The following information and links are provided for the purposes of Rule 26 of the AIM Rules for Companies and was last updated on 30 June 2019.
Kropz plc is not listed on any other exchange or trading platform other than AIM.
Kropz is an emerging plant nutrient producer with an advanced stage phosphate mining project in South Africa and exploration assets in West 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-Saharan 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 Company has also secured a prospecting right in Ghana, to undertake further exploration work on the Aflao Phosphate Project, the potential extension of the well-known, high grade and historically exploited HKK deposit in Togo.
The Directors believe the long-term outlook for fertilizer products is favourable because fertilizer-based demand will be driven by the need to feed a growing world population with constraints on arable land, that will necessitate increased phosphate fertilizer application rates in order to boost crop yields.
Phosphate analyst group, CRU, expects that 2018 will represent a turning point in the phosphate rock market, with global phosphate rock import demand forecast to grow by 2.7Mt between 2018 and 2022 to reach 35.3 Mt. This represents a 2% compound annual growth rate (CAGR) marking a significant acceleration in phosphate rock import demand growth. CRU forecasts phosphate rock demand will further grow in the period 2022-2035 at 2% CAGR.
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.
Please refer to the leadership section of this website.
The Directors support high standards of corporate governance and confirm that, following Admission, they intend to fully 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 Directors also note that with effect from 28 September 2018, all AIM companies must provide details on their website of the recognised corporate governance code that the Company has decided to apply, how it complies with that code and where it departs from this, an explanation of the reasons for doing so. 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 its 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 two Executive Directors: Ian Harebottle and 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 BEE Partner, 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.
In addition to these requirements of all directors, the role of a non-executive has the following key elements:
The Company has established an Audit and Sustainability Committee, Remuneration Committee and Nomination Committee with formally delegated duties and responsibilities.
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 three times 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
The Remuneration 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. Under its terms of reference, it is required to meet [twice] a year 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
The Nomination Committee will 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 once a year.
Committee: Lord Robin Renwick (chair), Mike Daigle, Linda Beal, Mike Nunn, Machiel Reyneke
The Company will adopt, with effect from Admission, 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 MAR and of the AIM Rules for Companies.
The Company has adopted an anti-corruption and bribery policy which applies to the Board and employees of the Company and Group. It generally 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.
Kropz plc is incorporated in the UK, with registered offices at Suite 4F Easistore Building, North Farm Estate, Tunbridge Wells, TN2 3EY.
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, Republic of Congo and Ghana.
At 30 June 2019 the following interests of shareholders in excess of 3%, have been notified to the Company.
Company’s issued share capital as at 30 June 2019 consists of 283,406,307 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 283,406,307.
The percentage of AIM securities in public hands is approximately 18%.
Last updated on 30 June 2019.
There are no restrictions on the transfer of securities.
The admission document contains financial information up to 31 December 2017, and interim information up to June 2018.
Annual Report and Accounts for the period ended 31 December 2018 24 June 2019 | (3MB)
Grant Thornton UK LLP, 30 Finsbury Square, London EC2A 1AG
H&P (Advisory) Limited, 2 Park Street, Mayfair, London W1K 2HX
Mirabaud Securities Limited, 5th Floor, 10 Bressenden Place, London SW1E 5DH
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 Ghanaian Law:
Bentsi-Enchill Letsa and Ankomah, 4 Momotse Avenue, P.O. Box GP 1632, Accra
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 and Reporting Accountants to the Company:
BDO LLP, 55 Baker St, Marylebone, London W1U 7EU
Elandsfontein Competent Person: SRK Consulting (South Africa) (Pty) Ltd, 265 Oxford Road, Illovo 2196, Johannesburg
Aflao Competent Person: Snowden Mining Industry Consultants (Pty) Ltd, Technology House, Greenacres Office Park, Victory Park 2195, Johannesburg
Hinda Competent Person: SRK Consulting (UK) Limited, 21 Gold Tops, Newport, South Wales, NP20 4PG
The UK City Code on Takeovers and Mergers applies to the Company.
