Mitchells & Butlers plc Corporate Social Responsibility Review 2007 Mitchells & Butlers Chief Executive introduction Corporate Social Responsibility Review 2007

Our commitment to Corporate Social Mitchells & Butlers is the leading operator of The Board takes regular account of social, Responsibility (CSR) policy means that managed pubs and pub restaurants in the UK, environmental and ethical matters concerning employing nearly 43,000 employees in some the Company through the Chief Executive's responsible practices are at the heart 2,000 businesses. regular reports to the Board, presentations to of our business on an every day basis. the Board at its strategy meetings and through Our commitment to Corporate Social adoption of its Code of Ethics. The Company Responsibility (CSR) policy means that Secretary is responsible for ensuring that responsible practices are at the heart of our Directors are made aware of and receive training business on an every day basis. in respect of such matters. Formal reporting to That commitment reflects our core belief that the Board of social, environmental and ethical sustainable business success has to be based matters takes place every quarter. on experienced, professional licensed retailing Our philosophy for corporate social responsibility which builds upon the reputation of each combines the best of the traditions of the pub individual pub in its own community. landlord's commitment to the community with We operate in a highly regulated industry and leading practice in crucial areas such as the recognise that attached to the grant of our responsible retailing of alcohol, food safety and licences is the primary obligation to ensure the staff training. responsible operation of our premises at all This review records our commitment to times. This obligation is not just to our responsible retailing, shares our best practice customers, but also to our investors, employees, and successes, as well as outlining the suppliers, neighbours and key authorities. We challenges and opportunities for our business. also have an inherent duty under our licences to This year we are delighted to have been named, promote the objectives of the Licensing Act of for the second time, as the most responsible 2003, namely: drinks retailer in the managed pub sector in recognition of our consistent focus in this area; The prevention of crime and disorder and we continue in our aim to reduce the Public safety impact of our energy usage across our estate, by opening our first energy-saving pub restaurant The prevention of public nuisance at the Toby Carvery, Banbury. The protection of children from harm We are proud of our achievements, underpinning our reputation for sustainable and Therefore, we strive to ensure that corporate ethical business practices. We look to build on social responsibility underpins our business the firm corporate social responsibility operations at every level. foundations we have in place and to continue to progress our policy in the future.

Tim Clarke Chief Executive Mitchells & Butlers About this Review Corporate Social Responsibility Review 2007

Mitchells & Butlers publishes an annual integrated corporate social responsibility report every December. This report covers five areas that are of key importance to us as a Company, as well as to our customers, employees, local communities, suppliers and shareholders: Marketplace Employees Community Environment Corporate Governance

An electronic copy of the 2004/5 and the 2006 CSR Reviews are available via the Company website www.mbplc.com/socialresponsiblity

ContentMarketplace 01Employees 11 Responsible retailing Health and safety Industry issues Employee policies Retail team training Employee training Customer and employee safety Employee benefits and reward Building infrastructure Employee engagement Good food and food safety

Community 17 Environment 23 Corporate Governance 25 Community activity Minimising environmental impact Corporate Governance Heart of the Community Awards Energy efficiency Corporate charity partnership Recycling National activity Support in Birmingham Marketplace 01

Mitchells & Butlers owns and operates around 2,000 high quality pubs and pub restaurants in prime locations across the UK; around 40 of our sites are in Germany. Mitchells & Butlers 02 Marketplace Corporate Social Responsibility Review 2007

The nature of our industry is such that Responsible retailing it is essential that we operate our pubs, bars and restaurants in a highly Alcohol and Social Responsibility policy responsible manner. The safety of our Mitchells & Butlers was one of the first Our policy highlights are as follows: employees, customers and the wider companies to establish a comprehensive policy We are committed to the responsible retailing for the responsible retailing of alcohol, in 2000. community is paramount and a key of alcohol and recognise that it is a Our Alcohol and Social Responsibility (ASR) principle of our corporate social fundamental part of what we do, and how we policy includes clear guidelines on the do it, every day responsibility policy. responsible operation of our pubs; the sale and promotion of alcohol; our under 18s policy; and We do not serve customers whom we believe is underpinned by our employee training and to be under 18 - nor to anyone whom we development programmes, to ensure the policy suspect of passing alcohol to under 18s lives in all our businesses on a day to day basis. If a customer looks under 21 we will ask for a The introduction of our leading policy shaped recognised form of ID the development and implementation of We do not serve alcohol to anyone whom we industry-wide codes of conduct. We update the believe to be intoxicated policy regularly, re-launching it in October 2004 and in May 2006. In August this year we again We do not permit promotions limited to very updated the policy to reflect: short periods of time such as happy hours We do not offer any incentives to our The acceptance of an international passport customers to drink irresponsibly as a recognised form of ID. We continue also to accept UK Passports, UK photograph Our employees can easily access information driving licences, and proof of age cards about units of alcohol and alcohol by volume bearing the PASS hologram as recognised in order to provide that information to guests forms of ID We value and respect the partnerships our The tightening of guidelines around pricing, managers have with local authorities discounting and promotions across our businesses Our senior managers are actively involved in setting industry standards and lead by The inclusion of new information listing the example units of alcohol contained in commonly served drinks Mitchells & Butlers 03 Marketplace Corporate Social Responsibility Review 2007 (continued)

Challenge 21 Responsible Promotions policy Alcohol awareness Mitchells & Butlers was the first company to As part of our Alcohol and Social Responsibility Mitchells & Butlers is a major funder of the launch a Challenge 21 campaign, in 2004, policy, we have strict guidelines in place Drinkaware Trust, an independent UK-wide which has now been adopted as an industry- regarding the pricing and promotion of our charitable trust with the objective of positively wide initiative. The campaign is not an over 21s drinks. Any promotional activity must be changing public behaviour and the national only entrance policy but rather a requirement to approved by the Marketing Director and observe drinking culture, to tackle alcohol-related harms. ask for ID, if a customer appears to be under the guidelines outlined in our ASR policy. In addition our Chief Executive is also a Trustee 21, so as to prove that he or she is at least 18 of the Drinkaware Board. years of age. The principle of Challenge 21 - to The guiding principles of the Company's support and educate our employees and Responsible Promotions policy are: Our updated ASR policy issued in August this customers on the issues relating to under age year now includes details of units of alcohol and sales - is now firmly embedded in our Company To offer guests real service and value at fair, the alcohol by volume (ABV) percentage of culture. competitive prices every alcoholic product sold in our pubs, to ensure that our customers have the information Through our various training programmes, all To encourage guests to return to our pubs, they need to make the appropriate choices as our retail employees, including our contracted rather than to encourage increased regards their consumption of alcohol. Brand door staff, are made aware of their consumption by guests during a single visit specific training highlights ABV information to responsibilities for serving alcohol and the To ensure that our guests are offered choice our retail teams; ABV information and personal penalties for failure to comply with the and value without inducements to drink to responsible retailing messages are also included Licensing Act requirements. excess. We will not, for example, offer any '2 in some drinks menus and promotional materials, to raise customer awareness. For some pubs within our portfolio, our training for the price of 1' drinks promotions programme is prioritised to reflect the To encourage and support designated driver Jean Collingwood, importance of the Challenge 21 initiative. For and other anti-drink/drive initiatives Chief Executive, Drinkaware Trust example, within our Scream pubs, a brand “Programmes that educate retail which is predominantly student focused, Mitchells & Butlers is a member of the British Challenge 21 training takes place over four employees and local communities in Beer & Pub Association and we played a central joined up activities are highly effective. dedicated weeks a year to co-ordinate with the role in the formation of the organisation's code academic calendar. aimed at preventing irresponsible promotions. In Focusing on education is essential to We also regularly audit our businesses to ensure addition all our promotional activity complies create a responsible drinking culture our Challenge 21 practices are being with the Portman Group's Code of Practice. in the UK today. Mitchells & Butlers maintained and we employ an independent has demonstrated a positive company to perform test purchasing visits as a commitment to achieving this through further check. creating a highly successful and In April 2007 we installed systems in our exemplary CSR programme, which businesses to record all instances of refusal to serve. We are currently registering around raises the bar in encouraging 50,000 refusals each month, a significant excellence across the industry.” number, which highlights the challenges faced by our retail teams on a daily basis.

