SIMONDS GROUP LIMITED — Governance Information 2015

Oct 14, 2015

Rules 4.7.3 and 4.10.3[1]

Appendix 4G

Key to Disclosures Corporate Governance Council Principles and Recommendations

Name of entity:
Simonds Group Limited
ABN / ARBN: 54 143 841 801	Financial year ended:
54 143 841 801	30 June 2015

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

☒ These pages of our annual report: Pages 49 – 58

• ☐ This URL on our website:

The Corporate Governance Statement is accurate and up to date as at 25 September 2015 and has been approved by the board.

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

Date: 15 October 2015 Name of Director or Secretary authorising Robert Stubbs lodgement: Chief Financial Officer & Company Secretary

Signed:

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

Corporate Governance Council recommendation	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 1 – LAY SOLID FOUNDATIONS FOR MANAGEMENT AND OVERSIGHT
1.1	A listed entity should disclose: (a) the respective roles and responsibilities of its board and management; and (b) those matters expressly reserved to the board and those delegated to management.	… the fact that we follow this recommendation: ☒in our Corporate Governance Statement OR ☐at [insert location] … 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 https://simondsgroup.com.au/corporateGovernance	☐ an explanation why that is so in our Corporate Governance Statement OR ☐ we are an externally managed entity and this recommendation is therefore not applicable
1.2	A listed entity should: (a) undertake appropriate checks before appointing a person, or putting forward to security holders a candidate for election, as a director; and (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.	… 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 OR ☐ we are an externally managed entity and this recommendation is therefore not applicable
1.3	A listed entity should have a written agreement with each director and senior executive setting out the terms of their appointment.	… 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 OR ☐ 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 directly to the board, through the chair, on all matters to do with the proper functioning of the board.	… 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 OR ☐ we are an externally managed entity and this recommendation is therefore not applicable

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	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
1.5	A listed entity should: (a) have a diversity policy which includes requirements for the board or a relevant committee of the board to set measurable objectives for achieving gender diversity and to assess annually both the objectives and the entity’s progress in achieving them; (b) disclose that policy or a summary of it; and (c) disclose as at the end of each reporting period the measurable objectives for achieving gender diversity set by the board or a relevant committee of the board in accordance with the entity’s diversity policy and its progress towards achieving them and either: (1) the respective proportions of men and women on the board, in senior executive positions and across the whole organisation (including how the entity has defined “senior executive” for these purposes); or (2) if the entity is a “relevant employer” under the Workplace Gender Equality Act, the entity’s most recent “Gender Equality Indicators”, as defined in and published under that Act.	… the fact that we have a diversity policy that complies with paragraph (a): ☒in our Corporate Governance Statement OR ☐at [insert location] … and a copy of our diversity policy or a summary of it: ☒at https://simondsgroup.com.au/corporateGovernance … and the measurable objectives for achieving gender diversity set by the board or a relevant committee of the board in accordance with our diversity policy and our progress towards achieving them: ☐in our Corporate Governance StatementOR ☒at https://simondsgroup.com.au/ … and the information referred to in paragraphs (c)(1) or (2): ☐in our Corporate Governance Statement OR ☒at https://simondsgroup.com.au/	☐ an explanation why that is so in our Corporate Governance Statement OR ☐ we are an externally managed entity and this recommendation is therefore not applicable
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.	… the evaluation process referred to in paragraph (a): ☒in our Corporate Governance Statement OR ☐at [insert location] … and the information referred to in paragraph (b): ☒in our Corporate Governance Statement OR ☐at [insert location]	☐ an explanation why that is so in our Corporate Governance Statement OR ☐ we are an externally managed entity and this recommendation is therefore not applicable
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.	… the evaluation process referred to in paragraph (a): ☒in our Corporate Governance Statement OR ☐at [insert location] … and the information referred to in paragraph (b): ☒in our Corporate Governance Statement OR ☐at [insert location]	☐ an explanation why that is so in our Corporate Governance Statement OR ☐ we are an externally managed entity and this recommendation is therefore not applicable

