STATEMENT OF CORPORATE GOVERNANCE PRACTICES
The Board of Directors of Adtrans Group is responsible for the corporate
governance of the consolidated entity. The Board has agreed to adopt the
ASX Corporate Governance Council's Principles of Good Corporate Governance
and Best Practice Recommendations and is pleased to report that its practices
are largely consistent with those of the ASX guidelines. Where the Adtrans
corporate governance practices do not correlate with the practices recommended
by the Council details are disclosed in this statement.
Structure of the Board
Please select the link for the names of the Directors and their qualifications
and experience.
Adtrans has adopted the definition of "independent Director" as outlined in recommendation 2.1 of the ASX Corporate Governance Best Practice Guidelines.
In the context of Director independence, "materiality" is determined based on quantitative and qualitative elements. An item is material (unless there is qualitative evidence to the contrary) if it is equal to or greater than 10% of the appropriate base amount.
In accordance with the definition of independence and the materiality thresholds the following Directors of Adtrans Group are considered to be independent:
JH Heard
C Stillwell
RG Grigg
SJ Officer (appointed 24/8/06)
MA Ward (appointed 3/5/07)
The Board is made up of five non-executive Directors, four of whom are independent, and four executive Directors. Adtrans is unique in some ways in that vehicle inventories, including heavy-duty trucks, represent the largest portion of shareholders' funds. Additionally, in common with all automotive retail companies, Adtrans 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.
The Chairman is an executive Director, not an independent Director. The current Chairman is the founder of Adtrans Group and still has a substantial shareholding. The Board believes that Mr 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.
The Managing Director is responsible for the day to day management of the Company. There are procedures in place, which have been agreed by the Board, to
enable Directors to seek independent professional advice at the Company's
expense.
The term of each Director in office as at September 2007 is as follows:
| Name | Term |
| GD Bignell | 20 years |
| JH Heard | 16 years |
| C Stillwell | 7 years |
| SA Swift | 4 years |
| A Spagnuolo | 13 years |
| DL Holst | 6 years |
| RG Grigg | 3 years |
| SJ Officer | 1 year |
| MA Ward | Appointed 3/5/07 |
Nomination Committee
The Board has established a Nomination Committee, which meets
at least annually to ensure that the Board continues to operate within the
established guidelines including, where necessary, selecting candidates
for the position of Director.
The Nomination Committee comprises the following members:
GD Bignell (Chair)
JH Heard
MA Ward (appointed 21/6/07)
For details of Directors' attendance at meetings of the Nomination Committee refer to the Annual Report (page 6).
Audit and Risk Committee
The Audit and Risk Committee operates under a charter approved by the Board. The
committee provides assistance to the Board in fulfilling its corporate governance
and oversight responsibilities in relation to the Company's financial reporting
and internal control structure, and the internal and external audit functions.
The committee will assist the Board with its responsibility for the oversight of risk management. The committee continues to review the Company's risk management and control framework for all risks, not limited to financial reporting risks. The Managing Director, Company Secretary and Chief Group Accountant provide the Board with written confirmation that the Company's financial reports present a true and fair view, in all material respects of the Company's financial condition and operational results are in accordance with relevant accounting standards and are founded on sound systems of risk management and internal compliance and control.
The Audit Committee comprises three members, all of whom are independent Directors.
The members of the Audit Committee during the year were:
JH Heard (Chair)
RG Grigg
SJ Officer (appointed 24/8/06)
For details of Directors' attendance at meetings, and the qualifications of Mr Heard, Mr Grigg and Mr Officer as members of the Audit Committee, refer to page 6 of the Annual Report.
Remuneration Committee
The Board is responsible for determining and reviewing compensation arrangements
for the Directors and the executive team. The Board has established a Remuneration
Committee, comprising at least three Directors, the majority of whom shall
be independent. Members of the Remuneration Committee during the year were:
GD Bignell (Chair)
JH Heard
C Stillwell
RG Grigg
MA Ward (appointed 3/5/07)
For details of the Directors' attendance at meetings of the Remuneration Committee held during the year refer to page 6 of the Annual Report.
It is the Company's objective to provide maximum stakeholder benefit from the retention of a high quality Board and executive team by remunerating Directors and senior management fairly and appropriately with reference to relevant employment market conditions. To assist in achieving this objective, the Remuneration Committee links the nature and amount of executive Directors' and officers' emoluments to the Company's financial and operational performance. The expected outcomes of the remuneration structure are:
- Retention and motivation of key executives
- Attraction of quality management to the Company
- Performance incentives which allow executives to share the rewards of the success of Adtrans
For a full discussion of the Company's remuneration philosophy and framework and the remuneration received by Directors and executives in the current year, please refer to the Annual Report.
A retirement allowance exists for non-executive Directors. For details refer to the Annual Report.
Continuous disclosure
Adtrans has written policies and procedures
designed to ensure compliance with ASX Listing Rule disclosure requirements
and to enforce accountability at senior management level for that compliance.
The Board has endorsed these policies.
Communication with shareholders
Adtrans Group has a communications policy to promote
communication with shareholders.
Performance
The Board has a performance evaluation policy. Each
year the Chairman meets separately with each non-executive Director to discuss
individual performance and ideas for improvement. The Board as a whole discusses
and analyses its own performance during the year, including suggestions
for change or improvement.
Code of conduct
Adtrans Group has adopted a code of conduct to guide compliance
with legal and other obligations to legitimate stakeholders.
Director and employee share trading policy
All information obtained or obtainable as a Director or employee of the
Company is the property of the Company and may not be used for any purpose
other than in the conduct of the affairs of the Company.
All information of the Company is strictly confidential and must not be disclosed to any entity, except as required in the ordinary course of the operations of the Company, or used by Directors or employees for personal benefit or gain.
As a matter of law, Directors and Company employees may not buy or sell shares in the Company if they possess information that, if disclosed publicly, might have a material effect on the price or value of the Company's shares.
The procedure for Directors and employees trading Company shares is as follows:
All dealings by Directors and General Managers are to be previously advised (in advance of trade) to the Chairman for clearance, with all other employees advising the Managing Director or the Company Secretary.
All completed trades with reference to the above approvals must be notified to the Company Secretary, who must keep all relative details of such dealings and ensure that appropriate notification, signed by the relevant Director, is given to the Australian Stock Exchange.
General share trading is prohibited during periods of account preparation
and audit preceding the preliminary announcement of the Company's annual
and half-yearly results. The specific dates are recorded in the Company's
internal staff policy manual.