Cullen Resources Limited - Corporate Governance

ASX Core Principles of Corporate Governance and ASX Guidelines

In recognising the need for the highest standards of corporate behaviour and accountability, the directors of Cullen Resources Limited (“the Company”) have adhered to the principles of corporate governance and this statement outlines the main corporate practices in place throughout the financial year. The ASX Corporate Governance Council has released revised Corporate Governance Principles and Recommendations – 4^thEdition. Having regard to the size of the Company and the nature of its enterprise, it is considered that the Company complies as far as possible with the spirit and intentions of the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations as set out below. Unless otherwise stated, the practices were in place for the entire year.

Under ASX listing rules, listed companies are required to provide a statement in their annual reports outlining the extent to which they have followed these best practice guidelines.

ASX Principle 1: Lay Solid Foundations for Management and Oversight

ASX Recommendation 1.1
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.
Comment/Response by Company
The Board is comprised of an Independent Non Executive Chairman, one Executive Director and one Non Executive Director. Management of the company is carried out by an Executive Director with little or no delegation to staff. The full board meets on a regular basis for both management and board meetings.

ASX Recommendation 1.2
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 its possession relevant to a decision on whether or not to elect or re-elect a director.
Comment/Response by Company
When the need for a new director is identified, selection is based on the skills and experience of prospective directors, having regard to the present and future needs of the Company. Any director so appointed must then stand for election at the next Annual General Meeting of the Company and information is provided with the Notice of Meeting.

ASX Recommendation 1.3
A listed entity should have a written agreement with each director and senior executive setting out the terms of their appointment.
Comment/Response by Company
The Managing Director has an employment contract while the non- executive directors have letters of appointment.

ASX 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.
Comment/Response by Company
The Company secretary is directly accountable directly accountable to the Board, through the chair.

ASX Recommendation 1.5
A listed entity should:
(a) have and disclose a diversity policy;
(b) through its board or a 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:
(1) the measurable objectives set for that period to achieve gender diversity;
(2) the entity’s progress towards achieving those objectives; and
(3) 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 that Act.
Comment/Response by Company
In view of the size of the Company and the nature of its activities the Board has not yet established a diversity policy. However diversity is taken into consideration when the need for a new director is identified. The percentage of women in the company’s workforce and at Board and Management level is given at year end in the Annual Report.

ASX Recommendation 1.6
A listed entity should:
(a) have and disclose a process for periodically evaluating the performance of the board, its committees and individual directors; and
(b) disclose for each reporting period whether a performance evaluation has been undertaken in accordance with that process during or in respect of that period.
Comment/Response by Company
The Board ensures that the management team is suitably qualified and experienced to discharge their responsibilities, and assesses on an ongoing basis the performance of the management team, to ensure that management’s objectives and activities are aligned with the expectations and risks identified by the Board.

ASX Recommendation 1.7
A listed entity should:
(a) have and disclose a process for evaluating the performance of its senior executives; and
(b) disclose, in relation to each reporting period, whether a performance evaluation was undertaken in the reporting period in accordance with that process.
Comment/Response by Company
The Board ensures that the management team is suitably qualified and experienced to discharge their responsibilities, and assesses on an ongoing basis the performance of the management team, to ensure that management’s objectives and activities are aligned with the expectations and risks identified by the Board.

ASX Principle 2: Structure the Board to be Effective and Add Value

ASX Recommendation 2.1
The board of a listed entity should:
(a) have a nomination committee which:
(1) has at least three members, a majority of whom are independent directors; and
(2) is chaired by an independent director, and disclose:
(3) the charter of the committee;
(4) the members of the committee; and
(5) 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.
Comment/Response by Company
In view of the size of the Company and the nature of its activities, the Board considered that establishing a formally constituted nomination committee would contribute little to its effective management.
The nomination of new directors is undertaken by the Board as a whole and any appointment is approved by a resolution of the Board. Where the Board considers that particular expertise or information is required, which is not available from within their number, appropriate external advice may be taken and reviewed prior to the final decision being made by the Board.
In view of the size of the company and the nature of its activities the Board considers that the current Board is a cost effective and practical method of directing and managing the company.

