A review of how international companies are evidencing ... · Ch na Europe Ind a South Afr ca Rep. of Korea US International Summary Companies reviewed by sector (%) Basic materials

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A review of how international companies are evidencing their approach to integrated reporting

Integrated reporting challenges companies to rethink their business model and how they do business, what resources and relationships they are dependent on for future success and how performance in one area impacts that in another.

Integrated Reporting therefore reflects, and supports, “integrated thinking” – the ability of those within the organisation, in particular management and those charged with governance, to understand and base their decisions on the interconnections between the factors – economic, environmental, social and governance – that contribute to success over time.

For some, where sustainability is already core to the company’s approach to business, integrated reporting presents the opportunity to demonstrate leadership and differentiate from competitors. For others, the simple fact of bringing together financial and non-financial information in a new way will highlight

opportunities to innovate, ways to save costs and enable more effective collaboration across the business – certainly this is our experience working with companies on The Prince’s Accounting for Sustainability Project.

Black Sun’s research highlights examples of how companies from around the world have sought to develop integrated thinking and reflect that thinking in their Annual Reports – from understanding the changing business context and leadership response to setting their strategy and objectives, identifying risks and opportunities and assessing performance. This provides important insights for the development of the International Integrated Reporting Framework as well as useful lessons for those companies starting on the journey.

Jessica Fries, Director – International Integrated Reporting Committee and The Prince’s Accounting for Sustainability Project

Foreword

‘The Integrated Journey’ Focuses on individual companies from around the globe currently recognised for their integrated reporting progress

’

One step at a time

The journey towards integrated reporting:

We recognise that successful integrated reporting is a challenging and lengthy journey for many companies. Each year, there is a need to adjust reporting in response to feedback from stakeholders. Therefore, where a company is on their journey is often a refl ection of the progress which has been made from moving beyond being compliance driven to demonstrating sustainability as a corporate imperative.

The following steps are usually taken along the way:

STAGE 6 INTEGRATION

In this stage, the company’s sustainability has become integral part of the business strategy, culture and operations. Companies are also beginning to demonstrate the links and implications between fi nancial and non-fi nancial information and performance.

STAGE 5 PROGRESSION

In this stage, companies are demonstrating not only that they are managing sustainability in the same way as other business issues, but that there is a strategic response to material issues. These issues clearly include links to action plans, targets and measurement against the stated objectives.

STAGE 4 ACTION

In this stage, companies demonstrate a clear understanding of the relevance of sustainability issues to the business and are beginning to report the importance by starting to manage and report on sustainability in the same way as they do other business issues.

STAGE 3 PREPARATION

In this stage, companies have begun to focus on the importance of sustainability issues to their business and have started to address this by focusing on the development of, and reporting on, policies, processes and measurement. However, this remains to appear quite disconnected from the central business issues.

STAGE 2 CONTEMPLATION

In this stage, companies are realising the growing importance of sustainability issues from a top level however, there is little evidence of these issues being addressed through their reporting.

STAGE 1 PRECONTEMPLATION

In this stage, companies demonstrate little or no understanding of sustainability issues and provide no evidence through their reporting.1

2

3

4

5

6

4 The integrated journey www.blacksunplc.com © Black Sun Plc 2011 5

‘Towards Global Sustainability’ Examines integrated reporting on a country-by-country basis and highlights different national and international approaches.

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A country-by-country review of the international integrated reporting landscape

Average length of report by country (pages)

0

50

100

150

200

250

300

350

Bra

zil

Chi

na

Eur

ope

India

Sou

th A

fric

a

Rep

. of K

orea

US

International Summary

Companies reviewed by sector (%)

Basic materialsConsumer goodsConsumer servicesFinancialsHealthcareIndustrialsOil & gasTechnologyTelecommunicationsUtilitiesConglomerate

1182

2663

139

1076

This research study aims to provide an overview of integrated reporting practices and trends and an assessment of the current state of integrated reporting across seven key G20 markets and countries, including:

Brazil

China

Europe Belgium Finland France Germany Italy Netherlands Norway Spain Switzerland UK

India

South Africa

Republic of Korea

United States

Average annual report length

Full sample 203ppLongest average annual report

South Africa 336ppShortest average annual report

United States 106pp

Average length of narrative

Full sample 113ppLongest average narrative

South Africa 185ppShortest average narrative

United States 60pp

Average length of fi nancials

Full sample 91ppLongest average fi nancials

South Africa 151ppShortest average fi nancials

Brazil 30pp

150

249

239

206

336

135

106

101

4 Towards Global Sustainability A country by country review of the international integrated reporting landscape www.blacksunplc.com © Black Sun Plc 2011 5

South Africa ¦ Looked at purely from an integrated reporting perspective, South African reports could credibly claim to be leading the way.

Although many good examples of integrated reporting can be seen for individual companies in other nations, South Africa as a country, stood on its own in our sample group as the most advanced in terms of integrated reporting. The majority of the reports reviewed have made some progress on the integrated reporting journey. This lead is likely driven by the legislative requirements of the King Report on Governance 2009 (King III) which from March 2010 requires listed companies to issue an integrated report. This report is defi ned as: ‘a holistic and integrated representation of the company’s performance in terms of both its fi nance and sustainability’.

South Africa’s main exports are gold, diamonds, metals and minerals and this representation is refl ected in our sample group, with most companies operating in the basic materials sector. The increasing regulation in the industry around issues such as local economic development, environmental management and climate change strategies has also been a driver of integrating sustainability into corporate strategies.

Overall, these companies represent the strongest group at attempting to integrate fi nancial and non-fi nancial information throughout the report. Most of the reports clearly identify relevant issues and the potential impact on the business, although there are only a few that explicitly disclose the materiality process. The strength of this integration also acts as a weakness. Annual reports need to communicate as well as comply and the ‘one report’ approach to meet all audience needs means that South African reports,

on average, are the longest at 336pp. They also have the longest average narrative at 185pp, sometimes making them quite overwhelming to read. This is often not helped by the approach to the creative, which is usually quite conservative, focused on demonstrating the quality of the assets or the business and not particularly inspirational or engaging.

Key highlights• Most reports outline a clear

vision along with a commitment to deliver value to their wider stakeholders.

• Majority of reports present very good market reviews and opportunities, using supporting external data which helps to put the strategy into context as well as enabling the company to provide clear objectives and targets for the future.

• Most companies report strategically on the business with many setting strategic agendas which are a mix of fi nancial and non-fi nancial elements and defi ne how sustainability is core to delivering growth drivers.

• In some cases sustainability is built into the investment case for business. A few companies use the explanation of their business models to do this.

• Many report on their engagement with stakeholders, identifying key material issues and relationships.

• Risks and opportunities seem to be more integrated into reporting overall rather than a standalone section – a few are outlining strategic risks directly related to stakeholder interests.

• All reports contain very detailed operating reviews.

Country statistics

Key statistics100% state a clear overall vision of the company

62% make a commitment to wider stakeholders

63% link non-fi nancial issues to overall group strategy, objectives or vision

63% mention business model, 40% of those refer to non-fi nancial elements

75% identify non-fi nancial risks factors, 62% disclose impacts and mitigation activities

62% have a board level sustainability committee

87% provide non-fi nancial performance data

Average report length336 pages

Average length of narrative185 pages

Average length of fi nancials151 pages

Number of ‘integrated’ reports6 out of 8 reports

Europe ¦ Well developed guidelines and regulation drives a practical, targeted and measured approach to reporting.

Europe as a sample group was certainly not homogeneous. No country dominated the sample group with representation from ten different countries in total. Three quarters of the sample group was made up from the UK, France, Germany and Switzerland. Sectors that dominate include: consumer goods, fi nancial or oil & gas and a few broad trends transcend geography and sector: simple businesses usually have simple reports, complex organisations usually have complex reports.

Other trends are noticeable too. Consumer facing businesses often pay more attention to communicating through their reports, giving more focus on products and brands in ‘telling the story’ and seem to be more responsive to meeting the growing social and environmental concerns of their customers, than business-to-business organisations.

Financial services companies focus more on the numbers than the narrative, which is clearly driven by their extensive disclosure requirements. In addition, there is little evidence of integration of non-fi nancial issues into their core businesses.

Overall European reports, tend to be more developed and consistent in the subject matter, covering market context, strategy, performance, governance, risks and sustainability issues. However, reporting on non-fi nancial activities and performance, for the most part, the approach seems to be split between two categories: those where

non-fi nancial issues are integral to the business and strategy and reported on as such and; those where reporting on non-fi nancial issues is dominated by a conservative and almost ‘box ticking’ approach driven largely by quite established mandatory and voluntary frameworks.

An emerging group of companies seem to be moving to a place where non-fi nancial issues are presented as integral to business strategy and reported on as such. In addition, there are also examples of innovative approaches where companies are defi ning their role in meeting some of the global sustainability challenges, although few demonstrate how this will be achieved with their business strategy.

Key highlights of reporting: • Structured approach to reporting

with the majority of the companies covering key elements of strategy, risk, performance and governance.

• The strategic discussions are quite developed with many companies providing clear details of their objectives and priorities.

• Majority of reports have detailed strategic information included in the report but only a select few of the reports effectively discussed the integration of non-fi nancial issues within the strategy.

• Most of the companies in the sample group discuss non-fi nancial issues and the policies in place to manage these issues although; the approaches to reporting on these varies across countries and sectors.

• Prominence given to Board and governance processes.

Key statistics46% link non-fi nancial issues to overall group strategy objectives or vision

80% outline long-term business objectives

28% of reports convey non-fi nancial issues are integral to the group strategy

38% of reports non-fi nancial discussion complements the group strategy

82% report on non-fi nancial performance data

55% make a commitment to wider stakeholder groups in the overall vision whilst 20% make a commitment to shareholders only

Average report length239 pages

Average length of narrative138 pages

Average length of fi nancials101 pages

Number of ‘integrated’ reports2 out of 40 reports

8 Towards Global Sustainability A country by country review of the international integrated reporting landscape www.blacksunplc.com © Black Sun Plc 2011 9

Anglo American2009 Annual ReportBasic MaterialsUK

06 Anglo American plc Annual Report 2009

About Anglo American Chairman’s statement

Delivering on our commitments

We are committed to key projects to maximise our long term returns.

Sir John Parker

Chairman, appointed August 2009

Career in brief

1964 Joins the ship design team

at Harland & Wolff as a naval

architect and engineer

1978 Joins the board of British

Shipbuilders Corporation

1983 Returns to Harland & Wolff as

chairman and chief executive,

leading a transfer from the

public to the private sector

1986 Joins British Coal Corporation

as a non-executive director

1993 Joins Babcock International

as CEO (becoming chairman

the following year)

1997 Becomes a non-executive director

of British Gas, which leads to him

becoming chairman of the Lattice

Group when it demerges from

BG Group

2002 Appointed chairman of National

Grid Transco when the Lattice

Group and National Grid merge.

Becomes chairman of RMC Group,

Aggregates and Cement. He is

also knighted for services to

the defence and shipbuilding

industries

2004 Appointed Chair of the Court

of the Bank of England

2005 Appointed chairman of P&O,

leading the sale to Dubai’s

DP World

2009 Joins Anglo American as chairman

Anglo American plc Annual Report 2009 07

Ab

out A

ng

lo A

meric

an

A world class combination of resources and people

A clear strategy for delivering value

Safety

Sustainable development Outlook

Refreshing the Board

Dividend

Sir John Parker

Chairman

Anglo Amer


Operating and financial review Key performance indicators (KPIs)

Anglo American uses KPIs to help measure its performance. The KPIs are aligned to the three key strategic aims of the Group

Strategic aims Strategic focus

Investment of choice

Partner of choice

Employer of choice


Op

era

ting

and

financia

l revie

w

KPI Description Results and target (if applicable)


Operating and financial review Performance against KPIscontinued

Employer of choice

Safety

People

Organisational development

09

08

07

06

05

6.8

4.9

5.4

4.3

3.9

Anglo American voluntary labour turnover%

0 1 74 5 632

Year

Lost time injury frequency rate (LTIFR) and fatal injuryfrequency rate (FIFR)*

1.2

1.0

0.8

0.6

0.4

0.2

0

LTIFR

LTIFR

FIFR

FIFR

*See KPI table on page 17 for definitions of LTIFR and FIFR

Note: The basis for reporting LTIs became moreinclusive in 2003, when Anglo American beganto include restricted work cases as LTIs. Thiswas fully implemented by 2006.

0.03

0.025

0.02

0.015

0.01

0.005

0

05Year 0706 08 09

09

08

07

06

05

19.012.0

13.012.5

15.214.2

15.310.6

17.012.0

Anglo American diversity% Female

0 5 201510

Year

% Female managers % Females


Op

era

ting

and

financia

l revie

w

Talent management

Reward and performance

Transformation

Health

Occupational health

HIV/AIDS

Background:Anglo American is one of the world’s largest mining companies focusing on platinum group metals, diamonds, nickel, iron ore, metallurgical and thermal coal. They operate across Africa, Europe, South and North America, Australia and Asia.

The aim of the Company is to be the leading mining company through becoming the industry’s employer, partner and investor of choice. To achieve this, they have implemented a sound strategy, a commitment to sustainable development and good governance.

The Annual Report presents the key sustainability issues and reports on them as part of their overall strategy and a separate Sustainability Report is produced which reviews the issues in greater detail.

Content Review:Given the sector that Anglo American competes in, operating in a socially and environmentally responsible way is fundamental to their ‘licence to operate’. This commitment to excellence in good times and bad is clearly set out in the Chairman’s statement and discusses how the Company continues to integrate sustainable development into business processes and gives examples of progress over the year. This message is then clearly reinforced in the CEO’s statement with more detail around key initiatives such as safety, sustainable development and health.

The strategic discussion in the Report is focused around the three strategic aims of the Company – investment of choice, partner of choice and employer of choice. These aims are directly linked to key performance indicators which chart progress and set targets for the future. Partner of choice encompasses sustainable development with measures for elements such as energy, water, CO2 emissions; and employer of choice encompasses people and safety with relevant measures.

There is a detailed review of group performance against each of the strategic aims which clearly addresses the overall objective of each of the performance measures, progress against it and targets for the future. This demonstrates to the reader that all of these issues are of strategic importance to the business and provide a holistic overview of the Company and its performance. There is no separate sustainable development section as all the key issues are reported on as part of the strategic review. This strategic discussion is then followed by a fi nancial review and operating review by product group.

Non-fi nancial risks are clearly identifi ed with some details of mitigation activities and there is also a Board level sustainable development committee.

Summary:The Anglo American Report gives a very clear commitment and review to their strategic approach to non-fi nancial issues and sustainable development and comes across as an integral part of their business strategy as well as day-to-day business processes. A separate Sustainability Report is also produced which reviews the issues in greater detail.

A strategy for unlocking value

Annual Report 2009

A strategy for unlocking value


Operating and financial review Performance against KPIcontinued

EEm lployer fof h ichoice

Safety

Lost time injury frequencyrate (LTIFR) and fatal injuryfrequency rate (FIFR)*

1.2

1.0

LTIFR FIFR

0.03

0.025


Operating and financial review Performance against KPIscontinued

Partner of choice

Sustainable development

Energy

Energy consumption

Energy efficiency

Climate change

Carbon dioxide emissions

Carbon abatement

09

08

07

06

05 20396

197107

92105

2103

Energy consumptionGJ (million)

0 50 300200 250150100

Year

105 0

Group excluding divested businessesDivested businesses

09

08

07

06

05 15.916.5

16.320.1

5.119.4

0.619.1

CO2e emissionsTonnes (million)

0 6 3624 301812

Year

019.0



Op

era

ting

and

financia

l revie

w

Low carbon technology

Adaptation

Exposure to climate policy

Water

Water consumption

09

08

07

06

05 513116

456126

123128

2123

Water consumptionMillion m3

0 100 700400 500 600300200

Year

0125


MAINTENANCE5

10 The integrated journey www.blacksunplc.com © Black Sun Plc 2011 11

‘Th I t t d JJ

Examples of international companies taking steps towards integrated reporting

International Integrated Reporting research

With integration rising on the corporate reporting agenda and with the recent formation of the International Integrated Reporting Committee (IIRC), Black Sun felt the time was right to gain greater insight into global integrated reporting trends and developments.

This publication is part of our International Integrated Reporting research suite.

‘Integrated Thinking in Reporting’ Showcases examples of reporting approaches used by companies to demonstrate integrated reporting.

Contents

Foreword 1

Introduction 2

Research focus 3

Framework for integrated reporting 4

Business description 6

Overall vision 13

Leadership commitment 20

Strategy and objectives 27

Performance 34

Risk and opportunities 41

Governance 48

Future outlook 55

About Black Sun

Black Sun is one of Europe’s leading specialist corporate reporting consultancies. We help large organisations build greater trust and confidence with investors and other corporate stakeholders through Corporate Reporting.

Corporate Reporting is the critical component by which companies communicate their activity, performance and future prospects to their shareholders.

In these uncertain times, it has never been more challenging or vital for companies to rebuild trust and protect the value of their business. For many companies, corporate reports are the best opportunity to communicate brand, culture, values and their investment story.

At Black Sun we are firm believers in the value of corporate reporting to both companies and investors. As strategic thinkers, the focus of our approach is our unique ability to combine knowledge of current issues with an understanding of our clients’ businesses, to develop powerful communications solutions. Our reputation has been established through a unique combination of in-depth market analysis, ambitious creative thinking and over 20 years’ experience of working with some of the biggest and most respected companies in the UK and international markets.

For more information on Black Sun’s International Integrated Reporting Research 2011 and to order any of these three publications, please contact Sallie Pilot at [email protected].

1www.blacksunplc.com © Black Sun Plc 2011

Research focus

In this research document, we showcase recent examples of integrated reporting. Based around our integrated reporting framework, these examples demonstrate how certain companies have combined financial, social, environmental and governance information.

With these reporting ‘snapshots’, we want to show that the many hurdles involved in integrated reporting can be overcome. This is because we know that for those companies yet to take their first steps in integrated reporting, the process can seem daunting. Companies must realise that an integrated report cannot be achieved without a fundamental rethink of business systems and activities; and closer collaboration is also needed between different teams and units within an organisation.

In recognition of these challenges, we have created this suite of research documents to shed light on key issues and stimulate debate. This document in particular includes a wide variety of examples. By analysing the progress already made in this relatively new field, the documents are intended to support senior managers as they embark on their integrated reporting journey. They aim to help companies seize the opportunities and maximise the benefits that integrated reporting presents. And finally they aim to show that, by embedding sustainability within their business model, strategy and management processes, companies can begin to rebuild stakeholder trust and confidence in the corporate world.

Introduction

The debate around integrated reporting is gaining urgency and momentum. With increasing demands for transparency and accountability in Annual Reports, issues traditionally referred to as ‘non-financial’ are now seen as integral to overall business responsibility and performance.

Integrated reporting is now firmly on the international corporate reporting agenda. At the World Economic Forum in Davos, global economic leaders discussed the benefits of integration in corporate reports. In addition, the Prince of Wales’ ‘Accounting for Sustainability Project’ and the Global Reporting Initiative (GRI) announced the formation of the International Integrated Reporting Committee (IIRC), whose remit is, “to create a globally accepted framework for accounting for sustainability”.

Throughout the year there were also growing signs that stakeholders are no longer content for sustainable development reports to simply be ‘bolted on’ to Annual Reports. Instead, they want to see clear and compelling evidence that non-financial issues are central to overall business strategy and activities. In short, they want to see reporting that reflects an integration of business and sustainability in a company’s everyday operations.

At Black Sun, we believe that by taking a more active approach to these issues, companies can achieve numerous business benefits. These include improved management of reputational risk, opportunities to re-evaluate and cut costs, plus improved stakeholder engagement and relationships. We also think that opportunities seized through engaging directly with sustainability, can lead to creating competitive advantage.

Integrated thinking in reporting

2 3Integrated thinking in reporting www.blacksunplc.com © Black Sun Plc 2011

Framework for integrated reporting

It is a challenge to advance reporting practice from disparate CR and sustainability related information to a point where this information is not only integrated into but integral to external reporting. To help with our analysis we have identified a number of content areas within an Annual Report where the information is of practical and relevant use to report users. These

content areas should not be treated individually but must be integrated into each element of the report, linking strategy and objectives, remuneration and corporate governance with risk, opportunities and performance to demonstrate how non-financial – environmental, social and governance – information connects to business value in the short, medium and long-term.

Business description Setting the scene?

The report should offer the reader an overview of the business activities and performance and should demonstrate a clear understanding of the relevance of the material issues which have, or potentially could have, an impact on the business.

Performance Material or immaterial?

There ought to be performance indicators for monitoring progress against stated objectives and a balance between financial and non-financial information in the Annual Report, demonstrating that each issue reported on is of material significance to the company and the business is being managed for the long-term.

Overall vision Wider stakeholder commitment?

By referencing wider stakeholder groups as opposed to simply shareholders, the company is able to reconcile its business purpose of creating value for shareholders whilst also taking into account its relationship with other stakeholder groups.

Risks & opportunities Managing impacts & relationships?

Identification of financial and non-financial risk factors demonstrates that management have taken into account the potential impacts of the business activities on the wider world.

Strategy & objectives Integral to the business model?

Sustainability is undisputed as an essential component of every successful business strategy. It is important for companies to demonstrate that sustainability is an important business issue and they need to demonstrate they are managing it in the same way as other business issues; with a strategic response to material issues connected to objectives and action plans.

Future outlook Long-term sustainability?

The provision of outlook information within the Annual Report ensures that the document includes disclosure of forward-looking information, helping the reader to assess the current and future performance and prospects of the business.

Leadership commitment Communicating from the top?

If there is a commitment to sustainability, the business case for operating in a responsible way should be clearly articulated at a strategic level and communicated through the management statements.

Governance Embedded in mainstream management processes?

The central management processes in place should demonstrate that sustainability objectives sit alongside financial objectives at a strategic level and receive the same rigorous process, monitoring and performance evaluation.

4 5Integrated thinking in reporting www.blacksunplc.com © Black Sun Plc 2011

Business description – setting the scene?

focused and energised

annual review and summarised fi nancial information 2010

Sasol2010 Annual Review

Oil & GasSouth Africa

pp IFC-1 and pp 4-5

Sasol introduce their report by providing a brief outline of what information is contained within the report as well as sign-posting the reader to other related publications.

To provide information of the business actions, processes and outcomes, Sasol demonstrate their integrated business model. Issues which arise as a result of the business activities, including greenhouse gas emissions, water, and new energy, are discussed in this spread showing that these issues are regarded as central to the Company.

Our business

Our structure 2

Our global presence 3

Our integrated business model 4

Our products 6

Our key relationships 8

Our vital statistics 9

Our strategic direction 10

Our growth opportunities worldwide 14

Principal integrated risks 16

Our board of directors 18

Our group executive committee 20

Business reviews

Chairman’s statement 22

Chief executive’s report 26

Operating reviews

Sasol Mining 30

Sasol Gas 33

Sasol Synfuels 36

Sasol Oil 39

Sasol Synfuels International (SSI) 42

Sasol Petroleum International (SPI) 45

Sasol Polymers 48

Sasol Solvents 51

Sasol Olefi ns & Surfactants 54

Sasol Nitro, Sasol Wax, Sasol Infrachem,

ChemCity and Merisol 57

Sasol Technology 63

Sasol New Energy 66

Sasol Financing 69

Sasol group services

Human resources 71

Safety, health and environment (SH&E) 75

Legal compliance 82

Corporate affairs 84

Sasol Inzalo Foundation 85

Information management 86

Supply chain management 86

Summarised fi nancial information

Salient features 88

Statement of fi nancial position 90

Income statement 91

Contact information ibc

The adoption of the third King Code of Governance Principles (King III) in 2010, and its specifi c requirements for “integrated reporting”, is refl ected in the changes made to the narrative structure of this year’s annual review. We believe that a more holistic articulation of a business – one that does not artifi cially split fi nancial and “non-fi nancial” disclosure – will provide a more complete analysis to satisfy the information needs of the broad range of stakeholders that use the annual review. A core part of this approach is the integration of social and environmental performance issues within our operating reviews. This complements our separate sustainable development report on www.sasolsdr.com. In line with this approach, the sustainable development-related issues managed by functional departments within Sasol are reported in a newly-introduced review for Sasol Group Services, and not in a summarised sustainable development chapter as in the past.

Through our commitment to integrated sustainability reporting,

Sasol aims to provide stakeholders with a balanced view of the

performance of our business through a suite of reporting

publications, indicated below.

The 2010 Sasol annual report consists of two books:

AR Annual review

Including business overview, chairman’s statement, chief executive’s report and operating reviews.

FIN Annual fi nancial statements

Including a full analysis of the group’s results by the chief fi nancial offi cer.

Other related publications:

20F

Form 20-F

Our annual report under the Securities Exchange Act of 1934 on Form 20-F was fi led with the United States Securities and Exchange Commission on 28 September 2010. The Form 20-F is available on our website(www.sasol.com).

SD 0Sustainable development report

This separate report provides more detail of particular interest to certain of our stakeholder groups, such as sustainable development analysts and professionals. In the interests of shortening the printed report and making for easier and more focused reading, we have included additional detail on our website (www.sasolsdr.com).

These reports provide a complete view of the group’s strategy, businesses, performance against objectives, and prospects.

www.sasol.com

annual review 2010 1

Sasol has grown to become the country’s leading fuel provider. Today we are an international player in the energy and chemicals sectors, and a preferred technology partner. Sasol’s liquid fuelsand chemicals products are used in almost every sphere of life.

Sasol is also a major contributor to the development of people and the improvement of socioeconomic conditions in the countries in which we operate. In the last ten years, we have made signifi cant strides in our commitment to environmental sustainability, premised on our innovation and technology leadership.

As we emerge from the economic turmoil of the last 18 months, we are focused and energised. We have scrutinised our assets and interrogated our plans for the future. We are leaner and more fl exible, and we understand what we have to do to transform and grow, profi tably and sustainably.

We have the people and the technology, the experience and the innovative spirit to reach new frontiers, to meet the challenges of the future, and to grow our business signifi cantly beyond where it is today.

For 60 years, Sasol has demonstrated its innovative spirit in the energy and chemicals sectors in South Africa.

annual review 2010ii 1

Sasol has grown to become the country’s leading fuel provider. TodaTT y we ary e an international plp ayer in y the energy and gy chemicals rsectorssectors, and a and a prefprefp erred terred technoloechnology pargy pargy p tnertner. Sasol’Sasol s liquis liquiq d fuelsd fuelsand chemicals products are used in almost every sphere of life.ff

Sasol is also a major contributor to the development of people and the improvement of socioeconomic conditions in the countries in which we operate. In the last ten years,we have made significant strides in our commitment to environmental sustainability, yy premised on our innovationand technology leadership.

As we emerge from the economic turmoil of the last 18 months,we are focused and energised.We have scrutinised our assets and interrogated our plans for the future.We are leaner and more fl efl xible, and we understand what we have to do totransform and grow, w profitably and sustainably.l

We have the people and the technology, y the experience and the innovative spirit to reach new frontiers, to meet,the challenges of the future, and to grow our business significantly beyond where it is today.

4

As an integrated energy and chemicals company Sasol aims to meet stakeholders’ expectations

our integrated business model

Exploration and productionSasol obtains its raw materials through its coal-mining activities, oil and gas exploration, and purchases from the open market. Some raw materials are sold directly to external markets.

Through Sasol Petroleum

International (SPI) and Sasol Gas,

we obtain natural gas through

the cross-border pipeline linking

the Pande and Temane fi elds in

Mozambique to our Secunda

complex. We use this gas as our

sole hydrocarbon feedstock at

Sasolburg and as a supplementary

feedstock to coal at Secunda.

Sasol Mining supplies most of the

feedstock coal we need for our Sasol

petrochemical plants.

Greenhouse gas (GHG) emissions

Coal is an important part of the world’s energy mix, and Sasol will continue to produce transportation fuels from coal and gas. However, we are committed to substantially reducing our carbon emissions by, among others, developing more effi cient production processes and investigating carbon capture and storage (CSS) solutions. We have set several targets to reduce our greenhouse gas emissions intensity by 15% (on the 2005 baseline) in all our operations by 2020, and we have spent R100 million (US$11,1 million) in 2009 on energy effi ciency-related projects, which should achieve a reduction of around 760 000 tons of GHG emissions a year.

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olo

gy

Our global emissions of GHG, which have been independently verifi ed, increased from 71,3 million tons (Mt) in 2009 to 75,8 Mt in 2010, mainly due to the inclusion of Oryx GTL emissions data. However, our emissions intensity improved to 3,05 (measured as carbon dioxide equivalent per ton of production) in 2010. This compares with 3,24 in 2009 and 3,02 (restated) in 2008. The improved overall GHG intensity is a result of the inclusion of Oryx GTL, and Sasol Polymers and Sasol Synfuels signifi cantly increasing production volumes, which offset the emissions increase. The targets we have set for all our operations refl ect not only our desire to be a responsible company, but also our awareness that a strong business case exists for sustainable development.

o

o

and to exceed targeted rates of return in a sustainable manner.

Our GTL diesel has a higher quality than diesels derived from

crude oil. GTL diesel has a high cetane number (70+ versus

the conventional 45 – 55), low sulphur (less than fi ve parts

per million), low aromatics (less than 1%) and excellent

cold-fl ow characteristics. Our GTL diesel, therefore, is ideal

as a low-emissions, premium grade fuel and as a blend stock

for upgrading conventional diesels.

o

Research

Besides the research and development and new-product

formulation and testing work we do at Sasolburg through Sasol

Technology’s fuel research group, we conduct further fundamental

research at the Sasol Advanced Fuels Laboratory (SAFL), in

collaboration with the University of Cape Town, and the Sasol Fuels

Application Centre (SFAC). SFAC enables us to conduct sea-level

engine and fuel research and tests in line with international trends.

Innovation

In downstream chemical process technology, we have developed

several proprietary processes for recovering and processing a range

of solvents, waxes and phenolics for the world market, as well

as 1-pentene, 1-hexene, 1-heptene, 1-octene and higher alpha

olefi ns, the last of which we convert into Safol™ H(C12,13) alcohols.

We have developed and patented several base-metal catalysts

for our FT synthesis processes.

We have also been innovative in coal exploration and mining, where

Sasol Mining (sometimes in partnership with technology suppliers)

has developed high-extraction mining methods, advanced

directional drilling techniques, roof-bolting systems, continuous-

miner systems and a virtual-reality training system for continuous-

miner operators, among other cost-saving innovations.

Water

Various technological advancements in effl uent recycling, cooling, pre-treatment of water for steam generation and solids handling are paving the way for signifi cantly improved zero liquid effl uent discharge designs, which are being developed irrespective of water availability or pricing.

New energy

Sasol New Energy Holdings (SNE) was created to focus on new technologies that can be integrated with our core technologies to reduce our GHG footprint. As part of our commitment to reduce production of carbon dioxide in our operations and integrate new technology into our FT processes, SNE will look into renewable and lower-carbon energy options such as solar, biofuels and biomass, as well as nuclear, hydro and natural gas.

