BIOTRON LIMITED - Governance Information 2018

Rules 4.7.3 and 4.10.3[1]

Appendix 4G

Key to Disclosures Corporate Governance Council Principles and Recommendations

Name of entity:

Biotron Ltd ABN / ARBN: Financial year ended: 60 086 399 144 30 June 2018

Our corporate governance statement[2] for the above period above can be found at:[3]

☐ These pages of our annual report:

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This URL on our website: www.biotron.com.au/corporate-governance

The Corporate Governance Statement is accurate and up to date as at 3 August 2018 and has been approved by the board.

The annexure includes a key to where our corporate governance disclosures can be located.

Date: 29 August 2018 Name of Director or Secretary authorising Peter Nightingale lodgement:

1 Under Listing Rule 4.7.3, an entity must lodge with ASX a completed Appendix 4G at the same time as it lodges its annual report with ASX. Listing Rule 4.10.3 requires an entity that is included in the official list as an ASX Listing to include in its annual report either a corporate governance statement that meets the requirements of that rule or the URL of the page on its website where such a statement is located. The corporate governance statement must disclose the extent to which the entity has followed the recommendations set by the ASX Corporate Governance Council during the reporting period. If the entity has not followed a recommendation for any part of the reporting period, its corporate governance statement must separately identify that recommendation and the period during which it was not followed and state its reasons for not following the recommendation and what (if any) alternative governance practices it adopted in lieu of the recommendation during that period. Under Listing Rule 4.7.4, if an entity chooses to include its corporate governance statement on its website rather than in its annual report, it must lodge a copy of the corporate governance statement with ASX at the same time as it lodges its annual report with ASX. The corporate governance statement must be current as at the effective date specified in that statement for the purposes of rule 4.10.3.

2 “Corporate governance statement” is defined in Listing Rule 19.12 to mean the statement referred to in Listing Rule 4.10.3 which discloses the extent to which an entity has followed the recommendations set by the ASX Corporate Governance Council during a particular reporting period.

3 Mark whichever option is correct and then complete the page number(s) of the annual report, or the URL of the web page, where the entity’s corporate governance statement can be found. You can, if you wish, delete the option which is not applicable.

Throughout this form, where you are given two or more options to select, you can, if you wish, delete any option which is not applicable and just retain the option that is applicable. If you select an option that includes “OR” at the end of the selection and you delete the other options, you can also, if you wish, delete the “OR” at the end of the selection.

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ANNEXURE – KEY TO CORPORATE GOVERNANCE DISCLOSURES

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Corporate Governance Council recommendation We have followed the recommendation in full for the whole of the We have NOT followed the recommendation in full for the whole
period above. We have disclosed … of the period above. We have disclosed … [4]
PRINCIPLE 1 – LAY SOLID FOUNDATIONS FOR MANAGEMENT AND OVERSIGHT
1.1 A listed entity should disclose: … the fact that we follow this recommendation: ☐ an explanation why that is so in our Corporate Governance
(a) the respective roles and responsibilities of its board and Statement OR
in our Corporate Governance Statement OR
management; and
(b) those matters expressly reserved to the board and those ☐ at [ insert location ] ☐ we are an externally managed entity and this recommendation
is therefore not applicable
delegated to management. … and information about the respective roles and responsibilities of
our board and management (including those matters expressly
reserved to the board and those delegated to management):
☐ at [ insert location ]
1.2 A listed entity should: … the fact that we follow this recommendation: ☐ an explanation why that is so in our Corporate Governance
(a) undertake appropriate checks before appointing a person, or Statement OR
in our Corporate Governance Statement OR
putting forward to security holders a candidate for election,
as a director; and ☐ at [ insert location ] ☐ we are an externally managed entity and this recommendation
is therefore not applicable
(b) 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.
1.3 A listed entity should have a written agreement with each director … the fact that we follow this recommendation: ☐ an explanation why that is so in our Corporate Governance
and senior executive setting out the terms of their appointment. Statement OR
in our Corporate Governance Statement OR
☐ at [ insert location ] ☐ we are an externally managed entity and this recommendation
is therefore not applicable
1.4 The company secretary of a listed entity should be accountable … the fact that we follow this recommendation: ☐ an explanation why that is so in our Corporate Governance
directly to the board, through the chair, on all matters to do with the Statement OR
proper functioning of the board. in our Corporate Governance Statement OR
☐ at [ insert location ] ☐ we are an externally managed entity and this recommendation
is therefore not applicable
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4 If you have followed all of the Council’s recommendations in full for the whole of the period above, you can, if you wish, delete this column from the form and re-format it.

