Framework based on the best practice recommendations
The Group’s corporate governance framework has been formulated in light of the best practice recommendations released by the Australian Stock Exchange Corporate Governance Council (ASX Corporate Governance Principles and Best Practice Recommendations 2nd Edition). The Group’s framework largely complies with these principles.
Consistent with the Group’s approach to sound corporate governance, opportunities for improvement are regularly considered. Day-to-day management of the affairs of the Group and its controlled entities are delegated by the Board to the Managing Director and the Directors. The Directors are responsible to shareholders for the performance of the Group and their focus is to enhance the interests of shareholders and other key stakeholders and to ensure the Group is properly managed. The main processes that the directors of the Group use in doing so are set out in this statement.
Principle 1: Lay Solid Foundations for Management and Oversight
The Directors must act in the best interest of the Group and in general are responsible for, and have the authority to determine, all matters relating to the policies, management and operations of the Group.
Specific responsibilities of the Board include:
- Protecting the reputation of the Group
- Appointment and removal of the Chief Executive Officer and any senior executives
- Ensuring appropriate resources are available to senior management
- Providing strategic direction for the Group’s corporate strategy
Day to day management of the Group and implementation of Board policies and strategies is carried out by the Managing Director.
The Group’s management comprises the Chairman (Christopher Bregenhoj) and Benjamin Doyle as Non-Executive Directors, James Manning as Managing Director and Christopher Bregenhoj as Company Secretary. The objective of the Group’s executive reward framework is to ensure reward for performance is competitive and appropriate for the results delivered.
The board ensures that executive reward satisfies the following criteria for good reward governance practices:
- Competitiveness and reasonableness
- Acceptability to shareholders
- Capital management
The remuneration structure for directors, secretaries and any senior managers is based on the following factors:
- Experience of the individual concerned
Performance of senior executives is reviewed by the Board as part of the ordinary course of meetings of the Directors. There have been no departures from Principle 1 during the period ending 31 March 2015.
Principle 2: Structure The Bard to Add Value
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Vertua will generally collect this information by way of your voluntary registration over the internet, by phone, facsimile and email and in the course of interviews. Otherwise, Vertua will not collect or monitor any personal information about you without your consent.
When you visit the Site, we may record, for statistical purposes or in order to improve the Site or services provided by Vertua, the following information:
a – the date and time of your visit;
b – web pages you have accessed;
c – documents you have downloaded;
d – your IP address; and
e – the type of operating system and internet browser you use.
Where it is lawful or practicable to do so, we will provide you with the option of remaining anonymous when dealing with Vertua.
Principle 3: Promote Ethical and Responsible Decision Making
As part of the Board’s commitment to the highest standard of conduct, the Group adopts a code of conduct to guide management in carrying out their duties and responsibilities as follows.
All directors and consultants of the Group have the following duties:
- To act honestly, fairly and without prejudice in all commercial dealings and to conduct business with professional courtesy and integrity
- To use the powers of their office for a proper purpose and in the best interest of the Group
- To comply with the letter and spirit of the law and with the principles of this Code
- Not to knowingly make any misleading statements to any person or to be a party to any improper practice in relation to dealings with or by the Group
- To ensure that the Group’s resources and property are used properly, and
- Not to disclose information or documents relating to the Group or its business, other than as required by law, not to make any unauthorised public comment on the Group’s affairs and not to misuse any information about the Group or its associates.
The board endeavours to ensure that the directors, officers of the Group act with integrity and observe the highest standards of behaviour and business ethics in relation to their corporate activities. Specifically, that the directors and officers of the Group must:
- Comply with the law
- Act in the best interests of the Group
- Be responsible and accountable for their actions, and
- Observe the ethical principles of fairness, honesty and truthfulness, including disclosure of potential conflicts.
The Group’s policy regarding directors and officers trading in its securities is set by the board of directors. The policy restricts directors and officers from acting on material information until it has been released to the market and adequate time has been given for this to be reflected in the security’s prices.
The Group has set the following trading blackouts for Directors, Officers and employees. In the absence of a trading blackouts event defined below shares may be traded in the Company:
- No trading in the 30 days prior to the release to the National Stock Exchange of the Group’s preliminary half and full year financial statements.
- No trading on the date of the Annual General Meeting
- No trading when there has been provision of any management accounts which materially affect the budgeted performance of the group.
There have been the following departures from Principle 3 during the year ending 31 March 2015:
Recommendation 3.2 and 3.3 – The Board has not established a policy on diversity or measurable objectives for achieving gender diversity. The reason for this departure is due to the small size of the Group but the Board will review these recommendations in due course. The Group has no employees and no women as members of the board.
Principle 4: Safeguard Integrity in Financial Reporting
The Board has established an Audit and Risk Committee, which provides assistance to the Board in fulfilling its corporate governance responsibilities in relation to the Group’s financial reporting, internal controls structure, risk management systems and external audit functions.
