FOX MARBLE
HOLDINGS PLC
ANNUAL REPORT
& FINANCIAL STATEMENTS
2020
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Index
Index ................................................................................................................................................... 1
Introduction .......................................................................................................................................... 3
Chairman’s statement ............................................................................................................................. 4
Strategic Report ..................................................................................................................................... 6
Directors ............................................................................................................................................... 17
Report of the Directors ........................................................................................................................... 19
Corporate Governance Report .................................................................................................................. 23
Report of the Audit Committee................................................................................................................. 28
Statement of directors’ responsibilities in respect of the financial statements ................................................. 31
Independent auditor’s report to the members of Fox Marble Holdings Plc ...................................................... 32
Consolidated Statement of Comprehensive Income..................................................................................... 39
Consolidated Statement of Financial Position.............................................................................................. 40
Consolidated Statement of Cash Flows ...................................................................................................... 41
Consolidated Statement of Changes in Equity ............................................................................................ 42
Statement of Financial Position of the parent company ............................................................................... 43
Statement of Changes in Equity of the parent company .............................................................................. 44
Notes to the consolidated and parent company financial statements ............................................................. 45
Notice of General Meeting ....................................................................................................................... 76
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Introduction
Fox Marble Holdings plc (“Fox Marble” or “Company”) is a marble company focused on the extraction and processing
of dimension stone from quarries in Kosovo and the Republic of North Macedonia. Established in 2011, Fox Marble
acquired the rights to over 300 million cubic metres of a range of premium quality marble. Fox Marble is the first
UK quoted company investing and operating primarily in Kosovo, and the first to be producing and marketing high
quality marble.
Fox Marble’s long-term goal is to expand its portfolio of quarries and production capacity, and to create a premium
marble brand through which Kosovo and the Balkan region is established as a major centre of marble production.
Highlights for the year ended 2020
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During the year the Group signed a number of significant new contracts to supply marble to large scale
municipal and private projects in Kosovo. These include projects to supply stone to Suhareka and
Podujeva town centres, as well as contracts to provide stone to large scale building developments, such
as C&C apartments. These projects are expected to be completed over 2021 and 2022.
Significant increase in factory processing rates with 29,737 square metres of slabs processed
(2019 – 10,349 square metres) and over 24,000 square metres of tile and cut to size material processed
(2019 – 8,882 square metres).
Total production of 6,060 tonnes of marble at the Prilep Alpha and Cervenillë quarries (2019 – 14,370
tonnes) following stoppages due to COVID-19. Production was restarted in September 2020 in Cervenillë
quarry due to demand for Grigio Argento material for the processed marble contracts.
Revenue for the year of €0.7 million (2019 – €1.4 million). Revenue from the sale of processed marble
increased 224% to €0.6 million (2019 – €0.1 million) driven by a number of large-scale contracts signed
for projects in Kosovo. Revenue from the sale of block marble fell to €0.1 million from €1.2 million as a
result of the impact of the COVID-19 pandemic on the marble market.
Operating loss for the year of €2.6 million (2019 – loss of €2.3 million). Loss for the year of €2.8 million
(2019 – loss of €2.5 million).
Adjusted EBITDA of €1.4 million (2019 – €1.6 million).
In June 2020, the Company completed a placing raising £0.8m before expenses to provide working
capital in the face of the unfolding COVID-19 pandemic. Furthermore the Company reached agreement
with the holders of £2.1 million of its cumulative unsecured loan notes (“CULNs”). Under this agreement
the Company has replaced the eight existing series of CULNs with a new single class of CULN which have
a maturity date of 1 December 2026 and are convertible at any date from 1 June 2020 at a conversion
price of 5 pence per share. The interest rate of the new CULN is 2% per annum payable half yearly on
1 June and 1 December. The Company continues to carefully manage its working capital.
Highlights year to date 2021
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Contract signed for the next stage of the Podujeva project, and new projects in Kamenice and Mitrovice.
The Company now has contracts in place to supply €1.6 million of processed material over 2021 and
2022.
Appointment of Dentons Europe CS LLP and Samuel Wordsworth QC and secured funding to bring the
€195 million arbitration case against the Republic of Kosovo to its conclusion.
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Chairman’s statement
Dear Shareholders,
It has been a very challenging year in exceptional circumstances, but I believe Fox Marble has demonstrated its
resilience and agility, in protecting our employees and sustaining our operations. The marble industry, like many
industries has been hit hard by the COVID-19 pandemic. The international block market which requires travel to
physically inspect blocks, which formed the majority of our trade in 2019, suffered significant setbacks. In the face
of these challenges Fox Marble has focused on securing working capital, restructuring its debt obligations, and
growing its processed marble trade within Kosovo.
Our primary focus during this period has been ensuring the health and wellbeing of our employees, customers and
suppliers through observing strict Covid 19 protocols, including social distancing, hygiene measures and closure or
limited working of operations during peak periods of infections.
The factory capacity and sale of processed marble has been a significant highlight of this year. The Group has
secured several large-scale municipal and non-municipal contracts within Kosovo. It has used targeted capital
spending to increase rates of tile processing in the factory. Together these have increased sales of processed marble
by over 200%. Since year end, the Group has continued to win new contracts in the region and now has a solid
order book for the factory expected to be realised through 2021 and 2022.
The sale of block marble has been significantly impeded by the COVID-19 pandemic and there continues to be
significant downward pressure on pricing, as the industry deals with ongoing repercussions. Whilst we expect block
sales to see some recovery in 2021 as travel opens up, we do not expect a return to pre-pandemic levels for some
time. Lockdowns and travel restrictions put additional pressure on our operations as they went through the phases
of temporary shutdowns and the subsequent re-opening and ramp-up of operations.
Operating losses for the year increased to €2.6 million (2019 – €2.3 million), driven by lower sales and a higher than
usual stock provision recognised of €0.9 million (2019 – €0.3 million), driven by pressure on pricing.
Fox Marble continues to examine opportunities to grow its marble reserve base and is currently examining potential
sites in Kosovo. COVID-19 restrictions as well as elections in Kosovo have slowed progress in assessing these sites,
however the Group continues to keep an eye on its long-term development.
Our Arbitration case brought against the government of Kosovo has progressed since December 2020 with the
appointment of Dentons CS LLP as solicitors and Sam Wordsworth as QC. We expect to announce the appointment
of our Arbitrator within the next few months, which will be a significant step in proceedings.
The Stone Alliance project remains part of the Group’s long term plan, but progress on this matter is currently
dependent on the outcome of the arbitration proceedings.
Sales at the start of 2021 have continued to be affected by Covid-19 as well as recent elections in Kosovo that have
delayed approval of municipal funds to projects, and have been lower than initial expectations. However, work on
the municipal contracts announced so far began in earnest in May 2021 and we expect to see significant growth
through the second half of the year. We have contracts for the supply of processed marble of €1.6 million in Kosovo
alone, together with a strong pipeline of future opportunities. The Company will be carefully considering how
capacity can be grown at the processing factory to allow us to take full advantage of these opportunities.
Our cash position as at 30 May 2021 was €0.8 million, including €0.4 million of litigation funding. Through what has
been a very tough year we continue to monitor and control working capital. The Board has carefully considered it
responsibilities around assessment of going concern, and consider the going concern assumption is appropriate. In
doing so the Board has considered its forecasts, the pipeline of sales and its ability to raise further funds if necessary.
We note that the Company has a loan note of €1.8 million due by 8 August 2021 and to which the Company is
currently in the process of negotiating an extension. We are confident that we can secure this concession, and that
if such an extension cannot be secured we believe we have sufficient alternative options available to us to ensure
that our obligations are met. Further details on the judgments involved can be found on page 21.
I would like to thank all our employees who are very committed and hardworking, and, importantly have embraced
our vision to establish Kosovo and the Balkans as a major supplier of high-quality marble worldwide.
Andrew Allner
Non-Executive Chairman
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Reports
Pages 6 to 16 comprise the Strategic report, pages 19 to 22 the Report of the Directors and pages 23 to 27 the
Corporate Governance Report, all of which are presented in accordance with the UK Companies Act. The liabilities
of the Directors in connection with these reports shall be subject to the limitations and restrictions provided by such
law. These reports are intended to provide information to shareholders and are not designed to be relied upon by
any other party for any other purpose.
Disclaimer
This Annual Report and Financial Statements may contain certain statements about the future outlook for Fox Marble
Holdings Plc and its subsidiaries. Although we believe our expectations are based on reasonable assumptions, any
statement about the outlook may be influenced by factors that could cause actual outcomes and results to be
materially different.
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Strategic Report
Our Vision
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Establish Kosovo and the Balkans as a centre for marble, providing a core business on which to build
a new stone industry in the region.
Build on the unique opportunities of a large resource, low costs of production, a highly trained
workforce and proximity to major markets to create a profitable business.
•
Bring premium quality marble to the global market in volume and at competitive prices.
Sales and marketing
ç
Figure 1 – Podujeva Project
Processed marble sales
Sales of processed marble have increased to €0.6 million from €0.2 million in 2019, of which €0.45 million occurred
in H2 2020. A number of new contracts were signed for processing services and processed marble which formed the
backbone of sales through the end of 2020 and are expected to continue into 2021.
•
•
The Suhareka square in Kosovo contract, announced on 14 April 2020, to supply up to 20,000 square metres
of paving. Material already specified and contracted under the first two stages of the project has a total value
in excess of €400,000, and once all 20,000 square metres have been supplied the project is expected to be
worth in excess of €750,000, as announced on 13 May 2020. Fox Marble has supplied over 10,000 sqm of
material since June 2020. To date the Company has supplied in excess of €0.3 million of material on this
project.
A contract to supply 20,000 square metres of cut and finished paving tiles for installation in the town square
for the Municipality of Podujeva in Kosovo, announced on 30 July 2020. Fox Marble began supplying material
for this project in August 2020 and has supplied over 4,000 square metres of material to date. The Company
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received confirmation of Phase II of the project in January 2021, and the total value of this contract is around
€700,000 over 2020 and 2021, as announced on 30 July 2020 and a further update announcement released by
the Company on 4 February 2021.
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A contract to supply 35,000 square metres of cut and polished tiles to CC Apartments LLC, was announced on
23 June 2020. CC Apartments LLC is engaged in developing several prestigious projects including apartments
in Kosovo, as well as Albania and surrounding countries. Fox Marble will be processing blocks of a range of
marble from its own quarries for this project and supplying this material from its factory in Kosovo over the
course of 2021. The total value of the contract is in excess of €700,000.
A contract to supply 6,500 square metres of cut and finished paving tiles for installation in the town square for
the Municipality of Kamenica in Kosovo. Fox Marble will be processing blocks of a range of marble from its own
quarries for this project and supplying this material from its factory in Kosovo over the course of 2021. The
total value of the contract is in excess of €160,000.
Block sales
Sales of block marble have fallen significantly in 2020 from €1.2 million in 2019 to €0.1 million in 2020 due to the
impact of COVID-19 on block marble sales.
The prominence of China in the block marble market meant that sales of block marble showed a sharp drop from
the start of 2020. As international borders were closed and the outbreak spread through Europe, the decision was
made to temporarily close the quarry at Prilep for the safety of staff and to preserve working capital.
The Prilep quarry was reopened in August 2020 and the board will continue to watch the progress on the block
market closely.
As travel restrictions lift in 2021, the Group expects to see growth in block sales. However, the impact of the COVID-
19 pandemic has caused significant pressure on pricing, as marble companies try to offload excess stock and raise
working capital. Furthermore, the disruption to global shipping, which has significantly increased the cost of
shipping, has dampened the demand for marble blocks. As such whilst we expect to see growth in the sales of block
marble in 2021, we do not expect a return to normality for some time.
Figure 2 – Finishing work in the factory
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Factory
A 5,400 square metre double skinned steel factory for the cutting and processing of blocks into polished slabs and
tiles has been erected on a 10-hectare site that the Company acquired in Lipjan in 2013, close to Pristina airport in
Kosovo.
In 2020, Fox Marble has focused on developing the local market for its processed material and range of products
from cut and polished tiles to stair pieces, door and window lintels to slabs, which is driving increased production at
the factory.
In June 2020, the Company announced that it had acquired two additional automatic CNC cutting machines to be
installed in its factory in Kosovo. The two machines were manufactured by Simec Srl and Garcia Ramos SA and with
the existing Gravellona Machine Marmo CNC machine has doubled the capacity to cut tiles. The machines have been
installed and are now fully operational. This will help underpin the 3-year factory expansion plan currently being
developed by the COO/GM Sales.
The machines, and procedural improvements implemented have helped drive an increase in processing volumes
from 2019 to 2020. The factory processed 29,737 square metres of slabs in 2020 (2019 – 10,349 square metres)
and over 24,000 square metres of tile and cut to size material processed (2019 – 8,882 square metres).
We continue to examine ways to increase levels of production and operating efficiency through 2021, despite COVID-
19 related restrictions.
Figure 3 – Prilep Quarry
Quarry Operations
Prilep
The Company entered into an agreement to operate a quarry in Prilep, North Macedonia in 2013. The agreement
was for a period of 20 years with an irrevocable option to extend the period for a further 20 years thereafter. The
Prilep quarry contains highly desirable white marbles, Alexandrian White and Alexandrian Blue. This is one of a small
cluster of quarries, in the Stara river valley, overlooked by the Sivec pass. Quarrying operations were stopped in
April 2020 as a result of the unfolding COVID 19 crisis. It was re-opened in August 2020, though to a limited level.
Production in 2020 was 4,955 tonnes (2019 – 11,520 tonnes).
A royalty of 35% of gross revenue is payable to the original licence holder of the quarry.
The Company also has the rights to an additional adjacent quarry, Prilep Omega, which it acquired in 2014. The
Company has not yet developed this quarry.
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Cervenillë
This site was the first of our quarries to be opened in November 2012. It is being exploited across three separate
locations (Cervenillë A, B & C) from which red (Rosso Cait), red tinged grey (Flora) and light and darker grey (Grigio
Argento) marble is being produced in significant quantities. The polished slabs from this quarry have sold well. The
most noteworthy sales included those to St George PLC (Berkeley Homes) for the prestigious Thames riverside
Chelsea Creek development in London.
In 2016, the decision was made to focus quarry resources at the nearby Maleshevë quarry to accelerate development
to address expected demand. Quarry staff and equipment were therefore re allocated from this quarry. Production
was re-started in September 2020 to address the anticipated upcoming demand for Grigio Argento from existing and
future contracts. Production in 2020 was 1,112 tonnes (2019 – Nil).
Figure 4 – Quarry at Cervenillë
Syriganë
The quarry at Syriganë is open across four benches. The site contains a variety of the multi-tonal breccia and
Calacatta-type marble and produces significant volumes of breccia marble in large compact blocks. Output is
marketed as Breccia Paradisea (predominantly grey and pink) and Etrusco Dorato (predominantly gold and grey).
Growing marble reserves base and the opening of new quarries in Kosovo
The foundation of a successful and growing natural stone company is its reserves base. Fox Marble’s strategy is to
seek to grow this over the medium term, finding and aiming to open on average at least one new quarry a year in
opportunity rich Kosovo. For 2020, two new potential quarries were identified and after initial examination of the
resource the Company secured the licence over one new quarry site. Progress on developing the quarry is expected
to start in 2021, subject to an initial drilling programme. This will provide the opportunity to increase both block
sales and processed marble from the factory from the end of 2021 onwards.
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Maleshevë
In October 2015, the Company acquired the rights to a 300-hectare site close to the Company’s existing licence
resource in Maleshevë from a local company. By November 2015, this quarry had been opened and the first blocks
extracted and sent for testing. The quarry was operated subject to an agreement with the licence holder, Green
Power Sh.P.K (“Green Power”), a company incorporated in Kosovo, which granted Fox Marble’s Kosovan subsidiary
the rights to develop and operate the quarry, in return for a royalty arrangement.
The quarry contained a mixture of Illirico Bianco, Illirico Superiore and the silver-grey marble Illirico Selene. The
initial market response to both the Illirico Selene and Illirico Bianco was significant and to address this anticipated
demand the Company has invested significant resources and effort since 2016 to accelerate the development of
these quarries to produce multiple open high-volume benches capable of producing blocks in the quantities to meet
demand. The Company quarried 2,850 tonnes during 2019 (2018 – 7,278 tonnes).
On 4 April 2019, Fox Marble announced it had conditionally acquired the entire share capital of Green Power, for a
consideration of £1,000,000 to be satisfied by the issue of 13,000,000 new ordinary shares in the Company at a
price that equates to 7.69 pence per share. However, prior to approval of the issue of shares at the Company’s AGM
in June 2019, Green Power announced their intention to breach the agreed acquisition contract and blocked Fox
Marble’s access to the quarry site.
Quarry production at the Maleshevë quarry in Kosovo was stopped in July 2019 as a result of the ongoing dispute
with Green Power Sh.P.K.. The Company has filed civil claims in Kosovo against Green Power Sh.P.K. for breach of
contract and damages, in addition to the wider Arbitration case launched against the Government of Kosovo, as
announced in September 2019. Further details on the arbitration claim can be found below.
Arbitration Proceedings
On 4 September 2019, Fox Marble launched United National Commission on International Trade Law (UNCITRAL)
arbitration proceedings, against the Republic of Kosovo for damages in excess of €195 million, as a result of the
failure of the State to protect Fox Marble’s rights over the Maleshevë quarry.
The Company believes the Kosovan Government to be in clear breach of its responsibilities towards the Company as
a foreign investor in Kosovo and that this action is in the best interests of its shareholders and employees. The
Company anticipates a fair and satisfactory resolution. All the Company’s other operations, including the quarries
and processing factory in Kosovo and the Prilep quarry in Northern Macedonia, are unaffected.
