AIM Rule 26

The following information and links are provided for the purposes of Rule 26 of the AIM Rules for Companies and was last updated on 31 March 2021.


Kropz plc is not listed on any other exchange or trading platform other than AIM.

  • Description of the business

    Kropz is an emerging African phosphate explorer and developer, with phosphate mining and exploration projects on the West Coast of Africa. The vision of the Group is to become a leading independent phosphate rock producer and to develop into an integrated, mine-to-market plant nutrient company focusing on sub-Sahanan Africa.

    Kropz’s flagship operation is the Elandsfontein Phosphate Project, a near-term producing asset in South Africa’s Western Cape Province, close to export infrastructure and primed to take advantage of a recovery in phosphate prices.

    The Company’s medium-term development asset is the Hinda Phosphate Project in the Republic of Congo. Hinda is known to be one of the largest undeveloped phosphate reserves in the world, also located near export infrastructure.

    The Directors believe the long-term outlook for fertilizer products is favourable because fertilizer-based demand will be driven by the need to feed growing world population with constraints on arable land, that will necessitate increased phosphate fertilizer application rates in order to boost crop yields.

    Revenue generation and profitability is anticipated by the Directors over the near term as development and commissioning of the Elandsfontein Project is completed and comes into production. This is further supported by the off-take agreements that are already in place.

  • Management and Directors

    Please refer to the leadership section of this website.

  • Responsibilities of the members of the board of directors and details of any committees of the board of directors and their responsibilities

    The Directors support high standards of corporate governance and confirm that, they comply with the recommendations on corporate governance made by the Quoted Companies Alliance Corporate Governance Code (2018 Edition) (the “QCA Code”). The QCA is the independent membership organisation that champions the interests of small to mid-size quoted companies.   The QCA Code takes key elements of good governance and applies them in a manner which is workable for the different needs of growing companies.

    The adoption of the QCA Code will enable the Company to comply with that provision. To the extent that the Company departs from any of the provisions of the QCA Code it will provide details on this website (www.kropz.com) as required. The Board is responsible for formulating, reviewing and approving the Group’s strategy, budgets and corporate actions.

    The Board is comprised of an Executive Director: Mark Summers and five Non-Executive Directors: Lord Renwick of Clifton, Linda Beal, Michael Daigle, Michael Nunn and Machiel Reyneke. Three are considered fully independent: Lord Renwick of Clifton, Linda Beal and Michael Daigle. Two directors, Michael Nunn and Machiel Reyneke, are not considered independent due to the fact that Michael Nunn is a major shareholder of the Company, and Machiel Reyneke is the board representative of the Company’s major shareholder the ARC Fund.

    Non-executive directors have the same general legal responsibilities to the Company as any other director. The Board as a whole is collectively responsible for promoting the success of the Company by directing and supervising the Company’s affairs.

    The Board:

    • Provides direction and entrepreneurial leadership of the Company within a framework of prudent and effective controls which enable risk to be assessed and managed;
    • Sets the Company’s strategic aims, ensures that the necessary financial and human resources are in place for the Company to meet its objectives, and reviews management performance;
    • Demonstrates ethical leadership, setting the Company’s value and standards and ensuring that its obligations to its shareholders and others are understood and met;
    • Creates a performance culture that drives value creation without exposing the Company to excessive risk of value destruction;
    • Is accountable, and makes well-informed and high-quality decisions based on a clear line of sight into the business;
    • Creates the right framework for helping directors meet their statutory duties under the Companies Act 2006, and/or relevant statutory and regulatory regimes; and
    • Thinks carefully about its governance arrangements and embraces evaluation of their effectiveness.

    In addition to these requirements of all directors, the role of a non-executive has the following key elements:

    • Strategy: constructively challenge and contribute to the development of strategy;
    • Performance: scrutinise the performance of management in meeting agreed goals and objectives and monitor the reporting of performance;
    • Risk: satisfy themselves that financial information is accurate and that financial controls and systems of risk management are robust and defensible;
    • People: be responsible for determining appropriate levels of remuneration for executive directors, taking a prime role in appointing and, where necessary, removing senior management and in succession planning;
    • Skills: devote time to developing and refreshing their own knowledge and skills; an
    • Integrity: uphold high standards of integrity and probity and support the chairman and executive directors in instilling the appropriate culture, values and behaviours in the boardroom and beyond.

    Committees

    The Company has established an Audit and Sustainability Committee, Remuneration Committee and Nomination Committee with formally delegated duties and responsibilities.

    Audit and Risk Committee

    The Audit and Sustainability Committee has primary responsibility for monitoring the quality of internal controls and ensuring that the financial performance of the Group is properly measured and reported on. It will receive and review reports from the Group’s management and auditors relating to the interim and annual accounts and the accounting and internal control systems in use throughout the Group. Under its terms of reference, it is required to meet twice a year, and is responsible for keeping under review the scope and results of the audit, its cost effectiveness and the independence and objectivity of the auditors. It also has responsibility for public reporting and internal controls and arrangements whereby employees may raise matters of concern in confidence. It will also be responsible for leading the Group’s risk-assessed strategic decision-making and to ensure that wherever practical all principle operations are managed in such a way as to impose minimal environmental impacts and compliance with internal best practice standards.

