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Corporate Governance

Algae.Tec Limited is committed to support long term performance and sustainability of the business, to protect and enhance the interests of security holders and other stakeholders through best practice corporate governance.

Algae.Tec regularly reviews its governance arrangements, and developments in market practice, expectations and regulation.  Algae.Tec complies with the ASX Corporate Governance Council's Corporate Governance Principles and Recommendations (3rd Edition).

This statement has been approved by the Board.  It is current as at 31 August 2016.

 

The Board and management of Algae.Tec Limited (“Algae.Tec” or the “Company”) recognise their duties and obligations to shareholders and other stakeholders to implement and maintain a proper system of corporate governance. The Company believes that good corporate governance adds value to stakeholders and enhances investor confidence. The ASX Listing Rules require listed companies to prepare a statement disclosing the extent to which they have complied with the recommendations of the ASX Corporate Governance Council (“Recommendations”) in the reporting period. The Recommendations are guidelines designed to improve the efficiency, quality and integrity of the Company. They are not prescriptive, so that if a company considers a recommendation to be inappropriate having regard to its own circumstances, it has the flexibility not to follow it. Where a company has not followed all the Recommendations, it must identify which Recommendations have not been followed and give reasons for not following them. This Corporate Governance Statement (“Statement”) sets out a description of the Company’s main corporate practices and provides details of the Company’s compliance with the Recommendations, or where appropriate, indicates a departure from the Recommendations with an explanation. This Statement is current as at 31 August 2016 and has been approved by the Board of Directors of Algae.Tec Limited. Please click here to download the full statement  
Responsibilities of the Board 1.1 The Board is responsible for the following matters: 1.1.1 ensuring the Company’s conduct and activities are ethical and carried out for the benefit of all its stakeholders; 1.1.2 setting the strategic direction of the Company and monitoring the Company’s performance against its stated objectives; 1.1.3 providing input into and final approval of corporate strategy and monitoring implementation of corporate strategy, business plans and performance objectives; 1.1.4 setting the risk profile for the Company and reviewing, ratifying and monitoring systems of risk management; 1.1.5 reviewing and monitoring codes of conduct, and legal and regulatory compliance; 1.1.6 the appointment and where necessary replacement of the Company’s Chief Executive Officer or equivalent (Chief Executive Officer), a right of veto in relation to the appointment of the Chief Financial Officer, Company Secretary and other senior executives, and monitoring senior executives’ performance and implementation of strategy; 1.1.7 determining appropriate remuneration policies; 1.1.8 allocating resources and ensuring appropriate resources are available to management; 1.1.9 procuring appropriate professional development opportunities for directors to develop and maintain the skills and knowledge needed to perform their role as a director; 1.1.10 approving and monitoring the annual budget, progress of major capital expenditure, capital management, and acquisitions and divestitures; and 1.1.11 approving and monitoring financial and other reporting. Chairperson 1.2 The Chairperson is responsible for leadership of the Board and for the efficient organisation and conduct of the Board’s business. The Chairperson should facilitate the effective contribution of all directors and promote constructive and respectful relations between directors and between the Board and management of the Company. The Chairperson is responsible for briefing directors on issues arising at Board meetings and ultimately is responsible for communications with security holders and arranging Board performance evaluation. 1.3 The Chairperson should be an independent director. The Chairperson should not be the Chief Executive Officer. The Chairperson’s other positions should not be such that they are likely to hinder the effective performance of their role as Chairperson. Chief Executive Officer 1.4The Chief Executive Officer or equivalent is responsible for running the affairs of the Company under delegated authority from the Board. In carrying out his or her responsibilities the Chief Executive Officer must report to the Board in a timely manner and ensure all reports to the Board present a true and fair view of the Company’s financial condition and operational results. Company Secretary 1.5The Company Secretary reports to the Board through the Chairperson and is responsible for monitoring the extent that Board policy and procedures are followed, and coordinating the timely completion and despatch of Board agenda and briefing material. All directors are to have access to the Company Secretary. Board’s relationship with Management 1.6 The role of management is to support the Chief Executive Officer or equivalent and implement the running of the general operations and financial business of the Company, in accordance with the delegated authority of the Board. Appointment and Election of Directors 1.7 The Company shall ensure that prior to appointing a director or recommending a new candidate for election as a director that appropriate checks are undertaken as to the persons character, experience, education, criminal record and bankruptcy history. 1.8 The following information about a candidate standing for election or re-election as a director should be provided to security holders to enable them to make an informed decision on whether or not to elect or re-elect the candidate: 1.8.1 biographical details, including their relevant qualifications and experience and the skills they bring to the Board; 1.8.2 details of any other material directorships currently held by the candidate; 1.8.3 in the case of a candidate standing for election as a director for the first time: (a) any material adverse information revealed by the checks the entity has performed about the director; (b) details of any interest, position, association or relationship that might influence, or reasonably be perceived to influence, in a material respect his or her capacity to bring an independent judgement to bear on issues before the board and to act in the best interests of the entity and its security holders generally; and (c) if the Board considers that the candidate will, if elected, qualify as an independent director, a statement to that effect; 1.8.4 in the case of a candidate standing for re-election as a director: (a) the term of office currently served by the director; and (b) if the Board considers the director to be an independent director, a statement to that effect; and 1.8.5 a statement by the Board as to whether it supports the election or re-election of the candidate. 