impahla clothing - مشاوره|آموزش |تحقیق integrated annual report...rugby and soccer...

IMPAHLACLOTHING

PUMA World CAt StrAtegiC SUPPlierIntegrated annual report 2013For the period March 2012 to February 2013

Cover photographs courtesy of PUMA SA.

South African national soccer team, Bafana Bafana, Super Rugby franchises Vodacom Blue Bulls and Toyota Free State Cheetahs are just some of the players’ kit that Impahla Clothing produces.

Photography credits:

Front cover: Bongani Khumalo, Bafana Bafana – BackpagePixFrancois Hougaard, Vodacom Blue Bulls – Johan RynnersBack cover: Davon Raubenheimer, Toyota Free State Cheetahs – Spektor PhotographyInside photographs: Debbie Snoek, Solo Graphics

SpRIng RomAnCe pRopeRTIeS 34 (pTy) LTD T/A ImpAhlA CloThIngHead office:Unit 10, maitland Business park, 1 mowbray Road, maitland 7405, Cape Town, South AfricaPostal address:p o Box 921, maitland 7404, Cape Town, South Africa

Telephone: + 27 (21) 510 4201 Fax: +27 (21) 510 4257Contact:William Hughesemail: [email protected]

Request for feedbackShould you have any questions about our company, or comments about anything contained within this report, please contact William via email at [email protected].

Integrated annual report 2013For the period march 2012 to February 2013

IMPAHLACLOTHING

AbouT ThIs RepoRT – sCope And meAsuRemenT InfoRmATIonreporting period1 The previous reporting period ran through a 14-month cycle, whereas this report covers the current reporting period for

2012/2013, which runs from 1 march 2012 to 28 February 2013.

Change to Sustainability topics1 The first strategic issue has been renamed to include new customers in the report as well as pUmA.

2 The priority and importance of the strategic issue of The people has been increased to the section in the materiality table.

3 The material issue Safety and Wellbeing has been renamed that of Health and Safety.

Mergers and acquisitions1 An organogram is included to illustrate the one merger (Tomatex), one acquisition (primi) and a new start up (Socks) that

Impahla underwent in 2012/2013.

2 As a result of the aforementioned, the shareholder list has been updated to include shareholder equity and relevant historically disadvantaged information.

Calculation modifications1 Impahla’s increase in size, scope, workforce and production has caused a change in calculations in terms of water, carbon,

electricity and fuel usage. All figures (both 2011/2012 and 2012/2013) are restated in terms of usage per employee hour worked, calculated as: usage/(number of employees x working days x 8.5).

2 For comparability’s sake, comparisons regarding water, carbon, electricity and fuel are made on the maitland clothing plant. As epping and elsies River plants were not part of the Impahla’s operations last year, comparisons cannot be made for these plants.

3 Total carbon emissions per plant are calculated as follows: (Total carbon emissions (net tonnes)/total electricity used (net kW)) x electricity usage per plant (net kW).

4 Impahla’s staff turnover rate has been calculated using the following metric: (no. of staff that have left/(no. of staff at the beginning of year + no. of staff at the end of the year)/2) x 100. All figures (both 2011/2012 and 2012/2013) have been restated.

5 The TIFR calculations have been modified, including the targets of the firm. Therefore, the new figures are calculated as follows: recorded injuries/(working hours/200 000).

6 Staff absenteeism and Arrive-on-time bonuses have been recalculated using modified staff numbers. The number of staff has been averaged using the formula: number of staff = (no. at beginning or reporting period + no. at end of reporting period)/ 2). Figures for 2009 through to 2013 have been restated.

Scope and boundary of the reportThe report covers all the operational entities owned, part-owned or leased by Impahla and its shareholders. The organisational boundary is illustrated in the Impahla organisational chart on p 7. no related entities are excluded from this report.

While Impahla has considered its ability to influence entities upstream and downstream of its operations, (see Strengthening the supply chain p 24), these fall outside the boundary for reporting. mergers and acquisitions for the year are included in the report. There are no joint ventures, subsidiaries or outsourced operators that would be relevant for inclusion in this report.

Integrated annual report 2013 3

4iMPAhlA - the BUSineSSImpahla at a glance 6 organisational chart 7 taking stock, looking ahead – managing director’s report 8 Stakeholder matrix 9

10GoveRnAnCeWhat Impahla stands for 12ownership structure 13governance and decision-making 13director profiles 14

16oveRview of MAteRiAl iSSUeSa brief summary 18

22MAteRiAl iSSUeS diSCUSSedServicing Impahla’s customers 24the people 28Managing growth 31Creating and sharing economic value 33environmental protection 36

38the heARt of iMPAhlAemployees of the month 40Impahla Clothing 41Impahla Branding 46Impahla Socks 47Impahla Fabrics 49

50APPendiCeSFinancial statements 52 grI g3 application level requirement 56Independent assurance Statement 58Comprehensive grI g3 content assessment 59acknowledgements ibc

ContentS

4 IMpaHla ClotHIng

tHe business


the BUSineSS

6 IMpaHla ClotHIng

Turnover up 60% from 2011/2012. npBT

increased 41%from R3.7 million in 2011/2012, to

R5.2 million for the current financial year.

The trend for after tax return on investment has increased as follows: 25%:2011, 41%:2012 and 44%:2013.

npAT up 62% to

R4.3 million in 2012/2013 from R2.7 million in

2011/2012

Impahla continues to pay full national Bargaining Council wage

rates, despite many peers in the local clothing industry paying rates

as low as half these rates. employee expenditure has

increased by 41% over the last year

Retained A-grade

PUMA S.A.f.e. rating at maitland with the following scores for the last three years

respectively, 96.54%, 98.02% and

95.29% while obtaining a B-rating

on our newly acquired ‘fabrics’ and ‘socks’ plants with scores of

89.04% and 86.07% respectively.

Spent R6.6 million on new machinery and equipment

in 2012/2013

Acted on strategy to gain control over supply chain, buying

equipment and amalgamating with a key supplier

Local procurement of fabrics

fell to 8.6% from 9% in 2011/2012

tHe business

IMpahla at a glanCe

purchased production planning programme

(fast React) and workflow barcode

tracking system

(Styleman)

Strengthened the management team by promoting 15 employees

to take responsibility for key functions during 2012/2013.

Zero turnover of management staff

employee resignations

reduced by 11% from 2011/2012 to 16 resignations

for 2012/2013

employees increased from

234 to 405 (74%) due to organic growth, the

merger with Tomotex (epping plant), acquisition of primi and a

start-up of Impahla Socks (elsies River plant).

permanent employees number 100% of the workforce

Formal

B-BBee verification status set at a level SeVen

contributor

Absenteeism marginally

increased from 1.4% to 1.5% in the year

under review. However,

arrive on timebonuses increased by 5%

TIFR (Total Injury Frequency Rate) score is the best Impahla has ever

achieved, with a score of

13.52, a reduction of

more than 41% from the previous year

Carbon emissions: Co2e intensity for maitland plant

decreased by

26% per employeehour worked, with a usage of

0.37 kilograms, down from 0.50 kilograms

Water efficiency improved from 3.62 litres per employee hour to

3.12 litresper employee hour (a 14%

reduction) in the maitland plantelectricity intensity

decreased by 24% from 0.50 kW per employee hour to

0.38 kwper employee hour worked in the

maitland plant

generated

56 942 kw of power and saved

23% of the electricity usage at

the maitland plant

locally manufactured

rugby and soccer players’ kits for the Blue Bulls, Cheetahs, Southern

Kings, Bafana Bafana, moroko Swallows and Jomo Cosmos

Funded the planting of

1 492 trees by Food and Trees for Africa –

an increase of 130%


ImpAhlA CloThIngmaitland Industrial

Revenue contribution - 83%

lenA JAnsenproduction director

(7.5% ownership)

ImpAhlA fAbRICs(IMPAHLA /TOMOTEX MERGER)

epping IndustrialRevenue contribution - 10%

seAn Thomsonfabrics director(12.5% ownership)

ImpAhlA soCKs (NEW START UP)

elsies RivierRevenue contribiution - 5%

KeVIn AlbeRTssocks director

(12.5% ownership)

ImpAhlA bRAndIng (ACQUISITION PRIMI)

elsies RivierRevenue contribution - 2%

CARl VIsseRbranding director(22.5% ownership)

*All items in pink are additions completed during 2012/2013.

organISatIonal Chart

WIllIAm hughesmanaging director

(37.5% ownership)

8 IMpaHla ClotHIng

takIng StoCk, lookIng ahead

By William Hughes, Managing director

responsible business paysImpahla Clothing (Impahla) is a Cape Town-based company that manufactures apparel, socks, collars and trims, fabrics and offers a range of branding services including embroidery, sublimation and screen printing. Impahla is a privately owned business that has grown organically over the last nine years from 60 employees in 2004 to 405 in February 2013. In 2013, Impahla supplied in the order of 1.5 million products for a total turnover of R60.76 million, 60% up from 2011/2012. npBT increased 41% from R3.7 million in 2011/2012, to R5.2 million in 2012/2013. Adding this profit to the total accumulated in the business brings the accumulated profit as at 28 February 2013 to R11.4 million. Impahla’s after-tax return on investment has increased from 41% in 201/2012 to 44% in 2012/2013. For further details on financial performance, see financial statements beginning on page 52.

over the same period that Impahla has been in business, many companies in the industry have either gone out of business, or are claiming they cannot afford to comply with the national Bargaining Council (nBC). There is an ongoing conflict between the nBC and clothing manufacturers insisting on undercutting nBC agreed rates. The Cape Clothing Association (CCA), representing employers in the Cape, is also concerned that the bargaining forum is being compromised by the non-compliance of a significant proportion of the industry.

It is clear that there are increasing numbers of non-compliant manufacturers abusing human rights by paying less than a living wage, and exploiting their labour to compete unfairly in the marketplace. This practice is unsustainable and only serves to widen the already dangerous gap between rich and poor in South Africa.

much has been made of the threat from the Far east, where materials and labour are cheaper than can be procured in South Africa. I wholeheartedly support calls for local retail buyers to consider responsible procurement practices before sourcing from

the cheapest supplier. on the other hand, the South African clothing manufacturing industry needs to look to itself too. Seldom do we remind society that we already enjoy protection from the government – in the form of a 45% duty on imported apparel. The story of the clothing industry’s decline bears many of the hallmarks of the classic waning empire – costly management overhead and a distrusting relationship between management and workers.

Why has Impahla shown such robust growth while also showing good sustainability performance?

Stakeholders – build strong relationshipsThe answer lies in building relationships with Impahla’s stakeholders and building resources to serve the market and tackle future growth demands. In particular, Impahla’s philosophy has been to create a single team where all members are respectful of the various roles they play. Five of the company’s directors are hands-on managers, working side by side with the manufacturing staff. It has not been an easy journey, especially given the entrenched business culture that has existed for so long within South Africa. However, Impahla’s sustainability performance indicators, especially those for absenteeism and turnover, show that the company is growing, not only in size, but in the strength and resilience that comes from a trusting and respectful relationship.

Impahla’s people are the most important asset. The aim is to create an enabling environment for production where the Impahla ‘way’ can manifest, unifying the team under one purpose. In creating this environment, Impahla brings workplace safety, health management, good wages and stable employment to the partnership. In return, it is expected that the employees take responsibility for being at work on time, delivering what is required from them and contributing to the partnership to the best of their ability. Impahla understands the role and impact the employees have with respect to the organisation and is currently working with the IDC to develop an employee share scheme.

Strategy – control our supply chain The report last year stated that the strategy was to secure a sustainable future for the business and to become as vertically integrated as possible. During the last year, Impahla merged with Tomotex, gaining control of a ‘fabric’ plant in epping. The company further acquired primi, gaining control of an embroidery function in maitland, adjacent to the main plant. Finally, Impahla engaged in a start-up, gaining control of a plant in elsies River for the manufacture of socks. By controlling the supply chain, Impahla is now able to provide a better service going forward. Due to this growth, the staff component increased by 73% and machinery and assets increased to R9.7 million. The strategic aim for the ensuing year is to consolidate the position by entrenching Impahla’s culture and the way Impahla does business moving forward. The second strategic aim is to fully utilise the new assets in order to reap the best rewards and scale from investments, while still providing competitive, high quality products for customers and providing stable employment for staff.

tHe business


risk – identify material issues The report identifies and confronts the issues that Impahla feels are the most pressing and important in terms of the firm’s sustainability. As part of the risk process, the company highlights and assesses these issues in terms of their possible impacts on the firm and its ability to respond to them in an effective manner. The issues are highlighted and discussed at executive shareholder meetings, which are held monthly. The material issues that are represented in this report highlight the key risks and opportunities that Impahla has faced over the 2012/2013 reporting period and how the firm has dealt with them in order to create the successes that it has achieved. Furthermore, each material issue brings with it the opportunity for further improvement in the ensuing reporting period as well as the opportunity to grow stronger relationships with stakeholders.

The primary aim of this report is to show all stakeholders how Impahla conducts its business, what issues the company faces and how it intends to tackle them in the future. partly, this report is written to share the business model with those in the industry who genuinely want to make a success of their manufacturing businesses through responsible business practices. And partly, this report is written for ourselves as a reality check – for the material issues described in the following pages are key to the ongoing success of the business, and Impahla needs to ensure that it constantly revisits its strategy and reviews the wisdom of its actions.

In developing this report, Impahla has once again followed the gRI’s g3.1 guidelines for sustainability reporting, and has taken into consideration comments and advice from a variety of stakeholders, notably from consultation with Trialogue, specialists in integrated and sustainability reporting.

Stakeholder MatrIx

StAkeholder groUPS Where to find theM in the rePort

Customers ● 86% existing pUmA Customer ● 14% new Customers

● meeting and going beyond standard ● Strengthening our supply chain

Suppliers ● 81% Foreign Based ● 19% Local Base

● extending our responsibility in the supply chain

Employees ● 405 ● 351 Female ● 54 male

● employee engagement ● Skills and career development ● Health and Safety ● Clothing industry and the nBC ● Remuneration and employment equity ● Developing HR capacity and other resources ● Developing management capacity ● Responsibility and pUmA’s code of conduct

Unions ● South African Clothing and Textiles

Worker ● Union (SACTWU)

● employee engagement ● Skills and career development ● Workplace safety and wellbeing ● Clothing industry and the nBC

Industry Bodies ● SeTA ● CLoTeX ● Cape Clothing Association

● employee engagement ● Skills and career development ● Workplace safety and wellbeing ● Clothing industry and the nBC

Financial Institutions ● ABSA ● IDC

● Financing growth

Government ● external stakeholder equity

Shareholders ● William Hughes ● Carl Visser ● Sean Thompson ● Kevin Albert ● paul Visser ● Lena Jansen

● Financing growth ● Return on shareholder investment ● equity in ownership and control of Impahla

Key product lines Manufacturing – the complete manufacture of garments to order.blanks branded – a quick response business where blank garments (held speculatively in stock) can be quickly converted to product with screen-printing, heat-transfer or embroidery to meet orders with short lead times. impahla has taken over PUMA’s entire SA blank programme.Printing and embroidery services – the finishing of a predestined garment line through screen-printing, heat-transfer of embroidery.Collars and trims – the manufacture of collars and trims. Fabrics – the manufacture of fabrics for both internal use in production or manufacturing as well as an end product in other value chains.socks – the manufacture of socks.

10 IMpaHla ClotHIng

governanCe


GoveRnAnCe

12 IMpaHla ClotHIng

Impahla shares the values and principles of its largest customer, pUmA. It works hard at redressing the ‘them and us’ situation that industry has inherited from the past. Impahla believes strongly that it is a single unit and a single team.

The management team works alongside production staff, especially when the company is under pressure to deliver. All supervisors and managers are approachable and available to resolve queries at any time, most often without an appointment.

The policy is to promote from within and Impahla has, by and large, achieved this over the years. As it continues to grow, more opportunities will become available for floor staff to develop their careers.

Above all, Impahla stands for quality and fairness – quality and fairness in relationships and quality and fairness in the work it delivers. These values are embodied in Impahla Code of Conduct:

Impahla’s Code of Conduct: 12 key principlesImpahla is committed to the goals of reducing waste, using resources responsibly, supporting workers’ rights, and advancing the welfare of workers and communities. Impahla believes that partnerships based on transparency, collaboration and mutual respect are integral to making this happen.

