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Sunrise Diamonds plc

Corporate Governance

Companies whose shares trade on AIM are not required to make an annual statement to shareholders regarding compliance with the Combined Code. However, the Board seeks to comply with the principles of the Combined Code in so far as they are appropriate to the Company at this current stage of development.

Role of the Board The Board’s role is to agree the Company’s long term direction and strategy and monitor achievement of its business objectives. The Board meets four times a year for these purposes and holds additional meetings when necessary to transact other business. The Board receives reports for consideration on all significant strategic and operational matters.

The non-executive directors are considered by the Board to be independent of management and free from any business or other relationship, which could materially interfere with the exercise of their independent judgement.

Directors have the facility to take external independent advice in furtherance of their duties at the Company’s expense and have access to the services of the Company Secretary.

The Board delegates certain of its responsibilities to the Audit and Remuneration Committees of the Board. These Committees operate within clearly defined terms of reference.

Audit Committee The Audit Committee, composed entirely of non-executive directors, assists the Board in meeting responsibilities in respect of external financial reporting and internal controls. The Audit Committee also keeps under review the scope and results of the audit. It also considers the cost effectiveness, independence and objectivity of the auditors taking account of any non-audit services provided by them.

Remuneration Committee The Remuneration Committee also comprises the non-executive directors. The Company does not currently remunerate any of the directors other than in a non-executive capacity. Whilst the Chairman, Patrick Cheetham,

does have an executive role, his services are provided under a general service agreement with Tertiary Minerals plc.

The Company issues share warrants to directors and to the staff of Tertiary Minerals plc who are engaged in the management of the activities of the Company. The Company’s policy on the issue of such warrants is that outstanding warrants should not in aggregate exceed 10% of the issued capital of the Company from time to time. Details of directors’ warrants are disclosed in note 17.

Conflicts of Interest The Companies Act 2006 permits directors of public companies to authorise directors’ conflicts and potential conflicts, where appropriate, where the Articles of Association contain a provision to this effect. At the Annual General Meeting being called for 29 January 2010 the directors will propose new Articles of Association with similar appropriate provisions.

Procedures are in place in order to avoid any conflict of interest between the Company and Tertiary Minerals plc, which holds approximately 14% of the Company’s issued share capital. Tertiary Minerals provides management services to Sunrise Diamonds, in the search, evaluation and acquisition of new projects.

Internal Controls & Risk Management The directors are responsible for the Company’s system of internal financial control. Although no system of internal financial control can provide absolute assurance against material misstatement or loss, the Company’s system is

designed to provide reasonable assurance that problems are identified on a timely basis and dealt with appropriately.



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