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Introduction By The Managing Member - Puma

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CONTENTS PAGE<br />

<strong>Introduction</strong> by the <strong>Managing</strong> <strong>Member</strong><br />

Mission Statement<br />

Our History<br />

Ownership Structure<br />

Management Structure and Governance<br />

Our Most Material Issues<br />

Use of Appropriate Technology<br />

World Class Products for World Class Customers<br />

<strong>The</strong> Vimal Team<br />

Research, Marketing and Procurement<br />

Occupational Health & Safety<br />

Environmental Management<br />

Social Responsibility and Community Investments<br />

Stakeholder Engagement<br />

DTI Codes Of Good Practice<br />

Human Rights<br />

Lessons Learned and the Way Forward<br />

Request for Feedback<br />

GRI G3 Application Level Requirements<br />

GRI Content Index<br />

Non- Independent Assurance Statement<br />

1<br />

3<br />

3<br />

5<br />

5<br />

8<br />

11<br />

13<br />

16<br />

21<br />

22<br />

25<br />

27<br />

28<br />

28<br />

29<br />

29<br />

30<br />

31<br />

32<br />

33


INTRODUCTION BY THE MANAGING MEMBER<br />

Vimal Clothing Enterprises cc (hereafter, ‘Vimal’) is a privately owned Durban-based clothing manufacturing<br />

company with a 26 year history. With more than R35 million in annual revenues, we are no longer classified<br />

as a SMME, or ‘Small, Medium or Micro Enterprise’, which brings with it both excitement and challenges.<br />

While extending beyond this economic milestone marks a significant and exciting development in our company,<br />

it also heralds a need for Vimal to ensure that the governance and management of the company moves<br />

from our historical ‘family business approach’, to a more structured ‘corporate approach’. This Sustainability<br />

Report is therefore a demonstration of our efforts to streamline our data management and reporting to<br />

key stakeholders.<br />

Since 1981, our primary manufacturing output has always been apparel, although we<br />

did spend a few years experimenting with furniture making and other initiatives. At<br />

present, our business consists of four business units: Vimal Clothing; Yash Clothing;<br />

Functional Sportswear and Niam Embroidery. Through the acquisition and development<br />

of these four equally important units, we have been able to diversify our products<br />

and services portfolio while identifying and concentrating on products that best<br />

suit our specific core competencies. Each of the business units is unique in its specific<br />

focus, but they ultimately work harmoniously with each other to share in making Vimal<br />

a successful manufacturer of sporting apparel.<br />

As a South African supplier of <strong>Puma</strong> AG, a world class sports brand, Vimal was invited<br />

to participate in a development programme supported by the German Development<br />

Agency (GTZ) and the Global Reporting Initiative (GRI) that taught us how to produce<br />

a Sustainability Report such as this one.<br />

Prior to the first workshop held in Cape Town in July of 2007, we knew nothing about<br />

Sustainability Reporting and very little about ‘Corporate Responsibility’. We knew<br />

that our success over the past 26 years has been based on our ability to focus on<br />

being ‘a good company’, but we never had occasion to understand that our customer<br />

and employee-centric approaches to surviving in a highly competitive market was of<br />

interest to people other than ourselves. <strong>The</strong> reporting process has therefore helped<br />

us understand how well we have been doing, while allowing us a unique opportunity to consider whether the<br />

business as a whole, or specific components within it, could be improved. Specifically, our attention has been<br />

drawn to issues such as environmental performance and improved employee engagement.<br />

However, it should be remembered that Vimal is not a large publicly listed company with endless supplies of<br />

cash or, more importantly, time.<br />

I, as the <strong>Managing</strong> <strong>Member</strong>, am but one man, and while I have a small team of dedicated management support<br />

staff, a task such as developing this Report is a monumental challenge when our time is already exhausted on<br />

the day-to-day activities involved in running our business. Thus we need to stress that this is our ‘first effort’ in<br />

producing a Sustainability Report, and while we may not have included all of the information stakeholders might<br />

require, we trust that we have made the best effort possible in our particular circumstances.<br />

Thankfully, the process of reporting was facilitated by Trialogue Assurance Services, a Johannesburg-based<br />

consultancy that offers similar services to companies that tend to be a lot larger than Vimal, with support from<br />

the GTZ, the GRI and <strong>Puma</strong>.<br />

<strong>The</strong> primary goal of this Report is to offer our many stakeholders an opportunity to better understand who we<br />

are as a company, as a team of individuals and as a proudly South African manufacturer of clothing. <strong>The</strong> following<br />

pages provide a summary of our ‘Most Material Issues’, including a discussion of how we believe we<br />

have been doing thus far and how we hope to improve in the future.<br />

It is important to note that the reporting period under question is limited to the 2007 Calendar Year (CY 2007),<br />

although we have attempted to include data for 3 years where it has been relatively easy to assemble. Where<br />

possible, trend analyses have been conducted for all available data on a month-by month basis.<br />

1


Our operations exist only in South Africa, and while our largest clients (Adidas and <strong>Puma</strong>) are international<br />

companies based in Germany, our sales are all directed to the South African subsidiary of these companies. All<br />

of our other clients are based in South Africa, while our principle suppliers of machinery and fabric are based<br />

overseas (principally Thailand and Taiwan).<br />

<strong>The</strong> value of this Report may not lie within these pages, but rather within the many lessons we learned while<br />

pulling this information together. Mostly, we learned that we actually possessed information, statistics and<br />

ideas that could support our assumptions about how good a company we are, as well as how we can potentially<br />

improve in the future.<br />

<strong>The</strong> content of this Report is set out according to the GRI’s G3 Guidelines, and because this is our first attempt<br />

at reporting our objective has been to meet the Application Level C requirements.<br />

At this time, it is my hope that you will find value in the information we have compiled on your behalf, and we<br />

hope that you will contact us should you have any questions or comments about this Report.<br />

Sincerely,<br />

Nayan Kalidas<br />

<strong>Managing</strong> <strong>Member</strong><br />

Vimal Clothing Enterprises<br />

2


MISSION STATEMENT<br />

Vimal Clothing Enterprise cc is committed to:<br />

1. Maintaining and expanding our reputation as a specialised knitted and woven garment supplier<br />

2. Maintaining a low cost structure and improving our efficiency standards<br />

3. Moving with changes in manufacturing technology and ensuring that production is in-line with best practices<br />

4. Recognising that our employees are our greatest asset, and accordingly attracting and retaining quality<br />

people who will identify with our culture of integrity and flexibility<br />

5. Continuously recognising our commitment to quality in our range of products, as well as in our service to<br />

customers<br />

6. Remaining a sound organisation through growth and profitability<br />

OUR HISTORY<br />

History is said to be the blueprint of the future, and nowhere is this more apparent than at Vimal Clothing<br />

Enterprise cc.<br />

Since 1981, when the Kalidas family first started Vimal Clothing, the company has continuously expanded<br />

its capacity in order to ensure that the company demonstrated a continuous ability to provide client-specific<br />

solutions to challenges presented by a diverse range of customers.<br />

<strong>The</strong> success of Vimal has been centred on its ability to translate customer challenges into innovative solutions<br />

that break traditional moulds and offer strategic solutions within rigid constraints of time, quality and price.<br />

During the infant stage of the business (the first four years) Vimal operated as a ‘cut, make and trim’ (CMT)<br />

factory which established a comprehensive understanding of the apparel business. However, we quickly learned<br />

that in order to afford maximum value to our clients we had to learn how to specialise in a select range of<br />

key products.<br />

As such, we chose to focus on a product range that incorporates the following garments, and their many<br />

variations within the respective divisions.<br />

MENS LADIES GIRLS & BOYS<br />

Tracksuits Tracksuits Tracksuits<br />

Jackets Jackets Jackets<br />

Pants Pants Pants<br />

Shorts Shorts Shorts<br />

Soccer Shorts Soccer Shorts<br />

Soccer Jerseys Soccer Jerseys<br />

In 1987, during the second phase of our business, we started producing tracksuits<br />

for corporate clients and wholesalers targeting the medium price market. <strong>By</strong><br />

learning from our past experiences, focusing on products that best suited our core<br />

competencies, and proving that cost effectiveness, on-time deliveries and unquestionable<br />

quality were at the heart of being a customer-centric company, Vimal was<br />

able to attract Adidas South Africa as our first flagship client in 1989.<br />

3


Start (20 employees)<br />

‘81 ‘87<br />

Through the process of learning how to work to the exacting standards of Adidas South Africa, Vimal has been<br />

able to gain an invaluable understanding of what it takes to effectively compete in an industry that is critically<br />

affected by the ease in which products can navigate across international boundaries. While price will always be<br />

a key success factor in the garment manufacturing industry, it is not the only issue that buyers are interested in,<br />

and by learning to meet the quality, labour and environmental expectations of a company such as Adidas, we<br />

are in a position to report that our client list proudly includes the likes of Nike, <strong>Puma</strong>, Reebok and TotalSports<br />

(among others).<br />

Adidas<br />

‘94<br />

Nike<br />

MILESTONES<br />

1981 Start with 20 employees (526 at the end of 2007)<br />

1987 Start of supply relationship with Adidas (still the largest customer)<br />

1994 Start of supply relationship with Nike (no contracts in 2007)<br />

1999 Started Niam Embroidery with 12 employees (24 at the end of 2007)<br />

2001 Start of supply relationship with <strong>Puma</strong><br />

2002 Started Functional Sportswear with 50 employees (103 at the end of 2007)<br />

Started Yash Clothing with 34 employees (95 at the end of 2007)<br />

2006 Start of supply relationship with Reebok and TotalSports (Foschini Group)<br />

2007 Move into new premises in Mount Edgecombe (Umhlanga)<br />

Of course, the growth of our client base has also meant a significant growth in the physical size of our business.<br />

Vimal outgrew our first factory in the Phoenix Industrial Park and moved to the Redhill Industrial Park back<br />

in 1996. In 2007, 11 years after our first major move, we were pleased to cut the ribbon on our new factory<br />

situated in the Mount Edgecombe Industrial Park, adjacent to a beautifully appointed golf estate.<br />

Our decision to relocate was predicated by our need to ensure that our employees could be afforded a factory<br />

that is easy to access their homes, that is safe, and that demonstrates that their employment is secure, as<br />

demonstrated by a factory that is superbly appointed and ready to allow for future growth.<br />

In 2002 we noticed an increased demand for soccer jerseys and shorts. This initiated the acquisition of<br />

subsidiary corporations which focused their mainline operation on soccer outfits. <strong>The</strong> knits allowed us to<br />

compliment our woven product range. We are currently producing garments for blue chip corporations such as<br />

Adidas, <strong>Puma</strong>, Nike, Reebok and the Foschini Group (TotalSports).<br />

4<br />

‘99<br />

Embroidery<br />

‘01<br />

<strong>Puma</strong><br />

‘02<br />

Functional Sportswear<br />

Yash Clothing<br />

‘07<br />

526


OWNERSHIP STRUCTURE<br />

Vimal Clothing was originally established a closed partnership.<br />

However, Mr Nayan Kalidas (‘Kali’ to all who know<br />

him) was given the opportunity to buy the full 100% interest<br />

in Vimal Clothing, creating an opportunity to expand the<br />

business into what is now known as Vimal<br />

Clothing Enterprise cc (‘Vimal’), with the Shareholding in<br />

Vimal limited to Kali (70%) and his wife (Naina, 30%).<br />

Under this banner, Vimal now consists of four 100%<br />

wholly owned subsidiaries, including:<br />

• Vimal Apparel, our primary garment<br />

manufacturing entity<br />

• Functional Sportswear<br />

• Yash Clothing<br />

• Niam Embroidery<br />

Apparel production is broken into various categories, whereby Functional Sportswear focuses on specialized<br />

garments, particularly with respect to soccer, Yash Clothing focuses on entry level sporting apparel and Vimal<br />

Clothing produces a full range of all sporting and fashion garments. Niam Embroidery offers a value-adding<br />

service to all of the business lines, including embroidery and sublimation printing services.<br />

With the exception of Yash Clothing, all subsidiaries are located at our Mount Edgecombe facilities in Durban,<br />

South Africa. Yash is located in Umzinto, one of Durban’s other non-metro under-developed areas. When,<br />

Yash was started in 2002 the intention was to create additional jobs for machine operators in an area where<br />

access to transport is less of a concern. Based on the success of the initial model, the employee<br />

population has grown from 50 to just over 100 employees, with the higher skilled activities (e.g., design and<br />

cutting) being retained within our centralised Vimal factory.<br />

5<br />

VIMAL CLOTHING ENTERPRISES CC<br />

MANAGEMENT STRUCTURE AND GOVERNANCE<br />

Vimal Apparel<br />

(305 employees)<br />

Functional Sportswear<br />

(103 employees)<br />

Yash Clothing<br />

(95 employees)<br />

Niam Embroidery (23 employees)<br />

Within Vimal, the overall management structure is limited<br />

to four tiers of control. Ultimately, all decisions are<br />

taken by the owner of the business, but the day-to-day<br />

running of the business resides with the managers and<br />

supervisors.<br />

Communication, particularly between departments and<br />

business units, is perhaps our most important critical<br />

success factor.<br />

Although Vimal is in essence ‘one company’, the four<br />

separate business units (Vimal, Functional, Yash and<br />

Niam) operate as independent entities within the structure.<br />

However, the success of each business unit, as<br />

well as Vimal on the whole, is critically dependent upon<br />

ensuring that the management team from each unit regularly<br />

interacts to ensure smooth and efficient production<br />

flow.


