
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 Corporate Governance Principles and 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.
Board Function
The Board seeks to identify the expectations of the shareholders as well as other regulatory and ethical expectations and obligations. The Board is responsible for identifying areas of significant risk and ensuring arrangements are in place to adequately manage those risks. Specific Board responsibilities are set out in the Board Charter.
The responsibility for the operation and administration of Adtrans Group is delegated by the Board to the Managing Director and the executive management team. The Board ensures that this team is appropriately qualified and experienced to discharge their responsibilities and has in place procedures to assess the performance of the Managing Director and the executive management team.
The Board has established the following subcommittees to assist with fulfilling responsibilities:
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Nomination
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Audit and Risk
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Remuneration
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Corporate Governance
Structure of the Board
Please select the link for the names of the Directors and their qualifications
and experience.
The skills, experience and expertise relevant to the position of Director held by each Director in office at the date of the annual report are included in the Directors’ Report.
Directors of Adtrans Group Limited are considered to be independent when they are independent of management and free from any business or other relationship that could materially interfere with the exercise of their judgement.
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 provided, the following Directors of Adtrans are considered to be independent:
JH Heard
C Stillwell
RG Grigg
SJ Officer
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.
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 2009 is as follows:
| Name | Term |
| GD Bignell | 22 years |
| JH Heard | 18 years |
| C Stillwell | 9 years |
| SA Swift | 6 years |
| DL Holst | 8 years |
| RG Grigg | 5 years |
| SJ Officer | 3 years |
| MA Ward | 2 years |
Performance
The Board has adopted 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.
The performance of the executive management team is reviewed regularly against both measurable and qualitative indicators.
Durig the reporting period, the nominatin committee conducted performance evaluations of each Board member and the executive management team.
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
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 Audit and Risk Committee comprises three members, all of whom are independent Directors.
The members of the Audit and Risk Committee during the year were:
JH Heard (Chair)
RG Grigg
SJ Officer
For details of Directors’ attendance at meetings of the Audit and Risk Committee refer to page 6 of the Directors’ Report. Refer also to pages 4 and 5 of the Directors’ Report for details of the qualifications of Mr. Heard, Mr Grigg and Mr Officer as members of the Audit and Risk Committee.
The committee will assist the Board with its responsibility for the oversight of risk management. Management is required to carry out risk specific management activities in four core areas:
- Strategic risk
- Financial risk
- Information Technology risk
- Operational risk.
Management assesses risk management and associated internal compliance and control procedures and reports to the Audit and Risk Committee on any deficiencies in the risk program. During the period, the risk management program was reviewed by the committee.
In accordance with section 295A of the Corporations Act, the Managing Director and Chief Financial Officer have provided a written statement to the Board that:
- Their view provided on the Company’s financial report is founded on a sound system of risk management and internal compliance and control which implements the financial policies adopted by the Board.
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The Company’s risk management and internal compliance and control system is operating effectively in all material aspects.
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
SJ Officer (appointed 24/4/08)
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 the Company.
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 appointed prior to 23 August 2007. For details refer to the Annual Report.
Continuous disclosure
Adtrans Group 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. The Adtrans Group Website is where shareholders can obtain market announcements, press releases, notice of meetings and financial statements. The external auditors, Ernst & Young, attend the annual general meeting and are available to answer shareholder questions about the conduct of the audit and the preparation and content of the auditor's report.
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 preceding the public announcement of the Company's indicative annual and half-yearly results
Adtrans Group's policies and charters are available on the Company's website www.adtransgroup.com.au.