CB Goode, AC BCom (Hons) Melb, MBA (Col. Uni. N.Y.), HonLLD (Melb), (Chairman)
Appointed a Director in February 1988 and Chairman in May 1999, Chairman of the Shell Relationship Committee and an ex-officio member of all other Board Committees. Chairman of Australia and New Zealand Banking Group Limited; Australian United Investment Company Limited; Diversified United Investment Limited; The Howard Florey Institute and The Ian Potter Foundation Ltd. Director of Singapore Airlines Ltd. Age: 63.
JH Akehurst, MA (Oxon), FIMechE, (Managing Director)
Appointed a Director in February 1996. Appointed Executive General Manager of Woodside’s operating subsidiaries from June 1994 until his appointment as Managing Director in April 1996. Member of the Corporate Governance; Health, Safety and Environment; Finance; and Shell Relationship Committees. Director of Oil Search
Limited and a member of the Boards of the following entities: The University of Western Australia’s Graduate School of Management; the Asia Research Centre and Youth Focus.
Over 25 years experience in the international oil industry. Age: 53.
RES Argyle, LLB, DIP PL (Dundee), FAICD
Appointed a Director in November 1995. Chairman of the Audit and Corporate Governance Committees and a member of the Shell Relationship Committee. Chairman of Aurora Gold Ltd and a Director of Woodside Group Staff Superannuation Pty. Ltd. Over 35 years experience as a commercial and resources lawyer in Perth. Consultant, Freehills, Solicitors. Age: 65.
JR Broadbent, BA (Economics and Maths), Hon. D. Litt (UWS)
Appointed a Director in June 1998. Chairman of the Finance Committee and a member of the Audit; Human Resources and Shell Relationship Committees. Board Member of the Reserve Bank of Australia and a Director of Coca-Cola Amatil Limited. Vice-President of the Board of Trustees of the Art Gallery of New South Wales; a member of the Sydney Advisory Board- Salvation Army Eastern Territory and a Director of the Sydney Theatre Company. Over 20 years experience in the finance sector, principally as a senior executive of Bankers Trust Australia. Age: 53.
KA Dean, BCom (Hons), FCPA, MAICD
Appointed a Director in February 1998. Member of the Finance Committee. Chief Executive Officer of Shell Finance Services, a division of Shell International Limited, London. Over 25 years experience in the Australian and international oil industry. Age: 49.
PJB Duncan, BE (Hons.1), DBS
Appointed a Director in June 1999. Member of the following Board Committees: Corporate Governance; and Health, Safety and Environment. Director of Orica Limited, GasNet Australia Ltd and National Australia Bank Limited. Formerly Chairman of The Shell Group of Companies in Australia; Shell New Zealand Limited and Shell New Zealand Holdings Limited. Over 35 years experience in the international oil industry. (Resigned as a Director effective as of 28 February 2002) Age: 60.
Dr AJ Parsley, BSc, PhD
Appointed a Director in June 1999. Member of the following Board Committees: Audit; Human Resources; and Health, Safety and Environment. Chairman of Shell Australia Ltd. and Chief Executive Officer, Shell Development (Australia) Pty. Ltd. Over 30 years experience in the international oil industry. Age: 58.
Dr PJB Rose, AO, BCom (NZ), DipEc (Camb), PhD
Appointed a Director in December 1990. Chairman of the Human Resources Committee and a member of the Corporate Governance; Finance; and Shell Relationship Committees. Director of Australian United Investment Company Limited, The Ian Potter Foundation Limited and the Australian Ballet Centre. Formerly the Adviser to the Prime Minister of Australia from 1977 to 1983; Director of the University of Melbourne Business School and the Sidney Myer Professor of Commerce and Business Administration. Age: 66.
RH Searby, QC, MA (Oxon)
Appointed a Director in June 1998. Member of the Corporate Governance; Health, Safety and Environment; Human Resources; and Shell Relationship Committees. Chancellor of Deakin University and a Director of BRL Hardy Ltd and Times Newspapers Holdings Ltd (U.K.). Formerly Chairman of The News Corporation Limited and Equity Trustees Ltd. Appointed Queen’s Counsel in 1971. Over 20 years experience in the resources industry. Age: 70.
RAG Vines, BE (Hons), DSc, (Cit. WA), FAIM, FAIMM, FTSE
Appointed a Director in February 1997. Chairman of the Health, Safety and Environment Committee and member of the Audit; Finance; and Shell Relationship Committees. Director of WMC Limited. Formerly Chairman and Managing Director of Alcoa of Australia Limited.
Over 35 years experience with Alcoa internationally and in Australia. Age: 65.
This statement summarises the Board’s governance practices that were in effect during the year.
