TIDMOEX
RNS Number : 5750Q
Oilex Ltd
13 September 2017
OILEX LTD (ABN 50 078 652 632)
Corporate Governance Statement
Approach to Corporate Governance
Oilex Ltd ABN 50 078 652 632 (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 recommendations set out
in the ASX Corporate Governance Council's Corporate Governance
Principles and Recommendations 3(rd) edition (Principles &
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.oilex.com.au, under the section marked
"Corporate Governance":
Charters
Board
Audit and Risk Committee
Nomination and Remuneration Committee
Policies and Procedures
Process for Performance Evaluations
Policy and Procedure for the Selection and (Re)Appointment of
Directors
Induction Program
Procedure for the Selection, Appointment and Rotation of
External Auditor
Code of Conduct (summary)
Diversity Policy (summary)
Policy on Continuous Disclosure (summary)
Compliance Procedures (summary)
Risk Management Policy
Shareholder Communication and Investor Relations Policy
Securities Trading Policy
Whistleblower Policy
Anti-bribery and Corruption Policy
The Company reports below on whether it has followed each of the
recommendations during the year ended 30 June 2017 (Reporting
Period). The information in this statement is current at 11
September 2017. This statement was approved by a resolution of the
Board on 11 September 2017.
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, which is disclosed 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 re-elect a director.
Appropriate checks were undertaken before Paul Haywood was
appointed to the Board as a non-executive director on 29 May 2017.
The Company provided shareholders with all material information in
relation to the election of Bradley Lingo as a director at its 2016
Annual General Meeting.
Recommendation 1.3
The Company has, and had during the Reporting Period, a written
agreement with each non-executive director and each senior
executive setting out the terms of their appointment.
Recommendation 1.4
The Company Secretary is accountable directly to the Board,
through the Chairman, on all matters to do with the proper
functioning of the Board as outlined in the Company's Board
Charter. The Company's Secretary's role is also outlined in the
employment agreement between the Company Secretary and the
Company.
Recommendation 1.5
The Company has a Diversity Policy, which includes 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. A summary of the Company's
Diversity Policy is disclosed on the Company's website.
The following measurable objectives for achieving gender
diversity have been set by the Board:
Measurable objective Progress made towards achieving
measurable objectives during
the Reporting Period
----------------------------- ---------------------------------
Increase the overall The Company has reduced employee
percentage of females numbers during the reporting
employed by the Company period as part of its cost
to 20%. reduction strategy. After
the reduction 19% of the
Company's employees as at
30 June 2017 were female,
an increase of 3% over June
2016.
----------------------------- ---------------------------------
At least one female In its search for an additional
candidate to be considered non-executive director, the
when the Board is next Company requested that female
appointing a director. candidates were presented
and one female candidate
was interviewed.
----------------------------- ---------------------------------
When recruiting senior The Company did not recruit
and technical roles, for any senior or technical
at least one female roles in the Reporting Period.
candidate to be considered.
----------------------------- ---------------------------------
The respective proportions of men and women on the Board, in
senior executive positions and across the whole organisation are
set out in the following table. Senior executive for these purposes
means those employees that report directly to the Managing
Director:
Proportion of women
-------------------------------------------------------- -----------------------------
Whole organisation Six out of thirty one (19%)
-------------------------------------------------------- -----------------------------
Three out of nineteen (16%)
* Administration and operations support
-------------------------------------------------------- -----------------------------
Zero out of three (0%)
* Professional specialty - technical
-------------------------------------------------------- -----------------------------
Three out of seven (43%)
* Professional specialty - finance/commercial
-------------------------------------------------------- -----------------------------
Six out of twenty nine (21%)
* Total employees
-------------------------------------------------------- -----------------------------
Zero out of two (0%)
* Senior executive positions
-------------------------------------------------------- -----------------------------
Board Zero out of four (0%)
-------------------------------------------------------- -----------------------------
Recommendation 1.6
Evaluations of the Board and individual directors for the
reporting period ended 30 June 2016 were undertaken during the
Reporting Period (in July 2016) in accordance with the process set
out in the Company's Process for Performance Evaluations except
that the Chair used the services of an independent third-party
facilitator to evaluation the performance and competencies of the
Board and the Chair. Each Board member completed a Board skills
questionnaire, the responses to each of the questionnaires were
summarised and collated by the facilitator. The facilitator also
conducted individual director interviews, with specific attention
on the areas of governance and leadership. The facilitator reported
back to the Board on 24 August 2016, and the Board reviewed and
discussed the responses, recommendations and addressed issues as
required.
