INTRODUCTION
The Framework for Conduct of Company Business
The Company operates within this for the conduct of its business activities.
The Board of Directors establishes the Company standards. The key areas are “Direction” and “Governance”.
“Direction” includes approval of the Company’s Strategy, Plans and Budgets.
“Governance” includes the approval of the Delegation of Authority (DOA) for the conduct of the Company’s business activities and reporting standards.
It is through the DOA that the Board of Directors establishes the limits of authority of the Managing Director (MD). The authority delegation to the MD allows the MD to further delegate authority for the conduct of the daily business of the Company.
Delegation of Authority Document
The Delegation of Authority Document (DOA) is the medium through which the Board of Directors and the Managing Director communicates to all employees of the Company the minimum approval standards to be applied in conducting Company business.
The DOA is designed to support an efficient business framework to conduct business in by those who have the authority and experience to commit the Company to transactions within the scope of the approved Annual Corporate Budget.
All transactions that are outside the scope of the Annual Corporate Budget require either the Managing Director or the Board approval, depending on the value and the nature of the transaction.
The DOA aims to clearly and concisely set out the limits of authority under which employees can approve actions and transactions on behalf of the Company. If an employee is unsure whether they have the authority to approve a transaction or otherwise commit the Company to expenditure, the matter should be referred to the Chief Financial Officer.
Scope
This DOA applies to Stuart Petroleum operations based in Australia. In the event that Stuart Petroleum Limited is successful in obtaining acreage overseas then the current DOA will be revised to suit the changed circumstance.
1.4 Approval Procedures
1.4.1 Approval within Budget
No transactions are to be approved or proposed unless the activities to which they are related are included in the Corporate Budget, a Capital Project Budget or a Budget amendment approved by the MD or Board of Directors subject to this DOA.
1.4.2 Compliance with Company Policies and Procedures
Delegates may only approve transactions after satisfying themselves that the Company’s Policy and Procedures as they relate to the transactions have been complied with.
1.4.3 Approval Prior To Commencement
Documentation or electronic transactions indicating the scope and approval for the provision of services or for the purchase of goods or materials must be completed and approved prior to the commencement of work.
1.4.4 Approval of Own Expenditure
No delegate is authorised to approve expenditure incurred for his or her own benefit or relative to the performance of his or her own responsibilities (eg: travel, employee expense claims). The delegate’s supervisor must authorise these expenditures.
The Company Secretary will authorise the Managing Director’s travel expenditure.
1.4.5 Higher Levels of Approval
If employees do not have the authority level necessary to approve a transaction it should be forwarded to their Manager/Supervisor who will on forward to the next higher direct reporting level if their authority level is not sufficient.
1.4.6 Segmenting Transactions
Splitting a transaction into smaller segments or over multiple budget periods for the purpose of requiring a lower level of authority for each segment is not acceptable.
The entire transaction must be the basis for approval.
1.5 Audit
Compliance with the DOA is subject to external audit.
GENERAL AND SPECIFIC LIMITS OF AUTHORITY
The Delegation of Authority details the General and Specific Limits of Authority of the Board, the Managing Director, Management and Employees.