Corporate Governance

Corporate policies

Sovereign Mines of Africa takes its health, safety, environmental and community responsibilities seriously, and has developed policies and systems to ensure that it explores in a safe, low impact  and consultative manner, maximising the sustainability of its present and future operations for the benefit of all stakeholders.

Health and safety

Sovereign Mines of Africa takes the health and safety of its employees and contractors seriously, and strives to exceed statutory obligations and achieve best practice. To this end, a new safety management system has been implemented for its exploration operations.

Environment

Sovereign Mines of Africa operates in strict adherence to local and Governmental standards with regard to environmental impact on the local community. This procedure includes pre-exploration checks and post-exploration remediation programs. Currently, no unfulfilled commitments exist to remediate land upon which the Company has conducted exploration work.

Community

Sovereign Mines of Africa is committed to working consultatively and co-operatively within the communities in which it operates, which includes local subsistence farmers and pastoralists and firmly believes that future mining operations should be to the benefit of all.

To this end, Sovereign Mines of Africa personnel participate in cultural awareness programs and have forged close ties with landholders and maintain a constructive dialogue with the Department of Environment and local community representatives.

Corporate Governance  

Although not required by AIM Rules, the Directors comply with the provisions of the QCA Guidelines to the extent that they believe it is appropriate in light of the size, stage of development and resources. At present, due to the size of the Group, audit and risk management issues will be addressed by the Board. As the Group grows, the Board will consider establishing an audit and risk management committee and will consider developing further policies and procedures which reflect the principles of good governance.

The Company has adopted, and will operate where applicable, a share dealing code for directors and senior executives under the same terms as the Model Code on directors’ dealings in securities, published from time to time by the UK Listing Authority.

As required, the Company will comply with the provisions of the AIM Rules, as amended from time to time, which govern the operation and administration of the AIM market, including the arrangements for the admission of securities to AIM and ongoing requirements once admitted to trading.

The Board of Directors comprises two part-time executive directors and three non-executive directors who qualify as independent non-executive directors as defined by the UK Code of Corporate Governance (“the code”). The Directors are of the opinion that the recommendations of the code have been implemented to an appropriate level. The Board, through the Chairman and Non-executive Directors, maintain 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 Board meets at least four times a year. The board is responsible for formulating, reviewing and approving the Group’s strategy, financial activities and operating performance. Day-to-day management is devolved to the managing director of the local subsidiary who is charged with consulting with the board on all significant financial and operational matters. Consequently, decisions are made promptly and following consultation among Directors concerned where necessary and appropriate.

All necessary information is supplied to the Directors on a timely basis to enable them to discharge their duties effectively, and all Directors have access to independent professional advice, at the Company’s expense, as and when required.

The participation of both private and institutional investors at the Annual General Meeting is welcome by the Board.

Supplier payment policy 

It is the Group’s policy to pay suppliers in accordance with the terms of business agreed with them usually within 30 days. There were no trade creditors outstanding at the balance sheet date (2012: nil).

The Board has established an audit committee and a remuneration committee with formally delegated duties and responsibilities.

Audit Committee

The Audit Committee comprises David Pearl and James Comyn and receives and reviews reports from management and from the auditors relating to the interim and annual accounts and to the system of internal financial control. The Audit Committee is responsible for making recommendations to the Board on the appointment of the auditors and for approving the terms of engagement and remuneration of the auditors.  The Audit Committee also reviews reports from management and the Company’s auditors on the financial accounts and internal control systems used throughout the Company.

Remuneration Committee

The Remuneration Committee comprises David Pearl and Nathan Steinberg. The role of the Remuneration Committee is to determine and agree with the Board the framework or broad policy for the remuneration of the Company’s Chief Executive, Chairman, Executive Directors and such other members of the executive management of the Group as the Remuneration Committee considers appropriate and, within the terms of the agreed policy, and in consultation with the Chairman and Chief Executive as appropriate, to determine the total individual remuneration package of each Executive Director and other senior executives including bonuses, incentive payments and share options or other share awards, in all cases with due regard to the interests of Shareholders.

The Remuneration Committee is also responsible for reviewing the design of all share incentive plans for approval by the Board and, if required, Shareholders. For any such plans, the Remuneration Committee determines each year whether awards will be made, and if so, the overall amount of such awards, the individual awards to Executive Directors and other senior executives and the performance targets to be used.  In determining such remuneration packages and arrangements, due regard is given to any relevant legal requirements, the provisions and recommendations in the AIM Rules, and the QCA Guidelines.

Sovereign Mines of Africa is subject to the UK Takeover Code.