Governance Code

Chairman’s Introduction

The Company is managed under the direction and supervision of the Board. Among other things, the Board sets the vision and strategy for the Company in order to effectively implement the Group’s business model which is to enable third-party consumer brands to access Chinese consumers through cross-border eCommerce, and thereby deliver long term value to our shareholders.

Good corporate governance creates shareholder value by improving performance while reducing or mitigating risks that the Group faces as the Board seeks to createsustainable growth over the medium to long-term. It is the Chairperson’s role to lead the Board effectively and to oversee the adoption, delivery and communication of the Group’s corporate governance model.
 
To these ends and in line with the recent changes to the AQSE Rules to require all companies to adopt and comply with a recognised corporate governance code, the Board has adopted the Quoted Companies Alliance Corporate Governance Code 2018 (the “QCA Code”). It was decided that the QCA Code was more appropriate for the Company’s and Group’s size and stage of development than the more prescriptive Financial Reporting Council’s UK Corporate Governance Code. The narrative that follows sets out in broad terms how we comply with the QCA Code at this point in time and we will provide annual updates to the report going forward.
 
Principle 1: Establish a strategy and business model which promote the long-term value for shareholders
The Group has developed a proprietary software platform – the Nomad platform – which is integrated with Chinese eCommerce and social media platforms, as well as payment, logistics and customs systems to provide a Direct-to-Consumer trade. The Group‘s Nomad platform offers four main technology and service solutions designed for third-party consumer brands (“Clients”) of varying size who wish to sell their products to end consumers in China.
  • Nomad Checkout;
  • Nomad Storefront;
  • Nomad Commerce; and
  • Nomad Distribution
Nomad Checkout is a Software-as-a-Service (“SaaS”) based solution that integrates with popular eCommerce software providers and enables Clients to introduce their products through their own eCommerce website to Chinese consumers, with the sale finalised on the Nomad platform in China. Nomad Checkout allows Chinese consumers to use payment methods popular in China and benefit from improved delivery methods and product authenticity.
 
Nomad Storefront is a technology and managed service solution which is integrated with Chinese eCommerce platforms and managed by the Group’s multilingual teams in the UK and China on behalf of Clients. Nomad Storefront provides product management, order processing, stock management and analytics across multiple eCommerce platforms giving Clients a consolidated solution to the fragmented Chinese CBEC market.
 
Nomad Commerce offers customisable eCommerce solutions for Clients who wish to establish their own eCommerce presence in China. Integrated with the dominant payment providers in China, it also supports a content management system, recommendation engine, detailed analytics and event tracking. Hosted on infrastructure in China, Nomad Commerce operates inside of China’s internet restrictions, improving loading times and website performance.
 
Nomad Distribution allows Clients to access Chinese key opinion leaders and celebrities to generate sales in China’s fast growing social commerce space. Nomad Distribution enables Clients to access this sector of Chinese eCommerce and for their products to be drop-shipped directly to consumers in China.
 

The Group’s strategy is to:

  • further develop Nomad platform’s functionality and services;
  • expand the Group’s business development activities in Europe, North East Asia
  • and North America in order to grow its Client base;
  • extend marketing of its own brands to increase its visibility and awareness to potential Clients; and
  • acquire additional consumer brands and make strategic acquisitions.
Principle 2: Seek to understand and meet shareholder needs and expectations
The Company is committed to listening and communicating openly with its shareholders to ensure that its strategy, business model and performance are clearly understood. Understanding what analysts and investors think about us, and in turn, helping these audiences understand our business, is a key part of driving our business forward and we actively seek dialogue with the market. We will do so via retail and institutional investor roadshows, attending and presenting at investor conferences, meeting with independent investment analysts and financial journalists and our regular reporting.
 
The Directors actively seek to build a relationship with institutional shareholders. The Chief Executive Officer (“CEO”) and other directors will make presentations to institutional shareholders and analysts from time to time in part to listen to their feedback and have a direct conversation on any areas of concern. The Board as a whole is kept informed of the views and concerns of major shareholders by briefings from the CEO. Any significant investment reports from analysts will be circulated to the Board. The Non-Executive Chairperson is also available to meet with major shareholders if required to discuss issues of importance to them.
 
The Annual General Meeting (“AGM”) is one forum for dialogue with shareholders and the Board. The Notice of Meeting is sent to shareholders at least 14 clear days before the AGM. The chairs of the Board and all committees, together with all other Directors, will routinely attend the AGM and are available to answer questions raised by shareholders. For each vote, the number of proxy votes received for, against and withheld is announced at the meeting. The results of the AGM will subsequently published on the Company’s website.
 