Case study: Responsible Drinks Retailing Award We were delighted to be awarded, for the Company was praised for our internal team of second time, the title of Most Responsible experts who drive the implementation of our Managed Pub Company at the Morning responsible retailing policies across our estate. Advertiser's Responsible Drinks Retailing (RDR) Awards 2007. The judges also highlighted our newly updated ASR Policy and specifically our communication The awards, hosted by trade publications the with customers on ABVs and units of alcohol. Morning Advertiser and Off License News, were devised to recognise the work and commitment The award was presented by Andrew Pring, of the on- and off-trade and to share best editor of the Morning Advertiser, who practice for the responsible retailing of alcohol, commented, “The Company builds aligned to the Government's Alcohol Harm relationships with stakeholders from grass roots Reduction Strategy. right up to the most senior Government levels. The sheer scale of Mitchells & Butlers' We were recognised for our comprehensive staff operation makes its total commitment to training programme and for our established ensuring responsible drinks retailing throughout network of relationships with the police and its estate deeply impressive.” local authorities across the UK. In addition, the Mitchells & Butlers 04 Marketplace Corporate Social Responsibility Review 2007 (continued)

Industry partnerships The Chairman of the Belle Vue Neighbourhood Across the country, a number of individual pubs Watch committee in Blackpool, commended have gained recognition from city councils and We work closely with our key authorities, David McCartan, manager of the Belle Vue, the police for running safe, responsible including the police, fire, local authorities and Blackpool and his team on being great businesses via the Best Bar None Award the Government, in pursuit of our commitment neighbours, commenting: scheme and City Safe schemes. to responsible retailing practices. “We applaud the actions of your pub We also support a number of Business As a Company, we are committed to Improvement District schemes (BIDs), for encouraging and supporting our individual management team who have vastly example Broad Street, Birmingham and the businesses in their role within the community. It improved the quality of customer newly created Nottingham BID. is Company policy for all pub managers to join service and safety… they have and support their local 'Pubwatch', if one exists. The Pubwatch scheme aims to achieve a safer succeeded in transforming the social drinking environment in all licensed neighbourhood by reducing antisocial premises throughout the UK by building behaviour, reporting drug problems to relationships between pubs and authorities in the police and making a positive the area, helping employees to identify and resolve potential issues before they escalate. difference to the area.” The scheme also provides a valuable discussion forum for handling local issues.

Case study: Portsmouth Best Bar None Awards Case study: Broad Street, Birmingham In 2007 the BID launched its biggest marketing Business Improvement District initiative to date, with the creation of the The Portsmouth Best Bar None awards were Birmingham Walk of Stars. Rock legend and launched in September 2006 as part of a drive Mitchells & Butlers is an active member of the famous Brummie, Ozzy Osbourne, accepted the to combat binge-drinking and alcohol-fuelled Broad Street Business Improvement District BID's invitation to become the first star violence. Judges visited each licensed business (BID) with a number of pubs in the area and a honoured with the Hollywood style pavement to assess what it was doing to improve its senior management representative sitting on the attraction, closely followed by comedian Jasper standards. Board of Directors. Carrott. The 2007 awards saw a total of 45 venues in the The BID was set up because businesses were For Mitchells & Butlers, working with the BID area signed up to the scheme. The best of the becoming concerned at the increase of anti- has improved the profile of our pubs in the area best received awards and two Mitchells & social behaviour, alcohol related disorder and and enabled us to develop better working Butlers pubs were named winners. The Fleet & general rise in recorded crime in the Broad relationships with the police and local authority. Flares, King Henry I Street, Portsmouth was Street area. The ongoing aim of the BID is to named Traditional Pub Runner Up and Gary Taylor, Director, Broad Street BID, deliver a brighter, safer, cleaner environment for Martha's, Commercial Road, Portsmouth was comments: ” The work of the Broad Street businesses and customers. crowned Bar Runner Up. Business Improvement District continues at a Over the last twelve months the BID has great pace and I am delighted we have made Declaring the evening a huge success, awards continued to introduce a number of successful significant progress in our second year. The co-ordinator Lindsay McCurdy, from Portsmouth initiatives which have helped to drive down success of the BID is a result of our excellent City Council, said: “It's been a great night, well general crime and build excellent relationships working partnerships with Birmingham City worth all the effort everyone has gone to. Over between business and the West Midlands Council and West Midlands police, as well as the the past few months the venues involved have police. Four full time street wardens now patrol dedicated help and commitment of all our been taking part in a variety of courses, the Broad Street area from late afternoon to the business partners. I am grateful for the support including first aid and how to escort people off early hours, creating a safer environment for of Mitchells & Butlers who have played a the premises without injuries. They have all customers and employees in the area. A significant part in establishing the BID and have worked very hard and next year we hope to see comprehensive deep cleaning programme and taken a leading role in our activities. " even more licensed businesses join us in investment in floral displays has also helped the making Portsmouth a safer place to go out.” Over the next year the BID plans to make area become a cleaner place. The successful improvements in area lighting and launch a taxi marshal scheme enables safe access to the We support regional Crime and Disorder major marketing effort to attract new developers district by both taxi drivers and visitors. partnerships and aim to participate fully in the to the area, with a dedicated consumer website. drive against 'binge drinking' and its related effects, as outlined in the Alcohol Harm Reduction Strategy for England. Mitchells & Butlers 05 Marketplace Corporate Social Responsibility Review 2007 (continued)

Industry issues Licensing Act Smoking bans The Licensing Act 2003 came into effect on 24 We believe the introduction of the smoking bans Lisa Sharkey, November 2005. From that date, Mitchells & will be beneficial to our businesses in the longer Partner, Poppleston Allen Butlers' pubs and pub restaurants have been term. It presents us with a real opportunity to able to make use of any variations to previous attract new customers, who did not previously 'Like a finely-tuned engine, Mitchells & opening hours granted by the relevant local use pubs because of tobacco smoke, to come Butlers is one of the most professional authority. into our pubs and pub restaurants across the country. leisure companies in the market. It is We applied for an average of just over one alive to its responsibilities both in additional hour per day per pub. In making Our experience since the bans came into force terms of the internal operation of its applications, we sought a careful balance shows that large pubs, serving high volumes of between the opportunity to offer our guests good food at attractive prices, are already seeing premises and upon its impact upon more flexible opening times with respect for this benefit. In terms of customer patterns, the community and it has well local communities. In the majority of cases, our there has been a marked shift in the developed operating practices and applications were successful; we applied for no composition of people visiting with many new, procedures.’ 24 hour licences. The Company's experience casual, infrequent users seen in the pubs and has been one of successful implementation, those regulars who are smokers, coming out much of this due to our extensive preparation later and less often. and training. We're continuing to develop the reputation of In April 2007, the Government consulted on its our pubs for serving good food at good value Guidance to local authorities on the Licensing prices, focusing on innovation in the Act. It re-iterated the view that the fixed and development of our menus and drinks ranges, artificially early closing times which were to create a wide choice of dishes using quality established under the Licensing Act 1964 were ingredients which are freshly prepared. “one of the key causes of rapid binge drinking prior to closing times; and one of the causes of disorder and disturbances when large numbers of customers were required to leave the premises simultaneously.” A Home Office report published in July this year announced the overall results for violent crime, disorder and criminal damage since the introduction of the Licensing Act. The actual data showed that there have been 26,367 fewer violent offences and 28,815 fewer offences in total post the Licensing Act. Anecdotal evidence from our pubs suggests that closing time is calmer, with no sudden rushes to the bar in respect of last orders and a more leisurely dispersement of customers out of the pub. Mitchells & Butlers 06 Marketplace Corporate Social Responsibility Review 2007 (continued)