The background to the claim is the dispute arising with the former shareholders of Green Power Sh.P.K and Scope
Sh.P.K, which has resulted in Fox Marble being prevented from operating the Maleshevë quarry. Since the dispute
arose, Fox Marble has been working to resolve the matter with the appropriate Kosovan Government agencies,
namely the Kosovo mining regulator, the Independent Commission of Mines and Mineral (“ICMM”) and the Agjencia
e Regjistrimit të Bizneseve (“ARBK”), the Kosovo business registration agency. However, in what is a clear breach of
Kosovo Law 04/L-220 “On Foreign Investment” (2014), Fox Marble has been prevented from asserting its rights in
these matters.
Despite the cumulative weight of evidence, Fox Marble was denied the right to appeal any decision relating to the
Maleshevë quarry in direct contravention of the provisions of the Kosovo foreign investment law, Law 04 /L-220. As
a direct consequence of the ARBK and ICMM decisions, the Company has brought arbitration proceedings against
the Republic of Kosovo pursuant to Article 16 of the Kosovo foreign investment law (as above). The basis of the claim
for damages is the investment made to date in the Maleshevë quarry, loss of future revenues associated with the
site and future investment plans in Kosovo. Significant future investment plans are the subject of the MOU signed
in October 2016 by the Government of Kosovo and Stone Alliance LLC which is majority owned by Fox Marble.
On the 16 December 2020 the Company announced that it had engaged the services of Dentons CS Europe LLP to
act on the Company’s behalf in its circa €195 million claim against the Republic of Kosovo. Dentons have agreed a
fee arrangement which enables Fox Marble to bring the Arbitration through to its conclusion.
The Company announced the appointment of the eminent British Barrister and Queens Counsel, Samuel Wordsworth
QC of Essex Court Chambers on the 19 May 2021. He will work with Dentons Europe CS LLP, the world’s largest law
firm by number of lawyers, in support of the Company’s €195M claim against the Republic of Kosovo.
Financing
Please refer to the Report of the Directors for the going concern assessment by the Directors.
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COVID-19 Response
The spread of Coronavirus (COVID-19) continues to have a significant impact across industries worldwide, including
the marble extraction and processing market, given the changeable international travel and working restrictions in
place in many countries. The Board’s highest priority is the continued wellbeing of its employees, customers and
stakeholders both in the UK and Kosovo. Given the continued uncertainty on the potential impact and duration of
the COVID-19 pandemic, the Board has taken pre-emptive steps not only to ensure the well-being of those affected,
but also to best position the Company for future operations.
In line with many other nations, Kosovo introduced a number of measures to try and curb the further spread of
COVID-19, including travel restrictions, school closures and closures of non-essential shops and venues. To date
some restrictions have been lifted, however travel continues to be tightly controlled.
Fox Marble’s factory operations were permitted to continue, as it fell within a designated sector. The Company
continued to operate the factory, though with scaled back operations. Extra distancing procedures to protect our
workforce were implemented. Operations were slowly increased over the summer.
Demand for block marble fell significantly as a result of travel restrictions placed on China, the principal buyers of
the Company’s block marble, since January 2020. The spread of the virus into Europe and the resulting impact on
cross border travel and trade has magnified this effect. The Company elected to suspend production at the quarries
during 2020 in order to keep operational cash flow neutral until the international block marble market returns to
normality. Operations at the Prilep quarry were re-started in August 2020, and at Cervenillë in September 2020,
prior to the normal winter stoppage.
Whilst quarrying operations were temporarily suspended, the Company sought to eliminate all unnecessary
expenditure and the Board offered to not take any salary or fees until operations resumed. Head Office staff in
London were placed on furlough through to June 2020.
Stone Alliance Project
In October 2016, Fox Marble announced that Stone Alliance LLC, a new company formed and 59% owned by Fox
Marble, signed a non-binding Memorandum of Understanding with the Parliament of Kosovo with the aim of creating
a world class new stone industry for Kosovo. The Company has been granted Commercial Advocacy by the Advocacy
Centre of the United States Department of Commerce, ensuring the company benefits from the active support of
the US Government. Through submission of exploration licences, Stone Alliance now has exclusive rights for a 40-
year period to 40 quarry sites offering a variety of marble and dimension stone. Stone Alliance intends to raise a
minimum €100m from external sources to facilitate the opening of 40 proposed marble quarries and factories over
a five-year period in the region with a view to establishing Kosovo as a global presence in the stone industry, creating
in excess of 2,000 jobs.
Fox Marble’s role, in addition to being a major shareholder within the Stone Alliance project, will be as follows:
•
•
To provide expertise on technical matters, including quarry operations, gained from having been the sole marble
quarry owner and operator in the region; in addition, Fox Marble will provide management and strategic
services to Stone Alliance in the initial phases of the operations allowing Stone Alliance to progress more quickly
in its development. These services will be provided by Fox Marble at cost plus an agreed margin.
To provide the sales and marketing platform to sell Stone Alliance material. Fox Marble will provide access to
its customer database and use of the Fox Marble brand to facilitate the entry of the Stone Alliance product to
the market. Fox Marble will act as a sales agent and in return it will earn a commission on sales of the Stone
Alliance product.
•
The Chairman and CEO of Fox Marble Holdings Plc both sit on the board of Stone Alliance.
Progress on the Stone Alliance is on hold pending the resolution of the arbitration proceedings.
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Materials
Alexandrian White is a predominantly white, fine-
grained sculpture-grade dolomitic marble. Quarried at our
Prilep Alpha quarry in North Macedonia, the grey marking
on this stone can vary from largely linear stripes to an
attractive dappling.
Grigio Argento ranges in colour from almost blue grey to
a warmer tone. It has an impressive dense quality and
attractive white to gold veining. It can be quarried and
processed to maximise or minimise the presence and
effect of fossils. This versatile stone comes from our
Cervenillë quarry in Kosovo.
Alexandrian Blue New for 2019 this comes from the
same Prilep quarry as the Alexandrian White in North
Macedonia. The unusual and attractive blue grey banding
is far denser than in any of the Alexandrian White but the
white remains to establish the full tonal range on larger
pieces.
Flora comes from the same quarry as the Grigio Argento
and Rosso Cait, this is both technically similar to them and
transitional between them in colour. The transitional
character of the stone yields a broad colour and pattern
range.
Breccia Paradisea is one of two fine and crystalline
breccias from Syriganë in northern Kosovo. It has red as
the highlight colour over the grey and white background it
shares with its twin, Etrusco Dorato. The gold of the
Etrusco lifts the other colours where it is present.
Etrusco Dorato exhibits a dominant gold colour over a
grey and white field, complemented by the reds also to be
found in the Breccia Paradisea. Single slabs are striking.
Book matched they are stunning.
Rosso Cait is the red complement to Grigio Argento and
Flora and comes from the same quarry, Cervenillë. This
stone, which exhibits some colour and fossil marking
variation, works well as a highlight or bold statement
colour.
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Results
Key Performance Indicators 2020 2019
Number of operational quarries 4 4
Quarry production (tonnes) 6,060 14,370
Revenue €715,900 €1,422,872
Average recorded selling price (blocks per tonne) €120 €217
Average recorded selling processed (per sqm) €28 €28
EBITDA (€2,435,315) (€2,022,027)
Operating loss for the year (€2,637,872) (€2,273,673)
Loss for the year (€2,804,371) (€2,533,540)
Expenditure on property, plant and equipment €89,503 €649,015
The Group recorded revenues of €715,900 in the year ended 31 December 2020 (2019 – €1,422,872). Revenues
for the year fell as a direct result of the Covid-19 pandemic’s effect on block sales, partially offset by significant
growth in the sale of processed marble. The Group incurred an operating loss of €2,637,872 for the year ended
31 December 2020 (2019 – €2,273,673). The operating loss reflects the fall in block revenues due to the impact of
the COVID-19 pandemic. In addition, the Company has recognised an additional provision of €926,762 on the stock
held by the Group due to the impact of the market disruption caused by the pandemic on block pricing. The average
recorded selling price per sqm for processed material remained consistent with the prior year. The fall in the selling
price per sqm for block material has been driven by the disruption of COVID 19 on the international block market.
The Group incurred a loss after tax for the year ended 31 December 2020 of €2,804,371 (2019 – €2,533,540).
Reconciliation of EBITDA to Loss for the year
Year to Year to
31 December 31 December
2020 2019
€ €
Loss for the year before tax (€2,924,086) (2,533,540)
Plus/(less):
Net finance costs/(income) 286,214 259,867
Depreciation 158,751 207,850
Amortisation 43,807 43,796
EBITDA (2,435,315) (2,022,027)
Plus/(less):
Inventory provision 927,841 392,412
Share option charge 21,355 –
(1,486,119) (1,629,615)
The Company does not anticipate payment of dividends until its operations become significantly cash generative.
Sustainable development
Fox Marble aims to build and maintain relationships based on trust and mutual benefit with its stakeholders.
Preventing and managing social and environmental risks, while seeking opportunities for improvement, are critical
to maintaining the Group’s competitiveness and capacity to grow.
Risk
Fox Marble recognises that risk is inherent in 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 our
stakeholders.
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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 considered 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 Group’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 following risk factors, which are not exhaustive, are particularly relevant to the Group’s business activities:
Operational risks
The activities of the Group are subject to the hazards and risks associated with natural resource companies. These
risks and uncertainties include, but are not limited to, environmental hazards, industrial accidents, geological
problems, unanticipated changes in rock formation characteristics, encountering unanticipated ground or water
conditions, land slips, flooding, levels of wastage, periodic interruptions due to the interruption of utilities, inclement
or hazardous weather conditions and other acts of God or unfavourable operating conditions.
Should any of these risks and hazards affect the Group’s operations, it may cause the cost of production to increase
to a point where it would no longer be economic to extract stone from the Group’s quarries, require the Group to
write-down the carrying value of one or more quarries, cause delays or a stoppage of mining and processing, result
in the destruction of mineral properties or processing facilities, cause death or personal injury and related legal
liability, any and all of which may have a material adverse effect on the Group.
Risks to personnel are mitigated through the implementation of robust health and safety training and practices,
supported by detailed procedures. Oversight of the Group’s procedures lies with the Board of Directors. The Group
has instilled a zero-tolerance attitude for safety incidents at all levels of operations, with rules incorporated into
operational procedures, safety manuals and all communications on safety. All significant incidents on site are
required to be reported to the Board of Directors. Other operational risks are mitigated using trained personnel,
detailed monitoring of operations on a technical and geological basis to ensure that issues are identified and
addressed promptly. No significant incidents were reported in the current or previous year.
Quarry development risk
Several of the Group’s quarries are at an early stage of development. As a result, there can be no assurance that
the colour, texture, quality and other characteristics of the marble slabs processed, and blocks mined from the
quarries will be consistent with the material that has been quarried to date. In addition, the mineralogical and
chemical composition, bulk density, hardness, water absorption and mechanical properties of marble quarried may
change as the resource is further exploited. If the marble extracted is of a lower quality than expected, then demand
for, and the realisable price of, the Group’s marble may be lower than expected.
The Group mitigates these risks with the use of highly trained quarry personnel and geologists, and the detailed
assessment of the resource including, where appropriate, drilling, technical surveys and third-party reviews. Further,
the Group maintains a broad portfolio of quarry projects and prospects with enough potential in terms of inferred
and indicated resources.
Production and sales risk
There can be no assurance that the Group will be profitable in the future. The Group expects to continue to incur
losses unless and until such time as some or all the quarries are at a level of development which allows the
production of commercially significant volumes of material and generation of sufficient revenues to fund continuing
operations.
The Group is at an early stage in the development of its sales and customer base. The Group’s level of historical
sales is low, and the volume of sales is anticipated to grow significantly. The Group has invested in the development
of its customer base through marketing initiatives to develop awareness of its brand and product.
To mitigate production risk, quarry operations have approved business plans and targets while working within strict
working capital controls and robust budgeting and cost control processes.
Environmental risks and hazards
All phases of the Group’s operations are subject to environmental regulation in Kosovo and North Macedonia.
Environmental legislation is evolving in a manner that may require stricter standards and enforcement, increased
fines and penalties for non-compliance, more stringent environmental assessments of proposed projects and a
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PAG E | 15
heightened degree of responsibility for companies and their officers, directors and employees. There is no assurance
that existing or future environmental regulation will not adversely affect the Group’s business, financial condition
and results of operations. Environmental hazards may exist on the properties on which the Group holds interests
that are unknown to the Group at present and that have been caused by previous or existing owners or operators
of the properties.
To mitigate this risk, the Group has developed and is rolling out policies and procedures to ensure environmental
standards are met in excess of current local legislation. The Group will continue to monitor evolving standards within
each of its operating environments.
Political and regulatory risk
The Group’s operating activities are subject to laws and regulations governing expropriation of property, health and
worker safety, employment standards, waste disposal, protection of the environment, mine development, land and
water use, mineral production, exports, taxes, labour standards, occupational health standards, toxic wastes, the
protection of endangered and protected species and other matters.
Kosovo has less developed legal systems than more established economies which could result in risks such as: (i)
effective legal redress in the courts of such jurisdictions, whether in respect of a breach of law or regulation, or in
an ownership dispute, being more difficult to obtain; (ii) a higher degree of discretion on the part of governmental
authorities; (iii) the lack of judicial or administrative guidance on interpreting applicable rules and regulations; (iv)
inconsistencies or conflicts between and within various laws, regulations, decrees, orders and resolutions; or (v)
relative inexperience of the judiciary and courts in such matters.
To mitigate this risk the Group takes an active role in industry and other stakeholder engagement processes with
the local government.
In September 2019 Fox Marble launched an Arbitration claim against the government of Kosovo. Further information
on this action can be found on page 73.
Key personnel risk
Key personnel risk is the risk of losing either a member of the Board or one of the Group’s key quarrying or sales
professionals. This could have an adverse effect on the ability of the business to complete its operational plans.
To mitigate this risk, the Group’s management has put in place plans to ensure skills development and retention and
proactive recruitment processes are in place.
Capital risk
The Group’s objectives when managing capital are to safeguard its ability to continue as a going concern in order to
provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to
reduce the cost of capital.
In order to maintain or adjust the capital structure, the Group may issue new shares or sell assets to reduce debt.
Consistent with others in the industry, the Group monitors capital based on the gearing ratio. This ratio is calculated
as net debt divided by total capital. Net debt is calculated as total borrowings (including ‘current and non-current
borrowings’ as shown in the consolidated balance sheet) less cash and cash equivalents. Total capital is calculated
as ‘equity’ as shown in the consolidated balance sheet, plus net debt.
COVID-19
The outbreak of the recent global COVID-19 virus has resulted in business disruption and stock market volatility.
The extent of the effect of the virus, including its long-term impact, remains uncertain. The Group has implemented
extensive business continuity procedures and contingency arrangements to ensure that they are able to continue to
operate. The Group’s activities expose it to several risks including cash flow risk, liquidity risk and foreign currency
risk. Disclosure of management’s objectives, exposure and policies in relation to these risks can be found in note 21
to these financial statements.
Fox Marble does not expect to be significantly impacted by the expected departure of the United Kingdom from the
European Union, due to the location of its operations and most of its customer base being located outside the EEC.
The Board will continue to monitor the situation in order to address and mitigate associated risks as they arise.
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Section 172(1) Statement – Promotion of the Company for the
benefit of the members as a whole
The Directors believe they have acted in the way most likely to promote the success of the Company for the benefit
of its members as a whole, as required by s172 of the Companies Act 2006.
The requirements of s172 are for the Directors to:
•
•
•
•
•
•
Consider the likely consequences of any decision in the long term,
Act fairly between the members of the Company,
Maintain a reputation for high standards of business conduct,
Consider the interests of the Company’s employees,
Foster the Company’s relationships with suppliers, customers and others, and
Consider the impact of the Company’s operations on the community and the environment.
The Company continues to progress the development of its existing projects in Kosovo and North Macedonia. The
application of the s172 requirements can be demonstrated in relation to the some of the key decisions made during
2019:
•
•
•
Continuing evaluation of existing licence areas and assessment of potential new licence areas;
Undertaking feasibility studies as part of the assessment of new projects or significant capital expenditure; and
Continued assessment of corporate overheads, expenditure levels and wider market conditions.
As a mining Group operating in Kosovo and North Macedonia, the Board takes seriously its ethical responsibilities to
the communities and environment in which it works. We abide by the local and relevant UK laws on anti-corruption
& bribery. Wherever possible, local communities are engaged in the geological operations & support functions
required for field operations, providing much needed employment and wider economic benefits to the local
communities. In addition, we follow international best practise on environmental aspects of our work. Our goal is to
meet or exceed standards, in order to ensure we maintain our social licence to operate from the communities with
which we interact. The interests of our employees are a primary consideration for the Board. Personal development
opportunities are supported and a health and security support network is in place to assist with any issues that may
arise on our quarries.
Finally, I would like to thank all our staff and our Board colleagues for their unstinting efforts on behalf of Fox Marble.
On behalf of the board
Chris Gilbert
Chief Executive Officer
4 June 2021
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Directors
Andrew Allner, Non-Executive Chairman
Andrew is currently Non-Executive Chairman of Shepherd
Building Group Ltd and SIG PLC. He was Non-Executive
Chairman of Marshalls plc, and Go-Ahead Group plc and Non-
Executive Director and Chairman of the Audit Committee of CSR
plc and Northgate plc and Senior Independent Director and
Chairman of the Audit Committee of AZ Electronic Materials SA.
Previously Andrew was Group Finance Director of RHM plc,
taking a lead role in its flotation on the London Stock Exchange
and its subsequent sale to Premier Foods plc. He was CEO of
Enodis plc and also served in senior executive positions with
Dalgety plc, Amersham International plc and Guinness plc. He
was a partner at PricewaterhouseCoopers LLP and is a graduate
of Oxford University. Andrew has been Non-Executive Chairman
since 2012 and also chairs the nomination committee and sits
on the remuneration committee.
