AIM rule 26 factsheet
Velocys plc is listed on the Alternative Investment Market (AIM) of the London Stock Exchange. AIM Rule 26 requires that the company makes available on the website key facts about the company, its management, its business and its stock. Where this information is not provided elsewhere in the website it can be found below.
Chairman, Philip Holland
Chief Executive Officer, Henrik Wareborn
Chief Financial Officer, Andrew Morris
Senior Independent Director, Sandy Shaw
Non-Executive Director, Darran Messem
The directors recognise the value and importance of good corporate governance, and are committed to drawing upon best practice and maintaining high standards. Further to the amendment to AIM Rule 26 with effect 28 September 2018, the Board has determined to follow the QCA Code, published by the Quoted Companies Alliance, which sets out a minimum best practice standard for small and mid-size quoted companies, particularly AIM companies.
The following information is provided to describe how the Company applies the principles in the QCA Code and explain any departures from the specific provisions of that code. The date of the latest review was 5 August 2020.
The QCA’s Ten Principles of Corporate Governance
The ten principles of corporate governance set out under three headings in the QCA Code – Deliver Growth, Maintain a Dynamic Management Framework, and Build Trust – and applied by the Company are as follows:
1. Establish a strategy and business model which promote long-term value for shareholders.
The Board is responsible to shareholders for setting the Company’s strategy and overseeing its execution, and for the overall management, control and performance of Velocys’ business. Velocys’ strategy and business model can be found in the Chairman’s and CEO’s reports on pages 6 to 9 of the 2019 Report & Accounts.
2. Seek to understand and meet shareholder needs and expectations.
The Board considers effective communication with shareholders to be very important, and encourages regular dialogue with investors.
At the Company’s Annual General Meeting, the Chairman and Chief Executive Officer are available before and after the meeting for further discussions with shareholders. The Chief Executive Officer and the Chief Financial Officer attend meetings with shareholders and analysts on various occasions during the year, primarily following the Company’s Annual Results and Interim Results announcements. Relevant feedback from shareholder discussions is advised to the Board. Other members of the Board including the Chairman and the Chair of the Remuneration Committee have also either met or consulted with shareholders from time to time. The Board considers that their policy on shareholder engagement has resulted in the considerable support demonstrated by major shareholders since the Company was originally admitted to AIM in 2006.
The Board responds promptly to questions received, which may be sent to firstname.lastname@example.org.
3. Take into account wider stakeholder and social responsibilities and their implications for long-term success.
Velocys is committed to being a good employer and endeavours to train staff well, to pay them fair market value and to maintain a safe environment in which they can work. We are also committed to equal opportunities for all our employees. In addition, as an advanced fuels company, we have a duty to limit the environmental impact of our own operations, and are careful to monitor and improve their environmental impact. Further information on our corporate social responsibility and KPI’s can be found on page 10 of the 2019 Report & Accounts.
There is an ongoing dialogue with our technology partners, customers, suppliers and other stakeholders which is continuously fed back into our knowledge base in relation to projects under development and, where relevant, integrated into the Company’s strategy and business model.
4. Embed effective risk management, considering both opportunities and threats, throughout the organisation.
The Company employs directors and senior personnel with the appropriate knowledge and experience for a business active in its field of operations, and undertakes regular risk assessments and reviews of its activities.
The Audit & Risk Committee reviews all of the Company’s principal risk management policies and the ongoing development of a Company risk register. Further information on Risk Management can be found on page 12 of the 2019 Report & Accounts. This is discussed with, amended if required and adopted by the Board at least annually.
The principal risks and uncertainties that are considered to have a potentially material impact on the Company’s long-term performance and delivery of its strategy are set out on pages 12 to 17 of the 2019 Report & Accounts.
