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2005 Corporate Social

Responsibility Report

2005 CORPORATE SOCIAL RESPONSIBILITY REPORT CONTENTS Page FOREWORD 2 1. CHIEF EXECUTIVE’S INTRODUCTION & GROUP OVERVIEW 3 2. KEY PERFORMANCE INDICATORS – SUMMARY 5 3. CORPORATE SOCIAL RESPONSIBILITY POLICIES & PROCESSES 7 4. THE ENVIRONMENT 8 5. OUR STAKEHOLDERS 13 6. THE GROUP CSR AWARD 2005 19 7. PRODUCT CASE STUDIES 20 8. VERIFICATION, NOTES & FEEDBACK 23 FOREWORD This is our third Group CSR report. It covers the whole of the Aga Foodservice Group, and summarises our key CSR policies, describes our management processes and quantifies our performance, focussing on those areas we are able to control and influence. We have also included selected case studies to highlight a number of the initiatives we have underway as part of our drive for continuous improvement. In recent years, we have made significant progress in shaping our CSR strategy and improving performance, focusing on the key areas where we can make an impact and on improving reporting in the areas already monitored and where specific targets have been set. In accordance with our Statement of Key Principles, (available at www.agafoodservice.com) in addition to managing the impact of our own operations, our products are designed with efficiency and health and safety in mind, and thus they help to improve the CSR performance of the operations of many of our customers, particularly in commercial foodservice. Our research document, “Improving Energy Efficiency in the Commercial Kitchen” published on our website in December 2005, helps to quantify some of the financial and environmental savings, which can be achieved. In future reports we plan to extend and deepen our coverage and to provide updates on our performance against targets. As our data gathering and other processes improve, particularly for environmental, we expect to experience variances in consumption and we will rebase our numbers accordingly in order to provide valid year on year comparisons. Where this is the case we will provide appropriate notes. During 2005 Aga Foodservice Group plc was reconfirmed as a member of the FTSE4Good Index.

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1. CHIEF EXECUTIVE’S INTRODUCTION This third annual CSR Report highlights how our CSR principles have been embedded in our operations and the progress we have made towards our targets and objectives. The Report also sets out how we are centring our business development plans on products and services which help improve the CSR related performance of our customers. Our commercial foodservice operations are at the forefront of a drive to bring to market more energy efficient equipment that also produces healthier food for consumers. We are bringing environmental as well as cost issues to the attention of our customers who include major government departments. We have highlighted that 4.25% of the UK Government target for CO2 emissions reduction by 2050 can be achieved by bringing commercial kitchens up to the best currently available standards and that in so doing £2.2 billion in savings are available to the sector, making this a key imperative for the industry. Much of the improvement comes from introducing domestic level efficiency into the commercial kitchen. Conversely, commercial standard refrigeration would bring benefits to the domestic market – an area we will be investigating during 2006 as we look into food waste in the home caused by poor refrigeration standards. Across the Group we have made progress in reducing our environmental impacts indexed to turnover – we are ahead of target in a number of areas. Our health and safety performance is also improving as our teams address the challenge of bringing acquired businesses with different cultures up to the standards we have set. We have also benefited from working with our suppliers to ensure that they are aware of our requirements and expectations for their performance. So overall, “CSR thinking” has impacted our business and will be at the heart of the next phase of our expansion plans. We are delighted that our work is already receiving external recognition; most notably, we were recently named Energy Star manufacturing partner of the year by the US Government’s Environment Protection Agency. This was the first time in the award’s 15-year history that it has been won by a foodservice sector company. We expect 2006 to be another important year and I have set our below six of the key areas of focus. This Report, prepared by Pam Sissons, our Company Secretary, draws on the work of many around what is now a large international Group. My thanks to all the employees whose hard work and dedication contributed to the progress in the year. I look forward to reporting on our progress next year, but in the meantime, if you have any comments or suggestions, please let me know.

William McGrath Chief Executive April 2006 2006 CONTINUING INITIATIVES: 2006 will see us maintain our CSR efforts with particular onus on: • Energy savings in the foodservice sector; • Looking at healthier ways to cook including

steaming and using better maintained oil; • Food preservation systems to reduce

domestic food waste caused by poor refrigeration standards;.

• Improving health & safety performance across the business, focussing on reducing lost time;

• Further improving the environmental performance of production and retail facilities;

• Upgrading CSR data processes to facilitate regular internal and external benchmarking.

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About Aga Foodservice Group Aga Foodservice Group is an international business, in 2005 employing on average 5,600 people in 12 countries. Aga is listed on the London Stock Exchange and is a member of the FTSE4Good Index. In 2005 Group sales were £502m in the two core business areas of consumer (57% of the total) and commercial foodservice products (43%). The Group’s strategy is to be an international consumer brand led operation with Aga at its heart and also to expand in foodservice markets. In consumer, the Group is a producer of premium range cookers and refrigerators for the domestic market with strong brands which include the Aga, Rayburn, Stanley, Rangemaster, La Cornue, Heartland, and Marvel brands. It also has well established retail operations under the Divertimenti, Domain, Fired Earth and Grange brands, and sells cookware associated with a range of brands through its shops and websites. In commercial foodservice, the Group’s market leading businesses provide commercial catering, bakery and refrigeration equipment to the global foodservice sector. This is complemented by the Group’s experienced facilities management teams. Aga Bakery is the world leader in artisan bakery ovens and our foodservice businesses continue to introduce revolutionary products such as the Infinity Fryer, combi-ovens, steamers and glycol refrigeration to the commercial sector. Foodservice brands include Bongard, Esmach, Mono and Pavailler; Eloma, Falcon, and Williams; Adamatic, Belshaw, Stellar and Victory. The operational structure of the Group is set out in the chart below:

