Oversight of the risk management system

Operational, financial reporting and compliance risks are continually assessed, monitored and managed at management level and any specific areas of risk which are classified material are considered and dealt with at Board level.

Whilst the Board acknowledges that it is responsible for the overall internal control framework, it is also cognizant that no cost effective internal control system will preclude all errors and irregularities.

Areas of major risks faced by the Company include matters of financial reporting, the use of information systems, environmental and safety risks with respect to exploration, development and mining activities and optimisation of returns on funds and listed securities.

• financial reporting accuracy and compliance with the financial reporting regulatory framework :
  • there is a comprehensive budgeting system with an annual budget approved by the Directors. Monthly actual results are reported against budget and revised forecasts for the remainder of the year prepared when necessary;
  • cash flow statements are also prepared on a regular basis;
  • half-yearly and annual statutory accounts are reviewed and audited respectively by the Company's Auditors and reported to the ASX;
• risk exposures relating to foreign exchange and interest rate fluctuations are managed in accordance with the Company’s Foreign Exchange and Interest Rate Risk Management Policy (Policy), approved by the Board on 23 June 2006. In accordance with the Policy, a Risk Management Committee has been established, comprising of Mr Charles Bass (also the Chair), the CEO and the CFO. The Risk Management Committee meet regularly to determine, with the assistance of external treasury advisers, appropriate foreign exchange and interest rate hedging strategies to manage these risks and ensure that such activities are conducted in compliance with the Company’s Policy;
• all business transactions of a material nature are properly authorised and executed; and
• the recruitment and retention of personnel with due experience, commitment and integrity.

Environmental Regulation Compliance

The Consolidated Entity is committed to ensuring that safe and sound environmental practices are carried out while undertaking exploration, development and mining activities and that such practices meet or exceed the relevant statutory requirements under both Commonwealth and State legislation. The Board is not aware of any significant breaches of environmental requirements.

The CEO and CFO are required to declare in writing to the Board on an annual basis that the financial reporting risk management framework and associated compliance and controls have been assessed and found to be operating effectively and efficiently. The operational and other risk management compliance and controls have also been assessed and found to be operating effectively and efficiently.