cattles 2007 cr review (final)

8/14/2019 Cattles 2007 CR Review (final)

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CorporateResponsibility

CORPORATE RESPONSIBILITY REVIEW 2007

Page 08 BEING A RESPONSIBLE FINANCIAL SERVICES ORGANISATIONPage 18 BEING A GOOD PEOPLE BUSINESSPage 30 BEING ENVIRONMENTALLY RESPONSIBLE


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ifcCattles plc

Corporate ResponsibilityReview 2007

CATTLES PLC AT A GLANCE

OUR BUSINESSESWelcome Financial Services The Lewis Group Cattles Invoice Finance

Welcome Financial Services comprises three businesses:

Welcome Finance Shopacheck Welcome Car Finance

Welcome Finance, the principal lending business,serves more than 500,000 customers, providing directrepayment loans from 183 branches across the UK.Its product range includes unsecured personal loans,second charge secured loans and hire purchasefor cars.

Shopacheck provides short-term home collected loansto some 260,000 customers through 52 branches.

Welcome Car Finance sells around 14,000 used cars ayear from 12 sites and is the largest introducer of hirepurchase business to Welcome Finance.

The Lewis Group is a UK leader in debt recovery andinvestigation services, serving both external clientsand Welcome Financial Services. It is one of the UKslargest buyers of non-performing debt.

Cattles Invoice Finance provides working capital financeto small and medium-sized businesses. It operatesthrough six regional offices in England and Scotland.

CATTLES PLCCattles plc is a financial services group

specialising in providing consumer credit tonon-standard customers in the UK. We alsoprovide debt recovery services to externalclients and our consumer credit business,and working capital finance for small andmedium-sized businesses. We also havea car retail operation, which is the largestintroducer of hire purchase customersto our consumer credit business.

In the consumer credit market, non-standard

refers to customers who may currentlynot have access to mainstream facilities typically due to perceived shortcomingsin their employment, residency or credithistories. We give them an opportunityto build or repair their credit profile.

Effective risk management is paramountin all our markets, and underpins ourstrategy for continued strong growth.

GEOGRAPHIC COVERAGEBranches

WelcomeFinancial Services

The Lewis Group

Cattles InvoiceFinance

CONTENTS02 Chief Executives welcome03 Managing corporate responsibility08 Being a responsible financial

services organisation18 Being a good people business30 Being environmentally responsible34 Summary of progress against

objectives and targets36 The year ahead

This Review relates to all aspects of Cattles plcoperations and activities for the year ended31 December 2007.

Pre-tax profit 2006: 132.2m

165.2mReceivables 2006: 2.1bn

2.8bnNumber of colleagues 2006: 4,449

5,008


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RESPONSIBLE GROWTH 08Being a responsible financial services organisationWe employ the highest standards to ensure weoperate in a way that treats our customers fairlyand with respect. We lend carefully, makingsure we understand our customers financialcircumstances, to ensure we offer them the rightproduct and do not place undue burden on them.We seek to have open and honest relationshipswith customers, and offer them constructivesupport if they encounter difficulties.

GROWING AS PEOPLE 18Being a good people businessThe success of our business depends on the skillsand professionalism of our colleagues. We aimto create an environment that is motivating andstimulating, and to treat colleagues with fairnessand respect. We listen to what they have to say,and act on their feedback. We want colleaguesto fulfil their career aspirations so we offer themequal development opportunities. We seek tobuild strong bonds with the communities aroundus, because these are where our customers andcolleagues live and work.

CONSIDERATE GROWTH 30Being environmentally responsibleAs a growing business we recognise our impacton the environment. We have a duty to managethis impact and minimise it where we can,and to raise environmental awareness amongour colleagues. As well as meeting stakeholdersexpectations, this helps us to operate moreefficiently and reduce our costs.

Growing a successful business means more than justdelivering profits to our shareholders.Its about earning peoples confidence and trust developing products that people want and understand... being a company thatpeople want to work for taking our responsibilities seriously. If we fail to recognise these responsibilities or underestimate theirimportance, we risk damaging our reputation and ultimately our business. Our corporate responsibility strategy is based on threecornerstones addressing what we believe to be the most important issues facing the business. We use them to explain simply tocolleagues and stakeholders what corporate responsibility means for Cattles.


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CHIEF EXECUTIVES WELCOME

WELCOME TO OUR 2007 CORPORATERESPONSIBILITY REVIEW

Corporate responsibility is an increasinglyimportant part of our business. It is crucialto demonstrate to stakeholders thatwe take proper account of the social,ethical and environmental issues facingour business.

I want Cattles to grow in a way that issustainable over the long-term. This cannotbe achieved without maintaining thetrust and confidence of our customers,colleagues and other stakeholders. A robustand pragmatic approach to corporateresponsibility, based on an understandingof risk, will contribute greatly to achievingthis aim.

It gives me great pleasure to introducethis Review, which explains how we takeaccount of our key responsibilities basedaround our three corporate responsibilitycornerstones and presents a summaryof our performance over the past year.

David PostingsChief Executive

HIGHLIGHTS AND ACHIEVEMENTS

Being a responsible financial servicesorganisation Customer Experience Group established

in Welcome Financial Services andCustomer Expectations formally defined

Investment in innovative technology tosupport our high operational standardsand business growth

Partnership with the Association ofBritish Credit Unions to highlight theimpact of financial exclusion on thepoorest in society

Moneymanual distributed to over500,000 students in conjunction with

Credit Action

Being a good people business Two recognised awards for our approach

to colleague benefits

Over 16,000 training days provided

82% of colleagues gave a positiveresponse to working for the Groupin Speak Up survey

635,085 invested in communityactivities

Volunteer hours increased by 28%to 2,644 hours

Being environmentally responsible 11% reduction in company car fuel

consumption

Hybrid cars introduced to companycar choice list

8% reduction in CO2 emissions frombuilding electricity use per unit of revenue

3,000 meetings held via our newteleconferencing system

Successful pilot of introducing mobilehandheld technology in Shopacheck,which would reduce paper use by over

16 million sheets a year

DAVID POSTINGSChief Executive


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MANAGING CORPORATE RESPONSIBILITY

Corporate responsibility(CR) is about managing risk.We apply the same rigourand effort to managing thisrisk as we would to any otherbusiness issue.

Managing growth


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continued

Our CR strategy is concise, ourmanagement arrangements are clear

and we seek to make sure CR is partof what we do each day.

Priorities Communicating our strategy

Maintaining strong governanceof CR issues

Embedding CR across the business

Measuring our performance

Engaging with our key stakeholders

EXPLAINING OUR STRATEGYWe take a pragmatic view of managing

CR. We dont do it simply because wethink it is the right thing to do; wedo it for commercial reasons, basedon our understanding of the risks andopportunities facing our business.

Many of our stakeholders may have littleinterest in the principles of CR. But theycare about the way we behave.

Customers want to be treated fairly,offered products that are easily understoodand appropriate, and are able to trust thatwe operate to high standards. Colleagueswant to work for a company in which theycan have pride one that provides a

stimulating working environment, rewardstheir efforts and offers them opportunitiesto fulfil their career aspirations. The localcommunities where we work want to bereassured that we are operating in a waythat takes their best interests into accountand does not damage the environmentaround them. Shareholders want to knowthat we have considered all the complexrisks facing our business, including thoserelating to social, ethical and environmentalissues, and acknowledged them in howwe manage our business.

In response, we have developed a strategybased on three cornerstones. They are our

guiding principles, agreed by the Board,and provide a straightforward way for usto explain to colleagues how we want tooperate. They also help us explain to thoseoutside the business how we see ourresponsibilities.

Our three CR cornerstones are:

Being a responsible financialservices organisation

Being a good people business

Being environmentally responsible

There is a clear link between CR and the

culture-building programmes across thebusiness. Many of the values defined withinAccelerating Growth in Welcome FinancialServices, Growing Lewis Together andFirst Class in Cattles Invoice Finance,resonate strongly with our CR cornerstones.This is particularly true in areas relatingto customers and colleagues.

The following sections of this Reviewexplain in more detail how we performedin 2007 against each of these cornerstones.

We do not view CR in isolation. We try to embedthis thinking into our operational activities. As partof this process we presented 24 roadshows acrossthe Group to explain to colleagues what we meanby CR and how they can take the cornerstones intoaccount in their daily roles.

Before the presentation I was scepticalabout how CR would assist the business,except as a box-ticking exercise. Theroadshow highlighted several benefitsthat can be achieved through embeddingCR into all that we do by participatingin these initiatives the Company canpresent a positive image which is goodfor the business.

