ARIKA RESOURCES LIMITED — Governance Information 2015

Jul 26, 2015

==> picture [310 x 65] intentionally omitted <==

Formerly PLD Corporation Limited ABN 92 086 839 992

6
Outram
Street West
Perth
WA
6005 Ph:
+
61
8
9324
1053 Fax:
+61
8
9324
3366 Web:
www.metalicity.com.au

24 July 2015

Corporate Governance Statement

The Board of Metaliciy Limited is pleased to attach the Corporate Governance Statement as at 24 July 2015.

• Ends -

Page
|
1

SCHEDULE 1 – DEPARTURES FROM CORPORATE GOVERNANCE PRINCIPLES AND RECOMMENDATIONS

PRINCIPLES AND RECOMMENDATIONS	COMPLY (YES/NO)	EXPLANATION
Principle 1: Lay solid foundations for management and oversight
Recommendation 1.1 A listed entity should have and disclose a charter which sets out the respective roles and responsibilities of the board, the chair and management; and includes a description of those matters expressly reserved to the board and those delegated to management.	Y	Refer to the Board Charter
Recommendation 1.2 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 relevant to a decision on whether or not to elect or re-elect a director.	Y	The Board's policy and procedure for the selection, nomination and appointment of new directors and the re-election of incumbent directors is as follows: • The Board, through the Remuneration Committee, oversees the appointment and induction process for directors and the selection, appointment and succession planning process of the Company's Chief Executive Officer. When a vacancy exists or there is need for particular skills, the Board determines the selection criteria based on the skills deemed necessary. • The Board identifies potential candidates with advice from an external consultant. Those nominated are assessed by the Board against background, experience, professional skills, personal qualities, whether the

224

3515-02/1322078_4

		nominee's skills and experience will augment the existing Board, and their availability to commit themselves to the Board's activities. The Board then appoints the most suitable candidate. Board candidates must stand for election at the next general meeting of shareholders.
Recommendation 1.3 A listed entity should have a written agreement with each director and senior executive setting out the terms of their appointment.	Y	A written appointment letter with each Director outlines personal obligations and responsibilities as a Director, and provides them with other information to assist them fulfil the role of Director properly. The Company enters into a formal employment agreement with each executive director in relation to their appointment. Contracts of employment are entered into with all senior executives.
Recommendation 1.4 The 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.	Y	The Company Secretary's role is to support the effectiveness of the Board and its committees. The Company Secretary's role includes, but is not limited to: • advising the Board and its Committees on governance matters; • monitoring the Board and Committee's policies and procedures are followed; • coordinating the timely completion and despatch of Board and Committee papers;

225

3515-02/1322078_4

==> picture [256 x 280] intentionally omitted <==

• ensuring that the business at Board and Committee meetings is accurately captured in the minutes; and

• helping to organise and facilitate the induction of Directors.

Each Director of the
Company is able to
communicate directly with
the Company Secretary and
vice versa. More information
in the Board Charter.
Company Secretary
Engagement Letter confirms
reporting lines to the
Chairman and the Board of
Directors.
N The Company will be
required to report against
gender diversity for
executive management and
Board of Directors within the
Annual Report.

		• ensuring that the business at Board and Committee meetings is accurately captured in the minutes; and • helping to organise and facilitate the induction of Directors. Each Director of the Company is able to communicate directly with the Company Secretary and vice versa. More information in the Board Charter. Company Secretary Engagement Letter confirms reporting lines to the Chairman and the Board of Directors.	• ensuring that the business at Board and Committee meetings is accurately captured in the minutes; and • helping to organise and facilitate the induction of Directors. Each Director of the Company is able to communicate directly with the Company Secretary and vice versa. More information in the Board Charter. Company Secretary Engagement Letter confirms reporting lines to the Chairman and the Board of Directors.
Recommendation 1.5 A listed entity should: (a) have a diversity policy which includes requirements for the board: (i) to set measurable objectives for achieving gender diversity; and (ii) to assess annually both the objectives and the entity’s progress in achieving them; (b) disclose that policy or a summary or it; and (c) disclose as at the end of each reporting period: (i) the measurable objectives for achieving gender diversity set by the board in accordance with the entity’s diversity policy and its progress towards achieving them; and (ii) either: (A) 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	N		The Company will be required to report against gender diversity for executive management and Board of Directors within the Annual Report.