    Committee: Linda Beal (chair), Lord Robin Renwick, Machiel Reyneke

    Remuneration and Nomination Committee

    The Remuneration and Nomination Committee will review the performance of the executive Directors and make recommendations to the Board on matters relating to their remuneration and terms of employment. It will also nominate for the approval of the Board candidates to fill Board vacancies as and when they arise. Under its terms of reference, it is required to meet as required and is responsible for ensuring that the executive Directors, officers and other key employees are fairly rewarded (which extends to all aspects of remuneration) for their individual contribution to the overall performance of the Group.

    Committee: Lord Robin Renwick (chair), Mike Daigle, Linda Beal, Mike Nunn, Machiel Reyneke

    Share Dealing Code

    The Company adopts, a share dealing code which sets out the requirements and procedures for the Board and applicable employees’ dealings in any of its AIM securities in accordance with the provisions of Market Abuse Regulation ("MAR") and of the AIM Rules for Companies.

    Bribery and Anti-Corruption Policy

    The Company adopts an anti-corruption and bribery policy which applies to the Board and employees of the Company and Group. The policy sets out their responsibilities in observing and upholding a zero-tolerance position on bribery and corruption in all the jurisdictions in which the Group operates. It also provides guidance to those working for the Group on how to recognise and deal with bribery and corruption issues and the potential consequences of failing to adhere to this guidance. The Company expects all employees, suppliers, contractors and consultants to conduct their day-to-day business activities in a fair, honest and ethical manner, be aware of and refer to this policy in all of their business activities worldwide and to conduct business on the Company’s behalf in compliance with it. Management at all levels are responsible for ensuring that those reporting to them, internally and externally, are made aware of and understand this policy.

  • Country of incorporation and main country of operation

    Kropz plc is incorporated in the UK, with registered offices at 35 Verulam Road, Hitchin, Hertfordshire, SG5 1QE

    Kropz also has a South African office at Unit 213, The Hills, Buchanan Square, 160 Sir Lowry Road, Woodstock.

    The Company operates in South Africa and Republic of Congo.

  • Current constitutional documents
  • Significant shareholders

    At 31 March 2021 the following interests of shareholders in excess of 3%, have been notified to the Company.

    • ARC Fund 78.2%
    • Kropz International Limited8.0%
  • Securities Information

    Company’s issued share capital as at 31 March 2021 consists of 682,558,102 ordinary shares with a nominal value of £0.001 each (“Ordinary Shares”), each share having equal voting rights.

    The Company does not hold any Ordinary Shares in treasury and therefore the number of Ordinary Shares with voting rights is 682,558,102.

    The percentage of AIM securities in public hands is approximately 8%.

    Last updated on 31 March 2021.

    (Admission Document)

  • Details of any restrictions on the transfer of our AIM securities

    There are no restrictions on the transfer of securities.

  • Interim and annual financial reports
  • Nominated adviser and other key advisers

    Nominated Advisers

    Grant Thornton UK LLP, 30 Finsbury Square, London EC2A 1AG

    Brokers

    H&P (Advisory) Limited, 2 Park Street, Mayfair, London W1K 2HX
    Mirabaud Securities Limited, 5th Floor, 10 Bressenden Place, London SW1E 5DH

    Solicitors to the Company

    As to English Law:
    Memery Crystal LLP, 165 Fleet Street, London EC4A 2DY

    As to South African Law:
    Werksmans Attorneys, The Central, 96 Rivonia Road, Sandton 2196, Johannesburg

    As to the laws of Republic of Congo:
    PwC Tax and Legal, 88 Avenue du Général de Gaulle, B.P. 1306, Pointe-Noire

    As to the laws of the British Virgin Islands:
    Harney Westwood and Riegels LP, Craigmuir Chambers, Tortola VG1110

    Auditors

    Auditors and Reporting Accountants to the Company:
    BDO LLP, 55 Baker St, Marylebone, London W1U 7EU

    Competent Persons

    Elandsfontein Competent Person: SRK Consulting (South Africa) (Pty) Ltd, 265 Oxford Road, Illovo 2196, Johannesburg

    Hinda Competent Person: SRK Consulting (UK) Limited, 21 Gold Tops, Newport, South Wales, NP20 4PG

  • Any circulars or similar publications sent to shareholders within the past 12 months
  • UK Takeover Code Applicability

    The UK City Code on Takeovers and Mergers applies to the Company.

  • Compliance with Governance Code

    In compliance with AIM Rule 26 (as set out in AIM Notice 50), AIM companies have to state on their website which recognised corporate governance code they apply and how they have applied that code.

    The Board of Directors of Kropz is committed to developing and applying high standards of corporate governance.  The Board of Directors has adopted the QCA Code, revised in April 2018 as devised by the Quoted Companies Alliance.

    The QCA Code is constructed around ten broad principles (accompanied by an explanation of what these principles entail, under ‘application’) and a set of disclosures. The Code states what is considered to be appropriate arrangements for growing companies and asks companies to provide an explanation about how they are meeting the principles through the prescribed disclosures.