1. Regular employment is provided on the basis of a recognised employment relationship. The Code does not allow the use of a home working arrangement for the production of Impahla products.

2. Workers employment is voluntary and excludes prison labour, indentured labour, bonded labour or other forms of forced labour.

3. Employees are older than 16 years of age or over the age for completion of compulsory education or country legal working age, whichever is higher. Furthermore, employees under 18 are not employed in hazardous conditions.

4. Contractors do not discriminate in terms of hiring, compensation, promotion or discipline, on the basis of gender, race, religion, age, disability, sexual orientation, pregnancy, marital status, nationality, political opinion, trade union affiliation, social or ethnic origin, or any other status protected by country law.

5. Harassment and abuse are not tolerated and employees are not subject to physical, sexual, psychological or verbal harassment or abuse.

6. Freedom of association and collective bargaining are respected to the extent permitted by the laws of the manufacturing country.

7. Wages, benefits and overtime are such that employees are timely paid and at least at the minimum wage required by country law and are provided legally mandated benefits.

8. Working hours and rest days are co-ordinated such that employees do not work in excess of 60 hours per week, or the regular and overtime hours allowed by the laws of the manufacturing country, whichever is less. overtime hours are consensual and compensated at a premium rate and employees are allowed at least 24 consecutive hours rest in every seven-day period.

9. Terminations and other disciplinary actions must adhere to the Code of good practice as contained in Schedule 8 of the Labour Relations Act 66 of 1995. In order to

create a pleasant climate in which to work and to reduce any unnecessary conflict in the workplace, it shall be expected that everybody shall treat their colleagues, superiors and subordinates with due respect and shall conduct themselves with dignity at all times.

10. Terms and conditions of employment are pertinent when supplied to the employee when the employee commences employment, with the following particulars in writing:

a full name and address of the employer; name and occupation of the employee, or a brief description of the work;

b various places of work; date of employment; ordinary hours of work and days of work;

c wage or the rate and method of calculating; rate for overtime work; any other cash payments; any payment in kind and the value thereof;

d frequency of remuneration; any deductions; leave entitlement; period of notice or period of contract;

e description of any council or sectoral determination which covers the employer’s business;

f period of employment with a previous employer that counts towards the period of employment;

g list of any other documents that form part of the contract, indicating a place where a copy of each may be obtained.

11. The workplace is healthy and safe and the necessary steps to prevent accidents and injury have been taken. Impahla has systems to detect, avoid and respond to potential risks to the safety and health of all employees.

12. Environmental impact is minimised in terms of human health and the environment by meeting regulatory requirements including air emissions, solid/hazardous waste and water discharge.

What IMpahla StandS For

governanCe


represents the spirit and intentions of the company. Having grown up in Zimbabwe, William Hughes (managing director) remembers the flame lily as a beautiful African flower that embodies the essence of the company.

The company is owned by private shareholders, of which one (paul Visser, 7.5%) is a non-executive, non-operational, silent investor living in the United States. The other

oWnerShIp StruCture

Impahla is a privately owned and operated apparel manufacturing company operating from three plants in Cape Town, South Africa: fabrics in epping, socks in elsies River and the head office is based in maitland. The company has developed from an ailing business with 60 staff, producing standard quality T-shirts for a variety of customers to a stable operation of 405 employees focusing on the needs of a diversified array of clients.

Impahla has geared its operations to the highest international standards and is pUmA’s first locally engaged World Cat Strategic Supplier. This arrangement has seen the company benefit from a steady stream of orders from pUmA, effectively providing sustainability for the company and its stakeholders.

Impahla means ‘clothing’ in Xhosa and the logo is the flame lily, a flower that is most prominent in Zimbabwe, and which

governanCe and deCISIon-MakIng

All decisions are made by the directorship, with the delegation of decision-making tasks filtering down through each director’s specific roles and responsibilities. As Impahla is a privately held company with no minority shareholders, the independence of the directors does not come into question.

given the nature and size of the business, informal meetings are conducted among the management team on a daily basis, while formal production and planning meetings are scheduled weekly (an increase over previously held monthly meetings), and executive shareholder meetings are conducted monthly, with input from paul being considered as and when necessary.

Ultimate responsibility for stakeholder engagement, contractor compliance-related issues, legal and regulatory compliance and compliance with union (SACTWU) and national Bargaining Council requirements rests with the directorship team, with

William spear-heading all aspects of control and assurance. All of the directors have explicitly declared their business interests and are aware of the consequences of operating in conflict with the codes of the company.

five shareholders – William Hughes (37.5%), Carl Visser (22.5%), Sean Thompson (12.5%), Kevin Alberts (12.5%) and Lena Jansen (7.5%) – form the hands-on management team that actively ensures that Impahla’s production team is happy, healthy and fully deployed. of the directors, Lena Jensen is considered an historically disadvantaged South African, being both coloured and female.

14 IMpaHla ClotHIng

Kevin albertdirector of Socks Kevin Alberts was born in Cape Town in 1962. After completing a marketing diploma at the Cape Technikon, he joined yKK Zippers as a sales representative in 1984. In 1989, he joined gelvenor Textiles to gain experience in selling and marketing of fabrics. In 1991, Kevin joined pg textiles where he worked alongside Sean Thompson. He rejoined yKK Zippers during 1993 as the sales and marketing manager. on his departure in 2001, he had progressed to managing their national sales and marketing. Kevin joined Sean at Tomotex in 2001 as a partner. Following the Tomotex merger with Impahla last year, Kevin is now responsible for running of the ‘socks’ plant in elsies River and is proactive in sustaining the carbon neutral aspect of the business.

William HughesManaging directorWilliam Hughes was born in nakuru, Kenya in 1962. Having worked for four years for nampak in Johannesburg in the 1980s, William returned to the family farm in Zimbabwe. Following land seizures in 2003, William and his family moved to South Africa, and in 2004 bought an ailing clothing manufacturer, The Cape Town T-Shirt Company, with 60 staff. This operation became Impahla Clothing. As managing director, William is responsible for the company’s vision and strategy for sustainable growth, its relationship with its major customer pUmA, for the sourcing of inputs and technologies, as well as health, safety and environmental issues.

Carl Visserdirector of BrandingCarl Visser (BSc, University of natal) was born in Kadoma, Zimbabwe in 1955, and qualified as a land survey professional through the Harare Local Authority in Zimbabwe, before operating his own survey practice in Harare until July 1984. Following immigration to South Africa, Carl joined a survey practice. He joined Rand Water in 1995 and rose to chief surveyor in 1997. Carl bought shares in the company in march 2005 and moved to Cape Town with his family. Carl set up Impahla’s branding department to handle the company’s screen printing, heat transfer and embroidery operations. Carl also developed the processes that have allowed Impahla to become the first African company to use water-based CHT inks for heat transfers: thereby eradicating the company’s reliance on pVC-based inks.

governanCe

dIreCtor proFIleS


Sean thompsondirector of FabricsSean Thompson was born in Cape Town in 1967. He matriculated from Fish Hoek High School in 1984. After finishing two years of national service in 1986, he joined a textile company in 1987. He worked at this company until 1999, after which he started his own textile company called Tomotex. In August 2012, Tomotex merged with Impahla Clothing and became Impahla’s fabric division. Sean is now responsible for this division which continues to supply quality fabric and trims into the textile industry, as well as fabric into the Impahla plant.

lena Jansenproduction directorLena Jansen was born in 1960 in Southeyville, Transkei, finishing her formal schooling at elsies River High School in Cape Town. In 1979, she started as a cleaner in the finishing department at elite Clothing in maitland, and moved through the ranks at Quality Workwear (cutter/marker, then production planning and analysis), and the Cape Town T-Shirt Company (production manager). When Impahla bought out the assets of the Cape Town T-Shirt Company in 2004, Lena was offered a 10% share in the ownership of the company in exchange for her commitment to becoming Impahla’s production director. Lena is fluent in four languages – english, Afrikaans, Xhosa and Zulu – an immense asset in a multicultural work environment. Lena’s primary responsibility is the management of the shop-floor team, including all aspects of production, including scheduling, workplace efficiency and quality control.

16 IMpaHla ClotHIng

overview oF Material issues


oveRview of MAteRiAl iSSUeS

18 IMpaHla ClotHIng

a BrIeF SuMMary

The following table summarises the most important issues facing Impahla as it seeks a sustainable future for all its stakeholders. Considering this is an integrated report, the list of issues has developed to now include issues of both a financial and non-financial nature. While there isn’t necessarily a rating of relative importance, the issues have been categorised in two levels, and the order in which they appear gives an indication of relative importance.


PerforMAnCe tArgetS/ACtionS

Meeting, going beyond standards

● page 24

● The efficiencies in terms of monitoring and tracking products has allowed Impahla to manage its production, stock levels and shrinkage levels

● maintained zero tolerance delivery and quality performance since november 2010

● Implement ISo 9001 across all divisions by December 2013

● Zero tolerance for late deliveries ● Zero tolerance quality related returns ● Fully implement Styleman software to

allow for reporting on internal repair rate, stock rate and shrinkage rate by February 2014

● Target – 100% accuracy and a 3% internal repair rate

Strengthening the supply chain

● page 24

● embroidery – vertically integrated by purchasing 100% of primi ‘embroidery’

● ‘embroidery’ sales contributed 1.22% to the Impahla’s revenue for 2012/2013 (operating for nine months of the year)

● Rebate store – achieved 100% ● Sublimation – own 100% ● Cotton fabric manufacturing – vertically integrated by purchasing 100%

of ‘fabrics’ manufacturing (Tomotex) ● ‘Fabrics’ sales contributed 9.52% to Impahla’s revenue in 2012/2013

(operating for seven months of the year) ● purchase equipment to manufacture socks ● ‘Sock’ sales contributed 4.73% to the Impahla’s revenue in 2012/2013

(operating for three months of the year) ● Screen-printing and heat transfers – own 100% ● Two new sewing lines set up at epping plant to manufacture cotton

apparel

● Set up a dye house by February 2014 ● Double sublimation capacity by July 2013 ● Increase printing capacity by 33% by

november 2013

Staying with technology ● page 25

● Total plant and machine capital expenditure of R6.6 million, spent on improving technology and in-house manufacturing capabilities

● Investigate new manufacturing and production techniques by visiting international pUmA sites

● Transition into quick turnaround program for pUmA called Kit Creator reducing lead time to market

● Finalise the implementation for a forward integration move into retail

Responsibility and PUMA’s Code of Conduct

● page 26

● maintained A level pUmA S.A.F.e. classification for maitland plant with scores of 96.54%

● obtaining a B- rating at epping and elsies River plants with scores of 89.04% and 86.07% respectively

● Achieve A rating at epping and elsies River plants at next puma audit, February 2015

Extending our responsibility in the supply chain

● page 26

● All suppliers have copy of pUmA S.A.F.e. pocket guide ● Compiled and sent out S.A.F.e. email survey to monitor supplier

compliance ● Five suppliers have undergone a voluntary survey in line with pUmA

S.A.F.e. guide

● Implement Impahla’s code of conduct in all suppliers by February 2014

● engage more suppliers through supplier survey

● encourage suppliers to follow similar sustainability path and explain why it is important

● Improve B-BBee procurement rating figures

Servicing Impahla’s customers



Employee engagement ● page 28

● Total number of employees increased by 74% from 234 to 405 during 2012/2013 ● Unionised members number 367 or 93% of the workforce ● non-management employees are member of SACTWU ● no industrial action ● no recorded CCmA cases ● employee turnover (minus absconds) has decreased from 53% to 24% during

2012/2013

● embed culture to new employees

Skills and career development

● page 28

● Total training and welfare spend increased by 40% ● Training on ‘money matters’ for all employees from September 2012. This course has a

SeTA priority rating of 15 ● Implemented 17 one-on-one coaching sessions, supervisory training sessions and

labour relations coaching sessions for supervisors throughout the year ● Sent seven individuals on First Aid Courses, each with a SeTA priority rating of 7 ● participated in Clotex Cluster training to strengthen the sustainable competitive

positioning of Smme manufacturers in the sector

● Secure SeTA funding for four supervisors to partake in a six-month training course at Western Cape Learnership Centre by December 2013

● Fund an employee for 2013/2014 to complete a second year in pattern development through Cape peninsula University of Technology (CpUT)

Absenteeism and late arrivals

● page 29

● Total lost time (TLT) increased to 2.2% from 2.1% in 2011/2012

● Total absenteeism increased from 1.4% to 1.5%

● Late arrivals remained stable at 0.7%

● Absenteeism bonus: average payout reduced to R525 (-33%) per employee from R778

● Decrease TLT ratio to less than 2% in 2013/14

Health and Safety ● page 29

● Total Injury Frequency Rate (TIFR) reduced to 13.52 with only 45 injuries reported ● Improve TIFR to below 10 by February 2014

the people


Measuring gross margin, managing efficiency

● page 31

● gross margin up from 34% to 35% ● maintain gross margin at 35%

Minimising costs, maximising working capital

● page 32

● operating profit increased 44% ● Working capital movements improved for a net gain of 11%

● Achieve 40 days on creditors and debtors payment control

● maintain a 90-day stock holding period

Developing management capacity

● page 32

● 11 employees were promoted during 2012/2013 ● Turnover of management staff remains at zero

● maintain promotion from within policy

Developing HR capacity and other resources

● page 32

● net increase in employees of 73% (405:2012; 234:2011) ● Resignations have reduced to 6.84% down from 7.6% for 2012/2013

● Reduce resignations to 5%

Financing of growth ● page 32

of R7.6 million assets purchased:

● R5.3 million financed from existing cash flow ● Cash and cash equivalents reduced by 27% from R2.6 million to R1.9 million ● Reduced directors’ loans by 58%

● Application has been submitted to IDC for funding of dye house to further control supply chain

Managing growth

20 IMpaHla ClotHIng


Carbon footprint ● page 36

Carbon footprint:

● Total carbon emissions per employee hour decreased by 26% in maitland plant ● Funded the planting of 1 492 trees by Food and Trees for Africa and increase of

130%

● generate 25% of maitland plant’s electricity for 2013/2014

● Investigate renewable energy sources for epping and elsies River plants

Electricity and solar power

● page 36

● Installed 30 kWp solar photovoltaic (pV) plant in February 2012, and has since saved 23% of electricity usage in maitland plant

● Carbon emissions from electricity consumption decreased by 24% at maitland plant

● expect further savings from solar pV plant

Fuel ● page 37

● petrol used per employee hour has decreased by 7% at maitland plant ● Diesel used per employee hour has increased by 76% at maitland plant

● Will begin benchmarking against peers when such industry data becomes available – still outstanding from 2012

Travel ● page 37

● Carbon emissions emitted from travel increased by 2.6% ● Will begin benchmarking against peers when such industry data becomes available – still outstanding from 2012

Water ● page 37

● Water usage dropped by 14% at maitland plant ● Will begin benchmarking against peers when such industry data becomes available – still outstanding from 2012

Waste ● page 37

Records are for August 2012 to February 2013. Actual total tonnes of recycled material per category:

● Cardboard cartons: 2.18 tonnes ● Cardboard tubing: 0.62 tonnes ● plastic filings: 0.70 tonnes ● paper ex sublimation: 2.70 tonnes ● yarn cones: 0.05 tonnes

● Appoint a partner organisation to handle waste material by July 2013

environmental protection



Return on shareholder investment

● page 33

● npBT increased 41% ● npAT increased 62% ● Accumulated profit increased 63% ● After tax return on investment has increased by 2%

● no goals or targets until acquisitions bedded down

Remuneration and employment equity

● page 34

● profile: 86.7% female, down from 92.7% in 2011/2012 ● Coloured females at 58%; black females at 26% ● profile: 96.5% previously disadvantaged ● no disabled employees

● Continue to meet or exceed nBC rates

● Continue to engage employees

Equity in ownership and control of Impahla

● page 34

● Impahla 7.5% black owned ● Implement employee share ownership scheme by February 2015

External stakeholder equity

● page 35

● Level 7 B-BBee contributor ● Target to be a Level 5 contributor for ensuing year

Creating, sharing wealth


Cape town premier salutes a greener futureImpahla Clothing was privileged to have Helen Zille, premier of the Western Cape, attend the launch of Impahla’s solar energy system. A firm believer in renewable energies, premier Zille said during her speech that renewable energy was part of the new infrastructure and facilities in the Western Cape and, by 2014, 10% of the electricity used in the province will be generated from renewable sources. The Western Cape’s 2020 goal was that it should operate with modern energy systems, which were highly efficient and with a minimal carbon footprint.

