BOARD CHARTER

PURPOSE
The Board Charter sets out the role, composition and responsibilities of the Board of Adtrans Group Ltd (ADG) within the governance structure of ADG and its wholly-owned entities.

COMPOSITION
  • The ADG Constitution provides for a minimum of three (3) Directors and a maximum of ten (10).
    The Board has adopted a policy to have at least six (6) Directors.
    The Board may review this requirement from time to time.
  • The majority of the Board is not made up of independent Directors.
    ADG is unique in some ways, in that used vehicle inventories, including heavy duty trucks, represent the largest portion of shareholders' funds. Additionally, in common with all automotive retail companies, ADG has very high revenue for comparatively very low net returns. The Board has adopted a policy of having representation by experienced, knowledgeable and competent automotive retail executive Directors along with a minimum of three (3) independent non-executive Directors.
  • Board composition shall be disclosed in the annual report, including whether a Director is independent or not independent.
  • In accordance with the ADG Constitution, one third of Directors, excluding the Managing Director, must retire at each general meeting. No Director may hold office past the third annual general meeting following the Director's appointment, or three years (whichever is the longer) without re-election.
  • An independent Director is a non-executive Director who is not a member of management and who is free of any business or other relationship that could materially interfere with the independent exercise of their judgment.
When determining the independent status of a Director, the Board consider whether the Director:
  • Is a substantial shareholder of the Company or an officer of, or otherwise associated directly with, a substantial shareholder of the Company.
  • Is employed, or has previously been employed in an executive capacity by the Company or another group member, and there has not been a period of at least three years between ceasing such employment and serving on the Board.
  • Has within the last three years been a principal of a material professional advisor or a material consultant to the Company or another group member, or an employee materially associated with the service provided.
  • Is a material supplier or customer of the Company or other group member, or an officer of or otherwise associated directly or indirectly with a material supplier or customer.
  • Has a material contractual relationship with the Company or another group member other than as a Director.
  • In the context of Director independence, materiality is considered from both the Group and individual Director perspective. The determination of materiality requires consideration of both quantitative and qualitative elements. An item is presumed quantitatively immaterial if it is equal to, or less than, 5% of the appropriate base amount. It is presumed to be material (unless there is qualitative evidence to the contrary) if it is equal to, or greater than, 10% of the appropriate base amount.
RESPONSIBILITIES
  • The role of the Board is to provide guidance and to monitor the company on behalf of its stakeholders.
  • Specifically, the Board is responsible for:
  • Formulating and overseeing implementation of corporate strategy;
  • Ensuring that there are adequate resources available to meet ADG's objectives;
  • Appointing and removing the Managing Director and overseeing succession plans for the senior executive team;
  • Monitoring the performance of ADG management;
  • Ensuring that appropriate risk management systems, internal control and reporting systems and compliance frameworks are in place, and that these are operating effectively;
  • Approving and monitoring financial reporting and capital management, including the dividend policy;
  • Ensuring that ADG has appropriate corporate governance structures in place;
  • Ensuring that all Directors, officers and employees operate within both the letter and the spirit of the company's Code of Conduct;
  • Ensuring that the Board is, and remains, appropriately skilled to meet the changing needs of the company.
  • The Board has delegated responsibility for day-to-day management of the company to the Managing Director.
CHAIRMAN
  • The role of the Chairman is to lead the Board and ensure that it works effectively and discharges its responsibilities.
  • The Chairman is an executive Director and not an independent Director. The current Chairman is the founder of Adtrans Group and still has a substantial shareholding. The Board believes that Graeme Bignell is the most appropriate person to lead the Board and that he is able to, and does, bring quality and independent judgment to all relevant issues falling within the scope of the role of Chairman.
  • Should the Chairman be absent from a Board meeting then the Deputy Chairman should act as Chairman of the meeting. If both are not present, the members of the Board present at the meeting have authority to choose one of their number to chair that particular meeting.
  • The Chairman is responsible for:
  • Leading the Board in its duties to ADG shareholders;
  • Ensuring that there are processes and procedures in place to evaluate the performance of the Board, its committees and individual Directors;
  • Facilitating effective discussion at Board meetings;
  • Ensuring effective communication with ASX and shareholders; and
  • Ensuring that Directors are provided with accurate and clear information in a timely manner in order to promote effective decision-making by the Board.
MANAGING DIRECTOR
  • The Managing Director is responsible for:
  • Policy direction of the operations of ADG;
  • The efficient and effective operation of ADG;
  • Ensuring that all material matters that affect ADG's operations are brought to the Board's attention; and
  • Recruiting and training good personnel and ensuring their wellbeing.
INDEPENDENT ADVICE
Any Director or member of a Committee of the Board is able to seek external professional advice as necessary, at the company's expense, with the approval of the Chairman - which will not be unreasonably withheld.

BOARD COMMITTEES
To assist the Board with fulfilling its obligations, the Board has established the following committees:
  • Corporate Governance Committee
  • Audit and Risk Committee
  • Remuneration Committee
  • Nomination Committee
The role, composition and responsibilities of each of these committees are set out in each committee's Charter.

SECRETARY
The Company Secretary is responsible for carrying out the administrative and legislative requirements of the Board.

REPORTING
  • Proceedings of all meetings are minuted and signed by the Chairman or the Director who chairs that particular meeting.
  • Minutes of all Board meetings are circulated to Directors and approved by the Board at the next subsequent meeting.
REVIEW OF CHARTER
The Board will review this charter annually to ensure it remains consistent with the Board's objectives and responsibilities.

PUBLICATION OF CHARTER
  • Key features of the charter are to be outlined in the annual report to shareholders.
  • This charter is to be made available to shareholders on the Company's website www.adtrans.com.au.
June 2009