Corporate Governance

In recognising the need for the highest standards of corporate behaviour and accountability, the Directors of AIM Resources Limited (“the Company”) have adhered to the principles of good corporate governance. A description of the main corporate governance practices, as well as any disclosures required by the Australian Stock Exchange’s “Principles of Good Corporate Governance and Best Practice Recommendations”, is set out below. Unless otherwise stated, the practices were in place for the entire year.

1. Board of Directors

The Board of Directors of the Company is responsible for the corporate governance of the Company. The Board guides and monitors the business and affairs of the Company on behalf of the shareholders by whom they are elected and to whom they are accountable.

As the Board acts on behalf of shareholders, it seeks to identify the expectations of shareholders, as well as other ethical expectations and obligations. In addition, the Board is responsible for identifying areas of significant business risk and ensuing arrangements are in place to adequately manage those risks.

The primary responsibilities of the Board include:

• formulation and approval of the strategic direction, objectives and goals of the Company;
• monitoring the financial performance of the Company, including approval of the Company’s financial statements;
• ensuring that adequate internal control systems and procedures exist and that compliance with these systems and procedures is maintained;
• the identification of significant business risks and ensuring that such risks are adequately managed;
• the review of performance and remuneration of Executive Directors; and
• the establishment and maintenance of appropriate ethical standards.

The responsibility for the operation and administration of the Company is carried out by the Directors who operate in an executive capacity, supported by senior professional staff. The Board ensures that this team is suitably qualified and experienced to discharge their responsibilities, and assesses on an ongoing basis the performance of the management team, to ensure that management’s objectives and activities are aligned with the expectations and risks identified by the Board.

The Directors of the Company are as follows:

Mr Victor Bradley - Independent non-executive Chairman
Mr Bill Cash - (acting) Managing Director
Mr Louis Mnguni - Independent non-executive Director
Mr Scott Lowe - Executive Director

2. Independent Directors

Under ASX guidelines two of the current Board are considered to be independent directors. Mr Cash and Mr Lowe are executive directors and under the ASX guidelines are deemed not to be independent by virtue of their positions.

The Board is satisfied that the structure of the Board is appropriate for the size of the Company and the nature of its operations and is a cost effective structure for managing the Company.

3. Board Composition

When the need for a new director is identified, selection is based on the skills and experience of prospective directors, having regard to the present and future needs of the Company. Any Director so appointed must then stand for election at the next Annual General Meeting of the Company.

4. Terms of Appointment as a Director

The constitution of the Company provides that a Director, other than the Managing Director, may not retain office for more than three calendar years or beyond the third annual general meeting following his or her election, whichever is longer, without submitting for re-election. One third of the Directors must retire each year and are eligible for re-election. The Directors who retire by rotation at each annual general meeting are those with the longest length of time in office since their appointment or last election.

5. Board Committees

The Board has established two committees to consider specific issues and report back to the full Board. These are the Audit Committee and the Remuneration Committee. Other committees can be convened by the Board as required.

The Board does not have a Nomination Committee. The Board is of the opinion that due to the nature and size of the Company, the functions performed by a Nomination Committee can be adequately handled by the full Board.

The Board has established an Audit Committee which operates under a charter approved by the Board. It is the Audit Committee’s responsibility to ensure that an effective internal control framework exists within the entity. This includes internal controls to deal with both the effectiveness and efficiency of significant business processes, the safeguarding of assets, the maintenance of proper accounting records, and the reliability of financial information.

The Audit Committee also provides the Board with additional assurance regarding the reliability of financial information for inclusion in the financial reports.

The members of the Audit Committee are:

Mr Victor Bradley - Chairman
Mr Louis Mnguni
Mr Bill Cash

The Audit Committee was established in June 2007.

Download the Audit Committee Charter

Remuneration Committee

The Board has established a Remuneration Committee which is responsible for determining and reviewing compensation arrangements for the Directors themselves and for the Managing Director and the executive team. It is the Company’s objective to provide maximum stakeholder benefit from the retention of a high quality Board and executive team, by remunerating Directors and key management fairly and appropriately with reference to relevant employment market conditions. To assist in achieving this objective, the Remuneration Committee links the nature and amount of executive directors’ and officers’ remuneration to the Company’s financial and operational performance.

Remuneration and other terms of employment of executives, including executive directors, are reviewed periodically by the Board having regard to performance, relevant comparative information and, where necessary, independent expert advice.

The members of the Remuneration Committee are:

Mr Victor Bradley – Chairman
Mr Louis Mnguni

The Remuneration Committee was established in June 2007.

6. Conflict of Interest

The Directors must keep the Company informed, on an ongoing basis, of any interest that could potentially conflict with those of the Company. Where the Board believes 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.

7. Independent Professional Advice

Directors have the right, in connection with their duties and responsibilities as Directors, to seek independent professional advice at the Company’s expense. Prior approval of the Chairman is required, which will not be unreasonably withheld.

8. Ethical Standards

All Directors, management and staff are expected to consistently apply the highest ethical standards to their conduct to ensure that the Company’s affairs and reputation are at all times maintained at the uppermost level.

In view of the size of the Company and the nature of its activities, the Board has considered that an informal code of conduct is appropriate to guide executives, management and employees in carrying out their duties and responsibilities.

9. Communication to Market & Shareholders

The Board of Directors aims to ensure that the shareholders, on behalf of whom they act, are informed of all information necessary to assess the performance of the Directors and the Company. Information is communicated to shareholders and the market through:

• the Annual Report which is made available to all shareholders;
• other periodic reports which are lodged with ASX and available for shareholder scrutiny;
• other announcements made in accordance with ASX Listing Rules;
• special purpose information memoranda issued to shareholders as appropriate;
• the Annual General Meeting and other meetings called to obtain approval for Board action as appropriate; and the Company’s website.

10. Share Trading

Dealings are not permitted at any time whilst in the possession of price sensitive information not already available to the market. In addition, the Corporations Act 2001 prohibits the purchase or sale of securities whilst a person is in possession of inside information.

Download the Securities Trading Policy

11. External Auditors

The Company’s external auditor is Alcock Davis Danieli.