As of 28 September 2018, as part of a change to the AIM Rules for Companies, AIM companies are required to maintain on its website details of a recognised corporate governance code, how the Company complies with this code and an explanation of any deviations. The information will need to be reviewed every year and the last review took place on 30 June 2023.
The directors of the Company are pleased to present the Corporate Governance Statement for Amur Minerals. Going forward this will be reviewed at the same time as the Annual Report and Accounts are prepared. The Directors of Amur Minerals Corporation (“Amur” or the “Company”) recognise the importance of sound corporate governance and have sought to address these new requirements in a timely manner and have set out below the Company’s Corporate Governance Statement.
In ensuring good governance Amur has adopted The Quoted Companies Alliance Corporate Governance Code 2018 (the “QCA Code” or the “Code”) and applies the ten principles of the QCA Code as set out in this statement.
Principle 1: Establish a strategy and business model which promote long-term value for shareholders
Since 2022, the Board’s strategy concluded that the highest medium and long-term value to be delivered to shareholders was the sale of the Group’s subsidiary AO Kun-Manie which held the Kun-Manie sulphide nickel deposit located in the far east of Russia. Previously, the Group had been assessing the M&A Market to identify suitable strategic partners who could assist in bringing the project to production and was also open to suitable offers to purchase the asset. On 24 February 2022, Russia initiated a Special Military Operation (“SMO”). The action resulted in the immediate implementation of sanctions and counter measure responses by the Russian Government and the sale of AO Kun-Manie was deemed to be the best opportunity to deliver maximum value to shareholders given the uncertainty over the Group’s ability to operate in the Russian Federation as before. On 6 March 2023, the Company successfully completed the sale of AO Kun-Manie and on 14 March 2023 received sales proceeds of US$35m in full from the buyer. The Company also announced the payment of a special dividend to shareholders of 1.8p (GBP) from the sales proceeds and this was subsequently paid out on 14 June 2023.
Following the disposal of AO Kun-Manie in March 2023, the Company became and currently remains an AIM Rule 15 cash shell. The Company is required to complete an acquisition or acquisitions which constitute(s) a Reverse Takeover (RTO) under AIM Rule 14 on or before the date falling six months (7 September 2023) from the completion of the disposal. If not fully completed at that date and pursuant to AIM Rule 40, the Company’s share trading will go into suspension for a maximum of an additional six months (before being cancelled on 8 March 2024) while the Company works toward the completion of the RTO. Trading will resume upon completion of the RTO which shareholder approval will be necessary. Should the RTO not completed, admission of the Company’s shares to trading on AIM will be cancelled. The Board continues to conduct evaluations and assessments of private and public resource companies and projects to seek long term value for shareholders.
Completion of an RTO is a time consuming event requiring negotiations, the successful completion of all party due diligence and the subsequent shareholder approval. The Company has been conducting various evaluations and assessments of numerous international private and public companies. This has included:
- Numerous mineral resource RTO opportunities. Geographically these have been located in Canada, the US, Scandinavia, Spain, Brazil, Peru, Chile, Ghana, Kenya and Australia. Commodities have included potash, silica, alumina, copper, nickel, gold, silver, metallurgical coking coal, energy fuels substitutes and lithium. A total of 16 opportunities have been considered.
- During the course of our investigation, we have also been contacted by non-mineral resource companies. Discussions with these more financially advanced entities indicate there is potential for us to move into the Artificial Intelligence / Media or Financial Services sectors. These warrant further investigation and we have therefore expanded our RTO investigation of opportunities beyond mineral resource sector.
Principle 2: Seek to understand and meet shareholder needs and expectations
The Group remains committed to listening and communicating openly with its shareholders to ensure that its strategy, business model and performance are clearly understood and communicated. Understanding what analysts and investors think about us, and in turn, helping these audiences understand our business, is a key part of driving our business forward and we actively seek dialogue with the market. We do so via investor roadshows, attending investor conferences, maintaining updates on the Company’s FAQ page and our regular reporting.
