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ASX ANNOUNCEMENT


26 October 2015


Corporate Governance Statement 30 June 2015


The Board of Directors is committed to improving and achieving good standards of corporate governance and has established corporate government policies and procedures, where appropriate and practicable, consistent with the revised Corporate Governance Principles and Recommendations, Third Edition

issued by the ASX Corporate Governance Council ('ASX Recommendations'). To assist in the execution of its responsibilities the Board has established a Corporate Governance Committee consisting of two non‑executive directors, whose objective is to ensure appropriate ethical and corporate governance standards and practices for the Company.

The following statement sets out a summary of the Group's corporate governance practices that were in place during the financial year and how those practices, unless otherwise disclosed, relate to the revised ASX Recommendations. The Company has reported against the Principles and Recommendations for each of the financial years ended 30 June 2008 through to 30 June 2015.

These recommendations are not intended to be prescriptions to be followed by all ASX listed companies, but rather guidelines designed to produce an effective, quality and integrity outcome. The Corporate Governance Council has recognised that a 'one size fits all' approach to corporate governance is

not required. Instead, it states aspirations of good practice for optimising corporate performance and accountability in the interests of shareholders and the broader economy. A company may consider that a recommendation is inappropriate to its particular circumstances and has flexibility not to adopt it and explain why.

In ensuring a good standard of ethical behaviour and accountability, the Board has included in its corporate governance policies those matters contained in the ASX Recommendations where applicable. However, the Board also recognises that full adoption of the above ASX Recommendations may not be practical nor provide the optimal result given the particular circumstances and structure of the Company. The Board is, nevertheless, committed to ensuring that appropriate corporate governance practices are in place for the proper direction and management of the Company. This statement outlines the main corporate governance practices of the Company disclosed under the ASX Recommendations, including those that comply with good practice and which unless otherwise disclosed, were in place during the whole of the financial year ended 30 June 2015.



Flinders Mines Limited ABN 46 091 118 044

www.flindersmines.com

Level 1, 135 Fullarton Road Rose Park

South Australia 5067

PO Box 4031

Norwood South South Australia 5067

telephone 61 8 8132 7950

facsimile 61 8 8132 7999 email info@flindersmines.com

Principle 1: Lay solid foundations for management and oversight

Recommendation 1.1 - Recommendation followed

The Board is governed by the Corporations Act 2001, ASX Listing Rules and a formal constitution revised and approved by members of the Company in 2013.

The role of the Board is to provide leadership and direction to management and to agree with management the aims, strategies and policies of the Company for the protection and enhancement of long term shareholder value.

The Board takes responsibility for the overall corporate governance of the Company including its strategic direction, management goal setting and monitoring, internal control, risk management and financial reporting.

The Board has an established framework for the management of the entity including a system of internal control, a business risk management process and appropriate ethical standards. In fulfilling its responsibilities, the Board is supported by an Audit Committee to deal with internal control and financial reporting, a Risk Committee to deal with the control environment in the area of operational risk and a Corporate Governance Committee to deal with ethical standards and corporate governance practices.

The Board appoints a Managing Director responsible for the day to day management of the Company including management of financial, physical and human resources, development and implementation of risk management, internal control and regulatory compliance policies and procedures, recommending strategic direction and planning for the operations of the business and the provision of relevant information to the Board.

The Board has adopted a formal Board Charter that details its functions and responsibilities and a formal statement of the areas of authority delegated to senior executives.


Recommendation 1.2 - Recommendation followed

The Company considers the character, experience, education and skillset, as well as interests and associations of potential candidates for appointment to the Board and conducts appropriate checks to verify the suitability of the candidate, prior to their election.

The Company has appropriate procedures in place to ensure that material information in its possession relevant to a decision on whether or not to elect or re‑elect a director is disclosed in the notice of meeting provided to shareholders.


Recommendation 1.3 - Recommendation followed

The employment conditions of the Managing Director are formalised in a contract of employment. The Managing Director's contract may be terminated at any time by mutual agreement or by the Managing Director on three months' written notice and by the Company on six months' written notice.

The Company has written agreements, in the form of a letter of appointment, with each non‑executive director setting out the term of appointment, remuneration, roles and responsibilities.

Each member of the senior executive team signs a formal employment contract at the time of their appointment covering a range of matters including their duties, rights, responsibilities and any entitlements on termination. The standard contract refers to a specific formal job description. This job description is reviewed on an annual basis and where necessary, is revised in consultation with the relevant employee.


Recommendation 1.4 - Recommendation followed

The Company Secretary is accountable directly to the Board, through the chair, on all matters to do with the proper functioning of the Board.


Recommendation 1.5 - Recommendation followed

The Company has established and adopted a Diversity & Equal Opportunity Policy which establishes the Company's commitment to recognising the benefits of attracting and retaining a diverse range of people based on merit, qualifications, experience, skills, knowledge and potential regardless of gender, ethnicity, age or other status.

The Diversity & Equal Opportunity Policy sets out the responsibility of the Board and every Company employee to support diversity and equal opportunity, by developing policy, monitoring outcomes and setting and disclosing measurable objectives.

A copy of the Diversity & Equal Opportunity Policy can be found on the Company's website.


In accordance with the policy, the Board has set a number of measurable objectives for achieving diversity in the workplace. Responsibility for implementation of each objective has been assigned to the relevant Board committee or senior executive.