In order to ensure that the same principle of effective communication cascades down throughout the entire<br />

company, employee communication is managed through reporting lines to Floor Supervisors and<br />

Shop Stewards.<br />

Although these are represented as the 4th tier in our management structure, they are as important, if not more<br />

important, than all other tiers, due to our reliance on our production team to ensure that client expectations are<br />

achievable, and that potential challenges are quickly identified and addressed.<br />

Saras<br />

Production Manager<br />

Sandra/Michelle<br />

Sourcing Department<br />

Rita<br />

Bulk Design Production<br />

Vishnu/Vishal<br />

Cutting Room<br />

Priscilla<br />

Embroidery<br />

Sandra/Mala/Angie<br />

Floor Management<br />

Nishel<br />

Soccer Products<br />

Amit<br />

Trims Department<br />

Floor Supervisors<br />

Nayan (Kali) Kalidas<br />

<strong>Managing</strong> <strong>Member</strong><br />

<strong>The</strong> overall management structure of the company is divided in to the following core elements:<br />

Owners: Because Vimal is a privately held family-owned company our ‘Board’ consists of<br />

our two owners and ‘Board Meetings’ often equate to ‘dinner at home’, where Mr.<br />

and Mrs. Kalidas are Vimal Clothing’s decision makers.<br />

Production Manager: Saras plans all aspects of our production, including the time frames required to<br />

complete orders. She also communicates with all of our customers to address production<br />

queries.<br />

Finance: Solitha is responsible for all aspects of our financial management.<br />

Soccer: Nishel is responsible for co-coordinating all of our Soccer and Sublimation orders.<br />

Floor Management: Our Production Managers (Sandra, Mala and Angie) make sure that all production<br />

orders are completed on deadline and that all goods are delivered on time to our<br />

customers.<br />

Payroll/HR: Khemie makes sure that all workers are paid on time and that all of their queries are<br />

answered satisfactorily.<br />

Trims Manager: Amit oversees the Trims Department, including the ordering of all trims to produce<br />

our goods as per client expectations of quality, cost and time.<br />

6<br />

Julie<br />

Design Manager<br />

Shireeta/Caroline<br />

Design Supervisors<br />

Solitha<br />

Financial Manager<br />

Khemie<br />

Payroll/HR Department<br />

Shop Stewards


Shop Stewards: <strong>The</strong> shop stewards relay all worker queries to Management and initiate meetings to<br />

discuss any problems.<br />

Design: Julie is responsible for coordinating our product development.<br />

Our financials are audited by an external service provider, as required by law,<br />

and our company registration documentation is kept up to date during our annual<br />

audit process.<br />

Policies and procedures are typically established by the relevant business unit<br />

or department manager, and are discussed amongst the management team to<br />

ensure that they are consistent with our vision, mission and values.<br />

<strong>The</strong> conduct of our employees is guided by our Code of Conduct, which is<br />

signed by each employee when they join Vimal. This Code addresses employee<br />

rights, misconduct, disciplinary counselling, grievance procedures<br />

and sanctions.<br />

Our environmental performance is monitored and measured according to<br />

our environmental policy which addresses the identification and management<br />

of impacts and emissions, the use of materials and supplies that have<br />

a reduced environmental impact, the reduction of wastes, and increasing<br />

energy efficiency.<br />

Our occupational health and safety policy is applied to ensure that the safety and well-being of employees is<br />

protected across all of our operations. This policy addresses the identification and management of risks and<br />

hazards, the training of all employees, incident and accident reporting procedures, and the management of<br />

injuries on duty.<br />

It is the responsibility of each employee to identify ways in which our environmental and safety performance<br />

can be improved.<br />

Employee engagement occurs via Shop Steward Meetings every Monday morning, with an additional meeting<br />

with concerned employees occurring on Monday afternoons.<br />

Anyone wishing to raise specific concerns about the operation of the business, or specific personal or professional<br />

challenges, are invited to use one of these two mechanisms to raise issues of specific interest or concern<br />

to the company.<br />

In special circumstances, an open door policy is maintained by Kali. Anyone wishing to ‘quietly’ discuss a<br />

specific issue is invited to call upon Kali when required.<br />

7<br />

<strong>The</strong> canteen is<br />

often where issues<br />

of concern or<br />

interest are debated,<br />

discussed and<br />

raised with the<br />

management team.


OUR MOST MATERIAL ISSUES<br />

At Vimal, we define “material” as those issues that can, or in fact do, have a significant impact on our ability to<br />

remain competitive within the markets we operate.<br />

Given the nature, structure and operating environment of our company, we tend to regard production, product<br />

safety and labour issues as our ‘Most Material’, while environmental issues have, until recently, been of limited<br />

concern to us.<br />

Ultimately, we believe that the long-term viability of our business rests on our ability to manage the following<br />

issues, as identified by our management team through their daily interaction with key customers, suppliers<br />

and employees:<br />

Production efficiency,<br />

delivering on-time<br />

Compliance to the<br />

National Bargaining<br />

Council (Clothing<br />

ISSUE PERFORMANCE TARGETS<br />

Industry)<br />

Customer complaints about late deliveries<br />

are rare but performance can still improve.<br />

In 2007 no penalties were levied by any<br />

clients.<br />

Currently working on the installation of a new<br />

IT system to capture production data to im-<br />

prove efficiency.<br />

Vimal is certified as a ‘Compliant <strong>Member</strong>’<br />

of the NBC.<br />

As a certificated member, Vimal has been<br />

able to prove that we<br />

• pay correct normal and overtime wages<br />

• pay appropriate end of year bonuses<br />

• pay for appropriate benefits<br />

• adhere to appropriate guidelines on normal<br />

and overtime hours.<br />

To date, no unresolved concerns or com-<br />

plaints are outstanding with the NBC, and no<br />

complaints have ever led to CCMA arbitra-<br />

tion.<br />

New technology <strong>The</strong> implementation of new technology within<br />

DTI Codes of<br />

Good Practice<br />

Vimal has increased the output per worker,<br />

particularly for specialised tasks such as<br />

pocket affixation.<br />

Quality and sophistication of products has<br />

increased due to the presence of higher<br />

value-add machinery, ultimately leading to<br />

an increase in orders that Vimal otherwise<br />

would not be able to fill.<br />

<strong>The</strong> Department of Trade and Industry (DTI)<br />

Codes of Good Practice are a set of govern-<br />

ment principles in support of Broad Based<br />

Black Economic Empowerment (BBBEE) in<br />

South Africa. <strong>The</strong> Codes come into full effect<br />

at the end of February 2008, and at the time<br />

of writing this Report, we are in the process<br />

of undergoing a review of our status accord-<br />

ing to these Codes.<br />

8<br />

• Complete the integration of IT systems for<br />

automatic order generation with Adidas<br />

• Engage other key clients<br />

(<strong>Puma</strong>, TotalSports) to discuss similar<br />

possibilities.<br />

• Maintain certificated compliance to the<br />

NBC<br />

• Ensure that no employee is treated in<br />

a manner that is inconsistent with the<br />

agreements established by the NBC<br />

• Ensure that all employees work towards<br />

targets leading to the payment of bonuses<br />

• Complete the installation and conversion to<br />

automated cutting machines.<br />

• Complete the installation and development<br />

of skills to operate the new automated cuff,<br />

collar and waistband knitting machines.<br />

• Investigate possibilities to procure an<br />

automated marking system to increase<br />

accuracy and efficiency, and to reduce<br />

material wastage.<br />

• Vimal is committed to completing a full<br />

assessment of our Codes status within<br />

the first half of 2008, and we will discuss<br />

this assessment in our 2008 Sustainability<br />

Report.


Securing adequate<br />

orders to ensure the<br />

long-term financial<br />

ISSUE PERFORMANCE TARGETS<br />

viability of the<br />

company<br />

Vimal is proud of our record of never having<br />

cause to commit employees to ’short time’,<br />

or to retrench employees due to lack of or-<br />

ders.<br />

<strong>The</strong> quantity of 2007 orders was sufficient to<br />

merit the increase in staff complement by 79<br />

employees.<br />

Welfare of our team Vimal is committed to ensuring a policy of<br />

‘zero short shifts’, where all employees are<br />

guaranteed full weekly wages.<br />

Annual performance and zero sick leave<br />

bonuses are paid out to workers in<br />

exchange for their dedication to performance<br />

excellence.<br />

Long service awards are given to employees<br />

who complete 5 years (or more) service.<br />

School fees are payable to employees who<br />

meet specific performance criteria, thus re-<br />

ducing their financial concerns.<br />

All employees are allowed to take the day off<br />

on the first day of the school year, to assist<br />

their children with school enrolment.<br />

Workplace safety Although appropriate safety equipment is<br />

used, 3 employees sustained injuries in the<br />

cutting room.<br />

An Injury on Duty (IOD) Register is main-<br />

tained within the factory, and at our off-site<br />

assembly plant in Umzinto (Yash Clothing).<br />

Supervisors conduct daily inspections to<br />

manage risks, including ensuring that needle<br />

guards are not removed and that work spac-<br />

es are free from obstructions.<br />

Inspections of potential workplace hazards<br />

are conducted on a bi-weekly basis or as/<br />

when necessary.<br />

6 employees are trained by St. John’s Ambu-<br />

lance in First Aid every 3-years.<br />

Fire fighting training has been conducted by<br />

Chubb Fire.<br />

All fire fighting equipment is tested on a<br />

monthly basis.<br />

Evacuation drills are conducted on a<br />

6-monthly basis.<br />

9<br />

• Maintain current clients, and ensure that<br />

growth in new orders does not affect<br />

our ability to meet existing performance<br />

expectations.<br />

• Ensure that increased capacity due to new<br />

and more efficient technology is met by<br />

increased order taking.<br />

• Maintain a zero ‘short shift’ policy within<br />

the company<br />

• Ensure a zero redundancy policy<br />

• Ensure that wages are paid in-full, on time<br />

and, where possible, in the presence of<br />

performance and special gratitude awards<br />

• Implement our ‘Qualifying for 2010’ bonus<br />

scheme for awarding employees who<br />

reduce their sick leave.<br />

• Complete the installation and conversion<br />

to automated cutting machines, which<br />

is expected to reduce our exposure to<br />

cutting injuries.<br />

• Continue to maintain an up-to-date IOD<br />

register, and to discuss to discuss ‘near<br />

misses’ when they are raised.<br />

• Continue to conduct regular workplace<br />

hazard inspections.<br />

• Continue to adhere to fire prevention,<br />

evacuation and fighting programme.<br />

• Avoid all injuries on duty to reach our<br />

target of ‘Zero Harm’


