In recognising the need for the highest standards of corporate behaviour and accountability, the Directors of APGF Management Limited (APGM) and Australian Property Growth Limited (APGL), collectively known as Australian Property Growth Fund (“APGF” or “Fund”) support the principles of corporate governance.
The Directors have a strong commitment to good corporate governance. Their guiding principle in meeting this responsibility is to act honestly, conscientiously and fairly in accordance with the law in the interests of investors and other stakeholders.
Click here to learn more about APGF's Corporate Governance Committees, including the Compliance Committee, Audit & Risk Committee and Remuneration Committee.
Code of Corporate Governance Overview
The Directors of APGM and APGL are committed to maintaining a high standard of corporate governance that yields the best results for the Fund’s security holders and other stakeholders.
To achieve its objectives, the Fund endeavours to be an organisation that rewards its security holders, is responsible to its stakeholders’ needs and partners with the community.
Good corporate governance is not just about compliance, but about values and behaviour. The Directors of APGM and APGL have developed and implemented policies and practices which take into account the second edition of the ASX Principles of Good Corporate Governance and Best Practice Recommendations (‘Principles’) developed by the ASX Corporate Governance Council and published in August 2007.
These policies are reviewed annually and their maintenance is overseen by the Directors.
A summary of the Fund’s corporate governance policies and practices, organised in order of the Principles, is set out below:
- Principle 1 - Board and Management
- Principle 2 - Board Structure
- Principle 3 - Ethical and Responsible Decision Making
- Principle 4 - Integrity of Financial Reporting
- Principle 5 - Timely and Balanced Disclosure
- Principle 6 - Respect Rights of Security Holders
- Principle 7 - Recognise and Manage Risk
- Principle 8 - Remuneration
Principle 1: Board and Management
This Code of Corporate Governance (‘Code’) sets out the key governance principles adopted by APGM and APGL in governing the Fund. The Code recognises the fundamental difference between the Directors’ roles and responsibilities and that of management – the Directors’ main role is to set corporate strategy and goals with management being responsible for their implementation.
Annual performance reviews were conducted during the reporting period for senior executives against appropriate measures.
Principle 2: Board Structure
Effective from 30 June 2010 the Board of APGM had three Directors (including the Chairman) one of whom was a non-executive Director and APGL had five Directors (including the Chairman) four of whom were non-executive Directors. The roles of the Chairman and Managing Director are exercised by different individuals.
The Boards have established an Audit & Risk Committee, Compliance Committee and Remuneration Committee. Due to the limited size of the Boards, the role of a nominations committee has been assumed by the Boards. Every Director and Committee Member of the Boards has the right to seek independent professional advice in connection with carrying out their duties at the expense of the Fund. Written approval of the Chairman is required prior to a Director or Committee Member seeking independent professional advice.
The Boards do not consider that a Director’s independence, age or length of service on the Board is a factor affecting a Director’s ability to act in the best interests of security holders and the Fund.
Annual formal performance reviews are not conducted for the Boards, committees and for individual Directors.
Principle 3: Ethical and Responsible Decision Making
Directors are expected at all times to uphold the Code of Corporate Governance in order to promote the interests of the Fund and its security holders and to drive its relationships and responsibilities with security holders, stakeholders and the broad community.
Through training initiatives on compliance with legal obligations, regular reviews of corporate policies including the Conflict of Interests Policy and related party registers, and enforcement of the Code of Corporate Governance, the Boards strive to actively promote ethical and responsible decision-making within the operations and activities of the Fund.
Principle 4: Integrity of Financial Reporting
The Audit and Risk Committee operates under a written charter approved by the Boards and focuses on issues relevant to the integrity of the Fund’s financial reporting and risk management. The Audit and Risk Committee is charged with making recommendations to the Boards on the adequacy of the external audits and the independence of the external auditors, internal controls, and risk management and compliance procedures.
The Fund’s Audit and Risk Committee also monitors and liaises with the Responsible Entity’s Compliance Committee to ensure that the conditions of the Responsible Entity’s AFSL are adhered to at all times.
The Boards do not consider the independence of the Audit & Risk Committee is a factor affecting the committee’s ability to safeguard the integrity of the Fund’s financial reporting practices.
The Managing Director and Chief Financial Officer must annually state in writing to the Boards that the Fund’s annual audited statutory financial reports present a true and fair view, in all material respects, of the Fund’s financial position and operational results in accordance with the relevant accounting standards.
Principle 5: Timely and Balanced Disclosure
The Boards are committed to keeping the market informed in a timely and balanced manner of all material information concerning the Fund including its financial position, performance, ownership and governance. The Boards are committed to creating and maintaining an informed market in its securities and enhancing corporate governance by encouraging a culture of transparency in relation to the Fund’s operations and corporate activities. The Fund will also provide relevant information to media organisations, to ensure the broadest possible communication with security holders and the general market.
The Managing Director and Company Secretary are responsible for communications with the BSX.
Principle 6: Respect Rights of Security holders
The Boards will promote effective communication with security holders, by providing them with ready access to balanced, understandable information about the Fund and encourage their participation at general meetings. The Fund maintains an informative website that contains copies of press releases, annual reports, security holders information, policies and contact details.
Principle 7: Recognise and Manage Risk
The Boards believe that risk management and internal controls are a critical part of the Fund’s operations and a comprehensive risk management program has been developed. Management of risk is a key function of the Audit and Risk Committee under its charter.
Due to the size of the Fund, the Boards do not have a defined internal audit function. It is incumbent on the Audit & Risk Committee to manage the inherent risks and preserve the independence of the external audit role.
The Audit & Risk Committee has reported to the Boards that the Fund’s management of its material business risks is effective for the reporting period.
The Managing Director and Chief Financial Officer must annually state in writing to the Boards that the declaration provided in accordance with Section 295A of the Corporations Act in respect of the Fund’s annual audited statutory financial report is founded on a sound system of risk management and internal control and that the system is operating effectively in all material respects in relation to financial reporting risks.
Principle 8: Remuneration
The Board’s Remuneration Committee discharges the Board’s responsibilities regarding the public reporting of remuneration information, compensation of non-executive Directors, senior executives and other matters.