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## REMUNERATION COMMITTEE (continued) 

The Co-Chief Executive Officers and senior executives have the opportunity to participate in the Company’s bonus scheme where specified criteria are met based on achievement of key individual executive performance criteria and Company performance in relation to profitability, cash flow and other performance indicators. The Co-CEOs can earn a performance bonus, which is capped at $1 million per annum, being a maximum of $500,000 each. 

The Company considers that the remuneration paid to Directors and senior executives is reasonable and fair having regard to comparable companies and the performance and responsibilities of each respective Director and senior executive. 

When there is a material or significant variation in the contractual or compensation arrangements of the Company’s Executive Directors, as appropriate, this is promptly disclosed to ASX under the Company’s Continuous Disclosure Policy. 

The Committee meets at least twice per year. 

During the financial year the Remuneration Committee comprised the following members with their respective appointment dates: 

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The total cash remuneration of Non-executive Directors (being Directors’ Fees paid to anyone not in an Executive capacity), is distinguished from that of Executive Directors and is approved in aggregate by shareholders in general meeting from time to time. The aggregate Non-executive Director fee pool was set at $1.3 million per annum at the Company’s 2012 annual general meeting. 

During the year, Non-executive Directors received $100,000 per annum, payable quarterly in arrears, and were paid $20,000 per annum for each Board Committee on which they served, other than for the Nomination Committee whose members were paid $10,000 per annum. Board Committee Chairs are paid an additional $10,000 per annum and the Lead Independent Director and Deputy Chairman are paid an additional $30,000 per annum in recognition of their increased workload. Non-executive Directors may also receive additional fees for serving on Boards of subsidiary companies. 

The Company does not have, and never has had, a retirement benefit scheme for Non-executive Directors, other than any individual statutory superannuation benefits which are included as part of their total Director’s Fee remuneration. 

In addition, the Company encourages Executive and Non-executive Directors to hold shares in the Company. Subject to any necessary approvals as may be required by law or ASX Listing Rules, Directors may be invited from time to time to participate in equity plans offered by the Company. In March 2011 shareholders approved the Directors’ Share Plan, which was renewed at the Company’s 2013 annual general meeting, which enabled all or a specified portion of Director’s Fees to be sacrificed into shares in the Company. The shares are allotted based on the weighted average share price applicable during the first week of the third month of each quarter. 

The various share and option entitlements of all Directors and any changes to those holdings are advised to ASX in accordance with the Listing Rules and Corporations Act 2001 requirements and are set out in the Directors’ Report. 

## CORPORATE GOVERNANCE COMMITTEE 

The Company introduced a Corporate Governance Committee in 2012 which comprises three Independent Non-executive Directors, the Chair of which may not be the Chair or Co-Chair of the Board or of the Audit & Risk Committee. The Committee meets at least three times per year. 

In accordance with its charter, the Committee’s primary role and purpose is to provide oversight on behalf of the Board to ensure the Company and the VRL group of companies have appropriate governance structures and procedures in place, whilst noting that all members of the Board have collective accountability for the good governance of the Company and the Group. 

The Committee’s objectives include the review of the Company’s existing corporate governance framework and recommending any desired changes to: 

– Promote an environment within the Company and the Group where good governance continues to be part of the fabric and culture of the Group; 

– Promote consistency with the ASX Recommendations where appropriate to the circumstances of the Company and to explain any departures from these ASX Recommendations; 

– Monitor and promote effective communication with shareholders and other stakeholders including the operation of the Company’s Continuous Disclosure Policy; 

– Ensure that shareholders’ rights are respected and protected; 

– Ensure the various policies, practices and procedures are consistent with the Company’s core values; 

– Review and report to the Board on appropriate protocols and processes for decision making by the Board, and ensuring the Board considers material investments, acquisitions or divestitures and in particular the practices and procedures for dealing with any real or perceived conflict of interest; 

– Ensure the appropriate delegation of authorities are in place to support sound decision making processes that complement the Company’s mission statement; and 

– Provide a forum for the Company to consider and address as required any emerging governance trends or legislative changes in a timely manner. 

During the financial year the Corporate Governance Committee comprised the following members with their respective appointment dates: 

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## EXECUTIVE COMMITTEE 

The Executive Committee monitors and reports on the major risks affecting each business segment and develops, subject to approval of the full Board, strategies to mitigate these risks. The Executive Committee deals with all other matters apart from those matters specifically reserved for the Board, or its Audit & Risk Committee, Corporate Governance Committee, Nomination Committee and Remuneration Committee. 

The key functions and responsibilities of the Executive Committee include: 

– Development of the strategic plan which encompasses the Company’s vision, mission and strategy statements and stakeholders’ needs; 

– Implementation of operating plans and budgets by management and monitoring progress against budget as well as monitoring all significant areas of the business; 

– Approval and monitoring of capital expenditure, capital management, acquisitions and divestitures, and approval of contracts up to A$10 million (excluding any new business of strategic importance or direction to the Company regardless of size); 

– Establishment of committees to monitor and report on all aspects of risk management including insurance, environmental issues and health and safety matters; 

– Review cash flow projections, banking mandates, covenant compliance, and gearing; 

– External communication with the investment community and external stakeholders; 

– Treasury responsibility including advising the Board on liquidity, currency and interest rate risk and credit policies; and 

– Review the Company’s code of conduct and corporate governance compliance. 

The Executive Committee and various Divisional Boards of the Company’s subsidiaries and associated entities derive their mandate and operate in accordance with the Group’s formal Delegation of Authority documents. The Delegation of Authority documents are reviewed and updated as required on an annual basis, with major changes approved by the Board upon the recommendation of the Company’s Corporate Governance Committee. 

The Committee comprises all Executive Directors of the Company and specified corporate management nominated by the Co-CEOs from time to time. All members of the Executive Committee are the Company’s specified Key Management Personnel for the purposes of the Corporations Act definition. The Committee meets on an as required basis. 

During the financial year the members of the Executive Committee were: 

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