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Corporate Governance Council recommendation We have followed the recommendation in full for the whole of the We have NOT followed the recommendation in full for the whole
period above. We have disclosed … of the period above. We have disclosed … [4]
1.5 A listed entity should: … the fact that we have a diversity policy that complies with
an explanation why that is so in our Corporate Governance
(a) have a diversity policy which includes requirements for the paragraph (a): Statement OR
board or a relevant committee of the board to set measurable objectives for achieving gender diversity and to ☐ in our Corporate Governance Statement OR ☐ we are an externally managed entity and this recommendation
assess annually both the objectives and the entity’s progress ☐ at [ insert location ] is therefore not applicable
in achieving them;
… and a copy of our diversity policy or a summary of it:
(b) disclose that policy or a summary of it; and
☐ at [ insert location ]
(c) disclose as at the end of each reporting period the
measurable objectives for achieving gender diversity set by … and the measurable objectives for achieving gender diversity set by
the board or a relevant committee of the board in accordance the board or a relevant committee of the board in accordance with our
with the entity’s diversity policy and its progress towards diversity policy and our progress towards achieving them:
achieving them and either: ☐ in our Corporate Governance Statement OR
(1) the respective proportions of men and women on the
☐ at [ insert location ]
board, in senior executive positions and across the
whole organisation (including how the entity has defined … and the information referred to in paragraphs (c)(1) or (2):
“senior executive” for these purposes); or
☐ in our Corporate Governance Statement OR
(2) if the entity is a “relevant employer” under the Workplace
Gender Equality Act, the entity’s most recent “Gender ☐ at [ insert location ]
Equality Indicators”, as defined in and published under
that Act.
1.6 A listed entity should: … the evaluation process referred to in paragraph (a): ☐ an explanation why that is so in our Corporate Governance
(a) have and disclose a process for periodically evaluating the Statement OR
in our Corporate Governance Statement OR
performance of the board, its committees and individual
directors; and ☐ at [ insert location ] ☐ we are an externally managed entity and this recommendation
is therefore not applicable
(b) disclose, in relation to each reporting period, whether a … and the information referred to in paragraph (b):
performance evaluation was undertaken in the reporting
period in accordance with that process. in our Corporate Governance Statement OR
☐ at [ insert location ]
1.7 A listed entity should: … the evaluation process referred to in paragraph (a):
an explanation why that is so in our Corporate Governance
(a) have and disclose a process for periodically evaluating the ☐ in our Corporate Governance Statement OR Statement OR
performance of its senior executives; and
☐ at [ insert location ] ☐ we are an externally managed entity and this recommendation
(b) disclose, in relation to each reporting period, whether a
is therefore not applicable
performance evaluation was undertaken in the reporting … and the information referred to in paragraph (b):
period in accordance with that process.
☐ in our Corporate Governance Statement OR
☐ at [ insert location ]
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Corporate Governance Council recommendation We have followed the recommendation in full for the whole of the We have NOT followed the recommendation in full for the whole
period above. We have disclosed … of the period above. We have disclosed … [4]
PRINCIPLE 2 - STRUCTURE THE BOARD TO ADD VALUE
2.1 The board of a listed entity should: [If the entity complies with paragraph (a):]
an explanation why that is so in our Corporate Governance
(a) have a nomination committee which: … the fact that we have a nomination committee that complies with Statement OR
(1) has at least three members, a majority of whom are paragraphs (1) and (2): ☐ we are an externally managed entity and this recommendation
independent directors; and ☐ in our Corporate Governance Statement OR is therefore not applicable
(2) is chaired by an independent director,
☐ at [ insert location ]
and disclose:
… and a copy of the charter of the committee:
(3) the charter of the committee;
(4) the members of the committee; and ☐ at [ insert location ]
(5) as at the end of each reporting period, the number of … and the information referred to in paragraphs (4) and (5):
times the committee met throughout the period and ☐ in our Corporate Governance Statement OR
the individual attendances of the members at those
meetings; or ☐ at [ insert location ]
(b) if it does not have a nomination committee, disclose that [If the entity complies with paragraph (b):]
fact and the processes it employs to address board
… the fact that we do not have a nomination committee and the
succession issues and to ensure that the board has the
processes we employ to address board succession issues and to
appropriate balance of skills, knowledge, experience,
ensure that the board has the appropriate balance of skills,
independence and diversity to enable it to discharge its
knowledge, experience, independence and diversity to enable it to
duties and responsibilities effectively.
discharge its duties and responsibilities effectively:
☐ in our Corporate Governance Statement OR
☐ at [ insert location ]
2.2 A listed entity should have and disclose a board skills matrix … our board skills matrix: ☐ an explanation why that is so in our Corporate Governance
setting out the mix of skills and diversity that the board currently Statement OR
has or is looking to achieve in its membership. in our Corporate Governance Statement OR
☐ at [ insert location ] ☐ we are an externally managed entity and this recommendation
is therefore not applicable
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Corporate Governance Council recommendation We have followed the recommendation in full for the whole of the We have NOT followed the recommendation in full for the whole
period above. We have disclosed … of the period above. We have disclosed … [4]
2.3 A listed entity should disclose: … the names of the directors considered by the board to be ☐ an explanation why that is so in our Corporate Governance
(a) the names of the directors considered by the board to be independent directors: Statement
independent directors;
in our Corporate Governance Statement OR
(b) if a director has an interest, position, association or
relationship of the type described in Box 2.3 but the board ☐ at [ insert location ]
is of the opinion that it does not compromise the … and, where applicable, the information referred to in paragraph (b):
independence of the director, the nature of the interest,
position, association or relationship in question and an in our Corporate Governance Statement OR
explanation of why the board is of that opinion; and
☐ at [ insert location ]
(c) the length of service of each director.
… and the length of service of each director:
in our Corporate Governance Statement OR
☐ at [ insert location ]
2.4 A majority of the board of a listed entity should be independent … the fact that we follow this recommendation: ☐ an explanation why that is so in our Corporate Governance
directors.
Statement OR
in our Corporate Governance Statement OR
☐ at [ insert location ] ☐ we are an externally managed entity and this recommendation
is therefore not applicable
2.5 The chair of the board of a listed entity should be an independent … the fact that we follow this recommendation: ☐ an explanation why that is so in our Corporate Governance
director and, in particular, should not be the same person as the Statement OR
CEO of the entity. in our Corporate Governance Statement OR
☐ at [ insert location ] ☐ we are an externally managed entity and this recommendation
is therefore not applicable
2.6 A listed entity should have a program for inducting new directors … the fact that we follow this recommendation: ☐ an explanation why that is so in our Corporate Governance
and provide appropriate professional development opportunities Statement OR
for directors to develop and maintain the skills and knowledge in our Corporate Governance Statement OR
needed to perform their role as directors effectively. ☐ at [ insert location ] ☐ we are an externally managed entity and this recommendation
is therefore not applicable
PRINCIPLE 3 – ACT ETHICALLY AND RESPONSIBLY
3.1 A listed entity should: … our code of conduct or a summary of it: ☐ an explanation why that is so in our Corporate Governance
(a) have a code of conduct for its directors, senior executives ☐ in our Corporate Governance Statement OR Statement
and employees; and
(b) disclose that code or a summary of it. at www.biotron.com.au
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Corporate Governance Council recommendation We have followed the recommendation in full for the whole of the period above. We have disclosed … We have NOT followed the recommendation in full for the whole of the period above. We have disclosed …4	Corporate Governance Council recommendation We have followed the recommendation in full for the whole of the period above. We have disclosed … We have NOT followed the recommendation in full for the whole of the period above. We have disclosed …4	Corporate Governance Council recommendation We have followed the recommendation in full for the whole of the period above. We have disclosed … We have NOT followed the recommendation in full for the whole of the period above. We have disclosed …4	Corporate Governance Council recommendation We have followed the recommendation in full for the whole of the period above. We have disclosed … We have NOT followed the recommendation in full for the whole of the period above. We have disclosed …4
PRINCIPLE 4 – SAFEGUARD INTEGRITY IN CORPORATE REPORTING
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 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 corporate reporting, including the processes for the appointment and removal of the external auditor and the rotation of the audit engagement partner. [If the entity complies with paragraph (a):] … the fact that we have an audit committee that complies with paragraphs (1) and (2): `☐`in our Corporate Governance Statement OR `☐`at [insert location] … and a copy of the charter of the committee: `☐`at [insert location] … and the information referred to in paragraphs (4) and (5): `☐`in our Corporate Governance Statement OR `☐`at [insert location] [If the entity complies with paragraph (b):] … the fact that we do not have an audit committee and the processes we employ that independently verify and safeguard the integrity of our corporate reporting, including the processes for the appointment and removal of the external auditor and the rotation of the audit engagement partner: `☐`in our Corporate Governance Statement OR `☐`at [insert location] an explanation why that is so in our Corporate Governance Statement
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.	… the fact that we follow this recommendation: in our Corporate Governance Statement OR `☐`at [insert location]	`☐` an explanation why that is so in our Corporate Governance Statement

