INDOCHINE MINING LIMITED ACN:141 677 385 Level 28, 108 St Georges Terrace
www.indochinemining.com Perth WA 6000
email: info@indochinemining.com P:08 9214 1444; F: 08 9214 1400
CORPORATE GOVERNANCE STATEMENT
The Board of Directors (the Board) of Indochine Mining Limited (Indochine or the Company) is responsible for protecting the rights and interests of shareholders through the implementation of sound strategies and action plans, and the development of an integrated framework of controls over the consolidated entity's resources, functions and assets. The Company's Corporate Governance practices, which are detailed, are reviewed and amended by the Board, at appropriate intervals (at least annually).
Commensurate with the spirit of third edition of Australian Stock Exchange (ASX) Corporate Governance Principles and Recommendations as amended 27 March 2014, the Board (consisting of Non-Executive Director Craig Dawson and Non-Executive Director Mr. Keith Murray) has considered each of the recommendations and followed it where it is considered to be appropriate for its Corporate Governance practices. Where the Company's Corporate Governance practices follow a recommendation, the Board has made appropriate statement reporting on the adoption of the recommendation. Where the Corporate Governance practices depart from a recommendation, the Board has offered full disclosure and reasons for the adoption of its own practice. The ASX Principles are not mandatory; however the Company is required to provide this statement disclosing the extent to which it has followed the recommendations contained in the ASX Principles and Recommendations. While Indochine attempts to adhere to the principles proposed by the ASX, it is mindful that there may be some instances where compliance is not practicable for a company of its size. However, all listed companies are required to produce a Corporate Governance Statement that discloses the extent to which the entity has followed the recommendations, and to identify any recommendations that have not been followed, the period during which it was not followed, the reasons for not doing so and any alternative governance practices that have been adopted in lieu of the recommendation.
The Company's Board has recently reviewed the recommendations, and approved the Company's Corporate Governance Statement as at 30 June 2015. In many cases the Company was already achieving the standard required. In other cases the Company has considered other arrangements to enable compliance. In a limited number of instances, the Company has determined not to meet the standard set out in the recommendations, largely due to the recommendation being considered by the Board to be unduly onerous for a company of Indochine's size. The Company's written policies on corporate governance matters are included in its Corporate Governance Manual as well as in the Investor section of the Company's website at www.indochinemining.com. The following section sets out the Company's position relative to each of the eight principles and recommendations contained in the ASX Corporate Governance Principles and Recommendations.
A listed entity should establish and disclose the respective roles and responsibilities of its board and management and how their performance is monitored and evaluated.
A listed entity should disclose: (a) the respective roles and responsibilities of its board and management; and (b) those matters expressly reserved to the board and those delegated to management.
The Company has established the functions reserved to the Board and has set out its roles and responsibilities in its Statement of Board and Management Functions, which is available on the Company's website at www.indochinemining.com under the section marked 'Corporate' - 'Corporate Governance'.
The Company has established and disclosed the respective roles and responsibilities of its Board and Management in its Corporate Governance Statement which is available on the Company's website www.indochinemining.com under section marked Corporate. The Board is responsible for promoting the success of the Company through its key functions, which are: ensuring the Company is properly managed; providing overall Corporate Governance of the Company; monitoring the financial performance of the Company; engaging appropriate management commensurate with the Company's structure and objectives; approving and monitoring the progress of major capital expenditure, capital management, and
acquisitions and divestitures; and reviewing, ratifying and monitoring systems of risk management and internal control, the Code of Conduct and legal compliance. The matters expressly delegated to Management are: being responsible for supporting the Board in implementing the running of the general operations and financial business of the Company, in accordance with the delegated authority of the Board; and being responsible for reporting all significant matters to the Chairman.
At the end of July 2014, the Company entered into discussions on strategic funding with a number of parties including discussions with the secured creditor to provide additional funding by way of extension of the existing facility to allow the Company to continue to operate. As a consequence of these discussions and a change in the strategic direction of the Company, directors Mr Hugh Thomas and Mr Robert Thomson and Chief Executive Officer (CEO) Mr Stephen Promnitz resigned and new directors Mr Dermott McVeigh (resigned 3 November 2015) and Mr Keith Murray were subsequently appointed to the board and the Company was relocated to Perth. On 27 March 2015, the board of directors placed the Company into voluntary administration.
As a result of the above changes, the Company is currently operating under a Deed of Company Arrangement (DOCA). The full implementation of the DOCA is subject to shareholder approval and recapitalisation after which the Company will be returned to the Board and adequate management structure and organisation capability will be put in place to comply with the DOCA recommendations as well as with other recommendations.