226

3515-02/1322078_4

executive” for these purposes); or (B) the entity’s “Gender Equality Indicators”, as defined in the Workplace Gender Equality Act 2012.
Recommendation 1.6 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.	N	A review of the Board’s Performance will be undertaken during the 2016 Financial Year in accordance with the AICD Self-Assessment best practice guidelines.
Recommendation 1.7 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.		An annual review process is undertaken when consideration is given to any reward under the short term incentive arrangements. The review process is completed by September each year.
Principle 2: Structure the board to add value
Recommendation 2.1 The board of a listed entity should: (a) have a nomination committee which: (i) has at least three members, a majority of whom are independent directors; and (ii) is chaired by an independent director, and disclose: (i) the charter of the committee; (ii) the members of the committee; and (iii) as at the end of each	N	The Company does not currently have a separate Nomination Committee. The Board has decided that no efficiencies will be achieved by establishing a separate Nomination Committee. The Nomination and Remuneration Committee carries out the duties that would otherwise be undertaken by the Nomination Committee, with assistance from the independent directors, the latter assisting with the review of the Board's size and composition, its

227

3515-02/1322078_4

reporting period, the number
of times the committee met
throughout the period and the
individual attendances of the
members at those meetings; or

(b)if it does not have a nomination
committee, disclose that fact and the
processes it employs to address board
succession issues and to ensure that the
board has the appropriate balance of
skills, experience, independence and
knowledge of the entity to enable it to
discharge its duties and responsibilities
effectively.

committees and committee
charters and to evaluate
Board candidates and
recommend to the Board
individuals for Board
appointment/shareholder
election.

Each Director is requested to
participate in the
nomination process having
in mind the range of skills,
experience and expertise
required for the effective
functioning of the Board in
discharging its
responsibilities.

Recommendation 2.2

N A Board Skills Matrix will be
prepared during the 2016
Financial Year and
incorporated within the
Appendix 4G Corporate
Governance Statement
Disclosures lodged at the
time of the Annual Report.
Y Induction set out in written
engagement letter and
availability of Company
Secretary to assist with the
process for new Directors to
familiarise themselves with
the Company. Professional
Development requirements
are addressed at the time of
Chairman reviews or as
circumstances require.

A listed entity should have and disclose a board
skill matrix setting out the mix of skills and
diversity that the board currently has or is
looking to achieve in its membership.

diversity that the board currently has or is looking to achieve in its membership.	diversity that the board currently has or is looking to achieve in its membership.		Appendix 4G Corporate Governance Statement Disclosures lodged at the time of the Annual Report.
Recommendation 2.3		Y	Induction set out in written
A listed	entity should disclose:		engagement letter and availability of Company
(a)	the names of the directors considered		Secretary to assist with the
	by the board to be independent		process for new Directors to
	directors;		familiarise themselves with
(b)	if a director has an interest, position, association or relationship of the type described in Box 2.3 of the ASX		the Company. Professional Development requirements are addressed at the time of Chairman reviews or as
	Corporate Governance Principles and Recommendation (3rd Edition), but the		circumstances require.
	board is of the opinion that it does not		New Directors are also
	compromise the independence of the		provided the opportunity to
	director, the nature of the interest,		visit the Company's
	position, association or relationship in		operations and meet with
	question and an explanation of why		senior employees.
	the board is of that opinion; and		A Board Skills Matrix will be
(c)	the length of service of each director		prepared during the 2016
			Financial Year and
			incorporated within the
			Appendix 4G Corporate
			Governance Statement
			Disclosures lodged at the
			time of the Annual Report.
Recommendation 2.4		Y	The Board has reviewed the
A majority of the board of a listed entity should			position and associations of

228

3515-02/1322078_4

be independent directors.		each of the four directors in office and has determined that three of the four directors are independent. In making this determination the Board has had regard to the independence criteria in ASX Principle 2 and other facts, information and circumstances that the Board considers relevant. The Board assesses the independence of new directors upon appointment and reviews their independence, and the independence of the other directors, as appropriate. The Board strives to ensure that it is comprised of directors with a blend of skills, experience and attributes appropriate to the Company and its business. The principle criterion for the appointment of new directors is their ability to add value to the Company and its business.
Recommendation 2.5 The chair of the board of a listed entity should be an independent director and, in particular, should not be the same person as the CEO of the entity.	Y	Chairman is independent non-executive director.
Recommendation 2.6 A listed entity should have a program for inducting new directors and providing appropriate professional development opportunities for continuing directors to develop and maintain the skills and knowledge needed to perform their role as a director effectively.	Y	Induction set out in written engagement letter and availability of Company Secretary to assist with the process for new Directors to familiarise themselves with the Company. Professional Development requirements are addressed at the time of Chairman reviews or as circumstances require. New Directors are also provided the opportunity to visit the Company's operations and meet with senior employees.

