A N N U A L   R E P O R T   –   2 0 0 2 
Financial highlights Statutory information
Letter to the shareholders Accounting policies
Board of directors Income statements
Group operations Balance sheets
Developing people Cash flow statements
Corporate governance Notes to the cash flow statements
Value added statement Statements of changes in equity
Segmental analysis Principal subsidiaries
Five-year financial review Share ownership analysis
Summary of statistics Shareholders’ diary
Definitions Administration
Directors’ responsibility Notice of annual general meeting
Report of the independent auditors Currency conversion table
Secretaries’ certification  

D E V E L O P I N G   P E O P L E
 

Reunert is a technology-rich company. As such, it is appropriate that the focus of its corporate efforts to assist and uplift the people of South Africa should be on areas where technical skills can be developed. It is generally accepted that the areas of science and mathematics are where most South Africans of all races require growth and development.

This is especially vital if South Africa is to assume its rightful place in technological research and development in Africa and the rest of the world. In his State of the Nation addresses during the opening of Parliament in 2000 and 2001, President Thabo Mbeki emphasised the importance of mathematics and science as part of our national human resources development strategy.

The National Strategy for Mathematics, Science and Technology Education issued by the Department of Education in 2001 includes in its main thrusts the need to "raise participation and performance by historically disadvantaged learners in mathematics and physical science" and "to increase and enhance the human resources capacity to deliver quality mathematics, science and technology education".

For these good reasons, companies of the Reunert group are individually and collectively making positive changes and investing vital resources that will help to increase the technological knowledge of many South Africans, especially people from historically disadvantaged communities. Reunert is justifiably proud that it has one of only three business representatives appointed by the Minister of Labour to the National Skills Authority.

A number of other social initiatives, particularly in the area of Aids awareness, are undertaken by group companies, some of which are outlined briefly in this report.

The Reunert group is strongly committed to advancing its role as a catalyst for promoting meaningful and sustainable black economic empowerment (BEE) across all companies. BEE programmes are in place to ensure that all aspects of the businesses, from shareholdings to procurement policies and employment equity programmes, reflect Reunert's BEE commitment.

 
Reunert College

The Reunert College is central to the group's corporate commitment to helping to advance meaningful sociopolitical change and economic empowerment in South Africa. The college was established in 1993.
 

The Reunert College operates under the tireless leadership of Marina Gunter

The primary focus of the college is to assist learners from historically disadvantaged communities to improve their matriculation grades for the academic subjects of mathematics, science and English. In addition, the college provides an academic bridging year to assist those students wishing to enrol for tertiary education in the science and technology fields.

To date, more than 500 learners have participated in the college's matriculation-orientated academic advancement courses. The average matriculation pass rate achieved to date by our students exceeds 95%, substantially above the average achieved for maths and science in national schools. As a result, several students have been able to enter the engineering field and a number are currently studying at a university or technikon.

The Reunert College is accredited for experiential training by the technikons of the Witwatersrand, the Vaal Triangle and Pretoria. Most of the students qualify in the field of electrical engineering, followed by mechanical and industrial engineering.

The Reunert Bursary Fund is an essential part of the college and more than 360 bursaries have been awarded since its inception. Many of the group's bursary students have subsequently been employed by the group, either as part of their practical or experiential training, or as permanent employees.

The college has initiated several other training programmes, often involving employees in the group. The remedial programme, for example, has been designed to assess and assist learners referred to the college by local community schools. Learners undergo an initial assessment where their abilities and problems are identified and a full remedial programme, including life skills training, is devised and implemented as an adjunct to the learner's normal schooling.

Reunert College operates a centre for career development and guidance. This service is open to Reunert group staff and the community, as well as college students. Working with Rand Afrikaans University, teachers in disadvantaged areas have been invited to attend career-planning workshops to enable them to apply career guidance techniques in their own schools.

In support of the National Strategy for Mathematics, Science and Technology Education, Reunert launched the WeGo project that is aimed at teachers of technology, mathematics, science and English at all levels from grades eight to 12. Teachers from selected pilot schools were invited to attend a series of Saturday morning workshops.

Of concern were the many teachers who lack basic equipment and facilities in their schools. In many cases, teachers noted that they cannot conduct basic science experiments because of a lack of science equipment. Despite this, the response from the teachers who attended was gratifying and the college hopes to expand the programme in 2003.
 

Pearl Nhlapo received accolades as Reunert College Dux student 2002

The Reunert College will continue with its community involvement programmes in the 2003 financial year, including remedial education, school partnerships for training, career guidance for any learners, and adult basic education and training (ABET) for the community.

 
Other training and development initiatives

Apart from the excellent work done by the college, several Reunert companies are actively involved in education and training in their local communities.

In 1993, the staff at African Cables identified the need for additional mathematics and science training in the Vaal Triangle area. Having identified Riverside High School as a centre of excellence, African Cables has been sponsoring a Saturday school since 1994. To date, more than 400 pupils have been assisted. Many of them have subsequently performed significantly better at school and have since progressed to a university or technikon education.

ATC's social responsibility programme features several education-related activities, including:

  • a R600 000 a year bursary scheme;
  • a joint venture with Telkom, Rand Afrikaans University and Wits Technikon to develop a centre for optical communication, to which ATC and Marconi contribute R280 000 a year;
  • the provision of building materials and infrastructure to Ras Primary School where, having been involved in a water supply project, the company is now assisting in the supply of electricity, as well as assisting in mathematics and science education; and
  • the continuing involvement in the Madibeng Centre for Research near Brits in the North West.

