Any dealings in Kingsgate shares are reported to the Board at its next meeting. The Australian Stock Exchange is notified of any share dealing by Directors within the applicable time limit.

Internal control and risk management
The Board has overall responsibility for the Group’s systems of internal control. These systems are designed to ensure effective and efficient operations, including financial reporting and compliance with laws and regulations, with a view to managing the risk of failure to achieve business objectives. It must be recognised that internal control systems can provide only reasonable and not absolute assurance against the risk of material loss.

Areas of operational and financial risks are regularly reviewed by the Board and appropriate risk management strategies considered. The risk, control and reporting profiles are evaluated and presented to the Board, together with a risk improvement program designed to improve controls and better manage the overall level of risk. The Company has implemented and received accreditation for ISO 9001 on Quality Control, ISO 14001 on Environmental matters, ISO 18001 on Occupational Health and Safety, TLS 8001:2003 on Thai Labour standards and SA 8000:2001 on Social Accountability, ensuring a fair and equitable workplace. The Company is also a founding member of the International Cyanide Management Code and subscribes to the Minerals Council of Australia’s industry framework on sustainability, called ‘Enduring Value’. This ensures that the Company continues to be a leader in Corporate Social Responsibility in the mining sector.

Kingsgate is exposed to movements in the gold price and foreign currency exchange rates, as well as other financial market risks. Kingsgate’s overall risk management program was to deliver into the out-of-the-money call options that it held, so that the Company would have full exposure to the spot gold price. In June 2007, the call options were fully delivered.

Regular reports are provided to the Board in the areas of financial exposures, health, safety and environmental matters.

Kingsgate also operates a company-wide risk management program which provides a systematic approach to assessing and addressing its risks and opportunities for improvement. This program complements and strengthens other existing risk management initiatives. It aims to improve the Company’s bottom line through reduced loss and better management of retained risk, and through reduced insurance premiums. Major proposals submitted to the Board for consideration must be accompanied by a comprehensive risk assessment and management’s proposed mitigation strategies.

External auditor
The Audit Committee policy is to appoint an external auditor who clearly demonstrates quality and independence. The performance of the external auditor is reviewed annually and applications for tender of external audit services are requested as deemed appropriate, taking into consideration assessment of performance, existing value and tender costs. PricewaterhouseCoopers was appointed as the external auditor in May 1989. It is PricewaterhouseCoopers’ policy to rotate audit engagement partners on listed companies at least every five years, and in accordance with that policy a new audit partner was engaged for the 2006/07 audit.

An analysis of fees paid to the external auditors, including a break-down of fees for non-audit services, is provided in the Directors’ Report. It is the policy of the external auditor to provide an annual declaration of their independence to the audit committee.

The external auditor is required to attend the annual general meeting and be available to answer shareholder questions about the conduct of the audit and the preparation and content of the audit report.

Social and environmental responsibility
Kingsgate is committed to meeting high standards of compliance with respect to its health, safety, environmental and community responsibilities as these are integral to the way in which the Group conducts its business.

Details are in the Sustainability section of the Annual Report.

Kingsgate is subject to significant environmental regulation with respect to its exploration and mining activities. Kingsgate is a signatory to the Australian Mineral Industry’s “Enduring Value” which is a Sustainable Development Framework through the implementation of a range of economic and social practices in addition to environmental practices.

The Company developed an effective Environmental Management Systems (EMS) which has ISO 14001 certification. Reviews of the Company’s environmental performance have included:

• External regulatory inspections at the operating site and exploration areas
• Internal area inspections at these operations, and
• An annual review of these sites by an external consultant

A Sustainability Report is issued by the Group on an annual basis covering the areas of health, safety, environmental and community responsibilities, which is now incorporated into the Annual Report.

Kingsgate Code of Conduct
Kingsgate has established a Code of Conduct which provides an ethical and legal framework for all employees in the conduct of Kingsgate’s business. The Code of Conduct defines how Kingsgate relates to its customers, employees, shareholders and the community in which it operates.

The underlying principles of the Code are the values of integrity, respect, trust and openness. The Code provides clear directions on conducting business internationally, interacting with governments, communities and business partners and general workplace behaviour. The Code provides a common behavioural framework for all employees in the context of a wide range of ethical and legal issues. Employees are encouraged to take responsibility for their actions, achieve high performance, deliver on commitments and earn the trust of those with whom they interact.