Introduction By The Managing Member - Puma

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Introduction By The Managing Member - Puma

CONTENTS PAGE

Introduction by the Managing Member

Mission Statement

Our History

Ownership Structure

Management Structure and Governance

Our Most Material Issues

Use of Appropriate Technology

World Class Products for World Class Customers

The Vimal Team

Research, Marketing and Procurement

Occupational Health & Safety

Environmental Management

Social Responsibility and Community Investments

Stakeholder Engagement

DTI Codes Of Good Practice

Human Rights

Lessons Learned and the Way Forward

Request for Feedback

GRI G3 Application Level Requirements

GRI Content Index

Non- Independent Assurance Statement

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INTRODUCTION BY THE MANAGING MEMBER

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

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

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

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

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

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

Report is therefore a demonstration of our efforts to streamline our data management and reporting to

key stakeholders.

Since 1981, our primary manufacturing output has always been apparel, although we

did spend a few years experimenting with furniture making and other initiatives. At

present, our business consists of four business units: Vimal Clothing; Yash Clothing;

Functional Sportswear and Niam Embroidery. Through the acquisition and development

of these four equally important units, we have been able to diversify our products

and services portfolio while identifying and concentrating on products that best

suit our specific core competencies. Each of the business units is unique in its specific

focus, but they ultimately work harmoniously with each other to share in making Vimal

a successful manufacturer of sporting apparel.

As a South African supplier of Puma AG, a world class sports brand, Vimal was invited

to participate in a development programme supported by the German Development

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

a Sustainability Report such as this one.

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

Sustainability Reporting and very little about ‘Corporate Responsibility’. We knew

that our success over the past 26 years has been based on our ability to focus on

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

and employee-centric approaches to surviving in a highly competitive market was of

interest to people other than ourselves. The reporting process has therefore helped

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

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

drawn to issues such as environmental performance and improved employee engagement.

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

cash or, more importantly, time.

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

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

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

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

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

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

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

the GTZ, the GRI and Puma.

The primary goal of this Report is to offer our many stakeholders an opportunity to better understand who we

are as a company, as a team of individuals and as a proudly South African manufacturer of clothing. The following

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

have been doing thus far and how we hope to improve in the future.

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

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

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

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Our operations exist only in South Africa, and while our largest clients (Adidas and Puma) are international

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

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

overseas (principally Thailand and Taiwan).

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

pulling this information together. Mostly, we learned that we actually possessed information, statistics and

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

improve in the future.

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

at reporting our objective has been to meet the Application Level C requirements.

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

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

Sincerely,

Nayan Kalidas

Managing Member

Vimal Clothing Enterprises

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MISSION STATEMENT

Vimal Clothing Enterprise cc is committed to:

1. Maintaining and expanding our reputation as a specialised knitted and woven garment supplier

2. Maintaining a low cost structure and improving our efficiency standards

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

4. Recognising that our employees are our greatest asset, and accordingly attracting and retaining quality

people who will identify with our culture of integrity and flexibility

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

customers

6. Remaining a sound organisation through growth and profitability

OUR HISTORY

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

Enterprise cc.

Since 1981, when the Kalidas family first started Vimal Clothing, the company has continuously expanded

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

solutions to challenges presented by a diverse range of customers.

The success of Vimal has been centred on its ability to translate customer challenges into innovative solutions

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

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

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

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

key products.

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

variations within the respective divisions.

MENS LADIES GIRLS & BOYS

Tracksuits Tracksuits Tracksuits

Jackets Jackets Jackets

Pants Pants Pants

Shorts Shorts Shorts

Soccer Shorts Soccer Shorts

Soccer Jerseys Soccer Jerseys

In 1987, during the second phase of our business, we started producing tracksuits

for corporate clients and wholesalers targeting the medium price market. By

learning from our past experiences, focusing on products that best suited our core

competencies, and proving that cost effectiveness, on-time deliveries and unquestionable

quality were at the heart of being a customer-centric company, Vimal was

able to attract Adidas South Africa as our first flagship client in 1989.

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Start (20 employees)

‘81 ‘87

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

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

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

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

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

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

(among others).

Adidas

‘94

Nike

MILESTONES

1981 Start with 20 employees (526 at the end of 2007)

1987 Start of supply relationship with Adidas (still the largest customer)

1994 Start of supply relationship with Nike (no contracts in 2007)

1999 Started Niam Embroidery with 12 employees (24 at the end of 2007)

2001 Start of supply relationship with Puma

2002 Started Functional Sportswear with 50 employees (103 at the end of 2007)

Started Yash Clothing with 34 employees (95 at the end of 2007)

2006 Start of supply relationship with Reebok and TotalSports (Foschini Group)

2007 Move into new premises in Mount Edgecombe (Umhlanga)

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

Vimal outgrew our first factory in the Phoenix Industrial Park and moved to the Redhill Industrial Park back

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

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

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

that is easy to access their homes, that is safe, and that demonstrates that their employment is secure, as

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

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

subsidiary corporations which focused their mainline operation on soccer outfits. The knits allowed us to

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

Adidas, Puma, Nike, Reebok and the Foschini Group (TotalSports).

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‘99

Embroidery

‘01

Puma

‘02

Functional Sportswear

Yash Clothing

‘07

526


OWNERSHIP STRUCTURE

Vimal Clothing was originally established a closed partnership.

However, Mr Nayan Kalidas (‘Kali’ to all who know

him) was given the opportunity to buy the full 100% interest

in Vimal Clothing, creating an opportunity to expand the

business into what is now known as Vimal

Clothing Enterprise cc (‘Vimal’), with the Shareholding in

Vimal limited to Kali (70%) and his wife (Naina, 30%).

Under this banner, Vimal now consists of four 100%

wholly owned subsidiaries, including:

• Vimal Apparel, our primary garment

manufacturing entity

• Functional Sportswear

• Yash Clothing

• Niam Embroidery

Apparel production is broken into various categories, whereby Functional Sportswear focuses on specialized

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

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

service to all of the business lines, including embroidery and sublimation printing services.

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

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

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

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

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

cutting) being retained within our centralised Vimal factory.

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VIMAL CLOTHING ENTERPRISES CC

MANAGEMENT STRUCTURE AND GOVERNANCE

Vimal Apparel

(305 employees)

Functional Sportswear

(103 employees)

Yash Clothing

(95 employees)

Niam Embroidery (23 employees)

Within Vimal, the overall management structure is limited

to four tiers of control. Ultimately, all decisions are

taken by the owner of the business, but the day-to-day

running of the business resides with the managers and

supervisors.

Communication, particularly between departments and

business units, is perhaps our most important critical

success factor.

Although Vimal is in essence ‘one company’, the four

separate business units (Vimal, Functional, Yash and

Niam) operate as independent entities within the structure.

However, the success of each business unit, as

well as Vimal on the whole, is critically dependent upon

ensuring that the management team from each unit regularly

interacts to ensure smooth and efficient production

flow.


In order to ensure that the same principle of effective communication cascades down throughout the entire

company, employee communication is managed through reporting lines to Floor Supervisors and

Shop Stewards.

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

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

achievable, and that potential challenges are quickly identified and addressed.

Saras

Production Manager

Sandra/Michelle

Sourcing Department

Rita

Bulk Design Production

Vishnu/Vishal

Cutting Room

Priscilla

Embroidery

Sandra/Mala/Angie

Floor Management

Nishel

Soccer Products

Amit

Trims Department

Floor Supervisors

Nayan (Kali) Kalidas

Managing Member

The overall management structure of the company is divided in to the following core elements:

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

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

and Mrs. Kalidas are Vimal Clothing’s decision makers.

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

complete orders. She also communicates with all of our customers to address production

queries.

Finance: Solitha is responsible for all aspects of our financial management.

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

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

orders are completed on deadline and that all goods are delivered on time to our

customers.

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

answered satisfactorily.