Amur is committed to providing full and transparent disclosure of its activities via the Regulatory News Service (RNS) of the London Stock Exchange. Company announcements are also available on the Company’s website. Amur has an active and effective investor relations programme that includes road-shows and presentations, effective Annual General Meetings with presentations to shareholders and a high level of disclosure of the Company’s activity to its shareholders.
In addition, all shareholders are encouraged to attend the Company’s Annual General Meeting (AGM) and any other meetings where Q&A sessions are a part of the meetings. Investors have access to current information on the Company through its website (www.amurminerals.com) and via the info@amurminerals.com email address. The Company also retains the services of BlytheRay as PR advisor.
Principle 3: Take into account wider stakeholder and social responsibilities and their implications for long-term success
The Board recognises that the long term success of the Group is reliant upon the efforts of the employees of the Group and its contractors, suppliers, regulators and other stakeholders. The Board has 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 Group has close ongoing relationships with a broad range of its stakeholders and provides them with the opportunity to raise issues and provide feedback to the Group, and the Board is regularly updated on wider stakeholder insights into issues that matter to them and the business to enable the Board to understand and consider these issues in decision making.
The Board recognises that our employees are one of our most important stakeholder groups.
Principle 4: Embed effective risk management, considering both opportunities and threats, throughout the organisation
Financial controls
The Group has an established framework of internal financial controls, the effectiveness of which is regularly reviewed by the Executive Management, the Audit Committee and the Board in light of an ongoing assessment of significant risks facing the Group:
- The Board is responsible for reviewing and approving overall Group strategy, approving revenue and capital budgets and plans, and for determining the financial structure of the Group including treasury, tax and dividend Monthly results and variances from plans and forecasts are reported to the Board.
- The Audit Committee assists the Board in discharging its duties regarding the financial statements, accounting policies and the maintenance of proper internal business, and operational and financial controls, including the review of results of work performed by the Group controls
- There are comprehensive procedures for budgeting and planning, for monitoring and reporting to the Board business performance against those budgets and plans, and for forecasting expected performance over the remainder of the financial These cover cash flows, capital expenditure and balance sheets. Monthly results are reported against budget and compared with the prior year, and forecasts for the current financial year are regularly revised in light of actual performance.
- The Group has a consistent system of prior appraisal for investments, overseen by the Chief Financial Officer (Westend Corporate acting), Chief Executive Officer and Board of Directors. Financial controls and procedures are in place with which each business area is required to comply in order to be granted investment funds for
Non-financial controls
The Board recognizes that maintaining sound controls and discipline is critical to managing the downside risks to our plan. The Board has ultimate responsibility for the Group’s system of internal control and for reviewing its effectiveness. However, any such system of internal control can provide only reasonable, but not absolute, assurance against material misstatement or loss. The Board considers that the internal controls in place are appropriate for the size, complexity and risk profile of the Group.
The principal elements of the Group’s internal control system include:
- Close management of the day-to-day activities of the Group by the Executive
- An organizational structure with defined levels of responsibility, which promotes entrepreneurial decision-making and rapid implementation while minimizing
- A comprehensive annual budgeting process producing a detailed integrated profit and loss, balance sheet and cash flow, which is approved by the
- Detailed monthly reporting of performance against
- Central control over key areas such as capital expenditure authorization and banking facilities.
Principle 5: Maintaining the Board as a well-functioning, balanced team led by the Chairman
The Board comprises the Non-Executive Chairman, one Executive Director and two Non-Executive Directors. The Board of Amur is supported by the senior management team and Westend Corporate LLP (external accountancy and financial service). The details and background of the members of the Board and senior management can be found on the Company’s website at www.amurminerals.com/management-team/.