AGA FOODSERVICE GROUP PLC

AGA RANGEMASTER

AGA APPLIANCE MANUFACTURING

AGA HOME

AGA FOODSERVICE

AGA BAKERY

• Aga-Rayburn • Fired Earth • Waterford

Stanley

• Rangemaster • La Cornue • Divertimenti

• Aga Ranges • Heartland Appliances • Northland-Marvel • Victory Refrigeration

• Domain • Grange

• Eloma • Falcon • Williams

Refrigeration

• Bongard • Esmach • Mono

Equipment • Pavailler

Aga Foodservice Group plc performance 2002-2005 £m 2002* 2003* 2004** 2005** Turnover 330.3 392.4 433.7 501.8 Operating Profit* 31.4 33.7 35.2 41.7 Wages & Salaries 94.0 119.0 130.4 146.3 Total R&D 3.2 3.3 3.8 4.2 Dividends 7.8 9.3 9.5 11.3 (* = UK GAAP; ** = IFRS)

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2. KEY PERFORMANCE INDICATORS – SUMMARY Objectives As part of our drive for continuous improvement in performance, the Group has developed a set of key performance indicators (KPIs). All Group companies are required to monitor performance against these indicators. Newly acquired operations are required to participate in their first full financial year after joining the Group. Targets and Performance In January 2004, the Group set specific targets for improvement covering key environmental impacts and health and safety performance. The environmental improvements were targeted over the three-year period from 2004 to 2006 inclusive and we therefore compare data against the 2003 benchmark year. In retrospect, these targets were not as challenging as initially envisaged, although this is partially due to the increasing proportion of the Group’s turnover being from retail and service operations. We plan to set new environmental targets for 2007 onwards. Health and safety targets are set year on year to take into consideration changes in the Group’s structure, geographic and cultural mix. Environmental 2004-2006 target: 9% improvement for each of the following sources of emission and for water use indexed to turnover over the three year period 2004 to 2006 (using 2003 as the base year) and a target for UK packaging consumption of 15.0 tonnes per £m sales:- Area KPI 2003 2004 2005 % change

(2003/5) Electricity Tonnes CO2 per £m sales 54.2 52.8 44.0 (19)% Gas & other energy Tonnes CO2 per £m sales 56.8 61.0 45.2 (21)% Freight Transport Tonnes CO2 per £m sales 11.3 10.6 8.4 (25)% Water m3per £m sales 503 463 317 (36)% UK packaging use Tonnes per £m sales: 23.7 15.7 16.2 (31)% The Group also monitors material non-compliances and fines or prosecutions which result from environmental incidents, with none reported in 2005. Health & Safety 2005 target: To reduce indexed total accidents, lost time and UK RIDDOR accidents by 10%. Area KPI 2003 2004 2005 % change

(2004/5) Total accidents Per 100,000 hours 19.0 16.8 14.0 (17)% Days lost Per 100,000 hours 31.0 33.7 33.3 (1)% UK RIDDOR* Per 100,000 hours 1.51 0.93 0.89 (5)% *reportable accidents, UK only There were no improvement or enforcement notices, fines, penalties or prosecution notices issued to the Group’s businesses during 2005.

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2006 Objectives Environmental – the Group will continue to work towards the 9% improvement target over the three-year period outlined above. Health & Safety – during 2006, the Group will focus specifically on manual handling and hand injuries/ cuts with a view to improving accident rates by 5%. Specific attention will be given to lost time with a target for improvement of 10% on the 2005 performance in this area. Supply Chain – the Group will continue to review its supply chain and will report on the percentage of suppliers reviewed by business segment in 2006. With more resource based in and increased sourcing from the Far East, we will be incorporating an ethical trading site assessment for new suppliers and will extend it to other key suppliers as appropriate. This will continue to reflect the criteria highlighted within the Group’s Ethical Trading Policy. Environmental and Health and Safety Management Systems and Data collection - During 2006, we plan to upgrade the processes used to gather environmental and health and safety data across the Group. This will help to ensure consistency and will reduce the number of assumptions made at a business unit level. Site and Business Unit targets and objectives - In addition to the Group level targets, our businesses have local targets which are appropriate to their specific impacts, opportunities and performance. These are set by business unit managing directors and include areas which are important to each business, but not necessarily relevant to the whole Group.

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3. CORPORATE SOCIAL RESPONSIBILITY POLICIES & PROCESSES As highlighted in our 2005 Annual Report, the Board of Aga Foodservice Group recognises its responsibility for corporate social responsibility. It is the Group’s policy to comply, as a minimum standard, with the laws and regulations of the countries in which we operate. The Group committed to conduct its business with integrity and with respect for all those affected by its operations in its Statement of Core Principles, originally issued by the Chief Executive in 2001 and updated in December 2005. The Board regularly reviews its policy statements and the following policy statements are available on the website, www.agafoodservice.com/84_49.htm Copies can also be obtained from the Company Secretary.

