Rules 4.7.3 and 4.10.31

Appendix 4G

Key to Disclosures

Corporate Governance Council Principles and Recommendations

Name of entity:

MILTON CORPORATION LIMITED

ABN / ARBN:

Financial year ended:

18 000 041 421

30 JUNE 2020

Our corporate governance statement2 for the above period above can be found at:3

  • These pages of our annual report:
  • This URL on our website:www.milton.com.au/corporate-governance.html

The Corporate Governance Statement is accurate and up to date as at 6 August 2020 and has been approved by the board.

The annexure includes a key to where our corporate governance disclosures can be located.

Date: 6 August 2020

Name of Director or Secretary authorising lodgement: Nishantha Seneviratne

1 Under Listing Rule 4.7.3, an entity must lodge with ASX a completed Appendix 4G at the same time as it lodges its annual report with ASX.

Listing Rule 4.10.3 requires an entity that is included in the official list as an ASX Listing to include in its annual report either a corporate governance statement that meets the requirements of that rule or the URL of the page on its website where such a statement is located. The corporate governance statement must disclose the extent to which the entity has followed the recommendations set by the ASX Corporate Governance Council during the reporting period. If the entity has not followed a recommendation for any part of the reporting period, its corporate governance statement must separately identify that recommendation and the period during which it was not followed and state its reasons for not following the recommendation and what (if any) alternative governance practices it adopted in lieu of the recommendation during that period.

Under Listing Rule 4.7.4, if an entity chooses to include its corporate governance statement on its website rather than in its annual report, it must lodge a copy of the corporate governance statement with ASX at the same time as it lodges its annual report with ASX. The corporate governance statement must be current as at the effective date specified in that statement for the purposes of rule 4.10.3.

  1. "Corporate governance statement" is defined in Listing Rule 19.12 to mean the statement referred to in Listing Rule 4.10.3 which discloses the extent to which an entity has followed the recommendations set by the ASX Corporate Governance Council during a particular reporting period.
  2. Mark whichever option is correct and then complete the page number(s) of the annual report, or the URL of the web page, where the entity's corporate governance statement can be found. You can, if you wish, delete the option which is not applicable.

Throughout this form, where you are given two or more options to select, you can, if you wish, delete any option which is not applicable and just retain the option that is applicable. If you select an option that includes "OR" at the end of the selection and you delete the other options, you can also, if you wish, delete the "OR" at the end of the selection.

Page 1

ANNEXURE - KEY TO CORPORATE GOVERNANCE DISCLOSURES

Corporate Governance Council recommendation

We have followed the recommendation in full for the whole of the period above.

We have NOT followed the recommendation in full

We have disclosed …

for the whole of the period above. We have

disclosed …4

PRINCIPLE 1 - LAY SOLID FOUNDATIONS FOR MANAGEMENT AND OVERSIGHT

1.1

A listed entity should disclose:

… the fact that we follow this recommendation:

☐

an explanation why that is so in our Corporate

(a)

the respective roles and responsibilities of its board and

☒ in our Corporate Governance Statement (Part 2)

☐

Governance Statement OR

management; and

… and information about the respective roles and responsibilities of our board and

we are an externally managed entity and this

(b)

those matters expressly reserved to the board and those

recommendation is therefore not applicable

delegated to management.

management (including those matters expressly reserved to the board and those

delegated to management):

☒ at these locations:

in our Corporate Governance Statement (Part 2) ; and

in our Board Charter (Part 2) - milton.com.au/Shareholders/Charters & Policies

1.2

A listed entity should:

… the fact that we follow this recommendation:

☐

an explanation why that is so in our Corporate

(a)

undertake appropriate checks before appointing a person, or

☒ in our Corporate Governance Statement (Part 5) and

☐

Governance Statement OR

putting forward to security holders a candidate for election,

☒ at these locations:

we are an externally managed entity and this

as a director; and

(b)

provide security holders with all material information in its

in our Board Charter (Part 6) - milton.com.au/Shareholders/Charters & Policies;

recommendation is therefore not applicable

possession relevant to a decision on whether or not to elect

and

or re-elect a director.

in our Nominations Committee Charter -

milton.com.au/Shareholders/Charters & Policies

1.3

A listed entity should have a written agreement with each director

… the fact that we follow this recommendation:

☐

an explanation why that is so in our Corporate

and senior executive setting out the terms of their appointment.

