CORPORATE GOVERNANCE STATEMENT – FINANCIAL YEAR ENDED 30 JUNE 2015 Introduction
The Board of Djerriwarrh Investments Limited (the Company) is committed to the highest standards of ethical behaviour and to having an effective system of corporate governance commensurate with the size of the Company and the scope of its business operations. In accordance with ASX Listing Rule 4.10.3, set out below are the applicable ASX Corporate Governance Council’s eight principles of corporate governance (ASX Governance Principles) and outlined accordingly is how the Board has applied each principle and the recommendations set out within them during the course of the financial year ended
30 June 2015. A copy of the ASX Governance Principles can be found on ASX’s website, www.asx.com.au The Company is fully supportive of the ‘if not, why not’ disclosure‐based approach to governance adopted by the
ASX Governance Principles and the recognition within them that there is no single model of corporate governance and that good corporate governance practice is not restricted to adopting the recommendations contained in the
ASX Governance Principles.

Principle 1: Laying solid foundations for management and oversight
This Principle requires the Company to establish and disclose the respective roles and responsibilities of both the
Board and management and how their performance is monitored and evaluated. Role of the Board
The Company’s Corporate Objective, as determined by the Board, is to invest in Australian equities with a focus on stocks where there is an active options market. The Company uses principally exchange traded options to enhance income return to investors. Djerriwarrh aims to provide shareholders with attractive investment returns through access to a steady stream of fully franked dividends and enhancement of capital invested:
•
to provide attractive total returns over the medium to long term; and
•
to pay an enhanced level of dividends. The role of the Board underpins and supports the Corporate Objective of the Company. The Board generally sets objectives and goals for the operation of the Company, oversees the Company’s management, regularly reviews the
Company’s performance and monitors its affairs in the best interests of the Company. For these responsibilities, the
Board is accountable to its shareholders as owners of the Company. The Board operates under a Board charter, available on the Company’s website, which documents the role of the
Board outlined above and the matters that the Board has reserved to itself. Those matters include:
•
setting the Corporate Objective of the Company and approving business strategies and plans designed to meet that objective;
•
approving the expense budget at least annually;
•
approving changes to the Company’s capital structure and dividend policy;
•
appointing and removing the Managing Director and carrying out succession planning for the Managing
Director as applicable;
•
approving the Company’s risk appetite;
•
reviewing the composition of the Board and Board Committees, the independence of Directors, the Board’s performance and carrying out succession planning for the Chairman and other Non‐Executive Directors;
•
appointing and removing Senior Executives on the recommendation of the Managing Director; and

•

reviewing the performance of management and the Company, including in relation to the risk management, internal controls and compliance systems adopted by the Company and the monitoring and review of the performance of Australian Investment Company Services Limited (AICS) in relation to the services that AICS provides to the Company.

The Directors meet formally as a Board regularly and the Non‐Executive Directors meet regularly in the absence of the Managing Director and members of management. During the financial year, the Board also held a strategy conference. Delegation to Board Committees
The Board has established the following principal Board Committees to assist the Board in exercising its authority:
•
Investment Committee;
•
Audit Committee; and
•
Nomination Committee. Each Board Committee operates under a formal charter that is made publicly available on the Company’s website, www.djerri.com.au A chart showing the number of Board and Board Committee meetings held during the year and attendance by
Directors is set out below.

J Paterson RE Barker PC
Barnett*
RJ Edgar** KJ Fagg GB
Goldsmith
AF Guy GJ Kraehe BB Teele AJM
Williams

Board
Eligible
11

Attended
11

Investment Committee
Eligible
Attended
32
30

Audit Committee
Eligible
Attended
‐
‐

Nomination Committee
Eligible
Attended
3
3

11

11

32

31

‐

3#

‐

‐

3

2

‐

7#

‐

‐

‐

‐

4

4

‐

4#

‐

‐

‐

‐

11

10

‐

17#

‐

‐

‐

‐

11

11

32

28

‐

‐

‐

‐

11

11

32

32

3

3

3

3

11

11

‐

23#

3

2

3

3

11

10

32

30

‐

‐

3

3

11

11

32

26

3

3

‐

‐

#Attended meetings as non‐members
*PC Barnett retired on 6 October 2014
**RJ Edgar was appointed on 26 March 2015 The role and work of the Nomination Committee is outlined under Principle 2 and for the Audit Committee is outlined under Principle 4 and Principle 7.

