Corporate Governance

Corporate Governance Statement

This Corporate Governance Statement sets out the Company’s current compliance with the ASX Corporate Governance Council’s Corporate Governance Principles and Best Practice Recommendations (Best Practice Recommendations). The Best Practice Recommendations are not mandatory. However, the Company will be required to provide a statement in its future annual reports disclosing the extent to which the Company has followed the Recommendations.

1 Lay solid foundations for management and oversight

1.1 The Company’s Corporate Governance Plan includes a Board Charter, which discloses the specific responsibilities and functions of the Board and provides that the Board shall delegate responsibility for the day-to-day operations and administration of the Company to the Managing Director. The Board Charter also specifically outlines the role of the Company’s Directors. Each function and its responsibility is outlined in the Board Charter which is available on the Company’s website.

1.2 The Board will monitor the performance of senior management, including measuring actual performance against planned performance.

The Board Charter sets out the process to be followed in evaluating the performance of senior executives. Each senior executive is required to participate in a formal review process which assesses individual performance against predetermined objectives.

1.3 The Board Charter is publicly available on the Company’s website. The Board Charter discloses the specific responsibilities of the Board and provides that the Board shall delegate responsibility for the day-to-day operations and administration of the Company to the Chief Executive Officer. The Board Charter also specifically outlines the role of the Company’s Chairman, Individual Directors and Chief Executive Officer.
 
An evaluation of senior executives against the specified criteria occured in December 2010 and in July 2011.

2 Structure the board to add value

2.1 Four of the six members of the current board (Mr Alan Broome, Phillip McCarthy, Gavin Soloman and Lex Hansen) are considered to be independent directors and the remaining two are not.

A majority of the board is comprised of independent directors (as above) and five of the six members of the current board are non-executive directors except for Rodney Austin.

The Board is of the view that it is currently structured in such a way so as to add value and is appropriate for the complexity of the business at this time.

2.2 The Chairman of the Board is Mr Alan Broome AM who is an independent non-executive director.

2.3 The Company has a Chief Executive Officer (CEO) who is separate from the Chairman. The CEO is responsible for the day to day operations and administration of the Company and is not a member of the Board.

2.4 The Board, as a whole, currently serves as the Company’s nomination committee. Terms and conditions of employees are negotiated by the Managing Director for recommendation to the Board. As the Company grows in size it is planned that the Company will implement a separate nomination committee with its own separate nomination committee charter.

2.5 The performance of the Board and the various Board committees as and when established is to be evaluated by the Chairperson. The performance of each committee is measured against the scope and responsibilities detailed in their respective charters and the process for evaluating the performance of the Board, its committees and individual directors is to be disclosed by the Chairman.

The Board is responsible for the evaluation and review of the performance of the Chairman and the effectiveness and programme of board meetings. The position of Chairman will be reviewed by the Board at the first Board meeting following the Annual General Meeting each year.

The Company’s Corporate Governance Policies set out the process to be followed in evaluating the performance of senior executives. Each senior executive is required to participate in a formal review process which assesses individual performance against predetermined objectives.

2.6 A description of the skills and experience of each of the current Directors is contained in the Company’s Prospectus dated 24 March 2010. Three of the five members of the current board (Mr Broome, Mr McCarthy and Mr Hansen) are considered to be independent directors in accordance with the definition of an independent director as contained in the Company’s Board Charter. The Board is of the view that it is currently structured in such a way so as to add value and is appropriate for the complexity of the business at this time.

The Board, Board Committees or individual Directors may seek independent external professional advice as considered necessary at the expense of the Company, subject to prior consultation with the Chairperson.

The Board, as a whole, will serve as the Company’s nomination committee.

The Board will determine the procedure for the selection and appointment of new directors and the re-election of incumbents having in accordance with the Company’s constitution and having regard to the ability of the individual to contribute to the ongoing effectiveness of 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 policy for the appointment of new directors is set out in the Company’s Board Charter which is publicly available on the Company’s website.

3 Promote ethical and responsible decision-making

3.1 The Company’s Corporate Governance Plan includes the following policies which provide a framework for decisions and actions in relation to ethical conduct in employment.

• Securities Trading – Directors and Executives
• Continuous Disclosure
• The Company’s Obligations to Stakeholders
• Code of Conduct for Directors and Key officers
• Health Safety Environment and Community Committee Charter

All 8 of the Company’s Corporate Governance Policies are publicly available on the Company’s website.