1.9 A candidate for appointment or election as a non-executive director should provide the Board with the information above and a consent for the Company to conduct any background or other checks the entity would ordinarily conduct. The candidate should also provide details of his or her other commitments and an indication of time involved, and should specifically acknowledge to the Company that he or she will have sufficient time to fulfil his or her responsibilities as a director. Written Agreements with Directors and Senior Executives 1.10 The Company shall enter into a written service contract with each of its executive directors and senior executives which sets out at a minimum a description of their: 1.10.1 position; 1.10.2 duties; 1.10.3 responsibilities; 1.10.4 to whom they report; 1.10.5 circumstances in which their service contract may be terminated; and 1.10.6 any entitlement upon termination. 1.11 The Company shall provide each non-executive director a letter of appointment which sets out at a minimum: 1.11.1 their term of appointment; 1.11.2 expected commitments; 1.11.3 remuneration; 1.11.4 requirements to disclose directors’ interests which may affect the director’s independence; 1.11.5 requirements to comply with Company policies; 1.11.6 the Company’s policy on when directors may seek independent advice; 1.11.7 the circumstances in which the director’s office becomes vacant; 1.11.8 indemnity and insurance arrangements; 1.11.9 ongoing rights of access to corporate information; and 1.11.10 confidentiality obligations. Diversity 1.12 The Board has adopted a policy on achieving gender, age and ethnic diversity in the Company’s Board and employees as set out in Appendix A. 1.13 The Chief Executive Officer and the Company Secretary are responsible for ensuring the policy is brought to the attention of all affected persons and for monitoring compliance with the policy. Performance Evaluation 1.14 The Chairperson shall review the performance of the Chief Executive Officer and each Executive Director at least once every calendar year and the Chief Executive Officer shall review the performance of executive management at least once every calendar year with reference to the terms of their employment contract.
Composition of the Board 2.1 The Board should be of a size and composition that is conducive to making appropriate decisions. The Board should be large enough to incorporate a variety of perspectives and skills, and to represent the best interests of the Company as a whole rather than of individual security holders or interest groups. It should not, however, be so large that effective decision-making is hindered. 2.2 The Board shall adopt and disclose a Board skill matrix. The composition of the Board should be reviewed regularly against the Company’s board skills matrix to ensure the appropriate mix of skills and expertise is present. Procedure for selection of new directors 2.3 The Board believes the Company is not of sufficient size to justify having a Nomination Committee. If any vacancies arise on the Board, all directors are involved in the search and recruitment of a replacement. The Board believes corporate performance is enhanced when the Board has an appropriate mix of skills, experience, expertise and diversity. Independent Directors 2.4 The Company will regularly review whether each non-executive director is independent and each non-executive director should provide to the Board all information that may be relevant to this assessment. The Company should disclose: 2.4.1 the names of the directors considered by the Board to be independent directors; 2.4.2 if a director has an interest, position, association or relationship of the type that might cause doubts about the independence of the director but the Board is of the opinion that it does not compromise the independence of the director, the nature of the interest, position, association or relationship in question and an explanation of why the board is of that opinion; and 2.4.3 the length of service of each director. 2.5 If a director’s independence status changes this should be disclosed and explained to the market in a timely fashion. 2.6 The Company will endeavour to ensure that the majority of its non-executive directors are independent at all times, subject to the right of security holders in general meeting to elect and remove directors. Independent decision- making 2.7 All directors – whether independent or not - should bring an independent judgement to bear on Board decisions. Directors are encouraged to confer regularly without management present. Their discussions are to be facilitated by the Chairperson. Non-executive directors should inform the Chairperson before accepting any new appointments as directors. Independent advice 2.8 To facilitate independent decision making, the Board and any committees it convenes from time to time may seek advice from independent experts whenever it is considered appropriate. With the consent of the Chairperson, individual directors may seek independent professional advice, at the expense of the Company, on any matter connected with the discharge of their responsibilities. Induction and education 2.9 The Board will implement an induction program to enable new directors to gain an understanding of: 2.9.1 the Company’s financial, strategic, operational and risk management position; 2.9.2 the culture and values of the Company; 2.9.3 the rights, duties and responsibilities of the directors; 2.9.4 the roles and responsibilities of senior executives; 2.9.5 the role of any Board committees in operation; 2.9.6 meeting arrangements; and 2.9.7 director interaction with each other, senior executives and other stakeholders. 2.10 Directors will have reasonable access to continuing education to update and enhance their skills and knowledge, including education concerning key developments in the Company and the relevant industry sector. Access to information 2.11 The Board has the right to obtain all information from within the Company which it needs to effectively discharge its responsibilities. 2.12 The Chief Executive Officer is required on request from the Board to supply the Board with information in a form and timeframe, and of a quality that enables the Board to discharge its duties effectively. Directors are entitled to request additional information where they consider such information necessary to make informed decisions. Directors are entitled to meet with executives as required to fulfil their executive roles, or in the case of non-executive Directors provided prior notice is given to the Chairperson.
