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The Bidvest Group LimitedSustainability report 2006

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Contents

We’re an international services, trading and distribution company, listed on the JSE, South Africa

and operating on four continents.

We employ 93 000 people worldwidebut our roots will always be South African.

In a big business environment we run our companywith the determination and commitment evident in a small business heart.

We believe in empowering people, building relationships and improving lives.Entrepreneurship, incentivisation and decentralised management are the keys.

We subscribe to a philosophy of transparency, accountability, integrity, excellence and innovation in all our business dealings.

And, we strive to deliver strong and consistent shareholder returns.

But most importantly, we understand that people create wealth, and that companies only report it.

We are proudly Bidvest – a company that creates valueand builds strength from diversity.

1 About this report2 Sustainability performance at a glance4 Our Group in brief – material issues8 Chairman’s message11 Chief executive’s message12 Sustainability at Bidvest20 Economic vitality21 Other financial information22 Black economic empowerment28 External opinions32 Divisional reviews 32 Corporate Services 38 Bidfreight 46 Bidserv 54 Bidvest Europe 62 Bidvest Australasia 66 Bidfood

74 Bid Industrial and Commercial Products 82 Bidpaper Plus

88 Bid Auto

94 Independent assurance96 Empowerment rating98 Sustainable development performance data102 GRI Index106 GlossaryIBC Administration

Bidvest publications:The Bidvest Group Limited Annual report 2006*

The Bidvest Group Limited Financial statements 2006

The Bidvest Group Limited Sustainability report 2006*

The Bidvest Group Limited Our business and products 2006*

The Bidvest Group Limited Report to our people 2006#

Corporate video: Young at heart

Multimedia: The Bidvest Group Limited 2006

Bidvoice (quarterly magazine)#

*Available on our website www.bidvest.com#Available on our intranet www.thevillage.bidvest.com

This document should be read in conjunction with the annual report.

The Bidvest Group Limited Sustainability report 2006 1

This is Bidvest’s third sustainability report that has been written for the Group’s global stakeholders.

Bidvest recognises its responsibility to report financial and non-financial information that is relevant and

material to its stakeholders. The scope, structure and content of this report, which covers the period

from July 1 2005 to June 30 2006, has been guided by the recently released G3 sustainability reporting

guidelines of the Global Reporting Initiative (GRI), as well as by stakeholder opinions reported last year.

This report includes all operations in which Bidvest has management control. Historic sustainability data

has been restated to provide for business divestments and restructuring.

The report structure is consistent with that used last year and provides a balanced and reasonable

representation of Bidvest’s multi-faceted and geographically diverse businesses. A general overview of

the Group as a whole is provided in the initial chapters. The subsequent detailed divisional reviews have

been included to provide in-depth information, perspective and for completeness. Within each division

the business units considered to be the most material are discussed. To improve comparability and

standardisation, a few data definitions have been changed – these are described in the performance data

section.

In the Group’s quest to deepen its understanding of the practical implications of “what sustainable

development means for Bidvest”, KPMG has undertaken a sustainability gap analysis. The feedback

received from KPMG is helping Bidvest shape its interpretation and expression of sustainable

development and will help guide the development of a more integrated strategy and approach for

Bidvest.

This report should be regarded as complementary to Bidvest’s annual report. “Sustainability” and

“sustainable development” have been used interchangeably in this report.

We recognise that black economic empowerment (BEE) is a South African issue and have assumed a level

of understanding from international readers and have not explained the terms as they are being used.

A glossary has been provided.

The report is printed on paper manufactured primarily from bagasse, a sugar cane by-product, and the

remaining pulp is obtained from certified sustainable afforestation. The paper bleaching process is free

of elemental chlorine. These processes reduce the impact on the environment and help conserve natural

resources.

The average exchange rates used for the conversion of foreign financial data were rand/sterling 11,44, rand/

Australian dollar 4,81 and rand/euro 7,82.

About this report

2

Sustainability performance at a glance

Highlights

4 Bidvest’s “A” empowerment rating has been reaffirmed with improvements noted all round

4 A number of business units have obtained improved and others first-time empowerment ratings

4 Increasing acceptance of Bidvest’s BEE credentials in the market

4 An electronic system is being launched to promote consistency in vetting supplier empowerment

credentials

4 Bidvest is one of only four South African companies listed in the Dow Jones Sustainability World Index

2007 and the JSE has reaffirmed Bidvest as a founding constituent of the JSE SRI Index

4 Total training spend R101,9 million (R83,0 million in South Africa)

4 Women employees – 42,4% (women employees in South Africa – 46,6%)

4 Corporate social investment spend increased to R28,7 million, equating to 0,8% of pre-taxation profit

(R25,7 million and 1,1% of profit before taxation in South Africa)

Disappointments

4 Twelve work-related fatalities, reported in the divisional reviews of this report

Challenges

4 Persistent crime problems result in high social and financial cost for South African businesses.

4 In South Africa, a lack of clarity in the definition of supplier empowerment status criteria is resulting in

inconsistent assessment criteria being used in the market place

4Developing a comprehensive sustainability strategy and management framework

4Establishing more effective programmes for managing HIV/Aids in the workplace

4Ensuring continued compliance with intensifying environmental regulations

4Attracting and retaining senior-level historically disadvantaged individuals (HDIs)

4Addressing general skills shortages

4Managing exposure of several business units to strike action


Addressing material sustainability-related challengesThis table describes how the Group’s previously identified material sustainability-related challenges and risks are being

addressed. More detail is provided in the divisional reviews.

Key challenges Actions

Developing a comprehensive sustainability strategy and management framework, and setting uniform sustainability targets that suit Bidvest’s organisational structure and culture, without damaging its decentralised culture, independence and entrepreneurial flair.

This is work in progress. Recently drafted Group HIV/Aids and environmental policies and the KPMG sustainability “gap analysis” (discussed in “External opinions”), contributed positively.

Establishing more effective programmes for managing HIV/Aids in the workplace.

While HIV/Aids remains a challenge, many businesses are making steady progress in their efforts to manage the disease. Bidvest has drafted a Group HIV/Aids policy, has commissioned an HIV actuarial prevalence study and an assessment of HIV/Aids programmes in a bid to further improve the effectiveness of engagements. Bidvest has become a member of SABCOHA, the South African Business Coalition on HIV/Aids.

Developing an effective sustainability data collation system. Bidvest’s decentralised and multi-faceted structures make data collation a challenge.

Improvements have been made to the data definitions and the data collation process. Additional non-financial data is reported. Ongoing improvements are being made.

Continuing compliance with intensifying environmental regulations.

Businesses are responsible for identifying local regulations and national legislation relevant to their businesses and this forms part of their risk management process. The company secretary regularly advises South African businesses of new legislation. Where material, businesses have dedicated staff to manage compliance.

Attracting and retaining senior HDIs. The Bidvest Academy and divisional management and leadership programmes are used to develop senior HDIs. Improved recruitment and retention strategies are employed.

Skills shortages. Most businesses are affected by skills shortages and invest in employee training and learnerships.

A number of businesses are large employers of unskilled and semi-skilled staff and are exposed to the effects of strike action.

Businesses ensure good employee relationships and offer market-related remuneration packages.

See Our Group in brief and divisional reviews for further information on material issues .

Our Group in brief

Revenue Trading profi t Funds employed EmployeesEmployee benefi ts and

remuneration

Description of business Incorporating Material issues R’000Proportion

%Growth

% R’000Proportion

%Growth

% R’000Proportion

%Growth

% NumberProportion

%Growth

% R’000Proportion

%

Corporate Services The Group’s corporate offi ce, based in Melrose Arch, Johannesburg, provides strategic direction and services to the Group, houses investments, adding value through identifying opportunities and implementing Bidvest’s decentralised and entrepreneurial business model.

4Bid Corporate Services4Bidprop4Namsov Fishing Enterprise4Namibian Sea Products4Ontime Automotive

4 Namsov/Namsea: Management of HIV/Aids; high health-related absenteeism rates; dependence on natural fi sh resources; volatile African markets and exchange rate volatility

1 295 421 1,6 10,3 108 383 3,0 17,6 1 605 182 21,5 14,7 1 705 1,8 4,3 424 5,1

Bidfreight Bidfreight is Africa’s leading private sector freight management company with a presence in every major port in southern Africa. Port operations are reinforced by strong distribution and airfreight capabilities. Bidfreight focuses on terminal operations and logistics in southern Africa, international clearing and freight forwarding and marine services.

4 Bidfreight Terminals 4International Clearing and Forwarding 4Marine Services 4Manica Africa

4 Management of HIV/Aids4potentially hazardous working environment4signifi cant water, coal and fuel consumption

4 usage of cleaning agents4skills shortages

15 787 550 20,0 15,4 536 366 14,6 13,4 (170 361) (2,3) — 5 334 5,7 (1,7) 732 8,8

Bidserv Bidserv provides South Africa‘s most extensive range of corporate

outsourced services. Its brands operate across commerce and industry. Activities include cleaning and specialised industrial cleaning operations, hygiene, laundry and janitorial services, corporate travel and travel-related banking, aviation services and airport handling, offi ce automation, interior and exterior landscaping and electronic procurement.

4Cleaning Services 4Laundry Services 4Steiner Group 4Bidserv Industrial Products 4Green Services 4 Aviation Services 4Bidrisk Solutions 4International

Payment Systems4Business Solutions and Group Procurement 4Offi ce Automation4BidTravel

4Banking Services 4Foreign Exchange Services

4 Management of HIV/Aids4cleaning agents and horticultural and other chemicals4signifi cant water, coal and electricity consumption

4 exposure to strike action4Rennies Bank staff safety and safeguarding assets

4 587 817 5,8 6,4 554 709 15,2 21,2 846 414 11,4 (1,2) 54 646 58,6 1,0 2 051 24,7

Bidvest Europe Bidvest Europe is western Europe’s leading foodservice company. Its British businesses have good claim to be UK market leaders. As a broadline distributor, Bidvest Europe supplies ingredients, fi nished products and equipment to the catering and hospitality industries.

43663 First for Foodservice – United Kingdom 4Deli XL – Belgium 4Deli XL – Netherlands 4Horeca Trade – United Arab Emirates

4 Compliance with tightening health and safety and environmental legislation4provision of comprehensive range of health and safety training4minimising resource consumption and environmental impacts

22 132 036 28,1 49,2 651 223 17,8 22,2 950 817 12,8 122,2 8 458 9,1 54,9 2 316 27,9

Bidvest Australasia Bidvest Australasia operates as Bidvest First for Foodservice in Australia and as Crean First for Foodservice in New Zealand. It is the industry leader in these markets and the only foodservice company to provide a national service.

4 Bidvest First for Foodservice – Australia Crean First for Foodservice – New Zealand

4 Risk of skills shortage and pressure on labour rates4maintaininghighest levels of food safety4increasing fuel prices4water restrictions

6 505 802 8,2 14,3 219 403 6,0 33,9 581 362 7,8 — 2 278 2,4 10,8 595 7,2

Bidfood Bidfood serves the hospitality, leisure and catering markets with a comprehensive range of food products and consumables. The division also manufactures and distributes premixes, food ingredients, spices, seasonings and other products to the bakery, poultry, meat and food processing industries and is represented in all important urban areas and tourist centres across southern Africa.

4 Caterplus4Speciality 4Catering Equipment 4Paper Products 4Hospitality Accessories 4Bidbake4Crown Foods Group

4 Management of HIV/Aids4tightening food safety and product integrity standards4maintaining and improving BEE credentials and awareness levels4increasing fuel prices

3 666 437 4,7 12,7 299 813 8,2 (5,2) 562 880 7,5 18,1 4 060 4,3 5,0 369 4,4

Bid Industrial and Commercial Products

Bid Industrial and Commercial Products is South Africa’s leading supplier of electrical products and cable, furniture and stationery products, industrial sewing and embroidery machines and market leader in packaging closures, fastenings and tape conversion.

4Voltex Electrical Distribution 4Berzack Brothers4Eastman Staples4Stationery 4Offi ce Furniture 4Packaging Closures

4 Management of HIV/Aids4skills shortages4increasing fuel prices4competition from cheap Chinese imports

6 742 508 8,5 18,4 483 899 13,2 28,7 1 381 693 18,5 29,2 6 976 7,5 5,3 758 9,1

Bidpaper Plus Bidpaper Plus is the South African market leader in print production

and value-added fulfi lment services. Core competence in business forms manufacture, label production and personalisation and mail is complemented by strategic growth into digital and electronic solutions. The manufacture and distribution of high quality stationery augment an extensive range of services.Bidpaper Plus has a broad national footprint and exports its products and services to markets in Africa and beyond.

4Printing and Related 4Stationery Distribution 4Alternative Products

4Management of HIV/Aids4potentially hazardous working environment4exposure to potentially harmful chemicals4increasing fuel prices

2 011 776 2,6 4,7 181 940 5,0 13,9 372 128 5,0 (11,4) 4 073 4,4 2,6 348 4,2

Bid Auto Bid Auto is South Africa’s second largest motor retail organisation, with nationwide representation across more than 100 wholly owned dealerships. Its activities span vehicle import and distribution, new and used vehicle sales, parts and service, fi nancial services and fl eet support, vehicle auctioneering, on-line retailing and vehicle and truck rental. McCarthy represents most vehicle marques and is the importer and distributor of all Yamaha products in South Africa.

4 McCarthy Motor Holdings4McCarthy Financial Services4McCarthy Fleet Services

4Club McCarthy4McCarthy Call-a-Car 4Eliance4Burchmore’s Car Auctions4Budget Rent a Car4Budget Van Rental4Yamaha Distributors4McCarthy Vehicle Import and Distribution

4 Management of HIV/Aids4meeting OEM BEE equity ownership requirements4diffi culty in attracting and retaining senior-level HDIs

4 talent availability, attraction and retention4deteriorating road infrastructure4increasing fuel prices4stricter emission standards

16 197 055 20,5 18,8 621 264 17,0 30,9 1 325 675 17,8 72,5 5 795 6,2 9,6 718 8,6

The Bidvest Group Limited 4Developing a meaningful and comprehensive sustainability strategy4 management of HIV/Aids4skills shortages and attracting and retaining

senior HDIs4management of environmental issues

78 926 402 100,0 23,0 3 657 000 100,0 20,1 7 455 790 100,0 22,3 93 325 100,0 5,5 8 311 100,0

Southern Africa 49 127 806 62,3 17,9 2 783 416 76,1 16,3 5 592 873 75,0 30,0 81 569 87,4 2,2 5 077 61,1

United Kingdom and continental Europe

23 292 794 29,5 38,4 654 181 17,9 33,6 1 281 555 17,2 6,2 9 478 10,2 46,3 2 639 31,7

Australasia 6 505 802 8,2 14,3 219 403 6,0 33,9 581 362 7,8 — 2 278 2,4 10,8 595 7,2

4

Revenue Trading profit Funds employed EmployeesEmployee benefits and

remuneration


%Growth

% R’000Proportion

%Growth

% R’000Proportion

%Growth

% NumberProportion

%Growth

% R’000Proportion

%

Corporate Services The Group’s corporate office, based in Melrose Arch, Johannesburg, provides strategic direction and services to the Group, houses investments, adding value through identifying opportunities and implementing Bidvest’s decentralised and entrepreneurial business model.

4Bid Corporate Services4Bidprop 4Namsov Fishing Enterprise4Namibian Sea Products4Ontime Automotive

4 Namsov/Namsea: Management of HIV/Aids; high health-related absenteeism rates; dependence on natural fish resources; volatile African markets and exchange rate volatility

1 295 421 1,6 10,3 108 383 3,0 17,6 1 605 182 21,5 14,7 1 705 1,8 4,3 424 5,1



4 Management of HIV/Aids4potentially hazardous working environment4significant water, coal and fuel consumption


15 787 550 20,0 15,4 536 366 14,6 13,4 (170 361) (2,3) — 5 334 5,7 (1,7) 732 8,8


outsourced services. Its brands operate across commerce and industry. Activities include cleaning and specialised industrial cleaning operations, hygiene, laundry and janitorial services, corporate travel and travel-related banking, aviation services and airport handling, office automation, interior and exterior landscaping and electronic procurement.


Payment Systems4Business Solutions and Group Procurement 4Office Automation4BidTravel


4 Management of HIV/Aids4cleaning agents and horticultural and other chemicals4significant water, coal and electricity consumption


4 587 817 5,8 6,4 554 709 15,2 21,2 846 414 11,4 (1,2) 54 646 58,6 1,0 2 051 24,7

Bidvest Europe Bidvest Europe is western Europe’s leading foodservice company. Its British businesses have good claim to be UK market leaders. As a broadline distributor, Bidvest Europe supplies ingredients, finished products and equipment to the catering and hospitality industries.



22 132 036 28,1 49,2 651 223 17,8 22,2 950 817 12,8 122,2 8 458 9,1 54,9 2 316 27,9



4 Risk of skills shortage and pressure on labour rates4maintaining highest levels of food safety4increasing fuel prices4water restrictions

6 505 802 8,2 14,3 219 403 6,0 33,9 581 362 7,8 — 2 278 2,4 10,8 595 7,2




3 666 437 4,7 12,7 299 813 8,2 (5,2) 562 880 7,5 18,1 4 060 4,3 5,0 369 4,4

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4Voltex Electrical Distribution 4Berzack Brothers 4Eastman Staples4Stationery 4Office Furniture 4Packaging Closures


6 742 508 8,5 18,4 483 899 13,2 28,7 1 381 693 18,5 29,2 6 976 7,5 5,3 758 9,1


and value-added fulfilment services. Core competence in business forms manufacture, label production and personalisation and mail is complemented by strategic growth into digital and electronic solutions. The manufacture and distribution of high quality stationery augment an extensive range of services.Bidpaper Plus has a broad national footprint and exports its products and services to markets in Africa and beyond.



2 011 776 2,6 4,7 181 940 5,0 13,9 372 128 5,0 (11,4) 4 073 4,4 2,6 348 4,2

Bid Auto Bid Auto is South Africa’s second largest motor retail organisation, with nationwide representation across more than 100 wholly owned dealerships. Its activities span vehicle import and distribution, new and used vehicle sales, parts and service, financial services and fleet support, vehicle auctioneering, on-line retailing and vehicle and truck rental. McCarthy represents most vehicle marques and is the importer and distributor of all Yamaha products in South Africa.


4Club McCarthy4McCarthy Call-a-Car 4Eliance 4Burchmore’s Car Auctions4Budget Rent a Car4Budget Van Rental4Yamaha Distributors4McCarthy Vehicle Import and Distribution

4 Management of HIV/Aids4meeting OEM BEE equity ownership requirements4difficulty in attracting and retaining senior-level HDIs


16 197 055 20,5 18,8 621 264 17,0 30,9 1 325 675 17,8 72,5 5 795 6,2 9,6 718 8,6



78 926 402 100,0 23,0 3 657 000 100,0 20,1 7 455 790 100,0 22,3 93 325 100,0 5,5 8 311 100,0

Southern Africa 49 127 806 62,3 17,9 2 783 416 76,1 16,3 5 592 873 75,0 30,0 81 569 87,4 2,2 5 077 61,1


23 292 794 29,5 38,4 654 181 17,9 33,6 1 281 555 17,2 6,2 9 478 10,2 46,3 2 639 31,7

Australasia 6 505 802 8,2 14,3 219 403 6,0 33,9 581 362 7,8 — 2 278 2,4 10,8 595 7,2

5


Revenue Trading profit Funds employed EmployeesEmployee benefits and

remuneration


%Growth

% R’000Proportion

%Growth

% R’000Proportion

%Growth

% NumberProportion

%Growth

% R’000Proportion

%

Corporate Services The Group’s corporate office, based in Melrose Arch, Johannesburg, provides strategic direction and services to the Group, houses investments, adding value through identifying opportunities and implementing Bidvest’s decentralised and entrepreneurial business model.

4Bid Corporate Services4Bidprop 4Namsov Fishing Enterprise4Namibian Sea Products4Ontime Automotive

4 Namsov/Namsea: Management of HIV/Aids; high health-related absenteeism rates; dependence on natural fish resources; volatile African markets and exchange rate volatility

1 295 421 1,6 10,3 108 383 3,0 17,6 1 605 182 21,5 14,7 1 705 1,8 4,3 424 5,1



4 Management of HIV/Aids4potentially hazardous working environment4significant water, coal and fuel consumption


15 787 550 20,0 15,4 536 366 14,6 13,4 (170 361) (2,3) — 5 334 5,7 (1,7) 732 8,8


outsourced services. Its brands operate across commerce and industry. Activities include cleaning and specialised industrial cleaning operations, hygiene, laundry and janitorial services, corporate travel and travel-related banking, aviation services and airport handling, office automation, interior and exterior landscaping and electronic procurement.


Payment Systems4Business Solutions and Group Procurement 4Office Automation4BidTravel


4 Management of HIV/Aids4cleaning agents and horticultural and other chemicals4significant water, coal and electricity consumption


4 587 817 5,8 6,4 554 709 15,2 21,2 846 414 11,4 (1,2) 54 646 58,6 1,0 2 051 24,7

Bidvest Europe Bidvest Europe is western Europe’s leading foodservice company. Its British businesses have good claim to be UK market leaders. As a broadline distributor, Bidvest Europe supplies ingredients, finished products and equipment to the catering and hospitality industries.



22 132 036 28,1 49,2 651 223 17,8 22,2 950 817 12,8 122,2 8 458 9,1 54,9 2 316 27,9



4 Risk of skills shortage and pressure on labour rates4maintaining highest levels of food safety4increasing fuel prices4water restrictions

6 505 802 8,2 14,3 219 403 6,0 33,9 581 362 7,8 — 2 278 2,4 10,8 595 7,2




3 666 437 4,7 12,7 299 813 8,2 (5,2) 562 880 7,5 18,1 4 060 4,3 5,0 369 4,4

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4Voltex Electrical Distribution 4Berzack Brothers 4Eastman Staples4Stationery 4Office Furniture 4Packaging Closures


6 742 508 8,5 18,4 483 899 13,2 28,7 1 381 693 18,5 29,2 6 976 7,5 5,3 758 9,1


and value-added fulfilment services. Core competence in business forms manufacture, label production and personalisation and mail is complemented by strategic growth into digital and electronic solutions. The manufacture and distribution of high quality stationery augment an extensive range of services.Bidpaper Plus has a broad national footprint and exports its products and services to markets in Africa and beyond.



2 011 776 2,6 4,7 181 940 5,0 13,9 372 128 5,0 (11,4) 4 073 4,4 2,6 348 4,2

Bid Auto Bid Auto is South Africa’s second largest motor retail organisation, with nationwide representation across more than 100 wholly owned dealerships. Its activities span vehicle import and distribution, new and used vehicle sales, parts and service, financial services and fleet support, vehicle auctioneering, on-line retailing and vehicle and truck rental. McCarthy represents most vehicle marques and is the importer and distributor of all Yamaha products in South Africa.


4Club McCarthy4McCarthy Call-a-Car 4Eliance 4Burchmore’s Car Auctions4Budget Rent a Car4Budget Van Rental4Yamaha Distributors4McCarthy Vehicle Import and Distribution

4 Management of HIV/Aids4meeting OEM BEE equity ownership requirements4difficulty in attracting and retaining senior-level HDIs


16 197 055 20,5 18,8 621 264 17,0 30,9 1 325 675 17,8 72,5 5 795 6,2 9,6 718 8,6



78 926 402 100,0 23,0 3 657 000 100,0 20,1 7 455 790 100,0 22,3 93 325 100,0 5,5 8 311 100,0

Southern Africa 49 127 806 62,3 17,9 2 783 416 76,1 16,3 5 592 873 75,0 30,0 81 569 87,4 2,2 5 077 61,1


23 292 794 29,5 38,4 654 181 17,9 33,6 1 281 555 17,2 6,2 9 478 10,2 46,3 2 639 31,7

Australasia 6 505 802 8,2 14,3 219 403 6,0 33,9 581 362 7,8 — 2 278 2,4 10,8 595 7,2

7

Our Group in brief

Revenue R’bn Trading profit R’m Trading margin %

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05

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06

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06

05

06

05

06

05

06

05

06

05

06

05

06

05

06

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06

05

06

05

06

05

0 100 200 300 400 500 600 700

06

05

0 5 10 15 20 25 0 2 4 6 8 10 12

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06

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06

05

0 5 10 15 20 25 0 100 200 300 400 500 600 700 0 2 4 6 8 10 12

06

05

06

05

0 5 10 15 20 25

06

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0 100 200 300 400 500 600 700 0 2 4 6 8 10 12

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05

06

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06

05

0 100 200 300 400 500 600 7000 5 10 15 20 25 0 2 4 6 8 10 12

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05

06

05

06

05

0 100 200 300 400 500 600 7000 5 10 15 20 25 0 2 4 6 8 10 12

8

Life on earth, in its astonishing abundance and diversity, has

taken billions of years to evolve. While corporations make a

significant contribution to economic and social development,

there are growing concerns about some of their social and

environmental impacts and increasing expectations for

them to make more positive contributions. The purpose of

sustainable development is to allow life to continue to flourish,

requiring us to reduce our negative impact on life-supporting

ecosystems. Responsible corporate citizens proactively

develop business practices that minimise these impacts.

Bidvest, over the last 18 years, has evolved into a successful,

diversified, multinational business. We provide a livelihood

to more than 93 000 valued employees. We are well into an

extensive transformation process. We are making progress

in our fight against HIV/Aids. We have put in place a

Group-wide environmental policy. We are involved in a

multitude of worthy corporate social investment projects.

While we do not yet have an overarching sustainability

strategy and management framework, we are establishing a

solid basis from which to expand our sustainability activities.

For Bidvest and all businesses, contributing to the

sustainability of life is not only a growing obligation and

challenge, but also what being a good corporate citizen is

all about. Business is expected to work towards developing

processes, products and services with zero negative impacts.

Yet destructive, wasteful practices persist and low-level

recycling and efficiency programmes only scratch the surface.

What is required is a fundamental redesign of products and

production, distribution and disposal processes. To make this

happen, massive investments are required.

This is where corporate leaders find themselves constrained.

The incentive for corporations to invest deeply in projects

that improve sustainability is limited, as least-cost production

is one of the tenets of business continuity in a competitive

world. Companies that over-invest in sustainability projects in

an unregulated market risk uncompetitiveness, a conundrum

that business and government need to tackle collaboratively.

Mitigating social and environmental impacts and costs,

known as externalities, and creating a regulatory environment

conducive to good sustainability practices on a level playing

Chairman’s message


Cyril Ramaphosa

Non-executive chairman

field is primarily the responsibility of the government. While

shareholders demand single-minded attention to profit and

shareholder value maximisation, we at Bidvest are balancing

this business principle by collaboration with regulatory

authorities on sustainability issues.

Destructive business practices have to be penalised

and life-enhancing practices rewarded. Financial and

tax incentives can be used where “doing good” makes

businesses uncompetitive. Such carrot-and-stick mechanisms

will reward businesses investing in sustainable development

and make it synonymous with maximising shareholder value.

All nations face this issue and those that create mechanisms

that foster business and societal sustainability, will be nations

that build competitive advantage. South Africa cannot delay.

International and local customer, activist, regulatory, and

corporate pressures are escalating rapidly, significantly driven

from within the European Union. The contribution of business

to sustainability is becoming the new driver and yardstick for

success.

Developing nations like South Africa have the added

responsibility of social transformation, which needs to be

properly aligned with growing environmental expectations.

Our collaborative experience in developing successful

transformation frameworks may prove a valuable asset in

developing similar structures in the broader environmental

and social context.

Bidvest’s multi-faceted businesses will continue in their

quest to satisfy customer needs, care for their employees,

be environmentally responsible and develop life-supporting

business practices, while maximising shareholder value.

10

Over its 18-year lifespan Bidvest has grown into a well-respected

multinational. While the business has grown substantially in size

and diversity, we remain entrepreneurial and decentralised. This

empowers business managers to use their flair and operational

freedom to develop and grow their businesses within a

framework of common values and codes of conduct and ethics.

Society’s changing expectations regarding the role of

business in society – reflected in corporate citizenship,

transformation, sustainable development and regulatory

imperatives – add to the complexity and cost of running a

business. The result for Bidvest is a pressure to centralise and

standardise governance structures. Such policies, processes

and reporting mechanisms can be stifling and do not sit well

with our decentralised, entrepreneurial culture.

We recognise, however, that sustainable development is

becoming a new imperative for business and nations and

that their success will depend on how effectively they address

persistent environmental and social issues, such as poverty,

transformation, resource depletion and climate change.

On a continuum, going from non-compliance to leadership,

there are, broadly-speaking, two strategic approaches

to sustainability. The one is compliance-driven, where

corporations “follow” what is mandated and regulated, making

minimal investments to operate within legal regulations and

conform to society’s minimum expectations. The other is a

pro-active approach, where corporations take “the lead” and

go beyond basic regulatory requirements to creatively search

for new solutions to sustainability problems. These can be used

as a source of competitive advantage.

The ethos of sustainable development and good corporate

citizenship is about going beyond minimum expectations

and using the corporate sphere of influence as a creative

driver for positive change. This requires a significant shift in

mindset and culture for most corporations, including Bidvest.

A pro-active stance can become a source of inspiration and

innovation for the corporation, leading to improvements in

workforce motivation, customer loyalty, new business, brand

value and operational efficiencies. Momentum from this is likely

to promote prolonged competitive advantage and growing

shareholder value. Benefits, however, are constrained by the lack

of meaningful incentives offered by the current economic and

political systems and a pro-active stance may take corporations

beyond the currently possible business case for sustainability.

Chief executive’s message


Brian Joffe

Chief executive

In South Africa and other developing nations we are faced

with the dual challenge of transforming society as well as

dealing with a broader set of social and environmental

issues. An enormous challenge is crime and its social and

financial costs to business and society. In terms of both

national renewal and businesses growth, there can be no

sustainability without the resolution of our crime problems.

For the majority of South Africans environmental issues,

arguably, are distant priorities to shelter, food, a steady job

and personal security.

Some of Bidvest’s businesses are pro-active and world-class

in the field of sustainable development, while others

have tended to adopt a compliance-driven approach.

Most fall between these two extremes. For the Group our

transformation process has been a resounding achievement.

A number of our South African businesses excel in the

management of HIV/Aids and corporate social investment

initiatives. The United Kingdom’s 3663 is one of our

businesses recognised as a leader in the UK foodservice

product distribution industry and has received a number of

environmental and social awards. We have show-cased them

as an example to our other businesses.

Discussions were held with divisional chief executives and

members of their management teams on what sustainable

development means to their businesses. This has furthered

the discussion and understanding of the topic within

divisions and will assist them with integrating sustainability

principles into their businesses.

To Bidvest, sustainable development is about finding

ongoing improvements in operational efficiencies, ensuring

long-term profitability and doing the “right thing” in its

ever broadening definition – and is an integral part of

business. We are continually refining our understanding of

what sustainable development means for the Group. We

will provide our businesses with a guiding sustainability

framework that complements our entrepreneurial culture and

adds value to what they are already doing. The framework

will include an overarching vision, implementation strategy,

and review and reporting processes.