Maintain a Dynamic Management Framework
5. Maintain the board as a well-functioning, balanced team led by the chair.
The Board comprises a Chairman and two part-time non-executive Directors with relevant experience to complement the two full time executive directors and to provide an independent view to the executive directors. Details of the Board can be found here. A time commitment of up to 4 days a month is expected of the non-executive directors. Further information on the number of meetings of the Board and the committees and the attendance record of each director can be found on page 21 of the 2019 Report & Accounts.
At the time of Philip Holland’s appointment as Chairman, he met the independence criteria set out in the UK Corporate Governance Code. Thereafter the test of independence is not appropriate in relation to the chairman. The Board regards each of the other non-executive directors as being fully independent.
The roles of the Chairman and the Chief Executive Officer are separated, with clear written guidance to support the division of responsibilities. The role of the Senior Independent Director is also clearly set out.
The Chairman is principally responsible for leadership and effectiveness of the Board, for corporate governance matters, setting the Board agenda, ensuring adequacy of information flow to the Board, that due consideration is given to strategic issues, and promoting a culture of openness of debate at Board level, and between directors and the Executive Committee. The Chief Executive Officer is primarily responsible for the management of the business and implementation of the Company’s strategy and policies, maintaining a close working relationship with the Chairman, and leading the Executive Committee. Sandy Shaw was appointed Senior Independent Director on 10 December 2019, in place of Philip Holland.
6. Ensure that between them the directors have the necessary up-to-date experience, skills and capabilities.
The Board includes individuals with a deep knowledge of markets worldwide and relationships at the highest level of industry. The Board believes that, as a whole, it contains the necessary mix of experience, skills, personal qualities (including gender balance) and capabilities to deliver the strategy of the Company for the benefit of the shareholders over the medium to long term. This is an area which is maintained under constant review. Full details of the directors and their relevant skills are set out page 22 of the 2019 Report & Accounts.
Internal Advisory Responsibilities
The Company Secretary, through the Chairman, is responsible for advising the Board on governance matters, and for ensuring that Board procedures are followed and that the Company complies with applicable rules and regulations. All directors have access to the advice and services of the Company Secretary. An agreed procedure exists for directors in the furtherance of their duties to take independent professional advice. During 2019, no director sought independent legal advice pursuant to the policy.
The Company regularly reviews the ongoing training requirements of directors as part of the annual board evaluation process. Directors keep their personal skillsets up to date through a combination of industry contact, reading of relevant material and, where appropriate, training courses.
There is a process for ensuring that any new director receives advice, including from the Company’s nominated adviser and external lawyers where appropriate, on his/her responsibilities as a director of an AIM company. The Board ensures that any new appointee benefits from a full induction programme.
7. Evaluate board performance based on clear and relevant objectives, seeking continuous improvement.
An annual evaluation of the Board and its committees is carried out by the Company Secretary, taking the form of comprehensive questionnaires which provide all directors with an opportunity to score (1=Dissatisfied; 5= Satisfied) their opinion on a series of questions in relation to inter alia the constitution, execution and performance of the Board and the three committees, and to comment on procedures or any relevant matters. Average scores for each question are measured against the relevant score in the previous two years to help identify trends, and are also assessed in absolute terms. Written comments, on an unattributed basis, are assimilated into a written report.
A performance evaluation of the Chairman is carried out, led by the Company Secretary, and takes into account the views of all directors. As in previous years, the results of the evaluation are considered by the Board and each committee in open session and, where appropriate, actions arising from such reviews are implemented. Actions have resulted in continued improvements to timing and quality of management information; the provision to the Board of more detailed information on individual projects, including the visit by the Board to Plain City, Ohio to meet the technical team there and receive presentations from senior management; and improvements to the structure and workings of committees.
Succession planning at Board and Committee level is formally reviewed on an annual basis. During 2019, the Board reviewed its succession plan for all Board members and senior management. In accordance with best practice, all directors are proposed for re-appointment at the Annual General Meeting, and due consideration is given by the Nomination Committee as to whether individual directors are recommended for re-election.
