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AS A LISTED COMPANY WITH THE AUSTRALIAN SECURITIES EXCHANGE (ASX), THE COMPANY MUST REPORT ON ITS MAIN CORPORATE GOVERNANCE PRACTICES BY REFERENCE TO THE PRINCIPLES AND RECOMMENDATIONS OF THE ASX CORPORATE GOVERNANCE COUNCIL.
This report is prepared with reference to the 2nd Edition of the Corporate Governance Principles and Recommendations.
RECOMMENDATION 1.1
Companies should establish the functions reserved to the Board and those delegated to senior executives and disclose those functions.
The Board of Directors has been charged by shareholders with overseeing the affairs of the Group to ensure that they are conducted appropriately and in the interests of all shareholders. The Board defines the strategic goals and objectives of the Group, as well as broad issues of policy and establishes an appropriate framework of Corporate Governance within which the Board members and management must operate. The Board reviews and monitors management and the Group’s performance. The Board is responsible for ensuring the maintenance of Corporate Governance policies and procedures in accordance with prevailing best practices and within legal and social requirements. The Board has also taken responsibility for establishing control and accountability systems/processes and for monitoring senior executive performance and implementation of strategy.
Management is charged with the day to day running and administration of the Group consistent with the objectives and policies as set down by the Board. Within this framework, the Managing Director is directly accountable to the Board for the performance of the management team. Mr. John Carlile was appointed as Managing Director on 14 January 2008.
RECOMMENDATION 1.2
Companies should disclose the process for evaluating the performance of senior executives. Each of the Company’s senior executives report directly to the Managing Director.
The Board and the Managing Director closely monitor the performance of individual senior executives.
Formal evaluation of senior executives has not been undertaken due to the extreme financial and operational pressures that the Company has endured.
The Board proposes to establish formal evaluation procedures once the Company's operations have stabilised and the process of rebuilding the Company has been materially advanced.
RECOMMENDATION 1.3
Companies should provide the information indicated in the Guide to reporting on Principal 1.
The Company has provided this information.
RECOMMENDATION 2.1
A majority of the Board should be independent Directors.
The Company's Board is not comprised of a majority of independent Directors, however the Board believes that this is appropriate given the Company's current circumstances in relation to its financial position and difficulties experienced during the year in the development of the Cibaliung Gold Project in Indonesia. The Board is currently comprised of the Non-Executive Chairman (Bruce Watson), the Managing Director (John Carlile) a Non-Executive Director who is associated with a substantial shareholder (George Tahija) and one independent Non-Executive Director (Robert Willcocks). The Chairman carried out some executive/management functions in 2007.
RECOMMENDATION 2.2
The Chairperson should be an independent Director.
The Chairman (Bruce Watson) of the Company, through an associated corporate entity, assumed some of the executive/management functions throughout 2007 and accordingly was not then regarded as independent for that period. The Chairman resumed a Non-Executive capacity early in 2008 and has always been independent of the Company’s major shareholders.
RECOMMENDATION 2.3
The roles of Chairperson and Chief Executive Officer should not be exercised by the same individual.
These roles have been exercised by separate individuals since 14 January 2008.
RECOMMENDATION 2.4
The Board should establish a Nomination Committee.
The Board has not maintained a formally constituted Nomination Committee. Where a vacancy arises or it is considered appropriate to vary the composition of the Board of Directors, the full Board generally participates in any review of the Board’s composition and the qualifications and experience of candidates.
Directors are selected upon the basis of their specialist skills and business background so as to provide an appropriate mix of skills, perspective and business experience. Directors are not appointed for a fixed term but are, excluding any Managing Director, subject to re-election by shareholders at least every three years in accordance with the Constitution of the Company.
The Directors' terms of appointment are governed by the Constitution of the Company. A Director appointed to fill a casual vacancy or as an addition to the Board, only holds office until the next general meeting of members and must then retire. After providing for the foregoing, one-third of the remaining Directors (excluding the Managing Director) must retire at each Annual General Meeting of members.