Following the recent consultation by the London Stock Exchange, new AIM Rules were published in March 2018. One of the key amendments is in respect of AIM Rule 26 (as set out in AIM Notice 50), which now requires AIM companies 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 27 November 2018.
|APPLICATION||HOW KROPZ COMPLIES||DEPARTURES AND REASONS||LINKS|
|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 of Directors has set out the vision for Kropz for the medium to long term.
The Board of Directors will meet on a regular basis to discuss the strategic direction of the Company, and progress in achieving against its aims.
Kropz provides detailed disclosure on the Company’s business model and strategy in the Admission Document.
|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 of Directors with experience in understanding the needs and expectations of its shareholder base. It supplements this board with professional advisers in the form of public relations company, NOMAD, brokers and auditor who provide advice and recommendations in various areas of its communications with shareholders.
Kropz engages with shareholders in the following way:
|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.||Admission Document|
|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, customers, 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 and on which the business relies are its customers, workforce, suppliers, shareholders, local community and elements of regulatory framework.
|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-customer. 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 detailed description of all risks is provided in the Admission Document.
The Company’s system of risk identification, supported by established governance controls, ensures that it effectively responds to such risks, whilst acting ethically and with integrity for the benefit of all of our stakeholders. Once identified, 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 create a prioritised risk register and 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 will be identified and responsibilities assigned. The Company’s management is responsible for monitoring the progress of actions to mitigate key risks. The risk management process is continuous; key risks will be reported to the Audit Committee and at least once a year to the full Board.
|MAINTAIN A DYNAMIC MANAGEMENT FRAMEWORK|
|5. Maintain the board as a well-functioning, balanced team led by the chair.|
|The board members have a collective responsibility and legal obligation to promote the interests of the company, and are collectively responsible for defining corporate governance arrangements. Ultimate responsibility for the quality of, and approach to, corporate governance lies with the chair of the board. The board (and any committees) should be provided with high quality information in a timely manner to facilitate proper assessment of the matters requiring a decision or insight. The board should have an appropriate balance between executive and non-executive directors and should have at least two independent non-executive directors. Independence is a board judgement. The board should be supported by committees (e.g. audit, remuneration, nomination) that have the necessary skills and knowledge to discharge their duties and responsibilities effectively. Directors must commit the time necessary to fulfil their roles.||
The Board has seven directors, five of whom are non-executive. The Board is responsible for the management of the business of the Company, setting its strategic direction and establishing appropriate policies. It is the directors’ responsibility to oversee the financial position of the Company and monitor its business and affairs, on behalf of the shareholders, to whom they are accountable. The primary duty of the Board is to act in the best interests of the Company at all times. The Board also addresses issues relating to internal controls and risk management.
The Board is comprised of two Executive Directors: Ian Harebottle and Mark Summers and five Non-Executive Directors (NEDs). Three NEDs are considered fully independent: Lord Renwick of Clifton, Linda Beal and Michael Daigle. The remaining two NEDs, Mike Nunn and Machiel Reyneke, are not considered independent. Michael Nunn is a major shareholder of the Company, and Machiel Reyneke is the board representative of the Company’s BEE Partner, the ARC Fund.
The non-executive directors bring a wide range of skills and experience to the Company. The independent NEDs also bring independent judgment on strategy, risk and performance.
The Board of Directors will meet on a quarterly basis as a full board.
The Chairman of the Board, Lord Robin Renwick of Clifton, is also the 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 will be supported by the two other independent NEDs and Mike Nunn who is not considered independent but is on the committee due to his previous experience and the fact that he is aligned with shareholders’ interests by virtue of his holding in the Company.
Machiel Reyneke, a non-independent NED is on the audit committee. Machiel’s financial experience, and representation on a number of other listed Audit Committees deem him suitably qualified to serve on the Committee.
|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 of Kropz 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 can be found by following the link opposite.
Together the Board of Directors 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 Directors keep their skillsets up to date as required through the range of roles they perform and consideration of technical and industry updates.
