Corporate Governance
The Directors support the highest standards of corporate governance and aim to observe the main requirements of the Combined Code to the extent that they consider appropriate in light of the Company’s size, stage of development and its resources.
The Directors are responsible for the Group’s systems of internal control and for reviewing their effectiveness. The risk management process and systems of internal control are designed to manage rather than eliminate the risk of failure to achieve the Group’s objectives. Any such system of internal financial control can only provide reasonable but not absolute assurance against material misstatement or loss.
Principles
The Company’s Board appreciates the value of good corporate governance not only in the areas of accountability and risk management but also as a positive contribution to business prosperity. The key objective is to enhance and protect shareholder value.
Board Structure
The Board currently comprises the Non-Executive Chairman, the Acting Chief Executive and the Company Secretary. Directors have a particular responsibility to ensure that the strategies proposed by the Executive Directors are fully considered. The day-to-day management of the Group is delegated to the Executive Directors. It is the policy of the Group for the Executive Directors to report and refer to the Board at regular intervals on all matters relating to the running of the Group. The Board aims to have monthly meetings. Prior to each meeting, Directors are sent an agenda and Board packs on individual agenda items where applicable. Directors may request additional Board papers on any topic.
All Directors are subject to election by shareholders at the first opportunity after their appointment and thereafter every three years. Non-Executive Directors are not subject to specified terms as all Directors are subject to the three year re-election requirement. The Board considers this appropriate and will review the situation at regular intervals.
Under the terms of the Company's Articles of Association, all Directors retire by rotation on the basis of one-third their number each year, and are required to be re-appointed by the shareholders at an Annual General Meeting. In effect this means that all Directors are subject to re-election by shareholders at least every three years.
Committees of the Board
The following committees, which have written terms of reference, deal with specific aspects of the Group’s affairs.
Remuneration Committee
The Remuneration Committee, is made up of the full Board, is responsible for making recommendations to the Board on the Group’s framework of Executive remuneration and its cost. The committee determines the contract terms, remuneration and other benefits for each of the Executive Directors. It is chaired by Mr Robert Adair and has access to recruitment consultants when required. The Board itself determines the remuneration of the Non-Executive Directors.
Audit Committee
The Audit Committee is made up of the full Board and is chaired by Mr Robert Adair. Its prime tasks are to review the half-yearly and annual accounts before they are presented to the Board, focusing in particular on accounting policies and areas of management judgment, scope of internal control and estimation. The committee is responsible for monitoring the controls which are in force to ensure the integrity of the information reported to the shareholders. The committee acts as a forum for discussion of internal control issues and contributes to the Board’s review of the effectiveness of the Group’s internal control and risk management systems and processes. The Committee reviews annually the objectivity and independence of the external auditors.
The committee meets at least twice a year, provides a forum for reporting by the Group’s external auditors. Meetings are also attended, by invitation, by the Finance Director.
The Audit Committee has considered the Group’s circumstances and due to the close involvement of the Directors in operational, financial and risk management and control, and in view of the Group’s size, it believes that shareholders would not benefit from the implementation of an internal audit function at this time. This will continue to be reviewed annually.
Nomination Committee
Due to the commercial size of the Group, it is not considered necessary to have a Nominations Committee at this time in the Company’s development and the Board reserves to itself the process by which a new Director is appointed.
Evaluation and Appraisal
The Board does not currently have a formal system in place for evaluating the performance of individual Directors and committees. The presence of an open environment where feedback is continually sought provides an informal process that enables the continual improvement of Directors and committees. The Board believes that this system is effective given the current size of the Board and the increasing executive requirements placed upon the Group’s limited resources. The Board will consider the implementation of a formal evaluation process each year as appropriate.
Internal Control
The Directors are responsible for the Group’s system of internal control and reviewing its effectiveness. The Board has designed the Group’s system of internal control in order to provide the Directors with reasonable assurance that its assets are safeguarded, that transactions are authorised and properly recorded and that material errors and irregularities are either prevented or would be detected within a timely period. However, no system of internal control can eliminate the risk of failure to achieve business objectives or provide absolute assurance against material misstatement or loss.
The key elements of the control system in operation are:
- The Board meets regularly with a formal schedule of matters reserved to it for decision and has put in place an organisational structure with clear lines of responsibility defined and with appropriate delegation of authority;
- There are established procedures for planning, approval and monitoring of capital expenditure and information systems for monitoring the Group’s financial performance against approved budgets and forecasts; and
- The Finance Director is required to undertake a full assessment process to identify and quantify the risks that face the Group’s businesses and functions, and assess the adequacy of the prevention, monitoring and modification practices in place for those risks. In addition, unrestricted access of Non-Executive Directors to all members of senior management.
The Audit Committee receives reports from external auditors and from the Executive Directors of the Group. The Board receives periodic reports from all committees.
Relations with Shareholders
The Group values its dialogue with both institutional and private investors. Effective two-way communication with fund managers, institutional investors and analysts is actively pursued and this encompasses issues such as performance, policy and strategy.
Statement by the Directors on compliance with the provisions of the Combined Code
The maintenance of effective corporate governance is a key priority of the Board. Under the rules of AIM, the Company is not required to comply with the detailed requirements of the Combined Code. The Board fully supports the principles of openness, integrity and accountability on which the Combined Code is based and has applied those principles that are relevant to the Group’s size and complexity. As the business expands, procedures will be reviewed and considered by the Board.
Country of incorporation and main country of operation
The Company was incorporated in England and Wales on 5th August 2005 as China Goldmines Limited under the Act as a private limited company with registered number 5529561 and on 12th December 2005 the company was registered as a public limited company under the Act with the name of China Goldmines plc. On the 16th December 2010 the Company changed its name to Consolidated General Minerals plc. The Company has no operations and is managed from its corporate offices in Switzerland.
Registered Office:
68 Upper Thames Street