Vesuvius PLC — Capital/Financing Update 2012

Nov 1, 2012

Prospectus dated 1 November 2012

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt as to the action you should take, you are recommended to seek your own independent financial advice immediately from your stockbroker, bank manager, solicitor, accountant or other independent financial adviser authorised under the Financial Services and Markets Act 2000 if you are resident in the United Kingdom or, if not, another appropriately authorised independent financial adviser.

This document has been prepared in connection with the demerger of the Performance Materials division from the Cookson Group and on the assumptions that the Scheme will become effective in accordance with its terms and that the Demerger will become effective as proposed.

This document comprises a prospectus relating to Alent plc prepared in accordance with the Prospectus Rules made under section 73A of the Financial Services and Markets Act 2000. This document has been filed with the Financial Services Authority and has been made available to the public in accordance with section 3.2 of the Prospectus Rules.

Investors should read the whole of this document and any information incorporated by reference into it, including, in particular, the risk factors set out in Part II: “ Risk Factors ” of this document.

The Alent Directors, whose names appear on page 22 of this document, and Alent plc accept responsibility for the information contained in this document. To the best of the knowledge of Alent plc and the Alent Directors (who have taken all reasonable care to ensure that such is the case), the information contained in this document is in accordance with the facts and contains no omission likely to affect the import of such information.

ALENT PLC

(incorporated in England and Wales with registered number 8197966)

Prospectus

Admission to the premium listing segment of the Official List and to trading on the London Stock Exchange of up to 278,700,000 Alent Shares

Sponsor and Financial Adviser

Rothschild

Application will be made to the UK Listing Authority and the London Stock Exchange for up to 278,700,000 Alent Shares to be admitted to the premium listing segment of the Official List and to trading on the London Stock Exchange’s main market for listed securities, respectively.

It is expected that Admission of the Alent Shares will become effective and that dealings in the Alent Shares will commence on the London Stock Exchange at 8.00 a.m. (London time) on 19 December 2012. No application has been or is currently intended to be made for the Alent Shares to be admitted to listing elsewhere or to be traded on any other exchange.

The distribution of this document in certain jurisdictions other than the United Kingdom may be restricted by law. Accordingly, neither this document nor any advertisement may be distributed or published in any jurisdiction except under circumstances that will result in compliance with any applicable laws and regulations. Persons into whose possession this document comes should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

This document does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities to any person in any jurisdiction or in any circumstances in which such offer or solicitation is unlawful. This document has not been passported, and will not be passported, into any EEA jurisdiction outside the United Kingdom.

This document is intended solely for holders of Cookson Shares and, following the Scheme becoming effective, Vesuvius Shares.

No Alent Shares have been marketed to, nor are available for purchase by, the public in the United Kingdom or elsewhere in connection with the introduction of the Alent Shares to the premium listing segment of the Official List or the Proposals. This document does not constitute an offer or invitation for any person to subscribe for or purchase any securities in Alent plc or any other company.

Rothschild, which is authorised and regulated in the United Kingdom by the FSA, is acting as financial adviser and sponsor to Cookson and as financial adviser and sponsor to the listing of Alent plc and Vesuvius plc and for no one else in connection with the Proposals and will not be responsible to anyone other than Cookson, Alent plc and Vesuvius plc for providing the protections afforded to clients of Rothschild, nor for providing advice in relation to the Proposals or any other matter or arrangement referred to in this document. This statement does not seek to limit or exclude responsibilities or liabilities which may arise under the FSMA or the regulatory regime established thereunder.

Each of BofA Merrill Lynch and UBS is acting for Alent plc as joint broker in connection with the listing of Alent plc and, subject to the preceding and following paragraphs, will not be responsible to anyone other than Alent plc for providing the protections afforded to its respective clients or for providing advice in relation to this document and the Proposals or for providing advice in connection with the proposed listing or admission to trading of the Alent Shares or any other matters referred to in this document, other than to the extent required by law or appropriate regulation in the United Kingdom. Each of BofA Merrill Lynch and UBS is authorised and regulated in the United Kingdom by the Financial Services Authority. This statement does not seek to limit or exclude responsibilities or liabilities which may arise under the FSMA or the regulatory regime established thereunder.

Apart from the responsibilities and liabilities, if any, which may be imposed on Rothschild, BofA Merrill Lynch or UBS by the FSMA or the regulatory regime established thereunder, none of Rothschild, BofA Merrill Lynch or UBS or any person affiliated with any of them accepts any responsibility whatsoever nor makes any representation or warranty, express or implied, in respect of the contents of this document and/or any information incorporated by reference, including its accuracy, completeness or verification or for any other statement made or purported to be made by any of them, or on behalf of them, in connection with the Cookson Group, Alent, Vesuvius or the Proposals and nothing in this document is or shall be relied upon as a promise or representation in this respect, whether as to the past or future. Each of Rothschild, BofA Merrill Lynch or UBS accordingly disclaims, to the fullest extent permitted by applicable law, all and any responsibility and liability whatsoever, whether arising in tort, contract or otherwise (save as referred to above), which any of them might otherwise have in respect of this document.

Overseas Shareholders

The implications of the Proposals for, and the distribution of this document to, Overseas Shareholders may be affected by the laws of the relevant jurisdictions in which such Overseas Shareholders are located. Such Overseas Shareholders should inform themselves about, and observe, all applicable legal and regulatory requirements.

No action has been taken to permit the distribution of this document in any jurisdiction where any action would be required for such purpose.

It is the responsibility of any person into whose possession this document comes to satisfy themselves as to their full observance of the laws of the relevant jurisdiction in connection with the Proposals and the distribution of this document, including the obtaining of any governmental, exchange control, regulatory or other consents which may be required and/or compliance with other necessary formalities which are required to be observed and the payment of any issue, transfer or other taxes due in such jurisdiction.

Overseas Shareholders should consult their own legal, financial and tax advisers with respect to the legal, financial and tax consequences of the Proposals in their particular circumstances.

NOTICE TO INVESTORS IN THE UNITED STATES

The Alent Shares have not been and will not be registered under the US Securities Act of 1933 (the “Securities Act”), or under the securities laws of any state or other jurisdiction of the United States. Accordingly, the Alent Shares may not be offered, sold, resold, delivered, distributed or otherwise transferred, directly or indirectly, in or into the United States absent registration under the Securities Act or an exemption therefrom. A Cookson Shareholder who is an affiliate of Alent plc prior to the Scheme Effective Time will be subject to certain US transfer restrictions relating to the Alent Shares received pursuant to the Scheme. For a description of these and certain further restrictions on offers, sales and transfers of the Alent Shares and the distribution of this document see Part III: “ Important Information ” of this document.

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The Alent Shares have not been approved or disapproved by the US Securities and Exchange Commission, any state securities commission or any other US regulatory authority, nor have any of the foregoing authorities passed upon or determined the adequacy or accuracy of the information contained in this document. Any representation to the contrary is a criminal offence in the United States.

General Notice

Nothing contained in this document is intended to constitute investment, legal, tax, accounting or other professional advice. This document is for your information only and nothing in this document is intended to endorse or recommend a particular course of action. You should consult with an appropriate professional for specific advice rendered on the basis of your situation.

The contents of the websites of Alent plc, Vesuvius plc and Cookson do not form part of this document.

Capitalised terms have the meanings ascribed to them in Part XV: “ Definitions ” of this document.

Certain information is incorporated by reference into this document as set out in Part XIV: “ Information Incorporated by Reference ” of this document.

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TABLE OF CONTENTS

	Page
PART I SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
PART II RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11
PART III IMPORTANT INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	18
PART IV EXPECTED TIMETABLE OF PRINCIPAL EVENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	20
PART V DIRECTORS, COMPANY SECRETARY, REGISTERED OFFICE AND ADVISERS . . . . . . . .	22
PART VI INFORMATION ON THE PROPOSALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	24
PART VII INFORMATION ON ALENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	25
PART VIII OPERATING AND FINANCIAL REVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	38
PART IX HISTORICAL FINANCIAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	67
PART X UNAUDITED PRO FORMA FINANCIAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . .	124
PART XI TAXATION CONSIDERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	128
PART XII DIRECTORS, RESPONSIBLE PERSONS AND CORPORATE GOVERNANCE . . . . . . . . . . .	133
PART XIII ADDITIONAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	147
PART XIV INFORMATION INCORPORATED BY REFERENCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	176
PART XV DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	177
PART XVI GLOSSARY OF TECHNICAL TERMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	184

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PART I SUMMARY

Summaries are made up of disclosure requirements known as “Elements”. These Elements are numbered in Sections A to E (A.1 – E.7). This summary contains all the Elements required to be included in a summary for this type of securities and issuer. Since some Elements are not required to be addressed, there may be gaps in the numbering sequence of the Elements. Even though an Element may be required to be inserted in the summary because of the type of securities and issuer, it is possible that no relevant information can be given regarding the Element. In this case, a short description of the Element is included in the summary with the mention of “not applicable”.

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Section A – Introduction and Warnings
Element Disclosure requirement
A.1 Introduction and warnings
• This summary should be read as an introduction to the prospectus;
• Any decision to invest in the securities should be based on consideration of the prospectus as a
whole by the investor;
• Where a claim relating to the information contained in this prospectus is brought before a
court, the plaintiff investor might, under the national legislation of the Member States, have to
bear the costs of translating the prospectus before the legal proceedings are initiated; and
• Civil liability attaches only to those persons who have tabled the summary including any
translation thereof, but only if the summary is misleading, inaccurate or inconsistent when
read together with the other parts of the prospectus or it does not provide, when read together
with the other parts of the prospectus, key information in order to aid investors when
considering whether to invest in such securities.
A.2 Resale or final placement of Alent Shares by financial intermediaries
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Not applicable. No consent is given by Alent plc for the subsequent resale or final placement of Alent Shares by financial intermediaries.

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Section B – Company
Element Disclosure requirement
B.1 The legal and commercial name of the Company
Alent plc.
B.2 Domicile and legal form of the Company
Alent plc is a public limited company, incorporated in England with registered number 8197966
and its registered office situated in England. Alent plc operates under the Companies Act 2006.
B.3 Current operations and principal activities of the Company and the principal markets in
which it competes
Alent is a leading global supplier of advanced surface treatment and plating chemicals and
electronics assembly materials. The principal end-market is global electronics production, which
Alent estimates to account for approximately three quarters of its revenue. The automotive and
other industrial markets represent the remaining quarter of revenue. The geographic split of the net
sales value (being revenue excluding commodity metals where the costs of these are passed through
to customers) of Alent is broadly one third in each of Europe, Asia and the Americas. Alent is
present in over 100 countries and has over 2,500 employees and 23 major manufacturing sites
worldwide. Alent had revenue of £814 million, net sales value of £418 million and a trading profit
of £100 million in the year ended 31 December 2011.
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Element Disclosure requirement
B.4a Significant recent trends affecting the Company and the industries in which it operates
In the electronics market, there is a strong trend towards increased connectivity and portability in
the consumer electronics industry. Consumer demand is for faster, smaller and lighter products,
which is leading to increasing miniaturisation and complexity and the use of multi-layer circuit
boards. Alent is at the leading edge of this trend and is a leading player in the development and
supply of specialty chemicals into these fast-growing niches.
According to Prismark in August 2012, end-market sales of electronic goods is, on average,
forecast to grow by 5.8 per cent. CAGR from 2012 to 2016 in value terms, along with significant
growth in the size of the key markets in which Alent’s products are used. However, the volume of
electronic devices is a key growth driver for Alent. The electronics industry has historically been a
“price down” industry, with reduced prices for each generation of product, which means that
forecasts of market growth by value tend to understate the market growth by volume, which is the
key driver of demand for Alent’s products.
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As in the electronics end-market, volume is a key driver of demand for Alent’s products in the industrial automotive segment. Vehicle volumes are expected to grow with a CAGR of approximately 6 per cent. from 2012 to 2015. In addition, there is a strong trend for increased electronic content in vehicles and increasing demand for functional and decorative coatings, which benefits both of Alent’s businesses. This dynamic will enable Alent to benefit from a twofold increase, both of a growing underlying market, as well as an increase in product penetration.

The need for improved corrosion-resistant and wear-resistant coatings, driven by the need to provide longer warranty protection to customers, increases demand for Alent’s products. The improved quality of automotives and need to reduce their weight is also driving higher demand for increasingly sophisticated decorative finishes which both enhance customer perception of the vehicle and enable lower weight materials (e.g. plastics) to be used in their production.

B.5 Description of the Group and the Company’s position within the Group the parent company of Alent. B.6 Relationship with major shareholders

Alent plc is a new holding company which, with effect from the Demerger Effective Time, will be the parent company of Alent.

As at 30 October 2012 (being the latest practicable date prior to the publication of this document), insofar as it is known to Alent plc, by reference to relevant notifications to Cookson made in accordance with rule 5.1 of the Disclosure and Transparency Rules, the name of each person who holds voting rights representing 3 per cent. or more of the total voting rights in respect of Cookson Shares, and the amount of such person’s holding of the total voting rights in respect of Alent Shares following the Scheme becoming effective is expected to be as follows:

	Number	Percentage		Percentage
	of	of Cookson	Number	of Alent
	Cookson	issued share	of Alent	issued share
Name	Shares	capital(%)	Shares	capital(%)
Cevian Capital II G.P. Ltd* . . . . . . . . . . . . . . . . . . .	55,693,446	20.01	55,693,446	20.01
Morgan Stanley Securities Ltd . . . . . . . . . . . . . . . .	16,457,178	5.91	16,457,178	5.91
AXA S.A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	14,767,157	5.34	14,767,157	5.34
Pelham Capital Management LLP . . . . . . . . . . . . . .	14,431,888	5.22	14,431,888	5.22
Standard Life Investments Ltd . . . . . . . . . . . . . . . . .	13,546,133	4.87	13,546,133	4.87
Lloyds Banking Group plc . . . . . . . . . . . . . . . . . . . .	13,213,880	4.78	13,213,880	4.78
BlackRock, Inc . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	12,324,264	4.46	12,324,264	4.46
Fidelity Investments Limited . . . . . . . . . . . . . . . . . .	11,596,056	4.20	11,596,056	4.20
Governance for Owners LLP . . . . . . . . . . . . . . . . . .	11,199,895	4.05	11,199,895	4.05

• Lars Förberg, a Non-Executive Director, is also managing partner of Cevian Capital AG, an investment adviser to the Cevian Capital II G.P. Ltd, which held just over 20 per cent. of Cookson’s issued share capital on the date of his appointment and as at 30 October 2012 (being the latest practicable date before publication of this document).

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Element Disclosure requirement

Save as disclosed above, and by reference to relevant notifications to Cookson made in accordance with rule 5.1 of the Disclosure and Transparency Rules, Alent plc is not aware of any person who, as at 30 October 2012 (being the latest practicable date prior to the publication of this document), directly or indirectly, has a holding which exceeds the threshold of 3 per cent. or more of the total voting rights attaching to the issued share capital of Cookson.

Alent plc is not aware of any persons who, as at 30 October 2012 (being the latest practicable date prior to the publication of this document), directly or indirectly, jointly or severally, will exercise or could exercise control over Alent plc nor is it aware of any arrangements the operation of which may at a subsequent date result in a change in control of Alent plc.

None of the shareholders referred to above has or will have different voting rights from any other holder of Shares in Alent plc in respect of any Shares held by them.

B.7 Selected historical key financial information

Alent’s financial information set out below has been extracted without material adjustment from Part IX “ Historical Financial Information ” of this document. Investors should read the whole of this document and not rely just on key or summarised information.

SUMMARY ALENT INCOME STATEMENT

Summary income statement (at reported exchange rates, audited for FY 2009, FY 2010, FY 2011, and HY 2012 and unaudited for HY 2011) of Alent’s results.

Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . Net sales value . . . . . . . . . . . . . . . . . . . . . . Trading profit . . . . . . . . . . . . . . . . . . . . . . . Profit from operations . . . . . . . . . . . . . . . . . Profit before tax . . . . . . . . . . . . . . . . . . . . . Income tax charge . . . . . . . . . . . . . . . . . . . . (Loss)/profit for the period . . . . . . . . . . . . . Earnings per share attributable to owners of the parent: – basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – diluted . . . . . . . . . . . . . . . . . . . . . . . . . . .	FY 2009 (Audited) 529.9 340.2 39.2 8.8 7.0 (8.1) (1.1) (0.4) (0.4)	FY 2010 (Audited) 720.9 410.2 71.0 66.9 64.1 (7.4) 56.7 20.5 20.5	FY 2011 (Audited) (£m) 814.4 417.7 99.6 99.7 94.7 (20.0) 74.7 (pence) 27.1 27.0	HY 2011 (Unaudited) 417.7 206.6 45.0 45.0 44.3 (7.9) 36.4 13.2 13.2	HY 2012 (Audited)
					362.4 204.8 50.0 47.2 46.5 (9.1) 37.4 13.5 13.5

SUMMARY ALENT AUDITED GROUP FINANCIAL POSITION

Summary statement of financial position (at reported exchange rates) of Alent.

Non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Non-current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net assets / Total invested capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	FY 2011 HY 2012 (£m) 408.0 414.3 256.5 272.5 664.5 686.8 (126.6) (101.0) (79.9) (65.7) 458.0 520.1	HY 2012

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Element	Disclosure requirement
B.8	Selected key pro forma financial information Adjustments Alent as at 30 June 2012 Debt adjustment Alent pro forma as at 30 June 2012 (£m) Non-current assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 414.3 — 414.3 Current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 272.5 — 272.5 Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 686.8 — 686.8 Non-current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . 65.7 233.6 299.3 Current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101.0 — 101.0 Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166.7 233.6 400.3 Net assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 520.1 (233.6) 286.5 Because of its nature, the pro forma financial information addresses a hypothetical situation and, therefore, does not represent Alent’s actual financial position or results.
B.9	Profit forecast or estimate Not applicable. No profit forecast or estimate has been included in this prospectus.
B.10	A description of the nature of any qualifications in the accountant’s report on the historical financial information Not applicable. There are no qualifications to the accountant’s report on the historical financial information.
B.11	Working capital Not applicable. In the opinion of Alent plc, the working capital available to the Group is sufficient for Alent’s present requirements, that is, for the next 12 months following the date of this prospectus.
	Section C – Shares
Element	Disclosure requirement
C.1	Details of the Proposals This prospectus has been prepared in connection with the demerger of the Performance Materials division from the Cookson Group proposed to be effected through a court-sanctioned scheme of arrangement and capital reduction of Vesuvius plc and is intended solely for holders of Cookson Shares and, following the Scheme becoming effective, Vesuvius Shares. Following the Demerger, Alent plc will be the new holding company of Alent. Application will be made to the UK Listing Authority and the London Stock Exchange for up to 278,700,000 Alent Shares to be admitted to the premium segment of the Official List and to trading on the London Stock Exchange’s main market for listed securities, respectively. When admitted to trading, the Alent Shares will be registered with ISIN number GB00B7T18K89.
C.2	Currency of the Shares The currency of the Alent Shares is British pound sterling.
C.3	Number of shares in issue and par value Up to 278,700,000 Alent Shares will be issued as fully paid to holders of Vesuvius Shares as part of the Proposals. The nominal value of the Alent Shares at their time of issue will be determined by the Board prior to their issue. Following the Alent Capital Reduction Effective Date, the nominal value of the Alent Shares will be 10 pence. No ordinary shares are issued and not fully paid.

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Element Disclosure requirement
C.4 Rights attaching to the Shares
The Alent Shares will, on Admission, rank pari passu in all respects and will rank in full for all
dividends and other distributions thereafter declared, made or paid on the ordinary share capital of
Alent plc.
C.5 Restrictions on the free transferability of the Shares
There are no restrictions on the free transferability of the Alent Shares.
C.6 Applications for admission to trading on a regulated market and identity of all the regulated
markets where the Shares are or are to be traded
Application will be made to the UK Listing Authority for up to 278,700,000 Alent Shares to be
admitted to the premium listing segment of the Official List and to the London Stock Exchange for
such Shares to be admitted to trading on the London Stock Exchange’s main market for listed
securities. No application has been or is currently intended to be made for the Alent Shares to be
admitted to listing elsewhere or to be traded on any other exchange.
C.7 A description of dividend policy
Alent expects to be a highly cash generative business with the opportunity for attractive capital
investment to enhance its growth prospects, both through organic investments, including new
product development, and acquisitions. The board of Alent intends to pursue a dividend policy that
reflects this strategy whilst also delivering shareholders high quality, long-term dividend growth.
The first dividend under this new policy is expected to be declared at the interim results for the half
year ending 30 June 2013.
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Section D – Risks
Element Disclosure requirement
D.1 Key risks that are specific to the Company or its industry
• The financial performance and financial position of Alent may be adversely affected by a
significant weakening in demand in its core end-markets and general macro-economic
conditions.
• Alent’s financial position and trading results may be adversely affected by fluctuations in
exchange rates, interest rates or the rate of inflation.
• Alent may lose customers to competitors with new or alternative technologies if its businesses
do not adequately adapt to market developments.
• If Alent fails or is unable to protect, maintain and enforce its intellectual property, it may lose
its exclusive right to use its technologies and processes.
• Alent’s financial condition may be materially adversely affected by any significant liabilities
for any defects of its products or services.
• Alent’s worldwide operations and businesses may be adversely affected by various political,
legal, regulatory and other developments in countries in which it operates.
• Future expenditure on compliance with environmental and health and safety laws and
regulations may materially adversely affect Alent’s future prospects, financial position and
results of operations.
D.3 Key risks that are specific to the Shares
• The price of the Alent Shares may be volatile.
• Any future equity issues by Alent plc could have an adverse effect on the market price of the
Alent Shares and could dilute ownership.
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Element Disclosure requirement
• Any change in current tax law or practice could adversely affect holders of Alent Shares.
• Holders of Alent Shares in the United States and other overseas jurisdictions may not be able
to participate in any future equity offerings of Alent plc.
• The ability of Overseas Shareholders to bring actions or enforce judgments against Alent plc
or the Directors may be limited.
Section E – Proposals
Element Disclosure requirement
E.1 Net proceeds and expenses of global offer
Not applicable. This document does not constitute an offer or invitation to any person to subscribe
for or purchase any shares in Alent plc. It is intended solely for holders of Cookson Shares and,
following the Scheme becoming effective, Vesuvius Shares. It has been prepared in connection
with the application to listing on the premium listing segment of the Official List and trading on the
London Stock Exchange of up to 278,700,000 Alent Shares to be issued in connection with the
Proposals. Alent will not receive any proceeds as a result of the Scheme or the Demerger.
E.2a Reasons for the offer and use of proceeds
Not applicable. This document does not constitute an offer or invitation to any person to subscribe
for or purchase any shares in Alent. It is intended solely for holders of Cookson Shares and,
following the Scheme becoming effective, Vesuvius Shares.
Alent plc will not receive any proceeds as a result of the Scheme or the Demerger.
E.3 Terms and conditions of the offer
Not applicable. This document does not constitute an offer or invitation to any person to subscribe
for or purchase any shares in Alent. It is intended solely for holders of Cookson Shares and,
following the Scheme becoming effective, Vesuvius Shares.
E.4 Material interests
Certain of the Alent Directors have shareholding interests in Cookson. So far as the Alent Directors
are aware, no other person involved in the Scheme or the Demerger has any interest, including
conflicting ones, that is material to the Scheme or the Demerger.
E.5 Selling shareholder and lock-ups
Not applicable. There are no selling shareholders or lock-up arrangements in connection with the
Proposals.
E.6 Resulting dilution
Not applicable.
E.7 Estimated expenses charged to the investor by the Company
Not applicable.
----- End of picture text -----

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PART II RISK FACTORS

In addition to the other information set out in this document, the following risk factors should be carefully considered. If one or more of the following risks were to arise, Alent’s business, results of operations, financial condition, prospects and/or Alent plc’s share price could be materially and adversely affected to the detriment of Alent plc and its shareholders, and investors could lose all or part of their investment. The risks set out below may not be exhaustive and do not necessarily comprise all of the risks associated with an investment in Alent plc and the Alent Shares. Additional risks and uncertainties not currently or at present known to Alent or which Alent currently deems immaterial may arise or become material in the future and may have a material adverse effect on the financial condition or business of Alent.

You should consult a legal adviser, an independent financial adviser duly authorised under the FSMA or a tax adviser for legal, financial or tax advice.

SECTION A: RISKS RELATING TO ALENT

1 The financial performance and financial position of Alent may be adversely affected by a significant weakening in demand in its core end-markets and general macro-economic conditions

The global macro-economic environment is increasingly uncertain. While demand in Alent’s key electronics end-markets has been stable overall during the first half of 2012 with generally weaker demand in Europe offset by continued growth in the Americas and Asia-Pacific, towards the end of the period there have been more recent signs of general weakening in the global economy and slowing global industrial production, most notably in Europe. In addition to clear evidence of slowing worldwide economic growth, concerns about the stability of the Eurozone and the European financial/banking system have intensified. It is, as yet, unclear to what extent the seeming insolvency of Greece and the fiscal weakness of other countries such as Ireland, Italy, Portugal and Spain will impact the euro currency and the banking system. There is therefore considerable uncertainty as to how the Eurozone crisis, the global financial crisis and the wider economic situation will develop over time.

Alent supplies predominantly consumable products, on short lead times, mainly to the electronics, automotive and industrial end-markets. As such, Alent’s expectations of future trading are based upon the Directors’ assessment of end-market conditions, which conditions are subject to some uncertainty. In the event that end-market conditions suffer significant deterioration, Alent may experience reductions in trading activity, a lower share price, the financial failure of one or more of its key customers and suppliers, asset impairments, lower profitability and/or a material adverse impact on its financial position.

2 Alent’s financial position and trading results may be adversely affected by fluctuations in exchange rates, interest rates or the rate of inflation

Alent has no control over changes in foreign currency exchange rates, or inflation and interest rates. In the normal course of business, many transactions are carried out by Alent’s businesses in currencies other than their reporting currency, leading to transactional foreign exchange risk, although this is not material for Alent overall. Alent is exposed to the effect of translating the results and net assets of its overseas subsidiaries into sterling. Significant fluctuations in the value of currencies in which it operates, in interest rates or in rates of inflation may adversely impact Alent’s financial position and results of operations.

It is Alent’s policy that foreign currency transaction exposures that are material at an individual operating unit level are hedged using appropriate instruments such as forward foreign exchange contracts. Alent does not currently hedge translational impact on the income statements of overseas subsidiaries. While Alent attempts to manage transactional and balance sheet translation risks associated with currency exchange rate fluctuations through its hedging and funding policies, fluctuations in the value of currencies in which it operates may nevertheless adversely impact Alent’s financial position and results of operations. Where appropriate, Alent manages its interest rate exposures using interest rate swap agreements or other instruments.

3 Alent may lose customers to competitors with new or alternative technologies if its businesses do not adequately adapt to market developments

The markets in which many of Alent’s businesses operate can experience rapid changes due to the introduction of new technologies. Alent’s continued success depends upon its ability to continue to develop

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and produce new and enhanced products and services on a cost-effective and timely basis in accordance with customer demands. In addition, the markets for Alent’s products are competitive in terms of pricing, product and service quality, product development and introduction time, customer service, financing terms and other similar factors. Alent invests significant amounts in research and development to sustain its competitive advantage and takes appropriate action to ensure that its cost base remains competitive. If Alent fails to adequately adapt to market developments related to new products and technology, it could lose customers to suppliers with better or less costly products. Alternatively or additionally, Alent could fail to achieve its anticipated returns on the amounts it has invested in research and development. These outcomes could have a material adverse effect on Alent’s future prospects, financial position and results of operations.

4 If Alent fails or is unable to protect, maintain and enforce its intellectual property, it may lose its exclusive right to use its technologies and processes

Throughout its operations, Alent relies on a combination of trade marks, copyrights, patents, trade secrets and confidentiality procedures and agreements to protect its proprietary rights. If Alent fails to, is unable to protect, maintain and enforce, or is the subject of theft or infringement of, its existing intellectual property, this may result in the loss of Alent’s exclusive right to use technologies and processes which are included or used in its businesses. There can be no guarantee that Alent’s procedures and contractual provisions will be adequate to prevent the misappropriation, infringement or other unauthorised use of Alent’s intellectual property by third parties. In addition, the protection provided by these intellectual property rights varies between the countries in which Alent operates and the laws of certain countries in which Alent operates may not protect proprietary rights to the same extent as those of, for example, the United Kingdom or the United States.

Alent has applied for registered trade mark protection of its brand ALENT in the EU as a Community trade mark and as an international trade mark designating the following countries: Australia, China, Israel, Japan, Singapore, South Korea, Turkey, USA and Vietnam. There is no guarantee that Alent’s pending trade mark applications will be successful as Alent may not be able to register its brand in those countries or elsewhere due to prior third-party rights or other local legal issues. If others use its brand in markets where Alent does not have registered trade mark protection, Alent may be unable to prevent such use. Moreover, Alent may be unable to use its own brand in those markets and may have to use a different brand.

Alent has applied for patents in a number of jurisdictions, including in Europe and the US. These applications are at various stages in the application process and patents may not be issued, or may be issued in a form narrower than Alent’s applications. If some of the patents or patent applications are not granted, expire or are successfully disputed, Alent may be unable to exclude competitors from using the technology covered by them. Alent has also acquired patents and patent applications from other parties. Alent could become subject to lawsuits in which it is alleged that it has infringed the intellectual property rights of others or Alent could commence lawsuits against others whom it believes are infringing upon its rights. Alent’s involvement in intellectual property litigation could result in significant expense, materially adversely affecting the development and sale of the challenged product or intellectual property and/or diverting the efforts of Alent’s technical and management personnel with no guarantee of success.

5 Alent’s financial condition may be materially adversely affected by any significant liabilities for any defects of its products or services

A large proportion of Alent’s products are used in the manufacturing processes of Alent’s customers. If a product of Alent or of one of Alent’s customers does not conform to agreed specifications or is otherwise defective, Alent may be subject to claims by its customers arising from end-product defects, injury to individuals, property damage or other such claims. Legal claims have been brought against certain Alent companies by third parties alleging that persons have been harmed by exposure to hazardous materials used by those companies in the manufacture of industrial and consumer products, and further claims may be brought in the future.

Provision is made for amounts payable in respect of known or probable costs. The Alent Board believes that, taking into account legal advice received, together with Alent’s insurance arrangements and financial provisions, none of the currently pending or potential claims will, either individually or in the aggregate, have a material adverse impact on Alent’s financial position and results of operations. However, the outcome of legal action is uncertain and there is always the risk that it may prove more costly than expected and exceed the level of insurance cover, indemnifications and provisions made, which may have a material adverse effect on Alent’s future prospects, financial position and results of operations.

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6 Alent’s worldwide operations and businesses may be adversely affected by various political, legal, regulatory and other developments in countries in which it operates

Alent is subject to various legal and regulatory regimes, including those covering taxation and environmental matters, and political risks, including the imposition of trade barriers, changes of regulatory requirements, lack of protection for intellectual property rights and the volatility of input costs, selling prices, taxes and currencies. In particular, operating within the rapidly evolving developing nations can expose Alent’s businesses to significant local risks and challenges. Future global political, legal or regulatory developments concerning Alent businesses may affect their ability to operate and to operate profitably in the affected jurisdictions. Should Alent businesses fail to comply with applicable legal and regulatory requirements, this may result in a financial loss or restriction on their ability to operate.

Alent’s businesses are subject to a variety of operational risks, including natural catastrophe, terrorist action, theft, fraud and, particularly in developing nations, insufficient supply of high quality local management and technical personnel. If any of the operational risks materialise to a significant extent, this could result in a substantial interruption to a facility, loss of future insurance cover, potential loss of customers and revenue and financial loss.

7 Alent’s future prospects, financial position and results of operations could be adversely affected if it is unable to pass on to its customers fluctuations in the prices of the raw materials which it purchases

Tin, silver, gold, isopropyl alcohol, nickel sulphate and chromic acid are among the principal raw materials that Alent purchases. Alent’s businesses may be affected by fluctuations in the price and supply of such raw materials. Alent’s ability to pass on increases or decreases in the cost of raw materials to its customers is, to a large extent, dependent upon market conditions, established market practice and terms of trade. If Alent’s ability to pass on increases in the cost of raw materials is limited, this could have a material adverse effect on Alent’s future prospects, financial position and results of operations.

8 Alent may suffer losses if a counterparty were to fail to perform as contracted or if a material customer failed to renew a contract on expiry of the contracted term

Alent transacts business with and through a number of counterparties, including customers, suppliers and insurers. The financial failure of one or more of Alent’s key customers and suppliers may result in financial loss, loss of future business and a shortage of raw material supplies. In managing the risks inherent in its operations, Alent transfers risk to insurers where cost effective and, accordingly, the financial failure of one or more insurers used by Alent may result in a financial loss to Alent. Any default by a material customer, supplier or insurer may have a material adverse effect on Alent’s future prospects, results of operations and financial condition. Alent enters into contracts of various duration with its customers. The failure by a material customer to renew a contract on expiry of the contracted term may have a material adverse effect on Alent’s future prospects, results of operations and financial condition.

9 Future expenditure on compliance with environmental and health and safety laws and regulations may materially adversely affect Alent’s future prospects, financial position and results of operations

Alent is subject to applicable laws and regulations in all of the jurisdictions in which it operates and in which it has property assets undergoing remediation activity, including those relating to pollution, the protection of the environment, human health and safety, the disposal of hazardous substances and waste materials and remediation of any land or water contaminated by such substances. Violations of legal or other regulatory requirements could result in restrictions on operations, the imposition of more stringent permitting conditions, damages, fines or other sanctions, all of which may have a material adverse effect on Alent’s future prospects, financial position and results of operations. For example, Alent will incur clean-up costs in relation to a former operational site in the U.S. The quantum of these clean-up costs will be dependent upon the course of the ongoing investigations at and in the vicinity of this site and also negotiations with the relevant authorities, including as a result of any adverse decision or change in regulatory guidelines and enforcement practices as a result of the characterisation of the identified contamination, or as a result of any further factual findings. While the Cookson Board believes that the current and expected expenditures and risks connected with these and potential future liabilities are unlikely to impair Alent’s financial position materially, there can be no assurance that the costs related to such liabilities will not exceed current or future financial provisions and insurance coverage which may result in a material adverse effect on Alent’s future prospects, financial position and results of operations.

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10 The loss of key personnel or the failure to attract, develop or retain skilled or qualified employees could negatively impact Alent’s business

Alent depends on the capabilities and performance of its executive officers and employees. Loss of key personnel or failure to attract or retain qualified employees could impact Alent’s business and have a material adverse effect on its financial condition and operating results.

11 Alent may be adversely affected by changes to tax legislation or its interpretation or increases in effective tax rates in the jurisdictions in which Alent operates

Alent operates in multiple jurisdictions and its profits are taxed according to the tax laws of such jurisdictions. Alent’s effective tax rate may be affected by changes in, or interpretations of, tax laws in any given jurisdiction, including those relating to the utilisation of tax credit carry forwards, changes in geographical allocation of income and expense, and changes in the Board’s assessment of matters such as the ability to realise deferred tax assets. Alent’s effective income tax rates in a given financial year reflect a variety of factors that may not be present in the succeeding financial year or years.

12 The funding requirements or obligations in respect of Alent’s defined benefit pension schemes may increase

Alent operates defined benefit pension plans worldwide, but principally in the US, the total worldwide valuation of which resulted in a net deficit, calculated on an IAS 19 basis, of £26.7 million as at 30 June 2012. Alent also operates defined contribution pension schemes for its current and former UK, US and overseas employees. The funding position of the defined benefit pension plans will fluctuate depending on market conditions, investment performance, changes to actuarial funding assumptions, changes in the rate of inflation and interest rates and Alent’s financial position.

Alent’s largest defined benefit pension plan on a net basis is in the US, which is closed to new members and closed to further benefit accrual for existing members. Following the Demerger, Alent will retain responsibility for funding the qualified defined benefit obligations under the Retirement Security Plan (the “RSP”) as the current participants in the RSP are wholly from Cookson’s Performance Materials division in the US.

The RSP is expected to have a funding deficit following the Demerger. This deficit may increase or decrease based on a number of actuarial factors, changes to other assumptions and market conditions. Changes to the funding level may require Alent to increase its cash contributions to the RSP.

The US pension regulator, the US Pension Benefit Guaranty Corporation (“PBGC”), has confirmed that no additional cash contributions are required to be made into the RSP as a result of the Demerger. Additional funding payments of approximately $4 million (£2 million) per annum are currently being made by Cookson Group into the RSP. This additional contribution is being made on a voluntary basis and, as such, its continuation is subject to periodic review.

Whilst the Demerger will not result in any additional cash contributions being made into the RSP, future changes to the funding position of the RSP or future acquisitions, disposals, closures or other corporate actions by Alent may lead to Alent being required to contribute additional funding from its available resources to satisfy pension obligations. This could have a material adverse effect on Alent’s financial position.

SECTION B: RISKS RELATING TO THE PROPOSALS

1 A number of conditions precedent must be satisfied before the Proposals can complete

Completion of the Proposals is subject to the satisfaction (or, where permitted, waiver) of a number of conditions precedent contained in the Demerger Agreement (including the approval of the Scheme at the Court Meeting and the approval of the Proposals by the Cookson Shareholders at the General Meeting) and successful completion of each of the individual steps of the Proposals. If the Cookson Shareholders do not approve the Scheme at the Court Meeting or the Proposals at the General Meeting, or the Court fails to sanction the Scheme or confirm the Cookson Capital Reduction or the Vesuvius Capital Reduction, the Demerger will not complete. If the Demerger does not occur in whole or in part, then Alent may experience a delay in the execution of its strategic objectives and may be unable to realise the benefits for Cookson Shareholders and Alent Shareholders that the Alent Board believes will result from the Demerger.

• 2 The Demerger may not occur even after the Scheme has become effective

Although the Proposals are intended to be implemented in full, the Scheme and the Vesuvius Capital Reduction require different Court approvals which cannot be inter-conditional. It is therefore possible that

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the Demerger will not occur after Vesuvius plc has become the new holding company of the Cookson Group pursuant to the Scheme. If that happens, Vesuvius Shareholders will not receive Alent Shares and Alent will continue to be owned by Vesuvius for the foreseeable future.

3 Some or all of the anticipated benefits of the Demerger may not be realised

There can be no guarantee that Alent will realise any or all of the anticipated benefits of the Demerger, either in a timely manner or at all. If that happens, and Alent incurs significant costs, this could have a material adverse impact on the results of Alent. If the Demerger does not complete, Alent may be unable to realise the returns to shareholders from its businesses that the Board believes will result from the Demerger.

4 The financial results of Alent after the Demerger may be more volatile than those of the Cookson Group before the Demerger

Cookson currently benefits from diversification, resulting from operating the businesses which will become Alent alongside the businesses which will become Vesuvius. Following the Demerger, that diversification will diminish and Alent and/or Vesuvius may individually demonstrate increased volatility in terms of their operations and/or financial results and requirements.

5 The receipt of Alent Shares could be a taxable transaction for US persons for US federal income tax purposes

The receipt of Alent Shares and Vesuvius Shares by Cookson Shareholders is intended to qualify for non-recognition treatment for US federal income tax purposes under the US Internal Revenue Code of 1986 (the “IRS Code”). Cookson has received an opinion from its tax adviser (the “Opinion”) to the effect that, in the opinion of the tax adviser, the Scheme and the Demerger should satisfy the US federal income tax statutory and regulatory requirements for non-recognition treatment for US persons. The Opinion is based on certain representations made by Cookson and on certain assumptions, and any inaccuracy in the representations made by Cookson or the assumptions could invalidate the Opinion.

In addition, Cookson has requested a private letter ruling from the Internal Revenue Service (the “IRS”) that the receipt of Alent Shares and Vesuvius Shares by holders of Cookson Shares along with certain related restructuring transactions will qualify for non-recognition treatment for US federal income tax purposes. There can be no assurance, however, that the IRS will issue its ruling before the date on which the Cookson Shareholders are required to vote on the Proposals, or that the IRS will rule as requested. Furthermore, pursuant to IRS guidelines, the IRS will not rule on whether the Demerger satisfies certain requirements necessary for US persons to obtain non-recognition treatment with respect to the Demerger (the “No Rule Requirements”). Moreover, notwithstanding an eventual private letter ruling, although unlikely, the IRS could determine on audit that the receipt of Alent Shares and/or Vesuvius Shares does not qualify for non-recognition treatment because, for example, one or more facts or representations set forth in the private letter ruling request is not complete or correct, the No Rule Requirements are not satisfied, or as a result of certain actions taken before or after the completion of the Demerger.

If it were ultimately determined that the receipt of Alent Shares and/or Vesuvius Shares failed to qualify for non-recognition treatment under the IRS Code, adverse US federal income tax consequences could result for a holder of Cookson Shares who is a US person. A summary of the US federal income tax treatment for US persons of receipt of Alent Shares and Vesuvius Shares pursuant to the Scheme and the Demerger are set out in the section entitled “US Federal Income Tax Considerations” in Part X: “ Taxation ” of the Cookson Circular.

6

The Demerger may give rise to other unanticipated tax consequences

Cookson has undertaken tax due diligence to identify the likely tax treatment of the Demerger and has structured the Demerger so as to reduce any adverse tax consequences. However, tax law and practice can be subject to differing interpretations and, in some jurisdictions, the tax authorities are entitled to exercise discretion in how the tax law should be applied in certain cases. Consequently, Alent is not able to guarantee that the tax authorities in each jurisdiction in which Alent companies have a taxable presence will interpret or apply the relevant tax law and practice in the manner in which Alent anticipates and this may give rise to adverse consequences. Details of the United Kingdom, United States and Jersey tax treatment of shareholders arising under the Scheme and the Demerger are set out in the sections entitled “United Kingdom Taxation”, “US Federal Income Tax Considerations” and “Jersey Taxation” in Part XI: “ Taxation Considerations ” of this document.

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7 Alent and Vesuvius could have significant indemnification obligations to each other as a result of the Proposals, including with respect to US tax liabilities

Alent plc and Vesuvius plc have entered into certain Separation Agreements, as described in paragraph 13 in Part XIII: “ Additional Information ” of this document, that govern the allocation of the assets and liabilities of the businesses and their post-Demerger obligations to each other in respect of, among other things, taxes and transitional services. Under the terms of the Demerger Agreement, each of Alent plc and Vesuvius plc has agreed to indemnify the other in respect of liabilities incurred by members of their respective groups following the Demerger Effective Time which relate to the Alent Business and Vesuvius Business, respectively. The amounts payable by Alent plc and Vesuvius plc to the other pursuant to such indemnity obligations could be significant.

Vesuvius plc has also, under the terms of the Tax Sharing and Indemnification Agreement and subject to certain conditions, agreed to indemnify Alent plc for taxes imposed on Alent that are attributable to certain restructuring transactions undertaken in anticipation of the Demerger (including the Reorganisation). The tax liabilities that could arise were a taxing authority successfully to challenge the treatment of the restructuring transactions could be significant. However, in the event of a change of control of Alent plc (i.e. more than 50 per cent. of the shares in Alent plc being acquired by a third party), the obligations of Vesuvius plc to indemnify Alent plc for additional taxes in respect of the restructuring and other transactions may terminate, to the extent that such taxes are attributable to that change of control.

As described in paragraph 4 of Section B of Part IV of the Cookson Circular, incorporated by reference into this document in paragraph 13.3 of Part XIII, were members of Alent to take certain actions that might result in the Demerger and preceding restructuring transactions failing to qualify for non-recognition treatment for US federal income tax purposes, Alent plc may be required to indemnify Vesuvius plc for liabilities that are incurred as a result of such failure. Even if such a liability were to arise, based on valuations provided by its advisers, Alent expects that any such liability would not be significant. However, these valuations could be subject to differing interpretations and, as a result, there is no guarantee that they could not be successfully challenged by a tax authority. Were that to be the case, Vesuvius could have a significant tax liability for which indemnification would be sought from Alent plc.

SECTION C: RISKS RELATING TO THE ALENT SHARES

1 The price of the Alent Shares may be volatile

The price of the Alent Shares following Alent Admission could be subject to significant fluctuations due to the volatility of the stock market in general and a variety of other factors, some of which are beyond Alent’s control, including the other risks relating to an investment in Alent plc described in this section. The fluctuations could result from national and global economic and financial conditions, the market’s response to the Demerger, market perceptions of Alent, including its ability to manage its existing debt facilities and raise new capital, regulatory changes affecting Alent’s operations, variations in Alent’s operating results, business developments of Alent and/or its competitors and liquidity of financial markets. Furthermore, the operating results and prospects from time to time may be below the expectations of market analysts and investors. Any of these events could result in a decline in the market price of the Alent Shares.

2 Any future equity issues by Alent plc could have an adverse effect on the market price of the Alent Shares and could dilute ownership

Other than the proposed issue of shares under the Proposals, Alent plc has no current plans for an offering of its shares. However, it is possible that Alent plc may decide to issue additional shares in the future and if shareholders did not take up such offer or were not eligible to participate, their proportionate ownership and voting interests in Alent plc would be reduced and the percentage that their shares would represent of the total share capital of Alent plc would be reduced accordingly. A future equity issue, or significant sale of Alent Shares by major shareholders, could have a material adverse effect on the market price of Alent Shares as a whole.

3 Any change in current tax law or practice could adversely affect holders of Alent Shares

Statements in this document concerning the taxation of holders of Alent Shares are based on current UK, US and Jersey tax law and practice as at the date of this document, each of which is subject to change, possibly with retrospective effect.

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The taxation of an investment in Alent Shares depends on the individual circumstances of the Alent Shareholder and the summary of the UK, US and Jersey taxation treatment of an investment in the Alent Shares set out in Part XI: “ Taxation Considerations ” of this document is intended as a general guide only. It does not address the specific tax position of every investor and only deals with rules of UK, US and Jersey taxation of general application. Therefore, any investors who are in any doubt as to their tax position regarding the Alent Shares and any investors subject to tax in any other jurisdiction should consult their own independent tax advisers.

4 Holders of Alent Shares in the United States and other overseas jurisdictions may not be able to participate in any future equity offerings of Alent

The Companies Act provides for pre-emption rights to be granted to Alent Shareholders, unless such rights are disapplied by shareholder resolution. However, US shareholders may not be entitled to exercise these rights unless the rights, and the Alent Shares issued pursuant to such rights, are registered under the Securities Act, or an exemption from the registration requirements of the Securities Act is available. Alent has no current intention to seek such registration and would evaluate, at the time of any rights issue, whether the offer would qualify for an exemption, as well as the indirect benefits to Alent of enabling US shareholders to exercise rights and any other factors it considers to be appropriate at the time, prior to making a decision on whether to utilise an exemption, if available, from the registration requirements of the Securities Act. Similar issues may arise in relation to other overseas jurisdictions.

5 The ability of Overseas Shareholders to bring actions or enforce judgments against Alent plc or its Directors may be limited

The ability of an Overseas Shareholder to bring an action against Alent plc may be limited under law. Alent plc is a public limited company incorporated in England. The rights of holders of Alent Shares are governed by English law and by the Alent Articles. These rights differ from the rights of shareholders in typical US corporations and some other non-UK corporations. An Overseas Shareholder may not be able to enforce a judgment against some or all of the Directors and executive officers. The majority of the Directors and executive officers are residents of the United Kingdom. Consequently, it may not be possible for an Overseas Shareholder to effect service of process upon the Directors and executive officers within the Overseas Shareholder’s country of residence or to enforce against the Directors and executive officers judgments of courts of the Overseas Shareholder’s country of residence based on civil liabilities under that country’s securities laws. There can be no assurance that an Overseas Shareholder will be able to enforce any judgments in civil and commercial matters or any judgments under the securities laws of countries other than the UK against the Directors or executive officers who are residents of the UK or countries other than those in which judgment is made. In addition, English or other courts may not impose civil liability on the Directors or executive officers in any original action based solely on foreign securities laws brought against Alent plc or the Directors in a court of competent jurisdiction in England or other countries.

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PART III IMPORTANT INFORMATION

Presentation of financial information

Unless otherwise indicated, financial information in this document has been prepared in accordance with the basis of preparation set out in paragraph 2 of the notes to the consolidated financial statements set out in Part IX: “ Historical Financial Information ” of this document. It has been presented in sterling unless otherwise stated. Unless otherwise indicated, all unaudited financial information in this document has been extracted without material adjustment from the Cookson Group accounting records. Prospective investors should ensure that they read the whole of this document and not just rely on key information or information summarised within it.

The financial information on Alent in Part IX: “ Historical Financial Information ” of this document for the three year periods ended 31 December 2011 and for the six-month period ended 30 June 2012 has been audited. The financial information for the six-month period ended 30 June 2011 has not been audited.

Use of non-GAAP financial information

Information on the use of non-GAAP financial information is set out in paragraph 4 of the notes to the consolidated financial statements set out in Part IX: “ Historical Financial Information ” of this document.

Currencies

All references to pounds, pounds sterling, sterling, £, pence, penny and p are to the lawful currency of the United Kingdom and all references to euro are to the single currency of the member states of the European Union participating in the third stage of economic and monetary union pursuant to the Treaty of Rome of 25 March 1957.

Forward-looking statements

This document contains certain forward-looking statements which may include reference to one or more of the following: Alent’s financial condition, results of operations, cash flows, dividends, financing plans, business strategies, operating efficiencies or synergies, budgets, capital and other expenditures, competitive positions, growth opportunities for existing products, plans and objectives of the Board and other matters. Statements in this document that are not historical facts are hereby identified as “forward-looking statements”. Such forwardlooking statements, including, without limitation, those relating to future business prospects, revenue, capital needs, interest costs and income, in each case relating to Cookson, Alent plc or Vesuvius plc wherever they occur in this document, are necessarily based on assumptions reflecting the views of Cookson, Alent plc or Vesuvius plc and involve a number of known and unknown risks, uncertainties and other factors that could cause actual results, performance or achievements to differ materially from those expressed or implied by the forward-looking statements. Such forward-looking statements should, therefore, be considered in light of various important factors. Important factors that could cause actual results to differ materially from estimates or projections contained in the forward-looking statements include, without limitation: economic and business cycles, the terms and conditions of Cookson’s, Alent plc’s or Vesuvius plc’s financing arrangements, foreign currency rate fluctuations, competition in Cookson’s, Alent plc’s or Vesuvius plc’s principal markets, acquisitions or disposals of businesses or assets and trends in Cookson’s, Alent plc’s or Vesuvius plc’s principal industries.

These statements are further qualified by the risk factors disclosed in or incorporated by reference into this document that could cause actual results to differ materially from those in the forward-looking statements. See Part II: “Risk Factors” of this document.

These forward-looking statements speak only as at the date of this document. Except as required by the FSA, the London Stock Exchange, the Prospectus Rules, the Listing Rules, the Disclosure and Transparency Rules or applicable law, neither Cookson, Alent plc or Vesuvius plc undertakes any obligation to update or revise publicly any forward-looking statement, whether as a result of new information, further events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this report might not occur.

The contents of these paragraphs relating to forward looking statements are not intended to qualify the statements made as to sufficiency of working capital in this document.

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Notice to investors

Enforceability of US judgments

Alent plc is a public limited company incorporated under the laws of England and Wales. The majority of the Directors and officers reside outside the United States. In addition, substantially all of Alent plc’s assets and the majority of the assets of its Directors and officers are located outside of the United States. As a result, it may not be possible for US investors to effect service of process within the United States upon Alent plc or its Directors and officers located outside the United States or to enforce in the US courts or outside the United States judgments obtained against them in US courts or in courts outside the United States, including judgments predicated upon the civil liability provisions of the US federal securities laws or the securities laws of any state or territory within the United States. There is also doubt as to the enforceability in England and Wales, whether by original actions or by seeking to enforce judgments of US courts, of claims based on the federal securities laws of the United States. In addition, punitive damages in actions brought in the United States or elsewhere may be unenforceable in England and Wales.

Overseas Shareholders

United States

The Alent Shares to be issued in connection with the Scheme have not been, and will not be, registered under the Securities Act or the securities laws of any state or other jurisdiction of the United States.

The Alent Shares generally should not be treated as “restricted securities” within the meaning of Rule 144(a)(3) under the Securities Act and persons who receive securities in the Scheme and the Demerger (other than “affiliates” as described in the paragraph below) may resell them without restriction under the Securities Act.

Under the US securities laws, persons who are deemed to be affiliates of Cookson, Alent plc or Vesuvius plc as of the Scheme Effective Time may not resell the Alent Shares received pursuant to the Scheme without registration under the Securities Act, except pursuant to an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. Whether a person is an affiliate of a company for such purposes depends upon the circumstances, but affiliates of a company can include certain officers and directors and significant shareholders. Cookson Shareholders who believe they may be affiliates for the purposes of the Securities Act should consult their own legal advisers prior to any resale of Alent Shares received pursuant to the Scheme.

Other jurisdictions

The implications of the Proposals for Overseas Shareholders may be affected by the laws of jurisdictions outside the United Kingdom. Overseas Shareholders should inform themselves about, and observe, any applicable legal requirements. It is the responsibility of any Overseas Shareholders to satisfy themselves as to the full observance of the laws and regulatory requirements of the relevant jurisdiction in connection therewith, including the obtaining of any governmental, exchange control or other consents which may be required, the compliance with other necessary formalities and the payment of any issue, transfer or other taxes or duties or payments due in such jurisdiction. Any failure to comply with such restrictions or requirements may constitute a violation of the securities laws of any such jurisdiction.

This document has been prepared for the purposes of complying with English law and the rules of the UKLA and the information disclosed may not be the same as that which would have been disclosed if this document had been prepared in accordance with the laws of jurisdictions outside the United Kingdom.

THIS DOCUMENT DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITY, NOR SHALL THERE BE ANY SALE, ISSUANCE OR TRANSFER OF THE SECURITIES REFERRED TO IN THIS DOCUMENT IN ANY JURISDICTION IN CONTRAVENTION OF APPLICABLE LAW.

Overseas Shareholders should consult their own legal and tax advisers with respect to the legal and tax consequences of the Scheme and the Proposals to their particular circumstances.

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PART IV EXPECTED TIMETABLE OF PRINCIPAL EVENTS

Event Latest time and date for receipt of blue Forms of Proxy/ CREST Proxy Instructions for the Court Meeting . . . . . . Latest time and date for lodging an electronic proxy for the Court Meeting by way of CREST Proxy Instruction or online at www.sharevote.co.uk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Latest time and date for receipt of white Forms of Proxy/ CREST Proxy Instructions for the General Meeting . . . . Latest time and date for lodging an electronic proxy for the General Meeting by way of CREST Proxy Instruction or online at www.sharevote.co.uk . . . . . . . . . . . . . . . . . . . . . . . . Voting Record Time in respect of the Court Meeting and General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Court Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The following dates are subject to change Scheme Court Hearing to sanction the Scheme and to confirm the Cookson Capital Reduction . . . . . . . . . . . . . . . . . . . . . . . . Last day of dealings in, and for registration of transfers of, and disablement in CREST of, Cookson Shares . . . . . . . . . . . . . . Scheme Record Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Scheme Effective Time: Vesuvius plc becomes the holding company of Cookson . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cancellation of listing of Cookson Shares, Vesuvius Admission, crediting of Vesuvius Shares to CREST accounts and dealings in Vesuvius Shares commence on the London Stock Exchange . . . . . . . . . . . . . . . . . . . . . . . . . Vesuvius Court Hearing to confirm the Vesuvius Capital Reduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Demerger Record Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Demerger Effective Time: Demerger becomes effective . . . . Alent Admission, crediting of Alent Shares to CREST accounts and dealings in Alent Shares commence on the London Stock Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . Alent Court Hearing to confirm the Alent Capital Reduction . . Alent Capital Reduction Effective Date . . . . . . . . . . . . . . . . . . . Despatch of share certificates for Vesuvius Shares . . . . . . . . . . Despatch of share certificates for Alent Shares . . . . . . . . . . . . .

Time and/or date

10.00 a.m. on 24 November 2012(1) 10.00 a.m. on 24 November 2012 10.15 a.m. on 24 November 2012(1) 10.15 a.m. on 24 November 2012 6.00 p.m. on 24 November 2012(2) 10.00 a.m. on 26 November 2012 10.15 a.m. on 26 November 2012(3) 14 December 2012 Up until 6.00 p.m. on 14 December 2012(4) 6.00 p.m. on 14 December 2012(4) Around 9.00 p.m. on 14 December 2012(4) 8.00 a.m. on 17 December 2012(4) 17 December 2012(4) 6.00 p.m. on 18 December 2012(5) Before 8.00 a.m. on 19 December 2012(5) 8.00 a.m. on 19 December 2012(5) 19 December 2012(5) On or before 20 December 2012(5) by 28 December 2012(5) by 2 January 2013(5)

Unless otherwise stated, all references to times in this document are to London times.

The Court Meeting and the General Meeting will each be held at the offices of Linklaters LLP, One Silk Street, London EC2Y 8HQ at 10.00 a.m. and 10.15 a.m. [(3)] , respectively, on 26 November 2012.

Notes:

• (1) If the blue Form of Proxy for the Court Meeting is not returned by the above time, it may be handed to Equiniti, on behalf of the chairman of the Court Meeting, at the Court Meeting before the taking of the poll. However, the white Form of Proxy for the General Meeting must be returned by no later 10.15 a.m. on 24 November 2012 to be valid.

• (2) If either the Court Meeting or the General Meeting is adjourned, the Voting Record Time for the adjourned meeting will be 6.00 p.m. on the date two days before the date set for the adjourned meeting.

• (3) General Meeting to commence at 10.15 a.m. or, if later, immediately after the conclusion or adjournment of the Court Meeting.

• (4) These times and dates are indicative only and will depend, among other things, on the date upon which the Court sanctions the Scheme and confirms the Cookson Capital Reduction. If any of the expected dates change, Cookson will give adequate notice of the change by issuing an announcement through a Regulatory Information Service.

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• (5) These times and dates are indicative only and will depend, among other things, on the date upon which the Court sanctions the Scheme and confirms the Cookson Capital Reduction and the date upon which the Court confirms the Vesuvius Capital Reduction. If any of the expected dates change, Cookson will give adequate notice of the change by issuing an announcement through a Regulatory Information Service.

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PART V DIRECTORS, COMPANY SECRETARY, REGISTERED OFFICE AND ADVISERS

Directors

The Directors and their principal functions are as follows:

Directors Functions Peter Hill CBE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Chairman Steve Corbett . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Chief Executive Mike Butterworth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interim Finance Director* Dr Emma FitzGerald . . . . . . . . . . . . . . . . . . . . . . . . . . . . Non-Executive Director Lars Förberg . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Non-Executive Director Noël Harwerth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Non-Executive Director Jan Oosterveld . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Non-Executive Director Mark Williamson . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Non-Executive Director

• Discussions with a potential permanent Finance Director to succeed Mike Butterworth are at an advanced stage and it is expected that the relevant candidate will take up his position early in the new year.

The business address of each of the Directors is the Company’s registered address at Forsyth Road, Sheerwater, Woking, Surrey GU21 5RZ.

Company Secretary

Simon O’Hara

Registered Office

Forsyth Road Sheerwater Woking Surrey GU21 5RZ

Tel: 01483 758 400, or, when dialling from outside the UK, +44 (0) 1483 758 400.

Registered in England and Wales with number 8197966.

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SPONSOR AND FINANCIAL ADVISER

Rothschild

New Court St. Swithin’s Lane London EC4N 8AL

JOINT BROKER

JOINT BROKER

BofA Merrill Lynch 2 King Edward Street London EC1A 1HQ

UBS

1 Finsbury Avenue London EC2M 2PP

LEGAL ADVISERS TO ALENT

LEGAL ADVISERS TO THE SPONSOR AND FINANCIAL ADVISER

Linklaters LLP One Silk Street London EC2Y 8HQ

Ashurst LLP Broadwalk House 5 Appold Street London EC2A 2HA

REPORTING ACCOUNTANTS

REGISTRARS

KPMG Audit Plc

15 Canada Square Canary Wharf London E14 5GL

Equiniti Limited Aspect House Spencer Road Lancing West Sussex BN99 6DA

AUDITORS

KPMG LLP

15 Canada Square Canary Wharf London E14 5GL

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PART VI INFORMATION ON THE PROPOSALS

Information on the Proposals is incorporated into this document by reference to Part II: “Explanatory Statement” of the Cookson Circular and the related definitions contained in Part XIII of the Cookson Circular.

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PART VII INFORMATION ON ALENT

The financial information in this Part VII is (unless otherwise indicated) extracted without material adjustment from the financial statements of Alent set out in Part IX of this document. Investors should read all of this document (and the information incorporated by reference into it) and not just rely on key or summarised information.

This Part VII contains forward looking statements that involve risks and uncertainties. Alent’s actual results could differ materially from those anticipated in these forward looking statements as a result of such risks and uncertainties. You should read Part III “Important Information” and Part II: “Risk Factors” of this document for a discussion of the risks and uncertainties related to these statements.

Alent has historically formed part of the Cookson Group. Following the Demerger, Alent will be owned by Alent plc as a standalone business.

1 Industry overview

Alent is a leading global supplier of specialty chemicals (advanced surface treatment plating chemicals and electronics assembly materials) used in the global electronics production industry and also in automotive and other industrial markets.

The specialty chemicals industry is characterised by companies focusing on customised specialty materials that are generally important for the end application but represent only a relatively small share of customers’ overall production costs. Specialty chemical materials are used in a broad range of end-markets, including, for example, the electronic, automotive, food and beverage, pharmaceuticals, plastics, personal care, coatings, aerospace and agrochemical industries.

Specialty chemical businesses typically have close customer relationships and relatively high R&D intensity, and benefit from high barriers to entry. By contrast to bulk or commodity chemical products, specialty chemical products are generally tailored to meet specific customer requirements and are primarily sold based on the value they add to a customer’s manufacturing process or final product. Therefore, in the specialty chemicals industry, relationships with customers tend to be closer as compared to bulk or commodity chemicals businesses. The timely introduction of new and enhanced applications is a key driver of future growth, and higher-growth specialty chemicals players tend to benefit from underlying shifts in technology in their end-markets.

Electronics component manufacturers are dependent on specialty chemical materials to drive their technology to the next level. For example, in the case of integrated circuit manufacturers, specialty chemical materials help facilitate the manufacture of smaller microchips with a higher transistor density. Therefore, although specialty chemical materials such as those supplied by Alent generally account for a small portion of total manufacturing costs, these products are critical in supporting technological development, ensuring product quality and allowing a customer to optimise its manufacturing processes.

The integrated circuits and PCB products manufactured by Alent’s customers are used in a wide variety of electronic devices and applications, including computers, flat screen televisions, telecommunication devices, automotive applications and other consumer and industrial products.

Alent also supplies protective and decorative coatings for the automotive and other industrial end-markets. In the case of automotive manufacturers, these specialty chemicals are important for manufacturing advanced features, extending product life and enhancing the appearance, and resultant perceived value, of vehicles as well as process improvements for higher throughput and/or at a lower cost.

Alent works closely with its customers to meet their requirements for innovative materials necessary to enable their next generations of product development.

An additional challenge and opportunity for manufacturers of specialty chemicals is the increasing drive for environmentally friendly products across a wide range of end-markets (including electronics and automotive), driven by increasing regulation, demands for increased energy efficiency and the need to enable the products of Alent’s customers to be sold as being environmentally friendly.

Alent is also diversifying its new technology platforms into new fast-growing markets such as LED, power semiconductor and photovoltaics. Alent sees a significant opportunity for the business through the application of existing products and developing related products for use in these markets.

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1.1 End-markets

Electronics industry

The principal end-market for Alent is global electronics production, which Alent estimates to account for approximately three quarters of its revenue. Alent supplies electronic component manufacturers and assemblers, who, in turn, supply the electronic equipment manufacturers and suppliers.

