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You are here:About Us > Corporate Governance

The Board of Directors oversees and monitors the business and affairs of the Company on behalf of the shareholders by whom they are elected and to whom they are accountable. To assist the Board in discharging its responsibilities, the Board has adopted the following principles of corporate governance that are considered appropriate for the present size of the Company and that unless otherwise explained, follows the Corporate Governance Principles and Recommendations of the ASX Corporate Governance Council which is chaired by the Australian Securities Exchange (ASX).

Principle 1: Lay solid foundations for management and oversight.

Board Charter

The Board is responsible for:
1. developing, approving and monitoring implementation by management of corporate policy, strategy and performance objectives;
2. developing and monitoring adoption of the most appropriate principles of corporate governance and reporting and explaining any departure from the Corporate Governance Principles and Recommendations of the ASX Corporate Governance Council;
3. reviewing, ratifying and monitoring systems of accountability, risk management and internal control, codes of conduct and legal compliance;
4. approving and monitoring management implementation of financial and other reporting;
5. approving and monitoring the progress of major capital expenditure, capital management, and acquisitions and divestments delegated to management for implementation;
6. approving and monitoring the progress of major capital expenditure, capital management, and acquisitions and divestments delegated to management for implementation;
7. reviewing, ratifying and monitoring systems implemented by management for health, safety and environment management and controls;
8. appointing, removal and evaluating the performance of the chief executive officer and senior executives and disclosing the process; and
9. selecting and appointing new Directors to the Board, and evaluating the performance of all members of the Board.

Principle 2: Structure the Board to add value

Composition of the Board

The composition of the Board is determined in accordance with the following principles and guidelines:
1. the Board shall comprise at least three Directors, increasing where additional expertise is considered desirable in certain areas to a maximum of nine Directors;
2. at each annual general meeting a Director (except for the Managing Director) appointed since the last annual general meeting, one third of the other Directors, and any Director for whom that annual general meeting would be his third annual general meeting or who has been in office for three years since his last appointment, shall automatically retire and be eligible for re-election;
3. to the extent practicable and having regards to the stage of development of the Company, the Board shall comprise a majority of non-executive and independent Directors with the Chairman being a non-executive and independent person; and
4. Directors to bring characteristics that allow a mix of qualifications, skills, expertise and experience.

The Board reviews its composition on an annual basis to ensure that it has the appropriate mix of expertise and experience. Where a vacancy exists, for whatever reason, or where it is considered that the Board would benefit from the services of a new Director with particular skills and expertise, the Board selects that new Director from appropriate candidates with relevant qualifications, skills, expertise and experience.

The Board presently is composed of four Founding Directors and shareholders. There are two non-executive Directors, Mr K M Fan (Chairman) and Dr D W King (Deputy Chairman). Mr J Wang acts as Chief Financial Officer and Company Secretary and therefore has an executive function and Mr G Zheng is an Executive Director. Dr D W King is considered by the Board to be an independent Director. Mr K M Fan, Mr J Wang and Mr G Zheng jointly hold substantial relevant interests in the Company through their holding company Aumeng Investments Limited and are not considered independent. Consequently, the Company is not complying with Principle 2 of the Corporate Governance Principles and Recommendations of the ASX Corporate Governance Council at this early stage of development to contain costs. As Founding shareholders, the Board has interest to add value.

Nomination

Given the present size of the Company, the existing Board structure is able to meet the needs of the Company in the examination of selection and appointment practices without the establishment of a nomination committee of the Board.

Independent Professional Advice

Each Director has the right to seek independent professional advice at the Company’s expense. However, prior approval from the Chairman is required, which cannot be unreasonably withheld.

Performance Assessment

The performance of individual Directors is reviewed annually by the Board under a peer review procedure. Any identified areas of unsatisfactory performance are addressed with the individual Director concerned.

Remuneration Committee

The Board has established a Remuneration Committee consisting of two Non-Executive Directors. The Remuneration Committee reviews the remuneration packages and policies applicable to all Directors and senior executives on an annual basis and makes recommendations to the Board. The policy is for remuneration levels to be competitively set to retain and/or attract qualified and experienced Directors and senior executives. Where necessary, the Remuneration Committee obtains independent advice on the appropriateness of remuneration packages.

Principle 3: Promote ethical and responsible decision-making

Code of Conduct

Ethical Standards

The Board’s policy is for the Directors and management to conduct themselves with the highest ethical standards in addition to compliance with their legal obligations and having regard to the reasonable expectations of the Company’s stakeholders. All Directors and employees are expected to act with integrity and objectivity, striving at all times to enhance the reputation and performance of the Company.


In particular, Directors and employees must at all times: manage situations where their personal interests may conflict with the interests of the Company; not take advantage of property, information or position for personal gain; not compete with the Company; not use non-public information except where disclosure is authorised or legally mandated; deal fairly with customers, suppliers, competitors and employees; protect and make proper use of the Company’s assets; comply with laws and regulations, and actively promote compliance; and report any unlawful or unethical behaviour knowing that they will have proper protection by the Board when making such reports in good faith.

