Corporate Governance

The Directors of Highland Gold Mining support the principles of good governance and have implemented, where practicable for a company of this size and nature, the many and main provisions of the principles of good governance and codes of best practice under the QCA Corporate Governance Code issued by the Quoted Companies Alliance (www.theqca.com) in April 2018.

The Board of Directors is led by the Chairman, who sets the Company’s direction and ensures that the Board and management are working towards common goals and adhering to best practices. The Board regularly reviews key business risks, via a number of properly constituted committees, in addition to the financial risks facing the Group in the operations of its business. These committees include the Audit Committee, the Health & Safety Committee, and the Remuneration & Nomination Committee.

An Anti-Corruption Policy and an Internal Code of Business Conduct and Ethics have been adopted by the Board. The Company is also subject to The Takeover Code.

 

Corporate Governance Statement

In accordance with Rule 26 of the AIM Rules for Companies, as issued by the London Stock Exchange (LSE), Highland Gold publishes a Corporate Governance Statement that outlines the principles of the QCA Code and explains how the Company complies with each of these principles.

The statement is available for download here.

 

The Board

The Board currently has six directors – an executive chairman, four non-executive directors, and one executive director.

The Board has determined and formalised matters reserved for its consideration and where appropriate have delegated certain matters under a chart of authority to Board appointed committees. The Board meets on a regular basis to review the performance and the business of the Group, ensure that funding needs are appropriate and consider development and acquisition opportunities. The Directors have full access to the Company Secretary and independent professional advice at the Company's expense. The Company has in place appropriate insurance cover in respect of any legal action against its Directors and Officers.

The Directors undertake a self assessment review of the Board and Committees from time to time.

It is a requirement that all Directors retire by rotation at least every three years and new appointments are elected at the earliest opportunity.

 

Audit Committee

The Audit Committee consists of three Directors and is chaired by Dunan Baxter. The Audit Committee meets three times a year to consider the annual and interim financial statements, the audit programme, the Anti-Corruption policy and an Internal Code of Business Conduct and Ethics. Management is invited to attend meetings as appropriate. There are defined Terms of Reference for the Audit Committee which are reviewed by the Board on an annual basis. The Committee is responsible for ensuring that the appropriate financial reporting procedures are properly maintained and reported upon, reviewing accounting policies, meeting the auditors and reviewing their reports relating to the accounts and internal control systems. The Audit Committee also considers budgets and has agreed an authorisation and expenditure policy. The Audit Committee is responsible for monitoring key risks and has implemented, through the internal audit department, a process for reporting on and monitoring those risks. Audit Committee members meet with management and the auditors on a regular basis.

Internal Audit Charter

 

Remuneration and Nomination Committee

The Committee consists of three Directors and chaired by Duncan Baxter. It is responsible for reviewing the performance of executive management and, where appropriate, other senior executives, and for determining their appropriate levels of remuneration. Recommendations are made, as and when appropriate, with regard to appointments in respect of Directors, the Chairmanship of Committees, senior management and directors of Group subsidiary companies; the composition of the Board is monitored on an ongoing basis. The Committee makes recommendations to the Board, within defined terms of reference, which the Board reviews at least annually. The Committee also examines fees in relation to non-executive remuneration and committee Chairmen.

 

Health, Safety and Environmental Committee

The Board has established a Health, Safety and Environmental Committee which is chaired by Olga Pokrovskaya. The Committee considers, in conjunction with management, development and training requirements and regulatory compliance matters related to health, safety and environmental issues. The Committee makes recommendations to the Board, within agreed terms of reference, which the Board reviews at least annually.

 

Other Committees

In addition, the Group’s in-country management company in Russia, Russdragmet LLC ("RDM") has established a risk and control platform through the:

 

Executive Committee

The Executive Committee meets weekly. The members include management of RDM functional departments and the General Directors of the mine sites. It is chaired by the Chief Executive Officer. Its role is to ensure the implementation of decisions taken by the Group boards and committees, to manage the day to day operational activities and to make recommendations to the Board. It delegates part of its duties to three internal RDM committees; the Risk Committee; Budget Committee and Investment Committee.

 

Internal Controls

The Directors have overall responsibility for the Group's internal control and effectiveness in safeguarding the assets of the Group. Internal control systems are designed to reflect the particular type of business, operations and safety risks, and to identify and manage these risks, but not all risks to which the business is exposed. As a result internal controls can only provide a reasonable, but not absolute, assurance against material misstatements or loss. The processes used by the Board to review the effectiveness of the internal controls are through the Audit Committee, internal audit function and the executive management reporting to the Board on a regular basis where business plans, budgets and authorisation limits for the approval of significant expenditure, including investments are appraised and agreed. The Board also seeks to ensure that there is a proper organisational and management structure with clear responsibilities, accountability and succession plans. The Board also engages independent professional advice on risk assessment matters. It is the Board's policy to ensure that the management structure and the quality and integrity of the personnel are compatible with the requirements of the group.