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Corporate Governance Statement

For the year ended 30 June 2009

The Company has in place internal controls intended to identify and manage significant business risks. These include the review of development proposals and the management of their ongoing performance. Management prepares the Risk Management Plan and the Board is responsible for reviewing and approving it.

The Board has established a Risk Management Committee. The Committee comprises two Independent Directors Mr J Rowley and Mr B Hayman and meets quarterly, or more frequently as circumstances require. The Committee is supported by the Chief Executive Officer, Chief Financial Officer and the Company Secretary. The Risk Management Committee is responsible for monitoring Management’s implementation of the Risk Management Plan, taking the Internal Auditor’s review into account.

The Company’s assets are insured under a comprehensive insurance program which is reviewed annually.

The Company also has an Investments Committee comprising one Non-Executive Director, Mr S Cheong, two Independent Directors, Mr B Hayman and Mr J Rowley and one Non-Director member, Mr David Tsang. The Committee considers all major land development acquisition and disposal proposals that are over monetary limits delegated to management. It also conducts a pre-commencement review and ongoing project reviews during the life of all development projects.

The Chief Executive Officer and the Chief Financial Officer have given the Board a written statement in accordance with section 295A of the Corporations Act 2001 to the effect that:

  • The integrity of financial statements is founded on a sound system of risk management and internal compliance and control which implements the policies adopted by the Board; and

  • The Company’s risk management and internal compliance and control system, in so far as it relates to financial risk, is operating efficiently and effectively in all material respects.

PRINCIPLE 8: Remunerate fairly and responsibly

The Board has established a Remuneration Committee to review and determine, among other things, remuneration policies and packages applicable to any Executive Directors, the Company Secretary and direct reports to the CEO. It also reviews remuneration to senior managers of the Company. It also reviews the remuneration policies of the Company. The Committee meets at least annually and usually twice per year and its Charter is available on the Company’s website under the Corporate Governance Section.

The Committee consists of two Non-Executive Directors, Mrs E Sam (Chairperson) and Mr S Cheong, and two Independent Directors, Mr H Hochstadt and Mr B Hayman. The Board is of the view that the Committee, which consists entirely of Non Executive Directors, albeit without an independent majority or Chairperson, is structured appropriately to perform its functions in reviewing the remuneration of Company executives and staff.

The Committee reviews and reports to the Board on:

  • Conditions of service and remuneration of the Chief Executive Officer and his direct reports;

  • Performance of the Chief Executive Officer;

  • Remuneration of the Chief Financial Officer and the Company Secretary;

  • Remuneration policies for the Company, which include the performance review of all employees, senior management and Board members;

  • Proposals for reward initiatives;

  • Succession plans for senior management; and

  • Other related matters as directed by the Board.

The Chief Executive Officer attends meetings of the Remuneration Committee by invitation when required to report on, and discuss, senior management performance and remuneration matters. He is excluded from Committee deliberations relating to his position.

The Committee is empowered to seek external professional advice on any matter within its terms of reference.

Senior managers of the Company receive a balance of fixed and variable (at risk) remuneration. The proportions vary at different levels within the Company, reflecting the capacity of the senior managers to influence the overall outcome of the Company’s operations and returns to Shareholders. The bonuses (if any) to executives are based on a review of individual executive performance as well as the Company’s overall financial performance.

Director’s fees paid to Non-Executive Directors and Independent Non-Executive Directors are determined by the Board, and are within the aggregate limits approved by Shareholders at a General Meeting. The Independent Non-Executive Directors currently receive fees paid by the Company. The Committee has available to it data on fees paid to independent directors by a wide range of Companies. The remaining two Non-Executive Directors do not receive fees, however the Company pays a consulting fee to the substantial Shareholder, SC Global Developments Limited.

AVJennings Limited ABN 44 004 327 771 85

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