12

Sustainability at Bidvest

Indicator 2004 2005 2006

Revenue (R’000) ✦ 62 811 776 77 276 491

South Africa ✦ 39 060 694 45 786 182

International ✦ 23 751 082 31 490 309

Trading income (R’000) ✦ 3 164 646 3 657 000

South Africa ✦ 2 426 552 2 625 461

International ✦ 738 094 1 031 539

Employees 81 010 88 441 93 325

South Africa 68 229 75 955 78 029

International 12 781 12 486 15 296

Total training spend (R’000) 72 865 85 658 101 943

South Africa 58 227 74 596 83 022

International 14 638 11 062 18 921

Training spend per employee (R) 894 876 1 092

South Africa 853 982 1 064

International 1 145 886 1 237

Injury rate ✦ ✦ 2,33

South Africa ✦ ✦ 1,62

International ✦ ✦ 6,65

Lost-day rate ✦ ✦ 55,9

South Africa ✦ ✦ 43,4

International ✦ ✦ 131,8

Work-related fatalities ✦ 11 12

South Africa ✦ 11 11

International ✦ 0 1

Black economic empowerment procurement

(R’000) 4 206 218 5 406 947 4 117 606

Black economic empowerment procurement

as % of discretionary spend 30,0 32,2 30,3

Corporate social investment (R’000) 11 691 17 390 28 650

South Africa 10 389 15 877 25 724

International 1 302 1 513 2 926

Corporate social investment as % of pre-taxation

profit 0,5 0,6 0,8Note:

– Indicator notes and definitions are provided in the sustainable development performance data .– Where divisional structures changed, figures were restated to allow comparison and have been adjusted to exclude disposed/closed businesses.– 2004 financial figures have not been provided due to restructuring and IFRS.– Employee-related data includes non-permanent employees. – Health and safety indicators have changed. – Empowerment data is for South Africa only.

✦ Information not available.


MANAGING SUSTAINABLE DEVELOPMENT

Bidvest is a geographically diverse and multi-faceted

business that operates in many different countries and

industry sectors, providing employment to more than

93 000 people and economic benefit to an even larger

number of people. The success of Bidvest’s business model

is based on its decentralised, autonomous structure and

its entrepreneurial and dynamic culture. Divisions function

independently, yet derive the benefits of being part of a

larger group.

Bidvest business units take responsibility for their sustainable

development priorities and initiatives. Bidvest provides

guidelines for financial management, corporate governance

and transformation. The day-to-day aspects of sustainability

in its cross-cutting nature are dealt with by business

managers from different functional areas: economics is dealt

with by finance; social issues are the responsibility of human

resources; and environmental issues are the responsibility

of environmental managers or appointed operational staff.

At divisional and corporate level, sustainability is largely

managed as part of the risk management process, for which

management takes responsibility with support from the

corporate and divisional audit and risk committees.

Sustainability for Bidvest is about sound business practices,

risk management, good governance, taking account of

stakeholder opinions, stewardship of natural resources, black

economic empowerment (BEE) and developing employees.

Sustainability is the “right thing to do” and is an integral part

of doing business.

BEE as a tool for socio-economic transformation is a core

component of developing sustainable businesses and

communities in the South African context. BEE is a business

imperative and, through an equitable distribution of wealth,

a more stable and enduring economic environment will

develop.

Sustainable development is a process and every year there

is a deeper understanding and appreciation of this topic

among business units. Given the Group’s unique structure

and culture, Bidvest continues to evaluate what sustainable

development means for the Group and how to manage it.

CORPORATE GOVERNANCE

Corporate governance is a cornerstone of a sustainable

business and Bidvest is committed to an open governance

process based on the principles of transparency, accountability,

integrity and ethical behaviour that complements the

Company’s entrepreneurial flair. Bidvest’s commitment to

corporate governance is captured in its corporate governance

policy in the 2006 annual report and corporate governance

manual that includes the Group’s corporate values, corporate

code of conduct and code of ethics. The corporate governance

policy assumes an inclusive approach to good corporate

governance as advocated in the King II report.

The board of directors

The Bidvest board has been restructured and reduced. On

June 28 2006, the Group announced its revised directorate

incorporating the philosophy of maintaining the Bidvest

culture of decentralisation and participative management

styles, while ensuring succession planning and strengthening

the non-executive component along with the Dinatla BEE

representation. The Bidvest board comprises 24 directors,

consisting of seven (29,2%) non-executive independent, five

(20,8%) non-executive and 12 (50,0%) executive directors. The

board constitutes 29,2% black, 25,0% female and 91,7% local

directors.

Functions of the board

The board charter sets out the mission, roles, duties and

responsibilities of the directors to ensure that they fulfil

their duty with the necessary diligence. The nomination

committee annually appraises the performance of individual

directors, the board and the chief executive.

Board committees

The board has delegated certain responsibilities and powers

to committees. The committees, as of September 1 2006, are:

4 Group executive committee

4 South African executive committee

4 Audit committee

4 Risk committee

4 Remuneration committee

4 Acquisition committee

4 Nomination committee

4 Transformation committee

14


Managing risk

A stand-alone risk committee reporting directly to the

board has been established. The risk and audit committees

are responsible for managing risk and the process of

entrenching good corporate governance and appropriate

sustainability practices throughout the Group. Each division

has an audit committee, which collates the business units’

risks and reports these to the Group risk committee at least

four times per year. Group risk management is achieved

through the identification and control of the main business

and operational risks, which could adversely affect the

accomplishment of the Group’s business objectives.

Bidvest’s 24-hour fraudline serves a valuable function for the

Group and its employees in identifying areas of concern.

Investigations have led to a number of prosecutions and to

financial controls being improved.

Managing transformation

The transformation committee facilitates the Group’s

socio-economic transformation process. The transformation

committee has developed an enterprise-based charter, the

Bidvest charter, that guides the Bidvest BEE transformation

strategy.

MATERIAL ISSUES

The Group’s principal material issues and challenges are

discussed at the front of this report and in the divisional

reviews.

MANAGEMENT SYSTEMS AND GOVERNANCE

Businesses, where deemed to be of material benefit, have or

are working on implementing formal management systems. In

most cases these are generic management system standards

for quality (ISO 9000) and environmental (ISO 14000)

management, which are independent of product or industry.

Management systems, whether formal or informal, are usually

present in business units that deal with hazardous products,

have hazardous working environments or where quality is of

particular importance. However, both ISO 9000 and ISO 14000

are becoming increasingly important in business-to-business

dealings and provide an authoritative indication of how

quality, social and environmental activities are managed.

BLACK ECONOMIC EMPOWERMENT

Business units subscribe to the Bidvest charter and BEE

scorecard, which guide the Group’s transformation strategy,

as systems to measure and monitor BEE performance. In

South Africa, most divisions have appointed a commercial

director to champion transformation across business units.

The commercial directors assist businesses in meeting targets

and fostering business synergies within Bidvest and with

outside business partners, including Dinatla shareholders.

The Bidvest Group’s “A” empowerment rating was

reaffirmed, showing improvements all round. Progress in

most areas is in line with the transformation scorecard.

The principal challenge, in view of the national skills

shortage at top levels, is to improve representation at

senior and executive management level. There is a growing

commitment to BEE across the Group but there remains

a need to further embrace BEE as an opportunity and

strategic imperative. An increasing number of businesses

are in the process of obtaining empowerment ratings, or are

strengthening current empowerment credentials.

A separate socio-economic empowerment review is provided

in this report.

WORKFORCE

Bidvest employs 93 325 people. The majority (78 029) work

in South Africa, of which a major proportion is historically

disadvantaged individuals (HDIs). The Group thus makes a

material contribution to a considerable segment of South

Africa’s population. Notwithstanding growth in employee

numbers through acquisition, Bidvest has been a substantial

net employer over a sustained period of time.

Each intake of the Bidvest Academy, Bidvest’s leadership

development programme, conducts employee potential

utilisation surveys. To date 3 600 employees have been included.

Employee potential utilisation is a measure of the inherent

and potential ability of the employee to be motivated,

developed, innovative and productive. Globally, employee

potential utilisation is seen as a critical strategic imperative for

all organisations to establish a sustainable and competitive

advantage. The challenge for business leadership is to fully


develop the potential of each individual, which is especially

important in South Africa, where, according to surveys

conducted by Quanta Consulting, most employees believe

they use only 30% or less of their potential at work.

The Academy assists Bidvest in raising the level of employee

potential utilisation across divisions. The challenge is seen

as a strategic issue for the Group and an opportunity for

the Academy to add value in contributing to Bidvest’s future

competitiveness and sustainability.

Businesses comply with the South African Labour Relations,

the Basic Conditions of Employment, the Skills Development,

the Employment Equity, the broad-based black economic

empowerment, Unemployment Insurance and the

Occupational Health and Safety Acts, or their equivalents in

other countries.

Businesses typically have codes, policies and procedures in

place that cover recruitment and selection, business conduct,

non-discrimination, industrial relations, employment equity,

grievance and dispute settlement, HIV/Aids and other

life-threatening diseases, employee conduct, freedom of

association, ethics and sexual harassment. Many of these

were negotiated and agreed with trade unions. Companies

tend to have formal grievance procedures in place, which in

South Africa are in accordance with Schedule 8 of the Labour

Relations Act.

Many businesses have structured employee development

programmes and related performance appraisal systems in

place and a growing number of businesses conduct formal

employee satisfaction surveys.

Communication

Bidvest communicates with its employees across all divisions:

4 The circulation of Bidvoice has grown to 40 000, reaching

out to Bidvest employees on four continents. The quarterly

staff magazine keeps Bidvest people informed about

what is happening at Group and business unit level. The

magazine includes information on the Group’s corporate

social responsibility activities, readers’ views, top achievers,

long-standing service, Group and company awards, as well

as reporting on health, safety and the environment.

4 Many divisions and business units have an intranet and

publish newsletters in print or online for employees.

4 The Village, Bidvest’s community portal, serves to enhance

internal communications, grow the Bidvest community and

to develop business synergies. Interactive communities

offer up-to-date information and discussion forums

that allow and encourage the exchange of ideas and

suggestions. The Village is expanding its functionality to

include the growing information-gathering requirements,

with tools for the BEE scorecard, Group BEE procurement

and monthly flash results being rolled out. The goal is to

touch every Bidvest employee and ongoing initiatives aim

to increase usage of the Village.

Health and safety

The Group values employees and their health and safety.

The Group is dedicated to meeting relevant occupational

health and safety standards, as well as sound global best

practices. South African companies ensure compliance with

the Occupational Health and Safety (OHS) Act. Businesses,

where health and safety issues are material, tend to be

National Occupational Safety Association (NOSA), or

equivalent, certified. Ongoing training and awareness play

an important part in creating a safer and healthier working

environment.

It is with regret that Bidvest reports the death of

12 employees while on duty. Full investigations are

conducted of fatal incidents and adaptations to the

health and safety processes are made where necessary.

The fatalities are discussed in the divisional sections

for Bidfreight, Bidserv, Bidfood and Bid Industrial and

Commercial Products.

This report includes health and safety data as recommended

by the GRI.

The injury rate for Bidvest was 2,33 and the lost-day rate was

55,9. Definitions relating to occupational health and safety

have been brought in line with the GRI’s G3 guidelines and

its technical protocols and are stated in number of cases

per 200 000 hours. Comparison with prior years is thus not

possible. Fatalities were not reported separately prior to 2005.

16


HIV/Aids

The HIV/Aids epidemic is a significant challenge affecting

most Bidvest companies in southern Africa. A Group

HIV/Aids policy, which serves to guide businesses in

developing appropriate programmes, has been finalised

and is awaiting formal adoption. A copy of the policy is

included in this section and is available on the Bidvest

website. Bidvest companies are pro-actively tackling the

epidemic, often in co-operation with unions. While a

number of businesses are making progress and several have

outstanding HIV/Aids programmes, many businesses must

improve their response strategies. HIV/Aids is a complex

issue and requires persistent work and creative initiatives to

break down taboos and prejudices.

An HIV actuarial prevalence study and an assessment of the

HIV/Aids programmes are being conducted by an outside

specialist as an initial step towards quantifying the impact

of HIV/Aids on the Group. Employee data for 62 000 South

African employees will be used to provide a statistically

derived indication of HIV infection, Aids sickness and yearly

Aids-related death and disability rates. These initiatives will

allow Bidvest to enhance existing programmes and assist in

the development of a co-ordinated HIV/Aids strategy for the

Group. While the studies are not yet complete, preliminary

findings indicate that the HIV prevalence rate is around

17,3%, which is an average and, given Bidvest’s diversity,

cannot be applied to any one business unit in isolation.

Bidvest has become a member of SABCOHA, the

South African Business Coalition on HIV/Aids, which

gives the Group access to a best practice knowledge

base and will assist the Group to more effectively address

HIV/Aids.

Training

Employee development is a vital aspect of maintaining a

motivated, competent workforce, especially given South

Africa’s shortage of skilled labour. Training programmes are

structured according to business and employee needs. In

2006, R1 092 was spent on training per employee, up from

R876 in 2005. Numerous companies offer staff education

bursaries, adult basic education and training (ABET)

programmes and other educational benefits.

COMMUNITY

Customers

Bidvest interacts with a broad range of corporate and

private customers. While a number of businesses conduct

formal customer satisfaction surveys, most interact with their

predominantly corporate clients on a regular basis and feedback

is used to enhance service delivery. A number of businesses

formally log customer feedback and subsequent actions, often

as part of a quality management system such as ISO 9000.

Bidvest Academy delegates have conducted customer

loyalty surveys. These surveys measure the extent to which

a customer will return for repeat business and the extent to

which he or she will willingly advocate the business to his or

her friends and colleagues – a loyal customer. A dissatisfied

customer in contrast may the next time choose a different

supplier. Customer loyalty is particularly important for mature

businesses and the challenge is to convert disloyal and

dissatisfied customers to loyal customers.

Based on Academy research, customer loyalty across the

Group is approximately 83%. This is a good score, but with

a lower employee potential score, there is a degree of

vulnerability in the system. The goal within the Academy

is to assist the Group in raising employee potential, in

turn customer loyalty and, in so doing, further strengthen

business competitiveness and ability to grow.

Community activities

Responsibility for corporate social investment (CSI) activities

resides with Bidvest divisions and their business units, most of

which support a variety of initiatives. There is a trend towards

CSI projects being co-ordinated at divisional level, the objective

being to provide more substantial support to a limited number

of philanthropic projects of relevance to the division and

Bidvest. Bidvest CSI covers: education and training, health and

HIV/Aids, community development, sports, arts and culture,

environmental initiatives, economic empowerment and job

creation, safety and security and welfare.

Group CSI spend increased to R28,7 million (2005: R17,4 million),

which equates to 0,8% of pre-taxation profit. The South African

operations spent R25,7 million, which equates to 1,1% of profit

before taxation.


ENVIRONMENTAL

Bidvest consists of services, trading and distribution

businesses, which have a variety of environmental impacts.

The JSE SRI Index has classified Bidvest as a business with a

“medium” environmental impact. As a minimum, businesses

ensure compliance with applicable environmental legislation

and, in many cases, through the use of newest technologies

and best practices, go beyond compliance.

A Group environmental policy, which encourages businesses

to take a more pro-active stance towards the environment

as a sustainability issue, has been finalised and is awaiting

formal adoption, page 3.

United Kingdom-based 3663 stands out as a leader in the

Group, with its pro-active stance towards the environment

and its innovative environmental projects. A detailed case

study describing 3663’s environmental journey serves as an

example to other Bidvest companies and is included in the

Bidvest Europe divisional review.

The standardisation of data and the data collation process

have improved. Yet, in a group as diverse and decentralised

as Bidvest, ongoing work is required to streamline the

collation, management and usability of sustainability data

and to ensure management takes ownership of information,

to guide appropriate actions.

EXTERNAL APPRAISAL

Empowerment rating

Bidvest, a level four contributor and a good broad-based BEE

contributor, with unrestricted operational capacity, has an

“A” empowerment rating from Empowerdex.

Fitch Ratings

Fitch Ratings affirmed Bidvest’s credit rating as an AA- (zaf).

AA- (zaf) ratings denote a very strong credit risk relative to other

issuers in the same country.

Revenue ranking

Bidvest was ranked eighth of JSE-listed companies and fourth of

JSE-listed South African companies, by revenue.

Dow Jones Sustainability World Index

Bidvest is one of only four South African companies listed in the

Dow Jones Sustainability World Index 2007, a grouping of global

organisations that meets stringent criteria for strategic strength,

innovation, financial performance and stakeholder relations.

JSE Social Responsibility Investment Index

Based on an assessment of the Group’s policies, performance and

reporting on economic, social and environmental sustainability,

the JSE has reaffirmed Bidvest as a founding constituent of the

SRI Index.

Forbes Global 2000 – the world’s leading companies

Forbes Global 2000 is a comprehensive list of the world’s largest

and most influential companies, as measured in US dollars by

a composite ranking for sales, profits, assets and market value.

Bidvest is ranked 1 114th (2005: 1 162nd).

FTSE/JSE Africa Index Series ranking

In the June 2006 FTSE/JSE Africa Index Series quarterly review,

Bidvest was ranked 24th in both the FTSE/JSE All Share Index

and Top 40, 7th in the FTSE/JSE Industrial 25, with a market

capitalisation of R32,1 billion, a 100% free float and the JSE’s

highest liquidity rating.

Morgan Stanley International Emerging Market Index

Bidvest is considered to have a 100% free float for the MSIEM

Index in which it is included.

Bidvest as an employer of choice

Bidvest has been nominated by a panel of experts as one of

the top 10 companies to work for in South Africa in research

undertaken by the Corporate Research Foundation.

Company confidence predictor

In the June 2006 Campbell Belman company confidence

predictor, the influential twice-yearly survey of investment

analysts, Bidvest was rated highest among industrial companies

for its “company basics” and was particularly strong in “makes

effective use of capital”, “shows good judgement in acquisitions

or joint ventures” and “maintains a reassuring balance

between risk and return”. In “future potential” Bidvest was the

18


leading company for being “alert to new ideas to improve its

profitability”, in “people” as having “an effective chief executive”

and in “communications” for “chief executive is a straight talker”.

In “ethics” Bidvest shared the lead in “lives up to promises

– company results match expectations” and “believes in full

disclosure – is transparent” and was rated second in being

“reputable, honest and trustworthy”. Overall Bidvest was rated

third on the “total” industrials across all 28 characteristics used

in the evaluation. Of note was that for its “company basics”

Bidvest was also rated highest among the top companies, from

all sectors, in market capitalisation.

Investment communication award

Bidvest is not only recognised as an achiever in creating value

for investors, but also for general reporting and investment

communication. In June 2006, Bidvest received an award, for

the second year in a row, from the Investment Analysts’ Society

for the best reporting and communication in the JSE industrial

services sector.

Most admired company

In Finweek/Afrika‘s most admired company and CEO peer

review survey, Bidvest was ranked fourth and Brian Joffe second,

respectively.

HIV/AIDS POLICY – awaiting board approval

Bidvest recognises the human tragedy caused by the

HIV/Aids epidemic, particularly in southern Africa. We

are concerned about the gravity and implications of the

epidemic for our Group operating companies, Bidvest as a

whole, employees and their families and the communities

within which we serve. Our aim is to reduce the fear

of HIV/Aids and to minimise the social, economic and

developmental consequences of this epidemic on our

company and its people.

Bidvest believes in responding as far as is reasonably

possible to the human needs of the epidemic in a

supportive, positive and non-discriminatory manner, so that

people living with HIV/Aids are able to be open about their

HIV status without fear of stigma or rejection.

Bidvest believes that non-discrimination, as well as

consultation, inclusivity, and encouraging full participation of

all stakeholders, are key principles underpinning its

HIV/Aids responses.

ENVIRONMENTAL POLICY – awaiting board approval

The adoption of responsible environmental business

principles and a pro-active approach to environmental

management are part of sustainable business practices. All

corporations, irrespective of their sector, have an impact on

the environment and thus need to play a pro-active role in

using their spheres of influence to develop economically,

environmentally and socially sustainable operations. Bidvest

recognises its responsibilities in this regard.

Bidvest commits to:

4 Adhere to or exceed environmental regulations relevant to

its operations internationally.

4 Identify, mitigate and manage the environmental impacts

and risks of its products and services.


Bidvest recognises that HIV/Aids carries a social stigma, and

accordingly recognises that those of its employees infected

or affected by the disease are entitled to be treated with the

utmost confidentiality.

Bidvest is committed to the principle of fair employment

practices, and recognises that employees afflicted with life-

threatening diseases or HIV/Aids may continue working in a

normal manner, unless such employee’s condition begins to

impact adversely on their work output, as defined by their

job description, in which case Bidvest will follow accepted

guidelines regarding incapacity.

Bidvest’s HIV/Aids approach comprises the following key

responses to the epidemic:

4 Education and training about HIV/Aids at all levels within

the Group.

4 Prevention of new infections through appropriate

programmes.

4 Elimination of stigma and discrimination.

4 Sensitive care and support of those infected or affected

by HIV.

4 Ensuring fair employment practices.

4 Measurement and analysis of the impact of HIV/Aids

programmes.

It is recognised that these responses should be framed within

an overall principle of sustainability of action and outcomes

in order to ensure that this policy is given substance and

attracts commitment from all stakeholders.

Businesses are encouraged to address the health challenges

posed by HIV/Aids in a co-ordinated way that shares knowledge

and experience. This approach will ensure a maximum effect in

dealing with the epidemic.

Group companies are committed to upholding these

principles and key responses to ensure that our people and

our customers are assured of a responsible and sustainable

employer and business partner operating to internationally

acceptable standards.

4 Optimising consumption of raw materials and energy,

and minimising waste through applying a “reduce, re-use,

recycle” philosophy.

4 Working in partnership with its suppliers, customers

and other relevant business partners, within its sphere

of influence, to redesign and reduce the environmental

impact of products, services and other business activities.

4 Unlocking the creative potential for sustainable solutions

by working with employees to embed an environmental

consciousness throughout the organisation.

4 Including environmental considerations in its business

decisions.

4 Working with its appropriate government departments, civil

society groups and other stakeholders to identify and resolve

environmental issues relevant to the Bidvest businesses.

4 Encouraging Bidvest divisions to set measurable targets

and timelines relevant to their sectors.

Divisions are responsible for staying abreast of environmental

best practices relating to their industry sectors and

developing innovative solutions to environmental issues.

The management of environmental issues is the direct

responsibility of management, supported by their audit and risk

committees. These committees oversee the establishment and

maintenance of relevant management structures and processes

to achieve the objectives of this environmental policy. The

policy objectives are reviewed periodically and, if necessary,

updated. The committees review performance against

objectives, which is reported annually.

Revenue: R’bn80

70

60

50

40

30

20

10

0

92 93 94 95 96 97 98 99 00 01 02 03 04 05 06

Trading profi t: R’m4 000

3 500

3 000

2 500

2 000

1 500

1 000

500

092 93 94 95 96 97 98 99 00 01 02 03 04 05 06

Total assets: R’m302826252420181614121086420

92 93 94 95 96 97 98 99 00 01 02 03 04 05 06

Cash generated by operations: R’m

4 500

4 000

3 500

3 000

2 500

2 000

1 500

1 000

500

0

92 93 94 95 96 97 98 99 00 01 02 03 04 05 06

4 Annual compound growth rate in headline earnings per share in excess of 30% over the past 18 years

4 Market capitalisation as at June 30 2006 was R32,1 billion

4 R1 000 invested at the start of Bidvest, capital and dividend distributions re-invested, would have been worth an

estimated R314 000 in June 2006

4 New investments total R715,5 million in new or upgraded capacity

4 18 years of sustained growth in shareholder value

6,0

15,2

14,6

13,2

17,88,2

3,0

17,0

Divisional contribution to Group trading profit2006 (%)

Corporate Services

Bidfreight

Bidserv

Bidvest Europe

Bidvest Australasia

Bidfood

Bid Industrial and

Commercial Products

Bidpaper Plus

Bid Auto

59,7

23,3

6,6

Wealth distribution2006 (%)

Benefi ts and

remuneration

Taxation

Providers of capital

Retained for growth

10,4

20

5,0

Adding value

Bidvest is one of South Africa’s largest and most diverse industrial groups and employs more than 93 000 people from

communities in the many locations in which the Group businesses operate. Bidvest has produced consistent returns for

shareholders for the last 18 years. Results refl ect the success of operational units in seizing the opportunities presented by

largely favourable economic conditions. All divisions reported sales growth and strong cash generation.

Bidvest achieved revenues of R77,3 billion (2005: R62,8 billion), trading profi t of R3,7 billion (2005: R3,0 billion) and headline

earnings reached R2,4 billion (2005: R2,0 billion). R13,9 billion of wealth was created and R8,3 billion (59,7%) distributed to

employees and R915,5 million (6,6%) to the government. Total exchanges with government including amounts collected on their

behalf amounted to R14,7 billion. Foreign operations contributed 40,8% to Group revenue and 28,2% to trading profi t.

The Group’s fi nancial statements are fully reported in The Bidvest Group Limited Annual report 2006 and are the Group’s fi rst

consolidated fi nancial statements prepared in accordance with IFRS.

6,66,6

13,213,2 Bid Industrial andBid Industrial and

Commercial ProductsCommercial Products

Bidpaper PlusBidpaper Plus

Bid AutoBid Auto6,06,0

13,213,2

17,817,88,28,2

Economic vitality


Other financial information

Value added statement

“Value added” is the value which the Group has added to purchased materials and goods by the process of manufacture and

conversion and the sale of its products and services. This statement shows how the value so added has been distributed.

South African

R’000

Foreign

R’000

2006

Group

R’000

Revenue 45 786 182 31 490 309 77 276 491

Net cost of raw materials, goods and services (37 100 739) (26 380 625) (63 481 364)

Wealth created by trading operations 8 685 443 5 109 684 13 795 127

Finance income 70 905 45 560 116 465

Total wealth created 8 756 348 5 155 244 13 911 592

Distributed as follows

Employees

Benefits and remuneration 4 887 310 3 424 010 8 311 320

Government

Current taxation 658 359 257 179 915 538

Providers of capital 1 295 830 152 368 1 448 198

Finance charges 310 755 121 851 432 606

Distributions to shareholders 985 075 30 517 1 015 592

Retained for growth 1 914 849 1 321 687 3 236 536

Depreciation 496 011 351 808 847 819

Retained income 1 418 838 969 879 2 388 717

8 756 348 5 155 244 13 911 592

Summarised financial information

Trading profit 2 625 461 1 031 539 3 657 000

Profit before taxation 2 457 239 940 722 3 397 961

Operating assets 12 624 633 8 539 011 21 163 644

Operating liabilities 7 297 164 6 410 690 13 707 854

Exchanges with government

including amounts collected on their behalf

2006

R’000

Employee taxes 722 350 842 728 1 565 078

Company taxes 658 359 257 179 915 538

Value added tax and sales tax 3 696 489 288 633 3 985 122

Customs and excise duty 7 639 345 273 818 7 913 163

Other 223 952 87 776 311 728

12 940 495 1 750 134 14 690 629

Payable to

South African authorities 12 902 867

Other 1 787 762

14 690 629

22

Black economic empowerment

Highlights

• “A” empowerment rating reaffirmed, showing improvements all round

• BEE procurement R4 billion (30,2% of discretionary South African spend)

• Total training spend R101,9 million (R83,0 million in South Africa)

• Black employees as a percentage of employees trained in South Africa – 81,2%

• Corporate social investment spend R28,7 million (R25,7 million in South Africa)

• Women employees – 42,4% (women employees in South Africa – 46,6%)

• A number of business units have obtained improved and first-time empowerment ratings

• Increasing acceptance of Bidvest’s BEE credentials in the market

• An electronic database is being developed for supplier empowerment credentials

• Bidvest ranked 13th in the Financial Mail Top 200 Empowerment Companies 2006 survey

Challenges

• In South Africa, the lack of standardised criteria to assess empowerment status results in problematic inconsistencies

• Improving employment equity at senior levels

• Attracting and retaining senior level HDIs

• Skills shortages

• Embracing BEE throughout the South African operations

Performance indicator overviewIndicator 2004 2005 2006

Empowerment rating A A A

Executive management (% blacks on the board) 23,3 22,6 29,2

Employment equity (% of blacks as per skills levels 1,2,3

of EEA report)#24,6 24,7 30,9

Women employees (%) – Group 44,2 41,9 42,4

Women employees (%) – SA 44,2 44,9 46,6

Preferential procurement (R billion)*# 4,2 5,4 4,1

Preferential procurement (% of discretionary spend) 30,0 32,2 30,2

Total training spend (R million) – Group 72,9 85,7 101,9

Total training spend (R million) – SA 58,2 74,6 83,0

Training investment per employee (R) – Group 894 876 1 092

Training investment per employee (R) – SA 853 982 1 064

Black employees as a % of those trained in South Africa 86,7 83,0 81,2

CSI spend (R million) – Group 11,7 17,3 28,7

CSI spend (R million) – SA 10,4 15,9 25,7

* Preferential procurement continues to increase. The decrease in rand value for 2006 is a result of a change in definition between 2005 and 2006.

#KPMG produced an assurance statement on BEE procurement by rand value and employment equity by race, page 94 .


COMMITTED TO SOCIO-ECONOMIC TRANSFORMATION

Bidvest maintains an ambitious and aggressive approach to

promoting BEE and driving socio-economic transformation

throughout the South African businesses. This process has

steadily gained momentum. This achievement is reflected in

Bidvest’s “A” empowerment rating which was reaffirmed, with

improvements noted all round. The changes in the BEE codes of

good practice have resulted in what appears to be lower scores

in some instances, but real progress has been made. The role of

the Group’s empowerment partners in the Dinatla consortium in

helping improve Bidvest’s performance is readily acknowledged

and it is anticipated that Dinatla will continue to assist the Group

as it strives for “AAA” empowerment credentials.

Forging opportunities

Bidvest is an international company firmly rooted in South

Africa. The organisation is one of the largest employers

in the country, where 78 029 of its total 93 325 workforce

live and work. Socio-economic transformation and BEE

are an integral part of creating sustainable businesses

and communities. The Group, by virtue of its size and

diversification across numerous industries, is making a

far-reaching contribution.

The Group has pursued a structured approach to improving

its socio-economic performance. Bidvest has a significant

empowerment shareholding and a transformation strategy

aimed at addressing both the economic and social elements

of empowerment as it relates to sustainability. Focus areas

are: progressing skills development and employment equity

at all levels, facilitating increasing levels of procurement

of goods and services from HDIs and promoting the

development of small, micro- and medium-sized, black-

owned enterprises. The strategy is guided by the Bidvest

Charter and BEE scorecard, which all business units subscribe

to, as systems to measure and monitor BEE performance.

The Bidvest Charter was published in the 2004 sustainability

report which can be downloaded from the Bidvest

website www.bidvest.co.za.

This ongoing drive has been a process of “learning by

doing”. Advancing broad-based BEE developments has

enabled the business units to retain business and gain

new contracts, thereby adding value to shareholders, while

creating opportunities for other key stakeholder groups,

especially employees, suppliers and emerging business

enterprises. The organisation is emerging as a leading

catalyst for positive change across many industries.

EFFECTIVE EMPOWERMENT HOLDINGS

Economic BEE ownership calculated in terms of the BEE

codes of good practice is 41,4%, with a 29,2% effective BEE

control. The Dinatla BEE consortium effectively owns 15,0%,

The Public Investment Corporation 13,4%, and a further

16,6% is controlled by BEE asset managers.

The Dinatla transaction was at the holding company level,

including both the local and offshore operations of Bidvest.

If the Dinatla BEE consortium had bought into the South

African operations only, at the same transaction value, the

total percentage BEE direct and indirect ownership, at the

time of the transaction, would have been in excess of 50%.

KPMG report in the 2005 sustainability report .

Bidvest believes that taking into consideration the scale

of the Group’s operations and the number of sectors in

which it has an impact, both locally and internationally, the

effective 15,0% equity ownership, both in terms of value and

influence, has significantly more reach than would be the

case in many smaller BEE transactions, where percentage

equity ownership may be greater.