8. Promote a corporate culture that is based on ethical values and behaviours.
The Board believes that the business culture is consistent with the Company’s objectives, strategy and business model as set out in the strategic report and the description of principal risks and uncertainties.
The Board ensures that the Company has the means to determine that ethical values and behaviours are recognised and respected through the adoption of appropriate policies, including an Anti-corruption and bribery policy ; a Whistle-blowing policy; and a Policy on Equal Employment Opportunity and Diversity
In addition, in response to the Market Abuse Regulations (“MAR”) which came into force on 3 July 2016, and which apply to AIM companies, the Company has adopted a Share Dealing Policy and Dealing Code which apply to all directors and employees of the Company.
9. Maintain governance structures and processes that are fit for purpose and support good decision-making by the board.
The Board meets at least six times a year with a formal schedule of matters reserved for its decision. The Board has also established a schedule of delegated authorities, which are reviewed to ensure they are commensurate with the level of the Company’s development. The governance structure in place is considered to be appropriate for the foreseeable future, but will be evolved in line with the Company’s plans for growth.
The minutes of the Audit & Risk, Remuneration and Nomination & Governance Committees are circulated to the Board. The Committee chairs also report to the Board on the outcome of committee meetings at the subsequent Board meeting. The Committees have the following roles:
Audit & Risk Committee
The members of the Audit & Risk Committee with effect 10 December 2019 are Darran Messem (chairman) and Sandy Shaw. Meetings are held not less than four times a year, and are based on the work programme set out in the 2019 Audit Committee Guide published by the QCA.
Under its Terms of Reference, which can be found here, the Audit & Risk Committee reviews inter alia the Company’s audit planning, risk management systems and processes and effectiveness of internal controls, accounting policies and financial reporting, provides a forum through which the external auditors report, and reviews and monitors their independence and the provision of additional services. At least once a year it meets with the external auditors without executive directors present.
The Company prepares detailed budget and working capital projections, which are approved annually by the Board and are maintained and updated regularly throughout the year. Detailed management accounts and working capital cash flows are prepared on a monthly basis and compared to budgets and projections to identify any significant variances.
The Audit & Risk Committee has considered the integrity of the Company’s 2019 financial statements and reviewed the appropriateness of its critical accounting policies and the judgements made in applying them. The year-end financial statements were reviewed and discussed with PricewaterhouseCoopers LLP. In addition, the interim financial statements were reviewed by the committee. The committee considered, among others, the following specific matters:
- Going concern
- Valuation of assets (consolidated company) and investment in subsidiaries (Velocys Plc)
The Audit & Risk Committee has discussed PricewaterhouseCoopers LLP’s audit process and has reviewed the findings from the audit of the 2019 financial year as well as the effectiveness of the external audit process. The committee reviewed the quality and cost effectiveness of the external audit, and the independence and objectivity of the auditors. It obtained confirmation from PricewaterhouseCoopers LLP that their independence and ethics policies complied with FRC requirements, and that they remain independent and maintain internal safeguards to ensure their objectivity. No contractual obligations exist that restrict the Company’s choice of external auditor and the committee is satisfied that the external auditor remains independent.
The committee has established policies determining the non-audit services that the external auditors can provide and the procedures required for approval of any such engagement. Further details of fees paid to PricewaterhouseCoopers LLP for both audit and non-audit work can be found in note 11 to the 2019 Report & Accounts.
The members of the Remuneration Committee with effect 10 December 2019 are Sandy Shaw (Chair) and Darran Messem. Meetings of the Committee take place not less than three times a year. Due regard is paid to the Investment Association Principles of Remuneration.
The committee reviews, inter-alia, the performance of executive directors and senior managers, setting the scale and structure of their remuneration and the basis of their service agreements, having due regard to the interests of shareholders. The committee also determines the allocation of share options to executive directors and senior managers. No executive director has a service agreement exceeding one year. The remuneration of the non-executive directors is a matter for the Chairman and the Company’s executive directors. Under its Terms of Reference, which can be found here, no director is permitted to participate in decisions concerning his or her own remuneration.
