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Sustainability

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›	Wellness and HIV/Aids
›	Training and development
›	Trade unions and employee participation
›	Employment equity & B-BBEE
›	Stakeholder engagement
›	Community involvement
›	Remuneration report 2012

Employment equity & B-BBEE

A number of Employment Equity initiatives were implemented in the year. Human Capital policies and procedures were reviewed and amended to align them with the Employment Equity Act, No. 55 of 1998 (“the Act”) and Code of Good Practice.

The Chief Executive communicated the Group’s transformation process and its revised Employment Equity targets to all employees in management occupational levels.

Monthly progress reports towards the achievement of these targets were provided to the Managing Director of each Group business to track developments and establish designated priority lists in terms of race and gender for each company.

Also implemented were the following:

›	all professional Human Capital Practitioners in the Group were trained on the Act;
›	Group company representatives and AECI Head Office Senior Managers were similarly trained;
›	Employment Equity awareness sessions were presented to employees in all Group businesses;
›	focus group interviews were conducted in all businesses to establish affirmative action barriers;
›	a process of nominating and electing Employment Equity Committees was conducted; and
›	the elected members of these Committees underwent training on the Act and their role in this context.

The AECI Executive Committee reviewed the affirmative action barriers identified during focus group interviews and proactive measures to address concerns were agreed with each Group business, as were implementation timelines.

The annual Employment Equity report was prepared for submission to the Department of Labour. Reports to the Director General of the Department of Labour were also submitted per business segment namely AEL, the specialty chemicals cluster (including AECI Head Office), Heartland and DetNet.

EMPLOYMENT EQUITY STATISTICS

Excluded from the percentages provided in the statistics represented graphically below are personnel employed by Group manufacturing and business activities outside of South Africa. In line with the Act, included are temporary employees who have been employed for more than three months.

Some year-on-year improvement in the representation of designated group members was achieved as follows:

›	Top Management from 14% to 29%;
›	Senior Management from 26% to 28%; and
›	Middle Management/Professionals from 46% to 47%.

Initiatives identified to further enhance the representation of designated groups at all managerial and professional occupational levels in 2013 include:

›	embedding Talent Acquisition processes to achieve external recruitment targets for designated groups;
›	researching and implementing programmes to empower women and people with disabilities;
›	introducing Management Development Programmes at all management levels, in partnership with the Gordon Institute of Business Studies; and
›	researching an integrated employee value proposition to assist in attracting and retaining talent in the Group. Implementation of this is scheduled for 2014.

31 DECEMBER 2012

TOP MANAGEMENT: 29%*

SENIOR MANAGEMENT: 28%*

MIDDLE MANAGEMENT AND PROFESSIONALS: 47%*

JUNIOR MANAGEMENT AND SKILLED: 77%*

SEMI-SKILLED: 98%*

UNSKILLED: 97%*

31 DECEMBER 2011

TOP MANAGEMENT: 14%*

SENIOR MANAGEMENT: 26%*

MIDDLE MANAGEMENT AND PROFESSIONALS: 46%*

JUNIOR MANAGEMENT AND SKILLED: 74%

SEMI-SKILLED: 96%

UNSKILLED: 99%*

BROAD-BASED BLACK ECONOMIC EMPOWERMENT (“B-BBEE”)

AECI supports the South African government’s B-BBEE initiatives and recognises the importance of these in achieving a sustainable economic and political environment in South Africa through meaningful participation by Black people in the mainstream economy. AECI is committed to the implementation and success of broad-based empowerment throughout the Group and several years ago implemented a number of initiatives relating to Employment Equity, skills development, preferential procurement, enterprise development and corporate social investment including the initial empowerment of AEL, which introduced a Black strategic equity partner in 2004.

AECI’s customers in the mining sector are increasingly making it a condition of their procurement from the Group that it has at least a 26% effective B-BBEE ownership. The B-BBEE transactions implemented in 2012 ensure that AECI exceeds the B-BBEE ownership target being set for it by the customers who generate most of its business revenue.

Furthermore, the B-BBEE transactions advance AECI’s empowerment objective of increasing Black participation in the Group through the transfer of long-term economic benefits of its success to a broad spread of Black South Africans and to communities in which the AECI Group operates or has an interest.

The inclusion of employees spreads a significant portion of the benefits of the B-BBEE transactions among AECI’s permanent employees. The sustainability and growth prospects of AECI are expected to be enhanced by:

›	improving the Group’s ability to attract, incentivise and retain Black employees and managers;
›	aligning the interests of employees and AECI shareholders; and
›	recognising and rewarding employees who have enabled the success of the Group.

The inclusion in the B-BBEE transactions of Black communities in areas where AECI operates or has an interest is aimed at uplifting and developing skills pertinent to AECI’s businesses, and to South Africa as a whole, in those communities. Mathematics and science education will be a particular focus.

AECI’s B-BBEE transactions were approved by shareholders in January 2012. In terms of these transactions, AECI facilitated the subscription by an Employees Share Trust (“EST”) and the AECI Community Education and Development Trust (“CST”) for an effective 11,5% of its enlarged share capital. The EST holds 8% and the CST 3,5%. About 3 900 employees are beneficiaries of the EST with 73% being Black, 13% of whom being Black women. Eligible employees are all permanent employees of AECI companies in South Africa who are not participants in other Group long-term incentive schemes, and Black managers.

At least 85% of the economic benefit accruing to the CST will benefit Black people and at least 30% of this will benefit Black women. The CST will complement AECI’s existing initiatives to uplift and develop skills pertinent to its businesses, the development of South Africa as whole and Black communities where the Group operates or has an interest.

Late in 2011 AECI also acquired the 25,1% shareholding in AEL formerly held by a consortium led by Kagiso Tiso Holdings Proprietary Limited (RF) (“KTH”) , in exchange for new ordinary shares in AECI equivalent to 3,7% of AECI’s enlarged share capital.

Circulars and announcements relating to the B-BBEE transactions are available via the link http://www.aeci.co.za/cl_bbbee_transactions.asp