Welcome Financial Services, Compliance,25 June 2007

Understanding CR will allow me to takea more holistic view and not just basepeople development on numbers andtargets. I need to develop and grow myteam as responsible human beings andnot just target-driven employees.

Welcome Finance, Area Manager,10 July 2007

Very beneficial reinforced all the goodthings that Cattles are doing at themoment, not just for work colleagues butalso for the outside community as a whole.

Shopacheck, Area Manager,12 September 2007

CR is integral in our business it startswith our induction and continues throughthe colleague life cycle.

Cattles Invoice Finance, Senior Manager,

22 November 2007

Case study RISK.MANAGED.

CR roadshowsand colleaguefeedback


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GOVERNANCE ARRANGEMENTSBoard responsibility for CR rests with our

Chief Operating Officer, Ian Cummine. OurCompany Secretary manages CR day-to-day,supported by our CR Manager. He alsokeeps CR on the business agenda throughregular reports to the Board.

But to live up to our responsibilitieswe need to involve all our colleagues.By embedding CR into what colleaguesdo every day, we use their experience andexpertise more efficiently. For example,part of our Fleet Managers job is toimprove the environmental performanceof the company car fleet. By harnessinghis expertise we have improved our

performance in this area (see page 32for more details).

APPLYING OUR RISK.MANAGED.PRINCIPLES TO CR

Risk.Managed.is our thorough, methodicalapproach to the risks we face as a business.It requires unrelenting awareness andcontrol of risk in everything we do including the way we manage CR.Understanding risk allows us to make theright decisions at the right time, anticipateand prevent problems and capitalise onopportunities as they appear. Failure to dothis could easily damage our reputationand our business. Indeed, many CR risks arecore to our business for example, makingsure we treat our customers fairly.

The Board has delegated responsibility

for risk management and internal controlto the Audit Committee. This includesthe evaluation of social, ethical andenvironmental risks (SEE risks) commonlyconsidered part of CR, so we take accountof relevant guidance on CR, such as thatestablished by the Association of BritishInsurers. The Audit Committee is supportedby the Risk Management Group, whichincludes the Company Secretary. He is ableto feed in relevant CR risks to this group andmaintains the strong link between CR andrisk management.

Our CR and risk management teams havebeen working closely together to ensure

we have the necessary controls to manageour CR risks particularly in the eyes of ourregulators, who are taking an increasinginterest in this area.

POLICIESTo support our CR cornerstones, we havedeveloped a suite of policies on the mainCR-related areas. Copies can be downloadedfrom our website at www.cattles.co.uk.

Cattlesapproach to Health and Safety

Cattlesapproach to Supplier Standards

Cattlesapproach to Human Rights and

Colleague Care Cattlesapproach to Community

Investment

Cattlesapproach to EnvironmentalManagement

Treating Customers Fairly

Risk.Managed. requires an unrelenting awarenessand control of risk in everything we do.


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continued

OBJECTIVES AND TARGETSEach year we set objectives that provide

clear direction for our activities. These aresupported by more detailed targets.A summary of our progress against thesetargets can be found on page 34.

In 2007, we set six main objectives:

Embed our CR strategyinto colleaguesoperational processes

We are working hard to find ways to embed CR into the business. In some instanceswe have been very successful for example, incorporating CR into the induction anddevelopment of colleagues working in our Customer Sales and Service Centres see

page 20 for more detail. But this is an ongoing process which will take time.

Objective Summary of performance

Establish clearperformance measuresand confirm that ouraims are being achievedat both corporate andoperational level

We continued to develop a CR scorecard including 26 key performance indicators(KPIs) across the three cornerstones. Data is collated monthly or quarterly and used bythe CR Manager.

Review our supportfor financial educationto identify opportunities

to generate bettervalue from investmentin this area

We continued to support Credit Action and DebtCred in promoting financialeducation and money management. We also began a significant project to fundproduction and distribution of a Moneymanual to over 500,000 students seeking

university places in September 2008. This is a source of information for young peopleon the brink of financial independence.

Increase two-waycommunication withcolleagues to enhanceCR awareness inthe business

We continued to promote better communication on CR. Four questions on CR wereincluded in our Speak Up colleague perception survey, and we held 24 C R roadshowsto promote awareness and obtain feedback on CR activities already under way.

Invest in localcommunities where welive and work, andpromote colleagueinvolvement incommunity activities

We continued to invest in community initiatives focusing on raising standards infinancial education, improving the welfare of young people and addressing issues ofsocial disadvantage. In 2007 we invested 635,085 in community activities andcolleagues volunteered 2,644 hours on community projects.

Improve environmentalperformance and delivertangible benefits to thebusiness in our highpriority impact areas

Progress against our 2007 targets is shown on pages 34 and 35. Of the five targetsthat we set, we achieved four. A number of initiatives, including our new MeetingZoneteleconferencing system, brought the business tangible benefits. In MeetingZones first nine months we used it for some 3,000 meetings, allowing colleagues tominimise CO2 emissions by reducing travel.

To help the CR Manager and senior managers around the business to determine how wellwe are performing, we have developed a CR scorecard. This comprises 26 different KPIs

across our three cornerstones. Where appropriate, we try to acquire data from existingmanagement information systems around the business. This should help to embed CRinto the business, linking it clearly with our business objectives, while avoiding duplicationof effort in data collection.

We aim to embedour CR strategy intocolleagues operationalprocesses.


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OUR STAKEHOLDERSOur stakeholders views and opinions are

important: they help inform our thinkingand tell us how well we are performing.Listening to these groups helps us toidentify the issues that concern themand take a balanced view of what isimportant or material when we developour response.

As stakeholders become more interestedin CR their expectations of us grow. It isincreasingly important that wecommunicate and demonstrate ourapproach clearly. Our CR cornerstoneshelp with this process, but proactivelyengaging with our stakeholders gives us

an opportunity to explain the nature ofour business, our strategy and how weimplement it. Through constructivedebate we hope to influence their opinionof us.

Each of our businesses takes responsibility for its own internal communication along lines that are shared acrossthe Group. They all have intranets and run annual business conferences, regular management briefings, questionand answer sessions with senior management, and annual colleague engagement surveys.

Colleagues

Customers

Brokers and introducers

Regulators and legislators

Investors

Suppliers and business partners

Growing a successful business depends on developing good relationships with customers. Most customercommunication is achieved through direct contact, whether face-to-face, by telephone or by letter. Each businessundertakes regular customer surveys and monitors customer feedback.

Brokers and introducers are important business partners. We develop good relationships with them to ensureconsistent service for our customers.

Dialogue with regulators and legislators is managed at Group level. A key role of our Compliance team is building aconstructive relationship with the Financial Services Authority (FSA) to ensure we meet its standards. Our CorporateAffairs team is responsible for the contribution we make to consultations affecting the financial services industry.They also manage the development and maintenance of relationships with policymakers and legislators.

We are a member of FTSE4Good and continue to engage with shareholders and key research agencies on CR issues.Investor communications are managed centrally, with involvement from the business units as required.Communication channels include analyst presentations, meetings with investors, our website and publicationsaimed specifically at investors.

We seek to develop long-term mutually beneficial relations with our suppliers and business partners. This relies ongood two-way communication. Relationships are managed by our Group Services department, supported byfunctional expertise when appropriate. We set minimum CR standards for suppliers and encourage them toconsider CR issues.

Communities and charitable organisationsWe actively engage in local and national community initiatives that meet our community investment criteria. Ourinvolvement is managed by our CR team and Community Investment Officer, supported by appropriate colleaguesfrom around the business.

Non-governmental organisations (NGOs)These are bodies with no affiliation to governments, whose work is focused on specific issues. They campaigndirectly with companies or indirectly via public awareness campaigns. We seek to engage with NGOs in waysappropriate to the issues being addressed.

By working with trade associations we contributeto the legislative debate.

We continue to remain a member of FTSE4Good.


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BEING A RESPONSIBLE FINANCIAL SERVICES ORGANISATION

As a company operatingin the non-standardconsumer finance market,we face increasingscrutiny from a widerange of stakeholders.

Responsiblegrowth


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Our greatest obligation is to our customers:our success and positive reputation

depend on treating them fairly andwith respect offering them the rightproducts, and lending and collectingin a responsible way that takes properaccount of their circumstances.

