Dear Stakeholder,

On behalf of the social, ethics and transformation committee, I am delighted to address you and update you on our objectives, activities and outcomes during the 2021 financial year. Custodian of AYO’s ethics, transformation and sustainability initiatives, as mandated by the Board, the committee’s key areas of oversight include the Group’s compliance with B-BBEE, employment equity and other relevant regulatory requirements, CSR impact investments and stakeholder relationships. Additionally, we ensure that ethical culture and behaviour is embedded in the day-to-day business environment and that meaningful strategic imperatives are integrated in operational decision making. In so doing, we play a critical role in positioning and presenting AYO as an exemplary corporate citizen with good governance practices and commitment to shared value creation.

The committee is comprised of three non-executive directors, as required by the King IV™ Code and the JSE Listing Requirements. Ms Vanessa Govender stepped down as an official member of the committee during the period, in accordance with the stipulated requirement that executive directors are precluded from representation. However, as an actively involved associate, who facilitates the implementation of directives at operational level and reports back on executional progress of initiatives, she has a standing invitation to our formal meetings. I am compelled to note that the committee is a very active and engaged unit, deeply passionate about creating meaningful impact and promoting the advancement of UN SDGs within and outside the organisation. We have held three formal meetings during the year and continuously engage with the Board and other committees, as well as AYO’s management team in discharging our duties. Thus, I am satisfied that we have appropriately fulfilled our responsibilities during the period in line with the committee’s mandate, Companies Act, JSE and King IV™ requirements. I will make myself available to provide any further information and answer any questions relating to the committee’s statutory obligations at the AGM.

The committee is responsible for directing the Group’s approach to ethics by regularly evaluating and updating the Code of Conduct and other relevant policies and provide ongoing oversight. We see the law as a minimum standard for appropriate behaviour and believe that our ethical leadership, effective governance, strict compliance and transparent and timeous engagement with stakeholders underpin our stellar corporate image. Our Code of Conduct is available on our website to all interested parties and was reviewed and updated in 2021, alongside the committee’s charter and the Group’s various policies. Additionally, we adopted a new corporate social responsibility policy during the period, detailing strict beneficiary criteria in alignment with our prioritised SDGs and allowing for a transparent and fair application and award process. We were satisfied that AYO’s externally facilitated fraud and corruption reporting hotline provided sufficient access to report any potential or suspected ethical faux pas and are particularly pleased that no such signals were received during the reporting period. Finally, the committee oversaw the adherence to POPI Act, which came into effect in July 2021.

Another important outcome for the committee was the finalisation of AYO’s B-BBEE verification, which was completed by Izwelisha Verification Agency. This new partner was selected on the basis of their excellent credentials and specific focus within the ICT industry space. Unfortunately, we were unable to improve the Group’s contributor level, which remains flat at level four until the next verification audit, with procurement within the SED space identified as the area we believe improvements can be achieved. This will be a priority for the committee and the Group, as a whole, in the upcoming year. I am delighted that progress in this area is already noticeable and am confident that we will reach our preferential procurement targets in 2022.

For the current reporting period, AYO spent in excess of R11.6 million on socio-economic development, which is far more than the statutory required minimum percentages of NPAT. Furthermore, I am particularly delighted that a thorough vetting process was applied to carefully select qualifying beneficiaries, so that AYO’s contributions can have a meaningful, tangible and measurable impact on community development and promotion of UN SDGs. 13 donations to the total value of R7.165 million were made in terms of SED, alongside 4 enterprise development grants with combined value of R2.675 million and a skills development initiative in partnership with Pino Investments targeting IT education of marginalised youths saw an investment of R1.8 million. Education continuous to be the primary focus of our social responsibility initiatives and contributions, although given the impact of COVID on South African communities, proportion of our spend was re-directed to assist with PPE and basic needs, including food parcels, for the worst affected.

CSR projects, partnerships and initiatives have always been a priority for AYO, but were never widely communicated to our broader stakeholder base. We recognised that proactively publicising our involvement in such programmes could have a favourable influence on our brand reputation and have put tremendous amount of time and energy to maximise this opportunity. The newly developed AYO corporate website now regularly reflects our CSR success stories, which are further amplified via our social media channels. I am pleased with the heightened levels of engagement we have seen from our audiences with these important feel-good reports.

The growing problem of e-waste, driven by exponentially sped up technology adoption, has emerged as a new focus area for the committee during the year. The Company launched an inaugural e-waste awareness and collection campaign, which was highly successful. The committee views this as a strategically significant sustainability prerogative and will continue to drive the initiative going forward, further expanding it into all Group companies and potentially outside the organisation. In this regard, we are looking at fostering an ongoing partnership, or possibly securing an equity stake, in suitably established entity.

Human resources relationships also fall within the ambit of the committee and some notable developments took place during the year in this regard. In February 2021, a large-scale restructure was undertaken at one of AYO’s major subsidiaries, to counteract the negative impact of pandemic-driven business disruptions, resulting in considerable headcount reduction. AYO Company was also restructured, as mandated by the Board, following the adoption of the 7-point plan in June 2021, which saw the dissolution of the shared services unit. We strived to minimise job losses and redeploy employees in other teams or transfer them to the client organisations wherever possible. Nonetheless, the Group ended the reporting period with a much-rationalised staff compliment of 1 151 employees.

The COVID pandemic has also bound us, on several occasions during the year, to weigh up the opportunity cost of business disruptions associated with remote working vs. the health, safety and wellbeing of our staff. While we have managed to seamlessly slip in and out of remote working at the top of the wave peaks, AYO’s collaborative working approach is optimally suited for face-to-face interaction and collective decision making. Yet, we are steadfast on protecting the health and lives of our employees, first and foremost. After three consecutive lockdowns in the past 18 months and a reasonable expectation that the worst is not over yet, we were delighted to see the national vaccination roll-out made available to all South African citizens over the age of 18. At the time (July 2021), AYO employees were again working from home and the committee considered the possibility of mandating vaccinations for all staff prior to return to the office. It is a difficult decision, that needs to consider both the business continuity requirements, mitigating the risk of incessant alternating arrangements going forward, and the constitutional rights of our employees. Fortunately, a quick survey amongst the team revealed that the Company staff was already voluntarily 100% vaccinated, making full return to the office environment a safe and reasonable decision. The committee is still deliberating on a vaccination policy for future employees, however, the decision has been deferred to the next reporting period.

Beyond a fair, non-discriminatory and lawfully aligned vaccination policy, the committee’s focus going forward would be to continue its oversight over the Group’s ethical and compliant practices, updating AYO’s governance framework library in alignment with evolving regulations and best practices and monitoring the effectiveness of socio-economic development initiatives. I look forward to reporting on many successful programmes in 2022, creating shared value for all stakeholders and actively promoting UN SDGs on the African continent.

Dr Dennis George

Chair of social, ethics and transformation committee
17 December 2021