NPC (Electronics) Limited, together with its Japanese principal, Matsushita Electrical Industrial Company, donated R1 million to the Mhlontlo Senior Secondary School at Mount Fletcher in the Transkei. The company has also been involved in the Twilight Children project since 1994. This project aims to help street children to become meaningful members of society by ensuring that they are cared for and educated.

Reutech Radar Systems has continued to identify needs and opportunities in its local communities and, among its many activities, has donated computers to local schools. RRS also participated in career exhibitions for tertiary education institutions in historically disadvantaged communities, as well as various local charity organisations.

 
Aids

The Nashua companies, in particular, have made HIV/Aids and Aids awareness their prime focus. Nashua Mobile has concentrated on donating cash and products to the Reach for a Dream Foundation and the Topsy Foundation, which takes care of HIV-positive babies and Aids orphans.

The slogan, Spread the word and not the disease, underpins Nashua's commitment to promoting improved HIV/Aids awareness and education, not only within Nashua itself, but also in the greater community. Targeting senior primary school children, an audience not traditionally focused on by organisations such as Love Life, Nashua has sponsored several Aids awareness programmes among learners in grades five to seven at Ivory Park and Alexandra in greater Johannesburg. Working with some of its key suppliers, school essay competitions have been organised to encourage the development of more thought and understanding of the Aids issues among children at this age level.
 

Nashua Nkosi's Haven 

In 2001, Nashua started the Nashua vs Aids challenge to raise funds for Nkosi's Haven at Berea in Johannesburg. Funds raised in conjunction with Nashua's business partners have enabled the purchase of land adjacent to the haven, the building of a hospice facility and substantial repairs to the existing building. Nashua remains committed to using its extensive business network to promote Aids awareness in all communities.

 
Black economic empowerment

Reunert has adopted a multi-level approach to BEE. At the level of the listed company, Reunert continues to actively seek out appropriate shareholder groups that will add value to the group's business strategy and operations. At operating company level, several group companies have secured the participation of strategic BEE shareholders.

Kgorong Investment Holdings ­ an investment company owned by an institutional investor, trade unions, a women's investment group, a black professional organisation and Kgorong management and staff ­ currently holds 10% of Reutech Radar Systems (RRS) and 30% of Reunert Defence Logistics (RDL). In addition, Kgorong holds two seats on the RDL and RRS boards of directors.

ATC has committed itself to finding a BEE grouping to acquire ownership in the company. Reunert and its group companies expect to introduce greater BEE shareholdings during the course of the 2003 financial year.

Wherever possible, group companies outsource to, or partner, with BEE companies. African Cables helped to establish Bogabane Engineering CC, which currently operates from the African Cables business premises.
 

Marline Andrews got the opportunity to start her own catering business, MCA Caterers after Panasonic Manufacturing renegotiated its canteen services

To date, this company has received business to the value of R669 000 from African Cables and is in the process of expanding and establishing itself independently.

In addition, African Cables' purchases of goods and services from local small, medium and micro enterprises (SMMEs) totalled about R14 million for the 2002 financial year. ATC has sourced goods and services to the value of R13 million from suppliers in the Brits area. While limited to importing the majority of its raw materials, ATC is committed to tripling its purchases from local BEE businesses over the next three years. The company has also been involved in establishing several SMMEs through the Greater Brits Investment Group, as well as through its own procurement and outsourcing programme.

Other group companies are also using local SMMEs where possible and RDL purchased goods and services to the value of R4,3 million from SMMEs during the 2002 financial year

 
Employment equity

At a company level, all operating companies are committed to employment equity and are progressing well in training and promoting staff within a framework of equity. The Reunert Skills Development Forum comprises members from all group companies and the forum is instrumental in assisting companies implement the letter and spirit of the new Skills Development Act, as well as in using the numerous activities of the various Sectoral Education and Training Authorities (Setas).

Group companies are either members of the Manufacturing, Engineering and Related Services Education and Training Authority (Merseta) Seta or the Information Systems, Electronics and Telecommunication Technologies (Isett) Seta. Reunert remains one of only nine companies nationally recognised by the Isett Seta to be committed to skills development.

Within each operating company in the group, staff have been identified for further training, be it at basic skills level or for management advancement. Promotion from within and on merit is the group's major means of job advancement, and is free from any form of discrimination. Preferential recruitment is given to suitably qualified people from designated groups ­ that is, blacks (Africans, Coloureds and Indians), women of all races and people with disabilities.

The group will, within the next few years, through selection, recruitment, training and development, together with internal promotions, create a pool of employees from designated groups with the requisite competence to perform at all levels within the organisation.

 
 
Human resources

Sound structures are maintained with the 24 trade unions recognised by the group ensuring that Reunert has enjoyed a low incidence of industrial action during the last few years.

Reunert is fortunate not to have experienced any significant direct effect on its businesses from the Aids pandemic. The group enforces a non-discriminatory Aids policy and, during the year, most of the companies expanded their awareness programmes on the prevention of the disease. African Cables instituted a basic homecare training course for employees' spouses. This course covered many elements, including basic first aid, home-based care and care for the elderly.

Members of the group pension fund have individual choice in selecting investment portfolios. Each quarter, the various funds' investment performance is communicated to staff to allow them to switch portfolios if required. This allows employees to maintain responsibility for their own retirement planning.

 


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