Johnson Matthey Annual Report & Accounts Cautionary Statement Contents The Business Review and certain other sections of this 2008 Annual Report contain forward looking statements that are The Group at a Glance (inner flap) subject to risk factors associated with, amongst other things, the economic and business circumstances occurring from 1 Financial Highlights – 2008 time to time in the countries and sectors in which the group operates. It is believed that the expectations reflected in 2 Chairman’s Statement these statements are reasonable but they may be affected by a wide range of variables which could cause actual results to 4 Chief Executive’s Statement differ materially from those currently anticipated. 6 Business Review 7 Group Activities 7 Strategy and Objectives 8 Key Performance Indicators 10 Financial Review 15 Operations 15 – Environmental Technologies Division 18 – Precious Metal Products Division 20 – Fine Chemicals & Catalysts Division 23 Research & Development 24 Risks and Uncertainties 27 Treasury Policies 29 Sustainability 36 Board of Directors 37 Other Senior Management 38 Directors’ Report 40 Corporate Governance 43 Nomination Committee Report 44 Audit Committee Report 45 Remuneration Report 52 Responsibility of Directors 53 Independent Auditors’ Report 54 Consolidated Income Statement 55 Consolidated and Parent Company Balance Sheets 56 Consolidated and Parent Company Cash Flow Annual Report & Acc Statements 57 Consolidated and Parent Company Statements of Recognised Income and Expense 40-42 Hatton Garden 58 Accounting Policies London EC1N 8EE United Kingdom 62 Notes on the Accounts Tel: +44 (0)20 7269 8400 103 Principal Subsidiaries and Associates Fax: +44 (0)20 7269 8433 ounts 2008 104 Five Year Record www.matthey.com 105 Shareholder Information 107 Glossary of Terms 108 Index 109 Company Details Johnson Matthey Annual Report & Accounts Cautionary Statement Contents The Business Review and certain other sections of this 2008 Annual Report contain forward looking statements that are The Group at a Glance (inner flap) subject to risk factors associated with, amongst other things, the economic and business circumstances occurring from 1 Financial Highlights – 2008 time to time in the countries and sectors in which the group operates. It is believed that the expectations reflected in 2 Chairman’s Statement these statements are reasonable but they may be affected by a wide range of variables which could cause actual results to 4 Chief Executive’s Statement differ materially from those currently anticipated. 6 Business Review 7 Group Activities 7 Strategy and Objectives 8 Key Performance Indicators 10 Financial Review 15 Operations 15 – Environmental Technologies Division 18 – Precious Metal Products Division 20 – Fine Chemicals & Catalysts Division 23 Research & Development 24 Risks and Uncertainties 27 Treasury Policies 29 Sustainability 36 Board of Directors 37 Other Senior Management 38 Directors’ Report 40 Corporate Governance 43 Nomination Committee Report 44 Audit Committee Report 45 Remuneration Report 52 Responsibility of Directors 53 Independent Auditors’ Report 54 Consolidated Income Statement 55 Consolidated and Parent Company Balance Sheets 56 Consolidated and Parent Company Cash Flow Annual Report & Acc Statements 57 Consolidated and Parent Company Statements of Recognised Income and Expense 40-42 Hatton Garden 58 Accounting Policies London EC1N 8EE United Kingdom 62 Notes on the Accounts Tel: +44 (0)20 7269 8400 103 Principal Subsidiaries and Associates Fax: +44 (0)20 7269 8433 ounts 2008 104 Five Year Record www.matthey.com 105 Shareholder Information 107 Glossary of Terms 108 Index 109 Company Details THE GROUP AT A GLANCE COMPANY DETAILS Johnson Matthey is a speciality chemicals company and a world leader Registered Office Johnson Matthey 40-42 Hatton Garden London EC1N 8EE in advanced materials technology. The group focuses on its core skills Telephone: 020 7269 8400 Fax: 020 7269 8433 in catalysis, precious metals, fine chemicals and process technology, Internet address: www.matthey.com Environmental Technologies Precious Metal Products Fine Chemicals & Catalysts E-mail: [email protected] developing products that enhance the quality of life for millions of Registered in England – Number 33774 people around the world. The group has operations in over 30 countries Emission Control Platinum Marketing and Distribution Catalysts and Chemicals Technologies Noble Metals Macfarlan Smith and employs around 8,700 people. Johnson Matthey’s operations are Process Technologies Professional Advisers Pgm Refining and Recycling Pharmaceutical Materials Auditors Fuel Cells and Services organised into three global divisions: Environmental Technologies; Colour Technologies KPMG Audit Plc Research