STRATEGIC RESPONSE

Delivering on our strategy

One of our key material matters is to create sustainable value for all our stakeholders and integrate sustainable development into strategy, governance, management, and reporting, with the strategic objective of reducing our negative impact on the environment. Our financial strategy is to grow through acquisitions and the leveraging of the existing portfolio by maximising the net asset base and improving cash generation, thereby growing income sustainably and managing costs.

Purpose

We exist to empower previously disadvantaged individuals through job creation and maximising shareholder wealth generation through strategic investments

Vision

Our vision is to be a dynamic and innovative company that creates superior stakeholder value

OUR STRATEGIC AMBITIONS
Employer of choice
Sustainable business units
Innovative and sustainable products and solutions
Maintain zero operational fatalities

DELIVERING ON OUR STRATEGY

Optimising our assets to sustain our business
Operating our asset base to its fullest potential
Growth of our businesses

STRATEGIC FOCUS AREAS

Unlock infrastructure to support the business over the short-, medium-, and long-term
Identifying and realising opportunities based on our Group’s asset base
Remain competitive through a reduced cost base Use of technology to remain competitive Creative business development

KEY ENABLERS

Access to capital to enable support of the growth of our existing business and the ability to acquire more businesses
Leadership and culture – embedding a culture that fosters diversity, innovation, organisational effectiveness, employee health and safety
Committed employees who believe in the Company and its purpose
Stakeholders – engaging with key stakeholders for advice and support
Product – quality and consistency
Efficient operational activities to meet customer demands

Our operating context

The economy is still reeling from the effects of the COVID-19 pandemic and trading conditions such as lower business confidence, supply shortages, load shedding, inflationary pressures, foreign exchange volatility, civil unrest, the high cost of fuel, flooding, poverty, high unemployment, and the recent Ukraine-Russia war affected major supply industries. Economic recovery is likely to be slow across all markets and would require significant investment to stimulate growth. Our Group operated within this context in addition to unique challenges as the banking issues we currently face. It was our focus to stabilise the business within this tough context and preserve value for all our stakeholders.

The health, safety, and well-being – including the mental health of employees and “the new way of work” – remain a key priority for us.

During the year, the Board had to review its operational plans towards achieving its strategy and objectives, identifying crucial focus areas, and modernising our infrastructure.

Our executive management was responsible for developing and refining the Company’s strategy, in collaboration with the Board, through observing the volatile Macroeconomic environment and regularly assessing the short- to medium term impact on our business. This included evaluating external factors, liquidity of our clients, our cash requirements, and ways to contain costs. In addition, executive management was responsible for implementing the strategy with the Board’s oversight. The strategy includes the impact on the six capitals, the risks and opportunities facing the Company, and how the strategy is underpinned by the principles of sustainability and stewardship.

Creating value through relationships

Our report extends beyond financial reporting and includes non-financial performance, opportunities, risks, and outcomes attributable to or associated with our key stakeholders. Our financial performance is a result of how we interacted with all our various stakeholders.

The Group had challenges in its relationship with banking institutions, and we engaged with banking institutions in this regard and kept all our stakeholders abreast of developments in these engagements. We maintained communication with the JSE on listing and regulatory issues throughout the year, seeking their advice on transactions and responding to any concerns raised.

Our engagement with suppliers enabled us to ensure consistent delivery of products and services and better manage our working capital through negotiated terms. We also supported our suppliers by making payments on time. Our clients partnered with us and ensured that they paid us on time, which helped us manage our liquidity. Our commitment to creating strong bonds with our stakeholders based on mutual respect and understanding remains unwavering.

Through our various operations, we will continue to explore opportunities to maximise our Group’s capital and operational efficiencies and play our part in creating long-term stakeholder value.

Material matters impacting our strategy

The 2022 financial year was characterised by uncertain geopolitical and socioeconomic growth factors, a challenging operating environment, evolving stakeholder needs and low growth, which has impacted our strategy. Our materiality process includes identifying, assessing, compiling, prioritising, deliberating, applying and validating our material matters and developments that have the potential to impact our sustainability.

