The following statement was reviewed and updated on 29 March 2019
The Board of Directors of Serabi monitors the business affairs of the company on behalf of shareholders. The Board currently consists of the Non – Executive Chairman, Managing Director, Finance Director and five further non-executive Directors. None of the non-executive Directors has held an executive position with the Company in the past. The Directors have responsibility for the overall corporate governance of the company and recognise the need for the highest standards of behaviour and accountability. The Directors are committed to the principles underlying best practice in corporate governance and have adopted the Corporate Governance Code (“the QCA Code”) prepared by the Quoted Companies Alliance (“QCA”). In addition, the Company as a result of the listing of its shares on the TSX is obliged to company with Canadian National Policy 58-201 – Corporate Governance Guidelines which establishes corporate governance guidelines that apply to all public companies. The Company has instituted its own corporate governance practices in light of these guidelines.
The board of directors is responsible for the stewardship of the Company through consultation with management of the Company. Any responsibility that is not delegated to management or to the committees of the board of directors remains with the board of directors, subject to the powers of the shareholders’ meetings. The frequency of board of directors’ meetings, as well as the nature of agenda items, varies depending on the state of the Company’s affairs and in light of opportunities or risks which the Company faces. Members of the board of directors are in frequent contact with one another and meetings of the board of directors are held as deemed necessary.
The Company is also subject to the UK City Code of Takeovers and Mergers.
Corporate Governance Report
The QCA Code sets out 10 principles of Corporate Governance that the Company should adopt. These are listed below together with a short explanation of how the Company applies each of the principles:
Business Model and Strategy
Serabi’s objective is to become a pre-eminent junior gold mining company in Brazil, securing future growth through expansion of its existing projects and, taking advantage of its position as a gold producer, to become involved with and successfully develop, other carefully selected opportunities within the country.
With this in mind the Company,
- is focussed on pursuing gold mining opportunities in Brazil appropriate to the Group’s size and capabilities,
- will identify and evaluate high quality opportunities through exploration or acquisition,
- expects to plan, finance and build new mines in a timely and cost-effective manner, and
- will seek continuous operational improvements to maximise value.
In this way it anticipates that this will lead to value creation for all stakeholders
|Shareholders||Host government and government agencies||Local communities||Employees|
|Generation of short term capital appreciation through investment of cash in accretive growth to grow longer term cash generation to sustain distributions to shareholders.||Generation of tax and royalty receipts to sustain a high-quality oversight and regulatory regime.||Provide improvements to infrastructure, education and healthcare to improve the living standards and opportunities for local populations.||Generate a stable and secure work environment in which employees learn, are mentored and can progress and develop their careers.|
Further information regarding the Business Model and Strategy can be found in the Company’s 2017 Annual Report a copy of which is available on the Company’s website at www.serabigold.com.
Understanding Shareholder Needs and Expectations
The Board is committed to maintaining good communication and having constructive dialogue with its shareholders. The Company has close ongoing relationships with its private shareholders. Institutional shareholders and analysts have the opportunity to discuss issues and provide feedback at meetings with the Company and management undertake roadshows to help facilitate meeting opportunities. All shareholders are encouraged to attend and participate in all shareholder meetings called by the Company and especially its Annual General Meeting. Investors also have access to current information on the Company though its website, www.serabigold.com, and via Mike Hodgson, CEO and Clive Line, CFO who are available to answer investor relations enquiries.
Considering wider stakeholder and social responsibilities
The Board recognises that the long term success of the Company is reliant upon the efforts of the employees of the Company and its contractors, suppliers, regulators and other stakeholders. The Board and management have put in place a range of processes and systems to ensure that there is close oversight and contact with its key resources and relationships.