Priorities Maintain high operational standards

Meet our regulatory obligations

Engage and influence policymakers

Ensure excellent customer service

Promote financial education

Performance highlights

In Welcome Financial Services (WFS), fiveCustomer Expectations and the CustomerExperience Group established to supportdelivery of excellent customer service

Investment in innovative technology tosupport our high operational standardsand business growth, and to help usmanage the customer experience better

Collaboration with the Association ofBritish Credit Unions (ABCUL) to highlightthe impact of financial exclusion onthe poorest in society and ways out ofthis problem

Launch of long-term collaborative projectwith Credit Action to distribute 500,000copies of its Moneymanual each yearto students leaving school, and researchtheir attitudes towards moneymanagement

UNDERSTANDING OURRESPONSIBILITIES

WFS is one of the UKs leading playersin non-standard consumer finance.It comprises Welcome Finance andShopacheck, its lending businesses, andWelcome Car Finance, its car retail operation.It lends to individuals with non-standardcredit profiles people who may not haveaccess to mainstream lending, typicallybecause of perceived shortcomings in theiremployment, residency or credit histories and gives customers an opportunity tobuild or repair their credit profiles.

Through WFS we offer a range of productscarefully tailored to our customer base. Byapplying rigorous lending and screening

criteria we ensure these products do notoverburden our customers or place them infinancial difficulty. We treat our customersfairly and believe our products and servicescan play a role in helping to mitigatefinancial and social exclusion.

Sometimes a customers financialcircumstances may change, for examplethrough redundancy or a family break-up.Our policy of developing close customerrelationships helps us to respond quicklyto understand the situation and find waysto help them through their financialdifficulties for example by accepting

lower loan repayments for a period. If wecan help customers through a problemsuccessfully, we can still do business withthem and prevent a short-term problemfrom excluding them from mainstreamfinancial services for years ahead.

The Lewis Group (Lewis) is a UK leader indebt recovery and investigation services,

serving both external clients and WFS.Its external clients are mainly large issuersof credit cards and unsecured loans as well as both central and localgovernment departments, insurancecompanies, catalogue retailers, utilities,telecommunications businesses andeducational institutions. It is also one ofthe UKs largest buyers of non-performingdebt, which it collects on its own account.

Debt recovery, like consumer credit, hascome under increasing scrutiny in recent

years because of improper practicesemployed by some companies in theindustry. These include high-pressure

collection tactics and failure to identifythe correct debtor. Lewis has a reputationfor quality and ethical collection practices,and subscribes to the Credit ServicesAssociations code of conduct. This providescomfort to blue-chip clients concerned tomanage the risk to their own reputations.

Cattles Invoice Finance (CIF) providesworking capital finance to small andmedium-sized businesses throughout theUK. It has a broadly spread portfolio of725 clients, typically companies withturnover up to 5 million. If a clientbusiness gets into difficulties, we work

with its management to help them resolvethe financial issues.

During 2007, we established our DebtManagement Agency (DMA) in Welcome Financeto support customers receiving debt advice andcounselling. Why? Because we believe customersin financial difficulty may need more time and

attention from us. They are often unable to makelarge payments and may have a number ofcreditors to satisfy. Colleagues working in theDMA are expert in assessing such situations andfinding the right solution for both the customerand ourselves.

Establishingour DebtManagementAgency


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continued

MAINTAINING HIGH OPERATIONALSTANDARDS

We need high operational standards tomanage all the risks associated with thenon-standard consumer finance market.We cannot afford to be imprecise oruncontrolled in our approach: at best thiswould risk damaging our customerrelationships and at worst we might treatthem unfairly or place undue financialburden on them. That is not what we or ourregulators want. Maintaining these highoperational standards is perhaps the mostimportant aspect of what we do each day.

In WFS we have standard operatingprocedures that define the way colleaguesmust work, particularly to meet the

expectations of its regulators, the FSA andthe Office of Fair Trading (OFT). Ourcompliance team of over 50 peoplemonitors how we meet these standardsand is quick to identify any failure to upholdour standards or any better way of working.

To live up to our standards we ensure thatall colleagues are well-trained and

knowledgeable about the industry and theissues they may face. We introduced ourLicence to Sell and Licence to Collecttraining programmes in 2006 to enhanceour sales and collection processes. Both aresupported by formal accreditation, whichcolleagues must pass.

We have also revised our induction processfor new colleagues. For example, people

joining our branch network attend atwo-day workshop on the essential skillsneeded to manage customer accounts andmeet our exacting standards. This includesa test, which they are expected to pass, andforms the basis of ongoing training over the

next three months, including Licence to Selland Licence to Collect. This off-the-jobtraining is supported by a skills workbookthat new colleagues must complete, withsupport from their branch manager.

Our standard operating procedures

define the way our colleaguesmust work, particularly inrelation to addressing regulatorsexpectations.

To live up to our standards we ensure allcolleagues are well-trained and knowledgeable.


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Investing in this training, and other similarprogrammes, means that as we grow the

business we will have the trainedcolleagues we need to maintain our highoperational standards.

In Lewis we work closely with clients toensure high levels of service and atransparent and robust approach. Allprocesses in the business are documentedand regularly reviewed, in line with itsISO9001 accreditation. We have clearservice level agreements with clients,defining the standards we must meet. Aspart of this process, our risk analysts workclosely with clients to determine the mosteffective collection process. To protect ourreputation for high ethical standards we

will always take a conservative view ratherthan risk damaging our own standing orthat of our client.

We invest heavily in colleague training,both internally through our own structured

workshops, one-to-one sessions andseminars, and through external courses.All collections colleagues are encouraged toattend a specialist course run by the CreditServices Association to gain its Diplomaqualification. Several Lewis managers arealso members of the Institute of CreditManagement.

In CIF we have clearly defined proceduresfor evaluating each new businessopportunity and the risks associated with it.Our internal audit team regularly reviewsall our operational processes . Each newclient is assigned a dedicated clientmanager to oversee the relationship so that

we can respond quickly and efficiently todevelopments. We aim to be straightforwardto deal with, and are trusted by clients andintroducers alike to deliver innovative andflexible solutions in a clear and friendlymanner.


The Credit Today awards recognise and reward topperformers throughout the credit industry. CIFand Lewis were both recognised in the 2007awards: CIF won the Factor and Discounter of theYear Award, while Lewis was commended in theDebt Purchaser of the Year category.

CIF was recognised for its commitment toinnovation and enhanced business practices,and excellent client satisfaction and colleaguedevelopment. Credit Today commented thatits focus on its ambitious goals and attentionto the client and developing its staff stood out

in this category.Lewis was shortlisted for the way it has developedits client services, and invested in infrastructureand resources to meet the ever-changing needsof both purchase and commission-based clients.


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ENSURING CUSTOMER EXCELLENCEWe want to attract and retain good quality

customers, and to meet their expectationsof us. In 2007, we worked hard to find waysof improving our customers experiencewith us.

In WFS we defined five expectationsthat form the basis of our dealings withcustomers. These relate to the way ourcolleagues behave and the customerculture we demonstrate. They supportour commitment to the FSAs ConsumerOutcomes for Treating Customers Fairly(TCF), which set out the outcomes weshould deliver throughout the customerlifecycle. Our commitment to TCF is setout in our Treating Customers Fairly policy,

which can be downloaded from our websiteat www.cattles.co.uk.

Our five customer expectations sit undereveryone deserves a welcome and are:

Everyone deserves a warm welcome

Everyone deserves to be treated fairly

Everyone deserves to feel in control

Everyone deserves the opportunityto improve their life

Everyone deserves promises to be kept

We have set up a Customer Experience

Group, bringing together leaders fromevery part of WFS, to help embed theseexpectations and identify initiatives to

support the delivery of excellent customerservice. This group is supported by a

Champions Group, which reviews andadvises on the development of interactiveteam sessions for developing ourcolleagues in these expectations.

Information technology plays a major rolein the way we work with our customers,and we have invested significantly innew technology such as telephony andhandheld computers. In WFS we havemade a multi-million pound investment ina new customer relationship managementsystem, to improve both our customer andcolleague experience. This provides, forexample, a single view of each customerthat can be accessed from all parts of our

business as they travel from initial inquirythrough to their final repayment. During2007 we provided colleagues with over6,400 days of classroom training on thisnew IT system.

Across the business we have been usinga number of different interactive voiceresponse (IVR) messages, which may havebeen confusing and inconsistent for ourcustomers. We are now implementinga new IVR message in all parts of thebusiness, using a single voice one ofour colleagues, who was chosen in acompetition. Our aim is to give customers

straightforward and seamless telephoneaccess at any time of day.

