Corporate Governance Principles

Set out below are details of Agriterra’s application of each the ten corporate governance principles set out in the Code.

1. Establish a strategy and business model which promote long-term values for shareholders

Agriterra’s strategy is to operate efficient, profitable businesses in Mozambique to create value for its shareholders and other stakeholders by supplying food products (currently focused on beef and milled maize products) to the local market. Having established more profitable operations in Mozambique, the Company’s longer term strategy is to become one of the largest agri-operators and leading food providers in Southern Africa.

The Company currently has three operational agricultural divisions: Grain (DECA)(Compagri), Beef (Mozbife) and Snacks (DecaSnax).

Agriterra has built strong brands in Mozambique. The Board intends to use these foundations to further grow and diversify its product range in order to gain further market share of the agricultural sector in Mozambique and explore export and investment opportunities in surrounding countries.

The Company’s Board is committed to ensuring that its operations are conducted in compliance with all applicable laws, rules and regulations and industry-leading practices, recognizing that the jurisdiction in which it operates carries an inherently high risk due to its ongoing state of development and periods of political instability. In executing the Company’s strategy and operational plans, the management team will typically confront a range of day-to-day challenges associated with identified and unidentified risks and uncertainties, and will seek to deploy the identified mitigation steps to manage these risks as they manifest themselves.

Agriterra intends to deliver shareholder value in the medium to long-term by ensuring that its staff have the necessary skills and resources to enable them to develop and grow the business in a sustainable manner.

2. Seek to understand and meet shareholder needs and expectations.

The Non-Executive Chair is AGTA’s principal spokesperson with investors, fund managers, the press and other interested parties.

The Company seeks to maintain a regular dialogue with both existing and potential new shareholders in order to communicate strategy and progress and to understand the needs and expectations of shareholders. The Board recognises that understanding shareholder motivation is important to serving the interests of all shareholders as a whole.

Agriterra’s majority shareholder is represented on the Board, thereby ensuring shareholder views are incorporated into its decision-making process.

Aside from this, the Board is committed to engaging in in-person dialogue with shareholders at general meetings and welcomes shareholder communication either through the contact details on the website. The Annual General Meeting gives Directors the opportunity to report to shareholders on current and proposed operations of the Company and enables shareholders to express their views on on its business activities. Shareholders are invited to ask questions at the Annual General Meeting after the formal proceedings have ended. The Company has not historically announced the detailed results of shareholder voting to the market. However, the Board intends to do so going forward.

Agriterra also endeavours to maintain a dialogue and keep shareholders informed through its public announcements and Company website which  provides not only information specifically relevant to investors (such as annual reports and accounts) but also regarding the nature of the business itself with detail regarding the operating businesses and the manner in which it carries on its operations.

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

Agriterra is aware of its corporate social responsibilities and the need to maintain effective working relationships across a range of stakeholder groups.

In addition to the Company’s staff and shareholders, the local community in Mozambique is a primary stakeholder.

In purchasing maize and cattle directly from the local community, Agriterra through its operating companies plays an important role in local economic development, supporting small scale farmers and the developing commercial sector.

Good relations with the local community (whether as workforce, suppliers, customers, regulators or others) key to the Company’s effective function in the long-term. Agriterra’s endeavours to take account of feedback received from stakeholders, making amendments to working arrangements and operational plans where appropriate (where such amendments are is consistent with the Company’s longer term strategy).

Agriterra has developed good relationships with its stakeholders and is committed to maintaining this understanding and these relationships, as a core pillar of the Company’s strategy and business model. As a result, the Company’s operations and working methodologies take account of the need to balance the needs of all of stakeholder groups while maintaining focus on the primary responsibility to promote the success of the Company for the benefit of its members as a whole.

The Company takes due account of any impact that its activities may have on the environment and seeks to minimise this impact wherever possible. Through the various procedures and systems it operates, Agriterra ensures full compliance with health and safety and environmental legislation relevant to its activities.

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

The Company has a risk management framework which identifies and addresses risks in order to execute and deliver corporate strategy in a responsible manner. Internal controls are designed to manage rather than eliminate risk and provide reasonable but not absolute assurance against material misstatement or loss. Through the activities of the Audit Committee, the effectiveness of these internal controls is reviewed annually.

The Board acknowledges its responsibility for establishing and monitoring systems of internal control. Although no system of internal control can provide absolute assurance against material misstatement or loss, the Company’s systems are designed to provide the Directors with reasonable assurance that problems are identified on a timely basis and dealt with appropriately. The Board reviews the effectiveness of the systems of internal control and considers the major business risks and the control environment on a regular basis. In light of this control environment the Board considers that there is no current requirement for a separate internal audit function.

The Directors ensure that they have and maintain an understanding of the commercial and political environment in Mozambique, so as to inform the decision-making process and quarterly Board meetings are held on site in Chimoio (where the operating companies are based) which enables the Directors to see the beef and milling operations; as such, Directors can speak directly to staff and to validate the operating reports given by the SMT at the Board meetings. The global pandemic has required meetings to take place virtually, but meetings in Chimoio will resume when it is safe and possible to do so.

