Corporate Governance Statement

Board of Directors

Board Committees

Corporate Conduct and Responsibility

Risk Management

Remuneration Policies and Procedures

The board of Directors ("the Board") is committed to responsible corporate governance. In accordance with the Australian Stock Exchange Limited Corporate Governance Council's Principles of Good Corporate Governance and Best Practice Recommendations ("the Recommendations"), the Board has established a sound framework of corporate governance practices that it considers appropriate for the Company. The Board recognises that it is accountable to shareholders for the performance of the Company and, to that end, is responsible for instituting a system of corporate governance that operates in the best interests of shareholders while also addressing the interests of other key stakeholders.

The Board considers the Company's corporate governance practices are consistent with the Recommendations. However, the Board recognises that the full adoption of the Recommendations may not be practical or appropriate given the particular circumstances and structure of the Company. Where the Company's current practices do not comply with the Recommendations, the differences are identified in this Statement. The Board also recognises that corporate governance is not a static matter and regularly reviews the Company's policies and practices to ensure that they remain current and in accordance with best practice.

This Statement describes the Company's main corporate governance practices in place during 2007.

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The Board guides and monitors the performance and management of the Company on behalf of the shareholders, by whom it is elected and to whom it is accountable.

Board role and responsibility

The Board Charter clearly defines the matters that are reserved for the Board, and those that the Board has delegated to management. The principal responsibilities of the Board include:

• contributing to the development and implementation of corporate strategy;
• monitoring the corporate and financial performance of the Company;
• approving the Company's financial reporting including annual and half-year reports;
• appointing Board members and the Chief Executive Officer;
• delegating clear responsibility and authority to the committees of the Board, the Chief Executive Officer and management;
• monitoring and reviewing the performance of those who hold delegated powers;
• monitoring and reviewing processes and systems of risk management and internal compliance and control;
• overseeing the Company's corporate governance framework;
• overseeing the Company's processes for disclosure and communications; and
• reviewing and authorising major investments.

The Board has delegated responsibility to the Chief Executive Officer for the day-to-day management and administration of the Company. The Chief Executive Officer manages the Company in accordance with the corporate strategy, objectives and delegations approved by the Board.

Composition of the Board

The Company seeks to have a Board comprising Directors with relevant knowledge, experience and expertise to deal with the current and emerging issues of the business, to review and challenge the performance of management, and to exercise independent judgment.

The Board currently comprises six Directors:

• five Non-executive Directors; and
• one Executive Director.

The Recommendations state that a majority of the Board should be independent. In summary, a Director is considered to be independent if he/she is not a member of management and:

• is not a substantial shareholder of the Company or an officer of, or otherwise associated directly with a substantial shareholder;
• is not, and has not in the last three years been, a principal of a material professional adviser or a material consultant to the Company;
• is not associated with a material supplier or customer of the Company;
• has no material contractual relationship with the Company;
• does not have any interest or business relationship which could, or could reasonably be perceived to, materially interfere with the Director's ability to act in the best interests of the Company; and
• has not served on the Board for a period which could materially interfere with the Director's ability to act in the best interests of the Company.

Materiality for these purposes is assessed on a case-by-case basis having regard to the Company and the relevant Director's circumstances, including the significance of the relationship to the Director in the context of their activities as a whole.

There are two Non-executive Directors who are deemed to be independent. Three Non-executive Directors and one Executive Director are deemed to be non-independent. In order to have the majority of the Board as independent Directors, it would be necessary to appoint three additional independent Directors or to replace some current Directors. In assessing the composition of the Board, the Company aims for its Directors to be independent in thought and judgment, as well as to add value to the Company. The enforcement of the material personal interest requirement (see below) also ensures that the interests of shareholders, as a whole, are pursued and not jeopardised by a lack of majority of independent Directors.

The Recommendations also state the Chairman should be an independent Director. While the Chairman, Max Donnelly, is a Non-executive Director appointed by the Board, he is not considered by the Board to be independent. However, the Board has determined that the chairman remain unchanged at this point in time as it considers Max Donnelly is the best qualified Director to be the Chairman.

