corporate governance

CORPORATE GOVERNANCE STATEMENT

As an AIM-quoted company, Goldstone Resources Limited (“Goldstone” or the “Company”) and its subsidiaries (together, the “Group”) is required to apply a recognised corporate governance code, demonstrating how the Group complies with such corporate governance code and where it departs from it.

The Directors of the Company have formally taken the decision to apply the QCA Corporate Governance Code (the “QCA Code”). The Board ​follows the principles of the QCA Code, ​save as set out below, which focus on the creation of medium to long-term value for shareholders without stifling the entrepreneurial spirit in which small to medium sized companies, such as Goldstone, have been created. The Company will provide annual updates on its compliance with the QCA Code in its Annual Report.

The Board

The Board comprises five Directors of which one is executive and four are non-executives, including the Chairman, reflecting a blend of different experience and backgrounds. The Board considers Richard Wilkins and Richard Lloyd to be independent non-executives in terms of the QCA guidelines. The Board meets throughout the year and all major decisions are taken by the full Board. The Group’s day-to-day operations are managed by the Executive Director and management. All Directors have access to the Company Secretary and any Director needing independent professional advice in the furtherance of his/her duties may obtain this advice at the expense of the Group.

The Board is satisfied that it has a suitable balance between independence on the one hand, and knowledge of the Company on the other, to enable it to discharge its duties and responsibilities effectively, and that all Directors have adequate time to fill their roles.

Details of the current Directors, their roles and background are set out on the Board and Management page of the Company’s website.

The role of the Chairman is to provide leadership of the Board and ensure its effectiveness on all aspects of its remit to maintain control of the Group. In addition, the Chairman is responsible for the implementation and practice of sound corporate governance. The Chairman is considered independent and has adequate separation from the day-to-day running of the Group.

The role of the Chief Executive Officer is for the strategic development of the Group and for communicating it clearly to the Board and, once approved by the Board, for implementing it. In addition, the Chief Executive Officer is responsible for overseeing the management of the Group and its executive management.

Application of the QCA Code

In the spirit of the QCA Code it is the Board’s job to ensure that the Group is managed for the long-term benefit of all shareholders and other stakeholders with effective and efficient decision-making. Corporate governance is an important part of that job, reducing risk and adding value to the Group. The Board will continue to monitor the governance framework of the Group as it grows.

Goldstone is an exploration and development company that seeks to grow shareholder value through the exploration and development of precious metal projects in West Africa. The Company seeks to promote the long-term value for shareholders by leveraging the technical knowledge and experience of its executive directors and senior management to achieve further significant uplift in its mineral resources and complete the necessary associated technical work.

The Company remains committed to listening to, and communicating openly with, its shareholders to ensure that its strategy, business model and performance are clearly understood. The AGM is a forum for shareholders to engage in dialogue with the Board. The results of the AGM will be published via RNS and on the Company’s website. In addition, the Board organises regular update meetings with both the shareholders and the Company’s brokers. Regular progress reports are also made via RNSs and the point of contact is Emma Priestley, Chief Executive Officer.

Goldstone believes that a successful project is best achieved through maintaining close working relationships with local stakeholders, and this strategy is an important aspect of Goldstone’s exploration initiatives by establishing and maintaining co-operative relationships with local communities, hiring local personnel and using local contractors and suppliers.

Goldstone’s management maintains a close dialogue with local communities and its workforce. Where issues are raised, the Board takes the matters seriously and, where appropriate, steps are taken to ensure that these are integrated into the Company’s strategy.

Careful attention is given to ensure that all exploration activity is performed in an environmentally responsible manner and abides by all relevant mining and environmental acts. Goldstone takes a conscientious role in all of its operations and is aware of its social responsibility and its environmental duty.

Both the engagement with local communities and the performance of all activities in an environmentally and socially responsible way are closely monitored by the Board and ensure that ethical values and behaviours are recognised.

Corporate Governance Committees

The Board has established two committees comprising Non-Executive Directors and Executive Directors.

The composition of the committees is as follows:

Audit
Richard Wilkins
Richard Lloyd
Remuneration
William (Bill) Trew
Emma Priestley
Richard Wilkins
Richard Lloyd

The Audit Committee

The Audit Committee meets twice during the year to review the published financial information, the effectiveness of external audit and internal financial controls including the specific matters set out below.

The terms of reference of the Audit Committee are to assist all the Directors in discharging their individual and collective legal responsibilities and during the meetings to ensure that:

  • The Group’s financial and accounting systems provide accurate and up-to-date information on its current financial position, including all significant issues and going concern;
  • The integrity of the Group’s financial statements and any formal announcements relating to the Group’s financial performance and reviewing significant financial reporting judgments contained therein are monitored;
  • The Group’s published financial statements represent a true and fair reflection of this position; and taken as a whole are balanced and understandable, providing the information necessary for shareholders to assess the Group’s performance, business model and strategy;
  • The external audit is conducted in an independent, objective thorough, efficient and effective manner, through discussions with management and the external auditor; and
  • A recommendation is made to the Board for it to put to shareholders at a general meeting, in relation to the reappointment, appointment and removal of the external auditor and to approve the remuneration and terms of engagement of the external auditor

The audit committee does not consider there is a need for an internal audit function given the size and nature of the Group.

Significant issues considered by the Audit Committee during the year have been the Principal Risks and Uncertainties and their effect on the financial statements. The Audit Committee tracked the Principal Risks and Uncertainties through the year and kept in contact with the Group’s Management, External Service Providers and Advisors and received regular updates. The Audit Committee is satisfied that there has been appropriate focus and challenge on the high-risk areas.

PKF Littlejohn LLP, the current external auditors, has been in office since 2016 which was the last time a tender for the audit took place.

The external auditors are invited to attend the Audit Committee meeting to present their findings and this provides them with a direct line of communication to the Directors.

Remuneration Committee

The terms of reference of the Remuneration Committee are to:

  • recommend to the Board a framework for rewarding senior management, including Executive Directors, bearing in mind the need to attract and retain individuals of the highest calibre and with the appropriate experience to make a significant contribution to the Group; and
  • ensure that the elements of the remuneration package are competitive and help in underpinning the performance-driven culture of the Group.

The Company does not currently have a Nominations Committee, which the Board considers to be appropriate given the Company’s size and nature, but it will continue to monitor the situation as it grows.

Internal control

The Directors acknowledge their responsibility for the Group’s system of internal control, which is designed to ensure adherence to the Group’s policies whilst safeguarding the assets of the Group, in addition to ensuring the completeness and accuracy of the accounting records. Responsibility for implementing a system of internal financial control is delegated to the Executive Director. The essential elements of the Group’s internal financial control procedures involve:

  • Strategic business planning
    Detailed financial projections for the current financial year are prepared and subject to formal review at Board meetings.
  • Performance review
    The Directors aim to monitor the Group’s performance through the preparation of quarterly management accounts and regular reviews of expenditure and projections.

Departure from the QCA Code:

In accordance with the AIM Rules for Companies, Goldstone departs from the QCA Code in the following way:

Principle 7 – “Evaluate board performance based on clear and relevant objectives, seeking continuous improvement.”

Goldstone’s board is small and extremely focussed on implementing the Company’s strategy. The Board will closely monitor the need for formal performance evaluation, in light of Principle 7 of the QCA Code, as the Company develops.

Bill Trew, Non-Executive Chairman