Investment Committee
The general role of the Investment Committee is to review and endorse investment decisions to support the
Company’s Corporate Objective. In doing this, the Committee:
•
reviews and endorses investment decisions to maintain the investment, trading and options portfolios;
•
makes decisions in relation to other portfolio‐related activities including voting instructions and lodgement of voting instructions in respect of general meetings of companies in which the Company has invested;
•
receives reports from management on portfolio matters, including portfolio performance, transaction reports, portfolio position reports and performance attribution analysis; and
•
receives reports and recommendations in relation to the review and analysis of companies/securities in which the Company is able to invest, or has invested. The Investment Committee’s membership comprises J Paterson (Chairman), RE Barker, GB Goldsmith, AF Guy, J
Paterson, BB Teele and AJM Williams. The other Directors, RJ Edgar, KJ Fagg and GJ Kraehe, are invited to attend
Committee meetings when available. Further details of the role of the Committee in respect to the oversight of investment risk can be found under
Principle 7. Delegation to Management
The Company has no employees and has entered into an agreement with AICS, in which it has a 25 per cent ownership interest, to provide a comprehensive range of management and investment services under the leadership of the Managing Director. This includes the day‐to‐day maintenance of the portfolios and associated research. The
Managing Director is responsible to the Company for the performance of those services and the Board acts in close consultation and cooperation with AICS in relation to the provision of services by AICS to the Company. AICS is paid a fee based on its costs in providing these services. Pre‐appointment checks
Prior to the appointment of a non‐executive Director to the Board, the Nomination Committee will determine what pre‐appointment checks are appropriate to be undertaken in the circumstances. In the case of recent appointments, these included regulatory and bankruptcy checks, as well as an interview process and reference checks. The Notice of Meeting provides relevant details of each person standing for election or re‐election as a Director and whether the Board endorses the appointment. Agreements
Each of the Directors have entered into an agreement with the Company in respect of their appointment, including access to documents, Director’s indemnity against liability, Directors’ and Officers’ insurance, conflicts of interests, taking independent professional advice and dealing in the Company’s securities. Company Secretary
The Company Secretary’s details and experience appears in the 2015 Annual Report. While the Company Secretary is an employee by AICS, he is accountable to the Company’s Board, through the Chair, on all matters to do with the proper functioning of the Board. Diversity Policy
The Board views diversity as including, but not being limited to, skills, qualifications, experience, gender, race, age, disability, ethnicity and cultural background.