In order to better understand the products of Alent and its business model, it is important to understand where Alent sits within the broader electronics supply chain. Within the assembly service segment of the supply chain, there are broadly three groups of manufacturers of electronics equipment:

• Original Equipment Manufacturers (“OEMs”, also known as captive): companies such as IBM, Intel, Nokia and Motorola who design, manufacture and market their own products;

• Contract Equipment Manufacturers (“CEMs”) or Electronics Manufacturing Services (“EMSs”, also known as merchant or independent manufacturers): companies such as Solectron, Foxconn, Sanmina-SCI and Flextronics, who manufacture products for OEMs and for other companies which consider their core competence to be design, distribution and marketing of technology rather than manufacturing (such as Apple, Dell and Cisco). Whilst the CEMs and EMSs can be the ultimate end-customers for Alent’s products, and the persons to whom the physical products are supplied, the relationship with the OEM is also typically very important, as the OEMs often instruct the CEM or EMS as to whose components should be used in the manufacture of their electronic devices; and

• Original Design Manufacturers (“ODMs”): companies such as Compal Electronics who design, manufacture and service products for other organisations. Unlike EMSs, who usually manufacture from a near-final design provided by their OEM customers, ODMs sell fully designed products for OEMs and then manufacture them. ODMs are a relative newcomer to the industry; typically Taiwanese, they have their roots in designing and manufacturing low-end notebook PCs for OEMs such as Dell and HP.

As shown in the diagram below, Alent operates within the electronics materials segment of the electronics value chain, where Alent provides highly engineered and intermediate materials to its customers. Engineered materials are formulated or processed materials which perform specific functions or have particular process characteristics, e.g. photo resist, die attach, conductive adhesive and thermal interface, while intermediate materials are refined or processed raw materials which possess electronic grade purity or properties, e.g. metals, glass, ceramics and polymers.

==> picture [389 x 198] intentionally omitted <==

----- Start of picture text -----

Electronic Equipment Computers Communications Other Electronics
$1,650bn $500bn $450bn $700bn
Assembly Service$1,235bn Merchant Captive
Electronic Components$690bn Semi-conductors$302bn InterconnectSubstrates$58bn Passives$33bn Displays$119bn Energy$40bn Devices$135bnOther
1 Materials$24bnFab 2PackagingMaterials$13bn Interconnect3 Materials$20bn MaterialsPassive$3.5bn MaterialsDisplay$36bn MaterialsEnergy$34bn MaterialsOther$7bn 4AssemblyMaterials$6bn
Electronic Materials$146bn Photomasks,CMP, PhotoTargets/PreResist, WetChemicals,Wafers,Gases, Bonding Wire,Compound,LeadframeDie AttachMoldingMetal, Photo Resist,Chemicals,Ceramics,Laminate,MaterialsDrillingWet Terminations,Electrodes,SeparatorsDielectrics,Magnetics, Glass, Films,Color Filters,Phosphors,Thick FilmTargets,ShadowMasks, Substrates,SeparatorsCathodes,Anodes,Silicon Magnetic Film,Composites,Metal Foils,Substrates,Glass andTargetsMetal EncapsulantsAdhesives,Materials,Materials,ThermalSolder
Cursors
Industrial MaterialsRaw and$44bn Polysilicon,Polymers PolymersCopper,Gold, Glass-Cloth,Polymers,Cu Foil,PI Film Inorganics,PowdersAl Foil,Metal- InorganicsMetals,Films, Inorganics,PolysiliconMetals, Inorganics,Copper,Metals,Films, PolymersTin,
Represents Alent presence
----- End of picture text -----

Source: Prismark Partners

According to Prismark Partners, the electronics materials segment is estimated in 2012 to be a $146 billion market and the overall market for electronic products is estimated at $1,650 billion.

Alent’s products broadly fit within the fabrication materials, packaging materials, interconnect materials and assembly materials segments and Prismark estimates these sub-sectors to be worth $24 billion, $13 billion, $20 billion and $6 billion, respectively.

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The production of electronic equipment also requires raw and industrial materials (e.g. copper, polysilicon, etc.) which are not supplied by Alent.

In the electronics market, there is a strong trend towards increased connectivity and portability in the consumer electronics industry. Consumer demand is for faster, smaller and lighter products, which is leading to increasing miniaturisation and complexity and the use of multi-layer circuit boards. Alent is at the leading edge of this trend and is a leading player in the development and supply of specialty chemicals into these fast-growing niches.

According to Prismark in August 2012, end-market sales of electronic goods is, on average, forecast to grow by 5.8 per cent. CAGR from 2012 to 2016 in value terms, along with significant growth in the size of the key markets in which Alent’s products are used. However, the volume of electronic devices is a key growth driver for Alent. The electronics industry has historically been a “price down” industry, with reduced prices for each generation of product, which means that forecasts of market growth by value tend to understate the market growth by volume, which is the key driver of demand for Alent’s products.

Electronic goods can be split into the following categories (per cent. of total in 2012, forecast by Prismark):

• computers (approximately 31 per cent.): PCs, net books, tablets;

• communications (approximately 27 per cent.): mobile phones (both smart and dumb), telecommunications infrastructure;

• consumer (approximately 10 per cent.): MP3 players, games consoles, digital cameras, flat screen TVs, camcorders;

• automotive (approximately 11 per cent.): chassis and safety systems, lighting, powertrain, infotainment, interior electronics, electric vehicles;

• industrial/medical (approximately 15 per cent.): photovoltaic, instrumentation, retail systems/ self-service, automation and motion control, power generation/transmission, traffic systems, medical diagnostics and imaging, patient monitoring; and

• military (approximately 8 per cent.).

Alent’s products are used in electronic devices in all of the categories above, with a particular focus on the tablet and smartphone markets within computers and communications and the automotive end-market.

Smartphone and tablets outperform their markets

==> picture [305 x 177] intentionally omitted <==

----- Start of picture text -----

2011-2016 CAGR 400
Smartphone s 24%
Mobile Phones 5%
Media Tables 41%
PC 17% 300
200
100
0
2010A 2011A 2012E 2013E 2014E 2015E 2016E
Smartphones (LHS) Media Tablets (RHS)
1,600
1,400
1,200
1,000
800
600
400
200
0
2009A
1,411 371
341
1,270
1,088
242
897
708 185
488 120
307
67
180
18
Tablet Units (millions)
Smartphone Units (millions)
----- End of picture text -----

Source: Gartner

According to Gartner in 2012, as shown in the chart above, growth in smartphone units is forecasted to be approximately 24 per cent. CAGR 2011-2016. This implies a doubling of smartphone units in the three years from 2011 to over 1 billion devices by 2014. Alent considers the majority of the leading mobile phone manufacturers as customers and is therefore relatively indifferent with regards to which manufacturer wins market share.

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Similarly, the tablet market is forecast to grow by approximately 41 per cent. CAGR from 67 million units in 2011 to 371 million units in 2016.

Automotive industry

As in the electronics end-market, volume is a key driver of demand for Alent’s products in the industrial automotive segment. As shown in the chart below, vehicle volumes are expected to grow with a CAGR of approximately 6 per cent. from 2012 to 2015. In addition, there is a strong trend for increased electronic content in vehicles and increasing demand for functional and decorative coatings, which benefits both of Alent’s divisions. This dynamic will enable Alent to benefit from a twofold increase, both of a growing underlying market, as well as an increase in product penetration.

==> picture [311 x 323] intentionally omitted <==

Source: Prismark Partners

The need for improved corrosion-resistant and wear-resistant coatings, driven by the need to provide longer warranty protection to customers, increases demand for Alent’s products. The improved quality of automobiles and need to reduce their weight is also driving higher demand for increasingly sophisticated decorative finishes which both enhance customer perception of the vehicle and enable lower weight materials (e.g. plastics) to be used in their production.

A premium class automobile typically now contains between 70 and 100 microprocessor-based electronic control units (ECUs). According to Global Industry Analysts, in April 2012, electronics content as a percentage of the total vehicle cost is expected to rise significantly as market penetration of hybrid and electric vehicles increases. Alent supplies products used in the manufacturing and assembling of these electronic devices, which are increasingly being used to control a wide range of systems, including chassis and safety systems, lighting, powertrain, infotainment, interior electronics and electric vehicles.

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2 Business description and activities

Following the Demerger, Alent will be organised into business segments:

• Assembly Materials (formerly the Performance Materials division’s Joining Technologies business); and

• Surface Chemistries (formerly the Performance Materials division’s Surface Chemistries business).

Alent is a leading global supplier of advanced surface treatment and plating chemicals and electronics assembly materials. The principal end-market is global electronics production, which Alent estimates to account for approximately three quarters of its revenue. The automotive and other industrial markets represent the remaining quarter of revenue. The geographic split of the net sales value (being revenue excluding commodity metals where the costs of these are passed through to customers) of Alent is broadly one third in each of Europe, Asia and the Americas. Alent is present in over 100 countries and has over 2,500 employees and 23 major manufacturing sites worldwide. This enables Alent to supply its customers with highly engineered and customised specialty chemicals and materials on a just in time basis from its strategic locations around the world. Alent had revenue of £814 million, net sales value of £418 million, and a trading profit of £100 million in the year ended 31 December 2011.

The Assembly Materials business, trading as Alpha, supplies electronic interconnect materials to assemblers of PCBs and the semiconductor packaging industry. The Surface Chemistries business, trading as Enthone, supplies specialty electroplating chemicals and services for use in semiconductors and PCB fabrication, as well as corrosion resistant/decorative coatings for various industries, particularly the automotive industry.

The key product groups Alent supplies are:

• fabrication materials such as damascene copper electroplating chemistry which provides the “wires” within a semiconductor IC chip;

• packaging materials, including solder spheres for BGA and chip-scale packages, die attach adhesives and copper pillar electroplating chemistry;

• interconnect materials principally electroplating chemistries for fabrication of PCBs;

• assembly materials comprising solder in a variety of forms, including bar, wire, solder paste and pre-forms; and

• non-electronic electroplating products and services, principally for automotive applications which include decorative, wear-resistant and corrosion-resistant applications.

2.1 Assembly Materials business

• 2.1.1 Overview

The Assembly Materials business, trading as Alpha, supplies electronic interconnect materials to assemblers of PCBs and the semiconductor packaging industry. In PCB assembly, the principal product lines include solder, fluxes, adhesives and cleaning chemistries.

These products are used to attach electronic components, such as semiconductors and capacitors, onto bare boards and to form the necessary electrical and physical connection between the board and its components. The Assembly Materials business in 2011 represented 48 per cent. of Alent’s net sales value.

These products are essential to the longevity, reliability and functionality of the ultimate electronic device (e.g. a broken solder joint can stop the electronic device from functioning) and are also critical to the cost and efficiency of the process by which the electronic devices are manufactured. As a result, the quality of these materials is of critical importance to design-led OEM customers who face reputational risk from poor performance from CEM producers. These customers are typically highly-automated and use mass manufacturing techniques so productivity and reducing reject rates and wastage are highly cost-sensitive issues for customers. The technical specifications of the product, combined with the consistency and reliability of global supply, are therefore vitally important to them.

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Products typically need to be qualified by the electronic equipment company and the contract manufacturer before they can be used in production and this results in some “stickiness” of revenue once qualification is obtained from a customer. Becoming a qualified supplier is also important in ensuring that Alent is well placed to enable its customers to reach the next technological level. Given the specialty nature of the products, the chemicals are prepared on a batch basis, specific to the customer’s requirements.

2.1.2 Products

Alent’s product range includes materials for both traditional “through-hole” assembly methods and more advanced “surface-mount” technology and “flip chip” processes. Principal product lines in PCB assembly include: solder (available in bar, paste, powder and sphere form and in no-clean, water-soluble halogen-free, and lead-free options), fluxes, adhesives, cleaning chemistries and stencils, and squeegee blades.

Solder is the key product group within the Assembly Materials business as it accounts for three quarters of the division’s revenue. It may be supplied to customers in either bar form (i.e. solid, and sold as an ingot, which is used predominantly in the more traditional wave soldering technology for assembling PCBs), wire form (used for touch-up and repair work), paste form (used in the more modern and technologically-advanced surface mount technology for assembling PCBs), powder form, sphere form or preforms. Solder paste can also be supplied in no-clean, water soluble, leaded and lead-free options.

Solder is either an alloy of tin and lead (leaded solder) or, increasingly, tin and silver (leadfree solder). Small quantities of other materials are added to improve and alter product performance. Lead-free solder is normally around 97 per cent. tin and 3 per cent. silver but, due to the relatively high cost of silver, Alpha has developed a low (0.3 per cent.) silver solder (SACX[™] ) which, for certain applications, is a major cost saving product for its customers.

The manufacturing process for bar solder is relatively straightforward and involves the melting and mixing of the metals and casting of the final product into ingots. Solder paste, however, is a more complex product to manufacture as the metals need to be transformed into solder powder before mixing with flux to make solder paste. As electronic devices get smaller, the requirement to reduce the pitch of the solder on the PCB requires the solder powder to be produced in increasingly small particle sizes. The Assembly Materials business also supplies the semiconductor packaging industry with epoxy moulding compounds, underfills, encapsulents, and solder balls which are used to connect the package to the PCB and to provide electrical and thermal insulation.

Key raw materials include tin and silver of which Alpha consumed approximately 12,000 tonnes of tin and approximately 6 million ounces of silver in 2011. Alent “passes-through” to customers the majority of increases in the prices of these commodity metals and, therefore, net sales value which excludes the impact of commodity metals is a better measure of the underlying activity of this division.

2.1.3 Customers

Alent supplies assembly materials to the largest assemblers of PCBs and semiconductor packagers, including Delta, Jabil, Lite-On, Asustek, Flextronics, Foxconn, SCI-Sanmina, BenQ and Delphi. The Assembly Materials business’ top five customers represented 12 per cent. of the revenue attributable to Alent in 2011, and the average length of relationships with these customers is over 20 years.

2.1.4 Competition

Alent is one of the largest global suppliers of electronic assembly materials (solder). Competition is based on quality of products, reliability of supply, including global presence, customer service, technical support and R&D capabilities. Competitors include Senju and Tamura from Japan, Indium and Kester from the US, Henkel from Germany and Shenmao from Taiwan. Alent’s global scale and leading technologies allow leading-edge products to be reliably supplied on a just-in-time basis around the world with consistent chemistry. For

30

solder paste, which is the highest value-added of all solder products, Alent believes it is among the largest global suppliers with the top seven suppliers having around 80 per cent. of the market.

2.2 Surface Chemistries business

2.2.1 Overview

The Surface Chemistries business, trading as Enthone, supplies specialty electroplating chemicals and services for use in semiconductors, PCB fabrication and corrosion resistant/ decorative coatings. The Surface Chemistries business in 2011 represented 52 per cent. of Alent’s net sales value.

Electroplating is a plating process that uses electrical current to reduce cations of a desired material from a solution (called the electroplating chemical) and coat a conductive object with a thin layer of the material, such as a metal. Electroplating is used primarily for depositing a layer of material to bestow a desired property (e.g. abrasion-resistance and wear-resistance, corrosion protection, lubricity, aesthetic qualities, etc.) to a surface that otherwise lacks that property.

2.2.2 Products

The Surface Chemistries business supplies a very wide range of electro-plating chemicals (around 1,750 products) which support principally the electronics, automotive, building and jewellery industries as follows:

(a) Electronics end-markets:

Semiconductor: Enthone products include copper damascene, wafer bumping, gold wafer plating (used in radio frequency integrated circuitry) and through-silicon vias. Copper damascene is a particularly important product to Enthone as it is now the technological product of choice for the wiring of all semiconductors of a size below 90 nanometers. Enthone’s products are approved down to the 32 nanometer technology node by all the major suppliers of integrated circuits. Approval has also recently been obtained for the 22 nanometer technology node from the world’s largest supplier of micro processors. Enthone is currently working to secure further approvals for the 22 nanometer semiconductor, first launched in 2011, from other chip makers.

PCB fabrication: Enthone products include final finishes (to preserve solderability), through-hole metallisation, inner layer bonding and primary imaging.

Connectors and lead frames: Enthone products include precious metal and non-precious metal surface finishes for connectors and semiconductor lead frames.

(b) Industrial and automotive end-markets:

Decorative coatings: Enthone products include chrome deposited on copper then nickel, for metal and plastic parts. This is used in building (e.g. coating for taps) and automotive (plating on plastic) applications.

Wear-resistant coatings: Enthone products include hard chrome and electroless nickel applied to metal surfaces. This is used in many industrial, building and automotive applications.

Corrosion-resistant coatings: Enthone products include zinc and zinc alloy coating applied to metal surfaces often accompanied by the application of passivate and seal topcoat layers. This is used in many industrial, building and automotive applications.

Two main areas of focus within decorative coatings are:

Plating on plastic: the ability to render inexpensive plastic (e.g. ABS) conductive via the use of an etch and collodial palladium activator followed by electroplating of copper, nickel and chromium. Applications include automotive decorative trim

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(e.g. front radiator grill), plumbing fixtures, mobile telephones and cosmetics. Market drivers include both environmental (need for a substitute for hexavalent chromium etch) and performance (need for an improvement in corrosion protection for certain cold climate countries) factors.

Trivalent chromium: for both metal and plastic substrates, there is a desire to move from toxic hexavalent chrome to trivalent chromium. This move is driven by environmental concerns, but aesthetics (e.g. colour) or corrosion resistant performance must not be sacrificed.

Key raw material feedstocks include gold, chromic acid and nickel sulphate. The manufacturing of copper damascene is complex and has to be produced in a high-tech “clean room” environment due to the nature of the application. Other products typically involve only the cold batching of chemicals.

2.2.3 Customers

Alent supplies electroplating specialty chemistries to some of the leading manufacturers of semiconductors and PCB fabricators. These include ATMI (itself a distributor), AT&S, Ellington Group, Hannstar, Intel, Seagate, Taiwan Semiconductor Manufacturing Corporation (TSMC) and Viasystems.

In addition, Alent supplies leading automotive component and other industrial manufacturers, including Bolta Werks, Roto Frank Group, Continental, Bosch and Siegel Roberts/Guardian. The Surface Chemistries business’ top five customers represented 4 per cent. of the revenue of Alent in 2011 and the average length of relationship with these customers is over 15 years. In a similar way to Alpha, Enthone often has a two-way facing relationship with the OEMs (such as Apple) and the contract manufacturers/parts suppliers.

2.2.4 Competition

Alent is one of the largest global suppliers of specialty electroplating chemicals. Competition is on the basis of product reliability and delivery of the required customer performance at the lowest possible overall cost of ownership to customers. Competitors include Atotech (part of Total), MacDermid, Dow (principally through its acquisition of Rohm & Haas in 2008), OMG and Umicore.

As the products supplied by Alent tend to be high volume and are not physically suited to travelling significant distances, manufacturing proximity to customers can be important. Alent’s global presence and technical knowledge base allow products to be reliably supplied on a just-in-time basis around the world. Long product cycles, particularly in automotive, and the time taken to obtain OEM qualification and specification, make displacement by competitors or new entrants difficult. Alent estimates that the top seven suppliers have 65 per cent. of the total global market.

2.3 Compelling Assembly Materials and Surface Chemistries business joint proposal

An important and increasing proportion of Alent’s revenue comes from a combined Alpha and Enthone offering whereby products are tested together and are fully compatible. The use of combined products is customer-driven as OEMs stipulate to their assemblers/device suppliers the use of Alent products. For example, an Enthone product may provide the pad finish on a PCB to which Alpha solder paste is applied. This benefits Alent through gaining additional customers and has the effect of locking in Alent’s products for the lifecycle of a particular customer product’s lifespan.

In addition, as certain products are used at different points in the overall production of an electronic device, Alent gains additional visibility on future demand for certain products. For example, demand for damascene copper which goes into the manufacturing of semiconductors provides an indication of future demand for solder pastes when that semiconductor device is attached to a PCB. In addition, there are economies of scale between Alpha and Enthone through shared manufacturing and R&D functions.

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2.4 Competitive strengths

The Alent Directors believe that Alent benefits from the following key strengths:

Market leadership through differentiating products and solutions

Alent has globally-recognised brands and a number of market leading (number 1 or 2) positions in its chosen niches. Alent believes that few competitors are able to compete on a global scale, lacking Alent’s track record and ability to deliver identical products from multiple sites on a just-in-time basis.

Alent attributes its market-leading position to close collaborative partnerships with industry-defining customers (e.g. Alcatel-Lucent, Apple, HP, LG and Samsung). These relationships extend from the design stage through to extensive post-sale technical support. Alent’s in-depth application and process expertise drives new product development and the relevance of its products to these customers.

Alent’s products are process-critical and customised and hence there is an extensive qualification process which enhances customer “stickiness”. The cost of Alent’s products represents a small proportion of material cost to the customer but Alent’s products provide significant value through improving yield and reliability.

Technology and fast-cycle R&D providing innovation-driven growth

Alent is currently a leading supplier of a number of products to its customers, some of whom have OEM clients that have specified exclusive use of certain products of Alent (e.g. Apple). Alent’s business model is driven by a virtuous circle of customer collaboration. As a leading supplier of materials today, Alent works collaboratively with its customers to help them develop the next generation of products for their customers through a partnership approach. Alent engages in technology roadmap exchanges with large, multinational OEMs at the cutting edge of the electronics industry. As a result, Alent gains a deep understanding of customers’ technology and production challenges and is involved in the development of new technologies from inception to certification. This enables Alent to focus on delivering consistent and reliable customised solutions which are critical to its customers’ production processes. This collaborative approach and quality of service coupled with high value-added product materials differentiates Alent and enables it to maintain its market leading positions. Alent’s rolling target is for one third of revenue to be from products developed within the last three years and has stringent capital allocation criteria to ensure R&D funds are directed at high margin products.

Participating in high growth end-markets

Alent’s products serve attractive end-markets that have grown strongly in recent years with favourable long-term growth characteristics. Alent believes that there will be significant growth in demand for electronics products that incorporate components manufactured with products from both the Assembly Materials and Surface Chemistries business. This growth is being driven by a variety of factors, including:

• (a) demand for increasingly sophisticated consumer electronics products (smaller, faster and lighter) and multiple devices per individual;

• (b) technological advances, in particular the trend towards increased connectivity and portability in the consumer electronics industry (wifi, cellular 3G/4G and WLan); and

• (c) growing per capita income in developing markets.

Alent further benefits from having leading positions in the faster growing segments (e.g. smartphones, tablets and automotive electronics). Smartphone volumes are expected to grow at a CAGR of approximately 24 per cent. from 2011 to 2016 and media tablets are expected to grow at a CAGR of approximately 41 per cent. over the same period, according to Gartner.

In the automotive end-market, there is a trend towards increased electronic content as market penetration of hybrid and electric vehicles increases.

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Alent also has significant exposure to higher growth developing markets (Brazil, India and China represented 35 per cent. of revenue in 2011), which Alent believes provides a further driver for superior growth. Alent is continuously expanding into developing markets to ensure close customer proximity with a new facility in Manaus, Brazil opened in 2011 and new facilities to be completed in Shanghai and Chennai in 2012 and 2013 respectively.

Global footprint close to industry defining customers in Asia

Alent’s global presence, with a particularly strong proximity to customers in Asia, enables access to all key growth markets and the ability to remain at the forefront of advances in technology. There are few global competitors, which provides Alent with a competitive advantage as the large OEMs seek to deal with their suppliers on a global basis. Scale is therefore critical in order to secure these customers and to be able to provide the high quality and consistent service they demand of just in time supply and “copy exact” product. As a result, Alent has significant market shares in the niches in which it operates.

Longstanding and collaborative customer relationships

Alent has consistently held market leadership positions which, in the view of the Alent Board combined with its collaborative approach and the customer trust built over many years, will help ensure that existing customers remain customers in the future as new technology is developed.

The largest producer of microprocessors in the world has been a customer for over 20 years, and, in that time, Alent has developed products with the customer to address five of their key technology challenges. By supplying a number of different key manufacturers in each sub-sector, Alent is well placed to benefit from the growth in the overall market, regardless of which manufacturer is leading.

Value-add sales strategy targeting OEMs

Alent markets its niche, mission-critical products and services based on the value they deliver to the customer, and not on price. A key aspect of Alent’s offering is the quantification of improvements to customers’ throughput, yield and reliability derived from the manufacturing pilot lines used at Alent’s R&D centre. These give Alent the rare ability to quantify the monetary value a customer could gain by using Alent’s products. This allows Alent to demonstrate to the customer the potential savings generated through using Alent’s products.

Alent has an OEM marketing and sales strategy, as it is the OEMs which specify the technical requirements for the components which are made by Alent’s direct customers. This approach also maximises the cross-selling opportunities between Alpha and Enthone as Alent can assure compatibility of their respective products. OEMs stipulate to their assemblers or device suppliers the use of Alent’s products and therefore Alent gains additional customers. Once chosen by an OEM, suppliers are locked into using Alent’s products for the lifespan of that product. Alent’s products are typically a small proportion of the customer’s total input costs, and, therefore, reluctance to make changes to production processes reduces customer churn.

2.5 Strategy

The key elements of Alent’s strategy are to:

Focus on high growth end-markets

The electronics market is forecast to experience strong growth in terms of value, but even higher growth in terms of unit volumes, which are driven in part by the trend towards multiple electronic devices per individual (e.g. mobile phone and tablet). Alent has leading positions in the smartphone and tablet markets in which strong growth is expected. Unit growth is the more important driver of Alent’s growth, and, therefore, Alent is well positioned to benefit from this strong growth. Similarly, the global automotive market is expected to produce over 100 million vehicles by 2015, which represents a CAGR of approximately 6 per cent. 2011-2015. There is a trend in the automotive industry towards increased electronic content in cars, and increased use of functional coatings for both decorative and anti-corrosion applications, which is benefitting both parts of Alent’s business. Alent also intends to further enhance its presence in key geographical growth regions and markets.

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Further develop new markets and products

Alent, with its global presence and leading technologies, is constantly identifying new opportunities in high growth complementary segments such as solar and LED. Although these markets are still at relatively early stages of their development, the Alent Board believes it could provide significant additional sources of revenue to Alent in the future. The opportunity is both from applying existing products and technologies to these new markets and through developing new product solutions, as well as through bolt-on acquisitions.

Expand its value-add and OEM sales strategy

Alent continues to focus on developing the value sales competencies across all its employees so as to realise the full margin potential of the products and technologies which Alent offers. In addition, Alent intends to increase the service element of revenue through technical process support and customer training academies, which improves margins and further deepens the customer relationship.

Alent will continue to leverage its strong OEM relationships to further increase OEM qualification and specification of Alent’s specialty chemistries and technologies, as a result of which Alent’s customers are incentivised to use its products and technologies in their manufacturing processes.

Continue to develop higher-margin products and improve mix and operational efficiencies

Alent has pursued a strategy of moving away from lower-margin commoditised products (e.g. solder bar) and focusing on higher-margin, more innovative products such as damascene copper additives, immersion tin PCB surface finishes, wafer plating, plating on plastics and solder preforms. This process will continue, and the constant evolution, through product innovation and bolt-on acquisitions, means that further opportunities for mix improvement will arise. In addition, Alent plans to further roll-out and develop operational excellence programmes increasing productivity and reducing costs. Alent has been incorporating Six Sigma practices into its operations since 2001.

Further develop its technology and innovation leadership

Alent has invested significantly in R&D facilities and will continue to do so to ensure that Alent remains able to front-run emerging trends, and maintains its leadership position in terms of innovation and product development in its market niches. Indeed, R&D is critical to the continued success of Alent. The drive for smaller, smarter and faster electronics in particular, and the pace of change, means that only those players with the required scale and technical expertise are able successfully to take advantage of these market opportunities. Alent has historically been at the forefront of market developments and management remains confident that it will continue to be successful in leading the world in key new developments.

2.6 History of the business

Alent joined the Cookson Group as a result of Cookson’s acquisition in 1984 of Alpha Inc. which supplied interconnect materials to the electronics business. The acquisition of Alpha Metal (Hong Kong) the following year marked Cookson’s expansion into Asia. The electronics “boom” in the early 1990s provided opportunities for Cookson to acquire further electronics companies, but it was the acquisition of Enthone, a supplier of specialty chemicals and electroplating materials, in 1999 which led to the creation of Alent in its current form. During the period between 2003 and 2007, Cookson disposed of the highly cyclical Speedline capital equipment and Polyclad laminates businesses, as well as several smaller non-core businesses.

Alent now comprises two focused specialty chemical and materials businesses, the Assembly Materials business (a supplier of solder, fluxes, adhesives, and related products) and the Surface Chemistries business (a supplier of electroplating chemicals). These businesses complement each other with electronics customers looking to maximise reliability and performance.

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2.7 Operations

Alent has 23 major manufacturing facilities across the world. Alent’s facilities are well invested, with £64 million of capital expenditure spent over the last five years.

Assembly Materials’ main production facilities

• EMEA: Budapest (Hungary), Naarden and S’Hertogenbosch (the Netherlands);

• NAFTA: Monterrey and Mexico City (Mexico), Altoona, Pennsylvania (US);

• India: Chennai (production) and Bangalore (R&D centre);

• Asia-Pacific: Shenzhen, Guangxi, Shanghai and Hong Kong (China); Sihung City (Korea); Tao Yuan City (Taiwan); Singapore; Hiratsuka (Japan); and

• South America: Sao Paulo and Manaus (Brazil).

Surface Chemistries’ main production facilities

• EMEA: Langenfeld (Germany); S’Hertogenbosch (the Netherlands);

• NAFTA: West Haven, Connecticut and Bridgeview, Illinois (US); Mexico City (Mexico);

• Asia-Pacific: Hong Kong, Shenzhen, Tianjin and Shanghai (China); Singapore; and

• South America: Sao Paulo and Manaus (Brazil).

2.8 Research and development

R&D is critical to the continued success of Alent to meet the demand for leading-edge products for smaller, lighter and faster electronics and to take advantage of the opportunities presented by new and fast-growing markets, such as LED, power electronics and photovoltaic. In addition, tightening environmental regulations mean that improvements to existing products are required in order to ensure continued compliance.

Alent invests significant amounts in R&D and endeavours to sustain its competitive advantage and take appropriate action to ensure that its cost base remains competitive. In 2011, total R&D spend was £16 million, equivalent to 4 per cent. of net sales value. Alent estimates that approximately 80 per cent. of R&D is customer-driven, while the remaining approximately 20 per cent. is in relation to development of new products not specifically requested by customers.

Alent has made a significant capital investment in R&D in recent years and, in October 2007, opened a low-cost high-tech facility in India to lead the R&D effort. A further 12 technical centres operate as satellite laboratories around the world. Alent currently has over 170 research scientists and engineers.

The R&D strategy is the development of new products and the improvement of existing ones through innovation and developing new technologies and markets for Alent from inception to product certification, principally in response to technical or regulatory challenges arising for customers. The R&D function is prepared for future development and the new product development architecture is profit-focused. Alent’s rolling target is for one third of revenue to be from products developed within the last three years and has stringent capital allocation criteria to ensure R&D funds are directed at high margin products.

The business continues to focus on new product development and on penetrating new markets, including LED, solar and power electronics. These new products include Ready Ribbon[™] , a pre-fluxed, solder coated, copper ribbon used for connecting solar cells within a solar panel, and nano-silver die attach products for use in the manufacture of LED lights and power electronics. Related new production lines for Ready Ribbon™were completed towards the end of 2011 in the Netherlands and Singapore, and a further line in the US was successfully completed in early 2012. The first nano-silver production line in Singapore has also now been successfully commissioned. Both products attracted high levels of customer interest ahead of their recent commercial launch and, once product trials are completed by Alent’s customers, commercial sales are expected to commence shortly.

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Alent has a unique R&D offering to customers with leading technology specifications, such as three surface mount technology pilot lines enabling Alent to recreate customer operations and a state-of-the-art assembly line for LED product development. Alent is able to differentiate itself from the competition and work in collaboration with its customers on developing the next generation of leading-edge products.

2.9 Intellectual property

Trade marks

Alent has applied for registered trade mark protection of its brand ALENT in the EU as a Community trade mark and as an international trade mark designating the following countries: Australia, China, Israel, Japan, Singapore, South Korea, Turkey, USA and Vietnam.

Patents

Alent’s success is dependent in part on its ability to obtain patent protection for its products and their design and manufacturing processes. Alent applies for patent protection in respect of its major products, technologies and processes in a number of jurisdictions, including in Europe and the US. Alent has approximately 500 patents granted and approximately 360 pending patent applications, which have been registered in several countries around the world.

New product and service offerings by competitors are regularly monitored and any perceived breach of an Alent patent is vigorously challenged. To the extent possible, Alent avoids holding key intellectual property in countries which do not afford an acceptable degree of legal protection.

Alent keeps certain of its technical developments secret rather than apply for patent protection and imposes confidentiality obligations on its employees and third party contractors.

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PART VIII OPERATING AND FINANCIAL REVIEW

The following discussion of Alent’s financial condition and operating results should be read in conjunction with Alent’s audited historical consolidated financial information for the years ended 31 December 2011, 31 December 2010 and 31 December 2009 and Alent’s audited financial information for the six months ended 30 June 2012 and the unaudited financial information for the six months ended 30 June 2011, all of which is contained in Part IX: “ Historical Financial Information ” of this document.

This discussion contains forward-looking statements based on current expectations and assumptions about Alent’s future business. The actual results of Alent may differ materially from those discussed in these forwardlooking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this document, including in Part II: “ Risk Factors ” of this document .

Unless otherwise indicated, the selected financial information included in this Part VIII has been extracted without material adjustment from Alent’s historical consolidated financial information contained in Part IX of this document.

1 Business performance and financial condition

1.1 Overview of business

Following the Demerger, Alent will be organised into business segments:

• Assembly Materials (formerly the Performance Materials division’s Joining Technologies business); and

• Surface Chemistries (formerly the Performance Materials division’s Surface Chemistries business).

Alent is a leading global supplier of advanced surface treatment and plating chemicals and electronics assembly materials. The principal end-market is global electronics production, which Alent estimates to account for approximately three quarters of its revenue. The automotive and other industrial markets represent the remaining quarter of revenue. The geographic split of the net sales value (being revenue excluding commodity metals where the costs of these are passed through to customers) of Alent is broadly one third in each of Europe, Asia and the Americas. Alent is present in over 100 countries and has over 2,500 employees and 23 major manufacturing sites worldwide. This enables Alent to supply its customers with highly engineered and customised specialty chemicals and materials on a just in time basis from its strategic locations around the world. Alent had revenue of £814 million, net sales value of £418 million, and a trading profit of £100 million in the year ended 31 December 2011.

The Assembly Materials business, trading as Alpha, supplies electronic interconnect materials to assemblers of PCBs and the semiconductor packaging industry. The Surface Chemistries business, trading as Enthone, supplies specialty electroplating chemicals and services for use in semiconductors and PCB fabrication, as well as corrosion resistant/decorative coatings for various industries, particularly the automotive industry.

The key product groups Alent supplies are:

• fabrication materials such as damascene copper electroplating chemistry which provides the “wires” within a semiconductor IC chip;

• packaging materials, including solder spheres for BGA and chip-scale packages, die attach adhesives and copper pillar electroplating chemistry;

• interconnect materials principally electroplating chemistries for fabrication of PCBs;

• assembly materials comprising solder in a variety of forms, including bar, wire, solder paste and pre-forms; and

• non-electronic electroplating products and services, principally for automotive applications which include decorative, wear-resistant and corrosion-resistant applications.

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Assembly Materials business

Overview

The Assembly Materials business, trading as Alpha, supplies electronic interconnect materials to assemblers of PCBs and the semiconductor packaging industry. In PCB assembly, the principal product lines include solder, fluxes, adhesives and cleaning chemistries.

These products are used to attach electronic components, such as semiconductors and capacitors, onto bare boards and to form the necessary electrical and physical connection between the board and its components. The Assembly Materials business in 2011 represented 48 per cent. of Alent’s net sales value.

These products are essential to the longevity, reliability and functionality of the ultimate electronic device (e.g. a broken solder joint can stop the electronic device from functioning) and are also critical to the cost and efficiency of the process by which the electronic devices are manufactured. As a result, the quality of these materials is of critical importance to design-led OEM customers who face reputational risk from poor performance from CEM producers. These customers are typically highly-automated and use mass manufacturing techniques so productivity and reducing reject rates and wastage are highly cost-sensitive issues for customers. The technical specifications of the product, combined with the consistency and reliability of global supply, are therefore vitally important to them.

Products typically need to be qualified by the electronic equipment company and the contract manufacturer before they can be used in production and this results in some “stickiness” of revenue once qualification is obtained from a customer. Becoming a qualified supplier is also important in ensuring that Alent is well placed to enable its customers to reach the next technological level. Given the specialty nature of the products, the chemicals are prepared on a batch basis, specific to the customer’s requirements.

Products

Alent’s product range includes materials for both traditional “through-hole” assembly methods and more advanced “surface-mount” technology and “flip chip” processes. Principal product lines in PCB assembly include: solder (available in bar, paste, powder and sphere form and in no-clean, water-soluble halogen-free, and lead-free options), fluxes, adhesives, cleaning chemistries and stencils, and squeegee blades.

Solder is the key product group within the Assembly Materials business as it accounts for three quarters of the division’s revenue. It may be supplied to customers in either bar form (i.e. solid, and sold as an ingot, which is used predominantly in the more traditional wave soldering technology for assembling PCBs), wire form (used for touch-up and repair work), paste form (used in the more modern and technologically-advanced surface mount technology for assembling PCBs), powder form, sphere form or preforms. Solder paste can also be supplied in no-clean, water soluble, leaded and lead-free options.

Solder is either an alloy of tin and lead (leaded solder) or, increasingly, tin and silver (lead-free solder). Small quantities of other materials are added to improve and alter product performance. Lead-free solder is normally around 97 per cent. tin and 3 per cent. silver but, due to the relatively high cost of silver, Alpha has developed a low (0.3 per cent.) silver solder (SACX™) which, for certain applications, is a major cost saving product for its customers.

The manufacturing process for bar solder is relatively straightforward and involves the melting and mixing of the metals and casting of the final product into ingots. Solder paste, however, is a more complex product to manufacture as the metals need to be transformed into solder powder before mixing with flux to make solder paste. As electronic devices get smaller, the requirement to reduce the pitch of the solder on the PCB requires the solder powder to be produced in increasingly small particle sizes. The Assembly Materials business also supplies the semiconductor packaging industry with epoxy moulding compounds, underfills, encapsulents, and solder balls which are used to connect the package to the PCB and to provide electrical and thermal insulation.

Key raw materials include tin and silver of which Alpha consumed approximately 12,000 tonnes of tin and approximately 6 million ounces of silver in 2011. Alent “passes-through” to customers the majority of increases in the prices of these commodity metals and, therefore, net sales value which excludes the impact of commodity metals is a better measure of the underlying activity of this division.

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Net sales value by major product group (at constant exchange rates and metal prices for each product group and reconciled to total segmental net sales value at reported rates) is as follows:

Net sales value by product group Productgroup Wave soldering Surface mount assembly Microelectronics Other Total segment net sales value – at HY 2012 exchange rates and metal prices Currency and metal price impact Total segment net sales value – at reported exchange rates and metal prices	Products Bar solder and flux Wire solder, solder paste, preforms and stencils Adhesives, spheres, die attach and LED Reclaim, water treatment and photovoltaics	FY 2011 42.1 89.3 12.4 48.1 191.9 6.6 198.5	HY 2011 (unaudited) (£m) 20.4 40.4 6.8 23.6 91.2 4.0 95.2	HY 2012
				24.4 47.4 5.7 20.9 98.4 — 98.4

Surface Chemistries business

Overview

The Surface Chemistries business, trading as Enthone, supplies specialty electroplating chemicals and services for use in semiconductors, PCB fabrication and corrosion resistant/decorative coatings. The Surface Chemistries business in 2011 represented 52 per cent. of Alent’s net sales value.

Electroplating is a plating process that uses electrical current to reduce cations of a desired material from a solution (called the electroplating chemical) and coat a conductive object with a thin layer of the material, such as a metal. Electroplating is used primarily for depositing a layer of material to bestow a desired property (e.g. abrasion-resistance and wear-resistance, corrosion protection, lubricity, aesthetic qualities, etc.) to a surface that otherwise lacks that property.

Products

The Surface Chemistries business supplies a very wide range of electro-plating chemicals (around 1,750 products) which support principally the electronics, automotive, building and jewellery industries as follows:

• (a) Electronics end-markets:

• Semiconductor: Enthone products include copper damascene, wafer bumping, gold wafer plating (used in radio frequency integrated circuitry) and through-silicon vias. Copper damascene is a particularly important product to Enthone as it is now the technological product of choice for the wiring of all semiconductors of a size below 90 nanometers. Enthone’s products are approved down to the 32 nanometer technology node by all the major suppliers of integrated circuits. Approval has also recently been obtained for the 22 nanometer technology node from the world’s largest supplier of micro processessors. Enthone is currently working to secure further approvals for the 22 nanometer semiconductor, first launched in 2011, from other chip makers.

PCB fabrication: Enthone products include final finishes (to preserve solderability), through-hole metallisation, inner layer bonding and primary imaging.

Connectors and lead frames: Enthone products include precious metal and non-precious metal surface finishes for connectors and semiconductor lead frames.

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(b) Industrial and automotive end-markets:

Decorative coatings: Enthone products include chrome deposited on copper then nickel, for metal and plastic parts. This is used in building (e.g. coating for taps) and automotive (plating on plastic) applications.

Wear-resistant coatings: Enthone products include hard chrome and electroless nickel applied to metal surfaces. This is used in many industrial, building and automotive applications.

Corrosion-resistant coatings: Enthone products include zinc and zinc alloy coating applied to metal surfaces often accompanied by the application of passivate and seal topcoat layers. This is used in many industrial, building and automotive applications.

Two main areas of focus within decorative coatings are:

Plating on plastic: the ability to render inexpensive plastic (e.g. ABS) conductive via the use of an etch and collodial palladium activator followed by electroplating of copper, nickel and chromium. Applications include automotive decorative trim (e.g. front radiator grill), plumbing fixtures, mobile telephones and cosmetics. Market drivers include both environmental (need for a substitute for hexavalent chromium etch) and performance (need for an improvement in corrosion protection for certain cold climate countries) factors.

Trivalent chromium: for both metal and plastic substrates, there is a desire to move from toxic hexavalent chrome to trivalent chromium. This move is driven by environmental concerns, but aesthetics (e.g. colour) or corrosion resistant performance must not be sacrificed.

Key raw material feedstocks include gold, chromic acid and nickel sulphate. The manufacturing of copper damascene is complex and has to be produced in a high-tech “clean room” environment due to the nature of the application. Other products typically involve only the cold batching of chemicals.

Net sales value by major product group (at constant exchange rates and metal prices for each product group and reconciled to total segmental net sales value at reported rates) is as follows:

Net sales value by product group Productgroup Performance coatings Electronics Other Total segment net sales value – at HY 2012 exchange rates and metal prices Currency and metal price impact Total segment net sales value – at reported exchange rates and metal prices	Products Corrosion / wear protection and decorative coatings Damascene copper, copper piller, interconnect materials Equipment, resale items, other	FY 2011 96.0 106.0 15.8 217.8 1.4 219.2	HY 2011 (unaudited) (£m) 49.5 53.2 8.5 111.2 0.2 111.4	HY 2012	HY 2012
					49.3 51.8 5.6 106.7 (0.3) 106.4

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1.2 Basis of presentation and segmental analysis

Information on the basis of presentation is set out at paragraph 2 of the notes to the consolidated financial statements set out in Part IX: “ Historical Financial Information ” of this document.

1.2.1 Principal income statement line items

Revenue

Alent revenue comprises the fair value of the consideration received or receivable for goods supplied and services rendered to customers after deducting rebates, discounts and valueadded taxes, and after eliminating sales between Alent companies. Revenue from the sale of goods is recognised when persuasive evidence exists, usually in the form of an executed sales agreement, that the significant risks and rewards of ownership have been transferred to the customer, recovery of the consideration is probable, there is no continuing management involvement with the goods, and the amount of revenue can be measured reliably. A provision for anticipated returns is made based primarily on historical return rates. Revenue from multi-year contractual arrangements, such as equipment installation contracts, is recognised as performance occurs. Where a contractual arrangement consists of two or more separate elements that can be provided to customers either on a stand-alone basis or as an extra, such as the provision of supplementary materials with equipment, revenue is recognised for each element as if it was an individual contractual arrangement.

Trading profit

Alent’s trading profit comprises profit from operations before the impact of any item reported as an “exceptional item” in accordance with the policy stated in note 2.6 to the historical financial information in Part IX.

Finance costs and income

Finance costs and income consists of the net amount of items such as interest on cash and deposits and other investment income, and interest on loans and bonds, finance charges on leases and the unwinding of discounts on provisions and other financial instruments.

Income tax costs

Alent income tax charges in the historical financial information have been determined based on the tax charges recorded, where appropriate, by Alent companies in their local statutory accounts, as well as certain adjustments relating to those entities made for Cookson Group consolidation purposes.

1.2.2 Impact of Demerger

In May 2012, the Cookson Board announced that it had initiated a strategic review to consider a number of options for the Cookson Group, including the potential separation of Cookson Group’s three divisions, the Engineered Ceramics and Precious Metals Processing divisions and the Performance Materials division, into two independently listed companies by way of the Demerger.

On Demerger, the net debt of Cookson Group immediately prior to the Demerger will be apportioned to Vesuvius and Alent broadly in proportion to the contribution each has made to Cookson Group’s total EBITDA for the 12 months prior to the date of the Demerger. The approximate split of Cookson Group net debt at the date of the Demerger is expected to be 66 per cent. for Vesuvius and 34 per cent. for Alent.

As at 30 June 2012, Cookson had a £600 million revolving credit facility with a syndicate of 16 banks, which matures in April 2016. Cookson also had $250 million of US Private Placement loan notes, issued in two series: $110 million at a fixed interest rate of 4.26 per cent., maturing in December 2017; and $140 million at a fixed interest rate of 4.97 per cent., maturing in December 2020. The weighted average interest rate on the notes is 4.66 per cent. and the weighted average remaining duration as at 30 June 2012 was 7.1 years.

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Cookson has signed amendments to both its US Private Placement loan note purchase agreement and its syndicated bank facility to allow the potential Demerger of the Performance Materials division from the Cookson Group. On Demerger, the US Private Placement loan notes will continue to be obligations of Cookson, which will change its name to Cookson Group Limited and be a wholly-owned subsidiary of Vesuvius plc. The syndicated bank facility will also remain with Cookson, with the commitment reducing from the current £600 million to £425 million from the date of the Demerger.

Alent has also agreed a five-year £300 million revolving credit facility with a syndicate of 9 banks, which can only be drawn upon by Alent shortly before completion of the Demerger. This facility matures in September 2017.

Further details of the Alent syndicated bank facility are set out in paragraph 1.3.1 of the section entitled “Material Contracts” in Part XIII: “ Additional Information ” of this document.

Shortly before the Demerger, and as agreed with the UK Plan Trustee, the liabilities of the UK Plan attributable to Alent participating companies will be funded by way of a payment made in mitigation of the statutory debt arising on those Alent companies ceasing to participate in the UK Plan. This will be combined with an apportionment of any remaining pension liabilities of the Alent participating companies to Cookson Group. As a consequence, after the Demerger, all remaining pension liabilities of the UK Plan will remain with Vesuvius. Obligations relating to defined benefit plans in other jurisdictions in which Cookson Group operates post-retirement plans will be retained by the legal entity which currently acts as the plan sponsor.

Based on the above allocation of Cookson Group’s pension liabilities, of the total Cookson Group’s net employee benefits deficit of £81 million as at 30 June 2012, £26 million has been apportioned to Alent, with the remaining £55 million being apportioned to Vesuvius. However, it should be noted that the level of net employee benefits deficit for Alent as at the date of the Demerger will reflect any changes in the level of the deficit or surplus of the various plans that occur between 1 July 2012 and the date of the Demerger.

Throughout the Reporting Period, Cookson Group has incurred costs within its central headquarters in London. These costs have been deducted from the underlying trading results of Cookson Group’s three divisions – Engineered Ceramics, Performance Materials and Precious Metals Processing – in arriving at the results for Cookson Group as a whole. These centrally incurred costs, and their treatment in Cookson Group’s historic financial information, can be analysed as follows:

• “Unallocated central costs”: headquarter costs (e.g. Cookson Board costs) relating to Cookson Group’s operations as a public company. These costs have historically not been allocated to Cookson Group’s three divisions as any allocation would have been arbitrary in nature.

• “Allocated central costs”: headquarter costs (e.g. tax and treasury functions) which relate to the management and oversight of Cookson Group’s three divisions. These costs have historically been allocated to the three divisions in proportion to their revenue.

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In producing the historical financial information included in Part IX: “ Historical Financial Information ” of this document, all of the “unallocated central costs” relating to Cookson’s central headquarters have been excluded from the historical financial information for Alent. This is because any allocation would be arbitrary in nature and may not reflect properly the headquarter costs as would have been incurred by Alent had it been a standalone business throughout the Reporting Period. However, the historical financial information for Alent does reflect the “allocated central costs” relating to Cookson’s central headquarters as these costs have historically been allocated against the Performance Materials division of Cookson Group in its historical published financial statements. The following table shows the impact of these allocated central headquarters costs on Alent’s historic results:

Trading profit, as reported . . . . . . . . . . . Allocated central costs . . . . . . . . . . . . . . Trading profit before central costs . . . . . EBITDA1, as reported . . . . . . . . . . . . . . . Allocated central costs . . . . . . . . . . . . . . EBITDA before central costs . . . . . . . . .	FY 2009 39.2 1.7 40.9 48.5 1.7 50.2	FY 2010 71.0 3.6 74.6 79.7 3.6 83.3	FY 2011 (£m) 99.6 2.3 101.9 108.1 2.3 110.4	HY 2011 (unaudited) 45.0 1.5 46.5 49.2 1.5 50.7	HY 2012
					50.0 0.4 50.4 54.3 0.4 54.7

Notes:

• (1) Refer to note 4 of the historical financial information for definitions

• (2) In producing the trading profit or EBITDA for the two businesses of Alent (Assembly Materials and Surface Chemistries), the allocated central costs noted above would have been allocated between the two businesses based on their relative contribution to Alent’s total revenue.

• (3) For comparison purposes with the above information, the trading profit before all “allocated central costs” of Alent in FY 2008 was £53.8 million and the EBITDA before all “allocated central costs” was £63.1 million. “Allocated central costs” in 2008 were £2.1 million.

For the year ending 31 December 2013, the central headquarter costs which will need to be deducted from the aggregate segmental results for Assembly Materials and Surface Chemistries to arrive at the results for the Alent business as a whole are expected to be approximately £6 million.

The finance costs relating to Cookson’s borrowings (which include the US Private Placement loan notes and the Cookson syndicated bank facility) have been reported as finance costs of Vesuvius and therefore the historical finance costs of Alent are not necessarily representative of those that would have been reported had Alent been an independent group during the Reporting Period; nor are they therefore necessarily representative of the finance costs that may arise in the future.

Based on the above allocations of Cookson Group’s net debt and pension liabilities between Vesuvius and Alent, net finance costs for Alent and Vesuvius for the year ending 31 December 2013 (as a proportion of total finance costs that would otherwise have been incurred by Cookson if the Demerger was not to take place) are expected to be split approximately as follows:

Alent Interest payable on borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33% Pension interest (being interest on retirement benefit obligations less the expected return on retirement benefit assets) . . . . . . . . . . 20%	Vesuvius Total 67% 100% 80% 100%

As stated above, for the purposes of this historical financial information, the profit before tax reported for Alent in the Reporting Period is stated having borne a level of borrowings costs and central headquarter costs both of which are expected to be higher immediately after the Demerger. In addition, the tax charges recorded in the historical income statement of Alent have been affected by tax arrangements within the Cookson Group. As a consequence therefore, the historical tax charges and the effective tax rate of Alent reflected in the historical financial information are neither necessarily representative of those that

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would have been reported had Alent been an independent group during the Reporting Period; nor are they therefore necessarily representative of the tax costs and effective tax rate that may arise in the future.

1.3 Key factors affecting results of operations

Principal factors affecting results of operations

The following section contains a description of the key drivers for the results of operations of Alent, both in general and those issues specific to the three and a half years under review.

1.3.1 Economic environment

Macroeconomic conditions, particularly changes in consumer and industrial demand, have a significant impact on Alent’s business and results of operations. The challenging global macro-economic trends evident through the last three and a half years have impacted Alent’s businesses, but growth in electronics end-markets has continued through to June 2012. Strong areas of growth within consumer electronics included smartphones, tablets, flat screen TVs, games consoles and e-readers. Automotive markets have shown good improvement from the downturn in 2008/9, although industrial end-markets have generally remained subdued. During the first half of 2012, electronics end-markets have been reasonably stable, with a continued strong performance in the Americas and Asia-Pacific more than offsetting weaker end-market conditions in Europe. Automotive and industrial markets have been generally strong in the Americas and Asia-Pacific, but weaker in Europe, particularly in the second quarter.

1.3.2 Demand drivers

Electronics

Electronics end-markets, which make up three quarters of Alent’s revenue, improved progressively during the period under review. According to estimates from Henderson Ventures, global production of electronic equipment (measured in US dollars at constant currency) grew in 2011 by 4 per cent., following a 13 per cent. increase in 2010. For Alent the key revenue driver is the level of unit production for electronic devices and not market value. Forecasts from Henderson Ventures published in October 2012 have electronic equipment growing by 1.0 per cent. in 2012, 5.9 per cent. in 2013 and 7.3 per cent. in 2014.

Global PC unit shipments (both traditional and tablet PCs) were estimated by Henderson Ventures to be 14 per cent. higher in 2011 compared with 2010, with tablet units increasing by more than three times from 20 million units in 2010 to 67 million units in 2011. This followed the 21 per cent. growth for PC unit shipments in 2010 compared to 2009. Henderson Ventures expects tablet sales to increase to around 115 million units in 2012.

Global unit shipments of mobile phones in 2011 increased by 12 per cent. to 1.8 billion compared to 2010 following an increase of 21 per cent. over 2009. Just over one quarter of these units in 2011 being more technically sophisticated smartphones compared to just under 20 per cent. in 2010. Smartphones use a number of Alent products, in particular “tape and reel” packaged pre-forms, which are manufactured shapes of solder used in jointing applications requiring high physical strength. Sales of these products have almost doubled in 2011. A growth of 40 per cent. in smartphone unit sales in 2012 is expected, according to Henderson Ventures.

Other strong areas of growth within consumer electronics during the period under review included smartphones, tablets, flat screen TVs, game consoles and e-readers, all of which may have Alent product content within them.

Automotive and industrial

Automotive and industrial end-markets make up a quarter of Alent’s revenue. Automotive end-markets showed good improvement during the period under review, particularly in 2011 for higher value vehicles which typically use more of Alent’s products. Industrial end-markets have generally remained subdued, particularly those related to construction.

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1.3.3 Product mix

Alent’s revenue and gross profit margin during the periods under review were affected by the proportion of each type of product that it sells, which is referred to as product mix. During the period under review, Alent has pursued a strategy of exiting more commoditised products such as some types of lower margin bar solder to focus on innovative, higher value-added and higher margin, products such as advanced solder pastes and “tape and reel” packaged solder pre-forms.

Mainly as a result of this mix change, Alent’s trading profit in 2011 increased significantly to £99.6 million, an increase of 40 per cent. over that reported in 2010. The return on sales margin rose to 12.2 per cent. (2010: 9.8 per cent.). Net sales value, being revenue less the value of tin and precious metals included in revenue, was £418 million (2010: £410 million), an increase of 2 per cent. and the return on net sales value was 23.8 per cent. (2010: 17.3 per cent.).

1.3.4 Competition

Competitors in Alent’s markets can impact on the market share and commercial terms Alent is able to achieve with its customers. Alent is one of the largest suppliers of electronic assembly materials (solder) and electro-plating chemicals globally. Competition is based on quality of products, reliability of supply and the ability to supply globally, customer service, and technical support and R&D capabilities.

1.3.5 Purchases of raw materials

A large proportion of revenue comprises raw material costs for commodity metals, principally tin and silver for the Assembly Materials business and gold and palladium for the Surface Chemistries business. Alent “passes through” to customers the impact of changes in the market prices for these metals. As a result, revenue will vary depending on the prevailing prices of these metals. Net sales values (which excludes these amounts from revenue) show the underlying revenue without the impact of metal price fluctuations “passed through” to customers, and therefore the Board believes is a better measure of the performance of the business.

In the first half of 2012, Alent’s revenue included the pass-through of £78 million of tin, £48 million of silver, and £31 million of gold and palladium. The average prices of tin, silver and palladium were, respectively, 27 per cent., 14 per cent. and 16 per cent. lower than for the first half of 2011, such that approximately £27 million of Alent’s revenue decrease was as a result of these lower metal prices. Excluding the impact of these commodity metals, underlying revenue in 2012 was 7 per cent. lower than the first half of 2011.

In 2011, Alent’s revenue included the pass-through of £206 million of tin, £122 million of silver, and £68 million of gold and palladium. The average prices of tin, silver and gold were, respectively, 35 per cent., 83 per cent. and 29 per cent. higher than 2010, such that approximately £111 million of Alent’s revenue increase was as a result of these higher metal prices. Excluding the impact of these commodity metals and adjusting for a small disposal in December 2010, underlying revenue in 2011 was 1 per cent. higher than 2010.

In 2010, the average prices of tin and silver were, respectively, 53 per cent. and 36 per cent. higher than 2009, such that approximately £65 million of Alent’s revenue increase was as a result of these higher metal prices. Excluding the impact of these commodity metals, underlying revenue was 17 per cent. higher than 2009.

1.3.6 R&D

R&D spending is a key performance indicator monitored by Alent’s management to ensure that adequate resources are being invested to maintain Alent’s pipeline of new products and services.

The electronics market is a rapidly evolving market and there is a strong trend towards increased connectivity and portability in the consumer electronics industry. Consumer demand is for faster, smaller and lighter electronic devices, which is leading to increasing miniaturisation and complexity and the use of multi-layer circuit boards. Alent is at the leading edge of this trend, and its investment in R&D in partnership with its customers is necessary to maintain this position.

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By continuing to develop innovative products and services, Alent can create leading market positions in profitable businesses, which promotes sustainability of earnings. R&D spending is therefore maintained at a high level and is a key performance indicator. R&D spend (and as a percentage of net sales value) was £8.4 million (4.1 per cent.) in the first half of 2012, £16.0 million (3.8 per cent.) in 2011, £14.7 million (3.6 per cent.) in 2010 and £13.2 million (3.9 per cent.) in 2009.

The Assembly Materials business continues to focus on new product development and on penetrating new markets, including LED, solar and power electronics. These new products include Ready Ribbon™, a pre-fluxed, solder coated, copper ribbon used for connecting solar cells within a solar panel, and nano-silver die attach products for use in the manufacture of LED lights and power electronics.

The Board believes that the Surface Chemistries business continues to lead the world in the development of damascene copper additives and approval has recently been obtained for the 22 nanometre semiconductor wafer node from the world’s largest supplier of integrated circuits.

1.3.7 Capital expenditure

Capital expenditure comprises payments made to acquire property, plant and equipment necessary to maintain and grow Alent’s operations. Capital expenditure was £13.8 million in the first half of 2012, £16.1 million in 2011, £11.0 million in 2010 and £4.8 million in 2009. In 2011 capital expenditure was 1.9 times depreciation and included investments to expand production capacity in higher growth markets, notably China, India and Brazil.

Capital expenditure is expected to be approximately £20 million in FY 2012 (2.2 times depreciation) and approximately £22 million in FY 2013 (2.0 times depreciation).

1.3.8 Restructuring charges

Restructuring charges are associated with the transformation activities which Alent has taken in the period under review to further improve business performance and reduce operating costs.

In 2009, Alent incurred £27.8 million of restructuring charges, of which £18.2 million related to the provision for discounted future onerous lease rental costs for Alent’s facility in Woking, UK. The restructuring of Alent’s UK operations resulted in the transfer of a significant amount of UK production to other existing Alent facilities outside of the UK. The remaining restructuring costs in Alent principally comprised redundancy and other cash-related costs associated with the rationalisation of Alent’s European and US operations.

In 2010, Alent incurred restructuring charges of £5.5 million of which the principal element was £3.2 million for restructuring and redundancy costs in the Surface Chemistries business in Europe. In 2011, restructuring charges were £1.9 million, principally arising from headcount reductions.

In the first half of 2012, Alent incurred restructuring charges of £2.8 million in connection with initiatives that included redundancy programmes, the streamlining of manufacturing processes and the rationalisation of product lines.

Restructuring charges are expected to be approximately £5 million in FY 2012 and approximately £2 million per annum thereafter. The cash outflow in respect of restructuring is expected to be approximately £3 million in FY 2012 and approximately £2 million per annum thereafter.

1.3.9 Pension scheme contributions

Alent typically operates defined contribution pension plans in most countries in which it operates, but some of its businesses also operate defined benefit plans, principally in the US where Alent’s principal defined benefit pension plan is closed to new members and to further accruals for existing members.

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The PBGC has confirmed that no additional cash contributions are required to be made into the RSP as a result of the Demerger. Additional funding payments of approximately $4 million (£2 million) per annum are currently being made by Cookson Group into the RSP. This additional contribution is being made on a voluntary basis and, as such, its continuation is subject to periodic review.

1.3.10 Foreign exchange fluctuations

Alent is impacted by foreign currency exchange rate fluctuations in relation to its underlying operating transactions, many of which are in currencies other than pounds sterling (principally US dollars, euros and Chinese renminbi), and in relation to the translation impact on reported financial results.

In its operations, and where appropriate, Alent uses forward foreign exchange contracts to mitigate Alent’s material exposures to the cash flow risk associated with foreign currency transactions.

In the first half of 2012, the net translation impact of using 2012 exchange rates to translate 2011 results was not material. In 2011, the net translation impact of exchange rates on 2010 results was also not material. During 2010, average exchange rates in sterling weakened against the US dollar by 1 per cent. and the Chinese renminbi by 2 per cent., but strengthened against the euro by 4 per cent. In 2010, the net translation impact of foreign exchange rates on 2009 results was to increase 2009 revenue by £12 million and 2009 trading profit by £1.1 million.

1.3.11 Taxation

During the periods under review, Alent plc’s consolidated profit before tax and tax charges have been significantly impacted by a number of factors, including the level of profitability and the Alent finance structure.

As stated in the Basis of Preparation note 2.2 to the consolidated financial statements set out in Part IX of this document, for the purposes of this historical financial information, the profit before tax reported for Alent in the Reporting Period is stated having borne a level of borrowings costs and central headquarter costs both of which are expected to be higher immediately after the Demerger. In addition, the tax charges recorded in the historical income statement of Alent have been affected by tax arrangements within the Cookson Group. As a consequence therefore, the historical tax charges and the effective tax rate of Alent reflected in the historical financial information are neither necessarily representative of those that would have been reported had Alent been an independent group during the Reporting Period; nor are they therefore necessarily representative of the tax costs and effective tax rate that may arise in the future.

Notwithstanding the positive impact of the basis of preparation noted above, in 2009 the effective tax rate on headline profit before tax (before share of post-tax profit or loss from joint ventures) was 17.8 per cent. due to Alent’s low level and geographical mix of profit before tax. Profit before tax was reported in a number of tax-paying jurisdictions (such as China and India), whilst losses before tax were incurred in jurisdictions (notably the US) where it was not appropriate to record a tax credit. This situation was not repeated in 2010 when the rate reduced to 11.7 percent. and also reflected some non-recurring tax credits. For 2011, the effective tax rate on headline profit before tax (before share of post-tax profit from joint ventures) was 17.3 per cent. and 16.2 per cent. in the first half of 2012.

For FY 2013, the effective tax rate (on a cash tax basis and before the share of post-tax results from joint ventures) on headline profit before tax is expected to be in the range of 23 to 24 per cent.

On the Demerger, Alent will have significant gross tax losses in the US (which as at 30 June 2012 were estimated to be approximately $260 million (£165 million) with a tax value of $99 million (£63 million)), which are available to offset future taxable US income. Further details on the tax value of these gross losses and their duration (along with details of the tax value of losses in other countries) as at 31 December 2011 is detailed in note 11.4 of the historical financial information contained in Section A of Part IX “ Historical Financial Information ” of this document.

