Corporate Governance

The NML Board currently has eight directors. Tata Steel, NML's strategic partner, currently has the right to nominate three directors under the current contractual arrangement with NML. The remaining members were nominated by NML. The majority of the Board are engineers and geologists, with extensive iron ore and steel expertise. Members of the Board have a broad range of business skills, expertise and industry knowledge, diversity of opinion and contacts relevant to NML's business. Membership also includes an appropriate number of directors, who have no material relationship with NML and are considered independent. The Board is ultimately responsible for overseeing the management of the business and required to act in the best interests of NML and its shareholders.

NML employees are committed to earn the trust and confidence of the shareholders and stakeholders through sound and transparent corporate governance. The governance practices emphasize NML's aspiration to continuously improve performance and enhance shareholder value. The governance standards also underscore NML's dedication to adhere to stringent safety procedures and environmental best practices as well as to remain a leader in supporting and improving the lives of affected communities.

NML strongly believes that any successful business must be committed to instilling confidence and building a trusting relationship with all constituents. To this end, NML is committed to acting responsibly and sincerely towards all its business associates and society at large. Our goal is to encourage and inspire all employees to behave in an ethically responsible fashion, while providing the opportunity for professional development and endorsing high standards of practice in any field.

The governance manual provides various policy guidelines, which must be strictly observed and are overseen directly or through special committees. Some of the responsibilities are described below:

  • Insider Trading and Reporting Policy
  • Audit Committee charter
  • Health & Safety policy
  • Whistle Blower policy
  • Disclosure and Confidentiality Policy

INSIDER TRADING AND REPORTING POLICY

The purpose of the Insider Trading and Reporting Policy is to summarize the insider trading restrictions to which directors, officers and certain employees are subject under applicable securities legislation, and to set forth a policy governing investments in securities of NML and the reporting thereof which is consistent with the legislation.

This Policy is not intended to discourage investment in the corporation's securities. Rather, it is intended to highlight the obligations and the restrictions imposed on insiders by relevant securities legislation.

Summary of Legislation

Securities legislation prohibits any person in a "special relationship" with the corporation from either:

  1. purchasing or selling the corporation's shares with the knowledge of a material fact or material change concerning the corporation that has not been generally disclosed; or
  2. informing (or "tipping"), other than when necessary in the course of business, another person or corporation of a material fact or material change concerning the corporation before the material fact or material change has been generally disclosed. A material change to the business or affairs of the corporation or a material fact is one which would reasonably be expected to have an effect on the market price or value of any securities of a public issuer. A material change is specifically defined to include any decision by a board of directors to implement a material change, as well as any decision made to implement such a change by senior management, if Board approval is probable.

This prohibition applies to persons who are deemed to have a "special relationship" with NML, which include:

  1. directors, officers, employees and consultants of NML;
  2. persons or corporations who learn of a material fact or material change concerning NML.

While the penalties for a breach of this prohibition vary among jurisdictions, a breach may render you personally liable to prosecution and, upon conviction, to a fine not exceeding one million dollars or two years in jail, or both. Further, you may be subject to civil actions at the instance of all or any of security holders, the companies whose securities were traded, and securities regulators.

You should note that any person who is associated with you, including any member of your family, your spouse or any person living with you, is also deemed to be a person in a special relationship with NML, and is subject to the same legal obligations and duties.

Trading Prohibitions

In light of the foregoing, all directors, officers and employees of NML will be subject to the following prohibitions relating to investments in NML's securities and securities of other public issuers:

  1. If one has knowledge of a material fact or material change related to the affairs of NML or any public issuer involved in a transaction with NML which is not generally known, no purchase or sale may be made until the information has been generally disclosed to the public and the blackout periods set forth below have expired.
  2. Knowledge of a material fact or change must not be conveyed to any other person for the purpose of assisting that person to buy or sell securities of a public issuer.
  3. The practice of selling "short" securities of the corporation at any time is not permitted.
  4. The practice of buying or selling a "call" or "put" or any other derivative security in respect of any securities of NML is not permitted.
  5. Trading is prohibited in the event that NML has provided notice of a pending material fact or material change until the information has been generally disclosed to the public and the blackout periods set forth below have expired.

