Governance - Xstrata

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Restrictions on transfer of shares There are no restrictions on the transfer of ordinary shares in the Company other than: (i) the right of the Board to refuse to register the transfer of a certificated share that is not a fully paid share provided that the refusal does not prevent dealings in shares of that class in the Company from taking place on an open and proper basis. The Board may also refuse to register the transfer of a certificated share, unless the instrument of transfer (a) is lodged, duly stamped (if applicable) with the Company and (except where the shares are registered in the name of a recognised person and no certificate shall have been issued therefore is accompanied by the relevant share certificate and such other evidence of the right to transfer as the Board may require); (b) is in respect of one class of share only; and (c) is in favour of not more than four persons; (ii) pursuant to Xstrata’s share dealing code whereby the directors of the Company require, and employees may require, approval to deal in Xstrata’s shares; (iii) certain restrictions may from time to time be imposed by laws and regulations (for example, insider trading laws); and (iv) where a person whose shares represent at least a 0.25% interest in Xstrata’s shares has been served with a disclosure notice and has failed to provide the Company with information concerning interests in those shares, except as otherwise provided in the Articles. The Company is not aware of any arrangements between shareholders that may result in restrictions on the transfer of ordinary shares and for voting rights. The Board shall decline to register any transfer of the special voting share unless approved in accordance with a voting deed between the Company and the holder of the special voting share. Annual General Meeting The Annual General Meeting (AGM) of the Company will be held at Theater-Casino Zug, Artherstrasse 2-4, Zug, Switzerland on 4 May 2011 at 11 a.m. (Central European Summer Time). A live webcast will be provided of the AGM through Xstrata’s website www.xstrata.com. A telephone dial-in facility will also be provided on a listen-only basis. Further details of the dial-in facility and webcast will be available from Xstrata’s website www.xstrata.com at least one week in advance of the meeting. Full details about the AGM, including explanatory notes, are contained in the Notice of AGM which will be sent to shareholders at least 20 working days before the meeting. The Notice sets out the resolutions to be proposed at the AGM and an explanation of each resolution. All documents relating to the AGM are available on the Company’s website at www.xstrata.com. www.xstrata.com | 109 Electronic copies of the annual review and financial statements 2010 and other publications A copy of the 2010 Annual Report (which includes the Annual review and financial statements, Directors’ report, Corporate Governance report and Directors’ remuneration report), the Notice of the AGM, the 2010 Sustainability report (available in early April) and other corporate publications, reports, press releases and announcements are available on Xstrata’s website at www.xstrata.com. Responsibility statement Pursuant to Disclosure and Transparency Rule 4.1.12, the directors confirm to the best of their knowledge: (i) the financial statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and profit of the Company and the undertakings included in the consolidation taken as a whole; and (ii) the directors’ report including those sections incorporated therein by reference includes a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face. Disclosure of information to auditors Having made enquiries of fellow directors and of Xstrata’s auditors, each director confirms that so far as each director is aware, there is no relevant audit information of which Xstrata’s auditor is unaware and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that Xstrata’s auditor is aware of that information. Going concern The directors believe, after making inquiries that they consider to be appropriate, that the Company has adequate resources to continue in operational existence for the foreseeable future. For this reason they continue to adopt the going concern basis in preparing the financial statements. The directors have made this assessment after consideration of the Company’s budgeted cash flows and related assumptions, undrawn debt facilities, debt maturity review, analysis of debt covenants, and in accordance with Going Concern and Liquidity Risk: Guidance for Directors of UK Companies 2009 published by the Financial Reporting Council. By order of the Board Richard Elliston Company Secretary 16 March 2011 Overview Strategy Performance Governance Financials
