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MarketScreener Homepage  >  Equities  >  Australian Stock Exchange  >  Buru Energy Limited    BRU   AU000000BRU3

BURU ENERGY LIMITED

(BRU)
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Buru Energy : Corporate Governance Statement and Appendix 4G

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03/13/2020 | 12:53am EDT

Corporate Governance Statement

The ASX Listing Rules require listed entities to disclose the extent to which they have followed the Corporate Governance Principles and Recommendations set by the ASX Corporate Governance Council during the reporting period. This corporate governance statement summarises the Company's corporate governance practices that have been in place during the year taking into consideration the corporate governance principles relevant to a company of Buru Energy's nature and size.

This Corporate Governance Statement has been prepared on the basis of disclosure under the 3rd edition of the ASX Corporate Governance Principles and Recommendations, detailing the Company's compliance with these principles during the financial year ended 31 December 2019 on an "if not, why not" basis.

This Corporate Governance statement can be viewed on the Company's website, at https://www.buruenergy.com/site/about-us/corporate-governance.

ASX Principle 1 - Lay solid foundations for management and oversight

Role of the Board

The respective roles and responsibilities of both the Board and management are set out in the Board Charter which can be viewed in the corporate governance section of the Company's website.

The Board is collectively responsible for the governance of the Company and for promoting its success. The Board's primary purpose is to govern the Company on behalf of all shareholders. The Board's specific job outputs are to maintain a link between the Company's shareholders and its operations and to create and maintain governance policies that address the broadest levels of all decisions and situations. The Board retains the responsibility for setting the Company's strategic direction and objectives and for setting limitations on the means by which management may achieve those objectives. Limitations on management are primarily imposed by approved corporate strategy and expenditure limits. The Board delegates to management the responsibility for developing the capability to achieve Buru Energy's aims and objectives and employing that capability within the limitations set by the Board. The Board monitors and maintains this delegation by requiring regular reporting by management to the Board.

The mandate to lead Buru Energy is placed by shareholders in the hands of the entire Board. The principles endorsed by the Board are as follows:

  • no person within Buru Energy, whether a Board member or a member of management, can have any authority unless the Board grants that authority;
  • all Board members are accountable individually and as a whole for any lapses of performance or behaviour by Buru Energy; and
  • the Board possesses authority only as a group, the Chairman and individual Directors have no power unless specifically given it by the Board collectively.

A Director or other officer of Buru Energy who makes a business judgment will have met the requirements as a Director of Buru Energy and their equivalent duties at common law and in equity, if they:

  • make the judgment in good faith for a proper purpose;
  • do not have a material personal interest in the subject matter of the judgment;
  • inform themselves about the subject matter of the judgment to the extent they reasonably believe to be appropriate; and
  • rationally believe that the judgment is in the best interests of Buru Energy.

The Director's or officer's belief that the judgment is in the best interests of Buru Energy is a rational one unless the belief is one that no reasonable person in their position would hold.

To assist in the execution of its responsibilities, the Board has established an Audit and Risk Committee and a Remuneration and Nomination Committee. Further details on both Committees are included in this Corporate Governance Statement.

Delegation to management

The Board delegates a portion of its authority through management limitations, policies and holding the Executive Chairman accountable. It also recognises in its policies, strategic direction and setting of objectives for management, its accountability to legal and ethical obligations and its broader responsibility to non-equity stakeholders and the community. Senior executives are responsible for supporting the Executive Chairman and assisting him with the management of the Company in accordance with the delegated authority of the Board. Senior executives are responsible for reporting all material matters to the Executive Chairman.

1

Buru Energy Limited

Corporate Governance Statement

Election of directors

The Remuneration and Nomination Committee oversees the appointment and induction process for Directors and Committee Members, and the selection, appointment and succession planning processes for the Company's Executive Chairman, executives and senior management. The Committee makes recommendations to the Board on the appropriate skill mix, personal qualities, expertise and diversity of each position. When a Board vacancy exists or there is a need for particular skills, the Committee in consultation with the Board determines the selection criteria based on the skills deemed necessary. The Committee identifies potential Board candidates with advice from external consultants when necessary. The Board then appoints the most suitable candidate. Board candidates appointed through this process must stand for election at the next general meeting of shareholders following their appointment.

All relevant information is to be provided in the Notice of Meeting seeking the election or re-election of a director including:

  • biographical details including qualifications and experience;
  • other directorships and material interests;
  • term of office;
  • statement by the Board on independence of the director;
  • statement by the Board as to whether it supports the election or re-election; and
  • any other material information.

Terms of appointment

To facilitate a clear understanding of roles and responsibilities, all non-executive directors have a signed letter of appointment. This letter of appointment letter includes acknowledgement of:

  • director responsibilities under the Corporations Act, Listing Rules, the Company's Constitution and other applicable laws;
  • corporate governance processes and Company policies;
  • Board and Board committee meeting obligations;
  • conflicts and confidentiality procedures;
  • securities trading and required disclosures;
  • access to independent advice and employees;
  • confidentiality obligations;
  • directors fees;
  • expenses reimbursement;
  • directors and officers insurance arrangements;
  • other directorships and time commitments; and
  • Board performance review and succession.

The Executive Chairman and senior executives have signed executive services agreements. For further information refer to the Remuneration Report which is included in the Company's Annual Report.

Role of Company Secretary

The Company Secretary is accountable to the Board for:

  • advising the Board and committees on corporate governance matters;
  • the completion and distribution of Board and committee papers;
  • completion of Board and committee minutes; and
  • the facilitation of director induction processes and ongoing professional development of directors.

All directors have access to the Company Secretary who has a direct reporting line to the Executive Chairman.

