1. Scope of responsibility of Board
Responsibility for the Company’s proper corporate governance rests with the Board. The Board’s guiding principle in meeting this responsibility is to act honestly, conscientiously and fairly, in accordance with the law, in the interests of PepinNini’s Shareholders (with a view to building sustainable value for them) and those of employees and other stakeholders.
The Board’s broad function is to:
2. Composition of Board
The Board currently performs its roles and function, consistent with the above statement of its overall corporate governance responsibility, in accordance with the following principles:
3. Board and charter policy
The Board has adopted a charter (which will be kept under review and amended from time to time as the Board may consider appropriate) to give formal recognition to the matters outlined above. This charter sets out various other matters that are important for effective corporate governance including the following:
4.Company committees
The Company’s size is not sufficient to warrant the establishment of separate committees for the nomination of directors, review of remuneration and risk management. As an alternative the Company has formed a corporate governance committee (currently consisting of all directors) to assist with the building of its own internal practices concerning good corporate governance. In addition to their regular Board meetings, the Directors will meet on a regular basis to discuss action matters concerning:
Example of the items of business that the committee will address at its meetings are:
Whilst items of risk management will be discussed on a quarterly basis, items concerning remuneration and nominations will be discussed annually.
5. Audit committee
The Company has established an Audit Committee which operates under a formal charter Audit Committee Charter (pdf 59KB). The Audit Committee meets and reports to the Board as required, but in any case at least twice each year. Its members are currently the two non executive directors including the Secretary of the Company. The Committee has authority to seek any pertinent information it requires from any employee or external party. The Company external auditor is invited to attend each meeting of the committee.
The responsibilities of the audit committee include:
6. Best practice commitment
The Company is committed to achieving and maintaining the highest standards of conduct and has undertaken various initiatives that are designed to achieve this objective. PepinNini’s corporate governance charter is intended to ‘institutionalise’ good corporate governance and, generally, to build a culture of best practice both in the Company’s own internal practices and in its dealings with others.
The following are a tangible demonstration of the Company’s corporate governance commitment.
Independent professional advice
With the prior approval of the Chairman, which may not be unreasonably withheld or delayed, each Director has the right to seek independent legal and other professional advice concerning any aspect of the Company’s operations or undertakings in order to fulfill their duties and responsibilities as Directors. Any costs incurred are borne by the Company.
Code of Conduct
The Company has developed and adopted a detailed code of conduct to guide Directors and employees in the performance of their duties.
Code of conduct for transactions in securities
The Company has developed and adopted a formal code to regulate dealings in securities by Directors and senior management and their associates. This is designed to ensure fair and transparent trading in accordance with both the law and best practice.
Charter
The code of conduct and the code of conduct for transactions in securities (referred to above) both form part of the Company’s corporate governance charter which has been formally adopted and is incorporated in the Company Policy and Procedure Manual (pdf 601KB)
7.Compliance with ASX corporate governance guidelines and best practice recommendations
The ASX document, ‘Principles of Good Corporate Governance and Best Practice Recommendations’ (‘Guidelines’) applying to listed entities was published in March 2003 by the ASX Corporate Governance Council with the aim of enhancing the credibility and transparency of Australia’s capital markets.
The Board has assessed the Company’s current practice against the Guidelines and outlines its assessment below:
Principle 1 - Lay solid foundations for management and oversight
The role of the Board and delegation to management have been formalised as described above in this section and will continue to be refined, in accordance with the Guidelines, in light of practical experience gained in operating as a listed company. PepinNini complies with the Guidelines in this area.
Principle 2 - Structure the Board to add value
Together the Directors have a broad range of experience, expertise, skills, qualifications and contacts relevant to the business of the Company. Collectively, the Directors have solid experience in the exploration and mining industry. Currently, the Board is comprised of one independent and three non-independent directors. This does not comply with the Guidelines in that a majority of directors are not independent. The Company considers that the recruitment and employment of independent directors would be too expensive at present. It is intended that, subject to the performance of the Company, new candidates for the Board will be considered.
Principle 3 - Promote ethical and responsible decision making
The Board has adopted a detailed code of ethics and values and a detailed code of conduct for transactions in securities as referred to in the Company Policy and Procedure Document. The purpose of these codes is to guide Directors in the performance of their duties and to define the circumstances in which both they and management, and their respective associates, are permitted to deal in securities. The Board will ensure that restrictions on dealings in securities are strictly enforced. Both codes have been designed with a view to ensuring the highest ethical and professional standards , as well as compliance with legal obligations, and therefore compliance with the Guidelines.
Principle 4 - Safeguard integrity in financial reporting
The Managing Director is required to state in writing to the Board that the Company’s financial reports present a true and fair view, in all material respects, of the Company's financial condition and operational results and are in accordance with relevant accounting standards. An Audit Committee of three non executive directors has been established and has a formal charter. The Audit Committee is not in compliance with the Guidelines in that the majority of members are not independent.
Principle 5 - Make timely and balanced disclosure
PepinNini’s current practice on disclosure is consistent with the Guidelines. Policies and procedures for compliance with ASX Listing Rule disclosure requirement are included in the Company Policy and Procedure Document.
Principle 6 - Respect the rights of Shareholders
The Board recognises the importance of this principle and strives to communicate with Shareholders both regularly and clearly - both by electronic means and using more traditional communication methods. Shareholders are encouraged to attend and participate at general meetings. The Company’s auditors will always attend the annual general meeting and are available to answer Shareholders’ questions. The Company’s policies are outlined in the Company Policy and Procedure Document and comply with the Guidelines in relation to the rights of Shareholders.
Principle 7 - Recognise and manage risks
The Board, together with management, has constantly sought to identify, monitor and mitigate risk. Internal controls are monitored on a continuous basis and, wherever possible improved. The whole issue of risk management is formalised in the Company Policy and Procedure Document (which complies with the Guidelines in relation to risk management) and will continue to be kept under regular review.
Principle 8 - Encourage enhanced performance
The corporate governance charter adopted by the Board requires individual performance review and evaluation to be conducted formally on an annual basis. In addition, an external review of the performance of Directors and key executives is planned to take place after the completion of previous financial year audit and prior to the convening of the next annual general meeting, and this external review process will be repeated on a regular basis (at intervals not exceeding three years) to ensure independent professional scrutiny and benchmarking against developing best market practice. The Board acknowledges that performance can always be enhanced and will continue to seek and consider ways of further enhancing performance both individually and collectively. PepinNini’s practice complies with the Guidelines in this area.
Principle 9 - Remunerate fairly and responsibly
PepinNini’s current practices in this area are reviewed regularly by the Company’s corporate governance committee and comply with the Guidelines. Remuneration of Directors and executives is fully disclosed in the annual report. It is Company policy that remuneration of non executive directors and payment of equity-based executive remuneration requires approval by shareholders.
Principle 10 - Recognise the legitimate interests of stakeholders
The Board recognises the importance of this principle (which it believes represents not only sound ethics but also good business sense and commercial practice) and continues to develop and implement procedures to ensure compliance with legal and other obligations to legitimate stakeholders. The Company and its policies and practices comply with the Guidelines in this area.
