CORPORATE GOVERNANCE STATEMENT

Principle 1: Lay Solid Foundations for Management and Oversight
The Board has developed and implemented policies and practices which ensure that the Consolidated Entity complies with the recommendations, principles and spirit set out in the guidelines. 

The role and responsibilities of the Board, Board Committees, management and operating subsidiaries have been established through Board approved charters and policies all of which are available on the Forest Place Group website.  The most significant responsibilities of the Board remain the provision of strategic guidance for the Consolidated Entity, including contributing to the effective development of the corporate strategy, and authorising and monitoring major investment and strategic commitments.

The Board has delegated to the Executive Director, Justin Laboo, responsibility for the overall operational, business management and financial performance of the Consolidated Entity, implementation of agreed corporate strategies, risk management and keeping the Board and market fully informed of material developments.

The Consolidated Entity does not directly employ staff (including senior executive staff) but has entered into an Operating Agreement with FKP Limited for the supply of administrative services for commercial consideration. The Executive Director is responsible for the effective operation of services under the agreement and is assisted by senior managers of FKP Limited who report to the Executive Director.

Principle 2: Structure the Board to Add value
During the financial year the Chairman was at all times an independent, non-executive, director.  The Board comprised four non-executive directors, two of whom are independent (including the Chairman) and one Executive Director.
 
The names, skills and experience of the Directors who held office during the financial year and as at the date of this Statement, and the period of office of each director, are included in the Directors’ Report.
In assessing the independence of Non-Executive Directors, the Board considered each director’s previous and current relationships with Forest Place Group customers, suppliers, consultants, professional advisors and substantial shareholders. The Board considers that of the four non-executive directors, Ian Fraser (Chairman) and Don Mackenzie are independent.  Phil Parker, Geoff Grady and Executive Director, Justin Laboo, are nominees of the Company’s major shareholder, FKP Limited.

It is acknowledged that a majority of the Board are not independent directors.  However, given the small size of the Consolidated Entity, and the safeguards established internally primarily through the operation of the Contract Review Committee, the appointment of additional independent directors so as to reach a majority of independent directors is not considered necessary or cost effective, nor is it believed that such action would derive any benefit to the shareholders.

The Contract Review Committee exists to review agreements and any significant contractual commitments between the Consolidated Entity and related parties.  The committee comprises the independent non-executive members of the Board and, when required, external parties. The committee considers, for new agreements, whether the terms and conditions are appropriate and on an arms-length basis, and once agreements are in place, reviews compliance with and the continuing suitability of those arrangements for the needs of the Consolidated Entity.

The committee applies a high standard of scrutiny and rigor to all of the matters it considers and decides and is acutely aware that is has a significant role in protecting the rights of all shareholders particularly those which are not associated with the majority shareholder FKP Limited.

In doing so, the independence of the committee effectively operates as an internal mechanism of control to ensure the decision making process of the Forest Place Group Board remains robust and consistent with the governance demands of all shareholders.

The Board distinguishes between the concept of independence and the issues of conflict of interest or material personal interests which may arise from time to time. Wherever there is an actual or potential conflict of interest or a material personal interest, the Board’s policies and procedures ensure:
> that the interest is fully disclosed and the disclosure is recorded in the register of directors’ interests and in the Board minutes;
>  the relevant director is excluded from all considerations of the matter by the Board; and
> where appropriate, the matter is delegated to an appropriate committee of the Board which comprises only the independent directors of the Company.

Directors of the Company are considered to be independent when they are independent of management and free from any business or other relationship that could materially interfere with, or could be perceived to materially interfere with, the exercise of their unfettered and independent judgment.
As the determination of independence remains a matter for the Board’s judgment, the Board confirms that all directors considered to be independent meet the stated requirements for independence as recommended in the guidelines.

