Chief Executive's introduction

Smiths is committed to doing business the right way. We try to ensure that our focus on growth is balanced by a respect for the environment and communities in which we live and work.

This year, we have strengthened that commitment through a combination of innovative global projects and smaller, but nonetheless significant, local initiatives.

I am always pleased to hear reports of what the businesses are doing in their local communities and take great pleasure from seeing some of them highlighted here.

Since the last Corporate Responsibility report we have sold our Aerospace division to the General Electric Company. Over the past five years, we have invested heavily in aerospace technology and this investment, together with the successful efforts of our dedicated employees, won us positions on every major military and commercial programme.

The structure of the aerospace industry is changing - in particular its increased capital requirements and the growing importance of supplier scale, especially as the next generation of large programmes kicks in. The Board considered these issues and the opportunities for Smiths going forward and instigated a thorough process which led to the deal with GE. By selling Aerospace, we crystallised the value for our shareholders and at the same time, we know that this business has gone to a great owner.

Last year's Corporate Responsibility report was our first and we committed to dialogue with key stakeholders to develop a better understanding of our corporate responsibilities as they apply to Smiths global operations. We appointed the environmental consultancy ERM to assist with this and the findings, which are discussed elsewhere in this report, reassure us that we are heading in the right direction.

I am pleased that the programme to certify all sites with more than 50 employees to the ISO14001 environmental management standard was virtually complete at the financial year end and that our other environmental targets have been met.

There is always more to do on health and safety. Whilst our trends are positive and our rates are better than ever before we are going to push ahead with a programme of implementation of the health and safety management standard OHSAS18001. Two of our three most serious injuries were to contractors working on our premises and this is an area which we know offers particular challenges.

We received encouraging feedback from readers about the 2006 report typically remarking that it felt frank, honest and to the point. Hopefully we can achieve this again this year.