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1.4 Results of operations

Revenue . . . . . . . . . . . . . . . Net sales value . . . . . . . . . . Trading profit(1) . . . . . . . . . Return on net sales value(1) . . . . . . . . . . . . . . Profit before tax . . . . . . . . . – headline(1) – basic Earnings per share . . . . . . . – headline(1) – basic	FY 2009 £ 530m £ 340m £39.2m 11.5% £37.3m £ 7.0m 12.2p (0.4)p	FY 2010 £ 721m £ 410m £71.0m 17.3% £69.4m £64.1m 22.2p 20.5p	FY 2011 £ 814m £ 418m £99.6m 23.8% £98.2m £94.7m 29.4p 27.1p	HY 2011 (unaudited) £ 418m £ 207m £45.0m 21.8% £44.5m £44.3m 13.6p 13.2p	HY 2012 £ 362m £ 205m £50.0m 24.4% £49.4m £46.5m 14.9p 13.5p

Notes:

(1) Refer to note 4 of the historical financial information for definitions

(2) For comparison purposes with the above information, the net sales value of Alent in FY 2008 was £350 million.

Note: In section 1.4 below, all of the information is presented at a constant currency, unless indicated otherwise.

1.4.1 Comparison of the six months ended 30 June 2012 (audited) with the six months ended 30 June 2011 (unaudited)

Trading performance

Revenue of £362 million was 13 per cent. lower than the first half of 2011 (13 per cent. lower at reported exchange rates). This partially reflected the “pass through” to customers of lower tin and silver prices, both major raw materials for Assembly Materials, and lower palladium prices in the Surface Chemistries business. In the first half of 2012, the average prices of tin, silver and palladium were, respectively, 27 per cent., 14 per cent. and 16 per cent. lower than the same period in the prior year, such that approximately £27 million of Alent’s revenue decrease was as a result of these lower metal prices. Excluding the impact of these commodity metals, underlying revenue was 7 per cent. lower compared to the first half of 2011. Asia-Pacific, Alent’s largest region, accounted for 44 per cent. of revenue in the first half of 2012 (by location of customer).

The negative revenue growth reflects the continuing strategy of exiting more commoditised products (particularly bar solder and proprietary chemicals) partially offset by the continued market penetration of innovative, higher margin, products such as advanced solder pastes, copper damascene, “tape and reel” packaged solder pre-forms, and plating-on-plastics chemicals.

In the first half of 2012, Alent’s revenue included £78 million of tin, £48 million of silver and £32 million of gold and palladium. Net sales value (which excludes these amounts from revenue) in the first half of 2012 was £205 million (first half 2011: £200 million).

Mainly as a result of the improving mix in the profitability of revenue, trading profit for the first half of 2012 rose significantly to £50.0 million (first half 2011: £45.2 million), an 11 per cent. increase (11 per cent. higher at reported exchange rates).

The return on sales margin in the first half of 2012 was 13.8 per cent., well ahead of the 10.9 per cent. achieved in the first half of 2011. The pass through to customers of the lower tin and precious metals commodity prices discussed above decreased revenue by some £27 million, but had no material impact on trading profit. The return on sales margin in the first half of 2012 would have been 15.1 per cent. if metal prices had remained at average 2010 levels.

The return on net sales value in the first half of 2012 was 24.4 per cent., ahead of the first half of 2011 (22.6 per cent.). Alent believes that this measure, which eliminates the impact of the pass through of commodity metals, is an important measure of the underlying profitability of Alent.

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Assembly Materials business

Revenue of £224 million was 17 per cent. lower than the first half of 2011 (both at constant and reported exchange rates). Excluding the impact of passing through lower tin and silver prices, on an underlying basis, revenue was 9 per cent. lower than the first half of 2011. This reflects the continuation of the successful strategy to focus on higher margin, enhanced technology products, and exiting more commoditised products such as bar solder. For solder products, which account for three quarters of Assembly Materials revenue, sales of higher margin solder pastes were unchanged by weight compared to the first half of 2011, while bar solder was down 14 per cent., partially reflecting the continuing shift from wave soldering to surface mount technology for the production of PCBs. Sales of “tape and reel” packaged pre-forms, which are manufactured shapes of solder used in joining applications requiring high physical strength, grew by 9 per cent. driven, in particular, by smartphone applications. The recycling, reclaim business in the US and China, in which scrap solder generated by customers’ production processes is reclaimed back into solder alloys for sale to third parties or for reuse within the business, also performed well in the period, notwithstanding lower metal prices.

Net sales value in the first half of 2012 was £98 million (HY 2011: £90 million).

The business continues to focus on new product development and on penetrating new markets, including LED, solar and power electronics. These new products include Ready Ribbon™, a pre-fluxed, solder coated, copper ribbon used for connecting solar cells within a solar panel, and nano-silver die attach products for use in the manufacture of LED lights and power electronics. Both products are currently being trialled at a significant number of customers, and commercial sales are expected to commence shortly.

Surface Chemistries business

Revenue of £138 million for the first half of 2012 was 5 per cent. lower than the first half of 2011 (6 per cent. lower at reported exchange rates). Net sales value (which excludes the value of gold and palladium from revenue) in the first half of 2012 was £107 million (HY 2011: £110 million). Compared to the first half of 2011, sales of plating-on-plastics and corrosion and wear-resistant products for automotive and industrial applications were up 1 per cent., whilst sales of surface coating products serving the PCB fabrication market were down 4 per cent. Copper damascene sales into the semi-conductor market were up 2 per cent. compared to the first half of 2011, with sales of products to customers for their recently launched 22 nanometre node semi-conductors commencing in the period.

The construction of the new £14 million Surface Chemistries facility in Shanghai, to serve China’s growing electronic materials, automotive and industrial end-markets, is expected to be completed by the end of 2012. Currently the Chinese market is served from divisional facilities in Shenzhen, Tianjin and Singapore.

Headline profit before tax

Headline profit before tax was £49.3 million for the first half of 2012, £5.0 million higher than the £44.3 million for the same period in 2011. The change in headline profit before tax arose as follows:

Trading profit: – at half year 2012 exchange rates . . . . . . . . . . . . . . . . . . . . . – currency exchange rate impact . . . . . . . . . . . . . . . . . . . . . . Trading profit – as reported . . . . . . . . . . . . . . . . . . . . . . . . . . Net finance charges – ordinary activities . . . . . . . . . . . . . . . . Post-tax (loss)/profit from joint ventures . . . . . . . . . . . . . . . . Headline profit before tax . . . . . . . . . . . . . . . . . . . . . . . . . .	HY 2012 (audited) 50.0 — 50.0 (0.6) (0.1) 49.3	HY 2011 (unaudited) (£m) 45.2 (0.2) 45.0 (1.4) 0.7 44.3	Change
			4.8 0.2 5.0 0.8 (0.8) 5.0

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Finance costs

The £0.8 million lower charge for net finance costs (interest) principally resulted from £0.5 million lower interest on borrowings, due partially to a decrease in the average level of borrowings throughout the period.

Restructuring charges

Restructuring charges of £2.8 million were incurred in the first half of 2012 (HY 2011: £nil) and arose in connection with initiatives that included redundancy programmes, the streamlining of manufacturing processes and the rationalisation of product lines.

Alent’s profit before tax and after restructuring charges was £46.5 million for the first half of 2012 compared to a profit before tax of £44.3 million in the first half of 2011.

Taxation

The tax charge on ordinary activities in the first half of 2012 was £8.0 million (HY 2011: £6.6 million) on a headline profit before tax of £49.3 million (HY 2011: £44.3 million), an effective tax rate (before share of post-tax loss of joint ventures) of 16.2 per cent. (HY 2011: 15.1 per cent.).

Profit attributable to owners of the parent

Headline attributable profit for the first half of 2012 was £41.3 million (HY 2011: £37.7 million). After taking account of the restructuring charges excluded from headline profit before tax noted above (net of the related tax impact), Alent recorded a profit of £37.4 million for the first half of 2012 (HY 2011: £36.4 million).

A tax charge of £1.1 million (HY 2011: £1.3 million) arose in relation to the charges excluded from headline profit before tax noted above.

Earnings per share (“EPS”)

Headline EPS, based on the headline profit attributable to owners of the parent divided by the average number of outstanding shares of Cookson during the period, amounted to 14.9 pence per share in the first half of 2012 (HY 2011: 13.7 pence). Basic EPS, based on the net profit attributable to owners of the parent, was 13.5 pence (HY 2011: 13.2 pence). The average number of shares in issue during the first half of 2012 was 276.7 million, 0.7 million higher than for the first half of 2011 reflecting shares issued in respect of the award of shares to employees under the LTIP.

Currency

In the first half of 2012, the net translation impact of using 2012 exchange rates to translate 2011 results was not material i.e. a reduction in 2011 revenue of £2 million and an increase of 2011 trading profit by £0.2 million. Between these periods, the average exchange rates for sterling strengthened against the euro by 5 per cent., the Polish zloty by 13 per cent. the Brazilian real by 11 per cent. and the Czech koruna by 9 per cent., but weakened against both the US dollar by 2 per cent. and the Chinese renminbi by 6 per cent.

Pensions

At 30 June 2012, the net deficit in Alent’s post-retirement defined benefit plans was £26.7 million (HY 2011: £22.8 million). The increase in the deficit arose mainly in relation to the US plans, from the negative impact of lower discount rates used to value plan liabilities.

Financial position

As stated in the Basis of Preparation note 2.2, for the purposes of this historical financial information, all of the borrowings entered into by Cookson have been reported in the historical financial information for Vesuvius. As a consequence, Alent had net financial assets as at 30 June 2012 of £70.4 million, compared with £44.0 million at 30 June 2011.

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1.4.2 Comparison of the year ended 31 December 2011 with the year ended 31 December 2010

Trading performance

Revenue of £814 million for Alent was 13 per cent. higher than 2010 at both constant and reported exchange rates. The higher revenue largely reflected the “pass through” to customers of higher tin and silver prices, both major raw materials for Assembly Materials, and higher gold and palladium prices in the Surface Chemistries business. In 2011, the average prices of tin, silver and gold were, respectively, 35 per cent., 83 per cent. and 29 per cent. higher than 2010, such that approximately £111 million of Alent’s revenue increase was as a result of these higher metal prices. Excluding the impact of these commodity metals and adjusting for a small disposal in December 2010, underlying revenue was 1 per cent. higher than 2010. These trends reflect Alent’s strong market positions in the faster growth market segments within consumer electronics (such as tablets and smartphones), the continuing strategy of exiting more commoditised products (particularly bar solder, where volumes fell by 14 per cent.), and the increased market penetration of innovative, higher margin products such as advanced solder pastes and “tape and reel” packaged solder pre-forms. Asia-Pacific, Alent’s largest region, accounted for just under half of revenue in 2011 (by location of customer).

In 2011, Alent’s revenue included £206 million of tin, £122 million of silver, and £68 million of gold and palladium. Net sales value (which excludes the value of these commodity metals included in revenue) in 2011 was £418 million, 2 per cent. higher than 2010 (as reported).

Mainly as a result of the improving mix in the profitability of revenue, trading profit for 2011 rose significantly to £99.6 million (2010: £71.0 million), a 40 per cent. increase at both constant and reported exchange rates. The return on sales margin in 2011 was 12.2 per cent., well ahead of the 9.8 per cent. reported in 2010. The Board believes that this measure, which eliminates the impact of the pass through of commodity metals, is an important measure of the underlying profitability of the business. The pass through to customers of the higher tin and precious metals commodity prices discussed above increased revenue by some £111 million, but had no material impact on trading profit.

Assembly Materials business

Revenue of £527 million was 17 per cent. higher than 2010 (18 per cent. at reported exchange rates). Excluding the impact of passing through higher tin and silver prices and adjusting for a small disposal in December 2010, on an underlying basis revenue was 1 per cent. higher than 2010. This reflects the growth in the global production of electronic equipment, the continuation of the successful strategy to focus on higher margin, enhanced technology products and exiting more commoditised products such as bar solder. For solder products, which account for three quarters of the business’ revenue, sales of higher margin advanced solder pastes were up 8 per cent. by weight compared to 2010, while bar solder was down 14 per cent., partially reflecting the continuing shift from wave soldering to surface mount technology for the production of PCBs. Sales of “tape and reel” packaged pre-forms, which are manufactured shapes of solder used in jointing applications requiring high physical strength, almost doubled in the year driven, in particular, by smartphone applications. The recycling, reclaim business in the US and China, in which scrap solder generated by customers’ production processes is reclaimed for processing back into solder alloys for sale to third parties or for reuse within the business, also benefitted from strong growth during the year.

Net sales value in 2011 was £199 million, 1 per cent. higher than 2010.

The business continued to focus on new product development and on penetrating new markets, including LED, solar and power electronics. These new products include Ready Ribbon™, a pre-fluxed, solder coated, copper ribbon used for connecting solar cells within a solar panel, and nano-silver die attach products for use in the manufacture of LED lights and power electronics. Related new production lines for Ready Ribbon™were completed towards the end of 2011 in the Netherlands and Singapore, and a further line in the US is nearing completion. The first nano-silver production line in Singapore has also now been

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successfully commissioned. Both products attracted high levels of customer interest ahead of their recent commercial launch and, once product trials are completed by our customers, commercial sales are expected to commence shortly.

A new solder bar, wire, paste and chemicals factory has been built in Manaus, Brazil, which went into production in December 2011.

Surface Chemistries business

Revenue of £287 million for 2011 was 5 per cent. higher than 2010 at both constant and reported exchange rates. Net sales value (which excludes the value of gold and palladium from revenue) in 2011 was £219 million, 2 per cent. higher than 2010. Compared to 2010, sales of plating-on-plastics and corrosion and wear-resistant products for automotive and industrial applications were up 3 per cent. Sales of surface coating products serving the PCB fabrication market were up 1 per cent., with growth of the Immersion Tin PCB surface finish product up over 50 per cent., driven by automotive electronics market share gains. Sales of proprietary Copper Damascene additives into the semi-conductor market were up 18 per cent. compared to 2010. The first qualification for Copper Damascene additives for use in the recently launched 22 nanometre semiconductor wafer node was achieved in the year.

The construction of the new £14 million Chemistry facility in Shanghai, to serve China’s growing electronic materials, automotive and industrial end-markets, is expected to be completed by the end of 2012. Currently, the Chinese market is served from Alent facilities in Shenzhen, Tianjin and Singapore.

Headline profit before tax

Headline profit before tax was £98.2 million for 2011, £28.8 million higher than the £69.4 million for the same period in 2010. The change in headline profit before tax arose as follows:

Trading profit: – at 2011 exchange rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – currency exchange rate impact . . . . . . . . . . . . . . . . . . . . . . . . . Trading profit – as reported . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net finance charges – ordinary activities . . . . . . . . . . . . . . . . . . . Post-tax loss from joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . Headline profit before tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	FY 2011 99.6 — 99.6 (2.6) 1.2 98.2	FY 2010 (£m) 71.1 (0.1) 71.0 (2.9) 1.3 69.4	Change
			28.5 0.1 28.6 0.3 (0.1) 28.8

Finance costs

The £0.3 million lower finance costs (interest) principally comprised £0.3 million lower pension interest cost.

Exceptional items excluded from headline profit before tax

A net charge of £3.5 million was incurred in 2011 (2010: £5.3 million) for the following items excluded from headline profit before tax:

Restructuring charges : the £1.9 million incurred in 2011 (2010: £5.5 million) arose principally from headcount reductions.

Gains relating to employee benefits plans : the £2.0 million credit in 2011 (2010: £0.6 million) relates to the closure of two defined benefit plans in the Netherlands.

Loss on disposal of continuing operations: a net loss of £3.6 million (2010: £1.2 million) arose in 2011 related to trailing costs arising in respect of prior year disposals.

Alent’s profit before tax and after the items noted above was £94.7 million for 2011 compared to a profit before tax of £64.1 million in 2010.

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Taxation

The tax charge on ordinary activities in 2011 was £16.8 million (2010: £8.0 million) on headline profit before tax of £98.2 million (2010: £69.4 million), an effective tax rate (before share of post-tax profit from joint ventures) of 17.3 per cent. The effective tax rate in 2010 was 11.7 per cent., reflecting the benefit of a number of non-recurring credits.

A tax charge of £3.2 million (2010: £0.6 million credit) arose in relation to all the items excluded from headline profit before tax noted above.

Profit attributable to owners of the parent

Headline attributable profit for 2011 was £81.4 million (2010: £61.4 million), an increase of 33 per cent.

After taking account of all items excluded from headline profit before tax noted above (net of the related tax impact), Alent recorded a profit of £74.7 million for 2011 (2010: £56.7 million).

Earnings per share (EPS)

Headline EPS, based on the headline profit attributable to owners of the parent divided by the average number of outstanding shares of Cookson during the year, amounted to 29.5 pence per share in 2011, 33 per cent. higher than the 22.2 pence in 2010. The Board believes this basis of calculating EPS is an important measure of the underlying earnings per share of Alent. Basic EPS, based on the net profit attributable to owners of the parent, was 27.1 pence (2010: 20.5 pence).

The average number of shares in issue during 2011 was 275.7 million, 0.5 million lower than for 2010.

Currency

In 2011, the net translation impact of using 2011 exchange rates to translate 2010 results was not material i.e. an increase in 2010 revenue of £0.1 million and an increase in 2010 trading profit of £0.1 million. Between these years, the average exchange rates for sterling strengthened against the US dollar by 4 per cent. and the Polish zloty by 2 per cent., but weakened against both the euro and the Chinese renminbi by 1 per cent., the Brazilian real by 2 per cent. and the Czech koruna by 4 per cent.

Pensions

At 31 December 2011, the net deficit in Alent’s post-retirement defined benefit plans was £26.4 million (31 December 2010: £26.9 million).

Financial position

As stated in the Basis of Preparation note 2.2, for the purposes of this historical financial information, all of the borrowings of Cookson have been reported in the historical financial information for Vesuvius. As a consequence, Alent had net financial assets as at 31 December 2011 of £54.9 million, compared with £64.0 million at 31 December 2010.

1.4.3 Comparison of the year ended 31 December 2010 with the year ended 31 December 2009

Trading performance

Revenue of £721 million was 33 per cent. higher than 2009 at constant exchange rates (36 per cent. higher at reported exchange rates). The higher revenue partially reflected the “pass through” to customers of higher tin and silver prices, the Assembly Materials business’ major raw materials. In 2010, the average prices of tin and silver were, respectively, 53 per cent. and 36 per cent. higher than 2009, such that approximately £65 million of the

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business’ revenue increase was as a result of these higher metal prices. Excluding both the impact of higher metal prices in Assembly Materials and precious metal sales and back-to-back electroplating equipment sales in Surface Chemistries, underlying revenue was 18 per cent. higher than 2009. Electronics end-markets (which make up three quarters of Alent’s revenue) progressively improved during the year with particularly strong growth in demand for personal computers (“PCs”), mobile phones and automotive electronics. According to estimates from Henderson Ventures, global production of electronic equipment (measured in US dollars at constant currency) grew in 2010 by 17 per cent., following the 11 per cent. decrease in 2009. Global PC unit shipments (both traditional and tablet PCs) were estimated to be 21 per cent. higher, whilst global unit shipments of mobile phones increased 29 per cent. Other strong areas of growth within consumer electronics included flat screen TVs, games consoles and e-readers. Automotive markets similarly showed good improvement, although industrial end-markets generally remained subdued.

Underlying revenue was 23 per cent. higher in the first half of 2010 compared with the first half of 2009 but then increased 5 per cent. in the second half compared to the first half of 2010, reflecting both the improvement in trading conditions and also the normal seasonality of the business.

Trading profit for 2010 rose significantly to £71.0 million (2009: £39.2 million), being £30.7 million higher at constant currency and £31.8 million higher at reported exchange rates. The trading profit in the second half of 2010 of £39.7 million was £8.4 million higher than the £31.3 million achieved in the first half of 2010, principally reflecting the normal seasonality of the business and the improved end-market conditions. The return on sales margin in 2010 was 9.8 per cent., well ahead of the 7.4 per cent. achieved in 2009. This 2.4 percentage point increase in margin was achieved notwithstanding higher commodity metal prices and precious metal sales in 2010 which significantly increased revenue but had relatively little impact on trading profit. On an underlying basis, the margin increase was even stronger at 3.7 percentage points.

Asia-Pacific, the business’ largest region, accounted for 45 per cent. of revenue in 2010 (by location of customer), two percentage points ahead of 2009.

Assembly Materials business

Revenue for the year at £447 million was 40 per cent. higher than 2009 at constant exchange rates (45 per cent. higher at reported exchange rates). Excluding the impact of passing through higher tin and silver prices, underlying revenue was 17 per cent. higher than 2009 (at constant exchange rates), reflecting both the strong growth in the global production of electronic equipment, combined with the continuation of the strategy to focus on higher margin, enhanced technology products. For solder products, which account for three-quarters of Assembly Materials’ revenue, sales of higher margin, more value-added products such as solder paste (for which volumes were up 30 per cent.) were stronger than the more commoditised products such as bar solder (up 10 per cent.), partially reflecting the continuing shift from wave soldering to surface mount technology for the production of PCBs.

Underlying revenue was 21 per cent. higher in the first half of 2010 compared with the first half of 2009 and increased by 5 per cent. in the second half compared to the first half of 2010, reflecting both the continued improvement in trading conditions and also the normal seasonality of the business. Trading profit for 2010 was just over 70 per cent. higher than for 2009 (at constant exchange rates).

Surface Chemistries business

Revenue for the year at £274 million was 22 per cent. higher than 2009 at constant exchange rates (23 per cent. higher at reported exchange rates). Excluding precious metal sales and back-to-back electroplating equipment sales, underlying revenue was 21 per cent. higher than in 2009 (at constant exchange rates). Sales of plating-on-plastics and corrosion and wear-resistant products for automotive and industrial applications were up 18 per cent. compared to 2009, whilst sales of surface coating products serving the PCB fabrication market were up 15 per cent. Copper damascene sales into the semi-conductor market were up by one third compared to 2009.

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Underlying revenue was 26 per cent. higher in the first half of 2010 compared with the first half of 2009, but increased by 5 per cent. in the second half compared to the first half of 2010 reflecting both the improvement in electronic materials end-markets and also normal seasonality. Trading profit for 2010 was 86 per cent. higher than for 2009 (at constant exchange rates).

With the continued growth of China’s electronic materials, automotive and industrial end-markets, the construction of the new £14 million Surface Chemistries facility in Shanghai was started in the first quarter of 2010. Currently, the China market is served from Alent facilities in Shenzhen, Tianjin and Singapore.

Headline profit before tax

Headline profit before tax was £69.4 million for 2010, £32.1 million higher than for the same period in 2009. The change in headline profit before tax arose as follows:

Trading profit: – at 2010 exchange rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – currency exchange rate impact . . . . . . . . . . . . . . . . . . . . . . . . . Trading profit – as reported . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net finance charges – ordinary activities . . . . . . . . . . . . . . . . . . . Post-tax loss from joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . Headline profit before tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	FY 2010 71.0 — 71.0 (2.9) 1.3 69.4	FY 2009 (£m) 40.3 (1.1) 39.2 (2.6) 0.7 37.3	Change
			30.7 1.1 31.8 (0.3) 0.6 32.1

Finance costs

The £0.3 million higher charge for net finance costs (interest) principally comprised £0.4 million of higher interest on borrowings, due mainly to a decrease in the average level of net cash throughout the year, partially offset by reduction in pension interest costs of £0.5 million.

Exceptional items excluded from headline profit before tax

A net charge of £5.3 million was incurred in 2010 (FY 2009: £30.3 million) for the following items excluded from headline profit before tax:

Restructuring and integration charges : the charge of £5.5 million (FY 2009: £27.8 million) arose in connection with initiatives that included redundancy programmes, the downsizing or closure of facilities, the creation of a provision for onerous property leases, the streamlining of manufacturing processes and the rationalisation of product lines.

Profit/(loss) relating to non-current assets : the net profit of £0.8 million (FY 2009: loss of £2.6 million) arose mainly on the disposal of surplus property and investments.

Gains relating to employee benefits plans : the non-cash credit of £0.6 million (2009: £nil), related to the closure of two small defined benefit plans in the US.

Net (loss)/profit on disposal of continuing operations : a net loss of £1.2 million (2009: profit of £0.1 million) was incurred in 2010 relating to the disposal of Alent’s semiconductor packaging operations, a small non-core business based in Singapore manufacturing epoxy mould compounds for encapsulating semi-conductors, and trailing costs related to prior years’ disposals.

Alent’s profit before tax and after the items noted above was £64.1 million for 2010 compared to £7.0 million in 2009.

Taxation

The tax charge on ordinary activities in 2010 was £8.0 million (2009: £6.5 million) on headline profit before tax of £69.4 million (2009: £37.3 million), an effective tax rate

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(before share of post-tax profit from joint ventures) of 11.7 per cent. (FY 2009: 17.8 per cent.). For the full year 2009, the effective tax rate was negatively impacted by Alent’s low level and geographical mix of profit before tax, which meant that Alent reported profit before tax in a number of tax-paying jurisdictions (such as China and India), whilst incurring losses before tax in jurisdictions (notably the US) where it was not appropriate to record a tax credit. The significantly higher level of profit before tax in 2010 has meant that this situation has not been repeated. In addition, Alent benefited in 2010 from non-recurring credits arising both from the recognition of tax losses in a number of countries where a deferred tax asset for those items had not previously been recorded, and from a number of adjustments arising from the finalisation of prior year tax liabilities.

A tax credit of £0.6 million (FY 2009: £1.6 million charge) arose in relation to all the items excluded from headline profit before tax noted above.

Profit/(loss) attributable to owners of the parent

Headline profit attributable to owners of the parent for 2010 was £61.4 million (FY 2009: £30.8 million), with the £30.6 million increase over 2009 principally arising from the significant increase in headline profit before tax.

After taking account of all items excluded from headline profit before tax noted above (net of the related tax impact), Alent recorded a profit of £56.7 million for 2010, £57.8 million higher than the £1.1 million loss recorded in 2009.

Earnings per share (EPS)

Headline earnings per share, based on the headline profit attributable to owners of the parent divided by the average number of outstanding shares of Cookson during the year, amounted to 22.2 pence per share in 2010, compared to headline earnings per share of 12.2 pence per share in 2009. The Board believes this basis of calculating EPS is an important measure of the underlying earnings per share of Alent. Basic EPS, based on the net profit from continuing operations attributable to owners of the parent, was 20.5 pence (FY 2009: loss of 0.4 pence).

The average number of Cookson shares in issue during 2010 was 276.2 million, 23.4 million higher than for 2009, principally reflecting the full year effect of the issue of 255.1 million new shares as a result of the rights issue in March 2009. In accordance with IAS 33, the average number of shares in issue used in the calculation of EPS for all periods prior to the rights issue has been multiplied by an adjustment factor to reflect the bonus element in the new shares issued. The adjustment factor used was 6.6391. The average number of shares also reflects the share consolidation in May 2009, whereby shareholders exchanged 10 existing shares for one new share.

Currency

In 2010, the net translation impact of currency changes compared to 2009 was to increase 2009 revenue by £12 million and 2009 trading profit by £1.1 million. During 2010, sterling weakened against the majority of currencies (by 3 per cent. against the US dollar and 7 per cent. against the Chinese renminbi). The principal exception was the euro, against which sterling strengthened by 4 per cent. During 2010, the average exchange rates for sterling weakened against the US dollar by 1 per cent. and the Chinese renminbi by 2 per cent., but strengthened against the euro by 4 per cent.

Pensions

At 31 December 2010, the net deficit in Alent’s post-retirement defined benefit plans was £26.9 million (31 December 2009: £27.2 million).

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Financial position

As stated in the Basis of Preparation note 2.1, for the purposes of this historical financial information, all of the borrowings of Cookson have been reported in the historical financial information for Vesuvius. As a consequence, Alent had net financial assets as at 31 December 2010 of £64.0 million, compared with £60.4 million at 31 December 2009.

2 Capitalisation and indebtedness

The following table sets out the unaudited consolidated capitalisation and indebtedness of Alent. The financial information in this table as at 31 August 2012 has been extracted without material adjustment from the unaudited accounting records of Alent.

As at 30 October 2012, Alent plc had ordinary share capital of £1.00 and £50,000 of redeemable shares and no further indebtedness.

Current debt Current debt (secured) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Current debt (unguaranteed and unsecured) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total current debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Non-current debt Non-current debt (secured) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Non-current debt (unguaranteed and unsecured) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total non-current debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

As at 31 August 2012 (unaudited) (£m) (0.2) (1.5) (1.7) (0.3) — (0.3) (2.0)

Liquidity Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Current debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net current cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Non-current debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

As at 31 August 2012 (unaudited) (£m) 68.9 (1.7) 67.2 (0.3) 66.9

3 Liquidity and capital resources

Alent’s net cash of £70.4 million as at 30 June 2012 comprised the following:

Bank borrowings: – Cash pools . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – Finance leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Gross borrowings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cash and short-term deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

30 June 2012

(£m) (0.1) (1.2) (0.5) (1.8) 72.2 70.4

On Demerger, the net debt of Cookson Group immediately prior to the date of the Demerger will be apportioned to Vesuvius and Alent broadly in proportion to the contribution each has made to Cookson Group’s total EBITDA for the 12 months prior to the date of the Demerger. The approximate split of Cookson Group’s net debt at demerger is expected to be 66 per cent. for Vesuvius and 34 per cent. for Alent.

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As at 30 June 2012, Cookson had a £600 million revolving credit facility with a syndicate of 16 banks which matures in April 2016. Cookson also had $250 million (£159 million) of US Private Placement loan notes, issued in two series: $110 million (£70 million) at a fixed interest rate of 4.26 per cent. – maturing in December 2017, and $140 million (£89 million) at a fixed interest rate of 4.97 per cent. – maturing in December 2020. The weighted average interest rate on the notes is 4.66 per cent. and the weighted average remaining duration as at 30 June 2012 was 7.1 years.

Cookson has signed amendments to both its US Private Placement Note Purchase Agreement and its syndicated bank facility to allow a potential demerger of the Performance Materials division from the Cookson Group. On Demerger, the US Private Placement loan notes will continue to be obligations of Cookson, which will change its name to Cookson Group Limited and be a wholly-owned subsidiary company of Vesuvius plc. The syndicated bank facility will also remain with Cookson, with the commitment reducing from the current £600 million to £425 million on the date of the Demerger.

Alent has agreed a new five-year £300 million revolving credit facility with a syndicate of 9 banks which can only be drawn upon by Alent shortly before completion of the Demerger. This facility matures in September 2017.

Alent’s principal source of liquidity is cash flow from operations supported by committed bank financing. As at 30 June 2012, Alent had net cash and cash equivalents of £70.9 million. The Alent financing arrangements are described in more detail in the section entitled “Material Contracts” in paragraph 13 of Part XIII: “Additional Information”.

The Alent treasury operations are managed by a centralised Treasury department, within the Finance directorate. Treasury activity includes funding, cash management, treasury risk management (‘market risk’), investment of surplus cash and management of banking relationships. For information on Alent’s policies as related to management of market risk, see paragraph 4 entitled “Qualitative and quantitative disclosure about financial risk management” below.

3.1 Cash flow analysis

Summary consolidated cash flow statement

EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Trade and other working capital . . . . . . . . . . . . . . Restructuring charges paid . . . . . . . . . . . . . . . . . . Additional pension plan funding contributions . . Net interest paid . . . . . . . . . . . . . . . . . . . . . . . . . . Taxation paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . Assets held for sale . . . . . . . . . . . . . . . . . . . . . . . . Net cash inflow/(outflow) from operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net cash outflow from investing activities . . . . Net cash inflow/(outflow) before financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net cash (outflow)/inflow from financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net (decrease)/increase in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cash and cash equivalents at the start of the period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exchange (losses)/gains on cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cash and cash equivalents at the end of the period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	FY 2009 48.5 42.2 (11.2) — (0.5) (9.4) (0.8) 68.8 (7.7) 61.1 (103.3) (42.2) 110.6 (7.6) 60.8	FY 2010 79.7 (24.3) (9.0) (3.1) (1.2) (14.1) (1.6) 26.4 (1.6) 24.8 (24.0) 0.8 60.8 3.0 64.6	FY 2011 (£m) 108.1 (26.7) (3.8) (1.7) (1.0) (15.1) — 59.8 (19.0) 40.8 (50.3) (9.5 ) 64.6 0.2 55.3	HY 2011 (unaudited) 49.2 (50.5) (3.4) (0.9) (0.6) (7.0) — (13.2) (7.1) (20.3) 0.7 (19.6) 64.6 — 45.0	HY 2012	HY 2012
						54.3 (32.6) (18.0) — (0.2) (7.6) — (4.1) (14.1) (18.2) 34.7 16.5 55.3 (0.9) 70.9

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3.1.1 Comparison of the six months ended 30 June 2012 with the six months ended 30 June 2011

Net cash flows from operating activities

In the first half of 2012, there was a £4.1 million net cash outflow from operating activities compared to a £13.2 million net cash outflow in the first half of 2011. This change arose from:

The cash outflow from trade and other working capital was £32.6 million, compared with an outflow of £50.5 million in the first half of 2011. It is normal for an outflow to be reported in the first half of the year, reflecting Alent’s normal seasonality, with a build-up of working capital in the first half of the year and some reduction expected during the second half.

Cash outflow for restructuring was £18.0 million. This principally comprised a payment of £15.8 million made in May 2012 to buy out the property lease relating to Alent’s operations in Woking, UK.

No additional pension contributions were made into the US pension plans in the first half of 2012.

Net cash flows from investing activities

Capital expenditure : payments to acquire property, plant and equipment in the first half of 2012 were £13.8 million, £8.6 million higher than the first half of 2011 and representing 321 per cent. of depreciation (HY 2011: 123 per cent.).

Acquisition of subsidiaries : a cash outflow of £0.6 million (HY 2011: £0.4 million).

Free cash flow

Free cash outflow for the first half of 2012 was £16.3 million, the same as the outflow in the first half of 2011, principally reflecting the lower cash outflow from operating activities, offset by higher levels of capital expenditure.

Alent traditionally experiences stronger free cash flows in the second half of the year compared with the first half, due to the seasonality of trade working capital cash flows. The free cash inflow for the year ended June 2012 was £46.6 million (FY 2011: £46.6 million).

Net cash flow before financing

Net cash outflow before financing for the first half of 2012 was £18.2 million, £2.1 million lower than the first half of 2011, principally due to the lower cash outflow from operating activities described above.

Cash flow from financing activities

Net cash inflow from financing activities was £34.7 million (HY 2011: £0.7 million), principally comprising the capital contribution to Alent from Vesuvius businesses during the period of £34.6 million (HY 2011: £0.3 million).

Net (decrease)/increase in cash and cash equivalents

The net increase in cash and cash equivalents arising in the first half of 2012 from the cash flows described above was £16.5 million, compared with a £19.6 million decrease in the first half of 2011. After a £0.9 million negative foreign exchange adjustment (2011: £nil), this resulted in cash and cash equivalents at the end of the period of £70.9 million (HY 2011: £45.0 million), an increase of £25.9 million.

• 3.1.2 Comparison of the year ended 31 December 2011 with the year ended 31 December 2010

Net cash inflow from operating activities

In 2011, Alent generated £59.8 million of net cash inflow from operating activities, £33.4 million higher than in 2010.

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The cash outflow of £26.7 million from trade and other working capital reflected the increase in underlying revenue in 2011 and the high level of commodity metal prices at year-end.

Cash outflow for restructuring was £3.8m, of which the majority related to trailing costs from the cost-saving initiatives commenced in prior years.

Additional pension plan funding contributions into the US defined benefit pension plans were £1.7 million, in line with the previously announced intention to make additional “top-up” payments into the plans with effect from the beginning of 2011.

Net cash flows from investing activities

Capital expenditure : payments to acquire property, plant and equipment in 2011 were £16.1 million, £5.1 million higher than 2010 and representing 189 per cent. of depreciation (FY 2010: 126 per cent.).

Disposal of subsidiaries and joint ventures : net cash outflow in 2011 was £1.9 million (FY 2010: £6.2 million inflow), primarily related to trailing costs associated with prior year disposals.

Free cash flow

Free cash inflow for 2011 was £46.6 million, £27.3 million higher than 2010, due mainly to the £33.4 million increase in net cash flow from operating activities, for the reasons described above, more than offsetting the £5.1 million increase in capital expenditure.

Alent normally experiences stronger free cash flows in the second half of the year compared with the first half, due to the seasonality of trade working capital cash flows. In 2011, free cash inflow in the second half of the year was £62.9 million compared to a free cash outflow of £16.3 million in the first half.

Net cash flow before financing

Net cash inflow before financing for 2011 was £40.8 million, £16.0 million higher than 2010 due principally to the increase in free cash flow described above.

Cash flow from financing activities

Net cash outflow from financing activities was £50.3 million (2010: £24.0 million), principally comprising the capital contribution from Alent to Vesuvius businesses during the year of £50.1 million (2010: £24.2 million).

Net (decrease)/increase in cash and cash equivalents

The net decrease in cash and cash equivalents arising from the cash flows described above was £9.5 million in 2011, compared with £0.8 million increase in 2010. After a £0.2 million positive foreign exchange adjustment (2010: £3.0 million), this resulted in cash and cash equivalents at the end of the year of £55.3 million (2010: £64.6 million), a decrease of £9.3 million over 2010.

3.1.3 Comparison of the year ended 31 December 2010 with the year ended 31 December 2009

Net cash inflow from operating activities

In 2010, Alent generated £26.4 million of net cash inflow from operating activities, £42.4 million lower than in 2009.

The cash outflow of £24.3 million from trade and other working capital reflected the increase in underlying revenue in 2010.

Cash outflow for restructuring and integration was £9.0 million, of which the majority related to trailing costs from the cost-saving initiatives initiated in the fourth quarter of 2008 and the first half of 2009.

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Additional pension plan funding contributions into the US defined benefit pension plans of £3.1 million were paid during the year.

Net cash flows from investing activities

Capital expenditure : payments to acquire property, plant and equipment in 2010 were £11.0 million, £6.2 million higher than 2009 and representing 126 per cent. of depreciation (FY 2009: 52 per cent.).

Proceeds from the sale of investments : net cash inflow from the sale of surplus trade investments was £4.5 million (FY 2009: £0.1 million).

Disposal of subsidiaries and joint ventures : net cash inflow in 2010 was £6.2 million (FY 2009: £nil), principally relating to the disposal of Alent’s epoxy mould compound business, based in Singapore.

Free cash flow

Free cash inflow for 2010 was £19.3 million, £45.4 million lower than 2009, due to the £42.4 million decrease in net cash flow from operating activities for the reasons described above, combined with the £6.2 million increase in purchases of property, plant and equipment.

Alent traditionally experiences stronger free cash inflows in the second half of the year compared with the first half, due to the seasonality of trade working capital cash flows. In 2009, the marked reduction in revenue coupled with continued focus on cash generation resulted in strong free cash flow in both the first and second halves of 2009. In 2010, a more normal trade working capital seasonality was experienced, resulting in much stronger free cash flow in the second half of the year compared to the first half.

Net cash flow before financing

Net cash inflow before financing for 2010 was £24.8 million, £36.3 million lower than 2009 due principally to the decrease in cash flow from operating activities described above.

Cash flow from financing activities

Net cash outflow from financing activities was £24.0 million (FY 2009: £103.3 million), being mainly in respect of capital contributions during the year to Vesuvius businesses of £24.2 million (FY 2009: £100.5 million).

Net (decrease)/increase in cash and cash equivalents

The net increase in cash and cash equivalents arising from the cash flows described above was £0.8 million in 2010, compared with £42.2 million decrease in 2009. After a £3.0 million positive foreign exchange adjustment (2009: £7.6 million negative adjustment), this resulted in cash and cash equivalents at the end of the year of £64.6 million (2009: £60.8 million), an increase of £3.8 million.

3.2 Capital expenditure

Capital expenditure in the first half of 2012 of £13.8 million (FY 2011: £16.1 million; HY 2011; £5.2 million; FY 2010: £11.0 million; FY 2009: £4.8 million) was 321 per cent. of depreciation (FY 2011: 189 per cent.; HY 2011: 124 per cent.; FY 2010: 126 per cent.; FY 2009: 52 per cent.).

Capital expenditure reflects the cash outflow related to (i) the ongoing maintenance and improvement of Alent’s property, plant and equipment, including that required in order to maintain Alent’s compliance with local environmental and health and safety regulations and (ii) expenditure to increase its productive capacity in those product lines and geographical regions where business levels have, or are expected to expand beyond, the current capacity level.

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The major capital expenditure project undertaken by Alent during the Reporting Period has been the relocation of its Surface Chemistries business’ manufacturing facilities in China from Shenzhen and Tianjin to a new, purpose-built facility in Shanghai, China. Having acquired the site in 2009, building commenced in 2010 and has been ongoing through 2011 and into 2012. Completion is currently anticipated at the end of 2012.

In addition to the project to build the new facility in Shanghai, expenditure in 2011 included the provision of new manufacturing lines in Singapore for the manufacture of the Ready Ribbon[™] , a pre-fluxed, solder coated, copper ribbon used for connecting solar cells within a solar panel; and nano-silver die attach products for use in the manufacture of LED lights and power electronics.

3.3 Indebtedness

Interest-bearing assets: Cash and short-term deposits . . . . . . . . . . . Interest-bearing debt: Bank loans due within one year . . . . . . . . . Bank loans due after more than one year . . Net cash	FY 2009 61.5 (1.1) — 60.4	FY 2010 65.7 (1.3) (0.4) 64.0	FY 2011 (£m) 58.2 (3.0) (0.3) 54.9	HY 2011 (unaudited) 46.1 (1.8) (0.3) 44.0	HY 2012
					72.2 (1.6) (0.2) 70.4

3.4 Commitments and contingent liabilities

Alent has extensive international operations and is subject to various legal and regulatory regimes, including those covering taxation and environmental matters. Legal claims have been brought against certain Alent companies by third parties alleging that persons have been harmed by exposure to hazardous materials used by those companies in the manufacture of industrial and consumer products, and further claims may be brought in the future. Several of Alent’s subsidiaries are parties to legal proceedings, certain of which are insured claims arising in the ordinary course of the operations of the company involved, and the Directors are aware of a number of issues which are, or may be, the subject of dispute with tax authorities. Reserves are made for the expected amounts payable in respect of known or probable costs resulting both from legal or other regulatory requirements, or from third-party claims. As the settlement of many of the obligations for which reserve is made is subject to legal or other regulatory process, the timing and amount of the associated outflows is subject to some uncertainty.

4 Qualitative and quantitative disclosure about financial risk management

4.1 Financial risk factors

Alent’s Treasury department, acting in accordance with policies approved by the Board, is principally responsible for managing the financial risks faced by Alent. Alent’s activities expose it to a variety of financial risks, the most significant of which are market risk and liquidity risk.

4.2 Market risk

Market risk is the risk that either the fair values or the cash flows of Alent’s financial instruments may fluctuate because of changes in market prices. Alent is principally exposed to market risk through fluctuations in exchange rates (“currency risk”) and interest rates (“interest rate risk”).

4.2.1 Currency risk

Alent is exposed to currency risk on its borrowings and financial assets (being cash and short-term deposits) that are denominated in currencies other than pounds sterling.

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Based upon the currency profile of Alent’s borrowings and financial assets as at 30 June 2012, while not impacting reported profit, the change in net financial assets arising from a 10 per cent. strengthening of sterling would reduce reported equity by £6.3 million in the first half of 2012 (HY 2011: £4.0 million; FY 2011: £5.1 million, FY 2010: £5.3 million, FY 2009: £5.5 million) and a corresponding 10 per cent. weakening of sterling would increase equity by £7.7 million (HY 2011: £4.9 million; FY 2011: £6.3 million, FY 2010: £6.5 million, FY 2009: £6.7 million).

4.2.2 Interest rate risk

Alent’s interest rate risk principally arises in relation to its financial assets, which comprise cash and cash deposits.

As stated in the Basis of Preparation note 2.1, for the purposes of this historical financial information, all of the borrowings of Cookson Group plc have been reported in the historical financial information for Vesuvius. Therefore, the interest rate risk relating to financial liabilities which Alent would normally be accustomed to manage is not apparent in this historical financial information.

4.3 Liquidity risk

Liquidity risk is the risk that Alent might have difficulties in meeting its financial obligations. Alent manages this risk by ensuring that it maintains sufficient levels of committed borrowing facilities and cash and cash equivalents to ensure that it can meet its operational cash flow requirements and any maturing financial liabilities, while at all times operating within its financial covenants.

As stated in the Basis of Preparation note 2.2 to the consolidated financial statements set out in Part IX of this document, for the purposes of this historical financial information, all of the borrowings of Cookson (including the US Private Placement loan notes and the Cookson syndicated bank facility) have been reported in the historical financial information for Vesuvius. Therefore, the liquidity risk relating to financial liabilities which Alent would normally be accustomed to manage is not apparent in this historical financial information.

Alent has agreed a new five-year £300 million revolving credit facility with a syndicate of 9 banks which can only be drawn upon by Alent shortly before completion of the Demerger. This facility matures in September 2017.

5 Off-balance sheet arrangements

In compliance with current reporting requirements, certain arrangements entered into by Alent in its normal course of business are not reported in Alent’s balance sheet. Of such arrangements, those considered material by the Directors include: inventory held either under precious metal consignment arrangements or on behalf of customers for processing (note 20 to Alent’s consolidated financial statements in section A of Part IX of this document); future lease payments in relation to assets used by Alent under non-cancellable operating leases (note 28); and trade receivable balances that have been subject to non-recourse factoring arrangements.

Under its non-recourse factoring arrangements, Alent sells trade receivables balances to a third-party factoring company in exchange for a cash payment from the factoring company, net of fees. All the risks and rewards of the trade receivables subject to these arrangements are transferred to the factoring company and, accordingly, the trade receivables are derecognised in Alent’s balance sheet. Such arrangements are used from time to time by Alent to manage the recovery of cash from its trade receivables. As at 30 June 2012, Alent’s balance sheet included £7.1 million (HY 2011: £17.2 million; FY 2011: £13.2 million; FY 2010: £13.9 million; FY 2009: £12.1 million) of cash that would otherwise have been reported as trade receivables if these arrangements were not in place. Factoring fees incurred during the six months ended 2012, which are written off to the consolidated income statement within ordinary finance costs, amounted to £0.2 million (HY 2011: £0.2 million; FY 2011: £0.4 million; FY 2010: £0.3 million; FY 2009: £0.3 million).

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6 Critical judgements in applying accounting policies and key sources of estimation uncertainty

Determining the carrying amount of some assets and liabilities requires estimation of the effect of uncertain future events. The major sources of estimation uncertainty that have a significant risk of resulting in a material adjustment to the carrying amounts of assets or liabilities are noted below.

6.1 Goodwill

The Directors use their judgement to determine the extent to which goodwill has a value that will benefit the performance of Alent over future periods. To assist in making this judgement, the Directors undertake an assessment, at least annually, of the carrying value of Alent’s capitalised goodwill. In the assessment undertaken as at 31 December 2011, further details of which are given in note 18 to Alent’s consolidated financial statements in section A of Part IX of this document, value in use was derived from discounted five-year cash flow projections, using a growth rate of 2.5 per cent. in the years beyond the projection period and pre-tax discount rates. The projection period is, in the opinion of the Directors, an appropriate period over which to view the future results of Alent’s businesses for this purpose. Changes to the assumptions used in making these forecasts could significantly alter the Directors’ assessment of the carrying value of goodwill.

6.2 Employee benefits

Alent’s financial statements include the costs and obligations associated with the provision of pension and other post-retirement benefits to current and former employees. It is the Directors’ responsibility to set the assumptions used in determining the key elements of the costs of meeting such future obligations. These assumptions are set after consultation with Alent’s actuaries and include those used to determine regular service costs and the financing elements related to the plans’ assets and liabilities. Whilst the Directors believe that the assumptions used are appropriate, a change in the assumptions used would affect Alent’s results and financial position.

6.3 Liability reserves

Alent has extensive international operations and is subject to various legal and regulatory regimes, including those covering taxation and environmental matters. Several of Alent’s subsidiaries are parties to legal proceedings, certain of which are insured claims arising in the ordinary course of the operations of the company involved, and the Directors are aware of a number of issues which are, or may be, the subject of dispute with tax authorities. Reserves are made for the expected amounts payable in respect of known or probable costs resulting both from legal or other regulatory requirements, or from third-party claims. As the settlement of many of the obligations for which reserve is made is subject to legal or other regulatory process, the timing and amount of the associated outflows is subject to some uncertainty. The Directors use their judgement and experience to make reserves in the financial statements for an appropriate amount relating to such matters.

6.4 Taxation

6.4.1 Current tax

Tax benefits are not recognised unless it is probable that they will result in future economic benefits to Alent. In assessing the amount of the benefit to be recognised in the financial statements, the Directors exercise their judgement in considering the effect of negotiations, litigation and any other matters that they consider may impact upon the potential settlement. Any interest and penalties on tax liabilities are provided for in the tax charge. Alent operates internationally and is subject to tax in many different jurisdictions. As a consequence, Alent is routinely subject to tax audits and local enquiries which, by their very nature, can take a considerable period of time to conclude. Provisions are made for known issues based upon the Directors’ interpretation of country-specific tax law and their assessment of the likely outcome.

6.4.2 Deferred tax

Alent has recognised deferred tax assets in respect of unutilised losses and other timing differences arising in a number of Alent’s businesses. Account has been taken of future

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forecasts of taxable profit in arriving at the values at which these assets are recognised. If these forecast profits do not materialise or change, or there are changes in tax rates or to the period over which the losses or timing differences might be recognised, then the value of deferred tax assets will need to be revised in a future period.

Alent also has losses and other timing differences for which no deferred tax assets have been recognised in these financial statements, relating either to loss-making subsidiaries where the future economic benefit of the timing difference is not probable or to where the timing difference is of such a nature that its value is dependent on certain types of profit being earned, such as capital profits. If trading or other appropriate profits are earned in future in these companies, these losses and other timing differences may yield benefit to Alent in the form of a reduced tax charge.

7 Current trading

Below is an extract from the text of the Cookson 8 October 2012 interim management statement announcement relating to the Performance Materials division (a copy of the full text is available at www.cooksongroup.co.uk):

“Overall trading in the third quarter has been in line with expectations. The Assembly Materials business has benefited from second half seasonality in consumer electronics manufacture, augmented by a continuing pick up in smartphone and tablet volumes. Conversely the Surface Chemistries business has seen moderately slowing demand for performance and decorative coatings principally used in the automotive industry (particularly in Europe), and, more recently, products used in the fabrication and packaging of semiconductors.

There continues to be good growth in sales of more recently introduced innovative products such as ‘tape and reel’ packaged solder pre-forms, immersion tin PCB surface finishes, and PV ribbon. The first confirmed commercial orders for our newly launched Argomax[™] nano-silver, low temperature sintering die-attach material have recently been received.

The Board’s expectations for full year performance remain unchanged. ”

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PART IX HISTORICAL FINANCIAL INFORMATION

The financial information has been prepared with the objective of presenting, in line with the basis of preparation set out herein, the results, net assets and cash flows of Alent in the form that will arise on Completion, as if it had been a standalone business throughout the financial periods covered. Alent plc has no trading history and therefore no separate financial information on Alent plc has been included in this document.

Section A of this Part IX sets out the audited consolidated financial information of Alent for the financial years ended 31 December 2011, 31 December 2010 and 31 December 2009 and the audited interim financial information for the six months ended 30 June 2012 and the unaudited interim financial information for the six months ended 30 June 2011.

The financial information contained in Section A of this Part IX does not constitute statutory accounts within the meaning of section 434 of the Companies Act.

SECTION A: AUDITED CONSOLIDATED FINANCIAL INFORMATION FOR THE SIX MONTHS ENDED 30 JUNE 2012, UNAUDITED CONSOLIDATED FINANCIAL INFORMATION FOR THE SIX MONTHS ENDED 30 JUNE 2011 AND AUDITED CONSOLIDATED FINANCIAL INFORMATION FOR THE YEARS ENDED 31 DECEMBER 2011, 31 DECEMBER 2010 AND 31 DECEMBER 2009 FOR ALENT

Income statement

Notes Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Manufacturing costs . . . . . . . . . . . . . . . . . . . . . . . . . . . Administration, selling and distribution costs . . . . . . . . Trading profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Restructuring charges . . . . . . . . . . . . . . . . . . . . . . . . . . 7 (Loss)/profit relating to non-current assets . . . . . . . . . . Gains relating to employee benefits plans . . . . . . . . . . 25 Profit from operations . . . . . . . . . . . . . . . . . . . . . . . . 5 Finance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Finance income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Share of post-tax profit/(loss) of joint ventures . . . . . . Profit/(loss) on disposal of continuing operations . . . . 9 Profit before tax. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Income tax costs/(credits): - Ordinary activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 - Exceptional items . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 (Loss)/profit for the period attributable to owners of the parent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Earnings/(loss) per share (pence). . . . . . . . . . . . . . . . 12 From (loss)/profit attributable to owners of the parent: - Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	FY 2009 529.9 (347.5) (143.2) 39.2 (27.8) (2.6) — 8.8 (5.9) 3.3 0.7 0.1 7.0 (6.5) (1.6) (1.1) (0.4) (0.4)	FY 2010 720.9 (483.2) (166.7) 71.0 (5.5) 0.8 0.6 66.9 (6.5) 3.6 1.3 (1.2) 64.1 (8.0) 0.6 56.7 20.5 20.5	FY 2011 (£m) 814.4 (558.8) (156.0) 99.6 (1.9) — 2.0 99.7 (6.0) 3.4 1.2 (3.6) 94.7 (16.8) (3.2) 74.7 27.1 27.0	HY 2011 (unaudited) 417.7 (290.6) (82.1) 45.0 — — — 45.0 (2.9) 1.5 0.7 — 44.3 (6.6) (1.3) 36.4 13.2 13.2	HY 2012
					362.4 (235.4) (77.0) 50.0 (2.8) — — 47.2 (2.0) 1.4 (0.1) — 46.5 (8.0) (1.1) 37.4 13.5 13.5

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Statement of comprehensive income

FY 2009 FY 2010 FY 2011 HY 2011 HY 2012 (unaudited) Notes (£m) (Loss)/profit for the period . . . . . . . . . . . (1.1) 56.7 74.7 36.4 37.4 Other comprehensive (loss)/income: Exchange differences on translation of the net assets of foreign operations . . . . . . . . (34.8) 20.6 (3.7) 6.9 (8.6) Change in fair value of cash flow hedges . . . . . . . . . . . . . . . . . . . . . . . . . . . — — (1.6) — (0.5) Change in fair value of cash flow hedges transferred to profit . . . . . . . . . . . . . . . . . — — — — (0.1) Actuarial gains on employee benefits plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 7.9 0.9 0.2 1.3 — Actuarial losses on employee benefits plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 (1.2) (5.7) (5.7) — (2.6) Change in fair value of available-for-sale investments . . . . . . . . . . . . . . . . . . . . . . . 0.2 0.3 — — — Change in fair value of available-for-sale investments transferred to profit . . . . . . . — (1.4) — — — Income tax relating to components of other comprehensive income . . . . . . . . . . . . . . 11 0.7 (0.1) — — — Other comprehensive (loss)/income, net of income tax . . . . . . . . . . . . . . . . . . . . . . . . (27.2) 14.6 (10.8) 8.2 (11.8) Total comprehensive (loss)/income . . . . . (28.3) 71.3 63.9 44.6 25.6	FY 2009 FY 2010 FY 2011 HY 2011 HY 2012 (unaudited) Notes (£m) (Loss)/profit for the period . . . . . . . . . . . (1.1) 56.7 74.7 36.4 37.4 Other comprehensive (loss)/income: Exchange differences on translation of the net assets of foreign operations . . . . . . . . (34.8) 20.6 (3.7) 6.9 (8.6) Change in fair value of cash flow hedges . . . . . . . . . . . . . . . . . . . . . . . . . . . — — (1.6) — (0.5) Change in fair value of cash flow hedges transferred to profit . . . . . . . . . . . . . . . . . — — — — (0.1) Actuarial gains on employee benefits plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 7.9 0.9 0.2 1.3 — Actuarial losses on employee benefits plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 (1.2) (5.7) (5.7) — (2.6) Change in fair value of available-for-sale investments . . . . . . . . . . . . . . . . . . . . . . . 0.2 0.3 — — — Change in fair value of available-for-sale investments transferred to profit . . . . . . . — (1.4) — — — Income tax relating to components of other comprehensive income . . . . . . . . . . . . . . 11 0.7 (0.1) — — — Other comprehensive (loss)/income, net of income tax . . . . . . . . . . . . . . . . . . . . . . . . (27.2) 14.6 (10.8) 8.2 (11.8) Total comprehensive (loss)/income . . . . . (28.3) 71.3 63.9 44.6 25.6	FY 2009 FY 2010 FY 2011 HY 2011 HY 2012 (unaudited) Notes (£m) (Loss)/profit for the period . . . . . . . . . . . (1.1) 56.7 74.7 36.4 37.4 Other comprehensive (loss)/income: Exchange differences on translation of the net assets of foreign operations . . . . . . . . (34.8) 20.6 (3.7) 6.9 (8.6) Change in fair value of cash flow hedges . . . . . . . . . . . . . . . . . . . . . . . . . . . — — (1.6) — (0.5) Change in fair value of cash flow hedges transferred to profit . . . . . . . . . . . . . . . . . — — — — (0.1) Actuarial gains on employee benefits plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 7.9 0.9 0.2 1.3 — Actuarial losses on employee benefits plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 (1.2) (5.7) (5.7) — (2.6) Change in fair value of available-for-sale investments . . . . . . . . . . . . . . . . . . . . . . . 0.2 0.3 — — — Change in fair value of available-for-sale investments transferred to profit . . . . . . . — (1.4) — — — Income tax relating to components of other comprehensive income . . . . . . . . . . . . . . 11 0.7 (0.1) — — — Other comprehensive (loss)/income, net of income tax . . . . . . . . . . . . . . . . . . . . . . . . (27.2) 14.6 (10.8) 8.2 (11.8) Total comprehensive (loss)/income . . . . . (28.3) 71.3 63.9 44.6 25.6
		(8.6) (0.5) (0.1) — (2.6) — — —
		(11.8) 25.6

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Statement of cash flows

Notes Cash flows from operating activities Cash generated from operations . . . . . . . . 13 Interest paid . . . . . . . . . . . . . . . . . . . . . . . . Interest received . . . . . . . . . . . . . . . . . . . . Income taxes paid . . . . . . . . . . . . . . . . . . . Net cash inflow/(outflow) from operating activities . . . . . . . . . . . . . . . Cash flows from investing activities Capital expenditure . . . . . . . . . . . . . . . . . . Proceeds from the sale of property, plant and equipment . . . . . . . . . . . . . . . . . . . . Proceeds from the sale of investments . . . Acquisition of subsidiaries and joint ventures, net of cash acquired . . . . . . . . 30 Disposal of subsidiaries and joint ventures, net of cash disposed of . . . . . . Dividends received from joint ventures . . Other investing outflows . . . . . . . . . . . . . . Net cash outflow from investing activities . . . . . . . . . . . . . . . . . . . . . . . . Net cash inflow/(outflow) before financing activities . . . . . . . . . . . . . . . . Cash flows from financing activities Repayment of borrowings . . . . . . . . . . . . . Increase in borrowings . . . . . . . . . . . . . . . Capital contribution (to)/from Vesuvius . . . . . . . . . . . . . . . . . . . . . . . . Net cash (outflow)/inflow from financing activities . . . . . . . . . . . . . . . . Net (decrease)/increase in cash and cash equivalents . . . . . . . . . . . . . . . . . . 15 Cash and cash equivalents at start of period . . . . . . . . . . . . . . . . . . . . . . . . . . . Effect of exchange rate fluctuations on cash and cash equivalents . . . . . . . . . . . Cash and cash equivalents at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Free cash flow Net cash inflow from operating activities . . . . . . . . . . . . . . . . . . . . . . . . Additional funding contributions to Alent pension plans . . . . . . . . . . . . . . . . . . . . . Capital expenditure . . . . . . . . . . . . . . . . . . Proceeds from the sale of property, plant and equipment . . . . . . . . . . . . . . . . . . . . Dividends received from joint ventures . . Free cash flow . . . . . . . . . . . . . . . . . . . . .	Notes Cash flows from operating activities Cash generated from operations . . . . . . . . 13 Interest paid . . . . . . . . . . . . . . . . . . . . . . . . Interest received . . . . . . . . . . . . . . . . . . . . Income taxes paid . . . . . . . . . . . . . . . . . . . Net cash inflow/(outflow) from operating activities . . . . . . . . . . . . . . . Cash flows from investing activities Capital expenditure . . . . . . . . . . . . . . . . . . Proceeds from the sale of property, plant and equipment . . . . . . . . . . . . . . . . . . . . Proceeds from the sale of investments . . . Acquisition of subsidiaries and joint ventures, net of cash acquired . . . . . . . . 30 Disposal of subsidiaries and joint ventures, net of cash disposed of . . . . . . Dividends received from joint ventures . . Other investing outflows . . . . . . . . . . . . . . Net cash outflow from investing activities . . . . . . . . . . . . . . . . . . . . . . . . Net cash inflow/(outflow) before financing activities . . . . . . . . . . . . . . . . Cash flows from financing activities Repayment of borrowings . . . . . . . . . . . . . Increase in borrowings . . . . . . . . . . . . . . . Capital contribution (to)/from Vesuvius . . . . . . . . . . . . . . . . . . . . . . . . Net cash (outflow)/inflow from financing activities . . . . . . . . . . . . . . . . Net (decrease)/increase in cash and cash equivalents . . . . . . . . . . . . . . . . . . 15 Cash and cash equivalents at start of period . . . . . . . . . . . . . . . . . . . . . . . . . . . Effect of exchange rate fluctuations on cash and cash equivalents . . . . . . . . . . . Cash and cash equivalents at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Free cash flow Net cash inflow from operating activities . . . . . . . . . . . . . . . . . . . . . . . . Additional funding contributions to Alent pension plans . . . . . . . . . . . . . . . . . . . . . Capital expenditure . . . . . . . . . . . . . . . . . . Proceeds from the sale of property, plant and equipment . . . . . . . . . . . . . . . . . . . . Dividends received from joint ventures . . Free cash flow . . . . . . . . . . . . . . . . . . . . .	FY 2009 78.7 (1.1) 0.6 (9.4) 68.8	FY 2009 78.7 (1.1) 0.6 (9.4) 68.8	FY 2010 41.7 (1.7) 0.5 (14.1) 26.4	FY 2010 41.7 (1.7) 0.5 (14.1) 26.4	FY 2010 41.7 (1.7) 0.5 (14.1) 26.4	FY 2011 (£m) 75.9 (1.3) 0.3 (15.1) 59.8	FY 2011 (£m) 75.9 (1.3) 0.3 (15.1) 59.8	FY 2011 (£m) 75.9 (1.3) 0.3 (15.1) 59.8	HY 2011 (unaudited) (5.6) (0.8) 0.2 (7.0) (13.2)	HY 2011 (unaudited) (5.6) (0.8) 0.2 (7.0) (13.2)	HY 2011 (unaudited) (5.6) (0.8) 0.2 (7.0) (13.2)	HY 2012 3.7 (0.3) 0.1 (7.6) (4.1)	HY 2012 3.7 (0.3) 0.1 (7.6) (4.1)
		(4.8) 0.2 0.1 (0.4) — 0.5 (3.3)			(11.0) 0.5 4.5 (0.7) 6.2 0.3 (1.4)			(16.1) — — (0.7) (1.9) 1.2 (1.5)			(5.2) — — (0.4) (1.9) 1.2 (0.8)			(13.8) 1.6 — (0.6) — — (1.3)
		(7.7) 61.1			(1.6) 24.8			(19.0) 40.8			(7.1) (20.3)			(14.1) (18.2)
		(2.8) — (100.5)			— 0.2 (24.2)			(0.2) — (50.1)			— 0.4 0.3			— 0.1 34.6
		(103.3) (42.2) 110.6 (7.6) 60.8 68.8 — (4.8) 0.2 0.5 64.7			(24.0) 0.8 60.8 3.0 64.6 26.4 3.1 (11.0) 0.5 0.3 19.3			(50.3) (9.5) 64.6 0.2 55.3 59.8 1.7 (16.1) — 1.2 46.6			0.7 (19.6) 64.6 — 45.0 (13.2) 0.9 (5.2) — 1.2 (16.3)			34.7 16.5 55.3 (0.9) 70.9 (4.1) — (13.8) 1.6 — (16.3)

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Balance sheet

Notes Assets Property, plant and equipment . . . . . . . . . . . . . . . . . . . 16 Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Interests in joint ventures . . . . . . . . . . . . . . . . . . . . . . . Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Other receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total non-current assets . . . . . . . . . . . . . . . . . . . . . . . Cash and short-term deposits . . . . . . . . . . . . . . . . . . . . 14 Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Trade and other receivables . . . . . . . . . . . . . . . . . . . . . 19 Income tax recoverable . . . . . . . . . . . . . . . . . . . . . . . . . Derivative financial instruments . . . . . . . . . . . . . . . . . . 21 Assets classified as held for sale . . . . . . . . . . . . . . . . . . 22 Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Liabilities Interest-bearing borrowings . . . . . . . . . . . . . . . . . . . . . 24 Employee benefits - net liabilities . . . . . . . . . . . . . . . . . 25 Other payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Total non-current liabilities . . . . . . . . . . . . . . . . . . . . Interest-bearing borrowings . . . . . . . . . . . . . . . . . . . . . 24 Trade and other payables . . . . . . . . . . . . . . . . . . . . . . . 27 Income tax payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Derivative financial instruments . . . . . . . . . . . . . . . . . . 21 Liabilities directly associated with assets classified as held for sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net assets/Invested capital . . . . . . . . . . . . . . . . . . . . .	FY 2009 65.4 288.5 11.6 4.8 2.2 0.6 373.1 61.5 38.0 107.0 0.5 0.2 3.2 210.4 583.5 — 27.2 4.0 26.1 21.5 78.8 1.1 89.8 11.7 9.1 0.4 1.4 113.5 192.3 391.2	FY 2010 69.7 301.0 14.8 0.8 7.7 0.4 394.4 65.7 49.7 139.5 — 2.4 — 257.3 651.7 0.4 26.9 2.2 23.8 23.4 76.7 1.3 109.9 9.8 8.1 2.6 — 131.7 208.4 443.3	FY 2011 (£m) 75.8 298.8 15.7 0.7 7.5 9.5 408.0 58.2 50.0 145.6 0.2 2.5 — 256.5 664.5 0.3 26.4 0.6 25.7 26.9 79.9 3.0 104.6 11.7 5.6 1.7 — 126.6 206.5 458.0	HY 2011 (unaudited) 70.8 303.3 14.0 0.8 8.2 0.3 397.4 46.1 57.7 170.6 — 1.6 — 276.0 673.4 0.3 22.8 1.3 22.7 24.2 71.3 1.8 95.6 9.5 6.9 — — 113.8 185.1 488.3	HY 2012	HY 2012
						82.1 298.5 14.5 1.1 8.0 10.1 414.3 72.2 52.5 145.8 — 2.0 — 272.5 686.8 0.2 26.7 1.9 8.1 28.8 65.7 1.6 79.0 11.0 7.0 2.4 — 101.0 166.7 520.1

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Changes in invested capital

Invested capital at beginning of period . . . . . . . . . . . . . . . . . . . Movements on loans with Vesuvius . . . . . . . . . . . . . . . . . . . . . Total comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . Recognition of share-based payments . . . . . . . . . . . . . . . . . . . Invested capital at end of period . . . . . . . . . . . . . . . . . . . . . .	FY 2009 508.5 (89.2) (28.3) 0.2 391.2	FY 2010 391.2 (20.4) 71.3 1.2 443.3	FY 2011 (£m) 443.3 (50.3) 63.9 1.1 458.0	HY 2011 (unaudited) 443.3 (0.1) 44.6 0.5 488.3	HY 2012	HY 2012
						458.0 35.9 25.6 0.6 520.1

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Notes to the consolidated financial statements

1 General information

Alent plc (the “Company”) is a public limited company registered in England and Wales and to be listed on the London Stock Exchange. The nature of the operations and principal activities of the Company and its subsidiary and joint venture companies (“Alent”) are set out in the Operating and Financial Review on pages 38 to 66.

