FREEHILL MINING LIMITED-CORPORATE GOVERNANCE STATEMENT
The Board of Directors of Freehill Mining Limited (Freehill
Mining or 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.
In accordance with the ASX Corporate Governance Council's
Corporate Governance Principles and Recommendations:
3rd Edition (the Principles), the corporate
governance statement reports on the Company's adoption of the Principles
on an exception basis. This statement provides specific information
whereby disclosure is required of any recommendations that have not been
adopted by the Company, together with the reasons why they have not been
adopted. Freehill Mining's corporate governance principles and policies
are therefore structured with reference to the Principles, which are as
1: Lay solid
foundations for management and oversight.
2: Structure the
board to add value.
3: Act ethically
integrity in corporate reporting.
5: Make timely and
6: Respect the
rights of security holders.
7: Recognise and
fairly and responsibly.
This corporate governance statement is in respect of the 12 month period
ending 30 June 2017, and is current as at 6 October 2017.
Lay Solid Foundations for Management and Oversight
Recommendation 1.1: The Board and Senior Management - Roles
The Board is responsible for the overall corporate governance of the
The Board monitors the operational and financial position and performance
of the Company and oversees its business strategy, including approving
the strategic objectives, plans and budgets of the Company. The Board is
committed to protecting and optimising performance and building
sustainable value for Shareholders. In conducting business with these
objectives, the Board seeks to ensure that the Company is properly
managed to protect and enhance Shareholder interests, and that the
Company, and its Directors, officers and personnel operate in an
appropriate environment of corporate governance.
Accordingly, the Board has created a framework for managing the Company,
including adopting relevant internal controls, risk management processes
and corporate governance policies and practices that it believes are
appropriate for the Company's business and that are designed to promote
the responsible management and conduct of the Company.
The Board has adopted a written charter to provide a framework for the
effective operation of the Board, which sets out:
· the Board's composition;
· the Board's role and
· the relationship and
interaction between the Board and management; and
· the authority delegated by the
Board to management and Board committees.
The Board's role is to represent and serve the interests of Shareholders
by overseeing and appraising the Company's strategies, policies and
performance. This includes:
· overseeing the financial and
human resources the Company has in place to meet its objectives and
reviewing management performance;
· protect and optimise Company
performance and build sustainable value for Shareholders in accordance
with any duties and obligations imposed on the Board by law and the
Company's Constitution and within a framework of prudent and effective
controls that enable risk to be assessed and managed;
· set, review and ensure
compliance with the Company's values and governance framework (including
establishing and observing high ethical standards); and
· ensure Shareholders are kept
informed of the Company's performance and major developments affecting
its state of affairs.
The management function is conducted by, or under the supervision of, the
General Manager and Chief Operating Officer as directed by the Board (and
by other officers to whom the management function is properly delegated
by the Board). Management must supply the Board with information in a
form, timeframe and quality that will enable the Board to discharge its
duties effectively. Directors are entitled to request additional
information at any time when they consider it appropriate.
The Board collectively, and each Director individually, has the right to
seek independent professional advice, subject to the approval of the
Chairman or the Board as a whole.
The Board will consider nominations for the appointment or election of
Directors that may arise from time to time, having regard to the skills
and experience required by the Company and procedures outlined in the
Company's Constitution and the Corporations Act 2001 (Cth).
The Company undertakes appropriate checks before appointing a person, or
putting forward to shareholders a candidate for election, as a Director.
Candidates are assessed through interviews, meetings and background and
reference checks (which may be conducted both by external consultants and
by Directors) as appropriate.
The Company gives shareholders all material information in its possession
relevant to the decision on whether or not to elect (or re-elect) a
Director, either in the notice of the meeting at which the election of
the Director is to be held, or by including in the notice a clear
reference to the location on the Company's website, Annual Report or
other document lodged with ASX where the information can be found.
Recommendation 1.3: Terms of Appointment - Directors and
Each new Non-Executive Director will receive a letter formalising their
appointment and outlining the material terms of their appointment.
