We take our responsibilities to the environment seriously and are committed to establishing our genuine green credentials amongst our shareholders and customer base.

The focus on environmental and sustainable business practices continues to escalate and the Australian operation is being proactive to ensure Victoria has the necessary resources and skills to meet the challenges ahead.  ISO 14001 accreditation is the cornerstone of Victoria’s environmental program and initiatives instigated from the ISO principles have seen improvements in waste reduction, efficiency and resource usage.

The Australian operation continues its success in developing environmental and sustainable projects to reduce its electrical, gas, emissions and water use. These projects have been supported by Federal and State governments via energy and emission reduction funding programs.

All lighting at the Dandenong and Bendigo mills have been upgraded to latest technology LED lighting with locked in decreases of >700,000kWh/annum. Gas-hungry hot air heaters have been replaced with radiative heaters at the Bendigo mill with >5,000gj/annum reduction in gas usage.

The wool drier at Bendigo utilised steam through large copper piping directly from a large inefficient boiler. This use of a secondary energy is very inefficient and expensive. The steam pipes have been replaced with two gas burners and ducting directly in the drier replacing a secondary energy (steam) with a primary energy. (gas) This was combined with a project to fit the drier with a moisture sensing and control system to optimise the drying capabilities with gas usage. This has resulted in savings of >9,000gj of gas/annum.

Wool fibre dyeing uses substantial amounts of water (30,000,000 L/annum) and energy. (>9,000gj/annum) Bendigo have introduced an in-house developed water system that recycles the rinse water back into dye batch water with reductions of 15,000,000 L/annum and 1,850 gj/annum. This project also attracted State Government assistance.

Victoria entered the prestigious Premiers Sustainability Awards (State Government) and was presented with Excellence in Sustainability in a Large Business Award and the Premiers Regional Recognition Award for the projects successfully developed and completed at the Bendigo Mill.

The company has been selected by State Government department Sustainability Victoria to participate in a case study highlighting sustainability best practices.

Project development is on-going and currently investigating process energy usage and potential reductions. The large reduction of steam at Bendigo has lowered the effective capacity of the large boiler and alternatives are being sought such as replacement with multiple, small instant steam generators. Investigating many other process improvements at both mills to further reduce energies and costs.

Energy efficiency is a foremost issue throughout the Group, not only as a target for reducing costs but equally as an environmental issue. The Group is continually looking at methods to reduce heating and lighting costs and in making improvements to our production processes in order to further reduce our total energy consumption.

In the UK, we have identified areas within our factory where we have been able to conserve heat and energy simply by closing off various internal and external doors, with no impact to our operation. We are also continuing with the replacement of 500W factory lights with more efficient 100W low-energy ones which provide the same light output.

In addition to recycling all cardboard, plastic and most electrical and metal waste, all backing line waste and changeover waste is now recycled into carpet underlay, saving approximately 100 tonnes per year of landfill. We have also been able to save an anticipated 20 tonnes per year of Yarn waste in our Tufting manufacture, a reduction of 25%.

The Company continues to be eligible for the Climate Change Levy (CCL) rebate scheme.  The Company has also been required to register for the new Climate Reduction Commitment (CRC), but Group energy usage falls below the threshold at which the Company would be required to take part in the proposed “league tables” of carbon reduction performance.  The fact that the UK companies have Climate Change Agreements (CCA’s) already in place in the form of their CCL rebate schemes means that, now registration for the CRC is complete, we are able to continue to concentrate our efforts on carbon reduction though the CCL rebate scheme.  We continue to implement energy saving ideas both in the factory and in the engineering of our product specifications to reduce energy usage, and several initiatives are currently underway.

Video conferencing is used on a regular basis between the Group’s sites located across the World to promote communication between our companies and to avoid unnecessary travel.

Nature’s Carpet® is Victoria’s response to increasing consumer demand for biodegradable ultra low toxicity products. The range includes Tufted and traditional woven Wilton carpet, carpet tiles and a wool underlay, all of which meet the high standards demanded by both the environmental movement and by individuals with high sensitivity to chemical toxins. Nature’s Carpet® is currently sold throughout North America & Canada through retail flooring stores and green building centres and has been trialled exclusively in the UK for the past 6 months with John Lewis. Nature’s Carpet should also soon be available throughout the UK.

Our relationships with our suppliers, agents and representatives, regulators – even competitors – reflect Victoria’s commitment to acting responsibly. These relations must always be built on principled conduct, respect, sound business decisions and our commitment to our customers, investors and employees. Victoria’s continued success is tied with that of our business partners and the respect of our competitors.

Customer Relationships

Naturally, our customers are of paramount importance to us.  We aim to retain customers and to establish long and lasting relationships with them, built on mutual respect and trust. The directors meet customers on a regular basis, which provides both parties with an excellent opportunity to build on relationships and to have a frank exchange of views.

We focus heavily on customer service and recognise the importance of consistent on time deliveries, reliable product guarantees and our reputation for quality products. Relationships with our customers are strengthened by involving customers in our business and they are actively encouraged to visit our manufacturing facilities and to take part in various training courses we hold and to contribute to product development ideas.

Supplier Relationships

Each Group company is expected to use a procurement process that is fair and seeks the best value for the cost of purchases. Victoria strives to ensure that how we acquire these goods and services enhances the Group’s success and demonstrates respect for our many potential and current suppliers.

Victoria endeavours to forge strong relationships with our suppliers which are built on honesty, fairness and mutual respect. This has proved extremely beneficial in the current challenging environment. We encourage our suppliers to be honest about any issues they face and we work together to make realistic improvements or overcome any hurdles that we might face.

