The following statement outlines the principal Corporate Governance practices and procedures that were in place throughout the financial year and the extent to which they depart from the second edition of best practice recommendations of the ASX Corporate Governance Council released in August 2007.

Board Charter

Values Statement

The values of the Company are trust, honesty and integrity. The Board carries out the legal duties of its role in accordance with those values and having appropriate regard to the interests of the Company’s customers, staff, shareholders and the broader community in which it operates.

Roles of the Board and Management

The Board of Directors is responsible for the Corporate Governance practices of the Company including the direction and oversight of the Company’s business on behalf of the shareholders. Responsibility for the formulation of strategy and management of day-to-day operations and administration, is delegated by the Board of Directors to the Managing Director, Mr. R E Bradley.

Policy and other functions of the Board of Directors include:

• approving goals, strategy and plans for the Company’s direction formulated by management and monitoring their implementation;
• ensuring appropriate resources are available to undertake those strategies;
• the appointment and supervision of the Chief Executive Officer and secretary of the Company and ensuring that they are appropriately qualified and experienced to discharge their respective responsibilities;
• receiving and approving management recommendations such as for capital expenditure and monitoring the Company’s financial performance and results on a monthly basis;
• ensuring appropriate management control and accountability systems are in place and monitoring the corporate conduct of the Company’s Officers;
• identifying areas of significant business risk and the management of those risks;
• reviewing published reports and stock exchange announcements to ensure their accuracy and compliance with statutory  requirements;
• ensuring compliance with the continuous disclosure requirements of the ASX Listing Rules and the Corporations Act;
• meeting statutory, regulatory and other reporting requirements of the Corporations Act and the ASX Listing Rules; and
• the establishment and maintenance of appropriate ethical standards for the Company, its Directors and Executives.

The Board of Directors meets monthly and Directors receive comprehensive Board papers which include a report from each senior manager, as well as sales reports and management accounts. At meetings of the Board the Directors deal with the various policy and Corporate Governance matters set out above.

The Company recognises the need for Directors and employees to observe the highest standards of behaviour and business ethics when engaging in corporate activity. All Directors and employees are expected to act in accordance with the law and with the highest standards of propriety.

Separate sub-committees of the Board have been formed. These comprise an audit sub-committee and a remuneration and

nomination sub-committee. The composition and delegated functions of these sub-committees are set out below.

Structure of the Board of Directors and fundamental terms

The composition of the Board of Directors is determined by the remuneration and nomination committee using the following principles which accord with the following ASX Corporate Governance Council recommendations:

• The Chairman should be an independent Director; and
• The roles of Chairman and Chief Executive should not be exercised by the same individual;

The Board of Directors must regularly assess the independence of each Director in light of the interests they have disclosed and such other factors as the Board of Directors determines are appropriate to take into account in determining whether the Director is independent of management and free of any business or other relationship that could materially interfere with or could be perceived to materially interfere with, the exercise of their unfettered and independent judgement.

The Directors’ terms of appointment are governed by the Constitution and one-third of the Directors and any Directors who have held office for three years or more (excluding the Managing Director) must retire at each annual general meeting of members.

Each Director has the right to seek independent professional advice at the Company’s cost, subject to the prior approval of the Chairman, which may not be unreasonably withheld, and the other Directors being given a copy of such advice.

Remuneration and nomination sub-committee

The Board of Directors has established a remuneration and nomination committee.

On an annual basis the committee reviews the remuneration and performance of the Managing Director and senior Executives and makes recommendations on remuneration packages for Directors and senior Executives and terms of employment generally.

This committee also reviews the composition of the Board of Directors to ensure that it comprises an appropriate mix of skills and experience. When a vacancy exists on the Board of Directors, or where it is considered that a Director with particular skills or experience is required, the committee selects a panel of candidates with the appropriate expertise and experience from which the most suitable candidate is identified on merit. Ultimately, an appropriate recommendation is made to the shareholders to approve any changes to the composition to the Board of Directors.

Audit sub-committee

The key matters dealt with by the audit sub-committee include the review of:

• The annual and half-year financial reports prior to their approval by the Board of Directors;
• The adequacy of existing external audit arrangements, with particular emphasis on the scope and quality of the audit and the independence of the external Auditor;
• All areas of significant financial risk and the arrangements in place to contain those risks to acceptable levels;
• Any management letter sent by the external Auditor to the Company;
• The effectiveness of management information or other systems of internal control;
• The financial statements of the Company with both management and external Auditors; and
• Monitoring of compliance with the requirements of the Corporations Act, ASX Listing Rules, Australian Taxation Office and financial institutions.

The Managing Director and the Finance Director are required to confirm to the Board that, for each financial reporting period, the Company’s financial reports present a true and fair view, in all material respects, of the Company’s financial position and operational results and are in accordance with relevant accounting standards.

The Audit Committee has a formal charter - to view click here

Significant Policies

Set out below and on the Company web site are the following significant policies instigated and monitored by the Board of Directors under the terms of the above Charter: Share trading policy; Continuous disclosure; Shareholder communication; Risk management; Performance and evaluation of Directors and Executives; and Remuneration of Directors and Executives.

Share trading policy

No Director, senior Executive or employee shall purchase or sell Company securities, or securities of a company in a “special relationship” with the Company, while in possession of material information concerning the Company or such a Company that has not previously been generally disclosed to the investing public for at least two business days. Nor shall an employee inform any individual or entity of any such material information, except in the necessary course of business.

Employees are encouraged to invest in the Company’s securities, but must avoid trading when in possession of confidential material information which, if generally available, would reasonably be expected to either have an effect on the market price or value of those securities or affect an investor’s decision as to whether to buy, sell or hold securities in the Company.