<strong>The</strong>ft and unethical<br />

ISSUE PERFORMANCE TARGETS<br />

behaviour<br />

On-site losses are minimal at Vimal premis-<br />

es. However, losses can occur both in-transit<br />

and in customer warehouses.<br />

On-site monitoring of losses is monitored<br />

by comparing cutting stats with packaged<br />

orders and defaults.<br />

<strong>The</strong> implementation of on-site CCTV cam-<br />

eras has reduced occurrences of theft and/<br />

or over-reporting of work performance.<br />

One incident of personal property theft was<br />

identified and addressed during the course<br />

of the year.<br />

Cost Reduction Vimal continuously strives to reduce operat-<br />

Absenteeism and<br />

Late Arrival<br />

ing costs and overheads.<br />

Our 2007 focus was on the implementation<br />

of new technology to speed up production,<br />

reduce labour costs and reduce wastage.<br />

2007 saw a significant increase in employee<br />

absenteeism and late arrivals, although<br />

much of the tardiness was directly linked to<br />

the new location and has been addressed.<br />

Skill levels Although skill levels are not a concern in the<br />

Solid waste sent for<br />

disposal, including<br />

fabric wastage<br />

Quality of local fabric<br />

suppliers<br />

short-term, the lack of interest in garment<br />

manufacturing among the youth of South Af-<br />

rica is an ongoing concern for the future.<br />

Fabric wastage has been identified as a<br />

cost-first, environmental second, concern.<br />

<strong>The</strong> move to new technology has already be-<br />

gun to demonstrate a decrease in the num-<br />

ber of waste haulage bins being retrieved<br />

from our premises.<br />

<strong>The</strong> move to new technology has increased<br />

the amount of recyclable materials (specifi-<br />

cally plastic) being generated within the fac-<br />

tory.<br />

Although Vimal is committed to procuring<br />

fabric from local suppliers, issues of quality<br />

and on-time delivery continue to be a limit-<br />

ing factor.<br />

10<br />

• Continue to monitor potential losses.<br />

• Continue to remind employees of their<br />

responsibility to avoid theft and unethical<br />

behaviour.<br />

• Complete the installation of data manage-<br />

ment system to control inventories of<br />

fabric and accessories.<br />

• Complete the acquisition and installa-<br />

tion of new machinery to further improve<br />

production efficiencies.<br />

• Complete the implementation of the<br />

‘Qualifying for 2010’ bonus scheme to<br />

reduce absenteeism.<br />

• Need to investigate ways to find new<br />

machine operators, including the possible<br />

need to relocate some of the assembly<br />

activities to more rural areas.<br />

• Continue to implement new technology to<br />

ensure that fabric wastage is reduced.<br />

• Identify ways to sort and recycle solid<br />

wastes.<br />

• Continue to engage with local suppliers to<br />

identify ways in which Vimal can increase<br />

purchases from them, without compromis-<br />

ing on customer quality expectations.


USE OF APPROPRIATE TECHNOLOGY<br />

As a proudly South African company, we are constantly reminded of the need to<br />

balance the challenges of operating within a globally competitive market with the<br />

socio-economic challenges in our community. Poverty, high unemployment and the<br />

presence of less than scrupulous employers all plague the South African industrial<br />

sector, and we are constantly reminded that Vimal is ‘an employer of choice’ rather<br />

than ‘an only option’. As such, we believe that the delicate balance between competitive<br />

pressures toward automation and job creation places Vimal in the unenviable<br />

position of looking for inventive ways to improve efficiencies without compromising on<br />

our commitment to the welfare of our staff.<br />

Over the past 26 years of operation, we have focused mainly on ensuring that<br />

our cutters, machine operators and finishers were all supplied with reliable, safe<br />

and appropriate machines that would allow them to deliver against increasingly<br />

challenging targets.<br />

However, our experience over the past couple of years has indicated that we must<br />

alter our production strategies to rely less on human behaviour and more on the<br />

increased accuracy and efficiency of computers.<br />

Although our design, printing and planning activities have been at least partially automated<br />

for several years, 2007 became our watershed year for the automation of<br />

production activities. Thus far, we have acquired one large automated cutting machine (Lectra VectorFashion-<br />

MH8Cutter) which is expected to reduce cutting time by up to 80%, while improving our ability to make more<br />

efficient use of raw material and reducing cutting errors, thus decreasing the volume of wastages being sent<br />

to landfills.<br />

We have also purchased two automated cuff, collar and waistband knitting machines which will reduce our<br />

concerns over access to reliable sources of knitted cuffs, while allowing us to offer clients more sophisticated<br />

cuff, collar and waistband options. <strong>The</strong>se three machines are expected to be fully operational before the end<br />

of the first quarter of 2008.<br />

CUTTING<br />

Basic Cutting Machines<br />

End Cutter Machines<br />

Lectra VectorFashionMH8Cutter<br />

KNITTING<br />

Mechanical Knitters<br />

Kauo Heng Flat Bed Knitters<br />

EMBROIDERY AND PRINTING<br />

Tajima TMEX – c901 Embroidery Machine<br />

Tajima TFMX – 2c904 Embroidery Machine<br />

Tajima TFHX – 2c1208 Embroidery Machine<br />

Tajima TMFD – 615 Embroidery Machine<br />

Tajima TMFD – 620 Embroidery Machine<br />

Tajima TFGN – 920 Embroidery Machine<br />

Sublimation Machine<br />

Monti Midi Printer Press<br />

Mini Printer Press<br />

Hand held electric cutter/knife<br />

Hand held straight line end cutter/knife<br />

Automated fabric cutting machine<br />

Mechanical knitting machine for collars and cuffs<br />

Computer-aided knitting machine for collars and cuffs<br />

Single head automatic logo embroidery machine<br />

Four head automatic logo embroidery machine<br />

Eight head automatic logo embroidery machine<br />

Fifteen head automatic logo embroidery machine<br />

Twenty head automatic logo embroidery machine<br />

Twenty head automatic logo embroidery machine<br />

Printing machine for creating sublimation heat transfers<br />

Heat transfer press for sublimation prints<br />

Small scale heat transfer press for sublimation prints<br />

11<br />

11<br />

6<br />

1<br />

3<br />

2<br />

1<br />

1<br />

1<br />

1<br />

1<br />

1<br />

1<br />

1<br />

3


ASSEMBLY AND MATERIAL PREP<br />

Flat Machines<br />

Overlock Machines<br />

Double Needle Machine<br />

Multi Needle Machine<br />

Button Hole Machine<br />

Bartack Machine<br />

Coverseam Machine<br />

Semi Automatic Snap Machine<br />

Fusing Machines<br />

Button Sew Machine<br />

Blind Stitch Machine<br />

2 Needle Chain Stitch Machine<br />

AMF Reece Semiautomatic Jet Pocket Machine<br />

Juki Elastic Semiautomatic Tacking Machine<br />

FINISHING<br />

Viet 4413 Vacuum Pressing Machine<br />

Yiulih YP130H Vacuum Pressing Machine<br />

Spot Cleaning Machines<br />

OTHER EQUIPMENT<br />

Air Compressors<br />

Semi Automatic Strap Machine<br />

Crown Stock Pickers<br />

Hyster Forklift<br />

Standard operator sewing machine for normal seams<br />

Standard operator sewing machine for panel joining<br />

Operator sewing machine for specialised assembly<br />

Operator sewing machine for lay-down striping<br />

Operator sewing machine for button hole installation<br />

Operator sewing machine for seam reinforcement<br />

Operator sewing machine for hemming of knitted fabrics<br />

Operator machine for installing press studs and eyelets<br />

Operator machine for fusing vylene to fabric<br />

Operator machine for button installation<br />

Operator sewing machine for specialised hemming<br />

Operator sewing machine for lay-down striping<br />

Operator sewing machine for the installation of pockets and jets<br />

Operator sewing machine for cutting and tacking elastic<br />

Operator clothes ironing machine<br />

Operator clothes ironing machine<br />

Operator machine for removing stains and markings<br />

Air compressors to supply air to machinery<br />

Operator machine for strapping boxes<br />

Mobile operator machines for collecting fabric from stores<br />

Mobile operator machine for moving pallets<br />

12<br />

112<br />

Unfortunately, the move to automated cutting<br />

machines has already created a concern for our<br />

management staff. Of the six cutting room operators<br />

currently within our employ, we predict that<br />

we will only require two cutter operators once the<br />

new technology is in place. Our hope is that we<br />

will be able to relocate the other four staff members,<br />

but are worried that we will need to shed<br />

these staff members due to a lack of equal pay<br />

opportunities. Although this is a concern for Vimal,<br />

we are confident that these individuals have<br />

obtained a high degree of specialised training and<br />

guidance over their period of employment with us,<br />

and it is our assumption that our industry colleagues<br />

and competitors will soon be benefitting<br />

from our loss.<br />

Nonetheless, we are pleased to be in a position<br />

where we can now offer our clients an improved<br />

range of products and services, guaranteeing<br />

even better quality control performance than<br />

we’ve grown to be recognised for.<br />

92<br />

22<br />

15<br />

5<br />

8<br />

12<br />

4<br />

3<br />

1<br />

1<br />

1<br />

2<br />

1<br />

4<br />

17<br />

2<br />

6<br />

4<br />

4<br />

1


At Vimal Clothing Enterprise cc we pride ourselves in our ability to provide brand-conscious companies and<br />

distributors with the services necessary to monetise their goodwill with minimum delay and fuss.<br />

From design and embroidery through to sampling and manufacturing, Vimal is a confident and proven supplier<br />

of all required services. All of our core competencies can be use as part of a suite of services or as a standalone<br />

specialised task. Tailoring our offering to each client’s individual needs allows us to ensure that each job<br />

meets highly restricted specifications. Additionally, the strategic outsourcing of specific tasks to leading professional<br />

affiliates within our controlled network enables us to make a wide range of supplementary services available,<br />

whilst ensuring that we maintain high standards of quality assurance over all aspects of the relationship.<br />

Since 1987, we have been a proud supplier of sporting apparel to Adidas, one of the world’s most recognised<br />

and respected companies. We recognise that as a condition of our ongoing relationship with such a well known<br />

company, we must constantly adhere to strict controls over quality, timeliness of deliveries, as well as environmental<br />

and health and safety concerns.<br />

In the first few years of our supply agreements, Vimal struggled to fully understand and comply to their contractor<br />

compliance requirements. However, we quickly learned that by raising our production standards to meet<br />

their world class expectations, we could become a world class producer of garments: able to supply any global<br />

brand that is seeking an African partner.<br />

Following on from our partnership with Adidas, Vimal has had the pleasure of developing supply relationships<br />

with the following blue chip clients:<br />

• Nike<br />

• <strong>Puma</strong><br />

• Reebok<br />

• TotalSports (Foschini)<br />

• Sedsports<br />

WORLD CLASS PRODUCTS FOR WORLD CLASS CUSTOMERS<br />

As a supplier to the above listed companies, Vimal is subject to regular site inspections. Although we’ve never<br />

considered these visits as a threat to our relationship with our core clients, we have nonetheless found the<br />

inspections stressful due to our ongoing desire to be externally assured as a ‘Good Corporate Citizen’.<br />

