Annual General Meeting

Notice of annual general meeting of shareholders

Discovery Holdings Limited
Registration number: 1999/007789/06)
ISIN: ZAE000022331
Share code: DSY
(the Company)

Notice is hereby given in terms of section 62(1) of the Companies Act No. 71 of 2008, (Companies Act) that the twelfth Annual General Meeting of the Company will be held in the Auditorium, Ground Floor, 155 West Street, on Tuesday, 6 December 2011 at 12h00 to – (i) consider and, if deemed fit to pass, with or without modification, the resolutions set out below; and (ii) deal with such other business as may be dealt with at the Annual General Meeting.

The Board of Directors of the Company has determined that the record date for the purpose of determining which shareholders of the Company are entitled to receive notice of the twelfth Annual General Meeting was Friday, 21 October 2011, and the record date for purposes of determining which shareholders of the Company are entitled to participate in and vote at the Annual General Meeting is Friday, 2 December 2011. Accordingly, only shareholders of the Company who are registered in the securities register of the Company on Friday, 2 December 2011 will be entitled to participate in and vote at the Annual General Meeting. Therefore the last day to trade in the Company’s shares in order to be recorded on the securities register of the Company in order to be able to attend, participate in and vote at the Annual General Meeting is Friday, 25 November 2011.

Electronic participation in the Annual General Meeting
Please note that the Company intends to make provision for shareholders of the Company, or their proxies, to participate in the Annual General Meeting by way of electronic communication. In this regard, shareholders or their proxies may participate in the Annual General Meeting by way of a teleconference call and, if they wish to do so:

• must contact the Company Secretary (by email at the address thysb@discovery.co.za) no later than 12h00 on Friday, 2 December 2011 in order to obtain dial-in details for that conference call; and

• will be required to provide reasonably satisfactory identification. Forms of identification include a green bar-coded identification document issued by the South African Department of Home Affairs, a driver’s licence or a valid passport.

Please note that the costs of the electronic communication described above will be for the account of the Company.

Shareholders who have not dematerialised their shares or who have dematerialised their shares with “own-name” registration are entitled to attend and vote at the Annual General Meeting. Any such shareholder is entitled to appoint one or more proxy or proxies to attend, participate in and speak and vote at the Annual General Meeting in his/her/its stead. A proxy does not have to be shareholders of the Company.

Kindly note that, meeting participants (including proxies) are required in terms of section 63(1) of the Companies Act to provide reasonably satisfactory identification before being entitled to attend or participate in the Annual General Meeting. Forms of identification include a green bar-coded identification document issued by the South African Department of Home Affairs, a driver’s licence or a valid passport.

This notice of the Annual General Meeting includes the attached proxy form. The attention of shareholders is directed to the additional notes and instructions relating to the attached form of proxy, which notes and instructions are set out in the form of proxy.

Memorandum of Incorporation
Until the Companies Act came into effect on 1 May 2011, the Memorandum of Incorporation (MOI) of the Company comprised its Memorandum of Association and Articles of Association. On the date that the Companies Act came into effect, the Memorandum of Association and Articles of Association of the Company became the Company’s MOI. Accordingly, for consistency of reference in this Notice of Annual General Meeting, the term MOI” or “Memorandum of Incorporation” is used throughout to refer to the Company’s MOI (which previously comprised the Company’s Memorandum of Association and Articles of Association, as aforesaid).

All references in this Notice of Annual General Meeting (including all of the ordinary and special resolutions contained herein) to the Company’s MOI refer to provisions of that portion of the Company’s Memorandum of Association and/or Articles of Association (as the case may be).

Ordinary resolutions

1. Consideration of Annual Financial Statements

Ordinary Resolution Number 1
Resolved that the audited Annual Financial Statements, including the Directors’ Report, Auditor’s Report and the Report by the Audit and Risk Committee of the Company and the Group for the year ended 30 June 2011 are accepted.

Additional information in respect of Ordinary Resolution Number 1
The complete audited Annual Financial Statements, including the Directors’ Report, Auditor’s Report and the Report by the Audit and Risk Committee, of the Company and the Group for the year ended 30 June 2011, are included in the Integrated Annual Report of which this notice forms part.