Code of conduct 3.1 The Board has adopted the Code of Conduct set out at Appendix B to promote ethical and responsible decision making by directors, management and employees. The Code embraces the values of honesty, integrity, enterprise, excellence, accountability, justice, independence and equality of stakeholder opportunity. 3.2 The Chief Executive Officer is responsible for ensuring that training on the Code of Conduct is provided to staff and officers of the Company. 3.3 The Chief Executive Officer and the Company Secretary are responsible for making advisers, consultants and contractors aware of and accountable to the Company’s expectations set out in the Code of Conduct.
Board Responsibility 4.1 The Board believes that due to the size and composition of the Board and the size of the Company it is not appropriate to have an Audit Committee. 4.2 The Board as a whole is responsible to: 4.2.1 review the integrity of the Company’s financial reporting; 4.2.2 review and oversee the planning process for external audits; 4.2.3 review the overall conduct of the external audit process including the independence of all parties to the process; and 4.2.4 review the performance of the external auditors. Verification of financial reports 4.3 The Chief Executive Officer and Chief Financial Officer (or equivalent) are required by to state the following in writing prior to the Board approving the Company’s financial statements for a financial period: 4.3.1 that in their opinion the Company’s financial reports have been properly maintained and contain a true and fair view, in all material respects, of the financial condition and operating performance of the Company and comply with relevant accounting standards; and 4.3.2 that the opinion is founded on a sound system of risk management and that the system is operating effectively in all material respects in relation to financial reporting risks. External auditor available at AGM 4.4 Pursuant to sections 250PA, 250RA and 250T of the Corporations Act 2001 (Cth), security holders may request that the Company’s auditor attends the Company’s Annual General Meeting and is available to answer questions. The Company shall ensure that its auditor attends its AGM and is available to answer questions from security holders relevant to the audit.
Disclosure Policy 5.1 The Board has adopted a Disclosure Policy for ensuring timely and accurate disclosure of price-sensitive information to security holders through the ASX set out in Appendix C. 5.2 The Disclosure Policy ensures that: 5.2.1 all investors have equal and timely access to material information concerning the Company including its financial position, performance, ownership and governance; and 5.2.2 Company announcements are subjected to a vetting and authorisation process designed to ensure they: (a) are released in a timely manner; (b) are factual and balanced; (c) do not omit material information; and (d) are expressed in a clear and objective manner that allows investors to assess the impact of the information when making investment decisions.
Communication with Security holders 6.1 The Board is committed to open and accessible communication with holders of the Company’s shares. Disclosure of information and other communication will be made as appropriate by mail or email. Security holders shall be given the option to receive communication from, and send communications to, the Board and its security registry electronically. 6.2 The Company’s website will also be used to provide the following relevant information to security holders: 6.2.1 the names, photographs and brief biographical information for each of its directors and senior executives; 6.2.2 its Constitution; 6.2.3 the Corporate Governance Policies and other Corporate Governance materials; 6.2.4 copies of its annual reports and other financial statements; 6.2.5 copies of its announcements to ASX; 6.2.6 copies of notices of meetings of security holders and any accompanying documents; 6.2.7 if it keeps them, webcasts and/or transcripts of meetings of security holders and copies of any documents tabled or otherwise made available at those meetings; 6.2.8 if it keeps them, webcasts and/or transcripts of investor or analyst presentations and copies of materials distributed at those presentations; and 6.2.9 such other information as is required by the ASX Listing Rules or recommended by the ASX Corporate Governance Council. 6.3 The Company will keep a summary record for internal use of the issues discussed at group or one-on-one briefings with investors and analysts, including a record of those present and the time and place of the meeting. General Meetings 6.4 The Company is committed to improving shareholder participation in general meetings. In order to achieve that objective, the Company has adopted guidelines of the ASX Corporate Governance Council for improving shareholder participation through the design and content of notices and through the conduct of the meeting itself.
