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As a listed company with Australian Stock Exchange Limited (ASX), the Company must report on their main corporate governance practices by reference to the Best Practice Recommendations of the ASX Corporate Governance Council.
Recommendation 1.1 - Formalise and disclose the functions reserved to the Board and those delegated to management
The Board of Directors has been charged by shareholders with overseeing the affairs of the Company to ensure that they are conducted appropriately and in the interests of all shareholders. The Board defines the strategic goals and objectives of the Company, as well as broad issues of policy and establishes an appropriate framework of corporate governance within which Board members and management must operate. The Board reviews and monitors management and the Company'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.
Management is charged with the day to day running and administration of the Company consistent with the objectives and policies set down by the Board. The Managing Director is directly accountable to the Board for the performance of the management team.
Recommendation 2.1 - A majority of the Board should be independent Directors
The Company's Board is not comprised with a majority of independent Directors however the Board believes that this is appropriate at the current stage of the Company's development. The Board is currently comprised of an independent Non-Executive Chairman, (Bruce Watson), the Managing Director (Ian Price) and three Non-Executive Directors who are associated with substantial shareholders (being George Tahija, John Carlile and Christopher Melloy).
John Carlile is a former Managing Director of the Company.
Recommendation 2.2 - The Chairperson should be an independent Director
The Chairman is an independent Non-Executive Director (Bruce Watsonf).
Recommendation 2.3 - The roles of Chairperson and Chief Executive Officer should not be exercised by the same individual
The Chairman is an independent Non-Executive Director (Bruce Watson) and does not share or participate in the role of Chief Executive Officer (Managing Director - Ian Price).
Recommendation 2.4 - The Board should establish a Nomination Committee
The Board has established a Remuneration and Nomination Committee. Where a vacancy arises or it is considered appropriate to increase the size of the Board of Directors, the Committee reviews 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 the 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. The term of office held by each Director in office at the date of this Annual Report is set out in the Directors' Report. All Directors of the Company have direct access to the management of the Company and, where necessary, to external advisers. Each Director has the right to seek independent, professional advice at the expense of the Company. Whilst prior approval of the Chairman is required, this approval should not be unreasonably withheld.
Recommendation 3.1 - Establish a code of conduct to guide the Directors, the Managing Director, the Chief Executive Officer and any other key executives as to:
3.1.1 the practices necessary to maintain confidence in the Company's integrity; and
3.1.2 the responsibility and accountability of individuals for reporting and investigating reports of unethical practices.
The Company has previously established a Code of Ethics which extends to govern the conduct of Directors and the Executive of the Company in both Australia and Indonesia. The Company's Code of Ethics has been posted to the Company's website in the Corporate Governance section.
With the Company's operations now expanding into the development of the Cibaliung Gold Project and potentially securing new projects in Indonesia, the Code of Ethics is to be reviewed to ensure its continuing suitability.
Recommendation 3.2 - Disclose the policy concerning trading in Company securities by Directors, officers and employees.
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 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.
Recommendation 4.1 - Require the Managing Director and the Chief Financial Officer to state in writing to the Board that the Company's financial reports present a true and fair view, in all material respects, of the Company's financial condition and operational results and are in accordance with relevant accounting standards.
The Managing Director does state in writing to the Board that the Company's year-end and half-yearly financial reports present a true and fair view, in all material respects, of the Company's financial condition and operational results and are in accordance with relevant accounting standards. The Company does not, at this point in time, employ a Chief Financial Officer or anyone that carries out this function. The Company's financial statements are prepared by an external accountant who confirms in writing to the Managing Director and the Audit Committee that the Company's financial reports present a true and fair view, in all material respects, of the Company's financial condition and operational results and are in accordance with relevant accounting standards.
Recommendation 4.2 - 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 Company'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 4.3 - Structure the Audit Committee so that it consists of:
- only non-executive directors;
- a majority of independent directors;
- an independent chairperson, who is not chairperson of the Board; and
- at least three members
The Company has established an Audit Committee which is comprised of two members, one being an independent Non-Executive Director (Bruce Watson) and one a Non-Executive Director (John Carlile). 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 4.4 - The Audit Committee should have a formal charter.
The Company has a formal Audit Committee Charter which has been as approved by the Board of Directors.
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 management level for that compliance.
The Managing Director and the Company Secretary are charged with responsibility to ensure compliance with ASX Listing Rule disclosure requirements and to ensure accountability at a senior management level for that compliance.
Recommendation 6.1 - Design and disclose a communications strategy to promote effective communication with shareholders and encourage effective participation at general meetings.
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 to obtain approval for Board recommendations. The Company maintains a website which provides a description of the Company's projects and all material announcements released to the ASX.
