Corporate Governance
The Board of Directors of Western Plains Resources Ltd (“WPG”) is responsible for corporate governance and strives for high standards in this regard.
The Board monitors the business and affairs of WPG on behalf of the shareholders by whom they are elected and to whom they are accountable.
The Board draws on relevant best practice principles particularly the Corporate Governance Principles and Recommendations (2nd edition) issued by the ASX Corporate Governance Council in August 2007 and these are revised on an ongoing basis.
WPG endeavours to adhere to the best practice principles proposed by ASX, mindful that there may be some instances where compliance is not practicable for a company of WPG's size.
In many cases the Company is achieving the standard required.
In other cases the Company will have to consider new arrangements to enable compliance.
In a limited number of instances, the Company may not meet certain standards set out in the recommendations, largely due to the standards being considered by the Board to be unduly onerous for the company.
The following paragraphs set out the Company’s position relative to each of the 8 principles contained in the ASX Corporate Governance Council’s report of August 2007, the extent to which they have followed the recommendations, identifying any recommendations that have not been followed and reasons for not doing so.
The following paragraphs set out the Company’s position relative to each of the 8 principles contained in the ASX Corporate Governance Council’s report.
Principle 1: Lay solid foundations for management and oversight
The Company has not yet formalised in a written sense and disclosed the functions reserved to the Board and those delegated to management.
The Company has a Board of seven Directors (three executive Directors and four Non-Executive Directors) and a small team of executives, the latter of which have defined duties and responsibilities under the terms of their engagement.
As the Company continues to grow there will be a progressive definition of functions reserved to the Board and those delegated to management and processes for evaluating performance. Informal performance evaluations by the Board have taken place.
These arrangements are considered appropriate for the size of the Company.
Principle 2: Structure the Board to add value
The Executive Chairman’s role is exercised separately from the Executive Directors, but is not independent. The Chairman is considered, notwithstanding that he is not independent, to be an appropriate Chairman of the Company based on his skills and abilities.
The majority of Directors are not independent. Three of the Directors are Executive Directors (Messrs Duffin, Roberts and Jones) and two of the non-executive Directors are representatives of substantial shareholders (Messrs Richardson and Lim). The other two non-executive Directors (Messrs Dean and Mutton) are independent.
Given the nature and size of the Company and its business interests, the Board is of the view that there is an adequate and broad mix of skills and that the experience of each of the directors enables then to be aware of and capable of acting in an independent manner and in the best interests of the shareholders.
The Company has an Audit and Risk Committee, Remuneration Committee and Corporate Governance and Nomination Committee.
Each committee comprises the non-Executive Directors of the Company (Messrs Richardson, Lim, Dean and Mutton) and are chaired as follows:
Audit and Risk – D R Mutton
Remuneration – L A Dean
Corporate Governance and Nomination – Lim See Yong
Formal, written charters for the committees have not been adopted however are being developed and will be adopted during the forthcoming year.
Each Director of the Company has the right to seek independent professional advice at the expense of the Company. Prior approval of the Chairman is required, but this will not be unreasonably withheld.
Principle 3: Promote ethical and responsible decision-making
The Company has adopted a policy concerning trading in its securities by Directors, management, staff and significant consultants which is set out below.
The Company does not have a formal code of conduct, reflecting the Company’s size and the close interaction of individuals throughout the organisation.
The Board of Directors continues to review, determine and implement the most appropriate and effective operational procedures.
Principle 4: Safeguard integrity in financial reporting
The Company has an Audit and Risk Committee. A formal, written charter for the Audit and Risk Committee has not been adopted however is being developed and will be adopted during the forthcoming year.
The Audit and Risk Committee consists of the four non-Executive Directors, Messrs Richardson, Lim, Dean and Mutton and is chaired by Mr Mutton who is an independent director. The qualifications of each member are set out in the Directors Report. These directors are considered to have applicable expertise and skills for this Committee. This structure does not meet the ASX’s guidance regarding independence, in that it does not have a majority of independent directors, however is considered to have an adequate and broad mix of skills and that the experience of each of the directors enables then to be aware of and capable of acting in an independent manner and in the best interests of the shareholders.
The Audit and Risk Committee reports to the Board after each committee meeting. There are usually two meetings of the Audit and Risk Committee each year. In conjunction with the Board, the Audit and Risk Committee meets with and reviews the performance of the external auditors (including scope and quality of the audit).