Gaming Retail team training Prevention of terrorism training Mitchells & Butlers was involved in the creation With nearly 43,000 employees nationally, we are The safety of our customers, staff and premises of the first gaming industry Code of Practice in committed to ensuring that all our retail is paramount. Security procedures and the 1990s, which aimed to prevent under 18s management and employees have the skills to standards are continually reviewed to ensure the from playing pub gaming machines. We have perform their roles effectively. safe and responsible operation of our contributed for many years – in cash and in kind businesses. – to charities such as GamCare that work in the Each retail employee is trained via our internal area of treatment for problem gamblers. In programme, Stepping Stones. This teaches Last year, Mitchells & Butlers was represented at recent years, our contributions have been made them the legal requirements of their role a senior level on the steering group for via the Responsibility in Gambling Trust. including their responsibility not to serve alcohol Operation Griffin, a joint industry and Mitchells & Butlers' Director of Electronic to under 18s and to those who are intoxicated. Government body established to determine how Leisure is a Trustee in this organisation. the industry and the authorities can work more A significant amount of time and effort is spent closely in the event of a terrorist attack. Through our support of the British Beer & Pub on training managers and assistant managers Association, we have worked closely with the through the Competence in Retail Management Following this, we have implemented specific Gambling Commission on the drafting of the Certificate and Management Foundation Course training for all our London and Birmingham Gaming Machine Code of Practice, which programmes. Each year, around 2,500 based managers, retail business managers and replaced the industry's voluntary Code from 1 members of our retail teams are trained through door staff on the prevention of terrorism and September 2007. these respective programmes, giving them the support of the police. Similar training is planned essential skills to operate our businesses legally for our other city centre businesses shortly. The Gambling Act 2005 came into full effect on and safely. This training also gives managers 1 September 2007. We continue to believe that the knowledge required to provide on-the-job the impact of the Gambling Act will be broadly training to retail staff. neutral for Mitchells & Butlers, given that: Conflict management Regular updates on responsible retailing issues and relevant training are given at Mitchells & Butlers recognises that failure to There has been a scaling back in the number identify and resolve potential sources of conflict of additional casino operations communications forums and team meetings and are communicated via line management, the in our pubs or at the door can have serious There have been few issues with pubs Company Magazine, the security and licensing consequences. As a result, conflict applying for new permits for gaming newsletter, and individual brand newsletters. management training is undertaken, as machines from local authorities. In some appropriate, within our retail management areas additional machine permissions have training, to help reduce the risk of serious been granted which had previously been incidents and better protect both employees and denied. The DCMS delivered on its promise National Certificate for Personal Licence guests. Holders to provide 'Special Grandfather Rights' in The course gives our managers the knowledge respect of machine numbers in premises that and develops the necessary skills to handle Mitchells & Butlers employs a network of have permissions granted as a consequence difficult situations within our business. of their liquor licence. internal trainers to deliver the new British Institute of Innkeeping (BII) National Certificate The conflict training course objectives are to: for Personal Licence Holders (NCPLH) training programme. We developed our own training Identify the reasons why conflict situations package based on the BII syllabus and all our occur licensed house managers are now fully Assess and reduce the risk of violence in the qualified. Our policy is to have a minimum of workplace two personal licence holders employed in each pub and many of our larger pubs have more. Respond appropriately to a conflict situation This year, over 3,000 employees achieved their Write a personal action plan to tackle NCPLH with the Company. workplace violence

We strongly believe that all levels of The course agenda includes: management within our business should Attitude & Behaviour understand fully their responsibilities as retailers of alcohol and must lead by example. All our Communication retail business managers are qualified to NCPLH Signalling Non-Aggression level and hold a personal licence. Space & Distance Mitchells & Butlers has been recognised by the Escalation BII as an outstanding provider of training and Resolving Conflict we are licensed accordingly to deliver the training in-house. Conflict management training also helps our employees to manage issues associated with drugs abuse. Where there is any evidence of such in our businesses, we move rapidly to assess the situation and take appropriate, tough measures to resolve the matter immediately. Mitchells & Butlers 07 Marketplace Corporate Social Responsibility Review 2007 (continued)

Approved door staff training Customer and employee safety Door staff play a crucial role in helping to maintain safe businesses. We have been Customer and employee safety is an working towards a complete system across the essential pre-requisite to the safe and whole country where only Company-approved responsible operation of our third party contractors are used to supply door businesses. staff to our premises; this is now established. We have developed a Company door Health and safety management manual, implementing standards nationally across our estate. The manual We strive to provide a safe environment for all In 2006/07 the audit was extensively revised by includes guidelines for door staff on logging our employees, guests and other visitors to our our Risk & Compliance team to incorporate a incidents and details of recognised and pubs and to comply with relevant health and new scoring system. This system has accepted forms of ID. We have received positive safety legislation. In addition, we: introduced a “BRAG” rating (i.e. black, red, feedback from the Security Industry Authority on amber, green) for each premises. The colour the content of the manual and continue to apply Aim to protect the health of our employees ratings provide an indication of risk at the our strict guidelines for the operation of our with suitable, specific work based strategies premises as follows: Company-approved door firms. Seek to minimise the risk of injury from Black Imminent risk, emergency action We also hold an annual door staff conference to Company activity required promote best practice and synergy across our Ensure that sufficient resources and Red Critical failure in the management of door staff suppliers. Directors from all of our information are made available and suitable safety approved door companies across the country management systems are in place to address Amber Legal non compliance attend and the objectives for the conference are health and safety matters Green Compliant or minor non compliance to discuss: with Company policy The Mitchells & Butlers' Board is responsible for Legal update ensuring that sufficient resources are available All black findings are reported to the Executive Committee, which includes the HR Director and Licensing Act to implement that Health and Safety policy. We monitor and audit compliance with Company General Counsel as well as the Chief Executive Acceptable standards policy centrally and a comprehensive annual and the Finance Director, and the Operations health and safety report is produced for the Boards each period. Our processes for review and management of Board. door companies In addition to the Company's internal safety We use a major, independent safety and experts, we also retain leading consultants in the Issues for praise and improvement assurance company to audit and report on fire, fields of food safety and fire safety. As a result Mitchells & Butlers' expectations health and food safety practices in all of the audits, the management of health and businesses. These inspections, which take safety, food safety and fire safety is constantly place at least twice a year, form an essential reviewed and improvements made where element of our due diligence and include: necessary.

Independently verified means of monitoring The average audit scores for health and safety, standards food safety and fire safety all improved in the year to September 2007. Consistent audit systems across all businesses An independent assessment of standards combined with technical support on improvement Mitchells & Butlers 08 Marketplace Corporate Social Responsibility Review 2007 (continued)

Maintenance of the estate Disabled customers Dissatisfied customers policy As licence holders we aim to ensure that our As part of our preparations for the introduction Mitchells & Butlers operates a dedicated Guest premises provide an inclusive environment for of the Disability Discrimination Act (DDA) in Care team to manage our customer feedback the sensible, controlled consumption of alcohol. 2004, we undertook a comprehensive review of and enquiries. However, if customers are not To help achieve this we offer our customers a every pub in the estate and developed a plan to happy with their experience at one of our high quality amenity in our pubs, alongside ensure compliance with our policy in relation to businesses, we do encourage them to direct attentive customer service, which in turn the Act. This resulted in minor capital works on their feedback at the time of their visit to the provides a platform to encourage responsible a large number of our properties, amounting to manager, as the manager is best placed to behaviour. some £10 million in total. In a small number of resolve the problem immediately and recover cases, often small cramped sites or perhaps customers' goodwill. We also pay attention to the design and layout of listed buildings, we have judged physical our premises. Providing our managers with a alterations to be impractical. In such cases, Our approach is to ensure that customers: clear observation point across the trading area, alternative arrangements are in place to assist Always receive a respectful, courteous and rearranging furniture during peak trading times disabled customers. For example, where we timely response to avoid creating bottle necks at the bar, were unable to install a ramp in an entryway due collecting glasses on a regular basis, installing to difficulties with planning permission, small Are given clear guidance on who is dealing CCTV, and placing handbag clips on tables all temporary ramps may be provided. with the enquiry or problem contribute to operating safer, welcoming businesses. In order to provide the best service for disabled Receive a full response to all issues raised customers, we also invested in retail team All our businesses receive some form of training in the form of a Disability Awareness Our policy is for all complaints to be resolved maintenance each year. This includes minor Week. All front of house staff and doormen within seven working days. In the unlikely event and major projects in line with brand investment received disability awareness training, including that our customer is dissatisfied with the cycles and allows us to maintain high standards interactive role-play exercises and disability due response they receive to their complaint or of amenity across our estate. diligence checks. Our employees are in a enquiry, customers can escalate their complaint position to deal with the range of varying to area management or to our Guest Care team. disability from mobility to hearing or sight All senior operations personnel receive a weekly difficulties. report of any complaints. A monthly complaints Since the legislation came into effect, there have report is submitted to the Operating Boards for been only a few genuine complaints regarding review. access by disabled people. All have been resolved without formal recourse.

