Principle 2

STRUCTURE THE BOARD TO ADD VALUE  

Composition of the Board

The names and details of the directors of the Company in office at the date of signing the Financial

Report are set out on page 19 of the 2008 Annual Report.

The composition of the Board is evaluated and reviewed to ensure it provides a broad range of skills,

personal qualities, expertise, ability to exercise independent judgement and diversity required to

discharge its responsibilities. Provision of such skills and experience is aimed to assist the Company

to achieve its objectives and continual development. The Remuneration and Nomination Committee

assists the Board in selecting and evaluating suitably qualified directors to ensure that its

composition best complements and contributes to the effectiveness of the Board.

An objective of the Company is to ensure that the majority of the Board should comprise independent,

non-executive directors with no other significant business or other links to the Company. An

independent director is a director who is not a member of the management team (i.e. a non-executive

director) and who:

• has not within the last three years been employed in an executive capacity by the Company or

another group member, or has been a director after ceasing to hold any such employment;

• within the last three years has not been a principal or employee of a material* professional adviser

or a material* consultant to the Company or another group member;

• is not a material* supplier or customer of the Company or another group member, or an officer

of the company or otherwise associated, directly or indirectly, with a material* supplier or customer;

• has no material* contractual relationship with the Company or another group member other than as

a director of the Company;

• has not served on the Board for a period 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

• is free from any interest and any business or other 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.

* the Board considers, “material”, in this context to be where any director-related business

relationship has represented, or is likely in future to represent the lesser of at least 10% of the

relevant segment’s or the director-related business’s revenue. The Board has considered the nature

of the relevant industries' competition and the size and nature of each director-related

business relationship, in arriving at this threshold.

The majority of the Board comprises independent non-executive directors with the roles of the Chairperson and Chief Executive Officer not being exercised by the same individual. The Executive Chairman is a substantial shareholder and therefore is not considered to be independent. The Board intends to consider the succession of the Chairperson at such time as improved trading performance of the Company is achieved. Mr SL Wallis has been appointed as the lead independent director to ensure that any conflicts which may arise are dealt with in line with ASX Best Practice Recommendations.

Sub- Committees of the Board

1. Audit Committee

Details regarding the composition of the Committee, its role and responsibilities are provided under Principle 4 of this statement.

2. Remuneration and Nomination Committee

Details regarding the composition of the Committee, its role and responsibilities are provided under Principle 9 of this statement.

3. Regulatory and Compliance Committee

The members of the Regulatory and Compliance Committee during the year were:

Mr SL Wallis AO (Chairman);
Independent Non-Executive Director (appointed Chairman on 20 November 2007)

Mr GJ Campbell;
Independent Non-Executive Director (appointed on 20 November 2007)

Mr SM Cohn;
Independent Member

Mr DE Gladstone; and
Chief Executive Officer

Mr AR Amer
Independent Non-Executive Director (Chairman until retirement on 20 November 2007)

The Company’s Chief Executive Officer, Mr Danny Gladstone, was appointed a member elect of the Regulatory and Compliance Committee on 5 February 2007 subject to obtaining the necessary regulatory approval. This approval was received on 21 May 2008 resulting in Mr Gladstone becoming a full member of the Committee from that date.

Due to the highly regulated nature of the gaming industry within which the Company operates, the securing of new gaming licences and protection of current licences is an ongoing process which is of great importance to the Company. The Regulatory and Compliance Committee Charter, which has been approved by the Board, outlines responsibilities to monitor, review, advise and assist the Board to ensure all compliance related matters and procedures have been established and are operating effectively.

The Regulatory and Compliance Committee monitors probity related matters, technical compliance issues and compliance conduct and issues, systems and procedural requirements to ensure that the Company attains a high standard of compliance with all of its gaming regulatory and licence obligations. In addition, the Regulatory and Compliance Committee advises and makes recommendations to the Board regarding regulatory compliance matters, including the suitability of key employees and other persons or entities with whom the Company has or intends to have an association or affiliation, in line with gaming regulations.

The Compliance Manager and the Technical Compliance Manager are invited to the Regulatory and Compliance Committee meetings to present and discuss their reports and recommendations. The Regulatory and Compliance Committee met five times during the year and the directors’ attendance record is disclosed in the table of directors’ meetings on page 20 of the 2008 Annual Report. Due to the importance of the regulatory environment within which the Company operates, and to ensure the commitment by the Board within this important area, the Committee is scheduled to meet at least four times each financial year and as required to address any specific issues that may arise.

The main responsibilities of the Regulatory and Compliance Committee are to:

• regularly review the application of compliance to ensure that the Company meets all requirements outlined in its Compliance Policy;

• deal with and investigate any breaches, complaints and derogatory information of which it becomes aware;

• provide assistance and advice to the Board on matters pertaining to the Company’s continuing suitability to obtain and maintain gaming licences; and

• review operational policies and recommendations relating to compliance issues.

The Regulatory and Compliance Committee may seek independent professional advice, at the Company’s expense, in carrying out these duties, subject to informing the Board. The Committee has the authority to conduct any investigation appropriate to fulfilling its responsibilities and is provided with the right to direct access to any person within the Company.