Annual Report

please find the attachments

Go Online
www.matthey.com/AR12
To view our online annual report
JOHNSON MATTHEY IS A LEADING SPECIALITY
CHEMICALS COMPANY UNDERPINNED BY
SCIENCE, TECHNOLOGY AND OUR PEOPLE.
The group is a leader in sustainable
technologies and many of our
products enhance the quality of life
for millions through their beneficial
impact on the environment, health
and wellbeing. Technology
leadership forms the basis of
Johnson Matthey’s strategy to deliver
superior long term growth and we
continue to invest in R&D to develop
the next generation of sustainable
products for our customers. To us,
good performance is not just about
profit. It’s about running our business
in the most sustainable and
responsible way and so we have
identified five elements of sustainability
which have a material impact on our
business. In this report we will update
you on our progress.
DELIVERING
VALUE
Financial
Must be profitable to be sustainable
Sustainability initiatives can be cost efficient too
Health and Safety
Protecting employees, customers and communities
Beneficial products
Environment
Responsible operations
Beneficial products
Governance
Well run business
Transparent reporting
Social
Employee development and wellbeing, recruitment
Supporting communities, safeguarding reputation
Building a Sustainable Business
ANNUAL REPORT & ACCOUNTS
Jo
h
n
so
n
M
atth
ey
A
n
n
u
al R
ep
o
rt &
A
cco
u
n
ts 2
012
5th Floor
25 Farringdon Street
London EC4A 4AB
United Kingdom
Tel: +44 (0)20 7269 8400
Fax: +44 (0)20 7269 8433
2012
VALUE
developing products that enhance the quality of life
for millions of people around the world
Go Online
www.matthey.com
To view our online annual report
DELIVERING

Johnson Matthey Annual Report & Accounts 2012
Johnson Matthey at a Glance
Environmental Technologies
Emission Control
Technologies
Process Technologies
Fuel Cells
Environmental Technologies Division’s
products and services are used globally in
applications which benefit the environment.
It supplies catalysts and technologies
which contribute to pollution control,
cleaner fuels, greener power and the more
efficient use of hydrocarbon resources.
Its emission control catalysts are fitted to
about one in three cars around the world.
Return on sales excluding 11.3%
precious metals
Return on invested capital (ROIC) 14.2%
Capital expenditure £97.1m
Capex / depreciation 1.2
Average invested capital £1,492m
Employees 5,640
Key Statistics
2009
1,135*
124.3
1,252
120.9
1,566
164.7
1,876
211.8
2010 2011 2012
Sales excluding
precious metals
Underlying
operating
profit
0
500
1,000
1,500
2,000
£ million
* Excluding inter-segment sales.
Precious Metal Products
Services
Platinum Marketing and Distribution
Refining
Manufacturing
Noble Metals
Colour Technologies
Catalysts and Chemicals
Precious Metal Products Division
adds value to precious metals. Its wide
ranging activities include the marketing,
distribution and fabrication of precious
metals and the manufacture of catalysts
and precious metal chemicals. It is also
a world leading refiner of precious metals,
ensuring these valuable materials are
efficiently recovered and reused.
Return on sales excluding 34.5%
precious metals
Return on invested capital (ROIC) 58.9%
Capital expenditure £31.6m
Capex / depreciation 1.4
Average invested capital £341m
Employees 2,894
Key Statistics
2009
447*
143.0
454
116.7
541
172.9
582
200.8
2010 2011 2012
Sales excluding
precious metals
Underlying
operating
profit
0
200
400
600
£ million
Fine Chemicals
API Manufacturing
Macfarlan Smith
Pharmaceutical Materials and Services
Research Chemicals
Fine Chemicals Division supplies active
pharmaceutical ingredients, fine chemicals
and other speciality chemicals to a wide
range of pharmaceutical and chemical
industry customers and research institutes
globally. Its products help relieve pain,
treat cancer and other medical conditions,
improving the quality of life for many people
around the world.
Return on sales excluding 24.5%
precious metals
Return on invested capital (ROIC) 16.7%
Capital expenditure £15.8m
Capex / depreciation 0.9
Average invested capital £418m
Employees 1,090
Key Statistics
2009
215*
49.5
221
55.8
245
56.2
285
69.7
2010 2011 2012
Sales excluding
precious metals
Underlying
operating
profit
0
100
200
300
£ million
March
2007
March
2008
March
2009
March
2011
March
2010
March
2012
Total accident
rate
> 3-day lost time
accident rate
0
3
6
9
12
2007* 2009 2010 2011 2012
Tonnes CO
2
equivalent (’000)
Tonnes /
£ million sales
0
100
200
300
400
500
0
50
100
150
200
250
300
2008
89.6
37.1
89.5
36.6
86.4
39.0
119.0
46.0
153.7
55.0
2009 20112010 2012
Underlying earnings
per share
Ordinary dividend
per share
0
40
80
120
160
Performance Highlights
* Calendar year.
Johnson Matthey continued its strong performance in 2011/12 with
good growth across all three of its divisions.
Year to 31st March
2012 2011 % change
Financial
Revenue £ million 12,023 9,985 +20
Sales excluding precious metals (sales) £ million 2,679 2,280 +17
Profit before tax £ million 409.3 259.32 +58
Total earnings per share pence 148.7 85.22 +75
Underlying1:
Profit before tax £ million 426.0 345.5 +23
Earnings per share pence 153.7 119.0 +29
Dividends per share:
Ordinary pence 55.0 46.0 +20
Special pence 100.0 – –
Social
Average number of employees 9,914 9,388 +6
Voluntary employee turnover % 6.4 5.6 +1
Training spend per employee £ 335 390 -14
Charitable donations £ thousands 645 517 +25
Health and Safety
Greater than three day accidents per 1,000 employees 2.07 2.992 -31
Total accident rate per 1,000 employees 5.69 7.892 -28
Occupational illness cases per 1,000 employees 3.5 3.5 –
Environment
Energy consumption thousands GJ 4,726 4,749 –
Global warming potential thousand tonnes CO2 equivalent 417 415 –
Total waste tonnes 120,363 113,671 +6
Water consumption thousands m3 2,201 2,076 +6
Total acid gas emissions tonnes SO2 equivalent 444 318 +40
1 Before amortisation of acquired intangibles, major impairment and restructuring charges, profit or loss on disposal of businesses and, where relevant, related tax effects.
2 Restated.
Delivering Superior Value
pence
> Reducing Carbon Intensity
Tonnes CO2 Tonnes /
equivalent (’000) £ million sales
> Safety is a Key Priority
per 1,000 employees
>
The paper in this report contains material sourced from responsibly managed forests, certified in
accordance with the FSC® (Forest Stewardship Council) and is totally recyclable and acid-free.
Fulmar Colour is FSC certified, PEFC certified and ISO 14001 certified showing that it is committed
to all round excellence and improving environmental performance is an important part of this
strategy. Fulmar Colour aims to reduce at source the effect its operations have on the environment
and is committed to continual improvement, prevention of pollution and compliance with any
legislation or industry standards.
Fulmar Colour is a Carbon Neutral Printing Company.
Designed and produced by MAGEE
www.magee.co.uk
Printed by Fulmar Colour
Johnson Matthey is grateful to the following for their help in providing illustrations:
Fruits, page 65 – © Ene | Dreamstime.com

Johnson Matthey Annual Report & Accounts 2012
>
Delivering
Value
1
CAUTIONARY STATEMENT
The Business Review and certain other sections of this annual report contain forward looking statements that are subject to risk factors associated
with, amongst other things, the economic and business circumstances occurring from time to time in the countries and sectors in which the group
operates. It is believed that the expectations reflected in these statements are reasonable but they may be affected by a wide range of variables
which could cause actual results to differ materially from those currently anticipated.

This annual report aims to demonstrate how we deliver superior
value for our stakeholders. It combines our financial, social, health and
safety, environmental and governance performance into one document
and reflects the five elements of sustainability which we believe have a
material impact on our business.
Consequently…
Our 2012 Annual Report and Accounts is divided into eight sections:
Contents
Overview: introduces Johnson Matthey and summarises our
performance in the year. It also outlines the group’s strategy for
delivering superior value.
Financial: details the financial performance of the group and its
three divisions during the year.
Social: highlights initiatives involving our people, our communities and
other stakeholder groups. It also contains performance data relating to
employees and community investment.
Health and Safety: outlines our performance in the year, our approach
to health, safety and product stewardship and the programmes we have
in place to drive continuous improvement.
Environment: provides more detail on the impact of our business on the
environment. It details the environmental performance of our operations
in the year and highlights the beneficial impact of our products.
Governance: introduces our board of directors and details the corporate
governance structures that are in place to ensure we manage our
business in a responsible and transparent way.
Accounts: includes the consolidated and parent company accounts
and related notes, as well as the statement on responsibility of directors
and the independent auditor’s report on the financial accounts.
Other Information: contains the assurance statement on our non-financial
data and a checklist against the Global Reporting Initiative. It also
provides further information for shareholders, a glossary and an index
to help the reader locate information in the relevant sections.
In addition to this integrated Annual Report and Accounts we publish case studies and
further information on sustainability on the internet. Links to this supplementary information
are highlighted in the relevant chapter of this report with the symbol.
Johnson Matthey Annual Report & Accounts 20122
Go Online
www.matthey.com/AR12
To view our online annual report

3
Report of the Directors
Business Review
What we mean by Delivering Value
Overview:>
Johnson Matthey at a Glance (inner flap)
Performance Highlights 2011/12 (inner flap)
6 Chairman’s Statement
8 Chief Executive’s Statement
10 Our Business
12 Our Strategy
16 Group Performance Review
18 Group Key Performance Indicators
20 Risks and Uncertainties
Linking profitability and sustainability
Financial:>
26 Financial Review of Operations
26 Environmental Technologies
34 Precious Metal Products
40 Fine Chemicals
43 Financial Review
47 Treasury Policies
47 Liquidity and Going Concern
Investing in our people and our
communities around the world
Social:>
50 Social Performance Summary
50 Stakeholder Engagement
52 Building a Sustainable Workforce
56 Community Investment
58 Social Aims and Targets
A key priority
Health and Safety:>
62 Health and Safety Performance Summary
62 Managing Performance and Driving Continuous Improvement
62 Health Performance in 2011/12
63 Sustainable Health Improvement Priorities for 2012/13
63 Safety Performance in 2011/12
64 Safety Priorities for 2012/13
64 Product Stewardship
65 Product Stewardship Performance in 2011/12
65 Product Stewardship Priorities for 2012/13
66 Animal Testing
67 Responsible Care
67 Regulatory Matters
Environment:>
70 Environmental Performance Summary
70 Managing Performance and Driving Continuous Improvement
70 Environmental Performance in 2011/12
74 Environmental Aims and Targets
75 Biodiversity
Managing our business in the right way
Governance:>
78 Letter from the Chairman
79 Governance and Sustainability
82 Board of Directors
84 Corporate Governance Report
100 Other Statutory Information
105 Nomination Committee Report
106 Audit Committee Report
108 Remuneration Report
The details behind our
financial performance
Accounts
120 Responsibility of Directors
121 Independent Auditor’s Report
122 Consolidated Income Statement
122 Consolidated Statement of Total Comprehensive Income
123 Consolidated and Parent Company Balance Sheets
124 Consolidated and Parent Company Cash Flow Statements
125 Consolidated Statement of Changes in Equity
126 Parent Company Statement of Changes in Equity
127 Accounting Policies
131 Notes on the Accounts
Shareholdings, summaries,
the glossary and index
Other Information
170 Five Year Record – Financial Data
171 Five Year Record – Non-Financial Data
172 Basis of Reporting – Non-Financial Data
173 Verification and Assurance – Non-Financial Data
174 Shareholder Information
176 Global Reporting Initiative (GRI) Summary
177 Glossary of Terms
178 Index
179 Financial Calendar 2012/13
180 Company Details
Governance
Reducing the impact of our operations and
developing beneficial products

Johnson Matthey Annual Report & Accounts 2012
Report of the Directors – Business Review
Overview
4
What we
mean by
Delivering
Value

Contents
6 Chairman’s Statement
8 Chief Executive’s Statement
10 Our Business
12 Our Strategy
16 Group Performance Review
18 Group Key Performance Indicators
20 Risks and Uncertainties
Overview
This section introduces Johnson Matthey and summarises our performance in the year. It also outlines the group’s strategy
for delivering superior value.
. The washcoat preparation area at our Smithfield facility
in Pennsylvania, USA.
. Inspecting heavy duty diesel catalysts. . State of the art technologies at Smithfield for
manufacturing heavy duty diesel catalysts.
> Leading the Way in
HDD Catalysts
The market for catalysts to control harmful
emissions from heavy duty diesel (HDD)
vehicles, such as trucks and buses, is
growing rapidly driven by tightening legislation
for both on road and non-road applications
around the world.
Johnson Matthey has developed world
leading catalyst technology for HDD applications
and, as a result, has established a very strong
market position thanks to sustained investment
in R&D and state of the art manufacturing
facilities, including at our plant in Smithfield,
USA (pictured). 2011/12 marked another
strong year for Johnson Matthey’s HDD
catalyst business where sales grew by 48%
to £438 million and operating profit more
than doubled.
New and tighter legislation will impose
increasing technical demands on the emission
control catalyst systems required for HDD
applications and technologies must cope with
controlling oxides of nitrogen and particulate
matter to extremely low levels. This inevitably
results in increasing value for Johnson
Matthey. Furthermore, as legislation extends
to cover more vehicles and additional regions
of the world, the group’s commitment to
maintaining technology leadership in this field
positions us well to benefit from future growth
in demand.
Delivering Value

Chairman’s Statement
In my first statement as Chairman, I am
delighted to report that Johnson Matthey
performed very strongly in 2011/12. During
the year the company benefited from good
demand for its products as well as robust
precious metal prices, particularly in the
first half. The group’s continuing strong
performance is enabled by our long term
investment in research and development
(R&D) and our strategy of organic growth,
complemented by bolt-on acquisitions.
Together these have enabled the company
to achieve leading positions in a number
of rapidly growing markets. The result is
another year of strong growth in underlying
earnings per share, which were up 29%
to 153.7 pence.
The group’s cash generation has
also been strong: at 31st March 2012
the group’s net debt (including post tax
pension deficits) to EBITDA ratio was
1.0 times. As a result of this very good
performance the board has carried out
a review of the group’s balance sheet
structure. The outlook for the group
remains strong; we believe it has ample
resources to fund forecast capital
expenditure and a further increase in R&D.
The board is therefore recommending
a special dividend to shareholders of
100 pence per share, which represents a
total payment of approximately £212 million.
Sustainability continues to be a key
element of the company’s strategy and
I am very pleased to be introducing this,
Johnson Matthey’s first ‘integrated’ annual
report, which describes all aspects of our
financial and non-financial performance.
I believe that this reflects both our values
and our determination to build a sustainable
business, as well as communicating to all
of our stakeholders our commitment to
sustainable growth. In this year’s annual
report we have also included more
comprehensive governance reporting,
including in the Corporate Governance
Report on pages 84 to 99 which forms
a key part of the Report of the Directors.
Johnson Matthey Annual Report & Accounts 2012
Report of the Directors – Business Review
Overview
6
Tim Stevenson
Chairman
“Welcome to this, our first
integrated annual report,
which I hope will provide you
with a deeper understanding
of the many aspects of our
business, its performance,
its long term prospects, its
governance and, ultimately,
how we deliver value to our
stakeholders.”

This is in light of changes introduced
by the UK Corporate Governance Code
(the Code), which replaced the Combined
Code on Corporate Governance in June
2010. While we reflected certain aspects
of the Code on a voluntary basis in last
year’s annual report, this year’s Corporate
Governance Report fully reflects a number
of substantial changes in corporate
governance reporting. I hope that this
integrated annual report will provide you
with a deeper understanding of the many
aspects of our business, its performance,
its long term prospects, its governance
and, ultimately, how we deliver value to our
customers and to other stakeholders.
I joined the board as Chairman
Designate in March 2011 and was very
pleased to have been appointed as
Chairman of your company at the close of
last year’s annual general meeting (AGM).
I recognise that an effective board
is central to the long term sustainable
success of the company. In the Governance
section of this year’s annual report we
describe the structures and measures in
place which are designed to ensure its
continued effectiveness and we review
how the principles of the Code have been
applied in the year, focusing on the role
and effectiveness of the board. We
describe in particular the board and
committee performance evaluations
completed last year and underway this
year. These have been especially important
for me in my first year as Chairman.
I chair the board at an exciting stage
of Johnson Matthey’s development. Not
only are its businesses making excellent
progress, realising the benefits of the
company’s long term strategy and
investment in R&D and facilities, but our
Sustainability 2017 programme continues
to achieve good progress towards meeting
its objectives and targets. Its focus on
improving resource efficiency in our
manufacturing operations and developing
more sustainable products for our
customers should make a major
contribution to growth in the years ahead.
Since joining the company, I have met
a number of Johnson Matthey’s major
shareholders and received positive feedback
on the company and its strategy. I am keen
to maintain regular dialogue with our
shareholders and look forward to meeting
many of you at this year’s AGM when there
will be an opportunity for us to discuss the
company’s business and achievements.
This is my opportunity to thank my
predecessor, Sir John Banham, for his
strong leadership of the board and many
efforts on behalf of the company over
the five years that he was Chairman.
John brought to the board his wide
ranging experience of both corporate and
public sector leadership and governance.
He was also a tireless ambassador for the
company and an eloquent and enthusiastic
advocate of its achievements and
potential. On behalf of all of us at Johnson
Matthey, I thank him for his important
contribution and wish him all the very best
for his retirement.
Sir Thomas Harris retires from the
board at the close of this year’s AGM
having served as a non-executive director
since April 2009. I would like to thank Tom
for his wise counsel and contribution to the
work of the board over the last three years
and wish him the best for the future.
There is no doubt that our most
important investment is that which we
make in our people. The training,
development and, most importantly, the
wellbeing of our employees is vital to the
success of our business. In this respect
I am delighted that we have made such
good progress towards achieving our
target of zero accidents during the year.
Since joining the company I have met
many of our employees around the world.
I have been repeatedly impressed by their
enthusiasm, professionalism and dedication
at every level of the organisation. On
behalf of all our stakeholders, I thank our
employees for their hard working
contribution to another successful year.
To conclude: as you will read in this
annual report, Johnson Matthey is in very
good shape and continues to make good
progress in delivering value to its
shareholders and other stakeholders.
The drivers of our business remain firmly
in place. Despite current global economic
uncertainties, I am confident that we will
continue to benefit in the years ahead from
our continuing and increasing investment
in R&D, our emphasis on efficient
manufacturing infrastructure and the
quality of our people around the world.
Tim Stevenson
Chairman
7

Chief Executive’s Statement
Johnson Matthey Annual Report & Accounts 2012
Report of the Directors – Business Review
Overview
8
I am very pleased to say that Johnson
Matthey had a good year in 2011/12,
continuing our strong financial performance
and making good progress towards
improving our environmental, health and
safety performance. We have also
increased our focus on developing our
people and on defining and disseminating
our culture, both of which are key to the
success of our growing global business.
The year has also seen us making good
progress on our strategy of delivering
superior value to our stakeholders through
technology leadership, continuing to
increase our investment in research and
development and in state of the art
manufacturing facilities around the world.
The year saw good growth across all
three of our divisions. Sales excluding
precious metals (sales) were substantially
ahead of last year, up 17% at £2.7 billion,
and the rate of growth in underlying
operating profit was higher, at 23%.
Our Environmental Technologies
Division had a very good year. Its Emission
Control Technologies (ECT) business
benefited from good growth in sales of light
duty catalysts, ahead of growth in global
vehicle production, and a substantial
increase in demand for heavy duty diesel
catalysts, particularly in North America. Our
Process Technologies business performed
well boosted by another excellent year
from Davy Process Technology (DPT) and
a good contribution from our Additives
business (formerly Intercat), which was
acquired in November 2010.
Precious Metal Products Division also
performed well, especially in the first six
months of the year. After a very strong first
half, precious metal prices softened in
response to concerns over the global
economy which adversely impacted the
division’s Services businesses. Its
Manufacturing businesses saw good
demand across their product range.
Fine Chemicals Division exceeded our
expectations, delivering excellent results in
2011/12, supported by a very strong
performance from its Active Pharmaceutical
Ingredient (API) Manufacturing businesses.
Its global Research Chemicals business
also grew well in the year.
Neil Carson
Chief Executive
“We have made good
progress this year on
our strategy of delivering
superior value to our
stakeholders through
technology leadership,
continuing to increase our
investment in research and
development and state of
the art manufacturing
facilities around the world.”

9
For the group as a whole, revenue
was 20% up on last year at £12 billion
and sales were £2.7 billion, 17% higher
than last year. Underlying operating profit
was 23% higher at £450.1 million, while
underlying profit before tax was also
23% up at £426.0 million. The group’s
underlying return on sales increased to
16.8% from 16.1% last year, primarily due
to operational leverage, particularly in our
heavy duty diesel catalyst business, and
the excellent performance from our higher
margin DPT business.
Sustainability is a key element of our
strategy for growth and is well embedded
in all of our businesses and embraced by
our employees around the world. We
continue to make good progress towards
achieving our Sustainability 2017 Vision via
the challenging targets that we set
ourselves when we launched it back in
December 2007. Our sustainability strategy
and targets are subject to continuous
review and during the year we have made
some changes to our targets which are
outlined on page 15 of this annual report.
In particular we have taken a detailed look
at our commitment to reduce carbon
emissions from our operations.
Over the last few years we have
gained a much better understanding of
carbon legislation, markets and emissions
from our processes and we have come to
the conclusion that carbon neutrality is not
an appropriate target for a growing
manufacturing business like ours. However,
we remain committed to driving down our
carbon emissions as much as is realistically
possible and with effect from 1st April
2012 we have replaced carbon neutrality
with a new target to halve our carbon
intensity, relative to our 2007 baseline
figure, by 2017. I believe that this continues
to be a stretching target.
Johnson Matthey is extremely well
placed to benefit from a combination of
improvements to the efficiency and
environmental performance of its own
manufacturing operations and from
developing new products that bring
significant sustainability benefits to our
customers. Operational improvements and
increased efficiency have undoubtedly
been making a significant contribution to
the growth and success of the company
in the last few years. Manufacturing is at
the very heart of our business. It is how
we bring our science and technology to
life and deliver what our customers want,
when they want it. During the year we
established and launched a groupwide
Manufacturing Excellence programme.
I believe that this important initiative will
better equip us to produce high technology
products for our customers in the most
sustainable and efficient way and will bring
major benefits to our business in the years
ahead.
Our people play a vital role in the
success of our business, they truly are our
most valuable resource. Their training and
development and protection of their health,
safety and wellbeing have long been, and
remain, key priorities. We have continued
to make good progress during the year in
developing our systems and improving
performance in these very important areas.
Outlook
After another year of strong growth, the
group is well positioned for the year ahead.
However, once again, it is difficult to
assess with any degree of confidence how
the global economy, especially in Europe,
will develop in the short term. This
uncertainty has resulted in a substantial
fall in precious metal prices over the last
few months, despite robust demand.
Nonetheless, we remain confident that our
strong position in markets with structural
growth will allow us to make further
progress in Environmental Technologies
and Fine Chemicals in 2012/13. This,
however, will be offset by a weaker
performance from Precious Metal
Products, if precious metal prices remain
at current levels.
The outlook for our Environmental
Technologies Division remains positive.
Emission Control Technologies should
benefit from the continued development of
the heavy duty diesel catalyst market and
anticipated growth in light duty vehicle
production in North America and Asia.
However, we remain cautious about the
outlook for European car and truck
markets. Notwithstanding that, the removal
of the headwinds in the first half of
2011/12 associated with higher rare earth
material prices and the Japanese
earthquake should ensure that ECT will
perform well in the first six months of this
year. Process Technologies is also well
placed for another year of growth,
benefiting from the ongoing strong
demand for DPT’s licences and for
additives.
Precious Metal Products Division’s
performance is, as we have outlined
before, more dependent upon precious
metal prices and their recent falls, if
maintained, will impact the division’s
Services businesses. In addition, these
businesses suffer from relatively tough
comparatives as metal prices and refining
intakes were strong in the first half of
2011/12. Therefore, if precious metal
prices remain at current levels, the
performance of the Services businesses in
the first half of 2012/13 will be significantly
lower than in 2011/12. The Manufacturing
businesses are expected to make progress
during 2012/13.
The performance of our Fine
Chemicals Division in 2011/12 exceeded
our expectations and the strong drivers for
the business remain in place. Continued
demand for our existing APIs, the
introduction of new products and further
geographic expansion of our Research
Chemicals business’ footprint should
ensure that we have another strong year.
In the longer term, we are continuing
to expand our manufacturing capacity
around the world and to invest in R&D.
Together, this should enable us to provide
products that satisfy tightening global
legislation and that meet the growing
demand from our customers. We have
strong positions in markets that will see
structural growth over the next few years
and, despite current global economic
uncertainties, we are confident of the
group’s continuing growth potential.
Neil Carson
Chief Executive

Our Business
Johnson Matthey Annual Report & Accounts 2012
Report of the Directors – Business Review
Overview
10
Johnson Matthey is a global speciality chemicals company.
We have operations in over 30 countries and employ around
10,000 people worldwide.
The group is organised into three global divisions: > Environmental Technologies
Read more on page 26.
> Precious Metal Products
Read more on page 34.
> Fine Chemicals
Read more on page 40.
> Johnson Matthey is a leader in
sustainable technologies. We focus
on clean air, clean energy and low
carbon technologies and are experts
in the application and recycling of
precious metals. We invest in R&D
to develop products that enhance
the quality of life for millions of people
around the world.
Well
positioned
for future
growth

11
Europe
35%
North America
34%
China
8%
Rest of Asia
11%
Rest of World
12%
Sales by Region
A Truly Global Company
Johnson Matthey sells its products
globally which provides stability in times of
regional market uncertainty. Year on year
we are increasing our sales to developing
markets and expanding our operations to
support this global growth.
19%
Sales in Asia in 2011/12.
Read more on pages 26 to 42.
>
>
DELIVERING
VALUE
Financial
Must be profitable to be sustainable
Sustainability initiatives can be cost efficient too
Health and Safety
Protecting employees, customers and communities
Beneficial products
Environment
Responsible operations
Beneficial products
Governance
Well run business
Transparent reporting
Social
Employee development and wellbeing, recruitment
Supporting communities, safeguarding reputation
Building a Sustainable Business
£128.6m
Gross spend on R&D in 2011/12.
Read more on pages 14 and 15.
Light duty
vehicles
39%
Heavy duty diesel vehicles
17%
Pharmaceutical
13%
Petrochemical
15%
Precious
metal services
6%
Other
10%
Sales by Key Market
Focused on Key Markets
Johnson Matthey is focused on its key
markets where we can add value through
applying our expertise in catalysis and
platinum group metal chemistry. This
approach enables us to maintain
differentiation through technology and
achieve leading industry positions with
high margin products.
48%
Growth in heavy duty diesel catalyst sales in
2011/12. Read more on pages 30 and 31.
>
>
>£28m
Savings from sustainability initiatives to date.
Read more on pages 13 to 15 and page 17.
Environment
55%
Health
10%
Resource
efficiency
21%
Social / lifestyle
5%
Other
9%
Sales by Area of Beneficial Impact
A Leader in Sustainable Technologies
Johnson Matthey is focused on developing
products that deliver sustainability benefits
to our customers and to society. Today,
some 86% of the group’s sales represent
products and services which provide
sustainability benefits through their positive
impact on the environment, resource
efficiency or our health.
86%
Sales from products providing sustainability benefits
in 2011/12. Read more on pages 26 to 42.
>
>
60%
Employees working in manufacturing operations.
Read more on pages 14 and 15.
A Vision for Sustainability
Our goal at Johnson Matthey is to grow
our business – but to grow it sustainably.
Sustainability is a key element of our strategy
for continued growth and we believe that
the resource efficient, environmentally
responsible manufacturing of products that
offer sustainability benefits for our customers
can leverage commercial advantage for the
group and deliver superior value.
All across the group, employees are
engaged in sustainability programmes
focused on designing and manufacturing
our products more efficiently using fewer
resources and on developing improved,
more efficient products for our customers.
Read more on page 13.
Investing in R&D
At Johnson Matthey, we invest heavily in
research and development (R&D). We
recognise that this investment is vital if we
are to realise new market opportunities
over the years ahead. Our ability to
innovate and differentiate through
technology underpins our future success.
Sustainability 2017
Sustainability 2017 is Johnson Matthey’s
vision for building a sustainable business
and includes challenging targets to support
future growth. We aim to double our
underlying earnings per share while cutting
carbon intensity by half, achieving zero
waste to landfill and halving the key
resources that we consume per unit of
output by 2017, the 200th anniversary
of the company’s foundation.
Manufacturing Excellence
Manufacturing is the way we bring our
science to life and our Manufacturing
Excellence programme is focused on
ensuring we run our manufacturing
operations with the highest efficiency.
Through Manufacturing Excellence
we aim to boost efficiency, reduce
manufacturing costs, develop our people
and support delivery of our Sustainability
2017 targets.

There are five major themes directing Johnson Matthey’s strategy:
Focus on leading edge catalysis
We will continue to focus upon the science of catalysis which underpins the majority of Johnson Matthey’s products and
enables the group to develop high performance solutions for our customers.
Differentiation through technology
Enhanced investment in R&D in our core markets will enable the group to provide the very best products and maintain a
competitive edge.
Strong position in platinum group metals
Around 70% of Johnson Matthey’s businesses involve platinum group metals (pgms) and we will continue to apply our
expertise in exploiting their chemical and physical properties to deliver high technology added value products.
Organic growth
Organic growth remains our primary focus however the group will make bolt-on acquisitions where they will accelerate the
delivery of our strategy.
New business development
We will increase our investment in new markets and sectors to target further growth from areas that are aligned with the
group’s technological expertise and commercial interests.

Delivering superior long term
growth through technology leadership
Our
Strategic
Intent:
Focus on leading
edge catalysis
Differentiation
through technology
Strong position in
platinum group metals
Organic growth New business
development
Our Strategy:
Supported by:
Global
drivers Sustainability R&D
Manufacturing
Excellence
Our people
and culture
In late 2010 the group reviewed its strategy. This review involved a
detailed examination of the group’s past performance, its key
strengths and the attributes that make it successful. Global
megatrends impacting the world around us that will drive growth
for the company were considered and the key strategic
opportunities arising from these were identified. From this, the
group’s strategic direction for the next ten years was defined.
Read more on the strategy review process on
pages 8 to 13 of our 2011 Annual Report and
Accounts or online at www.matthey.com/AR11.
Our Strategy
Johnson Matthey Annual Report & Accounts 2012
Report of the Directors – Business Review
Overview
12
> Johnson Matthey’s strategic intent
is to deliver superior long term growth
through technology leadership. For us,
delivering ‘superior long term growth’
means growing our business ahead
of the underlying growth rates of our
key markets.
Strategic
intent

13
Global Drivers Impacting the Chemical Industry
Johnson Matthey
Activities
Industry Sector GLOBAL DRIVERS Johnson Matthey
Activities
Industry Sector
Emission
control
catalysts
Obscuration
enamels
Pharma-
ceuticals
Agricultural
chemicals
Emission
control
Clean fuel
Low carbon
Pgms
Petrochemical
catalysts and
processes
Gas / coal
to products
technology
Catalysts
Pgm
refining
Automotive Electronics
Construction Bulk
chemicals
Population Growth
Urbanisation
Increasing Wealth
Health and Nutrition
Ageing Population
Natural
Resource
Constraints
Environmental Factors
Climate Change
Regulation
Energy
security
Alternative
energy
Resource
efficiency
Recycling
APIs
Medical
components
Pgm
catalysts
Ammonia
synthesis and
nitric acid
catalysts
Fine
chemicals
Emission
control
catalysts
Abatement
technologies
Hydrogen
catalysts
Purification
products
Fuel cells
Carbon
capture and
storage (CCS)
>
>
< < >
>
< < There are five fundamental key enablers to our strategy. We now examine each of these in more detail to understand the impact they have on our business and their role in enabling future growth. 1. Global Drivers that Support Future Growth There are four major global drivers which we believe have a major impact on Johnson Matthey’s business: > Environmental factors, climate
change, regulation
> Natural resource constraints
> Population growth, urbanisation,
increasing wealth
> Health and nutrition, ageing
population
The figure below illustrates how
these macro level trends impact the
industries into which Johnson Matthey
supplies its products and technologies.
All four global drivers provide
opportunities for growth in many of
our businesses. For example:
• Projected population growth
rates and increasing urbanisation
and wealth, particularly in
emerging markets, will drive an
increase in the number of cars
on our roads and therefore links
through to growth in Johnson
Matthey’s automotive emission
control catalyst business.
• Projections on how natural
resources will become more
depleted provide estimates on
demand for recycling which in
turn will benefit the group’s Pgm
Refining business.
These global level trends also
offer opportunities for the group to
leverage its expertise in catalysis and
platinum group metals to deliver
growth across its businesses, ahead
of underlying market rates.
2. A Vision for Sustainability
Sustainability is a key element of our
strategy for future growth where the
resource efficient, environmentally
responsible manufacturing of high
technology products that deliver
sustainability benefits can leverage
commercial advantage for the group.
The group’s Sustainability 2017
Vision, launched in December 2007,
sets out our direction and aspirations
for building a more sustainable
business. Our long term sustainability
strategy is underpinned by two
business drivers, five key elements
and six sustainability targets.
Two Business Drivers
There are two key business drivers
for sustainability which engender
responsible business practices and
support future growth. The first
focuses on our internal operations
and on designing and manufacturing
our products more efficiently using
fewer resources. This approach helps
us to reduce our costs and at the
same time reduces our impact on the
planet. The second driver concerns
our products and services and
focuses on developing improved,
more efficient solutions for our
customers. By doing this we can
enhance our customers’ performance
and improve their sustainability
footprint which, in turn, will improve
our competitiveness. Together these
drivers support the development of
products and services which have
a beneficial impact on the planet,
be it through health, social or
environmental improvements.
Five Key Elements
Growing our business through
sustainability is not only about our
operations and products. We are
also committed to best practice in
governance, to creating a positive
working environment for employees
and to being a responsible partner
for our customers, suppliers,
communities and other stakeholders.
As such, we manage sustainability
across the group according to five
elements: financial; governance; social;
health and safety; and environment.
Delivering good performance in all five
areas is vital to our long term success.

Six Sustainability Targets
Our Sustainability 2017 Vision is
supported by six challenging targets
as illustrated in the figure above. Our
progress towards them in 2011/12 is
summarised on page 17 and further
details are provided in the Financial,
Social, Health and Safety and
Environment sections of this report.
Read more on sustainability
at Johnson Matthey at
www.matthey.com/sustainability.
3. Research and Development
Continued investment in R&D
underpins the future growth of
Johnson Matthey. It is this investment,
together with our ability to recruit the
most talented scientists, that will
ensure we maintain the expertise and
leadership in the science of catalysis,
materials chemistry and pgms that
drive the development of high
technology products and
manufacturing processes.
Around 1,200 of our employees
work in R&D representing around
12% of the total workforce and
include many highly skilled scientists
and engineers. Around 80% of our
R&D staff work within the group’s
businesses in dedicated R&D and
technical centres around the world.
In our businesses, work is mainly
focused on delivery of shorter term
business specific projects or to
address particular market
developments or customer needs.
Alongside these activities,
Johnson Matthey also has central
capability on strategic R&D, located
at two Technology Centres, which
works on behalf of all of the group’s
businesses.
We maintain a close link between
our central R&D activities and the
development work carried out directly
by Johnson Matthey’s businesses.
This interaction is key in ensuring
the rapid transfer of technology to
support the continued development of
innovative new products and services
for our customers. Examples of our
current projects are highlighted as
‘Innovation in Action’ case studies
throughout this report.
As previously described, major
global drivers provide significant
opportunities for Johnson Matthey
to grow and develop its existing
business areas over the years ahead
and R&D will play an important role in
realising these opportunities.
In 2011/12 Johnson Matthey
increased its gross investment in
R&D by 17% to £128.6 million.
Read more on R&D at
Johnson Matthey at
www.matthey.com/innovation.
4. Manufacturing Excellence
Manufacturing is a key contributor to
Johnson Matthey’s success and will
underpin our growth in the future. It is
a major part of our business in terms of
the group’s global spend and provides
jobs for 60% of our employees.
Improving our manufacturing
performance can therefore have a
significant impact on our business.
The 2010/11 strategic review
identified that there were opportunities
for us to improve our operations and
enhance our competitiveness.
Manufacturing Excellence is a
long term investment in our people,
manufacturing processes, engineering
and technology. Lean principles are
becoming integrated at all sites to
increase manufacturing efficiency and
improve overall performance. Technical
centres of excellence are being
developed to provide opportunities
for manufacturing teams around the
world to trial and test new equipment.
Engineering teams are working to
identify and develop best practice for
our key processes.
The programme offers opportunities
for us to increase efficiency, reduce our
costs, capture our global expertise and
improve our capacity with minimum
capital expenditure.
Our Strategy continued
Johnson Matthey Annual Report & Accounts 2012
Report of the Directors – Business Review
Overview
14
Central
Research
21%
Environmental
Technologies
61%
Precious
Metal
Products
13%
Fine
Chemicals
5%
Research and Development
Employees
Six Sustainability Targets (from April 2012)
At least double earnings per share
Halve carbon intensity
Achieve zero waste to landfill
Halve key resources consumed per unit of output
Reduce annual incidence of occupational
illness cases by at least 30% over the five years
to 2013/14
Achieve a zero ‘greater than three day accidents’
safety target
Innovation in Action
Read more on our R&D activities throughout
this annual report:
> Staying Ahead of the
Legislation page 29
> Deeper Knowledge of
NOx Removal Catalysts page 30
> An Insight on the Inside page 32
> Looking Inside a Fuel Cell page 33
> Sustainable Catalysts to
Replace Mercury page 39

15
5. People and Culture
Recruiting the right people, developing
them and providing an environment
which motivates them to contribute
and stay with the company is
fundamental to the group’s long term
performance. A ten year human
resources strategy, developed
alongside the group strategy, is
focused on ensuring we can recruit,
retain and develop the highly skilled
people that will be needed to support
our global growth.
The group recognises that our
people and culture are a particular
strength and, although the culture of
an organisation is not easy to define,
there is a distinctive culture in
Johnson Matthey, irrespective of
division, business, function or
geographic location. Sustaining and
integrating our culture as we grow
the business is a challenge we are
embracing on a global scale.
Progress in 2011/12 and
Future Developments
Having established and communicated
its ten year strategy in 2010/11, the
group has now focused on the
process of embedding the strategy
and on its delivery. During the year, all
businesses were required to review
and report on their long term strategic
plans and key developments were
discussed.
As a result of the strategic review,
the group concluded that it would
place more emphasis on new
business development and work is
now underway to identify new
opportunities and leverage our R&D
expertise to drive growth. A team has
been established, tasked with finding
novel applications outside our current
products and markets but which align
with our technology bases and wider
capabilities. A rigorous market based
approach has been adopted and
during 2011/12, two main areas were
explored. Opportunities within the
water industry were investigated and
a number of potential areas were
identified where Johnson Matthey’s
technology and capabilities could be
applied. The team also looked at the
implications of the introduction of
electric automotive powertrains,
considering a range of options
including battery materials and other
technologies. This has identified a
range of possible new business
activities for the company. As a result,
we have formed a team who are
developing and executing the group’s
plans to address these markets. It is
still early days, but we hope to make
further progress during 2012/13.
Two additional sectors will be
investigated during the year. This work
is consistent with our overall objective
of developing a new business with
sales of more than £200 million within
ten years.
Work has commenced this year
to explore how we can more
effectively articulate and communicate
the group’s culture and values. This
will continue in 2012/13 and their
alignment with employee behaviours
and performance management will be
explored further.
During 2011/12 the group
launched its global Manufacturing
Excellence programme to support its
strategic intent. Work will continue to
implement and embed the
programme and from the start of the
2012/13 financial year, performance
against a number of key metrics will
be reported by all manufacturing sites
on a monthly basis and used internally
to track progress and direct actions.
As discussed in last year’s annual
report, in February 2011 the group
reviewed its sustainability strategy to
assess progress and ensure that its
targets were still appropriate to
business needs. The review
concluded that there was no need to
radically change direction, but
highlighted areas where we could
evolve our strategy to better support
the future growth of the company.
These were further investigated during
2011/12 and as a result, two
amendments to our Sustainability
2017 targets have been introduced.
From April 2012 our target to
achieve ISO 14001 at all major
manufacturing facilities has been
removed as all sites included in the
original target have now achieved this.
This requirement has now been
included in our environment, health
and safety (EHS) management system.
In 2012/13 we will continue to
review the appropriateness of our
target to achieve zero waste to landfill.
We have made steady progress
towards this target but recognise that
waste to landfill is only a proportion of
the waste generated by our operations.
Therefore we will consider how we
can broaden this target to encompass
a wider definition of waste and
resource efficiency with an overall goal
of reducing waste across our business.
One aspect of the strategy we
considered in detail was our
commitment to reduce carbon
emissions from our operations. The
feedback from employees had
suggested that our aspirational target
to achieve carbon neutrality was a
concept that was difficult to understand
and was causing confusion internally.
Furthermore, over four years into our
sustainability programme, we have a
much greater understanding and
knowledge of carbon legislation,
markets and emissions from our
processes. Consequently, we now
do not believe that carbon neutrality
is an appropriate target for us.
As a manufacturing business and
a business that is growing, this target
cannot be achieved without purchasing
carbon offsets. We have conducted a
lot of research into offsets and are not
convinced they offer an appropriate
way of mitigating our carbon emissions.
We have therefore concluded this is
not an approach we wish to take.
As a group we remain committed
to driving down our carbon emissions
as far as is realistically possible and
that any increase will be at a rate that
is below the rate of business growth.
To support this commitment,
from 1st April 2012 we have replaced
our target to achieve carbon neutrality
with a new target to halve our carbon
intensity by 2017, relative to our 2007
baseline figure. Our carbon intensity is
the group’s global warming potential
(GWP) per £ million of sales excluding
precious metals (sales). In 2007, our
carbon intensity was 294 tonnes CO2
equivalent / £ million sales and so we
have set a target to halve our carbon
intensity to 147 tonnes CO2 equivalent
/ £ million sales by 2017.
Many of our products already
reduce greenhouse gas emissions for
our customers and we continue to
focus on the development of products
that mitigate climate change. Our own
life cycle experts group is working to
better quantify the in service benefits
of our products.
Delivering Value
Read more about how we deliver value throughout this annual report:
> Leading the Way in HDD Catalysts pages 4 and 5
> Davy Process Technology pages 24 and 25
> Growing Our People pages 48 and 49
> Investing in New Capacity pages 60 and 61
> Developing the Next Generation of Sustainable Products pages 68 and 69
> Supporting Our Strategy in Fine Chemicals pages 76 and 77
> Customer Focus at Colour Technologies pages 118 and 119
> Managing Metals for Our Businesses and Our Customers pages 168 and 169

Johnson Matthey has delivered another year of strong growth with
a good contribution from all of its divisions. This performance was
particularly enhanced by our leading position in heavy duty diesel
catalysts, a very strong year from Davy Process Technology (DPT) and
excellent progress in our North American API Manufacturing business.
Sales
Revenue for the year ended 31st March 2012 was 20% up on last
year at £12.0 billion. The group’s sales were 17% higher than last year
at £2.7 billion. Translated at constant exchange rates, revenue for the
year was 21% ahead and sales grew by 18%.
Operating Profit
For the group as a whole, underlying operating profit (before
amortisation of acquired intangibles, major impairment and restructuring
charges) was 23% higher than last year at £450.1 million, while
underlying profit before tax was also 23% up at £426.0 million. The
group’s underlying return on sales increased to 16.8% from 16.1%
last year, primarily due to operational leverage, particularly in our
heavy duty diesel catalyst business, and the excellent performance
from our higher margin DPT business.
The performance of the individual businesses is explained in more
detail in the Financial Review of Operations section on pages 26 to 42.
Group Performance Review
Financial Performance
Johnson Matthey Annual Report & Accounts 2012
Report of the Directors – Business Review
Overview
16
Year to 31st March
2012 2011 % change
restated
Revenue £ million 12,023 9,985 +20
Sales excluding precious metals (sales) £ million 2,679 2,280 +17
Operating profit £ million 433.4 279.9 +55
Profit before tax £ million 409.3 259.3 +58
Total earnings per share pence 148.7 85.2 +75
Underlying*:
Operating profit £ million 450.1 366.2 +23
Profit before tax £ million 426.0 345.5 +23
Earnings per share pence 153.7 119.0 +29
* Before amortisation of acquired intangibles, major impairment and restructuring charges, profit or loss on disposal of businesses and, where relevant, related tax effects.
Fine Chemicals
10%
Precious Metal
Products
21%
Environmental
Technologies
69%
Group Sales by Division
Europe
35%
North America
34%
China
8%
Rest of Asia
11%
Rest of World
12%
Group Sales by Destination
2009*
Environmental
Technologies
Precious Metal
Products
Fine
Chemicals
2010 2011 2012
0
500
1,000
1,500
2,000
2,500
3,000
Divisional Sales
£ million
2009
Environmental
Technologies
Precious Metal
Products
Fine
Chemicals
2010 2011 2012
0
100
200
300
400
500
Divisional Underlying Operating Profit
£ million
* Excluding inter-segment sales.

Our Progress
Johnson Matthey has made good progress
towards its Sustainability 2017 targets this
year.
In 2011/12 our financial performance
was strong with underlying earnings per
share (EPS) at 153.7 pence and we believe
the group remains on track to achieve its
target to double underlying EPS from the
2007 baseline by 2017. As outlined in the
strategy section on page 15, the group has
amended its target on carbon this year and
progress towards the new target, to halve
carbon intensity, has been very good.
Similarly, initiatives across the group’s
businesses to improve resource efficiency
are paying off and we remain well on track
to achieve our target to halve key
resources per unit of output by 2017.
Steady progress is being made to reduce
the amount of waste we send to landfill,
although year on year waste to landfill
increased in 2011/12, as explained in the
Environment section on page 72. Work to
drive continuous improvement in health and
safety is reflected by the good progress we
have made this year in further reducing our
number of greater than three day accidents
towards our target of zero accidents, and in
maintaining our incidence of occupational
illness cases below our target.
Further details of the group’s
performance towards its Sustainability 2017
targets are explained in the strategy section
on pages 13 to 15, the Health and Safety
section on pages 60 to 67, the
Environment section on pages 68 to 75
and on the company’s website at
www.matthey.com/sustainability.
Economic Impact and Distribution
of Value to Stakeholders
2011/12 marked another strong
performance from Johnson Matthey with
good growth across all three divisions.
The group generated an underlying
operating profit of £450.1 million and
revenue of £12.0 billion in the year. Of this
revenue, £9.3 billion represents the value
of precious metals in our products which
in many cases is passed directly on to our
customers. As a result, we may see quite
large year on year swings in the revenue line
depending on the movements in the market
prices of precious metals during the year.
Sales excluding the value of precious metals
is thus a better measure of the sales
growth in our business.
Of the £12 billion revenue, the costs
of goods and services were £11 billion
(including £9 billion for precious metals)
while our own operations created an
estimated £1 billion in underlying added
value.
Employees received the largest share
of this underlying added value, some 49%
of the total, reflecting the fact that Johnson
Matthey is a high technology company
employing many highly skilled employees
across the globe. Amounts payable to
providers of capital, i.e. our shareholders
and financiers, were 35% of the total
(including the proposed special dividend of
£212 million), and corporate income taxes
of 10% were payable to governments. In
2011/12 we retained / invested 5% in the
business for future growth and £0.6 million
was invested in our local communities.
This community investment represents
cash donations made by Johnson Matthey
and does not include the value of employee
time donated during working hours. We
are continuing to develop our systems
to capture further information on our
contribution to local communities, such
as employees’ time from volunteering.
17
Sustainability 2017
Sustainability 2017 Target Key Performance Indicators Baseline 2007 20121 Target Progress
At least double Underlying earnings 82.22 153.7 164.4
earnings per share per share (pence)
Halve carbon intensity Global warming potential 2943 156 147
(tonnes CO2 eq / £ million sales)
Achieve zero waste to landfill Waste to landfill (tonnes) 16,5553 10,708 0
Halve key resources per unit Electricity consumption 1,0983 626 549
of output (GJ / £ million sales)
Natural gas consumption 1,6043 1,012 802
(GJ / £ million sales)
Water consumption 1.4263 0.822 0.713
(m3 ’000 / £ million sales)
Achieve zero greater than Annual greater than three day n/a 2.07 0
three day accidents accident rate per 1,000 employees
Reduce occupational illness cases Annual incidence of occupational 5.34 3.5 3.7
by at least 30% by 2013/14 illness cases per 1,000 employees
1 Data presented is for the period 1st April 2011 to 31st March 2012.
2 Data presented is for the period 1st April 2006 to 31st March 2007.
3 Data presented is for the period 1st January 2006 to 31st December 2006.
4 Baseline is incidence of occupational illness cases per 1,000 employees in calendar year 2008.
Progress Towards Sustainability 2017
Local communities
0.1%
Retained by /
invested in business
for future growth
5%
Governments
10%
Providers
of capital
36%
Employees
49%
Special
dividend
Ordinary
dividend
and interest
Johnson Matthey – Distribution of
Underlying Added Value 2011/12

Group Key Performance Indicators
Johnson Matthey Annual Report & Accounts 2012
Report of the Directors – Business Review
Overview
18
Johnson Matthey uses a range of key performance
indicators (KPIs) to monitor the group’s performance over
time in line with its strategy.
These include key measures of the group’s financial
performance as well as indicators to monitor ongoing
investment in facilities and in R&D. In addition, the group
also uses KPIs to track the carbon footprint of its
operations and to measure and drive continuous
improvement in the safety, wellbeing and development
of its employees.
The KPIs we
use to monitor
and drive
performance
> These principal KPIs, together with the group’s performance against them in 2011/12,
are described below:
Sales Excluding Precious Metals
£ million
2008
1,7971,750
1,886
2,280
2,679
2009 20112010 2012
0
500
1,000
1,500
2,000
2,500
3,000
Monitoring sales provides a measure of
the growth of the business. In measuring
the growth of the group, we focus on sales
excluding the value of precious metals
because total revenue can be heavily
distorted by year on year fluctuations in
precious metal prices. Not only that, in
many cases, variations in the value of the
precious metal contained within our
products are passed directly on to our
customers.
Performance in 2011/12
In 2011/12 sales excluding precious
metals grew by 17% with good growth
across all three divisions as described in
the Financial Review of Operations on
pages 26 to 42.
Underlying Earnings per Share
pence
2008
89.689.5 86.4
119.0
153.7
2009 20112010 2012
0
40
80
120
160
Underlying earnings per share is the
principal measure used by the board to
assess the overall profitability of the group.
The following items are excluded from
underlying earnings because they can
distort the trend in measuring results:
• Amortisation and impairment of
intangible assets arising on acquisition
of businesses (acquired intangibles).
• Major impairment or restructuring
charges.
• Profit or loss on disposal of businesses.
• Tax on the above and major tax items
arising from changes in legislation.
Performance in 2011/12
This year underlying earnings per share
rose by 29% to 153.7 pence supported by
a strong performance across the group.
Further details are provided on pages 26
to 46.
Return on Invested Capital
%
In a business as capital intensive as
Johnson Matthey’s, profitability alone is
a poor measure of performance; it is
possible to generate good operating
margins but poor value for shareholders if
assets are not used efficiently. Return on
invested capital (ROIC) is therefore used
alongside profit measures to ensure focus
upon the efficient use of the group’s
assets. ROIC is defined for the group as
underlying operating profit divided by
average capital employed (equity plus net
debt). ROIC for individual divisions is
calculated using average segmental net
assets as the denominator.
Performance in 2011/12
The group’s ROIC increased from 19.4%
to 22.3%, exceeding our target of 20%.
2008 2009 20112010 2012
8
10
14
16
20
22
18
12
24
Cost of Capital
Target

19
Safety – Annual Rate of >3 Day
Accidents
per 1,000 employees
Johnson Matthey is a manufacturing
business and a significant proportion
of our employees work in production
environments with chemicals and process
machinery. Rigorous safety systems apply
across all facilities and are essential if the
group is to avoid accidents which could
cause injury to people or damage to our
property, both of which can impact the
group’s performance. We actively manage
our safety performance through monitoring
the incidence and causes of accidents that
result in more than three days lost time.
Performance in 2011/12
The group’s annual accident rate of greater
than three day accidents reduced this year
to 2.07 per 1,000 employees. Further
details of our safety improvement
programmes are provided in the Health
and Safety section on pages 60 to 67.
Occupational Health – Annual
Incidence of Occupational Illness
cases per 1,000 employees
2007*
5.5
5.8
5.2
3.5 3.5
2009 20112010 2012
0
1
2
3
4
5
6
* Calendar year.
The health and wellbeing of our employees
is a priority for Johnson Matthey and we
are committed to minimising workplace
related negative health effects. We
manage our performance in this area by
measuring the number of occupational
illness cases arising as a result of exposure
to workplace health hazards.
Performance in 2011/12
The annual incidence of occupational
illness cases was unchanged this year
at 3.5 per 1,000 employees, below our
target of 3.7 cases per 1,000 employees,
as a result of our initiatives to promote
employee wellbeing across the group.
Further details are provided in the Health
and Safety section on pages 60 to 67.
Voluntary Employee Turnover
%
Europe
4.74.8
14.9
8.5
6.4
North
America
Rest of
World
Asia Group
0
4
8
12
16
The success of Johnson Matthey is partly
dependent upon the extent that we are
able to attract and retain talented
employees. This means that being an
attractive employer is a prerequisite in
a competitive environment. We monitor
our success in retaining our staff using
voluntary employee turnover statistics.
Performance in 2011/12
In 2011/12 the group’s voluntary employee
turnover increased to 6.4% from 5.6% in
2010/11.
Capital Expenditure
£ million capex / depn (times)
0
1
2
3
2008
203.5
145.0
134.4 137.9
149.6
2009 20112010 2012
0
30
60
90
120
150
180
210
To enable the group to continue to grow,
Johnson Matthey invests significant
amounts in maintaining and improving our
existing plants and in adding new facilities
to provide additional capacity where
necessary. All new capital expenditure is
subject to detailed review to ensure that its
investment case passes internal hurdles.
Annual capital expenditure is measured as
the cost of property, plant and equipment
and intangible assets purchased during
the year. The ratio of capital expenditure
to depreciation gives an indication of the
relative level of investment.
Performance in 2011/12
In 2011/12 the group’s capital expenditure
was £149.6 million which represented
1.2 times depreciation (2010/11 1.1).
Gross Research and
Development Expenditure
£ million
2008
87.6
73.0
91.7
109.8
128.6
2009 20112010 2012
0
20
40
60
80
120
100
140
Johnson Matthey is fundamentally a
technology company. To maintain our
competitive position, we need to keep
investing in research and development.
Whilst absolute levels of research and
development expenditure do not
necessarily indicate how successful we
are, that success rapidly feeds through to
higher sales as lead times in our business
can be quite short.
Performance in 2011/12
In 2011/12 the group increased its
research and development expenditure
by 17% to £128.6 million. Further details
of the group’s research and development
activities are described throughout the
Business Review.
Sustainability – Global Warming
Potential
thousand tonnes CO2 equivalent
2007*
* Calendar year.
372
390 377
415 417
2009 20112010 2012
0
90
180
270
360
450
We measure our progress towards reducing
the carbon footprint of our operations by
looking at the group’s total global warming
potential (GWP). Total GWP is based on our
direct and indirect energy usage and CO2
equivalence which provide a strong platform
for monitoring the impacts associated with
energy use in our operations. We are
working to broaden the scope of our GWP
measurement to include all aspects of our
business and to consider the beneficial
impacts of our products and services.
Performance in 2011/12
This year the group’s GWP increased only
slightly from 415,000 to 417,000 tonnes
CO2 equivalent despite increased activity
and a full year’s contribution from two
operations acquired during 2010/11.
Further information on the group’s GWP
is given in the Environment section on
pages 68 to 75.
March
2007
March
2008
March
2009
March
2011
March
2010
March
2012
0
4
2
6

Risks and Uncertainties
Johnson Matthey Annual Report & Accounts 2012
Report of the Directors – Business Review
Overview
20
Risk Description Impact
STRATEGIC
Failure to grow in the longer The group’s existing activities are well placed to deliver Failure to identify new business areas or extend the
term, to take advantage of good growth over the coming years. New business group’s portfolio could impact the ability of the group
new opportunities or to have areas will help to sustain the group’s growth beyond to continue to grow in the long term.
sufficient capacity to meet that period.
demand

Inability to deliver anticipated The group’s strategy is based upon organic growth. Unsuccessful integration of an acquired business
benefits from acquisitions, However, acquisitions and investment in capital projects or project time or cost over-runs could result in the
capital projects and other will accelerate the achievement of our strategic goals. failure to realise the expected benefits and hence
initiatives impact the group’s results.
The realisation of anticipated benefits depends on:
• the performance of acquired businesses after
acquisition and their successful integration into the
group; and
• the delivery of capital projects on cost and to plan.

Changes to future Approximately 50% of the group’s revenue is driven by A curtailment in environmental legislation around the
environmental legislation environmental legislation, particularly legislation over world could limit the group’s growth potential and
emissions from light and heavy duty vehicles. Further undermine profit margins.
tightening of global emissions legislation generally
requires improved technological solutions and the
extension of emissions legislation to new applications
can create opportunities for the group.

Technological change Johnson Matthey operates in highly competitive markets Failure to keep up with changes in the market place
in which technology is a key to success. Constant product and to maintain our technology pipeline could result
innovation is critical to maintain competitive advantage. in a lack of competitive products and erosion of
margins and / or loss of market share.

MARKET
Global political and The global nature of the group’s business exposes it to A sustained period of economic weakness in our markets
economic conditions risk arising from economic, political and legislative change could have a material adverse effect on the group’s results.
in the countries in which we operate.
The group has no influence upon changes in inflation,
interest rates or other economic factors affecting its
business. In addition, the possibility of political unrest
and legal or regulatory changes also exist in countries
in which the group operates.
Commercial relationships The group has well established long term relationships The group has high shares in many of the markets
and reputation with a number of customers and suppliers. Maintaining in which it operates. The deterioration in its
good relationships with customers and suppliers reputation or relationship with, or ultimately
enables the group to enhance the quality of service the loss of, a key customer or supplier could have
to its customers. a material impact on the group’s results.

The effective identification and management of risks and opportunities
across the group are integral to the delivery of the group’s strategic
objectives. The group’s approach to risk management is aimed at
monitoring material issues to enable the early identification of key risks
and the taking of action to remove or reduce the likelihood of those risks
occurring and their effect.

21
Mitigation Changes since 2011 Annual Report
• Each business prepares a ten year strategic plan to review demand in existing markets The group invested £128.6 million in R&D in the
and potential new opportunities. year (2010/11 £109.8 million).
• The group continues to invest in research for new products and technologies.
• Capacity and demand considerations are included in the strategic review and The group is targeting potential new markets and
additional capacity management reviews. developing new businesses, both organically
and through acquisition.
• The group has clearly defined criteria for suitable acquisition targets and substantial There were no acquisitions in the year.
due diligence is carried out before any acquisition is made.
• A dedicated team is appointed to manage the integration process and regular The integration and performance of the Additives
monitoring of the performance of newly acquired businesses is carried out. business (formerly Intercat) during the year is
• Requirements of capital projects and other initiatives are strictly defined and subject discussed in the Financial Review of Operations
to robust approvals. on page 31.

Significant projects (such as expansion of capacity
in Emission Control Technologies, Process
Technologies and Catalysts and Chemicals) are
discussed in the Financial Review of Operations.
• The group maintains a diverse product portfolio. No change.
• Forthcoming changes in emissions legislation are well understood and our products
are designed to meet these increased requirements.
• Profit margins can be maintained with continuous improvements in technology to
reduce the cost and improve the effectiveness of our products.
• Regular reviews are undertaken to monitor areas of new potential legislation.
• Lobbying activities are undertaken where appropriate to improve the understanding
of regulatory and legislative bodies.
• The group continues to invest in its products through R&D (including through No change.
our Technology Centres around the world) and as per our ten year technology plan.
• There is constant innovation and development in cooperation with our key customers.
• The group invests in its people to ensure that it maintains a high level of relevant
scientific expertise.
• The group maintains a balanced portfolio of businesses and serves a wide range The group’s strong performance this year reflects
of diverse customers which reduces the impact of a change to any one market. the continuing recovery of its businesses since
• Management continuously monitors the performance of our businesses across the the recession in the group’s developed markets.
world at both business and group level.
• Our cost base contains a significant variable element and is flexible to changing Given the continued uncertainty in Europe (offset
political and economic conditions. partially by the improved outlook in the US) we
have concluded that this risk has increased since
last year.
• Some of the group’s key relationships are supported by long term contracts, notably No change.
the group’s relationship with Anglo American Platinum.
• A broad customer base is maintained to prevent the group from becoming unduly
dependent on any single customer.
• Industry developments and market shares are constantly monitored.
• We actively manage our customer relationships at all levels to ensure a high quality
of service.
The board has overall responsibility for
ensuring that risk is effectively managed
across the group. However, the board has
delegated to the Audit Committee the
responsibility for reviewing the effectiveness
of the group’s system of internal control
and procedures for the identification,
assessment, management, mitigation and
reporting of risk.
The group has in place a process for
the continuous review of its risks. As part of
that process, each business reviews its risks
and its mitigation strategies and actions.
Each risk is allocated an owner who has
the authority and responsibility for assessing,
monitoring and managing it. The most
significant risks identified are collated into
a Group Risk Register. The Group Risk
Register is reviewed by the Chief Executive’s
Committee. Each individual risk is considered
and the status and progression of mitigation
actions and plans are monitored. The Group
Risk Register is reviewed by the board
twice a year.
The table below sets out what the
board believes to be the principal risks and
uncertainties facing the group, the mitigating
actions for each and an update on any
change in the profile of each risk during
the course of 2011/12.
In view of the group’s increased
focus on the cost of rare earth materials
and the establishment this year of a
strategy to manage movement in their
prices (as described in the Financial
Review of Operations section on page 29),
we have concluded that the risk associated
with movements in raw material prices has
decreased. As a result, we have removed
this from our principal risks this year.

Risk Description Impact
FINANCIAL
Pension scheme The group operates a number of defined benefit pension Actuarial deficits could be adversely affected by
funding schemes, some of which are in deficit. changes in interest rates, the market values of
investments, as well as inflation and increasing
longevity of the schemes’ members. This may
result in greater cash contributions being required.

OPERATIONAL
Changes to health, safety, In common with similar manufacturing companies, the Changes made to applicable laws, regulations or
environmental and other group operates in an environment that is subject to standards could adversely impact the group’s
regulations and standards numerous health, safety and environmental laws, manufacturing capability or indeed, the marketability
regulations and standards. of our products.

Availability of raw materials The group uses many raw materials within its Disruption to the supply or a change in the group’s
manufacturing processes. Several raw materials are ability to access sufficient stocks of these raw
available from only a limited number of countries materials, most notably platinum group metals, rare
and / or suppliers. earths or narcotic raw materials, could adversely
affect the group’s profit. This may be due to increased
prices or because our ability to manufacture and
supply product to customers may be impacted.

Employees and the The group relies upon its ability to recruit, train and The departure of senior management or the lack
recruitment and retention develop employees around the world with the necessary of an appropriately skilled workforce could adversely
of high quality staff range of skills and experience to meet its stated impact the group’s ability to perform in line with
objectives, including in relation to business growth. expectations.

The existing management team has many years of
experience at Johnson Matthey, operating in the markets
and developing the technologies in which the group
maintains a presence.

Security On any given day the group has significant quantities A material loss due to a breach in the group’s security
of high value precious metals or highly regulated measures, including theft or fraud, could be significant
substances on site and in transit, the security of which to the group’s performance.
is critical.
Intellectual property (IP) The group operates in markets in which the generation Failure to establish the group’s IP rights or to identify
and application of technology and IP allows an third parties’ IP rights could undermine the group’s
advantage to be maintained. Careful monitoring of competitive advantage particularly given the group’s
competitors’ IP is required to ensure that breaches expansion into new markets. Alternatively, not
of their rights are not made by the group. noting the expiration of patents held by third parties
could mean the loss of potential business opportunities.

Risks and Uncertainties continued
Johnson Matthey Annual Report & Accounts 2012
Report of the Directors – Business Review
Overview
22

23
Mitigation Changes since 2011 Annual Report
• Where actuarial deficits exist the group has agreed deficit recovery plans. No change.
• The group works with the fiduciary committees and trustee boards of each of its
pension schemes around the world to ensure that an appropriate investment strategy
is in place. This includes de-risking the schemes as funding levels improve.
• Where possible, appropriate pension scheme assets are held to match movements
in the schemes’ liabilities.
• We monitor and proactively manage the rate at which the pension liability grows and
consider liability management exercises as appropriate.
• The group is reviewing its options with regard to future pension provision for
employees worldwide.
• More detail of the group’s pension schemes is included in note 14 in the Accounts.
• The group carries out regular internal reviews to ensure compliance with current No change.
group policies and applicable laws, regulations and standards such as ISO 14001
and OHSAS 18001. Our quality standards are also scrutinised externally by
customers, suppliers and the relevant authorities.
• We work with external consultants to understand better our regulatory responsibilities
in the territories in which we operate.
• Changes in legislation are carefully monitored and if required, the composition of our
products is amended to comply with latest legislation.
• We are committed to proactive communication and to building open relationships with
the authorities and relevant legislative bodies, both directly and through the relevant
trade associations.
• Although most of the world’s platinum is mined in South Africa, the group has access No change.
to world markets for platinum and other precious metals and is not dependent on any
one source for obtaining supplies.
• Appropriate sourcing arrangements are in place for other key raw materials to ensure
that the group is not dependent on any one supplier.
• Where possible the group enters into fixed price contracts for key raw materials.
• We work closely with key suppliers to ensure availability, including through audits,
benchmarking and specific risk reviews.
• We monitor forecast requirements on a regular basis and hold buffer stocks where
necessary.
• We look to use alternative raw materials where appropriate.
• Global training and management development programmes are in place, including No change.
training of manufacturing leaders to run our operations in a consistent and efficient
way through the Manufacturing Excellence programme.
• Regular reviews of management succession plans are carried out.
• Global remuneration policies are in place to ensure appropriate rewards to motivate
and retain staff.
• We undertake a continuous assessment of the skills required within the group and
action plans are put in place to address identified gaps.
• Succession planning is closely monitored by the Nomination Committee and
Management Development and Remuneration Committee (MDRC).
• The group has highly developed security, assay and other process controls. No change.
• Annual security audits are carried out across the group.
• Insurance cover is maintained for losses from theft or fraud.

• The group has established policies and procedures for registering patents and for No change.
monitoring its existing patent portfolio and those of third parties.
• We defend infringement claims and challenge new patents where it is appropriate to do so.
• We continuously evaluate operating restrictions and opportunities available to us
through the use of our IP and know how.
• A substantial part of the group’s IP is know how and this is protected through
non-disclosure agreements and other legal measures.
• We restrict internal and external access to IP and know how as necessary.
• We complete security checks to safeguard both our tangible and intangible assets.
• Our investment in technical developments mitigates the risks to our IP and know
how to some degree.

