VYSARN LIMITED — Governance Information 2021

Oct 14, 2021

Corporate Governance Statement

Introduction

Vysarn Limited (Company) has established a corporate governance framework, the key features of which are set out in this statement. In establishing its corporate governance framework, the Company has referred to the recommended corporate governance practices for ASX listed entities set out in the 4th edition of the ASX Corporate Governance Council Principles and Recommendations (Principles and Recommendations).

This Corporate Governance Statement discloses the extent to which the Company followed the recommendations set out in the 4th edition of the Principles and Recommendations (recommendations) for the period 1 July 2020 to 30 June 2021 (Reporting Period). The Company has followed each recommendation where the Board has considered the recommendation to be an appropriate benchmark for its corporate governance practices. Where the Company’s corporate governance practices follow a recommendation, the Board has made appropriate statements reporting on the adoption of the recommendation. In compliance with the “if not, why not” reporting regime, where, after due consideration, the Company’s corporate governance practices do not follow a recommendation, the Board has explained its reasons for not following the recommendation and disclosed what, if any, alternative practices the Company has adopted instead of those in the recommendation.

Corporate Governance Policies and Procedures

The Company has adopted the following suite of corporate governance policies and procedures (together, the Corporate Governance Policies):

• V Statement of Values

• V Board Charter

• V Audit and Risk Committee Charter

• V Nomination and Remuneration Committee Charter

• V Policy and Procedure for the selection and (Re) Appointment of Directors

• V Process for performance evaluations

• V Risk Management Policy

• V Shareholder Communication and Investor Relations Policy

• V Securities Trading Policy

• V Code of Conduct

• V Anti-Bribery and Corruption Policy

• V Whistleblower Policy

• V Diversity Policy

• V Continuous Disclosure Policy

• V Continuous Disclosure Compliance Procedures

The Company’s Corporate Governance Policies are available on the Company’s website at www.vysarn.com.au.

The information in the statement is current at October 2021 and was approved by a resolution of the Board in October 2021.

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VYS: Corporate Governance Statement

Principle 1: Lay Solid Foundations for Management and Oversight

Recommendation 1.1

Recommendation

A listed entity should have and disclose a board charter setting out:

• (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.

Compliant:

Explanation

The Company has established the respective roles and responsibil-ities of its Board and management, and those matters expressly reserved to the Board and those delegated to management, and has documented this in its Board Charter , which is disclosed on the Company’s website.

Recommendation 1.2

Recommendation

A listed entity should:

• (a) undertake appropriate checks before appointing a director or senior executive or putting someone forward for election as a director; and

• (b) provide security holders with all material information in possession relevant to a decision on whether or not to elect or re-elect a director.

Compliant:

Explanation

The Board undertakes appropriate checks before appointing a person, these checks were undertaken for all Directors, or putting forward to shareholders a candidate for election as a director and provides shareholders with all material information in its possession relevant to a decision on whether to elect or re-elect a director. The checks that are undertaken, and the information provided to shareholders are set out in the Company’s Policy and Procedure for the Selection and (Re)Appointment of Directors , which is disclosed on the Company’s website. The Company provided shareholders with all material information in relation to:

• V the re-election of Director Sheldon Burt at the annual general meeting held on 28 November 2020.

Recommendation 1.3

Recommendation

A listed entity should have a written agreement with each director and senior executive setting out the terms of their appointment.

Compliant:

Explanation

The Company has a written agreement with each of its Directors, including its Executive Directors and Senior Executives.

The material terms of any employment, service or consultancy agreement the Company, or any of its child entities, has entered into with its Chief Executive Officer, any of its directors, and any other person or entity who is related party of the Chief Executive Officer or any of its directors has been disclosed in accordance with ASX Listing Rule 3.16.4 (taking into consideration the exclusions from disclosure outlined in that rule).

Recommendation 1.4

Recommendation

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.

Compliant:

Explanation

The Company Secretary is accountable directly to the Board, through the Chair, on all matters to do with the proper functioning of the Board as outlined in the Company’s Board Charter.

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VYS: Corporate Governance Statement | Corporate Governance Policies and Procedures

Recommendation 1.5

Recommendation

A listed entity should:

• (a) have and disclose a diversity policy;

• (b) through its board or committee of the board set measurable objectives for achieving gender diversity in the composition of its board, senior executives and workforce generally; and

• (c) disclose in relation to each reporting period:

• (i) the measurable objectives set for that period to achieve gender diversity;

• (ii) the entity’s progress towards achieving those objectives; and

• (iii) either:

  • (A) the respective proportions of men and women on the board, in senior executive positions and across the whole workforce (including how the entity has defined “senior executive” for these purposes); or

  • (B) 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 the Workplace Gender Equality Act.

