Corporate Governance

The Board of Directors of Power Resources Limited is responsible for the corporate governance of the Consolidated Entity. The Board guides and monitors the business and affairs of Power Resources Limited on behalf of the shareholders by whom they are elected and to whom they are accountable.

The Company acknowledges the requirement to report against the Revised Principles released 2 August 2007 in the annual report for the financial year ended 30 June 2009 and has elected not to make an early transition to the Revised Principles for the 2008 annual report

Power Resources Limited’s Corporate Governance Statement is structured with reference to the Corporate Governance Council’s principles and recommendations, which are as follows:

Principle 1. Lay solid foundations for management and oversight

Principle 2. Structure the board to add value

Principle 3. Promote ethical and responsible decision making

Principle 4. Safeguard integrity in financial reporting

Principle 5. Make timely and balanced disclosure

Principle 6. Respect the rights of shareholders

Principle 7. Recognise and manage risk

Principle 8. Encourage enhanced performance

Principle 9. Remunerate fairly and responsibly

Principle 10. Recognise the legitimate interests of stakeholders

The Board considers that the Consolidated Entity is not currently of a size, nor are its affairs of such complexity to justify the formation of separate or special committees at this time. The Board as a whole is able to address the governance aspects of the full scope of the Consolidated Entity’s activities and to ensure that it adheres to appropriate ethical standards.

The Board continues to review its current practices in light of the ASX Principles of Good Corporate Governance and Best Practice Guidelines 2004 with a view to making amendments where applicable after considering the Consolidated Entity’s size and resources it has available. As the Consolidated Entity’s activities develop in size, nature and scope, the size of the Board and the implementation of any additional formal corporate governance committees will be given further consideration.

During the financial period the Consolidated Entity has complied with each of the 10 Essential Corporate Governance Principles and the corresponding Best Practice Recommendations, other than in relation to the matters specified below:

Principle 2 Recommendation 2.4

There is no nomination committee.

The Board considers those matters and issues arising that would usually fall to a nomination committee. The Board considers that no efficiencies or other benefits would be gained by establishing a separate nomination committee.

Principle 4 Recommendation 4.2, 4.3 and 4.4

There is no audit committee.

The Consolidated Entity and its Board are of a relatively small size and board members are encouraged to consult regularly with the Consolidated Entity’s external auditors, therefore the Consolidated Entity considers that no benefits would be gained by establishing a separate audit committee.

Principle 8 Recommendation 8.1

During the reporting period there was no performance evaluation of the Board, its committees and individual directors.

The current Board has only been in place since May 2007 and did not conduct a performance evaluation during the reporting period. It is proposed to conduct a review during the current financial year.

Principle 9 Recommendation 9.2

There is no separate remuneration committee.

Due to the small size and structure of the Board, a separate remuneration committee is not considered to add any efficiency to the process of determining the levels of remuneration for the directors and key executives. The Board considers that it is more appropriate to set aside time at Board meetings each year to specifically address matters that would ordinarily fall to a remuneration committee. All matters of remuneration will continue to be determined in accordance with Corporations Act requirements, especially in respect to related party transactions. That is, no directors participate in any deliberations regarding his or her own remuneration or related issues.

Structure of the Board

The skills, experience and expertise relevant to the position of director held by each director in office at the date of the annual report is included in the Directors’ Report. Directors of Power Resources Limited are considered to be independent when they are independent of management and free from any business or other relationship that could materially interfere with – or could reasonably be perceived to materially interfere with – the exercise of their unfettered and independent judgment.

In the context of director independence, 'materiality' is considered from both the Consolidate Entity and individual director perspective. The determination of materiality requires consideration of both quantitative and qualitative elements. An item is presumed to be quantitatively immaterial if it is equal to or less than 5% of the appropriate base amount. It is presumed to be material (unless there is qualitative evidence to the contrary) if it is equal to or greater than 10% of the appropriate base amount. Qualitative factors considered include whether a relationship is strategically important, the competitive landscape, the nature of the relationship and the contractual or other arrangements governing it and other factors that point to the actual ability of the director in question to shape the direction of the Consolidated Entity’s loyalty.

In accordance with the definition of independence above, and the materiality thresholds set, the following directors of Power Resources Limited are considered to be independent:

Name	Position
Robert Collins	Non-Executive Chairman - appointed 20 October 2009
Michael Scivolo Sol Majteles	Non-Executive Director - appointed 20 October 2009 Non-Executive Director - appointed 20 October 2009

There are procedures in place, agreed by the Board, to enable directors in the furtherance of their duties to seek independent professional advice at the Consolidated Entity’s expense.

The term in office held by each director in office at the date of this report is as follows:

Name	Term in Office
R Collins	Since 20 October 2009
M Scivolo	Since 20 October 2009
S Majteles	Since 20 October 2009

Appointments to Other Boards

Directors are required to take into consideration any potential conflicts of interest when accepting appointments to other Boards.

