Corporate governance

The primary role of the Aspermont Board (Board) is the protection and enhancement of long-term shareholder value. The Board is accountable to shareholders for the performance of the company. It directs and monitors the business and affairs of the company on behalf of shareholders and is responsible for the company's overall corporate governance.

The company is committed to a governance framework using the Australian Securities Exchanges (ASX) Principles of Good Governance and Best Practice Recommendations. Full details regarding the company's corporate governance framework can be obtained from the corporate web-site at www.aspermont.com.

The company has complied with all the best practice recommendations of the ASX Corporate Governance Council for the year ended 30 June 2009 unless otherwise disclosed below:

A company should lay solid foundations for management and oversight

The company has developed a Board charter that determines the functions reserved for the Board and those delegated to executive management. The Board charter includes executive appointments, strategic direction, monitoring performance, risk management, approval of business plans and budgets and any other matter impacting business direction and shareholder interests.

Executive responsibilities are clearly defined through job descriptions, delegated authority guidelines and monitored through regular performance appraisals.

A company should structure the board to add value

The departures from ASX recommendations are:

i. Principle 2.1 Only one of the three directors is considered to be independent.
ii. Principle 2.2 Chairman should be an independent director.

Only a minority of the Board is independent. Mr. L.G. Cross is an experienced independent company director. He is the principal of the firm Crosscorp Accounting Services.

Mr. A.L. Kent and Mr. J. Stark have material interests in the company as shareholders. Both Mr. Kent and Mr. Stark have considerable industry and commercial experience and continue to provide guidance to the company's strategic direction. The Chairman, Mr. Kent, is the company's largest shareholder. Mr. Kent was the Chief Executive Officer of the company from 2000 to 2005 and has considerable knowledge of the company's operations and products.

The Board charter provides appropriate parameters to all board members on the scope and performance of their duties as custodians of shareholder interests. The Board is supported by the Remuneration Committee and Audit & Risk Committee which both support the Board in the discharge of Board responsibilities in specialist areas and whose respective committee charters allow for a high degree of external consultative involvement from independent advisors.

The directors have full access to the regular financial reports and budgets of the company. All members have unrestricted access to the Chairman, executive officers and, subject to prior consultation with the Chairman, may seek independent professional advice at the company's expense.
The Board's composition of three directors is currently appropriate to the size and scope of the company in its present form. The Board regularly consults with external advisors on specialist matters reserved for the Remuneration and Audit & Risk Committees. The skills and experience of each board member are outlined within the directors' report.

A company should promote ethical and responsible decision making

The company has established policies regarding trading in securities by directors and executive officers. A code of conduct applies to all directors, executive officers and employees of the company.

A company should safeguard integrity in financial reporting

A separate Audit & Risk Committee has been established to ensure the appropriate amount of diligence is applied to the areas of financial reporting, internal controls, compliance and risk. The Chief Executive Officer and Chief Financial Officer provide certifications that the company's financial reports are complete and present a true and fair view.

A company should make timely and balanced disclosures

The company seeks to provide relevant and timely disclosure to shareholders in accordance with the Corporations Act 2001 and ASX Listing Rules. The Company Secretary is nominated to ensure the company meets its obligations to the broader market for continuous disclosure.

A company should respect the right of shareholders

A robust communication structure is in place to ensure shareholders can access relevant and timely information through various mediums. All information disclosed to the ASX is posted on the company's website as soon as it is disclosed to the ASX. The company website also has an option for shareholders to register their e-mail address for direct e-mail updates on company matters.

A company should recognize and manage risk

The Board, through the audit committee, is responsible for ensuring there are adequate policies in relation to risk management, compliance and internal control systems. In summary, the company policies are designed to ensure strategic, operational, legal, reputational and financial risks are identified, assessed, effectively and efficiently managed and monitored to enable achievement of the Group's business objectives.

A company should remunerate fairly and responsibly

The Remuneration Committee of the Board whose scope includes obtaining independent input from external advisors determines remuneration levels for the Chairman and key executives with regard to market-based factors and achievement of performance targets. External advice is sought as necessary to ensure remuneration levels are fair and responsible having regard to the current size and scope of the company. Full disclosure of remuneration to directors and executives of the company are disclosed in the Remuneration Report.