IDT Australia : Corporate Governance Statement FY17

Current as at 23 August 2017

The Directors and management of IDT Australia Limited (the 'Company') are committed to maintaining good standards in corporate governance. This statement outlines the approach taken by the Board in managing the affairs of the Company and fulfil its duties to meet the interests of the Company as a whole.

The Australian Securities Exchange Corporate Governance Council defines corporate governance as:

'…the framework of rules, relationships, systems and processes within and by which authority is exercised and controlled within corporations. It encompasses the mechanism by which companies, and those in control, are held to account.

Good corporate governance promotes investor confidence, which is crucial to the ability of entities listed on the ASX to compete for capital.'

This statement sets out the corporate governance structure of the Company which is established to ensure the Company is properly and efficiently directed and managed for the benefit of shareholders and other stakeholders. In particular, consideration is given to the ASX Corporate Governance Principles and Recommendations (3rd Edition) (the "3rd Edition CGC Recommendations") eight central principles of corporate governance.

The Corporate Governance Statement set out below details the Company's current corporate governance principles and practices which the Board considers complies with the 3rd Edition CGC Recommendations. The Company's corporate governance framework addresses these principles through its policies as are published in the Corporate Governance section of the Company's website (www.idtaus.com.au), each forming part of the Company's Corporate Governance Statement. All these practices, unless otherwise stated, have been in place for the financial year ended 30 June 2017.

1. Lay Solid Foundations for Management and Oversight

2. A listed entity should disclose:

3. The respective roles and responsibilities of its Board and management; and

4. Those matters expressly reserved for the Board and those delegated to management.

   Yes Company Directors are responsible to security holders for the performance of the Company in both the short term and the longer term, seeking to balance sometimes competing objectives in the best interests of the company as a whole. Their focus is to enhance the interests of security holders and other key stakeholders and to ensure the Company is properly managed. To this end, the Company has established an IDT Board Charter which is summarised below:

   The Board must ensure it and the Company at all times complies with provisions of the Constitution. The Board must at all times act honestly, fairly and diligently in all respects and in accordance with laws applicable to the Company.

   The main responsibilities of the Board are:

   • to provide strategic guidance to the Company including contributing to the development of and approving the corporate strategy

   • to review and approve business plans, the annual budget and financial plans including available resources and major capital expenditure initiatives

   • appointing the Chair of the Board

   • appointment and performance assessment of the Managing Director against annually set key performance indicators

   • approving the Company's remuneration framework

   • approving major corporate initiatives

   • enhancing and protecting the reputation of the organisation

   • ensuring the Company has an appropriate risk management framework to identify material risks facing the Company and that appropriate and adequate control, monitoring and reporting mechanisms are in place

   • reporting to security holders

   • overseeing the integrity of accounting and corporate reporting systems, including external audit

   • overseeing the process for making timely and balanced disclosure of material information concerning the Company which a reasonable person would expect to have material impact on the price of the Company's securities

   • monitoring effectiveness of the Company's Governance practices

   • ensuring the Annual General Meeting is attended by the Company's external auditor, who is available to answer questions relevant to the audit which security holders may have.

     Day to day management of the Company's affairs and the implementation of the corporate strategy and policy initiatives are formally delegated by the Board to the Managing Director and Executive team.

     Details of the IDT Board Charter can be found on the Company's website http://en.idtaus.com.au/investor-centre/corporate-governance/

5. A listed entity should:

6. Undertake appropriate checks before appointing a person, or putting forward for security holders a candidate for election, as a director; and

7. Provide security holders with all material information in its procession relevant to a decision on whether or not to elect or re-elect a director.

   Yes The Company's Remuneration and Nominations Committee undertakes appropriate checks on any person who is being considered as a Director. These checks may include good fame and character, experience, education, financial history and background.

   All material information relevant to a decision on whether or not to elect or re-elect a Director is provided to security holders in a Notice of Meeting pursuant to which the resolution to elect or re-elect a Director will be voted on.

8. A listed entity should have a written agreement with each director and senior executive setting out the terms of their appointment.

   Yes New Directors receive a letter of appointment along with an information pack which outlines the Company's expectations of the Director in relation to their participation, time commitments and compliance with policies and regulatory requirements.

   Senior executives and all Company employees are required to sign employment agreements or letters of offer which set out the key terms of their employment.

9. The company secretary of a listed entity should be accountable directly to the board, through the chair, on all matters to do with the proper functioning of the board.

   Yes The Co-company Secretaries are accountable directly to the Board, through the Chair, on all matters associated with the proper functioning of the Board.

10. A listed entity should:

11. have a diversity policy which includes requirements for the board or a relevant committee of the board to set measurable objectives for achieving gender diversity and to assess annually both the objectives and the entity's progress in achieving them;

12. disclose that policy or a summary of it; and

13. disclose as at the end of each reporting period the measurable objectives for achieving gender diversity set by the board or a relevant committee of the board in accordance with the entity's diversity policy

    Yes

    Yes No

    The Company has in place a Diversity Policy which recognises and appreciates the value inherent in a diverse workforce. The Company believes that a diverse workforce is the best means of creating the deepest possible talent pool from which to recruit. The Diversity Policy's aims include:

14. Enhancing the employee talent pool - to foster recruitment, retention and promotion practices that take account of the diversity within the communities in which IDT operates;

15. Supportive environment - to ensure a supportive workplace in which employee differences are treated fairly and with respect and dignity within a safe working environment;

16. Work/life balance - to promote workplace structures, systems and procedures that assist employees balance their work, family and other responsibilities effectively

    and its progress towards achieving them and either:

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

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

19. Social responsibility - to ensure IDT contributes positively to the social well-being of the communities it serves; and

20. Discrimination, harassment, vilification and victimisation is not tolerated.

21. Measurable Objectives:

    Whilst the Company is committed to building strong representation of female employees across the Company it does not currently set measurable diversity targets.

    Details of the Company's Diversity Policy can be found on the Company's website http://en.idtaus.com.au/investor-centre/corporate-governance/

22. A listed entity should:

23. have and disclose a process for periodically evaluating the performance of the board, its committees and individual directors; and

24. disclose, in relation to each reporting period, whether a performance evaluation was undertaken in the reporting period in accordance with that process.

    Yes Pursuant to the IDT Board Charter, the Board undertakes annual self-assessment of its performance in relation to its leadership, structure, functionality, systems, meetings and relationship with management. As part of this review the Board considers the appropriate mix of skills required by the Board to maximise its effectiveness and its contribution to the Company.

25. A listed entity should:

26. have and disclose a process for periodically evaluating the performance of its senior executives; and

27. disclose, in relation to each reporting period, whether a performance evaluation was undertaken in the reporting period in accordance with that process.

28. Yes The Managing Director is responsible for the evaluation of all of the Company's senior executives. Performance reviews are undertaken annually and performance is assessed against pre-determined, objectively measurable and agreed KPI's.