Statement of Core Principles Code of Conduct Ethical Trading Policy

Equal Opportunities Policy Environmental Policy Health & Safety Policy

CSR Management Structure The Chief Operating Officer, Stephen Rennie, is responsible for the implementation of the Group’s CSR policies, for ensuring that our objectives and targets are achieved and ensuring the Board is kept up to date on CSR issues. He is supported by Paul Tonks who has been appointed Group HR Director and is responsible for global HR policies and practices in addition to retaining responsibility for health, safety and environmental matters. There are also designated health, safety and environmental and human resources personnel at our business units who assist in the ensuring Group’s policies and practices are implemented locally and that performance is monitored and reported back to the Chief Operating Officer. During 2005, the Group’s management structure was realigned to create the six operational segments shown on page 4. The managing director of each segment is responsible for setting up an appropriate structure in their unit and is accountable to the Chief Operating Officer for CSR matters. The Group has a health, safety and environmental and a human resources forum, where practitioners across the Group meet on a regular basis to promote compliance, build upon best practice and to monitor effectiveness and progress. Annual CSR audits are undertaken by the UK & European and US committee co-ordinators, Paul Tonks and John McGill. An ongoing process for identifying, evaluating and managing significant risks is in place and all business units regularly report their risk profile to the Group risk management team. This process covers CSR related risks. Stakeholder Engagement In accordance with our statement of core principles, the Group engages in proactive dialogue with stakeholders and in particular liaises with:-

Shareholders Employees Customers Suppliers Local community representatives Government departments and other authorities Non-governmental organisations

This dialogue includes regular customer surveys, in addition to surveys of suppliers and reviews of the impact of our operations on local communities. The Group continues to be a member of FTSE4Good. This index, along with stakeholder consultations and other tools are used to help identify key priorities and benchmark progress.

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4. THE ENVIRONMENT Environmental Management Systems Our environmental management systems provide the framework for the implementation of our environmental policies. Each business unit has its own environmental policy statement which complies with the Group’s overarching policy statement, whilst identifying, assessing and managing issues and opportunities of importance at a local level. Thus, in addition to Group level targets, our individual businesses have targets relevant to their specific impacts and opportunities for performance improvement. The Group supports the adoption and implementation of externally accredited environmental management systems at its operating businesses where this provides added value. For example, the Rangemaster sites at Leamington Spa and Long Eaton are accredited to ISO14001/2004 and employees at Falcon Foodservice are receiving training to enable them to work towards ISO14001. Effective management systems have been introduced to ensure a high level of environmental protection. These management systems include maintenance, training, working instructions and procedures, monitoring of emissions and comprehensive incident logbooks and recording sheets. Environmental Performance The Group monitors the environmental impact of its business activities and is committed to reducing its key impacts indexed to turnover, including the use of materials, energy, packaging and water, to reducing emissions and waste and to increasing recycling. The Group’s businesses monitor impacts in these key areas and report via the Group co-ordinators in line with the Group policy statement, also providing details of key local benchmarks and other initiatives. In the summary table below and in the following graphs we report on our key impacts and use of resources. In future reports we plan to broaden this as well as deepening coverage. As our data collection processes improve we expect to experience apparent increases in a number of measures and will re-base the data accordingly. Where this is the case, we will provide appropriate notes. Target: 9% improvement for each of the following key impacts indexed to turnover over the three year period 2004 - 2006 and a target for UK packaging use of 15.0 tonnes per £m sales Area KPI 2003 2004 2005 % change

(2003/5) Comments

Electricity Tonnes CO2 per £m sales

54.2 52.8 44.0 (19)% Ahead : Due to energy saving initiatives and also increased turnover from retail and lighter manufacturing operations

Gas & other energy

Tonnes CO2 per £m sales

56.8 61.0 45.2 (21)% Ahead: Emphasis on efficient usage important in view of price increases

Freight Transport

Tonnes CO2 per £m sales

11.3 10.6 8.4 (25)% Ahead: Due to management of utilisation, scheduling and routing for commercial vehicles

Water m3/ £m sales 509 463 326 (36)% Ahead: Usage down due to initiatives to recycle and reuse water in the manufacturing processes and to reduce domestic/ sanitary usage

UK packaging use

Tonnes per £m sales:

23.7 15.7 16.2 (31)% On track: Slight deterioration on prior year, but improvement on base year. There will be further emphasis on reducing usage and increasing re-use

Coverage* % Group sales 76% 70% 85% - *% of Group sales covered for energy use/ CO2, coverage for other KPIs varies

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Environmental Performance vs. Targets In January 2004, using 2003 as the base year, the Group set environmental targets for the three year period from 2004 to 2006 inclusive. In retrospect, the targeted reductions of 9% over three years, indexed to turnover were not as challenging as initially envisaged, although this progress is partially due to the increasing proportion of the Group’s turnover from retail and service operations. In the coming year we plan to update and improve our data collection systems and new environmental targets will be set for 2007 onwards. Emissions We continue to monitor emissions based on our consumption of utilities and the fuel used for transport, including company cars, vans and freight transport. Whilst we do have other impacts, these are the most significant. Energy Use

Total Energy CO2 Index 2003/6 target = 9% reduction

0

50

100

150

2003 2004 2005(Constant electricity CO2 factor for all countries)

Tonn

es C

O2 p

er

£m s

ales

Total Energy Target

The CO2 emissions due to the electricity consumed by the Group are some 44.0 metric tonnes per £m sales (2004: 52.8). CO2 emissions due to consumption of gas and other fuels have been reduced to 45.2 metric tonnes per £m sales (2004: 61.0). It is recognised that part of the significant improvement in CO2 emissions is due to the Group’s move towards lighter manufacturing operations and to more retail outlets. The retail businesses source a proportion of their products from outside the Group and emissions relating to the manufacture of these products are not included in the Group data. Freight Transport We estimate the emissions due to fuel use in our vehicle fleet, consisting of light commercial vehicles and a small number of heavy goods vehicles.

