ENERGY ACTION LIMITED — Governance Information 2011

Oct 10, 2011

ENERGY ACTION LIMITED (ACN 137 363 636)

Corporate Governance Compliance Report

Energy Action Limited (the Company ) has established a set of corporate governance policies and procedures that are predominately based on the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations with 2010 Amendments (the ASX Principles and Recommendations ). This Corporate Governance Compliance Report contains a summary of the extent to which the Company has complied (or will comply) with the ASX Principles and Recommendations and explains the reasons for any non-compliance.

In some cases, the Company has not complied because it has not yet had the opportunity to comply eg in its first annual report as a listed company. In such cases, we have shown “No but intends to”.

ASX Principles and Recommendations	ASX Principles and Recommendations	Compliance?	Comments and/or reason for non-compliance
Principle 1	Lay solid foundations for management and oversight
1.1	Establish the functions reserved to the board and those delegated to senior	Yes	The Board Charter is published on the Corporate Governance page of
	executives and disclose those functions.		the Company’s website.
1.2	Disclosure theprocess for evaluatingtheperformance of senior executives.	Yes	As above.
1.3	Material to be included in the corporate governance statement in the annual
	report:
	 an explanation of any departure from any principal 1 recommendations;	No but	To date the Company has not been required to produce an annual
	and	intends to	report but will do so for the financial year ending 30 June 2012.
	 whether a performance evaluation for senior executives has taken place	No but	To date the Company has not been required to produce an annual
	in the reporting period and whether it was in accordance with the	intends to	report but will do so for the financial year ending 30 June 2012.
	process disclosed.
	Make the Board Charter publicly available.	Yes	See the Board Charter published on the Corporate Governance page of
			the Company’s website.
Principle 2	Structure the board to add value
2.1	A majority of the board should be independent directors.	No	The Board will seek to recruit one or more suitable qualified
			independent directors after listing, as set out in the Prospectus. At this
			early stage of the Company's listing, the Board is focused on sustaining
			and improving shareholder value by maintaining the current Board
			composition(and addingindependent directorsprogressively).
2.2	Chair should be an independent director.	No	The chair is not an independent director because no independent
			directors currentlysit on the Board.
2.3	The roles of chair and chief executive officer should not be exercised by the	Yes	The chair of the Board is Ronald Watts and the chief executive officer is
	same individual.		Valerie Duncan.

ASX Principles	ASX Principles	and Recommendations	Compliance?	Comments and/or reason for non-compliance
2.4	Establish a nomination committee.		Yes
2.5	Disclose the process for evaluating the performance of the board, its		Yes	Board Charter and Nomination Committee Charter published on the
	committees and individual directors.			Corporate Governancepage of the Company’s website.
2.6	Material to be included in the corporate governance statement in the annual		No but	To date the Company has not been required to produce an annual
	report:		intends to	report but will do so for the financial year ending 30 June 2012.
		the skills, experience and expertise relevant to the position of director		As above.
		held by each director in office at the date of the annual report;
		the names of the directors considered by the board to constitute		As above.
		independent directors and the company’s materiality thresholds;
		the existence of any of the relationships listed in the ASX Principals and		As above.
		Recommendations and an explanation of why the board considers a
		director to be independent, notwithstanding the existence of these
		relationships;
		a statement as to whether there is a procedure agreed by the board for		As above. However, also see section 2.2 of the Board Charter.
		directors to take independent professional advice at the expense of the
		company;
		a statement as to the mix of skills and diversity for which the board of		As above.
		directors is looking to achieve in membership of the board;
		the period of office held by each director in office at the date of the		As above.
		annual report;
		the names of members of the nomination committee and their		As above.
		attendance at meetings of the committee;
		whether a performance evaluation for the board, its committees and		As above.
		directors has taken place in the reporting period and whether it was in
		accordance with the process disclosed; and
		an explanation of any departures from principle 2 recommendations.		As above.
	Material to be made publicly available:
		a description of the procedure for the selection and appointment of new	Yes	Section 3 of the Nomination Committee Charter published on the
		directors and the re-election of incumbent directors;		Corporate Governance page of the Company’s website.
		the charter of the nomination committee; and	Yes	As above.
		the board’spolicyfor the nomination and appointment of directors.	Yes	As above.
Principle 3	Promote ethical and responsible decision-making
3.1	Establish a code of conduct and disclosure the code or a summaryof the		Yes	Code of Conductpublished on the Corporate Governancepage of the

