This information was last reviewed and updated on 28 September 2018

The Directors acknowledge the importance of high standards of corporate governance and SIMEC Atlantis Energy is committed to achieving the high standards of governance commensurate with the size and stage of development of the Company. As an AIM listed company, SIMEC Atlantis Energy intends to adopt as far as possible the principles of the Quoted Companies Alliance Corporate Governance Code (“the QCA Code”). The QCA Code identifies ten principles to be followed in order for companies to deliver growth in long term shareholder value, encompassing an efficient, effective and dynamic framework accompanied by good communication to promote confidence and trust.

Set out below are the ways in which SIMEC Atlantis Energy applies the principles of the QCA Code in support of the Company’s medium to long-term success, together with any areas where we do not currently comply.

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

The Company’s business model and strategy is set out on our website and a full review including key challenges throughout the year are set out in our annual report.

  1. Seek to understand and meet shareholder needs and expectations

Engagement with our shareholders takes place through a number of channels. As well as our annual and interim reporting we also provide regular non-regulatory updates on our progress via our social media platforms and our website. We encourage two-way communication with our institutional and retail shareholders and our in-house team respond to shareholder queries directly in person as do our share registrars in the UK and Singapore. At our recent annual general meeting we also secured shareholder agreement to move to electronic communication which will improve our ability to more readily share information with our shareholders, however we already seek to manage shareholder expectations through our regulatory disclosures.

In light of our ambitious growth plans we have recently commenced the search for an experienced investor relations professional to play a key role in institutional and retail investor relationship management, financial reporting and fundraising support. We are focusing our search on an individual who can not only support fundraising and debt financing activities but also lead our investor relations engagement strategy ensuring our shareholders are even better informed and involved in our journey.

  1. Take into account wider stakeholder and social responsibilities and their implications for long-term success

The Company takes its responsibilities as a corporate citizen seriously and the Directors are aware of the importance of considering the Company’s impact on its wider stakeholders. The Board’s primary goal is to create shareholder value but do so in a responsible way which serves all stakeholders and promotes the long term success of the business. As a global developer of renewable energy projects, sustainability lies at the heart of the business. Across the Company’s diversified portfolio of sustainable assets, the Group’s employees have a passion for creating sustainable energy solutions and minimising their impact on the environment.

Key to the Company’s long term success is its employees, customers, business partners, suppliers, neighbours and regulatory authorities. The Company endeavours to take account of feedback received from stakeholders, making amendments to working arrangements and operational plans where appropriate and where such amendments are consistent with the Group’s longer term strategy. The Company is committed to equality for all, regardless of gender, race, age, disability, religion or sexual orientation, where it is reasonable and practicable within existing legislation.

  1. Embed effective risk management, considering both opportunities and threats, throughout the organisation

The Board is responsible for risk management systems and internal control for reviewing their effectiveness. The internal controls are designed to manage rather than eliminate risk and provide reasonable but not absolute assurance against material misstatement or loss. Through the activities of the Audit Committee, the effectiveness of these internal controls is reviewed annually. Further information on the risks and controls are set out in our annual report.

  1. Maintain the Board as a well-functioning, balanced team led by the chair

The Board consists of seven directors, five of whom are non-executive directors. Of these five directors, two (Mark Elborne and Jay Hambro), are appointees of SIMEC. John Neill and Ian Macdonald are each regarded as independent directors by the Board notwithstanding that they hold options over Ordinary Shares. In the case of John Neill, he has an option holding over Ordinary Shares (granted in February 2014 and due to lapse in February 2019) which carry an exercise price of 94 pence per Ordinary Share and therefore do not currently carry any value. Notwithstanding his option holding, the Board considers that John has demonstrated the utmost regard for his independence, appropriately challenging the Board during his tenure as Chairman of Atlantis and maintaining high standards of corporate governance on the Board. Furthermore, John has not served as a non-executive director for an undue length of time. In the case of Ian Macdonald, although he holds a small number of Ordinary Shares and options over Ordinary Shares, all of the options have an exercise price of 94 pence per share, and therefore do not currently hold any value. Ian does not represent any shareholder on the Board. He has also not served on the Board for an undue length of time (approximately five years), and has a background in finance within regulated industries. Accordingly, the Board believes that Ian exercises independent judgement in all matters relating to the Company.