RECOMMENDATION 2.5
Companies should disclose the process for evaluating the performance of the board, its committees and individual directors.
Following the recent sale of the Cibaliung Gold Project the Company’s strategic focus has shifted to the acquisition, exploration and definition of resources in existing and new projects within the highly prospective Indonesian magmatic and outer arcs which are relatively underexplored and are highly prospective for precious and base metals. The Company’s progress in this regard is hampered, amongst other things, by a severe lack of financial resources.
The Board of the Company works closely with senior management where appropriate so that the new strategic focus might be achieved as effectively as possible.
In this context, formal evaluation of the Board has not been undertaken during this period due to the extreme financial and operational pressures that the Company has endured.
The Board proposes to establish formal evaluation procedures once the Company’s operations have stabilised and the Company’s future is more certain.
RECOMMENDATION 2.6
Companies should provide the information indicated in the Guide to reporting on Principal 2.
The Company has provided this information.
RECOMMENDATION 3.1
Companies should establish a code of conduct and disclose the code or a summary of the code as to:
- the practices necessary to maintain confidence in the Company’s integrity;
- the practices necessary to take into account their legal obligations and the reasonable expectations of their stakeholders;
- the responsibility and accountability of individuals for reporting and investigating reports of unethical practices.
The Company has established a Director's Code of Conduct. In addition the Company maintains a Code of Ethics which extends to govern the conduct of Directors and the Executive of the Group in both Australia and Indonesia. Given the extremely small number of senior executives and limited scale of operations these codes have not extended to deal with the responsibility and accountability of individuals for reporting and investigating reports of unethical practices.
The Director's Code of Conduct and the Company's Code on Ethics are reproduced on the Company's website.
RECOMMENDATION 3.2
Companies should establish a policy concerning trading in Company securities by directors, senior executives and employees and disclose the policy or a summary of that policy.
The Company maintains a policy which requires that Directors, officers and employees of the Company not engage in any dealings in the shares of the Company without giving prior notice to the Company including details of the type and date of dealing, number of securities, parties and price.
In addition, Directors, officers and employees shall not engage in any dealings in shares of the Company during the period two weeks prior to and within 24 hours after the date of the announcement of the Company's annual or half year results or any quarterly activities report, or at any time while in the possession of inside information. The policy is reproduced on the Company's website.
RECOMMENDATION 3.3
Companies should provide the information indicated in the Guide to reporting on Principal 3.
The Company has provided this information.
RECOMMENDATION 4.1
The Board should establish an Audit Committee.
The Board has established an Audit Committee which is responsible for ensuring compliance with all appropriate accounting standards and the integrity of related reporting obligations.
The Committee is also responsible for reviewing the Group's internal financial controls, and for maintaining open lines for communication between the Board and the external auditors, independently of management.
All Audit Committee deliberations are routinely reported to the full Board at the earliest opportunity and any action taken, or proposal made, is submitted to the full Board for ratification or approval and implementation.
RECOMMENDATION 4.2
The Audit Committee should be structured so that it:
- consists only of non-executive directors;
- consists of a majority of independent directors;
- is chaired by an independent chair, who is not chair of the Board;
- has at least three members.
The Company has established an Audit Committee however the committee does not meet with the requirements of this recommendation due to the limited number of directors available to form this committee and the positions that each of the directors hold. The committee is comprised of two members being Bruce Watson (the Chairman) and Mr. Robert Willcocks (a Non-Executive Director). Given the size of the Company and the Board, the Audit Committee is made up of only two members, while other Directors and the Company's external auditors may be invited to attend Audit Committee meetings at the discretion of the Audit Committee.
RECOMMENDATION 4.3
The Audit Committee should have a formal charter.
The Company has a formal Audit Committee Charter which has been approved by the Board of Directors.
RECOMMENDATION 4.4
Companies should provide the information indicated in the Guide to reporting on Principal 4.
The Company has provided this information.
RECOMMENDATION 5.1
Establish written policies and procedures designed to ensure compliance with ASX Listing Rule disclosure requirements and to ensure accountability at a senior executive level for that compliance and disclose those policies or a summary of those policies.
