The Board of Directors supports good corporate governance principles and practices. Notwithstanding its small size, the Company aims to comply with the Corporate Governance Principles and Recommendations 2nd Edition (“ASX Principles”) set by the ASX Corporate Governance Council (“Council”) to the extent appropriate and practical. Where compliance is inappropriate or impractical, these departures from the ASX Principles are explained in the Company’s Annual Report.
The Directors have adopted the following charters and policies and copies are available on the website together with the Company’s Constitution.
- Audit Committee Charter
- Board Charter
- Code of Conduct
- Continuous Disclosure Policy
- Diversity Policy
- Remuneration and Nomination Committee Charter
- Risk Management Policy
- Securities Trading Policy
- Shareholder Communication Policy
ASX Principle 1: Lay solid foundations for management and oversight
Council states that a company should “Establish and disclose the respective roles and responsibilities of board and management”.
The Board Charter defines the operation of the Board of Directors, its role, composition and responsibilities and the separation of the role of the Board from that of management.
The Board is responsible for –
- setting the Company’s values and standards of conduct;
- providing leadership of the Company within a framework of prudent and effective controls which enable risk to be assessed and managed;
- setting the Company’s direction, strategies and financial objectives;
- approving business plans and annual budgets;
- approving half-year and annual financial reports;
- ensuring that the performance of management, and the Board itself, is regularly assessed and monitored;
- monitoring compliance with regulatory and ethical standards; and
- appointing, terminating and reviewing the performance of the Managing Director and Executive Directors.
The Board has delegated authority for the operations and administration of the Company to the management team, led by the Managing Director. The roles of the Chairman and the Managing Director are separate.
The Chairman is responsible for –
- leading the Board in its duties to the Company;
- ensuring there are processes and procedures in place to evaluate the performance of the Board, its committees and individual directors;
- facilitating effective discussions at Board meetings;
- ensuring effective communication with shareholders; and
- developing an effective working relationship with the Managing Director and Executive Directors.
The Managing Director is responsible for –
- policy direction of the operations of the Company;
- the efficient and effective operation of the Company;
- ensuring directors are provided with accurate and clear information in a timely manner to promote effective decision-making by the Board;
- ensuring all material matters affecting the Company are brought to the Board’s attention; and
- maintaining regular communication with the Chairman on operational and strategic matters.
The Company has a formal process for evaluating the performance of Executive Directors and senior executives. Executive Directors are appraised by their respective senior executive staff as well as by their fellow directors as part of Board performance evaluation. Senior executives are individually appraised by the Managing Director and the relevant Executive Director.
ASX Principle 2: Structure the board to add value
Council states that a company should “Have a board of an effective composition, size and commitment to adequately discharge its responsibilities and duties”.
The Board consists of 4 directors. A description of the skills and experience of each Board member and their period of office are contained in the Annual Report.
|Non-Executive Chairman||Gary Comb|
|Non – Independent Directors|
|Non-Executive Directors||Gavin Caudle||Gordon Galt|
|Managing Director||Barry Cahill|
The chairman of the Board is an independent director, however the majority of the Board comprise of non-independent directors (see definition below) as follows –
a) Messrs Cahill is not independent as he is employed in an executive capacity;
b) Messrs Caudle and Galt are associated with Provident Minerals Pte Ltd and Taurus SM Holdings Pty Limited, both of whom are substantial shareholders in the Company.
Notwithstanding, the Company believes that the present composition of the Board is appropriate for the following reasons –
a) it provides a balance of skills and expertise that are required and that are appropriate at this stage of the Company’s development;
b) each of the non-independent directors, other than Mr Galt, has a significant personal stake in the Company and the Board believes that, on balance, this serves to align their interests with those of shareholders and other stakeholders.
An independent director is a non-executive director (ie is not a member of management) and –
- is not a substantial shareholder of the Company or an officer of, or otherwise associated directly with, a substantial shareholder of the Company;
- within the last three years has not been employed in an executive capacity by the Company or its subsidiaries, or been a director after ceasing to hold any such employment;
- is not a principal or employee of a professional adviser to the Company or its subsidiaries whose billings exceed five per cent of the adviser’s total revenue;
- is not a significant supplier or customer of the Company or its subsidiaries, or an officer of or otherwise associated directly or indirectly with a significant supplier or customer. A significant supplier is defined as one whose revenues from the Company exceed five per cent of the supplier’s total revenue. A significant customer is one whose amounts payable to the Company exceed five per cent of the customer’s total operating costs;
- has no material contractual relationship with the Company or its subsidiaries other than as a director of the Company;
- has not served on the board for a period which could, or could reasonably be perceived to, materially interfere with the director’s ability to act in the best interests of the Company;
- is free from any interest and any business or other relationship which could, or could reasonably be perceived to, materially interfere with the director’s ability to act in the best interests of the Company.
