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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:

 

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:

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:

 

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:

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:

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.

Adtrans Group Ltd.
ACN: 008 129 477
First Floor
4 Greenhill Road
Wayville SA 5034
Australia

Tel: +61 8 8373 1991
Fax: +61 8 8373 3712