In accordance with the Corporations Act, the duties of the directors to unitholders of the Trust take priority over the duties of the directors to GJFML.

The Australian Securities Exchange (ASX) Corporate Governance Council’s Principles and Recommendations 2nd edition (the Recommendations) are as follows:

Principle 1. Lay solid foundations for management and oversight

Principle 2. Structure the board to add value

Principle 3. Promote ethical and responsible decision making

Principle 4. Safeguard integrity in financial reporting

Principle 5. Make timely and balanced disclosure

Principle 6. Respect the rights of shareholders

Principle 7. Recognise and manage risk

Principle 8. Remunerate fairly and responsibly

Under ASX Listing Rule 4.10.3, GJFML must disclose in its annual report the extent to which it has followed the Recommendations. Where there has been a departure from the Recommendations, this fact must be disclosed, together with the reasons for the departure.

Recommendation 2.4 sets out that the Board should establish a nomination committee and recommendation 8.1 sets out that the Board should establish a remuneration committee. Nomination and remuneration functions for GJFML are carried out by the full Board of directors. The Board does not believe at this stage that any marked efficiencies or enhancements would be achieved by the creation of a separate nomination committee.

GJFML’s corporate governance practices are compliant with the Recommendations except to the extent that the functions of a nomination and remuneration committee have been discharged by the Board as a whole, as discussed above.

Frank Zipfinger (Chairman);
Philip Redmond; and
Jack Ritch.

For details of the qualifications of members of the audit committee, refer to the board profiles.

The Committee’s responsibilities include:

• reviewing the integrity of the financial statements;
• reviewing external reporting procedures including accounting policies, financial statements, analysts briefings and continuous disclosure and seeking to ensure that internal financial control systems, risk management policies and risk management systems are adequate to provide an effective assurance of the integrity of financial statements;
• assessing the independence of the external auditor, considering any request to provide non-audit services, and making recommendations in respect of the auditor’s engagement;
• reviewing the propriety of, and approval of all related party transactions;
• compliance with the Trust’s compliance plan and the Corporations Act; and
• financial management, including management of the Trust’s funding, hedging, liquidity and insurance coverage.

The Audit Committee reports to the Board on the outcome of its reviews and discussions with the external auditors and its findings on matters which have or are likely to have a material effect on the operating results or financial position of the Trust.

The Audit Committee meets not less than four times a year and at such other times as any member of the committee shall require.

The external auditor is PricewaterhouseCoopers. The lead engagement partner and review partner will each be required to be rotated at least every five years. Any non-audit services that are to be provided by the auditor will be subject to disclosure in the financial report.

Additionally, PricewaterhouseCoopers has been engaged to audit the compliance plan. The compliance plan auditor provides an audit opinion to the board which, together with the Trust’s financial report, is lodged with ASIC.

Each March quarter the Chairman will be required to complete a board assessment questionnaire, based upon discussions with Board members, which analyses their performance. The questionnaire will cover the following matters:

• Board contribution to developing strategy and policy as it relates to the Trust;
• interaction between the Board and management, and between Board members;
• Board processes to monitor Trust performance and compliance, control risk and evaluate management;
• Board composition and structure; and
• operation of the Board, including the conduct of the Board meetings and committee meetings.

The results of the performance evaluation and any recommendations will be given to GJFML.

The remuneration of GJFML in its capacity as Responsible Entity is regulated by the Trust’s Constitution. Management fees and expenses payable for each financial period are set out in the financial reports.

The remuneration of directors, including the Managing Director, is to be reviewed each year in the March quarter taking into account market information on fees paid to directors in comparable entities. It is important to note that the Trust does not bear the costs of any director. These costs are paid out of the management fee payable by the Trust to GJFML.

The remuneration of executives is determined by the Managing Director and is to be reviewed each year in the March quarter. It is important to note that the Trust does not bear the costs of any executive or employee. These costs are paid out of the management fee payable by the Trust to GJFML.

The Board is to ensure that the remuneration practices of GJFML are fair and reasonable and structured to encourage enhanced performance. Each March quarter the Board will review the remuneration practices of GJFML to ensure that they:

• are reasonable, fair and reward performance;
• attract and retain high calibre staff;
• are managed to mitigate risk and be in line with corporate governance and legal requirements;
• motivate management to pursue the long term goals of the Trust; and
• demonstrate a relationship between executive performance and remuneration.