4DS MEMORY LIMITED — Governance Information 2015

Dec 14, 2015

4DS MEMORY LIMITED

ACN 145 590 110

(Company)

CORPORATE GOVERNANCE STATEMENT

This Corporate Governance Statement is current as at 9 December 2015 and has been approved by the Board of the Company.

This Corporate Governance Statement discloses the extent to which the Company will follow the recommendations set by the ASX Corporate Governance Council in its publication Corporate Governance Principles and Recommendations 3[rd] Edition (Recommendations). The Recommendations are not mandatory, however the Recommendations that will not be followed have been identified and reasons for not following them, along with what (if any) alternative governance practices have been adopted in lieu of the Recommendation.

The Company has adopted Corporate Governance Policies which provide written terms of reference for the Company’s corporate governance practices. The Board of the Company has not yet formed an audit committee, nomination committee, risk management committee or remuneration committee.

The Company’s Corporate Governance Policies are available on the Company’s website at www.4dsmemory.com.

RECOMMENDATIONS (3RDEDITION)	COMPLY	EXPLANATION
Principle 1: Lay solid foundations for management and oversight
Recommendation 1.1 A listed entity should disclose the respective roles of its board and management and those matters expressly reserved to the board and those delegated to management.	Yes	The Company has adopted a Board Charter that sets out the specific roles and responsibilities of the Board, the Chair and management and those matters expressly reserved to the Board and those delegated to management. The Board Charter is available on the Company’s website.
Recommendation 1.2 A listed entity should undertake appropriate checks before appointing a person, or putting forward to security holders a candidate for election, as a director and provide security holders with all material information in its possession relevant to a decision on whether or not to elect or re-elect a director.	Yes	The Company has a Procedures for Selection and Appointment of Directors policy to ensure that appropriate checks are undertaken before appointing a person, or putting forward to security holders a candidate for election as a Director, including providing all material information relevant to a decision on whether or not to elect or re-elect a Director. The Procedures for Selection and Appointment of Directors policy is available on the Company’s website.
Recommendation 1.3 A listed entity should have a written agreement with each director and senior executive setting out the terms of their appointment.	Yes	The Company has in place written agreements with each Director and senior executive, which sets out the terms and conditions of their appointment.

RECOMMENDATIONS (3RDEDITION)	COMPLY	EXPLANATION
Recommendation 1.4 The company secretary of a listed entity should be accountable directly to the board, through the chair, on all matters to do with the proper functioning of the company.	Yes	The Board Charter provides that the Company Secretary is accountable directly to the Board, through the Chair, on all matters to do with the proper functioning of the Board. The Board Charter is available on the Company’s website.
Recommendation 1.5 A listed entity should: (a) have a diversity policy which includes the requirements for the board or a relevant committee of the board to set measurable objectives for achieving gender diversity and to assess annually both the objectives and the entity’s progress in achieving them; (b) disclose that policy or a summary of it; and (c) disclose as at the end of the each reporting period the measurable objectives for achieving gender diversity set by the board or a relevant committee of the board in accordance with the entity’s diversity policy and it progress towards achieving them and either: (1) the respective portions of men and women on the board, in senior executive positions and across the whole organisation (including how the entity has defined “senior executive” for these purposes); or (2) if the entity is a “relevant employer” under the Workplace Gender Equality Act, the entity’s most recent “Gender Equality Indicators”, as defined in and published under that Act.	Yes	The Board has adopted a Diversity Policy which provides a framework for the Company to establish and achieve measurable diversity objectives, including in respect to gender diversity. The Diversity Policy allows the Board to set measurable gender diversity objectives (if considered appropriate) and to assess annually both the objectives (if any have been set) and the Company’s progress towards achieving them. The Board considers that, due to the size, nature and stage of development of the Company, setting measurable objectives for the Diversity Policy at this time is not appropriate. The Board will consider setting measurable objectives as the Company increases in size and complexity. The Diversity Policy is available on the Company’s website.
Recommendation 1.6 A listed entity should have and disclose a process for periodically evaluating the performance of the board, its committees and individual directors and disclose in relation to each reporting period, whether a performance evaluation was undertaken in the reporting period in accordance with that process.	Yes	The Board has adopted a Performance Evaluation Practices policy for sets out, amongst other things, the process for evaluating the performance of the Board, its committees (if any) and individual Directors. The Performance Evaluation Practices policy is available on the Company’s website.
Recommendation 1.7 A listed entity should have and disclose a process for periodically evaluating the performance of its senior executives and disclose in relation to each reporting period, whether a performance evaluation was undertaken in the reporting period in accordance with that process.		The Board has adopted a Performance Evaluation Practices policy for sets out, amongst other things, the process for evaluating the performance of its senior executives. The Performance Evaluation Practices policy is available on the Company’s website.

