The Board of Directors’ of Sandvik AB report of the Remuneration Committee’s evaluation of remunerations to senior executives

This is a translation of the Swedish original. In case of differences between the English translation and the Swedish original, the Swedish text shall prevail.

The Board of Directors of Sandvik AB has established a Remuneration Committee which, since the Annual General Meeting 2012, consists of Anders Nyrén, Chairman of the Board as well as of the Remuneration Committee, Lars Westerberg and Johan Karlström. The Remuneration Committee's tasks include monitoring and evaluating programs for variable remuneration to senior executives, the application of Sandvik's guidelines for the remuneration of senior executives and current remuneration structures and remuneration levels in the Company. The Board of Directors hereby presents the following report of the results of the Remuneration Committee's evaluation, in accordance with rule 10.3 of the Swedish Corporate Governance Code.

The Remuneration Committee considers that the Company's guidelines for the remuneration of senior executives adopted by the Annual General Meeting 2012 have fulfilled their purposes and worked well. However, in order to attain increased flexibility, the Remuneration Committee has proposed that the Board should submit simplified guidelines for decision by the Annual General Meeting 2013.

Moreover, the Committee considers the Company's remuneration structures and remuneration levels to be balanced and on market terms.

The Annual General Meetings 2011 and 2012 resolved for each year to adopt a share-related long-term incentive program for senior executives and key employees in order to align the interests of the participants and the shareholders.

The Committee has monitored and evaluated these share-related long-term incentive programs for senior executives and key employees. According to the Committee, the programs are appropriate in order to be able to retain and motivate key employees in the Group, and well-balanced. The Committee has noted that the programs have been well received.

Stockholm, January 2013

Sandvik Aktiebolag (publ)
The Board of Directors