In July, August and September 2017, evaluations of the Board and
individual directors (including the Chairman and Managing Director,
but excluding non-executive director Paul Haywood) were undertaken
in relation to the Reporting Period, and were conducted in
accordance with the process disclosed in the Company's Process for
Performance Evaluations. The evaluations for the Reporting Period
were not undertaken during the Reporting Period due the Chairman's
travel commitments. Mr Haywood's performance was deferred until the
next round of evaluations, given his recent appointment to the
Board.
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.
During the Reporting Period, the Managing Director undertook an
evaluation of senior executives. The evaluations were carried out
in accordance with the process disclosed in the Company's Process
for Performance Evaluations.
Principle 2 - Structure the Board to Add Value
Recommendation 2.1
The Board has not established a separate Nomination Committee.
Given the size and composition of the Board, the Board considers
that there are no efficiencies to be gained by having a separate
Nomination Committee, and accordingly the role is performed by the
Board. The Board had adopted a Nomination and Remuneration
Committee Charter, which describes the role, composition, functions
and responsibilities of the committee. The Nomination and
Remuneration Committee Charter is disclosed on the Company's
website.
Items that are usually required to be discussed by a Nomination
and Remuneration Committee are marked as separate agenda items at
Board meetings when required, and when the Board convenes as a
Nomination and Remuneration Committee, it carries out those
functions which are delegated to it in the Nomination and
Remuneration Committee Charter. These functions include addressing
Board succession issues, and ensuring that the Board has the
appropriate balance of skills, knowledge, experience, independence
and diversity to enable it to discharge its duties and
responsibilities effectively. The functions also include fulfilling
the Board's corporate governance responsibilities with respect to
remuneration by reviewing the Company's remuneration policy, senior
executives' remuneration and incentives, the remuneration framework
for directors and remuneration related reporting requirements. The
Board deals with any conflicts of interest that occur when it
performs the functions of a Nomination and Remuneration Committee
by ensuring that any director with a conflicting interest is not
party to the relevant discussions.
Recommendation 2.2
During the Reporting Period, the Board, with the assistance of
the independent third-party facilitator, evaluated the Board's
skills and diversity to identify the priority skill set it is
wishes to see represented in its membership. The following skills
were identified, which reflect the Company's focus on its assets
located around the Indian Ocean rim, with a particular focus on
applying tight oil/tight gas technologies from North America into
the Cambay Field in Gujarat, India:
-- International oil and gas industry experience.
-- Capital markets experience.
-- Corporate and commercial skills.
-- Legal.
-- Strategic Human Resources.
-- Strategic Information Technology.
-- Strategic Marketing.
Whilst the Board possesses some of these skills, the Board is
looking to appoint an additional non-executive director and who may
potentially chair the Board. This person will have significant
public company experience in the junior oil and gas resources
sector, be independent and possess the strategic skills the Board
is seeking.
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 Board considers the independence of each of
its non-executive directors at least annually.
The following table sets out the directors during the Reporting
Period, and their independence status:
Director Independent (Yes/No) Date of appointment/length
If no, reason. of service
------------- ------------------------------ ---------------------------
Max Cozijn No, due to his length 3 June 1997
of service as a director Company listed
of the Company, and on ASX October
additional director 2003
fees that he has received
for services performed
outside the scope of
his ordinary duties
as a non-executive director.
However, the Board considers
that Mr Cozijn acts
Independently in the
discharge of his duties
as a non-executive director.
