## CORPORATE GOVERNANCE 

## THE COMPANY'S APPROACH TO ESTABLISHING AN EFFECTIVE SYSTEM OF CORPORATE GOVERNANCE EXPLAINED 

Super Cheap Auto Group Limited (“the Company”) and the Board are committed to achieving and demonstrating high standards of corporate governance. The Directors of Super Cheap Auto Group Limited are accountable to shareholders for the proper management of the business and affairs of the Company. 

A description of the Company’s main corporate governance practices is set out below. All these practices were established in the three months following the Company’s incorporation. 

## The Board of Directors 

The Board of Directors, working with senior management, is responsible to shareholders for the overall management of the Company’s business and affairs. The Directors’ overriding objective is to increase shareholder value within an appropriate framework which protects the rights and interests of company shareholders and ensures the Company and its controlled entities are properly managed. 

The Board delegates responsibility for day-to-day management of the Company to the Managing Director. 

## Composition of the Board 

The constitution of the Company provides that the number of Directors is to be not less than three nor more than eight. The Board is currently comprised of five Directors, four of whom (including the Chairman) hold their positions in a non-executive capacity. 

The Board operates in accordance with the broad principles set out in its charter which is available from the Corporate Governance information section of the Company website at www.supercheapauto.com. 

The composition of the Board is reviewed annually by the Board Nomination and Remuneration Committee to ensure that it has available an appropriate mix of skills and experience to ensure the interests of shareholders are served. 

Details of the members of the Board, their experience, expertise, qualifications and independent status are profiled in the Board of Directors section on page 19. There are four Non-Executive Directors, three of whom are independent, and one Executive Director at the date of signing the Directors’ Report. 

## Responsibilities 

The responsibilities of the Board include: 

• approving the Company’s goals and  strategic direction; 

• monitoring financial performance, including adopting annual budgets and approving Super Cheap Auto’s financial statements; 

• ensuring that adequate systems of internal control exist and are appropriately monitored for compliance; 

• selecting the Managing Director and review the performance of senior management; and 

• ensuring significant business risks are identified and appropriately managed. 

## Directors’ Independence 

As stated there are five Directors, three of whom are Independent Non-Executive Directors (including the Chairman). The predominance of Independent Non-Executive Directors clearly separates the Board from the Company’s executive management and enshrines board independence. The structure also provides the Company with the benefit of a diverse range of experience, qualifications and professional skills. 

The Board has adopted the independence definition suggested by the ASX Corporate Governance Council and as such three of Super Cheap Auto’s Directors (namely Mr Dick McIlwain, Dr Darryl McDonough and Mr Robert Wright) are considered to be independent by reference to that definition. 

## Independent Professional Advice 

The Board (and each individual Director) is entitled to seek independent professional advice consistent with Corporate Governance Practices at the Company’s expense (subject to the reasonableness of the costs and Board consent) in the conduct of its duties for the Company. 

## Performance Assessment 

The Board shall undertake an annual performance, evaluation of itself that compares the performance of the Board with the requirements of the Board Charter, sets the goals and objectives of the Board for the upcoming year and effects any improvements to the Board Charter that are necessary or desirable. 

This evaluation is conducted by the Board and includes consideration of the annual assessment of the effectiveness of the Board as conducted by the Board Nomination and Remuneration Committee. 

