Investor Information
Chairman’s Statement on Corporate Governance

The Chairman of Amedeo Resources plc’s (Amedeo, or the Company) responsibility is to ensure that the Board is led effectively, the Company’s strategy and implementation is regularly reviewed, to oversee the Company’s corporate governance model and to communicate with shareholders.

Amedeo has adopted the Quoted Companies Alliance Corporate Governance Code (QCA Code) in line with the London Stock Exchange’s recent changes to the AIM Rules, requiring all AIM-quoted companies to adopt and comply or explain non-compliance with a recognised corporate governance code. This report follows the structure of these guidelines and explains how we have applied the guidance. Annual updates will be provided in compliance with the QCA Code, and note changes to the Company’s key corporate governance arrangements over the past year include the adoption of the QCA Code, and the resignation of the Company’s Chairman and Non-Executive Director, Mr Ghanim Al Saad. Zafarullah Karim, Executive Director, is currently acting as Interim Chairman.

The Board considers that the Group complies with the QCA Code so far as it is practicable having regard to the size, nature and current stage of development of the Company, and will disclose any areas of non-compliance in the text below. Amedeo understands that the application of the QCA Code supports the Company’s medium to long-term success whilst simultaneously managing risks and provides an underlying framework of commitment and transparent communications with stakeholders.

The QCA Code sets out 10 principles that should be applied. These are listed below together with a short explanation of how the Company applies each of the principles:

 

Principle One
Business Model and Strategy
The Board has concluded that the highest medium and long term value can be delivered to its shareholders by the adoption of a single strategy for the Company. The Company’s strategy is to build shareholder value by making and assisting investments in the resource and infrastructure and energy sectors.

The Company’s investment policy is to invest primarily in the resources and energy and related infrastructure sectors worldwide. The investment policy does not preclude investment in other sectors. The Company may acquire controlling or non-controlling stakes and it may be an active or a passive investor. Investments may be either quoted or unquoted and may be in companies, partnerships, joint ventures or direct interests in projects. The investment policy does not preclude the Company making an investment which may be deemed to be a reverse takeover under the AIM Rules. Any transaction constituting a reverse takeover under the AIM Rules will be subject to shareholder approval.

The Company intends to deliver shareholder returns principally through capital appreciation rather than income distribution via dividends. Challenges to delivering capital appreciation is uncertainty in relation to the underlying performance of investments. Other challenges to the execution of the Company’s strategy and Business Model are highlighted in the Risk Management section below.

 

Principle Two
Understanding Shareholder Needs and Expectations
The Board is committed to maintaining good communication and having constructive dialogue with its shareholders. The Company has ongoing relationships with its private shareholders. Institutional shareholders have the opportunity to discuss issues and provide feedback at meetings with the Company. The CEO is primarily responsible for shareholder communication. In addition, all shareholders are encouraged to attend the Company’s Annual General Meeting. The Board also responds to written queries made by shareholders. Significant developments are released to the market through the Regulatory News Service, our Interim and Annual Reports, and through presentations and other key information on the Company though its website, http://www.amedeoresources.com/. There is also a contact form on the website, to which investor relations enquiries and feedback can be directed. The Company is open to receiving feedback from key stakeholders, and takes action where appropriate.

 

Principle Three
Considering wider stakeholder and social responsibilities
As the Company is an investment company, the number of employees and stakeholders is minimal. The Board still recognises that the long term success of the Company is reliant upon the efforts of Company’s contractors, suppliers, regulators and other stakeholders. The Board has put in place a range of processes and systems to ensure that there is oversight and contact with its key resources and relationships.

The Company has ongoing relationships with a broad range of its stakeholders and provides them with the opportunity to raise issues and provide feedback to the Company. There is an open and confidential dialogue to help two way communication about Company goals, targets and aspirations. These feedback processes help to ensure that the Company can respond to new issues and opportunities that arise, furthering the success of the Company.

 

Principle Four
Risk Management
In addition to its other roles and responsibilities, the Board is 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 risk assessment matrix below sets out those risks and the controls that are in place. This matrix is updated as changes arise in the nature of risks or the controls that are implemented to mitigate them. The Board reviews the risk matrix and the effectiveness thereof on a regular basis. The following principal risks and controls to mitigate them have been identified:

 

Activity Risk Impact Control(s)
Strategic Inadequate performance by the Company’s various investments Inability to collect financial return, or to generate future income. Monitor market trends to ensure that the Company is aware of any fluctuations and consequently take proactive steps to mitigate losses.
Financial Currency risk Exposed to varying exchange rates from USD to various other currencies (e.g. RMB and GBP). No active hedging strategy in place as the substantial part of the impact is non-cash, however the Company reviews the need for a hedging strategy as appropriate.
Inability to raise funding through equity, debt markets, or sale of existing investments Unable to make new investments.Reduction in investment’s asset values. Financial performance is monitored in a timely manner. The board meets regularly to review investment holdings and current and anticipated levels of financial liabilities, and also to ensure that it has sufficient financial resources to implement its planned operations while maximising the return to stakeholders.
Material misstatement or loss in financial statements Incorrect reporting of assets Internal systems have been designed to provide reasonable assurance that problems are identified on a timely basis and dealt with appropriately. The Directors have put in place a framework of controls to ensure that ongoing financial performance is monitored in a timely manner, that corrective action is taken and that risk is identified as early as practically possible. Directors regularly review the effectiveness of internal financial control.

