DIRECTORS' REPORT Continued
Directors’ interests
The directors of Caltex Australia Limited held the following relevant interests in the company’s shares at 31 December 2008:
| DIRECTOR | SHAREHOLDING | NATURE OF INTEREST | |
|---|---|---|---|
| Ms Elizabeth Bryan |
9,238 | Direct interest (including 4,238 shares acquired through the Non-Executive Directors Share Plan) | |
| Mr Desmond King | 1,000 | Direct interest | |
| Mr Trevor Bourne | 5,395 | Direct interest (including 2,395 shares acquired through the Non-Executive Directors Share Plan) | |
| Mr Brant Fish | – | – | |
| Mr Greig Gailey | – | – | |
| Ms Colleen Jones-Cervantes | – | – | |
| Mr John Thorn | 1,510 | Indirect interest in 1,000 shares; direct interest in 510 shares acquired through the Non-Executive Directors Share Plan |
Notes:
- The directors have not acquired or disposed of any shares in the period from 1 January 2009 to the date of this report.
- Mr Peter Wissel, who serves as an alternate director for each of Mr Fish and Ms Jones-Cervantes, has a relevant interest in 1,000 shares. The shares are held jointly with Ms Susan Philbrick. Mr Wissel has held this interest at all times in 2008 (including when he served as a director) and since 1 January 2009.
- Mr Richard (Dick) Warburton, a former director, had a relevant interest in 13,519 shares at 24 April 2008, when he retired as a director; 3,519 shares were held directly and 10,000 were held indirectly.
Board and committee meetings
The Board of Caltex Australia Limited met 12 times during the year ended 31 December 2008. In addition, the Board’s strategy session was held over two days during the year.
In 2008, the Board operated the following standing committees:
- Audit Committee, which met four times
- Human Resources Committee, which met seven times
- Nomination Committee, which met twice, and
- OHS & Environmental Risk Committee, which met five times.
Special purpose committees were convened on three occasions in 2008.
Papers were circulated for Board and committee meetings and on one other occasion to directors for information. Additionally, papers were circulated for the strategy session.
The number of Board and committee meetings attended by each director during the year is set out in the following table:
| DIRECTOR | BOARD | AUDIT COMMITTEE |
HUMAN RESOURCES COMMITTEE |
NOMINATION COMMITTEE |
OHS & ENVIRONMENTAL RISK COMMITTEE |
SPECIAL PURPOSE COMMITTEES |
|---|---|---|---|---|---|---|
| Current directors | ||||||
| Ms Elizabeth Bryan | 12 (12) | 4 | 7 | 2 (2) | 5 | 3 (3) |
| Mr Desmond King | 12 (12) | 4 | 7 | 2 (2) | 5 | 3 (3) |
| Mr Trevor Bourne | 12 (12) | 4 (4) | – | 2 (2) | 5 (5) | – |
| Mr Brant Fish | 11 (12) | – | 7 (7) | 2 (2) | – | – |
| Mr Greig Gailey | 12 (12) | 3 (3) | 7 (7) | 2 (2) | 5 (5) | 1 (1) |
| Ms Colleen Jones-Cervantes | 7 (8) | – | – | 2 (2) | 3 (3) | – |
| Mr John Thorn | 11 (12) | 4 (4) | 5 (5) | 2 (2) | 2 (2) | 1 (1) |
| Former directors | ||||||
| Mr Richard (Dick) Warburton | 1 (2) | – | 1 (2) | – | – | – |
| Mr Peter Wissel | 4 (4) | 1 (1) | – | – | – | – |
Notes:
- The table shows the number of Board and committee meetings attended by each director during the year ended 31 December 2008, with the number of meetings held during the director’s time in office shown in brackets. Where a director has attended a meeting of a committee in an ex-officio capacity the table records the number of meetings attended.
- The Chairman, Ms Elizabeth Bryan, attended meetings of the Audit Committee, the Human Resources Committee and the OHS & Environmental Risk Committee in an ex-officio capacity. The Managing Director & CEO, Mr Desmond King, attended meetings of these committees as a member of management.