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Corporate Governance Council recommendation	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 2 - STRUCTURE THE BOARD TO ADD VALUE
2.1	The board of a listed entity should: (a) have a nomination committee which: (1) has at least three members, a majority of whom are independent directors; and (2) is chaired by an independent director, and disclose: (3) the charter of the committee; (4) the members of the committee; and (5) as at the end of each reporting period, the number of times the committee met throughout the period and the individual attendances of the members at those meetings; or (b) if it does not have a nomination committee, disclose that fact and the processes it employs to address board succession issues and to ensure that the board has the appropriate balance of skills, knowledge, experience, independence and diversity to enable it to discharge its duties and responsibilities effectively.	[If the entity complies with paragraph (a):] … the fact that we have a nomination committee that complies with paragraphs (1) and (2): ☒in our Corporate Governance StatementOR ☐at [insert location] … and a copy of the charter of the committee: ☒at https://simondsgroup.com.au/corporateGovernance … and the information referred to in paragraphs (4) and (5): ☐in our Corporate Governance StatementOR ☒at http://simondsgroup.com.au/annualreport [If the entity complies with paragraph (b):] … the fact that we do not have a nomination committee and the processes we employ to address board succession issues and to ensure that the board has the appropriate balance of skills, knowledge, experience, independence and diversity to enable it to discharge its duties and responsibilities effectively: ☐in our Corporate Governance StatementOR ☐at [insert location]	☐ an explanation why that is so in our Corporate Governance Statement OR ☐ we are an externally managed entity and this recommendation is therefore not applicable
2.2	A listed entity should have and disclose a board skills matrix setting out the mix of skills and diversity that the board currently has or is looking to achieve in its membership.	… our board skills matrix: ☐in our Corporate Governance StatementOR ☐at http://simondsgroup.com.au/annualreport	☐ an explanation why that is so in our Corporate Governance Statement OR ☐ we are an externally managed entity and this recommendation is therefore not applicable

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Corporate Governance Council recommendation	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
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 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.	… the names of the directors considered by the board to be independent directors: ☒in our Corporate Governance Statement OR ☐at [insert location] … and, where applicable, the information referred to in paragraph (b): ☒in our Corporate Governance Statement OR ☐at [insert location] … and the length of service of each director: ☒in our Corporate Governance StatementOR ☐at [insert location]	☐ an explanation why that is so in our Corporate Governance Statement
2.4	A majority of the board of a listed entity should be independent directors.	… 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 OR ☐ 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 director and, in particular, should not be the same person as the CEO of the entity.	… 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 OR ☐ 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 and provide appropriate professional development opportunities for directors to develop and maintain the skills and knowledge needed to perform their role as directors 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 OR ☐ 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: (a) have a code of conduct for its directors, senior executives and employees; and (b) disclose that code or a summary of it.	… our code of conduct or a summary of it: ☐in our Corporate Governance Statement OR ☒at https://simondsgroup.com.au/corporateGovernance	☐an explanation why that is so in our Corporate Governance Statement

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Corporate Governance Council recommendation	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 https://simondsgroup.com.au/corporateGovernance … and the information referred to in paragraphs (4) and (5): ☐in our Corporate Governance Statement OR ☒at http://simondsgroup.com.au/annualreport [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 http://simondsgroup.com.au/annualreport	☐ an explanation why that is so in our Corporate Governance Statement

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Corporate Governance Council recommendation	Corporate Governance Council recommendation	We have followed the recommendation in full for the whole of the period above. We have disclosed …	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
4.3	A listed entity that has an AGM should ensure that its external auditor attends its AGM and is available to answer questions from security holders relevant to the audit.	… 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 OR ☐ 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: (a) have a written policy for complying with its continuous disclosure obligations under the Listing Rules; and (b) disclose that policy or a summary of it.	… our continuous disclosure compliance policy or a summary of it: ☐in our Corporate Governance Statement OR ☒at https://simondsgroup.com.au/corporateGovernance		☐ an explanation why that is so in our Corporate Governance Statement
PRINCIPLE 6 – RESPECT THE RIGHTS OF SECURITY HOLDERS
6.1	A listed entity should provide information about itself and its governance to investors via its website.	… information about us and our governance on our website: ☒at https://simondsgroup.com.au/index.php		☐ an explanation why that is so in our Corporate Governance Statement
6.2	A listed entity should design and implement an investor relations program to facilitate effective two-way communication with investors.	… the fact that we follow this recommendation: ☐in our Corporate Governance Statement OR ☒at https://simondsgroup.com.au/corporateGovernance		☐ an explanation why that is so in our Corporate Governance Statement
6.3	A listed entity should disclose the policies and processes it has in place to facilitate and encourage participation at meetings of security holders.	… our policies and processes for facilitating and encouraging participation at meetings of security holders: ☐in our Corporate Governance Statement OR ☒at https://simondsgroup.com.au/corporateGovernance		☐ an explanation why that is so in our Corporate Governance Statement OR ☐ we are an externally managed entity that does not hold 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 communications from, and send communications to, the entity and its security registry electronically.	… 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	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 https://simondsgroup.com.au/corporateGovernance … and the information referred to in paragraphs (4) and (5): ☐in our Corporate Governance Statement OR ☒at http://simondsgroup.com.au/annualreport [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 StatementOR ☐at [insert location]	☐ an explanation why that is so in our Corporate Governance Statement

