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> Corporate Governance

Corporate Governance

The following statement outlines Wridgways compliance and adherence to the best practice principles for good corporate governance as outlined in the recommendations released on 2 August 2007 by the ASX. During the year all policies have been reviewed and enhanced if appropriate. Details of the key aspects are set out below.

Principle 1: Lay solid Foundations for Management and Oversight

The role of the Board is to oversee and guide the management of Wridgways with the aim of protecting and enhancing the interests of its shareholders, taking into account the interests of other stakeholders, including employees, customers, suppliers and the wider community.

Board Charter and its Role

The Board working with senior management is responsible to shareholders for the overall corporate governance and business performance of the company.

This responsibility includes:

The Managing Director is responsible to the Board for the day-to-day management of Wridgways Australia.

Review of Performance by Senior Executives

Details of the performance review process for senior Executives are set out in the Remuneration Report, which forms part of the Directors’ Report.
An evaluation on the performance of the Managing Director is undertaken each year by the Board.

Principle 2: Structure the Board To Add Value

The Wridgways Board is balanced in its composition. The Board comprises three Non-Executive Directors (including the chairman) and two Executive Directors. The Directors are accountable to shareholders for the proper management of Wridgway’s business and delegate responsibility for day to day management to the Managing Director and senior Executives. The Directors in office at the date of this report, the year of each Directors’ appointment and each Director’s status as an independent, Non Executive or Executive Director are set out in the Annual Report.

Director Independence

All Non-Executive Directors and the chairman are to be independent Directors having no business or other relationship that could compromise their autonomy. They have no other interest or relationship that could interfere in their ability to act in the best interests of the company and independently of management. In considering whether a Director is independent, the Board has had regard to the relationships affecting independent status described in ASX Principle 2 and other facts, information and circumstances that the Board considers relevant. The Board assess the independence of new Directors upon appointment and reviews their independence, and the independence of the other Directors, annually and as appropriate.

The test of whether a relationship is material is based on the nature of the relationship and the circumstances of the Director. Materiality is considered from the perspective of the company, the Director, and the person or entity with which the Director has a relationship.

The two Directors who are not considered to be independent are:

Retirement and Re-election

Non Executive Directors are subject to re-election by rotation every three years. There are presently no maximum terms for Non-Executive Director appointments. Newly appointed Directors must seek election at the first general meeting of shareholders following their appointment. Board support for Directors retiring by rotation and seeking re-election is not automatic. A Non-Executive Director must take into account the views of the other Non-Executive Directors of the company when making a decision to stand for re-election.

All Directors are expected to maintain the skills required to discharge their obligations to the company. Directors are provided with papers, presentations and briefings on group business and matters which may affect the operations of the group.

Committees of the Board

To assist in the effective execution of its responsibilities the board has established an Audit Committee and Remuneration Committee as standing committees to assist the Board in the discharge of its responsibilities.

Because of the size of Wridgway’s Board (ie: three Non-Executive Directors and two Executive Directors), a separate nominations committee is not deemed necessary. The Board reviews and discusses the appointment of new Directors. If it is necessary to appoint a new Director to fill a vacancy on the Board or to complement the existing board, a wide potential base of possible candidates is considered. The Board assesses the qualifications of the proposed new Director against a range of criteria including background, experience, professional skills, personal qualities and the potential for the candidate’s skills to augment the existing Board. If these criteria are met and the Board appoints the candidate as a Director, that Director (as noted above) must retire at the next annual general meeting and will be eligible for election by shareholders at that meeting.

Details of meeting attendance for committee members are set out in the Director’s Report.

A summary of the committee’s Charter is available from the corporate governance section of the Company’s website.

Further information about the Audit Committee is provided in this statement under Principle 4: Safeguard Integrity in Financial Reporting.

Further information about the Remuneration Committee is provided in this statement under Principle 8: Remunerate Fairly and Responsibly.

Induction of New Directors and Access to Information and Independent Advice

New Directors are provided with a formal letter of appointment which sets out the key terms and conditions of appointment, including duties, rights and responsibilities, the time commitment envisaged, and the Board’s expectations regarding involvement with committee work. They are encouraged to visit the company operations to assist them in developing an understanding of Wridgways Australia Limited’s businesses and key drivers.

All Directors have unrestricted access to employees of the group, and subject to the law, access to all company records.

Consistent with ASX Principle 2: and subject to prior consultation with the Chairman, Directors may obtain independent professional advice at the company’s expense on matters arising in the course of their board and committee duties. Directors also have access to senior company managers and company documents at all times.