2 Basis of preparation

2.1 Basis of accounting

The consolidated historical financial information has been prepared with the objective of presenting the results, net assets and cash flows of Alent in the form that will arise following the date of admission of the shares of Alent plc to the London Stock Exchange as if the Alent Business had been a standalone business during the three years ended 31 December 2011 and the six month periods ended 30 June 2011 and 30 June 2012 (the “Reporting Period”).

Throughout this document, ‘FY’ refers to the twelve month periods ended 31 December and ‘HY’ refers to the six month periods ended 30 June.

The financial record is based on historical financial information extracted from the consolidation schedules which supported the audited financial statements of Cookson Group for the Reporting Period.

The consolidated historical financial information has been prepared in accordance with the requirements of the applicable listing rules and Prospectus Directive and in accordance with this basis of preparation. The basis of preparation describes how the financial information has been prepared in accordance with International Financial Reporting Standards as adopted by the European Union (“IFRSs as adopted by the EU”) except as described below.

IFRSs as adopted by the EU do not provide for the preparation of combined financial information and accordingly in preparing the consolidated historical financial information certain accounting conventions commonly used for the preparation of historical financial information for inclusion in investment circulars as described in the Annexure to SIR 2000 (Investment Reporting Standard applicable to public reporting engagements on historical financial information) issued by the UK Auditing Practices Board have been applied. The application of these conventions results in the following material departures from IFRSs as adopted by the EU. In other respects IFRSs as adopted by the EU have been applied.

Carved out and combined financial information

• The historical financial information combines only the financial information for those businesses that will be held by Alent and therefore excludes financial information for those subsidiaries of Cookson that will form Vesuvius. The excluded Vesuvius subsidiaries, included, however, subsidiaries of entities within Alent during the Reporting Period. Such an approach differs from the consolidation requirements of IAS 27 Consolidated and Separate Financial Statements which requires consolidation of all subsidiaries.

Non-trading balances with Vesuvius plc

• Non-trading balances with Vesuvius have been treated as though they are non-repayable financing loans and have been included within Alent invested capital, rather than being treated as third-party assets or liabilities as required by IFRSs adopted by the EU.

Earnings per share

• The weighted average number of ordinary shares outstanding used to calculate earnings per share is based on the number of outstanding shares of Cookson Group plc during each respective reporting period. These shares are considered to be the most appropriate denominator on which to compute earnings per share for Alent.

Alent has not in the past formed a separate legal group and therefore it is not meaningful to show share capital or an analysis of historical reserves for Alent. The net assets of Alent are represented by the cumulative investment in Alent companies (shown as “invested capital”).

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2.2 Other principles applied

In addition, the following principles have been applied in preparing the historical financial information:

• Throughout the Reporting Period, Cookson Group has incurred costs within its central headquarters in London. These costs have been deducted from the underlying trading results of Cookson Group’s three divisions – Engineered Ceramics, Performance Materials and Precious Metals Processing – in arriving at the results for Cookson Group as a whole. These centrally incurred costs, and their treatment in Cookson Group’s historic financial information, can be analysed as follows:

• “Unallocated central costs”: headquarter costs (e.g. Cookson Board costs) relating to Cookson Group’s operations as a public company. These costs have historically not been allocated to Cookson Group’s three divisions as any allocation would have been arbitrary in nature.

• “Allocated central costs”: headquarter costs (e.g. tax and treasury functions) which relate to the management and oversight of Cookson Group’s three divisions. These costs have historically been allocated to the three divisions in proportion to their revenue.

In producing the historical financial information all of the “unallocated central costs” relating to Cookson’s central headquarters have been excluded from the historic financial information for Alent. This is because any allocation would be arbitrary in nature and may not reflect properly the headquarter costs as would have been incurred by Alent had it been a standalone business throughout the Reporting Period. However, the historical financial information for Alent does reflect the “allocated central costs” relating to Cookson’s central headquarters as these costs have historically been allocated against the Performance Materials division of Cookson Group in its historical published financial statements.

As a result of the above treatment, disclosure information for the Reporting Period relating to the remuneration of the Directors of Alent plc excludes the remuneration of those Directors of Alent plc who were also Directors of Cookson and whose remuneration cost is included in the central corporate costs of Cookson.

• Dividends to or from other entities which form part of Vesuvius have been eliminated with the corresponding entry recorded in invested capital. Such dividends would not have been applicable had the operations been independent during the Reporting Period and are not representative of the future position of Alent. Such payments are recorded in “capital contribution (to)/from Vesuvius” in the statement of cash flows.

• Dividends paid or payable to owners of Cookson, are reported in the historical financial information for the Reporting Period as belonging entirely to Vesuvius plc, with no dividends reported as paid or payable to the owners of the parent company, Alent plc. This treatment is consistent with the post-demerger legal entity structure, under which Cookson, re-named Cookson Group Limited, will be a wholly-owned subsidiary of Vesuvius plc. Accordingly, the historical record of dividend payments may not be comparable with actual amounts which may have occurred had the Demerger been in effect during the Reporting Period.

• Cookson has issued equity settled share-based payments to certain employees. The share option expense arising in relation to these employees has been allocated between Alent and Vesuvius in a manner consistent with the expected split of employees between the two companies following the Demerger.

• During the Reporting Period, the principal borrowings requirements of Cookson Group were met by a combination of US Private Placement loan notes and a multi-currency committed syndicated bank facility. In April 2011, Cookson refinanced its existing bank facility with a new 5 year £600 million revolving credit facility with a syndicate of 16 banks, maturing in April 2016. In December 2010, Cookson issued $250 million (£159 million) of US Private Placement loan notes, partly to replace the $190 million of US Private Placement loan notes which matured in May 2012. For the purposes of the historical financial information, as the legal entity, Cookson will remain with Vesuvius on the Demerger of the Cookson Group, all of the borrowings of Cookson have been included in the historical financial information for Vesuvius and all of the finance costs relating to the Cookson borrowings have been reported as finance costs of Vesuvius. Borrowings and borrowing costs relating to debt arrangements established by

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individual Cookson Group companies other than Cookson have been reported according to whether they are in the Alent legal entity group structure or in that of Vesuvius. Similarly financial assets (net cash) and the related finance income have been reported according to whether they are in the Alent legal entity group structure or in that of Vesuvius.

Cookson has signed amendments to both its US Private Placement Note Purchase Agreement and its syndicated bank facility to allow a potential demerger of the Performance Materials division from the Cookson Group. On the Demerger, the US Private Placement loan notes will continue to be obligations of Cookson, which will change its name to Cookson Group Limited and be a wholly-owned subsidiary of Vesuvius plc. The syndicated bank facility will also remain with Vesuvius, with the commitment reducing from the current £600 million to £425 million on the date of the Demerger.

Alent has agreed a new five-year £300 million revolving credit facility with a syndicate of 9 banks which can be drawn upon by Alent only shortly before completion of the Demerger. This facility matures in September 2017.

• Cookson has established policies for managing the financial risks to which its Group activities are exposed, including the market risk resulting from fluctuations in exchange rates and interest rates; and liquidity risk, being the risk that the Group has insufficient debt facilities to finance its operational cash flow requirements and any maturing financial liabilities. In hedging these risks, where appropriate, Cookson uses derivative financial instruments, including forward foreign exchange contracts and interest rate swaps. As the Cookson borrowings are reported in the historical financial information for Vesuvius, any hedging activity relating to those borrowings is similarly reported within the financial statements of Vesuvius. The only derivative activity reported in the Alent historical financial statements relates to the hedging of material transactional foreign exchange exposures by Alent subsidiaries.

• The main UK defined benefit pension plan (the “UK Plan”) operated by Cookson Group provides benefits to current and past employees of, and therefore represents obligations of, both Alent and Vesuvius. The UK Plan was closed to future accrual in July 2010, since when there have been no service costs arising and all funding payments made to the UK Plan have been met by Cookson and not recharged to any of Cookson’s subsidiary companies.

Detailed disclosures relating to the UK Plan are provided in Part IX: “ Historical Financial Information ” of this document.

On the Demerger, and as agreed with the UK Plan Trustee, the liabilities of the UK Plan attributable to Alent participating companies will be funded by way of a payment made in mitigation of the statutory debt arising on those Alent companies ceasing to participate in the UK Plan, combined with an apportionment of any remaining pension liabilities of the Alent participating companies to Cookson. As a consequence, after the Demerger, all remaining pension liabilities of the UK Plan will remain with Vesuvius. In view of this, the historical financial information has been produced assuming that the UK Plan has belonged to Vesuvius during the whole of the Reporting Period.

Obligations relating to defined benefit and similar pension plans in other jurisdictions in which Cookson Group operates post-retirement plans will be retained by the legal entity which currently acts as the plan sponsor. In the historical financial information presented for the Reporting Period, the liabilities of these plans have been allocated in a manner consistent with the corporate group structure of each of Alent and Vesuvius following the Demerger.

• Tax charges in the historical financial information have been determined based on the tax charges recorded by Alent companies in their local statutory accounts, as well as certain adjustments relating to those entities made for Cookson Group consolidation purposes. The tax charges recorded in the historical income statement have been affected by the tax arrangements within the Cookson Group and are not necessarily representative of the tax charges that would have been reported had Alent been an independent group throughout the Reporting Period. They are therefore not necessarily representative of the historical tax charges attributable to Alent or tax charges that may arise in the future.

• This historical financial information has been prepared on the historical cost basis, except for certain financial instruments held at fair value. Non-current assets and disposal groups held for

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sale are stated at the lower of their carrying amount and fair value less costs to sell. The preparation of the historical financial information in accordance with IFRS requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses. These estimates and associated assumptions are based on historical experience and various other factors that are considered to be reasonable under the circumstances. They form the basis of judgements about the carrying values of assets and liabilities that are not readily available from other sources. Actual outcomes may differ from these estimates.

• The estimates and underlying assumptions are reviewed on a continuing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected.

• The accounting policies used in the historical financial information for the Reporting Period presented have been applied consistently by Alent entities.

2.3 Basis of consolidation

The consolidated financial statements of Alent incorporate the financial statements of the Company and entities controlled by the Company (its “subsidiaries”), subject to the departures from the requirements of IAS 27 noted in section 2.1 above. Control exists when the Company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing whether control exists, potential voting rights that are currently exercisable are taken into account. The results of subsidiaries acquired or disposed of during the year are included in the income statement from the effective date of acquisition or up to the effective date of disposal, as appropriate.

Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those detailed herein to ensure that the consolidated financial statements are prepared on a consistent basis. All intra-Group transactions, balances, income and expenses are eliminated on consolidation.

Any non-controlling interests in the net assets of consolidated subsidiaries are identified separately from Alent’s interest therein. Non-controlling interests consist of the amount of those interests at the date of the original business combination, together with the non-controlling interests’ share of profit or loss and each component of other comprehensive income since the date of the combination. Total comprehensive income is attributed to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.

2.4 Going concern

The Directors have a reasonable expectation that Alent has adequate resources to continue in operational existence for the foreseeable future and, accordingly, they have continued to adopt the going concern basis in preparing the financial statements for the Reporting Period.

2.5 Functional and presentation currency

The financial statements are presented in millions of pounds sterling, which is the functional currency of the Company, and rounded to one decimal place. Foreign operations are included in accordance with the policies set out in note 24.1.

2.6 Disclosure of exceptional items

IAS 1, Presentation of Financial Statements, provides no definitive guidance as to the format of the income statement, but states key lines which should be disclosed. It also encourages the disclosure of additional line items and the reordering of items presented on the face of the income statement, when appropriate, for a proper understanding of the entity’s financial performance. In accordance with IAS 1, the Company has adopted a policy of disclosing separately on the face of its consolidated income statement the effect of any components of financial performance considered by the Directors to be exceptional, or for which separate disclosure would assist both in a better understanding of the financial performance achieved and in making projections of future results.

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Both materiality and the nature and function of the components of income and expense are considered in deciding upon such presentation. Such items may include, inter alia , the financial effect of major restructuring activity, profits or losses relating to non-current assets, gains or losses relating to employee benefits plans, finance costs, profits or losses arising on business disposals, and other items, including the taxation impact of the aforementioned items, which have a significant impact on Alent’s results either due to their size or nature.

2.7 New and revised IFRS

Alent has considered the implications of the new and amended IFRSs as adopted by the EU which were issued up to 30 June 2012, none of which had a material impact on Alent’s net cash flows, financial position, total comprehensive income or earnings per share. A number of other new and amended IFRSs as adopted by the EU were issued during the year which do not become effective until after 1 January 2013, none of which is likely to have a material impact on Alent’s net cash flows, financial position, total comprehensive income or earnings per share.

3 Critical judgements in applying accounting policies and key sources of estimation uncertainty

Determining the carrying amount of some assets and liabilities requires estimation of the effect of uncertain future events. The major sources of estimation uncertainty that have a significant risk of resulting in a material adjustment to the carrying amounts of assets or liabilities are noted below.

3.1 Goodwill

The Directors use their judgement to determine the extent to which goodwill has a value that will benefit the performance of Alent over future periods. To assist in making this judgement, the Directors undertake an assessment, at least annually, of the carrying value of Alent’s capitalised goodwill. In the assessment undertaken as at 31 December 2011, further details of which are given in note 18, value in use was derived from discounted five-year cash flow projections, using a growth rate of 2.5 per cent. in the years beyond the projection period and pre-tax discount rates. The projection period is, in the opinion of the Directors, an appropriate period over which to view the future results of Alent’s businesses for this purpose. Changes to the assumptions used in making these forecasts could significantly alter the Directors’ assessment of the carrying value of goodwill.

3.2 Employee benefits

Alent’s financial statements include the costs and obligations associated with the provision of pension and other post-retirement benefits to current and former employees. It is the Directors’ responsibility to set the assumptions used in determining the key elements of the costs of meeting such future obligations. These assumptions are set after consultation with Alent’s actuaries and include those used to determine regular service costs and the financing elements related to the plans’ assets and liabilities. Whilst the Directors believe that the assumptions used are appropriate, a change in the assumptions used would affect Alent’s results and financial position.

3.3 Liability reserves

Alent has extensive international operations and is subject to various legal and regulatory regimes, including those covering taxation and environmental matters. Several of Alent’s subsidiaries are parties to legal proceedings, certain of which are insured claims arising in the ordinary course of the operations of the company involved, and are aware of a number of issues which are, or may be, the subject of dispute with tax authorities. Reserves are made for the expected amounts payable in respect of known or probable costs resulting both from legal or other regulatory requirements or from third-party claims. As the settlement of many of the obligations for which reserve is made is subject to legal or other regulatory process, the timing and amount of the associated outflows is subject to some uncertainty. The Directors use their judgement and experience to make reserves in the financial statements for an appropriate amount relating to such matters.

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3.4 Taxation

(a) Current tax

Tax benefits are not recognised unless it is probable that they will result in future economic benefits to Alent. In assessing the amount of the benefit to be recognised in the financial statements, the Directors exercise their judgement in considering the effect of negotiations, litigation and any other matters that they consider may impact upon the potential settlement. Any interest and penalties on tax liabilities are provided for in the tax charge. Alent operates internationally and is subject to tax in many different jurisdictions. As a consequence, Alent companies are routinely subject to tax audits and local enquiries which, by their very nature, can take a considerable period of time to conclude. Provisions are made for known issues based upon the Directors’ interpretation of country-specific tax law and their assessment of the likely outcome.

(b) Deferred tax

Alent has recognised deferred tax assets in respect of unutilised losses and other timing differences arising in a number of Alent’s businesses. Account has been taken of future forecasts of taxable profit in arriving at the values at which these assets are recognised. If these forecast profits do not materialise or change, or there are changes in tax rates or to the period over which the losses or timing differences might be recognised, then the value of deferred tax assets will need to be revised in a future period.

Alent also has losses and other timing differences for which no deferred tax assets have been recognised in these financial statements, relating either to loss-making subsidiaries where the future economic benefit of the timing difference is not probable or to where the timing difference is of such a nature that its value is dependent on certain types of profit being earned, such as capital profits. If trading or other appropriate profits are earned in future in these companies, these losses and other timing differences may yield benefit to Alent in the form of a reduced tax charge.

4 Non-GAAP financial measures

The Company uses a number of non-Generally Accepted Accounting Practice (“non-GAAP”) financial measures in addition to those reported in accordance with IFRS. The Directors believe that these non-GAAP measures, listed below, are important when assessing the underlying financial and operating performance of Alent and its businesses.

4.1 Net sales value

Net sales value is calculated as revenue, excluding the amount included therein related to commodity metals.

4.2 Return on sales and return on net sales value

Return on sales is calculated as trading profit divided by revenue. Return on net sales value is calculated as trading profit divided by net sales value.

4.3 Underlying revenue

Underlying revenue is calculated as revenue adjusted to exclude the effects of changes in metals prices and exchange rates, and business acquisitions, disposals and closures.

4.4 Headline profit before tax

Headline profit before tax is calculated as the net total of trading profit, plus Alent’s share of post-tax profit of joint ventures and total net finance costs associated with ordinary activities.

4.5 Headline earnings per share

Headline earnings per share is calculated as headline profit before tax and after income tax costs associated with ordinary activities and profit attributable to non-controlling interests, divided by the weighted average number of ordinary shares in issue during the year.

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4.6 Free cash flow

Free cash flow is defined as net cash flow from operating activities after net outlays for the purchase and sale of property, plant and equipment, dividends from joint ventures and dividends paid to non-controlling shareholders, but before additional funding contributions to Alent pension plans.

4.7 Average working capital to sales ratio

The average working capital to sales ratio is calculated as the percentage of average working capital balances to the annualised revenue for the year. Average working capital (comprising inventories, trade and other receivables, and trade and other payables) is calculated as the average of the six previous month-end balances, and annualised revenue is derived from the revenue for the previous six months.

4.8 EBITDA

EBITDA is calculated as the total of trading profit before depreciation charges.

4.9 Net interest

Net interest is calculated as interest payable on borrowings less interest receivable, excluding any item therein considered by the Directors to be exceptional.

4.10 Interest cover

Interest cover is the ratio of EBITDA to net interest.

4.11 Net debt

Net debt comprises the net total of current and non-current interest-bearing borrowings and cash and short-term deposits.

4.12 Net debt to EBITDA

Net debt to EBITDA is the ratio of net debt at the period-end to EBITDA for the preceding twelve months.

4.13 Return on net assets

Return on net assets (“RONA”) is calculated as trading profit plus share of post-tax profit of joint ventures, divided by average net operating assets (being the average over the previous twelve months of property, plant and equipment, trade working capital and other operating receivables and payables).

4.14 Return on investment

Return on investment (“ROI”) is calculated as trading profit after tax plus share of post-tax profit of joint ventures, divided by invested capital (being total equity plus net debt, net employee benefits liabilities and goodwill previously written off to, or amortised against, reserves).

5. Segment information

The segment information contained in this note makes reference to several non-GAAP financial measures, definitions for which can be found in note 4 above.

5.1 Accounting policy

(a) Revenue recognition

Revenue comprises the fair value of the consideration received or receivable for goods supplied and services rendered to customers after deducting rebates, discounts and valueadded taxes, and after eliminating sales between Alent companies. Revenue from the sale of goods is recognised when persuasive evidence exists, usually in the form of an executed sales agreement, that the significant risks and rewards of ownership have been transferred to the customer, recovery of the consideration is probable, there is no continuing management involvement with the goods, and the amount of revenue can be measured reliably. A

78

provision for anticipated returns is made based primarily on historical return rates. Revenue from multi-year contractual arrangements, such as equipment installation contracts, is recognised as performance occurs. Where a contractual arrangement consists of two or more separate elements that can be provided to customers either on a standalone basis or as an extra, such as the provision of supplementary materials with equipment, revenue is recognised for each element as if it were an individual contractual arrangement.

(b) Research and development costs

Expenditure on research activities is recognised in the income statement as an expense in the period in which it is incurred. Expenditure on development activities is capitalised if the product or process is technically and commercially feasible and Alent has sufficient resources to complete development. All other development expenditure is recognised in the income statement as an expense in the period in which it is incurred. Capitalised development expenditure is stated at cost less accumulated amortisation and impairment losses.

5.2 Business segments

For reporting purposes, Alent is organised into two business segments: Assembly Materials and Surface Chemistries, and the senior executive management of each of these business segments reports to the Chief Executive of Alent. It is the Alent Board which makes the key operating decisions in respect of these segments. The information used by the Alent Board to review performance and determine resource allocation between the business segments is presented segmented between the two business segments, Assembly Materials and Surface Chemistries. Taking into account not only the basis on which Alent’s activities are reported to the Alent Board, but also the nature of the products and services within each of these businesses, the production processes involved in each and the nature of their end-markets, the Directors believe that these two business segments are the appropriate way to analyse Alent’s results. The principal activities of each of the business segments are described in the Operating and Financial Review on pages 38 to 66.

Segment revenue represents revenue from external customers (inter-segment revenue is not material) and segment result is equivalent to trading profit excluding corporate costs directly related to managing the parent company. The treatment of Cookson Group’s central headquarter costs throughout the Reporting Period is as stated in the Basis of Preparation at note 2.2 above. Segment result includes items directly attributable to a segment, as well as those items that can be allocated on a reasonable basis.

5.3 Income statement

Segment revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Segment net sales value (“NSV”). . . . . . . . . . . . . . . . . . . . . . . . . . . . Segment EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Segment depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Segment result/Trading profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Restructuring charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Loss relating to non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . Profit/(loss) from operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Finance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Finance income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Share of post-tax profit of joint ventures . . . . . . . . . . . . . . . . . . . . . . . Profit on disposal of continuing operations . . . . . . . . . . . . . . . . . . . . . Profit before tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Return on sales (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Return on net sales value (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Capital expenditure additions (£m) . . . . . . . . . . . . . . . . . . . . . . . . .	Year ended 31 December 2009 Assembly Materials Surface Chemistries Total (£m) 307.5 222.4 529.9 156.7 183.5 340.2 25.9 22.6 48.5 (5.2) (4.1) (9.3) 20.7 18.5 39.2 (6.2) (21.6) (27.8) (2.6) — (2.6) 11.9 (3.1) 8.8 (5.9) 3.3 0.7 0.1 7.0 6.7 8.3 7.4 13.2 10.1 11.5 2.0 2.8 4.8	Year ended 31 December 2009 Assembly Materials Surface Chemistries Total (£m) 307.5 222.4 529.9 156.7 183.5 340.2 25.9 22.6 48.5 (5.2) (4.1) (9.3) 20.7 18.5 39.2 (6.2) (21.6) (27.8) (2.6) — (2.6) 11.9 (3.1) 8.8 (5.9) 3.3 0.7 0.1 7.0 6.7 8.3 7.4 13.2 10.1 11.5 2.0 2.8 4.8
	Assembly Materials 307.5 156.7 25.9 (5.2) 20.7 (6.2) (2.6) 11.9 6.7 13.2 2.0	Surface Chemistries (£m) 222.4 183.5 22.6 (4.1) 18.5 (21.6) — (3.1) 8.3 10.1 2.8

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Segment revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Segment NSV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Segment EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Segment depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Segment result/Trading profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Restructuring charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (Loss)/profit relating to non-current assets . . . . . . . . . . . . . . . . . . . . . . Gains relating to employee benefits plans . . . . . . . . . . . . . . . . . . . . . . Profit from operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Finance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Finance income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Share of post-tax profit of joint ventures . . . . . . . . . . . . . . . . . . . . . . . Loss on disposal of continuing operations . . . . . . . . . . . . . . . . . . . . . . Profit before tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Return on sales (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Return on net sales value (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Capital expenditure additions (£m) . . . . . . . . . . . . . . . . . . . . . . . . .	Year ended 31 December 2010 Assembly Materials Surface Chemistries Total (£m) 446.7 274.2 720.9 193.7 216.5 410.2 41.3 38.4 79.7 (4.9) (3.8) (8.7) 36.4 34.6 71.0 (2.4) (3.1) (5.5) (0.4) 1.2 0.8 0.6 — 0.6 34.2 32.7 66.9 (6.5) 3.6 1.3 (1.2) 64.1 8.1 12.6 9.8 18.8 16.0 17.3 3.9 7.1 11.0	Year ended 31 December 2010 Assembly Materials Surface Chemistries Total (£m) 446.7 274.2 720.9 193.7 216.5 410.2 41.3 38.4 79.7 (4.9) (3.8) (8.7) 36.4 34.6 71.0 (2.4) (3.1) (5.5) (0.4) 1.2 0.8 0.6 — 0.6 34.2 32.7 66.9 (6.5) 3.6 1.3 (1.2) 64.1 8.1 12.6 9.8 18.8 16.0 17.3 3.9 7.1 11.0
	Assembly Materials 446.7 193.7 41.3 (4.9) 36.4 (2.4) (0.4) 0.6 34.2 8.1 18.8 3.9	Surface Chemistries (£m) 274.2 216.5 38.4 (3.8) 34.6 (3.1) 1.2 — 32.7 12.6 16.0 7.1

Segment revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Segment NSV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Segment EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Segment depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Segment result/Trading profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Restructuring charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Gains relating to employee benefits plans . . . . . . . . . . . . . . . . . . . . . . Profit from operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Finance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Finance income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Share of post-tax profit of joint ventures . . . . . . . . . . . . . . . . . . . . . . . Loss on disposal of continuing operations . . . . . . . . . . . . . . . . . . . . . . Profit before tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Return on sales (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Return on net sales value (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Capital expenditure additions (£m) . . . . . . . . . . . . . . . . . . . . . . . . .	Year ended 31 December 2011 Assembly Materials Surface Chemistries Total (£m) 527.3 287.1 814.4 198.5 219.2 417.7 57.0 51.1 108.1 (4.9) (3.6) (8.5) 52.1 47.5 99.6 (0.1) (1.8) (1.9) 2.0 — 2.0 54.0 45.7 99.7 (6.0) 3.4 1.2 (3.6) 94.7 9.9 16.5 12.2 26.2 21.7 23.8 11.5 4.6 16.1	Year ended 31 December 2011 Assembly Materials Surface Chemistries Total (£m) 527.3 287.1 814.4 198.5 219.2 417.7 57.0 51.1 108.1 (4.9) (3.6) (8.5) 52.1 47.5 99.6 (0.1) (1.8) (1.9) 2.0 — 2.0 54.0 45.7 99.7 (6.0) 3.4 1.2 (3.6) 94.7 9.9 16.5 12.2 26.2 21.7 23.8 11.5 4.6 16.1
	Assembly Materials 527.3 198.5 57.0 (4.9) 52.1 (0.1) 2.0 54.0 9.9 26.2 11.5	Surface Chemistries (£m) 287.1 219.2 51.1 (3.6) 47.5 (1.8) — 45.7 16.5 21.7 4.6

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Segment revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Segment NSV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Segment EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Segment depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . Segment result/Trading profit . . . . . . . . . . . . . . . . . . . Exceptional items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Profit from operations . . . . . . . . . . . . . . . . . . . . . . . . . Finance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Finance income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Share of post-tax profit of joint ventures . . . . . . . . . . . . Profit before tax. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Return on sales (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . Return on net sales value (%) . . . . . . . . . . . . . . . . . . . Capital expenditure additions (£m) . . . . . . . . . . . . . . .	Six months ended 30 June 2011	Six months ended 30 June 2011	(unaudited)	(unaudited)
	Assembly Materials 271.2 95.2 26.0 (2.4 ) 23.6 — 23.6 8.7 24.8 3.7	Surface Chemistries (£m) 146.5 111.4 23.2 (1.8 ) 21.4 — 21.4 14.6 19.2 1.6		Total
				417.7 206.6 49.2 (4.2 ) 45.0 — 45.0 (2.9) 1.5 0.7 44.3 10.8 21.8 5.3

Segment revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Segment net sales value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Segment EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Segment depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Segment result/Trading profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Restructuring charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Profit from operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Finance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Finance income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Share of post-tax loss of joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . Profit before tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Return on sales (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Return on net sales value (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Capital expenditure additions (£m) . . . . . . . . . . . . . . . . . . . . . . . . .	Six months ended 30 June 2012	Six months ended 30 June 2012	Six months ended 30 June 2012
	Assembly Materials 224.4 98.4 30.4 (2.6) 27.8 (0.4) 27.4 12.4 28.3 2.8	Surface Chemistries (£m) 138.0 106.4 23.9 (1.7) 22.2 (2.4) 19.8 16.1 20.9 11.0	Total
			362.4
			204.8
			54.3 (4.3)
			50.0 (2.8)
			47.2 (2.0) 1.4 (0.1)
			46.5
			13.8 24.4 13.8

5.4 Geographic analysis of external revenue

China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States of America . . . . . . . . . . . . . . . . . . . Taiwan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Germany . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Brazil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United Kingdom . . . . . . . . . . . . . . . . . . . . . . . . . . Singapore . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Rest of the world . . . . . . . . . . . . . . . . . . . . . . . . . . Total Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	FY 2009 108.8 116.2 52.3 58.3 22.3 28.8 28.4 114.8 529.9	FY 2010 150.2 156.7 82.4 68.1 33.5 31.0 39.8 159.2 720.9	FY 2011 (£m) 191.0 178.0 91.2 75.9 39.4 33.3 31.1 174.5 814.4	HY 2011 (unaudited) 91.5 89.6 49.7 40.3 19.2 16.9 16.6 93.9 417.7	HY 2012	HY 2012
						82.5 92.6 36.7 33.7 17.0 13.1 14.1 72.7 362.4

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External revenue disclosed in the table above is based upon the geographical location of the operation. Alent’s customers are widely dispersed around the world and no single country included within rest of the world in the table above, for any of the periods presented, amounts to more than 5 per cent. of Alent’s total external revenue.

5.5 Products and customers

Information relating to Alent’s products and services is given in the Operating and Financial Review on pages 38 to 66. Alent is not dependent upon any single customer for its revenue and no single customer, during the Reporting Period, accounts for more than 10 per cent. of Alent’s total external revenue.

6 Amounts payable to KPMG Audit Plc and its associates

Audit of financial statements of subsidiaries pursuant to legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other services pursuant to such legislation . . . . . . . . . . Other services relating to taxation . . . . . . . . . . . . . . . . . Services relating to corporate finance transactions . . . . Total auditor’s remuneration . . . . . . . . . . . . . . . . . . .	FY 2009 0.7 0.1 0.1 — 0.9	FY 2010 0.7 — 0.2 — 0.9	FY 2011 (£m) 0.7 — 0.1 — 0.8	HY 2011 (unaudited) — — — — —	HY 2012
					— 0.1 — 0.5
					0.6

In the above table, services relating to corporate finance transactions represent amounts payable to KPMG for its role in connection with the Proposals.

7 Restructuring charges

The restructuring charge for the six months ended 30 June 2012 was £2.8 million (HY 2011: £nil; FY 2011: £1.9 million; FY 2010: £5.5 million; FY 2009: £27.8 million), comprising gross charges of £3.5 million (HY 2011: £1.7 million; FY 2011: £3.6 million) offset by £0.6 million (HY 2011: £1.7 million; FY 2011: £1.7 million) of gains arising in respect of assets associated with prior year restructuring initiatives. The charges arose in connection with initiatives that included redundancy programmes, the downsizing or closure of facilities, the streamlining of manufacturing processes and the rationalisation of product lines. The net tax credit attributable to these restructuring charges was £0.3 million for the six months ended 30 June 2012 (HY 2011: £0.2 million; FY 2011: £0.2 million; FY 2010: £0.9 million; FY 2009: £0.4 million).

Cash costs relating to restructuring of £18.0 million were incurred in the first half of 2012, of which £15.8 million related to the purchase of a property in Woking, UK which was previously occupied on a leasehold basis and over which an onerous lease reserve had been established in 2009. The purchase of the property resulted in the extinguishing of that provision, with a net credit being reported within net restructuring charges. The other cash costs in the period were in respect of the restructuring initiatives commenced both in 2011 and in prior years (HY 2011: £3.4 million; FY 2011: £3.8 million; FY 2010: £9.0 million; FY 2009: £11.2 million), leaving provisions made but unspent of £4.7 million (note 29) as at 30 June 2012 (HY 2011: £20.5 million; FY 2011: £19.5 million; FY 2010: £21.5 million; FY 2009: £24.4 million).

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8.1 Employee benefits expense

8 Employees

Wages and salaries . . . . . . . . . . . . . . . . . . . . . . . . Social security costs . . . . . . . . . . . . . . . . . . . . . . . Share-based payments (note 26) . . . . . . . . . . . . . . Pension costs (note 25): - Defined contribution plans . . . . . . . . . . . . . . . . . - Defined benefit plans . . . . . . . . . . . . . . . . . . . . . Other post-retirement benefits . . . . . . . . . . . . . Total employee benefits expense . . . . . . . . . . . .	FY 2009 98.6 7.5 0.2 4.2 2.0 0.1 112.6	FY 2010 109.1 7.5 1.2 5.0 0.9 0.1 123.8	FY 2011 (£m) 103.4 7.3 1.1 5.3 (0.8) — 116.3	HY 2011 (unaudited) 54.4 3.8 0.5 2.3 0.5 — 61.5	HY 2012
					51.1 3.1 0.6 2.7 — — 57.5

The total employee benefits expense is recognised as follows:

Charged within trading profit . . . . . . . . . . . . . . . . Credited to gains relating to employee benefits plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Charged within ordinary finance costs . . . . . . . . . Credited within finance income . . . . . . . . . . . . . . Total employee benefits expense . . . . . . . . . . . .	FY 2009 111.2 — 4.0 (2.6) 112.6	FY 2010 123.5 (0.6) 4.0 (3.1) 123.8	FY 2011 (£m) 117.7 (2.0) 3.6 (3.0) 116.3	HY 2011 (unaudited) 61.4 — 1.6 (1.5) 61.5	HY 2012
					57.3 — 1.4 (1.2) 57.5

8.2 Remuneration of key management personnel

For the reasons stated in the Basis of Preparation note 2.2, disclosure information for the Reporting Period relating to the remuneration of the Directors of Alent plc excludes the remuneration of those Directors of Alent plc who were also Directors of Cookson Group plc and whose remuneration cost is included in the central corporate costs of Cookson.

The members of the Board of Directors of Alent are the key management personnel of Alent. The remuneration of the Directors of Alent for FY 2011 is given, by way of memorandum information, in notes 35 and 36. As Mr Corbett is a Director of Alent plc and, during the whole of the Reporting Period, was Chief Executive of the Performance Materials division of Cookson Group, the analysis of his remuneration, which is included within the financial results of Alent for the Reporting Period, is noted below.

Short-term employee benefits . . . . . . . . . . . . . . . . . . Post-employment benefits . . . . . . . . . . . . . . . . . . . . Share-based payments . . . . . . . . . . . . . . . . . . . . . . . . Total remuneration of key management personnel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	FY 2009 0.5 0.1 0.1 0.7	FY 2010 0.6 0.1 0.4 1.1	FY 2011 (£m) 0.7 0.1 0.3 1.1	HY 2011 0.2 — 0.1 0.3	HY 2012
					0.2 — 0.2 0.4

Mr L Forberg was appointed a Director of Alent plc on 31 October 2012. Mr Forberg is a managing partner of Cevian Capital, which held just over 20 per cent. of Cookson’s ordinary shares on the date of his appointment.

9 Profit/(loss) on disposal of continuing operations

No loss or profit arose in the first half of 2012 in respect of the disposal of operations (HY 2011: £nil; FY 2011: £3.6 million loss; FY 2010: £1.2 million loss; FY 2009: £0.1 million profit). The amounts arising in prior periods are associated with the disposal of non-core businesses. No tax credit was associated with these disposals throughout the Reporting Period.

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10 Finance costs and finance income

10.1 Accounting policy

Borrowing costs that are directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of that asset. All other borrowing costs are recognised as an expense in the income statement using the effective interest rate method.

10.2 Total net finance costs

Finance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Finance income . . . . . . . . . . . . . . . . . . . . . . . . . . . Total net finance costs . . . . . . . . . . . . . . . . . . . .	FY 2009 (5.9) 3.3 (2.6)	FY 2010 (6.5) 3.6 (2.9)	FY 2011 (£m) (6.0) 3.4 (2.6)	HY 2011 (unaudited) (2.9) 1.5 (1.4)	HY 2012
					(2.0) 1.4 (0.6)

10.3 Ordinary finance costs and finance income

Interest payable on borrowings: - Loans, overdrafts and factoring arrangements . . . . . . . . . . . . . . . . . . . . . . . . . . . Total interest payable on borrowings . . . . . . . . Other interest payable: - Interest on retirement benefits obligations . . . . . - Unwinding of discounted provisions . . . . . . . . . Total ordinary finance costs. . . . . . . . . . . . . . . . Interest receivable . . . . . . . . . . . . . . . . . . . . . . . . . Expected return on retirement benefits assets . . . Total finance income. . . . . . . . . . . . . . . . . . . . . .	FY 2009 (1.1) (1.1) (4.0) (0.8) (5.9) 0.7 2.6 3.3	FY 2010 (1.5) (1.5) (4.0) (1.0) (6.5) 0.5 3.1 3.6	FY 2011 (£m) (1.4) (1.4) (3.6) (1.0) (6.0) 0.4 3.0 3.4	HY 2011 (unaudited) (0.8) (0.8) (1.6) (0.5) (2.9) — 1.5 1.5	HY 2012
					(0.3) (0.3) (1.4) (0.3) (2.0) 0.2 1.2 1.4

11 Income tax

11.1 Accounting policy

Tax expense represents the sum of current tax and deferred tax. Current and deferred tax are recognised in profit or loss except to the extent that they relate to items charged or credited in other comprehensive income or directly to changes in invested capital, in which case the associated tax is also dealt with in other comprehensive income or directly in changes in invested capital.

Current tax is based on taxable profit for the year. Taxable profit differs from profit before tax as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. Alent’s liability for current tax is calculated using tax rates and laws that have been enacted, or substantively enacted, by the balance sheet date.

Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised, based on tax rates and laws that have been enacted, or substantively enacted, by the balance sheet date.

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Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and interests in joint ventures, except where Alent is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and Alent intends to settle its current tax assets and liabilities on a net basis.

11.2 Income tax costs

Current tax: - Overseas taxation . . . . . . . . . . . . . . . . . . . . . . . . - Adjustments in respect of prior years . . . . . . . . . Total current tax . . . . . . . . . . . . . . . . . . . . . . . . . Deferred tax: - Origination and reversal of temporary taxable differences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - Adjustments in respect of prior years . . . . . . . . . Total deferred tax . . . . . . . . . . . . . . . . . . . . . . . . Total income tax costs. . . . . . . . . . . . . . . . . . . . . Total income tax costs attributable to: - Ordinary activities . . . . . . . . . . . . . . . . . . . . . . . - Exceptional items . . . . . . . . . . . . . . . . . . . . . . . . Total income tax costs. . . . . . . . . . . . . . . . . . . . . Exceptional items: - Restructuring charges (note 7) . . . . . . . . . . . . . . - Deferred tax on goodwill . . . . . . . . . . . . . . . . . . - Gains related to employee benefits plans . . . . . . - Loss related to non-current assets . . . . . . . . . . . Total tax charge/(credit) on exceptional items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	FY 2009 9.8 (3.7) 6.1 0.2 1.8 2.0 8.1 6.5 1.6 8.1 FY 2009 (0.4) 3.3 — (1.3) 1.6	FY 2010 12.6 (0.9) 11.7 (5.2) 0.9 (4.3) 7.4 8.0 (0.6) 7.4 FY 2010 (1.0) 0.4 — — (0.6)	FY 2011 (£m) 17.3 (0.6) 16.7 4.2 (0.9) 3.3 20.0 16.8 3.2 20.0 FY 2011 (£m) (0.2) 2.9 0.5 — 3.2	HY 2011 (unaudited) 7.2 (0.3) 6.9 1.0 — 1.0 7.9 6.6 1.3 7.9 HY 2011 (unaudited) (0.2) 1.5 — — 1.3	HY 2012
					7.9 (0.6) 7.3 1.8 — 1.8 9.1 8.0 1.1 9.1 HY 2012
					(0.3) 1.4 — — 1.1

No tax arose during the Reporting Period on the profit/(losses) arising on the disposal of continuing operations.

Tax charged in the statement of comprehensive income in the first half of 2012 amounted to £nil (HY 2011: £nil; FY 2011: £nil; FY 2010: £0.1 million; FY 2009: credit of £0.7 million), all of which related to net actuarial gains and losses on employee benefits plans.

Alent operates in a number of countries that have differing tax rates, laws and practices. Changes in any of these areas could, adversely or positively, impact Alent’s tax charge in the future. Continuing losses, or insufficiency of taxable profit to absorb all expenses, in any subsidiary could have the effect of increasing tax charges in the future, relative to 2011, as effective tax relief may not be available for those losses or expenses. Other significant factors affecting the tax charge are described in notes 3.4 and 11.4.

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11.3 Reconciliation of income tax costs to profit before tax

Profit before tax . . . . . . . . . . . . . . . . . . . . . . . . . Tax at the UK corporation tax rate of 26.5% (2010: 28.0%; 2009: 28.0%) . . . . . . . . . . . . . . . Overseas tax rate differences . . . . . . . . . . . . . . . . Withholding taxes . . . . . . . . . . . . . . . . . . . . . . . . . Amortisation of intangibles . . . . . . . . . . . . . . . . . Expenses not deductible for tax purposes . . . . . . . Deferred tax assets not recognised . . . . . . . . . . . . Recognition of previously unrecognised tax losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Adjustments in respect of prior years . . . . . . . . . . Total income tax costs. . . . . . . . . . . . . . . . . . . . .	FY 2009 7.0 1.9 (4.6) 1.2 3.3 — 8.2 — (1.9) 8.1	FY 2010 64.1 17.9 (5.5) 1.5 2.7 0.2 (6.1) (3.3) — 7.4	FY 2011 (£m) 94.7 25.1 (0.5) 2.0 2.9 — (8.0) — (1.5) 20.0	HY 2011 (unaudited) 44.3 12.0 0.2 0.5 1.5 — (0.7) (5.3) (0.3) 7.9	HY 2012
					46.5 11.6 2.1 0.5 1.4 — (0.3) (5.6) (0.6) 9.1

11.4 Deferred tax

Deferred tax
As at 1 January 2009 . . . . . . . . . . . . Exchange adjustments . . . . . . . . . . . . Credit to the statement of comprehensive income . . . . . . . . . . Credit/(charge) to the income statement . . . . . . . . . . . . . . . . . . . . As at 31 December 2009. . . . . . . . . . Exchange adjustments . . . . . . . . . . . . Charge to the statement of comprehensive income . . . . . . . . . . (Charge)/credit to the income statement . . . . . . . . . . . . . . . . . . . . As at 31 December 2010. . . . . . . . . . Exchange adjustments . . . . . . . . . . . . Credit/(charge) to the income statement . . . . . . . . . . . . . . . . . . . . As at 30 June 2011 . . . . . . . . . . . . . . As at 1 January 2011 . . . . . . . . . . . . . Exchange adjustments . . . . . . . . . . . . (Charge)/credit to the income statement . . . . . . . . . . . . . . . . . . . . As at 31 December 2011. . . . . . . . . . Exchange adjustments . . . . . . . . . . . . (Charge)/credit to the income statement . . . . . . . . . . . . . . . . . . . . As at 30 June 2012 . . . . . . . . . . . . . .	Accelerated capital allowances (1.6) 0.3 — 1.5 0.2 — — (0.8) (0.6) — — (0.6) (0.6) — (0.3) (0.9) — — (0.9)	Other operating losses 1.6 0.1 — (0.7) 1.0 — — 2.8 3.8 — 0.5 4.3 3.8 (0.1) 0.9 4.6 — (0.4) 4.2	Pension costs Intangible assets (£m) — (20.7) — 2.1 0.7 — — (2.9) 0.7 (21.5) — (0.7) (0.1) — (0.1) (0.4) 0.5 (22.6) — 0.7 — (1.5) 0.5 (23.4) 0.5 (22.6) — (0.2) (0.2) (3.0) 0.3 (25.8) — 0.4 — (1.4) 0.3 (26.8)	Timing differences 0.2 — — 0.1 0.3 0.1 — 2.8 3.2 — — 3.2 3.2 (0.1) (0.7) 2.4 — — 2.4	Total
					(20.5) 2.5 0.7 (2.0)
					(19.3) (0.6) (0.1) 4.3
					(15.7) 0.7 (1.0)
					(16.0)
					(15.7) (0.4) (3.3)
					(19.4) 0.4 (1.8)
					(20.8)

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Recognised in the balance sheet as: - Non-current deferred tax assets . . . . . . . . . . . . . - Non-current deferred tax liabilities . . . . . . . . . . Net total deferred tax liabilities . . . . . . . . . . . . .	FY 2009 2.2 (21.5) (19.3)	FY 2010 7.7 (23.4) (15.7)	FY 2011 (£m) 7.5 (26.9) (19.4)	HY 2011 (unaudited) 8.2 (24.2) (16.0)	HY 2012	HY 2012
						8.0 (28.8) (20.8)

Tax loss carry-forwards and other temporary differences of £0.7 million (HY 2011: £1.8 million; FY 2011: £0.7 million; FY 2010: £1.8 million; FY 2009: £nil) were recognised by subsidiaries reporting a loss in 2012 or 2011. On the basis of approved business plans of these subsidiaries, the Directors consider it probable that the tax loss carry-forwards and temporary differences can be offset against future taxable profits.

The total deferred tax asset not recognised as at 30 June 2012 was £124.9 million (HY 2011: £126.5 million; FY 2011: £125.8 million; FY 2010: £129.3 million; FY 2009: £133.4 million).

Capital losses available to offset future UK capital gains . . . . . . . . . . . . . . . . . . . . . . . . . . . Operating losses . . . . . . . . . . . . . . . . . . . . . . . . . . Unrelieved interest . . . . . . . . . . . . . . . . . . . . . . . . UK ACT credits . . . . . . . . . . . . . . . . . . . . . . . . . . Other timing differences . . . . . . . . . . . . . . . . . . . . Total deferred tax not recognised . . . . . . . . . . .	FY 2009 — 82.9 — — 50.5 133.4	FY 2010 — 81.2 — — 48.1 129.3	FY 2011 — 79.3 — — 46.5 125.8	HY 2011 (unaudited) — 78.4 — — 48.1 126.5	HY 2012	HY 2012
						— 74.4 — — 50.5 124.9

In accordance with the accounting policy in note 11.1, these items have not been recognised as deferred tax assets on the basis that their future economic benefit is not probable. In total, there was a decrease of £0.9m (HY 2011: £2.8 million decrease; FY 2011: £3.5 million decrease; FY 2010: £4.2 million decrease; FY 2009: £10.3 million) in net unrecognised deferred tax assets during the year.

As at 30 June 2012, Alent had total operating losses carried forward with a tax value of £78.6 million (HY 2011: £82.7 million; FY 2011: £83.9 million; FY 2010: £85.0 million; FY 2009: £84.0 million).

Losses available to set against future US taxable income: - Due to expire in 2020 . . . . . . . . . . . . . . . . . . . . . - Due to expire 2022 – 2031 . . . . . . . . . . . . . . . . . Losses available to set against future UK taxable income (may be carried forward indefinitely) . . . . . . . . . . . . . . . . . . . . . . . . . . . . Losses available to set against future ROW taxable income: - Due to expire within 5 years . . . . . . . . . . . . . . . . - Due to expire between 5 and 20 years . . . . . . . . - Carried forward indefinitely . . . . . . . . . . . . . . . . Total net operating losses . . . . . . . . . . . . . . . . . . US research and experimentation credits (due to expire 2018 – 2031) . . . . . . . . . . . . . . . . . . . US foreign tax credits (due to expire 2014 – 2018) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	FY 2009 3.2 56.3 59.5 9.0 7.6 2.4 5.5 15.5 84.0 1.8 5.5	FY 2010 2.9 59.9 62.8 9.1 6.5 2.3 4.3 13.1 85.0 1.7 4.9	FY 2011 (£m) 3.3 60.7 64.0 8.6 4.0 2.4 4.9 11.3 83.9 1.8 4.9	HY 2011 (unaudited) 3.3 58.3 61.6 8.9 5.3 2.3 4.6 12.2 82.7 1.7 4.9	HY 2012
					3.3 59.8 63.1 8.6 0.5 1.5 4.9 6.9 78.6 1.8 4.9

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The ‘rest of the world’ losses arise in a number of countries and are not individually significant, reflecting the spread of Alent’s operations.

Due to changes in UK tax law enacted in 2009 exempting dividends received from UK tax, throughout the Reporting Period there are no temporary differences associated with investments in subsidiaries and interests in joint ventures for which deferred tax liabilities have not been recognised.

From 1 April 2012, the UK corporation tax rate reduced to 24 per cent. A further UK corporation tax rate reduction to 23 per cent. was substantially enacted on 3 July 2012 and will have effect from 1 April 2013. Accordingly, Alent’s closing UK deferred tax liability has been provided using a tax rate of 24 per cent. There was no tax impact of using this lower tax rate on the exceptional tax credit relating to amortisation of intangible assets in the first half of 2012.

12 Earnings per share (“EPS”)

12.1 Per share amounts

Earnings/(loss) per share: Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Headline . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Diluted headline . . . . . . . . . . . . . . . . . . . . . . . . . .	FY 2009 (0.4) (0.4) 12.2 12.2	FY 2010 20.5 20.5 22.2 22.2	FY 2011 (pence) 27.1 27.0 29.5 29.4	HY 2011 (unaudited) 13.2 13.2 13.7 13.6	HY 2012
					13.5 13.5 14.9 14.9

12.2 Earnings for EPS

Basic and diluted EPS are based upon profit attributable to owners of the parent, as reported in the income statement, of £37.4 million (HY 2011: £36.4 million; FY 2011: £74.7 million; FY 2010: £56.7 million; FY 2009: £(1.1) million). Headline and diluted headline EPS are based upon headline profit attributable to owners of the parent of £41.3 million (HY 2011: £37.7 million; FY 2011: £81.4 million; FY 2010: £61.4 million; FY 2009: £30.8 million).

The table below reconciles these different profit measures which are both derived entirely from continuing operations.

Profit attributable to owners of the parent . . . Adjustments for exceptional items: - Restructuring charges . . . . . . . . . . . . . . . . . . . . . - Profit/(loss) relating to non-current assets . . . . . - Gains relating to employee benefits plans . . . . . - Loss/(profit) on disposal of continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - Tax relating to exceptional items . . . . . . . . . . . . Headline profit attributable to owners of the parent . . . . . . . . . . . . . . . . . .	FY 2009 (1.1) 27.8 2.6 — (0.1) 1.6 30.8	FY 2010 56.7 5.5 (0.8) (0.6) 1.2 (0.6) 61.4	FY 2011 (£m) 74.7 1.9 — (2.0) 3.6 3.2 81.4	HY 2011 (unaudited) 36.4 — — — — 1.3 37.7	HY 2012
					37.4 2.8 — — — 1.1 41.3

12.3 Weighted average number of shares

For calculating basic and headline EPS . . . . . . . . Adjustment for dilutive potential ordinary shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . For calculating diluted basic and diluted headline EPS . . . . . . . . . . . . . . . . . . . . . . . . . .	FY 2009 252.8 — 252.8	FY 2010 276.2 0.8 277.0	FY 2011 (£m) 275.7 0.9 276.6	HY 2011 (unaudited) 276.0 0.5 276.5	HY 2012	HY 2012
						276.7 0.6 277.3

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For the purposes of calculating diluted basic and diluted headline EPS, the weighted average number of ordinary shares is adjusted to include the weighted average number of ordinary shares that would be issued on the conversion of all dilutive potential ordinary shares relating to the Company’s sharebased payment plans. Potential ordinary shares are only treated as dilutive when their conversion to ordinary shares would decrease earnings per share, or increase loss per share, from continuing operations.

In addition to the ordinary shares shown as being dilutive in the table above, the Company had no outstanding options and share awards in relation to its share-based payment plans that could dilute EPS in the future, but which are not included in the calculation of diluted and diluted headline EPS above because they were antidilutive in the years presented.

13 Cash generated from operations

Profit from operations . . . . . . . . . . . . . . . . . . . . . . . . Adjustments for: - Restructuring charges . . . . . . . . . . . . . . . . . . . . . . . . . - Loss/(profit) relating to non-current assets . . . . . . . . - Gains relating to employee benefits plans . . . . . . . . . - Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Decrease/(increase) in inventories . . . . . . . . . . . . . . . . Decrease/(increase) in trade receivables . . . . . . . . . . . . Increase/(decrease) in trade payables . . . . . . . . . . . . . . Decrease/(increase) in other working capital balances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net decrease/(increase) in trade and other working capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net operating outflow related to assets and liabilities classified as held for sale . . . . . . . . . . . . . . . . . . . . . Outflow related to restructuring charges . . . . . . . . . . . Additional funding contributions into Alent pension plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cash generated from/(absorbed by) operations. . . .	Profit from operations . . . . . . . . . . . . . . . . . . . . . . . . Adjustments for: - Restructuring charges . . . . . . . . . . . . . . . . . . . . . . . . . - Loss/(profit) relating to non-current assets . . . . . . . . - Gains relating to employee benefits plans . . . . . . . . . - Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Decrease/(increase) in inventories . . . . . . . . . . . . . . . . Decrease/(increase) in trade receivables . . . . . . . . . . . . Increase/(decrease) in trade payables . . . . . . . . . . . . . . Decrease/(increase) in other working capital balances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net decrease/(increase) in trade and other working capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net operating outflow related to assets and liabilities classified as held for sale . . . . . . . . . . . . . . . . . . . . . Outflow related to restructuring charges . . . . . . . . . . . Additional funding contributions into Alent pension plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cash generated from/(absorbed by) operations. . . .	FY 2009 8.8 27.8 2.6 — 9.3 48.5	FY 2009 8.8 27.8 2.6 — 9.3 48.5	FY 2009 8.8 27.8 2.6 — 9.3 48.5	FY 2010 66.9 5.5 (0.8) (0.6) 8.7 79.7	FY 2010 66.9 5.5 (0.8) (0.6) 8.7 79.7	FY 2011 (£m) 99.7 1.9 — (2.0) 8.5 108.1	FY 2011 (£m) 99.7 1.9 — (2.0) 8.5 108.1	HY 2011 (unaudited) 45.0 — — — 4.2 49.2	HY 2011 (unaudited) 45.0 — — — 4.2 49.2	HY 2012 47.2 2.8 — — 4.3 54.3	HY 2012 47.2 2.8 — — 4.3 54.3
			8.8 27.8 2.6 — 9.3
			48.5
			12.1 2.5 17.2 10.4			(10.4) (25.2) 1.4 9.9		(1.2) (2.0) (2.7) (20.8)		(7.3) (18.1) (8.4) (16.7)		(3.2) (3.2) (9.7) (16.5)
			42.2 (0.8) (11.2) — 78.7			(24.3) (1.6) (9.0) (3.1) 41.7		(26.7) — (3.8) (1.7) 75.9		(50.5) — (3.4) (0.9) (5.6)		(32.6) — (18.0) — 3.7

14 Cash and cash equivalents

Short-term deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cash at bank and in hand . . . . . . . . . . . . . . . . . . . . . . . . Cash and short-term deposits . . . . . . . . . . . . . . . . . . . Bank overdrafts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cash and cash equivalents in the statement of cash flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	FY 2009 6.9 54.6 61.5 (0.7) 60.8	FY 2010 — 65.7 65.7 (1.1) 64.6	FY 2011 (£m) — 58.2 58.2 (2.9) 55.3	HY 2011 (unaudited) — 46.1 46.1 (1.1) 45.0	HY 2012
					— 72.2 72.2 (1.3) 70.9

Short-term deposits include demand deposits and short-term highly liquid investments with maturities of three months or less that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. Bank overdrafts that are repayable on demand and form an integral part of Alent’s cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash flows.

89

15 Reconciliation of movement in net cash/(debt)

Cash and cash equivalents: – Short-term deposits . . . . . . . . . . . . . . . . . . . – Cash at bank and in hand . . . . . . . . . . . . . . – Bank overdrafts . . . . . . . . . . . . . . . . . . . . . Borrowings, excluding bank overdrafts: – Current . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net cash/(debt) . . . . . . . . . . . . . . . . . . . . . . . Cash and cash equivalents: – Short-term deposits . . . . . . . . . . . . . . . . . . . – Cash at bank and in hand . . . . . . . . . . . . . . – Bank overdrafts . . . . . . . . . . . . . . . . . . . . . Borrowings, excluding bank overdrafts: – Current . . . . . . . . . . . . . . . . . . . . . . . . . . . . – Non-current . . . . . . . . . . . . . . . . . . . . . . . . . Net cash/(debt) . . . . . . . . . . . . . . . . . . . . . . . Cash and cash equivalents: – Cash at bank and in hand . . . . . . . . . . . . . . – Bank overdrafts . . . . . . . . . . . . . . . . . . . . . Borrowings, excluding bank overdrafts: – Current . . . . . . . . . . . . . . . . . . . . . . . . . . . . – Non-current . . . . . . . . . . . . . . . . . . . . . . . . . Net cash/(debt) . . . . . . . . . . . . . . . . . . . . . . . Cash and cash equivalents: – Cash at bank and in hand . . . . . . . . . . . . . . – Bank overdrafts . . . . . . . . . . . . . . . . . . . . . Borrowings, excluding bank overdrafts: – Current . . . . . . . . . . . . . . . . . . . . . . . . . . . . – Non-current . . . . . . . . . . . . . . . . . . . . . . . . . Net cash/(debt) . . . . . . . . . . . . . . . . . . . . . . .	Balance as at 1 January 2009 14.1 97.4 (0.9 ) (3.3 ) 107.3 Balance as at 1 January 2010 6.9 54.6 (0.7) (0.4) — 60.4 Balance as at 1 January 2011 65.7 (1.1) (0.2) (0.4) 64.0 Balance as at 1 January 2011 65.7 (1.1) (0.2) (0.4) 64.0	Foreign exchange adjustments (£m)	Foreign exchange adjustments (£m)	Foreign exchange adjustments (£m)	Foreign exchange adjustments (£m)
		(0.4) (6.8) (7.3) (35.5) 0.1 0.1 (42.2) 0.1 2.8 2.8 (7.5) (39.4) Foreign exchange adjustments Cash flow (£m) 0.3 (7.2) 2.7 8.4 — (0.4) 0.8 — 0.2 — (0.4) (0.2) 3.0 0.6 Foreign exchange adjustments Cash flow — (19.6) — — (19.6) — (0.5) — 0.1 (0.4) — (20.0) Foreign exchange adjustments Cash flow (£m) 0.2 (7.7) — (1.8) (9.5) — 0.1 — 0.1			(6.8) (35.5) 0.1
					(42.2)
					2.8
				2.8 (39.4) Cash flow
					(7.2) 8.4 (0.4)
					0.8
					0.2 (0.4)
				(0.2) 0.6 Cash flow
					(19.6) —
					(19.6)
					(0.5) 0.1
				(0.4) (20.0) Cash flow
					(7.7) (1.8)
					(9.5)
					0.1 0.1
		0.2

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Cash and cash equivalents: – Cash at bank and in hand . . . . . . . . . . . . . . . . . . – Bank overdrafts . . . . . . . . . . . . . . . . . . . . . . . . . Borrowings, excluding bank overdrafts: – Current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – Non-current . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net cash/(debt) . . . . . . . . . . . . . . . . . . . . . . . . . .	Balance as at 1 January 2012 58.2 (2.9) (0.1) (0.3) 54.9	Foreign exchange adjustments Cash flow (£m) (0.9) 14.9 — 1.6 16.5 — (0.2) — 0.1 (0.1) (0.9) 16.4	Balance as at 30 June 2012
			72.2 (1.3) (0.3) (0.2) 70.4

Net cash/(debt) is a measure of Alent’s net indebtedness to banks and other external financial institutions and comprises the total of cash and short-term deposits and current and non-current interest-bearing borrowings.