RECOMMENDATIONS (3RDEDITION)	COMPLY	EXPLANATION
Principle 2: Structure the board to add value
Recommendation 2.1 The board of a listed entity should: (a) have a nomination committee which: (1) has at least three members, a majority of whom are independent directors; and (2) is chaired by an independent director; and disclose: (3) the charter of the committee; (4) the members of the committee; and (5) as at the end of each reporting period, the number of times the committee met throughout the period and the individual attendances of the members at those meetings; or (b) if it does not have a nomination committee, disclose that fact and the processes it employs to address board succession issues and to ensure that the board has the appropriate balance of skills, knowledge, experience, independence and diversity to enable it to discharge its duties and responsibilities effectively.	Yes	The Company does not have a Nomination Committee, given its present size and level of complexity of its operations. The Board has adopted a Nomination Committee Charter and carries out the duties that would ordinarily be carried out by the Nomination Committee, including processes to address Board succession issues and to ensure that the Board has the appropriate balance of skills, experience, independence and knowledge to enable it to discharge its duties and responsibilities effectively. The Nomination Committee Charter is available on the Company’s website.
Recommendation 2.2 A listed entity should have and disclose a board skills matrix setting out the mix of skills and diversity that the board currently has or is looking to achieve in its membership.	Yes	The Board has established a Board Skills Matrix. The Board Skills Matrix includes the following areas of knowledge and expertise: • Strategic expertise; • Specific industry knowledge; • Accounting and finance; • Risk management; • Experience with financial markets; and • Investor relations. Full details as to each Director’s relevant skills and experience will be available in the Company’s Annual Report. A summary of the Board Skills Matrix is available on the Company’s website.

RECOMMENDATIONS (3RDEDITION)	COMPLY	EXPLANATION
Recommendation 2.3 A listed entity should disclose: (a) the names of the directors considered by the board to be independent directors; (b) if a director has an interest, position, association or relationship of the type described in Box 2.3 of the Recommendations but the board is of the opinion that it does not compromise the independence of the director, the nature of the interest, position, association or relationship in question and an explanation of why the board is of that opinion; and (c) the length of service of each director.	Yes	(a) The Directors considered to be independent by the Board are Mr David McAuliffe and Mr Howard Digby. (b) There are no independent Directors who fall within this category. (c) All of the Directors were appointed to the Board on 7 December 2015.
Recommendation 2.4 A majority of the board of a listed entity should be independent directors.	No	The Company has two independent Directors as disclosed in 2.3 above. The Chairman, Mr James Dorrian is not considered to be independent as he is a substantial shareholder of the Company. Dr Guido Arnout is not considered to be independent as he is an executive of the Company.
Recommendation 2.5 The chair of the board of a listed entity should be an independent director and, in particular, should not be the same person as the CEO of the entity.	No	The roles of Chairman and CEO/Managing Director are performed by Mr James Dorrian and Dr Guido Arnout respectively. The Chairman is not considered to be an independent Director by virtue of him being a substantial shareholder of the Company.
Recommendation 2.6 A listed entity should have a program for inducting new directors and provide appropriate professional development opportunities for directors to develop and maintain the skills and knowledge needed to perform their role as directors effectively.	Yes	The Company has a program for inducting new Directors and provide appropriate professional development opportunities for Directors to develop and maintain the skills and knowledge needed to perform their role as directors effectively.
Principle 3: Act ethically and responsibly
Recommendation 3.1 A listed entity should have a code of conduct for its directors, senior executives and employees and disclose that code or a summary of it.	Yes	The Company has established a Code of Conduct for its directors, senior management, employees and contractors. The Code of Conduct is available on the Company’s website.

RECOMMENDATIONS (3RDEDITION)	COMPLY	EXPLANATION
Principle 4: Safeguard integrity in corporate reporting
Recommendation 4.1 The board of a listed entity should: (a) have an audit committee which: (1) has at least three members, all of whom are non-executive directors and a majority of whom are independent directors; and (2) is chaired by an independent director, who is not the chair of the board, and disclose: (3) the charter of the committee; (4) the relevant qualifications and experience of the members of the committee; and (5) in relation to each reporting period, the number of times the committee met throughout the period and the individual attendances of the members at hose meetings; or (b) if it does not have an audit committee, disclose that fact and the processes it employs that independently verify and safeguard the integrity of its corporate reporting	Yes	The Board has not constituted an Audit Committee, given the Company’s present size and level of complexity of its operations. Accordingly, the full Board carries out the duties that would ordinarily be carried out by an Audit Committee under the Audit Committee Charter. The Audit Committee Charter is available on the Company’s website.
Recommendation 4.2 The board of a listed entity should, before it approves the entity’s financial statements for a financial period, receive from its CEO and CFO a declaration that, in their opinion, the financial records of the entity have been properly maintained and that the financial statements comply with the appropriate accounting standards and give a true and fair view of the financial position and performance of the entity and that the opinion has been formed on the basis of a sound system of risk management and internal control which is operating effectively.	Yes	The Board, before it approves the entity’s financial statements for a financial period, receives from its CEO and CFO (or, if none, the persons fulfilling those functions) a declaration that, in their opinion, the financial records of the entity have been properly maintained and that the financial statements comply with the appropriate accounting standards and give a true and fair view of the financial position and performance of the entity and that the opinion has been formed on the basis of a sound system of risk management and internal control which is operating effectively.
Recommendation 4.3 A listed entity that has an AGM should ensure that its external auditor attends its AGM and is available to answer questions from security holders relevant to the audit.	Yes	The external auditor attends the AGM and is available to answer questions from shareholders relevant to the audit and financial statements. The auditor is also allowed reasonable opportunity to answer written questions submitted by shareholders to the auditor as permitted under the Corporations Act.