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Corporate Governance Council recommendation We have followed the recommendation in full for the whole of the We have NOT followed the recommendation in full for the whole
period above. We have disclosed … of the period above. We have disclosed … [4]
4.3 A listed entity that has an AGM should ensure that its external … the fact that we follow this recommendation: ☐ an explanation why that is so in our Corporate Governance
auditor attends its AGM and is available to answer questions Statement OR
from security holders relevant to the audit. in our Corporate Governance Statement OR
☐ at [ insert location ] ☐ we are an externally managed entity that does not hold an
annual general meeting and this recommendation is therefore
not applicable
PRINCIPLE 5 – MAKE TIMELY AND BALANCED DISCLOSURE
5.1 A listed entity should: … our continuous disclosure compliance policy or a summary of it: ☐ an explanation why that is so in our Corporate Governance
(a) have a written policy for complying with its continuous ☐ in our Corporate Governance Statement OR Statement
disclosure obligations under the Listing Rules; and
(b) disclose that policy or a summary of it. at www.biotron.com.au
PRINCIPLE 6 – RESPECT THE RIGHTS OF SECURITY HOLDERS
6.1 A listed entity should provide information about itself and its … information about us and our governance on our website: ☐ an explanation why that is so in our Corporate Governance
governance to investors via its website. Statement
at www.biotron.com.au
6.2 A listed entity should design and implement an investor relations … the fact that we follow this recommendation: ☐ an explanation why that is so in our Corporate Governance
program to facilitate effective two-way communication with Statement
investors. in our Corporate Governance Statement OR
☐ at [ insert location ]
6.3 A listed entity should disclose the policies and processes it has in … our policies and processes for facilitating and encouraging ☐ an explanation why that is so in our Corporate Governance
place to facilitate and encourage participation at meetings of participation at meetings of security holders: Statement OR
security holders.
in our Corporate Governance Statement OR ☐ we are an externally managed entity that does not hold
☐ at [ insert location ] periodic meetings of security holders and this recommendation
is therefore not applicable
6.4 A listed entity should give security holders the option to receive … the fact that we follow this recommendation: ☐ an explanation why that is so in our Corporate Governance
communications from, and send communications to, the entity Statement
and its security registry electronically. in our Corporate Governance Statement OR
☐ at [ insert location ]
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Corporate Governance Council recommendation We have followed the recommendation in full for the whole of the period above. We have disclosed … We have NOT followed the recommendation in full for the whole of the period above. We have disclosed …4	Corporate Governance Council recommendation We have followed the recommendation in full for the whole of the period above. We have disclosed … We have NOT followed the recommendation in full for the whole of the period above. We have disclosed …4	Corporate Governance Council recommendation We have followed the recommendation in full for the whole of the period above. We have disclosed … We have NOT followed the recommendation in full for the whole of the period above. We have disclosed …4	Corporate Governance Council recommendation We have followed the recommendation in full for the whole of the period above. We have disclosed … We have NOT followed the recommendation in full for the whole of the period above. We have disclosed …4
PRINCIPLE 7 – RECOGNISE AND MANAGE RISK
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. [If the entity complies with paragraph (a):] … the fact that we have a committee or committees to oversee risk that comply with paragraphs (1) and (2): `☐`in our Corporate Governance Statement OR `☐`at [insert location] … and a copy of the charter of the committee: `☐`at [insert location] … and the information referred to in paragraphs (4) and (5): `☐`in our Corporate Governance Statement OR `☐`at [insert location] [If the entity complies with paragraph (b):] … the fact that we do not have a risk committee or committees that satisfy (a) and the processes we employ for overseeing our risk management framework: `☐`in our Corporate Governance Statement OR `☐`at [insert location] an explanation why that is so in our Corporate Governance Statement
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.	… the fact that board or a committee of the board reviews the entity’s risk management framework at least annually to satisfy itself that it continues to be sound: in our Corporate Governance Statement OR `☐`at [insert location] … and that such a review has taken place in the reporting period covered by this Appendix 4G: in our Corporate Governance Statement OR `☐`at [insert location]	`☐` an explanation why that is so in our Corporate Governance Statement