Trims Manager: Amit oversees the Trims Department, including the ordering of all trims to produce

our goods as per client expectations of quality, cost and time.

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Julie

Design Manager

Shireeta/Caroline

Design Supervisors

Solitha

Financial Manager

Khemie

Payroll/HR Department

Shop Stewards


Shop Stewards: The shop stewards relay all worker queries to Management and initiate meetings to

discuss any problems.

Design: Julie is responsible for coordinating our product development.

Our financials are audited by an external service provider, as required by law,

and our company registration documentation is kept up to date during our annual

audit process.

Policies and procedures are typically established by the relevant business unit

or department manager, and are discussed amongst the management team to

ensure that they are consistent with our vision, mission and values.

The conduct of our employees is guided by our Code of Conduct, which is

signed by each employee when they join Vimal. This Code addresses employee

rights, misconduct, disciplinary counselling, grievance procedures

and sanctions.

Our environmental performance is monitored and measured according to

our environmental policy which addresses the identification and management

of impacts and emissions, the use of materials and supplies that have

a reduced environmental impact, the reduction of wastes, and increasing

energy efficiency.

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

protected across all of our operations. This policy addresses the identification and management of risks and

hazards, the training of all employees, incident and accident reporting procedures, and the management of

injuries on duty.

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

can be improved.

Employee engagement occurs via Shop Steward Meetings every Monday morning, with an additional meeting

with concerned employees occurring on Monday afternoons.

Anyone wishing to raise specific concerns about the operation of the business, or specific personal or professional

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

to the company.

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

specific issue is invited to call upon Kali when required.

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The canteen is

often where issues

of concern or

interest are debated,

discussed and

raised with the

management team.


OUR MOST MATERIAL ISSUES

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

remain competitive within the markets we operate.

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

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

concern to us.

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

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

and employees:

Production efficiency,

delivering on-time

Compliance to the

National Bargaining

Council (Clothing

ISSUE PERFORMANCE TARGETS

Industry)

Customer complaints about late deliveries

are rare but performance can still improve.

In 2007 no penalties were levied by any

clients.

Currently working on the installation of a new

IT system to capture production data to im-

prove efficiency.

Vimal is certified as a ‘Compliant Member

of the NBC.

As a certificated member, Vimal has been

able to prove that we

• pay correct normal and overtime wages

• pay appropriate end of year bonuses

• pay for appropriate benefits

• adhere to appropriate guidelines on normal

and overtime hours.

To date, no unresolved concerns or com-

plaints are outstanding with the NBC, and no

complaints have ever led to CCMA arbitra-

tion.

New technology The implementation of new technology within

DTI Codes of

Good Practice

Vimal has increased the output per worker,

particularly for specialised tasks such as

pocket affixation.

Quality and sophistication of products has

increased due to the presence of higher

value-add machinery, ultimately leading to

an increase in orders that Vimal otherwise

would not be able to fill.

The Department of Trade and Industry (DTI)

Codes of Good Practice are a set of govern-

ment principles in support of Broad Based

Black Economic Empowerment (BBBEE) in

South Africa. The Codes come into full effect

at the end of February 2008, and at the time

of writing this Report, we are in the process

of undergoing a review of our status accord-

ing to these Codes.

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• Complete the integration of IT systems for

automatic order generation with Adidas

• Engage other key clients

(Puma, TotalSports) to discuss similar

possibilities.

• Maintain certificated compliance to the

NBC

• Ensure that no employee is treated in

a manner that is inconsistent with the

agreements established by the NBC

• Ensure that all employees work towards

targets leading to the payment of bonuses

• Complete the installation and conversion to

automated cutting machines.

• Complete the installation and development

of skills to operate the new automated cuff,

collar and waistband knitting machines.

• Investigate possibilities to procure an

automated marking system to increase

accuracy and efficiency, and to reduce

material wastage.

• Vimal is committed to completing a full

assessment of our Codes status within

the first half of 2008, and we will discuss

this assessment in our 2008 Sustainability

Report.


Securing adequate

orders to ensure the

long-term financial

ISSUE PERFORMANCE TARGETS

viability of the

company

Vimal is proud of our record of never having

cause to commit employees to ’short time’,

or to retrench employees due to lack of or-

ders.

The quantity of 2007 orders was sufficient to

merit the increase in staff complement by 79

employees.

Welfare of our team Vimal is committed to ensuring a policy of

‘zero short shifts’, where all employees are

guaranteed full weekly wages.

Annual performance and zero sick leave

bonuses are paid out to workers in

exchange for their dedication to performance

excellence.

Long service awards are given to employees

who complete 5 years (or more) service.

School fees are payable to employees who

meet specific performance criteria, thus re-

ducing their financial concerns.

All employees are allowed to take the day off

on the first day of the school year, to assist

their children with school enrolment.

Workplace safety Although appropriate safety equipment is

used, 3 employees sustained injuries in the

cutting room.

An Injury on Duty (IOD) Register is main-

tained within the factory, and at our off-site

assembly plant in Umzinto (Yash Clothing).

Supervisors conduct daily inspections to

manage risks, including ensuring that needle

guards are not removed and that work spac-

es are free from obstructions.

Inspections of potential workplace hazards

are conducted on a bi-weekly basis or as/

when necessary.

6 employees are trained by St. John’s Ambu-

lance in First Aid every 3-years.

Fire fighting training has been conducted by

Chubb Fire.

All fire fighting equipment is tested on a

monthly basis.

Evacuation drills are conducted on a

6-monthly basis.

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• Maintain current clients, and ensure that

growth in new orders does not affect

our ability to meet existing performance

expectations.

• Ensure that increased capacity due to new

and more efficient technology is met by

increased order taking.

• Maintain a zero ‘short shift’ policy within

the company

• Ensure a zero redundancy policy

• Ensure that wages are paid in-full, on time

and, where possible, in the presence of

performance and special gratitude awards

• Implement our ‘Qualifying for 2010’ bonus

scheme for awarding employees who

reduce their sick leave.

• Complete the installation and conversion

to automated cutting machines, which

is expected to reduce our exposure to

cutting injuries.

• Continue to maintain an up-to-date IOD

register, and to discuss to discuss ‘near

misses’ when they are raised.

• Continue to conduct regular workplace

hazard inspections.

• Continue to adhere to fire prevention,

evacuation and fighting programme.

• Avoid all injuries on duty to reach our

target of ‘Zero Harm’


Theft and unethical

ISSUE PERFORMANCE TARGETS

behaviour

On-site losses are minimal at Vimal premis-

es. However, losses can occur both in-transit

and in customer warehouses.

On-site monitoring of losses is monitored

by comparing cutting stats with packaged

orders and defaults.

The implementation of on-site CCTV cam-

eras has reduced occurrences of theft and/

or over-reporting of work performance.

One incident of personal property theft was

identified and addressed during the course

of the year.

Cost Reduction Vimal continuously strives to reduce operat-

Absenteeism and

Late Arrival

ing costs and overheads.

Our 2007 focus was on the implementation

of new technology to speed up production,

reduce labour costs and reduce wastage.

2007 saw a significant increase in employee

absenteeism and late arrivals, although

much of the tardiness was directly linked to

the new location and has been addressed.

Skill levels Although skill levels are not a concern in the

Solid waste sent for

disposal, including

fabric wastage

Quality of local fabric

suppliers

short-term, the lack of interest in garment

manufacturing among the youth of South Af-

rica is an ongoing concern for the future.

Fabric wastage has been identified as a

cost-first, environmental second, concern.

The move to new technology has already be-

gun to demonstrate a decrease in the num-

ber of waste haulage bins being retrieved

from our premises.

The move to new technology has increased

the amount of recyclable materials (specifi-

cally plastic) being generated within the fac-

tory.

Although Vimal is committed to procuring

fabric from local suppliers, issues of quality

and on-time delivery continue to be a limit-

ing factor.

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• Continue to monitor potential losses.