Recommendation 6.2 - Request the external auditor to attend the Annual General Meeting and be available to answer shareholder questions about the conduct of the audit and the preparation and content of the auditor's report.
The external accountant and the external auditor are invited to attend all Annual General Meetings.
Recommendation 7.1 - The Board or relevant Board Committee should establish policies on risk oversight and management.
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 Company to identify key business and operational risks and, where possible, will implement policies and procedure to address such risks.
Specifically the Board is conscience of mitigating sovereign, commodity and foreign exchange risks which arise through the activities of the Company.
The Board is provided with regular reporting on the management of operations and the financial condition of the Company aimed at ensuring that risks are identified, assessed and appropriately managed as and when they arise.
Recommendation 7.2 - The Managing Director and the Chief Financial Officer should state to the Board in writing that:
7.2.1 the statement given in accordance with best practice Recommendation 4.1 (the integrity of financial statements) is founded on a sound system of risk management and internal compliance and control which implements the policies of the Board; and
7.2.2 the Company's risk management and internal compliance and control system is operating efficiently and effectively in all material respects.
The Managing Director does provide statements to this effect to the Board. The Company does not presently employ a Chief Financial Officer or anyone that carries out this function.
Recommendation 8.1 - Disclose the process for performance evaluation of the Board, its Committees and individual Directors, and key executives.
Such a performance evaluation for the Board and its members has not taken place in the reporting period. The Board evaluates the performance of key executives on a regular basis.
Recommendation 9.1 - Provide disclosure in relation to the Company's remuneration policies to enable investors to understand (i) the costs and benefits of those policies and (ii) the link between remuneration paid to Directors and key executives and corporate performance.
The Board has determined the level of remuneration for the Managing Director taking into account his experience, the nature of his responsibilities, the Company's objectives and market conditions. During the course of 2004, the Managing Director was charged with the responsibility of finalising a Bankable Feasibility Study in respect of the Cibaliung Gold Project, advancing the Company's objective of achieving gold producer status in Indonesia and implementation of an IPO in respect of the Company's interests in central Victoria. The Managing Director's remuneration was established with these objectives in mind.
The Company is now proceeding with the development of the Cibaliung Gold Project and the search for new projects in Indonesia and the Managing Director has responsibility for ensuring that these objectives are undertaken in a timely and professional manner. The Board reviews the Managing Director's remuneration from time to time to ensure that the best interests of the Company are served and that the level of remuneration is commensurate with both objectives successfully completed and responsibilities undertaken.
The Company does not employ other executives within Australia but does retain consultants as required. Consultants are engaged on an arms length commercial basis according to terms agreed with the Managing Director.
The Managing Director also determines remuneration policies applicable to the Company's employees in Indonesia. The remuneration of employees in Indonesia is determined taking into account employees experience, the nature of responsibilities, and both market and country conditions.
Recommendation 9.2 - The Board should establish a Remuneration Committee
The Board has established a Remuneration and Nomination Committee comprised of two non-executive Directors. The Remuneration and Nomination Committee does not have a formal charter but operates on an as needs basis at the direction of the Board. To date the full Board of Directors has established and reviewed the remuneration for the Managing Director. The Managing Director establishes and reviews the remuneration of employees.
Recommendation 9.3 - Clearly distinguish the structure of Non-Executive Director's remuneration from that of executives.
The Remuneration Committee reviews the remuneration of Non-Executive Directors which in turn must be within the aggregate amount approved for such remuneration by shareholders. With effect from 1 April 2005 all Non-Executive Directors receive remuneration of $30,000 each per annum (plus statutory superannuation where applicable) inclusive of Committee responsibilities. In addition, from 1 April 2005 the Chairman receives remuneration of $45,000 per annum (plus statutory superannuation where applicable).
There are no arrangements for payment of retirement benefits to Non-Executive Directors.
Recommendation 10.1 - Establish and disclose a Code of Conduct to guide compliance with legal and other obligations to legitimate stakeholders.
The Company requires its Directors and employees to observe the highest standards of behaviour and business ethics in respect of its operations in both Australia and Indonesia.
The Company has a Code of Ethics which applies to all Directors, officers and employees in the conduct of their duties on behalf of the Company. Integrity, respect for people and places and a constant drive to improve are core values expected under the Code. The Code deals with responsibilities to shareholders and the marketplace, suppliers of goods and services, employment practices, the community and the conduct of personnel.
All Directors and employees are expected to act in accordance with the law and with the highest standards of propriety. A Director must declare any conflict of interest when it arises, and that Director does not participate in discussions or resolutions pertaining to any matter in which the Director has a material personal interest.
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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