2. Re-appointment of External Auditor

Ordinary Resolution Number 2
Resolved that PricewaterhouseCoopers Inc. is re-appointed, as the independent External Auditor of the Company, as nominated by the Company’s Audit and Risk Committee, until the conclusion of the next Annual General Meeting. It is noted that Mr Andrew Taylor is the individual registered auditor who will undertake the audit for the financial year ending 30 June 2012.

Additional information in respect of Ordinary Resolution Number 2
In accordance with section 90 of the Companies Act, PricewaterhouseCoopers Inc. is proposed to be re-appointed as the External Auditors of the Company, as nominated by the Company’s Audit and Risk Committee, until the conclusion of the Company’s next Annual General Meeting.

3. Election of independent Audit and Risk Committee

Ordinary Resolution Number 3 (comprising Ordinary Resolutions Number 3.1 to 3.3 (inclusive))
Resolved that by way of separate ordinary resolutions each of –

3.1 Mr Les Owen, who is an independent Non-executive Director of the Company, be and is hereby elected as a member and the Chairperson of the Company’s Audit and Risk Committee for the financial year ending 30 June 2012, subject to his re-election as a Director pursuant to Ordinary Resolution Number 4.3.

3.2 Ms Sindi Zilwa, who is an independent Non-executive Director of the Company, be and is hereby elected as a member of the Company’s Audit and Risk Committee for the financial year ending 30 June 2012.

3.3 Ms Sonja Sebotsa, who is an independent Non-executive Director of the Company, be and is hereby elected as a member of the Company’s Audit and Risk Committee for the financial year ending 30 June 2012, subject to her re-election as a Director pursuant to Ordinary Resolution Number 4.4.

Additional information in respect of Ordinary Resolution Number 3
In terms of section 94(2) of the Companies Act the Audit Committee is a committee elected by shareholders at each Annual General Meeting. A brief CV of each of the independent Non-executive Directors mentioned above appear on pages 98 to 99 of the Integrated Annual Report of which this notice forms part of. In terms of the Companies Act Regulations, at least one-third of the members of the Company’s Audit Committee must have academic qualifications, or experience in economics, law, corporate governance, finance, accounting, commerce, industry, public affairs or human resource management. The Board of Directors of the Company is satisfied that the Company’s Audit Committee members are suitably skilled, experienced as contemplated in Regulation 42 of the Companies Regulations and collectively they have the sufficient qualifications and experience to fulfil their duties as contemplated in section 94(7) of the Companies Act.

4. Re-election and appointment of Directors

Ordinary Resolution Number 4 (comprising Ordinary Resolutions Number 4.1. to 4.6 (inclusive))
Mr Les Owen, Ms Sonja Sebotsa, Dr Vincent Maphai and Ms Tania Slabbert all retire in accordance with article 30.1 of the Company’s MOI and, being eligible, offer themselves for re-election. Mr Jannie Durand and Dr Ayanda Ntsaluba have been appointed by the Board of Directors of the Company to the Board of Directors of the Company and are nominated for election by shareholders as Directors of the Company. Accordingly, shareholders are requested to consider and, if deemed fit, to re-elect Mr Les Owen, Ms Sonja Sebotsa, Dr Vincent Maphai and Ms Tania Slabbert and to confirm the appointment of Mr Jannie Durand and Dr Ayanda Ntsaluba as Directors appointed to the Board of Directors of the Company by way of passing the separate ordinary resolutions set out below:

Ordinary Resolutions Number 4.1 to 4.6 (inclusive)
Directors appointed during the year:

4.1 Resolved that Mr Jannie Durand be and is hereby elected as a Non-executive Director of the Company;

4.2 Resolved that Dr Ayanda Ntsaluba be and is hereby elected as an Executive Director of the Company;

Directors retiring by rotation:

4.3 Resolved that Mr Les Owen who retires in terms of article 30.1 of the Company’s Memorandum of Incorporation and who, being eligible, offers himself for re-election, be and is hereby re-elected as a Director of the Company;

4.4 Resolved that Ms Sonja Sebotsa who retires in terms of article 30.1 of the Company’s Memorandum of Incorporation and who,    being eligible, offers herself for re-election, be and is hereby re-elected as a Director of the Company;

4.5 Resolved that Dr Vincent Maphai who retires in terms of article 30.1 of the Company’s Memorandum of Incorporation and who, being eligible, offers himself for re-election, be and is hereby re-elected as a Director of the Company; and

4.6 Resolved that Ms Tania Slabbert who retires in terms of article 30.1 of the Company’s Memorandum of Incorporation and who, being eligible, offers herself for re-election, be and is hereby re-elected as a Director of the Company.