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Corporate Governance Council recommendation We have followed the recommendation in full for the whole of the We have NOT followed the recommendation in full for the whole
period above. We have disclosed … of the period above. We have disclosed … [4]
PRINCIPLE 8 – REMUNERATE FAIRLY AND RESPONSIBLY
8.1 The board of a listed entity should: [If the entity complies with paragraph (a):] ☐ an explanation why that is so in our Corporate Governance
(a) have a remuneration committee which: … the fact that we have a remuneration committee that complies with Statement OR
(1) has at least three members, a majority of whom are paragraphs (1) and (2): ☐ we are an externally managed entity and this recommendation is
independent directors; and
in our Corporate Governance Statement OR therefore not applicable
(2) is chaired by an independent director,
☐ at [ insert location ]
and disclose:
… and a copy of the charter of the committee:
(3) the charter of the committee;
(4) the members of the committee; and at www.biotron.com.au
(5) as at the end of each reporting period, the number of … and the information referred to in paragraphs (4) and (5):
times the committee met throughout the period and
the individual attendances of the members at those in our Corporate Governance Statement OR
meetings; or ☐ at [ insert location ]
(b) if it does not have a remuneration committee, disclose that
[If the entity complies with paragraph (b):]
fact and the processes it employs for setting the level and
composition of remuneration for directors and senior … the fact that we do not have a remuneration committee and the
executives and ensuring that such remuneration is processes we employ for setting the level and composition of
appropriate and not excessive. remuneration for directors and senior executives and ensuring that
such remuneration is appropriate and not excessive:
☐ in our Corporate Governance Statement OR
☐ at [ insert location ]
8.2 A listed entity should separately disclose its policies and … separately our remuneration policies and practices regarding the ☐ an explanation why that is so in our Corporate Governance
practices regarding the remuneration of non-executive directors remuneration of non-executive directors and the remuneration of Statement OR
and the remuneration of executive directors and other senior executive directors and other senior executives:
executives. ☐ we are an externally managed entity and this recommendation
in our Corporate Governance Statement OR is therefore not applicable
☐ at [ insert location ]
8.3 A listed entity which has an equity-based remuneration scheme … our policy on this issue or a summary of it: ☐ an explanation why that is so in our Corporate Governance
should:
Statement OR
in our Corporate Governance Statement OR
(a) have a policy on whether participants are permitted to
enter into transactions (whether through the use of ☐ at [ insert location ] ☐ w e do not have an equity-based remuneration scheme and this
derivatives or otherwise) which limit the economic risk of recommendation is therefore not applicable OR
participating in the scheme; and ☐ we are an externally managed entity and this recommendation
(b) disclose that policy or a summary of it. is therefore not applicable
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Corporate Governance Council recommendation We have followed the recommendation in full for the whole of the period above. We have disclosed … We have NOT followed the recommendation in full for the whole of the period above. We have disclosed …4	Corporate Governance Council recommendation We have followed the recommendation in full for the whole of the period above. We have disclosed … We have NOT followed the recommendation in full for the whole of the period above. We have disclosed …4	Corporate Governance Council recommendation We have followed the recommendation in full for the whole of the period above. We have disclosed … We have NOT followed the recommendation in full for the whole of the period above. We have disclosed …4	Corporate Governance Council recommendation We have followed the recommendation in full for the whole of the period above. We have disclosed … We have NOT followed the recommendation in full for the whole of the period above. We have disclosed …4
ADDITIONAL DISCLOSURES APPLICABLE TO EXTERNALLY MANAGED LISTED ENTITIES
- Alternative to Recommendation 1.1 for externally managed listed entities: The responsible entity of an externally managed listed entity should disclose: (a) the arrangements between the responsible entity and the listed entity for managing the affairs of the listed entity; (b) the role and responsibility of the board of the responsible entity for overseeing those arrangements. … the information referred to in paragraphs (a) and (b): `☐`in our Corporate Governance Statement OR `☐`at [insert location] `☐` an explanation why that is so in our Corporate Governance Statement
-	Alternative to Recommendations 8.1, 8.2 and 8.3 for externally managed listed entities: An externally managed listed entity should clearly disclose the terms governing the remuneration of the manager.	… the terms governing our remuneration as manager of the entity: `☐`in our Corporate Governance Statement OR `☐`at [insert location]	`☐` an explanation why that is so in our Corporate Governance Statement