    The table below sets out the principles, the application recommended by the QCA code. It then sets out how Kropz complies with these requirements and any departures from code and provides links to appropriate disclosures. These are based upon the recommended disclosures provided in the QCA code.

    These disclosures were last reviewed on the 31 March 2021.

    APPLICATIONHOW KROPZ COMPLIESDEPARTURES AND REASONSLINKS
    DELIVER GROWTH
    1. Establish a strategy and business model which promote long-term value for shareholders

    The board must be able to express a shared view of the company’s purpose, business model and strategy. It should go beyond the simple description of products and corporate structures and set out how the company intends to deliver shareholder value in the medium to long-term. It should demonstrate that the delivery of long-term growth is underpinned by a clear set of values aimed at protecting the company from unnecessary risk and securing its long-term future.

    The Board has set out the vision for Kropz for the medium to long term. The Board is responsible for formulating, reviewing and approving the Group’s strategy, budgets and corporate actions. The Company holds Board meetings at least three times each financial year and at other times as and when required.

    Detailed disclosure on the Company’s business model and strategy is disclosed in the AIM Admission Document on the Company’s website and in the Strategic Report.

    None Admission Document

    Annual Report and Accounts for the period ended 31 December 2019
    2. Seek to understand and meet shareholder needs and expectations

    Directors must develop a good understanding of the needs and expectations of all elements of the company’s shareholder base. The board must manage shareholders’ expectations and should seek to understand the motivations behind shareholder voting decisions.

    Kropz has a Board with experience in understanding the needs and expectations of its shareholder base. It supplements this with professional advisers including public relations company, nominated adviser and brokers who provide advice and recommendations in various areas of its communications with shareholders. Kropz engages with its shareholders through its website which has been designed as a hub to provide information to shareholders and provides regular updates to the market via the Regulatory News Service.

    The Company does not currently have a dedicated investor relations role. The Board feels that this is appropriate given the size and stage of development of the Company.

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

    Long-term success relies upon good relations with a range of different stakeholder groups both internal (workforce) and external (suppliers, regulators and others). The board needs to identify the company’s stakeholders and understand their needs, interests and expectations.

    Where matters that relate to the company’s impact on society, the communities within which it operates or the environment have the potential to affect the company’s ability to deliver shareholder value over the medium to long-term, then those matters must be integrated into the company’s strategy and business model.

    Feedback is an essential part of all control mechanisms. Systems need to be in place to solicit, consider and act on feedback from all stakeholder groups.

    Key resources and relationships on which the business relies are its customers, workforce, suppliers, shareholders, local community and elements of the regulatory framework.

    • Employees are encouraged to raise any concerns they may have with relevant management. Grievance mechanisms are in place for employees.
    • Feedback from potential customers is at present informal. The Company will contact customers on an ad hoc basis once sales commence and provide verbal feedback where necessary to senior management.
    • Engagement with the local community is carried out at site, by means of monthly meetings with the established Community Forums. Grievance mechanisms are in place for the community, with Company contact details displayed at site access points.
    • Feedback from regulators is provided via the regular framework of reporting and inspections that are carried out.

    Stakeholder identification and engagement is set out in the Section 172 statement contained in the Strategic Report.

    None Annual Report and Accounts for the period ended 31 December 2019
    4. Embed effective risk management, considering both opportunities and threats, throughout the organisation.

    The board needs to ensure that the company’s risk management framework identifies and addresses all relevant risks in order to execute and deliver strategy; companies need to consider their extended business, including the company’s supply chain, from key suppliers to end-user. Setting strategy includes determining the extent of exposure to the identified risks that the company is able to bear and willing to take (risk tolerance and risk appetite).

    Kropz recognises that risk is inherent in all of its business activities. Its risks can have a financial, operational or reputational impact. A summary of the key risks is set out in the Strategic Report and is provided in the AIM Admission Document on the website. The Company’s system of risk identification, supported by established governance controls, ensures it effectively responds to such risks, whilst acting ethically and with integrity for the benefit of all its stakeholders.

    The Company’s key internal controls procedures are:

    • Prioritised risk register - risks are evaluated to establish root causes, financial and non-financial impacts and likelihood of occurrence. Consideration of risk impact and likelihood is taken into account to determine which of the risks should be considered as a principal risk. The effectiveness and adequacy of mitigating controls are assessed. If additional controls are required, these are identified and responsibilities assigned. The Company’s management is responsible for monitoring the progress of actions to mitigate key risks. Key risks are reported to the Audit Committee and at least once a year to the full Board;
    • Preparation of annual cash flow projections for approval by the Board and ongoing review of expenditure and cash flows;
    • Establishment of appropriate cash flow management and treasury policies for the management of liquidity, currency and credit risk on financial assets and liabilities;
    • Regular management meetings to review operating and financial activities; and
    • Recruitment of appropriately qualified and experienced staff to key financial and operational management positions.
    None Annual Report and Accounts for the period ended 31 December 2019
    MAINTAIN A DYNAMIC MANAGEMENT FRAMEWORK
    5. Maintain the board as a well-functioning, balanced team led by the chair.

