Corporate Governance Statement
The Directors monitor the business affairs of the Company on behalf of Shareholders and have formally adopted a corporate governance policy which is designed to encourage Directors to focus their attention on accountability, risk management and ethical conduct.
The overriding objective of the corporate governance practices adopted by the Company is to maintain and increase shareholder value in the Company within an appropriate framework that protects the rights and interests of shareholders and ensures the Company and its controlled entities are properly managed. This objective is supported by an organisation-wide commitment to the highest standards of legislative compliance and financial and ethical behaviour.
The Company's main corporate governance policies and practices are outlined below:
BOARD OF DIRECTORS
Role of the Board
The Board's role is to govern the Company rather than to manage it. In governing the Company, the Directors must act in the best interests of the Company as a whole. It is the role of senior management to manage the Company in accordance with the direction and delegations of the Board.
Composition of the Board
The Board complies with practices recommended as a majority of the Directors are independent. Directors are appointed based on the specific skills required by the Company and on the independence of their decision-making and judgement. The current Board comprising three Non-Executive Directors and one Executive Director is appropriate for the size of the Company.
Responsibilities of the Board
Without intending to limit the role of the Board, the principal functions and responsibilities of the Board include the following:
(a) Leadership of the Organisation: overseeing the Company and establishing codes that reflect the values of the Company and guide the conduct of the Board, management and employees.
(b) Strategy Formulation: working with senior management to set and review the overall strategy and goals for the Company and ensuring that there are policies in place to govern the operation of the Company.
(c) Shareholder Liaison: ensuring effective communications with shareholders through appropriate communications policy and promoting participation at general meetings of the Company.
(d) Company Finances: approving and monitoring acquisitions, divestitures and financial and other reporting.
(e) Delegation of Authority: determining the powers and functions of the Committees of the Board.
(f ) Risk Management: the Board is responsible for the Company's system of internal controls. The Board constantly monitors the operational and financial aspects of the Company's activities and, through the Audit Committee, the Board considers the recommendations and advice of external auditors and other external advisers on the operational and financial risks that face the Company. The Board investigates ways of enhancing existing risk management strategies, including appropriate segregation of duties and the employment and training of suitably qualified and experienced personnel.
Independent Professional Advice
With the prior approval of the Chairman, each Director has the right to seek independent legal and other professional advice at the Company's expense concerning any aspect of the Company's operations or undertakings in order to fulfill their duties and responsibilities as directors.
BOARD POLICIES
Trading in Company Shares
The Company has a Share Trading Policy under which Directors and certain employees and their associates are not prohibited from trading in the Company's securities during the period two (2) days after release and ending thirty (30) days after release of information of a financial nature to the ASX. Such releases include annual, half yearly, and, if required quarterly ASX releases. In addition, consistent with the law, designated officers are prohibited from trading in the Company's securities while in the possession of unpublished price-sensitive information concerning the Company.
Conflicts of Interest
As part of the Company's Code of Conduct, Directors must disclose to the Board any actual or potential conflicts of interest that may or might reasonably be thought to exist. If a Director is interested in a matter, the Director should declare that interest to the Board, even if it does not give rise to a conflict of interest.
Related Party Transactions
Related party transactions include any financial transaction between a Director and the Company and, if any, will be reported in writing at each Board meeting.
AUDIT COMMITTEE
Role
The Audit Committee provides a forum for the effective communication between the Board and external and internal auditors.
Composition
The Audit Committee complies with practices recommended as it has three members. Members are appointed by the Board from amongst the Non-Executive Directors, the current Audit Committee comprising the three Non-Executive Directors is appropriate for the size of the Company.
Responsibilities
The Audit Committee will review the annual and half-year financial reports prior to their approval by the Board. The Audit Committee will evaluate the efficiency and effectiveness of the external audit function, including reviewing the audit plan. The Audit Committee recommends to the Board the appointment of the external auditor and each year, reviews their independence, the audit fee, and any questions of resignation or dismissal. The Audit Committee reviews the effectiveness of management information systems and systems of internal control.
REMUNERATION COMMITTEE
Composition
The current members of the Remuneration Committee are the Non-Executive Directors.
Responsibilities
The responsibilities of the Remuneration Committee include setting the terms and conditions of employment for the Chief Executive Officer, the Chief Financial Officer and senior executives and reviewing and making recommendations to the Board on the Company's incentive schemes and superannuation arrangements.
The Board may use its discretion with respect to the payment of bonuses, stock options and other incentive payments.
Remuneration Policy
The Remuneration Committee of the Board of Directors assesses the appropriateness of executive remuneration by reference to surveys and market conditions with the overall objective of retaining a high quality executive team.
Non-Executive Director Remuneration Policy
Non-Executive Directors are paid a set fee of $2,000 per month. The Chairman is paid an additional fee of $500 per month in addition to the $2,000 for the non-executive role. Non-Executive Directors do not receive performance-based bonuses and do not participate in equity schemes of the Company nor are they entitled to retirement allowances.
NOMINATION COMMITTEE
Composition
The Board, as a whole, serves as the Nomination Committee.
Responsibilities
The Nomination Committee on an annual basis, coinciding with the Annual General Meeting reviews the composition of the Board to ensure the Board has the appropriate mix of expertise and experience. Where necessary, the Committee seeks the advice of external advisers in connection with the suitability of applicants for board membership.
COMPANY CODE OF CONDUCT
As part of the Board's commitment to the highest standard of conduct, the Company adopts a Code of Conduct to guide executives, management and employees in carrying out their duties and responsibilities. The Code of Conduct covers such matters as:
Responsibilities to Shareholders
The Company has a Continuous Disclosure Program in place designed to ensure the factual presentation of the Company's financial position.
Compliance with Laws and Regulations
The Company aims to be aware of and to perform all its legal obligations and to operate on the basis of efficiency and knowledge rather than by using obstructing competitive conduct.
Relations with Suppliers
Employees should deal fairly and honestly with business suppliers and stakeholders.
Employment Practices
The Company is committed to provide its employees with a working environment which is healthy, safe and productive. Besides physical factors, the work environment should also be challenging, stimulating and rewarding for all.
Responsibilities to the Environment and the Community
The Company is responsible for maintaining and improving the environment and for serving the local community.
Conflicts of Interest
A conflict of interest exists where loyalties are divided. It is expected the Company will guard against any possibility of conflict of interest in employment.