☒ in our Corporate Governance Statement (Part 5) ; and

☐

Governance Statement OR

☒ at this location:

we are an externally managed entity and this

in our Board Charter (Part 6) - milton.com.au/Shareholders/Charters & Policies

recommendation is therefore not applicable

1.4

The company secretary of a listed entity should be accountable

… the fact that we follow this recommendation:

☐

an explanation why that is so in our Corporate

directly to the board, through the chair, on all matters to do with the

☒ in our Corporate Governance Statement (Part 7)

Governance Statement OR

proper functioning of the board.

☐

we are an externally managed entity and this

recommendation is therefore not applicable

4 If you have followed all of the Council's recommendations in full for the whole of the period above, you can, if you wish, delete this column from the form and re-format it.

Page 2

Corporate Governance Council recommendation

We have followed the recommendation in full for the whole of the period above.

We have NOT followed the recommendation in full

We have disclosed …

for the whole of the period above. We have

disclosed …4

1.5

A listed entity should:

… the fact that we have a diversity policy that complies with paragraph (a):

☒an explanation why that is so in our Corporate

(a)

have a diversity policy which includes requirements for the

☐ in our Corporate Governance Statement OR

Governance Statement (Part 6)

board or a relevant committee of the board to set

☐ at [insert location]

measurable objectives for achieving gender diversity and to

assess annually both the objectives and the entity's progress

… and a copy of our diversity policy or a summary of it:

… and a copy of our diversity policy or a summary of

in achieving them;

☐ at [insert location]

it:

(b)

disclose that policy or a summary of it; and

☒ at this location:

… and the measurable objectives for achieving gender diversity set by the board or a

(c)

disclose as at the end of each reporting period the

In our Diversity Policy (Part 2) -

measurable objectives for achieving gender diversity set by

relevant committee of the board in accordance with our diversity policy and our

the board or a relevant committee of the board in accordance

progress towards achieving them:

milton.com.au/Shareholders/Charters & Policies

with the entity's diversity policy and its progress towards

☐ in our Corporate Governance Statement OR

achieving them and either:

☐ at [insert location]

(1) the respective proportions of men and women on the

board, in senior executive positions and across the

… and the information referred to in paragraphs (c)(1) or (2):

whole organisation (including how the entity has defined

☐ in our Corporate Governance Statement OR

"senior executive" for these purposes); or

(2) if the entity is a "relevant employer" under the Workplace

☐ at [insert location]

Gender Equality Act, the entity's most recent "Gender

Equality Indicators", as defined in and published under

that Act.

1.6

A listed entity should:

… the evaluation process referred to in paragraph (a):

☐ an explanation why that is so in our Corporate

(a)

have and disclose a process for periodically evaluating the

☒ in our Performance Evaluation Policy (Part 2) -

Governance Statement OR

performance of the board, its committees and individual

milton.com.au/Shareholders/Charters & Policies; and

☐ we are an externally managed entity and this

directors; and

in our Nomination Committee Charter (Part 2) -

recommendation is therefore not applicable

(b)

disclose, in relation to each reporting period, whether a

milton.com.au/Shareholders/Charters & Policies

performance evaluation was undertaken in the reporting

… and the information referred to in paragraph (b):

period in accordance with that process.

☒ in our Corporate Governance Statement (Part 4)

Page 3

Corporate Governance Council recommendation

We have followed the recommendation in full for the whole of the period above.

We have NOT followed the recommendation in full

We have disclosed …

for the whole of the period above. We have

disclosed …4

1.7

A listed entity should:

… the evaluation process referred to in paragraph (a):

☐ an explanation why that is so in our Corporate

(a)

have and disclose a process for periodically evaluating the

☒ in our Performance Evaluation Policy (Part 2) -

Governance Statement OR

performance of its senior executives; and

milton.com.au/Shareholders/Charters & Policies; and

☐ we are an externally managed entity and this

In our Remuneration Committee Charter (Part 2) -

recommendation is therefore not applicable

milton.com.au/Shareholders/Charters & Policies

(b)

disclose, in relation to each reporting period, whether a

… and the information referred to in paragraph (b):

performance evaluation was undertaken in the reporting

period in accordance with that process.

☒ in our Corporate Governance Statement (Part 4)

Page 4

Corporate Governance Council recommendation

We have followed the recommendation in full for the whole of the period above.