Case study: Old Contemptibles, Birmingham In August 2007, Mitchells & Butlers re-opened a well known and much-loved city centre pub, The Old Contemptibles, on Edmund Street in Birmingham after a significant investment which restored the pub to its former glory. The Old Contemptibles has been carefully refurbished to restore and preserve its heritage. Local carpenters have hand-made much of the panelling and woodwork now in place, including the ornate carving featured throughout the pub. Some more light-hearted scenes from the trenches, taken from old photographs, have been painted in the alcoves behind the bar. Mitchells & Butlers 09 Marketplace Corporate Social Responsibility Review 2007 (continued)

Good food Supplier policies As a leading pub operator we pride ourselves on In addition, all of our food suppliers are required As the food supply chain becomes our network of quality commercial suppliers and to comply with the British Retail Consortium increasingly complex, Mitchells & therefore have created a number of long term technical standard which requires staff to be Butlers takes into account a number and effective business relationships. properly trained and supervised and for the supplier to meet high standards of food safety. of factors when purchasing our food, We carry out an assessment of the including the health and safety of our environmental policies and practices of our All central distribution food suppliers are guests, the quality, the provenance major food suppliers. All growers supplying the required to send us a copy of their Corporate Company are required to meet the Euro-Retailer Social Responsibility Policy and to complete a and price. With large scale national brands Produce Working Group's standard of good CSR self assessment questionnaire. The competing in different markets, we require our agricultural practice, known as the EurepGAP questionnaire covers areas such as workers suppliers to guarantee the supply of large standard which is an integrated agricultural welfare, labour and employment policies, quantities of quality ingredients for the life of a assurance standard covering food safety, diversity and equal opportunities. Suppliers are menu. Our objective is to offer competitively occupational health and safety, environmental then rated on the basis of the self assessment priced dishes of appropriate quality and protection, bio diversity and animal welfare. questionnaire and we work with them on areas provenance. In some instances this means a for improvement. regional supplier and in others worldwide suppliers. Mitchells & Butlers also abides by the Code of Ethics issued by The Chartered Institute of Purchasing & Supply. Our guiding principles on corporate procurement are to:

Enable the Company to conduct its procurement activities in a safe, ethical and professional manner Exclude suppliers that disregard health, safety and welfare Ensure all personnel conform with national and EU laws Ensure representatives are fair and reasonable with suppliers Exclude suppliers that exploit people unfairly Utilise suppliers that preferentially conserve the environment

Case study: Guy Poskitt Farmers and Growers Mitchells & Butlers has worked with M.H. Poskitt Farmers & Growers in Kellington for six years through our Toby Carvery pub restaurants. Guy Poskitt and his family have been growing carrots for over half a century and will continue as exclusive supplier of farm-fresh carrots to over 115 of our Toby Carveries across the UK. The farm provides Toby Carvery with a staggering 50 tonnes of vegetables per week and more than 2,600 tonnes a year – enough to fill 279 articulated lorries and equivalent in weight to seven Boeing 747s. Richard Cox, Director of Operations at Toby Carvery said: “Toby's focus on locally sourced vegetables means we're only interested in the freshest top quality produce and all of our growers have to adhere to very strict standards.” Guy Poskitt of M.H. Poskitt Farmers & Growers, adds: “We pride ourselves on high levels of traceability, so that each and every carrot we produce can be traced right back to the seed. We can even tell you what field it was harvested from and how much rain fell while it was growing.” Mitchells & Butlers 10 Marketplace Corporate Social Responsibility Review 2007 (continued)

Our menus We aim to offer a broad range of menu items Most recently Toby Carvery and Harvester have across our estate so guests seeking healthier become supporters of the national Year of Food options have plenty of choice. Focus on menu and Farming to help promote healthy eating to development has enabled us to offer guests children, including the story of food from farm to more variety, from sharing 'small plate' dishes in fork. The pub restaurants will exclusively offer a Ember Inns or hand-cut Maris Piper chips in our series of educational site visits and schools Metro Professionals format to the Best of British packs to a number of primary school children range in Cornerstone, our successful community across the country. pub format. We have developed fresh dishes that are healthier and tastier, with a wider taste In August this year, Harvester came top for its profile and better provenance - for example, offer of healthy dishes for children, in a national organically farmed Shetland salmon features on comparison of family restaurant chains, carried the new Vintage Inns menu. Vegetarian options out by an independent dietician. are also now available across all our pubs. Following the successful launch of nutritional We continue to develop our menus with the data on the Harvester website in 2006, Toby focus to improve nutritional content. This year Carvery will also be launching a nutritional all Mitchells & Butlers cooking processes breakdown of all menu items in late 2007. became transfat-free. In addition we are currently developing a Company nutritional policy which will focus on offering choice, healthy options and clear customer information.

Case study: Harvester Menu Award Harvester received recognition for the best children's menu in the Daily Mirror (August 2007) after a dietician independently rated seven chains on their offer of healthy dishes to kids. Up against Pizza Express, Nandos, Pizza Hut, Café Rouge, Bella Italia and Beefeater, Harvester were the clear winners scoring a maximum 10 out of 10. According to the Daily Mirror; “Harvester easily wins as best the restaurant. It has an extensive children's menu and it's easy to make meals healthier thanks to allowing so many combos. It's also refreshing to see a chain providing detailed nutritional information.” This is great news for Harvester after much hard work in making changes to its children's offer. This involved the removal of the traditional children's menu and the move to smaller portions of adult mains, as well as creating the flat price point of £3.99 and providing the biggest ever choice of dishes. The full nutritional content of all Harvester's meals is available on the Harvester website: www.harvester.co.uk Employees 11 A cornerstone of Mitchells & Butlers strategy is our ability to recruit, train and retain the very best people. Mitchells & Butlers 12 Employees Corporate Social Responsibility Review 2007

Health and safety Employee policies Diversity Employee security Mitchells & Butlers' Equal Opportunities policy is The Mitchells & Butlers' Health and that no employee should suffer discrimination in Safety policy provides a framework to We recognise our responsibility to protect our respect of age, disability, religious belief, gender, ensure that all employees are provided employees from the effects of violence. We sexual orientation, race, colour, marital status, with a healthy and safe work have a comprehensive conflict management political belief and nationality or any other training programme in place, and undertaken as category defined by law. environment. appropriate, to help reduce the risk of serious We are committed to providing equal A risk management system is in place to ensure incidents and better protect our employees and guests. opportunities and to avoid unlawful health and safety practices are upheld discrimination in respect of employees or throughout the Company, it comprises the In addition, prevention of terrorism training has customers. The policy ensures that each of our following stages: been integrated where necessary into our retail employees is treated equally and fairly and that 1. Health and safety policy management training programme. Specialist all employees are aware of their responsibilities 2. Procedures set in each pub training arising from this joint industry and to others. 3. Training and educating staff Government body will be presented to our city centre businesses across the UK. To ensure the policy is adhered to, the Company 4. Measurement has a responsibility to monitor the effectiveness 5. Review/correct Our retail employees also benefit from detailed of the Equal Opportunities policy and we Company policies on handling cash and the use therefore undertake to: of anti-hold up safes to minimise risk to staff. Communicate the policy to all employees Our security policies are reviewed on a regular basis to ensure they continue to be relevant and Regularly review existing procedures in order effective in our businesses. to maintain the effectiveness of the policy and carry out whatever modifications are judged necessary Keep records of ethnic origins and gender of new and existing employees and recruitment and promotion decisions Employment by gender is demonstrated in the table below.

