The Trust has a strong governance culture and framework based on the ASX Corporate Governance Council's Principles of Good Corporate Governance and Best Practice Recommendations (ASX Principles). The governance framework is embedded in the Trust's compliance plan (referred to under the heading "Risk control and compliance") to ensure ethical behaviour, transparency and protect unitholder interests.

This statement outlines the main corporate governance practices of the responsible entity, which are currently in place. In accordance with the ASX Principles, the responsible entity has posted copies of these corporate governance practices on this website.

The responsible entity complies with the majority of the ASX Principles. Where it does not, it is largely in respect of obligations to disclose material or matters where the nature of regulation of listed trusts or of the Trust's business is such that the board of the responsible entity considers that there has been no detriment to the unitholders of the Trust from non-compliance. Areas of non-compliance and the reasons for non-compliance are noted in this statement.

Relationship between the responsible entity and Wesfarmers Limited

The responsible entity is a wholly owned subsidiary of Wesfarmers Limited (Wesfarmers).  A majority of the property income of the Trust is received from wholly owned subsidiaries of Wesfarmers. The Trust has purchased property from Wesfarmers subsidiaries, and utilised Bunnings Group Limited as project manager on property developments. Wesfarmers is a substantial unitholder in the Trust, and details of Wesfarmers' unitholding can be found in the Top 20 Unitholders section of the Investor Relations page of this website.  Further information regarding the relationship and transactions with Wesfarmers is detailed in the related party disclosure notes to the financial statements of the most recent annual report. 

Roles of the board and management

The respective roles and responsibilities of the board and management are set out in the compliance plan.

The role of the board of the responsible entity is to ensure that the Trust is managed in a manner which protects and enhances the interests of the its unitholders and takes into account the interests of officers of the responsible entity, customers, suppliers, lenders and the wider community.

The board has overall responsibility for corporate governance, including setting the strategic direction for the Trust, establishing goals for management and monitoring the achievement of these goals. This entails:

• adopting annual operating budgets for the Trust and monitoring progress against budgets;
• monitoring and overseeing the Trust's financial position;
• determining that satisfactory arrangements are in place for auditing the Trust's financial affairs;
• ensuring that all transactions with Wesfarmers Limited and other related parties are carried out at arms length, including obtaining independent valuation support for property related transactions;
• reviewing the level of adequacy of services provided by external service providers including services provided by Wesfarmers Limited;
• ensuring that appropriate policies and compliance systems are in place, and that the responsible entity and its officers act legally, ethically and responsibly on all matters; and
• complying with the statutory duties and obligations as imposed by the law.

The board has delegated responsibility for the day to day management of the Trust to the General Manager.

The separation of responsibilities between the board and management is clearly understood and respected.

Board structure

The board is currently comprised of four non-executive directors including the Chairman. Annually the directors review the composition of the board and determine that it is appropriate.

Details of directors currently in office, including their status as executive, non-executive or independent directors can be found in the Overview section under Directors and Senior Management on this website.

Director independence

A majority of directors of the responsible entity are independent.

The board's assessment of the independence of each of the directors is included as part of the directors' details in the Overview section under Directors and Senior Management on this website.

The board considers that a director is independent if the director is a non-executive director and:

• is not a substantial Unitholder of the Trust or an officer of, or otherwise associated directly with, a substantial Unitholder of the Trust;
• has not, within the last three years, been employed in an executive capacity by the responsible entity or been employed or engaged as a director of a related body corporate of the responsible entity;
• has not, within the last three years, been a principal of a professional adviser to the Trust, the responsible entity a related body corporate of the responsible entity where the adviser's revenues derived from these entities exceeds five per cent of the adviser's total revenues from all sources;
• is not an officer of or otherwise associated directly or indirectly with a material supplier, where total revenues derived by that supplier from the Trust, the responsible entity or a related body corporate of the responsible entity exceeds five per cent of that supplier's total revenues;
• has no material contractual relationship with the Trust, the responsible entity or a related body corporate of the responsible entity other than as a director of the responsible entity, where "material contractual relationship" is a relationship which could, or could be reasonably perceived to, materially interfere with the director's ability to act in the best interests of the Trust;
• has not served on the board of the responsible entity for a period which could, or could reasonably be perceived to, materially interfere with the director's ability to act in the best interests of the Trust; and
• is free from any interest and any business or other relationship which could, or could reasonably be perceived to, materially interfere with the director's ability to act in the best interests of the Trust.

