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Millennium Minerals Limited

Corporate Governance

This statement outlines the main corporate governance practices in place throughout the year, which comply with the ASX Corporate Governance Council recommendations unless otherwise stated.

Role of the Board
The Board is responsible for ensuring that the Company is managed in a manner which protects and enhances the interests of its shareholders and takes into account the interests of all stakeholders.  To fulfil this role, the Board is responsible for setting the strategic directions for the Company, establishing goals for management and monitoring the achievement of these goals.

Because of the limited size of the Company and its financial affairs and operations, the use of separate committees of the Board of Directors is not considered generally appropriate. All matters that might properly be dealt with by such committees are currently dealt with by the full Board of Directors. Decisions of the Board are, to the extent practicable, unanimous.

Composition of the Board
The names and details of the Directors of the Company in office at the date of this Statement are set out in the Directors’ Report.

The composition of the Board is determined using the following principles:

  • Persons nominated as Non-Executive Directors shall be expected to have skills, experience and expertise of benefit to the Company and to bring an independent view to the Board’s deliberations. Persons nominated as Executive Directors must be of sufficient stature and security of employment to express independent views on any matter.
  • The Chairperson should ideally be non-executive and independent and be elected by the Board based on his/her suitability for the position. The Board believes that the Chairperson is able and brings quality and independent judgment to all relevant issues falling within the scope of the role of a Chairperson and remains up-to-date with current issues facing the Company by frequent contact with the Managing Director and executive of the Company.
  • All Non-Executive Directors are expected voluntarily to review their membership of the Board from time-to-time taking into account length of service, age, qualifications and expertise relevant to the Company’s then current policy and programme, together with the other criteria considered desirable for composition of a balanced Board and the overall interests of the Company.
  • Under the Company's Constitution, the minimum number of Directors is three. At each Annual General Meeting, one third of the Directors (excluding the Managing Director) must resign, with Directors resigning by rotation based on the date of their appointment.  Directors resigning by rotation may offer themselves for re-election.

The Board has accepted the following definition of an Independent Director:

“An Independent Director is a Director who is not a member of management (a Non-Executive Director) and who:

  • is not a substantial shareholder of the Company or an officer of, or otherwise associated, directly or indirectly, with a substantial shareholder of the Company;
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  • has not within the last three years been employed in an executive capacity by the Company or another group member, or been a Director after ceasing to hold any such employment;
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  • is not a principal of a professional adviser to the Company or another group member;
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  • is not a significant consultant, supplier or customer of the Company or another group member, or an officer of or otherwise associated, directly or indirectly, with a significant consultant, supplier or customer;
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  • has no significant contractual relationship with the Company or another group member other than as a Director of the Company;
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  • has not served on the Board for a period which could, or could reasonably be perceived to, materially interfere with the Director’s ability to act in the best interests of the Company; and
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  • is free from any interest and any business or other relationship which could, or could reasonably be perceived to, materially interfere with the Director’s ability to act in the best interests of the Company.”
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Millennium considers a significant consultant, supplier or customer to be material if the total of their annual invoices amounts to more than 5% of the Company’s total expenditure in that category.

Consistent with the Corporations Law the Company considers that the Board should have at least three Directors and strives to have a majority if Independent Directors.  Currently the Board has five directors, three are non-executives.  Messrs Donner and Gillon are not considered to be independent as Mr Donner is an officer of a substantial shareholder and Mr Gillon he is a principal of a professional advisor to the Company.  Mr Eldridge is considered to be independent of Millennium.  The number of Directors is maintained at a level which optimises the spread of the workload and efficient decision making.

The composition of the Board is reviewed on an annual basis to ensure the Board has the appropriate mix of expertise and experience.  Where a vacancy exists, through whatever cause, or where it is considered that the Board would benefit from the services of a new Director with particular skills, the Board determines the selection criteria for the position based on the skills deemed necessary for the Board to best carry out its responsibilities and then appoints the most suitable candidate who must stand for election at the next general meeting of shareholders.

Performance of Directors

The performance of Directors is assessed through review by the Board as a whole of director’s attendance at and involvement in Board meetings, his performance and other matters identified by the Board or other directors.  Due to the Board’s assessment of the effectiveness of these processes, the Board has not otherwise formalised measures of a director’s performance.

The Company has not conducted a performance evaluation of the members of the Board during the reporting period, however the Board conducts a review of the performance of the Company against budgeted targets on an ongoing basis.

