Viralytics Limited

Corporate Governance

The Board is responsible for the oversight of the Company, including its control and accountability systems, input and approval of corporate strategy and performance objectives, reviewing and approving systems of risk management, internal compliance and control and ensuring appropriate resources are available, monitoring senior management’s performance and implementation of strategy and approving and monitoring financial and other reporting.

The Board comprises four directors. Only one director is deemed independent due to the following factors:

- Mr Bryan Dulhunty is not independent due to his executive role as Chairman and as the company with which he is associated provides services to the Company.

- Prof. Darren Shafren is not independent due to his relationship with Virotarg Intellectual Property.

- Dr Phillip Altman is not independent due to his executive role.

The Board is of the view that the Board’s current composition serves the interest of the shareholders for the following reasons:

- The Company’s investments are principally in cutting edge technology in early stage development. The Board composition is driven by the founders and chief scientific specialists in these areas.

- After considering the needs of the Company and procedures put in place, it is the view of the Board that it is not in the interest of the shareholders to change the current composition of the Board at this present time.

- All Directors have agreed not to participate in any decision in which they are conflicted.

Independent directors have the right to seek independent professional advice at the Company’s expense in the furtherance of their duties as directors. Written approval must be obtained from the Chairman prior to incurring any expense on behalf of the company.

The Board has not established a nomination committee. The Board has formed the view, given the company’s size and structure that it is more efficient for the Board as a whole to deal with matters that would otherwise be dealt with by a nomination committee.

The Company’s policy regarding directors and employees trading in its securities is set by the Board. The policy restricts directors and employees from acting on material information until it has been released to the market and adequate time has been given for this to be reflected in the securities’ price.

The Board has taken steps to safeguard the integrity of its financial reports:

- The Board reviews regular periodic management reports and has the opportunity to discuss these reports at regular board meetings.

- The Chairman discusses the annual financial report with the auditors to provide an open and frank discussion of any issue or concern the auditors may have.

The Company is a biotechnology entity at the initial stages of intellectual property development. The investment risk profile of the Company is high and investments in this Company are considered speculative.

The Company does not have formal written policies on risk oversight and management. However, as a matter of practice, the Board is responsible for risk management.

The Executive Chairman is responsible for:
- Identification of risk
- Monitoring risk
- Communication of risk events to the Board; and
- Responding to risk events, with Board authority.

To assist the Board with its responsibility for risk oversight it has established an independent Scientific Advisory Board.

The Board defines risk to be any event that, if it occurs, will have a material impact on the ability of the Company to achieve its abjectives. Risk is considered across the financial, operational and organisational aspects of the Company’s affairs.

Given its early stage of development, the financial and organisational risks are low, as there are simple financial and organisational structures in place. Success of the Company is dependent upon successful development of the Company’s Intellectual Property.

The Board has not conducted a formal annual performance review this financial year. As the Board was significantly restructured during the year to reflect the skills required to develop its newly acquired Virotarg Intellectual Property it was not deemed appropriate to conduct a formal review at this time. The Board is aware that the success of the Company is dependent on the performance of the Board and key executives. As such the Chairman has regular contact with directors on individual and group bases to discuss and revise the goals and objectives of the Company.

The Board has not established a remuneration committee. The Board has formed the view, given the size and structure of the Company that it is more efficient for the board as a whole to deal with matters that would otherwise be dealt with by a remuneration committee.

The amount of remuneration paid to all directors and executives including all monetary and non-monetary components are detailed in the Remuneration Report section of the Directors Report.

The Board expects that the remuneration structure implemented will result in the Company being able to attract and retain the best executives. The Company, with shareholder approval, has granted options over ordinary shares in the company to directors and senior executives to ensure that directors, executives and shareholder interests are aligned.

There are no schemes for retirement benefits other than statutory superannuation for non-executive directors.