229

3515-02/1322078_4

Principle 3: Act ethically and responsibly	Principle 3: Act ethically and responsibly
Recommendation 3.1 A listed entity should: (a) have a code of conduct for its directors, senior executives and employees; and (b) disclose that code or a summary of it.	N	The Company is in the process of preparing updated Policies including Code of Conduct during FY2016.
Principle 4_: Safeguard integrity in financial reporting_
Recommendation 4.1 The board of a listed entity should: (a) have an audit committee which: (i) has at least three members, all of whom are non-executive directors and a majority of whom are independent directors; and (ii) is chaired by an independent director, who is not the chair of the board, and disclose: (i) the charter of the committee; (ii) the relevant qualifications and experience of the members of the committee; and (iii) in relation to each reporting period, the number of times the committee met throughout the period and the individual attendances of the members at those meetings; or (b) if it does not have an audit committee, disclose that fact and the processes it employs that independently verify and safeguard the integrity of its financial reporting, including the processes for the appointment and removal of the external auditor and the rotation of the audit engagement partner.	Y Y N Y	The Board has an established Audit and Risk Committee. The Audit and Risk Committee established by the Board has three independent, non-executive Directors and is chaired by an independent director, who is not the chair of the Board. The Company is in the process of preparing updated Policies including Committee Charters during FY2016. Relevant qualifications and experience and attendance will be reported within the 2016 Annual Report.
Recommendation 4.2 The board of a listed entity should, before it approves the entity’s financial statements for a financial period, receive from its CEO and CFO a declaration that the financial records of the	Y	The Chief Executive Officer and Chief Financial Officer confirm in writing that the declaration provided in accordance with section

230

3515-02/1322078_4

entity have been properly maintained and that the financial statements comply with the appropriate accounting standards and give a true and fair view of the financial position and performance of the entity and that the opinion has been formed on the basis of a sound system of risk management and internal control which is operating effectively.		295A of the Corporations Act 2001, that, in their opinion, the financial records of the Company for a financial year have been properly maintained in accordance with the Act and that the financial statements and the notes for the financial year comply with the accounting standards and give a true and fair view of the financial position and performance of the Company. The declaration is given before the Directors approve the financial statements for the financial year.
Recommendation 4.3 A listed entity that has an AGM should ensure that its external auditor attends its AGM and is available to answer questions from security holders relevant to the audit.	Y	The Company ensures the external auditor's lead engagement partner attends the Annual General Meeting to answer questions concerning the conduct of the audit, the preparation and content of the auditor's report, accounting policies adopted by the Company and the independence of the auditor in relation to the conduct of the audit.
Principle 5: Make timely and balanced disclosure
Recommendation 5.1 A listed entity should: (a) have a written policy for complying with its continuous disclosure obligations under the Listing Rules; and (b) disclose that policy or a summary of it.	Y	To ensure the Company complies promptly with its continuous disclosure obligations, the Board has established a written policy on information disclosure and relevant procedures for reporting any information which a reasonable person would expect may have a material impact upon the price or value of the Company's shares or which when issued would prevent the emergence of a false market in the Company's shares. The focus of these procedures is on continuous disclosure compliance and improving access to

231

3515-02/1322078_4

		information for investors by notifying the ASX, posting releases on the Company website, and issuing media releases.
Principle 6:Respect the rights of security holders
Recommendation 6.1 A listed entity should provide information about itself and its governance to investors via its website.	Y	Corporate Governance Policies are disclosed on the Company’s website.
Recommendation 6.2 A listed entity should design and implement an investor relations program to facilitate effective two-way communication with investors.	N	The Company is in the process of preparing updated Policies including Shareholder Communications Policies during FY2016.
Recommendation 6.3 A listed entity should disclose the policies and processes it has in place to facilitate and encourage participation at meetings of security holders.	Y	The Board encourages full participation of shareholders at the Annual General Meeting, to ensure a high level accountability and identification with the Company's strategy and goals. Important issues are presented to the security holders as single resolutions.
Recommendation 6.4 A listed entity should give security holders the option to receive communications from, and send communications to, the entity and its security registry electronically.	Y	Shareholders are able to make contact with and receive communications from both the Share Registry and the Company electronically.
Principle 7: Recognise and manage risk
Recommendation 7.1 The board of a listed entity should: (a) have a committee or committees to oversee risk, each of which: (i) has at least three members, a majority of whom are independent directors; and (ii) is chaired by an independent director, and disclose: (i) the charter of the committee; (ii) the members of the	N	The full Board has responsibility for oversight of risks and the Board aims to manage these risks by carefully planning its activities and implementing risk control measures. Some of the risks are, however, highly unpredictable and the extent to which they can effectively manage them is limited. Risks are identified and addressed at monthly Board meetings and as the