We have NOT followed the recommendation in full

We have disclosed …

for the whole of the period above. We have

disclosed …4

PRINCIPLE 2 - STRUCTURE THE BOARD TO ADD VALUE

2.1

The board of a listed entity should:

[If the entity complies with paragraph (a):]

☐

an explanation why that is so in our Corporate

(a)

have a nomination committee which:

… the fact that we have a nomination committee that complies with paragraphs (1)

Governance Statement OR

(1) has at least three members, a majority of whom are

and (2):

☐

we are an externally managed entity and this

☒ in our Corporate Governance Statement (Part 4) ; and

independent directors; and

recommendation is therefore not applicable

(2) is chaired by an independent director,

In our Nomination Committee Charter (Part 3)

and disclose:

-

milton.com.au/Shareholders/Charters & Policies

(3) the charter of the committee;

… and a copy of the charter of the committee:

(4) the members of the committee; and

☒ at this location:

(5) as at the end of each reporting period, the number of

Nominations Committee Charter

times the committee met throughout the period and

the individual attendances of the members at those

-

milton.com.au/Shareholders/Charters & Policies

meetings; or

(b)

if it does not have a nomination committee, disclose that

… and the information referred to in paragraphs (4) and (5):

fact and the processes it employs to address board

☒ at this location:

succession issues and to ensure that the board has the

appropriate balance of skills, knowledge, experience,

in our Corporate Governance Statement (Part 4) ; and

independence and diversity to enable it to discharge its

in our Annual Report 2020 /Directors Report/Directors Meetings (Page 10)

duties and responsibilities effectively.

2.2

A listed entity should have and disclose a board skills matrix

… our board skills matrix:

☐

an explanation why that is so in our Corporate

setting out the mix of skills and diversity that the board currently

☒ in our Corporate Governance Statement (Part 3)

Governance Statement OR

has or is looking to achieve in its membership.

☐

we are an externally managed entity and this

recommendation is therefore not applicable

2.3

A listed entity should disclose:

… the names of the directors considered by the board to be independent directors:

☐

an explanation why that is so in our Corporate

(a) the names of the directors considered by the board to be

☒ in our Corporate Governance Statement (Part 3)

Governance Statement

independent directors;

☒ in our Corporate Governance Statement (Part 3)

(b) if a director has an interest, position, association or

relationship of the type described in Box 2.3 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

☒ in our Corporate Governance Statement (Part 3)

(c)

the length of service of each director.

Page 5

Corporate Governance Council recommendation

We have followed the recommendation in full for the whole of the period above.

We have NOT followed the recommendation in full

We have disclosed …

for the whole of the period above. We have

disclosed …4

2.4

A majority of the board of a listed entity should be independent

… the fact that we follow this recommendation:

☐

an explanation why that is so in our Corporate

directors.

☒ in our Corporate Governance Statement (Part 3)

☐

Governance Statement OR

we are an externally managed entity and this

recommendation is therefore not applicable

2.5

The chair of the board of a listed entity should be an independent

… the fact that we follow this recommendation:

☐

an explanation why that is so in our Corporate

director and, in particular, should not be the same person as the

☒ in our Corporate Governance Statement (Part 3)

Governance Statement OR

CEO of the entity.

☐

we are an externally managed entity and this

recommendation is therefore not applicable

2.6

A listed entity should have a program for inducting new directors

… the fact that we follow this recommendation:

☐

an explanation why that is so in our Corporate

and provide appropriate professional development opportunities

☒ in our Corporate Governance Statement (Part 5) ;and

Governance Statement OR

for directors to develop and maintain the skills and knowledge

In our Board Charter (Part 6) - milton.com.au/Shareholders/Charters & Policies

☐

we are an externally managed entity and this

needed to perform their role as directors effectively.

recommendation is therefore not applicable

PRINCIPLE 3 - ACT ETHICALLY AND RESPONSIBLY

3.1

A listed entity should:

… our code of conduct or a summary of it:

☐ an explanation why that is so in our Corporate

(a) have a code of conduct for its directors, senior executives

☒ at this location:

Governance Statement

and employees; and

In our Code of Conduct - milton.com.au/Shareholders/Charters & Policies

(b) disclose that code or a summary of it.

Page 6

Corporate Governance Council recommendation

We have followed the recommendation in full for the whole of the period above.

