IMPAHLA CLOTHING

Transcription

IMPAHLA CLOTHING

INTEGRATED ANNUAL REPORT 2014
PUMA World Cat Strategic Supplier
IMPAHLA
CLOTHING
In April this year, Impahla turned 10 years old. From humble beginnings operating from
rented premises, a small team of 22 employees have remained core to the business and
have grown and developed along with it. Each 10 Year team member was honoured at an
award ceremony, held on 20 April 2014 (see page 52).
COVER PICTURE: Impahla 10 year team. Four employees were not present for the
presentation of the 10-year certificates: Lydia Makalima and Sharon Weitz from Epping,
Lorraine Pretorius was sick and Patrick Dukes was absent.
IMPAHLA
CLOTHING
2014
for the period March 2013 to February 2014
SPRING ROMANCE PROPERTIES 34 (PTY) LTD T/A IMPAHLA CLOTHING
Head office: Unit 10, Maitland Business Park, 1 Mowbray Road, Maitland 7405, Cape Town, South Africa
Postal address: P O Box 921, Maitland 7404, Cape Town, South Africa
Telephone: + 27 (21) 510 4201 Fax: +27 (21) 510 4257
ABOUT THIS REPORT
This report looks at both the financial and nonfinancial performance of Spring Romance Properties
34 (Pty) Ltd trading as Impahla Clothing over the
period 1 March 2013 to 28 February 2014.
Scope and boundary
The report covers all the operational entities
owned, part-owned or leased by Impahla and
its shareholders. The organisational boundary is
illustrated in the Impahla organisational chart on p 7.
No related entities are excluded from this report.
While Impahla has considered its ability to influence
entities upstream and downstream of its operations,
(see ‘Extending responsibility in the supply chain’ p
33), these fall outside the boundary for reporting.
There are no joint ventures, subsidiaries, or
outsourced operators that would be relevant for
inclusion in this report.
Reporting against the GRI G4
This is our third annual integrated report. Last year we
achieved a GRI G3 Application Level A+.
This year Impahla is making a transition towards
the Global Reporting Initiative’s (GRI) latest GRI G4
reporting guidelines. This report contains standard
disclosures from these guidelines. We have also
incorporated some of the key principles of reporting
as put forward by the International Integrated
Reporting Council (IIRC) in their <IR> Framework.
A comprehensive indicator-by-indicator GRI index
table of our report’s compliance is available from
page 62.
Other reporting changes
• In accordance with GRI G4 we discuss our
stakeholders and how we determined our material
issues in more detail than in previous years in
Chapter 3.
• We have also included two new management
issues in this report, namely: Maintaining
equipment, and Improving customer relations on
page 41 and 42 respectively.
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IMPAHLA CLOTHING
• Minor restatements of last year’s data was
necessary and clearly noted where applicable.
• In 2011 we aligned our reporting year to run from
March to February instead of January to December
in line with our financial year. Where we refer to
2012, 2013 and 2014 in this report, we mean the
2011/12, 2012/13 and 2013/14 financial years
respectively, unless stated otherwise.
No external assurance this year
Best practice makes use of a combined assurance
model consisting of three tiers: reflecting materiality
in company strategy, internal checks and balances,
client audits and external assurance.
Accountants On Site verified our B-BBEE data and
external auditors, Marais & Vennote, audited our
financial statements that was prepared in accordance
with the International Financial Reporting Standards
(IFRS). The auditor’s report and our financial
statements can be found on pages 58 - 61.
Annually PUMA, Adidas and the National Bargaining
Council (NBC) conducts external on-site audits that
include the verification of many of the indicators we
report on annually. We discuss these audits in more
detail on pages 30 - 31.
We externally assured various indicators in our
last year’s report, but have not externally assured
any indicators during the 2013/14 reporting cycle.
However, throughout the report we disclose the
names of the external entities we have engaged
during the year to audit, verify and ensure that we
comply with regulatory requirements and follow
best practice.
The Impahla board remains accountable
The Impahla board acknowledges its responsibility
to ensure the integrity of the integrated report and
believes that it addresses all material issues, and fairly
presents the integrated performance of the company.
Your feedback, comments or queries regarding this
report can be directed to [email protected] or
contact us on +27 21 510 4201.
CONTENTS
About this report
2
Chapter 1: The Business
4
Performance at a glance
6
Introducing Impahla
7
William Hughes relates Impahla’s value creation story
10
Impahla timeline 2004 - 2014
12
Chapter 2: Governance
14
Board of directors
17
What Impahla stands for
18
Governance and decision-making
19
Stakeholder engagement
20
Determining what we should manage
22
Chapter 3: Our material issues
24
Overview of material issues
26
Servicing our customers
29
Our people
35
Managing growth
40
Creating and sharing economic value
43
Environmental protection
46
Chapter 4: The heart of Impahla
50
10 years of service
52
Employee awards
53
Our people
54
Appendices
57
Financials58
GRI G4 content Index
62
3
CHAPTER 1
4
IMPAHLA CLOTHING
THE BUSINESS
CHAPTER 1 THE BUSINESS
Performance at a glance
C
elebrating our 10th anniversary in 2014 as well as six years of being a carbon neutral business.
Certified ISO 9001: 2008 compliant from October 2013. Awarded first place in the Job Creation
category and first place for Sustainability in the 2013 Industrial Development Corporation’s Business
Partner Awards. The total prize money of R250 000 was used to expand our production capacity with
the addition of six heat presses.
Manufactured sporting kits for national, club, university and school teams participating in local sporting events, Super
Rugby, Currie Cup, Premier Soccer League of South Africa, 2013 CAH African Cup of Nations and the 2014 FIFA World
Cup as well as replica kits for supporters.
Governance
●●
Ronald Rink was appointed as the new chairman
of the board in January 2014. His long history with
PUMA, dating back to the 1970s, and his experience
and knowledge gained through heading up the
Puma subsidiary in South Africa since 2001, will add
immense value to us as Impahla continues to grow.
●●
Average lead time was 96 days, well within our
contractual four months period.
●●
Expect to improve on our A and B ratings across our
factories in PUMA’s upcoming 2014 audit.
People
●●
Employee numbers nearly doubled to 452 over the
past two years on the back of a 12% increase from
last year. Employee turnover for the year increased
marginally to 28% (2013: 26%).
●●
Impahla pays full NBC rates, despite many peers in
the local clothing industry paying rates as low as half
these rates.
●●
Absenteeism marginally increased from 1.5%
to 1.6%.
●●
Scored 93% and above for all our factories during
an independent occupational health and safety risk
assessment.
●●
Better injury monitoring resulted in an increase in our
Total Injury Frequency Rate score to 43.1 injuries per
200 000 hours worked (2013: 13.52).
●●
Under the new B-BBEE codes we could not maintain
our Level 7 contributor status and became a noncompliant contributor.
Financial performance
●●
Achieved a gross profit margin of 30% (2013: 34%),
while turnover doubled to R76 million over the past
two years.
●●
Operating profit dropped to R1.3 million (2013:
R5.3 million).
●●
Year-end inventory grew 39% to R24 million (2013:
R17.6 million) mainly funded by an increase in trade
and other payables as well as overdraft facilities.
Managing growth
●●
Total capital expenditure amounted to R3.1 million
(2013: R6.6 million).
●●
Awarded a R2.5 million grant through the IDC’s
Production Incentive Programme.
●●
Increased production floor space by approximately
1 500 m2 by installing a high performance roof and
better lighting at our Elsies River factory.
●●
Started Kit Creator, a new concept introduced by
PUMA whereby we produce garments with production
lead times of six weeks or less.
●●
Partitioned off our product development division from
our main production by installing a dedicated sample
line and appointing a product development manager.
●●
Ninety percent of input material is sourced from
PUMA approved suppliers.
●●
Initiated a LEAN manufacturing programme to
improve efficiencies throughout the business.
Satisfying customers
●●
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IMPAHLA CLOTHING
Product delivery performance was satisfactory at 90%
(2012 calendar year: 99%), although below our selfdeclared 95% target.
Environmental
●●
Maitland-based energy system with 131 solar panels
continues to generate approximately 50 MWh per
annum or 5% of the annual electricity usage across
the whole business.
●●
Electricity usage per employee hour worked doubled
over the past two years from 0.50 kWh in 2012 to
1.02 kWh due to the addition in 2012 of powerhungry socks manufacturing line.
●●
Carbon emissions intensity increased by 14% to 0.76
kg CO2e per employee hour worked.
●●
Funded the planting of 2 027 (2013: 1 492) trees by
Food & Trees for Africa to offset our carbon emissions.
●●
Water usage per employee hour worked increased to
3.06 litres (2013: 2.83 litres).
Introducing Impahla
I
mpahla Clothing (Impahla) is a South African-based
company that manufactures sports and lifestyle
apparel, socks, collars and trims, as well as fabrics, and
offers a range of branding services including embroidery,
sublimation, heat transfers and screen printing.
OWNERSHIP STRUCTURE
Paul Visser
Non-executive (Non-executive, non-operational,
silent investor living in the USA)
Privately owned, with its head office based in
Maitland, Cape Town, Impahla has grown
organically over the last 10 years from an
ailing business with 40 employees in 2004
to a stable operation with 452 employees,
focused on the diverse needs of its clients.
Lena Jansen*
Production director
Ronald Rink
Chairman
of the board
Impahla has geared its operations to
the highest international standards and is
PUMA’s first locally engaged World Cat Strategic
Supplier. This achievement has seen the company
benefit from a steady stream of orders from PUMA,
effectively providing sustainability for the company and its
stakeholders.
William Hughes
6.75%
Managing director
6.75%
33.75%
10%
11.25%
Kevin Alberts
Socks director
11.25%
20.25%
Carl Visser
Branding director
Sean Thomson
Fabrics director
Impahla means ‘clothing’ in Xhosa and the logo is the Flame
lily, a flower that is most prominent in Zimbabwe, and which
represents the spirit and intentions of the company. Having
grown up in Zimbabwe, William Hughes (managing director)
remembers the Flame lily as a beautiful African flower that
embodies the essence of the company.
* Lena Jensen is considered a ‘historically disadvantaged’
South African, being both coloured and female.
Organisational structure
IMPAHLA
Contribution to revenue
IMPAHLA
CLOTHING
IMPAHLA
BRANDING
83%
IMPAHLA
FABRICS
2%
288
Number of employees
Executive leadership
IMPAHLA
SOCKS
10%
5%
55
109*
William Hughes – Managing director
Lena Jansen
Production director
Carl Visser
Branding director
Sean Thompson
Fabrics director
Kevin Alberts
Socks director
Description
Impahla head office together with eight
production lines and an embroidery section.
Produces mainly fabric,
collars and trims. Added
two garment production
lines. Tomotex merged with
Impahla in 2012 and was
renamed Impahla Fabrics.
Impahla Socks started in
2012, and is responsible
for sock production,
screen printing and
sublimation. One
garment production line
was installed in January
2014.
Location
Maitland (Head office)
Epping
Elsies River
* At Elsies River 63 employees work in the sock factory, the rest of the employees are involved in the manufacture of garment and
branding, contributing to the clothing division‘s revenue.
Geographic location
We operate only in the Western Cape, South Africa.
Approximately 99% of our products are sold and
distributed throughout South Africa. We export fabric to
Namibia and socks to Australia.
Head office location
Unit 10 Maitland Business Park, 1 Mowbray Rd, Maitland,
Cape Town.
Elsies River
Maitland
CAPE TOWN
Epping
WESTERN CAPE
7
Product lines
Apparel
Fabrics
The complete manufacture of garments to order.
The manufacture of fabrics for both internal uses in
production and external customers.
Blanks branded
A quick response business where blank garments (held
speculatively in stock) can be quickly converted to
product with screen-printing, heat-transfer or embroidery
to meet orders with short lead times. Impahla has taken
over PUMA’s entire SA blank programme.
Socks
The manufacture of socks.
Printing and embroidery services
The finishing of garments through screen printing, heattransfer and embroidery for both in-house and external
customers.
Collars and trims
The manufacture of collars, cuffs and ribbing for garments
for both in-house and external customers.

“If anybody is sick or anybody is in
trouble, everyone will help and put
something towards helping them. It is
like a family.”
Impahla employee
8
IMPAHLA CLOTHING
9
William Hughes relates Impahla’s
value creation story
Impahla is 10 years old
Absorbing our supply chain
A
Our mission to take control of our supply chain by
vertically integrating and acquiring several businesses
has been realised. Bringing on board new businesses in
fabrics, embroidery and socks has been fruitful and we
are satisfied with how these divisions are progressing. Our
new sublimation division has experienced some teething
issues, but we are optimistic about the value it brings
to the business, by enhancing our competitiveness and
creating jobs.
t this significant anniversary, it is appropriate to take
some time to reflect on our journey as a business.
We have come a long way since our humble beginnings
in 2004. As an ailing company, with 60 employees,
the business was producing standard quality T-shirts
for its customers. Now, we are a thriving carbon neutral
operation with 452 employees, three factories and an
annual turnover of greater than R70 million.
We have blossomed during a time that the local clothing
and textile industry in South Africa has been struggling –
incapable of staying competitive on the back of lacklustre
local productivity and the influx of cheap international
alternatives from the Far East. In the past year, we have
manufactured sporting kits for national, club, university
and school teams participating in an array of events, from
local sporting events to Super Rugby, Currie Cup, Premier
Soccer League, 2013 CAF African Cup of Nations, the
2014 FIFA World Cup, as well as replica kits for many of
their supporters.
We are appreciative of the recognition we received from
the Industrial Development Corporation (IDC), which
awarded us first place in the Job Creation category, as
well as first place for Sustainability at the 2013 Business
Partner Awards event. It is a tribute to the values and
principles on which Impahla has been built and which we
share with our key clients.
Quality and fairness in relationships, and quality and
fairness in the work we deliver, have formed the bedrock
of our business and will continue to define what we call
responsible.
Rapid organic growth
Our revenue increased 25% to R76 million (2013: R 61
million) with the mergers and acquisitions made during
the previous financial year now making a full year’s
contribution to our financial accounts. Impahla Clothing
remains our core business, accounting for 83% of our
revenue, while Impahla Fabric, Socks and Branding make
up the balance.
The 2012 expansion and further developments during
this year, have of course, required significant investment,
and capital outlay in the past year amounted to
approximately R6 million. This is yet to be translated
into profit. While revenue grew, operating profit fell from
R5.3 million in 2013 to R1.3 million for this financial year.
For the first time in five years, our after-tax return on
investment decreased - resulting in a net profit margin of
only 1.4% (2013: 7.2%).
We are however confident that we have laid a solid
foundation off which Impahla will thrive over the
coming years.
10
IMPAHLA CLOTHING
This focus on growing the business has resulted in an
increase in our employee component by a further 12%
compared to 2013, while other businesses in the textile
industry have continued to shed jobs.
Empowering our people
Growth in our business has placed increasing pressure
on our management team. We are currently focused
on building management capacity to mitigate our risk
exposure in the areas in which we are currently
under-equipped.
In addition to management training, we have appointed
Ronald Rink as chairman and look forward to capitalising
on his years of experience in the industry he built up
through his long and successful tenure at PUMA. We
have also appointed a new manager as head of product
development (another expanding division within the
business) and started building our talent pipeline by
grooming high potential individuals within the business.
We are steadily working towards implementing a workers’
trust scheme at Impahla. We believe this is vital to
achieving the buy-in from employees, which is necessary
to make the business a real success. We have made
initial advances to the IDC for funding this structure, and
aim to have this established by the close of the next
financial year.
Working capital efficiency
Our working capital requirements have grown
substantially, in particular due to the stock we need to
hold as a result of our expansion. We have implemented
the new Kit Creator programme to reduce production
lead times. As a result inventory grew 39% to R24 million
(2013: R17.6 million), funded mainly through similar
increases in trade and other payables, and modest use of
available overdraft facilities.
This requirement for working capital is a necessary burden
on the business and we continue to be well supported
by the IDC and our bank. Both also offer Impahla access
to additional funding for further capital expenditure. ‘Soft
loans’ from the IDC, set at prime minus five per cent, will
enable us to take advantage of opportunities as they arise.
Focused consolidation and optimisation
In the short term, we look forward to a period of
consolidation in order to fully utilise our new assets. The
focal point of the next financial year will be to improve our
production efficiency, throughput and on-time delivery
without compromising on quality.
We have already engaged external expert support and
will start implementing a continuous improvement and
LEAN production programme in 2014. Instilling the
right mindset by integrating the principles of continuous
improvement into Impahla’s culture will undoubtedly help
us unlock the potential of our investments for the benefit
of our customers, our employees and for the business as
a whole.
We are keenly aware of the need to keep our eyes on the
ball in terms of optimising our production and managing
our costs. This said, possibilities for further expansion do
exist; however, these will be closely scrutinised before
making any decisions.