• Continue to remind employees of their

responsibility to avoid theft and unethical

behaviour.

• Complete the installation of data manage-

ment system to control inventories of

fabric and accessories.

• Complete the acquisition and installa-

tion of new machinery to further improve

production efficiencies.

• Complete the implementation of the

‘Qualifying for 2010’ bonus scheme to

reduce absenteeism.

• Need to investigate ways to find new

machine operators, including the possible

need to relocate some of the assembly

activities to more rural areas.

• Continue to implement new technology to

ensure that fabric wastage is reduced.

• Identify ways to sort and recycle solid

wastes.

• Continue to engage with local suppliers to

identify ways in which Vimal can increase

purchases from them, without compromis-

ing on customer quality expectations.


USE OF APPROPRIATE TECHNOLOGY

As a proudly South African company, we are constantly reminded of the need to

balance the challenges of operating within a globally competitive market with the

socio-economic challenges in our community. Poverty, high unemployment and the

presence of less than scrupulous employers all plague the South African industrial

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

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

pressures toward automation and job creation places Vimal in the unenviable

position of looking for inventive ways to improve efficiencies without compromising on

our commitment to the welfare of our staff.

Over the past 26 years of operation, we have focused mainly on ensuring that

our cutters, machine operators and finishers were all supplied with reliable, safe

and appropriate machines that would allow them to deliver against increasingly

challenging targets.

However, our experience over the past couple of years has indicated that we must

alter our production strategies to rely less on human behaviour and more on the

increased accuracy and efficiency of computers.

Although our design, printing and planning activities have been at least partially automated

for several years, 2007 became our watershed year for the automation of

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

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

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

to landfills.

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

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

cuff, collar and waistband options. These three machines are expected to be fully operational before the end

of the first quarter of 2008.

CUTTING

Basic Cutting Machines

End Cutter Machines

Lectra VectorFashionMH8Cutter

KNITTING

Mechanical Knitters

Kauo Heng Flat Bed Knitters

EMBROIDERY AND PRINTING

Tajima TMEX – c901 Embroidery Machine

Tajima TFMX – 2c904 Embroidery Machine

Tajima TFHX – 2c1208 Embroidery Machine

Tajima TMFD – 615 Embroidery Machine

Tajima TMFD – 620 Embroidery Machine

Tajima TFGN – 920 Embroidery Machine

Sublimation Machine

Monti Midi Printer Press

Mini Printer Press

Hand held electric cutter/knife

Hand held straight line end cutter/knife

Automated fabric cutting machine

Mechanical knitting machine for collars and cuffs

Computer-aided knitting machine for collars and cuffs

Single head automatic logo embroidery machine

Four head automatic logo embroidery machine

Eight head automatic logo embroidery machine

Fifteen head automatic logo embroidery machine

Twenty head automatic logo embroidery machine

Twenty head automatic logo embroidery machine

Printing machine for creating sublimation heat transfers

Heat transfer press for sublimation prints

Small scale heat transfer press for sublimation prints

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11

6

1

3

2

1

1

1

1

1

1

1

1

3


ASSEMBLY AND MATERIAL PREP

Flat Machines

Overlock Machines

Double Needle Machine

Multi Needle Machine

Button Hole Machine

Bartack Machine

Coverseam Machine

Semi Automatic Snap Machine

Fusing Machines

Button Sew Machine

Blind Stitch Machine

2 Needle Chain Stitch Machine

AMF Reece Semiautomatic Jet Pocket Machine

Juki Elastic Semiautomatic Tacking Machine

FINISHING

Viet 4413 Vacuum Pressing Machine

Yiulih YP130H Vacuum Pressing Machine

Spot Cleaning Machines

OTHER EQUIPMENT

Air Compressors

Semi Automatic Strap Machine

Crown Stock Pickers

Hyster Forklift

Standard operator sewing machine for normal seams

Standard operator sewing machine for panel joining

Operator sewing machine for specialised assembly

Operator sewing machine for lay-down striping

Operator sewing machine for button hole installation

Operator sewing machine for seam reinforcement

Operator sewing machine for hemming of knitted fabrics

Operator machine for installing press studs and eyelets

Operator machine for fusing vylene to fabric

Operator machine for button installation

Operator sewing machine for specialised hemming

Operator sewing machine for lay-down striping

Operator sewing machine for the installation of pockets and jets

Operator sewing machine for cutting and tacking elastic

Operator clothes ironing machine

Operator clothes ironing machine

Operator machine for removing stains and markings

Air compressors to supply air to machinery

Operator machine for strapping boxes

Mobile operator machines for collecting fabric from stores

Mobile operator machine for moving pallets

12

112

Unfortunately, the move to automated cutting

machines has already created a concern for our

management staff. Of the six cutting room operators

currently within our employ, we predict that

we will only require two cutter operators once the

new technology is in place. Our hope is that we

will be able to relocate the other four staff members,

but are worried that we will need to shed

these staff members due to a lack of equal pay

opportunities. Although this is a concern for Vimal,

we are confident that these individuals have

obtained a high degree of specialised training and

guidance over their period of employment with us,

and it is our assumption that our industry colleagues

and competitors will soon be benefitting

from our loss.

Nonetheless, we are pleased to be in a position

where we can now offer our clients an improved

range of products and services, guaranteeing

even better quality control performance than

we’ve grown to be recognised for.

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15

5

8

12

4

3

1

1

1

2

1

4

17

2

6

4

4

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

distributors with the services necessary to monetise their goodwill with minimum delay and fuss.

From design and embroidery through to sampling and manufacturing, Vimal is a confident and proven supplier

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

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

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

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

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

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

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

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

and health and safety concerns.

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

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

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

brand that is seeking an African partner.

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

with the following blue chip clients:

• Nike

Puma

• Reebok

• TotalSports (Foschini)

• Sedsports

WORLD CLASS PRODUCTS FOR WORLD CLASS CUSTOMERS

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

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

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

PUMA SAFE SCORES:

Weight 2007 2005 2002

Social 50.00% 49.30% 46.42% 48.05%

Environmental 10.00% 8.00% 7.57% 8.15%

Health & Safety 35.00% 29.10% 30.82% 31.92%

Additional 5.00% 4.71% 3.51% 5.00%

100.00% 91.11% 88.32% 93.12%

Classification B B B

Both Adidas and Puma have become significant contributors to our ongoing process improvement programme

through their processes of contractor compliance audits.

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

in Social, Environmental and Safety areas.

13

Vimal was proud to

manufacture the SA

team kit for the 2006

Commonwealth

Games in Australia


Vimal is a proud

supplier of soccer kit

to players and

supporters of the

South African PSL

14

On close inspection of our audit results, we have

found that while we continue to excel in the Social

aspects of Puma’s audits, we still have significant

room for improvement in both the Environmental

and Health & Safety areas. These findings are

extremely helpful when comparing our own internal

assumptions and conclusions about our performance

with what we consider to be the ‘reality’

of our progress. Moreover, where we believe we

should be classified as an ‘A’ supplier, we are prepared

to accept that Puma rates us as a ‘B’ supplier,

although with a reasonable level of further

improvements to be addressed.

Closer to our hearts, and almost as important

as supporting global brands, Vimal has had the

distinct pleasure of supplying garments to South

African teams representing our country at major

sporting events around the world, including:

• Bafana Bafana replica kit for the 2008

African Nations Cup (Adidas)

• South African team kit for the 2006

Commonwealth Games in Australia

(Sedsports)

• Springbok team kit for the 2003 Rugby

World Cup (Nike)

• South African team kit for the 1996

Olympics in Atlanta (Reebok)

• Replica kit (Puma) for the 2008 Nations

Cup teams from Angola, Botswana,

Cameroon, Egypt, Ghana, Ivory Coast,

Morocco, Mozambique, Namibia, Senegal

and Tunisia

Currently, Vimal is producing PSL team and replica

kit for the following sporting sides:

• Bloemfontein Celtic

• Orlando Pirates

• Ajax Cape Town

• Santos (Cape Town)

• Jomo Cosmos

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

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

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


Mr Price

Reebok

TotalSports

Puma

Adidas

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

January

February

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

While we are maintaining a relatively stable number of deliveries to Adidas, our orders to Puma have risen

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

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

over 8% in 2007.

