Corporate Governance

The Board and management of NewSat are committed to high standards of corporate governance and apply the principles of good corporate governance and best practice recommendations.

The Board of Directors of NewSat is responsible for the corporate governance of the economic entity. The Board guides and monitors the business and affairs of NewSat on behalf of the shareholders by whom they are elected and to whom they are accountable.

To ensure the Board is well equipped to discharge its responsibilities it has established guidelines for the operation of the Board.

1 Matters reserved for the Board

As the Board on behalf of the shareholders, The Board seeks to identify the expectations of the shareholders, as well as other regulatory and ethical expectations and obligations. In addition, the Board is responsible for identifying areas of significant business risk and ensuring arrangements are in place to adequately manage those risks.

The Board is responsible for ensuring that the Company’s objectives and activities are aligned with the expectations and risks identified by the Board. The Board has a number of mechanisms in place to ensure this is achieved. In addition to the committees referred to above these mechanisms include the following:

Board approval of strategic plans, which encompasses the entity’s vision statements, designed to meet stakeholders’ needs and manage business risk;
The strategic plans are dynamic documents and the board is actively involved in developing and approving initiatives and strategies designed to ensure the continued growth and success of the entity;
Implementation of operating plans and budgets by management and Board monitoring progress against budget; and
Procedures to allow Directors, in the furtherance of their duties, to seek independent professional advice at the Company’s expense.

2 Structure of the Board

NewSat makes sure it has a board of an effective composition, size and commitment to adequately discharge its responsibilities and duties.

The board facilitates the efficient discharge of the duties imposed by law on the directors and adds value in the context of the company’s specific circumstances.

The Board structured in such a way that it:

has a proper understanding of, and competence to deal with, the current and emerging issues of the business.
can effectively review and challenge the performance of management and exercise independent judgement.

The procedure for the selection and appointment of new directors to the board is as follows:

The Nomination Committee identifies the required skills, experience, and other qualities required of new directors with the assistance of an external recruitment organisation;
An external recruitment organisation maybe retained to identify potential appointees if required;
Potential appointees including those referred to it by any or all of the Directors are then interviewed by members of the Nomination and Remuneration Committee and a short list prepared;
The Board then meets to consider the potential appointees, followed by Board members having the opportunity to interview any prospective appointee;
An appointment is then made by the Board.
The appointee then stands for election, in accordance with the Company’s Constitution, at the next general meeting of the shareholders.
The shareholders are provided with enough information to enable them to make an informed decision.
Once appointed an appointment a letter is then provided by the Chairman to the new Director setting out the terms of the appointment.

The charter for the Company’s nomination committee is:

To advise the Board on Directorship appointments, with particular attention to the qualifications and expertise of proposed appointees using the Procedure for the selection and appointment of new Directors as defined below.
To review and advise the Board on the performance of the Chief Executive Officer.
To make recommendations to the Board on the appointment of the successor to the Chief Executive Officer.
To establish a process for the regular evaluation of the Board, its committees and individual Directors and to assess regularly the effectiveness of the process.
- To review and advise the Board annually on:
- Chief Executive Officer's remuneration, and
- Non Executive Directors' remuneration.
To review annually the Board's required mix of expertise and desirable competencies.
To develop and implement a process for the orientation and education of new Directors.
To review management's recommendations and advise the Board on succession plans for key senior positions within the Company.

The nomination committee’s policy for the appointment of directors is:

The Nomination Committee has developed the following set of criteria for director appointments;

The size of the Board will be limited to encourage efficient decision making.
The selection process will be formal and transparent.
When a new Director is required the current Directors, together with an executive search firm, if required, will be appointed to identify potential candidates who have the following attributes;
- are able to contribute to the ongoing effectiveness of the board
- are able to exercise sound business judgement
- are able to think strategically
- have demonstrated leadership ability
- have high levels of professional skill
- have appropriate personal skills
Nominees will provide;
- Details of Competencies and qualifications
- Details, if any, of relationship between them and the company and/or directors of the company
- Other directorships held including term of office and details of appointment.
- Particulars of other positions which involve significant time commitments
Candidates for appointment are then;
- considered by the Nomination Committee,
- recommended for decision by the Board
The committee regularly reviews the time required from a non-executive director, and whether they are meeting this.