Freight Transport CO2 Index 2003/6 target = 9% reduction

0

5

10

15

2003 2004 2005(Constant electricity CO2 factor for all countries)

Tonn

es C

O2 p

er

£m s

ales

Freight Target

Group companies also outsource a significant proportion of freight delivery and transportation services and this is not included in the above data.

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Water Use A number of businesses in Europe and the US have introduced water recycling and reuse schemes, which continues to reduce the Group’s water consumption.

Water Use Index 2003/6 target = 9% reduction

0

200

400

600

2003 2004 2005Cub

ic m

eter

s w

ater

per

£m

sa

les

Water use Target

UK Packaging Consumption

UK Packaging Use Index2003/6 target = 9% reduction

05

10152025

2003 2004 2005Tonn

es P

acka

ging

per

£m

sa

les

Packaging use Target

Despite an increase in packaging to 16.2 tonnes per £m sales (2004: 15.7t per £m), we remain on track to achieve the 2003/6 target of 15 tonnes of packaging per £m sales. Our manufacturing businesses are focussing on reducing packaging use, waste and recycling initiatives.

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Product Responsibility and Stewardship In addition to embedding CSR into its own operations, the Group sees a key part of its responsibility as developing and marketing new products which offer improved CSR effectiveness, thus assisting commercial customers and consumers to advance their own CSR performance as outlined in the Case Studies on page 20. The Group has plans in place for the implementation of The Waste Electrical and Electronic Equipment (WEEE) and The Restriction of the Use of Certain Hazardous Substances in Electrical and Electronic Equipment (RoHS). The Waste Electrical and Electronic Equipment (WEEE)1 – This European Union (EU) Directive aims to minimise the impact of electrical and electronic equipment on the environment during and at the end of its useful life. It applies to a wide spectrum of products and it encourages and sets criteria for the collection, treatment, recycling and recovery of waste electrical and electronic equipment. It makes producers responsible for financing most of these activities (“producer responsibility”). Private householders are to be able to return WEEE without charge. There has been a delay in the implementation of the Directive until at least July 2006. The Group has joined a compliance scheme to help ensure that it meets its obligations and the requirements of the directive. The Restriction of the Use of Certain Hazardous Substances in Electrical and Electronic Equipment (RoHS) – This EU Directive will ban the marketing of new electrical and electronic equipment containing more than agreed levels of lead, cadmium, mercury, hexavalent chromium, polybrominated biphenyl (PBB) and polybrominated diphenyl ether (PBDE) flame retardants from July 2006. There are a number of exempted applications for these substances. RoHS takes its scope broadly from the WEEE Directive. Manufacturers will need to ensure that their products - and their components - comply in order to stay on the Single Market. If they do not, they will need to redesign products. Formal notification of the maximum concentration values for the substances restricted by the Directive comes into force 1st July 2006. The Group is currently working with its suppliers to ensure full compliance. Environmental Compliance In addition to the environmental impact of its day-to-day activities, the Group seeks to minimise the risk of environmental pollution incidents. If such an incident should occur, it is Group policy for prompt corrective action to be taken and, where appropriate, for the relevant authorities to be notified. During 2005, there were no material non-compliance matters, fines, penalties or prosecutions as a result of environmental incidents within the Group’s areas of operation. Chairman’s Environmental Award The Chairman’s Environmental Award was introduced in 2003 to promote energy efficiency and environmental improvements across all its businesses worldwide, and the Group encourages employees to participate in the annual award. In 2005 joint winning submissions were received from a team led by Craig Averill at Northland Marvel and Domonic Mace at Williams Refrigeration.

1 www.dti.gov.uk/sustainability/weee/

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Case Study: Reducing the Use of VOCs in Cleaning and Foaming Processes The joint winners of the 2005 environmental award eliminated methylene chloride, a volatile organic compound (VOC), from their manufacturing processes. At the Williams Refrigeration facility in Kings Lynn, UK VOCs were used to degrease the heat exchangers which are manufactured on site and fitted to all refrigeration equipment manufactured by Williams. An evaporative oil and water based wash system was developed, trialled and adopted to eliminate the use of methylene chloride, thereby reducing environmental impacts, waste streams, labour and permit costs, and improving health and safety. At Northland Marvel, in Michigan, US, methylene chloride had been used as part of the insulation foaming processes for many years. A team of employees undertook a project to eliminate the use of VOC’s and as a result a new foaming process has been introduced which has reduced environmental impacts and waste streams whilst improving air quality and health and safety. Aga’s Chairman, Vic Cocker commented “I am proud to give the 2005 award jointly to these two very worthwhile projects which have reduced costs at the same time as improving health, safety and environmental performance of two of our key businesses.” Case Study: Rangemaster’s Energy Management Initiatives To build on its achievement of ISO14001, Rangemaster based at Long Eaton and Leamington Spa in the UK has set up an Energy Steering Group tasked with reducing consumption of electricity, gas and water. Rangemaster has also adopted the Energy Management Assessment tool used by the Carbon Trust to help assess performance and to measure progress. The Energy Steering Group’s recent and current projects include the introduction of a Building Management System, the replacement of inefficient air compressors, introduction of light sensors, water recycling systems and the replacement of gas fired with more efficient infra-red heating technology. Monthly KPIs are used to track resource use and to monitor improvements. In addition, daily energy reports help ensure a constant focus on embedding improvements into the business.