    The Board currently comprises one executive director, Mark Summers, and five non-executive directors, including the Chairman. The Chairman, Lord Robin Renwick of Clifton, and two of the non-executive directors, Linda Beal and Mike Daigle are considered to be independent. The remaining two non-executive directors, Mike Nunn and Machiel Reyneke, are not considered to be independent. Mike Nunn is a major shareholder of the Company, and Machiel Reyneke is the Board representative of Kropz Elandsfontein’s BEE partner and the Company’s largest shareholder, ARC.

    Since AIM Admission in November 2018, the Company has the following appropriately constituted committees, each with formally delegated duties and responsibilities set out in respective written terms of reference:

    • Audit Committee; and
    • Remuneration Committee.

    Lord Robin Renwick of Clifton, is also Chairman of the Remuneration Committee. Lord Renwick is independent in character, and suitable to fulfil this position considering the size of the Board and the Company and his prior experience. Lord Renwick is supported by the two other independent non-executive directors as well as Mike Nunn and Machiel Reyneke who are not considered independent but are on the committee due to their previous experience and the fact that they are aligned with shareholders’ interests by virtue of their representative holdings in the Company. Machiel Reyneke was included onto the Remuneration Committee as of February 2019.

    Machiel Reyneke, a non-independent non-executive director, is on the Audit Committee. Machiel’s financial experience and representation on a number of other listed company audit committees deem him suitably qualified to serve on the Audit Committee.

    The Board is responsible for the overall leadership and effective management of the Company, setting the Company’s values and standards and ensuring maintenance of a sound system of internal control and risk management. The Board is also responsible for approving Company policy and its strategic aims and objectives as well as approving the annual operating and capital expenditure budgets. The Board supports the concept of an effective Board leading and controlling the Company and believes the Company has a wellestablished culture of strong corporate governance and internal controls that are appropriate and proportional, reflecting the Company’s culture, size, complexity and risk.

    All directors bring a wide range of skills and international experience to the Board. The non-executive directors hold meetings without the executive directors present. The Chairman is primarily responsible for the working of the Board of the Company. The CEO is primarily responsible for the running of the business and implementation of the Board strategy and policy. The CEO is assisted in the managing of the business on a day-to-day basis by the CFO and other management.

    The Board has a formal schedule of regular meetings where it approves major decisions and utilises its expertise to advise and influence the business. The Board will meet on other occasions as and when the business demands. During the financial year under review the Board met on six occasions.

    The Board is supplied with appropriate and timely information in order to discharge its duties. The Board and its committees are supplied with full and timely information, including detailed financial information, to enable the directors to discharge their responsibilities. All directors have access to the advice and services of the company secretary, who is responsible for ensuring that Board procedures are followed and that applicable rules and regulations are complied with. Independent professional advice is also available to directors in appropriate circumstances.

    A detailed agenda is established for each scheduled meeting and appropriate documentation is provided to directors in advance of the meeting. Regular Board meetings provide an agenda that will include reports from the CEO, reports on the performance of the business and current trading, and specific proposals where the approval of the Board is sought. Areas discussed include, amongst others, matters relating to the AIM listing, placing and funding arrangements, the South African Mining Charter and mining legislation, RoC Mining Convention and the strategic direction of the Company. Minutes of the meetings from committees of the Board are circulated to all members of the Board, unless a conflict of interest arises, to enable all directors to have oversight of those matters delegated to committees.

    In accordance with the Company’s Articles of Association, the longest serving director must retire at each AGM and each director must retire in any three-year period, so that over a three-year period all directors will have retired from the Board and been subject to shareholder re-election. All directors have access to the advice and services of the company secretary and other independent professional advisers as required. Non-executive directors have access to key members of staff and are entitled to attend management meetings in order to familiarise themselves with all aspects of the Company. It is the responsibility of the Chairman and the company secretary to ensure that Board members receive sufficient and timely information regarding corporate and business issues to enable them to discharge their duties.

    Board and committee meetings attendance

    Two Audit Committee meetings and one Remuneration committee meeting was held during the 31 December 2020 financial year.

    During the 31 December 2020 financial year there were 3 Board meetings by the directors of the Company.

    Attendance of directors and committee members at Board and committee meetings held during the year is set out in the table below.

     Board meetings
    Lord Robin Renwick of Clifton 3/3
    Ian Harebottle 1/1
    Mark Summers 3/3
    Linda Beal 3/3
    Mike Daigle 3/3
    Mike Nunn 3/3
    Machiel Reyneke 3/3
     Audit Committee meetings
    Lord Robin Renwick of Clifton 2/2
    Linda Beal 2/2
    Machiel Reyneke 2/2
     Remuneration Committee meetings
    Lord Robin Renwick of Clifton 1/1
    Linda Beal 1/1
    Mike Daigle 1/1
    Mike Nunn 1/1
    Machiel Reyneke 1/1

    Division of responsibilities

    The division of responsibilities between the non-executive Chairman and the CEO is clearly defined in writing. However, they work closely together to ensure effective decision making and the successful delivery of the Group’s strategy.

    The CEO

    The CEO is responsible for the running of the Group’s business for the delivery of the strategy for the Group, leading the management team and implementing specific decisions made by the Board to help meet shareholder expectations. He also takes the lead in strategic development, by formulating the vision and strategy for the Group.