Following a successful pilot, we are introducingmobile handheld technology in Shopacheck.This presents us with some very significantbenefits in terms of our customers, cost andthe environment. As our agents will no longerbe collecting on paper-based collection sheetswe will use over 16 million fewer pieces of papereach year. As our agents will now be linked directlywith our central IT systems, they will be able

to record collections, issue loans and updatecustomer records in real time. This meanscustomer balances will be updated morequickly and the overall customer experiencewill be enhanced.

Using

technologyto improvecustomer service

Through our commitment to TCF

we continue to identify ways toenhance the customer experience.



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We have also introduced new CustomerSales and Service Centres (CSSCs). These

three call centres bring together around700 people from across Welcome Finance,combining their knowledge and strengthsto provide excellent customer service.Customers now benefit from improvedand more consistent support and longeropening hours. We handle customerinformation better by working as a singleteam, without having to transfer customersbetween operatives. Achieving this requireda substantial investment in training:colleagues joining the CSSCs undergoa 15-day induction programme.

We market our consumer products in avariety of ways, depending on the product.

In all our agreements and explanatoryliterature we adhere strictly to theregulations on visual prominence ofinformation such as APRs and the increasedrisk of a loan secured on a property. Alldirect marketing material is reviewed andsigned off against these regulations by thelegal compliance manager.

All customers are given pre-contractualinformation to ensure they are able to makean informed choice. We also try to make ourcredit agreements as clear as possible, toensure that our customers know exactlywhat they are entering into. For example,

if they buy an insurance product with aloan they must show their agreement witha separate signature. The Welcome Financecustomer introduction pack carries thePlain English Campaigns Crystal Mark.

MEASURING CUSTOMER SATISFACTIONIn WFS we undertake regular surveys to find

out what our customers think about us.These cover all aspects of the customerexperience including the applicationprocess, branch service and colleagueattitudes. Customers rate each aspect andgive an overall rating out of 10. The figureshave remained consistently high over thepast year, with an average rating of 8.5out of 10 (2006: 8 out of 10). As a resultof the enhancements to the way wemanage customer experience we believethere will be further improvement inour customer satisfaction ratings. We arecurrently investigating more sophisticatedways to measure satisfaction and gain

further insight into how we can enhanceour service.

Each Lewis client has a dedicated clientservices manager who works closely withthem to develop the relationship andidentify and address any potential issues.At the beginning of 2007 we supplementedthis with online client surveys solicitingfeedback on clients perceptions of therelationships and the level of servicethey receive. During 2007, 76% of clientsgave a positive response. The surveyswill continue in 2008 and our target isan 80% positive response.

In 2007, we began using a new kind ofclient satisfaction survey in CIF: the Net

Promoter Score method, used by thousandsof businesses worldwide. The new surveysask clients one core question How willingare you to recommend CIF to a friend orassociate? supported by nine lifecyclequestions. This allows us to divide clientsinto three categories: Promoters, whoare loyal and enthusiastic; Passives, whoare satisfied but unenthusiastic; andDetractors, who are unhappy and feeltrapped in a poor relationship.

The proportions of each group give usa score that we can use to track clientsatisfaction. We will roll the method outover the next year throughout CIF to create

a complete picture. Thereafter, six-monthlysurveys will be undertaken to highlightareas for improvement.

We continue to invest in our cultural and valuesprogrammes for the benefit of both colleaguesand customers.


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INFLUENCING POLICY MAKERSAND REGULATORS

We operate in an increasingly complexlegislative and regulatory environment.As a responsible financial servicesorganisation, we believe the consumerbenefits most from regulation that protectsthe vulnerable while avoiding excessivecosts that drive up the price of productsand services. This means we actively seekto enter into debate on relevant issues. Weprefer to be involved in the debate, ratherthan waiting on the sidelines until changesin legislation are forced upon us and webelieve our understanding of the challengesfacing both our customers and the industryputs us in a unique position to make a

positive contribution.

We make our views known in a number ofways. We strive to create good relationships

with key policy and decision makers, aswell as being an active member of severaltrade associations. Our Director ofCorporate and Regulatory Affairs sits onthe high level Consumer Credit Forum, partof the Department for Business, Enterpriseand Regulatory Reform (DBERR), and chairsthe Consumer Credit Trade Association.We are also represented on the ConsumerCredit Associations National ExecutiveCommittee and, through WFS, the boardof the Finance and Leasing Association.

Lewis is a member of the Credit ServicesAssociation, the Debt Buyers and SellersGroup and the County Court Users

Association. CIF is a member of theNational Association of Commercial andFinancial Brokers and the Asset BasedFinance Association.

As a member of these trade bodies weadhere to their respective codes of conductand work closely with them to engage withpolicy makers and debate issues in themarkets where we operate.


continued

The understanding of our market

enables us to positively contributeto the debate on regulatory issues.

We understand the challenges facing both ourcustomers and the industry.


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WFS is regulated by the FSA for advisingon and selling general insurance products.

We seek a close and proactive relationshipwith the FSA and support its aims ofmaintaining market confidence, promotingpublic understanding of the financialsystem, securing appropriate consumerprotection and reducing financial crime.

In November 2006, the CompetitionCommission reported on its investigationinto the home credit market. Cattles waspart of this inquiry. The report identified anumber of adverse impacts on competition,and recommended remedies. TheCommission made an Order to give effectto these remedies in September 2007with the aims of opening up the market

to greater competition and bringingconsumers lower prices and more choice.Practical steps to achieve these objectivesinclude a requirement for home creditcompanies to share data on their existingcustomers payment records. Lenders arealso required to publish information on theprice of loans on a website, making it easierfor customers to shop around and compareoffers. We endorse greater transparencyin the home credit industry and have takena leading role in shaping the way theremedies will be implemented throughoutthe industry.

In February 2007, the OFT referred paymentprotection insurance to the Competition

Commission for inquiry. The Commissionplan to publish their provisional findingsin May 2008 and expect to issue their finalreport in late 2008. We have submitted22 separate response documents to theCommission and will continue toco-operate fully.

In 2007, we submitted responses to over20 consultation papers issued by the FSA,OFT, Financial Ombudsman Service andDBERR. We also submitted responses toconsultations from the Better RegulationExecutive, Insolvency Service and others.

Cattles was invited to speak at the Citizens

Advice Scotland Debt Focus Group inEdinburgh at the end of November, a returnvisit after a talk given the previous year.The theme of the 2007 talk was Onepersons financial inclusion is anothersirresponsible lending a quote by MarkHoban MP at the Conservative partyconference fringe meeting.


Working in

partnership withthe Associationof British CreditUnions

In autumn 2007, we joined with the Associationof British Credit Unions (ABCUL) to host successfulfringe meetings at the major party politicalconferences. The meetings examined the impactof financial exclusion on the poorest in societyand ways out of this problem. Each was addressedby a leading figure from the relevant party.

This was the first time that credit unions hadshared a platform with a non-standard financeprovider to present a united, co-operativeapproach to legislators and other stakeholders.The Government is committed to makingaffordable credit and banking services availableto the financially excluded. ABCUL recognises thatexisting credit unions lack the capacity to meetcurrent demand and spoke about the need fornew legislation to enable the sector to scale up.

All the party speakers expressed their strongsupport for the work being done by thenon-standard finance sector and credit unionsto tackle this significant problem. The meetingsenabled us to send a very credible message toGovernment and Opposition about the dangers

of over-regulation: the more restrictions that areplaced on the sector, the more people will facefinancial exclusion.


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continued

During the year, we continued to supporttwo prominent organisations in financial

education, through financial assistance andcollaborative projects:

Credit Action (www.creditaction.org.uk)is a charity that is widely regarded as oneof the most important voices in the fieldof money management and education.It offers a range of resources, tools andtraining to help everybody manage theirfinances. It operates at national levelthrough advocacy, collaboration andpartnerships with various groups andcompanies; and at local level throughprojects targeted particularly at thosemost vulnerable to financial difficulties.

DebtCred (www.debtcred.org.uk) is theHigh Sheriffsfinancial literacy project.Its primary aim is to prepare young peoplefor university life or employment byeducating them about the sensible use ofcredit, personal financial managementand the hazards of over-indebtedness.

