Corporate Governance

This statement outlines the main Corporate Governance practices that were in place during the financial year.

BOARD OF DIRECTORS

The names of the directors of the Company in office at the date of this statement are set out in the Directors Report.

The Board of Directors of Icon Energy Limited is responsible for the overall corporate governance of the group and oversees the Company's business and management for the benefit of shareholders and sets out to achieve this objective by establishing:

corporate governance and ethical standards;
appointing and removing the chief executive officer and monitoring his performance;
ratifying the appointment and, where appropriate, the removal of the chief financial officer (or equivalent) and the company secretary;
maximising shareholder value by setting objectives and goals;
reviewing and ratifying systems of risk management and internal compliance and control, codes of conduct, and legal compliance;
ensuring appropriate persons form the composition of the Board;
approving and monitoring the progress of major capital expenditure, capital management and acquisitions and divestitures;
approving and monitoring financial and other reporting;

BOARD COMPOSITION

The principles applied to the composition of the Board are:

The Board should comprise directors who have a broad cross section of experience in the petroleum exploration/production industry both in Australia and overseas. Their expertise should encompass the establishment of management strategy and monitoring achievement of these strategies.

The Chairman of the Board should be a non-executive director.

The Board should comprise a majority of non-executive directors. Currently the Board comprises two non-executive directors and one executive director.

If a Board vacancy exists or where the Board considers that an additional Director is required, that appointment would be made from persons who possess the appropriate expertise and skills determined by the Board.

No Director, except the Managing Director, shall hold office for a period in excess of three years, or until the third annual general meeting following the Director's appointment, whichever is the longer, without submitting himself for re-election. At every annual general meeting one third of the Directors, or if their number is not a multiple of three, then the number nearest to but not exceeding one third retire from office and are eligible for re-election.

In accordance with the Constitution of the Company the board should comprise of at least three Directors.

INDEPENDANT PROFESSIONAL ADVICE

The Directors are entitled to seek independent professional advice at the Company's expense if required in the performance of their duties.

The Directors are entitled to direct access to employees and company advisers as they may require.

BOARD COMMITTEES

Two sub committees of the Board have been formed to consider and make recommendations to the Board in important areas of decision makers. Further sub committees will be formed when the Board feels the need for them.

AUDIT COMMITTEE

At the date of this report the company had an audit committee consisting of the following directors:

Martin Pyecroft (Chairman)
Stephen Michael Barry (Non executive director)

The committee's responsibilities are to:

oversee the existence and maintenance of internal controls and accounting systems;
oversee the financial reporting processes;
nominate external auditors; and
review the existing audit arrangements.

REMUNERATION COMMITTEE

This committee consists of the non-executive Chairman Mr. M. Pyecroft and non-executive director Mr. S. M. Barry. The committee meets annually to review the remuneration level for the Managing Director and other senior employees of the Company. It also considers and recommends the appropriate level of director's fees (subject to shareholder approval), and that each non-executive director's appointment is consistent with the Company's Constitution and the Corporations Act 2001.

The remuneration committee also reviews and recommends to the board on the following:

the company's recruitment, retention and termination policies and procedures for senior management;
incentive schemes;
superannuation arrangements;

BOARD REMUNERATION

Remuneration and terms of employment for the Managing Director is formalised in a service agreement.

Remuneration of non-executive directors is currently not to exceed a maximum of $250,000 ,
which has been approved by shareholders.

Details of directors' remuneration are contained in the Director's Report.

NOMINATIONS COMMITTEE

The Board considers on a regular basis whether the existing Board comprises persons with the appropriate mix of skills, experience and other qualities and has therefore not formally constituted a nominations committee.

ETHICAL STANDARDS

The aim of the economic entity is to ensure that all Directors, managers and employees act in a manner of integrity and ethical standards so as to ensure a high standard of corporate governance to enhance the reputation and performance of the group.

TRADING IN THE COMPANY'S SECURITIES BY DIRECTORS AND EMPLOYEES.

The Board has a formal policy regarding trading in the securities of the Company by Directors and employees. The provisions of the Corporations Act 2001 and the Listing Rules of the Australian Stock Exchange Limited require advice to the ASX of any transactions by the Directors in the securities of the Company.

IDENTIFICATION OF SIGNIFICANT BUSINESS RISK

The Board meets at least every two months and receives monthly comprehensive management and financial reports which enables it to identify emerging risk factors and allows the Board to monitor the management's response as to how it intends to deal with these risks.

DISCLOSURE

The board has in place procedures to ensure that the obligations of directors, officers and employees of the company is to comply with the ASX listing rules so as disclosure of such material may have an effect on the price or value of the Company's securities.

SHAREHOLDERS

The Board of Directors ensures that shareholders are fully informed as to any developments of the group which is communicated by:

annual reports to shareholders;
half-yearly accounts lodged with the ASX;
continuous disclosure to the Australian Stock Exchange;
notices of shareholder meeting and explanatory notes;
complete information on all documents are on the Company's web-site: www.iconenergy.com
quarterly reports;

Shareholders are encouraged to contact the Company's officers and participate in the Annual General Meeting by asking questions as to the performance of the Company.

PRINCIPLES OF CONDUCT

Ethical and responsible business practices.
Sustainable development considerations/principles integrated into company decision making.
Foster economic growth and business development, generate government revenue, provide commercial returns to the industry and contribute to the wealth generated by Australia's natural resource base.
Health, safety, environmental and community risk management strategies that are based on sound science, transparency and effective communication.
Continuously seek opportunities to improve health, safety and environmental performance in addressing risks posed by our operations to employees, contractors, the public and the environment.
Contribute to the conservation of biodiversity and protection of the environment through responsible management of our operations and their impacts.
Foster economic and social development of the communities in which we operate.
Respect and protect human rights and dignity at our operations and deal fairly with employees and others.
Open and effective engagement, and reporting with our communities.