We continue to make progress in all these areas and further details are included below.

Stakeholder dialogue and reporting
We have taken forward the stakeholder dialogue programme initiated last year, with help from The Environment Council, an independent organisation with expertise in facilitating stakeholder dialogue. The innovative electronic consultation process sought stakeholder views on our 2003 EHS report during its preparation stage. We used this feedback to redraft some sections of the report.

Our stakeholders identified supply chain management and the environmental and social impacts of our products – including life cycle assessment, hazardous materials management and producer responsibility legislation – as worthy of attention. The scope of our EHS reporting was judged to be appropriate. We also received stakeholder feedback on broader questions of corporate responsibility outside the scope of the EHS report. This feedback assisted our ongoing review of our existing policies and practices in this area.

A printed summary of our second EHS report was published in early 2004 covering the financial year ending 31 July 2003. This report was independently assured for the first time and describes how we manage EHS in our operations. In addition to the printed summary report, we launched our first EHS website in 2004 to provide a more detailed on-line version of the 2003 report and more frequent updates on items of interest in the area of EHS. This on-line report can be accessed via the reports section on the Smiths homepage (www.smiths-group.com).

Policy and organisation
Our arrangements for Corporate Governance cover the assessment of all business risks and opportunities, including EHS issues. We have clear lines of responsibility for EHS management to ensure Group policies and standards are adopted by our facilities worldwide. Day-to-day responsibility and accountability for EHS management rests with our operating companies. Our director EHS, reports to the director Human Resources on EHS strategy, performance and progress against plan. The director HR chairs the Group EHS Committee and reports to the chief executive who is accountable to the Board for EHS performance. At a local level, each major facility has a safety adviser and environmental coordinator, with further support provided by a network of regional EHS coordinators at business level.

Annual reports and reviews of EHS risks, opportunities and progress against plan are provided to the Board. Quarterly reports are also provided to the executive directors through the Group EHS Committee. With senior representation from each of our divisions and corporate EHS expertise, this Committee also develops Group policies and standards, reviews performance, including progress against Group targets, and prepares the Group EHS report.

Policy statements are in place for both environment and health and safety. They apply to our operations worldwide and can be viewed on-line via the report section (2003 EHS) on our homepage (see www.smiths-group.com). These policies are underpinned by:

•	the implementation of internationally recognised standards for environmental management, ISO 14001;
•	company standards on health and safety management (best practice safety manual and a comprehensive health and safety audit system); and
•	measurement systems and targets for improved performance.

ISO 14001, safety manual and audit system
We have systems in place for the management of EHS risks and opportunities in our operations worldwide. In November 2000, we set ourselves a demanding three-year goal to achieve ISO 14001 certification for all our major manufacturing sites by the end of December 2003. We achieved excellent results by the end of this period, with 99% of the targeted businesses, 79 out of 80 facilities in 17 countries, being certified. New acquisitions are required to achieve certification within two years of joining the Group.