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DIRECTORS’ REPORT CONTINUED

Independent professional advice

Each director has the right of access
to all relevant Company information and
to the Group’s executives and, subject
to prior consultation with the Chairman,
may seek independent professional
advice from a suitably qualified advisor
at the Group’s expense. The director
must consult with an advisor suitably
qualified in the relevant field, and obtain
the Chairman’s approval of the fee
payable for the advice before
proceeding with the consultation.
A copy of the advice received by the
director is made available to all other
members of the Board.

Directors’ Retirement Plan

The Directors’ Retirement Plan was
suspended in May 2003 and directors
appointed to the Board after that date
are not entitled to participate in the
Directors’ Retirement Plan.

Eligible directors in office prior to the
suspension of the plan in May 2003
are able to participate in the plan.
Subject to the Corporations Act 2001,
those eligible directors with more than
three years service receive a retirement
lump sum based on the length of
service. The retirement plan benefits
accrue on a monthly basis and reaches
the maximum amount after 12 years
service. The benefit is capped to a
maximum lump sum per eligible
director of $165,000. The Chairman
and Managing Director are not eligible
to participate in the Directors’
Retirement Plan.

Performance assessment

The Chairman annually assesses the
performance of individual directors
and meets privately with each director
to discuss this assessment. At this
same time, directors are able to
provide feedback on the performance
of the Chairman.

Remuneration

Nomination and Remuneration
Committee

The majority of the Nomination and
Remuneration Committee members
are non-executive directors. The role
of the Nomination and Remuneration
Committee is to review and make
recommendations to the Board in
regard to appointments and
remuneration including:

•
the appointment of the Managing
Director;
•
the proposed remuneration strategy
and package for the Managing
Director and senior executives; and
•
succession plans for senior
executives.
The Committee also acts as a
nomination committee and reviews the
need for appointment of new directors
for recommendation to the Board and
shareholders for approval.

The members of the Nomination and
Remuneration Committee during the
year were:

•
AJ Clark (Chairman) — non-
executive independent director;
•
RM Graham — non-executive
independent director; and
•
AG Rydge — non-executive director.
DC Seargeant — Managing Director, is
invited to attend committee meetings.

The Nomination and Remuneration
Committee meets twice a year and
further as required.

Remuneration report

The remuneration report is set out on
pages 31 to 40 and forms part of the
directors’ report for the year ended
30 June 2007.

Audit Committee

The role of the Audit Committee is
documented in a Charter, which is
approved by the Board. The role
of the committee is to serve as an
independent and objective body to
monitor the Group’s financial reporting
process and internal control systems.
The committee also reviews and
appraises the audit results of wholly-
owned entities, and associates and
partnerships, and provides an open
avenue of communication between the
Board, internal and external auditors,
and senior executives. The Audit
Committee consists of non-executive
directors the majority of whom are
independent, and is chaired by an
independent director who is not the
Chairman of the Board.

All committee members are familiar with
finance and accounting procedures.

The Audit Committee’s Charter is available
on request from the Company Secretary.

The members of the Audit Committee
during the year were:

•
AJ Clark (Chairman) — non-
executive independent director;
•
RM Graham — non-executive
independent director; and
•
AG Rydge — non-executive director.
The Managing Director, Director Finance
& Accounting, the Company Secretary,
the Group Internal Audit Manager, and
the external auditors are invited to attend
committee meetings. Other executives
may be invited to committee meetings
at the discretion of the committee.

The responsibilities of the Audit
Committee include:

•
reviewing the financial reports
and other financial information
distributed externally;
•
reviewing any new accounting
policies to ensure compliance
with Australian Accounting
Standards and generally
accepted accounting principles;
•
monitoring compliance with
the Corporations Act 2001, the
Listing Rules and other legislative
and reporting requirements;
•
monitoring the corporate risk
assessment process;
•
reviewing the performance of the
external auditors and approving
the external annual audit fee. The
external audit engagement partner
was last rotated in August 2006;
•
liaising with the external auditors
and ensuring that the annual
statutory audit and half-year
review are conducted in an
effective manner;
•
assessing whether non-audit
services provided by the external
auditor are consistent with
maintaining the external auditor’s
independence. Each reporting
period the external auditor provides
an independence declaration in
relation to the audit or review;
•
providing advice to the Board in
respect of whether the provision
of the non-audit services by the
external auditor is compatible
with the general standard of
independence of auditors imposed
by the Corporations Act 2001;