RECOMMENDATIONS (3[RD] EDITION) COMPLY EXPLANATION

Principle 5: Make timely and balanced disclosure

RECOMMENDATIONS (3RDEDITION)	COMPLY	EXPLANATION
Principle 5: Make timely and balanced disclosure
Recommendation 5.1 A listed entity should have a written policy for complying with its continuous disclosure obligations under the Listing Rules and disclose that policy or a summary of it.	Yes	The Company has established a Continuous Disclosure Policy which is designed to guide compliance with ASX Listing Rule disclosure requirements and to ensure that all Directors, senior executives and employees of the Company understand their responsibilities under the policy. The Board has designated the Chairman, Managing Director and the Company Secretary as the persons responsible for ensuring that this policy is implemented and enforced and that all required price sensitive information is disclosed to the ASX as required. The Continuous Disclosure Policy is available on the Company’s website.
Principle 6: Respect the rights of security holders
Recommendation 6.1 A listed entity should provide information about itself and its governance to investors via its website.	Yes	The Company’s website forms a key part its communications platform to security holders and the broader investment community and contains information about the Company’s current projects, Directors and management and corporate governance practices, policies and charters. Current and past ASX announcements, presentations and reports are available for review on the Company’s website. These announcements, presentations and reports are posted on the Company’s website immediately after they have been released to the market. The full text of all notices of meetings and explanatory material and the Company’s Annual Report are available on the Company’s website.
Recommendation 6.2 A listed entity should design and implement an investor relations program to facilitate effective two-way communications with investors.	Yes	The Company monitors and continues to utilise a broad range of approaches to enable effective communications with investors, including direct communications with security holders, publication of all relevant Company information on the Company’s website, access to market briefings and participation at general meetings. In addition to announcements made in accordance with its continuous disclosure obligations the Company, from time to time, prepares and releases general investor updates about the Company and investors can subscribe to a mailing list available on the Company’s website. Security holders can contact the Company via an email address or by phoning the Investor Relations team directly. All feedback received from security holders is considered and dealt with by the appropriate areas within the Company. Contact details are provided on the Company’s website.

RECOMMENDATIONS (3RDEDITION)	COMPLY	EXPLANATION
Recommendation 6.3 A listed entity should disclose the policies and processes it has in place to facilitate and encourage participation of security holders.	Yes	The Company has established a Shareholder Communication policy which is designed to ensure that the Company provides current and relevant information to its security holders and recognises the value created through the facilitation of security holder access to market briefings and meetings with management. The Company also encourages participation of security holders at its Annual General Meeting each year. The Annual General Meeting represents a key opportunity for security holders to meet the Board and ask questions of the Directors. Security holders have an opportunity to address the Board and vote on resolutions before an Annual General Meeting on important matters such as election and re-election of Directors, any changes to the Company’s Constitution and adoption of annual financial statements. Key members of senior management, including the CEO/Managing Director, are present and available. Security holders who are not able to attend the Annual General Meeting in person are encouraged to lodge a direct proxy vote or appoint proxies to represent them at the meeting. The full text of all notices of meetings and explanatory material are available on the Company’s website. The Shareholder Communication policy is available on the Company’s website.
Recommendation 6.4 A listed entity should give security holders the option to receive communications from, and send communications to, the entity and its security registry electronically.	Yes	The Company’s share register provides a facility whereby security holders can provide email addresses to receive correspondence from the Company electronically and security holders have the option to contact the share register via telephone, facsimile or email. On an ongoing basis, the Company works closely with its share registry to monitor and review the opportunities available to the Company to better utilise electronic means of communication with investors. Contact details are provided on the Company’s website.

