MII Milton Capital Plc

Milton Capital Plc

Corporate governance

for the year ended 31 January 2024

The Company has adopted the principles of the Quoted Companies Alliance Corporate Governance Code (QCA Code) for small and mid-size quoted companies. The QCA Code identifies ten principles that they consider to be appropriate arrangements and asks companies to provide an explanation on how they are meeting the principles. The Board considers that the Company complies with the QCA Code so far as it is practicable having regard to the size, and complexity of the Company and its business.

These disclosures are set out on the basis of the current Company and the Board highlights where it has departed from the Code presently.

The following paragraphs set out the Company's compliance with the 10 principles of the QCA code and the information below was last updated on 22 November 2022.

1.              Establish a strategy and business model which promotes long-term value for shareholders

The Company's strategy is to undertake one or more acquisitions, which may be in the form of a merger, capital stock exchange, asset acquisition, stock purchase or a scheme arrangement of a majority interest in a company or business. The Board maintains close dialogue with several funds, specialist funding businesses and brokers to help identify suitable investment opportunities.

The Board considers that the key challenge in executing the Company's plan is identifying opportunities where it is likely that the investee will progress rapidly, and the investment will therefore rise in value.

The Board intends to deliver shareholder returns through capital appreciation. Challenges to delivering strategy, long-term goals and capital appreciation are an uncertainty in relation to organisational, operational, financial and strategic risks, all of which are outlined in the Risk Management section below, as well as steps the Board takes to protect the Company by mitigating these risks and secure a long-term future for the Company.

Given the size of the Company, we believe the strategy and business model we have adopted is consistent with our goal of promoting long term value for shareholders.

2. Seek to understand and meet shareholder needs and expectations

The Company is committed to communicating openly with its shareholders to ensure that its strategy, business model and performance are clearly understood. The principal forms of communication are the Annual Report and Accounts, full and half-year announcements, trading updates, other Regulatory News Service announcements and its website.

The Company also maintains a dialogue with shareholders through Annual General Meetings, which provides an opportunity to meet, listen and present to shareholders, and shareholders are encouraged to attend in order to express their views on the Company's business activities and performance.

The Company's website is kept updated and contains details of relevant developments and has a facility for questions to be addressed to the Company and it is the Board's commitment that all reasonable questions are answered promptly.

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

The Company's business is focused on making and appraising investments. As such, stakeholder and social responsibilities, in terms of impact on society, the communities within which the Company operates and the environment, apply less than that of an operating company. Therefore, the Company appraises its social responsibilities as part of its investment appraisal process.

The key resource on which the Company relies is the collective experience of the Directors. All employees within the Company are valued members of the team, and the Board seeks to implement provisions to retain and incentivise all its employees. The Company offers equal opportunities regardless of race, gender, gender identity or reassignment, age, disability, religion or sexual orientation. Given that the Company is in its embryonic stage of development, the Company has not yet adopted a formal diversity policy. In terms of its shareholders, the Company aims to provide transparent and balanced information to encourage support and confidence in the Board's approach.

The Board recognises that the long-term success of the Company is reliant upon the efforts of employees, regulators and many other stakeholders and has close ongoing relationships with a broad range of its stakeholders.

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

The Board recognises the need for an effective and well-defined risk management process, and it oversees and regularly reviews the current risk management and internal control mechanisms.

The Company considers risk management to fall into two broad categories, being the investment activity of the Company and the operations of the Company.

(a) The investment risk is considered as part of the appraisal processes and by way of due diligence and ongoing monitoring.

Milton Capital Plc

Corporate governance - continued

for the year ended 31 January 2024

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

(b) The Company uses internal appraisal and the annual audit to ensure financial risks are evaluated in detail. Board meetings are also used for the directors to raise any issues relating to business risk arising from the Company's business model and operations.

Dealings in the Company's shares are monitored, and any dealings must first be approved by the Non- executive Director.

The risk assessment matrix below sets out and categorises key risks and outlines the mitigating actions which are in place. This matrix is updated as changes arise In the nature of risks or the mitigating actions implemented, and the Board reviews these on a regular basis. The Company has identified the principal risks to the Company achieving its objectives as follows:

The Board considers that an internal audit function is not considered necessary or practical due to the size of the Company and the day-to-day control exercised by the Directors. However, the Board will monitor the need for an internal audit function. The Board has established appropriate reporting and control mechanisms to ensure the effectiveness of its control systems.

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

The Board recognises the QCA recommendation for a balance between Executive and Non-executive Directors and the recommendation that there be at least two Independent Non-executives. The Board consists of four directors; one Executive Director and presently three Non-Executive Directors. The Board deems the current composition to be sufficient, given the nature and size of the Company. The Board maintains that the Board's compositions will be frequently reviewed as the Company develops.