Impahla’s solar energy system consists of 131 solar modules, supplied by Solarworld Africa and feeds into the electricity grid, which offsets consumption, thus reducing costs. The plant generates approximately 48 MWh/annum and should offset 1 150 tonnes of carbon over the lifetime of the system.

IMPA

HL

A CARBONNEUTRAL

22 IMpaHla ClotHIng

Material issues disCussed


MAteRiAl iSSUeS diSCUSSed

24 IMpaHla ClotHIng

of manufacture and delivery. Impahla has maintained a zero tolerance delivery and quality performance measure since 2010. For internal rework, see managing the gross margin, managing efficiency on page 31.

Impahla will continue to proactively engage with pUmA to ensure that production expectations do not exceed Impahla’s ability to deliver, or impede on the commitment to worker health and safety, including work-life balance.

Strengthening the supply chainThe quality, reliability and responsibility of the supply chain is so important for Impahla’s business that it took the decision to ‘vertically integrate’, i.e. control the supply chain through vertical, organic growth and/or buy businesses in the supply chain. This has become the key strategy to secure the future sustainability of Impahla. In order to implement this decision, Impahla made a key merger, a key acquisition and founded a new start-up during 2012/2013 financial year.

The first, an acquisition of the embroidery plant (primi) in maitland, took place in June of 2012. The acquisition enhances Impahla’s control over its manufacturing process, as the embroidery aspect was partly outsourced to external vendors. With the acquisition of primi, the embroidery accounts for almost 2% of Impahla’s current top line.

The second, a merger with a cotton fabrics manufacturing plant (Tomotex) in epping, was completed in order to increase Impahla’s competiveness with respect to the cotton knit business, specifically in the face of strong competition from mauritius. With the merger complete in August of 2012, Impahla is now able to run smaller manufacturing quantities as well as carry various stock options that the firm could not do before. The merger brought along with it two new equity owners in Sean Thompson and Kevin Alberts. The revenue contribution of the products from the new plant accounts for nearly 10% of Impahla’s top line from seven months of operations.

The third, a new start-up of a socks

over the past eight years, pUmA’s share of the total number of products shipped to customers grew steadily from 62% in 2006 to effectively 100% in the 2011/12 financial year. part of this growth resulted from the improved sustainability performance, justifying pUmA’s decisions to channel orders to Impahla instead of the Far east. For pUmA, Impahla has become both more competitive and more sustainable.

In 2012/2013, Impahla inherited new clients as a product of vertical integration. The commitment to pUmA, however, has remained unaltered despite the fact that Impahla is in a position where its customer base has increased to 124. In 2012/2013, the pUmA account contributed 86.38% (down from 100% in 2012) to total revenue, with the remaining customer base contributing the balance of 13.62%.

As Impahla’s focus is on manufacturing and delivery, the firm does not have a marketing department, but relies completely on pUmA and its highly sophisticated market research and analysis team to meet new consumer trends. Impahla is confident in pUmA’s marketing expertise. Impahla’s expertise lies in taking pUmA’s designs and converting these to excellent quality products.

ServICIng IMpahla’S CuStoMerS


Meeting, going beyond standardsThe goal is always to produce top quality products on time and on budget. From cutting, printing and embroidery, through to assembly, fabrics, socks and finishing, Impahla strives to achieve the highest standards as a supplier of quality products manufacturing and branding services.

As a condition of the ongoing relationship with pUmA, Impahla must consistently adhere to its strict controls over quality, timeliness of deliveries, as well as its benchmarks in terms of Social Accountability and Fundamental environmental Standards, also known as S.A.F.e. In enforcing these standards, pUmA undertakes frequent contractor compliance audits at Impahla’s operations, and offers comprehensive feedback on how well the firm meets pUmA’s expectations.

In previous years, Impahla reported ongoing issues with late delivery. In response, the firm purchased a production planning system, Fast React, with a software program called Styleman that tracks production through barcode-tracking technology. The Styleman software was implemented in 2012/2013, and it has been running for the last seven months. The technology has enabled Impahla to increase efficiency through management of operations. Impahla is now able to track production accurately on an hourly, daily and weekly basis. Linked to this is the better control of stock and shrinkage levels, as well as the ability to manage theft. The major strength of the software is its ability to link production to specific operators on production lines, allowing Impahla to monitor the quality at the source of production, while simultaneously creating employee ‘ownership’ of production tasks. Furthermore, Styleman supports the change in incentive bonuses from individual to line performance, with a bonus of R50 per week per operator paid to employees on top performing lines for achieving their performance targets.

Using this technology, and with extensive collaboration with pUmA to ensure realistic achievement of the order pipeline, Impahla has dramatically improved the scheduling

Fulfilling customer demand for the highest quality product requires that both sides work hard at the relationship. in playing our part, we have identified five important issues:

● Meeting, going beyond standards

● Strengthening the supply chain

● Staying with technology ● Responsibility and PUMA’s

Code of Conduct ● Extending responsibility

through the supply chain


of the supply chain, including new machinery acquisitions, are discussed in various parts of this report: the managing director’s overview on page 8, as well as in the two sections that follow: ‘Staying with technology’ and ‘extending the responsibility in the supply chain’.

In the table below, the report describes the core functions in the supply chain and rates the extent to which Impahla is in control

manufacturing plant in elsies River, was implemented in order to enhance Impahla’s competitive advantage and product offering. The idea was pUmA’s brainchild and was an unexpected strategic move, taking place in november 2012. The revenue contribution of the products from the new plant accounts for nearly 5% of Impahla’s top line from three months of operations.

Specific aspects related to the strengthening

of this function and/or the steps the firm is taking to improve control.

Staying with technologynew technologies are constantly being developed to add value to products and processes in the textile industry, as well as to improve efficiencies. Impahla recognises that pursuing efficiency can come at a cost to job creation and seeks an appropriate balance that both empowers employees to work at a higher level of skill, as well as to produce more valuable product within the ever-tightening cost budgets dictated by the marketplace.

Impahla purchased a gerber cutting machine in 2011/2012 which it rolled out in the current financial year. The cutting machine enabled a transition from manual to an automated cutting process with additional benefits aligned to pattern and marker systems. The new machine minimises waste, improves accuracy and reduces the primary production bottleneck; that of cutting.

Impahla’s policy has been to acquire a range of operator-managed machines for all of the core assembly activities, and they have ensured that their cutters, machine operators and finishers are supplied with reliable, safe and appropriate machines that allow them to deliver against increasingly challenging targets. equally important, Impahla has always sought

Gaining control of our supply chain

fUnCtion StAtUS StePS We Are tAking

Embroidery – embellishment of logos on garments

own and control 100% of function

Complete

Rebate store – a regulated and controlled store for imported and duty-free fabric that is not available in South Africa

Complete authorisation from SARS

The rebate store has allowed Impahla to increase an international competitiveness in terms of fabric prices as it now enjoys a 22% reduction on cost of imported fabrics. This competitiveness gives Impahla the ability to create more jobs and to protect the safety of those jobs

Sublimation – the all-over printing of garments of franchise sport teams (a fast-growing market)


Complete

Cotton fabric manufacturing – knitting of cotton fabrics (preferably from the ‘Cotton made in Africa’ programme (a fair trade initiative) in order to control the supply of this crucial raw material

Complete

Screen-printing and heat transfers – addition of branding aspects on garments


Complete

Technical fabric importation – the importation of high-spec fabrics not available in South Africa

100% control of this function since 2008 in order to ensure compliance with pUmA’s fabric quality requirements

Complete

26 IMpaHla ClotHIng

to retain in-house competence in key functions. Finally, note needs to be made that all new sewing machines that Impahla purchases come with their own energy efficient drives, pre-installed.

recap of capital expenditure for 2011/12In the previous year, Impahla increased production floor space by 20% (about 300 m2) by renting a unit within the same complex and equipping the facility with the latest machinery (specialised sewing machines, industrial irons, stand-by cutting machines and tables, etc.) in order to meet growing demand for woven products sportswear from pUmA. Apart from the increase in floor space, Impahla has also made a number of significant investments, in all totalling R4.7 million (excluding the investment in solar-powered electricity generation).

Capital expenditure for 2012/2013The recent financial year brought with it an opportunity to improve on Impahla’s in-house manufacturing capabilities, specifically in line with the new acquisitions that were completed in terms of sublimation and printing. Impahla’s total plant and machinery capital expenditure for 2012/2013 was R6.6 million.

responsibility and puMa’s Code of ConductpUmA’s Code of Conduct expresses commitment to human rights and fair labour. The pUmA S.A.F.e. programme executes training and compliance along the lines of the principles of its Code of Conduct within the company’s workplace as well as its suppliers. In line with this, and to further show Impahla’s commitment to quality, the company has constructed its own Code of Conduct, which is shown on page 12.

Results from pUmA’s S.A.F.e. audits, conducted every second year, have been a helpful benchmark of performance in social, environmental and safety areas. Impahla is proud of its status as one of pUmA’s A-level suppliers, and remains committed to ensuring that it continues to meet this grade in the future. Despite the fact that the weightings of the scores have changed over

the last reporting period, with ‘Health and Safety’ weighted less and ‘environmental’ weighted more, Impahla still managed to reach an A level. The scores for the last three reporting periods are 96.54%, 98.02% and 95.29% respectively.

In order to ensure that the entire operation meets the desired benchmark, the epping and elsies River manufacturers underwent

their first initial pUmA S.A.F.e. audit this year, after which they both scored a respectable B-. The next audit will take place in February 2015.

extending our responsibility in the supply chainpUmA expects Impahla to take responsibility for the quality and responsibility of its supply chain. one area involves complying with pUmA standards on Restricted Substance Testing (RST). Impahla takes on this responsibility for all new components that go into the manufacturing process. For example, the company sends samples of new materials at its expense to nelson mandela Bay University (pe), the only accredited laboratory in South Africa, where they are screened for restricted substances before being taken up in the supply chain.

encouraging responsibilityImpahla has discussed the above concern with suppliers who cannot deliver reliably or responsibly, and the consequent strategy to control the supply chain. Impahla recognises that buying or supplanting the suppliers is not the only route. With encouragement, any of the suppliers ought to be able to improve their business


CoMPlIAnCE WITH PUMA’S CoDE oF ConDUCT

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Additional

environmental

health and safety

Social

fabricSocksClothingweight

13.641013.39

15

26.2026.9628.5730

44.2044.1247.9750

55

55


practices and join the supply chain in a mutually beneficial relationship.

Recognising its responsibility, Impahla has briefed all of its suppliers on pUmA S.A.F.e. Code of Conduct and each supplier has a copy of the pUmA S.A.F.E. Pocket Guide. Impahla follows up with sporadic requests for suppliers to report on their performance against the pUmA S.A.F.e. Code of Conduct. Until recently, Impahla has not had the buying power to persuade suppliers to improve their business practices.

In taking the next step in gaining control of its supply chain, or at least gaining assurance over the sustainability practices in its supply chain, Impahla sent out an email-based self-assessment questionnaire to every supplier requesting them to assess their operations against pUmA S.A.F.e. standards. This is intended to serve as a base-line indicator of suppliers’ commitment to sustainability and highlighted functional areas to which

Impahla, as a manufacturer and supply chain partner, could allocate resources in order to help suppliers better meet international benchmarks. As of 30 April (three weeks after sending out the survey), Impahla has received feedback from five suppliers. Though the results were mixed, the exercise afforded Impahla the ability to put a proverbial ‘stake in the ground’ with respect to current supplier performance. Impahla plans on taking the process further in 2013/2014, through more inclusive contact and interaction with the supply base.

local vs foreignWhile Impahla is committed to purchasing raw materials as well as outsourced services from local suppliers, where possible, the accompanying graph reveals the significant shift in its reliance on foreign versus local fabric. However, it needs to be stated that Impahla is buying foreign materials because they are not available locally. In some cases, pUmA might require a specific trim item (e.g. specialised zippers) that cannot be sourced in South Africa according to its standards. For example, pUmA strictly adheres to its restrictive substances policy, which effectively eliminates the possibility of procuring locally due to inadequate materials management at local manufacturers. The table below is an account of all of Impahla’s materials used, by source (local or foreign).

While this is an unfortunate trend, it does illustrate the basic principle of comparative advantage between trading nations. extraction, raw material processing, assembly and software all require different factors of production to be competitive. It is clear that in South Africa, Impahla can compete in garment assembly/manufacturing, but not in fabric manufacturing. This leads to a strong ratchet effect in this trend: customers, once having experienced better quality and value (from an imported fabric, for example), are not easily persuaded to return to a local offering.

given this reality, Impahla encourages the government to remove the duty on fabrics that are unavailable in South Africa. Impahla has taken the initiative through applying for, and being granted, a rebate store. Though the removal of such a duty will not reverse the reality that imported fabrics are better and in higher demand, punitive duties will, and do have a negative impact on the ability of garment manufacturers to compete fairly in the marketplace.

PRoPoRTIon oF FABRICS PRoCURED loCAlly

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

locally procured fabrics

2009201020112012/13

41%

36%

9%8.6%

28 IMpaHla ClotHIng


It is hard to emphasise how highly Impahla regards the entire employee team. Impahla’s success is entirely dependent on the efforts of each function performing in a tightly choreographed set of processes. Through the expansion, the same regard for the staff has been instilled in the operating environment at both the elsies River and epping plants. Impahla takes the staff management seriously, as small errors, minor staff dissention and poor plant management, are often the cause of steadily declining businesses.

employee engagementunion representationnon-management employees are members of the dominant relevant trade union in the garment manufacturing industry, the South African Clothing and Textiles Worker Union (SACTWU). over the year, no strikes or industrial actions occurred, and no days were lost due to union action. The true value of this relates both to Impahla’s productivity and profitability. Furthermore, the fact that 367 employees or 93% of the workforce is unionised makes the absence of industrial action a truly representative proxy for employee satisfaction. Impahla’s relationship with SACTWU is a positive one, where the union has been a useful partner in campaigns against HIV and Aids, TB and substance abuse. They implement ongoing HIV/Aids testing including poster campaigns and information sessions at Impahla’s operations.

direct employee engagementImpahla’s employees know that the five executive directors of the business are available for discussion on any subject at any time. each director is highly visible on the floor and their office doors are kept open to encourage easy communication. Impahla has a suggestion box at each facility and this does attract suggestions and issues from time to time. management responds through consultation and discussion, followed by a written note on the notice board recording the company’s decision. Impahla has not devised or implemented a formal employee engagement mechanism as yet. The company still uses a proxy measure, in the form of employee turnover, to gauge overall employee satisfaction.

a number of issues were raised by employees in the past:Delay clocking out – employees raised a concern that delays in the clocking out process could result in some not catching their transport home in the evenings. response – Scrutiny of the clocking out process showed that the total delay of five minutes could be reduced through introducing an orderly clocking out procedure. Employees now take turns to clock out first, by rotation of production lines. This issue has been further resolved by adding another clock.

Selling food on the premises – employees could not see why people couldn’t sell eatables at tea time and lunch time. response – Theft is a threat to the company. Considering losses from theft in previous years, Impahla has controlled access to its production areas. Unauthorised employees cannot be allowed to enter production facilities where they do not work. Employees can sell products to fellow employees, but must do so only outside the premises.

Why can’t operators do their own repairs? – If repairs are corrected by another person, then the operator will not learn from her mistakes.response – If a repair is picked up while the garment is still on the line, then the person concerned must fix it. If the garments are already off the line, the supervisor arranges for one or two people to make the repairs without penalty.

Giving a post to a newcomer – Some employees were concerned that a post was given to a newcomer, instead of appointing someone who has come a long way with the company.response – Impahla has always invited employees to apply for new posts. Unfortunately, the new post in question required specific skills and education not available in the company at the time.

Skills and career development Investment in training and skills development is a priority for Impahla Clothing. As such, the company has increased the amount of ‘in kind’ contributions for training to the value of R41 000. Impahla has supplemented this with an additional R78 786 in actual spending (up 40% from 2011/2012), creating an equivalent amount of R119 786 for skills and career development for 2002/2013. Consequently, per capita spending has increased by 25% or R60 per person. Impahla acknowledges the fact that the expenditure is on the low side. The reason for this is that the company does not train just for the sake of training. Impahla believes that spending on training needs to contribute to the bottom line of the firm.