The Board has not adopted a tenure policy. In accordance with the Constitution of the Company, no director shall hold office for a continuous period in excess of three years or past the third annual general meeting following the director’s appointment, whichever is the longer, without submitting for re-election.
The Board, or individual directors, may obtain independent professional advice if it (or the director) considers necessary, with the costs to be borne by the Company.
Remuneration and Nomination Committee
The members of the Committee are:
Under the Remuneration and Nomination Committee Charter, candidates for Board positions are nominated by the Committee for consideration by the Board. In selecting new members for the Board, directors have regard to the appropriate skills and characteristics needed by the Board as a whole. The directors endeavour to appoint individuals who would provide the mix of director characteristics and diverse experiences, perspectives and skills appropriate for the Company, at least one of whom will have appropriate technical and commercial skills relevant to the mining industry.
Board Performance Evaluation
A formal evaluation process for the Board and individual directors has been implemented.
ASX Principle 3: Promote ethical and responsible decision-making
Council states that a company should “Actively promote ethical and responsible decision-making”.
Code Of Conduct
The Company conducts its business within the guidelines set out in the Code of Conduct. Under the Code all directors and employees are required to –
- comply with the law;
- act honestly and with integrity;
- not place themselves in situations which result in a conflict of interest;
- use the Company’s assets responsibly and in the best interests of the Company;
- be responsible and accountable for their actions.
Adherence to the Code is a term of employment with the Company.
Employees are encouraged to report any violations of this Code of Conduct to the Managing Director or to the Chairman where a concern or conflict issue involves a director.
The Company’s diversity mission is to become an organization with the following inherent and lasting characteristics:
a) Universal recognition by everyone with whom it deals as a company committed to diversity and synonymous with improving the opportunities of disadvantaged groups in employment;
b) A workforce that fully reflects the requisite skills available in the relevant employment market;
c) A preferred employer and vendor for all cultural groups in the population by virtue of its reputation in this field;
d) An environment where every employee understands and voluntarily values diversity in all areas of practice;
e) An environment where all employees have the opportunity to reach their highest potential.
The recognition and encouragement of the uniqueness of individual contribution within a team environment is the embodiment of the Company and its employment policies. Our philosophy is found in all aspects of employment such as recruitment, compensation, training, promotion, transfer, termination and benefits.
All employees at the Company will be treated as individuals according only to their abilities to meet job requirements, and without regard to factors such as race, colour, ancestry, place of origin, political belief, religion, marital status, family status, physical or mental disability, sex, sexual orientation, age or because of a criminal or summary conviction charge that is unrelated to the employment or the intended employment or any other factor that is legislatively protected. Any kind of discrimination or harassment based upon these factors is neither permitted nor condoned.
ASX Principle 4: Safeguard integrity in financial reporting
Council states that a company should “Have a structure to independently verify and safeguard the integrity of their financial reporting”.
The Company has accounting policies, systems and procedures for ensuring that its financial reports present a true and fair view of its financial position in all material respects. The policies, systems and procedures cover areas of significance to the financial statements such as revenue recognition, accounting for non-current assets, payroll, control of cash and other assets, recording of liabilities and authority levels.
The Managing Director and Finance Director provide the Board with a written statement pursuant to Section 295A the Corporations Act 2001 that the financial records of the Company for each financial period have been properly maintained in accordance with Section 286 of the Corporations Act 2001, the financial statements and notes thereto comply with the accounting standards and give a true and fair view and, that to the best of their knowledge, the integrity of the financial statements is founded on a sound system of risk management and internal compliance and control and the Company’s risk management and internal compliances and control system is operating efficiently and effectively in all material respects.
The Committee’s role and responsibilities, powers and membership requirements are set out in an Audit Committee Charter.
The Committee provides assistance to the Board in fulfilling its corporate governance and oversight responsibilities in relation to the Company’s financial reporting, internal control structure, risk management systems and external audit functions. In discharging its oversight role, the Committee is empowered to investigate any matter brought to its attention with full access to all books, records, facilities and personnel of the Company and the authority to engage independent counsel and other advisers as it determines necessary at the Company’s cost.