------------- ------------------------------ ---------------------------
Jonathan No, Managing Director. 29 November 2015
Salomon (appointed Managing
Director on 18
March 2016)
------------- ------------------------------ ---------------------------
Bradley Yes 11 February 2016
Lingo
------------- ------------------------------ ---------------------------
Paul Haywood Yes 29 May 2017
------------- ------------------------------ ---------------------------
Recommendation 2.4
The Board does not have a majority of directors who are
independent, but does have equal numbers of independent and
non-independent directors. The Board considers that its current
composition is an appropriate mix of skills and experience relevant
to the Company's business. The Board did appoint Paul Haywood on 29
May 2017, who is an independent non-executive director. In
addition, the Company is seeking to appoint an additional
non-executive independent director to potentially chair the
Board.
Recommendation 2.5
For the period 1 July 2016 to 23 February 2017, the Chairman of
the Board was Max Cozijn, who is not an independent director for
the reasons outlined above in relation to Recommendation 2.3. The
Board considered that Max Cozijn was the most appropriate person to
chair the Board, notwithstanding that he is not an independent
director, due to his extensive industry and Australian public
company director experience.
However, the position of chairman was reviewed by the Board, and
in particular the importance of having an independent director as
its chair, and on 23 February 2017 the Board appointed Bradley
Lingo as its Chairman. The Company has initiated a formal search
process to identify a potential new Chair.
Both Mr Cozijn and Bradley Lingo are not also the Company's
Managing Director.
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 decision-making at the earliest
opportunity. The Company's Induction Program is disclosed on the
Company's website.
The Board, performing the functions of 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 effectively. Where any gaps are identified, the Board
considers what training or development should be undertaken to fill
those gaps. In particular, the Board 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 education on relevant 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. The Company has also established a
Whistleblower Policy (disclosed on the Company's website) to
encourage the reporting of violations (or suspected violations) of
the Code of Conduct and provide effective protection from
victimisation or dismissal to those reporting by implementing
systems for confidentiality and report handling.
The Company has also established an Anti-bribery and Corruption
Policy, which sets out the Company's policy and approach to bribery
and corruption. This policy is also disclosed on the Company's
website.
Principle 4 - Safeguard Integrity in Corporate Reporting
Recommendation 4.1
The Board has not established a separate Audit Committee, having
resolved that it would perform the function of an Audit and Risk
Committee. The Board has adopted an Audit and Risk Committee
Charter, which describes the role, composition, functions and
responsibilities of the Board in its capacity as the committee, and
which is disclosed on the Company's website. Items that are usually
required to be discussed by an Audit and Risk Committee are marked
as separate agenda items at Board meetings when required, and when
the Board convenes as the Audit and Risk Committee, it carries out
those functions which are delegated to it in the Audit and Risk
Committee Charter. These functions include reviewing the adequacy
of the Company's corporate reporting processes, and reviewing
whether the Company's financial statements reflect the
understanding of the Board members, and otherwise provide a true
and fair view of, the financial position and performance of the
Company. The functions also include reviewing the adequacy of the
Company's processes for managing risk. The Board deals with any
conflicts of interest that occur when it perms the functions of an
Audit and Risk Committee by ensuring that any director with a
conflicting interest is not party to the relevant discussions.
Details of the relevant qualifications and experience of the
members of the Board are set out in the Directors' Report on pages
14 to 15 of the Company's Financial Report for year ended 30 June
2017.
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 2016, for each of the quarters
ending 30 September 2016, 31 December 2016, 31 March 2017 and 30
June 2017 and for the full-year ended 30 June 2017 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, and must 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
Chairman 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 Chairman 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.
Mr Graham Hogg, a representative of the Company's auditor KPMG,
attended the Company's annual general meeting held on 23 November
2016.
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 Policy on Continuous
Disclosure and Compliance Procedures are disclosed on the Company's
website.
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.oilex.com.au as set out in its
Shareholder Communication and Investor Relations Policy, which is
disclosed 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, which is disclosed on
the Company's website.
Recommendation 6.3
During the Reporting Period, the Company had 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 are given the option to receive communications
from, and send communications to, the Company and its share
registry electronically. New shareholders are mailed a
communication form providing a choice of communication, either
electronic or hard copy. Existing shareholders can amend their form
of communication at any time. Shareholders can also subscribe via
the Company's website to receive the Company's announcements made
to ASX by email.