16 Property, plant and equipment

16.1 Accounting policy

Freehold land is carried at cost less accumulated impairment losses. Other items of property, plant and equipment are carried at cost less accumulated depreciation and accumulated impairment losses. Costs are capitalised only when it is probable that they will result in future economic benefits flowing to Alent and when they can be measured reliably. All other repairs and maintenance expenditure is charged to the Group income statement in the period in which it is incurred.

Freehold land is not depreciated as it has an infinite life. Depreciation on other items of property, plant and equipment begins when the asset is available for use and is therefore not charged on construction in progress. Depreciation is charged to the income statement on a straight-line basis so as to write off the cost less residual value of the asset over its estimated useful life as follows:

Asset category	Estimated useful life
Freehold property . . . . . . . . . . . . . . . . . . . . . . . . . .	between 10 and 50 years
Leasehold property . . . . . . . . . . . . . . . . . . . . . . . . .	the term of the lease
Plant and equipment:
– Motor vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . .	between one and five years
– Information technology equipment . . . . . . . . . . .	between one and five years
– Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	between five and 15 years

The depreciation method used, residual values and estimated useful lives are reviewed and changed, if appropriate, at least at each financial year-end. Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets or, where shorter, over the term of the relevant lease. As described in note 18.1, an asset’s carrying amount is immediately written down to its recoverable amount if its carrying amount is greater than its estimated recoverable amount. Gains and losses arising on disposals are determined by comparing sales proceeds with carrying amount and are recognised in the income statement.

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16.2 Movement in net book value

Cost As at 1 January 2009 . . . . . . . . . . . . . . . . . . . . Exchange adjustments . . . . . . . . . . . . . . . . . . . Capital expenditure additions . . . . . . . . . . . . . Disposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Business disposals . . . . . . . . . . . . . . . . . . . . . . Reclassifications . . . . . . . . . . . . . . . . . . . . . . . As at 31 December 2009 . . . . . . . . . . . . . . . . Exchange adjustments . . . . . . . . . . . . . . . . . . . Capital expenditure additions . . . . . . . . . . . . . Disposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Business disposals . . . . . . . . . . . . . . . . . . . . . . Reclassifications . . . . . . . . . . . . . . . . . . . . . . . As at 31 December 2010 . . . . . . . . . . . . . . . . Exchange adjustments . . . . . . . . . . . . . . . . . . . Capital expenditure additions . . . . . . . . . . . . . Disposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Reclassifications . . . . . . . . . . . . . . . . . . . . . . . As at 30 June 2011 . . . . . . . . . . . . . . . . . . . . . As at 1 January 2011 . . . . . . . . . . . . . . . . . . . . Exchange adjustments . . . . . . . . . . . . . . . . . . . Capital expenditure additions . . . . . . . . . . . . . Disposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Business disposals . . . . . . . . . . . . . . . . . . . . . . Reclassifications . . . . . . . . . . . . . . . . . . . . . . . As at 31 December 2011 . . . . . . . . . . . . . . . . Exchange adjustments . . . . . . . . . . . . . . . . . . . Capital expenditure additions . . . . . . . . . . . . . Business combinations . . . . . . . . . . . . . . . . . . Disposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Reclassifications . . . . . . . . . . . . . . . . . . . . . . . As at 30 June 2012 . . . . . . . . . . . . . . . . . . . . . Accumulated depreciation and impairment losses As at 1 January 2009 . . . . . . . . . . . . . . . . . . . . Exchange adjustments . . . . . . . . . . . . . . . . . . . Depreciation charge . . . . . . . . . . . . . . . . . . . . . Impairment charge . . . . . . . . . . . . . . . . . . . . . . Disposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . As at 31 December 2009 . . . . . . . . . . . . . . . . Exchange adjustments . . . . . . . . . . . . . . . . . . . Depreciation charge . . . . . . . . . . . . . . . . . . . . . Impairment charge . . . . . . . . . . . . . . . . . . . . . . Disposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Business disposals . . . . . . . . . . . . . . . . . . . . . . Reclassifications . . . . . . . . . . . . . . . . . . . . . . . As at 31 December 2010 . . . . . . . . . . . . . . . . Exchange adjustments . . . . . . . . . . . . . . . . . . . Depreciation charge . . . . . . . . . . . . . . . . . . . . . Disposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Reclassifications . . . . . . . . . . . . . . . . . . . . . . . As at 30 June 2011 . . . . . . . . . . . . . . . . . . . . .	Freehold property 57.9 (4.7) 0.7 (0.6) — 0.1 53.4 1.0 0.7 (0.8) — 0.9 55.2 0.1 0.1 — — 55.4 55.2 (0.6) 0.2 (0.1) — 0.2 54.9 (1.2) 5.6 — (3.6) (1.7) 54.0 31.8 (2.7) 1.1 2.5 (0.5) 32.2 0.2 1.1 0.3 (0.5) — 0.3 33.6 — 0.6 (0.1) — 34.1	Leasehold property 20.9 (1.4) 0.8 (0.4) — — 19.9 1.0 0.1 (0.3) (6.5) — 14.2 0.3 — (0.1) 0.1 14.5 14.2 (0.6) 1.2 (0.1) (0.7) 0.2 14.2 (0.1) 0.1 — (0.1) 2.0 16.1 11.8 (0.7) 1.2 — (0.3) 12.0 0.6 0.7 — (0.2) (6.5) (0.5) 6.1 0.1 0.4 (0.1) 0.3 6.8	Plant and equipment (£m) 151.5 (10.5) 2.6 (6.3) (0.1) 1.3 138.5 4.3 4.5 (9.6) (9.8) 0.4 128.3 0.2 1.7 (1.1) 0.9 130.0 128.3 (1.8) 6.0 (3.0) — 2.6 132.1 (2.8) 2.7 — (1.5) 2.2 132.7 113.5 (7.7) 7.0 — (6.0) 106.8 2.2 6.9 — (8.9) (9.6) 0.2 97.6 0.4 3.2 (0.9) (0.3) 100.0	Construction inprogress 6.0 (0.6) 0.7 (0.1) — (1.4) 4.6 0.3 5.7 — — (1.3) 9.3 — 3.5 — (1.0) 11.8 9.3 0.5 8.7 — — (3.0) 15.5 (0.2) 5.4 — — (2.5) 18.2	Total 236.3 (17.2) 4.8 (7.4) (0.1) — 216.4 6.6 11.0 (10.7) (16.3) — 207.0 0.6 5.3 (1.2) — 211.7 207.0 (2.5) 16.1 (3.2) (0.7) — 216.7 (4.3) 13.8 — (5.2) — 221.0 157.1 (11.1) 9.3 2.5 (6.8) 151.0 3.0 8.7 0.3 (9.6) (16.1) — 137.3 0.5 4.2 (1.1) — 140.9

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As at 1 January 2011 . . . . . . . . . . . . . . . . . . . . Exchange adjustments . . . . . . . . . . . . . . . . . . . Depreciation charge . . . . . . . . . . . . . . . . . . . . . Disposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Business disposals . . . . . . . . . . . . . . . . . . . . . . Reclassifications . . . . . . . . . . . . . . . . . . . . . . . As at 31 December 2011 . . . . . . . . . . . . . . . . Exchange adjustments . . . . . . . . . . . . . . . . . . . Depreciation charge . . . . . . . . . . . . . . . . . . . . . Impairment charge . . . . . . . . . . . . . . . . . . . . . . Disposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Reclassifications . . . . . . . . . . . . . . . . . . . . . . . As at 30 June 2012 . . . . . . . . . . . . . . . . . . . . . Net book value As at 1 January 2009 . . . . . . . . . . . . . . . . . . . As at 31 December 2009 . . . . . . . . . . . . . . . . As at 31 December 2010 . . . . . . . . . . . . . . . . As at 30 June 2011 . . . . . . . . . . . . . . . . . . . . . As at 31 December 2011 . . . . . . . . . . . . . . . . As at 30 June 2012 . . . . . . . . . . . . . . . . . . . . .	Freehold property 33.6 — 1.2 — — — 34.8 (1.0) 0.4 — (2.1) (1.5) 30.6 26.1 21.2 21.6 21.3 20.1 23.4	Leasehold property 6.1 (0.4) 0.9 (0.1) (0.4) 0.4 6.5 (0.1) 0.7 — — 1.5 8.6 9.1 7.9 8.1 7.7 7.7 7.5	Plant and equipment (£m) 97.6 (1.7) 6.4 (2.3) — (0.4) 99.6 (1.7) 3.2 — (1.4) — 99.7 38.0 31.7 30.7 30.0 32.5 33.0	Construction inprogress 6.0 4.6 9.3 11.8 15.5 18.2	Total
					137.3 (2.1) 8.5 (2.4) (0.4) —
					140.9 (2.8) 4.3 — (3.5) —
					138.9
					79.2
					65.4
					69.7
					70.8
					75.8
					82.1

The net book value of assets held under finance leases as at 30 June 2012, 30 June 2011, 31 December 2011, 31 December 2010, 31 December 2009 and 1 January 2009 was not material.

17 Intangible assets

The intangible assets held on Alent’s balance sheet comprise goodwill acquired through business combinations.

17.1 Goodwill accounting policy

Goodwill arising in a business combination is initially recognised as an asset at cost, measured as the excess of the aggregate of the acquisition-date fair value of the consideration transferred and the amount of any non-controlling interest acquired over the net of the acquisition-date fair value amounts of the identifiable assets acquired and liabilities assumed. When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss. Goodwill is subsequently measured at cost less accumulated impairment losses, with impairment testing carried out annually, or more frequently when there is an indication that the cash-generating unit to which the goodwill has been allocated may be impaired. On disposal of a business, the attributable amount of goodwill is included in the calculation of the profit or loss on disposal.

17.2 Movement in net book value

Movement in net book value
Cost As at 1 January 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exchange adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Business combinations (note 30) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Business disposals (note 9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . As at 31 December 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exchange adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Business disposals (note 9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . As at 31 December 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exchange adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . As at 30 June 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	Goodwill
		(£m) 309.3 (23.6) 2.9 (0.1) 288.5 13.8 (1.3) 301.0 2.3 303.3

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As at 1 January 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exchange adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . As at 31 December 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exchange adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Business combinations (note 30) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . As at 30 June 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Accumulated impairment losses As at 31 December 2009, 31 December 2010, 31 December 2011, 30 June 2011 and 30 June 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net book value As at 1 January 2009 As at 31 December 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . As at 31 December 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . As at 30 June 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . As at 31 December 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . As at 30 June 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	Goodwill	Goodwill
		(£m) 301.0 (2.2) 298.8 (3.1) 2.8 298.5 — 309.3 288.5 301.0 303.3 298.8 298.5

17.3 Analysis of goodwill by Cash-Generating Unit (“CGU”)

Goodwill acquired in a business combination is allocated to each of Alent’s CGUs expected to benefit from the synergies of the combination. For the purposes of impairment testing, the Directors consider that the Group has two CGUs: the Assembly Materials and Surface Chemistries businesses. These CGUs represent the lowest level within Alent at which goodwill is monitored.

Surface Chemistries . . . . . . . . . . . . . . . . . . . . . . . Assembly Materials . . . . . . . . . . . . . . . . . . . . . . . Total goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . .	FY 2009 227.3 61.2 288.5	FY 2010 233.3 67.7 301.0	FY 2011 (£m) 231.3 67.5 298.8	HY 2011 (unaudited) 234.7 68.6 303.3	HY 2012 230.3 68.2 298.5	HY 2012 230.3 68.2 298.5
						230.3 68.2 298.5

18 Impairment of tangible and intangible assets

18.1 Accounting policy

At each balance sheet date, the Directors review the carrying value of Alent’s tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If such indication exists, the recoverable amount of the asset is estimated in order to determine the extent, if any, of the impairment loss. Where it is not feasible to estimate the recoverable amount of an individual asset, the Directors estimate the recoverable amount of the CGU to which the asset belongs.

Goodwill acquired in a business combination is allocated to each of Alent’s CGUs expected to benefit from the synergies of the combination and the Directors carry out annual impairment testing at each financial year-end of the carrying value of its CGUs, to assess the need for any impairment of the carrying value of goodwill and tangible assets associated with these CGUs.

For the purpose of impairment testing, the recoverable amount of an asset or CGU is the higher of (i) its fair value less costs to sell and (ii) its value in use. If the recoverable amount of a CGU is less than the carrying amount of that CGU, the resulting impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the CGU and then to the other assets of the CGU pro rata on the basis of the carrying amount of each asset in the CGU. An impairment loss recognised for goodwill is not reversed in a subsequent period. An impairment loss recognised in a prior year for an asset other than goodwill may be reversed where there has been a change in the estimates used to

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measure the asset’s recoverable amount since the impairment loss was recognised. The value in use calculations of Alent’s CGUs are based on detailed business plans covering a three year period from the balance sheet date, higher level assumptions covering a further two year period and perpetuity calculations beyond this five-year projection period. The cash flows in the calculations are discounted to their current value using pre-tax discount rates.

18.2 Key assumptions

The key assumptions used in determining value in use are return on sales, return on net sales value, growth rates and discount rates. Return on sales and return on net sales value assumptions are based on historical financial information, adjusted to factor in the anticipated impact of restructuring and rationalisation plans already announced at the balance sheet date.

Growth rates are determined with reference to: current market conditions; external forecasts and historical trends for Alent’s key end-markets of electronics and automotive; and expected growth in output within the industries in which each CGU operates. A perpetuity growth rate of 2.5 per cent. was used at the end of 2011 (FY 2010 and FY 2009: 3 per cent.) based on the long-term growth rates experienced in Alent’s end-markets and external forecasts. Alent’s projections are based on historical trends and external forecasts.

Discount rates are calculated for each CGU, reflecting market assessments of the time value of money and the risks specific to each CGU. The pre-tax discount rate used for the Assembly Materials CGU was 13.8 per cent. for FY 2011 (FY 2010: 12.5 per cent.; FY 2009: 11.5 per cent.) and for the Surface Chemistries CGU was 15.0 per cent. for FY 2011 (FY 2010: 14.1 per cent.; FY 2009: 13.1 per cent.).

18.3 Goodwill impairment

In assessing goodwill for potential impairment as at 31 December 2011, the Directors made use of detailed calculations of the recoverable amount of Alent’s CGUs as at 31 December 2011. Those calculations resulted in recoverable amounts significantly higher than the carrying values of each of Alent’s CGUs and consequently no impairment charges were recognised. As at HY 2012 and HY 2011, the directors did not consider that there were any indicators of impairment in existence which would cause them to need to undertake full impairment testing of the carrying value of Alent’s goodwill.

19 Trade and other receivables

19.1 Accounting policy

Trade and other receivables are initially recognised at fair value and subsequently measured at amortised cost, using the effective interest method, less impairment losses.

19.2 Analysis of trade and other receivables

Trade receivables: – Current . . . . . . . . . . . . . . . . . . . . . . . . . . . – 1 to 30 days past due . . . . . . . . . . . . . . . . – 31 to 60 days past due . . . . . . . . . . . . . . . – 61 to 90 days past due . . . . . . . . . . . . . . . – Over 90 days past due . . . . . . . . . . . . . . . Trade receivables. . . . . . . . . . . . . . . . . . . . Other receivables . . . . . . . . . . . . . . . . . . . . . Prepayments and accrued income . . . . . . . . Total trade and other receivables . . . . . .	31 December 2009 31 Gross Impairment Net Gross (£m) 78.0 (0.2) 77.8 108.7 7.5 (0.3) 7.2 8.3 2.0 (0.2) 1.8 2.0 0.5 (0.1) 0.4 0.8 5.4 (4.0) 1.4 5.3 93.4 (4.8) 88.6 125.1 13.3 5.1 107.0	31 December 2009 31 Gross Impairment Net Gross (£m) 78.0 (0.2) 77.8 108.7 7.5 (0.3) 7.2 8.3 2.0 (0.2) 1.8 2.0 0.5 (0.1) 0.4 0.8 5.4 (4.0) 1.4 5.3 93.4 (4.8) 88.6 125.1 13.3 5.1 107.0	31	December 2010	December 2010
	Gross 78.0 7.5 2.0 0.5 5.4 93.4	Impairment (0.2) (0.3) (0.2) (0.1) (4.0) (4.8)		Impairment (0.7) (0.2) (0.3) (0.2) (4.5) (5.9)	Net
					108.0 8.1 1.7 0.6 0.8
					119.2 15.9 4.4
					139.5

95

Trade receivables: – Current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – 1 to 30 days past due . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – 31 to 60 days past due . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – 61 to 90 days past due . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – Over 90 days past due . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Trade receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Prepayments and accrued income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total trade and other receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	31	December 2011	December 2011
	Gross 107.9 8.8 1.8 0.8 5.2 124.5	Impairment (£m) (0.2) (0.3) (0.5) (0.2) (3.0) (4.2)	Net
			107.7 8.5 1.3 0.6 2.2
			120.3
			17.9 7.4
			145.6

Trade receivables: – Current . . . . . . . . . . . . . . . . . . . . . . . . . . . – 1 to 30 days past due . . . . . . . . . . . . . . . . – 31 to 60 days past due . . . . . . . . . . . . . . . – 61 to 90 days past due . . . . . . . . . . . . . . . – Over 90 days past due . . . . . . . . . . . . . . . Trade receivables . . . . . . . . . . . . . . . . . . . . Other receivables . . . . . . . . . . . . . . . . . . . . Prepayments and accrued income . . . . . . . Total trade and other receivables . . . . . .		30 June 2011	Net Gross (£m) 124.4 108.4 10.9 9.4 1.2 2.2 — 1.2 1.7 4.3 138.2 125.5 19.4 13.0 170.6		30 June 2012
	Gross 125.9 11.6 1.6 0.1 5.2 144.4	Impairment (1.5) (0.7) (0.4) (0.1) (3.5) (6.2)			Impairment (1.0) (0.2) (0.4) (0.2) (2.2) (4.0)	Net
						107.4 9.2 1.8 1.0 2.1
						121.5 16.6 7.7
						145.8

All of Alent’s operating companies have policies and procedures in place to assess the creditworthiness of the customers with whom they do business. Where objective evidence exists that a trade receivable balance may be impaired, provision is made for the difference between its carrying amount and the present value of the estimated cash that will be recovered. Evidence of impairment may include such factors as the customer being in breach of contract, or entering bankruptcy or financial reorganisation proceedings. Impairment provisions are assessed on an individual customer basis for all significant outstanding balances and collectively for all remaining balances, based upon historical loss experience. Historical experience has shown that Alent’s trade receivable provisions are maintained at levels that are sufficient to absorb actual bad debt write-offs, without being excessive.

19.3 Movements on impairment provisions

As at start of period . . . . . . . . . . . . . . . . . . . . . . . . Exchange adjustments . . . . . . . . . . . . . . . . . . . . . . Charge for the year . . . . . . . . . . . . . . . . . . . . . . . . Receivables written-off . . . . . . . . . . . . . . . . . . . . . Unused amounts reversed . . . . . . . . . . . . . . . . . . . As at end of period . . . . . . . . . . . . . . . . . . . . . . .	FY 2009 3.6 (0.2) 1.7 (0.1) (0.2) 4.8	FY 2010 4.8 0.1 2.4 (1.1) (0.3) 5.9	FY 2011 (£m) 5.9 (0.1) 0.7 (1.1) (1.2) 4.2	HY 2011 (unaudited) 5.9 0.1 0.6 (0.3) (0.1) 6.2	HY 2012
					4.2 (0.1) 0.5 (0.5) (0.1) 4.0

Impairment charges, write-offs and the reversal of unused amounts shown in the table above are charged or credited as appropriate within administration, selling and distribution costs in the income statement. Of the total provision for impairment of trade receivables at 30 June 2012 of £4.0 million (HY 2011: £6.2 million; FY 2011: £4.2 million; FY 2010: £5.9 million; FY 2009: £4.8 million) shown in the table above, £4.0 million (HY 2011: £6.1 million; FY 2011: £4.2 million; FY 2010: £5.2 million; FY 2009: £4.8 million) related to balances that were impaired on an individual basis. The ageing analysis of these individually impaired balances is shown in the table below.

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Ageing analysis of individually impaired trade receivable balances: – Current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – 1 to 30 days past due . . . . . . . . . . . . . . . . . . . . . – 31 to 60 days past due . . . . . . . . . . . . . . . . . . . . – 61 to 90 days past due . . . . . . . . . . . . . . . . . . . . – Over 90 days past due . . . . . . . . . . . . . . . . . . . . Total individually impaired trade receivable balances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	FY 2009 0.2 0.3 0.2 0.1 4.0 4.8	FY 2010 0.7 0.2 0.3 0.2 3.8 5.2	FY 2011 (£m) 0.2 0.3 0.5 0.2 3.0 4.2	HY 2011 (unaudited) 1.5 0.7 0.4 0.1 3.4 6.1	HY 2012
					1.0 0.2 0.4 0.2 2.2 4.0

Due to the large number of customers that Alent transacts its business with, none of which represent a significant proportion of the total outstanding trade receivables balance, Alent is not exposed to any significant concentration of credit risk. There is no significant difference between the fair value of Alent’s trade and other receivable balances and the amount at which they are reported in the balance sheet.

20 Inventories

20.1 Accounting policy

Inventories are stated at the lower of cost (using the first in, first out method) and net realisable value. Cost comprises expenditure incurred in purchasing or manufacturing inventories together with all other costs directly incurred in bringing the inventory to its present location and condition and, where appropriate, attributable production overheads based on normal activity levels. Net realisable value represents the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution. The amount of any write-down of inventories to net realisable value is recognised as an expense in the period in which the write-down occurs.

20.2 Analysis of inventories

Raw materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . Work-in-progress . . . . . . . . . . . . . . . . . . . . . . . . . Finished goods . . . . . . . . . . . . . . . . . . . . . . . . . . . Total inventories . . . . . . . . . . . . . . . . . . . . . . . . .	FY 2009 12.0 6.0 20.0 38.0	FY 2010 15.9 10.9 22.9 49.7	FY 2011 (£m) 13.6 12.1 24.3 50.0	HY 2011 (unaudited) 14.4 14.4 28.9 57.7	HY 2012
					14.5 9.9 28.1 52.5

The cost of inventories recognised as an expense and included in cost of sales in the income statement during the first half of 2012 was £208.7 million (HY 2011: £263.7 million; FY 2011: £505.0 million; FY 2010: £426.0 million; FY 2009: £297.6 million).

As at 30 June 2012, in addition to the inventory recorded in the balance sheet, Alent held £11.8 million (HY 2011: £18.0 million; FY 2011: £10.6 million; FY 2010: £12.0 million; FY2009: £8.4 million) of precious metals on consignment terms and £0.7 million (HY 2011: £1.0 million; FY 2011: £0.2 million; FY 2010: £nil; FY2009: £nil) of precious metals held on behalf of customers for processing. Alent has entered into various precious metal consignment arrangements with precious metals consigning entities (the “Consignors”). The metal which Alent uses in the manufacture of its finished products for customers may be purchased from a Consignor and sold concurrently to the customer as of the same metals valuation date. In addition, customers may supply metal which will be toll manufactured by Alent. In the latter case, Alent will only invoice customers for value-added fabrication services. As the Consignors retain title and associated risks and rewards of ownership under these arrangements, the value of the physical metal so held is not recognised in the balance sheet. Consequently, the obligations in respect of the consigned metal are not recognised as a liability in the balance sheet.

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21 Derivative financial instruments

As stated in the Basis of Preparation note 2.2, for the purposes of this historical financial information, all of the borrowings of Cookson (including the US Private Placement loan notes and the Cookson syndicated bank facility) have been reported in the historical financial information for Vesuvius. Alent has established policies for managing the financial risks to which its worldwide activities are exposed, including the market risk resulting from fluctuations in exchange rates and interest rates; and liquidity risk, being the risk that Alent has insufficient debt facilities to finance its operational cash flow requirements and any maturing financial liabilities. In hedging these risks, Cookson uses derivative financial instruments, including forward foreign exchange contracts and interest rate swaps. As the Cookson borrowings are reported in the historical financial information for Vesuvius, any hedging activity relating to those borrowings is similarly reported within the financial statements of Vesuvius. The only derivative activity reported in the Alent historical financial statements relates to the hedging of material transactional foreign exchange exposures by Alent subsidiaries.

21.1 Accounting policy

Under the basis of preparation of this historical financial information, as summarised in note 2.2, the Cookson Group plc borrowings are reported in the historical financial information for Vesuvius. Accordingly, to the extent that Cookson Group used derivative financial instruments (“derivatives”) in relation to the management of its net debt balances, these derivatives are also reported in Vesuvius historical financial information.

Notwithstanding the above, Alent uses derivatives in the form of forward foreign currency contracts and forward commodity contracts to manage the effects of its transactional exposure to foreign currency exchange risk and commodity price risk. Alent’s use of derivatives to manage such risks is detailed in note 24.

Derivatives are measured at fair value. The fair value of forward foreign currency contracts and forward commodity contracts is calculated using market prices at the balance sheet date.

The method of recognising the gain or loss on remeasurement to fair value depends on whether the derivative is designated as a hedging instrument for hedge accounting purposes and, if so, the nature of the item being hedged. Strict conditions have to be satisfied in order to qualify for hedge accounting, including a determination both at inception of the hedge and on an ongoing basis that the hedge is expected to be highly effective in achieving offsetting changes in fair values or cash flows attributable to the hedged risk. The change in fair value of a derivative that is not designated as a hedging instrument for hedge accounting purposes is recognised within trading profit in the Alent income statement. Wherever possible, Alent avoids the administrative burden of hedge accounting, and does not designate a derivative as a hedge when, in the absence of hedge accounting, the change in fair value of the hedged item is itself recognised within trading profit in the income statement in the same period as the change in fair value of the derivative. No derivatives are held for speculative purposes.

Cash flow hedges

The effective part of any gain or loss on a derivative that is designated as a cash flow hedge is recognised in other comprehensive income and presented in the statement of changes in invested capital. The ineffective part of any gain or loss is recognised immediately within trading profit. When the transaction that was being hedged is realised and affects profit or loss, the cumulative gain or loss on the derivative is removed from the hedging reserve and recognised in the income statement in the same period.

Fair value hedges

The change in fair value of a derivative that is designated as a fair value hedge is recognised within trading profit in the income statement. The carrying amount of the hedged item is adjusted by the change in its fair value that is attributable to the hedged risk and this adjustment is recognised within trading profit in the income statement.

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21.2 Analysis of derivative financial instruments

Cash flow hedges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Fair value hedges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total derivative financial instruments . . . . . . . . . . . . . . . . . . Cash flow hedges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Fair value hedges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total derivative financial instruments . . . . . . . . . . . . . . . . . . . Cash flow hedges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Fair value hedges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total derivative financial instruments . . . . . . . . . . . . . . . . . .	31 December 2009 31 December 2010 Assets Liabilities Assets Liabilities (£m) — — — — 0.2 (0.4) 2.4 (2.6) 0.2 (0.4) 2.4 (2.6) 31 December 2011 Assets Liabilities (£m) . . . . . . . . . . . . . . — (1.6) . . . . . . . . . . . . . . 2.5 (0.1) . . . . . . . . . . . . . . 2.5 (1.7) 30 June 2011 30 June 2012 Assets Liabilities Assets Liabilities (£m) — — — (2.2) 1.6 — 2.0 (0.2) 1.6 — 2.0 (2.4)	31 December 2010	31 December 2010
			Liabilities
		Assets Liabilities (£m) — (1.6) 2.5 (0.1) 2.5 (1.7) 30 June 2012	Liabilities
	Assets — 1.6 1.6		Liabilities
			(2.2) (0.2) (2.4)

All of the fair values shown in the table above have been calculated using quoted prices from active markets. Cash flows in respect of the cash flow hedges shown in the table above will all occur within 12 months of the underlying contracts.

(a) Cash flow hedges

Cash flow hedges in the table above include: forward foreign currency contracts used to hedge the currency risk in forecast sales or purchases; and forward metal purchase contracts used to hedge the cash flow risk relating to future sales arising from fluctuation in commodity metals prices.

(b) Fair value hedges

Fair value hedges in the table above comprise forward foreign currency contracts used to hedge the currency risk in payables and receivables and forward metal sales contracts used to hedge the fair value risk relating to the balance sheet value of inventory arising from fluctuation in commodity metals prices.

22 Assets and liabilities held for sale

Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Trade and other receivables . . . . . . . . . . . . . . . . . . . . . . Total assets held for sale. . . . . . . . . . . . . . . . . . . . . . . . Trade and other payables . . . . . . . . . . . . . . . . . . . . . . . . Net assets held for sale . . . . . . . . . . . . . . . . . . . . . . . . .	FY 2009 0.8 1.2 1.2 3.2 (1.4) 1.8	FY 2010 — — — — — —	FY 2011 (£m) — — — — — —	HY 2011 (unaudited) — — — — — —	HY 2012
					— — — — — —

As at 31 December 2009, the Singapore operations of Alent’s semiconductor packaging operations, which manufactured epoxy-mould compounds for encapsulating semiconductors, were in the process of being disposed of and were classified as held for sale.

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23 Capital management

The capital of Alent is equal to the cumulative investment in Alent companies.

As stated in the Basis of Preparation note 2.2, for the purposes of this historical financial information, substantially all of the borrowings of Cookson Group plc have been reported in the historical financial information for Vesuvius. Alent has established policies for managing the financial risks to which its activities are exposed, including the market risk resulting from fluctuations in exchange rates and interest rates; and liquidity risk, being the risk that Alent has insufficient debt facilities to finance its operational cash flow requirements and any maturing financial liabilities. In hedging these risks, Cookson uses derivative financial instruments, including forward foreign exchange contracts and interest rate swaps. As the Cookson Group plc borrowings are reported in the historical financial information for Vesuvius, any hedging activity relating to those borrowings is similarly reported within the financial statements of Vesuvius. The only derivative activity reported in the Alent historical financial statements relates to the hedging of material transactional foreign exchange exposures by Alent subsidiaries.

Alent monitors its capital using a number of key performance indicators, including free cash flow, average working capital to sales ratios, net debt to EBITDA ratios, interest cover ratios, RONA and ROI (note 4). Alent’s objectives when managing its capital are:

• to ensure that the Company and all of its businesses are able to operate as going concerns and ensure that Alent operates within the financial covenants contained within its debt facilities;

• to maximise shareholder value through maintaining an appropriate balance between Alent’s equity and net debt;

• to have available the necessary financial resources to allow Alent to invest in areas that may deliver acceptable future returns to investors; and

• to maintain sufficient financial resources to mitigate against risks and unforeseen events.

As stated above, substantially all of the Cookson borrowings facilities are reported in the historical financial information for Vesuvius. Accordingly, an assessment of the performance of Alent against the covenants within the Cookson Group debt facilities (net debt to EBITDA ratio and interest cover ratio) is neither meaningful or appropriate based on this historical financial information.

24 Financial risk management

24.1 Accounting policy

• (a) Non-derivative financial instruments

Loans and borrowings are initially recognised at fair value plus directly attributable transaction costs. After initial recognition they are measured at amortised cost, using the effective interest method.

(b) Foreign currencies

The individual financial statements of each Alent entity are prepared in their functional currency, which is the currency of the primary economic environment in which that entity operates. For the purpose of the consolidated financial statements, the results and financial position of each entity are translated into pounds sterling, which is the presentational currency of Alent.

Reporting foreign currency transactions in functional currency

Transactions in currencies other than the entity’s functional currency (foreign currencies) are initially recorded at the rates of exchange prevailing on the dates of the transactions. At each subsequent balance sheet date:

• (i) Foreign currency monetary items are re-translated at the rates prevailing at the balance sheet date. Exchange differences arising on the settlement or re-translation of monetary items are recognised in the income statement; and

• (ii) Non-monetary items measured at historical cost in a foreign currency are not re-translated.

100

Translation from functional currency to presentational currency

When the functional currency of an Alent entity is different from Alent’s presentational currency (pounds sterling), its results and financial position are translated into the presentational currency as follows:

• (i) Assets and liabilities are translated using exchange rates prevailing at the balance sheet date;

• (ii) Income and expense items are translated at average exchange rates for the year, except where the use of such average rates does not approximate the exchange rate at the date of a specific transaction, in which case the transaction rate is used; and

• (iii) All resulting exchange differences are recognised in other comprehensive income and presented within changes in invested capital and are re-classified to profit or loss in the period in which the foreign operation is disposed.

Net investment in foreign operations

Exchange differences arising on a monetary item that forms part of a reporting entity’s net investment in a foreign operation are initially recognised in other comprehensive income and presented within changes in invested capital and re-classified to profit or loss on disposal of the net investment.

24.2 Financial risk factors

Alent’s treasury department, acting in accordance with policies approved by the Board, is principally responsible for managing the financial risks faced by Alent. Alent’s activities expose it to a variety of financial risks, the most significant of which are market risk and liquidity risk.

(a) Market risk

Market risk is the risk that either the fair values or the cash flows of Alent’s financial instruments may fluctuate because of changes in market prices. Alent is principally exposed to market risk through fluctuations in exchange rates (“currency risk”) and interest rates (“interest rate risk”).

Currency risk

Alent is exposed to currency risk on its borrowings and financial assets (being cash and short-term deposits) that are denominated in currencies other than pounds sterling.

The currency profile of Alent’s borrowings and financial assets is shown in the table below. During the financial periods reported below, there were no forward foreign exchange contracts taken out in respect of the borrowings or financial assets.

Chinese renminbi . . . . . . . Euro . . . . . . . . . . . . . . . . . Sterling . . . . . . . . . . . . . . . United States dollar . . . . . Japanese yen . . . . . . . . . . . Other . . . . . . . . . . . . . . . . As at 31 December . . . . .	FY 2009	FY 2009	FY 2010 Net financial assets Borrowings Financial assets (£m) 23.9 — 24.0 11.8 (0.3) 19.1 — (0.2) 6.1 0.2 (0.3) 0.8 0.5 (0.6) 0.7 24.0 (0.3) 15.0 60.4 (1.7) 65.7	FY 2010	FY 2010
	Borrowings — (0.3) — (0.5) (0.2) (0.1) (1.1)	Financial assets 23.9 12.1 — 0.7 0.7 24.1 61.5			Financial assets 24.0 19.1 6.1 0.8 0.7 15.0 65.7	Net financial assets
						24.0 18.8 5.9 0.5 0.1 14.7 64.0

101

Chinese renminbi . . . . . . . . . . . . . . . . . . . . . . . . . . Euro . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sterling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States dollar . . . . . . . . . . . . . . . . . . . . . . . . Japanese yen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . As at 31 December . . . . . . . . . . . . . . . . . . . . . . . .		FY 2011
	Borrowings — (0.8) (1.6) (0.3) (0.5) (0.1) (3.3)	Financial assets (£m) 24.7 8.1 — 0.2 0.7 24.5 58.2	Net financial assets
			24.7 7.3 (1.6) (0.1) 0.2 24.4 54.9

Chinese renminbi . . . . . . . Euro . . . . . . . . . . . . . . . . . Sterling . . . . . . . . . . . . . . . United States dollar . . . . . Japanese yen . . . . . . . . . . . Other . . . . . . . . . . . . . . . . As at 30 June. . . . . . . . . .	HY 2011	HY 2011	HY 2012 Net financial assets Borrowings Financial assets (£m) 15.5 — 46.0 2.3 (0.3) 5.6 0.3 (0.1) 0.8 2.1 (0.5) 1.4 0.1 (0.7) 0.8 24.3 (0.2) 17.6 44.0 (1.8) 72.2	HY 2012	HY 2012
	Borrowings — (0.1) (0.3) (0.6) (0.4) (0.7) (2.1)	Financial assets 15.5 2.4 — 2.7 0.5 25.0 46.1			Financial assets 46.0 5.6 0.8 1.4 0.8 17.6 72.2	Net financial assets
						46.0 5.3 0.7 0.9 0.1 17.4 70.4

Based upon the currency profile shown in the table above, while not impacting reported profit, the change in net financial assets arising from a 10 per cent. strengthening of sterling would reduce reported invested capital by £6.3 million in the first half of 2012 (HY 2011: £4.0 million; FY 2011: £5.1 million, FY 2010: £5.3 million, FY 2009: £5.5 million) and a corresponding 10 per cent. weakening of sterling would increase invested capital by £7.7 million (HY 2011: £4.9 million; FY 2011: £6.3 million, FY 2010: £6.5 million, FY 2009: £6.7 million).

The tables below show the net unhedged monetary assets and liabilities of Alent companies that are not denominated in their functional currency and which could give rise to exchange gains and losses in the income statement.

Functional currency Sterling . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States dollar . . . . . . . . . . . . . . . . . . Chinese renminbi . . . . . . . . . . . . . . . . . . . . Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . As at 31 December 2009 . . . . . . . . . . . . . . Functional currency Sterling . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States dollar . . . . . . . . . . . . . . . . . . Euro . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Chinese renminbi . . . . . . . . . . . . . . . . . . . . Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . As at 31 December 2010 . . . . . . . . . . . . . .	Net	unhedged monetary assets/(liabilities)	unhedged monetary assets/(liabilities)
	Sterling — — — — — Net	US dollar Euro Renminbi Other Total (£m) 0.2 1.5 — — 1.7 — — — 1.6 1.6 2.0 — — — 2.0 5.6 (0.2) — (0.3) 5.1 7.8 1.3 — 1.3 10.4 unhedged monetary assets/(liabilities)
	Sterling — — (0.4) — — (0.4)	US dollar Euro Renminbi (£m) — (1.1) — — — — 0.2 — — 1.4 — — 4.5 (0.2) 6.7 6.1 (1.3) 6.7	Other Total — (1.1) 2.2 2.2 — (0.2) (4.4) (3.0) (0.2) 10.8 (2.4) 8.7

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Functional currency Sterling . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States dollar . . . . . . . . . . . . . . . . . . Euro . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Chinese renminbi . . . . . . . . . . . . . . . . . . . . Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . As at 31 December 2011 . . . . . . . . . . . . . . Functional currency Sterling . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States dollar . . . . . . . . . . . . . . . . . . Euro . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Chinese renminbi . . . . . . . . . . . . . . . . . . . . Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . As at 30 June 2011 . . . . . . . . . . . . . . . . . . Functional currency Sterling . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States dollar . . . . . . . . . . . . . . . . . . Euro . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Chinese renminbi . . . . . . . . . . . . . . . . . . . . Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . As at 30 June 2012 . . . . . . . . . . . . . . . . . .	Net	unhedged monetary assets/(liabilities)	unhedged monetary assets/(liabilities)
	Sterling — — — — — — Net	US dollar Euro Renminbi Other Total (£m) — 0.1 — — 0.1 — (0.5) — 4.1 3.6 0.2 — — — 0.2 3.3 — — — 3.3 6.0 (0.7) 6.8 (0.3) 11.8 9.5 (1.1) 6.8 3.8 19.0 unhedged monetary assets/(liabilities)
	Sterling — — (0.5) — — (0.5) Net	US dollar Euro Renminbi Other Total (£m) (0.2) (2.3) — — (2.5) — (0.3) — 6.6 6.3 — — — — (0.5) 5.8 — — (0.7) 5.1 12.4 0.4 6.5 — 19.3 18.0 (2.2) 6.5 5.9 27.7 unhedged monetary assets/(liabilities)
	Sterling — — (0.2) — — (0.2)	US dollar Euro Renminbi (£m) — — — — — 0.3 0.7 — — 4.8 — — 3.6 (0.3) — 9.1 (0.3) 0.3	Other Total — — 4.6 4.9 — 0.5 — 4.8 (0.5) 2.8 4.1 13.0

Interest rate risk

Alent’s interest rate risk principally arises in relation to its net financial assets, which comprise cash and cash deposits.

The interest rate profile of Alent’s borrowings (financial liabilities) and net financial assets is detailed in the tables below.

Chinese renminbi . . . . . . . Euro . . . . . . . . . . . . . . . . . Sterling . . . . . . . . . . . . . . . United States dollar . . . . . Japanese yen . . . . . . . . . . . Other . . . . . . . . . . . . . . . . . As at 31 December . . . . .	31 December 2009 31 December 2010 Floating rate borrowings Financial assets Net financial assets Floating rate borrowings Financial assets Net financial assets (£m) — 23.9 23.9 — 24.0 24.0 (0.3) 12.1 11.8 (0.3) 19.1 18.8 — — — (0.2) 6.1 5.9 (0.5) 0.7 0.2 (0.3) 0.8 0.5 (0.2) 0.7 0.5 (0.6) 0.7 0.1 (0.1) 24.1 24.0 (0.3) 15.0 14.7 (1.1) 61.5 60.4 (1.7) 65.7 64.0	31 December 2009 31 December 2010 Floating rate borrowings Financial assets Net financial assets Floating rate borrowings Financial assets Net financial assets (£m) — 23.9 23.9 — 24.0 24.0 (0.3) 12.1 11.8 (0.3) 19.1 18.8 — — — (0.2) 6.1 5.9 (0.5) 0.7 0.2 (0.3) 0.8 0.5 (0.2) 0.7 0.5 (0.6) 0.7 0.1 (0.1) 24.1 24.0 (0.3) 15.0 14.7 (1.1) 61.5 60.4 (1.7) 65.7 64.0	31 December 2010	31 December 2010	31 December 2010
	Floating rate borrowings — (0.3) — (0.5) (0.2) (0.1) (1.1)	Financial assets 23.9 12.1 — 0.7 0.7 24.1 61.5		Financial assets 24.0 19.1 6.1 0.8 0.7 15.0 65.7	Net financial assets
					24.0 18.8 5.9 0.5 0.1 14.7 64.0

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Chinese renminbi . . . . . . Euro . . . . . . . . . . . . . . . . Sterling . . . . . . . . . . . . . . United States dollar . . . . Japanese yen . . . . . . . . . . Other . . . . . . . . . . . . . . . . As at 31 December . . . . Chinese renminbi . . . . Euro . . . . . . . . . . . . . . . Sterling . . . . . . . . . . . . United States dollar . . . Japanese yen . . . . . . . . Other . . . . . . . . . . . . . . As at 30 June . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 June 2011	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 June 2011	31 December 2011	31 December 2011	31 December 2011	31 December 2011	31 December 2011	31 December 2011
					Financial assets Net financial assets/(debt) (£m) 24.7 24.7 8.1 7.3 — (1.6) 0.2 (0.1) 0.7 0.2 24.5 24.4 58.2 54.9 30 June 2012		Net financial assets/(debt)
								24.7 7.3 (1.6) (0.1) 0.2 24.4 54.9
	Floating rate borrowings — (0.1) (0.3) (0.6) (0.4) (0.7) (2.1)	Financial assets 15.5 2.4 — 2.7 0.5 25.0 46.1		Floating rate borrowings — (0.3) (0.1) (0.5) (0.7) (0.2) (1.8)		Financial assets 46.0 5.6 0.8 1.4 0.8 17.6 72.2		Net financial assets
								46.0 5.3 0.7 0.9 0.1 17.4 70.4

The floating rate financial liabilities shown in the tables above bear interest at various rates. The financial assets attract floating rate interest at various rates.

Based upon the interest rate profile of Alent’s financial assets and liabilities shown in the tables above, a 100 basis point increase in market interest rates would decrease both the net finance costs charged in the income statement and the net interest paid in the statement of cash flows by £0.4 million in the first half of 2012 (HY 2011: £0.2 million; FY 2011: £0.5 million; FY 2010: £0.6 million; FY 2009: £0.6 million) and a 100 basis point reduction in market interest rates would increase both the net finance costs charged in the income statement and the net interest paid in the statement of cash flows by £0.4 million in the first half of 2012 (HY 2011: £0.2 million; FY 2011: £0.5 million; FY 2010: £0.6 million; FY 2009: £0.6 million).

(b)

Liquidity risk

Liquidity risk is the risk that Alent might have difficulties in meeting its financial obligations. Alent manages this risk by ensuring that it maintains sufficient levels of committed borrowing facilities and cash and cash equivalents to ensure that it can meet its operational cash flow requirements and any maturing financial liabilities, while at all times operating within its financial covenants. As stated above, under the basis of preparation of this historical financial information, as summarised in note 2.1, substantially all of Cookson Group plc’s borrowings are included in the historical financial information for Vesuvius. Such a net debt profile would not have been applicable had the operations been independent during the Reporting Period and are not representative of the future position of Alent, which will establish similar policies and controls over its management of the liquidity risk affecting its operations as operates within Cookson Group.

The maturity analysis of Alent’s gross borrowings is shown in the tables below.

Obligations under finance leases . . . . . . Total interest-bearing borrowings . . .			Non-current	Non-current
	FY 2009 — —	FY 2010 0.4 0.4	FY 2011 (£m) 0.3 0.3	HY 2011 (unaudited) 0.3 0.3	HY 2012
					0.2 0.2

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Loans and overdrafts . . . . . . . . . . . . . . . . . Obligations under finance leases . . . . . . . Total interest-bearing borrowings . . . . Loans and overdrafts . . . . . . . . . . . . . . . . . Obligations under finance leases . . . . . . . Total interest-bearing borrowings . . . . Interest-bearing borrowings repayable: – On demand or within one year . . . . . . . . – In the second year . . . . . . . . . . . . . . . . . – In the third year . . . . . . . . . . . . . . . . . . . Total interest-bearing borrowings . . . .			Current
	FY 2009 0.8 0.3 1.1	FY 2010 1.3 — 1.3	FY 2011 (£m) 2.9 0.1 3.0 Total	HY 2011 (unaudited) 1.7 0.1 1.8	HY 2012
					1.3 0.3 1.6
	FY 2009 0.8 0.3 1.1 FY 2009 1.1 — — 1.1	FY 2010 1.3 0.4 1.7 FY 2010 1.3 0.3 0.1 1.7	FY 2011 (£m) 2.9 0.4 3.3 FY 2011 (£m) 3.0 0.2 0.1 3.3	HY 2011 (unaudited) 1.7 0.4 2.1 HY 2011 (unaudited) 1.8 0.2 0.1 2.1	HY 2012
					1.3 0.5 1.8 HY 2012
					1.6 0.1 0.1 1.8

25 Employee benefits

25.1 Accounting policy

The net surplus or net liability recognised in the Group balance sheet for Alent’s defined benefit plans is the present value of the defined benefit obligation at the balance sheet date as adjusted for unrecognised past service costs, less the fair value of the plan assets. The defined benefit obligation is calculated by independent actuaries using the projected unit credit method and by discounting the estimated future cash flows using interest rates on high quality corporate bonds that have terms to maturity approximating the terms of the related pension liability. Any asset recognised in respect of a surplus arising from this calculation is limited to the sum of unrecognised past service costs plus the present value of available refunds and reductions in future contributions to the plan.

The expense for Alent’s defined benefits plans is recognised in the income statement as shown in note 25.7. Actuarial gains and losses arising on the assets and liabilities of the plans are reported within the statement of comprehensive income; and gains and losses arising on settlements and curtailments are recognised in the income statement in the same line as the item that gave rise to the settlement or curtailment or, if material, separately reported as a component of profit from operations.

25.2 Group post-retirement plans

Alent operates a number of pension plans around the world, both of the defined benefit and defined contribution type, and accounts for them in accordance with IAS 19.

(a) Defined benefit pension plans

Alent’s principal defined benefit pension plans are in the US. The assets of these plans are held separately from Alent in trustee-administered funds. The trustees are required to act in the best interests of the plans’ beneficiaries. Alent also has defined benefit pension plans in other territories but these are not individually material in relation to Alent as a whole.

Alent’s defined benefit plans in the US provide retirement benefits based on final salary or a fixed benefit. Alent’s US defined benefit plans are closed to new members and also to future benefit accrual for existing members. Actuarial valuations of the US defined benefit

105

pension plans are carried out every year and the last full valuation was carried out as at 31 December 2011. At that date the market value of the plan assets was £42.8 million, representing a funding level of 73 per cent. of accrued plan benefits at that date (using the projected unit method of valuation) of £58.9 million. Funding levels for Alent’s US defined benefit pension plans are normally based upon annual valuations carried out by independent qualified actuaries and are governed by US government regulations.

(b) Defined contribution pension plans

The total expense for Alent’s defined contribution plans in the income statement amounted to £2.7 million in the first half of 2012 (HY 2011: £2.3 million; FY 2011: £5.3 million; FY 2010: £5.0 million; FY 2009: £4.2 million) and represents the contributions payable for the period to the plans.

25.3 Post-retirement liability – valuation and risk mitigation

The assumptions used in calculating the costs and obligations of Alent’s defined benefit pension plans, as detailed below, are set by the Directors after consultation with independent professionally qualified actuaries.

(a) Mortality assumptions

The mortality assumptions used in the actuarial valuations of Alent’s US defined benefit pension liabilities are summarised in the table below and have been selected to reflect the characteristics and experience of the membership of those plans. The assumptions used have been based on the standard RP2000CH mortality tables, projected 64 years for non-pensioners and 33 years for pensioners using projection scale AA.

Life expectancy of US pensionplan members Age to which current pensioners are expected to live: – Men . . . . . . . . . . . . . . . . . . . . . . . . . . . – Women . . . . . . . . . . . . . . . . . . . . . . . . . Age to which future pensioners are expected to live: – Men . . . . . . . . . . . . . . . . . . . . . . . . . . . – Women . . . . . . . . . . . . . . . . . . . . . . . . .	FY 2009 84.6 86.9 86.6 89.1	FY 2010 84.6 86.9 86.6 89.1	FY 2011 (years) 84.6 86.9 86.6 89.1	HY 2011 (unaudited) 84.6 86.9 86.6 89.1	HY 2012
					84.6 86.9 86.6 89.1

(b) Other principal actuarial valuation assumptions

Discount rate . . . . . . . . . . . . . . . . . . . . . . Expected asset return: – Equities . . . . . . . . . . . . . . . . . . . . . . . . – Bonds . . . . . . . . . . . . . . . . . . . . . . . . . .			US
	FY 2009 6.00 8.70 4.80	FY 2010 FY 2011 HY 2011 (unaudited) (per cent. p.a.) 5.25 4.25 5.35 8.80 7.80 8.80 5.40 4.00 5.40			HY 2012
					3.80 7.80 4.00

The discount rate used to determine the liabilities of the US plans for IAS 19 accounting purposes is required to be determined by reference to market yields on high quality corporate bonds. The US discount rate in the above table is based on the annualised yield on the iBoxx over 15 year AA-rated US domestic corporate bond index.

The expected asset return is the Company’s expectation at the valuation date of long-term asset returns: based on the “risk-free” yield available by following a buy and hold investment strategy in government bonds; with returns for other bonds and equities estimated based on observed historic long-term strategic risk premia. These assumptions do not take account of the relative valuation of markets or of market momentum.

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(c) Sensitivity analysis of the impact of changes in key IAS 19 actuarial assumptions

The following table analyses, for Alent’s US pension plans, the theoretical estimated impact on plan liabilities resulting from changes to key actuarial assumptions used for IAS 19 valuation purposes, whilst holding all other assumptions constant.

Assumption Discount rate . . . . . . . . . . . . . Mortality . . . . . . . . . . . . . . . .	Change in assumption Increase/decrease by 0.1% Increase by one year	Impact on USplan liabilities Decrease/increase by 1.3% Increase by 3.5%

25.4 Defined benefit obligation

The liabilities of Alent’s defined benefits pension and other post-retirement plans for IAS 19 accounting purposes are measured by discounting the best estimate of the future cash flows to be paid out by the plans using the projected unit method, in which the calculation of plan liabilities makes allowance, where appropriate, for projected increases in benefit-related earnings.

Present value as at 1 January 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exchange differences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Current service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Actuarial (gains)/losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Contributions from members . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Present value as at 31 December 2009 . . . . . . . . . . . . . . . . . . . . . . . Exchange differences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Current service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Curtailments and settlements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Actuarial losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Present value as at 31 December 2010 . . . . . . . . . . . . . . . . . . . . . . . Exchange differences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Current service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Actuarial losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Contributions from members . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Present value as at 30 June 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . Present value as at 1 January 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exchange differences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Current service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Settlements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Actuarial losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Contributions from members . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Present value as at 31 December 2011 . . . . . . . . . . . . . . . . . . . . . . . Exchange differences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Current service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Settlements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Actuarial losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Present value as at 30 June 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . .	Defined benefit obligationplans	Defined benefit obligationplans	Defined benefit obligationplans	Defined benefit obligationplans	Defined benefit obligationplans
	US 58.3 (5.6) 0.1 3.0 (2.2) — (2.7) 50.9 1.8 — 3.1 (0.6) 3.9 (2.6) 56.5 (1.8) — 1.2 (1.2) — (1.3) 53.4 56.5 0.5 — 2.7 — 6.2 — (2.6) 63.3 (0.8) — 1.3 (0.3) 2.7 (1.5) 64.7		ROW (£m) 20.2 (1.6) 0.6 1.0 1.1 0.1 (0.8) 20.6 (0.6) 0.7 0.9 — 1.7 (1.0) 22.3 1.0 0.4 0.4 — 0.1 (0.3) 23.9 22.3 (1.2) 0.6 0.9 (14.5) 0.7 0.1 (0.8) 8.1 (0.2) 0.1 0.1 — — (0.2) 7.9		Total
					78.5 (7.2) 0.7 4.0 (1.1) 0.1 (3.5) 71.5 1.2 0.7 4.0 (0.6) 5.6 (3.6) 78.8 (0.8) 0.4 1.6 (1.2) 0.1 (1.6) 77.3 78.8 (0.7) 0.6 3.6 (14.5) 6.9 0.1 (3.4) 71.4 (1.0) 0.1 1.4 (0.3) 2.7 (1.7) 72.6

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25.5 Fair value of plan assets

At 1 January . . . . . . . . . . . . . . . . . . Exchange differences . . . . . . . . . . . Expected return . . . . . . . . . . . . . . . . Settlements . . . . . . . . . . . . . . . . . . . Actuarial gains . . . . . . . . . . . . . . . . Employer contributions . . . . . . . . . . Member contributions . . . . . . . . . . . Benefits paid . . . . . . . . . . . . . . . . . . At 31 December . . . . . . . . . . . . . . . At 1 January . . . . . . . . . . . . . . . . . . . Exchange differences . . . . . . . . . . . . Expected return . . . . . . . . . . . . . . . . . Actuarial gains . . . . . . . . . . . . . . . . . Employer contributions . . . . . . . . . . Member contributions . . . . . . . . . . . . Benefits paid . . . . . . . . . . . . . . . . . . . At 30 June . . . . . . . . . . . . . . . . . . . .	31 December 2009 US ROW Total 30.0 11.3 41.3 (3.0) (0.7) (3.7) 2.1 0.5 2.6 — — — 5.0 0.6 5.6 0.5 1.1 1.6 — 0.1 0.1 (2.7) (0.5) (3.2) 31.9 12.4 44.3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	31 December 2010 31 December 2011 US ROW Total US ROW Total (£m) 31.9 12.4 44.3 37.8 14.1 51.9 1.0 (0.3) 0.7 0.4 — 0.4 2.5 0.6 3.1 2.4 0.6 3.0 — — — — (12.5) (12.5 — 0.8 0.8 1.4 — 1.4 5.0 0.9 5.9 3.3 0.5 3.8 — — — — 0.1 0.1 (2.6) (0.3) (2.9) (2.5) (0.6) (3.1 37.8 14.1 51.9 42.8 2.2 45.0 30 June 2011 30 June 2012 US ROW Total US ROW Total (£m) 37.8 14.1 51.9 42.8 2.2 45.0 (1.2) 0.6 (0.6) (0.7) (0.2) (0.9 1.2 0.3 1.5 1.2 — 1.2 0.1 — 0.1 0.1 — 0.1 2.5 0.4 2.9 1.9 — 1.9 — 0.1 0.1 — — — (1.2) (0.2) (1.4) (1.4) — (1.4 39.2 15.3 54.5 43.9 2.0 45.9	31 December 2011	31 December 2011	31 December 2011
					Total 51.9 0.4 3.0 (12.5 1.4 3.8 0.1 (3.1
					45.0
				ROW Total 2.2 45.0 (0.2) (0.9 — 1.2 — 0.1 — 1.9 — — — (1.4 2.0 45.9

The actual return on all Alent pension plan assets was £1.3 million in the first half of 2012 (HY 2011: £1.6 million; FY 2011: £4.4 million; FY 2010: £3.9 million; FY 2009: £8.2 million).

25.6 Balance sheet recognition

The amount recognised in the balance sheet in respect of Alent’s defined benefit pension plans and other post-retirement benefits plans is analysed in the following tables.

		FY 2009			FY 2010
	US	ROW	Total	US	ROW	Total
Equities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	19.7	—	(£m) 19.7 7.0		—	7.0
Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	12.2	0.2	12.4	24.6	0.2	24.8
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	—	12.2	12.2	6.2	13.9	20.1
Fair value of plan assets . . . . . . . . . . . . . . . . . . . . . .	31.9	12.4	44.3	37.8	14.1	51.9
Funded defined benefit obligations . . . . . . . . . . . . . .	(47.1)	(14.3)	(61.4)	(52.5)	(16.2)	(68.7)
Unfunded post-retirement benefits plans . . . . . . . . .	(3.8)	(6.3)	(10.1)	(4.0)	(6.1)	(10.1)
Total net liabilities . . . . . . . . . . . . . . . . . . . . . . . . . .	(19.0)	**(8.2) **	(27.2)	(18.7)	**(8.2) **	(26.9)

		FY 2011
	US	ROW	Total
Equities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7.9	(£m) —	7.9
Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	27.8	0.2	28.0
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7.1	2.0	9.1
Fair value of plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	42.8	2.2	45.0
Funded defined benefit obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	(58.9)	(4.4)	(63.3)
Unfunded post-retirement benefits plans . . . . . . . . . . . . . . . . . . . . . . . . . . . .	(4.4)	(3.7)	(8.1)
Total net liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	(20.5)	(5.9)	(26.4)

108

Equities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Fair value of plan assets . . . . . . . . . . . . . . . . . . . . . . . Funded defined benefit obligations . . . . . . . . . . . . . . Unfunded post-retirement benefits plans . . . . . . . . . . Total net liabilities . . . . . . . . . . . . . . . . . . . . . . . . . .	HY 2011 US ROW	HY 2011 US ROW	HY 2012 Total US ROW (£m)	HY 2012 Total US ROW (£m)	HY 2012	HY 2012	Total
		ROW				ROW
	23.5 15.7 —	— — 15.3	23.5 15.7 15.3		26.3 17.6 —	— — 2.0	26.3 17.6 2.0
	39.2 (49.7) (3.7) (14.2)	15.3 (18.6) (5.3) **(8.6) **	54.5 (68.3) (9.0) (22.8)		43.9 (60.4) (4.3) (20.8)	2.0 (4.3) (3.6) (5.9)	45.9 (64.7) (7.9) (26.7)

Defined benefit contributions in 2012

In 2012, Alent is expected to make aggregate contributions into its defined benefit pension and other post-retirement benefits plans of around £4 million.

25.7 Income statement recognition

The expense recognised in the income statement in respect of Alent’s defined benefit retirement plans and other post-retirement benefits plans is shown below.

Current service cost . . . . . . . . . . . . . . . . . . . . . . . Interest on obligation . . . . . . . . . . . . . . . . . . . . . . Expected return on plan assets . . . . . . . . . . . . . . . Gains relating to employee benefits plans . . . . . . Total net charge/(credit). . . . . . . . . . . . . . . . . . .	FY 2009 0.7 4.0 (2.6) — 2.1	FY 2010 0.7 4.0 (3.1) (0.6) 1.0	FY 2011 (£m) 0.6 3.6 (3.0) (2.0) (0.8)	HY 2011 (unaudited) 0.4 1.6 (1.5) — 0.5	HY 2012
					0.1 1.4 (1.2) (0.3) —

The net charge of £nil in the first half of 2012 (HY 2011: £0.5 million; FY 2011: £0.8 million credit; FY 2010: £1.0 million; FY 2009: £2.1 million) recognised in the income statement in respect of Alent’s defined benefit pension plans and other post-retirement benefits plans is recognised in the following lines:

In arriving at trading profit: – within other manufacturing costs . . . . . . . . . . . . – within administration, selling and distribution costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . In arriving at profit from operations: – gains relating to employee benefits plans . . . . . In arriving at profit before tax: – within ordinary finance costs . . . . . . . . . . . . . . . – within finance income . . . . . . . . . . . . . . . . . . . . Total net charge/(credit). . . . . . . . . . . . . . . . . . .	FY 2009 0.2 0.5 — 4.0 (2.6) 2.1	FY 2010 0.2 0.5 (0.6) 4.0 (3.1) 1.0	FY 2011 (£m) 0.2 0.4 (2.0) 3.6 (3.0) (0.8)	HY 2011 (unaudited) 0.2 0.2 — 1.6 (1.5) 0.5	HY 2012
					0.1 (0.3) — 1.4 (1.2) —

The exceptional net gain relating to employee benefits plans of £2.0 million in 2011 arose from the closure of two defined benefit pension plans in the Netherlands.

The closure of a small defined benefit plan in the US, resulted in the recognition of an exceptional curtailment gain of £0.6 million in 2010.

109

25.8 Historical information

The history of the fair value of Alent’s plan assets, the present value of defined benefit obligations, the net deficit in the plans and the experience adjustments on plan assets and liabilities are shown below.

Fair value of plan assets . . . . . . . . . . . . . . . . . . . . Present value of defined benefit obligations . . . . . Net plan deficit . . . . . . . . . . . . . . . . . . . . . . . . . . Experience gains/(losses) on plan liabilities . . . . . Experience gains/(losses) on plan assets . . . . . . .		Defined benefitplans	Defined benefitplans	Defined benefitplans
	FY 2009 44.3 (71.5) (27.2) 0.7 5.6	FY 2010 51.9 (78.8) (26.9) (0.3) 0.8	FY 2011 (£m) 45.0 (71.4) (26.4) 0.6 1.4	HY 2011 (unaudited) 54.5 (77.3) (22.8) 0.5 0.1	HY 2012
						45.9 (72.6) (26.7) 0.9 0.1

The cumulative amount of actuarial losses recognised in the Group statement of comprehensive income as at 31 December 2011 is £22.9 million (FY 2010: £17.4 million; FY 2009 £12.6 million).

26 Share-based payments

26.1 Income statement recognition

The total expense recognised in the Alent income statement is shown below.

LTIP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total expense . . . . . . . . . . . . . . . . . . . . . . . . . . . .	FY 2009 0.2 — 0.2	FY 2010 1.1 0.1 1.2	FY 2011 (£m) 0.9 0.2 1.1	HY 2011 (unaudited) 0.4 0.1 0.5	HY 2012
					0.5 0.1 0.6

Cookson operates a number of different share-based payment plans, the most significant of which is the Long-Term Incentive Plan (“LTIP”), details of which can be found in paragraph 11 to Part XIII of this document. Alent’s other share-based payment plans are not significant in the context of Alent’s results or financial position.

LTIP . . . . . . . . . . Weighted average exercise price . . . . . . . . Other plans . . . . . Weighted average exercise price . . . . . . . .		Outstanding awards	Outstanding awards	Outstanding awards			Awards exercisable as at 31 December 2009	Weighted average outstanding contractual life of awards	Range of exercise prices	Range of exercise prices
	As at 1 January 2009	Granted	Exercised	Forfeited/ lapsed	As at 31 December 2009
	No. 258,488 Nil — N/A	No. 777,843 Nil 87,767 Nil	No. — N/A — N/A			No. 968,031 Nil 87,767 Nil	No. — — — —	Years 1.9 2.2		Pence N/A N/A

110

No options were exercised during 2009.

Outstanding awards

LTIP . . . . . . . . . Weighted average exercise price . . . . . . . Other plans . . . . Weighted average exercise price . . . . . . .	As at 1 January 2010	Granted	Exercised	Exercised	Forfeited/ lapsed As at 31 December 2010 No. No. (183,813) 982,714 Nil Nil — 138,811 N/A Nil	As at 31 December 2010	As at 31 December 2010	Awards exercisable as at 31 December 2010	Weighted average outstanding contractual life of awards	Range of exercise prices	Range of exercise prices
	No. 968,031 Nil 87,767 Nil	No. 198,496 Nil 55,780 Nil		No. — N/A (4,736) Nil			No. 982,714 Nil 138,811 Nil	No. — — — —	Years 1.3 1.6		Pence N/A N/A

Options were exercised on a regular basis throughout 2010. The average share price during 2010 was 503 pence.