The Company has staff dedicated to ensuring that it has active relationships with local communities who are within the vicinity of its operations to understand their concerns and expectations thereby seeking to ensure a mutually beneficial co-operation for both sides. The Company is subject to oversight by a number of different governmental and other bodies who directly or indirectly are involved with the licencing and approval process of mining operations in Brazil. Additionally, given the nature of the Company’s business, there are other parties who, whilst not having regulatory power, nonetheless have interest in seeing that the Company conducts its operations in a safe, responsible, ethical and conscientious manner. The Company makes all reasonable efforts, directly or through its advisers, to engage in and maintain active dialogue with each of these governmental and non-governmental bodies, to ensure that any issues faced by the Company, including but not limited to regulations or proposed changes to regulations, are well understood and ensuring to the fullest extent possible that the Company is in compliance with all appropriate regulation, standards and specific licencing obligations, including environmental, social and safety, at all times.
In addition to its other roles and responsibilities, the Company’s senior management, its Audit Committee and the Board are responsible for ensuring that procedures are in place and are being implemented effectively to identify, evaluate and manage the significant risks faced by the Company.
The Company is subject to a number of risks and includes in its quarterly Management Discussion and Analysis (a copy of which is available on the Company’s website at www.serabigold.com) a detailed analysis the various areas of risk for the Company its activities and ultimately its stakeholders. The 2017 Annual Report provides a condensed version of these risks and summarises the principal risks and the manner in which the Company and its management seeks to mitigate these. This risk matrix is reproduced below. This matrix is updated as changes arise in the nature of risks or the controls that are implemented to mitigate them. The Audit and Compliance Committee reviews the risk matrix and the effectiveness of scenario testing on a regular basis.
|Changes in gold prices.||The profitability of the Group’s operations is dependent upon the market price of gold.
Gold prices fluctuate widely and are affected by numerous factors beyond the control of the Group.
Reserve calculations and life-of-mine plans using significantly lower metal prices could result in material write-downs of the Group’s investment in mining properties and increased amortisation, reclamation and closure charges.
Management closely monitors commodity prices and economic and other events that may influence commodity prices.
The Board will use hedging instruments if and when it considers it appropriate.
|Currency fluctuations may affect the costs of doing business and the results of operations.||The Group’s major products are traded in prices denominated in US Dollars. The Group incurs most of its expenditures in Brazilian Reals although it has a reasonable level of expenses in US Dollars, UK Pounds and other currencies.||Management closely monitors fluctuations in currency rates and the Board may, from time to time, make use of currency hedging instruments.|
|Availability of working capital.||The Company is reliant on generating regular revenue and cash flow from its operations on a monthly basis to meet its monthly operating costs, meet debt repayment requirements and to fund capital investment and exploration programmes. It has no overdraft or stand–by credit facilities in place in the event of any operational difficulties or other events that may reduce or delay revenue receipts in the short-term.||
Management, in designing and planning the Group’s operations, incorporates contingency planning. The Group has multiple mining faces to minimise geological and mining risk to operations, it has a modular plant to ensure gold processing can be maintained to the greatest extent possible at all times and deals with customers for its products who have good credit and standing in the industry.
Management, in designing and planning the Group’s operations, incorporates contingency planning. The Group has multiple mining faces to minimise geological and mining risk to operations, it has a modular plant to ensure gold processing can be maintained to the greatest extent possible at all times and deals with customers for its products who have good credit and standing in the industry. Management also manage the Group’s commitments and obligations to maximise the level of cash holdings at any time and works closely with existing and potential lenders and other potential financing partners to ensure that, to the greatest extent possible, it can have access to additional cash resources or defer debt repayment obligations should any unexpected need arise.
No guarantee that the Group’s applications for exploration licences and mining licences will be granted.
Existing exploration licences may not be renewed or approved or converted into mining licences.
Title to any of the Group’s mineral properties may be challenged or disputed
There is no guarantee that any application for mining licences, the renewal of existing exploration licences or the granting of new exploration licences will be approved by the Departamento Nacional do Produçăo Mineral (“DNPM”). The DNPM can refuse any application. Persons may object to the granting of any exploration licence and the DNPM may take those objections into consideration when making any decision on whether or not to grant a licence.