Chris Gilbert, CEO
In 1992, Chris co-founded Infectious Records, an independent
record company which grew to be one of the most successful
independent record companies in the UK. Following this he
founded Auriga Networks, a satellite transmission company
which numbered among its clients NATO, the British and US
Army, BBC, Fox Television and CBS News. In addition, Chris co-
founded DarkStar Technologies, a high tech start up providing
internet security and data management services to the
entertainment industry. Chris co-founded Crosstown Songs, a
buy and build music publishing venture funded by Cargill which
became a major independent music publishing company which
was sold to KKR / Bertelsmann. Chris has been CEO since the
formation of the Company in 2011.
Fiona Hadfield, Finance Director
Fiona Hadfield is a chartered accountant. She previously worked
with Deloitte LLP. Fiona joined Crosstown Songs as Chief
Financial Officer, overseeing all financial aspects of the
company’s disposal of assets to KKR and Bertelsmann. Fiona is
a graduate of Oxford University. Fiona joined Fox Marble as
Finance Director in 2011.
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Sir Colin Terry KBE CB DL FREng, Non-Executive Director
Sir Colin spent 37 years in the Royal Air Force reaching the rank
of Air Marshal. He was Chief of Staff at RAF Logistics Command,
Chief Engineer (RAF) and Air Officer Commanding-in-Chief at
RAF Logistics Command, and RAF Board member for logistics.
He was Group Managing Director at Inflite Engineering and
Chair of the Engineering Council (UK) in addition to being a
senior advisor to both Safran and Alenia Aermacchi for several
years. In addition, Sir Colin was Non-Executive Chairman of
Meggit plc, and AviaMediaTech Ltd. Sir Colin is currently a Non-
Executive Chairman of Boxarr Ltd. He is the former Executive
Chairman of Centronic Group Ltd and former Non-Executive
Chairman of Centronic Ltd and a Non-Executive director of
Aveillant Limited. He is also a Fellow of the Royal Academy of
Engineering and of Imperial College, and a Deputy Lieutenant in
Buckinghamshire. Sir Colin has been a Non-Executive Director
of Fox Marble since 2012 and also chairs the audit committee
and sits on the remuneration and nomination committees.
Roy Harrison OBE, Non-Executive Director
A former Chief Executive of the Tarmac Group, Senior Non-
Executive Director at the BSS Group and President of the
Construction Products Association, Roy also served as Non-
Executive Chairman of the AIM listed Renew Holdings plc and
has held Non-Executive roles in a number of private
construction products companies. Roy is Chairman of the
Thomas Telford Multi Academy Trust having spent 25 years
establishing and running new or rescued Schools under the
Thomas Telford Banner. Roy has been a Non-Executive Director
of Fox Marble since 2012 and also chairs the remuneration
committee and sits on the audit and nomination committees.
Independent Auditors
Principal Bankers
PKF LittleJohn LLP
15 Westferry Circus,
Canary Wharf,
London E14 4HD
Nominated advisor
Cairn Financial Advisers LLP
Cheyne House
Crown Court
62-63 Cheapside
London EC2V 6AX
HSBC Bank plc
70 Pall Mall,
London
SW1Y 5EZ
Registrars
Computershare
The Pavilions,
Bridgwater Road,
Bristol
BS13 8AE
Advisers
Company Secretary
Ben Harber
60 Gracechurch Street,
London,
EC3V 0HR
Brokers
Brandon Hill Capital Ltd
1 Tudor Street,
London
EC4Y 0AH
Allenby Capital Ltd
5th Floor
5 St Helen’s Place
London
EC3A 6AB
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PAG E | 19
Report of the Directors
The Directors present their report and the audited financial statements of the Group and Company for the year ended
31 December 2020.
Principal Activities
The principal activity of Fox Marble Holdings plc (“Fox Marble” or “Company”) and its subsidiary and associate
companies (the “Group”) is the exploitation of marble quarry reserves in the Republic of Kosovo and the Republic of
North Macedonia.
A detailed business review of the year and future developments is included in the Chairman’s statement and
Strategic Report on pages 6 to 16.
Results and Dividends
The Group’s results are set out in the consolidated statement of comprehensive income on page 39. The audited
financial statements for the year ended 31 December 2020 are set out on pages 39 to 74.
The Group incurred an operating loss €2,637,872 for the year ended 31 December 2020 (2019 – €2,273,673). The
Group incurred a loss after tax for the year ended 31 December 2020 of €2,804,371 (2019 – €2,533,540).
The Company does not anticipate payment of dividends until the operations become significantly cash generative.
Further detail is included in the Strategic Report on pages 6 to 16.
Directors
The Directors of Fox Marble Holdings plc who served during the year and up to the date of signing the financial
statements were:
Andrew Allner
Chris Gilbert
Fiona Hadfield
Roy Harrison OBE
Sir Colin Terry KBE CB DL
Directors’ interests in the share capital of the Company
The interests of the directors who held office during the year ended 31 December 2020 in the shares of the Company
are given below.
As at 31 December As at the date
Director 2020 of this report
Andrew Allner 2,518,997 2,518,997
Chris Gilbert 21,384,456 21,384,456
Fiona Hadfield – –
Roy Harrison 10,088,554 10,088,554
Sir Colin Terry 959,587 959,587
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Significant Shareholders
Fox Marble Holdings plc has been notified as of 28 May 2021 of the following interests in excess of 3% of its issued
share capital:
Number of % of issued
ordinary shares share capital
Andrew Muir 38,734,685 10.22%
Premier Miton Group Plc 27,665,169 7.30%
Dr Etrur Albani 22,472,254 5.93%
Mr Chris Gilbert 21,384,456 5.64%
Shailesh Patil 19,047,619 5.03%
Artemis Investment Management LLP 13,495,807 3.56%
Mr Dominic RN Redfern 12,038,888 3.18%
Spreadex Ltd 11,422,305 3.06%
The Group does not provide any third-party qualifying indemnity provisions or qualifying pension scheme indemnity
provisions.
Strategic Report
The Company has chosen, in accordance with Section 414C of the Companies Act 2006, to set out the following
information in the Strategic Report which would otherwise be required to be contained in the Directors’ Report:
•
•
•
•
Financial risk management objectives;
Indication of exposure to principal risks;
Disclosures required by s172 of the Companies Act 2006;
Future developments of the business.
The Impact of COVID-19 on the Group
Since March 2020, the Board has made preparations to mitigate the impact of COVID-19 on the business through
several action plans and mitigation strategies. These will continue to be monitored and updated as required.
The Impact of Brexit on the Group
The Board has considered the extent of challenges to our business model and operations arising from the withdrawal
of the United Kingdom from the European Union (“Brexit”). The Board does not envisage Brexit having a significant
impact on the Group, based on the location of its operations and most of its customer base being located outside
the EU. The Board will continue to evaluate the impact on the Group accordingly.
Supplier payment policy
The Group’s current policy concerning the payment of trade creditors is to follow the CBI’s Prompt Payers Code
(copies are available from the CBI, Centre Point, 103 New Oxford Street, London WC1A 1DU).
The Group’s current policy concerning the payment of trade creditors is to:
•
•
•
settle the terms of payment with suppliers when agreeing the terms of each transaction;
ensure that suppliers are made aware of the terms of payment by inclusion of the relevant terms in contracts;
and
pay in accordance with the Group’s contractual and other legal obligations.
Corporate Governance
The Board of Directors is committed to developing and applying high standards of corporate governance appropriate
to the Company’s size and stage of development. The Board of Directors seeks to apply the QCA Code, revised in
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PAGE | 21
April 2019 as devised by the Quoted Companies Alliance. These disclosures can be found in the Corporate
Governance Report.
Internal controls and financial risk management
The Board acknowledges its responsibility for maintaining appropriate internal control systems and procedures to
safeguard the Group’s assets, employees and the business of the Group. The directors have recognised the changing
requirements of the Group as it has developed from a private company start-up through re-registration as a public
company and admission to trading on AIM, to a growing multi-asset operating Group.
The Board has established and operates a policy of continuous review and development of appropriate financial,
operational, compliance and risk management controls, which cover expenditure approval, authorisation and
treasury management, together with operating procedures consistent with the accounting policies of the Group.
The internal control system is designed to manage rather than eliminate the risk of failure to achieve business
objectives and can provide reasonable but not absolute assurance against material misstatement or loss.
The Board has approved the Group’s current operating and capital budget, and performance against budget is
monitored and reported to the Board on a monthly basis. The directors confirm that the effectiveness of the internal
control system during the accounting year has been reviewed by the Board. Steps are underway to reinforce as
needed all processes and systems as the Company grows. The Board does not consider it necessary to establish an
internal audit function considering the current size of the Group.
Environmental policy
The Group is aware of the potential impact that its subsidiary companies may have on the environment. The Group
ensures that it complies with all local regulatory requirements and seeks to implement a best practice approach to
managing the environmental aspects of its operations based on ISO 14001.
Health and Safety
Quarrying and stone processing will always carry risks. Protecting the safety of employees and contractors is of
fundamental importance. A safe and healthy workforce contributes to an engaged, motivated and productive
workforce that mitigates operational stoppages. Safety is also considered a principal risk. The Group’s aim is to
achieve and maintain a high standard of workplace safety. In order to achieve this objective the Group provides
training and support to employees and sets demanding standards for workplace safety. There were no significant
incidents or significant near misses in 2020. Throughout 2020, all operations continued to implement safety plans,
with a focus on effective management required to manage significant safety risks, learning and identifying potential
hazards, and promoting accountability. These will remain priorities in 2021, with the aim of ensuring that each of
our sites follows a consistent approach.
Independent Auditors
Each of the Directors at the date of the approval of this report confirms that:
–
–
so far as the Director is aware, there is no relevant audit information of which the Company’s auditors are
unaware; and
the Director has taken all the steps that they ought to have taken as a director in order to make themselves
aware of any relevant audit information and to establish that the Company’s auditors are aware of that
information.
PKF Littlejohn LLP have indicated their willingness to be reappointed at the Annual General Meeting.
Going Concern
The Directors have reviewed detailed projected cash flow forecasts and are of the opinion that it is appropriate to
prepare this report on a going concern basis. In making this assessment they have considered:
(a)
the current working capital position and operational requirements;
(b)
the timing of expected sales receipts and completion of existing orders;
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(c)
the sensitivities of forecast sales figures over the next two years;
(d)
the timing and magnitude of planned capital expenditure; and
(e)
the level of indebtedness of the company and timing of when such liabilities may fall due, and accordingly the
working capital position over the next 18 months.
In August 2021 the Company is due to repay the existing €1.8 million Gulf Loan Note. The Company is already in
discussion as to securing an extension to this loan note and is confident that it can secure such a concession,
however at this point the arrangements have not yet been finalised.
The forecasts assume that production at the Prilep and Cervenillë quarries will continue, which were reopened
respectively in August and September 2020. It further assumes that production at the factory will continue to
operate and that recently installed machinery will drive an increase in the rate of production. The forecast assumes
existing contracts held by the Company will be fulfilled on a timely basis. Furthermore, the forecasts assume that
sales of block marble will resume during 2021, in line with the reopening of international borders. Further the
Company is anticipating significant growth in revenue through the realisation of existing sale contracts and offtake
agreements as well as from newly generated sales.
There are several scenarios which management have considered that could impact the financial performance of the
Company. These include:
(a) The Company may not be able to secure an extension to the Gulf Marble Loan note, and the loan note may
become payable in full or in part in August 2021.
(b)
levels of production at Cervenillë and Prilep can be impacted by unforeseen delays due to inclement weather
or equipment failure; lower than expected quality of material being produced by the quarries;
(c) Fulfilment of the Company’s order book could be delayed, or the payment of amounts due under such contracts
could be delayed.
(d) The continued progression of the Covid-19 may have a further detrimental impact on sales or on operations,
and
(e) The resumption of block sales to the international block market may be slower than expected.
As at 31 May 2021 the Company had €0.8 million in cash including €0.4 million of restricted funds related to litigation
funding.
If the cash receipts from sales are lower than anticipated the Company has identified that it has available to it a
number of other contingent actions, in addition to those noted above, that it can take to mitigate the impact of
potential downside scenarios. These include seeking additional financing, leveraging existing sale agreements,
reviewing planned capital expenditure, reducing overheads and further renegotiation of the terms on its existing
debt obligations. On 1 May 2021, the Company entered into a facility arrangement of £1,000,000 at an interest rate
of 9% per annum arranged by Brandon Hill Capital Limited, which may be drawn down at the Company’s request.
This facility expires on 31 May 2022, and is undrawn at 31 May 2021. In addition to this the Company has agreed
a further facility of £700,000 with a non-related party high net worth individual, that can be used if required.
In conclusion having regard to the existing and future working capital position and projected sales, the Directors are
of the opinion that the application of the going concern basis is appropriate.
Signed, on behalf of the Board of Directors
Chris Gilbert,
Director
4 June 2021
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Corporate Governance Report
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.
Corporate Governance Report
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
on page 6.
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.
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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:
Attendance at
Attendance at Audit Committee
Director Board Meetings Meetings
Andrew Allner 8/8 2/2
Chris Gilbert 8/8 2/2
Fiona Hadfield 8/8 2/2
Roy Harrison OBE 7/8 2/2
Sir Colin Terry KBE CB DL 7/8 2/2
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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 17
and 18 of these financial statements.
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 18 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.
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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 28.
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.
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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.
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Report of the Audit Committee
This report details how the Audit Committee has met its responsibilities under its Terms of Reference in the last
twelve months. The Audit Committee focused particularly on the appropriateness of the Group’s financial
statements. The Committee has satisfied itself, and has advised the Board accordingly, that the 2020 Annual Report
and Financial Statements are fair, balanced and understandable, and provide the information necessary for
shareholders to assess the Group’s performance, business model and strategy. The significant issues that the
Committee considered in relation to the financial statements and how these issues were addressed are set out in
this Report.
One of the Audit Committee’s key responsibilities is to review the Group’s risk management and internal controls
systems, including in particular internal financial controls. During the year, the Committee carried out a robust
assessment of the principal risks facing the company and monitored the risk management and internal control
system on an on-going basis. The Committee also reviewed the effectiveness of both the external audit process as
part of the continuous improvement of financial reporting and risk management across the Group.
The Board has established an Audit Committee to monitor the integrity of the Company’s financial statements and
the effectiveness of the Group’s internal financial controls. The Committee’s role and responsibilities are set out in
the Committee’s terms of reference which are available from the Company and are displayed on the Group’s website.
The Terms of Reference are reviewed annually and amended where appropriate. During the year, the Committee
worked with management, the external auditors, and other members of the Board in fulfilling these responsibilities.
Committee membership and meetings
The Audit Committee consists of two independent non-executive Directors: Roy Harrison and Sir Colin Terry
(Committee Chairman). Andrew Allner attends the committee meetings by invitation. The biographies of each can
be found on pages 17 and 18. The Board considers that the Committee as a whole has an appropriate and
experienced blend of commercial, financial and industry expertise to enable it to fulfil its duties. The Committee met
two times during the year ended 31 December 2020 and all members of the Committee attended each meeting.
Each committee meeting was attended by the Group CEO and the Group Financial Director. The external auditors
may also attend these meetings as required. The Company Secretary is the secretary of the Audit Committee.
The Chairman of the Audit Committee also met with the external audit lead partner outside of committee meetings
as required throughout the year.
The Audit Committee report deals with the key areas in which the Audit Committee plays an active role and has
responsibility. These areas are as follows:
1) Financial Reporting and related primary areas of judgement;
2) The External Audit process; and
3) Risk Management and Internal controls.
Financial Reporting and related primary areas of judgement
The Committee is responsible for monitoring the integrity of the Group’s financial statements and reviewing the
financial reporting judgements contained therein. The financial statements are prepared by a finance team with the
appropriate qualifications and expertise.
The Committee confirmed to the Board that the Annual Report and Financial Statements, is fair, balanced and
understandable and provides the information necessary for shareholders to assess the Group’s position and
performance, business model and strategy.
In respect of the year to 31 December 2020, the Committee reviewed:
•
•
the Group’ s Interim Report for the six months to 30 June 2020; and
the Preliminary Announcement and Annual Report and Financial Statements to 31 December 2020.
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In carrying out these reviews, the Committee:
•
•
•
•
•
•
reviewed the appropriateness of Group accounting policies and monitored changes to and compliance with
accounting standards on an on-going basis;
discussed with management and the external auditors the critical accounting policies and judgements that had
been applied;
discussed a report from the external auditors at that meeting identifying the significant accounting and
judgemental issues that arose in the course of the audit;
considered the management representation letter requested by the auditors for any non-standard issues;
discussed with management future accounting developments which are likely to affect the financial statements;
and
considered key areas in which estimates, and judgement had been applied in preparation of the financial
statements.
The primary areas of judgement considered by the committee in relation to the Group’s 2020 financial statements,
and how they were addressed by the committee are set out below.
Significant risks considered by the Committee
in relation to the financial statements
Corresponding actions taken by the Committee
to address the issues
Impairment Assessment
Group’s ability to continue as a going concern
Valuation of Inventory
The Committee reviewed the key judgements, operating and
economic assumptions which underlie the assessment of
whether there are indications that assets may be impaired.
The external auditor reviewed management’s assessment
and discussed this review with the Committee.
The Committee reviewed the Group’s going concern
statement set out in the Report of the Directors. In
considering the assessments made, the Committee paid
attention to the robustness of the stress testing scenarios.
The external auditor reviewed management’s assessment
and discussed this review with the Committee.
The Committee reviewed the calculations and assumptions
provided by management which support the valuation of
inventory. The Committee reviewed the judgements around
the expected net realisable value of the inventory in
conjunction with
is
comfortable with the carrying value of inventory.
forecast sales. The Committee
External Audit Process
The Audit Committee has responsibility for overseeing the Group’s relationship with the external auditor including
reviewing the quality and effectiveness of their performance, their external audit plan and process, their
independence from the Group, their appointment and their audit fee proposals. Prior to commencement of the 2020
year-end audit, the Committee approved the external auditor’s work plan and resources and agreed with the
auditor’s various key areas of focus, including impairment, inventory and going concern. During the year the
Committee met with the external auditor without management being present. This meeting provided the opportunity
for direct dialogue and feedback between the Committee and the auditor. The Audit Committee considers the
requirements and guidance for auditor rotation on an annual basis and makes recommendations as appropriate to
the Company.
