“An investment in knowledge pays the best interest.”
AEEI’s business model and philosophy has resulted in it acquiring control of the majority of its operational investments as well as holding minority equity in strategic investments. This enables it to add value through its extensive expertise and networks, while promoting an entrepreneurial culture within its management structure and staff. Through our assets and investments, we drive the businesses to become efficient on a sustainable basis, which generates revenue, dividends and cash flow to support the Group as a whole.
The investment committee comprises one executive director and three independent non-executive directors who act independently and are appointed by the Board. The chairman of the committee is Professor VC Mehana, with Mr S Young, Mr K Abdulla and Mr TT Hove as members. The company secretary is the secretary of this committee.
The investment committee assists the Board to evaluate opportunities that present themselves to the Group, to advise the Board on such investment opportunities in a transparent manner and to ensure that sufficient consideration has been afforded to such opportunities. However, the Board is responsible for the final decision on all such investments.
AEEI’s investment decisions, across its entire portfolio are driven by the overall objective of creating and growing stakeholder value in a sustainable manner. This is achieved by ensuring all investments, be it acquisitions or organic growth projects, are subjected to review by the investment committee. The committee is well balanced, has legal, financial and strategic expertise. Investments are adjudicated to ensure it has both a strategic fit with synergistic benefits to the current portfolio and that the investment provides an acceptable level of return with a reasonable payback period (based on the specific industry). Strategic road maps per sector invested has been developed within a five-year plan (Vision 2020 Vision) and each investment is adjudicated in line with its contribution to the aggressive growth plan mandated by the Board.
AEEI has become the partner of choice for multinationals seeking a BBBEE partner who brings value through active participation in its businesses. AEEI’s track record of being a Top Empowered Company with top 10 placings in the governance and transparency awards issued by the Integrated Reporting and Assurance Services coupled with performance awards based on Company fundamentals as well as proof of its ability to run its own operational investment portfolio has provided it the credentials to offer itself as one of the top BBBEE partners on the market today.
Through AEEI’s non-controlling strategic investments, the Company is able to add value and influence the business process to create wealth and achieve transformation.
AEEI has a track record of being an empowerment partner of choice. AEEI invests in companies with the following characteristics:
- Strong investment partners that are aligned with our strategic objectives;
- Leading brand;
- Defined growth strategy;
- Successful track record;
- Management expertise required; and
- High-growth sector.
Through its investment portfolio AEEI continues to:
- hold a portfolio of investments in businesses that are diversified;
- acquire control of the majority of its operational investments;
- acquire and maintain non-controlling equity in strategic investments;
- add value, influence business processes, provide management expertise and synergies with existing investments;
- provide capital investment to grow the business;
- ensure above-market shareholder returns;
- provide and maintain high-quality infrastructures and assets;
- create sustainable wealth for all our stakeholders;
- maintain sound corporate governance, business and ethical practices;
- stimulate economic growth by assisting and adding value to SMMEs;
- promote an entrepreneurial culture; and
- be open and transparent in its reporting.
For the period under review, the committee concluded the following investments:
- 25% + 1 share in Saab Grintek Defence (Pty) Ltd;
- The acquisition of shares in Sygnia Ltd; and
- Conclusion of various JVs in agriculture and food and fishing, including international IP and patent transfers.
The following post-balance sheet investments were concluded:
- 51% of Kalula Communications (Pty) Ltd
- 57% of Puleng Technologies (Pty) Ltd
The committee is currently in negotiations around new opportunities with a significant increase in deal flow that still have to be adjudicated and concluded if the investment criteria is satisfied. Prior to the conclusion of any new opportunities the investment committee ensures that negotiations:
- Are transparent;
- Indicative proposals are in line with the AEEI Group’s policy;
- Risks and risk appetite is evaluated;
- A formal due diligence is conducted in terms of legal, technical and the financial aspect;
- Agreements are reviewed by the legal team; and
- The Board is appraised of any developments prior to conclusion.
The committee is satisfied that is has fulfilled all its statutory duties assigned by the Board for the period under review. The chairman of the investment committee reports to the Board on the activities of the committee at Board meetings.