We have NOT followed the recommendation in full

We have disclosed …

for the whole of the period above. We have

disclosed …4

PRINCIPLE 4 - SAFEGUARD INTEGRITY IN CORPORATE REPORTING

4.1

The board of a listed entity should:

[If the entity complies with paragraph (a):]

☐ an explanation why that is so in our Corporate

(a) have an audit committee which:

the fact that we have an audit committee that complies with paragraphs (1) and (2):

Governance Statement

(1) has at least three members, all of whom are non-

☒ in our Corporate Governance Statement (Part 4) ; and

executive directors and a majority of whom are

In our Audit & Risk Committee Charter (Part 3)-

independent directors; and

milton.com.au/Shareholders/Charters & Policies

(2) is chaired by an independent director, who is not the

chair of the board,

… and a copy of the charter of the committee:

and disclose:

☒ at this location:

(3) the charter of the committee;

In our Audit & Risk Committee Charter -

(4) the relevant qualifications and experience of the

milton.com.au/Shareholders/Charters & Policies

members of the committee; and

(5) in relation to each reporting period, the number of

… and the information referred to in paragraphs (4) and (5):

times the committee met throughout the period and

☒in our Corporate Governance Statement (Part 3) ; and

the individual attendances of the members at those

☒ at this location:

meetings; or

(b) if it does not have an audit committee, disclose that fact

Annual Report 2020 /Directors Report / Directors Meetings (Page 10)

and the processes it employs that independently verify and

safeguard the integrity of its corporate reporting, including

the processes for the appointment and removal of the

external auditor and the rotation of the audit engagement

partner.

4.2

The board of a listed entity should, before it approves the entity's

… the fact that we follow this recommendation:

☐

an explanation why that is so in our Corporate

financial statements for a financial period, receive from its CEO

☒ in our Corporate Governance Statement (Part 9) ; and

and CFO a declaration that, in their opinion, the financial records

Governance Statement

In our Risk Management Policy (Part 2) -

of the entity have been properly maintained and that the financial

statements comply with the appropriate accounting standards

milton.com.au/Shareholders/Charters & Policies

and give a true and fair view of the financial position and

performance of the entity and that the opinion has been formed

on the basis of a sound system of risk management and internal

control which is operating effectively.

Page 7

Corporate Governance Council recommendation

We have followed the recommendation in full for the whole of the period above.

We have NOT followed the recommendation in full

We have disclosed …

for the whole of the period above. We have

disclosed …4

4.3

A listed entity that has an AGM should ensure that its external

… the fact that we follow this recommendation:

☐

an explanation why that is so in our Corporate

auditor attends its AGM and is available to answer questions

☒ at this location:

from security holders relevant to the audit.

☐

Governance Statement OR

In our Audit & Risk Committee Charter (Part 2) -

we are an externally managed entity that does

milton.com.au/Shareholders/Charters & Policies

not hold an annual general meeting and this

recommendation is therefore not applicable

PRINCIPLE 5 - MAKE TIMELY AND BALANCED DISCLOSURE

5.1

A listed entity should:

… our continuous disclosure compliance policy or a summary of it:

☐

an explanation why that is so in our Corporate

(a) have a written policy for complying with its continuous

☒ in our Corporate Governance Statement (Part 8) ; and

Governance Statement

disclosure obligations under the Listing Rules; and

In our Disclosure Policy (Part 1) -

(b) disclose that policy or a summary of it.

milton.com.au/Shareholders/Charters & Policies

PRINCIPLE 6 - RESPECT THE RIGHTS OF SECURITY HOLDERS

6.1

A listed entity should provide information about itself and its

… information about us and our governance on our website:

☐

an explanation why that is so in our Corporate

governance to investors via its website.

☒ at this location:

Governance Statement

milton.com.au/Shareholders/Corporate Governance

6.2

A listed entity should design and implement an investor relations

… the fact that we follow this recommendation:

☐

an explanation why that is so in our Corporate

program to facilitate effective two-way communication with

☒ at this location:

investors.

Governance Statement

In our Communication Policy (Part3) -

milton.com.au/Shareholders/Charters & Policies

6.3

A listed entity should disclose the policies and processes it has in

… our policies and processes for facilitating and encouraging participation at

☐

an explanation why that is so in our Corporate

place to facilitate and encourage participation at meetings of

meetings of security holders:

security holders.

