CD PRIVATE EQUITY FUND II — Governance Information 2013

Apr 4, 2013

US Select Private Opportunities Fund II (ARSN 162 057 089) (Fund) Corporate Governance Statement

This Corporate Governance Statement sets out the Fund’s current compliance with the ASX Corporate Governance Council’s 2[nd] edition Corporate Governance Principles and Recommendations with 2012 amendments ( Recommendations ). The Recommendations are not mandatory. However, the Fund will be required to provide a statement in future annual reports disclosing the extent to which the Fund has followed the Recommendations.

	Recommendations	Compliance	Comment
1.	Lay solid foundations for management and oversight
1.1.	Entities should establish the functions reserved to the board and those delegated to senior executives and disclose those functions.	Complies	The Fund’s Board Policy, the Agreement of Limited Partnership between Walsh & Company Investments Limited in its capacity as responsible entity of the Fund (Responsible Entity), Cordish Private Ventures, LLC and U.S. Select Private Opportunities Fund II GP, LLC (GP) (LP Agreement) and the investment management agreement between the GP and Dixon Asset Management USA, Inc. (Investment Manager) set out the specific responsibilities of the board and those delegated to the GP and/or Investment Manager.
1.2.	Entities should disclose the process for evaluating the performance of senior executives.	N/A	The Fund does not have any senior executives. The business of the Fund is managed by the GP and the Investment Manager.
1.3.	Provide the information indicated in_Guide to reporting on_ Principle 1.	Will comply	The Fund will provide the relevant information (including an explanation of any departures from Recommendations 1.1 and 1.2 (if any)) in future annual reports.
2.	Structure the board to add value
2.1.	A majority of the board should be independent directors.	Does not comply	No independent directors have been appointed to the board. The Fund’s compliance committee has a majority of independent members (currently one representative from the Responsible Entity and two external representatives). The GP, as general partner of the LP has appointed the Investment Manager to manage the Fund’s investments. No independent directors have been appointed to the Investment Manager. Given the Fund’s clear investment strategy detailed in the product disclosure statement dated 22 February 2013, the board is of the view that it is not necessary for the Fund to have an independent director.
2.2.	The chair should be an independent director.	Does not comply	The Chairman is not independent. See 2.1 above.

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	Recommendations	Compliance	Comment
2.3.	The roles of chair and chief executive officer should not be exercised by the same individual.	N/A	The Fund does not have any employees, including a Chief Executive Officer.
2.4.	The board should establish a nomination committee	Does not comply	The board does not have, and does not intend to establish, such a committee. The board has formed the view that the formation of such a committee would be inefficient given the Fund’s size and nature and would not serve to protect or enhance the interests of unitholders. The board will deal with this issue as a whole. If circumstances change the Fund will consider establishing a separate nomination committee.
2.5.	Entities should disclose the process for evaluating the performance of the board, its committees and individual directors.	Will comply	The board will review its performance by discussion and by individual communication with the Chairman and by reference to generally accepted board performance standards.
2.6.	Provide the information indicated in_Guide to reporting on_ Principle 2.	Will comply	The Fund will provide the relevant information (including an explanation of any departures from Recommendations 2.1, to 2.5 (if any)) in future annual reports.
3.	Promote ethical and responsible decision-making
3.1.	Entities should establish a code of conduct and disclose the code or a summary of the code as to: •the practices necessary to maintain confidence in the entity’s integrity; •the practices necessary to take into account their legal obligations and the reasonable expectations of their stakeholders; and •the responsibility and accountability of individuals for reporting and investigating reports of unethical practices.	Complies	The Fund has adopted various policies and procedures including a Code of Conduct and Securities Dealing Policy (both will be available on the Fund’s website) that apply to all directors and relevant employees. All codes and policies are designed to promote integrity, responsibility, accountability and adherence to relevant legislation.
3.2.	Entities should establish a policy concerning diversity and disclose the policy or a summary of that policy. The policy should include requirements for the board to establish measurable objectives for achieving gender diversity for the board to assess annually both the objectives and progress in achieving them.	Does not comply	The board will determine the appropriate policy concerning diversity. This policy will include a recommendation as to whether it is appropriate for the board to establish measureable objectives for achieving gender diversity for the board to assess annually.
3.3.	Entities should disclose in each annual report the measurable objectives for achieving gender diversity set by the board in accordance with the diversity policy and progress towards achieving them.	Does not comply	See 3.2 above.