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Buru Energy Limited

Corporate Governance Statement

Diversity

The Board is committed to having an appropriate level of diversity on the Board and in all areas of the Group's business. The Board has established a policy regarding gender, age, ethnic and cultural diversity. Details of the policy are available on the corporate governance section of the Company's website.

The key elements of the Group's diversity policy are as follows:

  • disclose the Group's commitment to attracting and retaining a diverse range of talented people to work in all levels of its business, from entry positions to Board members;
  • annual assessment of gender diversity on the Board and in all areas of the Group's business and reporting against the gender diversity objectives approved by the Board.

Due to workforce numbers, Buru Energy is not a 'relevant employer' under the Workplace Agenda Equality Act. The Group's gender diversity as at the end of the reporting period was as follows:

Period

31 December 2019

31 December 2018

Gender

Male

Females

Males

Females

Level

Number

%

Number

%

Number

%

Number

%

Directors

2

67

1

33

2

67

1

33

Senior Executives

3

100

-

-

2

100

-

-

All Other Employees

28

80

7

20

31

86

5

14

Total

33

80

8

20

35

85

6

15

Due to the technical nature of the company's operations it is difficult to find suitably qualified and experienced female staff, however, the Company actively encourages and supports its female staff in their career development.

In respect of Aboriginal engagement, the Company's diversity objectives in 2019 were as follows:

•  Continue to grow and develop the Company's Aboriginal workforce; and

•  Continue to increase partnering with local Kimberley Aboriginal businesses to provide services.

Buru has a number of Nyikina Mangala, Yawuru and Warrwa Aboriginal employees both at the Ungani Oilfield, and to support our Kimberley operations more generally. The Company continues to comply with the relevant Ungani Traditional Owner agreements and is exceeding its targets for Aboriginal employment including recruiting an additional Aboriginal employee at our Ungani Oilfield during 2019. Buru continues to provide support for local Aboriginal ranger groups for key areas in which we operate and continues to put preference on contracting local Kimberley Aboriginal businesses

to provide services. There was a ~95% increase in the value of contracts delivered by Aboriginal businesses in 2019 compared to 2018. Services were provided by Aboriginal businesses in the areas of civil works, rehabilitation operations, site security and inspections and environmental monitoring. These same diversity objectives will continue into 2020.

Performance review

Approximately every three years, or more frequently if appropriate, the Remuneration and Nomination Committee will undertake an evaluation of the performance of the Board, its Committees, individual Directors, and senior executives. The other Directors have an opportunity to contribute to the review process. The reviews generate recommendations to the Board, which votes on them. The Committee's nomination of existing Directors for reappointment is not automatic and depends on, amongst other things, the outcome of the review process. The Committee reviews and makes recommendations to the Board on remuneration packages and policies applicable to the executive officers and Directors of the Company and of other Group executives for the Group. It is also responsible for short and long term incentive performance packages, superannuation entitlements and retirement and termination entitlements. No performance review was undertaken during the reporting period of the Board, its Committees and individual Directors. A performance review was undertaken during the reporting period of senior executives during the annual performance review process.

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Buru Energy Limited

Corporate Governance Statement

Board Meetings

Full Board meetings are conducted in accordance with the Company's constitution at least nine times a year, but generally monthly, at venues, dates and times agreed, where practical, in advance. In accordance with the constitution, the quorum for a meeting is two Directors, however all meetings are scheduled so that all Directors can attend.

The agenda for each Board meeting is developed by the Company Secretary in consultation with the Executive Chairman. Board papers are distributed to Directors at least three business days before the meeting, unless the meeting has been called urgently. Board papers contain the information required for the Directors to make informed decisions in the efficient discharge of their responsibilities. The minutes of Board meetings are circulated, approved and signed by the Chairman within fourteen days of the date of the meeting.

Urgent matters that cannot wait until the next scheduled Board meeting and for which an impromptu Board meeting cannot be arranged are dealt with by a circular resolution in accordance with Buru Energy's Constitution (Article 11.22). Circular resolutions are normally preceded by telephone or email correspondence if practical, and are approved by the Executive Chairman before being circulated. The resolution is passed when it is signed by the last of the Directors. Signed circular resolutions are entered into the minute book. The Board meets informally as required to discuss matters and to ensure members are fully informed of the Company's operations. Directors are also provided with a monthly report setting out material matters that have occurred.

Independent professional advice and access to Company information

Each Director has the right to access all relevant Company information and to speak to and have access to management. Subject to prior consultation with and approval by the Chairman, each Director may seek independent professional advice in respect of the Company and the Board's affairs from a suitably qualified adviser at the Group's expense. A copy of the advice received by a Director in these circumstances will, subject to the Chairman's discretion, be made available to all other members of the Board. No Director sought such advice during the year.

ASX Principle 2 - Structure the Board to add value

Composition of the Board & Director Independence

The names of the Directors of the Company in office at the date of this statement, and information regarding Director's independence, experience and length of service, is set out in the Directors' Report.

The composition of the Board is determined using the following principles:

  • a minimum of three and no more than eight Directors, with extensive knowledge relevant to the conduct of the Company's business;
  • a majority of independent Non-executive Directors;
  • a Non-executive Independent Director as Chairman (however this is not currently complied with as set out below); and
  • all Directors are subject to re-election every three years, except for the Managing Director (currently the functional role of the Executive Chairman).

The Board should, collectively, have the appropriate level of personal qualities, skills, experience and time commitment to properly fulfil its responsibilities or have ready access to such skills where they are not available.

