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directors’ report
Compliance (cont’d) Board Composition (cont’d) The Board will decide on the choice of any new director upon the creation of any new Board position and if any casual vacancy arises. Decisions to appoint new directors will be minuted. The Board considers that due to the size and complexity of the Group’s affairs it does not merit the establishment of a separate nomination committee. Until the situation changes the Board of Scandinavian Resources will carry out any necessary nomination committee functions.
Share Trading Policy Directors, officers and employees are prohibited from dealing in Scandinavian Resources shares when they possess inside information. The Board is to be notified promptly of any trading of shares in the Company by any Director or officer of the Company.
Additional Compliance Statements Risk Management The Board is responsible for ensuring that risks, and also opportunities, are identified on a timely basis and that activities are aligned with the risks and opportunities identified by the Board. The Company believes that it is crucial for all Board members to be part of this process, and as such the Board has not established a separate risk management committee. The Board has a number of mechanisms in place to ensure management’s objectives and activities are aligned by the Board. These include the following: • Board approval of a strategic plan, which encompasses strategy statements designed to meet stakeholders needs and manage business risk. • Implementation of Board approved operating plans and Board monitoring of the progress against budgets.
Significant Changes in State of Affairs Other than those disclosed in this annual report no significant changes in the state of affairs of the Group occurred during the financial year.
Significant Events after the Balance Date The following matters or circumstances has arisen since 30 June 2011 that may significantly affect the operations of the Group, the results of those operations, or the state of affairs of the Group in future financial years. a) On 20 July 2011 DPH Trust (“lender’’), of which Mr Damian Hicks is a related party, entered into a loan with Scandinavian Resources Ltd which allows $150,000 to be drawn down as and when required with interest payable at the rate of 12.5% per annum. The loan and interest is required to be repaid on or before 30 November 2011 and the lender has a second priority security over the assets of Scandinavian Resources Ltd. As a fee the lender is to be paid an amount of $500. At the date of this report the full amount of the loan has been drawn down. b) On 25 July 2011 Mrs Andrea Murray (“lender”) entered into a loan agreement with Kiruna Iron AB, a wholly owned subsidiary of Scandinavian Resources Ltd (“SCR”), which allows $250,000 to be drawn down as and when required with interest payable at the rate of 12.5% per annum. The loan and interest is required to be repaid on or before 1 February 2012. The loan is unsecured. The Board of SCR has approved the rollover of the loan into a convertible note and options following shareholder approval of a new convertible note with an extended repayment date of 31 March 2012 and options scheduled for a meeting of shareholders on 8th September 2011. On rollover the convertible note will include a fee to the lender of 50,000 unlisted options in SCR exercisable at A$0.40 each on or before 1 February 2013 and, allow for conversion for every one convertible note to convert to 1.5 ordinary fully paid shares in SCR. At the date of this report the full amount of the loan has been drawn down.
2 0 S C A N D I N A V I A N R E S O U R C E S annua l repor t 2 0 1 1