Communications with Shareholders
The Board aims to ensure that shareholders are kept informed of all major developments affecting Woodside. Information is communicated to shareholders through the distribution of the Annual and Half-Yearly Reports; releases made by Woodside throughout the year with respect to changes in the business, future developments, exploration and drilling progress and results; and in the Chairman’s address delivered at the Annual General Meeting. Shareholders at the Annual General Meeting are encouraged to ask questions regarding the Company’s governance and business. Woodside also posts all ASX and media releases on the Company’s website www.woodside.com.au.
Woodside complies with ASX continuous disclosure obligations and endorses the guidance principles contained in the Australian Securities and Investments Commission’s “Better Disclosure for Investors” publication.
In keeping with those principles, Woodside’s disclosure practices are aimed at ensuring timely access for all investors to Company information released under the continuous disclosure rules.
These practices include:
<![if !vml]><![endif]> Information released by the Company, including media releases and investor briefing materials, is first released to ASX.
<![if !vml]><![endif]> That information is posted on the Company’s website immediately following release to ASX.
<![if !vml]><![endif]> A voluntary regime of structured disclosure at regular intervals for its drilling programs.
<![if !vml]><![endif]> Analyst and press briefings are conducted following the release of half-year results, full-year results and major announcements, and additional explanatory information is included where appropriate in the Company’s quarterly exploration, production and development reports.
<![if !vml]><![endif]> The Company’s senior management meets regularly to consider its continuous disclosure obligations.
Unless it considers it has an obligation to make a statement on a particular matter, the Company’s policy is not to respond to market rumours and media speculation.
Board membership remained at ten for the year.
All Directors are non-executive with the exception of the Managing Director. The Chairman and five other Directors are independent non-executive Directors. Three non-executive Directors are either current or retired executives of the Royal Dutch-Shell Group, which is a substantial shareholder in the Company.
In assessing the composition of the Board, the Directors have regard for the following guidelines:
<![if !vml]><![endif]> the Chairman should be both non-executive and independent and an Australian citizen or permanent resident;
<![if !vml]><![endif]> the Managing Director should be a full-time employee of the Company;
<![if !vml]><![endif]> more than half of the Board should comprise Directors who are both non-executive and independent;
<![if !vml]><![endif]> the Board should represent a broad range of qualifications, experience and expertise considered of benefit to the Company; and
<![if !vml]><![endif]> the number of Shell-nominated Directors, as a proportion of the Board, should approximate the proportion that Shell’s holding of fully paid shares in the Company bears to all of the issued fully paid ordinary shares in the Company.
Details of the age, experience, qualifications and length of service of Directors are set out on pages 56 and 57 of this Annual Report.
Election of Directors is a matter for shareholders in a general meeting and the Board will bring forward candidates for shareholders’ consideration. As a guide to Directors’ tenure, the Board’s position is expressed in the following policy, adopted in March 1999:
<![if !vml]><![endif]> non-executive Directors appointed after March 1999 will normally retire on attaining age 70 years or on completion of 15 years service, whichever date occurs first;
<![if !vml]><![endif]> non-executive Directors in office in March 1999 will normally retire on completion of 15 years service or 8 years from the date of adoption of this policy, whichever occurs later, or on attaining the age of 72 years;
<![if !vml]><![endif]> the Board may support extensions of these dates and periods in particular circumstances; and
<![if !vml]><![endif]> an executive Director may only become eligible for appointment as a non-executive Director after a suitable period away from the Board.
The Board’s primary responsibility is to oversee Woodside’s business activities and its management for the benefit of Woodside shareholders, while also recognising its responsibilities to its employees, the community and environment within which it operates and, where appropriate, other stakeholders. Responsibility for management of Woodside’s business activities is delegated to the Managing Director, who is accountable to the Board.
Having regard to the uncertainties of the oil and gas business, as well as the need to replace depleting assets, the Board places significant emphasis on long-range planning, as well as participation in joint ventures in order to share risks. To achieve these objectives, management is expected to engage in commercial relations with others in a manner that will continue to make Woodside their “partner of choice”. In addition, management is charged with the responsibility to submit to the Board its proposals for strategic direction, as well as all necessary financial plans and proposals for major projects.
The key responsibilities of the Board include:
<![if !vml]><![endif]> developing strategy with management and approving plans, new investments, major capital and operating expenditures and major funding activities proposed by management;
<![if !vml]><![endif]> defining and setting performance expectations for the Company and monitoring actual performance;
<![if !vml]><![endif]> appointing and reviewing the performance of the Managing Director and senior management;
<![if !vml]><![endif]> assuring itself that there are effective health, safety, environmental and operational procedures in place;
<![if !vml]><![endif]> assuring itself that there is effective budgeting and financial supervision;
<![if !vml]><![endif]> assuring itself that appropriate audit arrangements are in place;
<![if !vml]><![endif]> satisfying itself there are effective reporting systems that will assure the Board that proper financial, operational, compliance, risk management and internal control processes are in place and functioning appropriately; and
<![if !vml]><![endif]> reporting to and advising shareholders.
