Corporate Governance

Terms of Reference of Board Committees

To assist in the execution of its responsibilities, the Board has established a number of Board Committees comprising an Audit and Financial Risk Committee, Nomination and Corporate Governance Committee, and Remuneration and Succession Planning Committee.

These committees have written terms of reference, which are regularly reviewed. Matters attended to by Board Committees are reported to the Board following each committee meeting. Board Committees are authorised to seek any information they require from any officer or employee of the Company and may take such independent professional advice, as they consider necessary. They have no executive powers regarding their findings and recommendations. The Chairman and a majority of members of each Committee are independent non-executive directors.

The Chairman of each Committee reports the findings and recommendations of the Committee to the Board after each Committee meeting. The minutes of all Committee meetings are circulated to members of the Board. The Chairman of each Committee submits an annual report to the Board summarising the Committee's activities during the year and the related significant results and findings.

Set out below are summaries of the terms of reference of each Board Committee.

AUDIT AND FINANCIAL RISK COMMITTEE

Meetings shall normally be held at least three times a year or as otherwise determined by the Board.

Responsibilities

• The Committee shall consider any appropriate matters relating to the financial affairs of the Company and its subsidiary companies and to the Group's external audit. In addition, the Committee shall examine any other matters referred to it by the Board.
• The duties of the Committee are as follows:
  • Monitor any matters outstanding with auditors, Australian Taxation Office, Australian Securities & Investments Commission, Australian Stock Exchange and financial institutions and monitor compliance with the Corporations Act 2001 and ASX Listing Rules;
  • Monitor corporate risk assessment and internal controls;
  • Review and monitor compliance with the Company's Auditor Independence Policy;
  • liaise with external auditors;
  • review the annual audit plan with the auditors;
  • review information derived from the audit;
  • review interim financial information;
  • review accounting policies;
  • review effectiveness of internal audit and cross divisional reviews;
  • monitor risks relating to business continuity, disaster recovery, reputation, currency exposure and interest rate exposure;
  • review compliance with relevant government regulations;
  • assess the performance of financial management;
  • review adequacy of insurance coverage;
  • recommend to the Board the appointment, re-appointment or replacement of the external auditors;
  • review performance and compensation of the external auditors; and
  • supervise special investigations as directed by the Board

NOMINATION AND CORPORATE GOVERNANCE COMMITTEE

The Committee will meet as often as necessary, but must meet at least four times a year.

Purpose

The purpose of the Committee is to assist the Board by:

• monitoring the size and composition of the Board and its Committees;
• recommending individuals for nomination as members of the Board and its Committees;
• reviewing Board succession plans;
• ensuring that the performance of the Board and its Committees is reviewed;
• ensuring that the Board Chairman reviews the performance of each Board member; and
• establishing and monitoring the procedures to protect the ethical standards of the Group.

Responsibilities

In addition to any other matters which may be delegated to the Committee by the Board (including special investigations), the Committee is responsible for:

• Size and Composition of the Board
  • regularly reviewing the size and composition of the Board and making recommendations to the Board with regard to any appropriate changes;
  • advising the Board regarding competencies required of Directors;
  • establishing and using a criteria for membership selection;
  • making recommendations to the Board regarding re-election of Directors retiring by rotation;
• New Directors
  • developing a policy and procedures for the selection and appointment of Directors;
  • identifying individuals potentially suited to become Directors;
  • ensuring that an effective orientation program for new Directors is in place, and reviewing as necessary its effectiveness;
• Board Committees
  • identifying Directors qualified to fill vacancies on Board Committees and making recommendations to the Board in relation thereto;
• Succession Plans
  • establishing and reviewing Board succession plans on a regular basis to maintain an appropriate balance of skills, experience and expertise on the Board and providing advice to the Board on those matters;
• Performance
  • developing and implementing a plan for identifying, assessing and enhancing Director competencies;
  • Establishing procedures for use by the Committee to evaluate the performance of the Board and each Director;
• Board Guidelines
  • considering and making recommendations to the Board on the Board's operating guidelines;
• Corporate Governance
  • periodically reviewing the Company's Corporate Governance Guidelines and establishing procedures to promote compliance;
  • periodically reviewing the Corporate Code of Practice, as well as procedures to promote compliance;
  • approving and reviewing policies on sensitive issues or practices such as:
    • Environmental issues;
    • Equal Opportunity Policy; and
    • Drugs and Alcohol
    • periodically reviewing the Company's Continuous Disclosure Policy.

REMUNERATION AND SUCCESSION PLANNING COMMITTEE

Meetings shall normally be held at least twice per year

• Responsibilities
  • The Remuneration and Succession Planning Committee shall review and make recommendations to the Board on remuneration packages and policies applicable to the Managing Director), Executive Director Operations and Non Executive Directors, and where considered appropriate Senior Executives (including any other Executive Director).
  • Remuneration levels are to be competitively set to attract appropriately qualified and experienced Directors and Senior Executives.
  • The duties of the Remuneration and Succession Planning Committee are as follows:
    • review remuneration, allowances and incentives of the Managing Director and Executive Director Operations;
    • review Non-Executive Directors fees;
    • review and make recommendations to the Managing Director on remuneration, allowances and incentives of other Executive Directors ;
    • review and ratify senior executive remuneration, allowances and incentives;
    • oversee compliance with statutory responsibilities relating to remuneration disclosure;
    • review policies and reporting responsibilities relating to employee share and option plans;
    • review the Company's superannuation plan and compliance with relevant laws and regulations;
    • review senior executive and Director retirement and termination payments;
    • review and monitor fringe benefits;
    • review adequacy of professional indemnity and Directors and Officers liability insurance policies;
    • monitor executive succession planning.

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