3 Promotion of ethical and responsible decision-making

The Board of NewSat has established a code of conduct to guide the directors and all employees of the company. This code has established the practices necessary to maintain confidence in the company’s integrity and the responsibility and accountability of individuals and investigating reports of unethical practices.

The Company believes that organisations can create value by better managing natural, human, social and other forms of capital. That being the case the company applies it’s code of conduct to ensure its compliance to the legal and other obligations it has to its legitimate stakeholders:

The code of conduct covers:

Conflicts of interest
Corporate opportunities
Confidentiality
Fair dealing
Protection and proper use of the company’s assets
Compliance with laws and regulations
Encourage the reporting of unlawful/unethical behaviour

Additionally the board has established a policy concerning trading in company securities by directors, officers and employees.

This main provisions of this policy are that it:

Provides a clear identification of directors, officers, employees or group of employees who are restricted from trading (“designated officers”)
Identifies and raises awareness about the prohibitions under the law and the requirements of the policy.
Requires designated officers to provide notification to the Chairman of the company of intended trading except for dividend reinvestment and the like.
Requires subsequent confirmation of the trading that has occurred.
Identifies when trading windows or blackouts are used and details of their application.
Specifies whether there is any discretion to permit trading by designated officers in specific circumstances (e.g. financial hardship) details of such circumstances and the basis upon which discretion is applied.
Specifies whether the company prohibits designated officers from trading in financial products issued or created over the company’s securities by third parties, or trading in associated products.
Specifies whether the company prohibits designated officers from entering into transactions in associated products which operate to limit the economic risk of their security holdings in the company.

4 Safeguard integrity in financial reporting

NewSat has created a structure which independently verifies and safeguards the integrity of the company’s financial reporting. This is done through a process of review and authorisation designed to ensure the truthful and factual presentation of the company’s financial position.

This includes the review and consideration of the accounts by the Audit Committee which consists of independent non-executive directors one of whom is the audit committee chairman. These structures do not diminish the ultimate responsibility of the board to ensure the integrity of the company’s financial reporting.

To achieve best practice:

4.1 The Company has ensured the CEO and CFO state in writing to the board that the financial reports present a true and fair view, in all material respects, of the company’s financial condition and operational results are in accordance with relevant accounting standards

4.2 The audit committee has the following formal charter:

In carrying out the Audit function, the Audit Committee:
is responsible for nominating the external auditor to the Board for appointment by shareholders. The Audit Committee approves the terms of the contract with the external auditor, agrees the annual audit plan and approves payments to the external auditor.
Monitors and reviews any non audit work carried out by the external auditors.
reviews the financial statements and reports of the Group;
reviews accounting policies to ensure compliance with current laws, relevant regulations and accounting standards;
conducts any investigations relating to financial matters, records, accounts and reports which it considers appropriate; and
reviews all material matters requiring exercise of judgment by management and reports those matters to the Board.
ratifies the Group’s operational risk policies for approval by the Board and reviews and informs the Board of the measurement and management of operational risk. Operational risk is a basic line management responsibility within the Group consistent with the policies established by the Committee.
considers, in the absence of management and the external auditor, the quality of the information received by the Committee and, in considering the financial statements, discusses with management and the external auditor:
- The financial statements and their conformity with accounting standards, other mandatory reporting requirements and statutory requirements; and
- The quality of the accounting policies applied and any other significant judgments made.
discusses and receives assurances from the external auditors on the quality of the Company’s systems, its accounting processes and its financial results. It also receives a report from the Auditors on any significant matters raised by the Auditors with management.
all material accounting matters requiring exercise of judgement by management are specifically reviewed by the Audit Committee and reported on by the Committee to the Board.