During the year, the Board carried out its annual performance evaluation to assess its own performance and the effective workings of its committees. Board members complete confidential questionnaires, the results of which are analysed by an external consultant and issues are addressed in a formal period outside normal Board meetings. In addition, the Board assesses the performance of the Managing Director by reference to agreed key duties.
The terms of reference and composition of each Board committee are also reviewed and updated as appropriate each year.
The Board held nine scheduled meetings during the year ended 31 December 2001 and in addition had three unscheduled meetings. Senior staff attended and made presentations at Board meetings as considered appropriate and were available for questioning by Board members. In March 2001 the Board held its annual strategy sessions with management over a three-day, residential “retreat” and in July 2001 it visited the North West Shelf Venture’s operations.
Conflicts of Interest
The Board has in place ‘conflict of interest guidelines’ which operate if there is potential for conflict between the personal or other interests of a Director and the business of Woodside. In the event that a conflict of interest exists, the Director does not receive the relevant Board papers regarding such issues and when the matter comes before the Board for discussion, the Director withdraws from the meeting for the period the matter is considered and takes no part in the discussions or decision-making process.
Independent Professional Advice
The Directors may, in carrying out their duties to the Company, seek external professional advice. They are entitled to reimbursement of all reasonable costs where such request for advice is approved by the Chairman.
The Board has as one of its main objectives, the oversight of the management of areas where risk to Woodside is perceived to be significant. A comprehensive business risk review, led by an external consultant and extending to all areas of activity, was completed in 2000. The recommendations from the risk review continue to be deployed throughout the Company and embedded into the management systems. The program is aimed at ensuring that the Company conducts its operations in a manner that allows risks to be identified, assessed and appropriately managed. Management is accountable for the implementation of this program. Board papers and management presentations routinely address the risks of all proposals submitted to the Board for approval. Discussion and approval of the Annual Budget and a rolling 10-year forward view presented by management assist the Board to identify significant business risks and, together with management, decide upon and implement ways of managing those risks. Performance is monitored by management and communicated through regular Board reports.
Code of Business Ethics
The Board has in place a Code of Business Ethics, which applies to all Directors and employees within the group.
Directors and Employee Share Dealings
The Board also has in place a specific share trading policy, binding on Directors and employees, designed to assist Directors and employees to avoid insider-trading, and providing guidelines for trading in Woodside securities. The policy stipulates that the only appropriate time for a Director or employee to acquire or sell Woodside shares is when he or she is not in possession of price-sensitive information that is not generally available to the market.
Directors wishing to buy or sell Woodside securities in accordance with the policy may only do so after first having advised the Chairman of his or her intention. In the case of employees, there is a corresponding notification requirement.
Committees of the Board
The term of the Shell Relationship Committee formed in August 2000 was extended to June 2002. Its members comprise all the non Shell-nominated Directors. The purpose of the Committee is to provide a forum in which Directors can discuss any matters relating to the ongoing relationship with Shell, any future proposal by Shell, or any matters relating to the terms or structure of the Alliance Agreement with Shell, in the absence of the Shell-nominated Directors.
Six standing Board committees assisted the Board in the discharge of its responsibilities in 2001.
<![if !vml]><![endif]> Audit;
<![if !vml]><![endif]> Corporate Governance;
<![if !vml]><![endif]> Finance;
<![if !vml]><![endif]> Health, Safety and Environment;
<![if !vml]><![endif]> Human Resources; and
<![if !vml]><![endif]> Nominations.
Other ad hoc committees are convened from time to time to address major transactions or other matters calling for special attention.
The Audit Committee assists the Board to assure itself that there are in place within the Woodside Group appropriate and effective accounting, auditing, internal control, business risk management, compliance and reporting systems, processes and practices. In particular it:
<![if !vml]><![endif]> reviews and approves accounting policies;
<![if !vml]><![endif]> reviews the draft half-year and annual consolidated accounts of the Group and the Directors’ Report, prior to submission to the Board for approval;
<![if !vml]><![endif]> reviews internal audit reports and progress on implementation of recommendations;
<![if !vml]><![endif]> oversees and reports to the Board upon the internal control and business risk arrangements adopted by management;
<![if !vml]><![endif]> makes recommendations to the Board on the appointment of the external auditor;
<![if !vml]><![endif]> approves the annual external audit fee;
<![if !vml]><![endif]> reviews the annual and forward
<![if !vml]><![endif]> oversees Group compliance with statutory responsibilities; and when considering the Annual and Half-Yearly financial reports, reviews the carrying value of assets, provisions and other accounting issues.
