Compass Group Annual Review 2006

Summary directors’ report

Business activities, results and development

A review of the Group’s business activities, results and future development can be found in the various sections of this site.

Principal risks and uncertainties

The Board has a pro-active approach to risk management with the aim of protecting its employees and customers and safeguarding the interests of the Company and its shareholders.

Compass Group has specific policies in place to ensure that risks are properly evaluated and managed at the appropriate level with the business. A risk assessment exercise is carried out across the Group each year and the outcome is reviewed by the Board bi-annually.

Outlined below is a summary of what the Board considers to be the key risks and uncertainties to successful delivery of its corporate objectives and the activities the Group undertakes to mitigate against these key risks and uncertainties:

Description		Mitigating activities
Food safety	–	the Group has in place policies, processes and training procedures to ensure compliance with its legal obligations in relation to food hygiene and safety.
Client retention	–	our business model is structured so that we are not reliant on one particular sector, geography or client.
People retention and motivation	–	training and development programmes, succession planning and performance management are designed to align rewards with our corporate objectives and to retain and motivate our best people.
Health, safety and environment	–	our Safety, Health and Environment Forum (SHEF) promotes policy, sets standards and monitors best practice and reports to the Corporate Responsibility Committee.
Purchasing	–	to reduce risk we are focusing on traceability, clear specification of our requirements to nominated suppliers and the improvement of purchasing compliance by unit managers.
Litigation	–	though we do not operate in a litigious industry we have in place policies and processes in our major countries to mitigate against third-party litigation.
Reputation	–	the Group’s zero tolerance based Code of Ethics governs all aspects of our relationship with our stakeholders. The Corporate Responsibility Committee investigates any alleged breaches.

Dividends

A final dividend is proposed for the year ended 30 September 2006 of 6.7 pence per ordinary share payable on 5 March 2007 to shareholders on the register at the close of business on 9 February 2007. The shares will be quoted ex-dividend from 7 February 2007. This together with the interim dividend of 3.4 pence per share paid on 7 August 2006 makes a total for the period of 10.1 pence per share.

Environment

Information relevant to the Group’s responsibilities towards the environment is given in the section Acting responsibly in business. The Group used Trucost PLC to identify the environmental impacts that the Board believes are appropriate for an understanding of its performance. In Trucost PLC’s opinion, Compass Group PLC has now identified the material KPIs that it should report against in future annual report and accounts in accordance with Government guidelines.

Directors

Biographical details of the directors are set out in the section Board of directors. Sir Roy Gardner was appointed to the Board on 1 October 2005 and he succeeded Sir Francis Mackay as Chairman on 1 July 2006. Richard Cousins was appointed to the Board on 2 May 2006 and he succeeded Michael Bailey as Chief Executive on 1 June 2006. Sir Ian Robinson and Gary Green will be appointed to the Board with effect from 1 December 2006 and 1 January 2007 respectively. Alain Dupuis, Michael Bailey and Sir Francis Mackay ceased to be directors on 1 October 2005, 31 May 2006 and 30 June 2006 respectively. Val Gooding will cease to be a director with effect from 31 December 2006. Details of the directors’ remuneration and interests in Compass Group shares are set out in Summary director’s remuneration report.

Retirement and re-election of directors

Andrew Martin and Peter Cawdron retire from the Board by rotation. Andrew Martin will stand for re-election at the 2007 Annual General Meeting. Peter Cawdron will not seek re-election and will retire at the conclusion of the 2007 Annual General Meeting. Richard Cousins, Sir Ian Robinson and Gary Green are standing for election at the 2007 Annual General Meeting.

Annual General Meeting

The Annual General Meeting will be held at the Queen Elizabeth II Conference Centre, Broad Sanctuary, Westminster, London SW1P 3EE at 11.00am on Friday 16 February 2007.

Summary financial statement

This summary annual review and financial statement does not contain sufficient information to allow as full an understanding of the results of the Group and state of affairs of the Company or the Group, and of their policies and arrangements concerning directors’ remuneration, as would be provided by the full annual financial statements and reports.

Members who wish to receive full financial statements and reports in place of the summary financial statements for the year ended 30 September 2006 and all future years should write to the Company Secretary at the Company’s registered office, the address of which is shown on the back cover.

The independent auditors’ report on the full financial statements of the Group for the year ended 30 September 2006 is unqualified and does not contain any statement concerning inadequate accounting records or failure to obtain necessary information or explanations.