55annual review 2010 our integrated business model

Markets

Sasol markets products directly

to the consumer, as well as to

commercial and industrial customers,

thereby integrating its upstream

and downstream activities.

The Report should offer the reader an overview of the business activities and performance and should provide a brief discussion of all material issues which have, or potentially could have, an impact on the Group and divisions.

www.blacksunplc.com © Black Sun Plc 2011 76 Integrated thinking in reporting6

Financial and business performance 2009

Strategic goalsDrive land productivity through innovation

Maximizing land productivity while conserving scarce resources such as water.

Build leadership in plant performance

Offering full crop programs and solutions to increase crop vigor and yield as well as control pests.

Capitalize on Seeds investment

Expanding our sales of both genetically modified and conventional seeds to achieve a significant increase in Seeds profitability over the medium term.

Expand in emerging markets

Through significant investments in people, portfolio and supply chain.

Create new businesses

Bringing together Syngenta Flowers and Professional Products to serve the specific needs of Lawn and Garden customers.

Maintain cost efficiency

Targeting annualized operational efficiency savings of $290 million by 2011 to enable continued investment in growth initiatives.

Outperform the industry

Building on the breadth of our business, spanning Crop Protection, Seeds, Traits and Seed Care, to provide a unique offer of integrated crop technology.

1 Growth at constant exchange rates (CER)

2 Fully diluted excluding restructuring and impairment

3 For a definition of free cash flow, see page 44

4 Subject to shareholder approval at the Annual General Meeting on April 20, 2010

5 Including inter-segment sales

Corporate Responsibility performance 2009

Corporate ResponsibilitySustainable agriculture

We aim to contribute to food security and sustainable agriculture by helping farmers improve yields on existing land, conserve valuable natural resources such as soil and water and preserve biodiversity.

Product stewardship

We aim to ensure the safety of our employees, customers and consumers by setting strict safety standards in our operations and promoting the safe and effective use of our products by farmers around the world.

People and communities

We respect our diverse workforce and aim to help each of our people develop their talent. We aim to benefit rural communities where we operate by helping farmers improve productivity.

Environment

We aim to minimize the environmental impacts of our operations throughout the life of our products – from research and development to manufacture, use and disposal.

Business ethics

Our Code of Conduct commits us to maintain the highest ethical standards in everything we do, and we encourage employees to report any suspected violations.

Nationalities in senior management

24

09

08

07

24

22

17

For more information, see page 31

Number of people trained

3.9m

09

08

07

3.9

2.4

3.2


CO2e kg /$EBIT1

0.76

09

08

07

0.76

0.75

0.93


Injury and illness rate

0.42

09

08

07

0.42

0.50

0.49


Crop Protection sales1,5

$8.5bn –2% (CER)

09

08

07

8,491

9,231

7,285


Seeds sales

$2.6bn +13% (CER)

09

08

07

2,564

2,442

2,018


$11bn +1% (CER)

09

08

07

10.99

11.62

9.24

Sales1

$15.76 –3%

09

08

07

15.76

16.26

11.45

Earnings per share2

$580m –24%

09

08

07

580

761

802

Free cash flow3

CHF6.00 0%

09

08

07

6.00

6.00

4.80

Dividend per share4

Crop Protection

Syngenta offers a leading range of Crop Protection and Seed Care products that help growers control weeds, prevent disease and protect their crops from insects. Crop Protection sales decreased by 2 percent1 to $8.5 billion in 2009.

Seeds

Syngenta develops high-quality seeds that help growers boost yields and quality in a wide range of crops. Seeds sales in 2009 rose by 13 percent1 to $2.6 billion, and the EBITDA margin climbed to 9.5 percent.

Lawn and Garden

The new Lawn and Garden business offers a range of plant health solutions for consumers and professional growers. It comprises Professional Products and Flowers Seeds, which are reported under Crop Protection and Seeds, respectively.


Environment

We are committed to reducing the environmental emissions necessary to produce our products. Increased resource efficiency in our main production sites has ensured that we are on track to reach our global reduction target by 2012.

Health and safety

Our target is to maintain an injury and illness rate (IIR) below 0.5 per 200,000 hours worked. In 2009, the IIR dropped to 0.42 and 76 percent of our sites had no recordable injuries and illnesses.

People

We employ more than 25,000 people in over 90 countries. This rich cultural diversity is also reflected in the composition of our senior management, with 24 nationalities represented.

Number of farmers trained

To ensure that farmers around the world achieve the best results with our products, we regularly hold training sessions on the safe and effective use of our products.

1 Excluding restructuring and impairment

Syngenta2009 Annual Review

Industrials Switzerland

Annual Review 2009

pp IFC-Foldout

In the introductory foldout, the Company clearly defines their vision of ‘bringing plant potential to life’ and the challenge the Company faces in meeting this. A clear outline of their strategic goals is presented alongside quantitative performance trend data and operational highlights.


NEDBANK GROUP LIMITED INTEGRATED REPORT 20104

INTRODUCTION

The motivation to produce an integrated report is based on a

number of factors, including:

The requirement to deliver quality reporting that mirrors the

group’s integrated approach to sustainability as a core element of

the way it does business.

Nedbank Group’s recognition of the need to align its reporting

as closely as possible with best-practice recommendations on

integrated reporting.

A greater focus on sustainability reporting across all areas of the

business.

Eliminating the duplication of information, thereby reducing the

associated paper usage and costs. To this end some of the detail

contained in previous reports has been excluded from the printed

document and included in the electronic version, which can be

accessed on the group’s website at www.nedbankgroup.co.za. These

initiatives reduced the overall volume of printed pages.

Nedbank acknowledges that integrated reporting, like integrated

sustainability implementation, is a journey and that this report is a

step in that journey and not an end in itself. Nedbank is committed to

integrated reporting, which takes various formats throughout the year.

SCOPE OF REPORTINGThis report covers the period from 1 January 2010 to

31 December 2010 and provides an overview of the operations,

financial performance and integrated sustainability developments

across all clusters, operational areas and majority-owned businesses

of Nedbank Group.

While organisations in which Nedbank Group may hold minority

shares are not included in the sustainability scope of this report, the

group works closely with these companies to provide guidance and

assistance with all aspects of their economic, environmental, social

and cultural sustainable development.

MATERIAL SUSTAINABILITY ISSUES ADDRESSED IN THE NEDBANK GROUP INTEGRATED REPORT 2010The process of determining material issues to be addressed in the

2010 integrated report was influenced by inputs from a broad

spectrum of internal and external Nedbank Group stakeholders,

including, but not limited to, shareholders, equity analysts, the

media, regulators, trade unions and various management teams. The

material issues identified through this engagement process were

tabled to Nedbank Group Executive Committee for consideration and,

following its approval, the material sustainability issues were tabled for

ratification by the Board Transformation and Sustainability Committee.

The endresult of this consultative process is a report that is aligned

with the identified cornerstones of economic, environmental, social

and cultural sustainability. In addressing these sustainability focus

areas in an integrated manner, this report covers the key material

issues set out below.

SUSTAINABILITY FOCUS AREA: ECONOMIC

Key material issue

Deliver lasting stakeholder value through responsible business

management and lending practices, governance, compliance and

ethics, risk management, information technology system integrity

and competitive products and pricing.

Reason for being a material issue

While optimising returns to shareholders remains a key objective

of everything the group does, Nedbank Group recognises that there

is more to economic sustainability than financial results. What is

required is a holistic approach that contributes to, and helps ensure,

the financial and economic sustainability of the group and all its

stakeholders – including its staff, clients, shareholders, suppliers,

communities, governments and countries in which it operates.

SUSTAINABILITY FOCUS AREA: ENVIRONMENTAL

Key material issue

Minimise usage of, and impact on, natural resources through:

a reduction and neutralisation of carbon emissions;

waste management initiatives; and

collaboration with stakeholders to encourage sustainable

behaviour changes.


As Africa’s first carbon-neutral bank, Nedbank Group is committed to

conserving and preserving the environment. This includes an internal

focus on limiting the impact of the group’s business on the resources

of the country and planet, and an outward focus that involves

partnering with its stakeholders to enhance its positive impact.

THE NEDBANK GROUP INTEGRATED REPORT 2010 BUILDS ON THE COMPREHENSIVE FINANCIAL AND SUSTAINABILITY REPORTING UNDERTAKEN BY THE GROUP IN RECENT YEARS. NEDBANK GROUP’S ANNUAL AND SUSTAINABILITY REPORTS HAVE BEEN INTEGRATED TO REFLECT THE COMMITMENT OF THE GROUP TO INTEGRATE ECONOMIC, ENVIRONMENTAL, SOCIAL AND CULTURAL SUSTAINABILITY ACROSS ITS OPERATIONS.

5

OVERVIEWGROUP

REPORTSOPERATIONAL

OVERVIEW

SUSTAINABLE DEVELOPMENT PERFORMANCE

RISK, GOVERNANCE AND COMPLIANCE

The integrated report has also been prepared in line with best

practice pursuant to the recommendations of the King III Code

(principle 9.1).

Ernst & Young has been engaged to provide assurance on the key

performance indicators as outlined in their assurance report (‘specified

KPIs’) on pages 208 to 211. The specified KPIs have been emphasised

in our report in bold green for identification purposes. For an

understanding of the levels of assurance expressed over the specified

KPIs, the preparation of our report in accordance with the self-declared

Global Reporting Initiative (GRI) G3 Guidelines A+ application level

using the principles of materiality, completeness and sustainability

context and in accordance with AccountAbility’s AA1000APS (2008)

using the principles of inclusivity, materiality, and responsiveness,

reference should be made to the detailed Ernst & Young statement on

pages 208 to 211.

The Nedbank Group has prepared the specified KPIs in accordance with

the basis of measurement as published on our website, which can be

obtained at www.nedbankgroup.co.za

Financial Sector Charter/black economic empowerment information

has been assessed by appointed auditors SizweNtsaluba. Please see

page 93 for the Department of Trade and Industry scorecard as signed

off by SizweNtsaluba.

ACCESSING THE INFORMATION YOU WANTRecognising that the majority of stakeholders prefer to select

only the information that is pertinent or of interest to them,

this integrated report endeavours to make it easier to access the

information you require. The following icons will assist readers in

selecting information based on their sustainability focus:

Information relating to economic sustainability.

Information relating to environmental sustainability.

Information relating to social sustainability.

Information relating to cultural sustainability.

Information relating to integrated sustainability.

Certain sections of the report are identified by means of more than

one icon. This is due to the integrated nature of the reporting process

and the fact that many of the initiatives and operations within

Nedbank Group cut across a number of sustainability focus areas.

REFINE YOUR READING ONLINEThe same icons have been applied to the online version of the

Nedbank Group Integrated Report 2010 allowing for specific

information to be selected and displayed at the user’s discretion.

The online version of this report can be accessed at

www.nedbankgroup.co.za.

SUSTAINABILITY FOCUS AREA: SOCIAL

Key material issue

Build societal capacity in southern Africa via:

sustainable socioeconomic development;

access to finance, affordable housing, healthcare and education for

lower income earners;

preferential procurement aimed at driving economic empowerment;

and

ongoing enterprise development and community upliftment.


Nedbank Group recognises the importance of creating a solid and

sustainable social infrastructure to secure the future of its own

business and that of the country as a whole. Social sustainability

is therefore approached from a clear understanding of the group’s

responsibility to do whatever it can to help create a better future

for all stakeholders. Nedbank Group seeks to do this via social

investment, staff volunteerism and empowering partnerships.

SUSTAINABILITY FOCUS AREA: CULTURAL

Key material issue

Develop a resilient corporate culture by:

building a unique corporate culture that serves as a competitive

advantage;

embedding talent management; and

constantly developing and growing the group’s people.


Key to the sustainability of Nedbank Group is its ability to create

an attractive, rewarding and performance-driven corporate

culture. People are the only truly sustainable competitive

advantage, and attracting and retaining the most talented

and capable people require a corporate culture that facilitates

personal growth and career development, while offering ongoing

talent management, a balanced environment, opportunities for

advancement, and recognition for the efforts and achievements

of all employees.

It is important to note that these material issues relate back to

Nedbank Group’s long-term deep green aspirations and the 2011

strategic focus areas as outlined on page 19. A table outlining the

sustainability governance structures and policy framework, linking

these to strategic focus areas and key material issues, appears on

page 95.

INDEPENDENT ASSESSMENT AND GLOBAL REPORTING INITIATIVE INDICESThe Global Reporting Initiative (GRI) and, in particular, the GRI

Financial Services Sector Supplement (FSSS) form the basis for this

report, and an analysis of the group’s compliance with the GRI FSSS

indices guidelines appear on pages 206 and 207. The full GRI content

index is detailed at www.nedbankgroup.co.za.

g p p y,yy y,yy p ,

reference should be made to the detailed Ernst & Young statement onYY

pages 208 to 211.

The Nedbank Group has prepared the specified KPIs in accordance withrr

the basis of measurement as published on our website, which can be,

obtained at www.nedbankgroup.co.zaww

Financial Sector Charter/black economic empowerment information

has been assessed by appointed auditors SizweNtsaluba. Please see.

page 93 for the Department of Trade and Industry scorecard as signedrr

off by SizweNtsaluba.

ACCESSING THE INFORMATIONAA YOU WANTWWRecognising that the majority of stakeholders prefkk er to select

only the information that is pertinent or of interest to them,

this integrated report endeavours to make it easier to access the kk

information you require.T. he following icons will assist readers in

selecting information based on their sustainability focus:

Information relating to economic sustainability.

Information relating to environmental sustainability.

Information relating to social sustainability.

Information relating to cultural sustainability.

Information relating to integrated sustainability.

Certain sections of the report are identified by means of more than

one icon. T. his is due to the integrated nature of the reporting process

and the fact that many of the initiatives and operations withinrr

Nedbank Group cut across a number of sustainability focus areas.ff

REFINE YOUR READING ONLINEThe same icons have been applied to the online version of the

Nedbank Group Integrated Report 2010 allowing for specific

information to be selected and displayed at the user’s discretion.

The online version of this report can be accessed at

www.nedbankgroup.co.za.

business and that of the country as a whole. Social sustainability.

is therefore approached from a clear understanding of the group’s

responsibility to do whatever it can to help create a better future

for all stakeholders. Nedbank Group seeks to do this via social .

investment, staff volunteerism and empowering partnerships.

SUSTAINABILITY FOCUS TT AREA: CULTURALLL

Key material issue

Develop a resilient corporate culture by:

building a unique corporate culture that serves as a competitive

advantage;

embedding talent management; and

constantly developing and growing the group’o s people.


Key to the sustainability of Nedbank Group is its ability to create

an attractive, rewarding and performance-driven corporate

culture. People are the only truly sustainable competitive

advantage, and attracting and retaining the most talented

and capable people require a corporate culture that facilitates

personal growth and career development, while offering ongoing

talent management, a balanced environment, opportunities for

advancement, and recognition for the efforts and achievements

of all employees.

It is important to note that these material issues relate back to

Nedbank Group’s long-term deep green aspirations and the 2011

strategic focus areas as outlined on page 19. A table outlining the

sustainability governance structures and policy framework, linking

these to strategic focus areas and key material issues, appears on

page 95.

INDEPENDENT ASSESSMENT AND GLOBAL REPORTING INITIARR TIVE INDICESAAThe Global Reporting Initiative (GRI) and, in particular, the GRI

Financial Services Sector Supplement (FSSS) form the basis for this

report, and an analysis of the group’s compliance with the GRI FSSS

indices guidelines appear on pages 206 and 207. The full GRI content

index is detailed at www.nedbankgroup.co.za.ww


INVESTMENT CASENEDBANK GROUP’S OBJECTIVE OF BUILDING AN ORGANISATION THAT OPTIMISES RETURNS TO STAKEHOLDERS AND CREATES A SUSTAINABLE FUTURE IS ENABLED BY AN INTEGRATED APPROACH TO ECONOMICS OF THE BUSINESS, ENVIRONMENTAL PRESERVATION, INVOLVEMENT IN SOCIETY AND ORGANISATIONAL CULTURE.

ECONOMIC SUSTAINABILITY

ENVIRONMENTAL SUSTAINABILITY

SOCIAL SUSTAINABILITY

Recovering economic environment. Experienced management team in place.Continued improvement in impairments, particularly home loans, as the economy recovers.Strong wholesale franchise and retail upside potential.Primary client growth and non-interest-revenue (NIR) strategy gaining traction.Growth opportunities in the Nedbank Wealth businesses.Proven cost management culture. Strong position in selected lending categories and liabilities/deposit-taking.Endowment income upside when interest rates increase.

Potential from new innovative products.

Strategy for low-risk expansion into

Africa.

Continuous improvement of client service

and satisfaction metrics.

Continued high staff morale and unique

corporate culture.

Leadership in transformation making

Nedbank Group increasingly relevant to

all South Africans.

Leadership in environmental issues and

related business opportunities arising

from the green economy.

Integrated approach ensuring sustainable

short- and long-term growth.

LEVERS FOR GROWTH

CULTURAL SUSTAINABILITY

INTEGRATED SUSTAINABILITY

7

OVERVIEWGROUP

REPORTSOPERATIONAL

OVERVIEW



HISTORY

FORECAST

AN INTEGRATED APPROACH TO SUSTAINABLE GROWTHCompanies that have integrated sustainability have been proven to yield superior returns over the longer term. With this in mind, Nedbank

Group’s activities over the past years were focused on entrenching its economic, environmental, social and cultural sustainability in order to

enhance its appeal as a viable and attractive long-term investment opportunity.

The group has been acknowledged as a leader in sustainability by qualifying for the JSE Socially Responsible Investment (SRI) and the

Dow Jones World Sustainability indices since 2004. This has assisted the group in obtaining preferential funding over the past six years.

RECOVERING ECONOMIC ENVIRONMENT POSITIVE FOR NEDBANK

8

6

4

2

0

-2

-4

-6

-8

90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13

GDP+: QUARTER-ON-QUARTER % CHANGE (SEASONALLY ADJUSTED ANNUAL RATE)

36

32

28

24

20

16

12

8

4

0

-4

25,0

20,0

15,0

10,0

5,0

0,0

PRIME %

CREDIT FORECAST

PRIME

TOTAL CREDIT

CREDIT YEAR-ON-YEAR %

70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12

+ Gross domestic product.

Nedbank 2010 Integrated Report

FinancialsSouth Africa

VO

LUM

E

1

NEDBANK GROUP LIMITEDINTEGRATED REPORT 2010

FINANCIALENVIRONMENTAL SOCIAL CULTURAL

pp 4-5 and 6-7

The introduction to Nedbank’s report discusses the content and scope of the report itself as well as providing a comprehensive overview of why the areas of economic, environmental, social and cultural sustainability are all material issues for the business. The following investment case then builds on the initial information presented and discusses how Nedbank take an integrated approach to economics of the business, environmental preservation, involvement in society and organisational culture.

www.blacksunplc.com © Black Sun Plc 2011 98 Integrated thinking in reporting

Mission statementWe will grow and manage a diversified portfolio of metals and mining businesses with the single aim of delivering industry leading returns for our shareholders.

We can achieve this only through genuine partnerships with employees, customers, shareholders, local communities and other stakeholders, which are based on integrity, co-operation, transparency and mutual value-creation.

Who we areXstrata is a global diversified mining group, listed on the London and Swiss Stock Exchanges, with its headquarters in Zug, Switzerland.

What we doOur businesses maintain a meaningful position in seven major international commodity markets: copper, coking coal, thermal coal, ferrochrome, nickel, vanadium and zinc, with additional exposure to gold,

cobalt, lead and silver. The Group also comprises a growing platinum group metals business, iron ore projects, recycling facilities and a suite of global technology products, many of which are industry leaders. XstrataÕs operations and projects span 20 countries.

How we operateWe believe that operating to leading standards of health, safety and environmental management, contributing to the development of sustainable communities and engaging with our stakeholders in two-way dialogue, regardless of our location, enhances our corporate reputation and is a source of competitive advantage. We balance social, environmental, ethical and economic considerations in how we manage our businesses.

How we create valueWe create sustainable value for our shareholders by delivering transformational growth and by applying operational excellence to our portfolio.

www.xstrata.com | 1

Overview

StrategyPerform

anceG

overnanceFinancials

Overview02 2010 highlights04 Group overview06 ChairmanÕs statement09 Chief ExecutiveÕs report

Strategy

18 Market overview21 Competitive environment24 How we create value26 Strategy28 Growth pipeline36 Key performance indicators42 Principal risks and uncertainties

Performance50 Financial review56 Operating review56 Xstrata Alloys62 Xstrata Coal70 Xstrata Copper80 Xstrata Nickel86 Xstrata Zinc94 Xstrata Technology Services96 Operations data

Governance102 Board of directors104 Executive management105 DirectorsÕ report110 Corporate Governance report119 Remuneration report

Financial statements132 Statement of directorsÕ responsibilities133 Independent AuditorsÕ report134 Consolidated income statement135 Statement of comprehensive income136 Consolidated statement of financial position138 Consolidated cash flow statement139 Statement of changes in equity140 Notes to the financial statements219 Independent AuditorsÕ report220 Balance sheet221 Notes to the financial statements228 Cautionary note regarding

forward-looking statementsIBC Shareholder information

Contents

For more informationVisit our corporate website: www.xstrata.com

Cross-reference within this document for related information.

Sustainable developmentFor the second year, we have combined information about our non-financial and financial policies and performance to provide a comprehensive overview of the GroupÕs business and activities. We recognise that excellence in safety, environmental, ethical and social performance is a source of competitive advantage and is critical if we are to achieve our primary aim of delivering industry-leading returns to our shareholders over the long term.

Integrated reporting reflects our ongoing efforts to embed our sustainable development policy and principles into our decision-making and the way we operate at every level of the organisation.

Key information about sustainable development within this report is available in the following areas:

Page numbers

Governance and framework 7-8, 24-25, 112, 115-118

Approach and policies 7, 10-11, 24-25, 26-27

Employees 25, 27, 41, 47

Health and safety 10-11, 25, 27, 40, 45-46

Environment 25, 39-40, 44-46

Community 25, 27, 41, 45

Key performance indicators 38-41

We also produce a detailed Sustainability Report which is published in April 2011. This provides additional discussion on our policies, activities and performance, and is available on our website:www.xstrata.com/sustainability

Xstrata 2010 Annual Report

Basic MaterialsUnited Kingdom

Annual Report 2010

Transformational growth

Sustainable value

Operational excellence

pp IFC-1

The front cover has a clear statement of the Company mission and a brief overview of who they are, what they do and how they operate. The reader is informed that the sustainable development information has been integrated throughout the report and is directed to relevant areas of the report for specific information.


Siphelo Mbabane using a prop extension arm jack to install support.

13ANGLO PLATINUM LIMITED 2010

ABOUT ANGLO PLATINUM LIMITED

WHO WE ARE Wh

o w

e a

re

The company has also produced a more detailed sustainable development report that contains additional detail and case studies. This is available in Adobe pdf format on the company’s website, at www.angloplatinum.com. This sustainable development report has been compiled in accordance with the GRI’s G3 guidelines. It is independently assured by PricewaterhouseCoopers, to an application level of A+. We have self -declared our report to GRI Application level A+ which has been third party checked by PwC.

SCOPE AND BOUNDARIES OF OUR REPORTAnglo Platinum Limited’s financial year runs from January to December and this report covers results for 2010. The previous report was released in February 2009. The scope of the 2010 report has changed. The manner in which data and information for both BRPM and Bokoni mines is included in the annual report has changed as these operations are now accounted for as associates. Therefore certain key metrics have been restated for comparability, where it makes sense to do so.

CONTACT DETAILS AND FURTHER INFORMATIONFor further information, please e-mail us at [email protected], or complete the fax reply form at the back of this report. The address of the Anglo Platinum Limited website is http://www.angloplatinum.com.

Contact personKgapu MphahleleInvestor RelationsE-mail: [email protected]: 011 373 6239

Anglo Platinum Limited55 Marshall Street, Johannesburg, 2001PO Box 62179, Marshalltown, 2107, South Africa

PROFILEAnglo Platinum Limited is the world’s leading primary producer of platinum group metals (PGMs) and accounts for approximately 40% of the world’s newly mined platinum. The company is listed on the Johannesburg Stock Exchange.

Anglo Platinum Limited’s wholly owned South African mining operations include the Bathopele, Dishaba, Khomanani, Khuseleka, Mogalakwena, Siphumelele, Thembelani and Tumela mines. Twickenham Mine remained under development during 2010.

In addition, the group has a number of joint ventures, as follows: with Anooraq Resources Corporation over the Bokoni mine; ARM Mining Consortium Limited over the Modikwa Platinum Mine; Royal Bafokeng Resources over the combined Bafokeng-Rasimone Platinum Mine (BRPM) and Styldrift properties; the Bakgatla-Ba-Kgafela traditional community, which holds a 15% share in Union Mine; Eastern Platinum Limited (a subsidiary of Lonmin Plc) and its partner, the Bapo-Ba-Mogale traditional community and Mvelaphanda Resources, over the Pandora Joint Venture; and Xstrata Kagiso Platinum Partnership, to operate the Mototolo Mine. Anglo Platinum Limited also has pooling-and-sharing arrangements with Aquarius Platinum (South Africa), covering the shallow reserves of the Kroondal and Marikana mines that are contiguous with its own Rustenburg mines.

The group’s smelting and refining operations are wholly owned through Rustenburg Platinum Mines Limited and are situated in South Africa. These operations treat concentrates, not only from the wholly owned operations, but also from joint ventures and third parties.

Elsewhere in the world, the group successfully completed the development of Unki Platinum Mine in Zimbabwe during 2010 and is actively exploring in Brazil. It has exploration partners in Russia.

OUR APPROACH TO REPORTINGAnglo Platinum Limited’s 2010 Annual Report is the company’s second fully integrated annual report to shareholders. As such, the report offers a complete overview of the company’s financial, social and environmental performance in a single, consolidated report. Much of the information and data on the group’s performance in terms of sustainability is integrated into the relevant sections of this report, including the chairman’s statement, the CEO’s review, and the sections on the business environment, performance highlights and business results. A complete set of environmental, social and governance statements has been included, starting on page 125.

Anglo Platinum 2010 Annual Report

Basic MaterialsSouth Africa

2010

ANGLO PLATINUM LIMITED

ANNUAL REPORTFinancial, social and environmental performance

PLATINUM, A PRECIOUS METAL FOR A PRECIOUS PLANET

pp 12-13

Anglo Platinum provide a general overview of the Company profile, its activities and its approach to reporting. It also clearly defines the scope and boundaries of the report, how it has changed and gives clear contact details for further information. This spread is interestingly presented as the set up to a ‘Who we are’ section which includes the Board of Directors and Executive Committee introductions and a map displaying the locations of all the Company’s operations.


By referencing wider stakeholder groups as opposed to simply shareholders, the company is able to reconcile its business purpose of creating value for shareholders whilst also taking into account its relationship with other stakeholder groups.

18

21%

of sales by destination to North and

South America

19%

of sales by destination to Europe, Middle East

and Africa

28%

of sales by destination to China

32%

of sales by destination to elsewhere in Asia

and Australia

Countries with operations and/or projects

4 Rio Tinto 2010 Annual report www.riotinto.com 5

Overview

Performance

Production, reserves

and operationsG

overnanceFinancial statem

entsA

dditional information

Group overviewOpportunities for long term growth

Major global operations

Our assets are ideally positioned to serve our customers worldwide. The majority of our operations are in Australia and North America, but we also have businesses in South America, Europe, southern Africa and Asia. While our operating heartland is in OECD (Organisation for Economic Co-operation and Development) countries, much of our sales are to emerging economies – which are driving the anticipated growth in metals and minerals demand. To meet rising demand, we will continue to pursue value-adding organic growth, plus targeted small to medium sized acquisitions.Our fi ve product groups (below) are supported by our Exploration and Technology & Innovation groups.

AluminiumWe are a global leader in the aluminium industry. Our closely integrated facilities include high quality bauxite mines and alumina refi neries, as well as some of the world’s lowest cost primary aluminium smelters.

Products

Bauxite, alumina, aluminium

Key strengths

Effective portfolio management, improving our already strong position and moving assets further down the cost curve.

Largest bauxite producer in the industry.

Self generated hydroelectricity at many facilities.

Global scale gives the group the ability to seize opportunities and support customers worldwide as markets continue their recovery.

One of the best growth project pipelines in the aluminium industry, supported by our management expertise and proprietary AP Technology™.

CopperWith diverse assets and leading technology, our Copper group is uniquely positioned to supply growing global demand. In 2010, we produced 678 thousand tonnes of copper, making us the world’s fi fth largest supplier. We also produced 772 thousand ounces of gold and 13 thousand tonnes of molybdenum as by-products of our copper operations.

Products

Copper, gold, molybdenum, silver, nickel

Key strengths

Participation in and ownership of several world class operating assets. Management of the Oyu Tolgoi project, scheduled to be a top ten copper producer and a signifi cant gold producer.

Investment in a substantial growth profi le.

Industry leading technology and innovation.

Diamonds & MineralsThe Diamonds & Minerals group comprises mining, refi ning and marketing operations across three sectors. Rio Tinto Diamonds is one of the world’s leading diamond producers, active in mining and sales and marketing. Rio Tinto Minerals is a world leader in borates and talc, with mines, processing plants, commercial and research facilities. Rio Tinto Iron & Titanium is an industry leader in high grade titanium dioxide.

Products

Diamonds, borates, titanium dioxide feedstocks, talc, high purity iron, metal powders, zircon, rutile

Key strengths

Poised to benefi t from late-cycle demand growth.

Substantial brownfi eld and greenfi eld development pipeline.

EnergyWe are a leading supplier of thermal and coking coal to the Asian seaborne market and are one of the world’s largest uranium producers, serving electric power utilities worldwide. Our Energy portfolio includes: Rio Tinto Coal Australia; a coal mine at Colowyo in Colorado, US; Energy Resources of Australia, which produces uranium oxide from its Ranger operation; and Rössing, a Namibian uranium oxide producer.

Products

Thermal coal, coking coal, uranium

Key strengths

Strong customer relationships and high quality assets located in close proximity to growing Asian markets.

Emphasis on operational excellence, thereby reducing waste and greenhouse gas emissions and engaging our people.

Iron OreWe are the second largest producer supplying the global seaborne iron ore trade. After a decade of dramatic expansion in Australia, and more recent growth in both Australia and Canada, we believe we are well positioned to benefi t from the continuing demand surge in China and other Asian markets. We are driving performance through effective project management and enhanced operational effi ciency.

Products

Iron ore, salt

Key strengths

Proximity of the expanded Pilbara operations to the world’s largest and fastest growing markets.

Success in increasing operational effi ciency and controlling costs.

Vast potential of brownfi eld developments near existing infrastructure.

Full operating review on page 42 Full operating review on page 46 Full operating review on page 50 Full operating review on page 54 Full operating review on page 58

ExplorationExploration is one of the Group’s core activities – largely paying for itself through the sale of non core discoveries.

