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Corporate Governance

Corporate Governance Statement
The Board of Directors of Panoramic Resources Limited is responsible for the corporate governance of the Company.  The Board guides and monitors the business and affairs of Panoramic Resources Limited on behalf of the shareholders by whom they are elected and to whom they are accountable.  This statement outlines the main corporate governance practices in place throughout the financial year, which comply with Australian Stock Exchange (“ASX”) Corporate Governance Council (“CGC”) revised (August 2007) “Principles of Good Corporate Governance and Best Practice Recommendations (Second Edition)” (the “Recommendations”), unless otherwise stated.

As required under ASX Listing Rule 4.10.3, the Company makes the following disclosures in relation to each of the Recommendations.

Principle 1: Lay Foundations for Management and Oversight

Role of the Board
The Board’s primary role is the protection and enhancement of long-term shareholder value.

View the Company's Guide to the Role of the Board & Committees - June 2008

View the Company's Guide to Directors' Duties - December 2008

Board Operation

To ensure the Board is well equipped to discharge its responsibilities, as substitute for a Board Charter it has established written guidelines for the operation of the Board. A written guide on the roles of the Board and committees sets out the overriding functions and responsibility of the Board, while a second guide sets out more specific guidelines on the statutory roles and on the separate duties of the Managing Director to the rest of the Board. In addition, Article 11 of the Company’s Constitution (November 2008) (“Constitution”) details on the specific powers and duties of directors as empowered on them by the Company’s shareholders.

Board Processes

The Board is responsible for the overall Corporate Governance of the Company including the strategic direction, establishing goals for executive management and monitoring the achievement of these goals. The Board has established a framework for the management of the Company and its controlled entities, a framework which divides the functions of running the Company between the Board, the Managing Director and the senior executives. The Board has put in place a system of internal control, a pro-active business risk management process, and has the task of monitoring financial performance and the establishment of appropriate ethical standards. The agenda for meetings of the Board is prepared by the Managing Director. Standard items include the project reports, financial reports, strategic matters, governance and compliance.  Submissions are circulated in advance.  Senior executives are regularly involved in Board discussions.

Evaluation of Managing Director and Executive Performance

The Managing Director and the senior executives are ultimately responsible for the day to day running of the Company. The Board has in place a performance appraisal and remuneration system for the Managing Director and senior executives designed to enhance performance. Management performance is reviewed on an annual basis. The criterion for the evaluation of the Managing Director and each executive is their performance against key performance indicators. In addition, the Board monitors and evaluates the performance of the Managing Director and senior executives as appropriate.

Principle 2: Structure the Board to Add Value

Composition of the Board

The names of the Directors of the Company in office at the date of the Statement are set out in the Directors’ Report.

The composition of the Board is determined using the following principles:
¨        The Board currently comprises five directors.  Under Article 10 of the Company’s Constitution, this number may be increased to a maximum of ten directors where it is required due to a commercial alliance, or felt that additional expertise is required in specific areas, or when an outstanding candidate is identified;
¨        The Board should comprise directors with a broad range of expertise with an emphasis on commercial, exploration, mining and project development related experience; and

Directors appointed by the Board are subject to election by shareholders at the following annual general meeting and thereafter directors (other than the Managing Director) are subject to re-election at least every three years.  The tenure of executive directors is linked to their holding of executive office.

Independence

The composition of the Board has gradually changed to reflect the transition of the Company from project developer to a sustainable producing business. As at the date of this report, the majority of non-executive directors, including the Chairman, are considered independent of management and directly or indirectly, individually hold less than 5% of the issued ordinary shares of the Company.

Conflict of Interest

In accordance with Section 191 of the Corporations Law and Article 10.13 of the Company’s Constitution, directors must keep the Board advised, on an ongoing basis, of any interest that could potentially conflict with those of the Company. Where the Board believes that a significant conflict exists, the director concerned does not receive the relevant board papers and is not present at the meeting whilst the item is considered.

Board Performance

 There is no formal performance appraisal system in place for Board performance on a director by director basis. However, membership of the Audit Committee by non-executive directors is initially for a three year period, with an annual renewal review thereafter with performance being a criteria in order to retain office.

Director Education

The non-executive directors are given every opportunity to gain a better understanding of the business and are given access to continuing education opportunities to update and enhance their skills and knowledge. Directors visit the Panoramic mining operations at least once a year and meet with management on a regular basis.

Independent Professional Advice and Access to Company Information

Each director has the right of access to all relevant Company information and to the Company’s executives and, subject to prior consultation with the Chairman, may seek independent professional advice at the Company’s expense.  A copy of the advice received by the director is made available to all other members of the Board.