Women Men Women Men Women Men 2005 2005 2006 2006 2007 2007

Retail Staff 57% 43% 57% 43% 57% 43% Retail Managers 33% 67% 37% 63% 36% 64% Corporate Staff 46% 54% 47% 53% 45% 55% Senior Managers 24% 76% 26% 74% 27% 73%

We have 18 women in senior management positions, which includes two Executive Committee members and one Non-Executive plc Board Director. Mitchells & Butlers 13 Employees Corporate Social Responsibility Review 2007 (continued)

Work life balance Training Creating a positive work life balance for our employees is a fundamental part of the A cornerstone of Mitchells & Butlers' commercial success of Mitchells & Butlers. strategy is our ability to recruit, train Part-time working continues to be a central and retain the very best people. feature of our business, indeed 73% of retail staff work part-time. Flexible Working is also a With a diverse portfolio of brands and formats, key benefit for our corporate employees. We catering for a variety of different customers, we incorporate flexible start and finish times into have created a comprehensive series of training the corporate working day and a number of our programmes to provide our employees with the corporate employees work from home on a opportunity to develop and fulfil their potential. mobile basis one or two days a week. We will Mitchells & Butlers is proud of what our seriously consider a request for flexible working employees achieve, encouraged by the for any reason and will endeavour to be flexible opportunities that we provide through employee on working patterns for all employees and not training, development and rewards. We use a just those who have a statutory right to submit a combination of assessment centres, internal request. development centres, personal development Employees can request flexible working if they workshops and specialised courses run by have parental responsibility for a child under the internal and external trainers to ensure we offer age of 6 (or 18 where the child is disabled). quality training to our 43,000 employees. This This is especially helpful to employees returning year we have invested an average of six days from maternity or paternity leave who would like training per employee, with structured training the Company to consider changing working programmes including both on and off the job hours, or may need more flexible arrangements training. when a child starts school. In addition the Company has introduced a Flexible Holiday Benefit Scheme which gives corporate employees the opportunity to increase their holiday entitlement by one week in exchange for an equivalent reduction in gross salary. The scheme allows all corporate employees to take up to six weeks annual holiday, and benefit from a corresponding reduction in income tax and national insurance contributions.

Case study: Sizzling Pub Co. praised for customer service training The Sizzling Pub Co.(SPC) pre-opening training team was highly commended in the Customer Service Training Team of the Year category in the National Customer Service Awards 2007, for its role in supporting new openings. The awards celebrate the effect and impact of excellent customer service on consumers and businesses. The SPC team's submission demonstrated its delivery of a training plan and highlighted the interactive team work and mutual support in the team as they worked to add value to each other, the customer service staff and the organisation. Sue Spedding, training team manager for Sizzling Pub Co, said: “It's great news that the pre-opening training team has been highly commended. It is a result of their hard work, commitment and enthusiasm that SPC has gone from strength to strength in customer service standards.” Mitchells & Butlers 14 Employees Corporate Social Responsibility Review 2007 (continued)

Graduate schemes Career progression and retention Mitchells & Butlers' Graduate Schemes aim to Both Schemes offer a mixture of on-the-job Retaining and developing employees is vital to recruit graduates who have the potential to help experience and formal training, and the two our continued success. The high level of retail us remain an industry-leading operator, build distinctive routes ensure that there are a range employee turnover within the industry creates a quality customer offers and develop our estate of career possibilities for graduates within the challenge; however, we focus on offering our to ensure we deliver great experiences to our Company. employees competitive pay rates, quality training customers time after time. and comprehensive benefits to help attract and retain our best employees. There are real The Company operates two comprehensive Personal Development opportunities to build a successful career within graduate training schemes. The Corporate the Company, from retail staff to Operations Graduate Scheme has been designed to provide This year the Company built upon our training Director. an additional source for our senior managers of packages by launching a series of structured the future, and provides some of the most training and development courses for corporate The internal succession rate to the post of exciting and demanding graduate training in the employees. The courses are aimed at providing assistant manager is around 70% for most of industry. We recruit up to 15 Corporate our employees with the necessary skills and our brands and formats. Our experienced Graduates each year, who choose to join one of capability to execute business strategy in assistant managers are an extremely valuable the following areas of the business: whichever part of the business they work. The support to our management infrastructure and development programme has four objectives: help us to build a pipeline of quality General Operations Management management succession across the business. Human Resources Competency training For our corporate employees we have a Finance Professional training selection of initiatives in place to provide Purchasing Induction training development opportunities. Our 'Realising your Marketing Managing personal development potential' workshop helps employees Property Management understand how they can make the most of their In addition we offer our corporate employees the Information Technology unique talents with Mitchells & Butlers. opportunity to take study leave on designated Following our employee satisfaction survey over Having joined their chosen area, our Corporate courses, as agreed with their line manager and 71% of employees believe they can for fill their Graduates then undertake a comprehensive but the HR team. Financial support for professional career ambitions within the Company. flexible programme of training lasting up two qualifications is available and the opportunity for years. To help graduates develop their skills and career development is enhanced through fulfill their potential, they receive ongoing access to project work, secondments and reviews and support from both a Line Manager mentoring. aligned to their chosen function, and a senior management mentor. Our Vocational Graduates Scheme 'Progress' is designed for entrepreneurial graduates looking to pursue a career in pub or pub restaurant management. Progress Graduates join the scheme in a management role, with a development plan in place to help them to maximise their potential.

Case Study: Noel D'Arcy, Retail Operations Following this success, Noel gained additional Noel has built a successful career, experiencing Director knowledge working within Browns restaurants a variety of roles within Mitchells & Butlers' and, in 2007, he was appointed into a senior brand portfolio, each different role moving his Noel D'arcy, Retail Operations Director, has management position - Retail Operations career forward to his present senior worked for the Company for almost 20 years Director for Browns. management position. across all areas of the business. Noel joined Mitchells & Butlers as a trainee Assistant Noel comments, “Mitchells & Butlers has always Manager in April 1986 and gained valuable given me the opportunity to develop my career operations experience through a series of throughout many different parts of the business. development roles, until he was appointed From my time as a manager, I enjoyed the General Manager, leading to opening one of the challenges of the different brands within the first Jefferson's businesses in Essex in 1995. organisation and was always encouraged to get involved in many parts of the business, from The Mitchells & Butlers' corporate framework menu development to training. Although I have gave Noel the opportunity to take on various been in a corporate role for 10 years, I have also secondment and project roles before he was changed job role six times in that period and appointed Retail Business Manager for Toby have had the opportunity of working in three of Carvery in July 1998. Noel worked within the our leading industry brands.” Toby brand for the next five years and was involved in the opening of over 60 businesses. During his time with the Company, Noel has Noel expanded his experience by moving to the taken advantage of the range of training and position of Regional Business Manager for All development courses available, including the Bar One, with specific responsibility for brand Disney Program in Hospitality Management and evolution and brand investment within All Bar the Coverdale leadership courses, as well as One. more practical courses to improve working operational knowledge such Health and Safety at Work and Employment Law. Mitchells & Butlers 15 Employees Corporate Social Responsibility Review 2007 (continued)

Employee benefits and reward Pension Healthcare and counselling We offer a comprehensive pension package to Fully funded individual private healthcare cover Mitchells & Butlers has created a eligible employees designed to help members is available to all corporate employees, retail diverse package of benefits for our save for the future in a tax-efficient way. managers, and retail assistant managers, with employees. Members do not have to work a minimum additional family cover available through number of hours or earn a minimum salary to personal contribution. We believe that our benefits are a very important be eligible. There are two plans - the Mitchells part of the total employee reward package and & Butlers' Executive Pension Plan and the In addition, Mitchells & Butlers offers all our approach is based on the following Mitchells & Butlers' Pension Plan. Both Plans corporate employees, retail managers, retail principles: have two sections – Defined Benefit (DB) and assistant managers, and their family members Defined Contribution (DC). The DB Sections of access to an independent, confidential The sum of the range of all benefits available the Plans closed to new members in 2002. counselling and advice service to help resolve within the total reward package will be difficulties which may affect our employees' competitive with leading retail companies Current policy is to offer membership of the DC health, well-being or work performance. Section to all eligible employees including new The range of core benefits available is employees. Both Plans offer enhanced benefits consistent across the Company in the event of serious ill-health. In the Benefit levels are common with a job band unfortunate event of death before age 75 but will vary according to market practice and members have life assurance cover of four times business need across the band structure pensionable pay. Members can continue to accrue benefits and contribute to their pension Employees take some personal responsibility up to age 75. for the composition of their benefit package, through flexibility which is, where possible, Members of both Plans can make Additional built into the benefit options Voluntary Contribution (AVC) payments if they choose to and there is no limit on the percentage of their salary they may pay into the AVC scheme. Share schemes In addition, the Bonus Sacrifice provides eligible We currently offer two “all employee” HM employees with the choice of sacrificing up to Revenue & Customs approved share schemes, 100% of the gross value of any bonus payable both of which enable eligible employees to during the financial year, for an equivalent value become shareholders of the Company. contribution by the Company into their Mitchells The Share Save and the Share Incentive Plan & Butlers' pension plan Additional Voluntary schemes are open to all employees after they Contribution (AVC) account. have completed a certain length of service. The Pension Trustees communicate regularly Eligible employees are automatically invited to with Plan members issuing a magazine twice a join the schemes once per year. year. There is a dedicated website which provides details about the Plans, latest news and contact details for further information. Corporate bonus scheme Workshops are also held to help members understand the benefits to which they are The corporate bonus scheme is designed to entitled. reward the skills, commitment and teamwork of corporate employees in supporting the Company Across the combined plans there is a pension in the delivery of our business strategy. membership of 29,427. Mitchells & Butlers 16 Employees Corporate Social Responsibility Review 2007 (continued)