Potential Tier 1 discoveries (see page 62) are retained for development and operation. These have included two of the largest copper opportunities in the world at Resolution in Arizona, US and La Granja in Peru. Exploration has also delivered one of the world’s largest known undeveloped high grade iron ore deposits, at Simandou in Guinea, as well as the Caliwingina channel iron deposits in the Pilbara, Australia.

Full operating review on page 62

Technology & InnovationOur centralised team of specialists focuses on improving current technologies and operations, with emphasis on project development, execution and evaluation. The Group’s Innovation Centre concentrates on step changes that will give us competitive advantages in developing the orebodies of the future. A special Energy & Climate Strategy Centre is dedicated to improving the Group’s use of energy, reducing greenhouse gas emissions and understanding the effects of climate change on our operations and prospects.

Full operating review on page 64

Contribution to Group underlying earnings (a) (b)

6%


18%


2%


8%


73%

(a) Items excluded from net earnings to arrive at underlying earnings are explained in note 2 to the 2010 fi nancial statements.

(b) Aggregate product group underlying earnings contribution of 107 per cent is reduced to 100 per cent by negative amounts for Other items and Net interest.

2010 Annual report

This report is available online Visit www.riotinto.com/annualreport2010

forStriving

globalsectorleadership

Rio Tinto2010 Annual Report

Basic MaterialsUnited Kingdom/Australia

pp 4-5

In the Rio Tinto report, business divisions and supporting functions are all clearly outlined showing their contribution to group revenue and key strengths. The global reach, and distribution, of the organisation is explained as well as graphically depicted showing the percentage of the group’s products sold to major geographical regions.



8

our key relationships

o Regulatory authoritiesWe work to establish and maintain constructive relationships with governments of the countries in which we operate, or plan to operate. We seek to identify how Sasol’s growth can support the growth strategies of these countries – ensuring alignment with their development and economic requirements and challenges.

o CustomersWe interact directly with many of our customers, both to solicit their feedback on our products and services, and also as part of our commitment to ensure effective product stewardship, particularly for some of our more hazardous products.

o InvestorsWe keep shareholders and the investment community updated on our fi nancial results and topical issues. This includes regular presentations and discussions on group performance and strategy with investment analysts, institutional investors and journalists in South Africa, North America and Europe. We also publish highlights of our annual and interim fi nancial results in the main South African daily newspapers.

o Business organisationsWe are active members of relevant industry associations in the countries in which we operate, enabling us to channel our views into governmental initiatives, as well as working cooperatively on industry initiatives with our peers, within the ambit of applicable legislation.

o The media We maintain a well-resourced group communication, investor relations, sponsorship and brand management team. In addition, most of our major businesses employ full-time communication staff whose tasks include media support.

o Local communities and civil society organisationsIn addition to the public participation initiatives implemented as part of new projects, we undertake community outreach initiatives at most of our existing operations. These engagements provide us with a deeper understanding of community interests and enable us to work in a proactive rather than reactive manner.

o Suppliers and service providersWe engage with our suppliers and service providers to understand and address their concerns, and to ensure they adopt and adhere to our safety standards. Their safety records are included in the group recordable case rate (RCR).

o Tertiary institutionsOur work with tertiary institutions remains an important component of our skills development initiatives – both for internal and external talent pools – and is key to our global research and development work.

o EmployeesWithout our employees there would be no other stakeholders; they are the foundation upon which all our activities depend. Maintaining effective communication with our staff is fundamental to the success of the company. We communicate with employees in many different ways, including through a regular letter from the chief executive, internal newsletters, the Sasol intranet, shop-fl oor briefi ngs, posters and 360º performance reviews. While we conduct internal staff surveys and focus groups, we recognise that there is scope for further engagement, specifi cally on sustainable development.

o Joint-venture partnersWe have joint ventures (JVs) in ten countries (including South Africa), covering all major areas of our business from chemicals to retailing fuel. Our shareholding varies from 40% – 50%, and the nature of our control over their operating activities ranges from total management control (contracted to Sasol), 100% control by the JV management, or management control by the other JV partners. While the nature and form of our engagement will vary depending on the level of control, the underlying principle of maintaining active and open engagement applies equally to all our JVs.

Maintaining positive relationships with our various stakeholders is an important part of the way we do business.

SD A more detailed review of our approach to stakeholder engagement is provided in our

separate sustainable development report and on our website.

The relationships we build and maintain with all our stakeholders

are guided by our shared values.


our vital statistics

2010 2009

Market capitalisation (cap) Rm 183 350 179 780

Year-end share price (JSE, SA) R 274,60 269,98

Year-end share price (NYSE, USA) US$ 35,27 34,82

Total assets Rm 156 484 145 865

Total interest bearing debt Rm 15 032 17 814

Enterprise value (cap + debt) Rm 186 764 181 194

R:US$ exchange rate – average 7,59 R: exchange rate – average 10,55

R:US$ exchange rate – closing 7,67 R: exchange rate – closing 9,39

2010 2009

Turnover Rm 122 256 137 836

External turnover, SA Rm 62 014 68 561

External turnover, rest of world Rm 60 242 69 275

Attributable earnings Rm 15 941 13 648

Wealth created Rm 47 996 50 503

Capital invested for growth and business enhancement Rm 16 108 15 672

* T (RCR) y. T RCR y fi y

Return on equity (ROE) 17,9

Enterprise value: Earnings before tax, depreciation and amortisation (EBITDA) 6,1

Earnings yield 9,7%

Dividend yield 3,82%

Dividend cover (times) 2,6

Gearing 1,0%

Number of employees worldwide 33 339

Employee cost to turnover 12,9

Employment equity positions in SA 56%

Investment in employee training and development R386 m

Safety recordable case rate (RCR)* (including occupational illnesses and service providers)

0,51



Sasol 2010 Annual Review


pp 8-9

Sasol clearly identify each of their key stakeholder groups, providing a brief overview of the relationships with these groups, why each group is important to the success of the business, and how these relationships are maintained.

Overall vision – wider stakeholder commitment?

www.implats.co.za 32 Implats Integrated Annual Report 2010

Group overview

Engaging with stakeholders

Implats has a broad range of stakeholders who have

material interests in the business.

These stakeholders have been identified through

structured and unstructured processes as well as ad

hoc day-to-day interactions at different levels of the

organisation.

Traditional council and land owners

MediaShareholders

and investing

community

Banks, funders,

insurance

companies

Employees

Trade

unions

Producer

associations

Customers

Suppliers

Government

– national,

provincial and

local

Communities

NGOs,

CBOs

BEE

partners

Advocacy

groups

Producers

and business

partners

Community forums

BEE suppliers

End users


Gro

up

ove

rvie

wP

erfo

rma

nc

e o

ve

rvie

wA

nn

ua

l fin

an

cia

l sta

tem

en

ts

Implats engages with both internal and external

stakeholders, through various designated structures in the

organisation tabled below. Internal stakeholders include

employees, unions and business partners. External

stakeholders span government, the media, financial

institutions, suppliers, advocacy groups and others.

External stakeholders are primarily engaged through the

Group stakeholder engagement and investor relations

departments. The frequency and nature of these

engagements is determined by the issues raised.

Strategically, Implats focuses on proactively creating,

building and maintaining effective relationships with all

affected and interested stakeholders.

Due to the nature of our business and the impact we

have on our immediate surroundings, communities are

considered as important stakeholders. We recognise the

symbiotic relationship between the business and the

community. Any social issues present in the community

have a direct impact on the business, while the way in

which we operate and the performance of our business

directly influence the livelihoods of these communities.

The types of engagement and material developments in

South Africa during the year are summarised below.

Stakeholder engagement in South Africa

Stakeholder Type of engagements Material issues raised Action taken

Shareholders and

investing community

Annual and quarterly reports,

interim results, website, fact

sheets, roadshows,

presentations and one-on-one

conferences

Market performance

Metal prices

Safety performance

Responses are provided

during the engagement

process by providing

relevant answers and data

where available

Banks, funders,

insurance companies

Equity, debt and insurance

engagements

No material issues raised

Media Electronic, print, radio and

television

Safety performance

Operations efficiency

Dealt with through

Investors Relations and

media releases

Government – national,

provincial, local

Close liaison with and

reporting to national,

provincial, district and local

government

Feedback on

SLP performance

Safety performance

Formal presentations have

been given during the

visits and meetings

Non-governmental

organisations (NGOs),

community-based

organisations (CBOs),

and concerned groups,

Chamber of Mines,

North West Air

Pollution Control

Forum, Benchmarks

Foundation (organises

stakeholder meetings

and symposiums)

Public open days on mines,

environmental hotline,

community liaison offices,

publications

Issues relating to the

impact of mining on the

environment, health and

implementation of socio-

economic projects

Issues addressed through

stakeholder engagement

forums

Monthly, quarterly

meetings held as

scheduled

I N T E G R AT E D A N N U A L R E P O RT 2 0 1 0

Implats Platinum2010 integrated Annual Report


pp 32-33

Implats Platinum provide a section on ‘engaging with stakeholders’ within their Group overview which identifies the principal stakeholder groups who have material interests in the business. A tabular format is used to explain: each stakeholder group; the type of engagements with Implats; material issues raised during the engagement process; and specific actions undertaken by the company in direct response to stakeholder feedback.


2naturaannualreport

OUR ESSENCE

HOW WE GOT HERE 4

OUR MOMENT

WHAT WE AIM FOR

WHO WE WORK WITH

WHAT FOOTPRINT WE LEAVE FINANCIAL STATEMENTS 97

DNV REPORT 134

ABOUT THE REPORT 136

GLOBAL COMPACT PRINCIPLES 137

GRI INDEX 138

EDITORIAL TEAM 142

3 Reason for being 3 Vision 3 Beliefs

5 Message From the Chairmen 6 Message From the Executive Committee 7 Profile 8 Awards and Recognitions 13 Natura Value Chain 14 Governance 19 Prospects 20 Collective construction 22 High-priority sustainability topics 25 Development of our commitments 28 Natura Management System 29 Innovation

32 Quality of relationships 37 Employees 49 Consultants and NCAs 54 Consumers 58 Suppliers 60 Supplier communities 64 Surrounding communities 67 Shareholders 69 Government

74 Creation of social value 81 Creation of environmental value 94 Creation of economic value

Table of Contents

3naturaannualreport

VISIONBecause of its corporate behavior, the quality of the relationships it establishes, and the quality of its products and services, Natura will be an international brand, identified with the community of people who are committed to building a better world, based on better relationships among themselves, with others, with nature of which they are part, with the whole. .

Our Reason for Being is to create and sell products and services that promote well-being/being well.

Well-being is the harmonious, pleasant relationship of a person with oneself, with one’s body.

Being well is the empathetic, successful, and gratifying relationship of a person with others, with nature and with the whole.

REASON FOR BEING

BELIEFSLife is a chain of relationships. Nothing in the

universe exists alone.

Everything is interdependent.

We believe that valuing relationships is the foundation of an enormous human revolution in the search for peace, solidarity, and life in all

of its manifestations.

Continuously striving for improvement develops individuals, organizations, and society.

Commitment to the truth is the route to perfecting the quality of relationships. The

greater the diversity, the greater the wealth and vitality of the whole system.

The search for beauty, which is the genuine aspiration of every human being, must be free

of preconceived ideas and manipulation.

The company, a living organism, is a dynamic set of relationships. Its value and longevity

are connected to its ability to contribute to the evolution of society and its sustainable

development.

OUR ESSENCE

A N N UA L R E P O RT N AT U R A 2009

Natura2009 Annual Report

Consumer GoodsBrazil

pp 2-3

The Natura report takes a rather big picture approach to reporting and this is demonstrated in the initial pages. The language used on the contents page to guide readers to specific areas of the report is continued on pp3 where the company vision is outlined. In this initial set-up, it is apparent that the company takes into account its relationship with stakeholder groups, as well as its position and benefits it can bring to society.


AXA2009 Activity and Corporate Responsibility Report

FinancialsFrance

pp 6-7

AXA present a clear statement of their mission, responsibility and values, vision and strategy on these pages. Each stage is mainly customer focused but, within their vision statement, their commitment to other stakeholder groups is also highlighted. Overall, this section informs the reader of the Company’s long-term focus as well as the shorter-term strategies in place to guide the Company’s day-to-day decisions.


Siemens 2009 Annual Report

IndustrialsGermany

pp 2-3

At the beginning of the report, Siemens provide an outline of their company vision and values. At both of these levels, there is reference to non-financial elements such as energy efficiency, and ethical and responsible actions.


in content selection, Petrobras has consulted representatives of its 13 strategic stakeholders

consulted, including members of the commision in charge of preparing and assessing social

and environmental responsability reports.

stakeholders’ perspective and compare it with that of Petrobras in order to structure a matrix that reflected the issues that were priority to both parties (chart below).

2

1

4

3

Level of importanceof the topics

for thestakeholders:influence of

the economic,social, and

environmentalimpacts

Level of importance of the topics for the company: influenceof the economic, social, and environmental impacts

DESCRIPTIONQUADRANTAVERAGE ASSESSMENT

STAKEHOLDERS PETROBRAS

4

3

2

1

=> 5

< 3.50

=> 3.50

< 3.50

=> 5

< 3.50

=> 3.50

< 3.50

the report.

-ing to specific requests.

d-ing to specific requests.

08

SUSTAINABILITY REPORT 2009 | PETROBRAS

09

ABOUT THIS REPORT

About the Contents of this Report

Report for the first time. It is the consolidation

operating and economic performance highlights

Report, a publication through which thecompany rendered accounts on its performance from the perspective of sustainability.

In this report, we present information to our stakeholders about our performance as a whole, reflecting the integration among the three pillars of our corporate strategy: growth,profitability, and social responsibility. It is also an statement of the progress we have made

Compact, which we are signatories of.

information they contain refers to 2008.

i Learn more Petrobras’ commitment to the Global Compact in the chapter that has the same title.

provide information on all key indicators under theguidelines and the content of which is submitted toexternal verification. In 2009, this verification was

See the KPMG statement on the 2009 Sustainability Report on page 153.i

See the GRI table of contents on page 146.i

assessing social and environmental responsability reports is responsible for the drafting process

representatives from 24 areas and subsidiaries

the information compiled by a network of collaborators, which, in 2009, totaled 290 people.

and are used as input to prepare the report’s content, which is validated by the commission before being published.

Sustainabilityitbt iReport

yy

200

2800

3400

3900

4800

6800

7200

11 3ssocial, and

e o e tanvironmentalimpactss

LLevel of importance f of the topics f for the company: influenceoof the economic, social, and environmental impacts

DESCRIPTIONQUADRANTAVERAGE ASSESSMENTAA

STAKEHOLDERSTT PETROBRAS

4

3

22

1

=> 5

< 3.5< 3.500

=> 33.5050

<< 3.50

=> 55

<< 3. 050

=> 3.500

<< 3.50

t phe report.

--ing to specific requests.c requests.

dd--ing to specific requests.

10

SUSTAINABILITY REPORT 2009 | PETROBRAS

11

7000

6000

0102

03

040506

07

08

0910

11

1213

1415

16

17

18

1920

21

22

2324

25

2627

2829 30

3132

3334

35 3637

38

39

40

41

424344

4546

47

48

49

50

51

52

5354

55 56575859

60

61

6263

64

65

66

MATERIALITY MATRIX – PETROBRAS

&

&

7

53

54

64

39

15

59

55

16

57

32

56

14

58

31

29

49

30

28

62

24

36

35

25

63

17

23

52

8

2

40

50

65

4

21

1

46

5

60

45

13

61

41

12

9

66

38

37

27

33

19

26

6

34

20

48

3

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43

42

44

22

51

18

47

11

Rele

vanc

e of

the

topi

cs fo

r the

sta

keho

lder

s

Relevance of the topics to the company

ABOUT THIS REPORT

About the Contents of this Report

Petrobras2009 Sustainability Report

Oil & GasBrazil

pp 8-9 and 10-11

In 2009, Petrobras published its first Sustainability Report, which is a consolidation of the Annual Report and the Social and Environmental Report. The report states that performance is presented as a whole, reflecting the integration of the three pillars of this corporate strategy: growth, profitability and social responsibility.

To determine the relevance of issues and assist with content selection, Petrobras explain how they carried out a stakeholder engagement process to determine materiality and understand their stakeholders’ perspectives.

Further to the previous page discussions of the contents in the report, a materiality matrix is presented which presents the issues considered as central and material to the business.


Leadership commitment – communicating from the top?

BASF2010 Annual Report

Basic MaterialsGermany

pp 8-9

Within the Chairman’s statement, there is significant focus given to issues of sustainability and responsibility and why these are central to the company strategy. The presentation of these non-financial areas within the statement demonstrates to the reader the commitment stemming from the Board and its implementation throughout the business strategy and activities.

If there is a commitment to sustainability, the business case for operating in this responsible way should be clearly articulated at a strategic level and communicated through the management statements.


04 SyngentaAnnual Review 2009

“The challenge of feeding the rising world population over the next 40 years on a finite area of arable land is a daunting one. Given continued technological progress, however, and – most crucially – acceptance of technology, it is perfectly achievable.”

Chairman’s letter

1.

Throughout 2009, the headlines were dominated by the continuing repercussions of the global financial crisis. The crisis brought a heightened focus on the sustainability of business strategies in a world of greater uncertainty and volatility. In this challenging environment, Syngenta continued to perform well. Our financial strength enabled us to invest in our business to generate future growth and create sustainable value over the long term.

While the financial crisis grabbed the headlines, the underlying challenge of ensuring food security for a growing world population remained central to the agenda of governments worldwide. The magnitude of this challenge was reinforced by the UN’s Food and Agriculture Organization (FAO) which announced in June that the combination of global economic slowdown and high food prices had pushed another 100 million people into a state of chronic hunger and poverty. The total number of people on the planet who are malnourished has now surpassed the one billion mark.

At Syngenta, we remain committed to help address this challenge through working with our customers around the world – from smallholders in developing countries to professional growers in large-scale agriculture – to deliver a step change in farm productivity in a sustainable way. We have developed a deep understanding of plants and innovative technologies that help growers produce more food while conserving precious natural resources such as water and soil. Coupled with our global presence, this makes us uniquely positioned to develop innovative, integrated offers for tomorrow’s farmer.

Syngenta’s contribution is increasingly recognized by society, but of course no single corporation, government or NGO can hope to tackle the food security challenge alone. Collaboration and partnership will accelerate progress, and we have been very active in 2009 in engaging around the world in the wider public debate on agriculture. We seek the opinions of key leaders in the public sphere to inform our work. Some of their thoughts on how to address these issues are set out on pages 8 and 9 of this review. We look forward to further dialogue, and to the development of new partnerships in the coming years.

05 SyngentaAnnual Review 2009

2.

3.

However, a potential barrier to progress exists – the worrying trend away from science-based regulation in certain countries, particularly in Europe. Norman Borlaug, the Nobel-prize winning architect of the Green revolution who died in September, once stated that his pioneering seed technology would simply never have made it to the hands of the growers had it been subjected to the regulatory climate that exists in some countries today. The slide towards “opinion-based” regulation is a real threat to technological progress and denies growers, in developed and developing countries, access to the products they need to improve yields and thus their livelihoods. The indulgence of imaginary fears suppresses innovation and harms economic growth. Worse, it is a betrayal of the hungry.

On my many visits to see growers around the world, I have been struck by the passion shown by Syngenta people. They are working to meet customer needs, capture significant business opportunity and, at the same time, make a substantial contribution to the environment and the development of rural communities. This indivisibility between our financial, environmental and societal goals is, once again, reflected in this year’s Annual Review, which explains our 2009 performance from all three perspectives. Our efforts in this regard have again been recognized by the key global sustainability indices: DJSI and FTSE4Good; Syngenta continues to hold leading positions in both.

Our high standing as a company relies entirely on the daily activities and actions of our employees around the world. In 2009, we made further progress in embedding the highest standards of behavior in our Company by engaging 19,700 employees in our revised Code of Conduct, which covers aspects from legal compliance and business ethics to our contribution to society and approach to developing our people. In so doing, we are ensuring that we adhere to the highest ethical standards and that we protect our economic, physical and

reputational assets. In addition, a Senior Executive Committee was established to oversee all aspects of our compliance and risk management activities in a single approach under the governance of the Board.

At the Ordinary General Meeting (OGM) in April, Jürg Witmer was elected Vice Chairman of Syngenta, replacing Rupert Gasser who left the Board upon reaching the statutory retirement age. The OGM also saw the election of new Directors, David Lawrence and Stefan Borgas, to the Board. I should like to thank them and all my Board colleagues for their valuable contributions to Syngenta during the year.

The challenge of feeding the rising world population over the next 40 years on a finite area of arable land is a daunting one. Given continued technological progress, however, and – most crucially – acceptance of technology, it is perfectly achievable. The scale of the problem and the means of addressing it are increasingly well understood. The conviction that companies like Syngenta have a critical role in delivering the solution gives purpose to the work of everyone at the Company.

Martin TaylorChairman

1.“Breakfast meeting” discussion with Syngenta employees in Basel.

2.At a small kiosk in West Java with APAC CP Region Head, Andrew Guthrie, and Indonesia CP Head, Arshad Saeed Husain, discussing the Java Channel strategy.

3.With Didit Hidayat, Field Technical Manager of Java SBU, Mr. Syahid, an Indonesian farmer, and Midzon Johannes, Development Head Syngenta Indonesia, after attending the Syngenta Expo at Tugu Mukti Village in West Java Province.

pp 4-5

The CEO’s letter in the Syngenta Report clearly sets up the issues which the Company faces, and discusses the policies and performance in relation to these. It is interesting to note the Company commitment to global sustainability challenges in this statement, such as ‘achieving global food security’.

Syngenta2009 Annual Review

Industrials Switzerland

Annual Review 2009


INVESTING – in world class assets in the most attractive commodities

We own, operate and grow world class mining assets in those commodities that we believe deliver the best returns through the economic cycle and over the long term.

We aim to focus on those commodities in which we have advantaged positions and on large scale assets with long lives, low cost profiles and with clear expansion potential, that is: copper, diamonds, iron ore, metallurgical coal, nickel, platinum and thermal coal.

OUR FOUR STRATEGIC ELEMENTS

Anglo American aims to be the leading global mining company – the investment, the partner and the employer of choice – through the operational excellence of world class assets in the most attractive commodities and a resolute commitment to the highest standards of safe and sustainable mining.

DEFINING OUR AMBITIONOUR STRATEGY

INVESTING World class assets in the most attractive commodities

EMPLOYINGThe best people

BECOMING THE LEADING

MINING COMPANY

Investment, partner and employer

of choice

ORGANISINGEfficiently and effectively

OPERATINGSafely, sustainably and responsibly

KEY STRATEGIC HIGHLIGHTS Anglo American performed strongly in 2010, both operationally and financially, and we have continued to deliver on our clear strategic objectives. Strategic highlights from the year include:

1 We have completed $3.3 billion of divestments of non-core businesses, including our zinc portfolio, Moly-Cop and AltaSteel, five undeveloped coal assets in Australia and a number of Tarmac’s European businesses. We have received strong interest in the remaining businesses and will divest those in a manner and on a timetable that maximise value. In February 2011, we announced our intention to combine the UK businesses of Tarmac and Lafarge, to create a leading UK construction materials company

10 Anglo American plc — Annual Report 2010

Our focused commodity businesses are driving superior operating performances, through major productivity improvements, disciplined cost management and the significant benefits of our asset optimisation and global supply chain programmes.

Cynthia CarrollChief executive

OVERVIEW: Our strategy

EMPLOYING – the best people

Our people are as vital to our success as our mining assets.

We are committed to our people, who determine how effectively we operate and build our reputation with our investors, partners and fellow employees every day, and whom we require to uphold our values.

Ultimately, it is our people who will realise our ambition and deliver our strategy to be the leading global mining company.

ORGANISING – efficiently and effectively

Our structure aims to facilitate the delivery of performance and efficiencies to outperform the competition.

Each commodity business unit is focused on operational excellence, project delivery and driving its cost position further down its industry curve, while the lean corporate centre facilitates the extraction of value beyond what is achievable by the businesses alone.

Through close collaboration, value-driven leadership, the sharing of best practice, technical innovation, operational know-how and the pursuit of synergies in key value-driving functions such as supply chain and asset optimisation, the substantial benefits of Anglo American’s scale and performance oriented culture are realised.

OPERATING – safely, sustainably and responsibly

Operating safely, sustainably and responsibly is embedded in everything we do. The safety of our people is our key core value and we are relentless in striving to achieve our goal of zero harm.

We are committed to environmental stewardship and minimising the environmental impact of our operations.

We aim to make a sustainable and positive difference to community development and act with integrity to build respectful relationships with the societies in which we work. Behaving in this way, supported by strong governance and risk management processes, enables us to develop and helps maintain trust with all our stakeholders and create value, which is fundamental to our ability to deliver superior long term returns to our shareholders.

2We have exceeded all expectations by achieving asset optimisation and procurement benefits of $2.5 billion from our core businesses alone (including one-off benefits), well ahead of our 2011 target of $2 billion

3We have made excellent progress on our four major projects, enabling us to start up a major project every six to nine months over the next few years. The first of these, the Barro Alto nickel project, will begin production on schedule in March 2011, more than doubling our Nickel business’ output when it reaches full production. The expansion of our Los Bronces copper operation in Chile and the Kolomela iron ore project in South Africa are progressing on schedule and on budget. We have also secured key licences and permits for the Minas-Rio iron

ore project in Brazil, and expect civil works for the beneficiation plant and tailings dam construction to begin in March 2011

4 We continue to focus on our safety performance across the board and recorded further improvements during the year, with fatalities and lost time injury rates both continuing to reduce. We have now achieved a near 70% improvement in safety since 2006 as we pursue our goal of zero harm.


Ove

rview

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In 2010 we considerably strengthened our balance sheet and are well positioned to finance our project pipeline and to take advantage of any attractive M&A opportunities.

Réne MédoriFinance Director

Project delivery is a major challenge in our industry. At Anglo American we have chosen to focus on the way that we develop and approve our projects, ensuring that we harness the full capacity of our technical resources in a disciplined and consistent way.David WestonGroup Director of Business

Performance and Projects

Creating trust is at the heart of our licence to operate; in 2010 we made further headway, with another significant improvement in our safety performance, while extending our internationally recognised community engagement programme.

Brian BeamishGroup Director of Mining and Technology

Talent development remains a key priority. In pursuit of this aim, we launched the People Development Way, a global capability framework that describes the behaviours, knowledge, skills and experiences needed to enable Anglo American to achieve its strategic objectives.Mervyn WalkerGroup Director of Human Resources

and Communications

DELIVERINGREAL EXCELLENCEAnnual Report 2010

Anglo American2010 Annual Report


pp 10-11

Sustainable development is a key issue discussed in both the Chairman and CEO statements and is referred to as being central to the group strategy and management of the day-to-day activities of the business. The strategic content in the CEO statement clearly refers to safety, sustainability and responsibility as being core to the group strategy.


6 | Business review: overview

ChairmanÕs statement

The conviction that the financial crisis was a severe but temporary interruption of a positive secular trend underpinned XstrataÕs executive managementÕs decision, supported by the Board, to continue to invest in XstrataÕs major organic growth projects during 2009, thereby ensuring Xstrata was quickly able to position itself for growth in anticipation of the global economy recovering. I am pleased to report that the decision to do so has enabled the Group to maintain its ambitious growth trajectory, and XstrataÕs major growth projects remain set to deliver a substantial 50% increase in overall volumes on a copper-equivalent basis over 2009 levels by the end of 2014, providing robust returns at conservative commodity prices and, importantly, an average reduction in unit costs of 20%.

The volatility in prices evident in 2010 will, in the BoardÕs view, persist over the medium term as a result of more prudent supply chain management by customers leading to lower inventories and greater spot market activity, an increase in shorter term, quarterly pricing agreements for many commodities, the impact of commodity markets becoming an investment class in their own right, and high levels of capacity utilisation on the supply side. The impact of financial flows on exchange traded metals is clearly visible in the almost immediate response of the commodities market to changes in market sentiment. Financial investment in commodities now represents a semi-permanent, but highly volatile, source of demand.

XstrataÕs diversified portfolio is geared towards early and mid-stage LME-traded commodities such as copper, nickel and zinc, and bulk negotiated commodities of thermal coal, coking coal and ferrochrome. With end-user construction, infrastructure and electricity generation sectors accounting for some 50% of XstrataÕs revenues, the Group remains in a strong position to continue to benefit from demand from the industrialising economies of China, India, Brazil and others.

StrategyIn 2010, the Board focused its attention on the substantial capital investment programme underway across our business, examining the management processes in place to identify and manage the risks inherent in such an extensive expansion programme, and scrutinising the 10 projects brought to the Board for approval to commence construction. The Board continues to assess each project brought for approval against stringent criteria in terms of the anticipated return on investment at conservative long-run prices, reduction in operating costs compared to current production, and in the light of anticipated market conditions, in addition to evaluating the businessÕs ability to manage the associated risks.

The accelerating pace of delivery of organic growth created a strong sense of momentum in 2010 and into early 2011. It is encouraging to see Xstrata already delivering volume growth and cost savings from the three major projects completed during the year, and demonstrable progress on projects at every stage of development.

The combination of low gearing, over $8 billion in undrawn bank facilities, high-quality access to the debt markets and strong cash flow generation means Xstrata is well-placed to fund the$18 billion of expansionary capital expenditure that has been committed for currently approved and soon-to-be approved projects

ÒAgainst a more encouraging macro-economic backdrop, Xstrata delivered its second best financial performance sinceits IPOÓWilly StrothotteChairman

2010 offered XstrataÕs businesses a markedly improved operating environment compared to the previous year, despite the impact on confidence of sovereign debt concerns in the early part of the year and uncertainty about the potential impact of inflation on emerging economiesÕ growth in the latter part of the year. Against this more encouraging macro-economic backdrop, and aided by the numerous restructuring and cost saving initiatives implemented during the previous year, Xstrata delivered its second best financial performance since its IPO nine years ago.

Commodity marketsThroughout the financial crisis and ensuing global downturn, XstrataÕs Board and management continued to hold the view that the secular trends underpinning the positive prospects for commodities remained intact and would, in time, reassert themselves. Demand growth fuelled by urbanisation and industrialisation in highly populated developing markets and the structural issues that restrict new supply of many major commodities continued to provide support for commodity prices, notwithstanding events that weighed on global confidence during the year and had a short-term impact on commodity markets.

www.xstrata.com | 7

Overview

StrategyPerform

anceG

overnanceFinancials

over the next three years of its ambitious expansion, as well as retaining the agility to opportunistically take advantage of value accretive acquisitions.

With a robust balance sheet that continues to provide the flexibility to withstand short-term price pressures and maintain our ambitious capital expenditure programme, and the Board’s confidence in the medium-term outlook, I am pleased that we have been able to return Xstrata’s final dividend to pre-financial crisis levels. This substantial increase, which underlines the Board’s commitment to a progressive dividend policy, will form the level from which the dividend policy will grow in the future.