Ethical Standards

All Directors and employees are expected to act with the utmost of integrity and objectivity, striving at all times to enhance the reputation and performance of the Consolidated Entity.

Conflict of Interest

In accordance with the Corporations Act 2001 and the Consolidated Entity’s Constitution, Directors must keep the Board advised, on an ongoing basis, of any interest that could potentially conflict with those of the Consolidated Entity. Where the Board believes that a significant conflict exists the Director concerned does not receive the relevant board papers and is not present at the meeting whilst the item is considered.

Directors Dealings in Company Securities

The Constitution permits Directors to acquire securities in the Consolidated Entity. Company policy prohibits Directors from dealing in Consolidated Entity securities whilst in possession of price sensitive information. Directors must notify the Company Secretary once they have bought or sold shares in the Consolidated Entity or exercised options over ordinary shares. In accordance with the provisions of the Corporations Act 2001 and the Listing Rules of the Australian Stock Exchange, the Consolidated Entity on behalf of the Directors must advise the Australian Stock Exchange of any transactions conducted by them in shares and/or options in the Consolidated Entity.

Nomination Committee

The full Board carries out the functions of the Nomination Committee. The Board did not meet formally as the Nomination Committee during the financial period, however any relevant matters were discussed on as-required basis from time to time during regular meetings of the Board.

Audit Committee

The Consolidated Entity does not have an Audit Committee. The role of the Audit Committee has been assumed by the full Board. The Board as the Audit Committee meets at least bi-annually (in respect of the full year and half year reports).

Performance Evaluation of the Board and its Members

During the financial period an evaluation of the Board and its members was not formally carried out. To date, there has been no formal process in place for performance evaluation. During the reporting period an evaluation of the Board was informally carried out by the Chairman.

Consolidated Entity’s Remuneration Policies

Remuneration levels for executives are competitively set to attract the most qualified and experienced candidates, taking into account prevailing market conditions and individual’s experience and qualifications. Each of the non-executive directors receives a fixed fee for their services as directors. There is no direct link between remuneration paid to any of the directors and corporate performance such as bonus payments for achievement of certain key performance indicators.

For a full discussion on the Consolidated Entity’s remuneration philosophy and framework and the remuneration received by directors and executives in the current period please refer to the remuneration report, which is contained within the Directors Report.

Existence and Terms of any Schemes for Retirement Benefits for Non-Executive Directors

There are no retirement benefits for non-executive directors.

Policy for Trading in Company Securities

Introduction
1. The Company recognises and enforces legal and ethical restrictions on trading in its securities by key management personnel within and external to the Company. The terms of this securities dealing policy apply to the Company’s directors, secretaries, senior executives and such employees and consultants of the Company as are nominated by the Company Secretary from time to time (Key Management Personnel).

Communication
2. This policy will be communicated to all Key Management Personnel and will be placed on the Company’s website.

Insider Trading Laws
3. Insider trading laws cover all directors, officers, employees and consultants of the Company. If a person has inside information which is not publicly known then that person shall not trade in the Company’s shares or advise or procure another person to trade in the Company’s shares or pass that information to someone else knowing (or where that person should reasonably have known) that the other person would, or would be likely to use that information to trade in, or procure someone else to trade in, the Company’s shares.

Trading Restrictions
4. In addition to any prohibitions imposed under Insider Trading laws, trading by Key Management Personnel in the Company’s securities is subject to the following limitations:

4.1 No trading in the Company’s securities shall take place during the closed period of two weeks preceding release of each quarterly report, half-yearly financial report, and annual report of the Company.

4.2 No trading in the Company’s securities shall take place, directly or indirectly, where it is known, or ought reasonably to have been known, by the person intending to trade, that information exists that has not been released to the ASX, and where that information is of a type that could reasonably be expected to encourage buying or selling, were that information known by others.

4.3 The Chairman may declare other closed periods from time to time.

Hardship
5. During any of the periods specified in section 4, Key Management Personnel may not trade in the Company’s securities, without obtaining the Chairman’s prior written consent. Permission will only be granted to trade to the extent reasonably necessary to avoid or ameliorate documented hardship and suffering, or as required by other extenuating circumstances.

Directors’ trading and disclosures
6. Within twenty four hours of a director being appointed to the Board, resigning or being removed from the Board, or trading in the Company’s securities, full details of the Director’s notifiable interests in the Company’s securities and changes in such interest must be advised to the Company Secretary so that a record is kept within the Company and so that necessary ASX notifications will occur.

All directors must notify the Company Secretary of any margin loan or similar funding arrangement entered into in relation to the Company’s securities and any variations to such arrangements, including the number of securities involved, the circumstances in which the lender can make margin calls, and the right of the lender to dispose of the securities.

Excluded trades
7. The following trades are excluded from the operation of this policy:

• dividend reinvestment plans;
• share purchase plans;
• rights issues;
• accepting takeover offers;
• pre-approved non-discretionary trading plans which are not entered into or subsequently amended during the periods described in the Trading Restrictions section of this policy; and margin calls.