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The Company is a listed investment company. Its shares are traded on the Australian Stock Exchange ("ASX").

The objective of the Company is to seek long term capital growth through utilising the skills of the Investment Manager, Ausbil Dexia Limited ("Ausbil"). Other than its Directors, the Company has no employees. It has no premises, plant or equipment or other physical assets. The Company's day to day affairs and the investment of its funds are managed by Ausbil in accordance with a Management Agreement.

It is the responsibility of Directors to ensure that Ausbil is performing its duties in a skilful and diligent manner, that it employs qualified and experienced staff and that it operates appropriate risk monitoring and compliance procedures. The Company's main corporate governance practices are set out below and, unless otherwise indicated, have been implemented since the Company was admitted to the Official List of the ASX on 18 March 2005.

The Board of Emerging Leaders Investment Limited is committed to achieving the highest standard of corporate governance appropriate to a company of its size and nature. The table below summarises the Company's compliance with the Corporate Governance Principles and Recommendations of the Australian Stock Exchange Corporate Governance Council.

  Best Practice Recommendations Compliance Comment
       
1. Lay solid foundations for management and oversight
Companies should establish and disclose the respective roles and responsibilities of board and management
1.1 Companies should establish the functions reserved to the board and those delegated to senior executives and disclose those functions. Complies The Company's Corporate Governance Statement includes a Board Charter, which discloses specific responsibilities of the Board. The Board delegates responsibility for the day to day operations and administration of the Company and responsibility for the investment of the Company's assets to Ausbil Dexia Limited, through a formal outsourcing arrangement and investment management agreement respectively.
The Corporate Governance Statement is posted on the Company's website.
1.2 Companies should disclose the process for evaluating the performance of senior executives. Complies The company has no employees.
1.3 Companies should provide the information indicated in the Guide to reporting on Principle 1. Complies There are no departures from the Best Practice Recommendations 1.1, 1.2 and 1.3.
       
2.

Structure the Board to Add Value
Companies should have a board of an effective composition, size and commitment to adequately discharge its responsibilities and duties

2.1 A majority of the board should be independent directors. Complies The Board consists of four independent Non-Executive Directors (Richard Utz, Reubert Hayes, John Evans and John White) and one non-independent Non-Executive Director (Paul Xiradis).
The skills, experience, expertise and date of appointment of the Directors are stated in the Director's Report.
Each Director has the right to seek independent professional advice at the Company's expense. However, prior notice to the Board, which will review estimated costs, is required.
2.2 The chair should be an independent director. Complies The Chairman is an independent Non-Executive Director.
2.3 The roles of chair and chief executive officer should not be exercised by the same individual. Complies The company has no employees.
2.4 The board should establish a nomination committee. Does not comply Whilst a nomination committee is recommended by the ASX Corporate Governance Council Principles of Good Corporate Governance and Best Practice Recommendations, the Board has determined it is not necessary for the Company given its size and specialised nature.
The Board deals with all matters that would otherwise be dealt with by such a committee. Independent professional advice may be sought.
2.5 Companies should disclose the process for evaluating the performance of the board, its committees and individual directors. Does not comply Whilst there is a process in place for evaluating a performance of the Board, processes for evaluating the performance of Board committees and individual Directors have not yet been implemented.
2.6 Companies should provide the information indicated in the Guide to reporting on Principle 2. Complies Explanations for a departure from the Best Practice Recommendations 2.4 and 2.5 are set out in this section. The Corporate Governance Statement is posted on the Company's website.
       
3. Promote ethical and responsible decision-making
Companies should actively promote ethical and responsible decision-making
3.1

Companies should establish a code of conduct and disclose the code or a summary of the code as to:

  • the practices necessary to maintain confidence in the company's integrity; and
  • the practices necessary to take into account their legal obligations and the reasonable expectations of their stakeholders
  • the responsibility and accountability of individuals for reporting and investigating reports of unethical practices.
 Complies The Company's Corporate Governance Statement includes a Code of Conduct on Ethical Standards, which provides a guide to ethical conduct of Directors and management. The Corporate Governance Statement is posted on the Company's website.
3.2 Companies should establish a policy for trading in company securities by directors, officers and employees and disclose the policy or a summary of that policy. Complies The Company's Corporate Governance Statement includes a Code of Conduct on Securities Trading. The Corporate Governance Statement is posted on the Company's website.
3.3 Companies should provide the information indicated in Guide to reporting on Principle 3. Complies There are no departures from the Best Practice Recommendations 3.1, 3.2 and 3.3.
       