The Committee is responsible for ensuring that the external auditor is objective and independent. PKF Littlejohn LLP
was appointed in 2019, following a formal tender process in which several leading global firms submitted tenders
and presentations. This was the last formal tender process carried out by the Group. The Committee received
confirmation from the auditor that they are independent of the Group under the requirements of the Financial
Reporting Council’s Ethical Standards for Auditors. The auditors also confirmed that they were not aware of any
relationships between the Group and the firm or between the firm and any persons in financial reporting oversight
roles in the Group that may affect their independence.
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In order to further ensure independence, the Committee has a policy on the provision of non-audit services by the
external auditor that seeks to ensure that the services provided by the external auditor are not, or are not perceived
to be, in conflict with auditor independence. By obtaining an account of all relationships between the external auditor
and the Group, and by reviewing the economic importance of the Group to the external auditor, the committee
ensured that the independence of the external audit was not compromised. During the year the committee reviewed
and updated its policy on the engagement of external auditors and the provision of non-audit services in order to
bring it into full compliance with the EU audit reform legislation. An analysis of fees paid to the external auditor,
including non-audit fees, is set out in Note 6 to the 2020 Annual Report.
Risk Management and Internal controls
The Audit Committee has been delegated the responsibility for monitoring the effectiveness of the Group’s system
of risk management and internal control by the Board. The Audit Committee monitors the Group’s risk management
and internal control processes through detailed discussions with management and executive Directors, and the
external audit reports, as part of both the year-end audit, all of which highlight the key areas of control weakness
in the Group. All weaknesses identified by the external audit are discussed by the Committee with Group
management and an implementation plan for the targeted improvements to these systems is put in place. As part
of its standing schedule of business, the Committee carries out an annual risk assessment of the business to formally
identify the key risks facing the Group
This report was approved by the Board of Directors and signed on its behalf by:
Sir Colin Terry
Chairman of the Audit Committee
4 June 2021
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Statement of Directors’ responsibilities in respect of the
financial statements
The Directors are responsible for preparing the Annual Report and the financial statements in accordance with
applicable law and regulation.
Company law requires the Directors to prepare financial statements for each financial year. Under that law the
Directors have prepared the group financial statements in accordance with international accounting standards in
conformity with the requirements of the Companies Act 2006and parent company financial statements in accordance
with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising
FRS 101 “Reduced Disclosure Framework”, and applicable law). Under company law the directors must not approve
the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the
group and parent company and of the profit or loss of the group and parent company for that period. In preparing
the financial statements, the directors are required to:
•
•
select suitable accounting policies and then apply them consistently;
state whether applicable international accounting standards in conformity with the requirements of the
Companies Act 2006have been followed for the group financial statements and United Kingdom Accounting
Standards, comprising FRS 101, have been followed for the company financial statements, subject to any
material departures disclosed and explained in the financial statements;
• make judgements and accounting estimates that are reasonable and prudent; and
•
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the group
and parent company will continue in business.
The Directors are also responsible for safeguarding the assets of the group and parent company and hence for taking
reasonable steps for the prevention and detection of fraud and other irregularities.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the
group and parent company’s transactions and disclose with reasonable accuracy at any time the financial position of
the group and parent company and enable them to ensure that the financial statements comply with the Companies
Act 2006.
The Directors are responsible for the maintenance and integrity of the parent company’s website. Legislation in the
United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in
other jurisdictions.
Chris Gilbert
Director
4 June 2021
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Independent auditor’s report to the members of Fox
Marble Holdings Plc
Opinion
We have audited the financial statements of Fox Marble Holdings plc (the ‘parent company’) and its subsidiaries (the
‘group’) for the year ended 31 December 2020 which comprise Consolidated Statement of Comprehensive Income,
the Consolidated Statement of Financial Position, the Consolidated Statement of Cash Flows, the Consolidated
Statement of Changes in Equity, the Statement of Financial Position of the parent company, the Statement of
Changes in Equity of the parent company and notes to the financial statements, including significant accounting
policies. The financial reporting framework that has been applied in the preparation of the group financial statements
is applicable law and international accounting standards in conformity with the requirements of the Companies Act
2006. The financial reporting framework that has been applied in the preparation of the parent company financial
statements is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 101
Reduced Disclosure Framework (United Kingdom Generally Accepted Accounting Practice).
In our opinion:
•
•
•
•
the financial statements give a true and fair view of the state of the group’s and of the parent company’s affairs
as at 31 December 2020 and of the group’s and parent company’s loss for the year then ended;
the group financial statements have been properly prepared in accordance with international accounting
standards in conformity with the requirements of the Companies Act 2006;
the parent company financial statements have been properly prepared in accordance with United Kingdom
Generally Accepted Accounting Practice; and
the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law.
Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the
financial statements section of our report. We are independent of the group and parent company in accordance with
the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s
Ethical Standard as applied to listed entities, and we have fulfilled our other ethical responsibilities in accordance
with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the director's use of the going concern basis of
accounting in the preparation of the financial statements is appropriate. Our evaluation of the directors’ assessment
of the group’s and parent company’s ability to continue to adopt the going concern basis of accounting is described
within the key audit matters section of this report.
Based on the work we have performed, we have not identified any material uncertainties relating to events or
conditions that, individually or collectively, may cast significant doubt on the group's or parent company’s ability to
continue as a going concern for a period of at least twelve months from when the financial statements are authorised
for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the
relevant sections of this report.
Our application of materiality
The materiality applied to the group financial statements as a whole was €110,500 (2019: €120,000) based on
thresholds of 1.5% of net assets. The net asset benchmark was concluded as most relevant to shareholders and
investors for a mining group with projects in different stages of development and with external borrowings. The
performance materiality for the group was €66,300 (2019: €72,000). The threshold used for reporting unadjusted
differences to the audit committee was €5,525 (2019: €6,000).
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The materiality applied to the parent company financial statements was €99,450 (2018: €108,000) based on a
threshold of 1.5% of net assets but capped at 90% of group materiality. The net asset benchmark was concluded
as most relevant to shareholders and investors for a non-trading parent undertaking. The performance materiality
of the parent company was €59,670.
Whilst materiality for the group financial statements as a whole was set at €110,500, component materiality for the
significant components in Kosovo and the UK was set at €84,300 and €91,250 respectively based upon a stratified
proportional allocation of the maximum aggregate component materiality level. Performance materiality was set at
60% for the significant components equating to €50,580 and €54,750 respectively.
Our approach to the audit
In designing our audit, we determined materiality and assessed the risk of material misstatement in the financial
statements. In particular, we looked at areas involving significant accounting estimates and judgement by the
directors and considered future events that are inherently uncertain. We also addressed the risk of management
override of internal controls, including among other matters consideration of whether there was evidence of bias that
represented a risk of material misstatement due to fraud.
The accounting records of the parent company and all subsidiary undertakings are centrally located and audited by
us based upon materiality or risk. The key audit matters addressed, and how these were addressed are outlined
below. The Kosovan component was audited by a component auditor under our instruction. The group audit team
instructed the component auditor as to the significant risk areas to be covered and determined component
materiality. There was regular interaction with the component auditor during all stages of the audit.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
financial statements of the current period and include the most significant assessed risks of material misstatement
(whether or not due to fraud) we identified, including those which had the greatest effect on: the overall audit
strategy, the allocation of resources in the audit; and directing the efforts of the engagement team. These matters
were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these matters. In addition to going concern, described in the
Material uncertainty related to going concern section above, we determined the matters described below to be the
key audit matters to be communicated in our report.
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Key audit matter
How our scope addressed this matter
Going concern (refer Note 3 and 4)
In their assessment of whether the going concern
basis of accounting should be applied in preparing
these financial statements, management have
considered a number of events and conditions
which are disclosed within note 4 to these
financial statements.
There is a risk that these events and conditions,
individually or collectively, may cast significant
doubt on the group's or parent company’s ability
to continue as a going concern for a period of at
least twelve months from when the financial
statements are authorised for issue.
Our work included:
•
•
•
•
•
•
•
checking the mathematical accuracy of the
spreadsheet used to model future financial
performance, agreed the underlying cash flow
projections to management-approved forecasts,
recalculating liquidity headroom for the base case
scenario;
reviewing the sales order book and reconciling to
the assumptions used in preparing the forecasts;
evaluating the assumptions used in the sensitised
forecasts for a reduction in factory operations,
continued disruption to block sales and increased
quarry costs;
assessing the impact of the mitigating factors
available to management in respect of the ability
to restrict expenditure, re-negotiate the terms of
borrowings and to raise additional funds;
obtaining commitments from Brandon Hill and a
high net worth individual to provide a short term
facility (see key observation below);
verification of receipt of the post year end fund
raise and vouching of the cash balance at 31 May
2021 to bank statements; and
assessing whether management has adequately
disclosed the conditions which cast significant
doubt on the ability of the Group and Company to
continue as a going concern in the financial
statements.
Key observation
We noted the Gulf Marble convertible loan notes fall
due within the going concern period and while
management consider they will successfully re-
negotiate the repayment terms to a date more than 12
months from the date of approval of these financial
statements, they have not yet reached such
agreement with the note holders.
In the event that an agreement is not reached, the
group has mitigated the impact on going concern by
reaching agreement with their brokers, Brandon Hill
Capital, and a high net worth individual to provide a
short term facility of £1million and €800k respectively,
which will enable the group to satisfy the repayment
of the loan notes when they fall due. In addition, the
directors will consider implementing the other
mitigating actions as disclosed in note 4 if required.
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Valuation of inventory (refer Note 3 and 15)
Inventory has a carrying amount of €3.0m in the
financial statements as at 31 December 2020.
The recoverability of inventory is reliant on the net
realisable value which reflects future demand and
market trends which are difficult to anticipate.
There is a risk that the carrying value of inventory
is materially misstated with regards to valuation.
We consider this to be a key audit matter given the
financial significance (Inventory represents
25.1% of the Group’s total assets at 31 December
2020) and that management use judgement and
estimation in arriving at the valuation.
How the scope of our audit responded to the
key audit matter
We have obtained and reviewed management’s
assessment of inventory valuation. Our work included
the following:
• Arranged attendance (by component auditors) at
an inventory count in significant quarries in Kosovo
and North Macedonia post year end which included
an audit of the reconciling items between the year-
end inventory position and inventory held at the
time of the count. This excludes the Maleshevë
quarry which is referenced in the key observations
paragraph below;
• Critically reviewed the weighted average cost of
inventory and challenged management estimations
and judgements inherent in the calculation;
• Reviewed the net realisable value of inventory with
reference to management’s cost by testing
contractually agreed selling prices and forecasted
sales;
• Reviewed management’s revenue order book for
additional assurance that the demand for the
inventory exists as well as a review of
management’s ability to forecast by referring to
previous forecast models compared to actual;
• Assessed management’s provisioning methodology
and re-performed the assessment to ensure the
provision is not understated; and
• Review of the relevant component auditor working
papers and responses to our component audit
instructions who validated the cost inputs to the
weighted average cost calculation to source
documentation.
Key observation - Maleshevë quarry
Inventory with a carrying value of €835,369 is held at
the Group’s Maleshevë quarry site, which as described
in notes 15 and 27 to these financial statements, has
not been accessible to the group since July 2019. The
last inventory count performed by management was in
March 2019. In accordance with applicable audit
standards we designed alternative procedures in order
to conclude on the quantities and valuation of
inventory held at that site. Our alternative procedures
included:
•
•
•
•
obtaining the results of the last management
inventory count at that site, performed in March
2019;
a review of the reconciliation between that count
and the count performed by an independent
assessor in October 2019 as part of ongoing civil
litigation;
obtaining an opinion from the group’s legal
representative; and
observing
neighbouring land.
inventory held at the site
from
On the basis of the alternative procedures performed
we consider management’s
to be
reasonable and the related disclosures appropriate.
treatment
PAGE | 36 F O X M A R B L E H O L D I N G S P L C A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 2 0
Carrying value of intangible assets (refer Note 12)
Intangible assets have a carrying amount of
€2.8m in the financial statements as at 31
December 2020.
Intangible assets relate predominantly to mining
rights and licences in respect of the Prilep Alpha
and Omega quarries in North Macedonia. The
recoverability of these assets is determined with
reference to the Group’s ability to successfully
operate the quarries.
Management have performed a review for
impairment indicators in respect of intangible
assets.
There is a risk that the valuation of intangible
assets is materially misstated with regards to
valuation. We consider this to be a key audit
matter because of the financial significance
(intangible assets represent 23% of the Group’s
total assets at 31 December 2020) and that
management use judgement and estimation in
arriving at the valuation.
How the scope of our audit responded to the
key audit matter
We have obtained and reviewed the Directors
intangible assets which
impairment review of
considered
indicators of
listed as
the areas
impairment. Our work included the following:
• Obtaining the impairment assessment prepared by
management and reviewing for reasonableness;
• Obtaining the current licences and ensuring that
they remain valid;
• A review of the indicators of impairment listed in
IFRS 6 for exploration assets and IAS 36 for
producing assets for evidence of impairment;
• A review of the relevant working papers and
reporting deliverables of component auditors;
• A site visit by the component auditors to review for
physical evidence of impairment indicators;
• An assessment of the amortisation of intangible
asset in accordance with the relevant standard;
and
• A review of the disclosures made in the financial
statements for accuracy.
In assessing the group’s ability to successfully operate
the quarries to which the intangible assets relate, we
have considered the financial resources required to do
this. We draw attention to the material uncertainty
related to going concern paragraph which states that
the group is negotiating the repayment terms of
convertible loan notes which fall due within the going
concern period. If the group does not have available
resources to develop the quarries into production, the
require an
intangible assets may
associated
impairment. These financial statements do not include
the adjustments that would result if the group is not
able to develop the quarries into production.
Carrying value of net investment in subsidiaries
(refer Note 25)
How the scope of our audit responded to the
key audit matter
The parent company’s net
in
subsidiaries at 31 December 2020 is €19,282,372.
investment
The carrying value of the net investment in
subsidiaries is ultimately dependent on the value
of the underlying assets. Many of the underlying
assets are at an early stage of their lifecycle
making it difficult to determine their value.
Valuations for these sites are therefore based on
judgments and estimates made by the Directors -
which leads to a risk of misstatement.
We have obtained and reviewed the Director’s
impairment review of the underlying assets. Our work
included:
• Reviewing the impairment indicators listed in IFRS
6 and IAS 36 and challenging management’s
assessment of the underlying assets.
• Reviewing the audit working papers of certain
components to assess impairment considerations
of exploration assets made by their auditors; and
• Discussing with management the basis
for
impairment or non-impairment of investment in
subsidiaries and loans receivable from subsidiaries.
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PAGE | 3 7
Other information
The other information comprises the information included in the annual report, other than the financial statements
and our auditor’s report thereon. The directors are responsible for the other information contained within the annual
report. Our opinion on the group and parent company financial statements does not cover the other information and,
except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion
thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information
is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or
otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material
misstatements, we are required to determine whether this gives rise to a material misstatement in the financial
statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement
of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
•
•
the information given in the strategic report and the directors’ report for the financial year for which the
financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors’ report have been prepared in accordance with applicable legal
requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent company and their environment
obtained in the course of the audit, we have not identified material misstatements in the strategic report or the
directors’ report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires
us to report to you if, in our opinion:
•
•
•
•
adequate accounting records have not been kept by the parent company, or returns adequate for our audit have
not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors’ remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the statement of directors’ responsibilities, the directors are responsible for the
preparation of the group and parent company financial statements and for being satisfied that they give a true and
fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the group and parent company financial statements, the directors are responsible for assessing the
group and the parent company’s ability to continue as a going concern, disclosing, as applicable, matters related to
going concern and using the going concern basis of accounting unless the directors either intend to liquidate the
group or the parent company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with
ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error
and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial statements.
PAGE | 38 F O X M A R B L E H O L D I N G S P L C A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 2 0
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in
line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including
fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
We obtained an understanding of the group and parent company and the sector in which they operate to identify
laws and regulations that could reasonably be expected to have a direct effect on the financial statements. We
obtained our understanding in this regard through discussions with management, application of audit knowledge and
experience of the sector.
Our audit procedures were designed to ensure the audit team considered whether there were any indications of non-
compliance by the group and parent company with those laws and regulations. The group and parent company is
subject to laws and regulations that directly affect the financial statements including financial reporting legislation,
mining legislation, and taxation legislation and we assessed the extent of compliance with these laws and regulations
as part of our procedures on the related financial statement items.
In addition, the group and parent company is subject to many other laws and regulations where the consequences
of non-compliance could have a material effect on amounts or disclosures in the financial statements, for instance
through the imposition of fines or litigation. We identified the following areas as those most likely to have such an
effect: health and safety; various regulation around the mining and general environmental protection legislation;
fraud; bribery and corruption; export control; Consumer Rights Act; and employment law recognising the nature of
the group and parent company’s activities. Auditing standards limit the required audit procedures to identify non-
compliance with these laws and regulations to enquiry of the Directors and other management and inspection of
regulatory and legal correspondence, if any. The identified actual or suspected non-compliance was not sufficiently
significant to our audit to result in our response being identified as a key audit matter.
We also identified the risks of material misstatement of the financial statements due to fraud. We considered, in
addition to the non-rebuttable presumption of a risk of fraud arising from management override of controls, that the
recognition of revenue, posting of unusual journals and manipulating the group’s alternative performance profit
measures and other key performance indicators to meet externally communicated targets.
As in all of our audits, we addressed the risk of fraud arising from management override of controls by performing
audit procedures which included, but were not limited to: the testing of journals; reviewing accounting estimates
for evidence of bias; and evaluating the business rationale of any significant transactions that are unusual or outside
the normal course of business. Because of the inherent limitations of an audit, there is a risk that we will not detect
all irregularities, including those leading to a material misstatement in the financial statements or non-compliance
with regulation. This risk increases the more that compliance with a law or regulation is removed from the events
and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-
compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves
intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial statements is located on the Financial
Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s
report.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those
matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone, other than the company and the company's
members as a body, for our audit work, for this report, or for the opinions we have formed.