☒ at this location:

☐

Governance Statement OR

we are an externally managed entity that does

In our Communication Policy (Part 4) -

not hold periodic meetings of security holders

milton.com.au/Shareholders/Charters & Policies

and this recommendation is therefore not

applicable

Page 8

Corporate Governance Council recommendation

We have followed the recommendation in full for the whole of the period above.

We have NOT followed the recommendation in full

We have disclosed …

for the whole of the period above. We have

disclosed …4

6.4

A listed entity should give security holders the option to receive

… the fact that we follow this recommendation:

☐

an explanation why that is so in our Corporate

communications from, and send communications to, the entity

☒ at this location:

and its security registry electronically.

Governance Statement

In our Communication Policy (Part 3) -

milton.com.au/Shareholders/Charters & Policies

PRINCIPLE 7 - RECOGNISE AND MANAGE RISK

7.1

The board of a listed entity should:

[If the entity complies with paragraph (a):]

☐

an explanation why that is so in our Corporate

(a) have a committee or committees to oversee risk, each of

… the fact that we have a committee or committees to oversee risk that comply with

paragraphs (1) and (2):

Governance Statement

which:

(1) has at least three members, a majority of whom are

☒ in our Audit & Risk Committee Charter (Part 3) -

independent directors; and

milton.com.au/Shareholders/Charters & Policies

(2) is chaired by an independent director,

and disclose:

… and a copy of the charter of the committee:

(3) the charter of the committee;

☒ at this location:

(4) the members of the committee; and

In our Audit & Risk Committee Charter -

(5) as at the end of each reporting period, the number of

times the committee met throughout the period and

milton.com.au/Shareholders/Charters & Policies

the individual attendances of the members at those

… and the information referred to in paragraphs (4) and (5):

meetings; or

☒in our Corporate Governance Statement (Part 4)

☒ at this location:

(b) if it does not have a risk committee or committees that

Annual Report 2020 /Directors Report/Directors Meetings (Page 10)

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:

… the fact that we follow this recommendation:

☐

an explanation why that is so in our Corporate

(a) review the entity's risk management framework at least

☒in our Corporate Governance Statement (Part 9) ; and

Governance Statement

annually to satisfy itself that it continues to be sound; and

(b) disclose, in relation to each reporting period, whether such

In our Risk Management Policy (Part 2) -

milton.com.au/Shareholders/Charters & Policies

a review has taken place.

☒ at this location:

In our Corporate Governance Statement (Part 4)

Page 9

Corporate Governance Council recommendation

We have followed the recommendation in full for the whole of the period above.

We have NOT followed the recommendation in full

We have disclosed …

for the whole of the period above. We have

disclosed …4

7.3

A listed entity should disclose:

[If the entity complies with paragraph (b):]

☐

an explanation why that is so in our Corporate

(a) if it has an internal audit function, how the function is

… the fact that we do not have an internal audit function and the processes we

employ for evaluating and continually improving the effectiveness of our risk

Governance Statement

structured and what role it performs; or

management and internal control processes:

(b) if it does not have an internal audit function, that fact and

☒ in our Corporate Governance Statement (Part 9) ; and

the processes it employs for evaluating and continually

improving the effectiveness of its risk management and

In our Risk Management Policy (Part 2) -

internal control processes.

milton.com.au/Shareholders/Charters & Policies

7.4

A listed entity should disclose whether it has any material

… whether we have any material exposure to economic, environmental and social

☐

an explanation why that is so in our Corporate

exposure to economic, environmental and social sustainability

sustainability risks and, if we do, how we manage or intend to manage those risks:

risks and, if it does, how it manages or intends to manage those

☒ in our Corporate Governance Statement (Part 9)

Governance Statement

risks.

Page 10

Corporate Governance Council recommendation

We have followed the recommendation in full for the whole of the period above.