Executive officers will generally have written employment agreements with
the Company setting out their duties, obligations and remuneration.
The Board is responsible for determining and reviewing the remuneration
of the Directors, the Non-Executive Chairman and the executive officers
of the Company.
Recommendation 1.4: The Company Secretary
The Company Secretary is appointed by the Board and is responsible for
developing and maintaining the systems and processes that are appropriate
for the Board to fulfil its role. The Company Secretary is responsible to
the Board for ensuring compliance with Board procedures and governance
matters. 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 is also responsible for overseeing and
coordinating disclosure of information to the ASX as well as
communicating with the ASX.
Recommendation 1.5: Diversity
The Company has not adopted a formal diversity policy and therefore, has
not set measurable objectives for achieving gender diversity. The Board
is of the view that the size of the Company and the scale and nature of
its operations does not currently lend itself to an effective and
meaningful application of such a policy. However, the Board intends to
reconsider the adoption of a formal diversity policy periodically.
The table below sets out the respective proportions of men and women on
the Board, in senior executive positions and across the organisation as a
Women in the whole organisation
Men in the whole organisation
Women in senior executive positions
Men in senior executive positions
Women on the board
Men on the board
Recommendations 1.6 and 1.7: Performance Review and
The Board reviews and evaluates the performance of the Board and the
Board committees. The process is to involve the assessment of all of the
Board's key areas of responsibility. The Board's contribution as a
whole is reviewed and areas where improvement can be made are noted. The
performance evaluation process is as follows:
each Director will periodically evaluate the effectiveness of the Board
and its committees and submit observations to the Chairman;
Chairman of the Board will make a presentation incorporating his
assessment of such observations to enable the Board to assess, and if
necessary, take action;
Board will agree on development and actions required to improve
given the small size of the Company and the scale and nature of its
current level of operations, the Board has considered and believes that
the current mix of skills and diversity as outlined in the Directors'
Report is adequate. The Board will continue to monitor the mix of skills
and diversity it is looking to achieve periodically;
outcomes and actions will be minuted; and
the Chairman will assess during the year the progress of the actions to
This process aims to ensure that individual Directors and the Board as a
whole contribute effectively in achieving the duties and responsibilities
of the Board. The performance of the Board, individual Directors
and key executives has taken place during this reporting period in
accordance with the process set out above.
Structure the Board to Add Value
Recommendation 2.1: Nomination Committee
Due to the small size of the Board and the Company's current level of
operations, the Company does not have a separate nomination committee.
Recommendation 2.2: Skills, Knowledge and
Directors are appointed based on the specific business, corporate and
governance skills and experience required by the Company. The Board
recognises the need for Directors to have a relevant blend of skills and
personal experience in a range of disciplines required for the proper
management and oversight of the Company's operations, having regard to
the scale and nature of its activities.
The Board seeks to ensure that its membership includes an appropriate mix
of Directors with experience in the mining and resources sector, general
management, accounting and finance and corporate affairs.
Recommendations 2.3, 2.4 and 2.5: Independent Directors and
The Board considers a Director to be independent where he or she is
independent of management and is free of any business or other
relationship that could materially interfere with, or could reasonably be
perceived to interfere with the exercise of their unfettered and
independent judgement. The Board will consider the materiality of any
given relationship on a case-by-case basis.
The Company's Board Charter sets out guidelines to assist in considering
the independence of Directors and has adopted a definition of
independence that is based on that set out in the Principles.
At the date of this statement, the Board comprises of four Directors,
comprising the independent Non-Executive Chairman (Mr Stephen Chaplin),
one Executive Director and two independent Non-Executive Directors (Mr
Ray Mangion, and Mr Nick Kapes). The Board considers that Mr
Stephen Chaplin, Mr Ray Mangion, and Mr Nick Kapes are free from any
business or any other relationship that could materially interfere with
the independent exercise of their judgement and are able to fulfil the
role of an independent Director.
