The wide-spread international outbreak of the COVID-19 (Coronavirus) has significantly affected lives, and entities and economic activity around the world.

The COVID-19 pandemic has continued to effect economic activities across the globe and South Africa has not been spared. In an effort to stem the growth in cases, South Africa has been placed on various levels of lockdown’s throughout 2021 financial period. AfroCentric Group on entities have been deemed essential services as defined and we have continued to operate unaffected during all the various levels of lockdown.

Therefore the impact of the COVID-19 pandemic and the related lockdown is immaterial. The following are potential future financial effects on the company:

• Revenue – The Group’s core business of administration of medical aid and provision of medication is considered to be a healthcare-related essential service and has remained unaffected by the COVID-19 lockdown. The Group revenue has therefore remained unaffected.
• Inventory – The Group and its subsidiary entities have experienced no disruption in the supply chain during the year and this is expected to continue in financial 2022 period.
• Financial instrument risk disclosures – Due to the rapidly changing economic environment, the Group and its subsidiary entities have been subject to an increasing market risk and fair value risk. To this effect, the Group’s sensitivity analysis has been performed using a larger range for the risk effected variables (Notes 3 and 8). This range is based on management expectation of COVID-19.
• Borrowings repayment and classification – The Group has borrowings as at 30 June 2021 the outstanding balance is R776 million, the Group is not in breach of the covenants. The entity is anticipating to make R120 million payments in the next 12 months as and when they become due, no deferral of capital repayments is expected.

With the occurrence of the COVID-19 (Coronavirus) pandemic, AfroCentric Group and its subsidiary companies will still continue to operate as going concerns as there are sufficient financial resources to continue operating into the near future.

The COVID-19 pandemic and related, nation-wide lockdown (as outlined in note above) have not interfered with the Group's ability to continue its operations the entities have continued as normal even during the lockdown period, seeing as the following:

• Administration of medical aids;
• Provision of chronic medication;
• Supply and distribution of medication;
• Primary and occupational healthcare services;
• Information technology solutions; and
• Health insurance.

were deemed to be a healthcare-related essential service.

The current contracts in place with the various medical aid schemes, private and public practitioners are not under threat as services were performed throughout all the respective levels of lockdown.

While the fierce headwinds of COVID-19 have put our most deeply held values to the test, our people have, time and time again, proven their resilience and commitment to delivering on our ambition of improving the quality of life of our stakeholders. Through the various alert levels and restrictions, our people have collaborated and supported one another to achieve broader aims. This was aptly demonstrated post-year-end as we navigated the unrest in areas of the country. The Group remained insulated and the unrest did not impact our operations.

Furthermore, there has not been any regulatory changes announced by the President of South Africa that will threaten the company's ability to continue as a going concern.