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Health and Safety

Concern for health and safety is intrinsic to our operations and our value propositions. Our objective is that we will do business without harming people or the environment. Over the past year, we made further progress in making Invensys a safer organisation. We launched EHS Induction Training to all Invensys employees, temporary workers and contractors in order to stress the importance of safety to our organisation and raise

safety and environmental awareness. This training highlights the philosophy that all employees are responsible for health and safety, and that we aspire to prevent all incidents. This training has been integrated into the new employee induction process and must be completed within the first 10 days of employment. A measurement of our progress and commitment to health and safety is reflected by our ongoing reduction in Injury/Illness Incident Frequency Rates.

For the period under review, the Total Recordable Case Incident Rate (TRCIR) fell 24% from 0.74 to 0.56 and the Lost Workday Case Incident Rate (LWCIR) fell 37% from
0.35 to 0.22. Each of our individual businesses also compares favourably against our industry peers in terms of Injury/Illness Incident Frequency Rates. For example our largest business, Invensys Controls, ended the year with a TRCIR of 0.42 as compared to a peer company average of 5.1. For the same business, the LWCIR was 0.17 compared to a peer company average of 1.0; the peer company average is based on the 2006 US Bureau of Labour Statistics North American Industry Classification System code 335000 for electrical equipment, appliance, and component manufacturing. We are proud of our significant accomplishments in reducing injuries and injury rates, but recognise that we still have more progress to make to keep all employees safe.

In order to monitor our safety and compliance performance, we launched the EHS Decision Support System (EHS DSS) in early 2007. This web-based data system is used by all global locations to gather, track and manage all EHS events that are critical to our business performance. Events such as work-related injuries and illnesses, environmental excursions, EHS compliance audits, loss control surveys, thermographic surveys, industrial hygiene surveys, security assessments, safety tours, and government regulatory inspections are managed within the data system. All findings and corrective actions are managed and tracked until closure is achieved. We also launched the Safety Awareness Metric (SAM) to all our major locations in 2007 in order to drive and measure proactive safety performance. The SAM measures several leading EHS activities at an operational level such as on-time closure of corrective actions, completion of EHS training, and safety tours/inspections conducted by all levels of the organisation.

Performance against the SAM is measured monthly with the EHS DSS and integrated into the overall metrics of each of the business groups. Starting next year, the EHS&S function will review this data with the Board on an annual basis to ensure that the proper elements are incorporated into the business strategies. Our Chief Executive reviews, on a monthly basis, and presents to the Board the EHS&S performance data, including any major incidents. We are pleased to report that there were no major incidents or work-related fatalities during the past year. Additionally, no violations, citations or fines were issued by governmental bodies related to health and safety.

Beyond the traditional safety programmes which look to prevent injuries and illnesses, we have also continued to promote wellness programmes in an effort to improve the overall health and well-being of our employees. For example, in our Mexico locations we have focussed campaigns on early detection and management of health issues such as cancer, osteoporosis, hypertension, diabetes control, cholesterol and weight management. We also provide onsite health support, vaccinations and family planning support. We have begun to see benefits from these programmes including improvements in overall employee health, an increase in employee motivation and morale, a reduction in absenteeism and an improvement in the working environment.

Also in 2007, our Westinghouse Rail Systems Limited business based in the UK won ‘Best Achievement in Health and Safety for Manufacturing’ at the prestigious Safety and Health Practitioner (SHP) awards. SHP is the official magazine of the Chartered Institution of Occupational Safety and Health (IOSH) with more than 30,000 readers. The SHP awards encourage and recognise genuine good safety practice and achievement above and beyond the normal practices.