annual report
2007

The corporate social responsibility plan is an integral part of the group’s overall business strategy. In particular, the group is committed to uplifting the community which we serve. The main objectives of the plan are:

• To continue to transform our employee profile into one that is reflective of the communities with whom we do business.
• To provide training and development to our staff.
• To assist the economic and social progress of marginalised communities through the sponsorship of upliftment projects.
• To support small, medium and micro enterprises through our procurement and enterprise development practices.

transformation

The achievement of a “BB” Empowerdex rating in May 2006 establishes a solid platform to progress transformation within the group. To monitor progress, a Transformation Committee was formed by the board consisting of non-executive directors, the chief executive officer and executive management responsible for employment equity, training, procurement and the corporate social responsibility programmes. The main focus of the committee has been to develop and refine group strategies, to establish the existing position and to ensure continuing progress in the group’s transformation process.

employees

Our business success relies on a productive workforce, where sound employee relations are key. We aim to create an environment where loyal people with strong entrepreneurial and work ethic are rewarded and the skills and experience of the staff are retained to ensure the enduring performance of the group.

In particular, Lewis is aware of the costs associated with employee turnover and the cost of acquiring and training new staff. Consequently, priority is given to staff retention, particularly those who show potential to grow within the group. There are a number of tenets to this strategy, one of which is to reward employees who contribute to the success of the group and secondly, to create a culture where employees feel a sense of belonging to the “Lewis family”.

We are also committed to ensuring a workplace that is representative of the demographics of South Africa and our customer base. We continually monitor our employee profile to ensure that it is reflective of the communities which we serve. More than 80% of our staff are from black communities.

We provide for the development of our staff, offering an extensive range of training courses for all employees, concentrating on the skills set for each of the job categories. It is the responsibility of operational management to continually identify candidates who require further training to enhance their performance and overall skills. During 2007, 1 844 staff members attended training courses including 1 494 previously disadvantaged staff.

Staff with management potential are continually being identified and being given the opportunity to further develop their career within the group. Manager development programmes are in place to take the employee through junior management levels through to senior management roles.

In addition, a development pool confirming staff from previously disadvantaged communities, who have been identified as having management potential, are receiving further training and exposure.

A training team working closely with the human resources department travels throughout South Africa providing on-site and off-site training, supplementing interactive computer training on product knowledge at the stores.

The group has expanded its skills training and product knowledge by means of a weekly television broadcast, known as “Lewis Live”, directly to our branches. During the broadcast, employees are exposed to 15 minutes of skills training and 15 minutes of product knowledge. This contributes to a team culture where the staff understand the requirements of the other jobs in the store environment. Broadcasts reach approximately 4 000 employees each week.

We are accredited as a training provider within the Wholesale and Retail Sector Educational and Training Authority.

The group provides a number of other benefits:

• Voluntary medical aid for employees subsidised by the company.
• Compulsory membership of either the Lewis Provident Fund or SACCAWU National Provident Fund.
• Home loan assistance.
• Educational bursaries.
• Medical aid assistance.
• A subsidised canteen at head office.
• Counselling, advice and assistance to the employees who request such as a consequence of difficult personal circumstances.

We recognise our employees’ rights to associate freely and to bargain collectively and a recognition agreement exists with the South African Commercial, Catering and Allied Workers’ Union (SACCAWU). Recognition agreements have also been concluded with unions in Botswana, Lesotho and Swaziland.

hiv/aids

Lewis has an HIV/AIDS awareness programme which is integrated into the regular company training programmes available to our staff. The aim of the programme is to advise staff members of the effects of HIV/AIDS and available preventative methods. Brochures are regularly distributed to staff.

In April 2006, a HIV/AIDS management programme was introduced and made available to permanent staff and their immediate families. The programme is run by an external service provider who provides the following services:

• Access to post-AIDS exposure counselling through a care centre.
• The applicant is covered for initial medication, free consultations and assistance in locating the nearest clinic for further treatment.

Participation by employees and their families is voluntary and all counselling given is treated as confidential. The group bears the cost of this cover on behalf of all its employees.

