The Board keeps these continually under review to ensure they operate effectively in the best interests of the Company's shareholders and take appropriate account of existing and emerging standards and regulatory guidelines such as the ASX Corporate Governance Council Principles and Recommendations.
The Company's Corporate Governance Statement for the financial year ended 30 June 2019 is available below together with copies of the Company's Corporate Principles of Conduct, Securities Dealing Policy and Diversity Policy.
The role of the Board of Directors is generally to set objectives and goals for the operation of AMCIL, to oversee the company's management, to regularly review performance, and to monitor the company's affairs in the best interests of the company.
For these responsibilities, the Board of Directors is accountable to its shareholders as owners of the Company.
The Board has approved a comprehensive Board Charter governing its operation.
The Board has established an Investment Committee to make Investment decisions to support the Company's Corporate Objective.
Members of the Investment Committee are :
The Investment Committee operates under a charter approved by the Board.
An Audit Committee comprised of three Directors, R Myer (Chairman) RE Barker and S McKenna and meets periodically to review the Company’s accounting policies; the content of financial statements; issues relating to the controls applied to the Company’s activities; the content, effectiveness and independence of the external audit; risk management issues; compliance issues and other related matters. Meetings of the Audit Committee are attended by a partner from the Company’s auditors, PricewaterhouseCoopers, the Managing Director, RM Freeman and the Chief Financial Officer, AJB Porter by invitation (on a non-voting basis).
As a listed entity, the Company has an obligation under the Listing Rules to maintain an informed market with respect to its securities. Accordingly, we keep the market advised of all information required to be disclosed under the Rules which we believe would have material affect on the price or value of the Company’s securities.
In addition to the Half Yearly and Annual reporting requirements, there is a constant stream of information being provided to the Stock Exchange. Of particular note, is the disclosure after each month-end of the Company’s Net Asset Backing per Share. This is also disclosed at other times if a material change in value has occurred. All important Stock Exchange announcements are also posted to the Company’s website.
The aim of this policy is to provide clear guidelines on the management of risks to enable the achievement of strategic and operational objectives. It aims to cover all material risks that the entity faces. It is to be adhered to by all employees and Board members and, where relevant, contractors and consultants. The risk management methodology adopted by AMCIL is based on the AS / NZS ISO 31000:2009 Risk Management – Principles and Guidelines.
The Board is assisted in its Risk Management Activities by the Audit Committee. Co-ordination of Risk Management activities is done by the CFO, who reports to the Audit Committee on such matters.
Two key areas of risk have been identified: Investment Risk and Operational Risk.
Investment risk includes:
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 must invest 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.
In addition to the investment portfolio, the Company also operates a trading portfolio for short term opportunities. The Company seeks to enhance the return from that portfolio by also selling call and put options. In normal circumstances, the Board restricts the size of the trading portfolio to a maximum size of 10 per cent of the assets of the Company. The Board, through its Investment Committee, maintains close control of option transactions. Option transactions are limited to stocks held in the trading portfolio or in a small sub category of the investment portfolio for the purpose of enhancing returns from that portfolio and buying and/or selling stocks at attractive prices.
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, reputation risk (insofar as it relates to the operations of the Company), disaster recovery risk, and occupational health and safety risk. A further risk comprises ensuring compliance with AICS’s Australian Financial Services Licence requirements. This aspect of management’s role is specifically overseen by the Risk Management, Audit and Remuneration Committee of AICS and reported to the Company’s Audit Committee. The Chairman of the Company’s Audit Committee, R Myer, receives copies of all AICS Risk Management, Audit & Remuneration Committee papers and is invited to attend all meetings of that Committee.
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 period, and have been effective in meeting the control objectives. This statement and verification have been confirmed by AICS’s internal auditors, Ernst & Young, under the requirements of ASAE 3150.
The Company has adopted a Whistleblower Protection Policy which sets out a formal framework within which individuals are able, in a secure way, to express their genuine concerns about misconduct, an improper state of affairs or circumstances, unlawful behavious or breaches of policy, free from the threat of victimisation or reprisal and on the understanding that their concerns will be investigated and that, where appropriate, action will be taken to redress the situation.
The Board is accountable to its shareholders as owners of the Company. As such we seek to maintain active communication with them as far as practicable. In addition to the Annual and Half Year Reports sent to shareholders and the AGM, we conduct regular shareholder meetings in the mainland Australian capitals to provide shareholders 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. We also maintain this website on which are our ASX announcements, Annual Reports, Half Yearly Reports, presentations to shareholders, and related material for shareholders and investors.