Remaining transparent
Transparency is vital to the sustainability of Impahla, and
we credit our success to our inclusive and transparent
business model.
In this report, we discuss our key risks and opportunities,
and communicate how we run our business. It is
written as much for ourselves as it is for our external
stakeholders, for it serves as a yardstick against which
we can measure and reflect on our progress from year
to year.
I’d like to thank the board members for their leadership
and guidance, our management team for their
commitment, and all our employees for their continuous
hard work – together making Impahla a successful
business and a rewarding place to work.
I look forward to another successful year and, together
as a team, overcoming the challenges we will face along
the way.
William Hughes
Managing director
11
Impahla timeline 2004 – 2014
2008
●● Employees complement dropped to 88.
●● Production increased to 176 000 manufactured
garments and 61 000 branded products.
●● Late coming bonus introduced to curb late
arrivals.
●● Appointed “Strategic Supplier” to PUMA. The first
and only African manufacturer to achieve this.
●● Recipient of 2007 Sustainability Reporting Award
from the ACCA.
●● First clothing manufacturer in South Africa to
achieved carbon neutrality; offsetting emissions
by planting 493 trees through Food & Trees for
Africa.
●● Exported 23 000 PUMA Peace One Day tees to
five continents worldwide.
●● Attended and presented at GRI conference in
Amsterdam.
●● Experience first lost time injury, resulting in the
loss of three person days. Injury was a fall and
not production related.
●● Woven product manufacturing introduced.
●● Second sustainability report completed.
2004
●● Purchased the assets from the
Cape Town T-Shirt Company.
●● Started 19 April with 40
employees out of rented
premises in Lansdowne.
●● Lena Jansen appointed
director and awarded 10%
shareholding in Impahla.
●● Customers included PUMA,
Adidas, New Balance, Levi’s and
Cape Union Mart.
2004
2005
2006
2005
●● Carl Visser purchased a 30% share and Paul
Visser a 10% share in Impahla.
●● Started branding division with the purchase of a
MHM automatic printing machine from Austria.
●● First PUMA S.A.F.E. Audit and awarded a B-.
●● Production included specialist athletic kit for
schools in Jamaica, apparel for the Cape
Epic, Volvo Ocean Race and replica kit for the
Botswana national football team.
2007
IMPAHLA CLOTHING
2009
2010
2007
●● Purchased and moved into larger premises in Maitland.
●● Increased employee complement to 98.
●● Absenteeism recorded at less than 3%, well below national and local
benchmarks in excess of 6%.
●● Production tops 150 000 garments.
●● Produced first sustainability report.
●● Maintained A level PUMA S.A.F.E. status.
●● First recorded needle prick injury, with no lost production days.
●● Started PUMA Blanks programme.
2006
●● Second PUMA S.A.F.E. Audit and
became the first African factory to
obtain A status.
●● Invited by PUMA to participate in
“Transparency in the Supply Chain”
project which taught Impahla the
concept of sustainability and how
to write a sustainability report. This
project was funded by PUMA, and the
German Development Corporation
and co-ordinated by the GRI.
●● Delivered 20 000 units of replica for
the Angolan national football team for
the FIFA World Cup.
●● Introduced sick leave bonus to curb
absenteeism.
12
2008
2010
●● Employee complement increased to 192.
●● Production increased to 300 176
garments manufactured and 165 683
branded products.
●● Winner in the ACCA Sustainability Awards.
●● Attended and presented paper on
Stakeholder Engagement at the 2010 GRI
conference in Amsterdam.
●● Planted 663 trees.
●● Promotion from within policy resulted in
seven internal promotions.
●● Provided learnerships for two candidates
and conducted 994 hours of training for
employee members.
●● Produced FIFA World Cup replica jerseys
for Ghana, Ivory Coast, Cameroon, Angola
and Algeria.
●● Late arrivals remained well below our
target of 1%, coming in at 0.58%.
●● Opened up additional three woven
lines, resulting from a 20% increase in
production floor space.
2009
●● Production increased to 244 720 garments manufactured
product and 123 037 branded products.
●● Runner-up in the ACCA Sustainability Awards.
●● Attended and presented paper at PUMA summit in Berlin.
●● Planted 567 trees in Khayelitsha.
●● Completed HIV and Aids awareness campaign.
●● Introduced bi-annual ear testing for employees in the
embroidery division.
●● Water consumption dropped to 1.86 litres per garment,
from 3.31.
●● Third sustainability report completed.
2012/13
●● Production increased to 1 584 046 units.
●● R6.6 million spent on new equipment and machinery.
●● Planted 1 492 trees.
●● Training spend increased by 40%.
●● Acquired Primi Embroidery to bring all embroidery outwork
inhouse.
●● Purchased sublimation equipment to cope with the increasing
demand for rugby sublimation.
●● Merged with Tomotex, a fabric and trims manufacturing company.
Sean Thompson and Kevin Alberts appointed to the board.
●● Purchased the assets out of liquidation of Millennium Socks. Started
to manufacture socks in Elsies River factory in November 2012.
●● Opened two new lines at the Epping factory to manufacture cotton
products.
2011
2012
2011/12
●● Employees complement increased to 234.
●● Production increased to 445 000 garments for a 14-month
reporting period.
●● R4.7 million spent on new equipment and machinery, including
a Gerber Accumark pattern making, grading, marker making,
laying up and cutting system.
●● Produced exclusively for PUMA.
●● Planted 651 trees.
●● Absenteeism improved from 2.67% to 1.4%.
●● Installed an IDC-funded 30 kWp solar photovoltaic plant,
supplying approximately 25% of our electricity requirement at
the Maitland plant.
●● Attended and presented a paper at the PUMA Supplier
Conference in Vietnam.
●● Took control of PUMA’s entire blank programme, including
purchasing and warehousing.
2013
2014
2013/14
●● Certified ISO 9001: 2008 compliant from October 2013
●● Employee complement increased to 452 employees.
●● Production increased to 2 073 148 units, a 31% increase from 2013.
●● Plant 2 027 trees in previously disadvantaged areas.
●● Purchased assets from Market Demand, including additional sublimation
equipment.
●● Moved entire branding division to Elsies River factory.
●● Generated 108 MWh of electricity to date from PV system.
●● Ronald Rink acquires 10% shareholding of Impahla and joins the board as
chairman.
●● Purchase 23% stake in Kitunda Properties, which owns the Elsies River
factory.
●● Approached by Asics to manufacture Springbok apparel.
●● Opened new line at Elsies River to manufacture other brands including Asics.
●● Approached by BLK to manufacture Sharks replica kit. Manufacturing done at
Epping factory.
●● Received two IDC National Awards for job creation and sustainability.
●● Attended PUMA Supplier Summit in Hong Kong.
●● Appointed CA to take over the financial portfolio of Impahla.
13
CHAPTER 2
14
IMPAHLA CLOTHING
GOVERNANCE
16
IMPAHLA CLOTHING
Board of directors
William Hughes
Managing director
Ronald Rink
Chairman of the board
William Hughes was born in Nakuru, Kenya. He worked
at Nampak in Johannesburg for four years in the 1980s,
before returning to the family farm in Zimbabwe. In
2003, William and his family moved to South Africa,
where he bought The Cape Town T-Shirt Company, an
ailing clothing manufacturer with 60 employees which
became Impahla Clothing. As the managing director,
William is responsible for the company’s vision and
strategy for sustainable growth, its relationship with its
major customer PUMA, for the sourcing of inputs and
technologies, as well as health, safety and environmental
issues.
Ronald Rink was born in Bulawayo. He matriculated at
Westerford High School in Cape Town, and graduated
from the University of Cape Town. In the 1970s, Ronald
was general manager of Jag Sports (now PUMA). He
left to start a Hi-Tec Distributorship in Canada, thereafter
spending time at Hi-Tec International head office before
returning to PUMA’s international division. Ronald opened
the PUMA subsidiary in South Africa in 2001, which he
ran for 13 years before selling his shares. PUMA retained
his services until December 2013. He was appointed
chairman of Impahla in January 2014.
Carl Visser
Director of Impahla Branding
Carl Visser was born in Kadoma, Zimbabwe. He qualified
and operated as a land survey professional in Harare
until July 1984, thereafter moving to South Africa where
he continued to work in surveying, including for Rand
Water. In March 2005, Carl bought shares in Impahla and
established Impahla’s branding division. Carl developed
the processes that have made Impahla the first African
company to use water-based CHT inks for heat transfers,
eradicating the company’s reliance on PVC-based inks.
Lena Jansen
Production director of Impahla Clothing
Lena Jansen was born in Southeyville, Transkei, and
completed her formal schooling in Cape Town. In 1979,
she began in the finishing division at Elite Clothing
in Maitland, progressing through the ranks at Quality
Workwear, and the Cape Town T-Shirt Company. When
Impahla bought out the assets of the Cape Town T-Shirt
Company in 2004, Lena was offered a 10% share in the
company in exchange for her commitment to becoming
Impahla’s production director. Proficient in English,
Afrikaans, Xhosa and Zulu, Lena manages the shop-floor
team, including all aspects of production.
Kevin Alberts
Director of Impahla Socks
Kevin Alberts was born in Cape Town. After completing
a marketing diploma, he joined YKK Zippers as a sales
representative in 1984. In 1989, he joined Gelvenor
Textiles, moving to PG Textiles in 1991, where he worked
alongside Sean Thompson before returning to YKK
Zippers in 1993 as the sales and marketing manager.
Kevin joined Sean at Tomotex in 2001 as a partner.
Kevin is now responsible for running the socks division in
Elsies River.
Sean Thompson
Director of Impahla Fabrics
Sean Thompson was born in Cape Town. He matriculated
from Fish Hoek High School in 1984. After two years of
national service, he joined a textile company in 1987. He
worked at this company until 1999, after which he started
his own textile company called Tomotex. In August 2012,
Tomotex merged with Impahla Clothing and became
Impahla’s fabric division. Sean is now responsible for this
division, supplying quality fabric and trims into the textile
industry, and to the Impahla plant.
From left to right: Ronald Rink, Sean Thompson, Kevin Alberts, William Hughes, Lena Jansen and Carl Visser.
17
CHAPTER 2 GOVERNANCE
What Impahla stands for
I
mpahla shares the values and principles of its largest
customer, PUMA. We work hard at redressing the ‘them
and us’ situation that industry has inherited from the
past. We strongly believe that we are a single unit and a
single team.
Our management team works alongside production
employees, especially when the company is under
pressure to deliver. All supervisors and managers are
approachable and available to resolve queries at any time,
most often without an appointment.
Impahla’s policy is to promote from within and we have,
by and large, achieved this over the years. As we continue
to grow, more opportunities will become available for
floor employees to develop their careers.
Above all, Impahla stands for quality and fairness – quality
and fairness in relationships and quality fairness in the
work it delivers. These values are embodied in our Code
of Conduct:
10Terms and conditions of employment are pertinent
when supplied to the employee when the employee
commences employment, with the following
particulars in writing:
a full name and address of the employer; name and
occupation of the employee, or a brief description
of the work;
Impahla is committed to the goals of reducing waste,
using resources responsibly, supporting workers’ rights,
and advancing the welfare of workers and communities.
We believe that partnerships based on transparency,
collaboration and mutual respect are integral to making
this happen.
b various places of work; date of employment;
ordinary hours of work and days of work;
2 Workers’ employment is voluntary and excludes
prison labour, indentured labour, bonded labour or
other forms of forced labour.
3 Employees are older than 16 years of age or over
the age for completion of compulsory education
or country legal working age, whichever is higher.
Furthermore, employees under 18 are not employed
in hazardous conditions.
4 Contractors do not discriminate in terms of hiring,
compensation, promotion or discipline, on the basis of
gender, race, religion, age, disability, sexual orientation,
pregnancy, marital status, nationality, political opinion,
trade union affiliation, social or ethnic origin, or any
other status protected by country law.
5 Harassment and abuse are not tolerated and
employees are not subject to physical, sexual,
psychological or verbal harassment or abuse.
6 Freedom of association and collective bargaining
are respected to the extent permitted by the laws of
the manufacturing country.
7 Wages, benefits and overtime are such that
employees are timeously paid and at least at the
minimum wage required by country law and are
provided legally mandated benefits.
IMPAHLA CLOTHING
9 Terminations and other disciplinary actions must
adhere to the Code of Good Practice as contained in
Schedule 8 of the Labour Relations Act 66 of 1995.
In order to create a pleasant climate in which to
work and to reduce any unnecessary conflict in the
workplace, it shall be expected that everybody shall
treat their colleagues, superiors and subordinates with
due respect and shall conduct themselves with dignity
at all times.
Impahla’s Code of Conduct: Impahla’s 12
Key Principles
1 Regular employment is provided on the basis of a
recognised employment relationship. The Code does
not allow the use of a home working arrangement for
the production of Impahla products.
18
8 Working hours and rest days are co-ordinated
such that employees do not work in excess of 60
hours per week, or the regular and overtime hours
allowed by the laws of the manufacturing country,
whichever is less. Overtime hours are consensual and
compensated at a premium rate and employees are
allowed at least 24 consecutive hours rest in every
seven-day period.
c wage or the rate and method of calculating; rate
for overtime work; any other cash payments; any
payment in kind and the value thereof;
d frequency of remuneration; any deductions; leave
entitlement; period of notice or period of contract;
e description of any council or sectoral determination
which covers the employer’s business;
f period of employment with a previous employer
that counts towards the period of employment;
g list of any other documents that form part of the
contract, indicating a place where a copy of each
may be obtained.
11The workplace is healthy and safe and the
necessary steps to prevent accidents and injury have
been taken. Impahla has systems to detect, avoid and
respond to potential risks to the safety and health of
all employees.
12Environmental impact is minimised in terms of
human health and the environment by applying
a cautionary approach when assessing new
opportunities and ensuring that we meet regulatory
requirements including air emissions, solid/hazardous
waste and water discharge.
Governance and decision-making
A
ll decisions are made by the directorship, with the delegation of decision-making tasks filtering down through each
director’s specific roles and responsibilities. As Impahla is a privately held company with no minority shareholders,
there is no requirement for independent directors.
Given the nature and size of the business, informal meetings are conducted among the management team on a daily
basis, while formal production and planning meetings are scheduled weekly (an increase over previously held monthly
meetings). Executive shareholder meetings are conducted monthly, with input from the non-executive director being
considered as and when necessary.
Ultimate responsibility for stakeholder engagement, contractor compliance-related issues, legal and regulatory compliance,
and compliance with union (SACTWU) and NBC requirements rests with the directorship team, with the managing
director spear-heading all aspects of control and assurance. All directors have explicitly declared their business interests
and are aware of the consequences of operating in conflict with the codes of the company.
Managing theft, fraud and anti-competitive
behaviour
Impahla has policies that cover a range of conduct issues,
including theft, fraud and corruption. These policies are
supplied as part of each employee contract, and visually
displayed at each site.
None of our operations has been externally assessed for
risks related to corruption. However, theft remains more
of an issue than fraud and corruption at Impahla, and a
zero tolerance approach is in practice. We continually brief
employees on the topic of theft and how this can damage
the future of the business for everyone. No formal training
on fraud and corruption has been undertaken, but our
systems and processes limit opportunities for this, as the
managing director must sign off on all important activities.
In the event that a crime has been committed, Impahla
conducts a disciplinary hearing overseen by an
independent chairperson and the NBC – the regulatory
body of the clothing and textile industry of South Africa.
Any employee has the right to representation either by
the shop steward or by a member of the union, and all
details of the hearing are recorded and made available for
scrutiny. In the event that the employee is found guilty,
the police are involved. All cases across the business are
dealt with in the same manner, including with directors,
and this is outlined in the shareholders’ agreement.
During the period under review, two instances of theft,
involving seven employees, were identified. Hearings
were conducted, the employees found guilty and
dismissed. The employees did not contest the verdict.
Since inception there has been no legal action taken
against us for any anti-competitive behaviour, anti-trust or
monopoly practices. We have not identified any instances
of non-compliance with laws and regulations, and there
have been no disputes, sanctions or fines for any form of
non-compliance with any laws and regulations.
Commitment to external initiatives
Impahla subscribes to and upholds the following
key charters and principles, as well as legislative and
regulatory requirements:
●●
PUMA Code of conduct.
●●
NBC’s main industry-wide agreement on minimum
wage levels and employee working conditions
●●
South African Company’s Act and national labour laws
including Broad-based Black Economic Empowerment
(B-BBEE) and Occupational Health and Safety Act.
●●
South Africa Bureau of Standards (SABS) and ISO
9001 accreditation.
●●
International Financial Reporting System (IFRS) for
financial reporting and the need to externally audit our
financial statements.
●●
Global Reporting Initiative (GRI) for non-financial
reporting.
