Adelaide Brighton Ltd is considered as the Australian producer of the cement, blended goods and lime products. Adelaide Brighton Ltd carries the operational functions of manufacturing and facilities of distribution in parts of Southern Australia, Northern Territory and New South Wales. The Adelaide Brighton Ltd is related with numerous brands of company that comprises of Geelong Cement, Sun state Cement and suppliers of building products. Adelaide Brighton Ltd is listed on the Australian Stock Exchange under the ASX 300. The primary objective of this report is to understand the principles of corporate governance of Adelaide Brighton Ltd and additionally give a detailed explanation of the corporate risk faced by business together with the risk assessment strategy.
The major part of the Adelaide Brighton Ltd board of directors continues to remain independent that is in compliance with the principles as well as the recommendations of the ASX corporate governance council (Tricker and Tricker 2015). Adelaide Brighton Ltd has remained committed relating to the highest standards of the corporate governance and the approach undertaken to align with the taxation with the strategies of corporate governance and code of conduct.
In compliance with the level of principles for foundations with the management as the board of directors of Adelaide Brighton Ltd optimises the performances of the company and its subsidiaries (Du Plessis, Hargovan and Harris 2018). The board lay downs the foundations for creating the policies and regulating the business affairs of the company on behalf of its shareholders.
Adhering with the principles of board structure the board of directors of Adelaide Brighton Ltd adds value by making sure that majority of independent directors views are bought into the decision making (Hale and Held 2018). The board of directors constantly assess the performance in order to facilitate the constant improvement.
The company adheres with the principles of making continuous disclosure by giving necessary information and disclosing in timely manner to the shareholders regarding the wider market conditions (Davies 2016). Adelaide Brighton Ltd complies with the principles of making continuous disclosure regimes that are in adherence with the Corporate Act 2001.
Adelaide Brighton Ltd corporate governance code of conduct is committed to the encouraging ethical and accountable decisions making. Adelaide Brighton Ltd directors and employees acts with the highest integrity and honesty (ArAs 2016). The company further strengthens its ethical atmosphere as it promotes acting with integrity, honesty and fairness. Adelaide Brighton Ltd abides with the law and regulations.
The board of directors of Adelaide Brighton Ltd constantly reviews the size and composition of the board to make sure that the correct skills and perspective are presented. The company provides the matrix of skills in order to demonstrate the diversity of the non-executive directors and their experience (Knechel and Salterio 2016). The composition the board that is presented is in compliance with the circumstances of the organization.
The company in compliance with the principles of remunerating fairly, it incorporates the robust performance measures with its tactical plans that provides the outcomes of remunerations to reflect with the business performance over the year (Bottomley 2016). The company delivers strong remuneration of $1.56.
The nature of the business for Adelaide Brighton Ltd comprises of the integrated construction of materials and produces lime. The Adelaide Brighton Ltd nature of business consist of supplying wide range of building products, constructions, infrastructure and material processing into the Australian markets (Hopt 2016). Adelaide Brighton Ltd is regarded the second largest producer of cement with major of the business production facilities are located to the positions of reserve rich states of South Australia. Adelaide Brighton Ltd has several number of investment in the joint venture and association in the constructions of materials products. The company has several cement distribution joint venture in the regions of Queensland as well.
The Adelaide Brighton Ltd east coast market of constructions is supported by the strong rise in the activity of the residential with strong rise in the non-residential buildings and activities of infrastructure. The market of Adelaide Brighton Ltd southern Australia is boosted by the strong demand in the infrastructure (Scholte 2017). The markets of Southern East Australia have constantly reflected a strong growth. The market demand for the Western Australia have stabilized during the latter half of the year and further fell down in the Northern Territories.
The business actions of the Adelaide Brighton Ltd is generally governed and regulated by the principles of Corporation Act 2001. The company complies with the accounting standard of Australia that consist of the interpretation of the accounting and companies ASX CGC policies.