The strategic training goal for 2012/2013 was to enable supervisors to come to terms with, and better manage, the expanding

the people

this report has already dealt with a number of key issues relating to how impahla treats its employees and how it creates the best environment for the most efficient production. Apart from the aforementioned, this section will report on four key issues:

● Employee engagement ● Skills and career

development ● Absenteeism and late

arrivals ● Health and safety


Impahla staff base. Impahla’s association with the Western Cape Clothing and Textile Service Centre (CLoTeX) provided various training opportunities for the company to manage the expansion. CLoTeX carried out a benchmarking exercise to measure Impahla’s overall competitiveness. This was accomplished through measuring Impahla along with an international sample of 47 firms during the last year. A summary of the results are presented in the graph.

In terms of human resources, Impahla was benchmarked on ease or difficulty of manpower recruitment, management style, learning methodologies, employee decision-making capacity, staff turnover, absenteeism and investment in training and development. Following these evaluations, Clotex identified key areas of performance improvements and provided in-house training to the senior staff.

As a result, Clotex implemented training courses on money management, first aid and labour relations. Both the money management and the first aid courses were registered as SeTA priority level 15 and 7 respectively. Impahla went further to focus on softer skills, developing supervisors through one-on-one coaching. The training was seen as an investment for Impahla that allowed the company to more effectively manage the pipeline of successful internal candidates.

absenteeism and late arrivalsLast year Impahla reported how closer monitoring of employees’ attendance as far back as 2007 had revealed the damaging impact on the business of absenteeism and late arrivals. employees need, and have the right, to take days off when illness or injury occurs. This is recorded as sick leave, for which the law allows 10 days per annum. However, Impahla also understands that many workers take excessive leave (referred to as absenteeism) for reasons other than illness: including such things as taking days off to do personal banking and shopping.

Time lost due to late arrivals is another indicator the firm identified. Back in 2007, more than 1.5% of total production potential was lost due to late arrivals, but this has been reduced to 0.7% for the last two years.

In order to reduce absenteeism and late arrivals, Impahla developed an incentive scheme to encourage employees to reduce unnecessary sick leave and to work full shifts. As of early 2005, each employee was offered an opportunity to receive a maximum of a R500 bonus every six months if they did not take any sick leave. For every day they take off, they lose R100 of the bonus, resulting in a R0 bonus for more than five days of sick leave taken. A similar incentive has been worked out for on-time arrival.

The accompanying graph indicates the bonuses Impahla has awarded from 2009 – 2013 shows that the Impahla team has excelled on both of these indicators. Despite a large increase in staffing figures (a 74% increase in total for 2012/2013), total absenteeism has increased only marginally from 1.4% to 1.5%. The impact of the increase in staff has had a negative effect on the absenteeism bonuses awarded for 2012/2013, because Impahla has not refined its measurement to exclude employees who worked for only part of a six-month period, and would therefore not be eligible for the incentive scheme. Impahla has, however, restated all figures in line with a new calculation formula. Due to the large increase in staff, the company now reports bonus figures on average staff per reporting period. Therefore the staff totals are calculated as follows: number of staff = (no. of staff at the beginning of reporting period + no. of staff at the end of reporting period)/2.

Impahla’s absenteeism and late arrivals sum to a total lost time (TLT) of 2.2% (up from 2.1% last year and 2.4% in 2010), but still remains well below the industry average of 6%. The firm aims to reach its target of obtaining a TLT ratio of less than or equal to 2% in the next reporting period.

Health and safetyImpahla aims to create a safe and secure environment for all of its employees. The company is mindful of the pressures that life places on its employees and this drives part of its pledge to create security, both physically and emotionally, for staff within the workplace. A second driver is mindfulness of health and safety risks and hazards. Impahla has developed and

international Benchmarkimpahla Score

Systems value4.6

Product development4.8

operations 3.8

Customer Management 4.4

human Resources 4.8

Planning and Control 4.8

1

0

2

3

4

5

IMPAHlA CoMPETIvEnESS vS InTERnATIonAl BEnCHMARk(A SURvEy By CloTEx)

IMPRovEMEnT In AvERAGE BonUSES

R0

R100

R200

R300

R400

R500

R600

R700

R800

Arrive-on-time bonus

Absenteeism bonus

2012/132011/122010/112009/10

R356

R442 R437

R774

R84R138

R114 R97

30 IMpaHla ClotHIng

implemented an occupational Health and Safety policy that sets out Impahla’s commitment to zero harm, including:

● The ongoing management and stocking of a first aid room, where treatment can be obtained for injuries, or where ill employees can lay down and rest when required.

● The conducting of monthly health and safety committee meetings, chaired by the health and safety manager (Joan Hughes) and/or the health and safety officers (Joyce Thebus, gail Arendse, merle Beckles, nick Jonker, Zinnia August and Desire Jacobs), and attended by managers, supervisors and shop stewards. The new inclusions are due to the new increase in staff.

● maitland, epping and elsies River plants each have their own health and safety committees. maitland plant’s committee has expanded in line with the number of new employees hired.

● posting of appropriate signs to direct every employee’s attention to emergency exits, hazards and policies and procedures for managing health and safety.

● The further training, development and testing of fire marshals, including the provision of well-maintained fire management equipment and the conducting of regular fire drills.

● Working in close co-operation with the national Bargaining Council for the Clothing manufacturing Industry, as well as SACTWU, to conduct HIV/Aids awareness campaigns at Impahla on a regular basis.

HIV/Aids has a concerning impact on the workforce, productivity and employee turnover. employees are heavily impacted by the pandemic, and Impahla’s productivity has been affected in the past. It is for this reason that Impahla urges its entire staff to take voluntary tests. many of the senior managers opt to be tested with the staff in order to set an example for other employees.

Taking the latter into consideration, Impahla works hard to create and maintain a work environment free from the potential for illness or injury for employees, clients and

affected neighbours. This year the safety measure, known as Total Injury Frequency Rate* or TIFR, improved to 13.52 (2011: 22.95). It is now officially Impahla’s best score, comfortably bettering the previous best in 2009 (TIFR: 20.05). Impahla attributes the minor injuries it suffered to the significant turnover it has had on the shop floor, and the related challenges of monitoring behaviour during periods of extensive on-the-job training (174 new recruits in 2012/13).

part of Impahla’s ongoing commitment to working in a safe and injury-free environment includes regular Hazard Identification and Risk Assessments (HIRA). In the most recent review, Impahla recorded the following risks and hazard incidents:

*The TIFR calculation was modified this year, causing a recalculation of the previous recorded figures. All figures from 2008 have been restated for comparability.

Impahla is able to verify the reporting of each incident through proper tracking and injury management. This injury management has caused the proportion of injuries as a percentage of staff to decrease significantly.

Risks and hazard incidents

2012/13 2011/12 2010 2009 2008

TIFR Score 13.52 22.95 22.42 20.05 29.61

Table of injuries recorded over the last three years

tifr SCore 2012/13 2011/12 2010/11 2009/10

needle pricks 14 14 14 14

Cuts and bruises 25 33 22 2

Slips and falls 0 1 3 3

Minor injuries 0 1 6 7

lifting sprains 0 0 0 2

Burns 6 1 0 0

Total 45 50 45 28



Impahla has shown rapid growth over the past year in consequence of its status as a World Cat Strategic Supplier to pUmA. As a result, an average month’s production was up 19.8%; the business reflecting a doubling in turnover every 24 months. The accompanying graph illustrates the rapid growth in Impahla’s business as well as the relative gross margin (gross profit over revenue) per year.

The decrease in gross margin in 2010 reflects the impact of the Blanks Branded programme. This programme lowered overall profit margins as Impahla was allowed to charge only for the value that it created within the branding process. The company had a lower margin contribution for this programme than for other manufacturing processes. In addition to this, the margin contribution was normally predefined. Therefore, the higher the blank proportion of revenue, the lower the gross margin. The graph shows that despite the financial constraints of the programme, Impahla has managed to recover its gross margin over the past two years.

Measuring the gross margin, managing efficiencyStarting at the top of the income statement, the first measure of the profitability of the business is the gross margin – the main contributors being fabrics, socks, trims, embellishments and employee costs. This year, Impahla’s gross margin improved from 34% in 2011/2012 to 35% in 2012/2013. This result is pleasing when we take into account

the 74% increase in staff, which is one of the largest cost drivers.

However, making a trading profit on each product order requires that Impahla achieves maximum production efficiency. production efficiency is dependent on the skill of the machinist, how industriously they utilise their time and how many repairs need to be made to the finished products. As discussed earlier, Impahla has adopted a zero tolerance policy in terms of quality and late deliveries. Therefore, each product has a time-based costing against which every operator is measured. This tracking software makes use of scanning technology and enables Impahla to track the workflow of every product. The transparency that this technology brings enables the firm to improve supervision levels and allows the accurate calculation of efficiency benchmarks and performance. Impahla also took this opportunity to revise the production bonus scheme such that bonuses accrue to an entire manufacturing line, rather than to individuals. The company hopes that individuals are encouraged to help each other to perform better, thus benefiting the whole team, and indeed the profitability of the business. The resultant zero tolerance production efficiency figures show that Impahla has made positive strides in terms of improving production efficiency.

ManagIng groWth

the most important issues we need to focus on in order to deal successfully with anticipated growth in demand from PUMA are:

● Measuring the gross margin, managing efficiency

● A culture to minimise costs ● Developing management

capacity ● Developing HR capacity ● Developing other resources ● Financing growth

GRoWTH In THE BUSInESS FRoM FInAnCIAl yEAR EnD

2009 To PRESEnT

0

10 000 000

20 000 000

30 000 000

40 000 000

50 000 000

60 000 000

70 000 000

value of sales

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Gross margin

2012/132011/12201020092008

R60 757 589

R38 023 500R29 120 779

R12 560 092

37%35%

R20 540 996

37%28% 34%

MaJor eVentS and SportS FranCHISeS IMpaHla Supply

● 2013 CAf African Cup of nations replica kit for national soccer teams representing Ghana, ivory Coast and South Africa.

● South African national soccer team, Bafana Bafana, full sporting kit for players and replica supporters’ jerseys.

● PSl team full sporting players’ kit and replica supporters’ kit for Moroka Swallows and Jomo Cosmos.

● Super Rugby and Currie Cup full sporting rugby kit for players and replica supporters jerseys for the vodacom Blue Bulls (including the new very Berry line), the free State Cheetahs and eastern Cape Southern Kings.

● full sporting kit for PUMA-sponsored schools – Paul Roos Gymnasium, Paarl Gymnasium, Glenwood high School and Monument high School.

● University of Cape town rugby kit.

● eerste Rivier Rugby Club full kit sponsorship at the recommendation of the western Province Rugby Union.

32 IMpaHla ClotHIng

Minimising costs, maximising working capital Cost management is a philosophy at Impahla, and is set by example at leadership level. each function in the business continuously looks out for small areas of savings, from stationery to delivery routes. This builds a habit of frugality and eventually leads to reduced overheads. All purchases have to be well motivated and signed off by the mD. As a result, this year Impahla increased its operating profit by 44% from 2011/2012.

The management of working capital is vital to cash flow as well as to smooth operations. Impahla has improved its working capital with a net gain of 11%, with the positive management of inventories more than offsetting its increase in accounts receivable. Furthermore, the accounts payable has vastly reduced over 2012/2013 as Impahla aims to pay its creditors timeously on agreed terms.

developing management capacityThe increase in staff from 234 to 405 over the last year has resulted in a growing challenge to the sustainability of the business, specifically in terms of pressures on senior management. As a result, the skills and number of the supervisory employees were highlighted as an area of improvement. The discussion on the CLoTeX cluster dealt with skills development, while internal promotions dealt with the pressures on the small number of managers. In order to alleviate this pressure and develop management capacity for taking the business forward, Impahla hired and promoted 15 staff members to a number of key positions. See table above.

As evidenced by the high proportion of internal promotions listed above, Impahla’s policy is to develop management capacity from within its staff. Impahla has been delighted by the rapid development in skills and responsibility levels shown by key individuals, and believe that career development within the company also grows loyalty to the company. Turnover of management staff (supervisor and above) compared with line staff reflects this.

Furthermore, the workforce comprises 100% permanently employed staff, with no relief or temporary staff resources in use.

developing Hr capacity and other resourcesThe 237% increase in the number of products manufactured this year, as well as the acquisitions of the epping and elsies River plants, has required that Impahla hire, train and absorb an additional 171 (2010:116) new employees for a net increase of 73% in the total number of employees working for Impahla.

employee turnover has decreased from 53% to 24% for the 2012/2013 year*. This figure includes ‘absconds’, i.e. those new recruits who left the business shortly after joining. As the absconds figure influences this metric, it is worth reporting that the number of absconds has decreased by 42% from 56 to 32 during 2012/2013. Considering how vital this relationship testing/building period is for establishing the team that will remain for the long haul, Impahla also keeps a close eye on resignations, i.e. long-term employees who leave the company. Resignations have decreased from 18 to 16 (a net reduction of 11.11%) for the 2012/2013 year which, Impahla believes, bodes well for its relationship with long-term employees.

Impahla realises that it needs to continually improve retention of employees who have already passed the initial probationary phase

with the company. Certainly, the technical ability of the people it employs is good. Impahla looks for multidisciplined people, capable of working on different lines, as the work demands. This aspect is a key strategy that the firm believes greatly improves its ability to deal with peaks and troughs in demand. If there is excess capacity on one line, operators can be redeployed. Impahla is fortunate not to have had to put any employees on short time since the business start-up around nine years ago.

*These figures have been restated from the previous report, using the following calculation: turnover = (no. of employees that left Impahla/((no. of employees at the beginning of the year + no. of employees at the end of the year)/2)) x 100.

Financing of growthIn the 12 months under review, Impahla purchased assets to the value of R7.6 million. This was as a result of the strategic move to vertically integrate throughout the supply chain as well as Impahla’s desire to increase its technological and productive competitiveness and efficiency. of this total, R5.3 million was financed from existing cash flow, and the balance was as a result of a dual agreement between a loan from a shareholder and a share transfer. As noted earlier, cash and cash equivalents have consequently been reduced by 27% from R2.6 million to R1.9 million. Furthermore, Impahla has managed to significantly reduce its directors’ loans by 58% since 2011/2012.

Promotions

nAMe job deSCriPtionRokea Adams examiner to in-line examiner

Edwina Petersen examiner to in-line examiner

nicoleen Tobias examiner to in-line examiner, to QC auditor

Elrisa Gasment general worker to in-line quality controller

Shanaz Boltman machinist to in-line examiner

Anne Hooker machinist to supervisor

Susan de Bruyn machinists to supervisor

Alethea Barnett packer to supervisor

Catherine Williams examiner to supervisor

lydia Makalima QC manager to production manager

Enricel van Schalkwyk, Quality auditor to QC manager

Recardo Dietricks Trainee to machine mechanic

karen Pypers machinist to in-line examiner

Anthea Diamond I-Cat systems operator to production planning

Dendoline Solomons embroidery cleaner to in-line quality controller



In this section, the report examines the financial viability of Impahla Clothing as a business. Impahla quantifies and analyses the economic value it is adding, first and foremost for its shareholders, then for its internal stakeholders (i.e. its employees), and then for its external stakeholders – its suppliers and the broader economic community.

Impahla Clothing is an integrated business consisting of Apparel, Blanks branded and printing, embroidery services, Socks and Fabrics. measured at the gross profit level (i.e. after cost of sales subtracted from gross revenue), the company grew its business by 64% in the year under review (2012/2013: R21 million; 2011/2012: R12.9 million). The vertically integrated expansion of the company has diversified its revenue stream, which has also fuelled growth. The revenue streams for 2012/2013 can be segmented as seen in the graph above.

The graph shows the increase in the size of the business and how this value, received from multiple customer and suppliers, has been distributed to the most important stakeholders in the business.

For further detail on the financial performance, see the financial statements beginning on page 53.

return on shareholder investmentover this past year, Impahla increased its property, plant and equipment, by 80%, from R5.4 million to R9.7 million. The company returned a net profit after interest and tax of R4.3 million, representing a return on investment of 44% in 2012/2013, an increase of 2% for the most recent financial year.