The exploration licence for the Sao Chico property expired in March 2014. The Group applied for a full mining licence and the application and all supporting information and reports have been made in accordance with prescribed regulations. The Group has received no indications that the full mining licence will not be granted.
At the current time mining operations at the Sao Chico Mine are carried out under a trial mining licence which is renewable annually.
The Group is in the process of applying for a mining licence in respect of the Coringa gold project. There can be no certainty that a mining licence will be issued or as to the time frame in which it will be issued.
Management maintains on-going dialogue with the DNPM and other relevant government bodies regarding its operations to ensure that such bodies are well informed and also to help ensure that the Group is informed at an early stage of any issues of concern that such bodies may have.
The Group employs staff and consultants who are experienced in Brazilian mining legislation to ensure that the Group is in compliance with legislation at all times.
|Other permits and licences required to conduct operations may not be renewed or may be revoked or suspended||
The Group requires a number of permits and licences to be able to undertake its operations and these are issued by a variety of agencies and departments.
The Group is required to provide regular reports and may be subject to inspections to ensure that it is in compliance with its obligations in respect of any licence or permit. Failure to comply with the obligations can result in fines, obligations to undertake remedial action and in cases where a breach is deemed significant can result in suspension until remedied.
Permits and licences are issued for fixed periods and therefore subject to regular renewal. The renewal process may impose additional obligations on the Group that had not been imposed under previous licences and permits.
Management maintains on-going dialogue with the all government bodies involved with the granting and control of mining operations s to ensure that such bodies are well informed of the Group’s activities and plans and also to help ensure that the Group is informed at an early stage of any issues of concern that such bodies may have.
The Group employs personnel and consultants experienced in the various aspects of the licencing and permitting process to ensure that it maintains compliance with its obligations.
|The Coringa gold project is an advanced stage development project requiring permitting and construction before production can commence||
The Group acquired the Coringa gold project in December 2017.
The Group is at the early stages of obtaining all the necessary permits and licences (including a mining licence and operational licence) required to allow mine development and plant construction to commence and there can be no certainty that it will be granted all the necessary licences and permits or as to the time frame in which these will be issued.
The Group has been operating the region for a number of years and in general is dealing with the same government agencies and bodies that have oversight of the operations in the Palito Mining Complex.
The Group considers that it has developed good relations and understanding with the government bodies and agencies who will grant these licences and these same bodies have been supportive of Serabi’s acquisition of the project.
The Board consider that an internal audit function is not necessary or practical due to the size of the Company and the close day to day control exercised by the executive directors. However, the Board will continue to monitor the need for an internal audit function. The executive directors have established appropriate reporting and control mechanisms to ensure the effectiveness of the Company’s control systems.
A Well Functioning Board of Directors
The Board is currently comprised of the Chief Executive, Mike Hodgson, the Financial Director, Mr Clive Line and seven Non-Executive Directors. Of the Non-Executive Directors, Mr Mel Williams, the Chairman, Mr Sean Harvey, Mr Felipe Swett and Mr Aquiles Alegria are considered to be independent, whilst Mr Nicolas Banados, Mr Eduardo Rosselot and Mr Sawyer, under the QCA Code, by virtue of being appointed representatives of significant shareholders, are not considered to be independent. Biographical details of the current Directors are set out on the Company’s website and in the 2017 Annual Report. Executive and Non-Executive Directors are subject to re-election usually at the Company’s Annual General Meeting, at intervals of no more than three years. Summary terms and conditions of each of the Directors are disclosed annually in the Company’s Annual reports and also in the Management Information Circular which accompanies the Notice of Annual General Meeting. Copies of both these documents are available on the Company’s website at www.serabigold.com.