The above prohibitions and the insider reporting obligations provided below applies equally to the trading or exercising of options to acquire shares or other securities of NML. In exceptional circumstances, such as the imminent expiry of stock options, the Board may permit the exercise of options during a blackout period provided that the securities acquired upon exercise of the options are not traded until the blackout period expires.

Insider Reporting Obligations

A person or corporation who becomes an insider of NML must file an insider report within ten days of the date of becoming an insider. In addition, an insider whose direct or indirect beneficial ownership of or control or direction over securities of NML changes, must file an insider report of the change within five days of the date of the change.

National Instrument 55-104 Insider Reporting Requirements and Exemptions defines a “reporting insider” to include, among others, an insider of the issuer if the insider is:

  • the CEO, CFO and COO and each director of the issuer, of a significant shareholder of the issuer or of a major subsidiary of the issuer;
  • a person or company responsible for a principal business unit, division or function of the issuer;
  • a significant shareholder of the issuer; and
  • any other insider that in the ordinary course receives or has access to information as to material facts or material changes concerning the issuer before the material facts or material changes are generally disclosed and directly or indirectly, exercises, or has the ability to exercise, significant power or influence over the business, operations, capital or development of the issuer.

It is each insider’s personal responsibility to determine if they are a “reporting insider” as defined in NI 55-104 and should review the complete definition of such term in NI 55-104 in making such determination.  It is each reporting insider’s responsibility to ensure that all requisite insider trading reports are filed with the appropriate securities commissions within the statutory time limits.  
A copy of the insider report may be obtained from the Corporation and is required to be filed electronically on SEDI.

Blackout Periods

In order to ensure uniform compliance with securities legislation, NML has made the following provision for blackout periods during which restricted persons, directors, officers, employees and consultants who are routinely in possession of undisclosed material information, are prohibited from trading in NML's securities.

Periodic, Regular Disclosure (Quarterly and Annual Financial Results)

  • For each quarter, the blackout period is the 14 days immediately preceding the day of the Board or Audit Committee meeting at which the financial statements are to be reviewed and/or approved and terminating at the end of the second business day following the release.
  • Financial results release dates are approximate and will vary on a yearly basis.

Unscheduled Developments

Unscheduled developments are significant corporate acquisitions, divestitures, contract negotiations, asset write downs, or similar transactions that will generally result in a material change in the affairs of the corporation.

  • The blackout period begins as soon as management is aware of the development, and continues until the end of the second business day following the release, unless otherwise determined by the Board.
  • Management shall be responsible for advising by email all directors and officers (and any employees or consultants who are in possession of undisclosed material) that a blackout period is in effect.
  • Prior to trading in any securities of NML, the insider shall obtain confirmation from management that there is no blackout period in effect.

AUDIT COMMITTEE CHARTER

The primary function of the Audit Committee is to assist the Board in fulfilling its financial oversight responsibilities by reviewing the financial reports and other financial information provided by NML to regulatory authorities and shareholders, NML's systems of internal controls regarding finance and accounting, and NML's auditing, accounting and financial reporting processes. Consistent with this function, the Audit Committee will encourage continuous improvement of, and should foster adherence to, NML's policies, procedures and practices at all levels. The Audit Committee's primary duties and responsibilities are to:

  • Serve as an independent and objective party to monitor the corporation's financial reporting and internal control system and review NML's financial statements.
  • Review and appraise the performance of the corporation's external auditors.
  • Provide an open avenue of communication among the corporation's auditors, financial and senior management and the Board.

The Audit Committee shall be comprised of three directors as determined by the Board. Each of the members of the committee shall be "independant" and "financially literate" as required by Multilateral Instrument 52-110- Audit Commitees.

