Announcement PDF TALISMAN MINING LTD A.B.N. 71 079 536 495 Corporate Governance Statement Approach to Corporate Governance Talisman Mining Limited ("Company") has adopted systems of control and accountability as the basis for the administration of corporate governance, the key features of which are set out in this Statement. The Board is committed to administering the policies and procedures with openness and integrity, pursuing the true spirit of corporate governance commensurate with the Company's needs and individual circumstances. In establishing its corporate governance framework the Company has referred to the recommendations set out in the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations 3rd edition (“Principles and Recommendations”). 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. The following governance-related documents can be found on the Company’s website at www.talismanmining.com.au, under the section marked “Corporate Governance”. Charters • Board • Audit Committee • Nomination Committee • Remuneration Committee • Risk Committee Constitution • Constitution of Talisman Mining Limited Board • Code of Conduct – summary • Policy and Procedure for the Selection and (Re)Appointment of Directors • Process for Performance Evaluation Compliance, Controls and Policies • Risk Management Policy – summary • Continuous Disclosure Policy – summary • Securities Trading Policy • Diversity Policy • Remuneration Policy Shareholder Communication • Shareholder Communication and Investor Relations Policy The Company reports below on whether it has followed each of the recommendation during the year ended 30 June 2015 (“Reporting Period”). The information in this Statement is current at and was approved by a resolution of the Board on 29 September 2015. Talisman Mining Limited Corporate Governance Statement 1 Principle 1 – Lay solid foundations for management and oversight Recommendation 1.1 The Company has established the respective roles and responsibilities 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, a copy of which is available on the Company’s website. Recommendation 1.2 The Company undertakes appropriate checks before appointing a person, 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 or not to elect or reelect a director. The checks which 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, a copy of which is available on the Company’s website. Recommendation 1.3 The Company has a written agreement with each director and senior executive setting out the terms of their appointment. The material terms of any employment, service or consultancy agreement the Company, or any of its child entities, has entered into with its Managing Director, any of its directors, and any other person or entity who is related party of the Managing Director 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 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. Recommendation 1.5 The Company has a Diversity Policy, a copy of which is available 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 as an exploration company and the number of employees, the Board considers that 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 organisation as at 30 June 2015 are set out in the following table. “Senior Executive” for these purposes means those persons who have the opportunity to materially influence the integrity, strategy and operation of the Company and its financial performance. Whole organisation Senior executive positions Board Talisman Mining Limited Corporate Governance Statement Proportion of women 3 out of 7 (43%) 0 out of 4 (0%) 1 out of 4 (25%) 2 Recommendation 1.6 The Chair is responsible for evaluation of the Board and, when deemed appropriate, Board committees and individual directors in accordance with the process disclosed in the Company’s Process for Performance Evaluation, a copy of which is available on the Company’s website. During the Reporting Period an evaluation of the Board, its committees, and individual directors took place in the Reporting Period in accordance with the process disclosed in the Company’s Process for Performance Evaluation. Recommendation 1.7 The Managing Director is responsible for evaluating the performance of senior executives in accordance with the process disclosed in the Company’s Process for Performance Evaluations. The Nomination Committee is responsible for evaluating the performance of the Managing Director in accordance with the process disclosed in the Company’s Process for Performance Evaluations. During the Reporting Period an evaluation of senior executives took place in accordance with the process disclosed. Principle 2 – Structure the board to add value Recommendation 2.1 The Board has established a Nomination Committee comprising three independent nonexecutive directors; Alan Senior (Chair), Karen Gadsby and Brian Dawes. The Nomination Committee is structured in accordance with Recommendation 2.1. Details of director attendance at Nomination Committee meetings during the Reporting Period are set out in a table in the Directors’ Report on page 28 of the Company’s 2015 Annual Report. The Board has adopted a Nomination Committee Charter which describes the role, composition, functions and responsibilities of the Nomination Committee and is disclosed on the Company’s website. Recommendation 2.2 The Board has a skills matrix covering the following key areas of knowledge and experience: • • • • • • • • • • • • Strategy Financial performance Risk and compliance oversight Corporate governance Executive management Legal understanding Geological understanding Mining/Engineering Project Development/Operations Health, Safety and Environment Finance (markets) Commercial Talisman Mining Limited Corporate Governance Statement 3 The Board is of the opinion that having a diverse mix of experience, gender and culture across the Board leads to better outcomes for the Company and shareholders. The Board is comfortable with the skills matrix represented by the current Board. Recommendation 2.3 The Board considers the independence of directors having regard to the relationships listed in Box 2.3 of the Principles & Recommendations. The independent directors of the Company are Alan Senior, Brian Dawes and Karen Gadsby. The length of service of each director is set out in the Directors’ Report on pages 22 and 23 of