Compliant:

Explanation

The Company has a Diversity Policy, which is disclosed on the Company’s website. However, the Diversity Policy does not include requirements for the Board to set measurable objectives for achieving gender diversity and to assess annually both the objectives and the Company’s progress in achieving them. Nor has the Board set measurable objectives for achieving gender diversity.

Given the Company’s stage of development and the number of employees, the Board considers it is not practical to set measurable objectives for achieving gender diversity at this time.

The respective proportions of men and women on the Board, in senior executive positions and across the whole organisations are set out in the following table. Senior executives for these purposes means those person who report directly to the chief executive officer (or equivalent):

		Male	Female	Total
	Board of Vysarn	3	-	3
	Senior executives Total	1 4	- -	1 4

Recommendation 1.6

Recommendation

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 proces

Compliant:

Explanation

Performance evaluations are to be conducted in accordance with the Company’s Process for Performance Evaluations , which is disclosed on the Company’s website.

Performance evaluations were undertaken in the reporting period in accordance with the Company’s Process for Performance Evaluations .

Recommendation 1.7

Recommendation

A listed entity should:

• (c) have and disclose a process for evaluating the performance of its senior executives at least once every reporting period; and

• (a) disclose for each reporting period whether a performance evaluation has been undertaken in accordance with that process during or in respect of that period.

Compliant:

Explanation

Performance evaluations are to be conducted in accordance with the Company’s Process for Performance Evaluations , which is disclosed on the Company’s website.

The Company had two individuals considered to be senior executives in the reporting period, Mr Clement and Mr Burt. An executive review was completed for Mr Clement in March 2021 and Mr Burt in June 2021.

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VYS: Corporate Governance Statement | Corporate Governance Policies and Procedures

Principle 2: Structure the board to be effective and add value

Recommendation 2.1

Recommendation

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.

Compliant:

Explanation

The Board has not established a separate Nomination and Remuneration Committee. Given the current size and composition of the Board, the Board believes that there would be no efficiencies gained by establishing a separate Nomination and Remuneration Committee. Accordingly, the Board performs the role of the Nomination and Remuneration Committee. Although the Board has not established a separate Nomination and Remuneration Committee, it has adopted a Nomination and Remuneration Committee Charter, which describes the role, composition, functions and responsibilities of the full Board in its capacity as the Nomination and Remuneration Committee, and is disclosed on the Company’s website. When the Board convenes as the Nomination and Remuneration Committee it carries out those functions which are delegated to it in the Company’s Nomination and Remuneration Committee Charter. Separate meetings of the full Board in its capacity as the Nomination and Remuneration Committee are held, and minutes of those meetings are taken. The Board deals with any conflicts of interest that may occur when convening in the capacity of the Nomination and Remuneration Committee by ensuring that the director with conflicting interests is not party to the relevant discussions.

Details of director attendance at meetings of the full Board, in its capacity as the Nomination and Remuneration Committee, during the Reporting Period, are set out in a table in the Directors’ Report.

Recommendation 2.2

Recommendation

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.

Compliant:

Explanation

The mix of skills and diversity which the Board is looking to achieve in its membership is represented by the composition of its current Board.

A copy of the Company’s board skills matrix can be found at Appendix 1.

Recommendation 2.3

Recommendation

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 ASX Corporate Governance Principles and Recommendation (4th Edition), but the board is of the opinion that it does not compromise the independence of the director, the nature of the interest, position or relationship in question and an explanation of why the board is of that opinion; and

• (c) the length of service of each director

Compliant:

Explanation

The board considered the independence of Directors with regards to factors set out in Box 2.3 of the 4th edition of the ASX Principles and Recommendations.

During the Reporting Period, the Company did not have any independent directors, and currently does not have any independent directors.