Nomination & Governance Committee
The members of the Nomination & Governance Committee are Philip Holland (Chairman), Sandy Shaw and Darran Messem. The committee met once in 2019. Among its duties it reviews the composition of the Board and its succession planning, the Board evaluation process and the findings from recent evaluations, director performance and recommendations for re-elections at the AGM, and considerations of director independence under the corporate governance code. The Terms of Reference can be found here.
10. Communicate how the company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders.
The Board considers effective communication with shareholders to be very important, and encourages regular dialogue with investors. Directors regularly attend meetings with shareholders and analysts throughout the year, and the Board responds promptly to questions received. Shareholders will be given at least 21 days’ notice of the Annual General Meeting, at which they have the opportunity to raise questions of the Board on the Company’s developments and performance. Further information is shown under QCA Principle 2 above.
Special arrangements will be made in respect of the 2020 Annual General Meeting in light of the COVID-19 emergency. Details of the arrangements for the 2020 Annual General Meeting are set out in the Company’s notice of 2020 AGM which can be found here.
Copies of the Annual Report and Financial Statements are issued to all shareholders and copies are available on the Company’s website www.velocys.com, which provides information to shareholders and other interested parties. The website contains full details of the Company’s business activities, press releases and links to the London Stock Exchange website for share price information, share trading activities and graphs, as well as Regulatory News Service (RNS) announcements. The Company Secretary also deals with shareholder correspondence, and may be contacted at email@example.com.
Velocys plc (Registered in England No. 5712187 with registered office at Magdalen Centre, Robert Robinson Avenue, The Oxford Science Park, Oxford, OX4 4GA, UK) trades through its subsidiaries Velocys, Inc. and YellowRock GTL Services, LLC, 7950 Corporate Blvd, Plain City, Ohio 43064, USA (Registered in the State of Delaware, USA) and Velocys Technologies Ltd (Registered in England No. 5258554 with registered office at Magdalen Centre, Robert Robinson Avenue, The Oxford Science Park, Oxford, OX4 4GA, UK).
The countries of operation are the United Kingdom and the United States.
Follow the link to the company’s Articles of Association. The Company is subject to the UK City Code on Takeovers and Mergers.
As at 1 November 2020 there were in issue 1,064,156,057 shares of Velocys plc, none of which is held in treasury.
At the time of the last analysis of our share register on 16 July 2020, approximately 31.9% of our shares were classed as being not in public hands since these are held either by shareholders who own more than 10% of the Company or by Company directors.
Shareholders owning more than 3% of the Company at 31 August 2020 were as follows:
Lansdowne Partners (18.5%)
Ervington Investments Limited (12.9%)
Ruffer LLP (8.3%)
Hargreaves Lansdown PLC (9.8%)
Amati AIM VCT plc (5.3%)
There are no restrictions on the transfer of VLS securities.
The interim results for the period ending 30 June 2020 were reported on 17 September 2020. Follow the link to these and previous reports. Our 2019 final results were announced on 6 August 2020. Our Headline Financial Results were announced on 19 June 2020.
Follow the link to our RNS announcements.
Our registrar is Link Market Services Limited, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU.
Our nomad and joint broker is Numis Securities Ltd, The LSE Building, 10 Paternoster Square, London EC4M 7LT. Canaccord Genuity Ltd, 88 Wood Street, London, EC2V 7QR also act as joint brokers.
Our auditor is PricewaterhouseCoopers LLP, 3 Forbury Place, 23 Forbury Rd, Reading RG1 3JH.
Our banker is Barclays Bank Plc, PO Box 858, Wytham Court, 11 West Way, Oxford OX2 0JB.
This fact sheet was last updated on 2 November 2020.