(A.C.N. 009 245 890) REGISTERED OFFICE Suite B1, 661 Newcastle Street Leederville WA 6007 Australia Tel: +618 9217 9800 Fax: +618 9217 9899
Advanced Share Registry Services Ltd 110 Stirling Highway Nedlands, Perth Western Australia 6009 Tel: +618 9389 8033 Fax: +618 9262 3723
Since the introduction of ASX Corporate Governance Council’s Principles of Good Corporate Governance and Best Practice Recommendations (“ASX Guidelines” or the “Recommendations”), United Overseas Australia Ltd (“Company”) has made it a priority to adopt systems of control and accountability as the basis for the administration of Corporate Governance. Some of these policies and procedures are summarised in this report. Commensurate with the spirit of the ASX Guidelines, the Company has followed each Recommendation to be an appropriate benchmark for corporate governance practices, taking into account factors such as the size of the Company, the Board, resources available and activities of the Company. Where, after due consideration, the Company’s corporate governance practices depart from the Recommendations, the Board has offered full disclosure of the nature of, and reason for, the adoption of its own practice.
The Company has adopted systems of control and accountability as the basis for the administration of corporate governance. The Board of the Company is committed to administering the policies and procedures with openness and integrity, pursuing the true spirit of corporate governance commensurate with the Company’s needs.
Taking into account the size of the Company’s endeavours to comply with the Corporate Governance Principles and the corresponding Best Practice Recommendations as published by the ASX Corporate Governance Council (“Corporate Governance Principles and Recommendations”) and has adopted the revised Principles and Recommendations. Significant policies and details of any significant deviations from the principles are specified below.
The Board has a responsibility for protecting the rights and interests of Shareholders and is responsible for the overall direction, monitoring and governance of the Company. Responsibility for managing the business on a day-to-day basis has been delegated to the Chief Executive Officer and the management team.
The Board is responsible for the overall corporate governance of the Company and its subsidiaries. Responsibilities and Functions of the Board are set out under the Board Charter and include:
An agenda for the meetings has been determined to ensure certain standing information is addressed and other items which are relevant to reporting deadlines and regular review are scheduled when appropriate. The agenda is regularly reviewed by the Chairman, Chief Executive Officer and the Company Secretary.
The relevant provisions in the Constitution and the Corporations Act determine the terms and conditions relating to the appointment and termination of Directors. All Directors are subject to re-election by rotation every three years.
The Board does not have a separate Nomination Committee comprising of a majority of independent Directors and as such does not comply with Recommendation 2.1 of the Corporate Governance Council. The Board believes that given the size of the Company and current composition of the Board, a separate nomination committee is not warranted at this time. Any changes to the Directorships will, for the foreseeable future, be considered by the full Board subject to any applicable laws. Identification of potential Board candidates includes consideration of skills, personal attributes and capability to devote the necessary time and commitment to the role.
The Constitution requires a minimum number of three Directors. The maximum number of Directors is fixed by the Board but may not be more than 9 unless the members of the Company, in general meeting, resolve otherwise. The skills, experience and expertise of the directors is set out in the Directors’ section in the Annual Report.
The Board considers the independence of directors having regard to the relationships listed in Box 2.3 of the Principles & Recommendations and applicable materiality thresholds. The Board has agreed that the materiality thresholds applicable to assessing the independence of directors will be determined on a case by case basis.
The Board does not have a majority of directors who are independent. The Board comprises one independent director, Mr Chee Seng Teo. Mr Chee Seng Teo is independent as he is a non-executive director who is not a member of management and who is free of any business or other relationship that could materially interfere with, or could reasonably be perceived to materially interfere with, the independent exercise of his judgement.
Two of the remaining three Board members are also executives of the Company whilst one is Non-Executive but classified as Non-Independent. The Board considers that given the scope of the Company’s current operations, and the relevant experience of the Board members in the development, construction and property industry, that the Board is appropriately structured to discharge its duties in a manner that is in the best interests of the Company from both a long term strategic and operational perspective.
The Company does not have a formal process for the evaluation of the performance of the Board and as such does not comply with recommendation 1.6 of the Corporate Governance Council. The Board is of the opinion that the competitive environment in which the Company operates will effectively provide a measure of the performance of the Directors, in addition the Chairman assesses the performance of the Board, individual directors and key directors on an informal basis.
