| Corporate Governance |
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The Company is committed to implementing the highest standards of corporate governance. In determining what those high standards should involve, the Company has turned to the ASX Corporate Governance Council’s Principles of Good Corporate Governance and Best Practice Recommendations. The Company is pleased to advise that its practices are largely consistent with those of the ASX guidelines. Where the Company’s corporate governance practices do not correlate with the practices recommended by the Council, the Company does not consider that the practices are appropriate for the Company due to the size and operational history of the Company. Details of all of the Council’s recommendations can be found on the ASX Corporate Governance Council’s website at www.asx.com.au . 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 and the responsibility of the Board to oversee the activities of management in carrying out these delegated duties. In carrying out its governance role, the main task of the Board is to drive the performance of the Company. The Board must also ensure that the Company complies with all of its contractual, statutory and any other legal obligations, including the requirements of any regulatory body. The Board has the final responsibility for the successful operations of the Company. To assist the Board carry out its functions, it has developed a Code of Conduct to guide the Directors and other key executives in the performance of their roles.On the resignation of Mr. Callaghan, the Managing Director, on the 11 August 2006, Mr. O’Keeffe accepted the combined roles of Chief Executive Officer and Chairman. Composition of the Board To add value to the Company, the Board has been formed so that it has effective composition, size and commitment to adequately discharge its responsibilities and duties. Directors are appointed based on the specific governance skills required by the Company and on the independence of their decision-making and judgment. The Company recognises the importance of Non-Executive Directors and the external perspective and advice that Non-Executive Directors can offer. An Independent Director: • is a Non-Executive Director and; • is not a substantial shareholder of the Company or an officer of, or otherwise associated directly with, a substantial shareholder of the Company; • within the last three years has not been employed in an executive capacity by the Company or another group member, or been a Director after ceasing to hold any such employment; • within the last three years has not been a principal of a material professional adviser or a material consultant to the Company or another group member, or an employee materially associated with the service provided; • is not a material supplier or customer of the Company or another group member, or an officer of or otherwise associated directly or indirectly with a material supplier or customer; • has no material contractual relationship with the Company or other group member other than as a Director of the Company; • has not served on the Board for a period which could, or could reasonably be perceived to, materially interfere with the Director’s ability to act in the best interests of the Company; and • is free from any interest and any business or other relationship which could, or could reasonably be perceived to, materially interfere with the Director’s ability to act in the best interests of the Company. Responsibilities of the Board In general, the Board is responsible for, and has the authority to determine, all matters relating to the policies, practices, management and operations of the Company. It is required to do all things that may be necessary to be done in order to carry out the objectives of the Company. Without intending to limit this general role of the Board, the principal functions and responsibilities of the Board include; • Leadership of the Organisation: overseeing the Company and establishing codes of conduct that reflect the values of the Company and guide the conduct of the Board, management and employees. • 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. • Overseeing Planning Activities: overseeing the development of the Company’s strategic plan and approving that plan as well as the annual and long-term budgets. • Shareholder Liaison: ensuring effective communications with shareholders through an appropriate communications policy and promoting participation at general meetings of the Company. • Monitoring, Compliance and Risk Management: overseeing the Company’s risk management, compliance, control and accountability systems and monitoring and directing the financial and operational performance of the Company. • Company Finances: approving expenses in excess of those approved in the annual budget and approving and monitoring acquisitions, divestitures and financial and other reporting. • Human Resources: appointing, and, where appropriate, removing the executive directors as well as reviewing and monitoring the performance of the executive directors and senior management in their implementation of the Company’s strategy. • Ensuring the Health, Safety and Well-Being of Employees: in conjunction with the senior management team, developing, overseeing and reviewing the effectiveness of the Company’s occupational health and safety systems to ensure the well-being of all employees. • Delegation of Authority: delegating appropriate powers to the Chief Executive Officer to ensure the effective day-to-day management of the Company and establishing and determining the powers and functions of the Committees of the Board. Board Policies Conflicts of Interest Directors must: • disclose to the Board actual or potential conflicts of interest that may or might reasonably