Mr Stephen Chaplin has been a Board member since 3 August 2015, Mr Ray
Mangion has been a Board member since 24 March 2015, and Mr Nick Kapes
has been a Board member since 14 April 2015.
The Board regularly reviews the independence of each Non-Executive
Recommendation 2.6: Induction of New Directors
The Company has a programme for inducting new Directors. This includes
giving new Directors a full briefing about the nature of the business,
current issues, the corporate strategy and the expectations of the Board
concerning the performance of Directors and access to all employees to
gain full background on the Company's operations. Directors are
encouraged to attend director training and professional development
courses, as may be required to enable them to develop and maintain the
skills and knowledge needed to effectively perform their roles as
Directors, at the Company's expense (as approved by the Chairman and or
the Board, as appropriate and applicable).
Act Ethically and Responsibly
Recommendation 3.1: Code of Conduct
The Board recognises the need to observe the highest standards of ethics,
integrity and behaviour. Accordingly, the Board has adopted a formal Code
of Conduct that outlines how the Company expects its employees and
Directors to behave during the course of their employment in dealing with
employees, suppliers and customers of the business. The key aspects of
this Code are to:
· comply with all Company
policies, procedures, rules and regulations;
· be honest and fair in dealings
with customers, clients, co-workers, Company management and the general
· protect from unauthorised use
any information, records or other materials acquired during the course of
employment with the Company; and
· respect the Company's
ownership of assets and property.
Safeguard Integrity in Financial Reporting
Recommendation 4.1: The Board should establish an Audit
The Board has established an Audit and Risk Committee. Under the Board
Charter, this committee must consist of a minimum of three members of the
Board and a majority of independent Directors.
The Audit and Risk Committee will comprise:
· Stephen Chaplin as Chairman;
· Paul Davies;
· Mr Ray Mangion; and
· Mr Joe Fekete.
Recommendation 4.1 recommends that the audit committee should be chaired
by an independent director who is not the chair of the board.
Due to the small composition of the Board, Mr Stephen Chaplin who is the
Chairman of the Board also serves as the Chairman of the Audit and Risk
Committee. Therefore, the composition of the Audit and Risk
Committee does not currently comply with Recommendation 4.1.
The Board intends to regularly review composition of the Audit and Risk
The Audit and Risk Committee's responsibilities include:
· overseeing the Company's
relationship with the external auditor and the external audit function
· overseeing the Company's
relationship with the internal auditor and the internal audit function
· overseeing the preparation of
the financial statements and reports;
· overseeing the Company's
financial controls and systems; and
· managing the process of
identification and management of risk.
Non-committee members, including members of management and the external
auditor, may attend all or part of a meeting of the committee at the
invitation of the committee chair.
Recommendation 4.2: Approval of Financial
Mr Paul Davies as the Company's Chief Financial Officer, has declared to
the Board that the in his opinion, the financial records of the Company
have been properly maintained, that the financial statements comply with
the Australian Accounting Standards and give a true and fair view of the
financial position and performance of the Company. The declaration also
confirms that their opinion has been formed on the basis of a sound
system of risk management and internal control.
Mr Paul Davies has also declared to the Board that the Company's risk
management, internal compliance and control system is operating
efficiently and effectively in all material respects.
Recommendation 4.3: Auditor Attendance at AGM
The Company's external Auditor attends the Company's AGMs and is
available to answer shareholder questions about the conduct of the audit
and the preparation and content of the Auditor's Report.
Make Timely and Balanced Disclosure
Recommendation 5.1: Companies should establish written
policies designed to ensure compliance with ASX Listing Rule disclosure
requirements and to ensure accountability at a senior executive level for
that compliance and disclose those policies or a summary of those
The Company is aware of its obligation to keep the market fully informed
of any information the Company becomes aware of concerning the Company,
which may have a material effect on the price or value of the Company's
securities, subject to certain exceptions.
