Report of the Directors
Governance

Corporate Governance Report

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Remuneration

The board has established a remuneration committee, the Management Development and Remuneration Committee (MDRC).

The membership of the MDRC is set out in The ‘Board Committee Terms of Reference’ section.

The terms of reference of the MDRC are summarised in the ‘Board Committee Terms of Reference’ section. The terms of reference can be found in the Investor Relations / Corporate Governance section of the company’s website or may be obtained from the Company Secretary.

The Remuneration Report describes the work of the MDRC.

Relations with Shareholders

Dialogue with Shareholders

The board welcomes the opportunity to openly engage with shareholders as it recognises the importance of a continuing effective dialogue (whether with major institutional investors, private or employee shareholders) based on the mutual understanding of respective objectives. The board as a whole takes responsibility for ensuring that such dialogue takes place.

Reporting of Results, Interim Management Statements and the Investor Day

The company reports formally to shareholders when its full year results are published in June and its half year results are published in November. The company’s results are posted on the Investor Relations / Results Centre section of the company’s website. The full year results are included in the company’s annual report.

At the same time as publication of the results, executive directors give presentations on the half year and full year results in face to face meetings with institutional investors, analysts and the media in London. Live webcasts of these results presentations are available on the company’s website.

The company’s first quarter and third quarter Interim Management Statements (issued respectively on the day of the annual general meeting in July and in early February each year) are also made available on the Investor Relations / Results Centre section of the company’s website.

The company also holds an annual ‘Investor Day’ for its institutional investors and analysts. At the 2012 Investor Day held in London on 1st February, the company gave a presentation in respect of its Precious Metal Products Division. This was designed to provide a deeper understanding of the division, its strategy and drivers and to highlight why the division is such an intrinsic part of the group. The presentation also outlined the group’s role in the global platinum group metals market and the dynamics of the division’s businesses. It also explained the role of R&D in adding value and providing future growth opportunities. A live webcast of the Investor Day presentations is made available on the company’s website. A copy of the Investor Day presentation is posted on the Investor Relations / Presentations section of the company’s website.

Shareholder Contact

While the Chairman takes overall responsibility for ensuring that the views of shareholders are communicated to the board as a whole and that all directors are made aware of major shareholders’ issues and concerns, contact with major shareholders is principally maintained by the Chief Executive and the Group Finance Director. They maintain a continual dialogue with institutional shareholders throughout the year on performance, plans and objectives through a programme of regular one to one and group meetings and they ensure that shareholder views are communicated to the board. The group’s Investor Relations Department acts as a focal point for contact with investors throughout the year.

The Chairman is available to meet with institutional investors to hear their views and discuss any issues or concerns, including on governance and strategy. The Senior Independent Director and the other non-executive directors are also available to meet with major shareholders if requested. Other than meetings held with shareholders by Tim Stevenson as part of his induction programme, no such meetings were held or requested during the year ended 31st March 2012 or from that date to the date of publication of this annual report.

The board believes that appropriate steps have been taken during the year to ensure that the members of the board, and in particular the non-executive directors, develop an understanding of the views of major shareholders about the company. Such steps have included, for example, analysts’ and brokers’ briefings, consideration by the board of monthly brokers’ reports and of feedback from shareholder meetings on a six-monthly basis. The canvassing of major shareholders’ views for the board in a detailed investor survey is usually conducted every two years by external consultants. At its meeting in November 2011, the board considered a perception analysis report prepared for the company by Smith’s Corporate Advisory dated October 2011. The purpose of this was to ascertain the views and opinions of a broad range of both shareholders and non-shareholders.

Also, as reported in the Remuneration Report in the 2011 annual report, a selection of major institutional shareholders and institutional investor bodies were consulted in detail by the MDRC during 2010/11 in a collective consultation exercise as part of its comprehensive review of executive director and senior management remuneration arrangements within the group.

The board takes the view that these methods, taken together, are a practical and efficient way for the board, including the Senior Independent Director, to keep in touch with shareholder opinion and views and to reach a balanced understanding of major shareholders’ objectives, issues and concerns.

Annual General Meetings

An important part of effective communication with shareholders is the Annual General Meeting.

The company’s annual general meeting takes place in London. Notice of the meeting and any related papers are sent to shareholders at least 20 working days before the meeting and are also published on the Investor Relations / Shareholder Centre / Annual General Meeting section of the company’s website. The circular sent to shareholders with the notice of meeting aims to set out a balanced and clear explanation of each resolution to be proposed.

All directors, including the chairmen of the Nomination Committee, the Audit Committee and the MDRC, who are able to attend the annual general meetings do so. The entire board was in attendance at the company’s 2011 Annual General Meeting, except for Michael Roney who was unable to attend the meeting because of coinciding commitments at Bunzl plc, where he is Chief Executive.

In order to better communicate with shareholders a business presentation is made by the Chief Executive at the annual general meeting. Shareholder participation at the meeting is encouraged. All directors in attendance are available to answer questions in their capacity as directors or as committee chairmen, formally through the Chairman during the meeting and informally afterwards.

At the meetings, the company proposes separate resolutions on each substantially separate issue, including on the Annual Report and Accounts. For each resolution, shareholders have the option through the proxy appointment forms provided to direct their proxy to vote either for or against the resolution or to withhold their vote. The proxy form itself and the announcement of the results of a vote make it clear that a ‘vote withheld’ is not legally a vote and is not counted in the calculation of the proportion of the votes cast for and against the resolution. All valid proxy appointments received are properly recorded and counted.

All resolutions at the annual general meeting are decided on a poll as required by the company’s Articles of Association (rather than on a show of hands) and poll voting is carried out by electronic means.

The results of the poll are announced to the market as soon as possible and posted on the Investor Relations / Shareholder Centre / Annual General Meeting section of the company’s website. The announcement shows votes for and against as well as votes withheld.

Details of the annual general meeting to be held on 25th July 2012 are set out in the circular to shareholders accompanying this annual report and the resolutions to be proposed are summarised under ‘2012 Annual General Meeting’.

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