During the year, members of the Board’s Health, Safety, Environment and Community Committee were able to see the impressive progress of the Koniambo nickel project at first hand during a visit to the module yard in Qingdao in China, where components of Koniambo’s metallurgical plant were constructed, followed by a visit to the Koniambo site itself in New Caledonia. The project’s disciplined approach to safety, its integration into and close collaboration with the local community and its systematic approach to project management give the Board great confidence in the successful execution of this substantial project.

Xstrata also made further progress on its medium-term goal to build a substantial iron ore business in 2010. The fundamentals for iron ore are attractive and provide additional diversification of Xstrata’s portfolio. Xstrata’s proven expertise in bulk commodities, together with its track record in infrastructure and project development, means the Group is well positioned to successfully develop its iron ore projects. Following the acquisition of controlling interests in junior mining companies with assets in Mauritania and Republic of Congo (Brazzaville), Xstrata now has a firm foothold in the market, with projects that offer both near and long-term development potential.

SustainabilityXstrata’s Sustainable Development Policy, Business Principles, supporting suite of standards and assurance process, ensure a rigorous approach is taken at every site and project. As Xstrata moves further into an intensive phase of developing large-scale mining projects and exploring the potential of longer-term projects that lie in new and more complex geographies, it is imperative that we continue to work in this way and apply our best-in-class environmental management and community relations if we are to successfully deliver our organic growth strategy.

Mining involves a capital-intensive, long-term investment commitment. We have a recognised obligation to ensure our activities have a positive impact in terms of jobs, training, education and social and financial benefits that endure over the long term. To do so, we must work in partnership with host governments and communities within a stable regulatory environment that facilitates the substantial investment required to develop and sustain mining operations and that recognises the full contribution of mining activities to the socio-economic well-being of a region or nation. Striking the right balance between the legitimate desire of government to extract financial benefit for their countries from

mining companies and the equally legitimate requirement of shareholders to be compensated for the risks borne in developing and operating mines is complex and requires open consultation and a spirit of genuine partnership.

Xstrata continues to support the communities associated with its operations and 2010 was no exception, with more than $84 million invested in projects in the areas of health, education, community development, art and culture, job creation and enterprise development. Several countries in which we operate faced severe weather-related catastrophes. In January, the Group donated $500,000 to the International Red Cross Haiti Appeal, established to provide emergency aid and relief to those affected by the devastating earthquake, as Xstrata Nickel’s Falcondo operation is situated in the Dominican Republic bordering Haiti. In March, Xstrata donated $1 million following a major earthquake in Chile, comprising $500,000 to the Chilean Red Cross and a further $500,000 to support relief efforts being undertaken by an Antofagasta-based industry body. Xstrata Copper provided a variety of in-kind support, including food parcels for impacted employees, supporting a rescue and reconstruction team and facilitating helicopters for the rescue effort. Xstrata Copper also provided support for the rescue of the Chilean miners who were recovered safely on 13 October after 69 days trapped underground at a mine operated by San Esteban.

During late 2010, the Australian state of Queensland suffered some of the worst flooding in decades, leaving many homeless and infrastructure paralysed. As a significant Queensland employer and a major contributor to the affected region’s economic growth via its coal, copper and zinc operations, it was fitting that Xstrata supported and assisted these communities through a AUD2 million contribution to the Queensland Premier’s Disaster Relief Appeal to help the state’s recovery.

The safety and wellbeing of our workforce remains paramount. Whilst in 2010 the businesses saw an overall strong improvement in the reduction of total recordable injuries, I am very saddened to report that three people lost their lives while working at Xstrata’s managed operations or projects. Improvement in safety performance and the prevention of fatalities remains the utmost priority for Xstrata’s Board and management, and we continue to work to ensure we implement the learnings from every actual and potential critical incident, as well as from best practices within our own and other industries.

Sustainability information is integrated within this report, including a range of non-financial key performance indicators in the Strategy section. A comprehensive Sustainability Report is also published separately from the Annual Report each year laying out key sustainability risks, strategy and performance against set targets, which is available from Xstrata’s website.

Governance and risk management As announced in early March, I will step down as Chairman of Xstrata plc at the Annual General Meeting (AGM) on 4 May 2011. Sir John Bond has been invited to join the Board and will stand for election as Chairman and independent non-executive director. At this

Xstrata2010 Annual Report


pp 6-7

Xstrata’s Chairman incorporates sustainability issues in his statement inferring the importance that the Chairman himself places on these issues in ensuring successful management of the business. A clear link between sustainability and group strategy is provided and at this early stage of the report, the reader is signposted to more extensive sustainable development information in the standalone report and the website.

Annual Report 2010


Sustainable value



8 Veolia Environnement

Veolia

Environnement’s

four businesses

interact to enable

our company

to take a global,

responsible view

of environmental

solutions.”

9

If there is one thing I am sure of, it is the vital importance of Veolia’s activities

in the world today and that of tomorrow. Our company stands at the heart

of the major challenges facing our century, namely urban growth, dwindling

resources and climate change. Our cities, now home to half the world’s

population, are increasingly crowded and beset with a host of problems.

Too often their infrastructures are obsolete or inadequate. Veolia Environnement’s

mission, its business, is to improve people’s daily lives and prepare for their future.

We have many strengths to achieve that,foremost among them being the people working for Veolia. Driven by a deep sense

of service, and fully familiar with local conditions, they are continuously inventing

new solutions and innovating daily. They work for an outstanding company

that embodies 150 years of experience in 74 countries, capable of working with

decision-makers and adapting to every type of local situation. Veolia truly sets the

standard for responsiveness and innovation worldwide. Finally, its four businesses

interact to enable our company to take a global, responsible view of environmental

solutions. It is a source of great satisfaction to me that what began as a hope

and an intuition—that water, waste management, energy and transportation

were destined to come together to tackle the challenges of the environment

eff ectively—has now become a reality, thanks to the talents comprising the

company today.

This has been an extraordinary human adventure over the past 10 years,

as we have built up a company of more than 300,000 people, with revenues

of €34.6 billion.

But Veolia is recognized for more than just its expertise. It owes its successes over the past 10 years

to its capacity to foresee and prepare for the future, so that it is now well

equipped to confront the world that lies ahead. The company already and

naturally embodies the emerging values of tomorrow’s world, namely conserving

resources and recycling raw materials. Everywhere, too, we are encouraging

the development of partnerships for the long term.

Above all, and I must stress this especially, Veolia Environnement is committed

to people. With our Campus, we are rolling back barriers to entry to the company

in the name of equal opportunity and diversity. More broadly, wherever we act,

we give pride of place to people, to their activities and their aspirations.

Where others may lean toward resignation and pessimism, I take great comfort

from the fact that our company is tangible evidence of humanity’s capacity

to remain master of its fate.

Message from Henri ProglioChairman of the Board of Directors of Veolia Environnement

Annual andSustainability

Report 2009

Veolia2009 Annual and Sustainability Report

UtilitiesFrance

pp 8-9

The Chairman discusses Veolia’s strengths and abilities and how these have enabled the Company to take responsibility for global environmental solutions.

As well as highlighting the operational strengths of the Company, the Chairman also refers to their people within the business and how this relationship is managed, to be mutually beneficial for both the Company and employees.


Sustainability is undisputed as an essential component of every successful business strategy and it is important for companies to demonstrate the commitment to sustainability and show how these issues are embedded within the business, within the group strategy discussion.


4 British American Tobacco Annual Report 2010Business review

Chief Executive’s review

“ In 2010 we grew market share, grew our leading international brands and achieved significant productivity savings that were well ahead of our targets.”

Paul Adams Chief Executive

A strong business in a tough marketplaceThe strength of our companies worldwide and the success of our tried and tested Group strategy have enabled us to achieve very good growth through a volatile year, marked by economic uncertainty. Some emerging markets are now showing strong economic growth and even developed markets are returning to growth, yet unemployment remains stubbornly high in many parts of the world and disposable incomes are still under pressure.

So it’s still a tough marketplace but our results show the true quality of our business. Our geographic diversity and strong positions in markets that have been least affected by the global recession continue to play a part in our success. However, the real story is the strength of our brands, the innovative products we bring to market and the quality of our people.

In 2010 we grew market share, we grew our leading international brands in our most important markets and we achieved significant productivity savings that were well ahead of our established targets. Our organic revenue in constant currency also rose 3 per cent, despite a decline in organic volume of 3 per cent.

Our brands are strong and growing in market shareOur brands are performing well and I believe that this shows the true vitality of the Company. Collectively, our Global Drive Brands (GDBs) – Dunhill, Kent, Lucky Strike and Pall Mall – grew by 7 per cent, reflecting the successful launch of product innovations in key markets and brand migrations.

What’s pleasing is that we are growing market share where it matters most. Our overall share in our Top 40 markets grew by 30 basis points to 25.3 per cent – a really encouraging result.

Productivity enabling growthOur structural cost base has seen big changes over the past couple of years and this will continue. This is not just belt tightening, we are reconfiguring our structural costs as a result of refining our manufacturing footprint and developing new global systems that reduce local duplication of effort and resources.

Productivity savings in the supply chain, general overheads and indirect costs amounted to £327 million in 2010 and helped us achieve an overall operating margin increase from 31.4 to 33.5 per cent. This means we have achieved our £800 million per year productivity savings target for 2012 two years ahead of schedule. I can see our ability to reduce costs continuing, especially as we exploit new global systems and processes. So we’ve made good progress on costs and there’s more to come.

Delivering sustainable growthOur sustainability performance is also very important to us. It’s all about creating shared value – how we can create economic value in a way that also creates value for our stakeholders. The work we have done in this area, not just in 2010 but over the last decade, has been recognised through external benchmarking such as the UK’s Business in the Community Corporate Responsibility Index and the Dow Jones Sustainability Indexes.

We have also received very good feedback on our Sustainability Reports and, in some cases, we have surprised independent assessors, including some who are critical of our business, with the openness and transparency of our reporting and the way we integrate sustainability with our business priorities and our strategy.

We continue to make progress on our sustainability agenda – not just our impact on the environment and our people, but also the way we conduct our operations in the marketplace and throughout our supply chain. Our focus on the consumer means that we have continued to invest in our brands and the development of product innovations to drive growth, while we also invest in the longer term to ensure the business is fit to meet future challenges. This includes having the research and development capability to support our investigation into innovative products and our efforts to develop potentially reduced-harm prototypes.

Handing overThis report marks the end of an extremely enjoyable, often challenging and always interesting seven year period for me as Chief Executive. My successor, Nicandro Durante, has much to look forward to. I know he will quickly make the role his own and his drive for success will help to ensure the continued growth of this excellent business.

I retire from the Company satisfied with the progress we have made and confident about its future. I’m clearly going to miss it. I’m tremendously proud of what we’ve achieved and I can only thank my colleagues in the company – all 60,000 of them – for what we’ve achieved together. I wish them, Nicandro and the whole business well for the future.

Paul AdamsChief Executive

5British American Tobacco Annual Report 2010Business review

Business reviewC

orporate g


entsO

ther inform

ation

Our strategyOur strategy is designed to deliver our vision and, as a result, build shareholder value. It is based on growth, funded by productivity and delivered by a winning organisation that acts responsibly at all times.

Our vision To achieve leadership of the global tobacco industry.

GrowthOur strategy for growth aims to increase our market share, with a focus on our Global Drive Brands.

ProductivityOur commitment to productivity provides the resource we need to invest in our brands and grow share in our key markets, helping us to increase profit.

Winning organisation

Being a winning organisation ensures that we attract, develop and retain the people we need to deliver growth.

ResponsibilityOur companies and people act responsibly at all times and we seek to reduce the harm caused by our products.

You can read more about our strategy at: www.bat.com/strategy

“ As markets start to come out of the recession, we are now armed with a stronger portfolio and are ready to take advantage of further growth opportunities.”

Nicandro Durante Chief Executive (from 1 March 2011)

A strategy for growthI am delighted to take on my role at a time when the opportunities for growth continue to be strong. There’s no doubt that we have our work cut out to match or exceed the success of the past few years but I know that we have the right business model, the right products and the right people, with the strongest innovations anyone in our industry has at their disposal.

Our strategy certainly won’t change, although we may talk about it in a slightly different way. Our business model and balanced strategy add value to all aspects of our business and we believe this sets us apart from our competitors. We still think that delivering growth is the key to achieving our vision to lead the global tobacco industry. This means placing an even greater focus on growth and ensuring that it drives everything we do. Our growth is funded by productivity and delivered by a winning organisation that acts responsibly at all times.

Strengthening our businessIn 2010 we strengthened our brands, we strengthened our innovations and we increased market share. We also made good progress on our sustainability agenda and very good progress on reducing costs.

We grew share in our Top 40 markets and I believe that as markets start to come out of the recession, we are now armed with a stronger portfolio than we had before and are ready to take advantage of further growth opportunities. The key indicators are moving in the right direction, demonstrating the strength of our business.

A N N U A L R E P O R T 2 010

DELIVERING GROWTH THROUGH INNOVATION

British American Tobacco2010 Annual Report

Consumer GoodsUnited Kingdom

pp 4-5

At British American Tobacco, sustainability is communicated as a significant feature of the business operations and central to the group strategy. In this report, there is a CEO handover and it is interesting that sustainability is referred to in both the outgoing and incoming CEO’s strategy. This demonstrates the leadership commitment to the issue and it is clear through the strategy diagram that ‘responsibility’ is a central element of the group strategy. This is then reported consistently throughout the report.


Philips2010 Annual Report

HealthcareNetherlands

pp 13-14

Following on from the previously stated mission and vision for the company, Philips provides a detailed account of their ‘Vision 2015’, which offers information regarding the various sectors of operation as well as their key priorities, including being a leader in sustainability. An interesting feature of this strategy is the detail of the global trends provided and the presentation of the potential business opportunities gained from these.

Strategy and objectives – integral to the business model?

11

OVERVIEWGROUP

REPORTSOPERATIONAL

OVERVIEW



PORTFOLIO MANAGEMENT (PORTFOLIO TILT)

This approach was adopted for sustainably optimising returns in

an environment where resources, capital and liquidity are scarce

commodities. The group must be more judicious in selecting

strategic business opportunities that will allow better alignment of

risk and returns, taking into account liquidity, capital and credit risks.

Doing so will allow a transition from some of the existing portfolios,

such as retail home loans (where the economic returns continue to

be poor), while growing low-capital-intensive businesses. The group

will, however, continue to take a long-term sustainable view of its

products, client needs and its societal impact.

Against this strategic backdrop the business plan for 2011 to 2013

will see Nedbank Group focus on:

building enduring primary banking relationships with more retail

and wholesale clients in South Africa;

improving its primary banking positioning across all businesses;

becoming the leader in business banking for South Africa;

becoming the public sector bank of choice;

continuing as one of the top two wholesale banks;

ramping up the wealth and asset management, and insurance

businesses;

leveraging the Imperial Bank integration;

becoming the leader in client service delivery; and

building on its position as a leader in, and influencer of, integrated

sustainability.

The group will also continue to evolve its strategy of building Africa’s

most admired bank by:

implementing its three-tier strategy to grow its physical network

in the Southern African Development Community;

leveraging boutique investment banking opportunities;

leveraging the Ecobank Nedbank Alliance to provide clients with

access to a Pan-African network; and

evaluating selective investment opportunities.

The current strong capital position of the group, combined with

these strategic focus areas, places Nedbank Group in a position for

sustainable growth.

The Nedbank Group strategy can be visually represented as follows:

Our brand expression

What makes us different and guides

our long-term strategy?

Deep Green aspirations

VisionBuilding Africa’s most admired bank ...

... by our staff, clients, shareholders, regulators and communities.

Our eight strategic focus areas

Scope of the game

Our values

Most respected and aspirational brand

Highly involved in the community and environment Leading transformation Living our values

Great at collaboration Worldclass at managing risk Community of leaders

Great place to bank Great place to invest

Great place to work

Integrity Respect Accountability Pushing beyond the boundaries People-centred

A member of the Old Mutual Group

Banking and selected financial services Bank for all Southern Africa focus with

selected African expansion

Client-driven Manage for value

Primary client and cross-sell

Risk as an enabler

Productivity and execution

Uniqueand innovative

cultureTransformation Green and

caring bank

ASK ONCE: Great at listening, understanding

clients’ needs and delivering

VISION-LED VALUES-DRIVEN


GROUP STRATEGY

While the change in wording is subtle, it represents a significant

enhancement to the group’s vision and highlights the increasing focus

by Nedbank Group on growing its business reach across the African

continent not just in South Africa. However, the group recognises that,

to become the most admired bank in Africa, it must achieve this in

South Africa first, which is why Nedbank Group’s primary focus during

2010 was on developing more competitive domestic strategies for

each of its frontline businesses.

The group’s vision continues to be supported by its long-term

objectives, which are referred to internally as Deep Green aspirations.

DURING 2010 NEDBANK GROUP’S VISION WAS REFINED TO: ‘BUILDING AFRICA’S MOST ADMIRED BANK BY OUR STAFF, CLIENTS, SHAREHOLDERS, REGULATORS AND COMMUNITIES’.

These are:

to become a great place to work, a great place to bank and a great place to invest; to be worldclass at managing risk; to create a community of leaders; to have the most respected and aspirational financial services brand; to be recognised for being highly involved in the community and environment; to lead in transformation; to be great at collaboration; and to live our values.

IDENTIFICATION OF KEY TRENDS, THEIR IMPLICATIONS AND NEDBANK GROUP’S STRATEGIC RESPONSE TO THEM

IDENTIFIED TREND NEDBANK GROUP WILL …

Bank returns are structurally declining. ... respond through active portfolio management and ‘tilting’ of its portfolio of businesses to

optimise sustainable profitability, utilise capital and liquidity judiciously, invest to exploit new

growth opportunities, and build a lean operating model.

The SA financial services’ economic

profit pool is large, but higher growth

is expected in the rest of Africa in the

longer term.

... focus domestically, but continue to explore expansion opportunities in Africa.

SA prospects continue to be driven

by infrastructural investment

(mostly government) and a wealthier

consumer.

... ensure that it benefits from the opportunities created through infrastructure development,

increase its focus on wholesale banking, and improve its retail proposition to capture disposable

income shifts. The group will also continue to bring more people into the formal banking system

through innovative and affordable products such as M-PESA.

There is high growth from bandwidth,

electronic, internet, mobile and new

technology developments.

... leverage new technologies and then lead in these high-growth markets and banking markets

linked to these, such as mobile banking.

SA demographic shifts are enabling

consumer opportunities.

... target large and growing segment opportunities such as the underbanked, youth, small and

medium enterprise and senior-citizen markets. A differentiated approach is essential to service

such new markets in a cost-efficient manner.

The voice of and focus on the client

are increasing.

... meet the need for simplicity, convenience, choice, affordability, advice, and trust from clients.

Client centricity will remain a core focus, with the aim to increase direct engagement with clients.

Non-banking solutions are growing

faster than banking, but deposits have

become a key priority.

... seek out add-on growth solutions while improving transactional banking capabilities, such as

cross-sell, primary clients, and functionality.

Demand for talent is greater than

growth of the talent pool.

... develop unique ways to retain, develop and grow the staff talent pool, especially in businesses

that will be targeting higher growth.

Pressure on natural resources is

increasing.

... continue to reduce and neutralise its own operational impact, consider environmental impacts

in its lending activities and actively support its clients in their endeavours to reposition their

businesses accordingly.

TWO OTHER KEY AREAS RECEIVED ADDITIONAL FOCUS DURING THE 2010 STRATEGY PROCESS:

VO

LUM

E

1

NEDBANK GROUP LIMITEDINTEGRATED REPORT 2010

FINANCIALENVIRONMENTAL SOCIAL CULTURAL

Nedbank 2010 Integrated Report

Financials

South Africa

pp 10-11

To set up the strategy discussion, Nedbank provide details on key trends in the economy and marketplace, the implications of these trends, and what decisions the Company has taken to ensure an appropriate strategy is in place. The diagram which demonstrates the group ‘vision led, values-driven’ strategy incorporates a balance of financial and non-financial elements which are in place to ultimately lead Nedbank to becoming ‘Africa’s most admired bank by staff, clients, shareholders, regulators and communities’.




our strategic direction

our visionoTo grow profi tably, sustainably and inclusively, while delivering

value to stakeholders through proprietary technology and the

talent of our people, in the energy and chemical markets in

Southern Africa and worldwide.

Operations Excellence

Values-driven Leadership

Capital ProjectExcellence

Functional Excellence Grow

stakeholder

value

sustainably

gro

up

imp

erat

ives

our strategic agendaoOur growth in sustainable stakeholder value is built on a foundation of developing people and

improving assets. We aim to grow our GTL, CTL, upstream, chemicals and new energy business.

This is achieved through our technological prowess and through group imperatives that deliver

functional, operational and capital project excellence, supported by Values-driven Leadership.

Guiding our intentions and underpinning all our actions are our shared values of safety, customer

focus, winning with people, excellence in all we do, continuous improvement and integrity.

Foundation Growth Defi nition of victory

Develop and empower

our people

Accelerate GTL, focused CTL growth

Grow related upstream business

Develop and grow new energy

More details on our current growth projects are provided on pages 12, 14 and 15.

Grow technological lead

Grow chemicals based on feedstock and/or technology advantage

Continuously improve

and grow our existing

asset base

Deliver on the South

African transformation

agenda

10

After extensive consultation with senior management, we have clarifi ed the articulation of our vision and strategy.

The execution of transformational initiatives at group, business unit and functional levels

give effect to Sasol’s strategy. The Sasol business transformation steering committee

provides overall governance and ensures clear focus and integrated implementation

of these major programmes.

unpacking our strategic agendao

Group imperatives

Operations Excellence

This programme aims to improve

profi tability across Sasol’s value chains

by developing standardised, world-

class management systems and by

implementing best practice in our plants

and businesses. Projects are facilitated

to ensure sustainable continuous

improvement. The programme also seeks

to develop competent and engaged

people to adopt these practices and

deliver targeted performance.

Functional Excellence

This programme aims to assist centralised

enterprise functions to identify process,

structural and technological ineffi ciencies

and implement improvements that

achieve simple, standardised and shared

ways of working. The programme aims

to improve the cost effectiveness and

service effi ciency of all the functional

areas of our business.

Capital Project Excellence

This newly introduced initiative aims

to ensure the fl exible and effective use

of capital in the group’s project value

chain. It is focused on delivering projects

that meet all quality requirements in

the shortest possible time, at the lowest

possible cost, yielding the greatest

possible return on investment.

Values-driven Leadership

Project Enterprise, our culture

transformation programme, was launched

in 2006 and has realised signifi cant

results. It aims to inspire employees to

experience and emulate the change in

behaviour and style evidenced by their

leaders. Future activity will focus on

assisting leaders to achieve effective

culture change in day-to-day business

decisions.


While our strategic direction remains generally consistent, we have aligned it to changes in our increasingly global business environment.

Foundational pillar

We endeavour to be an employer of choice by paying competitive, market-related salaries and wages, creating safe, healthy and rewarding workplaces and promoting positive corporate values. We invest signifi cantly in skills development and training, focused leadership development and succession planning, to ensure a pipeline of talent to meet our strategic objectives.

We continue to grow our existing production, focused on achieving a world-class safety record and moderating our environmental impact by achieving our stated targets for emissions reductions, and by improving energy effi ciency. We seek to continuously improve the effi ciency and reliability of our operations.

As a proud South African company, we view black economic empowerment (BEE) as a moral obligation and a business imperative. We subscribe to the Code of Good Practice for Broad-based Black Economic Empowerment. Our broad-based BEE verifi cation certifi cate, issued on 4 September 2010, confi rmed our level 4 contributor status, with a 100% procurement recognition level. As Sasol is recognised as a value-adding enterprise, customers receive R1,25 preferential procurement recognition for each R1 they spend with Sasol group companies.

Develop and empower our peopleContinuously improve and grow our existing asset base

Deliver on the South African transformation agenda



pp 10-11

Sasol presents a clear articulation of strategy including the objectives, imperatives and business principles. Sustainability is integrated into this discussion both in terms of the presentation of the overall goal and principles which underpin the strategic direction of the Company.


26 | Business review: strategy www.xstrata.com | 27

Overview

Strategy

Performance

Governance

Financials

Strategy

Strategy to deliver superior shareholder value For more information on our business modelp24

Our mission: We will grow and manage a diversified portfolio of metals and mining businesses with the single aim of delivering industry-leading returns for our shareholders.

We can achieve this only through genuine partnerships with employees, customers, shareholders, local communities and other stakeholders, which are based on integrity, co-operation, transparency and mutual value-creation.

Growing our business through the opportunistic identification and execution of value-adding bolt-on or transformational acquisitions.

Delivering the next phase of transformation of Xstrata’s portfolio through our industry-leading pipeline of organic growth projects.

p28

Continuously improving the quality of our assets through year-on-year operating cost reductions, mine life extensions and productivity improvements. Operating in line with leading practice social and environmental standards.


Organicgrowth

Mergers and acquisitions

Evolution of Xstrata’s strategy

Initially, Xstrata’s strategy was focused on the execution of transformational and bolt-on acquisitions to rapidly add diversity and scale to the Group. A second stage focused on improving the operational, safety and environmental performance of acquired assets. While we continue to pursue value creation through M&A and operational excellence, our strategy is now focused on delivering the next stage of Xstrata’s growth from the range of organic growth projects within our portfolio. Each of these strategic thrusts relies on our ability to operate responsibly and to secure broad-based support for our operations from the communities in which we operate.

Strategic priorities Progress in 2010 Key performance indicators

Develop our portfolio of significant organic growth projects to deliver new production on time and on budget

■ Three major new mines successfully commissioned in 2010

■ 10 projects approved and entered implementation with capital spend of $10 billion, 20 projects currently in construction

■ $7.5 billion of project approvals due in 2011

■ Targeted 50% volume growth over 2009 levels by end 2014

■ 20% reduction in operating costs by end 2014

Achieve further improvements to the net present value of our business

■ Record real cost savings of $541 million from efficiency initiatives and new, lower cost production

■ Increased copper mineral resources at Antapaccay, Collahuasi, El Pachón, Frieda River and Las Bambas

■ Real cost savings (see page 37)

■ Increase in average mine life: 50+ years in 2010

■ Increase in total mineral resources: up 60% on 2006 levels in 2010

Improve our health and safety, environmental and social performance and, in particular, to operate a fatality-free business

■ Three fatalities at managed operations in 2010

■ 20% reduction in total recordable injury frequency rate (including contractors)

■ Corporate social involvement of $81.3 million (cash) and $2.5 million (in-kind)

■ Zero fatalities

■ Total recordable injury frequency rate (see page 38)

■ Environmental incidents (see page 39)

■ Corporate social involvement (see page 41)

Retain key personnel and offer our people a rewarding and non-discriminatory workplace with development opportunities

■ 7.1% voluntary turnover in 2010, 11% higher than 2009

■ Accelerated leadership development programme continued across Group

■ Career development processes in place across the Group including annual performance reviews

■ Voluntary turnover (see page 41)

■ Training spend and hours per employee (see page 41)

Maintain a robust and appropriate capital structure

■ Extension of bank facilities through $4 billion syndicated loan with no financial covenants

■ Increased headroom of $8.7 billion

■ Cash generation from operations of $9.95 billion

■ Net debt reduced to $7.6 billion

■ Gearing (net debt / net debt + equity)

■ Cash generation from operations (see page 3)

■ Net debt position

Identify and execute opportunities to create value through acquisitions, divestments, mergers or strategic partnerships

■ Acquisition of Sphere Resources (iron ore projects in Mauritania); majority ownership secured, integration underway

■ Completion of divestment of El Morro to New Gold

■ Successful integration of acquired assets, realisation of anticipated synergies (if applicable)

For more information on key performance indicators p36

How we achieve our strategy

Annual Report 2010


Sustainable value


Xstrata2010 Annual Report


pp 26-27

Xstrata has made a significant attempt to link their strategic objectives, priorities and KPIs in this spread. ‘Operational Excellence’ is the objective which incorporates the environmental and social issues as priorities and KPIs. Clear signposting is provided to lead the reader to further relevant information.



Overview

Performance


and operationsG


entsA


Group strategy continued

Technology and innovation

Innovative technologies will lead to dramatic improvements

in our operating business and the way we develop new mines.

These technologies can also put us ahead of the competition.

An example of this is Rio Tinto’s Mine of the Future™ programme,

which we believe will deliver heightened effi ciencies in terms of

both production and costs, as well as a safer working environment

with reduced impact on the environment.

Mine of the Future™ involves collaborative partnerships with leading

universities and equipment producers to expand the potential of

automation and remote operations.

The Group takes the threat of climate change seriously. Technological advances are enabling us to improve the effi ciency of our aluminium smelting facilities while lowering their carbon output. We are also looking into the potential benefi ts of widespread carbon capture and sequestration.

In the long term our commitment to technology and innovation should have a positive impact in attracting new employees to the Group and should help us supply a wider range of customers and markets more sustainably than ever.

Key performance indicatorsRio Tinto uses a number of key performance indicators (KPIs) to monitor our fi nancial and non fi nancial performance.

Such advances have enabled the opening of the Perth Operations Centre from which Rio Tinto people can control iron ore mining and infrastructure at our Pilbara operations, more than 1,000km away.

Another key focus of Group innovation is underground tunnelling and shaft sinking. At our Northparkes copper and gold mine in Australia we will test a system designed to allow us to excavate at more than double the rate of conventional methods. Success there will enable us to apply the technology for the next generation of block cave mines. This will increasingly be a strategic differentiator, as future ore deposits, especially copper, are often located at deeper depths.

These KPIs are a measure of how well we are achieving our strategy, and they link clearly to our strategic drivers.

Our KPIs give senior management a means to evaluate the Group’s overall performance in operations, growth and sustainable development. They provide managers and their teams with clarity and focus on areas critical to our success.

The KPIs also give guidance to the Remuneration committee in framing our remuneration policy. Some of the KPIs are directly linked to executive remuneration.

See p.22 for more information on our KPIs.

Delivering our strategy –

adding value across the cycle

We create and preserve value through

investing in and operating large scale,

long term, cost competitive mines

and businesses. The nature of our

business means that the lifecycle of

an orebody may last for many decades.

Throughout the life of a business, from

initial exploration to fi nal closure and

restoration, we commit to the highest

standards of sustainable development.

Mine

Rio Tinto moves millions of tonnes of material every day. We have world class technologies and processes to plan, operate and maintain our mining equipment and activities.

Process

Our leading proprietary technologies, such as that for aluminium smelting, ensure that recoveries are maximised and our processes are as effi cient as possible. We produce material that is of the right quality for our customers.

Market

We sell our products directly to our customers, the end users. We seek out long term partnerships to maximise product value and constantly create new products that add further value.

Deliver

In many cases, Rio Tinto is responsible for delivering fi nished product to our customers. We do this in a variety of ways, effi ciently, reliably and cost effectively.