7.1 The board of a listed entity should: (a) Have a committee or committees to oversee risk, each of which; 1) Has at least three members, a majority of whom are independent directors; and 2) Is chaired by and independent director and  disclose; 3) The charter of the committee 4) The ;members of the committee; and 5) 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 risk committee or committees that satisfy (a) above, disclose that fact and the processes it employs for overseeing the entity’s risk management framework. 7.2 The board or a committee of the board should; (a) Review the entity’s risk management framework at least annually to satisfy itself that it continues to be sound; and (b) Disclose, in relation to each reporting period, whether such review has taken place. 7.3 A listed entity should disclose: (a) If it has an internal audit function, how the function is structured and what role it performs; or (b)If it does not have an internal audit function, that fact and the processes it employs for evaluating and continually improving the effectiveness of its risk management and internal control processes. 7.4 to manage those risks. Commentary The board as a whole is ultimately responsible for establishing and reviewing the Company’s policies on risk profile, oversight and management and satisfying itself that management has developed and implemented a sound system of risk management and internal control in accordance with the Company’s Corporate Governance Policies. The board believes that due to the size and composition of the board, and the size of the Company it is not appropriate to have a Risk Committee. The Company’s risk management program is implemented under the direction of the Managing Director to ensure matters affecting goals, objectives and performance of the Company and the safety of its stakeholders are identified and assessed by an operational risk management framework in accordance with industry accepted standards. The Company’s risk management framework is reviewed annually. A review was undertaken in the reporting period. The board believes that the Company is not of a size to justify having an internal audit function for efficiency purposes. The Company evaluates its risk management and internal control processes in consultation with its external auditor with a view to continually improving its effectiveness. The board does not believe the Company has any material exposure to economic, environmental and social sustainability risks at the present time.
8.1 The board of a listed entity should: (a) Have a remuneration committee which’ 1) Has at least three members, a majority of whom are independent directors; and 2) Is chaired by an independent director, and disclose 3) The charter of the committee; 4) The members of the committee; and 5) 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 remuneration committee, disclose that fact and the processes it employs for setting the level and composition of remuneration for directors and senior executives and ensuring that such remuneration is appropriate and not excessive. 8.2 A listed entity should separately disclose its policies and practices regarding the remuneration of non-executive directors and the remuneration of executive directors and other senior executives. 8.3 A listed entity which has an equity-based remuneration scheme should: (a) have a policy on whether participants are permitted to enter into transactions (whether through the use of derivatives or otherwise) which limit the economic risk of participating in the scheme; and (b) disclose that policy or a summary of it. Commentary The Board believes it is not of a size to justify having a Remuneration Committee. The Company’s remuneration policy is structured for the purpose of motivating executive directors and senior management to pursue the long-term growth and success of the Company. The Board sets the level and structure of remuneration to executive directors and senior executives for the purpose of balancing the Company’s competing interest of attracting and retaining executive directors and senior management and not paying excessive remuneration. The Company did not have an equity based remuneration scheme during the financial year ending 30 June 2016.
Introduction 1 The Company recognises the positive advantages of a diverse workplace and is committed to: 1.1 creating a working environment conducive to the appointment of well qualified employees senior management and board candidates; and 1.2 identifying ways to promote a corporate culture which embraces diversity when determining the composition of employees, senior management and the Board. Objectives 2 This Diversity Policy provides a framework for the Company to achieve: 2.1 a diverse and skilled workforce, leading to continuous improvement in service delivery and achievement of corporate goals; 2.2 a workplace culture characterised by inclusive practices and behaviours for the benefit of all staff; 2.3 a work environment that values and utilises the contributions of employees with diverse backgrounds, experiences and perspectives through improved awareness of the benefits of workforce diversity and successful management of diversity; and 2.4 awareness of all staff of their rights and responsibilities with regards to fairness, equality and diversity for all aspects of diversity. Measurable Objectives 3 The Board will set measurable objectives at least annually for workplace diversity including gender diversity and assess annually the objectives and the progress towards achieving them. Recruitment 4 The Chief Executive Officer will: 4.1 review the recruitment and selection processes to ensure that current and potential employees are not discriminated against; and 4.2 ensure that the selection process of its employees, senior management and the board takes into account the following factors: 4.2.1 attract and retain people from equal employment opportunity target groups, and others who together make up a diverse workforce; and 4.2.2 facilitate the employment of indigenous people. Awareness, skills and development 5 To embrace diversity in the Company and assist in the development of a broader pool of skilled and experienced board candidates the Company will: 5.1 provide induction, education and training to staff who are from diverse backgrounds to enhance the retention of new employees and promotion of existing employees to senior management and board positions; and 5.2 ensure that employees, senior management and the board attend programs to increase awareness of issues in relation to the employment of staff from diverse backgrounds. Evaluating and managing diversity 6 The Chief Executive Officer will regularly and at least annually gather information on demographics in the Company and conduct staff surveys or diversity audits to identify areas of weakness and to assess the Company’s progress towards achieving the measurable objectives