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CORPORATE GOVERNANCE STATEMENT FOR THE YEAR ENDED 30 JUNE 2018

(ASX: BIT)

This Corporate Governance Statement is current as at 3 August 2018 and has been approved by the Board of Biotron Ltd (‘the Company’), on that date. A copy can be found on the Company’s website at www.biotron.com.au/corporate-governance.

This statement outlines the main Corporate Governance practices that were in place throughout the financial year, which comply with the Australian Stock Exchange ('ASX') Corporate Governance Principles and Recommendations (‘Recommendations’), unless otherwise stated.

CORPORATE GOVERNANCE STATEMENT

The Board of Directors of the Company (‘the Board’) is committed to maintaining the highest standards of Corporate Governance. Corporate Governance is about having a set of core values and behaviours that underpin the Company's activities and ensure transparency, fair dealing and protection of the interests of stakeholders.

The Board of Directors supports the Recommendations developed by the ASX Corporate Governance Council (‘Council’). Whilst the Company's practices are largely consistent with the Council's guidelines, the Board considers that the implementation of some Recommendations are not appropriate having regard to the nature and scale of the Company's activities and size of the Board. The Board uses its best endeavours to ensure exceptions to the Council's guidelines do not have a negative impact on the Company and the best interests of shareholders as a whole. When the Company is not able to implement one of the Council’s Recommendations the Company applies the 'if not, why not' explanation approach by applying practices in accordance with the spirit of the relevant principle.

The following discussion outlines the ASX Corporate Governance Council's eight principles and associated recommendations and the extent to which the Company complies with those recommendations.

Details of all of the Council's Recommendations can be found on the ASX website at www.asx.com.au.

Principle 1 – Lay solid foundations for management and oversight

Board role and responsibilities

The Board is responsible for, and has the authority to determine, all matters relating to the policies, practices, management and operations of the Company. The Board is also responsible for the overall corporate governance and management oversight of the Company and recognises the need for the highest standards of behaviour and accountability in acting in the best interests of the Company.

The Board also ensures that the Company complies with all of its contractual, statutory and any other legal or regulatory obligations. The Board has the final responsibility for the successful operations of the Company.

Where the Board considers that particular expertise or information is required, which is not available from within their members, appropriate external advice may be taken and reviewed prior to a final decision being made by the Board.