Selection and appointment of directors

The responsible entity has recognised the importance of having a balanced board comprised of directors with an appropriate range of backgrounds, skills and experience. In considering potential candidates for appointment to the board, the responsible entity considers the following factors:

• the qualifications, expertise and experience of the person which are relevant to the role of director of the responsible entity;
• the extent to which the qualifications, expertise and experience of the person complement the qualifications, expertise and experience of incumbent directors;
• the professional and personal reputation of the person; and
• any persons nominated as executive directors must be of sufficient stature and security of employment to express independent views on any matter.

All non-executive directors are expected to voluntarily review their membership of the board from time-to-time taking into account length of service, age, qualifications and expertise relevant to the responsible entity's then current policy and programme, together with the other criteria considered desirable for composition of a balanced board and the overall interests of the responsible entity and the Trust.

In addition each quarter, all non-executive directors are required to review the number of directorships that they hold and confirm that they are able to devote sufficient time and attention to properly fulfil their duties and responsibilities to the board of the responsible entity.

The board considers that the establishment of a nomination committee is unnecessary given that:

• the board consists of only four directors and is therefore not of a size sufficient to justify the formation of board committee for this task; and
• the board's adoption of the independence standards set out above, combined with the factors considered by the board in assessing potential candidates for directorship of the responsible entity, ensure that the nomination and selection process for directors is transparent and that appointees to the board have the requisite qualifications, experience and expertise in the market.

Given that there is not a nomination committee, the responsible entity does not comply with Recommendation 2.3 of the ASX principles.

Independent professional advice

Subject to prior approval of the Chairman, directors may obtain independent professional advice at the expense of the responsible entity on matters arising in the course of their board duties.

Trading in units

Trading in the Trust's units by the directors, employees and contractors of the responsible entity is restricted under the responsible entity's Securities Dealing Policy and applicable statutory regulations.

Click here for a copy of the Securities Dealing Policy.

Financial reporting

General Manager declaration

Consistent with ASX Principle 4 and in accordance with section 295A of the Corporations Act 2001, the Trust's financial report preparation and approval process for each financial year, involves the General Manager of the responsible entity providing a written statement to the board that, to the best of his knowledge and belief:

• the Trust's financial report presents a true and fair view of the Trust's financial condition and operating results and is in accordance with applicable accounting standards; and
• the Trust's financial records for the financial year have been properly maintained in accordance with section 286 of the Corporations Act 2001.

Audit and risk committee

The compliance plan entrenches processes for reporting and audit purposes.

The board formally constituted an Audit and Risk Committee.

Click here to view the Trust's Audit and Risk Committee Charter

The Committee consists of the entire board and is chaired by Mr Mansell, being an independent director of the responsible entity.

Rotation of lead external audit partner

In December 2007 the Trust changed audit firms and consequently a new lead audit partner was appointed.

Risk control and compliance

As a registered managed investment scheme, the responsible entity has a compliance plan that has been lodged with the Australian Securities and Investments Commission (ASIC). Operation of the Trust in accordance with the compliance plan ensures that the rights and interests of unitholders are protected and that business risks are identified and properly managed. Copies of the compliance plan are available through ASIC.

In particular, the compliance plan establishes processes for:

• identifying and reporting breaches or non-compliance with the Corporations Act, the compliance plan, the constitution of the Trust and the responsible entity's Australian Financial Services Licence;
• compliance with the ASX Listing Rules;
• protecting Trust property;
• ensuring proper acquisition and disposal practices are followed in regard to Trust property;
• ensuring the timely collection of Trust income;
• completing regular valuation of Trust property;
• the maintenance of financial and other records to facilitate the preparation of audited/reviewed financial reports;
• ensuring proper and timely distributions to unitholders;
• complying with the Trust's investment objectives;
• managing investment risk;
• managing potential conflicts of interest among the various related parties of the Trust;
• holding and maintaining adequate insurance cover;
• ensuring that borrowing occurs only within permitted limits and ensuring that borrowing terms are complied with; and
• handling of complaints to the Trust.

