ARDIDEN LTD — Governance Information 2018

Sep 20, 2018

ARDIDEN LIMITED

Corporate Governance Statement

This Corporate Governance summary 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 have been provided for not following them.

The Company’s Corporate Governance Plan has been posted on the Company’s website at www.ardiden.com.au.

Principles and Recommendations	Principles and Recommendations	Comply	Explanation	Explanation
Principle 1: Lay solid foundations for management and oversight
Recommendation 1.1		Complying	The Company has adopted a Board Charter.
A listed entity should have and disclose a charter which:			The Board Charter sets out the specific responsibilities of the Board,
(a)	sets out the respective roles and responsibilities of the		requirements as to the Boards composition, the roles and
	board, the chair and management; and		responsibilities of the Chairman and Company Secretary, the
(b)	includes a description of those matters expressly reserved		establishment, operation and management of Board Committees,
	to the board and those delegated to management.		Directors access to company records and information, details of the
			Board’s relationship with management, details of the Board’s
			performance review and details of the Board’s disclosure policy.
			A copy of the Company’s Board Charter is stated in Schedule 1 of the
			Corporate Governance Plan which is available on the Company’s
			website.
Recommendation 1.2		Complying	(a)	The Company has detailed guidelines for the appointment and
A listed entity should:				selection of the Board. The Company’s Corporate Governance
(a)	undertake appropriate checks before appointing a			Plan requires the Board to undertake appropriate checks before
	person, or putting forward to security holders a candidate			appointing a person or putting forward to security holders a
	for election, as a director; and			candidate for election, as a director.
(b)	provide security holders with all material information		(b)	Material information relevant to any decision on whether or not
	relevant to a decision on whether or not to elect or re-			to elect or re-elect a Director will be provided to security holders
	elect a director.			in the notice of meeting holding the resolution to elect or re-elect
				the Director.
Recommendation 1.3		Complying	The Company’s Corporate Governance Plan requires the Board to
A listed entity should have a written agreement with each			ensure that each Director and senior executive is a party to a written
director and senior executive setting out the terms of their			agreement with the Company which sets out the terms of that
appointment.			Director’s or senior executive’s appointment.
Recommendation 1.4		Complying	The Board Charter outlines the roles, responsibility and accountability
The	company secretary of a listed entity should be accountable		of the Company Secretary. The Company Secretary is accountable
directly to the board, through the chair, on all matters to do with			directly to the Board, through the chair, on all matters to do with the
the	proper functioningof the board.		proper functioning of the Board.
Recommendation 1.5		Complying	(a)	The Company has adopted a Diversity Policy.
A listed entity should:				(i) The Diversity Policy provides a framework for the Company
(a)	have a diversity policy which includes requirements for			to achieve measurable objectives that encompass gender
	the board:			equality. The Board is responsible for developing
	(i) to set measurable objectives for achieving gender			measurable objectives and strategies to meet the
	diversity; and			objectives of the Diversity Policy
	(ii) to assess annually both the objectives and the			(ii) The Diversity Policy provides for the monitoring and
	entity’s progress in achieving them;			evaluation of the scope and currency of the Diversity Policy.
(b) (c)	disclose that policy or a summary or it; and disclose as at the end of each reporting period: (i) the measurable objectives for achieving gender diversity set by the board in accordance with the		(b)	The company is responsible for implementing, monitoring and reporting on the measurable objectives. The Diversity Policy is stated in Schedule 10 of the Corporate Governance Plan which is available on the company website.
	entity’s diversity policy and its progress towards		(c)
	achieving them; and			(i) The Diversity Policy provides that measurable objectives set
	(ii) either:			by the Board will be included in the annual key
	(A) the respective proportions of men and			performance indicators for the CEO, MD and senior
	women on the board, in senior executive			executives. In addition, the Board will review progress
	positions and across the whole organisation			against the objectives in its annual performance
	(including how the entity has defined “senior			assessment. Due to the current size of the Company, the
	executive” for these purposes); or			Board has not yet formally set measurable objectives for
	(B) the entity’s “Gender Equality Indicators”, as			achieving gender diversity.
	defined in the Workplace Gender Equality			(ii) The Diversity Policy provides that the Board will include in
	Act 2012.			the annual report each year, the measurable objectives,
				progress against the objectives, and the proportion of male
				and female employees in the whole organisation, at senior
				management level and at Board Level. The Board does not
				consider that it is in a position to set out meaningful
				objectives for achieving gender diversity due to the size of
				the Company.
				As at 30 June 2018, 25% of the Board were female and 75%
				were male, and the Company Secretary was female.

