The Board of Directors (the Board) of Marathon Resources Limited (the Company) is committed to achieving and demonstrating the highest standard of Corporate Governance.
The Board guides the affairs of the Company on behalf of the shareholders by whom they are elected and to whom they are accountable. The Board has responsibility for the overall Corporate Governance of the Company including its strategic direction, establishment of goals for its management and monitoring the achievement of these goals.
The individual Directors recognise that their primary responsibility is to the owners of the Company, its shareholders, while simultaneously having regard for the interests of all stakeholders of the Company and the broader community.
This statement outlines the Company’s Corporate Governance Practices in place during the financial year. The Company’s statement is made based on the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations with 2010 Amendments.
Although the ASX Corporate Governance Council’s Recommendations are not mandatory, under listing rule 4.10.3 companies are required to provide a statement in their annual report disclosing the extent to which they have followed the recommendations in the reporting period, identifying any principles which have not been followed with reasons for not having done so.
The revised principles and the Company’s compliance with each principle is as follows:
1. Lay solid foundations for management and oversight
The role of the Board is covered by the Corporations Act 2001, ASX listing rules and the constitution of the Company. Its primary role is to represent shareholders and to promote and protect the interests of the Company with a view to creatiung long term shareholder wealth. In achieving these ends the Board overviews the development of strategies, the setting of objectives, the establishment of policies to be implemented by management and assumes responsibility for ensuring adequate systems of internal control, risk management and financial reporting. The Board also ensures the provision of resources to senior management to achieve the Company’s objectives and undertakes subsequent monitoring of their performance.
The Board Charter is set out on the Company’s website
Pursuant to their appointment Non-Executive Directors usually have limited involvement in the day to day management of the Company, unless the circumstances of the Company requires otherwise. The Board has appointed a Director as Chief Executive Officer, responsible for the operational and administrative performance of the Company and the provision of relevant information and input to the Board to enable it to discharge its responsibilities.
Senior management are subject to an Annual Performance Evaluation which is undertaken by the Board. The reviews are internal. The use of external facilitators is not warranted as the members of the Board have direct access to Management. The Chairman presides over the review process with input from other Directors. Review of senior staff is ongoing.
2. Structure of the Board to add value
The majority of the Board consists of non executive Directors. Those Directors holding shares in the Company either directly or indirectly, are not considered to be substantial shareholders. No non executive Director of the Company has a material contractual relationship with the Company, other than as a Director. No Director is or has been employed in an executive capacity or acts or has acted as a material professional advisor, other than Dr Linley who was appointed to the role of CEO 10th June 2009.
Corporate Governance best practice recommends the majority of the Board comprise independent directors, with “independence” in ASX Recommendation 2.1 taken into account for this purpose. Of the Company’s non executive Directors, Mr Zeng is Managing Director of Citic Australia Pty Ltd, a substantial shareholder of the Company, and may be perceived as a non independent Director. Messrs Williams and Schacht are considered independent Directors. Despite the fact that the Board does not consist of a majority of independent Directors, the Board considers it presently has an appropriate balance of skills, experience and independence to properly fulfil its role.
The role of the Chair is undertaken by a separate dedicated independent Director.
The Board is cognisant of the need to review the composition of the Board from time to time to ensure an appropriate balance of skills, diversity, independence and experience relevant to the nature and extent of company operations and its future direction at any given point of time.
The Board does not have a separate nomination committee to oversee the procedure for the selection and appointment of new Directors.
The scope and size of the Company dictates a small independent Board. When a need arises and where it is considered the Board would benefit from the appointment of a Director with specific skills and experience, all members of the Board participate in seeking out appropriate potential candidates. In some instances assistance from external sources may be sought if necessary.
Directors (other than the CEO) are subject to retirement by rotation at each Annual General Meeting, with no Director (other than the CEO) entitled to hold office without re-election past the third Annual General Meeting since their appointment or 3 years, whichever is the longer. The Board has in the past and may regularly change members and therefore does not undertake a formal performance evaluation of either each of the Directors or the Board as a whole.
The statutory Directors’ report contained in each Annual Report sets out relevant experience and expertise on each Director, their period in office and status.
More detailed particulars of each Director are set out in the company’s website
Access to Information
Any Director has the right to seek independent professional advice in connection with their duties and responsibilities at the Company’s expense.
Each Director has access to the Company Secretary. The Secretary is accountable to the Board through the Chair on all governance matters. The appointment or removal of the Secretary is a matter of decision for the Board.
3. Promote Ethical and responsible decision-making
The Directors are aware of and subscribe to the Code of Conduct of the Australian Institute of Company Directors.
Additionally the Company has a Code of Conduct built on highest standards of ethical behaviour. Directors and employees are expected to act with the utmost personal integrity, as required by the Company’s Code of Conduct.
The Company’s Code of Conduct is set out on the Company’s website
To meet these obligations Directors and Senior Management seek to:
- Comply with all legal obligations in a timely manner and promote active compliance within the Company.