The Board has adopted a formal Charter for the Committee to assist in carrying out its duties.The members of the Audit, Risk Committee are: Mr. Christopher Bregenhoj – (Chairman) and Mr. Benjamin Doyle – (Non-Executive Director). The Audit and Risk Committee met once during the period.
There has been the following departures from Principle 4 during the period ending 31 March 2015:
Recommendation 4.2 – The Audit and Risk Committee consists of all three directors, which includes Mr. Manning as the Managing Director. The Chairman is the Chairman of the Board, but is the only independent, accordingly it was considered that his independence superseded the non-independence of the other directors. As a result of majority non independent committee the company is non compliant.
The reason for the departure is the small nature of the board and company.
Principle 5: Make Timely and Balanced Disclosure
A listed entity should make timely and balanced disclosure of all matters concerning it that a reasonable person would expect to have a material effect on the price or value of its securities.
There have been the following departures from Principle 5 during the year ending 31 March 2015:
Recommendations 5.1 – Due to the size and nature of the Group, the Board does not have written policies on disclosure. However the Group has the following principles in place:
- The Group will not endorse reports on its operations prepared by third parties.
- The Group will not respond to speculation and rumour except as required by the NSX.
- The Chairman, who is also the Company Secretary, has been appointed as the person responsible for communications with the NSX.
- The Board is responsible for ensuring the compliance with the continuous disclosure requirements in the NSX listing rules and overseeing and co-ordinating information disclosure to the NSX.
- All material will be lodged as soon as practicable with the NSX.
- No undisclosed price sensitive information will be disclosed in any analyst meeting.
Principle 6: Respect The Rights of Shareholders
The Board and the Company Secretary are responsible for the communications strategy to promote effective communications with shareholders and encourage effective participation at general meetings. The Group adheres to best practice in its preparation of Notices of Meetings to ensure all shareholders are fully informed. Due to the size of the Group, all communications are prepared and administered in-house.
The Group actively encourages communications with their shareholders and have made available all forms of contact; phone, email, facsimile and post details on their website at www.vertua.com.au should any shareholder have a query.
The Group’s Half and Full Year Reports are a significant means of communicating to shareholders the Group’s activities, operations and performance over the past financial period. In accordance with the Group’s disclosure principles, these are publicly available on the NSX website.
There have been no departures from Principle 6 during the period ending 31 March 2015.
Principle 7: Recognise and Manage Risk
The Board has established the Audit & Risk Committee, which comprises all 3 members of the board. The Audit and Risk Committee is chaired by Mr. Bregenhoj, who is also the Chairman of Vertua Ltd, significantly Mr. Bregenhoj is the only true independent director on the Board.
The committee’s role is to be responsible for the oversight of the group. This includes the review of systems and internal controls. The Board constantly monitors the operation and financial aspects of Group activities and considers the recommendations and advice of external auditors and other external advisers on the operations and financial aspect of the Group activities.
The Board reviews and ensures that recommendations made by the external auditors and other external advisers are investigated and, where considered necessary, appropriate action is taken to ensure that the Group has an appropriate internal control environment in place to manage the key risks identified.
In addition, 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.
The Group obtains statements from directors who are delegated with specific responsibilities that:
The Group’s financial reports present a true and fair view in all material respects, of the Group’s financial condition and operational results are in accordance with the relevant accounting standards. Furthermore, the board of directors does, in its role, state to shareholders in the Group’s accounts that they are true and fair, in all material respects the integrity of the financial statements is founded on a sound system of risk management and internal compliance and control which implements policies adopted by the board. The Group’s risk management and internal compliance and control system is operating efficiently and effectively in all material respects.
Departure from Recommendation 7.1
The board consists of 3 members, with the Chairman the only independent. Accordingly the departure of recommendation 7.1 is that it does not consist of a majority of non-independent directors.
The board considered that the departure from Recommendation 7.1 is suitable given the size and complexity of the Company.
Departure from Recommendation 7.2
The Audit and Risk Committee did not meet and review the material risks during the period with respect of the newly acquired business, Horizon Print Management. The Board did not consider it necessary in the context of the extensive due diligence undertaken up to the end of February.
Principle 8: Remunerate Fairly and Responsible
The Group does not have any scheme for retirement benefits for any directors.
Further information on directors’ and executives’ remuneration, including principles used to determine remuneration, is set out in the Directors’ Report under the heading “Remuneration Report”.
There have been the following departures from Principle 8 during the period ending 31 March 2015:
Recommendations 8.1 – Due to the size and nature of the Group, the Board has not yet established a remuneration committee. As a result, the functions ordinarily undertaken by a remuneration committee are undertaken by the Board.