Currently the Managing Director and the Company Secretary are charged with the responsibility to ensure compliance with ASX Listing Rule disclosure requirements and to ensure accountability at a senior management level for that compliance. The Board has approved a Continuous Disclosure Policy which is reproduced on the Company’s website.
RECOMMENDATION 5.2
Companies should provide the information indicated in the Guide to reporting on Principal 5.
The Company has provided this information.
RECOMMENDATION 6.1
Companies should design a communications policy to promote effective communication with shareholders and encouraging effective participation at general meetings and disclose their policy or a summary of that policy.
The Company has not established a formal policy for communicating with shareholders. Information is communicated to the members through compliance with ASX Listing Rules and the Corporations Act 2001, by way of announcements to the ASX, media releases, the Annual Report, Half-Yearly Report, the Annual General Meeting and other meetings that may be called from time to time. The Company maintains a website which provides a description of the Group's projects and all material announcements released to the ASX.
RECOMMENDATION 6.2
Companies should provide the information indicated in the Guide to reporting on Principal 6.
The Company has provided this information.
RECOMMENDATION 7.1
Companies should establish policies for the oversight and management of material business risks and disclose a summary of those policies.
There are inherent risks associated with exploration and the development of resource projects and in particular in operating in overseas countries. The Board continuously reviews the activities of the Group to identify key business and operational risks and, where possible, will implement policies and procedures to address such risks. The Company has adopted a Risk Management Statement and a Financial and Commodity Risk Management Policy. The Risk Management Statement is reproduced on the Company's website.
The Board is provided with regular reporting on the management of operations and the financial condition of the Group aimed at ensuring that risks are identified, assessed and appropriately managed as and when they arise.
RECOMMENDATION 7.2
The board should require management to design and implement the risk management and internal control system to manage the company’s material business risks and report to it on whether those risks are being managed effectively. The Board should disclose that management has reported to it as to the effectiveness of the company’s management of its material business risks
The Managing Director and Chief Financial Officer (Cahyono Halim) are both based in Jakarta and have commenced the process of enhancing the design and implementation of risk management and internal control systems to manage the company's material business risks. Management has confirmed to the Board that the Company's risk management and internal compliance and control system is operating efficiently and effectively in all material respects.
There are inherent risks associated with exploration and the development of resource projects and particularly in Indonesia where a new Mining Law has recently been introduced.
RECOMMENDATION 7.3
The board should disclose whether it has received assurance from the chief executive officer (or equivalent) and the chief financial officer (or equivalent) that the declaration required in accordance with section 295A of the Corporations Act is founded on a sound system of risk management and internal control and that the system is operating effectively in all material respects in relation to financial reporting issues.
The Managing Director and the Chief Financial Officer commenced employment with the Company in January 2008. The Managing Director and Chief Financial Officer have provided section 295A statements to the Board and confirmed to the Board that the Company’s risk management and internal compliance and control system is operating efficiently and effectively in all material respects.
The Chief Financial Officer has commenced the process of enhancing the design and implementation of risk management and internal control systems to enhance the Company’s financial reporting processes.
RECOMMENDATION 7.4
Companies should provide the information indicated in the Guide to reporting on Principal 7.
The Company has provided this information.
RECOMMENDATION 8.1
The Board should establish a Remuneration Committee.
The Board has not maintained a formal Remuneration Committee due to the limited number of directors available and the positions that each of the directors hold. Remuneration matters are dealt with by the full Board of Directors. The full Board of Directors is responsible for establishing and reviewing the remuneration for the Managing Director.
RECOMMENDATION 8.2
Companies should clearly distinguish the structure of non-executive director's remuneration from that of executive directors and senior executives.
The Board has previously set the remuneration of Non-Executive Directors which is within the aggregate amount approved for such remuneration by shareholders. All Non-Executive Directors are entitled to remuneration of $30,000 each per annum (plus statutory superannuation where applicable) inclusive of Committee responsibilities. The Chairman receives remuneration of $45,000 per annum (plus statutory superannuation). No retirement benefits are payable to Non-Executive Directors.