Board Committees

To facilitate the execution of its responsibilities, the Board’s Committees provide a forum for a more detailed analysis of key issues. Each Committee is entitled to the resources and information it requires to carry out its duties, including direct access to advisors and employees. Membership of the current Committees of the Panoramic Board are set out in the Directors’ Report. The names and functions of each Committee is set out below:

View the Company's Guide to the Role of the Board & Committees - June 2008

Audit Committee

The Audit Committee consists of all non-executive directors. The Audit Committee is to oversee the financial reporting process to ensure the balance, transparency and integrity of published financial information. The Audit Committee is also to review: the effectiveness of internal controls, recommendation and the appointment and assessing the performance of the external auditor; the Company’s process for monitoring compliance with laws and regulations affecting financial reporting and, if applicable, its code of business conduct.  The Audit Committee operates under an Audit Committee charter that is reviewed by the committee and is re-approved or changed by the full Board on a bi-annual basis.

Click here to view the Company’s Audit Committee Charter.

Remuneration Committee

The Remuneration Committee consists of all directors. The role of the Remuneration Committee is to review remuneration packages and policies applicable to the Managing Director, other executive directors (if applicable) and senior executives. The remuneration of executive directors is determined by reference to relevant employment market conditions and of the attainment of defined Company goals. The remuneration of senior executives is determined by the Remuneration Committee based on recommendations provided by the Managing Director. Remuneration levels are competitively set to attract the most qualified and experienced directors and senior executives. The Remuneration Committee obtains independent advice on the appropriateness of remuneration packages.

Click here to view the Remuneration Report (Audited) which forms part of the Company’s 2009 Annual Report.

Environment, Safety and Risk Committee

The Environment, Safety and Risk Committee consist of all directors. The role of the Environment, Safety and Risk Committee is to oversee and monitor the effectiveness of the Group’s strategies and systems to ensure that the Company complies with external and internally accepted standards for the impact of business activities on the environment, the safety and well being of employees, and on the control and management of the key risks facing the business. The Committee meets during Board visits to the mining operations whereby the members of the Committee are able to directly inter face with the senior managers responsible for environmental issues, occupational health and safety and the control and mitigation of non financial risks. The Committee also nominates a non-executive director to attend and be actively involved in the Group’s safety conferences.

Nomination Committee

Due to the size of the Board and the small senior executive team, the Board has determined there is no benefit at this time of establishing a nomination committee. The functions of the nomination committee are performed by the Board as a whole, when required, using the guidelines established for setting the composition of the Board.

Principle 3: Promote Ethical and Responsible Decision Making

All directors, executives, managers and employees are expected to act with the utmost integrity and objectivity, striving at all times to enhance the performance and reputation of the Company and its controlled entities.

Code of Conduct

The Company has recently established a written Code of Conduct which outlines the culture, practices, expected conduct, values and behaviour to be displayed by all employees in upholding the integrity, reputation and accountability of the Company and its controlled entities in the work environment and in the interactions with the Company’s various stakeholders. Certain practices are necessary to comply with Federal and Western Australian State industrial legislation and the Corporations Law. The Code of Conduct has a clear responsibility and accountability of employees for reporting and investigating reports of unethical practices by reference to specific rules and policies such as the rules for trading in the Company securities, and the policy on discrimination, harassment and bullying.

Code of Conduct

Trading in Company Securities by Directors, Officers and Employees

The Company has established rules for the trading in Company securities by directors, officers and employees to ensure compliance with Section 1002G of the Corporations Law (on insider trading) and Part 2D.1 of the Corporations Law (on the proper duties in relation to the use of inside information). The Managing Director has been appointed to ensure that the following rules for the trading in Company’s securities are strictly adhered to by all directors, officers and employees:
¨        Trading in Company securities is only permitted following the notification of the intention to trade with the Managing Director;
¨        Trading in Company securities is prohibited at any time when in possession of unpublished information, which if generally available, might materially affect the price or value of those securities, or for a period of 2 business days following the making of a public announcement in relation to that inside information (“the due notice period”);
¨        Active trading in Company securities, which involves frequent and regular trading in those securities with a view to derive profit related income from that activity, is prohibited;
¨        The entering into contracts to hedge exposure to equity-based remuneration, is prohibited; and
¨        Only in exceptional circumstances, can approval be obtained in advance from the Managing Director, to trade outside the due notice period.

View the Company's Guide to Dealing in Securities - August 2009 

Discrimination, Harassment and Bullying Policy

The Company is committed to providing a work environment that is safe, fair and free from discrimination, harassment and bullying for all employees of the Company. All employees are encouraged to follow adopted procedures allowing concerns or instances of illegal conduct or malpractice to be raised in good faith without being subjected to victimisation, harassment or discriminatory treatment, and to have such concerns or instances properly investigated. The Policy provides a mechanism by which all employees can confidentially report improper conduct without fear of discrimination.

Click here to view the Company’s Discrimination, Harassment & Bullying Policy.

Culture and Values

The Company has nurtured a culture and set of values based on respect, action, performance and openness. These values are encouraged to be displayed by all employees in dealings with each other, suppliers, customers and the community.

Click here to view the Company’s Information Technology Management Policy.