Clothing industry and the nBCAs in previous years, foreign-owned factories in the newcastle area of KwaZulu-natal (KZn) are challenging the wage rates set by the national Bargaining Council (nBC). Where Impahla is subject to minimum wages that exceed R833 per week for machinists, the newcastle operators are threatening to relocate jobs out of South Africa if they cannot be permitted to pay less than R350 per week. Their argument is that by placing factories in more rural areas,

they should be allowed to pay substandard wages, regardless of whether or not their wage rates can be viewed as a living wage.

In a further development, an agreement was reached in the Western Cape in 2011 whereby clothing and textile manufacturers would be permitted to pay below nBC rates when taking on new and inexperienced staff.

As discussed in the mD’s overview on page 8, Impahla Clothing is committed to paying nBC rates. To show Impahla’s commitment, the expenditure on this topic has increased by 41% for 2012/2013. Impahla urges retail buyers to consider human rights issues when making their buying decisions, and further urges the clothing industry to look to their own business practices. experience would indicate that behaving responsibly also brings efficiencies and opportunities to do business with world-class and international organisations.

CreatIng and SharIng eConoMIC value

impahla has identified five key issues to focus on as it seeks to improve the equitable distribution of wealth to its internal and external stakeholders:

● Return on shareholder investment

● Clothing industry and the nBC

● Remuneration and employment equity

● Equity in ownership and control of Impahla

● External stakeholder equity

SEGMEnTATIon oF REvEnUE FoR 2012/13

DISTRIBUTIon oF vAlUE FoR 2012/13

embroidery

Collars and trims (7-month contribution)

Socks (3-month contribution)

Blank garments

fabrics (7-month contribution)

Printing and embroidery (9-month contribution)

Apparel

1%

2%

5%

9%

10%

12%

61%

R0

R10 000 000

R20 000 000

R30 000 000

R40 000 000

R50 000 000

R60 000 000

R70 000 000

Retained earnings

Shareholders

Government (tax)

executive directors

employees (excl. directors)

landlord

external suppliers

2012/20132011/20122010/2011

7.0%

0.0%

1.4%

0.4%

3.9%

28.0%

4.3%

55.0%

2012/13

34 IMpaHla ClotHIng

Impahla will continue to uphold the pUmA S.A.F.e. Code of Conduct specifically relating to human rights as related to employment practices, and lobby for industry to become more responsible, both on the supply and demand sides. The company will also continue to use this report as an awareness-raising tool on this topic for other members throughout the value chain.

remuneration and employment equity South Africa has one of the highest gini Coefficients in the world, meaning that there is an unsustainably wide gap between the ‘haves’ and the ‘have nots’. The first arbiter of economic equity is the marketplace and Impahla has little room to bargain for the price received, considering heavy competition from low-wage paying manufacturing regions.

nonetheless, Impahla’s remuneration packages, including salary, bonuses and incentives, are above average for the industry, and the company is registered with industrial councils and all other statutory bodies. While wages are established by the national Bargaining Council (nBC) for the clothing industry, Impahla has actively pursued bonus systems and other forms of non-financial reward. non-director employee salary and wages increased by 75.4% from R9.5 million in 2011/2012 to R16.8 million in 2012/2013. This increase is higher than the 73% increase in staff for the year, which shows a general tendency towards increasing value disseminated to employees. Furthermore, Impahla’s top management earn 15% of the total wages, while middle management earns 11%. The balance is disseminated to the rest of the workforce.

every employee has an opportunity to earn the right to improve their income potential through personal development, commitment to the Impahla team, and a demonstration of leadership potential. Although Impahla has had to employ talent from outside the company, one of company’s cornerstone policies is that of promoting from within, as described on page 32 under the section ‘Developing management capacity’.

Impahla’s team is made up of 86.7% females (2010: 90.6%) and 95.3% non-whites: both key performance indicators within the South African context. However, the company still has not had an opportunity to employ persons with disabilities. Impahla does not permit any form of discrimination against employees, including racism, sexual harassment or the discrimination of persons with any form of disability. Below is a graph denoting Impahla’s demographic breakdown, segmented by race and gender.

The overriding barrier to employment equity remains in the area of selection criteria. It is

essential that only suitably qualified skilled candidates are appointed. A shortage of skills in some population and gender groups limits the company’s opportunities to align with national demographics. Improvement is being seen in this area with the downsizing of the industry and therefore the availability of a greater pool of applicants, as well as through internal efforts to train and develop candidates with the potential to learn.

While Impahla alone cannot fix South Africa’s income disparity challenge, the company nonetheless commits to setting an example of employment equity and remuneration that will have a positive influence on the entire industry. Specifically, Impahla will continue to:

● ensure that wages, as set by the national Bargaining Council (nBC), and benefits, as negotiated by the Cape Clothing Association (CCA) and SACTWU, are met or exceeded throughout operations.

● enter into meaningful discussions with employees to ensure that matters affecting their own economic sustainability are considered whenever possible and necessary.

● ensure that performance bonuses and opportunities for additional work (i.e. overtime) are offered in a manner that ensures that the entire Impahla team has a reasonable opportunity to share in the company’s economic success.

● engage with pUmA to ensure that the true cost of production is factored into Impahla’s pricing negotiations, regardless of whether other manufacturers are less than committed to paying fair wages for similar work.

equity in ownership and control of ImpahlaDue to Impahla’s vertical integration during 2012/2013, the company has introduced two new equity owners, altering the ownership structure of the company. Figure 10 illustrates the current ownership split.

Impahla used to have a 10% black ownership and control through Lena Jansen, the production director. However, the percentage was diluted to 7.5% during the integration. Impahla recognises the need

DEMoGRAPHICS

Male vs female employee

Male demographics

femaleMale

13%

87%

ColouredBlackwhite

15%

20%

65%

Female demographics

ColouredBlackwhite

31%

68%

1%



to consider further empowerment of the historically disadvantaged, but the policy will always be to offer such opportunities to individuals who have a deep involvement and interest in the company.

Impahla has set a target of introducing an employee shareholding scheme for staff, especially for those who are prepared to live the values and take on the responsibilities of company ownership. This target due date is February 2014.

external stakeholder equityAccording to the dti’s framework for the Broad-based Black economic empowerment of the South African economy, companies are expected to assist in the empowerment of their business partners and the local community in which they have influence. This is defined by the dti as preferential procurement, enterprise development and socio-economic development.

Impahla measured its performance for the first time during 2012/2013, achieving a total score of 40.40%. This gives Impahla a total B-BBee rating of a level seven contributor. Impahla sees enterprise development and local procurement as the most needed areas of improvement, as its commitment to strengthening local suppliers is a key vision for Impahla. As a result, the firm aims to attain a level five score next year.

In terms of South African monitoring and evaluation norms, the clothing and textile manufacturing industry’s potential for negative environmental impact is considered moderate. Impahla therefore recognises its responsibility to monitor, manage and reduce its environmental impacts wherever and whenever possible.

oWnERSHIP AnD ConTRol oF IMPAHlA

Paul visser

lena Jansen

Shaun thompson

Kevin Alberts

Carl visserwilliam hughes

37.5%

22.5%

12.5%

12.5%

7.5%7.5%

36 IMpaHla ClotHIng

In terms of South African monitoring and evaluation norms, the clothing and textile manufacturing industry’s potential for negative environmental impact is considered moderate. Impahla therefore recognises its responsibility to monitor, manage and reduce its environmental impacts wherever and whenever possible.

Carbon footprintAlthough Impahla is a relatively small company, it believes it is within the scope of responsibility to monitor, manage and report on total carbon footprint in the form of the amount of carbon emitted into the atmosphere as a result of daily operations. Using a relatively simple methodology, Impahla has determined that its total carbon emissions for 2012/2013 (carbon dioxide equivalents or Co2e) is 550 tonnes (2011/2012: 232.4), an increase of 137%. However, Impahla has offset these carbon emissions through the planting of 1 492 trees (2011/2012:651 trees) by Food and Trees for Africa, an increase of 130%.

Factoring in the business expansion, Impahla decided to alter the consumption calculations, from per garment usage or per employee usage in terms of water, fuel, electricity and carbon emissions to that of employee hours worked. This allows the firm to take into consideration the changes in both size and number of products and the changes to the size of the workforce and to report in a comparable manner despite these changes. The following figures therefore illustrate the performance from 2011/2012 to the present and restate usage in terms of employee hours worked

(calculated as: usage/(number of employees x working days x 8.5)). Furthermore, Impahla has chosen to segment the reporting to increase comparability. Therefore this report shows the primary metrics in terms of the maitland plant only, with the elsies River and epping plants reporting metrics for the first time.

The graph shows that through the expansion, both in products produced and in additional staff, the carbon emissions per employee hour worked has decreased in the maitland plant by 26% despite an increase in emissions of 2%. However, as a whole, Impahla is less carbon efficient than it was last year. The reason for the reduction lies in increased vertical integration. This has reduced efficiencies in terms of carbon and electricity, specifically in the elsies

River and epping plants where products are manufactured from yarn – an energy-intensive process.

electricity and solar powerIn keeping with the company strategy to reduce its carbon footprint, Impahla installed a 30 kWp solar photovoltaic (pV) system, designed and installed by power Solutions during last year. The system consisted of 131 solar panels capturing energy from the sun and generating approximately 48 mWh/annum that is fed directly into the electricity grid, replacing approximately 25% of the demand. over the lifetime of the system, Impahla expects to offset some 1 150 tonnes of carbon.

The solar photovoltaic system is monitored and displayed in Impahla’s entrance foyer and can be viewed on the following link: http://www.sunnyportal.com. The project was funded through the IDC’s green energy efficiency Fund in line with its goal to reduce reliance on coastal-based electrical power and introduce environmentally-friendly production processes. The system has already made an impact on Impahla’s monthly electricity bills with a net saving of 23% of total electricity registered in the maitland plant.

Impahla’s electrical carbon emissions per employee hour worked for the maitland plant has improved by 24% despite a total increase in electricity usage of 4%. next year,

impahla identified five issues relating to environmental protection:

● Carbon footprint ● Electricity and solar power ● Fuel ● Travel ● Water ● Waste

envIronMental proteCtIon

Co2E ElECTRICITy InTEnSITy (MAITlAnD PlAnT only)

CARBon FooTPRInT InTEnSITy (MAITlAnD PlAnT only)

0

50 000

100 000

150 000

200 000

250 000

2011/12 2012/20130,0

0,1

0,2

0,3

0,4

0,5

Co2e per employee hour worked

Tota

l car

bon

emis

sion

s (k

g)

Carb

on u

sage

(kg)

per

em

ploy

ee h

our w

orke

d

0

50 000

100 000

150 000

200 000

250 000

2011/12 2012/20130,0

0,1

0,2

0,3

0,4

0,5

Co2e per employee hour worked

Tota

l el

ectr

icity

use

d (k

W)

Co2e

elec

tric

ity u

sage

(kg)

per

em

ploy

ee h

our w

orke

d


we will disclose our progress in performance for all the three major plants, maitland, elsies River and epping.

FuelImpahla reported consumption of 2 020 litres of petrol and 4 436 litres of diesel during its operations in 2012/2013. As a result of the expanding operations, the firm now measures an intensity ratio of litres of petrol and diesel per employee hour worked. Impahla monitors this as a measure of efficiency. During 2012/2013, diesel usage per employee hour at the maitland plant increased by 76%, while petrol usage per employee hour decreased by 7%.

travelThe total Co2e usage for travel increased to 5.50 tonnes from 5.36 tonnes during 2012/2013, representing an increase of 2%. However, considering that Impahla’s overall production tripled in scale, the efficiency metrics have increased by 69% in this regard.

WaterSouth Africa is undoubtedly a water-scarce economy, in that access to reliable supplies of potable water is not a given. As such, the water consumption is considered to be an ongoing management concern at Impahla. This year, Impahla recorded water efficiency of 3.12 litres of water per employee hour worked (2011/2012: 3.62 litres), yielding a 14% increase in efficiency in terms of water

usage for the maitland plant, despite an increase in water consumption of 18%. However, due to vertical integration, the elsies River plant does use disproportionately more water than any of the other sites, which Impahla aims to address in the upcoming year.

Wastenon-hazardous wasteFollowing up on Impahla’s commitment to reduce its overall volume of waste being sent for disposal at landfills, the firm has begun to implement a formal process to monitor and measure the volume (by weight) of materials it recycles on a monthly basis. The following results are presented for the time period August 2012 to February 2013:

iteM ACtUAl tonneS

Cardboard cartons 2.18

Cardboard tubing 0.62

plastic filings 0.70

paper ex sublimation 2.70

yarn cones 0.05

Hazardous waste

Although limited in total volumes consumed and/or disposed of, hazardous materials are often used in the manufacturing facilities, particularly in the maintenance and operation of the facilities and equipment.

Because the total volumes are extremely low, Impahla does not have formal systems or processes in place to monitor and measure the volume of hazardous materials consumed throughout its operations. However, the firm continues to monitor the way all solvents, lubricants and other hazardous materials are handled, stored and disposed of.

ongoing initiatives ● impahla monitors electricity

bills on a monthly basis. ● impahla maximises the use

of natural light through translucent roof sheeting to illuminate the factory floor and to provide natural heating during winter months, while employing large roller doors to create a cross-wind cooling effect in summer, thus reducing its reliance on electricity to create a favourable working environment.

● impahla uses energy-efficient light bulbs and fixtures in all areas where they could be used effectively.

● impahla uses low volume dual-flow toilets in all of its bathrooms.

● impahla uses only hot water (five-litre hot-water tanks) in each of the kitchens.

● impahla works in partnership with oasis – a Cape town-based nGo which employs mostly persons with mental disabilities – to recycle all plastics, paper and cardboard.

● impahla uses PUMA-approved Cht inks in all screen printing and heat transfer processes, and environmentally-friendly detergents (e.g. Cd11).

● independent water quality tests are conducted to ensure that waste water does not contain any harmful chemicals, and the water quality has been found to be safe for municipal discharge.

ToTAl WATER USAGE InTEnSITy (MAITlAnD PlAnT only)

0

420 000

840 000

1 260 000

1 680 000

2 100 000

2011/12 2012/20130

1

2

3

4

5

litres of water per employee hour worked

Tota

l w

ater

usg

ae (l

itres

)

litr

es o

f wat

er u

sed

per e

mpl

oyee

hou

r wor

ked

38 IMpaHla ClotHIng

tHe Heart oF iMPaHla


IMpahla ClothIng

IMpahla BrandIng

IMpahla FaBrICS

IMpahla SoCkS

IMpahla – our teaM

the heARt of iMPAhlA

40 IMpaHla ClotHIng


eMployeeS oF the Month – 2012

employee of the year Charmaine Barnett

employees of the monthJoanna everts (January)Faika Simons (February)Rene Williams (march) Rudolf (Dolfet) Hendricks (April)Fatiema nakerdien (may)Albertina Swartbooi (June) Katarina Rass (July)Christine Kalie (August)enricel van Schalkwyk (September)nomvuyo Qanda (october)mavis Kota (november)Anton Redelinghuys (December)

January February March

april May June

July august September

october november december


IMpahla ClothIng

HEAlTH AnD SAFETy oFFICERTop left: Joan Hughes.

CUTTInG RooMTop right: The cutting room team.

RECEPTIonIST/ClERkAbove: Bronwyn Varrie.

ADMInISTRATIonFrom left to right: Sandra Julius (clerk), Christopher Cornelius (warehouse supervisor), pamela ndongwane (accounts/creditors clerk), nick Jonker (Compliance officer), paul Leader (warehouse manager) and Anton Redelinghuys (operations manager).

WovEnSLeft: Hestel Appies, supervisor (in pink overall) and her team.

42 IMpaHla ClotHIng


IMpahla ClothIng continued

SoCCER SHIRTSAbove: Zoliswa Dyantyi, supervisor (in pink overall) and her team.

PUMA SHoP - By APPoInTMEnTAbove left : nicole van gemert (brand co-ordinator), runs the Impahla sports retail one-stop shop for anything relating to performance sport and left, Lee Ann Lenderts is the receptionist/clerk .

WovEnS Below: mirian mintoor, supervisor (in pink overall) and her team.


MECHAnICTop left: machine mechanic, Recardo Dietricks.

