BHP Annual Report 2008

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Annual Report 2008

Our Charter

Outlining our purpose, plans,values and measures of success

Our Charter outlines the actions, valuesand measures by which we judge our successin creating long-term value through discovering,developing and converting natural resources.Earning the trust of our employees, contractors,customers, suppliers, communities and shareholdersis a vital aspect of our success. Our valuesembrace safety and the environment, integrity,high performance, win-win relationships,the courage to lead change and respectfor each other.

For several years now, Asian economies have been driven by a fundamentalshift in the rate of industrialisation and urbanisation of their massivepopulations. These economies have accounted for more global growththan has the United States. This growth will drive the course of theworld economy for years to come.BHP Billiton produces and supplies world markets, including the developingAsian and other economies, with many of the natural resources they relyon to fuel their growth. These resources include iron ore, copper, nickel,alumina, manganese, coal, uranium, oil and gas.As the world’s leading natural resources company, we are central tothe growth of the world’s developing economies.We really are resourcing the future.

This Annual Report is issued subject to the Important Notices appearing on page 268 of this Annual Report.BHP Billiton Limited. ABN 49 004 028 077. Registered in Australia. Registered office: 180 Lonsdale Street, Melbourne, Victoria 3000, AustraliaBHP Billiton Plc. Registration number 3196209. Registered in England and Wales. Registered office: Neathouse Place, London SW1V 1BH, UK

Link to ‘Our Charter’ atwww.bhpbilliton.com/aboutus/charter

BHP BILLITON ANNUAL REPORT 2008 -

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Contents

1. Key information 3

1.1 Our business 51.2 Chairman’s Review 61.3 Chief Executive Officer’s Report 71.4 Selected key measures 81.5 Risk factors 91.6 Forward looking statements 12

2. Information on the Company 13

2.1 BHP Billiton locations 162.2 Business overview 162.3 Production 482.4 Marketing 532.5 Minerals exploration 532.6 Global Technology 532.7 Resource and Business Optimisation 532.8 Government regulations 542.9 Sustainable Development – Health, Safety,Environment and Community 562.10 Closure and rehabilitation 572.11 Employees 572.12 Organisational structure 582.13 Material contracts 592.14 Constitution 602.15 Reserves and resources 63

3. Operating and financial review and prospects 93

3.1 Introduction 953.2 Our strategy 953.3 Key measures 963.4 External factors and trends affecting our results 983.5 Application of critical accounting policiesand estimates 1003.6 Operating results 1013.7 Liquidity and capital resources 1123.8 Off-balance sheet arrangementsand contractual commitments 1163.9 Subsidiaries and related party transactions 1163.10 Significant changes 116

4. Board of Directors andGroup Management Committee 117

4.1 Board of Directors 1194.2 Group Management Committee 122

5. Corporate Governance Statement 123

5.1 Governance at BHP Billiton 1255.2 Shareholder engagement 1265.3 Board of Directors 1265.4 Board of Directors – Review, re-electionand renewal 1295.5 Board Committees 1305.6 Risk management 1345.7 Management 1345.8 Business conduct 1355.9 Market disclosure 1355.10 Conformance with corporate governance standards 136

6. Remuneration Report 137

6.1 The Remuneration Committee 1396.2 Reporting requirements 1396.3 Remuneration policy and structure 1396.4 Group Management Committee remuneration details 1416.5 Group Management Committee remunerationand share awards 1426.6 Non-executive Directors 1476.7 Aggregate Directors’ remuneration 1486.8 Group performance 1496.9 Earnings performance 1496.10 Share prices 149

7. Directors’ Report 151

7.1 Principal activities, state of affairsand business review 1537.2 Share capital and buy-back programs 1537.3 Results, financial instruments and going concern 1557.4 Directors 1557.5 Remuneration and share interests 1557.6 Secretaries 1557.7 Indemnities and insurance 1557.8 Employee policies and involvement 1567.9 Environmental performance 1567.10 Dividends 1567.11 Auditors 1567.12 Non-audit services 1577.13 Value of land 1577.14 Political and charitable donations 1577.15 Exploration, research and development 1577.16 Creditor payment policy 1577.17 Class order 1577.18 Proceedings on behalf of BHP Billiton Limited 1577.19 Directors’ shareholdings 1577.20 GMC members’ shareholdings (other than Directors) 1587.21 Performance in relation to environmental regulation 1587.22 Share capital, restrictions on transferof shares and other additional information 158

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