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5. OUR STAKEHOLDERS The Group engages in regular dialogue with its key stakeholders as outlined on page 7. Here we report on a number of key aspects regarding our employees, health and safety, human rights, customers and suppliers and community involvement. Our People In 2005, the Group employed on average 5,600 people and they are key to the Group’s on-going success. Employees are kept informed of developments across the Group by a variety of means including Group and local newsletters, the intranet, company websites and management briefings on current issues including business efficiency, and health, safety and environmental initiatives. The Group’s Code of Conduct details the standards of integrity and honest conduct expected from all employees. This includes a whistleblowing policy which enables all employees to report breaches of the Code, including fraud, criminal activity and financial irregularities. Matters reported are fully investigated and reported to the Group’s Audit & Risk Committee. In cases where the Code of Conduct has been breached, the Group has used its disciplinary procedures and where appropriate, involves the Police. The Group requires its business units to comply with its equal opportunities policy and all other policies relating to employees. To ensure compliance with the equal opportunities policy, annual audits are undertaken and followed up by the designated co-ordinators and any non-conformance is addressed and reported at Group level. Training and Development The Group encourages the involvement of employees in their development and training and appropriate programmes are available at all levels. We advertise many vacancies internally, with senior positions being advertised on the corporate website. Recruitment procedures throughout the Group prohibit the employment of under age employees. Flexible working arrangements are considered where appropriate. The Group encourages its employees to gain appropriate qualifications to enhance their career prospects. The Group particularly encourages young engineers and it operates apprenticeship, work experience and placement schemes and as described in the case study below, operates a training and assessment centre in Telford, UK.

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Case Study: The Aga Training and Assessment Centre The Group has operated its own training centre in Telford since 1989 and in 1998 this was extended to include a BPEC certified training and assessment. It offers a range of courses to ACS, CORGI and OFTEC standards. The centre was initially set up to train Aga’s own engineers, but it now caters for approved Rayburn Guild engineers, the Group’s commercial catering equipment engineers, and external candidates. In 2005, some 800 engineers undertook skills and safety training on gas, LPG, electric and oil appliances and other equipment. Of these, 55% were external candidates. The number of candidates is set to increase, with new requirements under the UK building regulations leading to new assessment courses and the rolling requirement for engineers to upgrade their qualifications and competency based assessments. In addition there is more commercial emphasis on the assessment of energy efficiency. The third OFTEC Awards for Excellence were held at Chesford Grange in Warwickshire in September 2005. The Aga Training and Assessment Centre received the OFTEC National Training Centre of the Year Award and is pictured below, Gareth Hunt from Aga’s Research & Development Department received the inaugural OFTEC Trainee of the Year Award.

The Aga team receive the OFTEC Gareth Hunt is OFTEC’s Trainee Training Centre of the Year Award of the Year Employee Statistics

0123456

2003 2004 2005

Gender Profile(employees x 1,000)

Total Males Females

0123456

2003 2004 2005

Ethnic Profile (employees x 1,000)

Total Ethnic Total Males Females Ethnic

Management Profile(managers x 1,000)

00.10.20.30.40.50.6

2003 2004 2005

(Note: ”Ethnic” is defined as being from an ethnic minority with in the country in which the Aga facility is located) The Group’s annualised labour turnover during the year was 18.7%. This is impacted by the higher labour turnover generally experienced in the retail environment and due to the high demand for skilled service engineers.

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Health & Safety The Group recognises health and safety matters are of key importance for its stakeholders and is committed to the continuous improvement of its performance in this area. Health and Safety Management Health and safety management is integrated with our general management processes and internal audits are undertaken at each business unit at least annually. Operational responsibility for health and safety matters rests with the managing director of each business unit and with every employee. Each business unit submits a quarterly report to the appropriate Health, Safety and Environmental Co-ordinator, providing details of accident trends and analysis, dangerous occurrences, local initiatives and any contact with enforcing authorities. This report and the site audit reports form the basis of a quarterly report submitted to the Chief Operating Officer and key issues and performance are reviewed at Board level. Health and Safety Performance Our Health and Safety KPIs focus on total group accidents, the total days lost as a result of accidents and in the UK on incidents notifiable under the UK Reporting of Injuries Diseases and Dangerous Occurrences Regulations 1995 (RIDDOR). In previous years, the Group has reported accidents and lost time per 1,000 employees. Going forward our health and safety KPIs will be reported per 100,000 hours worked. We will use this standard consistently going forward to enable us to benchmark more consistently both internally and externally and as a better measure of the exposure to health and safety risks. Our annual health and safety target for 2005 was to reduce incidents by 10%. Area KPI 2003 2004 2005 % change

(2004/5) Comment

Total accidents

Per 100,000 hours

19.0 16.8 14.0 (17)% Ahead: Emphasis on reducing manual handling related incidents and cuts to continue in 2006

Days lost Per 100,000 hours

31.0 33.7 33.3 (1)% Behind: Slow 04/05 progress predominantly due to acquisitions. Concerted effort to address in 2006

UK RIDDOR (reportable) accidents

Per 100,000 hours

1.51 0.93 0.89 (5)% Behind: Sustained improvement across all UK business units, but 10% target not met.

Employees covered

% of total 88% 95% 98% 3% Strong improvement since 2003.

There were no improvement or enforcement notices, fines, penalties or prosecution notices issued to the Group’s businesses during 2005. Health & Safety Performance vs. Targets We are ahead of our key target to reduce the number of recorded accidents per 100,000 hours worked, although this is in part due to the increasing number of employees working in lighter industry, retail and service operations. We are behind our target to reduce lost time with the slower progress partially due to the changing geographic spread of the business and local cultural differences.

In 2006 the Group will continue to focus on manual handling related incidents and cuts with a target reduction of 5% in RIDDOR accidents in the UK and for recorded accidents world-wide. This will be supported by training and raising health and safety awareness.