RUGBy jERSEySAbove: Christine Kalie, supervisor (in pink overall) and her team.

WovEnS Left: Ann Hocker, supervisor (in pink overall) and her team.

WovEnSBelow: Susan de Bruyn, supervisor (in pink overall) and her team.

44 IMpaHla ClotHIng

FInISHInGTop left: Charmaine Barnett, supervisor (in pink overall) and her team.

MECHAnICTop right: patrick Dukes, a machine mechanic.

EMBRoIDERyAbove: Team of embroiderers.

EPPInG PlAnT Above left and left: Sharon Weitz , supervisor (in pink overall) and her team, based in epping.


IMpahla ClothIng continued


WovEnSTop left: Francis enicker, supervisor (in pink overall) and her team.

ClEAnInGTop right: The cleaning team from back to front, noluthando nongolongolo, Constance Daniels, Virginia nondikho and Vela ngxalekana.

DEvEloPMEnTLeft: From left to right, Simbulele ntoto, micheal Kessler, Judith Heneke and garth marquard (manager).

FInISHInGBelow left: Catherine Williams, supervisor (in pink overall) and her finishing team.

46 IMpaHla ClotHIng

IMpahla BrandIng

EMBRoIDERyLeft: Supervisors, Desiree Jacobs (left) and merle Beckles (in pink overalls) and their embroidery team.

nIGHT SHIFT - ElSIES RIvERAbove: night shift team Akhona mdlungu (left) and Lorencia Lolwana (right) in sublimation at the elsies River plant.

SUBlIMATIonLeft: Supervisor, Keith young (centre) and his sublimation team Ishmail Spogter (left) and Kaylin Links (right).

SCREEn PRInTInGBelow: Supervisor, mogamat Jordaan (back row, standing) and his team of screen printers and heat pressers.



IMpahla SoCkS

knITTERS - TEAM AAbove left: Sock factory knitters.

SUPERvISoRS AnD QUAlITy ConTRolAbove: Left to right, Rachel Solomons (quality controller), portia Battis (pattern grader), Soraya mayet (production co-ordinator), Kelly Kabasele ngindu (quality controller), Lucille Alcaster (pattern grader) and grace van der Berg (production co-ordinator).

knITTERS - TEAM BLeft: Sock factory knitters.

lInkInG, PRESS AnD FInISHInGBelow left: The team of press, seaming and finishing workers at the epping plant.

48 IMpaHla ClotHIng


IMpahla SoCkS continued

PlAnnInG AnD PRoDUCTIon TEAMLeft: Shane majoor (production and design manager), yarn store attendants, gerald Beziudenhout and Shawahl moses, oswaldo Jonkers (yarn store supervisor) and Koos Jonker (production planner).

ADMInISTRATIon, DESIGn AnD DESPATCHBelow left: Left to right, moral Thompson (developer), Walter Horn (IT technician), natasha Abrahams (dispatch packer), Lara Kotze (dispatch supervisor), Lenei Brummer (general worker), David ntsinga and Sue-Ann Swartz (designer) for Impahla Socks.

knITTInG MECHAnICSBottom left: Left to right, machine mechanics, Alfred Leo, Ryno muller, martheunis Jefthas, Hamilton le Roux and patrick Roberts.


knITTInG - EPPInGLeft: From left, mariska Adonis, Keith Layman, mary Carelse, Adriana pick and kneeling, Karriem Heyns (knitting supervisor).

FInISHInGBelow left: Sharon Weitz’s finishing team, based in epping.

ADMInISTRATIon AnD GEnERAl WoRkERSBottom left: From left, philemon neri, Louise Adams, Keith Layman, Beko monde, Desmond Scheepers and sitting, Babalwa mtyingizane.

IMpahla FaBrICS

50 IMpaHla ClotHIng

aPPendiCes


APPendiCeS

52 IMpaHla ClotHIng


Spring Romance Properties 34 (PTY) LTD(reg. no. 2003/010692/07)

StateMent oF FInanCIal poSItIonfor the year ended 28 February 2013

notes 2013R

2012R

ASSETS

non-current assets

property, plant and equipment 2 9 716 240 5 393 704

Loans receivable 3 378 101 2 249 249

10 094 341 7 642 953

Current assets

Cash and cash equivalents 4 1 920 057 2 627 438

Inventories 5 17 577 626 16 607 638

Trade and other receivables 6 7 991 681 4 747 015

provisional tax paid 757 347 855 128

28 246 711 24 837 219

Total assets 38 341 052 32 480 172

EQUITy AnD lIABIlITIES

Capital and reserve

Share capital 7 200 100

Share premium 832 840 -

Accumulated profit/(loss) 10 590 383 6 244 314

11 423 423 6 244 414

non-current liabilities

non interest-bearing borrowings 8 139 139 328 732

Interest-bearing borrowings 9 2 974 108 2 638 100

3 113 247 2 966 832

Current liabilities

Trade and other payables 10 7 029 086 11 540 179

puma - Stock prepayments 15 154 214 10 524 987

Short-term portion of interest-bearing borrowings 9 750 000 161 900

provision for taxation 871 082 1 041 860

23 804 382 23 268 926

Total liabilities 26 917 629 26 235 758

Total equity and liabilities 38 341 052 32 480 172

54 IMpaHla ClotHIng

notes 2013R

2012R

gross revenues 60 757 597 38 023 500

Cost of sales (39 659 609) (25 133 472)

Gross profit 21 097 988 12 890 028

other income 1 240 699 101 154

operating expenses (17 000 954) (9 296 371)

operating profit/(loss) 11 5 337 733 3 694 811

Investment income 12 110 231 55 507

Finance costs 13 (228 226) (29 389)

net profit/(loss) before taxation 5 219 738 3 720 929

Taxation 14 (873 671) (1 041 860)

net profit/(loss) for year after taxation 4 346 067 2 679 069


StateMent oF CoMpreHenSIVe InCoMefor the year ended 28 February 2013


notes 2013R

2012R

Cash flows from operating activities

Cash generated by/(utilised in) operating activities 15 4 478 426 5 047 209

Interest received 110 231 55 507

Interest paid (228 226) (29 389)

Tax paid (946 668) (844 572)

net cash from operating activities 3 413 763 4 228 755

Cash flows from investing activities

Expenditure to maintain operating capacity

property, plant and equipment acquired (7 625 082) (4 742 141)

Disposal of property, plant and equipment 65 333 -

net cash used in investing activities (7 559 749) (4 742 141)

Cash flows from financial activities

Issue of share capital 100 -

Share premium introduced 832 840 -

Loans raised/(repaid) 2 605 663 104 352

Rounding difference 2 -

net cash (utilised)/generated by financing activities 3 438 605 104 352

Increase/(decrease) in cash and cash equivalents (707 381) (409 034)

Cash and cash equivalents at the beginning of the year 4 2 627 438 3 036 472

Cash and cash equivalents at end of the year 1 920 057 2 627 438

NB: Explanatory notes in the balance sheet, income and cash flow statements are available on request from the companies auditors and accountants, Marais & Vennote.


StateMent oF CaSH FloWSfor the year ended 28 February 2013

56 IMpaHla ClotHIng

Independent thIrd party aSSuranCe StateMent

to the directors and stakeholders of Impahla Clothing:

Integrated Reporting & Assurance Services (IRAS) was commissioned by Spring Romance properties 34 (pty) Ltd (trading as Impahla Clothing, hereafter Impahla) to provide independent third party assurance (ITpA) over the sustainability content within their 2013 Integrated Annual Report (the Report), covering the period 01 march 2012 to 28 February 2013. The assurance team consisted primarily of michael H. Rea, our Lead Certified Sustainability Assurance practitioner (CSAp), with more than 14 years’ experience in environmental and social performance measurement in over 65 assurance engagements in 16 countries, and Lauren Stirling, with more than two years’ experience, as well as by our team of junior associates.

accountability aa1000S (revised, 2008)To the best of our ability and significant experience in sustainability report assurance, this engagement has been managed in accordance with AccountAbility’s AA1000AS (2008) assurance standard, where the format of the engagement was structured to meet the AA1000AS Type I (moderate) requirements.

IndependenceIRAS has not been responsible for the preparation of the Report, nor has IRAS undertaken any commissions for Impahla in the past two years that would conflict with our independence. Responsibility for producing this report was the responsibility of Impahla. Thus IRAS is, and remains, an independent assurer over the content and processes pertaining to this Report. However, it should be noted that michael has had prior working knowledge of Impahla, through the authorship of their first four sustainability reports (prior to integrated reporting in 2012). Having sustained a two-year ‘cooling off period’, it is hereby asserted that IRAS is sufficiently independent of Impahla, and therefore an impartial assurance provider for this Report.

assurance objectivesThe objectives of the assurance process were to provide Impahla’s stakeholders an independent ‘moderate level assurance’ opinion on whether:

● The sustainability content within the Report adheres to the AA1000AS (2008) principles of inclusivity, Materiality and responsiveness;

● The sustainability content within the Report meets the global Reporting Initiative (gRI) g3 guidelines Application Level A reporting requirements; and,

● The Report meets reasonable expectations for integrated reporting, based on local and international standards and norms, including the extent to which Impahla provides adequate disclosure for key sustainability data points.

assurance approach and limitationsThe process used in arriving at this assurance statement is based on AccountAbility’s AA1000AS (2008) guidance, the gRI’s g3 Application Level requirements, as well as other best practices in sustainability reporting assurance. our approach to assurance included the following:

● A review of sustainability measurement and reporting procedures at Impahla’s offices to determine the context and content of sustainability management by the company;

● A review of Impahla’s information collation and reporting procedures to define the content of the Report by looking at the materiality of issues included in the Report, stakeholder engagement responses to issues identified, determination of sustainability context and coverage of material issues, ultimately leading to adherence to the AA1000AS principles of inclusivity, Materiality and responsiveness;

● Reviews of drafts of the Report for any significant errors, anomalies and/or insupportable assertions, as well as coverage of reasonably

expected sustainability data points (i.e. Sustainability Data Transparency); and,

● Reviews of drafts of the Report to confirm that the requisite number of gRI g3 indicators had been covered in the Report in order to meet the gRI’s g3 Application Level A requirements.

The assurance process was limited to content and assertions made within the Report for the period under review, and did not extend to a comprehensive analysis of the accuracy, consistency, completeness and/or reliability of the sustainability data presented. Rather, data was subjected to reasonability tests during our assurance processes, including reviews of drafts of the Report. The process was further limited to reviewing governance and stakeholder engagement procedures, and did not extend to the physical engagement of any stakeholders to arrive at our assurance opinion.

FindingsBased on our review of the Report, as well as the processes employed to collect and collate information reported herein, it is our assertion that:

● Impahla adequately adheres to the Accountability AA1000ApS principles of inclusivity, Materiality and responsiveness, although notably in the context of an owner-operated business. given that Impahla does not have formal Board and/or Committee structures, the management of risk, opportunity, and stakeholder engagement is informally structured around the roles and activities of the Directors, which is unlikely to be adequate as the company continues to expand.

● While the Report adequately meets the gRI’s g3 requirements for Application Level A, the reporting of performance against some indicators would benefit from improved data quality and/or further disclosure.

● As per IRAS’s own Sustainability Data Transparency Index, which has been applied for the first time, Impahla has scored well relative to all other JSe-listed


companies, indicating a commitment to ensuring that stakeholders have reasonable access to meaningful sustainability performance data. However, improvements can yet be made with respect to the collection, collation and reporting of data for several key sustainability performance indicators that have yet to be reported on.

Conclusions and recommendations ● Based on the information reviewed via desk research and management interviews, IRAS is

confident that Impahla’s 2013 Integrated Annual Report provides a balanced account of the company’s performance for the period under review. The information presented is based – with some exceptions, particularly with respect to materiality identification and stakeholder engagement – on systematic processes and we are satisfied that the reported sustainability information reasonably represents Impahla’s ability to report on its performance, while reasonably meeting the AA1000AS (2008) principles of inclusivity, Materiality and responsiveness. moreover, and although the quality of data of some gRI g3 indicators can be improved, this Report appears to meet the gRI g3’s requirements for Application Level A (A+ with this assurance engagement).

However, the following recommendations have been identified:

● Impahla should ensure that, as the company continues to expand beyond its current strength – including to multiple operational sites – formalised policies, procedures, systems and controls are put in place to identify, prioritise and manage the company’s most material issues, and the formal engagement of its most significant stakeholders (e.g. employees, unions, suppliers and other business partners). Ultimately, Impahla should ensure that Board meetings – or Director meetings – are convened in a structured format, and that records are kept to ensure that all material issues are managed and monitored effectively. This should include regular feedback on the outcomes of formal (and/or informal) stakeholder engagement interventions.

● Impahla should ensure that systems and controls, to the ultimate point of reporting, are improved to increase the extent to which reporting – inclusive of, but not limited to, the Integrated Annual Report – provides reasonable scope to provide stakeholders with improved comparable data for elements such as safety performance, employee turnover, and socioeconomic development expenditures.

For more information about the assurance process employed to assess the sustainability content within Impahla’s 2013 Integrated Annual Report, email [email protected].

Integrated Reporting & Assurance Services

21 may 2013Johannesburg

58 IMpaHla ClotHIng

We produced our first ever sustainability report in 2007 and our prior reports followed a progression from Application Level C+, to B+, to A+ in 2011, and A in 2012. This report achieves an A+ Application Level of the gRI’s g3.1 guidelines.

This report has been prepared in accordance with the principles of the g3.1 guidelines and draws on key principles of reporting as put forward by the International Integrated Reporting Council (IIRC). We include a comprehensive indicator-by-indicator discussion table of our report’s compliance to the required indicators on pages 59 - 68.

Best practice makes use of a combined assurance model which consists of three tiers: Reflecting materiality in company strategy, internal checks and balances and external assurance. our financial statements have been audited by our external auditors, marais & Vennote and prepared in accordance with International Standards on auditing. Their audit report and financial statements can be found on pages 52 – 55. This report is assured by Integrated Reporting Assurance Services (IRAS) and their statement of assurance can be found on page 56.

The Impahla Board acknowledges its responsibility to ensure the integrity of the integrated report and believes that it addresses all material issues, and presents fairly the integrated performance of the company.

grI g3 applICatIon – a+ level requIreMent


CoMprehenSIve grI g3 Content aSSeSSMent

Global Reporting Initiative (GRI) G3 Content AssessmentoK = no concerns; oI = opportunity for improvement; nC = not Covered

PRofile diSCloSURe deSCRiPtion RefeRenCe SeCtion exPlAnAtion A

STAnDARD DISCloSURES PART I: Profile Disclosures

1. Strategy and analysis1.1 Statement from the most senior decision-

maker of the organisation 8 - 9 Taking stock, looking

ahead no concerns. The managing director’s statement provides an overview of the company and its products. Industry-related matters, macro-economic issues, attitudes to stakeholders and a brief strategy overview are given. environmental indicators including targets are covered in Chapter three: environmental protection.

oK

1.2 Description of key impacts, risks, and opportunities.

8 - 9, 18 - 20

Taking stock, looking ahead; overview of material issues

no concerns. Social sustainability issues related to the national Bargaining Council and fair employee compensation are discussed. opportunities to control the supply chain have been outlined. Risks relate to global competition and the identification of material issues.

oK

2. organisational profile2.1 name of the organisation. BC Back cover no concerns. Spring Romance properties 34 (pty) Ltd

T/A Impahla Clothing.oK

2.2 primary brands, products and/or services. 8 - 9 Taking stock, looking ahead

no concerns. Impahla Clothing (Impahla) is a Cape Town-based company that manufactures clothing, garments, socks, collars and trims, fabrics and embroidery.

oK

2.3 operational structure of the organisation, including main divisions, operating companies, subsidiaries and joint ventures.

7, 13 organisational chart; ownership structure

no concerns. Impahla is a privately owned and operated clothing manufacturing company based in maitland, Cape Town, South Africa. An organisational chart provides a clear overview of the ownership and divisional structures.

oK

2.4 Location of organisation's headquarters. 1 Integrated annual report 2013

no concerns. Head office: Unit 10, maitland Business park, 1 mowbray Road, maitland 7405, Cape Town, South Africa.

oK

2.5 number of countries where the organisation operates, and names of countries with either major operations or that are specifically relevant to the sustainability issues covered in the report.

