QUESTIONS AND ANSWERS

Ethical Issues
Environmental Issue
Corporate Governance

What is the Company Goal?

What are the Company Values?

		Improving profitability and having the drive to succeed
		An absolute commitment to safety and the environment
		Valuing customers as the lifeblood of our business
		Developing the potential of our employees in a stimulating and enjoyable workplace
		Treating everyone with dignity and respect
		Being enthusiastic about doing things better
		Making a positive contribution to our community
		Having integrity and high standards in everything we do

What percentage of your company's turnover derives from the following activities?

Are any of the products manufactured by your company, or their ingredients, tested on animals?

While none of our raw materials are themselves tested, we are aware that some of the precursor raw materials used by our suppliers have to conform to NONS Regulations (1993) where such testing is required to provide toxicological data to the HSE. Our suppliers commit to responsible policies of minimising such testing to the absolute essential and wherever possible adopting "in vitro" rather than "in vivo" methods.

Has your company adopted uniform social and employment standards in all its operations?

James Cropper plc's activities are concentrated on one site in Burneside, Cumbria employing in the region of 480 people. The Group's Human Resources Mission Statement is reproduced below:

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To develop and uphold policies and initiatives aimed at improving customer service through increased organisational effectiveness and in doing so, ensure that; we provide equal opportunities in employment our selection processes lead to the appointment of only the best people each person is encouraged to develop to their full potential our people are provided with appropriate and adequate training resources each person's performance is measured and reviewed we encourage open communication, except where precluded by security, personal or commercial sensitivity the highest standards of integrity are nurtured the health and welfare of our people is safeguarded by providing adequate training and resources we remunerate our people on a competitive and equitable basis our disciplinary code is appropriate and fairly applied policies are documented and communicated.

What action is the Company taking to improve its Health and Safety performance?

In James Cropper PLC a high priority is given to Health and Safety at Board Level and adequate resources and funds are available to support actions and initiatives. Targets for improving safety standards are set, with legal requirements defined as the minimum level of achievement. It is the Group's strategic aim to progressively improve health and safety practices as an integral component of the working environment by:

- meeting and where possible exceeding standards set by legislation and approved codes of practice
- training and informing our people of their responsibilities for the health and safety of themselves and others
- encouraging active health screening for employees
- measuring safety performance and by continuous improvement eliminate hazards
- seeking to extend our standards to our suppliers and customers and anyone else affected by our activities.
Work continues at an unprecedented level to improve our safety management processes and safety culture. There has been considerable focus on training, most notably on equipment isolation and manual handling with the majority of our employees participating in the programme.
Risk assessments are carried out as a matter of routine to identify potential hazards. Employees are expected to report every accident or dangerous occurrence. The number of incidents reported during recent years has increased indicating a higher awareness amongst employees as to their individual responsibilities for preventing accidents. Teams of auditors undertake an comprehensive assessment of health and safety practices within each department or working area. At the conclusion of the audit a detailed report with recommendations for improvement are presented to the local management team. We are confident that the measures we are taking will improve our health and safety performance. Increasingly it will be the awareness and behaviour of our employees that will be crucial in making the difference.
The Company is fully committed to the industry-wide PABIAC initiative.

What does the Company do to protect the Environment?

A comprehensive mill-wide environmental policy ensures stewardship of our natural resources and continual investment in this programme is aimed at protecting the countryside for generations to come.

Click here to be taken to our environment section which describes in detail what we do to maintain and protect our enviroment.

What importance does the Company attach to the management of risk?

The management of risk is fundamental to sound business management and underlying profit performance. Risk management transcends every aspect of the organisation and its activities, affecting policies, employees, assets, customers, suppliers and the wider community. In September 1999 the Turnbull Committee presented its Report on Internal Controls. The Report is an enhancement to the Stock Exchange's Combined Code. Companies will be required to establish the necessary procedures to implement the guidance by the end of their first accounting period after 23 December 1999. Full compliance will be expected for year ends after 23 December 2000. At James Cropper PLC we are confident that we are compliant with the recommendations of the Turnbull Report.

How in practical terms does the Company manage risks?

The Board of James Cropper PLC has overall ownership of the risk management strategy and process and coordinates activity across the Group. The Group manages risk by a combination of insurance and self-insurance. Self-insurance refers to actions taken internally or in conjunction with other third parties. In broad terms high risks in financial and operational areas are more dependent on insurance than risks in commercial and personnel areas, which because of their nature, are more likely to be managed by self-insurance. In addition to the Audit Committee, which is a mandatory requirement under The Stock Exchange Combined Code, the Board has for some time established other Steering Groups with risk management briefs. These include:

The Group does not have an internal audit department. However cross-functional teams regularly carry out Health & Safety and Environmental audits. Throughout the year considerable resource and effort has been devoted to minimising risks to health and safety as part of the overall industry-wide PABIAC initiative. In early 2001 the Group received accreditation to the international environmental standard ISO14001. This standard requires holders to maintain environmental standards in line with established best practice. Our operational quality processes received ISO 9001 accreditation in 1990. Not only does compliance with these standards form the basis of sound internal control but they are increasingly important in satisfying customers aspirations with regard to the management of their supply chains. BSI audit our processes for continuing compliance every six months. TFP and Converting divisions are accredited with the Investor in People Award. This accreditation is subject to triennial audits. The next audits will take place in 2002. We work with our financial auditors, PricewaterhouseCoopers and other specialist consultants to identify risks and weaknesses in internal controls.

Both Group final salary pension (defined benefit) schemes were valued during the course of 2000. As a consequence of these valuations the Board has decided to close membership to new employees to contain the Group’s exposure to rising pension costs. All new employees will be able to join a Group Personal Pension (defined contribution) plan. The Group exposure to employee’s GPP plans will be limited to a fixed percentage of contractual pay.

What processes are in place to ensure that the whole organisation understands the need for improved internal control?

All employees have some responsibility for internal control as part of their accountability for achieving objectives. They, collectively, have the necessary knowledge, skills, information and authority to establish, operate and monitor the system of internal control. Sound internal control is primarily dependent on people understanding the key issues that relate to their area of activity and what they are expected to do in certain circumstances. This understanding stems from the overall Strategic Aims of the Company and it's Values. The Aims set the direction. Our Values influence our behaviours. Sound behaviours are critical to the development of successful relationships between people. The Aims are encompassed in a comprehensive financial planning and budgeting process with performance monitored on monthly basis. Through our performance management process the Company's Strategic Aims, plans and budgets are translated into objectives at all levels of the organisation. The performance management process is seen as a key vehicle through which individual employee's performance can be enhanced and developed for the mutual benefit of the individual and organisation as a whole. Training and development increases employees competencies and therefore enables them to deal with risks more effectively. Clearly defined policies, processes and procedures provide employees with guidance. There has been considerable effort in recent years to document and revise our P,P& Ps across all areas of activity. These allow employees to understand the relevant practices to be deployed. Our information systems are being extensively modernised to provide faster communications and greater accuracy that will enable the organisation to become more efficient and effective. Throughout our organisation we are working strenuously to eliminate waste. All these initiatives will allow us to become more responsive to the needs of our customers in an ever competitive and shrinking world.