Chemicals 8 Salisbury Square Gold and Silver Precious Metal Products and Fine Chemicals & Catalysts. London EC4Y 8BB Brokers Credit Suisse Securities (Europe) Limited Merrill Lynch International One Cabot Square Merrill Lynch Financial Centre London E14 4QJ 2 King Edward Street London EC1A 1HQ Lawyers Herbert Smith LLP Taylor Wessing LLP Exchange House Carmelite Primrose Street 50 Victoria Embankment London EC2A 2HS Blackfriars London EC4Y 0DX Registrars Equiniti Aspect House Spencer Road Scandanavia Lancing West Sussex BN99 6DA Environmental Technologies Division is a Johnson Matthey has a longstanding Fine Chemicals & Catalysts Division is a Telephone: 0871 384 2344* UK Internet address: www.shareview.co.uk Europe global supplier of catalysts and related international reputation as a leader in the global supplier of fine chemicals, catalysts USA/Canada Asia technologies for applications which application of precious metals. Precious and other speciality chemical products * Calls to this number are charged at 8p per minute from benefit the environment such as Metal Products Division is at the heart of and services to a wide range of chemical a BT landline. Other telephony providers’ costs may vary pollution control, cleaner fuel, more these activities focused on the marketing, and pharmaceutical industry customers efficient use of hydrocarbons and the distribution, fabrication, refining and and research institutes. hydrogen economy. recycling of precious metals and their Central America Africa products. Johnson Matthey is grateful to the following for their help in providing illustrations: Platinum rings, page 14 – Cendres & Métaux SA, Switzerland Methanol plant, page 17 – Oman Methanol Company LLC South America Revenue £2,290m Revenue £4,688m Revenue £521m SuperSTEM image, page 22 – Intertek MSG and SuperSTEM (University of Liverpool) Hydrogen fuel cell bus, page 28 and back cover – AC Transit Australia Sales excluding Sales excluding Sales excluding precious metals £1,140m precious metals £307m precious metals £303m The paper in this report is produced with 100% ECF (Elemental Chlorine Free) ecological pulp which is fully recyclable, biodegradable, pH Neutral, heavy metal absence and acid-free. It is manufactured within a mill which complies with the international environmental ISO 14001 standard. This report has been printed using an alcohol free process and the printing inks are made from vegetable oil, are non-hazardous and are from renewable sources. Over 90% of solvents and developers are recycled for further use and recycling initiatives are in place for all other waste associated with this production. The printers are FSC and ISO 14001 certified with strict procedures in place to safeguard the environment through all our processes. They have also registered and had audits done by the Carbon Trust to reduce their Carbon Footprint. Designed and produced by MAGEE www.magee.co.uk Printed by CTD Annual Report & Accounts 2008 109 THE GROUP AT A GLANCE COMPANY DETAILS Johnson Matthey is a speciality chemicals company and a world leader Registered Office Johnson Matthey 40-42 Hatton Garden London EC1N 8EE in advanced materials technology. The group focuses on its core skills Telephone: 020 7269 8400 Fax: 020 7269 8433 in catalysis, precious metals, fine chemicals and process technology, Internet address: www.matthey.com Environmental Technologies Precious Metal Products Fine Chemicals & Catalysts E-mail: [email protected] developing products that enhance the quality of life for millions of Registered in England – Number 33774 people around the world. The group has operations in over 30 countries Emission Control Platinum Marketing and Distribution Catalysts and Chemicals Technologies Noble Metals Macfarlan Smith and employs around 8,700 people. Johnson Matthey’s operations are Process Technologies Professional Advisers Pgm Refining and Recycling Pharmaceutical Materials Auditors Fuel Cells and Services organised into three global divisions: Environmental Technologies; Colour Technologies KPMG Audit Plc Research Chemicals 8 Salisbury Square Gold and Silver Precious Metal Products and Fine Chemicals & Catalysts. London EC4Y 8BB Brokers Credit Suisse Securities (Europe) Limited Merrill Lynch International One Cabot Square Merrill Lynch Financial Centre London E14 4QJ 2 King Edward Street London EC1A 1HQ Lawyers Herbert Smith LLP Taylor Wessing LLP Exchange House Carmelite Primrose Street 50 Victoria Embankment London EC2A 2HS Blackfriars London EC4Y 0DX Registrars Equiniti Aspect House Spencer Road Scandanavia Lancing West Sussex BN99 6DA Environmental Technologies Division is a Johnson Matthey has a longstanding Fine Chemicals & Catalysts Division is a Telephone: 0871 384 2344* UK Internet address: www.shareview.co.uk