Principles and Recommendations Recommendation 1.6 A listed entity should:

• (a) have and disclose a process for periodically evaluating the performance of the board, its committees and individual directors; and

• (b) disclose in relation to each reporting period, whether a performance evaluation was undertaken in the reporting period in accordance with that process.

Recommendation 1.7

A listed entity should:

• (a) have and disclose a process for periodically evaluating the performance of its senior executives; and

• (b) disclose in relation to each reporting period, whether a performance evaluation was undertaken in the reporting period in accordance with that process.

Principle 2: Structure the board to add value

Recommendation 2.1

• The board of a listed entity should: (a) have a nomination committee which: (i) has at least three members, a majority of whom are independent directors; and

• (ii) is chaired by an independent director, and disclose:

• (iii) the charter of the committee; (iv) the members of the committee; and (v) 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, experience, independence and knowledge of the entity to enable it to discharge its duties and responsibilities effectively.

• Comply Explanation

• Complying (a) The Nomination Committee is responsible for arranging a performance evaluation of the Board, its Committees and individual directors on an annual basis. It may do so with the aid of an independent advisor. The process for this can be found in Schedule 6 of the Company’s Corporate Governance Plan.

• (b) The Company’s Corporate Governance Plan requires the Board to disclosure whether or not performance evaluations were conducted during the relevant reporting period. Schedule 6 of the Company’s Corporate Governance Plan provides guidance on the review process to be undertaken by the Nomination Committee. Details of the performance evaluations conducted will be provided in the Company’s Annual Reports.

• Complying (a) The Nomination Committee is responsible for arranging a performance evaluation of senior executives on an annual basis. To assist in this process an independent advisor may be used.

• (b) The Company’s Corporate Governance Plan requires the Board to conduct annual performance of the senior executives. Schedule 6 ‘Performance Evaluation’ requires the Board to disclose whether or not performance evaluations were conducted during the relevant reporting period.

• Part(a) The Nomination Committee was reformed on 14 August

• Complying 2018. There are currently three members of the Committee being Michelle Li (Chair), Neil Hackett and Peter Spitalny. Due to the size and nature of the existing Board and the magnitude of the Company’s operations the Company previously had no Nomination Committee. Pursuant to clause 4(h) of the Company’s Board Charter, the full Board carried out the duties that would ordinarily be assigned to the Nomination Committee under the written terms of reference for that committee. The Board considered that it could deal effectively with board composition and succession issues prior to establishing the separate Nomination Committee.

• The duties of the Nomination Committee are outlined in Schedule 5 of the Company’s Corporate Governance Plan available online on the Company’s website. The Board devotes time at board meetings to discuss board succession issues. All members of the Board are involved in the Company’s nomination process, to the maximum extent permitted under the Corporations Act and ASX Listing Rules. The Board regularly updates the Company’s board skills matrix (in accordance with recommendation 2.2) to assess the appropriate balance of skills, experience, independence and knowledge of the entity.