Introduction 1 This Code of Conduct sets out the standards which the Board, management and employees of the Company are encouraged to comply with when dealing with each other, the Company’s security holders and the broader community. Responsibilities to security holders 2 The Company aims: 2.1 to increase shareholder value within an appropriate framework which safeguards the rights and interests of security holders; and 2.2 to comply with systems of control and accountability which the Company has in place as part of its corporate governance with openness and integrity. 3 The Board, management and employees of the Company shall act in the best interests of the Company. Responsibilities to clients, employees, suppliers, creditors, customers and consumers 4 The Company is to comply with all legislative and common law requirements which affect its business. Employment practices 5 The Company will employ the best available staff with skills required to carry out the role for which they are employed. The Company will ensure a safe workplace and maintain proper occupational health and safety practices. Responsibility to the community 6 The Company will recognise, consider and respect environmental, native title and cultural heritage issues which arise in relation to the Company’s activities and comply with all applicable legal requirements. Responsibility to the individual 7 The Company recognises and respects the rights of individuals and will comply with the applicable legal rules regarding privacy and confidential information. Obligations relative to fair trading and dealing 8 The Company will deal with others in a way that is fair and will not engage in deceptive practices. Business courtesies, bribes, facilitation payments, inducements and commissions 9 Corrupt practices are unacceptable to the Company. It is prohibited for the Company or its directors, managers or employees to directly or indirectly offer, pay, solicit or accept bribes or any other corrupt arrangements. Conflicts of interest 10 The Board, management and employees shall report any situations where there is a real or apparent conflict of interest between them as individuals and the interest of the Company. Where a real or apparent conflict of interest arises, the matter should be brought to the attention of the Board in the case of a Board member or the Chief Executive Officer in the case of a member of management and a supervisor in the case of an employee, so that it may be considered and dealt with in an appropriate manner. 11 If requested by the Board, a Board member who has a conflict of interest shall leave a Board meeting but only for such period as the Board meeting is addressing the specific matter in relation to which the Board member has a conflict of interest. Compliance with the Code of Conduct 12 Any breach of compliance with this Code of Conduct is to be reported directly to the Chairperson. Periodic review of Code 13 The Company will monitor compliance with this Code of Conduct periodically by liaising with the Board, management and staff. Suggestions for improvements or amendments to this Code of Conduct can be made at any time to the Chairperson.
Disclosure Requirements 1 The Company recognises its duties pursuant to the continuous disclosure rules of the ASX Listing Rules and Corporations Act to keep the market fully informed of information which may have a material effect on the price or value of the Company’s securities. 2 Subject to certain exceptions (in ASX Listing Rule 3.1A), the Company is required to immediately release to the market information that a reasonable person would expect to have a material effect on the price or value of the Company’s securities. Responsibilities of directors, officers and employees 3 The Board as a whole is primary responsibility for ensuring that the Company complies with its disclosure obligations and for deciding what information will be disclosed. Subject to delegation, the Board is also responsible for authorising all ASX announcements and responses of the Company to ASX queries. 4 Every director, officer and employee of the Company is to be informed of the requirements of this policy by the Chairperson (in the case of directors) and by the Chief Executive Officer (in the case of other officers and employees) and must advise the Chief Executive Officer, Chairperson or Company Secretary as soon as possible (and prior to disclosure to anyone else) of matters which they believe may be required to be disclosed. Authorised Disclosure Officer 5 The Board has delegated its primary responsibilities to communicate with ASX to the following Authorised Officer: 5.1 the Company Secretary; or 5.2 in the absence of the Company Secretary, the Chief Executive Officer or a designated Executive Director who is authorised to act in that capacity by the Board. Responsibilities of Authorised Disclosure Officer   6 Subject to Board intervention on a particular matter, the Authorised Officer is responsible for the following: 6.1 monitoring information required to be disclosed to ASX and coordinating the Company’s compliance with its disclosure obligations; 6.2 ASX communication on behalf of the Company, authorising Company announcements and lodging documents with ASX; 6.3 requesting a trading halt in order to prevent or correct a false market; 6.4 providing education on these disclosure policies to the Company’s directors, officers and employees; and 6.5 ensuring there are vetting and authorisation processes designed to ensure that Company announcements: 6.5.1 are made in a timely manner; 6.5.2 are factual; 6.5.3 do not omit material information; 6.5.4 are expressed in a clear and objective manner that allows investors to assess the impact of the information when making investment decisions. 