We are also concentrating on reducing absence following accidents, with a target to reduce lost time per 100,000 hours worked by 10%. To support this we will also be monitoring the average time lost per lost time incident. Specific emphasis will be given to newly acquired businesses and cultural differences that exist between business operations.

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Health & Safety Benchmarking All UK businesses are members of the British Safety Council (‘BSC’) and use their statistics to benchmark safety performance. In 2005 a number of our business units achieved the requisite standard to receive BSC National Safety Awards based on their accident statistics, health and safety systems and practices during the prior year. Case Study: Rangemaster’s focus on manual handling training and awareness A growing part of the Rangemaster service offering is the delivery and installation of its range cookers and large “side by side” refrigerators. Delivering products of this size and weight to individual consumer premises has inherent manual handling related risks. To minimise these risks Rangemaster has built risk assessments into its delivery processes. This involves an initial pre-delivery discussion with the consumer to identify potential risk issues and to plan the delivery. From this information the delivery teams are aware of what lifting apparatus and procedures will be necessary to transport the products into the customers’ premises and to ensure they are safely positioned in the installation location. On arrival at the premises, the Rangemaster delivery team undertakes a secondary review to confirm the delivery method. Should the team feel that completing the delivery would incur significant or unforeseen risk, they are able to contact in-house health and safety advisers and will re-plan accordingly, or if further lifting apparatus or personnel are required the delivery will be rescheduled. To support this process Rangemaster personnel undertake specific manual handling training with individual training matrices to ensure competence in the use of all manual handling equipment. Case Study: AFE Serviceline and Williams Refrigeration are accredited SAFEcontractors The management at AFE Serviceline and Williams Refrigeration set themselves the specific objective of gaining accreditation under the National Britannia SAFEcontractor scheme. This independent scheme reviews and audits health & safety policies, procedures and documentation. Customers such as major property management, food manufacturing, financial services, facilities management and retail and leisure businesses use the SAFEcontractor scheme to provide assurance that contractors are up to standard. The vetting process is stringent and accreditation has opened up opportunities for working with new customers for both AFE Serviceline and Williams Refrigeration. More information is available at that the National Britannia website - www.safecontractor.com

Human Rights In accordance with its policies and statements, Aga Foodservice Group requires its businesses to protect and further the rights of its employees and those of its suppliers and sub-contractors. These policies are designed to ensure the human rights of employees are respected, including freedom of association, and to ensure equal opportunity and diversity. We comply with the core International Labour Organisation conventions that prohibit the use of under-age or forced labour. Our key supplier review programme helps to ensure that the standards set by the Group are adhered to by our suppliers. Our whistleblowing policy enables employees to report breaches of these and other policies, or other wrong doing, in confidence.

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Our Customers The Group seeks to develop and maintain long term relationships with customers by providing high quality products and services which are innovative and add value. The Group’s customers, both in the consumer and commercial sectors, are increasingly seeking products which help to address environmental, health and safety and other related CSR issues. The associated product stewardship challenges for the Group vary, but include continuing to develop products that reduce energy and cooking oil consumption, minimise waste, raise product standards, lower operating and capital costs and improve working conditions. Accordingly, the Group continues to invest in research and development and actively considers product capabilities when evaluating acquisition opportunities. The Group has continued to promote the Infinity Fryer, along with other leading edge technology products including the Eloma combi-ovens, Stellar Steam boilerless steamers, Williams’ Electrical Contractors Association approved refrigeration systems, Victory’s Energy Star approved refrigeration and Bongard’s top of the range bakery ovens which bake using radiated heat technology. Case studies covering the Group’s Clean Up Frying Campaign and progress being made to encourage our foodservice customers to take into account whole life costs are highlighted in the Product Case Studies section on page 20. Supplying over 80,000 domestic cooking ranges to consumers worldwide, the Group recognises that it can make a significant impact to food quality and hygiene by keeping its customers or potential customers up to date with the latest concepts in the kitchen. The Group uses its Agalinks website (www.agalinks.com), to provide advice, including recipes and articles on health and hygiene to customers and the public in general and the business units have redeveloped their websites with customers in mind. Our Suppliers – Supply Chain & Ethical Trading The Group recognises the value of long-term collaborative relationships with its suppliers to ensure the provision of the innovative products, materials and services on which our businesses and our customers depend. The Group monitors its suppliers to ensure that they follow similar ethical and environmental principles to our own and to ensure that materials and services are of a consistently high standard. We encourage supplier conformity to the United Nations Charter, Chapter IX, Article 55, governing international economic and social co-operation with specific reference to workers rights and conditions. All Group businesses are required to comply with the Group’s Ethical Trading Policy, as part of our Statement of Core Principles, and to ensure compliance with it by their suppliers as far as is reasonably practicable. As the Group expands and new suppliers are introduced, the review process is continuous and on-going. In 2006, we will be incorporating an ethical trading site assessment for new suppliers and will extend it to other key suppliers as the opportunity arises. This will continue to reflect the main criteria highlighted within the Group’s Ethical Trading Policy. Each of our businesses is working with their key suppliers to confirm they are acting in accordance with our Ethical Trading Policy. The percentage of suppliers reviewed increases year on year. This process is ongoing as new businesses join the Group and new suppliers are utilised. For example, Bongard, our French bakery equipment manufacturer which joined the Group in October 2002, currently has 387 suppliers. Bongard has now assessed and confirmed that over 80% of its suppliers comply with the principles outlined in the Group’s Ethical Trading Policy. Our retail operations source products globally. For example, Domain, our US retail business, sources furniture from the US, Italy, China and South-east Asia. Senior buyers visit the majority of suppliers and their manufacturing facilities at least twice per annum. Facilities are