3.2 The Company has established a policy concerning trading in the Company’s securities by directors, senior executives and employees.

The policy is titled “Corporate governance policy - Securities Trading – Directors and Executives” and is publicly available on the Company’s website. The police was reviewed in the last year and a new Securities Trading Policy was lodged with the ASX on 23 December 2010.
 
3.3 The corporate code of conduct and the trading policy of the Company are set out in the Company’s Corporate Governance Policies which are publicly available on the Company’s website.

3.4 The company currently employs a total of six women being five employees and one in a senior executive position. The company does not have any women on the Board at present.
 

4 Safeguard integrity in financial reporting

4.1 The Company has established an Audit and Risk Management Committee and a copy of the policy titled “Charter of the Audit and Risk Management Committee” is publicly available on the Company’s website.

4.2 The Audit and Risk Management Committee has three members all being non-executive directors and all being independent. The committee is chaired by Mr Phil McCarthy who is not Chairman of the Board and the members are Lex Hansen and Gavin Solomon all members are considered independent.

4.3 The Company’s Corporate Governance Plan includes a formal charter for the Audit and Risk Management Committee.

4.4 The Committee will meet at least twice a year and at least once each year with the company’s auditors. The Committee has powers under the Charter including unrestricted access to the company’s external auditors and all company records for the purposes of carrying out its responsibilities under the Charter. The Committee will recommend to the Board procedures for the selection and appointment of external auditors and for the rotation of external auditor partners.

5 Make timely and balanced disclosure

5.1 The Company has a continuous disclosure program in place designed to ensure compliance with the ASX Listing Rule on continuous disclosure and to ensure accountability at a senior executive level for compliance and factual presentation of the Company’s financial position.

5.2 The continuous disclosure policy of the Company is set out on the Company’s website.

6 Respect the rights of shareholders

6.1 The Company’s Corporate Governance Plan includes a shareholder communications strategy, which aims to ensure that the shareholders are informed of all major developments affecting the Company’s state of affairs. This is contained within the Company’s policies titled “Code of Conduct – the Company’s Obligations to Stakeholders” and “Corporate Governance Policy – Continuous Disclosure”.

6.2 The shareholder communication policy of the Company is set out in the Company’s the Company’s policies titled “Code of Conduct – the Company’s Obligations to Stakeholders” and “Corporate Governance Policy – Continuous Disclosure” which are publicly available on the Company’s website.

7 Recognise and manage risk

7.1 The Board in conjunction with the Audit and Risk Management Committee determines the Company’s “risk profile” and is responsible for overseeing and approving risk management strategy and policies, internal compliance and internal control.

The Company has established policies for the oversight and management of material business risks. The Audit and Risk Management Charter of the Company is set out on the Company’s website.

7.2 The responsibility for undertaking and assessing risk management and internal control effectiveness is delegated to the Board in conjunction with the Audit and Risk Committee. The Board and Audit and Risk Management Committee are required to assess risk management and associated internal compliance and control procedures and will be responsible for ensuring the process for managing risks is integrated within business planning and management activities.

Reports on risk management are to be provided to the Board by the Audit and Risk Management Committee at the first Board meeting subsequent to each Committee meeting.

 7.3 Reports on risk management are to be provided to the Board by the Audit and Risk Management Committee.

The Board will seek the relevant assurance from the management and the executive directors (or their equivalents) at the relevant time. 

7.4 Reports on risk management are to be provided to the Board by the Audit and Risk Management Committee.

The Board will ensure that the report under Recommendation 7.2 is provided in at the relevant time.

The Board will ensure that the management or the executive director(s) provide the assurance under Recommendation 7.3 at the relevant time.

8 Remunerate fairly and responsibly

8.1 The Board has established a separate Remuneration Committee.

8.2 The Committee distinguishes the structure of non-executive director’s remuneration from that of executive directors and senior executives. The Company’s Constitution and the Corporations Act also provides that the remuneration of non-executive Directors will be not be more than the aggregate fixed sum determined by a general meeting.

The Board is responsible for determining the remuneration of the executive directors (without the participation of the affected director).

8.3 The Committee will meet twice a year. A copy of the Remuneration Committee Charter is available on the Company’s website. The members of the RemunerationCommittee are Gavin Solomon (Chair), Lex Hansen and Alan Broome.
 
A summary of the company’s policy on prohibiting transactions in associated products which operate to limit the risk of participating in unvested entitlements under any equity based remuneration scheme is contained within the Charter.