Corporate Governance

The Board of Directors of Indo Gold Ltd (IGL) is responsible for corporate governance and strives for high standards in this regard. The Board monitors the business and affairs of IGL on behalf of the shareholders to whom they are accountable. The Board draws on relevant best practice principles, but it is aware that there may be some instances where compliance is not practicable for a company of IGL’s size.

The following paragraphs set out IGL’s position relative to a number of principles to which it aspires.

1: Lay solid foundations for management and oversight
IGL has not yet formalised or disclosed the functions reserved to the Board and those delegated to management. However, IGL has a small Board of four Directors (two Non-Executive Directors, the Executive Chairman and an Executive Director/Company Secretary) and a small team of professionals, so roles and functions have to be flexible to meet specific needs.

2: Structure the Board to add value
IGL has a Board composed equally of Executive and Non-Executive Directors. Both Non Executive Directors have wide commercial experience in a number of enterprises and bring impartial and focussed advice to Board deliberations.

3: Promote ethical and responsible decision-making
IGL does not have a policy concerning trading in its securities by Directors, management and staff since it is still unlisted on any securities exchange. Neither does it have a formal code of conduct, again reflecting IGL’s size and the close interaction of individuals throughout the organisation.

4: Safeguard integrity in financial reporting
IGL has its own financial accountant who manages and prepares all financial information within Australia. This person also monitors and liaises with the financial accountants of IGL’s subsidiaries in India. Consolidated accounts are prepared by an external accountant in liaison with IGL’s accountant and the accountants of its Indian subsidiaries. These financial statements are then audited by an external auditor. Prior to submission to the external auditor the Executive Chairman and the Executive Director/Company Secretary review and approve the financial statements. The external auditor confirms in writing that IGL’s financial reports represent a true and fair view, in all material respects, of its financial condition and operational results, and are in accordance with relevant accounting standards. The auditor also comments on whether or not the financial reports are based on a sound system of risk management and internal control and whether the system is operating efficiently and effectively.

IGL does not at this stage have an Audit Committee because of its size and unlisted stature.

5: Make timely and balanced disclosure
Because of its unlisted nature, IGL has no requirement to make timely and balanced disclosures to the market. However, its shareholders are kept fully informed of all relevant matters affecting its operations through regular shareholder newsletters. IGL has no policy in this matter, instead relying upon strong informal systems underpinned by experienced individuals.

6: Respect the rights of shareholders
IGL communicates regularly with its shareholders through newsletters and on occasions through personal or telephonic contact with individual shareholders. Through this means IGL is able to keep its shareholders fully informed of all relevant matters affecting IGL.

7: Recognise and manage risk
IGL is a small, exploration company and does not believe that at this stage there is significant need for formal policies on risk oversight and management of risk, although these issues are actively considered at all times in IGL’s activities. Risk management arrangements are the responsibility of the Board of Directors and senior management collectively. Risk Factors, where relevant, will be an agenda item for Board meetings. IGL has an Occupational Health and Safety policy with which all of IGL’s staff, contractors and consultants must comply.

8: Encourage enhanced performance
IGL does not have a Remuneration Committee to review performance matters and remuneration. However, the Executive Chairman and the Executive Director/Company Secretary work closely with management on performance and remuneration matters and make recommendations to the IGL Board as appropriate.

9: Remunerate fairly and responsibly
The Directors believe that the size of IGL makes individual salary and consultant negotiations more appropriate than formal remuneration policies. Where appropriate IGL will seek independent external advice and make market comparisons as necessary. IGL does not have an Employee Share Option Plan, but issue of share options can be made after full discussion and disclosure to the IGL Board.

10: Recognise the legitimate interests of stakeholders
Due to IGL’s size and relative level of operational activity it makes legal compliance a less onerous task than with larger companies. IGL does not have a formal code of conduct to guide compliance with legal and other obligations. However, the IGL Board continues to review the situation to determine, where necessary, the most appropriate and effective operational procedures.

11: Ethical Standards
The IGL Board policy is for the Directors and management to conduct themselves with the highest ethical standards. All Directors and employees are expected to act with integrity and objectivity, striving at all times to enhance IGL’s reputation and performance.