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The Following is an extract from Citigold's 2007 Annual Report:- The directors' objective is to increase shareholder value within an appropriate framework which protects the rights and enhances the interests of shareholders and ensures the consolidated entity is properly managed. The Board supports the Principles of Good Corporate Governance and Best Practice Recommendations published by the Australian Securities Exchange ('ASX') Corporate Governance Council. The Board has reviewed the recommendations and in many cases, the Company has in place policies and practices that are generally consistent with those set out in the recommendations. In the limited circumstances where the Company's corporate governance practices do not correlate with the recommendations, the Company does not consider that the practices are appropriate for the Company due to the size of the Company or its Board. A. Board Composition The Board is comprised of three (3) Directors, being 2 non-executive directors and one executive director, Mr M J Lynch. A majority of the Board is non-executive directors, including the Chairman. All non-executive directors are regarded as independent by the company. The skills, experience and expertise relevant to the position of each Director who is in office at the date of the annual report, their meeting attendances and their term of office are detailed in the Directors' Report. Each Director brings relevant complementary skills and experience to the Board covering the areas of legal, finance and operations. As the Board acts on behalf of and is accountable to shareholders, the Board seeks to identify the expectations of shareholders, as well as other regulatory and ethical expectations and obligations. The Board is responsible for:
The Company has a small Board and management team which enables roles and functions to be flexible to meet specific requirements where necessary. The responsibility for the operations of the consolidated entity is delegated by the Board to the Managing Director and the executive team. The Board assures that this team is adequately qualified and experienced to discharge their responsibilities. B. Board Committees The Board has established a number of committees to assist the execution of its duties. Each committee has its own autonomy with authority delegated to it by the Board and the manner in which the committee is to operate. Current committees of the Board are:
The Board reviews at appropriate times its performance and the performance of the Board committees. Such reviews entail a vigorous and frank discussion outside the normal program of Board meetings. The Company's Constitution specifies that a third of the directors (with the exception of the Managing Director) must, by rotation, retire from office at each Annual General Meeting (AGM) such that at least one director stands for election at each AGM. Where eligible, a director may stand for re-election. Audit and Finance Committee The audit and finance committee consists of the following non-executive directors: JJ Foley (Chairman) and TV Willsteed The main responsibility of the audit and finance committee is to supervise the audit function and the preparation of financial statements, in addition to overseeing financial controls and systems. The Chief Operating Officer and Chief Financial Officer confirm that the financial statements for the year ended 30 June 2007 represent a true and fair view of Citigold's financial position and performance and that the reports conform with relevant accounting standards. In fulfilling its responsibilities, the audit and finance committee receives regular reports from and meets with management and the external auditors. The external auditors have a clear line of direct communication at any time to either the Chairman of the audit committee or the Chairman of the Board. The Auditor also attends the Annual General Meeting. The audit and finance committee has authority, within the scope of its responsibilities, to seek any information it requires from any employee or external party. Health, Safety and Environment Committee The health, safety and environment committee consists of the following executive and non-executive directors: JJ Foley, TV Willsteed and MJ Lynch. The consolidated entity recognises the importance of environmental and occupational health and safety (OHandS) issues and is committed to the highest levels of performance. To help meet this objective an Environmental, Health and Safety Management System (EHSMS) has been established by mine management. The EHSMS is a tool that allows the systematic identification of environmental and OHandS issues and ensures they are managed in a structured manner. Through the EHSMS, the consolidated entity aims to:
Remuneration Committee The remuneration committee consists of the following non-executive directors: JJ Foley and TV Willsteed. The remuneration committee advises the Board on remuneration policies and practices generally and can make recommendations on remuneration packages and other terms of employment for directors and senior executives. Independent advice and industry information may be obtained from time to time on the appropriateness of remuneration packages. Remuneration levels are set at levels that are intended to attract and retain appropriately qualified and experienced directors and senior executives capable of managing the consolidated entity's operations. There is no scheme to provide retirement benefits, other than statutory superannuation, to non-executive directors. The consolidated entity has not formed a nomination committee because there are only 3 Directors. The Board as a whole is able to efficiently address the issue of board competencies. Further information on the remuneration paid to all directors' and key management personnel are set out in the Remuneration Report and note 30 to the financial statements. C. R isk Management Due to the size of the Board, a separate risk management committee has not been established. The Board believes that it is important for all Board members to take a proactive role to the company's risk management and internal compliance and control procedures. The Board monitors the financial and operational aspects of the company's activities and considers the advice of the external auditor and other external advisors. Risk Profile Citigold operates field exploration for gold in Queensland and operates several surface and underground mining sites within the one overall project at Charters Towers including a gold processing plant. The risk profile is typical of the mining industry, and is heavily regulated by the Queensland State Government. This year gold production commenced at Charters Towers from the Warrior reef. Citigold's cash flows are dependent on the amount of gold produced, production costs, the international price of gold and where there is any short fall the ability to raise capital. Financial Risks Financial risks are identified and managed by the Board with tasks delegated to the Managing Director and senior executives. Budgets, variances, cost reports, commodity prices, price trends and cash flow projections are analysed by management and submitted to the Board for review at Board meetings. Cash flows are submitted to ASX each Quarter and full financial reports submitted twice per year to the ASX. Operational Risks Operational risks are reviewed yearly by the NOSA Five Star Integrated Risk Management System. This is a commercial product originally produced by the National Occupational Safety Association, operated by Citigold, with the results audited annually by external consultants. This system identifies all aspects of risks of the operation, particularly those related to safety, health, environment and social impact. Citigold's operations are subject to regulation and regular inspection and monitoring by the Queensland State Government Department of Mines and Energy and the Environmental Protection Authority. D. Independent Professional Advice Directors and Board committees have the right, in connection with their duties and responsibilities, to seek independent professional advice at the Company's expense. Prior consent by the full Board is required, but this will not be unreasonably withheld. E. Shareholder commun ication Information is communicated to shareholders through:
Shareholders are invited to advise the Company of their email addresses. ASX announcements, once released, are then able to be emailed directly to the shareholder. F. Disclosure and Ethical Standards All directors, executives and staff of the consolidated entity are made aware of the ASX's continuous disclosure requirements and operate in an environment where emphasis is placed on full and appropriate disclosure to the market. All directors, executives and staff of the consolidated entity are required to abide by all legal requirements, the Listing Rules of the Australian Securities Exchange, the Corporations Act with the regard to trading in the Company's securities and appropriate standards of ethical conduct with regard to the operation of the consolidated entity. A Code of Conduct (the Code) as adopted by the Board sets out ethical standards expected of all directors, executives and employees. The Code is reviewed and updated as necessary to generally reflect industry standards of integrity and professionalism. The Code covers:
(Updated March 2008) |
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