We have NOT followed the recommendation in full

We have disclosed …

for the whole of the period above. We have

disclosed …4

NCIPLE 8 - REMUNERATE FAIRLY AND RESPONSIBLY

8.1

The board of a listed entity should:

[If the entity complies with paragraph (a):]

☐

an explanation why that is so in our Corporate

(a) have a remuneration committee which:

… the fact that we have a remuneration committee that complies with paragraphs (1)

Governance Statement OR

(1)

has at least three members, a majority of whom are

and (2):

☐

we are an externally managed entity and this

☒ in our Corporate Governance Statement (Part 4) ; and

independent directors; and

(2)

is chaired by an independent director,

In our Remuneration Committee Charter (Part 3) -

recommendation is therefore not applicable

and disclose:

milton.com.au/Shareholders/Charters & Policies

(3)

the charter of the committee;

… and a copy of the charter of the committee:

(4)

the members of the committee; and

☒ at this location:

(5)

as at the end of each reporting period, the number of

In our Remuneration Committee Charter -

times the committee met throughout the period and

the individual attendances of the members at those

milton.com.au/Shareholders/Charters & Policies

meetings; or

… and the information referred to in paragraphs (4) and (5):

☒in our Corporate Governance Statement (Part 4) ; and

☒ at this location:

Annual Report 2020 /Directors Report/Directors Meetings (Page 10)

  1. 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

… separately our remuneration policies and practices regarding the remuneration of

☐

an explanation why that is so in our Corporate

practices regarding the remuneration of non-executive directors

non-executive directors and the remuneration of executive directors and other senior

and the remuneration of executive directors and other senior

executives:

☐

Governance Statement OR

executives.

☒ at this location:

we are an externally managed entity and this

Annual Report 2020 /Remuneration Report (Pages 12-18)

recommendation is therefore not applicable

Page 11

Corporate Governance Council recommendation

We have followed the recommendation in full for the whole of the period above.

We have NOT followed the recommendation in full

We have disclosed …

for the whole of the period above. We have

disclosed …4

8.3

A listed entity which has an equity-based remuneration scheme

… our policy on this issue or a summary of it:

☐

an explanation why that is so in our Corporate

should:

☒ at this location:

(a) have a policy on whether participants are permitted to

☐

Governance Statement OR

Annual Report 2020 /Remuneration Report (Pages 12-18)

we do not have an equity-based remuneration

enter into transactions (whether through the use of

derivatives or otherwise) which limit the economic risk of

scheme and this recommendation is therefore

participating in the scheme; and

☐

not applicable OR

(b) disclose that policy or a summary of it.

we are an externally managed entity and this

recommendation is therefore not applicable

Page 12

CORPORATE GOVERNANCE STATEMENT

The directors of Milton consider sound corporate governance practices promote behaviour that is in the best interests of the company and is likely to assist in the delivery of increasing returns to shareholders over the long term.

This statement details the corporate governance framework put in place by the board of directors to promote sound management of the company. Ultimately the board is responsible for the operational and financial performance of the company.

This statement has been approved by the board of directors and is current as at 6 August 2020.

1. Corporate structure

The chart below shows the corporate structure that has been established by the board.

Board of directors

Committees

Managing

Director

Audit & Risk

Investment

Remuneration

Nomination

Investment

CFO and

Company

executives

secretary

2. Responsibilities

The board operates in accordance with its Board Charter which includes the responsibilities specifically reserved for the board, the board's composition and how it is to operate.

The board's responsibilities are:

  • Defining Milton's purpose and setting its corporate objective;
  • Approving the investment philosophy and corporate strategy;
  • Approving Milton's statement of values and code of conduct;
  • Oversee management in its implementation of Milton's corporate objective, instilling of the company's values and performance;
  • Approving the business plan and budget;
  • Approving the financial reports, shareholder communications and other public documents;
  • Declaring dividends;
  • Capital management including approval of all share issue offers such as the share purchase plan and dividend reinvestment plan and as consideration for company acquisitions;
  • Approving portfolio movement recommendations above pre set limits;
  • Reviewing of the internal control systems and satisfying that Milton has in place an appropriate risk management framework and setting the risk appetite within which the board expects management to operate;
  • Monitoring the effectiveness of the corporate governance practices;
  • Appointment of the chair;
  • Reviewing the performance of management and the Board itself;
  • Approving the remuneration of the senior executives;
  • Approving the appointment of senior executives; and
  • Making recommendations regarding the election of directors.

Day-to-day management of the company's affairs and the implementation of strategy and policy initiatives are formally delegated by the board to the chief executive.

3. Board composition and independence

The board comprises a majority of independent directors and currently there are five non executive and the managing director.

All of the non executive directors are considered to be independent. Each year the board formally considers the independence of directors taking into account length of service and any other factors that may compromise their exercise of independent judgement. All non executive directors are required to advise the board of any change in circumstances which may affect their independence.