- Mr Brant Fish and Mr John Thorn were unable to attend a Board meeting in 2008. In each case, the meeting had been convened as a special meeting (in addition to the Board’s scheduled meetings).
- Ms Colleen Jones-Cervantes attended three Board meetings as a visitor prior to her appointment as a director. Her attendance at these meetings is in addition to the number of meetings noted in the table.
- Mr Peter Wissel attended one meeting of the Board as an alternate director for Ms Jones-Cervantes. He also attended three meetings of the Audit Committee following his appointment as an alternate director. Mr Wissel’s attendance at these meetings is in addition to the number of meetings noted in the table.
- Audit Committee: Mr Greig Gailey was appointed to the Audit Committee with effect from 1 May 2008. Mr Wissel served on the Committee until 30 April 2008. Mr Fish attended one meeting as a visitor.
- Human Resources Committee: Mr Thorn was appointed to the Human Resources Committee with effect from 1 May 2008. Mr Richard (Dick) Warburton served on the Committee until 24 April 2008. Each of Mr Trevor Bourne and Ms Jones-Cervantes attended one meeting as a visitor.
- Nomination Committee: All directors served on the Nomination Committee in 2008. Ms Jones-Cervantes served on the Committee from 1 June 2008. Mr Warburton served on the Committee until 24 April 2008. Mr Wissel served on the Committee until 31 May 2008.
- OHS & Environmental Risk Committee: Ms Jones-Cervantes was appointed to the OHS & Environmental Risk Committee with effect from 1 June 2008. Mr Thorn served on the Committee until 30 April 2008. Mr Wissel served on the Committee from 1 to 31 May 2008.
Shares and Interests
The total number of ordinary shares on issue at the date of this report and during 2008 is 270 million shares. The total number of performance rights on issue at the date of this report is 152,760 (2007: 73,010). 110,950 performance rights were issued during 2008 (2007: 73,010). 31,200 performance rights were distributed or lapsed during the year (2007: nil). On vesting, Caltex is required to allocate one ordinary share for each performance right, either by way of an issue of shares or the purchase of shares on market.
Non-audit services
In 2008, KPMG (Caltex’s external auditor) performed non-audit services for the Caltex Australia Group in addition to its audit and assurance engagements for the full year and half year.
KPMG received or was due to receive the following amounts for services performed for the Caltex Australia Group during the year ended 31 December 2008:
- for non-audit services – total fees of $102,000 (2007: $121,000); these services included taxation services ($59,000) and other assurance services ($43,000), and
- for audit and assurance services – total fees of $1,048,000 (2007: $885,000).
The Board has received a written advice from Mr John Thorn (Audit Committee Chairman) for and on behalf of the Audit Committee in relation to the independence of the external auditor for 2008. The advice was made in accordance with a resolution of the Audit Committee.
The directors are satisfied that:
- the provision of non-audit services to the Caltex Australia Group during the year ended 31 December 2008 by KPMG is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001, and
- the provision of non-audit services during the year ended 31 December 2008 by KPMG did not compromise the auditor independence requirements of the Corporations Act 2001 for the following reasons:
- the provision of non-audit services in 2008 was consistent with the Board’s policy on the provision of non-audit services by the external auditor
- the non-audit services provided in 2008 are not considered to be in conflict with the role of external auditor
- the directors are not aware of any matter relating to the provision of the non-audit services in 2008 that would impair the impartial and objective judgement of KPMG as external auditor.
Company secretaries
Ms Helen Conway
Ms Helen Conway serves as Company Secretary, General Counsel and General Manager – Office of the CEO. In this role, she serves as Company Secretary to the Board, as Committee Secretary for the Nomination Committee, and as a company secretary for various companies in the Caltex Australia Group.
Ms Conway was appointed as Company Secretary of Caltex Australia Limited with effect from 13 September 1999. Prior to joining Caltex, she was General Counsel for Air Services Australia and, before that, Group Secretary, General Counsel and General Manager – Corporate Advisory Division at NRMA. Ms Conway has also worked as a lawyer in private practice.