The Board has determined the level of remuneration for the Managing Director taking into account his experience, the nature of his responsibilities, the Group’s objectives and market conditions.
The Group has employed a number of executives both in Australia and in Indonesia who are key to achieving the Company's objectives. The Board determines the remuneration policies applicable to the limited number of employees in Australia. The remuneration of employees in Indonesia is determined by the President Director of the Company's operating subsidiaries in conjunction with the Managing Director taking into account each employees experience, the nature of responsibilities, and both market and country conditions. Officers and employees in both Australia and Indonesia are entitled to participate in the Company's Employee and Contractor Options Plan.
RECOMMENDATION 8.3
Companies should provide the information indicated in the Guide to reporting on Principal 8.
The Company has provided this information.
Directors, Officers and Employees of Austindo Resources Corporation NL
Policy & Procedure on Dealings in ARX Securities
Background - Insider Trading:
The insider trading provisions of Australian Law work on the basis that a person must not (whether as principal or agent) subscribe for, purchase or sell, or "engage in dealings" of any shares in ARX if;
a) The person possesses information that a reasonable person would expect to have a material effect on the price of the shares if the information were generally available; and
b) The person knows, or ought reasonably to know, that:
i. The information is not generally available; and
ii. If it were generally available, it might have a material effect on the price of the shares.
A person does not need to be directly associated with the Company to be guilty of insider trading in relation to securities of the Company. The prohibition extends to dealings through nominees, agents or their associates, such as family members, family trusts or family companies ("Related Third Parties").
Policy:
1. Directors, officers and employees of ARX and its subsidiary companies shall not engage in any dealings in the shares of ARX without giving prior notice as follows:
Party seeking to deal in shares
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Prior Notice to be Given to:
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Employees of ARX or subsidiary companies and consultants and advisors involved in the management of projects for and on behalf of ARX (or their Related Third Parties)
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The Company Secretary of ARX
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Directors of ARX or subsidiary companies (or their Related Third Parties)
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The Company Secretary of ARX who shall provide details to the Chairman of ARX
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2. The Board should be advised of all dealings by directors, officers and employees at periodic Board meetings. Details to be advised shall include: Type of dealing, Date of dealing, Number of shares, Seller, Purchaser and Price;
3. Directors, officers and employees shall not engage in any dealings in ARX shares during the period:
a) two weeks prior to and within 24 hours after the date of the announcement to the ASX of the Company's annual or half year results;
b) two weeks prior to and within 24 hours after the date of the announcement to the ASX of the Company's quarterly activities reports;
c) notwithstanding a) or b), at any time while in possession of inside information.
Procedure:
Directors, officers and employees of ARX and its subsidiary companies shall notify the Company of any intention to engage in any dealings in shares of ARX by:
1. Written notification of such intention (including details of proposed Type of dealing, Date of dealing, Number of shares, Seller, Purchaser and Price as may be applicable in the circumstances) to:
Company Secretary
Austindo Resources Corporation NL
Tel: (61 2) 9415 6344 Fax: (61 2) 9415 6399
2. In all cases the Company Secretary shall submit details of the proposed dealings together with any relevant comments regarding compliance with Insider Trading provisions (and any other relevant matter) to the Managing Director (and to the Chairman in the case of Directors notifying of an intention to deal in securities);
3. If the Company Secretary, Managing Director or Chairman shall have a conflict of interest or be the party proposing to engage in dealings then such person give notice of the relevant circumstances to the Chairman or in the alternative to the full Board of Directors via the Company Secretary;
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Code of Ethics – Kode Etik
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“Our objective is to develop the Company as a leading exploration and mining company in Indonesia in order to create sustainable wealth for all shareholders.”
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“Tujuan kami adalah untuk mengembangkan Perusahaan menjadi perusahaan ekplorasi dan pertambangan yang terkemuka di Indonesia dan Australia dalam rangka menciptakan kemakmuran yang langgeng bagi para pemegang sahamnya.”
