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Corporate Governance – continued<br />
• the audit firm may be permitted to provide non-audit services<br />
that are not considered to be in conflict with the preservation<br />
of the independence of the auditor subject to the approval of<br />
the company’s Audit Committee; and<br />
• the Audit Committee must approve significant permissible<br />
non-audit work assignments that are awarded to an external<br />
auditor, and the value of non-audit work must be reported at<br />
every Board meeting.<br />
Engagement of the External Auditor<br />
The Warehouse’s external auditor is PricewaterhouseCoopers<br />
(PwC). PwC was appointed by shareholders at the 2004 Annual<br />
Meeting in accordance with the provisions of the Companies Act<br />
1993 (Act). PwC is automatically reappointed as auditor under<br />
Section 200 of the Act.<br />
Attendance at the Annual Meeting<br />
PwC, as auditor of the 2011 Financial Statements, has been<br />
invited to attend this year’s annual meeting and will be available<br />
to answer questions about the conduct of the audit, preparation<br />
and content of the auditors’ report, accounting policies adopted<br />
by The Warehouse and the independence of the auditor in<br />
relation to the conduct of the audit.<br />
Internal Audit<br />
The company has an internal audit function, which is<br />
independent of the company’s external auditors. The internal<br />
audit function of the company is undertaken in conjunction with<br />
Ernst & Young. The respective internal audit teams report to<br />
and are directed by the Audit Committee.<br />
Each year, the internal audit programme is approved by the<br />
Audit Committee. The programme of audit work considers the<br />
most significant areas of business risk in the company and<br />
is developed following discussions with senior management,<br />
review of the business process model of the company and<br />
consideration of the findings of the annual strategic risk<br />
assessment. The programme considers risks also in relation to<br />
major projects that are planned or currently under way.<br />
The role of internal audit is to:<br />
• assess the design and operating effectiveness of controls<br />
governing key operations, processes and business risks;<br />
• provide the Board with an assessment, independent of<br />
management, as to the adequacy of the company’s internal<br />
operating and financial controls, systems and practices; and<br />
• assist the Board in meeting its corporate governance and<br />
regulatory responsibilities.<br />
Store audits are conducted by the company’s internal auditors.<br />
For the year ended 31 July 2011, 306 store audits were<br />
conducted by the company’s internal auditor (2010: 296 audits).<br />
Internal business processes are audited by Ernst & Young also.<br />
Principle 8 – Shareholder Relations<br />
The Board fosters constructive relationships with shareholders<br />
that encourage them to engage with the company.<br />
The company values its dialogue with institutional and<br />
private investors and is committed to giving all shareholders<br />
comprehensive, timely and equal access to information about<br />
its activities.<br />
The Board aims to ensure that shareholders are informed of<br />
all information necessary to assess the Board’s performance.<br />
They do so through a communication strategy which includes:<br />
• periodic and continuous disclosure to NZX and ASX;<br />
• information provided to analysts and media;<br />
• half-yearly and Annual Reports;<br />
• the annual shareholders’ meeting and any other meetings<br />
called to obtain approval for Board actions as appropriate; and<br />
• the company’s website.<br />
In accordance with the New Zealand Companies Act and NZSX<br />
Listing Rules, the company is no longer required to automatically<br />
mail a hard copy of its half-yearly or Annual Reports to shareholders.<br />
The Board has moved to electronic reporting. Even though<br />
interim and Annual Reports are available electronically,<br />
shareholders can request a hard copy of the report to be mailed<br />
to them free of charge.<br />
The notice of meeting is circulated at least 10 days before the<br />
meeting and is also posted on the company’s website.<br />
Shareholders are provided with notes on all the resolutions<br />
proposed through the notice of meeting each year. Directors<br />
and the company’s external auditor are available to answer<br />
shareholder questions. The Board encourages full participation<br />
of shareholders to ensure a high level of accountability and<br />
identification with the company’s strategies and goals.<br />
In addition, web-casting and teleconferencing facilities are<br />
provided for market briefings to encourage participation from all<br />
stakeholders, regardless of their location.<br />
Principle 9 – Stakeholder Interests<br />
The Board respects the interests of stakeholders within the context<br />
of the company’s ownership type and its fundamental purpose.<br />
The Warehouse aims to manage its business in a way that will<br />
produce positive outcomes for all stakeholders including the<br />
public, customers, Team Members, suppliers and shareholders.<br />
We monitor progress in business sustainability as we seek to<br />
actively improve the social and environmental characteristics of the<br />
business. This is a goal to which The Warehouse is strategically<br />
committed and which it incorporates in its day-to-day operations.<br />
The Warehouse is listed on the FTSE4Good Index which<br />