The business strategy of Adelaide Brighton Ltd is based on increasing the concrete and aggregate business with the help of aggregate business with the help of three striking concretes and aggregate acquisitions in Victoria, territories of Northern Australia and South Australia (Crowther and Aras 2016). The company constantly makes investment in the organic growth initiatives and employs its hard effort in working out the operational improvement with the help of important long term business aspects.
Figure 1: Figure representing Net Profit Margin
(Source: As Created by Author)
Figure 2: Figure representing Return on Equity
(Source: As Created by Author)
Figure 3: Figure representing Return on Assets
(Source: As Created by Author)
Figure 4: Figure representing Total Asset Turnover Ratio
(Source: As Created by Author)
Figure 5: Figure representing Inventory Turnover Ratio
(Source: As Created by Author)
Figure 6: Figure representing Current Ratio
(Source: As Created by Author)
Figure 7: Figure representing Quick Ratio
(Source: As Created by Author)
Figure 8: Figure representing Debt to Total Asset Ratio
(Source: As Created by Author)
Figure 9: Figure representing Debt to Equity Ratio
(Source: As Created by Author)
Adelaide Brighton is faced with several Business Risks:
Macroeconomic Conditions: Adelaide Brighton is the supplier of product for Australian Customers from the local production sites across all the territories. Therefore, the economic conditions are leader for supply and demand conditions.
Regulatory Compliance: There are considerable areas that Adelaide Brighton controls except the distribution sites such as – environmental, labour, occupational health and safety, and taxation laws (O’Mahony and Mason 2017). Non- compliance with regulatory necessities can generate penalties and obligation on operations.
Movement to a low carbon economy (climate change): The carbon economy is heavily impacted by the recognition of greenhouse gas emission from the potential resources those are increasing the pollution level all over the world. There are several actions those has been taken by the governments for protecting the climate conditions such as increase of price for carbon along with changes in product specifications (Bottomley 2016). The intermediary product in production of Cement and lime is Clinker, this is one of the major carbon emissive product in the industry. The concept of low carbon economy can potentially reduce the demand and increase the cost of productions.
Energy Pricing: The production of lime and cement are most energy intensive. Apart from this these two productions are cost effective and access reliable. These also increases the reliability and pricing factors.
Foreign Currency: The amount of product that were imported in 2017 is 2.4 million tonnes those are imported due to the import of materials for providing supplement capacity (Leung et al. 2014). All of these provided the result for the fluctuation in the market conditions regarding the exposure of the group that provided the strength to the markets of US and Japan.
Trade Credit: Now the contractual arrangements with the consumers involves the precision of short term trade credit for product supplied to them. This group is therefore exposed to the risk for credits. Changes in macro-economic conditions and consumer specific problems impact on the purchase factors in the market and increase the risk factors for outstanding credits.
Adelaide Brighton has expanded its business within Australia and outside the country. This diversity saved the fluctuations across the customer base of infrastructure, mining and construction.
Adelaide Brighton’s strategy for cost reduction and operation improvement involves the focus on the improvising efficiency involved within the manufacturing process for specifically line and clinker. This program has given savings for long period of time along with other financial and organizational improvements for reducing the emissions intensity for production (Cohen and Simnett 2014). This group is now able to leverage its access for products without emissions and this saved the climate to get polluted by those emissions. Adelaide Brighton has also started working with partners in developing the alternate products for replacing the Portland cement.
This group employs a portfolio approach for energy procurement and they are looking forward to diversifying the decreasing the risk for competitive prices. This approach has provided benefit to the contractual arrangements for energy trading markets (Leung et al. 2014). The managers of this group declared exposures to foreign risk through a formalised hedging policy. This policy saved the committed purchases that can save the foreign energy from the risk exposures.
