The Board of Fox Marble Holdings plc has adopted the QCA Corporate Governance Code (‘the Code’) as its code of corporate governance.  The Code is published by the Quoted Companies Alliance (‘QCA’) and is available at www.theqca.com.  The key governance related matter that occurred during the financial year ended 31 December 2020 was the response of the Board to ongoing impact of COVID 19 on the business and wider industry.

The QCA Code sets out 10 principles that should be applied. These are listed below together with a short explanation of how the Company applies each of the principles:

Principle One

Business Model and Strategy

The Board has concluded that the highest medium and long-term value can be delivered to its shareholders by the adoption of a single strategy for the Company.  The principal activity of the Group is the exploitation of marble quarry reserves in the Republic of Kosovo and the Republic of North Macedonia.

The Board implements this strategy by meeting on a regular basis to discuss the strategic direction of the Company, and progress in achieving against its aims.  Details on the Company’s strategy can be found in the strategic report of the Annual Report 2020.

Principle Two

Understanding Shareholder Needs and Expectations

The Board is committed to maintaining good communication and having constructive dialogue with its shareholders.  Fox Marble 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, Broker, Auditor and Company Secretary who provide advice and recommendations in various areas of its communications with shareholders.  Fox Marble engages with shareholders in the following ways:

·       The Company website has been designed as a hub to provide information to shareholders and communicate with them.  The website is regularly reviewed to ensure the information is up to date and relevant.  The website contains copies of all Company communications and public documents.

·       The Company provides regular updates to the market via the Regulatory News Service.

·       The Company’s Annual Report provides required information regarding historical performance, strategy and objectives of the Company.  An Annual General Meeting is held to which all shareholders are invited and may engage with the Board of Directors.

·       Contact details for the Company are provided on the Company website along with public documents.

Principle Three

Considering Wider Stakeholder and Social Responsibilities

The Board recognises that the long-term success of the Company is reliant upon the efforts of the employees of the Company and its contractors, suppliers, regulators and other stakeholders.  The Board has put in place a range of processes and systems to ensure that there is close oversight and contact with its key resources and relationships.  For example, employees are encouraged to raise any concerns they may have with relevant management and are also provided with independent contact should they not want to engage directly with their managers.  The mechanisms for feedback from shareholders have been considered under point (2) above.  Feedback from customers is at present informal.  Sales agents will contact customers on an ad hoc basis following completion of a sale or project and provide verbal feedback where necessary to senior management.  Feedback from regulators is provided via the regular framework of reporting and inspections that are carried out.

These feedback processes help to ensure that the Company can respond to new issues and opportunities that arise to further the success of the Company.

Principle Four

Risk Management

Fox Marble recognises that risk is inherent in all of its business activities.  Its risks can have a financial, operational or reputational impact.  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 are reported to the Audit Committee and at least once a year to the full Board.

The Directors have established procedures, as represented by this statement, for the purpose of providing a system of internal control.  An internal audit function is not considered necessary or practical due to the size of the Company and the close day to day control exercised by the executive Directors.  However, the Board will continue to monitor the need for an internal audit function.

Principle Five

A Well-Functioning Board of Directors

The Board has five Directors, three 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 and stakeholders at all times.  The Board also addresses issues relating to internal controls and risk management.

The Non-Executive Directors, Andrew Allner, Roy Harrison and Sir Colin Terry, bring a wide range of skills and experience to the Company, as well as independent judgment on strategy, risk and performance.  The independence of each Non-Executive Director is assessed at least annually, and all of the Non-Executive Directors are considered to be independent at the date of this report.

It is the Group’s policy that the roles of the Chairman and CEO are separate, with their roles and responsibilities clearly divided and recorded.  A summary of their roles is as follows:

·       The Chairman is responsible for leadership of the Board, ensuring its effectiveness and setting its agenda.  The Chairman facilitates the effective contribution and performance of all Board members whilst identifying any development needs of the Board.  He also ensures that there is enough and effective communication with shareholders to understand their issues and concerns.

·       The CEO is responsible for executing the strategy agreed by the Board and developing the Group objectives through leadership of the senior executive team.  He will recommend to the Board any investment or new business opportunities which meet this strategy.  He also ensures that the Group’s risks are adequately addressed, and appropriate internal controls are in place.  The CEO is responsible for meeting with shareholders and ensuring effective communication.

·       The CEO is responsible for the day-to-day management of the Company, and for maintaining the highest ethical standards and integrity in the interest of the shareholders, employees, customers and the wider community.

The following table shows the directors’ attendance at scheduled Board meetings, which they were eligible to attend during the 2020 financial year:

As at the date hereof the Board comprised, the Non-Executive Chairman Andrew Allner, the CEO Chris Gilbert, the Finance Director Fiona Hadfield and two Non-Executive Directors, Roy Harrison and Sir Colin Terry.  Biographical details of the current Directors are set out within Principle Six below.  Executive and Non-Executive Directors are subject to re-election at intervals of no more than three years.  The letters of appointment of all Directors are available for inspection at the Company’s registered office during normal business hours.

Principle Six

Appropriate Skills and Experience of the Directors

The Board of Fox Marble 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 on pages 20 and 21 of the Annual Report 2020.

Together the Board of Directors provide relevant quarrying and mining sector skills, the skills associated with running large public companies, technical skills, country experience and technical and financial qualifications to assist the Company in achieving its stated aims.

The Directors keep their skillsets up to date through as required through the range of roles they perform and consideration of technical and industry updates.