Johnson Matthey Annual Report & Accounts 2012
Report of the Directors – Business Review
Financial
24
Linking
profitability
and
sustainability
Financial
This section details the financial performance of the group and its three divisions
during the year.
> Davy Process Technology
When a chemical manufacturer decides to
build a new plant or make a new product it
wants to operate the plant and make the
product in the most cost effective and
environmentally friendly way. Davy Process
Technology (DPT) develops processes that
chemical manufacturers can use to help them
design and build their plant and then run it at
optimum efficiency. DPT licenses this process
technology to its customers and works with
them as they use it to guide the construction
and operation of their plant. In effect, DPT
provides its customers with the flowsheet,
or blueprint, for their process.
Continued investment in R&D is vital to
DPT’s success, enabling it to maintain a
portfolio of highly advanced chemical process
technologies. During 2011/12 DPT secured
14 licences and commissioned five new
plants. Its engineers are now working with
Nanjing Bluestar New Chemical Material Co.
Ltd. in China to commission a new plant
(pictured) for manufacturing three products –
tetrahydrofuran, butanediol and gamma
butyrolactone which have uses as solvents
and in the production of polymers to make
items such as training shoes, car parts,
Spandex fibres and in the pharmaceutical
industry. This is a second plant for Nanjing
Bluestar, the first having been successfully
commissioned by Nanjing Bluestar and DPT
in 2009.
Delivering Value

Contents
26 Financial Review of Operations
26 Environmental Technologies
34 Precious Metal Products
40 Fine Chemicals
43 Financial Review
47 Treasury Policies
47 Liquidity and Going Concern
. Research and development is vital to enable DPT to maintain
its portfolio of advanced technologies.
. On site at the new manufacturing plant.

Financial Review of Operations
Environmental Technologies
Johnson Matthey Annual Report & Accounts 2012
Report of the Directors – Business Review
Financial
26
Key Statistics
Capital expenditure £97.1 million
Capex / depreciation 1.2
Average invested capital £1,492 million
Employees 5,640
Year to 31st March % at
2012 2011 % constant
£ million £ million change rates
Revenue 3,255 2,708 +20 +20
Sales excluding precious metals (sales) 1,876 1,566 +20 +20
Underlying operating profit 211.8 164.7 +29 +29
Return on sales 11.3% 10.5%
Return on invested capital (ROIC) 14.2% 11.5%
Creating
products that
benefit the
environment
Process Technologies
21%
Fuel Cells
1%
Emission Control
Technologies –
Light Duty
52%
Emission Control
Technologies –
Heavy Duty Diesel
23%
Emission Control
Technologies –
Stationary
Emissions Control
3%
Sales
Europe
35%
North America
31%
China
9%
Rest of Asia
11%
Rest of World
14%
Sales by Destination
2009* 2010 2011 2012
1,135
1,252
1,566
1,876
0
500
1,000
1,500
2,000
Divisional Sales
£ million
2009 2010 2011 2012
124.3 120.9
164.7
211.8
0
50
100
150
200
250
Divisional Underlying Operating Profit
£ million
* Excluding inter-segment sales.

Description of the Business
Environmental Technologies Division’s
products and services are used globally in
applications which benefit the environment.
It supplies catalysts and technologies
which contribute to pollution control,
cleaner fuels, greener power and the more
efficient use of hydrocarbon resources. It
comprises of three businesses:
Emission Control Technologies (ECT)
ECT consists of Johnson Matthey’s global
autocatalyst, heavy duty diesel and
stationary emissions control businesses.
We are a world leading manufacturer of
catalysts for vehicle exhaust emission
control and catalyst systems for the
reduction of emissions from industrial
processes.
ECT’s products are used globally to
reduce emissions from vehicles and other
pollution sources to ensure they meet
legislated environmental limits. Its products
are fitted to about a third of all cars
produced in the world and, since their
introduction in 1974, these products have
had a major impact on air quality across
the globe, preventing many millions of
tonnes of pollutants from reaching the
atmosphere.
ECT’s manufacturing plants are
located in the UK, Germany, Macedonia,
Russia, USA, Mexico, Argentina, South
Africa, Japan, Malaysia, India, China and
South Korea. R&D facilities are in the USA,
UK, Germany, Sweden, Japan, China,
South Korea and Brazil.
Process Technologies
Process Technologies manufactures
speciality catalysts, absorbents and
additives for the methanol, ammonia,
hydrogen, gas / coal to products, oil
refineries and gas processing industries.
These catalysts allow industrial processes
to operate using less energy and to
convert raw materials to desired products
more efficiently.
Davy Process Technology (DPT)
develops chemical process technologies
and licenses them to customers in the oil,
gas and petrochemical industries. Its
extensive portfolio includes a number of
technologies which incorporate sustainable
feedstocks such as waste fats and oils.
Tracerco is a specialist measurement
business that provides process diagnostic
services through a broad range of
analytical techniques and instrumentation.
Process Technologies serves
customers around the world and has
manufacturing sites in the UK, USA, India
and China, supported by technology
development facilities in the UK and the
US and technical offices in all of the key
markets worldwide.
Fuel Cells
Johnson Matthey has a world leading
position in the development and
manufacture of catalysts and catalysed
components for fuel cells, a technology for
generating low carbon power.
The business has the world’s largest
fuel cell component manufacturing facility
in Swindon, UK for the production of
membrane electrode assemblies (MEAs)
for hydrogen and methanol fuelled systems
and is backed by extensive research and
development efforts.
27
Fuel cells are widely recognised as an
emerging technology to power a range of
equipment from cars and buses to laptops
and mobile phones. Johnson Matthey Fuel
Cells is at the leading edge of fuel cell
component development.
Performance in 2011/12
Environmental Technologies Division
performed well in 2011/12 achieving
good growth throughout the year. Revenue
grew 20% to £3,255 million; sales were
20% ahead at £1,876 million and
underlying operating profit was 29% up
at £211.8 million.
Environmental Technologies Division’s
return on sales for the year increased by
0.8% to 11.3%. ECT’s overall return on
sales improved with higher plant utilisation
and as a result of lower costs following the
closure of its Brussels plant. However,
return on sales was impacted by £15 million
of higher costs for rare earth materials
incurred in the first half of the year. This
was resolved satisfactorily in the second
half. Process Technologies’ return on sales
was slightly ahead of last year, benefiting
from the strong performance from our
higher margin DPT business.
The division’s ROIC improved from
11.5% to 14.2% and is expected to
improve further as plant utilisation rates
increase.
Strategy

Maintain differentiation
through technology by
investing in R&D

A deep understanding of
markets and customers

Manufacturing Excellence

Deliver superior growth
The division is focused on maintaining differentiation through technology by investing
in R&D. This investment is vital to ensure Environmental Technologies can continue to
develop high performance leading edge catalysts and technologies for its customers.
A deep understanding of markets and customers enables the division to provide the
right solutions for its customers in evolving markets, for example those driven by
tightening legislation. In addition, the purchase of its catalysts or technologies is often
part of significant investment decisions at its customers and so strong relationships and
a good understanding of customers’ needs are crucial to the division’s success.
Manufacturing Excellence is an important element of the strategy. Many of the division’s
activities involve manufacturing products for its customers and it is focused on running its
plants at optimum efficiency to produce the highest quality products at minimum
operating cost.
The division aims to deliver superior growth in markets that are driven by global trends,
such as environmental regulation, increasing wealth and natural resource constraints,
and where applying its expertise in leading edge catalysis and technologies can generate
growth at rates ahead of industry baselines.
Environmental Technologies supplies catalysts
and technologies which contribute to pollution
control, cleaner fuels, greener power and the
more efficient use of hydrocarbon resources.

Our sales in Europe of £588 million,
which represent 61% of our light duty
catalyst sales, increased by 8%, ahead of
the growth in vehicle production which was
only up 0.5%. Our sales benefited from
growth in the proportion of diesel vehicles
produced in Western Europe which
represented 55% of total light vehicle
production, up from 54% last year. Sales
also benefited from the full fitment of diesel
particulate filters (DPFs) to light commercial
vehicles in Western Europe, completing
the process of fitment of these products
to all light duty diesel vehicles in the region.
As a result of the complex catalyst systems
required to meet European diesel emissions
standards, a diesel vehicle currently
represents approximately five times the
catalyst value of an equivalent gasoline
vehicle for Johnson Matthey. Catalyst value
will increase further with the introduction of
Euro 6 light duty diesel emissions standards
in 2014, which will require additional catalyst
fitment to meet tighter NOx standards.
During the year our European sales also
benefited from our strong market share with
some of the most successful car companies
in the region and from the introduction of
higher technology products. These
products offer our customers opportunities
to reduce costs through advanced
technology, including the more efficient use
of raw materials.
On 31st January 2011 ECT entered
into consultation with the employees at
its inefficient Brussels facility regarding its
closure. The plant ceased production in
July 2011 and all production was
transferred to other ECT sites with annual
cost savings of approximately £18 million
per year.
Despite the challenges presented by
the Japanese earthquake and tsunami,
the floods in Thailand and slower growth
in China, our Asian light duty catalyst
business grew strongly with sales up 20%
to £201 million. Light duty vehicle
production in the region in 2011/12 grew
by just over 1%. However, our sales grew
at a much faster rate as the result of
growth in our market share in many parts
of the region and a strong recovery in our
Japanese business in the second half with
robust demand from the original equipment
manufacturers (OEMs) in Japan once their
factories were back on line. With continued
economic expansion, increasing disposable
income and tightening legislation across
the region, Asia should remain a growth
engine for ECT in the years ahead.
Financial Review of Operations continued
Environmental Technologies continued
Emission Control Technologies
Emission Control Technologies’ sales
grew by 21% from £1,218 million to
£1,470 million.
Light Duty Catalysts
Our light duty catalyst business, which
represented 66% of ECT’s sales in the
year, grew well with sales up 10% to
£969 million and operating profit up by
a similar percentage.
In Johnson Matthey’s financial year to
31st March 2012, global light duty vehicle
sales grew by 3% to 76.1 million vehicles.
Global production grew steadily, by 2.5%,
with a strong recovery in North America
throughout the year, a moribund market in
Europe which declined in our second half,
and slight growth in Asia, albeit affected in
the first half by the Japanese earthquake
and tsunami and in the second half by the
floods in Thailand. In China, growth in car
production was lower than last year, but
still increased by 5%.
Johnson Matthey Annual Report & Accounts 2012
Report of the Directors – Business Review
Financial
28
2009 2010 2011
North America Europe Asia Global
2012 2013 2014 2009 2010 2011 2012 2013 2014 2009 2010 2011 2012 2013 2014 2009 2010 2011 2012 2013 2014
Source: IHS Automotive (April 2012)
8.6
11.9 12.9
14.7 15.4 16.5 16.5
19.0 20.1 19.0 19.6
28.9
21.0
37.1 37.0
43.040.9
45.7
59.5
74.4
81.2
76.8
85.4
91.0
0
10
20
30
40
50
60
70
80
90
100
Light Duty Vehicle Production Outlook – 2009-2014 (calendar years)
million
Estimated Light Vehicle Sales and Production
Year to 31st March
2012 2011 %
millions millions change
North America Sales 15.6 14.5 +7.6
Production 13.6 12.4 +9.7
Total Europe Sales 19.0 18.7 +1.6
Production 19.8 19.7 +0.5
Asia Sales 30.8 30.5 +1.0
Production 37.7 37.2 +1.3
Global Sales 76.1 73.9 +3.0
Production 77.7 75.8 +2.5
Source: IHS Automotive
Johnson Matthey’s Light Duty
Vehicle Catalyst Sales by Region
2012 2011 %
£ million £ million change
Europe 588 544 +8
Asia 201 168 +20
North America 180 167 +8
Total 969 879 +10

In North America the light duty
vehicle market showed good growth with
production in the region up nearly 10% in
our financial year. Our sales grew at a
slightly lower rate, up 8% to £180 million,
as our North American Japanese transplant
customers, where we have a higher market
share, were impacted by supply chain
issues following the Japanese earthquake
and tsunami and flooding in Thailand.
Since mid 2010, prices of rare earth
raw materials have increased dramatically
following the imposition of export quotas
by the Chinese government. The main rare
earth material that we use is cerium oxide,
which is used to provide oxygen storage
capabilities in catalysts for gasoline vehicles.
Rare earth prices peaked in mid 2011 and,
although now well below previous highs,
prices remain significantly above those in
the first half of 2010. In response to this
situation, ECT took steps to reduce the
impact of rising rare earth material costs
by a combination of thrifting, substitution
for cheaper raw materials and negotiating
price surcharges with its customers. Due
to the magnitude and speed of the cost
increases, ECT’s results were adversely
affected by around £5 million in 2010/11
and £15 million in the first half of 2011/12.
However, by the second half of 2011/12
the effects of higher rare earth prices were
fully mitigated and any future increases
should no longer impact the business.
Staying Ahead of the Legislation
Catalysts are now routinely fitted to vehicles to control the emissions of pollutants
including carbon monoxide, nitrogen oxides, unburnt hydrocarbons and soot.
However, legislators are now starting to address the issue of greenhouse gas
emissions from vehicles too, with Europe, North America and Japan all proposing
limits. In Europe, for example, a carbon dioxide (CO2) emissions limit of 95g/km by
2020 has been proposed.
One method of decreasing CO2 emissions (and improving fuel economy) is to
use the waste heat in the exhaust to promote a chemical reaction between exhaust
gases and some added hydrocarbons to generate a higher calorific value fuel that
can be fed back into the engine to help combustion efficiency.
One approach is to use a catalyst promoted steam reforming reaction at
elevated temperature to generate a hydrogen rich fuel to feed back into the engine.
Given that the exhaust contains both steam and waste heat, the steam reforming
reaction is an attractive technology for tackling CO2 emissions while at the same
time improving fuel economy.
Johnson Matthey, in collaboration with the University of Birmingham in the UK,
has been studying systems to generate hydrogen mixtures from exhaust gas and
added fuel (e.g. gasoline), demonstrating feasibility both in the lab and on small
single cylinder engines. We are now working to develop this further, with partners
including Ford, Jaguar Land Rover and Cambustion, as part of a project that is
partially funded by the UK’s Technology Strategy Board. The project has a number
of themes with an overall goal of providing a series of measures to reduce CO2. Our
work is focused on demonstrating that a catalytic hydrogen generator (reformer)
can be integrated with a four cylinder gasoline engine to deliver a reduction in CO2
emissions of up to 4%.
> How Sustainable Are Our Products?
It takes raw materials and energy to make a catalytic converter for a car but at what
point do the environmental benefits of a catalyst outweigh the environmental costs of
producing it? A Johnson Matthey team embarked on an analysis to understand and
better quantify the sustainability benefits of one of its environmental technologies.
The tool chosen was quantitative life cycle assessment (LCA), which allows the
impact of a product to be traced during its whole life. A life cycle experts group was
formed, made up of 12 people from across Johnson Matthey’s businesses. The team
then selected one of the company’s core products – a catalytic converter for a diesel
powered car – for analysis.
The study was highly insightful and informative and generated several key
learning points for the company. With the help of the LCA tools, Johnson Matthey
aims to better understand the environmental and health benefits of other key products
and develop new technologies with enhanced sustainability benefits in the future.
� Read the full case study at www.matthey.com/sustainability.
Case Study
29
Innovation in Action

Financial Review of Operations continued
Environmental Technologies continued
Heavy Duty Diesel Catalysts
Sales of heavy duty diesel (HDD) catalysts
for both on road and non-road applications
grew strongly again this year, up 48% to
£438 million and operating profit more than
doubled.
Production of heavy duty diesel trucks
in North America continued to grow
robustly throughout the year, increasing
by 50% to 452,000 vehicles as trucking
companies replaced their ageing fleets.
In Europe, truck sales recovered last year
from the global downturn and production
growth this year remained robust at 7%.
Johnson Matthey Annual Report & Accounts 2012
Report of the Directors – Business Review
Financial
30
Johnson Matthey’s Heavy Duty Diesel
Vehicle Catalyst Sales by Region
2012 2011 %
£ million £ million change
North America 295 194 +52
Europe 116 91 +27
Asia 27 11 +137
Total 438 296 +48
2009 2010 2011 2012 2013 2014 2015 2016 2017
Source: LMC Automotive (April 2012)
0
50
100
150
200
250
300
350
400
450
EU Truck Sales
thousands
Heavy Duty Diesel Vehicle Sales Outlook (calendar years)
2009 2010 2011 2012 2013 2014 2015 2016 2017

0
100
200
300
400
500

USA Class 4-8 Truck Sales
thousands
US 07
0
Euro IV Euro V Euro VI / US 2010
regulations
Deeper Knowledge of NOx Removal Catalysts
Johnson Matthey’s range of emission control catalysts includes vanadium based
products that use selective catalytic reduction (SCR) to control oxides of nitrogen
(NOx) emissions from industrial powerplants. In order to further enhance our
knowledge of these SCR DeNOx catalysts and the chemistry of NOx removal, we
have turned to an advanced characterisation technique which allows us to probe
our catalysts at the atomic scale.
This technique, called solid state nuclear magnetic resonance spectroscopy
(SSNMR), has been available to Johnson Matthey for a number of years through its
collaboration work with leading universities. Recently however, via a knowledge
transfer partnership with the University of Warwick in the UK, we have brought the
technique in house, thus enabling us to study a wider range of advanced materials
in a faster time. We have successfully used SSNMR to study vanadium based SCR
DeNOx catalysts and improve our understanding of the molecular environment of
the catalytically active vanadium species. In addition, we continue to work with
scientists at the University of Warwick to perform even more advanced
spectroscopic analyses on our materials. This information is proving invaluable in
helping us to develop novel, higher performance catalysts to tackle harmful NOx.
In North America our sales grew in
line with truck production, up 52% to
£295 million as we maintained our strong
market share. In Europe our sales were up
27% to £116 million, well ahead of growth
in truck production in the EU. However,
our European sales also include export
sales of around £5 million to Brazil, where
Euro V legislation started at the beginning
of 2012, and strong sales into Eastern
European markets. HDD catalyst sales in
Innovation in Action

Japan grew from a low base to £27 million,
as new legislation requiring the fitment of
DPFs came into force. The implementation
of Euro IV legislation in China has been
delayed until mid 2013 due to issues with
the supply of low sulphur diesel fuel.
However, very low level sales of HDD
catalysts have commenced to OEMs in both
China and India as truck manufacturers
prepare for future legislation. At only Euro IV
equivalent and with relatively simple
engines, these markets are likely to have
lower technology requirements than
Europe or North America and thus we are
likely to face much more competition from
our existing competitors and local players.
During the year sales also commenced
to non-road OEMs, such as manufacturers
of construction, mining and agricultural
equipment, in the USA and Europe where
legislation requiring the use of emission
control catalysts is being phased in
between 2011 and 2015. Sales of HDD
catalysts to non-road customers grew
from a low base, contributing £20 million
in the year.
Towards the end of the year ECT
commenced a major expansion project
at its plant in Macedonia that will double
capacity at the site. Plans were also
approved to increase our DPF production
capacity at Royston, UK. Both of these
projects will provide additional capacity for
the high technology products required for
tighter European light and heavy duty
diesel legislation, commencing in 2014.
In addition, during the year the business
has added capacity in China for upcoming
HDD requirements and expanded its plants
in India and Malaysia to serve growth in car
production in India and South East Asia.
Process Technologies
Process Technologies delivered good growth
in the year with sales 19% up at £401 million.
The business benefited from another
excellent year from DPT and from a full
year’s contribution from the Additives
business (formerly Intercat), which was
acquired in November 2010 and supplies
speciality products to the petroleum
refining industry. Operating profit was also
well ahead of last year, boosted by the very
strong performance from the higher margin
DPT business.
Estimated HDD Truck Sales and Production
Year to 31st March
2012 2011 %
thousands thousands change
North America Sales 405.2 287.4 +41.0
Production 451.8 301.0 +50.1
EU Sales 298.7 257.4 +16.0
Production 386.4 360.2 +7.3
Source: LMC Automotive
> From Waste Stream to Commercial Byproduct
In 2004 a water treatment facility at our Clitheroe plant in the UK began operating.
At that time, the cost of disposing of waste sodium nitrate was a significant financial
overhead. Today, much of that waste stream has become a commercial product,
Nitratrete.
A programme of market research and innovation followed the opening of the
water treatment facility and customers for the waste stream were identified.
Since then, Clitheroe has worked closely with its customers to improve the
quality and consistency of the product and to develop other applications.
Significant financial benefits have been achieved by avoiding disposal costs of
unsold byproduct and generating revenue from sales. The environmental benefits are
equally clear. By 2017, the target is to commercialise 90% of the sodium nitrate
produced at Clitheroe. This is a powerful example of a win-win for sustainability –
reducing waste and increasing profit.
� Read the full case study at www.matthey.com/sustainability.
31
In the Ammonia, Methanol, Oil and
Gas (AMOG) business, which includes the
Additives business, sales of its catalysts,
absorbents and speciality additives were
27% ahead at £256 million. Excluding
Additives, sales would have been 3% up.
Catalyst sales to ammonia customers
grew well in the year and were 8% ahead
at £45 million, however as we expected,
sales of methanol catalysts were lower
at £42 million, 14% down on those in
2010/11 which saw commissioning of a
number of new plants in China and the
Middle East. Sales of catalysts to hydrogen
customers grew strongly again this year,
up 40% to £67 million. Legislation requiring
lower sulphur levels in fuels and the
continued trend of processing dirtier,
heavier crude in refineries supported
demand for hydrogen which in turn
generated an increase in our sales.
Demand for gas purification products,
used to remove contaminants such as
sulphur and mercury from gas streams,
was impacted, with sales 33% down on
last year, as the business continued to feel
the effect of delayed investment in large
gas processing projects.
The Additives business made a good
first full year’s contribution to AMOG and is
performing ahead of our expectations at
the time of acquisition. We are already
leveraging technology synergies between
our additives and refinery catalysts and are
drawing on the customer relationships in
both businesses to create new opportunities
for the combined product range.
Case Study

Financial Review of Operations continued
Environmental Technologies continued
Process Technologies continued to
benefit from energy security concerns in
China which are driving projects to
monetise coal reserves in the country. This
has supported sales of our catalysts for
producing both chemicals and substitute
natural gas (SNG) from coal. In other parts
of the world, particularly the USA, the
extraction of shale gas has contributed to
lower gas prices compared with those of
oil. This provides new opportunities for our
syngas catalysts.
The business saw continued success
in the development of catalysts for gas to
liquids (GTL) applications. It signed a ten
year agreement with CompactGTL to
develop, manufacture and supply catalysts
for its modular GTL commercial scale
plants which can be used for remote
oilfields in onshore and offshore locations
to convert gas into sulphur free liquid fuels.
DPT had an excellent year, building
on its strong performance in 2010/11.
This higher margin business delivered sales
of £94 million, which were 42% ahead of
prior year, and secured licence and
engineering contracts for 14 new plants
across its portfolio of technologies.
Increased demand for petrochemicals in
China continued to drive growth in DPT
and the business won contracts for ten
plants there, including two SNG plants,
four methanol plants and two oxo alcohols
plants. Outside of China, DPT also secured
licences for speciality chemicals plants in
Malaysia and in the Netherlands, and oxo
alcohols plants in France and Saudi Arabia.
In recent years a significant amount of
chemical manufacturing capacity has been
installed, especially in China, and this has
benefited DPT. We expect that the number
of new plants and hence licences available
to DPT will be maintained in 2012/13 but is
likely to reduce thereafter. Despite this, the
outlook for DPT remains positive as global
drivers, such as increasing wealth in
emerging markets and energy security,
support demand for its technologies.
Furthermore, the business continues to
invest in the research, development and
commercialisation of new process
technologies, including those which utilise
sustainable feedstocks, to maintain its
leading global position. This year saw DPT
commercialise three new technologies
which now are under construction, including
a process which converts waste oils and
fats into second generation biofuels.
Johnson Matthey Annual Report & Accounts 2012
Report of the Directors – Business Review
Financial
32
AMOG
64%
DPT
23%
Tracerco
13%
Process Technologies’ Sales
2008 2009 2010 2011 2012
0
12
15
6
9
3
Methanol Oxo alcohols SNG Butanediol Other
Davy Process Technology
– Projects Awarded
An Insight on the Inside
The manufacture of catalysts frequently involves the processing, blending and mixing
of fluids or slurries with complex flow behaviours (or rheologies). Achieving a well
mixed combination of materials in our catalyst manufacturing processes is critical to
ensuring final product quality and optimum catalytic performance in our customers’
applications. Fundamental research at the laboratory scale, using representative
fluids and advanced experimental techniques, has been used to build our knowledge
of the types of non-ideal mixing that can occur.
We have also used a technique called electrical resistance tomography (ERT) on
our manufacturing plants to compare different mixing system designs. ERT provides
us with a picture of how well the contents of our reaction vessels are mixing. We
have used the technique to identify best mixing system designs and define best
practice which has been implemented on new manufacturing plants and retrofitted to
our existing operations. Through ERT we are gaining an invaluable insight into what is
happening inside our vessels which enables us to optimise our mixing systems and
thus ensure the highest catalyst performance for our customers.
Innovation in Action

Tracerco recovered well after difficult
trading conditions in 2010/11. Its sales in
2011/12 were 22% ahead of prior year as
the business benefited from renewed
activity in global oil and gas markets
supported by the high oil price. This has
encouraged oil and gas companies to
exploit more difficult to recover resources
and has boosted demand for Tracerco’s
specialist technologies.
Fuel Cells
Our Fuel Cells business was adversely
affected by a slowdown in demand for
stationary combined heat and power units
this year as our customers delayed their
product deployment programmes.
The development of fuel cell technology
for transport applications, especially cars,
continues. Advances in both vehicle
development and hydrogen fuelling
infrastructure around the world remain on
track for initial market introduction of fuel
cell powered vehicles within around five
years. Components for automotive
applications remain an important
opportunity for Johnson Matthey and we
have continued to increase our investment
in R&D for automotive applications during
the year.
As a result of slower demand and our
increased R&D expenditure, the net expense
of our Fuel Cells business increased by
£4.3 million to £9.2 million this year.
Global drivers, particularly those
relating to environmental and energy
security issues, continue to support
interest in fuel cell technology for transport
and for heat and power applications in
buildings. Furthermore, our strong
relationships with system developers and
our investment in manufacturing
infrastructure position us well in the
developing fuel cell market where high
performance platinum group metal
catalysts and technology are key.
. Development of new process catalysts at our Billingham,
UK facility.
. Fuel cell catalyst testing at the Johnson Matthey
Technology Centre in Sonning, UK.
Looking Inside a Fuel Cell
Collaborating with other leading players has always been an important element of
our R&D programmes, giving us the opportunity to work with the world’s smartest
scientists and the very latest technology and equipment. In an extension to our
collaborations, Johnson Matthey has established a deeper partnership with
Cambridge University in the UK, sponsoring its chemical engineering activities,
providing financial support and seconding two Johnson Matthey scientists to work
at the university.
For the last four years the company has been closely involved with research
and teaching activities at the Department of Chemical Engineering and
Biotechnology at Cambridge University. Current research activities include magnetic
resonance imaging of catalysts and reactions, developing spectroscopy and
microscopy techniques to study materials and catalysts, and research into fuel cells
through the use of microfluidic devices.
A microfluidic device is so called because it can be built at a small scale to
mimic a larger real life system, such as a fuel cell; this allows precise control of
flows within the device and enables the device to be used in conjunction with
analytical equipment, which gives us an insight into what is actually going on inside
the device. In our work with Cambridge University we are looking at fuel cell devices
for simultaneous production of chemicals and power generation, known as
cogeneration, and, through the use of these techniques, we are gaining new
knowledge of the detailed chemical workings of a fuel cell.
Innovation in Action

Financial Review of Operations continued
Precious Metal Products
Johnson Matthey Annual Report & Accounts 2012
Report of the Directors – Business Review
Financial
34
Key Statistics
Capital expenditure £31.6 million
Capex / depreciation 1.4
Average invested capital £341 million
Employees 2,894
Year to 31st March % at
2012 2011 % constant
£ million £ million change rates
Revenue 9,841 8,270 +19 +20
Sales excluding precious metals (sales) 582 541 +8 +8
Underlying operating profit 200.8 172.9 +16 +16
Return on sales 34.5% 31.9%
Return on invested capital (ROIC) 58.9% 55.9%
Adding
value to
precious
metals
Manufacturing –
Catalysts and Chemicals
30%
Services
34%
Manufacturing –
Noble Metals
21%
Manufacturing –
Colour Technologies
15%
Sales
Europe
35%
North America
36%
China
8%
Rest of Asia
12%
Rest of World
9%
Sales by Destination
2009* 2010 2011 2012
447 454
541
582
0
150
300
450
600
Divisional Sales
£ million
2009 2010 2011 2012
143.0
116.7
172.9
200.8
0
50
100
150
200
250
Divisional Underlying Operating Profit
£ million
* Excluding inter-segment sales.

Description of the Business
Precious Metal Products Division (PMPD)
adds value to precious metals. Its wide
ranging activities comprise two main areas:
Services businesses and Manufacturing
businesses.
Services Businesses
The activities of our Services businesses
comprise the marketing, distribution,
refining and recycling of platinum group
metals (pgms) and the refining of gold and
silver. As well as serving their external
customers around the globe, the Services
businesses also provide a critical service to
businesses in the Johnson Matthey group
and their customers. Around 70% of
Johnson Matthey’s products and businesses
involve pgms and so the sourcing and
recycling of them is critical to the continuity
and profitability of the group. Our Services
businesses comprise two areas:
Platinum Marketing and Distribution
This includes our worldwide platinum
marketing and distribution activities.
Marketing is headquartered in Royston, UK
with support facilities in Philadelphia, USA
and Hong Kong. We are the world’s
leading distributor of pgms and the sole
marketing agent for Anglo American
Platinum, the world’s largest producer of
platinum.
Refining
Johnson Matthey is a leader in the
recycling and refining of precious metals.
Our refining and recycling operations
provide a vital service to ensure these
valuable natural resources are recycled and
reused as efficiently and sustainably as
possible.
Our Pgm Refining and Recycling
business recovers pgms from spent
catalysts and other secondary materials
and refines primary pgms from global
mining operations. It has facilities in the UK
and USA.
Our Gold and Silver refining business
comprises our gold and silver refining and
bullion manufacturing operations. The
business serves the world’s mining
industries and recycles secondary scrap
material. Its operations are located in the
USA and Canada.
Manufacturing Businesses
The activities of the Manufacturing
businesses include the fabrication of
products using precious metals and related
materials, pgm and base metal catalysts
and pgm chemicals. There are three
Manufacturing businesses:
Noble Metals
Noble Metals produces a wide range of
precious metal and other fabricated
products for industrial and medical
applications and Johnson Matthey is the
market leader in pgm fabricated products
for industrial applications. Its manufacturing
operations are based in the UK and USA.
Many of Noble Metals’ products have
a positive impact on our health or on the
environment. It manufactures components
used in medical devices which are used
in life saving surgery for maintaining
cardiovascular health. Its products also
include catalyst systems which are used in
nitric acid manufacturing plants to abate
nitrous oxide (N2O), a highly potent
greenhouse gas. To date, reductions
equivalent to over 35 million tonnes of
carbon dioxide have been achieved using
these systems.
Colour Technologies
Headquartered in the Netherlands, our
Colour Technologies business manufactures
high technology functional coatings which
include black obscuration enamels and
silver conductive materials for automotive
glass. It also makes colours, enamels and
decorative precious metal products for
other glass applications such as bottles
and architectural glass as well as for
tableware and other ceramic applications.
Manufacturing takes place in the
Netherlands, USA and South Korea.
Catalysts and Chemicals
Catalysts and Chemicals manufactures
precious and base metal catalysts which
are used to enhance the operating
efficiency of chemical and pharmaceutical
manufacturing processes. It also
manufactures precious metal chemicals for
a wide range of applications. The business
has manufacturing operations in the UK,
USA, Germany, India and China.
35
Strategy

Leverage our deep understanding of:
• Catalysis and pgm chemistry
• Materials science and manufacturing

Provide customer solutions
through investment in R&D

Offer first class services
to our external and internal
customers

Deliver superior growth
Through leveraging its deep understanding of catalysis, pgm chemistry, materials
science and manufacturing, Precious Metal Products can apply expertise in the
fundamentals of chemistry, materials and process design to ensure it continues to
develop leading edge products and manufacturing routes.
The division is focused on providing customer solutions through investment in
R&D. R&D is at the heart of all Johnson Matthey’s activities and whilst the division
contains a mix of newer and more mature businesses, constant innovation means
that a high proportion of its portfolio consists of products developed within the
last decade.
Offering first class services to external and internal customers is an important
element of the strategy. The division serves external customers and also provides
vital services to other Johnson Matthey businesses either through the provision of
precious metals or through refining and recycling spent process or customer
material. Focusing on the quality and scope of the services it offers is key to
maintaining a competitive position.
The division aims to deliver superior growth by targeting higher technology areas
where its expertise in adding value to precious metals can generate growth at
rates ahead of industry baselines.
Precious Metal Products’ sales increased
by 8% supported by good demand across
all of its businesses.

March 2010 March 2012March 2011
Platinum Palladium
0
500
1,000
1,500
2,000
Platinum and Palladium Prices
US$/oz
March 2010 March 2012March 2011
0
1,000
2,000
3,000
4,000
Rhodium Price
US$/oz
Performance in 2011/12
Precious Metal Products Division’s revenue
increased by 19% to £9,841 million. Its
sales were 8% up at £582 million,
supported by good demand across all of
its businesses. Underlying operating profit
was 16% ahead at £200.8 million with
good profit growth in all of the division’s
businesses.
Services Businesses
Sales in the division’s Services businesses,
which represent 34% of PMPD’s sales,
grew by 10% to £199 million. Profit grew
strongly in the year due to continued good
demand for precious metal refining
services and slightly higher average
precious metal prices.
Platinum Marketing and Distribution
Global demand for platinum increased by
2% in the calendar year 2011. Demand
from the autocatalyst sector grew only
Financial Review of Operations continued
Precious Metal Products continued
modestly. Strong demand in the heavy
duty diesel sector was offset by lower
demand from the light duty diesel sector,
due to increased use of palladium, and
from Japanese car makers in the aftermath
of the March 2011 earthquake. Demand
trends in other sectors were broadly
positive with industrial applications
enjoying a cyclical upturn. Supply
increased due to releases of metal from
in process and refined inventories as
underlying mine production in South Africa
declined. After being close to balance in
2010, the platinum market moved into
surplus in 2011.
The price of platinum reflected these
weaker fundamentals. After reaching a
high point of $1,911/oz in August, the
price retreated for the remainder of the
calendar year, caught up in the general
liquidation across the commodity sector,
to end the year below $1,400/oz. Platinum
averaged $1,670/oz for the financial year,
virtually unchanged on 2010/11.
The balance of the platinum market
is expected to be similar in 2012, with
both supply and demand expected to be
somewhat lower than in 2011. Investment
sentiment is likely to continue to have the
determining influence on the platinum price.
The palladium market moved into
surplus in 2011 with growth in industrial
demand outweighed by further Russian
stock sales and net liquidation in the
physically backed Exchange Traded Fund
(ETF) investment market. The demand side
was a mixed picture with autocatalyst
demand reaching a new high but other
industrial demand showing only moderate
growth. Supplies of newly mined palladium
were flat but there was a sharp increase in
metal recovered from autocatalyst recycling.
Having opened the year at $770/oz,
the palladium price suffered in the face of
weak fundamentals. After reaching a year
high of $845/oz in June, palladium had
retreated to $570/oz by October as ETF
liquidation reached a peak. The price
recovered slowly in the rest of the year to
average $710/oz, up 15% on the average
for 2010/11.
Johnson Matthey Annual Report & Accounts 2012
Report of the Directors – Business Review
Financial
36
2007 2008 2009 2010 2011
South Africa Russia Elsewhere
0
6
5
4
3
2
1
7
Supply of Platinum
2007-2011
million oz
2007 2008 2009 2010 2011
Autocatalyst Jewellery Industrial Investment
0
1
2
3
4
5
6
7
8
9
Gross Demand for Platinum
2007-2011*
million oz
2007 2008 2009 2010 2011
South Africa Russia Elsewhere
0
1
2
3
4
5
6
7
8
9
Supply of Palladium
2007-2011
million oz
2007 2008 2009 2010 2011
Autocatalyst Electronics Jewellery Other
0
2
4
6
8
10
Gross Demand for Palladium
2007-2011**
million oz
* Recycling of scrapped autocatalysts,
electronics and jewellery contributed
1.41 million oz in 2009, 1.83 million oz
in 2010 and 2.05 million oz in 2011.
** Recycling of scrapped autocatalysts,
electronics and jewellery contributed
1.43 million oz in 2009, 1.85 million oz
in 2010 and 2.35 million oz in 2011.

March 2010 March 2012March 2011
Gold Silver
1,000
1,250
1,500
1,750
2,000
10
20
30
40
50
Gold and Silver Prices
gold US$/oz silver US$/oz
With significantly lower shipments of
Russian state stock anticipated in 2012
and a modest increase in demand, the
palladium market is expected to swing
back into deficit. This will be supportive of
a rising price trend although external
economic factors, particularly in emerging
markets, are expected to have a significant
influence.
The rhodium market was once again
oversupplied in 2011 as modest growth in
demand was outpaced by a rise in supplies
and higher volumes of metal recovered
from scrap autocatalysts. With a growing
surplus, the price found little support,
falling $1,000/oz to close the financial year
at $1,400/oz. The average price of
$1,734/oz was down 28% on 2010/11.
The rhodium market is expected to remain
in surplus in 2012, suggesting limited
upside potential in the price.
Refining
Our Refining businesses had another
strong year, led by our gold and silver
refineries. In our Pgm Refining business
sales were 1% up on 2010/11. Volumes
were strong in the first half but there was
some slowing of demand in the second
following the fall in pgm prices during
September. The business continued to
benefit from its key strategic position in
the refining of pgms from end of life
autocatalyst scrap, with volumes 20% up
on the strong growth seen in the prior year.
Intakes of the more difficult to refine
insoluble pgms, rhodium, ruthenium and
iridium, also continued to be strong,
benefiting from further development of the
business’ world leading pgm chemistry
and refining capabilities in this area.
Operational improvements and continued
focus on capacity management resulted in
a reduction of metal tied up in refining
processes and the business continues to
work on long term projects to add value for
its customers.
Both of our gold and silver refineries
had a strong year. Throughputs were up by
13% for gold and 5% for silver against a
back drop of record levels in the prior year.
Our refinery in Salt Lake City, USA
benefited from several new mines reaching
optimal output during the year. In 2011/12
gold and silver prices averaged $1,661/oz
and $36/oz, up 28% and 50% respectively
on those in 2010/11. The second half saw
a slowdown in demand for recycling as the
economy started to recover in the US.
However, demand for investment products
such as gold and silver bars were at a
record high, particularly in China.
Mines
15%
Johnson Matthey
11%
Refiners
10%
Pharmaceuticals /
chemicals
8%
Glass / nitric
8%
Others
8%
Autocatalyst
scrap
40%
Pgm Refining Throughput by
Market Sector
37
> Process Improvements in Refining Bring Reward
Activities at Johnson Matthey’s Royston site in the UK include the refining of platinum
group metals and a project on one of the operation’s core purification steps has
delivered swift improvements, targeting four of the Sustainability 2017 goals.
Whilst the business’ technology for this core purification step is well established,
a project and cross functional team were set up to improve the process and make the
operation more sustainable.
The resulting benefits were significantly reduced raw material usage, effluent
generation and carbon emissions, as well as significant cost savings.
The project combined structured problem solving with innovation and further
improvements are planned. The sustainability dividend is closely entwined with
efficiency gains and financial benefits, and these results make a significant
contribution to Johnson Matthey’s vision for a sustainable business.
� Read the full case study at www.matthey.com/sustainability.
Case Study

Manufacturing Businesses
Sales in our Manufacturing businesses,
which represent 66% of PMPD’s sales,
were up 6% to £383 million. Operating
profit was well up on prior year.
Noble Metals
Following last year’s strong recovery, Noble
Metals’ sales grew 4% to £125 million.
However, operating profit was well ahead
of last year with a trend towards higher
added value products for the automotive
and medical device sectors and improved
market share following the success of
several new product introductions.
Sales of industrial products, which
represent 70% of Noble Metals’ sales,
grew by 4% to £88 million. The business
has developed a range of new higher
performance pgm alloy catalysts used in
fertiliser manufacture. This has enabled us
to increase our market share and
outperform market growth.
Carbon trading opportunities continue
to be the main driver for the use of N2O
abatement systems in the nitric acid
production industry. Noble Metals continued
to see good demand for these products
during the year and, despite recent falls
in the market price for carbon, sales
continued to grow. Further growth
opportunities will depend upon the
legislative environment as developed
countries tackle the threat of climate
change. The business is well placed to
respond.
The business has also developed a
range of high technology pgm alloys used
in manufacturing spark plugs designed to
meet the automotive industry’s demand for
improved performance and fuel efficiency.
During the year the business has invested
in increased production capacity to serve
this growing market.
Sales of medical components (30% of
Noble Metals’ sales) were 6% up on last
year at £37 million driven by record
demand for products used primarily in the
cardiovascular markets. Government
healthcare initiatives and an ageing
population in the US are resulting in a
higher number of medical procedures.
This, together with increasing wealth in
China, India and Southeast Asia, is driving
demand for our products. During the year
the business invested in high technology
fine hole cutting equipment at its San
Diego, USA operation to support growing
demand for micromachined parts. It also
expanded its facility in San Jose, USA to
service increased demand for nitinol tubing
which is used in nitinol stents to treat
peripheral vascular disease.
Colour Technologies
Colour Technologies’ sales were 6% up
on last year at £87 million and operating
profit grew ahead of sales. The year saw
good growth in sales of obscuration
enamels for the automotive glass industry,
particularly in China and the Americas,
supported by the introduction of innovative
new products. High precious metal prices
continued to adversely impact demand for
decorative precious metal products but
had little impact on functional applications
of these materials, for example in the
aerospace industry. The year also saw a
strong increase in sales of conductive silver
pastes to the automotive glass industry
resulting from a combination of improved
products, successful collaboration with
customers and market growth.
Johnson Matthey Annual Report & Accounts 2012
Report of the Directors – Business Review
Financial
38
Financial Review of Operations continued
Precious Metal Products continued
> Interactive Training Promotes Sustainability
in Downingtown
Johnson Matthey’s Colour Technologies operations in Downingtown, US, set up a
sustainability training programme for all of its employees. The programme offered
interactive learning, practical exercises and insights into the fundamentals of
sustainability, achieving 100% participation among employees.
The training schedule kicked off with an overview session designed to
increase awareness and encourage engagement. In the second session,
employees explored the use of streamlined life cycle assessment tools on a real
life example of relevance to the business. Other parts of the training covered
Johnson Matthey’s Sustainability Intranet, where employees were shown how to
contribute to it, and use of a carbon calculator tool to enable staff to think about
their own carbon footprint.
The outcome is a workforce with greater understanding and renewed enthusiasm. Developing employee awareness and
encouraging use of tools such as the streamlined life cycle assessment and the Sustainability Intranet play an effective part in
strengthening involvement in the company’s sustainability agenda.
� Read the full case study at www.matthey.com/sustainability.
Case Study

Catalysts and Chemicals
Catalysts and Chemicals’ sales grew by
8% to £171 million. Demand for our
catalysts was good, supported by new
product launches for solvent manufacturing
and growth in sales of newly developed
pgm catalysts for the petrochemical market.
The business also saw good growth in
sales of catalysts for the production of
oleochemicals, particularly in Asia, and in
sales of platinum coated discs used in
contact lens disinfecting systems. During
the year the business commissioned its
new pgm catalyst plant in Shanghai, China
mainly to service customers in the
pharmaceutical and fine chemical sectors.
Sales of chemical products, which
include pgm salts used in the manufacture
of autocatalysts, were down on prior year
mainly due to the impact, particularly in
the first half, of the Japanese earthquake
and tsunami on demand from Japanese
automakers. The year saw the introduction
of ‘It’sFresh!’ sheets, which contain our
e+™ ethylene remover, to major UK
supermarkets to extend the shelf life of
fruit. Whilst current sales are relatively
modest, we are optimistic that our sales
will exceed £10 million per annum within
the next few years.
39
Sustainable Catalysts to Replace Mercury
The development of more sustainable products is a key component of Johnson
Matthey’s Sustainability 2017 Vision. Our scientists are not only working on the
creation of new solutions for new markets, but also on developing more sustainable
alternatives for existing applications.
Johnson Matthey, together with Jacobs Engineering, has developed a new
product to replace a mercury based catalyst for making vinyl chloride monomer
(VCM), a chemical used in the manufacture of PVC. Current demand for this
catalyst, which is used mainly in China, is around 10,000 tonnes per annum.
Our new catalyst is an innovative supported precious metal catalyst. Initial
research to create a mercury free catalyst formulation began at the Johnson Matthey
Technology Centre in Sonning, UK in 2006. Once a successful catalyst had been
identified, its manufacture was scaled up at the company’s Catalysts and Chemicals’
facility in Royston, UK. The catalyst is now in evaluation trials in a VCM pilot plant in
China and construction of a full scale demonstration VCM plant is underway.
Johnson Matthey’s expertise in materials characterisation has played a key role
at every stage in the new catalyst’s development. It has enabled us to determine
the exact distribution and chemical form of precious metals within the catalyst at
the atomic scale. This information has provided us with an understanding of the
catalyst’s performance and provides us with a solid basis for further catalyst
development and future customer support.
Innovation in Action

Johnson Matthey Annual Report & Accounts 2012
Report of the Directors – Business Review
Financial
40
Financial Review of Operations continued
Fine Chemicals
Key Statistics
Capital expenditure £15.8 million
Capex / depreciation 0.9
Average invested capital £418 million
Employees 1,090
Year to 31st March % at
2012 2011 % constant
£ million £ million change rates
Revenue 292 255 +15 +16
Sales excluding precious metals (sales) 285 245 +16 +17
Underlying operating profit 69.7 56.2 +24 +26
Return on sales 24.5% 22.9%
Return on invested capital (ROIC) 16.7% 13.7%
Providing
products that
ultimately
enhance
quality of life
API Manufacturing
72%
Research Chemicals
28%
Sales
Europe
41%
North America
49%
China
3%
Rest
of Asia
5%
Rest of
World
2%
Sales by Destination
2009* 2010 2011 2012
215 221
245
285
0
100
200
300
Divisional Sales
£ million
2009 2010 2011 2012
49.5
55.8 56.2
69.7
0
25
50
75
Divisional Underlying Operating Profit
£ million
* Excluding inter-segment sales.

> Unlocking a Production Bottleneck to
Save Money and Resources
Improving the efficiency of our processes is an essential part of our sustainability
strategy to save resources. In Johnson Matthey’s Pharmaceutical Materials and
Services business an exercise to streamline operations at the West Deptford site in
the US led to significant process improvement.
Employees from all functions were involved with Engineering, Production and
Research providing the technical data, Production and Automation simplifying the
programming and Commercial, Quality and Operations keeping external customers
informed.
The project makes an important contribution to Sustainability 2017 and its goal of
halving key resources per unit of output. The key resources here, which are production
equipment time and energy use, have been more than halved. Furthermore, reduced
manufacturing costs and increased overall production also contribute to the sustainability
goal of doubling our underlying earnings per share.
� Read the full case study at www.matthey.com/sustainability.
Case Study
Description of the Business
Fine Chemicals Division supplies active
pharmaceutical ingredients (APIs), fine
chemicals and other speciality chemicals
to a wide range of chemical and
pharmaceutical industry customers and
research institutes globally. Its products
help relieve pain, treat cancer and alleviate
other medical conditions, thus improving
the quality of life for many people around
the world. It comprises two areas:
API Manufacturing
Our API Manufacturing businesses supply
APIs and intermediate products for the
pharmaceutical and fine chemical
industries and provide contract research
services to the pharmaceutical industry.
Macfarlan Smith, based in Edinburgh, UK
is the world’s leading manufacturer of
opiate alkaloids which are used for pain
management and other pharmaceutical
applications. Our US based
Pharmaceutical Materials and Services
business specialises in the manufacture of
APIs for controlled drugs and for platinum
based anticancer treatments. It also
provides a full range of commercial scale
manufacturing services for APIs to both
generic and branded pharmaceutical
companies.
Research Chemicals
The Research Chemicals business is a
globally integrated supplier of speciality
inorganic and organic chemicals and
biochemicals. The business supplies
chemicals into both industry and research
institutions in small scale research
quantities, via its catalogue, and bulk scale
shipments. Around 50% of its sales are
to pharmaceutical companies. It operates
under the Alfa Aesar brand name and is
based in the UK, USA, Germany, China
and India. The operations in the UK and
China have manufacturing capability
servicing the catalogue and the needs of
external bulk scale customers and provide
custom synthesis of key pharmaceutical
intermediates for both external and internal
customers.
41
Strategy

Deliver niche products to
the generic pharmaceutical
market
Leverage synergies between
research, development and
manufacturing

Increase market share of
established products

Deliver superior growth
Fine Chemicals is focused on delivering niche products to the generic pharmaceutical
market where it can apply its expertise to benefit from the trend towards the use of
generic pharmaceuticals. Furthermore, with commercial advantages from being first to
market with generic APIs, the division is supported by its strengths in research,
development and manufacturing.
Through leveraging synergies between research, development and manufacturing
across the division, Fine Chemicals can maintain a pipeline of new products for
customers of both its API Manufacturing and Research Chemicals businesses.
Increasing market share of established products where the division has a strong
position, such as opiate based APIs, is an important element of the strategy. The
division is optimising its global manufacturing capacity to enable it to benefit from
opportunities to strengthen its position in both existing and developing markets.
The division aims to deliver superior growth in markets that are driven by global trends
towards the increased use of pharmaceutical products. Its strong position in niche areas
and its research and manufacturing infrastructure position it well for growth at rates
ahead of industry baselines.
Fine Chemicals’ products help relieve pain, treat
cancer and alleviate other medical conditions.

Performance in 2011/12
Fine Chemicals Division exceeded our
expectations in 2011/12 with very strong
growth in its API Manufacturing businesses
and continued good growth in Research
Chemicals. Revenue in the year increased
by 15% to £292 million. Sales were 16%
ahead at £285 million and operating profit
was 24% higher at £69.7 million boosted
by increased demand. In our North
American API manufacturing operations
we are beginning to realise the benefits of
the acquisition of the Riverside facility in
Conshohocken, USA in November 2010.
The division’s return on sales also
improved, up 1.6% to 24.5%.
API Manufacturing Businesses
The division’s API Manufacturing
businesses, which represent 72% of Fine
Chemicals’ sales, had a very good year
with sales up 18% to £206 million and
stronger growth in operating profit.
The businesses continued to benefit
from the trend towards the use of generic
APIs by the healthcare industry. Sales at
Macfarlan Smith grew steadily this year,
particularly due to higher demand for its
bulk opiate based products, such as
codeine which is used in pain management.
Increased stability in narcotic raw material
supplies allowed the business to recover
market share in bulk opiates outside North
America. The business also saw an
improvement in operational efficiency as
a result of a restructuring programme
completed in the first half of the year.
Pharmaceutical Materials and
Services performed very well this year,
benefiting from the additional capacity
afforded by the Riverside facility and some
acquired legacy business. The new plant,
which more than doubles our manufacturing
capacity in North America, has been
successfully integrated with the business’
other US operations. This purpose built
facility is enabling us to manufacture
products more efficiently, allowing us to
capitalise on new opportunities to grow
sales and increase our market share,
particularly in the supply of opiates used
in pain management and amphetamines
used in attention deficit hyperactivity
disorder (ADHD) drugs. During the year we
have focused on transferring technology to
Riverside to optimise our API production in
North America. Product transfer from
Macfarlan Smith to Riverside is now also
underway as the division works to optimise
its API production globally.
The business also benefited from
strong sales of the generic version of
ADDERALL XR®, which is used in the
treatment of ADHD, and from the launch of
a niche, high value ophthalmic drug.
Drawing on its manufacturing and contract
research expertise and working in
collaboration with generic pharmaceutical
companies, the business has developed
several other niche products that have
been filed with the US Food and Drug
Administration and which should support
a steady stream of new products over the
next few years.
The results of our API Manufacturing
businesses also benefited from revenue
from Endo, the US based healthcare
company, relating to an oxymorphone
patent.
Research Chemicals
Research Chemicals performed well in
2011/12 benefiting from an increase in
market share and the continued introduction
of new products. Sales were 10% ahead
of prior year at £79 million with good
growth across North America, Europe and
Asia. Operating profit grew ahead of sales.
Sales growth in Asia was particularly
strong, up 24% on prior year, supported
by an increase in R&D spend by
pharmaceutical companies in the region.
The business has expanded its range this
year, adding 4,500 new products, and its
rate of new product introduction continues
to increase. Our manufacturing capability,
together with the strong synthetic
chemistry expertise in Research Chemicals
and more widely across Fine Chemicals
Division, position the business well to
further increase its portfolio of products.
In July 2012 the business launched
a new biochemical product catalogue in
North America, targeting the life science
R&D market. This market offers
opportunities outside North America and
as a result the business plans to roll out its
biochemical range to other regions in the
coming year, supported by its global sales
and manufacturing infrastructure.
Johnson Matthey Annual Report & Accounts 2012
Report of the Directors – Business Review
Financial
42
Financial Review of Operations continued
Fine Chemicals continued
> Bitrex® Goes Social
Bitrex® is the world’s bitterest substance. Discovered over 50 years ago by scientists
at Macfarlan Smith, it is added to household and garden products to prevent children
swallowing them by accident. Its bitter, unpleasant taste means that children will spit it
out at once.
Bitrex® is not a replacement for the safe storage of dangerous household, garden
and garage substances but where Bitrex® comes into its own is at moments of parental
inattention. When the phone rings before the groceries are packed safely away or when
another child needs some attention in the middle of spring cleaning, for example.
Now Johnson Matthey’s Bitrex® team is adding a new approach to raising awareness
of Bitrex® among consumers. The team has decided to use social media to reach out to
parents around the world. They have produced a 60 second video which captures the
uncanny skills that babies and toddlers have for spitting out a well-aimed jet of half-chewed
food – an experience familiar to every parent, grandparent and carer! It concludes that spitting out is what babies and toddlers
do best and Bitrex® is the stuff to ensure that if anything dangerous does get into their mouths, they will go right ahead and spit
it out. The video can be viewed on the Bitrex® consumer webpage at www.helpingprotectchildren.com.
Read the full case study at www.matthey.com/sustainability.
Case Study

43
Profit Before Tax
The group’s underlying profit before tax increased by 23% to £426.0 million (2010/11 £345.5 million). Profit before tax was 58% higher at
£409.3 million (2010/11 restated £259.3 million). Items excluded from underlying profit were:
• amortisation of acquired intangibles of £16.7 million. This was £2.2 million higher than 2010/11 mainly due to a full year impact of the
acquisition of the Additives business (formerly Intercat) made in November 2010; and
• in 2010/11, an impairment and restructuring charge of £71.8 million in respect of the closure of ECT’s manufacturing facility in Brussels
and the Vertec business.
Exchange Rates
The main impact of exchange rate movements on the group’s results comes from the translation of foreign subsidiaries’ profit into sterling
as the group does not hedge the impact on the income statement or balance sheet of these translation effects. The group’s underlying
operating profit at constant exchange rates is shown in the table below:
Financial Review
Robert MacLeod
Group Finance Director
Underlying Profit Reconciliation
Year to 31st March 2012 Year to 31st March 2011
Profit Income Profit from Profit Income Profit from
before tax continuing before tax continuing
tax expense operations tax expense operations
restated restated restated
£ million £ million £ million £ million £ million £ million
Underlying basis 426.0 (100.0) 326.0 345.5 (91.7) 253.8
Amortisation of acquired intangibles (16.7) 6.1 (10.6) (14.5) 4.6 (9.9)
Major impairment / restructuring:
Closure of autocatalyst facility in Brussels – – – (57.0) 8.1 (48.9)
Closure of Vertec business – – – (14.8) 3.5 (11.3)
Dissolution of associate – – – 0.1 – 0.1
Reported basis 409.3 (93.9) 315.4 259.3 (75.5) 183.8
Underlying Operating Profit
2011 at 2012
Year to 31st March exchange
2012 2011 % rates %
£ million £ million change £ million change
Environmental Technologies 211.8 164.7 +29 163.8 +29
Precious Metal Products 200.8 172.9 +16 172.7 +16
Fine Chemicals 69.7 56.2 +24 55.5 +26
Corporate (32.2) (27.6) (27.5)
Total group 450.1 366.2 +23 364.5 +23
During the year, sterling strengthened slightly against the US dollar but weakened slightly against the Chinese renminbi and the euro.
Together these decreased reported group underlying operating profit for the year by £1.0 million.
“In 2011/12 the group’s
underlying profit before
tax increased by 23%
to £426.0 million.”

Of the group’s underlying operating profit that is denominated
in overseas currencies the average exchange rates during 2011/12
were:
Going forward, each one cent change in the average
US dollar exchange rate and each one cent change in the euro
exchange rate have approximately a £0.9 million and £0.6 million
effect respectively on underlying operating profit in a full year.
Return on Sales
The group’s return on sales increased from 16.1% to 16.8% as
the group benefited from higher returns across all the divisions,
as described on pages 26 to 42.
Return on Invested Capital
For the second consecutive year, the group’s return on invested
capital (ROIC) improved significantly, from 19.4% to 22.3%.
Underlying operating profit was £83.9 million higher than last year
at £450.1 million and average invested capital was £131 million
higher at £2,015 million. At 22.3%, the group’s ROIC is well ahead
of our pre-tax cost of capital, which we estimate to be 11.2%.
Our target for several years has been to achieve a group ROIC
above 20% on a pre-tax basis. This year we have achieved this goal.
Looking forward, whilst we will seek to continually improve
the group’s returns, we will not do this at the expense of the long
term future of the group. We will continue to invest in capital
expenditure in our businesses across the world and in research and
development. Therefore, whilst further improvements in the group’s
ROIC may be possible, our objective is to maintain the group’s
ROIC at a minimum of 20%.
Interest
The group’s net finance costs increased by £3.4 million to
£24.1 million as a result of higher precious metal borrowing costs.
Approximately 73% of the group’s net debt at 31st March
2012 has fixed interest rates averaging approximately 4.9%.
Taxation
The group’s total tax charge for the year was £93.9 million, a tax
rate of 22.9% on profit before tax (2010/11 restated 29.1%).
The effective tax rate on underlying profit before tax reduced
from 26.5% last year to 23.5%. This reduction was due to the
resolution of certain open years’ tax positions, a reduction in the
headline rate of corporation tax in the UK and other factors.
A substantial proportion of the group’s operating profit is
earned in countries other than the UK. However, for tax purposes
the parent company, which is UK tax resident, charges overseas
legal entities for the use of patents, know how and technologies
developed in the group’s UK R&D centres, in addition to charging
overseas subsidiary companies for the cost of UK based
management and UK provided finance. These charges are
required under UK transfer pricing legislation. As a result of these
charges, the amount of the group’s profit that is subject to UK
corporation tax is particularly pronounced. The group has therefore
materially benefited from the reduction in the headline UK
corporation tax rate from 28% for the year ended 31st March 2011
to 24% for the year ending 31st March 2013.
In addition, further planned reductions in the headline UK
corporation tax rate to 22% for accounting periods beginning on
or after 1st April 2014, the proposal announced by the UK
government to reduce the corporation tax charged on profit earned
from qualifying patented technologies to 10% and the proposed
favourable changes to the UK Controlled Foreign Companies tax
legislation, both effective for the year ending 31st March 2014,
should help to reduce the group’s effective tax rate further.
However, the UK government’s proposal to introduce an ‘above
the line’ R&D credit regime with effect from 1st April 2013 will
increase the group’s reported effective tax rate on underlying profit.
Going forward, the rate should nevertheless be at least 2% lower
than the headline rate for UK corporation tax.
Johnson Matthey Annual Report & Accounts 2012
Report of the Directors – Business Review
Financial
44
Share of
2011/12
non-sterling
denominated
underlying Average exchange rate
operating profit 2011/12 2010/11
US dollar 49% 1.597 1.555
Euro 25% 1.160 1.176
Chinese renminbi 8% 10.21 10.43
Return on Invested Capital
Average Return on
invested capital1 invested capital2
2012 2011
restated 2012 2011
£ million £ million % %
Environmental Technologies 1,492 1,434 14.2 11.5
Precious Metal Products 341 309 58.9 55.9
Fine Chemicals 418 409 16.7 13.7
Corporate / other (236) (268) n/a n/a
Total group 2,015 1,884 22.3 19.4
1 Average of opening and closing segmental net assets as shown in note 1 on the
accounts on pages 131 and 132. For the group, the average of opening and
closing equity plus net debt.
2 Underlying operating profit divided by average invested capital.
Return on Sales
Sales excluding
precious metals Return on sales1
2012 2011 2012 2011
£ million £ million % %
Environmental Technologies 1,876 1,566 11.3 10.5
Precious Metal Products 582 541 34.5 31.9
Fine Chemicals 285 245 24.5 22.9
Less inter-segment sales (64) (72) n/a n/a
Total group 2,679 2,280 16.8 16.1
1 Underlying operating profit divided by sales excluding precious metals.
Financial Review continued

45
Tax Strategy
In 2011/12, Johnson Matthey had operations in over 30 countries
across the world. For each country in which we have operations,
we organise our operations to pay the correct and appropriate
amount of tax at the right time according to the laws of the relevant
country and ensure compliance with the group’s tax policies and
guidelines. The group’s tax strategy is annually reviewed and
endorsed by the board. This strategy is executed by a global team
of tax professionals, assisted by external advisers where appropriate.
Our tax strategy covers the application of all taxes, both direct
and indirect, to our business including corporation tax, payroll
taxes, value added tax and customs duties. The tax strategy also
covers our approach to any tax planning required by the business
and key policy areas such as transfer pricing.
Earnings per Share
The growth in the group’s underlying earnings per share of 29%
to 153.7 pence benefits both from growth in the business and the
lower effective tax rate. Total earnings per share were 148.7 pence,
75% up on last year.
Dividend
If the proposed final dividend of 40.0 pence per share is approved,
the group’s dividend for the full year will be 55.0 pence (2010/11
46.0 pence). At this level, the dividend would be covered 2.8 times
by underlying earnings per share.
This year, the board is also recommending a special dividend
of 100.0 pence per share following a review of the group’s capital
structure, as detailed on page 46.
Pensions
IFRS – Accounting Basis
At 31st March 2012 the group’s principal defined benefit pension
scheme in the UK was in deficit by £84.8 million (92% funded)
on an IFRS basis compared with a deficit of £60.6 million at
31st March 2011. The £24.2 million increase in the deficit was
principally due to a decrease in the discount rate used to value the
scheme’s liabilities. Worldwide, the group has other similar defined
benefit pension arrangements, some of which are in deficit (total
deficit £45.9 million) and others which are in surplus (total surplus
£2.0 million).
Worldwide, including provisions for the group’s post-retirement
healthcare schemes, the group had a net deficit of £169.4 million
on employee benefit obligations at 31st March 2012 (2011
£130.4 million).
The impact of the higher deficit and lower discount rate is
expected to increase the accounting charge for pensions in
2012/13 compared with 2011/12 by more than £10 million.
Actuarial – Funding Basis
In 2010/11 the company commenced deficit funding contributions
to the UK scheme under a ten year recovery plan agreed with the
Trustees following the 2009 actuarial valuation. During the year the
company made deficit funding payments of £23.1 million to the
scheme. The group’s normal ongoing contribution to the UK
scheme in 2011/12 was £21.6 million (2010/11 £22.0 million),
making total cash contributions to the scheme in the year of
£44.7 million.
The latest actuarial valuation of the UK scheme, effective
as at 1st April 2012, is underway. The previous actuarial valuation,
as at 1st April 2009, estimated that the scheme deficit was
£173 million. The results of this latest actuarial valuation are not
expected to be available until later this year, however it is anticipated
that the scheme’s deficit will have increased further despite the
deficit funding contributions made since 2009. This increase is
caused by a reduction in gilt yields that are used to value the
scheme’s liabilities. Once the results of the latest valuation are
available, the company will enter into discussions with the
scheme’s Trustees to agree a revised deficit recovery plan. This
may require the company to increase and / or extend the level of
cash contributions.
In addition to the expected increase in the scheme’s actuarial
deficit, the cash cost of providing the ongoing benefits to existing
members is likely to increase substantially. As a result, the company
is reviewing its options for future pension provision in the UK.
The group operates other defined benefit pension schemes for
some overseas employees. Certain of these schemes also have
actuarial deficits which require additional cash contributions and
where the ongoing costs associated with future pension provision
is also increasing. The group intends to review those pension
arrangements in due course.
The company continues to work with the fiduciary committees
and trustee boards of each of its pension schemes worldwide to
ensure an appropriate investment strategy is in place, which includes
de-risking the schemes as funding levels improve. Currently, 52%
of the group’s total pension assets are held in government or
corporate bonds.
Capital Expenditure
Capital expenditure was £149.6 million (of which £150.7 million was
cash spent in the year) which equated to 1.2 times depreciation. In
the year, £97.1 million, or 65%, was incurred by Environmental
Technologies Division with the principal investments being to add a
further autocatalyst line in China, to increase our heavy duty diesel
catalyst manufacturing capacity in Europe and China and to
continue the investment started last year in new manufacturing
plants in the UK and India to make process catalysts for our
Ammonia, Methanol, Oil and Gas business.
The long term outlook for the group remains robust and there
are good opportunities for growth. To access these opportunities
we anticipate that capital expenditure will rise substantially during
2012/13, to around £230 million, and will be in the range of 1.5 to
1.7 times depreciation for the next few years. Depreciation, which
was £126.1 million in 2011/12 (2010/11 £123.2 million), will rise as
a consequence of this increased investment to around £135 million
in 2012/13 and then further, to around £160 million, by 2014/15.
Cash Flow
During the year ended 31st March 2012 net cash flow from operating
activities was £464.4 million (2010/11 restated £122.9 million).
The demand for our products grew but towards the end of the year
precious metal prices dropped due to concerns about the global
economy. Working capital, excluding the element that relates to
precious metals, increased by £41.5 million, which represented
54 days of sales, down from last year’s 60 days. Working capital
in respect of precious metals decreased by £60.9 million primarily
due to the lower precious metal prices towards the end of the year.
The group’s free cash flow was an inflow of £299.4 million
(2010/11 restated an outflow of £26.5 million).