The Board meets on a regular basis and during 2017 met a total of 18 times. It has established an Audit and Compliance Committee, a Remuneration Committee and a Project Steering Committee, particulars of which are set out in this report and in the 2017 Annual Report. The Board has not at this time felt it necessary to establish a separate Nominations Committee and considers that this responsibility can be currently discharged by the Remuneration Committee or, if the circumstances so dictate, the Board as a whole The Board is responsible for the stewardship of the Company through consultation with management of the Company. Any responsibility that is not delegated to management or to the committees of the Board remains with the Board, subject to the rights of the Shareholders. The frequency of Board meetings, as well as the nature of agenda items, varies depending on the state of the Company’s affairs and in light of opportunities or risks which the Company faces. Members of the Board are in frequent contact with one another and meetings of the Board are held as deemed necessary.
The Chief Executive and the Finance Director are full time employees of the Company whilst each of the Non-Executive Directors are considered to be part time but are expected to provide as much time to the Company as is required.
The Board is satisfied that, as a whole, it is able to exercise independent judgement. The Articles of Association of the Company have already been specifically amended to restrict the role of the directors in any situation where there is considered to be a conflict of interest and requiring such conflicted director(s) to abstain from voting and participation in any meeting or voting where the matter giving rise to the conflict is to be considered. The Company has also entered into Relationship Agreements with each of Fratelli Investments Limited (“Fratelli”) and Greenstone Resources II LP (“Greenstone”), its two principal shareholders, details of which are set out in the Annual Information Form filed by the Company on SEDAR on 25 March 2018 and available on the Company’s website. The Relationship Agreements inter alia require that (i) the Company is capable of carrying on its business independently of each of Fratelli and Greenstone; (ii) transactions between any member of the Group and any member of either Fratelli or Greenstone are made at arm’s length on a normal commercial basis and approved by Directors independent of Fratelli or Greenstone as appropriate; (iii) any disputes between Fratelli and /or Greenstone and any member of the Group shall be dealt with by a committee of the independent Directors; (iv) the selection, approval and removal of senior management and executive Directors shall be subject to the approval of a majority of the non-executive Directors of the Company; and (v) neither Fratelli nor Greenstone shall take any action as a result of which there would be fewer than two Directors independent of Fratelli and Greenstone.
The Board of the Company may meet without management when any Board meetings are held and at any other time if so requested by the Chairman. The Audit Committee and the Remuneration Committee are both comprised solely of Non-Executive Directors and the Remuneration Committee will as a matter of its normal business meet without management during the course of the year. Other Non-Executive Directors are generally invited to attend meetings of the Remuneration and Audit Committees to permit joint consideration of matters without the presence of management and whilst subject matter will generally be confined to the areas of audit, controls and remuneration the Chairman invites participation on other topics at these meetings. Accordingly, forums do occur every three to four months that comprise meetings of the Non-Executive Directors.
Attendance at Board and Committee Meetings
During 2017, the Board held 18 Board meetings. Attendance by each of the Directors at these meetings and meetings of its committees are as set out in the table below.
(Attended / Held)
|Audit Committee Meetings
|Remuneration Committee Meetings
(1) The Company only established the Project Steering Committee in March 2018
Appropriate Skills and Experience of the Directors
The Company believes that the current balance of skills in the Board as a whole, reflects a very broad range of commercial and professional skills across geographies and industries and each of the Directors has previous experience in public markets.
The Company has an established and stable Board which it considers to be well suited to its fundamental objective of enhancing and preserving long–term shareholder value and ensuring that the Company conducts its business in an ethical and safe manner. The Board is considered to be of sufficient number to provide more than adequate experience and perspective to its decision-making process and given the size and nature of the Company, the Board does not consider at this time that it is appropriate to increase the size of the Board or amend its composition. The Board is however conscious of the different perspectives that individuals from different cultural backgrounds and with different work and life experiences can bring. For this reason, when considering any change to its composition it will actively seek to further increase its current diversity to become more inclusive taking into account considerations such as gender, age and ethnicity to ensure that the Board benefits from a broad range of perspectives and experiences appropriate to its activities and needs.
