Trans-Siberian Gold plc
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Corporate Governance

The Company seeks, where practicable for a company of its size and nature, to comply with the main provisions of the Principles of Good Governance and Code of Best Practice (the "Combined Code") which applies to listed companies, although such compliance is not mandatory for AIM listed companies.

Board of Directors

The Company appointed non-executive directors in 2001 to bring an independent view to the Board, which now comprises one executive director and five non-executive directors, including the chairman. Three non-executive directors are appointed by major shareholder UFG Asset Management. The other non-executive directors are considered by the Board to be independent of management and free from any business or other relationship that could materially interfere with the exercise of their independent judgement.

The Board ordinarily meets on a bi-monthly basis to determine strategy and to approve budgets and business plans, major capital expenditure, acquisitions and disposals. Additional meetings are held as appropriate to transact other business. Formal agendas, briefing papers and reports are sent to the Board in advance of its meetings. The Board delegates certain of its responsibilities to two Board Committees, which have clearly defined terms of reference as described below.

The directors have access to the advice and services of the Company Secretary. Any director may also take independent professional advice at the Company's expense in the furtherance of his duties.

In accordance with the Articles of Association, each year one third of the directors (generally those who have held office for the longest time since their election) will retire from office at the AGM. A retiring director may be re-elected if eligible and a director appointed by the Board may also be elected, although in the latter case the director's period of prior appointment by the Board will not be taken into account for the purposes of rotation.

Audit Committee

The Audit Committee, which comprises Charles Ryan (Chairman), Robert Sasson and Stewart Dickson, meets at least twice a year and is responsible for ensuring that the appropriate financial reporting procedures are properly maintained and reported on and for meeting the auditors and reviewing their reports relating to the financial statements and internal control systems. It is also responsible for monitoring the independence of the auditors. Executive directors may attend meetings of the Audit Committee by invitation; however, at least once a year the Committee meets the auditors without executive directors being present.

Remuneration Committee

The Remuneration Committee, consisting of Charles Ryan (Chairman), Robert Sasson and Lou Naumovski, is responsible for reviewing the performance of the executive directors and other senior executives and for determining appropriate levels of their remuneration, in consultation with external advisers as appropriate, with due regard to the interests of shareholders. It meets as required. The committee also makes recommendations to the Board in respect of employee incentives, including the granting of share options.

The Company's remuneration policy is to provide competitive rewards for its executive directors and other senior managers, taking into account the performance of the Company and conditions prevailing in the employment market for executives of equivalent status, both in terms of the level of responsibility of their position and their achievement of recognised job qualifications and skills. Base salaries are reviewed annually.

It is the Company's policy that executive directors' service contracts have no fixed term and that the notice period in those service contracts does not exceed one year. Dmitry Khilov's service contract provides that either party may terminate their employment by giving six months' written notice and that the Company may make a payment in lieu of notice.

Internal Control

The Board is responsible for ensuring that the Group maintains an adequate system of internal control and risk management. The internal controls are designed to safeguard the Group's assets and to ensure the reliability of financial information for both internal use by management and external reporting.

The directors are aware that no system can provide absolute assurance against material misstatement or loss. They are satisfied that the current controls and processes to manage significant risks are adequate with regard to the current stage of the Group's development. However, they recognise the need to enhance and strengthen the system of internal control and risk management as the Group's projects are developed towards gold production.


The Board attaches great importance to maintaining good relationships with all its shareholders and ensures that all price sensitive information is released to its shareholders simultaneously in accordance with AIM rules.

The Board believes that the AGM provides an important opportunity for dialogue with private shareholders. At the AGM the Managing Director presents a review of the Group's activities. The directors and senior management of the Group are available to answer questions both before and after the meeting.