Financial Review continued
Johnson Matthey Annual Report & Accounts 2012
Report of the Directors – Business Review
Financial
46
Capital Structure
In the year ended 31st March 2012 net debt fell by £185.2 million
to £454.2 million and the group’s EBITDA (on an underlying basis)
rose by 18% to £576.2 million (2010/11 £489.4 million). Net debt /
EBITDA for the year was 0.8 times but if post tax pension deficits
of £97.0 million are included within net debt, the ratio would
increase to 1.0 times. Interest cover (underlying operating profit /
net finance costs) was 18.7 times (2010/11 17.7 times).
Over the last few years, the group has performed very well,
substantially growing underlying profit despite considerable capital
expenditure and increased investment in research and development.
The group’s cash generation has also been strong.
As a result of this strong performance the board has carried
out a review of the group’s balance sheet structure. The outlook
for the group remains strong and we believe that it has ample
resources to fund forecast capital expenditure and a further
increase in research and development. The board is, therefore,
recommending a special dividend to shareholders of 100.0 pence
per share, which represents a total payment of approximately
£212 million. The special dividend will be accompanied by a
share consolidation. The consolidation factor will be announced
to shareholders in the annual general meeting circular on
20th June 2012.
In order to enable the group’s objective of delivering long term
growth to its shareholders, it is imperative that the company has
sufficient funds to invest in capital expenditure, research and
development and appropriate acquisitions whilst at the same time
maintaining a balance sheet structure that safeguards the group’s
financial strength through economic cycles.
The group is subject to potentially large working capital
swings as business activity changes. In particular, Emission
Control Technologies has a substantial working capital requirement
as business activity increases. These swings can be accentuated
by volatility in precious metal prices. As a result of these factors, it
is appropriate to run the business with a modest amount of debt.
We believe that a net debt (including post tax pension deficits) to
EBITDA ratio of around 1.5 to 2.0 times is appropriate for the
group over the longer term.
If the special dividend is approved by shareholders, the net
debt (including post tax pension deficits) to EBITDA ratio for the
year ended 31st March 2012 would have been, on a pro forma
basis, 1.3 times. The company will also, as required, have
discussions with the UK pension scheme’s Trustees regarding this
return of capital as part of the current actuarial valuation.
Borrowings
31st March 2012 31st March 2011
£ million % £ million %
Five to ten years 83.5 14 181.0 24
Two to five years 218.9 37 330.4 44
One to two years 198.7 33 40.6 5
Within one year 92.2 16 206.3 27
Gross borrowings
(net of swaps) 593.3 100 758.3 100
Less: cash and deposits 139.1 118.9
Net debt 454.2 639.4

Financial Risk Management and
Treasury Policies
The group uses financial instruments, in
particular forward currency contracts and
currency swaps, to manage the financial
risks associated with its underlying business
activities and the financing of those
activities. The group does not undertake
any speculative trading activity in financial
instruments. Our treasury department is
run as a service centre rather than a profit
centre.
Interest Rate Risk
At 31st March 2012 the group had net
borrowings of £454.2 million. Some 73%
of this debt was at fixed rates with an
average interest rate of 4.9%. The remaining
27% of the group’s net borrowings was
funded on a floating rate basis. A 1%
change in all interest rates would have a
0.3% impact on underlying profit before
tax. This is within the range the board
regards as acceptable.
Treasury Policies
Foreign Currency Risk
Johnson Matthey’s operations are located
in over 30 countries, providing global
coverage. The significant amount of its
profit is earned outside the UK. In order to
protect the group’s sterling balance sheet
and reduce cash flow risk the group has
financed most of its investment in the USA
and Europe by borrowing US dollars and
euros respectively. Although much of this
funding is obtained by directly borrowing
the relevant currency, a part is achieved
through currency swaps which can be more
efficient and reduce costs. To a lesser extent
the group has also financed a portion of its
investment in China, Japan and South
Africa using currency borrowings and
swaps. The group uses forward exchange
contracts to hedge foreign exchange
exposures arising on forecast receipts and
payments in foreign currencies. Currency
options are occasionally used to hedge
foreign exchange exposures, usually in a
bid situation. Details of the contracts
outstanding on 31st March 2012 are
shown on page 155.
Precious Metal Prices
Fluctuations in precious metal prices can
have a significant impact on Johnson
Matthey’s financial results. Our policy for
all manufacturing businesses is to limit this
exposure by hedging against future price
changes where such hedging can be done
at acceptable cost. The group does not
take material exposures on metal trading.
All the group’s stocks of gold and
silver are fully hedged by leasing or forward
sales. Currently the majority of the group’s
platinum stocks are unhedged because of
the lack of liquidity in the platinum market.
The group’s policy on funding capacity is
to ensure that we always have sufficient
long term funding and committed bank
facilities in place to meet foreseeable peak
borrowing requirements. At 31st March
2012 the group had cash and deposits of
£139.1 million and £312.1 million of
undrawn committed bank facilities available
to meet future funding requirements. The
group also has a number of uncommitted
facilities, including overdrafts and metal
lease lines, at its disposal.
Gross borrowings (net of related swaps)
of £593.3 million at 31st March 2012
included £539.1 million of debt arranged
under long term bond issues and long term
funding from the European Investment
Bank (EIB). Of this, only £40.0 million falls
due to be repaid in the 15 months to
30th June 2013 (the going concern period).
The group’s committed bank facilities have
a range of maturities with £191.3 million
expiring after 30th June 2013. The maturity
dates of the group’s debt and borrowing
facilities are illustrated in the table on page
46 and the chart to the right. In the context
of our policy on funding capacity, to take
account of the proposed special dividend
of approximately £212 million, we are in
the process of arranging additional long
term financing arrangements.
Liquidity and Going Concern
Maturity Profile of Debt Facilities
At 31st March 2012 exchange rates
£ million
The directors have assessed the
future funding requirements of the group
and the company and compared it to the
level of long term debt and committed bank
facilities for the 15 months from the
balance sheet date. The assessment
included a sensitivity analysis on the key
factors which could affect future cash flow
and funding requirements. Having
undertaken this work the directors are of
the opinion that the group has adequate
resources to fund its operations for the
foreseeable future and so determine that it
is appropriate to prepare the accounts on
a going concern basis.
47
March
2012
March
2013
March
2014
March
2015
March
2016
March
2017
March
2018
March
2019
March
2020
March
2021
0
100
200
300
600
500
800
700
900
400
EIB loans
Bonds
Bank facilities
Net debt at 31st March 2012

Johnson Matthey Annual Report & Accounts 2012
Report of the Directors – Business Review
Social
48
Investing in
our people
and our
communities
around the
world

Contents
50 Performance Summary
50 Stakeholder Engagement
52 Building a Sustainable Workforce
56 Community Investment
58 Social Aims and Targets
Social
This section highlights initiatives involving our people, our communities and other stakeholder groups. It also contains
performance data relating to employees and community investment.
> Growing Our People
It is Johnson Matthey’s people that make the
company successful and it is their knowledge,
expertise and contributions that drive the
business forward.
Developing our employees and providing
an environment which motivates them to
contribute and stay with the company is
fundamental to the group’s long term
performance. At Johnson Matthey we aim
to provide interesting and challenging jobs to
grow our people personally and professionally
in a supportive culture where everyone is
encouraged to reach their full potential.
Our learning and development strategy
has always included a balance of workplace
based experience, personal development
support and feedback, as well as more
structured training programmes to build
employees’ skills and encourage collaboration
and networking with their colleagues across
the group.
During 2011/12 we have introduced
a number of new global and regional
programmes aimed at introducing new
graduates to the business, developing our
manufacturing personnel and building
leadership capacity in our major regions.
We are continuing to refresh and expand
our people development activities on a global
basis to support future growth and the
increasing global reach of our business.
. Students from a local school visit Johnson Matthey’s platinum
group metals refinery in Brimsdown, UK.
. Children in India participate in ‘Healthy Body Healthy Mind’,
a programme sponsored by Johnson Matthey and which
is run by the charity Peace Child India.
Delivering Value

Stakeholder Engagement
Johnson Matthey has a wide range of
stakeholders with an interest in hearing
from or working with the company at both
a corporate and business level. Our
stakeholders include any person or
organisation that may interact with, or
have an interest in, Johnson Matthey and
include customers, employees and their
representatives, suppliers, fund managers,
shareholders, communities, governments,
non-governmental organisations (NGOs)
and national and international trade
associations. The company is also
engaged with national and local
government to inform the development
of policy in areas where our technology
and products can play a pivotal role.
Johnson Matthey meets regularly with its
major shareholders, as described in the
Corporate Governance Report on pages
98 and 99, to discuss the performance
and development of the group’s businesses,
including matters relating to sustainability
and corporate social responsibility.
We aim to provide meaningful and
transparent communications to meet the
needs of all stakeholder groups and deliver
information to them in the most appropriate
format. These formats may include annual
performance reports, participation in
performance indices (Carbon Disclosure
Project, FTSE4Good, for example) or one
to one discussions on specific topics. In
March 2012 the company launched its
new corporate website. The site has been
developed to provide more in depth
information for all stakeholder groups with
enhanced navigation to enable users to
find the information they need more
quickly. We communicate with our
stakeholders throughout the year and
engagement is integrated into our business
decision making processes. This 360 degree
dialogue is essential in providing all parties
with a rounded view of all material issues
and helps all to shape their actions and
strategies to move forward on these
matters. For further details on our
stakeholder engagement activities, including
a stakeholder map, visit the company’s
website at www.matthey.com/sustainability.
Developments in 2011/12
We have continued to see evidence this
year of the increasing importance of
governance matters in our supply chains
and have completed a number of
questionnaires received from our
customers and suppliers regarding our
environmental, social and ethical practices.
We remain actively involved with the
key trade associations and industry
organisations that are connected with our
business activities as an effective way of
understanding, shaping, participating and
contributing to a range of discussion areas
relevant to the company’s stakeholders,
and those of the broader industry and
market sectors in which we operate.
Our involvement and discussions
may cover areas such as climate change,
emerging regulation, legislation, health and
safety, standards and guidance. Emerging
issues that may have a material impact on
our industry sectors are also carefully
considered. Examples of our involvement
are illustrated in the following case studies.
2012 2011
Average number of employees 9,914 9,388
Total employee turnover1 % 11.7 8.5
Voluntary employee turnover1 % 6.4 5.6
Employee gender (female)2 % 22 22
Gender of new recruits (female) % 25 23
Trade union representation % 35 38
Training days per employee 3.1 2.6
Training spend per employee3 £ 335 390
Internal promotions % of all recruitment in year 35 33
Attendance days lost per employee 5.0 5.2
Charitable donations £ thousands 645 517
1 Employee turnover is calculated by reference to the total number of leavers during the year expressed as a percentage of the average number of people employed during the
year. The analysis does not include agency workers not directly employed by Johnson Matthey.
2 At 31st March.
3 Training spend does not include the cost of in house training or the cost of employees’ wages during training.
Social
Johnson Matthey Annual Report & Accounts 2012
Report of the Directors – Business Review
Social
50
Performance Summary
In Johnson Matthey there is a strong tradition of looking after our employees, of good
community relations and of interaction with and responsiveness towards our stakeholders.
We recognise that in order to operate in a socially sustainable manner, our actions and
our policies must be focused on the long term benefits to employees, suppliers, customers,
communities and other stakeholders.
> Read more on our social policies in the Governance section on pages 79 to 81.
Visit our website for full details of our social activities and policies at www.matthey.com.

51
Stakeholder Engagement in Action
> The International Platinum
Group Metals Association
Johnson Matthey has continued its work with the
International Platinum Group Metals Association (IPA)
whose membership comprises major primary
platinum group metal (pgm) mining companies and
fabricators accounting for some 80% of annual
pgm supply. The IPA is engaged in developing a
sustainability strategy for the pgm industry and
Johnson Matthey leads its sub-committee responsible
for achieving sustainability strategy outcomes.
During the last 12 months we have helped
the IPA to develop a programme for a life cycle
inventory study which aims to measure the
environmental burdens and benefits of producing
and using platinum group metals. The study is
projected to cover the entire life cycle of the metals
from primary extraction through refining, fabrication,
use and recycling. It is intended to be used for the
internal benchmarking of the environmental
performance of the pgm industry.
Case Study
Stakeholder Engagement in Action
> Pgm Health Science
Research Group
In response to interest from our stakeholders and
as part of our voluntary product responsible care
efforts, Johnson Matthey has continued to fund and
participate in the Pgm Health Science Research
Group (HSRG), an industry sector organisation
which aims to improve the quality of existing risk
assessments for the pgms and their applications,
for example in autocatalysts. During the year
HSRG’s research programmes have delivered new
information relevant to risk assessments and in the
interests of transparency, these findings continue
to be published in appropriate peer reviewed
science journals.
Case Study
Stakeholder Engagement in Action
> The Chemical Industries
Association
Johnson Matthey is a member of the UK Chemical
Industries Association (CIA) and a number of our
senior managers and specialist advisers participate
in CIA networks and working groups. Following the
development last year of the CIA sustainable health
metrics indicator tool, which was piloted globally in
Johnson Matthey and has been integrated into our
health improvement programmes, the CIA has now
published the final version of the scorecard. It has
been made available to member companies through
launch events and the CIA has plans to roll it out
to a wider audience for more general use by the
chemical and other industries. The scorecard
underpins the leading metrics for the UK CIA’s
sustainable development goals set in 2010 for 2020.
It will allow the CIA to identify whether member
companies have the correct level of health
programmes in place and track / encourage further
improvement.
We have also continued to support the CIA’s
Responsible Care® programme as a peer reviewer
to verify other member companies.
Case Study
Stakeholder Engagement in Action
> The Prince of Wales’s
Corporate Leaders Group
on Climate Change
Johnson Matthey is a founder member of the Prince
of Wales’s Corporate Leaders Group (UK CLG) on
Climate Change, working closely on climate change
issues with 17 other leading UK businesses. UK
CLG members share our belief that there needs to
be clear, ambitious and long term policies in place
in order to mitigate the effects of climate change.
As a member of the UK CLG we helped to shape
the influential Copenhagen Communiqué which
has now been signed by almost 1,000 companies
around the world. In June 2011 the UK CLG
published ‘Seize the Day’, a new report into
government policy, that calls for stronger action on
climate leadership. In May 2012 it launched ‘Down
to Zero’, a collaboration with UK government’s
Department for Business, Innovation and Skills, that
will bring public and private companies together in
procurement compacts to deliver progressively
lower carbon goods and services into the market.
Case Study

Building a Sustainable Workforce
Recruiting the right people, developing
them and providing an environment which
motivates them to contribute and stay with
the company is fundamental to the group’s
long term performance. At Johnson
Matthey, our employees are respected as
the group’s most valuable resource and
play a vital role in building a sustainable
business. Their skills, qualities and
wellbeing underpin the company’s
success.
We recognise that our people and
culture are a particular strength and,
although the culture of an organisation is
not easy to define, there is a distinctive
culture in Johnson Matthey, irrespective of
division, business, function or geographic
location. Capturing and drawing on the
strengths of our culture will support the
group’s future growth, particularly as it
continues to expand globally. During the
year work commenced to better articulate
our company values and explore how they
can be best used to develop and grow our
business and our people.
Social continued
Recruitment and Retention
Johnson Matthey has effective recruitment
processes to support the regular
requirement for high calibre employees.
Increasingly, we are recruiting graduates
and qualified employees from beyond our
traditional bases in Europe and North
America as we continue to develop a more
internationally diverse workforce to support
our global business.
Recruiting well qualified staff is vital to
support business development, particularly
in new and emerging markets such as in
Asia, and this is achieved by appropriate
manpower planning, local recruitment and
the encouragement of international and
cross divisional mobility. It is the group’s
policy to promote from within wherever
possible and in 2011/12 35% of vacancies
were filled by internal candidates, supporting
the retention of employees and developing
their careers.
During the year we have improved
our online global recruitment systems
for external candidates, including the launch
of a new application management system
for recruitment into our UK businesses.
We have also reviewed the careers section
of the company’s website and continue to
develop it with a focus on increasing
awareness of the company and candidate
attraction. There are also plans to expand
our activities via key social media channels
to further support our global recruitment
activities.
The average number of employees
has increased by 6% this year with
continued growth in average employee
numbers in Asia (up 11%) and a 9%
increase in North America. As illustrated
in the pie chart below, Environmental
Technologies remains the group’s largest
division with over 50% of employees. In
2011/12, average employee numbers
increased across all divisions.
Johnson Matthey Annual Report & Accounts 2012
Report of the Directors – Business Review
Social
52
> Employer of Choice in Malaysia
What do Apple Days, teddy bear sales and the acquisition of new work skills
have in common? The answer, from the Emission Control Technologies site
at Nilai, Malaysia is that these are all elements in its community, welfare and
training activities. The site’s proactive approach to community participation,
together with its employee health and training programmes, have earned it the
Employer of Choice 2011 award. The awards were organised by the
Malaysian Institute of Human Resources and Jobstreet.
Initiatives at the site have included donations of old office furniture
to a school in a disadvantaged area and teddy bears to a local hospital.
Programmes to support employees’ wellbeing and development are equally
prominent. Activities related to healthier lifestyles include a health monitoring programme and ‘Apple Days’ which are held
twice a week to promote healthy eating. A large capital investment project is underway at the Nilai site and as the day to day
jobs of employees change, training will be given to enable them to develop their skill sets.
This mix of community involvement, concern for employee health and wellbeing and training to meet the needs of a
changing industry makes Johnson Matthey an employer of choice in Malaysia.
� Read the full case study at www.matthey.com/sustainability.
Case Study
Environmental
Technologies
5,568
Precious Metal
Products
2,847
Fine Chemicals
1,089
Corporate
410
Total Employees by Division
Average headcount for 2011/12

Maintaining the quality of our employee
relations is a priority for the company and
Johnson Matthey is proud of the high level
of commitment and loyalty from its people.
We have a low voluntary staff turnover,
6.4% in 2011/12 (2010/11 5.6%), with
many employees staying with the company
for their whole careers. Total employee
turnover increased this year from 8.5%
to 11.7% as a result of the closure of our
site in Brussels, redundancy programmes
in South Korea and more proactive
performance management in a number
of other countries. The table below sets
out employee turnover in 2011/12 by
geographical region. The employee turnover
figure is calculated by reference to the
total number of leavers during the year
expressed as a percentage of the average
number of people employed during the
year. The analysis does not include agency
workers not directly employed by Johnson
Matthey.
The group’s employee turnover over
the past five years is illustrated in the graph
below and shows that voluntary employee
turnover has remained steady.
Good performance in attendance rates
was maintained this year. The average
number of days lost per employee in
2011/12 due to sickness absence was
5.0 days (2010/11 5.2 days). This represents
2.0% of lost time per employee in the
working year, a slight improvement on last
year. We continue to invest in sustainable
health and wellness programmes to support
the longer term health, wellbeing and
performance of our employees.
Training and Development
The knowledge, expertise and
contributions of our employees is what
drives the business forward and as a
result, employee development is a key
element of Johnson Matthey’s strategy for
future growth. We offer training and
development programmes at career
foundation and management levels which
seek to offer a broad understanding of the
group’s businesses, give a strong base in
the company’s strategy, culture and ethics
and provide direct contact and networking
opportunities with peers and senior
managers across international boundaries.
Our programmes are aimed at developing
our talented people, encouraging
commitment to the company and building
high level skills and competences.
53
> Encouraging our Future Scientists
Many Johnson Matthey sites have educational links with their local
communities. The Future Scientist Programme, developed by employees at
Johnson Matthey’s Billingham site in the north east of England has firmly
grasped the issue of awakening pupil interest at an early stage in their secondary
education to help direct children with talent towards a career in science.
The programme builds on the site’s ten years’ of experience working
with primary school children and takes the form of three lessons, including a
practical session, all given by Johnson Matthey employees.
In all, 360 children at St Michael’s, the local secondary school, have so far
participated in the programme, with 12 teachers involved in the codevelopment
and implementation. The feedback from pupils and teachers has been extremely
positive. As one of the youngsters said, “I had not thought about a job in industry before, but I am now.”
Following on from the launch, a group from the Future Scientist Programme visited the House of Commons in the UK in
January 2012 to explain the initiative and gain wider support for the programme amid an audience of industry professionals,
Members of Parliament and government representatives.
Read the full case study at www.matthey.com/sustainability.
Case Study
Average Number of People Employed
Average headcount 2011/12
Temporary
Permanent contract
Region employees employees Total
Europe 4,868 174 5,042
North America 2,839 13 2,852
Asia 1,344 63 1,407
Rest of World 611 2 613
Total group 9,662 252 9,914
Annual Change in People Employed
Net change between 31st March 2011
and 31st March 2012
Temporary
Permanent contract Total net
Region employees employees change
Europe +145 +10 +155
North America +271 -29 +242
Asia +107 +28 +135
Rest of World -8 +2 -6
Total group +515 +11 +526
Employee Turnover by Region
2011/12
Voluntary
Total Employee employee
Region leavers turnover turnover
Europe 592 12.2% 4.8%
North America 226 8.0% 4.7%
Asia 243 18.1% 14.9%
Rest of World 65 10.6% 8.5%
Total group 1,126 11.7% 6.4%
20071 20092 20102 20112 20122
Total Employee
Turnover
Voluntary Employee
Turnover
0
5
10
15
Employee Turnover
%
1 Calendar year.
2 Financial year.

We are continuing to increase our
focus on learning and development across
the group and are expanding activities
and resources on a global basis. Our
sustainability awareness training has been
rolled out in our major regions and we are
developing a more in depth induction
programme which will be launched in
2012/13. A number of new programmes
have been introduced during the year,
both across the group and within our
businesses, underpinned by our key
themes of acting globally, people and
culture, sharing good practice and
increasing business understanding. We
have particularly increased our focus on
management and leadership development
and on coaching and mentoring to support
and develop our staff.
The group’s Manufacturing Excellence
programme, which was launched in
2011/12, places particular emphasis on
developing our manufacturing leaders and
on providing our manufacturing staff with
improvement tools to implement and
embed a culture of lean manufacturing.
Specific training modules are being
developed to target key employee groups
and encourage the sharing of best practice
across our global manufacturing operations.
Talent reviews and succession
planning are instrumental throughout our
businesses and we have robust review
processes in place to support the
international recognition and development
of management talent within the group.
Social continued
In 2012/13 a new development
programme aimed at senior leaders in
Johnson Matthey will be introduced which
will provide world class development
support to further build leadership capacity
in line with our strategy for growth.
Johnson Matthey is a strong
supporter of apprenticeship schemes as a
valuable route for training and developing
new talent. Programmes operate at a
number of our facilities around the world
and during 2011/12 several of our
businesses have introduced or expanded
their schemes. In the UK this year, the
company and its apprentices have received
recognition from government and other
organisations for their commitment and
contribution to apprenticeship schemes.
The table above sets out, on a total
and on a per employee basis, the days of
training and training spend during 2011/12.
The figure below shows the total training
spend per employee over the past five
years. The training spend does not include
the cost of in house training or the cost of
employees’ wages during training.
1 Calendar year.
2 Financial year.
Johnson Matthey Annual Report & Accounts 2012
Report of the Directors – Business Review
Social
54
> Continuing the Tradition of Apprentices
Johnson Matthey has a long tradition of apprenticeships. In fact, George Matthey,
one of the founders of the company, started his career as an apprentice at the age of
13 back in the 19th century. Today, programmes operate at many Johnson Matthey
facilities around the world and focus on a range of skills and disciplines.
At our Zurich sales office in Switzerland, which runs an apprenticeship scheme to
give three young people three years’ commercial training, apprentices work alongside
the other 26 Johnson Matthey employees there and learn a wide range of office based
skills. Our Brimsdown refinery, in the London borough of Enfield, UK, reintroduced its
apprenticeship programme in 2010 and provides training in engineering disciplines.
The site has since gone on to encourage other local businesses to do the same and
has gained support and recognition for its efforts from several UK politicians.
� �Read the full case studies at www.matthey.com/sustainability.
Case Study
Training Days and Spend on Training
2011/12
Number
of days / Total Spend per
shifts training training permanent
Total days / per permanent spend employee
Region shifts training employee £ thousands £
Europe 15,140 3.1 2,021 415
North America 6,043 2.1 527 186
Asia 4,543 3.4 490 365
Rest of World 3,947 6.5 197 322
Total group 29,673 3.1 3,235 335
20071
346
327
291
390
335
20092 2011220102 20122
0
100
200
300
400
Total Training Spend per Employee
£

The level of training activity across the
group has risen this year as indicated by
an increase in the number of days / shifts
training per employee which is up from 2.6
in 2010/11 to 3.1 in 2011/12. Although
the group’s overall external training spend
per employee has decreased this year,
spend per employee in Asia has more than
trebled, reflecting the increased focus on
employee development in the region. Our
strong and continuing commitment to the
training and personal development of all
our employees is reflected in the fact that
during 2011/12, approximately 690 internal
promotions were actioned. This represents
35% of all appointments made in the year.
Diversity
At Johnson Matthey we recognise the
importance of diversity, including gender
diversity, and the benefits this can bring
to our organisation. With regard to gender
diversity specifically, Johnson Matthey
faces challenges similar to those faced
by other organisations in the chemical,
technology and manufacturing sectors.
To address these, we have policies and
processes in place which are designed
to support gender diversity in employee
recruitment, development and promotion
and we are committed to ensuring that
women have an equal chance with men of
developing their careers within our business.
We encourage gender diversity at the early
career stage by working outside Johnson
Matthey to encourage women to enter
scientific and industrial fields. The board
is in the process of reviewing the broad
question of diversity within the group.
In accordance with applicable law,
Johnson Matthey bases all employment
related decisions on the principles of equal
employment opportunity and our policies
in this area are presented on page 81 and
the website.
The group’s gender balance was
unchanged this year at 78% male and
22% female although the gender balance
of new recruits is improving at 75% male
and 25% female.
Employee Relations and
Communication
Effective two way communication with
employees and, in particular, face to face
dialogue, is important in embedding
company culture, building commitment,
celebrating achievements and increasing
understanding of the business, its
performance and strategy. Communication
on matters of interest to employees is
exchanged through in house magazines,
attitude surveys, regular news bulletins,
presentations to staff and team briefings.
Employees are also encouraged to access
the group’s corporate intranet, sustainability
intranet and websites.
Encouraging communication between
employees is becoming increasingly
important as Johnson Matthey continues
to expand its range of business activities
and its geographic locations. Encouraging
better communication between our people
will help to promote exchange of ideas and
best practice, expedite research and
development and support the embedding
of corporate culture. Although our
company operates as separate businesses
within our three divisions, there are
common activities and themes which run
throughout the group. Our Manufacturing
Excellence programme is one example
where success is highly dependent on
engagement and communication between
employees. More generally, the group
recognises the value of such exchanges
and projects are underway to provide
enhanced internal systems that support
improved communication across our global
operations.
Employee involvement is a critical
factor in the development of an
improvement culture. Employees at all
levels are making a major contribution to
the success of our many sustainability
and lean manufacturing initiatives around
the world which provide an excellent
opportunity for staff engagement and
development.
The company continues to support
employee share ownership and employees
have the opportunity to participate in share
ownership plans, where practicable. Under
these plans, employees can buy shares in
the company which are matched by a
company funded component. Employees
in six countries are able to contribute to a
company share ownership plan or a 401k
approved savings investment plan.
Through these ownership plans Johnson
Matthey’s current and former employees
collectively held 1.77% of the company’s
shares at 31st March 2012.
77%
23%
80%
20%
80%
20%
72%
28%
78%
22%
0
20
40
60
80
100
Europe North
America
Asia Rest of
World
Group
Employee Gender by Region
%
Male

Female

. Volunteers from Johnson Matthey’s Emission Control
Technologies business in Royston, UK helped out at
the local train station to create floral displays for the
town’s ‘Royston in Bloom’ event.
. Employees and their families at our Nilai operations
in Malaysia enjoy an ‘environment, health and
safety’ treasure hunt organised by the site.

Johnson Matthey also sponsors
pension plans for its employees worldwide.
These pension plans are a combination of
defined benefit and defined contribution
pension arrangements, savings schemes
and provident funds designed to provide
appropriate retirement benefits based on
local laws, custom and market practice.
Johnson Matthey continues to
maintain good and constructive relations
with all recognised trade unions which
collectively represent 35% of all group
employees worldwide (2010/11 38%). The
following table sets out the average number
and percentage of Johnson Matthey’s
employees who were covered by collective
bargaining arrangements and represented
by trade unions by geographical region in
2011/12. During 2011/12 no working time
was lost within the group due to employee
action.
Social continued
Community Investment
Johnson Matthey has a strong tradition of
good community relations and the company
and its employees are actively involved in
programmes worldwide. We believe that
investing in our communities is an integral
part of our social commitment to ensure
the ongoing sustainable success of the
company.
Although Johnson Matthey is a global
company, we believe community investment
is about making a real difference locally
and making a positive impact in the
communities where we have operations.
We have an important contribution to
make to the economic development of our
local communities, not only as an employer
but also through collaboration and
investment, both financial and in kind, for
example by volunteering and donating
resources and expertise.
As we are global, the communities we
operate in face a wide range of priorities,
issues and challenges. As a result we aim
to ensure that our sites have the resources
and support to identify those projects,
initiatives and partnerships that can make
a real difference in their communities and
that mean something to employees and
their families. We also aim to support the
future growth of our business through the
promotion of science education among
young people.
We have four key objectives for our
community investment programmes:
• To demonstrate our commitment to
being a responsible business that
provides value beyond our products.
• To make a positive impact on the
communities in which we operate.
• To create goodwill and enhance our
reputation within our local
communities.
• To build our profile as an employer
of choice.
Guidance on site requirements for
community relations is detailed in the
group environment, health and safety
management system and a review of
community investment activities across the
group is carried out each year. In 2011/12,
the review indicates that 85% of Johnson
Matthey’s operations participated in
activities within their local communities.
These activities are wide ranging and
include charitable giving, support for
educational projects, the advancement
of science and economic regeneration
projects. The review also indicates that
95% of sites have a nominated person
responsible for this area. Looking ahead
to 2012/13, the review shows that 78%
of operations have set objectives for their
community investment activities with 65%
having planned activities for the year.
Johnson Matthey Annual Report & Accounts 2012
Report of the Directors – Business Review
Social
56
> Investing in the Local Community
Local Enterprise Partnerships are a scheme that was launched by the coalition
government in England in 2011 to foster growth at a local level. Johnson Matthey
is a leading business in Royston and so when the Hertfordshire Local Enterprise
Partnership (LEP) was formed, it was natural that Johnson Matthey should be involved
from the start. John Gourd, the Site Planning and Services Director at Royston,
accepted a position on the initial board and, subsequently, the role of chairman.
The Hertfordshire LEP is a business led partnership between local businesses,
academic institutions and local government which aims to boost the local economy
and create new jobs.
In February 2012, the chairs of all 39 LEPs around the country, including John
Gourd, were invited to meet the Prince of Wales and discuss the work of his charity,
the Prince’s Trust. Prince Charles was keen to understand how the LEPs could work
with his charity to help young people, especially in areas of high unemployment.
Our participation in the local LEP is an extension of the Royston site’s community engagement strategy and recognises the
importance of playing our part in helping to strengthen the local economy.
Read the full case study at www.matthey.com/sustainability.
Case Study
Trade Union Representation
Average headcount 2011/12
Permanent %
Region employees Represented represented
Europe 4,868 2,194 45%
North America 2,839 558 20%
Asia 1,344 306 23%
Rest of World 611 337 55%
Total group 9,662 3,395 35%

The review also indicates that 68% of
sites have specific budgets allocated to
community investment activities for the
2012/13 financial year.
Employees also participate in activities
or hold community related roles outside
the work environment. The company is
supportive of this broader community
engagement, allowing employees time off
during working hours as appropriate.
In efforts to further encourage
volunteering among employees and to
more broadly support our sites around
the world in their community programmes,
the group has developed a community
investment strategy and policy this year.
In developing the policy, Johnson Matthey
sought input from a number of its
employees, charity partners, shareholders
and other experts to ensure the policy and
strategy are relevant and deliver value for
all stakeholders.
The policy requires all sites to
undertake a community investment
programme, measure its impact and allocate
a budget for activities in the year. It also
provides additional guidance to assist sites
in developing their programmes. The policy
also sets out the group’s commitment to
encouraging its employees and sites to
support their local communities and
charities. From the start of the 2012/13
financial year, every employee will be
allowed up to two days paid leave a year
to undertake voluntary work in the local
community or with a charitable organisation
(subject to business needs and the approval
of their manager). Furthermore, the
company will match employees’ fundraising
in aid of a registered charity up to the value
of £1,000 per employee per year, with a
cap of £50,000 per annum for the group
as a whole.
57
> Volunteering in Ecuador
In October 2010, ten employees from Johnson Matthey’s Davy Process
Technology business set about raising £15,000 to enable them to
support a community project in rural Ecuador to renovate a school and
build a local nursery. After several fundraising events, generous donations
and more office cake sales than the ‘health’ element of the sustainability
programme ever envisaged, the team set off to Ecuador in July 2011.
Hosted by local Shuar families, the team was introduced to the
distinctive Shuar culture and they were also able to share some UK
traditions of their own. By the time the team left, the school buildings had
been renovated and they were ready for use. All the wood needed for the building of the nursery had been collected. For the
volunteers, it had been hard work but wholly rewarding and had given them the opportunity to show real concern for
community wellbeing, whether that community is on the doorstep of the company or far away.
�Read the full case study at www.matthey.com/sustainability.
Case Study
> Making a Difference in Sri Lanka
Johnson Matthey was swift to react, along with the global community, when
the tsunami hit the Indian Ocean on 26th December 2004. The company
made an initial donation and also made a commitment to maintain a
relationship with young victims of the tsunami by making a donation of £3,000
a year over five years to support the education of children who had been
orphaned. This money was earmarked for their school fees, supplies and extra
classes, and was intended to help them to pursue their education.
In July 2011, Johnson Matthey’s Chief Executive, Neil Carson, and his
family visited one of the schools the company supports in Sri Lanka. He saw
at first hand the impact of the funding and met some of the children who are
sponsored, including one girl who is soon to become a doctor.
Having recently reached the final year of its original five year commitment,
Johnson Matthey’s Charities Committee agreed that the company should
renew its commitment with a further five years of donations. As a result, the
group will continue to support many of the same children, along with a handful
of new students, with the aim of increasing the scope of opportunities for their
future.
Read the full case study at www.matthey.com/sustainability.
Case Study

Social Aims and Targets
We will continue to improve our recruitment
processes on a global basis to ensure that
we are well placed to recruit high calibre
employees in all our regions. Plans are
underway to further develop our online
presence and use digital media to enhance
users’ experience and encourage interest
in our business.
Alongside our efforts on recruitment,
employee training and development at all
levels will remain a key priority to ensure
we retain high potential and high
performing staff and equip them with the
technical and leadership capabilities
needed to achieve the long term goals set
out in our strategy. Plans are in place to
launch a number of new training modules
in 2012/13, including those to support the
group’s Manufacturing Excellence
programme and leadership development
in China.
Community investment remains an
important aspect of building a sustainable
business and following the launch of the
community investment strategy and policy,
work will continue to support our
operations around the world in developing
their community programmes. We will also
start to track additional performance
metrics, for example employee volunteering
days, with a view to reporting this data in
future years.
Charitable Donations
Johnson Matthey’s long history of support
for charitable causes continues today
through group and business programmes.
The causes we support reflect the areas in
which the group’s technologies have a
benefit and the issues which strike a chord
with our employees. In the financial year
to 31st March 2012 Johnson Matthey
donated £645,000 to charitable
organisations, up 25% on the prior year.
This figure only includes donations made
by Johnson Matthey and does not include
payroll giving, donations made by staff or
employee time. The company made no
political donations in the year.
Across the globe, Johnson Matthey’s
sites lend support to many charities locally
and nationally through donations,
employee time or loans of company
facilities. Examples of these initiatives are
summarised in the case study examples
in this report with full details and further
examples available on our website.
Read more online at
www.matthey.com/sustainability.
At a group level, Johnson Matthey
operates a charitable donations
programme which represented 47%
(£305,000) of total company donations
in 2011/12. This programme supports
organisations working in the areas of
environment and sustainability, medical
and health, science and education, social
welfare and international development.
The charitable donations programme
includes an annual donations scheme
where a number of charities are selected
triennially and receive a donation from the
company each year for a three year period.
Social continued
In 2011/12, 33 charitable causes received
an annual donation through this scheme.
The group’s programme also considers
individual requests for support throughout
the year and a further 67 charitable
organisations received donations on this
basis in 2011/12. The group also has a
specific programme of support focused on
promoting the understanding and
awareness of science among children and
young people and has identified several
new programmes which it will support in
2012/13.
The Johnson Matthey Educational
Trust was set up in 1967 to commemorate
the 150th anniversary of the founding of
the company. It awards scholarships to
support the university education of the
offspring of Johnson Matthey’s current and
retired employees. During the year the
Trust approved grants totalling £82,500.
The company continues to select a
charity partner to focus support on one
particular cause and employee views are
considered when identifying the charity.
The group is supporting CLIC Sargent, the
UK’s leading cancer charity for children
and young people and their families, and
other national childhood cancer charities
around the world in a two year partnership
that will run to the end of 2013/14.
Johnson Matthey is a member of the
London Benchmarking Group (LBG), a
global network of companies that share
and drive best practice in corporate
community investment.
Johnson Matthey Annual Report & Accounts 2012
Report of the Directors – Business Review
Social
58
Social welfare
34%
Science and
education
23%
Medical
and health
21%
International
development
4%
Environment
and sustainability
1%
Other
17%
Charitable Donations – Corporate
(central group donations)
% of total (£305,000) donated by
charitable type
2008
495
415
458
517
645
2009 20112010 2012
0
100
200
300
400
500
700
600
Charitable Donations
£ thousands
Corporate
(central group
donations)
47%
Environmental
Technologies
30%
Precious
Metal Products
15%
Fine
Chemicals
6%
Other
corporate
functions
2%
Charitable Donations 2011/12

59
> Working Together to Support Children
with Cancer
Every two years, Johnson Matthey selects a charity partner in the UK and
centres its fundraising activities on that cause. Sites in other countries are
encouraged to find and support a similar charity.
Johnson Matthey has chosen CLIC Sargent, a leading UK cancer charity,
as its charity partner for 2012 to 2014. CLIC Sargent supports children and
young people who have been diagnosed with cancer. It helps them and their
families by providing clinical, financial and emotional support.
Funds raised go towards a range of services: financial support, free breaks
for families, ‘play’ specialists who use play to help children understand the
procedures involved, free self-catering accommodation close to specialist
hospitals and more.
CLIC Sargent is affiliated to the International Confederation of Cancer Parent Organizations, which has member
organisations on five continents. Johnson Matthey’s operations around the world have been invited to get involved and
support their local childhood cancer charity.
The company’s charity partnership provides a focus for employee fundraising and the sums raised provide a very real
support to the charity. In the previous partnership, over £70,000 was raised to support the British Heart Foundation.
Read the full case study at www.matthey.com/sustainability.
Case Study
> Revitalising the Field of Dreams
The Field of Dreams is a recreational playground in West Deptford, New Jersey,
USA. Once a fairyland of turrets, walkways and dedicated play areas, it was
originally built by community volunteers in 1996. The park is close to
Johnson Matthey’s West Deptford site and employees themselves have used
the park for family outings.
Time has, however, taken its toll and the Field of Dreams had become in
need of repair, with its once colourful towers weather beaten and worn and
the protective mulch ground down to bare dirt. It was in need of love.
Johnson Matthey, together with another local company, has come to the
rescue with donations of much needed funds and with employees volunteering
their time to restore the park to its former glory. The project was completed in
May 2012 and Johnson Matthey’s West Deptford site is proud to have been
able to help realise the dreams of local children.
Read the full case study at www.matthey.com/sustainability.
Case Study

Johnson Matthey Annual Report & Accounts 2012
Report of the Directors – Business Review
Health and Safety
60
A key priority
Health and Safety
This section outlines our approach to health, safety and product stewardship,
our performance in the year and the programmes we have in place to drive
continuous improvement.
> Investing in New Capacity
With ever increasing concerns over the
availability of natural resources, countries
around the world remain focused on ensuring
their energy security and continue to seek to
reduce their dependence on the use of
imported oil.
In China, which has low natural gas
reserves and lots of coal, there is particular
interest in converting coal into substitute natural
gas (SNG) and Johnson Matthey has leading
technology and catalysts for this process.
Investments at our Process Technologies
business’ Panki site in India are increasing
capacity for manufacturing SNG catalysts
to meet demand from customers in China.
Projects to construct new facilities are well
underway and several upgrades to our existing
assets have been completed. As well as
boosting capacity, these upgrades have
included a number of health and safety
improvements to provide an enhanced
working environment for our employees
at Panki.
Delivering Value

Contents
62 Performance Summary
62 Managing Performance and Driving Continuous Improvement
62 Health Performance in 2011/12
63 Sustainable Health Improvement Priorities for 2012/13
63 Safety Performance in 2011/12
64 Safety Priorities for 2012/13
64 Product Stewardship
65 Product Stewardship Performance in 2011/12
65 Product Stewardship Priorities for 2012/13
66 Animal Testing
67 Responsible Care
67 Regulatory Matters
. Inside the control room of a recently completed facility at Panki.. Employees at Panki outside one of the new catalyst
manufacturing facilities.

Health and Safety
Johnson Matthey Annual Report & Accounts 2012
Report of the Directors – Business Review
Health and Safety
62
Many of Johnson Matthey’s products and
services make a contribution to enhancing
general health and wellbeing or provide
safety benefits. We manufacture a range
of products used in medical applications.
These include opiate based active
pharmaceutical ingredients (APIs) for pain
relief, such as morphine and codeine,
platinum based anticancer compounds for
chemotherapy treatments, other controlled
substance APIs, components used in
medical devices which are used to assist
with surgery or treat long term medical
conditions and Bitrex®, the world’s bitterest
substance, which is added to household
cleaning products to prevent accidental
swallowing by children. Our emission
control catalysts, which are used to reduce
harmful emissions from vehicles and
industrial processes, have a major impact
on air quality for millions of people around
the world.
Targets to improve health and safety
performance are a key part of our
Sustainability 2017 Vision. The group aims
to achieve zero greater than three day lost
time accidents and to reduce its incidence
of occupational illness cases by at least
30% over five years to 2013/14. In order
to meet these aspirations, long term
health and safety improvement plans
and performance indicators have been
established.
Read more on Sustainability 2017
on pages 13 to 15 and at
www.matthey.com/sustainability.
> Read more on our progress towards
Sustainability 2017 on page 17.
Read more on the health and safety
benefits of our products at
www.matthey.com/sustainability/
products.
Managing Performance and
Driving Continuous Improvement
Johnson Matthey is a manufacturing
business and a significant proportion of our
employees work in production environments
with chemicals and process machinery.
Rigorous policies, systems and processes
apply across all facilities to monitor and
manage health and safety performance
and to drive continuous improvement.
> Read more in the Governance section
on pages 80 and 81.
Read full details of our policies
and strategies to manage and
drive performance at
www.matthey.com/sustainability.
Proactive management of health and
safety delivers value for our business in
many ways. It can assist in the avoidance
or reduction of liability claims, potential
legal exposure, concern over the cost of
insurance premiums and external pressures
from insurance companies. In addition,
it helps support maintenance of the
group’s corporate reputation, expectations
of its customers and in meeting
government targets. Most importantly it
supports our moral obligations to our
employees and other stakeholders and,
when effectively managed, can have a
positive impact on staff morale, attendance,
recruitment and retention and on our
productivity, efficiency and quality of service.
Health Performance in 2011/12
In 2011/12 we have continued to
consolidate the sustainability of our
corporate and facility health programmes.
From May 2011, longer term health
improvement goals were incorporated into
the group’s ten year environment, health
and safety (EHS) strategy and good
progress has been made during the first
full year of its implementation.
The proportion of facilities globally
who reported that they had complied with
the requirement to conduct an annual
sustainable health review and improvement
planning process rose again this year to
90%, which is the highest level achieved
since this corporate requirement was
introduced in 2006.
Good progress has been made
against our Sustainability 2017 target to
reduce the annual incidence of occupational
illness cases by at least 30% over five
years to 2013/14 (to 3.7 cases or less per
1,000 employees). The occupational illness
incidence in 2011/12 was 3.5 employee
cases per 1,000 employees (0.17 employee
cases per 100,000 work hours), ahead
of the group target and maintaining our
performance in 2010/11. In addition,
one case of chemical exposure related
occupational illness occurred amongst
contractors as a result of workplace
exposure at a Johnson Matthey facility.
Chemical exposure related illnesses
and musculoskeletal conditions accounted
for 86% of reported occupational illnesses in
2011/12. Chemical exposure management
and ergonomic risk management therefore
continue to be the two highest priority
health programmes.
During the year a working group was
established to develop and implement an
ergonomic risk management programme
at all facilities. The group has identified and
engaged a US based ergonomic consulting
practice from which we will license
ergonomic assessment tools, technical
guidance and training materials.
Performance Summary 2012 2011 % change
Incidence of greater than three day accidents per 1,000 employees 2.07 2.99* -31
Total number of accidents that resulted in lost time 55 74* -26
Total accident rate per 1,000 employees 5.69 7.89* -28
Total lost time accident incident rate per 100,000 hours worked 0.28 0.40* -30
Total number of accident days lost per 1,000 employees 90 102 -12
Incidence of occupational illness cases per 1,000 employees 3.5 3.5 –
* Restated.
Johnson Matthey is committed to minimising the health and safety related impacts for
employees, customers, communities and other stakeholders arising from our operations
and from our products in use.

. Manufacturing active pharmaceutical ingredients at our
Riverside facility in Conshohocken, USA.
. Employees discuss progress at a team meeting in our
Emission Control Technologies business.
We have also made further progress
in the group’s chemical exposure
management programme. Through
evaluating progress of its implementation
we have identified areas of additional
action, resources and support needed to
complete the programme over an
appropriate timescale. New policy and
guidance on the prevention, identification
and management of occupational illness
and on first aid and medical emergency
response have also been introduced.
During the year we have used leading
health metric data from a scorecard
completed by all facilities to support
managers in identifying the actions needed
to achieve a best practice level of health
programme performance. In addition,
trends in health scorecard ratings have
been communicated to regional and
divisional management teams to engage
them in prioritising and directing health
improvement activities.
The group has comprehensive
programmes in place to prevent, identify
and manage all types of occupational
illness conditions at every facility. These
include chemical related, musculoskeletal,
mental health and physical agent related
illnesses (noise and hand-arm vibration).
The elements of these programmes are
summarised in the table above (based on
guidance provided in the Global Reporting
Initiative reporting guidelines).
Sustainable Health Improvement
Priorities for 2012/13
We will continue to focus on reducing the
incidence of occupational illness to the
lowest level reasonably achievable and to
optimise the long term health, wellbeing
and performance of our workforce.
The key activities in 2012/13 to address
further health programme improvement
through the group’s ten year EHS strategy
are to:
• Appoint a corporate industrial hygiene
manager to provide technical advice,
support and coaching on the
assessment and control of workplace
health hazards to all global facilities.
• Commence a programme of regional
training courses to support the
introduction of ergonomic risk
management programme tools to each
facility which will run into 2013/14.
• Introduce new corporate EHS policy
and guidance on the prevention and
management of platinum group metal
compound health effects and noise
exposure management.
• Incorporate workplace health hazard
evaluation and control into the group’s
Manufacturing Excellence programme
activities, for example, when defining
best practice guidance for the design
and operation of manufacturing
processes.
• Continue to emphasise the
management of leading health metric
indicators at all facilities through the
use of the health scorecard and other
techniques.
• Support the specific regional health
programme improvement needs of
our facilities in developing countries.
• Revise and adjust the content and
frequency of the health management
review (audit) programme to target
this more effectively according to
indicators of facility health programme
performance.
• Develop further sustainable health and
wellness initiatives relevant to the
regional and site specific health needs
of the workforce.
Safety Performance in 2011/12
Accidents and incidents are actively
monitored and detailed statistics are
compiled monthly at group level and used
by the Chief Executive’s Committee and
the board at their regular meetings to
review safety performance. Any accident is
thoroughly investigated to determine root
causes and appropriate preventative and
corrective actions are assigned. The
group’s rate of occupational accidents
involving lost time is shown in the table on
page 62 and its five year performance is
presented in the graphs on page 64.
Details of our methodology for calculating
accident statistics is described on page 172.
During 2011/12, despite increasing
production levels, we have observed an
improvement in safety performance and
the group’s greater than three day lost time
accident rate per 1,000 employees at
31st March 2012 is at its lowest year end
level recorded. This good result has been
achieved through raising awareness of the
importance of health and safety which has
led to the introduction of improved accident
control measures. In addition, there has
been particular focus at sites with higher
than average accident rates with one facility
piloting a culture improvement system
which will be used more widely across the
group in the coming year. Our EHS Learning
Events programme has continued to deliver
good results, particularly at facilities
submitting a higher number of EHS
Learning Event reports.
Occupational Illness Assistance Programmes
Programme recipients Education / training Counselling Prevention / risk control Treatment
Workers Yes Yes Yes Yes
Workers’ families n/a n/a n/a n/a
Community members n/a n/a n/a n/a

For Johnson Matthey any accident is
unacceptable and our Sustainability 2017
target is to achieve zero accidents that
result in more than three days’ lost time.
In 2011/12, 83% of our facilities achieved
zero greater than three day accidents and
at a group level we completed 57 days
without a greater than three day accident.
The health, safety and wellbeing of
contractors who are working on our sites
are of equal importance to those of our
employees and the group has safety
performance metrics specifically for
contractors, similar to those for our
employees. These temporary workers are
engaged typically to cover periods of long
term sickness absence or maternity leave,
or to manage seasonal variations in
workload. In 2011/12 there were eight lost
time contractor accidents (three of which
were greater than three days) compared to
12 lost time contractor accidents in 2010/11
(five of which were greater than three
days). This is equivalent to an annual total
lost time accident frequency rate of 0.27
accidents per 100,000 hours worked per
year (2010/11 0.50 accidents per 100,000
hours worked per year).
During the year we strengthened
our audit policy to include one day follow
up reviews of audit recommendations
to be conducted one year after the
recommendations were made. A total of
19 one day reviews were undertaken this
year in addition to 26 full audits across the
group. Conducting these follow up reviews
has significantly reduced repeat actions at
subsequent audits.
Health and Safety continued
The group’s EHS Learning Events
programme has been reinvigorated and
developed into a full environment, health
and safety near miss reporting system.
During the year all greater than three day
lost time accidents were analysed and
compared with the accident types reported
locally through the EHS Learning Events
programme. This has allowed us to
determine the effectiveness of EHS
Learning Events to help reduce accidents
in the workplace and has highlighted
further opportunities to improve the
programme going forward.
This year we have continued to
develop our process risk management
(PRM) programmes to develop best
practice and drive improvement in process
safety systems across our operations.
In 2011/12 two process safety audits
(one in Europe and one in North America)
were conducted and these identified a
series of improvement actions. We have
also established a European PRM working
group of engineers from our facilities in
the region. The group meets twice a year
to discuss PRM related issues, review
industry case studies and identify further
improvement opportunities.
Safety Priorities for 2012/13
Our principal priority remains that of
achieving the group’s target of zero greater
than three day accidents and there is an
overall trend of continued improvement.
Wider implementation of the EHS culture
improvement programme piloted in
2011/12 is seen to be critical in speeding
up improvement in our performance
towards this target.
The key activities for 2012/13 to
address safety improvement through the
group’s ten year EHS strategy are to:
• Roll out the EHS culture programme
to selected businesses and develop
a core set of Johnson Matthey EHS
behavioural standards through
consultations with the group’s
businesses.
• Complete the schedule of corporate
EHS audits at facilities across the
group, including audit action reviews
and legal compliance audits.
• Review current approaches to EHS
governance assurance through
measurement, reporting and audit
programmes to determine how these
should be developed to meet future
business needs.
• Continue to develop the work of the
European PRM working group and
establish a similar group in North
America.
• Deliver fire prevention training seminars
regionally, focusing on platinum group
metal fires and combustible gas safety.
• Develop leading metrics for our safety,
environmental, PRM and product
stewardship programmes and
incorporate them into our corporate
EHS reporting systems.
Product Stewardship
Product stewardship involves an integrated
approach to products, materials and
services management designed to assess
objectively and then minimise or eliminate
the environmental and health related
impacts of products.
Johnson Matthey Annual Report & Accounts 2012
Report of the Directors – Business Review
Health and Safety
64
March
2007
March
2008
March
2009
March
2011
March
2010
March
2012
Total accident rate > 3-day lost time accidents
0
3
6
9
12
Annual Accident Rate
per 1,000 employees
March
2007
March
2008
March
2009
March
2011
March
2010
March
2012
0
30
60
90
120
150
Annual Accident Days Lost
per 1,000 employees

As part of our commitment to
sustainability, we fully acknowledge that all
the chemicals we use and produce must
be managed responsibly. Our product
stewardship systems are aligned to a key
target in the Strategic Approach to
International Chemicals Management
(SAICM). This is to ensure sound
management of chemicals throughout their
complete life cycle, so that ‘chemicals are
produced and used in ways that minimise
significant adverse impacts on human
health and the environment’.
Johnson Matthey maintains a long
standing commitment to product safety
and conducts systematic and rigorous
evaluations of both new and existing
products. Our product stewardship
management systems focus on the
characterisation of any risks associated
with product use, a thorough determination
of related risk management measures and
mechanisms to effectively communicate
this information outside the company.
We work in cooperation with industry
partners and customers, regulators and
non-governmental organisations to
strengthen confidence in our products.
Johnson Matthey’s businesses have
management systems in place which
assess the health and safety impacts of
products during their various life cycle
stages. These include coverage of:
• The product concept and research and
development stage. This activity is
undertaken centrally or by businesses
as appropriate.
• Manufacturing and production.
• Storage, distribution and supply into
markets.
• The in use service life phase.
• The end of life or reuse phase.
Product Stewardship
Performance in 2011/12
A systematic product responsibility reporting
scheme (conforming to the Global Reporting
Initiative Sustainability Reporting Guidelines)
is used to monitor the performance of our
operations and maintain surveillance of the
company’s products and services. In
2011/12, there were no notifications of
significant end user health effects involving
our products and no major incidents or
environmental releases during our product
distribution were recorded. No product
recalls occurred for safety reasons. There
were a total of three self detected incidents
of non-compliance with standards or
codes of practice covering product hazard
communication which were resolved
internally by the businesses involved.
During the year enhanced internal
product stewardship systems for reviewing
new and existing products were launched
and are being implemented by our
businesses. These new systems incorporate
industry best practice guidelines and set
schedules for product reviews at the
pre-commercialisation stage and thereafter.
They also place increased focus on
supporting our supply chains, for example
through conducting end use risk
assessments. Updated policies and
guidance covering restricted substance
management and products that are subject
to trade controls were issued to our
businesses globally. We also published
additional new health protection and
environmental information for precious
metal containing products for our supply
chains.
Further training and technical support
for our established internal product
stewardship programme covering chemical
exposure management were introduced
this year as we work to reduce chemically
related occupational illness within our
workforce to the lowest level feasible.
In response to interest from our
stakeholders and as part of our voluntary
product responsible care efforts, Johnson
Matthey has continued to fund and
participate in the Pgm Health Science
Research Group. Further details are
provided on page 51.
Product Stewardship Priorities
for 2012/13
Johnson Matthey remains committed to
driving improvement in product sustainability
and effective product stewardship in the
external supply chain and within our
operations.
The key activities for 2012/13 to
address product stewardship improvement
through the group’s ten year EHS strategy
are to:
• Encourage the responsible
management of substances throughout
the supply chain.
• Enhance product sustainability as part
of our overall corporate sustainability
programme with a particular focus on
managing restricted substances, the
use of optimisation strategies during
new product introduction and the
application of green chemistry
approaches in product design.
65
> The Right Kind of Fruit Machine!
Johnson Matthey sites around the world are concerned with the occupational health
of employees, but the company’s commitment to staff health and wellness goes
beyond that. The Pilar site in Argentina has recently launched a wellness programme
to complement an existing initiative, started by employees themselves, to improve
fitness and counter the ill effects of a sedentary lifestyle.
The site was assisted by the company doctor (to advise on diet) and a personal
trainer (to help with fitness). Steps were also taken to create an environment where
people had access to healthy food during the working day. Dispensers offering cereals
were introduced in the dining area for those taking breakfast on site and a fruit
machine was installed to help all employees reach their ‘five a day’ portions of fruit
and vegetables. Every month, the company gives each employee 20 tokens to use to
obtain fruit from the machine – with the result that employees get the chance to eat
fresh fruit every day at work. Uptake has been excellent and at least 90% of
employees at Pilar now eat fruit on a daily basis at work.
Read the full case study at www.matthey.com/sustainability.
Case Study

• Use systematic substance selection
mechanisms to identify preferred
alternatives in terms of human health
and environmental safety.
• Continue to improve the publicly
available information on the health and
environmental effect profiles of any
chemical substances placed on the
market and link this to updated risk
management measures.
• Promote the use of objective hazard
ranking techniques and related
exposure control targets for our
chemical products and process
intermediates. These will be applied
in Johnson Matthey’s workplaces and
more widely in our product stewardship
and risk management activities
throughout the supply chain.
During 2012/13 we will also build on
our capability to track and manage new
regulatory initiatives, for example those in
Asia, and to better respond to our supply
chains and other external stakeholders on
product sustainability. We will also continue
to support the work of our businesses to
develop a minimum standard set of EHS
data for all bulk products marketed at lower
production volume (i.e. approaching 1 tonne
per annum).
Health and Safety continued
Animal Testing
In common with all companies developing
and marketing chemical substances,
Johnson Matthey must comply with
international legislation to make toxicity
information available to assure product
safety for humans, wildlife and the
environment. We are committed to ethical
principles of animal protection and our
corporate policy is based on the following
principles:
1. Johnson Matthey has embraced the
‘3Rs’ approach in relying on properly
validated alternative methods which
reduce, refine or replace the use of
animal testing. Therefore we now
place emphasis firstly on applying the
latest integrated testing strategies
(e.g. in vitro assays, computer
modelling of effects and in vivo test
waiving approaches). New 3R
techniques are continually tracked
and implemented as they become
endorsed by regulatory bodies.
2. If, after confirming that suitable data
does not already exist, in vivo studies
are unavoidable, we always seek to
limit new testing and avoid
unnecessary studies by undertaking
collaborative work with industrial
partners.
3. It is ensured that any studies comply
with all applicable laws, regulations,
licensing and welfare codes.
4. Johnson Matthey only uses fully
accredited contract research
organisations and does not undertake
any in house toxicity testing.
5. As a fundamental operating principle,
our oversight procedures require that
our businesses commission no
vertebrate animal studies until a
justification has been carefully
considered and approved at group
level.
The group does not manufacture any
cosmetics or consumer goods and testing is
therefore aligned to regulatory requirements
for industrial substances. Any testing
required as a result of registration
requirements imposed under the EU
REACH regulation is minimised by working
within industry consortia.
Johnson Matthey shares current
societal and political concern over animal
testing and we only commission studies
when mandated by law and if no alternatives
exist. During the last year, Johnson
Matthey has continued to provide financial
sponsorship for external educational
programmes aimed at increasing awareness
of 3Rs alternative approaches. We remain
optimistic that advances in toxicology
science will enable us to further reduce in
vivo testing while continuing to safeguard
human health and the environment.
Johnson Matthey Annual Report & Accounts 2012
Report of the Directors – Business Review
Health and Safety
66
> National Safety Day Activities at Panki
National Safety Day is an annual event in India and the Johnson Matthey site at Panki,
Kanpur, celebrated the occasion with a mix of serious and light hearted activities.
In fact, the Safety ‘Day’ stretches into a whole week and the Panki site opted
to meet on 5th and 12th March 2012. The serious side of the occasion was a seminar
on personal level risk assessment and any hazards and safety challenges at the site.
The seminar held an ‘open mike’: would-be speakers applied via departmental heads
and were given five minutes to speak.
A slogan and poster competition contributed to the light hearted side of the
event and entries were accepted in both Hindi and English. There was also
recognition of achievements, with a number of staff who had done first aid training
in the year receiving St John’s Ambulance certificates. Eight EHS champions were
recognised and 14 others received appreciation awards.
The National Safety activities create an enjoyable shared experience for
employees, encouraging them to engage with the health and safety aims of the
Sustainability 2017 Vision.
Read the full case study at www.matthey.com/sustainability.
Case Study

Responsible Care
Johnson Matthey has aligned its operating
practices with the principles of Responsible
Care® (as defined in the Global Charter
developed by the International Council of
Chemical Associations (ICCA)) and with
sustainable development goals and guiding
principles (for example those outlined by
the UK Chemical Industries Association in
its ‘Chemistry of Sustainability’ report).
Responsible Care® is a voluntary
programme in which companies commit to
continuously improve their environmental,
health and safety performance. It places
particular emphasis on product stewardship
and sustainability, and communication with
stakeholders about their products and
processes.
Regulatory Matters
Chemical Control Regulations (REACH,
GHS, TSCA and Related Standards)
Substantial progress has been made this
year to develop further our testing and
evaluation programmes in support of our
scheduled product registrations for the
next EU REACH regulation milestone in
mid 2013 (covering medium tonnage
substances). We continued to participate
in industry consortia to maximise data
sharing opportunities and to reduce costs.
Preparations for compliance with new Asia
region REACH equivalent regulations are
also underway.
The majority of the group’s products
now conform with the current requirements
of the Globally Harmonised System (GHS)
for chemical classification and hazard
communication. Following the
announcement of US implementation of
GHS (‘HazCom 2012’), we are also
working to implement the associated
workplace and hazard communication
requirements for this major system.
> Behavioural Safety at Redwitz
A strong safety culture is key to industrial site safety. Analysis of accidents and
incidents at the Johnson Matthey site at Redwitz in Germany showed that
behaviour played a significant role and a behavioural safety programme was
set up to improve the safety culture.
The programme was launched in the summer of 2011 and was facilitated
by a specialist industrial psychologist. In the first phase, 98 employees
participated as managers, supervisors and operators met to assess the site’s
safety performance. In the second phase of the programme, managers and
supervisors developed safety behaviour standards which define the behaviour
that is expected of everyone on site. These standards are being
communicated to all employees and integrated into induction and staff training
programmes.
All employees were involved in the programme and a collective ownership
of safety has emerged. Results to date have been very promising; all lost time
accidents have been reduced by more than 40% and greater than three day
accidents have been reduced to zero. However, even this is not enough. In
order to make further improvements, the site is continuing its behavioural safety
programme and plans are in place to roll out the programme to other sites.
�
Read the full case study at www.matthey.com/sustainability.
Case Study
. Our Catalysts and Chemicals business develops and commercialises
catalyst technologies for customers in the pharmaceutical and fine
chemical industries.
. Manufacturing decorative precious metals for glass and
ceramics at our Maastricht facility in the Netherlands.

Johnson Matthey Annual Report & Accounts 2012
Report of the Directors – Business Review
Environment
68
Reducing the
impact of our
operations and
developing
beneficial
products
Environment
This section provides more detail on the impact of our business on the
environment. It details the environmental performance of our operations
in the year and highlights the beneficial impact of our products.
> Developing the
Next Generation of
Sustainable Products
Research and development efforts at Johnson
Matthey are focused on the development
of new, more sustainable products for our
customers. With continued interest around
the world in the development of fuels from
renewable resources, our scientists are
applying their expertise in catalysis to develop
cost competitive routes to hydrocarbon fuels
derived from non-food biomass.
In one collaborative research project,
which is funded by the US Department of
Energy, we are investigating technology that
turns carbon dioxide into liquid transportation
fuels. Organisms, such as algae, are highly
efficient at converting carbon dioxide into fatty
acids and triglycerides and at Johnson
Matthey we are developing state of the art
catalysts that will convert those fatty acids and
triglycerides into hydrocarbon fuels.
The project aims to develop technology
that is not only cost competitive with
petroleum derived fuels, but that is also more
sustainable than existing biofuels. Progress
to date has been showcased at the recent
ARPA-e Energy Innovation summit in
Washington, US where a half litre sample of
biorenewable diesel, produced using Johnson
Matthey’s patented catalyst technology, was
on display.
Delivering Value

Contents
70 Performance Summary
70 Managing Performance and Driving Continuous Improvement
70 Environmental Performance in 2011/12
74 Environmental Aims and Targets
75 Biodiversity
. Johnson Matthey’s nitrous oxide abatement systems have contributed
to reductions equivalent to over 35 million tonnes of carbon dioxide
from nitric acid manufacturing plants.
. Our emission control catalysts have a beneficial impact
on the environment by improving air quality for millions
of people around the world.

A major part of our business involves
applying our scientific knowledge and
expertise to turn natural resources into
more valuable products for our customers.
Natural resource costs are likely to increase
in future as they are depleted or become
harder to access. Our Sustainability 2017
and Manufacturing Excellence programmes
both focus on increasing the efficiency with
which we use these valuable resources
and will generate cost savings for our
business today and help to conserve
resources for the future.
In addition, as leading recyclers and
refiners of precious metals, we draw on
our expertise in this area to enhance the
resource efficiency of our own operations
and provide improved solutions and
services for our customers.
Many of the group’s products have a
positive impact on the environment including
emission control catalysts for vehicles,
process catalysts that improve resource
efficiency and abatement systems which
mitigate the production of greenhouse
gases. A significant proportion of our R&D
efforts are directed towards developing
the next generation of environmentally
beneficial products.
> Read more about how we use life
cycle assessment tools to better
understand and improve the
sustainability credentials of our
products on page 29.
> Read more on our product stewardship
systems in the Health and Safety
section on pages 64 to 66.
Environment
Targets to improve environmental
performance are a key part of our
Sustainability 2017 Vision. The group aims
to cut its carbon intensity by half, achieve
zero waste to landfill and halve the key
resources per unit of output consumed by
2017. In order to meet these aspirations,
long term environmental improvement
plans and performance indicators have
been established.
Read more on Sustainability 2017
on pages 13 to 15 and at
www.matthey.com/sustainability.
> Read more on our progress towards
Sustainability 2017 on page 17.
Read more on the environmental
benefits of our products at
www.matthey.com/sustainability/
products.
Managing Performance and
Driving Continuous Improvement
The group has robust policies, systems
and processes in place to manage its
environmental performance and to drive
continuous improvement.
> Read more in the Governance section
on pages 80 and 81.
Read full details of our policies
and strategies to manage and
drive performance at
www.matthey.com/sustainability.
ISO 14001
When launched in December 2007, the
group’s Sustainability 2017 Vision included
a target to achieve ISO 14001 certification
at all major manufacturing sites and by
the end of 2010/11 all but one of our sites
had achieved certification. This year, the
final site has achieved its certification and,
as detailed previously on page 15, this
target has now been removed from the
Sustainability 2017 Vision. We still believe
that ISO 14001 is an important standard
that should be maintained by our sites and
achieved by new or acquired facilities
within two years of beneficial operation or
acquisition. As a result, this requirement
has now been included in our environment,
health and safety (EHS) management
system.
Environmental Performance
in 2011/12
Johnson Matthey undertakes a
comprehensive annual review of group
environmental performance which covers
all manufacturing and research and
development facilities. Data is presented
for a five year period for nine key
environmental indicators and data is
presented on a financial year (unless
otherwise stated).
Business expansion has had a direct
impact on our environmental performance
this year with increases in eight of the nine
key environmental indicators we report.
The increases in our emissions and use of
resources have arisen as a result of a full
year’s data in 2011/12 from sites acquired
during 2010/11 (Process Technologies’
Savannah, USA site and Fine Chemicals’
Johnson Matthey Annual Report & Accounts 2012
Report of the Directors – Business Review
Environment
70
Performance Summary 2012 2011 % change
Energy consumption thousands GJ 4,726 4,749 –
Total global warming potential thousand tonnes CO2 equivalent 417 415 –
Total acid gas emissions tonnes SO2 equivalent 444 318 +40
Total VOC emissions tonnes 189.8 185.7 +2
Total waste tonnes 120,363 113,671 +6
Total waste to landfill tonnes 10,708 6,165 +74
Water consumption thousands m3 2,201 2,076 +6
Johnson Matthey has an impact on the environment in many ways: through the
resources we use, the way we operate our processes and the action of our products
and services on enhancing the environment for others.

Riverside facility in Conshohocken, USA),
recently commissioned facilities reaching
full production and from incremental
increases across the group’s manufacturing
operations as demand for our products
increased. Despite these absolute increases,
six out of nine of our environmental metrics
increased at a rate below the rate of
growth of the group’s sales excluding the
value of precious metals (sales) as
illustrated in the graphs and tables in this
section of the report. There were no
significant fines and no non-monetary
sanctions for non-compliance with
environmental laws and regulations in
the year.
Energy Consumption
The group’s total energy consumption was
essentially flat this year at 4.7 million GJ
but reduced by 15% relative to sales
benefiting from programmes at our sites to
improve energy efficiency. Of the energy
consumed in 2011/12, 65% arose from
direct sources (i.e. various fuels and natural
gas combusted by the group) and 35%
from consumed electricity generated by a
supplier. The global energy bill for 2011/12
was £54.7 million, an increase of £3.0 million
compared with 2010/11, reflecting higher
global energy costs.
Global Warming Potential
We report greenhouse gas emissions from
process and energy use and convert the
total group energy use to tonnes of carbon
dioxide (CO2) equivalent using national
and regional conversion factors for each
emissions source as appropriate. The
group’s total global warming potential (GWP)
is based on our Scope 1 and Scope 2
emissions (as defined by the greenhouse
gas protocol www.ghgprotocol.org).
In 2011/12 the group’s GWP
increased only very slightly by less than 1%
to 417,407 tonnes CO2 equivalent, which
represents a good result given the inclusion
of a full year’s data from the Savannah and
Riverside sites and increased demand for
our products. Of this year’s total, 38%
resulted from Scope 1 emissions (generated
by the direct burning of fuel, predominantly
natural gas) and 62% from Scope 2
emissions (generated by the purchase of
grid electricity). The group also made good
progress towards its Sustainability 2017
target to halve carbon intensity in 2011/12
with a year on year reduction of 14% in
GWP relative to sales.
Johnson Matthey does not own the
ships, trucks or aircraft used to transport
its products and so emissions from
transportation are not included in the data.
The majority of our products are high value
but low volume and so the carbon produced
by transportation is low relative to other
carbon intensity indicators, for example
Scope 2 emissions.
We also report indicative data for our
CO2 emissions from travel by employees
on company business and collect data
from all sites. While we recognise this data
does not represent all emissions as a result
of company travel, it does provide an
indicator and year on year comparator.
In 2011/12 CO2 emissions from air travel
by employees on company business were
6,263 tonnes and emissions from company
car travel were 1,569 tonnes. We continue
to develop our work on assessing the
carbon footprint of our business, including
ways to expand the level of information we
collect on our indirect carbon emissions,
to include emissions from third party
transportation of our products by air, sea,
rail and road.
. Developing catalysts and components for fuel cells,
a technology for generating low carbon power.
. Operations at Johnson Matthey Colour Technologies’
headquarters in Maastricht, the Netherlands.
2007
1
2009 2010 2011 2012
GJ (’000) GJ / £ million
sales
0
1,000
2,000
3,000
4,000
5,000
0
500
1,000
1,500
2,000
2,500
3,000
Energy Consumption
GJ (’000) GJ / £ million
sales
GJ / £ million
GJ (’000) sales
20071 3,787 2,200
2009 4,070 2,265
2010 4,001 2,121
2011 4,749 2,083
2012 4,726 1,764
1 Calendar year.
2007
1
2009 2010 2011 2012
Tonnes CO
2
equivalent
Tonnes /
£ million sales
0
100,000
200,000
300,000
400,000
500,000
0
50
100
150
200
250
300
Total Global Warming Potential (GWP)
Tonnes CO2 Tonnes /
equivalent £ million sales
Tonnes CO2
equivalent Tonnes /
(’000) £ million sales
20071 390 226.6
2009 372 207.0
2010 377 199.9
2011 415 182.0
2012 417 155.7
1 Calendar year.

