Changes to corporate governance regime

The Board have adopted the Quoted Companies Alliance Corporate Governance Code for Small and Mid-Sized Quoted Companies (ďthe QCA CodeĒ) in line with the London Stock Exchangeís recent changes to the AIM Rules requiring all AIM-listed companies to adopt and comply with a recognised corporate governance code. Our report sets out in broad terms how we comply at this point in time. We will provide annual updates on our compliance with the code.

This disclosure was last reviewed and updated on 27 September 2018.

THE PRINCIPLES OF THE QCA CODE

1. Establish a strategy and business model which promote long-term value for shareholders

The principal activity of the Group is that of a natural resources investment company focused on investing in undervalued companies and projects with strong fundamentals and attractive growth prospects. Polo aims to build a diversified portfolio of mineral and hydrocarbon assets which the Board of Directors consider as offering substantial growth potential, pursuing both short and long-term value enhancing investments.

The Groupís strategy is explained fully within our Investing Policy included within this website and on page 3 of our Annual Report & Accounts for the year ended 31 December 2017. A review of the current and future development of the Groupís business is given in the Chairmanís Statement, Strategic Report and Finance Review on pages 4 to 13 of the 2017 Annual Report & Accounts.
 
2. Seek to understand and meet shareholder needs and expectations

The Board is committed to providing effective communication with the shareholders of the Company. Significant developments are disseminated through stock exchange announcements and regular updates of the Company website. The Board views the Annual General Meeting (“AGM”) as a forum for communication between the Company and its shareholders and encourages their participation in its agenda. The Board considers that this approach to shareholder engagement has worked well.

The Board maintains regular contact with its advisers and public relations consultants in order to ensure that the Board develops an understanding of the views of major shareholders about the Company.

The Company lists contact details on its website and on all announcements released via RNS, should shareholders wish to communicate with the Board.

Shareholders are welcome to contact the Company via email at info@poloresources.com with any specific queries.
 
3. Take into account wider stakeholder and social responsibilities and their implications for long-term success

The Company is aware of the potential impact that activities conducted by it and some of its subsidiary companies may have on the environment. The Company ensures that it, and its subsidiaries at a minimum, comply with the local regulatory requirements and the revised Equator Principles with regard to the environment.

The Groupís responsibilities to stakeholders including staff, suppliers, consultants and wider society are also recognised.

The Groupís operations and working methodologies take account of the need to balance the needs of all of these stakeholder groups while maintaining focus on the Boardís primary responsibility to promote the success of the Group for the benefit of its members as a whole. The Group endeavours to take account of feedback received from stakeholders, making amendments to working arrangements and operational plans where appropriate and where such amendments are is consistent with the Groupís longer term strategy.
 
4. Embed effective risk management, considering both opportunities and threats, throughout the organisation

Internal Controls
The Directors acknowledge their responsibility for the Groupís systems of internal controls and for reviewing their effectiveness. These internal controls are designed to safeguard the assets of the Company and to ensure the reliability of financial information for both internal use and external publication. The Directors are aware that no system can provide absolute assurance against material misstatement or losses. However, in the interest of the further development of the Company, continuing reviews of internal controls will be undertaken to ensure that they are adequate and effective.

Risk Management
The Board considers risk assessment to be important in achieving its strategic objectives and is an essential part of the Groupís planning and an important aspect of the Groupís internal control system. There is a process of evaluation of performance targets through regular reviews by senior management to budgets and forecasts. Project milestones and timelines are regularly reviewed.

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.

The principal risks facing the Company are set out on pages 20 to 22 of the Groupís 2017 Annual Report & Accounts. Risk assessment and evaluation is an essential part of the Groupís planning and an important aspect of the Groupís internal control system.

Insurance
The Group maintains insurance in respect of its Directors and Officers against liabilities in relation to the Company.

Treasury Policy
The Group finances its operations through equity and holds its cash as a liquid resource to fund the obligations of the Group and take advantage of opportunities as they arise. Decisions regarding the management of these assets are approved by the Board.

Securities Trading
The Board has adopted a Share Dealing Code that applies to Directors, senior management and any employee who may be in possession of Ďinside information.í All such persons are prohibited from trading in the Companyís securities if they are in possession of Ďinside information.í Subject to this condition and trading prohibitions applying to certain periods, trading can occur provided the relevant individual has received the appropriate prescribed clearance.
 
5. Maintain the board as a well-functioning, balanced team led by the chair

The Board of Directors currently comprises one Executive Director, whom is the Chairman, and two Non-Executive Directors, one of whom also acts as Senior Independent Director. The Directors are of the opinion that the Board currently comprises a suitable balance and that the recommendations of the QCA Code have been implemented to an appropriate level.