Explore and evaluate

Rio Tinto has an experienced in-house exploration team with a proven track record for the discovery of Tier 1 orebodies. In addition to exploration, we create value through expansions and extensions of existing assets. Rio Tinto’s orebody knowledge process allows us to evaluate value enhancing approaches to developing, operating and growing our resources.

More information on page 62

Develop

Rio Tinto develops orebodies with long term value delivery in mind. Following the discovery of a resource, it must be thoroughly studied to identify the optimal confi guration for development of the orebody and delivery of the product to the market. As studies are undertaken, economic modelling confi rms value. Once we have obtained internal and external approvals, the project moves to implementation and construction.

Operate

Rio Tinto creates value through operating its large, long term, cost competitive assets safely and effi ciently. As a capable, global organisation, we employ standard operating and maintenance practices across the Group, and invest in our world class assets throughout their lifecycles. An effi cient process reduces the use of consumables, increases equipment operating time and optimises the extraction of ore – all of which results in higher production levels, reduced costs and optimisation of value.


Close down and restore

When a resource reaches the end of its life, we are committed to high standards of close down and restoration. Integrating closure planning in the early stages of project development and through an asset’s lifecycle helps us to leave a positive legacy of sustainable development, minimise fi nancial impacts and ensure stakeholder expectations are met. Our closure standard covers the design, development, operation and closure of all our operations.


Investing Operating

Bunder, IndiaAnalysing drill core samples at the diamond project in Madh ya Pradesh.

Oyu Tolgoi, MongoliaMine shaft construction at the copper-gold mine.

Barneys Canyon, USRehabilitating waste rock dumps into a wildlife habitat.

World class assetsIron ore loading facility, Western Australia.

Leading technologiesOperations centre in Perth, Western Australia.

Global presence Serving customers worldwide.

Infrastructure network Transporting products from mine to market.

2010 Annual report


forStriving




pp 20-21

Rio Tinto present their strategy and strategic objectives before this spread which discusses in detail how they deliver their strategy. The Company’s responsible attitude towards sustainable development comes across throughout the overview of the investing and operating areas of the business.


Below the Executive Board, the levels involved include the Risk Management Board, which

among other attributions defines the guidelines, resources and targets that guarantee the good

functioning of risk management and promotes integration of risk management with Fibria’s

management and planning cycles; the Risk Management Department that, among other

attributions, prepares the plans and ensures implementation of risk management, taking into

account all of the dimensions of the defined structure, which encompasses strategic, tactical and

operating activities, evaluates the Company’s risks per business unit and portfolio, recommends

the limits for each one of the risks to the Audit Committee in a manner that is consistent with

the strategic objectives and tolerance to the defined risks, ensures maintenance of the risk

management policy and checks up on compliance with the established limits; the business

and functional area managers, who identify and manage the risks in their respective areas

according to the mitigation strategies and implement the plans, following up with corrective and/

or preventive actions; and the corresponding business and functional areas that interface

with the Risk Management Department.

Anonymous communication – Fibria operates communication channels that are accessible

to both internal and external public. The issues referring to the Code of Conduct, sent through

these channels, are dealt with impartially and transparently, with a guarantee of confidentiality

of information and preservation of the identity of the persons involved, seeking to foster a better

business environment for everyone. Fibria established the figure of the Ombudsman, who is

nominated by the Board of Directors and confirmed by the Executive Board of Officers, who

regularly submits reports to the Audit Committee, to the outside auditors and to management

itself.

Through the Office of the Ombudsman it is possible to clarify doubts of interpretation and

to submit denunciations regarding failure of compliance with the Code of Conduct, such as

corruption, bribery, fraud, environmental aggressions, false information, inadequate accounting

practices, inappropriate use of the Company’s assets, racial, color, religious, gender, physical or

social discrimination and anti-ethical behavior and procedures.

Fibria’s Code of Conduct was published in 2010. In 2009, VCP’s and Aracruz’s Communication

and Ombudsman channels prevailed, linked to their respective Codes of Conduct. During 2009,

52 cases were dealt with by the Ombudsman channels, distributed by type: management

attitudes, behavior and moral harassment (44%), suppliers (13%), Company property (11%),

the environment (10%), conflicts of interest (8%), workplace health and safety (6%), customers

(4%), communities (2%) and the use of electronic information systems (2%).

27Fibria I Sustainability Report I 2009 26

Management Systems

MA

NAG

EMEN

T A

ND

STR

ATEG

IES

Fibria’s management indicators derive from the objectives presented in the Company’s strategic

map, which was prepared using the Balanced Scorecard methodology.

The management of Fibria’s indicators is based on the concept of management by goals (MBG).

Using this management system, the long-term strategic plan is translated into targets and short-

term measures for the economic, social and environmental dimensions.

Develop the renewable forest business as a sustainable source of life

To consolidate planted forests as producers of economic value and to generate admired profit, coupled with environmental conservation, social inclusion, and improvement in the quality of life

To ensure the growth and development of

the businesses

To guarantee continuous investment in inno-vation, as a way of maintaining the competiti-

veness of the businesses

To develop an effective business intelligence in order to anticipate opportunities and

minimize business risks

To ensure operational excellence of processes

To develop alliances that lead to implementation of the Company’s

strategy

To attract and retain qualified and committed human resources

To develop leaders capable of meeting the needs of the organization’s level of complexity

To offer socially and environmen-tally responsible products and

services

To offer new, competitive appli-cations for the forestry base

To be accepted by our stakeholders through constructive and long-lasting

relationships

To maximize the returns of the organization’s

assets

People

Internal Processes

Market

Sustainable Value

Mission/Vision

DIMENSION STRATEGIC OBJECTIVES

To guarantee a better level of service according to each

market segment

�

�

�

�

GUIDELINE +

+ + STRATEGY

TARGET

MEASURES

DeadlineValueObjetcive

�

202020220000000000999990909099999990999999999909999Sustainability Report

Fibria2009 Sustainability Report

Basic MaterialsBrazil

pp 26-27

All of the group strategy elements are clearly illustrated diagrammatically with the overall sustainability goals outlined in conjunction with the financial objectives of the business. The Group’s management structure for delivering on the strategy is also explained including how the different internal stakeholders report to each other.


10 Tullow Oil plc 2010 Annual Report and Accounts www.tullowoil.com 11

1

Operating cash flowbefore working capital

$762 million

1009080706

1,000

800

600

400

200

0

762

588

987949

822

Working interest production

58,100 boepd

1009080706

80,000

60,000

40,000

20,000

0

58,10058,300

66,600

73,100

64,720

Cash operating costs per boe

$12.5 per boe

1009080706

14

12

10

8

6

4

2

0

12.512.4

11.611.6

8.9

Total Shareholder Return (TSR)

(3%)

10

09

08

0706

100

80

90

50

60

70

20

30

40

10

0

(3)

99

2

66

49

Reserves and resourcesreplacement

1,339%

1009080706

1,500

1,000

1,250

750

500

250

0

1,339

437

1,232

434

173

Lost Time InjuryFrequency Rate (LTIFR)

0.85 LTIFR

1009080706

2.0

1.5

1.0

0.5

0

0.850.76

0.54

1.95

0.81

Staff turnover

1.3%

1009080706

3.0

2.5

2.0

1.5

1.0

0.5

0

1.3

2.0

2.3

1.5

2.5

Directors’ Report: Business review

Key Performance Indicators

Dir

ecto

rs’ R

epor

t: B

usin

ess r

evi

ew

Ke

y P

erf

orm

an

ce I

nd

ica

tors

Monitoring the health of the businessWe measure our progress through seven KPIs that are closely aligned with delivering our strategy.

Cash operating costs per barrel of

oil equivalent (boe) are a function of

industry costs, inflation, Tullow’s fixed

cost base and production output.

Measurement Cash operating costs

are reported monthly on an asset

basis and are monitored closely to

ensure that they are maintained

within preset annual targets.

Risk management A comprehensive

annual budgeting process covering

all expenditure is undertaken and

approved by the Board. Monthly

reporting highlights any variances

and corrective action is taken to

mitigate the potential effects of

cost increases.

2010 Performance In 2010, we set

a baseline target of $13.6 per boe

and a stretch target of $12.9 per

boe. Cash operating costs for 2010

were $12.5 per boe. The bonus

element relating to this KPI, which

is linked to working interest

production, was achieved.

One of our strategic priorities is to

ensure safe people, procedures and

operations. To measure this we have

set Group objectives to deliver top

quartile industry safety performance

and achieve a preset absolute target.

Measurement Throughout the

Group there are rigorous and

consistent incident reporting

procedures in place. These include

analysis, follow-up, remedial

actions and communication of

learnings. EHS is reported to the

Board monthly and annually.

Risk management We have clear

EHS policies and procedures

supported by strong EHS

leadership, accountability and EHS

commitment statements in each

asset and at each level of the

business. EHS is also part of all

operational planning and activities.

2010 Performance In 2010, we did

not achieve top quartile industry

safety performance. We did not

achieve our stretch target but we

did achieve the baseline target of

<1.0 LTIFR. As a result, the bonus

element relating to this KPI was

reduced by 66%.

Tullow has a large requirement

for capital to fund major project

development and a very active

exploration and appraisal

programme. Our goal is to

ensure that operating cash flow

funds a significant proportion of

capital expenditure.

Measurement Operating cash

flow is reported monthly with regular

forecasting for longer periods to

support long-range planning and

investment decisions.

Risk management Strong financial

and operating management,

disciplined monitoring and

reporting, long-range cash flow

forecasting and strong banking

and equity relationships assist

the Group in managing liquidity.

Annual and project budgets require

Board approval.

2010 Performance Realised oil price

was 30% higher in 2010 and this

was the primary driver of a 30%

increase in operating cash flow.

During the year Tullow invested

$1.2 billion; 57% in P&D activities

and 43% in E&A activities. 90% of

the total was invested in Africa.

Our goal is to be the employer of

choice in the industry so that we

attract and retain the best people.

Measurement We have a Board

approved HR strategy and

approximately 5% of the Board’s

time annually is spent on HR

matters. There are systems to

identify issues early and we track

and resolve any issues arising from

our global employee survey. People

who leave us are debriefed so we

can improve our policies.

Risk management Our best way

to avoid a people skills shortage or

unexpected departures is to retain

our entrepreneurial culture. This

allows people to contribute in the

best way possible. It is important

also to recognise and reward staff

appropriately for their contribution.

2010 Performance 1.3% of staff

left the Group in 2010, compared

with 2.0% in 2009. This is another

strong performance for the year,

considering our total permanent

workforce grew by 40% to

1,232 people.

Our strategic objective is to deliver

substantial returns to shareholders

through sustainable long-term

growth. Our overall aim is to create

and share prosperity so that local

communities and wider society in the

countries where we operate see real

returns on our success.

Measurement TSR (share price

movement and dividend payments)

is reported monthly and at year-end

to the Board. The industry peer group

is regularly reviewed.

Risk management The Executive

team is responsible for the execution

of Tullow’s strategy and it is reviewed

annually with the Board as part of

three-year business planning. Being

a well run business, delivering in line

with business plans, being open and

transparent and maintaining strong

capital market relationships underpin

delivery of TSR.

2010 Performance The Macondo

deepwater blowout in the Gulf of

Mexico and the lack of a resolution

to the Uganda tax dispute impacted

Tullow’s share price resulting in

TSR of minus 3%. As neither

TSR absolute performance nor

TSR performance versus comparator

group was achieved, the bonus

element of this KPI was not awarded.

Replacement of reserves

and resources is focused on

continuing to grow the Group’s

production potential.

Measurement A review of each

field is undertaken every two years

by an independent engineer or if

there is significant new data that

indicates a material change to

reserves or resources estimates

on any field in the interim.

Risk management The Group

manages replacement risk by

maximising reservoir performance

in producing fields, through

operational and technical capability

and focused exploration campaigns

that deliver material discoveries.

2010 Performance The Group

achieved 1,339% organic reserves

and resources replacement in 2010.

On a yearly basis we aim to

achieve production in line with the

Group’s annual budget. Part of our

strategy is to grow our production

profile to fund a $500 million to

$700 million exploration programme.

Measurement Daily and weekly

production are monitored from all

producing assets. Production is

reported weekly and on a monthly

basis. Forecast updates are prepared

regularly during the year.

Risk management In mature assets

strong production planning and

monitoring mitigates unplanned

interruptions. First Oil in Ghana

is significantly enhancing our

production profile.

2010 Performance The Group’s

baseline production target for 2010

was 55,900 boepd; the stretch target

was 58,700 boepd. 2010 actual

production was 58,100 boepd and

94% of the bonus element relating

to this KPI was awarded.

The bonus element of the Executive Directors’ remuneration is linked to LTIFR, working interest production, cash operating costs per boe and TSR. Other KPIs relating to bonus remuneration include finding costs per barrel, specific finance and portfolio management objectives and key project milestones for Ghana and Uganda.

p20 For more information on Our strategy

p42 For more information on Risk management

p86 For more information on Remuneration

For all the latest news and results visit: www.tullowoil.com

Non-financial Financial

Tullow Oil plc 2010 Annual Report and Accounts

Africa’s leading independent oil company

Tullow Oil2010 Annual Report

Oil & GasUnited Kingdom

pp 10-11

Tullow Oil presents both financial and non-financial KPIs and, as well as providing trend data for each, there is reference made to risk management for each KPI. An interesting element of this example is the direct link made from some KPIs to Directors’ remuneration: one of the ‘non-financial’ KPIs – LTIFR – is one of the influencing factors of the bonus element of the remuneration package.

Performance – material or immaterial?

There ought to be a balance between financial and non-financial information in the Annual Report, thereby demonstrating that each issue reported on is of material importance to the company.


BASF2010 Annual Report


pp 90-91

BASF report in a stated triple bottom line approach throughout. In reporting their performance, they report on specific topics including those shown in this example such as social commitment and environmental, safety and security management. In these sections of the report, BASF use data charts to present quantitative figures but also describe the performance in more detail throughout the narrative.


MEASURING OUR PERFORMANCEKEY INDICATORS

STRATEGIC ELEMENTS KPI TARGETS

Investing

In world class assets in the most attractive commodities

Total shareholder return (TSR) Share price growth plus dividends reinvested over the performance period. A performance period of three years is used and TSR is calculated annually

Return on capital employed (ROCE) Total operating profit before impairments for the year divided by the average total capital less other investments and adjusted for impairments

Capital projects and investment Optimise the pipeline of projects and ensure that new capital is only committed to projects that deliver the best value to the Group on a risk adjusted net present value basis

Underlying earnings per share Underlying earnings are net profit attributable to equity shareholders, adjusted for the effect of special items and remeasurements and any related tax and non-controlling interests

Organising

Efficiently and effectively Asset optimisation (AO) Sustainable operating profit benefit from optimised performance of the asset base of the core businesses

Supply chainOperating profit and capital spend benefits to the Group resulting from centralised procurement from core businesses

Operating

Safely, sustainably and responsibly

Work related fatal injury frequency rate (FIFR) FIFR is calculated as the number of fatal injuries to employees or contractors per 200,000 hours worked

Lost time injury frequency rate (LTIFR) The number of lost time injuries (LTIs) per 200,000 hours worked. An LTI is an occupational injury which renders the person unable to perform his/her duties for one full shift or more the day after the injury was incurred, whether a scheduled workday or not

Energy consumptionImprovements in energy efficiency are measured from a 2004 baseline

Greenhouse gas (GHG) emissions Reduction in CO2 emissions per unit of production is measured from a 2004 baseline

Total water use Total water use includes only water used for primary activities

Corporate social investment Social investment as defined by the London Benchmarking Group includes donations, gifts in kind and staff time for administering community programmes and volunteering in company time and is shown as percentage of profit before tax

Enterprise development Number of companies supported and number of jobs sustained by companies supported by Anglo American enterprise development initiatives

Employing

The best people Voluntary labour turnover Number of permanent employee resignations as a percentage of total permanent employees

Gender diversity Percentage of women and female managers employed by the Group

Voluntary HIV counselling and testing (VCT)Percentage of employees in southern Africa undertaking voluntary annual HIV tests with compulsory counselling support

(1) $1 bn of sustainable operating profit benefit from core businesses by the end of 2011.(2) $1 bn of operating profit and capital spend benefits from core businesses by the end of 2011.


OPERATING AND FINANCIAL REVIEW: Key performance indicators

We measure performance against the four strategic elements of our strategy through Group-wide targets and improvement measures.

200914.4%

24.8%2010 2010

$4.13

2009$2.14

RESULTS AND TARGETS

Page 16 Return on capital employed (ROCE)

Underlying earnings per share Capital projects and investment A summary of the Group’s capital projects and investments can be found on pages 18 to 19

Total shareholder return (TSR) Please refer to the Remuneration report on pages 98 to 109

Page 20 Asset optimisation (AO)2009 $749 million

2010 $1,548 million

Target $1 billion by 2011(1)

Supply chain2009 $445 million

2010 $713 million

Target $1 billion by 2011(2)

Page 24 Work related fatal injury frequency rate (FIFR) 2009 20 fatalities, 0.010 FIFR

2010 14 fatalities, 0.008 FIFR

Target Zero fatal incidents

Lost time injury frequency rate (LTIFR) 2009 0.76

2010 0.57

Target Zero incidents –

the ultimate goal of zero

harm remains

Energy consumption2009(3)(4) 102.1 million GJ total energy used

2010 100.7 million GJ total energy used

Target A 15% intensity reduction

by 2014

GHG emissions2009(4) 19 Mt CO2 equivalent

2010 20 Mt CO2 equivalent

Target A 10% intensity reduction

by 2014

Total water use 2009(4) 125.3 million m3

2010 115.2 million m3

Target Under revision

Corporate social investment2009 $82.5 million, 1.9% of profit before tax

2010 $111 million, 1.3% of profit before tax

Enterprise development 2009 Businesses supported: 3,720

Jobs sustained: 12,982

2010 Businesses supported: 9,392


Target Businesses supported: 3,500


Page 32 Voluntary labour turnover 2009 6.8%

2010 5.3%

Voluntary HIV counselling and testing (VCT) 2009 82%

2010 94%

Target 95% VCT in high disease burden countries (100% is the long term goal)

Gender diversity2009 12% females, 19% female managers

2010 14 females, 21% female managers

(3) The 2009 figure was revised since the publication of the 2009 Annual Report after amendments in accounting methodologies. It includes operations that have since become independently managed.

(4) Includes businesses since divested.


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Anglo American2010 Annual Report


pp 14-15

The Anglo American report overall is well connected and this spread demonstrates the explicit link made between the strategic aims of the Group to the KPIs, and provides information regarding targets in place and performance against each KPI. This tabular spread also signposts the reader to the location of further information throughout the report.

DELIVERINGREAL EXCELLENCEAnnual Report 2010


Free cash flow before acquisitions Acquisitions

FIVE-YEAR CASH FLOW AND ACQUISITION OVERVIEWDKK million

NIBD (DKK million) Equity ratio (%)

NET INTEREST-BEARING DEBT (NIBD) AND EQUITY RATIO% DKK million

Free cash flow before acquisitions came to DKK 998 million in 2010, against DKK 839 million in 2009. The increase was the result of higher operating cash flow, which benefited from higher net profit and a relative improvement in net working capital, but was reduced by higher net investments.

Acquisitions amounted to DKK 23 million in 2010 and related to the acquisition of the Brazilian company Turfal in August.

Balance sheet and Statement of shareholders’ equity Shareholders’ equity was DKK 7,836 million at December 31, 2010, up from DKK 5,841 million at year-end 2009. Shareholders’ equity was increased by comprehensive income and decreased by dividend payments of DKK 359 million. Shareholders’ equity represented 62% of the balance sheet total, against 54% at year-end 2009.

Net debt-to-equity was 4% at December 31, 2010, against 16% at year-end 2009.

Return on invested capital (ROIC), including goodwill, was 22.2%, against 20.3% in 2009.

At December 31, 2010, the holding of treasury stock was 2.1 million B shares, equivalent to 3.2% of the total number of shares outstanding.

Utilization of resources

Water and energy consumption are key indicators of efficiency and environmental impact related to the utilization of resources. We therefore implemented a set of efficiency indexes with targets for relative improvement for 2015 compared to 2005. For water the 2015 target is to improve efficiency by 40% and for energy by 50% compared to 2005.

The realized improvement in water efficiency in 2010 was 29% and for energy efficiency 30%, compared to 27% realized improvements for both in 2009. Thus we are well on our way to meet the long-term targets.

Climate change impact

It is important for Novozymes to be able to position our enzyme technology as part of the solution to address climate change. At the same time we also need to consider our own carbon footprint. Accordingly, Novozymes has set a 2015 efficiency target to improve CO2 efficiency by 50% compared to 2005. With an improvement of 38% in 2010, compared to 24% in 2009, we improved our CO2 efficiency by 14 %-points. This was a result of the implementation of several projects, including an increased share of purchased electricity from wind turbines.

We also set a target for global reduction of CO2 emissions based on LCA studies. With a calculated reduction of 40 million tons for 2010 through our customers’ application of our products, we achieved a considerable improvement compared to 2009 as a result of improved product performance as well as a positive product mix, with increased sales volumes of products with a high CO2 reduction potential.

Stakeholder engagement

Sustainability is key in our engagement and dialogue with stakeholders. In 2010, the goal for our work on supplier performance management and sustainability management was a Gold Class rating in the Sustainability Yearbook.

Having worked dedicatedly to cover more and more of our purchasing with our supplier performance management system introduced in 2009, the target for 2010 was to establish action plans for all suppliers with performance issues. This target was met with 168 action plans developed, of which the majority have resulted in engagement with suppliers to resolve commercial, quality, and sustainability issues. For 2011, we do not have a quantitative target for our supplier performance management, but since this is still one of our focus areas, we will continue working on improving our suppliers’ sustainability performance. Focus areas in 2011 will include further sustainability training of purchasers and supplier auditors. We will also initiate an

18 REPORTFinancial and sustainability discussion

NET INVESTMENTS*

% MDKK

Net investments (DKK million) Net investments (% of sales)

* Net investments are excluding acquisitions

FREQUENCY OF OCCUPATIONAL ACCIDENTS

Occupational accidents per million working hours

Routine activities Total

* The split between routine and nonroutine activities is not available for 2006

assessment of the raw materials with the greatest environmental impact in order to identify areas for improvement in raw material sourcing. Furthermore, the system will be used to advance specific supply chain engagement initiatives.

To be able to adequately respond to stakeholders’ needs and expectations, we need to know how partners, investors, employees, customers, NGOs, etc. evaluate our sustainability management performance. Analysts and rating agencies continuously assess the overall sustainability performance of companies, and we use the most valid ratings to compare ourselves with our peers. Our rating from Dow Jones Sustainability Indexes and the underlying evaluation completed by Sustainability Asset Management (SAM) were our yardsticks when formulating the target for 2010 to obtain a Gold Class rating from SAM in the Sustainability Yearbook. This target was reached, and Novozymes maintained our position as leader in the biotech sector.

Compliance and complaints

We do not have targets for compliance and complaints, but we make efforts to comply with regulations and to minimize complaints. In 2010, 36 breaches of regulatory limits were registered worldwide. Of these, 31 were related to pH in wastewater or concentrations of polluting substances in wastewater.

In 2010, HFC emissions increased to 1,532 kg, compared to the usual maintenance level of around 550 kg. This was mainly due to a technical breakdown at one of our sites in the US.

Novozymes received 21 complaints from neighbors in 2010, with the majority being related to odor and noise from nearby factories. By way of comparison, we received 33 complaints in 2009.

Novozymes always strives to avoid significant spills such as the release of chemicals into watercourses or soil. There were no significant spills in 2010.

In 2003, high nitrate levels were found in the groundwater around Novozymes’ site in Franklinton, North Carolina, USA. Subsequent measurements were submitted to the authorities in early 2008. The data are still under review by the authorities.

Employer performance

The target for employee turnover was defined as a range between 4% and 9%, reflecting the present job market and Novozymes’ aim to attract and retain employees. With a realized employee turnover of 7.5% for 2010, this target was met.

Every year, Novozymes’ employees have the opportunity to express their opinions in our People’s Opinion survey. Employees’ satisfaction and motivation, as measured by the survey this year, reached a score of 76 and thereby exceeded the target of 75. Asked to rate opportunities for professional and personal development, our employees gave a score of 73 this year, which is above the company target of 70. Thus both targets were reached.

The 2010 target for absence from work was a rate of below 3%. With a rate of absence of 2.1%, this target was achieved.

The frequency of occupational accidents in 2010 decreased to 4.1 accidents per million working hours from 5.1 in 2009. As the target was a frequency below 4.5, the target was met. The majority of the accidents were related to routine activities. In 2010, we implemented a program called “Dare to Care” at all major sites with the purpose of fostering an attentive and caring culture to safeguard everyone’s safety and well-being at work. The program uses observations of work operations and feedback as a tool for eliminating hazards and improving our safety behavior.

19 REPORTFinancial and sustainability discussion

THE NOVOZYMESREPORT 2010

Novozymes2010 Novozymes Report

HealthcareDenmark

pp 18-19

Novozymes have moved from providing a traditional financial performance discussion to presenting a ‘financial and sustainability discussion’ which includes quantitative data for all the business’s material issues.

76naturaannualreport

CREATION OF SOCIAL VALUEIn 2009, we once again increased the creation and distribution of wealth to our stakeholders: employees, suppliers, consultants, shareholders and government - to the latter by paying taxes.

The increase in the amounts distributed is the result of several factors that arise from the strength of the market in which we operate, the consistent results due mainly to our strategy of growth in Brazil, and the more robust development of our operations in Latin America.

DISTRIBUTION OF WEALTH (R$ MILLIONS)¹

2007 2008 2009Shareholders2 391.1 425.9 551,.9Consultants 1,722.1 2,023.8 2,302.5Employees 390.3 556.4 643.0Suppliers 2,329.7 2,357.2 2,687.6Government 948.3 1,276.7 1,547.3

1. Due to changes in many accounting practices by various bodies, we recalculated the amounts for government in 2007, and for other stakeholders, except for consultants, in 2008. 2. The amounts reported correspond to dividends and interest on capital that were effectively paid to shareholders, that is, calcu-lated on a cash basis. As a result, the historical data was changed.

According to a survey carried out by Ipsos Insight in 2009, 46% of the NCs belong to the social-economic class B and 43% to the C social class. For 70% of the NCs, the activity of Natura consultant represents an income supplement and, for 22%, it is the only source of income. Most of NCAs, however, most of them, 53%, are from the B social class. For 49% of the Natura Consultant Advisers, the activity represents the only source of income.

INVESTMENT MATRIXIn 2009, we maintained the same proportion of 1.2% of investments in corporate responsibility in relation to Natura’s Net Revenues. Among the benefiting stakeholders who recorded a more significant increase are consultants, with an increase in investments in educa-tion and training (more information on page 41), and society, particularly due to the increase in investments in sponsorships and projects of civil society partners (see the next page). In envi-ronment, the highlights were once again the projects for offsetting greenhouse gas emissions selected by the Carbon Neutral Program.

On the other hand, we saw a reduction in the resources used in management due to the restruc-turing process Natura undergone in 2009.

MATRIX FOR INVESTMENT IN CORPORATE RESPONSIBILITY 1 (R$ THOUSANDS)

2007 2008 2009Employees, families, and third parties 19,084.0 18,729.3 17,251.3 Consultants 1,801.4 2,566.8 3,563.4 Consumers 468.3 270.9 480.3Suppliers 232.3 212.8 243.8Supplier communities² 1,993.1 647.0 1,424.6 Surrounding communities 391.5 342.8 407.9 Society3 7,058.7 8,777.4 15,672.0 Environment 1,849.09 5,467.2 8,073.6 Total invested in stakeholders 32,878.2 37,014.2 47,117.0 Management expenses 9,591.9 7,148.3 4,045.7Total Natura funds 42,470.1 44,162.5 51,162.7

WHAT FOOTPRINT WE LEAVE

77naturaannualreport

2007 2008 2009Percentage of net revenues 1.4% 1.2% 1.2%in the Crer para Ver (Believing is Seeing) program4 Invested tax incentives – Roaunet Law 2,484.8 3,767.0 3.768,2 Incentivos fiscais investidos Lei Roaunet 2,059.5 2,852.8 2.422,2 Audiovisual Law 1,098.0 400.0 920,0 ICMS (state Value-Added Tax) in Minas Gerais 2,101.6 2,000.0 645,0 ICMS (state Value-Added Tax) in São Paulo 814.3 540.7 01% Income Tax to CMDCA 5 227.0 0 938.01% Income Tax to Condeca 6 445.0 1,015.0 0 Grand total 51,700.3 54,738.0 59,856.0

1. The amounts invested in support and sponsorships are also taken into consideration in this matrix, but they are split among the benefited stakeholders. The matrix includes investments in projects or actions that are not intrinsic to Natura’s business and go beyond legal requirements. 2. The amount for 2007 was recalculated, excluding the amount related to the sharing of benefits, which is presented in the table on page 50. 3. We verified that, in general, the end stakeholder benefiting from these investments is society. The amounts allocated to the government are listed as tax investments in this table and also in the distribution of wealth table. 4. For further information, please see the text on the Crer para Ver (Believing is Seeing) Program. 5. CMDCA - Municipal Council for the Rights of Children and Adolescents of the municipalities of Cajamar, Itapecerica da Serra, Matias Barbosa, Canoas, Benevides and Jaboatão dos Guararapes. Since 2008, 1% of income tax has been transferred to Condeca. 6. Condeca - State Council for the Rights of Children and Adolescents of São Paulo..

CRER PARA VER (BELIEVING IS SEEING)Considered one of our high priority sustainability topics, education is a decisive factor for the development of a fairer society and one of the most effective mechanisms to change our world. To improve the quality of public education, we created in 1995 the Crer para Ver program.

Our consultants actively participate in the program as they sell, without making any profit, exclu-sive products of the Crer para Ver line. The total amount raised is invested in educational projects developed in public schools that focus mainly on encouraging reading and writing.

In 2009 we reached our target for funds raised in Brazil, which was R$ 3.744 million, and we added R$ 3.768 million that were allocated to the fund of the Crer para Ver program.

INVESTMENT IN EDUCATION FOR PUBLIC BENEFIT IN BRAZIL (R$ THOUSANDS)

2007 2008 2009Net funds raised from the Crer para Ver¹ 2,487.8 3,767.0 3,768.2Total amount from the projects developed and supported by the Crer para Ver2 4,330.0 3,381.0 4,075.6Penetration of the Crer para Ver (% cycle)3 8.2 9.9 7.1

1. Net funds raised refers to the net income of the program after deducting income tax. 2. The total amount from the projects refers to the total actually invested in the year (withdrawn from the fund and used in the projects). 3. Penetration is the indicator of the percentage of consultants who participate in the program divided by total potential consul-tants. Penetration data was considered until Cycle 18.

At the end of the year, our penetration was 7.1%. The drop in this rate led us to make some adjustments. In order to mobilize consultants, we started in 2009 to implement a new strategy to reposition the brand and develop products, making the Crer para Ver line more attractive, which will bear fruit in 2010.

