2.1 The Board is responsible for the stewardship of the affairs of e-pay asia, including:

• Financial strategic objectives.
• Evaluating, approving and monitoring the strategic and financial plans of e-pay asia.
• Evaluating, approving and monitoring the annual budgets and business plans.
• Evaluating, approving and monitoring major capital expenditure, capital management and all major corporate transactions, including the issue of securities of e-pay asia.
• Approving financial reports and material reporting matters.

2.2 Executive management

Appointing, monitoring, managing the performance of, and if necessary terminating (the employment of) the chief executive officer.  Consistent with the obligation to monitor the chief executive officer, the Board has identified the role and responsibilities of the chief executive officer as described in section 4.4 and 4.5.  The Board will consider this job description and the chief executive officer’s authorities and accountabilities, as well as performance indicators to provide monitoring benchmarks.

Managing succession planning for the position of chief executive officer, chief financial officer, and others.  It is envisaged that this would involve working with the chief executive officer to identify the requirements for critical positions and individuals that can fill those positions on both an emergency basis and over the longer term.

Overseeing and ratifying the appointment and termination of employment of the chief financial officer.

Ratifying the terms of appointment of senior management, including in relation to the terms of equity remuneration.

2.3 Risk management

• Monitoring e-pay asia’s performance in relation to principles of best practice corporate governance as identified and resolved by the Board.
• Approving and monitoring e-pay asia’s risk management framework.
• Approving and monitoring compliance with e-pay asia’s key corporate policies and protocols.
• Monitoring e-pay asia’s operations in relation to, and compliance with relevant regulatory requirements, including ASX, AIM, Australian Corporations Act and Malaysian Companies Act.

2.4 Guidelines for risk management and strategic planning

The Board will be actively and regularly involved in risk management and strategic planning.  The intention of the Board is that these functions will be closely integrated.  Strategic planning will be based on the identification of opportunities and the full range of business risks that will determine which of those opportunities are most worth pursuing.  The Board recognises that strategic planning is an ongoing process that must be responsive to changes in the external environment and internal developments.

The Board’s involvement in strategic planning and the monitoring of risks does not mean the Board intends to manage the business, but it recognises the Board is responsible for overseeing management and holding it to account.

The Board will oversee the process that management has in place to identify business opportunities and risks.

The Board will consider the extent and types of risk that are acceptable for e-pay asia to bear.

The Board will monitor managements systems and processes for managing a broad range of business risks.

The Board will, on an ongoing basis, review with management how the strategic environment is changing, what key business risks and opportunities are appearing, how they are being managed and what, if any, modifications in strategic direction should be adopted.

The Board intends to benchmark its activities regarding corporate governance against the following criteria for ongoing assessment:

2.5 Reporting
The Board must supervise the Audit Committee’s recommended disclosure in the annual report and report publicly any departures from the ASX best practice recommendations and any publicly available information about e-pay asia’s policies.

Any decision to deviate from the best ASX practice recommendations must be recommended by the relevant committee and approved by a resolution of the Board. The nominated adviser (“Nomad”) should be consulted if such a proposition in put forward.

e-pay asia will, where appropriate, include an appropriate statement regarding departures from ASX and/or AIM best practice recommendations in the annual report.

The Board via the Disclosure Committee, will supervise the public disclosure of all matters that the ASX and/or AIM best practice recommendations recommend be publicly disclosed consistent with the Disclosure policy and will provide a commentary on any Board decision not to make such disclosure or to clarify what disclosure has been made. The Disclosure Committee will consult with the Nominated Adviser in respect of disclosures they intend to make or in the event they decide not to make a disclosure.

Consistent with its commitment to best practice corporate governance, e-pay asia recognises the importance of the office of chairman and the office of chief executive officer of e-pay asia.

e-pay asia recognises that it is important that the chairman and the chief executive officer have defined roles in the organisation and function in accordance with clear functional lines.

In accordance with clause 11.6.2 of the constitution, the Board has resolved to appoint a chairman and determine the period for which he or she holds office.

The chairman will be selected on the basis of relevant experience, skill and leadership abilities that the Board recognises from time to time.  The Board at the first board meeting following the annual general meeting will consider the position of chairman.

