Annual Report 2007 - Antofagasta plc

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CHAIRMAN’S REVIEWChairman’s Review continuedOther Corporate MattersCorporate governanceAntofagasta’s Board is committed to managingthe operations of the Group with a view tomaximising value for all shareholders. Inconsideration of corporate governance matters,the Board is mindful of the principles set out in theCombined Code on Corporate Governance as wellas its responsibilities to all stakeholders. However,given the ownership structure and asset base ofthe Group, the Board believes that full adherence tothe Combined Code is not practicable. Nevertheless,the Board considers that its structure and balanceprovide an appropriate basis for ensuring itseffectiveness and the protection of the interestsof all shareholders in the Company. The Board’sapproach and practice in this area is set out in thecorporate governance statement on pages 64 to71 and two areas related to our controlled companystatus in which the Board did not comply with thedetailed provisions of the Combined Code are setout on page 71.Corporate social responsibilityIn the conduct of the Group’s operational,development and exploration activities as set outin this review, the Board places great importanceon a range of considerations including health andsafety, environmental matters, community relationsand proper management of human resources.Sustainable development considerations are anintegral part of the Group’s decision-making processand it adopts a long-term view in formulating strategy,company policy and everyday business procedures.Many of the Group’s operations have sustainabledevelopment policies in place which are implementedin a number of ways, and the Corporate SocialResponsibility Report on pages 36 to 59 setsthis out in greater detail.During 2007, the Board decided to develop andimplement a Sustainable Development Policyacross the Group to provide a structured frameworkthrough which its strategy and growth plans couldbe achieved; formulation of this is now in progress.DividendsThe Board recommends a final dividend of US 43.4cents per ordinary share payable on 12 June 2008 toshareholders on the Register at the close of businesson 9 May 2008. The final dividend comprises anordinary dividend of US 5.4 cents and a special dividendof US 38 cents. Including the interim dividend, thisrepresents a distribution of approximately 35% of netearnings (profit attributable to equity holders of theCompany) after taking into account withholding taxesincurred by the Group in funding the dividend.The Board’s policy is to establish an ordinary dividendwhich can be maintained or progressively increasedat conservative long-term copper prices and throughthe economic cycle. The Board recommends specialdividends when it considers these appropriate aftertaking into account the level of profits earned in theperiod under review, the existing cash position ofthe Group and significant known or expected fundingcommitments. As can be seen from the table onpage 21, the Board has increased its recommendeddividends in line with profits by means of specialdividends in these years of high copper prices.The cost of the final dividend, including relatedwithholding taxes, is approximately US$546 million.In determining this, the Board has taken into accountits existing capital commitments and working capitalrequirements and considers this to be an appropriatelevel of distribution of profits earned in the year. TheBoard has also considered the potential future capitalrequirements which could amount to approximatelyUS$3 billion over a number of years should it proceedwith its existing portfolio of projects and opportunities,and it believes these opportunities remain attractivefor the long-term development of the Group even inan environment of lower copper prices. The Boardalso considers that this provides the Group withsufficient flexibility to take advantage of newopportunities which may arise in the future.20Antofagasta plc Annual Report and Financial Statements 2007
