ESG

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Our approach to ESG is underpinned by our mission...

We look to achieve this mission by focusing on the development of grid scale renewable energy projects in the southern African region, predominantly using solar and battery storage solutions.

We aim to proactively identify and assess environmental, social and governance impacts and opportunities as we develop our projects and then apply a rigorous approach to risk management and mitigation. Our goal is to ensure we have the correct frameworks and policies in place to mitigate risk, maximise our positive impacts, minimise any potentially negative impacts of our operations and leverage opportunities for the benefit of our stakeholders.

Our approach to ESG management will develop as the Company continues to grow, but at its heart, we seek to integrate ESG considerations into our overall strategic decision-making processes.

Having transitioned our business model to concentrate on renewable energy projects, we have conducted an ESG review. This has identified focus areas for us to concentrate on as part of a long-term ESG action plan.

to develop innovative power supply solutions for affordable and reliable electricity in Africa, utilising the latest sustainable technologies.

Environment

Supporting the green energy transition

As a renewable energy developer, we have an important role to play in advancing the global transition to clean energy sources. Robust environmental management and compliance are fundamental to the way we operate, and we aim to minimise the environmental impact of our activities. This involves a responsible approach to emissions, water management, energy use, waste management and biodiversity.

As noted by the United Nations, the transition towards renewables such as solar energy is critical part of meeting the goals of the Paris Agreement, which aims to limit the rise of global average temperatures to well below 2 degrees Celsius, and ideally below 1.5 degrees Celsius above pre-industrial levels. Investment in reliable, affordable and clean energy systems are crucial to the success of the global transition.

According to the IEA, solar photo voltaic is becoming the lowest-cost option for new electricity generation in most of the world. Our flagship Tete Solar Project continues to make rapid progress and will support Mozambique’s ambition to be a regional leader in green energy transition.

In line with our environmental commitments, we have instigated a process to identify a suitable organisation who can take the lead on further developing, financing and mining the Company’s thermal assets. This will enable us to focus on the development of grid scale renewable energy projects in the southern African region.

Social

Providing access to affordable, efficient, reliable and clean energy

We are committed to providing affordable, efficient and reliable access to renewable energy. In doing so, we also aim to carry out our business in a socially responsible manner, with a focus on health and safety, respect for our employees and local communities. We aim to be part of a responsible and ethical supply chain and look to contribute to the sustainable development of the region in which we operate. We recognise the importance of maintaining strong and constructive stakeholder engagement and work to ensure open lines of communication.

The provision of affordable renewable energy is a critical way of supporting local communities and economies and ensuring a just transition. Given the high levels of poverty, particularly in rural areas where the Tete Solar Project is located, we believe there is a real opportunity to make positive contribution through our projects.

Our Tete Solar Project is aligned with the Mozambiquan Government’s objective to become a champion for energy transition impacting all of Southern Africa. Our project supports Mozambique’s energy strategy of achieving universal electricity access by 2030. According to the World Bank, only 30% of the Mozambican population had access to energy in 2017. Our project would provide reliable and available power helping to close the infrastructure gap of the region and serving as a catalyst for economic development.

Governance

Committed to strong corporate governance and business ethics

Solgenics is committed to maintaining the highest standards of corporate governance throughout its operations and to ensuring that all of its practices are conducted transparently, ethically and efficiently. The Board has elected to adopt the QCA Corporate Governance Code and carefully applies the ten principles to deliver value and growth to its stakeholders in the medium to long term. How we apply these principles is provided in more detail below.

The Company has an Anti-Corruption and Bribery Policy which applies to all individuals working in the Group as well as consultants, contractors and temporary staff. The policy sets out our stance with regards to conducting business in an honest and ethical manner.

We take a zero-tolerance approach to bribery and corruption and are committed to acting professionally, fairly and with integrity in all our business dealings and relationships wherever we operate, implementing and enforcing effective systems to counter bribery.

