Supporting Documents
| Codes and Conducts | Policies and procedures |
| • Board Charter | • Share trading |
| • Nominations Committee charter | • Make timely and balanced disclosures |
| • Code of Conduct | |
| • Audit Committee charter | |
| • Remuneration Committee charter | |
| • Remuneration policy | |
| • Constitution |
Corporate Governance Statement
The Board is accountable to shareholders for the activities and performance of the Company. The Board’s key responsibility is to create long term shareholder value within an appropriate risk framework. The Board expects its members and all employees of the company to act with the utmost integrity with all stakeholders whether they are shareholders, employees, customers, suppliers or other parties impacted by the behaviour of the company.The Company’s corporate governance reflects the ASX Corporate Governance Council’s principles and best practice recommendations. In each section below comments are made in relation to each ASX Corporate Governance Council principle.
Principle 1
Lay solid foundations for management and oversight
There is clear segregation of duties between the Board and management. The Board sets strategic direction and a policy framework which management then work within to manage the day-to-day business. The Board monitors this on a regular basis. The Board has adopted a formal charter that sets out their responsibilities. The Board charter is available on the Company’s website www.arana.com.
Principle 2
Structure the Board to add value
Details on Board members and their qualifications are included in the section headed “Information on Directors”. Current Board composition is two independent non-executive directors, three non-independent non-executive directors. The Company is currently conducting a search for an independent Non-executive Chairman. The Board’s stated policy is to have a majority of independent directors.
The Board continually assesses its membership and makes appointments to complement and enhance the existing skill base of the Board. The Board has established a separate Nominations Committee of all non-executive directors. Formal letters of appointment are used for all new non-executive directors.
The Board has a policy of allowing directors to seek independent professional advice at the Company’s expense and this advice, if appropriate, will be shared with other directors. The Chairman will review in advance the estimated costs for reasonableness, but will not impede the seeking of advice.
The Company is currently conducting a search for an independent Non-executive Chairman. The Board believes that it is preferable to wait until this appointment before the next formal review of Board performance is carried out.
Robin Beaumont, an Independent director, is the Non-executive Chairman.
Principle 3
Promote ethical and responsible decision-making
The Company has adopted a Code of Conduct which is published on the Company’s website.
Dealing in Company Shares
All employees in the Company receive training regarding the requirements of the Corporations Act 2001 with regard to trading in the shares of the Company. In addition to the requirements of the Corporations Act 2001, the Company has a policy that only allows directors and employees, and their related parties, to buy or sell shares during the six week periods following the release of the full year and half year results, the AGM; and at other periods approved by the Board. Any person wishing to buy or sell shares must in advance of the transaction, obtain permission from the Board or its delegate.
The Company’s policy prohibits persons covered by this policy to enter into derivative instruments in relation to contingent shares. Where a person covered by this policy enters into a derivative instrument in relation to shares held or contingent shares which have vested, the person must inform the Company Secretary who will then inform the market.
Any transaction conducted by directors in shares of the Company is notified to the Australian Stock Exchange (ASX). Each director has entered into an agreement with the Company to provide information to enable the Company to notify the ASX of any share transactions within five business days.Principle 4
Safeguard integrity in financial reporting
The Board has established an Audit committee. Its members are Chris Harris (Chairman), Robin Beaumont, Lincoln Chee and George Jessup. The Company is currently conducting a search for an independent Non-executive Chairman. It is anticipated that this director, upon appointment would also be appointed as a member of the Audit committee, thereby creating a majority of independent directors.
The Audit Committee meets at least three times per year. The committee is responsible for the appointment of the Company’s auditors and has a formal charter. The charter is reviewed at least annually to ensure it is in line with emerging market practices which are in the best interests of shareholders.
The Audit Committee’s role is to provide a direct link between the Board and the external audit function of the Company. This includes reviewing and reporting to the Board that:
- The system of control which management has established effectively safeguards the Company’s assets;
- Accounting records are properly maintained in accordance with statutory requirements;
- Financial information provided to shareholders and others is accurate and reliable; and
- External audit functions are effective and are appropriately scoped and resourced.