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Corporate Governance Council recommendation	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
7.3	A listed entity should disclose: (a) if it has an internal audit function, how the function is structured and what role it performs; or (b) if it does not have an internal audit function, that fact and the processes it employs for evaluating and continually improving the effectiveness of its risk management and internal control processes.	[If the entity complies with paragraph (a):] … how our internal audit function is structured and what role it performs: ☐in our Corporate Governance Statement OR ☐at [insert location] [If the entity complies with paragraph (b):] … the fact that we do not have an internal audit function and the processes we employ for evaluating and continually improving the effectiveness of our risk management and internal control processes: ☒in our Corporate Governance Statement OR ☐at [insert location]	☐ an explanation why that is so in our Corporate Governance Statement
7.4	A listed entity should disclose whether it has any material exposure to economic, environmental and social sustainability risks and, if it does, how it manages or intends to manage those risks.	… whether we have any material exposure to economic, environmental and social sustainability risks and, if we do, how we manage or intend to manage those risks: ☒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	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 8 – REMUNERATE FAIRLY AND RESPONSIBLY
8.1	The board of a listed entity should: (a) have a remuneration committee which: (1) has at least three members, a majority of whom are independent directors; and (2) is chaired by an independent director, and disclose: (3) the charter of the committee; (4) the members of the committee; and (5) as at the end of each reporting period, the number of times the committee met throughout the period and the individual attendances of the members 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.	[If the entity complies with paragraph (a):] … the fact that we have a remuneration 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 https://simondsgroup.com.au/corporateGovernance … and the information referred to in paragraphs (4) and (5): ☐in our Corporate Governance Statement OR ☒at http://simondsgroup.com.au/annualreport [If the entity complies with paragraph (b):] … the fact that we do not have a remuneration committee and the processes we employ for setting the level and composition of 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]	☐ an explanation why that is so in our Corporate Governance Statement OR ☐ we are an externally managed entity and this recommendation is therefore not applicable
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.	… separately our remuneration policies and practices regarding the remuneration of non-executive directors and the remuneration of executive directors and other senior executives: ☐in our Corporate Governance Statement OR ☒at http://simondsgroup.com.au/annualreport	☐ an explanation why that is so in our Corporate Governance Statement OR ☐ we are an externally managed entity and this recommendation is therefore not applicable
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) disclose that policy or a summary of it.	… our policy on this issue or a summary of it: ☐in our Corporate Governance StatementOR ☐at https://simondsgroup.com.au/corporateGovernance	☐ an explanation why that is so in our Corporate Governance Statement OR ☐ w e do not have an equity-based remuneration scheme and this recommendation is therefore not applicableOR ☐ we are an externally managed entity and this recommendation is therefore not applicable

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Corporate Governance Council recommendation	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 StatementOR ☐at [insert location]	☐ an explanation why that is so in our Corporate Governance Statement

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SIMONDS GROUP LIMITED

Corporate Governance

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Principle 1 – Lay solid foundations for management and oversight

Principle 1.1 – Roles and Responsibilities of the Board

The Board has adopted a written Charter to provide a framework for the effective operation of the Board. The Charter outlines the Board composition, its role and responsibilities, relationship with management and delegation of authority to Board committees and management. The Charter may be viewed in full at simondsgroup.com.au under the heading ‘About us’.

The Board Charter outlines:

• › The roles of the Board, the Chairperson, the Chief Executive Officer (CEO) and the Company Secretary.

• › The guidelines for Board composition, including the processes around Director appointments and Board nominations.

• › The general and specific responsibilities of the Board.

• › Responsibility for the day to day management and administration of the company is delegated by the Board to the CEO. The CEO is responsible for the management team and employees of the company.