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

2007 2006 2005 3 Years

Adidas 696 599 73.5% 573 341 81.9% 694 656 92.4% 1 964 596 81.9%

Puma 149 112 15.7% 55 530 7.9% 5 746 0.8% 210 388 8.8%

Nike 0 0.0% 21 984 3.1% 38 404 5.1% 60 388 2.5%

Mr. Price 53 562 5.7% 0 0.0% 0 0.0% 53 562 2.2%

Reebok 23 178 2.4% 29 365 4.2% 90 0.0% 52 633 2.2%

TotalSport 25 122 2.7% 4 681 0.7% 0 0.0% 29 803 1.2%

Sedgars 0 0.0% 2 413 0.3% 13 195 1.8% 15 608 0.7%

Falstan 0 0.0% 11 579 1.7% 0 0.0% 11 579 0.5%

Ass Ind 0 0.0% 1 042 0.1% 0 0.0% 1 042 0.0%

Total 947 573 100.0% 699 935 100.0% 752 091 100.0% 2 399 599 100.0%

Production efficiency improved over the second half

of the 2007 calendar year because the team has

now settled into our new facilities. There is still a

problem with backlogs in dispatch, mostly because

of absenteeism, particularly in summer, but we are

confident that 2008 will be marked with a measured

improvement reduction in absenteeism.

Thankfully, Vimal has been relatively immune to a

common plague among garment manufacturers:

product returns and order rejections. While we are

aware of a few batches of products that were produced

in a manner that was deemed inconsistent

with client expectations, we have not needed to endure

a situation where our staff allowed these products

to be shipped to clients. As such, we continue

to be proud of our record of ‘zero rejections’, with

only a small handful of returned items.

15

March

April

May

June

July

August

September

October

November

December

CY 2007


THE VIMAL TEAM

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

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

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

packages, including salary, bonuses and incentives, are above average for our industry, and we are registered

with industrial councils and all other statutory bodies.

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

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

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

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

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

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

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

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

team member they feel most comfortable with.

Vimal Group Vimal Functional Niam Yash Admin

Total 526 287 54.7% 95 18.1% 23 4.4% 102 19.4% 18 3.4%

White 0 0% 0 0% 0 0% 0 0% 0 0% 0 0%

Black 129 24.6% 62 21.6% 39 41.1% 7 30.4% 19 18.6% 2 11.1%

Indian 396 75.4% 225 78.4% 56 58.9% 16 69.6% 83 81.4% 16 88.9%

Male 44 8.4% 32 11.1% 0 0% 1 4.3% 8 7.8% 3 16.7%

White 0 0% 0 0.0% 0 0% 0 0% 0 0% 0 0%

Black 12 2.3% 11 3.8% 0 0% 0 0% 0 0% 1 5.6%

Indian 32 6.1% 21 7.3% 0 0% 1 4.3% 8 7.8% 2 11.1%

Female 482 91.6% 256 88.9% 95 100% 22 95.7% 94 92.2% 15 83.3%

White 0 0% 0 0% 0 0% 0 0% 0 0% 0 0%

Black 117 22.3% 51 17.8% 39 41.1% 7 30.4% 19 18.6% 1 5.6%

Indian 365 69.3% 205 71.1% 56 58.9% 15 65.2% 75 73.5% 14 77.8%

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

African Black Economic Empowerment legislation. Based in the Durban area, where the overwhelming majority

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

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

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

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

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

nearly 92% of our 526 employees are female.

Vimal Group Vimal Functional Niam Yash Admin

17-19 11 2.09% 4 1.4% 0 0.0% 2 8.7% 5 4.9% 0 0.0%

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

30-39 202 38.40% 101 34.8% 40 42.1% 9 39.1% 43 42.2% 9 50.0%

40-49 184 34.98% 111 38.3% 40 42.1% 5 21.7% 25 24.5% 3 16.7%

50-59 48 9.13% 37 12.9% 8 8.4% 1 4.3% 1 1.0% 1 5.6%

>60 3 0.57% 2 0.7% 0 0.0% 0 0.0% 0 0.0% 1 5.6%

TOTAL 526 288 95 23 102 18

Min 17 18 23 19 17 26

Max 63 61 53 50 50 63

Average 38 40 39 33 33 37

16


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

production team.

With an age distribution favouring employees between the age of 30 and 49, the total number of employees

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

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

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

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

2007 2006 2005 2004 2003

New Recruits 229 94 146 83 132

Failed Probation Period 28 11 42 12 24

Net New Recruits 201 83 104 71 108

Terminations

Deceased 1 0.0% 0 0.0% 0 0.0% 1 2.9% 2 5.4%

Discharged 4 3.3% 3 4.9% 3 3.9% 0 0.0% 0 0.0%

Early Retirement 1 1.1% 0 0.0% 0 0.0% 0 0.0% 0 0.0%

End Of Contract 13 10.9% 3 4.9% 33 42.9% 4 11.4% 3 8.1%

Ill Health 6 5.4% 5 8.2% 5 6.5% 1 2.9% 1 2.7%

Left Without Reason 17 15.2% 3 4.9% 4 5.2% 5 14.3% 7 18.9%

Maternity 8 6.5% 13 21.3% 6 7.8% 9 25.7% 7 18.9%

Normal Retirement 2 2.2% 0 0.0% 0 0.0% 0 0.0% 1 2.7%

Resignation 63 47.8% 33 54.1% 20 26.0% 13 37.1% 16 43.2%

Retrenchment 4 4.3% 0 0.0% 6 7.8% 0 0.0% 0 0.0%

Voluntary Retrenchment 3 3.3% 1 1.6% 0 0.0% 2 5.7% 0 0.0%

Total Terminations 122 23.2% 61 13.6% 77 18.1% 35 8.8% 37 10.2%

Net Turnover 79 15.0% 22 4.9% 27 6.4% 36 9.0% 71 19.6%

Employees at Year End 526 447 425 398 362

Accumulated Growth 55.0% 39.9% 35.0% 28.7% 19.6%

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

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

with.

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

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

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

terminations.

Thankfully, our need to discharge employees for poor

performance or behaviour that is inconsistent with our

core values has been limited. In the past five years

we’ve only been forced to terminate the employment

of 10 workers for unsatisfactory behaviour, with four

of these terminations occurring in 2007.

In our 26 year history, only one termination case has

been taken to the National Bargaining Council (Textiles)

for arbitration. Although the termination was

ruled to be merited by Vimal, we nonetheless found

the process useful in confirming that our compensation

procedures adhere to NBC expectations.

17

Having worked with

Kali at another

Fabric company

prior to the

development of

Vimal, Ramesh left

his job and, having

faith in Kali, became

one of our first

employees.


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

the awarding of milestone rewards. In the 20 years of offering these awards:

• 307 employees have received a clock for 5 years of service

• 68 have received a microwave for 10 years

• 17 have received a freezer for 15 years

• 9 have received a television for 20 years, and

• 3 have received a home theatre system for 25 years of service

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

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

10 Year Microwaves 3 2 5 3 4 1 4 2 1 3 11 7 22

15 Year Freezers 2 2 4 2 1 1 2 1 1 1

20 Year Televisions 1 2 2 1 2 1

25 Year Home Theatre Systems 2 1

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

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

the additional benefits our employees receive include:

• Annual payment of school fees to employees who meet specific performance requirements

• Payment of 6–monthly bonuses to employees who meet production and absenteeism targets

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

children in enrolling in their new grade

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

recognised public holiday in South Africa

2007 2006 2005

Cost Pupils Cost Pupils Cost Pupils

Vimal 40 535.00 78 74 325.00 166 62 226.64 147

Functional 8 845.00 18 23 685.00 53 18 905.00 45

Niam 15 670.00 31 15 185.00 34 500.00 1

Yash 2 200.00 5 400.00 1 11 940.00 34

TOTAL R 67 250.00 132 R 113 595.00 254 R 93 571.64 227

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

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

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

move to new premises.

