Chairman's Statement.

The last year has seen something of a changing of the guard among the executive directors of the company with the retirement from the board in July 2009 of David Morgan and Dr Pelham Hawker and the appointment of Bill Sandford as an executive director of the company. I marked these changes in my statement to you last year. As I also announced in my statement last year, John Sheldrick retired in September 2009 having served 19 years as Group Finance Director of Johnson Matthey. For the last few years John had the distinction of being the longest serving finance director of a FTSE 100 company. John had a long and distinguished career with Johnson Matthey since joining the company in 1990. He had a deep knowledge of all of the group’s businesses and for several years had board level responsibility for our then Pharmaceutical Materials Division in addition to his role as Group Finance Director.

John Sheldrick played a key role in the evolution of the group into a world leading speciality chemicals company and in focusing it on its important opportunities for growth, especially those in its Environmental Technologies Division. On behalf of the board and indeed all of us at Johnson Matthey, I would like to thank John for the major contribution that he made to the development and success of the group and wish him all the very best for a well deserved, long and happy retirement. I am very pleased to welcome Robert MacLeod, who joined the board with effect from 22nd June 2009, as John Sheldrick’s successor as Group Finance Director.

The most important investment that your company makes will always be the one that it makes in its people. This is very much brought home at times of difficult economic circumstances. We invest a great deal in the training and development of our staff and the last thing that we want to do is lose them. Unfortunately, as I mentioned earlier, this year saw us having to take action to reduce costs which inevitably led to a number of job losses. Even in these challenging times however, I never fail to be impressed by the enthusiasm, professionalism and dedication of our employees at all levels of the organisation. On your behalf, I would like to thank all of them around the world for their contribution to the success of the company in this difficult year. I would also like to take this opportunity to thank the senior management team for the excellent way that they responded to the challenges of the last year’s difficult economic conditions.

Our investment in building our presence in the important Chinese market, which was the focus of our very successful investor presentation in January this year, has paid dividends during the recession and we are well positioned to continue to benefit from growth in China, India and other emerging economic powerhouses.

Johnson Matthey is in good shape and, despite the impact of the recession, continues to make progress towards delivering superior shareholder value. Whilst uncertainty remains about how quickly the world’s economies will emerge from recession, all of the legislative, environmental and energy security drivers of our businesses remain very much in place. We are emerging from the recession stronger and more efficient than before it hit, when we were running flat out to keep pace with rapidly growing demand. I believe that your company has a terrific future ahead of it and I look forward to reporting on our progress in 2010/11.

Sir John Banham

Chairman