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Requirement
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Response
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1 Lay solid foundations for management and oversight
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1.1 Companies should establish the functions reserved to the board and those delegated to senior executives and disclose those functions
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The Board recognises the importance of distinguishing between the respective roles and responsibilities of the Board and management. The respective roles and responsibilities of Board and the Managing Director are set out in the Company’s Board Charter.
The primary responsibility of the Board is to protect and advance the interest of shareholders. To fulfil this role, the Board has overall responsibility for developing and approving the Company’s corporate strategy and monitoring implementation of strategy, appointing the Managing Director, monitoring senior executives' performance and approving the Company’s risk and audit framework. The Board is also responsible for the Company’s general corporate governance matters, including matters such as disclosures and the appointment and monitoring of any committees set up by the Board. The Managing Director has primary responsibility to the Board for the affairs of the Company. The Managing Director’s responsibilities include implementing and monitoring (together with the Board) the strategic and financial plans for the Company, managing the appointment of senior executive positions, being the primary channel of communication and point of contact between the senior executives and the Board, providing strong leadership to, and effective management of, the Company and otherwise carrying out the day to day management of the Company.
This recommendation is also satisfied in as much as should a new Director be appointed, the Company’s Board Charter and other corporate governance documentation together with updated financial statements will be given to the new Directors together with a formal letter of appointment which will set out details in respect of, amongst other matters:
· the Company’s financial, strategic, operational and risk management position;
· each Director’s rights, duties and responsibilities; and
· the role of the Board and senior executives.
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1.2 Companies should disclose the process for evaluating the performance of senior executives
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The Company’s goals for the year are set out in the Annual Report and these are used as the basis for evaluating performance of senior executives. Performance evaluations are undertaken annually, in June, by the Managing Director. The Managing Director’s performance evaluation is also undertaken annually, in June, by the Board.
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1.3 Companies should provide the information indicated in the Guide to reporting on Principle 1
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It is intended that:
· an explanation of any departure from Recommendations 1.1, 1.2 or 1.3 will be included in the corporate governance statement in the annual report
· the annual report will disclose whether a performance evaluation for senior executives has taken place in the reporting period and whether it was in accordance with the process disclosed.
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2 Structure the board to add value
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2.1 A majority of the board should be independent directors
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This recommendation is satisfied.
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2.2 The chair should be an independent director
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This recommendation is satisfied.
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2.3 The roles of Chair and Managing Director should not be exercised by the same individual
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This recommendation is satisfied.
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2.4 The board should establish a nomination committee
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The Board has not adopted a charter relevant to the specific functions of a nomination committee. Given the size of the Company and the Board, straight forward structure of the Company, the directors consider that any efficiencies achieved by the establishment of a nomination committee would be minimal, thereby not making its establishment cost effective. The Company has board processes in place which raise the issues that would otherwise be considered by a nomination committee.
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2.5 Companies should disclose the process for evaluating the performance of the board, its committees and individual directors
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The Directors consider that due to the size of the Company and its Board, such a formal review procedure is not appropriate at this point in time and has instead adopted a self-evaluation process to measure its own performance. This recommendation is satisfied in as much as the details have been included in the Annual Report and in the Board Charter.
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2.6 Companies should provide the information indicated in the Guide to reporting on Principle 2
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The following material are intended to be included in the annual report:
· the skills, experience and expertise relevant to the position of director held by each director in office at the date of the annual report
· the names of the directors considered by the board to constitute independent directors and the company’s materiality thresholds
· the existence of any of the relationships listed in Box 2.1 of the Guide (regarding director independence) and an explanation of why the board considers a director to be independent, notwithstanding the existence of those relationships
· a statement as to whether there is a procedure agreed by the board for directors to take independent professional advice at the expense of the company
· a statement as to the mix of skills and diversity for which the Board is looking to achieve in membership of the Board
· the period of office held by each director in office at the date of the annual report
· whether a performance evaluation for the board, its committees and directors has taken place in the reporting period and whether it was in accordance with the process disclosed
· an explanation of any departures from Recommendations 2.1, 2.2, 2.3, 2.4, 2.5 or 2.6.