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	Recommendations	Compliance	Comment
3.4.	Entities should disclose in each annual report the proportion of women employees in the whole organisation, women in senior executive positions and women on the board.	Does not comply	See 3.2 above.
3.5.	Provide the information indicated in_Guide to reporting on_ Principle 3.	Will comply	The Fund will provide the relevant information (including an explanation of any departures from Recommendations 3.1 to 3.4 (if any)) in future annual reports.
4.	Safeguard integrity in financial reporting
4.1.	The board should establish an audit committee.	Does not comply	The board does not intend to establish such a committee because the formation of such a committee would be inefficient given the Fund’s size and nature. An audit committee would not serve to protect or enhance the interest of unitholders. The board will deal with this issue as a whole. If circumstances change the Fund change the Fund will consider establishing a separate audit committee.
4.2.	The audit committee should be structured so that it: • consists only of non-executive directors • consists of a majority of independent directors • is chaired by an independent chair, who is not chair of the board • has at least three members.	Does not comply	See 4.1 above.
4.3.	The audit committee should have a formal charter.	Does not comply	See 4.1 above.
4.4.	Provide the information indicated in_Guide to reporting on_ Principle 4.	Does not comply	The Fund will provide the relevant information (including an explanation of any departures from Recommendations 4.1, 4.2 and 4.3 (if any)) in future annual reports.
5.	Make timely and balanced disclosure
5.1.	Entities should establish written policies and procedures designed to ensure compliance with ASX Listing Rule disclosure requirements and to ensure accountability at a senior executive level for that compliance and disclose those policies or a summary of those policies.	Will comply	The Fund will operate under the continuous disclosure requirements of the ASX Listing Rules as set out in its Continuous Disclosure Policy. The Fund will ensure that all information which may be expected to affect the value of the Fund’s securities or influence investment decisions is released to the market in order that all investors have equal and timely access to material information concerning the Fund. The Secretary has the responsibility for ensuring that all relevant information is released to the market in a timely manner in consultation with the board. The board considers this to be a satisfactory protocolgiventhe size and

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	Recommendations	Compliance	Comment
			nature of the Fund. The Fund will make this policy publicly available.
5.2.	Provide the information indicated in_Guide to reporting on_ Principle 5.	Will comply	The Fund will provide the relevant information (including an explanation of any departures from Recommendation 5.1 (if any)) in future annual reports.
6.	Respect the rights of unitholders
6.1.	Entities should design a communications strategy for promoting effective communication with unitholders and encouraging effective participation at general meetings and disclose their policy or a summary of that policy.	Complies	The board has developed a strategy within its Continuous Disclosure Policy to ensure that unitholders are informed of all major developments affecting the Fund’s performance, activities and state of affairs. This includes having a website to facilitate communication with unitholders via electronic methods. In addition, the Fund publishes regular unitholder communications, such as monthly NTA, half yearly and annual reports and provides unitholders with an opportunity to access such reports and other releases electronically.
6.2.	Provide the information indicated in_Guide to reporting on_ Principle 6.	Will comply	The Fund will provide the relevant information (including an explanation of any departures from Recommendation 6.1 (if any)) in future annual reports.
7.	Recognise and manage risk
7.1.	Entities should establish policies for the oversight and management of material business risks and disclose a summary of those policies.	Will comply	The board has established risk management systems in relation to the oversight and management of material business risks for the Responsible Entity, the Fund and the partnership established pursuant to the LP Agreement (partnership) (Risk Management Framework). The Risk Management Framework is underpinned by three interrelated elements: governance, risk management and assurance. The board is responsible for reviewing and approving the Risk Management Framework. The Risk Management Framework which sets out the minimum requirements and roles and responsibilities for managing risk across these entities. All employees have a responsibility to identify report and/or manage risk as it arises within the work environment. Summaries of the Risk Management Framework and other significant risk policies will be included in the Corporate Governance section on the Fund’s website.
7.2.	The board should require management to design and implement a risk management and internal control system to manage the entity’s material business risks and report to it on whether those risks are being managed effectively. The board should disclose that management has reported to it as to the effectiveness of the Entity’s management of its material business risks.	Will comply	The board is responsible for reviewing and overseeing the risk management strategy for the Fund. Management will establish and implement a risk management and internal control system to manage the Fund’s material business risks.

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	Recommendations	Compliance	Comment
7.3.	The board should disclose whether it has received assurance from the chief executive officer (or equivalent) and the chief financial officer (or equivalent) that the declaration provided in accordance with section 295A of the Corporations Act is founded on a sound system of risk management and internal control and that the system is operating effectively in all material respects in relation to financial reporting risks.	Will comply	The board will disclose whether it has received assurance from the person performing the role of chief financial officer for the Fund that the declaration provided in accordance with section 295A of the Corporations Act is founded on sound systems of risk management and internal controls and ensure that the systems are operating effectively in all material respects in relation to financial reporting risks.
7.4.	Provide the information indicated in_Guide to reporting on_ Principle 7.	Will comply	The Fund will provide the relevant information (including an explanation of any departures from Recommendations 7.1, 7.2, and 7.3 (if any)) in future annual reports.
8.	Remunerate fairly and responsibly
8.1.	The board should establish a remuneration committee.	Does not comply	The Fund does not pay directors fees and does not employ senior executives. As a result, the board does not have and does not intend to establish such a committee the formation of such a committee would be inefficient given the Fund’s size and nature. It would not serve to protect or enhance the interest of unitholders. The Fund does not indemnify the Responsible Entity with respect to the remuneration paid to the directors. The fees paid to the Responsible Entity are set by the constitution and detailed in the Fund’s Product Disclosure Statement.
8.2.	The remuneration committee should be structured so that it consists of a majority of independent directors, is chaired by an independent chair and has a least three members.	Does not comply	See 8.1 above.
8.3.	Entities should clearly distinguish the structure of non- executive directors’ remuneration from that of executive directors and senior executives.	Does not comply	See 8.1 above.
8.4.	Provide the information indicated in_Guide to reporting on_ Principle 8.	Will comply	The Fund will provide the relevant information (including an explanation of any departures from Recommendations 8.1, 8.2 and 8.3 (if any)) in future annual reports.