Viridis Investment Management Limited, (the “Company”) the responsible entity for Viridis Clean Energy (“the Group”) (comprising Viridis Clean Energy Trust 1 ARSN 115 340 442 (“Trust I”) and Viridis Clean Energy Trust II ARSN 115 340 639 (“Trust II”), together “the Group”, is committed to high standards of corporate governance.
The principles and practices adopted by the Company’s directors with respect to corporate governance are summarised in this statement. The directors will review and refine these principles and practices, taking into account regulatory requirements, market practices and stakeholder expectations.
The Board currently consists of four directors, of whom two are independent of the Company.
One of the independent directors acts as Chairman. The independent Chairman carries a casting vote in the event of voting deadlocks.
The Board regularly monitors the ongoing independence of the two independent directors, who must provide all relevant information to the Board.
All directors bring an independent judgment to bear in decision-making.
Director appointments are based on an assessment of the nominee’s skills and capabilities and so as to achieve an appropriate range of skills, experience and expertise across the Board.
Role of the Chairman
The Chairman is responsible for:
leadership of the Board;
organisation and conduct of the Board’s activities; and
setting of the Board agenda.
Board Committees
The Board has established an Audit and Compliance Committee, which currently consists of three Board members. The majority of the Committee members are independent within the meaning of independence set out in the ASX Corporate Governance Principles and Best Practice Recommendations. All Committee members are non-executive directors. The Chairman of the Committee is independent and the Chairman of the Board is not eligible to chair the Audit and Compliance Committee.
The Audit and Compliance Committee is governed by a charter, which sets out the duties and responsibilities of the Committee. These functions include the review of financial and risk management matters for the Group as well as monitoring the Group’s compliance arrangements. The Committee reports quarterly to the Board on these matters.
The Board has not established any committees other than the Audit and Compliance Committee. It is the directors’ view that, given the present size of the Board, additional committees are not appropriate at this stage. The Board will, however, continue to monitor the position and may establish additional committees, as appropriate.
The Board requires that the highest standards of ethics and integrity be observed in the conduct of the Company’s business. The Board has adopted a code of conduct consistent with the ASX Corporate Governance Council’s Principles of Good Corporate Governance and Best Practice Recommendations, as applicable.
The Board has adopted specific policies relating to the management of conflicts of interest and securities trading.
The Board has implemented processes to ensure that presentation of the Group’s financial position and financial performance is accurate, complete and in accordance with accounting standards.
An Audit and Compliance Committee has been established (refer Section 2 above), which has specific responsibility, amongst other things, for the review of financial matters.
In addition, the Managing Director and the Chief Financial Officer are required to state in writing to the Board that the Group’s financial reports present a true and fair view, in all material respects, of the Group’s financial position and financial performance and are in accordance with relevant accounting standards. This statement must be given on each occasion that the Group’s financial results are released by the Company.
In accordance with the ASX Listing Rule disclosure requirements, the Board seeks to keep the market fully informed at all times regarding any information, positive or negative, which may have a material impact on the price of the Group’s securities.
The Managing Director has primary responsibility for bringing to the attention of the Board any matters that may require disclosure to the market.
However, any director or any senior executive of the Manager should raise a disclosure matter with the Board. The Directors consider each such matter promptly, decide whether disclosure is necessary (and, where necessary, seek advice from the Group’s legal advisers) and instruct the content of any disclosure.
All material disclosures to the market are published on the Company’s web site. All written presentations and information, whether provided in a public forum or in private briefings, are published on the Company’s web site.
making information regarding the Group readily accessible; and
facilitating participation by security holders in annual general meetings.
Effective communication is achieved through market disclosure (as discussed in Section 5 above), direct reporting to securityholders (half year report and the annual report) and prompt response to direct queries by securityholders.
The Company’s web site is also used to make relevant information readily and promptly accessible to securityholders. The web site is under continuous development to improve its content and clarity of presentation.
Any general meetings are held in an accessible location and all reasonable efforts are made to ensure that attendance is convenient for securityholders.
The Board has adopted a formal risk management plan. Under the risk management plan, the Company and its risk service providers identify, assess, monitor and manage material risks relevant to the Company and the Group.
The Audit and Compliance Committee reviews the risk management plan at least annually.
The Managing Director and the Chief Financial Officer state in writing to the Board that:
the statement given in accordance with Section 4 above regarding the integrity of the Group’s financial statements is based on a sound system of risk management and internal control; and
the risk management and internal control system is operating effectively in all material respects.
This statement is given on each occasion that the Group’s financial results are released by the Company.
The Managing Director and the Chief Investment Officer also state in writing to the Board that:
investment recommendations are based on a sound system of due diligence and risk assessment; and
the due diligence and risk assessment system is operating effectively in all material respects.
This statement is given on each occasion that an investment recommendation is made to the Board.
Independent directors’ fees are paid by the Company. These fees are at a sufficient and reasonable level to fairly remunerate directors.
The Company is committed to remunerating its executives in a manner that is market competitive, consistent with best practice and supports the interests of securityholders. The Company aims to align the interests of executives with those of security holders by remunerating executives through performance and long-term incentive plans in addition to their fixed remuneration.
Executive remuneration consists of the following elements:
fixed salary;
performance bonus and long-term incentives;
other benefits including superannuation.
Executive salaries are determined from a review of the market and reflect core performance requirements and expectations, as well as the scope of the individual’s role; the individual’s level of skill and experience; the size and complexity of the Fund’s business and labour market conditions.
The purpose of the performance bonus is to reward actual achievement by the individual of performance objectives and for materially improved Company performance. Consequently, performance-based remuneration is paid where a clear contribution to successful outcomes for the Fund is demonstrated during a performance cycle.
The Company has implemented a long-term incentive plan for key executives. Details of the plan were released to the market on 17 December 2009.
Executives are entitled to statutory superannuation and, subject to the terms of their engagement, may be entitled to car allowances, mobile phone and travel expenses. All reasonable out of pocket expenses incurred in connection with the performance of duties on behalf of the Company are reimbursed.
The Board recognises that it has obligations and responsibilities to a broad group of stakeholders which extends beyond the Group’s securityholders. These “stakeholders” are employees, customers, counterparties, suppliers, regulatory agencies, governments and the broader community, all of whom have legitimate interests which are considered by the Company in undertaking the Group’s business activities.
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