4. Safeguard integrity in financial reporting
Companies should have a structure to independently verify and safeguard the integrity of their financial reporting
4.1 The Board should establish an Audit Committee. Complies The Board has established an Audit Committee.
4.2

The Audit Committee should be structured so that it:

  • consists of only non-executive directors
  • a majority of independent directors
  • is chaired by an independent chair, who is not chairperson of the board
  • at least three members
 Complies The Audit Committee consists of 3 independent Non-Executive Directors. The members of the Audit Committee are John Evans, John White and Richard Utz.
4.3 The audit committee should have a formal charter. Complies The Audit Committee has a formal charter (policy) that is included within the Corporate Governance Statement.
The Corporate Governance Statement is posted on the Company's website.
4.4 Companies should provide the information indicated in Guide to reporting on Principle 4. Complies The number of meetings of the Audit Committee and the names of the attendees at the meetings are set out in the Director's report.
There are no departures from the Best Practice Recommendations 4.1, 4.2, 4.3 and 4.4.
       
5. Make timely and balanced disclosure
Companies should promote timely and balanced disclosure of all material matters concerning the company
5.1 Companies should establish written policies designed to ensure compliance with ASX Listing Rule disclosure requirements and to ensure accountability at a senior executive level for that compliance and disclose those policies or a summary of those policies. Complies The Board has delegated the function of continuous disclosure under the ASX's Listing Rules to the Company Secretary to assess the type of information that needs to be disclosed and to ensure that Company's announcements are made in a timely manner, are factual, do not omit material information and are in compliance with the Listing Rules. Information which is considered to be price sensitive is approved by the Board before its release. The Corporate Governance Statement is posted on the Company's website.
5.2 Companies should provide the information indicated in Guide to reporting on Principle 5. Complies There is no departure from the Best Practice Recommendations 5.1 and 5.2.
       
6. Respect the rights of shareholders
Companies should respect the rights of shareholders and facilitate the effective exercise of those rights
6.1 Companies should design a communications policy for promoting effective communication with shareholders and encouraging their participation at general meetings and disclose their policy or a summary of that policy. Complies

The Board's policy is for all investors to have equal and timely access to information concerning the financial position, performance, ownership, corporate governance and other material matters relating to the Company.
The Board's implemented practices to deliver this policy are:

  • The Company Secretary oversees the process of delivering all statutory and regulatory notices to shareholders through the Company's website and the ASX company announcements service;
  • For all other communications, the Board determines, on a matter-by-matter basis, the method of best communicating with shareholders.

In every case, the Company website and the ASX company announcements service will be updated and may be supplemented by letters posted and/or emailed to shareholders, press releases or any other medium the Board considers to be appropriate to ensure adherence to its policy of equal and timely access to information. All shareholders are notified in writing of general meetings and encouraged to attend and participate.

6.2 Companies should provide the information indicated in Guide to reporting on Principle 6. Complies There is no departure from the Best Practice Recommendations 6.1 and 6.2.
       
7.

Recognise and manage risk
Companies should establish a sound  system of risk oversight and management and internal control

7.1 Companies should establish policies for the oversight and management of material business risks and disclose a summary of those policies. Complies The Board ensures that there are adequate policies in relation to risk oversight and management and internal control systems. The Company's policies are designed to ensure operational, legal and financial risks are identified, assessed, addressed and monitored.
7.2 The board should require management to design and implement the risk management and internal control system to manage the company's material business risks and report to it on whether those risks are being managed effectively. The board should disclose that management has reported to it as to the effectiveness of the company's management of its material business risks. Complies The Company has outsourced under a formal management agreement the day-to-day functions of the Company to the Investment Manager. The Board receives regular reports from the Investment Manager attesting to the effectiveness of it's risk management and internal control systems in managing the Company's business risks, including relevant audit reports.
7.3 The board should disclose whether it has received assurance from the chief executive officer (or equivalent) and the chief financial officer (or equivalent) 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. Complies The Board requires the person acting in the role of Chief Executive Officer and Chief Financial Officer, as it relates to the Company, provide such a statement at the relevant time.
7.4 Companies should provide the information indicated in Guide to reporting on Principle 7. Complies There is no departure from the Best Practice Recommendations 7.1, 7.2, 7.3 and 7.4.
       