Principle 3: Take into account wider stakeholder and social responsibilities and their implications for long-term success
Engaging with all our stakeholders strengthens our relationships and helps us make better business decisions to deliver on our commitments. The Board is regularly updated on wider stakeholder engagement to stay abreast of stakeholder insights into the issues that matter most to them and our business, and to enable the Board to understand and consider these issues in decision-making. Some examples of stakeholders aside from our shareholders are our clients and our suppliers. The Board therefore closely monitors and reviews the results of the Company’s engagement with those groups to ensure alignment of interests.
 

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

Financial Controls
The Company’s Audit and Risk Committee comprises Jeanette Hern (Chairperson), Tanith Dodge and Keith Higgins. The Audit and Risk Committee meets as often as required and at least twice a year. The Audit and Risk Committee’s main functions include reviewing the effectiveness of internal control systems and risk assessment, making recommendations to the Board in relation to the appointment and remuneration of the Company’s auditors and monitoring and reviewing annually their independence, objectivity, effectiveness and qualifications.
 
The Audit and Risk Committee also monitors the integrity of the financial statements of the Company and Group, including its annual and interim reports and any other formal announcement relating to financial performance. The Audit and Risk Committee is responsible for overseeing the Company’s relationship with the external auditors, including making recommendations to the Board on the appointment of the external auditors and their remuneration. The Audit and Risk Committee considers the nature, scope and results of the auditors’ work and reviews, and can develop and implements policies on the supply of non-audit services that are provided by the external auditors where appropriate. The Audit and Risk Committee focuses particularly on compliance with legal requirements, accounting standards and the relevant AQSE Rules for Companies and ensuring that an effective system of internal financial and non-financial controls is maintained. The ultimate responsibility for reviewing and approving the annual report and accounts remains with the Board. The identity of the Chairperson of the Audit and Risk Committee is reviewed on an annual basis and the membership of the Audit and Risk Committee and its terms of reference are kept under review. The Audit and Risk Committee members have no links with the Company’s external auditors.
 
Standards and policies
The Board is committed to maintaining appropriate standards for all the Group’s business activities and ensuring that these standards are set out in written policies where appropriate. The Board acknowledges that the Group’s international operations may give rise to possible claims of bribery and corruption. In consideration of the UK Bribery Act, the Board reviews the perceived risks to the Group arising from bribery and corruption to identify aspects of the business which may be improved to mitigate such risk. The Board has adopted a zero-tolerance policy toward bribery and has reiterated its commitment to carry out business fairly, honestly and openly. The Company has also adopted a share Dealing Code for the Board, in conformity with the requirements of the AQSE Rules for Companies and the Market Abuse Regime (MAR), and will take steps to ensure compliance by the Board and senior staff with the terms of the code. In summary, the

code stipulates that those covered by it should:

  • not deal in any securities of the Company, unless prior written notice of such proposed dealings has been given to the Board and written clearance received from the Board;
  • not purchase or sell any securities of the Company in the two months immediately preceding the announcement of the Company’s half-yearly or annual results;
  • not use another person, company or organisation to act as an agent, or nominee, partner, conduit or in another capacity, to deal in any securities on their behalf where that third person would breach obligations under this paragraph; and
  • immediately inform the Board of any dealings in the Company’s shares.
All material contracts are required to be reviewed and signed by a senior Director of the Company and reviewed by our external counsel.
 
The Company has a social media policy. The objective of the policy is to minimise the risks to the Company through use of social media. The policy deals with the use of all forms of social media, all social networking sites, internet postings, the Company’s website, non-regulatory news feeds and blogs. It applies to use of social media for business purposes as well as personal use that may affect the Company in any way. The policy covers all employees, officers, consultants, contractors, interns, casual workers and agency workers.
 
Principle 5: Maintain the board as a well-functioning, balanced team lead by the chair
The Board comprises the Non-Executive Chairperson, two Executive Directors and two Non-Executive Directors. The Board considers that the Non-Executive Chairperson and one of the two Non-Executive Directors bring an independent judgement to bear. The Board is satisfied that it has a suitable balance between independence on the one hand, and knowledge of the Company on the other, to enable it to discharge its duties and responsibilities effectively. All Directors are encouraged to use their independent judgement and to challenge all matters, whether strategic or operational. The Chairman holds update meetings with each Director to ensure they are performing as they are required.
 

During the financial year ending 31 March 2022, at least 4 Board meetings will take place. Key Board activities in the coming year will year include the receipt, investigation and assessment of any potential acquisition candidates. Continued open dialogue with the investment community; 

  • consider our financial and non-financial policies;
  • discuss strategic priorities;
  • discuss the Company’s capital structure and financial strategy, including capital investments and shareholder returns;
  • discuss internal governance processes;
  • review the Company’s risk profile; and
  • review feedback from shareholders post full and half year results.
The Company has effective procedures in place to monitor and deal with conflicts of interest. The Board is aware of the other commitments and interests of its Directors, and changes to these commitments and interests must be reported to and, where appropriate, agreed with the rest of the Board.
 
