WELCOME TO DEEP YELLOW LIMITED
ABN: 97 006 391 948
CORPORATE
CORPORATE GOVERNANCE
CORPORATE GOVERNANCE STATEMENT
INTRODUCTION
The Board strongly supports the establishment
and ongoing development of corporate governance framework to
ensure that its practices are responsible and meet the needs
of shareholders.
The Company operates in accordance with the
principles of corporate governance as set out by the ASX
Corporate Governance Council and as required by the ASX
Listing Rules. The Directors have implemented policies and
practices which they believe will focus their attention and
that of their Senior Executives on accountability, risk
management and ethical conduct.
This Statement sets out the corporate
governance practices in place as at the date of this report
all of which comply with the principles and recommendations of
the ASX Corporate Governance Council unless otherwise stated.
Corporate Governance Council Recommendation
1
Role of the Board of Directors
The Board guides and monitors the business and
management of the Company on behalf of shareholders by whom
they are elected and to whom they are accountable.
In order to fulfil this role, the Board is
responsible for the overall corporate governance of the
Company including formulating its strategic direction, setting
remuneration and monitoring the performance of Directors and
Executives. The Board relies on Senior Executives to assist it
in approving and monitoring expenditure, ensuring the
integrity of internal controls and management information
systems and monitoring financial and other reporting.
The Board has adopted a Board
Charter which clarifies the respective roles of the Board
and senior management and assists in decision making
processes.
Board processes
The full Board currently holds six scheduled
meetings each year, plus any extraordinary meetings at such
other times as may be necessary.
An agenda for the meetings has been determined
to ensure certain standing information is addressed and other
items which are relevant to reporting deadlines and or regular
review are scheduled when appropriate. The agenda is reviewed
by the Chairman and the Managing Director.
Corporate Governance Council Recommendation
2
Board Composition
The Constitution of the Company provides that
the number of Directors shall not be less than three. There is
no requirement for any shareholding qualification.
The membership of the Board, its activities
and composition is subject to periodic review. The criteria
for determining the identification and appointment of a
suitable candidate for the Board shall include the quality of
the individual, background of experience and achievement,
compatibility with other Board members, credibility within the
scope of activities of the Company, intellectual ability to
contribute to Board duties and physical ability to undertake
Board duties and responsibilities.
Directors are initially appointed by the Board
and are subject to re-election by shareholders at the next
general meeting. In any event one third of the Directors are
subject to re-election by shareholders at each annual general
meeting.
The Board is presently comprised of six
members, four Non-Executive and two Executive.
-
Mr Mervyn Greene - Chairman
(Non-Executive)
-
Dr Leon Pretorius - Managing
Director
-
Mr Martin Kavanagh - Executive
Director
-
Ms Gillian Swaby - Non-Executive
-
Mr Rudolf Brunovs - Non-Executive
Independent
-
Mr Tony McDonald - Non-Executive
Independent
Directors are expected to bring independent
views and judgement to the Board's deliberations. Two of the
Non-Executive Directors are considered by the Board to be
independent. In considering whether or not a Director is
independent the Board has regard to the independence criteria
set out in the ASX Corporate Governance Council's Principles
and Recommendations.
The Chairman is not independent and therefore
the Company has not complied with recommendation 2.2 of the
Corporate Governance Council. Two of the six Directors are
considered to satisfy the test of independence as set out in
the principles and recommendations. The Board considers that
both its structure and composition are appropriate given the
size of the Company and that the interests of the Company and
its shareholders are well met.
The selection and appointment process for
Directors is carried out by the full Board. The Board
considers that given the importance of Board composition it is
appropriate that all members of the Board participate in such
decision making.
Corporate Governance Council Recommendation
3
Ethical and Responsible Decision Making
The Board actively promotes ethical and
responsible decision making.
Code of Conduct
The Board has adopted a Code
of Conduct that applies to Directors and key Executives of
the Company. This Code addresses expectations for conduct in
accordance with legal requirements and agreed ethical
standards.
In addition the Board has adopted an Ethics
and Conduct Policy which applies to all employees,
consultants and Directors.
The Ethics and Conduct Policy addresses the
following:
Securities Trading Policy
The Board is committed to ensuring that the
Company, its Directors and Senior Executives comply with their
legal obligations as well as conducting their business in a
transparent and ethical manner. Directors and Senior
Executives (including their immediate family or any entity for
which they control investment decisions), must ensure that any
trading in securities issued by the Company is undertaken
within the framework set out in the Securities
Trading Policy.
The Policy does not prevent Directors and
Senior Executives (including their immediate family or any
entity for which they control investment decisions) from
participating in any share plan or share offers established or
made by the Company, provided that at the time the individual
is not in possession of any price sensitive information, not
otherwise generally available to all security holders.