NewSat has established the following procedures for the selection and appointment of the External Auditor:

Each year the Committee considers whether the external audit should be tendered.
In making this decision, the Committee considers (among other things) the performance of the auditor and the independence of the auditor. The Committee's recommendation as to whether the audit should be tendered, or whether the auditor should be reappointed, will be put to the Board for their approval.
If a tender is undertaken, all work on the tender will be undertaken by the Committee. Any subsequent recommendation for the appointment of an external auditor will be put to the Board and then if a change is approved it will be put forward to shareholders for their approval.
The company ensures no director past or present has any association with the Company’s external auditors.

5 Make timely and balanced disclosure

NewSat promotes timely and balanced disclosure of all material matters concerning the company. A mechanism is in place to ensure compliance with the ASX listing rules such that:

All investors have equal and timely access to information concerning the company including its financial position, performance, ownership and governance.
Company announcements are factual and presented in a clear and balanced way i.e. disclosure of both negative and positive information.

To achieve best practice the company ensures that all announcements are timely, factual, do not omit material information and are expressed in a clear and objective manner

6 Respect the rights of shareholders

NewSat respects the rights of shareholders and endeavours to facilitate the effective exercise of those rights and the company empowers its shareholders by communicating with them through:

the annual report which is distributed to shareholders and available on the website
the annual general meeting and other meetings so called to obtain approval for Board action as appropriate
this Website which will:
- Provide ready access to balanced and understandable information about the company and corporate proposals.
- Provide information for up to two years of press releases and announcements and financial data.
- Provide details of ASX announcements.
- Provide the company statement on Corporate Governance

Additionally the Company will improve shareholders access to meetings and request the External Auditor to be present at Annual General Meeting and be available to answer shareholder questions about the conduct of the audit and the preparation and content of the auditor’s report.

7 Recognise and manage risk.

NewSat has established a system of risk oversight and management and internal control. The system has been designed to identify, assess, monitor and manage risk.

This structure enhances the environment for identifying and capitalising on opportunities to create value.

The audit committee manages this process through a risk management structure, headed by the CFO, which answers directly to it.

The CEO and the CFO confirm annually to the board in writing that:

best practice recommendations are founded on a sound system of risk management and internal compliance and control which implements the policies adopted by the board.
the company’s risk management and internal compliance and control system is operating efficiently and effectively in all material respects.

All policies are agreed, by the board, that describe the roles and respective accountabilities of the board, audit committee, CFO, Risk Manager, Senior Management and any internal audit and risk management) functions.

These policies include oversight, awareness, risk profile, risk management, compliance and control and assessment of effectiveness as defined below:

1. Oversight of the risk management: The board has overseen the establishment and implementation of a risk management system and will review at least six monthly the effectiveness of this system
2. Develop an awareness of the principles of risk management. NewSat has developed and implemented an infrastructure to ensure that management of risk becomes an integral part of the planning and management processes and general culture of the Company.
3. Risk Profile: A description of the material risks facing the company have been identified, drafted and agreed. These risks include financial and non financial matters. The board has also ensured that the risk profile is regularly reviewed and updated.
4. Risk management and compliance & control: Management has established and implemented a system for analysing, evaluating, treating and managing material risk throughout the company. This system includes the company’s internal compliance and control systems
5. Assessment of effectiveness: The Company has designed a means of analysing the effectiveness of its risk management and internal compliance and control systems and of the effectiveness of their implementation. This is done by the CFO who supervises a management and internal audit review process which then answers to the Audit Committee.

8 Remunerate fairly and responsibly.

The Company has adopted remuneration policies that attract and maintain talented and motivated directors and employees so as to encourage enhanced performance of the company. There is a clear relationship between performance and remuneration, and that the policy underlying executive remuneration.

The Board has established a remuneration committee whose charter is:

To review and make recommendations to the board on
Executive remuneration and incentive policies including share and share option plans
The remuneration packages of senior management.
The company’s recruitment, retention and termination policies and procedures for senior management.
Incentive schemes
Superannuation arrangements and other retirement schemes.