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

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

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

of 1 per month).

18


52 Years of Combined Service

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

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

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

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

early days of 2008.

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

Vimal as a company, and Kali as an manager to work for.

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

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

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

time.

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

always paid us what we were owed, plus bonuses.

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

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

so that we won’t spend it all before we get back to work.

F: These are the most important things for those of us in production because we need the

money.

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

factories tell me that I am lucky to be here.

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

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

everything.

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

unity.

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

union members and don’t pay NBC rates. They also sometimes only let the people

work 2 or 3 days per week. We always got a full week’s work.

M: The whole factory gets time off for celebrations such as Diwali, regardless of whether

you are Christian, Muslim, Hindu, or not religious.

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

long-service awards like in Vimal.

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

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

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

treated us like part of his family.

19

Fatima

Marlene


What our employees have told us

In the process of developing this Sustainability Report, our consultant randomly engaged

members of our production team during their lunch break. The following is a summary of the

comments and criticism they shared with us:

Vimal is a good company.

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

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

We should be so lucky that we are never short-shifted and are offered overtime

and bonuses.

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

get treated right away.

There’s nothing bad about working here, that’s why I’ve lasted 12 years.

The management doesn’t come in and look over us, we have supervisors that ensure that the

work gets done.

There are lots of rules that we have to obey, like not being able to use the phone except on

breaks, and only being able to smoke on breaks.

You’re not allowed to go outside unless you’re a smoker.

Vimal is a safe place to work.

The air conditioning is either too hot or too cold, but never right. In some places its very

cold.

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

We never get short time...always get a full week’s work.

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

at the factory.

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

or absent for any reason), and if you are productive.

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

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

After 3 warnings there is no bonus.

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

we make quality name brand garments.

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

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

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

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

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

Here our boss buys us food if we have to work late.

Kali is a nice boss who doesn’t rob us.

20


7%

6%

5%

4%

3%

2%

1%

0%

Industry Average

Absentee Rate

Target

January

February

March

April

May

June

July

August

September

October

November

December

RESEARCH, MARKETING AND PROCUREMENT

As a relatively small manufacturing company, with limited access to professional

research and market analysis, we continue to remain in touch with changing

trends, designs and fabrics by making periodic overseas visits to assess and

alter the future of our products and services.

Granted, we have limited direct control over changing consumer trends due to

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

clients, and the brand- conscious environment in which they operate, to act as

a mechanism for marketing our products. Where deemed necessary, we are

pleased to assist our customers with brand-specific marketing activities when

called upon.

Our artists and designers utilise the Wilcom Embroidery system and Freehand

CAD for producing finished artwork and Embroideries that can be used to market

specific teams, competitions and events.

Our marketing is primarily restricted to proving that our services are accurate,

timely and delivered according to costing budgets. While our consistent ability

to deliver according to client expectations is our tried and tested method of proving

ourselves to be a supplier worth choosing, the management of costs is an

ongoing management challenge.

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

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

meet client price expectations.

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

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

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

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

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

client-linked quality and pricing requirements.

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

contracts are procured from local suppliers.

21

In 2007, Vimal once again failed to reach our average

target of 2.6% absenteeism. Granted, our average

rate of 3.2% was far less than the industry’s average

of 6.0%, but we believe that we can still improve to

below 2.0%.

As such, 2008 will herald the introduction of our new

bonus scheme to reduce non-illness related absenteeism.

Our plan, called ‘Qualifying for 2010’ will offer a

maximum annual bonus of 2,010 Rands to any employee

who maintains a perfect attendance record.

We hope that this new programme, which sees the

potential for employees to receive an increase in

their annual bonus payments of R810, will have

a significant impact in our ability to ensure that

our production schedules are not hindered by

unnecessary absenteeism


6

5

4

3

2

1

0

2003

2004

Injuries on Duty

2005

2006

1. HIV/AIDS

2. Knife cuts

OCCUPATIONAL HEALTH & SAFETY

2007

Cuts

Sprains

Needle Injuries

Burns

While the management and staff at Vimal consider

the company to be a ‘safe’ place in which

to work, we are nevertheless mindful of the risks

and hazards that continue to arise on an almost

daily basis. As such, we have developed and

implemented an Occupational Health and Safety

Policy that sets out our ongoing commitment to

‘Zero Harm’.

For Vimal, ‘Zero Harm’ refers to the creation and

maintenance of a work environment that is free

from the potential for illness or injury for our employees,

our clients, and our neighbours within the

Mt. Edgecombe community. In our most recent

review Hazard Identification and Risk Assessment

(HIRA), we identified the following potential

risks and hazards:

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

Sub-Saharan regions.

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

for many years to come, and Vimal is committed to ensuring that our workforce is perpetually

aware of their role in protecting themselves, and their family members, from the disease.

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

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

HIV/AIDS related deaths among our staff.

However, the relevant demographics suggest that Vimal remains vulnerable to the disease, and

therefore must remain committed to addressing the risk.

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

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

rates.

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

the following elements:

• Policy guidelines with regard to recruitment, promotion and management of illness in the

workplace, including explicit mention of non-discrimination within our Code of Conduct;

• Access to education and voluntary testing campaigns;

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

• Access to poster campaigns in bathrooms and common areas; and,

• Availability of free condoms in our restrooms.

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

cutting room staff, injuries still continue to occur.

The use of wire mesh gloves has significantly reduced the number of cuts, yet 3 new incidents

occurred in 2007.

Our hope that these injuries will be eliminated in 2008 with our switch to automated

cutting machines.

22


3. Needle pricks The greatest risk when operating a sewing machine continues to be the

potential to penetrate one’s finger with the needle.

In the past 5 years Vimal has only faced two such incidents, with no

injuries have been sustained in 2007. We attribute this to our use of

needle guards on all of our machines, our concerted effort to educate

our staff about the danger, and the role our supervisors play in ensuring

that guards are not removed.

4. Burns Heated irons, used for pressing garments during our finishing processes,

has always been an obvious risk area, resulting in one burn

incident in 2007.

This incident was devastating to our team, as all of our staff members

were proud of our five-year zero burn performance record leading up to

this incident. Although an unpleasant incident, it nonetheless reminded

us of constant need to be mindful of the risk of iron burns.

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

an unsafe height, we do operate motorized stock pickers that raise

warehouse staff to dangerous elevations. To mitigate the risk of falls,

our stock picker operators have undergone task-specific safety training,

and are required to wear safety harnesses at all times.

6. Inhalation of

harmful dust and

fumes

7. Sprains

8. Inhalation of

second-hand

smoke

No such incidents have been recorded at Vimal, yet we continue to

monitor employee behaviour to limit the risk of falls.

Vimal uses low harm and environmentally friendly chemicals wherever

possible in the various areas of operation in our business.

Although no cases of fume-related illness have thus far been reported

at Vimal, we are mindful of the potential to cause harm where solvents,

dyes and glues might be used.

As such, we have designed our new manufacturing facility with specific

attention having been paid to the provision of adequate ventilation and

air quality management.

Where task-specific higher risks persist, we ensure that face masks

and other PPE is used by all employees operating in the risk area.

The lifting of heavy bundles of fabric, the repetitive nature of specific

tasks, and the need of some employees to move about areas that could

become cluttered creates a multi-faceted risk of sprain injuries. 2007

saw once such incident occurring, but occurred during non-standard

operational activities: during the move to our new premises.

Supervisors are tasked with ensuring that employees are not operating

in an unsafe or unhealthy manner, but we accept that the nature of this

risk is more difficult to monitor.