 

The Directors have established procedures, as represented by this statement, for the purpose of providing a system of internal control. Although no system of internal control can provide absolute assurance, the Company’s systems are designed to provide reasonable assurance that problems are identified on a timely basis and dealt with appropriately. In carrying out their responsibilities, the Directors have put in place a framework of controls to ensure, as far as possible, that ongoing performance is monitored in a timely manner, that corrective action is taken, that risk is identified as early as practically possible, and that they have reviewed the effectiveness of internal control.

An internal audit function is not considered necessary or practical due to the size of the Company and the day to day control exercised by the executive directors. However, the Board will continue to monitor the need for an internal audit function. The Board has established appropriate reporting and control mechanisms to ensure the effectiveness of its control systems.

 

Principle Five
A Well-Functioning Board of Directors
As at the date hereof, the Board comprised of the CEO, Glen Lau, an Interim Executive Chairman, Zafarullah Karim, and one Non-Executive Director, Philippe Petitpierre. Biographical details of the current Directors are set out within Principle Six below. Executive and Non-Executive Directors are subject to re-election at intervals of no more than three years. The letters of appointment of all Directors are available for inspection at the Company’s registered office during normal business hours.

All the Directors including 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 considers that this is appropriate given the Company’s 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. Philippe Petitpierre is considered to be an Independent Director. The Board notes that the QCA recommends a balance between executive and non-executive Directors and recommends that there be two independent non-executives. The Company recognises the long term need for an Independent Non-Executive Chairperson and continues to search for the right candidate for this role. As with the Chairman’s role, the Board shall review further appointments as scale and complexity grows. However, all Directors are encouraged to use their judgement and to challenge matters, whether strategic or operational, enabling the Board to discharge its duties and responsibilities effectively.

The Board meets at least 4 times per annum and the Board expects to meet at least 6 times per annum with ad hoc meetings called as and when required when the need arises. In order to be efficient, the Directors meet formally and informally both in person and by telephone. Board document authors are made aware of proposed deadlines, allowing relevant papers to be collated and circulate with sufficient time prior to each meeting. At each scheduled meeting of the Board, the Directors report on the Company’s operations.

There is no separate Audit, Remuneration or Nomination Committee as the Board considers that, given its current size, all members of the Board should participate in those roles and responsibilities normally reserved for such committees. Therefore, the full Board of Directors provides a forum for reporting by the Company’s external auditor

 

Principle Six
Appropriate Skills and Experience of the Directors
The Board currently consists of 3 Directors and, in addition, the Company has employed the outsourced services of Temple Company Secretarial Limited to act as the Company Secretary. The Company believes that the current balance of skills in the Board as a whole, reflects a very broad range of personal, commercial and professional skills across geographies and industries and each of the Directors has experience in public markets.

The Board recognises that it currently has a limited diversity and this will form a part of any future recruitment consideration.

The Board shall review annually the appropriateness and opportunity for continuing professional development whether formal or informal.

 

Lau Lian Seng Glen
Chief Executive Officer

Mr Lau graduated from the National University of Singapore in 1989 with a BSc in Mathematics and Economics and achieved a MSc in Financial Engineering from the same university in 2001. He has over two decades of experience working in the financial sector, with a particular expertise in investment banking and fund management. He also has significant experience in the offshore infrastructure sector, having been the Deputy Chairman of PPL Shipyard Pte Ltd, one of Singapore’s pre-eminent offshore rig builders, and he was instrumental in helping to secure the Amedeo’s joint-venture investment with Yangzijiang Shipbuilding (Holdings) Ltd. Mr Lau is a Director of Fulton Capital Management Limited.

 

Zafarullah Karim
Executive Director and Interim Chairman

Mr Karim has over two decades of business and financial experience, including investment banking, investment and risk management, financial strategy and growing and restructuring companies. Mr Karim has been the impetus driving change and growth in several companies where he has served as a board member. He has also acted as a consultant to various businesses and entrepreneurs in relation to their financial and investment strategies. Mr Karim started his career in 1990 in investment banking with Salomon Brothers. He then worked for several years for NM Rothschild & Sons in a variety of developed and emerging markets. Mr Karim has an M.A. (Hons) in economics from the University of Cambridge.

