Directors' Report

The Directors present their Annual Report and Financial Statements for the year ended 31 March 2009 which were approved by the Board of Directors on 3 June 2009.

PRINCIPAL ACTIVITIES AND BUSINESS REVIEW

The principal activities of the member companies of the Group are focused on Aerospace and Specialist Engineering as detailed in the Business Review. The Chairman’s Statement, the Chief Executive’s Review and the Business Review contain a review of the development of the Group’s business during the year including a review of the Group’s trading performance and an indication of its future prospects. The Business Review also contains an assessment of the Group’s exposure to financial and other principal risks and uncertainties together with a description of how these risks and uncertainties are managed. Attention is drawn to the cautionary statement at the end of this report..

ACQUISITIONS

The acquisitions of 100% of the voting rights of Odyssey Industries, Inc. and Global Tooling Systems, Inc. for a total consideration of US$314 million were approved by Shareholders at an Extraordinary General Meeting of the Company held on 3 June 2008 and were completed on 10 June 2008.

SUBSTANTIAL SHAREHOLDERS

At 3 June 2009, the following interests exceeding the 3% disclosure threshold were recorded in the register of the Company kept in accordance with Section 808 of the Companies Act 2006.

DEVELOPMENT COSTS

The Group have capitalised development costs during the year amounting to £0.3 million (2008: £0.6 million) in intangible assets. These amounts are primarily in respect of major strategic aerospace programmes.

FINANCIAL INSTRUMENTS

Information on the Group’s use of financial instruments, financial risk management objectives and policies and exposure are shown in Note 30 to the Financial Statements.

SUPPLIER PAYMENT POLICY

The Group agrees payment terms with its suppliers when it enters into binding purchase contracts. The Group seeks to abide by the payment terms agreed with suppliers whenever it is satisfied that the supplier has provided the goods or services in accordance with the agreed terms and conditions. The Group does not have a standard credit period, and does not apply a general recognised code with regard to payment of suppliers, but the average during the financial year was 47 days (2008: 63 days). Hampson Industries PLC, as a holding company, had supplier balances of £0.9 million at 31 March 2009 (2008: £1.2 million).

DIVIDEND

The Directors recommend a final dividend of 1.6p per share on the Ordinary share capital to be paid on or around 9 October 2009, making a total distribution of 2.4p per share for the year.

	Ordinary Shares	%
Aberforth Partners LLP	26,177,388	16.50%
Mr Randal Bellestri	14,316,525	9.02%
JP Morgan Asset Management (UK) Limited	8,103,159	5.74%
Legal and General Investment Management Limited	8,790,359	5.54%
AXA S.A.	7,785,605	4.91%

DIRECTORS

The Directors of the Company at 31 March 2009 and their interests in the shares of the Company are shown in the Report on the Director's Remuneration. Mr Jonathan Palmer and Mr Robert Stokell resigned from the Board on 16 June 2008 and 4 September 2008 respectively. Mr Paul Gismondi joined the Board on 16 June 2008 and Mr Peter Barlow joined the Board on 1 August 2008. Both Mr Gismondi and Mr Barlow successfully stood for election as Directors at the Annual General Meeting held on 4 September 2008.

In accordance with the Articles of Association of the Company Mr Kim Ward and Mr Chris Geoghegan will retire by rotation and, being eligible, will offer themselves for re-election at the Annual General Meeting.

Details of the Directors’ service contracts are incorporated in the Report on Directors’ Remuneration.

SHARE CAPITAL

Changes in the share capital of the Company are shown in Note 25 to the Financial Statements.

EMPLOYEES

The Group continues to pursue a policy of meeting with representatives of various groups of employees at which relevant information and developments are discussed.

The Group operates long-term incentive arrangements including a performance share plan and a coinvestment plan with a view to attracting, motivating and retaining the best employees and also to align individual goals and objectives with those of the Group. Such arrangements are reviewed from time to time to ensure their continued appropriateness and effectiveness.

Full and fair consideration is given to applications for employment from disabled persons and to continuing the employment of those who become disabled while employed. The policy is to give equal opportunity for training, career development and promotion.

ENVIRONMENT

The Group considers environmental issues to be of the highest importance. All UK sites are ISO 14001:2004 accredited. During 2008/09, all locations were the subject of an environmental audit. These audits assess the Environmental Management System at each site against the requirements of ISO 14001:2004 Standard. In addition, the audits review site procedures to sustain environmental good practices and identify and record opportunities to improve environmental performance. Similar audits will be undertaken during 2009/10.

Although the US does not have a uniform system of accreditation, the Group ensures that all of its businesses operate to at least the levels required by the state in which they reside.

CHARITABLE AND POLITICAL DONATIONS

Donations of £250 were given for United Kingdom charitable purposes (2008: £nil). No political donations were made during the year (2008: £nil).

ANNUAL GENERAL MEETING (“AGM”)

A notice convening this year’s AGM is enclosed with this Annual Report. In addition to the ordinary business of an AGM, the Directors are seeking certain other authorities, details of which are set out in the notice and in a letter to Shareholders dated 29 July 2009.

DISCLOSURE OF INFORMATION TO AUDITOR

The Directors who held office at the date of approval of this Directors’ report confirm that, in so far as they are each aware, there is no relevant audit information of which the Company’s Auditor is unaware; and each Director has taken all the steps that they ought to have taken as a Director to make themselves aware of any relevant audit information and to establish that the Company’s Auditor is aware of the information.