The Board has a Board Diversity policy in place under the oversight of the Nomination Committee that is available on the Company’s website. The Company has a number of defining characteristics that have an important influence on how the Board deals with Board and organisational diversity:
•
As the Company is a long term shareholder, it is beneficial to have Directors who serve for a long period of time, experiencing different economic and business cycles.
•
As management, financial, business development/marketing and securities/stock market services are provided to the Company by AICS, the Company has no employees.
•
Senior Executives of the Company are the Senior Executives of AICS. AICS is responsible for, and best placed to determine, its own employment practices. However, the Company has in place processes to monitor the performance of AICS. As such, the policy is limited to Board diversity. The Board recognises that having a diverse Board will assist it in effectively carrying out its role in meeting the Company’s Corporate Objective.
The Board’s consideration of its own composition is set out under Principle 2. All appointments to the Board will be based on merit, and will include consideration of the Board’s diversity needs, including gender diversity. Under the policy, the principal measurable gender diversity objective is to embed gender diversity as an active consideration in all succession planning for Board positions. During the year, Dr RJ Edgar was appointed to the Board. During the recruitment process, a number of potential candidates were considered by the
Nomination Committee, including an appropriate number of female candidates. The Board has two female Directors and seven male Directors. In addition to the Managing Director, the Company also has four other Senior Executives, provided by AICS, each of whom is male. Performance assessments Non‐executive Directors
In order to provide a specific opportunity for performance matters to be discussed with each Director, the Board, on recommendation from the Nomination Committee, has established a Director review process. The Chairman meets with each Director individually to discuss issues including performance and effectiveness of the Board as a whole,
Board Committees, individual Directors, the Managing Director, Senior Executives and the Chairman with the intention of providing mutual feedback. The Chairman reports on the general outcome of these meetings to the
Nomination Committee and any necessary action items to the Board generally in private session. Given the nature of the Company’s activities, it is considered that this process of evaluation of the Board, Board
Committees, individual Directors and the Chairman is sufficiently formal. Evaluations under this process had been substantially completed during the financial year with the process to be concluded prior to the Company’s AGM. Management
The Board continuously reviews the performance of AICS, under the leadership of the Managing Director, in providing services to the Company. Separate evaluations of the performance of individual Senior Executives are carried out by AICS. As set out in Principle 8 below, performance of the provision of services to the Company is one of the measures used in determining the Managing Director’s and other Senior Executives’ annual incentive.
Evaluations under this process were carried out during the financial year. The Board believes that the Company is fully compliant with Principle 1 and its recommendations.

Principle 2: Structure the Board to add value
This Principle requires the Company to have a Board of effective composition, size and commitment to enable it to discharge its duties effectively. The Board comprises a Non‐Executive Chairman (J Paterson), Managing Director (RE Barker), and seven other Non‐
Executive Directors (RJ Edgar, KJ Fagg, GB Goldsmith, AF Guy, GJ Kraehe, BB Teele and AJM Williams).

The roles of the Chairman and Managing Director are separate. The role of the Managing Director is set out under
Principle 1. The role of the Chairman is set out in the Board charter, including being responsible for:
•
the business of the Board, taking into account the issues and the concerns of all Directors and the requirements of the Board charter;
•
the leadership and conduct of Board and Company meetings to be in accordance with the agreed agenda, the
Company’s Corporate Objective and Principles of Conduct (described under Principle 3); and
•
encouraging active engagement by Directors and an open and constructive relationship between the Board and the Managing Director and Senior Executives. The Chairman also has the authority to act and speak for the Board between meetings, subject to any agreed consultation processes. Appointment and Renewal
Being a long term investor is an essential part of the Company’s Corporate Objective and continuity on the Board and broad investment and business experience are regarded as important factors in the Board’s approach. The Company’s constitution provides that each Non‐Executive Director must seek re‐election by shareholders at least every three years if they wish to remain a Director. Any new Non‐Executive Director appointed by the Board must seek election by shareholders at the next Annual General Meeting of the Company. This approach is consistent with the ASX Listing Rules. To assist Directors to fully meet their responsibilities to bring an independent view to matters coming before them, the Board has agreed a procedure in appropriate situations for Directors to take independent professional advice, at the expense of the Company, after advising the Chairman of their intention to do so. On appointment, new Directors are given the opportunity to meet with Senior Executives of the Company to understand their areas of expertise and responsibility within the Company. On an ongoing basis, regular reports are provided to the Board updating Directors with legal, regulatory, governance and financial developments, both in
Australia and internationally, that could impact either the Company, the companies that Djwerriwarrh invests in, or their roles as Directors of Djerriwarrh and other companies. Directors are also invited to attend meetings the
Company arranges with investee companies and subject matter experts on various business and economic issues. Nomination Committee
The Board has a Nomination Committee which comprises four Non‐Executive Directors, with GJ Kraehe as the
Chairman and the members being AF Guy, J Paterson and BB Teele. The Committee considers matters relating to the orderly renewal of the Board and the attraction and retention of
Directors of high calibre with the appropriate experience, skill and diversity to contribute effectively to the oversight of the Company, making recommendations on these matters to the Board as appropriate. On recommendation from the Nomination Committee, the Board has determined that to fulfil the Company’s
Corporate Objective, its own membership is best served by being comprised of a mix of individuals with deep expertise and a breadth of experience (both executive and board experience) in the following areas:
•
the investment industry;
•
leading and managing successful corporations, particularly in industries that the Company seeks to invest in; and • advising successful corporations (including legal and accounting advice). The Nomination Committee utilises this matrix when considering future Board succession matters.

