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 Securities Exchange (ASX) Corporate Governance Council’s (“CGC”) “Principles of Good Corporate Governance and Best Practice Recommendations” (2nd Edition) 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 (2nd Edition) , 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 and Parent Entity, 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, and other corporate governance policies, set 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
The Board is currently comprised of seven members, of which four are independent non–executive Directors. The Board will continue to assess the skill set amongst its constituents and make other appointments should the need arise. Details of each director’s 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. The present Chairman of the Company is not considered to be an independent director due to his position of Managing Director Of Hindalco Industries Limited, the Company’s Parent Entity. Notwithstanding this, all non-executive directors of the Company are, and were during the reporting period, independent in character and judgment.
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 and Shareholders.
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. An evaluation procedure took place during the year. The evaluation of the Board as a whole is facilitated through the use of a questionnaire required to be completed by each Board Member, the results of which were summarized to be discussed with the Chairman of the Board and tabled for discussion at a Board Meeting. Similarly each individual director was required to self assess his performance and to discuss the results with the Chairman. The same procedure is undertaken for the Audit, Compliance and Risk Committee and the Remuneration and Nomination Committee.
To ensure management, as well as Board effectiveness, the Board, through the Remuneration and Nomination Committee has direct responsibility for evaluating the performance of the Chief Executive Officer. The current Chief Executive Officer, Mr Neela Patnaik, was appointed to the position on 10 February 2015. A formal evaluation of the Chief Executive Officer will be undertaken subsequent to his first year in office. The process will involve the evaluation of the CEO against the KRA’s both financial and non financial set at 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:
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 as and when required.
Committees of the Board of Directors
The Board has established two permanent Board committees to assist the Board in the performance of its functions:
(a) the Audit, Compliance and Risk Committee; and
(b) the Remuneration and Nomination Committee.
In addition to the above, the Board has also established the following temporary Committees with specific focus on certain areas:
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 permanent committees are set out in the directors’ report and also included below. Other Committee members are set out under the respective Committees below.
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:
(a) Birla Minerals' financial reporting, internal control structure and risk management systems;
(b) the internal and external audit functions; and
(c) 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. Provision of Non-Audit Services and Selection Policy.pdf
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:
(a) ensure the establishment and maintenance of a formal and transparent procedure for the selection and appointment of new Directors to the Board; and
(b) 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 Remuneration and Nomination Committee must comprise at least three non–executive Directors, two of which must be independent non–executive Directors. The Chairman of the Remuneration and Nomination Committee must be an independent non–executive Director.
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.
Investors Relations Committee
The purpose of the Investor Relations Committee is to:
(a) Monitor and assist management with the strategic direction and overall status of the Company's investor relations and public relations programs and associated activities;
(b) Conduct regular informal meetings with senior management of the Company regarding investor relations and public relations matters;
(c) Provide oversight and guidance regarding all material investor relations and public relations issues; and
(d) Perform such other functions as expressly delegated to it from time to time by the Board relating to investor relations and public relations.
The Committee shall report to the Board on its activities and any recommendations falling within this purpose.
The members of the Investor Relations Committee are: Mr Anghie (Chairman), Mr Patnaik, Mr Peter Torre and Mr Shanti Dugar.
The purpose of the Committee is to:
(a) Periodically Monitor and evaluate compliance and provide the management strategic direction to the Company's Operations environment related programs and associated activities;
(b) Conduct periodic meetings with senior management of the Company regarding environment management related activities;
(c) Perform such other functions as may have been expressly delegated to by the Board over matters relating to environment management.
(d) The Committee shall periodically report to the Board on its activities and the status of compliance.
(e) The Committee was initially established with tenure of one year, however the Board considers that the matters currently under consideration by the Committee should have continued focus and have therefore extended the Committee’s tenure until resolved otherwise.
The Committee will comprise of at least 2 Directors and currently comprises, Mr. Krishnan (Chairman) Mr. Prasanna, Mr. Krishnan, Mr. Laddha, Mr. Patnaik and Mr. Bhargava.
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 recognizes 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–coordinating disclosure of that information where required by the ASX Listing Rules.
The Policy also identifies authorized 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.
The Company employs a broad mix of individuals reflecting its philosophy of hiring the best candidate for all positions at all levels irrespective of race, religion or gender.
The Company had a formal diversity policy in place during the year.
The objective of the policy is for the Company to embrace the diversity of skills, ideas and experiences of an individual and recognise that a workforce is made up of people with differences in age, gender, sexual orientation, disability, religion or national origin or social origin contributes to Aditya Birla Minerals Limited’s success and organizational strength. It ensures all employees are treated with fairness and respect.
Aditya Birla Minerals Limited is committed to embedding a corporate culture that embraces diversity through;
Aditya Birla Minerals Limited will include on its website (www.adityabirlaminerals.com.au) full details of its corporate governance regime.
There are currently 19 women working within the organisation and there are no women directors.
During the year, a significant event occurred at the Company’s Nifty operations resulting in approximately 109 employees taking voluntary redundancies. . The conclusion of matters in respect to this event took precedence over the establishment of the measurable objectives of the diversity policy, however the Company was cognisant of the policy and its objectives and the application of those occurred throughout all key decisions of a human resource nature.
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.
|•||First Quarter reporting under Chapter 5 of the ASX Listing Rules for the quarter ended 30 June 2015||:||End July 2015|
|•||Second Quarter reporting under Chapter 5 of the ASX Listing Rules for the quarter ended 30 September 2015||:||End October 2015|
|•||Financial reporting for the Half Year ended 30 September 2015||:||End November 2015|
|•||Third Quarter reporting under Chapter 5 of the ASX Listing Rules for the quarter ended 31 December 2015||:||End January 2016|
|•||Fourth Quarter reporting under Chapter 5 of the ASX Listing Rules for the quarter ended 31 March 2016||:||End April 2016|
|•||Financial reporting for the full year ended 31 March 2016||:||End May 2016|
|•||Annual General Meeting for the year ended 31 March 2016||:||End August 2016|
Dividend distribution history
$0.10 cents per share unfranked for FY 2008
$0.09 cents per share fully franked for FY 2011
$0.05 cents per share unfranked for FY 2012
Company’s contact details- Contact details for enquiries from security holders, analysts or the media
Level 3, Septimus Roe Square
256 Adelaide Terrace
Perth WA 6000
Phone: +61 8 9366 8800
Fax:+61 8 9366 8805
Contact details of Securities Registry
Link Market Services Limited
Level 4 Central Park, 152 St Georges Terrace
PERTH WA 6000
Phone: 1300 554 474
Fax: +61 8 9366 8805
Links to Share Registry