Copper Goverance, Austalian Copper, Copper Mine WA

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The Board of Directors of Aditya Birla Minerals Limited (Birla Minerals) is responsible for the corporate governance of the Company. The Board guides and monitors the business and affairs of the Company on behalf of the shareholders by whom they are elected and to whom they are accountable.

In accordance with the Australian Stock Exchange (ASX) Corporate Governance Council's ("CGC") "Principles of Good Corporate Governance and Best Practice Recommendations" the Corporate Governance Statement must contain certain specific information and must disclose the extent to which the Company has followed the guidelines during the period. Where a recommendation has not been followed, that fact must be disclosed together with the reasons for the departure.

The Company's corporate governance practices were in place throughout the year and are compliant, unless otherwise stated, with the Corporate Governance Council's principles and recommendations, which are noted below.

Principle 1. Lay solid foundations for management and oversight
Principle 2. Structure the Board to add value
Principle 3. Promote ethical and responsible decision making
Principle 4. Safeguard integrity in financial reporting
Principle 5. Make timely and balanced disclosure
Principle 6. Respect the rights of shareholders
Principle 7. Recognise and manage risk
Principle 8. Remunerate fairly and responsibly

The Board has developed policies and practices consistent with the ASX Recommendations, with such adjustments as the Board believes are appropriate for the particular circumstances of the Company. Consistent with these policies, a summary of the corporate governance policies and practices adopted by Birla Minerals is set out below.

Role of the Board of Directors

The Board of Birla Minerals is responsible for setting the Company's strategic direction and providing effective governance over Birla Minerals'affairs in conjunction with the overall supervision of the Company's business with the view of maximising shareholder value. The Board's key responsibilities are to:

(a) chart the direction, strategies and financial objectives for Birla Minerals and monitor the implementation of those policies, strategies and financial objectives;
(b) monitor compliance with regulatory requirements, ethical standards and external commitments;
(c) based on nomination from Hindalco, the company’s major shareholder, appoint, evaluate the performance of, determine the remuneration of, plan for the succession of and, where appropriate, remove the Chief Executive Officer; and
(d) ensure that the Board continues to have the mix of skills and experience necessary to conduct Birla Minerals' activities, and that appropriate directors are selected and appointed as required.

The Board has adopted a Board Charter, which sets out in more detail the responsibilities of the Board. The Board Charter sets out the division of responsibility between the Board and management to assist those affected by decisions to better understand the respective accountabilities and contribution to Board and management.

In accordance with Birla Minerals’ Constitution, the Board delegates responsibility for the day–to–day management of Birla Minerals to the Chief Executive Officer (subject to any limits of such delegated authority as determined by the Board from time to time). Management as a whole is charged with reporting to the Board on the performance of the Company.

Board structure and composition

Under the Board Charter, the Board will comprise six members, of which at least three must be independent non–executive Directors. The Company acknowledges that this does not constituent a majority of independent non-executive directors but believes the Board is of a suitable composition and possesses the necessary skills to govern the Company. The Board will continue to assess the skill set amongst its constituents and make other appointments should the need arise. Details of each directors skill, expertise and background are contained within the directors report included with the company’s annual financial statements.

Independence, in this context, is defined to mean a non–executive Director who is free from any interest and any business or other relationship that could, or could reasonably be perceived to, materially interfere with the Director's ability to act in the best interests of Birla Minerals. The definition of independence in ASX Recommendation 2.1 is taken into account for this purpose. A Director cannot hold the position of both Chairman and Chief Executive Officer.

Birla Minerals' non–executive Directors may not hold office for a continuous period in excess of three years or past the third annual general meeting following their appointment, whichever is longer, without submitting for re–election. Directors are elected or re–elected, as the case may be, by shareholders in a general meeting. Directors may offer themselves for re–election.

A Director appointed by the Directors (e.g., to fill a casual vacancy) will hold office only until the conclusion of the next annual general meeting of Birla Minerals but is eligible for re–election at that meeting.

The Charter provides that the Board will meet at least six times a year. Under Birla Minerals' Constitution, voting requires a simple majority of the Board. The Chairman does not presently hold a casting vote, however if the Board were to later resolve to permit the Chairman to have a casting vote, this would need to be approved by a majority of Directors.

Board and management effectiveness

The Charter contemplates that the Board will annually assess the performance of the Board as a whole, and the individual Directors, as well as the effectiveness of the Board Charter. Responsibility for the overall direction and management of Birla Minerals, its corporate governance and the internal workings of Birla Minerals rests with the Board notwithstanding the delegation of certain functions to the Chief Executive Officer and management generally (such delegation effected at all times in accordance with Birla Minerals' Constitution and its corporate governance policies).

An evaluation procedure in relation to the Board, individual Directors, Board Committees and Company executives has been adopted by the Board and the evaluation procedure is expected to be completed in the first half of the 2010/2011 financial year. Furthermore, individual Directors’ performance is evaluated by reference to the Director's contribution to monitoring and assessing management performance in achieving strategies and budgets approved by the Board (among other things).

To ensure management, as well as Board effectiveness, the Board has direct responsibility for evaluating the performance of the Chief Executive Officer, while the outcomes of other executives' performance appraisals are reported to the Nomination and Remuneration Committee. A formal evaluation of the Chief Executive Officer was undertaken during the previous financial year. The evaluation was conducted by Chairman of the Board and involved the process of evaluating the performance of CEO against the KRAs, both financial and non financial, which were set in the beginning of the year.

