The key objective of corporate governance is to enhance and protect shareholder value. The Board is committed to maintaining high standards of corporate governance by applying good corporate governance principles pragmatically, having regard to the business profile and size of the Group. The Listing Rules of the Financial Services Authority incorporate the UK Corporate Governance Code, which sets out the principles of Good governance, and the Code of Best Practice for listed companies. Whilst the Company is not required to comply with the UK Corporate Governance Code, the Company's corporate governance procedures take due regard of the principles of Good Governance set out in the UK Corporate Governance Code in relation to the size and the stage of development of the Company. Guidance from the Quoted Companies Alliance is also provided by the Corporate Governance Code for small and mid-size quoted companies 2013. The Board is assisted in this regard by the committees described below.
The Board considers it essential, notwithstanding the small size of the company and the fact that it is not yet revenue earning, to recruit and retain individuals of the highest calibre as non-executive directors. Consequently they believe that it is in the interests of shareholders that non-executive directors should be provided with share options in addition to the level of fees considered affordable. The company sought advice from its advisers on this policy which does depart from best practice. The number of such options currently amounts to 200,000 in total, or just under 0.05% of the current issued share capital, and in the opinion of the executive directors is not of sufficient magnitude as to affect their independence as non-executive directors.
Our priority as a Board is to enhance and protect shareholder value by appointing directors with the requisite technical and personal skills to achieve the strategy. Our Chairman considers his role of building an effective Board as his principal contribution to Chaarat. All our directors bring independence of character and judgement to their roles and this is demonstrated in their engagement with shareholders.
The non-executive directors are usually free from any material business or other relationship with the Group.
Richard Rae is the senior non-executive director and is considered independent by the rest of the Board.
The members of the Board meet regularly to review progress. Board meetings at which formal decisions are made are held offshore as required to approve strategy and budgets, major capital expenditure and the financial statements.
All directors have access to the advice and services of the Company Secretary, who is responsible for ensuring that all Board procedures are followed. Any director may take independent professional advice at the company’s expense in the furtherance of their duties.
The remuneration committee comprises Richard Rae as Chairman and Martin Wiwen-Nilsson. The committee meets as required during each financial year. It is responsible for reviewing the performance of the executive Directors and for setting the scale and structure of their remuneration, having due regard to the interests of shareholders as a whole and the performance of the Group. The remuneration committee also administers the company’s share option arrangements. The remuneration of the non-executive directors is reviewed by the whole Board.
The audit committee comprises Richard Rae as Chairman and Martin Andersson. The committee meets formally on at least two occasions each financial year. It reviews the Company’s interim and annual financial statements before submission to the Board for approval, as well as regular reports from management and the external auditors on audit, accounting and internal control matters. Where appropriate, the audit committee monitors the progress of action taken in relation to such matters. The audit committee also recommends the appointment of, and reviews the fees of, the external auditors. It also reviews the independence of the external auditors and any non-audit services provided.
The nominations committee is comprised of the whole Board of Directors. The Chairman reviews all proposed changes to the Board with regard to the balance of skills necessary to achieve Chaarat’s strategic objectives. Recommendations for nomination to the Board have been based to date on the personal contacts of the existing Board.
Health, Safety, Environment and Community committee
A Health, Safety, Environment and Community committee is responsible for the overall health, safety and environmental performance of the Company and its operations and its relationship with the local community in the Kyrgyz Republic. The Committee is comprised of the entire Board of Directors.
Relations with shareholders
The Board recognises the importance of maintaining a dialogue with its shareholders (whether institutional or private) and values the views expressed. Dialogue can take the form of individual meetings or presentations to retail investors. Members of the Board meet with shareholders, analysts and other institutions regularly throughout the year to keep them updated. The AGM and website encourage engagement with the Board.
The Share Dealing Code
The Company has adopted a share dealing code for the Directors and its employees, which is appropriate for the company whose shares are admitted to trading on AIM (in order to, among other things, ensure compliance with Rule 21 of the AIM Rules). The Company takes all reasonable steps to ensure compliance with the terms of the share dealing code by the Directors and their connected persons and employees.