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reviewed in line with the Group’s Ethical Trading Policy, particularly focusing on working conditions and labour force issues. Potential new suppliers continue to be visited and assessed. For example, Domain has established new suppliers in China, Indonesia and the Philippines and a team of senior personnel conducted site visits, meeting employees and reviewing working and living conditions. Fired Earth follows similar methods to review suppliers and both Domain and Fired Earth use agents who source product for them and they visit and assess overseas factories. Community Involvement The Group continues to foster and support community relations, both centrally and through our business units worldwide. We seek to be sensitive to the cultural, social and economic needs of the communities in which we operate. Business unit management liaises with their local communities and we seek to be a good neighbour. The managing director of each business unit is responsible for addressing any criticism or concerns raised by the local community and reporting to the Group as appropriate. Each business unit and its employees are encouraged to become involved with and to support local community projects, educational establishments, charities and other causes. This support may be via donations (product, use of our facilities or financial), fundraising or personal time and commitment. In addition to product and time donations, charitable donations during 2005 totalled £18,637. The Group did not make donations for political purposes. Case Study: AFE Divertimenti and Fired Earth Working With CRISIS and CRASH AFE Divertimenti donated catering equipment to UK charity CRISIS for their Skylight Café Project in Commercial Street, London. The charity helps homeless people rebuild their lives and fulfil their potential. The aim of the café is to teach catering skills with the objective of achieving City and Guilds qualifications and to offer work experience leading to permanent employment with major café groups. The equipment donated by AFE Divertimenti has enabled the café to increase their range of food on offer by over 40% and helped the café to reach financial break-even twelve months ahead of plan. AFE Divertimenti also teamed up with Fired Earth to supply catering equipment and paint to CRASH, the construction and property industry charity for the homeless. These donations were circulated to over twenty homeless projects around the country.

Case Study: Our Retail Shops use their Facilities for Fundraising Events Aga’s retail shops in the UK, Europe and North America regularly host events such as cookery demonstrations to help raise funds for various charities. For example, to coincide with the UK National Chocolate Month and the launch of the new chocolate coloured Aga, a full-size chocolate Aga was on display at Divertimenti’s Brompton Road store in London. Contemporary artist Prudence Emma Staite created the chocolate Aga and actress Amanda Mealing helped to smash the chocolate Aga in Soho Square. The chocolate was then auctioned in aid of leading UK children’s cancer charity, CLIC Sargent. All Aga’s UK stores had chocolate samples available during UK National Chocolate Month with proceeds going to CLIC Sargent.

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6. THE GROUP CSR AWARD 2005 In 2005 the Group introduced a CSR award for the business unit making the most progress in the year across the CSR related spectrum of health, safety and environmental, policy development, employee and local community initiatives. The CSR award 2005 was presented to Millers Vanguard, our facilities management operation. Millers Vanguard have made some great steps during 2005. They have relocated their facilities for the refurbishment and rebuilding of commercial foodservice equipment to a new centre of excellence. This 40,000 square foot facility was laid out to Millers’ requirements and will improve customer service and also creates a better working environment for employees and the surrounding community. The refurbishment centre also houses a dedicated training centre enabling our engineers to be trained in-house.

Millers were also delighted to receive an “Employer of the year” award from local radio station, Tower FM. Millers were selected from a spectrum of employers in the Bury and Bolton area on the basis of the team spirit at Millers. The business keeps employees informed through its in-house publication “Millers Vanguard Voice” and by personal e-mails from the management team. New uniforms were introduced during the year, which helps ensure Miller’s employees are easily identifiable on customer premises. A variety of events for staff and their families were organised throughout the year. These also raised funds for local charities. Steve Nicklin and the Miller’s team receive the Tower FM Employer of the Year Award

Miller’ s corporate style!

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7. PRODUCT CASE STUDIES The Infinlty Fryer The Group has made a great deal of progress in raising awareness on health, kitchen safety and energy efficiency issues since it organised the “Clean Up Frying” summit in May 2005. The summit brought together expert knowledge from the catering industry, the Health and Safety Executive, science, research and nutrition to discuss health and performance related issues and to encourage debate on the application of Government regulations on frying and cooking oil usage. Whilst energy use has been the main focus of our follow-up research, we have continued to investigate the three other key areas highlighted through the development of the Infinity Fryer: health and safety, waste oil and oil contamination. Energy use in the Foodservice Sector The UK Government and the European Union are committed to reducing carbon dioxide emissions and to encouraging the use of energy efficient appliances. However, to date, initiatives have focused on domestic appliances and not on the high energy usage in the foodservice sector, despite the fact that commercial kitchens are estimated to generate 32 million tonnes of carbon dioxide each year: i.e. one commercial kitchen generates the same amount of carbon dioxide emissions as the total amount from around thirty domestic households. With the rapid escalation of energy prices, saving energy is becoming critical for commercial operations. Many commercial kitchens use old and inefficient appliances that produce more carbon dioxide, consume more energy and cost more to run. Investment in new commercial cooking technology can enhance efficiency and reduce carbon dioxide emissions by reducing fuel consumption and energy bills – these are explained in our research report ‘Improve Energy Efficiency in the Commercial Kitchen’. Further information is available on the Group’s websites - www.agafoodservice.com and www.cleanupfrying.com. The report is available from www.agafood.com/siteimages/site_301/pdf/EnergyEfficiencyKitchen.pdf

The report takes a ‘before’ and ‘after’ approach to 3 types of commercial kitchens. In the first instance, it looks at the old inefficient appliances currently found in most commercial kitchens and highlights the energy consumed and the cost of running these appliances. These appliances are then replaced with energy efficient appliances and the savings both from an environmental and financial perspective are highlighted. The examples in the report demonstrate that by replacing old equipment with new technology, the total potential saving of carbon dioxide in the UK foodservice sector is approximately 13.5 million tonnes.

