HiTec Energy Limited

Delivering production technologies for today’s world

Corporate Governance

This statement outlines the main Corporate Governance practices that have been adopted by the HiTec Board. These practices encompass the eight core principles and recommendations of the ASX Corporate Governance Council unless otherwise noted.

Board Structure

None of the board committees for nomination, audit or remuneration as recommended by the ASX Corporate Governance Council have been formed, as the directors consider their formation unhelpful, unnecessary and overly bureaucratic, given the size and nature of the company.  All significant issues, whether of an operational or corporate governance nature, are considered and decided upon by the full board.  For similar reasons, no formal code of conduct for directors, employees or contractors has been adopted.

The directors believe that this board structure is effective for the current range of duties of the board to be properly discharged.  Once the company moves into an operational phase, a different board structure may be appropriate that includes directors with appropriate operational or specialist experience. Director appointments are based on the Board as a whole considering the skills, experience and expertise they bring to the company.

Board Operation

The board is responsible for the overall governance of the company including setting strategic direction, establishing goals for management, monitoring the achievement of these goals and ensuring that management has the resources required to complete its tasks.  To these ends, the board has established a framework for the management of the company including an overall framework of internal control, risk management and ethical standards.  The managing director has the responsibility for guiding management in carrying out effectively tasks and achieving objectives. 

The board meets at a minimum on a bi-monthly basis, with a comprehensive set of board papers issued prior to the meeting for consideration and discussion.  Informal exchanges between board members, as and when issues arise, occur frequently by both telephone and email.  Direct interaction between directors and all staff or contractors is encouraged to ensure directors are fully informed. The independent directors are aware of their rights to seek independent professional advice at the Company’s expense when they deem this necessary.

Financial Compliance

Financial statements are submitted to the board six monthly for review and approval. The veracity of these financial statements is attested to in writing by the Managing Director. The external auditor attends board meetings when required to discuss any accounting and auditing issues and to address issues raised by directors. A representative of the external auditor also routinely attends the AGM, to answer shareholder questions about conduct of the audit and his report thereon. The financial compliance responsibilities of the board include:

  • ensuring that an appropriate internal control system is established and maintained;
  • ensuring that the accounting and reporting systems can provide the requisite information on an accurate and timely basis;
  • nominating the external auditor and liaising periodically with the audit partner to ensure that the annual audit and half-year review are conducted in an effective manner;
  • reviewing external audit reports to ensure that where major deficiencies or breakdowns in controls or procedures have been identified, appropriate and prompt remedial action is taken by management; and
  • monitoring compliance with the legislative or regulatory requirements of the various parties that oversee corporate existence including the Australian Securities and Investment Commission, the Australian Stock Exchange and the Australian Taxation Office.

Share Trading Policy

To ensure that ethical standards are upheld and that informed parties are prohibited from buying and selling or otherwise dealing in securities of the company whilst in possession of price sensitive information that, in accordance with the Corporations Act 2001, has not been made public or is otherwise not generally available, the company has formulated a policy for directors employees and contractors concerning dealings in company securities. This policy is as follows:

A director or employee or contractor may only purchase, transfer, or otherwise deal in securities of the company during a thirty day period commencing three days after:

  • the release of an annual report to the ASX;
  • the release of a half yearly financial report to the ASX;
  • the release of a quarterly report to the ASX;
  • the release of a prospectus; or
  • the holding of an annual general meeting.

This policy does not authorise any dealings in securities of the Company by any person whilst they may have price sensitive information in their possession, which is not generally available. Each director, employee or contractor is required to satisfy themselves that any dealings in securities of the company they undertake is not in breach of the Corporations Act 2001.

Disclosure Policy

The board is committed to timely release, by way of ASX announcements, of factual and balanced information concerning price sensitive aspects of the company’s activities to the extent that such release does not prejudice the company’s ongoing negotiations with third parties. The company website is updated when releases to the ASX are made and shareholders encouraged to communicate via phone, email, letter or website blog. In addition, an up to date version of the corporate governance statement is maintained on the company’s website.

Risk Management

Risk identification and risk amelioration strategies are considered an inalienable part of every director’s daily decision-making process and this behaviour is encouraged in every employee or contractor.  Where incidences of risk are identified, they are discussed by the board and appropriate action agreed. The Managing Director attests to the board biannually, at the time of presenting financial statements, upon the effectiveness of the company’s management of its material business risks and 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.

Remuneration Review and Performance Assessment

The Board discusses and agrees the remuneration of directors periodically and is apprised of changes in the remuneration packages of employees and contractors as they occur.  Information on executive and non-executive remuneration, as required by the Corporations Act 2001, can be found in the Remuneration Reports in each Annual Report.  Whilst the information disclosed therein indicates that the company’s present remuneration packages are in conformity with the principles espoused by the ASX Corporate Governance Council, this conformity does not necessarily indicate the directors’ agreement with those principles.

The board has not adopted a formal process for an annual self-assessment of its collective performance and the performance of individual directors. The directors believe that effective assessment should be continuous rather than annual, and informal rather than formal.

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