CORPORATE GOVERNANCE STATEMENT OF ROYALCO RESOURCES LIMITED A.C.N. 096 321 532

(ASX: RCO) PROVIDED PURSUANT TO ASX LISTING RULE 4.10.3

This Corporate Governance Statement (CGS) is provided by the Directors of Royalco Resources Limited A.C.N. 096 321 532 (RCO or the Company) pursuant to ASX Listing Rule 4.10.3 and reports against the ASX Corporate Governance Council's 'Corporate Governance Principles and Recommendations' 3rd Edition (the Recommendations) including the 8 principles and 29 specific recommendations included therein. Commencing from next year the Company expects that it will report against the 4th edition of the Recommendations even though they are not due to come into effect until RCO's financial year ending 30 June 2020. This CGS was approved by a resolution of the Board of the Company dated 8th October 2019 and is effective as at the same date and is in addition to and supplements the Company's Appendix 4G which is lodged with the ASX together with this CGS.

The Board as a whole recognises that best practice principles assist in its role of overseeing the Company's affairs. Given the size and structure of the Company, the nature of its business activities and the cost of strict and detailed compliance with all the Recommendations, the Board has adopted a range of modified systems, procedures and practices which it considers will enable it to meet the central Principles contained in the Recommendations. The Company's practices are broadly consistent with those set out in the Recommendations and, where they do not correlate with the Recommendations, the Company considers that its adopted practices are appropriate to it.

Principle 1 Recommendations:

Lay Solid Foundations for Management and Oversight

1.1

A listed entity should disclose:

(a) There was no formalisation and disclosure of separate functions between the Board and management

  1. the respective roles and responsibilities of its during the reporting period given that the Company only has 3 directors, no executives and no

board and management; and

management. As a result, and given the size of the Company the Board undertakes all roles normally

delegated to management.

(b) those matters expressly reserved to the board and

those delegated to management.

(b) The Board leads and oversees the management and direction of the Company. The Company's

Constitution (Rule 8.6) provides (in a manner similar to most listed companies), subject to the

Corporations Act, the ASX Listing Rules and the Constitution, the business of the Company shall be

managed by, or under the direction of, the Directors. Each of the Company's Directors puts in considerable

personal effort in running the Company well and efficiently, in working on seeking out appropriate various

corporate transactions and overseeing the strategic direction of the Company.

Given the above, any further formalisation of separate functions is deemed by the Board, at this stage, to be

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unnecessary during this period for the Company.

Specifically, the Board:

• defines and sets its business objectives and subsequently monitors performance and achievements

of those objectives;

• oversees the reporting on matters of compliance with corporate policies and laws, takes

responsibility for risk management processes and periodically reviews the needs for any executive

management to complement the Board skill set and status of operations of the Company;

• monitors and approves financial performance and budgets;

• reports to shareholders; and

• periodically reviews the processes and procedures of its oversight function.

1.2

A listed entity should:

(a) Prior to the nomination of prospective non-executive directors for election or re-election, the Board

aims to obtain from the prospective candidate:

(a) undertake appropriate checks before appointing a

• details of other commitments of the prospective candidate and an indication of the time involved;

person, or putting forward to security holders a

candidate for election, as a director; and

and

(b) provide security holders with all material

•

an acknowledgement that the prospective candidate will have sufficient time to meet the

information in its possession relevant to a

requirements of non-executive directors of the Company.

decision on whether or not to elect or re-elect a

Appropriate police and insolvency checks are undertaken as a minimum prior to the appointment of any

director.

new directors to the Board.

(b) When a candidate is placed before shareholders for election or re-election as a director, the names of

candidates submitted is accompanied by, or a cross reference to, the following information to enable

shareholders to make an informed decision in relation to that vote:

• biographical details, including competencies and qualifications and information sufficient to enable

an assessment of the independence of the candidate;

• details of any relationships that exist between the candidate and the Company or between the

candidate and any director of the company;

•

directorships held;

• particulars of other positions which involve significant time commitments or actual or potential

conflicts;

• the term of office currently served by and directors subject to re-election; and

any other particulars required by law.

1.3

A listed entity should have a written agreement with

The Company has a written agreement with each of its directors setting out the terms of their appointment.

each director and senior executive setting out the

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terms of their appointment.

1.4

The company secretary of a listed entity should be

The Secretary is accountable to the Board through the Chairman on all governance matters and on all

matters to do with the proper functioning of the Board. The Secretary is generally responsible for carrying

accountable directly to the board, through the chair,

on all matters to do with the proper functioning of

out the administrative and legislative requirements of the Board. The Secretary holds primary

the board.

responsibility for ensuring that the Board processes, procedures and policies run efficiently and effectively.

1.5

A listed entity should:

(a) While the Company has only 3 directors and no employees, the Board nevertheless has implemented

  1. have a diversity policy which includes and maintains a Diversity Policy in line with the ASX's Corporate Governance guidelines. The Board

requirements for the board or a relevant

believes in the promotion of diversity and that seeking diversity on all levels generally is good practice.

committee of the board to set measurable

objectives for achieving gender diversity and to

(b) A copy of the Company's Diversity Policy is available on the Company's website and a summary is

assess annually both the objectives and the

included in this Corporate Governance Statement

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

(c) While the Company does not currently have any employees, at the appropriate time the Board will

measurable objectives for achieving gender

ensure the principles under the Diversity Policy are implemented in seeking to attract and retain people by

diversity set by the board or a relevant committee

promoting an environment where employees are treated with fairness and respect and have equal access to

of the board in accordance with the entity's

opportunities as they arise. Diversity within the workforce includes, but is not limited to such factors as

diversity policy and its progress towards achieving

religion, ethnicity, culture, language, gender, disability and age.

them and either:

(1) the respective proportions of men and women

The recommendations of the Corporate Governance Council relating to reporting require a Board to set

on the board, in senior executive positions

and across the whole organisation (including measurable objectives for achieving diversity within the organisation, and to report against them on an

how the entity has defined "senior executive"

annual basis. The Company has implemented measurable objectives as follows:

for these purposes); or

(2) if the entity is a "relevant employer" under the

Measurable Objective

Objective

Comment

Workplace Gender Equality Act, the entity's

Satisfied

most recent "Gender Equality Indicators", as

defined in and published under that Act.