We are also an organisational stakeholder of the GRI, a
member of the Cape Clothing Association, as well as the
Cape Clothing Cluster, and continue to contribute on a
monthly basis to our industry Skills Education Training
Authority (SETA).
19
Stakeholder engagement
I
n the table below we discuss how we communicate and respond to the key concerns of our stakeholders. Our list of
stakeholder groups was developed over the past few years and contains all the stakeholders affected by our business,
or with the potential to significantly influence our business.
Stakeholder engagement is carried out in the normal course of business and is generally ad hoc. Regular, structured
meetings are held with our employees and customers. This year we piloted an independent employee satisfaction survey.
STAKEHOLDER GROUPS
WHAT ARE THEIR
CONCERNS
HOW DO WE
COMMUNICATE WITH
THEM
FIND OUT MORE ABOUT
HOW WE RESPONDED BY
LOOKING AT
Customers
●●
●●
70% PUMA
30% other
●●
●●
●●
●●
●●
On-time delivery
Quality
Price
Factory compliance standards
Communication
●●
●●
Payment on time
Price
Continuity of orders
●●
Job security
Fair wages, working hours and
benefits such as sick leave
Public transport and personal
issues at home
Workplace safety and
wellbeing
●●
●●
●●
Signed contracts
Factory audits (such as
PUMA S.A.F.E.)
Daily phone calls and emails
and weekly meetings
Monthly strategy meetings
●●
Ad-hoc meetings, phone
calls and emails
Orders
●●
Extending our responsibility
in the supply chain
Permanent employment
contracts and a clear code of
conduct
Supervision, health and
safety and employment
equity meetings
Training sessions
Direct engagement with
management while working
on the shop floor
Open door policy
Independent employee
satisfaction survey
●●
Governance
Our people
Creating and sharing
economic value
Managing growth
Frequent mail, fax, phone
contact and adhoc meetings
●●
Frequent mail, fax, phone
Training programmes
Annual general meeting
●●
Annual compliance audits
Informal or formal mediation
of employee issues
●●
●●
Managing growth
Suppliers
●●
●●
90% foreign based
10% local based
●●
●●
●●
●●
Employees
●●
●●
●●
452 total
389 female
63 male
●●
●●
●●
●●
●●
●●
●●
●●
●●
●●
●●
●●
●●
Unions
●●
South African Clothing
and Textiles Worker
Union (SACTWU)
●●
●●
The same concerns
employees have
Transparency/communication
with management
●●
Development state of the
textile and clothing industry
Illegal imports
Industry legislation
Member compliance
●●
Mediate and resolve issues
between industry bodies and
unions
To resolve issues as fast as
possible so that the industry
can grow
Factory and business
compliance
Wage negotiations
●●
●●
●●
Our people
economic value
Industry bodies
●●
●●
●●
SETA
CLOTEX
Cape Clothing
Association
●●
●●
●●
●●
National Textile
Bargaining Council
●●
●●
●●
●●
20
IMPAHLA CLOTHING
●●
●●
●●
Our people
economic value
economic value
STAKEHOLDER GROUPS
WHAT ARE THEIR
CONCERNS
HOW DO WE
COMMUNICATE WITH
THEM
FIND OUT MORE ABOUT
HOW WE RESPONDED BY
LOOKING AT
Financial institutions
●●
●●
Absa
IDC
●●
●●
●●
Financial viability
Additional business
Sound financial practices and
transparent reporting
●●
Job creation
Legislative compliance
Tax
●●
Return on investment
Business viability
Equity in ownership and
control of Impahla
Job security
●●
●●
●●
Frequent mail and phone
Finance renewal meetings
Annual integrated report and
audited financial statements
●●
Managing growth
Indirectly communicate
through industry bodies
Paying taxes
●●
economic value
Directors working within the
business every day
Board/management
meetings
●●
economic value
Managing growth
Government
●●
●●
●●
●●
Shareholders
●●
●●
●●
●●
●●
●●
●●
William Hughes
Ronald Rink
Carl Visser
Sean Thompson
Kevin Alberts
Paul Visser
Lena Jansen
●●
●●
●●
●●
●●
●●
21
Determining what we
should manage
T
he information contained in this report relates to
all issues, both financial and non-financial, that we
believe are important for our long-term success and
sustainability. We see value in following international
leading practices, and have therefore adopted the
GRI’s latest G4 Sustainability Reporting Guidelines for
this report.
As a result no significant changes were made to our
existing sustainability framework. We did, however,
introduce two new issues, namely: ‘maintaining
equipment’ and ‘improving existing customer relations’.
We have furthermore decided to discontinue reporting on
the following GRI G4 aspects as they are not material to
our business:
We are starting the journey towards a comprehensive
materiality review by building on the work we have done
over the past three years. Our sustainability framework
already contains a detailed set of important financial and
non-financial issues we have identified, prioritised and
validated over time.
●●
This year we refined our sustainability framework through
these steps:
1 The PUMA, Adidas, NBC and Excellence in Health and
Safety all conducted independent on-site audits across
our three production factories. These audits included
employee interviews and feedback. After every audit
the findings were discussed with each auditor and
corrective action plans drawn up. The audits provided
us with helpful insights into the concerns of our
clients, employees and industry regulatory bodies.
2 As part of our reporting process, independent
consultants conducted an exploratory employee
satisfaction survey this year.
●●
●●
●●
●●
●●
●●
Environment: Products and services
Environment: Compliance
Social (Human rights): Security practices
Social (Society): Public policy
Social (Product responsibility): Customer health and
safety
Social (Product responsibility): Marketing
communications
Social (Product responsibility): Compliance.
We remain committed to our existing sustainability
framework as shown on pages 26 – 28. The issues
identified in our framework apply to our entire business.
For GRI compliance purposes, we also provide a list of
the GRI Aspects we have identified as material on pages
62 – 67.
3 We assessed our last report against the GRI G4
aspects and indicators and identified that a number
of issues we reported on previously are no longer
material to the business.
4 Finally, the Impahla board, assisted by independent
external consultants, held a materiality workshop to
review, validate and refine our existing framework.
During the workshop all of the issues raised during
the year were tabled and their relevance and
importance reviewed.

I have work every day, and no short time. They take
care of people and give us a uniform. They listen to us
if you go to them. They always pay us.
Impahla employee replying to the question whether they are proud to be part of the
Impahla team
22
IMPAHLA CLOTHING
23
CHAPTER 3
24
IMPAHLA CLOTHING
OUR MATERIAL ISSUES
CHAPTER 3 OUR MATERIAL ISSUES
Overview of material issues
T
he following table summarises the most important issues facing Impahla as it seeks a sustainable future for all its
stakeholders. While there isn’t necessarily a rating of relative importance, the issues have been categorised on two
levels, and the order in which they appear gives an indication of relative importance.
OVERVIEW
PERFORMANCE
Meeting, going
beyond standards
●●
Page 29
●●
●●
●●
●●
●●
Responsibility and
PUMA’s Code of
Conduct
●●
Page 30
●●
●●
Strengthening the
supply chain
●●
Page 32
Staying with
technology
Page 32
●●
●●
●●
Extending our
responsibility in
the supply chain
●●
Page 33
●●
●●
●●
TARGETS/ACTIONS
Outperform competitors according to an independent CCTC
analysis
Delivery performance decline from 99% to 90%; below our selfdeclared target of 95%
Lead time improved from 121 to 96 days, well within our
contractual 120 days
PUMA views Impahla as a long-term strategic partner with similar
business principles and the willingness to continuously improve
Installed a new production line to deal with Kit Creator (small, quick
turn around) orders
Appointed a product development manager and installed a
dedicated product development line to manufacture samples
●●
PUMA S.A.F.E rating:
Maitland: A rating 96.4%
Epping: B- rating 89.04%
Elsies River: B- rating
Address all issues highlighted in PUMA, Adidas and NBC’s
corrective action plans
Impahla certified as an approved Adidas supplier
●●
Vertical integration finalised, with full ownership and control of:
embroidery, rebate store, sublimation, cotton fabric manufacturing,
sock manufacturing, screen-printing and heat transfers, as well as
technical fabric importation
●●
Total capital expenditure amounted to R3.1 million (2013: R6.6
million)
Bulk of expenditure use for acquiring sublimation equipment
Participated in PUMA supplier round table discussions in Europe
and educational factory tours in the Far East
●●
Sourced 90% of stock from PUMA accredited suppliers
Subject new stock from non-accredited suppliers to Restricted
Substance Testing at an independent PUMA approved laboratory
Fourteen (2013: 5) out of 80 non-accredited suppliers completed
our voluntary PUMA S.A.F.E. email survey
All non-accredited suppliers provided with a copy of PUMA’s
S.A.F.E. Pocket Guide
●●
●●
●●
●●
●●
●●
●●
●●
●●
●●
Attain and maintain a delivery
performance above 95% by
2015
Maintain zero tolerance on
quality related returns
Target 100% accuracy and a
3% internal repair rate
Significantly reduce
development and production
lead times to meet market
demand
Achieve A rating at Epping and
Elsies River factories at next
PUMA audit
Maintain A rating for Maitland
factory
Expand capacity to eliminate
manufacturing bottlenecks
Introduce LEAN manufacturing
to improve efficiency
Streamline Kit Creator and our
product development division
to reduce lead time to market
Increase throughput to capitalise
on our new operational capacity
Improving our operational
efficiency by implementing
LEAN manufacturing
Engage more suppliers through
supplier survey
Encourage suppliers to follow a
sustainability path
Increase percentage of local
suppliers to improve our
B-BBEE procurement rating
Our people
OVERVIEW
PERFORMANCE
Employee
engagement
●●
Page 35
●●
●●
●●
●●
●●
26
IMPAHLA CLOTHING
Workforce doubled to 452 over the past two years
Employee turnover increased from 26% to 28%
89% of our workforce is unionised
Eight labour related cases arbitrated by the NBC
Scored of 4.03 out of 5 in our new independently conducted
employee satisfaction survey
No industrial action took place
TARGETS/ACTIONS
●●
●●
Embed Impahla culture into
Epping and Elsies River factories
and all new employees
Improve our employee
satisfaction score
Skills and career
development
●●
Page 37
●●
●●
●●
●●
Absenteeism and
late arrivals
Page 38
Managing human
rights
Page 39
Health and Safety
Page 39
●●
●●
●●
●●
●●
●●
●●
●●
●●
Total training and welfare spend amounted to R54 000
All employees provided with occupational health and safety training
23 employees provided with additional first aid, fire-fighting or
chemical safety training
All supervisors attended our five-week on-site supervisory training
and coaching programme
21 employees were promoted during 2013
●●
Grow managerial skills across
the company in line with our
growing business complexity
and employee base
Total lost time increased from 2.2% to 2.4%
Total absenteeism increased from 1.5% to 1.6%, while
absenteeism bonuses increased by 20% to R629 per employee
Late arrivals remained stable at 0.7% and ‘Arrive on time’ bonuses
increased to R188 (2013: R117) per employee
●●
Decrease total lost time to less
than 2%
No human rights violations were report at any of our factories
99% of all products sold under contracts containing human rights
clauses
Annual external audits conducted by PUMA, Adidas and the NBC
include human rights reviews
●●
Maintain zero tolerance policy
for human rights violations
within our supply chain
Improve our ability to conduct
supplier assessments to
monitor suppliers not accredited
by PUMA
Implemented better tracking and monitoring of injuries
Total Injury Frequency Rate (TIFR) increased to 43.1 (2013: 13.52)
with 207 (2013: 45) injuries reported
All factories achieved a ratings above 90% for occupational health
and safety during independent HIRA assessments
●●
●●
Reduce our TIFR rate to 2013
levels
Managing growth
OVERVIEW
PERFORMANCE
Measuring the
gross margin,
managing
efficiency
●●
●●
TARGETS/ACTIONS
Gross margin down from 35% to 30%
Initiated a continuous improvement programme
●●
●●
Restore gross margin to 35%
Implement a ‘LEAN
manufacturing’ continuous
improvement programme for
improved efficiency
Operating profit dropped from R 5.3 million to R1.3 million
Inventory grew by 39%; mirrored by accounts payable with a 31%
increase
●●
Balance the need for reduced
production lead times with the
capital outlay associated with
higher stock levels
Liaised with PUMA daily and held weekly meetings
Closely collaborate with PUMA through the Kit Creator programme
●●
Produce top quality products at
the right price, and to deliver on
time and in full, every time
Continue collaborative efforts
such as the Kit Creator
Programme
Page 40
Minimising costs,
maximising
working capital
●●
●●
Page 41
Improving
customer relations
●●
●●
Page 41
Developing
management
capacity
●●
●●
Zero turnover of management employees
●●
Maintain promotion from within
policy
●●
12% increase in employees to 452 (2012: 405)
167 new recruits
Increased overall working floor space by 1 500m2
●●
Reduce resignations to 5%
Financed new assets worth R4.8 million from existing cash flow
and back overdraft facilities until IDC grant funding is received
Awarded R2.5 million worth of IDC grant funding
●●
Re-establish a net positive cash
flow
Focus on business consolidation
to improve capacity utilisation
and efficiency
On-site technicians provided with equipment maintenance training
on all new equipment
Maintained a dedicated on-site maintenance team at each of
factories
●●
Page 41
Developing HR
capacity and other
resources
●●
●●
Page 41
Financing of
growth
Page 42
Maintaining
equipment
Page 42
●●
●●
●●
●●
●●
Implement ongoing
preventative maintenance
programmes
27
CHAPTER 3 OUR MATERIAL ISSUES
OVERVIEW
PERFORMANCE
Return on
shareholder
investment
●●
TARGETS/ACTIONS
Net profit after tax dropped to R1 million (2013: R4.3 million)
Return on total assets dropped to 2.2% (2013: 11.3%)
●●
●●
Restore return on total assets
ratio by increasing production
and improving operation
efficiency
●●
Impahla is 6.75% (2013: 7.5%) black owned
●●
Implement employee share
ownership scheme by February
2015
Remuneration
and employment
equity
●●
●●
Page 44
●●
98% of workforce is previously disadvantaged individuals
Gender profile remain stable at 86% females
Coloured females increase to 67%; black females to 31%
No disabled employees worked at Impahla
Continue to meet or exceed
NBC wage rates
Continue to engage with
employees
External
stakeholder equity
●●
Non-compliant B-BBEE contributor
●●
Regain our status as a Level
7 contributor under the new
B-BBEE rating system
●●
Maintained good relations with the NBC
●●
Encourage the clothing industry
to become more responsible,
both on the supply and demand
sides
Urge retail buyers to consider
human rights issues when
making their buying decisions
Page 43
Equity in
ownership and
control of Impahla
Page 44
●●
●●
●●
Page 45
Clothing industry
and the NBC
Page 45
●●
OVERVIEW
PERFORMANCE
Carbon footprint
●●
Page 46
●●
Electricity and
solar power
Page 47
●●
●●
●●
●●
Fuel
●●
Page 48
●●
●●
Travel
Page 48
Water
Page 48
28
IMPAHLA CLOTHING
●●
●●
●●
●●
Waste
●●
Page 49
●●
TARGETS/ACTIONS
Carbon equivalent emission intensity increased to 0.79 kg CO2e
per employee hour (2013: 0.69)
Fund the planting of 2 024 trees by Food & Trees for Africa to offset
emissions
92% of total carbon emissions resulted from Eskom supplied
electricity
Annual usage increased by 62% to 982 MWh
Usage intensity increased by 33% to 1.02 kWh per employee hour
Impahla solar PV plant generated 50 MWh, accounting for 5% of
annual electricity usage
●●
Investigate renewable energy
sources for Epping and Elsies
River factories
4.5% of total carbon emissions resulted from using non-renewable
fuels: petrol, diesel and paraffin
Annual consumption nearly tripled to 17.8 kl, largely due to the
introduction of a boiler which consumed 8 kl of paraffin
Petrol and diesel usage increased to 0.003 and 0.0073 litres per
employee hour respectively
●●
Increasing production
throughput for improved fuel
efficiency
3.5% of total carbon emissions resulted from air travel
Air travel comprised four local and seven international flights
●●
Air travel is expected to increase
further along with business
growth
Water usage totalled 2 940 kl
Usage intensity increased from 2.83 to 3.06 litres per employee
hour
●●
Investigate capturing and using
rainwater
Generated 128 tonnes of waste between June 2013 to February
2014
Recycled 80% of all waste through an external service provider
●●
Investigate recycling
opportunities in partnership
with our waste removal experts
P
UMA’s share of the total number of products shipped to customers has grown steadily from 62% in 2006 to 100%
in 2012. Part of this growth resulted from our improved sustainability performance, justifying PUMA’s decisions to
channel orders to Impahla instead of the Far East.
While we inherited new clients as a result of our vertical integration, our commitment to PUMA remains unaltered.