15 Westferry Circus
Jonathan Bradley-Hoare (Senior Statutory Auditor)
For and on behalf of PKF Littlejohn LLP
Canary Wharf
Statutory Auditor London E14 4HD
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PAGE | 3 9
Consolidated Statement of Comprehensive Income
For the year ended 31 December
Revenue
Cost of sales
Gross profit
Note 2020 2019
€ €
5 715,900 1,422,872
6 (559,358) (814,626)
156,542 608,246
Administrative and other operating expenses
6 (2,794,414) (2,881,919)
Operating loss
Finance costs
Finance income
Loss before taxation
Taxation credit
Loss for the year
6 (2,637,872) (2,273,673)
8 (456,786) (517,638)
9 170,572 257,771
(2,924,086) (2,533,540)
10 119,715 –
(2,804,371) (2,533,540)
Other comprehensive income
– –
Total comprehensive loss for the year
attributable to owners of the parent company
(2,804,371) (2,533,540)
Earnings per share
Basic earnings per share
11 (0.01) (0.01)
Diluted earnings per share
11 (0.01) (0.01)
The notes on pages 45 to 74 are an integral part of these financial statements.
PAGE | 40 F O X M A R B L E H O L D I N G S P L C A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 2 0
Consolidated Statement of Financial Position
As at 31 December
Assets
Non-current assets
Intangible assets
Property, plant and equipment
Total non-current assets
Current assets
Trade and other receivables
Inventories
Cash and cash equivalents
Restricted cash
Total current assets
Total assets
Current liabilities
Trade and other payables
Borrowings
Total current liabilities
Non-current liabilities
Deferred tax liability
Lease Commitments
Borrowings
Note 2020 2019
€ €
12 2,793,135 2,836,942
13 4,818,716 5,088,344
7,611,851 7,925,286
14 1,152,317 1,182,685
15 3,041,278 3,928,397
21 337,741 578,417
21 39,937 –
4,571,273 5,689,499
12,183,124 13,614,785
16 1,560,865 1,199,376
17 1,841,493 1,929,696
3,402,358 3,129,072
10 84,504 84,504
18 260,481 220,721
17 2,799,128 2,524,721
Total non-current liabilities
3,144,113 2,829,946
Total liabilities
Net assets
Equity
Called up share capital
Share premium
Accumulated losses
6,546,471 5,959,018
5,636,653 7,655,767
19 3,721,007 3,220,221
19 32,056,986 31,793,870
(30,283,485) (27,479,114)
Share based payment reserve
20 106,602 85,247
Other reserve
Total equity
35,543 35,543
5,636,653 7,655,767
The notes on pages 45 to 74 are an integral part of these financial statements. The financial statements on
pages 39 to 74 were approved and authorised for issue by the Board on 4 June 2020 and are signed on its behalf.
Chris Gilbert,
Director
4 June 2021
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PAGE | 4 1
Consolidated Statement of Cash Flows
For the year ended 31 December
Cash flows from operating activities
Loss before taxation
Adjustment for:
Finance costs
Finance income
Operating loss for the year
Adjustment for:
Amortisation
Depreciation
Disposal of PPE
Note 2020 2019
€ €
(2,924,086) (2,533,540)
8 456,786 517,638
9 (170,572) (257,771)
(2,637,872) (2,273,673)
12 43,807 43,796
13 420,693 648,133
28,571 –
Equity settled transactions
21 21,355 –
Provision for impairment of receivables
14 14,359 162,578
Provision for inventory
Changes in working capital:
15 927,841 392,412
Decrease/(Increase) in trade and other receivables
14 135,723 (455,965)
Increase in inventories
15 (40,721) (513,669)
(Decrease)/increase in accruals
16 (46,807) 124,116
Increase/(decrease) in trade and other payables
16 424,324 (109,593)
Net cash used in operating activities
(708,727) (1,981,865)
Cash flow from investing activities
Expenditure on property, plant & equipment
13 (179,635) (649,715)
Expenditure on rights of use assets
– (23,736)
Interest on bank deposits
9 189 1,437
Net cash used in investing activities
(179,446) (672,014)
Cash flows from financing activities
Proceeds from issue of shares (net of issue costs)
19 763,904 2,371,425
Proceeds from the issue of long-term debt (net of issue costs)
17 – 609,696
Interest paid on loan note instrument
17 (76,470) (187,096)
Net cash generated from financing activities
687,434 2,794,026
Net increase/(decrease) in cash and cash equivalents
(200,739) 140,147
Cash and cash equivalents at beginning of year
578,417 438,270
Cash and cash equivalents at end of year including
restricted cash
21 377,678 578,417
The notes on pages 45 to 74 are an integral part of these financial statements.
PAGE | 42 F O X M A R B L E H O L D I N G S P L C A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 2 0
Consolidated Statement of Changes in Equity
Note
Share
Capital
Share
Premium
Share based
payment
reserve
19
€
20
€
€
Other Accumulated Total
Reserve losses equity
€ € €
Balance at 1 January 2019
2,700,688
29,941,977
85,247
35,543 (24,945,574) 7,817,881
Loss and total comprehensive
loss for the year
Transactions with owners
(2,533,540) (2,533,540)
Share capital issued
519,533
1,851,893
–
– – 2,371,426
Balance at 31 December
2019 and at 1 January
2020
Loss and total comprehensive
loss for the year
Transactions with owners
Share options charge
3,220,221
31,793,870
85,247
35,543 (27,479,114) 7,655,767
(2,804,371) (2,804,371)
21,355
21,355
Share capital issued
500,786
263,116
–
– 763,902
Balance at 31 December
2020
3,721,007
32,056,986
106,602
35,543 (30,283,485) 5,636,653
The notes on pages 45 to 74 are an integral part of these financial statements.
Other reserves of €35,543 (2019 – €35,543) arose on acquisition of Fox Marble Limited by Fox Marble Holdings Plc
in October 2011 which was accounted for as a Common Control transaction.
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PAG E | 4 3
Statement of Financial Position of the parent company
As at 31 December
Assets
Non-current assets
Investments
Note 2020 2019
€ €
25 19,313,372 18,252,932
Property, plant and equipment
13 189,861 235,883
Total non-current assets
Current assets
Trade and other receivables
Cash and cash equivalents
Restricted cash
Total current assets
Total assets
Current liabilities
Trade and other payables
Borrowings
Total current liabilities
Non-current liabilities
Borrowings
Lease Liability
19,503,233 18,488,815
14 81,979 296,803
21 112,338 545,587
21 39,937 –
234,254 842,390
19,737,487 19,331,205
16 617,809 398,056
17 1,841,493 1,929,697
2,459,302 2,327,753
17 2,799,128 2,524,722
18 174,239 220,721
Total non-current liabilities
2,973,367 2,745,443
Total liabilities
Net assets
Equity
Share capital
Share premium
Accumulated losses
5,432,669 5,073,196
14,304,818 14,258,009
19 3,721,007 3,220,221
19 32,056,986 31,793,870
(21,579,777) (20,841,329)
Share based payment reserve
20 106,602 85,247
Total equity
14,304,818 14,258,009
The notes on pages 45 to 74 are an integral part of these financial statements.
The Company has elected to take advantage of the exemption under section 408 of the Companies Act 2006 not to
present the parent company statement of comprehensive income. The loss for the year for the Company is €738,448
(2019 – €10,116,971). The financial statements on pages 39 to 74 were approved and authorised for issue by the
Board on 4 June 2021, and signed on its behalf.
Chris Gilbert
Director
Company number: 07811256
PAGE | 44 F O X M A R B L E H O L D I N G S P L C A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 2 0
Statement of Changes in Equity of the parent company
Note
Share based
Share
Capital
Share
Premium
payment Accumulated Total
reserve losses equity
19
€
20
€
€ € €
Balance at 1 January 2019
2,700,688
29,941,977
85,247 (10,724,358) 22,003,554
Loss and total comprehensive income
for the year
Transactions with owners
Share capital issued
Balance at 31 December 2019
and at 1 January 2020
Loss and total comprehensive income
for the year
Transactions with owners
Share options charge
–
–
– (10,116,971) (10,116,971)
519,533
1,851,893
– – 2,371,426
3,220,221
31,793,870
85,247 (20,841,329) 14,258,009
(738,448) (738,448)
–
–
21,355 – 21,355
Share capital issued
500,786
263,116
– – 763,902
Balance at 31 December 2020
3,721,007
32,056,986
106,602 (21,579,777) 14,304,818
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PAG E | 4 5
Notes to the consolidated and parent company financial
statements
1. General information
The principal activity of Fox Marble Holdings plc and its subsidiary and associate companies (collectively “Fox Marble
Group” or “Group”) is the exploitation of quarry reserves in the Republic of Kosovo and the Republic of North
Macedonia.
Fox Marble Holdings plc is the Group’s ultimate Parent Company (“the parent company”). It is incorporated in
England and Wales and domiciled in England. The address of its registered office is 160 Camden High Street, London,
NW1 0NE. Fox Marble Holdings plc shares are admitted to trading on the London Stock Exchange’s AIM market.
2. Basis of Preparation
These consolidated financial statements have been prepared in accordance with international accounting standards
in conformity with the requirements of the Companies Act 2006. IFRS includes Interpretations issued by the IFRS
Interpretations Committee (formerly – IFRIC).
The consolidated financial statements have been prepared under the historical cost convention, apart from financial
assets and financial liabilities (including derivative instruments) which are recorded at fair value through the profit
and loss. The financial assets and liabilities which are recorded at fair value through the profit and loss relate to the
conversion option on the existing loan notes.
In publishing the parent company financial statements together with the Group financial statements, the Company
has taken advantage of the exemption in section 408 of the Companies Act 2006 not to present its individual
statement of comprehensive income and related notes that form a part of these approved financial statements.
The parent company financial statements of Fox Marble Holdings plc have been prepared in accordance with Financial
Reporting Standard 101, ‘Reduced Disclosure Framework’ (FRS 101). The financial statements have been prepared
under the historical cost convention, and derivative financial assets and financial liabilities measured at fair value
through profit or loss, and in accordance with the Companies Act 2006, as applicable to Companies using FRS 101.
The preparation of the parent company’s financial statements in conformity with FRS 101 requires the use of certain
critical accounting estimates. It also requires management to exercise its judgement in the process of applying the
company’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where
assumptions and estimates are significant to the financial statements are disclosed in note 3.
The following exemptions from the requirements of IFRS have been applied in the preparation of the parent company
financial statements, in accordance with FRS 101:
•
•
•
•
•
•
•
•
•
Paragraphs 45(b) and 46 to 52 of IFRS 2, ‘Share-based payment’ (details of the number and weighted-average
exercise prices of share options, and how the fair value of goods or services received was determined).
IFRS 7, ‘Financial Instruments: Disclosures’.
Paragraphs 91 to 99 of IFRS 13, ‘Fair value measurement’ (disclosure of valuation techniques and inputs used
for fair value measurement of assets and liabilities).
Paragraph 38 of IAS 1, ‘Presentation of financial statements’ comparative information requirements in respect
of: (i) paragraph 79(a)(iv) of IAS 1; (ii) paragraph 73(e) of IAS 16 Property, plant and equipment; (iii)
paragraph 118(e) of IAS 38 Intangible assets (reconciliations between the carrying amount at the beginning
and end of the period)
The following paragraphs of IAS 1, ‘Presentation of financial statements’: 10(d), (statement of cash flows) 16
(statement of compliance with all IFRS), 38A (requirement for minimum of two primary statements, including
cash flow statements), 38B-D (additional comparative information), 111 (cash flow statement information), and
134-136 (capital management disclosures)
IAS 7, ‘Statement of cash flows’
Paragraph 30 and 31 of IAS 8 ‘Accounting policies, changes in accounting estimates and errors’ (requirement
for the disclosure of information when an entity has not applied a new IFRS that has been issued but is not yet
effective)
Paragraph 17 of IAS 24, ‘Related party disclosures’ (key management compensation)
The requirements in IAS 24, ‘Related party disclosures’ to disclose related party transactions entered into
between two or more members of a group.
PAGE | 46 F O X M A R B L E H O L D I N G S P L C A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 9
The accounting policies set out below have been applied consistently across the Group and to all periods presented
in these financial statements.
3. Significant accounting policies
Basis of consolidation
The Group financial statements consolidate those of Fox Marble Holdings plc (the Company) and its subsidiaries. The
parent company financial statements present information about the Company as a separate entity and not about its
group.
The consolidated financial statements incorporate the financial information of Fox Marble Holdings plc and its
subsidiaries Fox Marble Limited, Fox Marble Kosova Sh.P.K., H&P Sh.P.K., Granit Shala Sh.P.K., Rex Marble Sh.P.K.,
Fox Marble Asia Limited, Gulf Marble Investments Limited, Fox Marble FZC and Stone Alliance LLC.
Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an
entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and can
affect those returns through its power over the entity. Further to this, subsidiaries are entities for which the Group
has the power to govern the financial and operating policies and consistent accounting policies have been adopted
across the Group. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They
are deconsolidated from the date that control ceases. The acquisition method of accounting is used to account for
business combinations by the Group.
Inter-company transactions, balances and unrealised gains on transactions between group companies are
eliminated. Unrealised losses are also eliminated, unless the transaction provides evidence of an impairment of the
transferred asset. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with
the policies adopted by the Group.
Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated statement
of profit or loss, statement of comprehensive income, statement of changes in equity and balance sheet respectively.
Associates and joint ventures are all entities over which the group has significant influence but not control. This is
generally the case where the group holds between 20% and 50% of the voting rights. Investments in associates and
joint ventures are accounted for using the equity method of accounting, after initially being recognised at cost.
Under the equity method of accounting, the investments are initially recognised at cost and adjusted thereafter to
recognise the group’s share of the post-acquisition profits or losses of the investee in profit or loss, and the group’s
share of movements in other comprehensive income of the investee in other comprehensive income. Dividends
received or receivable from associates and joint ventures are recognised as a reduction in the carrying amount of
the investment. Where the group’s share of losses in an equity-accounted investment equals or exceeds its interest
in the entity, including any other unsecured long-term receivables, the group does not recognise further losses,
unless it has incurred obligations or made payments on behalf of the other entity.
Unrealised gains on transactions between the group and its associates and joint ventures are eliminated to the
extent of the group’s interest in these entities. Unrealised losses are also eliminated unless the transaction provides
evidence of an impairment of the asset transferred. Accounting policies of equity-accounted investees have been
changed where necessary to ensure consistency with the policies adopted by the group.
Revenue Recognition
Revenue is recognised in a manner that depicts the pattern of the transfer of goods and services to customers. The
amount recognised reflects the amount to which the Group expects to be entitled in exchange for those goods and
services. Sales contracts are evaluated to determine the performance obligations, the transaction price and the point
at which there is transfer of control. The transactional price is the amount of consideration due in exchange for
transferring the promised goods or services to the customer, and is allocated against the performance obligations
and recognised in accordance with whether control is recognised over a defined period or at a specific point in time.
Revenue is derived principally from the sale of block and processed marble and is measured at the fair value of
consideration received or receivable, after deducting discounts, value added tax and other sales taxes. A sale is
recognised when control has been transferred. This is usually when title and insurance risk have passed to the
customer and the goods have been delivered to a contractually agreed location.
The identification of performance obligations includes a determination of whether the goods and services provided
are distinct. Where the contract involves the provision of multiple elements, such as the provision of marble and
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processing services management applies a judgement in determining whether services are distinct. Where the
provision of goods/services is distinct revenue is recognised separately for each element.
An assessment of the timing of revenue recognition is made for each performance obligation. Revenue is recognised
at a point in time for all revenue transactions where control of goods provided is transferred to the customer.
Revenue is also recognised at a point in time for all contracts that involve multiple elements when the agreed output
is produced. The Group does not normally enter into contracts which involve the recognition of revenue over time.
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the
revenue can be reliably measured, regardless of when the payment is being made. The Group assesses its revenue
arrangements against specific criteria in order to determine if it is acting as principal or agent.
Inventory
Inventories are stated at the lower of cost and net realisable value. Cost is determined on the weighted average
basis. The production cost of inventory includes direct materials, direct labour and an appropriate proportion of
depreciation and production overheads. Net realisable value is based on estimated selling prices less any estimated
costs to be incurred to completion and disposal.
Property, Plant and Equipment
Property, plant and equipment are stated at cost less accumulated depreciation and any impairment losses. The cost
of an item of property, plant and equipment comprises its purchase price and any directly attributable costs of
bringing the asset to its working condition and location for its intended use. Expenditure incurred after items of
property, plant and equipment have been put into operation, such as repairs and maintenance, is normally charged
to profit or loss in the period in which it is incurred. In situations where it can be clearly demonstrated that the
expenditure has resulted in an increase in the future economic benefits expected to be obtained from the use of an
item of property, plant and equipment, and where the cost of the item can be measured reliably, the expenditure is
capitalised as an additional cost of that asset or as a replacement.
Depreciation of quarrying equipment and infrastructure for quarries under development is calculated using the Hours
of Use (‘HOU’) method to write off the cost of the assets proportionately to their use in the development of the
quarry site.
Depreciation of quarrying equipment and infrastructure for fully developed quarries is calculated using the Units of
Production (‘‘UOP’’) method to write off the cost of the assets proportionately to the extraction of material from the
quarries. Fully depreciated assets are retained in the accounts until they are no longer in use and no further charge
for depreciation is made in respect of these assets.
Depreciation of processing equipment and infrastructure is calculated using the UOP method to write off the cost of
the assets proportionately to the production of processed slabs in the factory. Fully depreciated assets are retained
in the accounts until they are no longer in use and no further charge for depreciation is made in respect of these
assets.
Depreciation of items of property, plant and equipment, other than quarrying & processing equipment and
infrastructure, is calculated on the straight-line basis to write off the cost of each item of property, plant and
equipment to its residual value over its estimated useful life.
