There is no prescribed corporate governance code for AIM companies and London Stock Exchange prefers to give companies the flexibility to choose from a range of codes which suit their specific stage of development, sector and size.

The Board considers the corporate governance code published by the Quoted Companies Alliance Corporate Governance Code 2018 (“the QCA Code”) is the most suitable code for the Company and has adopted the principles set out in the QCA Code and applies these principles wherever possible, and where appropriate to its size and available resources.

The Chairman, Zhang Qin Fu and Henry Kloepper, Non Executive Director, have overall responsibility for the Corporate Governance of the Company. This Corporate Governance Statement was approved by the Board on 27 September 2018.

The QCA Code sets out ten principles which should be applied. The principles are listed below with an explanation of how the Company applies each principle, and the reasons for any aspect of non-compliance. Where reference is made to the Annual Report, it is a reference to the latest annual report which can be viewed at the following link:

http://www.altonaenergy.com/investor_company.php

Principle One: Establish a strategy and business model which promote long-term value for shareholders.

The Company has a clearly defined strategy and business model that is designed to promote long-term value for its shareholders. This strategy is a combination of extracting value from its long term coal assets and developing opportunities in the sustainable energy sector.

Principle Two: Seek to understand and meet shareholder needs and expectations.

All shareholders are encouraged to attend the Company’s Annual General Meetings where they can meet and directly communicate with the Board. After the close of business at the Annual General Meeting, the Chief Executive Officer opens the floor to questions from shareholders.

Shareholders are also welcome to contact the Company with any specific queries.

The Company also provides regulatory news through the Regulatory News Service (RNS). In addition, other financial and business news updates are provided through various media channels such as Twitter. Shareholders also have access to information through the Company’s website, www.altonaenergy.com, which is updated on a regular basis. Contact details are also provided on the website.

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

The Board takes regular account of the significance of social, environmental and ethical matters affecting the business of the Group. At this stage in the Group’s development, the Board has not adopted a specific written policy on Corporate Social Responsibility as it has a limited pool of stakeholders other than its shareholders. Rather, the Board seeks to protect the interests of the Group’s stakeholders through individual policies and through ethical and transparent actions. The Company engages positively with regulatory authorities and stakeholders in its project locations and encourages feedback through this engagement. Through this process the Company identifies the key resources and fosters the relationships on which the business relies.

Principle Four: Embed effective risk management, considering both opportunities and threats, throughout the organisation.

The Board regularly reviews the risks to which the Group is exposed and ensures through its meetings and regular reporting that these risks are minimised as far as possible whilst recognising that its business opportunities carry an inherently high level of risk. The principal risks and uncertainties facing the Group at this stage in its development and in the foreseeable future are detailed on pages 6 and 7 of the Annual Report together with risk mitigation strategies employed by the Board.

Principle Five: Maintain the board as a well-functioning, balanced team led by the chair.

The Board’s role is to agree the Group’s long-term direction and strategy and monitor achievement of its business objectives. The Board meets for these purposes as and when required with a minimum of four meetings per year. The Board receives reports for consideration on all significant strategic, operational and financial matters.

The Board is supported by the audit and remuneration committees, details of which can be found on page 19 of the Annual Report.

The Board currently consists of the Chairman (Zhang Qin Fu), Chief Executive Officer (Nicholas Lyth), Operations Director Australia (Phil Sutherland), Non-Executive Director (Ma Chi), Non-Executive Director (Henry Kloepper) and Non-Executive Director (Robert Hales).

The non-executive directors are considered independent of management by the Board and free from any business or other relationship which could materially interfere with the exercise of their independent judgement not withstanding their representation of various shareholder groups.

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

The Board considers the current balance of sector, financial and public market skills and experience which it embodies is appropriate for the current size and stage of development of the Company and that the Board has the skills and experience necessary to execute the Company’s strategy and business plan and discharge its duties effectively. Details of the current Board of Directors’ biographies are set out on the Company’s website at the link below:

http://www.altonaenergy.com/investor_board_manag.php

All Directors have access to the Company Secretary who is responsible for ensuring that Board procedures and applicable rules and regulations are observed.

Principle Seven: Evaluate board performance based on clear and relevant objectives, seeking continuous improvement.

The ultimate measure of the effectiveness of the Board is the Company’s progress against the long term strategy and aims of the business. This progress is reviewed in Board meetings held at least four times a year. The Chairman’s performance is reviewed once a year by the rest of the Board.

Principle Eight: Promote a corporate culture that is based on ethical values and behaviours.

The Board recognises and strives to promote a corporate culture based on strong ethical and moral values. The Group gives full and fair consideration to applications for employment received regardless of age, gender, colour, ethnicity, disability, nationality, religious beliefs, transgender status or sexual orientation. The Board takes account of employees’ interests when making decisions, and suggestions from employees aimed at improving the Group’s performance are welcomed.

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

The Board has overall responsibility for all aspects of the business. The Chairman is responsible for overseeing the running of the Board, ensuring that no individual or group dominates the Board’s decision-making, and that the non-executive directors are properly briefed on all operational and financial matters. The Chairman and Henry Kloepper, Non Executive Director, have overall responsibility for corporate governance matters in the Group. The Chief Executive Officer has the responsibility for implementing the strategy of the Board and managing the day-to-day business activities of the Group. The Company Secretary is responsible for ensuring that Board procedures are followed, and applicable rules and regulations are complied with. Key operational and financial decisions are reserved for the Board on an ad hoc basis where required. The three non-executive directors are responsible for bringing independent and objective judgment to Board decisions. The Board has established Audit and Remuneration Committees with formally delegated duties and responsibilities.

Audit Committee

An Audit Committee, comprising Phillip Sutherland and Nicholas Lyth has been established by the Company. The Audit Committee is chaired by Phillip Sutherland and meets at least two times each year. The Audit Committee reviews the Company's annual and interim financial statements before submission to the Board for approval. The committee also reviews regular reports from management and external auditors on accounting and internal control matters. Where appropriate, the committee monitors the progress of action taken in relation to such matters. The committee also recommends the appointment of, and reviews the fees, of the external auditors.

Remuneration Committee

The Company has in addition established a Remuneration Committee, comprising Phillip Sutherland and Nicholas Lyth. The Remuneration Committee is chaired by Phillip Sutherland. The Committee is responsible for reviewing the performance of the executive Directors and for setting the scale and structure of their remuneration, determining the payment of bonuses, considering the grant of options under any share option scheme and, in particular, the price per share and the application of performance standards which may apply to any such grant, paying due regard to the interests of shareholders as a whole and the performance of the Company.

The Board considers matters of nomination as a whole and does not believe a dedicated Board committee is necessary at this stage.

This Corporate Governance statement will be reviewed at least annually to ensure that the Company’s corporate governance framework evolves in line with the Company’s strategy and business plan.

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

The Company regularly communicates with, and encourages feedback from, its shareholders who are its key stakeholder group. The Company’s website is regularly updated. The Company’s contact details are on the website should stakeholders wish to make enquiries of management.

The Group’s financial reports can be found here:

http://www.altonaenergy.com/investor_company.php

Notices of General Meetings are posted to shareholders and copies for at least the past five years are contained within the Annual Reports, copies of which are available in the Company Documents section of the AIM Rule 26 page of the website at the link below:

http://www.altonaenergy.com/investor_aim_docs.php

The results of voting on all resolutions in future general meetings will be posted to the Company’s website.

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. The Company’s Articles contain such a provision.

 

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