The UK’s Carbon Reduction Commitment
Ongoing compliance with the UK
government’s Carbon Reduction
Commitment (CRC) does not present a
material issue for Johnson Matthey, given
that the majority of our UK facilities are
exempt from the process as they are
already being regulated under existing
climate change levy agreements that drive
year on year energy efficiency and
reduction programmes. Our facilities in the
UK account for 31% of the group’s total
GWP (Scope 1 and 2 emissions) and of the
emissions from these facilities, over 95%
are exempt from the CRC process. In the
2011/12 CRC Annual Report, to be
submitted to the Environment Agency
during July 2012, Johnson Matthey Plc will
report energy use data for its four UK
subsidiaries that are not covered by the
group’s exemption.
EU Emission Trading Scheme (EU ETS)
We are closely monitoring the potential
impacts and opportunities for our business
arising from the Phase III of EU ETS which
will be implemented in 2013.
Other Emissions
Emissions from our operations are
generated from a number of sources
including combustion processes, materials
handling and chemical reactions and are
typically licensed by local regulations. All
sites monitor emissions to ensure
compliance with these regulations and set
their own absolute targets aimed at
reducing significant emissions as part of
their local environment, health and safety
improvement plans.
In 2011/12, our total emissions of
acid gases have increased by 40% to
444 tonnes sulphur dioxide (SO2)
equivalent and were up 19% relative to
sales. This was mainly due to an increase
in emissions of oxides of nitrogen (NOx)
from our operations.
Environment continued
Compared with last year, total NOx
emissions were up 44% at 566 tonnes and
increased 23% relative to sales. The
increase on 2010/11 was due to higher
production rates at several facilities, a full
year of data from Savannah and Riverside
and from more robust data this year from
three sites that reviewed their data
collection methods for combustion
generated NOx and, as a result, have
reported more accurate values.
The group’s total SO2 emissions
increased by 4.5 tonnes (or 10%) to
47.5 tonnes but fell 6% relative to sales.
Our absolute emissions were impacted by
a 6.2 tonne increase in SO2 emissions from
our Brimsdown, UK site which was partly
due to increased use of its combined heat
and power (CHP) generator. Emissions of
volatile organic compounds (VOCs) were
4.1 tonnes (or 2%) higher at 189.8 tonnes
in 2011/12 but decreased by 13% relative
to sales. This increase is mainly as a result
of a full year’s data from Savannah and
Riverside which accounted for an additional
27 tonnes of halogenated VOCs. However,
overall, our emissions of halogenated
VOCs reduced this year.
Waste
The group generated 120,363 tonnes of
waste during the year, an increase of 6%
in absolute terms but 10% lower relative
to sales. Waste to landfill increased
significantly in the year, up 4,543 tonnes
(or 74%) to 10,708 tonnes. Achieving zero
waste to landfill by 2017 is one of the
group’s Sustainability 2017 targets and
initiatives across our sites to reduce waste
to landfill were impacted this year by the
generation of waste produced from
construction projects to expand operations
at a number of our sites.
In terms of other waste streams,
5,251 tonnes of waste were sent for
incineration (up 9%),16,023 tonnes were
sent for recovery (down 11%) and 90,677
tonnes of waste were sent for treatment
and disposal by third party waste service
providers (up 6%).
Packaging Wastes
Johnson Matthey collects and quantifies
the different types of packaging waste
recycled by our sites as shown in the
table below:
Johnson Matthey Annual Report & Accounts 2012
Report of the Directors – Business Review
Environment
72
Waste Recycled
2012 2011
Waste Waste %
Packaging type tonnes tonnes change
Steel 2,314 1,847 +25
Paper 704 258 +173
Plastic 1,148 439 +162
Wood 3,003 896 +235
2007
1
2009 2010 2011 2012
Tonnes Tonnes /
£ million sales
0
100
200
300
400
500
600
0
0.05
0.10
0.15
0.20
0.25
0.30
Total NOx Emissions
Tonnes Tonnes /
£ million sales
Tonnes /
Tonnes £ million sales
20071 448 0.2603
2009 439 0.2443
2010 434 0.2301
2011 393 0.1724
2012 566 0.2113
1 Calendar year.
2007
1
2009 2010 2011 2012
Tonnes
SO
2
equivalent
Tonnes /
£ million sales
0
100
200
300
400
500
0
0.05
0.10
0.15
0.20
0.25
0.30
Total Acid Gas Emissions
Tonnes SO2 Tonnes /
equivalent £ million sales
Tonnes SO2 Tonnes /
equivalent £ million sales
20071 416 0.2417
2009 334 0.1859
2010 335 0.1776
2011 318 0.1395
2012 444 0.1658
1 Calendar year.
Good progress has been made this
year with many sites recycling a greater
proportion of packaging waste as a result of
initiatives to increase awareness of recycling.
At our Clitheroe, UK site, its packaging
waste this year has included a greater
proportion of plastic and wood, both of
which have been recycled, thus contributing
to improvement in the overall group figures
for these two materials.
Johnson Matthey complies with
international agreements, regulations and
policies that govern the international
shipment of waste. During 2011/12,
4,293 tonnes of waste (2010/11 4,295
tonnes) were moved between countries,
predominately for the reclamation and
reuse of metal from spent catalysts at our
Brimsdown, UK refinery.

2007
1
2009 2010 2011 2012
Tonnes Tonnes /
£ million sales
0
10
20
30
40
50
0
0.004
0.008
0.012
0.016
0.020
Total SO2 Emissions
Tonnes Tonnes /
£ million sales
Tonnes /
Tonnes £ million sales
20071 31.8 0.0185
2009 25.8 0.0144
2010 31.0 0.0164
2011 43.0 0.0189
2012 47.5 0.0177
1 Calendar year.
> Reducing Waste to Landfill at Clitheroe
One of Johnson Matthey’s sustainability targets is to eliminate waste to landfill by
2017. On the Clitheroe site in the north of England, which makes catalysts, good
progress had been made on reducing hazardous waste despatched to landfill, but the
site was concerned that the level of non-hazardous waste sent to landfill would remain
stagnant at around 200 tonnes.
What were the obstacles? Was an attitude of ‘any bin will do’ holding back
efforts to reduce waste?
Of the waste sent to landfill, around 67% was non-hazardous, so this was set as
a priority area. In 2011 the site met with a number of waste contractors to determine
how it could move towards increased recycling and achieve a significant reduction in
waste to landfill.
An ambitious target was set for 2011/12; only 100 tonnes of non-hazardous waste should be sent to landfill, just half
of the 2008 figure. The new waste collection scheme has been implemented enthusiastically and the actual figure achieved
came in below the target – at 78 tonnes. This is a 40% reduction on 2010/11 and led to cost savings of £7,500 for the site.
Read the full case study at www.matthey.com/sustainability.
Case Study
Water Consumption
During the year, water consumption
increased by 6% in absolute terms but
was down 10% relative to sales compared
with 2010/11. Most of this increase is from
sites reporting a full year of data for the first
time and from an increase in mains water
use at our Brimsdown, UK site where very
dry weather reduced the scope for water
harvesting. Of the total water used by the
group, 91% was supplied by local
municipal water authorities, 6% was drawn
from boreholes and 3% was taken from
local water courses. Total effluent decreased
by 18% this year to 1.4 million m3, mainly
as a result of more accurate reporting from
one of our sites. Of the total effluent
produced, 82% was discharged to local
authority sewers after treatment and in
accordance with local discharge consent
agreements and 18% was discharged to
water courses after treatment and within
quality limits set by local water authorities.
. Manufacturing operations at our Catalysts and Chemicals business’
West Deptford site in the USA.
. Our Colour Technologies business manufactures black obscuration
enamels which are used in automotive glass applications.
2007
1
2009 2010 2011 2012
Tonnes Tonnes /
£ million sales
0
50
100
150
200
250
0
0.02
0.04
0.06
0.08
0.10
0.12
0.14
Total VOC Emissions
Tonnes Tonnes /
£ million sales
Tonnes /
Tonnes £ million sales
20071 207.1 0.1203
2009 209.1 0.1164
2010 180.8 0.0959
2011 185.7 0.0814
2012 189.8 0.0709
1 Calendar year.

The method of water treatment used at
each site is appropriate to the effluent
quality and volume and the requirements
of the receptor.
The chemical oxygen demand (COD)
test is commonly used to indirectly
measure the amount of organic compounds
in water. Most applications of COD
determine the amount of organic pollutants
found in surface water (e.g. lakes and rivers),
making COD a useful measure of water
quality. In 2011/12 the group discharged
organic chemicals equivalent to a COD
of 260 tonnes into water courses, as
regulated by local emission limits at each
manufacturing facility. This is a 4% increase
on the prior year which resulted mainly
from the first full year of data reported by
some sites.
Environment continued
Johnson Matthey has a robust and
effective management system which
requires all sites to report environmental
incidents to the group’s EHS department.
During 2011/12 no significant spillages
to the environment of raw materials,
intermediates or products have been
reported by the group.
Environmental Aims and Targets
The group will continue to manage
environmental impacts in the context of
an expanding business by building on the
best practice examples of performance
improvement delivered so far, integration
of lean manufacturing principles, process
intensification and step change
manufacturing technologies. This work will
be supported by the group’s global
Manufacturing Excellence programme.
Our environment related priorities for
2012/13 are to:
• Ensure that the future environmental
performance of the group is aligned
to the Sustainability 2017 Vision of
cutting carbon intensity by half,
achieving zero waste to landfill and
halving key resources per unit of
output, by helping each business
develop projects and metrics to
achieve our goals.
• Further develop our internal data
reporting systems to improve
consistency of reporting across our
sites and to increase the frequency
of internal reporting.
Johnson Matthey Annual Report & Accounts 2012
Report of the Directors – Business Review
Environment
74
2007
1
2009 2010 2011 2012
Tonnes Tonnes /
£ million sales
0
10,000
5,000
15,000
20,000
25,000
0
2
4
6
8
10
12
14
Total Waste to Landfill
Tonnes Tonnes /
£ million sales
Tonnes /
Tonnes £ million sales
20071 20,977 12.188
2009 5,535 3.080
2010 5,071 2.689
2011 6,165 2.704
2012 10,708 3.998
1 Calendar year.
2007
1
2009 2010 2011 2012
Tonnes Tonnes /
£ million sales
0
25,000
50,000
75,000
100,000
125,000
0
10
20
30
40
50
60
Total Waste
Tonnes Tonnes /
£ million sales
Tonnes /
Tonnes £ million sales
20071 98,764 57.39
2009 96,287 53.58
2010 90,308 47.88
2011 113,671 49.86
2012 120,363 44.94
1 Calendar year.
> Is Water Stress a Risk for Johnson Matthey?
Climate change experts have warned that parts of the world will experience water
shortages in the decades to come. In December 2007, Johnson Matthey made a
commitment to halve the amount of water it uses per unit of output by 2017. Now,
in addition to its efforts to reduce water consumption, the company is assessing the
water related risks in its direct business operations.
This analysis provides important insights and flags up strategic issues. If water
stress deteriorated into extreme water scarcity, could manufacturing operations be
affected? What are the business risks? The exercise has highlighted which manufacturing
sites are in regions of water stress and has enabled informed risk analysis.
Further work will be done on water stress and risk at site and divisional level and
the analysis will help Johnson Matthey to develop policies that promote water
efficiency and infrastructure improvements. Process water recycling and rain water
catchment systems are already part of Johnson Matthey’s response to halving the
use of this key resource. The water stress assessment complements existing work
and provides the opportunity for high level strategic planning on water issues.
Read the full case study at www.matthey.com/sustainability.
Case Study

These priorities will be addressed by
checking and focusing on them during site
audits and by ongoing communication with
facilities throughout the year to promote
good practice and encourage the
integration of sustainable technologies.
At group level, we will also continue
our participation in trade association
collaborations and work with general
managers at our facilities to ensure
compliance with upcoming changes in
environmental legislation.
Biodiversity
By the nature of our business activities,
Johnson Matthey has very little negative
impact on the biodiversity of terrestrial,
freshwater and marine environments.
We do not have any manufacturing
facilities located in areas of significant
ecoimportance and we have not identified
any major biodiversity issues in our supply
chains as we do not source large volumes of
naturally derived substances. Consequently,
at this stage, we do not consider
biodiversity to be amongst the most
material issues for our business.
As part of all significant investments
and acquisitions, we complete a detailed
environmental impact assessment. In
addition, all our manufacturing sites that
have an ISO 14001 compliant management
system undertake an environmental
impacts assessment that formally identifies
how their operations may have an effect
upon local biodiversity. Over the years,
we have managed a number of projects
looking at improving biodiversity at our
operating sites.
During the year, we have completed a
benchmarking study to assess our position
on biodiversity with that of appropriate
peer group companies and believe that our
position is both pragmatic and consistent
with other similar businesses. We continue
to monitor regulation, policy, codes and
standards in this area to ensure that we
maintain awareness of, and respond to,
any emerging issues.
75
2007
1
2009 2010 2011 2012
Thousands m
3
Thousands m
3
/
£ million sales
0
500
1,000
1,500
2,000
2,500
0
0.3
0.6
0.9
1.2
1.5
Water Consumption
Thousands m3 Thousands m3 /
£ million sales
Thousands m3 /
Thousands m3 £ million sales
20071 2,048 1.190
2009 1,951 1.086
2010 1,750 0.928
2011 2,076 0.911
2012 2,201 0.822
1 Calendar year.
> Green Team Promotes Business Sustainability
at Manesar
A group of volunteers, known as the ‘Green Team’, came together at the
company’s Emission Control Technologies business in Manesar, India to stimulate
and shape ideas for putting sustainability into practice. This was not about a
single large project but a multiplicity of modest suggestions.
A whole host of energy saving, water efficiency and waste reduction projects
are underway. For their personal commuting, employees are encouraged to use a
car pool or public transport. Sustainability may be a serious commitment, but the
Green Team believes there is no reason why it should not also be fun, and
activities and communications keep employees involved.
This variety of small projects is showing big results and the business is ahead of its sustainability targets for electricity
and water consumption. These efficiencies impact directly or indirectly on bringing down carbon emissions and at the same
time improve profitability. Equally important, a culture of sustainability has been embedded, and this wide ranging approach
is making sustainability a way of working and a way of life.
Read the full case study at www.matthey.com/sustainability.
Case Study

Johnson Matthey Annual Report & Accounts 2012
Report of the Directors – Governance
Governance
76
Managing
our business
in the
right way
Governance
This section introduces our board of directors and details the corporate
governance structures that are in place to ensure we manage our business
in a responsible and transparent way.
> Supporting Our Strategy
in Fine Chemicals
People around the world are living longer.
As a result, many will suffer from chronic
diseases and will require more long term
drug therapy. This, together with increasing
demand from doctors and patients for efficient
pain management and continued economic
development in Asia, will further drive demand
for pharmaceutical products.
Johnson Matthey holds a strong position
in opiate based active pharmaceutical
ingredients (APIs), which are used to relieve
pain, and in other niche controlled APIs, in
particular amphetamines used in the treatment
of attention deficit hyperactivity disorder
(ADHD). Its API Manufacturing businesses,
based in the UK and USA, delivered strong
growth this year, increasing their sales and
growing market share.
This performance was supported by the
businesses’ Riverside manufacturing facility,
located in Conshohocken, USA, which was
acquired by Johnson Matthey in November
2010. This new plant, which more than
doubles our manufacturing capacity in North
America, has been successfully integrated with
the businesses’ other operations and is
enabling us to manufacture products more
efficiently, support growth and capitalise on
new market opportunities.
Delivering Value

Contents
78 Letter from the Chairman
79 Governance and Sustainability
82 Board of Directors
84 Corporate Governance Report
100 Other Statutory Information
105 Nomination Committee Report
106 Audit Committee Report
108 Remuneration Report
. The Riverside facility more than doubles Johnson Matthey’s
API manufacturing capacity in North America.
. Clean room facilities at Riverside for the
production of highly potent APIs.

Governance
Letter from the Chairman
Johnson Matthey Annual Report & Accounts 2012
Report of the Directors – Governance
Governance
78
Tim Stevenson
Chairman
Dear Shareholder
Good governance is a cornerstone of a successful and sustainable company.
The group has a well established framework of policies, processes and
management systems to support its governance and sustainability efforts, which
apply to all group operations worldwide. These are described on pages 79 to 81.
The UK Corporate Governance Code
The formal Corporate Governance Report is set out on pages 84 to 99. The
company is reporting against the UK Corporate Governance Code (the Code),
which was introduced in June 2010. Although based on the Combined Code
on Corporate Governance (the Combined Code) which it replaced, the Code
contains a number of substantive changes to the Combined Code’s main
principles and provisions. In the main, these place greater emphasis on board
behaviour. As in previous years, the company is reporting on how it has applied
the main principles and whether it has complied with the relevant provisions.
Under the Code, companies must explain their business model and strategies
for delivering objectives. Explanations of our business model and strategy are
contained in the Business Review on pages 4 to 75. The Responsibility of
Directors statement is set out on page 120.
Board Role and Effectiveness
The preface to the Code encourages chairmen to report in their annual
statement how they have ensured that the Code principles concerning
leadership and board effectiveness have been applied during the year. I refer to
this briefly in my Chairman’s Statement on pages 6 and 7 and more fully in the
Corporate Governance Report. In preparing these, account has been taken of
the Guidance on Board Effectiveness issued by the Financial Reporting Council
in March 2011, which is aimed at assisting boards in applying these Code
principles.
Board and Committee Evaluation
We report on pages 96 and 97 on the board and committee evaluation process
carried out following my appointment as Chairman Designate in March 2011.
For the first time, the evaluation was externally facilitated by an independent
consultant experienced in board evaluation. The evaluation process was ongoing
at the date of publication of the 2011 annual report and has since been
concluded. We report on the methodology used and the outcome. The board is
conducting an internal review process this year and we describe the process
being used. I propose to present the outcome of the evaluation, which is not
complete at the date of publication of this annual report, to the meeting of the
board in July 2012. I will report fully in the 2013 annual report.
Boardroom Diversity and Succession Planning
Boardroom diversity and succession planning are key issues for all boards.
Descriptions of our approaches to these topics are set out on pages 92 and 93.
UK Corporate Governance Code Compliance Statement
Our statement of compliance with the provisions of the Code is set out on page 85.
I am pleased to report that except in one limited respect, the company has
complied with all relevant provisions of the Code throughout the year ended
31st March 2012 and from that date up to the date of publication of this
annual report.
Tim Stevenson
Chairman
“I am pleased to present
the Governance section
of the annual report,
including the Corporate
Governance Report
for the year ended
31st March 2012.”

Social Environment Governance Financial
Health
and Safety
POLICIES AND MANAGEMENT SYSTEMS
• Key objectives for assessment and control of risks
JOHNSON MATTHEY BOARD
• Responsibility for social, environmental and ethical matters
• Risk management processes and review
LOCAL ACTION IN BUSINESSES
• Putting principles into practice
SUSTAINABLE
BUSINESS
CSR COMPLIANCE COMMITTEE
• Setting standards and overseeing
compliance • Identify and monitor EHS,
social and governance risks
CHIEF EXECUTIVE’S COMMITTEE
• Policy setting and approval
• Addresses risk and control issues
AUDIT COMMITTEE
• Monitors performance
• Annual review of CSR risks
Governance and Sustainability
Introduction
The group has well established policies,
processes and management systems to
support its governance and sustainability
efforts, which apply to all group operations
worldwide. These encompass the key
areas of:
• Business integrity and ethics
• Supply chain management
• Environment, health and safety (EHS)
• Human resources.
Together they provide the framework
for managing environmental, social and
governance matters. Brief summaries are
set out in this section. Further details,
together with information about progress
and developments over the year to
31st March 2012, can be found on the
company’s website.
Read more at
www.matthey.com/sustainability.
Compliance with applicable legal
requirements is a minimum standard for
group operations and employees. In many
cases we set standards which are in
advance of these.
Employment contracts, handbooks
and policies specify acceptable business
practices and the group’s position on
ethical issues. The Group Control Manual,
which is distributed to all group operations,
and security manuals provide further
operational guidelines to reinforce these.
The Corporate Governance Report
on pages 84 to 99 describes the role of the
board, the Audit Committee and other
committees in risk management and
internal control.
The board of directors is ultimately
responsible for social, environmental and
ethical matters. These matters are
embedded into the group’s risk
management processes and reviewed
annually by the board. The Audit Committee
monitors performance and reviews the
business risks associated with corporate
social responsibility (CSR) at least once
a year. Policies are set and approved by
the Chief Executive’s Committee (CEC).
The CEC also addresses risk and control
issues and reviews key EHS, social and
governance issues. The CSR Compliance
Committee, a sub-committee of the CEC,
has specific executive responsibility for
the identification and monitoring of risks
in these areas. It sets and oversees
compliance with group standards through
the dissemination, adoption and
implementation of appropriate group
policies and other operational measures.
Every business is required to include
sustainability in its annual budget setting
process and define the nature of
programmes and projects to be undertaken
together with capital expenditure
requirements and value generated over a
three year business cycle. Plans are
discussed with the CEC and are formally
approved by the board. As part of the
process, progress against the Sustainability
2017 targets is assessed on a group basis
to establish if additional management action
is required.
We have a formal system of site and
functional reviews to drive improved
performance in sustainability. In 2011/12,
12 site reviews and six sustainability training
sessions were undertaken.
The group’s sustainability strategy
(as detailed in the section on Our Strategy
on pages 13 and 14) was defined following
an assessment of the risks, major impacts
and future commercial opportunities open
to the business. The long term targets
within it address the issues which could
potentially have a material effect on the
group’s future performance. The group’s
materiality map outlines the key material
issues and the targets in place to address
and monitor them.
View the materiality map online at
www.matthey.com/sustainability.
The area of sustainability continues to
develop rapidly and we continually monitor
emerging issues, regulation, legislation,
standards and good practice. Developments
are proactively managed through reviewing
the external landscape to understand the
material issues that may negatively impact
the group or present real business
opportunities. Responsibility for identifying
and assessing these issues lies with the
group sustainability team and the CSR
Compliance Committee.
During the year a gap analysis and
peer review study against the ISO 26000
guidelines on social responsibility were
conducted to ensure the group remains
abreast of best practice developments in
sustainability. We continued to develop
our understanding of life cycle assessment
(LCA) and completed the first full quantitative
LCA of our automotive emission control
catalysts (see page 29). In addition, a
project to understand potential implications
of water stress to our operations was
carried out as described on page 74.
79

Business Integrity and Ethics
Johnson Matthey strives to maintain the
highest standards of ethical conduct and
corporate responsibility worldwide to
ensure we act with integrity, transparency
and care for the rights of the individual
wherever we do business. The group’s
ethical principles and standards are set out
in its Business Integrity and Ethics Policy
which applies to all the group’s employees.
View the policy online at
www.matthey.com/sustainability.
The board and its committees, the
Chairman, the Chief Executive and the
other individual directors all play key roles,
together with management, in the promotion
and monitoring of ethical behaviour and
the safeguarding of the group’s reputation.
Compliance training is provided to
employees to support their understanding
of, and commitment to, group policies in
order to protect and enhance the
company’s reputation. The training
educates managers in their responsibilities
for employees, commercial contracts and
company assets and is delivered globally
via online learning programmes, face to
face seminars and individual training.
Online compliance training for employees
addresses the bribery and corruption,
money laundering and competition risks
faced by the group.
All facilities have established policies
and procedures for employees to raise
employment related issues for consideration
and resolution.
A confidential, secure, externally-run
‘whistleblowing’ website and telephone
helpline are also in place to give all
employees additional means to raise any
issue of concern. The website offers
multilingual access and allows for written
or telephone reports. The site is publicised
via site notice boards and the company’s
corporate intranet site. Reports received
through the website and helpline (as well
as any received through other media,
such as email, telephone or letter) are
appropriately investigated in accordance
with the Group Human Resources Policy
on Whistleblowing. Responses and
outcomes are posted on the website, or
are communicated to employees via other
internal media, such as site notices or
briefings. For the group as a whole, there
was a total of eight new whistleblowing
reports in the calendar year 2011 and all
but two have been resolved as at the date
of publication of this annual report.
Governance continued
Supply Chain Management
Management of supply chain and
contractor activities is a core component
of the ISO 9000 and ISO 14000 series of
standards. Supply chain and contractor
management questionnaires are a
requirement for achieving and maintaining
registration and, as such, ISO registered
Johnson Matthey operations require the
completion of appropriate questionnaires.
For those operations without ISO
registration, the group EHS management
system provides policy and guidance on
supply chain management and contractor
control.
The group’s Ethical and Sustainable
Procurement Policy provides clear
guidance on various topics including those
relating to the selection of suppliers,
auditing against standards and ethical
conduct with suppliers.
View the policy online at
www.matthey.com/sustainability.
Johnson Matthey is confident of the
human rights performance of its own
operations but recognises that business
practices in the supply chain are not
always transparent and represent a risk
that must be managed. Every effort is
made to ensure the issues are managed
effectively. We support the principles
defined within the United Nations Universal
Declaration of Human Rights and the
International Labour Organisation Core
Conventions including the conventions
in relation to child labour, forced labour,
non-discrimination, freedom of association
and collective bargaining. Compliance with
and respect for these core principles are
integrated within the risk assessment
procedures and impact assessments
which are undertaken when entering into
business in a new territory and within the
due diligence processes when making an
acquisition or entering a joint venture.
Johnson Matthey’s North American
businesses have developed a Conflict Free
Minerals Policy in response to US legislative
moves to address reports on the role of
conflict minerals in financing human rights
violations in the Democratic Republic of the
Congo. The policy was published in March
2011. In January 2012, these businesses
also issued a Slavery and Human Trafficking
Policy in response to the California
Transparency in Supply Chains Act 2010.
Both policies are available on the
company’s website.
View the policies online at
www.matthey.com/sustainability.
Environment, Health and Safety
Johnson Matthey is committed to providing
the highest level of protection to the
environment and to safeguarding the health,
safety and wellbeing of its employees,
customers, communities and other
stakeholders. This is supported by policies,
a comprehensive management system,
governance, careful risk assessment,
auditing and training which promote
continuous improvement and ensure that
high standards are achieved at sites
worldwide. In addition, all facilities have
developed local policies to meet
international, national, local and corporate
requirements.
The Environment, Health and Safety
Policy is a written statement, formulated
and agreed by the CEC. Signed by the
Chief Executive, it is available at all sites
and forms the basis of the group EHS
management system.
View the policy online at
www.matthey.com/sustainability.
The group EHS management system
is available to all employees via the group
intranet. It is regularly reviewed and,
together with the corporate policies and
objectives, it defines accountability and
sets the standards against which
conformance audits are assessed.
EHS compliance audits are conducted
to maintain continuous improvement and
all Johnson Matthey operated manufacturing
and research and development facilities
are included in the audit programme. Audit
frequency for each facility is determined
by the scale, inherent risk and past
performance of the operation. Audits are
carried out by experienced ISO qualified
EHS professionals and controlled by the
Group EHS Assurance Director. Health
management reviews are undertaken every
three to four years at all operational sites.
They are conducted by the Director of
Group Health who provides consulting
advice to support the prioritisation and
planning of programmes to optimise
workplace health and promote workforce
sustainability. In addition, all businesses
undertake annual health management
improvement planning to adjust health
programmes to meet changing business
needs.
At each board meeting, the board
reviews group EHS performance reports
for the prior months. These reports set out
the group’s EHS performance in terms of
accident and incidence rates, lost work
days and the rolling all lost time accident
rate. The reports also contain information
Johnson Matthey Annual Report & Accounts 2012
Report of the Directors – Governance
Governance
80

from the businesses across the group on
lost time accidents, as well as details of
any contractor incidents, occupational
illness, sickness absence and any regulatory
action. The board reviews EHS strategy
and reviews the EHS assurance process
on an annual basis.
All EHS audit reports, including health
management reviews, are reviewed by
the CSR Compliance Committee and
appropriate follow up actions are taken
on outstanding issues. During 2011/12 a
total of 26 detailed compliance audits and
19 one day audit action reviews were
completed. Health management reviews
were conducted at 16 facilities.
A variety of training programmes are
in place to support continuous improvement
in EHS performance and regular meetings
are held in Europe, North America and Asia
to enable the group’s EHS professionals to
network, share best practice and discuss
the impact of future EHS legislation.
Human Resources
The group’s human resources standards
are progressive, consistent and aimed at
bringing out the best in our people.
Group policies are supported by
detailed regional and individual business
procedures which are regularly updated to
reflect both regional best practice and local
legislation. Site specific human resources
policies and procedures are communicated
to staff at inductions and through staff
handbooks. Human resources policies and
risks are examined by the CEC and the
CSR Compliance Committee.
The group’s policies on equal
opportunities and training are published
on the company’s website and are also
detailed below.
View the policies online at
www.matthey.com/sustainability.
In line with our Equal Opportunities
Policy, we recruit, train and develop
employees who meet the requirements of
the job role regardless of gender, ethnic
origin, age, religion, sexual orientation or
disability. The policy recognises that people
with disabilities can often be denied a fair
chance at work because of misconceptions
about their capabilities and seeks to
enhance the opportunities available by
attempting, wherever possible, to overcome
obstacles, such as the need to modify
equipment, restructure jobs or to improve
access to premises, provided such action
does not compromise health and safety
standards.
Similarly, employees who become
disabled during their employment will be
offered employment opportunities
consistent with their capabilities. We value
the diversity of our people as a core
component of a sustainable business and
employment applications are welcomed
and encouraged from all sections of the
community including minority groups.
The Management Development and
Remuneration Committee takes a special
interest in ensuring compliance with the
Training and Development Policy objectives
in order to:
• Ensure highest standards in the
recruitment of employees
• Assess training needs in the light of
job requirements
• Ensure relevance of training and link
with business goals
• Employ and evaluate effective and
efficient training methods
• Promote from within, from high
potential pools of talent
• Understand employees’ aspirations
• Provide development opportunities
to meet employees’ potential and
aspirations.
View the policy online at
www.matthey.com/sustainability.
Following the development last year
of a ten year human resources strategy to
support business growth over the next
decade, the focus now is on significant
recruitment in our operations in Asia as our
businesses in the region continue to expand.
. Sustainability initiatives at Johnson Matthey’s sites around the world
are focused on improving resource efficiency and developing more
sustainable products.
. Development of new products for automotive glass
applications at our Colour Technologies business’
technology centre in Maastricht, the Netherlands.

Board of Directors
Johnson Matthey Annual Report & Accounts 2012
Report of the Directors – Governance
Governance
82
1
4 5 6
7 8 9
2 3

1. Tim Stevenson OBE
Chairman, age 64; joined Johnson Matthey as Chairman
Designate in March 2011; appointed Chairman in July 2011.
Has been Chairman of The Morgan Crucible Company plc
since December 2006 and was Chairman of Travis Perkins plc
from November 2001 to May 2010. From 1975 to 2000 he
held a variety of senior management positions at Burmah
Castrol plc, including Chief Executive from 1998 to 2000.
He is a qualified barrister and is Lord Lieutenant of Oxfordshire.
M, N
2. Neil Carson BSc
Chief Executive, age 55; joined Johnson Matthey in 1980;
appointed Division Director, Catalytic Systems in 1997 after
having held senior management positions in the Precious
Metals Division as well as Catalytic Systems in both the UK
and the US. Appointed to the board as Managing Director,
Catalysts & Chemicals in August 1999 and additionally
assumed board level responsibility for Precious Metals
Division in August 2002. Appointed Chief Executive in July
2004. Currently a non-executive director of AMEC plc.
3. Robert MacLeod
Group Finance Director, age 48; joined Johnson Matthey as
Group Finance Director Designate in June 2009 and assumed
his current role in September 2009. Previously he was Group
Finance Director of WS Atkins plc and worked in a variety of
senior financial roles at Enterprise Oil plc. He is currently a
non-executive director of Aggreko plc. He is a Chartered
Accountant.
4. Michael Roney
Senior Independent Director and Chairman of the
Management Development and Remuneration Committee,
age 57; appointed a non-executive director in June 2007.
Currently Chief Executive of Bunzl plc. Joined Bunzl plc as
a non-executive director in 2003. Prior to becoming Chief
Executive of Bunzl he was the Chief Executive Officer of
Goodyear Dunlop Tires Europe BV and had an extensive
career with the Goodyear Tire and Rubber Co holding a
number of senior management positions with responsibilities
in Latin America, Asia, Eastern Europe, the Middle East and
Africa. A, M, N
5. Alan Ferguson
Chairman of the Audit Committee, age 54; appointed
a non-executive director in January 2011. Currently a
non-executive director of Croda International Plc and
The Weir Group PLC (where he is chairman of their
respective audit committees). He was previously Chief
Financial Officer and a Director of Lonmin Plc. He left Lonmin
in December 2010. Prior to joining Lonmin, he was Group
Finance Director of The BOC Group until late 2006 when
the Linde Group acquired BOC. Before joining BOC in 2005,
he worked for Inchcape plc for 22 years in a variety of roles
including Group Finance Director from 1999 until his
departure. He is a Chartered Accountant. A, M, N
6. Sir Thomas Harris KBE CMG
Age 67; appointed a non-executive director in April 2009.
Currently Vice Chairman of Standard Chartered Bank, a
non-executive director of SC First Bank (Korea), City UK and
the UK India Business Council. Until 2004, he was Director
General of Trade & Investment USA responsible for British
business and technology promotion throughout the United
States. He served previously as British Ambassador to the
Republic of Korea in Seoul, Deputy High Commissioner in
Lagos, Nigeria and Commercial Counsellor in the British
Embassy in Washington DC. A, M, N
7. Dorothy Thompson
Age 51; appointed a non-executive director in September
2007. Currently Chief Executive of Drax Group plc. Joined
the board of Drax Group plc as Chief Executive in 2005. Prior
to joining Drax she was head of the European business of
the global power generation firm, InterGen. First starting her
career in banking she has had senior management roles in
the UK, Asia and Africa. A, M, N
8. Larry Pentz BS ChE, MBA
Executive Director, Environmental Technologies, age 57;
joined Johnson Matthey in 1984; appointed Division Director,
Process Catalysts and Technologies in 2001 after having held
a series of senior management positions within Catalysts
Division in the US. Appointed Executive Director, Process
Catalysts and Technologies in August 2003, Executive
Director, Emission Control Technologies in July 2004 and to
his current position in April 2009. Currently a non-executive
director of Victrex plc.
9. Bill Sandford BA
Executive Director, Precious Metal Products, age 59; joined
Johnson Matthey in 1977; appointed Division Director,
Precious Metal Products in 2001 after holding a series of
senior management positions within the division. Appointed
Executive Director, Precious Metal Products in July 2009.
Committees of the Board
A Audit Committee
M Management Development and Remuneration Committee
N Nomination Committee
Simon Farrant
Company Secretary; joined Johnson Matthey from corporate legal
practice in 1994. Appointed Company Secretary in 1999 and
Group Legal Director in 2007. He is a Solicitor and Attorney &
Counselor-at-Law (State of New York).
83

Corporate Governance Report
Johnson Matthey Annual Report & Accounts 2012
Report of the Directors – Governance
Governance
84
85 The UK Corporate Governance Code
85 Statement of Compliance with the Provisions of the Code
85 Leadership
85 The Role of the Board
86 The Roles of the Chairman and the Chief Executive
and Division of Responsibilities
86 The Role of the Executive Directors
86 The Role of the Non-Executive Directors
87 The Role of the Senior Independent Director
87 The Role of the Company Secretary
87 Board Meetings
88 Board Committees
88 Board Committee Membership
89 Board Committee Terms of Reference
91 Board and Committee Attendance
91 The Chief Executive’s Committee
91 Effectiveness
91 The Composition of the Board
92 Appointments to the Board and its Committees
92 Succession Planning
92 Boardroom Diversity
93 Board Balance – Independence of the Non-Executive
Directors and of the Chairman
94 Time Commitment of the Chairman and of the
Non-Executive Directors
94 Terms of Appointment of the Non-Executive Directors
94 Annual Re-Election of Directors
94 Information and Support
94 Independent Professional Advice
94 Director Induction, Familiarisation, Training and Development
95 Indemnification of Directors and Insurance
95 Directors’ Conflicts of Interest
96 Evaluation of the Board, Board Committees and Directors
97 Review of the Chairman’s Performance
97 Accountability
97 The Audit Committee
97 Financial and Business Reporting
97 Risk Management and Internal Control
98 Remuneration
98 Relations with Shareholders
98 Dialogue with Shareholders
98 Reporting of Results, Interim Management Statements
and the Investor Day
99 Shareholder Contact
99 Annual General Meetings
Contents>

85
This section of the annual report discusses
the company’s corporate governance
structures and processes.
The UK Corporate Governance
Code
The UK Corporate Governance Code (the
Code), issued by the Financial Reporting
Council (FRC) in June 2010, contains broad
principles together with more specific
provisions which set out standards of good
practice in relation to board leadership and
effectiveness, remuneration, accountability
and relations with shareholders. Listed
companies, such as Johnson Matthey, are
required to report on how they have applied
the main principles of good governance set
out in the Code and either to confirm that
they have complied with the Code’s
provisions or to provide an explanation
where they have not. The Code replaced the
previous Combined Code on Corporate
Governance and applied to the company
throughout the year ended 31st March 2012.
In his statement on pages 6 and 7,
the Chairman comments on how the Code
principles relating to the role and effectiveness
of the board (in Sections A (Leadership) and
B (Effectiveness) of the Code) have been
applied throughout the year ended
31st March 2012.
This Corporate Governance Report,
together with the Nomination Committee
Report on page 105, the Audit Committee
Report on pages 106 and 107 and the
Remuneration Report on pages 108 to 117,
describes how the company has complied
with the provisions of the Code and applied
the main principles set out in the Code
during the year ended 31st March 2012.
Statement of Compliance with
the Provisions of the Code
Except as referred to below, the company
has complied with all relevant provisions
of the Code throughout the year ended
31st March 2012 and from that date up to
the date of publication of this annual report.
The company has not complied with
part of Code provision E.1.1, which provides
that “the senior independent director should
attend sufficient meetings with a range of
major shareholders to listen to their views
in order to help develop a balanced
understanding of the issues and concerns
of major shareholders”. The board considers
that there are appropriate mechanisms for
the views of shareholders to be listened to
and communicated to the board as a whole,
without it being necessary for the Senior
Independent Director to attend meetings
with major shareholders. The Senior
Independent Director is, however, available
to attend such meetings if requested by
shareholders. The board believes that its
practices in this respect are both consistent
with the relevant main principle of the Code
concerning dialogue with shareholders, to
which the Code provision relates, and
consistent with good governance. More
information on relations with shareholders
is set out on pages 98 and 99.
Leadership
The Role of the Board
The names and biographical details of all
the members of the board including details
of their relevant experience and other
significant commitments are set out on
page 83.
The board’s role is to provide
leadership of the company and direction
for management. It is collectively responsible
and accountable to the company’s
shareholders for the long term success of
the group and for ensuring the appropriate
management and responsible operation of
the group in pursuit of its objectives. The
board reviews management performance
and the operating and financial performance
of the group as a whole. The board is
responsible for ensuring that the necessary
resources are provided for the company to
meet those objectives.
The board sets, and is collectively
responsible to the company’s shareholders
for the achievement of, the group’s strategic
objectives and it determines the nature and
extent of the significant risks it is willing to
take in order to achieve those objectives.
Strategy is discussed in detail on pages 12
to 15. The process for the consideration of
risk is discussed on pages 20 to 21.
The board approves the group’s
governance structures and reviews the
group’s internal control and risk management
framework to ensure that they are prudent
and effective and that risk is able to be
assessed, monitored and managed. The
board is collectively responsible to the
company’s shareholders for the group’s
system of corporate governance and is
ultimately accountable for the group’s
activities, strategy, risk management and
financial performance, for stewardship of
the group’s resources and for social,
environmental and ethical matters.
Key matters for board decision include
approval of the annual group operating and
capital expenditure budgets and annual
group three year plan, as well as the group
strategy. The board also approves
announcements of the group’s results,
the Annual Report and Accounts, the
declaration of the interim dividend and
recommendation of the final dividend. The
board is responsible for considering and
approving major capital projects, major
acquisitions and major disposals of assets
or operations in excess of defined
thresholds.
In discharging its responsibilities the
board seeks to set, promote and
demonstrate adherence to clear values and
ethical standards for the group. The board
also remains cognisant of the need to
observe the duties owed by directors in law,
including the overriding duty for each director
to act in the way he or she considers, in
good faith, will be most likely to promote the
success of the company for the benefit of its
members as a whole, whilst balancing the
interests of stakeholders (the company’s
shareholders, the group’s employees,
suppliers and customers and the broader
community).
The board determines the structure,
size and composition of the board,
appointments to the board, selection of
the Chairman and the Chief Executive,
appointment of the Senior Independent
Director and membership and chairmanship
of board committees. The board has overall
responsibility for succession planning for the
Chief Executive and the other executive and
non-executive directors and is involved in
succession planning for senior management.
Further information on the succession
planning process is set out on page 92.
Certain types of decision are taken by
the board and others are delegated by the
board to executive management. A formal
schedule of matters specifically reserved for
board decision has been adopted by the
board. This is set out in full in the Investor
Relations / Corporate Governance section
of the company’s website.

Corporate Governance Report continued
Johnson Matthey Annual Report & Accounts 2012
Report of the Directors – Governance
Governance
86
The board discharges its
responsibilities through an annual
programme of board and other meetings.
Through a planned programme of board
agendas, referred to further under ‘The Role of
the Chairman’ below, the board ensures that
all necessary matters are discussed. The
board is afforded sufficient time for debate
and challenge, particularly in respect of
strategy and risk, including risk appetite.
The board also seeks to allow sufficient
opportunity for the review of past decisions
where necessary. At board meetings, the
board receives and considers papers and
presentations from management in respect
of matters under review. Effective review and
decision making is supported by provision
to the board of high quality, accurate, clear
and timely information and the obtaining by
the board of expert and independent
opinion, analysis and advice where necessary
(see ‘Information and Support’ on page 94).
The board’s processes in respect of conflicts
of interest are dealt with under ‘Directors’
Conflicts of Interest’ on pages 95 and 96.
The board delegates certain specific
responsibilities to board committees, as
described under ‘Board Committees’ on
page 88.
The Roles of the Chairman and
the Chief Executive and Division
of Responsibilities
Tim Stevenson was appointed Chairman
with effect from the close of the 2011
Annual General Meeting on 19th July 2011,
having been appointed to the board on
29th March 2011. Mr Stevenson’s
biographical details including details of his
relevant experience and other significant
commitments are set out on page 83.
Neil Carson was appointed Chief
Executive in July 2004. Mr Carson’s
biographical details including details of his
relevant experience and other significant
commitments are set out on page 83.
There is a clear division of
responsibilities between the running of the
board and the executive responsibility for
the running of the company’s business. No
one individual has unfettered powers of
decision. The roles of Chairman and Chief
Executive are separate and the division of
responsibilities between these roles is clearly
established in a written statement adopted
by the board on 28th April 2005. This is set
out in full in the Investor Relations /
Corporate Governance section of the
company’s website.
The Role of the Chairman
The Chairman leads the board. He is
responsible for creating the conditions for,
and for ensuring, an effective board and
effective contributions from individual
directors, particularly non-executive directors,
based on a culture of mutual respect,
openness, debate and constructive challenge.
To achieve this it is necessary for the
Chairman to facilitate and encourage open
communication and constructive working
relations between the executive and
non-executive directors. The Chairman
seeks to ensure that the executive directors
are open and responsive to constructive
challenge by the non-executive directors of
executive proposals. The Chairman is in
frequent contact with the Chief Executive,
meeting face to face or by telephone at least
once each week. The Chairman also keeps
the non-executive directors up to date with
significant developments between board
meetings. The Chairman is also responsible
for ensuring effective communication with
shareholders and this is discussed further
under ‘Relations with Shareholders’ on
pages 98 and 99.
The Chairman sets the board’s agenda
and ensures that adequate time is dedicated
for discussion of all agenda items, particularly
strategic issues and risk appetite. Since his
appointment as Chairman in July 2011,
Mr Stevenson has led a detailed process of
board agenda review and planning, working
with the Company Secretary, the chairmen of
the board committees and the Chief Executive.
During the year, the board approved an
annual agenda plan designed to ensure that
all necessary matters are reserved for board
decision and are afforded adequate time for
discussion throughout the year. Particular
attention has been paid to ensuring that
sufficient time is made available for the
discussion of strategy in order to allow the
opportunity for the non-executive directors
to challenge and help develop strategy
proposals. Strategy is discussed in detail on
pages 12 to 15. The Chairman monitors, with
assistance from the Company Secretary, the
information distributed to the board to
ensure that it is of high quality, accurate,
clear and timely.
During the year ended 31st March
2012, the Chairman met with the
non-executive directors without the
executives being present in order to
review executive director performance.
The Role of the Chief Executive
The Chief Executive has day to day
management responsibility for the running
of the group’s operations, for the application
of group policies and for the implementation
of group strategy and policies agreed by the
board. The board has given the Chief
Executive broad authority to operate the
business of the group and he is accountable
for, and reports to the board on, the
performance of the business. The Chief
Executive also has a key role in the process
for the setting and review of strategy. More
broadly, the Chief Executive promotes the
company’s culture and standards, including
appropriate governance standards,
throughout the group. In addition, he
ensures that the views of the executive
directors on business issues and, as
appropriate, employees’ views on relevant
issues are communicated to the board in a
balanced way.
In carrying out his responsibilities, the
Chief Executive is supported by the Group
Finance Director who, together with the
Chief Executive, is responsible amongst
other things for ensuring that high quality
information is provided to the board on the
company’s financial performance.
The Role of the Executive
Directors
The biographical details of the executive
directors and details of their relevant
experience and other significant
commitments are set out on page 83.
The executive directors have specific
executive responsibilities but as directors their
duties extend to the whole of the group’s
operations and activities and are not confined
to the parts of the business encompassed
by their specific executive roles.
The Role of the Non-Executive
Directors
The biographical details of the non-executive
directors including details of their relevant
experience and other significant
commitments are set out on page 83.
The role of the non-executive directors is
to scrutinise the performance of management
in meeting agreed goals and objectives and
to monitor the reporting of performance.
Their role is also to satisfy themselves on
the integrity of financial information and that
financial and non-financial controls and
systems of risk management are robust
and defensible.

87
As members of the board, the
non-executive directors have a key role
in constructively challenging in all areas
and this is vital to the independence and
objectivity of the board’s deliberations
and decision making. This is particularly
important in helping develop proposals
on strategy. The Chief Executive and the
other executive directors are open and
responsive to constructive challenge by
the non-executive directors of executive
proposals. Non-executive directors also
have an important part to play in supporting
the Chairman and the executive directors in
instilling the company’s culture, values and
standards within the board and more
broadly within the group.
As chairmen of the board committees
(Michael Roney of the Management
Development and Remuneration Committee
and Alan Ferguson of the Audit Committee),
the non-executive directors fulfill important
leadership roles. The non-executive directors
are also responsible for determining
appropriate levels of remuneration for the
executive directors and have a prime role in
appointing and, where necessary, removing
executive directors, and in succession
planning. Further information on succession
planning is set out on page 92.
The Role of the Senior
Independent Director
Michael Roney was appointed by the board
as the Senior Independent Director with
effect from the close of the 2011 Annual
General Meeting on 19th July 2011.
The role of a Senior Independent
Director is to provide a sounding board for
the Chairman, to serve as a focal point and
intermediary for the concerns of the other
non-executive directors when necessary
and to ensure that any key issues not being
addressed by the Chairman or the executive
management are taken up. While no such
circumstances have arisen in respect of the
company, the board and the Senior
Independent Director recognise that the
Senior Independent Director may, if
circumstances dictate, be required to work
with the Chairman or others or to intervene
to resolve any significant issues arising
which threaten the stability of the company
or the board.
The Senior Independent Director is
available to shareholders should they have
concerns which contact through the normal
channels of Chairman, Chief Executive or
other executive directors has failed to
resolve or for which such contact may be
inappropriate. He is available to attend
meetings with major shareholders to listen
to their views in order to help develop a
balanced understanding of their issues and
concerns.
The Senior Independent Director plays
an important role in respect of succession
to the group chairmanship by ensuring there
is an orderly succession process. Alan
Thomson, the then Senior Independent
Director, led the work of the Nomination
Committee in selecting and appointing a
successor to Sir John Banham as Chairman
of the board.
The Senior Independent Director is
responsible for leading the annual appraisal
of the Chairman’s performance and this is
discussed further under ‘Review of the
Chairman’s Performance’ on page 97.
The Role of the Company
Secretary
Simon Farrant was appointed Company
Secretary on 1st May 1999. He is secretary
to the board and all of its committees.
Mr Farrant’s biographical details are set out
on page 83.
The Company Secretary reports to the
Chairman on board governance matters.
Together with the Chairman he keeps the
efficacy of the company’s and the board’s
governance processes under review and
considers improvements. He is also
responsible to the board in respect of
compliance with board procedures. He is
responsible, through the Chairman, for
advising and keeping the board up to date
on all legislative, regulatory and governance
matters and developments. Under the
direction of the Chairman, the Company
Secretary’s responsibilities include ensuring
good information flows within the board
and its committees and between senior
management and non-executive directors,
as well as facilitating induction and assisting
with professional development as required.
The advice, services and support of the
Company Secretary are available to all
individual directors.
Board Meetings
The board meets regularly throughout the
year in order to effectively discharge its duties.
During the year ended 31st March 2012
the board met seven times. The board met
once between 31st March 2012 and the
date of publication of this annual report.
At its meeting on 29th September
2011, the board reviewed and approved the
board agenda plan for 2012/13 and for
subsequent years. The board agreed that
the business usually conducted at the
meeting held in early May each year could
be conducted at other meetings during the
year and that such a meeting was not,
therefore, required or necessary.
Accordingly, the board has agreed to reduce
the number of meetings it holds each year
to six by eliminating its meeting in early May.
The board will keep the efficacy of this
change under review.
During the year ended 31st March
2012, the board met outside the UK on
one occasion, in September 2011, in
Philadelphia, USA when it visited Fine
Chemicals’ active pharmaceutical ingredients
(API) manufacturing facility at Riverside,
Conshohocken, Pennsylvania.

The board ensures that its committees
are provided with sufficient resources to
undertake their duties, including access to
the services of the Company Secretary as
required. Each board committee has the
authority to seek any information that it
requires from any officer or employee of the
company or its subsidiaries. In connection
Corporate Governance Report continued
with its duties, each committee is authorised
by the board to take such independent
advice (including legal or other professional
advice), at the company’s expense, as it
considers necessary. Each committee may
request information from, or commission
investigations by, external advisers.
The board committees formally report
to the board on their proceedings after each
meeting and generally on all matters and
activities for which they are responsible
through the committee chairmen and via
committee minutes.
Johnson Matthey Annual Report & Accounts 2012
Report of the Directors – Governance
Governance
88
Board Committee Membership
Each independent non-executive director is a member of each board committee. No one other than the board committee chairmen and
members is entitled to be present at a meeting of the Nomination Committee, the Audit Committee or the MDRC. Others may attend,
however, at the invitation of the board committee. Executive directors are not members of the board committees. The Company Secretary
is secretary to each of the board committees.
Alan Ferguson was appointed as Chairman of the Audit Committee with effect from the close of the 2011 Annual General Meeting, having
been appointed as a non-executive director on 13th January 2011. Michael Roney took over the chairmanship of the Management Development
and Remuneration Committee, also with effect from the close of the 2011 Annual General Meeting.
The current membership of the board committees is shown below:
Nomination Committee Audit Committee MDRC
Tim Stevenson Chairman Invited to attend Member
Neil Carson Invited to attend Invited to attend Invited to attend
Alan Ferguson Member Chairman Member
Sir Thomas Harris Member Member Member
Robert MacLeod – Invited to attend –
Larry Pentz – – –
Michael Roney Member Member Chairman
Bill Sandford – – –
Dorothy Thompson Member Member Member
The board takes into account the value of ensuring that board committee membership is refreshed when deciding chairmanship and
membership of the committees, and in doing so seeks to ensure that undue reliance is not placed on particular individuals.
Board Committees
The board has established the following committees:
• The Nomination Committee
• The Audit Committee
• The Management Development and Remuneration Committee (MDRC).
The Nomination Committee Report is on page 105, the Audit Committee Report is on pages 106 and 107 and the Remuneration Report,
which describes the work of the MDRC, is on pages 108 to 117.
The reporting framework of the board committees and of the Chief Executive’s Committee and its sub-committees is shown below.
Key:
Board Committees
Executive Committees
NOMINATION
COMMITTEE
Chairman
Tim Stevenson
CSR
Compliance
Committee
IT Committee
Contracts
Review
Committee
Finance
and
Administration
Committee
MDRC
Chairman
Michael
Roney
AUDIT
COMMITTEE
Chairman
Alan Ferguson
BOARD
Chairman
Tim Stevenson
Chief Executive
Chief Executive’s Committee

89
Board Committee Terms of Reference
Each board committee has written terms of reference which have been approved by the board and are reviewed periodically to ensure that
they comply with the latest legal and regulatory requirements and reflect developments in best practice. The terms of reference of the Audit
Committee were reviewed in detail during the year ended 31st March 2012 in order, in part, to reflect the recommendations of the Code.
Its amended terms were adopted by resolution of the board on 22nd November 2011.
The terms of reference of each board committee can be found in the Investor Relations / Corporate Governance section of the company’s
website, or may be obtained from the Company Secretary. The following is a summary of the terms of reference of each board committee:
NOMINATION COMMITTEE
Responsibilities Advising the board and making recommendations to the board on the appointment and, if necessary,
the removal of executive and non-executive directors
Membership All the independent non-executive directors and the group Chairman
Chairman The group Chairman, Tim Stevenson (the group Chairman may not chair the committee when it is dealing
with the matter of succession to the chairmanship of the company)
Attending by invitation The Chief Executive, the Group Director, Human Resources and Environment, Health and Safety and
external advisers when appropriate
Quorum Two members, each of whom must be independent non-executive directors
Number of meetings per year As required
Committee report Page 105
AUDIT COMMITTEE
Responsibilities Financial Reporting
• Monitoring the integrity of the group’s reported financial information and reviewing significant financial
reporting issues and judgments which they contain
Internal Control and Risk Management Systems
• Keeping under review the adequacy and effectiveness of the group’s internal financial controls and
internal control and risk management systems
• Reviewing the company’s procedures for handling allegations from whistleblowers
Internal Audit
• Monitoring and reviewing the effectiveness of the group’s internal audit function and approving the
appointment and removal of the head of the internal audit function
• Considering and approving the remit of the internal audit function
• Reviewing and approving the annual internal audit plan
• Reviewing internal audit reports
External Audit
• Considering and making recommendations to the board, to be put to shareholders for approval at
the annual general meeting, in relation to the appointment, reappointment and removal of the
external auditor
• Overseeing the relationship with the external auditor including approving its fee for audit services
and its terms of engagement, assessing annually the effectiveness of the audit process and the
independence and objectivity of the external auditor, taking into account the provision of any
non-audit services
• Developing and implementing a policy on the supply of non-audit services by the external auditor
and keeping this policy and any fees paid to the external auditor in respect of the supply of non-audit
services under review
• Meeting regularly with the external auditor, including at least once a year, without management being
present, to discuss its remit and any issues arising from the audit
• Reviewing and approving the annual external audit plan and reviewing the findings of the audit with
the external auditor

Corporate Governance Report continued
Johnson Matthey Annual Report & Accounts 2012
Report of the Directors – Governance
Governance
90
Board Committee Terms of Reference (continued)
AUDIT COMMITTEE (continued)
Membership All the independent non-executive directors, at least one of whom is required to have recent and relevant
financial experience. The group Chairman is not a member
Chairman Alan Ferguson. The chairman is required to be an independent non-executive director
Attending by invitation The group Chairman, the Chief Executive, the Group Finance Director, the Head of Internal Audit and Risk
and representatives from finance and other group functions as and when appropriate and necessary. The
external auditor is invited to attend on a regular basis. The chairman of the committee may request the
attendance of others at meetings including external advisers and, if so requested, executive directors will
also make themselves available
Quorum Two members
Number of meetings per year At least four per year at appropriate times in the reporting and audit cycle and otherwise as required
Committee report Pages 106 and 107
THE MANAGEMENT DEVELOPMENT AND REMUNERATION COMMITTEE (MDRC)
Responsibilities • Determining on behalf of the board fair remuneration for the Chief Executive, the executive directors
and the group Chairman, which, while set in the context of what the company can reasonably afford,
recognises their individual contributions to the company’s overall performance
• Assisting the board in ensuring that the current and future senior management of the group are
recruited, developed and remunerated in appropriate fashion
• Determining the remuneration and terms and conditions of employment (including in respect of
pension entitlement) of the Chief Executive and the executive directors and the remuneration and
terms of appointment of the group Chairman
• Reviewing the proposals of the executive for recommendation to the board on share option
schemes, executive bonus / incentive schemes and employee share participation schemes
• Reviewing training, development and succession plans for senior management of the company
• Reviewing the disclosure to be made of directors’ remuneration in the annual report
Membership All the independent non-executive directors and the group Chairman
Chairman Michael Roney. The chairman of the committee is required to be an independent non-executive director
Attending by invitation The Chief Executive, the Group Director, Human Resources and Environment, Health and Safety (except
when their own performance and remuneration are discussed) and external advisers when appropriate
Quorum Two members
Number of meetings per year At least two per year and at such other times as the chairman of the committee requires
Committee report Remuneration Report on pages 108 to 117

91
Board and Committee Attendance
The attendance of members at board and board committee meetings in the year ended 31st March 2012 was as follows:
Board Nomination Committee Audit Committee MDRC
Eligible to Eligible to Eligible to Eligible to
Director attend Attended attend Attended attend Attended attend Attended
Tim Stevenson 7 6(2) 2 1 (2) – 4(1) 4 3(2)
Sir John Banham 3 3 1 1 – 2(1) 2 2
Neil Carson 7 7 – 2(1) – 4(1) – –
Alan Ferguson 7 7 2 2 4 4 4 4
Sir Thomas Harris 7 7 2 1(3) 4 4 4 4
Robert MacLeod 7 7 – – – 4(1) – –
Larry Pentz 7 7 – – – – – –
Michael Roney 7 6(4) 2 2 4 3(4) 4 3(4)
Bill Sandford 7 7 – – – – – –
Dorothy Thompson 7 7 2 2 4 4 4 4
Alan Thomson 3 3 1 1 2 2 2 2
Robert Walvis 3 3 1 1 2 2 2 2
Notes
(1) Includes meetings attended by invitation for all or part of meeting.
(2) Tim Stevenson was unable to attend the board meeting and the meetings of the Nomination Committee and the MDRC on 10th May 2011 as the date coincided with the annual general
meeting of The Morgan Crucible Company plc of which he is Chairman.
(3) Sir Thomas Harris did not attend the meeting of the Nomination Committee on 29th March 2012, at which the matter of the appointment of an additional non-executive director following
his prospective retirement from the board was discussed.
(4) Michael Roney was unable to attend the board meeting on 19th July 2011, the 2011 Annual General Meeting held later that day or the meetings of the Audit Committee and the MDRC
held on the previous day because of coinciding commitments at Bunzl plc, where he is Chief Executive.
Where directors are unable to attend a
board or board committee meeting, they
communicate their comments and
observations on the matter to be considered
in advance of the meeting via the group
Chairman, the Senior Independent Director
or the relevant board committee chairman
for raising as appropriate at the meeting.
Individuals’ attendance at board and
board committee meetings is considered, as
necessary, during the one to one meetings
conducted by the Chairman with directors
as part of the formal annual review of their
performance. Further information on
performance evaluation is given under
‘Evaluation of the Board, Board Committees
and Directors’ on pages 96 and 97.
The Chief Executive’s Committee
In discharging his responsibilities, the Chief
Executive is assisted by the Chief Executive’s
Committee (CEC). The CEC is a
management committee chaired by the
Chief Executive. It is responsible for the
recommendation to the board of strategic
and operating plans and on making
recommendations on matters reserved
to the board where appropriate. It is
responsible for the executive management
of the group’s businesses.
During the year ended 31st March 2012
the CEC comprised the Chief Executive;
the Group Finance Director; the two other
executive directors; the division directors
who do not sit on the board; the Group
Director, Corporate and Strategic
Development; the Group Director, Human
Resources and Environment, Health and
Safety; and the Company Secretary and
Group Legal Director.
During the year ended 31st March
2012, the CEC met eight times. In order
to more effectively use the time of its
members, the CEC no longer meets formally
every month (except in August) and after
September 2011 moved to a programme
of meeting formally every other month and
informally on such other occasions as may
be necessary.
The CEC has a number of
sub-committees as referred to further
on page 88.
Effectiveness
The Composition of the Board
The board comprises the Chairman
(Tim Stevenson), the Chief Executive
(Neil Carson), three other executive
directors (Robert MacLeod, Larry Pentz
and Bill Sandford), and four independent
non-executive directors (Alan Ferguson,
Sir Thomas Harris, Michael Roney and
Dorothy Thompson).
The board seeks to ensure that both
it and its committees have the appropriate
range and balance of skills, experience,
knowledge and independence to enable
them to discharge their respective duties and
responsibilities effectively. Further information
on board and committee appointments is
set out on page 92 under ‘Appointments to
the Board and its Committees’ and in the
Nomination Committee Report on page 105.
The board is of the view that it is of
a size such that the requirements of the
business can be met, that changes to the
board’s composition and that of its
committees can be managed without undue
disruption, and that it is not so large as to
be unwieldy. The board is also of the view
that it includes an appropriate combination
of executive and non-executive directors
(and, in particular, independent non-executive
directors). The size of the board, as well as
its composition, is kept under review by the
Nomination Committee.
Throughout the year ended 31st March
2012, and from that date up to the publication
of this annual report, at least half the board
members, excluding the Chairman, were
non-executive directors determined by the
board to be independent (as referred to
further on page 93).
As announced on 22nd May 2012,
Sir Thomas Harris will be retiring from the
board at the close of the 2012 Annual
General Meeting on 25th July 2012.
Following his retirement there will be a
majority of executive directors on the board
pending the appointment of an additional
independent non-executive director. As
described in the Nomination Committee
Report on page 105, the process for the
appointment of an additional non-executive
director has commenced.

Corporate Governance Report continued
Johnson Matthey Annual Report & Accounts 2012
Report of the Directors – Governance
Governance
92
Appointments to the Board and
its Committees
The board, through the Nomination
Committee, follows a formal, rigorous and
transparent procedure for the selection and
appointment of new directors to the board.
The processes are similar for the appointment
of executive and of non-executive directors.
The Nomination Committee leads the
process for board appointments and makes
recommendations to the board. Further
information on the Nomination Committee
and its work is set out in the Nomination
Committee Report on page 105.
In considering board composition, the
Nomination Committee assesses the range
and balance of skills, experience, knowledge
and independence on the board, identifies
any gaps or issues, and considers any need
to refresh the board. If it is determined in
light of such evaluation that it is necessary
to appoint a new non-executive director,
the Committee prepares a description of the
role and of the capabilities required for the
appointment and sets objective selection
criteria accordingly. In doing so it has regard
for the benefits of diversity on the board,
including gender diversity. This is discussed
more fully under ‘Boardroom Diversity’ below.
The Committee considers any
proposed recruitment in the context of the
company’s strategic priorities, plans and
objectives as well as the prevailing business
environment. The Committee also takes into
account succession plans in place (and this
is discussed further under ‘Succession
Planning’ below). The Committee seeks
prospective board members who can make
positive contributions to the board and its
committees, including the capability to
challenge on such matters on strategy.
This is balanced with the desire to maintain
board cohesiveness.
The Committee uses external search
consultancies to assist in the appointment
process. Appointments are ultimately made
on merit against the agreed selection criteria.
The board recognises the importance
of developing internal talent for board
appointments as well as recruiting externally.
In this regard, the company has in place
various mentoring arrangements and
various types and levels of management
development programmes.
The board also recognises the
importance of recruiting non-executive
directors with the necessary technical skills
and knowledge relevant to the work of its
committees and who have the potential to
take over as committee chairmen.
Succession Planning
The board, through the MDRC, is actively
engaged in ongoing succession planning in
order to ensure that plans are in place for
the orderly and progressive refreshing of the
board and for the identification and
development of senior management with
potential for board and CEC positions.
Each division and corporate function
across the group prepares and maintains
succession plans with the assistance of
divisional and group Human Resources.
The CEC rigorously reviews these plans in
detail annually, with a focus on ensuring an
appropriate pipeline of talented and capable
individuals to fill senior roles. A key aim is to
ensure broad experience and encourage
cross fertilisation across the group’s
divisions. The CEC also considers the
identification and development of high
potential individuals. The review of the plans
by the CEC generally leads to further
refinement and changes, resulting in the final
plans which are submitted to the MDRC.
The MDRC reviews succession policy, the
succession plan and the management
development and succession planning
process each year.
Boardroom Diversity
The board believes that diversity is important
for board effectiveness. The board has
followed carefully the debate regarding the
representation of women in the boardroom
following the publication of Lord Davies’
report, ‘Women on Boards’, in February
2011 (the Davies Report).
Statement on Board Diversity
In response to the Davies Report, on
28th November 2011 the board published
the following statement on board diversity.
It is set out in the Investor Relations /
Corporate Governance section of the
company’s website.
“The board of Johnson Matthey has
followed the important debate around the
recommendations of Lord Davies’ review
on Women on Boards and the question
of boardroom diversity. We do not think
quotas, for the proportion of women on
the board or otherwise, are appropriate
for a number of reasons. We believe all
appointments should be made on merit
rather than through positive discrimination.
We are clear, however, that maintaining an
appropriate balance around our board table
through a diverse mix of skills, experience,
knowledge and background is of paramount
importance. Gender diversity is a significant
element of this.
At present the board has one woman
member in a board of nine. When we next
make an appointment to the board, our
brief to search consultants in the selection
process as regards external candidates will
be to review candidates from a variety of
backgrounds and perspectives. The
consultants will be asked to work to a
specification which will include the strong
desirability of producing a long-list of possible
candidates which fully reflects the benefits
of diversity, including gender diversity. Any
appointment of an internal candidate, while
similarly based on merit, will also take into
account the benefits of diversity, including
gender diversity.
Looking beyond the board to our wider
workforce, we recognise the importance of
diversity, including gender diversity, and the
benefits this can bring to our organisation.
With regard to gender diversity specifically,
Johnson Matthey faces challenges similar
to those faced by other organisations in the
chemical, technology and manufacturing
sectors. To address these, we have policies
and processes in place which are designed
to support gender diversity in employee
recruitment, development and promotion
and we are committed to ensuring that
women have an equal chance with men of
developing their careers within our business.
Finally, we encourage gender diversity at the
early career stage by working outside
Johnson Matthey to encourage women to
enter scientific and industrial fields.”