All other directors and the Chief Financial Officer are invited to attend all committee meetings, but on at least two occasions per year, all executives are asked to leave the meeting so that there can be open and frank communication between the committee and the auditor.
Auditor independence
The committee considers the independence of the auditor. The auditor has a policy that the partner on the audit is rotated every five years and on an annual basis, the auditor provides a certificate to the committee confirming their independence. An analysis of fees paid to the auditor for non-audit services is included in the Directors’ Report.
The auditor formally presents to the committee confirmation regarding their independence. The auditor’s independence statement is included in the Audit Committee Report.
The Chief Financial Officer has certified to the committee 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 and are in accordance with relevant accounting standards.
Principle 5
Make timely and balanced disclosure
The Company fully supports the continuous disclosure regime in Australia. Continuous disclosure is a standard agenda item at all Board meetings and the Company makes regular announcements to the market on commercial activities, which may have a material influence on the share price.
Material presentations that are made to analysts or investors are posted on the Company’s website. If the presentations contain information that has not been in the public domain, and that would have a material effect on the share price, the presentation is sent to the ASX prior to the presentation being made.
All managers in the Company have received training on continuous disclosure and are aware of the Company’s obligations with regard to continuous disclosure.
Principle 6
Respect the rights of shareholders
Communication with shareholders is of critical importance to the Company. The annual report, half-year report and annual general meeting are all important communication forums. The Company welcomes questions from shareholders at any time and these will be answered within the confines of information that is not market sensitive or already is in the public domain. Also, all announcements made by the Company to the ASX are posted on the Company’s website. The Company continually reviews its communications with shareholders and uses a number of formats including newsletters and roadshows to update shareholders on the progress of the Company.
The external auditor attends the annual general meeting and is available to answer any questions with regard to the conduct of the audit and their report.
The following documents in relation to corporate governance are available by clicking on the underlined documents below:
Codes and Conducts
• Board Charter
• Nominations Committee charter
• Code of Conduct
• Audit Committee charter
• Remuneration Committee charter
• Remuneration policy
• Constitution
Policies and procedures
• Share trading
• Make timely and balanced disclosures
Principle 7
Recognise and manage risk
The Audit committee as part of its charter considers the management of risk. The Company carries out a formal risk review on an annual basis. Risks identified have appropriate actions developed or mitigating circumstances documented. The Company has a risk awareness culture whereby any potential risks identified are brought to the attention of management for appropriate action. The committee considers on an annual basis the insurance policies the Company has in place. The Chief Financial Officer, on an annual basis, reports on the internal control environment within the company and is responsible for immediately alerting the committee if any material breakdowns in internal control occur.
The Chief Financial Officer has made representations to the Audit committee on the system of risk management and internal compliance and control, which implements the policies adopted by the Board. The Chief Financial Officer have also represented that to the best of their knowledge the Company’s risk management and internal compliance and control system is operating efficiently and effectively in all material respects. The representation by the Chief Financial Officer is supported by representations to them from all senior executives.
However, even well designed, implemented and monitored risk management and internal controls cannot guarantee that adverse events or losses will not arise and can provide only a reasonable level of assurance. All control systems have inherent limitations and are subject to breakdowns from time to time. No evaluation of the Company’s risk management and internal control systems can provide absolute assurance that all risks are managed or all control issues within the organisation have been detected.
Principle 8
Encourage enhanced performance
The Board carries out a Board assessment on an annual basis. The previous review was carried out internally following a process based on recommendations by the Australian Institute of Company Directors.
The Company is currently conducting a search for an independent Non-executive Chairman. The Board believes that it is preferable to wait until this appointment before the next formal review of Board performance is carried out.
Senior executives are subject to a formal performance review process on an annual basis. The focus of the performance review is to set specific objectives that are aligned to the Company’s business plan, and monitor performance against them for each executive.
Principle 9
Remunerate fairly and responsibly
The Board has a Remuneration committee. It has a formal charter and its members are George Jessup (Chairman), Robin Beaumont and Chris Harris.
The Company’s remuneration policy is described in the Remuneration Report contained within the Directors’ Report.
The committee considers the remuneration of the Chief Executive Officer and direct reports, as well as fees paid to non-executive directors. The committee also determines the overall remuneration framework for all employees in the Company.