Independence of Directors
The Nomination Committee also reviews the independence of each of the Non‐Executive Directors (excluding the
Managing Director) on an annual basis, taking into account the factors set out in box 2.3 of the ASX Governance
Principles, including situations where an individual Director may be a partner in, controlling shareholder of, or
Executive of an entity which has a material commercial relationship with the Company, and makes recommendations to the Board in this respect. In looking at such relationships, the Board looks at all the circumstances but sets an initial monetary threshold for materiality and this is reviewed annually by the Board, on the recommendation of the Nomination Committee. The
Board has resolved that the appropriate initial monetary threshold is $1,000,000 per annum. The Board has considered the issue of tenure and does not believe that length of tenure, by itself, compromises the independence of Directors. Given the long‐term nature of the Company’s investment horizon, having Directors with experience of the Company through different investment and economic cycles is considered advantageous. Details of the term of office held by each Director in office as at the date of this report are as follows: J Paterson – 13 years
RE Barker – 27 years
RJ Edgar – appointed 26 March 2015
KJ Fagg – 1 year
AF Guy – 25 years
GB Goldsmith – 2 years
GJ Kraehe – 13 years
BB Teele – 26 years
AJM Williams – 5 years A number of Directors are also Directors of companies in which Djerriwarrh invests. Any real or potential conflicts of interest are dealt with by procedures consistent with Corporations Act requirements which are designed to ensure that conflicted Directors do not take part in the decision‐making on a relevant issue. On this basis, it is believed that their independence on all other issues is not compromised. BB Teele, the former Chairman of the Company, has had a continuing close involvement in the management of the portfolio over the life of the Company. Accordingly, he is not considered an independent Director. The other seven Non‐Executive Directors, J Paterson (Chairman), RJ Edgar, KJ Fagg, GB Goldsmith, AF Guy, GJ Kraehe and AJM Williams, have been assessed as being independent. The Board therefore consists of a majority of independent Directors. The Board believes that the Company is fully compliant with Principle 2 and its recommendations.

Principle 3: Act ethically and responsibly
This Principle requires that the Company should act ethically and responsibly. The Company maintains a high level of transparency regarding its actions consistent with the need to maintain the confidentiality of commercial in‐confidence material and, where appropriate, to protect its shareholders’ interests. Corporate Principles of Conduct
The Company has adopted Corporate Principles of Conduct which outline ethical standards to be followed by
Directors and Senior Executives of the Company when carrying out their responsibilities with a view to the Company achieving its aims, which are available on the Company’s website.

Under the Principles, Directors and Senior Executives will:
•
conduct business in good faith in the best interests of the Company with efficiency, honesty and fairness;
•
perform their duties with the utmost integrity and the standard of care and diligence expected of an organisation of the highest calibre;
•
treat others with dignity and respect; and
•
not engage in conduct likely to have an adverse effect on the reputation of the Company. The Corporate Principles of Conduct also set out details of how conflicts of interest should be avoided. The
Company’s Directors and employees must disclose to the Company any material personal interest that they or any associate may have in a matter that relates to the affairs of the Company. Where a conflict of interest may arise, full disclosure by all interested persons must be made and appropriate arrangements followed, such that interested persons are not included in making the relevant decisions and discussions. AICS has its own comprehensive Principles of Conduct in place that cover the behaviours and actions of its employees. Compliance with those Principles is a condition of the appointment of each Senior Executive with the Company and a condition of their employment with AICS. The Board believes that the Company is fully compliant with Principle 3 and its recommendation.