The Company has adopted a Continuous Disclosure Policy to take effect
from listing that establishes procedures aimed at ensuring the Company
fulfils its obligations in relation to the timely disclosure of material
The Company also aims to communicate all important information relating
to the Company to its Shareholders. Additionally, the Company recognises
that potential investors and other interested stakeholders may wish to
obtain information about the Company from time to time. To achieve this,
the Company will communicate information regularly to Shareholders and
other stakeholders through a range of forums and publications, including
the Company website, at the annual general meeting, and through the
Company's annual report and ASX announcements.
Respect the Rights of Security Holders
Recommendation 6.1: Communication to Shareholders and
The Company aims to communicate all important information relating to the
Company to its Shareholders. Additionally, the Company recognises that
potential investors and other interested stakeholders may wish to obtain
information about the Company from time to time. To achieve this, the
Company communicates information regularly to Shareholders and other
stakeholders through a range of forums and publications, including the
Company's website, at the annual general meeting, through the annual
report and ASX announcements.
Recommendation 6.2: Investor Relations Program
Traditionally, the key forum for two-way communication between the
Company and its shareholders is its AGM. The Board encourages shareholder
participation at the Company's AGM and other general meetings of
shareholders and the Chairman encourages questions and comments from
shareholders and seeks to ensure that shareholders are given ample
opportunity to participate. Shareholders who are unable to attend the AGM
or a general meeting may submit questions and comments before the meeting
to the Company and/or to the Auditor (in the case of the AGM).
Recommendation 6.3: Shareholder participation at General
The Company commits to promote communication with shareholders to
encourage the Shareholders to participate at General Meetings via
different forums (through its website, ASX Announcements and direct
communication or through the Registry).
Recommendation 6.4: Electronic Communication
Shareholders may elect to receive Annual Reports electronically.
Shareholders may send communications to and receive communications from
the Company and its Share Registry electronically. The contact email
address for the Company is firstname.lastname@example.org and Shareholders may
submit electronic queries to the Company's Share Registry via its website
Recognise and Manage Risk
Recommendation 7.1: Risk Committee
The Audit and Risk Committee oversees the risk management of the Company.
The Board has procedures in place to recognise and manage risk in
accordance with Recommendation 7.1. Monthly reporting of financial
performance is in place as are policies to manage credit, foreign
exchange and other business risks.
The Company is committed to the proper identification and management of
risk. Freehill Mining regularly conducts technical meetings that are
attended by directors and executive officers. Freehill Mining also
regularly undertakes reviews of its risk management procedures which
include implementation of a system of internal sign-offs to ensure not
only that Freehill Mining complies with its legal obligations, but that
the Board and ultimately shareholders can take comfort that an
appropriate system of checks and balances is in place regarding those
areas of the business which present financial or operating risks.
Details of the composition and charter of the Audit and Risk Committee
are set out in section 4 above.
The Code of Conduct sets out the Company's commitment to maintaining the
highest level of integrity and ethical standards in all business
Recommendation 7.2: Risk Management Framework
The Company's management is responsible for providing leadership and
direction, for establishing a context which fosters a risk management
culture and for ensuring business, financial and risk management
approaches are integrated during the planning, implementation and
reporting of major ventures at all levels within the organisation.
At the Company's board meetings and technical meetings, the Company
regularly undertakes reviews of its risk management procedures, which
include implementation of a system of internal approvals to ensure not
only that it complies with its legal obligations, but that the Board and
shareholders can take comfort that an appropriate system of checks and
balances is in place in those areas of the business that present
financial or operating risks. As part of this risk management
process, the Company's management has reported to the Board in relation
to its management of the Company's material business risks.
Recommendation 7.3: Internal Audit Function
The Company does not have an independent internal audit function. Due to
the nature and size of the Company's operations, the expense of an
independent internal auditor is not considered to be appropriate.
The Board performs all key elements of an internal audit function,
· Evaluating, seeking and
obtaining reasonable assurance that risk management, control, and
governance systems are functioning as intended and will enable the
Company's objectives and goals to be met;
· evaluating information
security and associated risk exposures;
· evaluating regulatory
compliance programmes with consultation from external legal counsel; and
· evaluating the Company's
preparedness in case of business interruption.