This HIV/AIDS management programme has been promoted through all the staff communication channels.

communities

The aim of our social responsibility programme is to assist the economic and social progress of marginalised communities with the sponsorship of upliftment projects. The majority of our support goes toward education and training followed by health and social development. During the past year the focus of the programme has been more towards the plight of the children in our society.

We have continued our association with Project Build to improve the educational and community facilities for disadvantaged communities in KwaZulu-Natal. They are responsible for managing construction. We are currently sponsoring the building of two sanitation facilities at Sicelulwazi Primary School at KwaMashu. The school has approximately 750 learners and no such facilities existed. Our involvement will significantly improve the educational environment for these learners.

Children of the Dawn supports and strengthens rural community initiatives which focus on caring for HIV/AIDS orphans and vulnerable children throughout South Africa. Lewis has sponsored 45 children over a 12-month period which will cater for such needs as schooling, nutrition, clothing, hygiene and health.

The South African Children’s Home is located in the Gardens, Cape Town. It is home to 44 boys and girls who came from various communities, often placed in the home via the court system. Assistance has been provided through sponsorship and the provision of such amenities as beds, mattresses, furniture and cupboards.

The Thembalisha Foundation has as one of its objectives the alleviation of poverty through education. We sponsored a number of projects at various schools in the Western Cape namely:

• School of Hope.
• Siyazama Pre-School.
• Graceland Pre-School.
• Thembacare (Grabouw).

The group was also involved with Zenzele Training and Development, a non-profit organisation which teaches practical skills to unemployed people. We sponsored woodwork courses for 15 students.

Lewis is one of the major sponsors of the Community Chest Twilight Run, an annual event in Cape Town. The proceeds from thousands of entries to this run contributes to the Community Chest’s fund-raising.

Other assistance provided was as follows:

• Funding and donations for the Organ Donor Foundation, SA Guide Dog’s Association, Cape Mental Health Society and the Robin Good Initiative.
• Supplying schools with name boards.
• Providing financial assistance and donations of kit to sports clubs in previously disadvantaged areas.
• Sundry donations to various non-profit
  organisations in response to requests.

the lewis club

Through the Lewis Club the following contributions have been made to the social and economic upliftment of our communities:

• The provision of Damelin education bursaries to the value of R2 million per year to Club members, thereby assisting predominantly previously disadvantaged South Africans to further their education.
• Two 24-hour toll free lines offer Club members legal, healthcare, HIV and parenting advice. The legal and healthcare advice lines each average 9 000 calls per month at a cost of approximately R200 000 per month. These services provide a much-needed free service to customers, particularly those living in rural areas.
• The top three Club prize winners select charities of their choice and each month R30 000 donations are made to these selected charities on their behalf.

procurement and enterprise development

A substantial amount of merchandise is procured from suppliers, which are mostly small, medium and micro enterprises and mostly owned by persons from designated groups. During the year, 40% of purchases in the furniture category were bought from Black Economic Empowerment (BEE) suppliers. In addition, 90% of all vehicles purchased were bought from a BEE vehicle dealership and approximately 30% of our rental premises are owned or controlled by previously disadvantaged individuals. Our payment terms are 30 days, compared to the average retail payment term of 90 days, which support the cash flows of these suppliers. Our Enterprise Development initiatives include supporting small black-owned businesses that provide services to our group. Financial assistance is also given to these businesses.

environment

We recognise that our activities do impact on the environment. The impact is minimised through adopting a strategy of regularly reviewing the group’s activities and compliance with relevant legislation.

The main areas of focus are:

• Minimising the usage of electricity and water.
• Wastage disposal companies are contracted to recycle the group’s wastage, which relates mainly to consumables such as stationery, paper and plastic.
• The optimisation of fuel and oil consumption is achieved by ensuring that vehicles operate efficiently and the amount of travel for delivery purposes is minimised.

With respect to our suppliers, where practicable, we review their activities and supply chain to determine the impact on the environment and communities.