3 REQUISITES, RESPONSIBILITIES & RIGHTS

3.1 Duties & Responsibilities 3.1.1 Directors

The duties and responsibilities of management can be found within the Corporations Act (2001), S 180*. Excerpts of these duties and/or responsibilities include: Making a judgement based on good faith for a proper purpose The former judgement is based on an impartial or independent interest

Also relative to this is from Corporations Act (2001), S 588G^ in regards to the trading of a company during a period of insolvency. The device you are bringing to the market, whether it may or may not hold up to the claim of reducing household electrical consumption by 10%, might have lacklustre performance in sales. A precedent to this claim is the case of Firepower International v. ASIC (2008)~, whereby the owners of Firepower International claimed that their product would lower fuel consumption, reduce emissions, clean and maintain your engine. It was later investigated that the directors of the company had been trading whilst insolvent for well over a year.

This case is important because the device Buzz Power is also making a similar claim in the energy sector (albeit with a difference from fuel to electricity). This claim, whether true or not is insignificant, as the associated risk of such a claim can be attributed to the old adage, if it is too good to be true, it usually is.

If the company does happen to underperform, the onus will be upon the directors to be transparent regarding such matters, and to disclose the state of the company, as well as to operate in a manner which is in good faith to the company.

*Refer to Appendix 03 ^Refer to Appendix 04 ~Refer to Appendix 05

3.1.2 Auditors
As you are a large proprietary company, by regulation you must appoint an external auditor for the company, as per Corporations Act (2001), S 180.

The independence of said Auditor is a prerequisite, with no conflict of interest within the company as outlined in Corporation Act (2001), S 324CA - S 324CG. This excerpt of the Corporations Act (2001), details the specific requirements for appointment and impartiality, whether they be an individual, firm or company.

The independence of Auditors was amended in regards to CLERP (Audit Reform & Corporate Disclosure Act) (2004), which can be found in Section 3.2 of this report.

3.2 Due Diligence, Reports & Compulsory Filings

As a large proprietary company, you are regulated to lodge a financial report and a directors report with ASIC (Australian Securities & Investment Commission).

This can be attributed to the amendment of the Corporations Act (2001) with the ruling of the courts in CLERP (Audit Reform & Corporate Disclosure Act) (2004). These reforms included: Shareholder participation Financial reporting Remuneration of directors and executives Continuous disclosure Independence of company auditors.

For filing regulations, reports filed include: Financial Report The details of such report can be found in regards to Corporations Act (2001), S 295. Directors Declaration

The details of such report can be found in regards to Corporations Act (2001), S 295A - S 300.

4 Conclusive Statement
The company can be expected to