7 An authorised Disclosure Officer must be available to communicate with the ASX at all reasonable times, and are responsible for providing contact details and other information to ASX to ensure such availability. Measures to avoid a false market 8 In the event that ASX requests information from the Company in order to correct or prevent a false market in the Company’s securities, the Company will comply with that request. The extent of information to be provided by the Company will depend on the circumstances of the ASX request. 9 If the Company is unable to give sufficient information to the ASX to correct or prevent a false market, the Company will request a trading halt. 10 If the full Board is available to consider the decision of whether to call a trading halt, only they may authorise it, but otherwise, the Authorised Disclosure Officer may do so. ASX Announcements 11 Company announcements of price sensitive information are subjected to the following vetting and authorisation process to ensure their clarity, timely release, factual accuracy and inclusion of all material information: 11.1 The Authorised Officer must prepare ASX announcements when required to fulfil the Company’s disclosure obligations. 11.2 Proposed announcements must be approved by the Chairperson or in his or her absence, urgent announcements may be approved by the Chief Executive Officer or other person expressly authorised by the Board. 11.3 Announcements must first be released to the ASX Announcements Platform before being disclosed to any other private or public party (such as the media). After release of the announcement, it must be displayed on the Company’s website, following which the Company can then release such information to media and other information outlets. 11.4 Wherever practical, all announcements must be provided to the directors, Chief Executive Officer and Company Secretary prior to release to the market for approval and comment. Confidentiality and unauthorised disclosure 12 The Company must safeguard the confidentiality of information which a reasonable person would expect to have a material effect on the price or value of the Company’s securities. If such information is inadvertently disclosed, the Authorised Disclosure Officer must be informed of the same and must refer it to the Chairperson and Chief Executive Officer (or equivalent) as soon as possible. External communications and Media Relations 13 The Chairperson or Chief Executive Officer (or equivalent) are authorised to communicate on behalf of the Company with the media, government and regulatory authorities, stock brokers, analysts and other interested parties or the public at large. No other person may do so unless specifically authorised by the Chairperson or Chief Executive Officer (or equivalent). 14 All requests for information from the Company must be referred to the Authorised Disclosure Officer for provision to the Chairperson and Chief Executive Officer. Breach of Disclosure Policy 15 Serious breaches of this disclosure policy may be treated with disciplinary action, including dismissal, at the discretion of the Board. 16 Where the breach is alleged against a member of the Board, that director will be excluded from the Board’s consideration of the breach and any disciplinary action for the Company to take.
1. INTRODUCTION These guidelines set out the policy on the sale and purchase of securities in Algae.Tec Limited (Company) by its Key Management Personnel. Key Management Personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including any Director (whether executive or otherwise) of that entity. The Company has determined that its Key Management Personnel are defined as: (a) its directors and officers; (b) senior managers and individuals reporting directly to the Company’s Managing Director; and (c) any other person considered by the Board as key management personnel on the basis that they have authority and responsibility for planning, directing and controlling the activities of the Company either directly or indirectly. Directors and Key Management Personnel are encouraged to be long-term holders of the Company’s securities. However, it is important that care is taken in the timing of any purchase or sale of such securities. The purpose of these guidelines is to assist Directors and Key Management Personnel to avoid conduct known as ‘insider trading’. In some respects, the Company’s policy extends beyond the strict requirements of the Corporations Act 2001 (Cth).   2. WHAT TYPES OF TRANSACTIONS ARE COVERED BY THIS POLICY? This policy applies to both the sale and purchase of any securities of the Company and its subsidiaries on issue from time to time.   3. WHAT IS INSIDER TRADING? 3.1 Prohibition Insider trading is a criminal offence. It may also result in civil liability. In broad terms, a person will be guilty of insider trading if: (a) that person possesses information which is not generally available to the market and, if it were generally available to the market, would be likely to have a material effect on the price or value of the Company’s securities (i.e., information that is ‘price sensitive’); and (b) that person: (i) buys or sells securities in the Company; or (ii) procures someone else to buy or sell securities in the Company; or (iii) passes on that information to a third party where that person knows, or ought reasonably to know, that the third party would be likely to buy or sell the securities or procure someone else to buy or sell the securities of the Company. 3.2 Examples To illustrate the prohibition described above, the following are possible examples of price sensitive information which, if made available to the market, may be likely to materially affect the price of the Company’s securities: (a) the Company considering a major acquisition; (b) the threat of major litigation against the Company; (c) the Company’s revenue and profit or loss results materially exceeding (or falling short of) the market’s expectations; (d) a material change in debt, liquidity or cash flow; (e) a significant new development proposal (e.g. new product or technology); (f) the grant or loss or a major contract; (g) a management or business restructuring proposal; (h) a share issue proposal; (i) an agreement or option to acquire an interest in a mining tenement, or to enter into a joint venture or farm-in or farm-out arrangement in relation to a mining tenement; and (j) significant discoveries, exploration results, or changes in reserve/resource estimates from mining tenements in which the Company has an interest. 