Principles and Recommendations Comply	Explanation
Recommendation 2.2 A listed entity should have and disclose a board skill matrix setting out the mix of skills and diversity that the board currently has or is looking to achieve in its membership. Complying	Board Skills Matrix	Number of Directors that Meet the Skill
	Executive & Non- Executive experience	4
	Industry experience & knowledge	5
	Leadership	4
	Corporate governance & risk management	4
	Strategic thinking	4
	Desired behavioural competencies	5
	Geographic experience	5
	Capital Markets experience	4
	Subject matter expertise:
	- accounting	3
	- capital management	4
	- corporate financing	4
	- industry taxation1	0
	- risk management	4
	- legal	3
	- IT expertise2	0
	(1) Skill gap noticed however an external taxation firm is employed to maintain taxation requirements. (2) Skill gap noticed however an external IT firm is employed on an adhoc basis to maintain IT requirements. A profile of each director setting out their skills, experience and expertise is set out in the Directors’ Report of the Company’s 2018 Annual Report.
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 ASX Corporate Governance Principles and Recommendation (3rd Edition), 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 Complying	(a) The Board Charter provides for the disclosure of the names of Directors considered by the Board to be independent. These details are provided in the Annual Reports and Company website. (b) The Board Charter requires Directors to disclose their interest, positions, associations and relationships and requires that the independence of Directors is regularly assessed by the Board in light of the interests disclosed by Directors. Details of the Directors interests, positions, associations and relationships are provided in the Annual Reports and Company website. (c) The Board Charter provides for the determination of the Directors’ terms and requires the length of service of each Director to be disclosed. The length of service of each Director is provided in the Annual Reports and Company website.

Recommendation 2.4

A majority of the board of a listed entity should be independent directors.

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.

Recommendation 2.6

A listed entity should have a program for inducting new directors and providing appropriate professional development opportunities for continuing directors to develop and maintain the skills and knowledge needed to perform their role as a director effectively.

Principle 3: Act ethically and responsibly

Recommendation 3.1 A listed entity should: (a) have a code of conduct for its directors, senior executives and employees; and (b) disclose that code or a summary of it.

Complying The Board Charter requires that, where practical, the majority of the Board will be independent. The Board of Ardiden considers Neil Hackett, Michelle Li, and Pauline Gately to be independent directors. Details of each Director’s independence are provided in the Annual Reports and Company website. Complying The Board Charter provides that where practical, the Chairman of the Board will be an independent director. The current Chairman of the Board is Neil Hackett who is an independent director. Complying The Board Charter states that a specific responsibility of the Board is to procure appropriate professional development opportunities for Directors. The Board is responsible for the approval and review of induction and continuing professional development programs and procedures for Directors to ensure that they can effectively discharge their responsibilities. Complying (a) The Corporate Code of Conduct applies to the Company’s directors, senior executives and employees. (b) The Company’s Corporate Code of Conduct is in Schedule 2 of the Corporate Governance Plan which is on the Company’s website.

Principles and Recommendations Comply Explanation Principle 4: Safeguard integrity in financial reporting Recommendation 4.1 Part(a)

• Part(a) The Audit and Risk Committee was formed on 14 August 2018

• Complying comprising 3 independent, non-executive directors including Pauline Gately (Chair), Neil Hackett and Michelle Li. Prior to this date, given the size and scale of the Company’s operations, the full board undertook the role of the Audit and Risk Committee. The role and responsibilities of the Audit and Risk Committee are outlined in the Audit and Risk Committee Charter which is Schedule 3 of the Company’s Corporate Governance Plan available online on the Company’s website. The Board devote time at annual board meetings to fulfilling the roles and responsibilities associated with maintaining the Company’s internal audit function and arrangements with external auditors. All members of the Board are involved in the Company’s audit function to ensure the proper maintenance of the entity and the integrity of all financial reporting.

The board of a listed entity should:

• (a) have an audit committee which: (i) has at least three members, all of whom are nonexecutive directors and a majority of whom are independent directors; and

• (ii) is chaired by an independent director, who is not the chair of the board,

• and disclose:

• (iii) the charter of the committee;

• (iv) the relevant qualifications and experience of the members of the committee; and

• (v) in relation to 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 an audit committee, disclose that fact and the processes it employs that independently verify and safeguard the integrity of its financial reporting, including the processes for the appointment and removal of the external auditor and the rotation of the audit engagement partner.