Additional information in respect of Ordinary Resolutions Number 4.1 to 4.6
Article 30.10 of the Company’s MOI provides that any person appointed as a Director of the Company by the Board to fill a casual vacancy or as an additional Director shall retire at the following Annual General Meeting in addition to the Directors retiring by rotation in terms of article 30.1. Article 30.1 provides that one third of the Company’s Directors shall retire at every Annual General Meeting. Therefore, the reason for the proposed Ordinary Resolutions Number 4.1 to 4.6 (inclusive) is to elect, in accordance with the Company’s MOI and by way of a series of votes, each of which is on the candidacy of a single individual to fill a single vacancy, as required by section 68(1) of the Companies Act, Mr Les Owen, Ms Sonja Sebotsa, Dr Vincent Maphai, Ms Tania Slabbert, Mr Jannie Durand and Dr Ayanda Ntsaluba as directors of the Company. The effect of Ordinary Resolutions 4.1 to 4.6 (inclusive) is that Mr Les Owen, Ms Sonja Sebotsa, Dr Vincent Maphai, Ms Tania Slabbert, Mr Jannie Durand and Dr Ayanda Ntsaluba will be elected as Directors of the Company. A brief CV of each of the Directors mentioned above appears on pages 98 to 99 of the Integrated Annual Report of which this notice forms part.

Approval of Group remuneration policy

Ordinary Resolution Number 5
Resolved that the Group remuneration policy, as described in the Remuneration Report on pages 112 to 114 of the Integrated Annual Report of which this notice forms part of, is hereby approved by way of a non-binding advisory vote, as recommended in the King Code of Governance for South Africa 2009, commonly referred to as King III.

Additional information in respect of Ordinary Resolution Number 5
In terms of King III recommendations, every year, the Company’s remuneration policy should be tabled for a non-binding advisory vote at the Annual General Meeting. The non-binding advisory vote is to enable shareholders to express their views on the remuneration policies adopted in the remuneration of executive directors and on their implementation. Accordingly, the shareholders are requested to endorse the Company’s remuneration policy as recommended by King III.

6. Authority to implement special and ordinary resolutions

Ordinary Resolution Number 6
Resolved that any Director of the Company be and is hereby authorised to do all such things, sign all such documents and take all such actions as may be necessary for or incidental to the implementation of the ordinary and special resolutions to be proposed at the Annual General Meeting convened to consider this ordinary resolution.

Additional information in respect of Ordinary Resolution Number 6
The reason for Ordinary Resolution Number 6 is to authorise any Director to attend to the necessary to implement the special and ordinary resolutions passed at the Annual General Meeting and to sign all documentation required to record the special and ordinary resolutions. The effect of Ordinary Resolution Number 6 is that any Director will be authorised to attend on behalf of the Company.

Special resolutions

1. Approval of Non-executive Directors’ remuneration – 2011/2012

Special Resolution Number 1
Resolved that payment of the following fees be approved as the basis for calculating the remuneration of the Non-executive Directors for their services as Directors of the Company for the financial year ending 30 June 2012:

Additional information in respect of Special Resolution Number 1
In terms of section 66(8) and (9) of the Companies Act, which took effect on 1 May 2011, remuneration may only be paid to Directors for their services as Directors in accordance with a special resolution approved by the shareholders within the previous two years and if not prohibited in terms of the Company’s MOI. Therefore, the reason for and the effect of Special Resolution Number 1 is to approve the payment of and the basis for calculating the remuneration payable by the Company to its Non-executive Directors for their services as Directors of the Company for the period ending 30 June 2012 in terms of section 66 of the Companies Act. The fees payable to the Non-executive Directors are detailed above. Further details on the basis of calculation of the remuneration are included in the Remuneration Report on page 114 of the Integrated Annual Report of which this notice forms part of.