8. Remunerate fairly and responsibly
Companies should ensure that the level and composition of remuneration is sufficient and reasonable and that its relationship to performance is clear.
8.1 The board should establish a remuneration committee. Complies Given the present size of the Company, the Board considers that a separate Remuneration Committee is not required and has delegated the annual review of remuneration packages and policies applicable to Directors to the Audit and Risk Committee ('ARC'). The policy is for remuneration levels to be competitively set to retain and/or attract qualified and experienced Directors. The ARC, which consists of three independent Non-Executive Directors, obtains independent advice and data on the appropriateness of remuneration packages and makes recommendations to the Board.
8.2 Companies should clearly distinguish the structure of non-executive directors' remuneration from that of executive directors and other executives. Complies The Company does not employ Executive Directors or any other executives.
8.3 Provide the information indicated in Guide to reporting on Principle 8. Complies There is no departure from the Best Practice Recommendations 8.1, 8.2 and 8.3.

 

The board of directors

Board composition

  • The Board comprises of 5 Directors, a majority of whom are independent Non Executive Directors;
  • The Chairman is an independent Non Executive Director;
  • The Board undertakes an annual performance review and considers the appropriate mix of skills required to ensure its effectiveness.

Responsibilities

  • Overseeing and monitoring Ausbil's compliance with the investment management agreement;
  • Monitoring financial performance including approval of statutory financial reports and liaison with the Company's Auditors;
  • Identifying, controlling and monitoring significant risks faced by the Company including those associated with its compliance obligations and ensuring appropriate reporting mechanisms are in place.

Board members

The Board aims to ensure that:

  • Its members have an appropriate balance between those with investment management experience and those with an alternative perspective; and
  • The size of the Board is conducive to effective discussion and efficient decision making.
Director's details are set out in the Director's Report

Directors' independence

A Director is independent if he or she:

  • Is free from any interest and any business or other relationship which could, or could reasonably be perceived to, materially interfere with the Director's ability to act in the best interests of the Company.
  • Is not a substantial shareholder of the Company or an officer of, or otherwise associated directly with, a substantial shareholder of the Company.

Materiality is judged on both a quantitative and qualitative basis. Ownership of more than 5% of the issued share capital of the Company, an amount of over 5% of annual expenses of the Company or over 5% of the individual directors' net worth is considered material for these purposes. In addition, a transaction of any amount or relationship is deemed material if knowledge of it impacts the shareholders understanding of the Director's performance.

Term of office

The Company's Constitution specifies that all Directors must retire from office no later than the third Annual General Meeting ("AGM") following their last election and that one third of the Directors are to retire from office at each AGM. Where eligible, a Director may stand for re election.

Appointment and re-appointment of directors.

The selection of both new and re-election of incumbent Directors is undertaken by the Board.

Nomination qualifications for new Directors broadly require the following attributes:

  • Professional background from funds management, financial consulting or associated disciplines with a preference for applicants with sound legal, financial, corporate governance and industry compliance experience.
  • Appropriate industry qualifications such as Finsia, Australian Institute of Company Directors or similar body.
  • Free of conflicts of interest.

Selection process for incumbent Directors requires the following attributes:

  • Ability to continue to add value to the company
  • Maintenance of freedom from conflicts of interest
  • Satisfactory review of Board performance by Director peer group
  • Satisfactory ongoing industry training undertaken.

Commitment

The number of meetings held and attended by each Director is disclosed in the Directors' Report.
Non Company related commitments of the Non Executive Directors will be considered by the Board prior to each Director's appointment and will be reviewed as part of the annual performance review.

Independent professional advice

Directors may seek independent professional advice at the Company's expense, after first notifying the Board. The Board will review the estimated costs for reasonableness, but will not impede the seeking of advice.

Nomination committee

Whilst a nomination committee is recommended by the ASX Corporate Governance Council Principles of Good Corporate Governance and Best Practice Recommendations, the Board has determined it is not necessary for the Company given its size and specialised nature.

The Board deals with all matters that would otherwise be dealt with by such a committee. Independent professional advice may be sought.

Remuneration committee

Given the present size of the Company, the Board considers that a separate Remuneration Committee is not required and has delegated the annual review of remuneration packages and policies applicable to Directors to the Audit and Risk Committee ('ARC'). The policy is for remuneration levels to be competitively set to retain and/or attract qualified and experienced Directors. The ARC, which consists of three independent Non-Executive Directors, obtains independent advice and data on the appropriateness of remuneration packages and makes recommendations to the Board.