Members of the Committee in 2001 were Mr KA Dean (Chairman), Mr RES Argyle, Mr CB Goode (ex-officio), Dr AJ Parsley and Dr PJB Rose. The internal and external auditors, the Managing Director, the Chief Financial Officer and the Group Accounting Manager attend Committee meetings by invitation. The Committee met five times during the year.
Corporate Governance Committee
The Corporate Governance Committee advises on and monitors Woodside’s governance practices and assists the Board to assure itself that there is in place an appropriate process for the direction and control of the Group. In particular it:
<![if !vml]><![endif]> reviews the way the Board and its committees work and their evaluation processes;
<![if !vml]><![endif]> monitors the management systems and processes in place for compliance with laws and regulatory requirements; and
<![if !vml]><![endif]> monitors the management systems in place for addressing significant business risks and the framework of internal management controls.
Members of the Committee in 2001 were
Mr RES Argyle (Chairman),
Mr JH Akehurst, Mr KA Dean,
Mr CB Goode (ex-officio) and
Mr RH Searby.
The Committee met four times during the year.
The Finance Committee reviews and makes recommendations to the Board concerning:
<![if !vml]><![endif]> specific funding proposals;
<![if !vml]><![endif]> borrowing and compliance with loan terms;
<![if !vml]><![endif]> the scope of insurance cover; and
<![if !vml]><![endif]> financial price risks resulting from movements in oil prices, interest rates and exchange rates and the extent and methods of any financial hedgings which are undertaken.
Executive Management Team
Woodside’s Executive Management Team as at 20 February 2002.
General Manager - South Eastern Australia
Barry joined Woodside in 1992 following 12 years with Esso Australia. Following a three-year secondment to Shell, Barry was Offshore Operations Manager for the North West Shelf Ventures from 1995 to 2000. Barry was Acting Director, Australian Gas from November 2000 until his appointment as General Manager of the South-Eastern Australia Division in July 2001.
Key Accountability: To build a profitable new domestic gas business in eastern Australia around Woodside’s interests in Bass Strait and discoveries in the Otway Basin, and manage Woodside’s investments in Pulse Energy Pty Ltd and EdgeCap Pty Limited. Age: 48.
Chief Legal Officer
Alan joined Woodside in 1981 and was appointed Chief Legal Officer covering all aspects of Woodside’s legal activities in 1997.
Key Accountability: To manage the legal aspects of all Woodside activities including the Company Secretariat. Age: 57.
Chief Financial Officer
Bob joined Woodside in February 1981 as Manager of Corporate Accounting in Melbourne and since October 1985 has held a number of senior finance-related positions in Perth culminating in his appointment as Chief Financial Officer in January 1997.
Key Accountability: To ensure an optimum capital structure which includes the securing of cost-effective funds for ongoing business needs and new opportunities, to make recommendations on the distribution of capital to shareholders and to drive the process for management review of investment proposals. Bob is also responsible for financial due diligence and governance which includes monitoring and reporting, taxation, financial risk management and investor and stakeholder relations. Age: 57.
Director - Corporate Strategy, Planning and Performance
Chris joined Woodside in 1981 and was previously the General Manager, Human Resources, Corporate and Public Affairs. He was appointed Director of the Corporate Strategy, Planning and Performance Division in January 2000.
Key Accountability: To drive the processes for business strategy and planning, performance management and external affairs activities and to provide shareholder value assurance for Woodside through North West Shelf Ventures/Australian LNG (NWSV/ALNG) and Timor Sea Gas owner representation. Chris is also accountable for the Mergers and Acquisitions Department. Age: 53.
Managing Director - Metasource Pty. Ltd.
Jack joined Woodside as Managing Director of Metasource Pty Ltd in late 2001 after nearly 21 years with Shell working both locally and internationally in the following areas: operations management, supply, marketing, strategy and project development.
Key Accountability: To build a new profitable business for Woodside to meet growing demand from customers for “green” energy, based on selective investments in renewable energy technologies and new ways of delivering and converting gas for power and other uses. Age: 46.
Chief Executive Officer - North West Shelf Ventures
Chris was seconded by Shell to Woodside as Chief Executive Officer of North West Shelf Ventures in mid-1999 after 20 years with the Exploration and Production arm of Shell International.
Key Accountability: To improve the bottom line business performance of the existing North West Shelf Ventures assets and create and implement profitable growth of the total North West Shelf Ventures business. Chris is also accountable for governance of health, safety and environmental performance throughout Woodside. Age: 54.