Conflicts of Interest

Directors are required to avoid conflicts of interest and immediately inform their fellow Directors should a conflict of interest arise. Directors are also required to advise the company of any relevant issues that may result in conflict.

When a potential conflict of interest arises, the Director concerned would not receive copies of the relevant Board papers and would withdraw from the Board meeting while such matters are considered


Principle 3: Promote Ethical and Responsible Decision-Making

It is the policy of Wridgways to conduct business with honesty, integrity, respect and fairness when dealing with its customers and employees. Employees are also required to meet these high standards.The company takes seriously its obligations to comply with all federal, state and local government laws and regulations, as well as common law obligations, and again, requires all employees to do the same.

Code of Conduct

The company has an established code of conduct to guide the Directors and senior employees in the performance of their duties. Details of this code are placed on the company’s website.

It is the policy of Wridgways to conduct business with honesty, integrity, respect and fairness when dealing with its customers and employees. Employees and Directors are expected to:

Wridgways encourages the reporting of unlawful and unethical behaviour, actively promotes and monitors compliance with the Code of Conduct, and protects those who report breaches in good faith.

Share Trading Guidance Note

Directors and employees of the company are subject to the Corporations Act 2001, which prohibits buying, selling or subscribing for shares in the Company if they are in possession of inside information. Inside information is that information which is not generally available and a reasonable person would expect it to have a material effect on the price or value of the shares in the Company.

The Company provides this Guidance Note for Directors to assist them in complying with the Corporation Act 2001 when making a buy or sell decision.

“Directors can engage in buying or selling of the company’s shares in the six-week period after a major announcement by the company. This will usually ensure that the market is fully informed and minimize any risk of breach of the law. The CEO will advise Company employees when a major announcement has been made to the market.”

Each Director has entered into an agreement with the company under which the Director must notify the company secretary of any trade in the company’s shares within three business days.

Any Director buying or selling shares in Wridgways Australia Limited is also required to advise the Chairman in advance of the intention to trade.

There is no minimum shareholding requirements for shareholders.

Principle 4: Safeguard Integrity in Financial Reporting

The board has an established Audit Committee, which monitors internal control policies and procedures designed to safeguard company assets and to maintain the integrity of financial reporting.

The membership of the committee consists of the three independent Non-Executive Directors. The members of the Audit Committee at the date of this report are:

The Managing Director and the Finance Director are invited to attend meetings. The Committee, with the external auditors, meets two times each year, prior to the issue of profit announcements, to review half year and full year financial results, and on an ad-hoc basis to discuss any other issues which might arise. The external auditors have a clear line of direct communication at any time to the chairman of the Board.

The principle functions and objectives of the Audit Committee are to:

The external auditor is permitted to provide Non-audit services that are not perceived to be in conflict with auditor independence, including tax advice services. The board has the right to request the external auditor to carry out a specific assignment, if it is determined by the board that it would be in the best interests of the shareholders and the company.

Independence of the external auditor

Appointment of auditor

The company’s external auditor is Deloitte Touche Tohmatsu.

The effectiveness, performance and independence of the external auditor is reviewed by the Audit Committee.

If it becomes necessary to replace the external auditor for performance or independence reasons, the Audit Committee will formalise a procedure and policy for the selection and appointment of a new auditor.

The Corporations Act 2001 requires the external auditor to make an annual independence declaration, addressed to the board, declaring that the auditor has maintained its independence in accordance with the Corporations Act 2001 and the rules of the professional accounting bodies. Deloitte Touche Tohmatsu has provided an independence declaration to the Board for the financial year ended 30 June 2009.

Rotation of external audit partner

Mr David Watson is the lead audit partner for Deloitte Touche Tohmatsu in relation to the audit of the company.

Mr Watson was appointed in 2008.

Attendance of external auditors at annual general meeting

In accordance with ASX principle 6 and the Corporations Act 2001, Deloitte Touche Tohmatsu attend and are available to answer questions at the company’s annual general meetings.

Principle 5: Make Timely And Balanced Disclosure

The company conveys to its shareholders and the public relevant information in a detailed and timely manner. The board’s policy is that shareholders are informed of all major developments that impact on the company. There is a continuous disclosure policy in place, which is intended to maintain the market integrity and efficiency of the company’s shares listed on the ASX. The disclosure policy is maintained through the board continually monitoring and identifying significant events and from ongoing reviews of business and financial reports.