Fair Competition

Relationships with competitors present the most sensitive territory in competition law. At Victoria, fair competition means acting honestly and responsibly whilst competing vigorously to serve our customers and deliver returns to our shareholders. We adhere to fair competition and anti-trust laws and regulations in the countries in which we operate.

Our aim is to be seen as an employer of choice, where people want to work and deliver their best for the Group.

We have a low level of employee turnover, with the average length of service currently more than nine years.

Summaries of key policies are as follows:

Equal opportunities policy

Victoria is committed to achieving equality in all our employment policies, procedures and practices. We value our employees highly and respect human rights and dignity. Victoria recognises the advantages of a diverse workforce and we do not tolerate any harassment of, or discrimination against, employees or potential employees, irrespective of their race, creed, colour, sexual orientation, nationality, ethnic origin, religion, disability, age, gender or marital status.

We demand the highest ethical standards from ourselves, our representatives and our business partners.

Family-friendly employment policies

As part of our intention that Victoria is seen as an employer of choice; within the UK, we have adopted a flexible approach to part time and non-standard hours of work for those employees who are returning to work after maternity leave or who become carers for close family members, wherever possible. In all cases, we ensure that maternity and paternity leave policies are met.

Training

The Group recognises the importance of employee development and acknowledges the indirect impact this investment has on customer facing service and product.

Training and the generation of a ‘learning organisation’ culture is now gaining gravitas, with evidence of tangible benefit already being seen at the operational level.

Our aim remains consistently to ensure continued focus of energies on the creation of an organisation which realises the benefits to be gained by internal development of our most precious commodity: Our people.

Victoria continues to provide development training in all vocational disciplines and we continually review our training schedule as the operational environment and customer demand develops.

Across our three sites In Australia, employees have undertaken training in a variety of courses including:

• Front Line Management
• Materials handling and ergonomics
• Textile Manufacturing
• Apprenticeships in Mechanical Engineering (textiles)
• Sustainability

Health & Safety

Victoria is committed to continual improvement in the welfare of our employees and the prevention of injury and ill health. We further recognise equal responsibility to all other persons who work under the control of the Group who may be affected by its activities or omissions. Occupational Health and Safety (OH&S) ranks equally with all other Group objectives, such as production, quality and the environment, and is integrated into the fabric of our business system.

In the UK, the Group continues to control its activities in line with the principles of BSI 18001:2007. Legislative compliance is not enough and the Group continues to push towards best practice in its quest for excellence, generating a positive OH&S performance. Continual improvement in OH&S, the provision of resources to facilitate this continuum and making safety everyone’s business is at the heart of our intent.

The integration of our OH&S management system into the mapped business processes is now being driven forward. The promotion of a business model that includes, at its heart, the requirement for safe practice in all that we do is pivotal to our philosophy. Customer demand and expectation sits at the core of all we do and remains the focus for design of our business processes across the full sales, marketing, distribution and operational spectrum. Occupational Health and Safety ranks equally with all other Group objectives such as production, quality and the environment.

Victoria recognises the importance of our contribution to the local communities in which we operate and have forged strong links with these communities; in many instances, employing several generations of the same families within our operations.

Victoria has benefitted greatly from our communities and we therefore believe that we have a strong responsibility to support and contribute to these communities, which we do in a number of ways:

We provide work experience opportunities for students attending local educational schools and colleges.

Charitable and political contributions

Victoria PLC does not make charitable or political donations. Our role is to maximise the wealth of our shareholders, who are then free to use that wealth to donate to whatever causes they wish to support.

The Board and senior management team of Victoria identifies and monitors principal risks and uncertainties on an ongoing basis. These include:

Competition – the Group operates in mature and highly competitive markets, resulting in pressure on pricing and margins. Management regularly review competitor activity to devise strategies to protect the Group’s position as far as possible.

Economic conditions – the operating and financial performance of the Group is influenced by economic conditions within the geographic areas within which it operates, in particular the UK, Australia and the Eurozone. Economic risks in any one region is mitigated by the independence of the UK & Europe Division, and the Australia Division. The Group remains focused on driving efficiency improvements, cost reductions and ongoing product development to adapt to the current market conditions.

Key input prices – material adverse changes in certain raw material prices – in particular wool and synthetic yarn, polyurethane foam, and clay – could affect the Group’s profitability. A proportion of these costs are denominated in US Dollars and Euros which gives rise to foreign exchange risk, which is currently impacted in the UK by the uncertainty in medium-to-long term exchange rates against Sterling in light of Brexit. Key input prices are closely monitored and the Group has a sufficiently broad base of suppliers to remove arbitrage risk, as well as being of such a scale that it is able to benefit from certain economies arising from this. Whilst there is some foreign exchange risk beyond the short-term hedging arrangements that are put in place, the vast majority of the Group’s cost base remains in domestic currency (Sterling, Euros and Australian Dollars). Furthermore, the acquisitions in Continental Europe have created a natural hedge within the UK & Europe segment as there are material earnings in Euros as well as Sterling.

Acquisitions – acquisition-led growth is a key part of the Group’s ongoing strategy, and risks exist around the future performance of any potential acquisitions, unforeseen liabilities, or difficulty in integrating into the wider Group. The Board carefully reviews all potential acquisitions and, before completing, carries out appropriate due diligence to mitigate the financial, tax, operational, legal and regulatory risks. Risks are further mitigated through the retention and appropriate incentivisation of acquisition targets’ senior management. Where appropriate the consideration is structured to include deferred and contingent elements which are dependent on financial performance for a number of years following completion of the acquisition.

Other operational risks – in common with many businesses, sustainability of the Group’s performance is subject to a number of operational risks, including major incidents that may interrupt planned production, cyber security breaches and the recruitment and retention of key employees. These risks are monitored by the Board and senior management team and appropriate mitigating actions taken.