    The CEO reports to each Board meeting on all material matters affecting the Group’s performance. Given the structure of the Board and the fact that the Chairman and CEO roles are fulfilled by two separate individuals, the Board believes that no individual or small group of individuals can disproportionately influence the Board’s decision making.

    The Chairman

    The Chairman leads the Board, ensuring constructive communications between the Board members and that all directors are able to play a full part in the activities of the Company. He is responsible for setting Board agendas and ensuring that Board meetings are effective and that all directors receive accurate, timely and clear information.

    The Chairman officiates effective communication with shareholders and ensures that the Board understands the views of major investors and is available to provide advice and support to members of the executive team.

    Non-executive directors

    There are currently five non-executive directors (including the Chairman), of which three are independent non-executive directors. The role of the non-executive directors is to understand the Group in its entirety and constructively challenge strategy and management performance, set executive remuneration levels and ensure an appropriate succession planning strategy is in place. They must also ensure they are satisfied with the accuracy of financial information and that thorough risk management processes are in place. The non-executive directors also assist the Board with issues such as governance, internal control, remuneration and risk management. No non-executive directors are participants in any share option plans of the Company.

    Effectiveness

    Composition of the Board

    The Board consists of the Non-Executive Chairman, the CEO, two non-executive directors and two further independent non-executive directors. The names, skills and short profiles of each member of the Board, are available on the website. Each year the Board considers the independence of each non-executive director in accordance with the Code.

    The Board considers Lord Robin Renwick of Clifton, Linda Beal and Mike Daigle to be independent as they are not involved in any executive capacity, have no other or material business relationships with the Company, have no material investment in the Company nor are associated with any such investor and have no close family or other business relationships with the Company or any of its directors or senior executives.

    Non-executive directors were appointed for an initial term of one year in 2018. During 2019 the terms were amended and the non-executive appointments were extended, until terminated by either party on three months’ notice.

    To ensure that they clearly understand the requirements of their role, the Company has a letter of appointment in place with each non-executive director. Employment contracts are entered into with executive directors and senior executives so that they can clearly understand the requirements of the role and what is expected of them.

    Commitment

    Each director commits sufficient time to fulfil their duties and obligations to the Board and the Company. They attend Board meetings and join ad hoc Board calls and offer availability for consultation when needed. The contractual arrangements between the directors and the Company specify the minimum time commitments which are considered sufficient for the proper discharge of their duties. However all Board members appreciate the need to commit additional time in exceptional circumstances.

    Non-executive directors are required to disclose prior appointments and other significant commitments to the Board and are required to inform the Board of any changes to their additional commitments. Details of the non-executive directors’ external appointments can be found on the website.

    Before accepting new appointments, non-executive directors are required to obtain approval from the Chairman and the Chairman requires the approval of the whole Board. It is essential that no appointment causes a conflict of interest or impacts on the non-executive director’s commitment and time spent with the Group in their existing appointment.

    Details of executive directors’ service contracts and of the Chairman’s and the non-executive directors’ appointment letters are given in the Directors' Report of the Annual Report. Copies of service contracts and appointment letters are available for inspection at the Company’s registered office during normal business hours and at the AGM.

    Development

    All newly appointed directors are provided with an induction programme which is tailored to their existing skills and experience, legal update on directors’ duties and one on ones with members of the senior management team. The Board is informed of any material changes to governance, laws and regulations affecting the Group’s business.

    Information and support

    All directors have access to the advice and services of the company secretary and each director and each Board committee member may take independent professional advice at the Company’s expense, subject to prior notification to the other non-executive directors and the company secretary.

    The appointment and removal of the company secretary is a matter for the Board as a whole. The company secretary is accountable directly to the Board through the Chairman.

    Annual Report and Accounts for the period ended 31 December 2019

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

    The board must have an appropriate balance of sector, financial and public markets skills and experience, as well as an appropriate balance of personal qualities and capabilities. The board should understand and challenge its own diversity, including gender balance, as part of its composition. The board should not be dominated by one person or a group of people. Strong personal bonds can be important but can also divide a board. As companies evolve, the mix of skills and experience required on the board will change, and board composition will need to evolve to reflect this change.

    The Board has been assembled to allow each director to contribute the necessary mix of experience, skills and personal qualities to deliver the strategy of the Company for the benefit of the shareholders over the medium to long term. Full details of the Board members and their experience and skills are set out on the website.

    Together the Board provide relevant mining and fertilizer sector skills, the skills associated with running large public companies, African experience and technical and financial qualifications to assist the Company in achieving its stated aims. The Board comprises UK, US and South African directors and has one female director.

    The directors keep their skillsets up to date as required through the range of roles they perform with other companies and consideration of technical and industry updates by external advisers. The directors receive regular briefing papers on the operational and financial performance of the Company from the executives and senior management.

    Leadership

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

    Appointments to the Board

    The Company has a Remuneration Committee, the composition of which is set out on the Corporate Governance Report.