PUMA SAFE SCORES:<br />

Weight 2007 2005 2002<br />

Social 50.00% 49.30% 46.42% 48.05%<br />

Environmental 10.00% 8.00% 7.57% 8.15%<br />

Health & Safety 35.00% 29.10% 30.82% 31.92%<br />

Additional 5.00% 4.71% 3.51% 5.00%<br />

100.00% 91.11% 88.32% 93.12%<br />

Classification B B B<br />

Both Adidas and <strong>Puma</strong> have become significant contributors to our ongoing process improvement programme<br />

through their processes of contractor compliance audits.<br />

Results from these audits, including <strong>Puma</strong>’s SAFE audits (above), have been a helpful benchmark of our performance<br />

in Social, Environmental and Safety areas.<br />

13<br />

Vimal was proud to<br />

manufacture the SA<br />

team kit for the 2006<br />

Commonwealth<br />

Games in Australia


Vimal is a proud<br />

supplier of soccer kit<br />

to players and<br />

supporters of the<br />

South African PSL<br />

14<br />

On close inspection of our audit results, we have<br />

found that while we continue to excel in the Social<br />

aspects of <strong>Puma</strong>’s audits, we still have significant<br />

room for improvement in both the Environmental<br />

and Health & Safety areas. <strong>The</strong>se findings are<br />

extremely helpful when comparing our own internal<br />

assumptions and conclusions about our performance<br />

with what we consider to be the ‘reality’<br />

of our progress. Moreover, where we believe we<br />

should be classified as an ‘A’ supplier, we are prepared<br />

to accept that <strong>Puma</strong> rates us as a ‘B’ supplier,<br />

although with a reasonable level of further<br />

improvements to be addressed.<br />

Closer to our hearts, and almost as important<br />

as supporting global brands, Vimal has had the<br />

distinct pleasure of supplying garments to South<br />

African teams representing our country at major<br />

sporting events around the world, including:<br />

• Bafana Bafana replica kit for the 2008<br />

African Nations Cup (Adidas)<br />

• South African team kit for the 2006<br />

Commonwealth Games in Australia<br />

(Sedsports)<br />

• Springbok team kit for the 2003 Rugby<br />

World Cup (Nike)<br />

• South African team kit for the 1996<br />

Olympics in Atlanta (Reebok)<br />

• Replica kit (<strong>Puma</strong>) for the 2008 Nations<br />

Cup teams from Angola, Botswana,<br />

Cameroon, Egypt, Ghana, Ivory Coast,<br />

Morocco, Mozambique, Namibia, Senegal<br />

and Tunisia<br />

Currently, Vimal is producing PSL team and replica<br />

kit for the following sporting sides:<br />

• Bloemfontein Celtic<br />

• Orlando Pirates<br />

• Ajax Cape Town<br />

• Santos (Cape Town)<br />

• Jomo Cosmos<br />

In the 2007 Calendar Year (CY), our primary client was once again Adidas, firmly representing over 70% of all<br />

orders delivered for the year. However, we noted a significant rise in interest and orders from our friends at<br />

TotalSport and Mr. Price, both of which are domestic South African retail chains.


Mr Price<br />

Reebok<br />

TotalSports<br />

<strong>Puma</strong><br />

Adidas<br />

100%<br />

90%<br />

80%<br />

70%<br />

60%<br />

50%<br />

40%<br />

30%<br />

20%<br />

10%<br />

0%<br />

January<br />

February<br />

Over the past three years we’ve noted a significant change in the orders we process and fill for our clients.<br />

While we are maintaining a relatively stable number of deliveries to Adidas, our orders to <strong>Puma</strong> have risen<br />

from less than 1% of our total production to nearly 16%. Meanwhile, we have seen a significant increase in<br />

the quanity of garments that are being produced for our South African clientelle, from less than 2% in 2005 to<br />

over 8% in 2007.<br />

Table 1: Distribution of Units (i.e., garments) to Our Key Clients<br />

2007 2006 2005 3 Years<br />

Adidas 696 599 73.5% 573 341 81.9% 694 656 92.4% 1 964 596 81.9%<br />

<strong>Puma</strong> 149 112 15.7% 55 530 7.9% 5 746 0.8% 210 388 8.8%<br />

Nike 0 0.0% 21 984 3.1% 38 404 5.1% 60 388 2.5%<br />

Mr. Price 53 562 5.7% 0 0.0% 0 0.0% 53 562 2.2%<br />

Reebok 23 178 2.4% 29 365 4.2% 90 0.0% 52 633 2.2%<br />

TotalSport 25 122 2.7% 4 681 0.7% 0 0.0% 29 803 1.2%<br />

Sedgars 0 0.0% 2 413 0.3% 13 195 1.8% 15 608 0.7%<br />

Falstan 0 0.0% 11 579 1.7% 0 0.0% 11 579 0.5%<br />

Ass Ind 0 0.0% 1 042 0.1% 0 0.0% 1 042 0.0%<br />

Total 947 573 100.0% 699 935 100.0% 752 091 100.0% 2 399 599 100.0%<br />

Production efficiency improved over the second half<br />

of the 2007 calendar year because the team has<br />

now settled into our new facilities. <strong>The</strong>re is still a<br />

problem with backlogs in dispatch, mostly because<br />

of absenteeism, particularly in summer, but we are<br />

confident that 2008 will be marked with a measured<br />

improvement reduction in absenteeism.<br />

Thankfully, Vimal has been relatively immune to a<br />

common plague among garment manufacturers:<br />

product returns and order rejections. While we are<br />

aware of a few batches of products that were produced<br />

in a manner that was deemed inconsistent<br />

with client expectations, we have not needed to endure<br />

a situation where our staff allowed these products<br />

to be shipped to clients. As such, we continue<br />

to be proud of our record of ‘zero rejections’, with<br />

only a small handful of returned items.<br />

15<br />

March<br />

April<br />

May<br />

June<br />

July<br />

August<br />

September<br />

October<br />

November<br />

December<br />

CY 2007


THE VIMAL TEAM<br />

At the heart of any organisation are its people, and the people within Vimal are definitely the engine that keeps<br />

our lifeblood pumping. Vimal does not permit any form of discrimination against employees. We do not tolerate<br />

racism, sexual harassment, or the discrimination of persons with any form of disability. Our remuneration<br />

packages, including salary, bonuses and incentives, are above average for our industry, and we are registered<br />

with industrial councils and all other statutory bodies.<br />

Our team consists of a variety of trained, experienced individuals, and while the clothing manufacturing industry<br />

is an industry without high academic requirements, we continue to set high experience standards. Our experts<br />

work harmoniously to unlock value in inventive ways that assure that our customers receive a perfect garment<br />

on-time, every time. Our team is organised into core operational and administrative areas, where hierarchy is<br />

maintained at a limited level, and where access to all members of the management staff is guarded as a right<br />

rather than a privilege. Each employee, regardless of whether they are a cutter, designer, assembly machinist<br />

or finisher, has the expressed right to take advantage of Kali’s open door policy. Should an issue arise, whether<br />

it is a concern or improvement opportunity, each employee is encouraged to raise the issue with the management<br />

team member they feel most comfortable with.<br />

Vimal Group Vimal Functional Niam Yash Admin<br />

Total 526 287 54.7% 95 18.1% 23 4.4% 102 19.4% 18 3.4%<br />

White 0 0% 0 0% 0 0% 0 0% 0 0% 0 0%<br />

Black 129 24.6% 62 21.6% 39 41.1% 7 30.4% 19 18.6% 2 11.1%<br />

Indian 396 75.4% 225 78.4% 56 58.9% 16 69.6% 83 81.4% 16 88.9%<br />

Male 44 8.4% 32 11.1% 0 0% 1 4.3% 8 7.8% 3 16.7%<br />

White 0 0% 0 0.0% 0 0% 0 0% 0 0% 0 0%<br />

Black 12 2.3% 11 3.8% 0 0% 0 0% 0 0% 1 5.6%<br />

Indian 32 6.1% 21 7.3% 0 0% 1 4.3% 8 7.8% 2 11.1%<br />

Female 482 91.6% 256 88.9% 95 100% 22 95.7% 94 92.2% 15 83.3%<br />

White 0 0% 0 0% 0 0% 0 0% 0 0% 0 0%<br />

Black 117 22.3% 51 17.8% 39 41.1% 7 30.4% 19 18.6% 1 5.6%<br />

Indian 365 69.3% 205 71.1% 56 58.9% 15 65.2% 75 73.5% 14 77.8%<br />

In many respects, Vimal is somewhat immune to the challenges most companies face in complying to South<br />

African Black Economic Empowerment legislation. Based in the Durban area, where the overwhelming majority<br />

of the population is either Black or Indian, the Vimal team has always been predominantly Indian with some<br />

representation from the Black community. At present, 75.4% of our total employee complement is Indian, while<br />

the remaining 24.6% is Black. In our experience, women are more reliable, more committed, and more likely<br />

to remain within our employ for longer periods than their male counterparts. As such, and as one might expect<br />

from a garment manufacturing plant, where sewing machines and clothes irons dominate our factory floor,<br />

nearly 92% of our 526 employees are female.<br />

Vimal Group Vimal Functional Niam Yash Admin<br />

17-19 11 2.09% 4 1.4% 0 0.0% 2 8.7% 5 4.9% 0 0.0%<br />

20-29 79 15.02% 34 11.8% 7 7.4% 6 26.1% 28 27.5% 4 22.2%<br />

30-39 202 38.40% 101 34.8% 40 42.1% 9 39.1% 43 42.2% 9 50.0%<br />

40-49 184 34.98% 111 38.3% 40 42.1% 5 21.7% 25 24.5% 3 16.7%<br />

50-59 48 9.13% 37 12.9% 8 8.4% 1 4.3% 1 1.0% 1 5.6%<br />

>60 3 0.57% 2 0.7% 0 0.0% 0 0.0% 0 0.0% 1 5.6%<br />

TOTAL 526 288 95 23 102 18<br />

Min 17 18 23 19 17 26<br />

Max 63 61 53 50 50 63<br />

Average 38 40 39 33 33 37<br />

16


Unfortunately, we have been subject to another industry trend: the failure to attract younger employees to our<br />

production team.<br />

With an age distribution favouring employees between the age of 30 and 49, the total number of employees<br />

who are younger than 30 is roughly 17% of our workforce. While we don’t believe that this is a particular risk at<br />

this time, it nonetheless reminds us of an ongoing need to consider alternative strategies to attract and retain<br />

employees, particularly in the younger age brackets. We believe that the promotion of our policy of freedom to<br />

communicate is at the core of our ability to attract and retain critical staff members.<br />

2007 2006 2005 2004 2003<br />

New Recruits 229 94 146 83 132<br />

Failed Probation Period 28 11 42 12 24<br />

Net New Recruits 201 83 104 71 108<br />

Terminations<br />

Deceased 1 0.0% 0 0.0% 0 0.0% 1 2.9% 2 5.4%<br />

Discharged 4 3.3% 3 4.9% 3 3.9% 0 0.0% 0 0.0%<br />

Early Retirement 1 1.1% 0 0.0% 0 0.0% 0 0.0% 0 0.0%<br />

End Of Contract 13 10.9% 3 4.9% 33 42.9% 4 11.4% 3 8.1%<br />

Ill Health 6 5.4% 5 8.2% 5 6.5% 1 2.9% 1 2.7%<br />

Left Without Reason 17 15.2% 3 4.9% 4 5.2% 5 14.3% 7 18.9%<br />

Maternity 8 6.5% 13 21.3% 6 7.8% 9 25.7% 7 18.9%<br />

Normal Retirement 2 2.2% 0 0.0% 0 0.0% 0 0.0% 1 2.7%<br />

Resignation 63 47.8% 33 54.1% 20 26.0% 13 37.1% 16 43.2%<br />

Retrenchment 4 4.3% 0 0.0% 6 7.8% 0 0.0% 0 0.0%<br />

Voluntary Retrenchment 3 3.3% 1 1.6% 0 0.0% 2 5.7% 0 0.0%<br />

Total Terminations 122 23.2% 61 13.6% 77 18.1% 35 8.8% 37 10.2%<br />

Net Turnover 79 15.0% 22 4.9% 27 6.4% 36 9.0% 71 19.6%<br />

Employees at Year End 526 447 425 398 362<br />

Accumulated Growth 55.0% 39.9% 35.0% 28.7% 19.6%<br />

In the past 5 years, our employee turnover rate has remained in positive figures, thus leading to the growth<br />

of our total employee pool. However, we continue to struggle with the number of terminations we must deal<br />

with.<br />

In 2007, we had a termination rate of 23.2%, with resignations representing 47.8% of our total number of employee<br />

losses. While this is due in large part to our move to new premises in an area that was not convenient<br />

for some employees, we are nonetheless concerned by the overall trend towards an increase in employee<br />

terminations.<br />

Thankfully, our need to discharge employees for poor<br />

performance or behaviour that is inconsistent with our<br />

core values has been limited. In the past five years<br />

we’ve only been forced to terminate the employment<br />

of 10 workers for unsatisfactory behaviour, with four<br />

of these terminations occurring in 2007.<br />

In our 26 year history, only one termination case has<br />

been taken to the National Bargaining Council (Textiles)<br />

for arbitration. Although the termination was<br />

ruled to be merited by Vimal, we nonetheless found<br />

the process useful in confirming that our compensation<br />

procedures adhere to NBC expectations.<br />

17<br />

Having worked with<br />

Kali at another<br />

Fabric company<br />

prior to the<br />

development of<br />

Vimal, Ramesh left<br />

his job and, having<br />

faith in Kali, became<br />

one of our first<br />

employees.