Principle 4: Safeguard integrity in corporate reporting
This Principle requires that the Company has formal and rigorous processes that independently verify and safeguard the integrity of its corporate reporting. Audit Committee
The Company has established an Audit Committee comprising three Directors, all of whom are independent: AF Guy
(Chairman), GJ Kraehe and AJM Williams. All members of the Audit Committee have the requisite financial experience and understanding to effectively discharge its mandate. AJM Williams is a Fellow of CPA Australia, and as such has relevant experience and qualifications, but has no responsibilities additional to those of other members of the Audit Committee. The Audit Committee is responsible for reviewing:
•
the Company’s accounting policies;
•
the content of financial statements;
•
issues relating to the controls applied to the Company’s activities;
•
the conduct, effectiveness and independence of the external audit;
•
risk management and related issues; and
•
compliance issues. The role of the Audit Committee in respect to its oversight of risk management issues is set out under Principle 7, below. Written Affirmations
Prior to approving the Company’s financial statements, the Board has received from the Managing Director and the
Chief Financial Officer written affirmations concerning the Company’s financial statements required by the
Corporations Act as set out in the Directors’ Declaration in the 2015 Annual Report. In respect of both the financial statements for the year ended 30 June 2015 and the half‐year ended 31 December
2014, the Board has also received from the Managing Director and the Chief Financial Officer written affirmation that, in their opinion, the financial records of the entity have been properly maintained and that the financial statements comply with the appropriate accounting standards and give a true and fair view of the financial position

and performance of the Company and that the opinion has been formed on the basis of a sound system of risk management and internal control which is operating effectively. The Audit Committee and the Board have also received reports from the Senior Executives as to the effectiveness of the Company’s management of its material business risks whilst noting that the Company, as a listed investment company, actively takes on appropriate levels of investment risk as part of its investment activities. External auditor
The Audit Committee meets regularly with the external auditor in the absence of management. The external auditor attends the Company’s Annual General Meeting to answer questions from shareholders relevant to the audit.
The Board believes that the Company is fully compliant with Principle 4 and its recommendation.

Principle 5: Make timely and balanced disclosure
This Principle requires that the Company promotes timely and balanced disclosure of all material matters concerning the Company. As a listed entity, the Company has an obligation under the ASX Listing Rules and the Corporations Act to maintain an informed market in its securities. Accordingly, the market is kept advised of all information required to be disclosed under the Listing Rules, which it is believed would or may have a material effect on the price or value of the Company’s securities. The Company has a written Continuous Disclosure policy and procedures designed to ensure compliance with ASX
Listing Rule and Corporations Act disclosure requirements, to ensure accountability at a senior management level for that compliance and to clarify individual, management and Board responsibilities in the process. The policy is publicly available on the Company’s website, www.djerri.com.au The Board believes that the Company is fully compliant with Principle 5 and its recommendation.

Principle 6: Respect the rights of security holders
This Principle requires that the Company respects the rights of its security holders by providing them with appropriate information and facilities to allow them to exercise those rights effectively. The Company is owned by its shareholders and the Board’s primary responsibility to them is to do its utmost to meet the Company’s objectives and so increase the Company’s value for all shareholders. The Board’s policy is to maintain active communication with shareholders as owners of the Company. The Company’s website, www.djerri.com.au, contains access to ASX announcements, Annual Reports, Half‐Yearly
Reports, details of corporate governance practices, presentations to shareholders, NTA announcements, key date information, dividend and security issue history and relevant related material for shareholders and investors. In addition to communicating with shareholders via the Annual Report and the non‐statutory Annual and Half‐Yearly
Reviews, the Company holds an Annual General Meeting of shareholders to fulfil statutory requirements, to provide shareholders with the opportunity to meet with representatives of the Board and management, to learn more about the Company’s activities and, particularly, to provide an opportunity to question the Board and management about any aspect of the Company’s activities. The documentation produced (both hard copy and electronic) for the Annual
General Meeting makes provision for shareholders to submit questions to the Company. In addition to the Annual General Meeting, the Company holds non‐statutory Shareholder Information Meetings in the Australian capital cities, some of which follow the full‐year results and some of which follow the half‐year results.
This financial year, shareholder meetings were held in Sydney, Melbourne, Adelaide, Brisbane, Canberra and Perth.

