Material issues |
Stakeholders |
Summary of status and response |
Reference |
GRI |
 External factors
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The recession continued through the third quarter with weak
consumer confidence, subdued vehicle sales, contracting
building sector, and delayed mining and IT projects. The
strengthening rand further contributed to tough conditions,
but these were mitigated by the recovery in commodity prices.
Altron’s strategy of building a diverse portfolio and focusing
on annuity income streams has reduced the negative impact
of the difficult trading conditions. |
Chairman's statement
CE Review
Altech review
Bytes review
Powertech review |
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Income and growth |
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| International expansion in niche markets |
Shareholders
Employees
Suppliers
Customers
Small enterprises |
Altron’s revenue declined by 10% from R24.8 billion to
R22.3 billion. EBITDA reduced by 11% from R2.2 billion to
R2.0 billion. Earnings per share reduced by 26%. Dividend
cover maintained declaring 90c per share.
 Altech – maintained revenue and enhanced profitability.
R1 billion invested in expansion of East African data
infrastructure network, acquisition of international bandwidth
capacity and niche businesses, including Fleetcall, Technology
Concepts and NuPay.
Bytes – maintained revenue, but with reduced margins and profit.
Powertech – suffered from weak demand. |
CE Review
Altech review
Bytes review
Powertech review |
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| Annuity income |
| Quality of earnings |
| Market leadership/critical mass |
Making new acquisitions,new ventures/
divestments |
Costs and cash management |
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| Management of the cost base |
Shareholders
Employees
Business partners |
Reduced head count by more than 1 000 employees.
R384 million cash generated from reduced investment in
working capital. Overall net working capital days improved
from 21 days to 18 days. The group’s cash position improved
in the second half to R1.2 billion, broadly in line with prior
year levels despite the R1.2 billion invested into the future
growth of the group through acquisitions and capital expenditure. |
CE Review
CFO Report |
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| Management of working capital |
| Capacity alignment |
| Access to funding |
| Adequacy of the finance function |
| Foreign exchange volatility |
| Credit risk on debtors |
Business partner relationships |
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| Meeting the evolving needs of customers |
Suppliers
Small enterprises
Customers |
Key issues relating to the top ten customers are discussed by
operational heads at a quarterly review meeting. Created the
position of group alliances manager to manage strategic
alliances with the company ’s most important customers. |
Altech review
Powertech review |
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| Maintaining key agency/principal relationships |
| Maintaining product quality and supply |
| Pricing risk, foreign direct imports and dumping |
Products and services |
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| Ownership of intellectual property |
Communities
Customer
Micro- and small enterprises
Business partners |
Improved broadband capacity secured by Altech companies.
Altech UEC developing high-end PVR products in emerging
markets – hybrid, HD and IPTV set-top boxes. Altech Autopage
Cellular developing its network to offer converged voice, data
and video services. ICASA approval for Altech Netstar Traffic.
Construction of Kenya Data Networks ’ data centre commenced.
Altech West Africa supplying and supporting Verisign
products.
Bytes Document Solutions sold and installed first large-scale
IGEN4 machine. Also launched ColorQube, a multifunction
device using cartridge-free solid ink technology. Bytes Intelleca
expanded the Telkom Hosted Contact Centre.
Aberdare Cables committed R70 million for new catenary
vulcanising line at Port Elizabeth plant. Also introduced new
patented, Cable anti-theft device, called Cableguard. New
50 000m2 operations centre for Aberdare Cables, and ERP
system upgraded. Crabtree and Strike Technologies introduced
new standby power products. |
Altech review
Bytes review
Powertech review
Value added statement |
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| Value-added services |
| Infrastructure investment |
| Technology: convergence, developments, shifts |
Customer relationships |
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| Customer satisfaction |
Customers |
Have consolidated the call centre and help desk at Altech
Autopage Cellular and working to improve customers’
understanding of the company’s products. |
CR report:
Customer Satisfaction |
PR5 |
| Customer rights and protection |
Both Altech Netstar and Altech Autopage Cellular are focused
on complying fully with the New Consumer Protection Act
2008 (CPA). Security of confidential consumer information
being managed by internal IM council, responsible for IT risk
management. |
CR report:
Customer rights |
PR8 |
Human capital |
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| Employee engagement |
Employees |
Significant retrenchments at Powertech, Altech and Bytes UK
required intensive engagement at MD level. No industrial
action during the year under review. |
CR report:
Employee Engagement |
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| Skills attraction, development and retention |
Human capital council (HCC) formed to co-ordinate this
function across the group. Skills and leadership training
further boosted to build succession pipeline. Altech invested
R11 million, Powertech R27 million and Bytes R23 million on
training, strongly oriented towards black persons and black
females in particular. |
CR report:
Skills attraction, development and retention
CR report:
Skills development |
LA11 |
| Health and safety |
Selected employees have been trained as auditors in
preparation for the implementation of the OHASA 18001
Health and Safety system. There were no fatalities during the
year under review. |
CR report:
Health and Safety |
LA7 |
| HIV/Aids |
Altron last conducted a group-wide HIV/Aids audit in 2008.