The members of the Committee are:
Gavin Caudle (Chairman)
Appointment and Rotation of External Auditor
If a change in external auditor is proposed, responsibility for recommending the external auditor (to be proposed for shareholder approval) and for evaluating the external auditor shall lie with the Audit Committee. The Committee aims to recommend an external auditor who demonstrates independence and integrity and who has the capacity to support the Group’s business operations in Australia and Indonesia.
The audit partner responsible for the audit shall be rotated at least every five years. At least two years must elapse before the audit partner can again be involved in the audit of the Company.
ASX Principle 5: Make timely and balanced disclosure
Council states that a company should “Promote timely and balanced disclosure of all material matters concerning the company”.
The Continuous Disclosure Policy sets out how directors and employees shall deal with potentially price-sensitive information to ensure that the Company complies with its continuous disclosure obligations which require the Company to immediately notify the Australian Securities Exchange (ASX) of any such information.
The Managing Director and Executive Directors constantly monitor all Company activities with a view to determining the possible need for disclosure of price-sensitive information.
Directors and the management team notify the Managing Director or the Company Secretary immediately if they become aware of any information that should be considered for release to the market.
Disclosures concerning financial information are reviewed and approved by the Chairman of the Audit Committee prior to their release to ASX.
Price-sensitive information is released to ASX. Price-sensitive information is not disclosed to analysts or others outside the Company until after the ASX confirms that the announcement has been released. The information is posted on the Company’s website after the ASX confirms that the announcement has been released, with the aim of making the information accessible to the widest audience.
The Company has a policy of not responding to market rumours and speculation unless it is required to do so by ASX.
Where the Company is not able to make an immediate announcement of market sensitive information, it may choose to apply for a trading halt of its securities on ASX. A trading halt can only be sought by the Managing Director in consultation with the Chairman.
ASX Principle 6: Respect the rights of shareholders
Council states that a company should “Respect the rights of shareholders and facilitate the effective exercise of those rights”.
The aim of the Shareholder Communication Policy is to provide shareholders with information about their company to enable them to exercise their rights as shareholders in an informed manner.
Shareholders and other interested parties are invited to register to receive email alerts of announcements posted on the Company’s website.
Shareholders are encouraged to attend all meetings, or if unable to attend, to vote on the motions proposed by appointing a proxy.
The Company’s auditor attends each Annual General Meeting and is available to answer questions about the conduct of the audit and the preparation and contents of the auditor’s report.
ASX Principle 7: Recognise and manage risk
Council states that a company should “Establish a sound system of risk oversight and management and internal control”.
The Company faces material business risks arising from its profile as an exploration company in transition to a mining company and includes operational and financial risks and others such as reputation and regulatory risks.
Risk management strategies adopted shall include –
- health, safety and environment policies;
- internal control policies and procedures;
- financial authority limits;
- business plans and budgets;
- monthly reporting against budgets;
- insurance programme; and
- hedging strategies, where appropriate.
The above strategies are implemented in conjunction with other policies adopted by the Company, including the code of conduct, continuous disclosure policy and securities trading policy to provide a comprehensive risk management policy.
The Board monitors and reviews areas of significant business risks regularly through –
- monthly financial reports, including reports on the operations;
- attendance at Board meetings held at least six times a year;
- tour of operations and major exploration sites;
- presentations by the Managing Director, Executive Directors and senior management at Board meetings;
- informal briefings by the Managing Director and Executive Directors; and
- reports by the Chairman of the Audit Committee and circulation of minutes of Audit Committee meetings to the Board.
ASX Principle 8: Remunerate fairly and responsibly
Council states that a company should “Ensure that the level and composition of remuneration is sufficient and reasonable and that its relationship to performance is clear”.
Remuneration and Nomination Committee
The members of the Committee are:
Gary Comb (Chairman)
The Committee’s role and responsibilities, powers and membership requirements are set out in its Charter.
The Committee advises the Board on remuneration policies and practices generally to assist the Board in the discharge of its responsibilities for human resources and remuneration matters. The objective of the Committee is to ensure that –
- the Company’s remuneration policy is designed to align senior executives interests’ with those of shareholders;
- remuneration level is commensurate with a person’s duties and responsibilities and that remuneration is competitive in attracting, retaining and motivating employees of the highest calibre.
Full details of the Company’s remuneration policy and the structure and level of remuneration paid are set out in the Remuneration Report section of the Annual Report. There are no schemes for retirement benefits other than statutory superannuation for both executives and non-executive directors.
The Company does not permit the hedging of unvested incentive options issued to executive directors, eligible employees and consultants. The Company’s policy in this matter is contained in its Security Trading Policy.