Since 1988, Vimal has recognised those employees who have offered us a commitment to long service through<br />

the awarding of milestone rewards. In the 20 years of offering these awards:<br />

• 307 employees have received a clock for 5 years of service<br />

• 68 have received a microwave for 10 years<br />

• 17 have received a freezer for 15 years<br />

• 9 have received a television for 20 years, and<br />

• 3 have received a home theatre system for 25 years of service<br />

‘88 ‘89 ‘90 ‘91 ‘92 ‘93 ‘94 ‘95 ‘96 ‘97 ‘98 ‘99 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07<br />

5 Year Clocks 23 1 3 8 6 5 2 1 2 2 4 13 11 29 8 32 27 54 76<br />

10 Year Microwaves 3 2 5 3 4 1 4 2 1 3 11 7 22<br />

15 Year Freezers 2 2 4 2 1 1 2 1 1 1<br />

20 Year Televisions 1 2 2 1 2 1<br />

25 Year Home <strong>The</strong>atre Systems 2 1<br />

We attribute the high number of long service awards to our continued commitment to ensuring that our employees<br />

are appreciated, respected and rewarded in ways that far exceed standards of NBC compliance. Some of<br />

the additional benefits our employees receive include:<br />

• Annual payment of school fees to employees who meet specific performance requirements<br />

• Payment of 6–monthly bonuses to employees who meet production and absenteeism targets<br />

• Permission to be absent on the first day of the school year to grant parents the opportunity to assist their<br />

children in enrolling in their new grade<br />

• Additional holiday days granted to observe recognised cultural holidays, such as Diwali, that is not a<br />

recognised public holiday in South Africa<br />

2007 2006 2005<br />

Cost Pupils Cost Pupils Cost Pupils<br />

Vimal 40 535.00 78 74 325.00 166 62 226.64 147<br />

Functional 8 845.00 18 23 685.00 53 18 905.00 45<br />

Niam 15 670.00 31 15 185.00 34 500.00 1<br />

Yash 2 200.00 5 400.00 1 11 940.00 34<br />

TOTAL R 67 250.00 132 R 113 595.00 254 R 93 571.64 227<br />

In 2007 we experienced a sharp decline in the number of school fee payments that were awarded to employees:<br />

from 254 in 2006 to 132 this year. We attribute a significant portion of this decline to two key issues: our<br />

ongoing battle to limit absenteeism, and the high level of employee terminations due, at least in part, to our<br />

move to new premises.<br />

In order to qualify for the school fees bonus, employees must limit the number of days they are absent from<br />

work: a measurement that has become stricter over the past three years. In 2005, employees could receive<br />

the bonus as long as they were not absent more than 20 days.. This was reduced to 12 in 2007 (an average<br />

of 1 per month).<br />

18


52 Years of Combined Service<br />

Fatima (top) and Marlene are excellent examples of how mutual respect can translate into a lifetime of shared experiences.<br />

Both ladies joined Vimal when the company was merely a fledgling start-up, back in 1981, and both are still<br />

providing leadership within our production team. Although both ladies suffered from injuries and illnesses that kept<br />

them away from work for a good portion of this past year, both are committed to returning to full active duty within the<br />

early days of 2008.<br />

When asked why they have chosen to continue working at Vimal, their answers were unwavering in their support of<br />

Vimal as a company, and Kali as an manager to work for.<br />

F: In 26 years, I can’t recall a period when we were ever short-shifted (i.e., not given 40<br />

hours of work in a week). In fact we are most often given opportunities to work overtime.<br />

F: We’ve never been robbed of wages (never underpaid) and have always been paid on<br />

time.<br />

F: Other companies have problems paying the full amount of their wages, but Vimal has<br />

always paid us what we were owed, plus bonuses.<br />

F: Bonuses are paid twice: one before Christmas and the other in the New Year, 1 week<br />

before we return to work. Rather than one bonus, the money is split into two portions<br />

so that we won’t spend it all before we get back to work.<br />

F: <strong>The</strong>se are the most important things for those of us in production because we need the<br />

money.<br />

F: I never worked before coming to Vimal, but a lot of my friends who work in other clothing<br />

factories tell me that I am lucky to be here.<br />

F: We worked as a family, and Kali always treated us as part of his family.<br />

M: We learned a lot from Kali. We knew nothing when we came here and he taught us<br />

everything.<br />

M: In 26 years, we never had any major arguments. We always worked as a team, with<br />

unity.<br />

M: Under the union, we always receive NBC rates whereas other companies don’t employ<br />

union members and don’t pay NBC rates. <strong>The</strong>y also sometimes only let the people<br />

work 2 or 3 days per week. We always got a full week’s work.<br />

M: <strong>The</strong> whole factory gets time off for celebrations such as Diwali, regardless of whether<br />

you are Christian, Muslim, Hindu, or not religious.<br />

M: We receive attendance bonuses and long-service awards. No other companies give<br />

long-service awards like in Vimal.<br />

M: <strong>The</strong> school fees for the last 2 of my 5 children were paid by Vimal. This is a new benefit<br />

that was started about 5 years ago, and this is something that no other boss will do.<br />

M: We are very happy working here because we grew up working with Kali, and he always<br />

treated us like part of his family.<br />

19<br />

Fatima<br />

Marlene


What our employees have told us<br />

In the process of developing this Sustainability Report, our consultant randomly engaged<br />

members of our production team during their lunch break. <strong>The</strong> following is a summary of the<br />

comments and criticism they shared with us:<br />

Vimal is a good company.<br />

It is good because you can always be guaranteed that your wages (weekly).<br />

We get lots of overtime, including many opportunities to work a half day on Saturday.<br />

We should be so lucky that we are never short-shifted and are offered overtime<br />

and bonuses.<br />

We have First Aid on site and although we don’t have a lot of injuries, if an injury occurs, we<br />

get treated right away.<br />

<strong>The</strong>re’s nothing bad about working here, that’s why I’ve lasted 12 years.<br />

<strong>The</strong> management doesn’t come in and look over us, we have supervisors that ensure that the<br />

work gets done.<br />

<strong>The</strong>re are lots of rules that we have to obey, like not being able to use the phone except on<br />

breaks, and only being able to smoke on breaks.<br />

You’re not allowed to go outside unless you’re a smoker.<br />

Vimal is a safe place to work.<br />

<strong>The</strong> air conditioning is either too hot or too cold, but never right. In some places its very<br />

cold.<br />

<strong>The</strong> money is good. We get our wages on time and we’re never paid less than we’re owed.<br />

We never get short time...always get a full week’s work.<br />

We want a canteen where we can buy lunch. If we forget lunch there’s nothing we can buy<br />

at the factory.<br />

Boss pays our children’s school fees…if you come regularly to work (not if you are often sick<br />

or absent for any reason), and if you are productive.<br />

Sick time is a problem. If you stay away more than 3 days sick, you don’t get your R1000<br />

bonus…but this should be if we don’t stay away the 15 days the union allows.<br />

After 3 warnings there is no bonus.<br />

We are a branded company…we make high quality products…we should be paid more because<br />

we make quality name brand garments.<br />

My neighbour works for another clothing manufacturing company (CMT, which is not unionised)<br />

and she gets R350 per week, where the NBC wages are at least R560 per week.<br />

When I was injured and getting better, I worked for a CMT company and I had to work to 9 or<br />

10 at night (from 7am), and would only get paid R400 per week, including overtime pay.<br />

Vimal pays you much more, for less hours, in a safe and friendly factory.<br />

Here our boss buys us food if we have to work late.<br />

Kali is a nice boss who doesn’t rob us.<br />

20


7%<br />

6%<br />

5%<br />

4%<br />

3%<br />

2%<br />

1%<br />

0%<br />

Industry Average<br />

Absentee Rate<br />

Target<br />

January<br />

February<br />

March<br />

April<br />

May<br />

June<br />

July<br />

August<br />

September<br />

October<br />

November<br />

December<br />

RESEARCH, MARKETING AND PROCUREMENT<br />

As a relatively small manufacturing company, with limited access to professional<br />

research and market analysis, we continue to remain in touch with changing<br />

trends, designs and fabrics by making periodic overseas visits to assess and<br />

alter the future of our products and services.<br />

Granted, we have limited direct control over changing consumer trends due to<br />

our lack of a ‘marketing department’, but we are confident in our reliance on our<br />

clients, and the brand- conscious environment in which they operate, to act as<br />

a mechanism for marketing our products. Where deemed necessary, we are<br />

pleased to assist our customers with brand-specific marketing activities when<br />

called upon.<br />

Our artists and designers utilise the Wilcom Embroidery system and Freehand<br />

CAD for producing finished artwork and Embroideries that can be used to market<br />

specific teams, competitions and events.<br />

Our marketing is primarily restricted to proving that our services are accurate,<br />

timely and delivered according to costing budgets. While our consistent ability<br />

to deliver according to client expectations is our tried and tested method of proving<br />

ourselves to be a supplier worth choosing, the management of costs is an<br />

ongoing management challenge.<br />

A Lectra system is used in the sample rooms for pattern making, grading, ratings and marker making, resulting<br />

in the accuracy of costing and sourcing of fabric, thus reducing our costs and ensuring that we can continue to<br />

meet client price expectations.<br />

To further our cost-conscious approach to manufacturing garments, we have repeatedly identified and tested<br />

local suppliers of fabric, but have been consistently disappointed with the quality, consistency and/or timeliness<br />

of supplies. Moreover, we are constantly aware of the fact that we do not have access to local suppliers of most<br />

of our manufacturing equipment. As such, the bulk of our annual procurement budgets are directed to foreign<br />

suppliers of fabric and equipment. However, we will always choose a local supplier if they are able to meet our<br />

client-linked quality and pricing requirements.<br />

Thankfully, the majority of our accessories (e.g., print materials and supplies, thread, zippers, etc.) and servicing<br />

contracts are procured from local suppliers.<br />

21<br />

In 2007, Vimal once again failed to reach our average<br />

target of 2.6% absenteeism. Granted, our average<br />

rate of 3.2% was far less than the industry’s average<br />

of 6.0%, but we believe that we can still improve to<br />

below 2.0%.<br />

As such, 2008 will herald the introduction of our new<br />

bonus scheme to reduce non-illness related absenteeism.<br />

Our plan, called ‘Qualifying for 2010’ will offer a<br />

maximum annual bonus of 2,010 Rands to any employee<br />

who maintains a perfect attendance record.<br />

We hope that this new programme, which sees the<br />

potential for employees to receive an increase in<br />

their annual bonus payments of R810, will have<br />

a significant impact in our ability to ensure that<br />

our production schedules are not hindered by<br />

unnecessary absenteeism


6<br />

5<br />

4<br />

3<br />

2<br />

1<br />

0<br />

2003<br />

2004<br />

Injuries on Duty<br />

2005<br />

2006<br />

1. HIV/AIDS<br />

2. Knife cuts<br />

OCCUPATIONAL HEALTH & SAFETY<br />

2007<br />

Cuts<br />

Sprains<br />

Needle Injuries<br />

Burns<br />

While the management and staff at Vimal consider<br />

the company to be a ‘safe’ place in which<br />

to work, we are nevertheless mindful of the risks<br />

and hazards that continue to arise on an almost<br />

daily basis. As such, we have developed and<br />

implemented an Occupational Health and Safety<br />

Policy that sets out our ongoing commitment to<br />

‘Zero Harm’.<br />

For Vimal, ‘Zero Harm’ refers to the creation and<br />

maintenance of a work environment that is free<br />

from the potential for illness or injury for our employees,<br />

our clients, and our neighbours within the<br />

Mt. Edgecombe community. In our most recent<br />

review Hazard Identification and Risk Assessment<br />

(HIRA), we identified the following potential<br />

risks and hazards:<br />

HIV/AIDS is a massive problem for all of Africa, particularly for those of us living and working in<br />