The Company continues to review its procedures to ensure compliance with the recommendations set out under this principle.
Senior management confirms that the financial reports represent a true and fair view and are in accordance with relevant accounting standards.
The Technical Director and the Chief Financial Officer or Executive Director/Company Secretary state in writing to the Board that the Company’s financial reports are complete and present a true and fair view, in all material respects, of the financial condition and operational results of the Company are in accordance with relevant accounting standards.
Principle 5: Make timely and balanced disclosure
The Company, its Directors and consultants are highly cognisant of the ASX’s continuous disclosure requirements and operate in an environment where strong emphasis is placed on full and appropriate disclosure to the market.
Whilst the Company does not have formal written policies regarding disclosure, it uses strong informal systems underpinned by experienced individuals. The Company has adopted a policy concerning trading in its securities by Directors, management, staff and significant consultants which is set out below.
Principle 6: Respect the rights of shareholders
All significant information disclosed to the ASX is posted on the Company’s website as soon as it is disclosed to the ASX.
When analysts are briefed on aspects of the Group’s operations, the material used in the presentation is released to the ASX and posted on the Company’s website. Procedures have also been established for reviewing whether any price sensitive information has been inadvertently disclosed, and if so, this information is also immediately released to the market.
The Company does not have a communications strategy to promote effective communication with shareholders, however the Company promotes its website and the electronic distribution of data to shareholders as the favoured course of communication.
The Company actively answers all questions and communication from shareholders, where appropriate, in a concise and timely fashion.
The Company has requested its external auditor to attend general meetings and this has been supported by the Company’s audit partner at BDO Kendalls.
Principle 7: Recognise and manage risk
The Company is making the transition from junior explorer to producer, with the expectation that production of iron ore will commence in 2009. As a result, the Company will face an enhanced level of exposures to risks, over time.
Risk management arrangements are the responsibility of the Board of Directors and senior management collectively. Specific operating risk management procedures will be implemented at the Company’s operations in South Australia. These procedures will be governed by a range of best practice and statutory requirements.
Risk factors are discussed regularly at Board meetings and an Occupational Health and Safety programme was formally adopted by WPG in September 2008.
The Board has received the declarations required to be made to the Directors from the Executive Director and Chief Financial Officer in accordance with section 295A of the Corporations Act 2001 for the financial year ended 30 June 2008.
Principle 8: Remunerate fairly and responsibly
The Company has a Remuneration Committee comprising the four non-Executive Directors, Messrs Richardson, Lim, Dean and Mutton and is chaired by Mr Dean. The Committee meets as and when required, to review performance matters and remuneration. The qualifications of each member are set out in the Directors Report. This structure does not meet the ASX’s guidance regarding independence, in that it does not have a majority of independent directors, however is considered to have an adequate and broad mix of skills and that the experience of each of the directors enables then to be aware of and capable of acting in an independent manner and in the best interests of the shareholders.
A formal, written charter for the Remuneration Committee has not been adopted however is being developed and will be adopted during the forthcoming year.
Directors believe that the size of the Company makes individual salary and consultant negotiations more appropriate than formal remuneration policies.
The Remuneration Committee will seek independent external advice and market comparisons as necessary, when considering Director and senior executive emoluments. It was resolved in September 2008 that the Remuneration Committee and Board acquire external, independent advice on remuneration issues prior to the June 2009 remuneration review process.
In accordance with Corporations Act requirements, the Company discloses the fees or salaries paid to all Directors, plus the five highest paid officers of the Company.
The Company has an Employees and Officers Share Option Plan that was introduced in 2004 and a number of option issues have been made under that plan in the year ended 30 June 2008. Details are provided in the Directors Report.
Ethical Standards
The Board’s policy is for the Directors and management to conduct themselves with the highest ethical standards. All Directors and employees will be expected to act with integrity and objectivity, striving at all times to enhance the reputation and performance of the Company.
Securities Trading and Trading Windows
Directors, employees and key consultants must consult with the Chairman of the Board or the Executive Director before dealing in shares of the Company.
Purchases or sales in the Company’s shares by Directors, employees and key consultants may not be carried out other than in a “window”, being the period commencing two days and ending 30 days following the date of announcement of the Company’s annual or half yearly results, quarterly report or a major announcement leading, in the opinion of the Board, to an informed market.
However, Directors, employees and key consultants are prohibited from buying or selling Company shares at any time if they are aware of price sensitive information that has not been made public.
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