During 2007 we took part with CreditAction in a pilot project sponsored by theEsme Fairbairn Trust to develop a set of

jargon-free postcards offering moneymanagement advice. The aim was to see ifthese were a useful way to offer ourcustomers additional support and advice to

stop them getting into financial difficulty.Shopacheck managers used the cards in 44

postcode areas, predominantly in Bradfordand Leeds. This initial project indicatedsome clear benefits from using the cards for example, they help us establishcommunication with customers who maybe embarrassed to talk to us. But the initialtake-up of cards was low in comparisonwith the projects aims. We are currentlyreviewing the project results to understandif this approach represents a usefuladdition to the advice we currently provideto customers.

In 2006 we sponsored the DebtCredKS4Finance project, funding thedistribution of a DebtCred-produced money

management CD to all state secondaryschools in England and Wales. This wasdescribed in last years CR Review. The CD isstill being used extensively in schools acrossthe UK, but proposed changes to thecurriculum will require the DebtCredresources and materials to be revised. Whenthe curriculum change is implementedin September 2008, KS4Finance willbe three years into a predicted shelf lifeof four years. During 2008, we will workwith DebtCred to respond to the curriculumchanges and make the material morerelevant to students for today andtomorrow.

By working with DebtCred we help to educateyoung people about money management.

Collaborative working with Credit Action toimprove personal financial awareness.

SUPPORTING FINANCIAL EDUCATIONWe want to promote sound money

management and raise standards offinancial education. Everybody should beable to make informed and educateddecisions about their personal finances,especially when buying financial products.This would help to reduce levels ofover-indebtedness and the number ofpeople with debt problems.

Recognising that financial difficulties aresometimes unavoidable, we continue tosupport the Consumer Credit CounsellingService (CCCS), a UK charity that helpspeople facing debt problems. The CCCSprovides a free national telephone serviceand a network of drop-in centres that give

free, independent and realistic advice.

We arecommittedto raisingstandardsof financialeducation


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In 2007, Credit Action produced a Moneymanual forstudents which aims to improve young adultsfinancial awareness and money management skills.We agreed to fund the production and distributionof the Moneymanual for a period of four years.UCAS has agreed to include the Moneymanual inthe student offer pack it sends to some 500,000students applying for university places this year.Although UCAS estimates that one in sevenstudents who receive an offer pack do not actuallytake up a place at university, distribution in this wayhas the additional benefit of bringing theMoneymanual to a proportion of young people wholeave the education system after sixth form. We willreview our commitment in 2011, by which time weexpect to have reached 2 million young adults onthe brink of financial independence.

The aim of the initiative is twofold:

To ensure that students start university with abetter understanding of how to manage theirmoney. To this end all this years applicants willreceive the Moneymanual in their UCAS offerpack; and

To monitor the effectiveness of the Moneymanualin helping students to manage their money aswell as increasing understanding of studentconcerns about money and finance throughoutthe university experience.

A research project to assess changes in attitude tofinance and money management behaviour will runin parallel to the four-year distributioncommitment, and forms part of our overallcommitment to Credit Action.


Moneymanualfor students


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18Cattles plc


BEING A GOOD PEOPLE BUSINESS

Having the right people,with the right skills andhigh levels of commitment,is essential to our success.

Growingas people


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As our colleagues are at the heart of whatwe do and our future growth, we aim to

attract the very best people and invest inthe development of their skills.

Developing strong relationships withthe communities that we serve can helpto raise awareness of the Company.Contributing to the wellbeing of thesecommunities can encourage customersto see us more positively and help us toattract and retain good quality recruits.Enabling colleagues to get involved in localcommunity initiatives can help to boostmorale and a sense of pride, as well asprovide an engaging way to learn new skillsand build relationships with each other.

Priorities Develop our colleagues to maximise their

talent and match the needs of ourgrowing business

Attract and retain the very best people

Recognise and reward colleagues fortheir performance

Create a working environment thatmakes our colleagues feel safe and valued

Promote effective, clear and consistentcommunication

Invest in the communities in whichwe live and work

Encourage colleague involvement in

community activitiesPerformance highlights Best Employer Benefits Communications

Award at the DWF Employer Awards andthe Most Effective Benefits Programmeat the HR Excellence Awards

Over 16,000 days of training delivered,equating to over three days for eachcolleague

82% of colleagues taking part in ourSpeak Up colleague perception surveygave a positive response to working forthe Group

Over 635,000 invested in communityactivities

Over 2,600 hours of colleaguestime givento community volunteering initiatives

OUR COLLEAGUES see Fig 1Cattles employed 5,008 colleagues at the

end of 2007 compared to 4,449 at theprevious year-end a 13% increase. Thecomposition of our workforce has remainedunchanged. We believe this reflects thestability of our business and provides a firmfoundation for future growth.

As a consequence of our improvedrecruitment techniques, the introductionof our new Your Reward initiative, ourstrong culture of training and developmentand effective two-way communicationacross the business, we saw animprovement in colleague retention:our 2007 colleague turnover was 30.5%,compared to 33.1% in 2006. The average

length of service was just over four years.

We have a suite of group policies thatexplain how we support colleagues.Policies include those relating to equalopportunities and diversity, flexibleworking, whistle-blowing, and grievanceand disciplinary issues. The way peopleinteract with our business is summarisedin our Approach to Human Rights andColleague Care, which can be downloadedfrom our website at www.cattles.co.uk.

In addition, Welcome Finance andShopacheck are both accredited with theInvestors in People standard.

We pride ourselves on our processes for enablingcolleagues to fulfil their career aspirations.

Fig 1.OUR COLLEAGUES

2007 2006 2005

Number of colleagues 5,008 4,449 4 ,389% part time 8% 8% 8%Male 50% 49% 51%Female 50% 51% 49%


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continued

PERFORMANCE RECOGNITIONAND REWARD

We foster a culture that rewards goodperformance and recognises eachindividuals contribution to the business.Across the business, colleaguesperformance is formally appraised twicea year. These appraisals provide a basis fortheir personal development and influencetheir remuneration.

Our appraisal process evaluates colleaguesagainst a number of criteria relating totheir job role and position in the Company.In many cases CR is implicitly included inthese criteria for example, treatingcustomers fairly but colleagues havetraditionally not been measured explicitly

on CR issues. In 2007, we piloted aninnovative project to incorporate CR intothe appraisal of colleagues in our newCustomer Sales and Service Centres. TheCSSC Learning and Development Matrixis a set of personal measurements groupedunder key headings, including CR. Theseallow every colleague to identify theirdevelopment needs and understand howto realise their goals.

We pride ourselves on our processesfor enabling colleagues to fulfil theiraspirations with us. In many cases we canadvise individuals on precisely what actions

to take to move from one grade to the next.In 2007, 777 colleagues were promoted

within the business. This is in additionto those recruited externally. Both ensure

we maintain the mix of skills andexperience we need to grow.

In 2007, we continued to develop ourinnovative Your Reward initiative, whichallows colleagues to tailor their rewardpackage so it best suits their needs.Each colleagues reward is made upof three elements: core benefits,benefits that can be flexed, and optionalor voluntary benefits. Core benefits,depending on position, include pension,life assurance, healthcare insurance, ShareIncentive and Sharesave plans, eyecarevouchers and access to our ColleagueAssistance Programme.

The flex component gives colleagues theoption to trade components of their currentpackage. For example, they can trade twodays holiday entitlement up or down foranother benefit. For colleagues on lowergrades who have not yet accrued significantbenefit entitlements, we have introduceda new allowance of 50 each towardswellbeing benefits such as a healthtreatment cash plan, dental insuranceand gym membership.

In recognition of our approach to colleaguebenefits and reward we won twoprestigious awards in 2007: Best EmployerBenefits Communications Award at theDWF Employer Awards, specifically for the

Our culture seeksto recognisecolleaguesachievements

777colleagues promoted in 2007

381invested per colleague in learningand development


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20072006

5,300

16,019

Fig 2.COLLEAGUE TRAINING (Number of days)

21Cattles plc


way we communicate benefits andentitlements through our Total Reward

approach, and Most Effective BenefitsProgramme at the HR Excellence Awards.

LEARNING AND DEVELOPMENTWe foster a strong culture of learningand development across the business.We want to give colleagues the skills andknowledge they need to have a successfuland rewarding career while contributingto the Companys success.

During 2007 we delivered over 16,000 daysof training in addition to regular on the jobtraining and coaching provided by linemanagers see Fig 2. This equates to3.4 days or 381 per colleague. It was a

significant increase on the 5,300 daysprovided in 2006 and reflects additionaltraining to help colleagues make best useof our investments in new technology. Forexample, we delivered over 6,400 days oftraining on our new customer relationshipmanagement system alone. Excludingsystems training we delivered 9,575 days.