Adoption and promotion of a

Yes

The Company has adopted a formal diversity policy

Formal Diversity Policy.

which has been made publicly available via the

Company's

website

at

http://www.royalco.com.au/Diversity%20Policy.pdf

To ensure Company policies are

Yes

The Company's selection, remuneration and

consistent with and aligned with

promotion practices are merit based and as such

the goals of the Diversity Policy.

are consistent with the goals of the Company's

Diversity Policy.

To provide flexible work and

Yes

The Company will, where considered reasonable,

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salary

arrangements

to

and without prejudice, accommodate requests for

accommodate

family

flexible working arrangements.

commitments, study and self-

improvement

goals,

cultural

traditions

and

other

personal

choices of current and potential

employees.

To

implement

clear

and Yes

The Company will grant reward and promotion

transparent

policies

governing

based solely on merit and responsibility as part of

reward and recognition practices.

any annual and ongoing review processes.

  1. The Company, in keeping with the Recommendations provides the following information regarding the proportion of gender diversity in the organisation as at 30 June 2019:

Male

Female

Total

Proportion

female

Board

2

1

3

33.3%

(ii) The entity is not a "relevant employer".

1.6

A listed entity should:

(a) The Company does not have a formal process for periodically evaluating Board performance. Given the

nature and size of the Company and its business, the Board is of the view that there is presently an

(a) have and

disclose a process

for periodically

adequate and broad mix of skills and that given their experience, each of the Directors are aware of and

evaluating the performance of the board, its

committees and individual directors; and

capable of acting in the best interests of the Company's stakeholders. The composition of the Board is

(b) disclose, in relation to each reporting period,

determined so as to provide the Company with a broad base of industry, business, technical, administrative,

financial, corporate and legal skills and experience considered necessary to represent stakeholders and fulfil

whether a performance evaluation was

undertaken in the reporting period in accordance

the business objectives of the Company. Directors are expected to bring independent views and judgement

with that process.

to the Board's deliberations.

(b) There was no formal board performance evaluation during the period however during the end of the

reporting period, Mr David Croll was appointed as a non-executive director.

1.7

A listed entity should:

(a) and (b) The Company does not currently have a formal process for evaluating the performance of senior

executives as there are no senior executives employed at this time. A process will be implemented if, and

(a) have and

disclose a process

for periodically

when, a senior executive is employed by the Company.

evaluating the performance of its senior

executives; and

(b) disclose, in relation to each reporting period,

whether

a performance

evaluation was

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undertaken in the reporting period in accordance

with that process.

Principle 2 Recommendations:

Structure the Board to Add Value

2.1

The board of a listed entity should:

(a) The Board, as a whole, currently serves as the Company's Nomination Committee. As the Company

grows

it is planned that the Company will, at the relevant time, implement a separate Nomination

(a) have a nomination committee which:

Committee with its own separate Nomination Committee charter.

(1) has at least three members, a majority of

whom are independent directors; and

(2) is chaired by an independent director,

(b) While the Board does not currently comply with this recommendation, given the stage of the

and disclose:

Company's operations, the Board is of the view that it is currently structured in such a way so as to add

(3) the charter of the committee;

value and is appropriate for the complexity of the business at this time. The Board shall ensure that,

collectively, it has the appropriate range of skills and expertise to properly fulfil its responsibilities,

(4) the members of the committee; and

including:

(5) as at the end

of each reporting period, the

•

accounting;

number of times the committee met

throughout the period and the individual

•

finance;

attendances

of the members

at those

•

business;

meetings; OR

•

(b) if it does not have a nomination committee,

the Company's industry;

disclose that fact and the processes it employs to

•

Board-level experience; and

address board succession issues and to ensure

•

relevant technical expertise.

that the board has the appropriate balance of

skills, knowledge, experience, independence and

diversity to enable it to discharge its duties and

The Board shall review the range of expertise of its members on a regular basis and ensure that it has

responsibilities effectively.

operational and technical expertise relevant to the operation of the Company.

2.2

A listed entity should have and disclose a board skills

The Board will determine the procedure for the selection and appointment of new Directors and the re-

election of incumbents in accordance with the Corporations Act, the ASX Listing Rules, Company's

matrix setting out the mix of skills and diversity that

the board currently has or is looking to achieve in its

Constitution and having regard to the ability of the individual to contribute to the ongoing effectiveness of

membership.

the Board, to exercise sound business judgement, to commit the necessary time to fulfil the requirements of

the role effectively and to contribute to the development of the strategic direction of the Company. The

Board shall ensure that, collectively, it has the appropriate range of skills and expertise to properly fulfil its

responsibilities, including those outlined in 2.1 of this corporate governance statement.

2.3

A listed entity should disclose:

(a) The Board considered Mr Geoff Barker, who resigned as a director on 30 September 2018, to have been

(a) the names of the directors considered by the

the only independent director during the reporting period. Following the resignation of Mr Barker, none of

board to be independent directors;

the current directors are considered to be independent.

(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

(b) Not applicable.

compromise the

independence of the

director,

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Royalco Resources Limited published this content on 11 October 2019 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 11 October 2019 01:00:07 UTC