The Board considers the mix of skills and the diversity of Board members when assessing the composition of the Board. The Board assesses existing and potential Directors' skills to ensure they have appropriate capabilities, experiences, skills and ability to add value to the Company's business as a whole. The composition of the Board is also assessed having regard to the Company's Diversity Policy, which is designed to promote and achieve diversity at all levels of Buru Energy's business, including the Board. A detailed skills matrix of the Board for a company of Buru Energy's size and nature is not considered necessary. The Board assesses the independence of each Director annually in light of the interests declared by them. Directors will be considered independent if they meet the definition of an 'Independent Director' in accordance with the ASX Corporate Governance Council Corporate Governance Principles and Recommendations.

Mr Eric Streitberg is a major shareholder of the Company and undertakes full time executive duties with the Company. Consequently, his role as the Executive Chairman of the Company does not comply with ASX Recommendation 2.5 which states that the Chairman of the Board should be an Independent Director. This has been the arrangement following the restructure of the Buru Energy Board in 2014. This does not comply with ASX best practice guidelines, but the Board is of the view that the current composition of the Board is appropriate for the current situation of the Company.

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Buru Energy Limited

Corporate Governance Statement

Remuneration and Nomination Committee

The Company has a combined Remuneration and Nomination Committee. The composition of the Remuneration and Nomination Committee is a minimum of three members, the majority of whom are independent Non-executive Directors. The members of the Remuneration and Nomination Committee during the period were:

•  Ms Eve Howell - Chairperson, Independent Non-executive•  Mr Robert Willes - Independent Non-executive

•  Mr Eric Streitberg

The Company Secretary is the Secretary of the Remuneration and Nomination Committee. The Executive Chairman and Company Secretary do not attend meetings involving matters pertaining to themselves. The Remuneration and Nomination Committee meet at least three times a year and as often as required as determined by the Chairperson of the Committee. The number of meetings that the Committee held, and the number of meetings attended by each Committee member during the year is disclosed in the Directors' Report. Any Committee member may convene a meeting of the Committee and two members constitute a quorum. The Committee has the right to access management and may engage independent professional advisers as it requires, to assist it to discharge its purpose and responsibilities. The minutes of meetings are circulated, approved and signed by the Chairman within twenty one days of the date of the meeting. Further details on the Remuneration and Nomination Committee, including its charter, the Board Renewal and Performance Evaluation Policy and the Diversity Policy can be viewed in the corporate governance section of the Company's website.

Director Education

Each new Director will undergo a formal induction at the earliest opportunity to enable them to gain an understanding of the Company's financial, strategic, operational and risk management position and to participate fully and actively in Board decision-making. Directors also have the opportunity to visit Company facilities and meet with management to gain a better understanding of business operations. Directors are also given access to continuing education opportunities to update and enhance their skills and knowledge.

ASX Principle 3 - Act ethically and responsibly

Code of conduct

Buru Energy has established a Code of Conduct and this can be viewed in the corporate governance section of the Company's website. The Code of Conduct applies to all Directors, senior executives, employees and contractors working on Buru Energy sites. It sets out the practices necessary to maintain confidence in the Company's honesty and integrity and the practices necessary to take into account the legal obligations and the expectations of the Company's stakeholders and the responsibility and accountability of individuals for reporting and investigating reports of unethical practices.

The Code of Conduct sets out the procedure to be followed if there is, or may be, a conflict between the personal or other interests of a Director and the business of the Company including the notification of an interest to the Board and a withdrawal from a meeting in which the material matter is discussed. There have been no reports of a departure from the Code of Conduct.

Trading in Company securities by Directors and employees

The key elements of the Company's share trading policy for Directors and employees are:

•  Identification of those restricted from trading - Directors and Senior Executives may acquire shares in the Company, but are prohibited from dealing in Company shares or exercising options:

  • in respect of a well drilling program in which Buru Energy has an interest, from the date on which the casing string above the first objective is set (or such earlier time or event as may be notified to staff by the Executive Chairman) until the close of trading on the day that the drilling rig has been released from the relevant location;
  • two weeks prior to the release of Buru Energy's half-year and annual reports;
  • whilst in possession of price sensitive information not yet released to the market.

•  to raise the awareness of legal prohibitions including transactions with colleagues and external advisers;

•  to raise awareness that the Group prohibits entering into transactions that limit economic risks related to unvested share based payments;

  • to raise awareness that the Group prohibits those restricted from trading in Company shares as described above from entering into transactions such as margin loans that could trigger a trade during a prohibited period;

•  to require details to be provided of intended trading in the Company's shares;

•  to require details to be provided of the subsequent confirmation of the trade; and

•  the identification of processes for unusual circumstances where discretions may be exercised in cases such as financial hardship.

The policy also details the insider trading provisions of the Corporations Act 2001 and is reproduced in full on the Company's website.

5

Buru Energy Limited

Corporate Governance Statement

ASX Principle 4 - Safeguard integrity in corporate reporting

Audit and Risk Committee

The Company has a combined Audit Committee and Risk Committee. The Audit and Risk Committee advises on the establishment and maintenance of a framework of internal control and appropriate ethical standards for the management of the Group.

The Audit and Risk Committee is responsible for oversight and review of:

• 

the annual and half yearly statutory financial statements;

• 

procedures and issues that could have a significant impact on financial results (for example impairment testing);

•  Buru Energy's internal controls including accounting controls;

  • external auditor's independence and monitoring the audit process in accordance with the international auditing

standards and any other applicable regulations;

•  the appropriateness of the external auditor's provision of non-audit services; •  the need for and, if required, the scope and conduct of internal audit;

•  the establishment and implementation of a risk management process to identify, assess, monitor and control risk; •  management's periodic risk assessments and recommendations;

•  the adequacy of Buru Energy's insurances;

•  compliance with appropriate regulations (including environmental and safety); and

•  reporting on reserves in accordance with the appropriate regulations and guidelines.