Without intending to limit the role of the Board, the principal functions and responsibilities of the Board include the following:

formulation and approval of the strategic direction, objectives and goals of the Company;
the prudential control of the Company's finances and operations, monitoring the financial
performance and approving budgets and major expenditures of the Company;
the resourcing, review and monitoring of performance of senior management;
ensuring that adequate internal control systems and procedures exist and that compliance with these systems and procedures is maintained;
the identification of significant business risks and ensuring that such risks are adequately managed;
the timeliness, accuracy and effectiveness of communications and reporting to shareholders and the market;
the establishment and maintenance of appropriate ethical standards;
overseeing the integrity of the accounting and corporate reporting systems and the external audit process;
approving the Company’s remuneration framework; and
monitoring the effectiveness of corporate governance practices.

Having regard to the current size of the Company and the nature of its activities and the composition and structure of the Board, those functions usually reserved to management for implementing the strategic objectives of the Company are the responsibility of the Managing Director.

The Company has followed Recommendation 1.1 by establishing the functions reserved to the Board and those delegated to senior executives as disclosed above.

Appointment as a Director

The Company has followed Recommendation 1.2 by ensuring that the appointment of directors who will come before shareholders for re-election at the Company’s Annual General Meeting are suitable for the Company and equipped with the knowledge and information to discharge their roles adequately. In addition, the Company ensures that all relevant information that it possess is disclosed in the notice of meeting to enable shareholders to make a decision on whether or not to elect or re-elect a director.

The Company has followed Recommendation 1.3 by having a written agreement with each director and senior executive setting out the terms of their appointment.

Company Secretary

The Company has followed Recommendation 1.4 by ensuring that the Company Secretary is accountable directly to the Board, through the Chairman, on all matters to do with the proper functioning of the Board.

Diversity

The Company’s Board does take into account the gender, age, ethnicity, and cultural background of potential Board members, Company executives and employees and understands that promotion of gender diversity can broaden the pool for recruitment of high quality employees, enhance employee retention and improve corporate image and reputation. Hence, approximately 75% of the Company’s employees and two of the four directors, including the Managing Director, are female. However, given the small size of the Company, a formal diversity policy has not been established and therefore Recommendation 1.5 has not been followed.

Board performance review and evaluation

The Board has the policy to ensure that the directors are equipped with the knowledge and information they need to effectively discharge their responsibilities. The Chairman monitors the performance of the Board, individual directors and committees on an on-going basis and speaks to directors individually regarding their role as a director. In doing so, the Company has followed Recommendation 1.6.

Senior executives’ performance review and evaluation

Having regard to the size of the Company and the small number of employees, other than the directors, the Company does not have any senior executives and therefore, Recommendation 1.7 is not applicable.

Principle 2 – Structure the Board to add value

Board of Directors – composition and structure

Having regard to the size of the Company and the nature of its activities, the composition and structure of the Board is adequate to discharge its responsibilities and duties.

Nomination Committee

The objective of a Nomination Committee is to make recommendations to the Board regarding various matters including board succession, recruitment, induction, professional development, performance evaluation, recommending an appropriate balance of skills, knowledge, experience, independence and diversity as required. A Nomination Committee has not been established, however in accordance to Recommendation 2.1, the full Board has the responsibility for and performs the functions of a Nomination Committee.

Skills of the Board

The Board consists of a blend of personal experience at director-level and relevant corporate experience required by the Group for effective decision-making. Directors are appointed based on the specific operational, corporate and governance skills required by the Group and the Company follows Recommendation 2.2 by disclosing the directors’ qualifications and experience, which satisfy the Board skill matrix below, in the Directors’ Report section of the Annual Report .

Board skill matrix

Board skill matrix
Area	Competence
Business Finance	Business strategy,financial literacy,executive management
Investment	Corporate mergers and acquisitions, corporate financing, portfolio management
Technical	Development of research based pharmaceuticals, managing commercial bioscience research and clinical trials.
Leadership	Experience in public listed companies having the ability but not limited to setting Board directives and representing the Company appropriately

Additionally the Company follows Recommendation 2.3 by disclosing those directors considered by the Board to be independent directors and the length of service of each director.

Board composition and independence

Having regard to the size of the Company and the nature of its activities, the Board has four directors all of whom have been, or are, involved in the management of the Company or are substantial shareholders in the Company. The names of the directors of the Company in office at the date of this report and their length of service are as follows:

Mr. Michael J. Hoy, independent, non-executive Chairman – appointed 7 February 2000

Dr. Michelle Miller, Managing Director – appointed 21 June 2002 Dr. Susan Pond – independent and non-executive director, appointed 7 March 2012 Mr. Robert B. Thomas – independent and non-executive director, appointed 7 March 2012.

The Company follows Recommendation 2.4, with all the directors being independent and non-executive except for the Managing Director and it is the Board’s opinion that all directors bring to the Board their independent judgement.