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ASX Principles and Recommendations	ASX Principles and Recommendations	Compliance?	Comments and/or reason for non-compliance
	code as to:		Company’s website.
	 the practices necessary to maintain confidence in the company’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
	investigatingreports of unethicalpractices.
3.2	Establish a policy concerning diversity and disclose the policy.	Yes	Diversity Policy published on the Corporate Governance page of the
			Company’s website.
3.3	Disclose in each annual report the measurable objectives for achieving	No	To date the Company has not been required to produce an annual
	gender diversity set by the board in accordance with the diversity policy		report but will do so for the financial year ending 30 June 2012.
	andprogress towards achievingthem.
3.4	Disclose in each annual report the proportion of women employees in the	No but	To date the Company has not been required to produce an annual
	whole organisation, women in senior executive position and women on the	intends to	report but will do so for the financial year ending 30 June 2012.
	board.
3.5	Material to be included in the corporate governance statement in the annual
	report:
	 an explanation of any departures from principle 2 recommendations.	No but	To date the Company has not been required to produce an annual
		intends to	report but will do so for the financial year ending 30 June 2012.
	Material to be made publicly available:
	 any applicable code of conduct; and	Yes	Code of Conduct published on the Corporate Governance page of the
			Company’s website.
	 the diversity policy.	Yes	Diversity Policy published on the Corporate Governance page of the
			Company’s website.
Principle 4	Safeguard integrity in financial reporting
4.1	Board to establish an audit committee.	Yes
4.2	Audit committee should be structured so that it:
	 consists only of non-executive directors;	No	Two executive directors currently sit on the Risk Management & Audit
			Committee to ensure the committee has the relevant technical expertise
			required by recommendation 4.2 of the ASX Principles and
			Recommendations.
	 consists of a majority of independent directors;	No	There are no independent directors on the Risk Management & Audit
			Committee because no independent directors currently sit on the
			Board.

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ASX Principles	ASX Principles	and Recommendations	Compliance?	Comments and/or reason for non-compliance
		is chaired by an independent chair, who is not chair of the board; and	No/ Yes	The chair of the Risk Management & Audit Committee is not
				independent because no independent directors currently sit on the
				Board.
				The chair of the Risk Management & Audit Committee is not the chair
				of the Board.
		has at least three members.	Yes	The Risk Management & Audit Committee has four members.
4.3	Audit committee should have a formal charter.		Yes
4.4	Material to be included in the corporate governance statement in the annual
	report:
		the names and qualifications of those appointed to the audit committee	No but	To date the Company has not been required to produce an annual
		and their attendance at meetings of the committee;	intends to	report but will do so for the financial year ending 30 June 2012
		the number of meetings of the audit committee; and	No but	As above.
			intends to
		explanation of any departures from principle 4 recommendations.	No but	As above.
			intends to
	Material to be made publicly available:
		the audit committee charter; and	Yes	Risk Management & Audit Committee Charter published on the
				Corporate Governance page of the Company’s website.
		information on procedures for the selection and appointment of the	Yes	Sections 4.7 & 4.8 of the Risk Management & Audit Committee Policy
		external auditor, and for the rotation of external audit engagement		published on the Corporate Governance page of the Company’s
		partners.		website.
Principle 5	Make timely and balanced disclosure
5.1	Establish written policies designed to ensure compliance with ASX Listing		Yes	Continuous Disclosure Policy.
	Rule disclosure requirements.
5.2	Material to be included in the corporate governance statement in the annual
	report:
		An explanation of any departures from principle 5 recommendations.	No but	To date the Company has not been required to produce an annual
			intends to	report but will do so for the financial year ending 30 June 2012
	Material to be made publicly available:
		The policies designed to guide compliance with Listing Rule disclosure	Yes	Continuous Disclosure Policy published on the Corporate Governance
		requirements.		page of the Company’s website.
Principle 6	Respect the rights of shareholders
6.1	Design a communicationspolicy.		Yes