This year PUMA contributed 70% (down from 100% in 2012) to our total revenue, with the remaining customer base
contributing the balance of 30%.
For PUMA, Impahla has become both more competitive and more sustainable. It was on PUMA’s request that we
establish Impahla Socks in the previous financial year, and this division accounted for 5% of our total 2014 revenue.
We continue to focus on manufacturing and delivery, and do not have a marketing division. Instead we rely completely
on PUMA and its highly sophisticated market research and analysis team to meet new consumer trends. Impahla has
confidence in PUMA’s marketing expertise. Impahla’s expertise lies in taking PUMA’s designs and converting these to
excellent quality products.
Meeting, going beyond standards
Fulfilling customer demand for the
highest quality product requires that
both sides work hard at the relationship.
In playing our part, we have identified the
following five important issues
Responsibility and PUMA’s Code of Conduct
Staying with technology
Strengthening the supply chain
Extending responsibility through the supply chain
Meeting, going beyond standards
Impahla strives to achieve the highest standards as a supplier of quality products through manufacturing and branding
services. From cutting, printing and embroidery, through to assembly, fabrics, socks and finishing, our goal is always to
produce top quality products on time and on budget.
Customer satisfaction
During the period under review, the Cape Clothing Textile Cluster (CCTC) conducted an independent analysis of Impahla,
benchmarking us against international business spread across Africa, Central Europe and South America. This assessment
included an in-depth client satisfaction survey, where the CTCC surveyed only PUMA as our main client.
IMPAHLA’S PERFORMANCE VS CUSTOMER
DEMANDS
AVG
Proactive
communication
Quality
10
8
6
4
2
AVG
Price
Delivery reliable
Responsiveness
to problems
after delivery
Manufacturing
lead time
flexibility
Product re-design
ability
Product design lead time
Our performance
IMPAHLA’S COMPETITOR’S PERFORMANCE
RELATIVE TO ITS PERFORMANCE
Competitors
Proactive
communication
Quality
10
8
6
4
2
Price
Delivery reliable
Responsiveness
to problems
after delivery
Manufacturing
lead time
flexibility
Product re-design
ability
Product design lead time
Our performance
Competitors
*The survey, while acting as a useful indicator, cannot be viewed as definitive in its findings as it relies on a very small sample and is based
on subjective opinion.
29
CHAPTER 3 OUR MATERIAL ISSUES SERVICING OUR CUSTOMERS
CCTC benchmark findings for Impahla
IMPROVED
●●
●●
●●
●●
●●
●●
●●
DETERIORATED
Quality of products
Delivery
Quality
Price
Lead time
Bookings in advance (24
hours)
System, equipment and
employee management
structure
Delivery on time
Delivery accuracy of
quantities
Delivery reliability
Planning
●●
●●
●●
●●
The CCTC benchmark analysis found that Impahla’s sales
growth “far outstrips benchmark comparators even when
discounted in light of the addition of the textiles and
sock division in 2012”. Compared to our competitors, the
survey also showed we outperform in all areas except
for delivery reliability, product design lead time, and
conformance to packing requirements where we have
room for improvement.
According to PUMA our product delivery performance
was satisfactory at 90% (2012 calendar year: 99%),
although it is slightly below our self-declared target of
95%. Average lead times were 96 days and well within
our contractual limit of four months.
There is, however, a strong market demand to reduce our
production lead times. This is evident as we were able to
agree to only 51% (2012 calendar year: 77.9%) of the
initial shipment dates PUMA requested during the 2013
calendar year.
In order to meet the changing needs of our clients, we
established a dedicated product development division
and started the Kit Creator programme; each with their
own dedicated production lines. For more detail on Kit
Creator, refer to page 33.
PUMA continues to see Impahla as a long-term
strategic partner with similar business principles and the
willingness to continuously improve.
We will continue to proactively engage with PUMA and
our other clients to ensure that production expectations
neither exceed our ability to deliver, nor impede our
commitment to employee health and safety, including
work-life balance.
Responsibility and PUMA’s Code
of Conduct
As a condition of the ongoing relationship with PUMA,
Impahla must consistently adhere to strict controls
over quality and timeliness of deliveries. We are also
benchmarked against PUMA’s Social Accountability and
Fundamental Environmental Standards, also known as
S.A.F.E. In enforcing these standards, PUMA undertakes
regular compliance audits at Impahla’s operations,
and offers comprehensive feedback on how well the
firm meets PUMA’s expectations. The NBC as well as
other clients such as Adidas regularly conduct similar
compliance audits at Impahla.
These audits generally include site tours, document
reviews and management and employee interviews.
Corrective Action Plans (CAP) are then drawn up and
agreed upon with the auditors, which must be completed
within a reasonable timeframe.
OUR PRODUCT DELIVERY PERFORMANCE
ACCORDING TO PUMA*
Lead time
100%
95%
80%
40 days
99.9
121 days
96 days
99.0
100%
90.0
90.6
FEBRUARY 2013 PUMA AUDIT RESULTS
Classification
5
15
77.9
51.0
60%
5
5
13.39
5
10
13.64
30
28.57
26.96
26.20
50
47.97
44.12
44.20
Weight
Maitland
Elsies*
Epping*
80%
60%
A B-B-
40%
40%
20%
20%
0%
2011
Delivery performance**
2012
2013
Requested shipment date
Delivery performance target
* Figures refer to calendar years, therefore 2013 data best
describe our performance during the 2013/14 financial year.
** Delivery performance is based on our confirmed shipment
dates.
30
IMPAHLA CLOTHING
0%
Social
Health and safety
Environmental
Additional
* The February 2013 audits were the first PUMA S.A.F.E audits
ever conducted on our Elsies River and Epping factories.

While PUMA did not conduct a compliance audit during
the period under review, the NBC, Adidas and another
third party on behalf of Asics did conduct independent
audits. The results from these audits agreed with results
and corrective actions determined during PUMA’s
February 2013 audits. All concerns have since been
addressed*, the majority of which related to minor health
and safety issues.
Impahla has been a key partner in
PUMA’s success and will be in the
future. Always willing to help with
production and getting the product at
key price points to market.”
* Adidas conducted a follow-up evaluation on 20 May 2014 and
verified that Impahla had successfully responded to all concerns
listed in their CAP. We are now certified as an approved Adidas
supplier.
PUMA CCTC customer satisfaction survey
The table below provides a brief overview of some of key
issues and the corrective actions we took during the year.
TOPIC
ISSUE IDENTIFIED
CORRECTIVE ACTION TAKEN
Employee contracts
Source: PUMA audit
The existing employment contracts at
Elsies River do not contain all the required
information
New PUMA-compliant employment contract was
drawn up and implemented in June 2013. All
employees at Elsies River have been given the new
updated employment contracts
Employee awareness
Latest PUMA code of conduct not displayed
PUMA supplied new Code of Conduct posters and
these were erected on worker notice boards and
discussed during an employee meeting
More grievance/complaint boxes should be
provided
We placed additional suggestion and complaint boxes
in the bathrooms so that employees can use them
anonymously
Adidas introduced a new requirement
whereby buildings where their garments are
being produced must have a building safety
compliance certificate
On 7 Feb 2014 Element Consulting Engineers
conducted an on-site inspection of our Elsies
River factory and certified that the building is in
good condition, structurally sound, and would not
jeopardise anybody working in the buildings
Our Elsies River factory has an unprotected
and unsealed asbestos roof and no asbestos
survey has been conducted to confirm the
safety of workers exposed this area
During the year we bought the building housing our
Elsies River factory and replaced the roof with a new
high-performance roof that allows for natural light to
filter through. We also installed new epoxy flooring.
The upgrade increased the usable product floor space
by 1 500 m2 that can accommodate six production
lines; with one line already operational by February
2014
No formal training has been provided to
employees handling and using spot cleaning
chemicals
Seven employees received formal chemical safety
training in addition to the basic health and safety all
employees received in May 2013
Too few health and safety committee
meetings were held
Regular and specific meetings are conducted
in between factory management and worker
representative committees. The committees and
management meet at least once every three months,
the suggestion and complaints boxes are checked,
reviewed and corrective action prepared and
communicated back to employees
Occupational health and
safety – fire safety
No smoke detectors installed and linked to an
electronic alarm system at Elsies River
Source: PUMA, Adidas, NBC audit
Too few certified fire fighters for the number
of employees, resulting in no trained fire
fighter on duty at night
Fire Spec Systems installed a centralised fire detection
system that complies with all latest fire safety
regulations and legislation. An additional emergency
exit was also installed at Elsies River
Source: PUMA audit
Employee communication
Source: PUMA audit
Building compliance
Source: Adidas audit
safety – asbestos roof
safety – chemical training
safety – regular meetings
Waste removal
management
While we used a third party to remove
and recycle some of our waste, no waste
management plan was in place
Nine employees were trained in Level 1 firefighting
during the year
We developed a waste management plan to ensure
waste from across all sites is transferred to Elsies
Rivier, sorted and then removed by an external
company, Waste Plan to be either recycled (80% of
our waste) or sent to landfill
31
We furthermore commissioned Excellence in Health and
Safety to conduct formal occupational health and safety
risk assessments during July and August 2013 at all three
of our factories. The results were as follows: Maitland
98.7%, Epping 99% and Elsies River 93% and all three
were deemed to have ‘acceptable’ levels of occupational
health and safety.
We are confident that our Maitland production factory
will maintain its status as one of PUMA’s A-level suppliers
during the next round of audits expected in the 2014
calendar year. We also look forward to improving on the
respectable B scores achieved by our Epping and Elsies
River factories.
●●
●●
●●
●●
●●
●●
Embroidery – Embellishment of logos on garments
Rebate store – A regulated and controlled store for
imported and duty-free fabric that is not available in
South Africa
Sublimation – The all-over printing of garments of
franchise sport teams (a fast-growing market)
Cotton fabric manufacturing – Knitting of cotton
fabrics (preferably from the ‘Cotton Made in Africa’
programme (a fair trade initiative) in order to control
the supply of this crucial raw material
Screen-printing and heat transfers – Addition of
branding aspects on garments
Technical fabric importation – The importation of
high-spec fabrics not available in South Africa
Our acquisition of the socks factory was not part of our
original strategy, but was undertaken at PUMA’s request.
PUMA’s sock demand was insufficient to support the
business full time. We have therefore pursued and
successfully secured other clients to cover the shortfall.
This bodes well for our financial performance going
forward.
There have been no further acquisitions or mergers
during the year, but we have continued building the
capacity of the business by investing in new equipment
to increase our production capacity and throughput. This
is discussed further in the following sections, ‘Staying
with technology’ and ‘Extending our responsibility in the
supply chain’.
We are now focused on consolidating the new aspects of
the business, and optimising on the efficiencies gained.
Staying with technology
Strengthening the supply chain
Impahla’s long-term success depends on its ability to
secure future business at the right price with top quality
products. More control over our supply chain will increase
our competitiveness and enhance quality, reliability and
product responsibility. In accordance with our strategy of
‘vertical integration’, we have successfully expanded and
absorbed fabrics, embroidery and sublimation into the
business over the past two years.
We are satisfied with the positive results already achieved
in our fabric production and embroidery divisions.
Sublimation has proven to be more complicated than
anticipated. After a steep learning curve during the
period under review, we are confident that sublimation
will deliver satisfactory production levels during the next
financial year.
Beyond the production of garments we now own and
control 100% of the following:
32
IMPAHLA CLOTHING
We aim to continuously improve our throughput
by reducing bottlenecks and maintaining a delivery
performance accuracy of 95% without compromising
on product quality. On an educational tour of one of
our clients’ factories near Shanghai, we learnt about
several low cost production line modifications to improve
efficiency. These have subsequently been implemented
at our factories.
New technology adds value to products and processes,
improves our efficiency and ensures we remain cost
competitive. Impahla recognises that pursuing efficiency
can come at a cost to job creation and we therefore seek
an appropriate balance that both empowers employees to
work at a higher level of skill, and produces more valuable
products within the ever-tightening cost budgets dictated
by the marketplace.
Impahla’s policy has been to acquire a range of operatormanaged machines for all of the core assembly activities.
We have ensured that our cutters, machine operators and
finishers are supplied with reliable, safe and appropriate
machines that allow us to deliver against increasingly
challenging targets. Equally important, we have always
sought to retain in-house competence in key functions.
Capital expenditure
We continued making significant investments to expand
our manufacturing capacity and capabilities. The majority
of our expenditure for the year under review was funded
through the IDC’s Production Incentive Programme (PIP)
and the R250 000 prize money received from the IDC for
winning the top employer and sustainability categories at
their awards event.
Impahla’s capital expenditure on plant and machinery
for the year totalled R3.1 million (2013: R6.6 million)
and centred on sublimation, production expansion and
optimisation.
For our sublimation division, we bought a computer aided
pattern design software system, three sublimation printers
as well as two sublimation presses. A further six flatlock
machines were acquired, capable of manufacturing
specialised active wear that we could not previously
produce. Various other machines were also bought to
improve and expand existing production lines.
Kit Creator programme and product
development division
This year we established a dedicated production line capable
of quickly producing products utilising predefined garments,
colours and custom embroidery and print designs. This is
aimed at PUMA’s clients that require quick turnaround times
on small production runs. We invested heavily in the stock
required to meet anticipated future Kit Creator orders which
will eliminate the time needed to produce the raw materials.
When fully optimised, production lead times for Kit Creator
orders could be reduced by 60% to six weeks instead of
the contractual four months associated with our existing
production process.
We also established a separate product development
division by appointing a product development manager
and installing a dedicated line to produce sample
garments; eliminating the need to disrupt our main
production lines.
Together these initiatives will enable us to reduce the
lead times associated with product development and
subsequent production. To support this important new
growth area, we secured new property to house the
development centre and employed a senior manager as
well as five production employees.
As expected, the Kit Creator programme has experienced
some teething issues during the implementation phase
on both PUMA’s side and at our operations, most of
which have now been dealt with.
Extending our responsibility in the
supply chain
We recognise our dependence on the high quality
products we require from our suppliers in order to
produce high quality products for our customers. We
believe in using only safe and responsibly produced input
material for both our products and other business needs.
ANALYSIS OF SUPPLIER SPEND
Other
15%
Trims
8%
Rent
9%
26%
22%
10%
Finished product
Yarn
11%
Fabrics
Branding material
We spent a total of R39.64 million on our suppliers, more
than half of which was spent on yarn, fabric, branding
material and finished products.
In line with PUMA’s supply chain expectation and product
quality standards, we only use input material that has
been approved by PUMA. Approximately 90% of our
input material is sourced from PUMA-approved suppliers.
Before components sourced from alternative suppliers
can be taken up in the supply chain, samples have to be
sent to the PUMA-approved laboratories at the Nelson
Mandela Bay University in Port Elizabeth for Restricted
Substance Testing (RST). Only once these components
have been approved do we use them in our products.
PUMA S.A.F.E. supplier survey
Recognising our responsibility, we have briefed all our
non-PUMA-approved local suppliers on PUMA’s S.A.F.E.
Code of Conduct. Each supplier has a copy of the PUMA
S.A.F.E. Pocket Guide. We follow this up with ad hoc
requests for suppliers to report on their performance
against the PUMA S.A.F.E. Code of Conduct.
For the second year running, we requested that all
our local suppliers rate their response to the social,
environmental and health and safety issues contained in
the PUMA S.A.F.E. guidelines. By completing the voluntary
survey, our suppliers help us identify both strengths and
weaknesses in our local supply chain and proactively
manage any risks that may arise. This year, the number
of suppliers responding to the survey improved, with 14
(2013: 5) out of 80 local suppliers completing the selfassessment.
The average rating per category is shown opposite and
will be used as a benchmark going forward. However,
with such a small sample it would be unwise to draw
any conclusions from the results at this stage. We plan
to evolve our customer survey further and improve the
responses from our local suppliers going forward.
33
FEBRUARY 2014 SUPPLIER SURVEY RESULTS*
PROPORTION OF FABRICS PROCURED LOCALLY
100%
2.2
Social concerns
2.5
Health and safety
60%
1.4
Additional staff benefits
1
2
3
9%
91%
15%
85%
65%
4
Rating scale
* Average across the 12 valid survey responses we received.
Two responses were deemed invalid and therefore excluded.
Rating scale:
0 Issue not, or hardly, recognised as relevant.
1 Issue recognised as relevant to the business, but not actively
managed
2 Issue recognised as relevant and have a policy in place that
describe company’s response.
3 Issue recognised as relevant, have a policy in place and
measurement of performance is available for internal and
external scrutiny.
4 Issue recognised as relevant, have a policy in place,
measurement of performance and clear strategy and initiatives
are being implemented to improve performance.
