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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:
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:
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.
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