- Adopt practices necessary to meet the reasonable expectations of all of the Company’s stakeholders and the wider community.
Specifically Directors and senior management must:
- Use the Company’s assets appropriately and efficiently for the Company’s benefit.
- Ensure the securities market is fully informed of all matters requiring disclosure.
- Not misuse information or their position for their own personal gain.
- Avoid or fully disclose conflict of interest events or situations.
Further, Directors, management, employees, contractors and consultants must disclose to the Board immediately any situations where there is a real or apparent conflict of interest between them as individuals and the interest of the Company. The Board must consider and deal with the conflict in the appropriate manner.
If required by the Constitution or law, a Director who has a conflict of interest must leave a Board meeting but only for such a period as the Board meeting is addressing the specific matter in relation to which the Board member has a conflict of interest.
Trading in company securities
The Company’s Share Trading Policy sets out the circumstances in which the Company’s officers, employees and contractors and consultants to the Company that are engaged in work for the Company (Representative) may trade or otherwise deal in the Company’s securities.
The Share Trading Policy prohibits any trading by a Representative whilst in possession of inside information, in strict compliance with the requirements of section 1043A of the Corporations Act 2001.
The Share Trading Policy also establishes trading windows for the Representatives of the Company that have access to the Company’s financial, technical or other price sensitive information and prescribed exceptions to trading in a precluded period.
Representatives must seek written consent from the Managing Director (or the Chairman, in the case of the Managing Director) prior to trading in the Company’s securities.
Any acquisition or disposal of securities by Directors is reported to the ASX in compliance with the Corporations Act and ASX listing rules.
The Company’s Share Trading Policy is set out on the Company’s website
Diversity
The Company does not have a policy concerning diversity. The Board and senior management recruit persons based on skills and experience appropriate for the role concerned and do not discriminate based on gender, age, ethnicity or cultural background.
The Board does not set objectives for achieving gender diversity.
4. Safeguard integrity in financial reporting
Directors have established an Audit and Risk committee comprising the Board’s three non executive Directors, Messrs Williams, Zeng and Schacht.
The committee is chaired by an independent Director who is not the Chair of the Board.
The members of the Audit and Risk committee are all financially literate, with Mr Williams being a chartered accountant, holding a Bachelor of Economics and Mr Zeng holding a Master's Degree in International Finance.
The annual Statutory Directors Report details the number of meetings held and attendees.
The Audit and Risk committee charter is set out on the Company’s website
The committee’s principle responsibilities are:
- review the integrity of the Company’s financial reporting and oversee the independence of external auditors,
- liaise with external auditors on matters arising from conduct of external audits,
- review compliance with laws, regulations, rules and policies that apply to the Company,
- review management reporting and financial controls,
- overview company policy and procedure development,
- assess and manage the Company’s risk profile.
5. Make timely and balanced disclosure
The Board’s policy is to ensure strict compliance with the continuous disclosure regime to ensure that its obligations to disclose relevant information under the ASX Listing Rules and the Corporations Act 2001 (Cth) are met.
Board processes are structured to ensure all information particularly any that may be considered price sensitive is released in a timely manner, is factual and does not omit material information.
Company announcements to the ASX are simultaneously posted on the Company’s website.
The Company uses external geological services in developing the material for ASX JORC code reporting to ensure balance in reporting of resources.
An external Public Relations Consultant is used to disseminate information released to the market to ensure the widest possible circulation of material to external parties including Stockbrokers, Analysts, the media and most importantly the Company’s shareholders.
The Company has not publicly disclosed a formal disclosure policy and therefore has not complied with ASX Recommendation 5.1. Given the size of the Company, the Board does not consider publication of a formal disclosure document to be necessary. The Board takes ultimate responsibility for these matters.
6. Respect the rights of shareholders
The Board seeks to ensure that shareholders are informed of all major developments affecting the Company’s state of affairs.
In addition to communication through its statutory reporting obligations via:
- The Annual Report
- The Interim Report
- Quarterly cash flow and activities reports
- ASX disclosures
- Explanatory memorandum for AGM resolutions,
the Company uses its website and external public relations services to disseminate information as widely as possible.
A Communications Manager is employed by the company to among other things, promote the interests of shareholders.
The Company periodically issues a newsletter and uses audio/visual presentations in some media releases.
The statutory annual report is available to shareholders electronically.
The Company requires the attendance of a representative of its external auditors at its annual general meeting and encourages shareholders to attend and raise questions with the auditor’s representative or Directors.
7. Recognise and manage risk
The Board assumes ultimate responsibility for establishing the Company’s risk profile focus and for ensuring management has developed and adequately reports against sound systems of risk control.
The Audit and Risk Committee is also responsible for risk management and must ensure that controls are in place, to monitor all levels of management in the efficient and effective discharge of their responsibilities by the use of independent analysis, appraisals, advice and recommendations.