110 | Governance Corporate Governance report The Combined Code The Board is fully committed to the principle of best practice in corporate governance. This report describes how Xstrata has applied the main principles of the Combined Code on Corporate Governance issued by the Financial Reporting Council (FRC) in June 2008 (the Code). During the year under review, the Company has complied with the provisions contained in Section 1 of the Code, except with regard to the Chairman who was not considered independent upon appointment and due to his membership and chairmanship of the Remuneration Committee. Willy Strothotte will step down as Chairman and Non-Executive director at the conclusion of the Annual General Meeting (AGM) on 4 May 2011. From 1 January 2011, the new UK Code on Corporate Governance will apply to the Company. The Combined Code and the UK Code on Corporate Governance are available at www.frc.org.uk. In addition to complying with corporate governance requirements in the UK, the Company follows the regulations of the SIX Swiss Exchange as well as Swiss securities laws due to its secondary listing in Switzerland. Disclosure and transparency rules (DTR) The information required by DTR 7.2.6 regarding share capital required under paragraph 13 of Schedule 7 to the Large and Medium-sized Companies and Group (Accounts and Reports) Regulations 2008 is included in the Directors’ report on pages 105 to 109. Board governance The directors The Board, chaired by Willy Strothotte, has 11 directors, comprising three executive directors and eight non-executive directors. The three executive directors are Mick Davis, Chief Executive, Trevor Reid, Chief Financial Officer, and Santiago Zaldumbide, Chief Executive Xstrata Zinc. David Rough, an independent, non-executive director, is the Deputy Chairman and Senior Independent Director. At the Annual General Meeting (AGM) on 5 May 2010, Dr. Con Fauconnier was elected a director of the Company and Paul Hazen retired from the Board. There were no other changes to the membership of the Board during the year. The non-executive directors possess a range of experience and are of sufficiently high calibre to bring independent judgement to bear on issues of strategy, performance and resources that are vital to the success of the Group. The Board is satisfied that it met and meets the requirements of the Code in maintaining an effective Board which is collectively responsible for the long-term success of the Company. Board balance and independence Of the eight non-executive directors, six are considered by the Board to be independent of management and free from any business or other relationship that could materially interfere with the exercise of their independent judgement, and two, Willy Strothotte and Ivan Glasenberg, are directors of Glencore International AG (Glencore). Willy Strothotte is Chairman and Ivan Glasenberg is Chief Executive Officer of Glencore. The Board has considered these associations and considers the industry expertise and experience of the Glencore nominated directors is beneficial to the Group. Matters reserved for the Board � The Board is responsible for the governance of the Group on behalf of shareholders within a framework of policies and controls that provide for effective risk assessment and management � The Board provides leadership and articulates the Company’s objectives and strategy to achieve those objectives � The Board sets standards of conduct, as documented in an approved Statement of Business Principles, which provide an ethical framework for all Xstrata businesses While the Board focuses on strategic issues, financial performance, risk management and critical business issues, it also has a formal schedule of matters specifically reserved to it for decision. These reserved matters, which are documented in a comprehensive regime of authorisation levels and prior approval requirements for key corporate decisions and actions, are updated as required by the Board. Such matters reserved to the Board include, but are not limited to, approval of budgets and business plans, major capital expenditure, major acquisitions and disposals, and other key commitments. Certain powers are delegated by the Board to the Executive Committee which is a committee of the Board of Xstrata (Schweiz) AG, the main operating subsidiary of Xstrata plc. This committee and a description of its powers are described on page 118. Powers of the directors Subject to Xstrata’s Memorandum and Articles of Association, UK legislation, and to any directions given by special resolution, the business of the Company is managed by the Board, which may exercise all the powers of the Company. The Articles of Association contain specific provisions concerning Xstrata’s power to borrow money and also provide the power to make purchases of any of its own shares. The directors have no existing authority to purchase Xstrata’s own shares. The directors have been authorised to allot and issue ordinary shares. These powers are exercised under authority of resolutions of the Company passed at its AGM held on 5 May 2010. Further details of the authorities the Company will be seeking at the next AGM to issue and allot ordinary shares of US$0.50 each are set out in the Notice of AGM. Board meetings Five scheduled Board meetings were held during the year and two additional meetings took place. Attendance by directors at Board meetings and at meetings of standing committees of the Board is shown below. In addition, the Chairman held a separate meeting with the non-executive directors without the executive directors being present and the non-executive directors held a separate meeting without the Chairman being present. All Board meetings are held in Switzerland. There are four formally constituted committees of the Board. Details of attendance at Board and committee meetings are given below. The role and work of these committees is described in detail on pages 115 to 118.
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Governance - Xstrata

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