The Audit and Risk Committee reviews the performance of the external auditors on an annual basis and will meet with them during the year to:

  • discuss the external audit plans, identify any significant changes in structure, operations, internal controls or accounting

policies likely to impact the financial statements and to review the fees

proposed for the audit work to

be performed;

review the half-year and full year financial reports prior to lodgement with the ASX, and any significant

adjustments

required as a result of the auditor's findings, and to recommend Board

approval of these documents, prior to

announcement; and

review the results and findings of the auditor, the adequacy of accounting and financial controls, and to

monitor the

implementation of any recommendations made.

The composition of the Audit and Risk Committee is a minimum of three members and is ordinarily comprised of only Non- executive Directors. The members of the Audit and Risk Committee during the period were:

•  Mr Robert Willes (Chairperson) - Independent Non-executive•  Ms Eve Howell - Independent Non-executive

•  Mr Eric Streitberg - (Not independent but required to meet the minimum number of three members)

The external auditors, the Executive Chairman (when not a member of the Committee) and the Chief Financial Officer, are invited to Audit and Risk Committee meetings at the discretion of the Committee.

The Audit and Risk Committee meet at least three times a year and as often as required as determined by the Chairperson of the Committee. The number of meetings that the Committee held, and the number of meetings attended by each Committee member during the year is disclosed in the Directors' Report. Any Committee member may convene a meeting of the Committee and two members constitute a quorum. The Committee has the right to access management and may engage independent professional advisers as it requires, to assist it to discharge its purpose and responsibilities. The Company Secretary is the Secretary of the Audit and Risk Committee. The minutes of meetings are circulated, approved and signed by the Chairperson within twenty one days of the date of the meeting. The external auditor met with the Audit and Risk Committee twice during the year.

Further details on the Audit and Risk Committee including its charter can be viewed in the corporate governance section of the Company's website.

6

Buru Energy Limited

Corporate Governance Statement

Financial Statements

The Executive Chairman and the Chief Financial Officer have declared in writing to the Board that in respect of both the 31 December 2019 financial report and 30 June 2019 half-year financial report of the Company and its controlled entities that:

• 

the Company's financial records

have

been properly maintained;

• 

the financial

statements

comply

with

accounting standards;

• 

the financial

statements

give a true and fair view;

•  these statements are based on a sound system of risk management; and

• 

the Company's risk management and internal controls are operating efficiently and effectively.

These representations are made prior to the Board approval of the release of the financial reports and is made after enquiry of, and representation by, appropriate levels of management.

External Auditor

The external auditor attends the annual general meeting to answer questions concerning the conduct of the audit, the preparation and content of the auditor's report, accounting policies adopted by the Group and the independence of the auditor in relation to the conduct of the audit.

Internal Audit

Given the size and scale of Buru Energy, it does not have an internal audit function.

ASX Principle 5 - Make timely and balanced disclosure

The Board provides shareholders with information using a comprehensive Continuous Disclosure and Market Communications Policy which includes identifying matters that may have a material effect on the price of the Company's securities, notifying them to the ASX, posting them on the Company's website, and issuing media releases. More details of the policy are available on the Company's website.

In summary, the Continuous Disclosure and Market Communications Policy operates as follows:

  • the Executive Chairman and Company Secretary are responsible for interpreting the Group's policy and where

necessary informing and seeking approval from the Board. The Executive Chairman and Company Secretary are primarily responsible for all external communications including releases made on the ASX;

•  the full annual report is made available to all shareholders via the Company's website. A physical copy will be sent to any shareholder that specifically requests it. The full annual report includes relevant information about the operations of the Group during the year, changes in the state of affairs and details of future developments;

•  the half-yearly report is made available to all shareholders via the Company's website. A physical copy will be sent to any shareholder that specifically requests it. The half-yearly report contains summarised financial information and a review of the operations of the Group during the period;

  • proposed major changes in the Group which may impact on share ownership rights are submitted to a vote of shareholders;
  • all announcements made to the ASX, and related information (including information provided to analysts or the media

during briefings), are placed on the Company's website after they are released to the ASX;

  • the full texts of notices of meetings and associated explanatory material are placed on the Company's website; and
  • all of the above information, dating back to the listing of the Company, is made available on the Company's website within one day of public release, and is emailed to all shareholders who lodge their email contact details with the Company. Information on lodging email addresses with the Company is available on the Company's website.

7

Buru Energy Limited

Corporate Governance Statement

ASX Principle 6 - Respect the rights of security holders

Company website and corporate governance

The following information is included on the Company's website:

  • company overview;
  • profiles of directors and senior executives;
  • corporate directory; and
  • corporate governance documents including key policies, Board and committee charters and the Company's Constitution.

Investor Relations

The Board aims to ensure that shareholders and investors have appropriate access to Company information. The Company has a strategy to promote effective two way communication with shareholders through a policy of open disclosure to shareholders, regulatory authorities and the broader community of all material information with respect to the Company's affairs including, but not limited to:

  • process for performance evaluation of the Board, its committees, the Executive Chairman and senior executives;
  • the link between remuneration paid to directors and key executives and corporate performance, as more fully disclosed in the annual Remuneration Report, which is included in the Company's Annual Report;
  • shorter, more comprehensible notices of meetings.

The Company will ensure that:

•  all documents that are released to the ASX are made available as soon as possible on the Company's website; and •  all other information on the Company's website is updated on a regular basis.

The Company will also make timely announcements concerning:

•  changes to directors;

•  changes to the Executive Chairman's contract or remuneration package;

•  grant, expiry or vesting of employee share options or share appreciation rights; •  share purchases or divestment by Directors;

•  conflicts of interest & related party transactions; and •  significant changes to accounting policies.

