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Introduction

As the Altron group works towards consolidating its position as a leader in the telecommunications, power electronics and multi-media and information technology sectors. Altron continues to protect the value base of its businesses, in particular its human capital, culture of innovation, strength of relationships with key stakeholders and managing the risks of the group in a proactive manner. As Altron’s chief executive Robert Venter remarks in his review on page 22, sustainable growth has indeed become the hallmark of our group as seen in the commendable performances from most group companies. This sustainable growth is underpinned by our values and people and reflected in the care we take with our customers and our communities – in equal measure. In line with our globalisation aspirations and best practice in sustainability reporting, Altron is following an incremental approach to reporting on its non-financial (or sustainability) performance. While we have taken cognisance of the Global Reporting Initiative (GRI) version 3 guidelines, and aimed within the context of this report to comply as an application level C reporter, our primary aim is to focus on material issues pertinent to our business. These are discussed in our corporate governance report on page 116, and we describe our approach to dealing with them throughout this sustainability report.

We have in particular sought to report more quantitative data this year, and focused on our key operations in terms of contribution to profit and the risks inherent in their operations, especially where these are manufacturing facilities. The eight subsidiaries on which we report are Bytes Technology Group SA (Bytes SA), Bytes Document Solutions, Altech Autopage Cellular (Altech Autopage), Altech UEC Multi-media Technologies (Altech UEC), and Altech Netstar, as well as Aberdare Cables (Aberdare), ABB Powertech Transformers (ABB Powertech), and the Powertech Battery Group (Battery Group). We have also consulted Pricewaterhouse- Coopers on benchmarking our sustainability reporting against best practice based on last year’s report, as well as in the drafting of this year’s report content. Areas highlighted for improvement by PricewaterhouseCoopers include reflecting an overarching sustainable development strategy and management system for the group, identifying and reporting on material issues affecting the group, reporting of comparative, quantitative data, while recognising the major challenge of collating information at group level and reflecting adequately the performance of widely diverse operations and divisions. This report should therefore provide greater detail on how we manage material risks and issues, the challenges we face, and highlight progress.

Challenges

The Altron group of companies is both vast in size and extremely diverse. Our three principal operating groups, Altech, Bytes and Powertech, employ more than 12 000 permanent and non-permanent employees in over 150 companies and associates, varying from manufacturing operations to service providers, on five continents. These businesses are predominantly South African-based, although we do have an increasing international foothold. The challenges in reporting meaningful information, both at a group and operating company level, given our decentralised management approach, 52 Annual Report 2007 have highlighted the need for us to provide additional guidance on aspects of nonfinancial performance management and reporting. Given the potential to impact on the sustainability practices of our suppliers, customers and business partners through our group’s sphere of influence, we have begun to examine ways to work with these stakeholders to improve their social, economic and environmental performance. This includes, for example, training on health and safety issues of SMMEs, which we have established through our enterprise development programme, and encouraging accreditation to health, safety and environmental standards of our suppliers. We will continue to explore joint approaches with our business partners to address sustainability challenges.

Strategy

Altron is striving to achieve sustainable business growth, the drivers of which we have identified as including:

Within this context, we are focusing increasing effort on addressing the challenges of sustainable development. Our strategy is to address these challenges by:

Management of sustainability

The Altron board remains responsible for oversight of the balancing of the group’s economic, social and environmental performance and due consideration of legitimate stakeholder involvement. Through the risk management committee, a formalised risk management process ensures that potential non-financial risks and opportunities are identified and appropriately managed. Such risks and opportunities vary across our businesses, but include, at a high level, environmental performance, particularly in our manufacturing operations, skills shortages, the impacts of HIV/AIDS, and progress with regard to BBBEE in South Africa. The transformation committee, a subcommittee of the Altron executive committee, drives Altron’s transformation strategy.

Our approach to all we do is based on our corporate code of conduct, which has been implemented and entrenched throughout the group for several years. A highly visible ethics campaign has been launched to reinforce what Altron 54 Annual Report 2007 stands for and to foster understanding of the Altron corporate code of conduct among all Altron employees. The Altron code of conduct is endorsed and guided by the boards of Altron, Altech, Bytes and Powertech and commits employees to the highest standards of behaviour. Altron has also contracted Deloitte Tip- Offs Anonymous to provide an independent hotline through which anyone in the group can report unethical behaviour. This service was rolled out with the full and visible support of the Altron executive committee by the corporate communications team through poster campaigns, brochures and training sessions. The reporting line is an important tool in both monitoring and stamping out unethical behaviour in the group and has been set up in line with current best practices in this field.

Health and safety, quality and environmental performance is managed as far as possible across the group by way of the ISO 9001, ISO 14001, as well as the OHSAS 18001 management systems respectively. In addition, the group is actively monitoring material issues through regular audits and reporting quarterly on progress to the board.

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