The estimated useful lives of property, plant and equipment are as follows:
•
•
•
•
•
Quarry Plant and machinery – 5–15 years
Factory Plant and Machinery – 5-20 years
Leasehold improvements – Period of the lease
Office equipment – 3-5 years
Land – indefinite
Where parts of an item of property and equipment have different useful lives, the cost of that item is allocated on
a reasonable basis among the parts and each part is depreciated separately. Land is not depreciated.
Residual values, useful lives and the depreciation method are reviewed, and adjusted if appropriate, at least at the
end of each reporting period.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are
expected from its use or disposal. Any gain or loss on disposal or retirement recognised in profit or loss in the year
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the asset is derecognised is the difference between the net sales proceeds and the carrying amount of the relevant
asset.
Leases
The Group recognises a right-of-use asset and corresponding liability at the date at which a leased asset is made
available for use by the Group, except for short-term leases (defined as leases with a lease term of 12 months or
less) and leases of low-value assets. For these leases, the Group recognises the lease payments as an operating
expense on a straight-line basis over the term of the lease.
Lease liabilities are measured at the present value of the future lease payments, excluding any payments relating
to non-lease components. Future lease payments include fixed payments, in-substance fixed payments, and variable
lease payments that are based on an index or a rate, less any lease incentives receivable. Lease liabilities also take
into account amounts payable under residual value guarantees and payments to exercise options to the extent that
it is reasonably certain that such payments will be made.
The payments are discounted at the rate implicit in the lease or, where that cannot be readily determined, at an
incremental borrowing rate.
Right-of-use assets are measured initially at cost based on the value of the associate lease liability, adjusted for any
payments made before inception, initial direct costs and an estimate of the dismantling, removal and restoration
costs required in the terms of the lease.
The Group presents right-of-use assets in ‘property, plant and equipment’ in the consolidated statement of financial
position. Subsequent to initial recognition, the lease liability is reduced for payments made and increased to reflect
interest on the lease liability (using the effective interest method).
The related right-of-use asset is depreciated over the term of the lease or, if shorter, the useful economic life of the
leased asset. The lease term shall include the period of an extension option where it is reasonably certain that the
option will be exercised. Where the lease contains a purchase option the asset is written off over the useful life of
the asset when it is reasonably certain that the purchase option will be exercised.
The Group remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset)
whenever: –
•
•
•
The lease term has changed or there is a change in the assessment of exercise of a purchase option, in which
case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate.
The lease payments change due to changes in an index or rate or a change in expected payment under a
guaranteed residual value, in which cases the lease liability is remeasured by discounting the revised lease
payments using the initial discount rate (unless the lease payments change is due to a change in a floating
interest rate, in which case a revised discount rate is used).
A lease contract is modified and the lease modification is not accounted for as a separate lease, in which case
the lease liability is remeasured by discounting the revised lease payments using a revised discount rate. Leases
for which the Group is a lessor are classified as finance or operating leases.
A lease is classified as a finance lease if it transfers substantially all the risks and rewards of ownership to the lessee
and classified as an operating lease if it does not.
Intangible Assets
All costs associated with exploration and evaluation including the costs of acquiring exploration and exploitation
licences, annual licence fees, rights to explore, topographical, geological and geophysical studies of extracting a
dimensional stone resource, are capitalised as intangible exploration and evaluation assets until such time as when
the technical feasibility and commercial viability of extracting a mineral resource are demonstrable. After initial
recognition they are subsequently measured at cost.
The costs are allocated to quarry locations within a licence area. Each area is treated as a cash-generating unit
(“CGU”) because the underlying geology and risks and rewards of exploration within a quarry are similar.
If an exploration project is successful, the related expenditures will be transferred to intangible or tangible assets
and be amortised over the estimated life of the reserves or life of the licence whichever is less on a straight-line
basis. The asset is amortised once it is in the location and condition necessary for it to be capable of operating in
the manner intended by management. The amortisation is included within operating loss in the statement of
comprehensive income. Where a project does not lead to the discovery of commercially viable quantities of
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dimensional stone resources and is relinquished, abandoned, or is of no further commercial value to the Group, the
related costs are written off to profit or loss.
The recoverability of capitalised exploration costs is dependent upon the discovery of economically viable reserves,
the ability of the Group to obtain necessary financing to complete the development of reserves and future profitable
production or proceeds from the extraction thereof.
Intangible assets not related to exploration and evaluation are measured initially at fair value and amortised over
their estimated useful lives. Intangible assets relating to quarries in operation are assessed annually for indicators
of impairment in accordance with IAS 36.
Impairment of exploration and evaluation assets and property, plant and equipment
Whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable,
an asset is reviewed for impairment. An asset’s carrying value is written down to its estimated recoverable amount
(being the higher of the fair value less costs to sell and value in use) if that is less than the asset’s carrying value.
Impairment losses are recognised in profit or loss.
Impairment reviews for intangible exploration and evaluation assets and property, plant and equipment are carried
out based on quarry sites with each area representing a single CGU. An impairment review is undertaken when
indicators of impairment arise but typically when one of the following circumstances applies:
•
•
•
•
•
unexpected geological occurrences that render the resources uneconomic;
title to the asset is compromised;
variations in dimensional stone prices that render the project uneconomic;
variations in foreign currency rates; or
the Group determines that it no longer wishes to continue to evaluate or develop the field.
Non-financial assets which have suffered impairment are reviewed for possible reversal of the impairment at each
reporting period.
Investments
Investments in subsidiaries, associates and joint ventures are recorded at cost in the parent company’s Statement
of Financial Position. They are tested for impairment when there is objective evidence of impairment. Any
impairment losses are recognised in profit or loss in the period in which they occur.
Financial instruments
Financial assets and financial liabilities are recognised when the Group has become a party to the contractual
provisions of the instrument.
Financial assets
Trade and other receivables
Trade and other receivables are classified as loans and receivables and are initially recognised at fair value. They are
subsequently measured at their amortised cost using the effective interest method less any provision for
impairment.
The group applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime expected
loss allowance for all trade receivables and contract assets. To measure the expected credit losses, trade receivables
and contract assets have been grouped based on shared credit risk characteristics and the days past due.
Cash and cash equivalents
For the purpose of the statement of cash flows, cash and cash equivalents comprise cash on hand and demand
deposits.
For the purpose of the statement of financial position, cash and cash equivalents comprise cash on hand and at
banks, including term deposits, which are not restricted as to use.
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Financial liabilities and equity
Convertible loan notes
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements
entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Group after
deducting all its liabilities.
Interest-bearing loans (including loan notes) are recorded initially at their fair value, net of direct transaction costs.
Such instruments are subsequently carried at their amortised cost and finance charges, including premiums payable
on settlement, redemption or conversion, are recognised in profit or loss over the term of the instrument using the
effective rate of interest.
Instruments where the holder has the option to redeem for a variable amount of cash a pre-determined quantity of
equity instruments are classified as a derivative liability. The derivative element is fair valued using the Black Scholes
model at each period and any changes in fair value are recognised in profit or loss.
The interest expense on the liability component is calculated by applying the prevailing market interest rate for
similar non-convertible debt to the instrument. The difference between this amount and the interest paid is added
to the carrying value of the convertible loan note.
Trade and other payables
Trade and other payables are initially recognised at fair value and subsequently at amortised cost using the effective
interest method.
Equity settled transactions
The Group has applied the requirements of IFRS 2 Share-Based Payments for all grants of equity instruments.
The Group has entered into equity settled share-based payments as consideration for services received. Equity
settled share-based payments are measured at fair value at the date of issue.
The Group has measured the fair value by reference to the equity instruments issued as it is not possible to measure
reliably the fair value of the services received. In the absence of market prices, fair value has been based on the
Directors’ valuation of the Company as at the issue date.
Income tax
The tax expense represents the sum of the tax payable for the period and deferred tax.
The tax payable is based on taxable profit for the year. The Group’s liability for current tax is calculated by using tax
rates that have been enacted or substantively enacted by the reporting date.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amount of assets
and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit
and is accounted for using the balance sheet liability method.
Deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised
to the extent that it is probable that taxable profits will be available against which deductible temporary differences
can be utilised. Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset
is realised, or the liability is settled based upon rates enacted and substantively enacted at the reporting date.
Deferred tax is charged or credited in the statement of comprehensive income, except when it relates to items
credited or charged directly to equity, in which case the deferred tax is also dealt with in equity.
Deferred income tax is provided on temporary differences arising on investments in subsidiaries, except where the
timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary
difference will not reverse in the foreseeable future.
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax
assets against current tax liabilities and when the deferred income tax assets and liabilities relate to income taxes
levied by the same taxation authority on either the same taxable entity or different taxable entities where there is
an intention to settle the balances on a net basis. Tax credits in respect of research and development are recognised
in the period in which the receipt of the tax credit is considered to be probable.
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Foreign currencies
Items included in the financial statements of each of the Group’s entities are measured using the currency of the
primary economic environment in which the entity operates (‘the functional currency’). The financial statements are
presented in Euros (€) which is the Company’s functional and the Group’s presentation currency. The Euro/Sterling
exchange rate at 31 December 2020 was 1.1053 (31 December 2019 – 1.1815). The average Euro/Sterling
exchange rate for the year ended 31 December 2020 was 1.123 (31 December 2019 – 1.139).
Transactions in currencies other than the functional currency are initially recorded at the exchange rate prevailing
on the date of the transaction. At each reporting date, monetary assets and liabilities that are denominated in foreign
currencies are retranslated at the exchange rate prevailing at the reporting date. Non-monetary assets and liabilities
carried at fair value that are denominated in foreign currencies are translated at the rates prevailing at the date
when the fair value was determined. Gains and losses arising on retranslation are included in profit or loss for the
period, except for exchange differences on non-monetary assets and liabilities, which are recognised directly in other
comprehensive income when the changes in fair value are recognised directly in other comprehensive income.
On consolidation, the assets and liabilities of the Group’s overseas operations are translated into the Group’s
presentational currency at exchange rates prevailing at the reporting date. Income and expense items are translated
at the average exchange rates for the period unless exchange rates have fluctuated significantly during the year, in
which case the exchange rate at the date of the transaction is used. All exchange differences arising, if any, are
transferred to the Group’s translation reserve, except to the extent that they relate to non-controlling interests, and
are recognised as income or as expenses in the period in which the operation is disposed of, or when control,
significant influence or joint control is lost.
Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new ordinary shares
or options are shown in equity as a deduction, net of tax, from the proceeds.
Business Combinations
The acquisition method of accounting is used to account for all business combinations, regardless of whether equity
instruments or other assets are acquired. The consideration transferred for the acquisition of a subsidiary comprises
the:
•
•
•
•
•
fair values of the assets transferred;
liabilities incurred to the former owners of the acquired business;
equity interests issued by the group;
fair value of any asset or liability resulting from a contingent consideration arrangement; and
fair value of any pre-existing equity interest in the subsidiary.
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with
limited exceptions, measured initially at their fair values at the acquisition date. The group recognises any non-
controlling interest in the acquired entity, on an acquisition-by-acquisition basis, either at fair value or at the non-
controlling interest’s proportionate share of the acquired entity’s net identifiable assets.
Acquisition-related costs are expensed as incurred.
The excess of the consideration transferred, the amount of any non-controlling interest in the acquired entity; and
The acquisition date fair value of any previous equity interest in the acquired entity, over the fair value of the net
identifiable assets acquired is recorded as goodwill. If those amounts are less than the fair value of the net
identifiable assets of the business acquired, the difference is recognised directly in profit or loss as a bargain
purchase.
Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted
to their present value as at the date of exchange. The discount rate used is the entity’s incremental borrowing rate,
being the rate at which a similar borrowing could be obtained from an independent financier under comparable terms
and conditions.
Acquisitions costs are included in the profit and loss unless they specifically relate to the issue of shares in connection
with a business combination.
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Critical accounting estimates and areas of judgement
The preparation of consolidated financial statements under IFRS requires the use of certain critical accounting
estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting
policies. The key areas of judgement and critical accounting estimates are explained below.
Impairment assessment
The Group assesses at each reporting date whether there are any indicators that its assets and cash generating units
(CGUs) may be impaired. Operating and economic assumptions, which could affect the valuation of assets using
discounted cash flows, are updated regularly as part of the Group’s planning and forecasting processes. Judgement
is therefore required to determine whether the updates represent significant changes in the service potential of an
asset or CGU and are therefore indicators of impairment or impairment reversal.
In performing the impairment reviews, the Group assesses the recoverable amount of its operating assets principally
with reference to fair value less costs of disposal, assessed using discounted cash flow models. These models are
subject to estimation uncertainty and there is judgement in determining the assumptions that are considered to be
reasonable and consistent with those that would be applied by market participants as outlined below.
Going concern
The Group assesses at each reporting date whether it is a going concern for the foreseeable future. In making this
assessment management considers:
(a)
the current working capital position and operational requirements;
(b)
the timing of expected sales receipts and completion of existing orders;
(c)
the sensitivities of forecast sales figures over the next two years;
(d)
the timing and magnitude of planned capital expenditure; and
(e)
the level of indebtedness of the company and timing of when such liabilities may fall due, and accordingly the
working capital position over the next 18 months.
Management considers in detail the going concern assessment, including the underlying assumptions, risks and
mitigating actions to support the assessment. The assessment is subject to estimation uncertainty and there is
judgement in determining underlying assumptions.
Quarry reserves
Engineering estimates of the Group’s quarry reserves are inherently imprecise and represent only approximate
amounts because of the significant judgments involved in developing such information. There are authoritative
guidelines regarding the engineering criteria that must be met before estimated quarry reserves can be designated
as ‘‘proved’’ and ‘‘probable’’. Proved and probable quarry reserve estimates are updated at regular intervals
considering recent production and technical information about each quarry. In addition, as prices and cost levels
change from year to year, the value of proved and probable quarry reserves also changes. This change is considered
a change in estimate for accounting purposes and is reflected on a prospective basis in depreciation and amortisation
rates calculated on units of production (“UOP”) basis.
Changes in the estimate of quarry reserves are also considered in impairment assessments of non-current assets.
Treatment of convertible loan notes
The convertible loan notes have been accounted for as a liability held at amortised cost. At the date of issue, the
fair value of the liability component was estimated using the prevailing market interest rate for similar non-
convertible debt.
The conversion option results in the Company repaying a GBP denominated liability in return for issuing a fixed
number of shares and as such has been classified as a derivative liability. The liability is held at fair value and any
changes in fair value over the period are recognised in profit or loss.
The Company has fair valued the identified embedded derivatives included within the contract using a Black Scholes
methodology, which has resulted in the recording of a liability of €159,222 at 31 December 2020 (2019 – €6,125).
The main assumptions used in the valuation of the derivative conversion option as at 31 December 2020 were:
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underlying share price of £0.0250 (31 December 2019: £0.0245), EUR/GBP spot rate of 1.1053 (31 December 2019:
1.1815), historic volatility of 34% (31 December 2019: 53%) and risk free rate of 0.3% (31 December 2019: 1.9%)
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is determined based on weighted average
costs and comprises direct materials and direct labour costs and those overheads that have been incurred in bringing
the inventories to their present location and condition. Net realisable value is based on estimated selling prices less
any estimated costs to be incurred to completion and disposal.
In calculating the net realisable value of the inventory management has to make a judgment about the expected
sales price of the material. Management makes this judgment based on its historical experience of the sale of similar
material and taking into account the quality or age of the inventory concerned.
New standards and interpretations not yet adopted
(a) New standards, amendments and interpretations
In the current year, the Group has applied the below amendments to IFRS Standards and Interpretations issued by
the Board that are effective for an annual period that begins on or after 1 January 2020. Their adoption has not had
any material impact on the disclosures or on the amounts reported in these financial statements
(i) Amendments to References to the Conceptual Framework in IFRS Standards
Together with the revised Conceptual Framework, which became effective upon publication on 29 March 2018, the
IASB has also issued Amendments to References to the Conceptual Framework in IFRS Standards. The document
contains amendments to IFRS 2, IFRS 3, IFRS 6, IFRS 14, IAS 1, IAS 8, IAS 34, IAS 37, IAS 38, IFRIC 12, IFRIC
19, IFRIC 20, IFRIC 22, and SIC-32.
Not all amendments, however, update those pronouncements with regard to references to and quotes from the
framework so that they refer to the revised Conceptual Framework. Some pronouncements are only updated to
indicate which version of the Framework they are referencing to (the IASC Framework adopted by the IASB in 2001,
the IASB Framework of 2010, or the new revised Framework of 2018) or to indicate that definitions in the Standard
have not been updated with the new definitions developed in the revised Conceptual Framework. The amendments,
where they actually are updates, are effective for annual periods beginning on or after 1 January 2020, with early
application permitted.
(ii) Amendments to IAS 1 and IAS 8 Definition of material
The amendments are intended to make the definition of material in IAS 1 easier to understand and are not intended
to alter the underlying concept of materiality in IFRS Standards. The concept of ‘obscuring’ material information with
immaterial information has been included as part of the new definition.
The threshold for materiality influencing users has been changed from ‘could influence’ to ‘could reasonably be
expected to influence’.
The definition of material in IAS 8 has been replaced by a reference to the definition of material in IAS 1. In addition,
the IASB amended other Standards and the Conceptual Framework that contain a definition of material or refer to
the term ‘material’ to ensure consistency.
No other new standards, amendments or interpretations, effective for the first time for the financial year beginning
on or after 1 January 2020 have had a material impact on the group or parent company. At the date of authorisation
of these financial statements, the following key standards and amendments were in issue but not yet effective. The
Group has not applied these standards in the preparation of these financial statements.