In addition to communicating with shareholders, the Company also communicates with investors who may or may not be shareholders. These communication activities must not involve the disclosure of confidential or potentially market sensitive information. When briefings with investors and analysts are held any price sensitive information included in such presentations is first made available to the market.

Participation at Meetings

The Board encourages full participation of shareholders at the Annual General Meeting, to ensure a high level of accountability and identification with the Group's strategy and goals. Important issues are presented to the shareholders as single resolutions.

Shareholders are requested to vote on the appointment and aggregate remuneration of Directors, the granting of options and shares to Directors, the Remuneration report and changes to the Constitution and all other matters requiring shareholder approval. A copy of the Constitution is available to any shareholder who requests it.

Shareholder communications

Shareholders have the option of electing to receive all Company and share registry communications electronically, and also to send communications via email or to the Company website. All shareholders have the ability to request an electronic copy of ASX releases.

8

Buru Energy Limited

Corporate Governance Statement

ASX Principle 7 - Recognise and manage risk

Audit and Risk Committee

The Company has a combined Audit Committee and Risk Committee. Information on that Committee in included above under ASX Principle 4.

Risk management

The Audit and Risk Committee oversees the establishment, implementation, and annual review of the Group's Risk Management System. Management has established and implemented the Risk Management System for assessing, monitoring and managing all risks, including material business risks, for the Group (including sustainability risk). The Executive Chairman and the Chief Financial Officer have provided assurance, in writing to the Board, that the financial reporting risk management and associated compliance and controls have been assessed and found to be operating effectively. The operational and other risk management compliance and controls have also been assessed and found to be operating effectively.

Management provide the risk profile to the Audit and Risk Committee that outlines the material business risks to the Group. Risk reporting includes the status of risks through integrated risk management programs aimed at ensuring risks are identified, assessed and appropriately managed. The Audit and Risk Committee reports the status of material business risks to the Board on an annual basis, and a review was undertaken with senior management during the year. Further details of the Group's risk management policy and internal compliance and control system are available on the Company's website.

The risks involved with oil and gas exploration generally and the specific risks associated with Buru Energy's activities in particular are regularly monitored and all exploration and investment proposals reviewed include a conscious consideration of the issues and risks of each proposal. The Company's executive and senior management have extensive experience in the industry and manage and monitor potential exposures facing Buru Energy. The Group's operations are subject to significant health, safety and environmental regulation under both Commonwealth and State legislation in relation to its oil and gas exploration and production activities. The Group is committed to achieving a high standard of HSE performance and continuous improvement. It has established a Group wide Health & Safety Policy and Environmental Policy together with operation and activity specific HSE plans to manage the Company's activities. Based on the results of enquiries made, the Board is not aware of any significant material, non-compliance of any of the policies or plans during the period covered by this report.

Internal Audit

Given the size and scale of Buru Energy, it does not have an internal audit function.

The Board is responsible for the overall internal control framework, but recognises that no cost-effective internal control system will preclude all errors and irregularities. Comprehensive practices have been established to ensure:

  • capital expenditure and commitments above a certain size obtain prior Board approval;
  • financial exposures are controlled, further details of the Group's policies relating to interest rate management, forward exchange rate management and credit risk management are included in the Annual Report;
  • occupational health and safety standards and management systems are monitored and reviewed to achieve high standards of performance and compliance with regulations;
  • business transactions are properly authorised and executed;
  • the quality and integrity of personnel;

financial reporting accuracy and compliance with the financial reporting regulatory framework; and

  • Health, safety and environmental regulation compliance.

9

Buru Energy Limited

Corporate Governance Statement

ASX Principle 8 - Remunerate fairly and responsibly

Remuneration and Nomination Committee

The Company has a combined Remuneration and Nomination Committee. Information on that Committee is included above under ASX Principle 2.

The Company is committed to adopting remuneration practices that:

•  align the interests of employees and shareholders; •  attract and retain suitably qualified employees; and •  motivate employees to achieve superior performance.

The Remuneration and Nomination Committee is responsible for making recommendations to the Board on remuneration policies and employment practices applicable to directors, senior executives and employees of the Company.

For details of the Company's policies and practices regarding the remuneration of directors and senior executives and remuneration paid to directors and senior executives please refer to the Remuneration Report, which is included in the Annual Report. For details of the Company's Employee Share Option Plan please also refer to the Remuneration Report. Note that employees are prohibited from entering into hedge contracts which limit the economic risk of participation

in this plan. Formal appraisals are conducted annually for all employees. Training and development and appropriate remuneration and incentives with regular performance reviews create an environment of cooperation and constructive dialogue with employees and senior management.

10

Buru Energy Limited

Rules 4.7.3 and 4.10.31

Appendix 4G

Key to Disclosures

Corporate Governance Council Principles and Recommendations

Name of entity:

BURU ENERGY LIMITED

ABN / ARBN:

Financial year ended:

71 130 651 437

31 December 2019

Our corporate governance statement2 for period above can be found at:3

  • These pages of our annual report:

The Corporate Governance Statement is accurate and up to date as at 31 December 2019 and has been approved by the board.

The annexure includes a key to where our corporate governance disclosures can be located.

Date: 13 March 2020

Shane McDermott

Company Secretary

1 Under Listing Rule 4.7.3, an entity must lodge with ASX a completed Appendix 4G at the same time as it lodges its annual report with ASX.

Listing Rule 4.10.3 requires an entity that is included in the official list as an ASX Listing to include in its annual report either a corporate governance statement that meets the requirements of that rule or the URL of the page on its website where such a statement is located. The corporate governance statement must disclose the extent to which the entity has followed the recommendations set by the ASX Corporate Governance Council during the reporting period. If the entity has not followed a recommendation for any part of the reporting period, its corporate governance statement must separately identify that recommendation and the period during which it was not followed and state its reasons for not following the recommendation and what (if any) alternative governance practices it adopted in lieu of the recommendation during that period.