Principle 4: Safeguard Integrity in Financial Reporting

The Managing Director and Chief Financial Officer are required to state in writing to the Audit Committee and the Board that the Company’s and Group’s financial reports present a true and fair view, in all material aspects, of the Company’s and Group’s financial condition and that operational results are in accordance with relevant accounting standards.  The Audit Committee reviews all final draft external financial reports with the external auditor and makes recommendations on their adequacy to the Board prior to their release to shareholders, investors and other public forums. There is regular communication between the Audit Committee, management and external auditor. In accordance with Section 324DA of the Corporations Law, the audit partner of the external auditor is required to be rotated after 5 successive financial years. It is the role of the Audit Committee to select the new audit engagement partner as nominated by the external partner after considering each nominated individual’s experience, reputation and independence.

In addition, the Audit Committee reviews, assists and assesses the adequacy of the Company’s internal control and financial risk management systems, and accounting and business policies.

Principle 5: Make Timely and Balanced Disclosure

The Company is committed to providing relevant up to date information to its shareholders and the broader investment community in accordance with the continuous disclosure requirements under the ASX Listing Rules and the Corporations Law.
The Company has a Continuous Disclosure Policy that all shareholders and investors have equal access to the Company’s information.
The Company has appointed the Company Secretary to oversee the continuous disclosure practices of the Company and its controlled entities. His responsibilities include:
¨        Reviewing all statutory regulatory or tender reports submitted to or made by the Company and its controlled entities, and to report or recommend to the Board as appropriate;
¨        Ensuring compliance with continuous disclosure requirements;
¨        Overseeing and coordinating the disclosure of information to the ASX, analysts, brokers, shareholders, the media and public; and

Educating directors and staff of the Company’s and Group’s disclosure policies and procedures and raising awareness of the principles of the underlying continuous disclosure.

Click here to view the Company’s Guide to Disclosure of Information.

Principle 6: Respect the Rights of Shareholders

The Board in adopting a Continuous Disclosure Policy ensures that shareholders are provided with up to date Company information. Communication to shareholders is facilitated by the production of the annual report, quarterly reports, public announcements, and the posting of policies, and ASX releases immediately after their disclosure to the ASX, on the Company’s website. In addition, all shareholders are encouraged to attend the Annual General Meeting and use the opportunity to ask questions following the Managing Director’s presentation. The Company makes every endeavour to respond to the most commonly asked questions. The external auditor attends the meeting and is available to answer questions in relation to the conduct of the audit.

Principle 7: Recognise and Manage Risk

The Board believes that risk management and compliance are fundamental to sound management and that oversight of such matters is an important responsibility of the Board. The Company has a formal, standardised approach to risk management through the production each year of a Panoramic Risk Management Guideline and the requirement of having the Board approve the guideline on an annual basis. This approach is in accordance with Australian/New Zealand Standard for Risk Management (AS/NZS 4360 2004) and is based on the control framework for enterprise risk management prepared by the Committee of Sponsoring Organisations of the Treadway Commission (COSO) in 2001. The process involves the Company undertaking an annual comprehensive review at the Company’s mine sites and Perth office on identifying the risks faced at each location and the appropriate risk management internal controls, systems and response procedures to mitigate their impact on strategic, operational and financial performance. There are a number of risks the Company’s sites are exposed to that are both common to the mining industry and unique due to location such as, but not limited to:
¨        exposure to fluctuations in commodity prices and the United States currency exchange rate;
¨        customer declaration of force majeure;
¨        health, safety, industrial and environment matters;
¨        production capacity;
¨        future delivery against committed financial derivatives;
¨        regulatory constraints, compliance and the impact of climate change; and
¨        natural disasters.
The review also includes examining on the effectiveness of internal controls, systems and response procedures that were in place for the previous year.
The Board has also established a committee of the Board, the Environment, Safety and Risk Committee. As part of its brief, this Committee oversees the Company’s management of financial and non-financial risks at the operations in accordance with the guideline while always taking into account the Company’s legal obligations set by the Federal and State statutory law makers on, but not limited to, environment, employment and occupational health and safety.

The reporting and control mechanisms, together with the assurances of the Environment, Safety and Risk and Audit Committees, support the annual written certification, in accordance with Section 295A of the Corporations Act, as given by the Managing Director and the Chief Financial Officer to the Board certifying that the Company’s financial reports are based on a sound system of risk management and internal control and that the system is operating effectively.

Click here to view the Company’s Risk Management Guideline (Summary).

Principle 8: Remunerate Fairly and Responsibly

Board Remuneration

The total annual remuneration paid to non-executive directors may not exceed the limit set by the shareholders at an annual general meeting (currently $600,000). The remuneration of the non-executive directors is fixed rather than variable.

Executive Remuneration 

The Remuneration Committee provides recommendations and direction for the Company’s remuneration practices. The Committee ensures that a significant proportion of each executive’s remuneration is linked to his or her performance and the Company’s performance. Performance reviews are conducted regularly to determine the proportion of remuneration that will be at ‘risk’ for the upcoming year. The Company’s executives can participate in a performance share rights plan that is linked to the Company’s performance against its peers in the resources industry.

Further details in relation to director and executive remuneration are set out in the Remuneration Report on pages 39 to 48 of the 2009 Annual Report.