Each director has the right, at the Company’s expense, to seek independent professional advice in relation to the execution of Board responsibilities. Prior approval of the Chairman, which will not be unreasonably withheld, is required. Where appropriate, directors share such advice with the other directors.

Given the current ownership structure of the Consolidated Entity, the Consolidated Entity does not intend to establish a separate nomination committee. This function will continue to be performed by the full Board.

Principle 3: Promote Ethical and Responsible Decision-Making
The Consolidated Entity has well-established policies and procedures which seek to promote throughout the Consolidated Entity a culture of compliance with legal requirements and ethical standards.  The Board has established a Code of Conduct with the objective of enhancing the Consolidated Entity’s reputation for fair and reasonable dealing and to help maintain high standards of corporate and individual behaviour throughout the Consolidated Entity. The Code of Conduct promotes ethical and responsible decision making by directors and employees of FKP Limited.

The Code of Conduct is published on Forest Place Group’s website.  Company policy during the financial year prohibited directors and employees of FKP Limited from dealing in Company shares when in possession of price sensitive information that is not known to the market.

The Insider Trading and Dealing in the Company’s Security Policy is available on the Forest Place Group website.

Principle 4: Safeguard Integrity in Financial Reporting
The Executive Director, assisted by the Retirements Finance Manager, state in writing to the Board each reporting period that the Consolidated Entity’s financial reports present a true and fair view, in all material respects, of the Consolidated Entity’s financial condition and operational results and are in accordance with relevant accounting standards.

The Board has established an Audit Committee which operates under a charter approved by the Board and which is available on Forest Place Group’s website.

The Committee comprises two independent non-executive members.  The Chairman of the Committee is an independent non-executive director who is not chair of the Board.  Whilst the Committee does not consist of 3 members in accordance with ASX recommendations, the Board is satisfied that given the financial and public company experience of the Audit Committee members and the size of the Consolidated Entity, it is not necessary for an additional member to be appointed to the Audit Committee or that such action would derive any benefit to the shareholders. 

The names and qualifications of the Audit Committee members are set out in the Directors’ Report. Meetings of the Committee are attended, by invitation, by the Executive Director, assisted by the Retirements Finance Manager, Company Secretary, the engagement partner from the Consolidated Entity’s external auditor and such other senior staff or professional people as may be appropriate from time to time.
 
The number of meetings of the Committee held during the year is set out in the Directors’ Report.

The Company has an Audit Committee charter which determines its function and responsibilities and is available on Forest Place Group’s website.

Minutes of all Committee meetings are available to the Board and the Chairman of the Committee reports to the Board after each Committee meeting.

The auditor, PKF has declared its independence to the Board. The Committee has examined detailed material provided by the external auditor and by management and has satisfied itself that the standards for auditor independence and associated issues are fully complied with.

Principle 5: Make Timely and Balanced Disclosure
A continuous disclosure regime operates through out the Company policies and procedures are in place to ensure timely, open and accurate information to all stakeholders, including shareholders, regulators and investors.

The Company Secretary has primary responsibility for communications with the Australian Securities Exchange including responsibility for ensuring compliance with the continuous disclosure requirements in the ASX Listing Rules and overseeing information going to the ASX, shareholders and other interested parties. The Company Secretary reports to the Board at each meeting on matters notified to the ASX.

All announcements made to the ASX by the Company will be published on Forest Place Group’s website.

Principle 6: Respect the Right of Shareholders
The Company aims to keep shareholders informed of the Company’s performance and all major developments in an ongoing manner. Information is communicated to shareholders through:

>  the annual report which is distributed to all shareholders (unless specifically requested otherwise);
>  other correspondence regarding matters impacting on shareholders as required.

All documents that are released publicly are made available on Forest Place Group’s website.

Shareholders are also encouraged to participate in the Annual General Meeting to ensure a high level of accountability and identification with the Company’s strategies and goals. Important issues are presented to shareholders as single resolutions. In this regard, Annual General Meetings are held on site at villages.  
Shareholders can also register on Forest Place Group’s website to receive email notification of when the above details including Company Announcements are posted onto Forest Place Group’s website.

