Corporate Governance

Corporate Governance

The Board has formally reviewed the ASX Corporate Governance Council paper entitled "Principles of Good Corporate Governance and Best Practice Recommendations" which was published in March 2003. The Company is a small company and accordingly the Directors consider that many of the corporate governance guidelines intended to apply to larger companies are not practical. The Company's position on those recommendations is set out below;

Principle 1: Lay Solid Foundations for Management and Oversight

Role of the Board

The Board's primary responsibility is to oversee the Company's business activities and management for the benefit of shareholders which it accomplishes by:

  • establishing corporate governance, and ethical, business standards;
  • setting objectives, goals and strategic direction with a view to maximise shareholder value;
  • approving and monitoring budgets and major investments;
  • ensuring adequate internal controls exist and are appropriately monitored;
  • ensuring significant business risks are identified and appropriately managed;
  • appointing the CEO and monitoring the CEO's performance;

The Board has delegated responsibilities and authorities to management to enable management to conduct the Company's day to day activities. Matters which are not covered by these delegations, such as approvals which exceed certain limits, require Board approval.

Apart from the statements on responsibility the Company has not formalised the functions reserved to the Board and those delegated to management for the reasons noted above.

Principle 2: Structure the Board to Add Value

The composition of this Board is determined using the following principles:

  • Directors appointed by the Board are subject to election by shareholders at the following annual general meeting and thereafter
  • Directors are subject to re-election at least every three years.

The names of the Directors in office at the date of this Report, the date they were appointed, their status as Non-Executive, Executive or Independent Directors, whether they are retiring by rotation and seeking re-election by shareholders at the 2007 Annual General Meeting, are set out in the table below:

DirectorAppointedNon-ExecutiveIndependent
Mark Bouris18 June 2009
No
Yes
Kenneth Ting18 June 2009
No
Yes
Paul Casey27 May 2013
No
Yes

The main areas of divergence with recommended principles are:

  • The Chairman is not independent and is an Executive Director.
  • The Company does not have a formally constituted Audit Committee, Board Nominations Committee or Remuneration Committee.
  • The majority of Directors are not independent.

Each Director of the Company has the rights to seek independent professional advice at the expense of the Company.

Principle 3: Promote ethical and responsible decision making

The Company does not have a formal code of conduct reflecting the Company's small size and the close interaction of the small number of individuals throughout the organisation. However the Directors are aware of their legal responsibilities and adhere to the following policy.

The Directors will not deal in Company shares:

  • Except between three and 30 days after either the release of the Company's half year and annual results to the Australian Securities Exchange, the annual general meeting or any major announcement.
  • Whilst in possession of price sensitive information.

In accordance with the Corporations Act 2001 and the Listing Rules of the Australian Securities Exchange, Directors advise the ASX of any transactions conducted by them in shares in the Company.

Principle 4: Safeguard Integrity in Financial Reporting

The Company Secretary is responsible for producing the financial results and has stated in writing to the other members of the Board that the Company's consolidated year end financial statements present a true and fair view, in all material respects, and are in accordance with relevant accounting standards.

The Company and its Directors are aware of continuous disclosure requirements under the Listing Rules and Corporations Act and operate in an environment where strong emphasis is placed on full and appropriate disclosure. The Company has formal written policies regarding disclosure as detailed here.

Principle 5: Respects the Rights of Shareholders

The Company does not have a communications strategy to promote effective communication with shareholders, as it believes this is excessive for small companies. The Company maintains a website which is used in conjunction with timely announcements to the ASX to ensure shareholders are kept fully informed.

The Company also aims to ensure that the shareholders are informed of all major developments through:

  • Despatch of the annual and half yearly financial reports.
  • Despatch of all notices of meetings of shareholders.
  • Submitting to a vote of shareholders proposed major changes in the consolidated entity which may impact on share ownership rights.

The Board encourages full participation of shareholders at the annual general meeting to ensure high level of accountability and identification of the consolidated entity's strategic goals. Important issues are presented to the shareholders as single resolutions.

The Company requests the external auditor to attend the general meeting.

Principle 6: Recognise and Manage Risk

The Company is a small company and does not believe that there is significant need for formal policies on risk oversights and management. However, the Board considers risk exposure and management as a standing agenda item at board meetings.

Risk management arrangements are the responsibility of the Board of Directors.

Principle 7: Encourage Enhanced Performance

The Company does not have a Remuneration Committee.

There has been no formal performance evaluation of the Board during the past financial year.

Principle 9: Remunerate Fairly and Responsibly

There are no formal remuneration policies maintained by the Company. Details of the Company's policy for determining the nature and amount of emoluments of Board members and senior Executives of the Company are contained in the Directors' report.

In accordance with Corporations Act requirements, the Company discloses the fees or salaries paid to all Directors, and Executive Officers of the Company.

Principle 10: Recognise the Legitimate Interests of Stakeholders

The Company does not have a formal Code of Conduct to guide compliance with legal and other obligations. This reflects the Company's size which makes its legal compliance a less onerous task than with larger companies. The Board of Directors continues to review the situation to determine the most appropriate and effective operational procedures.