The Company both requires and benefits from the passionate involvement of the existing Directors who have been instrumental to date in the success of the Company and the business. The existing Board structure is considered appropriate for the Company at this stage of its growth.

Nomination and appointment of new Directors

Under the Board Charter, it is the responsibility of the Nomination and Remuneration Committee to formulate procedures and policies for the selection, appointment and remuneration of new Directors and the Chief Executive Officer. The Committee is also responsible for reviewing the performance of the Board, its committees and individual Directors.

Where the Board determines there is a need to appoint a Director, whether due to the retirement of a Director, growth of the Company, or changed circumstances of the Company, the Nomination and Remuneration Committee has responsibility for proposing candidates for consideration by the Board. Where appropriate, the services of external consultants may be engaged.

New Directors receive a letter of appointment, setting out the terms of their appointment, and a copy of the Company's Constitution and Board Charter.

Retirement and re-election of Directors

In accordance with the Company's Constitution, one third of the Board (other than the Chief Executive Officer) must stand for re-election on a rotational basis at each Annual General Meeting. All retiring Directors are eligible for re-election.

The Company does not have a policy in relation to the retirement or tenure of Directors. The Board believes that maintaining flexibility in relation to the appropriate term for each Director allows it to attract and retain Directors of the highest standard with the most appropriate skills and experience.

The Board does not consider that any existing Director has served on the Board for a period which could materially interfere with their ability to act in the best interests of the Company.

Independence of Directors

Directors have an overriding responsibility to perform their duties in the best interests of the Company. Directors are required to disclose, on an ongoing basis, any interest that could potentially conflict with those of the Company.

In accordance with the Corporations Act 2001, and under the Board Charter, any Director with a material personal interest in a matter being considered by the Board must declare the possible conflict of interest. They must not be present when the matter is being considered and may not vote on the matter.

Operation of the Board

The Board and its committees meet regularly to review strategies and operational performance. The Chairman and Chief Executive Officer communicate regularly to discuss issues relating to the business and to set Board agendas. In addition, Directors receive regular updates from management on key issues between Board meetings. The Non-executive Directors meet at least once a year without the presence of management.

Board access to information and independent advice

Directors have unrestricted access to Company records and information, and receive regular detailed financial and operational reports from management.

The Board has in place a procedure by which individual Directors and Board committees may seek independent professional advice at the Company's expense in order to assist them in carrying out their duties. The process for obtaining such advice requires the Director to notify the Chairman in advance. The Chairman will be provided with a copy of the final advice which may, if appropriate, be circulated to the other Directors.

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To assist in the effective execution of its responsibilities, the Board has established the following committees:

• Audit Committee;
• Nomination and Remuneration Committee; and
• Compliance Committee.

The general role of the Board committees is to review and analyse policies and strategies that are within their respective charters. The Board committees may not take action or make decisions on behalf of the Board unless specifically mandated by prior Board authority to do so. The role of each committee is described in more detail below.

Audit Committee

It is the Board's responsibility to ensure that an effective internal control framework exists within the Company. The Audit Committee currently comprises the following Directors:

The role of the Audit Committee is to monitor and review the effectiveness of the Company's controls in the areas of operational and balance sheet risk, legal and regulatory compliance, and financial reporting. The Audit Committee discharges these responsibilities by:

• overseeing the existence and maintenance of internal controls and accounting systems;
• overseeing the management of risk within the Company;
• overseeing the financial reporting processes to ensure compliance with statutory requirements and accounting standards;
• reviewing the annual and half year financial reports and recommending them for approval by the Board;
• reviewing and making recommendations to the Board regarding the appointment or dismissal of external auditors;
• reviewing the performance of the external auditors and existing audit arrangements;
• overseeing the processes used by management to ensure compliance with laws, regulations and other statutory or professional requirements;
• reviewing, annually, the requirement for an internal audit function; and
• providing written advice to the Board, endorsed by a resolution of the Committee, that the Committee is satisfied that the provision of non-audit services by the auditor during the year is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001.

The Audit Committee is required to meet at least twice a year. Additional meetings may be held as the work of the Committee demands. Members of management and the external auditors attend meetings of the Audit Committee by invitation. The Committee assesses annually the performance of the auditor, as well as the relationships between the external auditor and the Company, to ensure independence is maintained.