Voluntary benefit schemes Benefits4me Our employees are able to benefit from a range Corporate employees can also take advantage of of voluntary benefit schemes which allow goods the Benefits4me scheme which offers discounts and services to be purchased at a reduced across a wide range of products through third overall cost. The following schemes are party promotions. For example, discounts are available: available on the purchase of CDs, holidays and shopping vouchers. Tax efficient childcare vouchers Bikes 4 Work Phones 4 Me Flexible Holiday for corporate employees Bonus Sacrifice to Pension scheme for corporate and retail management employees

Employee engagement Discussion groups Employee satisfaction survey As part of our Employee Communications Mitchells & Butlers conducts a yearly corporate Our Employee Communications strategy, regular discussion groups are held employee satisfaction survey, to gauge employee programme aims to improve employee comprising a member of the Executive opinion on a wide variety of Company issues motivation and commitment to the Committee and a randomly selected group of and working practices in a confidential manner. Company through greater corporate employees. The aim of the sessions is The survey provides a continuous objective to stimulate a two-way discussion between measure for employee satisfaction and understanding of our business employees and Executive Committee members engagement. strategy, goals and values and in an informal relaxed environment. Employees recognising success. state that they find these groups very beneficial Once again, we have out-performed the survey as they are able to ask questions, offer their benchmark, both in terms of job satisfaction and Communication channels include regular team opinions and make suggestions about Company commitment. The 2007 survey achieved the meetings, communication forums, informal policies and procedures. highest response rate to date of 86.6%, briefings, electronic newsletters, in-house compared with 84% in 2006. Job satisfaction publications and the Company Intranet. Regular For the third year, a dedicated 'Industry Issues' and employee motivation feedback scored over feedback is obtained through employee focus discussion group took place, chaired by the 90% and more than 94% of our employees groups and employee opinion surveys, the Director of Public Affairs and Director of would recommend Mitchells & Butlers as a good results of which are used in developing Corporate Communications. Employees were place to work. management policies and practice. The invited to discuss topics which include the smoking bans, responsible retailing of alcohol, The results of the survey are collated and Company conducts an annual Business Forum presented to the Executive Committee, followed at which Executive Directors and representatives the environment and other topical social responsibility issues. by further in depth reviews within individual of the senior management team meet with departments. Employees are then informed of employee representatives at all levels, and from The Company chairman hosts a series of lunch the year's feedback and the actions planned in all parts of the Company, to discuss business meetings throughout the year for employees. response to the survey. issues. Employees are selected to attend the lunches as recognition, as a profile building exercise and as an invaluable networking opportunity.

Case study: CIMA Continuous Professional Development Accreditation In 2007 Mitchells & Butlers was awarded Development Partner status for its members belonging to the Chartered Institute of Management Accountants. To gain the accreditation as Development Partner, the Company has demonstrated to both internal and external stakeholders that we are highly committed to ethical and professional standards by supporting the ongoing professional development and career management of our CIMA qualified employees. This has been achieved through confirmation of the exceptional standard of HR documentation and processes such as the Manpower Planning process, half year and year end review documentation and policies around training and development. This is an excellent asset for both the CIMA members working in Mitchells & Butlers and also for the wider finance team in terms of the recruitment and retention of the highest calibre of employees. Community 17 Mitchells & Butlers understands that each and every one of our businesses has an impact on its local community. We aim to ensure that this impact is always positive and we pursue this through a carefully planned blend of local and national initiatives. Mitchells & Butlers 18 Community Corporate Social Responsibility Review 2007

Mitchells & Butlers understands that each and every one of our businesses has an impact on its local community. We aim to ensure that this impact is always positive and we pursue this through a carefully planned blend of local and national initiatives. National initiatives are supported at a corporate level through a budget managed and co-ordinated by the Communications department. It is our policy that our retail managers are able to support causes which are relevant to their local community and we recognise these activities through our Heart of the Community Awards scheme.

Our role as good neighbours Corporate charity partnership Dr B's Restaurant and Coffee Shop has not only benefited from pure financial support but Our pubs and pub restaurants play an important Mitchells & Butlers also provided business role in the heart of thousands of communities Mitchells & Butlers selected Barnardo's as our corporate charity support for potential new catering ventures for across the UK. As a Company we are the charity. In addition, we organised, via our committed to encouraging and supporting our partner in April 2005, by launching supplier contacts, the donation of catering businesses in this important community role. the 'Routes to a Brighter Future' equipment including plates, cleaning products Through schemes such as Pubwatch and via fundraising campaign. and glassware for use in Dr B's and across the our managers taking part in Resident network of Barnardo's projects, as well as Association meetings, we are able to establish Over three years, a total of £150,000 in donating unused external play equipment for better communication channels and develop a corporate donations has been used to support the Harrogate restaurant. valuable discussion forum for handling and two Barnardo's projects in the Midlands – the resolving local issues. Dudley Community Routes in the West Midlands Chris Bean, Dr B's Restaurant in Harrogate, and the South West Birmingham Family Project, comments: “Right from the start, the support Bartley Green - and a further project in provided by Mitchells & Butlers has benefited Community Award scheme Harrogate, Dr B's Restaurant and Coffee Shop. and enhanced every aspects of learning for all young people at Dr B's. Mitchells & Butlers is Our pubs, employees and customers raise Throughout the year, our employees have also not just an organisation making noise about thousands of pounds for charity. They are supported the partnership through fundraising partnerships, it's doing the business.” supported via our Company Community Award activities and raised an additional £12,600. In schemes which encourage and motivate total over the three year partnership Mitchells & fundraising across our business. Butlers' corporate employees have raised over £30,000 for the charity. The Employee Community Award scheme encourages our employees to support a charity Stephen O'Connor, Director of Fundraising for through their own fundraising activity or Barnardo's, comments on the partnership: “The voluntary work. Over 40 employees have Barnardo's partnership with Mitchells & Butlers benefited from the scheme this year and taken has indisputably helped vulnerable children and part in a variety of events such as the Great young people locally when they needed it most Gifts in kind/additional corporate support North Run, sponsored bike rides, supporting and when they would otherwise have been Throughout the year we have also made a youth sports teams and local volunteering destined to a bleak future. We enjoy working number of in-kind donations such as offering initiatives. with a successful business, a caring staff team the use of Company facilities free of charge and and an exciting mix of retail and consumer donating complimentary meals in our The Pub and Restaurant Community Award brands. Scheme encourages retail managers and businesses to local community groups, charities employees to raise money for local causes and “Mitchells & Butlers truly 'Believe in Children' and schools. bring communities together. Again this has and they have been really supportive and open Mitchells & Butlers also administers three helped boost various fundraising events and to developing new fundraising ideas. Barnardo's charitable trusts which were set up by the supported a number of worthy charities have also benefited from Mitchells & Butlers' founders of the Company, Henry Mitchell and including the Anthony Nolan Trust, RNLI, valuable business expertise in our shared areas William Butler, and their family members for the Cancer Research UK and NSPCC. of working such as hospitality and catering. In benefit of employees and local communities. more ways than one, this is a true working They are: The Mitchell Fund; The Henry During the last year £40,000 has been donated partnership.” to variety of charities as part of the scheme. Mitchell Memorial Scholarship Fund; and the William Waters Butler Welfare Fund. Their principal objectives are to provide financial assistance to those in need and support the provision of education. Mitchells & Butlers 19 Community Corporate Social Responsibility Review 2007 (continued)

Heart of the Community Awards The awards acknowledge the dedication and The awards will run again in 2007/08 and we enthusiasm of our employees and customers, as have already received an excellent response The annual Heart of the Community Awards well as the level of fundraising which they have from across our estate as our retail managers celebrate and recognise the efforts of our achieved. Over the last twelve months the continue to be committed to their community employees in forging good relations with their excellent fundraising activity organised by our activity. local communities. A prize fund of £25,000 is Heart of the Community winners has raised over collectively received by the award winners for £85,000 for local charities and causes across donation to their individually chosen good the UK. cause.