Directors and Executives are required to give prior notice to the Chairman of any dealings in Company securities by  themselves or their associates and to provide particulars of any transactions immediately following execution. The Secretary is to make the requisite notifications to ASX following the transaction finalisation.

Continuous disclosure

All Directors, senior Executives and employees have been made aware of the continuous disclosure requirements of the ASX Listing Rules and have been provided with a copy of the relevant rules and guidance notes. Continuous disclosure is included on the agenda for all formal meetings of the Directors. Directors and senior Executives are made aware of the constraints applicable to private briefings and broker and analyst presentations.

The Directors have allocated responsibility to the Managing Director and the Company Secretary to alert the Board of Directors to any operational or regulatory matters respectively which they consider may require disclosure to the market under the continuous disclosure requirements of the ASX Listing Rules. The Directors then consider and approve the form of any such announcement.

All Company announcements require the approval of the Chairman with provision for available Directors to approve urgent

announcements. The Company Secretary is responsible for communication with ASX. The Chairman is responsible for all media contact and comment.

Shareholder communication

The Company communicates with its shareholders through ASX announcements, quarterly newsletters, the half-year report, the annual report and the annual general meeting. Copies of all such ASX announcements, newsletters and reports are posted to the Company website.

The independent Auditor will attend the annual general meeting to respond to questions from shareholders on the conduct of the audit and the preparation and content of the audit report.

Risk management

The Board of Directors has accepted the role of identification, assessment, monitoring and managing the significant areas of risk applicable to the Company and its operations. It has not established a separate committee to deal with these matters, as the Directors consider the size of the Company and its operations does not warrant a separate committee at this time. The Board of Directors has identified the significant areas of risk applicable to the Company and its operations and considers the matter of risk management on an on-going basis at its monthly meetings.

Performance evaluation of Directors and Executives

The remuneration and nomination committee is required to undertake a review of the performance of Directors, and senior Executives on an annual basis.

Remuneration of Directors and Executives

In accordance with the constitution of the Company, shareholders determine the aggregate remuneration of the Non-executive Directors, the maximum aggregate remuneration for Non-executive Directors is currently $500,000. The Directors determine the allocation of the aggregate remuneration, or part thereof, between themselves.

There are no schemes or provisions for retirement benefits for Non-executive Directors other than statutory benefits and accumulated superannuation.

(Particulars as to the remuneration of the Directors and senior Executives during the year ended 31 December 2009 are set out in the accompanying notes to the financial statements.)

Composition of Board of Directors and Sub-Committees

Changes to the Board of Directors in recent years have resulted in the Board of Directors having a greater mix of skills and experience and an increase in the number of Executive Directors to the extent that the composition does not comply with the ASX Corporate Governance Council recommendations in that it does not comprise a majority of independent, Non-executive Directors. This has been considered by the remuneration and nomination committee who consider that the advantages of the greater mix of skills and experience and the direct insight into the day to day operations of the business outweigh any issues relating to having a minority of Non-executive independent Directors. The remuneration and nomination committee and the Board of Directors have therefore concluded that the current composition of the Board of Directors is appropriate to help the Company achieve its goals, strategies and plans whilst maintaining overall compliance with the Corporate Governance practices and procedures to the extent outlined in this statement and that the composition of the Board of Directors will continue to be reviewed on a regular basis by the remuneration and nomination committee.

The Board has considered the independence of each of the Directors and has determined that both Non-executive Directors, including the Chairman, are independent.

In the event that a potential conflict of interest may arise, involved Directors withdraw from deliberations concerning the matter.

The Directors of the Company in office at the date of this statement are:

Mr. Geoffrey Charles Wild AM (Non-executive Chairman)

Mr. Richard Edward Bradley (Managing Director and CEO)

Mr. Graham Richard Libbesson (Non-executive Director)

Mr. Stuart Matthew Clark (Finance Director)

Mr. Cameron Arthur Brown (Sales & Marketing Director)

Mr. Andrew Jake Roberts (Client Services Director)

The skills and experience of each of these Directors is set out in the accompanying Directors’ report. Two of the six Directors are Nonexecutive, including the Chairman, and the roles of Chairman and Chief Executive are not exercised by the same individual.

At the date of this statement, the remuneration and nomination sub-committee consists of the Chairman, Mr. Geoffrey C Wild AM and Mr. Graham R Libbesson, both Non-executive Directors. Mr. Wild is Chairman of the remuneration and nomination sub-committee.

The audit sub-committee established by the company currently also consists of the two Non-executive Directors: Mr. Geoffrey C Wild AM and Mr. Graham R Libbesson. Mr. Libbesson acts as Chairman of the audit sub-committee. The Managing Director, the Finance Director and external Auditors are invited to attend meetings from time to time. The audit sub-committee meets at least twice a year. Particulars of committee meetings held during the year ended 31 December 2009 and the attendance of each committee member is set out in the accompanying Directors’ report.

The dates on which each Director was appointed and last re-elected are as follows:

Note 1: Mr. Andrew J Roberts and Mr. Cameron A Brown are standing for re-election at the 2010 annual general meeting to be held on 20 May 2010 to comply with the requirement under the Constitution that one-third of Directors must retire at each annual general meeting.

Code of Conduct

Board members, Executive management and Company Officers are made aware of the requirements to follow corporate policies and procedures, to obey the law and to maintain appropriate standards of honesty and integrity at all times. In this regard the Directors have adopted a code of conduct for Directors, senior Executives and employees which “inter alia” deals with compliance with legal and other obligations to legitimate stakeholders. More specifically, the code of conduct covers ethical operations, compliance with laws, dealings with customers and public officials, conflicts of interest, confidential and proprietary information and insider trading. The code of conduct underpins the formal charter and all policies of the Company. To view the Code of Conduct click here.