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In achieving this objective the Company has adopted the following core values:
- Acting with integrity;
- Respect for people and the environment;
- Striving for continuous improvement.
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Dalam mencapai tujuan ini Perusahaan menganut nilai-nilai hakiki sebagai berikut:
- Bertindak dengan integritas;
- Penghormatan terhadap sesama manusia dan lingkungan hidup;
- Peningkatan kemampuan secara berke-sinambungan
- Perluasan hubungan baik antara Indonesia dan Australia
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Further, the Board of Directors, senior executive officers and all staff are committed the following ethics in achieving the Company’s objective:
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Selanjutnya, Direksi, para pimpinan senior dan seluruh karyawan memiliki komitmen untuk berpegang pada prinsip etik di bawah ini dalam mencapai tujuan Perusahaan tersebut :
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Responsibilities to shareholders and the marketplace:
- - The Company shall maintain full and frank disclosure in its communication with shareholders and the marketplace;
- - The Company shall not engage in deceptive or misleading conduct;
- - The Company shall adopt and maintain the highest standards of integrity in its accounting policies, practices and disclosures.
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Tanggung jawab kepada pemegang saham dan publik:
- - Perusahaan akan mempertahan-kan komunikasi yang terbuka dan jujur dengan para pemegang saham dan publik;
- - Perusahaan akan mengadop dan menjaga standar integritas yang tinggi dalam kebijaksanaan dan praktek accountingnya, dan dalam keterbukaan informasi
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Relations with suppliers of goods and services:
- - The Company shall maintain proper and commercial relations with all suppliers of goods and services;
- - The Company is committed to the principles of fair and honest trading;
- - In the event of any dispute regarding goods and services the Company will seek to resolve such matters in a fair and timely manner.
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Hubungan dengan penjual barang dan jasa:
- - Perusahaan akan menjaga hubungan komersial yang lazim dengan seluruh penyedia barang dan jasa;
- - Perusahaan mempunyai komitmen untuk menjalankan prinsip bisnis yang jujur dan kesetaraan;
- - Dalam hal terjadinya perselisihan menyangkut barang-barang dan jasa, Perusahaan akan mencari jalan keluar atas prinsip yang adil dan tepat waktu.
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Employment practices:
- The Company is committed to providing opportunity for all employees to continually improve themselves;
- The Company is committed to maintaining occupational health and safety in all its operations to industry best practice standards.
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Hubungan Industrial:
- - Perusahaan memiliki komitment untuk memberikan kesempatan kepada seluruh karyawan untuk terus menerus mengembangkan diri mereka;
- - Perusahaan memiliki komitmen untuk menjaga kesehatan & keselamatan kerja dalam setiap bidang sesuai standard dan praktek yang baik.
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Responsibilities to the community:
- - The Company will ensure that its officers, employees and contractors comply with the laws of the region within which they are conducting activities for and on behalf of the Company;
- - The Company is committed to supporting local communities through its involvement in community activities and in the conduct of its exploration and mining operations;
- - The Company shall respect local community attitudes and requirements in the conduct of its business with them;
- - The Company is committed to proper environmental practices in all of its operations.
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Tanggung jawab terhadap masyarakat:
- - Perusahaan memiliki komitmen untuk mendukung masyarakat setempat melalui keterlibatan dalam aktivitas masyarakat, dan dalam pelaksanaan ekplorasi & pertambangannya;
- - Perusahaan menghormati tata cara/adat dan ketentuan yang berlaku di masyarakat setempat dalam berbisnis dengan mereka;
- - Perusahaan memiliki komitmen terhadap praktek lingkungan hidup yang baik dalam seluruh kegiatan usahanya.
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Conduct of Personnel:
- - All Company personnel are expected to conduct their affairs in a professional and appropriate manner in accordance with the objectives of the Company;
- - All Company personnel are expected be responsible and accountable for their actions and the manner in which they perform their functions and duties;
- - Personnel are prohibited from offering or receiving inducements in the conduct of the Company’s business;
- - Personnel are expected to avoid situations or arrangements where their own interests may conflict with those of the Company. If such a situation is under consideration or arises, personnel are required to immediately notify the Company;
- - Personnel are prohibited from making improper use of Company information, assets and resources;
- - Personnel are required to treat all Company information as belonging to the Company and as strictly confidential.