The Directors of the Company are committed to sound governance of the business, and each devotes sufficient time to ensure this happens. The Board held four Board meetings in the period. All meetings were attended by the Directors during their tenure. Board meetings cover regular business, investments, finance, and operations.

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

The Company believes that the Board as a whole has significant experience in the Energy industry. The Board believes they have the requisite mix of skills and experience to successfully execute the business strategy in order to meet the Company's objectives.

Milton Capital Plc

Corporate governance - continued

for the year ended 31 January 2024

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

Edward Roland Dawson (Managing Director)

Edward Dawson holds both a BEng and an MSc (Investment analysis) degree. Edward has over 20 years' experience in the energy sector. He has managed, financed, and been a key investor in the sector. Positions held include: CEO of Prospex Energy (Founding Director), MD of Peppercoast Petroleum (Founding Director), and MD of Black Star Petroleum plc; Analyst for RAB Capital's Energy Fund; Business Development and Finance Manager for Oilexco Incorporated; and a fund manager for Park Place Capital.

Edward has an enviable exploration drilling success record, has led through all stages of the company growth cycle and created significant value for stakeholders along the way.

Richard Mays (Non-Executive Chairman)

Richard Mays holds LLB, LLM, PhD degrees and is a Solicitor in Scotland. Formerly Professor and Depute Dean of the Aberdeen Business School he has extensive industry, commercial and legal experience for numerous Exploration and Production companies and oil and gas contractors. He has leadership experience in London Stock Exchange listed companies at DEO Petroleum plc (founding director), at Oilexco North Sea and Prospex Energy plc (founding director). He also served as Executive Chairman of Peppercoast Petroleum plc and Black Star Petroleum plc (founding director), both private companies. He was formerly Vice President Business Development at Canadian Overseas Petroleum Limited.

Nicholas Pillar (Non-Executive Director)

Nick Pillar holds a BSc in Applied Geology and has over 40 years of experience in the oil and gas industry. He started his career working for Geophysical Services Inc in the field and office before joining Enterprise Oil plc in 1990 where he became Head of Geophysical Operations. He spent 2 years as Chief Geophysicist for Enterprise where he led a team of 60 staff before the company was taken over by Shell in 2002. Two years were spent in Malaysia with Petronas Carigali as a consultant. On returning to the UK Nick was asked to build the service division of Ikonscience, a niche rock physics company, subsequently becoming Ikon's Operations Director. He has also undertaken tutoring work at Imperial College, London. In his most recent post, he served for 10 years as Head of Geophysics for Canadian Overseas Petroleum Limited where he undertook geophysical analysis of opportunities and assets in the UKCS, West Africa, and North America.

Malcolm Burne (Non-Executive Director)

Malcolm Burne started his long career with a leading firm of London Stockbrokers as an equities analyst and later became a financial columnist with the Financial Times and other business publications. He has started a number of businesses in the financial, technology and natural resources sectors not only in UK but also Australia, Hong Kong and North America. He has been the architect of a substantial number of SPACS usually targeting new trends and has completed many reverse takeovers.

Malcolm has sat on the boards of numerous public companies, including Main Market companies such as Golden Prospect. He was a director of Auctus Growth Plc, a Standard List special purpose acquisition company, which acquired HeiQ Materials AG and was re-admitted to Standard List in December 2020. Malcolm is also a founder director of Star Tech NG Plc, a pre-IPO fund in US growth tech. As a corporate financier and venture capital investor Malcolm has a significant investment portfolio of private companies in the new economy and fintech space some of which he is a director representing his shareholding.

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

The Directors consider that the Company and Board are not yet of a sufficient size and complexity for a full Board evaluation to make commercial and practical sense. The Board acknowledges that it is non-compliant with its processes to evaluate the performance of the Board.

As the Company is a cash shell, the Board deems the current structure to be sufficient. As the Company grows, it expects to expand the Board and with the Board expansion, re-consider the need for Board evaluation.

In view of the size of the Board, the responsibility for proposing and considering candidates for appointment to the Board as well as succession planning is retained by the Board. All Directors submit themselves for re-election at the AGM at regular intervals.

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

The Board believes that by acting ethically and promoting strong core values it will gain a reputation for honesty and that this will attract business and help the long-term objectives of the Company. As such the Board adopts an open approach to all investors, investment opportunities and all its advisers and service providers.

The Board further considers the activities of, and persons involved with, potential investee companies or assets  as part of its due diligence processes.

The Board places great importance on the responsibility of accurate financial statements and auditing standards which comply with the Auditing Practice Board's (APB's) and Ethical Standards for Auditors. The Board places great importance on accuracy and honesty and seeks to ensure that this aspect of corporate life flows through all that the Company does.

Milton Capital Plc

Corporate governance - continued

for the year ended 31 January 2024

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

A large part of the Company's activities is centred upon an open and respectful dialogue with stakeholders. The Directors consider that the Company has an open culture facilitating comprehensive dialogue and feedback.