In 2009 we extended the Crer para Ver program to the other Latin American operations, directing the focus of private social investment actions to education, and benefiting non- governmental organizations and local institutions. The net funds raised from the sale of products from the Crer para Ver line in Latin American operations totaled R$ 430,000.

In Argentina, where the program has been carried out since 2008, we expanded our work to 12 education institutions, 10 more than in the previous year. The countries that started to receive the Crer para Ver (Believing is Seeing) Program’s portfolio of products and to support educational causes include Peru, Colombia and Mexico. The Chilean operations, which were initially focused on the Consultora Natura Empreendedora Social (Social Entrepreneur Natura Consultant) pro-gram, will start to prioritize education from 2010. We will maintain the investment in the Empre-endedora Social program, but independently from the Crer para Ver program.

A N N UA L R E P O RT N AT U R A 2009

Natura2009 Annual Report

Consumer GoodsBrazil

pp 76-77

Natura have made a significant attempt to link sustainability topics to financial impacts of the business thereby demonstrating that these ‘non-financial’ issues are in fact central to the way the business is run. The full Annual Report provides extensive detail on specific material issues and combines qualitative and quantitative information.



Identification of financial and non-financial risk factors demonstrates that management have taken into account the potential impacts of the business activities on the wider world16

BC HYDRO ANNUAL REPORT 2010

Guiding Performance F2008 F2009 F2010 F2010 F2011 F2012 F2013 Principles Measure Actual Actual Target Actual Target Target Target

SAFETY Severity 39 32 23 18.8 20 17 15

(Number of calendar days lost

due to injury per 200,000 hours

worked)

All Injury Frequency 2.8 1.4 2.3 1.2 1.3 1.3 1.2

(Number of employee injury

incidents per 200,000 hours worked)

RELIABILITY CAIDI (hours) 2.24 2.47 2.15 2.28 2.15 2.15 2.15

(CUSTOMER) (+/-10%) (+/-10%) (+/-10%)

SAIFI (frequency) 1.52 1.67 1.27 1.52 1.22 1.22 1.22

(+/-10%) (+/-10%) (+/-10%)

CEMI-4 (%) 8.56 11.57 8.50 13.09 8.00 8.00 8.00

(+/-10%) (+/-10%) (+/-10%)

ELECTRICITY Winter Generation Availability 94.9 96.4 96.3 97.6 96.4 96.4 96.4

SECURITY (SUPPLY) Factor (%)

CLIMATE Clean Energy (%) 94 94 90 93 931 93 93

CHANGE &

ENVIRONMENTAL Greenhouse Gas Emissions 1.50 1.46 1.55 1.31 1.50 1.45 1.40

IMPACT (million tonnes CO2e)

Carbon Neutral Program Emissions 0.0242 0.0273 0.02652 0.0299 0.02602 0.02512 0.0237

(million tonnes)

ENERGY Demand-Side Management 326 983 1,700 1,778 2,3003 3,4003 4,2003

CONSERVATION (GWh/year, cumulative since

& EFFICIENCY F2008)

CUSTOMER CSAT Index (% of customers 90 90 80 90 83 83 83

SATISFACTION satisfied or very satisfied)

Billing Accuracy (% of 98.5 98.5 98.2 98.5 98.2 98.2 98.2

accurate bills)

First Call Resolution (% of 71 75 71 74 71 71 71

customer calls resolved first time)

PEOPLE Vacancy Rate (%) 8.7 6.9 8.0 5.5 N/A4 N/A4 N/A4

Employee Engagement5 (%) 51 62 N/A N/A5 62 N/A6 64

A LOOK BACK ON PERFORMANCE FOR FISCAL 2010

HOW WE MEASURE OUR PERFORMANCE

BC Hydro uses a series of measures to guide business performance and progress. Some of these measures are tracked monthly, while

others are tracked quarterly, semi-annually and annually. BC Hydro continues to develop leading measures where practical to

determine if progress on meeting our goals is on track and to identify where adjustments need to be made. Measures are results-based

to provide a more accurate evaluation on our performance. Where possible, we also participate in benchmarking studies to determine

where improvement may be required.

17

BC HYDRO ANNUAL REPORT 2010

Guiding Performance F2008 F2009 F2010 F2010 F2011 F2012 F2013 Principles Measure Actual Actual Target Actual Target Target Target

FINANCIAL FINANCIAL EFFICIENCY

Net Income 369 365 452 447 609 660 640

(After Regulatory Accounts)

($ in millions)

Return on Assets7 (%) 6.5 5.8 5.2 5.2 6.2 6.3 6.2

Return on Regulatory Equity (%) 11.33 11.75 12.54 12.49 14.37 14.37 12.74

EBIT Interest Coverage7 1.85 1.72 1.85 1.96 2.08 2.00 1.80

Debt to GAAP Equity (%) 80 81 80 80 80 80 80

OPERATIONAL EFFICIENCY

Operating Costs8 (non-fuel)/MWh 11.14 13.27 15.43 15.00 N/A N/A N/A

Delivered ($)

Operating Costs8 (non-fuel)/ 8,057 9,251 10,375 9,933 N/A N/A N/A

Transmission and Distribution Line

km ($)

Operating Costs8 (non-fuel)/ 344 387 432 415 N/A N/A N/A

Customer ($)

Operating Cash Flow Post Dividend 47 44 27 57 N/A N/A N/A to Net Capital Expenditure (%)

Transmission and Distribution 8,597 12,317 12,608 11,863 N/A N/A N/A Capital Expenditure/ Transmission and Distribution Line km ($)

A LOOK BACK ON PERFORMANCE FOR FISCAL 2010 continued

1 Reflects the new target ordered in the Clean Energy Act, passed in June 2010.

2 Carbon Neutral Program Emission targets have been recalibrated from the F2010 – F2012 Service Plan to reflect additional data on building emissions.

BC Hydro has been proactively developing programs and initiatives to reduce carbon neutral emissions, including fleet greening, facility improvements

and employee engagement.

3 Demand-side management annual cumulative targets align with the B.C. Energy Plan’s 66 per cent energy conservation and efficiency target and the

Utility Commission Act amendments, which required BC Hydro to pursue all cost-effective demand-side measures. The targets provided here are based

on the 2008 LTAP Evidentiary Update and actual annual results may vary significantly based on the timing and form of new rate structures approved by

the BCUC, customer response to price signals and the timing of adoption of codes and standards regulations. By fiscal 2013, approximately 29 per cent

of the cumulative savings will relate to rate structure changes and 22 per cent to codes and standards.

4 The Vacancy Rate performance measure, which has been used in past Service Plans to measure the number of positions to fill as a proportion of our

total workforce, will no longer be reported as BC Hydro nears its optimal staffing levels, making the metric less important at this time.

5 Employee Engagement was formerly expressed as an overall mean on a five point scale on an Employee Engagement Survey from “strongly agree” to

“strongly disagree”. Effective F2009, Employee Engagement is expressed by overall “percent favourable” defined as the percentage of respondents who

“strongly agree” or “agree” with survey statements. The fiscal 2008 and fiscal 2009 actual scores for Employee Engagement using the previous format

were 3.28 and 3.61, respectively.

6 As of fiscal 2010, the Employee Engagement Survey is performed every two years.

7 The calculation for EBIT has been revised to use Net Income to properly reflect BC Hydro’s income performance and to make the measure comparable

to other companies. Previously BC Hydro used Net Income before regulatory transfers in its EBIT calculation. Prior years Return on Assets and EBIT

Interest Coverage have been restated to conform with the current methodology.

8 Operating costs exclude demand-side mangement, Site C and other regulatory expenditures as these are not related to efficiency, and exclude any fuel

associated with the cost of energy.

BC HYDROANNUAL REPORT2010

BC Hydro2010 Annual Report

UtilitiesCanada

pp 16-17

BC Hydro present an extensive table of company performance with retrospective data and targets for the coming years. Financial and non-financial issues are presented alongside each other demonstrating the holistic view of performance which management take.



46 Tullow Oil plc 2010 Annual Report and Accounts www.tullowoil.com 47

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Directors’ Report: Business review

Risk management continued

Risk KPI Impact

Executive

responsibility Policies and systems Mitigation Progress in 2010

Operational risk

EHS failures and security incident

No significant environmental incidents

LTIFR <1.0 and top quartile industry safety performance

Major event from drilling or production operations impacts staff, contractors, communities or the environment, leading to loss of reputation and/or revenue.

Paul McDade EHS policies, IMS, toes, EMS, crisis management procedures, EHS policy, EHS Leadership Team

EHS performance standards set and monitored regularly across the Group through Business Unit performance reporting. EHS management system implemented. Clear policies and procedures supported by strong leadership accountability and commitment throughout the organisation.

EHS performance measures were met. A process was developed to identify and document significant EHS risks, along with a regular review process to update the EHS risk profile. Crisis management resources and procedures were also upgraded.

A well-ranking process was devised to identify critical aspects and risk areas for the Tullow drilling programme. Mitigation is achieved by focusing on resources to manage risks, applying a portfolio management approach and engaging with the Board and Executive management through risk discussions.

Key development failure

Specific yearly base and stretch targets that reflect key project milestones

Development projects fail to meet cost and schedule budgets, causing returns to be eroded.

Paul McDade IMS, EHS systems and policies, DOA, Code of Business Conduct, risk management process and DLT.

Technical, financial and Board approval required for all projects, and for all dedicated project teams. Risk evaluation and progress reporting initiated for all projects. Project milestone KPIs established for Ghana and Uganda.

Jubilee project was delivered within 5% of the original $3.1 billion budget, and on schedule. First phase of Uganda EA 2 development got under way, with field development plans submitted to the GoU. The farm-down to CNOOC and Total is pending final approval.

Sustained exploration failure

Reserves and resources organic replacement

Full finding costs per barrel

Failure to sustain exploration success limits replacement of reserves and resources, which impacts investor confidence on long-term strategic delivery.

Angus McCoss GELT, competitive capital allocation process, clear exploration strategy

Board approval of E&A programme. Monthly reporting to Board on full finding costs per barrel and high grading of Group’s portfolio, with a view to measuring success of exploration spend.

Continued use of appropriate technologies and technical excellence in exploration methodologies.

Exploration and appraisal success ratio of 83% was achieved. This included discovery of the Enyenra and Tweneboa fields in Ghana, and successful exploration wells in Gabon, Pakistan and Sierra Leone.

External risk

Corporate responsibility

TSR performance The overall political, industry or market environment negatively impacts the Group’s ability to grow and manage its business.

Graham Martin Code of Business Conduct, CR policies

Consistent ethical standards established and applied through Code of Business Conduct, and through contract and procurement procedures. Regular review of compliance requirements with periodic Board reporting.

Compliance Manager was appointed to monitor the application of revised Code of Business Conduct.

Country risk TSR performance Government regulations change rapidly, resulting in expropriation of the Group’s assets and the introduction of burdensome tariffs or taxes. Political changes affect the competitive environment, with political instability and civil disturbances disrupting the Group’s operations.

Aidan Heavey Social Enterprise project selection criteria and guidelines

Stakeholder engagement strategy and plan

Successful relationships with Governments and other external stakeholders built and maintained. Through these relationships, trust is grown, key issues identified and processes improved. Social Enterprise projects aligned with the needs of stakeholders and the business in support of creating shared prosperity.

Detailed stakeholder mapping exercise and planning carried out for stakeholder engagement programme. Community relations teams expanded in Ghana and Uganda. New Social Enterprise project selection criteria developed. New Social Enterprise Committee and terms of reference launched.

Oil and gas price volatility

Realised commodity prices

Volatility in commodity prices impacts the Group’s revenue streams, with adverse effect on liquidity.

Ian Springett Hedging strategy Hedging strategy agreed by Board, with monthly reporting of hedging activity.

Conservative hedging policy implemented, with realised oil and gas prices of $78/bbl and 42 pence per therm. Detailed monthly Board reporting of hedge positions. Board also reviewed and approved ongoing hedging strategy throughout the year.

Hostile acquisition Remaining independent

Hostile acquisition if not handled correctly causes major distraction and value erosion.

Graham Martin Documented defence manual

Robust defence strategies against hostile acquisitions. Effective investor engagement and ongoing open and transparent communications programmes.

Defence strategy was reviewed with key advisers. Independent full-value review of reserves and resources completed.

Tullow Oil2010 Annual Report

Oil & GasUnited Kingdom

pp 46-47

Tullow Oil present an enhanced risk table, identifying clear links between principal risks, group strategy, group KPIs and executive responsibility. The mitigation actions for each potential risk factor are clearly referenced and an interesting element of this example is the articulation of relevant policies and systems in place to deal with these financial and non-financial risks should they occur.

Tullow Oil plc 2010 Annual Report and Accounts

Africa’s leading independent oil company

Risk and opportunities – managing impacts and relationships?


Overview

Performance


and operationsG


entsA


The Group is committed to the effective management of risk through proactive, competent risk management. Effective risk management requires quality risk analysis to inform the decisions taken throughout the organisation. The responsibility for identifying and managing risks lies with Rio Tinto’s managers and business leaders. Risk analysis and management is applied to all facets of the business, by management at appropriate levels, following the principles set out in the Group’s Risk policy and standard.

This standard sets out a uniform process that each area within the Group is required to follow in analysing and managing risk. The process refl ects global leading practice and contains the minimum requirements to ensure consistency and quality across the Group. By providing an overall methodology and structure for

the handling of risk within the organisation, the Group seeks to provide the board and senior management with a consistent, Group wide perspective of the key risks. Reports are submitted to the board twice per year and include assessment of the likelihood, and impact should risks materialise along with risk management initiatives.

During the year, a review of the Group’s approach to managing risk resulted in the introduction of a new risk management committee and the appointment of a new head of Group risk. The risk management committee is chaired by the chief executive and reports to the Executive committee.

The Group provides a central organisation to support the risk standard and wider process, see below.

Risk management overview

Rio Tinto recognises that risk is an integral component of its business, and that it is characterised by both threat and opportunity. The Group fosters a risk aware corporate culture in all decision making. Through skilled application of high quality, integrated risk analysis and management, we manage risk in order to enhance opportunities and reduce threats, and so sustain competitive advantage.

Risk managementManaging risk effectively

Principal risks and uncertaintiesRisk factors

Overview of Rio Tinto’s risk management process

Corporate oversightProvide risk insight and monitoring to key business decisions

Functional business supportProvide risk support, functional expertise and risk specifi c standards

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Risk ownersAccountability and responsibility for effective risk identifi cation and management

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Group assurance

Executive committee

Risk management committee

Group risk Responsible for risk reports, providing risk support to operations, maintaining appropriate risk policy

and standard and providing co-ordination of Group wide risk management activity

Rio Tinto’s business units and functions assess the potential economic and non economic consequences of their respective risks using a predefi ned framework provided by the Group’s Risk policy and standard. Principal risks and uncertainties are identifi ed when the Risk management committee, business unit or function determines that the potential consequences are of suffi cient materiality to be considered signifi cant at a Group level or where the risk triggers a succession of events that in total become material at a Group level. Once identifi ed, each principal risk and uncertainty is reviewed by the relevant internal experts and the Risk management committee.

The following describes all known principal risks and uncertainties that could materially affect Rio Tinto. There may be additional risks unknown to Rio Tinto and other risks, currently believed to be immaterial, which could turn out to be material. These risks, whether they materialise individually or simultaneously, could signifi cantly affect the Group’s business and fi nancial results. The risks outlined below omit detail on how each is managed and mitigated, or how some risks could result in either a positive (upside) or negative (downside) impact. An explanation of the Group’s process for managing these, and all other risks to which it is exposed, is given in the section entitled Risk management on page 24. The principal risks and uncertainties should be considered in connection with any forward looking statements in this document and the cautionary statement on the inside front cover.

External

Commodity prices and global demand for the Group’s products are expected to remain uncertain, which could affect the Group’s business.

Commodity prices and demand for the Group’s products are cyclical and strongly infl uenced by world economic conditions, particularly with respect to key customers, in the US and Asia (notably China). There is potential volatility in short to medium term commodity prices due to persistent economic imbalances. The Group’s normal policy is to sell its products at prevailing market prices and not to enter into price hedging arrangements. The recent improvement in commodity prices and demand for the Group’s products may not remain as strong, which would have an impact on Group revenues, earnings, cash fl ows, asset values and growth.

Continued growth in demand for the Group’s products in China could be affected by future developments in that country.

The Group has signed agreements with almost 50 per cent of its iron ore customers in Asia for pricing on a quarterly basis. This is a shift away from the previous annual benchmark pricing. Sales are being made to other iron ore customers on the same basis.

If a major economic downturn were to occur in China impacting the demand and price for iron ore or the Group’s other products, or if Chinese customers source such products from elsewhere, the Group’s business, fi nancial condition and prospects could be affected.

Rio Tinto is exposed to fl uctuations in exchange rates that could affect its overall business results.

The US dollar is the currency in which the great majority of the Group’s sales are determined. It is also the most appropriate currency for holding surplus cash, fi nancing its operations, and presenting its external and internal results. Although many costs are incurred in US dollars, signifi cant costs are infl uenced by the local currencies of the countries where the Group operates, principally the Australian dollar, Canadian dollar and Euro. The Group’s normal policy is to avoid hedging arrangements relating to changes in foreign exchange rates. Appreciation in the value of these currencies against the US dollar or prolonged periods of exchange rate volatility may adversely affect the Group’s business results.

Political, legal and commercial changes in the places where the Group operates could affect the Group’s reputation, future development opportunities, and/or the viability of its operations.

The Group has operations in jurisdictions with varying degrees of political, legal and commercial stability. Commercial instability in some jurisdictions can be infl uenced by bribery and corruption in their various guises. Political and administrative change, policy reform, and changes in law or government regulation can result in expropriation, or nationalisation. Renegotiation or nullifi cation of existing agreements, leases and permits; changes in fi scal policies (including increased taxes or royalty rates); changes in government ownership of operations; currency restrictions; increased regulation and signifi cantly increased costs or impediments to operation are also possible consequences. Such consequences could have an adverse effect on the profi tability, the ability to fi nance or, in extreme cases, the viability of an operation.

Political instability and uncertainty or government changes to the fi scal terms covering the Group’s operations may discourage future investments in certain jurisdictions. This may have an adverse impact on the Group’s ability to access new assets, potentially reducing future growth opportunities.

Community disputes in the countries and territories in which the Group operates could affect the viability of its operations or its reputation.

Some of the Group’s current and potential operations are located in or near communities that may regard the operation as being detrimental to their environmental, economic or social circumstances. Community expectations are typically complex with the potential for multiple inconsistent stakeholder views that may be diffi cult to resolve. Stakeholder opinion and community acceptance can be impacted by external events beyond the Group’s control, including events that may occur in related industries or similar operations outside of the Group and events relating to the local, regional or national affairs of the places where the Group operates. Furthermore our operations may be a focus for civil unrest or criminal activity. Community reaction could have an adverse impact on the cost, profi tability, and ability to fi nance or even the viability of an operation. Such events could lead to disputes with national or local governments or with local communities and give rise to reputational damage. If the Group’s operations are delayed or shut down as a result of political and community instability, its revenue growth may be constrained and the long term value of its business could be adversely impacted.

2010 Annual report


forStriving




pp 24-25

Rio Tinto have provided a clear report on their risk management processes and governance procedures. The table format on p25 is continued on the following pages and the subheadings include external, strategic, financial, operational and sustainable development risks.


COMPLIANCE PROCESS

AY

S

RISK MANAGEMENT

For a decade now, Novozymes has had a vision of creating value in the broadest sense. We aim to create a cleaner environment, better lives, and better business. The way Novozymes is managed reflects this, as management systems are set up to seek opportunities in all these areas while at the same time reducing risk and ensuring compliance with rules and regulations.

The process of identifying and managing risk is integrated into the management systems at Novozymes. We define risks as “events or tendencies that can prevent the company from achieving its overall targets – including financial, environmental, and social targets – or negatively affect our image or our future results and activities.” Novozymes strives to identify risks as early as possible and, once they have been identified, act and follow up on them.

At the top of the management system, Touch the World sets out the company’s vision, company idea, commitment, and values. It guides us in everything we do and outlines Novozymes’ philosophy. By acting in accordance with these principles, we encourage the right behavior and thereby reduce the risk of misconduct. To ensure that the company lives up to the values in Touch the World, an organizational performance process is conducted annually where the

RISK MANAGEMENT

impact of each business unit’s work to support and uphold the principles in Touch the World is assessed. This process is overseen by Executive Management and the results reported to Board of Directors.

Risks are often related to external factors affecting our achievement of targets, but can also be related to internal procedures, such as errors leading to the misstatement of information, malfunctioning of products, etc. Novozymes strives to minimize these procedural risks through the extensive use of quality management systems and ISO certifications, which include general policies and standards, as well as detailed control and action requirements covering both global procedures and specific requirements dependent on location, business area, and function.

To ensure compliance with quality management systems, a large number of internal quality audits are performed. Each year, a report on compliance with these systems is submitted to Executive Management.

39 MANAGEMENTRisk management

REACH SUPPORTS NOVOZYMES’ BUSINESS STRATEGY REACH (Registration, Evaluation, Authorisation and Restriction of Chemicals) is a European Union (EU) regulation which entered into force in June 2007, replacing some 40 existing EU regulations and directives on chemicals. More than 30 different enzymes need to be registered by 2018 as they are regarded as chemicals under REACH. Novozymes’ enzymes for industries such as detergent, leather, textile, and biofuel require registration.

First mover on registrationNovozymes was the first of the European enzyme manufacturers to register enzymes produced in volumes of more than 1,000 tons per year, which is the first major registration milestone under REACH. The enzyme groups in question are proteases (mainly used in the detergent industry) and glucoamylases (mainly used in the production of starch and fuel).

With the ambition of being the first to submit REACH dossiers, Novozymes took on sole responsibility for assessing the necessary risk and safety data for the enzyme industry as lead registrant. Novozymes has successfully submitted the required data in two comprehensive dossiers representing hundreds of products. These include exposure scenarios documenting adequate control of risks.

Regulatory requirements as opportunitiesNovozymes looks positively on REACH, as the increased focus on sustainable solutions outweighs the increased burden of compliance. One important objective of the regulation is to encourage the substitution of hazardous substances with safer substances or technologies as economically and technically viable alternatives become available.

REACH has the potential to drive innovation and sustainable growth through the replacement of harsh chemicals with safer biological solutions. REACH therefore supports Novozymes’ ambition and business strategy by stimulating customer demand for sustainable solutions, where enzymatic and other biological solutions are key alternatives.

Novozymes is implementing all the requirements of REACH as they come into force in order to ensure uninterrupted supplies to customers. Given the high quality of the safety data and competencies we have developed together with our customers, we are in a good position to deal with the requirements. Novozymes also sees REACH as a great opportunity to implement high global safety standards for enzyme products.

Timely and accurate reporting

Novozymes attaches great importance to timely and accurate reporting, as this is considered key to being a trustworthy company.

Novozymes’ risk management and internal controls relating to financial reporting are designed to facilitate:

� Presentation of management accounts that allow the Group’s performance to be measured, evaluated, and monitored

� Presentation of financial statements that provide a true and fair view without material misstatement, and comply with International Financial Reporting Standards as adopted by the EU, and other additional disclosure requirements for the annual reports of listed companies

Novozymes’ internal controls and risk management systems are updated on an ongoing basis and have been designed with a view to discovering and eliminating errors and defects in the financial statements. However, as there is always a risk of misuse of assets, unexpected losses, etc., the internal controls and risk management systems can only provide reasonable and not absolute assurance that all material errors and defects are discovered and eliminated.

The internal controls and risk management systems also cover environmental and social data in The Novozymes Report.

A more detailed description of Novozymes’ risk management and internal controls concerning the financial reporting process can be found in the statutory report on corporate governance fulfilling the requirements in Section 107b of the Danish Financial Statements Act.

The financial reporting process is monitored by the Audit Committee. As part of this monitoring, all cases of fraud and concerns raised either through the whistleblower system or directly by internal or external personnel are reported to the Audit Committee. Six cases were reported in 2010. Four cases led to the dismissal of employees, of which two were reported to the police.

Fulfilling sustainability reporting requirements

Under Section 99a of the Danish Financial Statements Act, it is mandatory for large companies to report on corporate responsibility. As a member of the UN Global Compact, Novozymes prepares a Communication on Progress that is published in Supplementary Reporting. This Communication on Progress fulfills the requirement for the reporting on corporate responsibility. In addition to this, integrated financial, environmental, and social reporting is included in The Novozymes Report.

Risks, opportunities, and stakeholder engagement

While Novozymes aims to do business in accordance with our values, we also have to stay in touch with the needs of society. One way of identifying risks, opportunities, and new trends, while at the same time living up to Novozymes'

40 MANAGEMENTRisk management



HealthcareDenmark

pp 39-40

Novozymes discuss their risk management processes in a holistic manner, linking the achievement of their overall vision of aiming ‘to create a cleaner environment, better lives, and better business’ to the successful management of risks. There is a clear indication that the risk section includes any ‘events or tendencies that can prevent the Company from achieving its overall targets – including financial, environmental, and social targets’.


Group overview

Management approach continued

Our management approach is based on accountability,

beginning at operational level and culminating at Board

level. Operational committees are tasked with

implementing strategic imperatives to meet set objectives,

while executive committees monitor progress against

these imperatives as well as compliance. They are the

primary facilitators in ensuring the sustainability of the

business in its quest to achieve its goals. Sustainability

objectives are included in the key performance indicators

of senior management, against which performance is

measured and remunerated.

The roles and responsibilities of Board committees are

discussed under governance, pages 136 to 138.

The Sustainable Development Committee is charged with

overseeing the overall performance of the Group’s key

non-financial indicators and supporting Board

committees, such as the SHEQ, Transformation and

Audit and Risk Committees. The Committee oversees

performance against compliance indicators while

continuing to ensure the implementation of strategic

performance objectives.

Through the Executive Committee, performance is

reviewed in line with the strategies employed. This

Committee also advises the Board committees which, in

turn, provide oversight and give input to the review of

strategic imperatives to ensure relevance in the pursuit of

organisational objectives.

Managing sustainability does not take place in isolation,

but is influenced by and considers the primary stakeholders

in our business, such as unions, which are represented in

the management structures of operational committees and

have set agreements in place. Equally, Implats actively

participates in external initiatives related to its industry, for

example the Group served on the government task team

reviewing the mining charter in 2009 and contributed to

policy development. Through other stakeholder groups,

Implats has been involved in the sustainable development

committee of the mining, minerals and development board

of the DMR in providing input to the department’s strategic

focus on sustainability issues.

BOARD

Transformation SHEQRemuneration NominationsAudit and risk

Group executive committees

Operations, people, finance, growth

Group Sustainable Development Forum

Group Management Transformation Committee

Risk Committee

Treasury Committee

EXCOM

Group executive committees

Operational committees

Operational committees

Transformation Operational Committee

Operational/community forums

Operational SHEQ Committees

Sustainable Development Committees

Accountability


Group overview

Strategic risk

objective-based risk assessment to identify and evaluate

risks across the Group.

culminating with the Board Audit and Risk Committee and

the Board.

The Board has ultimate responsibility for establishing a

framework for internal controls, including appropriate risk

management and good corporate governance frameworks

and systems.

Implats has established key controls that focus on critical

risk areas identified by line management, facilitated by risk

management, assessed and evaluated by the internal

audit function. Every critical risk and control, as well as any

associated tasks, have a designated line management

‘owner’. The controls are designed to provide a cost-

effective assurance that Implats’ assets are safeguarded

and that liabilities and working capital are efficiently

managed. Established organisational policies, procedures,

standards, guidelines, structures and delegation

frameworks provide appropriate levels of direction,

accountability and segregation of responsibility, which

facilitate self-checking and monitoring mechanisms.

Internal audit, in partnership with senior management,

monitors these controls and risk management processes

(page 139).

At Implats, our approach to risk is based on contextualising,

identifying and managing risk within a broader understanding

of our objectives and by following a standard process of

Establishing the context includes determining key

objectives, key stakeholders and their interests, and

considering all external and internal factors (from cultural

and perceptual to regulatory and global)

Identifying the risk entails establishing both source and

cause, and evaluating all possible consequences

Analysing risk – what does this mean for our objectives?

Risk evaluation encompasses determining the risk

rating (by severity, exposure and frequency) using

standard Implats tables, identifying controls (existing or

new) and prioritising risks

Treating risk requires considering all options to establish

the most appropriate response for every risk identified

(avoid, change probability of exposure and/or frequency,

transfer, retain)

Ongoing review ensures the risk plan remains relevant.

Factors that may affect consequences and the likelihood of

an outcome, and the factors that affect the suitability or

cost of treatment options may change. Implats therefore

repeats the risk management cycle regularly. All information

is captured into a group risk repository system, feeding

into the Group risk profile. Risk reports are presented to

the appropriate bodies and escalated as required,

SOURCE BASED ON: ISO 31000: 2009, RISK MANAGEMENT – PRINCIPLES AND GUIDELINES, GENEVA: INTERNATIONAL STANDARDS ORGANISATION, 2009

Monitor and reviewHave the risks and controls changed?

Establish

the context

What do we need to take into account

and what are our objectives?

Identify the

risks

What might happen?

How, when and why?

Analyse the

risks

What this will mean for our objectives?

Evaluate the

risks

Which risks need treating and our

priority for attention

Treat the risks

How should we best deal with

them?

Communicate and consultWho are our stakeholders, what are their objectives and how shall we involve them?


Implats Platinum2010 Integrated Annual Report


pp 40 – 42

Implats provides a clear explanation of the Group’s governance structure, and the approach within the organisation to accountability at all levels of the business, from operational to board.

The process for managing risk is explained with a clear, straightforward sentence on what happens at each stage of the process along with further detail in the narrative regarding the process of reviewing the risk profile.



30 ANGLO PLATINUM LIMITED 2010

MANAGING RISKS

THE BUSINESS ENVIRONMENT IN 2010

could damage our reputation, and could also affect our ability to obtain mining property rights, thus limiting our growth opportunities. Community relations, especially those arising from the Eastern Limb programme, continue to have an impact on capital projects and on the company’s reputation.

Anglo Platinum Limited has developed, and continues to refine, a process for effective stakeholder engagement with communities. It actively seeks engagement with all affected by the Group’s operations and, based on the lessons it has learnt, continually reviews the processes followed in community resettlement.

THE REGULATORY ENVIRONMENTDuring 2010, Anglo Platinum Limited’s old-order mineral rights were formally converted into new-order rights. The company is now seeking to complete the administrative process required for the execution of these rights. The company is also monitoring and implementing the requirements of the Mining Charter, and continues with negotiations around some of its prospecting rights, in order to ensure security of tenure.

The group’s relationship with the South African Government is actively managed via Anglo Platinum Limited’s Executive Committee and through structures and arrangements in place with Anglo American South Africa.

The company continues to monitor developments in Zimbabwe, where Unki Mine is now operational.