Ms Conway is a director of Caltex Australia Nominees Pty Ltd, the former trustee of the Caltex Australia Superannuation Plan, and Sydney Ferries Corporation.
Ms Conway holds a Bachelor of Arts and a Bachelor of Laws from the University of Sydney. She is a Fellow of Chartered Secretaries Australia.
Mr John Willey
Mr John Willey, Assistant Company Secretary, serves as a company secretary of Caltex Australia Limited. He also serves as Committee Secretary for the Audit Committee, the Human Resources Committee and the OHS & Environmental Risk Committee, and as a company secretary for various companies in the Caltex Australia Group.
Mr Willey was appointed as a company secretary of Caltex Australia Limited with effect from 1 June 2008 and has previously served as a company secretary from 30 August 2001 to 2 December 2004.
Mr Willey holds a Bachelor of Laws and a Bachelor of Business from the University of Technology, Sydney. He is a member of Chartered Secretaries Australia.
Indemnity and insurance
Constitution
The Constitution of Caltex Australia Limited provides that, to the extent permitted by law and subject to the restrictions in sections 199A and 199B of the Corporations Act 2001, Caltex Australia Limited indemnifies every person who is or has been a director or secretary of the company or of a subsidiary at the request of the Board of Caltex Australia Limited. The indemnities cover against:
- any liability (other than a liability for legal costs) incurred by that person as a director or secretary of Caltex Australia Limited or a subsidiary, and
- reasonable legal costs incurred in defending an action for a liability or alleged liability incurred by that person as a director or secretary of Caltex Australia Limited or a subsidiary.
Deeds of indemnity and insurance
During the year ended 31 December 2008, Caltex Australia Limited entered into a deed of access, insurance and indemnity with each of Mr Greig Gailey (director) and Mr John Willey (company secretary). Deeds of access, insurance and indemnity have previously been entered into by Caltex Australia Limited with other current directors and secretaries and with former directors and secretaries.
Under the deeds, Caltex Australia Limited has agreed, in broad terms, to indemnify its directors and company secretaries (to the extent permitted by law and subject to the prohibitions in section 199A of the Corporations Act 2001 and the terms of the deed) against any and all:
- liabilities incurred as an officer of Caltex Australia Limited or a group company (but not including liabilities for legal costs covered by the legal costs indemnity), and
- legal costs reasonably incurred in defending an action for a liability incurred or allegedly incurred as an officer of Caltex Australia Limited or a group company and preparing for, attending or appearing in administrative proceedings or an investigation or inquiry by any regulatory authority or external administrator in respect of or arising out of or connected with any act.
Under the deeds entered into with directors and company secretaries, Caltex Australia Limited (either itself or through a group company) is required to maintain and pay the premium on an insurance policy covering each director and company secretary (to the extent permitted by law and subject to the prohibitions in sections 199B and 199C of the Corporations Act 2001). In each case, the obligation continues for a period of seven years after the director or secretary (as the case may be) ceases to be an officer or, if proceedings or an inquiry has commenced or arises within this seven year period and this has been notified to the company, a further period up to the outcome of the proceedings or inquiry or when the company is satisfied that the proceedings or inquiry will not proceed.
Contract of insurance
Caltex Australia Limited has paid a premium in respect of a contract insuring the directors and officers of Caltex Australia Limited against liabilities.
The directors have not included details of the nature of the liabilities covered or the amount of the premium paid in respect of the directors’ and officers’ liability insurance, as such disclosure is prohibited under the terms of the contract.
Rounding of amounts
Caltex Australia Limited is an entity to which Class Order 98/100 (as issued by the Australian Securities and Investments Commission) applies. Amounts in the 2008 Directors’ Report and the 2008 Financial Report have been rounded off to the nearest thousand dollars (unless otherwise stated) in accordance with this class order.
The Directors’ Report is made in accordance with a resolution of the Board of Caltex Australia Limited.
EB Bryan
CHAIRMAN
DF King
MANAGING DIRECTOR & CEO
Sydney, 20 February 2009