Nomination and Remuneration Committee

During the financial year the Nomination and Remuneration Committee comprised the following Directors:

The Nomination and Remuneration Committee is responsible for matters relating to succession planning, recruitment and the appointment and remuneration of the Directors and the Chief Executive Officer. It is also responsible for overseeing succession planning, selection and appointment practices and remuneration packages for senior management and employees of the Company. The objectives of the Committee include:

• reviewing, assessing and making recommendations to the Board on the desirable competencies of the Board;
• assessing the performance of the members of the Board;
• overseeing the selection and appointment practices for Non-executive Directors and senior management of the Company;
• developing succession plans for the Board and overseeing the development of succession planning in relation to senior management; and
• assisting the Board in determining appropriate remuneration policies.

The Committee is required to meet at least twice a year. Additional meetings may be held as the work of the Committee demands. Senior management may be invited to the Committee meetings to provide input on management performance and salary packages.

Compliance Committee

The Compliance Committee currently comprises:

Under its charter, the composition of the Compliance Committee requires a minimum of one Director and the Company Secretary. The Board may invite external advisers to become members of the Committee.

The role of the Compliance Committee is to assist the Board in ensuring the Company complies with the broadcasting legislation and related legislation and codes, including:

• the Broadcasting Services Act 1992 (Cth);
• the Commercial Radio Codes of Practice;
• the Broadcasting Services Act Standards;
• the Radio Licence Fees Act 1964 (Cth); and
• the Privacy Act 1988 (Cth).

In addition, the role of the Committee is to assist the Board in ensuring the Company complies with the terms and conditions of its two broadcasting licences.

Meetings may be held as the work of the Committee demands.

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The Company seeks to maintain a high standard of ethical behaviour to ensure that its business is conducted with integrity, honesty and fairness at all times.

The Company has adopted a Code of Conduct which is intended to provide direction to its Directors, management, employees and contractors on a range of issues associated with the manner in which the Company conducts its business.

Code of Conduct

The Code of Conduct is designed to ensure that:

• high standards of corporate and individual behaviour are observed by all Directors and employees in the context of their employment;
• Directors and employees are aware of their responsibilities to the Company under their contract of employment; and
• Directors and employees always act in an ethical and professional manner.

The Code of Conduct requires Directors and employees to, among other things:

• avoid conflicts between their personal interests and those of the Company and its clients;
• not take advantage of opportunities arising from their position for personal gain or in competition with the Company; and
• comply with the Company's share trading and other policies.

All Directors and employees have an obligation to act with the utmost integrity and objectivity, striving at all times to enhance the reputation and performance of the Company. The Code of Conduct requires Directors and employees to report any actual or potential breach of the law, the Code of Conduct or other Company policies. The Company promotes and encourages ethical behaviour and provides protection for those who report violations.

Continuous disclosure and shareholder communications

The Company is committed to providing timely, open and accurate information to shareholders and the market in general. The Board has developed a Continuous Disclosure Policy which sets out the procedures it has adopted to ensure that information concerning the Company is provided in a relevant and timely manner. The Policy will be regularly reviewed to maintain compliance with the law and the Australian Stock Exchange Limited ("ASX") Listing Rules.

The Continuous Disclosure Policy specifies the process for making disclosure to the ASX. It requires the Board, as soon as it becomes aware of information concerning the Company that would be likely to have a material effect on the price or value of the Company's securities, to ensure that the information is released to the Company Announcements Office of the ASX. The Policy also states that, unless required to avoid a false market, the Company's general policy is not to respond to market speculation or rumours.

The Board is committed to keeping shareholders fully informed of all major developments affecting the Company by:

• preparing detailed half-yearly and annual financial reports, and making these available to all shareholders;
• informing shareholders of the key issues affecting the Company; and
• holding an Annual General Meeting which enables shareholders to ask questions of the Board.

The Board encourages full participation of shareholders at the Annual General Meeting to ensure a high level of accountability and identification with the Company's strategy and goals. The Company's management and auditors attend the Annual General Meeting to answer questions of shareholders as required.

