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## CORPORATE GOVERNANCE STATEMENT (CONTINUED) 

## BOARD OF DIRECTORS – COMPOSITION AND MEMBERSHIP (continued) 

All Directors have direct access to the Company Secretaries who are accountable to the Board and are appointed and removed by the Board. All Directors are entitled to seek independent professional advice at the Company’s expense, subject to the prior approval of one of the Co-Chairs, such approval not to be unreasonably withheld. 

The Chair or Co-Chairs of the Company are determined by the Board of Directors, recognising the Company’s ownership structure. This is at variance to ASX Recommendations. The Board is of the opinion that the executive roles of the incumbent Co-Chairs in the day to day operations of the Company add significant value to the Company due to their considerable skills and experience in the Company’s businesses. 

In accordance with good practice, as the Co-Chairs of the Board are not Independent Directors, the Board of Directors considers it to be useful and appropriate to designate an Independent Non-executive Director to serve in a lead capacity to co-ordinate the activities of the other Non- executive Directors. Dr. P.D. Jonson held this role from 26 November 2008 to 30 June 2014 and from 1 July 2014 Mr. D.J. Evans was appointed Lead Independent Director. 

## AUDIT & RISK COMMITTEE 

In accordance with its Charter, all 3 members of the Audit & Risk Committee are Independent Directors with appropriate skills, expertise and experience. The Chair of the Committee is an Independent Director who is not one of the Co-Chairs of the Board. The Audit & Risk Committee reports directly to the Board. 

The role and responsibilities of the Audit & Risk Committee include: 

– Reviewing all external reporting (published financial statements including interim statements and year-end audited statements, preliminary announcement of results prior to publication) with management and the external auditors prior to their approval by the Board, focusing in particular on: 

– Significant changes in accounting policies and practices; 

– Major judgmental areas and significant audit adjustments; 

– Adequacy and reliability of financial information provided to shareholders; and 

– Compliance with statutory and ASX reporting requirements; 

– Discussing any matters arising from the audit with the external auditor; 

– Reviewing the selection, performance, independence and competence of the external auditor – Ernst & Young was appointed on 12 April 1989 and since 2003 the audit partner is rotated every 5 years; 

– Approving the Internal Audit plan annually and assessing the performance of the internal audit function; 

– Receiving reports from the Management, Risk and Compliance Committee and assessing the adequacy and effectiveness of the Company’s internal controls and risk management and compliance framework including the appropriate insurance principles for the Company’s businesses; and 

– Discussing the scope and effectiveness of the audit with the external auditor. 

During the financial year the Audit & Risk Committee comprised the following members with their respective appointment dates: 

<img src='content_image/216192.jpg'>

The qualifications and experience of the members of the Committee are set out in the Directors’ Report, as are the Directors’ attendance at Committee meetings during the year. 

The Audit & Risk Committee meets at least three times per year and, in addition to verbal reports by the Committee Chair to the Board, the minutes of the Committee are provided to all Directors of the Company. 

The Co-Chief Executive Officers and the Finance Director, as Chief Financial Officer, provide written representations to the Board under section 295A of the Corporations Act 2001  that, in their opinion, the Company’s financial reports for a period present a true and fair view of the Company’s financial condition and the operational results and are in accordance with relevant accounting standards and that the financial records of the Company have been properly maintained and that their opinion has been formed on the basis of a sound system of risk management and internal controls which is operating effectively in all material respects. 

The Committee invites the audit partner to its meetings and senior Company executives as required. In addition the Committee meets with the external auditor without management being present and the auditor is 

provided with the opportunity, at their request, to meet the Board of Directors without management being present. 

## NOMINATION COMMITTEE 

In accordance with its Charter, the Nomination Committee comprised a majority of Independent Directors and included the Chair of the Company who is a representative of the Company’s major shareholder. From 1 July 2014 the Committee’s charter was updated with the Committee comprising at least three Independent Directors with the Chair of the Committee being an Independent Director appointed by the Board. 

The responsibilities of the Nomination Committee include recommending new nominees to the Board. Whilst no formal Board skills matrix is used, which is at variance to ASX Recommendations, the Committee takes into account the required skill set, appropriate diversity considerations, relevant industry expertise and experience of potential candidates, as recommended by the Corporate Governance Committee, to complement that of existing Board members. Consideration is also given to the size and shareholder structure of the Company such that an incoming director would be able to make an overall positive contribution to the deliberations of the Board without adversely impacting on efficient decision making by the Board as a whole so that the Board can discharge its duties and responsibilities effectively. 

The Nomination Committee meets at least annually and the Board is appraised by the Chair as appropriate on any relevant developments. The Board has recognised that based on its size and composition, the Nomination Committee may meet informally, on an ‘as needs’ basis as and when a suitable candidate may be available for nomination. 

Given the Company’s ownership structure and the composition of the Board, the assessment of the Board’s overall performance and its own succession plan is conducted informally by the Co-Chairs and Directors on an ad hoc basis. Whilst this process is at variance to ASX Recommendations, the Board considers that this review methodology for the appointment of Directors to the Board and of the performance of the Board has served the Company well over many years and that a more prescriptive process is not appropriate for the Company. 

From 1 July 2014 all relevant appropriate checks of director candidates, such as character, experience, education, criminal record and bankruptcy history are carried out by the Nomination Committee prior to any decision by the Board to appoint any person as a Director of the Company. 

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

<img src='content_image/216201.jpg'>

On 30 June 2014 Mr. R.G. Kirby resigned from the Committee and on 1 July 2014, Dr. P.D. Jonson took his place as a member and as Chair. 

## REMUNERATION COMMITTEE 

During the year the Committee comprised three Independent Directors. The Committee invites the Co-Chief Executive Officers and/or Finance Director to meetings when requiring input on management and divisional performance. 

The Committee’s Charter makes it responsible for determining and reviewing compensation arrangements for and performance evaluation of the Company’s Executive Directors and senior managers at least annually against nominated criteria, with the overall objective of motivating and appropriately rewarding performance. The decisions are made in line with the Company’s present circumstances and goals to ensure shareholders benefit from the attraction and retention of a high quality Board and senior management team. 

The remuneration strategy, policy, objectives and structure of the Company’s remuneration arrangements and remuneration outcomes for the year are set out annually in the Company’s Remuneration Report, as part of the Directors’ Report to shareholders. 

The Remuneration Committee is responsible for the compensation arrangements of all senior divisional and corporate executives. This includes any proposed equity allotments or shadow equity plans, profit share arrangements or bonus payments. The Company’s Key Management Personnel are precluded from hedging any incentive remuneration, including any equity awards granted to them, under the Company’s KMP Incentive Remuneration Hedging Policy. 

The Executive Directors are responsible for recommending the compensation arrangements for senior divisional and corporate executives for approval by the Committee. 

The Company and the Committee periodically obtain independent advice from external consultants and utilise benchmarks from comparable organisations. 

