Annual Report - AWB Limited

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Recommendation 4.3 - Structure the audit committee so that itconsists of:• only non-executive directors• a majority of independent directors• an independent chairperson, who is not chairpersonof the board• at least three members.AWB practiceThe committee’s charter requires that the committee consist onlyof non-executive directors. The committee is to be composed of atleast three members the majority of whom must be independentand must include the Chairman of the Risk Committee. Allmembers of the committee must be financially literate and atleast one member must have financial expertise.All members of the committee are considered financiallyliterate. The Chairman, Mr John Schmoll, has relevant financialqualifications and extensive financial experience. (Refer topages 34–35 for details of the qualifications and experienceof committee members.)The Board has determined that all of the members of the AuditCommittee (including the Chairman) are independent (refer toindependence statement on page 26).Recommendation 4.4 - The audit committee should have aformal charter.AWB practiceCharter and responsibilitiesThe Audit Committee charter is available on the CorporateGovernance section of AWB’s website.The primary responsibilities of the Audit Committee are toreview the integrity of the company’s financial reporting and tooversee the independence of the external auditor. (Review of riskmanagement and internal compliance and control systems is theresponsibility of the Risk Committee.)MeetingsThe Audit Committee met 5 times during the financial year. Referto page 40 for details of the attendance by committee members atthose meetings. The Managing Director, the Chief Financial Officerand the Chief Risk Officer attend each meeting of the committee.The Company Secretary, a representative of internal audit and arepresentative of the external auditor were also present for atleast part of each meeting at the invitation of the committee. Thecommittee meets privately with each of the Chief Financial Officer,the Chief Risk Officer and the internal and the external auditors.A description of the arrangements for the selection andappointment of the external auditor, and for the rotation ofexternal audit engagement partners, is available on the CorporateGovernance section of AWB’s website (www.awb.com.au).Principle 5 - Make timely and balanced disclosureRecommendation 5.1 - Establish written policies and proceduresdesigned to ensure compliance with ASX Listing Rule disclosurerequirements and to ensure accountability at a seniormanagement level for that compliance.AWB practiceAWB’s Continuous Disclosure Guidelines ensure that AWB Limitedmeets its continuous disclosure obligations under the ASX ListingRules and the Corporations Act 2001.The guidelines:• outline the legal and regulatory disclosure requirements thatapply to AWB Limited• give guidance as to the types of information that may requiredisclosure• give practical guidance for dealing with analysts, institutions,the media and other members of the public• establish and document a system for disclosure of materialinformation, and identify the channels for employees to passon potentially market-sensitive information as soon as it comesto hand• allocate responsibility for approving the form of any publicdisclosures and the making of other public statements orcommunications.The Board has delegated to a Continuous Disclosure Committee,comprising the Company Secretary, General Counsel, ChiefFinancial Officer and General Manager, Corporate Affairs,the responsibility for examining potentially market-sensitiveinformation and determining whether the information isrequired to be disclosed.A summary of the Continuous Disclosure Guidelines is availableon the Corporate Governance section of AWB’s website.Commentary on financial resultsThe Board is also committed to ensure that companyannouncements provide a balanced view of operating andfinancial performance. To assist this, the 2008 directors’ reportincludes an Operating and Financial Review commentary whichaids investors in making informed assessments of AWB’s activitiesand results.Principle 6 - Respect the rights of shareholdersRecommendation 6.1 - Design and disclose a communicationsstrategy to promote effective communication with shareholdersand encourage effective participation at general meetings.AWB practiceCommunications and websiteThe Board aims to ensure that AWB Limited’s shareholders areinformed of all major developments affecting the company.www.awb.com.au 29