232

3515-02/1322078_4

==> picture [474 x 741] intentionally omitted <==

----- Start of picture text -----

committee; and company grows a wider risk
management framework will
(iii) as at the end of each
be employed across the
reporting period, the number
company and its
of times the committee met
contractors.
throughout the period and the
individual attendances of the
members at those meetings; or
(b) if it does not have a risk committee or
committees that satisfy (a) above,
disclose that fact and the process it
employs for overseeing the entity’s risk
management framework.
Risks are identified and
Recommendation 7.2 Y
addressed at monthly Board
The board or a committee of the board should: meetings and as the
company grows a wider risk
(a) review the entity’s risk management
management framework will
framework with management at least
be employed across the
annually to satisfy itself that it continues company and its
to be sound, to determine whether
contractors.
there have been any changes in the
material business risks the entity faces
and to ensure that they remain within
the risk appetite set by the board; and
(b) disclose in relation to each reporting
period, whether such a review has
taken place.
Recommendation 7.3 N The company does not
engage an internal audit
A listed entity should disclose:
function and is reliant upon
(a) if it has an internal audit function, how the CEO and CFO
the function is structured and what role Corporations Declarations
it performs; or and Annual Audit Program
for accuracy of financial
(b) if it does not have an internal audit
information. As the
function, that fact and the processes it
company grows the Audit
employs for evaluating and continually Committee will review
improving the effectiveness of its risk
consideration of a separate
management and internal control internal audit function.
processes.
Recommendation 7.4 Y Regard and management
of economic, environmental
A listed entity should disclose whether, and if so
and social sustainability risks
how, it has regard to economic, environmental
are included with the Annual
and social sustainability risks and, if it does, how
Report and within the
it manages or intends to manage those risks.
Information Memorandum
dated June 2015.
Principle 8: Remunerate fairly and responsibly
Recommendation 8.1 Y The Board has an
established Remuneration
The board of a listed entity should:
----- End of picture text -----

233

3515-02/1322078_4

(a) have a remuneration committee which: (i) has at least three members, a majority of whom are independent directors; and (ii) is chaired by an independent director, and disclose: (i) the charter of the committee; (ii) the members of the committee; and (iii) as at the end of each reporting period, the number of times the committee met throughout the period and the individual attendances of the members at those meetings; or (b) if it does not have a remuneration committee, disclose that fact and the processes it employs for setting the level and composition of remuneration for directors and senior executives and ensuring that such remuneration is appropriate and not excessive.		Committee. It is proposed that the Remuneration Committee will adopt a formal charter and disclose this on the Company website. Information relating to the Directors of the committee, their skills, experience, expertise and the number of times the committee met throughout the period is contained in the Directors' Report section of the Annual Report. The Remuneration Committee has regard for comparable peer market remuneration information when setting the levels of director and senior executive remuneration to ensure not excessive. Shareholders have an annual opportunity to cast a non-binding vote on the Remuneration Report of the Company.
Recommendation 8.2 A listed entity should separately disclose its policies and practices regarding the remuneration of non-executive directors and the remuneration of executive directors and other senior executives and ensure that the different roles and responsibilities of non- executive directors compared to executive directors and other senior executives are reflected in the level and composition of their remuneration.	Y	The information provided in the Remuneration Report is audited as required by section 308(3C) of the Corporations Act 2001. A separate Performance Evaluation Practices Policy exists.
Recommendation 8.3 A listed entity which has an equity-based remuneration scheme should: (a) have a policy on whether participants are permitted to enter into transactions (whether through the use of derivatives or otherwise) which limit the economic risk of participating in the scheme; and (b) disclose that policy or a summary of it.	Y	Participants in the equity based remuneration scheme (Employee Share Option Plan) are prohibited from entering into any scheme or arrangement under which they hedge or alter the economic benefit that they may derive in respect of their equity based remuneration options.

234

3515-02/1322078_4