2. General authority to repurchase shares

Special Resolution Number 2
Resolved that the Board is hereby authorised by a way of a renewable general authority, in terms of the provisions of the JSE Listings Requirements and as permitted in the Company’s MOI, to approve the purchase of its own ordinary shares by the Company, and the purchase of ordinary shares in the Company by any of its subsidiaries, upon such terms and conditions and in such amounts as the Board may from time to time determine, but subject to the MOI of the Company, the provisions of the Companies Act and the JSE Listings Requirements, when applicable, and provided that:

2.1 the general repurchase by the Company and/or any subsidiary of the Company of ordinary shares in the aggregate in any one financial year do not exceed 5% of the Company’s issued ordinary share capital as at the beginning of the financial year, provided that the acquisition of shares as treasury stock by a subsidiary of the Company shall not be effected to the extent that in aggregate more than 10% of the number of issued shares in the Company are held by or for the benefit of all the subsidiaries of the Company taken together;

2.2 any repurchase of securities will be effected through the order book operated by the JSE trading system and done without any prior understanding or arrangement between the Company and the counter party (reported trades are prohibited);

2.3 this authority shall only be valid until the Company’s next Annual General Meeting, provided that it shall not extend beyond 15 months from the date this resolution is passed;

2.4 the Company will only appoint one agent to effect any repurchase(s) on its behalf;

2.5 general repurchases by the Company and/or any subsidiary of the Company in terms of this authority, may not be made at a price greater than 10% above the weighted average of the market value at which such ordinary shares are traded on the JSE, as determined over the 5 business days immediately preceding the date of the repurchase of such ordinary shares by the Company and/or any subsidiary of the Company;

2.6 any such general repurchases are subject to exchange control regulations and approvals at that point in time, where relevant;

2.7 a resolution has been passed by the Board of the Company and/or any subsidiary of the Company confirming that the Board has authorised the repurchase, that the Company satisfied the solvency and liquidity test contemplated in the Companies Act, and that since the test was done there have been no material changes to the financial position of the Group;

2.8 the Company and/or any subsidiary of the Company may not repurchase securities during a prohibited period, as defined in the JSE Listings Requirements, unless the Company has a repurchase programme in place where the dates and quantities of securities to be traded during the relevant period are fixed and not subject to any variation and full details of the programme have been disclosed in an announcement over SENS (the Securities Exchange News Service) prior to the commencement of the prohibited period; and

2.9 a press announcement will be published giving such details as may be required in terms of the JSE Listings Requirements as soon as the Company and/or any subsidiary has cumulatively repurchased 3% of the number of shares in issue at the date of the passing of this resolution, and for each 3% in aggregate of the initial number of shares acquired thereafter.

The Board is of the opinion that this authority should be in place should it become appropriate to undertake a share repurchase in the future, in particular the repurchase of shares by a subsidiary of the Company for purposes of employee share schemes. The Board undertakes that it will not implement the proposed authority to repurchase shares, unless the directors are of the opinion that, for a period of 12 months after the date of the repurchase:

2.10 the Company and the Group will be able in the ordinary course of business to pay its debts;

2.11 the assets of the Company and the Group, fairly valued in accordance with International Financial Reporting Standards, will be in excess of the liabilities of the Company and the Group;

2.12 the share capital and reserves of the Company and the Group will be adequate for ordinary business purposes; and

2.13 the working capital of the Company and the Group will be adequate for ordinary business purposes.

The Company will ensure that its sponsor has confirmed the adequacy of the Company’s working capital in writing to the JSE in terms of the JSE Listings Requirements, prior to entering the market to proceed with a repurchase.

Additional information in respect of Special Resolution Number 2
The reason for and the effect of Special Resolution Number 2 is to grant the Company’s Board of Directors a general authority in terms of the JSE Listing Requirements, up to and including the date of the following Annual General Meeting of the Company (provided that it shall not extend beyond 15 months from the date the resolution is passed), to approve the Company’s purchase of shares in itself, or to permit a subsidiary of the Company to purchase shares in the Company and to authorise the Company or any of its subsidiaries to acquire shares issued by the Company in terms of the aforesaid approval. Please refer to the additional disclosure of information contained in this notice, which disclosure is required in terms of the JSE Listings Requirements.