All Directors receive regular and timely information on the Groupís operational and financial performance. Relevant information is circulated to the Directors in advance of meetings. All Directors have access to the advice of the Companyís solicitors and other professional advisers as necessary and information is supplied to the Directors on a timely basis to enable them to discharge their duties effectively. All Directors have access to independent professional advice, at the Company's expense, as and when required.

The Company will hold timely board meetings periodically as issues arise which require the attention of the Board. The Directors are responsible for formulating, reviewing and approving the Company's strategy, budget, major items of capital expenditure and senior personnel appointments.

The Company is aware of the potential impact that activities conducted by it and some of its subsidiary companies may have on the environment. The Company ensures that it, and its subsidiaries at a minimum, comply with the local regulatory requirements and the revised Equator Principles with regard to the environment.

Board Committees
The Company has established an Audit Committee and a Remuneration Committee with formally delegated duties and responsibilities.

Audit Committee
The Audit Committee considers the Groupís financial reporting (including accounting policies) and internal financial controls. The Audit Committee comprises the Executive Director, Michael Tang, and one Non-Executive Director, Kian Meng Cheah (Chairman). Both are responsible for ensuring that the financial performance of the Group is properly monitored and reported on. In addition, the Audit Committee receives and reviews reports from management and the auditors relating to the interim report, the annual report and accounts and the internal control systems of the Company.

Remuneration Committee
The Remuneration Committee is responsible for making recommendations to the Board in respect of Directorsí and senior executivesí remuneration with due regard to the interests of the Shareholders and the performance of the Company. It comprises the Executive Director, Michael Tang, and one Non-Executive Director, Kian Meng Cheah (Chairman). Non-Executive Directorsí remuneration and conditions are considered and agreed by the Board. Financial packages for Executive Directors are established by reference to those prevailing in the employment market for executives of equivalent status both in terms of level of responsibility of the position and their achievements and of recognised job qualifications and skills. The Committee will also have regard to the terms which may be required to attract an equivalent experienced executive to join the Board from another company.

In accordance with the provisions of the AIM Rules, which require the nominated adviser and the Company to maintain regular contact so as to enable:
  1. the nominated adviser to ensure the Company and the Directors continue to understand their obligations under the AIM Rules for Companies; and
  2. that the nominated adviser is kept up to date with developments at the Company.
The Directors have considered it appropriate to appoint a committee to ensure compliance with those rules (''AIM Rules Compliance Committee'').

The AIM Rules Compliance Committee established by the Company comprises any two Directors of the Company and they have been given full power and authority to perform, approve, execute, deliver and/or issue all things which the AIM Rules Compliance Committee considers necessary or expedient in connection with the Company's Admission to and trading on AIM, or any matter incidental thereto including, without limitation raising and discussing or issuing notification to the nominated adviser of:
  1. any deals by Directors in respect of any Ordinary Shares in which the Directors are interested;
  2. any changes by any Shareholder holding 3% or more of any Ordinary Shares which increase or decrease such holding through any single percentage;
  3. the resignation, dismissal or appointment of any Director from time to time;
  4. any change in the Company's accounting reference date, registered office address or any change in its legal name;
  5. any material change between the Company's actual trading performance or financial condition and any profit forecast, estimate or projection made public on behalf of the Company;
  6. any decision to make any payment in Ordinary Shares;
  7. the reason for the application for admission to trading on AIM or cancellation of any Ordinary Shares;
  8. the occurrence and number of Ordinary Shares taken into and out of treasury;
  9. the resignation, dismissal or appointment of the Company's nominated advisor or broker from time to time;
  10. any change in the website address operated by the Company including any changes in order to ensure continued compliance with Rule 26 of the AIM Rules for Companies;
  11. the admission to any other exchange or trading platform of the Ordinary Shares; and
  12. any changes relating to the Company in connection with its financial condition, sphere of activity, performance of its business and the expectation of its performance.
  Memorandum and Articles of Association in PDF format
 
6. Ensure that between them the directors have the necessary up-to-date experience, skills and capabilities

The Board believes that its broad collective experience in investing together with their extensive network of contacts will assist them in the identification, evaluation, structuring and funding of appropriate investment opportunities. When necessary, external consultants and professionals are engaged to assist in the evaluation of prospective targets, their management teams and the respective market place.

Where new Board appointments are considered the search for candidates is conducted, and appointments are made, on merit, against objective criteria and with due regard for the benefits of diversity on the Board, including gender.