Sub-Saharan regions.<br />

<strong>The</strong> HIV/AIDS pandemic will remain a sustainability risk factor to be closely monitored and managed<br />

for many years to come, and Vimal is committed to ensuring that our workforce is perpetually<br />

aware of their role in protecting themselves, and their family members, from the disease.<br />

To date, we are only aware of three employees who have been infected by HIV/AIDS, including<br />

one employee who is still on our team, and to the best of our knowledge there have only been two<br />

HIV/AIDS related deaths among our staff.<br />

However, the relevant demographics suggest that Vimal remains vulnerable to the disease, and<br />

therefore must remain committed to addressing the risk.<br />

Vimal is especially susceptible to HIV/AIDS related risk factors when considering the fact that<br />

our employees come from a region of South Africa that is known to have one of the highest HIVinfection<br />

rates.<br />

In mitigation of our direct risk, Vimal has instituted an HIV/AIDS programme which comprises of<br />

the following elements:<br />

• Policy guidelines with regard to recruitment, promotion and management of illness in the<br />

workplace, including explicit mention of non-discrimination within our Code of Conduct;<br />

• Access to education and voluntary testing campaigns;<br />

• Continuous inclusion of awareness campaigns about HIV/AIDS in weekly staff meetings;<br />

• Access to poster campaigns in bathrooms and common areas; and,<br />

• Availability of free condoms in our restrooms.<br />

Although we insist on the use of appropriate Personal Protective Equipment (PPE) by all of our<br />

cutting room staff, injuries still continue to occur.<br />

<strong>The</strong> use of wire mesh gloves has significantly reduced the number of cuts, yet 3 new incidents<br />

occurred in 2007.<br />

Our hope that these injuries will be eliminated in 2008 with our switch to automated<br />

cutting machines.<br />

22


3. Needle pricks <strong>The</strong> greatest risk when operating a sewing machine continues to be the<br />

potential to penetrate one’s finger with the needle.<br />

In the past 5 years Vimal has only faced two such incidents, with no<br />

injuries have been sustained in 2007. We attribute this to our use of<br />

needle guards on all of our machines, our concerted effort to educate<br />

our staff about the danger, and the role our supervisors play in ensuring<br />

that guards are not removed.<br />

4. Burns Heated irons, used for pressing garments during our finishing processes,<br />

has always been an obvious risk area, resulting in one burn<br />

incident in 2007.<br />

This incident was devastating to our team, as all of our staff members<br />

were proud of our five-year zero burn performance record leading up to<br />

this incident. Although an unpleasant incident, it nonetheless reminded<br />

us of constant need to be mindful of the risk of iron burns.<br />

5. Falls from heights Although most of our employees are never placed at risk of a fall from<br />

an unsafe height, we do operate motorized stock pickers that raise<br />

warehouse staff to dangerous elevations. To mitigate the risk of falls,<br />

our stock picker operators have undergone task-specific safety training,<br />

and are required to wear safety harnesses at all times.<br />

6. Inhalation of<br />

harmful dust and<br />

fumes<br />

7. Sprains<br />

8. Inhalation of<br />

second-hand<br />

smoke<br />

No such incidents have been recorded at Vimal, yet we continue to<br />

monitor employee behaviour to limit the risk of falls.<br />

Vimal uses low harm and environmentally friendly chemicals wherever<br />

possible in the various areas of operation in our business.<br />

Although no cases of fume-related illness have thus far been reported<br />

at Vimal, we are mindful of the potential to cause harm where solvents,<br />

dyes and glues might be used.<br />

As such, we have designed our new manufacturing facility with specific<br />

attention having been paid to the provision of adequate ventilation and<br />

air quality management.<br />

Where task-specific higher risks persist, we ensure that face masks<br />

and other PPE is used by all employees operating in the risk area.<br />

<strong>The</strong> lifting of heavy bundles of fabric, the repetitive nature of specific<br />

tasks, and the need of some employees to move about areas that could<br />

become cluttered creates a multi-faceted risk of sprain injuries. 2007<br />

saw once such incident occurring, but occurred during non-standard<br />

operational activities: during the move to our new premises.<br />

Supervisors are tasked with ensuring that employees are not operating<br />

in an unsafe or unhealthy manner, but we accept that the nature of this<br />

risk is more difficult to monitor.<br />

As such, we rely on our weekly staff meetings to remind employees of<br />

their responsibility to avoid behaviour that could place them in danger of a<br />

sprain, as well as to ensure that their work environment remains clean and<br />

obstacle-free.<br />

Another addition to our working practices that began with the move to our new premises was the<br />

installation of an Employee Complaints and Suggestions Box.<br />

Although we have yet to see this tool used to its full potential, one of our staff members did use this<br />

mechanism to raise the issue of smoking in common areas as a concern.<br />

Irrespective of management’s personal bias against smoking, a policy was developed and implemented<br />

to ensure that the rights, freedoms and health of all employees, smokers and non-smokers<br />

alike, is not hindered. From January 2007, employees are not allowed to smoke anywhere within<br />

the building, but must rather exit the building and restrict themselves to a designated smoking area<br />

adjacent to the parking lot.<br />

23<br />

Having cut his hand<br />

with a mechanised<br />

knife, Ramesh now<br />

understands the<br />

need to ‘think safe –<br />

act safe’.<br />

<strong>The</strong> height of fabric<br />

stock shelves can<br />

exceed 6 metres<br />

and poses a<br />

significant risk to<br />

anyone operating in<br />

an unsafe manner.


Vimal’s parking lot<br />

could have become<br />

a risk-laden<br />

madhouse if not for<br />

the decision to enter<br />

into contractual<br />

agreements with<br />

transport service<br />

providers.<br />

9. Collisions with<br />

moving vehicles<br />

Each year thousands of pedestrians are killed in unnecessary road accidents in South Africa. Failure<br />

to observe basic traffic rules is a common problem, not just on the roads, but also in factories<br />

such as ours, where moving vehicles are employed to complete specified tasks.<br />

At Vimal, we employ three motorized vehicles and have clearly marked designated travel spaces<br />

to avoid collisions between personnel and vehicles within the factory.<br />

Safe operation of all internal vehicles is controlled though safety-specific training for all operators,<br />

the use of strobe lights and motion sirens to alert other employees of oncoming vehicles, and the<br />

application and supervision of rules to restrict access to areas commonly traversed by our forklift<br />

and stock picking machines.<br />

Another additional risk area was identified when considering the need for taxis to drop-off and<br />

collect employees on a daily basis.<br />

Too many taxis entering a relatively confined space, all operated by individuals interested in quickly<br />

moving to other routes, creates a potential hazard for employees who rely on taxis to get to and<br />

from work, as well as for non-Vimal pedestrians who share the space around our factory.<br />

To manage the risk of taxi-related injuries, for Vimal and residents of Mt. Edgecombe, Kali designed<br />

an over-sized parking lot, with an adequate number of parking bays to accommodate the<br />

number of taxis required to drop-off and collect staff members.<br />

Kali also entered into service level agreements with taxi operators that include clauses restricting<br />

taxi drivers to dropping off and collecting employees from the parking lot. <strong>By</strong> ensuring that taxis<br />

only stop when on Vimal’s property, we are confident that the risk of pedestrian-taxi collisions is<br />

reduced to the limit of our abilities.<br />

24


ENVIRONMENTAL MANAGEMENT<br />

In terms of South African monitoring and evaluation norms, Vimal’s potential for negative environmental impact<br />

is considered ‘moderate’, even according to the ratings applied by the Socially Responsible Investment (SRI)<br />

Index at the Johannesburg Stock Exchange (JSE Limited). As such, while we are of the belief that our impact<br />

on the environment is limited, we nonetheless need to be perpetually mindful of the fact that we have a responsibility<br />

to monitor and manage our environmental impacts, wherever possible.<br />

Through our participation in the contractor audits performed by many of our clients, including Adidas and <strong>Puma</strong>,<br />

as well as through the process of developing this report, we have consistently increased our level of environmental<br />

monitoring over a number of issues.<br />

1. Electricity<br />

2. Water<br />

As of late, the South African economy has become critically aware of our need to become more<br />

efficient consumers of electricity. Total capacity, as supplied by the national electricity provider<br />

(Eskom), has failed to keep pace with demand, and consumers at all levels of the economy are<br />

now subject to periods of ‘load shedding’ (i.e., rolling black-outs).<br />

On one hand, we believe that this situation will benefit society, and the physical environment, by<br />

forcing each of us to find ways to reduce our electricity consumption (e.g., use of more efficient<br />

light bulbs, conversion to solar water heaters, etc.). But on the other hand, those of us operating<br />

businesses that rely on electricity to operate are being forced to consider alternative strategies<br />

to protect our interests in the event of an electricity supply crisis. <strong>The</strong> process of developing this<br />

Report has come at a convenient time for Vimal, as we have now learned the value of evaluating<br />

our electricity bills to determine if we are managing our electricity consumption in a manner that is<br />

both cost-effective and environmentally sound.<br />

Granted, our understanding of the need to monitor our electricity consumption, as well as our<br />

understanding of how we might do so, was limited prior to the development of this Report. Nonetheless,<br />

we have used our monthly municipal rates and taxes bills to calculate our total electricity<br />

consumption, and to evaluate our average electricity consumption per unit of production.<br />

Electricity<br />

Consumed (kWh)<br />

Units of<br />

Production<br />

kWh per unit of<br />

production<br />

In analysing this data, we have been able to learn that our average electricity consumption per<br />

unit of production has increased more than 13% per annum over the past two years. Although we<br />

are uncertain of the reasons for this increase, we are committed to attempting to monitor this trend<br />

more closely and to attempt to rectify the problem. We will re-visit this issue in next year’s report,<br />

and will hope that more positive results can be presented.<br />

South Africa is widely considered to be a ‘Water Scarce Economy’, in that access to reliable supplies<br />

of potable water is not a given. As such, our water consumption, although relatively limited,<br />

is considered to be an ongoing management concern at Vimal.<br />

As in the case of electricity (above), our understanding of the need to monitor our water consumption,<br />

as well as our understanding of how we might do so, was limited prior to the development of<br />

this Report. Nonetheless, we have used our monthly municipal rates and taxes bills to calculate<br />

our total water consumption, and have evaluated this information relative to our total monthly<br />

production figures. Of course, our production is not water-dependent, and therefore trends and<br />

anomalies cannot necessarily be correlated to fluctuations in our production efficiencies, but we<br />

feel that units of production is the most effective tool that we can use to assess our water consumption<br />

efficiency.<br />

%<br />

Increase<br />

2007 1 553 548 947 573 1.64 13.1%<br />

2006 1 014 973 699 935 1.45 13.8%<br />

2005 958 416 752 091 1.27<br />

Water<br />

Consumed (litres)<br />

Units of<br />

Production<br />

25<br />

Litre per unit of<br />

production<br />

%<br />

Increase<br />

2007 175 543 947 573 1.85 14.9%<br />

2006 112 820 699 935 1.61 (1.1%)<br />

2005 122 590 752 091 1.63


3. Non-hazard-<br />

ous waste<br />

3. Hazardous<br />

waste<br />

5. Recycling<br />

5. Greenhouse<br />

gases<br />

<strong>The</strong> 14.9% increase in water consumption in 2007 is assumed to be directly related to our move<br />

to new premises, including the installed improvements in access to on-site produced coffee and<br />

tea, and the installation of better ablution facilities. However, it is our intention, now that we have<br />

become aware of this issue, to monitor our average volume of water consumed per unit of production,<br />

and to rectify any water wastage problems if and when they are identified.<br />

Over the past few years we have noticed a significant increase in the amount of garbage that has<br />

been disposed of in landfills. However, we attribute this informally observed increase in waste<br />

disposal as a direct result of our significant increase in total garment production.<br />

To-date, we do not have formal systems or processes in place to monitor and measure the volume<br />

(by weight) of solid waste sent to landfills via our waste haulage contractors. However, we are<br />

committed to measure and monitor this figure throughout 2008, and to identify ways in which we<br />

might be able to reduce our impact on landfill over-crowding.<br />

As of now, we are already instituting the following mechanisms for reducing our solid waste disposal:<br />