Securities Trading

The Board has set a policy on dealing with securities of the Company. Directors and employees, and their family members and close associates, may not buy, sell or subscribe for any securities of the Company, whether on their own account or on behalf of another person while in possession of price sensitive information which is not generally available to the public. In particular if the Company is listed on the Australian Securities Exchange (“ASX”), they may not deal in the securities of the Company during a two week period before the release to ASX of the quarterly report, the half year or full year financial results, the half year report or the annual report of the Company until one day after the release of those reports or results to ASX. They may not also deal in securities of the Company during the period when a material transaction is being negotiated by the Company or drilling is being carried out until one day after an announcement has been made to ASX on the results.

Principle 4: Safeguard integrity in financial reporting

Audit Committee

The Board has established an Audit Committee chaired Dr D W King, a non-executive and independent Director, to assist in matters relating to the audit functions and to safeguard the integrity of the Company’s financial reporting. Mr J Wang is also a member of the Audit Committee. The composition of the Audit Committee is not able to comply with the recommendation of the ASX Corporate Governance Council because of the small size of the Board. However, the Board considers that the experience and qualifications of the Audit Committee members will provide the formal processes of an audit committee to assure the integrity of the financial statements of the Company and the independence of the external auditor.


Senior executives and the auditors are invited to attend meetings as required to assist the Audit Committee with its deliberations. The Audit Committee shall meet at least two times a year.


The Audit Committee ensures that the auditor is invited to attend all general meetings of shareholders.


Under its formal charter, the Audit Committee is responsible for:
1. reviewing the quality and integrity of the Company’s financial reporting to shareholders, ASX and the Australian Securities and Investments Commission;
2. reviewing the accounting policies, internal controls, practices and disclosures to assist the Board in making informed decisions, with direct access to management;
3. reviewing the scope and outcome of external audits, with direct access to external auditors;
4. >nominating external auditors and reviewing the adequacy of existing external audit arrangements;
5. ensuring the independence of external auditors and reviewing any other services provided by them;
6. reviewing the Company’s risk management systems; and
7. reporting to the Board on its meetings and the results of any assessments and reviews.

Acceptable Services

The auditing firm may provide audit and audit-related services that are consistent with the role of auditor, although outside the scope of the audit required under the Corporations Act 2001. These include audit-related services and reviews required by third parties. Examples include:
· financial audits;
· audits of regulatory returns;
· reviews undertaken for trustees of convertible notes, bankers, joint venture partners and owners of royalty and net profit interests; and
· reviews of the adequacy of controls and recommendations for improvements.

Unacceptable Services

The auditing firm should not provide services that are perceived to be materially in conflict with the role of auditor. These include investigations and consulting advice and subcontracting of operational activities normally undertaken by management, and where the auditor may ultimately be required to express an opinion on its own work. Examples include:
· due diligence on potential acquisitions or investments/divestments;
· advice on deal structuring and assistance in deal documentation;
· tax planning and strategy;
· designing or implementing new IT systems or financial controls;
· advice on sales and purchasing contracts;
· book-keeping;
· valuations;
· executive recruitment and appointments;
· senior management secondments; and
· internal audit activities.

Services Subject to Specific Approval

The auditing firm may be permitted to provide non-audit services that are not perceived to be materially in conflict with the role of auditor, subject to the express approval of the Audit Committee. Examples include:
· advice on appropriate accounting standards; and
· review of legislation and advice on its application to the Company.

Exception

An exception can be made to the above policy where the variation is in the interests of the Company and arrangements are put in place to preserve the integrity of the audit of the Company’s financial statements. Any such exception requires the approval of the Board.

Principle 5: Make timely and balanced disclosure

Listing Rules Disclosures

The Board’s policy is for all investors to have equal and timely access to material information concerning the Company, including its financial position, performance, ownership and governance.
The Board shall delegate the function of continuous disclosure to shareholders and as required (when the Company is listed on ASX) under ASX’s Listing Rules to the Executive Directors Director and the Company Secretary to assess the type of information that needs to be disclosed and to ensure that Company’s announcements are made in a timely manner, are factual, do not omit material information and are in compliance with the Listing Rules. Information which is considered to be price sensitive is approved by the Board before its release.

Shareholder Communication

The Board shall establish practices to facilitate communication with the Company’s shareholders. The Executive Directors and the Company Secretary oversee this process through the Company’s website and direct mailing by email and/or post. Regular briefings are held with professional investors. Prior to such briefings, information to be given is first released to ASX (when the Company is listed on ASX) and later broadcast to shareholders/investors who have registered their email address with the Company.

Business Risk

The Board monitors and receives advice as required on areas of operational and financial risk, and considers appropriate risk management strategies.
Specific areas of risk that are identified are regularly considered at Board meetings. Included in these areas are performance of activities, human resources, health, safety and the environment, continuous disclosure obligations, asset protection and financial exposures.

Environment, Health and Safety Management

The Board recognises the importance of environmental, occupational health and safety issues, and is committed to the highest standards of performance. All Directors and employees are required to comply with all relevant legislation, continually assess and improve the impact of the Company’s operations on the environment, and encourage the adoption of similar standards by the Company’s principal suppliers, contractors and joint venture partners.
The Board regularly reviews risk management with management at Board meetings.

Financial Report

To assist the Board in approving the Company’s financial report, the Executive Director and the Chief Financial Officer are required to present a statement with regard to the integrity of the financial statements of the Company to confirm to the Board that the Company’s financial statements present a true and fair view in all material respects of the Company’s financial condition and that operational results are in accordance with applicable accounting standards and the Corporations Act 2001. In addition management is required to complete a Directors’ Questionnaire to support the statement.