The group also undertakes a risk assessment for processing the key equipment in risk mitigation process. Risk of the equipment failure is identified as the main part in repairing the alternatives for business continuity planning. There are another strategies that are also used here, these are “insurance spares” of key equipment and contractual arrangements for increasing the supplement production but decreasing the pollution (O’Mahony and Mason 2017). All of these strategies saved the group from much other risk exposure that might put impact on their financial and organizational development purpose. So this risk mitigation policies and process saved them from all of these.
Conclusion:
On a conclusive note, the evidences gained from the report suggest that the Adelaide Brighton has implemented the principles of ASX code of conduct and corporate governance. The report illustrates that Adelaide Brighton Ltd corporate governance code of conduct is committed to the encouraging ethical and accountable decisions making. The company lay down the foundations with the management as the board of directors of Adelaide Brighton Ltd optimises the performances of the company. The company though faces external risk of competition but this risks forms the part of the inherent risks and the company also has appropriate risk management facilities to mitigate such external risks.
References
ArAs, G., 2016. A handbook of corporate governance and social responsibility. CRC Press.
Bottomley, S., 2016. The constitutional corporation: Rethinking corporate governance. Routledge.
Bottomley, S., 2016. The constitutional corporation: Rethinking corporate governance. Routledge.
Cohen, J.R. and Simnett, R., 2014. CSR and assurance services: A research agenda. Auditing: A Journal of Practice & Theory, 34(1), pp.59-74.
Crowther, D. and Aras, G., 2016. Corporate governance and corporate social responsibility in context. In Global perspectives on corporate governance and CSR (pp. 23-64). Routledge.
Davies, A., 2016. Best practice in corporate governance: Building reputation and sustainable success. Routledge.
Du Plessis, J.J., Hargovan, A. and Harris, J., 2018. Principles of contemporary corporate governance. Cambridge University Press.
Hale, T. and Held, D. eds., 2018. The handbook of transnational governance: Institutions and innovations. John Wiley & Sons.
Hopt, K.J., 2016. Globalisation of corporate governance: the difficult process of bringing about European union internal and external corporate governance principles. In Globalisation and Business Ethics (pp. 93-112). Routledge.
Knechel, W.R. and Salterio, S.E., 2016. Auditing: Assurance and risk. Taylor & Francis.
Leung, P., Coram, P., Cooper, B.J. and Richardson, P., 2014. Modern Auditing and Assurance Services 6e. Wiley.
O’Mahony, J. and Mason, M., 2017. Post-traditional corporate governance. In Globalization and Corporate Citizenship: The Alternative Gaze (pp. 74-90). Routledge.
Scholte, J.A., 2017. Globalisation, governance and corporate citizenship. In Business, Capitalism and Corporate Citizenship(pp. 53-63). Routledge.
Tricker, R.B. and Tricker, R.I., 2015. Corporate governance: Principles, policies, and practices. Oxford University Press, USA.
Essay Writing Service Features
Our Experience
No matter how complex your assignment is, we can find the right professional for your specific task. Contact Essay is an essay writing company that hires only the smartest minds to help you with your projects. Our expertise allows us to provide students with high-quality academic writing, editing & proofreading services.
Free Features
Free revision policy
$10Free bibliography & reference
$8Free title page
$8Free formatting
$8How Our Essay Writing Service Works
First, you will need to complete an order form. It's not difficult but, in case there is anything you find not to be clear, you may always call us so that we can guide you through it. On the order form, you will need to include some basic information concerning your order: subject, topic, number of pages, etc. We also encourage our clients to upload any relevant information or sources that will help.
Complete the order form
Once we have all the information and instructions that we need, we select the most suitable writer for your assignment. While everything seems to be clear, the writer, who has complete knowledge of the subject, may need clarification from you. It is at that point that you would receive a call or email from us.
Writer’s assignment
As soon as the writer has finished, it will be delivered both to the website and to your email address so that you will not miss it. If your deadline is close at hand, we will place a call to you to make sure that you receive the paper on time.
Completing the order and download