In partnership with Dinatla

The Dinatla consortium of BEE partners enables a broad-

based and representative empowerment grouping

to share and influence the future of Bidvest, in South

Africa and abroad. The core shareholders of Dinatla are

WDB Investment Holdings, Bassap Investments and the

Shanduka Group. The consortium comprises entrepreneurs

and black business professionals who collectively represent

a national footprint and maintain networks across diverse

sections of the economy. The partnership increases the

Group’s potential to secure business opportunities and

generate a pool of capital creators with production capacity

who will in turn contribute to the growth of the economy.

The partnership with Dinatla consortium continued to add

value to Bidvest at a strategic level and is mutually beneficial

24


across all of our business units. The partnership is now at

the second phase of the agreement and the refinancing

of the partnership, within the envisaged timeframe, has

been announced. The Group is eager to reinforce this

successful relationship and is focusing on identifying

more opportunities for collaborative efforts on enterprise

development and procurement initiatives that will offer

tangible benefits to Dinatla partners.

STRUCTURES GOVERNING TRANSFORMATION

Bidvest has a transformation committee responsible

for driving socio-economic transformation within the

Group. The committee, which comprises executive and

non-executive board members, provides input on strategic

aspects of the business which positively influence the pace

of transformation. Its members are: MBN Dube (chairman),

the South African divisional chief executives, MJ Finger,

LI Jacobs, B Joffe, SG Mahlalela, TL Slabbert and FDP Tlakula.

The commercial directors’ forum, formally known as the

working committee, meets regularly to review progress and

provides strategic input to the transformation committee.

The forum comprises Bidvest’s commercial directors who

are responsible for driving transformation and business

development across their respective divisions. The

commercial directors excel in their roles, providing strategic

guidance to divisional chief executives.

There is a greater appreciation at executive level that BEE

presents a business opportunity. Promoting diversity is an

opportunity to bring new skills and energy into the Company

that will add value commercially and strengthen the Group’s

position. BEE imperatives are increasingly linked to broader

strategic imperatives, but there remains a need to embrace

BEE more widely across the Group. A principal challenge and

focus area is to engage management at business unit level to

drive this process so that BEE becomes integrated as part of

the culture throughout the organisation.

BEE implementation, monitoring and evaluation

The enterprise-based Bidvest Charter and scorecard

were drafted in consultation with Dinatla and the South

African government in 2003. The scorecard provides a

guide for monitoring the progress of internal business

activities, empowering business units to engage with the

BEE challenges they face. Principal challenges include

direct empowerment (equity ownership and executive

management), human resource development (employment

equity and skills development), indirect empowerment

(preferential procurement and enterprise development) and

CSI. Specific indicators are identified, targets and timeframes

set, and appropriate weightings allocated.

A common format is used by line managers for reporting

on BEE progress. Reports are submitted quarterly for

divisional consolidation and review and further review by the

transformation committee and the board. The raw data is

confirmed annually by third-party assurance providers and

the scores are determined and verified by an independent

empowerment rating agency.

The scorecard system has been fundamental in encouraging

and enabling individual business units to measure and

monitor their socio-economic performance. An increasing

number of businesses are in the process of obtaining an

independent empowerment rating, or have obtained a rating

and are striving to strengthen credentials.

The level of scorecard reporting has improved considerably and

there is a high level of commitment. Bidvest is developing an

electronic reporting tool which will greatly enhance the process

of collating scorecard data and ensure the highest standards.

The Bidvest intranet provides an effective resource for

improving levels of BEE awareness, understanding and

knowledge among employees. Every employee has access

to the site which provides information on BEE news, acts

and regulations, information on BEE developments and case

studies across the Group, and links to BEE related websites.

EMPLOYMENT EQUITY AND SKILLS DEVELOPMENT

The principal business risk at Bidvest relates to employees

and their skills. In order to sustain growth, the recruitment

and development of individuals who add significant value,

are essential. This issue is addressed by investing in skills

development and by building innovative, exciting businesses

that enthusiastic, entrepreneurial people want to join.


A high value is placed on leadership development and

on increasing the representation of blacks and females

across management, technical and professional categories,

recognising this as critical for meeting long-term objectives.

Training requirements are managed on a decentralised basis.

Considerable effort is invested in identifying, attracting

and recruiting talent externally and promoting internal

programmes to develop skills. Divisions budget a minimum

of 1% gross total payroll for skills development programmes.

Training spend in South Africa has increased to R83,0 million

(2005: R74,6 million).

Integrated employment equity and skills development

programmes with targets for black representation at all

levels are rolled out across the divisions and at each business

unit. Succession planning strategies are implemented to

ensure the movement of black candidates into management

positions and retention strategies and mentorship

programmes for black employees are in place.

A new generation of Bidvest managers is emerging as the

majority of businesses make steady progress in meeting

employment equity and skills development targets.

A reliance predominantly on promotions within the business

has enabled some divisions to advance further than others in

increasing affirmative action at junior, middle management

and directorship levels. In spite of efforts to retain talented

staff who benefit from development opportunities,

competition in the market for skills results in loss of staff

which is a setback to achieving targets.

There has been marginal progress with senior and executive

management representation. The board was streamlined

and well-respected non-executives appointed. A number

of divisions appointed HDIs to senior levels, but retention

remains an ongoing challenge in view of the industry-wide

skills shortages.

There is a need for a more structured and focused approach

to developing core skills in order to enhance current efforts

to develop and advance entrepreneurial individuals to

senior levels. In some businesses, skills development is

not sufficiently front-of-mind; in others it could be more

relevant. There needs to be a greater alignment between

skills development, training, mentoring and succession

planning, with equity target objectives and requirements and

overarching sustainability objectives.

INDIRECT EMPOWERMENT

Procurement and regulatory certainty

Business units are committed to pursuing policies that

promote the use of black-owned and empowered enterprises.

Where there is a synergy between supply and demand

for services, the Group channels BEE procurement spend

through the Dinatla consortium and its constituency base.

Bidvest spent 30,2% of total procurement, excluding

monopolistic suppliers and foreign spend, on external BEE

suppliers of goods and services (40,7% including inter-group

purchases). The reported BEE procurement is lower than last

year due to a change in the definition.

26


A prominent challenge for Bidvest and industry-wide in

South Africa, is a lack of clarity in the definition of BEE. There

is consequently variation in the assessment criteria used by

business units and suppliers to determine empowerment

status, resulting in different interpretations. Assessments may

be based on ownership, or on a broader set of indicators.

This inconsistency is problematic and is reflected in the

practices of empowerment rating agencies which use

different scoring methods. Inconsistency in the evaluation

of empowerment status has implications for the scorecard

data.

The draft codes of good practice on broad-based black

economic empowerment (BBBEE) released by the South

African government in 2004 are expected to be finalised

before the end of 2006. The enabling legislation will clarify

the objectives that companies should work towards and

how their progress will be measured, encouraging greater

BEE activity throughout corporate South Africa. In the new

regulatory environment, BEE performance will be assessed

on a broader basis, looking beyond equity ownership at a

number of areas of performance, providing a level playing

field for businesses.

The Group’s transformation strategy will be diligently aligned

with the new regulatory requirements. Discrepancies will be

addressed and the process will enable the Group to develop

a more coherent implementation plan.

Divisions are increasingly implementing initiatives to develop

levels of BEE understanding among suppliers and encourage

suppliers to obtain and strengthen empowerment ratings.

Bidvest is developing an electronic supplier database which

will serve as a consistent point of reference for supplier

empowerment credentials. Business units will use the tool to

South African procurement spend

Suppliers 2003Value of

purchases(R billion)

2003% of

discretionary procurement

2004Value of


2004% of


2005Value of

purchases (R billion)

2005% of


2006Value of


2006% of


BEE suppliers 1,4 16,7 4,2 33,8 5,4 36,6 4,0 29,6

Black woman suppliers

0,0* – 0,0* – 0,0* 0,0* 0,1* 0,7

Non-BEE suppliers 7,0 83,3 8,2 66,2 9,4 63,4 9,5 69,7

Discretionary procurement

8,4 100,0 12,4 100,0 14,8 100,0 13,6 100,0

Inter-group suppliers 1,5 1,6 2,0 2,4

Discretionary and inter-group procurement

9,9 14,0 16,8 16,0

Monopolistic suppliers

11,1 13,1 19,3 22,8

Non-discretionary foreign spend

1,3 4,1 3,8 2,7

Total procurement 22,3 31,2 39,9 41,5

* R96,2 million (2005: R4,0 million; 2004: R4,7 million; 2003: R4,8 million) .

Sales and not revenue are used to determine the total procurement figures.


register suppliers’ details, including BEE status and products,

on the company intranet. It is anticipated that the tool will

considerably enhance opportunities for business units and

suppliers.

Enterprise development and corporate social investment

There has been good progress in identifying, initiating and

co-ordinating enterprise development and CSI opportunities

on a division-wide basis. The commercial directors are

responsible for spearheading this initiative which will have

more impact than the current fragmented approach pursued

by business units. Prominent examples are highlighted in the

divisional performance reviews.

Bidvest’s commitment to promoting enterprise development

involves engaging with financial institutions to negotiate

favourable financing terms for small BEE suppliers, providing

BEE suppliers with favourable credit and payment terms,

and offering mentorship and advice to small BEE suppliers

to ensure effective skills transfer and sustainability. The

advanced Bidvest BEE supplier database will assist suppliers

with marketing their goods and services.

CSI spend in South Africa increased significantly to

R25,7 million (2005: R15,9 million).

28

External opinions

INTRODUCTION

It is essential to obtain objective feedback from external parties on Bidvest’s sustainable development performance, to allow

the Group to deepen its understanding of the topic and improve its management of sustainability. Feedback relating to last

year’s stakeholder opinions and the results of a gap analysis conducted by KPMG are provided.

ADDRESSING STAKEHOLDER FEEDBACK

Last year a range of external Bidvest stakeholders were interviewed to obtain their opinions on the Group’s sustainability

performance and to guide Bidvest’s sustainability report content and actions. Feedback is provided:

Strategic sustainability issues

Issues raised Feedback

Bidvest is predominantly recognised for its leadership in economic performance, ethical standards and BEE achievements. Some respondents felt Bidvest is not recognised as a leader in the broader social and environmental arena and related communication.

Bidvest has begun raising the public profile of the Group and its constituent businesses and recently started communicating its social and environmental performance.

The Group and its businesses continue to receive public recognition – the Group as a member of Dow Jones and the JSE sustainability indexes, an employer-of-choice and for supporting the “Hear For Life Trust”, McCarthy for the “Rally to READ” and 3663 for its environmental work and as an employer-of-choice. Bidvest continues to work on improving its overall financial and non-financial performance and communication.

Bidvest should formalise a sustainability strategy, management framework and corresponding sustainability targets.

The chairman’s and chief executive’s reports state our position. Recently drafted Group HIV/Aids and environmental policies and the KPMG sustainability gap analysis have contributed positively.

Clarity was requested on plans for Brian Joffe’s succession. Succession plans are in place at all levels within the Group to cover both long-term natural succession and short-term forced succession which may arise as a result of unexpected occurrences. A restructured and rejuvenated board, newly appointed divisional chief executives and a new generation of managers are an expression of these succession plans.

Bidvest should ensure that BEE progress is effectively communicated.

Bidvest communicated its Charter two years ago. BEE progress is now being reported in greater detail at divisional level, which includes reporting on empowerment ratings achieved by individual businesses.

Individual businesses regularly communicate their empowerment performance to new and existing clients in a bid to secure new contracts.


Strategic sustainability issues (continued)


HIV/Aids is a significant issue for a large employer like Bidvest. Bidvest should communicate the effectiveness of its HIV/Aids programmes and its HIV/Aids investment.

In 2005 Bidvest reported on the HIV/Aids programmes of divisions and businesses. Bidvest has drafted a Group HIV/Aids policy, has commissioned a Group-wide HIV/Aids actuarial prevalence study and an audit of HIV/Aids programmes in a bid to guide a strategy and improve the effectiveness of its engagements. The Group aims to report quantitative data to reflect progress in managing HIV/Aids.

Bidvest’s sustainability reports


Reports should portray sustainability performance against prior commitments. Where possible, performance should be quantified.

Bidvest continues to improve its data collation and reporting. Once a sustainability strategy and a management framework are in place, Bidvest will be in a better position to make more specific commitments.

Issues important to stakeholders should be discussed. Stakeholder engagements will continue to elicit issues important to a broader set of stakeholders.

A discussion on material issues and how they are being addressed should be included.

Material issues are discussed in divisional reviews.

More sustainability information about Bidvest’s international operations should be provided.

International operations have been included since 2005.

Transformation progress at divisional level and the contribution commercial directors are making to the transformation process should be described.

Transformation progress has been described in more detail at divisional level.

Information on Bidvest’s long-term strategic plans and how the Group intends addressing business challenges should be provided.

This is reported in a variety of manners and forums. Aspects are reported in the annual and sustainability reports. Strategic issues and challenges are reported on in the annual and sustainability reports and are also discussed at regular feedback meetings with shareholders, analysts and interested parties.

Stakeholder engagements


A broader set of stakeholders, specifically employees, communities, government, socially responsible investors, bankers, suppliers and grassroots shareholders within Dinatla should be engaged.

Bidvest will address these issues in future stakeholder engagements. This year Bidvest commissioned KPMG to undertake a sustainability gap analysis. The analysis will further the debate on what sustainability means for Bidvest.

International stakeholders should be included.

Given the scope and diversity of Bidvest’s multi-faceted operations and international scope, Bidvest should focus its engagement process on stakeholders who are directly associated with the Group’s most material issues.

30

External opinions

FINDINGS FROM KPMG GAP ANALYSIS

While no formal stakeholder engagement was conducted this

year, KPMG was asked in addition to their assurance report

to conduct a high-level sustainability gap analysis against

best practices as represented by the GRI’s sustainability

reporting guidelines. Interviews were conducted with Bidvest

executives, independent non-executive board members and

business managers.

The objective of the gap analysis was to analyse the Group

in a cross-sectional manner and identify specific sustainability

improvement opportunities. This process will contribute

towards the development of a strategic sustainability

framework that is compatible with Bidvest’s structure and

decentralised culture.

Key strengths identified:

4 A corporate governance manual which includes a code of

ethics, the Bidvest Charter and a risk management policy

are in place.

4 Emphasis is placed on legislative compliance.

4 Bidvest’s tangible culture is underpinned by philosophies

of excellence, entrepreneurship, decentralisation, financial

success, pride and doing business “the right way”.

4 The Group demonstrates excellent financial performance

and pockets of other sustainability excellence in areas

ranging from HIV/Aids programmes to CSI projects.

4 Exciting alliances with external stakeholders are evolving

and progressing to address joint sustainability or corporate

social responsibility issues – for instance, Voltex is working

with Eskom on its demand-side energy efficiency project.

4 Business sustainability issues are reviewed as part of the

Group-wide risk management process.

Improvement opportunities identified:

4 A dissemination programme emphasising the value

of Bidvest’s corporate governance manual, code of

ethics and the Bidvest Charter should be arranged to

ensure they are better disseminated and understood

and given prominence throughout all levels of the

Group. This is of particular importance given Bidvest’s

decentralised, entrepreneurial culture and expansion into

overseas markets with divergent ethical and behavioural

expectations.

4 The core relevance of sustainable development to

business success should be better understood, be

they opportunities or risks. Specifically, socio-economic

opportunities in Africa, if recognised through a formalised

sustainability strategy, could enable greater buy-in to the

importance of sustainability at operational level. Bidvest

is a large employer and plays a vital role in the lives of

many people. Bidvest is also a significant provider of

logistics and business services in southern Africa. A better

appreciation of Bidvest’s vital function in the socio-

economic well-being of southern Africa would serve to

improve internal support for sustainability.

4 Knowledge-sharing opportunities would allow best

practice and innovations to be exchanged and alliances to

be formed among Group companies.

4 Formal internal and external stakeholder engagements

and a clearer understanding of sustainability risks are

required to allow businesses to become more pro-active

and better incorporate sustainability issues into the risk

management process.

4 Criteria for evaluating potential acquisitions and current

investments should be widened to include a broader

range of non-financial assessments and be aligned with

Group sustainability objectives.

4 While improvements have been made to the sustainability

data management system, more consistent data definitions

and boundaries need to be agreed and implemented.

Bidvest maintains a commitment to instilling a sustainability

ethos throughout the Group. The KPMG findings are

being debated to agree how best to address the identified

sustainability gaps.


“Business sustainability is about finding ongoing improvements in operational efficiencies, ensuring long-term profitability and doing the ‘right thing’.” Brian Joffe, chief executive

32

Corporate Services Products and services

Bid Corporate Services

Provides strategic direction, financial management, marketing, investor relations, corporate communications, corporate finance, investment, property management services and executive training to the Group. The corporate centre adds value by identifying opportunities and implementing Bidvest’s decentralised, entrepreneurial business model.

Bid Property Holdings(Bidprop)

Manages the Group’s property portfolio, provides property management and property development services and gives specialist assistance in areas such as lease scrutiny, lease negotiation and feasibility studies.

Namsov Fishing Enterprise (Namsov)

The premier horse mackerel concessionaire in the Namibian fishing industry, providing a low-cost, high-protein frozen product.

Namibian Sea Products (Namsea)

Has concessions to catch pelagic fish, owning and operating a fleet of pelagic fishing vessels and a fish-processing factory. Products manufactured include canned fish, fishmeal and fish oil.

Ontime Automotive Based in the United Kingdom, provides European-wide logistics solutions for the world’s motor manufacturers. Ontime’s automotive services include parking solutions, breakdown assistance, technical services (new and used car preparation), enclosed transportation, world-wide containerised distribution and open transporter distribution.

Divisional reviews

Corporate Services

Brian JoffeChief executive

Sustainable development at corporate officeSustainable development is about improving operational efficiencies, ensuring long-term profitability and doing the “right thing” in its ever broadening definition. Corporate office guides the overall sustainability process at Bidvest, adding value to the sustainability capabilities at divisional level.

The Group’s corporate office, based in Melrose Arch, Johannesburg, provides strategic direction and services to the Group, houses investments, adding value through identifying opportunities and implementing Bidvest’s decentralised and entrepreneurial business model.


Material sustainable development issues

Business units Material issues Mitigating action

Namsov and Namsea Dependence on natural fish resources, which can be affected by natural disasters and poor resource management.

Quota allocations are used by Namibian authorities to manage fish resources. Recent biomass reductions and adverse size distributions may lead to a reduction in quotas. Fishing in other geographical areas and business diversification are being explored.

Namsov HIV/Aids in the workplace and high health-related absenteeism rates.

Comprehensive HIV/Aids programmes are in place. Absenteeism rates are declining.

Namsov Bulk of fish is sold to volatile African markets. Market diversification is being sought by developing new African markets.

Namsov Exchange rate volatility. All products are sold in US dollars.

Forex contracts are used to reduce exposure.

Sustainable development indicator overview

Indicator 2004 2005 2006

Revenue (R’000) ✦ 1 174 266 1 295 421

Trading profit (R’000) ✦ 92 124 108 698

Employees 1 369 1 635 1 705


Training spend per employee (R) 11 104 10 263 12 070


Lost day rate ✦ ✦ 0


BEE procurement (R’000) 484 143 884 620 620 242

BEE procurement as % of discretionary spend 86,8 87,1 86,7

CSI spend (R’000) 5 642 8 086 12 611

Note: – Indicator notes and definitions are provided in the performance data table.– Where divisional structures changed, figures were restated to allow comparison and have been adjusted to exclude disposed/closed businesses.– 2004 financial figures have not been provided due to restructuring and IFRS.– Employee-related data includes non-permanent employees.– Training spend is skewed as it includes Bidvest Academy spend.– Health and safety indicators have changed.– Empowerment data is for South Africa only. ✦ Information not available.

34

Divisional reviews

Corporate Services

ECONOMICS

Corporate Services revenue increased by 10,3% to R1,3 billion

(2005: R1,2 billion). Trading profit increased by 18,0% to


Bidprop: The property portfolio demonstrated solid growth

and Bidprop achieved a competitive return. A severe scarcity

of industrial sites in the main centres is a growing issue for the

property industry. As a result of increasing power shortages in

South Africa, generators are being installed at many “mission

critical” Bidvest buildings at considerable cost to businesses.

Namsov: Aided by prior capital investments, Namsov

recorded highly creditable results, despite pressure on

operating costs attributable to spiralling fuel prices.

Namsea: Shrinking pelagic fish resources was the principal

reason for financial under-performance. Expansion into other

geographical areas and business diversification are being

explored.

Ontime Automotive: Growth was achieved despite a

challenging trading environment and long-term financial

prospects were enhanced following the closure of the French

car transport subsidiary.


4 Namsov and Namsea: Comply with International Maritime

Organisation (IMO) standards and procedures and the

IMO’s recently launched Safety Management System,

which covers safety and environmental issues. Fishing

licences are subject to full compliance with IMO standards

and Namibian government requirements. Hazard analysis

critical control point (HACCP) compliance is ensured

through regular inspections.

4 Ontime Automotive: ISO 9001 accredited at all sites and

ISO 14001 accredited at two sites. Other sites are being

ISO 14001 accredited. Environmental, quality, health and

safety and human resources policies and procedures are

being standardised across all businesses and this process is

near completion.


Transformation in the South African businesses is driven

from corporate office, working with divisional executives and

commercial directors to develop appropriate transformation

tools and structures.

Bidvest’s intranet includes a BEE forum which provides useful

BEE-related information to staff. A system is being piloted to

use the intranet to capture and report transformation data.

Namsov is considered to be a transformation leader in the

Namibian fishing industry with a Namibian shareholding of

55,5% and a 34,1% HDI shareholding. Namsov and Namsea

make significant investments in training and developing HDIs

and are meeting the government-set Namibianisation targets

for the fishing industry.

WORKFORCE

Corporate office employs 54 people, most of whom work in

Gauteng, and Bidprop four. Namsov employs 561 staff and

Namsea employs 145 staff in Namibia. Ontime Automotive

employs 941 staff in the United Kingdom.

Namsov has improved its previously high health-related

absenteeism rates (an industry problem) by working with

employees to manage their health.

Ontime Automotive: New employee welfare policies and

procedures have led to improved driver-union relationships

and motivation levels.

Health and safety

4 Bid Corporate Services and Bidprop: Staff work in low-risk

office environments.

4 Bidprop: External consultants conduct regular building site

inspections to ensure compliance with the new Building

Act to ensure developers protect the health and safety of

construction workers.

4 Namsov and Namsea: Comply with all Namibian health

and safety and environmental regulations and are regularly

audited. Ships comply with the IMO’s regulations, relevant


leadership (including re-engineering leadership DNA to

generate higher levels of energy and performance), business

strategy, service (customer service, customer orientation and

marketing) and finance.

Two new academies are planned. The top performers

from previous academies are expected to be given the

opportunity to participate in an “advanced” academy and

a sales academy is being developed to help talented young

sales managers enhance their general and industry-specific

sales skills.

The leadership programme is built around a model which

identifies leadership energy as the driver of all system

performance. Leadership energy drives employee energy

which in turn generates customer satisfaction and profitability.

The Bidvest Academy

Continuing to change people’s lives

The Bidvest Academy, now in its fourth year, provides a

platform for developing young executive talent within

the Group. Since March 2003, 368 young managers have

participated in the Academy’s six-month programme, which

provides exposure to Bidvest’s executive management,

Group operating methodologies and divisional business

strategies. The course objective is to not only equip

participants with practical business, team and leadership

skills, but to also enhance employee motivation by

developing inspired leaders. The programme focuses on

leadership behaviour and actions that prompt positive

change in organisational “DNA”. The programme covers

4 Namsov: An HIV/Aids policy and programme are in place.

Crew and land-based staff receive repeated HIV/Aids-

related education and VCT is encouraged. In-house

counselling and company-funded anti-retroviral treatment

(ART) are provided. HIV/Aids remains an ongoing

challenge for Namsov and the industry.

4 Namsea: Awareness training and programmes are in place

and sick employees are provided high-energy foods and

assisted in accessing government VCT and treatment.

ship registries and government regulations. Crew members

receive regular safety and emergency training and regular

health checkups are conducted.

4 Ontime Automotive: Comprehensive health and safety

procedures and structures are in place. Health and safety

training and auditing are outsourced.

HIV/Aids

4 Bid Corporate Services and Bidprop: Staff have received

general HIV/Aids awareness and prevention training.

36

Divisional reviews

Corporate Services

Training

4 Bid Corporate Services and Bidprop: A training committee

reviews and agrees training and education needs in

conjunction with individual staff members.

4 Namsov: Targets have been set to employ a greater

number of Namibians in navigation, engineering and

factory supervisory positions. Namsov is working with

a number of maritime organisations to develop skill-

development programmes and successful mentorship

programmes are in place.

4 Namsea: Sea-going staff receive training as part of a clearly

defined development path. Regular land-based training is

conducted according to individual and company training

needs.

4 Ontime Automotive: Individual training needs are

structured for the benefit of employees and specific

customer requirements. Training programmes support

both personal and professional development along clearly

defined career paths. Performance appraisals are integral

to agreeing training needs.

COMMUNITY

Customers

Namsov and Namsea: Dedicated staff, quality control

mechanisms and independent audits are used to ensure

Namsov and Namsea maintain their reputations for high quality

standards.

Namsov and Namsea are recognised as preferred suppliers

in their markets and customers have open lines to all levels of

Namsov management. Customer relationships are carefully

managed and complaints are dealt with on a case-by-case

basis. Namsov ensures consistent product quality through a

third-party quality assurance process.

Ontime Automotive: Customer complaints are logged and

addressed and surveys conducted in accordance with ISO 9001

requirements.


Corporate Services supports a wide range of worthy

causes through the Bidvest Chairman’s Trust Fund and the

Bidvest Dinatla Trust. The Chairman’s Trust Fund disperses

approximately R5,5 million per year to worthy causes, including

support for the aged, orphanages, Soweto street children, the

handicapped, animal welfare, the homeless, various hospitals

and sports development and is one of the principal funders of

the Hear For Life Trust.

The Bidvest Dinatla Trust is in its second year of disbursing

approximately R3 million over three years to provide school

education bursaries for children and dependants of Bidvest

staff earning less than R5 000 a month. Since 2004, 191 students

have been awarded bursaries and a further R10 million has

been allocated to this initiative.

Bidvest contributes R2 million annually to the Business Trust.

Namsov CSI projects are sponsored through dividends

received by The Namsov Community Trust, which is a 10%

shareholder in the company. Since its inception in 1994, the

trust has contributed in excess of N$17 million to a variety of

upliftment and empowerment projects, focusing on education

and community development, in all regions of Namibia.

Ontime Automotive supports a number of local school and

sport initiatives.

ENVIRONMENTAL

4 Bidprop: New buildings are fitted with low-energy light

fittings and bulbs. Existing buildings are retrofitted with

low-energy lights where economically viable. Preference is

given to using local sanitary ware and building materials.

4 Namsov and Namsea: Comply fully with the fishing and

environmental regulations of the Namibian Ministry of

Fisheries and the IMO’s pollution prevention standards.

Vessels carry independent fisheries’ observers who ensure

compliance with fishing and pollution regulations.


Ensuring sustainable fish resources

Fish resources are vital to Namibia’s fishing industry and

Namsov and Namsea support the government’s policy of

responsible fishing. In 1993, following independence, the

Namibian Ministry of Fisheries collaborated with industry

to develop and launch a fish resource management

system which has been acclaimed internationally. Regular

scientific surveys are conducted to assess the health of

fish stocks and make recommendations to the ministry on

the use of resources. Total allowable catch quantities and

individual quotas are adjusted and set in consultation with

the industry, which is represented by the Marine Advisory

Council. While this has at times been tough on industry,

the system has proved effective and is supported by the

key players. It is believed that recent shortages of pelagic

fish and variations in fish size are due to environmental

changes, not overfishing.

4 Ontime Automotive: Principal impacts are vehicle-related

noise, exhausts, wastes and spillages. Risks are managed as

part of ISO 14001. An environmental policy is underpinned

by comprehensive management and emergency

procedures ensuring acceptable standards in the areas

of emissions to air, releases to water, waste management,

contamination of land, use of materials and resources

and local environment and community issues. Ongoing

measurements and assessments are used to reprioritise

mitigation activities. Communities are engaged to address

specific concerns.

38

Bidfreight Products and services

BIDFREIGHT TERMINALSBulk ConnectionsIsland View StorageBidfreight Port OperationsRennies Distribution ServicesSACD Freight South African Bulk TerminalsNaval

Operates a wide range of specialist materials handling operations from strategically located facilities in and around the port peripheries, supported by various inland locations throughout southern Africa.

INTERNATIONAL CLEARING AND FORWARDINGSafcor Panalpina Offers specialist international freight management services. The relationship with

Panalpina allows the offering of 400 offices in 74 countries.

MARINE SERVICESRennies Ships AgencyMarine InsuranceFreightbulk

Provides a complete range of commercial, port agency and surveying services at all South African ports to container carriers, non-liner ship owners, charterers and cargo owners.

MANICA AFRICAOffers a full range of freight and marine-related services in southern Africa, having the network and facilities to meet all the logistics requirements of regional agricultural and mineral cargo flows.

Divisional reviews

Bidfreight

Anthony Dawe Chief executive

Sustainable development at BidfreightWhile continued economic growth for shareholders is a key driver, Bidfreight continues to drive transformation across business units to reflect the country’s demographics and to ensure employees are motivated and their skills developed. Attention will focus on improving safety standards to world-class levels, developing skills, ongoing environmental improvements and meaningful CSI projects.

Bidfreight is Africa’s leading private sector freight management company with a presence in every major port in southern Africa. Port operations are reinforced by strong distribution and airfreight capabilities. Bidfreight focuses on terminal operations and logistics in southern Africa, international clearing and freight forwarding and marine services.




Southern African Bidfreight business units

Increasing impact of HIV/Aids among the workforce.

Businesses provide HIV/Aids education, awareness training, VCT and treatment or support in accessing treatment.

South African Bidfreight business units

Skills shortages. Staff training, internal promotions and learnerships are used as mitigation strategies.

Most Terminal business units and Manica

Potentially hazardous working environments due to heavy machinery, lifting equipment, overhead cargo and handling of hazardous chemicals and minerals.

Extensive health and safety systems and training programmes, reviewed and audited regularly, are used to minimise risk.

Various Bidfreight business units

Significant water, cleaning agents, coal and fuel consumption.

Ongoing infrastructure upgrades are expected to reduce consumptions per volume of goods traded.


Indicator 2004 2005 2006

Revenue (R’000) ✦ 13 268 320 15 601 922

Trading profit (R’000) ✦ 455 860 536 917

Employees 4 313 5 427 5 334



% of employees attending HIV/Aids training ✦ ✦ 17






CSI spend (R’000) 668 2 134 1 777

Note: – Indicator notes and definitions are provided in the performance data table.

– Where divisional structures changed, figures were restated to allow comparison and have been adjusted to exclude disposed/closed businesses.– 2004 financial figures have not been provided due to restructuring and IFRS.– Employee-related data includes non-permanent employees.– Health and safety indicators have changed.– Empowerment data is for South Africa only. ✦ Information not available.

40

CHIEF EXECUTIVE’S COMMENT

There has been a focus on investing in health, safety and

environment-enhancing infrastructural improvements, greater

interaction with the community and a drive for improved

customer satisfaction.

Good corporate governance is an ongoing priority. Business

risk committees, as part of the Group’s risk management

process, continue to be set up and all Bidfreight businesses are

expected to have a risk committee by early 2007.

South Africa’s growth is unlikely to slow down before 2010.