Chairman and CEO

Mr. Michael Hoy, an independent non-executive director, holds the office of Chairman. The Company follows Recommendation 2.5 as the Chairman does not hold the position of Chief Executive Officer.

Directors’ induction and education

In accordance with Recommendation 2.6 the Company encourages directors to continue their professional development to assist them in performing their role effectively and has a policy to provide each new director or officer with a copy of the following documents:

Code of Conduct;
Continuous Disclosure Policy;
Share Trading Policy; and
Shareholders Communication Policy.

Principle 3 – Act ethically and responsibly

Code of Conduct Policy and ethical standards

All directors, executives and employees are expected to act with the utmost integrity and objectivity in carrying out their duties and responsibilities, endeavouring at all times to enhance the reputation and performance of the Company. Every employee has direct access to a director to whom they may refer any ethical issues that may arise from their employment. The Company has followed Recommendation 3.1 and has adopted a formal Code of Conduct policy which is available on the Company’s website at www.biotron.com.au.

Access to Company information and confidentiality

All directors have the right of access to all relevant Company books and to the Company's executive management. In accordance with legal requirements and agreed ethical standards, directors and executives of the Company have agreed to keep confidential information received in the course of exercising their duties and will not disclose non-public information except where disclosure is authorised or legally mandated.

Share dealings and disclosures

The Company has adopted a policy relating to the trading of Company securities. The Board restricts directors, executives and employees from acting on material information until it has been released to the market. Directors are required to consult with the Chairman prior to dealing in securities in the Company or other companies with which the Company has a material relationship.

Share trading by directors, executives or employees is not permitted at any time whilst in the possession of price sensitive information not already available to the market. In addition, the Corporations Act prohibits the purchase or sale of securities whilst a person is in possession of inside information.

The trading windows for restricted persons are 60 days after the release of the half year results, the full year results or the holding of the Annual General Meeting. Restricted persons are prohibited from trading in the Company’s securities outside these trading windows unless in special circumstances and with the approval of the Chairman.

Conflicts of interest

To ensure that directors are at all times acting in the best interests of the Company, directors must:

disclose to the Board actual or potential conflicts of interest that may or might reasonably be thought to exist between the interests of the director and the interests of any other parties in carrying out the activities of the Company; and
if requested by the Board, within seven days or such further period as may be permitted, take such necessary and reasonable steps to remove any conflict of interest.

If a director cannot, or is unwilling to remove a conflict of interest then the director must, as required by the Corporations Act, absent himself from the room when Board discussion and/or voting occurs on matters about which the conflict relates.

Related party transactions

Related party transactions include any financial transaction between a director and the Company as defined in the Corporations Act or the ASX Listing Rules. Unless there is an exemption under the Corporations Act from the requirement to obtain shareholder approval for the related party transaction, the Board cannot approve the transaction. The Company also discloses related party transactions in its financial statements as required under relevant Accounting Standards.

Principle 4 – Safeguard integrity in financial reporting

Audit Committee

Having regard to the size of the Company and the nature of its activities and the composition and structure of the Board, an Audit Committee has not been established, however, in compliance with Recommendation 4.1, the full Board has the responsibility for and performs the following functions of an Audit Committee:

the adequacy of the corporate reporting processes;
evaluation from time to time the effectiveness of the financial statements;
the appointment and removal of the external auditor;
the scope and adequacy of the external audit and the rotation of the audit engagement partner;
risk management and compliance procedures;
the appropriateness of the accounting judgement exercised by management; and
ensuring that independent judgement is always exercised.

CEO and CFO declarations

The Company has followed Recommendation 4.2. The Board has determined that the Managing Director and the CFO or the Company Secretary if the Company does not have a CFO are the appropriate persons to make the CEO and CFO declarations as required under section 295A of the Corporations Act.

The declaration confirms that, the internal control system is operating effectively in all material respects, the financial records of the Company have been properly maintained and the financial statements comply with the appropriate accounting standards and give a true and fair view of the financial position and performance of the Company.

Auditor attendance at Annual General Meeting

The Company has followed Recommendation 4.3. The Company’s external auditor attends the Company’s AGM and is available to answer shareholders’ questions about the conduct of the audit and the preparation and content of the auditor’s report.

Principle 5 – Make timely and balanced disclosure

Continuous Disclosure Policy

The Company has followed Recommendation 5.1 and has adopted a formal Continuous Disclosure Policy which is available on the Company’s website at www.biotron.com.au.

Continuous Disclosure to the ASX

The Board has designated the Managing Director and Company Secretary as being responsible for overseeing and co-ordinating disclosure of information to the ASX as well as communicating with the ASX. Accordingly the Company will notify the ASX promptly of information:

concerning the Company, that a reasonable person would expect to have a material effect on the price or value of the Company's securities; and
that would, or would be likely to, influence persons who commonly invest in securities in deciding whether to acquire or dispose of the Company's securities.

