The potential conflicts of interest that may arise include when
an Amber entity is an existing investor in the target entity while
an associated company, AFML, acts on the 'buyside' as Investment
Adviser to the Company. The IAA contains procedures with the
intention of ensuring that the terms on which the vendors of such
assets dispose of their assets are fair and reasonable to the
vendors; and on the 'buyside' the Company as Investment Adviser
must be satisfied as to the appropriateness of the terms for and
the price of, the acquisition.
Key features of these procedures include:
> The creation of separate committees representing the
interests of the vendors on the one hand (the 'Sellside Committee')
and the Company on the other (the 'Buyside Committee'), to ensure
arm's length recommendation and approval processes. The membership
of each committee is restricted in such a way as to ensure its
independence and to minimise conflicts of interest arising
> A requirement for the Buyside Committee to conduct and
report to the Company on an independent due diligence process on
the assets proposed to be acquired prior to making an offer
> A requirement for any offer made for the assets to be
supported by advice on the fair market value for the transaction
from an independent expert
> The establishment of 'information barriers' between the
Buyside and Sellside Committees to ensure information is kept
confidential to one or the other side
> The provision of a 'release letter' to each employee of the
relevant associate of the Investment Adviser who is a member of the
Buyside and Sellside Committees. The release letter confirms that
the employee shall be treated as not being bound by his/her duties
as an employee to the extent that such duties conflict with any
actions or decisions which are in the employee's reasonable opinion
necessary for him/her to carry out as a member of the Buyside
Committee or Sellside Committee
> Individuals with material direct or indirect economic
interests in the relevant assets will not participate in Buyside
Committee and Sellside Committee discussions regarding the relevant
assets
> A requirement that the financial statements, policies and
records of any such asset offered to the Company be compliant with
the Company's accounting policies and procedures
The acquisition of all assets, including those from any
associate of the Investment Adviser is considered and approved in
advance by the Investment Committee. In considering any such
acquisition, the Committee will, as it deems necessary, review and
ask questions of the Buyside Committee of the Investment Adviser
and the Group's other advisers and the acquisition will be approved
by the Committee on the basis of this advice. The purpose of these
procedures is to ensure that the terms upon which any investment is
acquired from a member of the Amber group is on an arm's length
basis.
Risk Management and Internal Controls
The Board is responsible for overall risk management with
delegation provided to the Audit and Risk Committee. The system of
risk management and internal control has been designed to manage,
rather than eliminate, the risk of failure to meet the business
objectives. Regard is given to the materiality of relevant risks
and therefore the system of internal control cannot provide
absolute assurance against material misstatement or loss.
The Company has in place a detailed risk management framework,
with a comprehensive risk register that is reviewed and updated as
necessary by the Board and Audit and Risk Committee on a quarterly
basis. The Audit and Risk Committee considers the risks facing the
Company and controls and other measures in place to mitigate the
impact of risks.
There is an ongoing process for identifying, evaluating and
managing the significant risks faced by the Company. The process
has been in place for the year under review and up to the date of
approval of the Annual Report and financial statements.
Risk management process
The Company's risk management process as overseen by the Board
can be summarised as:
Risk framework and systems of internal control
The Board recognises the importance of identifying and actively
monitoring the financial and non-financial risks facing the
business. Whilst responsibility for risk management rests with the
Board, the management of risk is embedded as part of the everyday
business and culture of the Company and its principal advisers.
The Board has considered the need for an internal audit function
but because of the internal controls systems in place at the key
service providers, and the independent controls process reviews
performed it has decided instead to place reliance on those control
and assurance processes.
The overall risk governance framework is the responsibility of
the Board, overseen by the Audit and Risk Committee with input from
the Management Engagement Committee. It is implemented through
three risk control levels.
Risk identification
The Board and Audit and Risk Committee identify risks with input
from the Company's Investment Adviser and Administrator. The Board
also receives detailed quarterly asset management reports
highlighting performance and potential risk issues on an
investment-by-investment basis.
Risk assessment
Each identified risk is assessed in terms of probability of
occurrence, potential impact on financial performance and movements
in the relative significance of each risk from period to
period.
Action plans to mitigate risk
Where new risks are identified or existing risks increase in
terms of likelihood or impact, the Audit and Risk Committee assists
the Company in developing an action plan to mitigate the risk and
put in place enhanced monitoring and reporting.
Re-assessment and reporting of risk
Such risk mitigation plans are reassessed by the Audit and Risk
Committee, where applicable with the relevant key service providers
and reported to Board on a quarterly basis.
The direct communication between the Company and its Investment
Adviser and the entity level asset manager is regarded as a key
element in the effective management of risk (and performance) at
the underlying investment level. The Company benefits from a strong
alignment of risk and management performance approach at the
Company and underlying investment levels through the provision of
services from a vertically integrated Investment Adviser and
investment level Asset Manager.
The risk framework is applied holistically across the Company
and the underlying investment portfolio through vertically
integrated service support as illustrated in the Operating Model
diagram on page 14.
Relations with Shareholders
The Board welcomes shareholders' views and places great
importance on communication with shareholders. It has
responsibility for communication with the investor base and is
directly involved in major communications and announcements.
The Board receives regular reports on the views of shareholders
and the Chairman and other directors are available to meet
shareholders as required.
The Investment Adviser conducts the day-to-day investor
relations activities for the Company. It meets with major
shareholders on a regular basis and reports to the Board on these
meetings. During 2014 the Investment Adviser and members of the
Board held formal meetings with over 85 individual shareholders in
addition to day-to-day interaction including calls and other forms
of correspondence. The Board is also informed on a regular basis of
all relevant market commentary on the Company by the Investment
Adviser, Administrator and the Company's Broker.
The Annual General Meeting of the Company provides a forum for
shareholders to meet and discuss issues with the directors and with
the Investment Adviser of the Company.
To promote a clear understanding of the Company, its objectives
and financial results, the Board aims to ensure that information
relating to the Company is disclosed in a timely manner. The
Company has an investor relations section on its website
(www.internationalpublicpartnerships.com) where it makes available
all its publicly disclosed documents including annual reports and
RNS announcements together with additional background information
on its assets and corporate practices. Investors can register to
receive notification (via email) of RNS announcements the Company
issues. The Board encourages investors to utilise this useful
online resource.
Any shareholder issues of concern including on corporate
governance or strategy can be addressed in writing to the Company
at its registered office address (see back cover).
Corporate Social and Environmental Responsibility
Introduction
The Company is committed to its responsibility to the
environment and having a positive role in the local and global
community in which it operates. The Company encourages high
standards in sustainability through an integrated approach to
managing and influencing our indirect environmental and social
impacts. The Company recognises the value of active management in
delivering quality services, risk management and resource
efficiency.
The Company's most material impacts are indirect, relating to
the environmental and social performance of the construction and
operation of the buildings and infrastructure which make up its
portfolio. Additionally, it recognises the importance of managing
its relationship with its Investment Adviser (and associated asset
management operations) including the energy and resources used
within its operations and their contribution to the local and
global community.
The Company's Investment Adviser focuses on sustainability
commitments, both within its operations and through the management
of the projects and assets within the Company's portfolio. The
Investment Adviser operates a Sustainability Policy which looks
beyond legislative and regulatory requirements to promote best
practice and continual improvement in environmental management and
social responsibility.
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