Lekoil Ltd (LEK)

 

Corporate Governance

There is no applicable regime of corporate governance to which directors of a Cayman Islands company must adhere over and above the general fiduciary duties of care, diligence and skill imposed on such directors under Cayman Islands law. The Directors recognise the importance of sound corporate governance commensurate with the size and nature of the Company and the interests of its Shareholders. The Corporate Governance Code does not apply to companies admitted to trading on AIM and there is no formal alternative for AIM companies. The Quoted Companies Alliance has published a corporate governance code for small and mid-sized quoted companies, which includes a standard of minimum best practice for AIM companies, and recommendations for reporting corporate governance matters (the "QCA Codes"). However, the Directors intend to take account of the Corporate Governance Code (and the QCA Code), to the extent they consider it appropriate and having regard to the size, current stage of development and resources of the Company.

The Corporate Governance Code provides that the board of directors of a public company should include a balance of executive and non-executive directors, with independent non-executive directors comprising at least one-half of the board (excluding the Chairman). The Corporate Governance Code states that the board should determine whether a director is independent in character and judgment and whether there are relationships or circumstances which are likely to affect, or could appear to affect, the director's judgment. The Board is comprised of seven directors consisting of two executive Directors and five non-executive Directors. The Board considers that the Non-Executive Directors are independent within the meaning of the Corporate Governance Code. If necessary the Non-Executive Directors will take independent legal advice. Please refer to paragraph 10 of this Part 1 and paragraphs 6 to 9 of Part 6 of this document for more information in relation to each Director.

The Board

The Board will meet regularly and be responsible for strategy, performance, approval of any major capital expenditure and the framework of internal controls. The Board will have a formal schedule of matters specifically reserved to it for decision, including matters relating to major capital expenditure, management structure and appointments, strategic and policy considerations, corporate transactions and finance. The Board will be responsible for establishing and maintaining the Group's system of internal financial controls and importance is placed on maintaining a robust control environment. The key procedures which the Board intends to establish with a view to providing effective internal financial control include the following:

  • the Company will institute a monthly management reporting process to enable the Board to monitor the performance of the Group;
  • the Board will adopt and review a comprehensive annual budget for the Group. Monthly results will be examined against the budget and deviations will be closely monitored by the Board;
  • the Board will be responsible for maintaining and identifying major business risks faced by the Group and for determining the appropriate courses of action to manage those risks; and
  • fully consolidated management information will be prepared on a regular basis, at least half yearly.

The Board recognises, however, that such a system of internal financial control can only provide reasonable, not absolute, assurance against material misstatement or loss. The effectiveness of the system of internal financial control operated by the Group will therefore be subject to regular review by the Board in light of the future growth and development of the Company and adjusted accordingly. To enable the Board to discharge its duties it is intended that all of the Directors will receive timely information in respect of the affairs of the Group.

The audit committee

The audit committee will comprise Samuel Adegboyega, Gregory Eckersley and John van der Welle on Admission. The members will all be independent Non-Executive Directors of the Company. It shall meet not less than three times a year. The audit committee receives and reviews reports from management and from the Company’s auditors relating to the interim and annual accounts and to the internal control procedures in use throughout the Group. It is responsible for ensuring that the financial performance of the Group is properly reported with particular regard to legal requirements, accounting standards and the AIM Rules for Companies. The ultimate responsibility for reviewing and approving the annual report and accounts and the half-yearly reports remains with the Board.

The remuneration committee

The remuneration committee will comprise Samuel Adegboyega, Gregory Eckersley and John van der Welle on Admission. The members will all be independent Non-Executive Directors of the Company. It shall meet not less than twice a year. It is responsible for determining and reviewing the terms and conditions of service (including remuneration) and termination of employment of executive directors and senior employees and the grant of options implemented from time to time. The Directors intend to comply with Rule 21 of the AIM Rules relating to directors’ and applicable employees’ dealings in the Company’s securities. Accordingly, the Company has adopted the Share Dealing Code for directors and applicable employees and the Company will take all reasonable steps to ensure compliance by its directors and applicable employees with the provisions of the AIM Rules relating to dealings in securities.

Corporate Social Responsibility

Company responsibility: LEKOIL is committed to demonstrating leadership in stewardship of the environment, employee health and safety, and social responsibility. The Company seeks to conduct the Company with the highest ethical standards in an overriding effort to make a positive impact in the communities where it operates.

Environmental regulations: Nigeria’s Environmental Impact Assessment Act (“EIAA”) requires every company whose activity or project is likely to have a significant effect on the environment to carry out an impact assessment programme prior to the commencement of the project. The assessment is to be referred to the Federal Ministry of Environment, the regulatory body charged with the responsibility of administering the EIAA, for approval. In addition, the EIAA classifies oil and gas development and construction of off-shore pipelines in excess of 50 km in length among projects that will require environmental impact assessment to be conducted.

Environmental Guidelines and Standards for the Petroleum Industry in Nigeria: The Environmental Guidelines and Standards for the Petroleum Industry in Nigeria (the “Guidelines”) were issued by the Department of Petroleum Resources (DPR). The Guidelines mandate all licence holders or operators in the petroleum industry to adopt a systematic and integrated environmental management plan. They control the quality and quantity of industrial effluents associated with oil drilling activities/operations to ensure that such discharges do not cause any hazard to human health and living organisms. The Guidelines require that a mandatory environmental permit be obtained from the DPR prior to the commencement of seismic and drilling operations in Nigeria. An application for an environmental permit must be accompanied by an EIA report. 

Employee safety: LEKOIL’s highest priority is to ensure the safety, health and well-being of our employees and contractors.  The Company is committed to implementing policies and procedures that will eliminate risks in the workplace. These include operational controls and procedures, proper job training, risk assessment and ongoing monitoring of working conditions.

Company Information

Company Address

Intertrust Corporate Services (Cayman) Limited
190 Elgin Avenue
George Town
Grand Cayman KY1-9005

Ticker SymobolLEK (LSE:LEK)
Country of IncorporationCayman Islands
Company NumberWK-248859
MarketAIM
SectorOil & Gas Producers
Company Websitewww.lekoil.com

Company Advisors

Financial & Nominated Adviser

Strand Hanson Limited
26 Mount Row
London
W1K 3SQ

Broker

Mirabaud Securities LLP
33 Grosvenor Place
London
SW1X 7HY

Solicitors (England)

Dentons UKMEA LLP
1 Fleet Place
London
EC4M 7WS

Solicitors (Nigeria)Banwo & Ighodalo
98 Awolowo Road
Southwest Ikoyi
Lagos 

Solicitors (Namibia)

Ellis Shilengudwa Inc
24 Orban Street
PO Box 3300
Windhoek

Solicitors (Cayman Islands)

Walkers
190 Elgin Avenue
George Town
Grand Cayman
KY1-9001 

Auditors

KPMG Professional Services
KPMG Tower
Bishop Aboyade Cole Street
Victoria Island
Lagos
Nigeria 

Reporting Accountants

BDO LLP
55 Baker Street
London
W1U 7EU 

Financial PR

Tavistock Communications Limited
131 Finsbury Pavement
London
EC2A 1NT

Registrars

Computershare Investor Services (Cayman Islands) Ltd
The R & H Trust Co Ltd
Winward1
Regatta Office Park
West Bay Road
Grand Cayman
KY1-1103