The Board also considers that John Woodley exercises independent judgement in relation to the Company’s affairs, but he cannot be regarded as independent as a result of his having been an appointee of Morgan Stanley, who has historically been a substantial shareholder in the Company. The Company currently departs from the QCA Code in a number of respects, and in particular:

(i) Board evaluation: the Board currently runs a self-evaluation process on Board effectiveness. It is intended that the Board will create a more formal process which will focus more closely on objectives and targets for improving performance;

(ii) Induction, training and succession planning: the Company employs a third party to advise the Directors of their responsibilities in connection with becoming a director of an AIM company as well as receiving advice from its nominated adviser and external lawyers. The Board proposes to introduce a facility for directors to receive training on relevant new developments on a more regular basis. The Company has not adopted a policy on succession planning in particular with regard to the Company’s chief executive, Tim Cornelius. The chief executive is however required to give six months’ notice under his contract of employment if he wishes to leave the Company. The Board proposes, to consider succession planning as part of its regular review of Board effectiveness;

(iii) Board diversity: the Company is committed to a culture of equal opportunities for all employees regardless of gender. The Board will be diverse in terms of its range of culture, nationality and international experience. It has been agreed with SIMEC pursuant to the Relationship Agreement, that the number of directors should be restricted to no more than seven. All seven are currently male. If it is agreed to expand the Board following Admission (or if when new replacement directors are sought in the future), the Board will, subject to identifying appropriate candidates look to fill at least one of the vacancies with a female director;

(iv) Senior Independent Director: the Company does not have a director designated as a Senior Independent Director. In light of the size of the Board, and the Company’s stage of development, the Board does not consider it necessary to appoint a Senior Independent Director at this stage, but will nevertheless keep this under review as part of the Board’s evaluation on Board effectiveness;

(v) Company Secretary: Whilst the Company as a Singapore registered company employs Boardroom Corporate Advisory Services Pte. Ltd as its company secretary, for the most part, Boardroom does not generally perform the role as a sounding board for the Board on legal and regulatory issues. The Company has historically relied on its external advisers (including Link Company Matters in the UK), to perform this role, as well as other individuals within the Company in relation to certain specific matters. It is intended that the Company will look to appoint a Group legal counsel to fulfil this role.

(vi) Results of Shareholder voting: The Company has not historically announced the detailed results of Shareholder voting to the market. It intends to do so from now on.

The Board meets and will continue to meet at least four times a year to review, formulate and approve the Company’s strategy, budget, corporate actions and major items of capital expenditure. The Board has established an audit committee, a remuneration committee, a nomination committee, a disclosure committee and a technology committee, with formally delegated duties and responsibilities and each with written terms of reference. Each of these committees will meet as and when appropriate save in the case of the remuneration and audit committees which will meet at least twice each year.

(a) Remuneration Committee
The remuneration committee is comprised of Mark Elborne, John Woodley and John Neill and will be chaired by Mark Elborne. The remuneration committee reviews the performance of the executive Directors and makes recommendations to the Board in respect of the Directors’ remuneration and benefits packages, including share options and the terms of their appointment. The remuneration committee also makes recommendations to the Board on proposals for the granting of share options and other equity incentives pursuant to any employee share option scheme or equity incentive plans in operation from time to time. In exercising this role, the Directors have regard to the recommendations put forward in the QCA Code and, where appropriate, the QCA Remuneration Committee Guide and associated guidance.

