Corporate Governance

The Board of Directors of WPG Resources Ltd:

Is responsible for corporate governance and strives for high standards in this regard.
Monitors the Company’s business and affairs on behalf of the shareholders by whom they are elected and to whom they are accountable.
Draws on relevant best practice principles particularly the Corporate Governance Principles and Recommendations (2nd edition) issued by the ASX Corporate Governance Council in August 2007 and these are revised on an ongoing basis.

The Company endeavours to adhere to the best practice principles proposed by ASX, mindful that there may be some instances where compliance is not practicable for a company of WPG's size. In many cases the Company is achieving the standard required, although in some cases the Company will have to consider new arrangements to enable compliance. In a limited number of instances, the Company does not meet certain standards set out in the recommendations, largely due to the standards being considered by the Board to be unduly onerous for the Company.

The following paragraphs set out the Company’s position relative to each of the 8 principles contained in the ASX Corporate Governance Council’s report of August 2007, the extent to which they have followed the recommendations, identifying any recommendations that have not been followed and reasons for not doing so.

The following paragraphs set out the Company’s position relative to each of the 8 principles contained in the ASX Corporate Governance Council’s report.

Principle 1: Lay solid foundations for management and oversight

The Company has not yet formalised in a written sense and disclosed the functions reserved to the Board and those delegated to management. A formal Board Charter has been drafted, including a Code of Conduct and Ethics, and has been approved in principle by the Corporate Governance and Nomination Committee (and discussed by the Board). A number of minor matters are being clarified prior to formal adoption of that document.

The Company has a Board of seven Directors (three executive Directors and four Non-Executive Directors) and a small team of executives, the latter of which have defined duties and responsibilities under the terms of their engagement.

As the Company continues to grow there will be a progressive definition of functions reserved to the Board, those delegated to management and processes for evaluating performance. Informal performance evaluations by the Board have taken place.

These arrangements are considered appropriate for the size of the Company.

Principle 2: Structure the Board to add value

The Executive Chairman’s role is exercised separately from the Executive Directors, but is not independent.

The majority of Directors are not independent. Three of the Directors are Executive Directors (Messrs Duffin, Roberts and Jones) and one of the non-executive Directors is representative of a substantial shareholder (Mr Lim). The other three non-executive Directors (Messrs Dean, Mutton and Richardson) are independent.

Given the nature and size of the Company and its business interests, the Board is of the view that there is an adequate and broad mix of skills required and that the experience of each of the directors enables them to be aware of and capable of acting in an independent manner and in the best interests of the shareholders.

A formal, written Board Charter has been prepared and approved in principle by the Company.

The Company has an Audit and Risk Committee, Remuneration Committee and Corporate Governance and Nomination Committee.

Each committee comprises the non-Executive Directors of the Company (Messrs Dean, Mutton Lim and Richardson). Formal, written charters for the committees have not been adopted.

Each Director of the Company has the right to seek independent professional advice at the expense of the Company. Prior approval of the Chairman is required, but this will not be unreasonably withheld.

Principle 3: Promote ethical and responsible decision-making

The Company has adopted a policy concerning trading in its securities by Directors, management, staff and significant consultants which is set out below.

A formal Code of Conduct & Ethics has been prepared and approved in principle by the Company.

The Board of Directors conducts regular reviews of all policies and procedures.

Principle 4: Safeguard integrity in financial reporting

The Company has an Audit and Risk Committee. A formal, written charter for the Audit and Risk Committee has not been adopted.

The Audit and Risk Committee consists of the four non-Executive Directors, Messrs Dean, Mutton, Richardson and Lim, and is chaired by Mr Dean who is an independent director. The qualifications of each member is set out in the Directors Report. These directors are considered to have applicable expertise and skills for this Committee. This structure meets the ASX’s guidance regarding independence, in that it has a majority of independent directors.

The Audit and Risk Committee reports to the Board after each committee meeting. There are usually two meetings of the Audit and Risk Committee each year. In conjunction with the Board, the Audit and Risk Committee meets with and reviews the performance of the external auditors (including scope and quality of the audit).

The Company continues to review its procedures to ensure compliance with the recommendations set out under this principle.

Senior management confirms that the financial reports represent a true and fair view and are in accordance with relevant accounting standards.

The Executive Director and the Chief Financial Officer state in writing 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 are in accordance with relevant accounting standards.

Principle 5: Make timely and balanced disclosure

The Company, its Directors and consultants are highly cognisant of the ASX’s continuous disclosure requirements and operate in an environment where strong emphasis is placed on full and appropriate disclosure to the market.

Whilst the Company does not have formal written policies regarding disclosure, it uses strong informal systems underpinned by experienced individuals.

Principle 6: Respect the rights of shareholders

All significant information disclosed to the ASX is posted on the Company’s website as soon as it is disclosed to the ASX.

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. Procedures have also been established for reviewing whether any price sensitive information has been inadvertently disclosed, and if so, this information is also immediately released to the market.

The Company does not have a communications policy for promoting effective communication with shareholders, however the Company promotes its website and the electronic distribution of data to shareholders as the favoured course of communication. The Company provides information updates to investors by email.

The Company actively answers all questions and communication from shareholders, where appropriate, in a concise and timely fashion.

The Company has requested its external auditor attend general meetings and this has been supported by the Company’s audit director at BDO.

Principle 7: Recognise and manage risk

The Company is making the transition from junior explorer to producer, with the expectation that production of iron ore will commence in 2011. As a result, the Company will face an enhanced level of exposures to risks, over time.

Risk management arrangements are the responsibility of the Board of Directors and senior management collectively. Specific risk management procedures will be implemented at the Company’s operations in South Australia. These procedures will be governed by a range of best practice and statutory requirements.

Risk factors are discussed regularly at Board meetings.

The Company has adopted a formal OHS policy, which is provided and agreed to in writing by all Directors, employees and consultants of the Company and is subject to regular reviews.

The Board has received the declarations required to be made to the Directors from the Executive Director and Chief Financial Officer in accordance with section 295A of the Corporations Act 2001 for the financial year ended 30 June 2010.

Principle 8: Remunerate fairly and responsibly

The Company has a Remuneration Committee comprising the four non-Executive Directors, Messrs Dean, Mutton, Richardson and Lim. The Committee meets as and when required, to review performance matters and remuneration. The qualifications of each member is set out in the Directors Report. This structure meets the ASX’s guidance regarding independence, in that it has a majority of independent directors.

A formal, written charter for the Remuneration Committee has not been adopted.

Directors believe that the size of the Company makes individual salary and consultant negotiations more appropriate than formal remuneration policies.

The Remuneration Committee has received independent external advice and market comparisons in establishing the 2010/2011 fixed annual reward (FAR) packages for Directors and senior executives and in replacing the then current employee share option plan (the Old Plan) with a incentive rights plan (the New Plan).

In accordance with Corporations Act requirements, the Company discloses the fees or salaries paid to all Directors, plus the five highest paid officers of the Company.

A number of options were issued under the Old Plan in the year ended 30 June 2010. These options are disclosed in the Directors Report. The Company has now replaced the Old Plan with the New Plan and rights granted pursuant to the New Plan to Executive Directors and senior executives for the 2010/2011 year are disclosed in the Directors Report.

Ethical Standards

A formal Code of Conduct & Ethics has been prepared and approved in principle by the Company. The Board’s policy is for the Directors and management to conduct themselves with the highest ethical standards. All Directors and employees will be expected to act with integrity and objectivity, striving at all times to enhance the reputation and performance of the Company.

Securities Trading and Trading Windows

2010-12-31 WPG Securities Trading and Trading Windows Policy PDF(55 KB)

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