Principle 2: Seek to understand and meet shareholder needs and expectations

The Company remains committed to maintaining an open dialogue with its shareholders to ensure that its strategy, business model and performance are clearly understood. Understanding what analysts and investors think about the Company, and in turn, helping these audiences understand its business, is a key part of driving the business forward and understanding current or potential shareholders expectations for the Company. We seek to engage with these market participants through investor roadshows, attending investor conferences, regular reporting, social media and traditional media routes.

Additionally, the Company's annual report which is sent to all registered shareholders and holders of depositary interests, contains extensive information about the Company’s activities. Enquiries from individual shareholders on matters relating to their shareholdings and the business of the Company are welcomed.

The Annual General Meeting is a key forum for communication with shareholders. The notice of meeting and annual report are sent out to all registered shareholders and holders of depositary interests at least 21 days before the meeting. Shareholders are encouraged to attend the Annual General Meeting to discuss the progress of the Company.

Principle 3: Take into account wider stakeholder and social responsibilities and their implications for long-term success.

Communication with stakeholders

The Company will communicate with shareholders and the market generally using a Regulatory Information Service provider for regulatory news releases which, in accordance with AIM Rule 26, will be available on the Company’s website along with interim and annual accounts, shareholder notifications and other corporate governance material for at least the last five years. Shareholder votes will be notified and kept on the website in a clear and transparent manner.

In addition to shareholders, the Company recognises the different stakeholder groups, both internal and external, on which the business relies and has established structures to communicate and receive feedback from these various groups.

In the case of internal stakeholders and due to the relatively small size of the Company’s operations, the Directors and senior management are closely involved in the day-to day running of the business and are therefore in continued close dialogue with the Company’s finance function, financial advisers and Mozambican operations.

In the case of external stakeholders, the Company retains ongoing dialogue with the relevant government authorities in Mozambique, where the Company’s operations are currently based.

Social Responsibility

Good corporate citizenship is integral to the way the Company operates. Environment, social, health and safety responsibilities are a priority for the Company in all aspects of its business.

The Company’s environmental social governance (“ESG”) policy has been designed to promote social development projects that facilitate sustainable development and focus on community involvement. The Company adheres to the Equator Principles, the IFC performance standards and to Mozambican legislative requirements.

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Principle 4: Embed effective risk management, considering both opportunities and threats, throughout the organisation

Risk management

The Company adopts a risk approach appropriate to the business activities being conducted and the Board retain responsibility for regularly reviewing risk management strategies. Risks and uncertainties for the business are classified in two main categories, Financial and Operational, and the Board constantly monitors the operational and financial aspects of the Company’s activities and is responsible for the implementation of policies and on-going review of business risks that could affect the Company. Duties in relation to risk management that are conducted by the Directors include but are not limited to:

Initiate action to prevent or reduce the adverse effects of risk;
Control further treatment of risks until the level of risk becomes acceptable;
Identify and record any problems relating to the management of risk;
Initiate, recommend or provide solutions through designated channels;
Verify the implementation of solutions;
Communicate and consult internally and externally as appropriate; and
Inform investors of material changes to the Company’s risk profile.

The monitored risk categories and the main policies for their control can be found in the Risk Factors section of the Company’s Annual Report and Accounts.

Ongoing review of the overall risk management programme is conducted by external parties where appropriate. The Board ensures that recommendations made by the external parties are investigated and, where considered necessary, appropriate action is taken to ensure that the Company has an appropriate internal control environment in place to manage the key risks identified.

Financial control

The Audit Committee which consists of all Board members and Michael Haworth is the Chairman. The Audit Committee provides a forum for reporting by the Company’s external auditors and is responsible for reviewing a wide range of financial matters including monitoring the controls which ensure the integrity of the financial information reported to the shareholders.

The Board is responsible for establishing and maintaining the Group’s system of internal financial controls. Internal financial control systems are designed to meet the particular needs of the Group and the risk to which it is exposed, and by its very nature can provide reasonable, but not absolute, assurance against material misstatement or loss.

The Directors are conscious of the need to keep effective internal financial control, particularly in view of the cash resources of the Group. Due to the relatively small size of the Group’s operations, the Directors and senior management are very closely involved in the day-to-day running of the business and as such have less need for a detailed formal system of internal financial control. The Directors have reviewed the effectiveness of the procedures presently in place and consider that they are still appropriate to the nature and scale of the operations of the Group.