As the Board is not currently anticipating any change to its size or composition, it has not yet implemented a written policy regarding the identification and nomination of women directors. In the event that one of the existing members of the Board stands down from their current position, the Company will, at that time, give further consideration to the specific selection of a female member of the Board and the adoption of a formal policy relating to the positive appointment of additional female members of the Board for future opportunities.
The Board does consider that its current composition already encompasses significant diversity. Of its nine members, its membership covers three nationalities, and includes three directors with strong technical mining and geological expertise, two directors with financial backgrounds and four directors bringing investment banking and corporate finance experience. All of the board members have spent significant, and in some cases, all of their careers working within the natural resources industries. With the exception of Mr. Sawyer, who was appointed in March 2018 concurrent with the announcement of the subscription by Greenstone Resources for new ordinary shares, all of the current non-executive directors have served for periods of between four to eight years which the Board considers is an indicator of an appropriate level of turnover and renewal while maintaining continuity and knowledge.
The Board has not adopted a target regarding the number of women on the Board of Directors. The Board of Directors does expect more diversity on the Board of Directors over time and each future appointment will be made on the basis of ensuring that its Board is able to provide the widest possible experience and perspective that is consistent with achieving the highest level of professionalism and continues to enhance and preserve long–term shareholder value and ensure that the Company conducts its business in an ethical and safe manner. Today, none (zero percent) of the Company’s directors are women.
The Board is responsible for: (a) ensuring that all new directors receive a comprehensive orientation, that they fully understand the role of the Board and its committees, as well as the contribution individual directors are expected to make (including the commitment of time and resources that the Company expects from its directors) and that they understand the nature and operation of the Company’s business; and (b) providing continuing education opportunities for all directors, so that individuals may maintain or enhance their skills and abilities as directors, as well as to ensure that their knowledge and understanding of the Company’s business remains current.
Given the size of the Company and the in-depth experience of its directors, the Company has not deemed it necessary to develop a formal process of orientation for new directors but encourages all its Directors to visit the Company’s operations to ensure familiarity and proper understanding. The directors conduct a discussion of the business of the Company at its meetings to ensure that new directors are provided with an overview of the Company’s operations. From time to time, corporate officers and legal, financial and other experts are invited to attend Board meetings to describe matters in their areas of expertise. The Board ensures that any new Board member receives a written memorandum (the “Memorandum”) prepared by the Company’s lawyers setting out their responsibilities as a director and ensures that each director is conversant with the regulations of any stock exchange on which the Company’s shares are traded.
Directors are entitled to attend seminars that they determine necessary to keep themselves up-to-date with current issues relevant to their services as directors of the Company.
Evaluation of Board Performance
The Board has determined that it shall itself be responsible for assessing the effectiveness and contributions of the Board as a whole, its committees (which currently comprise the Audit Committee, the Remuneration Committee and the Project Steering Committee) and individual directors. The size of the Board allows for open discussion. The Chairman has regular dialogue with the Chief Executive whereby the Board’s role and effectiveness can be considered. The Finance Director also has regular dialogue with the Head of the Audit Committee whereby that Committee’s effectiveness can be considered.
No formal assessments have been prepared however the Board will keep this matter under review and especially if either the size of the Board or the number of committees increases which in turn may require a more formalised assessment and evaluation process to be established to ensure continued effectiveness.
The Board recognises that their decisions regarding strategy and risk will impact the corporate culture of the Company as a whole and that this will impact the performance of the Company. The Board is very aware that the tone and culture set by the Board will greatly impact all aspects of the Company as a whole and the way that employees behave. The corporate governance arrangements that the Board has adopted are designed to ensure that the Company delivers long term value to its shareholders and that shareholders have the opportunity to express their views and expectations for the Company in a manner that encourages open dialogue with the Board.
A large part of the Company’s activities is centred upon what needs to be an open and respectful dialogue with employees, clients and other stakeholders. Therefore, the importance of sound ethical values and behaviours is crucial to the ability of the Company to successfully achieve its corporate objectives. The Board places great import on this aspect of corporate life and seeks to ensure that this flows through all that the Company does. The directors consider that at present the Company has an open culture facilitating comprehensive dialogue and feedback and enabling positive and constructive challenge.