MATERIAL MATTER IMPACT ON OUR
STRATEGY		 OUTCOMES RISKS AND CHALLENGES CAPITAL AFFECTED
FINANCIAL
  • We remained focused on protecting and safeguarding our assets.
  • We continued to manage the variables under our control, improve our liquidity, and ensure resilience.
  • We looked at streamlining our investment portfolio.
  • We optimised business continuity.
  • We maintained adequate liquidity levels.
  • We reinvested revenue in our operational businesses to ensure self-sustainability.
  • Following the COVID-19 pandemic, we optimised business continuity following business disruptions.
  • We ensured cost efficiencies and cost optimisation across all business units.
  • Uncertain geopolitical, Macroeconomic and Socioeconomic growth factors.
  • Low GDP growth and high levels of unemployment.
  • Increased competition and the threat of new entrants.
 
 
 
THE ENVIRONMENT AND SOCIAL AND RELATIONSHIP CAPITAL
  • Proactively identifying relevant and emerging legislation.
  • Continue to refine our assurance approach, compliance, and risk management.
  • Additional demands on regulation, governance, and risk management.
  • As investors and stakeholders have shown an increased interest in ESG issues over the past few years, we ensured transparency in our reporting.
  • Continue developing our relationships with our key stakeholders to build social capital.
  • Entrenching corporate governance and ethics awareness in our businesses and employees.
  • Regulatory and policy changes could have an impact on our business operations.
  • Sound governance principles are critical in building trust and preventing corporate failure.
  • Failing to meet human capital demands.
 
 
 
BUSINESS OPERATIONS AND HUMAN CAPITAL
  • We had to revisit our strategic priorities.
  • Due to the uncertain duration of the COVID-19 pandemic, we had to manage our financial and manufactured capital to ensure sustainability.
  • Employee safety, health, and well-being remained paramount.
  • The COVID-19 pandemic impacted our ability to create short- to medium-term value for our stakeholders in all our business operations.
  • We had to review our business model, risks, opportunities, and value chain.
  • Changes in corporate restructuring and the new way of work.
  • Remote working and downsizing office space.
  • The pandemic significantly impacted our business model and the Group.
  • Various sectors of the economy have had to close for extended periods while others have closed permanently. Supply chains have been interrupted and working patterns disrupted. As a result, the pandemic has had a material impact on our ability to create value in the short- to medium-term for our stakeholders. It has forced us to review our risks across our value chain and to reconsider our outlook and prospects.
 
 
 
HUMAN CAPITAL AND SOCIAL AND RELATIONSHIP CAPITAL
  • Global and environmental challenges continue to evolve and we have to consider the social and economic impact that our businesses have on the environment in which we operate.
  • Ensure direct and indirect developmental outcomes from our activities:
    • Leverage investments
    • Employment
    • Skills development
    • Health and safety
    • Transformation
    • Community development
    • Environmental stewardship
  • Integrating ESG factors into our business units.
  • We need to harness innovation and technology and identify solutions to increase our efficiencies and consumption.
 
 
CHALLENGING OUTLOOK
  • The Gross Domestic Product per capita has been on a steady decline and the exchange rate volatility plays a key role in this. It continues to impact the cost of raising capital.
  • The country’s depressed economy and the high unemployment rate have negatively impacted our businesses, consumers, and investors.
  • The electricity grid continues to be under severe strain, with load shedding affecting an already depressed economy. With no improvement in sight, the economy cannot function to its full potential with insufficient electricity supply, the intentional sabotage of electricity power stations, and infrastructure damage.
  • The high interest rates continue to affect consumer confidence, severely reducing consumer spending.
  • High fuel prices continue to affect production and logistics.
  • The recent floods and violence in KwaZulu Natal and Gauteng continue to disrupt the supply chain and affect employment.
  • The Ukraine-Russia war – Russian and Ukraine are big players in global food and oil markets. This impacts our economy as food prices such as grain and oil continue to rise.

Managing our material risks related to our activities

Our risk management process is designed to identify, assess, quantify, and mitigate events by providing reasonable assurance that our strategic objectives will be achieved through the risk’s potential positive and negative effects.

Our risk management approach continues to evolve as we define risks that may impact our ability to deliver sustainable value for our stakeholders. Our value creation strategy depends on management being able to leverage opportunities and the associated risks without jeopardising the direct interests of our stakeholders.