Outstanding awards

LTIP . . . . . . . . . . Weighted average exercise price . . . . . . . . Other plans . . . . . Weighted average exercise price . . . . . . . .	As at 1 January 2011	Granted	Exercised	Forfeited /lapsed No. (65,395) Nil — N/A	As at 31 December 2011	Awards exercisable as at 31 December 2011	Weighted average outstanding contractual life of awards	Range of exercise prices	Range of exercise prices
	No. 982,714 Nil 138,811 Nil	No. 174,804 Nil 64,935 Nil	No. (44,262) Nil (6,210) Nil		No. 1,047,861 Nil 197,536 Nil	No. — — — —	Years 0.8 1.2		Pence N/A N/A

For all the options exercised during 2011, the share price at the date of exercise was 689.5 pence.

Outstanding awards

LTIP . . . . . . . . . . . . Weighted average exercise price . . . . Other plans . . . . . . . Weighted average exercise price . . . .	As at 1 January 2011	Granted No. 174,804 Nil 64,935 Nil	Exercised	Forfeited/ lapsed	As at 30 June 2011	Awards exercisable as at 30 June 2011	Weighted average outstanding contractual life of awards	Range of exercise prices	Range of exercise prices
	No. 982,714 Nil 138,811 Nil		No. (44,262) Nil (5,714) Nil			No. — — — —	Years 1.3 1.7		Pence N/A N/A

111

For all the options exercised during HY 2011, the share price at the date of exercise was 689.5 pence.

LTIP . . . . . . . . . . . . Weighted average exercise price . . . Other plans . . . . . . . Weighted average exercise price . . .		Outstanding awards	Outstanding awards	Outstanding awards	Outstanding awards		Awards exercisable as at 30 June 2012	Weighted average outstanding contractual life of awards	Range of exercise prices	Range of exercise prices
	As at 1 January 2012	Granted	Exercised	Forfeited/ lapsed		As at 30 June 2012
	No. 1,047,861 Nil 197,536 Nil	No. 308,555 Nil 60,730 Nil			No. — N/A (8,648) Nil	No. 644,981 Nil 172,964 Nil	No. — — — —	Years 2.0 1.8		Pence N/A N/A

For all the options exercised during HY 2012, the share price at the date of exercise was 704.5 pence.

26.2 Options granted under the LTIP during the period

Fair value of options granted_(per share) . . . . . Share price on date of grant(per share) . . . . . . Expected volatility . . . . . . . . . . . . . . . . . . . . . . . Risk-free interest rate . . . . . . . . . . . . . . . . . . . . Exercise price(per share) . . . . . . . . . . . . . . . . . Expected term(years) . . . . . . . . . . . . . . . . . . . . Expected dividend yield . . . . . . . . . . . . . . . . . . Fair value of options granted(per share). . . . . . . Share price on date of grant(per share). . . . . . . . Expected volatility . . . . . . . . . . . . . . . . . . . . . . . . Risk-free interest rate . . . . . . . . . . . . . . . . . . . . . . Exercise price(per share) . . . . . . . . . . . . . . . . . . Expected term(years)_ . . . . . . . . . . . . . . . . . . . . . Expected dividend yield . . . . . . . . . . . . . . . . . . . .	FY 2009 EPS element TSR element 175p 84p 175p 175p n/a 39.7% n/a 1.7% nil nil 3 3 0% 0% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	FY 2010	FY 2010
	EPS element 175p 175p n/a n/a nil 3 0% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	EPS element TSR element 586p 468p 586p 586p n/a 58.8% n/a 1.8% nil nil 3 3 0% 0% FY 2011	TSR element
		EPS element 646p 705p n/a n/a nil 4 0%	TSR element
			494p 705p 59.2% 1.4% nil 4 0%

Fair value of options granted_(per share) . . . . . Share price on date of_grant (per share) . . . . . . Expected volatility . . . . . . . . . . . . . . . . . . . . . . . Risk-free interest rate . . . . . . . . . . . . . . . . . . . . Exercise price_(per share) . . . . . . . . . . . . . . . . . Expected term(years)_ . . . . . . . . . . . . . . . . . . . . Expected dividend yield . . . . . . . . . . . . . . . . . .	HY 2011 EPS element TSR element 646p 494p 705p 705p n/a 59.2% n/a 1.4% nil nil 4 4 0 % 0 %	HY 2012	HY 2012
	EPS element 646p 705p n/a n/a nil 4 0 %	EPS element 648p 710p n/a n/a nil 4 0 %	TSR element
			434p 710p 45.4% 0.5% nil 4 0 %

Share price volatility for options granted in 2012, 2011, 2010 and 2009 is based upon weekly movements in the Cookson share price over a period prior to the grant date that is equal in length to the expected term of the award.

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27 Trade and other payables

27.1 Accounting policy

Trade and other payables are initially recognised at fair value and subsequently measured at amortised cost, using the effective interest method.

27.2 Analysis of trade and other payables

Non-current Accruals and other payables . . . . . . . . . . . . . . . . . Deferred purchase consideration . . . . . . . . . . . . . Total non-current payables . . . . . . . . . . . . . . . . Current Trade payables . . . . . . . . . . . . . . . . . . . . . . . . . . . Other taxes and social security . . . . . . . . . . . . . . . Accruals and other payables . . . . . . . . . . . . . . . . . Deferred purchase consideration . . . . . . . . . . . . . Total current payables . . . . . . . . . . . . . . . . . . . .	FY 2009 2.4 1.6 4.0 49.8 4.6 34.7 0.7 89.8	FY 2010 1.2 1.0 2.2 53.0 6.7 49.5 0.7 109.9	FY 2011 (£m) 0.4 0.2 0.6 49.9 7.0 46.9 0.8 104.6	HY 2011 (unaudited) 0.7 0.6 1.3 44.8 6.7 43.4 0.7 95.6	HY 2012
					— 1.9 1.9 39.6 4.6 33.1 1.7 79.0

There is no significant difference between the fair value of Alent’s trade and other payables balances and the amount at which they are reported in the balance sheet.

28 Leases

28.1 Accounting policy

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases. Rentals payable under operating leases are charged to the income statement on a straight-line basis over the term of the lease. Benefits received and receivable as an incentive to enter into an operating lease are also spread on a straight-line basis over the lease term.

28.2 Operating lease commitments

The future aggregate minimum lease payments under non-cancellable operating leases are payable as follows:

– Not later than one year . . . . . . . . . . . . . . . . . . . . – Later than one year and not later than five years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – Later than five years . . . . . . . . . . . . . . . . . . . . . Total operating lease commitments. . . . . . . . . .	FY 2009 7.7 19.1 43.1 69.9	FY 2010 7.4 20.4 37.7 65.5	FY 2011 (£m) 7.2 20.6 35.5 63.3	HY 2011 (unaudited) 8.0 23.2 36.1 67.3	HY 2012
					4.9 11.7 2.2 18.8

Alent’s property, plant and equipment assets are either purchased outright or held under lease contracts. Where the terms of the lease transfer substantially all the risks and rewards of ownership of the asset to an Alent company, the asset is capitalised in the balance sheet and the corresponding liability to the lessor is recognised as a finance lease obligation. Where all the risks and rewards of ownership are not transferred to an Alent company, the lease is classified as an operating lease and neither the asset nor the corresponding liability to the lessor is recognised in the balance sheet. The net book value of Alent’s property, plant and equipment assets held under finance lease contracts at 31 December 2011, 31 December 2010, 31 December 2009, 30 June 2011 and 30 June 2012 was not material.

The majority of the decrease in the level of lease commitments in 2012 arose as a result of the purchase of Alent’s property in Woking, UK which was previously occupied on a leasehold basis. Further details are given in note 7.

113

The cost incurred in the first half of 2012 in respect of assets held under operating leases, all of which was charged within trading profit, amounted to £2.0 million (HY 2011: £2.8 million; FY 2011: £7.7 million; FY 2010: £8.6 million; FY 2009: £9.4 million).

29 Provisions

29.1 Accounting policy

Provisions are recognised when Alent has a present obligation as a result of a past event and it is probable that it will be required to settle that obligation. Provisions are measured at the Directors’ best estimate of the expenditure required to settle the obligation at the balance sheet date. Where the effect of the time value of money is material, provisions are discounted using a pre-tax discount rate that reflects both the current market assessment of the time value of money and the specific risks associated with the obligation. Where discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

29.2 Analysis of provisions

As at 1 January 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exchange adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Charge to income statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Unwind of discount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cash spend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . As at 31 December 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exchange adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Charge to income statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Unwind of discount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cash spend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . As at 31 December 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exchange adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Charge to income statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Unwind of discount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cash spend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . As at 30 June 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . As at 1 January 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exchange adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Charge to income statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Unwind of discount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cash spend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . As at 31 December 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exchange adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Charge to income statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Unwind of discount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cash spend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . As at 30 June 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	Disposal and closure costs 14.0 (1.3) 0.1 — (2.0) 10.8 0.4 0.7 — (1.5) 10.4 (0.3) — — (1.0) 9.1 10.4 — 3.2 — (1.8) 11.8 (0.1) — — (1.3) 10.4	Restructuring charges 7.7 (0.4) 27.5 0.8 (11.2) 24.4 (0.1) 5.2 1.0 (9.0) 21.5 0.1 1.8 0.5 (3.4) 20.5 21.5 (0.1) 3.1 1.0 (6.0) 19.5 (0.1) 3.0 0.3 (18.0) 4.7	Total
			21.7 (1.7) 27.6 0.8 (13.2)
			35.2 0.3 5.9 1.0 (10.5)
			31.9 (0.2) 1.8 0.5 (4.4)
			29.6
			31.9 (0.1) 6.3 1.0 (7.8)
			31.3 (0.2) 3.0 0.3 (19.3)
			15.1

Recognised in the balance sheet as: Non-current provisions . . . . . . . . . . . . . . . . . . . . Current provisions . . . . . . . . . . . . . . . . . . . . . . . . Total provisions . . . . . . . . . . . . . . . . . . . . . . . . . .	FY 2009 26.1 9.1 35.2	FY 2010 23.8 8.1 31.9	FY 2011 (£m) 25.7 5.6 31.3	HY 2011 (unaudited) 22.7 6.9 29.6	HY 2012
					8.1 7.0 15.1

114

The provision for disposal and closure costs includes the Directors’ current best estimate of the costs to be incurred both in the fulfilment of obligations incurred in connection with former Alent businesses, resulting from either disposal or closure, together with those related to the demolition and clean-up of closed sites. The provision comprises amounts payable in respect of known or probable costs resulting both from legal or other regulatory requirements, or from third-party claims, including claims relating to product liability. As the settlement of many of the obligations for which provision is made is subject to legal or other regulatory process, the timing of the associated cash outflows is subject to some uncertainty, but the majority of the amounts provided are expected to be utilised over the next five years and the underlying estimates of costs are regularly updated to reflect changed circumstances with regard to individual matters.

The provision for restructuring charges includes the costs of all of Alent’s initiatives to rationalise its operating activities. Cash costs of £18.0 million were incurred in the first half of 2012, of which £15.8 million related to the purchase of Alent’s property in Woking, UK which was previously occupied on a leasehold basis and over which an onerous lease reserve had been established in 2009. The purchase of the property resulted in the extinguishing of that provision, with a net credit being reported within net restructuring charges.

The balance of £4.7 million as at 30 June 2012 comprises £1.7 million in relation to onerous lease provisions in respect of leases terminating between two and fifteen years, and £3.0 million in relation to future expenditure on restructuring initiatives which is expected to be paid out over the next two years.

30 Acquisition of subsidiaries and joint ventures, net of cash acquired

In the first half of 2012, Alent acquired interests in subsidiaries and joint ventures for a total consideration of £3.2 million (HY 2011: £nil; FY 2011: £nil; FY 2010: £nil; FY 2009: £2.7 million), of which £0.4 million (HY 2011: £nil; FY 2011: £nil; FY 2010: £nil; FY 2009: £0.4 million) was paid in cash and £2.8 million (HY 2011: £nil; FY 2011: £nil; FY 2010: £nil; FY 2009: £2.3 million) deferred, subject to future earnout arrangements. The fair value of assets acquired was £0.4 million (HY 2011: £nil; FY 2011: £nil; FY 2010: £nil; FY 2009: £(0.2) million). Goodwill arising on these acquisitions amounted to £2.8 million (HY 2011: £nil; FY 2011: £nil; FY 2010: £nil; FY 2009: £2.9 million).

The £0.6 million reported in the first half of 2012 (HY 2011: £0.4 million; FY 2011: £0.7 million; FY 2010: £0.7 million; FY 2009: £0.4 million) in the statement of cash flows in respect of the acquisition of subsidiaries and joint ventures, net of cash acquired, comprised £0.4 million (HY 2011: £nil; FY 2011: £nil; FY 2010: £nil; FY 2009: £0.4 million) paid for current year acquisitions and £0.2 million (HY 2011: £0.4 million; FY 2011: £0.7 million; FY 2010: £0.7 million; FY 2009: £nil) of deferred consideration paid in respect of prior year acquisitions.

31 Off-balance sheet arrangements

In compliance with current reporting requirements, certain arrangements entered into by Alent in its normal course of business are not reported in the balance sheet. Of such arrangements, those considered material by the Directors include: inventory held under precious metal consignment arrangements (note 20); future lease payments in relation to assets used by the Group under non-cancellable operating leases (note 28); and trade receivable balances that have been subject to non-recourse factoring arrangements.

Under its non-recourse factoring arrangements, Alent sells trade receivables balances to a third-party factoring company in exchange for a cash payment from the factoring company, net of fees. All the risks and rewards of the trade receivables subject to these arrangements are transferred to the factoring company and, accordingly, the trade receivables are derecognised in the balance sheet. Such arrangements are used from time to time by Alent to manage the recovery of cash from its trade receivables. As at 30 June 2012, the balance sheet included £7.1 million (HY 2011: £17.2 million; FY 2011: £13.2 million; FY 2010: £13.9 million; FY 2009: £12.1 million) of cash that would otherwise have been reported as trade receivables if these arrangements were not in place. Factoring fees incurred during the first half of 2012, which are written off to the income statement within ordinary finance costs, amounted to £0.2 million (HY 2011: £0.2 million; FY 2011: £0.4 million; FY 2010: £0.3 million; FY 2009: £0.3 million).

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32 Contingent liabilities

Alent has extensive international operations and is subject to various legal and regulatory regimes, including those covering taxation and environmental matters. Legal claims have been brought against certain Alent companies by third parties alleging that persons have been harmed by exposure to hazardous materials used by those companies in the manufacture of industrial and consumer products, and further claims may be brought in the future. Several of Alent’s subsidiaries are parties to legal proceedings, certain of which are insured claims arising in the ordinary course of the operations of the company involved, and the Directors are aware of a number of issues which are, or may be, the subject of dispute with tax authorities. Reserves are made for the expected amounts payable in respect of known or probable costs resulting both from legal or other regulatory requirements, or from third-party claims. As the settlement of many of the obligations for which reserve is made is subject to legal or other regulatory process, the timing and amount of the associated outflows is subject to some uncertainty.

33 Principal subsidiaries and joint ventures

Details of the principal subsidiaries and joint ventures of Alent plc and the countries in which they are incorporated are given in paragraph 14 of Part XIII: “ Additional Information ”.

34 Related parties

All transactions with related parties are conducted on an arm’s length basis and in accordance with normal business terms. Transactions between related parties that are Alent subsidiaries are eliminated on consolidation. Details of related party matters, including remuneration, relating to the key management personnel of Alent can be found in note 8.2. Information relating to Alent pension arrangements can be found in note 25.

34.1 Related Party transactions

During the Reporting Period, Alent had the following disclosable transactions with related parties:

Related party interest (to)/from Vesuvius Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Related party management fees (to)/from Vesuvius Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Related party dividends (to)/from Vesuvius Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	FY 2009 3.3 (3.5) (0.2 ) 4.0 (4.4) (0.4) 6.2 (248.7) (242.5)	FY 2010 1.6 (2.2) (0.6) 1.0 (5.8) (4.8) — (15.4) (15.4)	FY 2011 (£m) 2.1 (1.8) 0.3 — (6.1) (6.1) — (109.4) (109.4)	HY 2011 (unaudited) 0.6 (0.3) 0.3 — (0.5) (0.5) — (5.4) (5.4)	HY 2012
					0.9 (0.5) 0.4 — (0.6) (0.6) — (12.9) (12.9)

34.2 Loans to and from related parties

Loans to and from related parties
Related party loan balances with Vesuvius Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	FY 2009 237.9 (169.0) 68.9	FY 2010 235.7 (161.2) 74.5	FY 2011 (£m) 173.2 (163.5) 9.7	HY 2011 (unaudited) 232.2 (162.7) 69.5	HY 2012
					156.8 (194.3) (37.5)

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35 Directors’ remuneration

The following tables detail the remuneration paid to each Director.

As stated in the Basis of Preparation note 2.2, in these financial statements, none of the corporate head office costs of Cookson have been charged to Alent, all having been reported as costs of Vesuvius for the Reporting Period. Accordingly, disclosure information for the Reporting Period relating to the remuneration of the Directors of Alent plc excludes the remuneration of those Directors of Alent plc who were also Directors of Cookson and whose remuneration cost is included in the central corporate costs of Cookson.

The following disclosure reports the remuneration of only those Directors of Alent plc who were employed by Cookson or a Cookson Group company during 2011.

Year ended 31 December 2011 Executive Directors Steve Corbett3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Mike Butterworth . . . . . . . . . . . . . . . . . . . . . . . . . . Non-Executive Directors Emma FitzGerald4 . . . . . . . . . . . . . . . . . . . . . . . . . . Peter Hill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Jan Oosterveld . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total Directors’ remuneration . . . . . . . . . . . . . .	Base salary and Non-Executive Directors’ fees 326,193 334,160 16,667 40,000 40,000 757,020	Benefits in kind1 13,929 13,507 — — — 27,436	Annual incentive bonuses2 (£) 326,193 121,133 — — — 447,326	Total remuneration	Total remuneration
					666,315 468,800 16,667 40,000 40,000 1,231,782

Notes:

• (1) Benefits in kind comprise mainly the assessed benefits arising from the contractual payments of medical insurance, life assurance and company car allowances.

• (2) The Annual Incentive bonus awarded to Mr Corbett for 2011 was based on the achievement by the Performance Materials division of Cookson Group of an above-maximum trading profit performance for 2011. The Annual Incentive bonus awarded to Mr Butterworth for 2011 was based on the Cookson Group’s achievement of trading profit performance between threshold and target for 2011.

• (3) Mr Corbett’s remuneration details are translated into sterling at the average US dollar:sterling exchange rate for the year.

• (4) Appointed 1 August 2011.

36 LTIP allocations

Details of the executive Directors’ allocations of Cookson shares under the Cookson LTIP are shown in the table below:

Steve Corbett 31/03/084 Performance shares . . . Matching shares . . . 25/03/095 Performance shares . . . Matching shares . . . 07/04/10 Performance shares . . . Matching shares . . . 01/04/11 Performance shares . . . Matching shares . . . Total LTIP . . . . . . . . . . . . . . . . . .	Allocations outstanding as at 1 Jan 20111	Allocations outstanding as at 1 Jan 20111	Allocated during the period1	Allocated during the period1	Vested during the period1	Lapsed during the period1
		23,215 9,563 169,776 91,665 54,166 — — — 348,385		— — — — — — 49,089 — 49,089

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Mike Butterworth 31/03/084 Performance shares . . . Matching shares . . . 25/03/095 Performance shares . . . Matching shares . . . 07/04/10 Performance shares . . . Matching shares . . . 01/04/117 Performance shares . . . Matching shares . . . Total LTIP . . . . . . . . . . . . Steve Corbett 31/03/084 Performance shares . . . Matching shares . . . 25/03/095 Performance shares . . . Matching shares . . . 07/04/10 Performance shares . . . Matching shares . . . 01/04/11 Performance shares . . . Matching shares . . . Total LTIP . . . . . . . . . . . .	Allocations outstanding as at 1 Jan 20111 32,368 66,209 174,166 321,280 54,522 52,556 — — 701,101 Allocations outstanding as at 1 Jan 20111 23,215 9,563 169,776 91,665 54,166 — — — 348,385	Allocated during the period1	Vested during the period1	Lapsed during the period1	Allocations outstanding as at 30 Jun 20111	Allocations outstanding as at 30 Jun 20111	Share price on day before award1	Per- formance period	Earliest vesting/ exercise date6
		— — — — — — 48,464 91,234					968.36 968.36 180.00 180.00 586.50 586.50 689.50 689.50 Share price on day before award1
		**139,698 **
		Allocated during the year1	Vested during the year1	Lapsed during the period1
		— — — — — — 49,089 — **49,089 **				— — 169,776 91,665 54,166 — 49,089 — 364,696	968.36 968.36 180.00 180.00 586.50 586.50 689.50 689.50

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Mike Butterworth 31/03/084 Performance shares . . . Matching shares . . . 25/03/095 Performance shares . . . Matching shares . . . 07/04/10 Performance shares . . . Matching shares . . . 01/04/117 Performance shares . . . Matching shares . . . Total LTIP . . . . . . . . . . . . Steve Corbett 25/03/095 Performance shares . . . Matching shares . . . 07/04/10 Performance shares . . . Matching shares . . . 01/04/11 Performance shares . . . Matching shares . . . 05/04/122 Performance shares . . . Matching shares . . . Total LTIP . . . . . . . . . . . .	Allocations outstanding as at 1 Jan 20111 32,368 66,209 174,166 321,280 54,522 52,556 — — 701,101 Allocations outstanding as at 1 Jan 20121	Allocations outstanding as at 1 Jan 20111 32,368 66,209 174,166 321,280 54,522 52,556 — — 701,101 Allocations outstanding as at 1 Jan 20121	Allocated during the period1 — — — — — — 48,464 91,234 139,698 Allocated during the period1	Vested during the period1	Lapsed during the period1	Lapsed during the period1	Allocations outstanding as at 31 Dec 20111	Allocations outstanding as at 31 Dec 20111	Share price on day before award1	Per- formance period	Earliest vesting/ exercise date6
									968.36 968.36 180.00 180.00 586.50 586.50 689.50 689.50 Share price on day before award1
				Vested during the period1		Lapsed during the period1
		169,776 91,665 54,166 — 49,089 — — — 364,696	7,053 — — — — — 56,498 106,444					— — 54,166 — 49,089 — 56,498 106,444 266,197	180.00 180.00 586.50 586.50 689.50 689.50 689.50 689.50
			**169,995 **

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Mike Butterworth 25/03/095 Performance shares . . . Matching shares . . . 07/04/10 Performance shares . . . Matching shares . . . 01/04/11 Performance shares . . . Matching shares . . . 05/04/122 Performance shares . . . Matching shares . . . Total LTIP . . . . . . . . . . . .	Allocations outstanding as at 1 Jan 20121	Allocations outstanding as at 1 Jan 20121	Allocated during the period1	Vested during the period1	Lapsed during the period1	Allocations outstanding as at 30 Jun 20121	Allocations outstanding as at 30 Jun 20121	Share price on day before award1	Per- formance period	Earliest vesting/ exercise date6
		174,166 321,280 54,522 52,556 48,464 91,234 — — 742,222	13,366 — — — — — 48,464 39,525				— — 54,522 52,556 48,464 91,234 48,464 39,525 334,765	180.00 180.00 586.50 586.50 689.50 689.50 689.50 689.50
			**101,355 **

Notes:

• (1) The interests and market prices shown have been adjusted for the rights issue which took effect in March 2009, and where applicable for the subsequent consolidation of Cookson’s ordinary shares which took effect on 15 May 2009, when every ten ordinary 10p shares held by Cookson shareholders at the close of business on 14 May 2009 were exchanged for one new £1 ordinary share.

• (2) In 2012 Messrs Corbett and Butterworth received a maximum allocation of performance shares worth one times their respective base salaries. Under the matching share award element of the Cookson Group LTIP they used their 2011 Annual Incentive payments to purchase 29,228 and 8,140 shares respectively and received maximum allocations of matching share awards based on these amounts. These had a maximum potential value on the date of award equivalent to circa two times base salary for Mr Corbett and one times base salary for Mr Butterworth. The allocations were made to Messrs Corbett and Butterworth on 5 April 2012 and the allocations were calculated based upon the closing mid-market price of Cookson’s shares on the day before the awards were made. Cookson’s mid-market closing price on the 5 April 2012 was 710p.

• (3) The mid-market closing price of Cookson’s shares ranged between 395.8p and 724.5p during 2011 and on 30 December 2011 was 509p.

• (4) The performance period for the LTIP awards made in 2008 ended on 31 December 2010. Cookson Group’s TSR performance during the three-year performance period was assessed against the comparator group and it was determined that Cookson’s performance was below median. Cookson’s annual compound headline EPS growth over RPI was assessed as being above 10 per cent. during this period. The Cookson Remuneration Committee confirmed that it was satisfied that the vesting of awards under the 2008 LTIP was justified by the underlying financial performance of Cookson over the performance period. Accordingly, 100 per cent. of the half of the 2008 LTIP awards that was based on Headline EPS performance vested on the third anniversary of their award. Messrs Corbett and Butterworth’s awards vested on 31 March 2011. The mid-market closing price of Cookson’s shares was 689.5p; the value of shares transferred to Messrs Corbett and Butterworth was £112,847 and £340,076 respectively. The total aggregate value of the shares transferred to them was £452,923. Mr Corbett sold all of the shares on vesting. Mr Butterworth sold sufficient shares on vesting to meet the associated tax liability. The Cookson Remuneration Committee also exercised its discretion to award participants in the LTIP the dividends that would have accrued during the performance period on the shares that vested. As a result Messrs Corbett and Butterworth received a cash payment of £3,719 and £10,843 respectively.

• (5) The performance period for the LTIP awards made in 2009 ended on 31 December 2011. Cookson’s TSR performance during the three-year performance period was assessed against the comparator group and it was determined that Cookson’s performance was above the upper quintile. Cookson’s annual compound Headline EPS growth over RPI was assessed as being greater than 10 per cent. during this period. The Cookson Remuneration Committee confirmed that it was satisfied that the vesting of

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awards under the 2009 LTIP was justified by the underlying financial performance of Cookson over the performance period. Accordingly, 100 per cent. of the 2009 LTIP awards vested on the third anniversary of their award. Participants received the dividends that would have been earned during the three year performance period. These dividends were paid by way of shares.

• (6) Mr Butterworth’s 2011 and 2012 awards were made in the form of nil-cost options. These options become exercisable, subject to the achievement of the applicable performance conditions, three years after their award, and then remain exercisable until the fifth anniversary of their award.

• (7) In 2011, Mr Butterworth received potential maximum allocations of performance shares worth one times his base salary. Under the Matching Share Award element of the LTIP he used his 2010 annual incentive payments to purchase 19,698 shares and received maximum allocations of Matching Share Awards based on this amount. This had a maximum potential value on the date of award equivalent to circa two times his base salary. The allocations were made to Mr Butterworth on 1 April 2011 and the allocation was calculated based upon the closing mid-market price of Cookson’s shares on the day before the award was made. Cookson’s mid-market closing price on the 1 April 2011 was 705p.

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SECTION B: REPORTING ACCOUNTANTS’ REPORT ON THE CONSOLIDATED FINANCIAL INFORMATION FOR THE YEARS ENDED 31 DECEMBER 2011, 31 DECEMBER 2010 AND 31 DECEMBER 2009 AND INTERIM FINANCIAL INFORMATION FOR THE SIX MONTHS ENDED 30 JUNE 2012

KPMG Audit Plc 15 Canada Square Canary Wharf London E14 5GL Tel +44 (0) 20 7311 1000 Fax +44 (0) 20 7311 3311 DX 157460 Canary Wharf 5

KPMG

The Directors

Alent plc Forsyth Road Sheerwater Woking Surrey GU21 5RZ

1 November 2012

Dear Sirs

Alent plc (the “Company”)

We report on the financial information set out on pages 67 to 121 (inclusive) for the three years ended 31 December 2009, 2010 and 2011 and the six-month period ended 30 June 2012. This financial information has been prepared for inclusion in the prospectus dated 1 November 2012 of Alent plc on the basis of the accounting policies set out in note 2. This report is required by paragraph 20.1 of Annex I of the Prospectus Directive Regulation and is given for the purpose of complying with that paragraph and for no other purpose. We have not audited or reviewed the financial information for the six-month period ended 30 June 2011 which has been included for comparative purposes only, and accordingly do not express an opinion thereon.

Responsibilities

The Directors of the Company are responsible for preparing the financial information on the basis of preparation set out in note 2.

It is our responsibility to form an opinion on the financial information and to report our opinion to you.

Save for any responsibility arising under Prospectus Rule 5.5.3R (2)(f) to any person as and to the extent there provided, to the fullest extent permitted by law we do not assume any responsibility and will not accept any liability to any other person for any loss suffered by any such other person as a result of, arising out of, or in connection with this report or our statement, required by and given solely for the purposes of complying with paragraph 23.1 of Annex I of the Prospectus Directive Regulation, consenting to its inclusion in the prospectus.

Basis of opinion

We conducted our work in accordance with Standards for Investment Reporting issued by the Auditing Practices Board in the United Kingdom. Our work included an assessment of evidence relevant to the amounts and disclosures in the financial information. It also included an assessment of the significant estimates and judgements made by those responsible for the preparation of the financial information and whether the accounting policies are appropriate to the entity’s circumstances, consistently applied and adequately disclosed.

We planned and performed our work so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial information is free from material misstatement whether caused by fraud or other irregularity or error.

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Opinion on financial information

In our opinion, the financial information gives, for the purposes of the prospectus dated 1 November 2012, a true and fair view of the state of affairs of Alent plc as at 31 December 2009, 2010 and 2011 and as at 30 June 2012, and of its consolidated income statement, statement of comprehensive income, statement of cash flows and changes in invested capital for the years ended 31 December 2009, 2010 and 2011 and for the six-month period ended 30 June 2012 in accordance with the basis of preparation set out in note 2.

Declaration

For the purposes of Prospectus Rule 5.5.3R (2)(f), we are responsible for this report as part of the prospectus and declare that we have taken all reasonable care to ensure that the information contained in this report is, to the best of our knowledge, in accordance with the facts and contains no omission likely to affect its import. This declaration is included in the prospectus in compliance with paragraph 1.2 of Annex I of the Prospectus Directive Regulation.

Yours faithfully

==> picture [115 x 53] intentionally omitted <==

KPMG Audit Plc

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PART X UNAUDITED PRO FORMA FINANCIAL INFORMATION

The unaudited pro forma statement of net assets set out below has been prepared to illustrate the effect of the Demerger as if it had taken place as at 30 June 2012. The information, which is produced for illustrative purposes only, by its nature addresses a hypothetical situation and, therefore, does not represent Alent’s actual financial position or results. The unaudited pro forma financial information has been prepared in accordance with the basis of preparation set out in the notes to the historical financial information and has been compiled on the basis set out in the notes below and on a basis consistent with the accounting policies of Alent as set out in note 2 of Part IX: “Historical Financial Information” of this document.

SECTION A: UNAUDITED PRO FORMA FINANCIAL INFORMATION

Assets Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interest in joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cash and short-term deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Trade and other receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Derivative financial instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Liabilities Interest-bearing borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Employee benefits – net liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total non-current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interest-bearing borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Trade and other payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Income tax payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Derivative financial instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	Alent as at 30 June 2012 (Note 1) 82.1 298.5 14.5 1.1 8.0 10.1 414.3 72.2 52.5 145.8 2.0 272.5 686.8 0.2 26.7 1.9 8.1 28.8 65.7 1.6 79.0 11.0 7.0 2.4 101.0 166.7 520.1	Debt adjustment (Note 2) — — — — — — — — — — — — — 233.6 — — — — 233.6 — — — — — — 233.6 (233.6)	Alent pro forma as at 30 June 2012	Alent pro forma as at 30 June 2012
				(Note 4) 82.1 298.5 14.5 1.1 8.0 10.1 414.3 72.2 52.5 145.8 2.0 272.5 686.8 233.8 26.7 1.9 8.1 28.8 299.3 1.6 79.0 11.0 7.0 2.4 101.0 400.3 286.5

Notes:

• (1) The financial information in respect of Alent has been extracted, without material adjustment, from the historical financial information for Alent prepared in line with the Basis of Preparation set out in the notes to the consolidated financial statements in Part IX: “Historical Financial Information” of this document.

• (2) On Demerger, the net debt of Cookson Group immediately prior to the Demerger will be apportioned to Vesuvius and Alent broadly in proportion to the contribution each has made to Cookson Group’s total EBITDA for the 12 months prior to the date of the Demerger. The same principle has been followed in arriving at the apportionment of net debt in the pro forma statement above. Alent accounted for approximately 31.8% of Cookson Group’s EBITDA for the 12 months to 30 June 2012. Applying that percentage to each of Cookson Group’s net debt as at 30 June 2012 of £450.5 million, the estimated

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demerger costs totalling £30 million and additional pension contributions of £32 million gives total pro forma net debt for Alent of £163.2 million – comprising £233.8 million of non-current interest bearing borrowings, £1.6 million of current interest bearing borrowings less £72.2 million of cash and short term deposits. To achieve this net debt position, an allocation of £233.6 million of non-current interest-bearing borrowings to Alent is required.

• (3) Approximately £30 million of cash costs associated with the Demerger are expected to be incurred, of which £18 million are to be borne by Cookson, with approximately £12 million to be borne by Alent. These totals include professional fees associated with the Demerger and tax costs resulting from the Demerger, but exclude debt-refinancing costs which are required by accounting standards to be capitalised; the latter being approximately £2 million to be borne by Cookson and approximately £3 million to be borne by Alent.

• (4) A pro forma statement of financial performance for Alent has not been presented for the year ended 31 December 2011. The Directors believe that had the Demerger occurred at the beginning of the last financial year, the earnings of Alent would have reduced both as a result of increased finance costs on the increase in the reported level of net debt and as a result of costs associated with the Demerger, compared to the earnings of Alent set out in part IX. This statement should be taken to mean that the earnings per share of Alent will not necessarily match or increase the historical reported profit of Alent. The cumulative impact of the adjustments noted above would be to decrease profit after tax for the period ended 30 June 2012. There is no impact on trading profit. These statements are for the purposes of pro forma information only, no forecast is intended or implied.

• (5) No account has been taken of the trading results of Alent since 30 June 2012.

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SECTION B: REPORTING ACCOUNTANTS’ REPORT ON UNAUDITED PRO FORMA FINANCIAL INFORMATION

KPMG Audit Plc 15 Canada Square Canary Wharf London E14 5GL Tel +44 (0) 20 7311 1000 Fax +44 (0) 20 7311 3311 DX 157460 Canary Wharf 5

KPMG

The Directors

Alent plc Forsyth Road Sheerwater Woking Surrey GU21 5RZ

1 November 2012

Dear Sirs

Alent plc (the “Company”)

We report on the pro forma net asset statement (the “ Pro forma financial information ”) set out in Section A entitled “Unaudited pro forma financial information” of the prospectus dated 1 November 2012, which has been prepared on the basis described in notes to the Pro Forma financial information, for illustrative purposes only, to provide information about how the transaction might have affected the financial information presented on the basis of the accounting policies to be adopted by Alent plc in preparing the financial statements for the period ending 31 December 2012. This report is required by paragraph 20.2 of Annex I of the Prospectus Directive Regulation and is given for the purpose of complying with that paragraph and for no other purpose.

Responsibilities

It is the responsibility of the directors of Alent plc to prepare the Pro forma financial information in accordance with paragraph 20.2 of Annex I of the Prospectus Directive Regulation.

It is our responsibility to form an opinion, as required by paragraph 7 of Annex II of the Prospectus Directive Regulation, as to the proper compilation of the Pro forma financial information and to report that opinion to you.

In providing this opinion, we are not updating or refreshing any reports or opinions previously made by us on any financial information used in the compilation of the Pro forma financial information, nor do we accept responsibility for such reports or opinions beyond that owed to those to whom those reports or opinions were addressed by us at the dates of their issue.

Save for any responsibility arising under Prospectus Rule 5.5.3R (2)(f) to any person as and to the extent there provided, to the fullest extent permitted by law we do not assume any responsibility and will not accept any liability to any other person for any loss suffered by any such other person as a result of, arising out of, or in connection with this report or our statement, required by and given solely for the purposes of complying with paragraph 23.1 of Annex I of the Prospectus Directive Regulation, consenting to its inclusion in the prospectus.

Basis of Opinion

We conducted our work in accordance with the Standards for Investment Reporting issued by the Auditing Practices Board in the United Kingdom. The work that we performed for the purpose of making this report, which involved no independent examination of any of the underlying financial information, consisted primarily of comparing the unadjusted financial information with the source documents, considering the evidence supporting the adjustments and discussing the Pro forma financial information with the directors of Alent plc.

We planned and performed our work so as to obtain the information and explanations we considered necessary in order to provide us with reasonable assurance that the Pro forma financial information has been properly compiled on the basis stated and that such basis is consistent with the accounting policies of Alent plc.

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Our work has not been carried out in accordance with auditing or other standards and practices generally accepted in the United States of America and, accordingly, should not be relied upon as if it had been carried out in accordance with those standards and practices.

Opinion

In our opinion:

• the Pro forma financial information has been properly compiled on the basis stated; and

• such basis is consistent with the accounting policies of Alent plc.

Declaration

For the purposes of Prospectus Rule 5.5.3R (2)(f) we are responsible for this report as part of the prospectus and declare that we have taken all reasonable care to ensure that the information contained in this report is, to the best of our knowledge, in accordance with the facts and contains no omission likely to affect its import. This declaration is included in the prospectus in compliance with paragraph 1.2 of Annex I of the Prospectus Directive Regulation.

Yours faithfully

==> picture [92 x 27] intentionally omitted <==

KPMG Audit Plc

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PART XI TAXATION CONSIDERATIONS

1 United Kingdom

United Kingdom Taxation

The comments set out below are based on current United Kingdom tax law as applied in England and Wales and HM Revenue & Customs practice (which may not be binding on HM Revenue & Customs) as at the date of this document, both of which are subject to change, possibly with retrospective effect. They are intended as a general guide and apply only to shareholders resident and, in the case of an individual, ordinarily resident, for tax purposes in the United Kingdom (except insofar as express reference is made to the treatment of non-United Kingdom residents), who hold Alent Shares as an investment and who are the absolute beneficial owners thereof. The discussion does not address all possible tax consequences relating to an investment in the Alent Shares. Certain categories of shareholders, such as traders, brokers, dealers, banks, financial institutions, insurance companies, investment companies, collective investment schemes, tax-exempt organisations, persons connected with Alent plc or the Group, persons holding the Alent Shares as part of hedging or conversion transactions, shareholders who are not domiciled or not ordinarily resident in the United Kingdom, shareholders who have (or are deemed to have) acquired their Alent Shares by virtue of an office or employment, and shareholders who are or have been officers or employees of Alent plc, Cookson or a company forming part of Alent or the Cookson Group, may be subject to special rules and this summary does not apply to such shareholders.

Shareholders or prospective shareholders who are in any doubt about their tax position, or who are resident or otherwise subject to taxation in a jurisdiction outside the United Kingdom, should consult their own professional advisers.

Shareholders are also referred to Part X of the Cookson Circular which contains further considerations as to the UK tax consequences of the receipt of Alent Shares pursuant to the Demerger.

1.1 Taxation of Dividends

Alent plc will not be required to withhold tax at source when paying a dividend.

A United Kingdom resident individual shareholder who receives a dividend from Alent plc will be entitled to a tax credit which may be set off against the shareholder’s total income tax liability on the dividend. The tax credit will be equal to 10 per cent. of the aggregate of the dividend and the tax credit (the “gross dividend”), which is also equal to one-ninth of the cash dividend received. Such an individual shareholder who is liable to income tax at the basic rate will be subject to tax on the dividend at the rate of 10 per cent. of the gross dividend, so that the tax credit will satisfy in full such shareholder’s liability to income tax on the dividend. In the case of such an individual shareholder who is liable to income tax at the higher rate, the tax credit will be set against but not fully match the shareholder’s tax liability on the gross dividend and such shareholder will have to account for additional income tax equal to 22.5 per cent. of the gross dividend (which is also equal to 25 per cent. of the cash dividend received) to the extent that the gross dividend when treated as the top slice of the shareholder’s income falls above the threshold for higher rate income tax. In the case of such an individual shareholder who is subject to income tax at the additional rate, the tax credit will also be set against but not fully match the shareholder’s liability on the gross dividend and such shareholder will have to account for additional income tax equal to 32.5 per cent. (or 27.5 per cent. with effect from 6 April 2013) of the gross dividend (which is also equal to approximately 36.1 per cent. (or approximately 30.6 per cent. with effect from 6 April 2013) of the cash dividend received) to the extent that the gross dividend when treated as the top slice of the shareholder’s income falls above the threshold for additional rate income tax.

A United Kingdom resident individual shareholder who is not liable to income tax in respect of the gross dividend and other United Kingdom resident taxpayers who are not liable to United Kingdom tax on dividends, including pension funds and charities, will not be entitled to claim repayment of the tax credit attaching to dividends paid by Alent plc.

Shareholders who are within the charge to corporation tax will be subject to corporation tax on dividends paid by Alent plc, unless (subject to special rules for such shareholders that are small companies) the dividends fall within an exempt class and certain other conditions are met. It is expected that the dividends paid by Alent plc would generally be exempt for such shareholders. Such shareholders will not be able to claim repayment of tax credits attaching to dividends.

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Non-United Kingdom resident shareholders will not generally be able to claim repayment from HM Revenue & Customs of any part of the tax credit attaching to dividends paid by Alent plc. A shareholder resident outside the United Kingdom may also be subject to foreign taxation on dividend income under local law. Shareholders who are not resident for tax purposes in the United Kingdom should obtain their own tax advice concerning tax liabilities on dividends received from Alent plc.

1.2 Taxation of Capital Gains

Shareholders who are resident or, in the case of individuals, ordinarily resident in the United Kingdom, or who cease to be resident or ordinarily resident in the United Kingdom for a period of less than five years of assessment, may, depending on their circumstances (including the availability of exemptions or reliefs), be liable to United Kingdom taxation on chargeable gains in respect of gains arising from a sale or other disposal of shares in Alent plc.

1.3 Inheritance Tax

Alent Shares in certificated form will be assets situated in the United Kingdom for the purposes of United Kingdom inheritance tax. As a matter of United Kingdom law and HMRC practice, the situs of securities dealt with through computerised clearing systems is unclear but the Alent Shares in uncertificated form in CREST should also be assets situated in the United Kingdom for these purposes.

A gift of such United Kingdom situs assets by, or the death of, an individual holder of such assets may (subject to certain exemptions and reliefs) give rise to a liability to United Kingdom inheritance tax, even if the holder is neither domiciled in the United Kingdom nor deemed to be domiciled there (under certain rules relating to long residence or previous domicile). Generally, United Kingdom inheritance tax is not chargeable on gifts to individuals if the transfer is made more than seven complete years prior to death of the donor. For inheritance tax purposes, a transfer of assets at less than full market value may be treated as a gift and particular rules apply to gifts where the donor reserves or retains some benefit. Special rules also apply to close companies and to trustees of settlements who hold Alent Shares bringing them within the charge to inheritance tax. Holders of Alent Shares should consult an appropriate professional adviser if they make a gift of any kind or intend to hold any Alent Shares through such a company or trust arrangement. They should also seek professional advice in a situation where there is potential for a double charge to United Kingdom inheritance tax and an equivalent tax in another country or if they are in any doubt about their United Kingdom inheritance tax position.

1.4 Stamp Duty and Stamp Duty Reserve Tax (“SDRT”)

The statements in this section are intended as a general guide to the current United Kingdom stamp duty and SDRT position. Investors should note that certain categories of person are not liable to stamp duty or SDRT and others may be liable at a higher rate or may, although not primarily liable for tax, be required to notify and account for SDRT under the Stamp Duty Reserve Tax Regulations 1986.

General

Except in relation to depositary receipt systems and clearance services (to which the special rules outlined below apply), no stamp duty or SDRT will arise on the issue of Alent Shares in registered form by Alent plc.

An agreement to transfer Alent Shares will normally give rise to a charge to SDRT at the rate of 0.5 per cent. of the amount or value of the consideration payable for the transfer. SDRT is, in general, payable by the purchaser.

Transfers of Alent Shares will generally be subject to stamp duty at the rate of 0.5 per cent. of the consideration given for the transfer (rounded up to the next £5). The purchaser normally pays the stamp duty.

If a duly stamped transfer completing an agreement to transfer is produced within six years of the date on which the agreement is made (or, if the agreement is conditional, the date on which the agreement becomes unconditional) any SDRT paid is generally repayable, normally with interest, and otherwise the SDRT charge is cancelled.

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CREST

Paperless transfers of Alent Shares within the CREST system are generally liable to SDRT, rather than stamp duty, at the rate of 0.5 per cent. of the amount or value of the consideration payable. CREST is obliged to collect SDRT on relevant transactions settled within the CREST system. Deposits of shares into CREST will not generally be subject to SDRT or stamp duty, unless the transfer into CREST is itself for consideration.

Depositary Receipt Systems and Clearance Services

Following the ECJ decision in C-569/07 HSBC Holdings Plc, Vidacos Nominees Limited v The Commissioners of Her Majesty’s Revenue & Customs and the First-tier Tax Tribunal decision in HSBC Holdings Plc and The Bank of New York Mellon Corporation v The Commissioners of Her Majesty’s Revenue & Customs, HMRC has confirmed that 1.5 per cent. SDRT is no longer payable when new shares are issued to a clearance service or depositary receipt system.

Where Alent Shares are transferred (a) to, or to a nominee or an agent for, a person whose business is or includes the provision of clearance services or (b) to, or to a nominee or an agent for, a person whose business is or includes issuing depositary receipts, stamp duty or SDRT will generally be payable at the higher rate of 1.5 per cent. of the amount or value of the consideration given or, in certain circumstances, the value of the shares.

There is an exception from the 1.5 per cent. charge on the transfer to, or to a nominee or agent for, a clearance service where the clearance service has made and maintained an election under section 97A(1) of the Finance Act 1986, which has been approved by HM Revenue & Customs. In these circumstances, SDRT at the rate of 0.5 per cent. of the amount or value of the consideration payable for the transfer will arise on any transfer of Alent Shares into such an account and on subsequent agreements to transfer such Alent Shares within such account.

Any liability for stamp duty or SDRT in respect of a transfer into a clearance service or depositary receipt system, or in respect of a transfer within such a service, which does arise will strictly be accountable by the clearance service or depositary receipt system operator or their nominee, as the case may be, but will, in practice, be payable by the participants in the clearance service or depositary receipt system.

2 US Federal Income Tax Considerations

To ensure compliance with requirements imposed by Treasury Department Circular 230, US Holders are hereby informed that (a) any US federal tax advice contained herein (including any attachments or enclosures) was not intended or written to be used, and cannot be used, for the purpose of avoiding US federal tax penalties, (b) any such advice was written to support the promotion or marketing of the transactions or matters addressed herein and (c) holders should seek advice based on their particular circumstances from an independent tax adviser.

The following is a summary of certain material US federal income tax consequences to US Holders (as defined below) of the ownership and disposition of Alent Shares. This summary does not cover all aspects of US federal income taxation that may be relevant to the ownership or disposition of Alent Shares and does not address the effects of any state, local, US non-income, or foreign tax laws. In particular, this summary does not address all the tax considerations that may be applicable to investors subject to special treatment under US federal income tax laws (such as financial institutions, insurance companies, holders subject to the alternative minimum tax or the wash sale rules, investors that own or will own (directly or constructively) 5 per cent. or more of the stock of Alent plc, pass-through entities or holders of interests in such entities, individual retirement accounts and other tax-deferred accounts, tax-exempt organisations, dealers in securities or currencies, traders that elect to mark to market, holders who acquired their Alent Shares upon the exercise of employee stock options or otherwise as compensation, holders whose functional currency is not the US Dollar, or holders that will hold their Alent Shares, as part of straddles, hedging transactions, or conversion transactions for US federal income tax purposes). This summary assumes that US Holders will hold the Alent Shares, as capital assets within the meaning of section 1221 of the IRS Code.

As used herein, the term “US Holder” means a beneficial owner of Alent Shares that is, for US federal income tax purposes: (i) a citizen or individual resident of the United States; (ii) a corporation created or organised in or under the laws of the United States or any State thereof; (iii) an estate the income of which

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is subject to US federal income tax without regard to its source; or (iv) a trust if a court within the United States is able to exercise primary supervision over the administration of the trust and one or more US persons have the authority to control all substantial decisions of the trust, or the trust has elected to be treated as a domestic trust for US federal income tax purposes.

The US federal income tax treatment of a partner in an entity treated as a partnership for US federal income tax purposes that will hold Alent Shares will depend on the status of the partner and the activities of the entity. Holders that are partnerships for US federal income tax purposes should consult their tax advisers concerning the US federal income tax consequences to their partners of owning shares in Alent plc.

This summary also assumes that Alent plc will not be a passive foreign investment company (“PFIC”) for US federal income tax purposes. If Alent plc were to be a PFIC in any year, special, possibly materially adverse, consequences could result for US Holders.

This summary is based on the US federal income tax laws, including the IRS Code, its legislative history, existing and proposed regulations thereunder, published rulings, court decisions, and the current US-UK income tax treaty and interpretations thereof, all as of the date hereof and all of which are subject to change, possibly with retroactive effect. A change in law or any of these authorities upon which this summary is based could adversely affect the US federal income tax consequences set out below.

The summary of US federal income tax consequences set out below is for general information only and is subject to the limitations and qualifications set forth herein. US Holders are urged to consult their own tax advisers as to the particular tax consequences to them of owning and disposing of shares in Alent plc.

US Holders are also referred to the Cookson Circular which contains further considerations as to the US federal income tax consequences of the receipt of Alent Shares in the Demerger.

2.1 Taxation of Dividends

Distributions made after the Demerger by Alent plc out of current or accumulated earnings and profits (as determined for US federal income tax purposes) generally will be taxable to a US Holder as foreign-source dividend income, and generally will not be eligible for the dividends-received deduction allowed to corporations. To the extent the amount of aggregate distributions exceed current and accumulated earnings and profits the distributions will be treated as a non-taxable return of capital, reducing the US Holder’s adjusted tax basis in its Alent Shares. To the extent the distributions in excess of earnings and profits exceed the US Holder’s adjusted tax basis, the excess will be taxed as capital gain. However, Alent plc will not maintain calculations of its earnings and profits in accordance with US federal income tax accounting principles. US Holders should consult their own tax advisers with respect to the appropriate US federal income tax treatment of any distribution received from Alent plc.

Dividends paid in pounds sterling will be included in income in a US Dollar amount calculated by reference to the exchange rate in effect on the day the dividends are received by the US Holder, regardless of whether the pounds sterling are converted into US Dollars at that time. If dividends received in pounds sterling are converted into US Dollars on the day they are received, the US Holder generally will not be required to recognise foreign-currency gain or loss in respect of the dividend income. A US Holder who elects to receive dividends from Alent plc in US Dollars will not recognise any foreign-currency gain or loss in respect of any such dividends.

2.2 Disposition of Alent Shares

Upon a sale or other disposition of Alent Shares, a US Holder generally will recognise capital gain or loss for US federal income tax purposes equal to the difference, if any, between the amount realised on the sale or other disposition and the US Holder’s adjusted tax basis in the Alent Shares. This capital gain or loss generally will be US-source income and will be long-term capital gain or loss if the US Holder’s holding period in the Alent Shares exceeds one year.

The amount realised on a sale or other disposition of Alent Shares for an amount in foreign currency will be the US Dollar value of this amount on the date of sale or disposition. On the settlement date, the US Holder will recognise US-source foreign-currency gain or loss (taxable as ordinary income or loss) equal to the difference (if any) between the US Dollar value of the amount received based on

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the exchange rates in effect on the date of sale or other disposition and the settlement date. However, in the case of Alent Shares traded on an established securities market that are sold by a cash-basis US Holder (or accrual-basis US Holder that so elects), the amount realised will be based on the exchange rate in effect on the settlement date for the sale, and no exchange gain or loss will be recognised at that time.

2.3 Backup Withholding and Information Reporting

Dividend payments with respect to Alent Shares, and proceeds from the sale, exchange, or redemption of such shares may be subject to (i) information reporting to the IRS and to US Holders, and (ii) possible US backup withholding tax. Backup withholding will not apply, however, to a US Holder who furnishes a correct taxpayer identification number and makes any other required certification or who is otherwise exempt from backup withholding. US Holders should consult their tax advisers regarding the application of the US information reporting and backup withholding rules.

Backup withholding is not an additional tax. Rather, any amounts withheld as backup withholding may be credited against a US Holder’s US federal income tax liability, and the US Holder may obtain a refund of any excess amounts withheld under the backup withholding rules by filing the appropriate claim for refund with the IRS and furnishing any required information.

2.4 Foreign Financial Asset Reporting

Recently enacted legislation imposes reporting requirements on the holding of certain foreign financial assets, including equity of foreign entities, if the aggregate value of all of these assets exceeds $50,000 at the end of the taxable year or $75,000 at any time during the taxable year. The thresholds are higher for individuals living outside of the United States and married couples filing jointly. The Alent Shares are expected to constitute foreign financial assets subject to these requirements, unless the Alent Shares are held in an account at a financial institution, in which case the account may be reportable if maintained by a foreign financial institution. US Holders should consult their tax advisers regarding the application of this legislation.

3 Jersey Taxation

The paragraphs set out below summarise the Jersey income tax treatment for an Alent Shareholder that is a Jersey resident company or a non-Jersey resident company with a Jersey permanent establishment.

These paragraphs are based on Jersey income tax law and practice in force as at the date of this document. The paragraphs are intended as a general guide only and do not constitute legal or tax advice. If you are in any doubt as to your tax position, you should consult an independent professional adviser immediately.

3.1 Taxation of Dividends

The general rate of income tax chargeable on the profits or income of a Jersey resident company or a non-Jersey resident company with a Jersey permanent establishment (including profits or income arising in respect of any dividend payable on shares held in Alent plc) is 0 per cent.

Jersey based utility companies and certain registered financial services companies are subject to income tax in Jersey at higher rates.

3.2 Other taxes

There are no capital gains, gift, wealth, inheritance, stamp or capital transfer taxes that would apply to a Jersey resident company or a non-Jersey resident company with a Jersey permanent establishment in respect of shares held in Alent plc.

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PART XII DIRECTORS, RESPONSIBLE PERSONS AND CORPORATE GOVERNANCE

1 Responsibility

The Alent Directors, whose names appear at paragraph 2.1 below, and Alent plc accept responsibility for the information contained in this document. To the best of the knowledge of the Alent Directors and Alent plc (who have taken all reasonable care to ensure that such is the case) the information contained in this document is in accordance with the facts and contains no omission likely to affect the import of such information.

2 Alent Directors

2.1 The Directors and their principal functions are as follows:

Director	Function
Peter Hill CBE . . . . . . . . . . . . . . . . . . . . .	Chairman
Steve Corbett . . . . . . . . . . . . . . . . . . . . . . .	Chief Executive
Mike Butterworth . . . . . . . . . . . . . . . . . . .	Interim Finance Director*
Dr Emma FitzGerald . . . . . . . . . . . . . . . . .	Non-Executive Director
Lars Förberg . . . . . . . . . . . . . . . . . . . . . . .	Non-Executive Director
Noël Harwerth . . . . . . . . . . . . . . . . . . . . . .	Non-Executive Director
Jan Oosterveld . . . . . . . . . . . . . . . . . . . . . .	Non-Executive Director
Mark Williamson . . . . . . . . . . . . . . . . . . .	Non-Executive Director

• Discussions with a potential permanent Finance Director to succeed Mike Butterworth are at an advanced stage and it is expected that the relevant candidate will take up his position early in the new year.

• 2.2 The business address of each of the Alent Directors is Forsyth Road, Sheerwater, Woking, Surrey GU21 5RZ.

• 2.3 Set out below are the business experience and principal business activities performed outside of Alent by the Alent Directors, as well as the dates of their initial appointment as Alent Directors, where applicable.

Peter Hill CBE

Chairman and Chairman of the Nominations Committee

Peter Hill was appointed as a Director, Chairman and Chairman of the Nominations Committee of Alent plc on 31 October 2012. He previously joined the Cookson Board in February 2010. Peter served as Chief Executive of Laird PLC from 2002 until he stepped down from the board in November 2011. He previously held senior management positions with BTR plc (subsequently Invensys plc) and was an executive director of Costain Group PLC. He was previously a non-executive director of Meggitt PLC and Oxford Instruments plc, and was a non-executive board member of UK Trade and Investment. Peter Hill is a British citizen.

Steve Corbett

Chief Executive

Steve Corbett was appointed as a Director of Alent plc on 31 October 2012. He previously joined the Cookson Board in May 2012. Steve has been President and Chief Executive Officer of Cookson’s Performance Materials division since 2004. He joined Cookson in 1990 and held various senior management roles within its joining technologies businesses before, in 2002, being appointed President of Enthone, the then newly acquired surface chemistries business. He was promoted to his current role in 2004. He previously held senior roles with Heraeus Gmbh and Corning Glass. Steve Corbett is a US citizen.

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Mike Butterworth

Interim Finance Director

Mike Butterworth was appointed as a Director of Alent plc on 10 September 2012. He previously joined the Cookson Board, and was appointed Finance Director, in June 2005. Prior to joining Cookson, Mike was Group Finance Director of Incepta Group Plc. He previously spent five years as Group Financial Controller of BBA Group plc. Mike is a non-executive director and Chairman of the audit committee of St Ives plc. Mike Butterworth is a Chartered Accountant and is a British citizen.

Dr Emma FitzGerald

Non-Executive Director

Emma FitzGerald was appointed as a Director of Alent plc on 31 October 2012. She previously joined the Cookson Board in August 2011. Emma is Vice President, Global Retail Network for Shell International. She joined Shell in 1992 and has worked in a variety of technical, strategic and general management roles based in Asia and Europe, including the position of Managing Director of Shell China/Hong Kong Lubricants based in Beijing. She has also served on subsidiary boards in both Korea and China. Emma holds a DPhil in Solid State Physics and Surface Chemistry, is a Trustee of The Windsor Leadership Trust, and sits on the leadership development advisory panel for the Prime Minister’s Office of the Singapore Government. Emma FitzGerald is a British citizen.

Lars Förberg

Non-Executive Director

Lars Förberg was appointed as a Director of Alent plc on 31 October 2012. Lars is a managing partner of Cevian Capital, which held just over 20 per cent. of Cookson’s issued share capital on the date of his appointment. Lars co-founded Cevian Capital in 2002. In 1997, he joined AB Custos, the Swedish investment company, ultimately becoming Chief Investment Officer. Prior to AB Custos, he had been an investment manager and a partner of Nordic Capital. Lars is a non-executive director of the Swiss headquartered freight-forwarding company, Panalpina. He also sits on the nominations committee of: Metso Corporation, the global Finnish technology and services company; Tieto Corporation, the Finnish IT service company; and AB Volvo, the Swedish truck and construction equipment manufacturer. Lars Förberg is a Swedish citizen.

Noël Harwerth

Non-Executive Director and Chairman of the Remuneration Committee

Noël Harwerth was appointed a Director of Alent plc on 31 October 2012 and is Chairman of the Remuneration Committee. Noël spent 15 years with Citicorp, latterly as Chief Operating Officer of Citibank International, having previously been with Dun and Bradstreet and Kennecott Copper Corporation. She is currently Chairman and non-executive director of Sumitomo Mitsui Banking Corporation Europe, a non-executive director of Standard Life plc, non-executive director and chair of the remuneration committee of Avocet Mining PLC, a non-executive director of Harry Winston Diamond Corporation Inc, and a non-executive director of RSA Insurance Group plc where she will be standing down in 2013. She was a non-executive director and Chairman of the remuneration committee of Logica plc until 2012, and was previously a non-executive director of the London Metal Exchange, Impellam Group plc, Corus Group plc and TFL Group. Noël Harwerth holds dual British and US citizenship.

Jan Oosterveld

Non-Executive Director

Jan Oosterveld was appointed as a Director of Alent plc on 31 October 2012. He previously joined the Cookson Board in June 2004. Jan spent 32 years with Royal Philips Electronics, where he was a member of the group management committee with responsibility for corporate strategy, the Chief Executive of Philips Asia Pacific and the Chairman of LG Philips LCD. He is a non-executive director and Chairman of the remuneration committee of Candover Investments plc and a non-executive corporate director of Barco N.V. He served as Chairman of the supervisory board of Crucell N.V. until December 2011. Jan is also a professor at IESE Business School in Barcelona. Jan Oosterveld is a Dutch citizen.

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Mark Williamson

Non-Executive Director, Senior Independent Director and Chairman of the Audit Committee

Mark Williamson was appointed a Director of Alent plc on 31 October 2012 and is Senior Independent Director and Chairman of the Audit Committee. Mark was formerly Chief Financial Officer of International Power plc. He joined International Power in 2000 as Group Financial Controller and was appointed to the board as Chief Financial Officer in 2003, stepping down in 2012. Previously, he was Group Financial Controller and Group Chief Accountant at Simon Group plc, the engineering and bulk chemicals group. He is senior independent non-executive director of Imperial Tobacco Group PLC, having previously served as chairman of the audit committee, and is a non-executive director of National Grid plc. Mark qualified as a Chartered Accountant in South Africa. Mark Williamson is a British citizen.

3 Directors’ interests

3.1 Directors’ shareholdings

The following table sets out the direct and indirect interests (all of which are beneficial unless stated otherwise) of the Alent Directors in Cookson as at 30 October 2012 (being the latest practicable date prior to the publication of this document), and, following the Demerger, in Alent plc, as expected to subsist by virtue of the effect of the Proposals on their existing holdings in Cookson Shares:

Alent Director Peter Hill CBE . . . . . . . . . . . . . . . . . . . . Steve Corbett . . . . . . . . . . . . . . . . . . . . . Mike Butterworth . . . . . . . . . . . . . . . . . Dr Emma FitzGerald . . . . . . . . . . . . . . . Lars Förberg1 . . . . . . . . . . . . . . . . . . . . . Noël Harwerth . . . . . . . . . . . . . . . . . . . . Jan Oosterveld . . . . . . . . . . . . . . . . . . . . Mark Williamson . . . . . . . . . . . . . . . . . .	Number of Cookson Shares 5,000 53,672 457,662 2,282 — — 16,254 —	Percentage of Cookson issued share capital (%) 0.002 0.019 0.164 0.001 — — 0.006 —	Number of Alent Shares 5,000 53,672 457,662 2,282 — — 16,254 —	Percentage of Alent plc issued share capital (%)
				0.002 0.019 0.164 0.001 — — 0.006 —

Notes:

(1) Lars Förberg is Managing Partner of, and has a financial interest in, Cevian Capital, which currently owns just over 20 per cent. of Cookson shares.

The interests of the Alent Directors and their connected persons together represent approximately 0.19 per cent. of the issued ordinary share capital of Cookson as at 30 October 2012 (being the latest practicable date prior to the publication of this document) and are expected to represent approximately 0.19 per cent. of the issued ordinary share capital of Alent plc upon the Demerger becoming effective.

3.2 Directors’ share awards

Details of share awards over Cookson Shares held by the Alent Directors as at 30 October 2012 (being the latest practicable date prior to the publication of this document) are set out below. They are not included in the interests of the Alent Directors shown in the table in paragraph 3.1 above. No options or awards have been made to any of the Non-Executive Directors. The effect of the Proposals on such awards is summarised in paragraph 11.4 of Part XIII: “ Additional Information ” of this document.