A listed entity should: (a) undertake appropriate checks before appointing a person, or 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.
The Company undertakes appropriate checks, and will do police checks before appointing a new Director or putting forward a Director to shareholders for election. These include checks as to the person's character, experience, education and bankruptcy history. The Company provides its shareholders with relevant information in its Notice of Meetings when Directors stand for election or re- election. Candidates for the Board are considered and selected by reference to a number of factors, which include, but are not limited to, their relevant experience and achievements, compatibility with other Board members, credibility within the Company's scope of activities, and intellectual and physical ability to undertake Board duties and responsibilities. Directors are initially appointed by the full Board, subject to election by shareholders at the following general meeting.
The Board recognises that Board renewal is critical to performance and the impact of Board tenure on succession planning. Each Director must not hold office (without re- election) past the third Annual General Meeting (AGM) of the Company following the Director's appointment, or three years following that Director's last election or appointment (whichever is the longer). However, a Director appointed to fill a casual vacancy or as an addition to the Board must not hold office (without re-election) past the next AGM of the Company. At each AGM a minimum of one Director, or a third of the total number of Directors, must resign. A Director who retires at an AGM is eligible for re-election at that meeting.
A listed entity should have a written agreement with each director and senior executive setting out the terms of their appointment.
The Company has written agreements with senior executives setting out the terms of their appointment, including clear understanding of their roles and responsibilities, and of the Company's expectations of them, and this is contained within their written agreements. These agreements take the form of Letters of Appointment.
Given the Company's current situation as explained under Departure in Recommendation 1.1, the Board has not implemented any written agreements with Directors. However, this will be implemented once the Company is out of Voluntary Administration.
Recommendation 1.4The company secretary of a listed entity should be accountable directly to the board, through the chair, on all matters to do with the proper functioning of the board.
The Company Secretary is accountable directly to the Board, through the Chairman, on all matters to do with the proper functioning of the Board. The Company Secretary plays an important role in supporting the effectiveness of the Board and its Committees. Each Director is able to communicate directly with the Company Secretary and vice versa. The decision to appoint or remove a Company Secretary is made by the Board.
Given the Company's current situation as explained under Departure in recommendation 1.1, the Company Secretary currently reports to the Deed Administrator as all powers of the board reside with the Administrator until the Company is out of Administration and returned to the Board.
A listed entity should: (a) have a diversity policy which includes requirements for the board or a relevant committee of the board to set measurable objectives for achieving gender diversity and to assess annually both the objectives and the entity's progress in achieving them; (b) disclose that policy or a summary of it; and (c) disclose as at the end of each reporting period the measurable objectives for achieving gender diversity set by the board or a relevant committee of the board in accordance with the entity's diversity policy and its progress towards achieving them, and either: (1) the respective proportions of men and women on the board, in senior executive positions and across the whole organisation (including how the entity has defined 'senior executives' for these purposes; or (2) if the entity is a 'relevant employer' under the Workplace Gender Equality Act, the entity's most recent 'Gender Equality Indicators', as defined in and published under that Act.
The Company has established a Diversity Policy, which includes requirements for the Board to set measurable objectives for achieving gender diversity, and to annually assess both the objectives and its progress in achieving them. The Company's Diversity Policy is available on the Company's website under section marked Corporate. At this time, given the size and composition of the Company's workforce, the Board has not formalised measurable objectives for achieving gender diversity. However it is committed to providing equal employment opportunity to enable a workplace based on gender diversity.
A listed entity should: (a) have and disclose a process for periodically evaluating the performance of the board, its committees and individual directors; and (b) disclose, in relation to each reporting period, whether a performance evaluation was undertaken in the reporting period in accordance with that process.
This recommendation has not been implemented due to the Company being in state of transition since August 2014. However, once the Company is out of Voluntary Administration and control returned to the Board, it is the intention of the Board to fully implement this recommendation.
A listed entity should: (a) have and disclose a process for periodically evaluating the performance of its senior executives; and (b) disclose, in relation to each reporting period, whether a performance evaluation was undertaken in the reporting period in accordance with that process.
This recommendation has not been implemented due to the Company being in a state of transition since August 2014. However, once the Company is out of Voluntary Administration and control returned to the Board, it is the intention of the Board to fully implement this recommendation.
A listed entity should have a board of an appropriate size, composition, skills and commitment to enable it to discharge its duties effectively.
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