Under Listing Rule 4.7.4, if an entity chooses to include its corporate governance statement on its website rather than in its annual report, it must lodge a copy of the corporate governance statement with ASX at the same time as it lodges its annual report with ASX. The corporate governance statement must be current as at the effective date specified in that statement for the purposes of rule 4.10.3.

  1. "Corporate governance statement" is defined in Listing Rule 19.12 to mean the statement referred to in Listing Rule 4.10.3 which discloses the extent to which an entity has followed the recommendations set by the ASX Corporate Governance Council during a particular reporting period.
  2. Mark whichever option is correct and then complete the page number(s) of the annual report, or the URL of the web page, where the entity's corporate governance statement can be found. You can, if you wish, delete the option which is not applicable.

Throughout this form, where you are given two or more options to select, you can, if you wish, delete any option which is not applicable and just retain the option that is applicable. If you select an option that includes "OR" at the end of the selection and you delete the other options, you can also, if you wish, delete the "OR" at the end of the selection.

Page 1

ANNEXURE - KEY TO CORPORATE GOVERNANCE DISCLOSURES

Corporate Governance Council recommendation

We have followed the recommendation in full for the whole of the

We have NOT followed the recommendation in full for the whole

period above. We have disclosed …

of the period above. We have disclosed …4

PRINCIPLE 1 - LAY SOLID FOUNDATIONS FOR MANAGEMENT AND OVERSIGHT

1.1

A listed entity should disclose:

… the fact that we follow this recommendation:

(a)

the respective roles and responsibilities of its board and

in our Corporate Governance Statement

management; and

(b)

those matters expressly reserved to the board and those

… and information about the respective roles and responsibilities of

delegated to management.

our board and management (including those matters expressly

reserved to the board and those delegated to management):

at https://www.buruenergy.com/site/about-us/corporate-

governance

1.2

A listed entity should:

… the fact that we follow this recommendation:

(a)

undertake appropriate checks before appointing a person, or

in our Corporate Governance Statement

putting forward to security holders a candidate for election,

as a director; and

(b)

provide security holders with all material information in its

possession relevant to a decision on whether or not to elect

or re-elect a director.

1.3

A listed entity should have a written agreement with each director

… the fact that we follow this recommendation:

and senior executive setting out the terms of their appointment.

in our Corporate Governance Statement

1.4

The company secretary of a listed entity should be accountable

… the fact that we follow this recommendation:

directly to the board, through the chair, on all matters to do with the

in our Corporate Governance Statement

proper functioning of the board.

4 If you have followed all of the Council's recommendations in full for the whole of the period above, you can, if you wish, delete this column from the form and re-format it.

Page 2

Corporate Governance Council recommendation

We have followed the recommendation in full for the whole of the

We have NOT followed the recommendation in full for the whole

period above. We have disclosed …

of the period above. We have disclosed …4

1.5

A listed entity should:

… the fact that we have a diversity policy that complies with

(a)

have a diversity policy which includes requirements for the

paragraph (a):

board or a relevant committee of the board to set

in our Corporate Governance Statement

measurable objectives for achieving diversity and to assess

annually both the objectives and the entity's progress in

… and a copy of our diversity policy or a summary of it:

achieving them;

(b)

disclose that policy or a summary of it; and

at https://www.buruenergy.com/site/about-us/corporate-

(c)

disclose as at the end of each reporting period the

governance

measurable objectives for achieving diversity set by the

board or a relevant committee of the board in accordance

… and the measurable objectives for achieving diversity set by the

with the entity's diversity policy and its progress towards

board or a relevant committee of the board in accordance with our

achieving them and either:

diversity policy and our progress towards achieving them:

(1) the respective proportions of men and women on the

in our Corporate Governance Statement

board, in senior executive positions and across the

whole organisation (including how the entity has defined

"senior executive" for these purposes); or

… and the information referred to in paragraphs (c)(1) or (2):

(2) if the entity is a "relevant employer" under the Workplace

in our Corporate Governance Statement

Gender Equality Act, the entity's most recent "Gender

Equality Indicators", as defined in and published under

that Act.

1.6

A listed entity should:

… the evaluation process referred to in paragraph (a):

(a)

have and disclose a process for periodically evaluating the

in our Corporate Governance Statement

performance of the board, its committees and individual

directors; and

… and the information referred to in paragraph (b):

(b)

disclose, in relation to each reporting period, whether a

performance evaluation was undertaken in the reporting

in our Corporate Governance Statement

period in accordance with that process.

1.7

A listed entity should:

… the evaluation process referred to in paragraph (a):

(a)

have and disclose a process for periodically evaluating the

in our Corporate Governance Statement

performance of its senior executives; and

(b)

disclose, in relation to each reporting period, whether a

… and the information referred to in paragraph (b):

performance evaluation was undertaken in the reporting

period in accordance with that process.

in our Corporate Governance Statement

Page 3

Corporate Governance Council recommendation

We have followed the recommendation in full for the whole of the

We have NOT followed the recommendation in full for the whole

period above. We have disclosed …

of the period above. We have disclosed …4

PRINCIPLE 2 - STRUCTURE THE BOARD TO ADD VALUE

2.1

The board of a listed entity should:

The entity complies with paragraph (a)

(a)

have a nomination committee which:

(1) has at least three members, a majority of whom are

… the fact that we have a nomination committee that complies with

independent directors; and

paragraphs (1) and (2):

(2) is chaired by an independent director,

in our Corporate Governance Statement

and disclose:

(3) the charter of the committee;

… and a copy of the charter of the committee:

(4) the members of the committee; and

at https://www.buruenergy.com/site/about-us/corporate-

(5) as at the end of each reporting period, the number of

times the committee met throughout the period and

governance

the individual attendances of the members at those

meetings; or

… and the information referred to in paragraphs (4) and (5):

(b)

if it does not have a nomination committee, disclose that

in our Directors Report for the year ended 31 December 2019

fact and the processes it employs to address board

which is included in the Annual Report

succession issues and to ensure that the board has the

appropriate balance of skills, knowledge, experience,

independence and diversity to enable it to discharge its

duties and responsibilities effectively.