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LTIP

Alent Director Steve Corbett . . . . . . . . Mike Butterworth . . . .	Grant date	Type of award	Share awards outstanding	Performanceperiod	Vesting date (subject to performance)
	07/04/10 01/04/11 05/04/12 07/04/10 01/04/11 05/04/12	Performance shares Performance shares Performance shares Matching shares Performance shares Matching shares Performance shares Matching shares Performance shares Matching shares	54,166 49,089 56,498 106,444 54,522 52,556 48,464 91,234 48,464 39,525	01/01/10-31/12/12 01/01/11-31/12/13 01/01/12-31/12/14 01/01/12-31/12/14 01/01/10-31/12/12 01/01/10-31/12/12 01/01/11-31/12/13 01/01/11-31/12/13 01/01/12-31/12/14 01/01/12-31/12/14	07/04/13 01/04/14 05/04/15 05/04/15 07/04/13 07/04/13 01/04/14 01/04/14 05/04/15 05/04/15

Under the discussions with the candidate who it is hoped will become the permanent Finance Director of Alent plc, it is anticipated that he will receive a one-off restricted share award under the Alent Share Plan upon joining Alent early in the new year, to compensate him for the awards he will lose upon leaving his current employer.

• 3.3 Save as disclosed in this paragraph 3, no Alent Director or their immediate families, nor any person connected with any such Alent Director within the meaning of section 252 of the Companies Act has any interests (beneficial or non-beneficial) in the share capital of Cookson, Alent plc or any of their respective subsidiaries.

• 3.4 Save as disclosed in this paragraph 3, so far as the Alent Directors are aware, no other person involved in the Scheme or the Demerger has any interest, including conflicting ones, which is material to the Scheme or the Demerger.

4 Directors’ remuneration and pensions

4.1 Remuneration

The remuneration paid (including any contingent or deferred compensation but excluding pension benefits which are described in the service agreements of those Directors who receive pension benefits summarised in paragraph 6.1 below) and benefits in kind granted to the Alent Directors for the financial year ended 31 December 2011 (in their capacity as Directors or employees of the Cookson Group) are set out in the table below:

Alent Director Peter Hill CBE . . . . . . . . . . . . . . . . . . . . . . . . . . Steve Corbett . . . . . . . . . . . . . . . . . . . . . . . . . . . . Mike Butterworth . . . . . . . . . . . . . . . . . . . . . . . . Dr Emma FitzGerald . . . . . . . . . . . . . . . . . . . . . . Lars Förberg . . . . . . . . . . . . . . . . . . . . . . . . . . . . Noël Harwerth . . . . . . . . . . . . . . . . . . . . . . . . . . . Jan Oosterveld . . . . . . . . . . . . . . . . . . . . . . . . . . . Mark Williamson . . . . . . . . . . . . . . . . . . . . . . . . Total Directors’ remuneration . . . . . . . . . . . .	Base salary and Non-Executive Directors’ fees (£) 40,000 326,193 334,160 16,667 — — 40,000 — 757,020	Benefits in kind (£) — 13,929 13,507 — — — — — 27,436	Annual incentive bonuses (£) — 326,193 121,133 — — — — — 447,326	2011 total remuneration (£)	2011 total remuneration (£)
					40,000 666,315 468,800 16,667 — — 40,000 — 1,231,782

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4.2 Pension benefits

The total amounts paid, set aside or accrued by the Group for the provision of pensions, retirement or similar benefits to the Alent Directors (in their capacity as Directors or employees of the Cookson Group) for the financial year ended 31 December 2011 amounted to £240,667. Further details about the Directors’ current arrangements are set out in the service agreements of these Alent Directors summarised in paragraph 6 below.

5 Overall Remuneration Policy

The remuneration policy of the Company will be based upon the current remuneration policy of Cookson. The remuneration structure for Executive Directors and other senior managers aims to:

• attract and retain high calibre executives;

• strongly support the Company’s strategy;

• align management’s interests with those of shareholders; and

• foster a high performance culture, with a substantial portion of remuneration being performance linked.

The Company will aim to provide median total remuneration levels for target performance and up to upper quartile total remuneration levels for superior performance. This will be judged against FTSE 250 companies and relevant international sector-specific companies to reach a rounded judgement.

The remuneration of the Executive Directors will comprise base salary, annual incentive, the long-term incentive plan (“Alent Share Plan”) and retirement benefits. This is similar to Cookson except that it is simpler as it excludes both bonus deferral of the annual incentive and the matching shares which formed part of the Cookson LTIP.

The overall intention is that this will result, in broad terms and as far as possible, in a “no gain – no loss” position for Executive Directors as compared with the pre-Demerger Cookson remuneration arrangements, aside from some individuals who are either new hires or promotions.

This remuneration policy, pay positioning and pay structure may change at some point post-Demerger but it is not anticipated that these will change materially within 12 months following the Demerger.

5.1 Clawback arrangements

In the event that a misstatement is identified in the Company’s consolidated financial statements which requires the restatement of a prior year’s accounts in order to ensure compliance with the requirements of International Financial Reporting Standards or any applicable law, then such portion as the Alent Remuneration Committee deems appropriate of any variable executive remuneration (including from both the annual incentive and the long term incentive) resulting from a measure of financial performance affected by the misstatement will be subject to clawback provisions.

5.2 Base salary

Base salary levels will reflect the individual’s contribution and experience, the Company’s financial performance, the pay environment for employees within the Company and the salaries paid in comparator companies.

At the time of the Demerger, Mr Corbett’s promotion will be reflected in a salary increase of 20 per cent. due to changing role and increased responsibilities. Mr Corbett’s salary will be $750,000.

5.3 Annual Incentive

The Executive Directors will be eligible to receive an annual incentive calculated as a percentage of base salary and based on achievement against specified targets determined following consideration of the Company’s financial budget and prior year actual financial results. The target range will be set to ensure that maximum bonuses are only paid for significantly exceeding expectations. There will be no deferral of annual bonuses for Executive Directors.

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The Alent Remuneration Committee shall have the discretion to determine that actual incentive payments should be lower than levels calculated by reference to achievement against the specified targets if it considers this to be appropriate.

Mr Corbett’s maximum annual incentive potential will be 125 per cent. of base salary and his target annual incentive potential will be 62.5 per cent. of base salary. Mr Butterworth will remain eligible for a maximum annual incentive potential of 100 per cent. of base salary and a target annual incentive of 50 per cent. of base salary for 2013, with any payout pro-rated to his date of date of departure. This will be based 50 per cent. on the performance of Vesuvius plc and 50 per cent. on the performance of Alent plc.

5.4 Alent Share Plan

Since options or awards over Alent Shares cannot be granted post-Demerger under the existing Cookson Employee Share Plans (as these relate to Cookson Shares), it is proposed that the Alent Share Plan be adopted. The Alent Share Plan does not replicate the existing Cookson Award Share Plans but is structured as an “umbrella plan”, which will give greater flexibility in terms of the awards which can be made, in line with current market practice. This means that Alent will only need to have one set of share plan rules to cover all its current and prospective share plan needs, rather than several sets of rules being needed, as is currently the case for the Cookson Employee Share Plans.

Full details of the Alent Share Plan are set out in paragraph 11.5 of Part XIII of this document.

It is the current intention that, for Executive Directors, awards granted within 12 months following the Demerger will likely be granted in the form of performance share awards, although the Alent Remuneration Committee reserves the right to grant market-price options. It is not intended to grant deferred share bonus awards to Executive Directors, although, under the discussions with a potential permanent Finance Director for Alent plc, it is anticipated he will receive a one-off award of restricted shares to compensate him for the awards he will lose upon leaving his current employer.

Following the 12 month period after the Demerger, the Committee shall have the discretion to consider the grant of different types of award under the Alent Share Plan.

The Alent Share Plan is similar to the current Cookson LTIP except that it has been simplified to remove matching shares whilst providing flexibility as to the types of award that can be granted.

(a) Performance conditions for performance share awards

The vesting of performance share awards granted by the Company will be based on the Company’s performance against specified performance conditions measured over a three year period.

The present intention is that the performance metrics will be similar to Cookson (EPS and TSR based), and the performance scale is intended to be set so that it is of similar difficulty to that which applied under the Cookson LTIP.

(b) Performance conditions for market-price options

It is the current intention that any market-price options granted by the Company will vest subject to an EPS growth condition. However, the Alent Remuneration Committee shall have the discretion to determine the use of other financial or operational measures.

(c) Eligibility and individual grant levels

Executive Directors will normally be eligible to receive, on an annual basis:

• a performance share award with a face value of up to 200 per cent. of base salary; or

• a market-price option with a face value of up to 300 per cent. of base salary.

The Alent Remuneration Committee shall have the discretion to grant a mix of performance share awards and market-price options to an executive if the commercial value of the mixed grant is not higher than the commercial value that would have been otherwise provided to the executive under a single grant.

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Cookson’s remuneration consultants have confirmed that the total potential annual value of the intended share plan awards for the Executive Directors is of a broadly similar value to the total potential annual value of the existing share plan awards for the Cookson Executive Directors.

5.5 Pension and other benefits

Pensions and other benefit arrangements for Executive Directors will remain largely unchanged following the Demerger.

6 Directors’ service contracts and letters of appointment

6.1 Executive Directors’ service contracts

Peter Hill CBE

Pursuant to the terms of a letter of engagement with Alent plc dated 31 October 2012, Peter Hill agreed to serve as a Non-Executive Director and Chairman of Alent plc for an annual fee of £165,000. Mr Hill was appointed as Chairman with effect from 31 October 2012, and is to stand for election for an annual term with effect from Alent’s annual general meeting in May 2013. Mr Hill’s appointment as Chairman can be terminated by either party on 12 months’ notice during the first year of Mr Hill’s appointment, and six months’ notice thereafter. It is subject to Alent’s Articles and will terminate automatically if Mr Hill is removed from office by a resolution of Alent Shareholders or is not re-elected to office. Any compensation for loss of office would be based upon his fee. None of the other Non-Executive Directors is entitled to receive compensation for loss of office at any time.

Steve Corbett

Steve Corbett is employed as Chief Executive Officer of Alent pursuant to the terms of a service agreement made with Alent Investments Limited dated 31 October 2012, which will be assigned to Alent upon completion of the Demerger. Mr Corbett will be paid a basic annual salary of $750,000 and will be eligible to receive a discretionary annual bonus based on company performance. In addition, he will be entitled to certain benefits in kind, including a company car allowance and the assessed benefits arising from the contractual payments of medical insurance and life assurance. Mr Corbett currently participates in Cookson’s US pension plans. Under the Cookson Electronics, Inc 401(k) Savings Plan, Cookson matches any contribution made by Mr Corbett up to 6 per cent. of cash compensation, and then pays an additional discretionary matching contribution of up to 7 per cent. of Mr Corbett’s cash compensation each year. Under the Cookson Supplemental Savings and Retirement Plan for Executives, Cookson matches any contribution made by Mr Corbett up to 6 per cent. of cash compensation, and then pays an additional discretionary matching contribution of up to 7 per cent. of Mr Corbett’s cash compensation each year. In addition Mr Corbett receives a contribution of 9.1 per cent. of his cash compensation each year. From 1 January 2013 Mr Corbett will receive a pension allowance equivalent to 30 per cent. of his base salary to invest in pension provision as he chooses or to take as a salary supplement. Mr Corbett’s appointment will be terminable by Alent on not less than 12 months’ written notice, and by Mr Corbett on not less than six months’ written notice. Alent has the option to make a payment in lieu of part or all of the required notice period. Any such payment in lieu will consist of the base salary, pension contributions and value of benefits to which Mr Corbett would have been entitled for the duration of the remaining notice period, net of statutory deductions in each case, less $20,000. Half of this payment will be made in a lump sum, the remainder in six equal monthly instalments commencing in the month in which the midpoint of Mr Corbett’s foregone notice period falls; if Mr Corbett finds a role paying equivalent or better base salary or fees, no further instalments shall be payable, and the value of any lesser new base salary or fees shall be deducted from any further instalments. Mr Corbett is subject to certain non-compete and non-solicitation covenants for a period of 12 months following the termination of his employment. The agreement will be governed by the law of the State of Rhode Island, USA.

Mike Butterworth

Mike Butterworth will remain employed by Cookson on his current terms, under which he will provide transitional support services to Alent and Vesuvius. Mr Butterworth will not be employed by

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Alent, although he will be appointed a statutory director of Alent until the employment of the permanent Finance Director commences. He will not receive any additional remuneration from Alent for performing these duties.

6.2 Non-Executive Directors’ letters of appointment

Dr Emma FitzGerald

Pursuant to the terms of a letter of engagement with Alent plc dated 31 October 2012, Emma FitzGerald agreed to serve as Non-Executive Director of Alent plc for an annual fee of £45,000. Dr Fitzgerald will be required to stand for election at the first Alent annual general meeting in 2013 and for re-election annually thereafter. Her appointment is subject to Alent’s Articles and will terminate automatically if Dr Fitzgerald is removed from office by a resolution of Alent Shareholders or is not re-elected to office.

Jan Oosterveld

Pursuant to the terms of a letter of engagement with Alent plc dated 31 October 2012, Jan Oosterveld agreed to serve as Non-Executive Director of Alent plc for an annual fee of £45,000. Mr Oosterveld will be required to stand for election at the first Alent annual general meeting after his appointment and for re-election annually thereafter. His appointment is subject to Alent’s Articles and will terminate automatically if Mr Oosterveld is removed from office by a resolution of Alent Shareholders or is not re-elected to office.

Lars Förberg

Pursuant to the terms of a letter of engagement with Alent plc dated 31 October 2012, Lars Förberg agreed to serve as Non-Executive Director of Alent plc for an annual fee of £45,000. Mr Förberg will be required to stand for election at the first Alent annual general meeting after his appointment and for re-election annually thereafter. His appointment is subject to Alent’s Articles and will terminate automatically if Mr Förberg is removed from office by a resolution of Alent Shareholders or is not re-elected to office. Mr Förberg is managing partner of Cevian Capital, which held just over 20 per cent. of Cookson’s issued share capital on the date of his appointment.

Mark Williamson

Pursuant to the terms of a letter of engagement with Alent plc dated 31 October 2012, Mark Williamson agreed to serve as Non-Executive Director of Alent plc for an annual fee of £45,000, plus an additional fee of £15,000 payable to him as Chairman of the Audit Committee and an additional fee of £5,000 payable to him as Senior Independent Director. Mr Williamson will be required to stand for election at the first Alent annual general meeting after his appointment and for re-election annually thereafter. His appointment is subject to Alent’s Articles and will terminate automatically if Mr Williamson is removed from office by a resolution of Alent Shareholders or is not re-elected to office.

Noël Harwerth

Pursuant to the terms of a letter of engagement with Alent plc dated 31 October 2012, Noël Harwerth agreed to serve as Non-Executive Director of Alent plc for an annual fee of £45,000, plus an additional fee of £15,000 payable to her as Chairman of the Remuneration Committee. Mrs Harwerth will be required to stand for election at the first Alent annual general meeting after her appointment and for re-election annually thereafter. Her appointment is subject to Alent’s Articles and will terminate automatically if Mrs Harwerth is removed from office by a resolution of Alent Shareholders or is not re-elected to office.

7 Corporate governance

7.1 Corporate governance overview

From Alent Admission, Alent plc will comply with the Corporate Governance Code and regime in line with the procedures followed by Cookson to date. Cookson has complied with the provisions of the Corporate Governance Code throughout the year ended 31 December 2011 and thereafter through to 30 October 2012 (being the latest practicable date prior to the publication of this document).

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7.2 The Alent Board

As at the date of this document, the Board consists of eight members: the Non-Executive Chairman, Peter Hill CBE; the Chief Executive, Steve Corbett; interim Finance Director, Mike Butterworth; and five Non-Executive Directors, namely Dr Emma FitzGerald, Lars Förberg, Noël Harwerth, Jan Oosterveld and Mark Williamson. The biographical details of the Alent Directors are set out in paragraph 2 of this Part XII.

The Board considers each of the Non-Executive Directors (other than Lars Förberg who is Managing Partner of Cevian Capital which held just over 20 per cent. of Cookson’s issued share capital on the date of his appointment to the Alent Board) to be independent of management and free from any business or other relationship which could affect the exercise of their independent judgement. The Chairman satisfied the independence criteria on his appointment to the Board.

The roles of the Chairman and Chief Executive are distinct and separate, with a clear division of responsibilities.

The Board nominates one of the Non-Executive Directors to act as Senior Independent Director and provide an alternative contact at board level, other than the Chairman, to whom shareholder matters can be addressed. Mark Williamson currently holds the position of Senior Independent Director.

The Corporate Governance Code recommends that all directors of FTSE 350 companies be subject to annual election by shareholders. It is planned that the full Alent Board will stand for election at Alent’s next annual general meeting.

7.3 Board committees

The principal committees of the Board are the Audit, Remuneration and Nominations Committees, with formally delegated duties and responsibilities and written terms of reference. From time to time, separate committees may be set up by the Board to consider specific issues when the need arises.

(a) Alent Audit Committee

The Audit Committee members are the following Non-Executive Directors: Dr Emma FitzGerald, Noël Harwerth, Jan Oosterveld and Mark Williamson. The Audit Committee is currently chaired by Mark Williamson.

The primary role and responsibilities of the Audit Committee are:

• monitoring the integrity of the Company’s half-year and annual financial statements, interim management statements and any other formal announcements relating to the Company’s financial performance;

• reviewing the process whereby the Board assesses the effectiveness of Alent’s internal controls and risk management systems;

• establishing and reviewing procedures for detecting fraud, and systems and controls for the prevention of bribery, along with overseeing the Company’s arrangements for employees to raise concerns about possible wrongdoing in financial reporting or other matters;

• monitoring and reviewing the effectiveness of the Company’s internal audit function;

• monitoring and reviewing the auditor’s independence, objectivity and effectiveness, taking into account professional and regulatory requirements;

• making recommendations to the Board on the appointment and dismissal of the auditor and approving the remuneration and terms of engagement of the auditor; and

• helping to strengthen the independent position of the auditor by providing a direct channel of communication between it and the Non-Executive Directors.

(b) Alent Remuneration Committee

The Remuneration Committee members are the following. Non-Executive Directors: Dr Emma FitzGerald, Noël Harwerth, Jan Oosterveld and Mark Williamson. The Remuneration Committee is currently chaired by Noël Harwerth.

The primary role and responsibilities of the Remuneration Committee are:

• setting the appropriate remuneration for the Chairman, the Executive Directors and the Company Secretary;

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• recommending and monitoring the level and structure of remuneration for senior management, being the first layer of management below Board level; and

• overseeing the operation of any executive share incentive plans.

(c) Alent Nominations Committee

The Nominations Committee members are Peter Hill CBE, Dr Emma FitzGerald, Noël Harwerth, Jan Oosterveld, Lars Förberg and Mark Williamson. The Nominations Committee is currently chaired by Peter Hill CBE.

The primary role and responsibilities of the Nominations Committee are:

• advising the Board on appointments to, and retirements and resignations from, the Board; and

• reviewing the Company’s succession plans for members of the Board.

The Nominations Committee has no authority to appoint or offer to appoint a Director. Appointment remains a matter for the full Board.

8 Alent Directors’ confirmations

None of the Alent Directors has, at any time during the five years preceding the date of this document:

• (a) been convicted in relation to a fraudulent offence;

• (b) been associated with any bankruptcy, receivership or liquidation of any company while acting in the capacity of a member of the administrative, management or supervisory body or director or senior manager (who is relevant to establishing that the company has the appropriate expertise and experience for the management of the company’s business) of such company;

• (c) been subject to any official public incrimination and/or sanction by any statutory or regulatory authorities (including designated professional bodies); or

• (d) been disqualified by a court from acting as a director of a company or member of the administrative, management or supervisory bodies of any company or from acting in the management or conduct of the affairs of any company.

9 Conflicts of interest

• 9.1 Save as disclosed in this paragraph 9, none of the Alent Directors has any actual or potential conflicts of interests between their duties to Alent plc and their private interests and/or other duties they may have to third parties.

• 9.2 Lars Förberg is a managing partner of Cevian Capital which held just over 20 per cent. of Cookson’s issued share capital on the date of his appointment to the Alent Board and as at 30 October 2012 (being the latest practicable day prior to publication of this document).

• 9.3 Jan Oosterveld will be a non-executive director of Vesuvius for a transitional period whilst the Chairman of Vesuvius leads a nominations process to identify and appoint a suitably qualified replacement director.

• 9.4 Save as disclosed in this paragraph 9, no Alent Director was selected to be a director of Alent plc pursuant to any arrangement or understanding with any major shareholder, customer, supplier or other person having a business connection with Alent.

• 9.5 There are no restrictions agreed by any Alent Director on the disposal within a certain period of time of his or her holding in Alent plc’s securities.

• 9.6 None of the Alent Directors has any family relationship with another Alent Director.

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10 Directorships and partnerships

Save as set out below, the Alent Directors have not held any directorships of any company (other than subsidiary companies within the Cookson Group), or been a partner in a partnership at any time in the five years prior to the date of this document:

Alent Director Peter Hill CBE . . . . . . . Steve Corbett . . . . . . . . . Mike Butterworth . . . . . Dr Emma FitzGerald . . . Lars Förberg . . . . . . . . . Noël Harwerth . . . . . . . . Jan Oosterveld . . . . . . . .	Current directorships/partnerships Alent plc Cookson Group plc Alent plc Cookson Group plc Alent plc Cookson Group plc St. Ives plc Alent plc Cookson Group plc The Windsor Leadership Trust Alent plc Cevian Capital AG Cevian Capital Ltd Panalpina Welttransport (Holding) AG Alent plc Avocet Mining plc GE Capital Bank Ltd Harry Winston Diamond Corporation LME Holdings Ltd RSA Insurance Group plc Standard Life plc Sumitomo Mitsui Banking Corporation Europe Ltd Alent plc Cookson Group plc Barco NV (Corporate Director) Candover Investments plc	Former directorships/partnerships
		Meggitt plc Laird plc Advanced Performance Materials Ltd British Engraving and Nameplate Company Ltd Gunn Graphical Industries Ltd IMD Solutions Ltd Instrument Specialities Europe Ltd Laird Group Ltd Laird Holding Ltd Laird Nominees Ltd Laird Nominees (No 1) Ltd Laird Nominees (No 3) Ltd Transport Engineering Ltd 17 Cliveden Place Ltd Intrum Justitia Anglo Irish Bank The Corporate Services Group Ltd Impellam Group plc Logica plc Metronet Rail BCV Ltd Metronet Rail SSL Ltd Tube Lines Ltd Atos Origin SA Continental AG Crucell NV

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Alent Director Mark Williamson . . . . .	Current directorships/partnerships Alent plc Imperial Tobacco Group plc International Power Middle East Finance International Power Humboldt National Grid plc	Former directorships/partnerships
		International Power plc Al Kamil Investments Limited Australian Power Investments B.V BEI Limited British Electricity International (OS) Limited British Electricity International (Services) Limited British Electricity International Limited Enerloy Pty Limited European Power Holdings B.V. GDF SUES IP Limited Impala Dodo Limited Impala Kingfisher Limited Impala Kookaburra Limited Impala Magpie Limited International Power (Assets) Limited International Power (Berkeley) Limited International Power (Condor) Limited International Power (Czech Republic) Limited International Power (Essex) Limited International Power (Falcon) Limited International Power (Fawkes) International Power (Genco) Limited International Power (Hanover) Limited International Power (Impala) International Power (Jersey) Limited International Power (Kent) Limited International Power (Kestrel) International Power (Merlin) Limited International Power (Norfolk) Limited International Power (Saudi Arabia) Limited International Power (Shuweihat) Limited International Power (Suffolk) Limited International Power (Surrey) Limited International Power (Sussex) Limited International Power (Trading) Limited International Power (Turkey) Limited International Power (UK Investments) Limited International Power (US) Investments Limited International Power (Zebra) Limited International Power America, Inc. International Power Australia Finance International Power Australia Funding (1) International Power Australia Funding (2) International Power Australia Funding (3) International Power Australia Holdings (1) Limited International Power Australia Holdings Limited International Power Columbus International Power Consolidated Holdings Limited International Power Dutch Finance

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Alent Director	Current directorships/partnerships	Former directorships/partnerships
		International Power Europe Limited International Power Finance (2010) Plc International Power Finance (Jersey) II Limited International Power Finance (Jersey) III Limited International Power Finance International Power Global Developments Limited International Power Group Trustee Limited International Power Holdings Limited International Power Levanto Investments Limited International Power Luxembourg Finance Limited International Power Luxembourg Holdings Limited International Power North Chennai O&M Limited International Power Plant Maintenance Limited International Power Plc International Power Portugal Finance International Power S.A. IP (Aire) Limited IP (Humber) Limited IP (Swale) Limited IP Goshawk Company Llc IP Karugamo Holdings Limited Ip Maestrale Finance Limited Ip Maestrale Investments Limited Ip Malaysia IPM (North Wales) Limited IPM (Osprey) Holdings Limited IPM Energy Trading Limited IPM Portfolio Trading Limited IPM Tri Gen B.V Ipower Limited IPR Central Services (No. 1) Limited IPR Central Services (No. 2) Limited IPR Central Services (No. 3) Limited IPR Central Services (No. 4) Limited IPR Guernsey Investments Limited IPR Insurance Company Limited National Power (Kot Addu) Limited National Power (Thailand) Limited National Power Al Kamil Investments Limited National Power Australia Finance Limited National Power Australia Investments Limited National Power International Holdings National Power International Holdings B.V. National Power International Holdings B.V. National Power Limited

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Alent Director	Current directorships/partnerships	Former directorships/partnerships
		National Power Oman Investments Limited National Power Pacific Company Limited National Power Share Schemes Limited Normanbright (UK Co 5) Limited Normanframe (UK Co 6) Limited Normangrange (UK Co 4) Limited Princemark Limited Swindon Power Technical Services Limited

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PART XIII ADDITIONAL INFORMATION

1 Alent plc

• 1.1 Alent plc was incorporated with the name Alent plc on 31 August 2012 and registered in England and Wales with registered number 8197966 as a public company limited by shares.

• 1.2 The principal legislation under which Alent plc operates and under which the Alent Shares have been created is the Companies Act and regulations made thereunder.

• 1.3 Alent plc is domiciled in England and Wales. The address of its registered and head office is Forsyth Road, Sheerwater, Woking, Surrey GU21 5RZ (telephone number: +44 (0) 1483 758 400).

• 1.4 Alent plc has not traded since its incorporation.

• 1.5 KPMG LLP, whose address is 15 Canada Square, Canary Wharf, London E14 5GL, is the auditor of Alent plc, and has been the only auditor of Alent plc since its incorporation and is a member firm of the Institute of Chartered Accountants in England and Wales.

2 Share capital

• 2.1 On incorporation, Alent plc’s share capital consisted of one ordinary share with a par value of £1.00 (the “ Alent Subscriber Share ”) which was issued, fully paid, to the Initial Alent Shareholder.

• On 18 September 2012, 50,000 redeemable non-voting preference shares of £1.00 each (the “ Alent Redeemable Preference Shares ”) were issued to the Initial Alent Shareholder at par value credited as fully paid to enable Alent plc to obtain a trading certificate pursuant to section 761 of the Companies Act.

• 2.2 At a general meeting of Alent plc held on 31 October 2012, the Initial Alent Shareholder resolved, inter alia, that:

• (i) the Demerger be approved and in connection with the Demerger:

  • (a) the Alent Directors be authorised and instructed to do or procure to be done all such acts and things on behalf of Alent plc and any of its subsidiaries as they consider necessary or expedient for the purpose of giving effect to the Demerger; and

  • (b) the entry by Alent plc into the Separation Agreements and such other documents as the Alent Directors deem to be necessary or desirable for the purpose of giving effect to the Demerger be and are hereby approved and the Alent Directors (or a duly authorised committee of the Directors) be authorised to carry the same into effect;

• (ii) new Alent Articles (as described in paragraph 3 of this Part XIII) be approved and adopted;

• (iii) with effect from the Demerger Effective Time, the Alent Subscriber Share be converted into and redesignated as a deferred share of £1.00 (the “Alent Deferred Share”) having the rights and being subject to the conditions set out in the Alent Articles as adopted pursuant to the resolution described in (ii) above;

• (iv) subject to and conditional upon Alent Shares having been allotted and issued to Vesuvius Shareholders in consideration of the transfer by Vesuvius plc to Alent plc of the entire issued share capital of Alent Investments Limited, the capital of Alent plc be reduced by:

  • (a) cancelling and extinguishing paid-up capital on each of the Alent Shares in issue immediately prior to the confirmation by the Court of the Alent Capital Reduction to the extent that the amount paid up on each such ordinary share immediately following such cancellation shall be 10 pence; and

  • (b) reducing the nominal value of each of the Alent Shares to 10 pence;

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(v) with effect from the Demerger Effective Time, the Alent Directors be generally and unconditionally authorised:

• (a) pursuant to and in accordance with section 551 of the Companies Act to exercise all the powers of Alent plc to allot shares or grant rights to subscribe for or convert any security into shares (as defined in section 551(1) of the Companies Act) in Alent plc:

• (A) as required for the purposes of the Demerger;

• (B) up to a maximum aggregate nominal amount of £9,278,581 (representing approximately one third of the expected issued ordinary share capital of Alent plc immediately after the Alent Capital Reduction Effective Date); and

• (C) comprising equity securities (as defined in section 560(1) of the Companies Act) up to a further nominal amount of £9,278,581 in connection with an offer by way of rights issue,

such authorities to expire at the end of the next annual general meeting of Alent plc or on 30 June 2013, whichever is the earlier, but, in each case, so that Alent plc may make offers and enter into agreements during the relevant period which would, or might, require relevant securities to be allotted after the authority ends.

For the purposes of this resolution “rights issue” means an offer to Alent Shareholders in proportion (as nearly as may be practicable) to their existing holdings, to subscribe further securities by means of the issue of a renounceable letter (or other negotiable document) which may be traded for a period before payment for the securities is due, but subject to such exclusions or other arrangements as the Alent Directors may deem necessary or expedient in relation to treasury shares, fractional entitlements, record dates or legal, regulatory or practical problems in, or under the laws of, any territory;

(b) with effect from the Demerger Effective Time and subject to the passing of resolution (v)(a) above, the Alent Directors be empowered to allot equity securities (as defined in section 560(1) of the Companies Act) wholly for cash:

• (A) pursuant to the authority given by paragraph (B) of resolution (v)(a) above or where the allotment constitutes an allotment of equity securities by virtue of section 560 of the Companies Act in each case:

• (I) in connection with a pre-emptive offer; and

• (II) otherwise than in connection with a pre-emptive offer, up to an aggregate nominal amount of £1,391,787; and

• (B) pursuant to the authority given by paragraph (C) of resolution (v)(a) above in connection with a rights issue,

as if section 561(1) of the Companies Act did not apply to any such allotment; such power to expire at the end of the next annual general meeting of Alent plc or on 30 June 2013, whichever is the earlier, but so that Alent plc may make offers and enter into agreements during this period which would, or might, require equity securities to be allotted after the power ends and the Alent Board may allot equity securities under any such offer or agreement as if the power had not ended.

For the purposes of this resolution: “rights issue” has the same meaning as in resolution (v)(a) above; “pre-emptive offer” means an offer of equity securities open for acceptance for a period fixed by the Alent Directors to holders (other than Alent plc) on the register on a record date fixed by the Alent Directors of Alent Shares in proportion to their respective holdings, but subject to such exclusions or other arrangements as the Alent Directors may deem necessary or expedient in relation to treasury shares, fractional entitlements, record dates or legal, regulatory or practical problems in, or under the laws of, any territory; and the nominal amount of any securities shall be taken to be, in the case of rights to subscribe for or convert any securities into shares of Alent plc, the nominal amount of such shares which may be allotted pursuant to such rights;

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• (vi) with effect from the Demerger Effective Time, pursuant to the Alent Articles (as adopted pursuant to resolution (ii) above), general and unconditional authority be given for the purpose of section 701 of the Companies Act for market purchases (as defined in section 693 of the Companies Act) by Alent plc of the Alent Shares, provided that:

• (a) the maximum number of Alent Shares which may be purchased shall be 27,835,743 ordinary shares of 10 pence each;

• (b) the minimum price which may be paid for each Alent Share shall not be less than the nominal value of the Alent Shares at the time of purchase;

• (c) the maximum price which may be paid for each Alent Share shall be an amount equal to the higher of (i) 105 per cent. of the average of the closing price of the Alent Shares as derived from the London Stock Exchange Daily Official List on the five business days immediately preceding the date on which such share is contracted to be purchased and (ii) the price stipulated by Article 5(1) of the Buy-Back and Stabilisation Regulation of 22 December 2003; and

• (d) this authority shall expire at the end of the next annual general meeting of Alent plc or on 30 June 2013, whichever is the earlier (except in relation to the purchase of shares the contract for which was concluded before the expiry of such authority and which might be implemented wholly or partly after such expiry);

• (vii) with effect from the Demerger Effective Time, Alent plc and those companies which are subsidiaries of the Company at any time during the period for which this resolution has effect be authorised for the purposes of Part 14 of the Companies Act during the period from the date of the passing of the resolution to the end of the next annual general meeting of Alent plc or 30 June 2013, whichever is the earlier:

• (a) to make political donations to political parties, and/or independent election candidates;

• (b) to make political donations to political organisations other than political parties; and

• (c) to incur political expenditure,

up to an aggregate amount of £100,000, and the amount authorised under each of paragraphs (a) to (c) above shall also be limited to such amount.

Words and expressions defined for the purposes of the Companies Act shall have the same meaning in this resolution;

• (viii) a general meeting of Alent plc other than an annual general meeting may be called on not less than 14 clear days’ notice;

• (ix) conditional on the Demerger taking effect, Alent plc be authorised to repurchase the Alent Deferred Share for no consideration and the Alent Deferred Share subsequently be cancelled;

• (x) Alent plc be authorised, subject to and in accordance with the provisions of the Companies Act and the Alent Articles, to send, convey or supply all types of notices, documents or information to Alent Shareholders by means of electronic equipment for the processing (including digital compression), storage and transmission of data, employing wires, radio optical technologies, or any other electromagnetic means, including by making such notices, documents or information available on a website; and

• (xi) subject to and conditional upon the approval of the Cookson Shareholders and the Demerger becoming effective and with effect from the Demerger Effective Time, the establishment of the Alent Share Plan, the principal terms of which are summarised in paragraph 8.1 of Part XII be approved and:

• (a) the Directors be and are hereby authorised to make such amendments to the Alent Share Plan as may be necessary to obtain HM Revenue & Customs approval to the same and to do all things necessary or expedient to carry the Alent Share Plan into effect; and

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• (b) the Directors be and are hereby authorised to establish further employee share plans based on the Alent Share Plan, but modified to take account of local tax, exchange control or securities laws in any overseas jurisdiction provided that the shares made available under such further employee share plans are treated as counting towards the limits on participation in the Alent Share Plan.

• 2.3 At the date of this document, the issued and fully paid share capital of Alent plc is as follows:

Class of share Ordinary share with a par value of £1.00 . . . . . . . . . . . . . . . . . . . . . . . . . Alent Redeemable Preference Shares with a par value of £1.00 . . . . . . .	Number of shares in issue 1 50,000	Total nominal value	Total nominal value
			£ 1 £50,000

• 2.4 At the Demerger Effective Time, the share capital of Vesuvius plc will be reduced and Alent plc will issue Alent Shares, credited as fully paid, to the holders of Vesuvius Shares in consideration for the transfer to it by Vesuvius plc of the Performance Materials division. Vesuvius Shareholders will receive one new Alent Share for each Vesuvius Share held by them. It is proposed then to convert the Alent Subscriber Share into a deferred share (the Alent Deferred Share). Accordingly, the issued and fully paid share capital of Alent plc immediately following Alent Admission is expected to be as follows (on the assumption that no new Alent Shares or Vesuvius Shares will be issued between the date of this document and the Demerger Effective Time).

Class of share Alent Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Alent Deferred Share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Alent Redeemable Preference Shares . . . . . . . . . . . . . . . . . . . . . . . . . .	Number of shares in issue 278,357,433 1 50,000	Total nominal value
		£278,357,433
		£ 1
		£ 50,000

• 2.5 Following Admission, it is proposed that Alent plc will reduce its share capital in order to create distributable reserves.

• 2.6 As at the date of this document, Alent plc does not hold any Alent Shares in treasury.

• 2.7 No commissions, discounts, brokerages or other special terms have been granted in respect of the issue of any share capital of Alent plc.

• 2.8 Application will be made to the UK Listing Authority and the London Stock Exchange for up to 278,700,000 Alent Shares to be admitted to the premium listing segment of the Official List and to trading on the London Stock Exchange’s market for listed securities, respectively. As at the date of this document, no Alent Shares are admitted to trading on a regulated market. If the Demerger proceeds as currently envisaged, it is expected that Admission will become effective, and that dealings in the Alent Shares will commence on the London Stock Exchange, at 8.00 a.m. (London time) on 19 December 2012. The Alent Shares have not been marketed to, and are not available in whole or in part for purchase by, the public in the United Kingdom or elsewhere in connection with the introduction of the Alent Shares to the premium listing segment of the Official List. No application has been or is currently intended to be made for the Alent Shares to be admitted to listing elsewhere or dealt in on any other exchange.

• 2.9 The Alent Shares are in registered form and are capable of being held in certificated or uncertificated form. Application has been made to Euroclear for the Alent Shares to be enabled for dealings through CREST as a participating security. No temporary documents of title will be issued. The International Securities Identification Number (ISIN) for the Alent Shares is GB00B7T18K89. The rights attaching to the Alent Shares are set out in paragraph 3 of this Part XIII.

3 Summary of the Alent Articles

The Alent Articles, adopted by a special resolution of Alent plc passed on 31 October 2012, contain, inter alia, provisions to the following effect:

3.1 Objects

Section 31 of the Companies Act provides that the objects of a company are unrestricted unless any restrictions are set out in its articles of association. There are no such restrictions in the Alent Articles and the objects of Alent plc are therefore unrestricted.

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3.2 Rights attaching to Alent Shares

• (a) Voting rights

• (i) Subject to the Articles generally and to any special rights or restrictions attached to any class of shares, at a general meeting, every shareholder who is present in person and every duly appointed proxy has one vote on a show of hands, and on a poll every shareholder who is present in person or by proxy has one vote for every ordinary share of which he is the holder. A shareholder entitled to attend and vote at a general meeting is entitled to appoint a proxy or proxies to exercise all or any of his rights to attend and speak and vote in his place. A shareholder may appoint more than one proxy in relation to a general meeting provided that each proxy is appointed to exercise the rights attached to a different share or shares held by the shareholder. Proxies need not be shareholders of Alent plc. For the purposes of determining which persons are entitled to attend or vote at a meeting and how many votes such person may cast, Alent plc may specify in the notice of the meeting a time, not more than 48 hours before the time fixed for the meeting, by which a person must be entered on the register of members in order to be entitled to attend or vote at the meeting.

• (ii) No shareholder will, unless the Alent Directors otherwise determine, be entitled in respect of any share held by him, to vote either personally or by proxy at a general meeting, or to exercise any other right conferred by membership in relation to general meetings if any call, or other sum presently payable by him to Alent plc in respect of that share, remains unpaid; or he, or any person who appears to be interested in the shares held by him, has been served with a notice pursuant to section 793 of the Companies Act, and is in default for the prescribed period.

(b) Joint holders

In the case of joint holders of shares, only the vote of the senior holder who votes (and any proxies duly authorised by him) may be counted. For this purpose, the senior holder of a share shall be determined by the order in which the names of the joint holders stand in the register of members.

• (c) Dividends

Alent plc may by ordinary resolution declare dividends, provided that no dividend may exceed the amount recommended by the Alent Directors. Dividends must be paid out of profits available for distribution. The Alent Directors may also from time to time pay interim dividends on shares of any class of such amounts, on such dates, and in respect of such periods as they think fit.

The Alent Directors may offer shareholders the right to elect to receive, in lieu of dividend (or part thereof), specific assets (and in particular new shares or debentures of any other company credited as fully paid). Before they may do this, the shareholders must have passed an ordinary resolution authorising the Alent Directors to make the offer.

The Alent Directors may retain any dividend payable on or in respect of a share on which Alent plc has a lien and may apply the same in or towards satisfaction of the monies payable to Alent plc in respect of that share. Any dividend unclaimed after a period of 12 years after it was declared will be forfeited and revert to Alent plc.

The Alent Directors may withhold payment of all or any part of dividends or other monies payable in respect of Alent plc’s shares from a person with 0.25 per cent. interest or more if such person has been served with a notice after failure to provide Alent plc with information concerning interest in those shares required to be provided under the Companies Act.

3.3 Rights attaching to Alent Redeemable Preference Shares

• (a) Voting rights

The Alent Redeemable Preference Shares carry no rights to receive notice of or attend and vote at any General Meeting of Alent plc unless a resolution is to be proposed to wind up Alent plc, or to vary, modify, alter or abrogate any of the rights attaching to the Alent Redeemable Preference Shares.

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• (b) Participation in profits or assets

The Alent Redeemable Preference Shares carry no rights to participate in the profits or assets of Alent plc, except as set out below.

If there is a return of capital on winding-up or otherwise, the assets of Alent plc available for distribution among the members shall be applied first in repaying in full the holder of the Alent Redeemable Preference Shares the amount paid up on such shares.

• (c) Redemption

Subject to the provisions of the Companies Act, Alent plc may redeem the Alent Redeemable Preference Shares at their nominal amount at any time specified by either the Alent Directors or the holders of the Alent Redeemable Preference Shares. On the redemption of any Alent Redeemable Preference Shares, such share shall be cancelled.

3.4 Rights attaching to Alent Deferred Share

Prior to the Demerger Effective Time, the holder of the Alent Deferred Share shall have the same rights as any holder of ordinary shares has in respect of those shares.

With effect from the Demerger Effective Time:

• (a) the Alent Deferred Share shall carry no rights to receive any of the profits of Alent plc available for distribution by way of dividend or otherwise;

• (b) except as provided below, the Alent Deferred Share shall carry no rights to participate in profits or assets of Alent plc;

• (c) if there is a return of capital on winding-up or otherwise, the assets of Alent plc available for distribution among the members shall be applied first in repaying in full to the holder of the Alent Deferred Share the amount paid up on such share; and

• (d) the holder of the Alent Deferred Share shall not be entitled to receive notice of or attend and vote at any General Meeting of Alent plc unless a resolution is to be proposed which varies, modifies, alters or abrogates any of the rights attaching to the Alent Deferred Share.

3.5 Variation of rights

Whenever the share capital of Alent plc is divided into different classes of shares, the special rights attached to any class may be varied or abrogated, subject to the provisions of the Companies Act, either (a) with the consent in writing of the holders of three-quarters in nominal value of the issued shares of that class, or (b) with the sanction of a special resolution passed at a separate meeting of the holders of the shares of that class. At every separate meeting, the necessary quorum is two persons holding, or representing by proxy, not less than one-third in nominal value of the issued shares of the class (but at any adjourned meeting any holder of shares of the class present, in person or by proxy, will be a quorum). Any holder of shares of the class present in person or by proxy may demand a poll and every such holder will, on a poll, have one vote for every share of the class held by him.

The special rights attached to any class of shares will not, unless otherwise expressly provided by the terms of issue, be deemed to be varied by (a) the creation or issue of further shares ranking, as regards participation in the profits or assets of Alent plc, in some or all respects equally with them but in no respect in priority to them, or (b) the purchase or redemption by Alent plc of any of its own shares.

3.6 Transfer of shares

All transfers of shares which are in certificated form may be effected by transfer in writing in any usual or common form or in any other form acceptable to the Alent Directors and may be under hand only. The instrument of transfer must be signed by or on behalf of the transferor and (except in the case of fully-paid shares) by or on behalf of the transferee. The transferor will remain the holder of the shares concerned until the name of the transferee is entered in the register of members.

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Uncertificated shares may be transferred in accordance with the Uncertificated Securities Regulations 1995, transfers being effected by means of a Relevant System (as defined in such Regulations).

The Alent Directors may decline to recognise any instrument of transfer, relating to shares in certificated form, which is:

• (a) not in respect of only one class of shares; or

• (b) not lodged (duly stamped if required) at the place where Alent plc’s register is located accompanied by the relevant share certificate(s), and such other evidence as the Alent Directors may reasonably require to show the right of the transferor to make the transfer (and, if the instrument of transfer is executed by some other person on his behalf, the authority of that person so to do). In the case of a transfer by a recognised clearing house, or by a nominee of a recognised clearing house or of a recognised investment exchange, the lodgement of share certificates will only be necessary if and to the extent that certificates have been issued in respect of the shares in question.

The Alent Directors may also, in the case of shares in certificated form, in their absolute discretion refuse to register any transfer of shares (not being fully paid shares or, broadly, shares which are being transferred from a person resident in the US holding the shares in any manner described in Rule 12g3-2(a)(1) of the US Securities Exchange Act of 1934 (a “US Holder”) to a person who is a US Holder) provided that such discretion may not be exercised in such a way as to prevent dealings in the shares of that class from taking place on an open and proper basis.

The Alent Directors may also decline to recognise any allotment or transfer of shares (whether fully paid or not) which is in favour of more than four joint holders. If the Alent Directors refuse to register an allotment or transfer, they must within two months after the date on which (a) the letter of allotment or transfer was lodged with Alent plc; or (b) the operator instruction was received by Alent plc (in the case of shares held in uncertificated form), send to the allottee or transferee notice of the refusal.

There are limitations on shareholdings by US Holders.

3.7 Disclosure of interests in shares

The Disclosure and Transparency Rules require a person who is interested in 3 per cent. or more of the voting rights in respect of Alent plc’s issued ordinary share capital to notify his interest to Alent plc (and above that level, any change in such interest equal to 1 per cent. or more). In addition, the Code contains further provisions pursuant to which a person may be required to disclose his interests in the share capital of Alent plc.

Pursuant to the Alent Articles, if a member, or any other person appearing to be interested in shares held by that member, has been issued with a notice pursuant to section 793 of the Companies Act and has failed in relation to any shares (the “default shares”, such expression includes any further shares issued in respect of the shares) to provide Alent plc with the information thereby required within the prescribed period, the following restrictions shall apply:

• (a) the member shall not be entitled in respect of the default shares to attend or to vote (either in person or by proxy) at any general meeting or at any separate meeting of the holders of any class of shares or on any poll or to exercise any other right conferred by membership in relation to any such meeting or poll; and

• (b) where the default shares represent at least 0.25 per cent. in nominal value of their class:

• (i) any dividend or part thereof or other money payable in respect of the shares shall be withheld by Alent plc which shall not have any obligation to pay interest on it and the member shall not be entitled to elect in the case of a scrip dividend to receive shares instead of that dividend; and

• (ii) subject, in the case of uncertificated shares, to the Uncertificated Regulations, no transfer, other than an approved transfer, of any shares held by the member shall be registered unless:

  • (A) the member is not himself in default as regards supplying the information required; and

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• (B) the transfer is of part only of the member’s holding and, when presented for registration, the member provides a certificate in a form satisfactory to the Alent Directors that none of the shares which are the subject of the transfer are default shares.

3.8 Issues of shares

Subject to the relevant legislation relating to authority, pre-emption rights and otherwise, and of any resolution of Alent plc in general meeting passed pursuant thereto, the Alent Directors may allot shares in Alent plc and grant options over or otherwise dispose of them to such persons, at such times and on such terms as they think proper.

3.9 General meetings

An annual general meeting shall be held each year within six months of Alent plc’s accounting reference date, at such place or places, date and time as may be decided by the Alent Directors. The Alent Directors may, whenever they think fit, call a general meeting. The directors are required to call a general meeting once Alent plc has received requests from its members to do so in accordance with the Companies Act.

At least 21 clear days’ notice of every annual general meeting and 14 clear days’ notice of every other general meeting is required to be given (unless, at the relevant time, either of the conditions set out in sub-section 307 A(2) and sub-section 307 A(3), of the Companies Act have not been met by Alent plc, in which case at least 21 clear days’ notice will be required). The accidental omission to give notice to, or the non-receipt of such notice by, any person entitled to receive notice of the meeting will not invalidate any resolution passed or invalidate the proceedings at any such meeting.

No business may be transacted at any general meeting unless the requisite quorum is present when the meeting proceeds to business. Three persons entitled to attend and vote on the business to be transacted, each being a member present in person or a proxy for a member, constitute a quorum.

With the consent of any meeting at which a quorum is present the chairman may adjourn the meeting. Notice of adjournment or of the business to be transacted at the adjourned meeting is not required unless the meeting is adjourned without specifying a new time for 30 days or more. No business may be transacted at any adjourned meeting other than the business which might have been transacted at the meeting from which the adjournment took place.

3.10 Directors’ appointments, retirements and removals

The Alent Board shall not be fewer than 5 nor more than 15 in number save that Alent plc may, by ordinary resolution, from time to time vary this minimum and/or maximum number of Alent Directors. A Director is not required to hold any shares in Alent plc.

Alent Directors may be appointed by ordinary resolution or by the Alent Board. A Director appointed by the Alent Board must retire from office at the first annual general meeting after his appointment. A Director who retires in this way is then eligible for re-appointment.

The Alent Board may appoint one or more Director to any executive office, on such terms and for such period as it thinks fit and it can also terminate or vary such an appointment at any time.

At every annual general meeting, any Director who has been appointed by the Alent Board since the last annual general meeting, any Director who held office at the time of the two preceding annual general meetings and who did not retire at either of them, and any Director who has been in office, other than holding an executive position, for a continuous period of nine years or more at the date of the meeting shall retire from office. Any Director who retires at an annual general meeting may offer himself for re-appointment.

Alent plc’s shareholders may by ordinary resolution remove any Director before the expiration of his period of office in accordance with the Companies Act.

The office of a Director shall be vacated if:

• (a) he is prohibited by law from acting as a director;

• (b) he gives Alent plc a written notice of resignation and the Alent Board accepts this offer;

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• (c) a bankruptcy order is made against him or he makes any arrangement or composition with his creditors generally;

• (d) a court has authorised his detention or a guardian has been appointed or receiver or other person to exercise powers with respect to his property or affairs on the ground of his ill mental health or mental disorder;

• (e) he has missed directors’ meetings for six months without leave and the Alent Board resolves to remove him from office; or

• (f) notice of termination is served or deemed served on him and that notice is given by all of the other Directors for the time being.

3.11 Alternate director

Any Director may appoint any person (including another Alent Director) to act as an alternate director. The appointment requires the approval of the Alent Board, unless previously approved by the Alent Board or unless the appointee is another Alent Director.

3.12 Directors’ meetings

Subject to the Companies Act and to the Articles, the Alent Directors may decide when and where to have meetings and how they will be conducted. A directors’ meeting may be called by any Director. If no other quorum is fixed by the Alent Directors, three Alent Directors are a quorum. A directors’ meeting at which a quorum is present may exercise all the powers and discretions of the Alent Board.

The Alent Board may appoint any Director as chairman, deputy chairman or vice chairman and can remove him from that office at any time. Matters to be decided at a directors’ meeting will be decided by a majority vote.

All or any of the Alent Directors may take part in a directors’ meeting by way of a conference telephone or any communication equipment which allows those participating to hear and speak to each other. A person taking part in this way will be treated as being present at the meeting and will be entitled to vote and be counted in the quorum.

The Alent Board may delegate any of their powers or discretions (with the power to sub-delegate) to committees of one or more Alent Directors and any one or more persons as they think fit. If a committee consists of more than one person, the Articles which regulate directors’ meetings and their procedure will also apply to committee meetings unless the directors have made specific regulations in relation to the proceedings of the relevant committees or sub-committees subject to certain restrictions in the Articles.

3.13 Directors’ interests in contracts

Save as provided below, a Director shall not vote on, or be counted in the quorum in relation to, any resolution of the Alent Board or any committee of the Alent Board in respect of any transaction or arrangement with Alent plc in which he has an interest which may reasonably be regarded as likely to give rise to a conflict of interest. Subject to the provisions of the Companies Act, a Director shall be entitled to vote (and be counted in the quorum) (subject to the terms of any authorisation given to that Director by the Alent Board) in respect of any resolution at such meeting if the resolution relates to any of the following matters:

• (a) a matter in which he has an interest, of which he is not aware, or which cannot reasonably be regarded as likely to give rise to a conflict of interest;

• (b) a matter in which he has an interest only by virtue of interests in Alent plc’s shares, debentures or other securities or otherwise in or through Alent plc;

• (c) the giving to him of any guarantee, security or indemnity in respect of money lent or obligations incurred by him at the request of or for the benefit of Alent plc or any of its subsidiary undertakings;

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• (d) the giving to a third party of any guarantee, security or indemnity in respect of a debt or obligation of Alent plc or any of its subsidiary undertakings for which he himself has assumed responsibility in whole or in part, either alone or jointly with others, under a guarantee or indemnity or by the giving of security;

• (e) where Alent plc or any of its subsidiary undertakings is offering securities in which offer the Director is or may be entitled to participate as a holder of securities or in the underwriting or sub-underwriting of which the Director is to participate;

• (f) another company in which he and any persons connected with him do not hold an interest in shares representing 1 per cent. or more of either any class of the equity share capital, or the voting rights, in such company;

• (g) an arrangement for the benefit of the employees of Alent plc or any of its subsidiary undertakings which does not award him any privilege or benefit not generally awarded to the employees to whom such arrangement relates;

• (h) insurance which Alent plc proposes to maintain or purchase for the benefit of Alent Directors or for the benefit of persons including Alent Directors;

• (i) the funding of expenditure by one or more Alent Directors in defending proceedings against them or doing anything to enable such Alent Directors to avoid incurring such expenditure provided that such funding is consistent with, or no more beneficial than the provisions of the Alent Articles and is permitted pursuant to the provisions of the relevant legislation; or

• (j) the giving of an indemnity or indemnities in favour of one or more Alent Directors which is/ are consistent with, or no more beneficial than any such indemnity provided pursuant to the Alent Articles (and provided such indemnities are permitted pursuant to the relevant legislation).

A Director may not vote or be counted in the quorum on any resolution of the Alent Board or committee of the Alent Board concerning his own appointment as the holder of any office or employment with Alent plc or any company in which Alent plc is interested (including fixing or varying the terms of such appointment or its termination).

Where proposals are under consideration concerning the appointments (including fixing or varying the terms of the appointment) of two or more Alent Directors, such proposals may be divided and a separate resolution considered in relation to each Director. In each case, each such Director (if not otherwise debarred from voting) is entitled to vote (and be counted in the quorum) in respect of each resolution except that resolution concerning his own appointment.

3.14 Directors’ fees and expenses

The ordinary remuneration of the Alent Directors is determined by the Alent Directors from time to time except that such remuneration may not exceed £500,000 per annum in aggregate or such higher amount as the Alent Directors may determine to take account of inflation or such higher amount as may from time to time be determined by ordinary resolution of the shareholders.

Any Director who holds any executive office (including the office of chairman or deputy chairman or vice chairman), or who serves on any committee of the Alent Directors, or who otherwise performs services which in the opinion of the Alent Directors are outside the scope of the ordinary duties of a Director, may be paid extra remuneration by way of salary, commission or otherwise or may receive such other benefits as the Alent Directors may determine.

All of the Alent Directors are entitled to be repaid all reasonable expenses incurred by them in attending and returning from meetings of Alent Directors or of any committee of the Alent Directors or shareholders’ meetings or otherwise in connection with the business of Alent plc.

3.15 Pensions and benefits

The Alent Board may exercise all the powers of Alent plc to provide pensions or other retirement or superannuation benefits and to provide death or disability benefits or other allowances or gratuities (by insurance or otherwise) for any person in respect of, or who is or who has at any time been, an Alent Director.

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3.16 Directors’ liabilities

So far as may be permitted by the Companies Act and the Listing Rules, each Alent Director, former Alent Director and officer of Alent plc and any of its Associated Companies (as defined in section 256 of the Companies Act) shall be indemnified by Alent plc out of its own funds against any liability incurred by him in connection with any negligence, default, breach of duty or breach of trust by him or any other liability incurred by him in the execution of his duties, the exercise of his powers or otherwise in connection with his duties, powers or offices.

The Alent Directors may also purchase and maintain insurance for or for the benefit of any person who is or was a Director or officer of any Relevant Company (as defined in the Articles), or any person who is or was at any time a trustee of any pension fund or employees’ share scheme in which employees of any Relevant Company are interested, including insurance against any liability (including all related costs, charges, losses and expenses) incurred by or attaching to him in relation to his duties, powers or offices in relation to any Relevant Company, or any such pension fund or employees’ share scheme.

So far as may be permitted by the Companies Act and the Listing Rules, Alent plc may provide a Director or officer of Alent plc or its Associated Company with defence costs in relation to any criminal or civil proceedings in connection with any negligence, default, breach of duty or breach of trust by him in relation to Alent plc or its Associated Company, or in relation to an application for relief under Section 205(5) of the Companies Act. Alent plc may do anything to enable such Director or officer to avoid incurring such expenditure

3.17 Borrowing powers

Subject to the provisions of the relevant legislation, the Alent Board may exercise all the powers of Alent plc to borrow money, mortgage or charge its undertaking, property and uncalled capital, or any part or parts thereof and to issue debentures and other securities, whether outright or as security for any debt, liability or obligation of Alent plc or any third party. The aggregate amount for the time being outstanding in respect of monies borrowed by Alent plc and its subsidiary undertakings and for the time being owing to persons outside Alent plc and its subsidiary undertakings shall not at any time, without the previous sanction of an ordinary resolution of Alent plc, exceed an amount equal to two and a half times the adjusted capital and reserves (as defined in the Articles) or, prior to the production of the first audited accounts of Alent, £700 million.

4 Summary of differences between Cookson Articles and Alent Articles

The Alent Articles will be substantially identical to the Cookson Articles with the exception of:

4.1 Borrowing powers

The borrowing limit contained in the Alent Articles (as described in paragraph 3.17 above) has been increased from an amount equal to two times adjusted capital and reserves to two and half times adjusted capital and reserves.

The Cookson Articles currently provide that goodwill be included in the calculation of adjusted capital and reserves. This includes goodwill which was written off against reserves prior to the introduction of changes to UK GAAP which required goodwill to be capitalised and amortised (“Uncapitalised Goodwill”). In contrast to the Cookson Articles, the Alent Articles will provide that Uncapitalised Goodwill be excluded from the calculation of adjusted capital and reserves. This is in order to avoid Alent having to maintain accounting records (which date back in excess of 10 years) solely for the purposes of being able to calculate adjusted capital and reserves, as Uncapitalised Goodwill is not a figure otherwise required to be reported on.

Based on current expectations for Alent, the calculation of adjusted capital and reserves is expected to produce largely the same result if performed on a two times basis including Uncapitalised Goodwill or on a two and a half times basis excluding Uncapitalised Goodwill.

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5 Mandatory takeover bids, squeeze-out and sell-out rules

• 5.1 Following Alent Admission, Alent plc will be subject to the provisions of the Code, including the rules regarding mandatory takeover offers set out in the Code. Under Rule 9 of the Code, when (i) a person acquires shares which, when taken together with shares already held by him or persons acting in concert with him (as defined in the Code), carry 30 per cent. or more of the voting rights of a company subject to the Code or (ii) any person who, together with persons acting in concert with him, holds not less than 30 per cent. but not more than 50 per cent. of the voting rights of a company subject to the Code, and such person, or any person acting in concert with him, acquires additional shares which increases his percentage of the voting rights in the company, then, in either case, that person, together with the persons acting in concert with him, is normally required to make a general offer in cash, at the highest price paid by him or any person acting in concert with him for shares in the company within the preceding 12 months, for all of the remaining equity share capital of the company.

• 5.2 The Alent Shares will also be subject to the compulsory acquisition procedures set out in sections 979 to 991 of the Companies Act. Under section 979 of the Companies Act, where an offeror makes a takeover offer and has, by virtue of acceptances of the offer, acquired or unconditionally contracted to acquire not less than 90 per cent. of the shares to which the offer relates and, in a case where the shares to which the offer relates are voting shares, not less than 90 per cent. of the voting rights carried by those shares, that offeror is entitled to compulsorily acquire the shares of any holder who has not accepted the offer on the terms of the offer.

• 5.3 Other than as provided by the Companies Act and the Code, there are no rules or provisions relating to mandatory bids and/or squeeze-out and sell-out rules in relation to the Alent Shares.

• 5.4 Since Alent plc’s incorporation, there has been no takeover offer (within the meaning of Part 28 of the Companies Act) for any Alent Shares.

6 Major shareholders

• 6.1 As at 30 October 2012 (being the latest practicable date prior to the publication of this document), insofar as it is known to Alent plc by reference to relevant notifications made in accordance with rule 5.1 of the Disclosure and Transparency rules, the name of each person, other than an Alent Director, who holds voting rights representing 3 per cent. or more of the total voting rights in respect of Cookson Shares, and the amount of such person’s holding of the total voting rights in respect of Alent Shares following the completion of the Demerger is expected to be as follows:

Name Cevian Capital II G.P. Ltd . . . . . . . . . . . . . . . Morgan Stanley Securities Ltd . . . . . . . . . . . . AXA S.A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . Pelham Capital Management LLP . . . . . . . . . Standard Life Investments Ltd . . . . . . . . . . . . Lloyds Banking Group plc . . . . . . . . . . . . . . . BlackRock, Inc . . . . . . . . . . . . . . . . . . . . . . . . Fidelity Investments Limited . . . . . . . . . . . . . Governance for Owners LLP . . . . . . . . . . . . .	Number of Cookson Shares 55,693,446 16,457,178 14,767,157 14,431,888 13,546,133 13,213,880 12,324,264 11,596,056 11,199,895	Percentage of Cookson issued share capital (%) 20.01 5.91 5.34 5.22 4.87 4.78 4.46 4.20 4.05	Number of Alent Shares 55,693,446 16,457,178 14,767,157 14,431,888 13,546,133 13,213,880 12,324,264 11,596,056 11,199,895	Percentage of Alent issued share capital (%)
				20.01 5.91 5.34 5.22 4.87 4.78 4.46 4.20 4.05

• 6.2 Save as disclosed in this paragraph 6, Alent plc is not aware of any person who, as at 30 October 2012 (being the latest practicable date prior to the publication of this document), directly or indirectly, has a holding which exceeds the threshold of 3 per cent. or more of the total voting rights attaching to the issued share capital of Cookson.

• 6.3 Alent plc is not aware of any persons who, as at 30 October 2012 (being the latest practicable date prior to the publication of this document), directly or indirectly, jointly or severally, will exercise or could exercise control over Alent plc nor is it aware of any arrangements the operation of which may at a subsequent date result in a change in control of Alent plc.

• 6.4 None of the shareholders referred to in this paragraph 6 has or will have different voting rights from any other holder of Shares in Alent plc in respect of any Shares held by them.

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7 Employees

• 7.1 The average number of employees in Alent for the three years ended 31 December 2011, 31 December 2010 and 31 December 2009 is set out below:

Division Performance Materials . . . . . . . . . . . . . . . . . . . Total number of employees . . . . . . . . . . . . . .	Year ended 31 December 2011 2,582 2,582	Year ended 31 December 2010 2,699 2,699	Year ended 31 December 2009	Year ended 31 December 2009
				2,820 2,820

• 7.2 As at the end of September 2012 (being the latest practicable date prior to the publication of this document), approximately 2,590 people were employed in Alent.

8 Dividend policy

Alent expects to be a highly cash generative business with the opportunity for attractive capital investment to enhance its growth prospects, both through organic investments, including new product development, and acquisitions. The board of Alent intends to pursue a dividend policy that reflects this strategy whilst also delivering shareholders high quality, long-term dividend growth. The first dividend under this new policy is expected to be declared at the interim results for the half year ending 30 June 2013.

9 Pensions

Cookson Group operates defined benefit and defined contribution pension schemes for its current and former UK and overseas Alent employees. As at 30 June 2012, a net funding deficit of £81.4 million (calculated on an IAS 19 basis) was recognised in respect of employee benefit pension arrangements worldwide. Details of the principal Cookson Group post-retirement arrangements which comprise this net deficit are provided below.

9.1 United Kingdom

9.1.1 Cookson Group Pension Plan

In the UK, Cookson is the principal employer of the Cookson Group Pension Plan (the “UK Plan”), a multi-employer pension scheme that provides defined benefits for certain current and former Cookson employees. The UK Plan has been closed to the future accrual of new benefit since 31 July 2010. As at 30 June 2012, there was a net funding surplus of £46.2 million (calculated on an IAS 19 basis) in relation to the UK Plan.