Announcements are made in a timely manner, are factual and do not omit material information in order to avoid the emergence of a false market in the Company's securities.

Principle 6 – Respect the rights of security holders

The Company has followed Recommendation 6.1 by keeping investors informed through the Company’s website at www.biotron.com,au and on the ASX website, www.asx.com.au, under ASX code 'BIT' regarding information about the Company, the Board, policies, reports and ASX announcements.

The Company has followed Recommendations 6.2 and 6.3 by designing a communications program to promote effective communication with shareholders and to encourage their participation at general meetings.

The Board recognises its duty to ensure that its shareholders are informed of all major developments affecting the Company's state of affairs. Information is communicated to shareholders and the market through:

the Annual Report which is distributed to shareholders (usually with the Notice of Annual General Meeting);
the Annual General Meeting and other general meetings called to obtain shareholder approvals as appropriate;
the half-yearly financial statements;
quarterly activities and cash flow reports; and
other announcements released to the ASX as required under the continuous disclosure requirements of the ASX Listing Rules and other information that may be mailed to shareholders or made available through the Company’s website.

The Company has followed Recommendation 6.4. The Company via its share registry, Computershare Investor Services, gives shareholders the option to receive communications electronically. Additionally through the Company’s website shareholders or other interested parties are able to sign up for a mailing list to which all ASX announcements are sent immediately following the release of the announcement.

Principle 7 – Recognise and manage risk

Risk Committee

Having regard to the size of the Company and the nature of its activities and the composition and structure of the Board, a Risk Committee has not been established, however, in compliance with Recommendation 7.1, the full Board has the responsibility for and performs the functions of a Risk Committee.

The full Board is responsible for the identification, monitoring and management of significant business risks, assessment of the Company’s insurance program and the implementation of appropriate levels of internal control, recognising, however, that no cost effective internal control system will preclude all errors and irregularities.

Risk management

The Company has followed Recommendation 7.2, whereby the full Board regularly throughout the year reviews and monitors systems of external and internal controls and areas of significant operational, financial and property risk, and ensures arrangements are in place to contain such risks to acceptable levels.

Internal audit function

Having regard to the size of the Company and the nature of its activities, an internal audit function has not been established, however, in compliance with Recommendation 7.3, it is disclosed that the full Board carries out the risk management and internal audit functions.

Risks and risk management

In compliance with Recommendation 7.4, the material manageable risks which the Company is exposed to include operational risks, capital risks and human resources risks as follows:

obtaining government and other regulatory approvals;
biotechnology research and development issues;
patents and protection of the Company’s intellectual property;
commercialisation of the Company’s intellectual property;
the ability to raise additional capital; and
recruiting and retaining qualified personnel.

The full Board is responsible to oversee the risk management function and the Managing Director is in charge of implementing an appropriate level of control to mitigate these risks within the Company. The full Board reviews all major Company strategies and decisions and takes appropriate actions on a continuous basis.

Principle 8 – Remunerate fairly and responsibly

Remuneration Committee

The Company has followed Recommendation 8.1 by establishing a Remuneration Committee comprising of three members, the majority of whom, including the Chairman, are independent directors. The committee members for the reporting period were:

Mr Michael J. Hoy – Chairman of the Committee Mr Robert B. Thomas Mr Peter J. Nightingale

The committee did not meet during the reporting period.

The Remuneration Committee Charter is available on the Company’s website at www.biotron.com.au.

The Remuneration Committee reviews and makes recommendations to the Board in relation to:

executive director and senior executive remuneration;
non-executive directors remuneration;
performance measurement policies and procedures;
superannuation arrangements;
incentive plans;
equity based plans;
termination policies and procedures; and
remuneration public disclosures.

Remuneration policy

In compliance with Recommendation 8.2, it is disclosed that the Company remunerates its directors and senior executives based on fixed and incentive component salary packages to reflect the short and longterm objectives of the Company.

The following remuneration guidelines have been adopted to ensure that remuneration arrangements are equitable, appropriate, and not excessive:

directors’ remuneration is voted on for approval by shareholders at the Annual General Meeting;
the full Board approves the salary and emoluments paid to senior executives;
consultants are engaged as required pursuant to service agreements;
the full Board ensures that fees, salaries and emoluments are in line with general standards for publicly listed companies of the size and type of the Company; and
all salaries of directors and key management personnel are disclosed in the Annual Report.

The Company has a policy to remunerate its directors and officers based on fixed and incentive component salary packages to reflect the short and long term objectives of the Company.

The salary component of non-executive and executive directors is made up of:

fixed remuneration; and
equity based remuneration when invited to participate by the Board in the executive share option plan of the Company.

In compliance with Recommendation 8.3, it is disclosed that the Company has adopted a policy on that participants in the Company’s equity based remuneration scheme are not permitted to enter into transactions which limit the economic risk of participating in the scheme.

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