Director - New Ventures
Agu was seconded by Shell to Woodside in mid-1995 as General Manager and then Director of the New Ventures Division, following 15 years of exploration activity with Shell, mostly on international assignments. In 2000, Agu formally joined Woodside as a permanent employee.
Key Accountability: To develop new production opportunities in Australia via successful, low-cost greenfield exploration and to build a profitable international exploration and production business. Agu is also accountable for providing world-class, sub-surface technical services to all other divisions. Age: 51
General Manager - NWS Supply Operations
Ernie joined Woodside in 1991 as Process Superintendent at the onshore gas plant and has held a number of senior operations positions including Director of Shared Services. Ernie was appointed to the position of General Manager of the North West Shelf Supply Operations in December 2001.
Key Accountability: Responsible for the operation of the North West Shelf assets. This comprises the North Rankin-A and Goodwyn-A offshore production platforms, the Cossack Pioneer (a floating production, storage and offtake facility) and the Karratha Gas Plant including all LNG and domestic gas production. Age: 51.
Director - Shared Services
Andrew joined Woodside in 2000 as the Business Services Manager for Information Technology Production Services and also held the position of Program Manager in the Shared Services Division. He was appointed Director of the Shared Services Division in December 2001.
Key Accountability: To provide market-competitive services to meet internal customer needs. This division manages cross-company processes and provides services for finance, procurement, logistics, human resources, office facilities and information technology. Age: 43.
General Manager - Governance and Human Resources
Jeff has worked in a number of senior roles within Woodside most recently as Director Australian Gas. In January 2002 he was engaged to establish a new role, that of General Manager Governance and Human Resources.
Key Accountability: To ensure that a Company-wide management framework is operating for effective risk management, compliance, governance and internal control. To provide leadership to the people-related aspects of the business, including performance leadership, supporting the organisation to live the company's values, delivery of people management systems, employee development and training, policy relating to benefits and remuneration and succession planning. Age: 51.
Director - Australian Oil
Keith joined Woodside in 1998 and was previously General Manager, Northern Business Unit. Prior to joining Woodside, Keith was on secondment from Shell to Woodside and was responsible for North West Shelf Ventures exploration.
Key Accountability: To build a best-in-class oil exploration and production business in Australia through brownfield exploration, development and production. Keith is also accountable for governance of information technology and remains the process owner for reserves accounting. Age: 48.
Members of the Committee in 2001 were Mr RAG Vines (Chairman), Mr JH Akehurst, Mr RES Argyle, Ms JR Broadbent, Mr KA Dean and Mr CB Goode (ex-officio).
The Chief Financial Officer and the Financial Risk Manager attend meetings by invitation.
The Committee met seven times during the year.
Health, Safety and Environment Committee
The Health, Safety and Environment Committee (HSE) reviews all aspects of health, safety and the environment which are relevant to Woodside’s activities. In particular it:
<![if !vml]><![endif]> monitors and reports to the Board on occupational health, safety and environmental management systems and goals, due diligence procedures and performance;
<![if !vml]><![endif]> assists the Board in seeking assurance that adequate and proper procedures and benchmarks are in place to support Woodside’s health, safety and environmental policies; and
<![if !vml]><![endif]> oversees incident investigation, audit reports, compliance and procedures for continuing improvement.
Members of the Committee in 2001 were Dr PJB Rose (Chairman), Mr JH Akehurst, Mr CB Goode (ex-officio), Dr AJ Parsley and Mr RAG Vines.
The HSE Manager attends meetings by invitation, as do relevant senior management.
The Committee met six times during the year.
Members also visited the Company’s North West Shelf operations to gain first-hand experience of the operating environment.
Human Resources Committee
The Human Resources Committee reviews and makes recommendations to the Board on the operation of key human resource management policies and processes including remuneration packages and policies applicable to the Managing Director, senior executives and Directors. The Committee obtains independent advice to assure itself and the Board that remuneration policies are appropriately positioned with respect to the market and monitors their ongoing operation.
In particular, the Committee considers:
<![if !vml]><![endif]> remuneration policy;
<![if !vml]><![endif]> recruitment policies and performance;
<![if !vml]><![endif]> succession and planning for key positions;
<![if !vml]><![endif]> performance management and appraisal;
<![if !vml]><![endif]> competence development;
<![if !vml]><![endif]> employment policies and practices; and
<![if !vml]><![endif]> compliance with statutory obligations.
Members of the Committee in 2001 were Mr RH Searby (Chairman), Ms JR Broadbent, Mr CB Goode (ex-officio), Dr AJ Parsley and Mr RAG Vines.
The Managing Director and the manager with responsibility for human resources attend Committee meetings by invitation. The Committee met five times during the year.
The Nominations Committee reviews Board composition and Board succession planning. This includes the finding, evaluating and recommending of candidates for the Board.