Case study: Anderton Arms, Fulwood Case study: The Bryncoch Inn, Neath The Bryncoch Inn is keen to keep its fundraising (Ember Inn) (Sizzling Pub Co.) fresh and champion new causes. A new children's charity, Ice Kool Kids, was founded in Heart of the Community joint National Winner Heart of the Community joint National Winner 2006 with the aim of taking groups of local and Regional Winner North West and Regional Winner Wales special needs children skiing. The Bryncoch Inn The pub team at the Anderton Arms, Fulwood During the year, managers Jan and Craig Wigley pledged its support to the new charity and are active, supportive and hard working have maintained the scope and success of the hosted a parents meeting to discuss fundraising members of the local community. community activity for which the Bryncoch Inn ideas. In May, the pub helped to organise a has become renowned. Tractor Road Run, starting from the Bryncoch Over the last 12 months, manager Jenni Inn, which raised nearly £500 for Ice Kool Kids. Muirhead and her team have organised a host Community projects are an integral part of the of fundraising events for a variety of different Bryncoch Inn's calendar of activity. The Imaginative fundraising ideas help the Bryncoch causes. Charities which have benefited from the development of the Bryncoch Environmental Inn to continue sparking local interest in their pub's generosity include Children In Need North Group in 2005 has proved very successful and activities. The Bryncoch Rugby team were West, Kidney Research, Heartbeat Premature the group now has over 20 members of all ages sponsored to become convicts for a day and Baby Unit, the Helen Rollason Foundation, who regularly give up their time to make take part in a Jail Break. The team escaped Royal British Legion and Megan Baker House. Bryncoch greener and more nature-friendly. throughout the village while customers and villagers tracked them down. It didn't take the Employees at the Anderton Arms are involved in Jan and Craig are both active members of convicts long to work out that the best hiding all sorts of local activities. Jenni and three charity groups and spend an enormous amount place was the pub and they helped raise £175 members of her team took part in Race for Life, of time and energy helping the Neath area. For for a number of local causes. raising over £500 for Cancer Research UK and example, Craig is the Chair of the Bryncoch plans are in place to take part again this year. Scouts Be Prepared Committee. The Scouts are The ongoing commitment and generosity of Jan, raising money to rebuild the local Scouts Hall Craig, the team and the customers of the The Anderton Arms is a meeting point for the and so far over £10,000 has been donated by Bryncoch Inn have helped the pub gain the title local area and it regularly holds events which the Bryncoch Inn alone. of Heart of the Community Pub of the Year three build a real feeling of community spirit. In April, times. the pub hosted a successful Charity Garden Party following an investment in the garden area. The Anderton Arms also celebrated the festive season in style by holding both Christmas Eve and New Year's Eve parties; customers were entertained by the Corpus Christi Roman Catholic Secondary School, invited by the pub to sing Christmas carols. The Anderton Arms has been a long standing supporter of The Rosemere Cancer Foundation which has been the adopted charity for the last five years. During 2006, regular quiz nights, the Moor Park Fun Run, a Virgin Vie party, a trip to Chester Races, a Golf Challenge and much more have helped the pub's donations for the charity reach over £10,000. The enthusiasm and dedication of Jenni and her team has helped position the Anderton Arms at the hub of the local community. Mitchells & Butlers 20 Community Corporate Social Responsibility Review 2007 (continued)

National brand activity Our brands are also key supporters of national and local charities. The year has seen a wealth of activity and funds raised for a number of good causes. Hollywood Bowl businesses have been supporting Barnardo's through a series of local charity events, Vintage Inns are working alongside the National Trust and many of our unbranded pubs have adopted local charities relevant to their community and customer base.

Case study: Ember Inns Drink Pink Case study: Harvester and Make A Wish Foundation Ember Inns' customers were encouraged to raise a glass of rosé wine for charity this March Harvester restaurants have raised £33,500 over as the pub chain and leading charity Against the last 12 months for the children's charity Breast Cancer launched the second annual Make-A-Wish Foundation UK. The aim of Make 'Drink Pink' fundraising campaign. a Wish is to grant the wishes of children aged 3 to 18 living with life-threatening illnesses. This is All our Ember Inns pubs across the country the fourth consecutive year that Harvester has invited guests to swap their usual tipple for a supported the Make A Wish Foundation charity glass of rosé wine, with 5p per glass (20p per and it's a cause that Harvester managers and bottle) being donated to Against Breast Cancer. team members hold with great affection. An excellent £17,000 was raised which has contributed to vital research work into diet and lifestyle that Against Breast Cancer carries out £33,500 means Harvester have raised enough on behalf of those living with the disease. to grant 11 wishes – one for each of the regions In addition Ember Inn pub team members the restaurants trade in across the UK. The backed the campaign by organising local money has been raised following the Make-A- fundraising events such as quiz nights, pamper Wish month in May with team members raising evenings and flower arranging sessions to raise money through a variety of activities from charity additional funds for the charity. On Mother's cycle rides, teddy bears picnics and running in Day, Ember Inns' doubled the donation from 5p the Great North Run. The Harvester team are to 10p for every glass of rosé wine sold. already planning to raise even more money for Make a Wish next year! Matthew Deane, Senior Marketing Manager at Ember Inns, commented: “We strive to be at the heart of every community in which we operate and fundraising initiatives such as this really help to unite our teams and guests.”

Ross Burden launched the 'Drink Pink' campaign. Mitchells & Butlers 21 Community Corporate Social Responsibility Review 2007 (continued)

Case Study: Macmillan Coffee Morning More than 600 Mitchells & Butlers pubs joined the World's Biggest Coffee Morning in September to help raise vital funds for the leading cancer care charity Macmillan Cancer Support. The pubs – including our O'Neill's, Nicholson's, Hollywood Bowl and Ember Inns brands, as well as many of our unbranded businesses - raised money by offering customers a free hot drink in return for a voluntary donation. In total, our pubs raised over £15,000 with special recognition going to top fundraising pub, the Hardwick Arms, Streetly who raised over £1,200. As recognition, the Hardwick Arms donation will be match funded by the Mitchells & Butlers pub award scheme. Jason Suckley from Macmillan Cancer Support added: “Having the support of Mitchells & Butlers was great, helping us to boost this year's campaign and reach out to more communities and fundraisers.”

Support in Birmingham CBSO As a leading Company, with our headquarters in Mitchells & Butlers has been a supporter of the Birmingham, we also sponsor a number of City of Birmingham Symphony Orchestra for 27 successful arts organisations in the city. years, having given over £390,000 through our Partnerships include the City of Birmingham sponsorship, our annual concert, and chair Symphony Orchestra (CBSO), Birmingham endowment. Royal Ballet (BRB), The Birmingham REP and We are especially proud to have won two Arts & ExCathedra. Through this regional involvement Business West Midlands Awards in recognition we are able to continue to play an active of this enduring partnership. community role within Birmingham and help support the culture of the city.

Case study: Champion of Champions Arts Therefore we expanded our support by & Business Award sponsoring a series of community concerts, 'On the Road', taking CBSO musicians to different The Arts & Business Awards honour the broad venues around the Midlands - from village halls, range of extraordinary partnerships forged churches and libraries to historical settings and between business and the arts in the West pubs. Midlands. The Arts & Business judges wanted to CITY OF BIRMINGHAM SYMPHONY ORCHESTRA Mitchells & Butlers and the City of Birmingham recognise, celebrate and applaud the fantastic Symphony Orchestra (CBSO) have won two 27 year partnership. The award judges awards - the Champion of Champions Award for commented: our outstanding partnership and the Sustainability Award in recognition of the long “The enormous difference a sustainable source term business and arts relationship. of funding can make to an arts organisation can never be understated and Mitchells & Butlers Our involvement with the CBSO began 27 years thoroughly deserves this award. ago when the Company sponsored a concert at Birmingham Town Hall and we have continued “The City of Birmingham Symphony Orchestra our support ever since by sponsoring one has made imaginative use of the money and concert per season. In 1996, Mitchells & Butlers made it work really hard for them.” became one of the first companies to support Jorj Jarvie, Director External Relations the CBSO Centre capital appeal by endowing commented, “Mitchells & Butlers' sponsorship the Principal Double Bass's chair, an of the community concert programme has given arrangement that continues to the present day. the CBSO the opportunity to reach a wider Following the relocation of our Head Office to audience across the Midlands and introduce central Birmingham in 2003 we wished to mark classical and contemporary music on a less our continued support of the City and region. formal stage.” Mitchells & Butlers 22 Community Corporate Social Responsibility Review 2007 (continued)

The Birmingham Repertory Theatre and ExCathedra Mitchells & Butlers has been a major corporate patron of the Birmingham Repertory Theatre since 2001. This has developed our association with arts organisations in Birmingham and also enables us to offer our employees special benefits, such as complimentary tickets to performances. We continue our support of ExCathedra, one of the UK's finest choirs, through a sponsorship of their annual Christmas Candlelight series. Again our employees are able to take advantage of complimentary ticket offers. Over the last year, including the additional funds from Arts & Business, the Company's total corporate donations were over £215,000 (2006, £200,000).