Recommendation 7.4: Exposure to Risks
The Company regularly undertakes reviews of risks that may be material to
its business. The review examines the processes and procedures that are
in place to continually manage existing risks and identifies new risks
that have or may arise including the processes and procedures that the
Company must initiate to control and/or mitigate these risks from
impacting upon the performance of the Company.
The Company recognises, in particular, the environmental and social risks
to which it may be exposed. The Company considers environmental risk to
be the ability to continue its undertakings without compromising the
health of the ecosystems in which it operates. The Company views social
sustainability as the ability to continue operations in a manner that is
acceptable to social norms. The Board intends to manage all environmental
risks in accordance with the Company's Risk Management Policy and
Environmental Policy, and all social risks in accordance with the
Company's Risk Management Policy and its Community Engagement Plan, where
such risks are identified.
Remunerate Fairly and Responsibly
Recommendation 8.1: Remuneration Committee
Due to the small size of the Board and the Company's current level of
operations, the Company has not established a Remuneration Committee as a
subcommittee of the Board.
The Board is responsible for determining and reviewing the remuneration
of the Directors, the Executive Chairman and the executive officers of
the Company and reviewing the operation of the Company's Employee
Incentive Plan. This process requires consideration of the levels and
form of remuneration appropriate to securing, motivating and retaining
executives with the skills to manage the Company's operations. In
making decisions regarding the appointment of Directors, the Board as a
whole periodically assesses that an appropriate mix of skills and
experience is represented on the Board.
It is the Company's objective to provide maximum shareholder benefit from
the retention of high quality Board members having regard to the
Company's level of operations and financial resources. Directors are
remunerated with reference to market rates for comparable positions.
Remuneration policies for each Non-Executive Director are disclosed in
the Directors' Report that is set out in the Annual Report.
The Board may obtain information from, and consult with management and
external advisers, as it considers appropriate.
Recommendation 8.2: Remuneration of Executive and
The remuneration structure of Non-Executive Directors and executives is
disclosed in the Directors' Report within the Annual Report. The
remuneration of executives is dependent on the terms of the service
agreement with those executives. The remuneration structure of
Non-Executive Directors and executives is clearly distinguishable.
Recommendation 8.3: Equity Based Remuneration
The Company has adopted an Employee Equity Incentive Plan (Plan)
in order to assist in the motivation and retention of selected employees
of the Company. The Plan is designed to align the interests of eligible
employees with those of the Company by providing an opportunity for
eligible employees to receive an equity interest in the Company as an
award. Under the Plan, eligible employees may be offered performance
rights, options, deferred share awards or exempt share awards which may
be subject to vesting conditions set by the Board.
The Company has adopted a Securities Trading Policy that is intended to
explain the types of conduct in relation to dealings in securities that
are prohibited by law and establish procedures for the buying and selling
of securities that protect the Company, Directors and employees against
the misuse of unpublished information, which could materially affect the
price or value of the Company's securities.
The Policy provides that Directors, employees and their connected persons
· deal in the Company's
securities when they are aware of 'inside' information;
· deal in the Company's
securities on a short-term trading basis (except in exceptional
circumstances with approval); and
· hedge unvested equity
remuneration or vested equity subject to holding locks.
In addition, Directors, certain restricted employees and their connected
persons must not deal in the Company's securities during any of the
following blackout periods (except in exceptional circumstances with
· 7 days immediately before
release of the Company's quarterly report, half year results, full year
results and one day immediately following such release;
· 7 days immediately before the
Company's Annual General Meeting and one day following such Annual
General Meeting; and
· any other period that the
Board specifies from time to time.
Directors and certain employees must receive prior approval for any
proposed dealing in the Company's securities (including any proposed
dealing by one of their connected persons) within these periods, and in
all instances, buying or selling securities is not permitted at any time
by any person who possesses 'inside' information.