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(1) This procedure must be read in conjunction with the Commercial Activities Policy. (2) This document applies to any commercial activity conducted under the auspices of the University of Newcastle ( (3) This document should be read and understood by all (4) In the context of this document, the following definitions apply: (5) Each commercial activity subject to this Procedure must follow a five-stage life cycle. The five stages are to be completed sequentially as follows: (6) In determining whether an activity is a commercial activity for the purposes of this procedure, the Activity Owner should first review Section 4 of the Commercial Activities Policy. (7) If the Activity Owner is unsure of the application of the Commercial Activities Policy, they should complete the Commercial Activity Decision Tree to determine which category of commercial activity, if any, they are pursuing. (8) Where the outcome of the Decision Tree is a commercial activity that does not clearly satisfy the criteria of Category A or Category B Commercial Activity, the Impact Assessment Tool must be completed. (9) For proposed new commercial activities that satisfy the criteria for Category A Commercial Activities, and are not subject to an alternate procedure, as detailed in the Commercial Activities Policy, a Commercial Activities Category A Business Proposal must be prepared. (10) A Commercial Activity Category B Business Proposal must be prepared and evaluated for all new proposed commercial activities that satisfy the criteria of Category B commercial activities. (11) The Stage 1 Checklist of Considerations may be used to help the Activity Owner collate the information required for the Category B Business Proposal. (12) Due diligence assessments must be conducted on third parties to the activity, including key external stakeholders. A due diligence assessment considers: (13) For any proposed commercial activity conducted outside Australia, additional independent expert legal, tax and other regulatory compliance advice must be obtained before a proposal can be submitted for approval. (14) A commercial activities business proposal must be endorsed by the Sponsor following a preliminary evaluation of the proposal and its related documents. (15) Approval of a commercial activity should be undertaken in accordance with the requirements of the Delegation of Authority Framework, the relevant Delegation Schedule, and any associated documents (see Delegations Register). (16) Where the prepared proposal document indicates the work is outside the (17) All proposals for commercial activities are subject to evaluation against the following criteria as a minimum standard: (18) A commercial activity must not commence before formal approval has been obtained from the relevant (19) A (20) Where the proposal is approved by the Vice-Chancellor in accordance with clause 16, the Vice-Chancellor must report the matter to Council at the next Council meeting. (21) The Council is responsible for establishing and authorising the participation by the (22) The (23) The University Secretary, or their nominee, will ensure that approved commercial activities are entered into the (24) Once the business proposal for the commercial activity has been approved in stage 1, the next stage is to negotiate a written agreement (in whatever form is appropriate) and have it executed by the appropriate (25) All commercial activities must be properly structured from a legal, tax, regulatory or other perspective in line with any recommendations given by Legal and Compliance, legal or other professional advisers, and documented. (26) The following issues must be considered by the Activity Owner at a minimum when preparing a written agreement to govern the commercial activity: (27) Before signing the agreement, contract or similar, the (28) Once a commercial activity is approved (regardless of the category) and any contract or agreement executed, it needs to be managed in a manner that provides assurance that the commercial activity complies with: (29) Ongoing management and monitoring should also ensure that the (30) The Responsible Officer is responsible for managing and regularly monitoring the commercial activity throughout the total activity life to ensure the ongoing viability of the commercial activity. (31) If the commercial activity is a Category B commercial activity the Responsible Officer will provide monitoring reports to the Nominated Executive. (32) If the commercial activity concerns the establishment of a (33) Periodic monitoring must be completed at least annually using Part A of the Commercial Activity Report. (34) Regular monitoring seeks to provide assurance to the (35) Where any significant changes to the commercial activity are identified, including changes to the (36) The Responsible Officer is also responsible for the provision of all necessary information to ensure that the Register of Commercial Activities and the Contract Register are kept accurate and up to date. (37) Additional monitoring requirements in addition to the Commercial Activity Report may apply to third-party interests per Table 1, depending on the level of control over the entity. (38) The Responsible Officer for each commercial activity is responsible for completing Parts A, B and C of the Commercial Activity Report on that activity at least once every 3 years , unless requested sooner by the Executive Leadership Team (ELT) or Council, in order to: (39) The Responsible Officer for each commercial activity must provide a copy of the review report to the Nominated Executive at least 1 month before the expiry of the 3 year review period. (40) A Commercial Activity Report may be required sooner than the 3 year review period if there is a significant change in any of the above 5 criteria at item 31 and the activity needs to be exited early. (41) Exit of a commercial activity may be considered when: (42) A Commercial Activity Exit Form is to be prepared and submitted to the Nominated Executive for consideration of the financial, commercial and legal aspects, before being issued to the Vice-Chancellor for consideration and delegate approval. (43) Stage 1 Checklist of Considerations. (44) Commercial Activity Decision Tree (45) Commercial Activity Impact Assessment Tool (46) Commercial Activity Category A Business Proposal (47) Commercial Activity Category B Business Proposal (48) Commercial Activity ReportCommercial Activities Procedure
Section 1 - Introduction
Section 2 - Scope
Section 3 - Definitions
Top of Page
Term
Definition
Commercial Activity
As defined by section 21A of the University of Newcastle Act 1989 No 68 a University commercial activity means:
i. any activity engaged in, by, or on behalf of the
ii. any other activity comprising the promotion of, establishment of, or participation in any partnership, trust, company or other incorporated body, or joint venture, by or on behalf of the
Activity Owner
The person who is promoting the proposed commercial activity and who is responsible for the preparation of the proposal documentation.
Due Diligence
The process of investigating and assessing information about a third party who is potentially engaged in a
Sponsor
The person who provides endorsement of the proposal prior to its approval.
Nominated Executive
The member of the Executive Leadership Team who is not the Sponsor or
Responsible Officer
The person(s) responsible for the ongoing monitoring and review of Category A and B commercial activities. This role should be allocated to the person(s) most likely to have real-time information about the ongoing activity.
Section 4 - Procedure
Stage 1
Initiate
Stage 2
Approve
Stage 3
Negotiate and Execute
Stage 4
Manage
Stage 5
Review
Stage 1 – Initiate
Stage 2 - Approve
Stage 3 – Negotiate and Execute
Stage 4 - Manage
Table 1 Third-Party Interest Additional Reporting Requirements
Structure Type
Entity Reporting for Council oversight
20-50% equity holding / voting power – existing entity
Joint VentureAnnual audited statutory accounts
Annual assurance that legal, compliance & statutory obligations have been met and conflicts of interest are managed (where a Council or
Investments in the entity (where applicable)
Joint Operation
Annual financial report per terms of the arrangement
Annual assurance that legal, compliance & statutory obligations have been met and conflicts of interest are managed (where a Council or
Investments in the entity (where applicable)
Spinout
Annual reporting of spinout company investments, where the
Start Up Investment 20-50% equity holding
Annual reporting of Start-Up company investments, where the
Stage 5 - Review
Section 5 - Exit or Termination of Activity
Section 6 - Appendices