13 ownership structure no concerns. Impahla operates in Cape Town, South Africa.

oK

2.6 nature of ownership and legal form. 7, 13 organisational chart; ownership structure

no concerns. Impahla is a privately owned and operated clothing manufacturing company based in maitland, Cape Town, South Africa. An organisational chart provides a clear overview of the ownership and divisional structures.

oK

2.7 markets served (including geographic breakdown, sectors served and types of customers/beneficiaries).

9, 18, 31 Key product lines; Servicing Impahla’s customers; major events and sports franchises we supply

no concerns. Customers for key product lines are given. This includes puma and Truworths. The plan to diversify the customer base and be less reliant on puma is discussed.

oK

2.8 Scale of the reporting organisation. 6 - 13 Impahla at a glance no concerns. The scale of the organisation can be determined by the number of employees, product manufacturing and total revenue (by product category).

oK

2.9 Significant changes during the reporting period regarding size, structure or ownership.

2, 8 About this report – Scope and measurement information; Taking stock, looking ahead

no concerns. During the last year Impahla acquired one company, primi embroidery plant and new start-up of a sock manufacturing company, and merged with Tomotex, a cotton fabrics manufacturer. All of these have been done in order to help Impahla vertically integrate its supply chain.

oK

2.10 Awards received in the reporting period. n/A Comprehensive gRI g3 content assessment

no awards were received during reporting period. oK

Impahla Clothing Integrated annual report 2012/2013

60 IMpaHla ClotHIng



3. Report parameters3.1 Reporting period (e.g. fiscal/calendar year)

for information provided.FC Front cover no concerns. 1 march 2012 to 28 February 2013. oK

3.2 Date of most recent previous report (if any). 2 About this report – Scope and measurement information

no concerns. The reporting period for 2012/2013 runs from 1 march 2012 to 28 February 2013.

oK

3.3 Reporting cycle (annual, biennial, etc.) FC Front cover no concerns. Annual. oK3.4 Contact point for questions regarding the

report or its contents.1 Integrated annual report

2013no concerns. Contact: William Hughes, email: [email protected]

oK

3.5 process for defining report content. 9 Risk - identifying material issues

no concerns. material issues are defined and it is stated that gRI is used as a guideline for the report.

oK

3.6 Boundary of the report (e.g. countries, divisions, subsidiaries, leased facilities, joint ventures, suppliers). See gRI Boundary protocol for further guidance.

2 About this report – Scope and measurement information

no concerns. Impahla states the report covers all the operational entities owned, part-owned or leased by Impahla and its shareholders.

oK

3.7 State any specific limitations on the scope or boundary of the report (see completeness principle for explanation of scope).


no concerns. Impahla states the report covers all the operational entities owned, part-owned or leased by Impahla and its shareholders and furthermore states no related entities are excluded from this report.

oK

3.8 Basis for reporting on joint ventures, subsidiaries, leased facilities, outsourced operations, and other entities that can significantly affect comparability from period to period and/or between organisations.


no concerns. There are no joint ventures, subsidiaries or outsourced operators

oK

3.9 Data measurement techniques and the bases of calculations, including assumptions and techniques underlying estimations applied to the compilation of the indicators and other information in the report. explain any decisions not to apply, or to substantially diverge from, the gRI Indicator protocols.


no concerns. Data measurement techniques and the bases of calculations have been introduced in an About this report section and be expanded upon throughout the report in the relevant sections where measurements are used.

oK

3.10 explanation of the effect of any re-statements of information provided in earlier reports, and the reasons for such re-statement (e.g., mergers/acquisitions, change of base years/periods, nature of business, measurement methods).

2 About this report – Scope and measurement information; Throughout

no concerns. mergers and acquisitions have been clearly introduced and the effect of the mergers and acquisitions on the data has been discussed throughout.

oK

3.11 Significant changes from previous reporting periods in the scope, boundary or measurement methods applied in the report.


no concerns. Significant changes from previous reporting periods in the scope (sustainability topics), boundary (entities reported upon), or measurement methods applied in the report have been stated.

oK

3.12 Table identifying the location of the Standard Disclosures in the report.

59 - 68 Comprehensive gRI g3 content assessment

no concerns. Impahla has opted to provide a comprehensive indicator-by-indicator description of gRI compliance within this report.

oK

3.13 policy and current practice with regard to seeking external assurance for the report.

57 - 58 IRAS Assurance Statement

no concerns. The report has been independently assured by Integrated Reporting and Assurance Services

oK

4. Governance, commitments and engagement4.1 governance structure of the organisation,

including committees under the highest governance body responsible for specific tasks, such as setting strategy or organisational oversight.

13 - 15 governance and decision-making

no concerns. Responsibilities of the various directors are given showing responsibility for certain tasks. All decisions are made by the directorship with formal and informal meetings held weekly.

oK

4.2 Indicate whether the chair of the highest governance body is also an executive officer.

13 -15 ownership structure no concerns. not relevant in the context of Impahla due to the nature of the company’s private ownership.

oK

4.3 For organisations that have a unitary board structure, state the number of members of the highest governance body that are independent and/or non-executive members.

13 ownership structure no concerns. As Impahla is a privately held company with no minority shareholders, the independence of the directors does not come into question.

oK




4.4 mechanisms for shareholders and employees to provide recommendations or direction to the highest governance body.

28 employee engagement; Direct employee engagement

no concerns. Avenues to discuss issues with directors are discussed. Issues raised by employees in the past have also been listed.

oK

4.5 Linkage between compensation for members of the highest governance body, senior managers, and executives (including departure arrangements), and the organisation's performance (including social and environmental performance).

34 Remuneration and employment equity

opportunity for improvement. The percentage of the total wage package earned by top and middle management is given, but no specific mention is made of how this links to performance.

oI

4.6 processes in place for the highest governance body to ensure conflicts of interest are avoided.

13 governance and decision-making

no concerns. All of the directors have explicitly declared their business interests and are aware of the consequences of operating in conflict with the codes of the company.

oK

4.7 process for determining the qualifications and expertise of the members of the highest governance body for guiding the organisation's strategy on economic, environmental and social topics.

13 -15 governance and decision-making

no concerns. The profile of each owner is provided. oK

4.8 Internally developed statements of mission or values, codes of conduct and principles relevant to economic, environmental, and social performance and the status of their implementation.

12, 26 What Impahla stands for; Impahla's Code of Conduct; Responsibility to puma's Code of Conduct

no concerns. Impahla’s code of conduct is given as 13 key principles. The status of implementation is given.

oK

4.9 procedures of the highest governance body for overseeing the organisation's identification and management of economic, environmental and social performance, including relevant risks and opportunities and adherence or compliance with internationally agreed standards, codes of conduct and principles.

13, 18 - 20 governance and decision-making; A brief summary

no concerns. Various material issues are discussed and the management of these is stated.

oK

4.10 processes for evaluating the highest governance body's own performance, particularly with respect to economic, environmental and social performance.

28 Skills and career development

opportunity for improvement. Although Impahla is a small company with no board structure, this has to be stated. The Western Cape Clothing and Textile Service Centre (CLoTeX) carried out a benchmarking exercise to measure Impahla’s overall competitiveness during the expansion. This included an assessment of management style and listed key areas for performance improvements.

oI

4.11 explanation of whether and how the precautionary approach or principle is addressed by the organisation.

8 - 9 Taking stock, looking ahead

Impahla’s risk management processes are discussed throughout the report, particularly with respect to the management of the company’s material issues. However, no formal policy or procedure governs how we assess risk.

oI

4.12 externally developed economic, environmental and social charters, principles, or other initiatives to which the organisation subscribes or endorses.

35 external stakeholder equity

no concerns. Impahla adheres to the dti codes and gRI guidelines.

oK

4.13 memberships in associations (such as industry associations) and/or national/international advocacy organisations in which the organisation: * Has positions in governance bodies; * participates in projects or committees; * provides substantive funding beyond routine membership dues; or * Views membership as strategic.


no concerns. Impahla is a member of the national Bargaining Council and Cape Clothing Association.

oK

4.14 List of stakeholder groups engaged by the organisation.

9 Stakeholder matrix no concerns. Key stakeholders are tabulated with reference to where further detail can be provided in the report.

oK

4.15 Basis for identification and selection of stakeholders with whom to engage.

33 - 35 Creating and sharing economic value

needs improvement. The report identifies external and internal stakeholders. The organisation needs to outline for the reader how stakeholder groups for engagement are selected. A clear definition of what a stakeholder is for the company should be provided, bearing in mind that a stakeholder is anyone who affects or is affected by the company. The process for selecting which of these stakeholders to engage with (after their identification) should also be stated.

oI

62 IMpaHla ClotHIng



4.16 Approaches to stakeholder engagement, including frequency of engagement by type and by stakeholder group.

28 employee engagement opportunity for improvement. engagement process is described for employees but a formalised system has not yet been implemented. no formal procedures are in place for all stakeholders.

oI

4.17 Key topics and concerns that have been raised through stakeholder engagement, and how the organisation has responded to those key topics and concerns, including through its reporting.

28 employee engagement opportunity for improvement. Issues raised by employees and management’s response to these have been outlined. This needs to be done for all stakeholder groups.

oI

STAnDARD DISCloSURES PART II: Disclosures on Management Approach (DMA)

G3 DMADmA eC Disclosure on management Approach eC 33 - 34 Creating and sharing

economic valueno concerns. Strategic economic matters discussed in the mD's report further management disclosures are discussed in our managing growth and economic equity. management accounts derived from company bookkeeping and audited by external company auditors.

oK

DmA en Disclosure on management Approach en 36 - 37 environmental protection

no concerns. Impahla’s management approach to environment is provided.

oK

DmA LA Disclosure on management Approach LA 12, 28 - 30 What we stand for, The people

no concerns. Impahla’s management approach to employment and health and safety issues is provided.

oK

DmA HR Disclosure on management Approach HR 12, 28 - 30 What we stand for, The people

no concerns. Impahla’s management approach to HR is discussed and various human rights aspects discussed and Impahla’s code of conduct is provided, including freedom of bargaining and shop stewards are present at relevant meetings.

oK

DmA So Disclosure on management Approach So 35 external stakeholder equity

mention is made that Impahla is a Level 7 contributor to the B-BBee codes and has set a target to reach a Level 5 contributor by February 2014. more information could be provided with respect to the management of corruption and/or avoidance of anticompetitive behaviour.

oI

DmA pR Disclosure on management Approach pR 18 Servicing Impahla's customers

no concerns. Various aspects of products are discussed. product marketing is the responsibility of pUmA.

oK

STAnDARD DISCloSURES PART III: Performance Indicators

EconomiceC1 Direct economic value generated and

distributed, including revenues, operating costs, employee compensation, donations and other community investments, retained earnings, and payments to capital providers and governments.

33 Distribution of value no concerns. A value-added statement has been provided outlining how value is generated and distributed.

oK

eC2 Financial implications and other risks and opportunities for the organisation's activities due to climate change.

36 - 37 Carbon footprint; Comprehensive gRI g3 content assessment

no concerns. not discussed but climate change has influenced pUmA to encourage environmentally responsible business practices refer www.puma.com/sustainability. Impahla has benefited from this impact. Furthermore Impahla mentions reduction strategies on their carbon footprint.

oK

eC3 Coverage of the organisation's defined benefit plan obligations.


no concerns. Impahla is committed to paying full national Bargaining Council (nBC) rates. over and above this incentives are paid to improve efficiencies, as well as curb absenteeism and lateness. Impahla has actively pursued bonus systems and other forms of non-financial reward.

oK

eC4 Significant financial assistance received from government.

n/A Comprehensive gRI g3 content assessment

no concerns. production incentive grant of R1.08 million from the IDC of to improve productivity and create jobs.

oK

eC5 Range of ratios of standard entry level wage compared to local minimum wage at significant locations of operation.


no concerns. Impahla is committed to paying full national Bargaining Council (nBC) rates.

oK

eC6 policy, practice and proportion of spending on locally based suppliers at significant locations of operation.

26 extending our responsibility in the supply chain

no concerns. The report states Impahla’s commitment to local suppliers as well as its shift in reliance from foreign to local fabric.

oK




eC7 procedures for local hiring and proportion of senior management hired from the local community at significant locations of operation.

32 Developing management capacity

no concerns. Impahla promotes people internally where possible.

oK

eC8 Development and impact of infrastructure investments and services provided primarily for public benefit through commercial, in-kind, or pro bono engagement.

37 ongoing initiatives no concerns. Impahla mentions their pro bono contributions.

oK

eC9 Understanding and describing significant indirect economic impacts, including the extent of impacts.


opportunity for improvement. This is not explicitly stated, but it is clear from the report that Impahla has impacts on industry wages and negotiates with regard to import tariffs. The impact of this has not been stated.

oI

Environmentalen1 materials used by weight or volume. 25, 37 gaining control of our

supply chain; Waterno concerns. Impahla states its materials such as water used, garments produced in their organisation for their services or products.

oK

en2 percentage of materials used that are recycled input materials.


opportunity for improvement. packaging materials used are from recycled material but no policy in place to measure amount.

oI

en3 Direct energy consumption by primary energy source.

37 Fuel opportunity for improvement. Impahla states its fuel usage as litres of petrol and diesel consumed, but do not explicitly state the total direct energy consumption in gJ units.

oI

en4 Indirect energy consumption by primary source.

6, 36 Impahla at a glance; electricity and solar power

no concerns. Impahla discusses electricity reductions and the table on comparability data provides the total electricity usage (607586) in kW

oK

en5 energy saved due to conservation and efficiency improvements.

36 electricity and solar power

no concerns. Impahla states its ongoing initiatives to save energy.

oK

en6 Initiatives to provide energy-efficient or renewable energy based products and services, and reductions in energy requirements as a result of these initiatives.


no concerns. Impahla states its usage of solar power to save on energy and reduce carbon emissions.

oK

en7 Initiatives to reduce indirect energy consumption and reductions achieved.

37 ongoing initiatives no concerns. Impahla states its ongoing initiatives to save energy including indirect energy.

oK

en8 Total water withdrawal by source. 37 Water no concerns. Total water usage 2 246 kilolitres drawn from Cape Town municipality

oK

en9 Water sources significantly affected by withdrawal of water.


no concerns. Limited concern given that South Africa is a water scarce country. Cape Town municipality water comes primarily from the Western Cape’s network of dams in the catchment area.

oK

en10 percentage and total volume of water recycled and reused.


no concerns. no water is currently being recycled and/or re-used by Impahla

oK

en11 Location and size of land owned, leased, managed in, or adjacent to, protected areas and areas of high biodiversity value outside protected areas.


no concerns. All three Impahla plants are situated in municipality-zoned industrial areas and not in or adjacent to protected and/or high biodiversity areas.

oK

en12 Description of significant impacts of activities, products, and services on biodiversity in protected areas and areas of high biodiversity value outside protected areas.


no concerns. The operations of the company have no significant impact on biodiversity external to the company in protected areas and areas of high biodiversity value outside protected areas.

oK

en13 Habitats protected or restored. n/A Comprehensive gRI g3 content assessment

no concerns. not applicable in the context of Impahla, as all Impahla’s operations are based in established industrial areas within long-established areas of Cape Town zoned for industrial activity. Thus no habitats are to be protected and/or restored.

oK

en14 Strategies, current actions and future plans for managing impacts on biodiversity.


no concerns. not applicable in the context of Impahla, as all Impahla’s operations are based in established industrial areas within long-established areas of Cape Town zoned for industrial activity. Thus no future plans for managing impacts on biodiversity are in place.

oK

64 IMpaHla ClotHIng



en15 number of IUCn Red List species and national conservation list species with habitats in areas affected by operations, by level of extinction risk.


no concerns. not applicable in the context of Impahla, as all Impahla’s operations are based in established industrial areas within long-established areas of Cape Town zoned for industrial activity. Thus no IUCn Red List species and/or SA conservation list species are affected by Impahla’s operations.

oK

en16 Total direct and indirect greenhouse gas emissions by weight.

6, 36 - 37 Impahla at a glance; Carbon footprint; Travel

opportunity for improvement. Impahla states its total carbon emissions as 550 tonnes, this indicator requires the category of direct and indirect emissions by weight.

oK

en17 other relevant indirect greenhouse gas emissions by weight.