The Management Team constantly assess risk exposure and receive encouragement from the Board to highlight risks and discuss appropriate risk-management options. There is no formal timetable for such assessment.

Agriterra maintains appropriate insurance cover in respect of actions taken against the Directors because of their roles; the insured values and type of cover are reviewed on a periodic basis.

A summary of the principal risks and uncertainties facing the Company are set out in each Annual Report.

5. Maintain the Board as a well-functioning, balanced team led by the chair

Agriterra is currently led and controlled by a Board comprising a Non-Executive Chair, an Interim Executive Director (who was formerly classified as a non-independent Non-Executive Director), two independent Non-Executive Directors and one non-independent Non-Executive Director.

Directors are subject to election by shareholders at the first Annual General Meeting after their appointment to the Board and are thereafter subject to retirement by rotation (with possibility of re-election) in accordance with the Company’s articles of incorporation.

Directors are aware of the time commitment required and committed to discharging their responsibilities in this regard, from the outset of their appointment.

Directors’ biographies are set out at Directors.

The Board is responsible to the shareholders for the proper management of the Company and holds regular meetings (at least four times a year). The Directors are responsible for formulating, reviewing and approving the strategy, budget and major items of capital expenditure.

The Non-Executive Chair liaises with the the Management Team on a regular basis, usually weekly, to ensure that the Board (and any committees) are provided with high quality information in a timely manner to enable the Board to provide input and insight on a collective basis, so as to promote the interests of the Company.

The Board has established committees (audit, remuneration and investment) which are proportionate for a company of its present size, from its number. The members of the committees have the necessary skills and knowledge to discharge their duties and responsibilities effectively.

Certain matters are specifically reserved to the Board for its decision including, inter alia, the creation or issue of new shares and share options, acquisitions, investments and disposals, material contractual arrangements outside the ordinary course of business and the approval of all transactions with related parties.

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

The Board has an appropriate balance of sector, financial & public markets, professional and management skills and experience, as well as an appropriate balance of personal qualities, personalities and capabilities.

Directors’ biographies are set out at Directors.

As time progresses the Board will continue to review its diversity, and gender balance and also be aware of the needs for succession planning and the fact that no member of the Board should become indispensable

7. Evaluate all elements of Board performance based on clear and relevant objectives, seeking continuous improvement

The Board periodically review the effectiveness of its performance as a unit, as well as that of its committees and the individual Directors.

Given Agriterra’s size, performance reviews are carried out internally from time to time. Reviews will endeavour to identify development or mentoring needs of Directors or the wider senior management team.

8. Promote a corporate culture that is based on sound ethical values and behaviours.

The Directors and the Management Team are all committed to doing business in an ethical and transparent manner, in a culture which promotes respect and openness.

The Board knows that the corporate culture and values require leadership and the Directors and the Management Team ensure that they manifest such corporate culture and values in all their dealings.

Corporate policies are disseminated throughout the operating companies and are seen as an important part of the achievement of the corporate strategy.

As the operations of Mozbife involves the purchase, improvement and slaughter of beef cattle, strong animal welfare values and practices are also a crucial part of the culture.

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

Due to Agriterra’s size and development stage, its governance structures and processes are more streamlined than larger companies.

However, the capacity, appetite and tolerance for risk of the Board is not excessive, despite the development imperatives driven by the desire to increase shareholder and stakeholder value. It is envisaged that governance structures will evolve and broaden over time.

The audit committee (a standing committee appointed by the Board) is responsible for ensuring that the Company’s financial performance and position is properly monitored, controlled and reported. The committee meets at least twice a year and has unrestricted access to the auditors. In addition to meeting with the auditors, the committee reviews reports from the auditors relating to the accounts and internal controls. The committee is also responsible for reviewing the scope and results of the audit, its cost effectiveness and the independence and objectivity of the auditor. The audit committee currently comprises Neil Clayton and Gary Smith with Mr. Clayton currently chairing the committee. It is noted that Mr. Clayton is currently considered to be “independent” but Mr. Smith is not currently considered to be “independent”, but is an experienced, qualified finance professional.

10. Communicate how the company is governed by maintaining a dialogue with shareholders and other relevant stakeholders.

The Company aims to ensure all communications concerning the it’s activities are clear, fair and accurate. The Board is however keen to improve its dialogue with shareholders.

Agriterra’s website is regularly updated and announcements are posted onto AGTA’s website.

Financial reports and notices of Annual General Meetings of the Company can be found here.

The results of voting on all resolutions in future general meetings will be posted to the website, including any actions to be taken as a result of resolutions for which votes against have been received from at least 20 percent of independent shareholders.

Latest Review - October 2023

The Board of Agriterra is accountable to the Company’s shareholders for good corporate governance.

The Board recognizes the value and importance of effective corporate governance to ensure confidence and trust in the management and in delivering growth in long term shareholder value. The Board endeavours to observe the principles of the QCA Corporate Governance Code (the “Code”) to the extent that they consider them to be applicable and appropriate for a group of the Company’s size and stage of development, through the maintenance of efficient and effective management frameworks accompanied by good communication.

A detailed Corporate Governance Report is contained in each Annual Report produced by Agriterra.