Annual Report 2000 in PDF - Antofagasta plc

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Report of the DirectorsSpecial Business at the Annual General MeetingResolution 6 – A special resolution must be obtained to empower the Directors to issue equity securitiesof the Company for cash other than pro rata to ordinary shareholders. Resolution 6 on the agenda of theAnnual General Meeting will extend the existing power until the next Annual General Meeting or, if earlier,15 months from the passing of the resolution. The extension will permit the Directors to make issues ofequity securities for cash either by a rights offer to ordinary shareholders or, up to a maximum of £492,928(5% of the issued ordinary share capital), in any other way. The proposal is consistent with the guidelinesapproved by the Investment Committees of the Association of British Insurers and the National Associationof Pension Funds.The guidelines also indicate that issues of equity securities for cash (other than to ordinary shareholderspro rata to their holdings of ordinary shares) should not, in any rolling three year period, exceed 7.5% ofthe issued ordinary share capital.AuditorsPricewaterhouseCoopers resigned as auditors of the Company on 3 August 2000. Deloitte & Touche wereappointed by the Directors to fill the casual vacancy that arose. A resolution proposing the appointmentof Deloitte & Touche as auditors of the Company for which special notice has been given will be put tothe Annual General Meeting.By Order of the BoardFor and on behalf ofPetershill Secretaries LimitedSecretary8 May 2001ANTOFAGASTA PLC Annual Report 200028
Corporate GovernanceThe Board of Directors describes below how it applies the corporate governance principles contained inthe Principles of Good Governance and Code of Best Practice of the United Kingdom Listing Authority(“Combined Code”). The Company complied with the detailed code provisions contained in the CombinedCode during 2000 except in relation to the recommended number of independent Non-Executive Directorsand Audit Committee members, the recommendation that the Audit Committee should consist of a majorityof independent Non-Executive Directors and the Remuneration Committee exclusively of independentNon-Executive Directors, the absence of performance-related pay measures for all Executive Directors andthe requirement to conduct an annual review of the effectiveness of internal controls including the need foran internal audit function. Reasons for these areas of non-compliance, including alternative governanceprocedures in place, are set out in the discussion of principles below.a) Directors and Board StructureThe Directors collectively have ultimate responsibility for the conduct of the Group’s business. The Boardcurrently comprises five directors, following the resignation of V P Radic on 31 August 2000. Three of theseDirectors (one of whom is Non-Executive) are based in Chile where the Group’s operations are principallylocated, and two Directors (one of whom is Non-Executive) are based in the United Kingdom where theCompany is incorporated and listed on the London Stock Exchange.Three of the Directors are Executive Board members. A A Luksic is Chairman of the Board. J-P Luksic wasappointed Deputy Chairman in April 2000. He is also Chief Executive Officer of Antofagasta Minerals S.A.,the Group’s mining division based in Chile. P J Adeane is Managing Director of Antofagasta plc. Theremaining Directors (C H Bailey and G S Menendez) are Non-Executive Directors. As explained below, theNon-Executive Directors are members of the Audit Committee and Remuneration Committee. The recognisedindependent senior Non-Executive Director is C H Bailey. While the Board does not consider G S Menendezto be independent, it nevertheless considers that, for the reasons noted below, adequate arrangements arein place to ensure a proper balance in Board composition and decision-making.As explained on page 75, the majority shareholder of the Company is Dolberg Finance Corporation, acompany controlled by the Chairman. In accordance with the requirements of the United Kingdom ListingAuthority, and in order to ensure that the Company operates independently of the majority shareholder andits associates, the Company entered into a Relationship Agreement on 22 January 1998. This requires, interalia, that transactions with the majority shareholder or transactions which reflect a conflict of interest forthe majority shareholder to be at arm’s length and approved by the Directors who are independent of themajority shareholders and its associates, who currently are P J Adeane and C H Bailey.The Board meets six to eight times a year and certain matters are reserved for its consideration. Theseinclude the review and approval of the Group’s interim and final results and dividend recommendation priorto announcement, the review of internal controls and ensuring that the Group has sufficient resources tocontinue in operational existence for the foreseeable future. In addition, the board of Antofagasta MineralsS.A. (mining) and the board of the Antofagasta Railway Company plc (railway and other transport services)meet monthly to consider strategic, operational and risk management issues in detail. There is substantialoverlap between membership of the Board of Antofagasta plc and these two divisional boards. Additionally,the Directors are supplied with monthly reports and forecasts to ensure that they remain properly briefedabout the performance and financial position of the Group throughout the year.ANTOFAGASTA PLC Annual Report 200029
Page 1 and 2: ANNUAL REPORT 2000
Page 3: Directors and AdvisorsDirectorsA A
Page 8: Chairman’s ReviewMININGMinera Los
Page 11 and 12: View of crushing facilitiesDome ove
Page 13: Harvesting cathodes from electrowin
Page 16 and 17: Chairman’s ReviewTRANSPORT ANDREA
Page 18 and 19: Chairman’s ReviewANTOFAGASTA PLC
Page 20 and 21: Financial ReviewBasis of Financial
Page 22 and 23: Financial ReviewIncome from Other F
Page 24 and 25: Financial ReviewCash Flows and Fina
Page 26 and 27: Production StatisticsFor the year e
Page 28 and 29: Report of the DirectorsThe Director
Page 32 and 33: Corporate GovernanceGiven its small
Page 34 and 35: Report on Remuneration and Related
Page 36 and 37: Auditors’ Report to the Members o
Page 38 and 39: Consolidated Profit and Loss Accoun
Page 40 and 41: Consolidated Statement of Total Rec
Page 42 and 43: Parent Company Balance SheetAt 31 D
Page 44 and 45: Notes to the Financial Statements1
Page 78 and 79: Five Year Summary - US DollarsConso
Page 80 and 81:
Notice of MeetingAntofagasta plcNot
Page 82:
Designed by RDA. Printed by Royle F
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