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 eCommerce, finance, capital markets, legal and corporate governance. All Directors receive regular and timely information on the Company’s operational and financial performance. Relevant information is circulated to the Directors in advance of meetings. Contracts are available for inspection at the Company’s registered office.
 

The Board makes decisions regarding the appointment and removal of Directors and there is a formal, rigorous and transparent procedure for appointments. The Company’s Articles of Association require that:

  • any Director who has held office at the time of the two previous AGMs and who did not retire at either of them must retire from office and may offer him or herself for re-election by the shareholders; and
  • that any new Directors appointed during the year must stand for election at the AGM immediately following their appointment. 
All Directors are able to take independent professional advice in the furtherance of their duties, if necessary, at the Company’s expense. In addition, the Directors have direct access to the advice and services of the Company Secretary and Legal Counsel.
 
Principle 7: Evaluate board performance based on clear and relevant objectives, seeking continuous improvement
The Company is constantly assessing the individual contributions of each of the members of the Board and executive team to ensure that: their contribution is relevant and effective, that they are committed and where relevant, they have maintained their independence. Over the next 12 months we intend to review the performance of the team as a unit to ensure that the members of the Board collectively function in an efficient and productive manner.
 
Principle 8: Promote a corporate culture that is based on ethical values and behaviours
The Board believes that the promotion of a corporate culture based on sound ethical values and behaviours is essential to maximise shareholder value. With regard to the structure and size of the Company, the Board is confident the ethical values are being adhered to through multiple ways. Many employees are members of professional bodies and/or are educated to a very high academic level. Having a relevant professional degree and being a member in good standing of the professional body aligns with the culture the Company cultivates to obtain its objectives. The Company will only meet its objectives if all of its employees are ethical, fair and transparent in their dealings with our stakeholders. The feedback of the Company’s clients of their relationship with every member of the Company is requested to assist the Company in reinforcing its corporate culture.
 
Principle 9: Maintain governance structures and processes that are fit for purpose and support good decision- making by the board
The Board meets at least four times each year in accordance with its scheduled meeting calendar. The Board sets direction for the Company through a formal schedule of matters reserved for its decision. Prior to the start of each financial year, a schedule of dates for that year’s four Board meetings is compiled to align as far as reasonably practicable with the Company’s financial calendar while also ensuring an appropriate spread of meetings across the financial year. This may be supplemented by additional meetings as and when required. During the financial year ending 31 March 2022, the Board will meet for at least four scheduled meetings.
 
The Board and its Committees receive appropriate and timely information prior to each meeting; a formal agenda is produced for each meeting, and Board and committee papers are expected to be distributed well before meetings take place. Any Director may challenge Company proposals and decisions are taken democratically after discussion. Any Director who feels that any concern remains unresolved after discussion may ask for that concern to be noted in the minutes of the meeting, which are then circulated to all Directors. Any specific actions arising from such meetings are agreed by the Board or relevant committee and then followed up by the Company’s management.
 
The Board is responsible for the long-term success of the Company. There is a formal schedule of matters reserved to the Board. It is responsible for overall group strategy; approval of major investments; approval of the annual and interim results; annual budgets; dividend policy; and Board structure. It monitors the exposure to key business risks and reviews the annual budgets and their performance in relation to those budgets. There is a clear division of responsibility at the head of the Company. The Chairperson is responsible for running the business of the Board and for ensuring appropriate strategic focus and direction. The CEO is responsible for proposing the strategic focus to the Board, implementing it once it has been approved and overseeing the management of the Company through the executive team.
 
The Board is supported by the Audit and Risk Committee, the Remuneration Committee and the Sustainability Committee. Each committee has access to such resources, information and advice as it deems necessary, at the cost of the Company, to enable the committee to discharge its duties. The Remuneration Committee comprises not less than three members, two of which are independent Non-Executive Directors. The Remuneration Committee ensures remuneration is aligned to the implementation of the Company strategy and effective risk management, taking into account the views of shareholders and is also assisted by executive pay consultants as and when required.
 
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-year and half-year announcements, the AGM, RNS announcements, EGM’s as required, and one-to-one meetings with large existing or potential new shareholders. A range of corporate information (including all Company announcements and presentations) is also available to shareholders, investors and the public on the Company’s corporate website, www.samarkand.global . The Board receives regular updates on the views of shareholders through briefings and reports from the CEO and the Company’s AQSE Corporate Adviser. The Company communicates with institutional investors frequently through briefings with management. In addition, analysts’ notes and brokers’ briefings are reviewed to achieve a wide understanding of investors’ views. The Company will also communicate to individual investors and private client brokers through a dedicated email address, investor roadshows and presentations at investor conferences.

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