Beyond sourcing mainly from PUMA-accredited suppliers,
performing RSL screening of products from un-accredited
suppliers and implementing our local supplier selfassessment survey, we have not conducted any other
formal social, environmental or other supplier impact
assessments; nor have we identified any significant
actual or potential negative impacts within our supply
chain at this stage. We plan to increase engagement with
our supply chain on sustainability concerns and, where
possible, influence their behaviour or change to suppliers
that use more sustainable business practices.
Local vs foreign
We aim to purchase locally where possible. However, the
stringent requirements, essential for serving major clients
such as PUMA and Adidas, adversely affect our ability to
secure more products locally. Therefore we spent only
15% of our supplier budget on local suppliers within
South Africa this year. While this is a 75% increase on
what we spent locally in 2013, it is still less than half the
proportion spent in 2011.
We continue advocating that local suppliers should
implement best practice, produce high quality, safe
products and obtain the necessary compliance. Where
we do find progressive local suppliers, such as ACA, that
comply with the latest new European Union chemical
standards, we are prepared to pay the premiums
associated with safe and responsibly produced products,
because they protect the Impahla brand and ensure that
our products are safe.
IMPAHLA CLOTHING
59%
9%
91%
40%
0
34
36%
80%
1.9
Environmental concerns
41%
20%
0%
*
Foreign
Local
* In 2011, we changed from December to February year-ends,
therefore 2012 refers to the 2011/12 financial year and so on.
Extraction, raw material processing, assembly and
software all require different factors of production to be
competitive. It is clear that, in South Africa, Impahla can
compete in garment assembly/manufacturing, but not in
fabric manufacturing. This leads to a strong ratchet effect
in this trend: customers, once having experienced better
quality and value (from an imported fabric, for example),
are not easily persuaded to return to a local offering.
Given this reality, Impahla encourages the government
to remove the duty on fabrics that are unavailable in
South Africa. Though the removal of such a duty will not
reverse the reality that imported fabrics are better and
in higher demand, punitive duties will, and do have a
negative impact on the ability of garment manufacturers
to compete fairly in the marketplace. Impahla has taken
the initiative through applying for, and being granted, a
rebate store.
Our people
I
mpahla’s success is entirely dependent on the effort and hard work of its employees; each performing together in a tightly
choreographed set of processes. We cannot emphasise enough how important all our employees are to the business. Just
one of the reasons we take employee management so seriously is that small errors, minor employees dissension and poor
plant management are often the cause of steadily declining businesses, especially in the local industry.
Throughout the expansion phase, this high level of regard for employees has been instilled in the operating environment
at both the Elsies River and Epping factories.
Employee engagament
This report has already dealt with a number
of key issues relating to how Impahla treats
its employees and how it creates the
best environment for the most efficient
production. This section will expand the
following five key issues
Skills and career development
Absenteeism and late arrivals
Managing human rights
Health and Safety
Employee engagement
The Impahla team continues to grow. Over the past two
years we doubled in terms of annual turnover and the
number of people we employ.
EMPLOYEES AT YEAR END
All new employees are given a four-week probation
period before we offer them permanent employment.
We do not make use of relief or temporary resources and
therefore all our employees are permanent employees.
NUMBER OF
EMPLOYEES
% OF
WORKFORCE
Top management
6
1%
Senior management
12
3%
Professionally qualified/
middle management
22
5%
Skilled tech
268
59%
Semi-skilled
81
18%
Unskilled
63
14%
Grand Total
452
EMPLOYEES BY RACE
Number of employees
EMPLOYEES BY
OCCUPATION
500
400
452
405
300
200
234
100
0
2012
2014
EMPLOYEES BY LOCATION
White
22
Epping
55
12%
3%
Black
137
2013
30%
24%
65%
Coloured
293
Elsies River
109
64%
Maitland
288
35
CHAPTER 3 OUR MATERIAL ISSUES OUR PEOPLE
EMPLOYEES BY AGE
Under 35
121
10%
Over 55
43
27%
64%
35 - 55
288
LOCAL VS FOREIGN CITIZENS
Foreign citizens
7
2%
98%
Local
445
Union representation
All weekly waged employees are members of the South
African Clothing and Textiles Worker Union (SACTWU);
the dominant trade union in the garment manufacturing
industry. We encourage and help all our employees who
earn weekly wages with the necessary paperwork to join
SATCWU so that they can access additional benefits the
union offers.
EMPLOYEE PAY FREQUENCY
Monthly paid
51
11%
89%
Weekly paid
401
Considering the generally good relationship existing
between management and employees, Impahla’s
relationship with SACTWU is a positive one. Employee
issues relate more to employee health and welfare.
In this regard, the union has been a useful partner in
36
IMPAHLA CLOTHING
campaigning against HIV/Aids, TB and substance abuse.
Their ongoing HIV/Aids voluntary testing and counselling
includes poster campaigns and information sessions at
our operations.
No strikes or industrial actions occurred in the period
under review, and no days were lost due to union action.
The fact that 89% of the workforce is unionised (a total of
401 employees) makes the absence of industrial action a
truly representative proxy for employee satisfaction. This
results in improved productivity and business profitability.
Employee benefits
From the day an employee joins Impahla, he or she has
access to all the basic worker benefits afforded to them
by law.
An employee will then gain access to the following
benefits once he or she becomes a SACTWU member
and successfully completes our four-week to three-month
probation period:
●●
Provident Fund where the company pays 50.9% and
the employee pays 49.1%
●●
Healthcare Fund where the company pays 24.85%
and the employee pays 75.15%.
There are also additional benefits for employees, such
as funeral cover, bursaries and healthcare counselling,
as well as subsidised eye tests and spectacles through
SACTWU. Salaried employees do not have access to
the SACTWU member benefits. However, should a
salaried employee join a medical aid, the company would
contribute up to a maximum of R500 per individual.
The company affords the same level of benefits given to
salaried employees, to directors.
All employees receive annual leave as our factories close
down for 15 days over the December-January months
every year. Employees also participate in our incentive
schemes aimed at boosting production and reducing
absenteeism and late arrivals.
Employee satisfaction and direct engagement
Impahla’s management takes pains to ensure that all
employees know that the five executive directors of the
business are available for discussion on any subject at
any time. Directors are highly visible on the floor and
their office doors are kept open to encourage easy
communication. Impahla has suggestion/grievance boxes
at each factory and this does attract suggestions and
issues from time to time. Management responds through
consultation and discussion, followed by a written note on
the notice board recording the company’s decision.
While no minimum notice period relating to operational
changes is specified in the industry-wide NBC agreement,
we openly discuss such operational changes during our
employee meetings before any changes are made.
Employee turnover has increased slightly from 26% to
28%. This figure includes absconds, i.e. those employees
who just stay away from work. This year 47% (2013:
EMPLOYEE TURNOVER
Turnover*53% 26% 28%
450
New recruits
375
300
225
150
238
167
155
75
Employees that left
0
-75
-113
-82
-119
-150
-225
-300
-375
-450
2012
2013
2014
* These figures have been restated from the previous report, using
the following calculation: turnover = (number of employees that
left Impahla/((number of employees at the beginning of the year
+ number of employees at the end of the year)/2)) x 100.
39%) of all employees who left Impahla absconded; the
bulk of which were employees who joined Impahla less
than three months earlier. In total, 96% of our workforce
returned to work after taking annual leave.
Considering how vital this relationship testing/building
period is for establishing the team that will remain for the
long haul, we keep a close eye on resignations, i.e. longterm employees who leave the company. Resignations
have decreased from 16 to 11. This bodes well for our
relationship with our longstanding employees.
While we still use employee turnover to gauge overall
National Bargaining Council
The NBC, established in line with the Labour
Relations Act (LRA) of South Africa, consists of
representatives from the major unions and employer
groups representing the majority of workers and
employers in the clothing and textile industry.
Its purpose is to facilitate co-operation and reach
consensus between employer and employee unions
regarding the terms and conditions within the sector.
The agreed terms and conditions are contained
within a collective agreement that all business within
the sector must observe.
Impahla is registered with the Council and abides
by the collective agreement governing issues
like minimum wages and incentives, leave, and
employee benefits.
The Main Collective Agreement is available on the
NBC’s website: www.ntbc.org.za.
employee satisfaction, during the period under review,
Impahla undertook a limited employee satisfaction
survey for the first time. This formed part of our reporting
process, and was intended as a way for management to
verify its own perception of employee satisfaction against
those of the employees themselves.
Although the sample surveyed for the report was too
small to make any meaningful conclusions (12 out of 434
non-senior or top management employees), the findings
indicated a trend towards satisfied employees. The
issue of employee benefits showed the lowest levels of
satisfaction, achieving a score of 3.25 out of a possible 5.
The overall score was 4.03 out of a possible 5.
Two areas came through strongly in the commentary,
across all sites. Firstly, employees all seem very satisfied
with their supervisors. Secondly, most employees were
very critical of Impahla’s sick leave policy, feeling it is
unfair and undermines their rights as workers. We aim to
support employees as best we can, but strictly applying
our sick leave policy to manage absenteeism and limit
the number of opportunities for employees to abuse the
policy.
We aim to build on this survey next year, as a way
of testing that we are on the same page in terms of
understanding our employees’ level of satisfaction and
their specific concerns.
Managing employee grievances
Employees have the right to be treated fairly and raise
their concerns without fear of judgement. We have a
formal grievance procedure for employees to follow that
is explained in our employee handbook accompanying
each employee contract. Employees also have access to
the employee handbook at each of our canteens.
Employees can raise their concerns directly with their
supervisors, senior management, or shop steward, or
submit a formal grievance form to Impahla. If necessary,
a hearing with an independent external chairperson will
be convened to resolve the issue. If employees are not
satisfied with the outcome, they can escalate the matter
to the NBC for arbitration.
This year eight labour-related grievances were reported,
addressed and subsequently resolved through the NBC.
No incidents of discrimination or human rights violations
were reported.
Skills and career development
Investment in training and skills development is a
priority for Impahla. Our workplace skills development
plan affords us access to SETA grant funding and our
association with sector initiatives such as Clotex and CCTC
enables us to develop skills among our employees at no
or minimal cost to Impahla.
Through these initiatives Impahla employees received
training to the value of R22 000 (2013: R41 000).
Impahla has supplemented this with an additional
R31 972 (2013: R78 786) worth of training (down
37
CHAPTER 3 OUR MATERIAL ISSUES OUR PEOPLE
60% from 2013), resulting in total skills and career
development spend of R53 972 (2013: R119 786) or
R126 per employee for the year.
This year we had a strong health and safety focus and all
employees received accredited health and safety training.
We trained a further 23 employees in first aid, firefighting
or chemical safety.
Our supervisors underwent a five-week on-site coaching
and mentoring programme to improve their managerial
and leadership capabilities, and two employees received
technical software training on computer-aided designs,
patternmaking and the use of specialised systems.
Only our salary workers, which make up 11% of our
workforce, participate in formal performance reviews.
We also informally assess the performance of our waged
employees in order to promote from within. During
the year we promoted 21 employees, nine of which
were general workers whom we gave more challenging
roles such as machinists, clerks and screen printers.
Three workers were promoted as supervisors and
two supervisors were given increased responsibilities.
We acknowledge the fact that our skills development
expenditure is relatively low and that we do not have
a support programme in place for people who retire
or whose employment is terminated. We do not train
individuals just for the sake of training; instead we firmly
believe that all training must contribute to Impahla’s
bottom line.
Absenteeism and late arrivals
Impahla has, over the past years, learnt how damaging
absenteeism and late arrivals are for the business. While
employees are entitled to take up to 10 days off when
illness or injury occurs (sick leave), absenteeism in this
context refers to excessive leave for reasons other than
illness. Time lost due to late arrivals also has a significant
impact on the business.
In order to reduce absenteeism and late arrivals, Impahla
developed an incentive scheme to encourage employees
to reduce unnecessary sick leave and to work full
shifts. As of early 2005, each employee was offered an
opportunity to receive a maximum of R500 as a bonus
every six months if they did not take any sick leave. For
every day they take off, they lose R100 of the bonus,
resulting in zero bonus for more than five days of sick
leave taken.
A similar incentive has been worked out for on-time
arrival, where employees receive 0.5% of their gross
annual pay if late arrivals are under 1% for the entire
employee base. As a result, time lost has been reduced
by over half to 0.7% of the baseline figure from 2007.
The graph alongside indicates the bonuses Impahla has
awarded over past three years, showing that the Impahla
team has excelled on both of these indicators.
Despite the increase in employees, total absenteeism has
increased only marginally from 1.5% to 1.6%.
38
IMPAHLA CLOTHING
IMPROVEMENT IN AVERAGE BONUSES*
R 800
R629
600
400
R188
200
0
2012
2013
Arrive on time bonus
2014
Absenteeism
* Rand per employee per annum. Calculated using average
number of employees per reporting period
Impahla’s absenteeism and late arrivals sum to a total
lost time (TLT) of 2.4%, was up from 2.2% last year, but
similar to our 2010 TLT, and still well below the industry
average of 6%. We continue to work towards our target
TLT of 2%.
Managing human rights
Basic human rights, such as the right to life, equality,
human dignity, freedom of expression, freedom of
religion, freedom of association, political rights and
the right to peaceful assembly and demonstration are
enshrined in South Africa’s Constitution. Respecting
human rights is not only the right thing to do, but also a
basic requirement of South African company law and an
essential requirement for maintaining our relationships
with major clients like PUMA and Adidas.
Human rights form part of our policies, code of conduct
and 99% of all our products are sold under contracts
that include human rights clauses to which we are
bound to adhere. Furthermore, annual external audits
conducted by key clients, such as PUMA and Adidas, and
the South Africa’s NBC include human rights reviews.
With strong policies and annual external audits in place,
we are confident that none of our operations are at risk
of violating any human rights. There was also no human
rights violations report at any of our factories. Client audits
are discussed in more detail on page 31.
While we do not tolerate human rights violations that
come to our attention within our supply chain, we
recognise that we do not currently have the financial
resources or the capability to conduct in-depth
assessments across all our suppliers. Since 2013,
we request annually that suppliers complete a selfassessment survey (see page 33) and have started to
promote the PUMA S.A.F.E. standard across our supply
chain. As we grow the business, our ability to assess our
suppliers, as well as our influence over our suppliers to
follow international best practice, will improve.
Health and Safety
Impahla is mindful of the pressures that life places on
its employees and this, along with concern over health
and safety risks and hazards, drives our desire to create
security, both physically and emotionally, for employees
within the workplace.
We work hard to create and maintain a healthy and
safe working environment for employees, clients and
affected neighbours. The NBC main industry agreement
requires us to comply with South Africa’s Occupational
Health and Safety Act and both the NBC and client-audits
assess our compliance against stringent health and safety
requirements.
Our Occupational Health and Safety policy sets out our
commitment to zero harm and all our employees are
represented by health and safety committees. Committee
members continue to monitor working conditions at each
of our factories on a daily basis, and report any issues to
management as they arise.
TOTAL INJURY FREQUENCY RATE*
Due to the sharp growth in our business and workforce,
client audits also revealed some weaknesses in our
response to occupational health and safety. We have
addressed these concerns during the year by:
●●
Replacing the asbestos roof at our Elsies River factory
with a new high-tech roof with improved lighting and
adding an additional fire escape door.
●●
Training all employees on basic occupational health
and safety, and further training of 23 individuals as
fire marshals, first aid officers or hazardous chemical
safety officers. At managerial level, one employee was
trained as a health and safety representative, with
three more scheduled to complete this training during
the next financial year.
●●
Ensuring that health and safety committee meetings
are conducted at each of three factories at least
once every three months, and chaired by a health
and safety manager and attended by managers,
supervisors and shop stewards.
●●
Managing and stocking a first-aid room at each of our
factories, where treatment can be obtained for injuries,
or ill employees can lie down and rest when required.
●●
Installing appropriate signage directing every
employee’s attention to emergency exits, hazards and
policies and procedures for managing health
and safety.
50
40
43.1
30
20
22.95
10
0
13.52
2012
2013
2014
* Calculated as the number of injuries per 200 000 hours worked
This year our Total Injury Frequency Rate (TIFR)
deteriorated to 43.1 (2012: 13.52), our worst score yet
after achieving our best score last year. We attribute
this significant jump in injuries partly to the difficulty of
monitoring the behaviour of this year’s 174 new recruits
during their extensive on-the-job training. However, as we
implemented better tracking and monitoring of injuries
over the past year, we had expected to capture more
injuries than in previous years. Injuries tend to be minor
and there were no fatalities.
BREAKDOWN OF RECORDED INJURIES
2012
2013
2014
Needle pricks
14
14
33
Cuts and bruises
33
25
163
Slips and falls
1
0
3
Minor injuries
1
0
10
Lifting sprains
0
0
0
Burns
1
6
8
Total
50
45
207
After addressing all concerns highlighted by the client
audits, we commissioned Hazard Identification and
Risk Assessments (HIRA) at each of our factories. Our
Maitland factory achieved a rating 98.7%, Epping 99%
and Elsies River 93% and all three were deemed to have
‘acceptable’ levels of occupational health and safety.