The Company has adopted, with effect from the date on which its shares were admitted to AIM, a code for Directors’ and employees’ dealings in securities which is appropriate for a company whose securities are traded on AIM and is in accordance with the requirements of the Market Abuse Regulation which came into effect in 2016.
Maintenance of Governance Structures and Processes
Ultimate authority for all aspects of the Company’s activities rests with the Board, with the responsibilities of the Executive Directors arising as a consequence of delegation by the Board.
The Board has adopted appropriate delegations of authority which set out matters which are reserved to the Board. The Chairman is responsible for the effectiveness of the Board, while management of the Company’s business and primary contact with shareholders has been delegated by the Board to the Chief Executive Officer and the Finance Director.
The Audit Committee is comprised of Messrs. Swett (Chair), Harvey and Williams. Each member of the audit committee is considered to be independent within the meaning of NI 52-110. All members of the audit committee are financially literate in that they have the ability to read and understand a set of financial statements that are of the same breadth and level of complexity of accounting issues as can be reasonably expected to be raised by the Company’s financial statements.
Mr Williams is a Chartered Certified Accountant and holds an MBA from Cranfield School of Management. Mr Williams has over 30 years of financial experience much of which has been spent in the mining industry. Until June 2011 he served as the Chief Financial Officer and Senior Vice President of Finance and Corporate Development of Brigus Gold and he has also served as Chief Financial Officer of TVX Gold Inc.
Mr Harvey has qualifications in economics and law and had a 10-year career in investment and merchant banking primarily focused in the mining area taking up executive positions within the mining industry. He has served as the Chief Executive Officer for TVX Gold Inc and Orvana Minerals, was the Chairman of Andina Minerals Inc. and served on its audit committee and currently serves on the audit committee of Perseus Mining Limited.
Mr. Swett has worked for over 10 years in investment management initially working as analyst appraising the performance of a wide range of companies and businesses and now heads the Asset Management team at Asset Chile, a Chilean-based investment bank. He also holds an MBA from the Kellogg School of Management, Northwestern University.
This committee has primary responsibility for monitoring the quality of internal controls and ensuring that the financial performance of the Company is properly measured and reported. It receives reports from the executive management and auditors relating to the quarterly and annual accounts and the accounting and internal control systems in use throughout the Company. The Audit and Compliance Committee shall meet not less than four times in each financial year and it has unrestricted access to the Company’s auditors.
The Remuneration Committee comprises Messrs. Williams (Chair), Bañados and Harvey. Mr Williams and Mr Harvey are both independent directors and Mr Bañados whilst not independent by virtue of his executive position with an affiliated entity of the Company has no executive position within the Company and is thus considered independent and objective for the purposes of the Remuneration Committee. The Remuneration Committee is responsible for determining the compensation of the management and executive, including that of the Chief Executive Officer and the Chief Financial Officer. The Remuneration Committee determines the level of compensation the Chief Executive Officer and the Chief Financial Officer are to receive on an annual basis and relies on the Company’s economic performance and the responsibilities and risks involved in being an effective Chief Executive Officer and Chief Financial Officer of a gold production and development company. The Remuneration Committee considers current compensation of both the Chief Executive Officer and the Chief Financial Officer to adequately cover such responsibilities and risks.
The Company does not currently have a nomination committee. The Board as a whole is responsible for identifying and recommending candidates for the Board of the Company. The Board reviews and makes determination with respect to:
- the size and composition of the Board;
- the organization and responsibilities of the appropriate committees of the Board;
- the evaluation process for the Board and committees of the Board and the Chairpersons of the Board and such committees; and
- creating a desirable balance of expertise and qualifications among Board members.
In the nomination process, the Board assesses is current composition and requirements going forward in light of the stage of the Company and the skills required to ensure proper oversight of the Company and its operations.