The engagement partner of the Consolidated Entity’s external auditor, PKF, attends the Company’s Annual General Meeting and is available to answer questions from shareholders about the audit. The Chairman advises the shareholders of this at the commencement of each Annual General Meeting.

Principle 7: Recognise and Manage Risk
The Board has developed and implemented polices and practices which ensure that the material business risks facing the Consolidated Entity are adequately identified, assessed, monitored and managed throughout the whole organisation.

These include:
>  preparation of annual budgets and the Consolidated Entity’s strategic plan for approval by directors.
> presentation of actual trading results for the Consolidated Entity to the Board at each Board Meeting, compared against budget and forecast, with revised forecasts if required.
> preparation of comprehensive Board papers containing relevant operational, strategic, financial and legal information by each senior manager and circulated to directors before each meeting.
>  the establishment and implementation of financial authority limits by the Board to delegate the Board’s approval process of such matters.  Where the cost is above those delegated authorities’ approval of the full Board is required.
> maintenance of insurance cover appropriate to the size and nature of the Consolidated Entity’s operations to reduce the financial impact of any significant insurable losses.
 establishment of a risk register which identifies the material risks facing the Consolidated Entity and which is regularly reviewed and updated.

The Board is responsible for oversight of the Consolidated Entity’s risk management and control framework. The active identification of risks and implementation of mitigation measures is the responsibility of the Executive Director and delegated executive management who provide services to the Company under the Operating Agreement with FKP Limited.

In view of its size and operational structure, the Consolidated Entity relies on the FKP Limited financial management team, led by the Retirements Finance Manager to perform internal audit functions. The Retirements Finance Manager reports in writing to all Board meetings and attends when requested. The Retirements Finance Manager also attends all meetings of the Audit Committee and provides written reports to that Committee.

In conjunction with the certification of financial reports provided under Principle 4, the Executive Director, assisted by the Retirements Finance Manager, state in writing to the Board each reporting period that:

>  the statements made with regard to the integrity of the Consolidated Entity’s financial reports are founded on a sound system of risk management and internal controls which, in all material respects, implements the policies adopted by the Board; and
> the Consolidated Entity’s risk management and internal compliance and control systems to the extent they relate to financial reporting are operating efficiently and effectively in all material respects and nothing has occurred since the end of the reporting period that would materially change the position.

Principle 8: Encourage Enhanced Performance
The Board has established an approval process for monitoring the performance of the Board, its committees, individual directors and key executives appropriate for the size and structure of the Consolidated Entity.

The independent Non–Executive Directors have determined that as the Consolidated Entity does not directly employ any staff (including senior executive staff) it is not necessary to establish a separate Remuneration Committee. In this regard, the Consolidated Entity has entered into an Operating Agreement with FKP Limited for the supply of services on commercial terms.

Only independent Non-Executive Directors receive remuneration, the levels of which are set to attract and retain appropriately qualified and experienced Directors and which reflect current remunerative trends in the corporate sphere both locally and internationally.

Independent Non-Executive Directors remuneration consists of a fixed salary including superannuation with no performance related components. The Chairman of the Board is responsible for reviewing and recommending the remuneration arrangements for Directors and assessing the appropriateness of the nature and amount of remuneration for each Independent Non-Executive Director on a periodic basis by reference to the overall objective of ensuring maximum shareholder benefit.

No alteration to the level of remuneration payable to Directors has been made during the financial year.

Details of the nature and amount of each element of the remuneration of each Director of the Company and each of the executive officers of the Company for the financial year are disclosed in the relevant section of the Directors’ Report.  There are no Directors’ retirement benefits and no share and option plans for directors and officers.

Directors, executives and non-executives, appointed as nominees of FKP Limited currently receive no remuneration from Forest Place Group Limited.