Consequently, resources within Bidfreight are being strained.

A challenge is to ensure the availability of skills to meet increased

sales volumes. There is ongoing investment in improving

Bidfreight’s environmental and health and safety performance.

Highlights include:

4 Safcor Panalpina and Rennies Ships Agency achieved an

“AA” empowerment rating and South African Bulk Terminals

an “A” rating.

4 Rennies Ships Agency appointed Bidfreight’s first black

managing director.

4 Bulk Connections and Island View Storage have fast-tracked

environmental improvement projects.

4 All Bidfreight business units have increased staff training and

efforts to fight HIV/Aids.

It is with deep regret that we report five employee fatalities.

These are unrelated and occurred in different businesses to last

year’s fatalities. Full investigations and improvements to health

and safety systems have been or are being undertaken.

Sustainable development is an ongoing journey of learning and

improvement. Bidfreight is focusing on improving safety standards

to world-class, developing skills, identifying environmental

improvements and supporting meaningful CSI projects.

ECONOMICS

Revenue showed satisfactory growth of 17,6% to R15,6 billion

(2005: R13,3 billion) while trading profit increased 17,8% to

R536,9 million (2005: R455,9 million). These figures are in line

with challenging targets and reflect robust efforts to optimise

the opportunity presented by continued growth in global trade

and a largely buoyant national economy.


4 Bulk Connections: A quality- and environmental-manager has

been recruited to implement and manage the attainment of

ISO 9001 and ISO 14001 certification.

4 Island View Storage: Sites are ISO 9001 and, other than

Durban, ISO 14001 certified. Durban, following extensive

facility upgrades, will be ISO 14001 certified in 2007. Sites are

OHS Act compliant and certified by independent verification

parties. Durban and Cape Town are NOSA rated and

Richard’s Bay has received its 9th consecutive Noscar rating.

IVS is a signatory to Responsible Care, the global chemical

industry’s voluntary initiative for continuous improvement in

health, safety and environmental performance. An externally

audited register of all applicable legislation is maintained.

Suppliers are audited for compliance with health and safety,

environmental and quality standards.

4 Bidfreight Port Operations: Five out of ten sites are ISO 9001

certified. The majority of sites are NOSA certified. The

Saldanha site is obtaining ISO 14001 certification.

4 Rennies Distribution Services: Several sites are NOSA rated.

The transportation business is SQAS (Safety and Quality

Audit Systems) certified. RDS is a Responsible Care signatory

and is ISO 9001 certified. Regular third-party audits are

undertaken.

4 SACD Freight: Health and safety systems are in place. Some

operations are NOSA rated. Inspections and independent

safety audits are conducted.

Divisional reviews

Bidfreight



Excellent transformation progress was achieved, reflected

in the improved empowerment ratings of several Bidfreight

business units. The business managing directors, supported by

key staff members, are responsible for ensuring performance

in line with the Group’s transformation goals and strategies,

and submit quarterly progress reports. Regretfully, Bidfreight’s

commercial director responsible for business development

and transformation employed at the end of 2003, elected to

leave to pursue other business opportunities – an indication of

the difficulty in retaining senior level HDIs. A new commercial

director is being recruited.

Empowerment ratings

Company Rating (2005) Rating (2006)

Bulk Connections BB AA

Island View Storage BB Being re-rated

Bidfreight Port Operations BBB Being re-rated

Rennies Distribution

Services B Being re-rated

SACD Freight BBB Being re-rated

South African Bulk

Terminals B A

Safcor Panalpina BBB AA

Rennies Ships Agency C AA

Marine Insurance ✦ Being rated

Freightbulk ✦ AA

WORKFORCE

Bidfreight’s staff complement shrunk marginally to

5 334 employees, of which 4 230 are employed in South Africa.

Most of the South African employees are based in Durban,

Johannesburg, Cape Town and Richards Bay.

Some businesses conduct employee satisfaction surveys

and some have feedback mechanisms in place for gathering

employee suggestions and opinions.

4 South African Bulk Terminals: Health and safety standards

consistent with the NOSA programme are in place. SHE

managers report to a newly appointed SHEQ manager.

A recently launched communications programme helps to

increase levels of health, safety, environmental and quality

awareness.

4 Naval: Health, safety and environment programmes, which

are audited regularly, have been implemented to meet

customer requirements.

4 Safcor Panalpina: ISO 9001 accredited. A national

occupational health and safety standard, which will include

both internal and third-party audits, has been implemented.

4 Marine Services: ISO 9001 certification is in place for the

Richard’s Bay, Saldanha and Durban sites.

4 Manica Africa: South African sites and the Botswana business

are NOSA rated. In Malawi, HACCP is in place and is

externally audited.

Bidfreight appoints its first black managing director

James Reddy was appointed

managing director – Rennies

Ships Agency with effect

from April 2006. James, who

was the director of the Liner

division for the preceding

three years, has been with

the freight business for 36

years and has worked in

a broad cross-section of

functions.

Six black financial directors appointed – an update

The six black financial directors appointed across

different businesses in 2005 have settled into their roles

and are progressing well. Four of the six have been

appointed to the Bidfreight board.

42

Divisional reviews

Bidfreight

Health and safety

Health and safety issues are dealt with at business unit or

company level and working environments vary. Business units

ensure compliance with the OHS Act. Companies, where health

and safety issues are material due to the nature of the work or

the number of people employed, are highlighted.

4 Bulk Connections: Employees work in a generally hazardous

environment, due to heavy machinery, lifting equipment

and potentially harmful cargo. Employees receive induction

and refresher health and safety training. Two safety

representatives are present on each shift. Daily safety

meetings are held.

4 Island View Storage: Many staff members work with

hazardous materials and employees and contract staff are

equipped with relevant safety, health and environmental

skills. A compliance department ensures necessary standards

are maintained. Richards Bay, employing 61 people, recently

achieved an impressive one million disabling injury-free

hours. Employee health is monitored regularly and a wellness

programme is under review.

4 Bidfreight Port Operations: Employees work in a

hazardous environment. Staff receive general safety, health

and environmental training from accredited external

organisations as well as internal job-specific training.

Each site has a SHE co-ordinator and certified SHE

representatives. Despite these health and safety systems,

three unrelated fatalities took place. One fatality was a

consequence of a third-party’s faulty equipment; legal

action has been taken on behalf of the deceased. The

other two fatalities were as a result of hazards which had

not been highlighted in prior risk assessments. Equipment

and procedures have been modified and risk assessments

updated. An external safety management firm was

contracted to conduct a comprehensive safety management

evaluation, with emphasis on behaviour- and attitude-related

issues.

4 Rennies Distribution Services: Safety, health, environment,

risk and quality are managed as part of an enterprise-wide

risk portfolio. One fatality took place when a driver assisted

in the loading operations at a client’s premises and an

unlicensed forklift operator knocked a cupboard onto the

deceased. A full investigation was conducted and all drivers

have again been instructed not to involve themselves in

client operations.

4 South African Container Depots: Safety officers are

appointed at each branch, monthly safety meetings are held

and safety staff receive ongoing training in accordance with

the OHS Act. Employees exposed to hazardous materials are

medically examined. Operating equipment is load-tested

regularly.

4 South African Bulk Terminals: Both terminals have full-time

safety managers and all NOSA-related safety procedures,

including health and safety training, are followed. Specific

dust explosion precautions are in place. Employee health is

monitored regularly.

4 Naval: Health, safety and environmental policies and

procedures are in place to comply with customer

requirements and minimise unsafe practices.

4 Marine Services: Compliance with the port authorities’ health

and safety requirements is ensured.

4 Manica Africa: Operates in six southern African countries,

where health and safety laws differ considerably. Where

Getting serious about HIV/Aids

Following the approval of IVS’s HIV/Aids policy last year, a

comprehensive support programme has been launched at

the Durban site. This includes awareness and educational

initiatives, such as pamphlets, notices, newsletters,

distribution of condoms, training, and HIV/Aids awareness

communication via line management, peer-education and

nursing staff. Anonymous VCT and treatment are provided

via the company’s on-site clinic, which is staffed by a full-time

nurse and a stand-by doctor. The nurse conducts regular

site visits to help generate awareness and provide general

wellness training. To date four staff members have come

forward for VCT and one staff member is already receiving

ART. The programme will be rolled out to other IVS sites and

will form part of the formal wellness programme.


distributed to employees at Bidfreight business units. Despite

good progress, HIV/Aids remains a challenge and requires

ongoing business commitment.

Training

Seven young executives from Bidfreight, identified as potential

future leaders, attended the Bidvest Academy.

4 Bulk Connections: Multi-skilling is encouraged in the

operational division as this increases staff utilisation, job

satisfaction and salaries. Driving and freight-handling and

logistics learnerships are currently being run for 17 learners.

4 Island View Storage: A dedicated training department provides

job-specific training, which includes instruction on working with

hazardous materials. A skills development plan is in place and

training needs are reassessed on an ongoing basis. Financial

assistance is provided for job-related external education.

4 Bidfreight Port Operations: Staff receive regular job-specific

training and additional training is provided based on

six-monthly assessments. A freight-handling learnership

programme is offered to unemployed people. An annual

training-needs analysis forms the basis for a workplace

skills development plan, which is monitored by the industry

training authority, TETA.

4 Rennies Distribution Services: Conducts annual

training-needs assessments for employees. Employees

attend appropriately identified training modules.

Twelve-month learnership programmes for unemployed

people and ABET programmes for staff, are offered. A

training academy has been established.

4 SACD Freight: Departments provide in-house safety and

technical training, which includes refresher training and

certification where necessary. Regular customer awareness

and customer service training is provided. Each financial

year about 30 “Young Turks” participate in a leadership

course for promising management candidates. A

training-needs analysis is conducted regularly.

4 South African Bulk Terminals: Training modules, which are

provided by external training organisations, are adapted

to suit changing training requirements and are based

on an annual training-needs assessment. Six-monthly

performance appraisals are conducted across the board.

possible, Manica applies South African OHS Act norms,

which are of the highest standard. Premises employ

dedicated safety officers to ensure compliance. A motorbike

delivery driver was fatally injured in a road accident. The

accident is being investigated.

HIV/Aids

Progress has been made in the management of HIV/Aids in

the workplace, yet HIV/Aids continues to contribute to staff

absenteeism, productivity and turnover problems. Educational

awareness and, where available, treatment programmes have

been improved and expanded in all Bidfreight businesses. The

programmes, which are typically agreed with shop stewards

and/or unions, include educational activities, awareness

campaigns, peer-group education and counselling, condom

distribution and voluntary counselling and testing (VCT). In

a number of business units anti-retroviral treatment (ART) is

provided through in-house clinics or support is provided in

accessing government-funded treatment. HIV/Aids programmes

increasingly form part of comprehensive basic healthcare

and wellness programmes. More than 68 000 condoms were

Getting serious about HIV/Aids

Following the approval of IVS’s HIV/Aids policy last year, a

comprehensive support programme has been launched at

the Durban site. This includes awareness and educational

initiatives, such as pamphlets, notices, newsletters,

distribution of condoms, training, and HIV/Aids awareness

communication via line management, peer-education and

nursing staff. Anonymous VCT and treatment are provided

via the company’s on-site clinic, which is staffed by a full-time

nurse and a stand-by doctor. The nurse conducts regular

site visits to help generate awareness and provide general

wellness training. To date four staff members have come

forward for VCT and one staff member is already receiving

ART. The programme will be rolled out to other IVS sites and

will form part of the formal wellness programme.

44

Divisional reviews

Bidfreight

4 Naval: Training programmes are identified to suit skills

development needs. The performance appraisal system is

being reviewed.

4 Safcor Panalpina: An individual development programme,

based on a continual learning philosophy, allows employees

to participate in structuring their own training needs.

4 Marine Services: A number of structured training

programmes are in place. Annual performance appraisals

are conducted.

4 Manica Africa: Staff training is conducted on an

as-needs basis. Larger Manica business units use structured

performance appraisal systems for permanent staff.

COMMUNITY

Customers

Most Bidfreight business units have a small number of customers

and generally do not conduct formal customer satisfaction

surveys, but are kept up-to-date on satisfaction levels through

ongoing contact with customers and initiate corrective action as

required. In many cases, managing directors, through personal

interaction, obtain direct customer feedback.

4 Island View Storage: Customer issues are logged in a

ISO 9001-compliant non-conformance system which

identifies root cause, corrective and preventative actions.

4 SACD Freight: Issues and complaints are gathered by

customer-servicing staff and via the company website

forum, which are then investigated and action taken. Branch

marketing departments meet annually with customers to

obtain feedback. Reports and action plans are provided to

management.

4 Safcor Panalpina: External (and internal) questionnaire-based

customer satisfaction surveys are conducted six-monthly.

Results are used to improve service delivery.

4 Marine Services: Port Operations uses customer

questionnaires to enhance service levels.


Bidfreight business units provide financial support to numerous

worthy projects within their communities of operation.

There is limited direct involvement from employees in these

projects. While there is no overarching CSI strategy in place

for Bidfreight, CSI projects tend to be health, education or

infrastructure focused. Investments are usually made through

existing projects to ensure funds are used effectively.

4 Bulk Connections: Funds are provided to orphans at Mayville

Secondary School to assist with their feeding, educational,

clothing, medical and administrative needs.

4 Island View Storage: Supports the Community Chest and

CROW, a wildlife rehabilitation project.

4 Bidvest Port Operations: Bursaries are offered to children

of disadvantaged employees. Employees participated in a

Habitat for Humanity house-building project.

4 Rennies Distribution Services: Provides bursaries for children

of HDI employees. Wheelchairs for the underprivileged in

the Western Cape are sponsored.

4 SACD Freight: Supports the repair and maintenance of a

cottage at William Clark’s children’s home. Containers are

sporadically donated to needy communities as infrastructure.

Ad hoc donations are made to needy schools. Tertiary

education grants are given to children of HDI employees.

4 South African Bulk Terminals: Projects include supporting

homes for abused children and Aids orphans, sponsoring

sports teams and distributing blankets.

4 Naval: Bursaries are offered to children of employees.

4 Safcor Panalpina: Provides financial assistance to under-

privileged schools for scholarships and infrastructural needs.

4 Marine Services: Provides financial assistance to Tisand

Technical (Maritime) School. Old computers are given to

needy schools in disadvantaged areas.

4 Manica Africa: Contributions to charitable activities are made

in Malawi and Zimbabwe.

ENVIRONMENTAL

Ongoing infrastructural investment, specifically at Bulk

Connections and Island View Storage, is reducing the

environmental impacts of these business units.

4 Bulk Connections: Customised handling procedures are

developed with expert consultants for environmentally

sensitive products, such as manganese ore and cement clinker.


4 Naval: Compliance with Maputo Port Development

Company’s standards is ensured.

4 Safcor Panalpina and Marine Services: Low-impact, office-

based businesses.

4 Manica Africa: Stores and handles minerals and agricultural

products, including cobalt and copper concentrates.

Appropriate handling guidelines are in place. Occasional

third-party environmental audits are conducted.

Bulk Connection – managing runoff and dust

Significant capital investment has been made to modernise

the facilities and address contaminated water runoff and

dust problems. More than 30 000 square metres of quayside

have been paved. This allows dust-laden runoff to be

channelled into settling ponds where the contaminant is

extracted and returned to stockpiles. The recycled water is

used in upgraded dust-suppressing systems to wet roads

and stockpiles. Water requirements for spraying have

consequently decreased significantly. Further improvements,

subject to lease negotiations with the ports authorities, will

include additional quayside paving, spraying systems and

covered storage facilities.

4 Island View Storage: IVS stores a variety of materials,

including hazardous chemicals. IVS ensures compliance

with all appropriate regulatory environmental, quality and

customer codes, and is regularly audited by government

departments, rating agencies, major customers and insurance

underwriters. Ground water and air quality are monitored

regularly and results are shared with local authorities and

work groups. IVS is continually investigating new technologies

to reduce emissions. IVS interacts directly with community

members and organisations that have concerns about

emissions. IVS participated in setting up and funding an

ongoing air quality testing system. IVS is on track with its

ten-year infrastructure improvement plan, which was initiated

in 2000. Waste reduction efforts are in place and about 50% of

waste generated is reclaimed. The remainder is disposed of

in compliance with the Environment Conservation Act.

4 Bidfreight Port Operations: Limited amounts of waste timber,

paper, steel and oil are generated, which are mostly recycled.

Disposal certification is obtained where appropriate. In

Saldanha, where lead and copper concentrates are handled,

contamination prevention systems, such as special offloading

procedures, wash bays, sump filters and industrial vacuum

cleaning, are in place. Captured concentrate is returned to

the mines. A recent externally conducted environmental

assessment identified only minor areas for improvement.

4 Rennies Distribution Services: All substances, hazardous

or not, are handled and stored in keeping with legislative,

NOSA, SQAS and Responsible Care requirements.

Environmental impact assessments are carried out by

authorised inspection authorities.

4 SACD Freight: Receipt of hazardous substances is conducted

under strict supervision of qualified staff or contractors.

Hazardous waste is disposed of by recognised third parties;

disposal certificates are received. Regular site and water

audits are conducted by municipalities to ensure compliance.

The use of biodegradable substances is pursued.

4 South African Bulk Terminals: Products handled are

biodegradable, yet dust can be a problem. Dust suppression

systems are in place and a third-party monitors dust emission

levels. Appropriate runoff and containment precautions are

taken.

46

Bidserv Products and services

CLEANING SERVICESPrestige Group, TMS Group Outsourced contract cleaning and other property-related services to various industries.

LAUNDRY SERVICESBoston Launderers, First Garment Rental, Montana Laundries

Takes care of all laundry needs of corporate clients, from uniforms to bedroom and table linen.

STEINER GROUPSteiner Hygiene, Puréau Fresh Water Company, Execuflora, Rochester Midlands Industries, Steiner Environmental Solutions

Everything hygiene-related away from home. Washroom dispensers and consumables, deep cleaning and pest control, chemical manufacture, indoor plants and purified drinking water.

BIDSERV INDUSTRIAL PRODUCTSG. Fox & Company, Commercial Sundries, Clockwork Clothing, Giant Clothing

Manufacturers and distributors of a complete range of industrial supplies including workwear, safety equipment, wiping cloths, cleaning chemicals and paper products.

GREEN SERVICESTop Turf Group The provision of contracting, maintenance and irrigation landscaping services to the

commercial, resort, industrial, sports turf and golf course markets.

AVIATION SERVICESBidair Services, Airport Handling Services, Express Air Services, Aviation Security International

Provides the support services required by commercial aviation, including aircraft cabin cleaning, fixed base operator services, aviation security and cargo management.

BIDRISK SOLUTIONSMagnum Shield, Vericon Outsourcing, ProRisk Solutions

Uses analytical methodologies to offer risk identification and management solutions to businesses.

Divisional reviews

Bidserv

Lindsay Ralphs Chief executive

Sustainable development at BidservBidserv businesses tend to operate in competitive service sectors, characterised by low profit margins and low barriers to entry. Employees stand at the centre of this sustainability challenge. Well-trained, healthy, motivated employees allow businesses to maintain competitiveness by offering high levels of service quality, thus ensuring customer satisfaction and retention. Developing and nurturing employees is paramount for Bidserv businesses.

Bidserv provides South Africa‘s most extensive range of corporate outsourced services. Its brands operate across commerce and industry. Activities include cleaning and specialised industrial cleaning operations, hygiene, laundry and janitorial services, corporate travel and travel-related banking, aviation services and airport handling, office automation, interior and exterior landscaping and electronic procurement.


Bidserv Products and services

INTERNATIONAL PAYMENT SYSTEMS

Offers sophisticated and reliable payment services to organisations with high levels of financial transactions.

BUSINESS SOLUTIONS AND GROUP PROCUREMENTmymarket.com Deploys world-leading technologies to offer business-to-business online and

conventional procurement solutions.

OFFICE AUTOMATIONMinolta South Africa, Océ Importers and distributors of printers, fax machines and multi-functional office devices.

BIDTRAVEL SERVICESCarlson Wagonlit Travel, Connex Travel, Ebony Travel, Harvey World Travel (SA), Incentag New Directions, Premier Club Airport Lounges, Prestige Travel, Rennies Travel, Rennies Travel Namibia, Rennies Travel and Foreign Exchange Malawi, Rennies Travel Zimbabwe, Travel Connections, Travelwise Botswana, World Travel

Provides travel management services to corporate and leisure clients through its extensive local, regional and international networks.

BANKING SERVICESRennies Bank Rennies Bank offers a broad range of banking-related services to corporate clients.

These services include trade and other related foreign exchange transactions.

FOREIGN EXCHANGE SERVICESMaster Currency, Bureau de Change

Rennies Foreign Exchange, a division of Rennies Bank, is recognised as southern Africa’s foremost provider of specialised foreign exchange services, operating through 68 strategically located Bureaux de Change throughout the sub-continent.



Most business units Management of HIV/Aids in the workplace. Most Bidserv companies have awareness programmes in place and are expanding these.

Most business units Many businesses are large employers of unskilled and semi-skilled staff and are exposed to the effects of strike action.

Businesses ensure good employee relationships and offer market-related remuneration packages and, in some cases, assist the Department of Labour to enforce minimum wage standards elsewhere in the industry.

Cleaning Services, Laundry Services, Steiner Group, Bidserv Industrial Products, Green Services, Aviation Services

Safe-use and storage of potentially hazardous cleaning and horticultural chemicals.

Chemicals are obtained from reputable, certified suppliers and, where applicable, products are purchased according to industry-specific guidelines and requirements. Staff working with chemicals receive relevant product, health and safety training.

Laundries, TMS Group Significant water, coal and electricity consumption.

Ongoing capital investments ensure modern equipment and procedures minimise consumption.

Aviation Services Aviation Services’ licence to operate is subject to meeting Airports Company South Africa (ACSA) and airline service expectations.

Aviation Services ensures good airline and ACSA relationships by providing high levels of service quality.

Banking Services and Foreign Exchange Services

Safety of Bureau de change staff and safeguarding Rennies Bank assets.

Secure facilities, security staff and state-of-the-art security measures are used to protect staff and assets.

48


With 54 646 employees, Bidserv is the largest Bidvest

employer. The majority of employees are unskilled and semi-

skilled. A number of businesses have been relocated to the

Bidserv division, thereby expanding the portfolio of services

offered to corporate clients.

The security industry strikes had a negative effect on

Magnum Shield and its employees, many of whom suffered

intimidation, injury and property devastation. To support

employees who lost property, the company initiated a

collection drive to provide basic essentials such as blankets,

clothing and food. Tragically four security guards lost their

lives while travelling to work as a result of strike-related

intimidation. These guards had provident funds which

ensured death benefits for their next-of-kin. The strike

resulted in the loss of a number of business contracts, which

necessitated about 200 retrenchments.

Regretfully, the Prestige Group is now being affected by

wage-related cleaning industry strikes which started on

August 1 2006. About 20% of employees, who are members

of the 16 participating unions, are participating in the strikes.

A recent court interdict was obtained to help control violence

and intimidation.

It is a considerable disappointment and regret that three

fatalities occurred at work. A Magnum Shield security guard

was shot during an armed robbery and, in a surprising incident,

an Express Air Services manager was shot by an employee who

then committed suicide immediately following a disciplinary

hearing. Full investigations have or are being undertaken.

Businesses provide training, provide trauma councelling and

install appropriate equipment to minimise the risk of injury and

fatalities.

The most significant challenge going forward is the

implementation of comprehensive and effective HIV/Aids

programmes across all businesses. Several businesses are

reporting increases in what are thought to be Aids-related

deaths and absenteeism.

An ongoing challenge remains the development of HDIs to

middle-management level.

Divisional reviews

Bidserv


Indicator 2004 2005 2006

Revenue (R’000) ✦ 4 172 336 4 587 817Trading profit (R’000) ✦ 466 865 554 709Employees 45 439 54 113 54 646Total training spend (R’000) 16 048 30 311 26 346Training spend per employee (R) 353 560 482% of employees attending HIV/Aids training ✦ ✦ 11Injury rate ✦ ✦ 1,64Lost-day rate ✦ ✦ 59,5Work-related fatalities ✦ 3 3BEE procurement (R’000)* 2 269 571 2 265 931 366 275BEE procurement as % of discretionary spend 50,2 48,7 19,4CSI spend (R’000) 1 010 1 709 5 529

Note: – Indicator notes and definitions are provided in the performance data table.– Where divisional structures changed, figures were restated to allow comparison and have been adjusted to exclude disposed/closed businesses.– 2004 financial figures have not been provided due to restructuring and IFRS.– Employee-related data includes non-permanent employees.– Health and safety indicators have changed.– Empowerment data is for South Africa only. ✦ Information not available. * Preferential procurement continues to increase. The decrease in rand value for 2006 is a result in change in definition between 2005 and 2006.


For the upcoming year the emphasis will continue on

HIV/Aids, training and skills development and upgrading

technology and equipment used in service delivery.

A number of businesses have, or are developing,

environmental policies.

ECONOMICS

Bidserv’s structure has been widened to include office

automation, procurement services and the banking operations

and travel brands of what was previously Rennies Financial

Services. No other provider of outsourced business-to-business

services offers as extensive a range. Revenue increased by

10,0% to R4,6 billion (2005: R4,2 billion) while trading profit rose

18,8% to R554,7 million (2005: R466,9 million). These results

were largely driven by organic growth.


4 Prestige Group: ISO 9001 accredited. Chemicals are

only purchased from South African Bureau of Standards

and Chemical Allied and Industries Association (CAIA)

registered suppliers and must be accompanied by a

Material Safety Data Sheet providing product handling

and safety information.

4 TMS Group: ISO 9000 and NOSA accredited.

4 Laundry Services: Working towards compliance with

SABS 0146 quality, processing and safety guidelines for the

laundry industry.

4 Steiner Group: Steiner Hygiene is ISO 9001 accredited.

4 Green Services: A sustainability policy, covering economic,

social and environmental issues has been developed.

4 Aviation Services: Complies with ACSA’s Airside Quality

Management System, which specifies operational, health,

safety and security standards.

4 Magnum Shield: ISO 9001 accredited and complies

with the Security Industry Regulatory Authority (SIRA)

guidelines, which regulate and inspect operational

environment, wages, staff registration, work hours and

training.

4 BidTravel Services: Member of the Association of Southern

African Travel Agents and is bound by its code of conduct.

4 Banking Services and Foreign Exchange Services: Rennies

Bank adheres to the Banks-Act and reports regularly to the

South African Reserve Bank’s Bank Supervision Department.


Bidserv businesses have shown significant progress across

most transformation indicators. Improved performance is

reflected in the upgrading of a number of empowerment

ratings. The commercial director, Lionel Jacobs, will focus on

assisting a number of businesses that have not performed

so well, specifically in the areas of executive management

representation and skills development.

Most business units continue to establish black-owned

enterprises and TMS, for example, is assisting employees to

set up businesses to manage the company’s stock systems

and quality management system. Minolta South Africa has

helped establish four BEE dealers and continues to nurture

these businesses.

BidTravel Services is a signatory to the tourism industry charter,

Banking Services and Foreign Exchange Services to the

financial services charter. Aviation Services will be a signatory

to the aviation industry charter on completion.

TMS Group develops skills to build own trucks

Following a feasibility study, a decision was made against

importing vacuum trucks and to rather invest in the skills

and facilities needed to self-build vacuum trucks. In 2005,

the first truck was completed successfully, with another

20 trucks to be completed within two years. The project is

to be expanded to include gully sucker trucks, which are

used for high pressure cleaning of sewer and drainage

systems. A team of specialists is responsible for researching

and developing equipment innovations. TMS has also

established a know-how exchange partnership with a

leading industrial cleaning company in the Netherlands.

50

A number of Bidserv business units have received

empowerment ratings. Others continue the process of

obtaining ratings.

Empowerment ratings


Prestige Group A A

TMS Group A A

Steiner (including

Puréau)

BBB A

Top Turf ✦ A

Magnum Shield

(including Vericon)

A A

Minolta SA BBB AA

Connex Travel A A

Concorde Travel BBB BBB

Ebony ✦ BBB

Master Currency BBB AA

Prestige Travel ✦ BBB

Rennies Travel A A

Travel Connections BB BB

Uniworld Travel B B

World Travel BB BB

WORKFORCE

Bidserv’s staff complement grew to 54 646 as a result of

organic growth, acquisitions and the integration of the

office automation, travel, banking and foreign exchange

businesses. The largest employers are the Prestige Group,

Magnum Shield and the TMS Group. Staff management

issues remain challenging due to the highly dispersed nature

of most business operations.

The Prestige Group, Magnum Shield and a number of other

Bidserv businesses are labour-intensive operations and are

employers of significant numbers of unskilled and semi-

skilled employees.

Most business units conduct performance appraisals

from supervisory staff level upwards, while some conduct

appraisals across all levels. Appraisals often form an

integral part of skills development and needs analysis

programmes. A number of business units are in the process

of implementing standardised appraisal processes. Many

use yearly awards and other incentives to reward the most

dedicated employees.

Some businesses conduct employee satisfaction surveys and

some have feedback mechanisms for gathering employee

suggestions and opinions. The Prestige Group completed

a successful pilot project measuring employee satisfaction

levels, which will be rolled out to other Prestige businesses.

Health and safety

Health and safety issues are dealt with at business unit level,

that have varying working environments. Business units

ensure compliance with the OHS Act. Companies where

health and safety issues are material, due to the nature of the

work or the number of people employed, are highlighted.

Low-risk, office-based businesses are not discussed.

4 Prestige Group: Cleaning staff receive NOSA-approved

safety awareness training. Rope-access staff receive Rope

Access and Fall Arrest Association (RAPAA) approved and

certified training. A full-time safety co-ordinator ensures

that risk assessments and incident investigations are

conducted and that appropriate safety plans are in place.

4 TMS Group: Some cleaning activities are conducted in

hazardous industrial environments, such as petro-chemical

plants, and employees work with dangerous equipment

and materials, such as ultra-high-pressure water cleaners

and toxic cleaning agents. TMS has a dedicated safety

division, which ensures that staff receive safety training

and that specialised equipment is used in accordance

with NOSA and industrial cleaning safety procedures. At

least one safety representative is present at each TMS

site. Senior safety staff are NOSA SAMTRAC (safety

management training course) accredited.

4 Laundry Services: Regular health and safety audits are

undertaken.

4 Steiner Group: Health and safety training is provided

and regular building and equipment inspections are

conducted. All employees handling dangerous goods

will be enrolled in a newly restructured “Handling of

Dangerous Goods” training course which is accredited by

the Transport Education Training Authority (TETA).

4 Bidserv Industrial Products: A dedicated chemist is

responsible for the safe management of chemicals

and employees working with chemicals receive special

equipment and training.

Divisional reviews

Bidserv


4 Green Services: Health and safety training is integrated

into basic work-related training. Employees working with

pesticides and herbicides are pest control officer certified.

4 Aviation Services: Comply with OHS Act and staff are

trained to meet ACSA’s safety and security requirements.

4 Magnum Shield: Staff receive extensive security and

health and safety-related training, which is SIRA approved.

Refresher training is conducted annually. Contract staff

will, where applicable, receive additional client- and site-

specific health and safety training.

4 Rennies Bank and Foreign Exchange Services: Bureaux de

Change staff, who are at risk of armed robberies, receive

specialised training on appropriate conduct during a

potential robbery and are protected through state-of-the-

art security facilities and measures. Trauma counselling is

available for staff who have experienced an armed robbery.

HIV/Aids

A number of Bidserv business units have an HIV/Aids policy

or are developing one. Most provide basic HIV/Aids-related

education and awareness training. A few business units

have developed comprehensive programmes, often as part

of broader wellness or disease management programmes,

which include voluntary awareness and education activities,

distribution of free condoms, VCT and treatment support.

