Throughout the year, the group has been in compliance with the provisions of the Code with the exception of those matters noted below.

Directors and the Board
The board is responsible to the shareholders for the group's system of corporate governance, its strategic objectives and the stewardship of the company's resources. The board meets at least seven times per year and delegates specific responsibilities to board committees, as described below. The board reviews the key activities of the business, and receives papers and presentations to enable it to do so effectively. The Company Secretary is responsible to the board, and is available to individual directors, in respect of board procedures.

The board comprises the Chairman (who is the recognised Senior Independent Director), the Chief Executive, four other executive directors and six other independent non-executive directors. The role of non-executive directors is to enhance independence and objectivity of the board's deliberations and decisions. The executive directors have specific responsibilities, which are detailed on pages 22 and 23, and have direct responsibility for all operations and activities.

Sub-Committees
The Chief Executive's Committee is responsible for the recommendation to the board of strategic and operating plans and on decisions reserved to the board where appropriate. It is also responsible for the executive management of the group's business. The Committee is chaired by the Chief Executive and meets monthly. It comprises the executive directors and four senior executives of the company.

The Audit Committee is a sub-committee of the board whose purpose is to assist the board in the effective discharge of its responsibilities for financial reporting and corporate control. The Committee is chaired by Mr H R Jenkins and meets twice a year. It comprises all the non-executive directors with the Chief Executive, the Finance Director and the external and internal auditors in attendance.

The Nomination Committee is a sub-committee of the board responsible for advising the board and making recommendations on the appointment of new directors. The Committee is chaired by Mr H M P Miles and comprises all the non-executive directors.

The Management Development and Remuneration Committee (MDRC) is a sub-committee of the board which determines on behalf of the board the remuneration of the Chief Executive, executive directors and senior management. The Committee is chaired by Mr H M P Miles and comprises all the non-executive directors. The Chief Executive and Company Secretary attend by invitation except when their own performance and remuneration are discussed.

The Company Secretary is secretary to all of the sub-committees except the Chief Executive's Committee.

Directors' Remuneration
The Remuneration Report on pages 33 to 40, includes details of remuneration policies and of the remuneration of the directors.

Relations with Shareholders
The company reports formally to shareholders twice a year, when its half year and full year results are announced and an interim report and a full report are issued to shareholders. At the same time, executive directors give presentations on the results to institutional investors, analysts and the media in London and other international centres.

The Annual General Meeting (AGM) of the company takes place in London and formal notification is sent to shareholders with the annual report at least 20 working days in advance of the meeting. The directors are available, formally during the AGM, and informally afterwards, for questions. Details of the 1999 AGM are set out in the notice of the meeting enclosed with this annual report.

During the year, the Chief Executive, Finance Director and executive directors maintain a dialogue with institutional shareholders on the company's progress through a programme of meetings. All executive directors speak regularly at external conferences and presentations.

Accountability, Audit and Internal Control
In its reporting to shareholders, the board aims to present a balanced and understandable assessment of the group's financial position and prospects.

Following guidance from the London Stock Exchange in December 1998, the directors confirm that they have reviewed the effectiveness of the group's system of internal financial controls. However, in the absence of guidance from the Institute of Chartered Accountants in England and Wales, the directors have not undertaken a formal review of the effectiveness of the group's system of non-financial controls, including operational and compliance controls and risk management. The board expects to be able to report that it has reviewed the effectiveness of internal controls in future years when the formal guidance has been published.

Key elements of the group's system of internal controls are described below:

The board has overall responsibility for the group's system of internal controls, which are designed to meet the group's needs and address the risks to which it is exposed. Such a system can provide reasonable but not absolute assurance against material misstatement or loss.

The group's organisational structure is focused on its four wholly owned divisions. These entities are all separately managed, but report to the board through a board director. The executive management team receive monthly summaries of financial results from each division through a standardised reporting process.

The board meets annually to consider the strategy for individual divisions and again annually to review three year financial plans. The group has in place a comprehensive annual budgeting process including forecasts or the next two years. Variances from budget are closely monitored. The group's treasury policies are discussed in the financial review on page 10. The principal aspects of these policies are approved by the board. Specific criteria exist for the approval of significant contracts and other legal agreements. A committee of the board reviews significant items of this nature.

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 business units or departments. The high intrinsic value of many of the metals with which the group is associated necessitates stringent physical controls over precious metals held at the group's sites.

The internal audit function is responsible for monitoring the group's systems of internal financial controls and the control and the integrity of the financial information reported to the board. The Audit Committee receives the reports produced by the internal audit function on a regular basis. Actions are agreed with management in response to the internal audit reports produced.

In addition, significant business units through a programme of self-assessment provide assurance on the maintenance of financial controls and compliance with group policies. These assessments are summarised by the internal audit function and a report is made annually to the Audit Committee.

Non-Compliance
The items in the Code with which the group did not comply in full throughout the period together with the appropriate Code reference are stated below:

The company ensures that it recruits to the board only individuals of sufficient calibre, knowledge and experience to fulfil the duties of a director appropriately. There is currently no formal training programme for directors (A.1.6).

The offices of Chairman and Chief Executive are held separately. Prior to 9th June 1998 the offices were combined (A.2.1).

The executive directors are employed on contracts subject to two years' notice at any time, which the MDRC considers appropriate in the overall context of the executive directors' terms of employment. It is not currently proposed that this should be reduced further for existing service contracts. In the event of early termination of service contracts the MDRC strongly endorses the principle of requiring the directors to mitigate their loss (B.1.7).

Going Concern
The directors have a reasonable expectation that the group has sufficient resources to continue in operational existence for the foreseeable future and have, therefore, adopted the going concern basis in preparing the accounts.