The Board has sought external advice in regard to Arbitration against the government of Kosovo.  Other than this matter the Board has not sought advice on any significant matter, apart from advice sought in the normal course of business from our auditors, lawyers and tax compliance advice.  No external advisers have been engaged by the Board of Directors.  The key advisers to the Company are listed on page 21 of these financial statements.

The role of Company Secretary is fulfilled by Ben Harber and supports and advises the Board in its function.

The Board shall review annually the appropriateness and opportunity for continuing professional development whether formal or informal.

Principle Seven

Evaluation of Board Performance

Fox Marble 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.  The Board will keep this under consideration and put in place procedures when it is felt appropriate.

The Company’s policy is to maintain levels of compensation for the Group that are comparable and competitive with peer group companies, so as to attract and retain individuals of the highest calibre, by rewarding them as appropriate for their contribution to the Group’s performance.  The Company may take independent advice in structuring remuneration packages of directors and employees.

The terms of each Executive Director’s appointment are set out in their service agreements which are effective for an indefinite period but may be terminated in accordance with specified notice periods of between six and twelve months.  Each service agreement sets out details of basic salary, fees, benefits-in-kind and share option grants. The Directors do not participate in any group pension scheme and their remuneration is not pensionable.

The executive directors are eligible to participate in discretionary bonus arrangements.  Bonuses are payable in cash and are awarded by the Board, upon recommendations by the Remuneration Committee.  Details of the Directors’ compensation are set out in the notes to the financial statements.

The terms of appointment of the Non-Executive Directors are set out in their letters of appointment which are effective for renewable three-year terms but may be terminated in accordance with specified notice periods.  The Non-Executive Directors do not participate in any group pension scheme and their remuneration is not pensionable.  Details of Non-Executive Directors’ compensation are set out below.

The basic salary of each Executive Director is established by reference to their responsibilities.  The fees paid to Non-Executive Directors are determined by the Board and reviewed periodically to reflect current rates and practice commensurate with the size of the Company and their roles.

Principle Eight

Corporate Culture

The Board recognises that their decisions regarding strategy and risk will impact the corporate culture of the Company as a whole and that this will impact the performance of the Company.  The Board is very aware that the tone and culture set by the Board will greatly impact all aspects of the Company as a whole and the way that employees behave.  The corporate governance arrangements that the Board has adopted are designed to ensure that the Company delivers long term value to its shareholders and that shareholders have the opportunity to express their views and expectations for the Company in a manner that encourages open dialogue with the Board.  A large part of the Company’s activities is centred upon what needs to be an open and respectful dialogue with employees, clients and other stakeholders.

Therefore, the importance of sound ethical values and behaviours is crucial to the ability of the Company to successfully achieve its corporate objectives.  The Board places great importance on this aspect of corporate life and seeks to ensure that this flows through all that the Company does.  The Directors consider that at present the Company has an open culture facilitating comprehensive dialogue and feedback and enabling positive and constructive challenge.  The Company has adopted, with effect from the date on which its shares were admitted to AIM, a code for Directors’ and employees’ dealings in securities which is appropriate for a company whose securities are traded on AIM and is in accordance with the requirements of the Market Abuse Regulation which came into effect in 2016.

Principle Nine

Maintenance of Governance Structures and Processes

Ultimate authority for all aspects of the Company’s activities rests with the Board, the respective responsibilities of the Chairman and Chief Executive Officer arising as a consequence of delegation by the Board.  The Board has adopted appropriate delegations of authority which set out matters which are reserved to the Board.  The Chairman is responsible for the effectiveness of the Board, while management of the Company’s business and primary contact with shareholders has been delegated by the Board to the Chief Executive Officer.

The terms of reference of the board committees are reviewed regularly and are available on the Company’s website www.foxmarble.net.

Remuneration Committee

The Remuneration Committee consists of Andrew Allner, Sir Colin Terry and Roy Harrison (Committee Chairman).  It is responsible for reviewing the performance of the senior executives and for determining their levels of remuneration.  The Committee makes recommendations to the Board, within agreed terms of reference regarding the levels of remuneration and benefits including participation in the Company's share plan. 

Nomination Committee

The Nomination Committee meets as required to consider the composition of and succession planning for the Board, and to lead the process of appointments to the Board.  The Committee Chairman is Andrew Allner.  The other members of the Committee are Chris Gilbert, Roy Harrison and Sir Colin Terry.

Audit Committee

The Audit Committee consists of two Non-Executive Directors: Roy Harrison and Sir Colin Terry (Committee Chairman).  Andrew Allner attends the Committee meetings by invitation.  The Audit Committee meets at least three times 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 report of the Audit Committee can be found on page 33.

Non-Executive Directors

The Board has adopted guidelines for the appointment of Non-Executive Directors which have been in place and which have been observed throughout the year.  In accordance with the Companies Act 2006, the Board complies with: a duty to act within their powers; a duty to promote the success of the Company; a duty to exercise independent judgement; a duty to exercise reasonable care, skill and diligence; a duty to avoid conflicts of interest; a duty not to accept benefits from third parties and a duty to declare any interest in a proposed transaction or arrangement.

Principle Ten

Shareholder Communication

The Board is committed to maintaining good communication and having constructive dialogue with its shareholders.  The Company has close ongoing relationships with its private shareholders.  Institutional shareholders and analysts have the opportunity to discuss issues and provide feedback at meetings with the Company.  In addition, all shareholders are encouraged to attend the Company’s Annual General Meeting.  Historical annual reports and other governance-related material, notices of all general meetings over the last five years can be found on the website.  

There have been no votes where a significant proportion of votes (e.g. 20% of independent votes) have been cast against a resolution at any general meeting.