(b) Audit Committee
The audit committee is comprised of John Woodley, Mark Elborne and Ian Macdonald and will be chaired by Ian Macdonald. The audit committee has the primary responsibility for monitoring the quality of internal controls to ensure that the financial performance of the Company is properly measured and reported on. The audit committee, amongst other things, determines and examines matters relating to the financial affairs of the Company including the terms of engagement of the Company’s auditors and, in consultation with the auditors, the scope of the audit. It receives and reviews reports from management and the Company’s auditors relating to the half yearly and annual accounts and the accounting and the internal control systems in use throughout the Company. The audit committee has unrestricted access to the Company’s external auditors.

(c) Nomination Committee
The nomination committee is comprised of John Neill, Jay Hambro and Tim Cornelius and will be chaired by John Neill. The nomination committee has responsibility for reviewing the structure, size and composition (including the skills, knowledge and experience) of the Board and giving full consideration to succession planning. The nomination committee also has responsibility for recommending new appointments to the Board and to the other Board committees. It is responsible for identifying suitable candidates for board membership and monitors the performance and suitability of the current Board on an on-going basis.

(d) Disclosure Committee
The Disclosure Committee is comprised of Tim Cornelius, Andrew Dagley and Jay Hambro and will be chaired by Tim Cornelius. The role of the committee is on an ad hoc basis to determine, in accordance with the Company’s disclosure policy, whether specified information is inside or price sensitive information which should be disclosed to the market as well as to monitor the Group’s procedures for communicating with the market, review the Company’s arrangements for the control of inside information, assess training needs regarding the control of inside information, and various other specified matters.

(e) Technology Committee
The technology committee is comprised of John Woodley, Mark Elborne and Tim Cornelius and will be chaired by John Woodley. The technology committee monitors and reports on the status and development of technology within the Group, including reviewing the effectiveness of the Group’s engineering, ensuring that the development of the Group’s core technology is in accordance with the Company’s business objectives and monitoring the Group’s intellectual property. The committee reports to the Board on these aspects of the Group’s business and makes such recommendations as it deems appropriate.

(f) Share Dealing Code
The Company has adopted a share dealing code for the Directors and certain employees, which is appropriate for a company whose shares are admitted to trading on AIM (including relating to the restrictions on dealings during close periods in accordance with MAR and with Rule 21 of the AIM Rules for Companies) and the Company takes all reasonable steps to ensure compliance with the share dealing code by the Directors and any relevant employees.

  1. Ensure that between them, the directors have the necessary up-to-date experience, skills and capabilities

The Board considers that all of the Non-Executive Directors are of sufficient competence and caliber to add strength and objectivity to our activities, and bring significant experience to the Board. The biographies of the Board are contained within our annual report and are also available on our website.

The Board regularly reviews the composition of the Board to ensure that it has the necessary breadth and depth of skills to support the ongoing development of SIMEC Atlantis Energy.

  1. Evaluate Board performance based on clear and relevant objectives, seeking continuous improvement

The  Company’s Nomination Committee (NomCo) undertakes an annual performance evaluation of the Board in line with corporate governance best practice. Given the size of the organisation the evaluation is carried out in house by the Head of Human Resources supported by our external Company Secretary.

 A questionnaire is agreed with the Chairman and the Nomination Committee and sent to all Board members and members of the senior management committee. Responses are anonymous and are interrogated by the Head of Human Resources and the Company Secretary. The findings are then presented to and discussed with the NomCo with a focus on strengths and development areas for the Board. The Board are then engaged in discussing the findings and agreeing an action plan which is reviewed at each NomCo meeting.

Succession planning is a key focus for the NomCo and the Board in 2018. Following the reverse takeover of SIMEC Uskmouth Power in June 2018 a number of changes to the Board composition were made based on the changing requirements of the new organisation. The Board performance evaluation was reviewed and taken into account as part of the recruitment of the new Board members and the membership of the Board committees was also revised in order to ensure fresh thinking. The NomCo will draw up new succession plans at their next meeting later in 2018.