the Company’s 2015 Annual Report. Recommendation 2.4 The Board has a majority of directors who are independent. Recommendation 2.5 The independent Chair of the Board is Alan Senior. Recommendation 2.6 The Company has an induction program that it uses when new directors join the Board and when new senior executives are appointed. The goal of the program is to assist new directors to participate fully and actively in Board decision-making at the earliest opportunity and to assist senior executives to participate fully and actively in management decisionmaking at the earliest opportunity. The Nomination 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 Nomination Committee considers what training or development should be undertaken to fill those gaps. In particular, the Nomination 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. Directors also receive ongoing education on developments in accounting standards. Principle 3 – Act ethically and responsibly Recommendation 3.1 The Company has established a Code of Conduct for its directors, senior executives and employees, a summary of which is disclosed on the Company’s website. Principle 4 – Safeguard integrity in corporate reporting Recommendation 4.1 The Board has established an Audit Committee comprising three independent non-executive directors; Karen Gadsby (Chair), Alan Senior and Brian Dawes. The Audit Committee is structured in compliance with Recommendation 4.1. Talisman Mining Limited Corporate Governance Statement 4 The Board has adopted an Audit Committee Charter, a copy of which is available on the Company’s website, which describes the Audit Committee’s role, composition, functions and responsibilities. Details of director attendance at Audit Committee meetings during the Reporting Period are set out in a table in the Directors’ Report on page 28 of the Company’s 2015 Annual Report. The Company has also established a Procedure for the Selection, Appointment and Rotation of its External Auditor. The Board is responsible for the initial appointment of the external auditor and the appointment of a new external auditor when any vacancy arises. Candidates for the position of external auditor must demonstrate complete independence from the Company through the engagement period. The Board may otherwise select an external auditor based on criteria relevant to the Company's business and circumstances. The performance of the external auditor is reviewed on an annual basis by the Board. Recommendation 4.2 Before the Board approved the Company financial statements for the half year ended 31 December 2014 and the full-year ended 30 June 2015 and each of the quarters ended 30 September 2014, 31 December 2014, 31 March 2015 and 30 June 2015, it received from the Managing Director and the Chief Financial Officer a declaration that, in their opinion, the financial records of the Company for the relevant financial period have been properly maintained and that the financial statements for the relevant financial period comply with the appropriate accounting standards and give a true and fair view of the financial position and performance of the Company and the consolidated 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. Recommendation 4.3 Under section 250RA of the Corporations Act, the Company’s auditor is required to attend the Company’s annual general meeting at which the audit report is considered, or to arrange to be represented by a person who is a suitably qualified member of the audit team that conducted the audit and is in a position to answer questions about the audit. Each year, the Company writes to the Company’s auditor to inform them of the date of the Company’s annual general meeting. In accordance with section 250S of the Corporations Act, at the Company’s annual general meeting where the Company’s auditor or their representative is at the meeting, the Chair allows a reasonable opportunity for the members as a whole at the meeting to ask the auditor (or its representative) questions relevant to the conduct of the audit; the preparation and content of the auditor’s report; the accounting policies adopted by the Company in relation to the preparation of the financial statements; and the independence of the auditor in relation to the conduct of the audit. The Chair also allows a reasonable opportunity for the auditor (or their representative) to answer written questions submitted to the auditor under section 250PA of the Corporations Act. A representative of the Company’s auditor, HLB Mann Judd attended the Company’s annual general meeting held on 24 November 2014. Principle 5 – Make timely and balanced disclosure Recommendation 5.1 The Company has established written policies and procedures for complying with its continuous disclosure obligations under the ASX Listing Rules. A summary of the Company’s Continuous Disclosure Policy is disclosed on the Company’s website. Talisman Mining Limited Corporate Governance Statement 5 Principle 6 – Respect the rights of security holders Recommendation 6.1 The Company provides information about itself and its governance to investors via its website at www.talismanmining.com.au as set out in its Shareholder Communication and Investor Relations Policy, a copy of which is available on the Company’s website. Recommendation 6.2 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. Recommendation 6.3 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. Recommendation 6.4 Shareholders can register with the Company's Share Registrar to receive email notifications of the release of annual and half-yearly reports, notice of Annual General Meetings and any distribution of dividends. Further, the Company provides information through its website, enabling security holders to email the Company and to receive Company announcements by email. The share registry also provides (through its website, links to which can be found on the Company’s website) the ability to email the share registry and to receive documents by email from the share registry. Principle 7 – Recognise and manage risk Recommendation 7.1 The Board has not established a separate 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 Risk Committee. Accordingly, the Board performs the role of Risk Committee. Although the Board has not established a separate Risk Committee, it has adopted a Risk Committee Charter, which