The cost to business of HIV/Aids is increasingly being felt.

A number of Bidserv businesses have reported suspected

HIV/Aids-related deaths and small increases in sick leave

and absenteeism rates, which are believed to be HIV/Aids-

related. At one Prestige Group site, surveys indicate a 30%

HIV-positive rate.

The Prestige Group, the largest Bidserv employer with

30 202 staff, offers yearly HIV/Aids awareness training in

conjunction with GlaxoSmithKline and has launched a

condom distribution and awareness programme. Assistance

with accessing external counselling and public treatment is

provided.

Magnum Shield, Bidserv’s second largest employer with

10 988 staff, provides HIV/Aids awareness training as part

of its induction training. A more comprehensive, dedicated

awareness and prevention training scheme is being

developed.

Training

Bidserv is a people-intensive service business. Well-trained,

motivated employees are the mainstay of the business,

providing excellent customer service.

4 Prestige Group: Staff receive at least 16 hours of

operational and health and safety training per year.

Prestige participates in the services SETA committee.

Prestige has over the last five years exceeded the skills

development plan targets. An NQF level 3 learnership

for 100 supervisory staff has been launched. Employees

conducting high-rise window and rope-access cleaning,

receive specialised, certified training.

4 TMS Group: Industrial cleaning staff receive equipment

operating and safety training as well as client-specific

safety training. Contract staff receive training by TMS

Group as well as clients.

4 Laundry Services: Staff receive on-the-job equipment-

specific training, which includes health and safety

Project Promote – preventing HIV/Aids Prestige Cleaning, together with the Department of Health

and Gen-Lem Projects, has launched a condom distribution

initiative, called Project Promote. During the first month

100 000 condoms were distributed through Prestige-

managed restrooms at airports and universities. This will

be expanded to other restrooms, such as at shopping

malls and participating companies and it is expected that

two million condoms will be distributed in the first year.

Cleaning staff are encouraged to distribute condoms

in their communities. About 100 employees, who are

responsible for distributing condoms, have been trained

as peer HIV/Aids counsellors. SABCOHA will evaluate this

project after 18 months.

52

components. Boiler operators are externally trained and

certificated. Staff members handling cleaning chemicals

receive “correct usage” training from suppliers.

4 Steiner Group: A training department has been

established and training programmes, skills needs

assessments and development plans are being

standardised across the Steiner Group. A leadership

development programme and an employee educational

assistance programme are offered.

4 Bidserv Industrial Products: A skills committee has been

established to re-evaluate training needs and standardise

training programmes for the different businesses.

4 Green Services: Labourers receive theoretical and on-

the-job training. Landscaping staff receive South African

Qualifications’ Authority (SAQA) certified landscaping training.

A new employee development system is being implemented.

4 Aviation Services: Staff receive job-specific training as well as

repeated ACSA-approved safety and security-related training.

4 Magnum Shield: Security staff receive SIRA-approved training.

Managers receive suitable in-house and external training.

4 Bidtravel Services: Training is provided based on

development needs determined in conjunction with

employees as part of their regular performance

assessments. Training is focused on customer service skills

and team development.

4 Banking Services and Foreign Exchange Services: The

businesses work with employees to develop career paths.

Performance management systems assist in determining

learning and development needs.

COMMUNITY

Customers

Most Bidserv business units do not conduct formal customer

satisfaction surveys, but tend to obtain feedback during

regular interactions with customers. In several businesses,

including Magnum Shield and TMS Group, client managers

routinely record and act on client complaints. Some

companies, such as the Steiner Group, are implementing

structured customer feedback mechanisms. At the Prestige

Group, dedicated client relations staff log complaints as part

of its ISO 9001 system and ensure complaints are addressed.

Prestige Cleaning, in conjunction with the National Contract

Cleaning Association (NCCA), is working on improving the

image of the cleaning industry by initiating a classification

system where NCCA-registered cleaning companies are

classified according to their quality-of-service levels. Levels

are assessed according to four service aspects, namely client

satisfaction, employee satisfaction and motivation, supplier

quality standards and quality of internal management

systems. This initiative has been successfully piloted and is

envisaged to be implemented across the industry. The NCCA

is responsible for setting cleaning industry standards relating

to safety, labour standards and use of chemicals.


Involvement in community projects varies between business

units, with some being peripherally and others significantly

involved in community projects. Some of the more

comprehensive initiatives are listed.

4 Prestige Group: Supports a variety of projects, including the

CANSA Shavathon and the Thembisa Hospital Aids clinic.4 Bidserv Industrial Products: Supports a number of charities

through financial and in-kind donations.

4 Green Services: Supports the Sun City soccer league,

donates materials and time to local charities and

constructs landscapes, such as playgrounds, in

disadvantaged communities.

4 Aviation Services: Supports the Kids Haven for abused

children in Benoni.

4 Magnum Shield: Donates used uniforms to the Salvation

Army.

4 Banking Services and Foreign Exchange Services: Support

the World Wildlife Fund, the Endangered Wildlife Trust

and the SA Police Service Hillbrow station and victims unit.

HyGienie’s educational reach

Steiner’s HyGienie educational road show has this year

reached about 500 000 children teaching them about

personal hygiene.

The HyGienie road show is being extended to include

a new campaign called “Pride of my School”. This

complementary initiative aims to educate scholars,

parent-teacher associations and school authorities in

disadvantaged areas about the importance of maintaining

bathroom hygiene at their schools. The project has been

piloted at an initial four schools and is now being rolled

out to about 100 schools across South Africa.

Divisional reviews

Bidserv


ENVIRONMENTAL

A number of Bidserv business units have environmental

policies in place, typically those that work with cleaning

agents and chemicals. Higher-impact businesses are

discussed.

4 Prestige Group: Complies with NCCA industry guidelines

meeting international standards on the use of SABS-

approved cleaning chemicals.

4 TMS Group: An environmental policy is in place. The

company works with and transports hazardous chemicals,

the use of which is strictly controlled. Hazardous

compounds are disposed of at approved dumping sites.

Old oil is sent for recycling.

4 Laundry Services: Laundry companies, which are large

consumers of water, power and chemicals, are working

towards compliance with SABS 0146 laundry industry

guidelines. The laundries measure water, electricity, coal

and cleaning-agent consumption. Boston Launderers

continues to invest significant capital in advanced

continuous batch washers, which require about 67% less

water per weight of washing than conventional washer

extractors. There are also significant detergent and

electricity savings.

4 Steiner Group: An environmental management

programme has been developed for Steiner businesses

which involves the review and enhancement of

environmental management processes.4 Bidserv Industrial Products: A dedicated chemist ensures

quality control and the safe storage, handling and

processing of chemicals. Where necessary, SABS standards

and certification are in place.

4 Green Services: Various agricultural chemicals are used.

These are sourced from registered suppliers and conform

to SABS standards. Grey-water irrigation systems are used

where possible. The company recently won the Landscape

Irrigation Association (LIA) Environmental Management

Trophy for an innovative water-conserving astroturf hockey

field irrigation system. 4 Aviation Services: Cleaning chemicals must meet ACSA,

airline, airline manufacturer and NCCA requirements.

Biodegradable cleaning chemicals are used at all airports.

Suppliers are assessed for environmental compliance.

4 Office Automation: Products comply with United States

and European Union environmental and energy standards.

Most product components are ozone friendly and recycled.

54

Divisional reviews

Bidvest Europe

Bidvest Europe Products and services

3663 FIRST FOR FOODSERVICE – UNITED KINGDOM

A leading United Kingdom foodservice product distributor which is made up of two divisions:4 Trading (Multi-Temperature and Frozen)4 Logistics (Central Distribution and Ministry of Defence)

DELI XL – BELGIUM Supplies a wide range of fresh and frozen food items to institutions such as hospitals and company canteens, as well as to contract caterers and restaurants.

DELI XL – NETHERLANDS Supplies a wide range of fresh and frozen food items to institutions such as hospitals and company canteens, as well as to contract caterers and restaurants.

HORECA TRADE – UNITED ARAB EMIRATES

Pioneered the one-stop-shop approach in the United Arab Emirates by offering a product range of more than 3 500 items, including exclusive big-name brands.


Material issues Mitigating action

Managing and minimising environmental impacts, including resource consumption, water and noise pollution.

3663 uses its environmental policy and EMS to guide a process of continual improvement. Deli XL Belgium and Netherlands ensure compliance with all regulations.

Compliance with tightening environmental legislation, regulations and risk management.

Sites are regularly informed of changes in legislation and regulation. Risk management processes are in place.

Compliance with health and safety legislation, regulations and associated requirements.

Sites are regularly informed of changes in health and safety legislation and regulation and are audited. Regular meetings are held with authorities responsible for health and safety to ensure compliance.

Provision of a comprehensive range of health and safety training programmes.

Health and safety training programmes are continually updated and improved. Evidence of pro-activity in health and safety in the UK is demonstrated by 3663’s Lead Authority Partnership with a local authority. These partnerships aid government bodies in ensuring a consistent approach to health and safety management.

Fred Barnes Chief executive

Sustainable development at Bidvest EuropeTo Bidvest Europe, sustainability means continually evolving business practices based on Bidvest Europe’s people, products and environmental management vision and meeting or exceeding broader stakeholder needs.

Bidvest Europe is western Europe’s leading foodservice company. Its British businesses have good claim to be UK market leaders. As a broadline distributor, Bidvest Europe supplies ingredients, finished products and equipment to the catering and hospitality industries.

Bidvest Europe



Indicator 2004 2005 2006

Revenue (R’000) ✦ 14 836 523 22 132 036

Trading profit (R’000) ✦ 532 753 651 223

Employees 5 647 5 459 8 458

Total training spend (R’000) ✦ 7 184 12 738

Training spend per employee (R) ✦ 1 316 1 506




CSI spend (R’000) ✦ 530 1 714

Electricity – fossil fuel (kWh) ✦ ✦ 45 914 714

Electricity – nuclear (kWh) ✦ ✦ 5 700 118

Electricity – solar (kWh) ✦ ✦ 366 063

Electricity – wind (kWh) ✦ ✦ 313 768

Water recycled (m3) ✦ ✦ 71 630


– Where divisional structures changed, figures were restated to allow comparison and have been adjusted to exclude disposed/closed businesses.– 2004 financial figures have not been provided due to restructuring and IFRS.– Employee-related data includes non-permanent employees.– Health and safety indicators have changed. ✦ Information not available.

CHIEF EXECUTIVE’S COMMENT3663 has invested considerable resources in social and

environmental aspects of its businesses which has resulted

in 3663 becoming a friendlier, greener and more caring

business. 3663 is recognised as a sustainability leader in

the UK foodservices industry and has received a number

of awards, the most recent being this year’s Caterer and

Hotelkeeper’s supply category “Best places to work in

hospitality” award.

Three businesses have been acquired: Deli XL Belgium,

Deli XL Netherlands and Horeca Trade United Arab Emirates.

Businesses are managed independently and benefit from

learning about each other’s social and environmental best

practices. Deli XL Belgium and Deli XL Netherlands have high

social and environmental standards. Horeca UAE is a small

start-up business with 40 employees undergoing significant

change and will be discussed in future reports.

In response to growing market pressures to conform to

social and environmental expectations, 3663 has established

a sustainability board committee. The board’s objective is

to ensure that 3663’s Environment – People – Product vision

is operationalised and that all businesses continue to take a

proactive approach to sustainability issues. Similar

committees will be set up for the newly acquired businesses

and they will progressively adopt a similar sustainability

vision to that adopted by 3663.

Two specific challenges have to be addressed. There is

pressure to meet and where possible exceed tightening

sustainability expectations and regulations; and 3663 has

to ensure a cross-pollination of sustainability-related best

practices among Bidvest Europe businesses.

The focus is for 3663 to comply with the UK’s “Food Industry

Sustainability Strategy” (FISS) recommendations, recently

56

Divisional reviews

Bidvest Europe

published by the UK government’s Department of the

Environment Food and Rural Affairs. The FISS document

outlines the food industry’s role in creating sustainable

strategies that deal with the issues of energy, carbon

emissions, water, waste, transportation, corporate social

responsibility, ethical trading, workforce and communities. In

the government sector, sustainable procurement practices

are also an increasing priority. 3663 is well-positioned to meet

these growing expectations.

ECONOMICSBidvest Europe achieved pleasing growth in its mature

markets, driven largely by the full-year effect of earlier

new business gains and success in retaining large

national accounts. Revenue rose 50,3% to £1,9 billion

(2005: £1,3 billion) while trading profit (up by 23,2%) was

£56,9 million (2005: £46,2 million).

MANAGEMENT SYSTEMS AND GOVERNANCEBidvest Europe businesses operate in an intensely regulated

environment, with local and national social, quality and

environmental standards supplemented by an additional

tier of European regulations. Compliance with legislation is

monitored through internal audit processes.

3663’s EMS was certified in 2003 to the environmental

management standard ISO 14001, in the Food Products,

3663’s local sourcing initiative provides economic, social

and environmental benefits

3663 launched an initiative two years ago to purchase

products locally. The aim was to realise social, economic and

environmental benefits through supporting and stimulating

local business and employment, and to reduce food miles

by reducing the logistics and energy required to store and

supply food products. A growing proportion of locally

sourced products is being included in 3663’s product range,

and as a result over 100 small producers have been able to

access new local markets. While establishing the mechanisms

to make this possible has been a technical and logistical

challenge, this initiative now includes over 500 products and

covers about half of the UK. The remainder of the UK will be

included by December 2007.

Beverages and Tobacco sector. The corporate certificate

for all sites represents a first for a UK company in the food

distribution industry. An independent monitoring company

carries out EMS audits, conducting surveillance visits to

approximately one-third of the locations each year to ensure

compliance with standards and continual improvement.

A health and safety-related risk assessment pack and an

operations standards diary are issued to all sites on an

annual basis to ensure compliance with health and safety,

and food safety standards.

3663 requests all own-brand suppliers to confirm that they

comply with the general labour practice principles specified

by the Ethical Trading Initiative (ETI). 3663 is certified at a

“high level” to the UK Accreditation Service’s food safety,

wholesale storage and distribution standard.

Deli XL Belgium and Deli XL Netherlands are HACCP

certified and comply with strict national and EU health and

safety and environmental regulations. Deli XL Belgium has

begun preparing for ISO 22000 certification, the recently

launched food safety management system for the food chain.

Certification is expected to be achieved in about 18 months.

To enhance product and service quality, Deli XL Netherlands

is adopting 3663’s advanced total quality management

processes.


delivery vehicles) are maintained in a safe condition. The

commitment to safety is underpinned by a comprehensive

range of training programmes including manual handling,

display-screen equipment assessment, racking repair and

inspection and general health and safety practice.

3663’s accident reporting process has been enhanced, relying

on a more robust and streamlined system and there has been

a steady drop in the number of reported accidents over the

last three years.

Deli XL Belgium and Deli XL Netherlands employ dedicated

staff members trained to ensure compliance with all relevant

health and safety requirements.

Training3663, Deli XL Belgium and Deli XL Netherlands maintain a

high level of training investment. Company training needs are

matched to business development plans. 3663 and Deli XL

Netherlands have structured performance appraisal systems

in place for all employees. Deli XL Belgium is putting such

systems in place. Training programmes include mentoring

programmes, secondments, coaching and involvement in

improvement groups.

In some areas, labour shortages create recruitment

challenges. This is addressed through training, offering

competitive salaries and maintaining or achieving employer-

of-choice status.

COMMUNITYCustomersHigh levels of customer retention are a function of

consistently high service quality and form part of 3663’s “First

for Service” vision. 3663 employees are among the best

trained and motivated in the industry and give the business

a competitive advantage. The 3663 service commitment

was highlighted by awards in several quality programmes.

3663 was recognised by Yum! as best European supplier.

Customer complaints are logged and used to improve service

delivery. Complaints have declined in the UK due to a more

rigorous application of operational standards, which led to

product quality improvements. 3663 and Deli XL Netherlands

conduct regular customer satisfaction surveys while Deli XL

Belgium will soon start conducting regular customer

satisfaction surveys.

WORKFORCEBidvest Europe employs 8 458 people: 6 306 in the UK,

1 750 in the Netherlands, 362 in Belgium and 40 in the UAE.

3663 has developed a comprehensive people strategy, “First

for People”, through which the company is establishing itself

as an employer of choice. This strategy and similar practices

are already in place or are progressively being adopted by

the three new businesses.

In addition to training and development opportunities,

the businesses offer good salaries and comprehensive

benefits packages. New procedures and practices relating

to maternity, adoption, paternity and flexible working have

been introduced. Non-discrimination policies and grievance

procedures are in place.

At 3663 and Deli XL Netherlands, the development of all

employees is managed by means of personal development

plans, which are generated to suit individual and business

needs and form part of a standardised performance appraisal

process. Deli XL Belgium is implementing such processes.

Workplace satisfaction at 3663 is measured in an annual

“People Survey” that measures employee perceptions on how

the business is managed and how they are treated, managed,

developed and involved in the business. Results are analysed

by geographical area, division and job function and are also

benchmarked externally. Improvement plans are implemented

and reported. Employee satisfaction has improved steadily

since 2001 and is currently at 74,4%, with a 92% response rate.

Deli XL Belgium and Deli XL Netherlands periodically

conduct satisfaction surveys.

The location of the Deli XL Belgium depot in the Charleroi

region was chosen to help address high levels of endemic

unemployment.

Health and safetyEffective health and safety management programmes are in

place with comprehensive policies and procedures covering

business risks. Health and safety information is issued to all

members of staff to ensure that everyone is aware of health

and safety considerations and practices within their workplace.

Maintenance, service and inspection processes ensure that

plant and equipment (including racking, fork lift trucks and

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Bidvest Europe

Customer health and safety are paramount to Bidvest Europe

businesses and dedicated quality assurance and HACCP-trained

employees rigorously ensure food quality and safety standards

are met. Key customers conduct periodic food quality audits.

3663 has launched a healthier foods initiative called Positive

Steps. This promotes healthier eating habits among

customers, including schools, by supplying foods with

reduced sugar, fat and salt content.

The European businesses comply with European ingredient

labelling legislation and ongoing progress is made relating to

food traceability. Deli XL Netherlands participates in a national

foods database, GPI Databank, which allows customers to

access all product information relating to ingredients, allergens,

nutritional information and packaging details.

Community activitiesBidvest Europe supports a multitude of worthy causes:

4 3663 is a leading contributor to Hospitality Action, the

benevolent organisation offering support to those who

work or have worked in the hospitality industry in the UK

and are now facing hardship. Depots are actively involved

in a variety of additional volunteer initiatives that benefit

local communities.

4 Deli XL Belgium supports the Alimentary Bank, which

distributes food to the needy, by supplying about 20 tons

of food annually. Financial support is provided to Doctors

Without Borders in Goma, DRC.

4 Deli XL Netherlands supports Classy Cooking, a cooking

and educational programme teaching school children in

deprived areas of Amsterdam about healthier diets and

exercise. A number of smaller initiatives are also

supported.

ENVIRONMENTAL3663 has a 10-year history of minimising its environmental

impacts and embedding a culture of environmental

consideration and responsibility across all areas of the

business. A dedicated central support department sets and

monitors company-wide standards. A network of volunteer

environmental co-ordinators promotes awareness and

initiatives across sites. Environmental improvement targets

and programmes are set at both corporate and local levels.

A voluntary environmental performance improvement

scheme was launched for own-brand suppliers in the UK. The

scheme encourages suppliers to improve their environmental

performance and comply with 3663’s environmental standards.

The level of environmental performance amongst own-brand

suppliers is assessed using an annual questionnaire. The most

recent questionnaire was completed by 67% of own-brand

suppliers. Five suppliers have to date committed to a process

of ongoing environmental improvement, involving support from

3663 and an annual audit.

An objective is for all 3663 sites to set environmental targets

covering resource usage, recycling and waste minimisation.

Measurement and reporting systems are being developed.

Deli XL Belgium and Deli XL Netherlands meet and exceed

all legal environmental regulations.

Deli XL Belgium has implemented a dedicated environmental

protection plan in partnership with local authorities. More

than 90% of waste generated at the depot is recycled, sold

or appropriately incinerated. The company, as a member of

FOST Plus, contributes financially to the Belgian “Green Dot”

recycling initiative. A feasibility study is being conducted to

set up a wind turbine to generate electricity.

Deli XL Netherlands is optimising its inbound transport

logistics, which is likely to reduce transport costs and fuel

consumption per product volume. The company recently

restructured its warehouse to comply with new chemical

storage and handling procedure regulations.

Recent 3663 environmental awards:4 Harlow and District Business Awards 2004 and 2005 – this

award recognised the environmental commitment and

employee activity at the local site

4 Keep Edinburgh Clean – Gold Award 2005 for excellence

as an environmentally clean site.


participation had to be encouraged. A network of

environmental co-ordinators, all volunteers who expressed

a genuine interest in this function, was established to

champion the initiative at each site.

There are now some 60 co-ordinators, at least one at each

of the 50 sites, who have taken on this task in addition to

their other duties. They fulfil a vital communications function

and support site managers in identifying and implementing

environmental improvement projects. Their tasks also

include environmental auditing, record keeping, reporting

and assisting with training.

A DECADE OF ENVIRONMENTAL PROGRESS

A case study of 3663’s journey beyond environmental complianceJust over a decade ago, 3663 set out to proactively tackle

environmental issues. This has led to many environmental

improvements, inspired employees and helped create a

more competitive business.

The business case

In 1995, as a response to growing environmental, employee

and stakeholder pressures, 3663 decided to improve its

environmental performance. Not only has the company

satisfied these stakeholder needs, but this initiative has

turned out to be an astute business decision that has

enhanced business performance. 3663 is the environmental

leader in this industry and continues to work at exceeding

environmental legislative requirements and customer

expectations. The programme has resulted in numerous

benefits, which include cost savings and improvements in

brand awareness, reputation, employee motivation, customer

retention, community relationships, operational efficiencies

and overall business competitiveness.

Getting started

The environmental programme became the responsibility

of the environmental services controller, who is also tasked

with health and safety management. A cross-functional

environmental steering group was established to assist

in guiding the process, developing policies and raising

awareness. An Environmental Mission Statement and

Environmental Policy were drawn up to communicate

the environmental vision, objectives and guidelines to

employees and other stakeholders. Fred Barnes, the then

operations director, was a strong supporter of the initiative

and ensured board support.

Empowering employees

To inspire everyone to create a culture of environmental

commitment and continual improvement, better employee

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Bidvest Europe

Campaigns build commitment

Campaigns play an essential part in developing awareness,

understanding and commitment. For example, an

environmental awareness day was used to educate

employees about environmental issues, environmental

objectives and to collect suggestions for improvements. The

best suggestions received prizes and were implemented with

the help of employees. A longer-term campaign focused on

waste minimisation using the Reduce, Re-use and Recover

philosophy. Campaigns are supported by posters, dedicated

environmental notice boards, discussions at staff meetings

and newsletters.

Low-hanging fruit

Initial projects focused on areas where easy gains could

be made. One project focused on saving electricity, by

placing “switch off” stickers on light switches to encourage

employees to only use lighting when required. Other projects

focused on recycling of paper, cardboard, metal and glass.

These initial projects, which aimed to involve as many

employees as possible, helped create awareness and in

many cases resulted in cost savings. Projects would often be

piloted at one or two sites, before being rolled-out to others.

With time, more comprehensive projects were tackled, many

of which have resulted in cost savings.

Annual environmental conference

A forum was required to bring together the company’s many

environmental co-ordinators. To this effect, a yearly two-day

environmental conference is held where participants can

network, learn and plan upcoming projects. The conference

is set to coincide with a 3663 board meeting. This allows

co-ordinators to ensure new environmental projects are

supported by executives and it allows executives to stay

abreast of environmental progress.

Involving the community

As 3663’s level of environmental commitment grew, sites

were encouraged to share their newly-gained knowledge and

enthusiasm by working with communities on environmental

initiatives. Sites have initiated a broad range of projects,

which include educational projects for scholars, such as

the development of school gardens, poster competitions

and river clean-up initiatives. Sites also collaborate with

communities to resolve mutual issues such as noise pollution

and water run-off problems.

Environmental management system

In 2001 a decision was made to formalise environmental

practices by investing in a certifiable environmental

management system, ISO 14001. Since much of the

groundwork of fostering commitment and putting basic

systems in place had been done, the certification for all

locations was achieved in a record two years.

Managing the supply chain

Recently, an environmental supply chain manager was

hired to work with own-brand suppliers to improve their

environmental standards. While this scheme is voluntary, it

is likely to become mandatory for all own-brand suppliers

and already suppliers that commit to ongoing improvements

are audited and given ratings, which in future is likely to

contribute to a preferred-supplier status.

Measuring performance

All sites are being tasked with setting environmental targets

and measuring performance against these indicators. This will

make 3663’s environmental policy objectives more concrete,

ensure deeper commitment and allow 3663 to set targets

and report against these at company level. These indicators,

amongst others, include waste to landfill and recycling volumes

and resource consumption of water, electricity and fuel. Site

environmental performance, based on compliance with

legislation, company standards and ISO 14001 requirements,

are monitored.

The future

As legislative requirements and stakeholder expectations

grow, 3663 continues to be well-positioned to use its

environmental excellence to further improve business


4 Installation of warehouse lighting systems, utilising low-

energy bulbs and reflectors, has resulted in savings of

£53 825 and 750 000 kWh in electricity usage over the last

two years.

4 An ongoing vehicle-routing optimisation initiative has

resulted in reduced vehicle mileage and fuel usage, which

has resulted in savings of at least £50 000 in the last year.

3663’s elegantly succinct environmental policy

3663 is committed to continually improving its environmental

performance and products through a process of pollution

prevention and compliance with appropriate environmental

legislation.

Specifically, 3663 aims to:

4 Identify and manage the environmental impacts of products,

packaging and services and, where possible, work with

suppliers to improve overall environmental performance in

these areas.

4 Manage all wastes appropriately and reduce the burden

on landfill by implementing the principles of the waste

hierarchy, namely Reduce, Re-use and Recover.

4 Reduce consumption of energy and resources and where

appropriate implement a green purchasing policy.

Continual environmental improvements to business operations

will be achieved by setting environmental objectives and

targets which will be monitored and reviewed through the

implementation of an externally recognised environmental

management system. This will be achieved by raising

awareness and providing education to all staff and where

necessary suppliers and customers regarding the company’s

position on the environment, its environmental management

system and their responsibilities.

competitiveness. Recently, a sustainability board committee

was established to take responsibility for social and

environmental issues.

Key environmental achievements

4 Over the last two years a cost saving of £400 000 has been

realised through a variety of resource conservation initiatives,

focused on water, electricity, fuel and recycling savings.

4 A corporate recycling strategy has resulted in 12 depots

becoming recycling hubs, where cardboard and plastic

pallet wrap from other depots are baled in preparation for

recycling, diverting some 1 300 tons from landfills and yearly

generating savings in excess of £31 000.

4 Five own-brand suppliers committed to ongoing

environmental improvements as part of 3663’s supply chain

environmental mentoring programme.

4 Innovative rainwater-harvesting systems are included in

new depots and so far two are in use, with a third coming

on-stream. The water is used for washing vehicles. Prior to

this, recycled water systems were installed in new depots.

Together with a programme of installing low-flush toilets,

these initiatives have over the last two years saved £40 000

and 25 000 cubic metres of water.

4 3663’s fleet of 1 000, 18-ton trucks are fitted with Scania’s

new Euro 3 engine which reduces particulate matter and

nitrogen-oxide emissions.

4 Approximately 80% of own-brand outer packaging and

approximately 40% of own-brand primary packaging

now bear eco-labelling symbols. These symbols provide

consumers with recycling and other relevant information.

4 3663’s local sourcing initiative, which now covers half of the

UK, helps reduce food miles, by reducing the logistics and

thus energy required to store and transport food products.

4 Vehicle parts are salvaged from discarded fleet vehicles. This

initiative was introduced a decade ago and has resulted in

savings to date in excess of £2 million.

4 Ammonia – Glycol refrigerant systems, which help reduce

electricity consumption, are now used in the new larger

depots. Over the last two years these initiatives have resulted

in savings of £67 500 and 1,3 million kWh of electricity.

62

Bidvest Australasia Products and services

BIDVEST FIRST FOR FOODSERVICE

The leading multi-temperature foodservice products distributor in Australia, offering a broad range of products throughout the continent.

CREAN FIRST FOR FOODSERVICE

The leading national foodservice products distributor in New Zealand, offering over 10 000 products through 18 strategically positioned branches.



A potential shortage of skills in view of minimal unemployment and consequent pressure on labour rates.

Concerted efforts to ensure an attractive environment to work in, including extensive training programmes, safe and congenial working conditions, and the opportunity for career development.

Maintaining the highest standards of food safety. Accredited systems in place to ensure strict standards of food safety and product integrity.

Dependence on imported fuel and commodity exports. Higher fuel prices are affecting operational costs and consumer spending patterns.

Maximising operational efficiencies.

Water restrictions (Australia). Revised water reticulation and recycling capability for washing fleets.

Divisional reviews

Bidvest Australasia

Bernard Berson Chief executive

Sustainable development at Bidvest AustralasiaBidvest Australasia is committed to conducting business in a manner that is conducive to long-term sustainability and not solely focused on short-term achievements. Sustainability is about ensuring continued growth in profitability and shareholder returns in a fashion that is relevant to the societies and environments in which the business operates. Bidvest Australasia invests in developing its staff, its most important asset. Environmental responsibility is a priority and efforts focus on controlling the efficient use of scarce natural resources, often in conjunction with customers and suppliers.

Bidvest Australasia operates as Bidvest First for Foodservice in Australia and as Crean First for Foodservice in New Zealand. It is the industry leader in these markets and the only foodservice company to provide a national service.


CHIEF EXECUTIVE’S COMMENTThe business continues to benefit from an expanded national footprint in both Australia and New Zealand, the successful integration of new business units and a constant focus on operational efficiencies.

Rigorous expense management will be necessary to maintain further growth in both sales and trading income in view of challenging macro-economic conditions in both countries. The principal industry challenges relate to rising inflation and higher fuel prices and their effect on operational costs and consumer spending patterns.

Low rates of unemployment are reflected in skills shortages, which is an ongoing challenge. The business invests in quality people and seeks to attract and retain talent with premium pay rates, extensive training programmes, safe and congenial working conditions and the opportunity for career development.

Environmental issues are controlled by state and federal legislation and the business rigorously observes all relevant statutes. A number of initiatives have been introduced to improve environmental practices and further opportunities are sought.

ECONOMICSBidvest Australasia entrenched its position as industry leader and achieved encouraging growth and profitability. Organic growth, continual improvements in existing working practices and operational efficiencies drove the business forward.

Revenue increased 11,0% to A$1,4 billion (2005: A$1,3 billion) and trading profit increased 30,0% to A$45,6 million (2005: A$35,1 million).

MANAGEMENT SYSTEMS AND GOVERNANCE4 Bidvest First for Foodservice has a quality management

system accredited to ISO 9002 standards, which incorporates occupational health and safety practices that comply with each state’s legal requirements.

4 Brisbane, Cairns and Darwin are Australian Quarantine and Inspection Service (AQIS) approved sites for exports.

4 Crean is fully HACCP accredited at all branches.

WORKFORCEBidvest Australasia continues to grow its business but this has not required additional staff to be recruited. The businesses are established employers-of-choice in the industry.