2.2

A listed entity should have and disclose a board skills matrix

an explanation why that is so in our Corporate Governance

setting out the mix of skills and diversity that the board currently

Statement

has or is looking to achieve in its membership.

Page 4

Corporate Governance Council recommendation

We have followed the recommendation in full for the whole of the

We have NOT followed the recommendation in full for the whole

period above. We have disclosed …

of the period above. We have disclosed …4

2.3

A listed entity should disclose:

… the names of the directors considered by the board to be

(a) the names of the directors considered by the board to be

independent directors:

independent directors;

in our Directors Report for the year ended 31 December 2019

(b) if a director has an interest, position, association or

which is included in the Annual Report

relationship of the type described in Box 2.3 but the board

is of the opinion that it does not compromise the

… and, where applicable, the information referred to in paragraph (b):

independence of the director, the nature of the interest,

position, association or relationship in question and an

in our Directors Report for the year ended 31 December 2019

explanation of why the board is of that opinion; and

which is included in the Annual Report

(c) the length of service of each director.

… and the length of service of each director:

in our Directors Report for the year ended 31 December 2019

which is included in the Annual Report

2.4

A majority of the board of a listed entity should be independent

… the fact that we follow this recommendation:

directors.

in our Corporate Governance Statement

2.5

The chair of the board of a listed entity should be an independent

an explanation why that is so in our Corporate Governance

director and, in particular, should not be the same person as the

Statement

CEO of the entity.

2.6

A listed entity should have a program for inducting new directors

… the fact that we follow this recommendation:

and provide appropriate professional development opportunities

in our Corporate Governance Statement

for directors to develop and maintain the skills and knowledge

needed to perform their role as directors effectively.

PRINCIPLE 3 - ACT ETHICALLY AND RESPONSIBLY

3.1

A listed entity should:

… our code of conduct or a summary of it:

(a) have a code of conduct for its directors, senior executives

in our Corporate Governance Statement

and employees; and

(b) disclose that code or a summary of it.

Page 5

Corporate Governance Council recommendation

We have followed the recommendation in full for the whole of the

We have NOT followed the recommendation in full for the whole

period above. We have disclosed …

of the period above. We have disclosed …4

PRINCIPLE 4 - SAFEGUARD INTEGRITY IN CORPORATE REPORTING

4.1

The board of a listed entity should:

The entity partly complies with paragraph (a)

(a) have an audit committee which:

the audit committee does not comply with paragraph (1) as the

(1) has at least three members, all of whom are non-

Company only has two non-executive directors

executive directors and a majority of whom are

independent directors; and

… the fact that we have an audit committee that complies with

(2) is chaired by an independent director, who is not the

paragraph (2):

chair of the board,

in our Corporate Governance Statement

and disclose:

(3) the charter of the committee;

… and a copy of the charter of the committee:

(4) the relevant qualifications and experience of the

members of the committee; and

at https://www.buruenergy.com/site/about-us/corporate-

(5) in relation to each reporting period, the number of

governance

times the committee met throughout the period and

the individual attendances of the members at those

… and the information referred to in paragraphs (4) and (5):

meetings; or

in our Directors Report for the year ended 31 December 2019

(b) if it does not have an audit committee, disclose that fact

and the processes it employs that independently verify and

which is included in the Annual Report

safeguard the integrity of its corporate reporting, including

the processes for the appointment and removal of the

external auditor and the rotation of the audit engagement

partner.

4.2

The board of a listed entity should, before it approves the entity's

… the fact that we follow this recommendation:

financial statements for a financial period, receive from its CEO

in our Corporate Governance Statement

and CFO a declaration that, in their opinion, the financial records

of the entity have been properly maintained and that the financial

statements comply with the appropriate accounting standards

and give a true and fair view of the financial position and

performance of the entity and that the opinion has been formed

on the basis of a sound system of risk management and internal

control which is operating effectively.

4.3

A listed entity that has an AGM should ensure that its external

… the fact that we follow this recommendation:

auditor attends its AGM and is available to answer questions

in our Corporate Governance Statement

from security holders relevant to the audit.

Page 6

Corporate Governance Council recommendation

We have followed the recommendation in full for the whole of the

We have NOT followed the recommendation in full for the whole

period above. We have disclosed …

of the period above. We have disclosed …4

PRINCIPLE 5 - MAKE TIMELY AND BALANCED DISCLOSURE

5.1

A listed entity should:

… our continuous disclosure compliance policy or a summary of it:

(a) have a written policy for complying with its continuous

in our Corporate Governance Statement

disclosure obligations under the Listing Rules; and

(b) disclose that policy or a summary of it.

PRINCIPLE 6 - RESPECT THE RIGHTS OF SECURITY HOLDERS

6.1

A listed entity should provide information about itself and its

… information about us and our governance on our website:

governance to investors via its website.

at https://www.buruenergy.com/site/about-us/corporate-

governance

6.2

A listed entity should design and implement an investor relations

… the fact that we follow this recommendation:

program to facilitate effective two-way communication with

in our Corporate Governance Statement

investors.