• Increasing the pace of our conversion from manual cutting to computer aided design and<br />

cutting procedures to maximise fabric usage;<br />

• Collecting reasonably large pieces of scrap materials and distributing them to rural economic<br />

development projects that can make use of the fabric to manufacture clothing and<br />

other items; and,<br />

• Collecting and recycling our scrap paper (specifically from patterns and office use) and<br />

plastics.<br />

Although limited in total volumes consumed and/or disposed of, hazardous materials are often<br />

used in our manufacturing facilities, particularly in the maintenance and operation of our facilities<br />

and equipment.<br />

To-date, we do not have formal systems or processes in place to monitor and measure the volume<br />

of hazardous materials consumed throughout our operations,. However, we are committed to<br />

measure and monitor this figure throughout 2008, and to identify ways in which we might be able<br />

to reduce our overall discharge/disposal of these materials.<br />

<strong>The</strong> principles of ‘Renew, Re-Use and Recycle’ are at the core of all small and medium-sized businesses<br />

throughout South Africa. <strong>The</strong> issue is not so much an environmental one, although the<br />

environmental benefits are clear and potentially significant, but rather one of financial prudence.<br />

<strong>By</strong> sticking to ‘the 3 R’s’, we stand as much to gain environmentally as we do financially, through<br />

cost savings and improvements to our overall profitability. As such, Vimal has always attempted to<br />

find ways to reduce our waste haulage through redirecting materials to alternative uses.<br />

That having been said, the process of developing this report has helped us identify new opportunities<br />

for both re-using and recycling materials. Our processes now include:<br />

• <strong>The</strong> donation of unusable end-cuts and/or out of fashion fabrics to local and/or rural economic<br />

development programmes that include sewing projects.<br />

• <strong>The</strong> separate collection of paper and plastics to be collected by local recycling service<br />

providers; and,<br />

• <strong>The</strong> collection of larger pieces of material and donating them for use in local and/or rural<br />

economic development programmes that include sewing projects.<br />

As the monitoring and management of our environmental impacts has become much more rigorous<br />

with the initiation of our sustainability reporting process, we have had to establish reasonable<br />

limits to both the development of new data management systems and improvement processes.<br />

Although we are aware of the issue of global warming, as well as the ways in which each company<br />

can monitor and manage their contribution to greenhouse gas build-up in the atmosphere, we are<br />

not yet in a position to report on our emissions, nor processes to improve our performance.<br />

It is our intention to review our greenhouse gas emissions as part of our 2008 reporting process.<br />

26


SOCIAL RESPONSIBILITY AND COMMUNITY INVESTMENTS<br />

It has been said that “Charity begins at home,” and we believe that in the context of Vimal, our ‘home’ is in fact<br />

our family of managers, supervisors and production staff. As such, we have prioritised our commitment to the<br />

communities in which we operate in terms of:<br />

1. Our employees and their families;<br />

2. Our local communities directly surrounding our operations, and the communities in which our<br />

employees live;<br />

3. Our province, particularly the more rural areas where issues of AIDS, poverty and hunger continue to<br />

threaten lives; and,<br />

4. Our country, particularly those who participate in activities that are consistent with our products, values<br />

and mission.<br />

As mentioned above in ‘<strong>The</strong> Vimal Team’, we annually contribute to the eradication of barriers to education<br />

among the families of our employees. This programme, which requires employees to demonstrate<br />

their commitment to Vimal’s success through low levels of absenteeism, has annually contributed<br />

to the education of more than 130 children per year, at an annual cost to Vimal in excess of R67<br />

000. At the height of this programme in 2006, we paid the school fees for 254 children at a cost of more<br />

than R113 000.<br />

In 2007, we also donated R8 440 to charitable contributions, in support of their community development and<br />

support initiatives. <strong>The</strong> recipients of our support included the Divine Life Centre, the Cerebral Palsy Foundation,<br />

the Heart Foundation and St. Mary’s Hospital.<br />

Vimal, in accordance with the brand protection commitments we have offered our clients, do not donate subquality<br />

garments to employees, charities or local community members. In doing so, Vimal helps our clients<br />

ensure that their brands are linked to garments of extremely high quality.<br />

However, the process of producing this report has allowed us to identify an opportunity to donate our stock<br />

of out of fashion and/or end-cut fabrics and threads to economic development projects in one or more deeply<br />

impoverished communities. It is our hope that through this donation, we will be able to have a ‘material’ impact<br />

on the sustainability of persons who are unable to secure meaningful employment, and we look forward to<br />

providing an update on this initiative in our next Report.<br />

27


STAKEHOLDER ENGAGEMENT<br />

Until recently, we were unaware of the term ‘Stakeholder Engagement’. Granted, we have come to understand<br />

that much of what we do to ensure the ongoing productivity and profitability of our company can be construed<br />

as ‘engagement’, but we are fundamentally will to accept that our engagement processes are ad hoc, with<br />

the exception of our customers, suppliers and employees (including their unions and the NBC). Our formal<br />

engagement includes:<br />

• Our weekly meetings between management and the employees and/or their representatives, to raise and<br />

discuss issues of importance to our employees. This includes their issues/concerns being presented to<br />

management, as well as the presentation of production results, safety briefings, and process or policy to<br />

the employees.<br />

• Regular meetings with customers to discuss new production trends, fabrics, designs and/or orders, as<br />

well as any issues or concerns that either party might have with the other.<br />

• Regular meetings with suppliers to discuss new materials and/or orders, as well as any issues or concerns<br />

that either party might have with the other.<br />

Ultimately, we intend to develop systems that are able to more effectively capture our engagement processes<br />

and outcomes with the following key stakeholders (not exhaustive, nor in order of preference):<br />

• Employees • Standard Bank • YKK Zippers<br />

• Adidas • Berzacks • Speed Zippers<br />

• <strong>Puma</strong> • International Trimmings • Bargaining Council for the<br />

Clothing Industry<br />

• Mr. Price • Maxiloads<br />

• TotalSports (Foschini) • Thai Taffeta<br />

DTI CODES OF GOOD PRACTICE<br />

South Africa’s Department of Trade and Industry (DTI) has launched the DTI Codes of Good Practice: a set<br />

of business principles that are expected to promote and develop corporate behaviour that meets international<br />

best practice standards for corporate responsibility.<br />

<strong>The</strong> Codes come into full effect at the end of February 2008, and at the time of writing this Report, we are in<br />

the process of undergoing a review of our status according to these Codes.<br />

It is our belief that Vimal is, at bare minimum a Category 4 Supplier, based on our own internal assessment<br />

of our Ownership, Management Control, Employment Equity, Enterprise Development and Socio-Economic<br />

Development practices.<br />

Opportunities for significant improvement may exist within our Skills Development and Preferential Procurement<br />

practices, but we are confident that these issues can be reasonably controlled and/or explained due to<br />

the size and nature of our business.<br />

Vimal is committed to completing a full assessment of our Codes status within the first half of 2008, and we will<br />

discuss this assessment in our 2008 Sustainability Report.<br />

28


HUMAN RIGHTS<br />

Vimal is a small family-owned business that has not necessarily been called upon to investigate and/or ascribe<br />

to any international conventions regarding Human Rights. However, as a South African company, we are both<br />

obliged and committed to living up to our national Constitution, and to respecting all laws, including those pertaining<br />

to the fair treatment of employees.<br />

Vimal falls under the watchful eye of the National Bargaining Council for the Clothing Industry, as well as SACT-<br />

WU, the South African Clothing and Textile Workers Union, and we actively encourage and support employee<br />

participation in both of these rights bodies. Moreover, we aspire to meet or exceed the Bargaining Council’s<br />

Collective Agreement rules, recognizing that these rules are merely base level guidelines, and that exceeding<br />

them, within reasonable limits, has created a work environment that encourages reciprocal trust, respect and<br />

commitment between management and our employees.<br />

Shop stewards are aware of the rules and they attend Union meetings on behalf of Vimal. If any problems are<br />

raised by our workers, the stewards have the right, and responsibility, to address them with the Bargaining<br />

Council or Union, without being victimized.<br />

Vimal does not hire child and/or forced labour, nor do we allow any of our suppliers or sub-contractors to engage<br />

in these practices.<br />

Vimal’s security personnel are contracted through the business park in which we are situated, and we have not<br />

been informed of any incidents of excessive use of force by security personnel, nor would we be willing to allow<br />

such behaviour to persist in the exercising of their duties on behalf of Vimal.<br />

LESSONS LEARNED AND THE WAY FORWARD<br />

This is the first time Vimal has attempted to produce a Sustainability Report, and if not for the support and<br />

encouragement of Trialogue we highly doubt we would have been able to generate such a comprehensive<br />

overview of our company, our most material issues, and our opportunities to improve our social, safety, environmental<br />

and economic performance.<br />

One must understand that as a family-owned business, our efforts have always been firmly invested in ensuring<br />

that our customers and employees are ‘happy’, and that our business remains financially strong and<br />

healthy. Although we now recognise that our data management systems were not necessarily giving us all of<br />

the information we might have needed to maximise our efficiencies, we were nonetheless in a position to find,<br />

and analyse, information for the purpose of informing our wide range of stakeholders.<br />

In short, the process of developing this Report has been a lengthy learning exercise, yet we quickly realized<br />

that the process of reporting affords significant benefits in terms of being able to use statistics to evaluate<br />

our performance, including the conducting of comparisons, particularly with respect to issues that are directly<br />

related to our employees.<br />

This process has created an opportunity for us to re-think our bonus structures to encourage full attendance<br />

and to motive the employees to attend work regularly. It has also assisted us with attempting to identify problems<br />

within our business, as well as to find ways to address them.<br />

In speaking to our staff, Trialogue has helped us better understand the issues that they have apparently felt<br />

unable to bring to our attention, and has helped create mechanisms for addressing each of their concerns.<br />

As a direct result of the reporting process, we are now committed to:<br />

• Reducing the amount of solid waste we send to landfills sites by:<br />

- Increasing the pace of our conversion from manual cutting to computer aided design and cutting<br />

procedures to maximise fabric usage;<br />

29


- Collecting reasonably large pieces of scrap materials and distributing them to rural economic<br />

development projects that can make use of the fabric to manufacture clothing and other<br />

items; and,<br />

- Collecting and recycling our scrap paper (specifically from patterns and office use) and plastics.<br />

• Monitoring our electricity and water consumption figures, normalised to units of production, to ensure that<br />

Vimal uses both of these scarce resources in as efficient a manner as possible.<br />

• Creating a mechanism for employees to access some form of catering services, most likely in a designated<br />

section of our parking lot (away from our residential neighbours).<br />

• Creating an additional (external) mechanism for employees to communicate complaints and/or recommendations<br />

to the management team.<br />

• Donating up to 50 of our older sewing machines to a fledgling rural economic development centre run by<br />

Cotlands, a national HIV/AIDS charity, in a community directly affected by rampant unemployment and an<br />

HIV-infection rate in excess of 60%.<br />

• Clearing out our warehouse and donating surplus fabric and accessories to economic development<br />

projects that can produce goods to assist in their own sustainability.<br />

• Reviewing and updating this Report on an annual basis, using the tools and knowledge we have gained<br />

this year to improve our data collection, collation and reporting procedures.<br />

REQUEST FOR FEEDBACK<br />

Because this is our first attempt at producing a Sustainability Report, we are mindful of the possibility that we<br />

have not provided a comprehensive discussion of the information that is important to our many stakeholders.<br />

As such, we are hopeful that you, the reader of this Report, will contact us and offer us your views on the quality<br />

and usefulness of this Report.<br />

Should you have any questions about our company, or comments about anything contained within this report,<br />

please contact Khemie via email to at khemiep@vimal.co.za<br />

30


Standard Disclosures<br />

GRI G3 APPLICATION LEVEL REQUIREMENTS<br />

As a first attempt at applying the GRI G3 guidelines to our Sustainability Report, Vimal has decided to seek a<br />