A further review will be conducted in 2013. This year, Altron
evaluated key suppliers and undertook assessments of
individual operations within the Powertech group, as well as
in areas of higher risk. |
CR report:
HIV / Aids |
LA8 |
Transformation |
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| Ownership |
Public at large
Government
Shareholder
Employees
Suppliers
Small enterprises |
Overall level 4 contributor, improving score from 65.3% to
71.58%. Ownership score remains at 11.5%. Altech and
Powertech take on further empowerment partners within
their subsidiaries.* |
CR report:
Ownership |
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| Management control |
Management control score improves from 2.6% to 3.72%,
but HCC is seeking to improve this score.* |
CR report:
Management Control |
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| Employment equity |
Employment equity score dropped from 5.1% to 3.8%, partly
due to retrenchments at Powertech. The formation of the
HCC is intended to play a key role in improving this score.* |
CR report:
Employment Equity |
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| Skills development |
Skills development improved from 11.9% to the full 15% as
per the dti CoGP. Altron ranked top company in the country for
skills development by FM/Empowerdex Top 200 Empowerment
Companies ranking, spending more than R62 million on
training programmes during the year.* |
CR report:
Skills Development |
LA11 |
| Preferential procurement |
The preferential procurement score improved from 14.2% to
17.6% out of a total maximum score of 20%. Altron engages
an external agency to rate and accredit certain suppliers.* |
CR report:
Preferential procurement |
EC6 |
| Enterprise development |
Altron maintained a full-points score of 15%. Some Altech
operations not yet matching this performance. Further
enterprise development partnerships to be investigated in the
year ahead.* |
CR report:
Enterprise Development |
EC6 |
| Socio-economic development (SED) |
Altron maintained a full-points score of 5%*. |
CR report:
Socio-economic development |
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The environment |
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| Management and policy |
Communities
Public at large
Government
Regulators
Industry bodies |
The Altron board adopted a single group-wide policy for
safety, health and environment during the year under review.
The company intends publishing a pamphlet during 2010
describing the group’s response to environmental risks and
opportunities. |
CR report:
Management and policy |
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Reducing Altron’s carbon footprint
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Altron’s carbon footprint improved in accuracy and
inclusiveness (now including business road travel and
commuting on private vehicles). Total footprint estimated at
146 219 metric tonnes of CO2e. Altron ranked 17th out of
the JSE Top 100 on the Carbon Disclosure Leadership Index
(CDLI) for companies contributing to the Carbon Disclosure
Project (CDP). |
CR report:
Reducing carbon footprint |
EN3
EN4
EN16
EN26 |
Improving energy efficiency
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Altron’s electricity consumption of 113 924 953 kWh
accounts for in excess of 80% of the group’s total greenhouse
gas emissions. Through Altron’s internal programme,
Powersave@Altron, the company is introducing power-saving
initiatives. |
CR report:
Improving energy efficiency |
EN3
EN4
EN26 |
| Responsible use of water |
Altron cannot presently describe its water use by quantity and
source, but is working towards gaining a full understanding
of this important issue. |
CR report:
Responsible use of water |
EN8 |
Reducing pollution and harmful emissions
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The most material pollutants and harmful emissions include
polychlorinated biphenyls (PCBs), transformer oil, total
petroleum hydrocarbons and lead. There were no significant
spills during the year under review. Leaks, spills and recovery
measures are monitored and guided by external independent
auditors. |
CR report:
Reducing pollution and harmful emissions |
EN23 |
Usage of materials and handling of waste
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Lead is the only hazardous substance used in significant
quantities, and this is closely managed. All companies
maintain an asbestos register and waste is being managed in
accordance with the new Waste Management Act. |
CR report:
Usage of materials and handling of waste |
EN12
EN26 |
| Responsible management of the product lifecycle |
Willard Batteries recovers more than 90% of automotive
batteries it produces and around 80% of industrial batteries.
Aberdare Cables recycled nearly 500 tonnes of waste,
including cardboard, copper, paper, aluminum, galvanised wire,
printer cartridges, wooden palettes, PVC and metal. Altech
Autopage Cellular is assessing how to deal with recycling
mobile handsets. |
CR report:
Responsible management of the product lifecycle |
EN26 |
Business conduct in foreign operations |
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| Impact of operations |
Communities
Government
Regulator
Industry bodies |
In various regions, Altron provides its services at low cost,
in particular offering free internet connectivity to certain
communities in Kenya. The prepaid model for cellular vouchers
ensures customers are not tied into fixed-term contracts they
cannot afford. |
CR report:
Impact of operations |
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| Human rights and fair labour practices |
During the year under review, Altron formulated a group-wide
human rights policy which will shortly be adopted by all local
and foreign operations. Suppliers and contractors are given
clear expectations, but are not yet screened. While there were
no incidents during the year under review, the company is
aware of the perceived or potential risks of importing
electronic components from some suppliers, and is working to
improve screening in high-risk areas. |
CR report:
Human rights and fair labour practices |
HR2 |
Corporate governance issues |
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Protection of minority shareholders’ rights
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Shareholders
Employees
Government |
The Altron board appointed Mr Mike Leeming as lead
independent non-executive director on the company ’s board
to further support the independence of the board and reduce
potential conflicts of interest. |
CR report:
Protection of minority shareholders’ rights |
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Management of ethics and business conduct
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Altron adopted a group-wide code of ethics and intends
supporting this with training of senior managers and
executives. There were two material matters during the year:
the Competition Tribunal finding against Altech Netstar and
others (currently on appeal) and the Competition
Commission ’s investigation against Aberdare Cables (and
others) for alleged prohibited practices. The company is
co-operating fully with the authorities. |
CR report:
Management of ethics and business conduct |
4.6 |