In carrying out this role, the duties and responsibilities of the Nominations Committee include:
<![if !vml]><![endif]> reviewing annually the size and composition of the Board;
<![if !vml]><![endif]> considering the mix of desired competencies of Board members;
<![if !vml]><![endif]> evaluating Board candidates and recommending individuals for Board appointment/shareholder election; and
<![if !vml]><![endif]> Board member performance appraisal.
In its evaluation of candidates for the Board, the Committee has regard for the guidelines mentioned above and for normally accepted nomination criteria including:
<![if !vml]><![endif]> integrity and moral reputation;
<![if !vml]><![endif]> appropriate experience and/or professional qualifications;
<![if !vml]><![endif]> the ability to exercise sound business judgement;
<![if !vml]><![endif]> a position of leadership or prominence in a specified field;
<![if !vml]><![endif]> absence of conflicts of interest or other legal impediments to serving on the Board;
<![if !vml]><![endif]> willingness to devote the required time; and
<![if !vml]><![endif]> availability to attend Board and Committee meetings.
In considering overall Board balance, the Committee also gives due consideration to the value of a diversity of backgrounds, experiences and location of the members.
Members of the Committee in 2001 were Mr CB Goode (Chairman), Mr RES Argyle, Mr PJB Duncan, Dr PJB Rose and Mr RAG Vines. The Committee met once during the year.
Details of the nature and amount of each element of the emolument of each Director and the basis upon which those emoluments are determined, are set out in the Directors’ Statutory Report and Note 38 to the Financial Statements.
Annual General Meeting
The 31st Annual General Meeting will be held in the Clarendon Ballroom at the Sheraton Towers Southgate Hotel, One Southgate Avenue, Southbank, Melbourne, Victoria on Tuesday 16 April 2002 at 10.30am. Full details of the meeting are contained in the Notice of Annual General Meeting sent with this report.
American Depository Receipts
The Bank of New York sponsors an American Depository Receipts (ADR) program in the United States of America. ADR holders should deal directly with the Bank of New York, New York, telephone (646) 885 3296, fax (646) 885 3043 on all matters relating to their ADRs.
The Company usually pays an interim dividend in September and a final dividend in March of each year. The 2001 final dividend will be paid on 21 March 2002. The record date for the 2001 final dividend is 8 March 2002.
The history of dividends paid by the Company is shown on page 65 of this Annual Report.
The following options are available regarding payment of dividends:
Electronic payments are credited on the dividend payment date and confirmed by a payment advice sent to the shareholder. Request forms for this service are available from the Company’s Share Registry at the address shown below.
All enquiries should be directed to the Company’s Share Registry at:
Computershare Investor Services Pty. Limited
Level 2, 45 St. Georges Terrace
Perth, Western Australia, 6000 Australia
Enquiries: 1300 557 010
(freecall within Australia)
613 9615 5970
Facsimile: (08) 9323 2033
All written enquiries should include your Holder Identification Number as it appears on your Holding Statement along with your current address.
A service for shareholders has been introduced to allow website access to general information on Woodside and information specific to your own shareholding.
Visitors to the site can obtain share price and related graphical information.
A discrete area of the website provides specific shareholder information. This area can only be accessed by input of your Holder Identification Number (HIN) or Security Reference Number (SRN) as well as other personal information to preserve security.
Additionally, common forms (e.g. change of address notifications) can be accessed on the website.
Change of Address
It is very important that shareholders notify the Share Registry immediately, in writing, if there is any change in their registered address.
Lost Holding Statements
Shareholders should inform the Share Registry immediately, in writing, so that a replacement statement can be arranged.
Change of Name
Shareholders who change their name should notify the Share Registry, in writing, and attach a certified copy of a relevant marriage certificate or deed poll.
Tax File Numbers (TFN)
Although it is not compulsory for each shareholder to provide a TFN or exemption details, for those shareholders who do not provide the necessary details, the Company will be obliged to deduct tax from any unfranked portion of their dividends at the top marginal rate. TFN application forms can be obtained from the Share Registry, any Australia Post office or the Australian Taxation Office.
The Company's Annual Report is the main source of information for investors and is mailed to shareholders in March. Shareholders also receive a Half-Yearly Report in September. Shareholders who do not wish to receive the Annual or Half- Yearly Report should advise the Share Registry. Woodside's financial reports are also available on its website (refer below).
Information about Woodside
Requests for specific information on the Company can be directed to the Company Secretary at the following address:
Woodside Petroleum Ltd.
No. 1 Adelaide Terrace
Perth, Western Australia, 6000
Telephone: (08) 9348 4000
Facsimile: (08) 9348 4990
Information about Woodside is available on the Internet at www.woodside.com.au.
Directors Statutory Report
Woodside Petroleum Ltd.
