capacity.

So you will be the exception given that everyone else...

We shall see what happens. Thanks, Charlie. Thanks, Mate. Okay. So I'll show the proxies on the screen. Open proxies in favor of the chair will be voted in favor. Adjusting for this, there's 75,962,110 in favor, 50,396 other proxy discretion, 62,001 against. So this equates to a 99.9% vote in favor, 0.1% or the proxies were 0.1% against. But anyone who's now eligible, please complete resolution 4. I'll now move to resolution 5, approval for the issues of shares under the reinvestment mechanism. The background of this resolution is set out and exposed in referendum of the notice of meeting we've taken this read, but I'll touch on the key points. In summary, when VG1 was established, the manager implemented a mechanism would further align its key staff with VG1 shareholders. As a result, the 3 original principles of VGI Partners were required to reinvest back into VG1 shares. 100% of their share of their after-tax performance fees that VGI Partners has earned from VG1. To be clear, this means they are paying for these additional VG1 shares. They are not obtained for free. This mechanism has continued to be in place post the merger of VGI and Regal to form Regal partners. As these arrangements can involve the issuance of new VG1 shares to related parties, we are required to seek shareholder approval for this element of the reinvestment mechanism every 3 years. The Board recommends that shareholders vote in favor of resolution 5. I will now move resolution 5.

Nothing online. Thank you.

Okay. Nothing on the phones?

There are no phone questions at this time.

Okay. Anything in the room? It doesn't seem like it. Okay. Thank you. I'll now show the proxies on the screen. Open proxies in favor of the chair meeting at the time, so will be voted in favor. Adjusting for these, there are 62,877,267 in favor, 50,396 other proxy discretion and 2,343,473 against, that equates to 96.5% in favor, 0.1% other proxies, 3.4% against. Everyone who is now eligible to vote, please complete your vote on resolution -- that should be 5, I think, says 4 -- Resolution 5. Okay. I'm going to suggest we don't go have any general questions. I think we're going to have a 5-minute break. So I'm going to go straight to the wrap-up. One online. Okay. Go.

Just with regard to the dividend policy, there's a question regarding the consultation on dividend policy and whether there was any consult on other options, including a wind up or open-ended conversion? They've noted that the discount has widened since the change in the dividend policy. A question on online.

Okay. Thank you. So look, as we've discussed, the sort of board is constantly considering all options for closing the discount. And so we are continually focused on that. And our view is that dividends are absolutely a part of that, and we're pleased to have increased it from 4.5% to 5% hopefully, as franked as possible. So with that, everyone, that will conclude the general questions. In case you have not completed your voting during the meeting, I will now give you a moment to finalize your voting. As mentioned earlier, Boardroom, could you just keep it down a bit, David, please? VG1 shares will conduct a poll using the voting cards that you have submitted today in this room, the online votes that you submit and the votes that were cast online before the meeting. If there is any person in the room who believes they entitled to vote but haven't registered to vote, would you please raise your hand for assistance? As a reminder, for those in the room, the person entitled to vote on this poll are all shareholders and proxy holders holding blue cards. On the reverse of your blue admission card is your voting paper and instructions. Let's ensure you print your name where indicated and on the voting paper. When you have finished filling in your voting card, please provide it to Boardroom staff to ensure your votes are counted. The Boardroom staff will also be able to help you if you need additional time or other assistance. If you do require any help, please raise your hand. Have all votes been cast? I now declare, I think that the poll is closed. Are you good, Gents? Okay. If you vote head, we'll declare the poll closed. If Boardroom could -- we've got a couple of gentlemen here with cards. Could someone maybe just grab the Boardroom guy. I'll just have a -- we'll keep the poll open, so everyone can vote that has one. As I've said earlier, today's AGM results we released to the market and made available on VG1's website later today. Here comes -- hang on, a quiet Boardroom. There's Boardroom with their Magic Box. So please hold up your blue card if you've got one. There's one down the front, here. I think there's one over to you over there, beck just to make sure the guy sees that guy near the door. Okay. Thank you. Look, so we'll declare the poll closed. Thanks, everyone, for attending, for voting. So I'll declare this meeting closed. I'll thank you all for attending reach out to IR or to us if you have any questions about our company. Thank you.