Principle 5: Maintaining the Board as a well-functioning, balanced team led by the Chair.

The Board is responsible for promoting the success of the Company by directing and supervising the Company’s affairs and formulating, reviewing and approving the Company’s strategy, budgets and corporate actions.

As at the date of this statement, the Board comprises a Non-Executive Chairman, (Michael Haworth), two Non-Executive Directors (Aman Sachdeva, Scott Fletcher) and one Executive Director (Hanno Pengilly) each member possessing a complementary skillset. Hanno Pengilly also acts as CEO.

Under the UK Corporate Governance Code, (excluding the Chairman) Aman Sachdeva and Scott Fletcher would not be viewed as independent by virtue of the shares and options that they hold in the Company and due to Aman Sachdeva's role as CEO of Synergy Consulting (which provides consultancy services to the Company). However, the Directors believe that independence is not a state of mind that can be measured objectively and, given the character, judgement and decision making process of the individuals concerned, the Directors believe that Aman Sachdeva and Scott Fletcher can be considered independent.

The Company review the independence of the Directors annually and all new appointments will be made after consideration of the independence of the Company's Director.

All Directors retire by rotation at regular intervals in accordance with the Company’s Articles of Association. The Company’s Articles of Association require that one-third of the Directors must stand for re-election by shareholders annually in rotation; that all Directors must stand for re-election at least once every three years; and that any new Directors appointed during the year must stand for election at the AGM immediately following their appointment.

The Board currently fulfils the responsibilities that might otherwise be assumed by a nominations committee and therefore the Directors have responsibility to ensure that the Board is a well-functioning and balanced team.

The Company has established a Remuneration Committee of the Board with formally delegated duties and responsibilities. As at the date of this statement, Michael Haworth, Scott Fletcher and Aman Sachdeva comprised the Remuneration Committee with Scott Fletcher as Chairman. The Remuneration Committee is responsible for making recommendations to the Board, within agreed terms of reference. The Board determines the remuneration of Non-Executive Directors within the limits set by the Company’s Articles of Association.

Principle 6: Ensure that between them the Directors have the necessary up-to-date experience, skills and capabilities

The Board is satisfied that, between the Directors, it has an effective and appropriate balance of skills and experience, including in the areas of natural resources, infrastructure and finance. For details of the Directors past experience, please refer to ‘Director’s Biographies’ section of the Company’s Annual Report and Accounts.

All Directors receive regular and timely information on the Group’s operational and financial performance. Relevant information is circulated to the Directors in advance of meetings. As explained above, due to the relatively small size of the Group’s operations, Directors and senior management are very closely involved in the day-to-day running of the business and as such have less need for a detailed formal system of financial reporting.

An agreed procedure exists for Directors in the furtherance of their duties to take independent professional advice. With the prior approval of the Non-Executive Chairman, all Directors have the right to seek independent legal and other professional advice at the Company’s expense concerning any aspect of the Company's operations or undertakings in order to fulfil their duties and responsibilities as Directors. If the Non-Executive Chairman is unable or unwilling to give approval, Board approval will be sufficient. Directors are made aware of certain of their regulatory responsibilities, and in particular with regard to the AIM Rules for Companies, through an annual presentation made by the Company's Nomad. New appointed Directors are provided with this presentation in advance of the resumption of their duties.

Principle 7: Evaluate Board performance based on clear and relevant objectives, seeking continuous improvement

Since the appointment of Michael Haworth as Non-Executive Chairman, and given that due to the size of operations the Company does not currently have a nominations committee, Mr Haworth has been assessing the individual contributions of each of the members of the team to ensure that:

their contribution is relevant and effective;
that they are committed; and
where relevant, they have maintained their independence.

The Company intends to continue performance reviewing the team as a unit to ensure that members of the board collectively function in an efficient and productive manner.