Names of Directors during the Reporting Period and their length of service up to the date of this statement, or their resignation date is noted below:

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Name Length of Service
Mr Peter Hutchinson (Chairman) 3 years, 11 months
Mr Sheldon Burt 2 years, 4 months
Mr James Clement 1 year, 7 months
Mr Christopher Brophy (resigned) 1 year and 8 months
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VYS: Corporate Governance Statement | Corporate Governance Policies and Procedures

Recommendation 2.4	Compliant:
Recommendation	Explanation
A majority of the board of a listed entity should be	As set out in the Company’s Board Charter, where
independent directors.	practical and consistent with the Company’s stage
	of development, a majority of the Board should be
	comprised of independent directors, and the Chairman
	should be an independent non-executive director.
	However, the Board does not include any independent
	directors as Messrs Clement and Burt perform an
	executive role with the Company, Mr Hutchinson is a
	substantial shareholder of the Company.
	The Board recognises the importance of the appropriate
	balance between independent and non-independent
	representation on the Board. However, the Board
	considered that a Board weighted towards industry and
	technical experience is appropriate at the stage of the
	Company’s development.
	As the Company’s operations progress, the Board will
	review the composition of the Board, including the
	independence of its Directors.
Recommendation 2.5	Compliant:
Recommendation	Explanation
The chair of the board of a listed entity should be an	The Non-executive Chairman of the Board is Mr
independent director and, in particular, should not be the	Hutchinson. Mr Hutchinson is a substantial security
same person as the CEO of the entity.	holder of the Company. Notwithstanding the lack of
	independence, the Board deemed Mr Hutchinson to be
	the most appropriate person as the Chair or the Company
	given his:
	V experience in the role of Chairman; and
	V extensive Public Company experience.

Recommendation 2.6 Compliant: Recommendation Explanation A listed entity should have a program for inducting new The Company has an induction program that it uses to directors and for periodically reviewing whether there is when new directors join the Board and when new senior a need for existing directors to undertake professional executives are appointed. The goal of the program is to development to maintain the skills and knowledge assist new directors to participate fully and actively in needed to perform their role as a director effectively. Board decision-making at the earliest opportunity and to assist senior executives to participate fully and actively in management decision-making at the earliest opportunity. The full Board in its capacity as the Nomination and Remuneration Committee regularly reviews whether the directors as a group have the skills, knowledge and familiarity with the Company and its operating environment required to fulfil their role on the Board and the Board committees effectively using a Board skills matrix. Where any gaps are identified, the full Board in its capacity as the Nomination and Remuneration Committee considers what training or development should be undertaken to fill those gaps. In particular, the full Board in its capacity as the Nomination and Remuneration Committee ensures that any director who does not have specialist accounting skills or knowledge has a sufficient understanding of accounting matters to fulfil his or her responsibilities in relation to the Company’s financial statements.

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VYS: Corporate Governance Statement | Corporate Governance Policies and Procedures

Principle 3: Instil a culture of acting lawfully, ethically, and responsibly

Recommendation 3.1

Recommendation

A listed entity should articulate and disclose its values.

Compliant:

Explanation

The Company’s Statement of Values is disclosed on the Company’s website.

Recommendation 3.2

Recommendation

A listed entity should:

• (a) have and disclose a code of conduct for its directors, senior executives and employees; and

Compliant:

Explanation

The Company has established a Code of Conduct for its directors, senior executives and employees, which is disclosed on the Company’s website.

• (b) ensure that the board or committee of the board is informed of any material breaches of that code.

Recommendation 3.3

Recommendation

A listed entity should:

• (a) have and disclose a whistleblower policy; and

• (b) ensure that the board or a committee of the board is informed of any material incidents reported under that policy.

Compliant:

Explanation

The Company has also adopted a Whistleblower Policy to encourage the reporting of any unlawful or unethical behaviour, including violations (or suspected violations) of the Company’s Code of Conduct and/or Anti-Bribery and Corruption Policy and to provide effective protection from detriment to those reporting by implementing systems for confidentiality and report handling. The Company’s Whistleblower Policy is disclosed on the Company’s website.

Recommendation 3.4

Recommendation

A listed entity should:

• (a) have and disclose an anti-bribery and corruption policy; and

Compliant:

Explanation

The Company has also established an Anti-Bribery and Corruption Policy , which is disclosed on the Company’s website.

• (b) ensure that the board or a committee of the board is informed of any material breaches of that policy.

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VYS: Corporate Governance Statement | Corporate Governance Policies and Procedures

Principle 4: Safeguard the integrity of corporate reports

Recommendation 4.1

Recommendation

The board of a listed entity should:

• (a) have an audit committee which:

• (i) has at least three members, all of whom are nonexecutive 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:

• (iii) the charter of the committee;

• (iv) the relevant qualifications and experience of the members of the committee; and

• (v) 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.

.

Compliant:

Explanation

The Company does not have a separate Audit and Risk Committee.