3.3 Dealing through third parties The insider trading prohibition extends to dealings by individuals through nominees, agents or other associates, such as family members, family trusts and family companies (referred to as “Associates” in these guidelines). 3.4 Information however obtained It does not matter how or where the person obtains the information – it does not have to be obtained from the Company to constitute inside information. 3.5 Employee share schemes The prohibition does not apply to acquisitions of shares or options by employees made under employee share or option schemes, nor does it apply to the acquisition of shares as a result of the exercise of options under an employee option scheme. However, the prohibition does apply to the sale of shares acquired under an employee share scheme and also to the sale of shares acquired following the exercise of an option granted under an employee option scheme.   4. GUIDELINES FOR TRADING IN THE COMPANY’S SECURITIES 4.1 General rule Directors or Key Management Personnel must not, except in exceptional circumstances deal in securities of the Company during the following periods: (a) In the two (2) weeks prior to, and 24 hours after the release of the Company’s Annual Financial Report; (b) In the two (2) weeks prior to, and 24 hours after the release of the Consolidated Interim Financial Report of the Company; and (c) In the two (2) weeks prior to, and 24 hours after the release of the Company’s quarterly reports (together the Block Out Period). 4.2 Discretion of the Board The Board may at its discretion vary the rule in clause 4.1 in relation to a particular Block Out Period by general announcement to all Directors or Key Management Personnel either before or during the Block Out Period. However, if a Director or Key Management Personnel of the Company is in possession of price sensitive information which is not generally available to the market, then he or she must not deal in the Company’s securities at any time. 4.3 No short-term trading in the Company’s securities Directors or Key Management Personnel should never engage in short-term trading of the Company’s securities except for the exercise of options where the shares will be sold shortly thereafter. 4.4 Securities in other companies Buying and selling securities of other companies with which the Company may be dealing is prohibited where an individual possesses information which is not generally available to the market and is ‘price sensitive’. For example, where an individual is aware that the Company is about to sign a major agreement with another company, they should not buy securities in either the Company or the other company. 4.5 Exceptions (a) Subject to clause 4.2 and clause 4.5(b), Directors or Key Management Personnel may at any time: (i) acquire ordinary shares in the Company by conversion of securities giving a right of conversion to ordinary shares; (ii) acquire Company securities under a bonus issue made to all holders of securities of the same class; (iii) acquire Company securities under a dividend reinvestment plan, or top-up plan that is available to all holders or securities of the same class; (iv) acquire, or agree to acquire or exercise options under a Company share option plan; (v) withdraw ordinary shares in the Company held on behalf of the a Director or Key Management Personnel in an employee share plan where the withdrawal is permitted by the rules of that plan; (vi) transfer securities of the Company already held into a superannuation fund or other saving scheme in which the restricted person is a beneficiary; (vii) make an investment in, or trade in units of, a fund or other scheme (other than a scheme only investing in the securities of the Company) where the assets of the fund or other scheme are invested at the discretion of a third party; (viii) where a restricted person is a trustee, trade in the securities of the Company by that trust, provided the restricted person is not a beneficiary of the trust and any decision to trade during a prohibited period is taken by the other trustees or by the investment managers independently of the restricted person; (ix) undertake to accept, or accept, a takeover offer; (x) trade under an offer or invitation made to all or most of the security holders, such as a rights issue, a security purchase plan, a dividend or distribution reinvestment plan and an equal access buy-back, where the plan that determines the timing and structure of the offer has been approved by the board. This includes decisions relating to whether or not to take up the entitlements and the sale of entitlements required to provide for the take up of the balance of entitlements under a renounceable pro rata issue; (xi) dispose of securities of the Company resulting from a secured lender exercising their rights, for example, under a margin lending arrangement; (xii) exercise (but not sell securities following exercise) an option or a right under an employee incentive scheme, or convert a convertible security, where the final date for the exercise of the option or right, or the conversion of the security, falls during a prohibited period or the Company has had a number of consecutive prohibited periods and the restricted person could not reasonably have been expected to exercise it at a time when free to do so; or (xiii) trade under a non-discretionary trading plan for which prior written clearance has been provided in accordance with procedures set out in this Policy. (b) In respect of any share or option plans adopted by the Company, it should be noted that it is not permissible to provide the exercise price of options by selling the shares acquired on the exercise of these options unless the sale of those shares occurs outside the periods specified in paragraph 4.1. Were this is to occur at a time when the person possessed inside information, then the sale of Company securities would be a breach of insider trading laws, even though the person’s decision to sell was not influenced by the inside information that the person possessed and the person may not have made a profit on the sale. Where Company securities are provided to a lender as security by way of mortgage or charge, a sale that occurs under that mortgage or charge as a consequence of default would not breach insider trading laws. 4.6 Notification of periods when Directors or Key Management Personnel are not permitted to trade The Company Secretary will endeavour to notify all Directors or Key Management Personnel of the times when they are not permitted to buy or sell the Company’s securities as set out in paragraph 4.1.   