The Directors are responsible to the shareholders for the performance of the Company in both the short and the longer term and seek to balance these sometime competing objectives in the best interests of the Company as a whole. Their principal focus is to enhance the interests of shareholders and to ensure that the Company, including its controlled entities, is properly managed.  The Board draws on relevant best practice principles, particularly those issued by the ASX Corporate Governance Council. At its August 2006, May 2007 and August 2007 meetings the Board examined the Company’s corporate governance practices compared to the best practice principles proposed by the ASX Corporate Governance Council. While the Company will align itself with the principles proposed by ASX, it is mindful that there may be some instances where compliance is not practicable for a company of Intec’s current small size. The Corporate Governance Committee, made up of Messrs Severs, Wood and Ross, met in May 2007 and August 2007 to review and amend this statement.

For a number of years the Company, the Board and senior management, have taken a pro-active role to corporate governance matters. In many areas the Company has adopted corporate governance measures which are more comprehensive than those required by statutory legislation.

The Australian Securities Exchange Corporate Governance Council’s publication ‘Principles of Good Corporate Governance and Best Practice Recommendations’ is for guidance purposes and all listed companies are required to disclose the extent to which they have followed the recommendations and to identify any recommendations they have chosen not to follow giving reasons for not doing so. The Company’s Board of Directors has reviewed the recommendations. In many cases the Company was already achieving the standard required. In other cases the Company will have to consider new arrangements to enable compliance. In a limited number of instances, the Company may determine not to meet the standard set out in the recommendations, largely due to the recommendation being considered by the Board to be unduly onerous for a company of this size. 

A set of Revised Principles were issued by ASX in August 2007. Intec will be reviewing these in the 2007-08 year with a view to reporting against the eight revised principles in the following year.

The following paragraphs set out the Company’s position relative to each of the 10 principles contained in the ASX Corporate Governance Council’s report.

Principle 1: Lay solid foundations for management and oversight

The Company has not yet formalised and disclosed the functions reserved to the Board and those delegated to management. However, the Company has a relatively small Board (four Non-executive Directors plus the Managing Director and Chief Executive Officer, the Finance Director and the Technical Director) and a small management team, so roles and functions have to be flexible to meet specific requirements.

Principle 2: Structure the Board to add value

The Company complies with most of the recommendations within this area as the Chairman is independent; and is separate from the Managing Director and Chief Executive Officer. The Company this year complies with the recommendation that a majority of Directors should be independent.  The Company does not have a seperate Board Nomination Committee, but this task is carried out by the Remuneration and Board Nomination Committee.

Four of the Company’s four Directors are Non-executives, and none have undertaken ‘material’ consultancy work for the Company within the past three years. 

Minor consultancy work has been undertaken on normal commercial terms by Mr Severs and Mr Bell and payments are disclosed within the Quarterly Reports and the Directors’ Reports. The use of a non-executive Director for consultancy work reflects their expertise and knowledge. In absence of this Directors, the Company would have to use ‘external’ consultants, which may result in increased costs.

Mr Severs has been a Director of the Company since 26 March 2001 and was a Director of Intec Copper Pty Ltd from 1995 to December 1998, a period of time, which in the words of the ASX document, ‘could be perceived to materially interfere with his ability to act in the best interests of the Company’. Mr Severs acts in a part-time capacity as the Company’s marketing representative for Europe. The Board does not believe that the consultancy work undertaken by Mr Severs, nor Mr Severs’ period of tenure as a Director, compromise his independence. 

Each Director of the Company has the right to seek independent professional advice at the expense of the Company.  Prior approval of the Chairman is required, but this will not be unreasonably withheld.

Principle 3: Promote ethical and responsible decision-making

The Company has a policy concerning trading in its securities by Directors, management, staff and significant consultants which is set out in the Annual Report.

The Company has adopted a formal code of conduct, one which reflects the Company’s size and the close interaction of individuals throughout the organisation.

Principle 4: Safeguard integrity in financial reporting

The Company regularly reviews its procedures to ensure compliance with the recommendations set out under this principle.

