About this Report
This Report, for the financial year ended 31 December 2011, is AECI’s first Integrated Report to stakeholders, in accordance with the principles contained in the King Report on Governance for South Africa, 2009 (“King III”). The Company notes that its adoption of integrated reporting will be an evolutionary and developmental process and that it could take a number of years to implement in full.
The primary objective of integrated reporting is
to demonstrate an organisation’s ability to create
and sustain value over the short, medium and
long term. This Integrated Report aims to provide
stakeholders with a greater understanding of
the Group’s strategy, overall sustainability, its
operational performance, risks and opportunities,
Issues which are identified as being of material significance to stakeholders guide integrated reporting. For the AECI Group, this identification is complicated by the diverse nature of its businesses and hence its stakeholders. Significant work has been done to establish an overall risk framework for AECI. Accordingly, the Company has elected to use this framework to determine materiality for the purposes of the content and layout of this Integrated Report.
The methodology and framework for risk management were based on the Committee of Sponsoring Organisation of the Treadway Commission and enhanced with the adoption of ISO 31 000 for managing risks, and King III principles on the governance of risks.
Other than the risk management framework, the reporting principles applied in the preparation of this Report include: the Companies Act, No. 71 of 2008 (“the Companies Act”), in South Africa; the Listings Requirements of the JSE Limited (“JSE”) and the requirements of the JSE’s Socially Responsible Investment (“SRI”) Index in 2011; King III; International Financial Reporting Standards (“IFRS”); the Carbon Disclosure Project (“CDP”); the international chemical industry’s Responsible Care™ programme, as well as AECI’s own internal reporting Standards.
SCOPE AND BOUNDARIES
The scope of this Report includes all of AECI’s subsidiaries and joint ventures, in South Africa and in other countries, over which it has financial control. A list of principal subsidiaries and joint ventures is provided in notes 35 and 36 of this Report as well as in our Operational Review . The Report relates to the financial reporting period 1 January 2011 to 31 December 2011.
The Board of Directors (“the Board”) is required in terms of the Companies Act and the JSE Listings Requirements to prepare Annual Financial Statements which fairly present the state of affairs of the Company and the Group as at the end of the financial year and of the profit or loss for that period, in conformity with IFRS. The Company’s external auditors are responsible for examining the Annual Financial Statements of the Company and its subsidiaries and for reporting their opinion on these Statements to shareholders. Furthermore, the external auditors must determine whether the Annual Financial Statements are in accordance with the Act, IFRS and the JSE Listings Requirements.
Any necessary restatements of financial information are identified and explained in the Annual Financial Statements.
External assurance obtained in the current year also included limited assurance on selected sustainability information. Environmental targets are provided for the first time and, therefore, no comparisons against targets for prior years were possible. See Sustainability Report.
The combined assurance approach will be enhanced further in future years to confirm the appropriate application of integrated reporting principles and the integrity of data contained in future Reports.
There are no material changes to the content of this Report compared to 2010’s Annual Report, other than a greater emphasis on providing more detailed information on the Company’s strategic direction and sustainability initiatives.
The AECI Group has a broad spectrum of stakeholders. These include employees, shareholders, customers, suppliers, technology and joint venture partners, local and national government structures, other regulatory and industry bodies, the communities in which the Group operates, special interest groups and the media.
AECI’s subsidiaries and joint ventures interact with their customers, suppliers, employees, trade unions, communities and interest groups, pertinent regulatory structures and the media on an ongoing basis in the ordinary course of business. Such interaction occurs in both formal and informal forums.
AECI Limited interacts with its shareholders, via announcements released on the JSE’s Securities Exchange News Service (“SENS”), the dissemination of financial results electronically and in print, Company presentations, business-specific site visits and meetings. The same information is made available and often presented to employees Group-wide. Pertinent information is disseminated to the media.
The Company welcomes written comments and feedback from its stakeholders on this Integrated Report and on other general matters. These should be addressed to: The Company Secretary, AECI Limited, Private Bag X21, Gallo Manor, 2052; or email email@example.com
APPROVAL OF THE INTEGRATED REPORT
The Board acknowledges its responsibility to ensure the integrity of the Integrated Report. The Directors confirm that they have collectively reviewed the content of the Integrated Report and believe it addresses material issues, as determined by using AECI’s risk framework as a screening mechanism, and is a fair presentation of the integrated performance of the Group.
The Board approved the release of the 2011 Integrated Report on 30 March 2012.