The Company views the holding of these non‐statutory meetings as being very important in terms of communicating with its shareholders as it allows shareholders around the country the opportunity to question management and
Directors in an informal setting on the Company’s activities and approach. The Company also ensures, through the share registry, that shareholders have the option to communicate electronically with the Company and the share registry. The Company also maintains an email address, invest@djerri.com.au that shareholders can electronically communicate with the Company through. The Company also utilises a toll free telephone service, 1800 780 784, that shareholders can call to hear the latest
NTA information. The Board believes that the Company is fully compliant with Principle 6 and its recommendations.

Principle 7: Recognise and manage risk
This Principle requires that the Company establish a sound risk management framework and periodically review it. The Board believes it has established and maintains a sound system of risk oversight, management and internal control. The Risk Management Framework adopted for the Company is available on the Company’s website. The
Board has approved the overarching risk appetite of the Company and is assisted in its risk management activities by the Audit Committee and coordination of risk management activities is done by the Chief Financial Officer, who reports to the Audit Committee on such matters. The Risk Management Framework is reviewed by the Audit Committee on an annual basis, and such a review has been carried out this financial year. The framework has been developed to take into account the principles and guidelines outlined in AS/NZS ISO 31000: 2009 Risk Management – principles and guidelines. This approach involves establishing the context in which it operates, identifying the risks, analysing those risks, evaluating the risks, treating the risks where appropriate and monitoring, reviewing and reporting risks and the overall performance of the framework. This process is underpinned through regular communication and consultation with key business stakeholders. The framework forms the basis for embedding enterprise risk management within the culture of the organisation. The objectives of it are to:
•
enable the Company to meet its obligations and objectives efficiently and reliably;
•
increase the likelihood that the Company will be successful in its business operations by mitigating potentially damaging events occurring (e.g. operational risk) and maximising the results of positive events (e.g. financial position, investment strategies, etc.), through the implementation of risk management strategies;
•
provide decision‐makers with the means to identify risks and to determine whether the controls in place are adequate to mitigate those risks;
•
provide a mechanism to assess the levels of risk that can be accepted;
•
ensure that the application of risk management practices is understood by the agents, employees, officers and
Directors of the Company and a strong risk culture is well entrenched; and
•
reduce the consequence and/or likelihood of potentially damaging events by regular reviews of investments and investment strategies or by transferring the impact of potentially damaging events to third parties (e.g. by insurance, and contractual arrangements) for outsourced arrangements, where appropriate. There are two main areas of risk that have been identified:
•
investment risk; and
•
operational risk.