Principle 7 - Recognise and Manage risk
Recommendation 7.1
The Board has not established a separate Risk Committee, having
resolved that it would perform the function of an Audit and Risk
Committee. Please refer to the disclosure under the heading
"Recommendation 4.1" in relation to the Board performing the
function of the Audit and Risk Committee.
Recommendation 7.2
During the Reporting Period, the Board reviewed the Company's
risk management framework to satisfy itself that it continued 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.
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.
Recommendation 7.4
The Company has material exposure to the following economic,
environmental and/or social sustainability risks:
Risk How risk is managed/intended
to be managed
------------------------ ------------------------------------------
Health and safety Oilex is committed to protecting
management the health and safety of everybody
who plays a part in its operations
or lives in the communities where
the Company operates. Oilex has
implemented a HSES framework
that promotes responsibility
and accountability within the
Company for health and safety
matters.
------------------------ ------------------------------------------
Environmental Oilex has an active program of
education, monitoring and reporting
within the business to identify
and mitigate environmental risks.
------------------------ ------------------------------------------
Future funding Funding requirements are reviewed
on a regular basis through internal
cash flow models and scenario
analysis. Alternative funding
options are identified and reviewed
on a regular basis.
------------------------ ------------------------------------------
Commodity Pricing The Company's ability to secure
funding is partially impact by
prevailing commodity prices.
The Company adjusts its work
programmes and budgets to ensure
it is aligned with its capacity
to secure the necessary funding.
------------------------ ------------------------------------------
Joint Venture Alignment The Company is in continuous
discussions with its Joint Venture
Partner working towards the approval
and funding of the work programmes
and budgets. As the operator
of several PSCs, the Company
is liable for expenditure commitments
and accordingly, may be required
to fund the unpaid cash calls
by its joint venture partners.
------------------------ ------------------------------------------
Cambay Production The Company intends to submit
Sharing Contract in September 2017, an application
Extension to the Government of India (GOI),
for an extension to the Cambay
PSC for up to ten years. The
extension is subject to approval
by the GOI and accordingly cannot
be assured.
------------------------ ------------------------------------------
Delays to schedule Oilex regularly reviews and updates
work programmes and plans to
ensure critical path items are
identified and appropriate contingencies
are in place to manage schedule
risk.
------------------------ ------------------------------------------
Regulatory framework The Company continually liaises
with governments, employs staff,
consultants and specialists experienced
in operating within the relevant
regulatory and commercial environment
for each jurisdiction.
------------------------ ------------------------------------------
Exploration risk The Company utilises the services
of suitably qualified personnel
and consultants, appropriate
systems and reviews all available
material data prior to undertaking
any substantial exploration activities.
------------------------ ------------------------------------------
The Managing Director has responsibility for identifying,
assessing, monitoring and managing risks. The Managing Director is
also responsible for identifying any material changes to the
Company's risk profile and ensuring, with approval of the Board,
the risk profile of the Company is updated to reflect any material
change.
The Managing Director is to report to the Board as to the
effectiveness of the Company's management of its material business
risks, at least annually. During the Reporting Period, the reports
were provided quarterly.
Principle 8 - Remunerate Fairly and Responsibly
Recommendation 8.1
The Board has not established a separate Remuneration Committee,
having resolved that it would perform the function of a Nomination
and Remuneration Committee. Please refer to the disclosure under
the heading "Recommendation 2.1" in relation to the Board
performing the function of a Nomination and Remuneration
committee.
Recommendation 8.2
Details of remuneration, including the Company's policy on
remuneration and "clawback policy" regarding the deferral of
performance-based remuneration and the reduction, cancellation or
clawback of the performance-based remuneration in the event of
serious misconduct or a material misstatement in the Company's
financial statements, are contained in the "Remuneration Report"
which forms of part of the Directors' Report and commences at page
21 of the Company's Financial Report for year ended 30 June
2017.
Recommendation 8.3
The Company does not currently have an equity based remuneration
scheme in place.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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