    The Remuneration Committee is responsible for maintaining a board of directors that has an appropriate mix of skills, experience and knowledge to be an effective decision-making body, ensuring that the Board is comprised of directors who contribute to the successful management of the Company and discharge their duties having regard to the law and the highest standards of corporate governance, considering and recommending Board candidates for election or re-election and reviewing succession planning.

    The Remuneration Committee undertakes a detailed selection process as per the recruitment and diversity policy to appoint or re-appoint a director to the Board. Included in this process are appropriate reference checks which include but are not limited to character reference and bankruptcy to ensure that the Board remains appropriate for that of an AIM quoted company.

    Evaluation of senior executives

    Arrangements put in place by the Board to monitor the performance of the Group’s executives include:

    • A review by the Board of the Group’s financial performance;
    • Annual performance appraisal meetings incorporating analysis of key performance indicators with each individual to ensure that the level of reward is aligned with respective responsibilities and individual contributions made to the success of the Group;
    • An analysis of the Group’s prospects and projects; and
    • A review of feedback obtained from third parties, including advisors (where applicable).

    Informal evaluations of the CEO and other senior executives’ individual performance and overall business measures are undertaken progressively and periodically throughout the financial period. Whilst the Board is aware that the Code recommends that the Board and its committees are evaluated on a yearly basis this has not been undertaken during 2019 as the Board was constituted late in 2018. However, an evaluation will be undertaken in 2020.

    Annual Report and Accounts for the period ended 31 December 2019

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

    The Board seeks to embody and promote a corporate culture that is based on sound ethical values and behaviours, something we see as being a cornerstone to a strong risk management programme.

    Code of conduct

    The Board acknowledges the need for continued maintenance of the highest standard of corporate governance practice and ethical conduct by all directors and employees of the Group.

    The Board has approved a code of conduct for directors, officers, employees and contractors, which describes the standards of ethical behaviour that are required to be maintained. The code of conduct was approved prior to the Company’s listing on the AIM market. The Group promotes the open communication of unethical behaviour within the organisation.

    Compliance with the code of conduct assists the Company in effectively managing its operating risks and meeting its legal and compliance obligations as well as enhancing the Group’s corporate reputation.

    The code of conduct describes the Group’s requirements on matters such as confidentiality, conflicts of interest, use of Group information, sound employment practices, compliance with laws and regulations and the protection and safeguarding of the Group’s assets.

    An employee who breaches the code of conduct may face disciplinary action. If an employee suspects that a breach of the code of conduct has occurred or will occur, he or she must report that breach to the CEO or CFO, via the Company’s confidential “Whistle Blowing” process. No employee will be disadvantaged or prejudiced if he or she reports in good faith a suspected breach. All reports will be investigated, acted upon and kept confidential.

    Anti-bribery and anti-corruption

    The Company has adopted an anti-corruption and bribery policy which applies to the Board and employees of the Company and the Group. It generally sets out their responsibilities in observing and upholding a zerotolerance position on bribery and corruption in all the jurisdictions in which the Group operates. It also provides guidance to those working for the Group on how to recognise and deal with bribery and corruption issues and the potential consequences of failing to adhere to this guidance. The Company expects all employees, suppliers, contractors and consultants to conduct their day-to-day business activities in a fair, honest and ethical manner, be aware of and refer to this policy in all of their business activities worldwide and to conduct business on the Company’s behalf in compliance with it. Management at all levels are responsible for ensuring that those reporting to them, internally and externally, are made aware of and understand this policy.

    The Group’s anti-bribery and anti-corruption policy is set out in the code of conduct and has been aligned to meet UK and South African laws governing anti-bribery and anti-corruption. The Group takes a zero tolerance approach to acts of bribery and corruption by any directors, officers, employees and contractors. The Group will not offer, give or receive bribes, or accept improper payments to obtain new business, retain existing business or secure any advantage and will not permit others to do so on its behalf.

    Kropz Anti Corruption Policy and Code of Ethics

    Chairman’s Corporate Governance Statement

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

    The company should maintain governance structures and processes in line with its corporate culture and appropriate to its size and complexity; and capacity, appetite and tolerance for risk. The governance structures should evolve over time in parallel with its objectives, strategy and business model to reflect the development of the company.

    The Board as a whole is collectively responsible for promoting the success of the Company by directing and supervising the Company’s affairs. The role of the Board is as follows:

    • To provide direction and entrepreneurial leadership of the Company within a framework of prudent and effective controls which enable risks to be appropriately assessed and managed;
    • To set the Company’s strategic aims, ensure that the necessary financial and human resources are in place for the Company to meet its objectives and review management performance;
    • To demonstrate ethical leadership, setting the Company’s value and standards and ensuring that its obligations to its shareholders and others are well understood;
    • To create a performance culture that drives value creation without exposing the Company to excessive risk or value destruction;
    • To be accountable, and make well-informed and high quality decisions based on a clear understanding of the Company’s broader goals and specific objectives;
    • To create the right framework for helping directors meet their statutory duties under the Companies Act 2006, and/or any other relevant statutory and regulatory regimes; and
    • To promote its governance arrangements and embrace the evaluation of their effectiveness.