ABN 55 004 898 962
The Director's of Woodside Petroleum Ltd. (the Company) present their report together with the financial statements of the Company and the consolidated financial statements of the consolidated entity, being the Company and its controlled entities, for the year ended 31 December 2001 and the auditor's report thereon.
The Directors of the Company in office at any time during the financial year and at the date of this report are:
CB Goode (Chairman)
JH Akehurst (Managing Director)
Woodside Petroleum Ltd. is a company limited by shares that is incorporated and domiciled in Australia (Victoria).
It is the ultimate parent entity of the Woodside Group.
The registered office of Woodside Petroleum Ltd. is located at No. 1 Adelaide Terrace, Perth, Western Australia, 6000.
JP Morgan Chase Bank
Computershare Investor Services Pty. Limited
Ernst & Young
The number of Directors' meetings held (including meetings of committees of Directors) and the number of meetings attended by each of the Directors of the Company during the financial year are shown adjacent:
The principal activities and operations of the Company during the financial year were hydrocarbon exploration, development, production and sale.
Other than as previously referred to in this Annual Report, there were no other significant changes in the nature of the activities of the consolidated entity during the year.
Number of Employees
As at 31 December 2001, the Company had 2,420 employees.
The consolidated operating profit attributable to the CompanyÕs shareholders after provision for income tax was A$909.6 million compared with A$966.6 million in 2000.
Review of Operations
A review of the operations during the financial year and the results of those operations are set out on pages 2 to 55 and in the Financial Statements contained in this Annual Report.
Significant Changes in State of Affairs
The review of operations sets out a number of matters which have had an effect on the state of affairs of the economic entity. Other than those matters, there were no significant changes in the state of affairs of the economic entity during the financial year.
Events Subsequent to End of Financial Year
No other events have occurred subsequent to balance date which have a material effect on the financial statements of the economic entity.
In general terms, the review of operations gives an indication of likely developments and the expected results of the operations.
The Directors have declared a final dividend out of profits of the Company in respect of the year ended 31 December 2001 of 46 cents per ordinary share, fully franked payable on 21 March 2002.
A fully franked interim dividend of 24 cents was paid to shareholders on 13 September 2001. Of the total 70 cent dividend allocated for the year, 36 cents represented special dividends.
Woodside is subject to a range of environmental regulations with the most significant being:
<![if !vml]><![endif]> The Petroleum (Submerged Lands) Act 1967;
<![if !vml]><![endif]> The Environment Protection and Biodiversity Conservation Act 1999; and
<![if !vml]><![endif]> The Western Australian Environmental Protection Act 1986.
During 2001, Woodside complied with all requirements in relation to the above environmental legislation. Where required by legislation, all incidents were reported to the appropriate regulatory bodies. More detailed information on the Company's environmental performance
is provided on pages 46 to 51 of this Annual Report.
Through its environment policy, Woodside aims to plan and perform so that adverse effects on the environment are either avoided or kept to an acceptable level while meeting all statutory requirements.
A statement of the Board's governance practices in effect during the year is set out on pages 58 to 61 of this Annual Report.
Directors' and Executives' Emoluments
Fees paid to non-executive Directors of the Company are based on advice from external remuneration consultants. This advice takes into consideration the level of fees paid to Directors by other major Australian corporations, the size and complexity of the Company's operations and the responsibilities and work requirements of Board members. Particulars of emoluments paid to or for the account of Directors during 2001 are set out in Table 1 on page 67. Within the limit of A$1,400,000.00 set as the aggregate remuneration payable to non-executive Directors and approved by shareholders at the May 1999 Annual General Meeting, from 1 January 2001 Board fees payable to non-executive Directors, are determined as follows:
<![if !vml]><![endif]> For the Chairman, A$280,000.00 per annum inclusive of all committee work;
<![if !vml]><![endif]> For each other non-executive Director:
<![if !vml]><![endif]> a fee of A$57,800.00 per annum; and
<![if !vml]><![endif]> a fee of A$11,600.00 per annum for each Board committee or the Board of the trustee of the Woodside Group Staff Superannuation Fund or, where a non-executive Director is chairman of a Board committee or of the Board of the trustee of the Woodside Group Staff Superannuation Fund, then A$17,400.00 per annum.
Fees payable to non-executive Directors are fixed. Non-executive Directors are not entitled to incentive reward for annual results or otherwise according to the Company's performance.
All non-executive Directors received a contribution to superannuation equivalent to the superannuation guarantee levy, based on Board and committee fees. In addition, non-executive Directors other than those nominated by Shell Australia Limited are entitled to retirement benefits in accordance with a plan approved by shareholders at the Annual General Meeting in May 1999. Under the plan, non-executive Directors accrue a maximum retirement benefit after 10 years service on the Board. That maximum benefit is equal to three times the Director's average annual emoluments over the three years prior to retirement.