Principle 1.2 – Perform appropriate checks on Directors before appointment and provide all relevant information for election of Directors

The Board Charter outlines the guidance for appointment of directors. Prior to appointing a director or putting forward a candidate for election as a director, the Board must:

• › Undertake appropriate checks; and

• › Provide shareholders with all material information in the Board’s possession relevant to a decision on whether or not to elect or re-elect a director.

Principle 1.3 – Written contracts of appointment

As outlined in the Board Charter, the company must have a written agreement with each director and senior executive which outlines the terms of appointment. Each director and senior executive has been appointed by way of formal written agreement setting out the terms of their appointment, including role, responsibilities and remuneration.

Principle 1.4 – Company Secretary

As stated in the Board Charter, each director is able to communicate directly with the Company Secretary and vice versa. The Company Secretary is accountable directly to the Board, through the Chairman, on all matters to do with the proper functioning of the Board.

Principle 1.5 - Diversity

The Company recognises that a diverse and talented workforce is a competitive advantage and that the Company’s success is the result of the quality and skills of its people. The Company has established and implemented a Diversity Policy which is overseen by the Board and may be viewed in full at simondsgroup.com.au. The Board is responsible for developing measurable objectives for achieving gender diversity.

Formal measureable objectives for diversity were approved by the Board in September 2015. A summary of these objectives can be found at simondsgroup.com.au. As at the balance sheet date the percentage of women at each of the following levels within Simonds Group Limited was:

Level	As at 30 June 2015
Board (including Managing Director and CEO)	17%
Key Management Personnel(1)	10%
All employees	49%

(1) Key Management Personnel includes Board of Directors.

Principle 1.6 – Board performance evaluation

Due to the current size of the Company and its level of activity, the Board is responsible for the evaluation of its performance and the performance of individual directors. This review is conducted on an annual basis and if deemed necessary this internal review will be facilitated by an independent third party. An internal review was conducted during September and October 2015. The Board has concluded that a skills deficiency exists at Board level with reference to registered training organisation experience. The Board will endeavour to address this skills gap by appointing an independent Non-Executive Director with the required skills, whilst also addressing complementary diversity targets.

Principle 1.7 – Management reviews

As outlined in the Board Charter, the CEO is responsible for the performance evaluation of senior executives. The Nomination and Remuneration Committee is responsible for reviewing the performance targets for senior management. A copy of the Nomination and Remuneration Committee is available at simondsgroup.com.au.

SIMONDS GROUP CORPORATE GOVERNANCE

SIMONDS GROUP LIMITED

Corporate Governance

Principle 2 – Structure the Board to add value

Principle 2.1 – Nomination committee

The Board has adopted a written Charter to assist it in fulfilling its duties that would usually be the responsibility of a nomination and remuneration committee. The Charter outlines the role and objectives, the membership and structure and responsibilities and functions of the committee. The Charter may be viewed in full at simondsgroup.com.au under the heading ‘About us’.

Membership of the Nomination and Remuneration Committee currently comprises:

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Name Independence
Susan Oliver Independent
Chairman and Non-Executive Director
Matthew Chun Independent
Non-Executive Director
Leon Gorr Independent
Non-Executive Director
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The Nomination and Remuneration Committee met four times during the year ended 30 June 2015.

Principle 2.2 – Board skills

The experience and expertise relevant to the position of Director held by each Director in office at the date of the annual report is included in the Directors’ Report. See also Principle 1.6.

Principle 2.4 and 2.5 – Director independence

Principle 2.4 and 2.5 of the ASX Corporate Governance Principles and Recommendations recommends that the Board comprise a majority of directors who are independent, and an independent Chairperson. The Board, as currently composed, complies with Principle 2.4.

With regards to Principle 2.5, it should be noted that Vallence Gary Simonds established the Company in 1949 and remains a substantial shareholder of the Simonds Group. Vallence Gary Simonds’ in-depth industry experience, gained over a career spanning more than 65 years in the Australian building industry is considered to be complimentary to the skillset of the current Board. He is currently the Chairman of the Board and has been a Director of Simonds Group Limited (previously Simonds Homes Holdings Pty Ltd) since May 2010.

Paul McMahon is a substantial shareholder of the Company. He is currently Managing Director and Chief Operating Officer of the company. Paul McMahon has been employed by Simonds Group Limited for over 7 years (3 years as Group General Manager and 4 years as CEO).

