Axtel Annual Integrated Report
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2014 axtel annual integrated report $ Table of contents PROFILE Letter from the Chief Executive Officer 03 Profile 05 2014 in numbers 06 AXTEL 07 Corporate governance 07 Board of members 08 Executive team 13 Audit and corporate practices comittee 15 Risk management 15 Business ethics and human rights 16 Services 18 Technology 21 Quality management system 22 Sustainability 23 2014 in numbers 24 Sustainability statement 25 Sustainability model 25 Stakeholders 26 Suppliers 30 Community 31 Customer satisfaction 32 AXTEL Foundation 33 Social perspective 36 2014 in numbers 37 Workforce 38 Training 40 Integral and occupational safety 41 Environmental perspective 43 2014 in numbers 44 Energy and air emissions 46 Water 50 Waste management 50 Financial perspective 52 2014 in numbers 53 Outstanding data 54 Comments and analysis of the administration regarding the operating results and financial situation of the issuer 56 Independent auditor’s report 59 Financial information 60 Memory parameters 94 Materiality 94 GRI index 96 Certifications 102 Verification 103 2 / AXTEL 2014 ANNUAL INTEGRATED REPORT Letter from the Chief Executive Officer PROFILE G4-1 Dear friends, In AXTEL we thank you for your trust and preference; for allowing us to be part of your daily life in your homes and businesses. As a commitment to that trust, as we do every year since 2011, we report with transparency our economic, social and environmental performance through our Integrated Report 2014. We are part of a modern and agile industry that is key to society’s progress and development. The challenges we face motivate us to seek innovation and constant growth. The connectivity we bring through our services is a positive factor to our users’ welfare; however, we are also aware that we must provide access to more people, and that our contribution to the development of those communities lacking technology and communications, is imperative. With this goal in mind, we have made available to the Communication and Transport Ministry (SCT) our connection for telecommunications services in low- income areas where we have our own coverage and infrastructure. This way, we collaborate with municipal and state governments in the development of schools, hospitals and libraries, putting at their disposal our telephone and internet services at lower prices. In the coming years, as part of our commitment to social and rural coverage, we will strengthen our service and technology offer in areas with no telecommunication services supply, to stimulate the development and growth of more communities. The series of challenges and relevant developments in the industry in 2014 definitely have an impact in our performance and future perspectives. During the year’s first semester, the Legislative Branch of government approved a set of secondary laws that define the details about the implementation of the Telecommunications and Economic Competence Reforms passed in 2013, which presents us with new challenges, as well as opportunities. We are still working on our business strategy, focused on sustainability, and we are aligned with our financial plans, with an adequate management AXTEL 2014 ANNUAL INTEGRATED REPORT / 3 PROFILE our appropriate levels of liquidity and strict spending control. ethical foundations. We are strongly committed to behave with integrity in our operations and with our suppliers, clients, authorities and diverse stakeholders with whom we are collaborators and the community. connected. We constantly pursue innovation in our services offer that Our sustainability and corporate practices allow us to be part, for the second year, of the Sustainability Index of the Mexican Seguridad Hogar service, launched in 2014, provides parents Stock Market (BMV), and for the fourth consecutive year we control over the information that their children are looking up in social media, helping them prevent ciberbullying and Nations Global Compact, refferred to human rights, labor, the access to inappropriate content for minors. In 2014, we created 6 thousand 900 jobs that contribute today All of the above represents an excerpt of our performance in with creativity, innovation and talent to the improvement of 2014, which is provided in detail in this document. However, our services offer and customer service. To each one of them, our commitment is not limited to a report, but to a series of we provide a platform for their personal and professional initiatives and projects in which we will keep working jointly development and growth. with our more than 6 thousand collaborators. This way, AXTEL will continue to foster innovative practices for the Additionally, through Fundación AXTEL, we are connected to development of the community to which