and the processes it employs that independently verify and safeguard the integrity of its financial reporting, including the processes for the appointment and removal of the external auditor and the rotation of the audit engagementpartner.
Recommendation 4.2	Complying	The Company’s Corporate Governance Plan states that a duty and
The board of a listed entity should, before it approves the		responsibility of the Board is to ensure that before approving the
entity’s financial statements for a financial period, receive from		entity’s financial statements for a financial period, the CEO and CFO
its CEO and CFO a declaration that the financial records of the		have declared that in their opinion the financial records of the entity
entity have been properly maintained and that the financial		have been properly maintained and that the financial statements
statements comply with the appropriate accounting standards		comply with the appropriate accounting standards and give a true and
and give a true and fair view of the financial position and		fair view of the financial position and performance of the entity and that
performance of the entity and that the opinion has been		the opinion has been formed on the basis of a sound system of risk
formed on the basis of a sound system of risk management and		management and internal control which is operating effectively.
internal control which is operatingeffectively.
Recommendation 4.3	Complying	The Company’s Corporate Governance Plan provides that the Board
A listed entity that has an AGM should ensure that its external		must ensure the Company’s external auditor attends its AGM and is
auditor attends its AGM and is available to answer questions		available to answer questions from security holders relevant to the
from security holders relevant to the audit.		audit.
Principle 5: Make timely and balanced disclosure
Recommendation 5.1	Complying	(a) The Board Charter provides details of the Company’s disclosure
A listed entity should:		policy. In addition, Schedule 7 of the Corporate Governance Plan
(a) have a written policy for complying with its continuous		is entitled ‘Disclosure – Continuous Disclosure’ and details the
disclosure obligations under the Listing Rules; and		Company’s disclosure requirements as required by the ASX
(b) disclose that policy or a summary of it.		Listing Rules and other relevant legislation.
		(b) The Board Charter and Schedule 7 of the Corporate Governance
		Plan are available on the Company website.
Principle 6: Respect the rights of security holders
Recommendation 6.1	Complying	Information about the Company and its governance is available in the
A listed entity should provide information about itself and its		Corporate Governance Plan which can be found on the Company
governance to investors via its website.		website.
Recommendation 6.2	Complying	The Company has adopted a Shareholder Communications Strategy
A listed entity should design and implement an investor		which aims to promote and facilitate effective two-way communication
relations program to facilitate effective two-way		with investors. The Shareholder Communications Strategy outlines a
communication with investors.		range of ways in which information is communicated to shareholders.
Recommendation 6.3	Complying	The Shareholder Communications Strategy states that as a part of the
A listed entity should disclose the policies and processes it has		Company’s developing investor relations program, Shareholders can
in place to facilitate and encourage participation at meetings of		register with the Company Secretary to receive email notifications of
security holders.		when an announcement is made by the Company to the ASX, including
		the release of the Annual Report, half yearly reports and quarterly
		reports. Links are made available to the Company’s website on which
		all information provided to the ASX is immediately posted.
		Shareholders are encouraged to participate at all EGMs and AGMs of
		the Company. Upon the despatch of any notice of meeting to
		Shareholders, the Company Secretary shall send out material with that
		notice of meeting stating that all Shareholders are encouraged to
		participate at the meeting.

Principles and Recommendations Comply Explanation Recommendation 6.4 Complying Security holders can register with the Company to receive email A listed entity should give security holders the option to receive notifications when an announcement is made by the Company to the communications from, and send communications to, the entity ASX. and its security registry electronically. Shareholders queries should be referred to the Company Secretary at first instance.