The board is of the opinion that the independence of long serving directors, Messrs R.D. Millner and Dr. I.A. Pollard, has not been impeded and they continue to represent all shareholders. As a long term investor Milton benefits from their experience and corporate knowledge they have gained whilst being a director of Milton.

In accordance with the Corporations Act 2001, any director who has an interest of any kind in relation to any matter dealt with at a board or committee meeting is required to advise the meeting and abstain from participation in the decision process.

The names of the current directors, the date of their appointment and their qualifications are set out below.

Name of Director

Length of service

Qualifications

as at 30 June 2020

Non executive and independent

Mr. Robert D. Millner

21 years 11 months

FAICD

Mr.Graeme L. Crampton

11 years 1 month

B.Ec, FCA, FAICD

Mr. Kevin J. Eley

8 years 7 months

CA, F Fin, FAICD

Dr. Ian A. Pollard

21 years 11 months

BA (Macq), MA (Oxon), D Phil (IMC), FIAA,

FAICD

Ms. Justine E. Jarvinen

2 Years 11 months

BE (Chem), F Fin, GAICD

Executive and non independent

Mr. Brendan O'Dea

1 year 11 months

B.Ec. M.Bus, CA, MAICD

All board members are well qualified and highly experienced in their respective fields. Collectively the board has extensive experience in:

  • Investment management;
  • Industries such as banking, insurance, retail, mining, primary production, telecommunications, energy, engineering and utilities;
  • Corporate strategy;
  • Finance, accounting and tax;
  • Disruptive technology;
  • Governance and risk management; and
  • Mergers and acquisitions

4. Committees

The board has established committees to assist it in carrying out its responsibilities. The roles and responsibilities of these committees have been approved by the board and are detailed in their charters which are available on Milton's web site.

Audit & Risk Committee:

The Audit & Risk Committee, consisting of at least three independent directors, reviews the effectiveness of the risk management and internal controls, the reliability of financial information and the appointment and effectiveness of the external auditor. The committee for the 2019/20 year comprised of Mr. K.J Eley, Dr. I.A. Pollard and chaired by Mr. G.L. Crampton.

To assist in this function, the committee may invite the external auditor and senior executives to report to meetings. Any significant non-audit services to be provided by the external auditors must be approved in advance by the Audit & Risk Committee. The Audit & Risk Committee considers that the provision of those non-audit services provided to date by the external auditor would not affect the auditor's independence.

The latest review of the risk management framework and internal control systems and processes in relation to the 2019/20 financial year was carried out by the Audit & Risk Committee in June 2020.

Investment Committee:

The Investment Committee, consisting of three independent directors and the managing director meets regularly to review the investment portfolio, to consider management's recommendations and to make investment decisions within defined limits. The committee consists of Mssrs. R.D. Millner, K.J. Eley, B. O'Dea and Ms. J.E. Jarvinen. All directors may attend the Investment Committee meetings. The defined limits are reviewed by the board from time to time.

Nomination Committee:

The Nomination Committee consists of those directors who are not retiring and seeking re-election. The committee for 2019/20 financial year consists of Messrs. R.D. Millner, G.L. Crampton, K.J. Eley, B. O'Dea and Dr. I.A. Pollard. The Committee is chaired by Mr. R.D. Millner who is an independent director. Ms. J.E. Jarvinen who is due to retire in accordance with the company's constitution will be standing for re-election at the next annual general meeting to be held in October 2020.

All non-executive directors are subject to re-election at least every three years. The Nominations Committee reviews the composition of the board annually and makes recommendations on the appropriate skill mix, personal qualities, expertise and diversity. The committee also makes recommendations to the board regarding the election of directors by shareholders.

The Nominations Committee is also responsible for conducting the annual review of the performance of the board as a whole and its committees in accordance with Milton's Performance Evaluation policy. The latest such performance review was conducted by the Nominations Committee in June 2020.

Remuneration Committee:

The Remuneration Committee consists of three independent directors including the Chairman. The committee for 2019/20 financial year consists of Mssrs. R.D. Millner (Chair), G.L. Crampton and Dr. I.A. Pollard.

The committee formally reviews the performance of the managing director and each year it makes specific recommendations to the board on remuneration packages and other terms of employment for senior executives and directors.

The latest performance reviews of the managing director and senior executives were conducted in June 2020.

5. Director Appointment and induction

The board is responsible for the selection and appointment of new directors after the appropriate background checks have been made.