ASX Recommendation 2.2
A listed entity should have and disclose a board skills matrix setting out the mix of skills and diversity that the board currently has or is looking to achieve in its membership.
Comment/Response by Company
The Board ensures that the executive team and directors are suitably qualified and experienced to discharge their responsibilities. The Board takes into account the mix of skills of each of the directors.

ASX Recommendation 2.3
A listed entity should disclose:
(a) the names of the directors considered by the board to be independent directors;
(b) if a director has an interest, position, association or relationship of the type described in Box 2.3 but the board is of the opinion that it does not compromise the independence of the director, the nature of the interest, position, association or relationship in question and an explanation of why the board is of that opinion; and
(c) the length of service of each director.
Comment/Response by Company
The Company currently operates with five directors of which four are independent and this information is given in the annual report and on the website.
As stated above the company operates with an Independent Non – Executive Chairman, Managing Director and one non-executive Director. The Managing Directors fulfils the role of chief executive officer and is therefore not independent.

ASX Recommendation 2.4
A majority of the board of a listed entity should be independent directors.
Comment/Response by Company
Two of the three directors are independent therefore the majority of the directors are independent.

ASX Recommendation 2.5
The chair of the board of a listed entity should be an independent director and, in particular, should not be the same person as the CEO of the entity.
Comment/Response by Company
The Chairman is Independent and Non-Executive.

ASX Recommendation 2.6
A listed entity should have a program for inducting new directors and for periodically reviewing whether there is a need for existing directors to undertake professional development to maintain the skills and knowledge needed to perform their role as directors effectively.
Comment/Response by Company
In view of the size of the Company and the nature of its activities, the Board has considered that an informal code of conduct is appropriate to guide executives, management and employees in carrying out their duties and responsibilities.

ASX Principle 3: Instil a Culture of Acting Lawfully, Ethically and Responsibly

ASX Recommendation 3.1
A listed entity should articulate and disclose its values.
Comment/Response by Company
In view of the size of the Company and the nature of its activities, the Board has considered that an informal code of conduct is appropriate to guide executives, management and employees in carrying out their duties and responsibilities.

ASX Recommendation 3.2
A listed entity should:
(a) have and disclose a code of conduct for its directors, senior executives and employees; and
(b) ensure that the board or a committee of the board is informed of any material breaches of that code.
Comment/Response by Company
In view of the size of the Company and the nature of its activities, the Board has considered that an informal code of conduct is appropriate to guide executives, management and employees in carrying out their duties and responsibilities.

ASX Recommendation 3.3
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.
Comment/Response by Company
In view of the size of the Company and the nature of its activities, the Board has considered that a whistleblower policy is not appropriate.

ASX Recommendation 3.4
A listed entity should:
(a) have and disclose an anti-bribery and corruption policy; and
(b) ensure that the board or committee of the board is informed of any material breaches of that policy.
Comment/Response by Company
In view of the size of the Company and the nature of its activities, the Board has considered that a formal anti-bribery and corruption policy is not appropriate.

ASX Principle 4: Safeguard the Integrity of Corporate Reports

ASX Recommendation 4.1
The board of a listed entity should:
(a) have an audit committee which:
(1) has at least three members, all of whom are non-executive directors and a majority of whom are independent directors; and
(2) is chaired by an independent director, who is not the chair of the board, and disclose:
(3) the charter of the committee;
(4) the relevant qualifications and experience of the members of the committee; and
(5) 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.
Comment/Response by Company
Due to the size and nature of the company and its activities and the size and structure of the Board, the financial reports are dealt with in some detail at full board meetings where the Managing Director and Company Secretary/Financial Controller would report first hand to the full board. The Board also to a certain extent relies on the auditors to ensure compliance with relevant accounting standards and gives full and complete co-operation to its auditors without absolving itself of its responsibility. The full board takes responsibility for the accounts.