Principle 7: Recognise and manage risk

Recommendation 7.1	Recommendation 7.1	Part	(a)	The Audit and Risk Committee was formed on 14 August 2018
The board of a listed entity should:		complying		comprising 3 independent, non-executive directors including
(a)	have a committee or committees to oversee risk, each of			Pauline Gately (Chair), Neil Hackett and Michelle Li. Prior to this
	which:			date, given the size and scale of the Company’s operations, the
	(i) has at least three members, a majority of whom			full board undertook the role of the Audit and Risk Committee.
	are independent directors; and (ii) is chaired by an independent director,			The role and responsibilities of the Audit and Risk Committee are outlined in the Audit and Risk Committee Charter which is
(b)	and disclose: (iii) the charter of the committee; (iv) the members of the committee; and (v) 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 if it does not have a risk committee or committees that			Schedule 3 of the Company’s Corporate Governance Plan available online on the Company’s website. Pursuant to Clause 4(h) of the Company’s Board Charter, the full Board carried out the duties that were ordinarily assigned to the Audit and Risk Committee under the written terms of reference for that committee. The Board devote time at annual board meeting to fulfilling the
	satisfy (a) above, disclose that fact and the process it			roles and responsibilities associated with overseeing risk and
	employs for overseeing the entity’s risk management			maintaining the entity’s risk management framework and
	framework.			associated internal compliance and control procedures.
Recommendation 7.2		Complying	(a)	The Company process for risk management and internal
The board or a committee of the board should:				compliance includes a requirement to identify and measure
(a)	review the entity’s risk management framework with			risk, monitor the environment for emerging factors and trends
	management at least annually to satisfy itself that it			that affect these risks, formulate risk management strategies
	continues to be sound, to determine whether there have			and monitor the performance of risk management systems.
	been any changes in the material business risks the entity			Schedule 8 of the Corporate Governance Plan is entitled
	faces and to ensure that they remain within the risk			‘Disclosure – Risk Management’ and details the Company’s
	appetite set by the board; and			disclosure requirements with respect to the risk management
(b)	disclose in relation to each reporting period, whether such			review procedure and internal compliance and controls.
	a review has taken place.		(b)	The Board Charter requires the Board to disclose the number of
				times the Board met throughout the relevant reporting period,
				and the individual attendances of the members at those
				meetings. Details of the meetings will be provided in the
				Company’s Annual Report.
Recommendation 7.3		Complying	Schedule 3 of the Company’s Corporate Plan provides for the internal
A listed entity should disclose:			audit function of the Company. The Board Charter outlines the
(a)	if it has an internal audit function, how the function is		monitoring, review and assessment of a range of internal audit
	structured and what role it performs; or		functions and procedures.
(b)	if it does not have an internal audit function, that fact and
	the processes it employs for evaluating and continually
	improving the effectiveness of its risk management and
	internal controlprocesses.
Recommendation 7.4		Complying	Schedule 3 of the Company’s Corporate Governance Plan details the
A listed entity should disclose whether, and if so how, it has			Company’s risk management systems which assist in identifying and
regard to economic, environmental and social sustainability			managing potential or apparent business, economic, environmental
risks and, if it does, how it manages or intends to manage those			and social sustainability risks (if appropriate). Review of the Company’s
risks.			risk management framework is conducted at least annually and reports
			are	continually created by management on the efficiency and
			effectiveness of the Company’s risk management framework and
			associated internal compliance and control procedures.

• Principles and Recommendations Comply Explanation Principle 8: Remunerate fairly and responsibly Recommendation 8.1 Part (a) The board of a listed entity should: complying (a) have a remuneration committee which: (i) has at least three members, a majority of whom are independent directors; and

• (ii) is chaired by an independent director, and disclose:

• (iii) the charter of the committee; (iv) the members of the committee; and (v) 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 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.

• Part (a) Until recently, due to the size and nature of the board and the

• complying magnitude of the Company’s operations the Remuneration Committee consisted of only two non-executive directors being Neil Hackett (Chair) and Michelle Li. Given the recent Board appointments, the Remuneration Committee was reformed on 14 August 2018 to consist of three non-executive directors being Michelle Li (Chair), Neil Hackett and Peter Spitalny. The Board considers Michelle Li and Neil Hackett to be independent. The Remuneration Committee Charter in Schedule 4 of the Company’s Corporate Governance Plan outlines the role and responsibilities of the Remuneration Committee and is available online on the Company’s website.

Complying The Company’s Corporate Governance Plan requires the Board to disclose its policies and practices regarding the remuneration of nonexecutive, executive and other senior directors.

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 and ensure that the different roles and responsibilities of non-executive directors compared to executive directors and other senior executives are reflected in the level and composition of their remuneration.

• Complying (a) Company’s Corporate Governance Plan states that the Board is required to review, manage and disclose the policy (if any) on whether participants are permitted to enter into transactions (whether through the use of derivatives or otherwise) which limit the economic risk of participating in the scheme. The Board must review and approve any equity based plans.

Recommendation 8.3

A listed entity which has an equity-based remuneration scheme should:

• (a) have a policy on whether participants are permitted to enter into transactions (whether through the use of derivatives or otherwise) which limit the economic risk of participating in the scheme; and

• (b) A copy of the Company’s Corporate Governance Plan is available on the Company’s website.

• (b) disclose that policy or a summary of it.