The compliance plan is audited annually by an external audit firm.  In December 2007 KPMG was appointed as the compliance plan auditor.

The audit and risk committee is also responsible for assisting the board in overseeing the Trust's risk management systems. The committee is responsible for reviewing the effectiveness of those systems and recommending improvements to them.

In addition to the compliance plan, the responsible entity has in place a number of risk management controls which include the following:

• guidelines and limits for the approval of capital and operating expenditure;
• policies and procedures for the management of financial risk, including exposure to financial instruments and movements in interest rates; and
• an insurance and risk management programme.

As the majority of members of the board are external directors, the board does not consider it is currently necessary to form a separate compliance committee in addition to the board of the responsible entity.

Discretionary Unit Pricing Policy

The constitution for the Trust allows the responsible entity of the Trust to exercise discretion in relation to unit pricing and the valuation of the Trust's assets. The Trust can, in certain circumstances, exercise discretion in:

• the calculation of the market price for units;
• determining the issue price for units;
• the calculation of the current unit value of units; and
• the valuation of the Trust's assets.

ASIC Class Order 05/26 was issued in May 2005 and requires the responsible entity to have written policy in relation to the exercise of its discretion when pricing units and valuing assets. The board has adopted a discretionary unit pricing policy and unitholders can obtain a copy of the policy from the responsible entity at no charge.

ASIC Class Order 05/26 also requires the responsible entity to keep a record of any exercise of a discretion which:

• is not covered by the discretionary unit pricing policy; or
• involves a departure from the discretionary unit pricing policy.

Unitholders can also obtain a copy of these records from the responsible entity at no charge.

General Manager's statement

In accordance with ASX Principle 7, the General Manager provides the board with a written statement that, in respect of each reporting period:

• the statement given with respect to the integrity of the financial statements was founded on a sound system of risk management and internal compliance and control which implements the policies adopted by the board of the responsible entity; and
• the Trust's risk management and internal compliance and control system was operating efficiently and effectively in all material respects.

Review of board and committee performance

The performance of the board and audit and risk committee is evaluated periodically through feedback obtained from the completion of qualitative and quantitative surveys by the directors. The results of the survey are considered and discussed at the board's subsequent annual performance and planning sessions.

Remuneration policies

The right of the responsible entity to be remunerated and indemnified by the Trust is set out in the constitution of the Trust and disclosed in the notes to the financial statements in the Trust's Annual Report. The constitution is available from ASIC and is available to unitholders on request.

Remuneration of directors and executives

Remuneration expenses of the responsible entity are not borne by the Trust. Directors are remunerated by the responsible entity, and management services are provided to the responsible entity by Wesfarmers Limited.

Each director is entitled to an annual director's fee. Directors do not receive option or bonus payments, nor do they receive retirement benefits in connection with their directorships other than statutory superannuation. There are no equity incentive schemes in relation to the Trust.

Remuneration Committee

The board considers that the establishment of a remuneration committee is not necessary given that:

• the board consists of only four directors and is therefore not of a size sufficient to justify the formation of a separate remuneration committee;
• the Responsible Entity's fee is prescribed in the constitution of the Trust and any change to that fee would require the approval of unitholders; and
• as directors and officers of the responsible entity are not remunerated by the Trust, unitholders have no direct exposure to those remuneration expenses.

Given that there is not a remuneration committee, the responsible entity does not comply with Remuneration 9.2 of the ASX Principles.

Continuous disclosure and communications with unitholders

The responsible entity has systems in place to ensure timely disclosure of price sensitive information to the market. Officers of the Trust receive training on their continuous disclosure obligations and all announcements made to the market, including information provided to analysts, are posted to the Trust's website.

To enhance communication with unitholders, important information including details of the Trust's properties, financial performance, distribution history and the Trust's complaints handling procedure can be found on the website.

Ethics and conduct

The responsible entity has adopted a code of conduct which sets out minimum acceptable standards of behaviour to ensure that dealings are conducted with integrity and honesty, and the highest standards of corporate behaviour and accountability are maintained.

In addition, the board has adopted the Code of Conduct for directors recommended by the Australian Institute of Company Directors.