•
•
•
•
•
•
•
IFRS 17
IFRS 10 and IAS 28 (amendments)
Amendments to IAS 1 and IAS 8
Amendments to IFRS 3
Amendments to IAS 16
Amendments to IAS 37
Annual Improvements to IFRS
Standards 2018-2020 Cycle
Insurance Contracts
Sale or Contribution of Assets between an Investor and its Associate or
Joint Venture
Definition of material
References to the Conceptual Framework
Property, Plant and Equipment—Proceeds before Intended Use
Onerous Contracts – Cost of Fulfilling a Contract
Amendments to IFRS 1 First-time Adoption of International
Financial Reporting Standards, IFRS 9 Financial Instruments, IFRS 16
Leases, and IAS 41 Agriculture
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The adoption of the above standards and interpretations is not expected to lead to any changes to the Group’s
accounting policies or have any other material impact on the financial position or performance of the Group.
There are no other IFRSs or IFRIC interpretations that are not yet effective that would be expected to have a
material impact on the Group.
4. Going concern
The Directors have reviewed detailed projected cash flow forecasts and are of the opinion that it is appropriate to
prepare this report on a going concern basis. In making this assessment they have considered:
(a)
the current working capital position and operational requirements;
(b)
the timing of expected sales receipts and completion of existing orders;
(c)
the sensitivities of forecast sales figures over the next two years;
(d)
the timing and magnitude of planned capital expenditure; and
(e)
the level of indebtedness of the company and timing of when such liabilities may fall due, and accordingly the
working capital position over the next 18 months.
In August 2021 the Company is due to repay the existing €1.8 million Gulf Loan Note. The Company is already in
discussion as to securing an extension to this loan note and is confident that it can secure such a concession,
however at this point the arrangements have not yet been finalised. The forecasts assume that production at the
Prilep and Cervenillë quarries will continue, which were reopened respectively in August and September 2020. It
further assumes that production at the factory will continue to operate and that recently installed machinery will
drive an increase in the rate of production. The forecast assumes existing contracts held by the Company will be
fulfilled on a timely basis. Further the forecasts assume that sales of block marble will resume during 2021, in line
with the reopening of international borders. Further the Company is anticipating significant growth in revenue
through the realisation of existing sale contracts and offtake agreements as well as from newly generated sales.
There are several scenarios which management have considered that could impact the financial performance of the
Company. These include:
(a)
(b)
(c)
the company may not be able to secure an extension to the Gulf Marble Loan note, and the loan note may
become payable in full or in part in August 2021;
levels of production at Cervenillë and Prilep can be impacted by unforeseen delays due to inclement weather
or equipment failure; lower than expected quality of material being produced by the quarries;
fulfilment of the Company’s order book could be delayed, or the payment of amounts due under such contracts
could be delayed;
(d)
the continued progression of the Covid-19 may have a further detrimental impact on sales or on operations;
and
(e)
the resumption of block sales to the international block market may be slower than expected.
As at 31 May 2020 the Company has €0.8 million in cash including €0.4 million of restricted funds related to litigation
funding.
If the cash receipts from sales are lower than anticipated the Company has identified that it has available to it a
number of other contingent actions, in addition to those noted above, that it can take to mitigate the impact of
potential downside scenarios. These include seeking additional financing, leveraging existing sale agreements,
reviewing planned capital expenditure, reducing overheads and further renegotiation of the terms on its existing
debt obligations. On 1 May 2021, the Company entered into a facility arrangement of £1,000,000 at an interest rate
of 9% per annum arranged by Brandon Hill Capital Limited, which may be drawn down at the Company’s request.
This facility expires on 31 May 2022, and is undrawn at 31 May 2021. In addition to this the Company has agreed
a further facility of £700,000 with a non related party high net worth individual that can be used if required.
In conclusion having regard to the existing and future working capital position and projected sales the Directors are
of the opinion that the application of the going concern basis is appropriate.
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5. Segmental information
The chief operating decision maker is the Board of Directors. The Board of Directors reviews management accounts
prepared for the Group as a whole when assessing performance.
All the operations of Fox Marble Holdings plc are in the Republic of Kosovo and the Republic of North Macedonia. All
sales of the Group are as a result of the extraction and processing of marble. It is the opinion of the directors that
the operations of the Company represent one segment and are treated as such when evaluating its performance.
Of the non-current assets held by the Group of €7,611,851 (2019 – €7,925,286), €4,309,546 (2019 – €4,262,651)
relates to Property, Plant and Machinery acquired for the exploitation of assets in Kosovo and €433,702 (2019 –
€588,902) relates to Property, Plant and Machinery acquired for the exploitation of assets in North Macedonia.
Intangible assets held by the Group relate to intangible assets acquired in relation to mining rights and licences in
North Macedonia of €2,633,424 (2019 – €2,674,866) and exploration and evaluation expenditure incurred in Kosovo
of €75,207 (2019 – €77,572).
Property, Plant and Machinery
Intangible assets
Kosovo
31 December
2020
€
4,309,546
75,207
Macedonia Other Total
31 December 31 December 31 December
2020 2020 2020
€ € €
433,072 75,492 4,818,716
2,633,424 84,504 2,793,135
Total non-current assets
7,611,851
Property, Plant and Machinery
Intangible assets
31 December
2019
€
4,262,651
77,572
31 December 31 December 31 December
2019 2019 2019
€ € €
588,902 236,791 5,088,344
2,674,866 84,504 2,836,942
Total non-current assets
7,925,286
The Group incurs certain costs in the United Kingdom in relation to head office expenses. In the year under review
included in the operating costs for the year of €2,794,414 (2019 – €2,881,919) were costs incurred in the United
Kingdom of €1,175,189 (2019 – €1,385,145). Of the net interest cost of the Group of €286,214 (2019 – €259,867)
€279,002 is incurred in the United Kingdom (2019 – €259,867).
All revenue, which represents turnover, arises solely within Kosovo and North Macedonia and relates to external
parties.
Group Year ended Year ended
31 December 31 December
2020 2019
€ €
Revenue by territory
Europe 662,305 883,271
Middle East – 148,976
China 53,595 390,625
Total revenue 715,900 1,422,872
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Revenues from contracts with customers
The Group generates revenue through the sale of quarried marble as well as the processing of marble into slabs,
tiles and bespoke cut to size items.
Group Year ended Year ended
31 December 31 December
2020 2019
€ €
Revenue by product
Sale of block marble 154,606 1,219,618
Sale of processed marble 547,513 168,807
Provision of processing services 13,781 34,447
Total revenue 715,900 1,422,872
Revenue is recognised in a manner that depicts the pattern of the transfer of goods and services to customers. The
amount recognised reflects the amount to which the Group expects to be entitled in exchange for those goods and
services. Sales contracts are evaluated to determine the performance obligations, the transaction price and the point
at which there is transfer of control. The transactional price is the amount of consideration due in exchange for
transferring the promised goods or services to the customer, and is allocated against the performance obligations
and recognised in accordance with whether control is recognised over a defined period or at a specific point in time.
Block marble may be sold under a sales agreement with a customer or on a non-contractual basis. Sales agreements
for block marble generally contain agreed pricing and minimum volume, through which customers can gain
exclusivity within a given region. Block marble may be sold on an ex-quarry basis or free on board (FOB) basis.
Revenue is recognised on the sale of block marble when control of the block marble is transferred to the buyer as
the transfer of legal title, customer acceptance and an unconditional requirement to pay. The group derives revenue
from the sale of blocks at a point in time.
Processed marble may be sold on an as seen basis or may be cut to order. The Company may enter into contracts
to supply a given volume of processed marble as specified by the client. Processed marble may be sold on ex-factory
basis or may include transport to customers. Revenue in relation to larger projects may involve separately
identifiable performance obligations. Such performance obligations may include the separate delivery of instalments
of product in accordance with the contractual schedule. Where marble is cut to order the Group does not consider
the provision of marble and the processing of marble as separate obligations, unless the client selects and takes title
to specific block marble.
The group does not expect to have any contracts where the period between the transfer of the promised goods or
services to the customer and payment by the customer exceeds one year. Consequently, the Group does not adjust
any of the transaction prices for the time value of money.
Group Year ended Year ended
31 December 31 December
2020 2019
€ €
Contractual basis 414,346 745,201
Non-contractual basis 301,554 677,671
Total revenue 715,900 1,422,872
The following table sets out financial assets and liabilities that relate to sales contracts the Group has entered into
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Group Year ended Year ended
31 December 31 December
2020 2019
€ €
Trade receivables 189,448 142.216
Contract Liabilities (Advances received from customers) 293,360 313,582
6. Expenses by nature
Group Year ended Year ended
31 December 31 December
2020 2019
€ €
Operating loss is stated after charging/(crediting):
Cost of materials sold 559,358 814,626
Inventory provision 927,841 392,412
Fees payable to the Company’s auditors 73,979 76,050
Legal & professional fees 280,542 293,972
Consultancy fees and commissions 285,792 400,458
Staff costs 491,488 690,074
Operating lease rental – 16,424
Other head office costs 116,947 147,304
Travelling, entertainment & subsistence costs 28,340 106,194
Depreciation 158,751 207,850
Amortisation 43,807 43,796
Quarry operating costs 279,615 172,564
Foreign exchange (loss)/gain 16,802 (19,205)
Share option charge 21,355 –
Marketing & PR 3,807 47,690
Testing, storage, sampling and transportation of materials 59,671 94,858
Provision for bad debts 14,359 162,578
Sundry (income)/expenses (8,682) 48,900
Cost of sales, administrative and other operational expenses 3,353,772 3,696,545
The analysis of auditors’ remunerations is as follows:
Group Year ended Year ended
31 December 31 December
2020 2019
€ €
Fees payable to the Company’s auditors and its associates
for services to the group
Audit of UK parent company 16,711 16,711
Audit of consolidated financial statements 42,763 44,834
Audit of overseas subsidiaries 14,505 14,505
Audit of UK subsidiaries
Total audit services 73,979 76,050
7. Directors and Employees
The employee benefit expenses during the year were as follows:
Group 2020 2019
€ €
Wages and salaries 434,945 615,764
Social security costs 56,543 74,310
491,488 690,074
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Company 2020 2019
€ €
Wages and salaries 121,449 136,768
Social security costs 15,912 9,684
137,361 146,452
The monthly average number employed during the year, including the Executive Directors, was:
Group 2020 2019
Directors 5 5
Administration 9 9
Quarry and factory operations 46 55
60 69
Company 2020 2019
Directors 3 3
3 3
Key management personnel, as defined by IAS 24 “Related Party Disclosures”, have been identified as the Board of
Directors. Detailed disclosures of Directors’ individual remuneration, Directors’ transactions and Directors’ interests
and share options, for those Directors who served during the year, are set out below. The aggregate amount of
Directors’ remuneration for the year was as follows:
Group 2020 2019
€ €
Salary 227,492 296,645
Consultancy fees – 76,393
Aggregate emoluments payable to directors 227,492 373,038
Group 2020 2019
€ €
Salary 132,600 136,768
Aggregate emoluments payable to directors 132,600 135,609
The Board of Directors’ remuneration is settled in GBP and is therefore subject to foreign exchange movements upon
translation to EUR. None of the Company’s directors exercised share options during the years ended 31 December
2020 and 2019
The highest paid director’s emoluments were as follows
Group 2020 2019
€ €
Total amount of emoluments payable 66,300 148,279
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Remuneration in respect of Directors was as follows:
Year ended 31 December 2020
Executive directors
Chris Gilbert(1)
Fiona Hadfield
Non-Executive directors
Andrew Allner(2)
Sir Colin Terry(2)
Roy Harrison(2)
Year ended 31 December 2019
Executive directors
Chris Gilbert(1)
Fiona Hadfield
Non-Executive directors
Andrew Allner(2)
Sir Colin Terry(2)
Roy Harrison(2)
Salary Consultancy Fees Total
€ € €
58,611 – 58,611
36,281 – 36,281
94,892 – 94,892
66,300 – 66,300
33,150 – 33,150
33,150 – 33,150
132,600 – 132,600
227,492 – 227,492
Salary Consultancy Fees Total
€ € €
71,233 77,046 148,279
91,178 – 91,178
162,411 77,046 239,457
68,384 – 68,384
34,192 – 34,192
34,192 – 34,192
136,768 – 136,768
299,179 77,046 376,225
(1) Executive Director Chris Gilbert agreed to utilise fifty per cent of his remuneration (net of tax) to subscribe for
Ordinary Shares in the Company. The balance of €80,780 due from the 1 January 2017 to 28 February 2018 is
accrued by the Company and not yet paid.
(2) The Non-Executive Directors of the Company agreed to utilise their fees (net of tax) to subscribe for Ordinary
Shares in the Company. Remuneration for the period from 1 January 2019 to 31 December 2019 is accrued in
the accounts and will be used to subscribe for shares in 2020. The Board of Directors’ remuneration is settled
in GBP and is therefore subject to foreign exchange movements upon translation to EUR.
8. Net finance costs
2020 2019
€ €
Finance costs
Interest expense on borrowings 279,957 343,952
Net foreign exchange loss on loan note instrument – 171,235
Movement in the fair value of derivative (note 19) 153,096 –
Interest payable on lease liabilities 23,733 2,451
456,786 517,638
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9. Net finance income
2020 2019
€ €
Finance income
Movement in the fair value of derivative (note 19) – 256,335
Net foreign exchange gain on loan note instrument 170,383 –
Interest income on bank deposits 189 1,436
170,572 257,771
10. Taxation
The tax on the Group’s loss before tax differs from the theoretical amount that would arise using the weighted
average tax rate applicable to losses of the Group as follows:
2020 2019
€ €
Reconciliation of effective tax rate
Loss before income tax (2,924,086) (2,533,540)
Tax calculated at domestic tax rates applicable to profits in the
respective countries at a weighted average rate of 15.05% (2019 – 14.1%) 440,166 357,247
Tax effect of expenses that are not deductible in determining taxable profit (56,898) (48,790)
Capital allowances in excess of depreciation and amortisation 1,297
Adjustment in respect of prior years 119,715
Deferred tax asset not recognised in respect of losses (383,268) (404,740)
Total tax credit for the year 119,715 –
The standard rate of corporation tax in the UK remained 19% with effect from 1 April 2017. Accordingly, the
Company’s losses for this accounting year are taxed at an effective rate of 19% (2019 – 19%).
The tax computations of Fox Marble Holdings plc Group show it has tax losses carried forward of €20,365,322
(2019 – €19,548,868). However due to the uncertainty of the timing of future profits, no deferred tax asset has
been recognised in these financial statements.
The deferred tax asset not recognised by the Group at 31 December 2020 is €3,607,271 (2019 – €3,214,464).
Group 2020 2019
€ €
The balance comprises temporary differences attributable to:
Intangible assets recognised on acquisition 84,504 84,504
84,504 84,504
A deferred tax liability arose on the acquisition of Gulf Marble Limited (UAE) in the year ended 31 December 2018
as a result of the fair valuation of the intangible asset acquired as part of the business combination.
11. Earnings per share
2020 2019
€ €
Loss for the year used for the calculation of basic EPS (2,804,371) (2,533,540)
Number of shares
Weighted average number of ordinary shares for the purpose of basic EPS 287,591,514 230,948,303
Effect of potentially dilutive ordinary shares –
Weighted average number of ordinary shares for the purpose of diluted EPS 287,591,514 230,948,303
Earnings per share:
Basic (0.01) (0.01)
Diluted (0.01) (0.01)
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PAGE | 61
Basic earnings per share is calculated by dividing the loss attributable to owners of the Company by the weighted
average number of ordinary shares in issue during the year.
12. Intangible assets
Group:
As at 31 December 2019 ,1 January
2020 and 31 December 2020
Accumulated amortisation
As at 1 January 2019
Amortisation charge
As at 31 December 2019 and as at
1 January 2020
Charge for the year
As at 31 December 2020
Net Book Value
As at 1 January 2019
As at 31 December 2019
As at 31 December 2020
Capitalised
exploration and
Mining rights evaluation
and licences expenditure Total
€ € €
Goodwill
€
84,504
2,725,840 92,866 2,903,210
–
–
–
9,537 12,936 22,473
41,438 2,358 43,796
50,975 15,294 66,269
41,441 2,365 43,807
92,416 17,659 110,076
84,504
84,504
84,504
2,716,304 79,930 2,880,738
2,674,866 77,572 2,836,942
2,633,424 75,207 2,793,135
Capitalised exploration and evaluation expenditure represent rights to the mining of decorative stone reserves in the
Pejë, Syriganë and Cervenillë quarries in Kosovo. The Group was granted in 2011 rights of use by the local
municipality for twenty years over land in the Syriganë and Rahovec region through acquisition of the issued share
capital of Rex Marble SH.P.K and H&P SH.P.K.
On 16 August 2014 the Company entered into a sub-lease arrangement with New World Holdings (Malta) Limited in
relation to the Omega Alexandrian White marble quarry at Prilep in North Macedonia. This new quarry site is adjacent
to the Company’s existing operations in Prilep. The consideration for the sub-lease was €1,256,376 (£1,000,000)
and a subsequent 40% gross revenue royalty obligation. The sub-lease has an initial term of 20 years, which is
extendable by the Company for a further twenty years. The sub-lease grants the Company the exclusive right to
quarry, process, remove and sell marble from the quarry. The Company will pay for and provide all the equipment
and staff required to operate this quarry. The quarry is not yet operational.
On 8 October 2018 the Company acquired Gulf Marble Investments Limited (UAE). As part of this acquisition the
Group acquired the direct sub licence to the Prilep Alpha quarry and eliminated the 40% gross revenue royalty
payable under the original agreements. The Group has recognised an intangible asset with a provisional fair value
of €1,469,464 which will be amortised over the remaining period of the licence. Further detail on this acquisition can
be found in note 28. The acquisition gave rise to a technical deferred tax liability and a corresponding entry to
goodwill of €84,504 in accordance with IFRS 3.
Intangible assets relating to quarries not yet in operation are treated as exploration and evaluation assets and
assessed for impairment in accordance with IFRS 6 Exploration and evaluation of mineral resources. The Group has
assessed intangible assets for indicators of impairment and performed a review for impairment and concluded that
no such impairment exists. In considering the value in use the company made a number of judgments around
anticipated production and sales, including judgments as to when block sales and pricing might recover from the
impact of the Covid 19 pandemic.