93
Gender Diversity Statistics
Number Proportion
The board 1 woman on the board as at the date of 11% of board membership
publication of this annual report
Senior management 32 women out of 196 total as at 16% of senior management
31st March 2012
Graduate intake – 30% of graduate intake
The group 2,205 women employees as at 22% of group employees
31st March 2012
The company has taken, and continues to take, several steps to promote diversity, including gender diversity, at senior management level
and in the boardroom. The basis of these measures is in developing policies and processes that prevent bias in relation to recruitment and
promotion, but the key to progress is in actively promoting diversity, ensuring that other positive measures are taken. These include requesting
balanced shortlists when recruiting, looking at diversity mix in company events and conferences, actively discussing diversity in succession
planning, promoting industrial and scientific careers to young women and developing family friendly and flexible employment policies. There
are challenges to overcome, particularly in respect of gender diversity, given the sector within which the group operates but the group is
making good progress.
Boardroom Diversity Policy
Following the publication of the Davies
Report, in October 2011 the FRC confirmed
its intention to include revisions in the next
version of the amended Code to be
published in 2012 in order to accommodate
the Davies Report recommendation in
respect of diversity policy. These revisions
will require companies to include in the
section of the annual report describing
the work of the nomination committee
a description of the board’s policy on
diversity, including gender, any measurable
objectives that it has set for implementing
the policy and progress on achieving the
objectives. The changes will formally
apply to companies with a financial year
commencing on or after 1st October 2012,
and so for Johnson Matthey’s year ending
31st March 2014.
The board is in the process of
reviewing the broad question of diversity
within the group and is considering a policy
for diversity.
Board Evaluation Process
The FRC also announced in October 2011
that a new supporting principle would be
included in the Code to the effect that
evaluation of the board should consider the
balance of skills, experience, independence
and knowledge of the company on the
board, its diversity, including gender, how
the board works together as a unit and
other factors relevant to its effectiveness.
Again, this change will be incorporated in
an updated version of the Code to be
published in 2012. The board is following
this principle in its board and committee
evaluation process which is underway as at
the date of publication of this annual report.
Further information is set out under
‘2011/12 Evaluation Process’ on pages 96
and 97.
Appointments to the Board
As described under ‘Appointments to the
Board and its Committees’ on page 92, the
search for board candidates is conducted,
and appointments made, on merit, against
objective selection criteria having due regard
for the benefits of diversity on the board,
including gender. Further information on
diversity in the context of board appointments
is contained in the Nomination Committee
Report on page 105.
Board Balance – Independence
of the Non-Executive Directors
and of the Chairman
The question of the independence of the
non-executive directors is relevant to board
balance.
Director independence was reviewed
by the board at its meeting on 29th March
2012. In making its determination of
independence in respect of a director, the
board considers all relevant relationships
and circumstances, including those set out
in the Code. The board considers, for
example, whether the director has, or has
had within the last three years, a material
business relationship with the company,
holds cross directorships or has significant
links with other directors through
involvement in other companies or bodies,
or represents or has a material connection to
a controlling or significant shareholder or is
nominated by a shareholder.
The board considers that there are
no business or other relationships or
circumstances which are likely to affect,
or may appear to affect, the judgment
of any non-executive director and each
non-executive director was determined by
the board to be independent in character
and judgment.
There are no cross directorships or
reciprocal directorships among the
directors; no two directors are also directors
of another company.
Tim Stevenson was considered by the
board to meet the independence criteria set
out in the Code on his appointment as a
non-executive director and Chairman
Designate in March 2011 and on his
appointment as Chairman in July 2011.
Sir John Banham, who retired as Chairman
at the close of the 2011 Annual General
Meeting in July 2011, was not involved in
the selection or appointment of Mr Stevenson
as Chairman.
Information on the company’s
procedures for authorising potential conflicts
of interest is set out under ‘Directors’
Conflicts of Interest’ on page 95.

Corporate Governance Report continued
Johnson Matthey Annual Report & Accounts 2012
Report of the Directors – Governance
Governance
94
Time Commitment of
the Chairman and of the
Non-Executive Directors
The board recognises that it is vital that all
directors should be able to dedicate
sufficient time to the company to effectively
discharge their responsibilities.
The time commitment required by the
company is considered by the board and by
individual directors on appointment. The
letters of appointment of the Chairman and
of each non-executive director set out the
expected minimum time commitment for
their roles. Each undertake that they will
have sufficient time to meet what is expected
of them for the proper performance of their
duties and acknowledge that there may, on
occasion, be a need for additional time
commitment. The minimum time commitment
considered by the board to be necessary for
a non-executive director and provided in the
letters of appointment is two days per
month following induction. In his letter of
appointment, the Chairman undertook to
devote such time to the affairs of the
company as is required by his duties
as Chairman.
The other significant commitments of the
Chairman and of each non-executive
director are disclosed to the board before
appointment, with an indication of the time
commitment involved. The board requires to
be, and is, informed of subsequent changes
as they arise.
Details of Tim Stevenson’s other
significant commitments are set out on
page 83. There were no changes to these
during the year ended 31st March 2012.
On 8th May 2012 it was announced by
The Morgan Crucible Company plc that
Mr Stevenson would be retiring as chairman
of that company on 31st July 2012.
Details of the non-executive directors’
other significant commitments are set out
on page 83. Alan Ferguson has, since his
appointment to the board, been appointed
as a non-executive director of Croda
International Plc (in July 2011), where he
has chaired the audit committee since
August 2011. He was also appointed as a
non-executive director of The Weir Group PLC
in December 2011 and has chaired its
audit committee since May 2012. These
appointments were reported to the board
as they arose. The board assessed the
impact of these appointments and believes
that Mr Ferguson continues to be able to
manage his time commitments and allocate
sufficient time to the company to discharge
his responsibilities effectively, including his
responsibilities as Chairman of the Audit
Committee.
Terms of Appointment of the
Non-Executive Directors
The non-executive directors are appointed
for specified terms subject to annual
election and to the provisions of the
Companies Act 2006 (the 2006 Act) relating
to the removal of a director.
Any term beyond six years for a
non-executive director is subject to
particularly rigorous review and takes into
account the need for progressive refreshing
of the board. No non-executive director who
will be proposed for re-election at the 2012
Annual General Meeting on 25th July 2012
will then have served longer than six years.
The terms and conditions of
appointment of the non-executive directors
and the contracts of service of the executive
directors with the company are available to
be inspected by any person at the
registered office of the company during
normal business hours. They are also
available for inspection at the annual general
meeting of the company prior to the meeting
and during the meeting. Accordingly, they
will be available for inspection at Merchant
Taylors’ Hall, 30 Threadneedle Street,
London EC2R 8JB from 10.00 am on
Wednesday 25th July 2012 until the
conclusion of the 2012 Annual General
Meeting.
Annual Re-Election of Directors
The company’s Articles of Association
require one third of the board to retire by
rotation at each annual general meeting.
However, the Code provides that all
directors of FTSE 350 companies should
be subject to re-election by their
shareholders every year subject to
continued satisfactory performance. In
accordance with this provision, the board
has decided that all directors will retire at
each annual general meeting and offer
themselves for re-election by shareholders.
Each director stood for re-election
at the 2011 Annual General Meeting. All
directors will be offering themselves for
re-election at the 2012 Annual General
Meeting except for Sir Thomas Harris, who
will be retiring from the board at the close of
that meeting.
Biographical details of each of the
directors, including details of their other
directorships and responsibilities and relevant
previous positions held, together with any
further relevant factors including details of the
their skills and experience and contributions
to the board, are set out in the circular to
shareholders in respect of the 2012 Annual
General Meeting. This is to assist
shareholders to take an informed decision
on the resolutions for their re-election.
The circular sets out to shareholders why
the board believes each director should be
re-elected based on continued satisfactory
performance in the role. In the circular, the
Chairman confirms to shareholders that,
following formal performance evaluation, the
performance of each non-executive director
proposed for re-election continues to be
effective and to demonstrate commitment
to the role (including commitment of time
for board and board committee meetings).
Further information on performance
evaluation is given under ‘Evaluation of the
Board, Board Committees and Directors’
on page 96.
Information and Support
The board has in place processes to ensure
that it is supplied in a timely manner with
information in a form and of a quality
appropriate to enable it to discharge its
duties. The Chairman, through the Company
Secretary and with the support of the
executive directors and management,
ensures that this information is of high
quality in terms of its accuracy, clarity,
appropriateness, comprehensiveness and
currency.
Directors are able to seek clarification
or amplification from management where
necessary.
The role of the Company Secretary in
providing support and information is set out
on page 87.
Independent Professional Advice
The non-executive and the executive
directors have access to independent
external professional advice (such as legal
and financial advice) at the company’s
expense where they judge this necessary to
discharge their responsibilities as directors.
Director Induction, Familiarisation,
Training and Development
Induction
The company puts in place full, formal and
tailored induction programmes for all new
directors on joining the board. While this
takes into account the directors’ different
backgrounds and experience, the induction
is aimed to be a broad introduction to the
group’s businesses and its areas of
significant risk. Key elements of the induction
process are meeting the executive directors
and senior and middle management
individually and collectively and visiting the
group’s major operating sites.

95
Since their appointments Tim
Stevenson and Alan Ferguson have
undergone tailored induction programmes
facilitated by the Company Secretary. These
programmes included meetings with the
Chief Executive, the executive directors and
senior management in order to be briefed
on group strategy and on individual
businesses, briefing sessions with key group
functions and visits to the principal UK sites.
The programmes also allowed Mr Stevenson
and Mr Ferguson to familiarise themselves
with any issues arising from service on, or
chairmanship of, board committees. As part
of his induction programme, Tim Stevenson
had separate meetings with several major
shareholders.
Familiarisation, Training and Development
To ensure the effective fulfilment of the roles
of the directors on the board and on the
board committees and to ensure that their
contributions remain informed and relevant,
various steps are taken to ensure that all
directors are able to gain and to continually
update and refresh their knowledge and
skills. The intention is that all directors have
familiarity with, and appropriate knowledge
of, the company and gain access to its
operations and employees. The board
ensures that the company provides the
necessary resources to allow this to happen.
Each board meeting includes one or
more business or strategy presentations
from senior managers. To ensure that the
board is kept up to date on important
matters, including environmental, legal,
governance and regulatory developments,
presentations are also made to the board by
both external and internal advisers.
The board also holds at least one board
meeting per year at one of the group’s
operational sites and takes the opportunity
to tour the site and discuss business issues,
risks and strategy with local management.
During the year ended 31st March 2012,
the board visited Fine Chemicals’ API
manufacturing facility at Riverside,
Conshohocken, Pennsylvania, USA in
September 2011 and Precious Metal
Products’ Catalysts and Chemicals
manufacturing facility at Royston,
Hertfordshire in the UK in March 2012.
The board toured these sites and received
presentations from management on the
recently acquired facility at Riverside and
on Catalyst and Chemicals’ new products
respectively. Individual non-executive
directors also undertake site visits.
Such presentations, meetings and site
visits assist the non-executive directors in
familiarising themselves with, and gaining a
greater insight into, the group’s businesses
and help to give a balanced overview of the
group. They enable the non-executive
directors to continue to develop and refresh
their knowledge and understanding of the
group’s businesses, the markets in which it
operates and its key relationships. They are
also important for building links with the
group’s employees.
As part of the annual performance
review process referred to under ‘Evaluation
of the Board, Board Committees and
Directors’ on page 96, the Chairman meets
with each director annually on a one to one
basis to review and agree their individual
training and development requirements.
Indemnification of Directors
and Insurance
Under Deed Polls dated 20th July 2005 the
company granted indemnities in favour of
each director of the company in respect of
any liability that he or she may incur to a
third party in relation to the affairs of the
company or any group member. Such
indemnities were in force during the year
ended 31st March 2012 for the benefit of all
persons who were directors of the company
at any time during the year and remain in
force for the benefit of all persons who are
directors of the company as at the date
when this Report of the Directors was
approved and from that date up to the date
of publication of this annual report.
Under Deed Polls also dated 20th July
2005 the company granted indemnities in
favour of each director of its subsidiaries in
respect of any liability that he or she may
incur to a third party in relation to the affairs of
any group member. Such indemnities were
in force during the year ended 31st March
2012 for the benefit of all persons who were
directors of the subsidiaries at any time
during the year and remain in force for the
benefit of all persons who are directors of
the subsidiaries as at the date when this
Report of the Directors was approved and
from that date up to the date of publication
of this annual report.
The company has in place appropriate
directors and officers liability insurance cover
in respect of legal action against, amongst
others, its executive and non-executive
directors.
Copies of the Deed Polls and the
company’s Articles of Association are
available to be inspected by any person at
the registered office of the company during
normal business hours. They are also
available for inspection at the annual general
meeting of the company prior to the meeting
and during the meeting. Accordingly, they
will be available for inspection at Merchant
Taylors’ Hall, 30 Threadneedle Street,
London EC2R 8JB from 10.00 am on
Wednesday 25th July 2012 until the
conclusion of that meeting.
Neither the company nor any
subsidiary has indemnified any director of
the company or a subsidiary in respect of
any liability that he or she may incur to a
third party in relation to a relevant
occupational pension scheme.
Directors’ Conflicts of Interest
Under the Companies Act 2006 (the 2006
Act), a director must avoid situations in
which he or she has, or can have, a direct
or indirect interest that conflicts with, or may
conflict with, the interests of the company.
This covers, in particular, the exploitation of
property, information or opportunity and it
applies whether or not the company is in a
position to take advantage of it. There is no
breach of this duty if authorisation of the
conflict situation has been given by the
independent directors. The company’s
Articles of Association give power to the
independent directors to give such
authorisation but board authorisation is not
permitted in respect of the acceptance of
benefits from third parties. Directors also
have a duty under the 2006 Act to make
prior declaration to the other directors of the
nature and extent of any direct or indirect
interest in a proposed transaction or
arrangement with the company. Additionally,
directors must declare the nature and extent
of any direct or indirect interest in an existing
transaction or arrangement entered into by
the company, to the extent that the interest
has not been declared under the duty in
respect of proposed transactions or
arrangements.

Corporate Governance Report continued
Johnson Matthey Annual Report & Accounts 2012
Report of the Directors – Governance
Governance
96
Established procedures in accordance
with the company’s Articles of Association
are in place to ensure compliance with the
directors’ conflicts of interest duties under
the 2006 Act and for dealing with conflict
of interest situations. The company has
complied with these procedures during the
year ended 31st March 2012 and from that
date up to the date of publication of this
annual report. During the year, details of any
new conflicts or potential conflict matters
were submitted to the board for consideration
and, where appropriate, these were
approved.
In March 2012, the board undertook
an annual review of the register of previously
approved conflict or potential conflict
matters and, to the extent that these were
still relevant, agreed that they should
continue to be authorised on the terms
previously set out. In each case, the review
was undertaken by directors who were
genuinely independent of the conflict matter.
Authorised conflict or potential conflict
matters will continue to be reviewed by the
board on an annual basis.
The board confirms that the company
complies with its procedures in place to
authorise conflict situations and is satisfied
that its powers to authorise conflict
situations are being exercised properly and
effectively and in accordance with the
company’s Articles of Association.
Evaluation of the Board, Board
Committees and Directors
With the aim of improving effectiveness, the
board undertakes a formal annual evaluation
of its own performance and that of its
committees and individual directors. The
evaluation, which is led by the Chairman,
aims to be as rigorous and objective as
possible.
The process for evaluation of the board
considers its strengths and weaknesses,
the range and balance of skills, experience,
independence and knowledge of the
company on the board, its diversity,
including gender diversity, how the board
works together as a unit and any other
factors considered relevant to its
effectiveness. Individual evaluation aims to
show whether each director continues to
contribute effectively and to demonstrate
commitment to the role (including time
commitment). The Chairman acts on the
results of the performance evaluation.
The strengths are recognised and any
weaknesses addressed.
2010/11 Evaluation Process
Following the appointment of Tim Stevenson
as Chairman Designate in March 2011, the
board instigated a formal evaluation of its
performance and that of its committees
and individual directors. This evaluation was
led by Tim Stevenson and was externally
facilitated by an independent consultant
experienced in board evaluation. This was
the first time that the board had undertaken
an externally facilitated evaluation process.
The external facilitator had no other
connection with the company and was not
subject to any conflict of interest. The
evaluation was designed, in particular, to
allow Tim Stevenson to gain an objective
overview and evaluation of the workings of
the board and its committees, of strengths
and weaknesses, of areas for further
improvement and of the contributions of
individual directors. The review was
intended to build on the internal board
review carried out by the Company
Secretary in 2009/10.
The methodology of the evaluation
included a series of detailed one to one
meetings with each director and the
Company Secretary in order to gather views
and feedback. The external evaluator also
attended one full board meeting as an
observer. The review covered the following
main areas, which were determined by the
Chairman and the external evaluator to be
of most importance or value to the board:
• Overall board working and efficiency;
• Board composition and balance;
• Succession planning;
• Strategy process;
• Financial and non-financial monitoring;
• Risk management and risk
management systems; and
• Board development (including training
and site visits).
The full evaluation process was not
complete at the date of publication of the
2011 annual report and has since been
concluded. Overall feedback from the
evaluation was provided in the form of a
presentation by the external evaluator at a
meeting of the board in May 2011, which
then debated the findings. The board also
discussed the evaluation process itself and
agreed that the external evaluation was
broadly effective. The external evaluator also
provided a comprehensive written report
to the Chairman, feedback to the board
committee chairmen and individual
feedback for the Chief Executive.
Good progress was noted across all
the areas of review, building on initiatives
and action developed as a result of prior
effectiveness reviews. Certain suggestions
were made to ensure continuing progress.
The evaluation process gave assurance that
each director continued to contribute
effectively and demonstrated commitment
to the role.
The Chairman agreed with the board
that no actions or changes to board or
committee practice were required in the
immediate term following the review but that
the output would be considered further
following his appointment as Chairman in
July 2011 and in the course of the review for
2011/12 to ensure continuing improvement.
2011/12 Evaluation Process
As the 2010/11 review process had been
externally facilitated, the board decided to
conduct an internal review process during
2012. The evaluation of the performance
and effectiveness of the board and its
committees and individual directors is being
conducted by the Chairman in collaboration
with the board committee chairmen. The
evaluation is not complete at the date of
publication of this annual report.
The evaluation process has included
one to one interviews by the Chairman with
each director and the Company Secretary.
The topics being discussed, which were
determined by the Chairman to be the
principal areas of focus following the
externally facilitated review in the previous
year, include:
• Strategy and strategy focus;
• Monitoring financial and non-financial
performance;
• Stakeholder relationships;
• Risk and uncertainties;
• Executive remuneration; and
• Key themes for discussion focus in
2012/13.
In carrying out the evaluation, the
board is following the new supporting
principle to be included in the Code, as
announced by the FRC in October 2011,
to the effect that evaluation of the board
should consider, amongst other things,
the board’s diversity, including gender
diversity. Further information is set out under
‘Board Evaluation Process’ on page 93.

97
The Chairman proposes to report the
outcome of the evaluation process to the
board meeting in July 2012. The board will
debate the findings and any lessons to be
learned and will agree any follow up actions
and responsibilities as appropriate. The key
outcomes of the evaluation processes and
the steps the board intends to take to
address any issues will be reported in the
2013 annual report.
Future Reviews
The board intends to undertake an externally
facilitated evaluation process at least every
three years. In the intervening years, the
review will be facilitated by the Chairman
supported by the Senior Independent
Director and the Company Secretary.
Review of the Chairman’s
Performance
The non-executive directors recognise that
the Chairman’s effectiveness is vital to that
of the board. Led by the Senior Independent
Director, the non-executive directors are
responsible for performance evaluation of
the Chairman and for providing a fair and
balanced assessment to shareholders.
In view of the change in the
chairmanship of the company with the
appointment of Tim Stevenson as Chairman
on 19th July 2011, a separate formal review
of the Chairman’s performance was not
undertaken during the year ended 31st March
2011 but feedback on the Chairman’s
performance was reflected in the externally
facilitated evaluation referred to on page 96.
A review of the Chairman’s performance
was, however, undertaken in the year ended
31st March 2012. On 28th March 2012,
the non-executive directors, led by the
Senior Independent Director, met separately,
without the Chairman being present, to
discuss the Chairman’s performance. In
doing so they took into account the views
of executive directors. The results were
subsequently reported by the Senior
Independent Director to the board. They
considered that the Chairman demonstrated
effective leadership and that his
performance and contribution were strong.
Accountability
The Audit Committee
The membership of the Audit Committee
is set on page 90.
The terms of reference of the Audit
Committee are summarised on pages 89
and 90. 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 Audit Committee Report, which
describes the work of the Audit Committee
in discharging its responsibilities, is set out
on pages 106 and 107.
Financial Experience
The board is satisfied that at least one
member of the Audit Committee, Alan
Ferguson, has recent and relevant financial
experience. His biographical details are set
out page 83.
Financial and Business Reporting
In its reporting to shareholders the board
recognises its responsibility to present a fair,
balanced and understandable assessment
of the group’s position and prospects. This
responsibility covers the Annual Report and
Accounts and extends to interim and other
price sensitive public reports and reports to
regulators as well as to information required
to be presented by statutory requirements.
The Business Review on pages 4 to 75
sets out explanations of the basis on which
the company generates or preserves value
over the longer term (the business model)
and the strategy for delivering the objectives
of the company. This annual report is
intended to provide the information
necessary to enable an assessment of the
company’s performance, the business
model and its strategy.
The group’s organisational structure is
focused on its three divisions. These are all
separately managed but report to the board
through a board director. The CEC receives
and reviews monthly summaries of financial
results from each division through a
standardised reporting process. Forecasts
are prepared monthly throughout the year.
The group has in place a comprehensive
annual budgeting and planning process
including plans for the following two years.
Budgets are approved by the board.
Variances from budget are closely
monitored. In addition to the annual
budgeting process, there is a ten year
strategy review process as referred to
on page 12.
Directors’ and Auditor’s Responsibility
A statement of the directors’ responsibility
for preparing the Annual Report and
Accounts is set out on page 120. A
statement by the auditor, KPMG Audit Plc
about its reporting responsibilities is set out
on page 121.
Risk Management and Internal
Control
The board is ultimately responsible for
maintaining sound risk management and
internal control systems (including financial
controls, controls in respect of the financial
reporting process and controls of an
operational and compliance nature).
As the company is the parent company
of a group, its internal control systems are
on a groupwide basis and the review of their
effectiveness is implemented and reported
from a groupwide perspective. The
directors’ review of the effectiveness of
internal control systems and the application
of the Revised Guidance for Directors on the
Combined Code issued by the FRC in
October 2005 (Revised Turnbull Guidance)
extends to the company and its
subsidiaries.
The group’s risk management systems
and internal control systems are designed to
meet the group’s needs and manage the
risks to which it is exposed, including the
risk of failure to achieve business objectives,
but such risks cannot be eliminated. Such
systems can only provide reasonable, but
not absolute, assurance against a failure to
meet business objectives or against the risk
of material misstatement or loss. They can
never completely protect against such
factors as unforeseeable events, human
fallibility or fraud.
The board confirms that there is a
framework of continuous and ongoing
processes (established in accordance with
the Revised Turnbull Guidance) in place for
identifying, evaluating and managing the
significant risks faced by the group. These
processes are regularly reviewed by the
board and the Audit Committee as
appropriate and have been in place during
the year ended 31st March 2012 and up to
the date of approval of this annual report.
The board is responsible for
determining the nature and extent of the
significant risks it is willing to take in
achieving its strategic objectives. The
board’s view of the group’s key strategic
and operating risks and how the company
seeks to manage those risks is set out on
pages 20 to 23.

Corporate Governance Report continued
Johnson Matthey Annual Report & Accounts 2012
Report of the Directors – Governance
Governance
98
The Risk Management and Internal
Control Systems
The group’s risk management and internal
control systems comprise group policies,
procedures and practices covering a range
of areas including the appropriate
authorisation and approval of transactions,
the application of financial reporting
standards and the review of financial
performance and significant judgments.
The Group Control Manual, which is
distributed to all group operations, clearly
sets out the composition, responsibilities
and authority limits of the various board and
executive committees and also specifies
what may be decided without central
approval. It is supplemented by other
specialist policy and procedures manuals
issued by the group, divisions and individual
businesses or departments.
Review of Effectiveness of the Group’s
Risk Management and Internal Control
Systems
A key responsibility of the board is for
reviewing, assessing and confirming the
adequacy and effectiveness of the group’s
risk management and internal control
systems (including financial controls,
controls in respect of the financial reporting
process and controls of an operational and
compliance nature). The board has
delegated part of this responsibility to the
Audit Committee. In addition to determining
risk appetite, the board specifically reviews
EHS strategy, performance and assurance
processes as well as the performance of
group HR and IT. The Audit Committee
reviews other key risk areas and the
assurance processes in respect of the
management of risk.
The board, through setting its own
annual agenda plan and in approving that
of the Audit Committee, defines the process
to be undertaken for the review, including
the scope and frequency of assurance
reports received throughout the year. The
board and Audit Committee agenda plans
are designed to ensure that all significant
areas of risk are reported on and considered
during the course of the year.
The Audit Committee receives and
considers regular reports and presentations
from management, from the heads of group
corporate functions such as group treasury
and from internal audit. These identify and
provide assessments of areas of significant
risk either for the businesses or the group
as a whole and of the effectiveness of the
control systems in managing those risks.
Any significant issues are highlighted and
discussed. The Audit Committee is thus
able to focus on the key risk areas and
effectively assess how they have been
identified, evaluated and managed. In
assessing the effectiveness of the control
systems, the Audit Committee considers
carefully the impact of any weaknesses,
whether necessary actions are being taken
promptly and whether more extensive
monitoring is needed. Amongst other
matters, the Audit Committee reviews the
group’s credit control procedures and risks,
controls over precious metals, IT controls
and the group’s whistleblowing procedures.
The Audit Committee also reviews the
performance of both the internal and
external auditors. The Audit Committee also
considers observations by the external
auditor in relation to internal financial control.
The group’s internal audit function
plays an important part in the assessment of
the risks facing the group and is responsible
for independently monitoring and assessing
the adequacy and effectiveness of the
group’s systems of internal financial
control. Internal audit reports on control
effectiveness to the Audit Committee in line
with the agreed audit plan and Audit
Committee agenda plan. The internal audit
function is a unified, groupwide function
under the leadership of the Head of Internal
Audit and Risk. The global nature of the
function allows for more holistic assurance
and consistency in approach. The Head of
Internal Audit and Risk has a dual reporting
line to the Group Finance Director and to the
Chairman of the Audit Committee. The Audit
Committee approves the plans for internal
audit reviews and receives the reports
produced by the internal audit function on
a regular basis. Plans for corrective action
and control improvement are agreed with
management to address any issues,
non-compliance or control deficiencies
identified by internal audits. Internal audit
follows up the implementation of its
recommendations, including any
recommendations to improve internal
controls, and reports the outcome to senior
management and to the Audit Committee.
Each year businesses are required
to formally review their financial and
non-financial controls and their compliance
with group policies and statutory and
regulatory obligations and to provide
assurance on these. The results of these
reviews are collated and summarised by the
internal audit function and a report is made
annually to the Audit Committee.
The Audit Committee conducts an
annual assessment of effectiveness on
behalf of the board in order for the board to
report on effectiveness in the annual report.
The Audit Committee reports to the board
on the operation and effectiveness of the
risk management and internal control
systems and such reports are considered
by the board in forming its view of their
effectiveness. A report from the Audit
Committee on its activities and on the
work of internal audit is given on pages
106 and 107.
The board, in part through the Audit
Committee, has conducted an overarching
review of the effectiveness of the company’s
risk management and internal control
systems, covering all material controls,
including financial, operational and
compliance controls, for the year ended
31st March 2012 and up to the date of its
approval of this annual report on 6th June
2012. The review process accords with the
Revised Turnbull Guidance. Following this
review, the group is enhancing and
standardising the stock take procedures
across its gold and silver refineries.
Remuneration
The board has established a remuneration
committee, the Management Development
and Remuneration Committee (MDRC).
The membership of the MDRC is set
on page 90.
The terms of reference of the MDRC
are summarised on page 90. 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, which
describes the work of the MDRC, is set out
on pages 108 to 117.
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.

99
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’ on page 100.

2012 Annual General Meeting
The 2012 Annual General Meeting of the
company will be held at 11.00 am on
Wednesday 25th July 2012 at Merchant
Taylors’ Hall, 30 Threadneedle Street,
London EC2R 8JB.
The notice of the 2012 Annual General
Meeting is contained in the circular to
shareholders accompanying this annual
report, together with an explanation of the
resolutions to be considered at the meeting.
The notice of the 2012 Annual General
Meeting will be published on the Investor
Relations / Shareholder Centre / Annual
General Meeting section of the company’s
website.
The business to be transacted at the
meeting will include:
• To receive the company’s annual
accounts for the year ended 31st March
2012 together with the Report of the
Directors and the auditor’s report on
those accounts
• To receive and approve the directors’
remuneration report for the year ended
31st March 2012 and the auditor’s
report on the auditable part of the
directors’ remuneration report
• To declare a final dividend per ordinary
share in respect of the year ended
31st March 2012
• To declare a special dividend per
ordinary share and to effect a share
consolidation
• To re-elect all directors retiring at the
meeting who are seeking reappointment
Other Statutory Information
• To reappoint KPMG Audit Plc as
auditor of the company and to
authorise the directors to determine
its remuneration
• To authorise the company (and all
companies which are subsidiaries of
the company) in aggregate to make
political donations to political parties
or independent election candidates,
to make political donations to political
organisations other than political parties
and to incur political expenditure,
provided that the combined aggregate
amount of donations made and
expenditure incurred does not exceed
£50,000
• To authorise the directors to exercise
all the powers of the company to allot
shares in the company and to grant
rights to subscribe for, or to convert
any security into, shares in the
company up to certain limits
• To empower the directors to dis-apply
pre-emption rights when allotting equity
securities for cash, subject to certain
limits
• To authorise the company to make
market purchases of its own ordinary
shares, subject to certain limits and
conditions
• To permit a general meeting of the
company, other than an annual general
meeting, to be called on not less than
14 clear days’ notice.
A member entitled to attend and vote
at the meeting is entitled to appoint a proxy
to exercise all or any of his or her rights to
attend and to speak and vote on his or her
behalf at the meeting. A member may
appoint more than one proxy in relation to
the meeting provided that each proxy is
appointed to exercise the rights attached
to a different share or shares held by that
member. A proxy need not be a member
of the company.
Dividends
The interim dividend of 15.0 pence per
share (2011 12.5 pence) was paid in
February 2012.
The directors recommend a final
dividend of 40.0 pence per share in respect
of the year ended 31st March 2012 (2011
33.5 pence), making a total for the year of
55.0 pence per share (2011 46.0 pence),
payable on 17th August 2012 to
shareholders on the register at the close
of business on 3rd August 2012.
At the 2012 Annual General Meeting a
resolution will be proposed to declare a
special dividend of 100.0 pence per share
and to approve a share consolidation.
Full information on the proposed special
dividend and share consolidation is
contained in the circular to shareholders in
respect of the 2012 Annual General Meeting
accompanying this annual report.
Johnson Matthey Annual Report & Accounts 2012
Report of the Directors – Governance
Governance
100
100 2012 Annual General Meeting
100 Dividends
101 Dividend Payments and DRIP
101 Share Capital and Control
101 Listing of the Company’s Shares
101 American Depositary Receipt Programme
102 Employee Share Schemes
102 Interests in Voting Rights
102 Contracts with Controlling Shareholders
102 Directors
103 Appointment and Replacement of Directors
103 The Company’s Articles of Association
103 Powers of the Directors
103 The Interests of Directors in the Company’s Shares
103 Directors’ Interests in Contracts
103 Change of Control
104 Disabled Persons
104 Employee Involvement
104 Use of Financial Instruments
104 Branches
104 Policy on Payment of Commercial Debts
104 Charitable Donations
104 Political Donations and Expenditure
104 Financial Assistance Received from Government
104 Auditors and Disclosure of Information
104 Management Report
Contents>

101
Other than as referred to under
‘Employee Share Schemes’ on page 102,
during the year ended 31st March 2012 and
from that date up to the date of publication
of this annual report there were no
arrangements under which a shareholder
has waived or agreed to waive any
dividends nor any agreement by a
shareholder to waive future dividends.
Dividend Payments and DRIP
Dividends can be paid directly into
shareholders’ bank accounts. A Dividend
Reinvestment Plan (DRIP) is also available.
This allows shareholders to purchase
additional shares in the company with their
dividend payment. Further information and
a mandate can be obtained from the
company’s registrars, Equiniti, whose details
are set out on page 175 and on the Investor
Relations section of the company’s website.
Share Capital and Control
Capital Structure
The issued share capital of the company at
31st March 2012 was 214,675,736 ordinary
shares of £1.00 each (excluding treasury
shares). The company did not allot any shares
during the year ended 31st March 2012.
As at 31st March 2012, the company
held 5,997,877 treasury shares. There were
no purchases, sales or transfers of treasury
shares during the year ended 31st March
2012.
Purchase by the Company of its
Own Shares
At the 2011 Annual General Meeting,
shareholders renewed the company’s
authority to make market purchases of up
to 21,467,573 ordinary shares representing
10% of the issued share capital of the
company (excluding treasury shares) as at
1st June 2011. This authority subsisted at
31st March 2012.
During the year ended 31st March
2012 and from that date up to the date of
publication of this annual report, the
company did not make any purchases of its
own shares or propose to purchase its own
shares (either through the market or by an
offer made to all shareholders or otherwise),
nor did the company acquire any of its
own shares other than by purchase. Since
31st March 2012 the company has not
effected any purchases of its own shares,
entered into any options to purchase its own
shares or entered into any contracts to
make such purchases (including transactions
made through the market or by an offer
made to all shareholders or otherwise).
At the 2012 Annual General Meeting
the board will again seek shareholders’
approval to renew the annual authority for
the company to make purchases of its own
shares through the market.
Rights and Obligations Attaching to
Shares
The holders of ordinary shares in the
company are entitled to receive dividends
when declared, to receive the company’s
annual report, to attend and speak at
general meetings of the company, to
appoint proxies and to exercise voting
rights.
As at 31st March 2012 and as at the
date of publication of this annual report,
except as referred to below, there are no
restrictions on the transfer of ordinary shares
in the company, no limitations on the holding
of securities and no requirements to obtain
the approval of the company, or of other
holders of securities in the company, for a
transfer of securities.
The directors may, in certain
circumstances, refuse to register the transfer
of a share in certificated form which is not
fully paid up, where the instrument of
transfer does not comply with the
requirements of the company’s Articles of
Association, or if entitled to do so under the
Uncertificated Securities Regulations 2001.
The directors may also refuse to register a
transfer of ordinary shares in certificated
form, which represent 0.25% or more of the
issued share capital of the company,
following the failure by the member or any
other person appearing to be interested in
the shares to provide the company with
information requested under section 793 of
the Companies Act 2006 (the 2006 Act).
No person holds securities in the
company carrying any special rights with
regard to control of the company. There are
no restrictions on voting rights (including any
limitations on voting rights of holders of a
given percentage or number of votes or
deadlines for exercising voting rights) except
that a shareholder has no right to vote in
respect of a share unless all sums due in
respect of that share are fully paid. There
are no arrangements by which, with the
company’s cooperation, financial rights
carried by shares in the company are held
by a person other than the holder of the
shares. As at 31st March 2012 and as at the
date of publication of this annual report,
there are no agreements known to the
company between holders of securities that
may result in restrictions on the transfer of
securities or on voting rights.
Nominees and Liens
During the year ended 31st March 2012 and
from that date up to the date of publication
of this annual report:
• No shares in the company were
acquired by the company’s nominee,
or by a person with financial assistance
from the company, where the company
has a beneficial interest in the shares
(and there was no person who
acquired shares in the company in a
previous financial year in its capacity as
the company’s nominee or with financial
assistance from the company); and
• The company did not obtain or hold a
lien or other charge over its own shares.
Allotment of Securities for Cash and
Placing of Equity Securities
During the year ended 31st March 2012 and
from that date up to the date of publication
of this annual report, the company has not
allotted, nor has any major subsidiary
undertaking of the company allotted, equity
securities for cash (other than pursuant to
an open offer, a rights issue or any issue
specifically authorised by shareholders
or otherwise). During the year ended
31st March 2012 and from that date up
to the date of publication of this annual
report the company has not participated
in any placing of equity securities.
Listing of the Company’s Shares
The company’s shares have Premium Listing
on the London Stock Exchange and trade
as part of the FTSE 100 index under the
symbol JMAT.
American Depositary Receipt
Programme
The company has a sponsored Level 1
American Depositary Receipt (ADR)
programme which BNY Mellon administers
and for which it acts as Depositary. Each
ADR represents two ordinary shares of
the company. The ADRs trade on the US
over-the-counter market under the symbol
JMPLY. When dividends are paid to
shareholders, the Depositary converts such
dividends into US dollars, net of fees and
expenses, and distributes the net amount
to ADR holders. Contact details for BNY
Mellon are set out on page 175.

Employee Share Schemes
At 31st March 2012, 4,485 current and
former employees, representing
approximately 45% of employees
worldwide, were shareholders in the
company through the group’s employee
share schemes. Through these schemes,
current and former employees held
3,803,914 ordinary shares (1.77% of issued
share capital, excluding treasury shares). As
at 31st March 2012, 282 current and former
employees held options over 758,867
ordinary shares through the company’s
executive share option schemes. Also as at
31st March 2012, 2,676,241 ordinary shares
had been allocated but had not yet vested
under the company’s long term incentive plan
to 1,007 current and former employees.
Shares acquired by employees through
the company’s employee share schemes
rank equally with the other shares in issue
and have no special rights. Voting rights in
respect of shares held through the
company’s employee share schemes are
not exercisable directly by employees.
However, employees can direct the trustee
of the schemes to exercise voting rights on
their behalf. The trustees of the company’s
employee share ownership trust (ESOT)
have waived their rights to dividends on
shares held by the ESOT which have not yet
vested unconditionally in employees.
Interests in Voting Rights
The UK Financial Services Authority’s (FSA)
Disclosure and Transparency Rules (DTRs)
set out certain notification requirements in
respect of voting rights in listed companies.
In summary, a person must notify the issuer
of securities of the percentage of its voting
rights he or she holds as shareholder (or
holds or is deemed to hold through his or
her direct or indirect holding of certain
financial instruments) if, as a result of an
acquisition or disposal of shares in the
company or financial instruments, the
percentage of those voting rights reaches,
exceeds or falls below certain thresholds.
In respect of the company, the threshold
is 3% (and each 1% threshold above 3%,
up to 100%).
Information provided to the company
pursuant to the FSA’s DTRs is published on
a Regulatory Information Service and on the
Media / News / Regulatory News section of
the company’s website.
Contracts with Controlling
Shareholders
There were no contracts of significance (as
defined in the FSA’s Listing Rules) subsisting
during the year ended 31st March 2012 or
from that date up to the date of publication
of this annual report between any group
undertaking and a controlling shareholder.
There were no contracts for the provision of
services to any group undertaking by a
controlling shareholder subsisting during the
year ended 31st March 2012 or from that
date up to the date of publication of this
annual report.
Directors
The following served as directors during the
year ended 31st March 2012:
• Tim Stevenson
• Sir John Banham (retired 19th July 2011)
• Neil Carson
• Alan Ferguson
• Sir Thomas Harris
• Robert MacLeod
• Larry Pentz
• Michael Roney
• Bill Sandford
• Dorothy Thompson
• Alan Thomson (retired 19th July 2011)
• Robert Walvis (retired 19th July 2011).
The biographical details of all the
directors serving at 31st March 2012,
including details of their relevant experience
and other significant commitments, are
shown on page 83.
As announced on 22nd May 2012,
Sir Thomas Harris will be retiring from the
board at the close of the 2012 Annual
General Meeting on 25th July 2012.
Johnson Matthey Annual Report & Accounts 2012
Report of the Directors – Governance
Governance
102
The following information had been disclosed to the company under the FSA’s DTRs in respect of notifiable interests in the voting rights in
the company’s issued share capital exceeding the 3% notification threshold:
Nature of holding (1) Total voting rights % of total voting rights (2)
As at 31st March 2012:
BlackRock, Inc. Indirect 21,440,270 9.99%
Financial Instrument (CFD) 25,683 0.01%
Ameriprise Financial, Inc. Direct 264,202 0.12%
Indirect 10,512,731 4.89%
Lloyds Banking Group plc Indirect 10,731,602 4.99%
FIL Limited Indirect 10,516,934 4.89%
Financial Instrument (CFD) 43,890 0.02%
Legal & General Group Plc Direct 8,581,762 3.99%
From 31st March 2012 to 31st May 2012:
BlackRock, Inc. Indirect 21,262,792 9.90%
Financial Instrument (CFD) 269,490 0.13%
(1) A person has an ‘Indirect’ holding of securities if they are held on its behalf or it is able to secure that rights carried by them are exercised in accordance with its instructions.
(2) Total voting rights attaching to the issued ordinary share capital of the company (excluding treasury shares) at the date of disclosure as notified to the company.
Other than as stated above, as far as the company is aware, there is no person with a significant direct or indirect holding of securities in
the company.
Other Statutory Information continued

103
Appointment and Replacement
of Directors
The rules about the appointment and
replacement of directors are contained in
the company’s Articles of Association. The
Articles of Association provide that the
number of directors is not subject to any
maximum but must not be less than six,
unless otherwise determined by the company
by ordinary resolution. Directors may be
appointed by an ordinary resolution of the
members or by a resolution of the directors.
Under the Articles of Association, a
director appointed by the directors must
retire at the next following annual general
meeting and is not taken into account in
determining the directors who are to retire
by rotation at the meeting. Also under the
company’s Articles of Association, at least
one third of the board must retire by
rotation at each annual general meeting.
Notwithstanding these provisions, the
board has agreed that all directors will seek
re-election at each annual general meeting
in accordance with the Code. Accordingly,
all directors (other than Sir Thomas Harris)
will be offering themselves for re-election
at the 2012 Annual General Meeting.
A director may be removed by a
special resolution of the company. In
addition, a director must automatically
cease to be a director if (i) he or she ceases
to be a director by virtue of any provision of
the 2006 Act or he or she becomes
prohibited by law from being a director, or
(ii) he or she becomes bankrupt or makes
any arrangement or composition with his or
her creditors generally, or (iii) he or she is
suffering from a mental disorder, or (iv) he or
she resigns from his or her office by notice
in writing to the company or, in the case of
an executive director, the appointment is
terminated or expires and the directors
resolve that his or her office be vacated,
or (v) he or she is absent for more than six
consecutive months without permission of
the directors from meetings of the directors
and the directors resolve that his or her
office be vacated, or (vi) he or she is
requested in writing, or by electronic form,
by all the other directors to resign.
The Company’s Articles of
Association
The company’s Articles of Association are
available on the Investor Relations /
Corporate Governance section of the
company’s website. The company’s Articles
of Association may only be amended by a
special resolution at a general meeting of
the company.
Powers of the Directors
The powers of the directors are determined
by the company’s Articles of Association,
UK legislation including the 2006 Act and
any directions given by the company in
general meeting.
The directors have been authorised by
the company’s Articles of Association to
issue and allot ordinary shares and to make
market purchases of its own shares. These
powers are referred to shareholders for
renewal at each annual general meeting.
Any shares so purchased by the company
may be cancelled or held as treasury shares.
Further information is set out under
‘Purchase by the Company of its Own
Shares’ on page 101.
The Interests of Directors in the
Company’s Shares
The interests of persons who were directors
of the company at 31st March 2012, and
their connected persons, in the issued
shares of the company (or in derivatives or
other financial instruments relating to such
shares) as at that date notified or notifiable
to the company under the FSA’s DTRs are
given in the Remuneration Report on pages
116 and 117. The Remuneration Report also
sets out details of any changes in those
interests between 31st March 2012 and
31st May 2012.
Directors’ Interests in Contracts
Other than service contracts, no director
had any interest in any material contract with
any group company at any time during the
year ended 31st March 2012 or from that
date up to the date of publication of this
annual report. There were no contracts of
significance (as defined in the FSA’s Listing
Rules) subsisting during the year ended
31st March 2012 or from that date up to the
date of publication of this annual report to
which any group undertaking was a party
and in which a director of the company is
or was materially interested.
Change of Control
During the year ended 31st March 2012
and from that date up to the date of
publication of this annual report there were
no significant agreements to which the
company or any subsidiary was or is a party
that take effect, alter or terminate on a
change of control of the company following
a takeover bid.
However, the company and its
subsidiaries were, during this period, and
are, as at the date of publication of this
annual report, party to a number of
commercial agreements that may allow
the counterparties to alter or terminate
the agreements on a change of control
of the company following a takeover bid.
Other than the matters referred to below,
these are not deemed by the company to
be significant in terms of their potential
effect on the group as a whole.
The group has a number of loan notes
and borrowing facilities which may require
prepayment of principal and payment of
accrued interest and breakage costs if there
is change of control of the company. The
group has also entered into a series of
financial instruments to hedge its currency,
interest rate and metal price exposures
which provide for termination or alteration
if a change of control of the company
materially weakens the creditworthiness
of the group.
The company is party to a marketing
agreement with a subsidiary of Anglo
American Platinum Limited, originally
entered into in 1992, under which the
company was appointed as sales and
marketing agent for refined platinum group
metals worldwide excluding the US and the
company agreed to provide certain
marketing services. The agreement contains
provisions under which the counterparty
may have the right to terminate the
agreement on a change of control of the
company.
The executive directors’ service
contracts each contain a provision to the
effect that if the contract is terminated by
the company within one year after a change
of control of the company, the company will
pay to the director as liquidated damages
an amount equivalent to one year’s gross
basic salary and other contractual benefits
less the period of any notice given by the
company to the director.
The rules of the company’s employee
share schemes set out the consequences
of a change of control of the company on
participants’ rights under the schemes.
Generally such rights will vest and become
exercisable on a change of control subject
to the satisfaction of relevant performance
conditions.
During the year ended 31st March
2012 and from that date up to the date of
publication of this annual report there were
no other agreements between the company
or any subsidiary and its or their directors or
employees providing for compensation for
loss of office or employment (whether
through resignation, purported redundancy
or otherwise) that occurs because of a
takeover bid.

Disabled Persons
A description of the company’s policy
applied during the year ended 31st March
2012 and from that date up to the date of
publication of this annual report relating to
the recruitment, employment and training
of disabled employees can be found on
page 81.
Employee Involvement
A description of the action taken by the
company during the year ended 31st March
2012 and from that date up to the date of
publication of this annual report relating to
employee involvement can be found on
pages 48 to 59.
Use of Financial Instruments
Information on the group’s financial risk
management objectives and policies and its
exposure to credit risk, liquidity risk, interest
rate risk and foreign currency risk can be
found on pages 155 to 160.
Branches
The company and its subsidiaries have
established branches in a number of
different countries in which they operate.
Policy on Payment of
Commercial Debts
The group’s policy in relation to the payment
of all suppliers and persons who may
become suppliers is set out in its Group
Control Manual, which is distributed to all
group operations. The group’s policy is that
payment should be made within the credit
terms agreed with the supplier, subject to
the supplier having performed its obligations
under the relevant contract. It is not the
group’s policy to follow any other specific
code or standard on payment practice in
respect of its suppliers.
At 31st March 2012, the company’s
aggregate level of ‘creditor days’ amounted
to 5 days. Creditor days are calculated by
dividing the aggregate of the amounts which
were outstanding as trade payables at
31st March 2012 by the aggregate of the
amounts the company was invoiced by
suppliers during the year ended 31st March
2012 and multiplying by 365 to express the
ratio as a number of days.
Charitable Donations
During the year ended 31st March 2012 the
group donated £645,000 (2011 £517,000) to
charitable organisations worldwide, of which
£378,000 (2011 £320,000) was in the UK.
Further information on donations made by
the group worldwide are given on page 58.
Political Donations and
Expenditure
It is the policy of the group not to make
political donations or incur political
expenditure.
Under applicable UK legislation (the
2006 Act), political donations by the
company to any political parties, other
political organisations or independent
election candidates or the incurring by the
company of political expenditure are
prohibited unless authorised by shareholders
in advance. Under the legislation, the terms
political donation, political party, political
organisation and political expenditure are
capable of wide interpretation. Sponsorship,
subscriptions, payment of expenses, paid
leave for employees fulfilling public duties
and support for bodies representing the
business community in policy review or
reform may fall within these definitions.
During the year ended 31st March 2012:
• No political donations were made by
the company or its subsidiaries to any
EU political party, to any other EU
political organisation or to any EU
independent election candidate
(2011 £ nil);
• No EU political expenditure was
incurred by the company or its
subsidiaries (2011 £ nil); and
• No contributions were made by the
company or any subsidiary to any
non-EU political party within the
meaning of the 2006 Act (2011 £ nil).
The term ‘EU’ as used above applies
to parties, organisations and independent
election candidates that seek public office in
any EU Member State and to expenditure
incurred in their support or in relation to any
referendum held under the laws of an EU
Member State. ‘Non-EU political party’
means any political party which carries on,
or proposes to carry on, its activities wholly
outside EU Member States.
The company has no intention either
now or in the future of making any political
donation or incurring any political
expenditure in respect of any political party,
political organisation or independent election
candidate. However, to avoid inadvertently
contravening the 2006 Act, the board is
proposing at the 2012 Annual General
Meeting to renew the authority, first granted
by shareholders at the annual general
meeting in 2004, and renewed at each
subsequent annual general meeting, for the
company to make political donations and to
incur political expenditure. The proposed
authority will be subject to an overall
aggregate limit on donations and
expenditure of £50,000. As permitted under
the 2006 Act, the resolution will extend to
political donations made, or political
expenditure incurred, by any subsidiaries
of the company.
Financial Assistance Received
from Government
The group received no financial assistance
from government during the year.
Auditors and Disclosure of
Information
In accordance with section 489 of the 2006
Act, resolutions are to be proposed at the
2012 Annual General Meeting for the
reappointment of KPMG Audit Plc as auditor
of the company and to authorise the
directors to determine its remuneration.
So far as each person serving as a
director of the company at the date this
Report of the Directors was approved by the
board is aware, there is no relevant audit
information (that is information needed by
the auditor in connection with preparing its
report) of which the company’s auditor is
unaware. Each such director hereby
confirms that he or she has taken all the
steps that he or she ought to have taken as
a director in order to make himself or herself
aware of any relevant audit information and
to establish that the company’s auditor is
aware of that information.
Management Report
The Report of the Directors is the
“management report” for the purposes of
the Financial Services Authority’s Disclosure
and Transparency Rules (DTR 4.1.8R).
The Report of the Directors was approved
by the board on 6th June 2012 and is
signed on its behalf by:
Simon Farrant
Company Secretary
Other Statutory Information continued
Johnson Matthey Annual Report & Accounts 2012
Report of the Directors – Governance
Governance
104

105
Nomination Committee Report
Tim Stevenson
Chairman of the Nomination
Committee
Role
The terms of reference of the Nomination
Committee are summarised on page 89.
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.
Composition
The Nomination Committee comprises all
the independent non-executive directors
together with the group Chairman. The
quorum necessary for the transaction of
business is two, each of whom must be
an independent non-executive director.
Biographical details of the independent
non-executive directors and the group
Chairman are set out on page 83. Their
remuneration is set out on page 114.
The group Chairman acts as the
Chairman of the Nomination Committee,
although he does not chair the Committee
when it is dealing with the matter of
succession to the chairmanship of the
company. A non-executive director may not
chair the Committee when it is dealing with a
matter relating to that non-executive director.
Only members of the Committee have
the right to attend committee meetings.
However, the Chief Executive, the Group
Director, Human Resources and Environment,
Health and Safety, external advisers and
others may be invited to attend for all or part
of any meeting as and when appropriate.
The Company Secretary is secretary
to the Nomination Committee.
The Committee has the authority to
seek any information that it requires from
any officer or employee of the company or
its subsidiaries. In connection with its duties,
the Committee is also authorised by the
board to take such independent advice
(including legal or other professional advice,
at the company’s expense) as it considers
necessary. This includes requesting
information from, or commissioning
investigations by, external advisers.
Meeting Frequency
Meetings are held on an ad hoc basis,
usually immediately after a board meeting,
but on such other occasions as may be
needed.
“I am pleased to present
the Report of the
Nomination Committee
for 2012.”
Main Activities in the Year
The Nomination Committee met twice during the year ended 31st March 2012, on the following dates, and it conducted the following business:
Meeting date Main activities
10th May 2011 • Agreed to recommend to the board the appointment of Michael Roney as Senior Independent
Director and as Chairman of the Management Development and Remuneration Committee (MDRC)
with effect from the close of the annual general meeting in July 2011 following the retirements of
Alan Thomson and Robert Walvis respectively
29th March 2012 • Reviewed board size, structure and composition. The Chairman reported that Sir Thomas Harris
would be retiring from the board at the close of the 2012 Annual General Meeting
• Considered the process for the search for a new non-executive director, including the appointment
of external search consultants
• Discussed the selection criteria for the proposed appointment of a new non-executive director
Since 31st March 2012, the Nomination Committee met once, on the following date, and it conducted the following business:
Meeting date Main activities
31st May 2012 • Reviewed progress in respect of the search for a new non-executive director, including the
appointment of external search consultants
Boardroom Diversity
The search for board candidates is
conducted, and appointments made, on
merit, against objective selection criteria
having due regard, amongst other things,
to the benefits of diversity on the board,
including gender. Diversity is considered by
the Nomination Committee on behalf of the
board in considering board composition and
in its process for making board appointments,
including in setting selection criteria. This is
referred to further in the board’s statement
on board diversity dated 28th November
2011 which is published in the Investor
Relations / Corporate Governance section
of the company’s website and is set out on
page 92.
In respect of the proposed recruitment
of a new non-executive director, at its
meeting on 29th March 2012 the Committee
considered a specification which set out
certain essential characteristics for the role,
while stating the desirability of diversity.
On behalf of the Nomination Committee:
Tim Stevenson
Chairman of the Nomination Committee

Johnson Matthey Annual Report & Accounts 2012
Report of the Directors – Governance
Governance
106
Audit Committee Report
Alan Ferguson
Chairman of the Audit
Committee
Role
The terms of reference of the Audit
Committee, which were updated during the
financial year, are summarised on pages 89
and 90. 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.
Composition
The Audit Committee comprises all the
independent non-executive directors.
Biographical details of the independent
non-executive directors are set out on
page 83. Their remuneration is set out on
page 114.
Alan Ferguson replaced Alan Thomson
as Chairman of the Audit Committee in July
2011 on his retirement from the board.
Details of Alan Ferguson’s previous roles,
experience and qualifications are set out on
page 83.
The group Chairman, the Chief
Executive, the Group Finance Director, the
Head of Internal Audit and Risk and the
external auditor attend Audit Committee
meetings by invitation. The Committee also
meets separately with the Head of Internal
Audit and Risk and with the external auditor
without management being present.
The Company Secretary is secretary
to the Audit Committee.
“I am pleased to
present the Report
of the Audit Committee
for 2012.”
Main Activities in the Year
The Audit Committee met four times during the year ended 31st March 2012, on the following dates, and it conducted the following business:
Meeting date Main activities
26th May 2011 • Reviewed the group’s preliminary announcement, draft report and accounts for the financial year
• Reviewed papers on key accounting judgments, on credit control and credit risk and on litigation
affecting the group
• Considered reports from the external auditor on its audit and its review of the accounts including
accounting policies and areas of judgment, and its comments on risk management and control
matters
• Met with both internal audit and the external auditor without management being present
18th July 2011 • Reviewed the group’s interim management statement for the first quarter of the financial year
• Considered reports on internal controls from the internal auditors
• Reviewed the proposed external audit fees and audit scope for the financial year
• Assessed the performance of the external auditor. The review of the external auditor was used to
confirm the appropriateness of its reappointment and included assessment of its independence,
qualification, expertise and resources, and effectiveness of the audit process
• Recommended to the board the reappointment of KPMG Audit Plc as auditor
• Considered reports on IT strategy and risks from the Group Director, Information Technology
21st November 2011 • Reviewed the group’s half year results and announcement and the external auditor’s review
• Reviewed papers on key accounting judgments, on credit control and credit risk and on litigation
affecting the group
• Considered reports on the group’s treasury activities from the Group Treasurer
• Considered reports on internal controls from the internal auditors and group security
• Recommended to the board the approval of revised terms of reference for the Committee
• Assessed the performance of the internal auditors

107
Main Activities in the Year (continued)
Meeting date Main activities
31st January 2012 • Reviewed the group’s interim management statement for the third quarter of the financial year
• Reviewed the group’s risk register, reports on controls from the internal auditors and group security
and reports from management on the effectiveness of the group’s systems for internal financial
control and risk management
• Considered internal audit and security resource requirements and approved the internal audit and
group security plans for 2012/13
• Reviewed metal trading limits and controls
• Received an update from the external auditor on accounting, reporting and governance developments
• Reviewed non-audit services provided by the external auditor during the financial year to date and
the associated authorisation policy
• Reviewed the group’s whistleblowing procedures and the matters raised during the year
• Approved changes to the Group Control Manual, including changes to the group authority levels
• Received and considered a presentation on the risks facing the Process Technologies business from
its finance director
Since 31st March 2012, the Audit Committee has met once, on the following date, and it conducted the following business:
Meeting date Main activities
31st May 2012 • Reviewed the group’s preliminary announcement, draft report and accounts for the financial year and
the group’s assessment of going concern
• Considered the reappointment of the external auditor for the following year
• Considered reports on internal controls from the internal auditors and group security
• Met with both internal audit and the external auditor without management being present
Independence of External Auditor
Both the board and the external auditor
have for many years had safeguards in
place to avoid the possibility that the
auditor’s objectivity and independence could
be compromised. The issue of auditor
independence is taken very seriously and is
reviewed annually. This year some changes
have been made to the senior audit team.
A second partner has been introduced partly
to provide greater senior level coverage but
also to provide some continuity when the
signing partner rotates in 2013.
Our policy in respect of services
provided by the external auditor is as
follows:
• Audit related services – the external
auditor is invited to provide services
which, in its position as auditor, it
must or is best placed to undertake.
This includes formalities relating to
borrowings, shareholder and other
circulars, various other regulatory
reports and work in respect of
acquisitions and disposals
• Tax compliance and advice – the
auditor may provide such services
where it is best suited, but otherwise
such work is put out to tender
• Other services – these may not be
provided where precluded by ethical
standards or where we believe it would
compromise audit independence and
objectivity.
To the extent consistent with the above
policy, services likely to cost less than
£25,000 may be approved by the Group
Finance Director. Services above this
amount must be approved by the Chairman
of the Audit Committee, unless they are
likely to be in excess of £100,000, when they
must be approved by the Audit Committee.
The split between audit and non-audit
fees for the year ended 31st March 2012
and information on the nature of non-audit
fees appear in note 5 on the accounts.
Internal Audit
Internal audit independently reviews the
risks and control processes operated by
management. It carries out independent
audits in accordance with an internal audit
plan which is agreed with the Audit
Committee before the start of the financial
year. As part of this process the Committee
looks at the resources devoted to the
function to ensure they are adequate to
deliver the plan.
The plan provides a high degree of
financial and geographical coverage and
devotes significant effort to the review of the
risk management framework surrounding
the major business risks.
Internal audit reports include
recommendations to improve internal
controls together with agreed management
action plans to resolve the issues raised.
Internal audit follows up the implementation
of recommendations and reports progress
to senior management and the Audit
Committee.
The Audit Committee reviews the
findings of the internal audits completed
during the year.
The effectiveness of the internal audit
function is reviewed and discussed on an
annual basis.
On behalf of the Audit Committee:
Alan Ferguson
Chairman of the Audit Committee

Remuneration Report
Remuneration Report to Shareholders for the
year ended 31st March 2012
Johnson Matthey Annual Report & Accounts 2012
Report of the Directors – Governance
Governance
108
Michael Roney
Chairman of the Management
Development and
Remuneration Committee
Contents>
Terms of Reference and
Constitution of the
Management Development
and Remuneration Committee
(MDRC)
The Management Development and
Remuneration Committee is a committee
of the board and comprises all the
independent non-executive directors of the
company as set out on page 83 and the
group Chairman. The Chairman of the
Committee was Robert Walvis until his
retirement on 19th July 2011, after which
Michael Roney took over the role.
The Committee’s terms of reference
include determination on behalf of the board
of fair remuneration for the Chief Executive,
the other executive directors and the group
Chairman (in which case the group
Chairman does not participate).
Non-executive directors’ remuneration
is determined by the board, within the limits
prescribed by the company’s Articles of
Association. The remuneration consists of
fees, which are set following advice taken
from independent consultants and are
reviewed at regular intervals.
In addition, the Committee assists the
board in ensuring that the company has well
developed plans for management
succession, including the recruitment and
development of senior management, along
with appropriate remuneration policies to
ensure that management are retained and
motivated.
The Group Director, Human Resources
and Environment, Health and Safety
(HR and EHS) acts as secretary to the
Committee. The full terms of reference
of the Committee are available on the
company’s website at www.matthey.com
in the Investor Relations / Corporate
Governance section.
108 Introduction to the Remuneration Report
108 Terms of Reference and Constitution of the Management
Development and Remuneration Committee (MDRC)
109 Activities of the MDRC
109 Johnson Matthey – Executive Remuneration Policy
110 Executive Remuneration Practices and Rules 2011/12
112 Outcomes – Actual Remuneration for 2011/12
115 Other Historical and Statutory Information
Introduction to the Remuneration Report
The overriding responsibility of a remuneration committee is to create
the remuneration policies and practices that achieve the best value for
shareholders. Pay and incentives have to be set at the right level to
attract and retain good management and to fully incentivise outstanding
management performance, but at levels that are in line with the sector in
general, and that provide a fair return to shareholders.
This year, we recognise that the remuneration of senior executives is
under more scrutiny than ever before and we are mindful of the
principles of remuneration published by stakeholder representatives
such as the Association of British Insurers (ABI) and of the potential
revisions to governance outlined by the Department of Business,
Innovation and Skills. This report seeks to be open and transparent in
reporting on remuneration and on the basis for remuneration, both
historically and going forward.
The remuneration committee is also charged with ensuring that the
long term interests of the company and shareholders are taken fully into
account, both in remuneration structure and in ensuring that good
processes exist for management development and succession planning.
This is particularly important in a high technology company where R&D
investment is required many years before those ideas come to
commercial fruition. Therefore we aim to build remuneration policies and
structures that reward performance over the long term and that
encourage directors and employees to develop long term careers with
the company.
I believe that the consistent results over the last decade, the
consistency and success of a largely internally developed management
team and the very strong year we have experienced in 2011/12 indicate
that we have good policies and practices in place. However, we will
continue to review all aspects of remuneration, management
development and succession planning to ensure that shareholders’
interests continue to be fully represented.
Michael Roney

109
Activities of the MDRC
The Committee meets at least three times per year. The principal activities are set out in the terms of reference and the timetable for specific
reviews and approval processes is set out below. In 2011/12 the committee met on four occasions.
Table of Remuneration Committee Activities
Meeting Annual agenda items Other agenda items
May Review of CEC and senior managers’ salary increases
Review of executive directors’ salary and bonus
Review of pay within the group
Approval of the Remuneration Report
May or July Approval of executive directors’ salary and bonus Chairman’s fees
Approval of LTIP allocation (every three years)
Approval of LTIP vesting
Review of other senior managers’ salary increases and bonus payments
November Management development and succession planning
Review of the share incentive plan
Update on remuneration issues
Review of remuneration policy
March Approval of bonus scheme rules Major review of structure
Review of the share incentive plan of executive remuneration
(every three years)
Johnson Matthey – Executive
Remuneration Policy
Key Goals of Policy and Balance
Between Fixed and Variable
Remuneration
The key goal of the remuneration policy
remains to obtain the best value for
shareholders. This requires that the pay and
benefits structure is competitive within the
sector, whilst simultaneously providing
stretching targets that require significant
outperformance to maximise incentive
payments.
Basic salaries are the primary element
of remuneration and the general policy is
to set basic salaries at the level required
to retain and motivate, taking into account
individual performance, the complexity
and scale of the director’s duties, length
of time in post and taking due cognisance
of market levels in the appropriate sector.
The Committee recognises that there is a
competitive market for successful executives
and therefore benchmark data are regarded
as relevant background information.
However, it is not the policy of the
Committee to set salaries directly in line
with that data, or in line with benchmarks
mathematically derived from that data.
With regard to variable pay, the
Committee believes that the provision of
appropriate rewards for superior performance
is vital to the continued growth of the business.
Further incentives in variable pay are
therefore to be structured in a way that
provides the incentives for effective short
and long term management and creates
the opportunity for enhanced remuneration
but only for outstanding performance.
The details of the structures devised for
short term bonuses and long term
incentives are described in the subsequent
section of this Remuneration Report.
The Committee further considers
the balance between fixed elements of
remuneration, such as basic salaries, and
the performance related aspects of the
remuneration package and seeks to ensure
that any earnings beyond basic salaries are
fully reflected in increased shareholder value
through higher profit and earnings per share.
It is also an element of the policy that
executive directors are encouraged to build
up over time, and hold, a shareholding in the
company equal to at least their basic salary
with a view to ensuring that their interests
remain fully aligned with those of the
shareholders. Details of directors’
shareholdings are set out on page 116.
Global Pay and Employment
Policies Across the Group
The remuneration policy of the group
remains consistent in all countries and at all
levels of the company with the overriding
consideration being to pay competitive
salaries in line with the appropriate country
and sector and to provide opportunities to
increase earnings to higher levels through
superior performance. Almost all Johnson
Matthey employees are able to earn
bonuses based on business performance
and around 900 employees are able to earn
bonuses based on individual, team and
business performance. Around 900
employees globally are eligible to participate
in the Johnson Matthey Long Term Incentive
Plan (LTIP).
Executive Pay in the Context of
General Earnings Across the
Group
In setting executive directors’ basic salaries,
annual bonus awards and LTIP allocations,
the Committee is made aware of
comparative data relating to the pay and
benefits of other group employees.
International data provided by the Hay
Group is also utilised in considering and
determining local settlements.
Policy with Regard to
Remuneration Advisers
In determining the remuneration structure,
the Committee appoints and receives advice
from independent remuneration consultants
on the pay and incentive arrangements
prevailing in comparably sized industrial
companies in each country in which
Johnson Matthey has operations. During the
year, such advice was received from the Hay
Group, which also provided advice on job
evaluation, and PricewaterhouseCoopers LLP.
PricewaterhouseCoopers LLP also provided
expatriate tax advice and other tax advice,
tax audit work, completion of overseas tax
returns, advice on set up of new overseas
operations, some overseas payroll services
and a review of some financial controls.
A statement regarding the use of
remuneration consultants for the year ended
31st March 2012 is available on the
company’s website at www.matthey.com in
the Investor Relations / Corporate
Governance section.