The Board is satisfied that it has a suitable balance between independence on the one hand, and knowledge of the Group on the other, to enable it to discharge its duties and responsibilities effectively. All Directors are encouraged to use their independent judgement and to challenge all matters, whether strategic or operational. The following Directors are considered to be independent Directors:
- Robert Schafer (Non-Executive Chairman).
- Paul Gazzard (Non-Executive Director).
- Tom Bowens (Non-Executive Director).
The Board has established an Audit Committee and a Remuneration Committee, particulars of which appear hereafter. The Board has agreed that appointments to the Board are made by the Board as a whole. The Non- Executive Directors are considered to be part time but are expected to provide as much time to the Group as is required. The Board considers that this is appropriate given the Groupʼs current stage of operations. It shall continue to monitor the need to match resources to its operational performance and costs and the matter will be kept under review going forward. The Board notes that the QCA Code recommends a balance between executive and non-executive Directors and recommends that there be two independent non-executives. The Board shall review further appointments as scale and complexity grows.
Attendance at Board and Committee Meetings
The Company shall report annually on the number of Board and committee meetings held during the year and the attendance record of individual Directors. In order to be efficient, the Directors meet formally and informally both in person and by telephone. During the year there were 10 board meetings and their attendance was as follows:
Member | Meetings attended | Meetings eligible to attend |
---|---|---|
Mr R Schafer | 10 | 10 |
Mr R Young | 10 | 10 |
Mr P Gazzard | 10 | 10 |
Mr T Bowens | 10 | 10 |
Key Board activities this year included:
- Discussing the sale of AO Kun-Manie.
- Assessing suitable banking facilities to assist with the sale of AO Kun-Manie.
- Continue dialogue with the investment
- Discussing the Company’s capital structure and financial
- Discussing internal governance
- Discussing the Company’s/Group’s risk
Directors’ conflict of interest
The Group has long established and effective procedures in place to monitor and deal with conflicts of interest. The Board is aware of the other commitments and interests of its Directors, and changes to these commitments and interests are reported to and, where appropriate, agreed with the rest of the Board.
Principle 6: Ensure that between them the Directors have the necessary up-to-date experience, skills and capabilities
The Board is satisfied that, between the Directors, it has an effective and appropriate balance of skills and experience required for the Group. Biographies of the directors are available on the Company’s website. All Directors receive regular and timely information on the Group’s operational and financial performance. Relevant information is circulated to the Directors in advance of meetings.
The Board recognises that it currently has limited diversity, and this will form a part of any future recruitment consideration if the Board concludes that replacement or additional directors are required. The Board will also review annually the appropriateness and opportunity for continuing professional development whether formal or informal.
Appointment, removal and re-election of Directors
The Board makes decisions regarding the appointment and removal of Directors, and there is a formal, rigorous and transparent procedure for appointments. The Company’s Articles of Association require that one-third of the Directors must stand for re-election by shareholders annually in rotation and that any new Directors appointed during the year must stand for election at the AGM immediately following their appointment.
Independent advice
All Directors are able to take independent professional advice in the furtherance of their duties, if necessary, at the Group’s expense. In addition, the Directors have direct access to the advice and services of the Company Secretary and Westend Corporate LLP (external accountancy and financial service).
Principle 7: Evaluate the Board performance based on clear and relevant objectives, seeking continuous improvement
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 and the Remuneration Committee) and individual directors. The size of the Board allows for open discussion and the Chairman has regular dialogue with the Chief Executive Officer whereby the Board’s role and effectiveness can be considered. The Chief Financial Officer (undertaken by Westend Corporate LLP) also has regular dialogue with the Head of the Audit Committee whereby that Committee’s effectiveness can be considered.
Internal evaluation of the Board, the Committee and individual Directors is to be undertaken on an annual basis in the form of peer appraisal and discussions to determine the effectiveness and performance of the Directors and their continued independence. No formal assessments have been prepared however the Board will keep this matter under review 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.
