During the year under review, the Board accepted the resignation of Ismet Amod as a non-executive director effective 31 March 2021.

With the focus on growing the Board’s independence and the loss of intellectual capital due to the resignation and maintaining our social and relationship capital, Stephen Nthite and Ambassador Membathisi Mdladlana were appointed as independent nonexecutive directors on 26 and 27 August 2021, respectively.

Following the Board’s changes during the year, we believe that we have the right team to guide the Company into the future.

For more information regarding the current composition and diversity of the Board, refer to Board Diversity.

Valentine Dzvova is the prescribed officer of the Company. The prescribed officer must perform her function and exercise her duties to the same standard of conduct applicable to all directors and is subject to the same liability provisions.

Since her appointment, she exercised executive control over the management of the Group’s subsidiaries. In addition, she regularly participated in the general executive control of the Group’s business units and activities.

She is not remunerated separately for this function.

Damien Terblanche is the company secretary and is accountable to the Board.
During the year, the company secretary:

• Guided the directors in terms of their duties, responsibilities and powers, and responsibilities and liabilities under the Companies Act and King IV™.
• Made the Board made aware of changes to any relevant laws affecting the Company.
• Prepared Board and committee packs and recorded detailed minutes of meetings.
• Ensured that Board and committee meetings, including the AGM of the Company were conducted in a proper and orderly manner.
• Disclosed the corporate actions, SENS announcements and directors’ dealings in securities and ensured compliance with the JSE Listings Requirements and the Companies Act.
• Reviewed agreements and made recommendations to the executive management team.

The Board is satisfied that an arm’s length relationship exists between the company secretary and the Company. He is not a board member, is not involved in the Company’s day-to-day operations, and is not a prescribed officer.

The Board has considered the company secretary’s competence, qualifications, and experience and is satisfied that they are appropriate. All directors have unlimited access to the services of the company secretary. The company secretary’s appointment and removal is a matter for the whole Board.

Key focus areas of the executive committee during the year:

• Developing and implementing the Group’s revised strategy and business model.
• Managing the effects of the COVID-19 pandemic by focusing on human capital, stringent cash management solutions, operational efficiencies and liquidity of the business.
• Managed the day-to-day operations of the Company.
• Monitored and managed the capital requirements and allocating and investing the Company’s resources responsibly.
• Managed the adverse effect on the reputation and brand of the Company.
• Proactively engaged with stakeholders.
• Prepared the 2022 budget for the Board’s approval.
• Provided reports to the Board relating to overall performance and risk management of the Group.
• Being the custodian of good corporate governance and ensuring that the Company is a respected corporate citizen.
• Provided strategic guidance and input to the subsidiaries in the Group.
• Provided strategic and operational support to subsidiaries in the Group.
• Managed the investment portfolio of the Company in line with the Company’s investment strategy.

The key focus areas for the Company are comprehensively addressed throughout this report.

The Board is constituted in terms of the Company’s MOI and in line with .

The Board is the principal decision-maker and is supported by various committees and the executive management team.

Board members accept responsibility as custodians of governance within the Group. The Board members bring diversity to Board deliberations and create sustained value by constructively challenging management.

The Board is responsible for the strategic direction of the Group and the Company’s governance framework. The governance framework supports the Company’s strategic focus areas. The Board’s governance oversight is guided by its commitment to its responsibilities and governance objectives. The following objectives provide a mechanism to evaluate and measure King IV™ principles and outcomes performance;

The Board sets the tone to lead the Group ethically, responsibly, and effectively according to good corporate governance practices. Board members must act independently in decision-making, competence, diligence and inclusivity with the necessary awareness and insight. The Board ensures that the Group plays a pivotal role in society. (Principles 1–3)

The Board provides leadership and vision to the Group to sustain growth and delivery on our strategic focus areas and purpose for all stakeholders. They conduct their duties collectively and individually, applying integrity, responsibility, accountability, competence, fairness and transparency. (Principles 11–15)

The Board provides guidance and oversight to the Group on the management of risk compliance, remuneration governance, and enterprise risk management to fully support the good governance practices. (Principles 6–10)

The Board takes responsibility and accountability for the performance of the Group. It also supports the Group in setting its purpose and achieving its strategic objectives. (Principles 4-5)

The Board ensures a stakeholder-inclusive approach. (Principles 16-17)

Non-executive directors sign a Non-executive Agreement with the Company which details their duties, fees and obligations. In addition, all directors are subject to retirement by rotation in terms of the Company’s MOI.