The Group is pleased to note that the report has helped drive a change in attitude with the food industry increasingly recognising that reducing energy in commercial kitchens is now crucial. As part of this process, the Aga Foodservice team have met with representatives from the CBI, the Catering Equipment Suppliers Association (CESA) and Hospitable Climates (an energy saving advisory programme managed on behalf of the Carbon Trust).

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We are also working closely with Government organisations, including the Carbon Trust where we help to promote their Interest Free Loan Scheme for the purchase of energy efficient equipment. We are also working alongside the Market Transformation Programme to add credence to their scoping study into the lack of regulation within the field of prime cooking equipment. The Infinity Fryer has also been presented to the Sustainable Procurement Task Force as an example of innovative technology. Cooking Oil Contamination The Clean Up Frying summit also highlighted the lack of knowledge concerning acrylamides and the risks surrounding process contamination. Our work with academics has raised the profile and awareness of the impact of acrylamides in food and the Group participated in a BBC News feature on this subject in June 2005. We have provided the Food Standards Agency with our findings on acrylamides in fried food and launched a major 6-month investigation with academics from Reading University. Health & Safety in the Commercial Kitchen In part of our research, we called on caterers to give us their views on issues relating to deep fat fryers in the kitchen. Most catering establishments use old-fashioned sediment zone fryers and removing oil and cleaning is considered to be the worst and most dangerous job in the kitchen. As a result there are many slips, trip and burn accidents and kitchen staff are reluctant to change the oil at all, thus increasing the risk of cooking with contaminated oil. The Infinity Fryer has been designed to reduce these cleaning hazards by introducing a simple to use push button filtration system. Waste Oil We also undertook extensive research which revealed that although the UK waste cooking oil disposal regulations changed in October 2004, there is low awareness amongst Local Authorities about what impact the changes have had and who is policing the new regulations. Early indications are that less than a quarter of Authorities are fully aware of the regulations and even fewer are enforcing them. The Infinity Fryer helps to maintain oil and keeps process contamination to a minimum, but it also uses about 30% less oil than many of its competitors. Further information on this and other aspects of how the Infinity Fryer improves food standards is available at www.cleanupfrying.com. External Recognition and Awards Our investment in developing new products with a focus on energy efficiency, healthy eating, food safety and performance is a major driver for our business. As well as the Infinity Fryer, we have developed other major technological innovations such as ECA approved ‘Cool Smart’ refrigeration control technology and glycol refrigeration systems from Williams, Bongard’s premium bakery ranges with radiated heat technology, Stellar’s steamers and Eloma’s combi-ovens. This contribution to sustainability is being increasingly recognised through external awards. We are also very pleased that our recently acquired German company, Eloma, has received the Dr Georg-Triebe Innovation Award. Eloma produces world leading combi ovens, which combine convection and steaming. The award has been given for its ‘Multi-Eco-System’ – a device that reduces energy and water consumption.

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Mark Whalen, managing director of Victory and his team receive the Energy Star Partner of the Year Product Manufacturers Award

We are delighted that our North American commercial refrigeration business has been awarded the Energy Star Partner of the Year Product Manufacturers Award. This is a great achievement for Victory, selected from the spectrum of US manufacturing companies. It recognises Victory’s commitment to reducing energy consumption and to raising the profile of energy issues within the sector. Victory is the first foodservice equipment maker in Energy Star’s 15 year history to be presented with the manufacturing category award. Falcon have received a string of awards during 2005 for the Infinity Fryer, including the prestigious FCSI Europe Award for Distinguished Development. They received two awards at the Catering Update ‘Excellence in Catering Equipment & Supplies 2005 Awards’ – for the best new item of prime cooking equipment and the overall catering excellence award. Falcon also received the Forth Valley Award 2005 for innovation and creativity.

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8. VERIFICATION, NOTES & FEEDBACK Verification The data in this report is subject to our internal verification processes and those businesses accredited to ISO 14001 and other standards have periodic external audits. We have considered the potential for additional external verification, and at the current stage of development, we believe the benefits to stakeholders and the Company are limited and do not at present justify the costs. Notes 1. Data gathering and comparisons. The Group focuses on gathering data that is of

commercial value where this helps to monitor and demonstrate our CSR performance. Our data gathering process is revised every year as it is refined and improved. We collect group wide data on an annual basis, although many operations may collect data more frequently as necessary.

There are, however, improvements to be made in collecting information from some

parts of the Group, particularly in the case of recent acquisitions. It is possible that this may result in increases in the statistics and variables measured. Where practicable, we will ensure meaningful comparisons between annual performance indicators.

2. Guidelines. A variety of guidelines, reports, standards and other authorities have

been consulted and utilised in the compilation of this report. These include the UK Government’s Department for the Environment Food and Rural Affairs environmental reporting guidelines and the GRI Sustainability Reporting Guidelines (2002).

Feedback We welcome your feedback on this report and your comments on how we could further develop CSR reporting. You can review our policies and CSR updates on the corporate website at www.agafoodservice.com. You can contact us by e-mail at csr@agafoodservice.com or write to us at Aga Foodservice Group plc, 4 Arleston Way, Shirley, Solihull B90 4LH.

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