Principle 8: Promote a culture that is based on ethical values and behaviours

It is the Company’s policy to conduct all of its business in an honest and ethical manner. The Directors believe that the main determinant of whether a business behaves ethically and with integrity is the quality of its people. As the Board currently fulfils the responsibilities that might otherwise be assumed by a nominations committee, the Directors have responsibility for ensuring that individuals employed by the Group demonstrate the highest levels of integrity.

The Board has also instituted a process for reporting and managing any conflicts of interest held by Directors. Under the Company's Articles of Association, the Board has the authority to authorise, to the fullest extent permitted by law:

a) any matter which would otherwise result in a Director infringing his duty to avoid a situation in which he has, or can have, a direct or indirect interest that conflicts, or possibly may conflict, with the interests of the Company and which may reasonably be regarded as likely to give rise to a conflict of interest (including a conflict of interest and duty or conflict of duties); and

b) a Director to accept or continue in any office, employment or position in addition to his office as a Director of the Company and may authorise the manner in which a conflict of interest arising out of such office, employment or position may be dealt with, either before or at the time that such a conflict of interest arises provided that for this purpose the Director in question and any other interested Director are not counted in the quorum at any board meeting at which such matter, or such office, employment or position, is approved and it is agreed to without their voting or would have been agreed to if their votes had not been counted.

The Company takes a zero-tolerance approach to bribery and corruption and is committed to acting professionally, fairly and with integrity in all its business dealings and relationships wherever we operate, implementing and enforcing effective systems to counter bribery.

The Company is committed to upholding all laws relevant to countering bribery and corruption in all the jurisdictions in which we operate and remain bound by the laws of the UK, including the Bribery Act 2010, in respect of their conduct both at home and abroad.

Principle 9: Maintain governance structures and processes that are fit for purpose and support good decision-making by the Board

The Board provides strategic leadership for the group and operates within the scope of a robust corporate governance framework. Its purpose is to ensure the delivery of long-term shareholder value, which involves setting the culture, values and practices that operate throughout the business, and defining the strategic goals that the group implements in its business plans.

Board meetings are held on average every quarter. This may be supplemented by additional meetings on an ad-hoc basis as and when required. Decisions concerning the direction and control of the business are made by the Board.

Generally, the powers and obligations of the Board are governed by the Company’s Memorandum and Articles and the BVI Business Companies Act 2004, as amended and the other laws of the jurisdictions in which it operates. The Board is responsible, inter alia, for setting and monitoring Group strategy, reviewing trading performance, ensuring adequate funding, examining major acquisition opportunities, formulating policy on key issues and reporting to the shareholders.

The Audit Committee

The Audit Committee is responsible for reviewing a wide range of financial matters including the annual accounts, financial statements and accompanying reports before their submission to the Board and monitoring the controls which ensure the integrity of the financial information reported to the shareholders.

The Remuneration Committee

The Remuneration Committee is responsible for making recommendations to the Board, within agreed terms of reference, on the Company’s framework of executive remuneration and its cost. The Remuneration Committee determines the contract terms, remuneration and other benefits for Executive Directors, including performance related bonus schemes, compensation payments and option schemes. The Board itself determines the remuneration of the Non-Executive Directors.

The Board has approved the adoption of the QCA Code as its governance framework against which this statement has been prepared and will monitor the suitability of this code on an annual basis and revise its governance framework as appropriate as the Group continues to evolve.

Principle 10: Communicate how the Company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders

The Company communicates with shareholders through the Annual Report and Accounts, full and half yearly announcements and, where appropriate, one-to-one meetings with larger existing or potential new shareholders. The Company encourages communication with both its institutional and private shareholders and does its best to respond quickly to all queries received.

The Board is kept updated on key stakeholder views through briefings from the Company’s brokers. The analysts’ notes and brokers’ commentary on market sentiment are also reviewed to achieve a wider understanding of investors’ views. The Company has also appointed an investors relations advisory firm Pimlico Advisory Ltd on a consultancy basis.

The Annual General Meeting is a key forum for communication with shareholders. Shareholders are encouraged to attend the Annual General Meeting to discuss the progress of the Company.

Last Updated - March 2023