Principle 8: Promote a culture that is based on ethical values and behaviours
The Board recognises that their decisions regarding strategy and risk will impact the corporate culture of the Group as a whole and that this will impact the performance of the Group. The Board is very aware that the tone and culture set by the Board will greatly impact all aspects of the Group as a whole and the way that employees behave. The corporate governance arrangements that the Board has adopted are designed to ensure that Amur delivers long term value to its shareholders and that shareholders have the opportunity to express their views and expectations for the Group in a manner that encourages open dialogue with the Board.
A large part of Amurʼs 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 Group to successfully achieve its corporate objectives. The Board places great importance on this aspect of corporate life and seeks to ensure that this flows through all that the Group does. The directors consider that at present the Group has an open culture facilitating comprehensive dialogue and feedback and enabling positive and constructive challenge.
Additionally, the Group has adopted a code for Directorsʼ 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 and onshored into UK law on 31 December 2020 by the European Union (Withdrawal) Act 2018, as subsequently amended.
Principle 9: Maintain governance structures and processes that are fit for purpose and support good decision-making by the Board
Maintenance of Governance Structures and Processes
Ultimate authority for all aspects of the Groupʼs activities rests with the Board, the respective responsibilities of the Chairman and Chief Executive Officer 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 Groupʼs business and primary contact with shareholders has been delegated by the Board to the Chief Executive Officer.
Audit Committee
The Audit Committee currently comprises Paul Gazzard (Chairman) and Robert Schafer. This committee has primary responsibility for monitoring the quality of internal controls and ensuring that the financial performance of the Group is properly measured and reported. It receives reports from the executive management and auditors relating to the interim and annual accounts and the accounting and internal control systems in use throughout the Group. The Audit Committee shall meet not less than twice in each financial year and it has unrestricted access to the Groupʼs auditors.
Remuneration Committee
The Remuneration Committee comprises Tom Bowens (Chairman) and Robert Schafer. The Remuneration Committee reviews the performance of the executive directors and employees and makes recommendations to the Board on matters relating to their remuneration and terms of employment. The Remuneration Committee also considers and approves the granting of share options pursuant to the share option plan and the award of shares in lieu of bonuses pursuant to the Groupʼs Remuneration Policy.
Nominations Committee
Given the size and complexity of Amur, the Board has agreed that appointments to the Board will be made by the Board as a whole and so has not created a Nominations Committee.
Non-Executive Directors
At each Annual General Meeting one third of the directors must retire by rotation, whereupon they can offer themselves for re-election if eligible. 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 Group and its operations, with the need to ensure that independent directors can also bring new perspectives to the business.
Executive Team
The Executive Team consists of Robin Young, with input from the outsourced Chief Financial Officer (“CFO”) and the subsidiary managers and teams. They are responsible for formulation of the proposed strategic focus for submission to the Board, the day-to-day management of the Group’s businesses and its overall trading, operational and financial performance in fulfilment of that strategy, as well as plans and budgets approved by the Board of Directors. It also manages and oversees key risks, management development and corporate responsibility programmes. The Chief Executive Officer reports to the Board on issues, progress and recommendations for change. The controls applied by the Executive Team to financial and non-financial matters are set out earlier in this document, and the effectiveness of these controls is regularly reported to the Audit Committee and the Board.
Principle 10: Communicate how the Group is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders
The Board is committed to maintaining good communication and having constructive dialogue with its shareholders. The Group 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, all shareholders are encouraged to attend the Companyʼs Annual General Meeting. The outcomes of all votes will be disclosed in a clear and transparent manner via the RNS of the London Stock Exchange.
Investors also have access to current information on the Group through its website, www.amurminerals.com, and via the info@amurminerals.com email post questions that are incorporated into the FAQ page of the Company’s website. The Group lists contact details on its website and on all announcements released via RNS, should shareholders wish to communicate with the Board.
The Group shall include, when relevant, in its annual report, any matters of note arising from the audit or remuneration committees.
