Strategy Business Model
The Company is focused on delivering shareholder value over the medium to long term by placing its proprietary, proven and patented Advanced Gasification Technology at the heart of leading-edge, waste-to-energy plants across Europe and in North America with emerging opportunities in Asia and the Middle East.
We are a waste-to-value company, using our proven proprietary Advanced Gasification Technology to generate safe, sustainable and clean energy, including electricity, heat, biofuels, synthetic natural gas and green hydrogen, from over 50 different kinds of feedstock, focusing on municipal, agricultural and industrial waste, biomass, and plastics. We collaborate with waste operators, developers, technologists, EPC contractors and capital providers to build sustainable energy from waste infrastructure projects.
Engaging and Communicating with Shareholders
The Board is committed to maintaining good communication and having constructive dialogue with its shareholders. Institutional shareholders and analysts have the opportunity to discuss issues and provide feedback at meetings with the Company. In addition, all shareholders are encouraged to attend the Company’s Annual General Meeting. Investors also have access to current information on the Company though its website, www.eqtec.com and via David Palumbo, CEO, who is available to answer investor relations enquiries.
Managing and mitigating risk
Central to achieving our strategy is winning and successfully delivering our contract portfolio. Our continuing financial health relies on our ability to successfully tender, mobilise, operate, and manage such contracts. Winning new and retaining existing contracts continues to be critical for the future success of our business.
Our tender, mobilisation and contract management processes operate under strict delegated authorities and are subject to rigorous executive management oversight and approval. These contracts are supported by teams of experienced tender, mobilisation and operational delivery specialists to mitigate the risk of failure at any stage. Ongoing contract assurance occurs together with regular dialogue to ensure service delivery is consistent with customer expectations.
Maintaining a strong reputation is vital to our success as a business. Significant impact to our reputation could be caused by an incident involving major harm to one of our people or clients/partners, inadequate financial control processes, or failure to comply with regulatory requirements. Impacts of this type would potentially result in financial penalties, losses of key contracts, an inability to win new business and challenges in retaining key staff and recruiting new staff.
Strong corporate governance and dedicated senior management remain the key elements of effective reputational management. Senior management provides a model of best practice and guidance to ensure our values and expected behaviours are clear and understood by everyone. As our business continues to grow and develop we will remain strongly focused on protecting the strength of our reputation through effective governance and leadership, and through cultivating open and transparent relationships with all stakeholders.
Attracting and retaining skilled people
Attracting and retaining the best skilled people at all levels of the business is critical. This is particularly the case in ensuring we have access to a diverse range of views and experience, and in attracting specific expertise at both managerial and operational levels where the market may be highly competitive. Failure to attract new talent, or to develop and retain our existing employees, could impact our ability to achieve our strategic growth objectives. As we continue to grow and diversify into new areas, this risk will continue to be a focus for the Board.
We produce highly sophisticated and specialised engineering and design services leading to products that incorporate or use leading-edge technology, including hardware and software. Many of our products and services involve complex energy infrastructure projects and accordingly the impact of a catastrophic product failure or similar event could be significant. Any inability to deliver on time, to budget and to the right quality could result in financial loss or reputational damage.
System process or control failure
The basis of our governance framework is provided by our core policies, which are subject to continual review and enhancement to manage our growing and diversifying business requirements in line with sound governance practice. We have built extensive operational processes to ensure that our product design, engineering, and other services we provide meet the most rigorous quality standards. Our internal control procedures continue to be reviewed formally. We are in the process of introducing interdependent operational and finance systems to achieve operational efficiencies and transparent reporting.
Ability to grow the business and cash generation
Our financial strength makes us an attractive partner to our customers and suppliers. Our ability to grow our business organically and by acquisition will be impacted if our financial performance deteriorates, limiting our ability to access diverse sources of funding on competitive terms. This may cause an increase in the cost of borrowing or cash flow issues which could, in turn, further affect our financial performance. As a people business, our staff costs remain our most significant area of expenditure. Our ability to pay our people and suppliers regularly and at specific times relies not only on funding being available but also upon effective cash conversion.
We have developed and continue to enhance financial control procedures to oversee and monitor financial performance and cash conversion. These include daily monitoring of bank balances, weekly cash flow reporting, and regular financial performance and balance sheet reviews, which include detailed working capital reviews and forecasts. We believe we have strong banking, debt finance and equity relationships, and appropriate levels of gearing for our business.
