TIMAH RESOURCES LIMITED — Governance Information 2015

Sep 15, 2015

Timah Resources Ltd (ACN 123 981 537) (Company)

Corporate Governance Statement

This Corporate Governance Statement sets out the Company’s current compliance, as at the date of its listing on the official list of ASX on 16 September 2015, with the ASX Corporate Governance Council’s 3[rd] edition Corporate Governance Principles and Recommendations ( Recommendations ).

	Recommendations	Compliance	Comment
1.	Lay solid foundations for management and oversight
1.1	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.	Complies	The role of the Board is defined in the Constitution of Company as well as the Board Charter.
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 in its possession relevant to a decision on whether or not to elect or re-elect a director.	Complies	The Company has conducted criminal/police checks and solvency checks in respect of all of its directors. The Company has also provided details of each director’s professional experience in the Prospectus. Further, under the Company's Remuneration and Nomination Charter:  the Board must ensure that a candidate for directorship has the appropriate range of skills, experience and expertise that will best complement Board effectiveness and the Company's business;  the Board must ensure appropriate checks are undertaken prior to appointment of any new director; and  in the case of a candidate standing for election or re-election as a director, the candidate must disclose details of any interest, position, association or relationship that might influence, or reasonably be perceived to influence, in a material respect his or her capacity to bring an independent judgment to bear on issues before the Board and to act in the best interests of the Company and its security holders. The election of the Company’s directors was approved by the shareholders of the Company on 17 March 2015.
1.3	A listed entity should have a written agreement with each director and senior executive setting out the terms of their appointment.	Does not comply	The Company has a written agreement with Cash Nexus (M) Sdn Bhd, its controlling shareholder, to supply the services of Dato’ Seri Mah King Thian as executive chairman of the Company, Dato’ Seri Mah King Seng as managing director of the Company,SoongSwee Koon as chief operatingofficer of the

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	Recommendations	Compliance	Comment
			Company and Mr Wong Kah Lih as group accountant of the Company. The individuals are bound by the terms of their agreements with Cash Nexus. The Company does not consider that the non-executive directors, Mr Jack Tian Hock Tan, Lee Chong Hoe and Michelle Siew Yee Lee, require written agreements with the Company at this stage. Each director has signed a deed of access and indemnity with the Company.
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.	Complies	The Company has engaged Andrew Wallis to provide corporate secretarial services. The responsibilities of the company secretary are outlined in the Board Charter, including the accountability that the company secretary has to the Board (through the Chair) on all matters to do with the proper functioning of the Board.
1.5	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: (i) 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 executive" for these purposes); or (ii) 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.	Will comply	Recognising the increased role played by women and minorities in the workforce, the Company has also adopted a Diversity Policy which is managed by the Remuneration and Nomination Committee. Key to this policy is the establishment of measurable gender diversity objectives, against which the Board will report progress annually. However, given the policy has only recently been adopted, the Company has not yet taken steps towards implementing the policy. This policy is available on the Company's website.
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	Complies	Under the Board Charter, performance of the Board and of individual directors is to be assessed each year. The Company has a formal process for evaluating the effectiveness, process and structure of the Board, its committees and individual directors. The Board is committed to regular assessment of its effectiveness and believes that the contribution of individual directorsis essentialtoimprove the governance and guidance ofthe

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	Recommendations	Compliance	Comment
	performance evaluation was undertaken in the reporting period in accordance with that process.		Company. The review of the Board and its directors is focused on matters such as the structure, effectiveness and contributions made by each director and the progress towards the strategic objectives of the Company. The Chairman is responsible for conducting the annual review of the Board’s performance which involves open and constructive dialogue between respective parties. As the appointment of the directors took effect upon ASX listing, no performance reviews have been undertaken as yet.
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.	Complies	The Nomination and Remuneration Committee will conduct periodic performance reviews as outlined in its charter. As the appointment of the senior executives took effect upon ASX listing, no performance reviews have been undertaken as yet.
2.	Structure of the Board to add value
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: (iii) the charter of the committee; (iv) the members of the committee; and (v) 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 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, knowledge, experience, independence and diversity to enable it to discharge its duties and responsibilities effectively.	Complies	The Remuneration and Nomination Committee has been established with its own charter. The members are:  Mr Lee Chong Hoe (Non-executive and independent director) - Chair of Committee;  Ms Michelle Siew Yee Lee (Non-executive and independent director) - Member of Committee; and  Mr Jack Tian Hock Tan (Non-executive and independent director) - Member of Committee. The charter of the Nomination and Remuneration committee is available on the Company's website.
2.2	A listed entity should have and disclose a Board skills matrix setting out the mix of skills and diversity that the Board currently has or is looking to achieve in its membership.	Will comply	Under the Remuneration and Nomination Committee Charter, it is the responsibility of the Committee to develop and disclose a Board skills matrix and the Annual Report will disclose these matters.