Indicator 2004 2005 2006

Revenue (R’000) ✦ 5 691 085 6 505 802

Trading profit (R’000) ✦ 163 844 219 403

Employees 1 904 2 056 2 278


Training spend per employee (R) ✦ 630 612



Work-related fatalities ✦ – –

CSI spend (R’000) ✦ 620 672


– Where divisional structures changed, figures were restated to allow comparison and have been adjusted to exclude disposed/closed businesses.– 2004 financial figures have not been provided due to restructuring and IFRS.– Employee-related data includes non-permanent employees.– Health and safety indicators have changed. ✦ Information not available.

64

A combined total of 2 278 staff members remains relatively stable, with low levels of staff turnover. Given the low levels of unemployment and consequent skills shortages, pay scales tend to be higher than those offered by small business; premium pay rates are often necessary to attract and retain certain grades of staff.

Bidvest First for Foodservice subscribes to the principle of equal opportunity for women in the workplace and reports on progress to the government each year. The organisation is compliant with the Equal Opportunity for Women in the Workplace Act (EOWA) 1999. All branches are encouraged to employ mentally challenged individuals, where possible.

Health and safetyOccupational safety standards are maintained throughout the business. All branches adhere to the appropriate regulations in each jurisdiction and have a health and safety committee and programme to highlight and respond to health and safety risks. Standards are rigorously audited at Bidvest First for Foodservice. Crean will be audited by the government Accident Compensation Corporation (ACC), in a bid to qualify for a discount from the exclusive provider of work injury cover in New Zealand.

In Australia, a high level of social welfare support is built into the payroll scheme. In New Zealand, where there is no such scheme, Crean offers a retirement scheme for staff which includes health insurance and income protection insurance.

A limited number of minor accidents occurred during the year, consistent with levels recorded in recent years. There were no serious injuries.

TrainingInvestment in training is ongoing and reached A$0,3 million. Approximately 1 200 employees have signed up over the past four years to receive nationally recognised training throughout the branch network. Courses cover warehousing, distribution, administration and selling skills. In Australia there is a standardised training recognition, called AQF (Australian Qualification Framework). Training is recognised from level 1 to level 4, as well as diploma level and advanced diploma level. The training Bidvest provides is recognised by AQF to certificate level 3.

Together with competitive pay scales, the provision of training enables the company to develop a qualitative edge in service standards.

Crean continues to expand rapidly, increasing its capacity to offer career opportunities. The company is differentiated by the high calibre of its focused and motivated staff. While there is no standardised training and career development programme in place, training needs are identified and addressed at branch level.

COMMUNITYCustomersThe businesses are recognised market leaders in innovation and have sophisticated technology in place to ensure a distinct competitive advantage. Both the Australian and New Zealand operations have a sophisticated single network and

Divisional reviews

Bidvest Australasia

Quality management system recertified

Bidvest First for Foodservice’s QMS has been in place

since 1994 and is audited every three years to ensure

that the highest standards are maintained. The system

was recently audited and recertified, passing with flying

colours. The fully integrated programme incorporates

best practice concepts, quality assurance (ISO 9002),

food safety (HACCP), occupational health and safety,

environmental protection, corporate governance and

employment practices. The policy statements, procedures

and work instructions provide guidelines and parameters

to enable business units to operate in an efficient

and effective manner, ensuring that the interests of

stakeholders are protected, maintained and enhanced.


IT system with a central mainframe servicing all business units around the country. This adds greater value for customers and suppliers by generating meaningful and specific reports that can be drilled down to give the required amount of detail. Bidvest First for Foodservice has a 24/7 online ordering system FindFoodFast to assist customers. More than 30% of sales transactions are handled electronically and the Online Product Reference Information (OPRI) system details a full catalogue of over 50 000 products on the internet.

The companies enforce stringent food safety standards, working with suppliers and customers to retain product integrity and to develop innovative product packaging, so that products are easier for customers to handle and present less of a risk in the kitchen.

Bidvest First for Foodservice suppliers have to be HACCP compliant and Crean suppliers require accreditation from AgriQual, an independent company that audits and verifies supplier performance standards.

Community activitiesCSI activities are aimed at addressing needs identified in the local communities in which the business units operate. Providing for community upliftment is generally considered to be predominantly a government responsibility and there is no significant pressure from stakeholders for the business to engage in a formal CSI programme. Bidvest Australasia recognises a degree of responsibility and accordingly engages in charitable efforts.

ENVIRONMENTALAll operations are fully compliant with strict standards of environmental practice enforced by the state and federal legislation in Australia and New Zealand. There is a strong environmental consciousness throughout the continent and although the operations generally have a low environmental impact, there is growing pressure from stakeholders for incremental progress in environmental performance.

Vehicle fleets are responsible for the most significant environmental impact. The majority of the trucks in operation have been replaced with energy-efficient, ozone-friendly models. The recycling of the fleet also enables the companies to take advantage of government tax incentives aimed at discouraging vehicles that are older than ten years. In Australia, where there are water restrictions, operations have revised their water reticulation and recycling capability to ensure that water is not wasted when washing fleets.

The refrigeration equipment installed is ozone-friendly and energy-efficient. Other environmentally friendly developments include the replacement of cans with flexible bladders, the discontinuation of metal drums and the introduction of flat-board packaging. There is a well-developed recycling mindset. The separation of office waste is a standard practice and the business is progressively moving towards biodegradable products.

Well-oiled recycling mindset

A practice well-established in all branches across Bidvest

Australasia is the separation of general rubbish, cardboard

and plastic – generally pallet wrap. The cardboard and

plastic are removed for recycling and the general rubbish is

disposed of through accredited providers into landfill. This

has not only reduced waste disposal costs but also enables

about 50% of waste generated to be recycled. Photocopier

and printer cartridges are also recycled, as is truck engine

oil in those branches that have in-house mechanics. The

businesses use many cardboard cartons for repacking

small orders; second hand and recycled cartons are used

instead of new cartons, resulting in an estimated saving of

approximately A$100 000 per annum.

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Divisional reviews

Bidfood

Bidfood Products and services

CATERPLUSCatersales, CCW Catering Supplies, Chipkins Catering Supplies, D & R Lowe Catering Supplies,First Food Distributors, Lou’s Wholesalers,M&M Quality Choice, RFS Catering Supplies,Caterplus Botswana, Blue Marine, East Cape Foods, Sea World, 3663 First for Foodservice

A leading supplier of groceries, seafood, vegetables, poultry, red meat, dairy products, equipment, utensils and allied products to the catering, hospitality and foodservice industry.

SPECIALITYPatleys Local and imported premium quality food products are marketed under

Goldcrest and other major South African and international brand names.

CATERING EQUIPMENTVulcan-Catering Equipment South Africa’s leading manufacturer and distributor of locally produced and

imported kitchen and catering equipment.

PAPER PRODUCTSLufil Packaging Lufil Packaging is one of South Africa’s leading paper converters, producing a

wide range of paper products primarily for the fast food and retail industries.

HOSPITALITY ACCESSORIESHotel Amenities Suppliers, Promo Sachets, Steri Pic Hotel Amenities Suppliers is the leading supplier of guest amenities and

accessories to the South African hospitality industry.

BIDBAKENCP Yeast, Chipkins Bakery Supplies, IBI Group Manufactures and sells a wide range of baking ingredients, premixes and yeast

under the Chipkins, NCP Yeast and IBI brands.

CROWN FOODS GROUPCrown National, Modpak, Continental Spice Works Supplying the South African meat, poultry and food processing industries with

superior quality spices, herbs, seasonings, food ingredients, meat-processing equipment, sausage casings and food packaging.

Colin Kretzmann Chief executive

Sustainable development at BidfoodBidfood is committed to providing safe, affordable and nutritious food products and functional food ingredients to the foodservice community. Priorities include maintaining the highest standards of food quality and safety, providing a safe working environment and offering training and development opportunities for staff. There is an ongoing drive to reduce Bidfood’s environmental impact by reducing energy usage.

Bidfood serves the hospitality, leisure and catering markets with a comprehensive range of food products and consumables. The division also manufactures and distributes pre-mixes, food ingredients, spices, seasonings and other products to the bakery, poultry, meat and food-processing industries and is represented in all important urban areas and tourist centres across southern Africa.




Adhering to increasingly rigorous standards of food safety and product integrity in South Africa.

Quality control standards are maintained through food safety systems. Suppliers are selected on the basis of strong quality credentials. Bidfood strives to meet the requirements of HACCP and ISO.

Continuing to improve BEE credentials and awareness. Operational units within Bidfood are in the process of obtaining individual empowerment ratings.

Management of HIV/Aids in the workplace. HIV/Aids awareness and prevention programmes are managed at branch level and need to be more conscientiously promoted to ensure effective management of the disease.

Significant increase in fuel prices. Optimising efficiencies in the distribution system with a focus on effective regulation of fuel consumption and sale of a wider range of products to each customer.

Effective IT system as a management tool to maximise business effectiveness.

Process under way to improve IT system across the division.


Indicator 2004 2005 2006

Revenue (R’000) ✦ 3 254 592 3 666 437

Trading profit (R’000) ✦ 316 227 299 813

Employees 3 172 3 865 4 060


Training spend per employee (R) 1 286 759 1 171



Work-related fatalities 0 0 3



CSI spend (R’000) 33 292 514


– Where divisional structures changed, figures were restated to allow comparison and have been adjusted to exclude disposed/closed businesses.– 2004 financial figures have not been provided due to restructuring and IFRS.– Employee-related data includes non-permanent employees.– Health and safety indicators have changed.– Empowerment data is for South Africa only. ✦ Information not available.

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Divisional reviews

Bidfood


Caterplus and Combined Foods were consolidated as

a single reporting unit, Bidfood. Catering Supplies and

Frozen Foods have been merged into a focused foodservice

business, Caterplus, under a single management team. This

will bring benefits to regional management and encourage

business growth, while at the same time streamlining the

activities of national accounts and national procurement.

Despite a challenging trading environment, no jobs were

shed and modest job growth was achieved. A number of

sectors performed particularly well during the year: the frozen

food businesses increased their combined market share in

the independent sector of the market; growth in the fast

foods sector has spurred growth for Lufil Packaging; growth

in the home entertainment sector has brought significant

benefits to Patleys; and Hotel Amenities Supplies has secured

a contract to supply a major hotel group.

All Bidfood businesses are in the process of obtaining an

empowerment rating.

It is with deep regret that we report three employee fatalities.

These resulted from separate motor vehicle accidents during

deliveries. Full investigations were undertaken.

A principal challenge is to improve the division’s IT system

as a management tool to maximise the effectiveness of

operations. Other key challenges include high levels of

illiteracy in the workforce and the need to improve efforts to

manage HIV/Aids in the workplace.

At the Durban NCP yeast factory, local authorities raised

concerns about the higher-than-standard levels of toxicity

in the effluent and high sulphite levels, which can cause

corrosion to the pipe work at the municipality’s waste-water

works and could harm marine life. An effluent permit has

nonetheless been issued by the municipality for 2006/2007,

without these issues being raised. Steps taken to dilute the

effluent disposal have been well received by local authorities

and the risks have been significantly reduced.

In response to public concerns raised around butchery

hygiene and official investigations into the cleanliness

of some butchery equipment, Bidfood is developing an

equipment cleaning solution targeted specifically at relevant

equipment.

A focus on increasing efficiencies in the distribution system

includes effective regulation of fuel consumption by

providing a broader basket of products to existing customers.

ECONOMICS

Bidfood achieved encouraging growth, particularly in

the convenience foods sector and made significant

inroads into the independent catering market. Revenue

increased by 12,7% to R3,7 billion (2005: R3,3 billion).

Trading profit, however, declined 5,2% to R299,8 million

(2005: R316,2 million) due to margin pressures and capacity

and overhead cost increases, mainly in distribution.


There is an emphasis on food safety systems across the

division, to ensure the highest quality control testing of both

raw materials and finished products. Specific management

systems and standards in place in certain business units are

outlined:

4 Bidbake: Implementation of the food safety systems

HACCP and ISO 22000 is in progress at new premises at


products on the inventory are tested through Société

Générale de Surveillance (SGS) and/or SABS, to ensure

compliance with food safety standards.

4 Vulcan: The company is working towards ISO 9001

accreditation. Syspro, a fully integrated distribution

manufacturing and accounting package, has been

expanded to improve procurement, production and sales

efficiency. Independent occupational health and safety

specialists conduct a monthly quality and safety check

across the business.


Bidfood has made good progress in terms of BEE and

transformation. There remains a need to further embrace BEE

as a strategic imperative to better position the business to

take advantage of market opportunities and compete more

effectively.

All Bidfood companies are in the process of obtaining an

empowerment rating.

There has been encouraging progress in improving the racial

profile of the boards of directors of Bidfood businesses, but

meeting equity targets at top and senior management levels

remains a significant challenge.

On average, over 50% of investment in training has benefited

black employees. However, few learnerships were undertaken

this year.

Procurement and sales personnel in all business units are

encouraged to seek information and guidance on BEE

issues from Bidfood’s commercial director. Procurement

spend on BEE-compliant companies was in line with targets.

Mechanisms to verify the status of suppliers continue to be

Longmeadow. A policy is in place requiring all suppliers to

maintain the strictest standards of food safety through the

implementation of quality programmes. Supplier standards

are maintained through a supplier approval system.

4 Caterplus: An operating manual covering all health

and safety requirements and related risk areas is being

developed and will be disseminated at each of the

branches to ensure that full compliance with the OHS Act

is achieved. Close liaison with suppliers and contingency

plans are in place in the event of any health-risk outbreak

that may undermine food safety. Roll-out of a standardised

IT system across Caterplus is in progress.

4 Crown Foods Group: The production facility in Cape Town is a

best practice manufacturing environment and is fully HACCP

accredited. National and international suppliers are regularly

monitored to ensure compliance with pre-set standards based

on international and industry food safety standards. Specific

emphasis is placed on instituting new technologies to assist in

reducing food safety risks and ensuring product quality.

4 Everyday Foods: The factory, within the Trimark Group, is

HACCP accredited.

4 Hotel Amenities: Manufacturers are required to provide

quality assurance in terms of Cosmetics and Toiletries

Federation of South Africa (CTFA) certification.

4 Lufil: All materials are Food and Drug Administration (FDA)

compliant and monitored through procedures prescribed

in the Lufil Quality Programme. This includes a dedicated

module relating to environmental practices. Two external

consultants have been appointed on a permanent basis

to drive quality issues with the aim of achieving HACCP

accreditation and to manage health and safety. Impact

Management Services monitor the enforcement of the Lufil

Quality Programme. Some products are SABS certified.

4 Patleys: Macrosafe has been contracted to assist the

company in meeting all OHS Act requirements. All

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Bidfood

developed and there is improved awareness of the strategic

importance of supporting BEE suppliers.

The accuracy of information collated for the BEE scorecard

has improved significantly and the scorecard is proving to be

an effective management tool for monitoring progress.

Eleven bursaries were distributed across the division by the

Bidvest-Dinatla Bursary Trust, investing in the education

of employees’ children. Over 30 applications from various

branches of the division have been submitted for evaluation.

WORKFORCE

Bidfood employs a total of 4 060 staff. There are high

concentrations in Johannesburg, Cape Town and Durban,

and representation in all the regional centres including

Bloemfontein, East London, Empangeni, George,

Pietermaritzburg, Polokwane, Port Elizabeth and Nelspruit.

There is also a branch of Caterplus in Botswana and in Namibia.

Bidfood operates in a deregulated industry with no

centralised bargaining forums. Levels of pay are above

the minimum rates set out in legislation and pride is taken

in developing employees. Recognition and accolades for

exceptional achievement in the workplace includes the real

achievers together society (RATS) functions and divisional

awards held annually around the country.

Employee satisfaction is measured through climate surveys

as part of the division’s in-house First for Service quality

management process. Some companies have additional

systems in place to monitor employee satisfaction.

Performance appraisal systems are generally undertaken

on an informal basis and this is an area identified for

development. Employee benefits are managed on a

decentralised basis and in accordance with the Employment

Equity Act.

Health and safety

The principal health and safety risks associated with Bidfood

activities relate to the production, handling, warehousing and

distribution of foods and use of mechanical equipment to move

products. Only minor injuries were sustained in the workplace.

Health and safety issues are addressed at branch level and

ongoing training is undertaken in terms of the OHS Act,

including first aid training. Some branches within Caterplus

conducted occupational health and safety audits in order to

ensure that all health and safety requirements are met.

HIV/Aids

Several companies are experiencing an increasing impact

of HIV/Aids in the workforce, in the form of higher levels of

absenteeism and loss of staff. This has resulted in an increase

in the employment of temporary staff to compensate for

absent staff.

There is no standardised approach to HIV/Aids prevention

and support, with individual branches instituting programmes

to varying degrees. Most operations have awareness

campaigns. Some provide training for the workforce on

HIV/Aids and have voluntary peer educators or an outside

trainer to give greater impetus to the programme.

Employees who acknowledge their HIV positive status are

supported at branch level and victimisation is not tolerated.

The prevalence and incidence of HIV/Aids is not measured

and assistance with ART treatment is not provided.


on HDIs. Bidfood sent 10 aspiring managers to the Bidvest

Academy.

4 Caterplus: Some operations conduct skills gap analyses

and implement appropriate training interventions aimed at

developing and promoting specific individuals, especially

HDIs. KPIs were identified at all levels; this has been a

learning curve and is starting to deliver benefits.

4 Lufil Packaging: Training is provided in accordance with

the Lufil Quality Programme. An internal mentorship

programme is provided for machine operators, as well

as formal training and refresher retraining for moveable

machine operators, including forklifts.

4 Crown Foods Group: Modern training facilities are

provided at the Cape Town factory. In conjunction with a

work skills plan, the following programmes are in place:

numeracy and literacy programme (ABET); subsequent

management training provided through First for Service,

quality assurance methodology, machine handling and

operations, in-house senior and middle management

training.

4 Vulcan: Initiated ABET training in 2004. Forty-one

employees are currently enrolled in the scheme to improve

their education to the equivalent of Standard 7.

COMMUNITY

Customers

Bidfood companies manage customer relations at branch

level and high levels of customer satisfaction are maintained.

An increasing number of major accounts insist on HACCP

standards. Stringent food safety and quality policies are

observed, and quality service provided, to meet customer

expectations. Many companies conduct customer satisfaction

Leadership through creative education

Crown National supports an adult education programme

called Leadership Through Creative Education which

provides its members of staff with the opportunity to

obtain a quality education denied to them as children. The

programme has an annual enrolment of 30 learners and

co-ordinates the services of seven highly qualified

educators. Tuition takes place daily on a one-to-one

basis starting with the National Qualifications Framework

level 1-4 literacy levels. This includes computer skills and

English literacy through to secondary school certificate

level. Students who complete this phase can proceed

to bridging courses to assist them in obtaining a BCom

degree. Examinations are undertaken through the IEB and

Unisa. Crown National fully subsidises the programme

and provides each learner with the opportunity to identify

a career path, allowing learners to study in line with their

potential and prospects for growth in the company.

Training

Investment in skills development increased. Every member

of staff has the opportunity to attend the in-house First

for Service quality management training programme,

implemented in 2001 to drive staff development. Over

1 200 employees from factory level through to managing

director level attended courses, each lasting a few days.

Refresher courses are offered and there are training

facilitators at each branch.

Skills development plans are identified at branch level and

training requirements are outsourced. Annual performance

is reported to the relevant SETA. Full advantage is taken of

management development opportunities, with a strong focus

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Divisional reviews

Bidfood

potential environmental risks, which are duly reported to the

Bidfood board. An ongoing focus is to increase efficiencies in

the distribution system, including effective regulation of fuel

consumption.

4 Bidbake: Levels of toxicity in the effluent produced

at Durban NCP Yeast and Longmeadow factories

are monitored by local authorities and compliance is

maintained. There is no hazardous waste. Effluent at

Longmeadow is taken off-site to be treated prior to

dumping.

4 Crown: A dust extraction system has been installed at the

food ingredients production facility in Cape Town which will

marginally reduce the negative impact on the environment

and assist in safeguarding the health of staff.

surveys and have formal reporting structures for logging

customer complaints. Certain companies organise client

open days or roadshows for their customers.


As part of its implementation of the Bidvest Charter on

transformation and empowerment, Bidfood has established

a CSI programme with three key focus areas: investing in

the training of talented HDIs to become chefs; supporting

disabled homes through the sub-contracting of packaging;

and working with suppliers to support targeted regional

community projects.

ENVIRONMENTAL

The risk committee in each sub-division oversees

environmental performance, including the identification of

Hotel Amenities’ exemplary enterprise

development initiative

The decision to outsource Hotel Amenities’ manufacturing,

warehousing and distribution, developed into a tremendous

opportunity for the business to make a significant and

ongoing contribution to social upliftment. As much of the

work required by the contract packers does not require

skilled labour, the prospect arose of offering the work to

physically and mentally disabled people from previously

disadvantaged backgrounds. Hotel Amenities is proud to

be associated with three projects which share the common

purpose of providing sustainable employment opportunities

for people with disabilities: The St Raphael Protective

Workshop in Eldorado Park, Johannesburg; The Midrand

Association for the Physically Disabled, in Rabie Ridge; and

The Transvaal Indian Blind Association (TIBA).


4 Everyday Foods: Soak pits have been built and waste

management facilities are audited by external auditors.

Tanks have been built to resolve sewage water leaks

which contaminated other waste water and this is under

supervision and control.

Master chefs in the making

Bidfood is a proud sponsor of a bursary programme

aimed at talented students from historically disadvantaged

backgrounds who wish to train as chefs. Elias Kafi, a young

man from Khayelitsha, was talent-spotted by master chefs

Garth Stroebel and Paul Hartmann of the South African

Chefs’ Academy. His initiative and enthusiasm for food

preparation earned him a recommendation by Goldcrest’s

management and soon afterwards Bidfood agreed to

sponsor Elias through a two-year chef’s diploma. Currently

in his first year, Elias is a chef’s apprentice and is being

mentored in all kitchen disciplines while gaining working

knowledge of recipes and cooking methods. He will be

given theoretical training on all aspects of the culinary

profession. Bidfood will continue to identify and invest in

emerging chefs like Elias, recognising the contribution of

the programme towards the long-term sustainability of the

food industry.

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Divisional reviews


Bid Industrial and Commercial Products Products and services

VOLTEX ELECTRICAL DISTRIBUTIONWholesaleElectric Centre, Electrostar, Crew Electrical, Globe Electrical, H&T Electrical, Keens Electrical, Litecor, Sanlic International, Voltex, Voltex Coland, Voltex Retail Suppliers, Voltex Electrical

Offers a comprehensive range of well-known local and international electrical brands through 80 outlets throughout southern Africa.

SpecialistAtlas Cable Supplies, Association Cables, Waco Industries, Cabstrut, Sanlic, Voltex Lighting, Voltex Transmission & Distribution, Electrification and Distribution Technologies, Versalec Cables

BERZACK BROTHERSBerzack Brothers, Bloch & Levitan Eastman Staples

Based in South Africa and the United Kingdom, Berzack distributes industrial machinery and accessories to the clothing, luggage, upholstery and embroidery industries, as well as domestic appliances to leading chain stores.

STATIONERYWaltons Stationery Company Hortors, Waltons Import Division, SA Diaries, Waltons Promotional Gifts, Kolok, Contract Office Products

Wholesalers and distributors of a wide range of stationery products and computer consumables.

Myron Berzack Chief executive

Sustainable development at Bid Industrial and Commercial ProductsBid Industrial and Commercial Products strives to identify and manage the risks and opportunities associated with ensuring long-term business success. Focus areas include staff training and development, managing HIV/Aids in the workplace, product innovation and expansion and development in the market. The business is a proud facilitator of national energy-saving initiatives.


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Bid Industrial and Commercial Products Products and services

OFFICE FURNITURECN Business Furniture CN Manufacturing, Budget Desks and Chairs, Office Furniture Clearance HouseDauphin Office SeatingSeating, Pago

Manufacturers and distributors of a wide range of office furniture and associated products for the corporate and commercial markets.

PACKAGING CLOSURESAfcom-GE HudsonBuffalo Executape

Leading distributors and manufacturers of packaging closures, strapping, tape, nailing, stapling and stretch film.


Business units Material issues Mitigating actions

Afcom and Seating Competition from cheap Chinese imports. Focus on balancing reliance on imports with support to local manufacture.

Voltex Electricity shortage in South Africa. Promoting energy-efficient products, specifically in the lighting sphere.

All Skills shortages. Providing adequate and appropriate training to generate a pool of skills for the future.

Various Increasing fuel prices. Improving operational efficiencies in the distribution line.

All Managing the impact of HIV/Aids in the workplace.

Promoting HIV/Aids awareness and prevention programmes and access to assistance.


Indicator 2004 2005 2006

Revenue (R’000) ✦ 5 643 160 6 722 172

Trading profit (R’000) ✦ 383 284 483 320

Employees 6 348 6 628 6 976


Training spend per employee (R) ✦ 767 1 698

% of employees attending HIV/Aids training ✦ ✦ 15,4




BEE procurement (R’000) ✦ 1 159 402 1 807 164

BEE procurement as % of discretionary spend ✦ 30,6 48,7

CSI spend (R’000) ✦ 2 341 3 048


– Where divisional structures changed, figures were restated to allow comparison and have been adjusted to exclude disposed/closed businesses.– 2004 financial figures have not been provided due to restructuring and IFRS.– Employee-related data includes non-permanent employees.– Health and safety indicators have changed.– Empowerment data is for South Africa only.✦ Information not available.

76


Most business units have obtained an “A” empowerment

rating and all units strive to improve ratings. BEE

performance has improved against most scorecard

indicators. Equity imbalances at junior and middle

management levels have improved, but remain a challenge

at senior management levels.

Voltex has patented an energy-efficient mining light which is

attracting increasing demand from major mining companies.

Voltex works in association with Eskom to facilitate national

energy-saving initiatives, as demand for electricity in South

Africa threatens to outstrip supply.

The national skills shortage presents an enduring

challenge, exacerbated by technical increases in the

products and solutions offered by business units. Diverse

skills development programmes are implemented and a

management cadet programme aims to develop HDIs as

future leaders. Training spend increased significantly, notably

at Waltons which spent an additional R1,7 million.

Management of HIV/Aids in the workplace is another

principal challenge and area of focus.

Regrettably there was one fatality. An employee of Voltex

was hijacked and killed on his way to a company conference.

ECONOMICS

Industrial products, packaging closures, adhesive tapes and

commercial supplies were consolidated as a single division.

Revenue increased 19,1% to R6,7 billion (2005: R5,6 billion)

while trading profit rose by 26,1% to R483,3 million

(2005: R383,3 million). There was significant growth in

electrical distribution and the incorporated commercial

business units. Import pressures kept margins under pressure

in several areas, especially at manufacturing operations.


4 Dauphin: Complies strictly with the ISO 9001 system.

4 Seating: ISO 9001 accredited; the quality system is audited

every six months by external auditors.

4 Cecil Nurse: Performance agreements are used to

formalise supplier service and quality standards.

4 Voltex: Ensures that only SABS approved product is

distributed.

4 Kolok: Purchases from recognised world brands that produce

according to ISO 9001 and ISO 14002 or equivalent.

4 Packaging Closures: There are no accredited management

systems in place, but most principals are ISO 9000 and

ISO 14000 accredited. This is relevant to many customers,

specifically those that use Afcom or Buffalo products in

their exported goods.


Many business units have acquired an empowerment rating,

in most cases an “A” rating. The broad-based approach to

empowerment is better understood but needs to be further

embraced. In some sectors of the economy, in particular

among the municipalities, business units need to be more

persuasive in communicating BEE credentials.

Bid Industrial and Commercial Products organises “supplier

days” as occasions to communicate with suppliers about the

benefits of an improved BEE profile.

Business units have a five-year rolling employment equity

plan which is reviewed annually. There is steady progress

towards achieving transformation targets. Renewed efforts

are under way to address continuing imbalances at senior

management level.

Waltons achieved a bridgehead into the public and

parastatal sector, confirming growing acceptance of Bidvest’s

BEE credentials. Waltons has established a buying forum

Divisional reviews



comprising buying personnel from all of the Waltons regions

as well as personnel from the retail and commercial divisions.

The forum aims to increase value within the supply chain,

notably in the performance of suppliers, based on quality,

price, service and BEE compliance.

Voltex was awarded an “A” BEE rating from Empowerdex,

Transnet and the South African Mining Preferential

Procurement Forum (SAMPPF).

Voltex and Kolok, as part of enterprise development

activities, provide extended credit terms to some black-

owned customers who do not have sufficient collateral to

obtain cash flow funding from financial institutions.

Empowerment ratings


Voltex ✦ A

CN Business Furniture

A A

Contract Office Products

BBB Being re-rated

Kolok BBB A

Waltons Stationery BBB Being re-rated

Seating C Being re-rated

Dauphin ✦ B

Afcom & Buffalo ✦ Being rated

Berzack Brothers ✦ A

Bellco ✦ A

WORKFORCE

Bid Industrial and Commercial Products employs

6 976 people, of which Voltex and Waltons each employ over

2 000 employees.

Permanent employees qualify for standard company benefits

including a pension or provident fund, medical aid cover

and leave, as legislated. Some companies offer staff bursary

schemes for children and assistance with study loans.

Business units do not have formal systems to measure

employee satisfaction levels. Some companies conduct

employee evaluation interviews where management

encourages staff to raise concerns and make suggestions for

improvements in the workplace.

Health and safety

Bid Industrial and Commercial Products comprises

predominantly trading companies which have limited health

and safety risks in the workplace. Employees of selected

business units work in a light-manufacturing environment. All

business units have a health and safety committee to monitor

and manage health and safety systems and standards in the

workplace. There were no fatalities or reportable incidents

this year.

Voltex has an OHS Act manual which provides guidance

to branches on establishing and maintaining systems.

Management courses are held to ensure requirements are

understood and an internal audit department conducts random

visits to premises to review procedures and paperwork. Health

and safety is a focus area for training.

Creating energy-saving work for black-owned contractors

Voltex Lighting is an Energy Service Company (ESCO)

accredited by Eskom’s Demand Side Management (DSM)

division. The aim is to identify significant energy-saving

opportunities within industry and government. Voltex

Lighting conducts energy audits to identify opportunities.

The business supplies the energy-saving luminaires and is

responsible for their installation. Voltex Lighting subcontracts

the installation to black-owned electrical

contractors whose fees represent a

significant portion of the total project fee.

Project fees are typically from R150 000 to

just over R1 million.

78

Health and safety procedures at Packaging Closures’ six

factories are guided by Voltex and monitored by an external

company.

Contract Office has banned smoking on the premises following

discussions and an audit by the Department of Health.

HIV/Aids

The impact of HIV/Aids in the workplace is a significant concern.

The disease is believed to be responsible for increasing levels

of staff absenteeism. Concerted efforts are necessary to ensure

that HIV/Aids is effectively managed.

HIV/Aids awareness and education programmes are

undertaken at regular intervals. Training is provided internally

and externally. Most companies distribute condoms and

provide direct or indirect assistance with counselling,

confidential voluntary testing and access to treatment services.

The decentralised branch network of business units makes it

challenging to determine the extent of the impact of HIV/Aids

in the workplace. Some companies conduct research to

determine levels of prevalence: CN Business Furniture

established that approximately 12% of its employees are

HIV positive. At Kolok, 121 members of staff were tested of

which 15% were positive.

Waltons contributes annually to the HIV/Aids Business

Bannerthon and was awarded a gold medal for the company’s

commitment and contribution to HIV/Aids programmes.