be thought to exist between the interests of the Director and the interests of any other parties in carrying out the activities of the Company; and • if requested by the Board, within seven days or such further period as may be permitted, take such necessary and reasonable steps to remove any conflict of interest.If a Director cannot or is unwilling to remove a conflict of interest then the Director must, as per the Corporations Act 2001, absent himself or herself from the room when discussion and/or voting occurs on matters about which the conflict relates. Commitments Each member of the Board is committed to spending sufficient time to enable them to carry out their duties as a Director of the Company. Confidentiality In accordance with legal requirements and agreed ethical standards, Directors and key executives of the Company have agreed to keep confidential, information received in the course of the exercise of their duties and will not disclose non-public information except where disclosure is authorised or legally mandated. Continuous Disclosure The Board has designated the Company Secretary as the person responsible for overseeing and coordinating disclosure of information to the ASX as well as communicating with the ASX. In accordance with the ASX Listing Rules, the Company immediately notifies the ASX of information: • concerning the Company that a reasonable person would expect to have a material effect on the price or value of the Company’s securities; and • that would, or would be likely to, influence persons who commonly invest in securities in deciding whether to acquire or dispose of the Company’s securities.Upon confirmation of receipt from the ASX, the Company makes all such information available to shareholders and other interested parties on request. Education and Induction New Directors undergo an induction process in which they are given a full briefing on the Company. This includes meetings with key executives, tours of the premises, an induction package and presentations. Information conveyed to new Directors includes: • details of the roles and responsibilities of a Director with an outline of the qualities required to be a successful Director; • formal policies on Director appointment as well as conduct and contribution expectations; • details of all relevant legal requirements; • a copy of the Board Charter; • guidelines on how the Board processes function; • details of past, recent and likely future developments relating to the Board including anticipated regulatory changes; • background information on and contact information for key people in the organisation including an outline of their roles and capabilities; • an analysis of the Company; • a synopsis of the current strategic direction of the Company including a copy of the current strategic plan and annual budget; and • a copy of the Constitution of the Company. Independent Professional Advice The Board collectively, and each Director, has the right to seek independent professional advice at the Company’s expense, up to specified limits, to assist them to carry out their responsibilities. Related Party Transactions Related party transactions include any financial transaction between a Director and the Company and will be reported in writing to each Board meeting. Unless there is an exemption under the Corporations Act 2001 from the requirement to obtain shareholder approval for the related party transaction, the Board cannot approve the transaction. Shareholder Communication The Company respects the rights of its shareholders and to facilitate the effective exercise of those rights the Company is committed to: • communicating effectively with shareholders through releases to the market via ASX, information mailed to shareholders and the general meetings of the Company; • giving shareholders ready access to balanced and understandable information about the Company and corporate proposals; • making it easy for shareholders to participate in general meetings of the Company; and • requesting the external auditor to attend the annual general meeting and be available to answer shareholder questions about the conduct of the audit and the preparation and content of the auditor’s report. The Company also makes available a telephone number for shareholders to make enquiries of the Company. Trading in Company Shares The Company has a Share Trading Policy under which Directors and certain employees and their associates may trade in the Company’s securities during the 2 weeks immediately after each of the following (“trading window”): • the release by the Company of its half-yearly results to the ASX; and • the release by the Company of its annual results to the ASX. The Share Trading Policy also allows for individuals to trade in the Company’s securities at other times provided they advise specified Company officers and that such trades are consistent with the law. Officers are prohibited from trading in the Company’s securities while in the possession of unpublished price sensitive information concerning the Company. Unpublished price sensitive information is information regarding the Company of which the market is not aware and that a reasonable person would expect to have a material effect on the price or value of the Company’s securities. Notice of an intention to trade must be given prior to trading in the Company’s securities as well as a confirmation that the person is not in possession of any unpublished price sensitive information. The completion of any such trade by a Director must also be notified to the Company Secretary who in turn advises the ASX. Performance Review/Evaluation Each year the Board conducts an evaluation of its performance. The Board’s performance is measured against both qualitative and quantitative indicators. The objective of this