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Standar Perilaku Karyawan :
- - Seluruh karyawan diharapkan untuk melaksanakan tugasnya secara profesional dan layak sesuai dengan tujuan dari Perusahaan;
- - Karyawan dilarang untuk menawarkan atau menerima imbalan dari pihak lain atas pelaksanaan pekerjaannya;
- - Karyawan diharapkan untuk menghindari situasi atau keadaan dimana terjadi konflik antara kepentingan pribadi dengan Perusahaan. Jika situasi itu terjadi, maka karyawan diminta untuk segera melaporkan kepada Perusahaan;
- - Karyawan dilarang menggunakan data/informasi, harta milik dan sumber daya Perusahaan lainnya secara tidak layak;
- - Karyawan diminta untuk memperlakukan segala informasi milik perusahaan dan menjaga kerahasiaannya sebagaimana seharusnya sebagai milik Perusahaan.
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Compliance:
- - Internal controls are to be established by the Company where there is greatest potential for abuse of this Code;
- - The Board shall conduct an annual review of compliance with this Code of Ethics and recommend appropriate action to the Board of Directors where breaches of this Code have occurred.
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Compliance:
- - Mekanisme internal kontrol akan ditetapkan khususnya untuk bidang-bidang yang memiliki potensi besar untuk terjadinya pelanggaran terhadap Kode Etik ini;
- - Komite Corporate Governance akan melaksanakan review tahunan atas pelaksanaan dari Kode Etik ini, dan memberi rekomendasi tindakan yang diperlukan atas pelanggaran yang terjadi terhadap Kode Etik ini kepada Direksi.
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Continuous Disclosure Policy
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ASX Listing Rule 3 deals with continuous disclosure for the timely provision of relevant price sensitive information to the ASX so that the market is kept informed of events and developments as they occur.
Disclosure of Information to ASX
- The Managing Director will coordinate and oversee all disclosure or announcements or releases to the market via the ASX.
- All announcements or releases shall be released to the ASX prior to release to other third parties, brokers, analysts or media.
- Wherever possible Directors and senior management shall inform the Company Secretary in advance (and wherever possible in a timely manner) of any information that might require disclosure to enable the Company Secretary to ascertain the Company’s obligations. Employees are not to determine whether information may be material but must pass on any information of which they become aware to the Company Secretary in order for him to ascertain whether it is to be disclosed.
- Where any disclosure is required the Company Secretary shall refer the matter to the Managing Director for his prior approval. If the Managing Director is unavailable, the matter in his absence will be referred to an Executive Director or any Director if necessary.
- The Company Secretary will be responsible for releasing information to the ASX. On its receipt by the ASX, the Company Secretary will ensure that it is disseminated to the directors and management promptly and that it be made accessible to the public as soon as possible.
- In the event of inadvertent disclosure of information or knowledge of a deliberate leak, the Company Secretary should be informed in order to ascertain whether disclosure of the information to the ASX is required.
Disclosure to Media and Analysts
There should be no response to market speculation and rumours. If there is to be any comment to correct the media and market analysts’ projections, it should only occur after consideration has been given as to whether the information be provided in order to correct the errors is price sensitive and should be disclosed to the ASX. In any event such comment should be limited to correcting errors in factual information or assumptions made by the media and market analysts.
In any briefings to analysts or presentations to the media, any slides or other materials are to be approved beforehand by the Managing Director or in his absence the Company Secretary.
Clarifying information should only be given in any discussion following presentation at the briefing. If, in answering a question price sensitive information would be disclosed, then any answer to such a question should be declined or deferred for answer after consultation with the Managing Director or the Company Secretary.
Where possible, a review should to be held after any briefing to assess whether there might have been an inadvertent disclosure of price sensitive information. If so the matter is to be referred to the Company Secretary to ascertain whether disclosure to the ASX is required.