    Internal controls

    In applying the principle that the Board should maintain a sound system of internal control to safeguard shareholders’ investment and the Group’s assets, the directors recognise that they have overall responsibility for ensuring that Kropz maintains systems to provide them with reasonable assurance regarding effective and efficient operations, internal control and compliance with laws and regulations and for reviewing the effectiveness of that system. However, there are inherent limitations in any system of control and accordingly even the most effective system can provide only reasonable and not absolute assurance against material misstatement or loss, and that the system is designed to manage rather than eliminate the risk of failure to achieve the business objectives.

    The key features of the internal control system are described below:

    Control environment

    The Company is committed to high standards of business conduct and seeks to maintain these standards across all of its operations. There are also policies in place for the reporting and resolution of suspected fraudulent activities. The Company has an appropriate organisational structure for planning, executing, controlling and monitoring business operations in order to achieve its objectives.

    Risk management and internal control

    The Board has carried out a robust assessment of the principal risks facing the Group. Details of these risks are set out in the Strategic Report. The Board has reviewed the Company’s risk management and internal control systems during the year and consider them to be effective. Management is responsible for the identification and evaluation of key risks applicable to their areas of business. These risks are assessed on a continual basis and may be associated with a variety of internal and external sources, including infringement of intellectual property, sales channels, investment risk, staff retention, disruption in information systems, natural catastrophe and regulatory requirements.

    Group businesses will participate in periodic operational/strategic reviews and annual plans. The Board actively monitors performance against plan. Forecasts and operational results are consolidated and presented to the Board on a regular basis. Through these mechanisms, performance is continually monitored, risks identified in a timely manner, their financial implications assessed, control procedures re-evaluated and corrective actions agreed and implemented.

    Main control procedures

    The Company has implemented control procedures designed to ensure complete and accurate accounting for financial transactions and to limit the exposure to loss of assets and fraud. Measures taken include segregation of duties and reviews by management.

    There are clear and consistent procedures in place for monitoring the system of internal financial controls. The Board considers the internal control system to be adequate for the Group.

    Financial and business reporting

    It is the responsibility of the directors to ensure that the financial accounts are prepared and submitted. Having assessed the current annual report, along with the accounts, the directors confirm that, taken as a whole, they are fair, balanced and understandable. The directors also confirm that these documents provide the necessary information in order for shareholders to assess the Group’s performance, business model and strategy.

    The going concern statement provided by the directors is in the Directors Report. The Independent Auditors Report is within the Annual Report.

    The CEO and CFO provide, at the end of each six monthly period, a formal statement to the Board confirming that the Group’s financial reports present a true and fair view, in all material respects, and that the Group’s financial condition and operational results have been prepared in accordance with the relevant accounting standards.

    The statement also confirms the integrity of the Group’s financial statements and that it is founded on a sound system of risk management and internal compliance and controls which implements the policies approved by the Board, and that the Group’s risk management and internal compliance and control systems, to the extent they relate to financial reporting, are operating efficiently and effectively in all material respects.

    Board committees

    The Company has established an Audit Committee and a Remuneration Committee with formally delegated duties and responsibilities. The minutes of all committees are circulated for review and consideration by all relevant directors, supplemented by oral reports from the respective committee chairs at Board meetings.

    Audit and Risk Committee

    The Company has an Audit Committee comprised of Linda Beal, as the chairperson of the committee, together with Lord Robin Renwick of Clifton and Machiel Reyneke. The Audit Committee report can be found in the Annual Report.

    Remuneration and Nomination Committee

    The Company has a Remuneration Committee comprised of Lord Robin Renwick of Clifton, as the chairperson of the Remuneration Committee, together with Machiel Reyneke, Mike Nunn, Linda Beal and Mike Daigle.

    The Remuneration Committee report can be found in the Annual Report.

    Chairman’s Corporate Governance Statement

    Annual Report and Accounts for the period ended 31 December 2019BUILD TRUST10. Communicate how the company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders.

    Dialogue with shareholders

    The Group places considerable importance on effective communications with shareholders.

    The Group’s communication strategy requires communication with shareholders and other stakeholders in an open, regular and timely manner so that the market has sufficient information to make informed investment decisions on the operations and results of the Group. The strategy provides for the use of systems that ensure a regular and timely release of information about the Group is provided to shareholders.

    The Group also posts all reports, stock exchange announcements and media releases and copies of significant business presentations on the Company’s website.

    The Company’s two largest shareholders, ARC Fund and Kropz International, are represented on the Board. In addition, the Chairman and CEO have frequent direct face-to-face meetings throughout the period with some of the other major shareholders as well as with analysts and brokers.

    Constructive use of the AGM

    The Board encourages full participation of shareholders at the AGM to ensure a high level of accountability and understanding of the Group’s strategy and goals.

    The Company provides information in the notice of meeting that is presented in a clear, concise and effective manner. Shareholders are provided with the opportunity to submit questions in relation to each resolution before they are put to the vote and discussion is encouraged by the Board.

    Directors are usually available at and following general meetings when shareholders have the opportunity to ask/submit questions on the business of the meeting. Specifically, the chairperson of the Audit Committee and the Chairperson of the Remuneration Committee are available in person or by conference call at the AGM to answer questions from shareholders.