C+ level of application. <strong>The</strong> following three tables provide a summary of the GRI’s requirements as well as a<br />

quick reference to our self-assessment of compliance to the C+ level.<br />

For an indicator-by-indicator discussion of our Report’s compliance to all of the required indicators, please<br />

email nayan@vimal.co.za. For details of the process employed by Trialogue Assurance Services to afford<br />

Vimal the required Third Party Assurance over this Report, please email michael@trialogue.co.za.<br />

Report Application Level C C+ B B+ A A+<br />

G3 Profile<br />

Disclosures<br />

G3<br />

Managment<br />

Approach<br />

Disclosures<br />

G3<br />

Performance<br />

Indicators &<br />

Sector<br />

Supplement<br />

Performance<br />

Indicators<br />

* Sector Supplement in final version<br />

Report on:<br />

1.1<br />

2.1 – 2.10<br />

3.1 – 3.8, 3.10 – 3.12<br />

4.1 – 4.4, 4.14 – 4.15<br />

31<br />

Report Assured by Trialogue Assurance Services<br />

Report on all criteria<br />

listed for Level C plus:<br />

1.2<br />

3.9, 3.13<br />

4.5 – 4.13, 4.16 – 4.17<br />

Not Required Management Approach<br />

Disclosures for each<br />

Indicator Category<br />

Report on a minimum<br />

of 10 Performance<br />

Indicators, including at<br />

least one from each of:<br />

social, economic, and<br />

environment<br />

Report on a minimum<br />

of 20 Performance<br />

Indicators, at least one<br />

from each of: economic,<br />

environment, human<br />

rights, labour, society,<br />

product responsibility<br />

Report Externally Assured<br />

Same as requirement for<br />

Level B<br />

Management Approach<br />

Disclosures for each<br />

Indicator Category<br />

Respond on each core<br />

G3 and Sector Supplement*<br />

indicator with due<br />

regard to the Materiality<br />

Principal by either: a)<br />

reporting on the indicator<br />

or b) explaining the<br />

reason for its omission<br />

Report Externally Assured<br />

Mechanised<br />

embroidery is an<br />

important valueadding<br />

service for<br />

our clients.


VISION & STRATEGY ECONOMIC SOCIAL<br />

Strategy and Analysis<br />

Core Additional Core Additional<br />

Economic Performance Employment<br />

1.1 EC1 LA1 LA3<br />

1.2 EC2 LA2<br />

Organisational Profile<br />

EC3 Labour/Management Relations<br />

EC4 N/A LA4<br />

2.1 Market Presence LA5<br />

2.2 EC6 EC5 Health and Safety<br />

2.3 EC7 LA7 LA6<br />

2.4 Indirect Economic Impacts LA8 LA9<br />

2.5 EC8 N/A EC9 Training and Education<br />

2.6<br />

LA10 LA11<br />

2.7<br />

ENVIRONMENTAL<br />

LA12<br />

2.8 Materials Diversity and Opportunity<br />

2.9 EN1 LA13<br />

2.10 N/A EN2 LA14<br />

Report Profile Energy Strategy and Management<br />

3.1 EN3 EN5 N/A HR1 HR3<br />

3.2 EN4 EN6 HR2<br />

3.3 EN7<br />

3.4 Water Non-discrimination<br />

Report Scope and Boundary<br />

3.5 Biodiversity<br />

EN8 EN9 N/A HR4<br />

EN10 N/A<br />

3.6 EN11 EN13 N/A HR5<br />

32<br />

Freedom of Association and Collective Bargaining<br />

3.7 N/A EN12 N/A EN14 N/A Child Labour<br />

3.8 N/A EN15 N/A HR6<br />

3.9 Emissions, Effluents and Waste Forced and Compulsory Labour<br />

3.10 N/A EN16 EN18 HR7<br />

3.11 N/A EN17 EN24 N/A Security Practices<br />

GRI Content Index EN19 EN25 N/A HR8<br />

3.12 EN20 N/A Indigenous Rights<br />

Assurance EN21 N/A HR9 N/A<br />

3.13 EN22 Community<br />

Governance, Commitm ents and<br />

Engagement<br />

EN23 N/A SO1<br />

Products and services Corruption<br />

EN26 SO2<br />

4.1 EN27 SO3<br />

4.2 Compliance SO4 N/A<br />

4.3 EN28 N/A Public Policy<br />

4.4 Transport SO5 SO6 N/A<br />

4.5 N/A EN29 Anti-competitive Behaviour<br />

4.6 N/A Overall SO7 N/A<br />

4.7 N/A EN30 Compliance<br />

4.8 SO8 N/A<br />

4.9 Customer Health and Safety<br />

4.10 N/A PR1 PR2 N/A<br />

Commitment to External Initiatives<br />

Products and Services<br />

PR3 N/A PR4 N/A<br />

4.11 N/A PR5<br />

4.12 Marketing Communication<br />

4.13 PR6 N/A PR7 N/A<br />

Stakeholder Engagement<br />

Customer Privacy<br />

4.14 Compliance<br />

4.15 PR9 N/A<br />

4.16<br />

4.17 N/A<br />

GRI CONTENT INDEX<br />

For our complete GRI G3 responses table, including a map of our content, please email<br />

khemiep@vimal.co.za.<br />

Included<br />

Not included, potential improvement area<br />

Included, but requires future improvement<br />

Not applicable<br />

PR8 N/A


NON-INDEPENDENT ASSURANCE STATEMENT<br />

To the Owners and Management of Vimal Clothing cc (hereafter, ‘Vimal’):<br />

Trialogue Assurance Services (hereafter, ‘TAS’) was engaged by the Global Reporting Initiative (GRI) to assist<br />

Vimal, and two other South African suppliers of <strong>Puma</strong> AG, with the development of this Sustainability Report.<br />

This project, entitled “Transparency in the Supply Chain,” required that TAS assist the three participating companies<br />

develop an understanding of Sustainability Reporting, and help to facilitate the development of this<br />

report.<br />

Because of our involvement in the development of this report, TAS is not in a position to provide ‘Independent<br />

Third Party Assurance’ over the contents herein. However, it has been duly noted that the data presented<br />

neither belongs to TAS, nor was supplied by TAS, and therefore our review of this information still positions us<br />

to provide Vimal, and its many stakeholders, with this ‘Non-Independent Assurance Statement’ over the content<br />

of this 2007 Sustainability Report, ‘the Report’.<br />

<strong>The</strong> Report presents Vimal’s sustainability performance over the period 1 January to 31 December 2007, including,<br />

where available, sustainability trend data for previous years. This statement represents our assurance<br />

opinion. TAS’s responsibility in performing its assurance activities is to the management of Vimal alone and in<br />

accordance with the terms of reference agreed with them.<br />

Assurance objective<br />

<strong>The</strong> objective of the assurance process is to provide stakeholders of Vimal with a ‘Limited Assurance’ opinion<br />

on general accuracy and completeness of the information presented in this Report. This is confirmed through<br />

multiple reviews of the data submitted by Vimal and the underlying systems, processes and competencies that<br />

support the Report.<br />

Scope of work performed<br />

Review of quantitative content of the Report<br />

Among other duties, TAS was engaged to assist Vimal with assessing the completeness, accuracy and consistency<br />

of the data contained within this report, and to test that assertions made within the report can be deemed<br />

both ‘reasonable’ and ‘supportable’ by the relevant sustainability data presented herein. Moreover, TAS was<br />

charged with testing drafts of the Report to determine the degree to which it was consistent with the reporting<br />

requirements of the GRI G3 Guidelines.<br />

TAS limited the scope of the assurance process to a ‘limited assurance’ review of the quantitative data submitted<br />

by the management team at Vimal, for collation and reporting herein, as well as the Reports alignment to<br />

the GRI’s G3 reporting guidelines<br />

Assurance methodology<br />

<strong>The</strong> process used in arriving at this assurance statement is based on the GRI’s G3 guidance and other best<br />

practices in sustainability reporting assurance. Our approach to assurance included the following:<br />

• a review of Vimal’s sustainability measurement and reporting procedures, background documentation<br />

and data collection procedures;<br />

• a review of the data submitted for inclusion in the Report for any significant anomalies; and,<br />

• an examination of the aggregation and/or derivation of, and underlying evidence for, data and statements<br />

included in this Report.<br />

In determining the GRI G3 application level of the Report, we performed the following exercises:<br />

• Assisting in the drafting of the Report to ensure that the content of the Report, including discussions<br />

regarding the determination of sustainability context and coverage of material issues, was duly aligned<br />

with GRI G3;<br />

33


• A review of the approach of management to addressing topics discussed in the Report; and<br />

• A confirmation that at the requisite number of performance indicators had been covered in the Report.<br />

Independence<br />

Because TAS was engaged to provide report development assistance to Vimal, through the engagement of<br />

TAS by the GRI as the South African consultants on the ‘Transparency in the Supply Chain’ project, ours is<br />

not an ‘Independent’ assessment of this Report. Our involvement with Vimal significantly hinders our ability<br />

to remain fully independent, but does not necessarily preclude us from offering some form of assurance to<br />

stakeholders.<br />

Because Vimal is a relatively small organisation, it was determined that Vimal cannot afford to seek external/<br />

independent third party assurance. However, the involvement of TAS is reviewing Vimal’s data allows us a<br />

unique insight into the content of this Report, and permits us an opportunity to make comment over the accuracy,<br />

consistency and completeness of the data contained herein.<br />

Findings<br />

In general, Vimal’s sustainability reporting processes are adequate to meet the GRI’s G3 ‘Application Level C’.<br />

However, it was found that:<br />

• Vimal’s process to identify its ‘Most Material Issues’ was informal in nature, albeit improved through this<br />

reporting process, and the company still requires a formal process to actively engage stakeholders on a<br />

ranged of ‘sustainability-specific issues’;<br />

• Although significant steps have already been taken to improve the quantity and quality of meaningful data<br />

(particularly production efficiency and environmental data), more work needs to be undertaken to ensure<br />

that Vimal sets and achieves specific sustainability performance targets;<br />

• Vimal has not yet undertaken to complete an assessment of its compliance to the DTI Codes of Good<br />

Practice (fully implemented as of the end of February 2008).<br />

Recommendations<br />

• Vimal should ensure that stakeholders (internal and external) are adequately engaged to comment on this<br />

Report and/or to inform the content of the next Report.<br />

• Vimal should actively engage its key stakeholders to ensure that the company is effectively addressing<br />

stakeholder-specific concerns, and that any ‘new’ issues are incorporated into Vimal’s ongoing sustainability<br />

strategy.<br />

• Vimal should undertake to complete its compliance to the DTI Codes of Good Practice within the 2008<br />

calendar year, in order to enhance the quality and/or relevance of this report relative to local stakeholder<br />

expectations.<br />

• Vimal should ensure that future reports include improvements in the quality of data, particularly those<br />

pertaining to the DTI Codes of Good Practice and the environment.<br />

Opinion<br />

For all data under review, errors identified during our assessment were addressed by Vimal prior to finalising<br />

this Report, and nothing came to our attention to lead us to believe that the final data is not reliable. As a result,<br />

we believe that the sustainability data in this Report gives a fair representation of Vimal’s sustainability performance,<br />

and that this report adequately represents a GRI G3 C level report.<br />

Trialogue Assurance Services<br />

29 February 2008<br />

34


CONTACT DETAILS<br />

Vimal Clothing Enterprise C.C.<br />

Tel: +27 31 538 2400<br />

Fax: +27 31 539 6874<br />

Address: Fairways Park<br />

4 Fairways Avenue<br />

Mount Edgecombe<br />

Durban<br />

South Africa<br />

4300<br />

Contact Person: Miss Khemie Prithipal<br />

Khemiep@vimal.co.za<br />

<strong>The</strong> graphic design and layout of this Report was<br />

completed by Candice Ekermans, our Johannesburg-based<br />

independent design consultant.<br />

We are very pleased to support Candice with this<br />

project, as she is a living testament that courage<br />

and tenacity can overcome all challenges.<br />

Although one might not notice it when reviewing this<br />

Report, Candice is legally blind, which for others might<br />

have suggested no future in the field of marketing<br />

materials development.<br />

We hereby wish to compliment and thank Candice<br />

for her excellent work. Candice can be contacted at<br />

minxgraphics@gmail.com.

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