A pro-rata benefit is paid for periods of service greater than three years but less than 10 years.
Board fees are not paid to executive Directors since the responsibilities of Board membership are considered in determining the remuneration provided as part of their normal employment conditions.
Chief Executive Officer (Managing Director) and Senior Executives
Woodside has designed its remuneration and benefits policy to be consistent for all permanent staff employees, with the quantum relating to the size of the job. Woodside also sources a number of senior staff from its technical adviser, the Shell Group of Companies. The remuneration and benefits paid to Shell expatriate secondees are based on ShellÕs international human resources policies and practices, with incentives relating to Woodside performance and approved by the Human Resources Committee.
Woodside's remuneration policy for senior executives, including Shell secondees, is based on three main components, being base salary and benefits, short-term incentives and long-term incentives.
In determining the compensation payable to senior executives, the Human Resources Committee takes account of advice from the Company's human resources specialists and advice received from independent remuneration consultants.
Senior executives' remuneration is made up of three components:
<![if !vml]><![endif]> Base Salary and Benefits:
This element reflects the size of the job and the level of skill and experience of the individual and also includes superannuation and other ancillary benefits.
<![if !vml]><![endif]> Short-Term Incentive:
The amount paid is determined by annual performance against business targets for the Company and the business or service unit for which the executive is responsible. Targets are set for the year and approved by the Human Resources Committee and the quantum of the incentive is then determined and approved by the Committee on the basis of demonstrated performance against those targets at the end of the year.
<![if !vml]><![endif]> Long-Term Incentive:
This is delivered through the Woodside Employee Share Plan and links the executive's reward directly to the growth in the Company share price. This aspect of the reward program focuses the executive on the future performance of the Company over the next three to five years.
The provision of interest-free loans to purchase shares in the Company is at the discretion of the Board in accordance with the Woodside Employee Share Plan rules approved by shareholders in 1997 and is subject to Company performance. Shell secondees do not participate in this long-term incentive, but may be entitled to participate in the Share Option Plan operated by their parent company, Shell.
Woodside needs to remain competitive in each of these components of its remuneration program in order to secure, retain and motivate top quality executives from a global and highly competitive market. In recent years, the emphasis in executive remuneration, consistent with most other large companies, has been shifting towards the variable elements of the reward program, with particular focus on short-and long-term incentives related to individual and Company performance.
Directors' and Executives' Benefits
Directors' related party disclosures are set out in Note 40 to the Financial Statements.
Table 1 shows remuneration details for each Director of the Company. Table 2 shows the remuneration details for the
five most highly remunerated officers of the Company.
Directors' Interests in Shares
The particulars of Directors' interests in shares of the Company as at 31 December 2001 are set out as follows:
During or since the end of the financial year, no Director of the Company has received, or became entitled to receive, a benefit by reason of a contract made by the Company, its controlled entities or a related body corporate with a Director or with a firm of which a Director is a member, or with an entity in which a Director is a member, or with an entity in which a Director has a substantial interest other than:
<![if !vml]><![endif]> a benefit included in the aggregate amount of remuneration received, or due and receivable, by Directors other than as reported in the consolidated accounts;
<![if !vml]><![endif]> normal benefits as a full-time employee of the Company or a related corporation; or
<![if !vml]><![endif]> as outlined under the heading Indemnification and Insurance.
Indemnification and Insurance of Directors and Officers
The Company has agreed to indemnify all of the current Board members of the Company against all liabilities to another person (other than the Company or a related body corporate) that may arise from their position as Directors of the Company and its controlled entities, except where the liability arises out of conduct involving a lack of good faith. The relevant agreements stipulate that the Company will meet the full amount of any such liabilities, including costs and expenses.
During the financial year, the Company paid a premium under a contract insuring Group Officers of the Company and its controlled entities against liability incurred in that capacity. Those Group Officers include the Directors of the Company, the Company Secretary and other officers of the Company whose functions include the management of oil and gas exploration and production activities, financial management, human resource management, marketing and corporate relations of the Company and its related bodies corporate.
Disclosure of the nature of the liability and the amount of the premium is subject to a confidentiality clause under the contract of insurance. The Company has not provided any insurance for an auditor of the Company or a body corporate related to the auditor.
Rounding of Amounts
The amounts contained in this report have been rounded off to the nearest thousand dollars under the option available to the Company under Australian Securities and Investments Commission Class Order 98/0100 dated 10 July 1998.
On behalf of the Board and in accordance with a resolution of the Board of Directors made on 20 February 2002.
Charles Goode AC
Dated at Melbourne this 20th day of February 2002.