HEALTH AND SAFETY POLICY

The personal safety and health of each employee of NML are of primary importance. The prevention of occupationally induced injuries and illnesses is of such consequence that it will be given priority over operative productivity where necessary. Management will provide all mechanical and physical facilities needed for personal health and safety in order to maintain the highest possible standards.

We will maintain a healthy and safety program conforming to industry best practices. To be successful, such a program must start with proper attitudes toward injury and illness prevention on the part of both supervisors and employees. We are committed to cooperating with the Occupational Health & Safety Committee, the Workplace Health & Safety Designate/Worker and/or the Health & Safety Representative in carrying out their collective responsibility for occupational health and safety. Only through such a cooperative effort can a safety program be established and preserved in the best interest.

Our objective is a health and safety program that will reduce the number of injuries and illnesses to an absolute minimum, not merely in keeping with, but surpassing, the best experience of operations similar to ours. Our goal is zero accidents and injuries.

Our safety and health program will involve:

  • Providing mechanical and physical safeguards to the maximum extent possible.
  • Conducting a program of health and safety inspections to find and eliminate unsafe working conditions and practices, to control health hazards, and to comply fully with the health and safety standards for every job.
  • Training for employees in good health and safety practices.
  • Providing necessary personal protective equipment and instruction for its use and care.
  • Developing and enforcing health, environment and safety rules and requiring that employees cooperate with these rules as a condition of employment.
  • Investigating every accident/incident promptly and thoroughly to find out what caused it and to correct the problem so that it won't happen again.

NML accepts the responsibility for leadership of the health and safety program, for its effectiveness and improvement and for providing the safeguards required to ensure safe conditions.

WHISTLE BLOWER POLICY

NML and its subsidiaries are committed to the highest standards of openness, honesty and accountability. In line with that commitment, we expect employees and others with whom we interact to come forward at any time to voice concerns they may have about NML's activities.

Employees are often the first to realize that there may be something seriously wrong within the company. However, they may decide not to express their concerns because they feel that speaking up would be disloyal to their colleagues or to the company. They may also fear recrimination, harassment or victimization. In these circumstances, they may feel it would be easier to ignore the concern rather than report what may just be a suspicion of wrong-doing.

Our policy document makes it clear that employees can report wrong-doings or suspected wrongdoings without fear of victimization, subsequent discrimination or disadvantage. This Whistle Blowing Policy is intended to encourage and enable employees to raise serious concerns within NML rather than overlooking a problem or seeking a resolution of the problem outside NML.

This policy applies to all employees and those contractors working for us. It is also intended to provide a method for other stakeholders (suppliers, customers, shareholders etc.) to voice their concerns regarding our business conduct.

The policy is also intended as a clear statement that if any wrongdoing by NML or any of its employees or by any of its contractors or suppliers is identified and reported, it will be dealt with expeditiously and thoroughly investigated and remedied. NML will further examine and implement the means of ensuring that such wrongdoing can be prevented in future.

A whistleblowing or reporting mechanism invites all employees and other stakeholders to act responsibly to uphold the reputation of their organization and maintain public confidence. Encouraging a culture of openness within the organization will also help this process. This Policy aims to ensure that serious concerns are properly raised and addressed within NML.

DISCLOSURE AND CONFIDENTIALITY POLICY

This policy provides our approach to disclosure of material information and maintaining the confidentiality of information.

This policy, together with the Insider Trading Policy, is intended to assist NML in complying with securities laws governing corporate disclosure, confidentiality and insider trading (collectively, the Disclosure Rules). At NML, we believe that compliance with the Disclosure Rules is essential to maintaining investor confidence in management of the corporation and the integrity of the market for NML's securities.

Under the Disclosure Rules, "material information" is information that has a significant effect, or would reasonably be expected to have a significant effect, on the market price of the NML's securities. NML must disclose material information to the public immediately, unless early disclosure would be unduly detrimental to the corporation. In such cases, the information may be kept confidential for a limited period of time.