PROJECT PORTFOLIO MANAGEMENTAnglo Platinum Limited is focusing on delivering the right projects on schedule, within budget, safely and to scope. We need to ensure that our project portfolio results in our being well placed to seize opportunities to increase our market share and to deliver into market opportunities. The group has ranked and prioritised its projects portfolio, using applicable metrics, to ensure optimal allocation of capital and resources. The resourcing of projects, organisational structure and reporting have also been reviewed and are being optimised.

POWERShortages in electrical power can place sustained production, safety and growth at risk. The unavailability of infrastructure may also delay projects and result in unexpected costs. Electricity-related risk events include load shedding; localised outages; externally imposed longer-term reduced consumption; the non-approval of electricity supply for new projects; and a significant increase in electricity costs.

Anglo Platinum Limited is part of a broader Anglo American plc team working closely with Government departments, the national regulator and Eskom. The group is considering various proposals in

Anglo Platinum Limited is exposed to various risks and uncertainties that may have a negative impact on the group’s operations, financial performance and position or reputation, and that may also undermine the achievement of its social, economic and environmental objectives. Understanding these risks, and developing and executing appropriate responses to them, is crucial in ensuring the group’s sustainability.

As a result, risk management is an integral part of the group’s strategic and business processes. Anglo Platinum Limited appreciates that successful business is not about avoiding risk altogether. Rather, it is about understanding the potential effect of uncertainty on our objectives, and finding ways to mitigate negative impacts while capitalising on opportunities.

STRATEGIC RISKS

THE GLOBAL ECONOMYAnglo Platinum Limited is exposed to considerable revenue cash flow volatility as a result of changes in metal prices and in the Rand/US dollar exchange rate. As a result of the high level of fixed costs incurred by our operations, our free cash flow is to a large extent geared to changes in price and exchange rate. This requires us to have a strong balance sheet in order to be able to invest for the future and to provide our investors with superior equity returns.

We therefore continue to focus on cost management; on the prioritisation and rationing of capital expenditure; and on maintaining a flexible approach to production in response to market demand.

LEGISLATIONThe Environmental Protection Agency in the United States and the European Environmental Agency have proposed new exposure levels for platinum-bearing materials that are substantially lower than current levels. The proposals require changes in the labelling and packaging of the metal and in occupational workplace practices. These developments are monitored and Anglo Platinum Limited is represented on various forums that influence their course.

ORGANISATIONAL RISKS

COMMUNITY ENGAGEMENTThe nature of Anglo Platinum Limited’s mining operations is such that disputes in relation to community matters may arise. These disputes cannot always be predicted and may cause disruption to projects or operations. The company’s operations may also have an impact on local communities including, from time to time, a requirement for relocation. Failure to manage relationships with local communities, the Government and non-governmental organisations


Th

e b

us

ine

ss

en

viron

me

nt in

20

10

information on leading health indicators. The capture and reporting of occupational health incidents is being aligned with the safety incident reporting system.

COST BASEThe group’s long-term sustainability and competitiveness depend on its ability to reduce its operating and capital cost bases and to move its mines down the industry cost curve. Failing this, it will have only limited ability to weather future economic downturns and generate free cash flow after investing for growth.

Steep future escalations in the electricity tariff in South Africa are expected to place further upward pressure on the cost base. The secondary impact of these increases on general producer price inflation is unknown.

Cost management remains a key focus area. The company has specific asset optimisation projects in place to manage the consumption of production resources at its operations; and continues to leverage the scale of its operations through its inbound supply-chain process, to optimise prices paid for goods and services. Operational review forums take place regularly at various levels of the organisation.

MEETING PRODUCTION TARGETSFailure to meet production targets affects our profitability. The group’s resources are aligned with a production target that has been set for each operation for the next three years, taking into account our view of the platinum market and our customers’ requirements. Failure to meet production targets dilutes our margins.

Progress on the actions identified for each focus area is reported on monthly, while production results are monitored on a daily, weekly and monthly basis. Following on the outcomes of these reviews, action plans are updated and production plans revised. A monthly meeting of the Board’s Operations Committee oversees the group’s operational performance.

SKILLSThe shortage of available skills will impact on the Company’s ability to deliver on production targets in the medium to long term. Various processes are in place to mitigate this risk. These include a pipeline of young professionals; various fast-tracking processes; focus on attraction and retention initiatives; and various in-house and external development programmes.

a systematic manner. Interaction takes place directly and through various industry forums, including the Energy Intensive User Group, the National Business Initiative and the Chamber of Mines. Targets for electricity consumption have been developed for each operation and communicated to all engineering managers. Consumption against these targets is tracked on a monthly basis. All our operations have completed risk assessments and developed business continuity management plans in response to the possibility of a sustained power outage. Preparation measures have been implemented, including the installation of additional emergency-power generators and the establishment of a crisis command centre to manage a significant national electricity (or other) crisis.

WATERWater-supply constraints are projected in all the regions where we operate in the medium to long term, and will impact on existing operations and is expected to constrain growth. Anglo Platinum Limited continues to focus on water conservation measures on a sustained basis. Through our participation in various regional water-user forums, we are exploring measures to mitigate risks to the water supply.

OPERATIONAL RISKS

SAFETY PERFORMANCEFailure to adopt high levels of safety management can result in numerous adverse outcomes, including unacceptable injuries to our employees and contractors. Failure to meet our safety objectives has an impact on the well-being of our employees and their families, on employee morale, on the achievement of production targets and on the reputation of the group.

Over the past few years we have adopted a multifaceted risk mitigation approach. This includes the embedding of our safety-related and other values; the implementation of our safety standards; training and management systems that provide leading indicators of safety issues; participation in the Anglo American plc peer-review programme; compliance with the fatal risk standards; and the implementation of safety-risk management processes.

EMPLOYEE HEALTHThe unmitigated exposure of employees to airborne pollutants and physical stressors in the workplace results in the impairment of employee health and may lead to long-term financial and reputational liabilities for the company.

Anglo Platinum Limited has implemented a health-management system that includes training in health standards and provides

2010




Anglo Platinum 2010 Annual Report


pp 30-31

Anglo Platinum provide details of the key risks which could affect the business, discussing the potential impact and giving details of practices the Company has put in place to mitigate against these risks. There is no separation between financial and non-financial risks with: community engagement; water; safety; and employee health, all stated under the headings of either ‘organisational’ or ‘operational’ risks.

16

Sasol has a well-developed risk management capability. The principal risks of the Sasol group are summarised below.

principal integrated risks

Details of our risk management process are provided in the corporate

governance section of the annual fi nancial statements. Our main fi nancial

risks, including those related to the global economy and currencies and

commodity prices, are disclosed in our chief fi nancial offi cer’s review of

the annual fi nancial statements.*

A major safety, health

or environmental (SH&E)

incident or liability.

Context:

While Sasol’s safety performance compares favourably with typical recordable case rate (RCR)

values for petrochemicals/chemicals operations (excluding mining), the improvement in our RCR in

2008 did not continue during 2009 and 2010. It has reached a plateau and in 2010 we had eight

fatalities. This is not acceptable and we remain committed to achieving our goal of zero harm. On

the environmental front, the recent oil spill in the Gulf of Mexico could result in even more stringent

safety requirements at drilling operations the world over. The development of facilities in new

territories presents a challenge to ensuring the appropriate accommodation of Sasol SH&E policies

and design standards.

Mitigation:

We manage our activities according to the philosophy of ‘zero exposure to harm’. All Sasol

operations are committed to meeting strict performance targets on safety and health, process safety

management, greenhouse gas (GHG) emissions, water management, energy effi ciency and volatile

organic compounds. We regularly update and train our staff on these key SH&E requirements and

carry out internal and external audits to check compliance with SH&E regulations.

Risk of not delivering

a viable carbon dioxide (CO2)

solution.

Context:

With increasing understanding of the causes and consequences of climate change, there are greater

global efforts to reduce GHG emissions. These include laws to reduce emissions, with possible

fi nancial penalties for not doing so. Sasol’s processes make the group a signifi cant emitter of GHGs.

Its growth aspirations rely on a viable CO2 reduction solution being developed.

Mitigation:

GHG reduction targets are in place and a sub-committee of the group executive committee

(GEC) has been established to provide direction on issues related to Sasol’s GHG reduction plans.

The group’s approach to reducing its GHG emissions is based on four pillars: increased use of low-

carbon energy, increased use of renewable energy, improved energy effi ciency at its operations and

implementation of carbon capture and storage (CCS). A new business unit, Sasol New Energy, has

been formed to manage the fi rst three, and the fourth is being coordinated by a CCS project team.

Viable superior or alternative

technologies from competitors.

Context:

Increasing environmental and energy security considerations mean that competition in our

industry is intensifying, with more public and private resources being committed to developing new

technologies.

Mitigation:

Numerous management controls are in place to mitigate this risk and enhance group operability.

A more robust risk impact scale for technology has been employed. Improved intelligence gathering

helps us identify and address competitor technologies.

* Please see risk section (Item 3 D Risk factors) of the annual report as fi led on the Form 20-F for more comprehensive disclosure on the material risks facing the Sasol group of companies.


Risk of increasing portfolio

exposure to high-risk countries.

This covers a broad range of risks

from those related to human rights

to the availability of reliable utilities

and infrastructure.

Context:

Sasol’s growth ambitions depend mainly on the opportunity to commercialise its GTL and CTL

technologies across new frontiers. Most of the world’s available gas and coal reserves are in

developing countries, often in remote and underdeveloped locations.

Mitigation:

Sasol follows strict procedures for measuring country risks. We use our carefully formulated business

development and implementation model, the level of equity participation through joint ventures as

well as information from reputable rating agencies to assess country risk on a regular basis. Wherever

it operates, Sasol is guided by its values and code of ethics. We believe in business and social

partnerships, based on our South African experience.

Not succeeding with the

engineering, construction and

commissioning of new plants.

Context:

Sasol’s growth ambitions include a number of large projects that require signifi cant technical skills,

as well as capital equipment and raw materials. The recession has led to some easing in the market

for construction talent, but critical skills needed to execute projects are still relatively scarce, putting

pressure on the cost of projects. Additionally, the prices of many key inputs, like steel, remain high.

Mitigation:

Sasol has a comprehensive plan to access, train and retain appropriate skills. We are broadening our

supply base, building relationships with new manufacturers of equipment in countries like India and

China. We regularly review international benchmark fi ndings on project management and incorporate

into practice the learning from previous projects. We work to continuously optimise project design.

Failure to deliver timeously on

cultural change initiatives and

transformation in South Africa.

Context:

To sustain Sasol’s business, the group understands the importance of creating a high-performance,

ethical, inclusive culture for all its employees. In this way we will be able to attract and retain the

skills we need. South Africa has various laws in place to meet the country’s transformation targets,

and which are required to obtain various licences, permits and mineral rights. Failure to meet these

may have material consequences for Sasol’s reputation, licence to trade and ability to attract and

retain skills.

Mitigation:

Five processes underpin Sasol’s success in delivering on its goal to develop the company’s culture

and meet its targets in South Africa for transformation. These are Values-driven Leadership, talent

management, employment equity, diversity management and compliance with the broad-based

black economic empowerment (BEE) scorecard. The Sasol BEE offi ce coordinates activities to optimise

Sasol’s compliance with transformation requirements. The Sasol Inzalo BEE equity ownership

transaction was concluded in 2008, and our BEE focus also includes enterprise development

to support sustainable small businesses.

Non-compliance with applicable

laws, regulations and standards.

Context:

Authorities globally are intensifying their efforts to identify and prosecute conduct that is in violation

of laws. In particular, they are focusing on anti-competitive behaviour, which can lead to fi nes, civil

claims and damages awards. Various jurisdictions have specialised legislation aimed at combating

corruption and companies found guilty of contraventions face fi nes and damage to their reputations.

Tax laws are becoming increasingly complex, as are sanctions against certain jurisdictions.

Mitigation:

A group legal compliance committee has been established and additional legal compliance employees

have been recruited. Regular legal compliance risk assessment workshops are held throughout the

group and specifi c compliance programmes are implemented. These include training in high-risk

legal compliance areas such as competition and anti-corruption. Sasol is setting up a public policy

and regulatory affairs department to focus on fi nding solutions to the key policy and regulatory

challenges the group faces.





pp 16-17

Sasol have reported on their principal risks at the beginning of their report, choosing to leave the details regarding risk management processes until the governance section of the report. A combination of financial and non-financial risks are presented and, for each, there is contextual detail provided to inform the reader why this particular risk is deemed as principal to Sasol. There is also information provided regarding mitigation activities in place.



Governance – embedded in mainstream management processes?

Code of Conduct – In April, 2010 the Fibria Code of Conduct was concluded and approved

by the Board of Directors. The document, which incorporates the ethical principles contained

in the Company’s statements of Mission, Vision and Values, was prepared by a group made up

of representatives of a number of different Fibria areas and applies to all Fibria employees, at all

levels of hierarchy, without any exceptions. The full text can be found on the Company’s website:

www.fibria.com.br. Every employee also receives a copy of the Code of Conduct and signs a

protocol of receipt and understanding that is filed in the employee’s employment folder.

Seeking to improve governance and the application of the Code of Conduct, Management

also approved the creation of the Fibria Conduct Committee. Made up of Company officers

and managers, the Committee guarantees uniform application of the criteria used in resolving

similar cases, verifies the validity of the issues that have been brought up, takes the necessary

measures and replies to the complaining party, when identified. The Conduct Committee is

responsible for dealing with the cases that have been sent to it, for establishing criteria for cases

not foreseen under the Code and for the correct functioning of the Fibria Ombudsman’s system.

Cases of fraud, diversion of funds and damages to property will be dealt with by the Internal

Audit Committee. Impartiality in the carrying out of the issues in question and maintaining

confidentiality of the identity of those who are involved are assured in all situations.

It is the role of all leaders in the Company, at all levels, to guarantee that their subordinates and

contracted workers understand and apply the concepts of the Code of Conduct. Suggestions for

improvements should be sent to the Conduct Committee through superiors or the Ombudsman’s

channels. It is the responsibility of the Committee to analyze them and propose such suggestions

to Fibria’s Board of Directors for inclusion in the next edition of the Code, if considered relevant.

Fibria’s Code of Conduct, among others, recommends the following attitudes:

� Ethical and honest conduct, including the ethical treatment of conflicts of interest, real or

apparent, in personal and professional relationships, inside and outside the Company.

� Behavior that is based on respect and the striving for the creation of value in the business

relationships with customers, suppliers, neighboring communities, representatives of

government, the advertising market and the press.

� Compliance with applicable laws and regulations.

� Immediate internal communication – to the appropriate people and hierarchical levels – of any

violation of the Code of Conduct and the application of corrective treatment according to the case.

Anti-corruption practices – One of the items of the Fibria Code of Conduct deals with combat

of corruption. The anti-corruption measures are applicable to all units and all employees, upon

entering the Company, receive a copy of the document. The signed protocol of receipt is filed

together with each staff member’s employment folder.

‘How a company behaves is just as important or more important than how it is structured.’

GO

VERN

AN

CE

23Fibria I Sustainability Report I 2009 22

Since 2006, upon SOX certification, this item is evaluated i'n the former VCP units through an

independent auditor (PricewaterhouseCoopers) in the Entity Level Control matrix. Moreover,

every month meetings are held at all former VCP production facilities where attendance is

recorded, minutes are produced and with the participation of at least one Company officer, in

which one of the subjects of the Code of Conduct is presented by the manager responsible for

the unit. During the year, the Office of the Ombudsman registered no cases of corruption. There

are no lawsuits underway related to corruption.

Internal controls – In 2008, the former Aracruz initiated the implementation of improvements to its

internal controls, due to the financial losses sustained through investments in derivatives. Besides

the creation of a new Office of the Controller, the Company hired PricewaterhouseCoopers at

the end of 2008 to recommend better practices for internal controls and to issue a diagnosis of

the corporate risk and self-control management models, considering also taking into account

the Precautionary Principle. Based on this diagnosis, Aracruz revised its internal controls and

implemented improvements to corporate risk management and self-control practices.

The main stages of this work include the review of the governance model; the structuring of

processes and controls; review of the financial policy and approval hierarchy; and review of the

reporting structure. As a result, changes to part of its functional structure were carried out,

mainly strengthening the financial and operating risk monitoring functions.

With regard to the review of the processes, a detailed plan was prepared containing

recommendations about controls (approvals, reconciliations), automation, optimization and

changes to the flowcharts and descriptions of the control activities and matrixes. Some stages

were concluded in 2009, including the review of the approvals flowchart and the definition of the

new risk management model, seeking to achieve a high standard of corporate risk management.

Risk management (operating and financial) - In 2010, Fibria’s Risk Management Policy was

approved, which provides the risk management guidelines, develops the concepts, supplies the

details and documents the activities related to it.

Fibria’s risks are categorized according to the following classification:

RISK MANAGEMENT Market Risk Measures the uncertainties related to the expected returns of an investment

deriving from market factors, such as interest rates, exchange rates, commodity and share prices;

Strategic Risk Stems from movements adverse to the strategies selected by the company, whe-ther endogenous or exogenous;

Operating Risk Stems from the lack of consistency and adjustment of the information, processing and operating control systems, as well as errors in the management of funds and internal controls or frauds leading to the improper exercise of the company’s activities;

Risk of Events Risks prior to or a consequence of uncertain events originated either internally or externally that generate stakeholder instability or harm the reputation and sustainability of the company at some level.

2222000000000000000099999999999999999Sustainability Report

Fibria2009 Sustainability Report

Basic MaterialsBrazil

pp 22-23

Fibria discuss their code of conduct as a central element to the governance framework in place. The code of conduct includes issues such as ethical and honest behaviour and also highlights the importance of building and maintaining relationships with stakeholder groups such as customers, suppliers, communities, government representatives, and the media.

The central management processes in place should demonstrate that sustainability objectives sit alongside financial objectives at a strategic level and receive the same rigorous process, monitoring and performance evaluation.


CELEBRATING 10 SUCCESSFUL YEARS

A decade has passed since Novozymes was formed as a separate company and introduced on the Copenhagen Stock Exchange. The aim was to bring about a stronger focus on the exciting industrial enzyme business. Looking back, this stronger focus has paid off.

Among many things, the Board makes sure that Novozymes has the means and measures in place to achieve profitable and sustainable growth in both the short and long term. One important way to achieve this is by always keeping innovation and strategic change high on the agenda. We believe that one of the reasons why Novozymes has achieved very good results over the past decade is that the company has not slipped into complacency. We will strive to ensure that Novozymes continues to focus on growth, making the coming decades as exciting as the one just ended.

The strategy we embarked on a decade ago, with the emphasis on using our technology platform to create new business opportunities and looking at acquisitions where we could see a strong match with Novozymes’ core technologies, has led to greater diversity in sales and created a stronger growth platform. In 2000, detergent enzymes accounted for roughly half of Novozymes’ sales. Today, the same industry accounts for roughly one third of sales. This is not because detergent enzyme sales have stopped growing, but because innovation has enabled other industries to emerge and develop.

CELEBRATING 10 SUCCESSFUL YEARS

Innovation and recognition

Novozymes’ ability to innovate, change, and adapt to our surroundings has put the company in a strong market position. Novozymes estimates that its share of the enzyme market increased from 42% in 2000 to 47% in 2010, while the market grew from DKK 12 billion to DKK 19 billion. This larger market share is the result of expanding the industrial enzyme market through innovation and penetrating new industries where enzymes have not previously been used.

Novozymes’ unique biotechnology and optimization skills have resulted in products that have been repeatedly improved, delivering more efficient and environmentally friendly solutions to our customers. Procter & Gamble named Novozymes its “Supplier of the Year” for the third year in a row in 2010 out of more than 80,000 suppliers. This is the first time ever that a company has received the award three times and is a testimony to our innovative capabilities.

Novozymes is recognized by both customers and financial institutions for our innovative products and for our sustainability efforts. We have been honored for our sustainability work numerous times over the past decade, but to be named by Dow Jones as sustainability sector leader in the biotech area again in 2010 makes us particularly proud.

Novozymes’ high standards of financial, social, and environmental performance depend on the activities and actions of our employees around the world. This was

1 REPORTLetter from the Board of Directors

emphasized and further developed in 2010 by involving our employees in formulating a revitalized set of corporate values called Touch the World.

For the benefit of shareholders, customers, and theenvironment We are very proud of what Novozymes has accomplished over the past 10 years. Sales have almost doubled and net profit has more than tripled. Value creation for our shareholders has been even stronger, with our market capitalization more than quadrupling in the same period. In addition, more than DKK 7 billion has been returned to shareholders in the form of dividends and stock buybacks. Novozymes’ products, when applied in customers’ industrial production processes, have also facilitated a significant worldwide reduction in CO2 emissions.

The Board has been committed to developing Novozymes’ corporate governance practices over the past decade. This includes putting systems in place to ensure that Novozymes maintains high standards of performance and follows the ever-changing recommendations in this area, to the extent that this supports and strengthens Novozymes’ business.

Setting our sights for the future

New long-term targets were introduced in 2009, replacing those communicated back when Novozymes was first introduced on the stock exchange in 2000. The new targets reflect a changing world where, in particular, Novozymes’ advancing R&D technologies, more innovative products, a planet in need of more sustainable solutions, higher commodity prices, and a broader geographical presence permit more ambitious expectations of the future. Well-defined targets for environmental and social performance are also included, ensuring high levels of awareness and regular follow-up in an area we consider an integral and very important part of the way we do business.

Novozymes’ strong performance in 2010 confirms that we are moving in the right direction. Despite being hit by the global recession at the beginning of 2009, we came close to delivering on our 10-in-10 ambition of sales of DKK 10 billion in 2010. The year brought double-digit growth in sales and record growth in earnings. Novozymes also helped customers reduce their CO2 emissions by 40 million tons.

Novozymes can look back with pride on a decade of strong and sustainable growth, and we feel confident that the means and measures currently in place will pave the way for decades of exciting progress for Novozymes, our employees, our shareholders, and the world.

January 2011

The Board of Directors

Novozymes A/S

2 REPORTLetter from the Board of Directors



HealthcareDenmark

pp 1-2

The statement from the Novozymes Board of Directors recognises the wider aspects of their business and refers to their ‘high standards of financial, social, and environmental performance’. In addition, there is reference to tying these areas of the business together through the subheading, ‘For the benefit of shareholders, customers, and the environment.’ They do this by discussing the recent strong value creation for their shareholders, as well as the success of their products helping customers improve industrial production processes, facilitating a significant and worldwide reduction in CO2 emissions.

162 ANGLO PLATINUM LIMITED 2010

Mulalo Tshilowa, an environmental assistant, measures a return water level on Paardekraal tailings dam.

At Anglo Platinum Limited, good corporate governance provides the

framework for the sound commercial decision-making that is integral to

sustained corporate performance and that optimises stakeholder value

and, ultimately, shareholder protection.


Go

od

Go

vern

an

ce

GOVERNANCE

Fred Phaswana resigned as chairman of the Board on 31 August 2010 and the Board appointed Cynthia Carroll, chief executive of Anglo American plc as chairman with effect from 1 September 2010.

The Anglo Platinum Limited Board unanimously supported the appointment of Cynthia Carroll as chairman, following her nomination by the Board of Anglo American plc. Anglo American is the majority shareholder of Anglo Platinum Limited and the appointment of Cynthia Carroll as chairman continues the approach of drawing the Anglo Platinum Limited chairman from the Anglo American Board, of which Fred Phaswana also was a member for almost seven years.

The Board also appointed Valli Moosa as deputy chairman and lead independent non-executive director and chairman of the Governance Committee with effect from 1 September 2010. Valli Moosa replaces Tom Wixley who served in that role for nine years and who continues in his role as an independent non-executive director and chairman of the Remuneration Committee. After careful consideration, including full consideration of the interests of minority shareholders, the Board decided to elect Mrs Carroll to the chairmanship. Mrs Carroll meets the person specification and possesses the qualities necessary to fulfil the role of chairman.

In deciding to appoint Mrs Carroll, the Board was cognisant of the preference stated by King III for the chairman to be independent on appointment. However, the Board has also noted that the Code contemplates the appointment of a non-independent chairman, requiring that, in those circumstances, a lead independent non-executive director should be nominated. In the case of Anglo Platinum Limited, the Board believes that the existence of an independent deputy chairman, supported by five other independent non-executive directors, provides a robust Board structure to ensure good governance.

The Board has adopted a Statement of Division of Responsibilities among the chairman, the lead independent non-executive director and the chief executive officer, which clearly sets out the responsibilities of each role.

The Board has a Charter setting out its mission, role, duties and responsibilities, and, in particular, the following:

Directors’ fiduciary responsibilities.Leadership of the Board.Induction of new directors.

PRINCIPLES OF CORPORATE GOVERNANCE AND STRUCTURESCorporate governance encompasses the concept of sound business practice, which is inextricably linked to the Group’s management systems, structures, policies and culture of governance, and ensures that the Group acts towards all stakeholders in a responsible and transparent manner from an economic, social and environmental perspective.

The board re-affirms its commitment to sound governance. It ensures that the Group’s business is conducted in accordance with high standards of corporate governance, using risk management and control in accordance with local and internationally accepted corporate practice. These standards are well embedded in the Group’s system of internal controls, which have been implemented to comply with King II recommendations and are being reviewed in light of King III requirements.

BOARD STRUCTURESThe Board meets at least quarterly and is responsible to shareholders for setting direction through strategic objectives and key policies, and monitoring implementation through structured reporting systems.

The Company has a unitary Board structure, comprising two executive directors and 10 non-executive directors (six of whom are independent non-executives), as defined by King III.

The directors are drawn from diverse backgrounds and bring a wide range of experience, insight and professional skills to the Board to ensure effective leadership of Anglo Platinum Limited. Generally directors have no fixed term of appointment but retire by rotation every three years and, if available, are considered for re-appointment at the annual general meeting. Directors appointed to the Board during the year retire at the next annual general meeting of the Company, enabling shareholders the opportunity to confirm their appointment.

The Nomination Committee considers executive succession planning and makes appropriate recommendations to the Board. It evaluates skills, knowledge and experience required to implement Group strategy. With regard to Tom Wixley, who has served as an independent director for more than nine years, the Board is satisfied that there are no relationships or circumstances likely to affect, or which appear to affect, his judgement as director, and his independence is not affected or impaired by his length of service.

Anglo Platinum2010 Annual Report


pp 162-163

It is clear from the offset of the Anglo Platinum governance section that they take a stakeholder-wide perspective and take into consideration economic, social and environmental factors in their decision making. Good governance is defined as the framework for sound commercial decision making, integral to sustainable corporate performance.

2010







Overview

Performance


and operationsG


entsA


The way we work defi nes how we conduct ourselves as a business. It is underpinned by our values, our approach to sustainable development, and by effective corporate governance.

The way we workOur global code of conduct

Related sections within this report

Report on corporate governance p114

Risk management p24

Sustainable development review p29

Four values defi ne Rio Tinto: accountability, respect,

teamwork and integrity.

They guide everything we do and are expressed through the

principles and standards of conduct as set out in a global code

of conduct called The way we work (available on our website at

www.riotinto.com/library).

The way we work defi nes the way we manage the economic,

social, political, environmental and governance challenges of

our operations. It also frames a unifi ed approach to complying

with the regulatory obligations of our stock exchange listings

in the UK, Australia and the US. Everyone in the Group is

required to take training on The way we work.

But most important of all, our values help the Group to

fulfi l our commitment to shareholders to maximise total

returns whilst also fulfi lling our commitment to contribute

to sustainable development. This is because, as a company

with a reputation for acting responsibly, we will be

welcome as investors, partners and members of the

local community wherever in the world we operate.

This will hold true even as expectations and regulations

surrounding corporate governance change following the

global fi nancial crisis and our business evolves.

We regularly review our practices to make sure they are aligned

with changing regulations and that they continue to support

the principles and values contained in The way we work.

Jan du Plessis, chairman

Chairman’s introduction

Governance

The role of the board

Rio Tinto plc and Rio Tinto Limited have a common board of directors who are responsible for the Group’s success and accountable to shareholders for our performance.

Consistent with accepted good practice, the board consists of a mix of executives and independent non executives, the majority being independent non executives. This combination balances innovative thinking with business knowledge and experience.

The board has established committees responsible for audit, executive remuneration, executive and non executive succession, social and environmental matters and assisting the board to deliver its responsibilities. Each plays a vital role in underpinning how we work.

To ensure their relevance and continuing adherence to best practice, the committees annually review their terms of reference. More detailed descriptions of the board and its committees are on pages 118 and 122.

Managing risk

Rio Tinto recognises that risk is an integral component of its business, and that it is characterised by both threat and opportunity. The Group fosters a risk aware corporate culture in all decision making. Through skilled application of high quality, integrated risk analysis and management, we enhance opportunities and reduce threats, and so achieve and maintain competitive advantage.

The Group’s Risk standard guides the process by providing an overall methodology and structure for the handling of risk within the organisation. The Group seeks to provide the board and senior management with a consistent, Group wide perspective of the key risks. Reports are submitted to the board twice per year and include assessment of the likelihood and impact if risks materialise, along with risk management initiatives.

Sustainable development

As a company, we naturally meet the needs of customers, but we seek to do this without compromising the ability of future generations to meet their needs. That is what we mean by sustainable development. It is good business as well as good sense.

Our continuing fi nancial success depends on the Group’s ability to gain access to the land, people and capital we need. To do that, we put our economic, social, environmental and technical expertise to work to harness these resources. This process creates prosperity that is shared among shareholders, employees, communities, governments and business partners.

But there is more to it than that. Sustainable development also demands rigorous environmental stewardship. If we cannot always prevent harm, we can minimise and remediate any negative environmental effects of the Group’s operations. To ensure this, we have developed high standards that we maintain by implementing a wide range of practical programmes. These apply to issues that include air quality, ecosystems, biodiversity, climate change, the use of energy, land and water, waste disposal and facility closures.

This focus on environmental stewardship also delivers fi nancial benefi ts. For example by improving energy effi ciency we not only reduce our environmental impact, we also reduce our operating costs.

Social wellbeing is another fundamental aspect of our approach to sustainable development. This involves providing a safe and healthy workplace in which people, treated with fairness and decency at all times, can develop their full potential.

And going beyond the workplace, our idea of social wellbeing extends to our neighbours. With them, we seek long term partnerships characterised by the mutual respect that leads to trust.

However, good intentions are never enough. So for us strong governance systems are a vital part of putting sustainable development into practice. These systems ensure that we continue to manage our business with openness and accountability.

Values

Our reputation stems from our four core values, which defi ne the essence of who we are and who we will be: accountability, respect, teamwork and integrity.

The fi rst of these values – accountability – is about taking ownership of our performance and decisions, and the impact that they have on the business. We also support the accountability that others have in their own areas of work.

We demonstrate respect through our approach to sustainable development, and by recognising our people’s contributions to the business. We care for each other’s health, safety and wellbeing.

By working as a team, we can focus our collective efforts on where they deliver the best outcome for the Group. We believe good team members trust in the commitment and capability of others.

And fi nally, we work with integrity, treating all our stakeholders with fairness, honesty and openness.

