2012 Annual Report - Domino's Pizza

CORPORATE GOVERNANCE STATEMENT CONTINUED
Board Committees
The Board has established a number of
committees to assist in the execution of its
responsibilities. The following committees
were in place at the date of this report:
• Nomination and Remuneration Committee, and
• Audit Committee.
Details of these committees are discussed below.
NOMINATION AND
REMUNERATION COMMITTEE
The Board has established the Nomination
and Remuneration Committee, which
comprises the entire Board.
The principal responsibilities
of the Committee are:
• advising the Board on directorship
appointments, with particular attention to the
mix of skills, experience and independence;
• ensuring fulfilment of the Board’s
policies on Board composition;
• developing Board succession plans;
• reviewing and making recommendations on
the appropriate compensation of directors;
• ensuring that equity-based executive
compensation is paid in accordance
with thresholds set in plans
approved by shareholders; and
• ensuring disclosure of the information required
in each Annual Report of the Company.
The Company’s compensation policy links the
nature and amount of executive directors’ and
key management personnel’s emoluments to the
Company’s financial and operational performance.
Further details of the Nomination and
Remuneration Committee are included in the
Remuneration Report on pages 14 to 21.
Membership of and attendance at the
2012 Committee meetings are detailed
in the Directors’ Report on page 13.
AUDIT COMMITTEE
DPE Limited has a Board convened
Audit Committee which:
• is comprised entirely of non-executive
directors of DPE Limited;
• has a majority of independent directors; and
• has a Chairman, who is not Chairman
of the Board of DPE Limited.
Committee Charter
The Committee has a Charter to govern its
operations. The Charter is reviewed every two
years, and, if appropriate, updated by the Board
on recommendation from the Audit Committee.
Membership of the Committee
Committee members are appointed by the Board.
Under the Committee’s Charter, members will
have a range of diverse and yet complementary
skills and will be financially literate.
Purpose of the Committee
The role of the Audit Committee is to assist
the Board in discharging its obligations with
respect to ensuring:
• accurate and reliable financial information
prepared for use by the Board; and
• the integrity of the Company’s internal controls
affecting the preparation and provision of that
financial information in determining policies or
for inclusion in the financial statements.
In carrying out these functions, the Committee
maintains unobstructed lines of communication
between the Committee, the internal auditors, the
external auditors, and DPE Limited’s management.
Duties and Responsibilities of the Committee
The Committee advises the Board on all
aspects of internal and external audit, the
adequacy of accounting and risk management
procedures, systems, control and financial
reporting. Specific responsibilities include:
• recommending to the Board the appointment,
re-appointment and removal of external auditors;
• monitoring the independence of the
external auditors;
• recommending and supervising the
engagement of the external auditors and
monitoring auditor performance;
• reviewing the effectiveness of management
information and other systems of internal control;
• reviewing all areas of significant financial risk
and arrangements in place to contain those to
acceptable levels;
• reviewing significant transactions that are not
a normal part of the Company’s business;
• monitoring the internal controls and
accounting compliance with the Corporations
Act 2001, ASX Listing Rules, reviewing
external audit reports and ensuring prompt
remedial action; and
• reviewing the Company’s full year ASX
Appendix 4E, Annual Report and half-year
Appendix 4D, prior to submission to the Board.
Rotation of the External Audit
Engagement Partners
The Corporations Act 2001 has introduced
a five year rotation requirement for audit
partners. DPE Limited’s external auditor,
Deloitte Touche Tohmatsu has an internal policy
which is consistent with this requirement.
Independence of the external auditors
The Committee will consider annually any
non-audit services provided by the external
auditors to determine whether the provision
of those non-audit services is compatible
with the independence of the external
auditors. Policies are in place to restrict
the type of non-audit services which can
be provided by the external auditors.
Internal audit
Ernst & Young has been engaged to undertake
an independent and objective internal audit
review function charged with evaluating,
testing and reporting on the adequacy and
effectiveness of management’s control of
operational risk. The internal auditors will
provide regular reports to the Audit Committee.
Chief Executive Officer and Chief Financial
Officer sign-off to the Board in respect
of DPE Limited’s financial statements
The sign-off required from the Chief Executive
Officer (“CEO”) and Chief Financial Officer
(“CFO”) that DPE Limited’s financial statements
present a true and fair view, in all material
respects, of DPE Limited’s financial condition
and operational results in accordance with the
relevant Accounting Standards, is contained
within the representations required as part of
Recommendation 7.2 of the ASX Principles.
The experience and qualifications of
members of the Audit Committee are set out
in Corporate Directory section of the Annual
Report. Membership of and attendance
at 2012 Committee meetings are detailed
in the Directors’ Report on page 13.
CODE OF CONDUCT FOR
DPE LIMITED DIRECTORS
The Board has a formal Directors’ Code of
Conduct which sets the standards to which
each director, the Company Secretary
and all executives will adhere whilst
conducting their duties. The Code requires
a director, amongst other things, to:
• act honestly, in good faith and in the best
interests of the Company as a whole;
• perform the functions of office and exercise
the powers attached to that office with a
degree of care and diligence that a reasonable
person would exercise if they were a
director in the same circumstances; and
• consider matters before the Board having
regard to any possible personal interests,
the amount of information appropriate to
properly consider the subject matter and
what is in the best interests of the Company.
All directors and officers of the Company must,
as far as possible, act with the utmost integrity
and objectivity, striving at all times to enhance
the reputation and performance of the Company,
and where possible, to act in accordance with
the interests of the shareholders, staff, clients
and all other stakeholders in the Company.
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ANNUAL REPORT 2012 DOMINO’S PIZZA ENTERPRISES LIMITED