The Board has not at this time considered that the size and complexity of the Company warrants a requirement for a separate Nomination Committee. It is currently envisaged that should any appointment be undertaken that the Remuneration Committee would fulfil the role of the Nomination Committee.
The Board has not adopted term limits for directors or other mechanisms of board renewal. The Board evaluates its performance and composition on a regular basis and will make adjustments as and when indicated. When assessing the independence of each Non-Executive Director, length of service is one of the considerations. The Board will when assessing new appointments in the future consider the need to balance the experience and knowledge that each independent director has of the Company and its operations, with the need to ensure that independent directors can also bring new perspectives to the business.
In accordance with the Companies Act 2006, the Board complies with: a duty to act within their powers; a duty to promote the success of the Company; a duty to exercise independent judgement; a duty to exercise reasonable care, skill and diligence; a duty to avoid conflicts of interest; a duty not to accept benefits from third parties and a duty to declare any interest in a proposed transaction or arrangement.
The Board is accountable to the Company’s shareholders and as such it is important for the Board to appreciate the aspirations of the shareholders and equally that the shareholders understand how the actions of the Board and short term financial performance relate to the achievement of the Group’s longer term goals.
The Board reports to the shareholders on its stewardship of the Company through the publication of quarterly operational updates and the quarterly and final financial results. News releases are issued throughout the year and the Company maintains a website (www.serabigold.com) on which press releases, corporate presentations and the Report and Financial Statements are available to view. Additionally, this Report and Financial Statements contains extensive information about the Group’s activities. Enquiries from individual shareholders on matters relating to the business of the Company are welcomed. Shareholders and other interested parties can subscribe to receive notification of news updates and other documents from the Company via email. In addition, the Executive Directors meet with major shareholders to discuss the progress of the Company and provide periodic feedback to the Board following meetings with shareholders.
The Annual General Meeting, and other meetings of shareholders that may be called by the Company from time to time, provide an opportunity for communication with all shareholders and the Board encourages the shareholders to attend and welcomes their participation. The Board is committed to maintaining good communication and having constructive dialogue with its shareholders. The Company has close ongoing relationships with its private shareholders. Institutional shareholders and analysts have the opportunity to discuss issues and provide feedback at meetings with the Company. In addition to its Annual report the Company provides detailed quarterly reports outlining operational and financial performance in each quarter.
The Company shall include, when relevant, in its Annual Report, any matters of note arising from the audit or remuneration committees.
The Company has established an Audit Committee and a Remuneration Committee.
Composition of the Audit Committee
The audit committee comprises Messrs. Swett (Chair), Williams and Harvey. It is responsible for ensuring that the financial performance of the Group is properly reported on and monitored and for reviewing the auditor’s reports relating to accounts and internal control systems. Each member of the audit committee is considered to be independent within the meaning of Canadian NI 52-110. All members of the audit committee are financially literate in that they have the ability to read and understand a set of financial statements that are of the same breadth and level of complexity of accounting issues as can be reasonably expected to be raised by the Company’s financial statements. The board of directors has unanimously approved the adoption of an Audit Committee Charter which governs the composition, responsibilities, conduct and authority of the Audit Committee.
Composition of the Remuneration Committee
The Remuneration Committee comprises Messrs. Williams (Chair), Harvey and Banados. It is responsible for determining and agreeing with the Board the framework for the remuneration of the Managing Director, all other Executive Directors, the Company Secretary and such other members of the Executive management as it is designated to consider. It is furthermore responsible for determining the total individual remuneration packages of each director including, where appropriate, bonuses, incentive payments and share options.
In addition, an Executive Management Committee, comprised of the Chief Executive Officer and Finance Director, directs the day-to-day operations of the company.
The Company has adopted a share dealing code for Directors and relevant employees in accordance with the AIM Rules, MAR and Canadian securities legislation regulations and will take proper steps to ensure compliance by the Directors and those employees.