The Board has not sought external advice on any significant matter, apart from advice sought in the listing process from our NOMAD, brokers, auditors and lawyers.
|7. Evaluate board performance based on clear and relevant objectives, seeking continuous improvement.|
|The board should regularly review the effectiveness of its performance as a unit, as well as that of its committees and the individual directors. The board performance review may be carried out internally or, ideally, externally facilitated from time to time. The review should identify development or mentoring needs of individual directors or the wider senior management team. It is healthy for membership of the board to be periodically refreshed. Succession planning is a vital task for boards. No member of the board should become indispensable.||Kropz has yet to carry out a formal assessment of board effectiveness, given its stage of development as an entity. The Board are considering how this first assessment will be carried out.||
Kropz has yet to carry out a formal assessment of board effectiveness.
The board will keep this under consideration and put in place procedures when it is felt appropriate.
|8. Promote a corporate culture that is based on ethical values and behaviours.|
|The board should embody and promote a corporate culture that is based on sound ethical values and behaviours and use it as an asset and a source of competitive advantage. The policy set by the board should be visible in the actions and decisions of the chief executive and the rest of the management team. Corporate values should guide the objectives and strategy of the company. The culture should be visible in every aspect of the business, including recruitment, nominations, training and engagement. The performance and reward system should endorse the desired ethical behaviours across all levels of the company. The corporate culture should be recognisable throughout the disclosures in the annual report, website and any other statements issued by the company||Refer to the Kropz Anti-Corruption Policy and Code of Ethics for a description of how the Board promotes a culture based on sound ethical values.
The Board of Directors 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 program.
The Board as a whole is collectively responsible for promoting the success of the Company by directing and supervising the Company’s affairs.
The roles of the board can be described as follows:
The Board of Directors of Kropz plc has adopted this code of ethics, to promote the practice of honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest; promoting the full, fair, accurate, timely and understandable disclosure of the Company's performance and financial results in accordance with applicable disclosure standards; and to promote compliance with the applicable governmental laws, rules and regulations in each of the jurisdictions in which we operate.
The Company has an employee handbook setting out the standards of behaviour it expects of all employees. This is supported by staff training and support as it is fundamental that our people understand the needs of our culture and the regulatory environment in which the Company operates.
|None||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.||
Kropz has adopted the QCA Code on Corporate Governance.
The board has appointed a number of subcommittees to assist in its activities.
The terms of reference of the board committees are reviewed regularly and are available on the Company’s website www.kropz.com.
The Remuneration and Nomination Committee consists of Lord Robin Renwick of Clifton (Committee Chairman), Linda Beal, Mike Daigle and Mike Nunn. The Remuneration and Nomination Committee meets [twice] a year. It is responsible for reviewing the performance of the senior executives and for determining their levels of remuneration. The committee also considers the composition of and succession planning for the Board, and to lead the process of appointments to the Board.
The Audit Committee consists of Lord Robin Renwick, Machiel Reyneke and Linda Beal (Committee Chairman). The Audit Committee meets at least twice a year to consider the annual and interim financial statements and the audit plan. The Audit Committee is responsible for ensuring that appropriate financial reporting procedures are properly maintained and reported upon, reviewing accounting policies and for meeting the auditors and reviewing their reports relating to the financial statements and internal control systems. The role of Company Secretary is fulfilled by Mark Summers.
The two Executive Directors commit their time fully to their roles, while the five Non-Executive Directors commit at least [number] days per year attending Board and Committee Meetings.
|None||Chairman’s Corporate Governance Statement|
|10. Communicate how the company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders.|
|A healthy dialogue should exist between the board and all of its stakeholders, including shareholders, to enable all interested parties to come to informed decisions about the company. In particular, appropriate communication and reporting structures should exist between the board and all constituent parts of its shareholder base. This will assist: the communication of shareholders’ views to the board; and the shareholders’ understanding of the unique circumstances and constraints faced by the company. It should be clear where these communication practices are described (annual report or website).||
The Company’s intends that its principal communication channels for its governance structure will be through its Annual Report and website disclosures. As required under the QCA Corporate Governance Code, the Annual Report will include a Corporate Governance Statement, a Report of the Audit Committee and a Report from the Remuneration Committee.
As discussed above, the Company will make regular announcements on its performance and intends to have dialogue with shareholders through the AGM and meetings with shareholders.
|The website will be updated to serve as a suitable platform for communications with shareholders and other relevant stakeholders.|
Refer to the Press release section