Company Spokesperson
Persons authorised to speak to analysts or the media on behalf of the Company are:
- Chairman and Managing Director
- Executive Directors
- Company Secretary
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Directors' Code Of Conduct
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This directors’ code of conduct (“Code”) sets out the standards that each director will adhere to whilst conducting their duties:
- A director must at all times act honestly, in good faith and in the best interests of the Company as a whole and comply with the spirit, as well as the letter, of the law and of the principles of this code of conduct.
- A director has a duty to exercise the powers associated with being a director of the Company with a degree of care and diligence that a reasonable person would exercise if they were a director in the same circumstances.
- A director should consider matters before the Board having regard to:
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- any and all possible material personal interests he or she may have in the subject matter; and
- what is in the best interests of the Company.
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A director must serve the interests of the members of the Company as a whole, not the interests of any particular group of directors or stakeholders or the director's personal or commercial interests. In circumstances of insolvency or near insolvency, the duty to act in the best interests of members is overridden by a duty to act in the best interests of creditors.
- A director must not make improper use of information acquired as a director or take improper advantage of the position of director to gain a personal advantage or to cause detriment to the Company.
- A director must not place himself or herself in a position where there is a reasonable possibility of conflict between his or her personal or business interests, the interests of any associated person, or his or her duties to any other company, on the one hand, and the interests of the Company or his or her duties to the Company, on the other hand.
- Where a director is faced with an actual or potential conflict of interest or duties in relation to a particular matter being considered by the Board the director must:
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- consult with the Chairman;
- fully and frankly inform the Board about the circumstances giving rise to the conflict;
- abstain from voting on any motion relating to the matter and absenting himself or herself from all board deliberations relating to the matter; or
- where appropriate, consider resigning from the Board.
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A director must bring an enquiring, open and independent mind to Board meetings, listen to the debate on each issue raised, consider the arguments for and against each motion and reach a decision that he or she believes, to be in the best interests of Company as a whole.
- The Chairman of the Board must ensure that an opportunity is provided for all directors to put their views on issues before the Board or a committee on which they sit.
- Confidential information (including Board or committee papers) received by a director remain the property of the Company from which it was obtained and it is improper to disclose it, or allow it to be disclosed, unless that disclosure has been duly authorised by the Chairman of the Board, or the person by whom the information was provided, or is required by law or by the Listing Rules.
- A director must not disclose the content of discussion at board meetings or committee meetings outside appropriate and responsible circles within the Company with a legitimate interest in the subject of the disclosure, unless that disclosure has been authorised by the Company, or is required by law or by the ASX Listing Rules.
- A director must not engage in conduct, or make any public statement likely to prejudice the Company's business or likely to harm, defame or otherwise bring discredit upon or denigrate the Company, fellow directors or staff unless the director believes in good faith that it is in the best interests of the Company as a whole to make such a statement.
- A director must, unless exempted by the Board, co-operate in corporate governance procedures prescribed by the Board including periodic appraisals of the performance of the Board.
- A non-executive director must devote such time as is necessary to carry out the duties of the non-executive director.
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Risk Management Statement
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This statement provides an overview of the Company’s risk management policies and its compliance and control systems.
Recognising that there are inherent risks associated with exploration and development the Board is responsible for overseeing the risk management activities of the Company.
The management of risk is necessary to protect the Company’s personnel, assets and reputation as well as the environment. It is also vital for effective business operation, achievement of objectives, reliable reporting and compliance with laws and regulations.
The implementation of the risk management controls and their effectiveness is the ultimate responsibility of the Board. The Board has implemented a combination of internal policies and procedures and engages external auditors to achieve an appropriate level of risk management and monitor developments in this regard.
Internal Policies and Procedures
The Board has implemented a number of management strategies covering areas of business risk relevant to the Company such as:
- Occupational health & safety;
- The environment;
- Asset protection (insurances);
- Continuous disclosure;
- Securities trading policies applicable to directors, employees and key contractors;
- Codes of conduct for directors and employees;
The various policies implemented by the board include mechanisms to ensure compliance, identification and regular reporting to the board of significant business risks and the management of those risks.