ASX Recommendation 4.2
The board of a listed entity should, before it approves the entity’s financial statements for a financial period, receive from its CEO and CFO a declaration that, in their opinion, the financial records of the entity have been properly maintained and that the financial statements 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.
Comment/Response by Company
The Company receives from the Managing Director and Company Secretary/Financial Controller the appropriate declaration that in their opinion that the financial records have been properly maintained and comply with the appropriate accounting standards.

ASX Recommendation 4.3
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.
Comment/Response by Company
The Company receives from the Managing Director and Company Secretary/Financial Controller the appropriate financial information for release to the market.

ASX Principle 5: Make Timely and Balanced disclosure

ASX Recommendation 5.1
A listed entity should:
(a) have and disclose a written policy for complying with its continuous disclosure obligations under the listing rule 3.1; and
(b) disclose that policy or a summary of it.
Comment/Response by Company
Due to its size and structure the Board is able to meet on a regular basis for both management and Board meetings to ensure compliance with ASX Listing Rule disclosure requirements. The full Board is accountable for ASX compliance and has in place written policies and procedures to ensure the Company complies with its obligations.

ASX Recommendation 5.2
A listed entity should ensure that its board receives copies of all material market announcements promptly after they have been made.
Comment/Response by Company
The Company Secretary distributes all material market announces to the Board following their release.

ASX Recommendation 5.3
A listed entity that gives a new and substantive investor analyst presentation should release a copy of the presentation material on the ASX Market Announcements Platform ahead of the presentation.
Comment/Response by Company
The Managing Director and Company Secretary ensure all presentation material is released ahead of the presentation.

ASX Principle 6: Respect the Rights of Security Holders

ASX Recommendation 6.1
A listed entity should provide information about itself and its governance to investors via its website.
Comment/Response by Company
Information is communicated to shareholders and the market through:
• The annual report which is distributed to all shareholders;
• Other periodic reports which are lodged with ASX and available for shareholder scrutiny;
• Other announcements made in accordance with ASX Listing Rules;
• Special purpose information memoranda issued to shareholders as appropriate; and
• The Annual general Meeting and other meetings called to obtain approval for board action as appropriate.
• The Company’s website

ASX Recommendation 6.2
A listed entity should have an investor relations program that facilitates effective two-way communication with investors.
Comment/Response by Company
This is facilitated on the Company’s website where shareholders and potential investors can be placed on distribution lists.

ASX Recommendation 6.3
A listed entity should disclose how it facilitates and encourage participation at meetings of security holders.
Comment/Response by Company
All documents called for the Annual General Meeting and other meetings called to obtain approval for board action as appropriate are sent to all shareholders by either by post or electronically and they are encouraged to attend the meeting or lodge proxies.

ASX Recommendation 6.4
A listed entity should ensure that all substantive resolutions at a meeting of security holders are decided by a poll rather than by a show of hands.
Comment/Response by Company
All substantive resolutions at a meeting of security holders are decided by a poll.

ASX Recommendation 6.5
A listed entity should give security holders the option to receive communications from, and send communications to, the entity and its security registry electronically.
Comment/Response by Company
All security holders can elect to receive communication by post or electronically by contacting the share registry.

ASX Principle 7: Recognise and Manage Risk

ASX Recommendation 7.1
The board of a listed entity should:
(a) have a committee or committees to oversee risk, each of which:
(1) has at least three members, a majority of whom are independent directors; and
(2) is chaired by an independent director, and disclose:
(3) the charter of the committee;
(4) the members of the committee; and
(5) as at the end of each reporting period, the number of times the committee met throughout the period and the individual attendances of the members at those meetings; OR
(b) if it does not have a risk committee or committees that satisfy (a) above, disclose that fact and the processes it employs for overseeing the entity’s risk management framework.
Comment/Response by Company
In view of the size of the Company and the nature of its activities, the Board has considered that establishing formally constituted committees would contribute little to its effective management.
Accordingly risk oversight and management issues and policies are reviewed by the Board as a whole and approved by resolution of the Board (with abstentions from relevant Directors where there is a conflict of interest).