Financial reporting, Internal Control and Risk Management

The Board has overall responsibility for Birla's systems of internal control. These systems are designed to ensure effective and efficient operations, including financial reporting and compliance with laws and regulations, with a view to managing the risk of failure to achieve business objectives. It must be recognised, however, that internal control systems can provide only reasonable and not absolute assurance against the risk of material loss.

The Board reviews the effectiveness of the internal control systems and risk management on an ongoing basis, and monitors risk through the Audit, Compliance and Risk Committee (see the Audit, Compliance and Risk Committee). The Board regularly receives information about the financial position and performance of Birla. For annual and half-yearly accounts released publicly, the Managing Director and Chief Executive Officer and the Chief Financial Officer sign-off to the Board:

the accuracy of the accounts and that they represent a true and fair view, in all material respects, of Birla's financial condition and operational results, and have been prepared in accordance with applicable accounting standards and
that the representations are based on a system of risk management and internal compliance and control relating to financial reporting which implements the policies adopted by the Board, and that those systems are operating efficiently and effectively in all material respects.

In addition, management has reported to the Board on the effectiveness of the company’s management of its material business risks. Aditya Birla Management Corporation Limited assists the Board and the Audit, Compliance and Risk Committee by providing a comprehensive internal audit services to the Company.

Committees of the Board of Directors

The Board has established two permanent Board committees to assist the Board in the performance of its functions:
(e) the Audit, Compliance and Risk Committee; and
(f) the Remuneration and Nomination Committee.

Each committee has a charter, which sets out the Committee's purpose and responsibilities. The Committees are described further below. The names of the members of the two committees are set out in the directors report.

Audit, Compliance and Risk Committee

The purpose of the Audit, Compliance and Risk Committee is to provide assistance to the Board in its review of:
(g) Birla Minerals' financial reporting, internal control structure and risk management systems;
(h) the internal and external audit functions; and
(i) Birla Minerals' compliance with legal and regulatory requirements in relation to the above.

The Audit, Compliance and Risk Committee has specific responsibilities in relation to Birla Minerals' financial reporting process; the assessment of accounting, financial and internal controls; the appointment of external auditor; the assessment of the external audit; the independence of the external auditor; and setting the scope of the external audit.

The Audit, Compliance and Risk Committee must comprise at least three non–executive Directors that have diverse, complementary backgrounds, with two independent non–executive Directors. The Chairman of the Audit, Compliance and Risk Committee must be an independent non–executive Director. The members of the Audit, Compliance and Risk Committee are: Mr Anghie (Chairman), Mr Krishnan, and Mr Prasanna.

Remuneration and Nomination Committee

The purpose of the Remuneration and Nomination Committee is to discharge the Board's responsibilities relating to the nomination and selection of Directors and the compensation of the Company's executives and Directors. The key responsibilities of the Remuneration and Nomination Committee are to:
(j) ensure the establishment and maintenance of a formal and transparent procedure for the selection and appointment of new Directors to the Board; and
(k) establish transparent and coherent remuneration policies and practices, which will enable Birla Minerals to attract, retain and motivate executives and Directors who will create value for shareholders and to fairly and responsibly reward executives.

The members of the Remuneration and Nomination Committee are: Dr Bhargava (Chairman), Mr Krishnan, and Mr Bhattacharya. The remuneration policy which sets out the terms and conditions for the chief executive officer and other senior executives is set out in the Remuneration Report included in the Directors Report.

Timely and balanced disclosure

Birla Minerals is committed to promoting investor confidence and ensuring that shareholders and the market have equal access to information and are provided with timely and balanced disclosure of all material matters concerning the Company. Additionally, Birla Minerals recognises its continuous disclosure obligations under the ASX Listing Rules and the Corporations Act. To assist with these matters, the Board has adopted a Continuous Disclosure and Shareholder Communication Policy. The Continuous Disclosure and Shareholder Communication Policy allocates roles to the Board and management in respect of identifying material information and co-ordinating disclosure of that information where required by the ASX Listing Rules. The Policy also identifies authorised company spokespersons and the processes Birla Minerals has adopted to communicate effectively with its shareholders. In addition to periodic reporting, Birla Minerals will ensure that all relevant information concerning the Company is placed on its website

Ethical and responsible decision–making

Code of Conduct

The Board has created a framework for managing the Company including internal controls, business risk management processes and appropriate ethical standards. The Board has adopted practices for maintaining confidence in the Company's integrity including promoting integrity, trust, fairness and honesty in the way employees and Directors conduct themselves and Birla Minerals' business, avoiding conflicts of interest and not misusing company resources. A formal Code of Conduct has been adopted for all employees and Directors of Birla Minerals.

Securities Trading Policy

A Securities Trading Policy has been adopted by the Board to set a standard of conduct, which demonstrates Birla Minerals' commitment to ensuring awareness of the insider trading laws, and that employees and Directors comply with those laws. The Securities Trading Policy imposes additional share trading restrictions on Directors, the Company Secretary, executives and employees involved in monthly financial accounting processes ("specified persons").

Under the Securities Trading Policy, specified persons are only permitted to buy and sell securities if they do not possess non–public price sensitive information and trading occurs outside of specified restricted periods. These periods are the periods commencing on the first day of the month before the end of the half–year or full year period and ending on the next business day after the announcement of the results for that period. In addition, before a specified person can deal in Birla Minerals’ securities they must obtain clearance from the appropriate officer, confirming that there is no reason why they cannot trade.