Following an HIV/Aids knowledge, attitude and practice

(KAP) survey conducted by the Voltex training and

development department, in which over 500 employees

participated, HIV/Aids training programmes and internal

systems have been enhanced to address weaknesses

identified. Revised policies ensure absolute confidentiality

in the workplace with regard to HIV/Aids issues. Voltex

has promoted greater commitment from management to

support employees and interventions.

Seating has established an HIV/Aids clinic in Queenstown.

In conjunction with the organisation Right to Care,

Seating encouraged VCT uptake among its employees.

Approximately half participated in the prevalence testing.

Employees have access to ongoing counselling services

at the clinic and Seating is seeking approval from the

Department of Health to distribute ART.

Training

Bid Industrial and Commercial Products pursues an

aggressive skills development strategy to meet the enduring

challenge of skills shortages. This process and diversity

management programmes throughout the business units to

manage skills retention, assist in achieving equity objectives.

Certain technical fields are becoming progressively more

complex and business units are increasingly becoming a

consultant and partner to customers, offering optimum

products and solutions. In this environment, the quality of

employees is a source of competitive advantage, demanding

appropriate investment in training and the development of

specialist staff.

The Voltex training and development department is

provisionally accredited with the Wholesale and Retail

SETA and piloted specific skills development modules

are in the process of being accredited. The department

conducts an analysis at each of the 18 businesses that make

up Bid Industrial and Commercial Products, to establish

training requirements in relation to business needs. These

recommendations are discussed with managers and training

interventions are implemented accordingly. Systems are in

place to evaluate return-on-training investment and identify

areas for improvement.

Divisional reviews



Voltex has a management cadet programme which aims to

nurture identified future leaders within Bid Industrial and

Commercial Products.

4 Waltons: Accredited as a training provider with the

Wholesale and Retail SETA. Waltons launched a sales

academy which aims to generate a pool of skilled sales

staff and offers HDIs who wish to pursue a career in sales

the opportunity to attend a skills-bridging development

programme. A management development programme,

based on best practice assessment strategies, aims to

identify and develop candidates with talent and distinct

potential.

4 CN Business Furniture: Training needs are structured

around five job families: sales and design, IT and

administration, receiving and warehousing, picking and

dispatch, and installation. One-year learnerships are

offered to technical staff and an in-house management

development mentorship programme is in place.

4 Dauphin: Provides ongoing job-specific training and offers

ABET training to interested employees. Twenty employees

are presently participating in the programme.

4 Kolok: Focuses on sales and customer-related training.

Product-specific training is generally provided by suppliers.

Tertiary education support is provided for staff members.

4 Seating: To address low levels of literacy among the

workforce, there is an emphasis on ABET specific skills

development programmes related to job requirements.

Other training programmes include MBA, accounting,

production management and quality management.

COMMUNITY

Customers

The expanded division has extended its services as a

supplier to offer specialised consulting services to customers.

Business units interact with customers on a regular basis

with the aim of ensuring high levels of customer satisfaction.

Complaints are generally handled at branch level by the

relevant manager. Some companies obtain informal customer

feedback while others conduct random telephonic surveys or

send out questionnaires.

CN Business Furniture has customer relationship

management software to enhance customer relationships.

The business strives to educate customers on the benefits

of improved ergonomics and to improve customer service

levels. Symbiotic service agreements are formalised with

major suppliers, focusing on quality, delivery, exclusivity and

the development of long-term relationships. Customers are

telephoned before and after the delivery and installation

process to determine customer satisfaction and remedy any

concerns.


CSI initiatives are managed at branch level and support

local communities in the regions of operation. This typically

involves donations or sponsorships with a focus on education

programmes. A more formal approach is being adopted

towards CSI activity with the aim of identifying and driving

initiatives that are centrally co-ordinated and managed

across the division. Many companies offer tertiary education

support for staff members.

4 Kolok: Supports the Avril Elizabeth Home for mentally

handicapped people with donations and assistance with

fundraising activities.

4 Dauphin: Supports education and mentoring programmes

for children of members of staff and in the broader

community.

4 Seating: Assisted a local community to establish a soccer

field and playing ground. The business supplies schools

with furniture, supports community-based garden projects

and makes donations to Heart of Healing.

4 Waltons: Supports SMME organisations and projects

through sponsorships, infrastructure development and

skills transfer. Projects include support for: the Middelburg

80

Care Village for 120 HIV positive orphaned babies; the

Silversea School in Tzaneen – a three-room school catering

for the needs of farm children; and the training of teachers

who assist disadvantaged children. Waltons donates

computers and printers to needy causes and supports

nature conservation initiatives.

ENVIRONMENTAL

Bid Industrial and Commercial Products comprises traders,

assemblers and light manufacturers. Business units respect

environmental legislation and are committed to operating in

a sustainable, socially responsible fashion without wasteful

use of resources.

4 Voltex: An active participant in Eskom’s energy-saving

initiatives and committed to promoting energy-efficient

products, specifically in the lighting sphere, for which there

is increasing demand.

4 Waltons: An environmental policy and sound

environmental practices are communicated to customers.

Waste is responsibly removed. Suppliers are required

to maintain sound environmental practices. Company

vehicles generally use lead-free petrol.

4 Seating: Developed a range of eco-friendly chairs using

moulded foam seats and backs as opposed to traditional

plywood. The used oil from trucks is collected and

removed.

4 CN Business Furniture: Created realistic laminate wood

finishes to minimise the use of veneers. A flat-pack design

to reduce the size of packaged products results in lower

transport costs. Warehouse lighting in Johannesburg was

converted to energy-saving lights. An electrical analysis was

conducted to balance the three-phase loads in order to

reduce electricity consumption in most of the operations.

4 Kolok: Recycles packaging at its distribution centres,

achieving cost-savings estimated at R150 000 per annum.

4 Contract Office Products: Maintains a practice of

shredding documents for collection by waste companies

and recycles products where possible.

4 Afcom: South African waste import regulation precludes

the importing of recycled raw material which is 40%

cheaper than virgin material. Competitors, however, are

able to import finished goods made of such recycled

material at significantly lower prices.

Divisional reviews


Empowerment through entrepreneurship

Waltons KwaZulu-Natal provides ongoing support to the

Khanya Sewing Skills Centre for the development of rural

women. Operated by the Institute for Black Research, the

empowerment through entrepreneurship initiative provides

120 rural women each year with the opportunity to gain

literacy, numeracy and sewing skills over a six-month period.

Waltons has supported the project for five years through the

payment of trainer salaries, provision of learning materials

and funding of awards/graduation days held at Khanya.

Sales director Dan Chiorboli with the 2005 graduates from the Khanya Sewing Skills Centre. The graduation gowns, mortar boards and sashes were sewn by the students.


Voltex innovation lights up the way

Voltex identified an opportunity to promote energy

efficiency in the mining sector. The business designed

and patented a robust and energy-efficient mining

light which is adapted to fit into existing underground

cabling. Compliant with safety standards and local and

international quality standards, there is great demand for

this advanced system from major mining companies.

VML MINELIGHT VOLTEX LIGHTING

FEATURES AND BENEFITS

We reserve the right to change any Technical Data, Descriptions and Drawings without prior noticeVoltex Lighting P.O. Box 4403, Johannesburg 2000, Tel: (27 11) 622 4910 Fax.: (27 11) 616 9149 www.voltexlighting.co.za

IP54/65

To specify state:

LUMINAIRE - BRAND VOLTEXVML - ES - 113W ELB-110V orVML - NI - 113W ELB-110V VML - ES - 113W ELB-230V orVML - NI - 113W ELB-230V

CONNECTOR BOXVML – HAULAGE CONNECTOR BOX - BRAND VOLTEX

LAMP13 WATT COMPACT FLUORESCENT LAMP - BRAND OSRAMOSRAM DULUX D/E 13E/840 – 4 PIN

DESIGNED FOR UNDERGROUND CONDITIONS. The VML operates with separate electronic ballast and 4 pin 13 watt energy saving compact fluorescent lamp. VML – ES is adapted to fit into existing underground cabling and the VML – NI was designed in conjunction with the new haulage connector box for ease of installation.

• Unit is compact and lightweight• Ease of installation• Installed and removed with special key• Meets safety standards• Meets performance standards• High tolerance to voltage fluctuations • Compliant according to both local and

international standards• Available in 110 volt and 230 volt versions• IP 54/65

MATERIALS/FINISHBody: Polycarbonate-non toxic : flame retardant : houses electronic ballast

Enclosure : Polycarbonate : impact resistant with internal longitudinal prism surface structure

INSTALLATION/MOUNTINGVML/ES is inserted into and existing “EMES” electrical box in the same manner as a conventional GLS lamp. The luminaire has been designed to make installing and removal via the insertion of a special tool.

VML/NI base is equipped with two clips to secure in new connector box. Electrical connection is made to the connector box by means of two spring connectors pins sealed with an O-Ring.

HAULAGE CONNECTOR BOXThe connector box is wired into a conventional multi-lamp lighting circuit, supplied by either single or three phase and neutral cable.

The connector box is supplied with earth wire connected to armoured cable, pierced wire connection and clamp block. The connector box shall be supplied with two protective plugs to protect the pins from any form of corrosion.

SPECIFICATIONS

VML - ESVML - NI

VML - ESVML - NI

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Divisional reviews

Bidpaper Plus

Bidpaper Plus Products and services

PRINTING AND RELATED

Personalisation and MailLithotech Afric Mail CapeLithotech Afric Mail JohannesburgLithotech Afric Mail Durban

Provides a full print to post solution incorporating laser imaging and inserting.

LabelsLithotech LabelsLithotech Manufacturing SpartanOzalid

Produces a full range of self adhesive labels and label papers.

Printing and ConversionLithotech Manufacturing CapeLithotech Manufacturing PinetownLithotech Listings and LogisticsPhakama PrintGlobe Stationery ManufacturersSilveray ManufacturingKolok Africa

Manufactures a wide range of forms, cheques, tickets and commercial print. Also a major producer of envelopes and a broad range of paper stationery products.

Sales and DistributionLithotech CorporateLithotech SalesLithotech Exports

National warehousing and distribution of all above products.

Neil Birch Chief executive

Sustainable development at Bidpaper PlusThe business strives to balance continued growth in earnings with the market’s ability to fuel that growth, while ensuring that natural and human resources are respected and nurtured. In the interests of both the market and the natural environment, the business aims to rely increasingly on the use of electronic communication instead of paper.

Bidpaper Plus is the South African market leader in print production and value-added fulfi lment services. Core competence in business forms manufacture, label production and personalisation and mail is complemented by strategic growth into digital and electronic solutions. The manufacture and distribution of high-quality stationery augment an extensive range of services. Bidpaper Plus has a broad national footprint and exports its products and services to markets in Africa and beyond.


Bidpaper Plus Products and services

STATIONERY DISTRIBUTION

Wholesale Stationery DistributionSilveray Statmark Company Distributes an extensive range of business and scholastic stationery to the trade

and retailers.

ALTERNATIVE PRODUCTS

Electronic TransactionsEmail Connection High-volume electronic bill presentment and provider of electronic communication

solutions.

Consulting Services and IT solutionsLithotech Solutions



All Skills shortages. Staff training, internal promotions and learnerships are pursued, to develop and retain required skills.

Manufacturing Risk of injury when working with equipment.

Extensive precautions taken to reduce risk of injury, in strict compliance with the OHS Act.

Printing plants Exposure to hazardous chemicals. Regular medical checks conducted to ensure that levels of toxicity absorbed are not harmful.

Distribution Increasing fuel prices. Major drive to optimise efficiencies in the distribution chain.


Indicator 2004 2005 2006

Revenue (R’000) ✦ 1 333 805 1 747 690

Trading profit (R’000) ✦ 176 928 201 980

Employees 3 885 3 969 4 073

Total training spend (R’000) 637 1 064 1 671

Training spend per employee (R) 164 268 410







CSI spend (R’000) 83 114 240



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Bidpaper Plus


The consolidation of the Group’s print capabilities in one

division enhances production of the entire paper-based

product range. The respective distribution responsibilities

of Lithotech and Silveray Statmark remain focused on their

existing markets. Looking ahead, the ongoing migration

to non-paper-based electronic alternatives will continue to

justify the “plus” aspect of the division.

This year was characterised by a number of medium-term

contract awards and renewals and the clear adoption of

e-mail as an acceptable medium for business communication.

Modest job growth was achieved within the mailing operations.

A principal challenge is the shortage of skills in the industry.

Bidpaper Plus is developing a more formal approach to skills

development, with increased training spend.

Measures to improve environmental performance are

continually pursued. However, it is often difficult to motivate

developments that are costly and have not been adopted by

competitors or industry regulators.

A principal focus in terms of sustainability is to address

concerns about the impact of HIV/Aids on the workforce. To

gain a better understanding of the situation, efforts need to

be managed more specifically, within a project framework.

ECONOMICS

There has been a focus on optimising production and new

investment to expand the product range and reinvigorate

segments of the brand portfolio. In a challenging and

competitive trading environment, a measure of growth was

achieved in trading income and revenue. Revenue grew

by 31% to R1,7 billion (2005: R1,3 billion) and trading profit

increased by 14,2% to R202,0 million (2005: R176,9 million).


Lithotech Corporate is ISO 9001 accredited. Internally

developed quality, health and safety systems are in place

to ensure quality standards that dovetail with the levels

expected by ISO. Internal measures to monitor performance

standards include a quality logging system.

Lithotech Afric Mail conducts most of its business under

service level agreements which govern contract quality

standards. Where required by major customers, procedures

are developed to suit requirements, which may include safety

and security criteria. These procedures may be subject to

audits by external parties. Suppliers are required to provide

certificates on receipt of goods and products are inspected

for quality standards.

Companies comply with SABS standards where applicable.


Lithotech, which embodies a large portion of the division,

has improved its independent empowerment rating from

“BBB” to “A”. Momentum will be used to drive a more

formal process towards acquiring an empowerment rating

for Silveray Statmark, where there is a greater need for

transformation.

Production units have the most discretion in terms of

procurement spend. Forms manufacturing is the biggest

external buyer and currently purchases approximately 50%

of its products from BEE companies. On a monthly basis,

factories submit their procurement figures and targets are set

on a branch or production unit basis. Supplier BEE levels are

continually reviewed and suppliers are encouraged to obtain

an empowerment rating.

There has been encouraging progress in improving the

equity profile of the workforce below management level

and there has been greater participation from HDIs at senior

management level.

A principal focus is the development and promotion of HDIs.

Attracting and retaining experienced black professionals

is an ongoing challenge. A legacy of suppression of skills

development has resulted in there being a small pool of HDIs

with specialised skills in the industry.


involves standardised procedures and regular meetings

which are fully documented and are subject to internal and

sometimes external auditing.

Members of staff work in a light-manufacturing environment

which involves regular work with high-speed machinery, knives,

guillotines, forklifts, heavy boxes and heavy paper rolls. There is

some exposure to potentially harmful chemicals and solvents.

Extensive precautions are taken to reduce the risk of injury.

Depending on the size of the manufacturing site, assistance

from an occupational practitioner is available on-site, or as a

contract facility.

External suppliers undertake regular air emission tests and

water contamination tests to ensure that these remain within

regulated levels. The occupational practitioner regularly carries

out medical examinations of employees to ensure that any

levels of toxicity absorbed in the body are not threatening.

HIV/Aids

Business units have an HIV/Aids awareness programme

which is communicated to members of staff. The availability

and extent of additional educational and support initiatives

varies. Concerns about the increasing impact of the disease

in KwaZulu-Natal, in particular, have prompted a drive to

establish the extent to which the disease is prevalent in

the workplace. Although voluntary testing is offered and

encouraged, it is proving difficult to persuade members of

staff to make use of the facility.

Training

Sustained investment in skills development is essential. It

is an ongoing challenge to attract and retain experienced

professionals in a highly competitive market for a limited pool

of skills.

Following the mergers and acquisitions over the last two

years, Bidpaper Plus has stabilised and is establishing a

more formal approach to skills development. A skills audit

was conducted in order to identify skills requirements and

Employee-owned Phakama Print

Phakama Print is an empowerment initiative of Lithotech,

established in 2003. The sheet-fed printing business is 40%

owned by Lithotech and the remaining 60% shareholding

is distributed among Lithotech employees, making the

business effectively more than 50% black-owned. Phakama

Print was rationalised. The Cape Town operation was

closed and some of its components were moved to

Gauteng to form one consolidated plant. The business

employs 80 staff and has revenues of approximately

R50 million. Phakama also prints Bidvoice, Bidvest’s internal

communication publication.

WORKFORCE

Bidpaper Plus employs 4 073 staff members, of which

approximately 3 800 work for Lithotech companies, 200 for

Silveray Statmark and 50 for Kolok Africa.

Standard policies relating to the workplace are published in

electronic format on the Lithotech website and are available

to employees through departmental secretaries. A range

of standardised employee benefits is offered to permanent

employees and a process is under way to introduce benefits

for temporary staff. There are no formal performance

appraisal systems, though most companies conduct informal

performance reviews at least annually.

The label companies have worker and management forums

which meet monthly to address employee grievances.

There has been an encouraging reduction in the number of

complaints and grievances.

Lithotech Afric Mail has introduced a savings plan and risk

benefits for staff members who have not had a pension.

Lithotech Afric Mail in Cape Town employs 50 long-term

contractors with disabilities, all of whom are enrolled in

services SETA learnerships.

Health and safety

Strict compliance with the OHS Act is ensured in all

production environments and warehousing facilities. This

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Divisional reviews

Bidpaper Plus

opportunities for development. Members of staff showing

distinct potential are identified, developed and promoted, as

a standard approach.

In addition to the 1% skills levy, the division invests 1% of payroll

on training. The majority of training is conducted in-house with

an emphasis on supervisory training. Over 70 employees were

nominated for training at various levels of competency.

All supervisors and managers of operations receive

training in sound labour relations practices to enhance staff

management capabilities.

Most technical staff training is structured as part of the

media advertising, publishing, printing and packaging SETA.

These industry-specific training courses offer trainees both

on-the-job as well as classroom training. Approximately

50 apprenticeship learnerships are in progress.

A two-day sales conference is held annually, focusing

on product introduction and sales training. Senior level

managers travel overseas to attend trade shows and visit

suppliers, in order to remain informed of best practice trends

and developments.

Employees are offered opportunities for tertiary level

education and approximately 20 members of staff are being

assisted in working towards acquiring a diploma or degree in

a subject which is generally job-related.

Members of staff with disabilities have the opportunity to enrol

for learnership programmes in terms of the services SETA.

COMMUNITY

Customers

All major customers are subject to service-level agreements

and large contract businesses are regularly reviewed by

management. Label companies’ management visits all major

clients on a weekly basis to assess practices and ensure

satisfaction. Lithotech Afric Mail senior personnel have

annual review meetings with customers to measure customer

satisfaction and discuss new business offerings and trends.

The manufacturing companies have a formal system of

logging and measuring customer complaints. These are

reviewed weekly and action is taken to reduce levels of

complaints. Sales and distribution log customer complaints

on quality issues on a national electronic control system

which automatically routes the complaints to the relevant

management personnel for action and resolution.


The principal focus areas of community investment are an

HIV/Aids awareness, education and outreach programme;

Lithotech supports South African creative talent

Lithotech is proud to play its part in recognising, rewarding

and fostering creative excellence in South Africa, as a

sponsor of the Pendoring Awards and the Loeries Awards.

Lithotech’s direct mail business receives the support of

many advertising agencies and organisations involved

in direct marketing in the country. As a sponsor of these

prestigious national advertising organisations, Lithotech

appreciates the opportunity to give its support to creative

talent in the South African advertising community, both

English and Afrikaans. The efforts of the industry as a whole

have contributed significantly to Lithotech’s success as the

major producer of mailed communications in the country.

The regional autumn Pendoring Afrikaans Advertising Awards, sponsored by Lithotech, were recently held at the Castle in Cape Town, showcasing South Africa’s most talented individuals from the competitive world of Afrikaans advertising.


The safe handling and responsible disposal of chemicals is

undertaken in accordance with legislative requirements and

best practice. Levels of emissions are monitored and, where

necessary, corrective action is taken. Uncoated paper waste

is removed by a recycling company. Coated paper such

as silicone-treated material is removed and disposed of in

official land-fill dumps. Steel from equipment including dies,

print rollers, plates and shafts that cannot be refurbished,

is sold to metal merchants for recycling. Waste is recycled

where possible. Nonetheless, the production processes

predominantly require virgin materials.

The factories have a large electricity requirement. Electricity-

consuming equipment is switched off after hours. Chemicals,

inks and adhesive waste is stored in underground tanks

and removed by specialist waste removal contractors, who

provide disposal certificates. The availability of more benign

chemicals and inks (such as soya-based or bio-degradable

inks) is explored on an ongoing basis.

Lithotech Afric Mail activities rely extensively on the use

of paper. Paper is obtained from reputable mills with

responsible environmental management and monitoring

policies. To minimise paper usage, clients are encouraged

to use electronic communication. Paper and corrugated

packaging board are recycled.

There is a major drive to optimise efficiencies in the

distribution line.

a secondary education bursary scheme for children of

employees; and a co-operative educational programme.

Support is given to charitable organisations that provide

opportunities for disabled and handicapped individuals.

Managing directors of business units are tasked with

identifying community projects to support in the regions in

which they operate. Where possible, members of staff are

encouraged to become involved.

The Lithotech website has a section dedicated to CSI which

provides a summary of current projects supported by various

business units.

ENVIRONMENTAL

Production units have the most extensive impact on the

environment. Several printing and paper conversion

companies work with a variety of hazardous printing-related

chemicals. Chemicals, inks and adhesives are supplied with

relevant certificates. The use of hazardous substances in

production is avoided wherever possible.

Nkosi Johnson Haven

Bidpaper Plus will be driving a project to refurbish facilities

in need of repair at the Nkosi Johnson Haven near Berea, a

home for HIV/Aids orphans and children living with HIV/Aids.

A long-term relationship will be developed with the centre,

whereby members of the Haven will be contracted to provide

HIV/Aids awareness training at Bidpaper Plus companies.

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Bid Auto

Bid Auto Products and services

McCARTHY MOTORS HOLDINGS

Vehicle franchises include: Alfa Romeo, Audi, BMW, Mini, Seat, Land Rover, Volvo, Nissan, Fiat, Peugeot, Jeep, Chrysler, Chevrolet, Mercedes Benz, GAZ, Smart, Mitsubishi, Opel, Isuzu, Renault, Toyota, Lexus and Volkswagen. Truck franchises include: Mercedes Benz, Nissan Diesel, Hino, Renault and Iveco.

Over 100 dealerships in major urban areas selling upwards of 85 000 new and used vehicles and offering comprehensive after-sales parts and service back up

McCarthy Pre-owned Offers a wide range of quality used vehicles, all with comprehensive warranties and other peace-of-mind benefits.

McCARTHY FINANCIAL SERVICES

McCarthy FinanceMcCarthy Insurance Services

A one-stop service that provides customers with tailor-made finance allowance packages, short-term insurance products and client protection policies.

McCARTHY FLEET SERVICES A specialist division catering for the specialised purchasing and finance needs of corporate fleet owners.

CLUB MCCARTHY Club McCarthy is a loyalty programme that offers members a broad range of special benefits.

McCARTHY CALL-A-CAR South Africa’s leading online motor retailer.

ELIANCE A business communications agency at the forefront of IT and marketing. Offers cutting-edge CRM, website, multimedia, strategy, design and advertising solutions.

BURCHMORE’S AUCTIONS A national vehicle auctioneer, regarded as South Africa’s leading authority on vehicle auctions due to the high volumes of vehicles it auctions per year and the experience of its staff.

BUDGET RENT A CAR A fast-growing car rental company with over 60 car rental locations in South Africa, Namibia and Botswana, supported by sub-licensee franchises in Lesotho and Mozambique.

Brand Pretorius Chief executive

Sustainable development at McCarthyMcCarthy is continually challenged to meet and exceed OEM’s (original equipment manufacturer) rising performance expectations, which include social, BEE, service quality and environmental aspects. This places a high demand on the quality of labour skills. McCarthy, in the face of chronic country-wide skills shortages, invests heavily in developing human capital in the work place and in the community as part of its CSI

initiatives.

Bid Auto

Bid Auto is South Africa’s second largest motor retail organisation, with nationwide representation across more than 100 wholly owned dealerships. Its activities span vehicle import and distribution, new and used vehicle sales, parts and service, financial services and fleet support, vehicle auctioneering, online retailing and vehicle and truck rental. McCarthy represents most vehicle marques and is the importer and distributor of all Yamaha products in South Africa.


Bid Auto Products and services

BUDGET VAN RENTAL Offers a wide selection of vehicles for short-term rental through its branches in the major cities across South Africa.

YAMAHA DISTRIBUTORS The sole importer and distributor of the full range of Yamaha products and parts in South Africa.

MCCARTHY VEHICLE IMPORT AND DISTRIBUTION

GAZ Southern AfricaAutoChina SA

The sole importer and distributor of the Russian GAZ range of commercial vehicles in southern Africa and, as from March 2007, a full range of Chinese vehicles through its AutoChina division.


Material issues Actions

Management of HIV/Aids in the workplace. A comprehensive wellness programme incorporates HIV/Aids awareness activities and support in accessing counselling and treatment.

Bidvest’s minority ownership policy conflicts with the goals of some OEMs – specifically in the area of BEE ownership at dealership level – which has resulted in margin sacrifices and restrictions on additional dealerships.

On an exception basis, where incremental growth opportunities exist, McCarthy has introduced BEE ownership at dealership level.

Difficulty in attracting and retaining HDIs at senior level. This is mitigated through a management development programme, improved recruitment activities and succession planning.

Talent availability, attraction and retention. McCarthy is the leading developer of talent in the motor retail industry and continually monitors employee satisfaction levels and remuneration structures.

Lack of new roads and deteriorating road infrastructure may impact on vehicle sales.

This issue is raised publicly through McCarthy’s public relations activities.

Increasing fuel prices, stricter emission standards and climate change-related mitigation regulations are likely to depress sales of certain vehicle categories.

It is expected that McCarthy’s broad vehicle-product mix will minimise this medium-term impact.


Indicator 2004 2005 2006

Revenue (R’000) ✦ 13 628 958 16 197 055

Trading profit (R’000) ✦ 474 672 621 264

Employees 4 906 5 289 5 795




Injury rate ✦ ✦ 0

Lost-day rate ✦ ✦ 0




CSI spend (R’000) 1 463 1 564 2 544



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Bid Auto


As South Africa’s second largest motor vehicle retailer,

McCarthy plays a significant role in supplying and maintaining

the country’s new and used vehicles. Annually, McCarthy

sells 85 000 new and used vehicles and services in excess of

700 000 motor vehicles.

To meet rising OEM standards and to expand and upgrade

McCarthy’s dealership infrastructure, landlords invested

R98 million in six new and refurbished facilities. For the

coming year, R280 million has been earmarked for 15 new

and refurbished facilities.

McCarthy’s principal challenge is identifying and recruiting

appropriately skilled employees. Economic growth is

outstripping the country’s supply of labour. Government

and the private sector need to work together to pro-actively

tackle this issue. McCarthy continues to invest heavily in

developing its human capital and is the leader in the motor

retail sector. A record number of 12 423 training days was

achieved. The number of McCarthy and external technical

trainees currently trained has risen to 1 100 which is about a

third of all such trainees in the automotive industry.

A continuing frustration is that developers of human capital,

including McCarthy, are being talent-raided and especially

highly skilled black employees are being lost. McCarthy

monitors employee satisfaction levels and remuneration

structures, to minimise loss of personnel. The careers at

McCarthy e-recruitment initiative will strengthen McCarthy’s

ability to recruit new talent. A corresponding internal initiative

will improve to process of identifying and advancing internal

talent.

McCarthy’s Rally to READ CSI programme continues to excel

and received the prestigious Mail & Guardian 2005 Investing

in the Future award.

ECONOMICS

Due to favourable macro-economic conditions and enhanced

vehicle affordability, the new vehicle market performed very

well. McCarthy optimised favourable trading conditions and

recorded its best ever year. Total vehicle sales approached

85 000 units, an increase of nearly 13 000 year-on-year.

Revenue reached R16,2 billion (2005: R13,6 billion), a

rise of 18,8%, while trading profit increased by 30,9% to



McCarthy dealerships have systems in place that meet the

stringent environmental, quality, customer service, and

health and safety standards set by OEMs. These systems are

regularly audited for compliance by McCarthy’s internal risk

control department, as well as by OEMs. Non-compliance

with OEM standards can result in profit margin penalisation

and even loss of dealerships. An independent, specialist

organisation is contracted to conduct six-monthly health

and safety audits, which include quality and environmental

aspects.

Forsdicks BMW Tygervalley was the first dealership in the

country to implement BMW’s rigorous Quality Management

Accreditation, covering environmental, social, health and

safety, and customer management issues.

A comprehensive risk management solution, called

BarnOwl, has been used since 2001 to enhance business risk

management.


McCarthy’s empowerment rating remains “BBB”.

McCarthy has appointed its first black executive director,

Lazola Madikizela. In his role as commercial director,


alignment of employee codes and policies with McCarthy’s

core values and employee behaviour. Consultative

committees are tasked to follow up in areas of identified

need. There has been a consistent upward trend in

satisfaction levels over the last eight years.

Permanent employees qualify for retirement, health-related

insurance, disability and maternity benefits.

Health and safety

Vehicle service staff, about 31% of employees, are exposed

to the risks associated with motor vehicle workshops.

McCarthy complies with the OHS Act and strict OEM safety

requirements, ensuring compliance through quarterly

meetings of its health and safety committee, monthly

inspections, appropriate employee training and independent

audits. There were no significant on-duty accidents or injuries.

Minor health and safety incidents were investigated through

to completion of appropriate corrective actions.

HIV/Aids

Actuarial research indicates that about 7% of staff is HIV positive

and just under 1% Aids positive. The company has an HIV/Aids

policy and a well-established wellness programme. Activities

have included: monthly information leaflets attached to payslips,

posters displayed in the workplace, a national

HIV/Aids quiz, an annual Wellness Week, in-dealership reference

material, a condom distribution programme and a wellness

co-ordinator in each business unit to provide guidance.

About half of McCarthy staff participated in the 2005

HIV/Aids staff quiz, which revealed that about 60% of those

who participated know their HIV/Aids status. This quiz will be

repeated shortly.

Training

McCarthy is the leader in the motor retail industry for

innovative and comprehensive training programmes and

Lazola fulfils various commercial functions as well as guides

Bid Auto’s BEE initiatives.

McCarthy continues to be the industry leader with its training

and education programmes, which largely benefit HDIs.

Attracting and retaining suitable HDIs at senior management

level remains an ongoing challenge despite significant efforts.

The McCarthy procurement office has grown its discretionary

expenditure with BEE suppliers from R20 million in 2001

to R170 million in 2006, in excess of 12,7% of the division’s

discretionary spend.

Enterprise development – from concept to success

The Busa Toyota Hillcrest dealership in KwaZulu-Natal

was established as a greenfield BEE joint venture in 1998.

Following a six-year development and growth period, the

BEE owner elected to become independent in 2004. Busa

Toyota Hillcrest, which still makes use of McCarthy’s state-

of-the-art management information systems, continues to

operate with great success.

McCarthy has since 2004 been mentoring a black-owned

SME, Afrisigns, which employs five people and provides

vehicle registration and number-plating services in

KwaZulu-Natal.

WORKFORCE

McCarthy employs 5 795 staff across its business units in

the major urban centres in South Africa. Despite its highly

dispersed workforce, McCarthy has been successful in

establishing staff management, training and communication

systems that effectively reach all employees. The company

has an intranet to enhance communication with its workforce.