All new colleagues receive a thoroughinduction into the business. The lengthof this depends on the nature of their role.Every induction includes an introduction toour approach to CR and our CR cornerstones.

At WFS we use the Aspire programmeto identify, log and monitor personal

development. This helps line managersto identify colleaguestraining needs andmonitor their progress against clearlydefined career paths. It also helpscolleagues to track their progress, incombination with our appraisal process,and meet their career objectives. Duringthe year 189 colleagues were promotedinto higher grades (2006: 165), an increaseof 15%. A further 588 colleagues werepromoted within their current grade(2006: 511), an increase of 15%.

In our 2006 CR Review we reported theintroduction of the Management Academy.This is a structured management

development programme designed toenhance the management skills of talentedindividuals at various levels in the business.The Foundation Management Skills course,part of the Management Academy aimed ataspiring first time line managers, has sincereceived external accreditation from theInstitute of Leadership and Management.This means that colleagues completing thecourse now receive an externally recognisedqualification. The first colleagues to benefitfrom the new course graduated inDecember 2007.

All Lewis colleagues have access to onlinetraining, which fulfils many of their training

needs. This is supported by a dedicatedteam of trainers who provide job specifictraining, for example, on the collectionprocess and our operating procedures.All our collections staff are encouragedto attend a specialist course run by theCredit Services Association to gain the CSADiploma qualification.

Similarly, CIF has an extensive trainingprogramme to ensure that colleaguescan perform to their full potential. All linemanagers are required to attend a one-daycourse on how to recruit effectively,manage performance and get the best outof their teams. All colleagues are required

to attend anti-money laundering and dataprotection training sessions on an annualbasis. We also offer colleagues openworkshops to support them in their currentor future roles. These include sessions onunderstanding finance and financialanalysis, taking the first steps intooperational and client management, andeffective communication. We also supportcolleagues through relevant professionalqualifications such as those with the AssetBased Finance Association.

Developing our colleagues to maximise theirtalent and match the needs of our businessis key to our success.


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continued

LISTENING TO OUR COLLEAGUESWe have a range of mechanisms for

communicating with colleagues and lettingthem know what is happening in ourbusiness. This helps to create a sharedculture and a belief that everyone cancontribute to and benefit from the successof the Group. We endeavour to create aculture in which colleaguesviews andopinions are considered important. Wewant colleagues to feel valued and able toprovide ideas and perspectives thatimprove working practices.

Our annual Speak Up survey, covering WFS,Lewis and Cattles support functions, askscolleagues their views on a number ofdifferent issues including their perceptions

of the Company, its leadership, linemanagement, team working, trainingand development, wellbeing, customerexpectations and CR. In this years surveywe were pleased to maintain anexceptionally high response rate of 87%.The proportion of colleagues agreeingor strongly agreeing with favourablestatements about the business was 82%.In addition, 97% said they get on withcolleagues and demonstrate TreatingCustomers Fairly in dealing with customers.

To gain a better view of colleagueperceptions we have changed the way

responses are measured to provide anindexed value. This value recognisescolleaguesresponses more accurately andis weighted to highlight differencesbetween what we do well and what wecould do better, to help us learn andimprove. In 2007, this indexed value was 59out of 100. We will report on this basis andin more detail in next years CR Review.

The Speak Up findings are used across theGroup to develop action plans that willdeliver a better working environment forour colleagues. This is done at Group leveland within individual teams. Eachdepartment head or area manager is given

anonymous feedback on the survey resultsfor their team, including an analysis ofstrengths and weaknesses. They can thenplan specific changes that, although oftensmall, can make a significant differenceto the way colleagues feel about workingfor us.

Colleagues continue to believe we arecommitted to caring for communitiesand the environment, and that theyare encouraged to support good causes see Fig 3. It is particularly encouragingto see that colleagues still support ourongoing commitment to improve standards

I am encouraged tosupport good causes.

I believe theCompany makes apositive difference tothe world we live in.(new for 2007)

I believe we shouldsupport moneymanagement educationin schools.

The Companydemonstrates itscommitment to carefor communities andthe environment.

Understanding our colleagues perceptions of CRThe Speak Up survey includes four questions onhow the business addresses CR. These only give usa snapshot of some of the issues, but help inbroad terms to gauge colleagues views of ourperformance.

Three of the four questions have remainedunchanged for the past three years and we cansee how colleagues responses have evolved. Weadded one new question this year on whether theCompany makes a positive difference to the worldwe live in.

20072006

7973

20072006

59

20072006

88 90

20072006

80 79

Fig 3.SPEAK UP 2007: CORPORATE RESPONSIBILITY (% favourable Agree or strongly agree)

87%response rate in colleague Speak Up survey

82%of colleagues gave positive response toworking for the Group

Case study


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24Cattles plc



continued

With this investment in driver training,our overall accident frequency, in terms of

insurance claims made per 100 drivers, hasreduced from 70% in 2006 to 63% in 2007.Moreover, analysis shows that the severityof accidents occurring has reduced asindicated by the overall cost of each claim.This has reduced from 641 per claim to438 for our trained drivers.

In 2007, we had three RIDDOR incidents(legally reportable under the UK Reportingof Incidents, Diseases and DangerousOccurrences Regulations 1995). Thiscompares with only two in 2006, when thenumber of people we employed was lower.

We want to look after our people, and our

Wellbeing programme aims to increasetheir awareness of the benefits of healthyliving and improve their workingenvironment. This includes benefits such ashealthcare, eyecare and childcare vouchers,and discounts on leisure activities andhealth insurance.

More recently we have introduced ourColleague Assistance Programme. This

is a free, independent, confidential andimpartial personal support service availableto colleagues and their immediatefamily members. It provides a telephonehotline with qualified advisers and alsoface-to-face meetings with specialistsif required. Advisers can provide general,legal and financial advice, and counsellingif appropriate.

COMMUNITY INVESTMENT see Fig 4Our community and charity work addressesa number of risks and opportunities. At themost basic level, healthy communitiesmake for healthy businesses so we aim to

play our part in them. There are also clearbenefits to be gained from improving ourreputation and profile in the communitieswhere we live and work. But perhaps ourstrongest motivation comes from within:taking part in community activities ispopular with our colleagues. In thecompetition for recruitment and retention,this kind of positive experience can makean important difference.

When the UK was hit by widespread floodingin 2007, our offices in Hull were particularly badlyaffected. There were two immediate concerns:ensuring the safety of our colleagues manyof whom were personally affected by floodingat home, and maintaining continuous servicefor our customers.

On the afternoon the floods began, it was clearthat our Hull CSSCs were likely to be affected.We put our crisis management plan into action.Business was transferred to our NottinghamCSSC where colleagues volunteered to work extrashifts to deal with customers calls.

A buddy system was implemented to ensure thatall our colleagues were accounted for and theirsafety assured whilst travelling through theflooded areas between office and home.

We very much appreciate our colleagues teamworkand commitment during this difficult time.

Case study

Colleagues develop new, and

enhance existing, skills throughcommunity activity these skillsare transferable to the workplace.

28%increase in colleague volunteering hours

Managinga crisis Dealing withflooding in Hull


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25Cattles plc


We aim to provide tangible support directlyin the communities we serve by focusing on

three areas: Raising standards in financial education

Improving the welfare of young people

Addressing issues of social disadvantage

We do this in three main ways:

Developing partnerships with a smallnumber of key charities or communityorganisations whose work relates toour business activities and communityinvestment policy. This concentratesour support to maximise its impact.

Favouring community activities in

which our colleagues have a particularinterest or skills. We believe communityinvolvement should contribute tocolleagues personal development, so weencourage volunteering by offering paidtime in line with our volunteering policy.We facilitate and promote payroll giving,and participate in matched fundraising.

Focusing our donations of money, timeand gifts in kind on community initiativesthat link with our core business and meetour community investment policy.

Our Community Investment Officeridentifies and co-ordinates our community

activities, particularly volunteering projects.A Charity Panel of senior managers, chairedby the Company Secretary, evaluatesrequests for financial donations over 5,000against formal criteria in line with ourcommunity investment policy. Donationsunder 5,000 are considered by the CRManager and approved directly by theCompany Secretary. More details are givenin our Approach to Community Investment,which can be downloaded from our websiteat www.cattles.co.uk.

In 2007, the Group invested 635,085in community activities and initiatives.This includes financial donations, as well

as donations of time. It equates to 0.38%of pre-tax profits.

RISK.MANAGED.