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	Recommendations	Compliance	Comment
			The Company has also provided details of each director’s professional experience in the Prospectus.
2.3	A listed entity should disclose: (a) the names of the directors considered by the Board to be independent directors; (b) if a director has an interest, position, association or relationship of the type described in Box 2.3 of the Corporate Governance Principles and Recommendations but the Board is of the opinion that it does not compromise the independence of the director, the nature of the interest, position, association or relationship in question and an explanation of why the Board is of that opinion; and (c) the length of service of each director.	Complies	The Company considers that Jack Tan, Lee Chong Hoe and Michelle Lee are independent directors for the reasons given below. Jack Tan has been a director of the Company since 16 February 2007, and acted as executive chairman from that date until the date of ASX listing. He holds less than 1% of the total issued shares in the Company. Although Mr Tan has been a director and executive of the Company for some time, this was during the time that the Company’s business activities were investment in Vietnam and later mineral exploration. Mr Tan has had no involvement in the Company’s current business, namely the operation of a biogas power plant in Malaysia and sale of energy through the Company’s wholly owned subsidiary Mistral Engineering Sdn Bhd, which was acquired by the Company on 10 September 2015. As such, the Company considers that Mr Tan is an independent director of the Company. Lee Chong Hoe’s appointment as director of the Company took effect on 16 September 2015. Mr Lee is a lawyer in Malaysia, who has provided legal services to Cepatwawasan Group Berhad (CGB), the parent company of Cash Nexus (and which has a relevant interest in the shares in the Company which are held by Cash Nexus). Given that this relationship is with CGB and not the Company or any of its child entities, the Company considers that Mr Lee is an independent director of the Company. Mr Lee does not hold any shares in the Company. Michelle Lee’s appointment as director of the Company took effect on 16 September 2015. None of the factors listed in Box 2.3 of the Corporate Governance Principles and Recommendations are relevant to Ms Lee, and she does not hold any shares in the Company. Therefore, the Company considers Ms Lee to be an independent director of the Company.
2.4	A majority of the Board of a listed entity should be independent directors.	Does not comply	The Company’s Board Charter states that the Board will comprise a majority of independent non-executive directors. The Company currently does not comply with this requirement of its Board Charter for the reasons given below, but the Board will aim to comply with this requirement at a later stage. The Company has 6 directors, 3 of which are independent directors. Given the size of the Company, the Board believes that it has an appropriate size and mix of skills to provide independent and transparent decisions for the benefit of the Company,despite not havingthe recommended majorityindependent

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	Recommendations	Compliance	Comment
			directors as outlined in this Recommendation. Instead, the Board has implemented several policies and practices to enable it to make transparent and independent decisions. For example, directors are not allowed to be present during discussions or decision making on matters in which they have or could be seen to potentially have a material conflict of interest. In addition, directors are excluded from taking part in the appointment of third party service providers where the director has an interest, which provides further separation and safeguards to independence.
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.	Does not comply	While the Board recognises the principle that the Chairman should be an independent director, the Board believes that Dato’ Seri Mah King Thian is the most appropriate person to lead the Board as Chairman following listing given his long standing experience and business relationships. The Board is confident that Dato’ Seri Mah is able to bring quality and independent judgment to relevant issues falling within the scope of the role of Chairman.
2.6	A listed entity should have a program for inducting new directors and provide appropriate professional development opportunities for directors to develop and maintain the skills and knowledge needed to perform their role as directors effectively.	Complies	Under the Board Charter, each new director will, upon appointment, participate in an induction programme. This will include meeting with members of the existing Board, Company Secretary, management and other relevant executives to familiarise themselves with the Company, its procedures and prudential requirements and Board practices and procedures.