The chairman will:

• chair board meetings;
• establish the agenda for board meetings, in consultation with the chief executive officer and company secretary;
• chair meetings of members, including the annual general meeting of e-pay asia;
• chair the Nomination Committee, be a member of the Audit and Remuneration Committees and sit on other committees as agreed with the rest of the Board;
• be the primary spokesperson for e-pay asia at the annual general meeting.  The chairman and the chief executive officer will agree between themselves as to their respective roles in relation to all meetings (formal and informal) with shareholders and all public relations activities;
• in conjunction with/in consultation with the chief executive officer and the Nominated Adviser, approve and/or delegate authority for the approval of all material ASX, AIM and other investor and shareholder releases;
• be the primary channel of communication and point of contact between the Board (and the directors) and the chief executive officer;
• be kept fully informed by the chief executive officer of all material matters which may be relevant to directors, in their capacity as directors of e-pay asia;
• in conjunction with the chief executive officer and other appropriate members of senior management, review all matters material to the interests of e-pay asia;
• provide guidance and mentoring to the chief executive officer;
• chair the chief executive officer evaluation process through the Nomination and/or Remuneration Committee;
• ensure the annual process of Board evaluation is conducted;
• ensure non-executive directors are made aware of significant emerging issues of which the Chairman is aware.
• approve all Director dealing in e-pay asia’s securities.

The chief executive officer has primary responsibility to the Board for the affairs of e-pay asia.

The Board appoints the chief executive officer to manage the business on its behalf (and shareholders) and must delegate sufficient powers to allow him or her to manage effectively.  The chief executive officer must carry out the objectives of the Board in accordance with its instructions, and report to the Board all matters the chief executive officer considers to be material to the affairs of e-pay asia.

The chief executive officer will:

• develop with the Board, implement, monitor and report on the strategic and financial plans for e-pay asia;
• develop, implement, monitor and report on the annual budgets and business plans;
• plan, implement, monitor and report on all major capital expenditure, capital management and all major corporate transactions, including the issue of any securities of e-pay  asia;
• develop all financial reports, and all other material reporting and external communications by e-pay asia, including material announcements and disclosures, in accordance with e-pay asia’s external communications policy;
• manage the appointment of the chief financial officer, company secretary and any other senior management positions;
• develop, implement, monitor and report on e-pay asia’s risk management framework;
• consult with the chairman and the company secretary in relation to establishing the agenda for Board meetings;
• agree with the chairman their respective roles in relation to all meetings (formal and informal) with shareholders and all public relations activities;
• in conjunction with/in consultation with the chairman, approve and/or delegate authority for the approval of all material ASX and AIM releases, and other investor and shareholder releases;
• be the primary channel of communication and point of contact between senior management and the Board (and the directors);
• keep the chairman fully informed of all material matters which may be relevant to the Board, in their capacity as directors of e-pay asia;
• in conjunction with the chairman and other appropriate members of senior management, review all matters material to the interests of e-pay asia;
• provide strong leadership to, and effective management of, e-pay asia in order to:

• ensure a safe workplace for all personnel, including for contractors and consultants;
• ensure that e-pay asia has regard to the interests of employees and customers of the company and the community and environment in which the company operates; and
• otherwise carry out the day-to-day management of e-pay asia.

The delegation of authority to the chief executive officer is subject to the limits determined by the Board.

The chief executive officer is formally delegated by the Board to authorise all expenditure as approved in the budget, provided that capital expenditure in excess of $500,000 must be approved by the Board and all payments to the chief executive officer, outside of normal agreed monthly remuneration, must be authorised by the chairman and subsequently ratified by the Board.

• conduct his or her duty at the highest level of honesty and integrity, recognising that integrity is the benchmark against which the chief financial officer must conduct all decision making;
• observe the rule and the spirit of the law and comply with any relevant ethical and technical standard;
• maintain the confidentiality of all information acquired in the course of conducting the role and not make improper use of, or disclose to third parties, any confidential information unless that disclosure has been authorised by the Board, or is required by law or by the ASX Listing Rules and/or AIM Rules;
• observe the principles of independence, accuracy and integrity in dealings with the Board, Audit Committees, external auditors and other senior managers within e-pay asia;
• disclose to the Board any actual or perceived conflicts of interest, whether of a direct or indirect nature of, which the chief financial officer becomes aware and which the chief financial officer reasonably believes may compromise the reputation or performance of e-pay asia;
• maintain transparency in the preparation and delivery of financial information to both internal and external users;
• exercise diligence, skill and good faith in the preparation of financial information and ensure that such information is accurate, timely and represents a true and fair view of the financial performance and condition of e-pay  asia and complies with all relevant legislative requirements;
• ensure the maintenance of a sound system of internal controls to safeguard e-pay asia’s assets and manage risk exposure through appropriate forms of risk control;
• set a standard of honesty, fairness, integrity, diligence and competency in respect of the position of chief financial officer; and
• observe, develop and implement the principles of this charter in a conscientious, consistent and rigorous manner.