2007200620052004

491

1,717

2,059

2,644

Fig 5.VOLUNTEERING HOURSDONATED

Fig 4.COMMUNITY INVESTMENT

2007 2006 2005 2004

Financial donations 409,946 433,621 396,101 262,727Gifts in kind 50,972 2,300Volunteering 46,799 33,726 26,079 7,931Management time 178,340 167,598 127,929 114,837

Total investment 635,085 685,917 550,109 387,795% of pre-tax profits 0.38 0.52 0.48 0.38


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continued

Our volunteering projects included:

Wheeler Street Primary School

gardening project, HullColleagues from one of the CustomerSales and Service Centres in Hull workedalongside the Woodland Trust to createa lasting memento of the childrens workat the Wheeler Street Primary School.They excavated part of the school playingfield and fixed concrete paving slabs, whichthe children had created, into a nauticallythemed display. Logs created the outlineof a boat and trees were planted toenhance the whole play area.

Community benefit: Wheeler StreetPrimary School teacher, Julie Nunn said:

Cattles has been fantastic, and with thehelp of volunteers we now have a pleasantoutdoor environment for pupils to enjoy.

Business benefit: This project gaveindividuals from different departments theopportunity to work together. They learnedthat teamwork, important in the workplace,was just as vital for the project. It improvedtheir communication skills and builtrelationships that have continued inthe business.

Ollerton Pit Woods restoration project,Nottingham

One of our senior managers took his wholemanagement team out on a team buildingday. Colleagues from two sites, separatedby some 80 miles, joined to clear deadwood as part of the Forestry Commissionsprogramme for safe use for the community.This opened up an overgrown pathwaythrough Ollerton Pit Woods, a 225-acreNottinghamshire beauty spot beingnurtured on a former colliery site by theForestry Commission.

Community benefit: The ForestryCommission said: The help we had wasinvaluable: we do not have the manpowerto carry out such tasks. The transformation

is amazing and visitors can once againenjoy walking and exploring, while enjoyinggreat views over the local countryside.

Business benefit: The management teamwanted to inspire their own teams to getinvolved in community activity and feltthat leading by example was the wayforward. It was also an excellent way tobuild team spirit and see a positive resultfrom the teams efforts.

COLLEAGUE VOLUNTEERINGWe promote colleague volunteering in

the firm belief that it not only helps buildstrong links with local communities butalso gives colleagues opportunities tolearn new skills and build team morale.

Hands Up, our volunteering initiative,encourages colleagues at all sites tomake an impact in their localcommunities. We work closely withBusiness in the Communitys nationalemployee volunteering programme, Cares,which encourages businesses to developpartnerships with local communitiesand helps colleagues to volunteer theirexpertise and skills to communityprojects and initiatives. However, we

are increasingly sourcing our activitiesthrough the Hands Up Committees atour main office locations, becausethey can develop closer links with localcommunities and better understandtheir needs.

In 2007, our colleagues undertook 2,644hours of volunteering an increaseof 28% on 2006. This indicates thecontinuing commitment shown by ourcolleagues and the importance we attachto these activities.

Taking partin communityactivities ispopular withour colleagues


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Ings Road Resource Centre, HullColleagues from our office at Hessle worked

together to create a sensory garden at theIngs Road Resource Centre, a communitycentre used by the local community andadults with learning difficulties. Theyerected and painted fencing and brightenedup the whole area, working with other localbusinesses to provide plants and shrubs.

Community benefit: The volunteerstransformed an overgrown area intoa garden designed to provide sensoryopportunities for sight, sound, touch andsmell that both disabled and able-bodiedvisitors can enjoy. They also widened accessareas to enable wheelchair users to enjoythe area. The Centre did not have the funds

for this refurbishment and the labourprovided was invaluable.

Business benefit: The team was motivatedto complete the challenge as they feltthe users of the Centre deserved betterfacilities. It had a really positive effect ontheir commitment to our business and afeeling of pride to represent us in the widercommunity. Bad weather forced them tothink on their feet, and this helped themdevelop their problem solving skills.

Coaching at West Bridgford High School,Nottingham

Colleagues undertaking the coachingmodule of the Management Academywere able to swap role play for somereal-life coaching with 22 Year 10 studentsat the West Bridgford High School inNottingham. Each student received a40-minute coaching session, with eachof the managers delivering two sessions.

Community benefit: The students gaineda unique insight into our business and thetypes of skills required for working in a largeorganisation talking with someone fromthe world of business gave them a differentperspective. The school felt the exercisewas extremely valuable in helping students

to achieve their potential and to set goalsand targets.

Business benefit: The coaching sessionsenabled managers to put into practicethose skills they had learned throughformal training, in a real-life and relativelysafeenvironment. This helped withconfidence and technique. The feedbackfrom the Academy candidates was positive,as they found the experience challengingand enjoyable.

Tree planting, HullAs part of a wider team from the local

community, 13 volunteers spent the dayplanting trees in the Bransholme area ofHull. Three thousand trees were planted double the days target of 1,500.

Community benefit: Hull is reportedlythe UKs least tree-populated city. The timewe donated for planting trees has broughtlong-term benefit to the local communityand wildlife. This has promoted awarenesswithin the community and our colleaguesthat getting involved will help futuregenerations, and given all involved a senseof belonging.

Business benefit: Our colleagues worked

hard to achieve the number of trees theyplanted and they were rightly proud oftheir achievement. As ambassadors for ourbusiness they took pride in making a lastingcommitment to their city, supported by thebusiness they work for.

Christmas activitiesIn addition, there was a substantial amountof volunteering activity over the Christmasperiod in 2007. In total we supported25 community partners, provided 453 giftor food hamper donations, and helped266 children enjoy a visit to either a partyor a pantomime.


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Welcome Car Finance donated a car to a group offirst-year apprentice mechanics from WakefieldCollege as part of Wakefields Make Your Markcampaign.

Make Your Mark is a national campaign to inspireyoung people to turn their ideas into reality bystarting a business or social enterprise, or making

an idea happen, in their community or school. ARover 200 car was the prize in a competition tocome up with an innovative and environmentallyfriendly way to transport it from Welcome CarFinances Castleford branch to the CollegesWakefield campus.

Three teams of students took part in the challenge,which focused on enterprise skills includingcommunication, ideas generation, teamwork,planning and presentation, competitive spiritand innovation. Each team gave a PowerPointpresentation, and the winning idea of vegetable oilwas selected by a panel of judges.

Paul Hibbert, Welcome Car Finance operationsmanager, explained: We were delighted to supportthe Make Your Mark campaign. As a business werecognise the importance of encouraging youngpeople, who will be the workforce of tomorrow, tohone their entrepreneurial skills.

On behalf of Wakefield College, Mark Butcher said:

We are very grateful to Welcome Car Financefor generously donating the car, which we willuse for training including stripdowns and rebuilds.


Oiling the

wheelsof enterprise


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BEING ENVIRONMENTALLY RESPONSIBLE

As a growing businesswe recognise wehave an impact onthe environment.

ConsiderateGrowth


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31Cattles plc


We have a duty to manage ourenvironmental impact and minimise it

where we can, and to raise awareness ofenvironmental issues among our colleagues.Our stakeholders expect us to do this, andit also helps us to operate more efficientlyand reduce our costs.

Priorities Increase awareness of environmental

issues within the business

Focus on our high priority impact areas

Operate in an environmentally efficient way

Improve our environmental performanceto generate tangible business benefits

Performance highlights

Company car fuel consumption reducedby 11%

CO2 emissions from electricity usein buildings reduced by 8% per unitof revenue

Hybrid cars introduced to companycar choice list

Meeting Zone teleconferencing systemlaunched to help reduce business travel

Successful pilot of the use of mobilehandheld technology in Shopacheck,which will reduce paper use significantly

ENVIRONMENTAL MANAGEMENTWe have identified four significant

environmental impacts on which we focusour efforts:

Energy used in our buildings

Fuel used by our transport fleet,particularly company cars

Use of materials and consumablessuch as paper

Waste generated through our activities

Our commitment is set out in ourApproach to Environmental Management,which can be downloaded from ourwebsite at www.cattles.co.uk. We take themanagement of these issues seriously:

as an office-based business we have arelatively small environmental impact, butwe recognise that as a growing businessthis impact will increase unless we putstructures in place to manage it effectively.

Our environmental impact is managedday-to-day by a dedicated EnvironmentOfficer, working closely with the FleetManager and the Health and Safety team.