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	Recommendations	Compliance	Comment
3.	Act ethically and responsibly
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.	Complies	The Board has adopted two Codes of Conduct – one for employees generally, and one for directors and senior executives generally. The Codes establish a clear set of values that emphasise a culture encompassing strong corporate governance, sound business practices and good ethical conduct. The Codes are available at the Company's website.
4.	Safeguard integrity in corporate reporting
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, (iii) and disclose: a. the charter of the committee; b. the relevant qualifications and experience of the members of the committee; and c. 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 corporate reporting, including the processes for the appointment and removal of the external auditor and the rotation of the audit engagement partner.	Does not comply	The Company has established an Audit and Risk Committee to ensure its corporate reporting is adequately reviewed and that the external auditors are independent. The Committee’s structure, roles and responsibilities are detailed in the Audit and Risk Committee Charter, which is available on the Company website. The relevant qualifications and experience of each member of the Audit and Risk Committee was disclosed in section 7.2 of the Prospectus. The Audit and Risk Committee has 3 members. Two out of the 3 members are non-executive independent directors. The Company considers that including an executive director is appropriate given his intimate knowledge of the Company’s operations during this initial phase, but may be replaced with a non-executive director at a later date. Lee Chong Hoe is the Chairman of the Audit and Risk Committee and is an independent non-executive director of the Company. The remaining members of the committee are:  Jack Tian Hock Tan – non-executive independent director; and  Soong Swee Koon – executive director. The structure of the Audit and Risk Committee has been changed from that disclosed in section 7.5(d) of the Prospectus, as the Board believes the Audit and Risk Committee should be chaired by an independent, non-executive director and Soong Swee Koon (who was originally disclosed as the chairman but has now been replaced in this role by Lee Chong Hoe) is a non- independent, executive director. The Audit and Risk Committee has not yet met, but intend to meet during the course of the upcoming reporting period.
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, in their opinion, the financial records of the entity have been properly maintained and that the financial statements complywiththe appropriate accounting standards and give a true and	Will comply	The Board will seek these representations from the CEO and CFO prior to approving the financial statements.

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	Recommendations	Compliance	Comment
	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.
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.	Will comply	The Company will ensure that its external auditor attends its AGM and is available to answer questions from security holders relevant to the audit.
5.	Make timely and balanced disclosure
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.	Complies	The Company is committed to promoting investor confidence and ensuring that Shareholders and the market are provided with timely and balanced disclosure of all material matters concerning the Company, as well as ensuring that all shareholders have equal and timely access to externally available information issued by the Company. The Company has adopted a Continuous Disclosure Policy to outline responsibilities in relation to disclosing information to the market and shareholders, and to ensure compliance with the continuous disclosure regime under ASX Listing Rules and the_Corporations Act 2001_(Cth). A copy of this policy is available on the Company’s website.
6.	Respect the rights of security holders
6.1	A listed entity should provide information about itself and its governance to investors via its website.	Complies	The Company's website contains information about its corporate governance policies on its website.
6.2	A listed entity should design and implement an investor relations program to facilitate effective two-way communication with investors.	Complies	The Company has a Continuous Disclosure Policy. The Company has also adopted a Shareholder Communication Policy to ensure that Shareholders have access to balanced and understandable information about the Company and its activities. The policies are available on the Company's website.
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.	Complies	The Company and its Board encourage shareholders to actively participate at its AGMs. The Company's Shareholder Communication Policy is available on the Company's website.
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.	Complies	The Company has a Shareholder Communications Policy which provides that Shareholders may opt to receive communications from, and send communications to, the Company and its share registry electronically, by contacting the Company Secretary or the Company’s share registry as applicable. The Company’s website lists email addresses for communications with the Company and its share registry, Boardroom Pty Limited.