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3 Promote ethical and responsible decision making
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3.1 Companies should establish a code of conduct and disclose the code or a summary of the code as to:
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This recommendation is satisfied. The Company's Code of Conduct sets out the Company's expectations for the conduct by the Company's directors, senior executives and employees, including in relation to business conduct, personal and professional conduct (such as confidentiality, personal behaviour, diversity and respect for others).
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the practices necessary to maintain confidence in the company's integrity
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the practices necessary to take into account their legal obligations and the reasonable expectations of their stakeholders
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the responsibility and accountability of individuals for reporting and investigating reports of unethical practices
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3.2 Companies should establish a policy concerning diversity and disclose the policy or a summary of that policy. The policy should include measurable objectives for achieving gender diversity. The policy should include requirements for the Board to establish measurable objectives for achieving gender diversity for the Board to assess annually both the objectives and progress in achieving them.
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This recommendation is satisfied. The Company's Code of Conduct sets out the Company's policy concerning diversity. The Company's policy concerning diversity is as follows: The Company recognises that diversity is an economic driver of competitiveness for companies and it strives to promote an environmental and culture conducive to the appointment of well qualified persons so that there is appropriate diversity to maximise the achievement of corporate goals. The Company will disclose its objectives for achieving diversity and progress in achieving them in each annual report. In order to promote gender diversity, the Company will engage in reviews and reporting to the Board about the proportion of women at the Company and strategies to address diversity. The Company intends to recruit the most qualified persons for each position and considers persons from a diverse pool of qualified candidates.
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3.3 Companies should disclose in each annual report the measurable objectives for achieving gender diversity set by the board in accordance with the diversity policy and progress towards achieving them.
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The diversity objectives are intended to be included in the annual report.
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3.4 Companies should disclose in each annual report the proportion of women employees in the whole organisation, women in senior executive positions and women on the Board.
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These objectives are intended to be included in the annual report.
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3.5 Provide the information indicated in Guide to Reporting on Principle 3
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The following material are intended to be made publicly available on the company’s website in a clearly marked corporate governance section:
· any applicable code of conduct or a summary
· the trading policy or a summary.
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4 Safeguard integrity in financial reporting
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4.1 The board should establish an audit committee
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The board has taken the decision in principle to establish an audit committee during the current financial year (1 July 2010-30 June 2011)
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4.2 The audit committee should be structured so that it:
consists only of non-executive directors
consists of a majority of independent directors
is chaired by an independent chair, who is not chair of the board
has at least three members.
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The audit committee when it is constituted will be fully compliant with the guidelines as stated here.
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4.3 The audit committee should have a formal charter
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This recommendation is satisfied.
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4.4 Companies should provide the information indicated in the Guide to reporting on Principle 4
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The following material are intended to be included in the corporate governance statement in the annual report:
· the names and qualifications of those appointed to the audit committee and their attendance at meetings of the committee, or, where a company does not have an audit committee, how the functions of an audit committee are carried out
· the number of meetings of the audit committee
· explanation of any departures from Recommendations 4.1, 4.2, 4.3 or 4.4.
The following material are intended to be made publicly available on the company’s website in a clearly marked corporate governance section:
· the audit committee charter
· information on procedures for the selection and appointment of the external auditor, and for the rotation of external audit engagement partners.
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5 Make timely and balance disclosure
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5.1 Companies should establish written policies designed to ensure compliance with ASX Listing Rule disclosure requirements to ensure accountability at senior executive level for that compliance and disclose those policies or a summary of those policies
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This recommendation is satisfied. The Company has established written policies and procedures designed to ensure compliance with ASX Listing Rule disclosure requirements and accountability for compliance. The Company's Continuous Disclosure Policy sets out the Company's policies and procedures with regard to the reporting of material price sensitive information to the ASX subject to confidentiality carve-out aspects and the Company's procedures in this regard.