Employees are heavily impacted by HIV/Aids, and this
has a concerning impact on the workforce, productivity
and employee turnover. Impahla therefore urges its entire
workforce, including senior managers, to take voluntary
tests. Working in close co-operation with the NBC as well
as SACTWU, HIV/Aids awareness campaigns are regularly
held at Impahla.
39
CHAPTER 3 OUR MATERIAL ISSUES MANAGING GROWTH
Managing growth
O
ur revenue has doubled over past two years and demand for our garments and other products remains high.
We have been investing extensively in growing the business over the last number of years. Fortunately demand
continues to grow and exceed our production capabilities.
Measuring the gross margin, managing efficiency
Minimise costs, maximise working capital
The most important issues
Impahla needs to focus on
in order to deal successfully
with anticipated growth in
demand are:
Improving customer relations
Developing management capacity
Developing HR capacity and other resources
Financing growth
Maintaining equipment
Through our contract with PUMA, we have been
privileged enough to supply sporting apparel to,
among others, the following major events and sporting
franchises:
BUSINESS GROWTH
2013 CAF African Cup of Nations replica kit for
national soccer teams representing Ghana, Ivory Coast
and South Africa
R80
●●
2014 FIFA World Cup replica supporters kit for Ghana,
Ivory Coast and Cameroon
60
●●
South African national soccer team, Bafana Bafana, full
sporting kit for players and replica supporters’ jerseys
●●
Full sporting players’ kit and replica supporters’ kit for
PSL teams Moroka Swallows and Jomo Cosmos.
●●
Super Rugby and Currie Cup full sporting rugby kit
for players and/or replica supporters’ jerseys for the
Sharks, Blue Bulls, Free State Cheetahs and Eastern
Cape Southern Kings
●●
Full sporting kit for PUMA-sponsored schools – Paul
Roos Gymnasium, Paarl Gymnasium, Glenwood High
School, Grey High School and Framebury High School
●●
University of Cape Town rugby kit
●●
Petro Atletico football club in Angola
●●
Mozambique National football team.
The accompanying graph illustrates the rapid growth in
Impahla’s business as well as the relative gross margin
(gross profit over revenue) per year.
R75.82 m
100%
70
80%
50
Million
●●
60%
40
30
30%
20
40%
20%
10
0
0%
2009
2010
Value of sales
2012*
2013
2014
Gross profit margin
* In 2011, we changed from December to February year-ends,
therefore 2012 refers to the 2011/12 financial year and so on
Measuring the gross margin, managing
efficiency
This year represents the first year where the production
activities at our Epping and Elsies River factories
contributed to the bottom line for an entire financial year.
The full impact of these expansions can therefore be
seen in this year’s financial and non-financial data.
Over the last two years both revenue and employees
doubled. While gross profit margin remains above 30%,
our operating profit margin (operating profit over revenue)
40
IMPAHLA CLOTHING
dropped from 9% to only 1.8% over the same period.
It is therefore clear that the expansions and associated
increase in employees, our largest cost driver, have had a
negative impact on our profitability.
It is essential that we run a highly efficient manufacturing
operation with a productive team in order for us to
compete on price internationally and still realise good
trading profits without compromising the quality of our
products. Operating efficiency depends on an array
of variables such as: the skill of our machinists, time
management among our production teams, production
line stoppages and bottlenecks, and how many repairs
need to be made to the finished products. Each product
has a time-based costing against which every operator
is measured. Software enables us to track the workflow
of every product. This has improved the accuracy of our
calculation and our ability to supervise and benchmark
our efficiency and performance.
We have a production bonus scheme in place where
bonuses accrue to an entire manufacturing line, rather
than to individuals. This encourages individuals to help
each other to perform better for the benefit of the
whole team.
In order to restore our profit margins, we have initiated a
continuous improvement programme – otherwise known
as ‘LEAN manufacturing’. Going forward, we will be
implementing the efficiency programme to improve the
operating culture within the business. Experts from the
CTCC will conduct assessments, coach our employees
and provide assistance along the way. This expert
assistance will be funded by the IDC.
While our profit margins have been outstripped by
growth in employment and capital expenditure, we are
still outperforming our competitors, and look forward to
realising the profits levels we are capable of producing
when we achieve the desired production efficiency levels.
Minimising costs, maximising working
capital
Cost management is a fundamental aspect of all parts of
the business at Impahla, and in this respect, management
leads by example. Each function in the business
continuously looks out for small areas of savings, from
stationery to delivery routes. This builds a habit of frugality
leading to reduced overheads. All purchases have to be
well motivated and signed off by the managing director.
The management of working capital is vital to our day-today cash flow as well as to smooth operations. Due to our
recent expansion, our working capital requirements have
increased substantially as we need to hold more stock to
reduce production lead times. Inventory therefore grew by
39% and accounts payable mirrored this by increasing 31%.
We look forward to improving our cost control measures
and optimising our use of working capital through the
continuous improvement programme that will start in
earnest during the next financial year.
Improving customer relations
The way our customers perceive us is fundamental to
Impahla’s success. Our policy in this regard is threefold:
to produce top quality products, at the right price, and
to deliver on time and in full, every time. These priorities
build a strong foundation for a thriving relationship.
We meet with PUMA weekly and liaise with them daily.
Our relationship is positive and we collaborate beyond the
daily production flow on special projects such as the Kit
Creator programme.
While PUMA currently provides the bulk of our sales, we
treat all our customers equally, knowing that a diverse
client base supports our long-term sustainability. Where
relevant, we attend conferences and supplier summits
with our clients, and accept invitations to other industry
events and client events such as educational factory
tours abroad.
We regularly receive requests through our website, which
is currently our most effective marketing tool. Impahla’s
annual integrated report is also available on our website to
communicate our value-based approach as a responsible
supplier to existing and potential customers. Marketing is
limited to promoting our small retail factory store.
Developing management capacity
The doubling of Impahla’s employee base over the
past two years has placed increasing pressure on the
management team. Cognisant of this, we are focused
on building the capacity of both our supervisors and
senior management. We promoted three employees as
supervisors and hired a new senior manager as head of
the new product development division. We have also
been training supervisors and managers to capacitate
them in their roles as the company grows.
Our policy to promote from within fosters employee
loyalty to the company. However, it is not without its
challenges, both in the level of training required to
improve skills, and also in that employees occasionally
struggle with the transition from being ‘one of the team’
to be the ‘leader of the team’. This is being addressed
through training and engagement.
Developing HR capacity and other
resources
Impahla continues to hire, train and absorb new
employees. This year we had 167 new recruits for a
net increase of 12% in the total number of employees
working for Impahla.
In August 2013, Kitunda Properties (Pty) Ltd purchased
the Elsies River property. Spring Romance has a 23%
share in Kitunda. After purchasing, Kitunda Properties
replaced the asbestos roof and converted the top floor
from storage to production space, essentially increasing
the overall working floor space by 1 500 m2. This can
accommodate an additional six production lines of
which one has already been implemented.
41
CHAPTER 3 OUR MATERIAL ISSUES MANAGING GROWTH
Impahla understands that it needs to continually improve
retention of employees who have already passed the
initial probationary phase with the company. We actively
seek to employ multi-disciplined individuals with good
technical ability and who are capable of working on
different lines as and when required. This aspect is a key
recruitment strategy that we believe greatly improves our
ability to deal with peaks and troughs in demand across
the range of products we manufacture. This has ensured
that we have not had to put any employees on short time
since we started ten years ago.
Financing of growth
During the period under review, Impahla purchased
assets to the value of R4.8 million (2013: R7.6 million)
to increase our production capacity and efficiency. The
expansion is being financed through existing cash flow
and bank overdraft facilities, until the IDC’s 2014 grant
funding becomes available. Cash and cash equivalents
have consequently been reduced from R1.9 million to
-R2.8 million at year end.
Maintaining equipment
As a business that depends on high-tech equipment to
produce our wares without disruption, we need to ensure
that these machines remain in good working condition.
Disruptions that result in our failing to deliver on time,
consequently impact the lead times we can offer our
clients, and therefore on our bottom line.
We have our own on-site technicians responsible for
implementing an ongoing preventive maintenance
programme, as well as fixing any production line problems
that may arise. When new equipment is installed, our
technicians are trained in its use and maintenance.
For some of the more specialised machines, external
technicians are brought in to service the equipment, or
make repairs when breakdowns occur.
42
IMPAHLA CLOTHING
Production Incentive Programme
Since 2011, we have been receiving financial
assistance, in the form of grants from the IDC, which
administers the PIP of the Department of Trade
and Industry (the dti). The PIP aims to enhance
competitiveness and productivity, and create jobs. It
is generally used for value-adding capital expenditure,
and a company needs to demonstrate that the
proposed capital expenditure will achieve the goals
of PIP.
Over the last four years, we have received a total of
R6.8 million.
R3.0
2.5
Million
As discussed on pages 36 – 37, employee turnover
has increased slightly from 26%* to 28%. This year
47% (2013: 39%) of all employees who left Impahla
absconded, the bulk of which were employees who
joined Impahla less than three months before.
R2.5 m
2.0
R2 m
1.5
1.0
R1.3 m
0.5
0
2011
R1.1 m
2012
2013
2014
PIP grants received
Impahla awarded for sustainability
practices
Impahla Clothing received two awards in the 2013
Industrial Development Corporation (IDC) Business
Partner Awards (BPAs). Launched by the IDC in
2012, the awards recognise IDC-funded businesses
that have increased the creation of balanced,
sustainable economic growth in South Africa and the
rest of Africa.
The aim of the competition is to reward fundingrecipients that have contributed to commercially
sustainable industrial development in one or more of
the four categories, namely job creation; innovation;
sustainability and regional development.
As winners of the main award of the evening in the
Job Creation category, Impahla was awarded first
place for the quantity of jobs created. This prestigious
award carried prize money of R200 000.
Impahla was then placed first in the Sustainability
category with prize money of R50 000. This award
was received for the company’s sustainability
practices, in particular the solar project, an energy
system consisting of 131 solar panels installed at the
Maitland plant, which generates approximately
50 MWh/annum and feeds directly into the
electricity grid, offsetting consumption and
approximately 1 150 tonnes or carbon over the
lifetime of the system.
The prize money has been used to purchase six
heat presses.
I
n this section, we examine the financial viability of Impahla Clothing as a business. We quantify and analyse the economic
value we are adding, first and foremost for our shareholders, then for our internal stakeholders (i.e. its employees), and
then for our external stakeholders – suppliers and the broader economic community.
Return on shareholder investment
Impahla has identified five key issues
to focus on as it seeks to improve the
equitable distribution of wealth to its
internal and external stakeholders
Equity in ownership and control of Impahla
Remuneration and employment equity
External stakeholder equity
Clothing industry and the NBC
Value-added statement
DISTRIBUTION OF VALUE
Impahla’s gross profit grew by 10% to R22.7 million in
the year under review (2013: R21 million). The vertically
integrated expansion of the company has resulted in an
integrated business (consisting of apparel, blanks branded
and printing, embroidery services, socks and fabrics)
that continues to fuel growth through a diversified
revenue stream.
70
60
50
Million
In total we generated R75.8 million (2013: R60.76
million) in revenue. The following graphs show how this
value was generated and distributed.
R75.82 m
R80
40
30
20
VALUE GENERATED
10
Total revenue : R75.82 million
0
Printing and
embroidery services
Blank
branded
6%
Collars and trims
3%
5%
16%
53%
Socks
17%
Apparel
Fabrics
For further detail on our financial performance, see the
financial statements starting on page 58.
R1.0 m
R0 m
R0 m
R0.3 m
R2.8 m
R3.8 m
R28.2 m
R39.6 m
2012
2013
2014
Retained earnings
Shareholders
Government (tax)
Providers of finance
Executive directors
Landlord
Employees (excl. directors)
External suppliers
Return on shareholder investment
Over the past year, we increased our total assets by 23%
to R47 million mainly due to a 39% increase in inventory.
We held R24.5 million (2013: R17.6 million) worth of
stock at year-end.
This increase in assets, together with a drop in our net
profit after interest and tax to R1 million (2013: R4.3
million), resulted in a drop in the return on total assets
from 11.3% last year to 2.2%.
43
CHAPTER 3 OUR MATERIAL ISSUES CREATING AND SHARING ECONOMIC VALUE
Equity in ownership and control of Impahla
Impahla’s ownership structure and shareholding is shown
on page seven.
Impahla owners’ shares were diluted by 10% each in
order for Ronald Rink, the company’s new chairman, to
obtain a 10% share of the business.
Impahla used to have a 10% black ownership and control
through Lena Jansen, but as shares were diluted over the
past two years to allow for additional shareholders, the
total black ownership has reduced to 6.75%.
We are investigating the possibility of introducing an
employee share scheme for employees, especially for
those who are prepared to live the values and take on
the responsibilities of company ownership. We have
made initial proposals to the IDC to assist with the
funding of this initiative and hope that the scheme will be
established by the start of the next reporting period.
disability. Our team is made up of 86% females (2010:
90.6%) and 95% non-whites; both key performance
indicators within the South African context. However,
since no suitably qualified disabled individuals have
applied for work at Impahla, we have yet to employ any
disabled people. Below is a graph illustrating Impahla’s
demographic breakdown, segmented by race and gender.
The overriding barrier to employment equity remains in
the selection criteria. It is vital to Impahla’s success that
we appoint only suitably qualified, skilled candidates.
A shortage of skills in some population and gender
groups limits our opportunities to align with national
demographics. We are seeing improvements in this
area, unfortunately though, as a consequence of general
downsizing and retrenchments within the industry, thus
creating a greater pool of applicants. In addition, we make
continual efforts to train and develop candidates with the
potential to learn.
DEMOGRAPHICS
Gender
Remuneration and employment equity
By operating the Elsies River and Epping factories for a
full 12 months and increasing our workforce by 12%, we
have increased non-director employee salary and wages
by 68% to R28.2 million (2013: R16.8 million), increasing
this component to 37% of the revenue we generated last
year (up from 28% in 2013).
With one of the highest Gini Coefficients in the world,
South Africa has an unsustainably wide gap between the
‘haves’ and the ‘have nots’. Functioning within a global
marketplace has its challenges, however – Impahla has
little room to bargain for the price received, considering
heavy competition from low-wage paying manufacturing
regions.
Despite this challenge, Impahla’s remuneration packages,
including salary, bonuses and incentives, are above
average for the industry, and the company is registered
with industrial councils and all other statutory bodies. In
addition to adhering to standard wages enforced by the
NBC, we have implemented bonus schemes and other
forms of non-financial reward.
Waged employees have access to a retirement plan
via the Cape Clothing provident fund and health plans
through NBC. These are managed externally by the NBC
for the textile and clothing industry in South Africa. In total
Impahla contributed R2 million to these funds, 51% of
which were paid by us as employer.
Male
63
14%
86%
Female
362
Male ethnicity
52%
44
IMPAHLA CLOTHING
24%
Coloured
33
Black
15
Female ethnicity
White
7
All employees are given opportunities to improve
their income potential through personal development,
demonstrating commitment to the Impahla team, and
by showing leadership potential. One of company’s
cornerstone policies is to promote from within, as
described on page 41 under the section ‘Developing
management capacity’.
Impahla does not permit any form of discrimination
against employees, including racism, sexual harassment
or the discrimination of persons with any form of
White
15
24%
2%
31%
67%
Coloured
260
Black
122
While Impahla alone cannot fix South Africa’s income
disparity challenge, the company nonetheless commits
to setting an example of employment equity and
remuneration that we hope will positively influence the
entire industry. Specifically, Impahla will continue to:
●●
Ensure that wages, as set by the NBC, and benefits,
as negotiated by the Cape Clothing Association (CCA)
and SACTWU, are met or exceeded throughout
operations.
●●
Engage with employees to ensure that matters
affecting their own economic sustainability are
considered whenever possible and necessary.
●●
Ensure that performance bonuses and opportunities
for additional work (i.e. overtime) are offered in a
manner that ensures that the entire Impahla team has
a reasonable opportunity to share in the company’s
economic success.
●●
Engage with PUMA to ensure that the true
cost of production is factored into Impahla’s
pricing negotiations, regardless of whether other
manufacturers are less committed to paying fair wages
for similar work.
Employers and the union annually negotiate minimum
wage increases, and these are administered by the
NBC, effective from 1 September each year. Currently
in the Western Cape, clothing and textile manufacturers
are permitted to pay below NBC rates only when taking
on new and inexperienced employees, according to an
agreement reached in 2011.