The Committee also receives
recommendations from the Chief Executive
on the remuneration of those reporting to
him as well as advice from the Group
Director, HR and EHS.
This is the general remuneration policy
of the Committee and the details of the
exact remuneration structure are given in the
subsequent section of this report.
Executive Remuneration
Practices and Rules 2011/12
In 2010/11 a full review of remuneration
was carried out, followed by a shareholder
consultation in early 2011. The new
practices and rules were described in last
year’s annual report and are now used in the
calculation of variable pay and bonuses for
the executive directors.
Remuneration Basis with Effect
from 1st April 2011: the Rules as
they Stand
Executive directors’ remuneration consists
of three principal elements: these being
basic pay, annual bonus and a long term
incentive plan. The details of these are
set out below. Information on pension
arrangements for the executive directors
is also included in this section.
Basic Salary
The general policy regarding basic salaries
has been set out on page 109, indicating
that there are a number of determinants in
arriving at the basic salary award. These
key determinants are described in more
detail below.
The first determinant is the
performance of the individual executive.
Performance is considered against a broad
set of parameters including financial,
environmental, social and governance
issues.
The second factor taken into account is
the length of time that the executive director
has been in post. For example, where
promotion has taken place, the salary may
initially be set at a lower level than the
outgoing director. This can then give rise to
higher than normal salary increases while
the director gathers experience and moves
towards the job norm.
The third factor is a judgment as to
whether the level of basic pay remains
competitive and appropriate in the relevant
comparator group. For the purposes of
benchmarking, the remuneration comparator
used by the Committee during 2011/12 for
executive directors was drawn from FTSE
100 and 250 industrial and service
companies (excluding the oil and financial
sectors) with market capitalisation of around
£4.8 billion and with over 40% of revenue
coming from overseas. Further independent
benchmark data was sourced from the Hay
Group. Benchmark data are regarded as
relevant background information for the
Committee, but it is not its policy to set
salaries directly in line with that data, or with
benchmarks mathematically derived from
that data. Basic salary is normally reviewed
on 1st August each year.
LTIP
The LTIP is designed to incentivise above
average performance and growth over the
longer term. Shares allocated under the
terms of the LTIP (which also applies to the
group’s 900 senior and middle managers)
are released on the third anniversary of the
allocation date with the release being
subject to targets based on compound
annual growth in the company’s earnings
per share (EPS). Current rules require that to
achieve the maximum release of allocated
shares, a compound annual growth in
underlying EPS of 15% must be achieved
over the three year period. The Committee
strongly believes that EPS remains the best
overall measure of the performance of the
group across all strategic goals. The
Committee has considered setting broader
targets for LTIP in areas such as
sustainability and new product development,
but is satisfied that the full total of successful
and long term focused company activities
are best encapsulated in the simple and
transparent measure of compound annual
growth in EPS over a longer period.
Prior to 2011, the bases for share
allocations were 150% of basic annual
salary for the Chief Executive and 120% for
executive directors. In 2011, in accordance
with the review published in the 2011 annual
report, share allocations of 175% of basic
annual salary for the Chief Executive and
140% of annual salary for executive
directors were made. These allocations
remain within the LTIP rules, as approved by
shareholders at the 2007 Annual General
Meeting, which allow for share allocations of
up to a maximum of 200% of basic annual
salary each year, allowing the Committee to
take account of evolution of market practice
if required.
The minimum release, of 15% of the
allocated shares, requires underlying EPS
growth of 6% compound per annum over
the three year period. For the maximum
release of 100% of the allocation, underlying
EPS must have grown by at least 15%
compound per annum over the three year
performance period. The number of
allocated shares released will vary on a
straight line basis between these points.
There is no retesting of the performance
target and so allocations will lapse if
underlying EPS growth is less than 6%
compound per annum over the three year
performance period.
In 2009, following consultation with
major shareholders, the Committee
approved an adjustment to the performance
targets for one year only to reflect the
market conditions prevailing at the time of
allocation. For the 2009 allocation only, the
minimum release, of 15% of the allocation,
requires underlying EPS growth of 3%
compound per annum over the three year
period, with no retesting of the performance
target. For the maximum release of 100%
of the allocation, underlying EPS must have
grown by at least 10% compound per
annum over the three year performance
period. As a result of this adjustment, the
level of award was reduced to 120% of
basic annual salary for the Chief Executive
and 100% for executive directors for that
year. Also in 2009, there was a one-off
allocation of 170% of basic salary to the
then newly appointed Group Finance
Director to ensure close alignment of his
objectives with those of shareholders.
Although growth in underlying EPS is
the primary financial measure, it is also a
key objective of the company to achieve
earnings growth only in the context of a
good performance on return on invested
capital (ROIC). Accordingly, the Committee
is required to make an assessment of the
group’s ROIC over the performance period
to ensure underlying EPS growth has been
achieved with ROIC in line with the group’s
planned expectations. The Committee may
scale back vesting to the extent that ROIC
has not developed appropriately.
Annual Bonus
The annual bonus is complementary to the
longer term LTIP award and provides a
strong incentive for a short term delivery of
budget in the relevant year. Whilst the LTIP
target encourages business managers and
the executive directors to set ambitious
three year targets, the annual bonus allows
the board to ensure that those plans are
properly reflected in stretching but
achievable annual budgets. The annual
bonus is then based strictly on performance
against budget, requiring that the group’s
budgeted underlying profit before tax
(PBT) is exceeded by 10% to release the
maximum payment.
The maximum bonus is set as a
percentage of basic salary under the
terms of the company’s Executive
Compensation Plan. As with the LTIP, this
plan applies not only to the executive
directors, but to around 200 of the group’s
most senior executives.
Remuneration Report continued
Johnson Matthey Annual Report & Accounts 2012
Report of the Directors – Governance
Governance
110

111
An annual bonus payment of 75% of basic
salary (prevailing at 31st March) is paid to
the Chief Executive and 62.5% of basic
salary is paid to executive directors if the
group meets the annual budget. This bonus
may rise on a straight line basis to a
maximum 150% of basic salary for the Chief
Executive and 125% for executive directors
if 110% of budgeted underlying PBT is
achieved. Underlying PBT must reach 95%
of budget for a minimum bonus of 15% of
salary to be payable.
For the Chief Executive, 33.3% of the
bonus payable is awarded as shares and
deferred for a period of three years. For
other executive directors, 20% of the bonus
payable is awarded as shares and deferred
for three years. The Committee is entitled to
claw back the deferred element in cases of
misstatement or misconduct or other
relevant reason as determined by the
Committee.
The Committee retains discretion in
awarding annual bonuses and seeks to
ensure that the incentive structure for senior
management does not raise environmental,
social and governance risks by inadvertently
motivating irresponsible behaviour. The
Committee is fully prepared to utilise this
discretion where management has failed to
properly address such risks.
Other Benefits
The other benefits available to the executive
directors are private medical insurance, a
company car and membership of the
group’s employee share incentive plans
which are open to all employees in the
countries in which the group operates
such plans.
Service Contracts
The executive directors are employed on
contracts subject to one year’s notice at any
time. On early termination of their contracts
the directors would normally be entitled
to 12 months’ salary and benefits. The
contracts of service of the executive directors
and the terms and conditions of appointment
of the non-executive directors are available
for inspection at the company’s registered
office during normal business hours and at
the forthcoming annual general meeting.
Pensions – General Description of
Arrangements
The company provides executive directors
with membership of its UK HM Revenue &
Customs registered occupational pension
scheme – the Johnson Matthey Employees
Pension Scheme (JMEPS). The benefits
provided to executive directors through
JMEPS are the same as for all other UK
employees, namely a defined benefit
retirement pension, dependents’ and life
assurance benefits plus a top-up defined
contribution account. There have been no
significant changes to the JMEPS rules
during 2011/12.
The pension earned in respect of
service up to 31st March 2010 is based on
a member’s final salary at the point of
retirement, or earlier date of withdrawal from
employment. Pension earned in respect of
service from 1st April 2010 is based on the
member’s career average revalued earnings.
Members are not required to pay
contributions to receive these defined
benefits. However members may pay
voluntary contributions to a supplemental
defined contribution account and the
company will match any contribution made
up to 3% of pensionable pay each year.
Under the provisions of the Finance Act
2004 benefits from a registered pension
scheme that exceed the Annual Allowance
or Lifetime Allowance will be subject to a tax
charge. The Annual Allowance and Lifetime
Allowance were reduced to £50,000 and
£1.5 million respectively with effect from
6th April 2011. On reaching these thresholds
members, including executive directors,
are given the option to limit their benefits
in JMEPS and receive a cash supplement
in lieu of the pension benefit forgone, or to
continue accruing benefits in the scheme
and pay the tax charge. Any tax liability
due is the responsibility of the individual not
the company.
Neil Carson and Bill Sandford withdrew
from pensionable service on 31st March
2006 and Robert MacLeod withdrew on
31st March 2011. No pensionable service
in JMEPS has been accrued by these
directors since then and all have received a
cash supplement of 25% of basic salary in
lieu of the pension benefit forgone. The
increase in accrued pension for Messrs
Carson and Sandford in the table on page
115 is attributable solely to the effect of the
increase in their basic salary in 2011/12 on
their pension earned before 1st April 2006.
During the year Larry Pentz accrued
pension in JMEPS up to the Annual
Allowance and elected to cease pension
accrual for the remainder of the year in
return for a cash supplement of 21% of
basic salary.
The supplemental payments received
by all executive directors are reflected in the
table on page 114.
Annual Bonus Rules
Bonus
awarded
Bonus at 110%
awarded Bonus of budget
at threshold awarded (maximum
(95% of budget) at target award) % of awarded
(% of salary) (% of salary) (% of salary) bonus deferred
Chief Executive 15% 75% 150% 33.3%
Other executive directors 15% 62.5% 125% 20%
Setting the Annual Bonus Target
In order for the annual bonus to provide a strong short term performance incentive, it is key that the budgeted profitability is set at an
achievable but demanding target. The board is responsible for agreeing the targeted performance and takes into account the detailed
business climate for each operating division of the group. Commercial sensitivity prevents the advance publication of targets, but further
information regarding historical performance is available in the following table.
Retrospective Data on Annual Budget Targets
Chief Executive
Budgeted Actual Executive’s directors’ Vara Actual
underlying PBT underlying PBT % of bonus bonus consensus* underlying
Year (£ million) (£ million) budget (% of salary) (% of salary) (£ million) PBT growth
2011/12 406.0 426.0 104.9% 111.75% 93.13% 382 23%
* The Vara consensus referred to is the published data regarding industry analysts’ performance expectations for Johnson Matthey, as expressed at the start of the budget year in question.
For example, the consensus for 2011/12 is that published in March 2011.

Outcomes – Actual Remuneration for 2011/12
This section provides details of the actual payments and awards to directors in 2011/12. Full numerical details are provided in the tables on
pages 113 to 117.
In order to fully illustrate the relationships between actual payments, on target payments and stretch (maximum) payments, graphs of the
relevant data are shown below for each of the four executive directors. This does not include share option exercises from awards made in
prior years. See pages 116 and 117 for further details.
Remuneration Report continued
Johnson Matthey Annual Report & Accounts 2012
Report of the Directors – Governance
Governance
112
0 500 1,000 1,500 2,000 2,500 3,000 3,500
Stretch
£ thousands
On target
Actual
Basic salary Benefits Payment in lieu of pension Bonus (cash) Bonus (deferred to 2015) LTIP paid out
> Neil Carson – overall remuneration
0 500 1,000 1,500 2,000 2,500 3,000 3,500
Stretch
£ thousands
On target
Actual
> Robert MacLeod – overall remuneration
0 500 1,000 1,500 2,000 2,500 3,000 3,500
Stretch
£ thousands
On target
Actual
> Larry Pentz – overall remuneration
0 500 1,000 1,500 2,000 2,500 3,000 3,500
Stretch
£ thousands
On target
Actual
> Bill Sandford – overall remuneration
Basic Salary 2011/12
The changes in basic salary for each of the directors are illustrated in the table below.
Basic salary at Basic salary at
1st August 2010 1st August 2011 Increase
Name (£) (£) (%)
Neil Carson 750,000 776,250 3.5
Robert MacLeod 406,600 421,000 3.5
Larry Pentz 390,000 403,650 3.5
Bill Sandford 345,000 357,100 3.5
Comparison to Other Pay Awards in Johnson Matthey
Pay awards throughout Johnson Matthey’s global operations have generally ranged between 0% and 10% in the last year, depending on local
pay conditions and on local business and economic conditions. Pay awards in the UK have generally been around the 3% level with some
local variations dependent on business conditions.

113
LTIP Vesting in 2011/12 and Historical Information
The 2008 share allocation vested in July 2011. The performance condition was met to the extent that 52.42% of the allocated shares
were released.
Details of LTIP awards, performance and vesting details are provided below.
Compound
annual growth in Value at time
Year of % salary Shares underlying EPS Shares of release
Year of allocation vesting awarded awarded in the period released (£)
Neil Carson
2007 2010 150 56,704 1.68% 0 0
2008 2011 150 56,239 9.96% 29,480 614,233
2009 2012 120 71,611 19.60% 71,611 Vesting July 2012
2010 2013 150 72,393 n/a
2011 2014 175 69,096 n/a
Robert MacLeod
2007 2010 n/a 0 1.68% 0 0
2008 2011 n/a 0 9.96% 0 0
2009 2012 170* 55,072 19.60% 55,072 Vesting July 2012
2010 2013 120 31,397 n/a
2011 2014 140 29,979 n/a
Larry Pentz
2007 2010 120 22,327 1.68% 0 0
2008 2011 120 21,853 9.96% 11,455 238,672
2009 2012 100 31,116 19.60% 31,116 Vesting July 2012
2010 2013 120 30,115 n/a
2011 2014 140 28,744 n/a
Bill Sandford
2007 2010 120 15,268 1.68% 0 0
2008 2011 120 15,318 9.96% 8,029 167,289
2009 2012 100 25,575 19.60% 25,575 Vesting July 2012
2010 2013 120 26,640 n/a
2011 2014 140 25,429 n/a
* See page 110.

Johnson Matthey Annual Report & Accounts 2012
Report of the Directors – Governance
Governance
114
Summary Statement of Directors’ Emoluments 2011/12
Total
Payment Annual Annual Total prior year
Date of in lieu of cash deferred excluding excluding
service Date of Basic salary pension(1) bonus bonus(2) Benefits pension pension
agreement appointment £’000 £’000 £’000 £’000 £’000 £’000 £’000
Executive
Neil Carson (3) 1.8.99 1.8.99 768 192 578 289 22 1,849 1,687
Robert MacLeod (4) 3.2.09 22.6.09 416 104 314 78 19 931 822
Larry Pentz (5) 1.1.06 1.8.03 399 57 301 75 59 891 810
Bill Sandford 21.7.09 21.7.09 353 88 266 67 17 791 774
Total 1,936 441 1,459 509 117 4,462 4,093
Total
Total prior year
Date of excluding excluding
letter of Date of Fees pension pension
appointment appointment £’000 £’000 £’000
Non-executive (6)
Sir John Banham (Chairman) (7) 10.12.05 1.1.06 91 91 293
Alan Ferguson 10.1.11 13.1.11 57(9) 57 11
Sir Thomas Harris 22.1.09 1.4.09 50 50 50
Michael Roney 29.3.07 1.6.07 56(10) 56 50
Tim Stevenson (Chairman Designate) (8) 10.1.11 29.3.11 225 225 –
Dorothy Thompson 22.5.07 1.9.07 50 50 50
Alan Thomson (7) 1.8.02 24.9.02 18(9) 18 60
Robert Walvis (7) 1.8.02 24.9.02 18(10) 18 58
Total 565 565 572
The aggregate amount of remuneration receivable by directors and non-executive directors totalled £5,027,000 (2011 £4,665,000).
Notes
(1) Neil Carson, Bill Sandford and Robert MacLeod no longer accrue pensionable service in the Johnson Matthey Employees Pension Scheme. Messrs Carson and
Sandford ceased to accrue with effect from 31st March 2006 and Mr MacLeod ceased to accrue with effect from 31st March 2011. They now receive an annual cash
payment in lieu of pension equal to 25% of basic salary. Larry Pentz accrued pension during the year up to the Annual Allowance and received a cash supplement of
21% of basic salary thereafter. These payments are taxable under the PAYE system.
(2) This is the element of the annual bonus which is payable as shares but is deferred for three years.
(3) Neil Carson is a non-executive director of AMEC plc. His fees for the year in respect of this non-executive directorship were £54,375. This amount is excluded from the
table above and retained by him.
(4) Robert MacLeod is a non-executive director of Aggreko plc. His fees for the year in respect of this non-executive directorship were £61,750. This amount is excluded
from the table above and retained by him.
(5) Larry Pentz is a non-executive director of Victrex plc. His fees for the year in respect of this non-executive directorship were £48,000. This amount is excluded from the
table above and retained by him.
(6) Non-executive fees (other than for the Chairman) were reviewed on 1st April 2010 for the period from 1st April 2010 to 31st March 2013. The fees are £50,000 per
annum, with the fee for chairmanship of the Audit Committee being £10,000 per annum and the Management Development and Remuneration Committee being £8,000
per annum. Sir John Banham’s fees were reviewed on 1st August 2010 for the period 1st August 2010 to 19th July 2011 (the date of his retirement). The Chairman and
the non-executive directors do not receive any pension benefits, LTIP allocations, share option grants or bonus payments.
(7) Sir John Banham, Alan Thomson and Robert Walvis retired on 19th July 2011.
(8) Tim Stevenson was Chairman Designate until Sir John Banham’s retirement on 19th July 2011, after which he became Chairman.
(9) Includes £10,000 per annum for chairmanship of the Audit Committee. Alan Ferguson was appointed Chairman of the Audit Committee on 19th July 2011.
Alan Thomson previously carried out this role and retired on 19th July 2011.
(10) Includes £8,000 per annum for chairmanship of the Management Development and Remuneration Committee. Michael Roney was appointed Chairman of the
Management Development and Remuneration Committee on 19th July 2011. Robert Walvis previously carried out this role and retired on 19th July 2011.
Remuneration Report continued

115
Other Historical and Statutory Information
Johnson Matthey and FTSE 100 Total Shareholder Return Rebased to 100
The following graph charts total cumulative shareholder return of the company for the five year period from 31st March 2007 to 31st March
2012 against the FTSE 100 as the most appropriate comparator group, rebased to 100 at 1st April 2007. The graph shows significant
outperformance by Johnson Matthey against the FTSE 100 group over the five year period.
Pension Benefits
Disclosure of directors’ pension benefits has been made under the requirements of the Financial Services Authority’s Listing Rules and in
accordance with the Companies Act 2006. The information below sets out the disclosures under the two sets of requirements.
Total Total Change in Change in
accrued accrued accrued Transfer Transfer transfer
pension as at pension as at pension value as at value as at value less
Age as at 31st March 31st March after allowing 31st March 31st March Directors’ directors’
31st March 2011(1) 2012(1) for inflation 2011(2) 2012(2) contributions(3) contributions
2012 £’000pa £’000 pa £’000 pa £’000 £’000 £’000 £’000
Neil Carson 54 353 365 (6) 6,402 7,655 – 1,253
Robert MacLeod 47 9 9 – 81 106 – 25
Larry Pentz (4) 56 111 116 2 1,371 1,702 – 331
Bill Sandford 58 179 185 (3) 3,779 4,390 – 611
Notes
(1) The total accrued pension represents the pension which would be paid annually on normal retirement, based on pensionable service to 31st March 2012 (except in the
case of Neil Carson and Bill Sandford whose pensionable service ceased on 31st March 2006 and Robert MacLeod whose pensionable service ceased on 31st March
2011). The element of the pension earned before 31st March 2010 would be subject to an actuarial reduction if retirement precedes age 60, and the element of the
pension earned from 1st April 2010 will be reduced if taken before age 65.
(2) The transfer values have been calculated in accordance with GN11 issued by the actuarial profession. For UK based pension benefits the assumptions used are the
same as those in the calculation of cash equivalent transfers from JMEPS. For US based pension benefits the assumptions used are the same as those used for
accounting disclosure. No allowance has been made in the transfer values for any discretionary benefits that have been or may be awarded.
(3) Members are not required to pay contributions towards their pension benefits. Any voluntary contributions paid by executive directors are not shown except where these
are matched by the company. Larry Pentz paid voluntary contributions into the supplemental defined contribution account amounting to 3% of his April 2011 salary, this
contribution was matched by the company.
(4) Larry Pentz is a US citizen but became a member of JMEPS on 1st January 2006. Prior to that he was a member of the Johnson Matthey Inc. Salaried Employees
Pension Plan (a non-contributory defined benefit arrangement) and also of a US savings plan (401k). He also has benefits in a Supplemental Executive Retirement Plan
(SERP). The pension values reported above are the aggregate for his separate membership of the UK and US pension schemes and the SERP. The total accrued
pension as 31st March 2011 has been restated to include all of his pension benefits. US entitlements have been converted to sterling by reference to exchange rates on
31st March 2011 and 31st March 2012. Mr Pentz’s US pension was fixed on 31st December 2005. The sterling equivalent of it has fluctuated over the year as a result
of exchange rate movements. Of the change in the accrued benefit and the transfer value £300 and £3,020, respectively, is due to currency movements.
Johnson Matthey FTSE 100
40
180
60
80
100
120
140
160
March 2007 March 2008 March 2009 March 2010 March 2011 March 2012
As at 31st March 2012, Johnson Matthey was ranked 60th by market capitalisation in the FTSE 100.

116
Remuneration Report continued
Johnson Matthey Annual Report & Accounts 2012
Report of the Directors – Governance
Governance
Directors’ Interests
The interests (in respect of which transactions are notifiable to the company under the Financial Services Authority’s Disclosure and
Transparency Rules) of the directors as at 31st March 2012 in the shares of the company were:
1. Ordinary Shares
31st March 31st March
2012 2011
Tim Stevenson 5,500 5,500*
Neil Carson 188,804 174,374
Alan Ferguson 1,000 1,000
Sir Thomas Harris 1,807 1,807
Robert MacLeod 3,604 3,368
Larry Pentz 25,789 25,383
Michael Roney 3,000 3,000
Bill Sandford 9,165 5,091
Dorothy Thompson 9,721 9,721
* Shares acquired on 3rd March 2011, not disclosed in the 2011 annual report.
All of the above interests were beneficial. The executive directors are also deemed to be interested in shares held by an employee share
ownership trust (see note 30 on page 162).
Directors’ interests as at 31st May 2012 were unchanged from those listed above, other than that the trustees of the Johnson Matthey
Share Incentive Plan have purchased on behalf of Neil Carson, Robert MacLeod, Larry Pentz and Bill Sandford a further 33 shares each.
2. Share Options
As at 31st March 2012, individual holdings by the directors under the company’s executive share option schemes were as set out below.
Options are not granted to non-executive directors.
Total
Ordinary Exercise Date from number of
Date of shares price which Expiry ordinary shares
grant under option (pence) exercisable date under option
Neil Carson 17.7.03 33,407 898 17.7.06 17.7.13
26.7.06 59,481 1,282 26.7.09 26.7.16 92,888
(2011 218,282)
Larry Pentz 17.7.03 17,185 898 17.7.06 17.7.13
26.7.06 28,765 1,282 26.7.09 26.7.16 45,950
(2011 101,530)
Bill Sandford 26.7.06 3,774 1,282 26.7.09 26.7.16 3,774
(2011 18,868)
Share Options
The LTIP is now the company’s single
means for the provision of long term awards
and from 2007 replaced the granting of
share options under the Johnson Matthey
2001 Share Option Scheme (the 2001
Scheme). From 2001 to 2006 options were
granted each year under the 2001 Scheme.
There have been no option grants since
2006. Options were granted at the market
value of the company’s shares at the time of
grant and were subject to performance
targets over a three year period. Options
may be exercised upon satisfaction of the
relevant performance targets. Approximately
800 employees were granted options under
the 2001 Scheme each year.
Options granted from 2004 to 2006
Grants made in 2004, 2005 and 2006 were
subject to a three year performance target
of EPS growth of UK RPI plus 3% per
annum. If the performance target was not
met at the end of the three year
performance period, the options lapsed as
there was no retesting of the performance
target. In addition, to reduce the cost
calculated under the International Financial
Reporting Standard 2 – ‘Share-based
Payment’, gains made on the exercise of
options are capped at 100% of the grant price.
The Committee had the discretion to
award grants greater than 100% of basic
annual salary. Grants which were made
above this threshold were, however, subject
to increasingly stretching performance
targets. Grants between 100% and 125% of
basic annual salary were subject to EPS
growth of UK RPI plus 4% per annum and
grants between 125% and 150% of basic
annual salary were subject to EPS growth of
UK RPI plus 5% per annum. The executive
directors were granted options equal to
150% of basic annual salary. All the options,
other than those granted in 2006 which
were subject to EPS growth of UK RPI plus
5% per annum, have met their performance
targets. The 2006 options which did not
meet their performance targets have lapsed.
Options granted prior to 2004
Prior to 2004, options granted to the
executive directors under the 2001 Scheme
were up to a maximum of 100% of basic
annual salary each year. Such options were
subject to a performance target of EPS
growth of UK RPI plus 4% per annum over
any three consecutive years during the life
of the option. The performance target was
subject to annual retesting until the lapse
of the options on the tenth anniversary of
grant. All of these options have met their
performance targets.

117
Between 1st April 2011 and 31st March 2012 the following options were exercised by directors:
Exercise Market price
Date of Date of Options price on exercise
grant exercise exercised (pence) (pence)
Neil Carson 18.7.01 3.6.11 2,770 1,083 2,038
18.7.01 3.6.11 16,621 1,083 2,034
20.7.05 1.2.12 77,102 1,070 2,140
17.7.02 14.2.12 28,901 865 2,281
Larry Pentz 17.7.02 11.1.12 17,730 865 1,998
20.7.05 1.2.12 37,850 1,070 2,140
Bill Sandford 26.7.06 1.12.11 15,094 1,282 1,874
Gains made on exercise of options by the directors during the year totalled £2,113,928 (2011 £88,138).
The closing market price of the company’s shares at 30th March 2012 was 2,359 pence. The highest and lowest closing market prices
during the year ended 31st March 2012 were 2,403 pence and 1,523 pence respectively.
3. LTIP Allocations
Number of allocated shares:
Market price
As at Allocations at date of Released Lapsed As at
31st March during allocation during during 31st March
2011 the year (pence) the year the year 2012
Neil Carson 200,243 69,096 1,966 29,480 26,759 213,100
Robert MacLeod 86,469 29,979 1,966 – – 116,448
Larry Pentz 83,084 28,744 1,966 11,455 10,398 89,975
Bill Sandford 67,533 25,429 1,966 8,029 7,289 77,644
On 25th July 2011 shares allocated in 2008 under the LTIP were released to participants. The compound annual growth in the
company’s underlying EPS over the three year performance period, commencing in the year of allocation, resulted in a release of 52.42%
of the allocated shares and the following gains:
Number of Share price
shares when released Gain
released (pence) (£)
Neil Carson 29,480 2,084 614,233
Larry Pentz 11,455 2,084 238,672
Bill Sandford 8,029 2,084 167,289
The Remuneration Report was approved by the Board of Directors on 6th June 2012 and signed on its behalf by:
Michael Roney
Chairman of the Management Development and Remuneration Committee

The details
behind our
financial
performance
Johnson Matthey Annual Report & Accounts 2012
Accounts
118

Contents
120 Responsibility of Directors
121 Independent Auditor’s Report
122 Consolidated Income Statement
122 Consolidated Statement of
Total Comprehensive Income
123 Consolidated and Parent Company
Balance Sheets
124 Consolidated and Parent Company
Cash Flow Statements
125 Consolidated Statement of Changes
in Equity
126 Parent Company Statement of Changes
in Equity
127 Accounting Policies
131 Notes on the Accounts

Accounts
This section includes the consolidated and parent company accounts and related notes, as well as the statement
on responsibility of directors and the independent auditor’s report on the financial accounts.
. Colour Technologies’ products include black obscuration
enamels which are printed onto car windscreens.
. Screen printing facilities in the technology
centre at Maastricht.
. Manufacturing black obscuration enamels
at the Maastricht site.
> Customer Focus at
Colour Technologies
Johnson Matthey’s Colour Technologies
business manufactures high technology
functional and decorative products for the
glass and ceramics industries. Many are used
by our customers in highly demanding
applications, such as automotive and
aerospace, and we align our research and
development efforts with our customers’
processes to ensure we meet their exacting
performance requirements.
Expertise in precious metals, materials
science and surface chemistry underpins new
product development activities which are
centred at the business’ global technology
centre, located at its headquarters in
Maastricht, the Netherlands. The facility is
equipped with the latest materials
characterisation techniques and has a variety
of lab scale process equipment, including
furnaces and screen printers. This capability
enables us to closely replicate our customers’
manufacturing processes and allows our
scientists to optimise the performance of new
products under realistic plant conditions
throughout the R&D process.
Delivering Value

120
Statement of Directors’ Responsibilities in Respect of the Annual Report and Accounts
The directors are responsible for preparing the annual report and the group and parent company accounts in accordance with applicable law
and regulations.
Company law requires the directors to prepare group and parent company accounts for each financial year. Under that law they are required
to prepare the group accounts in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union (EU)
and applicable law and have elected to prepare the parent company accounts on the same basis.
Under company law the directors must not approve the accounts unless they are satisfied that they give a true and fair view of the state of
affairs of the group and parent company and of their profit or loss for that period. In preparing each of the group and parent company
accounts, the directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgments and estimates that are reasonable and prudent;
• state whether they have been prepared in accordance with IFRS as adopted by the EU; and
• prepare the accounts on the going concern basis unless it is inappropriate to presume that the group and the parent company will
continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the parent company’s
transactions and disclose with reasonable accuracy at any time the financial position of the parent company and enable them to ensure that
its accounts comply with the Companies Act 2006. They have general responsibility for taking such steps as are reasonably open to them to
safeguard the assets of the group and to prevent and detect fraud and other irregularities.
Under applicable law and regulations the directors are also responsible for preparing a directors’ report, directors’ Remuneration Report and
Corporate Governance statement that comply with that law and those regulations.
The directors are responsible for the maintenance and integrity of the corporate and financial information included on the company’s website.
Legislation in the UK governing the preparation and dissemination of accounts may differ from legislation in other jurisdictions.
Responsibility Statement of the Directors in Respect of the Annual Report and Accounts
Each of the directors as at the date of the Annual Report and Accounts, whose names and functions are set out on page 83, states that to
the best of his or her knowledge:
• the group and parent company accounts, prepared in accordance with the applicable set of accounting standards, give a true and fair
view of the assets, liabilities, financial position and profit or loss of the company and the undertakings included in the consolidation taken
as a whole; and
• the management report (which comprises the Report of the Directors) includes a fair review of the development and performance of the
business and the position of the company and the undertakings included in the consolidation taken as a whole, together with a
description of the principal risks and uncertainties that they face.
This responsibility statement was approved by the board on 6th June 2012 and is signed on its behalf by:
Tim Stevenson
Chairman
Responsibility of Directors
Johnson Matthey Annual Report & Accounts 2012
Accounts

121
Independent Auditor’s Report
to the members of Johnson Matthey Public Limited Company
We have audited the group and parent company accounts of Johnson Matthey Plc for the year ended 31st March 2012 which comprise the
Consolidated Income Statement, the Consolidated Statement of Total Comprehensive Income, the Consolidated and Parent Company
Balance Sheets, the Consolidated and Parent Company Cash Flow Statements, the Consolidated Statement of Changes in Equity, the Parent
Company Statement of Changes in Equity and the related notes. The financial reporting framework that has been applied in their preparation
is applicable law and International Financial Reporting Standards (IFRS) as adopted by the EU and, as regards the parent company accounts,
as applied in accordance with the provisions of the Companies Act 2006.
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our
audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an
auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other
than the company and the company’s members, as a body, for our audit work, for this report, or for the opinions we have formed.
Respective Responsibilities of Directors and Auditor
As explained more fully in the directors’ responsibilities statement set out on page 120, the directors are responsible for the preparation of the
accounts and for being satisfied that they give a true and fair view. Our responsibility is to audit, and express an opinion on, the accounts in
accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the
Auditing Practices Board’s (APB’s) Ethical Standards for Auditors.
Scope of the Audit of the Accounts
A description of the scope of an audit of accounts is provided on the APB’s website at www.frc.org.uk/apb/scope/private.cfm.
Opinion on Accounts
In our opinion:
• the accounts give a true and fair view of the state of the group’s and of the parent company’s affairs as at 31st March 2012 and of the
group’s profit for the year then ended;
• the group accounts have been properly prepared in accordance with IFRS as adopted by the EU;
• the parent company accounts have been properly prepared in accordance with IFRS as adopted by the EU and as applied in
accordance with the provisions of the Companies Act 2006; and
• the accounts have been prepared in accordance with the requirements of the Companies Act 2006 and, as regards the group accounts,
Article 4 of the IAS Regulation.
Opinion on Other Matters Prescribed by the Companies Act 2006
In our opinion:
• the part of the directors’ Remuneration Report to be audited has been properly prepared in accordance with the Companies Act 2006; and
• the information given in the directors’ report for the financial year for which the accounts are prepared is consistent with the accounts.
Matters on Which we are Required to Report by Exception
We have nothing to report in respect of the following:
Under the Companies Act 2006 we are required to report to you if, in our opinion:
• adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from
branches not visited by us; or
• the parent company accounts and the part of the directors’ Remuneration Report to be audited are not in agreement with the accounting
records and returns; or
• certain disclosures of directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Under the Listing Rules we are required to review:
• the directors’ statement, set out on page 47, in relation to going concern; and
• the part of the Corporate Governance statement on page 85 relating to the company’s compliance with the nine provisions of the UK
Corporate Governance Code specified for our review; and
• certain elements of the report to shareholders by the board on directors’ remuneration.
D V Matthews (Senior Statutory Auditor)
for and on behalf of KPMG Audit Plc, Statutory Auditor
Chartered Accountants
15 Canada Square, London E14 5GL
6th June 2012

Johnson Matthey Annual Report & Accounts 2012
Accounts
122
The notes on pages 131 to 167 form an integral part of the accounts.
Consolidated Income Statement
for the year ended 31st March 2012
2012 2011
restated
Notes £ million £ million
Revenue 1,2 12,023.2 9,984.8
Cost of sales (11,270.2) (9,337.2)
Gross profit 753.0 647.6
Distribution costs (119.8) (112.2)
Administrative expenses (183.1) (169.2)
Major impairment and restructuring charges 3 – (71.8)
Amortisation of acquired intangibles 4 (16.7) (14.5)
Operating profit 1,6 433.4 279.9
Finance costs 7 (35.4) (33.1)
Finance income 8 11.3 12.4
Dissolution of associate – 0.1
Profit before tax 409.3 259.3
Income tax expense 9 (93.9) (75.5)
Profit for the year from continuing operations 315.4 183.8
Loss for the year from discontinued operations 40 – (1.9)
Profit for the year 315.4 181.9
Attributable to:
Owners of the parent company 315.9 181.5
Non-controlling interests (0.5) 0.4
315.4 181.9
pence pence
Earnings per ordinary share attributable to the equity holders of the parent company
Continuing operations
Basic 11 148.7 86.1
Diluted 11 146.9 85.6
Total
Basic 11 148.7 85.2
Diluted 11 146.9 84.7
Consolidated Statement of Total Comprehensive Income
for the year ended 31st March 2012
2012 2011
restated
Notes £ million £ million
Profit for the year 315.4 181.9
Other comprehensive income:
Currency translation differences 31 (53.7) (8.9)
Cash flow hedges 31 6.1 3.7
Fair value gains on net investment hedges 23.7 2.2
Actuarial (loss) / gain on post-employment benefits assets and liabilities 14 (70.6) 85.4
Tax on above items taken directly to or transferred from equity 32 18.7 (30.0)
Other comprehensive (expense) / income for the year (75.8) 52.4
Total comprehensive income for the year 239.6 234.3
Attributable to:
Owners of the parent company 240.1 233.9
Non-controlling interests (0.5) 0.4
239.6 234.3

123
The notes on pages 131 to 167 form an integral part of the accounts.
Consolidated and Parent Company Balance Sheets
as at 31st March 2012
Group Parent company
2012 2011 2012 2011
restated
Notes £ million £ million £ million £ million
Assets
Non-current assets
Property, plant and equipment 15 909.5 907.7 235.7 230.8
Goodwill 16 519.5 528.7 110.5 110.5
Other intangible assets 17 127.8 152.9 5.4 6.4
Investments in subsidiaries 18 – – 1,546.2 1,506.2
Deferred income tax assets 29 25.4 39.7 14.2 19.9
Available-for-sale investments 19 8.0 8.0 – –
Swaps related to borrowings 24 29.3 23.7 29.3 23.7
Other receivables 21 3.0 3.0 387.7 524.0
Post-employment benefits net assets 14 2.0 3.8 – –
Total non-current assets 1,624.5 1,667.5 2,329.0 2,421.5
Current assets
Inventories 20 630.8 556.3 164.4 154.8
Current income tax assets 11.5 9.4 – –
Trade and other receivables 21 847.1 893.2 1,009.6 793.3
Cash and cash equivalents – cash and deposits 24 139.1 118.9 78.0 23.1
Other financial assets 25 11.6 6.9 11.2 7.2
Total current assets 1,640.1 1,584.7 1,263.2 978.4
Total assets 3,264.6 3,252.2 3,592.2 3,399.9
Liabilities
Current liabilities
Trade and other payables 22 (710.7) (662.9) (1,554.4) (1,286.3)
Current income tax liabilities (103.1) (114.2) (5.5) (15.4)
Cash and cash equivalents – bank overdrafts 24 (35.8) (24.5) (65.9) (74.1)
Other borrowings and finance leases 24 (56.4) (181.8) (40.3) (146.8)
Other financial liabilities 26 (4.5) (6.5) (4.8) (7.8)
Provisions 28 (34.0) (60.1) (17.1) (2.5)
Total current liabilities (944.5) (1,050.0) (1,688.0) (1,532.9)
Non-current liabilities
Borrowings, finance leases and related swaps 24 (530.4) (575.7) (530.1) (575.0)
Deferred income tax liabilities 29 (53.4) (59.5) – –
Employee benefits obligations 14 (171.4) (134.2) (96.6) (73.2)
Provisions 28 (28.8) (24.2) (12.6) (13.3)
Other payables 22 (4.3) (4.8) (23.3) (0.2)
Total non-current liabilities (788.3) (798.4) (662.6) (661.7)
Total liabilities (1,732.8) (1,848.4) (2,350.6) (2,194.6)
Net assets 1,531.8 1,403.8 1,241.6 1,205.3
Equity
Share capital 30 220.7 220.7 220.7 220.7
Share premium account 148.3 148.3 148.3 148.3
Shares held in employee share ownership trust (ESOT) (50.2) (35.8) (50.2) (35.8)
Other reserves 33 43.0 68.3 6.8 1.8
Retained earnings 1,169.6 1,001.2 916.0 870.3
Total equity attributable to owners of the parent company 1,531.4 1,402.7 1,241.6 1,205.3
Non-controlling interests 0.4 1.1 – –
Total equity 1,531.8 1,403.8 1,241.6 1,205.3
The accounts were approved by the Board of Directors on 6th June 2012 and signed on its behalf by:
N A P Carson
Directors
R J MacLeod

Johnson Matthey Annual Report & Accounts 2012
Accounts
124
The notes on pages 131 to 167 form an integral part of the accounts.
Consolidated and Parent Company Cash Flow Statements
for the year ended 31st March 2012
Group Parent company
2012 2011 2012 2011
restated
Notes £ million £ million £ million £ million
Cash flows from operating activities
Profit before tax 409.3 259.3 199.2 231.1
Adjustments for:
Dissolution of associate – (0.1) – –
Discontinued operations 40 – (1.9) – –
Depreciation, amortisation, impairment losses and profit on
sale of non-current assets and investments 146.8 168.8 30.9 41.9
Share-based payments 12.8 11.3 7.7 6.7
Increase in inventories (88.9) (159.6) (9.7) (53.4)
Decrease / (increase) in receivables 24.5 (250.9) (80.0) (215.3)
Increase / (decrease) in payables 55.4 113.1 237.1 (96.6)
(Decrease) / increase in provisions (19.2) 52.0 14.0 5.8
Contributions in excess of employee benefit obligations charge (30.9) (26.8) (30.0) (23.4)
Changes in fair value of financial instruments (0.7) 1.7 (0.3) 1.0
Dividends received from subsidiaries – – (80.8) (123.3)
Net finance costs 24.1 20.7 (20.3) (20.0)
Income tax paid (68.8) (64.7) (4.2) (16.0)
Net cash inflow / (outflow) from operating activities 464.4 122.9 263.6 (261.5)
Cash flows from investing activities
Dividends received from associate – 3.5 – –
Dividends received from subsidiaries – – 80.8 123.3
Purchases of non-current assets and investments 34 (150.7) (137.4) (34.5) (29.1)
Proceeds from sale of non-current assets and investments 8.3 3.9 – 3.8
Purchases of businesses 34 0.6 (53.1) – –
Net cash (outflow) / inflow from investing activities (141.8) (183.1) 46.3 98.0
Cash flows from financing activities
Net cost of ESOT transactions in own shares 34 (25.7) (9.1) (25.7) (9.1)
(Repayment of) / proceeds from borrowings and finance leases 34 (166.4) 96.2 (147.0) 101.0
Dividends paid to equity holders of the parent company 10 (103.1) (86.1) (103.1) (86.1)
Dividends paid to non-controlling interests – (0.5) – –
Settlement of currency swaps for net investment hedging 8.8 7.4 8.8 7.4
Interest paid (34.0) (33.1) (47.6) (42.0)
Interest received 11.4 13.7 67.8 63.2
Net cash (outflow) / inflow from financing activities (309.0) (11.5) (246.8) 34.4
Increase / (decrease) in cash and cash equivalents in the year 13.6 (71.7) 63.1 (129.1)
Exchange differences on cash and cash equivalents (4.7) 1.7 – –
Cash and cash equivalents at beginning of year 94.4 164.4 (51.0) 78.1
Cash and cash equivalents at end of year 35 103.3 94.4 12.1 (51.0)
Reconciliation to net debt
Increase / (decrease) in cash and cash equivalents in the year 13.6 (71.7) 63.1 (129.1)
Repayment of / (proceeds from) borrowings and finance leases 166.4 (96.2) 147.0 (101.0)
Change in net debt resulting from cash flows 180.0 (167.9) 210.1 (230.1)
Borrowings acquired with subsidiaries – (20.5) – –
Exchange differences on net debt 5.2 22.4 10.0 20.0
Movement in net debt in year 185.2 (166.0) 220.1 (210.1)
Net debt at beginning of year (639.4) (473.4) (749.1) (539.0)
Net debt at end of year 24 (454.2) (639.4) (529.0) (749.1)

125
The notes on pages 131 to 167 form an integral part of the accounts.
Consolidated Statement of Changes in Equity
for the year ended 31st March 2012
Share Shares Other Total
Share premium held in reserves Retained attributable to Non-controlling Total
capital account ESOT (note 33) earnings equity holders interests equity
restated restated restated restated
£ million £ million £ million £ million £ million £ million £ million £ million
At 1st April 2010 220.7 148.3 (30.7) 73.4 837.7 1,249.4 1.4 1,250.8
Profit for the year – – – – 181.5 181.5 0.4 181.9
Actuarial gain on
post-employment benefits – – – – 85.4 85.4 – 85.4
Cash flow hedges – – – 3.7 – 3.7 – 3.7
Net investment hedges – – – 2.2 – 2.2 – 2.2
Currency translation differences – – – (8.9) – (8.9) – (8.9)
Tax on other comprehensive
income – – – (2.1) (27.9) (30.0) – (30.0)
Total comprehensive income – – – (5.1) 239.0 233.9 0.4 234.3
Dividends paid (note 10) – – – – (86.1) (86.1) (0.7) (86.8)
Purchase of shares by ESOT – – (16.7) – – (16.7) – (16.7)
Share-based payments – – – – 17.1 17.1 – 17.1
Cost of shares transferred
to employees – – 11.6 – (10.3) 1.3 – 1.3
Tax on share-based payments – – – – 3.8 3.8 – 3.8
At 31st March 2011 (restated) 220.7 148.3 (35.8) 68.3 1,001.2 1,402.7 1.1 1,403.8
Profit for the year – – – – 315.9 315.9 (0.5) 315.4
Actuarial loss on
post-employment benefits – – – – (70.6) (70.6) – (70.6)
Cash flow hedges – – – 6.1 – 6.1 – 6.1
Net investment hedges – – – 23.7 – 23.7 – 23.7
Currency translation differences – – – (53.7) – (53.7) – (53.7)
Tax on other comprehensive
income – – – (1.4) 20.1 18.7 – 18.7
Total comprehensive income – – – (25.3) 265.4 240.1 (0.5) 239.6
Dividends paid (note 10) – – – – (103.1) (103.1) (0.2) (103.3)
Purchase of shares by ESOT – – (37.0) – – (37.0) – (37.0)
Share-based payments – – – – 18.8 18.8 – 18.8
Cost of shares transferred
to employees – – 22.6 – (17.4) 5.2 – 5.2
Tax on share-based payments – – – – 4.7 4.7 – 4.7
At 31st March 2012 220.7 148.3 (50.2) 43.0 1,169.6 1,531.4 0.4 1,531.8

126 Johnson Matthey Annual Report & Accounts 2012
Accounts
Parent Company Statement of Changes in Equity
for the year ended 31st March 2012
Share Shares Other
Share premium held in reserves Retained Total
capital account ESOT (note 33) earnings equity
£ million £ million £ million £ million £ million £ million
At 1st April 2010 220.7 148.3 (30.7) 0.2 686.0 1,024.5
Profit for the year – – – – 210.6 210.6
Actuarial gain on post-employment benefits – – – – 74.8 74.8
Cash flow hedges – – – 0.6 – 0.6
Currency translation differences – – – 1.2 – 1.2
Tax on other comprehensive income – – – (0.2) (23.8) (24.0)
Total comprehensive income – – – 1.6 261.6 263.2
Dividends paid (note 10) – – – – (86.1) (86.1)
Purchase of shares by ESOT – – (16.7) – – (16.7)
Share-based payments – – – – 15.3 15.3
Cost of shares transferred to employees – – 11.6 – (8.5) 3.1
Tax on share-based payments – – – – 2.0 2.0
At 31st March 2011 220.7 148.3 (35.8) 1.8 870.3 1,205.3
Profit for the year – – – – 183.4 183.4
Actuarial loss on post-employment benefits – – – – (53.3) (53.3)
Cash flow hedges – – – 6.7 – 6.7
Currency translation differences – – – (0.1) – (0.1)
Tax on other comprehensive income – – – (1.6) 14.6 13.0
Total comprehensive income – – – 5.0 144.7 149.7
Dividends paid (note 10) – – – – (103.1) (103.1)
Purchase of shares by ESOT – – (37.0) – – (37.0)
Share-based payments – – – – 16.2 16.2
Cost of shares transferred to employees – – 22.6 – (14.8) 7.8
Tax on share-based payments – – – – 2.7 2.7
At 31st March 2012 220.7 148.3 (50.2) 6.8 916.0 1,241.6
The notes on pages 131 to 167 form an integral part of the accounts.

127
Accounting Policies
for the year ended 31st March 2012
The group’s and parent company’s significant accounting policies, together with the judgments made by management in applying those
policies which have the most significant effect on the amounts recognised in the accounts, are:
Basis of accounting and preparation
The accounts are prepared in accordance with International Financial Reporting Standards (IFRS) and interpretations issued by the
International Financial Reporting Interpretations Committee (IFRIC) or the Standing Interpretations Committee (SIC) as adopted by the
European Union. For Johnson Matthey, there are no differences between IFRS as adopted by the European Union and full IFRS as published
by the International Accounting Standards Board (IASB) and so the accounts comply with IFRS.
The accounts are prepared on the historical cost basis, except for certain assets and liabilities which are measured at fair value as explained
below.
The consolidated accounts for 31st March 2011 have been restated for measurement period adjustments to the fair values of the Intercat, Inc.
acquisition (note 39). Also, cost of sales and distribution costs for the year ended 31st March 2011 have been represented by £9.0 million
following a reclassification of certain employee costs out of distribution costs in one of the group’s businesses to better reflect the nature of
the costs.
The parent company has not presented its own income statement, statement of total comprehensive income and related notes as permitted
by section 408 of the Companies Act 2006.
Basis of consolidation
The consolidated accounts comprise the accounts of the parent company and all its subsidiaries, including the employee share ownership trust.
Entities over which the group has the ability to exercise control are accounted for as subsidiaries. Entities that are not subsidiaries or joint
ventures but where the group has significant influence (i.e. the power to participate in the financial and operating policy decisions) are
accounted for as associates.
The results of businesses acquired or disposed of in the year are consolidated from or up to the effective date of acquisition or disposal
respectively. The net assets of businesses acquired are incorporated in the consolidated accounts at their fair values at the date of acquisition.
Transactions and balances between group companies are eliminated. No profit is taken on transactions between group companies.
Foreign currencies
Foreign currency transactions are recorded in the functional currency of the relevant subsidiary or branch at the exchange rate at the date of
transaction. Foreign currency monetary assets and liabilities are retranslated into the relevant functional currency at the exchange rate at the
balance sheet date.
Income statements and cash flows of overseas subsidiaries and branches are translated into sterling at the average rates for the year. Balance
sheets of overseas subsidiaries and branches, including any fair value adjustments and including related goodwill, are translated into sterling
at the exchange rates at the balance sheet date.
Exchange differences arising on the translation of the net investment in overseas subsidiaries and branches, less exchange differences arising
on related foreign currency financial instruments which hedge the group’s net investment in these operations, are taken to a separate
component of equity. The group has taken advantage of the exemption allowed in IFRS 1 – ‘First-time Adoption of International Reporting
Standards’ to deem the cumulative translation difference for all overseas subsidiaries and branches to be zero at 1st April 2004.
Other exchange differences are taken to operating profit.
Revenue
Revenue comprises all sales of goods and rendering of services at the fair value of consideration received or receivable after the deduction of
any trade discounts and excluding sales taxes. Revenue is recognised when it can be measured reliably and the significant risks and rewards
of ownership are transferred to the customer. With the sale of goods, this occurs when the goods are despatched or made available to the
customer, except for the sale of consignment products located at customers’ premises where revenue is recognised on notification that the
product has been used. With the rendering of services, revenue is recognised by reference to the stage of completion as measured by the
proportion that costs incurred to date bear to the estimated total costs. With royalties and licence income, revenue is recognised in
accordance with the substance of the relevant agreement.
Long term contracts
Where the outcome of a long term contract can be estimated reliably, revenue and costs are recognised by reference to the stage of
completion. This is measured by the proportion that contract costs incurred to date bear to the estimated total contract costs.
Where the outcome of a long term contract cannot be estimated reliably, contract revenue is recognised to the extent of contract costs
incurred that it is probable will be recoverable. Contract costs are recognised as expenses in the period in which they are incurred.
When it is probable that the total contract costs will exceed total contract revenue, the expected loss is recognised as an expense
immediately.
Finance costs and finance income
Finance costs that are directly attributable to the construction of an asset that necessarily takes a substantial period of time to get ready for its
intended use and for which construction was commenced after 1st April 2007 are capitalised as part of the cost of that asset. Other finance
costs and finance income are recognised in the income statement in the year incurred.

128
Accounting Policies
for the year ended 31st March 2012
Research and development
Research expenditure is charged to the income statement in the year incurred.
Development expenditure is charged to the income statement in the year incurred unless it meets the IFRS recognition criteria for
capitalisation. When the recognition criteria have been met any further development expenditure is capitalised as an intangible asset.
Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and any provisions for impairment. Finance costs that relate
to an asset that takes a substantial period of time to construct and for which construction was started after 1st April 2007 are capitalised as
part of the cost of that asset. Other finance costs are not capitalised.
Depreciation is provided at rates calculated to write off the cost less estimated residual value of each asset over its useful life. Certain freehold
buildings and plant and equipment are depreciated using the units of production method, as this more closely reflects their expected
consumption. All other assets are depreciated using the straight line method. The useful lives vary according to the class of the asset, but are
typically: leasehold property 30 years (or the life of the lease if shorter); freehold buildings 30 years; and plant and equipment 4 to 10 years.
Freehold land is not depreciated.
Goodwill
Goodwill arises on the acquisition of a business when the fair value of the consideration given exceeds the fair value attributed to the net
assets acquired (including contingent liabilities). It is subject to annual impairment reviews. Acquisition-related costs arising on acquisitions
made after 31st March 2010 are charged to the income statement as incurred. Acquisition-related costs arising on acquisitions made on or
before 31st March 2010 were regarded as a component of consideration and therefore increased goodwill.
The group and parent company have taken advantage of the exemption allowed under IFRS 1 and so goodwill arising on acquisitions made
before 1st April 2004 is included at the carrying amount at that date less any subsequent impairments. Up to 31st March 1998 goodwill was
eliminated against equity.
Intangible assets
Intangible assets are stated at cost less accumulated amortisation and any provisions for impairment. They are amortised in accordance with
the relevant income stream or by using the straight line method over the useful lives from the time they are first available for use. The
estimated useful lives vary according to the specific asset but are typically: 1 to 12 years for customer contracts and relationships; 3 to 8
years for capitalised computer software; 3 to 20 years for patents, trademarks and licences; 10 years for acquired research and technology;
and 3 to 8 years for capitalised development currently being amortised.
Intangible assets which are not yet being amortised are subject to annual impairment reviews.
Investments in subsidiaries
Investments in subsidiaries are stated in the parent company’s balance sheet at cost less any provisions for impairment. If a distribution is
received from a subsidiary then the investment in that subsidiary is assessed for an indication of impairment.
Leases
Leases are classified as finance leases whenever they transfer substantially all the risks and rewards of ownership to the group. The assets are
included in property, plant and equipment and the capital elements of the leasing commitments are shown as obligations under finance
leases. The assets are depreciated on a basis consistent with similar owned assets or the lease term if shorter. The interest element of the
lease rental is included in the income statement.
All other leases are classified as operating leases and the lease costs are expensed on a straight line basis over the lease term.
Grants
Grants related to assets are included in deferred income and released to the income statement in equal instalments over the expected useful
lives of the related assets.
Grants related to income are deducted in reporting the related expense.
Precious metal inventories
Inventories of gold, silver and platinum group metals are valued according to the source from which the metal is obtained. Metal which has
been purchased and committed to future sales to customers or hedged in metal markets is valued at the price at which it is contractually
committed or hedged, adjusted for unexpired contango and backwardation. Other precious metal inventories owned by the group, which are
unhedged, are valued at the lower of cost and net realisable value using the weighted average cost formula.
Other inventories
Non-precious metal inventories are valued at the lower of cost, including attributable overheads, and net realisable value. Except where costs
are specifically identified, the first-in, first-out or weighted average cost formulae are used to value inventories.
Johnson Matthey Annual Report & Accounts 2012
Accounts

129
Accounting Policies
for the year ended 31st March 2012
Cash and cash equivalents
Cash and deposits comprise cash at bank and in hand, including short term deposits with a maturity date of three months or less from the
date of acquisition. The group and parent company routinely use short term bank overdraft facilities, which are repayable on demand, as an
integral part of their cash management policy. Therefore cash and cash equivalents in the cash flow statements are cash and deposits less
bank overdrafts. Offset arrangements across group businesses have been applied to arrive at the net cash and overdraft figures.
Derivative financial instruments
The group and parent company use derivative financial instruments, in particular forward currency contracts and currency swaps, to manage
the financial risks associated with their underlying business activities and the financing of those activities. The group and parent company do
not undertake any trading activity in derivative financial instruments.
Derivative financial instruments are measured at their fair value. Derivative financial instruments may be designated at inception as fair value
hedges, cash flow hedges or net investment hedges if appropriate. Derivative financial instruments which are not designated as hedging
instruments are classified under IFRS as held for trading, but are used to manage financial risk.
Changes in the fair value of any derivative financial instruments that are not designated as or are not determined to be effective hedges are
recognised immediately in the income statement.
Changes in the fair value of derivative financial instruments designated as fair value hedges are recognised in the income statement, together
with the related changes in the fair value of the hedged asset or liability. Fair value hedge accounting is discontinued if the hedging instrument
expires or is sold, terminated or exercised, the hedge no longer meets the criteria for hedge accounting or the designation is revoked.
Changes in the fair value of derivative financial instruments designated as cash flow hedges are recognised in equity, to the extent that the
hedges are effective. Ineffective portions are recognised in the income statement immediately. If the hedged item results in the recognition of a
non-financial asset or liability, the amount recognised in equity is transferred out of equity and included in the initial carrying amount of the
asset or liability. Otherwise, the amount recognised in equity is transferred to the income statement in the same period that the hedged item is
recognised in the income statement. If the hedging instrument expires or is sold, terminated or exercised, the hedge no longer meets the
criteria for hedge accounting or the designation is revoked, amounts previously recognised in equity remain in equity until the forecast
transaction occurs. If a forecast transaction is no longer expected to occur, the amounts previously recognised in equity are transferred to the
income statement.
For hedges of net investments in foreign operations, the effective portion of the gain or loss on the hedging instrument is recognised in equity,
while the ineffective portion is recognised in the income statement. Amounts taken to equity are transferred to the income statement when the
foreign operations are sold.
Other financial instruments
All other financial instruments are initially recognised at fair value plus transaction costs. Subsequent measurement is as follows:
• Unhedged borrowings are measured at amortised cost.
• Available-for-sale investments are investments in equity instruments that do not have a quoted market price in an active market and
whose fair value cannot be measured reliably and so are measured at cost.
• All other financial assets and liabilities, including short term receivables and payables, are measured at amortised cost less any
impairment provision.
Taxation
Current and deferred tax are recognised in the income statement, except when they relate to items recognised directly in equity when the
related tax is also recognised in equity.
Current tax is the amount of income tax expected to be paid in respect of taxable profits using the tax rates that have been enacted or
substantively enacted at the balance sheet date.
Deferred tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and
their carrying amount in the balance sheet. It is provided using the tax rates that are expected to apply in the period when the asset or liability
is settled, based on tax rates that have been enacted or substantively enacted at the balance sheet date.
Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against which the temporary
differences can be utilised. No deferred tax asset or liability is recognised in respect of temporary differences associated with investments in
subsidiaries, branches and associates where the group is able to control the timing of the reversal of the temporary difference and it is
probable that the temporary difference will not reverse in the foreseeable future.
Provisions and contingencies
Provisions are recognised when the group has a present obligation as a result of a past event and a reliable estimate can be made of a
probable adverse outcome, for example warranties, environmental claims and restructurings. Otherwise, material contingent liabilities are
disclosed unless the transfer of economic benefits is remote. Contingent assets are only disclosed if an inflow of economic benefits is probable.
The parent company considers financial guarantees of its subsidiaries’ borrowings and precious metal leases to be insurance contracts.
These are treated as contingent liabilities unless it becomes probable that it will be required to make a payment under the guarantee.