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ASX Principles and Recommendations	ASX Principles and Recommendations	Compliance?	Comments and/or reason for non-compliance
6.2	An explanation of any departure from principle 6 recommendations to be	No but	To date the Company has not been required to produce an annual
	included in the corporate governance statement in the annual report.	intends to	report but will do so for the financial year ending 30 June 2012.
	The company should describe how it will communicate with its	Yes	Communications Policy published on the Corporate Governance page
	shareholders publicly.		of the Company’s website.
Principle 7	Recognise and manage risk
7.1	Establish policies for the oversight and management of material business	Yes	Risk Management & Audit Policy published on the Corporate
	risks.		Governancepage of the Company’s website.
7.2	Board should require management to design and implement the risk	Yes
	management and internal control system to manage the company’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 company’s management of its material business
	risks.
7.3	Board should disclose whether it has received assurance from the chief	No but	This assurance is required by the Board when a directors’ declaration is
	executive officer (or equivalent) and the chief financial officer (or equivalent)	intends to	required to be made in an annual report. To date the Company has not
	that the declaration provided in accordance with s295A of the Corporations		been required to produce an annual report but will do so for the
	Act is founded on a sound system of risk management and internal control		financial year ending 30 June 2012.
	and that the system is operating effectively in all material respects in
	relation to financial reportingrisks.
7.4	Material to be included in the corporate governance statement in the annual	No but
	report:	intends to
	 explanation of any departures from principle 7 recommendations;		To date the Company has not been required to produce an annual
			report but will do so for the financial year ending 30 June 2012.
	 whether the board has received the report from management; and		As above.
	 whether the board has received assurance from the chief executive		This assurance is required by the Board when a directors’ declaration is
	officer (or equivalent) and the chief financial officer (or equivalent).		required to be made in an annual report. To date the Company has
			not been required to produce an annual report but will do so for the
			financial year ending 30 June 2012.
	Material to be made publicly available:
	 a summary of the company’s policies on risk oversight and	Yes	Risk Management & Audit Policy published on the Corporate
	management of material business risks.		Governancepage of the Company’s website.
Principle 8	Remunerate fairly and responsibly
8.1	Board should establish a remuneration committee.	Yes
8.2	Remuneration committee should be structured so that it:

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ASX	Principles	and Recommendations	Compliance?	Comments and/or reason for non-compliance
		consists of a majority of independent directors	No	There are no independent directors on the Remuneration Committee
				because no independent directors currently sit on the Board.
		is chaired by an independent chair	No	The chair of the Remuneration Committee is not independent because
				no independent directors currently sit on the Board.
		has at least three members.	Yes	The Remuneration Committee consists of four members.
8.3	Clearly distinguish the structure of non-executive directors’ remuneration		Yes
	from that of executive directors and senior executives.
8.4	Material to be included in the corporate governance statement in the annual		No but
	report:		intends to
		the names of the members of the remuneration committee and their		To date the Company has not been required to produce an annual
		attendance at meetings of the committee;		report but will do so for the financial year ending 30 June 2012.
		the existence and terms of any schemes for retirement benefits, other		As above. No schemes for retirement benefits for non-executive
		than superannuation, for non-executive directors; and		directors exist.
		an explanation of any departures from principle 8 recommendations.		To date the Company has not been required to produce an annual
				report but will do so for the financial year ending 30 June 2012.
	Material to be made publicly available:
		the charter of the remuneration committee; and	Yes	Remuneration Committee Charter published on the Corporate
				Governance page of the Company’s website.
		a summary of the company’s policy on prohibiting entering into	Not	Not applicable as the Company does not have any equity based
		transactions in associated products which limit the economic risk of	applicable	remuneration schemes in place.
		participating in unvested entitlements under any equity-based
		remuneration schemes.

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