As such, we rely on our weekly staff meetings to remind employees of

their responsibility to avoid behaviour that could place them in danger of a

sprain, as well as to ensure that their work environment remains clean and

obstacle-free.

Another addition to our working practices that began with the move to our new premises was the

installation of an Employee Complaints and Suggestions Box.

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

mechanism to raise the issue of smoking in common areas as a concern.

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

to ensure that the rights, freedoms and health of all employees, smokers and non-smokers

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

the building, but must rather exit the building and restrict themselves to a designated smoking area

adjacent to the parking lot.

23

Having cut his hand

with a mechanised

knife, Ramesh now

understands the

need to ‘think safe –

act safe’.

The height of fabric

stock shelves can

exceed 6 metres

and poses a

significant risk to

anyone operating in

an unsafe manner.


Vimal’s parking lot

could have become

a risk-laden

madhouse if not for

the decision to enter

into contractual

agreements with

transport service

providers.

9. Collisions with

moving vehicles

Each year thousands of pedestrians are killed in unnecessary road accidents in South Africa. Failure

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

such as ours, where moving vehicles are employed to complete specified tasks.

At Vimal, we employ three motorized vehicles and have clearly marked designated travel spaces

to avoid collisions between personnel and vehicles within the factory.

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

the use of strobe lights and motion sirens to alert other employees of oncoming vehicles, and the

application and supervision of rules to restrict access to areas commonly traversed by our forklift

and stock picking machines.

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

collect employees on a daily basis.

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

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

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

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

an over-sized parking lot, with an adequate number of parking bays to accommodate the

number of taxis required to drop-off and collect staff members.

Kali also entered into service level agreements with taxi operators that include clauses restricting

taxi drivers to dropping off and collecting employees from the parking lot. By ensuring that taxis

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

reduced to the limit of our abilities.

24


ENVIRONMENTAL MANAGEMENT

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

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

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

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

to monitor and manage our environmental impacts, wherever possible.

Through our participation in the contractor audits performed by many of our clients, including Adidas and Puma,

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

monitoring over a number of issues.

1. Electricity

2. Water

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

efficient consumers of electricity. Total capacity, as supplied by the national electricity provider

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

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

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

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

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

businesses that rely on electricity to operate are being forced to consider alternative strategies

to protect our interests in the event of an electricity supply crisis. The process of developing this

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

our electricity bills to determine if we are managing our electricity consumption in a manner that is

both cost-effective and environmentally sound.

Granted, our understanding of the need to monitor our electricity consumption, as well as our

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

we have used our monthly municipal rates and taxes bills to calculate our total electricity

consumption, and to evaluate our average electricity consumption per unit of production.

Electricity

Consumed (kWh)

Units of

Production

kWh per unit of

production

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

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

are uncertain of the reasons for this increase, we are committed to attempting to monitor this trend

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

and will hope that more positive results can be presented.

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

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

is considered to be an ongoing management concern at Vimal.

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

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

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

our total water consumption, and have evaluated this information relative to our total monthly

production figures. Of course, our production is not water-dependent, and therefore trends and

anomalies cannot necessarily be correlated to fluctuations in our production efficiencies, but we

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

efficiency.

%

Increase

2007 1 553 548 947 573 1.64 13.1%

2006 1 014 973 699 935 1.45 13.8%

2005 958 416 752 091 1.27

Water

Consumed (litres)

Units of

Production

25

Litre per unit of

production

%

Increase

2007 175 543 947 573 1.85 14.9%

2006 112 820 699 935 1.61 (1.1%)

2005 122 590 752 091 1.63


3. Non-hazard-

ous waste

3. Hazardous

waste

5. Recycling

5. Greenhouse

gases

The 14.9% increase in water consumption in 2007 is assumed to be directly related to our move

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

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

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

and to rectify any water wastage problems if and when they are identified.

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

been disposed of in landfills. However, we attribute this informally observed increase in waste

disposal as a direct result of our significant increase in total garment production.

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

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

committed to measure and monitor this figure throughout 2008, and to identify ways in which we

might be able to reduce our impact on landfill over-crowding.

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

• Increasing the pace of our conversion from manual cutting to computer aided design and

cutting procedures to maximise fabric usage;

• Collecting reasonably large pieces of scrap materials and distributing them to rural economic

development projects that can make use of the fabric to manufacture clothing and

other items; and,

• Collecting and recycling our scrap paper (specifically from patterns and office use) and

plastics.

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

used in our manufacturing facilities, particularly in the maintenance and operation of our facilities

and equipment.

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

of hazardous materials consumed throughout our operations,. However, we are committed to

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

to reduce our overall discharge/disposal of these materials.

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

throughout South Africa. The issue is not so much an environmental one, although the

environmental benefits are clear and potentially significant, but rather one of financial prudence.

By sticking to ‘the 3 R’s’, we stand as much to gain environmentally as we do financially, through

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

find ways to reduce our waste haulage through redirecting materials to alternative uses.

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

for both re-using and recycling materials. Our processes now include:

The donation of unusable end-cuts and/or out of fashion fabrics to local and/or rural economic

development programmes that include sewing projects.

The separate collection of paper and plastics to be collected by local recycling service

providers; and,

The collection of larger pieces of material and donating them for use in local and/or rural

economic development programmes that include sewing projects.

As the monitoring and management of our environmental impacts has become much more rigorous

with the initiation of our sustainability reporting process, we have had to establish reasonable

limits to both the development of new data management systems and improvement processes.

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

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

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

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

26


SOCIAL RESPONSIBILITY AND COMMUNITY INVESTMENTS

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

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

communities in which we operate in terms of:

1. Our employees and their families;

2. Our local communities directly surrounding our operations, and the communities in which our

employees live;

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

threaten lives; and,

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

and mission.

As mentioned above in ‘The Vimal Team’, we annually contribute to the eradication of barriers to education

among the families of our employees. This programme, which requires employees to demonstrate

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

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

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

than R113 000.

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

support initiatives. The recipients of our support included the Divine Life Centre, the Cerebral Palsy Foundation,

the Heart Foundation and St. Mary’s Hospital.

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

garments to employees, charities or local community members. In doing so, Vimal helps our clients

ensure that their brands are linked to garments of extremely high quality.

However, the process of producing this report has allowed us to identify an opportunity to donate our stock

of out of fashion and/or end-cut fabrics and threads to economic development projects in one or more deeply

impoverished communities. It is our hope that through this donation, we will be able to have a ‘material’ impact

on the sustainability of persons who are unable to secure meaningful employment, and we look forward to

providing an update on this initiative in our next Report.

27


STAKEHOLDER ENGAGEMENT

Until recently, we were unaware of the term ‘Stakeholder Engagement’. Granted, we have come to understand

that much of what we do to ensure the ongoing productivity and profitability of our company can be construed

as ‘engagement’, but we are fundamentally will to accept that our engagement processes are ad hoc, with

the exception of our customers, suppliers and employees (including their unions and the NBC). Our formal

engagement includes:

• Our weekly meetings between management and the employees and/or their representatives, to raise and

discuss issues of importance to our employees. This includes their issues/concerns being presented to

management, as well as the presentation of production results, safety briefings, and process or policy to

the employees.

• Regular meetings with customers to discuss new production trends, fabrics, designs and/or orders, as

well as any issues or concerns that either party might have with the other.

• Regular meetings with suppliers to discuss new materials and/or orders, as well as any issues or concerns

that either party might have with the other.

Ultimately, we intend to develop systems that are able to more effectively capture our engagement processes

and outcomes with the following key stakeholders (not exhaustive, nor in order of preference):

• Employees • Standard Bank • YKK Zippers

• Adidas • Berzacks • Speed Zippers

Puma • International Trimmings • Bargaining Council for the

Clothing Industry

• Mr. Price • Maxiloads

• TotalSports (Foschini) • Thai Taffeta

DTI CODES OF GOOD PRACTICE

South Africa’s Department of Trade and Industry (DTI) has launched the DTI Codes of Good Practice: a set

of business principles that are expected to promote and develop corporate behaviour that meets international

best practice standards for corporate responsibility.