All ASX releases to be made to the market by the company are approved by the Board or by the Managing Director in consultation with the chairman. The company secretary has a standing authority to approve releases that deal with changes in Director share holdings, Annual General Meeting notifications, addresses and voting results, share issues and broker/analyst presentations.

Information is communicated to shareholders by the company through:

Principle 6: Respect the Rights Of Shareholders

The company maintains communication with shareholders and other stakeholders in an open, regular and timely manner so that members have sufficient information to make informed decisions on the operations and results of the company.

The policy provides for the use of systems involving communiqués and technologies that ensure regular and timely release of information about the company to members. Mechanisms employed include:

Annual General Meeting

The board encourages full participation of shareholders at the company’s Annual General Meeting to ensure a high level of accountability and understanding of the company’s strategy and goals. Important issues are presented to shareholders as single resolutions. The company welcomes and encourages shareholder participation at general meetings to continue to improve the company’s performance and shareholder communications.

Principle 7: Recognise and Manage Risk

Management is ultimately responsible to the board for the system of internal control and risk management. The Audit Committee assists the board in fulfilling its responsibilities in this regard by reviewing the financial and reporting aspects of the company’s risk management and control.

Major exposures for the company stem from Wridgways business risk profile, which covers areas including financial, operational, regulatory, contractual, reputation and strategic risk.

The company has policies, procedures and guidelines in place to ensure that the company’s risks are identified and that controls are adequate. These cover areas such as:

Responsibility for control and risk management is delegated to the appropriate level of management within the company with the Managing Director and Finance Director having ultimate responsibility to the board for the risk management and control framework.

Arrangements in place for the board to monitor risk management include regular reporting to the board in respect of operations and the financial position of the company, circulation to the board of each meeting held by the Audit Committee.

Financial Reporting

Consistent with ASX Principle 7 and section 295A of the Corporations Act 2001, the Managing Director (Chief Executive Officer) and Finance Director (Chief Financial Officer) provide a written statement to the board (“Declaration”) that, in their opinion:

With regard to the financial records and systems of risk management and internal compliance in this written statement, the Board receives assurance from the Managing Director and Finance Director that the Declaration was founded on a sound system of risk management and internal control and that the system was operating effectively in all material respects in relation to the reporting of financial risks.

The primary objective of the risk management process is to maximise shareholder value. It therefore represents an integral part of the business management process. Eliminating all risk, however, adversely affects the ability of the company to take up opportunities for potential reward.

Principle 8: Remunerate Fairly and Responsibly

A program of regular performance appraisals and objective setting for senior management and other staff is in place. The responsibilities of the Remuneration Committee are to review and make recommendations to the Board on:

The Remuneration Committee comprises three Non-Executive Directors. The Managing Director is also invited to attend.

The members of the Remuneration Committee at the date of this report are:

Meetings are to be held at least once a year as part of the annual remuneration review. The number of Remuneration Committee meetings and number of meetings attended by each of the members of the Remuneration Committee during the financial year are set out in the Annual Report.

The Remuneration policy of Wridgways Australia is to establish remuneration practices that:

The remuneration of officers and employees is competitively set to attract and retain appropriately qualified and experienced employees. Remuneration packages include a mix of fixed remuneration and performance based remuneration. At this stage there is no equity-based remuneration. A review of remuneration packages in comparative companies is undertaken to determine the appropriateness of the packages.

For details of remuneration paid to Directors and senior Executives for the financial year please refer to the Annual Report.

The remuneration of Non-Executive Directors is competitive for the industry and in keeping with the responsibilities of public company Directors. Remuneration for Non-Executive Directors comprises fixed fees, which may be in the form of cash, Non-cash benefits and superannuation. No part of the remuneration is incentive-based. For example, bonuses and share options. Also, no retirement benefits will be provided other than statutory superannuation.

Total Directors’ fees for all Non-Executive Directors are not to exceed $200,000 per annum.

Along with their fees Non-Executive Directors are entitled to be paid all travelling and other expenses properly incurred in connection with the affairs of the company. Wridgways Australia Ltd pays a premium to insure Directors liabilities for costs and expenses incurred by them in defending any legal proceedings arising out of their conduct while acting as a Director if Wridgways Australia Ltd, other than conduct involving a wilful breach of duty in relation to Wridgways Australia Ltd.

Corporate Governance Documents

» Board Charter
» Audit Committee Charter
» Remuneration Committee Charter
» Code of Ethics and Conduct
» Market Disclosure Policy
» Share Trading Policy
» Risk Management Policy
» Communication Policy