Employee satisfaction levels and performance against key

values are measured annually using a standard 14-point

questionnaire, in which upwards of 80% of employees

participate. The employee satisfaction survey assesses

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Divisional reviews

Bid Auto

has achieved a number of firsts in this area. A wide range

of technical, non-technical and managerial programmes

is offered spanning NQF levels 1 to 5. Training is mainly

provided at Bid Auto’s three regional training centres, located

in Midrand, Durban and Cape Town. A total of 12 100 training

days were logged.

The business spent R10 million on skills development and

training this year, approximately R2 000 per employee.

Principal programmes include an Emerging Business Leader

Programme with 85% black participation, sales cadet

learnerships with 70% black and/or female participation

and technical learnerships, which are also offered to non-

McCarthy businesses. A mentorship programme is offered to

high-potential staff, most of whom are black, and 15 high-

potential McCarthy staff participated in the Bidvest Academy.

COMMUNITY

Customers

Comprehensive customer feedback systems are available

at dealership, franchise and corporate level and are used to

obtain individual and aggregated feedback. OEMs obtain

independent customer feedback following the purchase

of a new vehicle and subsequent warranty-based services.

Such feedback systems form part of distribution agreements

with OEMs and profit margins are often linked to customer

satisfaction ratings. Individual complaints are dealt with

by nominated staff members. Customer satisfaction levels

across all 20 marques represented by McCarthy are routinely

measured. The results are used to identify and address specific

problem areas and are to be linked to management bonuses.

McCarthy conducts satisfaction surveys among all its used

vehicle customers, which is unusual in the industry. Customer

ratings of used vehicle service have shown steady quarterly

increases following implementation of a revised rating system

a year ago.


The primary objective of McCarthy’s CSI projects is to

enhance the quality of school education by improving the

capacity of educators and the resources available to them.

McCarthy’s main social investment initiatives encompass:

4 Rally to Read programme reaching 35 000 learners. During

2006 the programme benefited 133 disadvantaged rural

primary schools and more than 35 000 learners.

4 McCarthy co-ordinated School Computer Centres project,

which has to date established 25 computer learning centres

at primary schools in the Durban region. The programme’s


in new and refurbished dealerships to separate oil from water.

An independent specialist organisation audits the adequacy

of oil waste disposal.

There is a growing trend towards recycling and refurbishing

brake and clutch linings and recycling aluminium and other

metal wastes.

Most European vehicle marques sold by McCarthy comply

with the Euro 4 and 5 standards, which restrict emissions from

engines and exhausts.

effectiveness is monitored by the project co-ordinating

committee, which includes the key sponsors.

4 In-kind donations to a variety of worthy causes and the

participation of a number of dealerships in individual

projects.

ENVIRONMENTAL

Dealerships have a variety of policies and procedures in

place which conform with OEM environmental requirements.

These policies and procedures govern recycling and the

appropriate handling and disposal of used motor car oil,

effluent and other disposables. Oil traps are being installed

The award-winning Rally to Read

The Rally to Read is a reading development programme

organised nationally by McCarthy with advertising and

educator skills support from the Financial Mail and the

Read Educational Trust respectively. The programme is now

in its ninth year and, due to the dedicated involvement of

McCarthy staff, was nominated the national winner in the

“Best Corporate Employee Investment Programme” category

of the Mail & Guardian 2005 “Investing in the Future” award.

The Rally involved 1 311 sponsor representatives utilising

438 vehicles in nine separate rallies countrywide. Just over

R4 million in cash was raised to support literacy programmes

that have reached 34 500 scholars in 133 rural schools.

Two-thirds of the funds were used to purchase reading books

catering to all levels of literacy development. The remaining

funds are being used to fund teacher training programmes

for 1 079 teachers. Additional donations of R1,8 million were

secured to cover other educational materials and services.

These included management training for principals, training

for district officials and principals on implementing a literacy

development programme in schools, science training courses

for teachers, science kits and stationery. Financial and non-

financial donations were received from 96 corporate and

individual sponsors.

Evaluations of Read-conducted literacy development

programmes have demonstrated that, after a two-year

intervention, the improvement in learner reading and

writing skills is four years and two years, respectively, ahead

of schools which are not involved in the programme. An

independent programme assessment is under way in the

rural schools which partner the Rally programme and will be

finalised following the 2007 Rally.

To date R21 million has been raised as part of this

programme and 408 rural schools have been supported by

the Rally for three years.

94

Independent assurance

Independent assurance report to the directors of Bidvest on the 2006 sustainability report

INTRODUCTIONWe were engaged by The Bidvest Group Limited (Bidvest) to provide assurance on the 2006 Sustainability Report (the report) with respect to:4 Aggregated Group data on Black Economic Empowerment

(BEE) procurement by rand value on page 12 and employment equity by race on page 98 (collectively referred to as the selected BEE data); and

4 Management assertions on page 30 in relation to the findings from the KPMG gap analysis over Bidvest’s sustainability management processes.

This report is made solely to Bidvest in accordance with the terms of our engagement. Our work has been undertaken so that we might state to Bidvest those matters we have been engaged to state in this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than Bidvest, for our work, for this report, or for the conclusions we have reached.

RESPONSIBILITIES OF DIRECTORSThe directors of Bidvest are responsible for the preparation and presentation of the report and the information and assessments contained within it, including the management assertions on the findings from the KPMG gap analysis; for determining the Group’s objectives in respect of sustainability performance and for designing, implementing and maintaining appropriate performance management and internal control systems to record, monitor and improve the accuracy, completeness and reliability of sustainability data from which the reported information is derived.

RESPONSIBILITY OF THE ASSURANCE PROVIDEROur responsibility is to express our conclusions to Bidvest, based on our independent assurance engagement, performed in accordance with International Standard on Assurance Engagements (ISAE 3000): Assurance engagements other than audits or reviews of historical financial information. This standard requires us to comply with ethical requirements and to plan and perform our assurance engagement to obtain limited assurance, expressed below, regarding the subject matter of the engagement.

BASIS OF WORK, CRITERIA AND LIMITATIONSThe procedures selected depend on our judgement, including the assessment of the risks of material misstatement of the subject matter and the purpose of our engagement. In making these assessments we have considered internal controls relevant to the company’s preparation and presentation of the selected BEE data in

the report, in order to design procedures appropriate for gathering sufficient evidence to determine that the selected 2006 BEE data is fairly stated and not misled. Our assessment of relevant internal controls was not, however, for the purpose of expressing a conclusion on the effectiveness of the company’s internal controls.

Bidvest applies the Bidvest Charter and BEE scorecard, which are based on the Broad-Based Black Economic Empowerment Act of 2003, as the criteria for determining the recognition and measurement of the selected BEE data. The reliability of BEE data is subject to inherent limitations given their nature and the evolving method for determining, calculating or estimating such data. This is demonstrated by the note on page 26 outlining the variation within the Group over the criteria for recognition of BEE suppliers. It is important to understand the selected BEE data and related statements in the report in the context of these limitations.

The Global Reporting Initiative’s sustainability reporting guidelines 2002 were used as the basis for assessing the management assertions on page 30 in relation to the findings from the KPMG gap analysis over Bidvest’s sustainability management processes.

We planned and performed our work to obtain all the information and explanations that we considered necessary to provide sufficient appropriate evidence to provide a basis for our limited assurance conclusion expressed below. The evidence-gathering procedures we carried out were more limited than for a reasonable assurance engagement, and, therefore, less assurance is obtained than in a reasonable assurance engagement. No assurance is expressed in relation to other information or assertions included in the report, not covered by our work performed.

We believe that our work performed as set out below provides an appropriate basis for our conclusions.

WORK PERFORMEDOur work on the selected BEE data consisted of:4 Obtaining an understanding of the systems used to

generate, aggregate and report the selected BEE data at the corporate office and divisional levels and five business units to assess the reliability of associated Group data;

4 Performing an analytical review of the selected 2005 BEE data aggregated at corporate office level and obtaining explanations for unusual trends;


4 Testing the accuracy of the aggregation process for the consolidated selected BEE data at corporate offi ce level; and

4 Reviewing the consistency between the selected BEE data and related statements in the report, in light of our fi ndings.

Our work on the management assertions in relation to the fi ndings from the KPMG gap analysis on page 30 consisted of:4 Conducting interviews with certain board members and

senior management at the Group and divisional levels to understand the relevance of sustainability to the businesses and the processes in place to manage and report on sustainability issues;

4 Obtaining an understanding of the “Bidvest culture”, reporting lines and core business functions including corporate governance and risk management, the operation of acquisitions and investment appraisal criteria, stakeholder engagement, human resources, training and incentivisation schemes.

4 Reviewing documents supporting management assertions over: the existence of health, safety, environment and community policies and programmes; and the extent to which sustainability issues are considered and managed as part of core business functions.

4 Reviewing the management assertions on page 30 to assess whether they are supported by our fi ndings and whether other related information in the report is consistent with those assertions.

CONCLUSIONBased on the work described above, in our opinion:4 we have no reason to believe that the selected BEE data

set out above for the year ended June 30 2006 is not fairly stated, in all material respects, on the basis of the Bidvest Charter and BEE scorecard.

4 we have no reason to believe that the management assertions on page 30 in relation to the fi ndings from the KPMG gap analysis over Bidvest’s sustainability management processes are not fairly stated on the basis of the Global Reporting Initiative’s sustainability reporting guidelines.

KPMG Services (Pty) Limited

Per PD NaidooDirectorJohannesburgOctober 2006

Independent review on the black economic empowerment shareholding in BidvestKPMG Services (Pty) Limited reviewed the BEE shareholding in Bidvest as at June 30 2006 and confi rmed the fi ndings of Empowerdex. A copy of their report can be

obtained from our website, www.bidvest.com

Pro-forma interest of Dinatla in the South African operations of BidvestKPMG has previously confi rmed the calculations in respect of the 23,33% pro forma interest of Dinatla in Bidvest, had Dinatla invested in the South African operations of Bidvest only, rather than making their investment at holding company level which includes the offshore operations. This is an historic calculation and does not change from year-to-year. The Bidvest Group Limited sustainability report 2006 can be obtained from our registered offi ce or

from our website, www.bidvest.com

96

Empowerment rating

Empowerdex rating definitions

General

BEE Black Economic Empowerment.

Black people A generic term which means African, Coloured and Indian South African citizens.

Status (Indirect empowerment)

Good broad-based contributors

The entity has shown exceptional contribution in some areas of BEE, and average contribution in other areas.

Fair broad-based contributors

The entity has shown an average overall contribution towards BEE.

Unsatisfactory broad-based contributors

The entity has shown below average overall contribution towards BEE.

Status (Operational capacity)

Unconstrained operational capacity

The entity has full capacity to conduct its entire operations and has insignificant operational reliance on any third-party entities.

Constrained operational capacity

The entity relies on a related or third-party entity to conduct its administrative, procurement, logistics, financing or other non-core operations. The reliance does not significantly impact on the entity’s capacity to perform its core operations.

Limited operational capacity

The entity relies extensively on related or independent third-party entities to conduct its core operation. The entity does not have sufficient capacity to deliver its services without external support.


4. Skills development C

4.1 Skills development spend R83 021 5284.2 Skills development plan Yes4.3 Skills spend as a percentage of payroll 1,7%4.4 Total number of delegates trained 38 4674.5 Delegates trained as a percentage of workforce 53,9%4.6 Number of black delegates trained 31 2514.7 Black delegates as a percentage of total

number of delegates trained 81,2%4.8 Learnerships as a percentage of total employees 1,0%4.9 Specific obstacles or restrictions None

5. Affirmative procurement C

5.1 Affirmative procurement plan Yes5.2 Affirmative procurement target Yes5.3 Total procurement R41 453 327 1755.4 Affirmative procurement R4 117 606 1805.5 Affirmative procurement spend as a

percentage of total procurement 9,9%5.6 Application of an independent,

robust verfication mechanism None5.7 Specific obstacles or restrictions None

6. Enterprise development A

6.1 Enterprise development initiatives Yes6.2 Total enterprise development spend R637 439 337

7. Social development D

7.1 Social development initiatives Yes7.2 Total social development spend R25 724 4707.3 Specific obstacles or restrictions None

8. Operational capacity A

8.1 The operational activities of the entity include: investment holding8.2 Bidvest does not rely on the support of

related/third-party entities8.3 Bidvest does not outsource any of its key operations8.4 The entity is in possession of annual financial

statements8.5 The entity is in possession of a valid tax

clearance certificate8.6 The risk of economic benefits flowing out of the

Company as a result of the lack of operational capacity is: Very low

8.7 Specific obstacle or restrictions: None

Factor Component Empowerdex

BEE factors status status rating

BEE ownership A

Level 4

contributor* A

BEE management C

Employment equity B

Skills development C

Affirmative procurement C

Enterprise development A

Social development D

Operational capacity A Unconstrained* As per the Department of Trade and Industry’s Draft Codes and Good Practice (released June 2005).

1. BEE ownership A

1.1 BEE voting rights 41,4%1.2 BEE women voting rights 21,8%1.3 BEE entitlement to economic interest 41,4%1.4 BEE women entitlement to economic interest 21,8%1.5 BEE designated groups entitlement to economic interest 14,3% 1.6 Ownership fulfilment No1.7 Net economic interest 7,6%1.8 Total ownership points earned 19,00

2. BEE management C

2.1 BEE board participation through voting rights 29,2%2.2 BEE board participation through representation 16,7%2.3 BEE women board participation through representation 8,3%2.4 BEE senior executive management representation 33,3%2.5 BEE women senior executive management representation 33,3%2.6 BEE other executive management representation 11,1%2.7 BEE women other executive management representation 0,00%2.8 Total management points earned 5,7

3. Employment equity B

3.1 Total workforce analysed 71 3833.2 Black representation 83,7%3.3 Black female representation 36,9%3.4 Employment equity plan Yes3.5 Employment equity committee Yes3.6 Affirmative action plan Yes3.7 Specific obstacles or restrictions None

98

Sustainable development performance data

Data has been collated for Bidvest’s South African and international operations, for the period July 1 2005 to June 30 2006, which coincides with Bidvest’s financial reporting. Where divisional structures changed, figures were restated to allow comparison with 2005.

Every effort has been made to ensure data accuracy and completeness. There is, however, the possibility of small inconsistencies due to human error in recording and collating, and differences in interpretation of definitions.

Where the analysis refers to racial categories, only South African data is presented. “Black” in that context includes black, Indian and coloured. Employee-related data includes non-permanent, contract employees.

The collation of sustainability information at Group level commenced in 2003 and focused on South African operations only. Gradually the exercise has been widened to include offshore operations and a broader selection of indicators. This year selected additional social and environmental data is published at divisional level. Data is only reported where it is considered to be of reasonable accuracy and is reported according to the 2002 GRI guidelines. Ongoing efforts are being made to improve the data quality and to broaden the range of indicators.

Where information is not available this has been marked with a “✦”.

Health and safety indicators 4 Definitions relating to occupational health and safety have been brought in line with the GRI’s G3 guidelines. This data is now reported as

“injury rate”, “lost-day rate” and “work-related fatalities”. Comparison with prior years is not possible. Fatalities were not reported separately prior to 2005.

4 An “injury” is defined as a fatal or non-fatal injury arising out of or in the course of work and is reported if an employee is not able to return to their normal duties the day following the day on which the injury occurred, irrespective of it being a work day or not. The “injury rate” expresses the frequency of injuries relative to the total time worked by the total workforce for the reporting period and is stated as the rate per 200 000 employee hours.

4 “Lost days” are defined as days which could not be worked as a result of occupational accidents or diseases. A return to limited duty or alternative work for the same organisation is not considered to be lost days. The “lost-day rate” provides an indication of the impact of occupational accidents and diseases and is stated as the rate per 200 000 employee hours.

2002 2003 2004 2005 2006

Employees and their compositionNumber of employees 66 599 69 752 81 010 88 441 93 325

South Africa 53 396 56 742 68 229 75 955 78 029

International 13 203 13 010 12 781 12 486 15 296

Employment by gender profile – (%)Group ✦ ✦ ✦ 100,0 100,0

Male ✦ ✦ ✦ 58,1 57,6

Female ✦ ✦ ✦ 41,9 42,4

South Africa 100,0 100,0 100,0 100,0 100,0

Male 53,7 55,0 55,8 55,1 53,4

Female 46,3 45,0 44,2 44,9 46,6

International ✦ ✦ ✦ 100,0 100,0

Male ✦ ✦ ✦ 75,4 79,3

Female ✦ ✦ ✦ 24,6 20,7


2002 2003 2004 2005 2006

Employment by gender profile – (%) continued

Female employment (Group)

Directors 9,1 8,1 15,2 13,1 11,7

Management 25,3 25,3 27,6 25,9 23,8

Other employees 46,7 45,5 44,7 42,3 42,8

Employment equity profile by race – (%) 100,0 100,0 100,0 100,0 100,00

Black 62,7 64,9 69,0 71,7 71,2

White 20,3 19,2 16,4 14,2 15,0

Indian 6,7 6,3 5,0 5,1 4,8

Coloured 10,3 9,6 9,6 8,9 9,0

Employment equity by race and gender – (%) 100,0 100,0 100,0 100,0 100,0

Black male 43,4 45,1 47,3 47,9 45,8

White male 10,4 9,9 8,5 7,2 7,6

Black female 36,3 35,7 36,3 37,8 39,3

White female 9,9 9,3 7,9 7,1 7,3

Management representation – (%)

Bidvest Group board representation 100,0 100,0 100,0 100,0 100,0

Black male 7,1 13,8 13,3 12,9 16,7

White male 85,8 75,9 73,4 70,9 62,5

Black female 0,0 3,4 10,0 9,7 12,5

White female 7,1 6,9 3,3 6,5 8,3

Bidvest divisional board representation 100,0 99,9 100,0 100,0 100,0

Black male 1,5 2,0 6,3 6,6 14,3

White male 89,5 89,4 78,4 83,6 72,8

Black female 3,0 1,3 5,1 4,1 9,3

White female 6,1 7,3 10,2 5,7 3,6

Top management 100,0 100,0 100,0 100,0 100,0

Black male 10,5 13,3 15,5 12,3 13,5

White male 75,7 70,7 65,8 69,8 68,6

Black female 2,1 3,1 2,7 4,3 4,1

White female 11,7 12,9 16,0 13,6 13,8

100

Sustainable development performance data

2002 2003 2004 2005 2006

Management representations – (%) continued

Senior management 100,0 100,0 100,0 100,0 100,0

Black male 13,6 14,6 20,3 19,9 20,8

White male 53,4 55,9 47,2 49,8 50,6

Black female 5,6 5,6 5,2 4,4 6,2

White female 27,4 23,9 27,3 25,9 22,4

Number of disabled employees ✦ ✦ ✦ 212 171

South Africa 75 87 107 200 156

International ✦ ✦ ✦ 12 15

Trade unionisation – (%) ✦ ✦ ✦ 26,6 28,3

South Africa 17,4 26,0 23,5 28,7 30,1

International ✦ ✦ ✦ 15,0 19,8

Training

Training spend (R’000) ✦ ✦ 72 865 85 658 101 943

South Africa 38 991 36 201 58 227 74 596 83 022

International ✦ ✦ 14 638 11 062 18 921

Training spend per employee (R) ✦ ✦ 894 876 1 092

South Africa 730 638 853 982 1 064

International ✦ ✦ 1 145 886 1 237

Training hours ✦ ✦ ✦ 538 057 596 009

South Africa ✦ ✦ ✦ 474 734 490 854

International ✦ ✦ ✦ 63 323 105 155

Training hours per employee ✦ ✦ ✦ 6 6

South Africa ✦ ✦ ✦ 6 6

International ✦ ✦ ✦ 5 7


2002 2003 2004 2005 2006

Health and safety

Injury rate ✦ ✦ ✦ ✦ 2,33

South Africa ✦ ✦ ✦ ✦ 1,62

International ✦ ✦ ✦ ✦ 6,65

Lost-day rate ✦ ✦ ✦ ✦ 55,9

South Africa ✦ ✦ ✦ ✦ 43,4

International ✦ ✦ ✦ ✦ 131,8

Work-related fatalities ✦ ✦ ✦ ✦ 12

South Africa ✦ ✦ ✦ ✦ 11

International ✦ ✦ ✦ ✦ 1

HIV/Aids

Employee % that participated in HIV/Aids-related training and awareness programmes

✦ ✦ ✦ ✦ 13,4

Number of condoms distributed ✦ ✦ ✦ ✦ 145 600

BEE procurement

BEE procurement (R’000) ✦ ✦ 4 206 218 5 406 947 4 117 606

BEE procurement (% of discretionary spend) ✦ ✦ 30,0 32,2 30,3

Corporate social investment

CSI (R’000) ✦ ✦ 11 691 17 390 28 650

South Africa 8 761 11 197 10 389 15 877 25 724

International ✦ ✦ 1 302 1 513 2 926

CSI as % of pre-taxation profit ✦ ✦ 0,5 0,6 0,8

South Africa 0,7 0,7 0,6 0,7 1,1

International ✦ ✦ 0,2 0,2 0,3

102

GRI Index

Bidvest followed the GRI’s G3 sustainability reporting guidelines. This table provides cross-references to where GRI performance indicators are discussed.

Where Bidvest did not report on a GRI indicator this does not necessarily mean that the issue is not addressed by Bidvest business units. Non-reporting could be due to the difficulty of gathering this level of detailed information given the Group’s decentralised and multi-faceted nature. Bidvest has a significant number of business units operating in a broad range of industries and geographies, dealing with a highly diverse range of products, services, suppliers and customers. Ongoing efforts are being made to improve indicator coverage and data collation.

Status indicators:

ü fully reported

~ partially reported

û not reported

n/a not applicableDisclosure items and performance indicators Status Reference

1. Strategy and analysis1.1 Statement from the CEO and chair ü Chairman’s message and chief executive’s statement

1.2 Description of key risks and opportunities ~ Sustainability performance at a glance; sustainability at Bidvest. Annual report

2. Organisational profile

2.1 Name of the reporting organisation ü Contact details

2.2 Major brands, products and services ü Divisional reviews. Annual report: review of operations. Our businesses and products 2006

2.3 Operational structure ü Divisional reviews. Annual report: review of operations

2.4 Countries of operations ü Geographic footprint

2.5 Nature of ownership and legal form ü Annual report: directors’ report; interest in subsidiaries, joint ventures and associates

2.6 Markets served ü Divisional reviews. Annual report: review of operations

2.7 Scale of the reporting organisation ü Group in brief; sustainability at Bidvest. Annual report: financial statements

2.8 Major decisions ü Divisional reviews. Annual report: chief executive’s report; review of operations

3. Report parameters3.1 Contact point for questions ü Contact details

3.2 Reporting period ü About this report

3.3 Date of most recent previous report ü About this report

3.4 Changes in measurement of indicators ü About this report; sustainable development performance data

3.5 Plans for future reporting ü About this report

3.6 Application of GRI-reporting framework ü About this report; sustainable development performance data

3.7 Report content and stakeholders ~ Introduction; external opinions

3.8 Specific limitations on the scope of the report ü About this report; external opinions

3.9 Data measurement techniques ~ Sustainable development performance data

3.10 Approaches to stakeholder engagement ~ Sustainability report 2005: stakeholder opinions

3.11 Information from stakeholder engagement ü External opinions

3.12 Boundary of the report ü About this report

3.13 Significant changes since previous report ü About this report; divisional reviews. Annual report: chief executive’s report; review of operations


Disclosure items and performance indicators Status Reference

3.14 Joint ventures, subsidiaries, leased facilities ~ About this report. Annual report: interest in subsidiaries; joint ventures and associates

3.15 Re-statements of information ü About this report; sustainable development performance data

3.16 GRI content index ü GRI index

3.17 Independent assurance for the report ü Independent assurance

4. Governance, commitments and engagement4.1 Governance structure ü Sustainability at Bidvest. Annual report: corporate

governance

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

ü Annual report: corporate governance

4.3 Independent members of the highest governance body

ü Sustainability at Bidvest. Annual report: corporate governance

4.4 Recommendations to highest governance body û

4.5 Linkage between compensation and the organisation’s performance

ü Annual report: directors’ report; corporate governance

4.6 Qualifications of highest governance body ü Annual report: corporate governance

4.7 Avoidance of conflicts of interest ü Annual report: corporate governance

4.8 Internal values, codes of conduct and principles ü Sustainability at Bidvest. Annual report: corporate governance

4.9 Management of economic, environmental and social performance

ü Chief executive’s statement; sustainability at Bidvest Annual report: corporate governance

4.10 Evaluation of the highest governance body ü Annual report: corporate governance

4.11 Precautionary approach ~ Sustainability at Bidvest. Annual report: corporate governance

4.12 Voluntary initiatives ü Divisional reviews

4.13 Memberships ü Divisional reviews

4.14 Stakeholder groups ~ External opinions

4.15 Selection of stakeholders ~ External opinions. Sustainability report 2005: stakeholder opinions

4.16 Stakeholder engagement ~ External opinions. Sustainability report 2005: stakeholder opinions

4.17 Key issues of stakeholder engagement ü External opinions

Economic Performance IndicatorsDisclosure of management approach ~ Sustainability performance at a glance; group in brief;

sustainability at Bidvest; economic vitality

EC1 Economic value generated and distributed ü Economic vitality

EC2 Financial implications of climate change û

EC3 Benefit pension plan obligations û

EC4 Financial assistance from government û

EC5 Entry wage compared to local minimum wage û

EC6 Spending on locally based suppliers ü Black economic empowerment

EC7 Local hiring in senior management ~ Black economic empowerment

EC8 Infrastructure investments for public benefit û

EC9 Indirect economic impacts (Add) ~ Divisional reviews

Environmental Performance Indicators

Disclosure of management approach ~ Sustainability at Bidvest

EN1 Weight of materials used û

104

GRI Index

Disclosure items and performance indicators Status Reference

EN2 Recycled material û

EN3 Direct energy consumption ~ Divisional reviews: Bidvest Europe

EN4 Indirect energy consumption û

EN5 Renewable resources (Add) ~ Divisional reviews: Bidvest Europe

EN6 Conservation and efficiency improvements (Add) û

EN7 Energy-efficient products and services (Add) ~ Divisional reviews: Bidvest Europe; Bid Industrial and Commercial Products

EN8 Initiatives to reduce indirect energy consumption (Add)

û

EN9 Total water withdrawal by source (Add) û

EN10 Water sources and habitats affected by water withdrawal (Add)

û Predominantly not applicable to Bidvest businesses

EN11 Percentage and volume of water recycled (Add) ~ Divisional reviews: Bidvest Europe

EN12 Protected areas û Predominantly not applicable to Bidvest businesses

EN13 Impacts of activities on protected areas û Predominantly not applicable to Bidvest businesses

EN14 Habitats protected or restored (Add) û Predominantly not applicable to Bidvest businesses

EN15 Biodiversity impacts (Add) û Predominantly not applicable to Bidvest businesses

EN16 IUCN Red List species (Add) û Predominantly not applicable to Bidvest businesses

EN17 Greenhouse gas emissions û

EN18 Emissions of ozone-depleting substances û

EN19 NOx, SOx and other air emissions by weight û

EN20 Waste by type and definition û

EN21 Total water discharge and quality û

EN22 Total number and volume of significant spills û

EN23 Other relevant greenhouse gas emissions û

EN24 Hazardous waste (Add) û

EN25 Water sources and habitats affected by water discharges (Add)

û

EN26 Environmental impacts of products/services ~ Divisional reviews

EN27 Recycled products û

EN28 Non-compliance with environmental regulations û

EN29 Environmental impacts of transportation (Add) û

EN30 Environmental protection expenditures (Add) û

Social Performance Indicators – labour practices and decent workDislosure on management approach ü Sustainability at Bidvest; divisional reviews

LA1 Workforce by employment type/region ü Black economic empowerment; divisional reviews; sustainable development performance data

LA2 Employee turnover by age group and gender û

LA3 Minimum benefits (Add) ~ Sustainability at Bidvest

LA4 Employees represented by trade unions ü Sustainable development performance data

LA5 Notice period, consultation and negotiation on operational changes

û

LA6 Joint health and safety committees û

LA7 Injury, occupational diseases, lost days, etc ü Sustainability at Bidvest; divisional reviews; sustainable development performance data

LA8 Training on HIV/Aids etc ü Sustainability at Bidvest; divisional reviews

LA9 Occupational health and safety management (Add)

ü Sustainability at Bidvest; divisional reviews


Disclosure items and performance indicators Status ReferenceLA10 Health and safety agreements with trade unions

(Add)û

LA11 Training per year per employee ü Sustainability at Bidvest; divisional reviews; sustainable development performance data

LA12 Lifelong learning (Add) û

LA13 Performance and career development review (Add)

~ Sustainability at Bidvest; divisional reviews

LA14 Diversity ~ Black economic empowerment; sustainable development performance data

LA15 Male/female remuneration (Add) û

Social Performance Indicators – human rightsDisclosure on management approach ~ Sustainability at Bidvest; black economic

empowerment. Annual report: corporate governance

HR1 Investment agreements û

HR2 Suppliers and contractors û

HR3 Employee training on human rights (Add) û

HR4 Discrimination û

HR5 Freedom of association, collective bargaining û

HR6 Child labour û

HR7 Forced labour û

HR8 Procedures for complaints and grievances concerning human rights (Add)

~ Sustainability at Bidvest

HR9 Security personnel trained on human rights (Add) û

HR10 Incidents involving rights of indigenous people (Add)

û

Social Performance Indicators – societyDisclosure on management approach ~ Sustainability at Bidvest. Annual report: corporate

governance

SO1 Impact assessment of operations on communities û

SO2 Prevention of corruption ~ Sustainability at Bidvest

SO3 Actions in response to instances of corruption ~ Sustainability at Bidvest

SO4 Public policy development and lobbying û

SO5 Contributions to political parties (Add) û

SO6 Anti-competitive behaviour (Add) û

Social Performance Indicators – product responsibilityDisclosure on management approach ~ Divisional reviews (for example, Bidvest Europe, Bidfood)

PR1 Health and safety of products ~ Divisional reviews

PR2 Non-compliance with health and safety regulations (Add)

û

PR3 Labelling of products and services û

PR4 Non-compliance with product and service labelling regulations (Add)

û

PR5 Customer satisfaction (Add) ~ Sustainability at Bidvest; divisional reviews

PR6 Marketing communications û

PR7 Non-compliance with marketing communications regulations (Add)

û

PR8 Data protection û

PR9 Complaints regarding breaches of customer privacy

û

106

This symbol indicates that further detailed information is available

ABET adult basic education and training

ART HIV/Aids-related anti-retroviral treatment

BEE black economic empowerment

BBBEE broad-based black economic empowerment

CAIA Chemical and allied industries’ association

CSI corporate social investment

EMS environmental management system

HACCP hazard critical control point

HDI historically disadvantaged individual (South African blacks, coloureds and Indians)

IFRS International Financial Reporting Standards

ISO (9000 and 14000) International Organisation for Standardisation quality management and quality assurance series of standards (9000) and environmental management series of standards (14001)

JSE JSE Limited, South Africa

KZN KwaZulu-Natal

NOSA National Occupational Safety Association

NPI National Productivity Institute

NQF National Qualifications’ Framework

OEM original equipment manufacturer

OHS Act Occupational Health and Safety Act (No. 85 of 1993), South Africa

SABCOHA South African Business Coalition on HIV/Aids

SETA sectoral education and training authorities

SHE safety, health and environment

The Codes codes of good practice for broad-based black economic empowerment as published by the Department of Trade and Industry, South Africa.

VCT HIV/Aids-related voluntary counselling and testing

Glossary

The promise of new life reaches far and wide, where it takes root and starts to fl ourish

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