The Board
The Board is comprised of the non-executive chairman, two non-executive directors and a CEO. The Board has significant industry, financial, public markets and governance experience, possessing the necessary mix of experience, skills, personal qualities and capabilities to deliver on the Group’s strategy for the benefit of shareholders over the medium to long-term.
The Chairman has the responsibility of ensuring that the Board discharges its responsibilities and is also responsible for facilitating full and constructive contributions from each member of the Board in determination of the Group’s strategy and overall commercial objectives. The Board is responsible for the overall management and performance of the Group and operates within a framework of prudent and effective controls which enables risk to be assessed and managed.
Westend Corporate LLP acting as CFO with the support of a strong executive team ensure that the strategic and commercial objectives of the Group are met. They are accountable to the Board for the operational and financial performance of the business.
The Board as a whole is kept abreast with developments of governance and AIM regulations. The Company’s solicitors provide updates on governance issues and the Company’s nominated advisor (“NOMAD”), S.P. Angel Corporate Finance LLP, provides updates on listing regulations as well training as part of a director’s onboarding.
The directors have access to the Company’s NOMAD, company secretary, solicitors and auditors and are able to obtain advice from other external bodies as and when required. The 2022 performance of the business and its staff will be measured across both financial and operational functions and is captured in a corporate scorecard. The scorecard is made up of various KPIs and is tracked throughout the year.
Matters Reserved for the Board
The Board retains full and effective control over the Group and is responsible for the Group’s strategy and key financial and compliance issues. There are certain matters that are reserved for the Board which are reviewed on an annual basis, and they include but are not limited to:
- Strategy and Management – approval of strategic aims and objectives; approval of the Group’s annual operating and capital expenditure budgets and changes; decision to cease to operate all or any material part of the Group’s business;
- Structure and Capital – major changes to the Group’s corporate structure; any change to the Company’s listing;
- Financial Reporting and Controls – approval of financial results; annual reports and accounts; dividend policy and declaration of any dividend; significant changes in accounting policies/practice; treasury policies;
- Internal Controls – ensuring maintenance of a sound system of internal control and management;
- Contracts – major capital contracts; contracts which are material or strategic; major investments or any acquisitions/disposals;
- Communications – approval or resolutions and documentation put forward to shareholders;
- Board Membership and Other Appointments;
- Remuneration – determining the remuneration policy for directors, senior executives and non-executive directors, introduction of new share incentive plans, changes to existing plans;
- Corporate Governance Matters – review of the Group’s overall corporate governance arrangements; and
- Policies – approval of Group policies, including the share dealing
Board Evaluation
The directors consider seriously the effectiveness of the Board, its Committees and individual performance.
The Board generally meets a minimum of four times a year with ad hoc Board meetings as the business demands. There is a strong flow of communication between the directors, and in particular between the CEO and Chairman. Board meeting agendas are set in consultation with both the CEO and Chairman, with consideration being given to both standing agenda items and the strategic and operational needs of the business.
Comprehensive board papers are circulated in advance of meetings, giving directors ample time to review the documentation and enabling an effective meeting. Resulting actions are tracked for appropriate delivery and follow up. The directors have a broad knowledge of the business and understand their responsibilities as directors of a UK company quoted on AIM and developing appropriate corporate governance procedures and looking forward to building further on the governance structure already in place.
The Company’s NOMAD provides annual boardroom training as well as initial training as part of a director’s onboarding. The Company Secretary, Westend Corporate LLP, helps keep the Board up-to-date with developments in corporate governance and liaises with the Nomad on areas of AIM requirements. The Company Secretary has frequent communication with both the Chairman and CEO and is available to other members of the Board as required. The directors also have access to the Group’s auditors and lawyers as and when required, and the directors are able, at the Group’s expense, to obtain advice from other external advisers if required.
The Board entered 2022 looking forward to building further on the governance structure already in place. Whilst being mindful of the size and stage of development of the Group, the board reviews and ensures the highest level of governance is maintained.