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	Recommendations	Compliance	Comment
7.	Recognise and manage risk
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: a.the charter of the committee; b.the members of the committee; and c. 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 risk committee or committees that satisfy (a) above, disclose that fact and the processes it employs for overseeing the entity's risk management framework.	Complies	The Company has established an Audit and Risk Committee that is focussed on ensuring that the Company maintains an effective system of internal control and risk management. The Committee’s structure, roles and responsibilities are detailed in the Audit and Risk Committee Charter. The Board has formed an Audit and Risk Committee which has the responsibility for identifying assessing, treating, monitoring and reporting in respect of identified risks and the management of these to the Board. The Committee has 3 members, a majority of whom are independent directors, and is chaired by an independent director. Mr Jack Tian Hock Tan is the Chairman of the Audit and Risk Committee and is an independent non-executive director of the Company. The remaining members of the committee are:  Lee Chong Hoe – non-executive independent director; and  Soong Swee Koon – executive director. The Audit and Risk Committee meets whenever necessary but no less than four times a year and keeps minutes of its meetings which are included for review at the following Board Meeting.
7.2	The Board or a committee of the Board should: (a) review the entity's risk management framework at least annually to satisfy itself that it continues to be sound; and (b) disclose, in relation to each reporting period, whether such a review has taken place.	Will comply	The Board will review the Company's risk management framework at least annually to satisfy itself that it continues to be sound and the Company will disclose whether the review has taken place in each Annual Report.
7.3	A listed entity should disclose: (a) if it has an internal audit function, how the function is structured and what role it performs; or (b) if it does not have an internal audit function, that fact and the processes it employs for evaluating and continually improving the effectiveness of its risk management and internal control processes.	Complies	The Company does not have an internal audit function. The process for evaluating and continually improving the effectiveness of its risk management and internal control processes is overseen by the Audit and Risk Committee in accordance with its charter. The Company’s Audit and Risk Committee Charter sets out process for evaluating and continuing improving the effective of the Company’s risk management and internal control processes. A copy of the Audit and Risk Committee Charter is available on the Company’s website.

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	Recommendations	Compliance	Comment
7.4	A listed entity should disclose whether it has any material exposure to economic, environmental and social sustainability risks and, if it does, how it manages or intends to manage those risks.	Will comply	Chapter 8 of the Prospectus sets out risks affecting the Company. Risk oversight and review is part of the responsibility of the Audit and Risk Committee.
8.	Remunerate fairly and responsibly
8.1	The Board of a listed entity should: (a) have a remuneration committee which: has at least three members, a majority of whom are independent directors; and (i) is chaired by an independent director, and disclose: (ii) the charter of the committee; (iii) the members of the committee; and (iv) 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.	Complies	The Remuneration and Nomination Committee has been established with its own charter. The committee members are:  Lee Chong Hoe, Chairman - independent and non-executive director;  Jack Tian Hock Tan – independent non-executive director; and  Michelle Siew Yee Lee – independent non-executive director. The Committee is tasked with ensuring the Company has remuneration policies and practices which enable it to attract and retain directors and executives who will best contribute towards achieving positive outcomes for Shareholders. The Company complies with the guidelines for executive remuneration packages and non-executive director remuneration as recommended in the Recommendations. More detailed information will be presented in the annual report. The Remuneration and Nomination Committee Charter is available at the Company's website.
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.	Complies	The Company’s Remuneration and Nomination Committee Charter provides separate policies and practices regarding the remuneration of non-executive directors and the remuneration of directors and senior management.
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.	Complies	Under the Securities Trading Policy, directors and certain key management personnel are prevented from trading in the Company’s shares during the period from the end of a statutory reporting period until two days after the announcement of quarterly, half year and full year reports. This is a restriction over and above the requirement to not trade in the Company’s securities when in possession of inside information which applies to all directors, executives and employees of the Company. Under the Securities Trading Policy, directors, offers and employees of the Company are prohibited from dealing in derivatives, hedging or other similar arrangements in securities in certain circumstances. This policy is available on the Company's website.

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