The new standards of independence in Australia, UK and overseas that will impact on the perception of who can be characterised as an independent non-executive director. The following questions have been adopted by e-pay asia to assist in defining independence. However, e-pay asia is not proposing to adopt hard and fast "set and forget" rules.

As a general principle each director must bring an enquiring, open and independent mind to board meetings, listen to the debate on each issue raised, consider the arguments for and against each motion and reach a decision that he or she believes, to be in the best interests of e-pay asia as a whole free of any actual or possible conflict of interest and consistent with the Directors’ code of conduct.

If the Board determines that a director might be in a position where there is a reasonable possibility of conflict between his or her personal or business interests, the interests of any associated person, or his or her duties to any other company, on the one hand, and the interests of e-pay asia or his or her duties to e-pay asia, on the other hand, the Board will require that the director:

fully and frankly informs the Board about the circumstances giving rise to the conflict; and

abstains from voting on any motion relating to the matter and absenting himself or herself from all board deliberations relating to the matter including receipt of board papers bearing on the matter.

If the Board resolves to permit a director to have any involvement in a matter involving possible circumstances of conflicting interests, the Board must minute full details of the basis of the determination and the nature of the conflict, including a formal resolution concerning the matter.

If a director believes that he or she may have a conflict of interest or duty in relation to a particular matter, the director should immediately consult with the chairman.

The company secretary will maintain a register of all possible conflict of interest situations.

Directors should ordinarily receive board papers and related material not later than five days prior to the relevant meeting.

The chairman of the meeting should ensure the availability and, if necessary, the attendance at the relevant meeting, of any member of executive management responsible for a matter included as an agenda item at the relevant meeting.
The non-executive directors will meet from time to time to conduct a non-executive discussion of board and management issues.  These meetings are to be used to provide feedback about board processes, including the adequacy and timeliness of information being provided to the Board.  At times these meetings may focus on substantive issues that some board members may prefer to discuss without management present.  These meetings may also discuss areas where the performance of independent directors could be strengthened.
Any issues arising from these meetings that bear on the relationship between the Board and management will be communicated quickly and directly to the chief executive officer by the chairman.

The Corporations Act 2001 allows the directors to delegate their powers regarding financial matters to the Audit Committee.  This charter relies on those delegation powers as specific authority for the rest of the Board to rely reasonably on information or advice provided to the Board by its various committees, to assist the Board in the discharge of its responsibilities (either in whole, or in conjunction with the Board).  The Board has established the following committees:

The committee is designed to consider specific matters and make recommendations to the Board.  However, it is not intended that the committee restrict the ability of the Board to make an independent assessment of the recommendations, having regard to the Board’s knowledge of e-pay asia and the complexity of the structures and operations of e-pay asia.  The Board will consider the materials and recommendations presented to them and bring their own mind to bear on the issue using the skill and judgment they possess.

The Board will consider and approve the charters of the committee.

The Board will receive copies of committee papers / minutes / agendas in respect of each committee and all non-executive directors may attend meetings of committees of which they are not members.

The committee has the discretion to invite members of management to the committee meetings and may delegate tasks to management where appropriate.

Any director may communicate directly with employees of e-pay  asia but such communications are to be made having regard to the efficient operation of e-pay  asia and the need to preserve and maintain an effective chain of command and the confidentiality of the Board’s deliberations.

Where individual directors wish to communicate with executive management or with other employees or representatives of e-pay asia in relation to company business, all communications can be direct.  All communications of a material or sensitive nature must be facilitated by the chairman.

a director must seek the prior approval of the chairman;

in seeking the prior approval of the chairman, the director must provide the chairman with details of:

-   the nature of the independent professional advice;
-   the likely cost of seeking the independent professional advice; and
-   details of the independent adviser he or she proposes to instruct.    

the chairman may prescribe a reasonable limit on the amount that e-pay asia will contribute towards the cost of obtaining such advice;

the chairman must approve of the independent adviser nominated by the director;

all documentation containing or seeking independent professional advice must clearly state that the advice is sought both in relation to e-pay asia and to the director in his or her personal capacity.  However, the right to advice does not extend to advice concerning matters of a personal or private nature, including for example, matters relating to the director’s contract of employment with e-pay  asia (in the case of an executive director) or any dispute between the director and e-pay  asia;

the chairman may determine that any advice received by an individual director will be circulated to the remainder of the Board.