The Company has developed a corporate website to enable broader access to Company information by shareholders and stakeholders. Amongst other things, the website will contain all relevant announcements made to the market, and related information (e.g. information provided to analysts or media during briefings) after they have been released to the ASX.

Share trading policy

In addition to the provisions of the Corporations Act 2001 which apply to all employees, the Company has developed specific written guidelines that prohibit Directors and employees (collectively referred to as "Designated Officers") from acquiring, selling or otherwise trading in the Company's shares while in possession of information about the Company that is not in the public domain and is price sensitive. Price sensitive information is information that a reasonable person would expect to have a material effect on the price or value of the Company's securities.

Under the guidelines, Designated Officers must not deal in the Company's securities at any time if they are in possession of unpublished price sensitive information in relation to those securities.

Designated Officers may only deal in the Company's securities in the following circumstances:

• from not less than one full trading day after, to a maximum of 30 days after, the Company's half-year results announcement, full year results announcement and the Company's Annual General Meeting;
• where the securities are offered under the Company's dividend reinvestment plan or an approved executive or employee share plan;
• to take up entitlements under a rights issue or other offer;
• for the purposes of participating in any share buy-back;
• undertakings to accept, or the acceptance of, a takeover offer; or
• where otherwise required by law or the order of any court or regulatory authority.

Designated Officers may deal in the Company's securities outside the designated trading windows specified above where neither the Designated Officers nor the Company are in possession of unpublished price sensitive information in relation to those securities, and the Designated Officer obtains the approval of:

• the Chairman (where the Designated Officer is a Director or an employee); or
• the Company Secretary (where the Designated Officer is the Chairman).

Any Designated Officer who deals in the Company's securities must notify the Company Secretary (or in the case of dealings by the Company Secretary, the Chairman) once the dealing has occurred. The obligation to notify will not apply to dealings under the dividend reinvestment plan or an approved executive or employee share plan.

Prohibitions on dealing in securities apply not only to the acquisition and disposal of shares, but also to acquiring, taking, assigning and releasing of options traded in the options market.

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The Board has in place a number of arrangements and internal controls intended to identify, assess, monitor and manage areas of significant business risk. These include the maintenance of:

• Board committees;
• appropriate policies and procedures that are widely disseminated to, and understood by, employees;
• detailed and regular budgetary, financial and management reporting;
• clearly defined management responsibilities, organisational structures, and strong management reporting systems;
• external audit functions; and
• comprehensive insurance programs.

Management is ultimately responsible to the Board for the Company's system of internal control and risk management. The Audit Committee assists the Board in monitoring this function.

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Objectives and policies

The Company has established processes to ensure that the level and composition of remuneration are sufficient, reasonable, and explicitly linked to performance. The objectives of the Company's remuneration policies are to attract, motivate and retain appropriately qualified and experienced executives and other employees capable of discharging their respective responsibilities to enable the Company to achieve its business strategy.

Remuneration structure

The Nomination and Remuneration Committee is primarily responsible for the review and making of recommendations in relation to issues that impact executive remuneration and development, including remuneration packages and other terms of employment for Directors.

Non-executive Directors

The Nomination and Remuneration Committee is responsible for recommending to the Board fees applicable to Non-executive Directors. Directors are remunerated at market rates for their services to the Company. Non-executive Directors are paid a fixed annual fee for their services.

Executive Directors and Management

The Nomination and Remuneration Committee is responsible for recommending to the Board remuneration policies, fees, salaries, short-term and long-term incentives applicable to Executive Directors and management of the Company.

The remuneration policies are designed to drive a performance culture, and to ensure that the way in which employees are recognised and rewarded through remuneration is in the best interests of the shareholders, the Company and the individual. The remuneration policies achieve this by:

• providing remuneration that is market competitive to ensure the Company has the ability to retain and motivate strong performing employees and attract high calibre employees;
• implementing an incentive scheme to ensure the most senior executive remuneration is linked to both individual performance and Company performance; and
• undertaking an annual evaluation process on the performance of all executives, the results of which contribute to the determination of any salary adjustment an individual executive may receive.

Incentive plans

Full details of the benefits and remuneration for Executive and Non-executive Directors are set out in the Remuneration Report.

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