Corporate Governance Website Disclosure
To the extent applicable, and to the extent able (given the current size and structure of the Company and the Board), the Company has adopted the Quoted Companies Alliance Corporate Governance Code. Details of how the Company complies with the Code, and the reasons for any non-compliance, are set out below, together with the principles contained in the Code.
Prior to the formal adoption of the Code, the Company has, for a number of years, operated in compliance with recommendations of the QCA, in so far as the size of the Company and its Board permitted. For that reasons no significant changes in governance related matters have been needed. No key governance matters have arisen since the publication of the last Annual Report.
In light of the Company’s size and nature, the Board considers that the current Board is a cost effective and practical method of directing and managing the Company. As the Company’s activities develop in size, nature and scope, the size of the Board and the implementation of additional corporate governance policies and structures will be reviewed.
The principles set out in the Code which require disclosure on the website and the required disclosure are set out in the table below.
|Principle 2: Seek to understand and meet shareholder needs and expectations|
|The share register may be analysed as follows:
It follows that the posting of the Annual Report and AGM notice to all registered shareholders may be of value to as few as the holders of 0.4% of the total shares.
Notices under S793, CA2006 have been sent to all nominee holdings of more than 1% of the share capital, to disclose the beneficial owners of the shares. Replies indicate that some 80% by number of individual shareholders are holding their shares in nominee names and are therefore not receiving documents posted by the Company.
Given the problems in direct communication with shareholders the Company seeks to communicate with shareholders by indirect methods. Announcements through RNS are as full as possible. Social media are used as a means of communication, and the Company has adopted a strict policy relating to the use of social media.
The CEO, Russell Lamming, attends and presents at investor forums wherever possible as well as holding discussions with mining analysts, shareholders and investment managers, and holding webcasts to answer individual shareholder’s questions directly.
|Principle 3: Take into account wider stakeholder and social responsibilities and their implications for long-term success|
|The Company’s only current operations are in the Togolese Republic. The Board identifies the primary stakeholders in Togo as being the Government of Togo and the local communities where the Nayega mine (“Nayega”) is situated.
The board has been negotiating for a considerable time with the Government over the terms of the proposed exploitation licence, to ensure that there is a reasonable balance of benefits for the Company and for Togolese Republic. While Togo has a substantial mining industry, the main commodity produced in the country is phosphate, and there is no precedent that the Company is aware of for a licence to mine manganese. A protocol to form the basis of the exploitation licence has been agreed. An environmental impact assessment has also been agreed as part of the preparation for the extraction and beneficiation of a 10,000 tonne bulk sample which the Company is currently undertaking.
Nayega itself is in the north of Togo, approximately 400 miles from the capital, Lome.
Approximately half of the population of Togo are either Christians or Muslims, but the people in the area of Nayega are predominantly followers of indigenous beliefs.
In preparing for the bulk sample the Company has followed the advice of the authorities in Lome to comply with local religious practices.
In addition to the creation of employment, the Company is expecting to agree a social and labour plan prior to the commencement of commercial mining.
|Principle 7: Evaluate board performance based on clear and relevant objectives, seeking continuous improvement.|
|In view of the small size of the board and the changed roles undertaken by board members, the Directors do not believe that it is practical to undertake an external or a wide ranging evaluation of the performance of board members. On the basis of an informal evaluation the Board considers recent performance to have been successful in achieving the Company’s objectives.
The primary task for the then CEO, Dave Reeves, was to finance the Company’s Australian gold exploration business, either through Keras or independently in Australia. This was successfully achieved in June 2017 when this business was reversed into a shell company and relisted on the Australian Securities Exchange (“ASX”) as Calidus Resources Limited. The effect of this transaction was to increase the equity attributable to the Company’s shareholders, as disclosed in the audited financial statements at 30 September 2017, from £1.06m to £21.4m. Dave Reeves was required to continue as CEO of Calidus and therefore stepped down to become a non-executive director of the Company.
As the Company is a passive shareholder in Calidus and does not seek to influence any of its decisions, Keras resolved to refocus on its African assets.
Russell Lamming was appointed CEO of the Company in March 2018. His primary tasks were to bring the Nayega manganese project in Togo into production and obtain an exploitation licence, as well as seeking other mining projects for the Company. The other board members consider that Russell Lamming has made excellent progress in Togo, having negotiated an agreement to produce a 10,000 tonne bulk sample which is fully financed by the end user, and it is hoped that successful completion of the bulk sample will facilitate the grant of the exploitation licence.
After a period of disappointment caused primarily by the collapse in iron ore prices, it is considered that the Company, through the work of its executives, has made excellent progress towards its stated goals.
Succession planning will continue when the Company’s operations going forward develop further.
|Principle 8: Promote a corporate culture that is based on ethical values and behaviours.|
|The board intends to promote a corporate culture based on sound ethical values and behaviours. At this time, however, there are no employees other than the three directors, two of whom are non-executive, and the Company has not yet commenced commercial mining at the Nayega manganese project in Togo. In this context, ethical policies will need to be adopted as and when the exploitation licence permitting commercial mining to commence is received.|
|Principle 9: Maintain governance structures and processes that are fit for purpose and support good decision-making by the board|
|The corporate governance structures which the Company is able to operate are restricted by the small size of the Board, which is itself dictated by the current size of the Company’s operations. With this limitation, the Board is dedicated to upholding the highest possible standards of governance and probity.
The chairman, Brian Moritz:
The CEO, Russell Lamming:
The remuneration committee is chaired by Dave Reeves and comprises Dave Reeves and Brian Moritz. It meets on an ad hoc basis when required.
The audit committee is chaired by Brian Moritz and comprises Brian Moritz and Dave Reeves. It normally meets twice per annum to consider the interim and final results. In the latter case the auditors are present, and the meeting considers and takes action on any matters raised by the auditors arising from their audit.
Matters reserved for the Board include:
|Principle 10: Communicate how the company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders|
|Shareholders are encouraged to participate at the Company’s AGM, ensuring that there is a high level of accountability and identification with the Group’s strategy and goals. Brian Moritz and Russell Lamming were present at the AGM in March 2018, and Dave Reeves was available to answer questions by telephone from Australia if required. However, only one other shareholder was present in person.
Proxy votes were received from approximately 11% of total voting rights. The Board attribute this low level of response to the difficulty in receiving notices or other documents where shares are held in CREST under the names of nominees, and the failure of some nominees to comply with voting instructions. A summary of the proxy voting at the 2018 AGM is as follows:
Resolutions 1 – Approval of financial statements; 3 – Reappointment of auditors; and 4 – Authority to allot shares, were approved unanimously.
Resolution 5 – Dis-application of pre-emption rights, was opposed by approximately 0.8% of votes cast (approximately 0.09% of total shares).
Resolution 2 – reappointment of Russell Lamming, was opposed by approximately 9.5% of the votes cast (approximately 1.0% of total shares). These votes were cast by a single shareholder and the CEO has subsequently engaged in a constructive dialogue with him.
Annual reports and notices of general meetings are included separately in the appropriate section of this website.