Executive directors have an Executive Agreement in place and are subject to a 3-month notice period.

As recommended in King IV™, the Board works to fulfil its primary governing roles and responsibilities, namely to:

• approve policy and planning;
• provide oversight and monitoring; and
• set and steer the strategic direction.

The Board has committed to fulfilling the following responsibilities:

• Delegate the management of the Group to the executive management team.
• Ensure compliance with appropriate legislation (including regulations), appropriate best practices.
• Govern disclosures so that stakeholders can assess the performance of the Group effectively.
• Ensure that a robust strategy is in place and executed by management.
• Oversee the management of technology and information.
• Oversee the risk management function.
• Protect the interests of the Group’s stakeholders and ensure responsible, fair and transparent employee practices.

The Board comprises four independent non-executive directors, two non-executive and two executive directors who have the appropriate balance of knowledge, skills, experience, diversity and independence to discharge their duties effectively and objectively.

The Board is well-diversified to add value to the Group.

The Board determines the required composition of skills in response to the rapidly changing environment. Having the appropriate mix of skills and experience ensures that the Board is well-equipped to guide the Company’s strategy and to
create value.

During the year, the Chairperson led a review of the Board’s composition, focusing on diversity, independence, skills, experience and expertise, regarding the Company’s strategy, purpose, changing external environment and future prospects.

As of 31 August 2021, the Board comprised of eight directors. The size gives the Board adequate membership for its five committees while maintaining adequate levels of independence. Accordingly, in terms of the Company’s MOI, the Board shall consist of a minimum of four directors and a maximum of twenty directors. This ensures the Board and management’s capacity and time to guide the Group’s strategy. With the evolution of reporting requirements and changes in the Company’s environment, it was essential to review the Board’s agenda items before each meeting to ensure that it stays aligned with good governance and ethics and meets current needs, best practices, and matters of strategic importance.

Our Board and committees are monitored annually for effectiveness and transparency. In addition, the internal valuations of the Board and committees are conducted annually and reviewed for the value that directors add to the Company. It was concluded that the Board and committees operate efficiently, openly and transparently, and there is a good level of discussion between members and attendees. However, the findings addressed some areas for improvement that will be addressed appropriately.

The majority of Board members are independent non-executive directors in compliance with King IV™.

Non-executive directors bring independent judgement and experience to the Board’s deliberations and decisions, with the structure of the Board ensuring that no one individual or group of individuals has unfettered powers of decision-making. None of the non-executive directors have served on the Board for nine years or longer.

AEEI’s policy is to maintain a Board structure comprising a majority of independent non-executive directors.

AEEI is committed to promoting diversity at Board level and remain transformed and continue to meet diversity targets. AEEI’s Diversity Policy considers and promotes the validity of the voluntary diversity targets having due regard for the demographics of South Africa and the Group’s customer profile. In considering the new appointments, the nominations committee considered the Board’s current composition regarding the voluntary diversity targets and gaps identified in the
Board’s fields of knowledge, skills and experience. The Board continues to look at promoting diversity in terms of further gender equity representation.

In AEEI’s policy, non-executive directors must retire by rotation at the AGM or after nine years of being on the Board as a non-executive director. The staggered rotation of members ensures the introduction of new expertise and perspectives while retaining valuable industry knowledge, skills and experience while maintaining continuity. King IV™ specifically states that independent non-executive directors may serve for longer than nine years if a vigorous assessment is conducted annually to establish that the director “exercises objective judgement and there is no interest, position, association or relationship which, when judged from the perspective of a reasonable and informed third party, is likely to influence unduly or cause bias in decision-making.

The Board assumes ultimate responsibility for the Group’s ethical performance and adherence to human rights principles. The Board provides effective leadership based on a principled foundation. Responsible leadership, instilled by the values of responsibility, transparency, accountability and fairness, has been a defining characteristic of the Company since its inception. The Company’s fundamental objective has always been to do business ethically while building a sustainable company that recognises its activities’ short and long-term impacts on the economy, society, and the environment.