130 Johnson Matthey Annual Report & Accounts 2012
Accounts
Share-based payments and employee share ownership trust (ESOT)
The fair value of outstanding shares allocated to employees under the long term incentive plan is calculated by adjusting the share price on the
date of allocation for the present value of the expected dividends that will not be received. The resulting cost is charged to the income
statement over the relevant vesting periods, adjusted to reflect actual and expected levels of vesting where appropriate.
The group and parent company provide finance to the ESOT to purchase company shares in the open market. Costs of running the ESOT are
charged to the income statement. The cost of shares held by the ESOT is deducted in arriving at equity until they vest unconditionally in
employees.
Pensions and other post-employment benefits
The group operates a number of contributory and non-contributory plans, mainly of the defined benefit type, which require contributions to be
made to separately administered funds.
The costs of the defined contribution plans are charged to the income statement as they fall due.
For defined benefit plans, the group and parent company recognise the net assets or liabilities of the schemes in their balance sheets.
Obligations are measured at present value using the projected unit credit method and a discount rate reflecting yields on high quality
corporate bonds. Assets are measured at their fair value at the balance sheet date. The changes in scheme assets and liabilities, based on
actuarial advice, are recognised as follows:
• The current service cost is spread over the period during which benefit is expected to be derived from the employees’ services based on
the most recent actuarial valuation and is deducted in arriving at operating profit.
• The interest cost, based on the discount rate at the beginning of the year and the present value of the defined benefit obligation during
the year, is included in operating profit.
• The expected return on plan assets, based on market expectations at the beginning of the year for returns over the entire life of the
related obligation and amended for changes in the fair value of plan assets as a result of contributions paid in and benefits paid out, is
included in operating profit.
• Actuarial gains and losses, representing differences between the expected return and actual return on plan assets and reimbursement
rights, differences between actuarial assumptions underlying the plan liabilities and actual experience during the year, and changes in
actuarial assumptions, are recognised in the statement of total comprehensive income in the year they occur.
• Past service costs are spread evenly over the period in which the increases in benefit vest and are deducted in arriving at operating profit.
If an increase in benefits vests immediately, the cost is recognised immediately.
• Gains or losses arising from settlements or curtailments are included in operating profit.
Standards and interpretations adopted in the year
During the year, the following new and amendments to accounting standards and interpretations were adopted:
IAS 24 – ‘Related Party Disclosures’, Amendments to IFRIC 14 – ‘Prepayments of a Minimum Funding Requirement’, IFRIC 19 –
‘Extinguishing Financial Liabilities with Equity Instruments’, Amendments to IFRS 1 – ‘Limited Exemption from Comparative IFRS 7 Disclosures
for First-time Adopters’ and the ‘Improvements to IFRSs’ issued in May 2010 have all been adopted during the year. There was no material
impact on the reported results or financial position of the group and parent company.
Standards and interpretations issued but not yet applied
The impact of the adoption of IFRS 9 – ‘Financial Instruments’, Amendments to IFRS 9 and IFRS 7 – ‘Mandatory Effective Date and Transition
Disclosures’, IFRS 10 – ‘Consolidated Financial Statements’, IFRS 11 – ‘Joint Arrangements’, IFRS 12 – ‘Disclosure of Interests in Other
Entities’ and IFRS 13 – ‘Fair Value Measurement’ and the revised IAS 27 – ‘Separate Financial Statements’ and IAS 28 – ‘Investments in
Associates and Joint Ventures’ are still being evaluated.
IAS 19 – ‘Employee Benefits’ was revised in June 2011 and is applicable for periods beginning on or after 1st January 2013. It removes the
‘corridor approach’ for recognising actuarial gains and losses and eliminates options for presenting gains and losses which will have no effect
on the group and parent company. It also amends the disclosures and requires the replacement of the expected return on plan assets and
interest cost on plan obligations with net interest on the net defined benefit liability based on the discount rate. The full effect on the group and
parent company is still being evaluated but it is likely to reduce the group’s profit before tax by approximately £6 million.
The effects of any standards and interpretations amended or issued after 30th April 2012 have not yet been evaluated.
The group and parent company do not consider that any other standards or interpretations issued by the IASB but not yet applicable will have
a significant impact on their reported results or net assets.
Accounting Policies
for the year ended 31st March 2012

131
Notes on the Accounts
for the year ended 31st March 2012
1 Segmental information
For management purposes, the group is organised into three operating divisions – Environmental Technologies, Precious Metal Products
and Fine Chemicals and each division is represented by a director on the Board of Directors. These operating divisions represent the
group’s segments. Their principal activities are described on pages 26 to 42. The performance of the divisions is assessed by the Board
of Directors on underlying operating profit, which is before amortisation of acquired intangibles, major impairment and restructuring
charges and profit or loss on disposal of businesses. Each division is also assessed on sales excluding precious metals including
inter-segment sales. Sales between segments are made at market prices, taking into account the volumes involved.
Year ended 31st March 2012
Environmental Precious Metal Fine
Technologies Products Chemicals Eliminations Total
£ million £ million £ million £ million £ million
Revenue from external customers 3,123.6 8,609.4 290.2 – 12,023.2
Inter-segment revenue 131.0 1,232.0 2.2 (1,365.2) –
Total revenue 3,254.6 9,841.4 292.4 (1,365.2) 12,023.2
External sales excluding the value of precious metals 1,861.9 534.3 282.4 – 2,678.6
Inter-segment sales 13.8 47.7 2.3 (63.8) –
Sales excluding the value of precious metals 1,875.7 582.0 284.7 (63.8) 2,678.6
Segmental underlying operating profit 211.8 200.8 69.7 – 482.3
Unallocated corporate expenses (32.2)
Underlying operating profit 450.1
Amortisation of acquired intangibles (note 4) (16.7)
Operating profit 433.4
Net finance costs (24.1)
Profit before tax 409.3
Segmental net assets 1,448.6 324.6 418.8 – 2,192.0
Net debt (454.2)
Post-employment benefits net assets and liabilities (169.4)
Deferred income tax assets and liabilities (28.0)
Provisions and non-current other payables (67.1)
Unallocated corporate net assets 58.5
Total net assets 1,531.8
Segmental capital expenditure 97.1 31.6 15.8 – 144.5
Other additions to non-current assets (excluding financial assets,
deferred tax assets and post-employment benefits net assets) 0.3 – – (0.3) –
Segmental total additions to non-current assets 97.4 31.6 15.8 (0.3) 144.5
Corporate capital expenditure 5.1
Total additions to non-current assets 149.6
Segment depreciation and amortisation 82.8 22.6 17.4 – 122.8
Corporate depreciation 3.3
Amortisation of acquired intangibles (note 4) 16.7
Total depreciation and amortisation 142.8

132
1 Segmental information (continued)
Year ended 31st March 2011 (restated)
Environmental Precious Metal Fine
Technologies Products Chemicals Eliminations Total
£ million £ million £ million £ million £ million
Revenue from external customers 2,703.4 7,028.3 253.1 – 9,984.8
Inter-segment revenue 4.6 1,241.3 1.9 (1,247.8) –
Total revenue 2,708.0 8,269.6 255.0 (1,247.8) 9,984.8
External sales excluding the value of precious metals 1,561.3 475.4 243.6 – 2,280.3
Inter-segment sales 4.5 65.8 1.8 (72.1) –
Sales excluding the value of precious metals 1,565.8 541.2 245.4 (72.1) 2,280.3
Segmental underlying operating profit 164.7 172.9 56.2 – 393.8
Unallocated corporate expenses (27.6)
Underlying operating profit 366.2
Major impairment and restructuring charges (note 3) (71.8)
Amortisation of acquired intangibles (note 4) (14.5)
Operating profit 279.9
Net finance costs (20.7)
Dissolution of associate 0.1
Profit before tax 259.3
Segmental net assets 1,534.9 357.3 417.5 – 2,309.7
Net debt (639.4)
Post-employment benefits net assets and liabilities (130.4)
Deferred income tax assets and liabilities (19.8)
Provisions and non-current other payables (89.1)
Unallocated corporate net assets (27.2)
Total net assets 1,403.8
Segmental capital expenditure 90.1 26.1 16.0 – 132.2
Other additions to non-current assets (excluding financial assets,
deferred tax assets and post-employment benefits net assets) 62.8 2.1 10.9 (0.3) 75.5
Segmental total additions to non-current assets 152.9 28.2 26.9 (0.3) 207.7
Corporate capital expenditure 5.7
Total additions to non-current assets 213.4
Segment depreciation and amortisation 78.8 24.3 17.2 – 120.3
Corporate depreciation 2.9
Amortisation of acquired intangibles (note 4) 13.6
Total depreciation and amortisation 136.8
The group received £1,690.0 million of revenue from one external customer (2011 £1,196.8 million) which is 14% (2011 12%) of the
group’s revenue from external customers. The revenue is reported in Precious Metal Products as it is generated by the group’s platinum
marketing and distribution activities and so has a very low return on sales.
Notes on the Accounts
for the year ended 31st March 2012
Johnson Matthey Annual Report & Accounts 2012
Accounts

133
1 Segmental information (continued)
The group’s country of domicile is the UK. Revenue from external customers is based on the customer’s location. Non-current assets are
based on the location of the assets and exclude financial assets, deferred tax assets and post-employment benefits net assets.
Revenue from external customers Non-current assets
2012 2011 2012 2011
restated
£ million £ million £ million £ million
UK 3,534.4 2,442.0 665.3 665.0
Germany 869.4 762.1 227.9 242.8
Rest of Europe 1,379.7 1,242.3 97.2 105.4
USA 2,896.9 2,690.5 343.3 350.4
Rest of North America 126.8 105.0 16.0 14.2
China (including Hong Kong) 1,497.4 1,197.9 51.8 53.1
Rest of Asia 1,027.4 965.1 123.8 118.6
Rest of World 691.2 579.9 34.3 42.7
Total 12,023.2 9,984.8 1,559.6 1,592.2
2 Revenue
2012 2011
£ million £ million
Sale of goods 11,771.9 9,801.1
Rendering of services 193.1 145.0
Royalties and licence income 58.2 38.7
Total revenue 12,023.2 9,984.8
3 Major impairment and restructuring charges
During the year ended 31st March 2011 the group closed its Haverton manufacturing site in Billingham, UK. This gave rise to a pre-tax
impairment and restructuring charge of £14.8 million in that year, which was excluded from underlying operating profit.
During the year ended 31st March 2011 the group announced it was starting consultation with the Works Council about the closure of its
autocatalyst facility in Brussels. The plant ceased production in July 2011, the closure of the site then commenced and is expected to be
completed during the year ending 31st March 2013. This gave rise to a pre-tax impairment and restructuring charge in the year ended
31st March 2011 of £57.0 million, which was excluded from underlying operating profit. There is no impact in the consolidated income
statement in the year ended 31st March 2012.
4 Amortisation of acquired intangibles
The amortisation of intangible assets which arise on the acquisition of businesses, together with any subsequent impairment of these
intangible assets, is shown separately on the face of the income statement. It is excluded from underlying operating profit.
Notes on the Accounts
for the year ended 31st March 2012

134
5 Fees payable to auditors
2012 2011
£ million £ million £ million £ million
Fees payable to the company’s auditor for the audit of the company’s
annual accounts 0.5 0.5
Fees payable to the company’s auditor and its associates for other services:
– the audit of the company’s subsidiaries, pursuant to legislation 1.1 1.0
– other services supplied pursuant to legislation 0.1 0.1
– tax compliance services 0.2 0.2
– tax advisory services 0.2 0.1
– due diligence – 0.1
– other services 0.1 0.1
Total fees payable to the company’s auditor and its associates for other services 1.7 1.6
Total fees payable to the company’s auditor and its associates 2.2 2.1
Audit fees paid to other auditors were £0.1 million (2011 £0.1 million).
6 Operating profit
2012 2011
restated
£ million £ million
Operating profit is arrived at after charging / (crediting):
Total research and development expenditure 128.6 109.8
less development expenditure capitalised (9.1) (13.0)
Research and development charged 119.5 96.8
less external funding received – from government grants (2.0) (1.4)
– from other organisations (4.2) (3.9)
Net research and development 113.3 91.5
Other government grants (0.2) (0.1)
Inventories recognised as an expense 10,561.4 8,668.9
Write-down of inventories recognised as an expense 8.6 7.1
Reversal of write-down of inventories arising from increases in net realisable value (2.2) (1.5)
Net (gains) / losses on foreign exchange (5.2) 3.8
Net losses / (gains) on foreign currency forwards held for trading 6.0 (2.8)
Cash flow hedges transferred from equity – revenue (2.3) (0.5)
– cost of sales 0.1 (0.2)
– total (2.2) (0.7)
Depreciation of property, plant and equipment 108.5 108.3
Amortisation of internally generated intangible assets included in cost of sales 12.5 9.6
Amortisation of other intangible assets included in – cost of sales 3.2 3.5
– distribution costs 0.1 0.1
– administrative expenses 1.8 1.7
– amortisation of acquired intangibles (note 4) 16.7 13.6
Operating lease rentals payable – minimum lease payments 13.4 12.8
Operating lease rentals payable – sublease payments received (0.2) (0.1)
The items above are for both continuing operations and total group.
Notes on the Accounts
for the year ended 31st March 2012
Johnson Matthey Annual Report & Accounts 2012
Accounts

135
7 Finance costs
2012 2011
£ million £ million
Remaining loss on remeasurement of net investment hedging instruments to fair value – 0.2
Net loss on remeasurement of fair value hedges and related hedged items to fair value 0.1 –
Net losses on financial assets and liabilities classified as held for trading 0.1 0.2
Interest payable on financial liabilities measured at amortised cost 35.0 32.5
Unwinding of discount on provisions 0.3 0.4
Total finance costs 35.4 33.1
8 Finance income
2012 2011
£ million £ million
Interest receivable on interest rate swaps 8.2 9.2
Net gains on financial assets and liabilities classified as held for trading 8.2 9.2
Interest receivable on loans and receivables 3.1 3.2
Total finance income 11.3 12.4
9 Taxation
2012 2011
restated
£ million £ million
Current tax
Corporation tax on profits for the year 82.6 85.9
Adjustment for prior years (8.4) 2.2
Total current tax 74.2 88.1
Deferred tax
Origination and reversal of temporary differences 22.7 (11.7)
Changes in tax rates and laws (2.8) (2.3)
Benefit from previously unrecognised tax losses, tax credits or temporary differences of prior years (0.2) (0.2)
Write-downs, or reversal of previous write-downs, of deferred tax assets – 1.6
Total deferred tax 19.7 (12.6)
Income tax expense 93.9 75.5
The tax charge for the year can be reconciled to the profit per the income statement as follows:
2012 2011
restated
£ million £ million
Profit before tax 409.3 259.3
Tax expense at UK corporation tax rate of 26% (2011 28%) 106.4 72.6
Effects of:
Overseas tax rates 8.5 3.0
Expenses not deductible for tax purposes 1.7 7.1
Unutilised losses 2.6 1.1
Utilisation of tax losses and tax holidays (4.9) (6.5)
Adjustments for prior years (8.6) 2.0
Research and development credits (7.0) (5.6)
Other (4.8) 1.8
Tax expense for the year 93.9 75.5
In March 2012 the UK government enacted a change in the UK corporation tax rate from 26% to 24% effective from 1st April 2012 and
so the UK deferred tax balances at 31st March 2012 have been recalculated at the new rate.
Notes on the Accounts
for the year ended 31st March 2012

136
10 Dividends
2012 2011
£ million £ million
2009/10 final ordinary dividend paid – 27.9 pence per share – 59.4
2010/11 interim ordinary dividend paid – 12.5 pence per share – 26.7
2010/11 final ordinary dividend paid – 33.5 pence per share 71.2 –
2011/12 interim ordinary dividend paid – 15.0 pence per share 31.9 –
Total dividends 103.1 86.1
A final dividend of 40.0 pence per ordinary share has been proposed by the board which will be paid on 17th August 2012 to
shareholders on the register at the close of business on 3rd August 2012. The estimated amount to be paid is £84.8 million and has not
been recognised in these accounts. The board is also recommending a special dividend to shareholders of 100.0 pence per ordinary
share which will be paid on 17th August 2012 to shareholders on the register at the close of business on 3rd August 2012. This
represents a total payment of approximately £212 million and has not been recognised in these accounts.
11 Earnings per ordinary share
2012 2011
restated
pence pence
Total
Basic 148.7 85.2
Diluted 146.9 84.7
Continuing
Basic 148.7 86.1
Diluted 146.9 85.6
Discontinued
Basic – (0.9)
Diluted – (0.9)
Earnings per ordinary share have been calculated by dividing the profit attributable to equity holders of the parent company by the
weighted average number of shares in issue during the period.
2012 2011
restated
£ million £ million
Earnings
Profit for the year from continuing operations attributable to equity holders of the parent company 315.9 183.4
Loss for the year from discontinued operations attributable to equity holders of the parent company – (1.9)
Profit for the year attributable to equity holders of the parent company 315.9 181.5
2012 2011
Weighted average number of shares in issue
Basic 212,431,522 212,907,178
Dilution for share options and long term incentive plans 2,567,460 1,344,782
Diluted 214,998,982 214,251,960
Notes on the Accounts
for the year ended 31st March 2012
Johnson Matthey Annual Report & Accounts 2012
Accounts

137
11 Earnings per ordinary share (continued)
Underlying earnings per ordinary share are calculated as follows:
2012 2011
restated
£ million £ million
Profit for the year attributable to equity holders of the parent company 315.9 181.5
Major impairment and restructuring charges (note 3) – 71.8
Amortisation of acquired intangibles (note 4) 16.7 14.5
Dissolution of associate – (0.1)
Loss on disposal of discontinued operations – 1.9
Tax thereon (6.1) (16.2)
Underlying profit for the year 326.5 253.4
2012 2011
pence pence
Underlying earnings per share
Basic 153.7 119.0
Diluted 151.9 118.3
12 Employee and key management personnel costs
12a Employee numbers
2012 2011
The average monthly number of employees during the year was:
Environmental Technologies 5,568 5,313
Precious Metal Products 2,847 2,657
Fine Chemicals 1,089 1,052
Corporate and Central Research 410 366
Average number of employees 9,914 9,388
Actual number of employees at 31st March 10,058 9,742
The number of temporary employees included above at 31st March 2012 was 253 (2011 237).
The actual number of staff was:
At 31st March 2012 At 31st March 2011
Actual Agency Total Actual Agency Total
employees staff headcount employees staff headcount
Environmental Technologies 5,640 687 6,327 5,569 654 6,223
Precious Metal Products 2,894 165 3,059 2,711 88 2,799
Fine Chemicals 1,090 17 1,107 1,089 35 1,124
Corporate and Central Research 434 4 438 373 6 379
Total 10,058 873 10,931 9,742 783 10,525
12b Employee benefits expense
2012 2011
£ million £ million
Wages and salaries 392.9 371.2
Social security costs 48.2 36.4
Pension and other post-employment costs 32.3 34.3
Share-based payments 18.8 17.1
Total employee benefits expense 492.2 459.0
Termination benefits of £5.2 million (2011 £33.3 million) are not included above.
Notes on the Accounts
for the year ended 31st March 2012

138
12 Employee and key management personnel costs (continued)
12c Key management personnel
The key management of the group and parent company consist of the Board of Directors and the members of the Chief Executive’s
Committee (CEC). During the year ended 31st March 2012 the CEC had eleven members (2011 twelve members). Their compensation
charged in the year was:
2012 2011
£ million £ million
Short term employee benefits 6.5 6.8
Pension and other post-employment costs 0.4 0.6
Share-based payments 3.6 2.9
Non-executive directors’ fees and benefits 0.6 0.6
Total compensation of key management personnel 11.1 10.9
Other than the compensation above there were no transactions with any key management personnel. There were no balances
outstanding at the year end.
Information on the directors’ remuneration is given in the Remuneration Report on pages 108 to 117.
13 Share-based payments
Long Term Incentive Plan (LTIP)
Under the LTIP, shares are allocated to approximately 900 of the group’s executive directors, senior managers and middle managers
based on a percentage of salary and are subject to performance targets over a three year period. At 31st March 2012, shares allocated
in 2009, 2010 and 2011 (at 31st March 2011, shares allocated in 2008, 2009 and 2010) were outstanding in respect of which the
performance period has not expired. The minimum release of 15% of the allocation is subject to the achievement of underlying earnings
per share (EPS) growth of 6% compound per annum over the three year period. For the maximum release of 100% of the allocation, EPS
must have grown by at least 15% compound per annum. The number of allocated shares released will vary on a straight line basis
between these points. Allocations will lapse if the EPS growth is less than 6% compound per annum over the three year performance
period. For the shares allocated in 2009 only, the performance conditions have been relaxed and so the minimum release requires EPS
growth of 3% compound per annum and the maximum release requires EPS growth of 10% compound per annum. Of the shares
allocated in 2008, 52.42% were released and 47.58% expired during the year.
Share options
In 2007 the LTIP was introduced and allocations of shares under this plan replaced the granting of share options. No share options have
been granted since the year ended 31st March 2007. Equity settled share options were granted to employees at the average of the
market value of the company’s shares over the three days prior to the date of grant and were subject to performance targets over a three
year period and have a maximum life of ten years. The number of shares over which options were granted was based on a percentage of
the employee’s salary and approximately 800 employees were granted options each year.
Options granted in 2004 to 2006 were subject to a minimum three year performance target of EPS growth of UK RPI plus 3% per
annum. Other performance targets were EPS growth of UK RPI plus 4% per annum and EPS growth of UK RPI plus 5% per annum. If
the performance targets were not met at the end of the three year performance period, the options would lapse. The targets for options
granted in 2004, 2005 and the 3% and 4% targets for options granted in 2006 have been met and so these options are exercisable. The
5% target for options granted in 2006 was not met and so these options have lapsed. Gains are capped at 100% of the grant price.
Options granted in 2002 and 2003 can only be exercised if the normalised EPS has grown by at least UK RPI plus 4% per annum over
any three consecutive years during the life of the options. They were subject to annual retesting until they lapse on the tenth anniversary
of grant. Since the targets have been met all these options are exercisable.
Deferred bonus
In the year ended 31st March 2012 the bonus rules were changed for the executive directors and members of the Chief Executive’s
Committee, whereby a proportion of their bonus payable is now awarded as shares and deferred for three years. The first shares will be
awarded in August 2012 for the 2011/12 bonus. The Management Development and Remuneration Committee is entitled to claw back
the deferred element in cases of misstatement or misconduct or other relevant reason as determined by them.
Share Incentive Plan (SIP) – UK and Overseas
Under the SIP, all employees with at least one year of service with the group and who are employed by a participating group company
are entitled to contribute up to 2.5% of basic pay each month, subject to a £125 per month limit. The SIP trustees buy shares
(partnership shares) at market value each month with the employees’ contributions. For each partnership share purchased, the group
purchases two shares (matching shares) which are allocated to the employee. In the UK SIP, if the employee sells or transfers partnership
shares within three years from the date of allocation, the linked matching shares are forfeited. In the Overseas SIP, partnership shares and
matching shares are subject to a three year holding period and cannot be sold or transferred during that time.
Notes on the Accounts
for the year ended 31st March 2012
Johnson Matthey Annual Report & Accounts 2012
Accounts

139
13 Share-based payments (continued)
401k approved savings investment plans (401k plans)
In the US there are two 401k plans, one for salaried employees and one for hourly employees. Salaried employees may contribute up to
50% of their base pay and hourly employees up to 20% of their base pay, both subject to a statutory limit. Salaried employees choosing
Johnson Matthey Plc shares matching are matched 100% of the first 4% contributed and hourly employees are matched 50% of the first
2% contributed. Employees may contribute after one month of service and are eligible for matching after one year of service.
Further details of the directors’ remuneration under share-based payment plans are given in the Remuneration Report on pages 108 to 117.
Options were exercised on a regular basis throughout the year. The average share price during the year was 1,943.04 pence
(2011 1,787.40 pence).
Activity relating to share options was:
2012 2012 2011 2011
Weighted Weighted
average average
exercise exercise
Number of price Number of price
options pence options pence
Outstanding at the start of the year 1,797,780 1,124.02 2,474,307 1,117.88
Forfeited during the year (15,063) 1,060.78 (24,299) 1,150.11
Exercised during the year (1,023,850) 1,087.59 (652,228) 1,099.75
Outstanding at the end of the year 758,867 1,174.42 1,797,780 1,124.02
Exercisable at the end of the year 758,867 1,174.42 1,797,780 1,124.02
Details of share options outstanding at the end of the year are:
2012 2012 2011 2011
Weighted Weighted
average average
Number of remaining life Number of remaining life
options years options years
Range of exercise price
800 pence to 900 pence 199,965 1.1 336,847 1.9
1,000 pence to 1,100 pence 15,335 3.3 710,930 3.9
1,200 pence to 1,300 pence 543,567 4.3 750,003 5.3
758,867 3.5 1,797,780 4.1
The fair value of the shares allocated during the year under the LTIP was 1,907.2 pence per share allocation (2011 1,523.6 pence per
share allocation). The fair value was based on the share price at the date of allocation of 2,040.0 pence (2011 1,636.0 pence) adjusted
for the present value of the expected dividends that will not be received at an expected dividend rate of 2.25% (2011 2.38%).
Activity relating to the LTIP was:
2012 2011
Number of Number of
allocated allocated
shares shares
Outstanding at the start of the year 2,402,541 2,176,594
Allocated during the year 937,850 849,617
Forfeited during the year (127,552) (50,844)
Released during the year (280,521) –
Expired during the year (256,077) (572,826)
Outstanding at the end of the year 2,676,241 2,402,541
252,092 (2011 266,614) matching shares under the SIP and 55,442 (2011 64,078) shares under the 401k plans were allocated to
employees during the year. They are nil cost awards on which performance conditions are substantially completed at the date of grant.
Consequently the fair value of these awards is based on the market value of the shares at that date.
The total expense recognised during the year in respect of equity settled share-based payments, taking into account expected lapses
due to leavers and the probability that EPS performance conditions will not be met, was £18.8 million (2011 £17.1 million).
Notes on the Accounts
for the year ended 31st March 2012

140
14 Post-employment benefits
14a Group
The group operates a number of post-employment benefits plans around the world, the forms and benefits of which vary with conditions
and practices in the countries concerned. The majority of the plans are defined benefit which require contributions to be made into
separately administered funds and retirement benefits are based on factors such as employees’ pensionable salary and length of service.
Some of the plans are defined contribution, where the retirement benefits are determined by the value of funds arising from contributions
paid in respect of each employee. The group also makes payments to employees’ personal pension plans. The amount recognised as an
expense for defined contribution plans was £6.9 million (2011 £6.0 million).
The major defined benefit plans are pension plans and post-retirement medical plans in the UK and the US. The UK pension plan is a
career average salary plan with a final salary section which was closed to future accrual of benefits from 1st April 2010. The US hourly
pension plan is a fixed benefit plan based upon years of service. The US salaried pension plan is a final salary plan. Full actuarial
valuations were carried out at 1st April 2009 for the UK pension plan and 30th June 2011 for the US pension plans and the valuations of
all of the UK and US plans were updated to 31st March 2012 by qualified independent actuaries.
The main assumptions were:
2012 2012 2012 2011 2011 2011
UK plans US plans Other plans UK plans US plans Other plans
% % % % % %
First 3 years rate of increase in salaries 3.40 3.40 3.21 4.50 3.75 3.17
Ultimate rate of increase in salaries 4.15 3.40 3.21 4.50 3.75 3.17
Rate of increase in pensions in payment 3.40 – 1.57 3.50 – 2.44
Discount rate 5.10 4.80 4.78 5.50 5.70 5.57
Inflation 2.75 1.76 2.75 2.06
– UK RPI 3.40 3.50
– UK CPI 2.70 3.00
Current medical benefits cost trend rate 5.40 7.78 – 7.70 8.06 –
Ultimate medical benefits cost trend rate 5.40 4.50 – 6.00 4.50 –
The group uses certain mortality assumptions when calculating plan obligations. The current mortality assumptions for all major plans
retain prudent allowance for future improvements in longevity and take account of experience.
The group’s largest plan is in the UK and for the purposes of calculating that plan’s pension liabilities as at 31st March 2012, the group
has used SAPS S1 mortality tables based on year of birth (as published by the Institute of Actuaries) for both pensioner and non-pensioner
members in conjunction with the results of an investigation into the actual mortality experience of plan members. In addition, to allow for
future improvements in longevity, the CMI 2011 tables (published by the Institute of Actuaries) have been used, with an assumed long
term rate of future annual mortality improvement of 1.25%.
The mortality tables used for the UK pension plan have been updated since 31st March 2011 following a mortality investigation. Last year
the group used PA92 mortality tables projected to calendar year 2009 (as published by the Institute of Actuaries) for both pensioner and
non-pensioner members. In addition, allowance for future improvements in longevity was made using the medium cohort projections with
a 1% underpin.
The mortality tables used for the other larger plans were:
US RP2000 projected to 2017 using Scale AA
Netherlands AG Prognosetafel 2005-2050 with one year age set back
Canada UP 94 generational (including allowance for future mortality improvements)
Germany RT2005 G
South Africa PA(90), rated down by two years
The expected future lifetime of average members currently at age 65 and average members at age 65 in 25 years time (i.e. members
who are currently aged 40 years) is respectively:
Currently age 65 Age 65 in 25 years
UK plan US plans UK plan US plans
Male 22.0 18.0 24.2 18.0
Female 24.8 19.9 27.2 19.9
Notes on the Accounts
for the year ended 31st March 2012
Johnson Matthey Annual Report & Accounts 2012
Accounts

141
14 Post-employment benefits (continued)
14a Group (continued)
A 1% point change in the assumed medical cost trend rates would have the following effects on:
1% point increase 1% point decrease
UK plan US plan UK plan US plan
£ million £ million £ million £ million
Post-retirement medical plan expense 0.1 0.4 (0.1) (0.3)
Post-retirement medical plan defined benefit obligation 1.6 4.6 (1.3) (3.7)
A 0.1% change in the discount rate and rate of increase in salaries would have the following increases / (decreases) on the pension
plans’ defined benefit obligations at 31st March 2012:
0.1% point increase 0.1% point decrease
UK plan US plans UK plan US plans
£ million £ million £ million £ million
Effect of discount rate (24.7) (3.0) 24.1 3.1
Effect of rate of increase in salaries 7.3 0.9 (7.3) (0.9)
A one year increase in life expectancy would have the following increase on:
UK plan US plans
£ million £ million
Pension defined benefit obligation 28.9 5.1
The fair values and expected rates of return for plan assets were:
UK pension US pensions Other
Expected rate Expected rate Expected rate
of return Value of return Value of return Value
% £ million % £ million % £ million
At 31st March 2012
Equities 7.10 430.7 7.70 86.3 8.57 5.7
Bonds 4.24 550.5 3.70 70.7 4.90 11.0
Property 5.40 47.4 – – – –
Insurance policies – – – – 4.36 24.0
5.49 1,028.6 5.90 157.0 5.09 40.7
At 31st March 2011
Equities 8.10 456.6 7.70 71.0 7.70 10.0
Bonds 5.20 472.6 5.00 63.0 5.19 7.5
Property 6.60 37.6 – – – –
Insurance policies – – – – 5.28 18.3
6.62 966.8 6.43 134.0 5.94 35.8
The defined benefit pension plans do not invest directly in Johnson Matthey Plc shares and no property or other assets owned by the
pension plans are used by the group. The overall expected rate of return is determined on a country by country basis by reference to
market expectations for each class of asset. It is based upon the forecasts of actuaries and market professionals.
Notes on the Accounts
for the year ended 31st March 2012

142
14 Post-employment benefits (continued)
14a Group (continued)
Movements in the fair value of the plan assets during the year were:
UK post- US post-
retirement retirement
UK medical US medical
pension benefits pensions benefits Other Total
£ million £ million £ million £ million £ million £ million
At 1st April 2010 886.7 – 122.5 – 36.0 1,045.2
Expected return on plan assets 60.2 – 8.3 – 1.9 70.4
Settlement losses – – – – (3.5) (3.5)
Actuarial gain 8.1 – 8.5 – 1.4 18.0
Employee contributions – – – – 0.3 0.3
Company contributions 45.1 0.3 6.2 0.6 1.9 54.1
Benefits paid (33.3) (0.3) (4.4) (0.6) (2.0) (40.6)
Exchange adjustments – – (7.1) – (0.2) (7.3)
At 31st March 2011 966.8 – 134.0 – 35.8 1,136.6
Expected return on plan assets 64.3 – 8.6 – 2.0 74.9
Settlement gains – – – – 0.9 0.9
Actuarial (loss) / gain (11.4) – 10.2 – 3.1 1.9
Employee contributions – – – – 0.3 0.3
Company contributions 44.7 0.5 8.5 0.7 2.1 56.5
Benefits paid (35.8) (0.5) (4.7) (0.7) (1.5) (43.2)
Exchange adjustments – – 0.4 – (2.0) (1.6)
At 31st March 2012 1,028.6 – 157.0 – 40.7 1,226.3
The actual return on plan assets for UK plans was £52.9 million (2011 £68.3 million) and for US plans was £18.8 million (2011 £16.8 million).
It is estimated that the group will contribute about £58 million to the post-employment defined benefits plans during the year ending
31st March 2013. The latest actuarial valuation of the group’s UK pension plan as at 1st April 2012 is underway and additional cash
contributions may be required once the valuation is complete.
Movements in the defined benefit obligation during the year were:
UK post- US post-
retirement retirement
UK medical US medical
pension benefits pensions benefits Other Total
£ million £ million £ million £ million £ million £ million
At 1st April 2010 (1,043.6) (14.4) (149.6) (28.5) (54.2) (1,290.3)
Current service cost – in operating profit (22.8) (0.1) (6.8) (0.9) (2.1) (32.7)
Current service cost – capitalised (0.1) – – – – (0.1)
Past service cost – vested (1.9) – – – – (1.9)
Past service cost – non-vested – – – 0.4 – 0.4
Interest cost (56.5) (0.8) (8.2) (1.6) (2.7) (69.8)
Curtailment gains – – – – 4.4 4.4
Settlement gains – – – – 3.5 3.5
Employee contributions – – – – (0.3) (0.3)
Actuarial gain / (loss) 64.2 2.5 (0.2) 2.6 (0.9) 68.2
Benefits paid 33.3 0.3 4.4 0.6 2.0 40.6
Exchange adjustments – – 8.3 1.6 0.7 10.6
At 31st March 2011 (1,027.4) (12.5) (152.1) (25.8) (49.6) (1,267.4)
Current service cost – in operating profit (23.0) (0.1) (6.9) (0.8) (1.7) (32.5)
Current service cost – capitalised (0.1) – – – – (0.1)
Past service cost – vested (0.2) – – – (0.1) (0.3)
Interest cost (55.5) (0.7) (8.5) (1.5) (2.6) (68.8)
Curtailment gains – – – – 0.2 0.2
Settlement losses – – – – (0.9) (0.9)
Employee contributions – – – – (0.3) (0.3)
Actuarial (loss) / gain (43.0) 1.1 (19.7) (3.3) (8.6) (73.5)
Benefits paid 35.8 0.5 4.7 0.7 1.5 43.2
Exchange adjustments – – (0.5) (0.1) 2.8 2.2
At 31st March 2012 (1,113.4) (11.7) (183.0) (30.8) (59.3) (1,398.2)
Notes on the Accounts
for the year ended 31st March 2012
Johnson Matthey Annual Report & Accounts 2012
Accounts

143
14 Post-employment benefits (continued)
14a Group (continued)
Movements in the reimbursement rights during the year were:
UK post- US post-
retirement retirement
UK medical US medical
pension benefits pensions benefits Other Total
£ million £ million £ million £ million £ million £ million
At 1st April 2010 – – – 5.5 0.6 6.1
Expected return – – – 0.5 – 0.5
Actuarial loss – – – (0.8) – (0.8)
Company contributions – – – – 0.1 0.1
Exchange adjustments – – – (0.3) – (0.3)
At 31st March 2011 – – – 4.9 0.7 5.6
Expected return – – – 0.5 – 0.5
Actuarial gain – – – 1.0 – 1.0
At 31st March 2012 – – – 6.4 0.7 7.1
Amounts recognised in the income statement in respect of these plans were:
UK post- US post-
retirement retirement
UK medical US medical
pension benefits pensions benefits Other Total
£ million £ million £ million £ million £ million £ million
Year ended 31st March 2012
Current service cost (23.0) (0.1) (6.9) (0.8) (1.7) (32.5)
Interest on plan liabilities (55.5) (0.7) (8.5) (1.5) (2.6) (68.8)
Expected return on plan assets 64.3 – 8.6 – 2.0 74.9
Expected return on reimbursement rights – – – 0.5 – 0.5
Curtailment gains – – – – 0.2 0.2
Past service cost ─ vested (0.2) – – – (0.1) (0.3)
Past service cost ─ non-vested – – – 0.6 – 0.6
Charge to income (14.4) (0.8) (6.8) (1.2) (2.2) (25.4)
Year ended 31st March 2011
Current service cost (22.8) (0.1) (6.8) (0.9) (2.1) (32.7)
Interest on plan liabilities (56.5) (0.8) (8.2) (1.6) (2.7) (69.8)
Expected return on plan assets 60.2 – 8.3 – 1.9 70.4
Expected return on reimbursement rights – – – 0.5 – 0.5
Curtailment gains – – – – 4.4 4.4
Past service cost ─ vested (1.9) – – – – (1.9)
Past service cost ─ non-vested – – – 0.8 – 0.8
Charge to income (21.0) (0.9) (6.7) (1.2) 1.5 (28.3)
Of the total charge for the year, £15.3 million (2011 £20.7 million) has been included within cost of sales, £3.0 million (2011 £4.9 million)
in distribution costs, £7.1 million (2011 £5.9 million) in administrative expenses and a credit of £ nil (2011 £3.2 million) in major impairment
and restructuring charges.
Notes on the Accounts
for the year ended 31st March 2012

144
14 Post-employment benefits (continued)
14a Group (continued)
The net post-employment benefits assets and liabilities shown in the balance sheet are analysed as:
UK post- US post-
retirement retirement
UK medical US medical
pension benefits pensions benefits Other Total
£ million £ million £ million £ million £ million £ million
At 31st March 2012
Present value of funded obligations (1,113.4) – (183.0) – (45.0) (1,341.4)
Present value of unfunded obligations – (11.7) – (30.8) (14.3) (56.8)
Defined benefit obligation (1,113.4) (11.7) (183.0) (30.8) (59.3) (1,398.2)
Fair value of plan assets 1,028.6 – 157.0 – 40.7 1,226.3
Reimbursement rights – – – 6.4 0.7 7.1
Unrecognised past service credit − non-vested – – – (2.3) – (2.3)
Net post-employment benefits assets and liabilities (84.8) (11.7) (26.0) (26.7) (17.9) (167.1)
At 31st March 2011
Present value of funded obligations (1,027.4) – (152.1) – (37.8) (1,217.3)
Present value of unfunded obligations – (12.5) – (25.8) (11.8) (50.1)
Defined benefit obligation (1,027.4) (12.5) (152.1) (25.8) (49.6) (1,267.4)
Fair value of plan assets 966.8 – 134.0 – 35.8 1,136.6
Reimbursement rights – – – 4.9 0.7 5.6
Unrecognised past service credit − non-vested – – – (2.9) – (2.9)
Net post-employment benefits assets and liabilities (60.6) (12.5) (18.1) (23.8) (13.1) (128.1)
These are included in the balance sheet as:
2012 2012 2012 2011 2011 2011
Post- Post-
employment Employee employment Employee
benefits benefits benefits benefits
net assets obligations Total net assets obligations Total
£ million £ million £ million £ million £ million £ million
UK pension plan – (84.8) (84.8) – (60.6) (60.6)
UK post-retirement medical benefits plan – (11.7) (11.7) – (12.5) (12.5)
US pension plans – (26.0) (26.0) – (18.1) (18.1)
US post-retirement medical benefits plan – (26.7) (26.7) – (23.8) (23.8)
Other plans 2.0 (19.9) (17.9) 3.8 (16.9) (13.1)
Total post-employment plans 2.0 (169.1) (167.1) 3.8 (131.9) (128.1)
Other long term employee benefits (2.3) (2.3)
Total long term employee benefits obligations (171.4) (134.2)
The cumulative amount of actuarial gains / (losses) recognised in the statement of total comprehensive income were:
UK post- US post-
retirement retirement
UK medical US medical
pension benefits pensions benefits Other Total
£ million £ million £ million £ million £ million £ million
At 1st April 2010 (249.0) (2.2) (34.7) (3.2) (4.8) (293.9)
Recognised in year 72.3 2.5 8.3 1.8 0.5 85.4
At 31st March 2011 (176.7) 0.3 (26.4) (1.4) (4.3) (208.5)
Recognised in year (54.4) 1.1 (9.5) (2.3) (5.5) (70.6)
At 31st March 2012 (231.1) 1.4 (35.9) (3.7) (9.8) (279.1)
Notes on the Accounts
for the year ended 31st March 2012
Johnson Matthey Annual Report & Accounts 2012
Accounts

145
14 Post-employment benefits (continued)
14a Group (continued)
History of the plans and experience adjustments are:
UK post- US post-
retirement retirement
UK medical US medical
pension benefits pensions benefits Other Total
£ million £ million £ million £ million £ million £ million
Year ended 31st March 2012
Present value of defined benefit obligation (1,113.4) (11.7) (183.0) (30.8) (59.3) (1,398.2)
Fair value of plan assets 1,028.6 – 157.0 – 40.7 1,226.3
Reimbursement rights – – – 6.4 0.7 7.1
Deficit in the plan (84.8) (11.7) (26.0) (24.4) (17.9) (164.8)
Experience adjustments arising on plan liabilities – 0.3 0.7 (3.3) (3.0) (5.3)
Experience adjustments arising on plan assets (11.4) – 10.2 – 3.1 1.9
Year ended 31st March 2011
Present value of defined benefit obligation (1,027.4) (12.5) (152.1) (25.8) (49.6) (1,267.4)
Fair value of plan assets 966.8 – 134.0 – 35.8 1,136.6
Reimbursement rights – – – 4.9 0.7 5.6
Deficit in the plan (60.6) (12.5) (18.1) (20.9) (13.1) (125.2)
Experience adjustments arising on plan liabilities 2.7 (0.2) (0.2) 3.3 0.6 6.2
Experience adjustments arising on plan assets 8.1 – 8.5 – 1.4 18.0
Year ended 31st March 2010
Present value of defined benefit obligation (1,043.6) (14.4) (149.6) (28.5) (54.2) (1,290.3)
Fair value of plan assets 886.7 – 122.5 – 36.0 1,045.2
Reimbursement rights – – – 5.5 0.6 6.1
Deficit in the plan (156.9) (14.4) (27.1) (23.0) (17.6) (239.0)
Experience adjustments arising on plan liabilities (5.2) 1.2 (2.1) 0.4 (0.2) (5.9)
Experience adjustments arising on plan assets 173.4 – 19.8 – 1.9 195.1
Year ended 31st March 2009
Present value of defined benefit obligation (715.6) (12.0) (128.3) (26.7) (45.3) (927.9)
Fair value of plan assets 670.4 – 77.9 – 29.4 777.7
Reimbursement rights – – – 4.5 – 4.5
Deficit in the plan (45.2) (12.0) (50.4) (22.2) (15.9) (145.7)
Experience adjustments arising on plan liabilities 24.4 (0.6) 0.9 (1.0) 0.3 24.0
Experience adjustments arising on plan assets (191.2) – (32.4) – (3.8) (227.4)
Year ended 31st March 2008
Present value of defined benefit obligation (744.4) (10.9) (86.4) (15.6) (39.0) (896.3)
Fair value of plan assets 809.5 – 78.5 – 27.1 915.1
Reimbursement rights – – – 2.6 – 2.6
Surplus / (deficit) in the plan 65.1 (10.9) (7.9) (13.0) (11.9) 21.4
Experience adjustments arising on plan liabilities (3.0) – 5.9 1.8 (0.4) 4.3
Experience adjustments arising on plan assets (87.7) – (6.9) – (2.8) (97.4)
Notes on the Accounts
for the year ended 31st March 2012

146
14 Post-employment benefits (continued)
14b Parent company
The parent company is the sponsoring employer of the group’s UK defined benefit pension plan and the UK post-retirement medical
benefits plan. There is no contractual agreement or stated policy for charging the net defined benefit cost for the plan to the individual
group entities. The main assumptions used for these plans are disclosed in note 14a.
The fair values and expected rates of return for defined benefit pension plan assets were:
2012 2012 2011 2011
Expected rate Expected rate
of return Value of return Value
% £ million % £ million
Equities 7.10 430.7 8.10 456.6
Bonds 4.24 550.5 5.20 472.6
Property 5.40 47.4 6.60 37.6
5.49 1,028.6 6.62 966.8
The defined benefit pension plan does not invest directly in Johnson Matthey Plc shares and no property or other assets owned by the
pension plan are used by the company. The overall expected rate of return is determined by reference to market expectations for each
class of asset. It is based upon the forecasts of actuaries and market professionals.
Movements in the fair value of the plan assets during the year were:
2012 2012 2011 2011
Post- Post-
retirement retirement
medical medical
Pension benefits Pension benefits
£ million £ million £ million £ million
At beginning of year 966.8 – 886.7 –
Expected return on plan assets 64.3 – 60.2 –
Actuarial (loss) / gain (11.4) – 8.1 –
Company contributions 44.7 0.5 45.1 0.3
Benefits paid (35.8) (0.5) (33.3) (0.3)
At end of year 1,028.6 – 966.8 –
The actual return on plan assets was £52.9 million (2011 £68.3 million). It is estimated that the company will contribute about £42 million
(and its subsidiaries will also contribute about £6 million) to the company’s post-employment defined benefits plans during the year
ending 31st March 2013. The latest actuarial valuation of the company’s pension plan as at 1st April 2012 is underway and additional
cash contributions may be required once the valuation is complete.
Movements in the defined benefit obligation during the year were:
2012 2012 2011 2011
Post- Post-
retirement retirement
medical medical
Pension benefits Pension benefits
£ million £ million £ million £ million
At beginning of year (1,027.4) (12.5) (1,043.6) (14.4)
Current service cost – in operating profit (23.0) (0.1) (22.8) (0.1)
Current service cost – capitalised (0.1) – (0.1) –
Past service cost – vested (0.2) – (1.9) –
Interest cost (55.5) (0.7) (56.5) (0.8)
Actuarial (loss) / gain (43.0) 1.1 64.2 2.5
Benefits paid 35.8 0.5 33.3 0.3
At end of year (1,113.4) (11.7) (1,027.4) (12.5)
Notes on the Accounts
for the year ended 31st March 2012
Johnson Matthey Annual Report & Accounts 2012
Accounts

147
14 Post-employment benefits (continued)
14b Parent company (continued)
The net post-employment benefits assets and liabilities shown in the balance sheet are analysed as:
2012 2012 2011 2011
Post- Post-
retirement retirement
medical medical
Pension benefits Pension benefits
£ million £ million £ million £ million
Present value of funded obligations (1,113.4) – (1,027.4) –
Present value of unfunded obligations – (11.7) – (12.5)
Defined benefit obligation (1,113.4) (11.7) (1,027.4) (12.5)
Fair value of plan assets 1,028.6 – 966.8 –
Net retirement benefits assets and liabilities (84.8) (11.7) (60.6) (12.5)
These are included in the balance sheet under employee benefits obligations as:
2012 2011
£ million £ million
Pension plan (84.8) (60.6)
Post-retirement medical benefits plan (11.7) (12.5)
Total post-employment plans (96.5) (73.1)
Other long term employee benefits (0.1) (0.1)
Total long term employee benefits obligations (96.6) (73.2)
The cumulative amount of actuarial gains / (losses) recognised in the statement of changes in equity were:
2012 2012 2011 2011
Post- Post-
retirement retirement
medical medical
Pension benefits Pension benefits
£ million £ million £ million £ million
At beginning of year (178.1) 0.3 (250.4) (2.2)
Recognised in year (54.4) 1.1 72.3 2.5
At end of year (232.5) 1.4 (178.1) 0.3
History of the plans and experience adjustments are:
Present Experience Experience
value of Surplus / adjustments adjustments
defined benefit Fair value of (deficit) arising on arising on
obligation plan assets in plan plan liabilities plan assets
£ million £ million £ million £ million £ million
Year ended 31st March 2012
Pension (1,113.4) 1,028.6 (84.8) – (11.4)
Post-retirement medical benefits (11.7) – (11.7) 0.3 –
Year ended 31st March 2011
Pension (1,027.4) 966.8 (60.6) 2.7 8.1
Post-retirement medical benefits (12.5) – (12.5) (0.2) –
Year ended 31st March 2010
Pension (1,043.6) 886.7 (156.9) (5.2) 173.4
Post-retirement medical benefits (14.4) – (14.4) 1.2 –
Year ended 31st March 2009
Pension (715.6) 670.4 (45.2) 24.4 (191.2)
Post-retirement medical benefits (12.0) – (12.0) (0.6) –
Year ended 31st March 2008
Pension (744.4) 809.5 65.1 (3.0) (87.7)
Post-retirement medical benefits (10.9) – (10.9) – –
Notes on the Accounts
for the year ended 31st March 2012

148
15 Property, plant and equipment
15a Group
Assets in
Freehold land Long & short Plant & the course of
& buildings leasehold machinery construction Total
£ million £ million £ million £ million £ million
Cost
At 1st April 2010 416.0 22.7 1,190.7 51.9 1,681.3
Additions 5.4 1.7 51.7 61.3 120.1
Acquisitions (restated) (note 39) 4.4 – 15.3 0.7 20.4
Reclassifications 11.9 0.7 37.6 (50.2) –
Disposals (7.2) (0.1) (35.4) – (42.7)
Exchange adjustments (restated) (4.4) (0.4) (18.0) (1.3) (24.1)
At 31st March 2011 (restated) 426.1 24.6 1,241.9 62.4 1,755.0
Additions 5.8 0.4 53.7 77.0 136.9
Reclassifications 8.6 0.1 36.7 (45.4) –
Disposals (1.8) (0.1) (72.9) (8.3) (83.1)
Exchange adjustments (6.4) (0.9) (22.0) (2.5) (31.8)
At 31st March 2012 432.3 24.1 1,237.4 83.2 1,777.0
Accumulated depreciation and impairment
At 1st April 2010 116.7 9.8 633.2 – 759.7
Charge for the year 14.5 2.7 91.1 – 108.3
Impairment losses 0.5 3.6 23.2 – 27.3
Disposals (3.3) (0.1) (32.8) – (36.2)
Exchange adjustments (1.6) – (10.2) – (11.8)
At 31st March 2011 126.8 16.0 704.5 – 847.3
Charge for the year 14.5 0.9 93.1 – 108.5
Impairment losses – 1.4 1.6 – 3.0
Reversal of impairment losses – – (2.8) – (2.8)
Disposals (1.5) – (69.8) – (71.3)
Exchange adjustments (1.6) (0.7) (14.9) – (17.2)
At 31st March 2012 138.2 17.6 711.7 – 867.5
Carrying amount at 31st March 2012 294.1 6.5 525.7 83.2 909.5
Carrying amount at 31st March 2011 (restated) 299.3 8.6 537.4 62.4 907.7
Carrying amount at 1st April 2010 299.3 12.9 557.5 51.9 921.6
The carrying amount of plant and machinery includes £1.6 million (2011 £1.9 million) in respect of assets held under finance leases.
Compensation received for impaired or lost property, plant and equipment was £3.0 million (2011 £ nil).
Finance costs capitalised were £0.7 million (2011 £0.5 million) and the capitalisation rate used to determine the amount of finance costs
eligible for capitalisation was 4.4% (2011 5.6%).
The impairment losses for freehold land and buildings of £ nil (2011 £0.5 million) have been included in major impairment and
restructuring charges (note 3). Of the impairment losses for long and short leaseholds in the year £0.3 million (2011 £ nil) have been
included in cost of sales, £0.7 million (2011 £ nil) in administrative expenses and £0.4 million (2011 £3.6 million) in major impairment and
restructuring charges (note 3). Of the impairment losses for plant and machinery £1.0 million (2011 £0.1 million) have been included in
administrative expenses, £0.6 million in cost of sales (2011 £0.7 million) and £ nil (2011 £22.4 million) in major impairment and restructuring
charges (note 3). Impairment losses of £0.6 million, £1.0 million and £1.4 million are included in the underlying operating profit of
Environmental Technologies, Precious Metal Products and Fine Chemicals respectively and arose as the assets have become idle.
Of the reversal of impairment losses for plant and machinery, £2.1 million (2011 £ nil) is included in major impairment and restructuring
charges and relates to assets impaired in the year ended 31st March 2011 as part of the closure of the Brussels autocatalyst facility (note 3),
which were subsequently transferred to other group companies or sold. £0.7 million (2011 £ nil) is included in cost of sales and relates to
assets impaired in the year ended 31st March 2011 as they were damaged in the Japanese earthquake in March 2011 and were thought
to be beyond repair, but have subsequently been able to be repaired. These are included in Environmental Technologies’ underlying
operating profit.
Notes on the Accounts
for the year ended 31st March 2012
Johnson Matthey Annual Report & Accounts 2012
Accounts

149
15 Property, plant and equipment (continued)
15b Parent company
Assets in
Freehold land Long & short Plant & the course of
& buildings leasehold machinery construction Total
£ million £ million £ million £ million £ million
Cost
At 1st April 2010 96.4 0.2 346.2 2.0 444.8
Additions 2.5 0.9 22.3 2.8 28.5
Reclassifications – – 2.7 (2.7) –
Disposals (4.7) (0.1) (4.3) – (9.1)
At 31st March 2011 94.2 1.0 366.9 2.1 464.2
Additions 3.1 – 25.0 5.5 33.6
Reclassifications – – 4.0 (4.0) –
Disposals (1.3) – (3.8) (0.2) (5.3)
At 31st March 2012 96.0 1.0 392.1 3.4 492.5
Accumulated depreciation and impairment
At 1st April 2010 32.4 0.1 167.0 – 199.5
Charge for the year 2.6 0.1 27.2 – 29.9
Impairment losses 0.5 – 7.6 – 8.1
Disposals (0.8) (0.1) (3.2) – (4.1)
At 31st March 2011 34.7 0.1 198.6 – 233.4
Charge for the year 2.7 – 25.3 – 28.0
Disposals (1.1) – (3.5) – (4.6)
At 31st March 2012 36.3 0.1 220.4 – 256.8
Carrying amount at 31st March 2012 59.7 0.9 171.7 3.4 235.7
Carrying amount at 31st March 2011 59.5 0.9 168.3 2.1 230.8
Carrying amount at 1st April 2010 64.0 0.1 179.2 2.0 245.3
The carrying amount of plant and machinery includes £1.5 million (2011 £1.8 million) in respect of assets held under finance leases.
Notes on the Accounts
for the year ended 31st March 2012

150
16 Goodwill
Parent
Group company
£ million £ million
Cost
At 1st April 2010 513.8 110.5
Acquisitions (restated) (note 39) 20.0 –
Adjustments to consideration of prior year’s acquisitions (0.1) –
Exchange adjustments (5.0) –
At 31st March 2011 (restated) 528.7 110.5
Exchange adjustments (9.2) –
At 31st March 2012 519.5 110.5
Impairment
At 1st April 2010, 31st March 2011 and 31st March 2012 – –
Carrying amount at 31st March 2012 519.5 110.5
Carrying amount at 31st March 2011 (restated) 528.7 110.5
Carrying amount at 1st April 2010 513.8 110.5
Goodwill arising on the acquisition of businesses is allocated, at acquisition, to the cash-generating units (CGUs) that are expected to
benefit from that business combination. Goodwill is allocated as follows:
Group Parent company
2012 2011 2012 2011
restated
£ million £ million £ million £ million
Environmental Technologies
Emission Control Technologies ─ Non-light Duty Catalysts 84.4 89.2 – –
Process Technologies 245.3 249.4 110.5 110.5
Precious Metal Products
Catalysts and Chemicals 24.8 24.9 – –
Other 5.6 5.8 – –
Fine Chemicals
Macfarlan Smith 117.1 117.1 – –
Pharmaceutical Materials and Services 20.7 20.7 – –
Research Chemicals 21.6 21.6 – –
519.5 528.7 110.5 110.5
The group and parent company test goodwill annually for impairment, or more frequently if there are indications that goodwill might be
impaired. The recoverable amounts of the CGUs are determined using value in use calculations which use cash flow projections based
on financial budgets and plans approved by management, generally covering a three year period except as discussed below. The
budgets and plans are based on a number of key assumptions. Assumptions on the likelihood and timing of new product launches are
based on management’s best estimate of what may happen. Foreign exchange rates are based on actual rates at the time the budgets
were prepared and are held constant over the budget and plan years. Other assumptions such as market share, expected changes to
selling prices, product profitability, precious metal prices and other direct input costs are based on past experience and management’s
expectations of future changes in the markets using external sources of information where appropriate. These cash flows are then
extrapolated using the long term average growth rates for the relevant products, industries and countries in which the CGUs operate.
The cash flows are discounted at the group’s estimated pre-tax weighted average cost of capital adjusted for the estimated tax cash
flows and risk applicable to each CGU.
For the Non-light Duty Catalysts CGU five (2011 four) year plans have been approved by management. Over the next decade
management expects the markets for heavy duty diesel catalysts and stationary emissions catalysts will continue to grow significantly,
based on emission control legislation already in place or anticipated, as described on pages 30 and 31 of the Financial Review of
Operations, although some of this growth is now included in the five year plan. Therefore the cash flow projections have been
extrapolated using a long term average growth rate of 12% for years 6 to 10 (2011 20% for years 5 to 10) and 4% (2011 3%) after that.
The discount rate used was 12.3% (2011 10.4%). The impairment test results in headroom of 40% over the carrying value of the CGU’s
net assets and so it is unlikely that a reasonably possible change in a key assumption would result in an impairment of goodwill.
Notes on the Accounts
for the year ended 31st March 2012
Johnson Matthey Annual Report & Accounts 2012
Accounts

151
16 Goodwill (continued)
For Process Technologies the long term average growth rate used was 5% (2011 5%) and the discount rate was 12.0% (2011 10.1%).
For Catalysts and Chemicals the long term average growth rate used was 4.7% (2011 5%) and the discount rate was 12.0% (2011 10.1%).
For Macfarlan Smith the long term average growth rate used was 2.5% (2011 2.5%) and the discount rate was 8.0% (2011 7.6%). For
Pharmaceutical Materials and Services the long term average growth rate used was 4% (2011 4%) and the discount rate was 8.3%
(2011 7.4%). For Research Chemicals the long term average growth rate used was 5% (2011 5%) and the discount rate was 9.2%
(2011 8.3%). These impairment tests all result in headroom of over of 100%, except for Macfarlan Smith which is over 80%, and so it
is unlikely that a reasonably possible change in a key assumption would result in an impairment of goodwill.
17 Other intangible assets
17a Group
Customer Patents, Acquired
contracts and Computer trademarks research and Development
relationships software and licences technology expenditure Total
£ million £ million £ million £ million £ million £ million
Cost
At 1st April 2010 51.9 49.4 19.6 21.6 85.8 228.3
Additions – 4.7 0.1 – 13.0 17.8
Acquisitions (restated) (note 39) 22.1 – 9.2 3.8 – 35.1
Disposals – (0.1) – – – (0.1)
Exchange adjustments (restated) (0.5) (0.5) 0.1 (0.2) (1.6) (2.7)
At 31st March 2011 (restated) 73.5 53.5 29.0 25.2 97.2 278.4
Additions – 3.5 0.1 – 9.1 12.7
Disposals – (2.5) – – – (2.5)
Exchange adjustments (2.4) (1.5) (0.5) (1.1) (1.2) (6.7)
At 31st March 2012 71.1 53.0 28.6 24.1 105.1 281.9
Accumulated amortisation and impairment
At 1st April 2010 21.8 36.0 6.1 – 32.8 96.7
Charge for the year (restated) 11.3 4.3 3.2 0.1 9.6 28.5
Impairment losses – 0.4 – 0.9 0.6 1.9
Disposals – (0.1) – – – (0.1)
Exchange adjustments – (0.6) – – (0.9) (1.5)
At 31st March 2011 (restated) 33.1 40.0 9.3 1.0 42.1 125.5
Charge for the year 13.0 4.0 3.6 1.2 12.5 34.3
Disposals – (2.5) – – – (2.5)
Exchange adjustments (1.5) (0.9) (0.3) – (0.5) (3.2)
At 31st March 2012 44.6 40.6 12.6 2.2 54.1 154.1
Carrying amount at 31st March 2012 26.5 12.4 16.0 21.9 51.0 127.8
Carrying amount at 31st March 2011 40.4 13.5 19.7 24.2 55.1 152.9
Carrying amount at 1st April 2010 30.1 13.4 13.5 21.6 53.0 131.6
The carrying amount of development expenditure includes £29.8 million (2011 £23.9 million) which is not yet being amortised as the
assets are not yet available for use. The carrying amount of acquired research and technology includes £2.4 million (2011 £23.9 million)
which is not yet being amortised as the assets are not yet available for use. These assets are tested for impairment annually.
The impairment losses for computer software of £ nil (2011 £0.4 million) have been included in major impairment and restructuring
charges (note 3). The impairment losses for acquired research and technology of £ nil (2011 £0.9 million) have been included in
amortisation of acquired intangibles (note 4). The impairment losses for development expenditure of £ nil (2011 £0.6 million) have been
included in administrative expenses.
Notes on the Accounts
for the year ended 31st March 2012

152
17 Other intangible assets (continued)
17b Parent company
Computer Development
software expenditure Total
£ million £ million £ million
Cost
At 1st April 2010 14.4 8.0 22.4
Additions 0.8 1.0 1.8
At 31st March 2011 15.2 9.0 24.2
Additions 1.2 – 1.2
Disposals (1.0) – (1.0)
At 31st March 2012 15.4 9.0 24.4
Accumulated amortisation and impairment
At 1st April 2010 12.1 4.0 16.1
Charge for the year 1.1 0.6 1.7
At 31st March 2011 13.2 4.6 17.8
Charge for the year 1.0 1.2 2.2
Disposals (1.0) – (1.0)
At 31st March 2012 13.2 5.8 19.0
Carrying amount at 31st March 2012 2.2 3.2 5.4
Carrying amount at 31st March 2011 2.0 4.4 6.4
Carrying amount at 1st April 2010 2.3 4.0 6.3
18 Investments in subsidiaries
Cost of
investments in Accumulated Carrying
subsidiaries impairment amount
£ million £ million £ million
At 1st April 2010 1,703.9 (185.2) 1,518.7
Capital reduction of subsidiary (11.6) – (11.6)
Impairment loss – (0.9) (0.9)
At 31st March 2011 1,692.3 (186.1) 1,506.2
Additional shares issued by subsidiary 40.0 – 40.0
At 31st March 2012 1,732.3 (186.1) 1,546.2
The principal subsidiaries are shown in note 42.
19 Non-current available-for-sale investments
2012 2011
£ million £ million
Unquoted investments 8.0 8.0
Notes on the Accounts
for the year ended 31st March 2012
Johnson Matthey Annual Report & Accounts 2012
Accounts

153
20 Inventories
Group Parent company
2012 2011 2012 2011
£ million £ million £ million £ million
Raw materials and consumables 154.8 136.2 31.6 28.5
Work in progress 229.1 200.9 87.3 79.2
Finished goods and goods for resale 246.9 219.2 45.5 47.1
630.8 556.3 164.4 154.8
The group also holds customers’ materials in the process of refining and fabrication and for other reasons.
21 Trade and other receivables
Group Parent company
2012 2011 2012 2011
restated
£ million £ million £ million £ million
Current
Trade receivables 690.3 764.2 139.4 214.1
Amounts receivable from long term contract customers 12.3 13.0 – –
Amounts receivable from subsidiaries – – 827.7 555.8
Prepayments and accrued income 68.7 34.2 34.5 8.9
Value added tax and other sales tax receivable 31.5 29.0 3.9 3.2
Other receivables 44.3 52.8 4.1 11.3
Current trade and other receivables 847.1 893.2 1,009.6 793.3
Non-current
Amounts receivable from subsidiaries – – 387.6 523.9
Prepayments and accrued income 2.9 2.9 0.1 0.1
Other receivables 0.1 0.1 – –
Non-current trade and other receivables 3.0 3.0 387.7 524.0
22 Trade and other payables
Group Parent company
2012 2011 2012 2011
restated
£ million £ million £ million £ million
Current
Trade payables 344.7 313.8 103.6 111.3
Amounts payable to long term contract customers 80.4 46.7 – –
Amounts payable to subsidiaries – – 1,206.9 956.3
Accruals and deferred income 222.8 244.5 77.7 76.0
Other payables 62.8 57.9 166.2 142.7
Current trade and other payables 710.7 662.9 1,554.4 1,286.3
Non-current
Amounts payable to subsidiaries – – 22.6 –
Accruals and deferred income 1.7 2.5 – 0.2
Other payables 2.6 2.3 0.7 –
Non-current trade and other payables 4.3 4.8 23.3 0.2
Notes on the Accounts
for the year ended 31st March 2012

154
23 Long term contracts
2012 2011
£ million £ million
Contract revenue recognised 117.1 75.7
Contracts in progress at the year end:
Costs incurred plus recognised profits less recognised losses in the year 116.4 69.3
Costs incurred plus recognised profits less recognised losses to date 244.9 241.4
Amount of advances received 73.6 42.2
24 Net debt
Group Parent company
2012 2011 2012 2011
£ million £ million £ million £ million
Non-current borrowings, finance leases and related swaps
Bank, other loans and related swaps
4.66% Euro Bonds 2021 83.3 88.4 83.3 88.4
5.67% US Dollar Bonds 2016 110.9 106.2 110.9 106.2
4.95% US Dollar Bonds 2015 135.8 133.8 135.8 133.8
4.987% Euro European Investment Bank (EIB) loan 2013 104.2 110.7 104.2 110.7
5.55% US Dollar Bonds 2013 62.6 62.4 62.6 62.4
5.17% Sterling Bonds 2013 – 40.0 – 40.0
Cross currency interest rate swaps designated as cash flow hedges 0.3 0.3 0.3 0.3
Other repayable from two to three years – 31.5 – 31.2
Other repayable from one to two years 31.5 0.3 31.3 –
Finance leases repayable
After five years 0.2 0.6 0.2 0.6
From four to five years 0.4 0.4 0.4 0.4
From three to four years 0.4 0.4 0.4 0.4
From two to three years 0.4 0.4 0.4 0.3
From one to two years 0.4 0.3 0.3 0.3
Non-current borrowings, finance leases and related swaps 530.4 575.7 530.1 575.0
Current borrowings and finance leases
5.17% Sterling Bonds 2013 40.0 – 40.0 –
Other bank and other loans 16.1 181.5 – 146.5
Finance leases 0.3 0.3 0.3 0.3
Current borrowings and finance leases excluding bank overdrafts 56.4 181.8 40.3 146.8
Bank overdrafts 35.8 24.5 65.9 74.1
Current borrowings and finance leases 92.2 206.3 106.2 220.9
Total borrowings and finance leases 622.6 782.0 636.3 795.9
Less interest rate swaps designated as fair value hedges 29.3 23.7 29.3 23.7
Less cash and deposits 139.1 118.9 78.0 23.1
Net debt 454.2 639.4 529.0 749.1
Of the 4.95% US Dollar Bonds 2015, US $35.0 million have been swapped into sterling at 5.15% and US $165.0 million have been
swapped into floating rate US dollars. All the 5.67% US Dollar Bonds 2016 have been swapped into floating rate US dollars. The interest
rate implicit in the finance leases is 5.9% and the lease term ends in 2017. Apart from the bonds, EIB loans and finance leases shown
separately above, all the loans, overdrafts and bank deposits are denominated in various currencies and bear interest at commercial
floating rates.
Notes on the Accounts
for the year ended 31st March 2012
Johnson Matthey Annual Report & Accounts 2012
Accounts

155
25 Other financial assets
Group Parent company
2012 2011 2012 2011
£ million £ million £ million £ million
Forward foreign exchange contracts and options designated as cash flow hedges 7.0 3.3 7.1 3.8
Forward foreign exchange contracts and currency swaps held for trading 3.1 1.9 2.9 2.0
Foreign exchange swaps designated as hedges of a net investment in
foreign operations 0.3 0.3 – –
Embedded derivatives 1.2 1.4 1.2 1.4
11.6 6.9 11.2 7.2
Of the other financial assets listed above, all are measured at fair value using observable inputs (level 2 inputs per IFRS 7’s fair value
hierarchy) except for certain embedded derivatives which are valued based on both observable and unobservable inputs (level 3 inputs).
The reconciliation of other financial assets valued using level 3 inputs is:
Parent
Group company
£ million £ million
At 1st April 2010 1.2 1.2
Gains recognised in cost of sales 5.1 5.1
Settlements (4.9) (4.9)
At 31st March 2011 1.4 1.4
Gains recognised in cost of sales 4.8 4.8
Settlements (5.0) (5.0)
At 31st March 2012 1.2 1.2
There were no transfers between the levels of IFRS 7’s fair value hierarchy during the year.
26 Other financial liabilities
Group Parent company
2012 2011 2012 2011
£ million £ million £ million £ million
Forward foreign exchange contracts and options designated as cash flow hedges 0.6 3.1 1.6 5.3
Forward foreign exchange contracts and currency swaps held for trading 3.9 2.0 3.2 2.5
Foreign exchange swaps designated as hedges of a net investment in
foreign operations – 1.4 – –
4.5 6.5 4.8 7.8
All other financial liabilities are measured at fair value using observable inputs (level 2 inputs per IFRS 7’s fair value hierarchy).
27 Financial risk management
The group’s and parent company’s activities expose them to a variety of financial risks including market risk, liquidity risk and credit risk.
Market risk includes currency risk, interest rate risk and price risk. The main financial risks managed by the group and parent company,
under policies approved by the board, are foreign currency risk, interest rate risk, liquidity risk and credit risk. The group and parent
company use derivative financial instruments, in particular forward currency contracts and currency swaps, to manage their financial risks
associated with their underlying business activities and the financing of those activities. Some derivative financial instruments used to
manage financial risk are not designated as hedges and so are classified as ‘held for trading’. The group and parent company do not
undertake any speculative trading activity in financial instruments.
Notes on the Accounts
for the year ended 31st March 2012

156
27 Financial risk management (continued)
27a Foreign currency risk
The group operates globally with a significant amount of its profit earned outside the UK. In order to protect the group’s sterling balance
sheet and reduce cash flow risk the group has financed most of its investment in the USA and Europe by borrowing US dollars and euros
respectively. Although much of this funding is obtained by directly borrowing the relevant currency, a part is achieved through currency
swaps which can be more efficient and reduce costs. To a lesser extent the group has also financed a portion of its investment in China,
Japan and South Africa using currency borrowings and swaps. The group has designated the currency swaps and two euro loans (fair
value of the loans was £202.0 million (2011 £205.1 million)) as hedges of net investments in foreign operations as they hedge the
changes in values of the subsidiaries’ net assets against movements in exchange rates.
The main currencies of the net debt after taking into account the effect of the currency swaps were:
Group Group Parent company Parent company
Borrowings Borrowings Cash Cash Borrowings Borrowings Cash Cash
2012 2011 2012 2011 2012 2011 2012 2011
£ million £ million £ million £ million £ million £ million £ million £ million
Sterling 220.4 338.3 394.9 497.7 240.2 338.4 390.6 496.9
US dollar 424.3 509.2 75.9 95.2 421.9 499.1 69.4 86.6
Euro 372.8 500.8 38.1 72.0 388.4 540.7 23.1 55.9
South African rand 28.9 22.6 52.2 59.0 19.7 22.6 51.5 37.8
Hong Kong dollar – 0.3 46.5 45.0 – 0.3 46.0 42.8
Chinese renminbi 19.7 54.6 9.9 8.5 14.4 41.0 – –
South Korean won 19.3 4.6 5.2 3.1 17.0 – – –
Japanese yen 10.2 40.6 2.1 8.1 16.9 40.6 1.4 3.4
Canadian dollar 6.9 6.7 8.6 20.3 7.9 7.8 8.5 17.3
Indian rupee 9.8 1.1 9.0 15.4 – – – –
Other currencies 5.4 4.5 21.1 19.6 5.3 6.8 12.2 7.5
1,117.7 1,483.3 663.5 843.9 1,131.7 1,497.3 602.7 748.2
The group and parent company use forward exchange contracts, and occasionally purchased currency options, to hedge foreign
exchange exposures arising on forecast receipts and payments in foreign currencies. These are designated and accounted for as cash
flow hedges. The majority of the cash flows are expected to occur and the hedge effect realised in the income statement in the year
ending 31st March 2013.
The main impact of movements in exchange rates on the group’s results arises on translation of overseas subsidiaries’ profits into
sterling. The group’s largest exposure is to the US dollar and a 5% (8.0 cent (2011 7.8 cent)) movement in the average exchange rate for
the US dollar against sterling would have had a £7.3 million (2011 £4.6 million) impact on operating profit. The group is also exposed to
the euro and a 5% (5.8 cent (2011 5.9 cent)) movement in the average exchange rate for the euro against sterling would have had a
£3.7 million (2011 £3.0 million) impact on operating profit. This exposure is part of the group’s economic risk of operating globally which
is essential to remain competitive in the markets in which the group operates.
For financial instruments the main exposures are to the US dollar and euro and are due to loans, swaps and cash flow hedges on
forecast receipts and payments. A 5% (8.0 cent (2011 8.0 cent)) movement in the closing exchange rate for the US dollar against sterling
would have had a £3.1 million (2011 £4.4 million) impact on operating profit and a £20.8 million (2011 £23.9 million) impact on equity for
these instruments. A 5% (6.0 cent (2011 5.7 cent)) movement in the closing exchange rate for the euro against sterling would have had a
£5.7 million (2011 £4.6 million) impact on operating profit and a £21.4 million (2011 £27.2 million) impact on equity for these instruments.
However, the impact on operating profit relates primarily to the cash flow hedging instruments hedging the forecast receipts and
payments whose cash flows have occurred in the year and so would be offset by similar movements in the hedged items. Similarly, the
impact on equity relates primarily to foreign exchange positions used to hedge the subsidiaries’ net assets and so would be offset by an
equal and opposite movement in the value of the relevant subsidiaries’ net assets. The remaining impact on equity of £3.3 million
(2011 £3.2 million) for the US dollar and £4.6 million (2011 £5.7 million) for the euro relates to cash flow hedging instruments hedging the
forecast receipts and payments whose cash flows have yet to occur.
Notes on the Accounts
for the year ended 31st March 2012
Johnson Matthey Annual Report & Accounts 2012
Accounts

157
27 Financial risk management (continued)
27b Interest rate risk
The group’s and parent company’s interest rate risk arises from their fixed rate borrowings (fair value risk) and floating rate borrowings
(cash flow risk). Their policy is to optimise interest cost and reduce volatility in reported earnings and equity. They manage their risk by
reviewing the profile of their debt regularly and by selectively using interest rate and cross currency swaps to maintain borrowings in
appropriate currencies and at competitive rates. The group and parent company have designated the US dollar fixed rate to US dollar
floating rate swaps as fair value hedges as they hedge the changes in fair value of bonds attributable to changes in interest rates. The
gains on the interest rate swaps in the year ended 31st March 2012 were £5.6 million (2011 £5.0 million) and the losses on the bonds
attributable to the hedged risk were £5.7 million (2011 £5.0 million). The group and parent company have designated the US dollar fixed
interest rate to sterling fixed interest rate cross currency swap as a cash flow hedge as it hedges the movement in the cash flows of the
hedged bond attributable to changes in the US dollar / sterling exchange rate. The cross currency swap’s cash flows are expected to
occur in 2015 when the bond which it hedges matures. The interest element of the cash flow hedge is realised in the income statement
each year and the exchange effect is expected to be realised in the income statement in 2015. At 31st March 2012, 73% (2011 54%) of
the group’s net debt and 62% (2011 44%) of the parent company’s net debt were at fixed rates with an average interest rate of 4.91%
(2011 5.06%). The remaining debt is funded on a floating rate basis. Based on the group’s net debt funded at floating rates, after taking
into account the effect of the swaps, a 1% change in all interest rates would have a £1.2 million (2011 £3.0 million) impact on the group’s
profit before tax. This is within the range the board regards as acceptable.
27c Fair value of financial instruments
The fair value of financial instruments is approximately equal to book value except for:
2012 2011
Carrying Fair Carrying Fair
amount value amount value
Group £ million £ million £ million £ million
US Dollar Bonds 2013, 2015 and 2016 (309.3) (334.1) (302.4) (304.2)
Euro Bonds 2021 (83.3) (93.6) (88.4) (89.7)
Euro EIB loan 2013 (104.2) (108.4) (110.7) (115.4)
Sterling Bonds 2013 (40.0) (41.1) (40.0) (42.0)
2012 2011
Carrying Fair Carrying Fair
amount value amount value
Parent company £ million £ million £ million £ million
Amounts receivable from subsidiaries 1,215.3 1,247.8 1,079.7 1,084.1
US Dollar Bonds 2013, 2015 and 2016 (309.3) (334.1) (302.4) (304.2)
Euro Bonds 2021 (83.3) (93.6) (88.4) (89.7)
Euro EIB loan 2013 (104.2) (108.4) (110.7) (115.4)
Sterling Bonds 2013 (40.0) (41.1) (40.0) (42.0)
The fair values are calculated by discounting future cash flows to net present values using appropriate market interest rates prevailing at
the year end. It is not possible to determine reliably the fair value of the group’s unquoted available-for-sale investments which have a
book value of £8.0 million (2011 £8.0 million) as there is no active market. These are investments in a company that is in the start up
phase and in an investment vehicle that invests in start up companies and so there is a wide range of possible values. Given their size it
would be overly onerous to provide additional detail.
27d Liquidity risk
The group’s and parent company’s policy on funding capacity is to ensure that they always have sufficient long term funding and
committed bank facilities in place to meet foreseeable peak borrowing requirements. At 31st March 2012 the group and parent company
had no borrowings under committed bank facilities (2011 £146.7 million). The group and parent company also have a number of
uncommitted facilities, including metal leases, and overdraft lines at their disposal.
Group Parent company
2012 2011 2012 2011
£ million £ million £ million £ million
Undrawn committed borrowing facilities
Expiring within one year 120.8 94.2 120.8 94.2
Expiring in more than one year but not more than two years 131.3 68.5 131.3 68.5
Expiring in more than two years 60.0 7.0 60.0 7.0
312.1 169.7 312.1 169.7
Notes on the Accounts
for the year ended 31st March 2012