Senior management confirms that the financial reports represent a true and fair view and are in accordance with relevant accounting standards. The Managing Director and Chief Executive Officer and the Chief Financial Officer and Finance Director state in writing to the Board that the Company’s financial reports are complete and present a true and fair view, in all material respects, of the financial condition and operational results of the Company and its controlled entities and are in accordance with relevant accounting standards.

The Company has an Audit Committee with a formal charter, which has been approved by the Board.  The Audit Committee consists of the three non-executive Directors Messrs Ross (Chairman), Bell and Severs.

The Company’s auditor, PricewaterhouseCoopers (PwC) was appointed in 1999. PwC’s policy is to rotate the engagement partner every five years.

Principle 5: Make timely and balanced disclosure

The Company, its Directors and staff are acutely aware of the ASX’s continuous disclosure requirements and operate in an environment where strong emphasis is placed on full and appropriate disclosure to the market. The Company has adopted formal written policies regarding disclosure and it uses strong informal systems underpinned by experienced individuals.

Principle 6: Respect the rights of shareholders

All information disclosed to the ASX is posted on the Company’s website as soon as it is disclosed to the ASX. When analysts are briefed on aspects of the Group’s operations, the material used in the presentation is released to the ASX and posted on the Company’s website. Procedures have also been established for reviewing whether any price sensitive information has been inadvertently disclosed, and if so, this information is also immediately released to the market.

Whilst the Company does not have a communications strategy to promote effective communication with shareholders, as it believes this is excessive for small companies, the Company does communicate regularly with shareholders.

For many years the Company has requested the external auditor to attend general meetings and this has been supported by the Company’s audit partners at PwC.

Principle 7: Recognise and manage risk

The Company is a relatively small company and does not believe that there is significant need for formal policies on risk oversight and management of risk.

Risk management arrangements are the responsibility of the Board of Directors and senior management collectively and this matter is a standing agenda item at Board meetings.

Principle 8: Encourage enhanced performance

The Company has established a Remuneration and Nomination Committee, to meet as and when required, to review performance matters.  There has been no formal performance evaluation of the Board during the past financial year, but it is intended that this will be carried out in the 2007-08 financial year.

The Directors work closely with management and have full access to all the Company’s files and records.

Principle 9: Remunerate fairly and responsibly

A Remuneration and Nomination Committee was set up in September 2003.  The Committee, which consists of the three non-executive directors Messrs Ross (Chairman), Severs, Bell and Jones will seek independent external advice and market comparisons as necessary.

In accordance with Corporations Act requirements, the Company discloses the fees or salaries paid to all Directors, plus the five highest paid officers.

The Company has an Employee Share Option Plan (Intec Option Plan), which was introduced in May 2000.

Principle 10: Recognise the legitimate interests of stakeholders

The Company has adopted a formal code of conduct to guide compliance with legal and other obligations.

The Board of Directors continues to review the situation to determine if its code is the most appropriate and effective operational procedures.
Functions of the Board

• review and approval of corporate strategies, the annual budget and financial and business plans;
• overseeing and monitoring organisational performance and the achievement of the Company’s strategic goals and objectives;
• monitoring financial performance, including approval of the annual and half-year financial reports and liaison with the Company’s auditor;
• appointment of, and assessment of the performance of, the Managing Director and Chief Executive Officer and the other members of the senior management team.  The Board’s Nomination and Remuneration Committee is made up of four non-executive Directors who oversee this function;
• ensuring that there are effective management processes in place and approving major corporate initiatives;
• enhancing and protecting the reputation of the Company;
• ensuring that the significant risks facing the Company and its controlled entities have been identified and appropriate and adequate control, monitoring and reporting mechanisms are in place; and
• ensuring that shareholders are appropriately informed of the progress of the Company.

Securities Trading and Trading Windows Policy

Directors, employees and key consultants may only deal in the Company’s shares during ‘window periods’ nominated for this purpose from time to time by the Managing Director and Chief Executive Officer, or failing him the Chairman. However, Directors, employees and key consultants are prohibited from buying or selling Intec shares at any time if they are aware of price sensitive information that has not been made public.

ASX Best Practice Recommendations

Click here to view the table that contains each of the ASX Best Practice Principles and Guidelines. The Company has complied with all of the principles and guidelines during the reporting period and this is indicated with a tick . In no instance, has the Company failed to comply with a particular recommendation (which would have been indicated with a cross ).