ASX Recommendation 7.2
The board or a committee of the board should:
(a) review the entity’s risk management framework at least annually to satisfy itself that it continues to be sound and that the entity 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.
Comment/Response by Company
Due to the size and nature of the company and it’s activities and the size and structure of the Board, risk management and internal compliance and controls are dealt with by the full Board at its regular management and Board meetings. The non-executive directors meet face to face with senior staff individually on a regular basis to satisfy himself directly that risk management and internal compliance is being attended to.

ASX Recommendation 7.3
A listed entity should disclose:
(a) if it has an internal audit function, how the function is structured and what role it performs; OR
(b) if it does not have an internal audit function, that fact and the processes it employs for evaluating and continually improving the effectiveness of its governance, risk management and internal control processes.
Comment/Response by Company
The Company does not have an internal audit function.
Due to the size and nature of the company and it’s activities and the size and structure of the Board, risk management and internal compliance and controls are dealt with by the full Board at its regular management and Board meetings. The non-executive directors meet face to face with senior staff individually on a regular basis to satisfy himself directly that risk management and internal compliance is being attended to.

ASX Recommendation 7.4
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.
Comment/Response by Company
Due to the size and nature of the company and it’s activities and the size and structure of the Board any material exposure to economic, environmental and social sustainability are dealt with by the full Board at its regular management and Board meeting. Details of any material environmental matter which would have a materially adverse impact on the overall business are given in the Annual Report.

ASX Principle 8: Remunerate Fairly and Responsibly

ASX Recommendation 8.1
The board of a listed entity should:
(a) have a remuneration committee which:
(1) has at least three members, a majority of whom are independent directors; and
(2) is chaired by an independent director, and disclose:
(3) the charter of the committee;
(4) the members of the committee; and
(5) 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.
Comment/Response by Company
In view of the size of the Company and the nature of its activities, the Board has considered that establishing formally constituted remuneration committee would contribute little to its effective management.
The terms of engagement and remuneration of the executive director is reviewed periodically by the Board, with recommendations being made by the non-executive directors. Where the remuneration of a particular executive director is to be considered, the director concerned does not participate in the discussion or decision making.

ASX Recommendation 8.2
A listed entity should separately disclose its policies and practices regarding the remuneration of non-executive directors and the remuneration of executive directors and other senior executives.
Comment/Response by Company
The company does not have a remuneration policy other than to ensure that directors, staff and consultants are paid market rates in accordance with their qualifications, experience and contribution to the company. Directors’ remuneration for both executive and non-executive directors is compared to other “junior explorers” as a guide to industry rates.
Executive director is paid by salary and are governed by formal contract. Directors’ fees are paid separately to all non-executive directors. The different types of remuneration including fringe benefits, superannuation, consulting fees and directors’ fees are all clearly outlined in the Annual Report.

ASX Recommendation 8.3
A listed entity which has an equity-based remuneration scheme should:
(a) have a policy on whether participants are permitted to enter into transactions (whether through the use of derivatives or otherwise) which limit the economic risk of participating in the scheme; and
(b) disclose that policy or a summary of it.
Comment/Response by Company
The Company does not have an equity-based remuneration scheme.
No directors, executives or staff has any equity based remuneration other than options. In the past options have been issued to directors and these were approved at a shareholders meeting with a formal notice and explanatory memorandum where full details were disclosed to all shareholders for their approval and included in the annual report.

ASX Principle 9: Additional Recommendations that apply only in certain cases

ASX Recommendation 9.1
A listed entity with a director who does not speak the language in which board or security holder meetings are held or key corporate documents are written should disclose the processes it has in place to ensure the director understands and can contribute to the discussions at those meetings and understands and can discharge their obligations in relation to those documents.
Comment/Response by Company
All Directors are fluent in English.

ASX Recommendation 9.2
A listed entity established outside Australia should ensure that meetings of security holders are held at a reasonable place and time.
Comment/Response by Company
This does not apply to the Company as we are established in Australia.

ASX Recommendation 9.3
A listed entity established outside Australia, and an externally managed listed entity that has an AGM, should ensure that its external auditor attends its AGM and is available to answer questions from security holders relevant to the audit.
Comment/Response by Company
The Company is established in Australia and is not externally managed.