identifies companies that meet globally recognised corporate<br />
responsibility standards.<br />
Diversity<br />
The Warehouse is committed to providing a work environment<br />
where we recognise and value different skills, ability and<br />
experiences and where people are treated fairly in order to<br />
attract and retain talented people who will contribute to the<br />
achievement of its corporate objectives.<br />
We encourage a working environment in which individual<br />
diversity is recognised and where equal employment<br />
opportunities are offered to all potential and existing Team<br />
Members on the basis of relevant merit.<br />
During the year The Warehouse Equal Employment Opportunity<br />
Policy was reviewed in line with recent guidelines in respect of<br />
diversity issued by the ASX. The Board has adopted a Diversity<br />
Policy for the Group. Executive teams will assist the Board in<br />
establishing measurable objectives for achieving diversity.<br />
The Board will assess annually both the measurable objectives<br />
and progress towards achieving them and will ensure that the<br />
appropriate disclosures are made in the Annual Report, in<br />
addition to the diversity disclosures which been included for many<br />
years in The Warehouse Community and Environment Report.<br />
The Warehouse’s commitment to Communities and Environment<br />
is further demonstrated on page 20.<br />
Statutory Disclosures<br />
Disclosures of Interests by Directors<br />
General Disclosures<br />
The following are particulars of general disclosures of interest given by the Directors of the company pursuant to section 140(2) of<br />
the Companies Act 1993:<br />
Robert Challinor<br />
Director, Electronic Navigation Limited<br />
Director, CDL Investments New Zealand Limited<br />
Director, Enterprise Motor Group Limited and subsidiaries<br />
Director, Challinor and Associates Limited<br />
Director, Gwendoline Holdings Limited (non-trading)<br />
JV Committee Member, Copthorne Bay of Islands Resort<br />
Director, James Raymond Holdings Limited (non-trading)<br />
Graham Evans<br />
Director, Mighty River Power Limited<br />
Chairman, Multichem Group Limited and associated companies Director, PGG Wrightson Limited<br />
Trustee, Cornwall Park Trust Board<br />
James Ogden<br />
Director, MTA Group Investments Limited<br />
Sir Stephen Tindall<br />
and associated companies<br />
Chairman, KEA New Zealand<br />
Director, Ogden Consulting Limited<br />
Director, Branches Station Limited<br />
Director, Petone Investments Limited<br />
Director, Byron Corporation Limited<br />
Director, Seaworks Limited and associated companies<br />
Director, Foundation Services Limited<br />
Director, Summerset Group Holdings Limited<br />
Director, Highland Resorts Limited<br />
and associated companies<br />
Director, K One W One Limited<br />
Director, Upstart Capital Limited<br />
Director, K One W One (No 2) Limited<br />
Director, Vehicle Testing Group Limited<br />
Director, Norwood Investments Limited<br />
Council Member, Victoria University of Wellington<br />
Director, Nurture Nature Limited<br />
Independent Member, AMP Capital Property Portfolio Fund Director, Sustainable New Zealand Limited<br />
(Governance Committee)<br />
Member, New Zealand Institute<br />
Chair, Audit Committee of the Ministry of Social Development<br />
Chair, Value for Money Advisory Board of the<br />
Ministry of Social Development<br />
Member, Audit and Risk Committee of the Ministry of<br />
Foreign Affairs and Trade<br />
Member, Finance and Risk Committee of Crown Forestry<br />
Rental Trust<br />
Member, Nominating Committee for the Guardians of<br />
New Zealand Superannuation<br />
Janine Smith<br />
Chairman, McLarens Young (New Zealand) Limited<br />
and associated companies<br />
Chairman, AsureQuality Limited<br />
Director, Steel & Tube Holdings Limited<br />
Principal, The Boardroom Practice Limited<br />
Member, University of Auckland New Zealand Governance<br />
Centre Advisory Board<br />
Member, Massey University College of Business Advisory Board<br />
Director of other privately owned companies<br />
Keith Smith<br />
Chairman, Goodman (NZ) Limited<br />
Chairman, Healthcare Holdings Limited and subsidiaries<br />
Chairman, Mobile Surgical Services Limited<br />
Chairman, Tourism Holdings Limited<br />
Member, New Zealand Business Council for<br />
Sustainable Development<br />
Trustee, The Tindall Foundation<br />
Eduard (Ted) van Arkel*<br />
Chairman, Health Benefits Limited<br />
Chairman, Restaurant Brands NZ Limited<br />
Chairman, UNITEC NZ Limited<br />
Director, Abano Healthcare Group Limited<br />
Director, Auckland Regional Chamber of<br />
Commerce & Industry Limited<br />
Director, AWF Group Limited<br />
Director, Danske Mobler Limited<br />
Director, Lang Properties Limited<br />
Director, Nestlé NZ Limited<br />
Director, Van Arkel & Co Limited<br />
* Appointed 1 July 2011<br />
Mark Callaghan †<br />
Director, Callaghan & Associates<br />
† Resigned 31 July 2011<br />
Robert Tindall (Alternate Director) ‡<br />
Trustee, The Tindall Foundation<br />
‡ Appointed 1 July 2011<br />
Indemnity and Insurance<br />
In accordance with section 162 of the Companies Act 1993 and the constitution of the company, the company has provided<br />
insurance for, and indemnities to, Directors and employees of the Group and its subsidiaries for losses from actions undertaken in<br />
the course of their legitimate duties. The insurance includes indemnity costs and expenses incurred to defend an action that falls<br />
outside the scope of the indemnity.<br />
CORPORATE GOVERNANCE 84 STATUTORY DISCLOSURES 85