  1. Promote a corporate culture that is based on ethical values and behaviours

The Company’s Business Ethics Policy was created to provide a framework and guidance on our approach to achieving and maintaining good business behaviour by means of sound ethical conduct. It serves to ensure that all employees are aware of their individual and collective responsibilities with regards to the company’s ethics, and to emphasise our employees’ and customers’ expectations to being treated fairly and in accordance with good business practices. SIMEC Atlantis Energy is committed to protecting employees, business partners and suppliers from illegal or damaging actions by individuals, either knowingly, or unknowingly.

We are committed to acting professionally, fairly and with integrity in all of our business dealings and relationships. We strive to ensure that our people conduct all their business activities in an ethical manner and comply with all laws and regulations in the countries in which we operate. The Business Ethics Policy applies to all Group personnel] engaged by the Company and all of its subsidiaries worldwide. All are expected to perform and work with honesty and integrity at all times and ensure they are compliant with the Business Ethics Policy. Any awareness of or suspected potential breaches of the policy is to be reported in accordance with our internal whistleblowing procedures. We have rolled out training on the Business Ethics Policy across our offices and will continue to do this on a frequent basis. We have also established a management Ethics Committee to oversee the Business Ethics Policy, to be chaired by Mark Elborne.

SIMEC Atlantis Energy is committed to providing a safe environment for its staff and all other parties for which it has a legal or moral responsibility in this area. The Company has a Health and Safety policy which is rigorously enforced.

  1. Maintain governance structures and processes that are fit for purpose and support good decision-making by the board

The Board has overall responsibility to shareholders for the success of the Group and has established an Audit Committee, Remuneration Committee, Nominations Committee, Technical Committee, Ethics Committee and Disclosure Committee, all of which have formally delegated duties and responsibilities. The Audit Committee meets at least twice a year and has responsibility for, amongst other things, planning and reviewing the annual report and accounts and interim statements involving, where appropriate, the external auditors.

The Audit Committee also approves external auditors’ fees and ensures the auditors’ independence as well as focusing on compliance with legal requirements and accountings standards. It is also responsible for ensure that effective systems of internal controls are maintained. The ultimate responsibility for reviewing and approving the annual financial statements and interim results remains with the Board.

The Remuneration Committee has responsibility for making recommendations to the Board on the compensation of senior executives and determining, within agreed terms of reference, the specific remuneration packages for each of the Executive Directors. It also supervises the Company’s share incentive schemes and sets performance conditions for share options granted under the schemes.

The Nominations Committee has responsibility for reviewing the size and composition of the Board, the appointment of replacement or additional Directors, the monitoring of compliance with applicable laws, regulations and corporate governance guidance and making appropriate recommendations to the Board.

The Technical Committee has responsibility for reviewing the technical risks associated with the Group’s portfolio of assets, including assets which the Group may consider acquiring. It supervises senior management in its management of these risks and reports directly back to the Board.

The Group’s strategy and business model, and any amendments, are developed by the Chief Executive Officer and his senior management team, and are approved by the Board. The management team, led by the Chief Executive Officer, is responsible for implementing the strategy and managing the business at an operational level on the day-to-day basis. The Group has a detailed Delegated Authority Matrix which is reviewed by, and approved by, the Board on at least an annual basis, or more frequently as may be required. The Delegated Authority Matrix provides an overview of the thresholds of approval that senior management and the subcommittees of the Board can operate to. It is intended to ensure that the day-to-day operation of the business can operate in accordance with Board approved budgets while ensuring that any deviations are appropriately escalated. The Board will review its governance framework as is necessary in line with the growth of the company.

  1. Communicate how the company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders

 SIMEC Atlantis Energy places a high priority on regular communications with its various stakeholder groups and aims to ensure that all communications concerning the Company’s activities are clear, fair and accurate. Our website is regularly updated and announcements or details of presentations and events are posted onto the website.

As detailed above, the Company intends to disclose the outcomes of all shareholder votes in a clear and transparent manner going forward.