158
27 Financial risk management (continued)
27d Liquidity risk (continued)
The maturity analyses for financial liabilities showing the remaining contractual undiscounted cash flows, including future interest
payments but excluding unamortised transaction costs, were:
Within 1 year 1 to 2 years 2 to 5 years After 5 years Total
Group as at 31st March 2012 £ million £ million £ million £ million £ million
Bank overdrafts 35.8 – – – 35.8
Bank and other loans – principal 56.2 198.5 219.0 83.3 557.0
Bank and other loans – interest payments 29.2 22.1 28.7 15.3 95.3
Finance lease obligations 0.4 0.5 1.3 0.2 2.4
Financial liabilities in trade and other payables 588.8 0.8 0.5 0.4 590.5
Total non-derivative financial liabilities 710.4 221.9 249.5 99.2 1,281.0
Foreign exchange forwards, options and swaps – payments 370.8 2.2 0.7 – 373.7
Foreign exchange forwards, options and swaps – receipts (366.4) (2.2) (0.7) – (369.3)
Total derivative financial liabilities 4.4 – – – 4.4
Within 1 year 1 to 2 years 2 to 5 years After 5 years Total
Group as at 31st March 2011 (restated) £ million £ million £ million £ million £ million
Bank overdrafts 24.5 – – – 24.5
Bank and other loans – principal 181.5 40.3 329.3 181.8 732.9
Bank and other loans – interest payments 29.3 27.1 53.6 25.9 135.9
Finance lease obligations 0.4 0.4 1.4 0.6 2.8
Financial liabilities in trade and other payables 570.9 0.6 0.4 0.5 572.4
Total non-derivative financial liabilities 806.6 68.4 384.7 208.8 1,468.5
Foreign exchange forwards, options and swaps – payments 518.2 0.9 0.6 – 519.7
Foreign exchange forwards, options and swaps – receipts (511.1) (1.0) (0.6) – (512.7)
Total derivative financial liabilities 7.1 (0.1) – – 7.0
Within 1 year 1 to 2 years 2 to 5 years After 5 years Total
Parent company as at 31st March 2012 £ million £ million £ million £ million £ million
Bank overdrafts 65.9 – – – 65.9
Bank and other loans – principal 40.0 198.1 219.0 83.3 540.4
Bank and other loans – interest payments 27.3 21.9 28.7 15.3 93.2
Finance lease obligations 0.4 0.4 1.3 0.2 2.3
Financial liabilities in trade and other payables 1,539.4 0.1 0.3 22.9 1,562.7
Total non-derivative financial liabilities 1,673.0 220.5 249.3 121.7 2,264.5
Foreign exchange forwards, options and swaps – payments 395.9 4.6 0.8 – 401.3
Foreign exchange forwards, options and swaps – receipts (391.3) (4.5) (0.7) – (396.5)
Total derivative financial liabilities 4.6 0.1 0.1 – 4.8
Within 1 year 1 to 2 years 2 to 5 years After 5 years Total
Parent company as at 31st March 2011 £ million £ million £ million £ million £ million
Bank overdrafts 74.1 – – – 74.1
Bank and other loans – principal 146.5 40.0 328.9 181.8 697.2
Bank and other loans – interest payments 27.9 26.9 53.5 25.9 134.2
Finance lease obligations 0.4 0.4 1.3 0.6 2.7
Financial liabilities in trade and other payables 1,286.3 – – 0.2 1,286.5
Total non-derivative financial liabilities 1,535.2 67.3 383.7 208.5 2,194.7
Foreign exchange forwards, options and swaps – payments 527.3 3.7 0.7 – 531.7
Foreign exchange forwards, options and swaps – receipts (518.2) (3.6) (0.6) – (522.4)
Total derivative financial liabilities 9.1 0.1 0.1 – 9.3
Notes on the Accounts
for the year ended 31st March 2012
Johnson Matthey Annual Report & Accounts 2012
Accounts

159
27 Financial risk management (continued)
27e Credit risk
Within certain businesses, the group and parent company derive a significant proportion of their revenue from sales to major customers.
Sales to individual customers are frequently high if the value of precious metals is included in the price. The failure of any such company
to honour its debts could materially impact the group’s and parent company’s results. The group and parent company derive significant
benefit from trading with their large customers and manage the risk at many levels. Each business and division has a credit committee
that regularly monitors its exposure. The Audit Committee receives a report every six months that details all significant credit limits,
amounts due and amounts overdue within the group and the relevant actions being taken. At 31st March 2012 trade receivables for the
group amounted to £690.3 million (2011 £764.2 million) (parent company £139.4 million (2011 £214.1 million)). £482.2 million (2011
£516.0 million) of these receivables at group level (£103.7 million (2011 £128.2 million) at parent company level) arose in Emission Control
Technologies (ECT) which is part of Environmental Technologies Division and mainly supplies the automotive industry including car and
truck manufacturers and component suppliers. Although ECT has a wide spread of the available customers the concentrated nature of
this industry means that amounts owed by individual customers can be large. Other parts of the group tend to sell to a larger number of
customers and amounts owed tend to be lower. As at 31st March 2012 (and at 31st March 2011) for the group as a whole, no single
outstanding balance exceeded 2% of the group’s revenue. No assets have been taken possession of as collateral.
The credit profiles of the group’s and parent company’s customers are obtained from credit rating agencies and are closely monitored.
The scope of these reviews includes amounts overdue and credit limits. Generally, payments in the automotive industry and in the other
markets in which the group operates are made promptly.
Trade receivables are considered impaired when the amount is in dispute, customers are in financial difficulty or for other reasons which
imply there is doubt over the recoverability of the debt. Trade receivables can be analysed as:
Group Parent company
2012 2011 2012 2011
£ million £ million £ million £ million
Amounts neither past due nor impaired 618.8 680.0 129.3 195.4
Amounts past due but not impaired
less than 30 days 52.2 65.9 7.2 14.6
30 – 90 days 11.3 12.8 1.8 4.1
more than 90 days 8.5 5.5 1.2 0.3
Total past due but not impaired 72.0 84.2 10.2 19.0
Amounts impaired 4.8 7.2 1.1 1.5
Specific allowances for bad and doubtful debts (4.4) (6.5) (1.1) (1.3)
Carrying amount of impaired receivables 0.4 0.7 – 0.2
Other allowances for bad and doubtful debts (0.9) (0.7) (0.1) (0.5)
Trade receivables net of allowances 690.3 764.2 139.4 214.1
Movements in the allowances for impairments were:
Group Parent company
2012 2011 2012 2011
£ million £ million £ million £ million
At beginning of year 7.2 7.5 1.8 2.8
Charge for year 2.9 3.9 0.7 1.3
Acquisitions – 0.1 – –
Release (1.7) (3.1) (0.2) (2.2)
Utilised (2.9) (1.1) (1.1) (0.1)
Exchange adjustments (0.2) (0.1) – –
At end of year 5.3 7.2 1.2 1.8
Financial assets included in sundry receivables are all current and not impaired.
The credit risk on cash and deposits and derivative financial instruments is limited because the counterparties with significant balances
are banks with high credit ratings. The exposure to individual banks is monitored frequently against internally defined limits together with
the bank’s credit ratings and credit default swap prices. As at 31st March 2012, the maximum exposure with a single bank for deposits
was £12.8 million (2011 £15.9 million) for the group and £12.2 million (2011 £10.7 million) for the parent company, whilst the largest mark
to market exposure for derivative financial instruments to a single bank was £14.3 million (2011 £11.9 million) for the group and parent
company. The group and parent company also use money market funds to invest surplus cash thereby further diversifying credit risk and
at 31st March 2012 the group’s and parent company’s exposure to these funds was £59.7 million (2011 £ nil). The amounts on deposit
at the year end represent the group’s and parent company’s maximum exposure to credit risk on cash and deposits.
The parent company also guarantees some of its subsidiaries’ borrowings, partly through interest netting arrangements, and precious
metal leases and its exposure at 31st March 2012 was £26.8 million (2011 £31.1 million).
Notes on the Accounts
for the year ended 31st March 2012

160
27 Financial risk management (continued)
27f Capital management
The group’s policy for managing capital is to maintain an efficient balance sheet to ensure that the group always has sufficient resources
to be able to invest in future growth. The group has a long term target of a return on invested capital (underlying operating profit divided
by average capital employed) of over 20% to ensure focus on efficient use of the group’s capital. See the section on return on invested
capital in the Financial Review of Operations on page 44 for more information. The group also has a long term target of net debt
(including post tax pension deficits) to EBITDA of between 1.5 and 2.0 times although in any given year it may fall outside this range
depending on future plans. See the section on capital structure in the Financial Review of Operations on page 46 for more information.
Group Parent company
2012 2011 2012 2011
restated
£ million £ million £ million £ million
Net debt 454.2 639.4 529.0 749.1
Equity 1,531.8 1,403.8 1,241.6 1,205.3
Capital employed 1,986.0 2,043.2 1,770.6 1,954.4
Net debt (including post tax pension deficits) 551.2 709.4
EBITDA 576.2 489.4
Return on invested capital 22.3% 19.4%
Net debt (including post tax pension deficits) to EBITDA 1.0 times 1.4 times
28 Provisions and contingent liabilities
28a Group
Warranty &
Restructuring technology Other
provisions provisions provisions Total
restated restated
£ million £ million £ million £ million
At 1st April 2011 (restated) 47.0 22.7 14.6 84.3
Charge for year 6.6 8.2 9.4 24.2
Utilised (33.9) (2.0) (2.6) (38.5)
Released (0.2) (4.3) (0.4) (4.9)
Unwinding of discount – – 0.3 0.3
Exchange adjustments (1.5) (0.5) (0.6) (2.6)
At 31st March 2012 18.0 24.1 20.7 62.8
2012 2011
restated
£ million £ million
Current 34.0 60.1
Non-current 28.8 24.2
Total provisions 62.8 84.3
The restructuring provisions relate to Environmental Technologies Division and Fine Chemicals Division and are expected to be fully spent
in 2012/13.
The warranty and technology provisions represent management’s best estimate of the group’s liability under warranties granted and
remedial work required under technology licences, based on past experience in Environmental Technologies Division. Warranties
generally cover a period of up to three years.
The other provisions include environmental, onerous leases and legal provisions arising across the group. Amounts provided reflect
management’s best estimate of the expenditure required to settle the obligations at the balance sheet date. They are expected to be fully
spent over the next seven years.
Notes on the Accounts
for the year ended 31st March 2012
Johnson Matthey Annual Report & Accounts 2012
Accounts

161
28 Provisions and contingent liabilities (continued)
28b Parent company
Restructuring Warranty Other
provisions provisions provisions Total
£ million £ million £ million £ million
At 1st April 2011 1.1 0.1 14.6 15.8
Charge for year 3.7 – 13.2 16.9
Utilised (0.8) – (1.5) (2.3)
Released (0.2) (0.1) (0.4) (0.7)
At 31st March 2012 3.8 – 25.9 29.7
2012 2011
£ million £ million
Current 17.1 2.5
Non-current 12.6 13.3
Total provisions 29.7 15.8
The restructuring provisions relate to Environmental Technologies Division and are expected to be fully spent in 2012/13.
The warranty provisions represent management’s best estimate of the parent company’s liability under warranties granted, based on
past experience in Environmental Technologies Division.
The other provisions include onerous leases, legal provisions, a provision for a recharge to refund a subsidiary for its restructuring costs
and provisions to buy metal to cover positions created by the parent company selling metal belonging to subsidiaries. Amounts provided
reflect management’s best estimate of the expenditure required to settle the obligations at the balance sheet date.
Details of guarantees given by the parent company are disclosed in note 27e.
29 Deferred taxation
29a Group
Total
Property, Post- deferred tax
plant & employment (assets) /
equipment benefits Provisions Inventories Intangibles Other liabilities
£ million £ million £ million £ million £ million £ million £ million
At 1st April 2010 64.3 (64.6) (2.8) (45.8) 34.8 13.5 (0.6)
(Credit) / charge to income (restated) (6.9) 3.0 (21.4) (0.5) (8.2) 21.4 (12.6)
Acquisitions (restated) (note 39) 0.5 – (2.4) (0.2) 12.6 (2.7) 7.8
Tax on items taken directly to or
transferred from equity – 27.9 – – – (1.9) 26.0
Exchange adjustments (1.4) 0.8 (0.1) 0.4 – (0.5) (0.8)
At 31st March 2011 (restated) 56.5 (32.9) (26.7) (46.1) 39.2 29.8 19.8
Charge / (credit) to income 13.3 4.9 9.0 8.4 (6.1) (9.8) 19.7
Tax on items taken directly to or
transferred from equity – (9.4) – – – (0.9) (10.3)
Exchange adjustments (0.7) 0.1 0.6 0.1 (0.6) (0.7) (1.2)
At 31st March 2012 69.1 (37.3) (17.1) (37.6) 32.5 18.4 28.0
2012 2011
restated
£ million £ million
Deferred tax assets (25.4) (39.7)
Deferred tax liabilities 53.4 59.5
28.0 19.8
Deductible temporary differences, unused tax losses and unused tax credits not recognised on the balance sheet are £72.5 million
(2011 £72.8 million).
Deferred tax liabilities have not been recognised on temporary differences of £576.9 million (2011 £652.1 million) associated with
investments in subsidiaries.
Notes on the Accounts
for the year ended 31st March 2012

162
29 Deferred taxation (continued)
29b Parent company
Total
Property, Post- deferred tax
plant & employment (assets) /
equipment benefits Provisions Inventories Intangibles Other liabilities
£ million £ million £ million £ million £ million £ million £ million
At 1st April 2010 24.1 (43.9) (0.3) (37.9) 1.1 7.8 (49.1)
(Credit) / charge to income (3.6) 5.7 0.1 1.6 – 2.9 6.7
Tax on items taken directly to or
transferred from equity – 23.8 – – – (1.3) 22.5
At 31st March 2011 20.5 (14.4) (0.2) (36.3) 1.1 9.4 (19.9)
(Credit) / charge to income (0.1) 3.6 0.2 8.4 (0.4) (2.4) 9.3
Tax on items taken directly to or
transferred from equity – (4.0) – – – 0.4 (3.6)
At 31st March 2012 20.4 (14.8) – (27.9) 0.7 7.4 (14.2)
Deductible temporary differences, unused tax losses and unused tax credits not recognised on the balance sheet are £4.0 million
(2011 £4.0 million).
30 Share capital
Number £ million
Issued and fully paid ordinary shares of £1 each
At 1st April 2010, 31st March 2011 and 31st March 2012 220,673,613 220.7
Details of outstanding share options and allocations under the company’s long term incentive plan which have yet to mature are
disclosed in note 13.
At the last annual general meeting on 19th July 2011 shareholders approved a resolution for the company to make purchases of its own
shares up to a maximum number of 21,467,573 shares. The resolution remains valid until the conclusion of this year’s annual general
meeting. The company will purchase its own shares when the board believes it to be in the best interests of the shareholders generally
and will result in an increase in earnings per share.
The group and parent company’s employee share ownership trust (ESOT) also buys shares on the open market and holds them in trust
for employees participating in the group’s executive share option schemes and long term incentive plan. At 31st March 2012 the ESOT
held 2,508,723 shares (2011 1,995,144 shares) which had not yet vested unconditionally in employees. Computershare Trustees (CI)
Limited, as trustee for the ESOT, has waived its dividend entitlement.
The total number of treasury shares held was 5,997,877 (2011 5,997,877) at a total cost of £91.7 million (2011 £91.7 million).
31 Components of other comprehensive income
2012 2011
restated
£ million £ million
Cash flow hedges:
Gains taken to equity 8.3 4.4
Transferred to income statement (2.2) (0.7)
6.1 3.7
Currency translation differences:
Taken to equity (53.7) (8.9)
(53.7) (8.9)
Notes on the Accounts
for the year ended 31st March 2012
Johnson Matthey Annual Report & Accounts 2012
Accounts

163
32 Tax effects relating to other comprehensive income
2012 2011
Before tax Tax Net of tax Before tax Tax Net of tax
restated restated
£ million £ million £ million £ million £ million £ million
Currency translation differences (53.7) – (53.7) (8.9) (10.3) (19.2)
Cash flow hedges 6.1 (1.4) 4.7 3.7 (1.0) 2.7
Fair value gains on net investment hedges 23.7 – 23.7 2.2 9.2 11.4
Actuarial (loss) / gain on post-employment benefits
assets and liabilities (70.6) 20.1 (50.5) 85.4 (27.9) 57.5
Total other comprehensive (expense) / income (94.5) 18.7 (75.8) 82.4 (30.0) 52.4
33 Other reserves
33a Group
Capital Foreign Total
redemption currency Hedging other
reserve translation reserve reserves
restated restated
£ million £ million £ million £ million
At 1st April 2010 6.5 70.0 (3.1) 73.4
Cash flow hedges:
Gains taken to equity – – 4.4 4.4
Transferred to income statement – – (0.7) (0.7)
Fair value gains on net investment hedges – 2.2 – 2.2
Currency translation differences on foreign currency net investments and
related loans (restated) (note 39) – (8.9) – (8.9)
Tax on items taken directly to or transferred from equity – (1.1) (1.0) (2.1)
At 31st March 2011 (restated) 6.5 62.2 (0.4) 68.3
Cash flow hedges:
Gains taken to equity – – 8.3 8.3
Transferred to income statement – – (2.2) (2.2)
Fair value gains on net investment hedges – 23.7 – 23.7
Currency translation differences on foreign currency net investments and
related loans – (53.7) – (53.7)
Tax on items taken directly to or transferred from equity – – (1.4) (1.4)
At 31st March 2012 6.5 32.2 4.3 43.0
33b Parent company
Capital Foreign Total
redemption currency Hedging other
reserve translation reserve reserves
£ million £ million £ million £ million
At 1st April 2010 6.5 (5.0) (1.3) 0.2
Cash flow hedges:
Gains taken to equity – – 2.6 2.6
Transferred to income statement – – (2.0) (2.0)
Currency translation differences on foreign operations – 1.2 – 1.2
Tax on items taken directly to or transferred from equity – – (0.2) (0.2)
At 31st March 2011 6.5 (3.8) (0.9) 1.8
Cash flow hedges:
Gains taken to equity – – 8.5 8.5
Transferred to income statement – – (1.8) (1.8)
Currency translation differences on foreign operations – (0.1) – (0.1)
Tax on items taken directly to or transferred from equity – – (1.6) (1.6)
At 31st March 2012 6.5 (3.9) 4.2 6.8
Notes on the Accounts
for the year ended 31st March 2012

164
34 Gross cash flows
34a Purchases of non-current assets and investments
Group Parent company
2012 2011 2012 2011
£ million £ million £ million £ million
Purchases of property, plant and equipment 137.5 119.3 33.3 27.2
Purchases of intangible assets 13.0 17.6 1.2 1.9
Purchases of available-for-sale investments 0.2 0.5 – –
150.7 137.4 34.5 29.1
34b Purchases of businesses
Group Parent company
2012 2011 2012 2011
£ million £ million £ million £ million
Purchase of businesses – 52.4 – –
Cash acquired with businesses – (1.0) – –
Consideration refunded for prior years’ acquisitions (1.6) – – –
Consideration paid for prior years’ acquisitions 1.0 1.7 – –
(0.6) 53.1 – –
34c Net cost of ESOT transactions in own shares
Group Parent company
2012 2011 2012 2011
£ million £ million £ million £ million
Purchase of own shares by ESOT (36.8) (16.2) (36.8) (16.2)
Release of own shares by ESOT 11.1 7.1 11.1 7.1
(25.7) (9.1) (25.7) (9.1)
34d (Repayment of) / proceeds from borrowings and finance leases
Group Parent company
2012 2011 2012 2011
restated
£ million £ million £ million £ million
Proceeds from borrowings falling due within one year 2.6 120.1 – 96.7
Repayment of borrowings falling due within one year (168.7) (109.1) (146.7) (80.9)
Proceeds from borrowings falling due after more than one year – 85.5 – 85.5
Capital element of finance lease rental payments (0.3) (0.3) (0.3) (0.3)
(166.4) 96.2 (147.0) 101.0
35 Cash and cash equivalents
Group Parent company
2012 2011 2012 2011
£ million £ million £ million £ million
Cash and deposits 139.1 118.9 78.0 23.1
Bank overdrafts (35.8) (24.5) (65.9) (74.1)
Cash and cash equivalents 103.3 94.4 12.1 (51.0)
Notes on the Accounts
for the year ended 31st March 2012
Johnson Matthey Annual Report & Accounts 2012
Accounts

165
36 Precious metal operating leases
The group leases, rather than purchases, precious metals to fund temporary peaks in metal requirements provided market conditions
allow. These leases are from banks for specified periods (typically a few months) and for which the group pays a fee. These arrangements
are classified as operating leases. The group holds sufficient precious metal inventories to meet all the obligations under these lease
arrangements as they fall due. At 31st March 2012 precious metal leases were £9.1 million (2011 £93.0 million).
37 Commitments
Group Parent company
2012 2011 2012 2011
£ million £ million £ million £ million
Future capital expenditure contracted but not provided 20.8 15.1 1.4 2.1
Future minimum amounts payable under non-cancellable operating leases
Within one year 17.1 12.6 2.3 1.9
From one to five years 27.9 27.0 6.9 5.9
After five years 19.4 27.6 8.7 10.7
64.4 67.2 17.9 18.5
Future minimum sublease payments expected to be received under
non-cancellable operating leases (0.3) (0.4) (0.3) –
Future minimum amounts payable under finance leases
Within one year 0.4 0.4 0.4 0.4
From one to five years 1.8 1.8 1.7 1.7
After five years 0.2 0.6 0.2 0.6
2.4 2.8 2.3 2.7
Less future finance charges (0.3) (0.4) (0.3) (0.4)
Present value of finance lease obligations 2.1 2.4 2.0 2.3
The group and parent company lease some of its property, plant and equipment which are used by the group and parent company in
their operations, except for leases of some property which the group and parent company no longer use which are now sublet.
38 Transactions with related parties
Transactions between the parent company and its subsidiaries, which are related parties, have been eliminated on consolidation and so
are only disclosed for the parent company’s accounts. Guarantees of subsidiaries’ borrowings are disclosed in note 27e.
Group Parent company
2012 2011 2012 2011
£ million £ million £ million £ million
Trading transactions with subsidiaries
Sale of goods – – 2,898.2 2,131.5
Purchases of goods – – 404.9 325.6
Income from service charges – – 16.2 15.5
Amounts receivable from subsidiaries – – 140.9 120.4
Amounts payable to subsidiaries – – 18.6 16.4
Loans to subsidiaries – – 1,074.4 959.3
Loans from subsidiaries – – 1,210.9 939.9
The group had an associate, AGR Matthey, which was dissolved on 14th September 2010. During the year ended 31st March 2011 the
group received £3.5 million related to the final AGR Matthey distribution of residual cash.
The group’s post-employment benefits plans are related parties and the group’s and parent company’s transactions with them are
disclosed in notes 14a and 14b respectively.
The transactions with key management personnel are described in note 12c.
Notes on the Accounts
for the year ended 31st March 2012

166
39 Restatement of acquisition in the year ended 31st March 2011
On 1st November 2010 the group acquired 100% of Intercat, Inc. and its subsidiaries. The fair values disclosed at 31st March 2011 were
provisional. These have now been finalised and the balance sheet at 31st March 2011 restated.
The net assets acquired were:
Estimated Revised
fair value fair value Measurement
at time of at time of period
acquisition acquisition adjustments
£ million £ million £ million
Property, plant and equipment 11.5 11.5 –
Intangible assets – patents, trademarks and licences 10.1 8.5 (1.6)
Intangible assets – customer contracts and relationships 17.7 20.5 2.8
Intangible assets – acquired research and technology 2.8 2.8 –
Inventories 5.8 5.8 –
Trade and other receivables 5.4 5.2 (0.2)
Cash and cash equivalents 1.0 1.0 –
Current other borrowings (21.5) (20.5) 1.0
Trade and other payables (10.6) (11.0) (0.4)
Current income tax liabilities (1.4) (1.8) (0.4)
Deferred income tax liabilities (8.0) (7.6) 0.4
Provisions – (1.9) (1.9)
Total net assets acquired 12.8 12.5 (0.3)
Goodwill on acquisition 20.2 19.4 (0.8)
Total consideration 33.0 31.9 (1.1)
As a result of these changes the amortisation of acquired intangibles for the year ended 31st March 2011 increased by £1.3 million to
£14.5 million and the income tax expense decreased by £0.5 million to £75.5 million. Also the currency translation loss in other
comprehensive income increased by £1.0 million to £8.9 million.
40 Discontinued operations
On 28th February 2007 the group sold its Ceramics Division. During the year ended 31st March 2011 further costs of £1.9 million were
provided in respect of environmental warranty claims.
41 Key sources of estimation uncertainty
Determining the carrying amounts of some assets and liabilities requires estimation of the effects of uncertain future events on those
assets and liabilities at the balance sheet date. The group and parent company have made appropriate estimates when applying the
accounting policies, but the actual outcome may differ from those calculated.
The key sources of estimation uncertainty at the balance sheet date which have a significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities within the next financial year are:
Post-employment benefits
The group’s and parent company’s defined benefit plans are assessed annually by qualified independent actuaries. The details of the
plans and assumptions used are described in note 14.
Goodwill
The group has capitalised goodwill of £519.5 million and the parent company has £110.5 million. Annual impairment reviews are
performed which require various assumptions. More details are given in note 16.
Other intangible assets
Other intangible assets which are not yet being amortised are also subject to annual impairment reviews based on discounted cash flow
projections. More details are given in note 17.
Notes on the Accounts
for the year ended 31st March 2012
Johnson Matthey Annual Report & Accounts 2012
Accounts

41 Key sources of estimation uncertainty (continued)
Provisions and contingent liabilities
As described in note 28 and the accounting policies, the group and parent company measure provisions and contingent liabilities at
management’s best estimate of the expenditure required to settle the obligations at the balance sheet date.
Taxation
The tax payable on profits is determined based on tax laws and regulations that apply in each of the numerous jurisdictions in which the
group operates. Where the precise impact of these laws and regulations is unclear then reasonable estimates may be used to determine
the tax charge included in the accounts. If the tax eventually payable or reclaimable differs from the amounts originally estimated then the
difference will be charged or credited in the accounts for the year in which it is determined.
Refining process and stock takes
The group’s and parent company’s refining and fabrication businesses process significant quantities of precious metal and, similar to
many industrial activities, losses may arise during processing. The extent of such losses depends on many factors, including the nature of
material being refined, the specific refining processes applied and the processes’ efficiency. Judgment is therefore required in estimating
the amount of such losses when setting process loss provisions. In addition stock takes, particularly at the refining businesses, involve
estimation of volumes in the refining system and the subsequent assaying of material to assess the precious metal content. In addition,
the results of assaying and therefore the stock take itself are only available some time after the date of the stock take. In setting process
loss provisions and assessing the stock take results management takes account of past experience, ability to extract precious metals
from the refining process and other factors when estimating losses and gains.
42 Principal subsidiaries
The group’s principal subsidiaries at 31st March 2012 are set out below. Those held directly by the parent company are marked with an
asterisk (*). All the companies are wholly owned unless otherwise stated. All the subsidiaries are involved in the principal activities of the
group. A full list of the group’s subsidiaries will be attached to the parent company’s annual return to be filed with the Registrar of
Companies.
Country of Country of
incorporation incorporation
Europe Asia
S.A. Johnson Matthey N.V. Belgium Johnson Matthey (Shanghai) Catalysts Co., Ltd China
* Avocado Research Chemicals Limited England Johnson Matthey (Shanghai) Chemicals Limited China
* Davy Process Technology Limited England Johnson Matthey Pacific Limited Hong Kong
* Johnson Matthey Fuel Cells Limited (82.5%) England Johnson Matthey India Private Limited India
* Tracerco Limited England Johnson Matthey Chemicals India Private Limited India
Johnson Matthey SAS France Johnson Matthey Japan, Inc. USA
Alfa Aesar GmbH & Co KG Germany * Johnson Matthey Sdn. Bhd. (92%) Malaysia
Johnson Matthey Catalysts (Germany) GmbH Germany Johnson Matthey Catalysts Korea Limited South Korea
Johnson Matthey GmbH Germany
Johnson Matthey DOOEL Skopje Macedonia
Johnson Matthey BV Netherlands
Macfarlan Smith Limited Scotland
Johnson Matthey AB Sweden Africa
Johnson Matthey & Brandenberger AG Switzerland Johnson Matthey (Proprietary) Limited South Africa
Australasia
Johnson Matthey (Aust) Ltd Australia
North America South America
The Argent Insurance Co. Limited Bermuda * Johnson Matthey Argentina S.A. Argentina
Johnson Matthey Limited Canada
Johnson Matthey de Mexico, S.A. de C.V. Mexico
Johnson Matthey Inc. USA
Johnson Matthey Catalog Company Inc. USA
Johnson Matthey Fuel Cells, Inc. (82.5%) USA
Johnson Matthey Pharmaceutical Materials, Inc. USA
Intercat, Inc. USA
167
Notes on the Accounts
for the year ended 31st March 2012

Shareholdings,
summaries,
the glossary
and index
Johnson Matthey Annual Report & Accounts 2012
Other Information
168

Contents
170 Five Year Record – Financial Data
171 Five Year Record – Non-Financial Data
172 Basis of Reporting – Non-Financial Data
173 Verification and Assurance –
Non-Financial Data
174 Shareholder Information
176 Global Reporting Initiative (GRI) Summary
177 Glossary of Terms
178 Index
179 Financial Calendar 2012/13
180 Company Details
Other Information
This section contains the assurance statement on our non-financial data and a checklist against the
Global Reporting Initiative. It also provides further information for shareholders, a glossary and an
index to help the reader locate information in the relevant sections.
. Our platinum group metals trading team sources metal
for Johnson Matthey’s businesses and their customers.
. Johnson Matthey is the market leader in
platinum group metal fabricated products for
industrial applications.
. We manufacture precious metal components
used in medical devices for maintaining
cardiovascular health.
> Managing Metals for
Our Businesses and
Our Customers
Around 70% of Johnson Matthey products
and businesses involve platinum group metals
(pgms) and so the sourcing of them is a vital
service to our businesses and their customers.
Our pgm trading team within our Precious
Metals Marketing and Distribution business
fulfills a key strategic function for the group,
acting rather like a pgm ‘treasury’. It looks after
the group’s metal, ensuring we remain fully
hedged at all times, eliminating exposure to
fluctuations in pgm prices. It also plays a
crucial role in optimising the group’s metal
stocks making sure we have the right amount
of the right type of metal in the right form,
ready for our manufacturing units to make
products to meet their customer orders.
The team also manages metal on behalf
of our customers who may choose to deposit
their own metal with us, either to fund their
orders or following refining. It also sells pgms
to internal and external customers and, as a
result, is the world’s largest supplier of pgms
for physical use.
Delivering Value

2008 2009 2010 2011 2012
£ million £ million £ million £ million £ million
Revenue 7,498.7 7,847.8 7,839.4 9,984.8 12,023.2
Sales excluding the value of precious metals 1,750.2 1,796.9 1,885.5 2,280.3 2,678.6
EBITDA 374.1 398.1 382.7 489.4 576.2
Depreciation (68.3) (88.7) (97.3) (108.3) (108.5)
Amortisation (9.0) (10.9) (13.6) (14.9) (17.6)
Underlying operating profit 296.8 298.5 271.8 366.2 450.1
Net finance costs (30.3) (32.6) (19.4) (20.7) (24.1)
Share of (loss) / profit of associate (1.1) 2.0 1.7 – –
Underlying profit before tax 265.4 267.9 254.1 345.5 426.0
Amortisation of acquired intangibles (3.1) (9.1) (9.9) (14.5) (16.7)
Major impairment and restructuring charges – (9.4) (11.3) (71.8) –
Dissolution of associate – – (4.4) 0.1 –
Profit before tax 262.3 249.4 228.5 259.3 409.3
Income tax expense (77.2) (76.7) (64.3) (75.5) (93.9)
Profit after taxation 185.1 172.7 164.2 183.8 315.4
Profit / (loss) for the year from discontinued operations 0.3 1.2 – (1.9) –
Non-controlling interests 0.8 0.2 – (0.4) 0.5
Profit attributable to owners of the parent company 186.2 174.1 164.2 181.5 315.9
Underlying earnings per ordinary share 89.5p 89.6p 86.4p 119.0p 153.7p
Earnings per ordinary share 88.5p 82.6p 77.6p 85.2p 148.7p
Dividend per ordinary share 36.6p 37.1p 39.0p 46.0p 55.0p
Summary Balance Sheet
Assets employed:
Goodwill 480.4 516.0 513.8 528.7 519.5
Property, plant and equipment / other intangible assets 827.9 1,060.5 1,053.2 1,060.6 1,037.3
Non-current investments / associates 8.9 12.1 10.9 8.0 8.0
Inventories 380.4 371.7 390.1 556.3 630.8
Receivables / current investments / tax assets / financial assets 712.4 585.9 718.9 952.2 898.6
Payables / provisions / tax liabilities / financial liabilities (655.7) (684.1) (717.0) (932.2) (938.8)
Post-employment benefits net assets / employee benefit obligations 16.4 (151.6) (245.7) (130.4) (169.4)
1,770.7 1,710.5 1,724.2 2,043.2 1,986.0
Financed by:
Net debt 610.4 534.4 473.4 639.4 454.2
Retained earnings 879.1 849.6 837.7 1,001.2 1,169.6
Share capital, share premium, shares held in ESOTs and other reserves 279.8 325.7 411.7 401.5 361.8
Non-controlling interest 1.4 0.8 1.4 1.1 0.4
Capital employed 1,770.7 1,710.5 1,724.2 2,043.2 1,986.0
Return on invested capital 18.5% 17.1% 15.8% 19.4% 22.3%
(Underlying operating profit / average capital employed)
2011 has been restated for the changes to Intercat, Inc.’s fair values. In 2009, the balance sheet for 2008 was restated for the changes to
Argillon Group’s fair value at acquisition and goodwill on acquisition.
Five Year Record – Financial Data
Johnson Matthey Annual Report & Accounts 2012
Other Information
170

Five Year Record – Non-Financial Data
171
20071 20092 20102 20112 20122
Social
Average employee numbers 8,013 8,742 8,575 9,388 9,914
Total employee turnover3 % 9.9 12.7 10.0 8.5 11.7
Voluntary employee turnover3 % 7.6 6.4 5.4 5.6 6.4
Employee gender (female) % 224 225 215 225 225
New recruits gender (female) % 25 29 25 23 25
Trade union representation % 34 34 33 38 35
Training days per employee 3.9 2.6 2.3 2.6 3.1
Training spend per employee6 £ 327 346 291 390 335
Internal promotions % of all recruitment in year 29 38 35 33 35
Attendance days lost per employee 5.2 5.3 5.2 5.2 5.0
Sickness absence rate % 2.1 2.2 2.1 2.1 2.0
Charitable donations £ thousands 4152 495 458 517 645
Health and Safety
Greater than three day accidents per 1,000 employees 3.04 5.09 2.48 2.997 2.07
Total lost time accidents 78 95 607 747 55
Total accident rate per 1,000 employees 9.36 10.83 7.11 7.897 5.69
Total lost time accident incident rate per 100,000 hours worked 0.50 0.53 0.36 0.407 0.28
Total days lost per 1,000 employees 85 124 64 102 90
Occupational illness cases per 1,000 employees 5.8 5.5 5.2 3.5 3.5
Environment
Energy consumption thousands GJ 3,787 4,070 4,001 4,749 4,726
Total global warming potential thousands tonnes CO2 equivalent 390 372 377 415 417
Total acid gas emissions tonnes SO2 equivalent 416 334 335 318 444
Total NOx emissions tonnes 448 439 434 393 566
Total SO2 emissions tonnes 31.8 25.8 31.0 43.0 47.5
Total VOC emissions tonnes 207.1 209.1 180.8 185.7 189.8
Total waste tonnes 98,764 96,287 90,308 113,671 120,363
Total waste to landfill tonnes 20,977 5,535 5,071 6,165 10,708
Packaging waste recycled – steel tonnes * 2,084 1,863 1,847 2,314
Packaging waste recycled – paper tonnes * 486 250 258 704
Packaging waste recycled – plastic tonnes * 648 396 439 1,148
Packaging waste recycled – wood tonnes * 1,811 828 896 3,003
Water consumption thousands m3 2,048 1,951 1,750 2,076 2,201
Emissions to water tonnes 360 376 236 251 260
1 Calendar year (unless otherwise stated).
2 Financial year (unless otherwise stated).
3 Calculated by reference to the total number of leavers during the year expressed as a percentage of the average number of people employed during the year. Does not include agency
workers not directly employed by Johnson Matthey.
4 At 31st December.
5 At 31st March.
6 Does not include the cost of in house training or the cost of employees’ wages during training.
7 Restated.
* Not measured.

Johnson Matthey Annual Report & Accounts 2012
Other Information
172
Basis of Reporting – Non-Financial Data
Johnson Matthey has adopted a framework
based upon the GRI G3 sustainability
reporting guidelines and applied them in
an appropriate context to the group by
examination of the definition, explanation
notes and self diagnosis tests to ensure a
comprehensive, accurate and complete
account when assessed against the
reporting criteria. In addition, feedback
received on the 2010/11 Sustainability
Report, recommendations on that report
arising from the assurance process and a
well structured management approach
early in 2012 have shaped the reporting
of non-financial content and context. Due
consideration has been given to new
international standards such as the
International Organization for
Standardization’s voluntary standard on
‘social responsibility’, ISO 26000.
This report has been developed to
incorporate the group’s significant economic,
environmental and social impacts and set
within the context of the United Nations
Brundtland definition of sustainability (1987)
and our own Sustainability 2017 goals.
Understanding the relevance of local, national,
regional and global issues, regulation and
legislation is taken into account when
considering reporting. The AA1000AS
principles of inclusivity, materiality and
responsiveness are central to the structure
of the report and in setting priorities for
reporting.
There are no limitations on the scope
or boundary of the non-financial data in this
report. The non-financial information
presented covers the sustainability activities
and performance of Johnson Matthey’s
global operations and includes the parent
company and its subsidiaries (as listed on
page 167). Environmental performance
data covers manufacturing, research and
warehousing operations of the parent
company and its subsidiaries (and
environmental performance data from new
facilities is included from the point at which
the facility is fully operational). The report
also explains how we are continuing to build
sustainability into our business planning and
decision making processes and how through
our governance processes, we manage
social, environmental and ethical matters
across the group.
Data measurement techniques, including
calculations for social, environmental and
health and safety performance, have used
internationally recognised protocols such
as the greenhouse gas protocol and the
GRI indicator protocols as appropriate.
Any exceptions are noted.
All non-financial performance data is
reported on a financial year basis unless
otherwise stated. Where necessary data
has been restated, for example to reflect
changes in the business (e.g. divestments
and site closures), to take account of changes
in best practice methodologies for reporting,
changes in calculating emissions or in
response to recommendations made by
our assurance provider. For employee data,
percentage calculations are made in relation
to the number of permanent employees in
the group (unless otherwise stated).
Global warming potential (GWP) in
tonnes of carbon dioxide (CO2) equivalent
includes Scope 1 and Scope 2 emissions.
We report greenhouse gas emissions from
process and energy use and convert the
total group energy use to tonnes CO2
equivalent using national and regional
conversion factors for each emissions
source as appropriate.
Certain employee data is included in
the accounts which is subject to external
audit. The group’s other social, health and
safety and environmental data is collected
annually at a group level. The data is
collated through five questionnaires based
on the requirements of the Global Reporting
Initiative third generation (GRI G3) guidelines.
It is completed by businesses and signed
off by the general manager for each global
operation. The reported site level data is a
combination of actual measurement and
estimates. The processes in place to
internally verify the reported data are
described in the Verification and Assurance
section on page 173.
Accident Calculation Definitions
Johnson Matthey’s definition of an accident
for the purposes of this report is any acute
unplanned event that causes harm to
individuals, making them unable to attend
work on days after the date of the event.
Accidents are further subdivided into
accidents that result in more than three
days’ work lost and those that cause three
or less days to be lost. Accident incidence
rates are calculated based on the rate of
these accidents per 1,000 employees.
The following metrics are used in this report:
Incidence rate for all lost time accidents
in the year = (number of greater than three
day accidents in the year + number of three
day or less accidents in the year) x 1,000 ÷
(average number of employees in the year).
Incidence rate for greater than three day
accidents in the year = (number of greater
than three day accidents in the year) x 1,000
÷ (average number of employees in the year).
Lost work days per 1,000 employees per
year = (total lost work days in year) x 1,000
÷ (average number of employees in the year).
Frequency rate for all lost time accidents
in the year = (number of greater than three
day accidents in the year + number of three
day or less accidents in the year) x 100,000
÷ (number of hours worked in the year).

173
Verification and Assurance – Non-Financial Data
Assurance
Johnson Matthey commissioned Corporate
Citizenship to provide external assurance
and commentary on the company’s
sustainability reporting, comprising the
non-financial aspects of this year’s annual
report and related content on the company’s
website. Johnson Matthey has chosen to
use the AA1000 assurance standard,
AA1000AS (2008), as the reference standard
for this year’s assurance.
Corporate Citizenship has evaluated
the nature and extent of adherence to the
AA1000AS principles of inclusivity, materiality
and responsiveness, as well as the quality
of Johnson Matthey’s sustainability
performance reporting. The criteria used to
assure the sustainability performance data
were the GRI G3 Principles for Defining
Report Quality and the Greenhouse Gas
Protocol Corporate Accounting and
Reporting Standard (Revised Edition) for
greenhouse gas reporting.
Based on the work undertaken,
Corporate Citizenship has concluded that
Johnson Matthey’s sustainability reporting,
as outlined above, reflects the principles of
AA1000 (2008): inclusivity, materiality and
responsiveness. A full version of Corporate
Citizenship’s AA1000 Assurance Statement,
which includes opinions on Johnson
Matthey’s adherence to each AA1000AS
principle, as well as detailed assurance
commentary, is available online at
www.matthey.com/AR12.
Corporate Citizenship
London
31st May 2012
www.corporate-citizenship.com
Verification
The board reviews corporate social
responsibility issues as part of its risk
management process. The board believes
that the measures taken to review the
non-financial information provide a suitable
level of confidence.
Certain human resources data forms
part of Johnson Matthey’s accounts which
are subject to external audit. Other human
resources data, community investment
data and information relating to charitable
donations is reviewed and verified by
internal experts.
Health and safety data is reviewed by
group health and safety experts and as part
of the group environment, health and safety
(EHS) audit programme. Environmental data
is reviewed by group environmental experts
and as part of the group EHS audit
programme.
All data is reviewed by internal
sustainability experts and at appropriate
levels of management up to and including
the Chief Executive’s Committee.
Johnson Matthey utilises external
specialists on specific sustainability issues.
Over the past year this has included external
audits or reviews of people management
systems, health and safety (OHSAS 18001)
and environmental management systems
(ISO 14001).

Johnson Matthey Annual Report & Accounts 2012
Other Information
174
Pension
Funds
18.4%
Investment and
Unit Trusts
40.0%
Custodians
2.2%
Individuals
5.6%
Insurance
Companies
5.8%
Treasury Shares
and Employee
Share Schemes
5.6%
Sovereign
Wealth Funds
4.8%
Charities
1.3%
Other
16.3%
Shareholder Information
Johnson Matthey Share Price as at 31st March
2007 2008 2009 2010 2011 2012
1,576p 2,005p 1,053p 1,746p 1,860p 2,359p
Analysis of Ordinary Shareholders as at 30th April 2012
By location Number of shares Percentage
UK and Eire 137,068,645 62.1
USA and Canada 41,367,358 18.8
Continental Europe 14,413,317 6.5
Asia Pacific 5,661,015 2.6
Rest of World 6,234,586 2.8
Unidentified 15,928,692 7.2
Total 220,673,613 100.0
By category Number of shares Percentage
Investment and Unit Trusts 88,209,841 40.0
Pension Funds 40,531,222 18.4
Individuals 12,413,466 5.6
Custodians 4,901,473 2.2
Insurance Companies 12,725,066 5.8
Treasury Shares and Employee Share Schemes 12,360,631 5.6
Sovereign Wealth Funds 10,581,533 4.8
Charities 2,919,122 1.3
Other 36,031,259 16.3
Total 220,673,613 100.0
By size of holding Number of holdings Percentage Number of shares Percentage
1 – 1,000 7,660 73.8 2,828,568 1.3
1,001 – 10,000 2,038 19.7 5,185,109 2.4
10,001 – 100,000 429 4.1 14,612,223 6.6
100,001 – 1,000,000 211 2.0 64,944,375 29.4
1,000,001 – 5,000,000 30 0.3 62,314,276 28.2
5,000,001 and over 8 0.1 70,789,062 32.1
10,376 100.0 220,673,613 100.0
Johnson Matthey FTSE 100
March 2007 March 2008 March 2009 March 2010 March 2011 March 2012
20
40
60
80
100
120
140
160
UK and Eire
62.1%
USA and
Canada
18.8%
Continental
Europe
6.5%
Asia
Pacific
2.6%
Rest of
World
2.8%
Unidentified
7.2%
By Location
By Category
10,001–100,000
6.6%
1,001–10,000
2.4%1–1,000
1.3%
100,001–
1,000,000
29.4%
1,000,001 – 5,000,000
28.2%
5,000,001
and over
32.1%
By Size of Holding
Johnson Matthey Share Price Five Year Performance versus FTSE 100

175
Share Dealing Services
A telephone and internet dealing service for UK shareholders is
provided by the company’s registrars, Equiniti. For further information,
including Equiniti’s terms and conditions and details of their fees,
log on to www.shareview.co.uk/dealing or call 08456 037 037.
Dividend History – Pence per Share
2008 2009 2010 2011 2012
Interim 10.6 11.1 11.1 12.5 15.0
Final 26.0 26.0 27.9 33.5 40.0
Total 36.6 37.1 39.0 46.0 55.0
Dividend Policy
It is Johnson Matthey’s policy to grow ordinary dividends over time,
broadly in line with underlying earnings per share while maintaining
dividend cover at about two and a half times to ensure sufficient
funds are retained to support organic growth. Over the last five years
from 2007/08, underlying earnings per share have grown at a
compound annual growth rate of 14.5% p.a. The board is proposing
a final dividend for 2011/12 of 40.0 pence to take the total for the
year to 55.0 pence, which is 20% up. The dividend will be covered
2.8 times by underlying earnings.
Dividend Payments and DRIP
Dividends can be paid directly into shareholders’ bank or building
society accounts. Shareholders wishing to take advantage of this
facility should contact the company’s registrars, Equiniti, or complete
the dividend mandate form attached to their dividend cheque.
A Dividend Reinvestment Plan (DRIP) is also available which
allows shareholders to purchase additional shares in the company.
Further information can be obtained from Equiniti, Aspect House,
Spencer Road, Lancing, West Sussex BN99 6DA. Telephone
0871 384 2268*. They can also be contacted via their website
at www.shareview.co.uk.
American Depositary Receipts
Johnson Matthey has a sponsored Level 1 American Depositary
Receipt (ADR) programme which BNY Mellon administers and
for which it acts as Depositary. Each ADR represents two
Johnson Matthey ordinary shares. The ADRs trade on the US
over-the-counter (OTC) market under the symbol JMPLY. When
dividends are paid to shareholders, the Depositary converts such
dividends into US dollars, net of fees and expenses, and distributes
the net amount to ADR holders. For enquiries, BNY Mellon can be
contacted on 1-888-BNY-ADRS (1-888-269-2377) toll free if you
are calling from within the United States. Alternatively, they can be
contacted by e-mail at shrrelations@bnymellon.com or via their
website at adrbnymellon.com.
Share Price and Group Information
Information on the company’s current share price together with
copies of the group’s annual and half-yearly reports and major
presentations to analysts and institutional shareholders are available
on the Johnson Matthey website: www.matthey.com.
The website’s Investor Relations section contains extensive
information and a number of tools which will be of assistance to
investors including historic share price information downloads and a
share price charting facility.
For capital gains tax purposes the mid-market price of the
company’s ordinary shares on 31st March 1982 was 253 pence.
Enquiries
Shareholders who wish to contact Johnson Matthey Plc on any
matter relating to their shareholding are invited to contact the
company’s registrars, Equiniti, Aspect House, Spencer Road,
Lancing, West Sussex BN99 6DA. Telephone 0871 384 2344*
or via their website www.shareview.co.uk.
Shareholders may also telephone the company on 020 7269 8400
or write to:
The Company Secretary
Johnson Matthey Plc
5th Floor
25 Farringdon Street
London
EC4A 4AB
For other enquiries shareholders may contact the Director, Investor
Relations and Corporate Communications at the above address and
telephone number.
* Calls to these numbers are charged at 8p per minute from a BT landline. Other telephony
providers’ costs may vary. Lines are open 8.30am to 5.30pm Monday to Friday.
Shareholder Information

Johnson Matthey Annual Report & Accounts 2012
Other Information
176
Global Reporting Initiative (GRI) Summary
This summary outlines where to find information in this report on the GRI core and additional indicators and topics relevant to the International
Organization for Standardization (ISO) standard on social responsibility (ISO 26000) standard core subject areas. The complete GRI Index can
be found online at www.matthey.com/AR12.
ISO 26000 Standard Core Subject Areas GRI Indicator Subject Page
Strategy and Profile
1.1 Chief Executive’s Statement 6-7
1.2 Key impacts, risks and opportunities 13-15, 20-23, 79-81
2.1 – 2.10 Organisational profile inner flap, 10, 26-42, 52,102,
123, 166-167, 174, 180
3.1 – 3.4 Report parameters 172, 180
3.5 – 3.13 Report scope, boundary and assurance 20-23, 50, 79-81, 127-130,
172-173, 176
Organisational governance 4.1 – 4.10 Corporate governance 16-17, 50, 78-117
4.11 – 4.13 Commitments to external initiatives 58, 60-61, 67, 80
4.14 – 4.17 Stakeholder engagement 48-59
Economic Performance
Management approach 12-15
EC1 Direct economic value generated and distributed 16-17, 24-47, 58,
104, 136-138
EC2 Financial implications due to climate change 13, 22-23, 29, 38, 45, 68
EC3 Coverage of the organisation’s defined benefit
plan obligations 140-147
EC4 Significant financial assistance received from government 104
EC8 Development and impact of infrastructure investments
and services provided primarily for public benefit 56-58
Environmental Performance
The environment Management approach 70-75
EN3, EN4 Energy 71
EN8 Water 73-75
EN16, EN17, EN20 Emissions 71-73
EN21 Wastewater 73-74
EN22 Waste 72-74
EN23 Significant spills 74
EN24 Hazardous waste 72
EN28 Compliance 71
Social Performance – Labour Practices
Labour practices Management approach 50-56, 62-64, 80-81
LA1, LA2, LA4 Employment 52-56
LA7 Occupational health and safety 53, 62-64
LA10 Training and education 53-55
Social Performance – Human Rights
Human rights Management approach 81
HR1 Significant investment agreements 80
HR6, HR7 Child labour, forced labour, compulsory labour 80
HR11 Grievances addressed and resolved 80
Social Performance – Society
Fair operating practices / Management approach 50, 56, 81
community involvement SO1 Community 56-59
and development SO2, SO3 Corruption 20-23, 80, 97-98
SO6 Political contributions 104
Social Performance – Product Responsibility
Consumer (customer) issues Management approach 64-66
PR1 Customer health and safety 64-66
PR2, PR4, PR9 Compliance 65
Johnson Matthey continues to develop sustainability metrics and reporting criteria in alignment with those developed by the Global
Reporting Initiative (GRI). More information on the GRI Reporting Framework can be found at www.globalreporting.org.
This report has been prepared according to the latest version of the GRI Sustainability Reporting Guidelines (G3.1) and has been
reviewed by Corporate Citizenship as part of the external assurance process in which they used the AA1000AS assurance standards as
described on page 173. This third party assurance of the report and disclosures allows Johnson Matthey to self declare a GRI B+ level.

177
HSRG Health Science Research Group
IAS International Accounting Standard
IASB International Accounting Standards Board
ICCA International Council of Chemical Associations
IFRIC International Financial Reporting Interpretations
Committee
IFRS International Financial Reporting Standards
Interest cover Underlying operating profit / net finance costs
IP Intellectual property
IPA International Platinum Group Metals Association
ISO 14000 Internationally recognised series of standards
which specify the requirements for an
environmental management system
ISO 26000 International standard giving guidelines on
social responsibility
ISO 9000 Internationally recognised series of standards
which specify the requirements for a quality
management system
JMEPS Johnson Matthey Employees Pension Scheme
KPI Key performance indicator
LBG London Benchmarking Group
LCA Life cycle assessment
LTIP Long term incentive plan
MDRC Management Development and Remuneration
Committee
MEA Membrane electrode assembly
N2O Nitrous oxide
NGO Non-governmental organisation
NOx Oxides of nitrogen
OEM Original equipment manufacturer
PBT Profit before tax
Pgm Platinum group metal
PMPD Precious Metal Products Division
PRM Process risk management
R&D Research and development
REACH Registration, Evaluation and Authorisation of
Chemicals. EU chemical control legislation
which came into force in June 2007
ROIC Return on invested capital
RPI Retail price index
SAICM Strategic Approach to International Chemicals
Management
SCR Selective catalytic reduction
SERP Supplemental Executive Retirement Plan
SIC Standing Interpretations Committee
SIP Share incentive plan
SNG Substitute natural gas
SO2 Sulphur dioxide
SSNMR Solid state nuclear magnetic resonance, a
spectroscopy technique
Syngas, synthesis gas A mixture of hydrogen and carbon oxides
The Code The UK Corporate Governance Code, issued by
the Financial Reporting Council in June 2010
TSCA Toxic Substances Control Act
UK CLG Prince of Wales’s Corporate Leaders Group
VCM Vinyl chloride monomer
VOC Volatile organic compound
Glossary of Terms
AA1000AS An assurance standard for sustainability and
corporate responsibility reporting
ABI Association of British Insurers
ADDERALL XR® An extended release product used in the
treatment of Attention Deficit Hyperactivity
Disorder
ADHD Attention deficit hyperactivity disorder
ADR American Depositary Receipt
AGM Annual general meeting
Alfa Aesar Brand name of Johnson Matthey’s Research
Chemicals business
AMOG Ammonia, Methanol, Oil and Gas
APB Auditing Practices Board
API Active pharmaceutical ingredient
Bitrex® The world’s bitterest substance which is added
to household cleaning products to prevent
accidental swallowing
CEC Chief Executive’s Committee
CGU Cash-generating unit
CHP Combined heat and power
CIA Chemical Industries Association
CO2 Carbon dioxide
COD Chemical oxygen demand
CPI Consumer price index
CRC UK government’s Carbon Reduction Commitment
CSR Corporate social responsibility
DPF Diesel particulate filter
DPT Davy Process Technology
DRIP Dividend Reinvestment Plan
EBITDA Earnings before interest, tax, depreciation and
amortisation
ECT Emission Control Technologies
EHS Environment, health and safety
EIB European Investment Bank
EPS Earnings per share
ERT Electrical resistance tomography
ESOT Employee Share Ownership Trust
ETF Exchange Traded Fund
EU European Union
EU ETS European Union Emission Trading Scheme
FRC Financial Reporting Council
FSA’s DTR The UK Financial Services Authority’s Disclosure
and Transparency Rules
Fuel cell Technology which converts hydrogen or other
fuels (methanol, natural gas) into clean electricity
GHS Globally Harmonised System of Classification
and Lhttps://courseworkhero.co.uk/lling of Chemicals
GRI Global Reporting Initiative
Group Control The group’s compendium of policies, procedures
Manual and rules which is distributed to all group
operations
GTL Gas to liquids, multi stage catalytic process
used to convert, for example, stranded natural
gas into sulphur free hydrocarbons, including
diesel fuel
GWP Global warming potential
HDD Heavy duty diesel
HR Human resources

Johnson Matthey Annual Report & Accounts 2012
Other Information
178
Index
Page
Group Performance Review 16-17
Group Strategy 12-15
Guarantees (note 27) 159
Health and Safety 60-67
Human resources policies 81
Income statement 122
Intangible assets (note 17) 151-152
Inventories (notes 6, 20) 134, 153
Investments in available-for-sale assets (note 19) 152
Johnson Matthey at a Glance inner flap
Johnson Matthey – our business 10-11
Key management personnel (note 12) 138
Key Performance Indicators 18-19
Key sources of estimation uncertainty (note 41) 166-167
Liquidity and Going Concern 47
Long term contracts (note 23) 154
Major impairment and restructuring charges (note 3) 133
Net debt (note 24) 154
Nomination Committee Report 105
Non-controlling interests 125
Operating leases (note 6, 36, 37) 134, 165
Operating profit (note 6) 134
Other reserves (note 33) 163
Outlook 9
Payables (note 22) 153
Pensions and other post-employment
benefits (and note 14) 45, 140-147
Performance Highlights inner cover
Precious metal operating leases (note 36) 165
Precious Metal Products Division 34-39
Property, plant and equipment (note 15) 148-149
Provisions (note 28) 160-161
Receivables (note 21) 153
Related parties (note 38) 165
Remuneration Report 108-117
Research and development (and note 6) 14-15, 134
Responsibility of Directors 120
Restatement of acquisition (note 39) 166
Return on invested capital 44
Revenue analysis (note 2) 133
Risks and Uncertainties 20-23
Segmental information (note 1) 131-133
Share-based payments (note 13) 138-139
Share capital (note 30) 162
Shareholder Information 174-175
Social performance 48-59
Stakeholder engagement 50-51
Standards adopted in year 130
Standards not yet applied 130
Statement of changes in equity 125-126
Statutory information 100-104
Subsidiaries (notes 18, 42) 152, 167
Supply chain management 80
Sustainability 13-15, 17, 79-81
Taxation (and notes 9, 29) 44-45, 135, 161-162
Treasury Policies 47
Verification and Assurance – Non-Financial Data 173
Page
Accounting Policies 127-130
Amortisation of acquired intangibles (note 4) 133
Assurance – non-financial data 173
Audit Committee Report 106-107
Audit fees (note 5) 134
Auditor’s report 121
Balance sheets 123
Basis of Reporting – Non-Financial Data 172
Board of Directors 82-83
Borrowings (note 24) 154
Business integrity and ethics 80
Business Review inner cover-75
Capital expenditure by segment (note 1) 131-132
Capital expenditure to depreciation 45
Capital structure and management (and note 27f) 46, 160
Cash and cash equivalents (note 35) 164
Cash flow hedges transferred to income (note 6) 134
Cash flow statements (and note 34) 45, 124, 164
Chairman’s Statement 6-7
Chief Executive’s Statement 8-9
Corporate Governance Code Compliance 85
Commitments (note 37) 165
Community investment and charitable programmes 56-58
Company Details 180
Comprehensive income (and notes 31, 32) 122, 162-163
Contingent liabilities (note 28) 160-161
Corporate Governance Report 84-99
Deferred tax (notes 9, 29) 135, 161-162
Depreciation and amortisation (note 6) 134
Directors’ report inner cover-117
Discontinued operations (note 40) 166
Dividends (and note 10) 45, 136
Earnings per ordinary share (and note 11) 45, 136-137
Employee numbers and expense (note 12) 137
Employee share ownership trust (ESOT) (note 30) 162
Employment policies 81
Environmental Technologies Division 26-33
Environment 68-75
Environment, health and safety policies and systems 80-81
Equity 125-126
Finance costs / income (notes 7, 8) 135
Finance leases (notes 24, 37) 154, 165
Financial assets (note 25) 155
Financial Calendar 179
Financial liabilities (note 26) 155
Financial Review 43-46
Financial Review of Operations 26-42
Financial risk management (and note 27) 47, 155-160
Fine Chemicals Division 40-42
Five Year Record – Financial Data 170
Five Year Record – Non-Financial Data 171
Foreign exchange gains and losses (note 6) 134
Global Reporting Initiative (GRI) Summary 176
Glossary of Terms 177
Going Concern 47
Goodwill (note 16) 150-151
Governance 76-117
Grants (note 6) 134

179
Financial Calendar 2012/13
2013 (provisional)
5th February
Payment of interim dividend
6th June
Announcement of results for the year ending 31st March 2013
12th June
Ex dividend date
14th June
Final dividend record date
25th July
122nd AGM
6th August
Payment of final dividend subject to declaration at the AGM
2012
25th July
121st Annual General Meeting (AGM)
1st August
Ex dividend date (final dividend)
3rd August
Record date (final dividend, special dividend and share consolidation)
6th August
Ex dividend date (special dividend)
Share consolidation takes effect (subject to approval at the AGM)
17th August
Payment of final dividend and special dividend (subject to declaration
at the AGM)
21st November
Announcement of results for the six months ending
30th September 2012
28th November
Ex dividend date
30th November
Interim dividend record date

180 Johnson Matthey Annual Report & Accounts 2012
Other Information
Registered Office
5th Floor
25 Farringdon Street
London EC4A 4AB
Telephone: +44 (0)20 7269 8400
Fax: +44 (0)20 7269 8433
Internet address: www.matthey.com
E-mail: jmpr@matthey.com
Registered in England – Number 33774
Professional Advisers
Auditor
KPMG Audit Plc
15 Canada Square
London E14 5GL
Brokers
Merrill Lynch International J. P. Morgan Cazenove
2 King Edward Street 25 Bank Street
London EC1A 1HQ Canary Wharf
London E14 5JP
Lawyers
Herbert Smith LLP Taylor Wessing LLP
Exchange House 5 New Street Square
Primrose Street London EC4A 3TW
London EC2A 2HS
Registrars
Equiniti
Aspect House
Spencer Road
Lancing
West Sussex BN99 6DA
Telephone: 0871 384 2344*
Internet address: www.shareview.co.uk
* Calls to this number are charged at 8p per minute from a BT landline. Other telephony providers’ costs may vary.
Lines are open 8.30am to 5.30pm Monday to Friday.
Company Details

PAGE

-2-

The TMA:

The TMA requires you to:

1- Conduct a simple information search using the Internet.

2- Present your findings in not more than 1,600 words. The word count excludes headings, references, title page, and diagrams.

3- You should use a Microsoft Office Word and Times New Roman Font of 14 points.

4- You should read and follow the instructions below carefully. Each part of the process will carry marks for the assignment.

Criteria for Grade Distribution:

Criteria	Content	Using E-library & Referencing	Structure and Presentation of ideas	Total marks
Financial Reporting on the Internet: Johnson Matthey Plc
Marks	90		5	100

The TMA Questions

Financial Reporting on the Internet

(Case study: Johnson Matthey Plc)

The internet is a good place to get information that is useful to you in your study of accounting. For example, you can find information about current events, professional accounting organizations, and specific companies that may support your study.

Johnson Matthey is a global specialty chemicals company underpinned by science, technology and its people. A leader in sustainable technologies, many of the group’s products enhance the quality of life of millions through their beneficial impact on the environment, human health and wellbeing.

The world has changed a lot since Johnson Matthey’s foundation in 1817. From its early days as a precious metals assayer, the company has always sought to build on its strengths and respond to changing global needs. Today the group continues to apply its expertise in science and innovation to develop world leading products and technologies for customers around the world.

Instructions

Use the annual report and accounts of 2011/2012 to answer the following questions:

1- Accounting and financial reporting is highly regulated in the UK. Financial accounting standards specify the types of information to be reported and how accounting numbers are to be calculated. Listed below are groups who benefit from these standards. For each group, explain why financial accounting standards are important. Substantiate your answer by different examples from the annual report.

a- Board of directors

b- Stockholders and Creditors

c- KPMG Audit Plc.

[Marks (Words): 12(300)]

2- Johnson’ financial statements are followed by a series of explanatory notes. What are some of the subjects covered by those notes? If Johnson does a good job presenting its financial statements, why are notes necessary?

[Marks (Words): 5(100)]

3- Discuss several limitations of Johnson’s income statement. Substantiate your answer by three different examples from the annual report.

[Marks (Words): 6(200)]

4- Assume that during 2011/2012, steadily increasing Johnson’s purchase costs, which inventory flow assumption results in the highest reported profit? The lowest taxable income? The valuation of inventory that closest to current replacement cost? Briefly explain your answers.

[Marks (Words): 6(80)]

5- Assume that this is the first year of Johnson’s operation; there were numerous purchases of identical items of merchandise. However, there was no change during 2011 in prices paid for this merchandise. Under these special circumstances, how would the financial statements be affected by the choice between the FIFO and LIFO methods of inventory valuation?

[Marks (Words): 4(50)]

6- Assume that Johnson operates in two locations: Cambridge and Chilton. The LIFO method is used in accounting for inventories at the Cambridge facility and the specific identification method for inventories at the Chilton location. Does this concurrent use of two inventory methods indicate that Johnson is violating the accounting principle of consistency? Explain.

[Marks (Words): 5(100)]

7- List several principles to be observed by Johnson in establishing strong internal control over cash receipts.

[Marks (Words): 7(200)]

8- Explain how each of the following is presented in (1) a multiple-step income statement and (2) a statement of cash flows for Johnson:

a- Johnson made an adjusting entry to create (or increase) the allowance for doubtful accounts.

b- Johnson made an adjusting entry to increase the balance in the Marketable Securities account to a higher market value (assume these investments are classified as available-for-sale securities).

[Marks (Words): 8(90)]

9- On average, for how many days do Johnson’s accounts receivable remain outstanding before collection?

[Marks (Words): 4(50)]

10- In what accounting period does the matching principle indicate that an expense should be recognized?

[Marks (Words): 4(30)]

11- Johnson’s statement of financial position includes freehold buildings of £432.3 millions. Should depreciation continue to be recorded on a building when ample evidence exists that the current market value is greater than original cost and that the rising trend of market values is continuing? Explain.

[Marks (Words): 5(50)]

12- Explain the meaning of an impairment of an asset. Provide several examples from Johnson’s 2012 annual report. What accounting event should occur when an asset has become substantially impaired?

[Marks (Words): 5(80)]

13- Under what circumstances Johnson’s goodwill should be recorded in its accounts?

[Marks (Words): 5(80)]

14- Which of the following characteristics would prevent Johnson’s item from being included in the classification of plant and equipment?

a- Intangible,

b- Limited life,

c- Unlimited life,

d- Held for sale in the regular course of business,

e- Not capable of rendering benefits to Johnson.

[Marks (Words): 6(30)]

15- The following is a note accompanying the annual report of Johnson (See p. 128 from 2012 annual report):

Depreciation is provided at rates calculated to write off the cost less estimated residual value of each asset over its useful life. Certain freehold buildings and plant and equipment are depreciated using the units of production method, as this more closely reflects their expected consumption. All other assets are depreciated using the straight line method. The useful lives vary according to the class of asset, but are typically: leasehold property 30 years (or the life of the lease if shorter); freehold building 30 years; and plant and equipment 4 to 10 years. Freehold land is not depreciated.

a- Are the depreciation methods used in Johnson’s annual report determined by current income tax laws? If not, who is responsible for selecting these methods? Explain.

b- Does Johnson violate the consistency principle by using different depreciation methods for its assts? If not, what does the principle of consistency mean? Explain.

c- What is the estimated depreciation rate of freehold building and plant and equipment?

d- Who determines the useful lives over which specific assets are to be depreciated?

[Marks (Words): 8(160)]

[Total Marks (Words) = 90(1,600)]

In your answer, you should explain each point or inquire separately. Use the following headings (below) to make up the different sections of your work:

Cover	The PT3 form ( available on LMS )
Contents	Title and contents page
TMA	Financial Reporting on the Internet (Case study: Johnson Matthey Plc)
References	Recorded according to the Harvard style – Available on LMS

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