Conflict of Interest

In accordance with the Corporations Act 2001 and the Company’s constitution, Directors must keep the Board advised, on an ongoing basis, of any interest that could potentially conflict with those of the Company.  Where the Board believes a significant conflict exists, the Director concerned does not receive the relevant Board papers and is not present at the Board meeting whilst the item is considered.  Details of Directors related entity transactions with the Company are set out in the related parties note in the financial statements.

Independent Professional Advice and Access to Company Information

Each Director has the right of access to all relevant Company information and to the Company’s executives and, subject to prior consultation with the Chairman, may seek independent professional advice at the Company’s expense.  A copy of advice received by the Director is made available to all other members of the Board.

Remuneration

The Board of Directors maintains remuneration policies which are aimed at attracting and retaining a motivated workforce and management team. The intention is to match the outcomes from the remuneration system with the performance of the Company and ultimately the value received by our shareholders on a long-term basis.

The Company embodies the following principles in its remuneration framework:

  • retention and motivation of key executives;
  • attraction of quality management to the Company; and
  • performance incentives which allow executives to share the rewards of the success of the Company.

Full details of Directors’ and specified executives’ remuneration is set out in the Directors’ Report and in the Directors’ and Executives’ Disclosures note in the financial statements.

Due to the limited size of the Company and of its operations and financial affairs, the use of a separate remuneration committee is not considered appropriate for Millennium. 

Committees

To assist the Board in achieving the highest standards of Corporate Governance, the Directors will aim in due course to establish an Audit Committee, and a Remuneration Committee, both to be constituted with a majority of non-executive Directors.

Audit Committee: Millennium did not have a separately established audit committee.  However, the duties and responsibilities typically delegated to such a committee are expressly included in the board’s responsibilities and therefore were not in compliance with item 4.2 of the ASX Corporate Governance Principles.  The Board does not believe any marked efficiencies or enhancements would be achieved by the creation of a separate committee.  An Audit Committee Charter is currently being planned.

Remuneration Committee: Recommendation 9.2 of the ASX Corporate Governance Principles requires the establishment of a remuneration committee.  During the year, Millennium did not have a separately established remuneration committee.  However, the duties and responsibilities typically delegated to such a committee are expressly included in the main board’s responsibilities.  The Board does not believe that any marked efficiencies or enhancements would be achieved by the creation of a separate committee.

Ethics

It is the policy of Millennium that all Directors, managers and employees are expected to act with the utmost integrity and objectivity, striving at all times to enhance the reputation and performance of Millennium.

Risk Management

The Company has in place a framework to safeguard company assets and ensure that business risks are identified and properly managed.  The Company has in place a number of risk management controls which include the following:

  • Performance and funding of exploration activities;
  • Budget controls;
  • Guidelines and limits for the approval of capital expenditure and investments;
  • A comprehensive insurance programme;
  • Status of Mining Tenements; and
  • Continuous disclosure obligations.

Management is required to provide to the Board regular reports on all these matters.

The Board receives regular reports about the financial condition and operating results of the Company.  The Chief Executive Officer and Chief Financial Officer annually provide a formal statement to the Board that in ll material respects and to the best of their knowledge and belief:

  • The Company’s financial reports present a true and fair view of the Company’s financial condition and operational results and are in accordance with relevant accounting standards; and
  • The Company’s risk management and internal control systems are sound, appropriate and operating efficiently and effectively.

Group Strategic Planning

The Company has adopted a formal and dynamic process of strategic planning.  The Board reviews and endorses strategies designed to ensure the long term successful outcome for the Company.

Trading in the Company’s Securities by Directors and Employees

The Board has adopted a policy in relation to dealings in the Company’s securities which applies to all directors and employees.  Under the policy, directors are prohibited from short term or “active” trading in the Company’s securities and directors and employees are prohibited from dealing in the Company’s securities whilst in possession of price sensitive information.  The Chairman or Company Secretary must be notified of any proposed transaction.

Role of Shareholders

The shareholders of the Company play an important role in corporate governance by virtue of their responsibilities for voting on the appointment of directors.

The Board ensures that shareholders are kept fully informed on developments affecting the Company through:

  • The Annual Report and Millennium newsletters are distributed to shareholders;
  • Compliance with Australian Stock Exchange’s continuous disclosure requirements (and subsequent shareholder announcements); and
  • The annual general meeting and other meetings called to obtain approval for Board action.