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5.2 Companies should provide the information indicated in the Guide to reporting on Principle 5
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An explanation of any departures from Recommendations 5.1 or 5.2 are intended to be included in the corporate governance statement in the annual report.
The policies or a summary of those policies designed to guide compliance with Listing Rule disclosure requirements are intended to be made publicly available on the company’s website in a clearly marked corporate governance section.
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6 Respect the rights of shareholders
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6.1 Companies should design a communications policy for promoting effective communication with shareholders and encouraging their participation at general meetings and disclose their policy or a summary of that policy
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The Company places a high priority on communications with its shareholders. Although the Company does not have a standalone communications policy, the Company considers that its Continuous Disclosure Policy, together with disclosure through the following means, should be sufficient to promote effective communications with shareholders:
· announcements released to through the ASX company announcements platform;
· notices of meetings to shareholders; and
· provision of all relevant documentation released on the Company’s website.
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6.2 Companies should provide the information indicated in the Guide to reporting on Principle 6
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An explanation of any departure from
Recommendations 6.1 or 6.2 are intended to be included in the corporate governance statement in the annual report.
The company intends to describe how it will communicate with its shareholders publicly, by posting this information on the company’s website in a clearly marked corporate governance section.
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7 Recognise and manage risk
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7.1 Companies should establish policies for the oversight and management of material business risks and disclose a summary of those policies
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Although there is no standalone risk management policy, the Board Charter provides that it is the Board’s responsibility to approve the Company’s risk and audit framework, systems of risk management and internal control, as well as approving compliance with any risk and audit policies and protocols in place at the time.
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7.2 The board should require management to design and implement the risk management and internal control system to manage the company's material business risks and report to it on whether those risks are being managed effectively. The board should disclose that management has reported to it as to the effectiveness of the company's management of its material business risks
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This recommendation is satisfied.
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7.3 The board should disclose whether it has received assurance from the Managing Director (or equivalent) and the chief financial officer (or equivalent) that the declaration provided in accordance with section 295A of the Corporations Act is founded on a sound system of risk management and internal control and that the system is operating effectively in all material respects in relation to financial reporting risks
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This recommendation is satisfied.
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7.4 Companies should provide the information indicated in the Guide to reporting on Principle 7
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The following material are intended to be included in the corporate governance statement in the annual report:
· explanation of any departures from Recommendations 7.1, 7.2, 7.3 or 7.4
· whether management has reported to the board under Recommendation 7.2
· whether the board has received assurance from the chief executive officer (or equivalent) and the chief financial officer (or equivalent) under Recommendation 7.3.
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8 Remunerate fairly and responsibly
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8.1 The board should establish a remuneration committee
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This recommendation is not satisfied. Given the size of the Company and the Board, and the start up nature and straight forward structure of the Company, the Directors consider that any efficiencies achieved by the establishment of a remuneration committee would be minimal, not making its establishment cost effective.
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8.2 The remuneration committee should be structured so that it consists of a majority of independent directors, is chaired by an independent director and has at least three members
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Refer to Response to 8.1.
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8.3 Companies should clearly distinguish the structure of non-executive directors' remuneration from that of executive directors and senior executives
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This recommendation is satisfied. However, Board members are entitled to options having regard to the small number of the Company's management team.
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8.4 Companies should provide the information indicated in the Guide to Principle 8
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The following material or a clear cross-reference
to the location of the material are intended to be included in the corporate governance statement in the annual report or elsewhere in the annual report (as appropriate):
· the existence and terms of any schemes for retirement benefits, other than superannuation, for non-executive directors
· an explanation of any departures from Recommendations 8.1, 8.2, 8.3 or 8.4.
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