Corporate Governance
Your directors are committed to observing the highest standards of corporate governance. A description of the main features of the corporate governance procedures and guidelines adopted by the Board is set out below.

Board of Directors
The Pasminco Board is comprised of a majority of non-executive directors. Currently one member of the Board, the Chief Executive, is an executive director. The Chairman is an independent non-executive member of the Board. In appointing additional directors, the Board specifies the mix of qualifications, skills and experience it believes is desirable and selects individuals who will bring characteristics necessary to achieve this mix. To identify appropriate candidates, the assistance of external consultants is utilised. The Remuneration Committee undertakes the nomination function, and brings recommendations to the full Board. Apart from the statutory retirement age, no maximum age is prescribed for directors.

Responsibilities and Operation
The Board regularly reviews the operational and financial performance of each of the group activities, considers strategic plans and initiatives, reviews plans and budgets, reviews and approves significant capital investment proposals and establishes and monitors delegated authority levels for capital and financial commitments. It monitors and receives advice on areas of operational and financial risk and considers strategies for appropriate risk minimisation.

The Pasminco Board meets 11 times per year, but from time to time convenes outside the scheduled meetings to consider issues of special importance. At least two of the scheduled Board meetings are held at operating sites each year and undertaken in conjunction with detailed briefings from management on site-specific issues. Members of management, auditors, and representatives from the Company`s advisers attend Board and committee meetings as appropriate. Three committees of the Board - the Audit Committee, the Safety, Health and Environment Committee and the Remuneration Committee - have been established to consider these specific areas in detail and to report to the full Board. In addition the Board has established a Standing Committee to consider matters which arise between regular scheduled meetings of the full Board.

Independent Advice
Directors may obtain independent professional advice, at the entity`s expense, if appropriate. Prior to seeking advice directors are required to consult with the Chairman.

Audit Committee
The charter of the Audit Committee is to review significant financial information to ensure that it is complete, accurate, adequate and timely and to advise the Board accordingly. It is comprised only of non-executive directors.

To achieve this, the Audit Committee:

• reviews annual and half-yearly financial reports;
• reviews the terms of engagement and scope of activity of the external auditors;
• reviews the performance of the external and internal auditors and their audit fees.
• provides a direct line of communication between directors and both the internal and external auditors;
• reviews internal audit activities and reports in conjunction with senior management;
• monitors the effectiveness of internal control systems; and
• reviews the group`s commercial practices and policies.

In addition to the non-executive director members, Audit Committee meetings are attended by members of management and the external and internal auditors as appropriate. Current members of the Audit Committee are David Brydon (Chairman), Andrew Guy and Tony Daniels.

Safety, Health and Environment Committee
In particular, the Committee reviews with management:

• the safety, health and environment risks associated with Pasminco`s operation and products;
• the response to be adopted with respect to such risks;
• the implementation and audit of such responses; and
• the appropriate management structure in the light of the responses adopted.

The Board Safety, Health and Environment Committee members are David Macfarlane (Chairman), David Stewart and Geoff Allen. Members of management attend meetings as appropriate.

Remuneration Committee
The charter of the Remuneration Committee is to review with the Chief Executive the overall remuneration structure and policies for staff employed by Pasminco, and to review and approve the remuneration of the senior executive staff and appointments at senior level.

The committee seeks to ensure that the remuneration policy structure is equitable, market competitive and consistent to assure the recruitment and retention of staff with the capabilities, competence and experience necessary for the achievement of Pasminco`s business objectives.

With advice from appropriate external consultants, the committee reviews and establishes the remuneration and other employment conditions of the Chief Executive. The committee also obtains the advice of qualified external consultants on appropriate levels of remuneration for the non-executive directors. The committee acts as the nomination committee in developing recommendations for new Board appointments.

The Remuneration Committee members are Mark Rayner (Chairman), David Brydon and David Macfarlane. No fees are payable to directors in respect of Remuneration Committee duties.

Board Standing Committee
The charter of the Board Standing Committee is to deal with urgent issues arising between scheduled Board meetings which relate to matters the Board has previously approved in principle. All directors are members and a quorum is three, being any two non-executive directors and, wherever possible, the Managing Director (failing which any other director). Membership of the Standing Committee is not considered an extra service for the purposes of the Company`s article in the constitution dealing with directors` remuneration.

Risk Assessment and Management
The Board as a whole monitors and receives advice on areas of operational and financial risk and considers strategies to manage business risks. In turn the Audit Committee, the Safety, Health and Environment Committee and working committees of the Board established for specific projects, regularly report back on the particular risks associated with their respective areas of responsibility.

Year 2000 Readiness
Pasminco has maintained active Year 2000 project teams since mid 1997. The Board and Audit Committee reviews progress on Year 2000 readiness preparations at each scheduled meeting. More information on this issue is set out on page 15 of this report.

Ethical Standards
The economic entity has adopted a vision and values statement developed with the involvement of many employees throughout the group. The values which support the Group`s vision include, through an adopted code of conduct, a commitment to respect the law and act accordingly and to be fair, honest and consistent in dealings and behaviour. The code of conduct also deals with conflicts of interest, use of Company assets and information, honesty and accountability.

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- Operations at a Glance (173 Kb)
(excerpt from Annual Report 1999)
- Production 5-Year Summary (20 Kb)
(excerpt from Annual Report 1999)
- Performance 10-Year Summary (17 Kb)
(excerpt from Annual Report 1999)

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- Pasminco Annual Report 1999 (4 Mb)
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