CHAIRMAN’S REVIEWDividends (1)Dividends per share proposed in relation to the year are as follows:2007 2006 2005 (2) 2004 (2) 07 v 06 06 v 05 05 v 04US cents US cents US cents US cents % change % change % changeOrdinaryInterim 3.2 3.2 3.2 3.0Final 5.4 5.0 4.8 4.88.6 8.2 8.0 7.8 4.9% 2.5% 2.6%SpecialInterim 3.0 2.0 – –Final 38.0 38.0 14.0 8.041.0 40.0 14.0 8.0Total dividends to ordinaryshareholders 49.6 48.2 22.0 15.8 2.9% 119.1% 39.2%Dividend as percentage of profitattributable to equity shareholders 35% 35% 30% 27%(1) Further details relating to dividends are given in Note 11 to the financial statements.(2) Dividends per share have been restated for the effects of the 4-for-1 bonus issue on 19 June 2006.Johann von LoebensteinI wish to note with sorrow the death on 21 October2007 of Johann von Loebenstein. Johann was adirector of both AMSA and El Tesoro for many yearsand had a long and distinguished career as a leader ofthe mining industry in Chile. He will be greatly missedby his many friends and colleagues in the Group.The Board believes it has a strong managementteam with a focus on innovation and development,combined with a motivated and talented workforce.It believes this leaves the Group well placed tomeet the exciting prospects it has assembled and toexecute its strategy of growth in the coming years.Antofagasta’s teamThe excellent work and effort made by the Group’sexecutives, staff and employees has contributedto another good year of results and achievements.I would like to express here my sincere appreciationfor this effort and am joined in this by my fellowDirectors.J-P LuksicChairman10 March 2008Antofagasta plc Annual Report and Financial Statements 200721
Page 1: ANTOFAGASTAAnnual Report and Financ
Page 4 and 5: Highlights• Net earnings up 2.1%
Page 6 and 7: Highlights continued471.8 498.4 467
Page 8 and 9: CHAIRMAN’S REVIEWChairman’s Rev
Page 12 and 13: A R G E N T I N ACHAIRMAN’S REVIE
Page 24 and 25: Financial ReviewFINANCIAL REVIEWBas
Page 26 and 27: Financial Review continuedFINANCIAL
Page 38 and 39: Corporate Social ResponsibilityCSR
Page 41 and 42: TransportationThe Antofagasta Railw
Page 43 and 44: Other international and national st
Page 45 and 46: Organisations of which Group compan
Page 47 and 48: Compensation, recruitment and reten
Page 49 and 50: CSR REPORTEl Tesoro promotes a cult
Page 51 and 52: • health and safety issues are mo
Page 53 and 54: Native vegetation at the Choapa Val
Page 55 and 56: existing naturally in the Andean re
Page 57 and 58: saponaria), Espino (Acacia caven),
Page 59 and 60: • The “Together We Can Grow Mor
Page 61 and 62: Awards and RecognitionDuring the ye
Page 63 and 64: special dividend. The total cost of
Page 65 and 66: EnvironmentThe Group seeks to ensur
Page 67 and 68: Antofagasta Railway Company plc (ra
Page 69 and 70: Information and professional develo
Page 71 and 72: Company, for safeguarding the asset
Page 73 and 74:
Statement of Compliance withthe Det
Page 75 and 76:
Non-Executive Directors’ feesThe
Page 77 and 78:
Audited InformationDirectors’ rem
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Basis of audit opinionWe conducted
Page 81 and 82:
Consolidated Balance SheetAt 31 Dec
Page 83 and 84:
Consolidated Statement of Changes i
Page 85 and 86:
2 Principal Accounting Policiesa) A
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2 Principal Accounting Policies con
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4 Revenue and Total Profit from Ope
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5 Segment Information continueda) P
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5 Segment Information continueda) P
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6 Profit for the YearProfit for the
Page 103 and 104:
8 Net Finance IncomeNet finance inc
Page 105 and 106:
11 DividendsAmounts recognised as d
Page 107 and 108:
13 Property, Plant and EquipmentLan
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16 Investment in Associate2007 2006
Page 111 and 112:
19 Inventories2007 2006US$m US$mRaw
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22 Borrowings continued(ii)Other lo
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22 Borrowings continuedd) Maturity
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24 Financial Instruments and Financ
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26 Deferred Tax continuedAt 31 Dece
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29 Minority InterestsThe minority i
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33 Notes to the Consolidated Cash F
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37 Related Party Transactions conti
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38 Contingent Assets and Contingent
Page 137 and 138:
40A Basis of Preparation of the Bal
Page 139 and 140:
40D Subsidiaries continueda) Invest
Page 141 and 142:
40G Independent Auditors’ Report
Page 143 and 144:
Dividends to Ordinary ShareholdersD
Page 145 and 146:
Mining Production and Sales, Transp
Page 147 and 148:
A ‘Measured Mineral Resource’ i
Page 149 and 150:
Notes to Ore Reserve and Mineral Re
Page 151 and 152:
GDPGross Domestic Product.Governmen
Page 153 and 154:
TC/RCTreatment and refining charges
Page 155 and 156:
Directors and AdvisorsDirectorsJ-P
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Annual Report 2007 - Antofagasta plc

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