The Board has a policy which prohibits trading
in the securities of the Company by Directors and Senior
Executives and nominated employees prior to written consent
being obtained from the Chairman or Managing Director.
Corporate Governance Council Recommendation
4
Integrity in Financial Reporting
The Board requires the Managing Director and
the Company Secretary to provide a written statement that the
financial statements of the Company present a true and fair
view, in all material aspects, of the financial position and
performance and have been prepared in accordance with
Australian accounting standards and the Corporations Act.
Until 7 August 2007, when an additional two
Non-Executive Directors were appointed, the full Board
fulfilled the role of an Audit Committee. An Audit Committee
comprising of three of the four Non-Executive Directors was
formed on the 7 August 2007. The members of the Audit
Committee are listed in the Directors' details section of the
Directors' Report.
The Audit Committee operates under a Charter (Audit
Committee Charter). Their responsibilities include the
appointment, compensation and oversight of the independent
auditor and the review of the published financial reports.
The Board relies on Senior Executives to
monitor the internal controls within the Company. Financial
performance is monitored on a regular basis by the Managing
Director who reports to the Board at the scheduled Board
Meetings.
Corporate Governance Council Recommendation
5
Timely and Balanced Disclosure
The Board is committed to the promotion of
investor confidence by providing full and timely information
to all security holders and market participants about the
Company's activities and to comply with the continuous
disclosure requirements contained in the Corporations Act 2001
and the Australian Stock Exchange Listing Rules. The Company
has adopted a Continuous
Disclosure Policy designed to ensure compliance with the
ASX Listing Rule Requirements.
Continuous disclosure is discussed at all
regular Board meetings and on an ongoing basis the Board
ensures that all activities are reviewed with a view to the
necessity for disclosure to security holders.
In accordance with ASX Listing Rules the
Company Secretary has been appointed as the Company's
disclosure officer.
Corporate Governance Council Recommendation
6
Rights of Security Holders
Communications
The Board supports practices that provide
effective and clear communications with security holders and
allow security holder participation at general meetings. A
formal Shareholder
Communications Policy has been adopted.
In addition to electronic communication via
the ASX web site, the Company publishes all ASX announcements
together with all quarterly reports. These documents are
available in both hardcopy on request and on the Company web
site at www.deepyellow.com.au. In addition a 'user friendly'
interactive Annual Report will be available on the website.
The website provides shareholders and others
interested in the Company the opportunity to receive
additional information by registering to receive by email
press releases and other materials posted to the website.
Shareholders are able to pose questions on the
audit process and the financial statements directly to the
independent auditor who attends the Company Annual General
Meeting for that purpose.
Corporate Governance Council Recommendation
7
Recognise and Manage Risk
Risk management
The Board is responsible for supervising
management's framework of control and accountability systems
to enable risk to be assessed and managed. The Board and
Senior Executives regularly review, where necessary in
conjunction with external professional consultants, procedures
in respect of compliance with and the maintenance of its
statutory, legal, ethical and environmental obligations.
To assist in the management of risk the Board
has adopted an Occupational
Health and Safety Policy, Environmental
Policy and Ethics
and Conduct Policy.
Corporate Governance Council Recommendation
8
Encourage Enhanced Performance
Performance review
The Board has not undertaken a formal review
of its performance for the year ended 30 June 2007.
Recent changes to the Board composition will
precipitate the adopting of procedures for the evaluation of
the Directors and senior management on a more formal basis and
a review will be undertaken in the 2008 financial year.
Education
All Executives and Directors are encouraged to
attend professional education courses relevant to their roles.
Independent professional advice and access
to information
Each Director has the right to access all
relevant information in respect to the Company and to make
appropriate enquiries of senior management.
Corporate Governance Council Recommendation
9
Remunerate Fairly and Responsibly
The Executive Directors and Senior Executives
receive salary packages which may include performance based
components designed to reward and motivate. Non-Executive
Directors receive fees agreed on an annual basis by the Board.
The Remuneration Committee is responsible for
reviewing and recommending to the Board, performance criteria,
performance monitors, share option schemes, incentive
performance schemes, superannuation entitlements, retirement
and termination entitlements and professional indemnity and
liability insurance cover.
Until 7 August 2007, when an additional two
Non-Executive Directors were appointed, the full Board
fulfilled the role of a Remuneration Committee. A Remuneration
Committee comprising all four Non-Executive Directors was
formed on 7 August 2007 and operates under a Charter (Remuneration
Committee Charter).
Corporate Governance Council Recommendation
10
Recognise the Legitimate Interests of
Stakeholders
The Board acknowledges and supports the rights
of stakeholders and has adopted an Ethics
and Conduct Policy which is detailed above under the
Corporate Governance Council Recommendation 3.
The Corporate
Governance Statement
is a summary of the Company's governance policies
and procedures which was adopted by
the Deep Yellow Limited Board on 24 September 2007.
View Individual Policies
