RESPONDING TO THE IMPACT OF COVID-19 

In March 2020, we witnessed the impact of the COVID-19 pandemic on countries, businesses, society and individuals as infection rates escalated in South Africa and around the world. The South African government, like the rest of the world, implemented emergency measures to curb the spread of the virus.

COVID-19 thrust a sudden set of new challenges on the Company. The Board supported the management team in rapidly activating a comprehensive response plan, with immediate steps to respond to the pandemic. This is underpinned by the repositioning of our strategy and revised operating model.

In responding to these new challenges, the Company required a swift pivot in its priorities to stabilise the business in the short-term, while chartering a path forward to the long-term sustainability under our revised strategy and operating model. We did this by conserving cash in operational and cash expenditure. Our primary focus is on the health and safety of our employees and stakeholders. Our material matters set out the strategic actions we have taken.

SOUTH AFRICAN GOVERNMENT’S RESPONSE

The President of South Africa declared a nationwide lockdown effective midnight on 26 March 2020, resulting in non-essential services being closed for a period of 21 days, then extended to 35 days on national alert Level 5 restrictions. On 1 May 2020, a gradual and phased easing of the lockdown restrictions began with a risk-adjusted strategy, lowering the national alert Level to 4. On 1 June the country moved to Level 3 lockdown restrictions, allowing certain industries to open partially. The restrictions were lowered to alert Level 2 on 17 August 2020, with further industries in the economy opening as the peak of the virus was lowering and the number of infections decreasing. At the time of writing this report, further restrictions were lifted to alert Level 1, with some of the tourism industry having opened further and a lift on certain travel restrictions.

OUR RESPONSE TO COVID-19

The COVID-19 pandemic continues to spread globally, leaving behind a wide-ranging array of devastating social and economic effects.

The response by the government to declare a national state of disaster, which we support as a response to curtail the spread of the disease, is out of our control. Despite this, at AEEI we managed the spread of the virus and business continuity by being proactive and responsible. We established a COVID-19 committee and nominated Compliance Officers to oversee our actions and manage the risks in line with our Office Workplace Plan in terms of Regulation 16(6)(b). The exco focused on operational matters, including managing business continuity plans, maintaining liquidity and managing risks.

We remain committed to doing all that we can to help our stakeholders during this unprecedented and uncertain time.

Some of our key actions:

Shareholders, the investment community and providers of capital:

We engaged with our shareholders at the Annual General Meeting (AGM) held on 16 April 2020.

• Our main focus remains on the liquidity and capital of the Company and the Group.
• We continue to monitor our risks and emerging risks.
• We remain committed to what we can control, in particular costs, and our strategic initiatives to support our growth in revenue and efficiencies.

Employees:

Ensuring that our employees are healthy, safe and supported is of utmost importance to the Company and the Group.

• All employees who are able to work from home have been allowed to do so. More than 90% of our employees are equipped to work remotely.
• All scheduled on-site meetings are taking place remotely due to technology.
• All training, conferences and workshops have been put on hold, unless it can be done remotely.
• Some subsidiaries in the Group were essential service providers, and protocols have been put in place to ensure their safety, with teams being split to work rotational shifts.
• Increased focus on sanitation and health practices.
• PPE is available to all employees.
• Reconfiguration of the offices were made to encourage social distancing.
• Unemployment Insurance Fund – Temporary Employee Relief Fund (UIF-TERS) applications have been done for employees timeously to cover salary shortfalls as a result of reduced salaries, which were necessary to ensure the continued survival of our businesses.
• All employees have been retained in their jobs, albeit at reduced salaries, as we understand the tough economic times and the hardships our employees would endure if we had to make any retrenchments.

Clients:

With social distancing in place, we have refrained from physical client and service provider interaction as far as possible. We have also been committed to ensuring that we negotiate payment terms with suppliers and adhere to them to ensure the continuity of their businesses, most of which are small- and medium-sized enterprises.

Regulators:

A number of changes have been made in terms of guidance notes and regulations from the JSE and the International Reporting Standards. The Company complied with these guidance notes. We continue to work with regulators to manage emerging risks.

Communities:

COVID-19 has highlighted many socio-economic issues in our communities. Many of these socio-economic issues are because of high unemployment which has consequently been exacerbated by the effects of COVID-19. As a Group, we ensured that we did not contribute to the socio-economic crisis by ensuring that all jobs in our Group were preserved.

In addition, we continued to give to corporate social investment programmes at a time when many businesses went into cash preservation mode. We also ensured food security by giving food parcels to our most vulnerable employees in the fishing and brands division.

The spread of COVID-19 exacerbated the high levels of inequality, poverty and unemployment, making our social and economic contributions more critical by supporting our people and communities.