Audit and risk committee

The Audit and Risk Committee consists of three Independent Non Executive Directors, namely:
John Evans (Chairman and Independent Non Executive Director)
John White (Independent Non Executive Director)
Richard Utz (Independent Non Executive Director)

Details of Directors' qualifications and experience are set out in the Directors' Report. The Audit Committee has appropriate financial expertise.

The Audit and Risk Committee's main responsibilities to the Board include:

  • Recommending the appointment of the external auditor and the audit fee;
  • Ensuring that the external auditor is competent and independent;
  • Ensuring that the external auditor has full access to information and that no unacceptable management or other restrictions are placed on it;
  • Reviewing the draft half yearly and year end financial statements prior to recommending their adoption by the Board;
  • Monitoring the Company's compliance with its statutory obligations;
  • Reviewing and monitoring the adequacy of management information and internal control systems;
  • Ensuring that any query from shareholders relating to such matters is dealt with expeditiously.
  • Reviewing the register of risks; and
  • Reviewing monitoring the adequacy of risk management programs and making recommendations for changes to risk management processes to the Board.

The performance of the Audit and Risk Committee is reviewed annually by the Board.

External auditors

The Board appoints external auditors who demonstrate quality and independence. PricewaterhouseCoopers were appointed as the external Auditors in 2003. PricewaterhouseCoopers rotates audit partners engaged on listed companies' audits at least every five years. PricewaterhouseCoopers provide an annual declaration of their independence to the Audit and Risk Committee. The performance of the external auditor will be reviewed annually by the Audit and Risk Committee.

Risk assessment and management

The Board ensures that there are adequate policies in relation to risk oversight and management and internal control systems. The Company's policies are designed to ensure operational, legal and financial risks are identified, assessed, addressed and monitored.

Code of conduct

Directors and officers of the Company are expected to conduct themselves with the highest ethical standards act with integrity and objectivity, striving at all times to enhance the reputation and performance of the Company.

In particular, Directors and officers of the Company must at all times: manage situations where their personal interests may conflict with the interests of the Company; not take advantage of property, information or position for personal gain; not compete with the Company; not use non-public information except where disclosure is authorised or legally mandated; deal fairly with customers, suppliers, competitors and employees; protect and make proper use of the Company's assets; comply with laws and regulations, and actively promote compliance; and report any unlawful or unethical behaviour knowing that they will have proper protection by the Board when making such reports in good faith.

 

Share Trading Policy

The Board has set a policy on dealing with securities of the Company. Directors and officers of the Company, and their family members and close associates, may not buy, sell or subscribe for any securities of the Company, whether on their own account or on behalf of another person, except during a one week period following the release to the Australian Securities Exchange Limited of the monthly Report of Net Tangible Assets, the half year or full year financial results, the half year report or the annual report of the Company.

Directors and officers are subject to the Corporations Act 2001 (Cth) restrictions on applying for, acquiring and disposing of securities in, or other relevant financial products of, the Company (or procuring another person to do so), if they are in possession of inside information. Inside information is that information which is not generally available, and which if it were generally available, a reasonable person would expect it to have a material effect on the price or value of the securities in the Company. The Company expressly prohibits directors and officers from short-term trading in any Company securities and trading in the shares of any other entity if inside information on such entity comes to their attention by virtue of their position as a director or officer of the Company.



Continuous disclosure

The Company Secretary is responsible for communications with the ASX and other regulatory bodies, including ASIC. The role includes ensuring compliance with the continuous disclosure requirement in the ASX Listing Rules and overseeing and coordinating information disclosure to the ASX, shareholders, the media and the public. All such releases, including relevant external briefing and presentation materials, will be made available on the Company's website.

The Board has delegated the function of continuous disclosure under the ASX's Listing Rules to the Company Secretary to assess the type of information that needs to be disclosed and to ensure that Company's announcements are made in a timely manner, are factual, do not omit material information and are in compliance with the Listing Rules. Information which is considered to be price sensitive is approved by the Board before its release.

 

Shareholder Communication

The Board's policy is for all investors to have equal and timely access to information concerning the financial position, performance, ownership, corporate governance and other material matters relating to the Company.

The Board's implemented practices to deliver this policy are:

  • The Company Secretary oversees the process of delivering all statutory and regulatory notices to shareholders through the Company's website and the ASX company announcements service;
  • For all other communications, the Board determines, on a matter-by-matter basis, the method of best communicating with shareholders. In every case, the Company website and the ASX company announcements service will be updated and may be supplemented by letters posted and/or emailed to shareholders, press releases or any other medium the Board considers to be appropriate to ensure adherence to its policy of equal and timely access to information.