Investment Risk
Investment risk includes:
•
market risk;
•
credit, counter‐party and settlement risk;
•
liquidity risk; and
•
reputational risk (insofar as it relates to the investments that the Company enters into). The Investment Committee is primarily responsible for dealing with issues arising from investment risk, and has delegated day‐to‐day management of the portfolios to an experienced investment team provided by AICS. All decisions of the team are reviewed, discussed and where necessary, ratified by the Committee. By its nature, as a listed investment company the Company will always carry investment risk because it invests its capital in securities which are not risk free. However, the Company seeks to reduce this investment risk by a policy of diversification of investments across industries and companies operating in various sectors of the market. Operational Risk
The Company’s management is primarily responsible for recognising and managing operational risk issues such as legal and regulatory risk, systems and process risk, human resource risk, reputational risk (insofar as it relates to the operations of the Company), disaster recovery and workplace health and safety risk. This is in the context that most of Djerriwarrh’s administrative functions have been outsourced to AICS using its systems and staff. Accordingly, risk issues associated with these activities are handled in accordance with the policies and procedures adopted by AICS for dealing with them. Internal audit and written affirmation from AICS
The Company has received a report from AICS outlining the control objectives for AICS and the specific policies and procedures established to meet these procedures. These policies include management oversight, segregation of duties, multiple sign‐offs and specific authorisation levels. AICS has stated that these have been in place throughout the financial year, and have been effective in meeting the control objectives. While the Company does not have its own internal audit function, AICS has appointed Ernst & Young as its internal auditor. The Company has received a report from Ernst & Young, under the requirements of Auditing Standard 810
“Special Purpose reports on the Effectiveness of Control Procedures” stating their opinion that, in all material respects, the internal controls put in place by AICS in relation to Investment Management and Administration
Operations for this financial year are suitably designed to meet the control objectives and have operated effectively for this financial year. AF Guy, Chairman of the Audit Committee, and J Paterson, Chairman of the Board, are also both members of the
AICS Risk Management, Audit and Remuneration Committee and J Paterson serves as Chairman of AICS. Economic, environmental and social sustainability risks
Economic risk is principally dealt with under Investment Risk, above. In respect of environmental and social sustainability risks, the Company utilises AICS staff and AICS’ office space for meetings, so is not subject to material direct environmental and social sustainability risks. AICS has resources to identify if any legal environmental issues arise that need to be considered by AICS and the Company going forward. Sustainability of the companies that
Djerriwarrh invests in is considered by the Investment Committee and Investment Team as part of the Company’s long‐term investment approach. The Board believes that the Company is fully compliant with Principle 7 and its recommendations.

Principle 8: Remunerate fairly and responsibly

This Principle requires that the Company should pay director remuneration sufficient to attract and retain high quality directors and design its executive remuneration to attract, retain and motivate high quality senior executives and to align their interests with the creation of value for security holders. The Board has not established a Remuneration Committee given the size of the Company and the nature of its activities. Other than the Board members, the Company has no formal employees. The Board is able to deal with matters relating to the remuneration of Directors itself and a separate Remuneration Committee is not considered necessary. Directors’ Remuneration
The Constitution of Djerriwarrh requires approval by the shareholders in general meeting of a maximum amount of remuneration to be allocated between Non‐Executive Directors as they determine. In proposing the maximum amount for consideration in general meeting, and in determining the allocation, the Board takes account of the time demands made on Directors together with such factors as the general level of fees paid to Australian corporate directors. The amount of remuneration for each Director excludes amounts that were owing to them when the Directors’ retirement allowances were frozen at 30 June 2004. Non‐Executive Directors do not receive any performance‐based remuneration. Management Remuneration Approach
RE Barker is made available as Managing Director of Djerriwarrh by AICS. The costs relating to the provision of Mr
Barker as Managing Director of the Company by AICS have been fully covered by the general management fee charged by AICS. This does not affect the total management expense borne by the Company. As part of their remuneration arrangements with AICS, the Managing Director, Senior Executives and Investment
Team receive an ‘at risk’ incentive component determined by AICS which is based on performance. The performance criteria for the annual incentive consist of quantitative and qualitative assessments which include, among other things, the services that AICS has provided to Djerriwarrh and for which AICS is paid, taking account of Djerriwarrh’s investment performance over 1, 3, 5, 8 and 10 years. Full details of Senior Executive and Investment Team remuneration can be found each year in the Annual Report of Australian Foundation Investment Company Limited
(AFIC), which owns 75% of the capital of AICS (Djerriwarrh owning the remaining 25%). This can be found at www.afi.com.au/Reports‐by‐year.aspx As the Company does not have any equity‐based remuneration schemes, there is no need to have a policy around prohibiting transactions which limit the economic risk of participating in such schemes. AFIC and AICS, however, do have policies which prohibit such transactions by AICS Senior Executives, and these are disclosed. The Board believes that the Company is fully compliant with Principle 8 and its recommendations. Approved by the Board of Djerriwarrh Investments Limited Date: 16 July 2015