6.3

A listed entity should disclose the policies and processes it has in

… our policies and processes for facilitating and encouraging

place to facilitate and encourage participation at meetings of

participation at meetings of security holders:

security holders.

in our Corporate Governance Statement

6.4

A listed entity should give security holders the option to receive

… the fact that we follow this recommendation:

communications from, and send communications to, the entity

in our Corporate Governance Statement

and its security registry electronically.

Page 7

Corporate Governance Council recommendation

We have followed the recommendation in full for the whole of the

We have NOT followed the recommendation in full for the whole

period above. We have disclosed …

of the period above. We have disclosed …4

PRINCIPLE 7 - RECOGNISE AND MANAGE RISK

7.1

The board of a listed entity should:

The entity complies with paragraph (a)

(a) have a committee or committees to oversee risk, each of

… the fact that we have a committee or committees to oversee risk

which:

that comply with paragraphs (1) and (2):

(1) has at least three members, a majority of whom are

in our Corporate Governance Statement

independent directors; and

(2) is chaired by an independent director,

… and a copy of the charter of the committee:

and disclose:

at https://www.buruenergy.com/site/about-us/corporate-

(3) the charter of the committee;

(4) the members of the committee; and

governance

(5) as at the end of each reporting period, the number of

… and the information referred to in paragraphs (4) and (5):

times the committee met throughout the period and

the individual attendances of the members at those

in our Directors Report for the year ended 31 December 2019

meetings; or

which is included in the Annual Report

(b) if it does not have a risk committee or committees that

satisfy (a) above, disclose that fact and the processes it

employs for overseeing the entity's risk management

framework.

7.2

The board or a committee of the board should:

… the fact that board or a committee of the board reviews the entity's

(a) review the entity's risk management framework at least

risk management framework at least annually to satisfy itself that it

annually to satisfy itself that it continues to be sound; and

continues to be sound:

(b) disclose, in relation to each reporting period, whether such

in our Corporate Governance Statement

a review has taken place.

… and that such a review has taken place in the reporting period

covered by this Appendix 4G:

in our Corporate Governance Statement

Page 8

Corporate Governance Council recommendation

We have followed the recommendation in full for the whole of the

We have NOT followed the recommendation in full for the whole

period above. We have disclosed …

of the period above. We have disclosed …4

7.3

A listed entity should disclose:

an explanation why that is so in our Corporate Governance

(a) if it has an internal audit function, how the function is

Statement

structured and what role it performs; or

(b) if it does not have an internal audit function, that fact and

the processes it employs for evaluating and continually

improving the effectiveness of its risk management and

internal control processes.

7.4

A listed entity should disclose whether it has any material

… whether we have any material exposure to economic,

exposure to economic, environmental and social sustainability

environmental and social sustainability risks and, if we do, how we

risks and, if it does, how it manages or intends to manage those

manage or intend to manage those risks:

risks.

in our Corporate Governance Statement

Page 9

Corporate Governance Council recommendation

We have followed the recommendation in full for the whole of the

We have NOT followed the recommendation in full for the whole

period above. We have disclosed …

of the period above. We have disclosed …4

PRINCIPLE 8 - REMUNERATE FAIRLY AND RESPONSIBLY

8.1

The board of a listed entity should:

The entity complies with paragraph (a)

(a) have a remuneration committee which:

… the fact that we have a remuneration committee that complies with

(1) has at least three members, a majority of whom are

paragraphs (1) and (2):

independent directors; and

in our Corporate Governance Statement

(2) is chaired by an independent director,

and disclose:

… and a copy of the charter of the committee:

(3) the charter of the committee;

at https://www.buruenergy.com/site/about-us/corporate-

(4) the members of the committee; and

governance

(5) as at the end of each reporting period, the number of

times the committee met throughout the period and

… and the information referred to in paragraphs (4) and (5):

the individual attendances of the members at those

meetings; or

in our Directors Report for the year ended 31 December 2019

(b) if it does not have a remuneration committee, disclose that

fact and the processes it employs for setting the level and

which is included in the Annual Report

composition of remuneration for directors and senior

executives and ensuring that such remuneration is

appropriate and not excessive.

8.2

A listed entity should separately disclose its policies and

… separately our remuneration policies and practices regarding the

practices regarding the remuneration of non-executive directors

remuneration of non-executive directors and the remuneration of

and the remuneration of executive directors and other senior

executive directors and other senior executives:

executives.

in our Remuneration Report for the year ended 31 December

2019 which is included in the Annual Report

8.3

A listed entity which has an equity-based remuneration scheme

… our policy on this issue or a summary of it:

should:

in our Corporate Governance Statement

(a) have a policy on whether participants are permitted to

enter into transactions (whether through the use of

derivatives or otherwise) which limit the economic risk of

participating in the scheme; and

(b) disclose that policy or a summary of it.

Page 10

Corporate Governance Council recommendation

We have followed the recommendation in full for the whole of the

We have NOT followed the recommendation in full for the whole

period above. We have disclosed …

of the period above. We have disclosed …4

ADDITIONAL DISCLOSURES APPLICABLE TO EXTERNALLY MANAGED LISTED ENTITIES

-

Alternative to Recommendation 1.1 for externally managed listed

N/A

entities:

The responsible entity of an externally managed listed entity

should disclose:

(a) the arrangements between the responsible entity and the

listed entity for managing the affairs of the listed entity;

(b) the role and responsibility of the board of the responsible

entity for overseeing those arrangements.

-

Alternative to Recommendations 8.1, 8.2 and 8.3 for externally

N/A

managed listed entities:

An externally managed listed entity should clearly disclose the

terms governing the remuneration of the manager.

Page 11

Disclaimer

Buru Energy Ltd. published this content on 13 March 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 13 March 2020 05:52:01 UTC


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Sales 2019 13,8 M 9,82 M 9,82 M
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