As new trends and developments shape the Macroeconomic environment, our themes have remained consistent but have been amended to reflect the pressure on revenue, the depressed economic climate, slow economic recovery, heightened cyber risk, the effect of the COVID-19 pandemic, and increased banking challenges to ensure organisational resilience.

Our Board delegated the management of risks to the Audit and Risk Committee and is committed to effective risk management to pursue the Group’s strategic objectives to grow shareholder value sustainably. In our material matters, our key risks and opportunities represent the issues that impact our ability to create sustainable value for our stakeholders.

A key responsibility of the Audit and Risk Committee is to review the top material risks that the Group faces, respond to new and emerging risks, and ensure alignment with regulatory changes and best practices. In doing so, the committee takes stakeholder needs into account, including corporate governance principles, risk trends, global trends, and external dynamics. With our sound risk management, we can anticipate and respond to operating changes and make decisions under conditions of uncertainty.

Material risks

RISK AND
RATIONALE		 CONSEQUENCES MITIGATION OPPORTUNITIES LINK TO
MATERIAL
MATTER/
STRATEGY
1 Lack of access to banking facilities

The relationship of the Group with banking institutions has been strained and has culminated in some bank account closures. If this continues there is a risk of:

  • operational and business disruption;
  • closure of operations;
  • loss of income through loss of major customers and inability to attract new customers;
  • reputational damage;
  • retrenchment of employees;
  • unnecessary legal fees; and
  • limited access to bank funding.
  • Transparent communication with all stakeholders regarding our banking facilities.
  • The Group looked at alternative banking arrangements and kept stakeholders abreast of the Group’s situation.
  • The Group had to review its business operations and processes.

Diversification of banking facilities to less traditional mainstream banks.

Engage with banking institutions more robustly to re-establish a strong relationship which lays a foundation for long-term partnership.
2 Loss of support from stakeholders due to reputational damage

As a Company that is in the public eye there is a risk that stakeholders may cease supporting the Company due to negative media articles, perceived governance implementation failures and bank account closures. This would result in:

  • Loss of credibility and legitimacy due to negative media and untested allegations that it cannot control.
  • Operational and business disruption.
  • Inability to trade and continue business operations.
  • Transparent communication with material stakeholders regarding media allegations.
  • Engaged with third parties that raised issues that may have the potential to damage/impact our reputation.
  • Regular engagement with institutions regarding any concerns raised.
  • Meticulous compliance with the relevant laws, regulations and Acts.
  • Increase our focus on building our brand and reputation.
  • Improve our communication with stakeholders.
  • Improve our relationships with shareholders and institutions to support our growth plans.
3 Loss of business demand due to the economic recession, tarnished reputation and the negative impact of COVID-19

The economic recession in local and international markets and the uncertain economic climate and the impact of the COVID-19 pandemic as we enter the third year and return business recovery to pre-COVID-19 levels could result in:

  • A negative effect on the growth and sustainability of the business.
  • A negative effect on business operations.
  • Decrease in revenue.
  • Negative impact on liquidity.
  • Employee infection or demise.
  • Stringent laws and regulations.
  • Inability to export products.
  • Loss of significant clients and market share.
  • The Group had to review its business operations, processes and structures under the “new norm”.
  • The Group continues to follow the government’s COVID-19 protocols in dealing with the pandemic.
  • The following services remain available and accessible for employees:
    • health-line for COVID-19 support;
    • financial support;
    • counselling services for individuals and families;
    • advisory services on health, daily behaviours, and planning; and
    • managerial advice for oversight and keeping in contact during remote working.
  • Streamlining and resizing businesses to reduce operational expenditure and the strain on cash resources.
  • Management teams identified areas of innovation in operations to increase efficiency and develop products and services that respond to the current environment.
  • The health and safety of employees are optimised.
  • Productivity increased due to saving on travel time to the workplace.
  • The pandemic has necessitated new revenue streams from the demand for products and services.
  • Enhancing our assets.
  • Optimising our plant and equipment.
  • Improve margins that will optimise our business operations.
4 Non-compliance with regulatory requirements resulting in fines and penalties

The ever-changing regulatory environment could result in inadequate controls and processes. Inadequate monitoring and response to the requirements of the applicable legislation could result in:

  • a negative effect on the reputation of the Company;
  • a decrease in community support;
  • loss of income; and
  • negative effect on stakeholder relationships.
  • Training and awareness are continuously assessed and provided across the Group.
  • Policies and procedures are updated regularly to adapt to all new regulations and legislative requirements.
  • King IV™ compliance review completed annually through a Governance Instrument.
  • The use of field experts and consultants to ensure compliance.
  • Compliance with applicable laws and regulations governing the Group’s results in the Group is seen as being a good corporate citizen.
5 Inability to raise funding due to reputational damage and economic downturn

The negative reputation that the Company is currently under in addition to the economic downturn could result in:

  • a loss of stakeholder confidence;
  • a negative effect on the sustainability of the business and business operations;
  • loss of income; and
  • slow growth.
  • Continuous communication of the value proposition of our products, services and businesses.
  • Build agility in the way we conduct our businesses.
  • Diversification of products, brands, services and companies we invest in.
  • Continue to seek alternative markets for our products, brands and services.
  • Insurance cover has been taken out where applicable.
  • Focus on our acquisition strategy to ensure revenue is not negatively affected.
  • Improve communication with our markets regarding our value proposition.
  • Focus on internal reviews and reflect on the success of our strategy.
  • Acquiring good businesses at favourable prices.
6 Business interruption due to information technology systems downtime or breaches

There is potential for downtime and security breaches due to inadequate IT integration into strategy, outdated systems, lack of knowledge by employees and undefined reliance on third party IT service provides. This could result in:

  • a negative effect on business operations and sustainability;
  • a harmful effect the reputation of the Company;
  • possible financial loss; and
  • business interruptions in the Group’s systems from malicious software and increasingly advanced cyber and ransomware attacks, leading to a loss of information and an increased risk of fraud.
  • Restrict access to the Group’s communication and technology systems through e.g., firewalls.
  • The monitoring of the IT systems for possible IT-related breaches, cyber ransomware attacks and malicious software.
  • The rollout and implementation of the new IT system.
  • Back-ups are performed daily and stored on different external servers and off-site.
  • Service level agreements with third party IT service providers.
  • The Group can maintain data integrity and decrease downtime on a secure IT system.
  • Uninterrupted business practices will lead to efficiency and maximising profits.
  • Optimising “The Way We Work” in a digital world.
7 Loss of critical skills due to reputational damage and the competitive job market

Limited investment in scarce skills and programmes, inadequate skills transfer and limited training opportunities focussed on technical skills, inadequate succession planning, negative brand reputation and non-competitive employee incentive schemes could result in employees looking at other opportunities resulting in:

  • a negative effect on the sustainability of the business and business operations; and
  • a negative effect on the reputation of the Company.
  • A bursary scheme is in place.
  • Market-related remuneration and equal pay.
  • Career development opportunities, including internal skills training.
  • Employee wellness programmes.
  • Training and upskilling of employees.
  • Succession planning for critical skills is on the Board agenda.
  • Become an employer of choice by offering an ethical working culture and an environment that attracts and retains superior employees.
8 Inability to respond adequately to environmental challenges such as climate change

Being the controlling shareholder of a fishing company and other large companies in various sectors with the potential for a significant carbon footprint, there is a risk that our response to these challenges could be inadequate resulting in:

  • an increase in carbon emissions which negatively impacts our position in the communities that we operate in;
  • lack of continuous monitoring of climate change and waste management; and
  • non-compliance with regulatory laws regarding environmental sustainability resulting in fines, penalties and reputational damage.
  • Adherence to marine management policies from the Marine and Coastal Management to ensure no overfishing takes place.
  • Recycling and better waste removal techniques are being employed across the Group.
  • Communication on climate change in the organisation so that employees are more aware and can make climate-friendly changes in their own lives.
  • There is an opportunity for the Group to maintain a clean, safe environment, reduce carbon emissions and be seen as a good corporate citizen.

Emerging risks:

Risk metrics

risk-metric

Ranking of risks

RISK SCORE RISK MAGNITUDE RESPONSE
16–25 High Unacceptable level of risk – High level of control intervention required to achieve an acceptable level of residual risk
8–15 Medium Unacceptable level of risk, except under unique circumstances or conditions – Moderate level of control intervention required to achieve an acceptable level of residual risk
1–7 Low Mostly acceptable – Low level of control intervention required if any
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