 

Philippe Petitpierre
Independent Non-Executive Director

Mr Petitpierre is a Swiss national who holds two Masters Degrees in Environmental Sciences and Energy from the EPFL (Lausanne Institute of Technology). He represents Switzerland on the Board of IGU (International Gas Union) and is a member of the Board of Directors of EUROGAS in Brussels. Mr Petitpierre is vice chairman of the SWISSGAS Company and the Swiss Gas Industry Association. He is also active in the regional economy, chairing two Banks and the Economic Development Council of Canton of Vaud.

 

Principle Seven
Evaluation of Board Performance
Internal evaluation of the Board 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 in various as well as the Directors’ continued independence.

The results and recommendations that come out of the appraisals for the directors shall identify the key corporate and financial targets that are relevant to each Director and their personal targets in terms of career development and training. Progress against previous targets shall also be assessed where relevant.

Succession planning recommendations are made by the Board as a whole, and all Directors submit themselves for re-election at the AGM at regular intervals. Recommendations on new appointments to the Board are made by individual Directors and are discussed at Board meetings.

 

Principle Eight
Corporate Culture
The Board recognises that its 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 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 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 importance 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. The directors seek to align their interests with shareholders.

 

Principle Nine
Maintenance of Governance Structures and Processes
Ultimate authority for all aspects of the Company’s activities rests with the Board, the respective responsibilities of the Chairman and Chief Executive Officer arising as a consequence of delegation by the Board. Whilst the Board has not formally adopted appropriate delegations of authority setting out matters which are reserved to the Board, there is effectively no decision of any consequence made other than by the Directors. All Directors participate in the key areas of decision-making, including the following matters:

  • The Group’s strategy and vision
  • Interim and full year financial statements and reports
  • Investments or disposals
  • Corporate governance
  • Appointment of new Directors

The Interim Executive Chairman is responsible for the effectiveness and leadership of the Board, whilst management of the Company’s business and primary contact with shareholders has been delegated by the Board to the Chief Executive Officer. The Non-Executive Director is tasked with ensuring that the strategies proposed by the executive directors are fully considered, constructively challenging the decisions of executive management and satisfying himself that the systems of business risk management and internal financial controls are robust.

The Board shall also review governance framework regularly and expect these to evolve over time, in line with Company growth. The Board is currently searching for, and expects to appoint, an Independent Non-Executive Director in the near future.

Audit and Compliance Committee
The Board has agreed that all audit and compliance related decisions will be made by the Board as a whole and so has not created an Audit Committee. An Audit Committee is not considered necessary or practical due to the size of the Company and the day to day control exercised by the executive directors. However, the Board will continue to monitor the need for an Audit Committee. Therefore, the Board 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 CEO and auditors relating to the interim and annual accounts and the accounting and internal control systems in use throughout the Company.

Remuneration Committee
The Board has agreed that all remuneration related decisions will be made by the Board as a whole and so has not created a Remuneration Committee. Therefore, the Board as a whole reviews the performance of both executive and non-executive directors and on matters relating to their remuneration and terms of employment. The Board also considers and approves the granting of share options pursuant to the share option plan and the award of shares pursuant to the Company’s Remuneration Policy.

Nominations Committee
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
The Board notes the recommendation for both executive and Non-Executive Directors to sit on the Board, and that the QCA Code recommends that there be two Independent Non-Executives. The Board will take this into account when considering future appointments. This will provide for the orderly and constructive succession and rotation of the Chairman and Non-Executive Directors insofar as both the Chairman and Non-Executive Directors will be appointed for an initial term of 3 years and may, at the Board’s discretion believing it to be in the best interests of the Company, be appointed for subsequent terms.

 

Principle Ten
Shareholder Communication
The Board is committed to maintaining effective communication and having constructive dialogue with its shareholders. The Company intends to have ongoing relationships with its private shareholders and institutional shareholders and for them to have the opportunity to discuss issues and provide feedback at meetings with the Company. Investors have access to current information on the Company though its website, http://www.amedeoresources.com/, where the Company, amongst other things, aims to issue press releases to keep investors informed of events and progress throughout the year. The Board also responds to written queries made by shareholders and may meet with major shareholders if requested. In addition, all shareholders are encouraged to attend the Company’s Annual General Meeting. The Company maintains that, if there is a resolution passed at a GM with 20% votes against, the Company will seek to understand the reason for the result and, where appropriate, take suitable action.

The Company will set out the results of any future AGMs.

The latest Corporate Documents (including Annual Reports and Notices of AGMs) can be found here.

http://www.amedeoresources.com/investor-information/corporate-documents/

Leave Us a Reply