Birmingham Royal Ballet Mitchells & Butlers began a new sponsorship with Birmingham Royal Ballet (BRB) in 2006. We sponsored the world premiere production of 'Cyrano' performed at the Birmingham Hippodrome in February 2007 and have continued our support by sponsoring the Ballet's production of the Nutcracker in December.

This year our sponsorship of the Birmingham Royal Ballet secured additional funds from Arts & Business enabling the BRB to host a series of educational dance workshops in primary schools across the West Midlands. Arts & Business is an organisation which helps to build and develop creative partnerships between business and the arts, to benefit the wider community. Case study: Birmingham Royal Ballet dance workshops Birmingham Royal Ballet conducted ten Nutcracker workshops, working with seven Birmingham schools throughout November and December. Two of the workshops provided Continued Professional Development opportunities for two Birmingham Royal Ballet dancers (Samara Downs and Nathaniel Skelton) as the funding provided the dancers with opportunities to work with a mentor, helping to develop further their teaching skills.

The Nutcracker workshops are designed to introduce the famous ballet to a younger audience who may not be familiar with the work of a classical ballet company. The workshops use dance and drama to examine the story of Nutcracker and take themes from the ballet and work on their own creative dance pieces. All the children taking part in the workshops also had the opportunity see the production. The West Midlands schools involved included Billesley Primary School, Marlborough Infant School, Conway Primary School, Perry Beeches Infant School, Bournville Infant School, St Benedict Infant School and Walmley Infant School. Environment 23 We are aware of our environmental responsibilities and take them seriously. We have a policy of seeking continuous improvement, with particular focus on recycling and energy usage. Mitchells & Butlers 24 Environment Corporate Social Responsibility Review 2007

Minimising environmental impact. Carbon emissions and energy Recycling efficiency We are aware of our environmental We have an established recycling programme Where possible, we want to incorporate energy for both glass and cardboard in our businesses. responsibilities and take them In the last 12 months we recycled over 14,000 seriously. We have a policy of seeking efficient practices across all our businesses and we are currently working on a number of tonnes of waste, compared to on 3,200 tonnes continuous improvement, with projects and systems which, if successful, will in 2006. particular focus on recycling and help to reduce carbon emissions. We initially trialled a recycling initiative across energy usage. We continue to make excellent progress in the estate and following its success began to roll energy saving and monitor the levels of carbon this out as a permanent programme in emissions related to gas and electricity we use September 2006. Currently around 50% of the across our estate. Over the last two years we retail estate takes part in the Company's have installed half hourly metering which has recycling programme for glass and cardboard – helped to reduce electricity and gas wastage 1,095 pubs recycle card and 941 pubs recycle significantly by analysing real-time usage against glass, a significant improvement on last year. We trade patterns. We are currently piloting a similar plan to incorporate the remainder of estate over system for water, which will help to identify and the coming months and our target is to achieve reduce water wastage. 100% glass and cardboard recycling coverage across our pubs by March 2008. A Company energy awareness team has been established to co-ordinate and manage the Our head office in Birmingham is also consumption of energy and utilities throughout committed to recycling waste. We currently Mitchells & Butlers. The team ensures that we recycle paper, aluminium cans and light fitting continue to drive energy efficiency and develop tubes; used toner cartridges are also recycled, technological solutions to minimise energy with all proceeds being donated to Cancer wastage, as well as pilot and evaluate effective Research UK. We have installed 'save a cup' schemes. For example, we are currently looking bins on all floors at coffee machine points in the to trial low energy lighting and low wattage bulbs building to encourage employees to recycle the to understand best practice and to drive cost cups. A total of 96,000kgs of waste for and energy savings. recycling has been collected from our head office during the past year. In September 2007, we opened our first 'green' business, designed to trial a number of energy Over the next year, we will be working with a saving measures, at the Toby Carvery, Banbury. specialist recycling management company to advise us on how to improve and expand our corporate recycling initiatives.

Case study: Toby Carvery, Banbury The Toby Carvery, Banbury is part of a A newly designed and fully insulated cellar Other energy saving initiatives being trialled at Company-wide project to improve energy houses a specialist glycol cooling conversion the new Toby Carvery include a kitchen 'intelli- efficiency in our buildings. We have specifically system. This system maintains the temperature hood' to monitor cooking activity and minimise integrated a series of energy saving measures of wine, beer, back bar refrigerators and the energy wastage, and a thermostat-controlled into the construction and design of the new cellar to deliver a more efficient cooling and carving deck. A rainwater harvest system has build Toby Carvery. dispense process, as well as lowering energy also been installed to recycle rainwater for use costs. in the garden area. The business will operate as a trial site, to help the Company understand how energy saving Low energy and low wattage bulbs have been The performance of the various new equipment can work most effectively in a busy installed throughout the pub restaurant as well technologies on trial will be carefully monitored and practical business environment. as light sensors being fitted to light intermittent to help the Company determine how best these rooms and placing sensors on external lighting could be applied across our estate. A Wireless Control System centrally manages fittings. the temperature and timings of energy circuits throughout the building in line with the operational functionality of the business. Corporate Governance 25 Our businesses and employees are part of a wider community and are expected to act in a way that respects the social, economic and environmental well-being of the wider world. Mitchells & Butlers 26 Corporate Governance Corporate Social Responsibility Review 2007

The Board is responsible for the Our Business Conduct guidelines describe the A Mitchells & Butlers' Risk Management and Company's internal control and risk standards of behaviour expected from those Disclosure Forum exists to monitor the working for the Company. Our corporate Company's activities and to ensure that a management system and our reputation depends on all employees acting in consistent and proactive approach to managing Executive Committee, includes the HR good faith and behaving with integrity in our risk occurs throughout the Company, including Director and General Counsel as well dealings with each other, shareholders, those of a social, ethical or environmental as the Chief Executive and the customers, suppliers and all other stakeholders. nature. The Forum aims to meet on a quarterly basis. Finance Director, has adopted a Code Mitchells & Butlers offers an independently of Ethics to promote honest and administered confidential hotline, also known as The Board also receives regular updates on a whistle-blowing hotline, for any of our significant legislative change or development in ethical conduct throughout our employees wishing to report any concern that corporate governance best practice. The business. they may have, that they feel unable to raise Company's social, environmental and ethical with their line manager. All whistle-blowing disclosures are reviewed for accuracy through a The code requires: allegations are reported to and considered by combination of detailed verification by members the Audit Committee. of management responsible for the individual The ethical handling of actual or apparent areas of corporate social responsibility and high conflicts of interest between personal and Identification and assessment of risks to the level review by the members of the Board and professional relationships Company's short and long-term value arising Executive Committee. from social, ethical and environmental matters Any hospitality from suppliers to be approved, are achieved through the Company's Major Risk with a presumption against its acceptance and Assurance Review, regularly updated and presented to the Board annually. The Board The full, fair, accurate, timely and considers as an intrinsic part of this review understandable disclosure in periodic reports whether the steps taken to address these risks required to be filed by Mitchells & Butlers plc are appropriate. These are detailed further Compliance with all applicable rules and below. Opportunities to enhance the Company's regulations that apply to the Company and its value are considered as part of that review and officers at strategy discussions. Contacts and Feedback

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If you have comments regarding this review, please email us at: [email protected] or write to us at: Corporate Social Responsibility Communications Mitchells & Butlers plc 27 Fleet Street Birmingham B3 1JP

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