RECOMMENDATIONS (3RDEDITION)	COMPLY	EXPLANATION
Principle 7: Recognise and manage risk
Recommendation 7.1 The board of a listed entity should: (a) have a committee or committees to oversee risk, each of which: (1) has at least three members, a majority of whom are independent directors; and (2) is chaired by an independent director. and disclose: (3) the charter of the committee; (4) the members of the committee; and (5) as at the end of each reporting period, the number of times the committee met throughout the period and the individual attendances of the members at those meetings; or (b) if it does not have a risk committee or committees that satisfy (a) above, disclose that fact and the processes it employs for overseeing the entity’s risk management framework.	Yes	The Company does not have a Risk Committee, given its present size and level of complexity of its operations. The full Board is responsible for the oversight of the Company’s risk management and internal compliance and control framework. The Board has adopted a Risk Management and Internal Compliance and Control policy, which sets out the processes it employs for overseeing the Company’s risk management framework. Management is required to report to the Board (at least annually) on the efficiency and effectiveness of risk management. The Risk Management and Internal Compliance and Control policy is available on the Company’s website.
Recommendation 7.2 The board or a committee of the board should: (a) review the entity’s risk management framework at least annually to satisfy itself that it continues to be sound; and (b) disclose, in relation to each reporting period, whether such a review has taken place.	Yes	The Board reviews the Company’s Risk Management and Internal Compliance and Control policy at least annually to ensure that the Company’s material risks are managed effectively.

RECOMMENDATIONS (3RDEDITION)	COMPLY	EXPLANATION
Recommendation 7.3 The listed entity should disclose: (a) if it has an internal audit function, how the function is structured and what role it performs; or (b) If it does not have an internal audit function, that fact and the processes is employs for evaluating and continually improving the effectiveness of its risk management and internal control processes.	Yes	The Company does not have an internal audit function given its present size and level of complexity of its operations. The Board is responsible for the oversight of its risk management and internal compliance and control process. Responsibility for risk management and control is delegated to the appropriate level of management within the Company, with the Managing Director having overall responsibility for the risk management and control processes.
Recommendation 7.4 A listed entity should disclose whether it has any material exposure to economic, environmental and social sustainability risks and, if it does, how it manages or intends to manage those risks.	Yes	The Company has exposure to economic risks, including general economy wide economic risks and risks associated with the economic cycle. The Board currently considers that the Company does not have any material exposure to environmental risks. There will be a requirement in the future for the Company to raise additional funding to pursue its business objectives. The Company’s ability to raise capital may be effected by these economic risks. The Company has in place risk management processes and procedures to identify, manage and minimise its exposure to these economic risks where appropriate. The Board currently considers that the Company does not have any material exposure to social sustainability risk. The Company’s Code of Conduct outlines the Company’s commitment to integrity and fair dealing in its business affairs. The Code of Conduct sets out the principles covering appropriate conduct in a variety of contexts and outlines the minimum standard of behavior expected from employees when dealing with stakeholders.

RECOMMENDATIONS (3RDEDITION)	COMPLY	EXPLANATION
Principle 8: Remunerate fairly and responsibly
Recommendation 8.1 The Board of a listed entity should: (a) have a remuneration committee which: (1) has at least three members, a majority of whom are independent directors; and (2) is chaired by an independent director. and disclose: (3) the charter of the committee; (4) the members of the committee; and (5) as at the end of each reporting period, the number of times the committee met throughout the period and the individual attendances of the members of those meetings; or (b) if it does not have a remuneration committee, disclose that fact and the processes it employs for setting the level and composition of remuneration for directors and senior executives and ensuring that such remuneration is appropriate and not excessive.	Yes	The Company does not have a Remuneration Committee, given its present size and level of complexity of its operations. The Board has adopted a Remuneration Committee Charter and carries out the duties that would ordinarily be carried out by the Remuneration Committee, including processes to set the level and composition of remuneration for Directors and senior executives and ensuring that such remuneration is appropriate and not excessive. The Remuneration Committee Charter is available on the Company’s website.
Recommendation 8.2 A listed entity should separately disclose its policies and practices regarding the remuneration of non-executive directors and the remuneration of executive directors and other senior executives.	Yes	The Company has a Remuneration Policy which separately discloses its policies and practices regarding the remuneration of non-executive Directors and the remuneration of executive Directors and other senior executives. The Remuneration Policy is available on the Company’s website.
Recommendation 8.3 A listed entity which has an equity-based incentive remuneration scheme should have a policy on whether participants are permitted to entity into transactions (whether through the use of derivatives or others) which limit the economic risk of participating in the scheme and disclose that policy or a summary of it.	Yes	The Company does not currently have an equity based remuneration scheme. However, should one be introduced, the Securities Trading contains a hedging prohibition which states that members of key management personnel must not enter into an arrangement with anyone if that arrangement would have the effect of limiting exposure of the member to risk relating to an element of the member’s remuneration that has not vested in the member or has vested in the member but remains subject to a holding lock. The Securities Trading Policy is available on the Company’s website.-