Diversity Objective

Status as at 30 June 2015

Establish responsibility at Board level and amend Nominations & Remuneration Committee Charter to incorporate diversity as one of its objectives.

The Nominations & Remuneration Committee Charter will be amended in the 2015 ‑ 16 financial year, to include diversity as one of its objectives.

Appoint a member of the executive group with responsibility for diversity and equal opportunity.

The Managing Director has been appointed by the Board with the responsibility for diversity.

Develop and distribute Equal Opportunity and Diversity Guidelines to the Flinders Mines workforce.

Guidelines, including a complaints and grievances process, have been developed and distributed to the entire workforce.

Publish the Diversity and Equal Opportunity Policy on the Company's website.

The policy is included in the Corporate section of the Company's website.

Conduct an annual review of the objectives and measure progress against them.

This is an ongoing commitment. The Company has continued to review and update measurable objectives to promote diversity during the 2015 reporting period.

Conduct workforce reviews and analysis to develop further measurable objectives in 2015 for achieving diversity.

Annual remuneration reviews are conducted to ensure no disparity or bias exists. Diversity Objectives were agreed in early FY 2015.

Update all Company policies to reflect the Company's commitment to diversity.

During the year, a comprehensive review of all Company policies was undertaken to ensure that all policies reflect the Company's values.

Develop Company‑wide diversity communication, training and induction procedures.

The Company's updated policies, including diversity policy and objectives, were communicated to all employees.

No cases of discrimination or harassment were reported during the period.

Appoint a diversity of Board members.

The Board remains committed to identifying suitably qualified persons, regardless of gender, for appointment to the Board should a vacancy occur.

Implement career and development planning as an integral part of employees' annual performance appraisal plan.

Development planning is included as part of the Company's performance appraisal process for all employees.

Flinders Mines encourages all employees to achieve their potential through the provision of career development opportunities, including;

  • Certified training;

  • Participation at conferences and seminars; and

  • Membership of professional societies and networks.

As at 30 June 2015, women represented 33.3% of the Company's total workforce. There were no female senior executives (Managing Director's direct reports) and no female directors on the Board. The Board remains committed to identifying suitably qualified people regardless of gender, should a vacancy occur and for consideration as part of the Board's succession planning, however, female applicants will be favourably viewed.


Recommendation 1.6 - Recommendation not followed

The Board recognises that as a result of the Company's size and the stage of the entity's life as a publicly listed junior exploration and development company, the assessment of the Board's overall performance, its committees and individual directors is conducted without a formal evaluation process. Whilst this is at variance with ASX Recommendation 1.6, the directors consider that at the date of this report an appropriate and adequate process for

the evaluation of directors is in place. A more structured process of Board assessment will be considered in the future as the Company develops.

An evaluation of the performance of the Board, its committees and individual directors was conducted during the year by the Chairman.

Recommendation 1.7 - Recommendation not followed

The Board recognises that as a result of the Company's size and the stage of the entity's life as a publicly listed junior exploration and development company, the assessment of the performance of its senior executives is conducted without a formal evaluation process. Whilst this is at variance with ASX Recommendation 1.7, the directors consider that at the date of this report an appropriate and adequate process for the evaluation of senior executives is in place. A more structured process of assessment will be considered in the future as the Company develops.

The Board considers the Company's present circumstances and goals ensure maximum shareholder benefits from the attraction and retention of a high quality Board and senior management team. The Board on a regular basis reviews the performance of and remuneration for executive directors and senior management including any equity participation by such executive directors and senior management. The Board evaluates the performance of the Managing Director and Company Secretary on a regular basis and encourages continuing professional development.

The Board has established a Nominations and Remuneration Committee, which takes responsibility for monitoring the composition of the Board and reviewing the performance and compensation of the Company's executive directors and senior management with the overall objective of motivating and appropriately rewarding performance.

No formal performance evaluation of senior management was undertaken during the reporting period.


Principle 2: Structure the Board to add value

Recommendation 2.1 - Recommendation not followed

A Nominations and Remuneration Committee has been established, consisting solely of independent directors and chaired by an independent director. The Committee has only two members, which is at variance with the ASX

Recommendations. Given the stage of life of the entity and the relative size of the Company and its Board, the Board does not believe that a larger Committee is warranted. The Board will consider enlarging the Committee as the Company continues to grow in future years.

A Nominations and Remuneration Committee has been established consisting of the following non‑executive directors:


  • R M Kennedy (Chair)


  • E J Vickery


    A formal Committee Charter has been adopted, that details the functions and responsibilities of the Committee. A copy of the charter can be found on the Company's website.

    Details of these directors' attendance at Nominations and Remuneration Committee meetings are set out in the Directors' Report.

    The main responsibilities of the Committee are to:


  • conduct an annual review of the membership of the Board having regard to present and future needs of the company and to make recommendations on Board composition and appointments;

  • conduct an annual review of and conclude on the independence of each director;


  • propose candidates for Board vacancies;


  • oversee the annual performance assessment program;


  • oversee Board succession including the succession of the chair; and


  • assess the effectiveness of the induction process.


Recommendation 2.2 - Recommendation not followed

The Board is committed to appointing a diverse range of qualified persons with the appropriate level of experience and skills, as and when vacancies on the Board may occur. The Company has not adopted a formal Board skills matrix.

The Board will consider the adoption of a formal document as the Company continues to grow in future years.

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