describes the role, composition, functions and responsibilities of the Board in its capacity as the Risk Committee, a copy of which is available on the Company’s website. When the Board convenes as the Risk Committee it carries out those functions which are delegated to it in the Company’s Risk Committee Charter. Items that are usually required to be discussed by a Risk Committee are marked as separate agenda items at Board meetings when required. The Board deals with any conflicts of interest that may occur when convening in the capacity of the Risk Committee by ensuring that any 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 Risk Committee, during the Reporting Period, are set out in a table in the Directors’ Report on page 28 of the Company’s 2015 Annual Report. Talisman Mining Limited Corporate Governance Statement 6 Recommendation 7.2 The full Board in its capacity as the Risk Committee 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 full Board in its capacity as the Risk Committee carried out these reviews during the Reporting Period. Recommendation 7.3 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 Policy, a summary of which is available on the Company’s website. Recommendation 7.4 The Company has material exposure to the following economic, environmental and/or social sustainability risks: Risk description Equity market-related risks Ability to source timely access to additional equity funding as required Commodity market-related risks Adverse global demand for commodities and/or adverse commodity price movements Exploration operation risks Ability to retain exploration tenure and meet tenement commitments Exploration efforts are unsuccessful in delivering new projects Environmental risks Non-compliance with environmental, native title, heritage and/or landholder requirements Talisman Mining Limited Corporate Governance Statement Risk management approach The Group maintains close financial control of expenditure and maintains good relationships with shareholders and equity market participants. The Group continually monitors global commodity demand and price and is well positioned to adjust or curtail its exploration focus. The Group utilises dedicated employees and external consultants to continually monitor its tenement holding and tenement management system. The Group maintains a tenement position of a size that allows it to be able to effectively explore and meet its tenement expenditure commitments. The Group continually assesses its tenement holding to enable it to relinquish ground that is considered not to be prospective. The Group follows a systematic exploration approach and utilises technical experts and new technologies to assess its projects and the results of its exploration activities. The Group has agreements in place with all stakeholders, regularly undertakes compliance activities and communicates with stakeholders. 7 Risk description Health and safety risks Any health and safety incident in or around the Company’s operations has the potential to put employees or community members at risk Risk management approach The Group is committed to the health and safety of its employees, contractors and the community in which it operates. The Group has an OH&S policy and risk management system in place. OH&S performance is a standing agenda item at each Board Meeting. All site based staff receive training required to perform their assigned tasks safely and correctly. The OH&S policy and risk management system is subject to regular audit. In addition, the following risk management measures have been adopted by the Board to manage the Company’s material business risks: • • • The Board has established expenditure authority limits for management, which, if expected to be exceeded, require prior Board approval; The Board has adopted a policy and procedure for the purpose of ensuring compliance with the Company’s continuous disclosure obligations; and The Board has adopted a corporate governance manual which contains other policies and procedures to assist the Company to establish and maintain its governance practices. The Company has formalised its approach to risk management by documenting all material business risks in a risk register and allocating ownership for material business risks to the Managing Director and management of individual material business risks to senior management and individuals within the organisation. The risk register is regularly reviewed by management and updated and presented to the Board. All risks identified in the risk register are reviewed and assessed by management and the Board on a regular basis. A summary of the Risk Management Policy is available on the Company’s website. Principle 8 – Remunerate fairly and responsibly Recommendation 8.1 The Board has established a Remuneration Committee comprising its three independent non-executive directors; Alan Senior (Chair), Karen Gadsby and Brian Dawes. The Remuneration Committee is structured in compliance with Recommendation 8.1. Details of director attendance at Remuneration Committee meetings during the Reporting Period are set out in a table in the Directors’ Report on page 28 of the Company’s 2015 Annual Report. The Board has adopted a Remuneration Committee Charter, which describes the role, composition, functions and responsibilities of the Remuneration Committee, a copy of which is available on the Company’s website. Recommendation 8.2 The Company’s Remuneration Policy, a copy of which is available on the Company’s website, details the Company’s policies and practices regarding the remuneration of nonexecutive directors, executive directors and other senior executives. The Remuneration Policy includes a summary of the Company’s policies regarding the reduction, cancellation or clawback of options in the event of serious misconduct. Whilst the Company retains the ability to pay a discretionary performance-related bonus to senior executives, it has not paid performance-based remuneration since the financial year Talisman Mining Limited Corporate Governance Statement 8 end 30 June 2010. The Company will give consideration to such appropriate policies regarding the deferral and clawback of performance-based remuneration should performance-based remuneration be considered in the future. Details of remuneration received by directors and key management