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Update on Key Sustainability Issues
Allied Electronics Corporation Limited
Registration number 1947/024583/06)
Incorporated in the Republic of South Africa)
Share Code: ATN ISIN: ZAE000029658
Share Code: ATNP ISIN: ZAE000029666
(“Altron” or “the company”)
Update on Key Sustainability Issues
Altron’s shareholders, including other stakeholders, are referred to the company’s 2013 integrated
annual report (IAR) which informed stakeholders of Altron’s four (4) core strategic themes and 12
material issues which ultimately drive the long-term success and sustainability of the business. The
2013 IAR provides a detailed business model for the Altron group (the Group) and also describes
the Group’s recently launched sustainable business strategy in detail.
The strategy, which contains short, medium and long term objectives, aims to guide the Group
towards an increase in revenue generation and profitability, whilst improving its competitive
advantage in response to trends related to the sustainability challenges the Group faces as an
industry.
The application of Altron’s sustainable business strategy is no more evident than in the recent
acquisition of the Altech minorities’ shares in Altech and the subsequent establishment of the
Altron TMT division which includes both the Altech and Bytes businesses. The Group clearly
exhibited a sustainable business approach, showing its commitment to improve profitable revenue
growth (financial sustainability), invest in its people (human capital), lead through innovation
(products and services) and continue to reduce the impact on the environment and the
communities it operates in (external relationships).
Altron recognises that transparent and effective communication builds trust and confidence among
stakeholders and with this SENS announcement wishes to update its shareholders including other
stakeholders on recent sustainability developments.
Financial Sustainability
Altron has, in the past six months, seen a recovery in its financial performance, as was
communicated to shareholders in its trading statement which was released on SENS on
20 February 2014.
The company has continued to focus on improving profitable revenue growth through sound
investments, innovation and investing in its employees. Cost and cash management remains a
material issue for the Group, with a continued focus on implementing shared services across areas
such as human resources, marketing, IT and legal services. The consolidation and centralisation of
some of the Group’s procurement processes has already resulted in meaningful cost savings and
an overall improvement in purchasing power by the Group.
Human Capital
Altron’s employees are critical to the achievement and the success of its new sustainable business
strategy. The Group remains committed to the development and wellbeing of its employees
through on-going training and talent management programmes, skills development, staff retention
initiatives and individual performance reviews. These commitments are clearly displayed in the
‘Beyond 2012’ vision strategy. The Group is now focusing on developing and rolling out specific
targets to measure and monitor progress made in terms of achieving specific development targets
for the Group and will also be increasing general awareness around human rights, HIV/AIDS and
employee wellness over the next few years.
In addition, Altron is currently looking at consolidating all the training initiatives, academies and
learnership programmes offered across the Group with the objective of improving training
effectiveness, encouraging the sharing of best practises and optimising cost and training
outcomes.
The theme of a ‘collaborative company culture’ was reinforced when Altron was ranked as the top
company in S.A in 2013 in terms of organisational culture, satisfaction and leadership by The
South African National Business Ethics Survey conducted under the auspices of The Ethics
Institute of South Africa.
Products and Services
The Group’s commitment to deliver innovative and sustainable products and services to its
customers is a key differentiator and will protect its existing market share in an increasingly
competitive business environment.
The recent acquisition of the Altech minority shares, resulting in Altron now owning 100% of Altech,
lead to the combination of Altron’s telecommunications, multi-media and IT businesses under the
Altron TMT division which will unlock new revenue streams and create innovative growth
opportunities for Altech and Bytes.
A number of initiatives are underway at Powertech to counteract the Group’s exposure to the weak
building and construction sector, including; restructuring certain of its facilities, investment in
market expansion in Africa; increased focus on supplying products and services into the renewable
energy and rail sectors; and a reduction in reliance on pure manufacturing operations.
Altron will continue to monitor and report on research and development spend, one of the
indicators that shows its ability to innovate and grow. With increased customer awareness and in
line with recent legislation changes, Altron plans to include more “green” innovation into its suite of
service offerings and also encourage more environmentally friendly products and services from its
own supply chain, through our ‘sustainability in the supply chain’ initiative discussed in more detail
below.
External Relationships
Altron’s ‘external relationship’ core theme includes a myriad of different relationships extending
from its clients to the natural environment. Building and sustaining relationships with all
stakeholders and caring for the environment, is part of the Group’s inherent identity. For the first
time Altron provided detailed descriptions and feedback on its stakeholder engagement process in
its 2013 IAR, and aims to improve its disclosure in its next IAR.
Sustainable and sound strategic partnerships with leading global companies have enabled the
Group to continue to offer its customers comprehensive solutions and cutting edge technology.
Understanding and responding to client needs remains a major focus for the Group and cross- and
up-sell opportunities of the Group’s products and services will be further enhanced in the newly
established Altron TMT division.
With an increased focus on supply chain management, Altron is committed to introducing a formal
sustainable supply chain strategy in 2014. A strategic planning session on the methodology,
approach and expected outcomes of the strategy was held in October 2013, resulting in a four
phased approach of development, implementation, evaluation and monitoring of the supply chain
strategy.
As part of its on-going commitment to the environment, Altron continues to increase environmental
awareness through; its annual environmental workshops; poster campaigns, screen saver tips and
various internal articles and competitions. The Group has participated in the Carbon Disclosure
Programme (CDP) for the fifth time and in the CDP Water Disclosure Programmes for the third
time in 2013. It also continued with its participation in the JSE SRI Index and reported in terms of
the United Nations Global Compact during 2013.
Areas of focus going forward will include improvement in comparable environmental data,
implementation of a comprehensive environmental management strategy (including water and
waste) as well as the roll-out of a sustainable supply chain strategy.
Altron is proud to announce that during the past year, it won prestigious awards for:-
• best Integrated Annual Report at the Chartered Secretaries Southern Africa (CSSA) and JSE
Ltd awards event;
• the Association of Chartered Certified Accountants (ACCA) - Best Sustainability Reporting
Award in the non-resources category; and
• scored an 88B in the latest CDP placing Altron second in the industrials category.
Altron understands that sustainability demands a broad view of issues and impacts, as well as a
working understanding of the business. Providing feedback to our stakeholders is one of the ways
in which Altron remains committed to its long term strategy of being a responsible corporate
citizen.
Johannesburg
25 February 2014
Sponsor:
Investec Bank Ltd
Date: 25/02/2014 12:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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