5 APPROVAL AND NOTIFICATION REQUIREMENTS 5.1 Approval requirements – Directors (a) Any Director wishing to buy, sell or exercise rights in relation to the Company’s securities must obtain the prior written approval of the Chairman or the Board before doing so. (b) If the Chairman wishes to buy, sell or exercise rights in relation to the Company’s securities, the Chairman must obtain the prior approval of the Board before doing so. 5.2 Approval requirements – Key Management Personnel Any Key Management Personnel wishing to buy, sell or exercise rights in relation to the Company’s securities must obtain the prior written approval of the Managing Director before doing so. 5.3 Approvals to buy or sell securities (a) All requests to buy or sell securities as referred to in clauses 5.1 and 5.2 above must include the intended volume of securities to be purchased or sold and an estimated time frame for the sale or purchase. (b) Copies of written approvals must be forwarded to the Company Secretary prior to the approved purchase or sale transaction. 5.4 Notification Subsequent to approval obtained in accordance with clauses 5.1 and 5.2, any Directors or Key Management Personnel who (or through his or her Associates) buys, sells, or exercises rights in relation to Company securities must notify the Company Secretary in writing of the details of the transaction within five (5) business days of the transaction occurring. This notification obligation operates at all times but does not apply to acquisitions of shares or options by employees made under employee share or option schemes, nor does it apply to the acquisition of shares as a result of the exercise of options under an employee option scheme. 5.5   Directors or Key Management Personnel sales of securities Directors or Key Management Personnel need to be mindful of the market perception associated with any sale of Company securities and possibly the ability of the market to absorb the volume of shares being sold. With this in mind, the management of the sale of any significant volume of Company securities (i.e. a volume that would represent a volume in excess of 10% of the total securities held by the seller prior to the sale, or a volume to be sold that would be in excess of 10% of the average daily traded volume of the shares of the Company on the ASX for the preceding 20 trading days) by a Director, the Managing Director or Key Management Personnel needs to be discussed with the board and the Company’s legal advisers prior to the execution of any sale. These discussions need to be documented in the form of a file note, to be retained by the Company Secretary. 5.6 Exemption from Block Out Period restrictions due to exceptional circumstance Directors or Key Management Personnel who are not in possession of inside information in relation to the Company, may be given prior written clearance by the Managing Director (or in the case of a Director the Chairman, or in the case of the Chairman all of the other members of the board) to sell or otherwise dispose of Company securities in a Block-Out Period where the person is in severe financial hardship or where there are exceptional circumstances as set out in this policy. 5.7 Severe financial hardship or exceptional circumstances The determination of whether Directors or Key Management Personnel are in severe financial hardship will be made by the Managing Director in the case of Key Management Personnel, the Chairman in the case of a Director, and all of the board in the case of the Chairman. A financial hardship or exceptional circumstances determination can only be made by examining all of the facts and if necessary obtaining independent verification of the facts from banks, accountants or other like institutions. 5.8 Financial hardship Directors or Key Management Personnel may be in severe financial hardship if they have a pressing financial commitment that cannot be satisfied other than by selling the securities of the Company. In the interests of an expedient and informed determination by the Managing Director, Chairman or board of Directors, any application for an exemption allowing the sale of Company securities in a Block Out Period based on financial hardship must be made in writing stating all of the facts and be accompanied by copies of relevant supporting documentation, including contact details of the person’s accountant, bank and other such independent institutions (where applicable). Any exemption, if issued, will be in writing and shall contain a specified time period during which the sale of securities can be made. 5.9 Exceptional circumstances Exceptional circumstances may apply to the disposal of Company securities by a Director or Key Management Personnel if the person is required by a court order, a court enforceable undertaking for example in a bona fide family settlement, to transfer or sell securities of the Company, or there is some other overriding legal or regulatory requirement to do so. Any application for an exemption allowing the sale of Company securities in a Block Out Period based on exceptional circumstances must be made in writing and be accompanied by relevant court and/or supporting legal documentation (where applicable). Any exemption, if issued, will be in writing and shall contain a specified time period during which the sale of securities can be made.   6. ASX NOTIFICATION FOR DIRECTORS The ASX Listing Rules require the Company to notify the ASX within 5 business days after any dealing in securities of the Company (either personally or through an Associate) which results in a change in the relevant interests of a Director in the securities of the Company. The Company has made arrangements with each Director to ensure that the Director promptly discloses to the Company Secretary all the information required by the ASX.   7. EFFECT OF COMPLIANCE WITH THIS POLICY Compliance with these guidelines for trading in the Company’s securities does not absolve that individual from complying with the law, which must be the overriding consideration when trading in the Company’s securities.

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A$0.038
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ASX Code: AEB