Corporate Governance

In recognising the need for the highest standards of corporate behaviour and accountability, the directors of Strategic Energy Resources NL ("the Company") have adhered to the principles of corporate governance. A description of the main corporate governance practices is set out below. Unless otherwise stated, the practices were in place for the entire year.

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 ensuring arrangements are in place to adequately manage those risks.

The primary responsibility 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, 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:

Kim Warren McGrath, (Chairman) BEc(Hons) LLB FAICD FTIA CPA,

Mr McGrath is an internationally experienced resources finance and investment banking executive. He is the Managing Director of Delta Corporate Finance Pty Limited, a specialist advisory group based in Sydney with active business interests in Australia and the UK.

His positions in Australia have included senior roles with Comalco and ICL, General Counsel and Company Secretary of Bank of America Australia, General Counsel with Bell Resources responsible for negotiating international lines of finance, business acquisitions and strategy and development and General Manager Strategy and Planning with Industrial Equity Limited.

During the 1990’s Mr McGrath worked in London on the restructure of companies in Eastern Europe and particularly on major operations in CIS metals and oil trading, and associated financing in London and Geneva. Prior to this he was recruited by a major corporate group as Executive Director and CEO to implement an international scheme of arrangement involving a large scale debt to equity conversion, major asset dispositions and the introduction of appropriate management planning and control measures for over 350 subsidiaries worldwide.

In addition to his business and legal qualifications Mr McGrath has completed the Advanced Management Programme at Oxford University, is a CPA and a Fellow of the Australian Institute of Company Directors. His other directorships include Oil Basins Ltd and Taragon Management Limited, the manager and responsible entity of the listed Taragon Property Fund.

Mark A Muzzin (Managing Director)

Mark A Muzzin has had over 20 years of commercial experience and holds a B.A. degree from Latrobe University, Melbourne. His career commenced in the mid eighties for a London stock broking firm and he has consulted for two of the major banks in Australia in the share custodian area. He has been involved in capital raising activities for resource companies in Australia and has consulted to various oil/gas and minerals companies. Mr Muzzin is a director of U Energy Pty Ltd which is seeking access from the Commonwealth into the Cultana Training Area in South Australia to undertake mineral exploration. He is a director of two US quoted companies and is a director of a number of Australian public and private companies. Mr Muzzin is a member of the Petroleum Exploration Society of Australia.

Glenister Lamont (Non Exectutive Director)

Glenister Lamont, BEng Mining (Hons), MBA (IMD Switzerland) FAICD, FFin, is a professional Non-Executive director. Recent roles include Managing Director and consultant for a range of resource companies. Previously, as a GM with Ashton Mining, he led strategy and commercial implementation of business development initiatives and managed all aspects of investor and corporate affairs. Prior to that, as an Executive Director at the leading European investment bank UBS Warburg, he conducted financial, technical and strategic evaluation of mining companies and participated in a wide range of corporate transactions. He has international mining experience in base metals, gold, coal and other commodities that has included experience as a mining engineer with Preussag in Germany and Houston Oil & Minerals as well as a rock mechanic engineer and mining engineer in South Africa for Goldfields of South Africa.

MelanieLeydin (Company Secretary)

Ms Leydin has 16 years experience in the accounting profession and is company secretary for a number of junior mining, oil and gas and exploration entities listed on the Australian Stock Exchange.

Independent Directors

Under ASX guidelines none of the current board are considered to be independent directors. Mr Salomon is an executive director, Mr Craib is a former employee of the company, Mr Roy holds shares and options in the company and Ms Bell is an executive director and shareholder. The ASX guidelines deem them not to be independent by virtue of their positions or former positions or security holdings. 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.

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 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; and
the Annual General Meeting and other meetings called to obtain approval for board action as appropriate.

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.

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.

Board Committees

In view of the size of the Company and the nature of its activities, the Board has considered that establishing formally constituted committees for audit, board nominations and remuneration would contribute little to its effective management. Accordingly audit matters, the nomination of new Directors and the setting, or review, of remuneration levels of Directors and senior executives are reviewed by the Board as a whole and approved by resolution of the Board (with abstentions from relevant Directors where there is a conflict of interest). Where the Board considers that particular expertise or information is required, which is not available from within their number, appropriate external advice may be taken and reviewed prior to a final decision being made by the Board.

Remuneration

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. Remuneration packages are set at levels that are intended to attract and retain executives capable of managing the Company's operations.

The terms of engagement and remuneration of executive directors is reviewed periodically by the Board, with recommendations being made by the non-executive director. Where the remuneration of a particular executive director is to be considered, the director concerned does not participate in the discussion or decision-making.

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.

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.

Code of Conduct

The Board has approved a code of conduct which sets out the principles and standards which the Board, management and employees of the Company are encouraged to strive towards when dealing with each other, shareholders and the broad community. A copy of the code may be viewed in the link Code of Conduct .

2009 Annual Report