personnel during the year ended 30 June 2015 are contained in the “Remuneration Report” which forms of part of the Directors’ Report and commences at page 28 of the Company’s 2015 Annual Report. Recommendation 8.3 The Company's Remuneration Policy includes a statement of the Company's policy on prohibiting participants in the Company’s Executive and Employee Option Plan (EEOP) entering into transactions (whether through the use of derivatives or otherwise) which limit the economic risk of participating in the Scheme. Talisman Mining Limited Corporate Governance Statement 9 1 Rules 4.7.3 and 4.10.3 Appendix 4G Key to Disclosures Corporate Governance Council Principles and Recommendations Name of entity Talisman Mining Limited ABN/ARBN Financial year ended 71 079 536 495 30 June 2015 Our corporate governance statement2 for the above period above can be found at:3 ☐ these pages of our annual report: _____________________________________________ ☒ this URL on our website: http://www.talismanmining.com.au/about-us/corporate-governance.html The Corporate Governance Statement is accurate and up to date as at 30 September 2015 and has been approved by the board. The annexure includes a key to where our corporate governance disclosures can be located. Date here: 30 September 2015 Sign here: _______________________________ Company secretary Print name: Daniel Madden 1 Under Listing Rule 4.7.3, an entity must lodge with ASX a completed Appendix 4G at the same time as it lodges its annual report with ASX. Listing Rule 4.10.3 requires an entity that is included in the official list as an ASX Listing to include in its annual report either a corporate governance statement that meets the requirements of that rule or the URL of the page on its website where such a statement is located. The corporate governance statement must disclose the extent to which the entity has followed the recommendations set by the ASX Corporate Governance Council during the reporting period. If the entity has not followed a recommendation for any part of the reporting period, its corporate governance statement must separately identify that recommendation and the period during which it was not followed and state its reasons for not following the recommendation and what (if any) alternative governance practices it adopted in lieu of the recommendation during that period. Under Listing Rule 4.7.4, if an entity chooses to include its corporate governance statement on its website rather than in its annual report, it must lodge a copy of the corporate governance statement with ASX at the same time as it lodges its annual report with ASX. The corporate governance statement must be current as at the effective date specified in that statement for the purposes of rule 4.10.3. 2 “Corporate governance statement” is defined in Listing Rule 19.12 to mean the statement referred to in Listing Rule 4.10.3 which discloses the extent to which an entity has followed the recommendations set by the ASX Corporate Governance Council during a particular reporting period. 3 Mark whichever option is correct and then complete the page number(s) of the annual report, or the URL of the web page, where the entity’s corporate governance statement can be found. 1 ANNEXURE – KEY TO CORPORATE GOVERNANCE DISCLOSURES Corporate Governance Council recommendation We have followed the recommendation in full for the whole of the period above. We have disclosed … We have NOT followed the recommendation in full for the whole of the period above. We have disclosed … PRINCIPLE 1 – LAY SOLID FOUNDATIONS FOR MANAGEMENT AND OVERSIGHT 1.1 A listed entity should disclose: … the fact that we follow this recommendation: ☐ (a) the respective roles and responsibilities of its board and management; and ☒ ☐ an explanation why that is so in our Corporate Governance Statement OR ☐ we are an externally managed entity and this recommendation is therefore not applicable (b) those matters expressly reserved to the board and those delegated to management. in our Corporate Governance Statement OR at this location: _____________________________________________ Insert location here … and information about the respective roles and responsibilities of our board and management (including those matters expressly reserved to the board and those delegated to management): ☒ at this location: http://www.talismanmining.com.au/images/files/corporategovernance/Board-Charter.pdf 1.2 A listed entity should: … the fact that we follow this recommendation: ☐ (a) undertake appropriate checks before appointing a person, or putting forward to security holders a candidate for election, as a director; and ☒ ☐ an explanation why that is so in our Corporate Governance Statement OR ☐ we are an externally managed entity and this recommendation is therefore not applicable … the fact that we follow this recommendation: ☐ ☒ ☐ an explanation why that is so in our Corporate Governance Statement OR ☐ we are an externally managed entity and this recommendation is therefore not applicable A listed entity should have a written agreement with each director and senior executive setting out the terms of their appointment. at this location: _____________________________________________ (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. 1.3 in our Corporate Governance Statement OR Insert location here in our Corporate Governance Statement OR at this location: _____________________________________________ Insert location here 2 Corporate Governance Council 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. We have followed the recommendation in full for the whole of the period above. We have disclosed … We have NOT followed the recommendation in full for the whole of the period above. We have disclosed … … the fact that we follow this recommendation: ☐ ☒ ☐ an explanation why that is so in our Corporate Governance Statement OR ☐ we are an externally managed entity and this recommendation is therefore not applicable ☒ an explanation why that is so in our Corporate Governance Statement in our Corporate Governance Statement OR at this location: _____________________________________________ Insert location here 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: (1) 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 (2) 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. … the fact that we have a d