Given the current size and composition of the Board, the Board believes that there would be no efficiencies gained by establishing a separate Audit and Risk Committee. Accordingly, the Board performs the role of the Audit and Risk Committee.

Although the Board does not have a separate Audit and Risk Committee, it had adopted an Audit and Risk Committee Charter, which is disclosed on the Company’s website.

When the Board convenes as the Audit and Risk Committee it carries out those functions which are delegated to it in the Company’s Audit and Risk Committee Charter. Separate meetings of the full Board in its capacity as the Audit and Risk Committee are held, and minutes of those meetings are taken. The Board deals with any conflicts of interest that may occur when convening in the capacity of the Audit and Risk Committee by ensuring that the director with conflicting interests is not party to the relevant discussions.

The Company has established a Procedure for the Selection, Appointment and Rotation of its External Auditor , which is an appendix to the Audit and Risk Committee Charterr.

Recommendation 4.2

Recommendation

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 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.

Compliant:

Explanation

During the Reporting Period, the Board received, prior to approving the Company’s financial statements, from the CEO and CFO the declaration required that in their opinion the financial records of the entity had been properly maintained and that the financial statements complied with the appropriate accounting standards and gave a true and fair view of the financial position and performance of the Company and that the opinion had been formed on the basis of a sound system of risk management and internal control which was operating effectively.

Recommendation 4.3

Recommendation

A listed entity should disclose its process to verify the integrity of any periodic corporate report it releases to the market that is not audited or reviewed by an external auditor.

Compliant:

Explanation

The Company ensures that all non-audit corporate reports are subject to robust review and analysis from management and full board sign-off prior to release.

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Principle 5: Make timely and balanced disclosure

Recommendation 5.1

Recommendation

A listed entity should have and disclose a written policy for complying with its continuous disclosure obligations under listing rule 3.1.

Compliant:

Explanation

The Company has established written policies and procedures for complying with its continuous disclosure obligations under the ASX Listing Rules. The Company’s Policy on Continuous Disclosure and Compliance Procedures are disclosed on the Company’s website.

Recommendation 5.2

Recommendation

A listed entity should ensure that its board received copies of all material market announcements promptly after they have been made.

Compliant:

Explanation

The Board receives copies of all material market announcements promptly after they have been made.

Recommendation 5.3

Compliant:

Recommendation

Explanation

A listed entity that gives a new and substantive investor The Company ensures presentation materials are released or analyst presentation should release a copy of the to the market ahead of the presentation. presentation materials on the ASX Market Announcements All announcements made to the market, and related Platform ahead of the presentation. information (including information provided to analysts or the media during briefings) are placed on the company’s website after they are released to the ASX.

The Company ensures presentation materials are released to the market ahead of the presentation.

Principle 6: Respect the rights of security holders

Recommendation 6.1

Recommendation

A listed entity should provide information about itself and its governance to investors via its website.

Compliant:

Explanation

Information about the Company and its governance practices is available on its website at www.vysarn.com.au

Recommendation 6.2

Recommendation

A listed entity should have an investor relations program that facilitates effective two-way communication with investors.

Compliant:

Explanation

The Company has designed and implemented an investor relations program to facilitate effective two-way communication with investors. The program is set out in the Company’s Shareholder Communication and Investor Relations Policy , which is available on the Company’s website.

Recommendation 6.3

Recommendation

A listed entity should disclose how it facilitates and encourages participation at meetings of security holders.

Compliant:

Explanation

The Company has in place a Shareholder Communication and Investor Relations Policy which outlines the policies and processes that it has in place to facilitate and encourage participation at meetings of shareholders. Communication to shareholders is facilitated by the production of the annual report, half-yearly report and announcements which are all made available on the Company’s website. In addition, all shareholders are encouraged to attend the Annual General Meeting and use the opportunity to ask questions during the meeting and after the Chief Executive Officer’s presentation. The external auditor also attends the AGM and is available to answer shareholder questions about the conduct of the audit and the preparation and content of the auditor’s report

.

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Recommendation 6.4

Recommendation

A listed entity should ensure that all substantive resolutions at a meeting of security holders are decided by a poll rather than show of hands.

Compliant:

Explanation

The Company ensures that all resolutions at a meeting of security holders are decided by poll rather than a show of hands. Security holder meetings held during the reporting period included the Company’s AGM held on 19 November 2020.

Recommendation 6.5

Recommendation

A listed entity should give security holders the option to receive communications from, and send communications to, the entity and its security register electronically.

