Other Corporate Governance Practices

Compliance and Continuous Disclosure

The Company is committed to maintaining the utmost standards of integrity and seeks to ensure all its activities are undertaken with efficiency, honesty and fairness. We also maintain a high level of transparency regarding our actions consistent with the need to maintain commercial-in-confidence material confidential, and where appropriate, to protect our shareholders interests.

As a listed entity, the Company has an obligation under the ASX Listing Rules to maintain an informed market with respect to its securities. Accordingly, we keep the market advised of all information required to be disclosed under the rules which we believe would have material affect on the price or value of the Company’s securities.

In addition to the half yearly and annual reporting requirements, there is a continual stream of information being provided to the Stock Exchange. Of particular note is the disclosure after each month-end of the Company’s net asset backing per share. All important Stock Exchange announcements are also posted on the Company’s internet website.

To assist Directors to fully meet their responsibilities to bring an independent viewpoint to matters coming before them, the Board has agreed a procedure in appropriate situations for Directors to take independent professional advice at the expense of the Company after advising the Chairman of their intention to do so.

Risk Management

The Company has adopted a Risk Management Framework which is in accordance with the Recommendation 7.1 of the ASX Corporate Principles of Good Corporate Governance. The framework has been designed taking into account best practice from the standard AS/NZS 4360 ‘Risk Management’, the Committee of Sponsoring Organisations of the Treadway Commission (COSO) and the Group of 100’s ‘Guide to Compliance with ASX Principle 7’.

The Board are assisted in their Risk Management Activities by the Audit Committee which meets at least 4 times a year. Co-ordination of Risk Management activities is done by the CFO, who reports to the Audit Committee on such matters.

There are two main areas of risk that have been identified :

a) Investment Risk

b) Operational Risk

Risk Management Framework

Investment Risk

The Company addresses Investment Risk through the careful selection of companies that it invests in, diversification of investments across sectors and industries and by being a long-term investor. Concentration and value-at-risk reports are part of the Company’s review.

The Trading Portfolio is held for short-term opportunities, and options are written over part of this portfolio. The Trading Portfolio is never more than 10% of the assets of the Company. Through the Investment Committee, close control is maintained of options transactions which are only written over stocks held in that portfolio and designed to enhance returns.

Credit and settlement risk are also reviewed as part of the Risk Management Framework.

Operational Risk

The Company has a set of internal controls and review processes to mitigate against systems and process risk and error and fraud. These internal controls include, inter alia, peer review, reconciliations, different authority levels and sign-offs and dual signatories. The Company also has a Disaster Recovery Programme to mitigate the effects of any disaster and enable the business of the Company to continue.

Legal, regulatory and reputational risk are also part of the Risk Management framework, and considered by the Audit Committee. As well as experienced staff and directors, the Company utilizes external advisors to mitigate these risks.