Reflections from our non-executive chairperson

Navigating the economic recovery post-covid-19

The COVID-19 pandemic has highlighted the vulnerabilities and inequalities of many parts of our society in South Africa and globally. But it has also opened and created new opportunities and called for a more responsible method to create and sustain businesses. The unemployment rate in contrast has reached a record high of over 34%, therefore impacting the most vulnerable in society.

With the lifting of the COVID-19 lockdown restrictions, the economy endured a further setback from the energy crisis in the country due to continued rolling blackouts by the country’s only provider of energy, Eskom. This situation resulted in sharp increases in the price of petrol and diesel, including a diesel shortage. Most businesses were burdened with additional costs of installing generators and invertors to meet their needs. Disruption to the logistics chain both internationally and domestically delayed economic activities all of which had a negative impact on our economy. This affected many businesses, including AEEI, and we had to adapt to meet these challenges and the changes in the market dynamics.

The South African economy continues to recover albeit more slowly than expected, with growth estimated at 1.9% in 2022. Inflation has increased to a 13-year high at 7.6% at the end of August. The outlook is clouded with risks and sustained reforms and investments are required to support better growth outcomes and poverty alleviation.

Business resilience

It was also a year that AEEI and the Group faced challenges from the banking fraternity which obstructed new investment negotiations and threatened account closures. Despite these legal challenges I am proud to say that AEEI as a Group prevailed and the banking challenges have been legally surmounted and, presently, the banking situation of certain affected accounts is now restored.

As a result of the proactive and timely decisions taken by AEEI, I believe our organisation is stronger now than it ever was before, despite the challenges. I am confident that the Board is committed to ensuring that the Company makes progress and achieves many of its investment goals, with some strategic adjustments planned to meet the uncertainties that face the country going forward.

With the elections on our doorstep in South Africa, the country is also seeing an increase in contestations and political uncertainty. Globally, we have the Russian invasion of Ukraine and, although it may be too early to predict the long-term impact, the cost of petroleum and natural gas has risen sharply and has affected all sectors including agriculture.

Living our purpose of creating a positive impact in the broader community and society, we have supported our employees during the COVID-19 pandemic period and continue to ensure their well-being and safety at work by sanitising and fumigating their workspaces regularly. We created opportunities for them to learn, study and grow and devised succession plans for them to continue to grow within the Group to follow their career paths and aspirations.

Robust governance

The Board is constantly working on transformation and is pleased to advise that AEEI has one of the most transformed executive and board structures in the investment sector.

We created an effective, alert, knowledgeable and ethical governance structure. As the Board, we expect all our stakeholders, including our clients, service providers and employees, to conduct themselves ethically and with integrity and wish to reiterate that AEEI has zero tolerance for kleptocracy and corruption.

Through the Audit and Risk Committee and the internal audit team, we continually revise and improve management oversight and strengthen financial controls, risk strategies and opportunities.

Strengthening board diversity and independence

I am also pleased to advise that our Board continues to increase its targets in respect of race and gender representation. The diversity of our directors ensures that the Board addresses the needs of our stakeholders and interest groups. The AEEI Group adopted a policy to ensure diversity at Board level, specifically relating to race and gender but also in respect of broader diversity attributes such as skills, qualifications, experience, age, and culture. The appointment of Carin-Lee Geuking- Cohausz during the year was made in line with this policy.

Environmental, social and governance (ESG)

Our commitment to sustainable development involved practising responsible citizenship by ensuring that the Group conducted its operations in a manner that meets current needs without compromising the ability of future generations to meet their needs. I am pleased to announce that AEEI was ranked first in its sector from a total of 270 JSE-listed companies by Integrated Reporting & Assurance Services for its disclosure of Environmental, Social and Governance Data in the Financial Services: Investments sector with an overall score of 87.37%.

2022 Focus areas

During this period, we adopted a Climate Change and Human Rights Policy and updated a number of policies including the Code of Conduct and the Code of Ethics. The Board accepts collective responsibility for setting the tone for how ethics and ethical behaviour should be implemented and is committed and adopted an integrated approach to managing the Group. Through the Social, Ethics and Transformation (SET) Committee, the Board was able to oversee that AEEI is a responsible corporate citizen.

As corporate citizens, we continued to support those in society that are most vulnerable and were most impacted by the pandemic through our various CSI initiatives.

At AEEI we take a long-term view and allocate capital for growth and investments with the aim of generating shareholder value over time. The past year management has spent considerable time positioning the business for future growth and is ready to meet the challenging economy facing us in 2023.

Appreciation

I would like to thank you our executive team, led by Valentine Dzvova and Jowayne van Wyk, for their leadership and for navigating and managing the different challenges faced during the year with tenacity, resilience and true grit.

I would also like to thank my fellow non-executive directors and Board members, who provided valuable insight and counsel in maintaining oversight during this time of uncertainty, for their continued support.

I would also like to thank our external stakeholders, sponsors, and our shareholders for their support throughout this period.

Finally, to all our valued employees across the Group, your hard work and commitment is to be commended during this challenging economic period.

Outlook

At AEEI we remain focused, steadfast, motivated, resilient, and ready to weather any storms that will undoubtedly come on our journey.

Understanding our role in this societal value-creation process we acknowledge our duty to enable, transform and empower the people and businesses that make up our economy.

“A change is brought about because ordinary people do extraordinary things.”

– Barack Obama

AZIZA AMOD
Non-executive chairperson