Principle 2.6 – Director development

The Nominations and Remuneration Committee are responsible for designing induction and ongoing training and education programs for the Board to ensure the Directors develop and maintain the skills and knowledge needed to perform their role as directors effectively.

Principle 3 – Act ethically and responsibly

Principle 2.3 – Board structure and term in office

The term in office held by each director as at 30 June 2015 and independence status is as follows:

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Name Independence Term
Vallence Gary Simonds Non-Independent 5 years,
Chairman, 1 month
Non-Executive Director
Paul McMahon Non-Independent 7 months
Managing Director
and CEO
Matthew Chun Independent 7 months
Non-Executive Director
Richard Colless Independent 7 months
Non-Executive Director
Leon Gorr Independent 7 months
Non-Executive Director
Susan Oliver Independent 7 months
Non-Executive Director
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Principle 3.1 – Code of conduct

The Company has adopted a written Code of Conduct which applies to all staff members of the Company, including directors, executives and employees. The objective of this Code is to ensure that all staff at the Company observe the highest standards of ethics, integrity and behaviour. The Code may be viewed in full at simondsgroup.com.au under the heading ‘About us’.

The Code also encourages staff to report in good faith suspected unlawful / unethical behaviour.

Simonds Group Limited has in place a policy concerning trading in company securities. The Share Trading Policy includes detailed requirements for directors, officers and key management personnel regarding when they can trade Simonds Group Limited securities.

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SIMONDS GROUP CORPORATE GOVERNANCE

SIMONDS GROUP LIMITED

Corporate Governance

Principle 4 – Safeguard integrity in corporate reporting

Principle 4.1 – Audit and Risk Management Committee

The Board has adopted a written Charter to assist it in fulfilling its duties that would usually be the responsibility of an Audit and Risk Management Committee. The Charter outlines the role and objectives, membership and structure and responsibilities and functions of the committee. The Charter may be viewed in full at simondsgroup.com.au under the heading ‘About us’.

Membership of the Audit and Risk Management Committee currently comprises:

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Name Independence
Matthew Chun Independent
Chairman and
Non-Executive Director
Leon Gorr Independent
Non-Executive Director
Susan Oliver Independent
Non-Executive Director
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The Audit and Risk Management Committee met four times during the year ended 30 June 2015.

Principle 5 – Make Timely and Balanced Disclosure

Principle 5.1 – Disclosure policy

The Company has established a Continuous Disclosure & Communications Strategy Policy which establishes policies and procedures designed to ensure compliance with its continuous disclosure requirements under the Listing Rules and the Corporations Act 2001 (Cth).

The Policy sets out the standards, protocols and the detailed requirements expected of all directors, offices, senior management and employees of the Company for ensuring the Company immediately discloses all price-sensitive information in compliance with the Listing rules and Corporations Act relating to continuous disclosure.

The Policy may be viewed in full at simondsgroup.com.au under the heading ‘About us’.

Principle 6 – Respect the rights of security holders

Principle 6.1 – Information on website

The Company has a website, simondsgroup.com.au, within which there is a ‘Corporate Governance’ section where all relevant corporate governance information can be accessed.

Principle 4.2 – CEO and CFO assurance

In accordance with Principle 4.2, the Board received assurance from the Chief Executive Officer and the Chief Financial Officer 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.

Principle 4.3 – External auditor available at annual general meeting (AGM)

The Company’s external auditor attends each AGM and is available to attend to answer shareholder questions about the audit.

Principle 6.2 – Investor relations program

The Company has adopted a Continuous Disclosure & Communications Strategy Policy governing its approach to communicating with its shareholders, market participants and other stakeholders.

This policy specifically includes:

• › The approach to briefing media, investors and analysts.

• › The approach to communicating with shareholders about the Company’s financial performance and business strategy via shareholder meetings.

Simonds Group Limited provides its annual report to all requesting shareholders. The annual report contains relevant information about the Company’s operations during the year, changes in the state of affairs and other disclosures required by the Corporations Act. The half year report contains summarised financial information and a review of Simonds Group operations during the period. The Simonds Group Limited corporate website provides all shareholders and the public access to our announcements to the ASX, and general information about Simonds Group Limited and our business.