The Codes come into full effect at the end of February 2008, and at the time of writing this Report, we are in

the process of undergoing a review of our status according to these Codes.

It is our belief that Vimal is, at bare minimum a Category 4 Supplier, based on our own internal assessment

of our Ownership, Management Control, Employment Equity, Enterprise Development and Socio-Economic

Development practices.

Opportunities for significant improvement may exist within our Skills Development and Preferential Procurement

practices, but we are confident that these issues can be reasonably controlled and/or explained due to

the size and nature of our business.

Vimal is committed to completing a full assessment of our Codes status within the first half of 2008, and we will

discuss this assessment in our 2008 Sustainability Report.

28


HUMAN RIGHTS

Vimal is a small family-owned business that has not necessarily been called upon to investigate and/or ascribe

to any international conventions regarding Human Rights. However, as a South African company, we are both

obliged and committed to living up to our national Constitution, and to respecting all laws, including those pertaining

to the fair treatment of employees.

Vimal falls under the watchful eye of the National Bargaining Council for the Clothing Industry, as well as SACT-

WU, the South African Clothing and Textile Workers Union, and we actively encourage and support employee

participation in both of these rights bodies. Moreover, we aspire to meet or exceed the Bargaining Council’s

Collective Agreement rules, recognizing that these rules are merely base level guidelines, and that exceeding

them, within reasonable limits, has created a work environment that encourages reciprocal trust, respect and

commitment between management and our employees.

Shop stewards are aware of the rules and they attend Union meetings on behalf of Vimal. If any problems are

raised by our workers, the stewards have the right, and responsibility, to address them with the Bargaining

Council or Union, without being victimized.

Vimal does not hire child and/or forced labour, nor do we allow any of our suppliers or sub-contractors to engage

in these practices.

Vimal’s security personnel are contracted through the business park in which we are situated, and we have not

been informed of any incidents of excessive use of force by security personnel, nor would we be willing to allow

such behaviour to persist in the exercising of their duties on behalf of Vimal.

LESSONS LEARNED AND THE WAY FORWARD

This is the first time Vimal has attempted to produce a Sustainability Report, and if not for the support and

encouragement of Trialogue we highly doubt we would have been able to generate such a comprehensive

overview of our company, our most material issues, and our opportunities to improve our social, safety, environmental

and economic performance.

One must understand that as a family-owned business, our efforts have always been firmly invested in ensuring

that our customers and employees are ‘happy’, and that our business remains financially strong and

healthy. Although we now recognise that our data management systems were not necessarily giving us all of

the information we might have needed to maximise our efficiencies, we were nonetheless in a position to find,

and analyse, information for the purpose of informing our wide range of stakeholders.

In short, the process of developing this Report has been a lengthy learning exercise, yet we quickly realized

that the process of reporting affords significant benefits in terms of being able to use statistics to evaluate

our performance, including the conducting of comparisons, particularly with respect to issues that are directly

related to our employees.

This process has created an opportunity for us to re-think our bonus structures to encourage full attendance

and to motive the employees to attend work regularly. It has also assisted us with attempting to identify problems

within our business, as well as to find ways to address them.

In speaking to our staff, Trialogue has helped us better understand the issues that they have apparently felt

unable to bring to our attention, and has helped create mechanisms for addressing each of their concerns.

As a direct result of the reporting process, we are now committed to:

• Reducing the amount of solid waste we send to landfills sites by:

- Increasing the pace of our conversion from manual cutting to computer aided design and cutting

procedures to maximise fabric usage;

29


- Collecting reasonably large pieces of scrap materials and distributing them to rural economic

development projects that can make use of the fabric to manufacture clothing and other

items; and,

- Collecting and recycling our scrap paper (specifically from patterns and office use) and plastics.

• Monitoring our electricity and water consumption figures, normalised to units of production, to ensure that

Vimal uses both of these scarce resources in as efficient a manner as possible.

• Creating a mechanism for employees to access some form of catering services, most likely in a designated

section of our parking lot (away from our residential neighbours).

• Creating an additional (external) mechanism for employees to communicate complaints and/or recommendations

to the management team.

• Donating up to 50 of our older sewing machines to a fledgling rural economic development centre run by

Cotlands, a national HIV/AIDS charity, in a community directly affected by rampant unemployment and an

HIV-infection rate in excess of 60%.

• Clearing out our warehouse and donating surplus fabric and accessories to economic development

projects that can produce goods to assist in their own sustainability.

• Reviewing and updating this Report on an annual basis, using the tools and knowledge we have gained

this year to improve our data collection, collation and reporting procedures.

REQUEST FOR FEEDBACK

Because this is our first attempt at producing a Sustainability Report, we are mindful of the possibility that we

have not provided a comprehensive discussion of the information that is important to our many stakeholders.

As such, we are hopeful that you, the reader of this Report, will contact us and offer us your views on the quality

and usefulness of this Report.

Should you have any questions about our company, or comments about anything contained within this report,

please contact Khemie via email to at khemiep@vimal.co.za

30


Standard Disclosures

GRI G3 APPLICATION LEVEL REQUIREMENTS

As a first attempt at applying the GRI G3 guidelines to our Sustainability Report, Vimal has decided to seek a

C+ level of application. The following three tables provide a summary of the GRI’s requirements as well as a

quick reference to our self-assessment of compliance to the C+ level.

For an indicator-by-indicator discussion of our Report’s compliance to all of the required indicators, please

email nayan@vimal.co.za. For details of the process employed by Trialogue Assurance Services to afford

Vimal the required Third Party Assurance over this Report, please email michael@trialogue.co.za.

Report Application Level C C+ B B+ A A+

G3 Profile

Disclosures

G3

Managment

Approach

Disclosures

G3

Performance

Indicators &

Sector

Supplement

Performance

Indicators

* Sector Supplement in final version

Report on:

1.1

2.1 – 2.10

3.1 – 3.8, 3.10 – 3.12

4.1 – 4.4, 4.14 – 4.15

31

Report Assured by Trialogue Assurance Services

Report on all criteria

listed for Level C plus:

1.2

3.9, 3.13

4.5 – 4.13, 4.16 – 4.17

Not Required Management Approach

Disclosures for each

Indicator Category

Report on a minimum

of 10 Performance

Indicators, including at

least one from each of:

social, economic, and

environment

Report on a minimum

of 20 Performance

Indicators, at least one

from each of: economic,

environment, human

rights, labour, society,

product responsibility

Report Externally Assured

Same as requirement for

Level B

Management Approach

Disclosures for each

Indicator Category

Respond on each core

G3 and Sector Supplement*

indicator with due

regard to the Materiality

Principal by either: a)

reporting on the indicator

or b) explaining the

reason for its omission

Report Externally Assured

Mechanised

embroidery is an

important valueadding

service for

our clients.