3. Financial assistance in terms of section 44 and 45 of the Companies Act

Special Resolution Number 3
Resolved that, to the extent required by the Companies Act, the Board of Directors of the Company may, subject to compliance with the requirements of the Company’s MOI, the Companies Act and the JSE Listings Requirements, each as presently constituted and as amended from time to time, authorise the Company to provide direct or indirect financial assistance as contemplated in section 44 and/or section 45 of the Companies Act by way of loans, guarantees, the provision of security or otherwise, to –

3.1 any of its present or future subsidiaries and/or any other company or corporation that is or becomes related or inter-related to the Company for any purpose or in connection with any matter, including, but not limited to, the subscription of any option, or any securities issued or to be issued by the Company or a related or inter-related company, or for the purchase of any securities of the Company or a related or inter-related company as contemplated in terms of section 44 of the Companies Act;

3.2 any of its present or future Directors or Prescribed Officers (or any person related to any of them or to any company or corporation related or inter-related to any of them), or to any other person who is a participant in any of the Group’s share or other employee incentive schemes, for the purpose of, or in connection with, the subscription of any option, or any securities, issued or to be issued by the Company or a related or inter-related company, or for the purchase of any securities of the Company or a related or inter-related company, where such financial assistance is provided in terms of any such scheme that does not satisfy the requirements of section 97 of the Companies Act, such authority to endure until the forthcoming Annual General Meeting of the Company.

Additional information in respect of Special Resolution Number 3
Notwithstanding the title of section 45 of the Companies Act, being “Loans or other financial assistance to directors”, on a proper interpretation, the body of the section may also apply to financial assistance (as such term is defined therein) provided by a company to related or inter-related companies and corporations, including, inter alia, its subsidiaries, for any purpose.

Furthermore, section 44 of the Companies Act may also apply to financial assistance provided by a company to related or inter-related companies, in the event that the financial assistance is provided for the purposes of, or in connection with, the subscription of any options, or any securities, issued or to be issued by the Company or a related or inter-related company, or for the purchase of any securities of the Company or related or inter-related company.

Both section 44 and section 45 of the Companies Act provide, inter alia, that the particular financial assistance must be provided pursuant to a special resolution of the shareholders, adopted within the previous two years, which approved such assistance either for the specific recipient, or generally for a category of potential recipients, and the specific recipient falls within that category and that the Board of Directors must be satisfied that – (i) immediately after providing the financial assistance, the Company would satisfy the solvency and liquidity test; and (ii) the terms under which the financial assistance is proposed to be given are fair and reasonable to the Company.

Therefore, the reason for Special Resolution Number 3 is to obtain approval from the shareholders to enable the Company to provide financial assistance, when the need arises, in accordance with the provisions of sections 44 and 45 of the Companies Act. The effect of Special Resolution Number 3 is that the Company will have the necessary authority to authorise and provide the financial assistance as and when required.

The Board undertakes that, in so far as the Companies Act requires, it will not adopt a resolution to authorise such financial assistance, unless the directors are satisfied that

(i) immediately after providing the financial assistance, the Company would satisfy the solvency and liquidity test as contemplated in the Companies Act; and

(ii) the terms under which the financial assistance is proposed to be given are fair and reasonable to the Company.

To transact any other business that may be transacted at an Annual General Meeting

Additional disclosure of information

For the purposes of considering Special Resolution Number 2 and in compliance with the JSE Listings Requirements, the information listed below has been included in the Integrated Annual Report, in which this Notice of Annual General Meeting is included and forms part, at the following places:

• Directors and management
Refer to page 101 of the Integrated Annual Report.

• Major shareholders of the Company
Refer to page 249 of the Integrated Annual Report.

• Directors’ interests in securities
Refer to page 248 of the Integrated Annual Report.

• Share capital of the Company
Refer to page 242 of the Integrated Annual Report.

• Litigation statement
In terms of section 11.26 of the JSE Listings Requirements, the directors, whose names appear on pages 98 to 101 of the Integrated Annual Report, are not aware of any legal or arbitration proceedings, including proceedings that are pending or threatened, that may have or have had in the recent past, being at least the previous 12 months, a material effect on the Group’s financial position.