evaluation is to provide best practice corporate governance to the Company. Attestations by Chief Executive Officer and Finance Director In accordance with the Board’s policy, the Chief Executive Officer and Finance Director made the attestations recommended by the ASX Corporate Governance Council as to the Company’s financial condition prior to the Board signing this Annual Report. Board Committees Audit Committee The Audit Committee was formed by resolution of the Board on 25 August 2003. Below is a summary of the role, composition and responsibilities of the Audit Committee. Further details are contained in the Audit Committee’s Charter. Role The Audit Committee is responsible for reviewing the integrity of the Company’s financial reporting and overseeing the independence of the external auditors. Composition The Audit Committee consists of three members. Members are appointed by the Board from the Non-Executive Directors if possible. All members can read and understand financial statements and are otherwise financially literate. Responsibilities The Audit Committee reviews the audited annual and half-yearly financial statements and any reports which accompany published financial statements before submission to the Board and recommends their approval. The Audit Committee also recommends to the Board the appointment of the external auditor and reviews the appointment of the external auditor, their independence, the audit fee and any questions of resignation or retirement.The Audit Committee is also responsible for establishing policies on risk oversight and management. Remuneration Committee The Remuneration Committee consists of three members and was established on 4 July 2006 by a resolution of directors. Remuneration Policy The Remuneration Policy was approved by resolution of the Board on 18 February 2004. The Company is committed to remunerating its directors and senior executives in a manner that is market competitive and consistent with best practice as well as supporting the interests of shareholders. Consequently, under the Senior Executive Remuneration Policy the remuneration of senior executive may be comprised of the following: • fixed salary that is determined from a review of the market and reflects core performance requirements and expectations; • a performance bonus designed to reward actual achievement by the individual of performance objectives and for materially improved Company performance; • participation in an option scheme with thresholds approved by shareholders; • statutory superannuation contributions. By remunerating senior executives through performance and long-term incentive plans in addition to their fixed remuneration the Company aims to align the interests of senior executives with those of shareholders and increase Company performance. Nomination Committee The Nomination Committee consists of three members and was established on 4 July 2006 by a resolution of directors. The main responsibilities of the Nomination Committee are to: • conduct an annual review of the membership of the Board having regards to present and future needs of the Company; • conduct an annual review of and conclude on the independence of each director; • propose candidates for board vacancies. Criteria for Selection of Directors Directors are appointed based on the specific governance skills required by the Company. Given the size of the Company and the business that it operates, the Company aims at all times to have at least one Director with experience in the Company’s industry, appropriate to the Company’s market. Company Code of Conduct As part of its commitment to recognising the legitimate interests of stakeholders, the Company has established a Code of Conduct to guide compliance with legal and other obligations to legitimate stakeholders. These stakeholders include employees, clients, customers, government authorities, creditors and the community as a whole. The Company Code of Conduct was adopted by resolution of the Board on 18 February 2004. This Code includes the following. Responsibilities to Shareholders and the Financial Community Generally The Company complies with the spirit as well as the letter of all laws and regulations that govern shareholders’ rights. The Company has processes in place designed to ensure the truthful and factual presentation of the Company’s financial position and prepares and maintains its accounts fairly and accurately in accordance with the generally accepted accounting and financial reporting standards. Responsibilities to Clients, Customers and Consumers Each employee has an obligation to use their best efforts to deal in a fair and responsible manner with each of the Company’s clients, customers and consumers. The Company for its part is committed to providing clients, customers and consumers with fair value. Employment Practices The Company endeavours to provide a safe workplace in which there is equal opportunity for all employees at all levels of the Company. The Company does not tolerate the offering or acceptance of bribes or the misuse of Company assets or resources. Obligations Relative to Fair Trading and Dealing The Company aims to conduct its business fairly and to compete ethically and in accordance with relevant competition laws. The Company strives to deal fairly with the Company’s customers, suppliers, competitors and other employees and encourages its employees to strive to do the same. Responsibility to the Individual The Company is committed to keeping private information from employees, clients, customers, consumers and investors confidential and protected from uses other than those for which it was provided. Conflicts of Interest Employees and Directors must avoid conflicts as well as the appearance of conflicts between personal interests and the interests of the Company. |