VISION & STRATEGY ECONOMIC SOCIAL

Strategy and Analysis

Core Additional Core Additional

Economic Performance Employment

1.1 EC1 LA1 LA3

1.2 EC2 LA2

Organisational Profile

EC3 Labour/Management Relations

EC4 N/A LA4

2.1 Market Presence LA5

2.2 EC6 EC5 Health and Safety

2.3 EC7 LA7 LA6

2.4 Indirect Economic Impacts LA8 LA9

2.5 EC8 N/A EC9 Training and Education

2.6

LA10 LA11

2.7

ENVIRONMENTAL

LA12

2.8 Materials Diversity and Opportunity

2.9 EN1 LA13

2.10 N/A EN2 LA14

Report Profile Energy Strategy and Management

3.1 EN3 EN5 N/A HR1 HR3

3.2 EN4 EN6 HR2

3.3 EN7

3.4 Water Non-discrimination

Report Scope and Boundary

3.5 Biodiversity

EN8 EN9 N/A HR4

EN10 N/A

3.6 EN11 EN13 N/A HR5

32

Freedom of Association and Collective Bargaining

3.7 N/A EN12 N/A EN14 N/A Child Labour

3.8 N/A EN15 N/A HR6

3.9 Emissions, Effluents and Waste Forced and Compulsory Labour

3.10 N/A EN16 EN18 HR7

3.11 N/A EN17 EN24 N/A Security Practices

GRI Content Index EN19 EN25 N/A HR8

3.12 EN20 N/A Indigenous Rights

Assurance EN21 N/A HR9 N/A

3.13 EN22 Community

Governance, Commitm ents and

Engagement

EN23 N/A SO1

Products and services Corruption

EN26 SO2

4.1 EN27 SO3

4.2 Compliance SO4 N/A

4.3 EN28 N/A Public Policy

4.4 Transport SO5 SO6 N/A

4.5 N/A EN29 Anti-competitive Behaviour

4.6 N/A Overall SO7 N/A

4.7 N/A EN30 Compliance

4.8 SO8 N/A

4.9 Customer Health and Safety

4.10 N/A PR1 PR2 N/A

Commitment to External Initiatives

Products and Services

PR3 N/A PR4 N/A

4.11 N/A PR5

4.12 Marketing Communication

4.13 PR6 N/A PR7 N/A

Stakeholder Engagement

Customer Privacy

4.14 Compliance

4.15 PR9 N/A

4.16

4.17 N/A

GRI CONTENT INDEX

For our complete GRI G3 responses table, including a map of our content, please email

khemiep@vimal.co.za.

Included

Not included, potential improvement area

Included, but requires future improvement

Not applicable

PR8 N/A


NON-INDEPENDENT ASSURANCE STATEMENT

To the Owners and Management of Vimal Clothing cc (hereafter, ‘Vimal’):

Trialogue Assurance Services (hereafter, ‘TAS’) was engaged by the Global Reporting Initiative (GRI) to assist

Vimal, and two other South African suppliers of Puma AG, with the development of this Sustainability Report.

This project, entitled “Transparency in the Supply Chain,” required that TAS assist the three participating companies

develop an understanding of Sustainability Reporting, and help to facilitate the development of this

report.

Because of our involvement in the development of this report, TAS is not in a position to provide ‘Independent

Third Party Assurance’ over the contents herein. However, it has been duly noted that the data presented

neither belongs to TAS, nor was supplied by TAS, and therefore our review of this information still positions us

to provide Vimal, and its many stakeholders, with this ‘Non-Independent Assurance Statement’ over the content

of this 2007 Sustainability Report, ‘the Report’.

The Report presents Vimal’s sustainability performance over the period 1 January to 31 December 2007, including,

where available, sustainability trend data for previous years. This statement represents our assurance

opinion. TAS’s responsibility in performing its assurance activities is to the management of Vimal alone and in

accordance with the terms of reference agreed with them.

Assurance objective

The objective of the assurance process is to provide stakeholders of Vimal with a ‘Limited Assurance’ opinion

on general accuracy and completeness of the information presented in this Report. This is confirmed through

multiple reviews of the data submitted by Vimal and the underlying systems, processes and competencies that

support the Report.

Scope of work performed

Review of quantitative content of the Report

Among other duties, TAS was engaged to assist Vimal with assessing the completeness, accuracy and consistency

of the data contained within this report, and to test that assertions made within the report can be deemed

both ‘reasonable’ and ‘supportable’ by the relevant sustainability data presented herein. Moreover, TAS was

charged with testing drafts of the Report to determine the degree to which it was consistent with the reporting

requirements of the GRI G3 Guidelines.

TAS limited the scope of the assurance process to a ‘limited assurance’ review of the quantitative data submitted

by the management team at Vimal, for collation and reporting herein, as well as the Reports alignment to

the GRI’s G3 reporting guidelines

Assurance methodology

The process used in arriving at this assurance statement is based on the GRI’s G3 guidance and other best

practices in sustainability reporting assurance. Our approach to assurance included the following:

• a review of Vimal’s sustainability measurement and reporting procedures, background documentation

and data collection procedures;

• a review of the data submitted for inclusion in the Report for any significant anomalies; and,

• an examination of the aggregation and/or derivation of, and underlying evidence for, data and statements

included in this Report.

In determining the GRI G3 application level of the Report, we performed the following exercises:

• Assisting in the drafting of the Report to ensure that the content of the Report, including discussions

regarding the determination of sustainability context and coverage of material issues, was duly aligned

with GRI G3;

33


• A review of the approach of management to addressing topics discussed in the Report; and

• A confirmation that at the requisite number of performance indicators had been covered in the Report.

Independence

Because TAS was engaged to provide report development assistance to Vimal, through the engagement of

TAS by the GRI as the South African consultants on the ‘Transparency in the Supply Chain’ project, ours is

not an ‘Independent’ assessment of this Report. Our involvement with Vimal significantly hinders our ability

to remain fully independent, but does not necessarily preclude us from offering some form of assurance to

stakeholders.

Because Vimal is a relatively small organisation, it was determined that Vimal cannot afford to seek external/

independent third party assurance. However, the involvement of TAS is reviewing Vimal’s data allows us a

unique insight into the content of this Report, and permits us an opportunity to make comment over the accuracy,

consistency and completeness of the data contained herein.

Findings

In general, Vimal’s sustainability reporting processes are adequate to meet the GRI’s G3 ‘Application Level C’.

However, it was found that:

• Vimal’s process to identify its ‘Most Material Issues’ was informal in nature, albeit improved through this

reporting process, and the company still requires a formal process to actively engage stakeholders on a

ranged of ‘sustainability-specific issues’;

• Although significant steps have already been taken to improve the quantity and quality of meaningful data

(particularly production efficiency and environmental data), more work needs to be undertaken to ensure

that Vimal sets and achieves specific sustainability performance targets;

• Vimal has not yet undertaken to complete an assessment of its compliance to the DTI Codes of Good

Practice (fully implemented as of the end of February 2008).

Recommendations

• Vimal should ensure that stakeholders (internal and external) are adequately engaged to comment on this

Report and/or to inform the content of the next Report.

• Vimal should actively engage its key stakeholders to ensure that the company is effectively addressing

stakeholder-specific concerns, and that any ‘new’ issues are incorporated into Vimal’s ongoing sustainability

strategy.

• Vimal should undertake to complete its compliance to the DTI Codes of Good Practice within the 2008

calendar year, in order to enhance the quality and/or relevance of this report relative to local stakeholder

expectations.

• Vimal should ensure that future reports include improvements in the quality of data, particularly those

pertaining to the DTI Codes of Good Practice and the environment.

Opinion

For all data under review, errors identified during our assessment were addressed by Vimal prior to finalising

this Report, and nothing came to our attention to lead us to believe that the final data is not reliable. As a result,

we believe that the sustainability data in this Report gives a fair representation of Vimal’s sustainability performance,

and that this report adequately represents a GRI G3 C level report.

Trialogue Assurance Services

29 February 2008

34


CONTACT DETAILS

Vimal Clothing Enterprise C.C.

Tel: +27 31 538 2400

Fax: +27 31 539 6874

Address: Fairways Park

4 Fairways Avenue

Mount Edgecombe

Durban

South Africa

4300

Contact Person: Miss Khemie Prithipal

Khemiep@vimal.co.za

The graphic design and layout of this Report was

completed by Candice Ekermans, our Johannesburg-based

independent design consultant.

We are very pleased to support Candice with this

project, as she is a living testament that courage

and tenacity can overcome all challenges.

Although one might not notice it when reviewing this

Report, Candice is legally blind, which for others might

have suggested no future in the field of marketing

materials development.

We hereby wish to compliment and thank Candice

for her excellent work. Candice can be contacted at

minxgraphics@gmail.com.

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