We set environmental objectives and targetsannually. Progress against our 2007 targetsis shown on pages 34 and 35, and discussedin the sections below. Of the five targetsthat we set, we have achieved four.

We have continued to participate inBusiness in the Communitys Yorkshire

and Humber Index of EnvironmentalEngagement to assess our environmentalperformance, and in 2007 we maintainedthe Bronze position we achieved in 2006.

We continued our environmentalawareness raising programme amongcolleagues, including a number ofpresentations to teams across the Group.We also published articles on theenvironment in the WFS colleaguemagazine and posted an environmentalquiz on the intranet.

BUILDING ENERGY USE see Figs 6 - 8We use energy, predominantly electricity,

to heat and light our buildings and powerour computers and office equipment.Owing to difficulties in obtaining accuratedata for some of our smaller sites andleased properties, we only measure theelectricity used by our main offices whereover 25% of our colleagues work.

In 2007, we used 4.9 million KWh ofelectricity unchanged from 2006, despitesignificant growth in our business. Thisequates to 2,564 tonnes of CO2 emissions.To assess our efficiency we monitor ouremissions against revenue. In 2007 weemitted 2.7kg CO2 per 1,000 of revenue,

compared with 2.9kg in 2006 an 8%reduction. This stems, we believe, from thecolleague awareness initiatives and theswitch off campaign undertaken last year.

We focus our efforts on reducing energy usedin our buildings.

20072006

4.9 4.9

Fig 6.ELECTRICITY CONSUMPTION INBUILDINGS (Million KWh)

20072006

2,096

2,564

Fig 7.CO2 EMISSIONS FROM BUILDINGENERGY USE (Tonnes)

20072006

2.92.7

Fig 8.CO2 EMISSIONS FROM BUILDINGENERGY USE PER UNIT OF REVENUE(kg/1,000)


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BEING ENVIRONMENTALLY RESPONSIBLE

continued

In November 2007, we invited the CarbonTrust to help us find ways to reduce our

energy consumption. It undertook a seriesof site visits to identify opportunities forgreater efficiency. We are now consideringits recommendations and expect toimplement a number of them during 2008.

BUSINESS TRAVEL see Figs 9 - 11We have a substantial fleet of 1,452company cars (2006: 1,354), plus threecommercial vehicles and six vehicletransporters in Welcome Car Finance.

In 2007, our fleet used 2.3 million litresof fuel, a reduction of 11% compared with2006. Key factors were more efficient carsreplacing older vehicles and more driver

training. Fuel use equated to 6,030 tonnesof CO2 emissions. As an indication of fleetefficiency, this represented 6.3kg CO2 per1,000 of revenue compared to 9.5kg CO2in 2006.

But this does not give the whole picture.For a variety of reasons, an increasing

proportion of colleagues either do not usea fuel card (on which our consumptiondata is based) or choose to drive their ownvehicles and reclaim fuel costs for businesstravel. While our fuel card data covers themajority of fuel used on company business,giving a representative measure ofperformance, some consumption isomitted. Determining how this can bemeasured accurately is an aim for thecoming year.

During 2007 we introduced a newfleet policy that gives colleagues moreinformation on the cars they are ableto choose and the benefits of driving

efficiently. We also revised our list toinclude hybrid cars for the first time. Thisunderlines our commitment to reducingour fleets environmental impacts.

We have continued to develop our supportfor greener travel, and to this end weundertook an initial survey of colleagues tounderstand their travel habits. From thisinformation we plan to offer realisticoptions that encourage colleagues to beless reliant on car travel. We hope to reportmore fully on this in next years Review.

Projected saving of 16 million sheets of paperfrom introduction of mobile handheld technologyin Shopacheck.

Case study

20072006

2,630

2,331

Fig 9.FUEL CONSUMPTION BYCOMPANY CAR FLEET(Thousand litres)

Petrol

Diesel20072006

6,779

6,030

Fig 10.CO2 EMISSIONS FROMCOMPANY CAR FLEET(Tonnes)

20072006

9.5

6.3

Fig 11.CO2 EMISSIONS FROM COMPANYCAR FLEET PER UNIT OF REVENUE(kg/1,000)

11%reduction in fuel consumption

47%of waste recycled


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20072006

75.0

82.7

Fig 12.PAPER USE(Reams 000)

33Cattles plc


PAPER USE see Figs 12 - 13We are an office-based company and use

a lot of paper. In some instances this isunavoidable for example, when handlingcustomers credit agreements. But in othercases we are able to cut our consumption.

As already mentioned, following asuccessful pilot we expect to movein 2008 to mobile handheld technologyin Shopacheck to save over 16 millionsheets of paper a year. And, as part of CIFsbusiness efficiency programme, we havemade debtor statements virtually paperless saving over a million pieces of paper andan estimated 200,000 a year. This hasbeen made possible by encouragingdebtors to accept statements by fax

(generated and sent electronically) oremail, which both reduce postage,CO2 emissions and the use of envelopes.We are currently looking to apply theseprinciples to other paper-basedcommunications. By the end of 2008, weaim to be communicating electronicallywith 85% of the CIF client base.

Despite these and other initiatives, our useof office paper increased by 10% in 2007.

But this was less than the growth inbusiness. Paper use per 1,000 of revenueimproved by 17% reflecting the moreefficient use of paper within the business.The primary reason for this improvementwas the increase in the number of printersbeing used across the business withdouble-sided print capability.

WASTE see Fig 15During 2007 we focused on improving themanagement data received from our wastemanagement contractors. This enhanceddata enables improved control over theinitiatives that we implement and more

precise measurement of the associatedperformance improvement. We are nowconfident that we have reliable data whichcovers the Group.

In 2007, we generated 1,077 tonnes ofwaste compared with 927 tonnes in 2006 an increase of 16%. In terms of kg per1,000 of revenue we improved ourefficiency by over 12%.

Almost half the waste we generated (47%)was recycled. This proportion relates mainlyto paper waste. Our policy is to shred andrecycle all paper used in the business,whether it is confidential or not.

Meeting Zone teleconferencing to reducebusiness travelDuring 2007 we rolled out a new internalteleconferencing facility. This allows colleagues fromdifferent sites around the business to communicatewithout the need for travelling. Colleagues wishingto minimise CO2 emissions by reducing travel havewelcomed the system and adoption rates havebeen high since its introduction in April.

In the first nine months of 2007 there were 2,878Meeting Zone conferences. Although we do not yethave a 12-month record, these preliminary findingsare encouraging. During 2008 we will continue toraise awareness of the system as a key way toreduce car use.

RISK.MANAGED.

Recycled

LandfillQ4Q3Q2

433

832

1,613

Fig 14.TELECONFERENCING ACTIVITY IN 2007

20072006

927

1,077

Fig 15.WASTE GENERATED AND RECYCLED(Tonnes)

20072006

0.10

0.09

Fig 13.PAPER USE PER UNIT OF REVENUE(Reams/1,000)


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36Cattles plc


THE YEAR AHEAD

PLANS FOR 2008We are committed to the principles

of CR and achievement of our threeCR cornerstones. In each of these areaswe demonstrated our ability to improveour performance throughout 2007.We will strive to continue this trend inthe coming year.

We are confident that we have thefoundations in place to deliverimprovements in the way we operateand to meet the expectations ofour stakeholders.

The Group has set a number of high levelobjectives for 2008:

Review our CR governance arrangementsto ensure they accommodate the growthof the business

Seek further opportunities to embed theCR cornerstones into our operationalprocesses

Integrate CR key performance indicatorswith our existing business managementsystems, particularly those relating to riskmanagement

Continue our colleague engagementprogramme to promote awareness of ourCR cornerstones and activities

Instigate a programme of dialoguewith external stakeholders to ensureour approach to CR is consistent withtheir perceptions and expectations ofthe Group

Support financial education initiativesand the development of moneymanagement skills

These objectives are supported bydetailed targets.

LET US KNOW WHAT YOU THINKUnderstanding the views of ourstakeholders is important to us. It providesuseful feedback as we develop ourapproach to CR and implement initiativesacross the business. It also gives usconfidence that we are reporting on theareas our stakeholders want to know about.If we are not doing something right, wewant to know so we can do our best to putit right.

To obtain a copy of any document referredto in the Review or to provide feedback,

please contact:

Jayne JohnsonCR ManagerCattles plcKingston HouseCentre 27 Business ParkWoodhead RoadBirstallBatleyWF17 9TD

If you would prefer, you can also contact usby email at [email protected].


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cattles 2007 cr review (final)

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