we offer our services, the communities close to our operations, where we strive to and we are proud to be a part of. have a positive impact to their development through alliances with social oriented institutions. Our goal in 2014 was to participate in projects directed towards the educational and social development of youths at risk. On the other hand, we perform activities that contribute to the mitigation of our operations’ impact on the environment. In 2014, we supported various initiatives to reduce water, energy our GEI Report (Greenhouse Gas) to SEMARNAT, as part Tomás Milmo Santos of our commitment with the reduction of CO2 emissions Chairman of the Board of Directors generated by our operations. and Chief Executive Officer 4 / AXTEL 2014 ANNUAL INTEGRATED REPORT PROFILE $ 2014 in numbers PROFILE G4-9 / G4-EC7 43 thousand million MXN invested in infrastructure 200 cities with AXTEL 14 thousand connectivity 780 kilometers service of optical fiber network 39 cities on our own AXTEL network One million 511 thousand RGUs (Revenue Generating Units) 179 thousand clients with FTTx technology 330 thousand WiMAX technology 908 thousand Internet subscribers telephone lines 94 thousand in service subscribers for AXTEL TV Service 509 thousand 4 new services broadband Internet integrated in subscribers our portfolio 200 complaints received, addressed and solved 24 new improvement projects launched What did we work on We launched AXTEL X-tremo and AXTEL during 2014? TV in Ciudad Juárez and Toluca. covering We included HBO GO in AXTEL TV an area equivalent to 50 thousand homes enabling our subscribers to enjoy the and businesses, while in Toluca our entire HBO programming online without market potential is that of 242 thousand any additional cost. homes and businesses. We offer new channels in AXTEL TV. Together with HBO Latin America, we The high definition offer includes 27 launched On Demand Video service, new channels, with a total of 51 in the without additional cost for all the HBO/ programming bar in addition to open MAX package subscribers, which makes television channels. Likewise, AXTEL TV AXTEL TV the only operator in Mexico incorporated 17 new signals in standard that has a complete HBO offer, including definition, having a total of 102 channels, 10 high definition channels , HBO GO besides the open television signals and HBO On Demand. broadcasted locally. 6 / AXTEL 2014 ANNUAL INTEGRATED REPORT AXTEL PROFILE G4-3 / G4-4 / G4-5 / G4-6 / G4-56 We are a Mexican telecommunications company that offers world class technology and services. Within our offer, we provide the fastest Internet service in Mexico, broadband, voice, Pay TV Service, and we have an extensive solution portfolio of Information Technology and Communication (TIC) solutions for the corporate and government sector. MISSION VISION Improve communication to enhance life. Innovating communication experiences that bring people closer to what they care the most for. VALUES: SERVICE Excellence and attitude helping others. COMMITMENT COMMUNICATION Honoring promises. Improving the quality of our dialogues at every moment. HONESTY INNOVATION Respecting the truth. Making new ideas a reality: transforming life. If you wish to learn more about our culture, we invite you to visit: www.axtel.mx/sustentabilidad Corporate Governance G4-17 / G4-38 / G4-39 / G4-40 / G4-41 / G4-42 / G4-44 / G4-51 / G4-52 The characteristics of the Board of Directors are: • It is led by Tomás Milmo Santos, President and Chief Corporate Governance at AXTEL is formed by executives Executive Officer. with outstanding business capabilities. Each one of them • It includes 10 proprietary board members and nine participates with management skills, expertise, leadership and alternate directors, out of which two are women. and business knowledge for leading the company towards • The board members are designated by the shareholders a future of growth, profitability and soundness that ensure in the Ordinary General Shareholders’ Meeting and their sustainability in the long term. retribution is established annually by the Shareholders’ Meeting. In 2014 the total compensation paid to company Some of the main functions, duties and obligations of the executives and Board members were approximately $72 Board of Directors are: million MXN. • Managing, identification and mitigation of potential risks • All decisions made by the Board of Directors in regards to which AXTEL is exposed, internally as well as in the to desgination, functions, and responsibilities of the board environment. members are regulated by the Securities Market Law • Overseeing compliance of the current laws including the (LMV), as well as by AXTEL bylaws. Likewise, work is Securities Market Law (LMV in Spanish) adhered to the Securities Market Law following rules and