The Company Secretary supports the Chairman in addressing the training and development needs of Directors.
 
7. Evaluate board performance based on clear and relevant objectives, seeking continuous improvement

The Board has a process for evaluation of its own performance, that of its committees and individual Directors, including the Chairman. The Board carries out an evaluation of its performance annually, taking into account the Financial reporting Councilís Guidance on Board Effectiveness.

Appraisals are carried out each year with all Directors to ensure that their performance is, and continues to be effective, that where appropriate they maintain their independence and that they are demonstrating continued commitment to the role.

The Board may utilise the results of the evaluation process when considering the adequacy of the composition of the Board and for succession planning.

The Board makes decisions regarding the appointment and removal of Directors, and there is a formal, rigorous and transparent procedure for appointments. No directors have joined or stepped down from the Board since its last AGM.

Taking due regard of the principles of Good Governance, the Directors offer themselves for re-election at intervals of no more than three years.
 
8. Promote a corporate culture that is based on ethical values and behaviours

Confidentiality
In accordance with legal requirements and agreed ethical standards, Directors and all staff have agreed to maintain confidentiality of non-public information except where disclosure is authorised or legally mandated.

Bribery
In accordance with the provisions of the Bribery Act, all Directors and staff have been informed and have acknowledged that it is an offence under the Act to engage in any form of bribery. The Company has an anti-bribery and whistleblowing policy in force.

The Directorsí Report section of the Corporate Governance Report on page 18 of the most recent Annual Report & Accounts for the year ended 31 December 2017 details the ethical values of the Polo Resources Group including environmental, social and community and relationships.
 
9. Maintain governance structures and processes that are fit for purpose and support good decision-making by the board

The Chairman & Chief Executive Officer is the leading representative of the Company presenting the Companyís aims and policies to Shareholders. His responsibilities include taking the Chair at Board Meetings and General Meetings, where he is responsible for ensuring the appropriate supply of information. He is also responsible for leading the development and execution of the Companyís long-term strategy. The Company considers that having the same person as Chairman and Chief Executive Officer is appropriate to the Company and Group at its current stage of development, and that sufficient experience and compliance structures exist within the Company to ensure that the governance functions that would be part of an independent Chairmanís responsibility are carried out.

Independent Directors sit on the Audit Committee and Remuneration Committee and are responsible for reporting to the full Board their conclusions, and for keeping up to date with the work of the Corporate Governance.

Audit Committee
The Committeeís responsibilities include the following:
  • to review the adequacy of systems and standards of internal control with emphasis on risk management, financial reporting procedures and compliance;
  • to review proposed announcements of financial results, financial statements, management questionnaires and external audit reports in advance of the Board;
  • to receive any information it requires from management;
  • to report its findings and recommendations directly to the Board;
Remuneration Committee
The Remuneration Committee is responsible for making recommendations to the Board in respect of Directorsí and senior executivesí remuneration with due regard to the interests of the Shareholders and the performance of the Company. Non-Executive Directorsí remuneration and conditions are considered and agreed by the Board. Financial packages for Executive Directors are established by reference to those prevailing in the employment market for executives of equivalent status both in terms of level of responsibility of the position and their achievements and of recognised job qualifications and skills. The Committee will also have regard to the terms which may be required to attract an equivalent experienced executive to join the Board from another company.

Matters reserved for the Board
The Board has a formal schedule of matters reserved to it for its decision. This schedule is reviewed annually and includes approval of:
  • Group objectives, strategy and policies;
  • Corporate Governance;
  • Structure and capital;
  • Financial reporting and control
  • Substantial transactions, contracts and commitments;
  • Board membership and other appointments;
  • Review of performance;
  • Risk assessment;
  • Dividends;
  • Remuneration
Other specific responsibilities are delegated to Board Committees, which operate within clearly defined terms of reference. The Corporate Governance Statement on pages 20 to 22 of the most recent 2017 Annual Report & Accounts details the Companyís governance structures and why they are appropriate and suitable for the Company.
The Boardís role and the Companyís Corporate Governance practices are periodically reviewed and improved as required.
 
10. 10. Communicate how the Group is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders

The Board recognises the AGM as an important opportunity to meet private shareholders.

The Groupís financial reports can be found here.

Notices of General Meetings of the Company can be found here.

The results of voting on all resolutions in future general meetings will be posted to the Groupís website, including any actions to be taken as a result of resolutions for which votes against have been received from at least 20 per cent of independent shareholders.

Click here for Annual Report 2017

     
   
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