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SIMONDS GROUP CORPORATE GOVERNANCE

SIMONDS GROUP LIMITED

Corporate Governance

Principle 6.3 – Facilitating participation at meetings of security holders

The Company views the AGM as an important forum for two-way communication between the Company and its shareholders. The AGM is an opportunity for shareholders to hear from and put questions to the Board, management and the external auditor. Shareholders who are unable to attend the AGM to exercise their right to ask questions about, or make comments on, the management of the Company, are encouraged to provide questions or comments ahead of the AGM. Such questions or comments can be received at company.secretary@simonds.com.au prior to 5pm 15 October 2015, and will where appropriate, be answered or responded to at the AGM, either verbally or in writing.

Principle 6.4 – Facilitating electronic communications

The Company provides (and encourages) shareholders with the option to receive communications from, and send communications to, the Company and the Share Registry electronically, for reasons of speed, convenience, cost and environmental considerations.

Annual reports are provided electronically via the Company’s website, under the ‘ASX Announcements’ section, unless a Shareholder elects to receive a printed copy. (simondsgroup. com.au/announcements)

Announcements made by the Company to the ASX are made available on the Company’s website, under the ASX Announcements section and on the ASX website.

Shareholders are able to access information relevant to their holding via the Share Registry website boardroomlimited.com.au.

Principle 7 – Recognise and manage risk

Principle 7.1 – Risk management framework

The Company views effective risk management as a key component to achieving and maintaining its operational and strategic objectives. The identification and management of Simonds Group’s risks are an important priority of the Board.

The Company’s risk management is assessed and managed by the Risk Management and Audit Committee and governed by the Risk Management and Audit Committee Charter, which may be viewed at the simondsgroup.com.au. Simonds Group Limited has in place a Risk Management Framework whereby management is responsible for active identification of risks and implementation of mitigation measures, and may be required to report as to its adherence to policies and guidelines approved by the Board for the management of risks.

Management reports regularly on risk management to the Board and the Risk Management and Audit Committee, identifying the Group’s material risks and the extent to which the Company’s ongoing risk management program effectively identifies, manages, tests and addresses risk management issues.

The Company’s Risk Management Framework encompasses all facets of the business, including the following key risk categories: Governance, Financial, Operational, Compliance and Strategic.

Principle 7.2 – Annual risk review

Simonds Group Limited regularly reviews its Risk Management Framework to ensure it complies with all obligations. A formal review of the Risk Management Framework and Policy is completed annually.

Principle 7.3 – Internal audit

The Company does not have a separate internal audit function. One of the responsibilities of the Audit and Risk Management Committee is to evaluate compliance with the Company’s risk management and internal control processes.

The Board has received written assurances from management as to the effectiveness of the Company’s management of its material business risks and internal controls. The Chief Executive Officer and Chief Financial Officer have provided written assurance 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 the financial reporting risks.

Principle 7.4 – Sustainability risks

As part of the Risk Management Framework, the Company has identified the key risk categories which include Governance, Financial, Operational, Compliance and Strategic. Material business risks are then identified within each category. A number of economic, environmental and social sustainability risks have been identified as part of the risk assessment process and are managed in line with the Risk Management Policy.

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SIMONDS GROUP CORPORATE GOVERNANCE

SIMONDS GROUP LIMITED

Corporate Governance

Principle 8 – Remunerate fairly and responsibly

Principle 8.1 – Remuneration committee

Please refer to Principle 2.1 for details of the Nomination and Remuneration Committee.

Principle 8.2 – Remuneration policy

Details of the Company’s remuneration policies and practices are included in the ‘Remuneration Report’ within this Annual Report.

Details of compensation for Non-Executive Directors, Executive Directors and other senior executives are also separately disclosed within the ‘Remuneration Report’.

Principle 8.3 – Policy on hedging equity incentive schemes

The Board has also adopted a Share Trading Policy. This Policy sets out the clearance requirements for Directors and Employees when dealing in the Company’s securities. The Policy also states that the insider trading prohibition does not apply to acquisitions of shares or options by employees made under employee share or option schemes, nor does it apply to the acquisition of shares as a result of the exercise of options under an employee option scheme. However, the prohibition does apply to the sale of shares acquired under an employee share scheme and also to the sale of shares acquired following the exercise of an option granted under an employee option scheme.

A copy of the Share Trading Policy is available on the Company’s website at simondsgroup.com.au

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SIMONDS GROUP CORPORATE GOVERNANCE