Matrix Metals | Copper Production and Exploration

CORPORATE GOVERNANCE STATEMENT

The Board of Directors of the Company acknowledges its accountability to shareholders for creating shareholder value within a framework which protects the rights and interests of shareholders and ensures the Company is properly managed.  The Board aims to achieve these objectives through the adoption and monitoring of strategies, plans, policies and performance.

ASX CORPORATE GOVERNANCE COUNCIL BEST PRACTICE PRINCIPLES AND RECOMMENDATIONS

For ease of comparison to the recommendations, the Corporate Governance statement addresses each of the 10 principles in turn. Where the company has not followed a recommendation this is identified with the reasons for not following the recommendation. This disclosure is in accordance with ASX listing rule 4.10.3.

Principle 1
Lay solid foundations for management and oversight by the board

The board operates in accordance with broad principles set out in its charter which is available from the corporate governance section of the company’s website. The directors formally adopted the board charter on 18 September 2007. Broadly the key responsibilities of the board are;

1. Providing input into, and approval of the Company’s strategic direction and budgets as developed by management;
2. Approving and monitoring the company’s risk management framework;
3. Appointing, monitoring, managing the performance of, and if necessary terminating the employment of the Chief Executive Officer;
4. Evaluating, approving and monitoring capital management and major capital expenditure, acquisitions and divestments and all major corporate transactions;
5. Approving the annual operating budget, annual shareholders report and annual financial accounts;
6. Ensuring ethical behaviour and compliance with the Company’s own governing documents, including the code of conduct, and compliance with corporate governance standards.

Principle 2
Structure the board to add value

Details of board members, their experience, expertise, qualifications, term in office and independence status are set-out in the start to the Directors Report. The structure of the board complies with ASX recommendation 2.



Nomination committee
The company does not comply with ASX recommendation 2.4 in that there is no separate nomination committee. Given the board comprises six directors it has been decided that there are no efficiencies to be gained from forming a separate nomination committee. The current board members carry out the roles that would otherwise be undertaken by a nomination committee and each director excludes himself from matters in which he has a personal interest.

Independent advice
A director of the Company is entitled to seek independent professional advice (including but not limited to legal, accounting and financial advice) at the Company’s expense on any matter connected with the discharge of his or her responsibilities, in accordance with the procedures and subject to the conditions set out in the board’s charter.

Principle 3
Promote ethical and responsible decision making

The board has adopted a code of conduct contained in the Board Charter, adopted on 18 September 2007.  This Code expresses certain basic principles that the Company and employees should follow in all dealings related to the Company.  They should show the highest business integrity in their dealings with others, including preserving the confidentiality of other peoples’ information and should conduct the Company’s business in accordance with law and principles of good business practice.

Securities trading policy
A formal Securities Trading Policy has not been established, however there is strict guidance contained in the Board Charter adopted by the Board on 18 September 2007.  Prior to this date there was an understanding among executives of when it was appropriate to trade in the Company’s securities.  Trading in shares by any Director or employee of the Company within the period between the close of each financial quarter and the release of quarterly results by the Company requires the approval of the Chief Executive Officer or Chairman before any trading is conducted or the entry into share trading agreements, whether “on market” or “off market”.

Principle 4
Safeguard integrity in financial reporting

The Chief Executive Officer and Chief Financial Officer have made the following certifications to the board;

• That the company’s financial reports are complete and present a true and fair view, in all material respects, of the financial condition and operational results of the company and group and are in accordance with relevant accounting standards;
• That the above system was founded on a sound system of financial risk management and internal compliance and control.

Audit committee
The audit committee comprises Mr G Jones, Mr C Donner and Mr R Hing.  Details of their qualifications can be found in the directors’ report. The audit committee did not meet during the year as it was established on 11 April 2007 and the board only adopted a formal audit charter on 18 September 2007. Prior to this date the full Board carried out many of the roles and responsibilities outlined in the charter. The charter sets out the roles and responsibilities of the audit committee and contains information on the procedures for the selection and rotation of the external auditor.  The board believes the audit committee structure is appropriate given the company’s size. The composition of the audit committee will be assessed on an ongoing basis in light of the company’s overall board structure and strategic direction.

Principle 5
Make timely and balanced disclosure

The board provides shareholders with information in compliance with the ASX continuous disclosure Listing Rules.
In summary, the continuous disclosure system operates as follows:

• the chief executive officer and chief financial officer (who is also the company secretary) are responsible for monitoring all areas of the group’s internal and external environment, interpreting policy and where necessary informing the board.  The company secretary is responsible for all communications with the ASX;
• the half-yearly report contains summarised financial information and a review of the operations of the consolidated entity during the period.  The half-year reviewed financial report is lodged with the Australian Securities and Investment Commission (“ASIC”) and the Australian Stock Exchange (“ASX”), and sent to any shareholder who requests it;
• all announcements made to the market and related information of a market sensitive nature, are placed on the Company’s website after they are released to the ASX; and
• the external auditor is requested to attend the annual general meetings to answer any questions concerning the audit and the content of the auditor’s report.

Principle 6
Respect the rights of shareholders

All information released to the ASX company announcements platform is posted on the company’s website immediately after confirmation has been received from the ASX that it has released the information to the market. When analysts are briefed on aspects of the group’s operations, the material used in the presentation is released to the ASX and posted on the company’s website.


Principle 7
Recognise and manage risk

The Company recognises risk management is, prima facie, an issue for management.  However, as a small company the board works closely with management to identify and manage operational, financial and compliance risks which would prevent the Company from achieving its objectives.

The company does not have a single specific risk management policy, but rather, financial and operating risks are addressed through individual approved policies and procedures covering financial, contract management, safety and environmental activities of the company.  The company engages an insurance brokering firm as part of the company’s annual assessment of the coverage for insured assets and risks. 

The chief executive officer and chief financial officer have declared in writing to the board that the Company’s financial reports for the year ended 30 June 2007 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.  The Company does not have a written procedure for risk management and internal compliance; however, the CEO and CFO have been able to make this declaration due to their intimate knowledge of the Company’s activities and operations.

Principle 8
Encourage enhanced performance

The Board has now established a formal Remuneration Committee which will report to the board of directors and provide recommendations in terms of compensation and incentive plan arrangements for directors and senior executives, having regard to market conditions and the performance of individuals and the consolidated entity. 

Due to the size of the company, previous performance of individual directors was conducted by the Chairman.

Principle 9
Remunerate fairly and responsibly

The company has now established a remuneration committee, which comprises Mr D Humann, Mr C Donner, Mr G Jones and Mr R Hing. The remuneration committee did not meet during the year as the committee was only established on 11 April 2007.  The board adopted a formal remuneration committee charter on 18 September 2007.

Remuneration policies
The Company’s remuneration policies are detailed in the Remuneration Report within this Director’s Report.

Non-executive director remuneration
Non-executive directors are remunerated by way of directors’ fees. Apart from compulsory superannuation entitlements, non executive directors are eligible, on a case by case basis, to receive retirement benefits.

Principle 10
Recognise the legitimate interests of stakeholders

The Company requires that at all times, all Company personnel act with the utmost integrity, objectivity and in compliance with the letter and the spirit of both the law and Company policies.

Directors must keep the board advised, on an ongoing basis, of any interest that could potentially conflict with those of the Company.  The company has a specific code of conduct for Directors, which was adopted by the board on 18 September 2007.

The code of conduct sets out the standards that the Company will adhere to whilst conducting its business and includes, compliance with the law, office security, inside information and share trading, proprietary information, computer security, privacy, conflicts of interest, improper payments, gifts and gratuities and accounts and records.