Subject to the relevant provisions in e-pay asia’s Constitution, the level of non-executive director and chief executive officer remuneration will be set by the Remuneration Committee so as to attract the best candidates for the Board while maintaining a level commensurate with boards of similar size and type.

In line with e-pay asia’s desire to maintain director independence, each director is permitted to deal in personal securities of e-pay asia in accordance with the Securities trading policy.

The Board believes that regular assessment of the Board's effectiveness and the contribution of individual directors is essential to improve governance of e-pay asia.

At least once in each financial year, the Board must complete/facilitate the completion of a performance evaluation.
The focus of the evaluation will be on how performance can be made more meaningful in setting and achieving goals that add value.  The results will be internal to the Board, but disclosure will be made in the annual report and e-pay asia’s website that such evaluations are undertaken.

The Board will determine the manner and form of the performance evaluation.

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[1] Substantial shareholder is defined for this purpose as holding 5% or more of the issued shares

The Committee shall develop and implement a system approved by the Board for the assessment, monitoring and overall management of identified internal and external risks.  The Board is responsible for establishing the Committee, appointing Committee members and overseeing its activities.

The Committee’s responsibilities shall include e-pay asia’s internal control environment, and ensuring that the Company has an integrated framework of internal compliance and controls based on formal procedures and appropriate delegation of authority and responsibility.

The key function of the Committee is to identify and more importantly prioritise risk arising from business strategies and activities and ensure that appropriate risk management controls are implemented and are effective.

Risk monitoring and assessment activities will be designed to reduce, or otherwise manage, risk to levels that are acceptable to the Company. 

The Committee provide periodic reports of the results of the risk management process to the Board and management. 

In particular the Committee will:

• review previous risk evaluation reports by management, external auditors;
• ensure that e-pay asia has a clear policy and procedure for reporting, acting upon and documenting breaches of laws, including fraud and theft;
• compile information to evaluate the effectiveness of risk litigation monitoring and communication of risks;
• review the adequacy and timeliness of recording of risk management results;
• review the completeness of management’s risk analysis and actions taken to remedy issues raised by the risk management process;
• determine the effectiveness of management self-assessment process;
• review risk related issues that may indicate weakness in risk management practices;
• formulate procedures for use in assessing and monitoring and responding to risk.
• At least annually, the Board will review the effectiveness of the implementation of the risk management system, including all financial and non financial internal and external risks that face e-pay asia.

The Board will appoint the members of the Committee with due regard to the provisions of the Corporations Act 2001.

• any possible material personal interest he or she may have in the subject matter;
• the amount of information appropriate to properly consider the subject matter; and
• what is in the best interests of e-pay asia.

• understanding the laws and regulations relevant to their work; and
• complying with those legal requirements.

The Corporations Act 2001, AIM Rules, Financial Services and Markets Act 2000 make it unlawful to deal in the shares of a company while in possession of material information about e-pay asia which has not become public.

Key employees in possession of information concerning e-pay asia that is not generally available, and which a reasonable person would expect to have a effect on the share price are prohibited from buying, selling or otherwise dealing in e-pay asia’s shares. It is also unlawful in those circumstances to encourage someone else to deal in e-pay asia’s shares or to pass the information to someone who may use the information to buy or sell e-pay asia’s shares. The penalties for insider trading are severe and can include imprisonment.

The Securities trading policy of the e-pay asia provides guidelines and prohibitions relating to the trading of e-pay asia’s securities. The general scheme of the Securities trading policy regarding allowable dealings by key employees and directors in e-pay asia’s securities is that personnel should:

• never engage in short term trading of e-pay asia’s securities;
• not deal in the e-pay asia’s securities while in possession of unpublished price sensitive information; and
• notify the company secretary of any material intended transactions involving the e-pay asia’s securities.

In addition, as a general rule, key employees should only buy or sell e-pay asia’s securities during the allowable trading window, i.e. non close period.

e-pay asia will only collect personal information from its employees ethically and lawfully.  It also seeks to collect information in a fair manner, and in a way that is not unreasonably intrusive.  If you are collecting personal information on behalf of e-pay asia you must inform the person involved of the purpose for which information is collected and be aware that, subject to some limitations, employees will be able to gain access to the information collected on request.  Steps must be taken to ensure that data is appropriately accurate and current and that data is stored no longer than necessary.

Key employees must ensure that the confidentiality of personal information contained in company records is strictly maintained.