Prospech : Corporate Governance Statement and Appendix 4G

Corporate Governance Statement

Prospech Limited

• 1 INTRODUCTION

  Prospech Limited (the Company) is committed to conducting its business activities and governing the company in accordance with best practice corporate governance to the extent appropriate to the size and nature of the Company's operations.

  Recommendation	Compliance	Statement
  Principle 1 - Lay solid foundations for management and oversight A listed entity should clearly delineate the respective roles and responsibilities of its board and management and regularly review their performance.
  1.1. A listed entity should have and disclose a board charter setting out: (a) the respective roles and responsibilities of its board and management; and (b) those matters expressly reserved to the board and those delegated to management.	Compliant	The board of directors of the Company (Board) has adopted a charter (Board Charter) which sets out the principles regarding the ongoing operation of the Board. The Board Charter sets outs the role and responsibilities of the Board and provides for the delegation of authority to management for matters pertaining to the day to day operations of the Company. A copy of the Board Charter is available on the Website.

  This Corporate Governance Statement details the extent to which the Company will follow, as at the date of its admission to the official list of the ASX, the ASX Corporate Governance Council's Corporate Governance Principles and Recommendations (Recommendations).

  For the purposes of this Corporate Governance Statement submitted pursuant to the Company's pre-quotation disclosure obligations as required by the ASX, the Company's corporate governance practices are structured with reference to the fourth edition of the Recommendations released on 27 February 2019.

  While listed entities are entitled not to adopt the Recommendations in whole or in part, the ASX requires that entities explain why it has not adopted any particular recommendation on an "if not, why not" basis.

  The table set out below identifies which Recommendations the Company follows and which it does not and provides reasons for not following those Recommendations as well as alternate governance practices (if any) the Company intends to adopt instead of those Recommendations.

  The Company's corporate governance policies together with a copy of this Corporate Governance Statement are all available on the Corporate Governance section of the Company's website athttps://prospech.com.au/corporate-governance(Website).

• 2 RECOMMENDATIONS COMPLIANCE TABLE

Recommendation	Compliance	Statement
1.2. A listed entity should: (a) undertake appropriate checks before appointing a director or senior executive or putting someone forward for election as a director; and (b) provide security holders with all material information in its possession relevant to a decision on whether or not to elect or re-elect a director.	Compliant	The Board Charter sets out the Company's process for selection, appointment and re-appointment of directors. The Company undertakes relevant background checks on director candidates and will provide all material information to shareholders that may be relevant to a decision on whether or not to elect or re-elect a director including the nominee's biographical details, qualifications, a statement whether the Board supports their election, a statement whether the Board considers the nominee independent, details of the term of office for nominees who are currently directors and any materially adverse findings arising out of background checks undertaken for nominees who are to be elected or appointed as directors for the first time.
1.3. A listed entity should have a written agreement with each director and senior executive setting out the terms of their appointment.	Compliant	The Board Charter provides that each director and senior executive is required by the Company to execute a written agreement setting out the terms of their appointment.
1.4. The company secretary of a listed entity should be accountable directly to the board, through the chair, on all matters to do with the proper functioning of the board.	Compliant	The Board Charter sets out the role and responsibilities of the Company's Secretary and provides that the Secretary is accountable to the Board, via the chair of the Board (Chair) on all matters to do with the proper function of the Board and any committee of the Board and sets out the specific obligations of the Secretary in this regard.
1.5. A listed entity should: (a) have and disclose a diversity policy; (b) through its board or a committee of the board set measurable objectives for achieving gender diversity in the composition of the its board, senior executives and workforce generally; and (c) disclose in relation to each reporting period:	Not Compliant	The Company has adopted a diversity policy (Diversity Policy) which is available on the Website. The Diversity Policy provides that the Board will, at the appropriate time, and subject to the Company's size and operations, endeavour to, on an annual basis, establish appropriate and measurable diversity targets to achieve and maintain gender diversity within the Company and assess the Company's progress in achieving these objectives.

Recommendation

Compliance

Statement

• (i) the measurable objectives set for that period to achieve gender diversity;

• (ii) the entity's progress towards achieving those objectives; and

• (iii) either:

  • (A) the respective proportions of men and women on the board, in senior executive positions and across the whole workforce (including how the entity has defined "senior executive" for these purposes); or

  • (B) if the entity is a "relevant employer" under the Workplace Gender Equality Act, the entity's most recent "Gender Equality Indicators", as defined in and published under that Act.

Due to the scale of the Company's operations and limited number of employees, the Company has not yet set measurable objectives for achieving gender diversity.

The Company will provide updates on its progress towards achieving any objectives arising out of the implementation of the Diversity Policy including the respective proportions of men and women on the Board, in senior executive positions and across the whole organisation (including how the entity defines 'senior executive') in its future annual reports.

1.6.

A listed entity should:

• (a) have and disclose a process for periodically evaluating the performance of the board, its committees and individual directors; and

• (b) disclose for each reporting period whether a performance evaluation has been undertaken in accordance with that process during or in respect of that period.

Not Compliant

The Board Charter provides that the Board is required to review and evaluate the performance of the Board, its committees and individual directors from time to time and that, at least once annually, it must review and evaluate the Board's compliance with the Board Charter and amend that charter or any other governance policies to meet the goals and objectives of the Board as they develop over time.

The Board will ensure that these evaluations are undertaken in accordance with the Board Charter from time to time and will provide details as to its compliance with this Recommendation in the Company's future annual reports.

1.7.

A listed entity should:

Compliant

The Board Charter provides that the Board will review and evaluate the performance of the Company's executives at least once annually.

Recommendation

Compliance

Statement

• (a) have and disclose a process for evaluating the performance of its senior executives at least once every reporting period; and

• (b) disclose for each reporting period whether a performance evaluation has been was undertaken in accordance with that process during or in respect of that period.

The Board will ensure that an evaluation of the Company's executives will be undertaken by the Company in accordance with the Board Charter and will provide details as to its compliance with this.

Principle 2 - Structure the board to add value

The board of a listed entity should be of a board of an appropriate size and collectively have the skills, commitment and knowledge of the entity and the industry in which it operates, to enable it to discharge its duties effectively and to add value.

2.

2.1.

The board of a listed entity should:

• (a) have a nomination committee which:

  • (i) has at least three members, a majority of whom are independent directors; and

  • (ii) is chaired by an independent director, and disclose;

  • (iii) the charter of the committee;

  • (iv) the members of the committee; and

  • (v) as at the end of each reporting period, the number of times the committee met throughout the period and the individual attendances of the members at those meetings; or

• (b) if it does not have a nomination committee, disclose that fact and the processes it employs to address board succession issues and to ensure that the board has the

Not Compliant

Due to the current size of the Board, the Board has not yet established a nomination committee. The Board Charter requires that the Board is responsible for ensuring that the Board has the appropriate balance of skills, knowledge, experience, independence and diversity.

At the appropriate time, having regard to the size of the board and the Company, the Board will establish a nomination committee.