The size and nature of the Company’s operations is such that risk is focused on a smaller than normal range of potential adverse events while not impacting potential opportunities.
The Company’s Risk management policy is set out on the Company’s website
Key areas of risk which are regularly monitored are:
Operational risk
- acquisition of new exploration tenements and their subsequent status,
- land access and native title considerations,
- physical exploration activities
These matters are regularly reported on to the Board in Managements’ Operation Reports.
Indigenous people
The Company acknowledges and accepts the bond and special interests that the indigenous people have over areas where the company carries out operations.
The Company proactively seeks to foster a respectful, cooperative and trusting relationship through honest and open communication with them and their advisors.
The Company recognises the legal, social, and economic obligations to develop and sustain relationships with Indigenous Traditional Owners at all sites. It recognises that during exploration and mining operational phases, it must comply with State and Commonwealth legal requirements relating to Native Title matters.
HSE&C
The Company operates under a health, safety and environment system developed by management. The Board periodically reviews the adequacy and effectiveness of the system.
A schematic overview has been posted on the Company’s website
The primary focus in this area is environmental management and compliance.
Environment
The Company has always recognised the importance of sound environmental practice and promoted environmental awareness by all of its employees and contractors. Major exploration operations by the Company are conducted in an area of the Flinders Ranges which is environmentally sensitive.
This necessitated a commitment to continuous improvement of practices. The Board following independent appraisal initiated the development of a full EMS system ultimately leading to 1SO 14001 standard.
Consultants were appointed to assist the Company in developing its EMS system, the system was finalised in the first half of 2009/2010 financial year.
Financial reporting
Management operate with Board defined limits of authority and a requirement to present monthly financial reports at a detailed level to Directors. These requirements assist in managing the risk of failure to achieve business objectives and protecting the Company’s assets.
In accordance with the requirements of Sec 295A of the Corporations Act 2001 the Board confirms it has received assurance from the General Manager / CEO and Chief Financial Officer for the last financial year that:
- Financial records have been properly maintained in accordance with section 286 of the Corporations Act.
- Financial statements and notes are in compliance with accounting standards as required by Sec 296 of the Corporations Act.
- Financial statements and notes give a true and fair view of the financial performance and position at balance date required by Sec 297 of the Corporations Act.
- Risk management and internal compliance and control systems are operating efficiently and effectively in all material respects.
Confirmation that the Board has received the assurance is set out in the Statutory Annual Directors’ Declaration.
8. Remunerate fairly and responsibly
The performance in establishing the remuneration of Executive Management and Executive Directors, when such office is held, is reviewed by the Board with the exclusion of the Executive concerned.
The remuneration of Non Executive Directors is set by reference to an aggregate cap approved by shareholders from time to time at the annual general meeting.
External advice is sought on remuneration matters when deemed necessary.
The company does not have a remuneration committee, as this role is undertaken by the Board.
The details of remuneration of Directors and Senior Management are set out in the Statutory Director’s Report. The contribution of each Non Executive Director is taken into account in arriving at individual remuneration levels having regard for reasonable and competitive market rates.
In accordance with listing rule 4.10.3 the company summarises its departures from the ASX’s principles of good corporate governance recommendations.
Corporate Governance Recommendations |
Notification of Departure |
Explanation |
|
|---|---|---|---|
2.1 |
Majority of Directors should be independent |
Two of the four Directors are independent |
The Board considers it presently has an appropriate balance of skills, experience and independence to properly fulfil its role |
2.4 |
The Board should establish a |
The Company does not have a nomination committee |
The Board is of the opinion that it is not of a sufficient size to warrant a nomination committee at this time |
2.5 |
Companies should disclose the process for evaluating the performance of the Board, its committees and individual Directors |
The Company does not have a formal documented process |
Changing composition |
3.2 |
Companies should establish a policy concerning diversity and disclose the policy or a summary of that policy |
The Company does not have a diversity policy |
The Board and senior management recruit persons based on skills and experience appropriate for the role concerned and do not discriminate based on gender, age, ethnicity or cultural background |
3.3 |
Companies should disclose in each annual report the measurable objectives for achieving gender diversity set by the Board in accordance with the diversity policy and the progress towards achieving them. |
The Board does not set objectives for achieving gender diversity and does not have a diversity policy |
As above |
5.1 |
Companies should establish written policies designed to ensure compliance with the ASX Listing Rule disclosure requirements and to ensure accountability at a senior executive level for that compliance and disclose those policies or a summary of those policies |
The Company has not publicly disclosed a formal disclosure policy. |
Given the size of the Company, the Board does not consider publication of a formal disclosure policy to be necessary. The Board takes ultimate responsibility for these matters |
8.1 |
The Board should establish a |
The Company does not have a remuneration committee |
The Board is of the |
8.2 |
The remuneration committee should be structured so it consists of a majority of independent directors, is chaired by an independent chair and has at least 3 members. |
The Company does not have a remuneration committee |
As above |