Financial Statements
Management shall ensure transparency and accuracy in all financial information for internal and external use.
Management shall ensure that financial information is timely, complies with statutory requirements and in particular, provides a true and fair view of the Company’s financial status and performance.
The integrity of the Company’s financial reporting relies upon a sound system of risk management and control. Accordingly, the Managing Director is required to provide a statement in writing to the Board that the Company’s financial reports are based upon a sound risk management policy to ensure management accountability.
The Company’s Financial Statements are audited/reviewed by external auditors on an annual and semi-annual basis.
The Audit Committee assists the Board in this Policy by:
- fostering in management personnel a culture of risk control and management, particularly on internal control and compliance;
- overseeing the planning, implementation, establishment, monitoring, management, assessment and review of risk control management and information systems;
- providing recommendations to the Board on the appointment and replacement or rotation of auditors;
- meeting and liaising with external auditors
Given that the Company is developing projects in Indonesia which involve significant Capital Expenditure the Company is reviewing the possibility of establishing an internal audit function.
Occupational Health and Safety
The Board oversees the planning, implementation, establishment, monitoring, management, assessment and review of risk control management and information systems in connection with occupational health and safety issues.
Management has established a Policy to identify, assess, monitor and manage risk by:
- identifying and addressing risks at each Company project and setting up internal control and compliance systems;
- devising and establishing a system for the ongoing review of risk control management and information systems for prompt response;
- reviewing the systems and their compliance as well as their overall effectiveness not only for continuing or evolving risks but also for new risks;
- reporting periodically on risk control and compliance as well as management information systems to the Board.
Management, staff and contractors of the Company are required to ensure that Occupational Health and Safety practices are of the highest standard.
Environment
The Board oversees the planning, implementation, establishment, monitoring, management, assessment and review of risk control management and information systems in connection with environmental concerns.
Management has established and implements a policy to identify, assess, monitor and manage risk by:
- identifying and addressing risks at each Company project, including consideration of environmental concern and setting up procedures for ensuring that appropriate action is taken to ensure compliance with relevant legislative and community expectations;
- devising and establishing a system for the ongoing review of risk control management and information systems and reviewing the systems and their compliance and their overall effectiveness not only for continuing or evolving risks but also for new risks;
- reporting periodically on risk control and compliance as well as management information systems to the Board.
Management, staff and contractors of the Company are required to ensure that Environmental matters are addressed at all times in accordance with the highest standards.
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Performance Evaluation Statement
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This statement provides an overview of the Company’s approach to performance evaluation of the Board, its Committees and individual Directors, and key executives.
The Board
The Board is responsible for evaluating its performance under the direction of the Chairman.
The Board will discuss and set the objectives to be achieved at the start of the relevant period and at its end the Board will assess the extent to which its objectives were achieved. The Chairman might also determine that there be a survey to ascertain the directors' perceptions on Board performance.
The Chairman will determine the process by which the performance of individual directors will be assessed and the process may include one-on-one interviews with directors by the Chairman, or a Board survey of individual directors to determine perceptions about each individual Board member.
External advisers might also be called on to assist in the evaluation of the Board and individual directors.
Board Committees
Each Board committee is required to review its performance annually. The review may take place by way of a survey to ascertain its members' perceptions on the committee's performance. Recommendations might then be made by the committee’s chairman to the Board for improving the committee’s effectiveness.
Executives and Senior Management
Each executive and member of senior management will be subject to an annual performance review by an immediate superior and where appropriate by the Managing Director. The review will have regard to the completion of key job objectives and contribution towards objectives of the Company. The outcomes of such reviews will be provided to the Board which monitors performance management in its determining of executive and senior management remuneration.
The Board will facilitate the performance evaluation of the Managing Director and Executive Directors where appropriate. The performance evaluation and remuneration of the Managing Director will be the responsibility of the Chairman in consultation with the Board based on its assessment of the Company’s overall performance.
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