Two Alent employers (Alpha Fry Limited and Enthone Limited) currently participate in the UK Plan. On completion of the Demerger, Cookson Group intends that the UK Plan will remain with Vesuvius and the two Alent employers who participate in the UK Plan will cease to participate with effect from the Demerger. In order to ensure there is a “clean break” in respect of the Alent employers, their pension liabilities in respect of the UK Plan will be discharged in full. This will be achieved by apportioning the pension liabilities of the Alent participating employers to Cookson Group and combining this with a mitigation payment into the UK Plan.

Cookson Group has agreed with the Trustee the size of the mitigation package. Mitigation is required due to the loss of support from the Alent participating employers, which will reduce the financial covenant of the employers supporting the UK Plan. Cookson has agreed a mitigation payment equal to approximately 25 per cent. of the UK Plan’s Section 75 deficit calculated as at Completion of the Demerger (estimated at approximately equivalent to a £32 million payment to the UK Plan). The mitigation will be payable in the form of two cash lump sums. The first lump sum will be paid to the Trustee on 14 December 2012 and will be calculated as 90 per cent. of the sum that would otherwise have been due had Completion occurred on 31 October 2012. The second lump sum will be the difference required to bring the total mitigation payment to the mitigation figure calculated as at Completion, and will be paid within three working days of the Trustee notifying Cookson of the relevant amount.

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9.1.2 Clearance from the Pensions Regulator

Clearance from the Pensions Regulator has been obtained in respect of the impact of the Demerger on the UK Plan. The purpose of seeking clearance from the Pensions Regulator is to obtain confirmation that it would not be reasonable in the circumstances for the Regulator to impose any liability on the applicants (which includes the two Alent participating employers who will cease to participate in the UK Plan as a result of the Demerger) under a contribution notice or financial support direction in respect of the UK Plan. The clearance therefore confirms that these employers have no further liability in relation to the UK Plan in respect of the matters covered by the clearance application.

9.1.3 Cookson stakeholder scheme

Cookson Group operates a defined contribution stakeholder plan for existing and new employees in the UK (including current Alent employees). This is now the Cookson Group’s main UK pension arrangement for current employees. The stakeholder scheme is a contract-based scheme set up with a leading UK investment manager under which members hold retirement accounts directly with the investment manager. Contributions to the stakeholder plan include member contributions of between 2 per cent. and 8 per cent. of pay and matching employer contributions of between 2 per cent. and 16 per cent.

It is expected that Alent will set up a new stakeholder plan for its employees following the Demerger, which will provide identical benefits to those provided under the Cookson stakeholder scheme.

9.2 United States

Cookson Group operates two qualified defined benefit pension schemes in the US, the Cookson America Pension Plan (the “CAPP”) and the Retirement Security Plan (the “RSP”). Both schemes are closed to new members and closed to further benefit accrual for existing members. As at 30 June 2012, a net funding deficit of £66.6 million (calculated on an IAS 19 basis) was recognised in respect of defined benefit employee pension arrangements in the US.

The CAPP will remain with Vesuvius following the Demerger.

The RSP is sponsored by Cookson Electronics Inc. The current participants of the RSP are wholly from Cookson’s Performance Materials division in the US. This relationship would remain the same after the Demerger, which will result in Alent retaining responsibility for supporting the RSP financially. As at 30 June 2012, the RSP is estimated to have had a funding deficit of $26 million (£16 million) calculated on an IAS 19 basis. An exercise has recently been undertaken to offer terminated vested participants the opportunity to receive a lump sum payment of their accrued benefits, thereby removing their liability from the plans. The offer closed in August 2012, and the RSP member liabilities associated with this offer amounted to some $11 million (£7 million).

The US pension regulator, the US Pension Benefit Guaranty Corporation (“PBGC”), has confirmed that no additional cash contributions are required to be made into the RSP as a result of the Demerger. Additional funding payments of approximately $4 million (£2 million) per annum are currently being made by Cookson Group into the RSP. This additional contribution is being made on a voluntary basis and, as such, its continuation is subject to periodic review.

The Cookson Group also operates defined contribution pension schemes (401(k) plans) for current and future employees.

9.3 Germany

Cookson Group operates five defined benefit pension schemes in Germany as well as a number of smaller legacy and individual executive plans. As at 30 June 2012, a net funding deficit of €46.4 million (£37.4 million) was recognised on an IAS 19 basis in respect of defined benefit employee pension arrangements in Germany. Three of the five defined benefit plans will remain with Vesuvius following the Demerger, with the Enthone Germany and Alpha Lotsysteme plans remaining with Alent following the Demerger. The plans are all unfunded, as is usual for plans in Germany. There are no notification obligations to the German regulatory authorities in respect of the impact of the Demerger on the pension plans.

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9.4 Rest of the world

Cookson Group operates numerous individually small defined benefit and defined contribution plans throughout the rest of the world. None of these are material in the context of the Demerger and the plans will transfer with the relevant Alent entity.

As at 30 June 2012, a net funding deficit of £14.4 million (calculated on an IAS 19 basis) was recognised in respect of Cookson’s defined benefit employee pension arrangements in the rest of the world, together with another £9.2 million net deficit in respect of other, unfunded, post-retirement defined benefit arrangements.

10 Outstanding awards over Cookson Shares

Cookson has granted the following awards pursuant to the Cookson Employee Share Plans which remained outstanding as at 30 October 2012 (being the latest practicable date prior to the publication of this document):

LTIP

Cookson Director Mike Butterworth . . . . . . . . . . . . Steve Corbett . . . . . . . . . . . . . . .	Grant Date 07/04/10 01/04/11 05/04/12 07/04/10 01/04/11 05/04/12	Type of award Performance shares Matching shares Performance shares Matching shares Performance shares Matching shares Performance shares Performance shares Performance shares Matching shares	Share awards outstanding 54,522 52,556 48,464 91,234 48,464 39,525 54,166 49,089 56,498 106,444	Performance period 01/01/10- 31/12/12 01/01/10- 31/12/12 01/01/11- 31/12/13 01/01/11- 31/12/13 01/01/12- 31/12/14 01/01/12- 31/12/14 01/01/10- 31/12/12 01/01/11- 31/12/13 01/01/12- 31/12/14 01/01/12- 31/12/14	Vesting date (subject to performance)
					07/04/13 07/04/13 01/04/14 01/04/14 05/04/15 05/04/15 07/04/13 01/04/14 05/04/15 05/04/15

11 Cookson Employee Share Plans and the Alent Share Plan

The principal features of the Cookson Employee Share Plans (being those under which options/awards remain outstanding) are summarised below.

11.1 The Cookson Group Long-Term Incentive Plan 2004 (“LTIP”)

11.1.1 Eligibility

The Cookson Remuneration Committee may select any employee (including Executive Directors) of the Cookson Group to participate in the LTIP. Current participants in the LTIP include the Executive Directors and senior divisional and corporate executives.

11.1.2 Awards

An award takes the form of an option with a nil exercise price or an allocation, being a deferred right to acquire Shares in the future at no cost to the participant. The Remuneration Committee may also decide that an award should take the form of restricted Shares if it would be advantageous for tax or other reasons for a participant to hold restricted Shares.

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Awards may normally only be granted during the period of six weeks from the announcement by Cookson of its annual results for any period (but at other times in exceptional circumstances). No awards may be granted more than 10 years after the LTIP was adopted. Awards are personal to a participant and, except on death, may not be transferred.

There are two types of award that the Remuneration Committee may make under the LTIP:

(a) Performance share awards

The Cookson Remuneration Committee may select employees to receive performance share awards. All performance share awards are subject to performance conditions and the value of Shares subject to a performance share award cannot exceed 100 per cent. of an employee’s annual base salary as at the award date.

(b) Matching share awards

The Cookson Remuneration Committee may invite employees to invest part or all of their annual cash bonus in Shares. An employee is granted a matching share award in respect of the amount of his annual cash bonus that he has invested in Shares as if the bonus had been invested on a pre-tax basis. All matching share awards are subject to performance conditions.

The maximum value of Shares subject to a matching share award is equal to 225 per cent. of the value of Shares that the employee could have acquired if his bonus had been invested on a pre-tax basis. If the employee disposes of the Shares that he has purchased within three years of the grant of a matching share award, the number of Shares subject to his matching share award is reduced proportionately.

11.1.3 Performance conditions

The conditions that apply to awards are disclosed in the Annual Report and Accounts for the year concerned. The Cookson Remuneration Committee may amend the performance conditions which apply to any award.

Awards granted on or after 7 March 2007 but before 2011 are split so that 50 per cent. of an award is subject to the following performance condition. Cookson’s TSR is compared to that of the FTSE Mid 250 Index excluding Investment Trusts (the “Comparator Group”) over a period of three financial years. No Shares vest if Cookson’s TSR performance is below the median performance of the Comparator Group. At median, 12.5 per cent. of performance share awards vest and participants receive a matching share award of 0.25 matching shares for every Share invested. At upper quintile, 50 per cent. of performance share awards vest and participants receive a matching share award of 1.125 matching shares for every Share invested. There is straight-line vesting between median and upper quintile performance.

The remaining 50 per cent. of an award is subject to a performance condition based on Cookson’s EPS. The EPS condition is linked to the annualised, compounded growth in Cookson’s headline EPS over a period of three financial years. If the EPS growth is at least equal to the increase in the RPI plus 3 per cent. compound per annum, 12.5 per cent. of the performance share awards vest and participants receive a matching share award of 0.25 matching shares for every Share invested. If the EPS growth is at least equal to RPI plus 10 per cent. compound per annum, 50 per cent. of the performance share awards vest and participants receive a matching share award of 1.125 matching shares for every Share invested. There is straight-line vesting between these points.

However, awards do not vest unless the Cookson Remuneration Committee is satisfied that the vesting of awards is justified by the underlying financial performance of Cookson.

Awards granted in 2011 and 2012 are also split so that 50 per cent. of an award is subject to the same TSR performance condition as in previous years. The remaining 50 per cent. of an award is subject to an EPS performance condition based on Cookson’s headline EPS for the

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final financial year of the three-year performance period. For the 2011 award, if Cookson’s headline EPS for the 2013 financial year is at least equal to 82 pence, 12.5 per cent. of the performance share awards vest and participants receive a matching share award of 0.25 matching shares for every Share invested. If Cookson’s headline EPS for the 2013 financial year is at least equal to 98.5 pence, 50 per cent. of the performance share awards vest and participants receive a matching share award of 1.125 matching shares for every Share invested. There is straight-line vesting between these points. For 2012, the EPS thresholds for the 2014 financial year are 85 pence and 105 pence or more (respectively).

11.1.4 Vesting of awards

Awards normally vest on the third anniversary of the date of grant but only to the extent that the performance conditions have been met. Normally, a participant must remain employed by the Cookson Group to receive his Shares. If the participant ceases employment in circumstances other than where he has voluntarily resigned or been summarily dismissed, the Cookson Remuneration Committee has the discretion to allow a participant to keep his awards. The Cookson Remuneration Committee will usually exercise its discretion on the basis that the awards cannot vest before their third anniversary and only if the performance conditions have been satisfied. The Cookson Remuneration Committee may then determine that the number of Shares in respect of which an award vests shall be reduced proportionately on a time basis. The Cookson Remuneration Committee may also allow awards to vest prior to their third anniversary to the extent that the performance conditions have been satisfied at the time that the participant ceases employment but on the basis that the number of Shares that vest shall then be reduced proportionately on a time basis, unless the Cookson Remuneration Committee decides otherwise.

11.1.5 Limits on issue of Shares

The following limits apply to the LTIP:

• (a) in any 10-year period, the number of new Shares which may be issued or placed under award under the LTIP and under any discretionary employees’ share scheme established by Cookson may not exceed 5 per cent. of the issued ordinary share capital of Cookson from time to time; and

• (b) in any 10-year period, the number of new Shares which may be issued or placed under award under the LTIP and under any employees’ share scheme established by Cookson may not exceed 10 per cent. of the issued ordinary share capital of Cookson from time to time.

Any treasury Shares transferred to participants will be treated as issued for the purposes of the above limits. Cookson’s ESOP may subscribe for or purchase Shares to be used to satisfy awards granted under the LTIP.

11.1.6 Change of control

If there is a takeover, reconstruction or winding-up of Cookson, awards may vest early to the extent that the performance conditions have been met as at that time, but on the basis that the number of Shares that vest shall then be reduced proportionately on a time basis, unless the Cookson Remuneration Committee decides otherwise. An internal reorganisation will not trigger the vesting of awards.

11.1.7 Variation of capital

In the event of any increase or variation of Cookson’s share capital or a demerger, special dividend or similar event, the Cookson Remuneration Committee may adjust the number of Shares which a participant can acquire under his award.

11.1.8 Amendments

The Cookson Remuneration Committee may amend the LTIP at any time. The prior approval of Cookson in general meeting is required for amendments to the advantage of

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participants relating to eligibility, limits, rights to exercise awards and variations of capital except for minor amendments to benefit the administration of the LTIP, to take account of changes in legislation or to obtain or maintain favourable tax, exchange control or regulatory treatment for participants or any member of the Cookson Group. Amendments to the disadvantage of participants require the majority consent of those affected participants who respond to Cookson.

11.2 The Cookson Group Deferred Share Bonus Plan 2007 (“DSBP”)

11.2.1 Eligibility

The Cookson Remuneration Committee may select any employee (including executive directors) of the Cookson Group to participate in the DSBP if they are eligible to receive a discretionary bonus under any discretionary bonus arrangement operated by the Cookson Group. The current participants in the DSBP include Mr Salmon, Cookson Chief Executive, who received an award in 2011 over 38,211 Cookson Shares, and divisional and corporate managers who do not participate in the LTIP.

11.2.2 Awards

An award takes the form of an allocation, being a deferred right to acquire Shares in the future at no cost to the participant. The Cookson Remuneration Committee may also decide that an award should take the form of restricted Shares if it would be advantageous for tax or other reasons for a participant to hold restricted Shares.

Awards may normally only be granted during the period of six weeks from the announcement by Cookson of its results for any period (but at other times in exceptional circumstances). Awards are personal to a participant and, except on death, may not be transferred.

No new Shares may be issued to satisfy awards granted under the DSBP and only existing Shares (other than treasury Shares) can be used.

11.2.3 Vesting of awards

Awards normally vest on the third anniversary of the date of grant. If a participant ceases employment by reason of death, retirement, injury or disability, redundancy, as a result of the company or business for which he works being transferred to a person outside the Cookson Group, or for any other reason if the Cookson Remuneration Committee so decides, awards vest on the date of cessation. If a participant ceases employment for any other reason, any award held by him automatically lapses.

11.2.4 Change of control

If there is a takeover, reconstruction or winding-up of Cookson, awards vest early on such event. An internal reorganisation will not trigger the vesting of awards.

11.2.5 Variation of capital

In the event of any increase or variation of Cookson’s share capital or a demerger, special dividend or similar event, the Cookson Remuneration Committee may adjust the number of Shares which a participant can acquire under his award.

11.2.6 Amendments

The Cookson Remuneration Committee may amend the DSBP at any time. Amendments to the disadvantage of participants require the majority consent of those affected participants who respond to Cookson.

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11.3 The Cookson UK Executive Share Option Scheme (1995) (the “1995 Approved Scheme”) and the Cookson Executive Share Option Scheme (1995) (the “1995 Unapproved Scheme”) (together the “1995 Schemes”)

No further options can be granted under the 1995 Schemes but some options remain outstanding and below is a summary of the features of the 1995 Schemes relevant to those outstanding options.

11.3.1 Background

Prior to the approval of the LTIP in 2004, Cookson operated the 1995 Schemes to reward long-term performance. Under the 1995 Schemes, Cookson granted share options with an option exercise price fixed by reference to the market price prevailing at the time of grant, the exercise of which was subject to a headline EPS performance condition. The last grant under the 1995 Schemes was made in 2003. The majority of options granted under the 1995 Schemes have been exercised, but options remain outstanding over 160,000 Cookson Shares that are still capable of exercise.

11.3.2 Exercise of options

All options outstanding under the 1995 Schemes are already exercisable.

11.3.3 Change of control

In the event of a takeover, reconstruction or winding-up of Cookson, the exercise of options is permitted for a short period following such event. Options automatically lapse if not exercised during this period.

11.3.4 Variation of capital

In the event of any variation of share capital, the Cookson Board may make such adjustments as it considers appropriate to the number of Shares under option and the price at which they may be acquired. In the case of the 1995 Approved Scheme, the prior approval of HMRC is required for any adjustments.

11.3.5 Amendments

The 1995 Schemes may be altered by the Cookson Board at any time. The prior approval of Cookson in general meeting is required for amendments to the advantage of participants except for minor amendments to benefit the administration of the 1995 Schemes, to take account of changes in legislation, or to obtain or maintain favourable tax, exchange control or regulatory treatment for participants or any member of the Cookson Group. Amendments to the disadvantage of participants require the majority consent of those affected participants who respond to Cookson. The consent of HMRC is required in respect of amendments to the 1995 Approved Scheme.

11.4 Effects of the Proposals on the Cookson Employee Share Plans

Letters are being sent to participants in the Cookson Employee Share Plans to explain the effects of the Proposals on options and awards which they hold under the Cookson Employee Share Plans. In summary, the effects are as follows:

11.4.1 LTIP

The Proposals will not result in early vesting for participants who continue in employment with either Alent or Vesuvius.

In the case of the grant in 2010 under the LTIP where the performance period is due to end on 31 December 2012, the period will be shortened very slightly, to end at the Demerger Effective Time, so that performance is measured purely in relation to Cookson performance. These awards will be rolled over to become awards over a combination of Alent and Vesuvius Shares in the same combination that applies to Cookson Shareholders. This reflects the fact that these awards relate to Cookson performance and not the future performance of Alent or Vesuvius.

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For participants who stay with Vesuvius, their 2011 and 2012 LTIP awards over Cookson Shares will be rolled over to become awards over Vesuvius Shares of equivalent value. Performance will still be measured over a three year period, but by reference to Cookson performance up to the Demerger Effective Time and by reference to Vesuvius plc performance thereafter to the end of the period. The awards will continue to be subject to the terms and conditions of the existing LTIP, save that the relevant company (and relevant remuneration committee) will be Vesuvius plc instead of Cookson.

For participants who are employed by Alent after the Demerger, their awards over Cookson Shares will be rolled over to become awards over Alent Shares of equivalent value. In the case of the grants made in 2011 and 2012, performance will still be measured over a three year period, but by reference to Cookson performance up to the Demerger Effective Time and by reference to Alent plc performance thereafter to the end of the period. The awards will continue to be subject to the terms and conditions of the relevant existing LTIP, save that the relevant company (and relevant remuneration committee) will be Alent plc instead of Cookson.

Participants who, at the request of Cookson, leave the Cookson Group as a result of the Demerger and who do not join Alent or Vesuvius on a permanent basis will be treated as good leavers. Their LTIP awards will vest (subject to performance and a prorated time reduction) on the normal vesting date, but will be rolled over to become awards over a combination of Vesuvius Shares and Alent Shares in the same combination as applies to Cookson Shareholders. In the case of the grants made in 2011 and 2012, performance will still be measured over a three year period, but by reference to Cookson performance up to the Demerger Effective Time and by reference to a mixture of Alent plc and Vesuvius plc performance thereafter to the end of the period.

The intended method of measuring performance for the 2011 and 2012 LTIP awards is as follows:

• as regards the EPS target, the currently disclosed Cookson headline EPS threshold and maximum vesting targets for the final year of the relevant three year performance period will be split between Alent and Vesuvius by reference to their respective trading profit contributions to Cookson’s total 2012 trading profit such that the new Alent and Vesuvius targets aggregate to the currently disclosed Cookson targets. The new Alent targets will be disclosed in the Alent 2012 annual report. The respective Alent headline EPS values as reported for the final year of the three year performance period will then be compared with these new threshold and maximum targets to determine the vesting outcome

• as regards the TSR target, Cookson’s TSR growth from the start of the relevant three year performance period up to the time of the Demerger will be determined and added to the TSR growth of Alent from the Demerger date to the end of the three year performance period. This aggregate TSR growth will then be ranked against the TSR of the relevant comparator group and the resulting vesting outcome will be calculated against the TSR performance schedule in the LTIP.

11.4.2 DSBP

The Proposals will not result in early vesting for participants who continue in employment with either Alent or Vesuvius.

In the case of the grant made in 2010 under the DSBP, the awards will be rolled over to become awards over a combination of Alent and Vesuvius Shares in the same combination that applies to Cookson Shareholders.

For participants who stay with Vesuvius, their 2011 and 2012 DSBP awards over Cookson Shares will be rolled over to become awards over Vesuvius Shares of equivalent value. The awards will continue to be subject to the terms and conditions of the DSBP save that the relevant company (and relevant remuneration committee) will be Vesuvius plc instead of Cookson.

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For participants who are employed by Alent after the Demerger, their 2011 and 2012 DSBP awards over Cookson Shares will be rolled over to become awards over Alent Shares of equivalent value. The awards will continue to be subject to the terms and conditions of the DSBP, save that the relevant company (and relevant remuneration committee) will be Alent plc instead of Cookson.

Participants who, at the request of Cookson, leave the Cookson Group as a result of the Demerger and who do not join Alent or Vesuvius on a permanent basis will be treated as good leavers. Their awards will vest on their date of leaving and will be rolled over to become awards over a combination of Alent Shares and Vesuvius Shares in the same combination as applies to Cookson Shareholders. Mr Salmon, Cookson Chief Executive, has agreed that his deferred share award granted on 1 April 2011 will not vest at the Demerger Effective Time, but will be rolled over to become an award over a combination of Alent and Vesuvius Shares with vesting deferred (and subject to forfeiture in certain circumstances) until 1 April 2014 (i.e. the original vesting date for his award).

11.4.3 Cookson Executive Share Option Schemes

Although no options have been granted under the Cookson Executive Share Option Schemes since 2003, there are a small number of options still outstanding. All these options are already exercisable and can be exercised for a short period after the Court sanctions the Scheme, otherwise they will automatically lapse. Any Cookson Shares issued following the Demerger Record Time on the exercise of such options will be automatically exchanged for Vesuvius Shares pursuant to a new provision to be inserted into the Cookson Articles, as further described at paragraph 3.3 of Part II of the Cookson Circular.

The Proposals will not result in early vesting for participants who continue in employment with either Vesuvius or Alent.

11.5 The Alent Share Plan

Subject to the approval of Cookson Shareholders, Alent proposes to establish the Alent Share Plan. The principal features of the Alent Share Plan are summarised below.

11.5.1 Introduction

The Alent Share Plan is an umbrella plan which incorporates features similar to the existing Cookson Share Award Plans (other than matching share arrangements). In addition, the Alent Share Plan permits the grant of market-price options and restricted share awards. It is intended that Alent plc will also establish a new employee trust for the benefit of its employees and former employees (and their immediate families). The new trust can be used to purchase Alent Shares in the market or subscribe for Alent Shares subject to the limits in paragraph 11.5.7 below to satisfy Awards granted under the Alent Share Plan.

11.5.2 Eligibility

Any person who is an employee of Alent (including an Executive Director of Alent plc) is eligible to be granted an Award under the Alent Share Plan in any of the forms described below (an “ Award ”). Awards are made at the discretion of the Alent Remuneration Committee.

11.5.3 Form of Awards

The Alent Share Plan will permit Awards to be granted as:

• (a) performance share awards;

• (b) deferred share bonus awards;

• (c) restricted share awards; and

• (d) market-price options,

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as further explained below.

No price is payable for the grant of an Award. Awards are not pensionable. Awards which are not market-price options can be granted in the form of conditional share awards, nil-cost options, or such other form as the Alent Remuneration Committee considers has a substantially similar effect.

Performance share awards

These are rights to acquire Alent Shares subject to satisfaction of one or more performance conditions. Alent Shares can be acquired after a vesting period at no cost to the participant.

The Alent Remuneration Committee intends initially to set performance conditions with performance metrics similar to those that have applied in the Cookson LTIP (i.e. based on a combination of earnings per share and total shareholder return), and the performance scale is intended to be set so that it is of similar difficulty to that which currently applies under the Cookson LTIP.

Deferred share bonus awards

Deferred share bonus awards can be granted to selected executives if they are eligible to receive a discretionary bonus under any discretionary bonus arrangement operated by Alent. Deferred share bonus awards are therefore rights to acquire Alent Shares after a vesting period at no cost to the participant. As discretionary share bonus awards represent the deferral of a bonus which a participant would otherwise have received, normally no further performance conditions will apply.

Restricted share awards

These are similar to performance share awards, but without performance conditions. Restricted share awards will not be granted to Executive Directors, except in exceptional circumstances (for instance, on recruitment).

Market-price options

These are options with an exercise price payable, which will be determined by the Alent Remuneration Committee before grant, provided that it shall not be less than the average middle-market quotation of an Alent Share, as derived from the London Stock Exchange Daily Official List, for the three dealing days immediately preceding the date of grant (or such other number of dealing days immediately preceding the date of grant as the Alent Remuneration Committee shall determine).

The Alent Remuneration Committee can set performance conditions which must be satisfied before a market-price option can be exercised. In the case of market-price options to be granted to Executive Directors, these will always have performance conditions.

11.5.4 Tax-Approved Options

Part of the Alent Share Plan has been designed for approval by HMRC (the “UK Approved Part”), so that UK employees (and Executive Directors, provided they are required to devote not less than 25 hours per week to the performance of their duties of employment) can be granted UK tax approved market-price options. In the case of US executives, the Remuneration Committee can similarly grant incentive stock options that qualify for favourable tax treatment in the US. In the case of French executives, the Alent Remuneration Committee can also grant market-price options that qualify for favourable tax treatment in France.

11.5.5 Grant of Awards

Awards may normally only be granted in the six weeks beginning with the date of Alent Admission, the date of HMRC approval of the UK Approved Part and thereafter in the six

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week period commencing on the dealing day following the date on which Alent plc announces its results for any period. Awards may be granted outside these periods in exceptional circumstances. No Awards may be granted more than 10 years after 26 November 2012, the date of Cookson shareholder approval of the Alent Share Plan. Awards granted under the Alent Share Plan are personal to the participant and may not be transferred except on death.

11.5.6 Individual limits

For the purposes of the individual limits set out below, the Alent Remuneration Committee shall apply an appropriate exchange ratio (based on equivalent values) whenever a participant is granted more than one type of award (ignoring deferred share bonus awards) in the same financial year. The blended grant will therefore not exceed the value of a single grant.

Performance share awards

No participant may in any financial year receive Awards of performance shares over Alent Shares with an aggregate value in excess of 200 per cent. of their basic salary.

Deferred share bonus awards

Since this replaces a discretionary bonus which could have been paid under any discretionary bonus arrangement operated by Alent, there is no further individual limit.

Restricted share awards

No participant may in any financial year receive Awards of restricted shares over Alent Shares with an aggregate value in excess of 150 per cent. of their basic salary (or higher in exceptional circumstances, e.g. for a new recruit to buy-out awards granted by his previous employer). If, in exceptional circumstances, a restricted share award is granted to an Executive Director, that will not affect the individual limits applying to any other Awards that may be granted to him in the same financial year. However, this will not be the case where restricted share awards are granted to employees who are not Executive Directors.

Market-price options

No participant may in any financial year receive grants of market-price options over Alent Shares with an aggregate value in excess of 300 per cent. of their basic salary.

11.5.7 Overall limits

The Alent Share Plan contains the following limits:

• (a) The number of Alent Shares that may be issued under Awards under the Alent Share Plan and under awards granted under any other executive share plan of Alent plc and Cookson in any 10-year period may not exceed such number as represents 5 per cent. of Alent Shares in issue from time to time.

• (b) The number of Alent Shares that may be issued under all Alent and Cookson employee share plans under grants made in any 10-year period may not exceed such number as represents 10 per cent. of Alent Shares in issue from time to time.

Although existing Alent Shares do not count towards the above limits, Alent Shares issued out of treasury will count towards the above limits for so long as this is required by institutional investor guidelines.

11.5.8 Shareholding Guidelines

The Alent Remuneration Committee intends to set shareholding guidelines to encourage Executive Directors to build a shareholding in Alent equivalent in value to at least one year’s basic salary. New Executive Directors will be allowed four years in which to acquire this shareholding.

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11.5.9 Vesting of Awards

In normal circumstances, an Award may not vest earlier than three years from the date of grant (although, where considered appropriate by the Alent Remuneration Committee, restricted share awards may be granted with shorter vesting periods, for example, where they are granted as buy-out awards for new recruits). An Award which is subject to a performance condition will only vest to the extent that such performance condition is satisfied. Vesting of an Award is subject to continued employment during the vesting period. Any market-price options will lapse 10 years after the date of grant.

11.5.10 Leaving employment

An Award will lapse where a participant leaves Alent before vesting unless the cessation of employment is due to death, retirement (with the agreement of Alent Remuneration Committee), injury, disability, redundancy, as a result of the company or business for which he/she works being transferred to a person outside Alent, or for any other reason at the discretion of the Alent Remuneration Committee.

If a participant ceases employment in one of the permitted circumstances set out above and the Award is subject to performance conditions, the award will not lapse and will usually vest on the normal vesting date, but only if the performance conditions have been satisfied. The Alent Remuneration Committee may determine that the number of Alent Shares in respect of which an Award vests shall be reduced proportionately on a time basis. The Alent Remuneration Committee may also allow Awards to vest on the cessation of employment to the extent that the performance conditions are considered to have been satisfied at that time, but on the basis that the number of Alent Shares shall then be reduced proportionately on a time basis, unless the Alent Remuneration Committee decides otherwise.

If a participant ceases employment in one of the permitted circumstances set out above and the Award is not subject to performance conditions, the Award will vest on the date of cessation of employment, but the Alent Remuneration Committee has a discretion to reduce the number of Alent Shares that vest proportionately on a time basis.

11.5.11 Change of control

If there is a takeover, reconstruction or winding-up of Alent plc, Awards will vest early, but, where performance conditions apply, only to the extent that performance conditions have been met as at that time. The number of Alent Shares that vest shall be reduced proportionately on a time basis, unless the Alent Remuneration Committee decides otherwise. An internal reorganisation will not trigger the early vesting of Awards.

11.5.12 Entitlement to Dividends

In the case of Awards other than market-price options, the Alent Remuneration Committee may decide that participants should receive an additional benefit on vested Alent Shares calculated by reference to any dividends they would have received during the vesting period, as if they had held Alent Shares which vest from the date of grant. The benefit can be provided as a cash sum or in the form of additional Alent Shares. Alternatively, such Awards may be increased by deeming dividends paid on Alent Shares which vest to have been reinvested in further Alent Shares at the time of each dividend payment.

11.5.13 Cash Alternative

Where an Award has vested, the Alent Remuneration Committee may elect, instead of issuing or procuring the transfer of Alent Shares, to pay cash to the participant concerned. The amount to be paid (subject to deduction of tax or similar liabilities) should be equal to the market value of the Alent Shares in the case of Awards other than market-price options, or, for market-price options, the amount by which the market value of the Alent Shares exceeds the exercise price.

The cash alternative provisions will not apply where they would be tax-disadvantageous for the participant or Alent.

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11.5.14 Variation of Capital

In the event of any increase or variation of the issued share capital of Alent plc, or in the event of a demerger, special dividend or other similar event which affects the market price of Alent Shares to a material extent, the Alent Remuneration Committee may make such adjustments as it considers appropriate to the number of Alent Shares subject to an Award and, where relevant, the exercise price.

11.5.15 Amendments

The Alent Remuneration Committee may at any time amend the Alent Share Plan. The prior approval of Alent Shareholders in general meeting must be obtained in the case of any amendment to the advantage of participants, to the provisions relating to eligibility, limits, variation of capital and the basis for determining a participant’s entitlement to Alent Shares. However, minor amendments to benefit the administration of the Alent Share Plan, to take account of any change in legislation, or to obtain or maintain favourable tax, exchange control, or regulatory treatment for participants or any member of Alent, may be made without the prior approval of Alent Shareholders in general meeting. Any amendment that is to the material disadvantage of participants requires their majority consent. The consent of HMRC is required in respect of amendments to key features of the UK Approved Part.

12 Related party transactions

Save as disclosed in note 34 to the historical financial information contained in Part IX of this document, Alent has not entered into any related party transactions in the financial years ended 31 December 2009, 31 December 2010 and 31 December 2011 or in the six-month period ended 30 June 2012 or in the current financial year to 30 October 2012 (being the latest practicable date prior to the publication of this document).

13 Material contracts

The following contracts (not being contracts entered into in the ordinary course of business) have been entered into by Alent plc or another member of Alent (i) within two years immediately preceding the date of this document and are or may be material to Alent or (ii) at any time and contain provisions under which a member of Alent has an obligation or entitlement which is material to Alent as at the date of this document:

13.1 The Alent Facility

Alent has signed a £300,000,000 multicurrency revolving credit facility (the “ Alent Facility ”) dated 21 September 2012 (the “ Alent Facility Agreement ”).

The Alent Facility is guaranteed by Alent plc and, on or before the Demerger Effective Time, four material operating companies will also guarantee the Alent Facility. The Alent Facility Agreement provides that borrowings thereunder shall also be guaranteed by any subsidiaries incorporated in the United Kingdom, the United States of America, the Netherlands or Germany whose individual trading profit or turnover accounts for five per cent. or more of the consolidated total trading profit or turnover of Alent.

Loans made under the Alent Facility Agreement will bear interest at a floating rate per annum based on the London interbank offer rate (LIBOR) as applicable plus a margin ranging from 1.25 per cent. per annum to 2.25 per cent. per annum, depending on the ratio of consolidated net borrowings of Alent to proforma EBITDA.

The Alent Facility terminates on 21 September 2017 and includes customary events upon which lenders may request mandatory prepayment of amounts due under the Alent Facility Agreement.

The Alent Facility Agreement contains a number of repeating representations and financial covenants, including financial ratios that Alent plc must ensure are complied with on every semiannual test date. In particular, but without limitation: (i) the ratio of EBITDA to consolidated net interest (both on a last-12-months basis) shall be equal to or no less than 4.0:1.0; and (ii) the ratio of consolidated net borrowings to pro forma EBITDA for the last 12 months shall be no greater than 3.0:1.0.

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The Alent Facility Agreement includes other customary covenants such as provision of financial statements and compliance certificates, notification of default, compliance with laws and in particular certain US laws, authorisations and maintenance of insurance. There are also restrictions on the ability of members of Alent to create security, make disposals and acquisitions, enter into mergers or other corporate reconstructions, change business and incur financial indebtedness, subject to customary carve-outs.

A breach (in excess of materiality thresholds and subject to grace periods) of the terms of the Alent Facility Agreement and the connected documents by a member of Alent, failure by a borrower under the Alent Facility to make any payment due on time, insolvency events in respect of any borrower or guarantor or a Material Subsidiary (as defined in the Alent Facility Agreement), cross-default to other debt, a borrower or guarantor ceasing to be the subsidiary of Alent plc and various other customary events will constitute events of default under the Alent Facility Agreement. The result of such an event of default is that the Agent may cancel the commitments of the lenders under the Alent Facility and declare all loans and other amounts outstanding immediately due and payable or payable on demand.

13.2 Demerger Agreement

A summary of the terms of the Demerger Agreement is incorporated into this document by reference to Section A of Part IV of the Cookson Circular and the related definitions contained in Part XIII of the Cookson Circular.

13.3 Tax Sharing and Indemnification Agreement

A summary of the terms of the Tax Sharing and Indemnification Agreement is incorporated into this document by reference to Section B of Part IV of the Cookson Circular and the related definitions contained in Part XIII of the Cookson Circular.

13.4 Transitional Services Agreement

A summary of the terms of the Transitional Services Agreement is incorporated into this document by reference to Section C of Part IV of the Cookson Circular and the related definitions contained in Part XIII of the Cookson Circular.

14 Significant subsidiaries and joint ventures

Upon completion of the Demerger, Alent plc will directly own 100 per cent. of the issued share capital of Alent Investments Limited and will be the holding company of Alent. The following table shows the list of entities which will be the principal subsidiaries and joint ventures held by Alent plc or by one of its subsidiaries immediately following the Demerger Effective Time. Unless otherwise stated, each subsidiary is wholly owned and the percentage voting rights held for each entity is the same as the percentage of shares held.

Name Alpha Fry Limited . . . . . . . . . . . . . . . . . . . . . . . . . . Alpha-Fry Technologies B.V. . . . . . . . . . . . . . . . . . Alpha Metals Lotsysteme GmbH . . . . . . . . . . . . . . Alpha Metals (Taiwan) Inc. . . . . . . . . . . . . . . . . . . Cookson Alpha Metals (Shenzhen) Co., Ltd . . . . . Cookson Electronics Brasil Ltda . . . . . . . . . . . . . . . Cookson Electronics, Inc. . . . . . . . . . . . . . . . . . . . . Cookson Electronics Ltd . . . . . . . . . . . . . . . . . . . . . Cookson Enthone Chemistry Trading (Shanghai) Co. Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cookson India Private Limited . . . . . . . . . . . . . . . . Cookson Singapore Pte Ltd . . . . . . . . . . . . . . . . . . . Electroplating Engineers of Japan Ltd . . . . . . . . . . Enthone GmbH . . . . . . . . . . . . . . . . . . . . . . . . . . . . Enthone Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Fry’s Metals, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . .	Percentage ownership interest and voting power	Field of activity Trading company Trading company Trading company Trading company Trading company Trading company Trading company Trading company Trading company Trading company Trading company Trading company Trading company Trading company Trading company	Country of incorporation
	100 100 100 100 100 100 100 100 100 100 100 50 100 100 100		England & Wales The Netherlands Germany Taiwan China Brazil USA Hong Kong China India Singapore Japan Germany USA USA

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15 Working capital statement

In the opinion of Alent plc, the working capital available to Alent is sufficient for Alent’s present requirements, that is for at least the next 12 months following the date of this document.

16 Litigation

Save as disclosed below, there are no governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened of which Alent plc is aware) during the period covering at least the previous twelve months preceding the date of this document which may have, or have had in the recent past, a significant effect on Alent plc, Alent and/or the Alent’s financial position or profitability.

16.1 MacDermid claim

Cookson, Cookson Electronics, Inc. and Enthone Inc. (the “ Entities”) are defendants in two actions brought by MacDermid (incorporated in the United States) pending in the Connecticut Superior Court and arising out of corporate activity involving the parties in the autumn of 2006. The first action was commenced in 2009 and the second action was commenced in August 2012. MacDermid claims damages of approximately $62 million, plus punitive or exemplary damages, costs and interest which are currently unquantifiable. The Entities believe these claims have no merit and are vigorously defending these actions. The Entities anticipate filing motions for summary judgement in both cases by early 2013 and, if any claims remain pending decisions on those motions, a trial in the first action is anticipated in the second half of 2013. Any liability relating to the MacDermid claim arising following the Demerger Effective Time will be split equally between Alent plc and Vesuvius plc.

16.2 Bolta

In 2011, Enthone GmbH (“ Enthone ”) entered into an agreement with Bolta Werke GmbH (“ Bolta ”) for the installation and financing of a chemical treatment line, along with a ten year agreement for the supply of surface chemistries to both this new, and existing, Bolta plating lines. The installation of the new plating line was subcontracted by Enthone to a third party manufacturer, LPW GmbH (“ LPW ”). Prior to the completion of the plating line, LPW experienced financial difficulties and insolvency proceedings have recently been commenced against it. Enthone believes the extra costs of completing the line could be up to £5 million which, were they to be incurred, would be amortised over the 10 year period of the contract.

Discussions are ongoing between Bolta and Enthone in respect of additional costs that Bolta alleges it has incurred as a result of the delay in completing the installation beyond the revised completion date of January 2012. Bolta’s lawyers indicated a figure of £5.5 million for those losses; however they have not substantiated this amount and Enthone believes it to be without merit. Enthone had previously offered to pay Bolta £0.7 million in full and final settlement of Bolta’s additional costs. This offer was not accepted by Bolta and the matter remains subject to on-going negotiations between the parties.

An additional complication is that legal title to the plating line had not passed to Enthone prior to LPW entering insolvency proceedings and LPW’s receivers are claiming that title continues to reside with LPW. Should this prove to be the case, Alent risks losing the right to the full value of the sales and aid equipment assets capitalised as at 30 June 2012 at £7.8 million. Enthone believes, based on legal advice received, that title to the equipment passed directly to Bolta as a result of the circumstances of its construction and therefore intend to vigorously counter LPW’s claim to title. LPW’s receivers have also claimed an amount of £1.2 million for unpaid invoices; however, no documentation to support this claim has been provided to date and Enthone believes that it is without merit.

17 Significant change

There has been no significant change in the financial or trading position of Alent since 30 June 2012, being the end of the last financial period for which Alent audited interim financial information as set out in Part IX of this document has been prepared.

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Since its incorporation on 31 August 2012 Alent plc has not traded, nor has there been any significant change in its financial or trading position.

18 Consents

• 18.1 BofA Merrill Lynch, whose address is 2 King Edward Street, London EC1A 1HQ, has provided financial advice and acted as joint broker to each of Alent plc and Vesuvius plc in relation to this transaction and has given and has not withdrawn its written consent to the inclusion in this document of references to its name in the form and context in which they appear.

• 18.2 KPMG Audit Plc, whose address is 15 Canada Square, Canary Wharf, London E14 5GL, is a member firm of the Institute of Chartered Accountants in England and Wales and has given and has not withdrawn its written consent to the inclusion in this document of its reports in Part IX: “ Historical Financial Information ” and Part X: “ Unaudited Pro Forma Financial Information ” in the form and context in which they are included and has authorised the contents of such reports for the purposes of rule 5.5.3R(2)(f) of the Prospectus Rules.

• 18.3 KPMG LLP, whose address is 15 Canada Square, Canary Wharf, London E14 5GL, has given and has not withdrawn its written consent to the inclusion in this document of references to its name in the form and context in which they appear.

• 18.4 Rothschild, whose address is New Court, St. Swithin’s Lane, London EC4N 8AL, has given and has not withdrawn its written consent to the inclusion in this document of references to its name in the form and context in which they appear.

• 18.5 UBS, whose address is 1 Finsbury Avenue, London EC2M 2PP, has acted as joint broker to Alent plc in relation to this transaction and has given and has not withdrawn its written consent to the inclusion in this document of references to its name in the form and context in which they appear.

19 Costs and expenses

Alent will not receive any proceeds as a result of the Scheme or the Demerger. The total costs and expenses relating to the issue of this document, the Vesuvius Prospectus and the Cookson Circular and to the negotiation, preparation and implementation of the Scheme and Demerger are estimated to amount to £20 million and will be borne approximately 66 per cent. by Vesuvius and approximately 34 per cent. by Alent or, if the Demerger does not proceed, 100 per cent. by Cookson.

20 Sources and bases of selected financial and other information

• 20.1 In this document, unless otherwise stated, financial information relating to Alent has been extracted (without material adjustment) from the historical consolidated financial information contained in Part IX of this document.

• 20.2 Where information contained in this document has been sourced from a third party, it has been accurately reproduced and, so far as Alent plc is aware and is able to ascertain from information published by the relevant third party, no facts have been omitted which would render the reproduced information inaccurate or misleading.

• 20.3 The number of Alent Shares for which application will be made, respectively, to the UK Listing Authority for listing on the premium listing segment of the Official List, and to the London Stock Exchange for admission to trading on its main market for listed securities, has been calculated on the basis of 278,357,433 Cookson Shares in issue on 30 October 2012 (being the latest practicable business day prior to the publication of this document) and on the assumption that all options over Cookson Shares granted pursuant to the Cookson Executive Share Option Schemes are exercised. Statements relating to percentage interests in the issued share capital of Alent plc are calculated on the basis of 278,357,433 Cookson Shares in issue on 30 October 2012 (being the latest practicable business day prior to the publication of this document) and on the assumption that no new Cookson Shares will be issued between the date of this document and the Scheme Effective Time.

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21 Documents on display

Copies of the following documents are available for inspection during usual business hours on any weekday (Saturdays, Sundays and public holidays excepted), up until Alent Admission, at the offices of Linklaters LLP, One Silk Street, London EC2Y 8HQ:

• (a) the Alent Articles;

• (b) the consent letters referred to in paragraph 18 in this Part XIII: “ Additional Information ”;

• (c) the audited historical consolidated financial information of Alent for the three financial years ended 31 December 2011, 31 December 2010 and 31 December 2009 and the audited interim financial statements for the six months ended 30 June 2012 and the unaudited interim financial statements for the six months ended 30 June 2011;

• (d) the KPMG Audit Plc report on the historical consolidated financial information and interim financial information set out in Part IX of this document;

• (e) the KPMG Audit Plc report on pro forma financial information set out in Part X of this document;

• (f) the Cookson Circular;

• (g) the Vesuvius Prospectus;

• (h) the Separation Agreements;

• (i) the rules of the Alent Share Plan;

• (j) the rules of the Cookson Employee Share Plans;

• (k) the engagement letters and service contracts, as applicable, entered into between Alent plc and the Directors; and

• (l) this document.

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PART XIV INFORMATION INCORPORATED BY REFERENCE

Where the documentation described below itself incorporates information by reference to another document (“further information”), the further information is not intended to form part of this document for any purpose.

Information incorporated by reference Information on the Proposals Summary of the Demerger Agreement Summary of the Tax Sharing and Indemnification Agreement Summary of the Transitional Services Agreement Definitions contained in the Cookson Circular	Document reference Part II of the Cookson Circular, pages 29 to 54 (inclusive) Section A, Part IV of the Cookson Circular, page 68 Section B, Part IV of the Cookson Circular, page 69 Section C, Part IV of the Cookson Circular, pages 69 and 70 Part XIII of the Cookson Circular, pages 172 to 180 (inclusive)	Page number(s) in this document
		24 172 16,172 172 24,172

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PART XV DEFINITIONS

The following definitions apply throughout this document unless the context otherwise requires:

Admission and Disclosure Standards the requirements contained in the publication “Admission and Disclosure Standards” (as amended from time to time) containing, among other things, the admission requirements to be observed by companies seeking admission to trading on the London Stock Exchange’s main market for listed securities Admission or Alent Admission the admission of up to 278,700,000 Alent Shares to the premium listing segment of the Official List in accordance with the Listing Rules and to trading on the London Stock Exchange’s main market for listed securities in accordance with the Admission and Disclosure Standards Alent (i) if used to refer to a time before the Demerger Effective Time, Alent plc and the companies holding or operating the Alent Business in the Cookson Group (or, following the Scheme Effective Time but prior to the Demerger Effective Time, the companies holding or operating the Alent Business in Vesuvius); and

(ii) if used to refer to a time after the Demerger Effective Time, Alent plc and its subsidiaries and subsidiary undertakings from time to time holding or operating the Alent Business Alent Articles the articles of association of Alent plc from time to time Alent Board or Alent Directors the board of directors of Alent plc and “Alent Director” means any member of the Alent Board, as the context so provides Alent Business the Performance Materials division of Cookson, operated and held through a number of subsidiaries owned by Cookson (or Vesuvius plc as the context may require) and all of the trade marks, brand names and intellectual property associated with the division, which is proposed to be demerged in accordance with the Demerger Agreement and will be owned by Alent plc following the Demerger Effective Time Alent Capital Reduction the proposed reduction of the nominal value of the Alent Shares to be undertaken after the Demerger Effective Time Alent Capital Reduction Effective Date the date on which the Alent Capital Reduction becomes effective, expected to be on or before 20 December 2012 Alent Court Hearing the hearing by the Court to confirm the Alent Capital Reduction Alent Deferred Share the deferred share of £1.00 in the capital of Alent plc, formerly the Alent Subscriber Share Alent plc or the Company Alent plc, a company incorporated in England and Wales with registered number 8197966 and whose registered office is at Forsyth Road, Sheerwater, Woking, Surrey GU21 5RZ

Alent Redeemable Preference Shares the 50,000 redeemable preference shares of £1.00 each in the capital of Alent plc

Alent Remuneration Committee the remuneration committee of the Board

• Alent Shareholders holders of Alent Shares Alent Shares (i) prior to the Alent Capital Reduction becoming effective, the ordinary shares of a nominal value determined by the Alent Board prior to issue in the capital of Alent plc; and

• (ii) subsequent to the Alent Capital Reduction becoming effective, the ordinary shares of 10 pence in the capital of Alent plc

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Alent Subscriber Share

the initial ordinary share of £1.00 in the capital of Alent plc the articles of association of Alent plc

Articles or Alent Articles the articles of association of Alent plc Assembly Materials business the assembly materials business of Alent, further details of which are described in Part VII of this document

Audit Committee

the Audit Committee of the board of Alent plc

the board of directors of Alent plc

Board

BofA Merrill Lynch

Merrill Lynch International, incorporated in England and Wales with registered number 02312079 and its registered office address at 2 King Edward Street, London EC1A 1HQ

business day

a day (excluding Saturdays, Sundays and public holidays) on which banks are generally open for business in the City of London

CAGR compound annual growth rate CAPP the Cookson America Pension Plan, plan number 003

certificated or in certificated form

Code

where a share or other security is not in uncertificated form (that is, not in CREST)

the City Code on Takeovers and Mergers, issued by the Panel on Takeovers and Mergers

Companies Act the Companies Act 2006 Company Alent plc Completion the time at which the Demerger becomes effective, expected to be at or around 8.00 a.m. (London time) on 19 December 2012

Cookson

Cookson (to be renamed Cookson Group Limited pursuant to the Proposals), a company incorporated under the laws of England and Wales with registered number 0251977 and whose registered office is at 165 Fleet Street, London EC2A 2AE

Cookson Articles the articles of association of Cookson from time to time Cookson Board the board of directors of Cookson Cookson Capital Reduction the proposed reduction of the share capital of Cookson, involving the cancellation of the Cookson Shares pursuant to the Scheme, as described in Part II of the Cookson Circular

Cookson Circular

Cookson Employee Share Plans

Cookson ESOP

the circular to holders of Cookson Shares dated 1 November 2012 containing, among other things, details of the Proposals (including a description of the Scheme) and notice of the Court Meeting and the General Meeting

the Cookson Share Award Plans and the Cookson Executive Share Option Schemes

the Cookson Employee Share Ownership Plan established by Cookson by a trust deed dated 27 November 1992

Cookson Executive Share Option the Cookson UK Executive Share Option Scheme 1995 and the Schemes Cookson Executive Share Option Scheme 1995 Cookson Group Cookson and its subsidiaries and subsidiary undertakings from time to time

Cookson Share Award Plans the LTIP and the DSBP

Cookson Shareholders holders of Cookson Shares and “Cookson Shareholder” means any one of them

Cookson Shares

the ordinary shares of £1 each in the capital of Cookson

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connected person as defined in section 252 of the Companies Act, and “persons connected” should be interpreted in the same way Corporate Governance Code the UK Corporate Governance Code published by the Financial Reporting Council and dated June 2010, as amended from time to time Court the High Court of Justice in England and Wales Court Meeting the meeting of the Cookson Shareholders to be convened pursuant to an order of the Court and to be held at the offices of Linklaters LLP, One Silk Street, London EC2Y 8HQ at 10.00 a.m. on 26 November 2012 for the purposes of considering and, if thought fit, approving the Scheme and any adjournment of such meeting CREST the relevant system (as defined in the Uncertified Regulations) of which Euroclear is the Operator (as defined in the CREST Regulations) Daily Official List the daily official list of the London Stock Exchange Demerger the proposed demerger of the Performance Materials division from the Cookson Group on the terms and subject to the conditions set out in the Demerger Agreement Demerger Agreement the agreement relating to the Demerger between Cookson, Alent plc and Vesuvius plc, a summary of the principal terms of which is set out in Part XIII of this document Demerger and Reductions Resolution the special resolution numbered (2) to be proposed at the General Meeting, as set out in the notice of General Meeting in Part XVI of the Cookson Circular Demerger Effective Time the time at which the Demerger becomes effective, expected to be before 8.00 a.m. (London time) on 19 December 2012 Demerger Record Time 6.00 p.m. (London time) on the business day immediately following the date of the Vesuvius Court Hearing Directors or Alent Directors the Executive and Non-Executive Directors of Alent plc Disclosure and Transparency Rules the disclosure and transparency rules made by the FSA pursuant to section 73A of the FSMA DSBP the Cookson Group Deferred Share Bonus Plan 2007 EBITDA earnings before interest, taxation, depreciation and amortisation EEA the European Economic Area Engineered Ceramics division the business units of Vesuvius which trade under the Vesuvius and Foseco brand names and which supply (i) advanced ceramic consumable products and systems to the global steel industry and the global foundry industry and (ii) specialty ceramic products to the glass and solar industries EPS earnings per share Equiniti or Registrars Equiniti Limited, a company incorporated in England and Wales with registered number 06226088 and whose registered office is at Aspect House, Spencer Road, Lancing, West Sussex BN99 6DA Euroclear Euroclear UK & Ireland Limited, a company incorporated under the laws of England and Wales Executive Directors the executive directors of Alent plc Forms of Proxy as the context may require, either or both of (i) the blue form of proxy for use at the Court Meeting, and (ii) the white form of proxy for use at the General Meeting, each of which accompanies the Cookson Circular

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FSA the UK Financial Services Authority FSMA the Financial Services and Markets Act 2000 (as amended) FTSE Index Financial Times share index General Meeting the general meeting of Cookson Shareholders to be held at Linklaters LLP, One Silk Street, London EC2Y 8HQ at 10.15 a.m. on 26 November 2012 (or as soon thereafter as the Court Meeting shall have concluded or been adjourned) for the purpose of the Scheme, notice of which is set out in Part XVI of the Cookson Circular, and any adjournment of such meeting Group Alent HMRC HM Revenue and Customs holder a registered holder of shares, including any person entitled by transmission IAS International Accounting Standards IFRS the International Financial Reporting Standards, as adopted by the European Union Initial Alent Shareholder the holder of (i) the Alent Subscriber Share or Alent Deferred Share, as applicable, and (ii) the Alent Redeemable Preference Shares IRS Code the US Internal Revenue Code of 1986, as amended from time to time IT information technology LIBOR London inter-bank offered rate Listing Rules the listing rules made by the FSA pursuant to section 73A of the FSMA London Stock Exchange London Stock Exchange plc LTIP the Cookson Group Long-Term Incentive Plan 2004 member unless the context otherwise requires, a member of Cookson, Alent plc or Vesuvius plc, as the case may be, at any relevant date NAFTA North American Free Trade Agreement Nominations Committee the Nominations Committee of the board of Alent plc Non-Executive Directors the non-executive directors of Alent plc Official List the official list of the UK Listing Authority Overseas Shareholders shareholders who are citizens, residents or nationals of jurisdictions outside the United Kingdom or whom Alent plc reasonably believe to be citizens, residents or nationals of jurisdictions outside the United Kingdom. PBGC the US Pension Benefit Guaranty Corporation, established under the Employee Retirement Income Security Act (ERISA) of 1974, as amended

Pensions Regulator the UK Pensions Regulator of work-based pension schemes, established under the Pensions Act 2004, as amended Performance Materials division the division of the Cookson which electronics

the division of the Cookson Group which supplies electronics assembly materials and advanced surface treatment and plating chemicals, including the joining technologies business, a supplier of solder, fluxes, adhesives and related products and the surface chemistries business, a supplier of electro-plating chemicals

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premium listing a listing by the FSA by virtue of which a company is subject to the full requirements of the Listing Rules Proposals the Reorganisation, the Resolutions, the Scheme, the Demerger and the Reductions, details of which are set out in Part VI of this document Prospectus Rules the prospectus rules made by the FSA pursuant to section 73A of the FSMA Reorganisation the proposed reorganisation of the Cookson Group to be effected prior to the Demerger Effective Time, as described in Part II of the Cookson Circular Registrars Equiniti Limited of Aspect House, Spencer Road, Lancing, West Sussex BN99 6DA Regulatory Information Service any channel recognised as a channel for the dissemination of regulatory information by listed companies as defined in the Listing Rules Remuneration Committee the remuneration committee of the board of Alent plc or the board of Cookson, as the context may require Reporting Accountants or KPMG KPMG Audit Plc of 15 Canada Square, Canary Wharf, London E14 5GL Resolutions the resolutions to be proposed at the General Meeting, as set out in the notice of General Meeting in Part XVI of the Cookson Circular, including the Scheme Resolution, the Demerger and Reductions Resolution and the Share Plans Resolutions Rothschild N M Rothschild & Sons Limited, a company incorporated in England and Wales with registered number 00925279 and whose registered address is at New Court, St. Swithin’s Lane, London EC4N 8AL RSP the Cookson Retirement Security Plan Scheme the scheme of arrangement proposed to be made under Part 26 of the Companies Act between Cookson and Cookson Shareholders as set out in Part XI of the Cookson Circular, with or subject to any modification, addition or condition approved or imposed by the Court and agreed to by Cookson and Vesuvius plc Scheme Court Hearing the hearing by the Court to sanction the Scheme and to confirm the Cookson Capital Reduction Scheme Effective Time the date and time at which the Scheme becomes effective in accordance with its terms, expected to be at around 9.00 p.m. on 14 December 2012 Scheme Record Time 6.00 p.m. (London time) on the date the Scheme becomes effective in accordance with its terms Scheme Resolution the special resolution numbered (1) to be proposed at the General Meeting, as set out in the notice of General Meeting in Part XVI of the Cookson Circular SDRT stamp duty reserve tax Securities Act the United States Securities Act of 1933 Separation Agreements together, the Demerger Agreement, the Tax Sharing and Indemnification Agreement and the Transitional Services Agreement Shares Cookson Shares, Alent Shares or Vesuvius Shares, as the context may require Share Plans Resolutions the ordinary resolutions numbered 4 and 5 (inclusive) to be proposed at the General Meeting, as set out in the notice of General Meeting in Part XVI of the Cookson Circular

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Sponsor Rothschild Surface Chemistries business the surface chemistries business of Alent, further details of which are set out in Part VII of this document Tax Sharing and Indemnification the tax sharing and indemnification agreement to be entered into Agreement by Cookson, Alent plc and Vesuvius plc, a summary of the principal terms of which is set out in Part XIII: “ Additional Information ” of this document Transitional Services Agreement the transitional services agreement to be entered into by Alent plc and Vesuvius plc, a summary of the principal terms of which is set out in Part XIII: “ Additional Information ” of this document TSR total shareholder return UBS UBS Limited, incorporated in England and Wales with registered number 02035362 and its registered office address at 1 Finsbury Avenue, London EC2M 2PP

• UK or United Kingdom the United Kingdom of Great Britain and Northern Ireland UK Listing Authority or UKLA the Financial Services Authority acting in its capacity as the competent authority for the purposes of Part VI of the FSMA

• UK Plan the defined benefit pension plan of Cookson Group

• uncertificated or in uncertificated form in respect of a share or other security, where that share or other security is recorded on the relevant register of the share or security concerned as being held in uncertificated form in CREST and title to which may be transferred by means of CREST

• Uncertificated Regulations means the Uncertificated Securities Regulations 2001, as amended and for the time being in force

• US or United States the United States of America, its territories and possessions, any state of the United States of America and the District of Columbia

• US Private Placement loan notes or Notes the loan notes issued by Cookson on 16 December 2010 in an aggregate principal amount of U.S. $250,000,000, as further described in paragraph 13.1 of Part XIII of the Vesuvius Prospectus

• VAT Value-added tax as provided under the Value Added Tax Act 1994

• Vesuvius (i) if used to refer to a time before the Scheme Effective Time or if the Scheme does not become effective, Vesuvius plc and Cookson and their respective subsidiaries and subsidiary undertakings from time to time; and

• (ii) if used to refer to a time after the Scheme Effective Time, Vesuvius plc and its subsidiaries and subsidiary undertakings (including Cookson) from time to time which, for the avoidance of doubt, includes Alent prior to the Demerger Effective Time and excludes Alent after the Demerger Effective Time

Vesuvius Board the board of directors of Vesuvius plc and “Vesuvius Director” means any member of the Vesuvius Board

Vesuvius Business the business of Vesuvius, comprising the Engineered Ceramics and Precious Metals divisions

Vesuvius Capital Reduction the proposed reduction of the share capital of Vesuvius plc under section 641 of the Companies Act to be undertaken shortly after the Scheme Effective Time in connection with the Demerger

Vesuvius Court Hearing the hearing by the Court of the claim form to confirm the Vesuvius Capital Reduction

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Vesuvius plc

Vesuvius plc, a company incorporated under the laws of England and Wales with registered number 8217766 and whose registered office is at 165 Fleet Street, London EC4A 2AE

Vesuvius Prospectus

the prospectus prepared by Vesuvius plc in accordance with the Prospectus Rules and published in relation to Vesuvius and the Vesuvius Shares

Vesuvius Shareholders holders of Vesuvius Shares Vesuvius Shares shares in the

ordinary shares in the capital of Vesuvius plc with a nominal value:

• (i) prior to the Vesuvius Capital Reduction becoming effective, equal to the final middle market quotation (as derived from the daily official list of the London Stock Exchange) of a Cookson Share on the date of the Scheme Effective Time (or such other nominal value as the Cookson Board may determine); and

• (ii) subsequent to the Vesuvius Capital Reduction becoming effective 10 pence

Voting Record Time

• 6.00 p.m. (London time) on 24 November 2012 or, if the Court Meeting or General Meeting is adjourned, 6.00 p.m. on the day which is two days before the date of such adjourned meeting

All references to legislation in this document are to the legislation of England and Wales unless the contrary is indicated. Any reference to any provision of any legislation shall include any amendment, modification, re-enactment or extension thereof.

Words importing the singular shall include the plural and vice versa, and words importing the masculine gender shall include the feminine or neutral gender.

For the purpose of this document, “ subsidiary ”, “ subsidiary undertaking ”, “ undertaking ” and “ associated undertaking ” have the meanings given by the Companies Act.

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PART XVI GLOSSARY OF TECHNICAL TERMS

The following terms have the following meanings throughout this document unless the context otherwise requires:

BGA	ball grid array
damascene copper	chemicals used to create nanoscale copper connections within
	semiconductor wafers
die attach products	the “die” refers to the silicon die in active IC packages. The
	attachment is most commonly a thermal path to help draw the
	heat out of the package and is typically either a purely metal or a
	conductive polymeric bond. This application is critical to the IC’s
	reliability and ultimate performance
electroplating	a plating process that uses electrical current to coat a conductive
	object with a thin layer of another material in order to bestow a
	desired property (e.g. abrasion-resistance and wear-resistance,
	aesthetic qualities, etc.) to a surface that otherwise lacks that property
flux	a chemical-based material designed to help reduce oxides and
	clean metal surfaces in order to enable effective ‘wetting’ of
	metal surfaces to the molten solder alloy during the creation of a
	solder joint when attaching an electronic component to a PCB
immersion silver	a PCB final finish that provides tarnish resistance, low contact
	resistance and ease of cleaning. Specially designed to meet PCB
	lead-free assembly and OEM requirements
integrated circuitorIC	an electronic circuit manufactured by lithograph, or the patterned
	diffusion of trace elements into the surface of a thin substrate of
	semiconductor material. Additional materials are deposited and
	patterned to form interconnections between semiconductor
	devices
LED	light-emitting diode
PCB	Printed circuit board, a type of circuit board which has conducting
	tracks superimposed or “printed” on one or both sides. May refer
	to a board either before or after the assembly process. Also
	referred to as a printed wiring board (“PWB”) in the US
PCB assembly	PCB assembly involves attaching components such as semi-
	conductors and capacitors on to a fabricated board and making the
	required physical and electrical connections. This has to be done
	with precise accuracy if the finished PCB is to function
	effectively
semiconductor copper	see_damascene copper_
semiconductor wafers	a semiconductor wafer is a thin slice of semiconducting material,
	upon which microcircuits are constructed by chemical deposition
	of various materials
solder	an alloy of tin and other metals with a comparatively low melting
	point used to join less fusible metals
surface mount technology	both a technology design and the electronic components that are used
	in the process of soldering components to the surface of a PCB
through-hole assembly	the use of either older technology parts or parts requiring
	significant mechanical strength, where the component has wire
	leads that physically pass through holes in a PCB
wafer bumping products	metal alloys for wafer bump plating, including gold, copper, lead-
	free alloys and low alpha lead-based alloys

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