All directors are subject to re-election at least every three years. Any director (except the Managing Director) who has been appointed during the year must stand for election at the next annual general meeting (AGM).

In accordance with Milton's induction programme new directors are provided with a formal letter of Appointment, Deed of Indemnity, Insurance and Access agreement, Constitution, Corporate Governance Statement and related charters and policies. Milton has written agreements with each of its directors which detail their terms of appointment.

New directors are encouraged to meet with management and attend all committee meetings to develop a deep understanding of the operation of the company.

Ongoing director professional development is facilitated through regular management presentations on key business functions as well as statutory and regulatory updates. Services of external consultants are engaged to cover specific topics of interest as and when required.

Independent professional advice may be sought by a director at Milton's expense with the prior approval of the chairman. A copy of advice received by the director is made available to the chairman to be dealt with at his discretion.

6. Diversity

The board has established a diversity policy, which is available on Milton's website.

The policy acknowledges the advantages of gender diversity as well as diversity of age and skills.

The key element of the diversity policy is that Milton will seek the best person with the appropriate characteristics that is available for the position and will not discriminate against candidates on the grounds of gender, age, ethnicity or cultural background.

In relation to the appointment of each new director, the board will consider a broad range of candidates and seek to appoint the person that would best complement the collective skills, experience and diversity of the current directors.

Milton is committed to have an inclusive workplace and hence discrimination, harassment, vilification and victimisation are not tolerated.

Milton considers gender diversity whenever the opportunity arises and appointment of a director will always be based on the relative merits of the candidates. At the time of this report, there were four male non-executive directors and one female non-executive director.

Milton has diversity amongst its employees with women representing 50% of total employees and 40% of senior executives. Senior executive positions at Milton include CEO, CFO and three investment managers responsible for making investment portfolio recommendations. The team members have different backgrounds, age and experience.

7. Company Secretary

Mr. Nishantha Seneviratne is the Company Secretary and Chief Financial Officer of Milton having overall responsibility for company secretarial, finance and governance functions.

The Company Secretary is directly accountable to the Board, through the Chair on all matters relating to the proper functioning of the Board.

8. Continuous disclosure and shareholder communication

The Company Secretary has been nominated as the person responsible for communications with the ASX. This role includes responsibility for ensuring compliance with the continuous disclosure requirements in the ASX listing rules.

The board reviews and approves all announcements to the ASX, except for the monthly net asset backing announcements which are reviewed by the chief financial officer and the managing director.

Where the company gives any new and substantive investor or analyst presentation, the company must release a copy of the presentation material on the ASX market announcement Platform ahead of the presentation.

Milton has established a website to enhance communication with its shareholders and potential investors. The website contains historical information, copies of all information disclosed to the ASX and a corporate governance section that includes details of the various committee charters and policies. Shareholders, who have advised Milton of their email addresses, are notified by email of all announcements to the ASX. The Milton communications policy is available on Milton's website.

9. Risk management

The managing director and chief financial officer report annually to the Audit & Risk Committee on Milton's risk management system.

A written declaration in relation to the 2019/20 financial year has been provided to the board by the managing director and chief financial officer stating that, in their opinion, the financial records of Milton have been properly maintained and that the financial statements comply with the appropriate accounting standards and give a true and fair view of the financial position and performance of Milton and that the opinion has been formed on the basis of a sound system of risk management and internal controls which is operating effectively.

The board considers an internal audit function is not necessary due to the nature and size of Milton's operations. The external auditors report to the Audit & Risk Committee on risk management issues identified during the course of the audit. The risk management policy is available on Milton's website.

Milton is not directly exposed to material environmental and social sustainability risks. However, Milton may have indirect exposure through its investments in companies that have material exposure to such risks. Milton regularly evaluates its overall risks of its existing investments as well as potential investments. Assessment of economic, environmental and social sustainability risks of companies in which Milton invests forms part of Milton's overall evaluation of performance of its investments.

10. Trading policy in relation to listed securities

Milton has developed a trading policy to ensure directors and employees comply with insider trading provisions of the Corporations Act and to avoid the risk they are perceived to have traded while in the possession of insider information.

The trading policy is provided to all directors and employees so that they are aware of the restrictions that apply to them in relation to their dealing in securities.

The trading policy is available on the Milton webpage at www.milton.com.au/governance

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Milton Corporation Limited published this content on 07 August 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 07 August 2020 01:43:06 UTC