The continued enhancement of the Group’s ethical culture remains top of mind through the relevant Board committees as well as the executive management, especially against the backdrop of various commissions of inquiry, state capture, and corporate failures. In addition, due to material matters, such as the impact of COVID-19, the Fourth Industrial Revolution, a challenging macroeconomic environment increases the emphasis on treating stakeholders fairly and the fight against corruption. Accordingly, this responsibility is delegated to executive management.

During the year, the Board and its various committees discussed, monitored and oversaw the Company’s performance and its key strategic initiatives through:

Effective control

An ethical culture

Good performance

Legitimacy

The Board’s quarterly meetings are used as a mechanism to discharge its duties in terms of the JSE Listings Requirement, Companies Act, King IV™, and any other applicable regulatory requirements, including monitoring its strategic direction and approach to risk management.

The non-executive chairperson and chief executive provide the company secretary with agenda items to be discussed at the Board meetings. A board pack with information to be discussed is prepared and disseminated to Board members in advance to allow the members to apply their minds and make informed decisions at the board meetings.

At each Board meeting, the CEO and CFO provided feedback and updates on the progress made against the Company’s strategic objectives and performance. They advised the Board on material matters, strategic risks, the effects of the ongoing COVID-19 pandemic on the performance of the business units and the preservation and optimisation of capital. In addition, they provided feedback on employee health and wellness and extended lockdown levels in light of the ongoing pandemic.

The chairs of the various Board committees provide verbal reports to the Board regarding the actions of their respective committees and the material matters arising from their latest meetings.

Based on the quarterly corporate reports, the Board reviews and monitors the information provided by the corporate office regarding regulatory compliance, changes to policies and frameworks, the reports from external sponsors, including the Company’s share price.

The audit and risk committee has an independent role and is accountable to the Board and shareholders. The primary objective of the audit and risk committee is to assist the Board to fulfill its oversight responsibilities for the financial reporting, system of internal control, the audit process, the risk management process, monitoring compliance with relevant laws, regulations and legal compliance. The audit and risk committee is satisfied that it has complied with all its legal, regulatory and other responsibilities during the year.

Our culture, values and governance are set and supported by the Board and management. All employees in the Group embrace our culture in the organisation.

Directors may accept other Board appointments, provided that any potential conflicts are disclosed appropriately, considered and managed, and that the appointments do not conflict with the Group and/or adversely affect the director’s duties. Any proposed Board appointment must be agreed upon with the chairperson before the director accepting such appointment.

Directors and officers are also required to inform the Board timeously of conflicts or potential conflicts of interest that they may have relating to particular items of business or other directorships. At the start of each Board meeting, the chair requests Board members to declare any actual and/or potential conflict of interest with matters to be considered at that meeting. The company secretary maintains a signed register of the director’s interest in and outside the Company.

A director or prescribed officer is prohibited from using their position or any confidential price-sensitive information to benefit themselves or any related third party. If this should arise, the Board will take appropriate action immediately against the relevant director or prescribed officer.

AEEI is an economic entity and a good corporate citizen with a social and moral standing in society with all the attendant responsibilities. Further information is provided in the AEEI’s sustainability report available online at www.aeei.co.za/integrated-report. (Principle 3)

The full role, responsibilities and focus areas for the year under review for each committee are comprehensively addressed in the full corporate governance report, available on www.aeei.co.za/investor-relations/integrated-reports-and-onlinesuite-of-reports/.

# Standing for election/re-election at the Company’s next AGM on 24 February 2022.

• The structure of remuneration committee is up for review at the next nominations committee to ensure that the majority of the members are independent non-executive directors.
• The structure of the social, ethics and transformation committee is up for review at the next nominations committee to elect a chairman to replace the acting chairperson.

* Ismet Amod resigned from the Board and its committees on 31 March 2021.

• Aziza Amod was appointed to the social, ethics and transformation committee on 18 March 2021 and acting chairperson after Ismet Amod’s resignation on 31 March 2021.
• Bongikhaya Qama was appointed to the remuneration and nominations committees on 31 August 2021.
• Ambassador Membathisi Mdladlana was appointed to the social, ethics and transformation committee on 31 August 2021.
• Stephen Nthite was appointed to the audit and risk committee and the investment committee on 31 August 2021.

All directors attended 100% of the meetings of the Board and the committees on which they served during the 2021 financial year. Board and committee meetings were held in line with the Group’s financial reporting cycle.