Fresnillo plc's Executive Committee

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97Vice President of Operations adjudicates any complaints filed. Four reports were received on the hotline in2010. The Honour Commission asked for corrective actions in two cases and the other two were declared“not applicable”.The Audit Committee is responsible for reviewing these arrangements which it did at its meeting in December2010 and it is satisfied with the adequacy of those arrangements.Transactions with Related PartiesThe Audit Committee reviews the financial and commercial aspects of any transaction proposed betweenthe Fresnillo Group and the Peñoles Group prior to such matters being considered by the Independent NonexecutiveDirectors under the terms of the Relationship Agreement or in compliance with Chapter 11 of theListing Rules. During the year, the Audit Committee has considered the proposed charges in respect of theMet-Mex Arrangements for 2010 and the terms on which some minor exploration licences were transferredfrom Peñoles to Fresnillo during the year. The Audit Committee also reviews a schedule of the Company’srelated party transactions once a year.HSECR COMMITTEE REPORTHealth, Safety, Environment and Community Relations (HSECR) SystemThe Group develops, executes and monitors a broad range of policies and practices related to health, safety,sustainability and corporate social responsibility through its Health, Safety, Environment and CommunityRelations System.At the Board level, the Health, Safety, Environment and Community Relations (HSECR) Committee is responsiblefor formulating and recommending HSECR policies to the full Board, reviewing management’sinvestigation of incidents or accidents, and evaluating the results of the Group’s independent performanceaudits and action plans. The members of the HSECR Committee are Rafael MacGregor (Chairman of theCommittee), Javier Fernández and Jaime Lomelín.The terms of reference of the HSECR Committee are available for inspection on the Company’s website atwww.fresnilloplc.com.Full details of the performance of the Company in matters of corporate and social responsibility and the activityof the HSECR Committee during the year are set out in the Sustainable Development Report on pages 56-69.HOW THE BOARD MANAGES ITS RELATIONS WITH SHAREHOLDERSThe Company has an office in London where the Head of Investor Relations is based. The Group has implementeda strong investor relations programme and aims to meet major shareholders and analysts at least twicea year to discuss the results of the Group and to respond to any queries the shareholders may have. The Headof Investor Relations in London maintains ongoing relations with analysts and major shareholders through telephonecalls and meetings. The Company also uses a full programme of mining conferences to meet with currentand prospective investors. Contact with investors in Mexico is maintained through the Investor Relations Officein Mexico City. The Chief Executive Officer, Chief Financial Officer, the Vice President of Exploration and the ChiefOperating Officer participate in the major roadshows to meet with analysts and shareholders. The Head of InvestorRelations, supported by the Chief Executive Officer, gives a report at each Board meeting on communicationsand shareholder activity.The Company’s third annual general meeting will be held on Wednesday 17 May 2011. The business of the AnnualGeneral Meeting will be conducted in accordance with the provisions D.2.1 and D.2.2 of the Code. The Chairman ofthe Board and the chairmen of each of the board committees will be available to answer questions put forward tothem by shareholders of the Company. The Annual Report and Accounts and Notice of the Annual General Meetingwill be sent to shareholders at least 20 working days prior to the date of the meeting.GROUP OVERVIEW STRATEGY PERFORMANCE GOVERNANCE FINANCIALSFresnillo plc2010Annual Report
98corporategovernance report continuedHOW THE BOARD MAINTAINS INDEPENDENCEBoard Balance and IndependenceThe composition of the Board and the roles of the Chairman, Chief Executive Director and the Senior IndependentDirector have been structured to ensure that no one individual can dominate the decision-makingprocesses of the Board.The separate roles of Chairman and of the Chief Executive Officer are recognised and the requirements forthese roles have been specified in writing and agreed by the Board. There have been no changes to theseroles since they were agreed by the Board. Mr Baillères is also the Chairman of Peñoles and other companieswithin the BAL Group.As Senior Independent Director, Lord Cairns is available to shareholders if they have concerns that have notbeen resolved through the normal channels of Chairman, Chief Executive Officer, Chief Financial Officer orHead of Investor Relations.Alberto Baillères, Rafael MacGregor, Juan Bordes and Arturo Fernández are each directors of Peñoles andhave been appointed to the Board by Peñoles pursuant to the Relationship Agreement. Thus, the Chairmanwas not independent at the time of his appointment. However, Mr Baillères has been responsiblefor overseeing the successful development of the Fresnillo Group over many years and therefore theBoard considers that his continued involvement as its non-executive chairman is very important to theCompany. Furthermore, a transparent governance system has been established, primarily through theRelationship Agreement, which ensures that the Company benefits from Mr Baillères’ leadership andexperience whilst being able to demonstrate to other shareholders that the Fresnillo Group is capableof carrying on its business independently. In particular, the Relationship Agreement ensures that transactionsand relationships between the Fresnillo Group and its major shareholder are at arm’s length and oncompetitive commercial terms.Fernando Ruiz is a retired partner and consultant in the firm Chevez, Ruiz, Zamarripa y Cia., S.C., a firm providingprofessional services to the Company. Mr Ruiz is not involved in providing any services to the Companyon behalf of Chevez, Ruiz, Zamarripa y Cia., S.C. (the value of those services is not material to either party).Guy Wilson retired as a partner of Ernst & Young LLP, the Company’s auditors on 30 June 2008. Mr Wilsonwas not involved in the provision of audit or any other services to the Company by Ernst & Young LLP priorto his retirement.The Board considers Lord Cairns, Fernando Ruiz, Fernando Solana, Javier Fernández and Guy Wilson tobe independent.Relationship AgreementOn 8 May 2008, Peñoles and the Company entered into a relationship agreement to regulate the ongoingrelationship between the Company and Peñoles. The principal purpose of the Relationship Agreement is toensure that the Fresnillo Group is capable of carrying on its business independently of the Peñoles Group,and that transactions and relationships with the Peñoles Group are at arm’s length and on normal commercialterms. Peñoles has also undertaken not to exercise its voting rights to amend the Memorandum andArticles of Association in a way which would be inconsistent with the provisions of the agreement. It hasalso agreed to abstain from voting on any resolution to approve a “related party transaction” (as defined inparagraph 11.1.5 R of the Listing Rules) involving any member of the Peñoles Group.Since the IPO the Board has refined the process by which transactions between Peñoles and the Companyare approved and the approach taken to ensure that the Relationship Agreement is fully implemented. Thekey elements of this process are:
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Fresnillo plc's Executive Committee

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