• Directors’ responsibility statement
The Directors, whose names appear on pages 98 to 101 of the Integrated Annual Report, collectively and individually accept full responsibility for the accuracy of the information pertaining to Special Resolution Numbers 2 [and 3] and certify that to the best of their knowledge and belief there are no facts that have been omitted which would make any statement false or misleading, and that all reasonable enquiries to ascertain such facts have been made and that Special Resolution Number 2 contains all information required by law and the JSE Listings Requirements.

Approvals required for resolutions
Ordinary Resolutions Number 1 to 6 contained in this Notice of Annual General Meeting require the approval by more than 50% of the votes exercised on the resolutions by shareholders present or represented by proxy at the Annual General Meeting, and further subject to the provisions of the Companies Act, the Company’s MOI and the JSE Listings Requirements.

Special Resolutions Number 1 to 3 contained in this Notice of Annual General Meeting require the approval by at least 75% of the votes exercised on the resolutions by shareholders present or represented by proxy at the Annual General Meeting, and further subject to the provisions of the Companies Act, the Company’s MOI and the JSE Listings Requirements

Attendance and voting by shareholders or proxies
The record date on which shareholders of the Company must be registered as such in the Company’s securities register, which date was set by the Board of Directors of the Company determining which shareholders are entitled to attend and vote at the Annual General Meeting is Friday, 2 December 2011.

Shareholders who have not dematerialised their shares or who have dematerialised their shares with “own-name” registration are entitled to attend and vote at the Annual General Meeting. Any such shareholder is entitled to appoint one or more proxy or proxies to attend, participate in and speak and vote at the Annual General Meeting in his/her/its stead. The person or persons so appointed as a proxy or proxies need not be a shareholder or shareholders of the Company.

Proxy forms must be lodge with or posted to the Company, PO Box 786722, Sandton 2146 or lodged with the Company’s transfer secretaries, Computershare Investor Services (Proprietary) Limited, 70 Marshall Street, Johannesburg, 2001, South Africa or posted to the Company’s transfer secretaries at PO Box 61051, Marshalltown, 2107, South Africa, so as to be received by them by not later than Monday, 5 December 2011 at 12h00 (South African time) on, being 24 hours before the Annual General Meeting to be held at 12h00 on Tuesday, 6 December 2011 in accordance with article 24 of the Company’s MOI. Any forms of proxy not received by this time must be handed to the chairperson of the Annual General Meeting immediately prior to the commencement of the Annual General Meeting before your proxy may exercise any of your rights as a shareholder at the Annual General Meeting.

Proxy forms must only be completed by shareholders who have not dematerialised their shares or who have dematerialised their shares and registered them in their own name.

Shareholders who have dematerialised their shares, other than those shareholders who have dematerialised their shares with “own-name” registration, should contact their Central Securities Depository Participant (CSDP) or broker in the manner and time stipulated in their agreement, in order to furnish them with their voting instructions or to obtain the necessary authority to attend the Annual General Meeting, in the event

that they wish to attend the Annual General Meeting.

On a poll, every shareholder of the Company shall have one vote for every share held in the Company by such shareholder.

Shares held by a share trust or scheme will not have their votes at the Annual General Meeting taken into account for purposes of resolutions proposed in terms of the JSE Listings Requirements. Shares held as treasury shares may also not vote.

Proof of identification required
Section 63(1) of the Companies Act requires that any person who wishes to attend or participate in a shareholders meeting, must present reasonably satisfactory identification at the Annual General Meeting. Any shareholder or proxy who intends to attend or participate at the Annual General Meeting must be able to present reasonably satisfactory identification at the Annual General Meeting for such shareholder or proxy to attend and participate at the Annual General Meeting. A green bar-coded identification document issued by the South African Department of Home Affairs, a driver’s licence or a valid passport will be accepted as sufficient identification.

Venue
Please take note that the Annual General Meeting will be held in the Auditorium, Ground Floor, 155 West Street, on Tuesday, 6 December 2011 at 12h00.

By order of the Board of Directors of the Company.
MJ Botha
Company Secretary
25 August 2011