Corporate Responsibility Report

Strategies related to our Corporate Responsibility

We believe effective management of our Corporate Responsibility ("CR") makes good business sense. In doing so, we will seek to ensure that Halfords, which is a household brand, has a positive impact on the communities and environment in which we work, be it through our operations, products and services or through our interactions with our customers, colleagues and suppliers. We are proud of our business and we see CR as a core business consideration as it derives strategic, commercial and reputational benefits. We aim to achieve standards of responsible care across a number of key areas, including customers, trading, health & safety, the environment, employee welfare and the community.

We are committed to ensuring we do the right things and our aim is to continually improve our management of the social, environmental and economic issues within our control or influence these throughout the business and our wider supply network. "That's helpful, that's Halfords" is not just for our customers, but is about how Halfords acts and reacts to ensure sustainability of both the environment in which we operate and our own business model.

The Group annually reviews its ongoing CR commitments to ensure it meets the needs of the markets and communities in which we work and that the associated Key Performance Indicators ("KPIs") accurately reflect the Group's success or otherwise in implementing its policy.

Following the review conducted last year by Business in the Community ("BITC") the Group continued to follow its "ACTING RESPONSIBLY" policy during the period to 30 March 2012. However, the Company has a strong cost control ethos and is keenly bottom line driven with clear profit ambitions and the thinking hierarchy at present is "cost first". It is therefore essential that any CR programme should be shown to be intricately linked to achieving business success and enhancing the business's value proposition.

Halfords has always prided itself on behaving responsibly to all stakeholders, and CR forms an integral element of this relationship by demonstrating the Company's honesty, reliability and trustworthiness in respecting customers, employees, investors and the environment. However, we acknowledge that in the past our community investment activities have been informal and not driven by a clear community investment strategy that is aligned to our business strategies.

In order to address this the Company has involved itself with the Prince's Trust "Seeing is Believing" activities and visited a number of charities to see how Halfords might be able to make a positive contribution to communities in which our stores operate. All the charities that we met with worked with individuals from disadvantaged backgrounds including homelessness, young people NEET ("not in education, employment or training") or ex-offenders. In the many discussions that we had with the young people that we met, it was obvious that whilst they were appreciative of all offers of help, what they really wanted was a real opportunity to get a job. This has led to discussions with a Social Enterprise company, Bikeworks, as to how Halfords might introduce a Work Inclusion programme for NEET individuals. This is discussed in more detail in Community.

As in 2011 we continue to report on our activities under the headings used by BITC in their 2010 report, and we have aligned these with our Group strategy.

Our commitments are translated into actions and KPIs are used to assess success against our internal targets. Paul McClenaghan, Commercial Director, takes the lead in ensuring that the policy supports the strategic objectives of the business. The Halfords Executive management monitors performance with regard to these objectives and targets via an internal report. It is, however, the Board's responsibility to ensure that the Group operates in a responsible manner, and thus the Board reviews the policy and our performance against that policy annually.

In the Future

Halfords will continue to work towards improving its management of the social, environmental and economic issues that are within its control and will continue to work with BITC to ensure that we focus on the core areas of Corporate Responsibility whilst at the same time being proud custodians of the Halfords brand and its impact on its stakeholders. It makes good business sense that we ensure the right and proper interaction between our Company, our stores and our products, and our customers, their communities and their environment. We hope to build on our cycle repair work inclusion programme to help us deliver a quality repair service in-store and we will report more on the success of this initiative next year.