Directors are encouraged to undertake appropriate professional development to maintain the skills and knowledge needed to perform their role with the Company effectively, and the Company provides opportunities for this to occur from time to time.
Each director has the right to access all relevant information in respect of the Company and to make appropriate enquiries of senior management. Each director has the right to seek independent professional advice at the Company’s expense, subject to the prior approval of the Chairman, which shall not be unreasonably withheld.
The Board has adopted a Code of Conduct that applies to all employees, executives and Directors of the Company, and as such complies with Recommendation 3.1 of the Corporate Governance Council. This Code addresses expectations for conduct in accordance with legal requirements and agreed ethical standards.
The Board has committed to ensuring that the Company, its Directors and executives comply with their legal obligations as well as conducting their business in a transparent and ethical manner. The Board has adopted a policy and procedure on dealing the Company’s securities by Directors, officers and employees which prohibits in dealing in the Company’s securities when those persons possess inside information.
The Board relies on senior executives to monitor the internal controls within the Company. Financial performance is monitored on a regular basis by the Chief Executive Officer who reports to the Board at the scheduled Board meetings.
The Audit Committee reviews the performance of the external auditors on an annual basis and meets with them during the year to review findings and assist with Board recommendations.
The Board places high priority on communication with Shareholders and is aware of the obligations it has, under the Corporations Act and ASX Listing Rules, to keep the market fully informed of the information which is not generally available and which may have a material effect on the price or value on the Company’s securities.
The Company has adopted policies which establish procedures to ensure the directors and management are aware of and fulfill their obligations in relation to the timely disclosure of material price sensitive information.
Continuous disclosure is discussed at all regular Board meetings and on an ongoing basis the Board ensures that all activities are reviewed with a view to necessity for disclosure for security holders.
In accordance with ASX Listing Rules the Company Secretary has been appointed as the Company’s disclosure officer.
The Board fully supports security holder participation at general meetings as well as ensuring that communications with security holders are effective and clear. This has been incorporated into a formal shareholder communication strategy, in accordance with Recommendations 6.1 and 6.2 of the Corporate Governance Council.
In addition to electronic communication via the ASX website, the Company publishes all significant announcements together with all half yearly and annual reports.
Shareholders are able to pose questions on the audit process and financial statements directly to the Company’s independent auditor who attends the Company Annual General Meeting for that purpose.
The Board has adopted a risk management policy that sets out a framework for a system of risk management and internal compliance and control whereby the Board delegates day-to-day management of risk to the Chief Executive Officer therefore complying with Recommendation 7.1 of the Corporate Governance Council. The Board is responsible for supervising the management’s framework of control and accountability systems to enable risk to be assessed and managed.
The Company is committed to ensuring that sound environmental management and safety practices are maintained for its exploration activities.
The Company’s risk management strategy is evolving and will be an ongoing process and it is recognised that the level and extent of the strategy will develop with the growth and change in the Company’s activities.
As the Board has responsibility for the monitoring of risk management it has not required a formal report regarding the material risks and whether those risks are managed effectively therefore not complying with Recommendation 7.2 of the Corporate Governance Council. The Board believes that the Company is currently effectively communicating its significant and material risks to the Board and its affairs are not of sufficient complexity to justify the implementation of a more formal system for identifying, assessing, monitoring and managing the risk in the Company.
The Board has not created a separate Remuneration Committee as the Board considers that the Company is not currently of a size, nor are its affairs of such complexity to justify a separate Remuneration Committee. Executive remuneration is determined by the Audit Committee of the Company in conjunction with the Executive Chairman.
The Chief Executive Officer and senior executives receive salary packages which may include performance based components designed to reward and motivate. Non-executive directors receive fees agreed on an annual basis by the Board.
The full Board determines all compensation arrangements for directors based upon recommendations that it receives from the Audit Committee (in its capacity as the Remuneration Committee). It is also responsible for setting performance criteria, performance monitors, share option schemes, incentive performance schemes, superannuation entitlements, retirement and termination entitlements and professional indemnity and liability insurance cover.
The Board ensures that all matters of remuneration will continue to be in accordance with the Corporations Act requirements.