Reliance on material counterparties
We depend on a number of significant counterparties such as EPC contractors, insurers, banks, clients, and suppliers to maintain our business activities. The failure of a key business partner, supplier, subcontractor, financer or other provider could materially affect the operational and financial effectiveness of our business and our ability to trade. Ensuring ongoing relationships with our material counterparties will underpin the Group’s ability to meet its strategic objectives.
We have developed, through strategic partnerships, relationships with a number of EPC contractors and also a pool of suppliers and providers to ensure limited dependency on any one provider, in turn limiting the impact of any potential failure. The Board reviews and monitors material counterparty risk and ensures that concentration levels are kept to a minimum.
Political and regulatory risk
Our technology can be deployed in a wide number of international markets and as such we are exposed to different political and regulatory regimes with different risk profiles.
We monitor and evaluate political and regulatory risk at board level. Decisions on the balance of our project pipeline are taken to ensure we are not over-reliant on one particular market over time.
Board of Directors
The Board comprises four full time executive directors: the CEO David Palumbo, the FD Gerry Madden, the COO Jeffrey Vander Linden and the CTO Dr. Yoel Alemán; and two independent non-executive directors: Ian Pearson, who acts as the Chairman, and Tom Quigley. Each non-executive director devotes as much time as is required to carry out the roles and responsibilities that the director has agreed to take on.
Follow the link to biographical details of the current directors here.
Skills, Capabilities and Board Performance
Governance Structures and Processes
Authority for all aspects of the Group’s activities rests with the Board. The respective responsibilities of the Chairman and Chief Executive Officer arise as a consequence of delegation by the Board. The Board has adopted two statements; the first sets out matters which are reserved to the Board and the second establishes the policy on delegation of authority. The Chairman is responsible for the effectiveness of the Board, while management of the Group’s business and primary contact with shareholders has been delegated by the Board to the Chief Executive Officer.
The Board has adopted guidelines for the appointment of non-executive directors which have been in place and which have been observed throughout the year. These provide for the orderly and constructive succession and rotation of the Chairman and non-executive directors insofar as both the Chairman and non-executive directors will be appointed for an initial term of three years and may, at the Board’s discretion believing it to be in the best interests of the Company, be appointed for subsequent terms. The Chairman may serve as a non-executive director before commencing a first term as Chairman.
In accordance with the Companies Act 2014 of Ireland, the Board complies with the following duties:
- to act in good faith in what the director considers to be the interests of the Company;
- to act honestly and responsibly in relation to the conduct of the affairs of the Company;
- to act in accordance with the Company’s constitution and exercise powers only for the purposes allowed by law;
- not to use the Company’s property, information or opportunities for the Director’s own or anyone else’s benefit;
- not to agree to a restriction of the exercise of independent judgement;
- to avoid any conflicts of interest;
- to exercise the care, skill and diligence which would be exercised in the same circumstances by a reasonable person;
- to have regard to the interests of the members of the Company, in addition to the duty to have regard to the interests of the Company’s employees in general.
At present the Finance Director also acts as the Company Secretary. The Company has plans in place to separate the role from an executive director at the appropriate time.
The Audit Committee comprises Tom Quigley (Chairman) and Ian Pearson. Meetings are also attended by the Finance Director as appropriate. It meets as required and specifically to review the Interim Report and Annual Report, and to consider the suitability and monitor the effectiveness of internal control processes. The Audit Committee also reviews the findings of the external auditor and reviews accounting policies and material accounting judgements. The Audit Committee normally meets at least three times in each financial year and has unrestricted access to the Group’s external auditor.
The Remuneration Committee comprises Ian Pearson (Chairman) and Tom Quigley. The Remuneration Committee reviews the performance of the Executive Directors and makes recommendations to the Board on matters relating to their remuneration and terms of service. The Remuneration Committee also makes recommendations to the Board on proposals for the granting of share options and other equity incentives pursuant to any employee share option scheme or equity incentive plans in operation from time to time. The Remuneration Committee meets at least annually. In exercising this role, the Directors have regard to the recommendations put forward by the QCA Guidelines.