•
approving the annual internal audit
plan, and evaluating and monitoring
the internal audit function;
•
reviewing internal and external audit
reports and ensuring appropriate
follow-up action;
•
reviewing reports on frauds and
theft and ensuring appropriate
follow-up action;
•
monitoring the establishment of
appropriate ethical standards; and
•
addressing any matters outstanding
with the external auditors or
statutory authorities.
The Audit Committee meets at least four
times per year. The committee reviews
the performance of the external auditors
on an annual basis and meets with them
during the year to discuss a number of
matters including the external audit plan,
proposed fees for audit work to be
performed, half-year and annual reporting
and other matters as necessary. The
Audit Committee, in scheduled sessions
at the end of each meeting, without the
presence of management, addresses
questions to the external auditors and
Group Internal Audit Manager on
matters relating to the committee’s
responsibilities. Relevant matters arising
from these sessions are shared with
the full Board.

Risk management

Risk profile and oversight of the risk
management system

The Board oversees the establishment,
implementation, and annual review of
the Company’s Risk Management
System. Management has established
and implemented the Risk Management
System for assessing, monitoring and
managing operational, financial
reporting, and compliance risks for the
Group. Divisional Managing Directors
and other senior executives complete
and sign off on an annual Directors’
Risk Management Questionnaire.
The operational and other compliance
risk management procedures have
also been assessed and found to be
operating efficiently and effectively.
All risk assessments covered the whole
year and the period up to the signing
of the annual financial report for all
material operations in the Group.

As well as the questionnaire, matters
relating to the business risk and risk
management system are analysed
and discussed as part of the annual
strategic planning process. The Board

provides assistance to management in
the development and maintenance of
processes to minimise and mitigate
business risks.

Financial reporting

The Managing Director and the Director
Finance & Accounting have declared, in
writing to the Board that the Company’s
financial reports are founded on a sound
system of risk management and internal
compliance and control which implements
the policies adopted by the Board.

Monthly actual results are reported
against budgets approved by the
directors and revised forecasts for
the year are prepared regularly.

Internal audit

The Group Internal Audit Manager
assists the Board in ensuring compliance
with internal controls and risk management
programs by regularly reviewing the
effectiveness of compliance and control
systems. The Audit Committee is
responsible for approving the program
of internal audit visits to be conducted
each year and the scope of the work
to be performed at each location.

Code of Conduct and Ethical Standards

The Company has a Code of Conduct
and Ethical Standards (“Code”), which
has been endorsed by the Board and
applies to all directors and employees.
The Code is regularly reviewed and
updated as necessary to ensure it
reflects the highest standards of
behaviour and professionalism and
the practices necessary to maintain
confidence in the Group’s integrity.

In summary, the Code encapsulates that
all directors, managers and employees
are expected to act with the utmost
integrity and objectivity, striving at all
times to enhance the reputation and
performance of the Group. Every
employee has a nominated supervisor
to whom they refer any issues arising
from their employment.

The Board reviews the Code regularly
and processes are in place to promote
and communicate these policies.

The Company has a Whistleblowing
Policy for the Australian operations.
The policy is designed to support and
protect employees who report noncompliant,
suspicious or unethical
conduct by other employees of the
Group, regardless of seniority of those
involved in the alleged conduct. The
policy formalises the Company’s

commitment to protect the confidentiality
and position of employees wishing to
raise serious matters that affect the
integrity of the Company and Group.

All senior management personnel are
required to complete legal compliance
training at least once every two years.
The training covers such topics as:

•
contract formation and pitfalls;
•
indemnities in contracts;
•
issues relating to the Trade
Practices Act 1974;
•
employment contracts, termination
and redundancy;
•
harassment and discrimination;
•
occupational health and safety
obligations; and

•
corporate policies, including limits
of authority and overview of the
Corporations Act 2001.
Dealing in Company shares by directors
and employees

The Constitution allows directors to
acquire shares in the Company.
However, it is the policy of the Company
that directors only buy or sell shares in
the Company in the six-week period
immediately following any price sensitive
announcement including the half-year
and full-year results, and the Annual
General Meeting. Purchases outside
of this period must receive the prior
approval of the Board. This policy is
subject to the overall restriction that
persons may at no time deal in any
securities when they are in possession
of price sensitive information. This policy
is also applicable to employees of the
Group and the policy is outlined in
the Code.

All directors have entered into written
agreements to notify the Company
Secretary when they buy or sell shares
in the Company. In accordance with the
provisions of the Corporations Act 2001
and the Listing Rules, the Company
Secretary advises the ASX of any
transactions conducted by directors in
shares in the Company. This information
is also reported to the Board.

Environment

The Group’s operations are subject to
various environmental regulations under
Commonwealth, State or Territory and
other applicable legislation.