Compliant:

Explanation

Shareholders are given the option to receive and send communications electronically, this was a service provided through the Company’s share registry.

Principle 7: Recognise and Manage Risk

Recommendation 7.1

Recommendation

The board of a listed entity should:

• (a) have a committee or committees to oversee risk, each of which:

Compliant:

Explanation

The Company did not have a separate Risk Committee. Please refer to disclosure in relation to “Recommendation 4.1” on page 7.

• (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 risk committee or committees that satisfy (a) above, disclose that fact and the process it employs for overseeing the entity’s risk management framework.

Recommendation 7.2

Recommendation

The board or a committee of the board should:

• (a) review the entity’s risk management framework with management at least annually to satisfy itself that it continues to be sound and that the entiy is operating with due regard to the risk appetite set by the board; and

• (b) disclose in relation to each reporting period, whether such a review has taken place.

Compliant:

Explanation

The Board reviews the Company’s risk management framework at least annually to satisfy itself that it continues to be sound, to determine whether there have been any changes in the material business risks the Company faces and to ensure that the Company is operating within the risk appetite set by the Board. The Board carried out these reviews during the Reporting Period.

Recommendation 7.3

Recommendation

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 governance, risk management and internal control processes.

Compliant:

Explanation

The Company does not have an internal audit function. To evaluate and continually improve the effectiveness of the Company’s risk management and internal control processes, the Board relies on ongoing reporting and discussion of the management of material business risks as outlined in the Company’s Risk Management Polic y.

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Recommendation 7.4

Recommendation

A listed entity should disclose whether it has any material exposure to environmental or social risks and, if it does, how it manages or intends to manage those risks.

Compliant:

Explanation

The Company has adopted a Risk Management Standard that monitors, measures and puts in place strategies to address economic, environmental and social sustainability risks. The Risk Management Standard and subsequent Risk Matrix is reviewed by management on a quarterly basis and by the board on a biannual basis, with a sharp focus on constant and continuous improvement in addressing or mitigating the identified risks. Overarching this approach to risk management are the values adopted by the Company that govern company-wide behaviour and the standard by which it measures risk. The Company values safety, customers, feedback, different thinking, teamwork, urgency, our shareholders, community and environment.

Principle 8: Remunerate Fairly and Responsibly

Recommendation 8.1

Recommendation

The board of a listed entity should:

• (a) have a remuneration committee which:

• (i) has at least three members, a majority of whom are independent directors; and

Compliant:

Explanation

The Company did not have a separate Remuneration Committee.

Please refer to disclosure in relation to “Recommendation 2.1” on page 4 above.

• (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 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.

Recommendation 8.2

Recommendation

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.

Compliant:

Explanation

Details of the Company’s policies and practices regarding the remuneration of non-executive directors and the remuneration of executive directors and other senior executives for the Reporting Period are set out in the Company’s Remuneration Report.

Recommendation 8.3

Recommendation

A listed entity which has an equity-based remuneration scheme should:

Compliant: N/A

Explanation

The Company does not have an equity-based remuneration scheme in place.

• (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.

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VYS: Corporate Governance Statement | Appendix 1 – Board Skills Matrix

Appendix 1 – Board Skills Matrix

The Board has identified that the appropriate mix of skills and diversity required of its members to operate effectively and efficiently is achieved by personnel having substantial skills and experience in the following Industry Skills: compliance, human resources and occupational health and safety, mining and resource drilling and water management services, asset management and commercial negotiation skills.

The skills and experience of the Board in each of these areas is summarised as follows:

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Industry Skills
Compliance
Human Resources OHS
Mining & Resource: Drilling and
Water Management Services
Asset Management
Commercial Negotiation Skills
0 25% 50% 75% 100%
Percentage of Board Competent in Skill Area
Skill Area
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In addition, directors of the Company are expected to be knowledgeable and experienced in the following areas: corporate governance, legal, accounting and finance, risk and compliance oversight, director duties and responsibilities, information technology, strategic expertise, commercial experience and executive management.

The skills and experience of the Board in each of these areas is summarised as follows:

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Professional Director Skills
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Corporate Governance
Legal
Accounting & Finance
Risk & Compliance Oversignt
Director Duties & Responsibilities
Information Technology
Strategy Expertise
Commercial Experience
Executive Management
0 25% 50% 75% 100%
Percentage of Board Competent in Skill Area
Skill Area
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Gaps in the collective skills of the Board are considered regularly by the full Board in its capacity as the Nomination and Remuneration Committee.

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