Information is regularly communicated to shareholders viaannouncements to the ASX in accordance with AWB Limited’scontinuous disclosure obligations, media releases and periodicmail-outs. Information is also available from AWB Limited’s website(www.awb.com.au) under the heading “About AWB”.In addition, a copy of the annual report is distributed to allshareholders who elect to receive it, and is available from thecompany’s website. The Board aims to ensure that the AnnualReport accurately includes all relevant information about thecompany including details of its operations, future developmentsand any disclosures required by the Corporations Act and theASX Listing Rules.MeetingsThe Board encourages full participation by shareholders at theannual general meeting to ensure a high level of accountabilityand to ensure that shareholders remain informed about AWBLimited’s strategy and goals. Important issues are presented toshareholders as single resolutions.Information about AWB’s arrangements to promotecommunications with shareholders, including by electronic means,is available on the Corporate Governance section of AWB’s website.Recommendation 6.2 - Request the external auditor to attendthe annual general meeting and be available to answershareholder questions about the conduct of the audit and thepreparation and content of the auditor’s report.AWB practiceAWB’s external auditor, Ernst & Young, attend the annual generalmeeting to answer shareholder questions about the conductof the audit and the preparation and content of the auditor’sreports. In addition to their right to ask questions at the annualgeneral meetings, shareholders may submit written questions forthe external auditor to the Company Secretary no later than fivebusiness days before an annual general meeting.Principle 7 – Recognise and manage riskRecommendation 7.1 - The board or appropriate boardcommittee should establish policies on risk oversight andmanagement.AWB practicePurpose, composition and responsibilities of the Risk CommitteeThe Risk Committee is responsible for the review and oversight ofthe risk management and internal control system, the compliancemanagement framework and the management of market, credit,operational and business risks.The committee’s charter requires that the committee consist onlyof non-executive directors. The committee is to be composed of atleast three members and must include the Chairman of the AuditCommittee.Refer to pages 34–35 for details of the qualifications andexperience of committee members.The Risk Committee met 4 times during the financial year. Referto page 40 for details of the attendance by committee membersat those meetings.The Risk Committee charter is available on the CorporateGovernance section of AWB’s website (www.awb.com.au).Framework and policiesAWB has established a framework for risk management at AWBin which:• the Board and senior management demonstrate a strongcommitment to the management and oversight of risks• there is a process in place for the Board and seniormanagement to determine and articulate the acceptablelevel of risk• there is alignment between the stated appetite for risk, theapproach to risk management, and the company’s strategicand operational objectives• responsibilities and protocols are clearly defined• the Board receives regular reports and assurances fromsenior management in relation to risk exposures and riskmanagement practices.The consistent application of practices across the company isdesigned to guide decision making in relation to all significantrisks that impact on the company’s reputation and performance.The methodology is consistent with AS/NZS 4360 RiskManagement.The Managing Director and the management team areresponsible for managing risk and reporting to the Board andBoard committees. A key feature of this arrangement is the roleof the Chief Risk Officer (as head of the Corporate Risk unit). TheChief Risk Officer reports to the Managing Director. The ChiefRisk Officer also has an independent reporting line to the AuditCommittee, and the Risk Committee. The Corporate Risk Unitmonitors AWB’s risk profile, particularly that of the trading activity,and has authority to report to any level of executive managementor the Board, any significant concerns that may arise.Assessment of effectivenessThe internal audit plan is designed to be risk focused and isendorsed by the Audit Committee. It takes into considerationcompany business initiatives and the associated risks and theircontrol status. The internal audit function is outsourced to KPMG,and is independent of the external audit function.30 www.awb.com.au
Page 7 and 8: 6 www.awb.com.auFrom Peter Polson,C
Page 9 and 10: From Gordon Davis,Managing Director
Page 11 and 12: AWB todayOur client base extends to
Page 13 and 14: Landmark Rural ServicesRural Servic
Page 15 and 16: Financial Services (EBITDA)2004 44.
Page 17 and 18: Commodity ManagementCommodity Manag
Page 19 and 20: CorporateCredit ratingsAWB maintain
Page 21 and 22: People and communityPeopleThe busin
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Page 27 and 28: Governance at AWBAWB’s Board and
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Page 33 and 34: Recommendation 9.3 - Clearly distin
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120 www.awb.com.auAWB LIMITED Indep
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AWB LIMITED Australian Securities E
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AWB LIMITED Notes124 www.awb.com.au
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AWB Limited ABN 99 081 890 459380 L
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Annual Report - AWB Limited

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