We will continue to uphold the PUMA S.A.F.E. Code
of Conduct specifically relating to human rights and
employment practices and encourage the clothing
industry to become more responsible, both on the supply
and demand sides. We also urge retail buyers to consider
human rights issues when making their buying decisions.
Our own experience indicates that responsible behaviour
can bring efficiencies and opportunities to do business
with world-class and international organisations.
Staying carbon neutral by
greening Delft
External stakeholder equity
According to the dti’s framework for the broad-based
black economic empowerment of the South African
economy, companies are expected to assist in the
empowerment of their business partners and the local
community in which they have influence. This is defined
by the dti as preferential procurement, enterprise
development and socio-economic development.
Impahla measured its B-BBEE performance for the first
time during 2013. With a total score of 40.40% we
qualified as a Level 7 contributor. However, our February
2014 assessment against the new and more stringent
B-BBEE codes, revealed a score of only 21.14% and
therefore a non-compliant B-BBEE contributor rating.
Impahla sees enterprise development, skills development
and local procurement as the most needed areas of
improvement, and its commitment to strengthening
local suppliers is a key vision for Impahla. We are working
towards regaining our Level 7 score next year.
Clothing industry and the NBC
We are committed to paying NBC wage rates.
Where Impahla is subject to minimum wages that
exceed R890 per week for machinists, foreign-owned
factories in the Newcastle area of KwaZulu-Natal are
threatening to relocate jobs out of South Africa if they
cannot be permitted to pay less than R350 per week.
Their argument is that by placing factories in more rural
areas, they should be allowed to pay substandard wages,
regardless of whether or not their wage rates can be
viewed as a living wage. The NBC continues to engage
the industry with this difficult issue.
On a warm sunny day in late September, a team
from Impahla; including managing director, William
Hughes; production director, Lena Jansen; and
Impahla Socks director, Kevin Alberts were invited
to attend the Trees for Home event in Delft,
Cape Town.
Enthusiastic community members gathered to
witness a demonstration by Desmond Winkworth,
FTFA Ecopreneur on the correct way to plant a tree
and an educational talk on caring for the trees.
Over 600 indigenous trees were given to the Delft
community members to plant around their homes.
Impahla Clothing has partnered with Food & Trees
for Africa (FTFA) for a number of years as part of our
carbon neutral programme, by funding the annual
planting of indigenous trees at schools in needy
communities throughout the Western Cape. During
2013, a total amount of 1 492 trees were planted. To
offset our carbon emissions of this financial year an
additional 2 027 trees will be planted during
Arbour Month.
45
CHAPTER 3 OUR MATERIAL ISSUES ENVIRONMENTAL PROTECTION
I
mpahla is recognised by the City of Cape Town’s 110% Green initiative, for being the first carbon neutral garment
manufacturer in South Africa. We remain committed to creating a greener, more sustainable working environment.
The clothing and textile manufacturing industry’s potential to negatively impact the environmental is considered moderate.
We recognise our responsibility to monitor, manage and reduce our environmental impacts wherever possible.
Carbon footprint
Electricity and solar power
We identified the following
six key issues relating to
environmental protection
Fuel
Travel
Water
Waste
Carbon footprint
In order to maintain our status as a carbon neutral
business, we monitor, manage and report on our carbon
footprint. Using a simple methodology and the conversion
factors given at www.carbonfootprint.com, our carbon
emissions for the current financial year totalled 759
tonnes (2013: 550 tonnes) of carbon dioxide equivalents
(CO2e), or 0.79 kg CO2e per employee hour worked.
This year represents the first year that both the Elsies
River and Epping factories contributed to all 12 months of
the year. The full impact of our expanded manufacturing
capabilities and increase employees and products
produced can be seen in the 38% increase in our total
CO2e. Our intensity of CO2e emissions (measured by
CARBON FOOTPRINT
CO2e per employee hour worked) also increased by
14%. We therefore not only increased our total carbon
emissions, which was expected, but also become less
carbon efficient than last year. The drop in efficiency is
mainly due to the energy-intensive equipment used for
sublimation and the manufacturing of socks.
To offset our carbon emissions we will plant 2 027 (2013:
1 492) trees during Arbour Month in September, through
an accredited programme run by Food & Trees for Africa.
The vast majority (92%) of our CO2e emissions related to
the electricity we purchase from the national power utility
in South Africa. The residual 8% is linked to the non-
BREAKDOWN OF CARBON FOOTPRINT
Total carbon emission: 759 tCO2e
Tonne carbon dioxide equivalent
800
0.8
700
0.6
600
500
0.4
400
300
0.2
200
100
0.0
0
2012*
2013**
2014
Carbon emission per employee hour worked
46
IMPAHLA CLOTHING
Local and international flights (Scope 3)
26.8 tCO2e
Kilogram carbon dioxide equivalent
0.79 kgCO2e
Petrol, diesel
and paraffin
(Scope 1)
34.7 tCO2e
3.5%
4.5%
92%
Purchased
electricity
(Scope 2)
697.6 tCO2e
All conversion calculations are done via www.carbonfootprint.com
* 14-month period from Jan 2011 to Feb 2012 for our Maitland
factory
** For Epping and Elsies River the data does not include a full
year’s operational activities as we acquired these factories
during the 2013 financial year
renewable fuels used in our fleet of vehicles, the paraffin
used in the boiler at our Elsies River factory, and local and
international business flights. We discuss each of these in
more detail below.
Electricity and solar power
ELECTRICITY USAGE
Total electricity used: 981 931 kWh
1 000 000
What intensity figures tell us
We use intensity figures such as consumption per
employee hour worked (calculated as: usage/
(number of employees x working days x 8.5)) for the
majority of our calculations.
This allows us to take into consideration the changes
in the size our business, i.e. the number of products
we sell and the size of our workforce, and still report
performance information that can be meaningfully
compared against past year’s information.
1.20
800 000
0.96
600 000
0.72
400 000
0.48
200 000
0.24
0
2012*
2013**
Electricity purchased
2014
Solar plant
Kilowatt hours
Kilowatt hours
1.02 kWh
0.00
Electricity generated
Electricity used per employee hour worked
All conversion calculations are done via www.carbonfootprint.com
* 14-month period from Jan 2011 to Feb 2012
** Epping and Elsies River data is included, but does not represent
a full year’s operational activities as we acquired these factories
during the 2013 financial year.
Two years ago we installed a solar photovoltaic (PV)
plant on the roof of our Maitland factory to reduce
our dependence on the carbon-based electricity
generated by Eskom. All the electricity it generates
is used by our Maitland factory, where it contributes
approximately 25% of all the electricity the
factory needs.
The plant consists of 131 solar modules capturing
energy from the sun and generating approximately
50 MWh annually. The electricity it produces is
monitored and displayed in our entrance foyer and
can be viewed on the following link: http://www.
sunnyportal.com.
We expect to offset some 1 150 tonnes of carbon
over the lifetime of the system.
The project was funded through the IDC’s Green
Energy Efficiency Fund in line with its goal to
reduce reliance on coastal-based electrical power
and introduce environmentally friendly production
processes. The system has continued to make an
impact on our monthly electricity bills with a net
saving of 23% of total electricity registered in the
Maitland plant.
The bulk (2014: 95%) of our electricity is bought from
South Africa’s power utility provider Eskom, while the
other 5% we produced ourselves via our own 30 kWp
solar photovoltaic (PV) plant at Maitland.
The Epping and Elsies River expansions were introduced
during the previous financial year. Thus, the 62% increase
in electricity usage this year reflects the impact of the
expansion over the first full 12-month period recorded.
Our CO2e emissions have increased accordingly, as they
result predominantly from the electricity we buy from
Eskom which, for the most part, is generated using coalfired power stations.
The electricity used per employee hour also increased
by 33% due to the introduction of energy-intensive
equipment for sublimation and the manufacturing
of socks.
47
CHAPTER 3 OUR MATERIAL ISSUES ENVIRONMENTAL PROTECTION
Fuel
NON-RENEWABLE FUEL CONSUMPTION
In total we used 2 900 litres of petrol and 7 000 litres of
diesel during the year in our vehicles. This 43% increase
in petrol and 57% increase in diesel usage from the
previous year was expected. We produced 31% more
items this year across a wider arrange of products which
required more deliveries and travel between our three
production factories.
Total fuel used: 17 859 l
20 000
0.016
17 500
0.014
0.0103 l***
0.012
12 500
0.010
10 000
0.008
7 500
0.006
5 000
0.004
2 500
0.002
0
2012*
2013**
Petrol
Diesel
2014
Litres
Litres
15 000
0.000
Paraffin
*** Paraffin excluded for the sake of comparability
We use an intensity ratio of litres of petrol and diesel per
employee hour worked to measure our fuel efficiency,
taking into account growing our workforce and production
facilities. Together, the total volume of petrol and diesel
used per employee hour increased by 26%, while on a
‘per garment produced’ basis the year-on-year increase
was 17%.
Elsies River’s paraffin-fuelled boiler is used during the
sock production process. This year we started measuring
the quantity of fuel used by the boiler, which amounted
to just under 8 000 litres of paraffin.
The carbon emissions that resulted from all three
non-renewable fuel sources, petrol, diesel and paraffin,
amounted to 35 tonnes of CO2 equivalent emissions
(2013: 13 tCO2e).
TRAVEL
15
Number of flights
Travel
The energy consumed outside the organisation (scope
3) consists of flights undertaken by Impahla’s senior
leadership to attend international trade shows, client
meetings and educational factory tours.
10
5
This year saw a major jump in the number of both local
and international flights. Accordingly, the equivalent
carbon emissions associated with these flights were 10
times more than last year.
0
2012*
2013**
International flights
2014
Water
Local flights
We source all our water from local municipal supplies.
Water is used mainly for human consumption such as
drinking, washing hands and flushing toilets, but also for
cleaning. Only a small quantity of water is used during
our production processes for ironing. All used water is
discharged into the municipal sewage system as we do
not currently have any water recycling systems in place.
WATER USAGE
Total water used: 2 940 kl
3 000
4
3.06 l
3
1500
2
Litres
Kilolitres
2500
1000
1
500
0
Maitland
2013**
Epping
2014
Elsies River
Litres of water used per employee hour worked
IMPAHLA CLOTHING
While our water consumption is minimal, we are
considering capturing and using rainwater in the future.
0
2012*
48
Maitland, being the largest factory, consumes 71% of
all the water we use. This year we used 2 940 kilolitres
(2013: 2246 kl), or approximately three litres per
employee hour worked.
* 14-month period from Jan 2011 to Feb 2012
** Epping and Elsies River data is included, but does not represent
a full year’s operational activities as we acquired these factories
during the 2013 financial year
Waste
Hazardous waste
In an attempt to limit the amount of waste sent to landfill
and to recycle more, we have employed an external
contractor to monitor, manage and recycle the waste on
our behalf.
Although limited in total volume consumed and/or
disposed of, hazardous materials are often used in our
manufacturing facilities, particularly in the maintenance
and operation of the facilities and equipment.
As a result we can now accurately track our waste as of
June 2013. On average we generate approximately 14
tonnes of waste per month, 11 of which is now being
recycled, while three tonnes is sent to landfill.
The total volumes are minimal. However, Impahla
continues to monitor the way all solvents, lubricants
and other hazardous materials are handled, stored and
disposed of.
Environmental expenditure
WASTE GENERATED
To remain a carbon neutral business, we offset our
carbon emissions by annually planting trees through a
certified carbon-trading programme managed by Food &
Trees for Africa.
Kilogram
150 000
120 000
25 500 kg
90 000
103 001 kg
At R100 a tree, we will spend a total of R202 700 in
the coming year on planting 2 027 trees to offset our
emissions for the year.
In addition, our waste management programme costs us
approximately R9 000 per month, after adjusting down
for the income generated from recycling.
60 000
30 000
0
2014*
Recyclable waste
Waste to landfill
Ongoing initiatives
●●
●●
RECYCLED WASTE
Total recycled waste for 2014* : 103 001kg
Fabric for
re-use
29 998 kg
Glass
1 kg
0%
29%
Metal cans
100 kg
Cardboard
17 346 kg
17%
0%
Tetrapak
33 kg
●●
●●
●●
0%
6%
Plastic
6 425 kg
●●
●●
48%
Paper
49 098 kg
●●
* Data for nine-month period since June 2013
In total we generated 128 tonnes of waste over the last
nine months of the financial year, consisting mostly of
dry recyclables and general waste. Through our external
contractor, Waste Plan, 80% of our waste (103 tonnes)
was sent for recycling while the rest was sent for disposal
at landfill.
Monitor our electricity bills on a monthly basis.
Maximise the use of natural light through
translucent roof sheeting to illuminate the factory
floor and to provide natural heating during winter
months.
Use large roller doors to create a cross-wind
cooling effect in summer, to reduce our reliance
on electricity and create a favourable working
environment.
Use energy-efficient light bulbs and fixtures in all
areas where they could be used effectively.
Use low volume dual-flow toilets in all of its
bathrooms.
Use PUMA-approved CHT inks in all screen
printing and heat transfer processes, as well as
environmentally-friendly detergents (e.g. CD11).
Commission independent water quality tests to
ensure that waste water does not contain any
harmful chemicals. The water quality has been
found to be safe for municipal discharge.
The new roof and flooring that was installed at
Elsies River allows for natural light to filter through
enhancing the working environment and reducing
our electricity usage. We are also hopeful for
further funding to install an additional solar plant
in the future.
Recycling the majority of our waste reduces the amount
of carbon we emit into the atmosphere. We have yet to
set any specific targets beyond reducing the amount of
waste we send to landfill on a monthly basis.
49
CHAPTER 4
50
IMPAHLA CLOTHING
THE HEART OF IMPAHLA
CHAPTER 4 THE HEART OF IMPAHLA
10 years of service
I
n April this year, Impahla turned 10 years old. What began from the purchase of the assets by William Hughes of an
ailing business, the Cape Town T-shirt Company, has now grown into a thriving business with three factories producing
in excess of 2.7 million units per year and an employee count of over 450 employees.
From humble beginnings operating from rented premises, a small team of 22 employees have remained core to the
business and have grown and developed along with it. Each 10 Year team member was honoured at an award ceremony,
held on 20 April 2014. In his presentation, William thanked these employees and again highlighted his appreciation for
their dedication to Impahla and for their part in the success of the business.
Our 10 year team
Ayesha Grootboom
Christine Kalie
Fayrouz Hoosain
Francis Enicker
Gail Arendse
Joan Hughes
Joyce Thebus
Koleka Futshane
Lena Jansen
Lorraine Davids
Lorraine Pretorius
Lydia Makalima
Maureen Baso
Mavis Kota
Merle Beckles
Patricia Collins
Patrick Dukes
Sharon Weitz
Shireen Stuurman
Simbulele Ntoto
Susan De Bruyn
William Hughes

Our employees are the
heart of the business,
without their hard work and
commitment to our values
we could never achieve
the successes we have
reached.”
William Hughes – Managing director
52
IMPAHLA CLOTHING
Employee awards
E
very month we reward those employees who show their dedication to the company and go the extra mile. This can
be in terms of working extra hard to meet a client deadline, exceeding their production targets or going out of their
way to make Impahla a better company to work for and do business with.
Outstanding employees are nominated for the award by supervisors, production managers and senior leadership on a
monthly basis. A list is generated and motivations given to the directors who make the final decision.
The winners are announced during employee meetings and each winner receives a shopping voucher to spend as they wish.
FUNCTION
MAITLAND
EPPING**
ELSIES RIVER**
Employee of the year
for 2013*
Juleen Kotzee
Keith Layman
Soraya Mayet
Employees of the
month
2013
2013
2013
Ruth Adams (March)
Janine Jansen (April)
Nolubabalo Mshumpela (May)
Moerida Dirks (June)
Ncebakazi Jan (July)
Chris Wilson (August)
Bernadine Roberts (September)
Lulama Sisulu (October)
Daphne Fortune (November)
Lilian Carstens (December)
Shamiela Petersen (May)
Adie Pick (June)
Nosipo Nxelewa (August)
Ruwayda Meyer (September)
Monde Beko (October)
Charlene Jacobs (November)
Soraya Mayet (March)
Kabasele Ngindu (April)
Malibongiwe Ntsinga (May)
Natasha Abrahams (June)
Blanch Terblanche (July)
Roderick Adams (August)
Enrico Davids (September)
Simone Peterson (October)
Gwenneth De Hahn (November)
Employees of the
month
2014
2014
2014
Lucia Julies (January)
Sadia Boltman (February)
Penelope Brummer (February)
Chrissie Hesselman (February)
* Applies to calendar years
** No employee of the month awards provided for the months not shown.
Employees of the year 2013
Maitland
Epping
Elsies River
Juleen Kotzee
Keith Layman
Soraya Mayet
53
Our people
54
IMPAHLA CLOTHING
55
56
IMPAHLA CLOTHING
APPENDICES
REPORT OF THE INDEPENDENT AUDITORS TO THE SHAREHOLDERS OF
SPRING ROMANCE PROPERTIES 34 (PTY) LIMITED
We have audited the annual financial statements of Spring Romance Properties 34 (Pty) Ltd which comprise the
statement of financial position at 28 February 2014, the statement of comprehensive income, the statement of
changes in equity and the statement of cash flow for the year ended and the notes, comprising a summary of
significant accounting policies and other explanatory information.