36 Carbon footprint opportunity for improvement. Impahla states its total carbon emissions as 550 tonnes and its Co2 for travel but does not categorise the scope therefore it is unclear which emissions are from scope 1,2 or 3.

oI

en18 Initiatives to reduce greenhouse gas emissions and reductions achieved.


no concerns. Impahla states they have installed a 30 kWp solar photovoltaic (pV) plan which they state over the lifetime of the system, they expect to offset some 1 150 tons of carbon further they reveal data on the reduction of emissions due to the plan.

oI

en19 emissions of ozone-depleting substances by weight.


no concerns. Impahla’s plants do not omit any ozone-depleting substances. Air cons are CFC free.

oK

en20 nox, Sox and other significant air emissions by type and weight.


no concerns. Impahla’s operations do not result in any nox, Sox and other significant air emissions.

oK

en21 Total water discharge by quality and destination.


no concerns. All of Impahla’s consumed water is discharged to the municipal reticulation system. Waste water from the cleaning of printing screens has been tested and deemed safe for discharge. Impahla uses pUmA-approved CHT inks in all of our screen-printing and heat transfer processes, and environmentally friendly detergents.

oK

en22 Total weight of waste by type and disposal method.

37 Waste opportunity for improvement. Impahla provides a table of the type of recycled waste and the weight. All waste types should be reported.

oI

en23 Total number and volume of significant spills.


no concerns. no significant spills have been recorded. Impahla does not handle harmful chemicals or other substances that might be deemed a concern. Vehicles are maintained by off-site service providers, and neither fuels nor oils are stored onsite. Lubricants for machinery are stored in limited quantities and have not been deemed a concern.

oK

en24 Weight of transported, imported, exported or treated waste deemed hazardous under the terms of the Basel Convention Annex I, II, III and VIII and percentage of transported waste shipped internationally.

37 Hazardous waste no concerns. Impahla states that the total volumes of hazardous waste are extremely low, they do not have formal systems or processes in place to monitor and measure the volume of hazardous materials consumed throughout our operations. However, we continue to monitor the way which all solvents, lubricants and other hazardous materials are handled, stored and disposed of. Though they do not explicitly state any transpiration of hazardous waste they do state their opinion and methods of handling hazardous waste.

oK

en25 Identity, size, protected status and biodiversity value of water bodies and related habitats significantly affected by the reporting organisation's discharges of water and runoff.


no concerns. Impahla’s operations are situated in industrial zoned areas, away from any protected areas and/or water bodies and related habitats. Discharges of water and runoff (e.g. rainwater) are not harmful, and are managed via municipal storm drains.

oK

en26 Initiatives to mitigate environmental impacts of products and services, and extent of impact mitigation.

37 ongoing initiatives no concerns. Although no investigations have been conducted to assess the environmental impacts of Impahla’s products, waste is now measured and partnerships are in place with oasis (to recycle waste materials) and with Food and Trees for Africa (to off-set carbon emissions through the planting of trees).

oI

en27 percentage of products sold and their packaging materials that are reclaimed by category.


no concerns. All hang tags and header cards used on products are manufactured from recycled cardboard. Total quantity has not been measured.

oI

en28 monetary value of significant fines and total number of non-monetary sanctions for non-compliance with environmental laws and regulations.


no concerns. Impahla has not been subject to any fines or non-monetary sanctions for non-compliance with any environmental laws or regulations.

oK




en29 Significant environmental impacts of transporting products and other goods and materials used for the organisation's operations, and transporting members of the workforce.


no concerns. Due to expanding operations Impahla now measures an intensity ratio of litres per employee hour worked and monitors this as a measure of efficiency. All Impahla’s deliveries are within the metropolitan areas and therefore there are no significant environmental impacts of transporting goods.

oK

en30 Total environmental protection expenditures and investments by type.


no concerns. In 2011/2012 report it was stated that an investment of R1.28 million was made in a photovoltaic system, which has seen a saving of 23% on electricity usage. no additional investment has been made, but will investigate renewable energy sources for the epping and elsies River plants.

oK

Social: labour practices and decent workLA1 Total workforce by employment type,

employment contract and region. 32 Developing

management capacity, Comprehensive gRI g3 content assessment

no concerns. 100% of the workforce is permanent. The total number of permanent employees is 405 and all are full-time employees working at three different plants - maitland 298, epping 48 and elsies River 59, all suburbs of Cape Town.

oK

LA2 Total number and rate of employee turnover by age group, gender and region.

6, 19, 32 Impahla at a glance; The people; Developing management capacity

opportunity for improvement. Data for total turnover, with a discussion on absconds has been reported additional information regarding employee turnover as a number and a rate by age group, gender and region has not been supplied.

oI

LA3 Benefits provided to full-time employees that are not provided to temporary or part-time employees, by major operations.


no concerns. Impahla does not employ any part-time employees.

oK

LA4 percentage of employees covered by collective bargaining agreements.

28 employee engagement no concerns. 367 employees or 93% of the workforce is unionised. The dominant relevant trade union in the garment manufacturing industry is the South African Clothing and Textiles Worker Union (SACTWU).

oK

LA5 minimum notice period's regarding significant operational changes, including whether it is specified in collective agreements.


no concerns. Through Impahla’s World Cat Strategic Supplier agreement with pUmA, minimum notice periods for production changes are clearly defined, albeit confidential in nature. With respect to employees, Impahla adheres to the notice period guidelines as defined within agreements established by both the nBC and SACTWU.

oK

LA6 percentage of total workforce represented in formal joint management-worker health and safety committees that help monitor and advise on occupational health and safety programmes.

29 - 30 Health and safety; Comprehensive gRI g3 content

no concerns. The health and safety committee and the members and attendees is provided. 100% of the workforce is represented.

oK

LA7 Rates of injury, occupational diseases, lost days, and absenteeism, and number of work-related fatalities by region.

6, 29 Impahla at a glance; Health and safety

no concerns. TRIFR and absenteeism data is provided, including trends and explanation of initiatives to improve this.

oK

LA8 education, training, counselling, prevention and risk-control programmes in place to assist workforce members, their families, or community members regarding serious diseases.

28 - 30 employee engagement no concerns. Impahla works in close co-operation with the national Bargaining Council for the Clothing manufacturing Industry, as well as SACTWU, to conduct HIV/Aids awareness campaigns at Impahla on a regular basis.

oK

LA9 Health and safety topics covered in formal agreements with trade unions.

29 - 30 Health and safety opportunity for improvement. Health and safety committee meetings are attended by shop stewards. Topics covered in formal agreements have not been discussed.

oI

LA10 Average hours of training per year per employee by employee category.

28 - 29 Skills and career development

opportunity for improvement. Impahla reports the amount spent on training, but the average hours of training per year per employee category should be reported.

oI

LA11 programmes for skills management and lifelong learning that support the continued employability of employees and assist them in managing career endings.

28 - 29 Skills and career development

opportunity for improvement. Impahla promotes from within and empowers employees with training. However there is no discussion on career endings for employees who are retiring, or who have been terminated; including job placement services, severance pay and assistance in transitioning to a non-working life.

oI

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LA12 percentage of employees receiving regular performance and career development reviews.

24, 34 meeting, going beyond standards; Remuneration and employment equity

opportunity for improvement. The report discusses incentive bonuses based on individual and line performance as well as performance bonuses, but does not explicitly state the process of reviews or give a percentage of employees receiving reviews.

oI

LA13 Composition of governance bodies and breakdown of employees per category according to gender, age group, minority group membership, and other indicators of diversity.

13 - 15, 34 ownership structure and director profiles; Remuneration and employment equity

opportunity for improvement. Demographic and gender data of employees has been tabulated, Age group data is lacking. The report states that Impahla has not had the opportunity to employ any persons with disabilities.

oI

LA14 Ratio of basic salary of men to women by employee category.


no concerns. Ratio of men to woman is 14% men : 86% women. employees are remunerated according to their skill ability and level of employment.

oK

Social: Human rights HR1 percentage and total number of significant

investment agreements that include human rights clauses or that have undergone human rights screening.


no concerns. Impahla does not have any investment agreements, and therefore does not have any relevant human rights clauses.

oK

HR2 percentage of significant suppliers and contractors that have undergone screening on human rights and actions taken.

26 Comprehensive gRI g3 content assessment

opportunity for improvement. As pUmA expects Impahla to take responsibility for the quality and responsibility of its supply chain and has briefed the company on pUmA S.A.F.e. Code of Conduct and each supplier has a copy of the pUmA S.A.F.E. Pocket Guide. Impahla follows up with sporadic requests for suppliers to report on its performance against the pUmA S.A.F.e. Code of Conduct. no quantitative data has yet been provided.

oI

HR3 Total hours of employee training on policies and procedures concerning aspects of human rights that are relevant to operations, including the percentage of employees trained.

26 - 27 extending our responsibility in the supply chain

opportunity for improvement. pUmA’s Code of Conduct expresses commitment to human rights and fair labour. The pUmA S.A.F.e. programme executes training and compliance along the lines of the principles of its Code of Conduct within the company’s workplace as well as its suppliers. The information needs to be quantitative and descriptive, it should include the total hours of training on these relevant procedures and polices and provide an accurate number of total employees trained and the formal training that was provided, stating the percentage of employees who attended, once these are included in the report it would demonstrate the organisation’s capacity in the implementation of their human rights policies and procedures.

oI

HR4 Total number of incidents of discrimination and actions taken.

12, 34 Responsibility and pUmA’s Code of Conduct

opportunity for improvement. Impahla states that is does not permit any form of discrimination against employees, nor do they tolerate racism, sexual harassment or the discrimination of persons with any form of disability. This statement needs to be backed up with quantitative data on numbers of incidents and actions taken.

oI

HR5 operations identified in which the right to exercise freedom of association and collective bargaining may be at significant risk, and actions taken to support these rights.

12, 28 Impahla’s Code of Conduct: Impahla’s 12 key principles; Remuneration and employment equity

no concerns. Freedom of association and collective bargaining are respected to the extent permitted by the laws of the manufacturing country. The contractor respects the right of its employees to freedom of association and collective bargaining.

oK

HR6 operations identified as having significant risk for incidents of child labour, and measures taken to contribute to the elimination of child labour.

12 Impahla’s Code of Conduct: Impahla’s 12 key principles; employee engagement

no concerns. Workers employment is voluntary and excludes prison labour, indentured labour, bonded labour or other forms of forced labour.

oK

HR7 operations identified as having significant risk for incidents of forced or compulsory labour, and measures to contribute to the elimination of forced or compulsory labour.

12 Impahla’s Code of Conduct: Impahla’s 12 key principles

no concerns. Impahla employees are older than 16. oK

HR8 percentage of security personnel trained in the organisation's policies or procedures concerning aspects of human rights that are relevant to operations.

n/A Impahla’s Code of Conduct: Impahla’s 12 key principles

no concerns. Security for all plants is provided by external security companies. no concerns have been raised about human rights abuses by security personnel.

oK




HR9 Total number of incidents of violations involving rights of indigenous people and actions taken.


no concerns. Impahla has not been subject to any investigations, complaints or incidents of violations involving rights of indigenous people. moreover, the company’s policies explicitly state a commitment to respecting all human rights, including the rights of indigenous persons, and the avoidance of all forms of discrimination.

oK

Social: SocietySo1 nature, scope and effectiveness of any

programs practices that assess and manage the impacts of operations on communities, including entering, operating and exiting.


no concerns. no formal policies and/or procedures have been developed to assess and/or manage the impacts of operations on communities, including entering, operating, and exiting.

oI

So2 percentage and total number of business units analysed for risks related to corruption.


no concerns. Impahla monitors and manages all forms of corruption, fraud, theft, discrimination and/or all other forms of unethical behaviour throughout its three plants, on an ongoing basis, particularly through the hands-on approach of the owner/management team.

oK

So3 percentage of employees trained in organisation's anti-corruption policies and procedures.


no concerns. Impahla reports that 100% of employees are trained – during initial induction – on Impahla’s Code of Conduct, which includes anti-corruption and unethical behaviour. Whenever necessary, particularly when employees are dismissed for unethical behaviour - employees are reminded of their roles, responsibilities and duties with respect to Impahla’s policies, procedures and Code of Conduct.

oK

So4 Actions taken in response to incidents of corruption.


no concerns. no significant incidences were reported. Continually reinforce workplace ethics on an ongoing basis. All dismissals are discussed with a description of causes.

oK

So5 public policy positions and participation in public policy development and lobbying.


no concerns. Impahla does not participate in any public policy development and/or lobbying. However, applied for a rebate store.

oK

So6 Total value of financial and in-kind contributions to political parties, politicians and related institutions by country.


no concerns. Impahla does not offer financial and/or in-kind contributions to political parties, politicians and/or related institutions.

oK

So7 Total number of legal actions for anti-competitive behaviour, anti-trust and monopoly practices and their outcomes.


no concerns. Impahla has not been subject to any complaints, concerns or fines for anti-competitive behaviour, anti-trust and monopoly practices.

oK

So8 monetary value of significant fines and total number of non-monetary sanctions for non-compliance with laws and regulations.


no concerns. Impahla has not been subject to any complaints, concerns or fines for non-compliance with any laws or regulations.

oK

Social: Product responsibilitypR1 Life cycle stages in which health and safety

impacts of products and services are assessed for improvement and percentage of significant products and services categories subject to such procedures.

26 encouraging responsibility

no concerns. pUmA expects Impahla to take responsibility for the quality and responsibility of their supply chain. This includes aspects related to the safety of the products and the substances used in making them.

oK

pR2 Total number of incidents of non-compliance with regulations and voluntary codes concerning health and safety impacts of products and services during their life cycle, by type of outcomes.


no concerns. Impahla has not been subject to any complaints or concerns regarding incidents of non-compliance with regulations and/or voluntary codes concerning the health and safety impacts of the products and services we provide.

oK

pR3 Type of product and service information required by procedures, and percentage of significant products and services subject to such information requirements.


no concerns. product labelling of all garments is subject to the rules and procedures identified by our customers. In the case of pUmA, our labelling requirements include wash/care instructions and country of origin. All garments must be labelled prior to shipping, including retail hang tags and header cards when garments are to be shipped directly to retailers.

oK

pR4 Total number of incidents of non-compliance with regulations and voluntary codes concerning product and service information and labelling, by type of outcomes.


no concerns. Impahla has not been subject to any complaints or concerns regarding incidents of non-compliance with regulations and voluntary codes concerning product and service information and labelling.

oK

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pR5 practices related to customer satisfaction, including results of surveys measuring customer satisfaction.

18 Servicing our customers meeting, going beyond standards

opportunity for improvement. Impahla has invested in production planning and tracking programmes to improve issues of late delivery. There has been no reporting on customer satisfaction surveys.

oI

pR6 programmes for adherence to laws, standards and voluntary codes related to marketing communications, including advertising, promotion and sponsorship.

18 Servicing our customers opportunity for improvement. Impahla does not have a marketing department, but rely completely on pUmA and its highly sophisticated market research and analysis team to meet new consumer trends.

oI

pR7 Total number of incidents of non-compliance with regulations and voluntary codes concerning marketing communications, including advertising, promotion and sponsorship by type of outcomes.


no concerns. This indicator is not applicable as marketing of products are left to pUmA.

oK

pR8 Total number of substantiated complaints regarding breaches of customer privacy and losses of customer data.


no concerns. Impahla has not been subject to any substantiated complaints regarding breaches of customer privacy and losses of customer data.

oK

pR9 monetary value of significant fines for non-compliance with laws and regulations concerning the provision and use of products and services.


no concerns. Impahla has not been subject to any complaints, concerns or fines for non-compliance with laws and regulations concerning the provision and use of products and services.

oK

acknowledgements

Conceptualised, designed and DTp by Solo graphicsContact: debbie snoek 083 702 [email protected]

produced by gillian mitri082 450 [email protected]

SUPPORTING BETTER BUSINESS

Compiled and written by Rob Worthington-smith 021 671 [email protected]

IMPAHLACLOTHING

SprIng roManCe propertIeS 34 (pty) ltd t/a IMpaHla ClotHIngHEAD oFFICEUnit 10, maitland Business park1 mowbray Road maitlandCape Town 7405 South Africa

[email protected]: +27 21 510 4201Fax: +27 21 510 4257

www.impahla.co.za

FABRICS37 packer Avenueepping Industrial 2Cape Town 7460South Africa


SoCkS 16 Consani Roadelsies RiverCape Town 7490South Africa


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