Related information online at www.riotinto.com

www.riotinto.com/library

www.riotinto.com/ourapproach

Governance

Su

stainable development

Valu

es

The waywe work

2010 Annual report


forStriving




pp 16-17

The Chairman introduces a diagram showing ‘the way we work’ which demonstrates how Rio Tinto’s governance, values and sustainable development are inter-related and defines how they conduct themselves as a business. Each element is explained to evidence how they manage the economic, social, political, environmental and governance challenges of their operations. The section also explains the business case for sustainable development and identifies key issues.


Group overview

Management approach

Understanding our business and

sustainability footprint

Implats is the second-largest producer of platinum in the

world with the potential to impact the global PGM market.

In the past two years, and amid a changing legislative and

We understand that our view of our business process must

be integrated across the life cycle of operations, from

exploration, mining and mineral processing to refining,

marketing and recycling. We also understand that while we

do not control our products through their full life cycles, we

are responsible for ensuring safe delivery and recycling as

much as possible. We acknowledge that our business has

a direct impact:

Environmentally – pollution of water, air, land and noise

as well impact on availability of resources

Socially – the social impact and consequences of the

migrant labour systems; inherent dangers of mining that

have a direct impact on the safety of employees and the

community

global operating environment, Implats has concentrated on

deepening its understanding of the Group’s sustainability

footprint. There is now heightened awareness that all

aspects of sustainability – financial and non-financial –

impact on our stakeholders and, therefore, on our business.

Economically – loss of land for community farming,

animal grazing and generation of income

Despite these impacts, through mining we contribute

positively to society by:

Providing employment and drawing human resources

from surrounding communities

Creating sustainable communities through our upliftment

programmes such as enterprise and skills development,

and implementing community projects

Developing infrastructure in our communities such as

roads and electrification

Working jointly with stakeholders to provide required

government capacity to deliver on its mandate

mically

Land disturbance and

contamination, resource

consumption, safety

Land disturbance and contamination,

water contamination, resource

consumption, safety, land ownership,

noise, access to land, job seekers

Safety, emissions, water

contamination/resource

consumption, contamination

of land, energy, noise

Safety, noise, water

resource consumptions,

emissions

Rehabilitation, community

sustainability

EXPLORATION MINING PROCESSING REFINING

CLOSURE

Quality,

origin, reliability

Quality, origin, environmental

benefits in terms of air quality

Adding value,

reducing long-term

impact

MARKET END USER RECYCLING

In the first stages of the PGM process, impacts centre on environmental and social aspects. Once products reach market, the issue becomes quality and eco-friendliness.

Sustainability footprint


Gro

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ve

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l fin

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l sta

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ts

All these initiatives are built on our principles of sustainability

beyond a mining excavation.

While we acknowledge the impact our business processes

may have on the environment, we continue to look for

positive contributions from our metals in enhancing

sustainable development. Each year, through the risk

process, we identify market risks related to our products

and seek potential opportunities for growth. Over the

review period, the following potential market risks have

been identified:

The impact of constrained resource availability particularly

in the South African context – given that 75% of the

world’s PGM supply emanates from this region – concerns

major consumers of these metals and exacerbates the

risk of substitution as does the move into recycled metals

which represents a growing threat to mine supply.

In line with this, the development of an alternative to

PGMs in autocatalysts has been a threat for the last

30 years and will remain so in the future, hence having a

possible negative impact on sustainability.

High metal prices catalyse the search for alternatives to

PGMs and we remain fully cognisant of the need for

balance in the supply/demand equation.

With more than half of PGM production consumed by

the automotive industry, this is, by association, a major

long-term risk to industry sustainability. The development

of full electric propulsion systems poses a risk to

industry longevity as this technology uses minimal

amounts of PGMs. This is supported by projections of

steadily diminishing oil reserves, the slow pace of capital

investment to create additional capacity for oil production

and increasing demand from the emerging market

component, ultimately resulting in short supply for both

energy and propulsion.

Despite these risks, longer-term industry fundamentals are

superb in light of developments below:

The move towards alternative propulsion sources

depends heavily on hybrid technology over the next

decade – hybrids could account for 30% of all vehicle

sales over this period. Importantly, hybrid vehicles

consume an equivalent amount of PGMs per vehicle

compared with current engine technology.

The move towards gasoline frugality is trending towards

smaller-engined vehicles with similar performance

characteristics of current larger engines. These

technological innovations require similar and often higher

PGM loadings to achieve the requisite emission standards.

Tightening emission standards across the world are

expected to underpin long-term escalation in PGM

demand, ably supported by a steadily increasing global

vehicle fleet.

Although electrical cars pose a potential threat to

PGM demand, the rapid development of the

technology is constrained by several limiting factors

ranging from the safety of their battery technology,

costs of the vehicles, availability of raw materials,

impact on the energy grid, practical size of the

battery, associated driving range and limitations in

logistical roll-out of charging stations. We expect full

electric vehicles to account for less than 5% of vehicle

sales over the 20-year horizon.

Historical and ongoing development work by the

Platinum Guild International (PGI) in developing platinum

jewellery demand has created a strong and growing

jewellery sector, expected to sustain the industry over

the longer term.

Anticipated growth in emerging economies (notably

China, India and the next 11 nations) up to 2050 ensures

that demand for PGMs from the automotive, jewellery

and industrial sectors should remain robust.

Constraints on the long-term evolution of both petroleum

and electric propulsion sources are expected to create a

niche for other alternatives to vehicle propulsion. We

therefore expect technologies like fuel cells to become

increasingly prominent as feasible alternatives to

petroleum-powered vehicles in future.

Against this background, Implats continues to partner with

other PGM producers and industry bodies in identifying

potential areas for beneficiation in the application of PGMs.

As an integral part of our business plan, and with

concomitant benefits for our long-term growth, we are

implementing a holistic strategy to address the obligations

and opportunities inherent in our sustainability footprint.


Implats Platinum2010 Integrated Annual Report


pp 38-39

Implats Platinum communicates a clear understanding at their business and sustainability footprint in the management approach. This is illustrated through the Group’s value chain which is clearly explained along with the impacts and issues apparent at each stage of the mining process. Further discussion is provided on the specific risks associated with each issue.



The provision of outlook information within the Annual Report ensures that the document includes disclosure of forward-looking information helping the reader to assess the current and future performance and prospects of the business.

NON-FINANCIAL FINANCIAL

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at risk

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PEOPLE LICENCE TO OPERATE

B C

WORLD-CLASS ASSETS

FINANCIAL STRENGTH AND

DISCIPLINE

PROJECT PIPELINE GROWTH OPTIONS

6 Remuneration Report continued

6.2.2 Strategic alignment

The Remuneration Committee recognises that we operate in a global environment and that our performance depends on the quality of our people. Remuneration is used to reinforce the Group’s strategic objectives, and the committee keeps the remuneration policy under regular review to ensure it is appropriate for the needs of the Group.

The diagram below illustrates how BHP Billiton’s remuneration policy is linked to the six key drivers of our strategy and how the remuneration structures for executives (including the members of the GMC) serve to support and reinforce these linkages.

152 | BHP BILLITON ANNUAL REPORT 2010

2006 2007 2008

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ward

(as

% o

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axi

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ward

)

2009 2010

Average STI reward for GMC membersvs Profit Attributable to Shareholders (excluding exceptional items)

Profit attributable to shareholders (excluding exceptional items)

Average STI reward for GMC members

0

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Average STI reward for GMC membersvs Basic Earnings per Share

Basic Earnings per Share

Average STI reward for GMC members

0

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6.2.3 Risk alignment

The global financial crisis has heightened the focus on risk management within organisations, and in particular on remuneration frameworks that work to ensure executives take a long-term approach to decision-making – minimising activities that focus only on short-term results at the expense of longer term business growth and success.

The Remuneration Committee has considered the ways in which risk management is reflected throughout BHP Billiton’s reward structure for all executives, and is satisfied that it reinforces the desired behaviours. This is largely achieved through the Group’s approach to STI and LTI rewards, which comprise a significant portion of remuneration for the GMC.

The equity component of STI rewards is deferred for a two-year period, and performance under the LTIP is measured over a five-year period. The actual rewards received by members of the GMC therefore reflect the Group’s performance and share price over an extended period.

In addition, STI and LTI outcomes are not driven by a formulaic approach. The Remuneration Committee applies a qualitative judgement to determining STI rewards and to vesting under the LTIP, and may determine that rewards not be provided in circumstances where the committee determines it to be inappropriate or would provide unintended outcomes. The Remuneration Committee does not apply any discretion to allow vesting when performance hurdles have not been satisfied.

6.2.4 Performance alignment

While the Board recognises that market forces necessarily influence remuneration practices, it strongly believes that the fundamental driver behind our remuneration structure is business performance. Accordingly, while target remuneration is structured to attract and retain executives, the amount of remuneration actually received is dependent on the achievement of superior business and individual performance and on generating sustained shareholder value.

Short-term performance indicators and outcomes

An individual scorecard of measures is set for each executive at the commencement of each financial year. These scorecards include the key financial and non-financial measures that the Board believes will drive BHP Billiton’s performance. At the conclusion of the financial year, each individual’s achievement against their measures is assessed by the Remuneration Committee and Board and their cash STI reward is determined. This is matched with an allocation of Deferred Shares or Options (or a combination of the two), to which the individual will not have access for two years (unless they leave the Group under specific circumstances).

The relationship between STI rewards and the performance of the Group over the past five years indicates the success of our remuneration strategy in aligning executive rewards with shareholder interests (as shown in the graphs below). Further details of the Group’s Attributable Profit and Basic Earnings per Share over the past five years can be found in section 3 of this Annual Report (including descriptions of these terms).

BHP BILLITON ANNUAL REPORT 2010 | 153

Our strategy delivers Annual Report 2010

BHP Billiton2010 Annual Report

Oil & GasUnited Kingdom/Australia

pp 152-153

The BHP Billiton report demonstrates strategic alignment between remuneration and strategic objectives, with clear definitions of the financial and non-financial strategy drivers. This is supported by an explanation of the remuneration policy and structure in place, and reinforced with a discussion on risk and performance alignment.



POSCO2009 Annual Report

IndustrialsRepublic of Korea

pp 8-9

The outlook discussion in the POSCO report is situated in the CEO statement. Although not hugely detailed, it does include reference to both financial and non-financial issues which the business faces and states the management belief and commitment in running the company to live up to the expectations and trust of their shareholders, customers and society.

including upstream raw materials markets and downstream consuming industries.

As major Korean steelmakers such as Hyundai Steel, Dongbu Steel, and Dongkuk Steel begin to operate new facilities this year, steel production is expected to increase more than 12 percent over the previous year,intensifying domestic competition. In addition, the rising price of iron ores and coking coal, as well as pricing y g p g p g p gsystem negotiations, will be difficult business challenges.

Pursuing the New InitiativesStarting this year, we will implement the POSCO 3.0 Initiatives to help us grow as a comprehensive materials company focused on steel, developing future growth engines, expanding onto the global stage, and innovating our operations.

Our management plans this year include a “management for survival” initiative to be ready for the possibility of a long-term recession, and at the same time an “aggressive management” initiative to seize business opportunities. We believe these efforts will strengthen our core competitiveness and lay the foundation for long-term growth.

Reinforcing our market strength and reducing costs POSCO has a stretch target of producing 34 million tons of crude steel and selling 32 million tons of finished products by solidifying our market positions at home and abroad.

WWWe will successfully complete the construction of new facilities such as New Steel Making Plant in Pohang and s such as NeWGwangyang Plate Plant in the second half of this year and start operating them as soon as possible. We will rt operating them as soon as possible. We wGwangyang Plate Plant

c customer relationships through differentiating marketing activities such as the POSCO iating marketing activities such as the POSCOstrengthen our strategstrengthen our strategic nd we will increase the number of overseas SCM bases to 48, further reinforcing our export M bases to 48, further reinforcing our exportPartner Program Partner Program and we

foundation.foundation

In addition, we will continue to reduce costs by more than KRW one trillion this year, as we have done each yyear over the past four years. Even though it becomes more difficult to uncover new ways to cut expenses, we have set a challenging goal to reduce costs by KRW 1.15 trillion, while expanding the number of areas that will contribute.

Maximizing our value with technological leadership and stable materials procurement TToday, operational leadership is not enough to create a competitive advantage in our industry. As added value swiftly moves into proprietary technology and downstream areas, technological prowess and stable materials procurement become key to competitiveness.

POSCO therefore intends to further our technological leadership by increasing R&D investment to a record KRW 500 billion. We plan to promote the development and sales of “World Best” and “World First” products, wwhich are also far more profitable. We will increase sales of these products to 3.9 million tons, 1 million tons higher than the prior year. Additionally, we plan to develop more than 160 “Breakthrough for low-cost·high-quality” technologies. These will creatively solve technological problems and contribute to lower-cost, higher-quality production systems. We will also use FINEX, POSCO’s innovative steelmaking technology, to implement our global growth strategy.

Finally, we will continue to invest in mining to secure our access to raw materials. We are committed to achieving a self-sufficiency rate of 30 percent by 2012 through early-stage mine development and joint-venture investments with mid-sized suppliers.

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Investing in long-term growth and increased synergy among POSCO companiesTo lay the basis for global growth, we will finish land acquisition and begin construction of our integrated steel mill in India, while stepping up our efforts to secure rights to explore mines. In September we also will start construction of a Continuous Galvanizing Line in India to meet their rapidly rising demand for automotive steel. We will also establish a joint venture to build an integrated steel mill in Indonesia and begin constructionj g gas soon as possible. To respond to a changing industrial landscape, we are striving to become a comprehensive materials company, actively exploring new business opportunities, while solidifying our steel business.

In this process, our subsidiary companies will play an important role in completing the POSCO Group’s portfolio of businesses. We will help POSCO subsidiaries contribute to creating a POSCO Family management system.We will grow along with our subsidiaries by adopting a win-win strategy and encouraging cooperation. We will help our Engineering & Construction, Energy, and ICT subsidiaries evolve into the future, facilitating growth and synergy at the group level.

As CEO, I am fully committed to open communication and a trust-based corporate culture to successfullydirect these activities. POSCO’s management and executives will set the example for self-dedication and takingthe initiative to make POSCO a respected company not just in Korea but throughout the world.

Looking AheadLike the recent series of earthquakes, there have been rapid changes in the global economy. These threatenthe very survival of businesses, as even global companies with over 100 years of history are faltering in the faceof competitive changes.nge

The best way to predict the future is to create it.” With the POSCO 3.0 Initiatives,te it.” With the POSCO 3.0 Initiativeter Drucker says, Peter Drucker says, “Twill, wisdom, and vision to respond to today’s business landscape, where markets arey’s business landscape, where markets aree demonstrate thewe demonstrate the w

fluctuating and time-proven paradigms are readily replaced with new ones. The POSCO 3.0 Initiatives will alsonew ones The POSCO 3 0 Initiatives will alsofluctuating and time-phasten our way to achieving “Vision 2018”, which sets a goal of KRW 100 trillion of sales for POSCO’s 50th

anniversary.

POSCO people and the POSCO Family of subsidiaries are now well aware of what we have to do to achieve this vision—Business Evolution. We all know where we need to go—Market Expansion. We all know how to innovate our work—Operations Innovation. As you have done thus far, I know you will continue to give support and encouragement to POSCO’s people in this process of implementing the POSCO 3.0 Initiatives.

Finally, I promise to fulfill my duty with a strong will to never be daunted by any obstacles and to live up to theexpectations and trust of our highly valued and respected shareholders, customers, and society.

Thank you.

Joon-Yang ChungChief Executive Officer

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Financial Highlights 002

CEO’s Letter 004

Board of Directors 010

Through Vision 014

Through Growth 022

Poreka 032

Review of Operations 042

Steel 044

E&C 052

Energy 056

IT 060

R&D 064

Environment 068

Social Contribution 072

Milestones 078

Consolidated Financial Statements 080

Global Network 176

Executive Officers 178

Investor Information 180

Side view of POSCO magnesium coil

Future outlook – long-term sustainability?

BASF 2010 Annual Report


pp 115 –116

BASF provides an outlook section which tries to combine elements of the group strategy, risk management and performance to provide context for the discussion. The report looks to the future by identifying potential opportunities which the Company may be able to take advantage of.


A N N U A L R E P O R T 2 010

DELIVERING GROWTH THROUGH INNOVATION

British American Tobacco 2010 Annual Report

Consumer GoodsUnited Kingdom

pp 20-21

British American Tobacco’s outlook section is positioned within the market discussion and the outlook focuses on industry trends such as world consumption, increasing regulation and excise. In response to many of the expected trends, the Company’s will take a responsible approach to focusing on consumer preferences.

20 British American Tobacco Annual Report 2010Business review

Global market overview

The tobacco industry remains relatively resilient to global economic pressures, but recession inevitably impacts consumer confidence and disposable incomes. While this has seen volumes decline, the overall value of the industry continues to grow.

The global tobacco marketGlobal marketplaceThe global tobacco industry produces more than 5,400 billion cigarettes a year. The biggest single market is China, where the industry is state-owned, with some 350 million smokers who account for more than 40 per cent of the global total.

Four international tobacco companies – Philip Morris International, British American Tobacco, Japan Tobacco and Imperial Tobacco – account for some 45 per cent of the global market, or around three-quarters of the market outside China.

The illicit trade in tobacco products is a serious problem in many countries – meaning that up to 12 per cent of global volume is traded on the black market.

Economic outlookThe global economic environment remains tough and uncertain. While some emerging economies may grow fast in 2011, recovery in advanced economies is likely to be fragile for some time and high unemployment levels are a concern.

Value of the industryAll the ‘big four’ tobacco companies face an increasingly competitive marketplace but the overall value of the industry is still growing. There are big opportunities to improve the product and price mix, primarily in developing markets.

We believe consumers are increasingly looking for and expecting real value, so quality and innovation both play a key role in delivering market share.

Illicit trade in tobacco productsCigarettes are among the most commonly traded products on the black market due to high profit margins, the relative ease of production and movement, and low detection rates and penalties.

The principal drivers of illicit trade are economic – cheaper cigarettes for consumers and profits for the smugglers and counterfeiters. Contributory factors include sudden increases in excise, weak border controls and ineffective sanctions.

Estimates suggest that up to 660 billion illegal cigarettes are smoked every year. This has a negative impact on consumers, retailers, governments and tobacco companies. For consumers, illegal cigarettes can mean fake products with no quality controls, no health warnings or, where genuine products are smuggled, health warnings that do not meet local government regulations.

It is estimated that governments worldwide are losing up to £24 billion a year in excise and other taxes, while the loss to legitimate tobacco companies could be as much as £6 billion a year in revenue.

We believe tackling this illegal trade effectively requires cooperation between the industry, regulators and enforcement authorities. We support governments’ establishment of appropriate tax policies, strong regulation and effective enforcement. In 2010, we signed a cooperation agreement with the European Commission and the member states of the European Union to tackle the problem of illicit trade.

Consumer focus

Understanding smokers’ preferences and buying behaviour is the starting point with innovations. We aim to develop product and packaging developments that will be truly relevant to consumers’ tastes, attitudes, disposable income and purchasing patterns.

The demand for our international brands is growing

Our international brand volumes and market shares are increasing in many markets. This trend, supported by consumer-relevant innovation, can increase our sales and profits, even where overall market volumes are declining.

21British American Tobacco Annual Report 2010Business review

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Industry outlookWorld consumptionTrends indicate that individual smokers willconsume fewer cigarettes each and smaller percentages of populations will smoke. However, with the world’s population predicted to increase to seven billion by theend of 2012 and nine billion by the end of 2050, we believe that there will be a verysustainable and important tobacco industry for a long time to come.

Increasing regulationRegulation is becoming increasingly stringent, supported by the World Health Organisation’s Framework Convention onTobacco Control.

Appropriate health warnings on packs andother primary packaging have been part of the industry for decades. However, a move towards plain packaging for tobaccoproducts could make criminals’ lives easier.Counterfeit products would become easier

to produce and branded illicit products that do not comply with regulations could become more attractive to consumers.

Retail display bans could also lead to an increase in illicit trade by driving the saleof the legal product under the counter and could also distort competition among tobacco companies.

ExciseMany national governments use tobacco taxation as a key instrument to reduce rates of smoking, while also raising significantexcise revenue. However, sudden increasesin excise rates can destabilise markets andresult in consumers switching to cheaper illicit products.

Gradual and predictable increases in excisecan be more effective for governments, helping to maintain an orderly market that both enables tax revenues to be increased and supports public health policy.

Ireland’s illegal cigarette trade

It is estimated that one in four cigarettes consumed in Ireland have been smuggled into the country. This illegal trade accounts for around 1.5 billion cigarettes, costing the country €0.5 billion in lost tax revenue.

Ireland has the most expensive cigarettes in the EU due to high excise, with prices more than double the EU average. The Minister for Finance decided not to increase excise in 2010, acknowledging that the high prices were giving rise to massive cigarette smuggling.

Focus on excise

For more information about tobacco taxes, see www.bat.com/tax

36%In January 2010, illicit cigarettes in Romania reached a peak market share of 36 per cent, over double their 2008 share of 16 per cent.

This was largely the result of a sharp rp rise e result of a sharp in excise, which significantly increasedeasedsednificantly increasethe price of cigarettes. Rather than s. Rather than generate the expected revenue, this te the expecte issed revenue, thismeant that the Romanian Government that the Romanian Gonian Government Gstood to lose €1 billion in unpaid taxes ose €1 billion in uno los sin 2010 if illicit trade remained at the llicit trade remained atif illsame le l.evel.

Annual Report 2009-10

Building tomorrow's enterprise

digital consumers co-creation self-service personalization

growth momentum smart sourcing emerging economies innovation hubs

social contracts sustainable tomorrow green innovation resource efficiency

adaptability simplification collaboration smarter organizations

new commerce micro payments mobility inclusiveness

cloud-based computing intelligence pervasive computing sensor networks

affordability healthcare economy prevention patient-centric

Infosys2009-10 Annual Report

TechnologyIndia

pp IFC and 5

At the beginning of the report, Infosys outline their expectations for the future and what the potential opportunities are for the Company. These opportunities include financial and non-financial areas of the business and Infosys state their intention of realising their full potential. Those areas set out at the beginning of the report are then discussed in more detail, including a ‘sustainable tomorrow’ which discusses the Company’s social and environmental outlook.


Building tomorrow's enterprise

The future has a way of arriving unannounced, but winners are never

taken by surprise. If the events of the last two years have brought us

face to face with one reality, it is that enterprises need to be made

future-proof. Even if the worst of times is behind us, the best of times

will be ours only if we can seize the right opportunities.

In the changing world of today, opportunities have become

inseparably linked with advances in IT. In our endeavor to future-proof

the businesses of our clients, we at Infosys have identified seven key

areas that are rapidly increasing in influence, and present great scope

for IT-led innovations – Digital consumers; Emerging economies;

Sustainable tomorrow; Smarter organizations;

New commerce; Pervasive computing; and Healthcare economy.

We believe that realizing the full potential of these drivers is important

for tomorrow's enterprise to forge ahead of its competition. It is by

bringing new thinking and technological breakthroughs into existing

ecosystems that enterprises can emerge stronger out of the downturn,

and go fortified into the next generation of business.

We hope to see you in a better tomorrow.

What is not started today is never finished tomorrow.

– Johann Wolfgang von Goethe

5Infosys Annual Report 2009-10

Sustainable tomorrow

In 2008, a reputed confectionery

company based in the U.S.

reduced its carbon footprint by 20%.

The company's complex distribution network in

Western Europe covered more than 44 million

kilometers a year in shipments. Analyzing

shipment data and using it to modify logistic

operations helped the company evolve

business practices that cause least harm to the

environment.

Can we afford to take sides today in the conflict

between global economic and global environmental

interests? It is beyond debate now that we must

invest in a sustainable tomorrow, in a world that is

threatened with extinction by its inhabitants recklessly

disturbing its unique and delicate balance.

Businesses have a significant impact on the

environment through their use of energy and other

environmental resources, and the emissions from

their operations. Society, in the form of markets,

governments, investors, the local community and

employees, demands demonstration of concern and

action from businesses. Hence, businesses have an

unwritten social contract to factor environment

as an important dimension of their operations

and products. At the same time, governments of

emerging economies and developing countries have

a responsibility towards their citizens to ensure that

environmental sustainability is achieved in a climate of

continued economic growth.

Rising costs and scarcity of energy and resources

impact long-term economic sustainability of

businesses, and are among the top pressures driving

their sustainability agenda. Improving energy efficiency

and reducing resource intensity is often the first and

most important step toward achieving sustainability.

This is driving the focus around energy efficiency in

operations, transport, buildings, devices, equipment

and in harnessing alternate energy sources.

Technology is emerging as a key enabler in

managing resource usage and efficiency. We have

used technology to measure and monitor energy

consumption data at granular levels in our campuses.

Insights gained from analysis of this data enabled

focused initiatives resulting in a per capita saving of

10% in energy consumption and energy bills over the

last year.

Addressing issues of environmental sustenance and

resource conservation without impacting growth

calls for what can be termed as ‘green innovation’.

Enterprises can drive their ‘go green’ goals through

innovations in IT, communications, engineering and in

materials and processes while also opening up newer

possibilities for growth. We use our technology and

innovation capabilities to offer solutions to clients

in areas such as Smart Grid, Intelligent Building

Design and Management, and Green Logistics, in

conjunction with partnerships and alliances that

bring complementary capabilities. Incidentally, it was

Infosys that provided the analytics solution that helped

the American confectionery company reduce its

carbon footprint.

Intelligent buildings Resource efficiency

Water management



BOTH DARING AND RESPONSIVE

Novozymes’ ambition is to change the world together with our customers, and our achievements over the past decade leave the company even better positioned to realize this ambition. We must continue to focus on innovation, optimization, and diversification.

But we recognize that we do not know what the future holds. The world is changing, and the only thing we can be sure of is that nothing is forever. We therefore need to be both daring and responsive. If we can ensure that we have the most innovative solutions that enable the world to change, this will not only secure Novozymes’ future but also benefit our customers and the environment.

Novozymes’ business is about innovation and rethinking. We are proud about the use of enzymes to clean our clothes, fuel our cars, produce our wine, and brew our beer. Over the past 10 years, we have achieved much that we could barely dream of when Novozymes was founded – not only for our customers but also for ourselves. In another 10 years, we will probably be working with technologies that we cannot even imagine today. The ability to rethink is key to the future – not only for Novozymes but for all societies.

Growth through diversification

Novozymes has matured since its establishment 10 years ago, and we have almost doubled our sales and more than tripled our net profit. It has been quite a journey, and I am equally excited when looking to the future.

Our long-term targets entail even higher sales growth and continued strong earnings growth. By being innovative and providing our customers with valuable solutions based on our industrial insight, we can help them change the world – while growing our business. And vice versa: By growing our business we will have a bigger impact and be better positioned to realize our ambition.

The Enzyme Business segment is expected to be our biggest growth engine in absolute terms in both the short and the medium term. Different industries will contribute to growth at different times as a natural consequence of our exposure to growth in many different areas. Given this level of diversification, the opportunities seem endless. For instance, we reformulate detergents to enhance their performance and sustainability profile while stabilizing costs for the

We envision a future where our biological solutions create the necessary balance between better business, cleaner environment, and better lives. We are passionate about our work, we seek to understand the bigger picture, we dare to lead, and we strive to earn the trust of our partners.

BOTH DARING AND RESPONSIVE

manufacturer. We reduce costs for poultry producers by maximizing the utilization and nutritional value of feed. And we are very positive about the opportunities in bioenergy, as cellulosic ethanol has the potential to transform both our business and the supply of energy to the transport sector.

We also use our technology beyond enzymes by driving innovation in new industries and applications in the BioBusiness segment. By their very nature, these are high-risk activities, but the potential rewards are also high, and they are expected to contribute to our long-term growth. Interesting examples are the development of an alternative plastic made from sugar instead of oil and the development of microorganisms that stimulate crop growth and reduce the need for fertilizers.

An unpredictable world

But size is not all that matters. It is just as important that we retain the responsiveness that often characterizes smaller businesses. As our business develops and the world evolves, sometimes things do not work out as we thought they would. In that situation it is crucial that we dare to respond, shift direction, kill our darlings, and seize the advantages of change.

A few years ago, for example, we developed various scenarios for turning cellulosic ethanol into a business area. Our models were based partly on the price of a barrel of oil. Our most optimistic scenario assumed a price per barrel of about USD 100, which seemed almost inconceivably high. Less than a year later, oil prices were up above USD 140 per barrel!

Oil prices have fluctuated since, but the change was beneficial for Novozymes as it supported the deployment of biofuels. This has naturally been extensively debated since, as it suddenly altered the fuel and grain markets in the US. Novozymes believes that, if produced and used correctly, biofuels will make a significant contribution to the sustainable energy solutions that society needs. This applies not only to biofuels from corn, but even more so to biofuels from biomass, which is why Novozymes is working hard to realize the full potential of converting biomass into fuel.

We launched a new enzyme in 2010, Cellic® CTec2, that enables the production of biofuel from agricultural residues such as straw and corn stover on a large scale. Combined with other available technologies, this makes it possible to produce cellulosic ethanol in the US for a price down to USD 2 per gallon – a production cost that is commercially viable, albeit unproven as yet on an industrial scale.

25 OUTLOOKLetter from the CEO

A need for sustainable solutions

Over the past couple of years, we have seen that the pressure on the world’s scarce resources has made people more receptive to the necessity of sustainable solutions. Businesses see not only the necessity but also the benefits of using sustainability in their response to customer demand and regulation. We enable our customers to make more from less, as our solutions save energy and raw materials and reduce waste. The result is higher quality, lower costs, and a better environment. And that is exactly what our vision is all about.

I look forward to seeing what the next 10 years will bring!

Steen Riisgaard

President & CEO

26 OUTLOOKLetter from the CEO



HealthcareDenmark

pp 25-26

The CEO presents an extensive overview and outlook content focusing on company specific issues and how Novozymes can benefit society at large. The general tone of this statement demonstrates a management commitment to sustainability issues and an acceptance of their accountability beyond pure economic factors.

AXA2009 Activity and Corporate Responsibility Report

Financial France

pp 35 and 36

This section explains how AXA manage their corporate responsibility commitments in practice, including a discussion of corporate responsibility governance and risk management. The key corporate responsibility issues for the business in the future are also discussed, including what the issue means for AXA in terms of reducing the impact of their operations.

60 Integrated thinking in reporting

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The information contained in this report is provided for general information purposes only and is not intended to constitute an alternative to professional advice. Although Black Sun Plc has endeavoured to ensure the content of this report is accurate, users of this report should seek appropriate professional advice before taking any action in reliance on any of the information contained within it. All information in this report is provided “as is” and Black Sun Plc provides no warranties or representations as to the completeness, accuracy or suitability for any purpose of the content of this report or any other warranty of any kind, express or implied, including but not limited to warranties of satisfactory quality,

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A review of how international companies are evidencing ... · Ch na Europe Ind a South Afr ca Rep. of Korea US International Summary Companies reviewed by sector (%) Basic materials