Statement by the Financial Reporting Review Panel in respect of the report and accounts of Rio Tinto Plc
15 March 2011
FRRP PN 131
As a result of a complaint made in July 2010 the Financial Reporting Review Panel of the FRC has had under review the report and accounts of Rio Tinto plc for the year ended 31 December 2008. In this review the Panel has taken into account Rio Tinto’s directors’ report for the year ended 31 December 2009.
The Companies Act 2006 provides that the business review included in the directors’ report must contain a fair review of the company’s business and that the review required is a balanced and comprehensive analysis of the development and performance of the company’s business during the financial year and the position of the company’s business at the end of the year. In discussions with Rio Tinto the Panel has been considering whether additional information about some of the company’s operations referred to in the 2008 business review ought to have been included in the review in order to comply with the Act’s requirement for a balanced analysis.
Following these discussions, in their report and accounts for the year ended 31 December 2010, published today, the directors of Rio Tinto include more information about environmental matters, social and community issues and related reputational risk.
The Panel welcomes the action taken by the directors and regards its enquiries as concluded.
Notes to Editors
- Additional information included in the Rio Tinto Annual Report following discussions with the Panel comprises details of the potential health risks posed by exposure to workers and communities surrounding uranium mines; details of the sensitivities the group faces in dealing with local communities, such as the La Granja copper development in Peru and the Eagle project in Michigan in the United States; an example of the potential for the group’s projects to impact on biodiversity, with information relating to biodiversity projects associated with the group’s activities in Madagascar; additional details of the group’s non-managed Grasberg mine in Indonesia and the nature of the environmental, social and reputational issues relating to that mine.
- So far as the Panel is aware, this additional information does not materially add to or alter information already in the public domain, but it has not previously been included in Rio Tinto's reports and accounts.
- The FRC is the UK’s independent regulator responsible for promoting high quality corporate governance and reporting to foster investment.
- The role of the Panel is to examine the annual accounts and directors’ reports of public and large private companies to see whether they comply with the requirements of the Companies Act 2006 including applicable accounting standards. Following implementation of the Accounting Regulation (EC) No 1606/2002, this may mean compliance with UK or International Financial Reporting Standards.
- Where breaches of the Act are discovered the Panel seeks to take corrective action that is proportionate to the nature and effect of the defects, taking account of market and user needs. Where a company’s accounts or directors’ report are defective in a material respect the Panel will, wherever possible, try to secure their revision by voluntary means, but if this approach fails the Panel is empowered to make an application to the court under section 456 of the Act for an order for revision. To date no court applications have been made.
- The Chairman of the Panel is Bill Knight and the Deputy Chairmen, David Lindsell and Ian Wright. There are currently 24 other Panel members drawn from a broad spectrum of commerce and the professions. Individual cases are normally dealt with by specially constituted Groups of 5 or more members.
Document created under a former FRC operating body.