    The company secretary, the Company’s auditors (if required) and the Registrars (if required) are also in attendance at general meetings to assist with any queries shareholders may have.

    Other governance matters

    Diversity policy

    The Group is committed to an inclusive workplace that embraces and promotes diversity, while respecting international, sovereign, United Kingdom, South African and RoC laws.

    It is the responsibility of all directors, officers, employees and contractors to comply with the Group's diversity policy and report violations or suspected violations in accordance with this diversity policy.

    The Group recognises the value of a diverse work force and believes that diversity supports all employees reaching their full potential, improves business decisions, business results, increases stakeholder satisfaction and promotes realisation of the Group’s vision.

    Diversity may result from a range of factors including but not limited to gender, age, ethnicity and cultural backgrounds. The Company believes these differences between people add to the collective skills and experience of the Group and ensure it benefits by selecting from all available talent.

    Group and individual expectations

    The Group recognises Group and individual expectations, to:

    • Ensure diversity is incorporated into the behaviours and practices of the Group;
    • Facilitate equal employment opportunities based on job requirements only using recruitment and selection processes which ensure we select from a diverse pool;
    • Engage professional search and recruitment firms when needed to enhance our selection pool;
    • Help to build a safe work environment by acting with care and respect at all times, ensuring there is no discrimination, harassment, bullying, victimisation, vilification or exploitation of individuals or groups;
    • Develop flexible work practices to meet the differing needs of our employees and potential employees;
    • Attract and retain a skilled and diverse workforce as an employer of choice;
    • Enhance customer service and market reputation through a workforce that respects and reflects the diversity of our stakeholders and communities that we operate in;
    • Make a contribution to the economic, social and educational well-being of all of the communities it serves;
    • Meet the relevant requirements of domestic and international legislation appropriate to the Group’s operations;
    • Create an inclusive workplace culture; and
    • Establish measurable diversity objectives and monitor and report on the achievement of those objectives annually.

    Dealings with company securities

    The Group’s Securities Dealing Policy is binding on all directors, officers and employees who are in possession of “inside information”. All such persons are prohibited from trading in the Company’s securities if they are in possession of ‘inside information’. Subject to this condition and trading prohibitions applying to certain periods, trading is permissible provided the relevant individual has received the appropriate prescribed clearance. The Board considers that the share dealing code is in compliance with the MAR and AIM requirements, and continues to meet the requirements of the Board.

    Interests of other stakeholders

    The Group’s objective is to leverage into resource projects to provide a solid base in the future from which the Group can build its resource business and create wealth for shareholders. The Group’s operations are subject to various environmental laws and regulations under the relevant government’s legislation. Full compliance with these laws and regulations is regarded as a minimum standard for the Group to achieve.

    Market disclosure

    The Company is subject to parallel obligations under the AIM rules and the MAR, in relation to the disclosure and control of price sensitive information. The Company has obligations under corporate and securities laws and stock exchange rules to keep the market fully informed of information which may have a material effect on the price or value of the Group’s securities and to correct any material misrepresentation, mistake or misinformation in the market.

    The Group takes continuous disclosure seriously and requires that all of its directors, officers, employees and contractors observe and adhere to the Group’s procedures and policies governing compliance with all laws pertaining to continuous disclosure, tipping and insider trading.

    The Company has a formal Disclosure Policy (the “Disclosure Policy”) addressing its continuous disclosure obligations and arrangements. The objectives of the Disclosure Policy are to ensure that:

    • The communications of the Group with the public are timely, factual and accurate and broadly disseminated in accordance with all applicable legal and regulatory requirements;
    • Non-publicly disclosed information remains confidential; and
    • Trading of the Group's securities by directors, officers and employees of the Company and its subsidiaries remains in compliance with applicable securities laws.

    The Disclosure Policy also provides advice to all directors, officers, employees and contractors of the Group of their responsibilities regarding their obligation to preserve the confidentiality of undisclosed material information while ensuring compliance with laws respecting timely, factual, complete and accurate continuous disclosure, price sensitive or material information, tipping and insider trading.

    The Disclosure Policy further covers disclosures in documents filed with the securities regulators and stock exchanges and written statements made in the Group’s annual and interim reports, news releases, letters to shareholders, presentations by senior management and information contained on Kropz’s website and other electronic communications. It extends to oral statements made in meetings and telephone conversations with analysts and investors, interviews with the media as well as speeches, press conferences and conference calls.

    If there is misuse of price sensitive or material information not yet disclosed to the market by trading or breach in confidentiality, extremely serious penalties may apply to the individual or individuals involved.

    Shareholder information

    The Company’s website contains a separate section titled “Investors” which contains key documents for its investors. The website also provides:

    • Information about the Company and Group;
    • An overview of the Group’s current projects;
    • Copies of its annual reports;
    • Investor presentations; and
    • Copies of its announcements to the London Stock Exchange.

    The Company’s share registry is maintained electronically by Link Asset Services. Their contact details are disclosed in the corporate directory of the annual report.

    Annual Report and Accounts for the period ended 31 December 2019
  • All notifications the AIM company has made in the past 12 months

    Refer to the Press release section