Directors’ responsibility for the financial statements
The company’s directors are responsible for the preparation and fair presentation of these financial statements in
accordance with International Financial Reporting Standards for Small and Medium-sized entities and the requirements
of the Companies Act of South Africa, for determining that the basis of preparation is acceptable in the circumstances
and for such internal control as the directors determine is necessary to enable the preparation of financial statements
that are free from material misstatements, whether due to fraud or error.
Auditor’s responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in
accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements
and plan and perform the audit to obtain reasonable assurance whether the financial statements are free of material
misstatement.
An audit includes performing procedures to obtain audit evidence about the amounts and disclosures in the financial
statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks
of material misstatement of the annual financial statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the
annual financial statements in order to design audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes
evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by
management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Opinion
In our opinion, the annual financial statements fairly present, in all material respects, the financial position of the
company as at 28 February 2014 and, its financial performance and cash flows for the year ended in accordance
with International Financial Reporting Standards for Small and Medium-sized entities and the requirements of the
Companies Act of South Africa.
58
IMPAHLA CLOTHING
Marais & Partners
Durbanville, Western Cape
Per: JN Marais
Registered Auditors
22 April 2014
SPRING ROMANCE PROPERTIES 34 (PTY) LTD
(Reg. No. 2003/010692/07)
STATEMENT OF FINANCIAL POSITION for the year ended 28 February 2014
Notes
2013
2014
R
R
Assets
Non-current assets
Property, plant and equipment
3
Investments
4
Loans receivable
5
9 716 240
10 082 722
1 500 000
378 101
464 970
10 094 341
12 047 692
17 577 626
24 495 148
757 347
213 640
7
7 991 681
10 040 702
8
1 941 106
278 962
28 262 760
35 028 452
38 362 101
47 076 144
833 040
2 333 200
10 590 384
11 630 941
11 423 424
13 964 141
2 974 108
1 771 652
219 870
253 587
Current assets
Inventories
6
Current taxation asset
Trade and other receivables
Cash and other equivalents
Total assets
Equity and liabilities
Equity
Issued capital
9
Retained earnings
Non-current liabilities
Borrowings
10
Current liabilities
Provisions
Trade and other payables
11
19 814 282
26 030 916
Accruals
12
2 149 147
1 028 671
Current taxation liability
871 082
Loans from shareholders
13
139 139
42 844
Current portion of long term liabilities
10
750 000
833 733
Bank overdraft
8
21 049
3 150 600
23 964 569
31 340 351
38 362 101
47 076 144
Total equity and liabilities
59
(Reg. No. 2003/010692/07)
STATEMENT OF COMPREHENSIVE INCOME for the year ended 28 February 2014
Notes
2014
R
R
Gross revenue
14
60 757 597
75 815 128
Cost of sales
15
(40 040 287)
(53 072 502)
Gross profit
20 717 310
22 742 626
Other income
1 240 699
5 090 593
(16 620 276)
(26 501 906)
5 337 733
1 331 313
Operating costs
Operating profit
16
Finance income
17
110 231
40 404
18
(228 226)
(331 160)
5 219 738
1 040 557
(873 671)
-
4 346 067
1 040 557
Finance costs
Profit before taxation
Taxation expense
Profit for the year
60
2013
IMPAHLA CLOTHING
19
(Reg. No. 2003/010692/07)
STATEMENT OF CASH FLOWS for the year ended 28 February 2014
Notes
2013
2014
R
R
Cash flows from operating activities
Profit for the year
4 346 067
1 040 557
Finance costs
228 226
331 160
Income tax
873 671
-
Depreciation of tangible assets
3 237 212
4 321 222
Investment income
(110 231)
(40 404)
Adjustments for:
Profit on disposal of property, plant and equipment
Operating cash flow before working capital
changes
(26 772)
(4 874)
8 548 173
5 647 661
(969 988)
(6 917 522)
(3 244 666)
(2 049 021)
-
(1 216 771)
Working capital changes
Increase in inventories
Increase in trade and other receivables
Increase in short-term loans
Increase in trade and other payables
118 134
6 250 351
4 451 653
1 714 698
110 231
40 404
Finance costs
(228 226)
(331 160)
Income tax paid
(946 668)
(327 375)
Net cash from operating activities
3 386 990
1 096 567
(7 625 082)
(4 808 830)
92 105
126 000
-
(1 500 000)
(7 532 977)
(6 182 830)
100
1 500 160
2 605 663
(1 205 592)
832 840
-
3
-
Cash generated by operating activities
Interest received
Cash flows from investing activities
Property, plant and equipment acquired
Proceeds on disposals of property, plant and
equipment
Investment acquired
Net cash generated by investing activities
Cash flows from financing activities
Capital issued
Loans (repaid)/raised
Share premium
Rounding difference
Net cash generated by financing activities
3 438 606
294 568
(Decrease)/increase in cash and cash equivalents
(707 381)
(4 791 695)
Cash and cash equivalents at beginning of the year
2 627 438
1 920 057
1 920 057
(2 871 638)
Cash and cash equivalents at end of the year
8
61
CHAPTER 5 APPENDICES GRI G4 CONTENT INDEX
GRI G4 content index
GRI G4
REFERENCE
DISCLOSURE ITEM
WHETHER
REPORTED
FULLY/
PARTIALLY
SECTION (PAGE NUMBER)
GENERAL DISCLOSURES
62
G4-1
Statement from the CEO & MD
Fully
William Hughes relates Impahla’s story (10)
G4-3
Name of the organisation
Fully
About this report (2)
G4-4
Primary brands, products, and services
Fully
The Business: Product lines (8)
G4-5
Location of the organisation’s headquarters
Fully
The Business: Geographic location (7)
G4-6
Number of countries where the organisation operates
Fully
The Business: Geographic location (7)
G4-7
Nature of ownership and legal form
Fully
The Business: Ownership structure (7)
G4-8
Markets served
Fully
The Business: Geographical location(7)
G4-9
Scale of the organisation
Fully
The Business: Organisational structure (7)
G4-10
Structure of employees in the organisation
Fully
Our people: Employee engagement (35)
G4-11
Percentage of total employees covered by collective
bargaining agreements
Fully
Our people: Union representation (36)
G4-12
Organisation’s supply chain
Fully
Our material issues: Extending our
responsibility in the supply chain (33)
G4-13
Significant changes since the organisation’s last report
Fully
G4-14
Precautionary approach or principle
Fully
Governance: What Impahla stands for (18)
G4-15
Externally developed economic, environmental and
social charters, principles, or other initiatives to which
the organisation subscribes or which it endorses
Fully
Governance: Commitments to external
initiatives (19)
G4-16
Memberships of associations
Fully
Governance: Commitments to external
initiatives (19)
G4-17
The entities included in the organisation’s consolidated
financial statements
Fully
G4-18
Defining report content
Fully
Governance: Determining what we should
manage (22)
G4-19
Material Aspects
Fully
Overview of material issues (26)
GRI Context Index (62)
G4-20
The Aspect Boundary within the organisation
Partially
manage (22)
G4-21
The Aspect Boundary outside the organisation
Partially
manage (22)
G4-22
Effect of any restatements of information provided in
previous reports
Fully
G4-23
Significant changes from previous reporting periods
Fully
The Business: Performance at a glance (6)
G4-24
List of stakeholder groups engaged by the organisation
Fully
Governance: Stakeholder engagement (20-21)
G4-25
Basis for identification and selection of stakeholders
Fully
G4-26
Organisation’s approach to stakeholder engagement
Fully
G4-27
Key topics and concerns that have been raised through
stakeholder engagement
Fully
G4-28
Reporting period (such as fiscal or calendar year)
Fully
G4-29
Date of most recent previous report
Fully
G4-30
Reporting cycle
Fully
G4-31
Contact point for questions regarding the report or its
contents
Fully
G4-32
‘In accordance’ option the organisation has chosen
Fully
G4-33
Assurance
Fully
G4-34
Governance structure of the organisation
Fully
Governance: Governance and decisionmaking (19)
G4-56
Organisation’s values, principles, standards and norms
of behaviour such as codes of conduct and codes of
ethics
Fully
Governance: What Impahla stands for (18)
IMPAHLA CLOTHING
GRI G4
REFERENCE
DISCLOSURE ITEM
WHETHER
REPORTED
FULLY/
PARTIALLY
SPECIFIC DISCLOSURES
ECONOMIC: Performance
G4-EC1
Direct economic value generated and distributed
G4-EC3
Coverage of the organisation’s defined benefit plan
obligations
G4-EC4
Financial assistance received from government
Fully
Partially
Creating and sharing economic value (43)
Creating and sharing economic value:
Remuneration and employment equity (44)
Fully
Managing growth: Financing growth (42)
Fully
Servicing our customers: Extending our
ECONOMIC: Procurement practices
G4-EC9
Proportion of spending on local suppliers at significant
locations of operation
ENVIRONMENT: Energy
G4-EN3
Energy consumption within the organisation
Fully
Environmental protection: Electricity and solar
power (47)
G4-EN5
Energy intensity
Fully
power (47)
G4-EN6
Reduction of energy consumption
Fully
power (47)
ENVIRONMENT: Water
G4-EN8
Total water withdrawal by source
Fully
Environmental protection: Water (48)
G4-EN9
Volume of water recycled and reused
Fully
ENVIRONMENT: Emissions
G4-EN15
Direct greenhouse gas (GHG) emissions (scope 1)
Fully
Environmental protection: Carbon footprint
(46), Fuel (46)
G4-EN16
Energy indirect GHG emissions (Scope 2)
Fully
(46) Electricity and solar power (46)
G4-EN17
Other indirect GHG emissions (Scope 3)
Fully
(46), Travel (48)
G4-EN18
GHG emissions intensity
Fully
Environmental protection: Carbon footprint (46)
G4-EN19
Reduction of GHG emissions
Fully
Environmental protection: Carbon footprint (46)
ENVIRONMENT: Effluent and waste
G4-EN22
Total water discharge by quality and destination
Fully
G4-EN23
Total weight of waste by type and disposal method
Fully
Environmental protection: Waste (48)
Fully
Environmental protection: Environmental
Expenditure (49)
ENVIRONMENT: Investment
G4-EN31
Total environmental protection expenditures and
investments by type
ENVIRONMENT: Supplier assessment
G4-EN32
Percentage of suppliers screened using environmental
criteria
Partially
G4-EN33
Significant actual and potential negative environmental
impacts in the supply chain and actions taken
Partially
LABOUR PRACTICES AND DECENT WORK: Employment
G4-LA1
Number of new employee hires
Fully
Our people: Employee satisfaction and direct
engagement (36)
G4-LA2
Employee benefits
Fully
Our people: Employee benefits (36)
G4-LA3
Retention rates after parental leave
Fully
engagement (36)
Fully
engagement (36)
LABOUR PRACTICES AND DECENT WORK: Labour/management relations
G4-LA4
Minimum notice periods regarding operational changes
63
GRI G4
REFERENCE
DISCLOSURE ITEM
WHETHER
REPORTED
FULLY/
PARTIALLY
LABOUR PRACTICES AND DECENT WORK: Occupational health and safety
G4-LA5
Percentage of total workforce represented in
formal joint management-worker health and safety
committees
Fully
Our people: Health and safety (39)
G4-LA6
Type of injury and rates of injury, occupational diseases,
lost days, and absenteeism, and total number of workrelated fatalities
Fully
Our people: Health and safety (39)
G4-LA8
Health and safety topics covered in formal agreements
with trade unions
Fully
Our people: Health and Safety (39)
LABOUR PRACTICES AND DECENT WORK: Training and education
G4-LA10
Programs for skills management and lifelong learning
that support the continued employability of employees
and assist them in managing career endings
Fully
Our people: Skills and career development
(37)
G4-LA11
Percentage of employees receiving regular
performance and career development reviews
Fully
Our people: Skills and career development
(37)
Fully
The business: Ownership structure (7)
Creating and sharing economic value:
Remuneration and employment equity (44)
LABOUR PRACTICES AND DECENT WORK: Diversity and equal opportunity
G4-LA12
Composition of governance bodies and breakdown of
employees per employee category according to gender,
age group, minority group membership, and other
indicators of diversity
LABOUR PRACTICES AND DECENT WORK: Supplier assessment
G4-LA14
Percentage of suppliers screened using labour practices
criteria
Partially
G4-LA15
Significant actual and potential negative impacts for
labour practices in the supply chain and actions taken
Partially
LABOUR PRACTICES AND DECENT WORK: Labour practices grievance mechanisms
G4-LA16
Number of grievances about labour practices filed,
addressed, and resolved through formal grievance
mechanisms
Fully
Our people: Managing employee grievances
(37)
Fully
Our people: Managing human rights (38)
Fully
Fully
Fully
Fully
Our people: Managing human rights (38),
Extending our responsibility in the supply
chain (33)
Fully
Fully
HUMAN RIGHTS: Investment
G4-HR1
Percentage of contracts that include human rights
clauses and that underwent human rights screening
HUMAN RIGHTS: Non-discrimination
G4-HR3
Number of incidents of discrimination and corrective
actions taken
HUMAN RIGHTS: Freedom of association and collective bargaining
G4-HR4
Operations and suppliers identified in which the right
to exercise freedom of association and collective
bargaining may be violated or at significant risk, and
measures taken to support these rights
HUMAN RIGHTS: Child labour
G4-HR5
Operations and suppliers identified as having significant
risk for incidents of child labour, and measures taken to
contribute to the effective abolition of child labour
HUMAN RIGHTS: Forced or compulsory labour
G4-HR6
Operations and suppliers identified as having significant
risk for incidents of forced or compulsory labour, and
measures to contribute to the elimination of all forms
of forced or compulsory labour
HUMAN RIGHTS: Indigenous rights
G4-HR8
Number of incidents of violations involving rights of
indigenous peoples and actions taken
HUMAN RIGHTS: Assessment
G4-HR9
64
IMPAHLA CLOTHING
Percentage of operations that have been subject to
human rights reviews or impact assessments
GRI G4
REFERENCE
DISCLOSURE ITEM
WHETHER
REPORTED
FULLY/
PARTIALLY
HUMAN RIGHTS: Supplier assessment
G4-HR10
Percentage of suppliers screened using human rights
criteria
Partially
G4-HR11
Significant actual and potential negative impacts for
human rights in the supply chain and actions taken
Partially
SOCIETY: Anti-corruption
G4-SO3
Number and percentage of operations assessed for
risks related to corruption and the significant risks
identified
Fully
Governance: Managing theft, fraud and anticompetitive behaviour (19)
G4-SO4
Communication and training related to anti-corruption
policies and procedures
Fully
G4-SO5
Number of confirmed incidents of corruption (including
theft) and actions taken
Fully
Fully
Fully
SOCIETY: Anti-competitive behaviour
G4-SO7
Instances of legal action taken against Impahla for anticompetitive behaviour, anti-trust or monopoly practices
SOCIETY: Compliance
G4-SO8
Number of identified instances of non-compliance with
law and regulations
SOCIETY: Supplier assessment
G4-SO9
Percentage of suppliers screened using criteria for
impacts on society
Partially
G4-SO10
Significant actual and potential negative impacts on
society in the supply chain and actions taken
Partially
PRODUCT RESPONSIBILITY: Product and service labelling
G4-PR5
Results of surveys measuring customer satisfaction
Acknowledgements
Compiled and written by Trialogue (Pty)Ltd
021 671 1640
Design and photography by Solo Graphics
083 702 1230
Project management by Gillian Mitri
082 450 1787
Fully
Servicing our customers: Customer
satisfaction (29)
SPRING ROMANCE PROPERTIES 34 (PTY) LTD T/A IMPAHLA CLOTHING
IMPAHLA
CLOTHING
HEAD OFFICE
Unit 10, Maitland Business Park
1 Mowbray Road, Maitland
Cape Town 7405
South Africa
[email protected]
Tel: +27 21 510 4201
Fax: +27 21 510 4257
www.impahla.co.za
FABRICS
37 Packer Avenue
Epping Industrial 2
Cape Town 7460
South Africa
[email protected]
Tel: +27 21 534 1795
Fax: +27 21 534 2200
SOCKS
16 Consani Road
Elsies River
Cape Town 7490
South Africa
[email protected]
Tel: +27 21 592 6800
Fax: +27 21 592 6802

IMPAHLA CLOTHING

Transcription

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