Principles:    1  |  2  |  3  |  4  |  5  |  6  |  7  |  8  |  9  |  10

The primary role of the Aspermont 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.

Responsibility for managing, directing and promoting the profitable operation and development of the company, consistent with the primary objective of enhancing long term shareholder value, is delegated to the Managing Director, who is accountable to the board.

In March 2004 the Australian Stock Exchange Corporate Governance Council released its Principles of Good Governance and Best Practice Recommendations. The board has continued to review the recommendations and in many cases the company continues to achieve the standard required. In some cases the company has not met the recommendations due to these being unduly onerous for a company of this size and its current business development phase.

The following sets out the company's position in relation to corporate governance specifically the 10 principles contained in the ASX Corporate Governance Council's report.

Principle 1: 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 management. The relationship between the board and senior management is important to the group's long-term success. The Board responsibilities include: appointing the Managing Director / Chief Executive Officer and succession planning, approving major strategic plans, monitoring the integrity and consistency of management's control of risk, agreeing business plans and budgets, approving major capital expenditure, acquisitions and divestments, approving funding plans and capital raisings, agreeing corporate goals and reviewing performance against approved plans.

Principle 2: Structure the board to add value

The company has a board of three directors comprising the Managing Director/Chairman and two non-executive directors. Of the three directors the board considers that Mr Lewis Cross is independent after reviewing the ASX Corporate Governance council's definition of independence and considering materiality. Crosscorp Accounting Services of which Mr Cross is the principal does provide minor services to the company at normal commercial rates. Mr Cross is also an experienced company director. The board does not have a majority of independent directors but after considering the needs of the company at this time and the board policies which have been put in place , it is the view of the board that it is not in the interests of shareholders to incur the expense of additional directors at this time.

The Chairman of the board Mr Andrew Kent has also filled the role of Chief Executive Officer in the past. The board has considered the best practice recommendations and the needs of the business and has resolved to appoint a Chief Executive Officer during the last quarter of 2005.  A description of the skills and experience of all the directors is included in the Director's report.

Each Director has the right of access to all relevant company information and to the company's executives and subject to prior consultation with the chairman, may seek independent professional advice at the company's expense.

Principle 3: Promote ethical and responsible decision-making

The company has an established policy regarding trading in its securities by directors and officers. Directors and employees must not, directly or indirectly, buy or sell shares or other securities in the company, when in possession of unpublished price sensitive information, which could materially affect the value of those securities. The company also has a formal code of conduct as part of its board charter.

Principal 4: Safeguard integrity in financial reporting

The Executive Chairman and Chief Financial Officer have made the following certifications to the board:

• That the company's financial reports are complete and present a true and fair view, in all material respects of the financial condition and operational results of the company and group.

• That the above statement is founded on a system of internal control and risk management.

Due to its size the board as a whole acts as the audit and risk management committee. The full board consists of only three directors and has formed the view that it is more efficient for the board as a whole to deal with matters that would otherwise be dealt with by an audit committee. The board has assessed and reviews external and internal audits and any material issues arising from those audits. The board has taken the following steps to safeguard the integrity of its financial report

• Assesses and reviews the accounting policies and practices of the group as an integral part of reviewing the half year and full year accounts.

• Board meetings are scheduled prior to approval of the annual accounts to ensure that those reports are considered in detail and that there is adequate opportunity for changes to be made or explanations to be provided by management.

• Mr Lewis Cross who is a certified practicing accountant takes a lead directors role when the board is carrying out functions that would otherwise be dealt with by an audit committee. 

• Makes recommendations regarding the appointment of external auditors and the level of their fees and provides a facility, if necessary, to discuss any concerns raised by the internal and external auditors independently of management influence.

The external auditors meet privately with the board at least once per year.

Principal 5: Make timely and balanced disclosure

The Company Secretary has been nominated as the person responsible for communications with the Australian Stock Exchange (ASX). The company seeks to provide relevant and timely information to its shareholders and is committed to fulfilling its obligations to the broader market for continuous disclosure. The company aims to ensure timely provision and equal access to material information about the company.

The board has ensured that the procedure for identifying and disclosing material and price sensitive information is in accordance with the Corporations Act 2001 and the ASX Listing Rules. The company does not have a formal written policy regarding disclosure but uses strong communication between the board and management to identify and approve information for disclosure.

The Aspermont Ltd website contains copies of our annual and half year reports, ASX announcements, investor relations publications, briefings and presentations given by executives plus links to information on our products and services.

Principal 6: Respect the rights of shareholders

All information disclosed to the ASX is posted on the company's web site as soon as confirmation is received from the ASX. Shareholders may register on the site to receive electronic notification of releases of information by the company. A copy of the company's annual report and notice of annual general meeting is sent to all shareholders.

For many years the company has requested the external auditor to attend general meetings and this has been supported by the company's auditors, MSI Marsdens.

Principal 7: Recognise and manage risk

The Board has in place risk management programs aimed at ensuring the company conducts its operations in a manner that allows risks to be identified, assessed and appropriately managed. The Company Secretary and Chief Operating Officer reporting to the Executive Chairman manage the company's internal controls and risk management. During the year ending June 2005 the company has been reviewing and improving its safety, risk identification and management processes including a recent ergonomic assessment of staff workstations.

Principal 8: Encourage enhanced performance

Due to the size and development phase of the company, the board has no formal performance evaluation policy. The current directors consider that they have a sufficient mix of skills and experience to add value to the company.

The directors are provided access to the following resources: -

• A monthly financial report outlining the results of the operations and key functional areas

• The Company's proposed budget is provided to each director for review and comment

• All board members have unrestricted access to the Executive Chairman, Chief Operating Officer and Chief Financial Officer / Company Secretary.

The key executives complete a performance appraisal each year.

Principal 9: Remunerate fairly and responsibly

The board determines the remuneration of the Managing Director and key executives. The board believes that due to the size of the company, individual salary negotiation is more appropriate than formal remuneration policies.
The board reviews market comparisons in determining remunerations and will seek independent external advice as necessary. The Company has an executive option scheme in place that has been previously approved by shareholders.

Non-executive directors are remunerated by way of directors' fees within the limit approved by shareholders. The board determines fees paid to individual board members. Further information on director's and executive's remuneration is set out in the director's report and notes to the financial statements.

Principal 10: Recognise the legitimate interests of stakeholders

The Company has a formal code of conduct for the board, management and staff. The directors continue to review the business to determine the most effective and appropriate operating procedures. The company continues to review its risk management programs across health, safety and the commercial operations of the business. The company has in place a comprehensive editorial risk management guideline that is used as the main guide within the publishing business.