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

The Board is committed to, and ultimately responsible for, high standards of corporate governance and notes the departure from the Code in terms of independence on the Board. The Board reviews the Company's corporate governance arrangements regularly and expects these to evolve over time, in line with the Company's growth.

The Executive Director is responsible for the day-to-day management of the Company's activities. The matters reserved for the Board are:

(a) Defining the long-term strategy for the Company;

(b) Approving all major investments;

(c) Approving any changes to the capital and debt structure of the Company

(d) Approving the full year and half year results and reports;

(e) Approving resolutions to be put to the AGM and any general meetings of the Company;

(f) Approving changes to the Advisory team; and

(g) Approving changes to the Board structure.

Until an acquisition is made, the Company will not have separate audit and risk, nomination or remuneration committees. The Board as a whole will review audit and risk matters, as well as the Board's size, structure and composition and the scale and structure of the Directors' remuneration  and fees, taking into account the interests of the shareholders and the performance of the Company.  The Board will take responsibility for the appointment of auditors and payment of their audit fees, monitor and review the integrity of the Company's financial statements and take responsibility for any formal announcements of the Company's financial performance. Following the completion of an acquisition, the Board intend to put in place audit and risk, nomination and remuneration committees.

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

The Board is committed to maintaining effective communication and having constructive dialogue with its stakeholders. All shareholders are encouraged to attend the Company's Annual General Meeting and the Board discloses the result of General Meetings by way of announcement.

The Company's annual financial statements will be publicly announced once audited and will also be available on the Company's website and at the Company's registered office.

Information on the Investor Relations section of the Company's website is kept updated and contains details of relevant developments, regulatory announcements, financial reports and shareholder circulars. Shareholders with a specific enquiry can contact us on the website contact page.

The Board, so far as is practicable given the Company's size and stage of its development, has voluntarily adopted the QCA Code as its chosen corporate governance framework. There are certain provisions of the QCA Code which the Company will not adhere to currently, and their adoption will be delayed until such time as the Directors believe it is appropriate to do so. It is anticipated that this will occur concurrently with the Company's first material investment or acquisition.

Following such an acquisition, the Company will seek to develop its corporate governance position and will address key differences to the QCA Code. Specifically, it is anticipated this will include:

i.  the augmentation of the Board with suitably qualified additional executive and non-executive directors including independents;

ii.  the implementation of audit, remuneration and nomination committees with appropriate terms of reference;

iii. a formalised annual evaluation and review process covering the Board and Committees, including succession planning;

iv. the publication of KPIs;

v. the development of a corporate and social responsibility policy; and

vi. an enhanced risk management and governance framework tailored to the operating assets and

of the enlarged entity,

Richard Mays

Chairman

Milton Capital Plc

Directors Remuneration Report

for the year ended 31 January 2024

This report sets out the remuneration policy operated by Milton Capital Plc in respect of the Executive and Non-Executive Directors.

Remuneration Committee

The remuneration policy is the responsibility of the Board of Directors as a whole. The Remuneration Committee has not yet been formed, though the Board intends to put one in place following the completion of an acquisition. No Director is involved in discussions relating to their own remuneration.

Remuneration policy for Executive Directors

The Board sets a remuneration policy that aims to align Executive Directors' remuneration with shareholders' interests and attract and retain the best talent for the benefit of the Group. The remuneration of the Executive Director during the year is set out below.

Basic salary

Basic salaries are reviewed annually. The review process is managed by the Board with reference to market salary data and the Executive Directors' performance and contribution to the Company during the year.

Bonuses

There is currently no bonus scheme in place.

Longer term incentives

In order to incentivise and retain the Executive Directors, and align their interests with those of shareholders, the Company has granted share options in the current year. The share options issued during the year will vest and become exercisable after the Company enters into a substantial transaction, as determined by the Directors acting reasonably.

Pension

The Company operates a defined contribution pension scheme which is available to all employees. The assets of the scheme are held separately from those of the Company in independently administered funds.

Executive Directors service contracts and termination provisions

The service contract of the Executive Director is approved by the Board. The service contract may be terminated by either party giving notice to the other. The details of the Director's contract are summarised below:

Date of Contract Notice period

Edward Dawson - 30 October 2023 - 6 months-notice.  Edward was appointed Chief Executive Officer and an Executive Director on 30 October 2023. He was paid £90,000 per annum during the year under review and qualifies for employee benefits including participation in option schemes.

Non-Executive Directors' service contracts and remuneration

The remuneration of the Non-Executive Directors is determined by the Board having regard to market comparatives, and independent advice is sought to ensure parity is maintained with similar businesses.

The Non-Executive Directors have not received any pension, bonus, or benefits from the Group. Options granted are detailed below. Their Letters of Appointment are reviewed by the Board annually.

Directors' remuneration

The remuneration of the Directors in office during the year was as follows:

Milton Capital Plc