Other intangible assets relating to quarries in operation include amounts spent by the Group acquiring licences.
Where intangible assets are acquired through business combinations and no active market for the assets exists, the
fair value of these assets is determined by discounting estimated future net cash flows generated by the asset.
Intangible assets relating to quarries in operation are assessed annually for indicators of impairment in accordance
with IAS 36.
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13. Property, plant and equipment
Group:
Quarry
Plant &
Machinery
€
Factory
Plant &
Machinery
€
Rights of
use asset
€
Office
Equipment
and
Land and Leasehold
buildings improvements Total
€ € €
Cost
As at 1 January 2019
Additions
As at 31 December 2019 and
as at 1 January 2020
Additions
Disposals
As at 31 December 2020
– 3,431,312
50,306
597,773
–
242,710
160,000 30,488 6,933,293
– 936 891,725
1,372
3,909,266 3,481,618
88,131
(170,000)
3,910,638 3,399,749
242,710
90,132
332,842
160,000 31,424 7,825,018
– – 179,635
(170,000)
160,000 31,424 7,834,653
Accumulated depreciation
As at 1 January 2019
Depreciation charge(1)
As at 31 December 2019 and
as at 1 January 2020
Depreciation charge(1)
Disposals
As at 31 December 2020
1,920,274
530,593
138,408
110,056
2,450,867
225,454
–
2,676,321
248,464
133,643
(141,429)
240,678
–
6,827
6,827
61,044
–
67,871
– 29,859 2,088,541
– 657 648,133
– 30,516 2,736,674
– 550 420,691
– (141,429)
– 31,066 3,015,936
Net Book Value
As at 1 January 2019
As at 31 December 2019
As at 31 December 2020
1,391,219
1,458,399
3,292,904
3,233,154
1,234,317 3,159,070
–
235,883
264,971
160,000 629 4,844,752
160,000 908 5,088,344
160,000 359 4,818,716
(1) Depreciation on plant and machinery is included in in the cost of inventory to the extent it is directly related to
production of that inventory. In the year ended 31 December 2020 €261,871 of depreciation was included in the
cost of inventory produced (2019 €461,170).
The Group has assessed property, plant and equipment for indicators of impairment and concluded there are no
indicators of impairment arising in the current year.
Included in property, plant and equipment is €161,000 of assets that are currently located at the Maleshevë quarry
site. Access to the quarry site has been under dispute since July 2019, as disclosed further in Note 30. Due to the
dispute with Green Power Sh.P.K the Company were unable to physically inspect the assets as at 31 December 2020
year end. The assets were counted by an independent assessor in October 2019 as part of ongoing civil litigation
against Green Power Sh.P.K, and an injunction was granted to the Company stopping Green Power Sh.P.K or any
other third party moving, selling or interfering with them in any way. The Company is confident of its rights over the
assets and the enforcement of those rights, and that the value of the assets is not impaired.
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Company:
Rights of
use asset Total
€
Cost
As at 1 January 2019 – –
Additions 242,710 242,710
As at 31 December 2019 242,710 242,710
Additions – –
As at 31 December 2020 242,710 242,710
Accumulated depreciation
As at 1 January 2019 – –
Depreciation charge 6,827 6,827
As at 31 December 2019 6,827 6,827
Depreciation charge 46,022 46,022
As at 31 December 2020 52,849 52,849
Net Book Value
As at 31 December 2018 – –
As at 31 December 2019 235,883 235,883
As at 31 December 2020 189,861 189,861
Right-of-use assets
From 1 January 2019, the Group has adopted IFRS 16 Leases. Refer to notes 2 for the accounting policy. The right-
of-use assets recognised on adoption of the new leasing standard are reflected in the underlying asset classes of
property, plant and equipment.
14. Trade and other receivables
Group 2020 2019
€ €
Current assets
Trade receivables 459,226 223,540
Less: provision for impairment in receivables (99,178) (81,324)
Trade receivables (net) 360,048 142,216
Deposits on capital equipment 148,750 148,750
Accrued Revenue 87,374 91,300
Deposits 55,000 55,000
Other receivables 235,562 286,071
Prepayments 40,952 161,816
VAT recoverable 29,577 94,901
Amounts due from related party 195,090 202,631
1,152,317 1,182,685
Company 2020 2019
€ €
Current assets
Prepayments 157 48,540
Other receivables 65,939 233,520
VAT recoverable 15,883 14,743
81,979 296,803
Included in other receivables as at 31 December 2020 are other receivables of €55,145 (2019 – €58,957 relating to
the issue of share capital made by the Company on 31 August 2011. Included in this balance are amounts due from
directors of €24,884 (2019 – €26,573).
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Trade receivables are amounts due from customers for goods sold or services performed in the ordinary course of
business. They are generally due for settlement within 30 days and therefore are all classified as current. Trade
receivables are recognised initially at the amount of consideration that is unconditional unless they contain
significant financing components, when they are recognised at fair value. The Group holds the trade receivables with
the objective to collect the contractual cash flows and therefore measures them subsequently at amortised cost
using the effective interest method. Details about the Group’s impairment policies and the calculation of the loss
allowance are provided in note 21.
As at 31 December 2020 €195,090 (2018 – €202,631) is due from Fox Marble FZC, a company in which the
Company holds controls 34% of the issued share capital.
Information about the impairment of trade receivables and the Group’s exposure to credit risk, foreign currency risk
and interest rate risk can be found in note 21.
Trade receivables are disclosed net of a provision for bad and doubtful debts. The provision for bad and doubtful
debts is based on specific risk assessment and reference to past default experience. Further details are included in
note 21.
Included in receivables for the Group are receivables denominated in GBP of €248,040 (2019 – €309,763). There
are nil receivables denominated in USD (2019 – nil). Included in receivables for the Company are receivables
denominated in GBP of €81,979 (2019 – €296,803). All GBP denominated receivables have been translated to Euro
at the exchange rate prevailing at 31 December 2020. All other receivables are Euro denominated. The Directors
consider that the carrying amount of trade and other receivables approximates their fair value.
Included in receivables for the Group are deposits on capital equipment of €148,750 (2019 – €148,750). These
relate to additional equipment for the factory site which the Group expects to install within the next twelve months.
The Company is currently planning further factory capacity expansion and expects this to include expansion of the
gang saw capacity. To date the installation of the third gangsaw has been delayed till such point as the volume of
sales at the factory necessitated its installation.
15. Inventories
Group 2020 2019
€ €
Block Marble 2,794,092 3,458,722
Processed marble 247,186 469,675
3,041,278 3,928,397
The cost of inventories recognised as an expense and included in cost of sales amounted to €559,358 (2019 –
€784,567). In the current year the Group has recognised a provision of € 927,841 (2019 – €392,412) in relation to
inventory. The cumulative provision against inventory held in stock at 31 December 2020 is €2,082,640 (2019 –
€1,155,159).
Included in inventories is €835,369 of block marble that is currently located at the Maleshevë quarry site. Access to
the quarry site has been under dispute since July 2019, as disclosed further in Note 30. Due to the dispute with
Green Power Sh.P.K the Company were unable to perform a stocktake as at 31 December 2020 year end. The stock
was counted by an independent assessor in October 2019 as part of ongoing civil litigation against Green Power
Sh.P.K, and an injunction was granted to the Company stopping Green Power Sh.P.K or any other third party moving,
selling or interfering with the stock in any way. The Company is confident of its rights over this stock and the
enforcement of those rights, and that the value of this stock is recoverable.
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16. Trade and other payables
Group 2020 2019
€ €
Trade payables 278,481 353,840
Contract Liabilities – Advances received from customers 293,360 313,582
Amounts due to related parties 500,371 313,706
Other payables 308,793 5,582
Accruals 144,093 190,900
Other tax and social security payable 35,767 21,766
1,560,865 1,199,376
Company 2020 2019
€ €
Trade payables 147,193 99,940
Amounts due to related parties 331,556 212,670
Accruals 83,313 85,446
Other payables 55,747 –
617,809 398,056
Amounts due to related parties are considered further in note 23.
Included in trade and other payables of the Group are GBP denominated payables of €690,231 (2019- €701,989)
and USD denominated payables of €293,360 (2019 – €328,273). All other trade and other payables are Euro
denominated. All GBP denominated payables have been translated to Euro at the exchange rate prevailing at
31 December 2019.
All trade and other payables of the Company are GBP denominated and have been translated to Euro at the exchange
rate prevailing at 31 December 2020. All trade and other payables at 31 December 2020 are due within one year
and are non-interest bearing. The directors consider that the carrying amount of trade and other payables
approximates their fair value.
17. Borrowings
Group and Company: 2019 2019
€ €
Current borrowings
Convertible loan notes held at amortised cost 1,841,027 1,924,821
Derivative over own equity at fair value 466 4,875
1,841,493 1,929,696
Non-current borrowings
Convertible loan notes held at amortised cost 2,640,372 2,523,471
Derivative over own equity at fair value 158,756 1,250
2,799,128 2,524,721
a.
Series 3, 4, 6, 7, 8, 9 and 10 Loan Notes
The Company has previously issued the following loan notes:
•
•
•
On 28 June 2017, the Company issued a convertible loan note with a value of £440,000 (“Series 3 Loan Note”)
to a non-related party. This new Series 3 Loan Note had an interest rate of 8% per annum. The Loan Note was
due for conversion or repayment on 31 August 2020 with a conversion price set at 10p.
On 28 December 2017, the Company issued a convertible loan note with a value of £160,000 (“Series 4 Loan
Note”) to a non-related party. This new Series 4 Loan Note had an interest rate of 8% per annum. The Loan
Note was due for conversion or repayment on 31 August 2020 with a conversion price set at 10.5p.
On 30 July 2018, the Company issued a convertible loan note with a value of £300,000 (“Series 6 Loan Note”)
to a non-related party. This new Series 6 Loan Note had an interest rate of 8% per annum. The Loan Note was
due for conversion or repayment on 30 July 2020 with a conversion price set at 10.5p.
PAGE | 66 F O X M A R B L E H O L D I N G S P L C A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 2 0
•
•
On 30 September 2018, the Company issued a convertible loan note with a value of £300,000 (“Series 7 Loan
Note”) to a non-related party. This new Series 7 Loan Note had an interest rate of 8% per annum. The Loan
Note was due for conversion or repayment on 30 September 2020 with a conversion price set at 10.5p.
On 4 February 2019, the Company issued a convertible loan note with a value of £700,000 (“Series 8-10 Loan
Note”) to a non-related party. This new Series 8-10 Loan Note had an interest rate of 8% per annum. The Loan
Note was due for conversion or repayment on 4 February 2021 with a conversion price set at 10.5p.
As at 31 December 2019, the above Loan Notes held at amortised cost had a balance of €2,265,553. The
Stockholders’ option to convert the loan was treated as an embedded derivative and measured at fair value. As at
31 December 2019 the derivative had a value of €2,243. The fair values were assessed using a Black Scholes
methodology. The derivative was classified as a level 3 derivative on the basis that the valuation includes one or
more significant inputs not based on observable market data.
On the 27 May 2020, the company reached agreement with the holders of the Series 3, 4, 6, 7, 8, 9 and 10 loan
note holders to reschedule the terms of the loan notes. The loan note, together with any accrued interest at that
date was exchanged for Series 11 Loan Note, whose terms are considered below.
b.
Series 5 Loan Note
On 19 January 2018, the Company issued a convertible loan note with a value of £75,000 (“Series 5 Loan Note”) to
a non-related party. This new Series 5 Loan Note has an interest rate of 8% per annum. The Loan Note was due for
conversion or repayment on 19 January 2020 with a conversion price set at 10.5p.
As at 31 December 2020, the Series 5 Loan Note held at amortised cost had a balance of €83,567 (31 December
2019 – €91,073). The Stockholders’ option to convert the loan has been treated as an embedded derivative and
measured at fair value. As at 31 December 2020, the derivative had a value of €52 (31 December 2019 – €84). The
fair value has been assessed using a Black Scholes methodology. The derivative is classified as a level 3 derivative
on the basis that the valuation includes one or more significant inputs not based on observable market data.
The Loan note was repaid in January 2021.
c. Other Borrowings
In September 2019, the Company entered a short-term borrowing arrangement with a value of £345,000. The
interest rate was 1% per calendar month with a repayment date of the 31 March 2020. As at 31 December 2020
the carrying value of these loans was €407,618.
On the 27 May 2020 holders of £225,000 of these borrowings agreed to exchange them with Series 11 Loan notes
as described below. The term of the remaining borrowings amounting to £120,000 were varied to extend the
repayment date to 30 June 2023. As at 31 December 2020 these held at amortised cost had a balance €145,901.
d. Gulf Loan Note
As consideration for the acquisition of Gulf Marble Investments Limited Fox Marble has issued an Unsecured
Convertible Loan Note (“Gulf Loan Note”) in the amount of €1,785,000. Under the terms of the Loan Note, the holder
may elect to convert at a conversion price of 130% of the 3-month volume weighted average share price. The Loan
Note is repayable from 1 October 2020. The Loan Note carries an interest rate of Libor plus 1.5% payable annually
in arrears.
The loan note is due for repayment on the 8 August 2021. The Company is currently in negotiation with the loan
note holders to secure an extension to the term of the loan note.
As at 31 December 2020, the Gulf Loan Note held at amortised cost had a balance of €1,757,740 (31 December
2019 – €1,676,062). The Stockholders’ option to convert the loan has been treated as an embedded derivative and
measured at fair value. As at 31 December 2020, the derivative had a value of €181 (31 December 2019 – €382).
The fair value has been assessed using a Black Scholes methodology. The derivative is classified as a level 3
derivative on the basis that the valuation includes one or more significant inputs not based on observable market
data.
e.
Series 11 Loan Note
On the 27 May 2020 the company reached agreement with the holders of the Series 3, 4, 6, 7, 8, 9 and 10 loan
note holders to reschedule the terms of the loan notes.
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PAGE | 67
The existing loan notes were cancelled and replaced by the Series 11 Loan Note. The Series 11 Loan Note has an
interest rate of 2% per annum. The Loan note is due for conversion or repayment on the 30 June 2026 with a
conversion price of 5p.
As at 31 December 2020, the Series 11 Loan Note held at amortised cost had a balance of €2,494,470. The
Stockholders’ option to convert the loan has been treated as an embedded derivative and measured at fair value.
As at 31 December 2020, the derivative had a value of €155,188. The fair value has been assessed using a Black
Scholes methodology. The derivative is classified as a level 3 derivative on the basis that the valuation includes one
or more significant inputs not based on observable market data.
The Directors consider that the carrying amount of borrowings approximates their fair value at 31 December 2020.
18. Leases
From 1 January 2019, the Group has adopted IFRS 16 Leases. Refer to Note 2 for the accounting policy. The lease
liabilities recognised on adoption of the new leasing standard are reflected in long term liabilities. The Group also
has certain leases with lease terms of 12 months or less and leases of assets with low values. The Group applies
the “short-term lease” and “lease of low-value assets” recognition exemptions for these leases. Set out below are
the carrying amounts of lease liabilities and the movements during the period.
Group: Year ended Year ended
31 December 31 December
2020 2019
€ €
At 1 January 220,721 –
Additions 90,131 218,270
Interest expense 23,733 2,451
Foreign Exchange (25,725) –
Rent payments made in year (48,379) –
At 31 December 260,481 220,721
Company: Year ended Year ended
31 December 31 December
2020 2019
€ €
At 1 January 220,721 –
Additions – 218,270
Interest expense 16,522 2,451
Foreign Exchange (25,725) –
Rent payments made in year (37,279) –
At 31 December 174,239 220,721
As at 31 December 2020
Carrying Contractual
cash flows
Amount
€
€
6 months
or less
€
6-12
months 1-2 years 2-5 years
€ € €
Lease Liability
260,481
323,131
38,861
38,861 77,721 167,689
As at 31 December 2019
Carrying Contractual
cash flows
Amount
€
€
6 months
or less
€
6-12
months 1-2 years 2-5 years
€ € €
Lease Liability
220,721
266,576
23,384
28,061 112,243 102,888
Municipal rights of use as at 31 December 2020 and 31 December 2019 are as follows
Area
Area
m2’000
Lease Period Payment
start date
Cervenillë
Syriganë
Municipal rights of use
Municipal rights of use
2,000
540
04/02/2011 10 years €0.5 per cubic metre extracted
18/03/2011 20 years €0.5 per cubic metre extracted
Municipal rights of use relate to the Group’s rights over land on which the quarry sites are located.
PAGE | 68 F O X M A R B L E H O L D I N G S P L C A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 2 0
19. Share capital
Group and Company:
2020
Number
2019
Number
Share
capital
2020
€
Share Share Share
capital premium premium
2019 2020 2019
€ € €
Issued, called up and fully paid
Ordinary shares of £0.01 each
At 1 January
Issued in the year
At 31 December
262,657,882 217,885,322
44,772,560
308,372,174 262,657,882
45,714,292
3,220,221
500,786
3,721,007
2,700,688 31,793,870 29,941,977
519,532 263,116 1,851,893
3,220,221 32,056,986 31,793,870
On the 17 June 2020 the Company issued 45,714,292 new Ordinary Shares at a price of 1.75 pence per share
through Allenby Capital and Brandon Hill Capital Limited to raise £0.8 million before expenses. Expenses of €112,492
were offset to share premium in the year ended 31 December 2020 (2019 - €31,969).
20. Share based payment reserve
Group and Company: Year ended Year ended
31 December 31 December
2020 2019
€ €
At 1 January 85,247 85,247
Equity settled share-based payment charge 21,355 –
At 31 December 106,602 85,247
Date of Issue
Exercise price Granted Outstanding
Performance Warrants
Beaufort Securities Limited
Beaufort Securities Limited
Consultants
Consultants
Warrants
Placing Warrants
Share options
DSOP Share scheme
12 July 2017
12 July 2017
13 September 2019
06 December 2019
15p 100,000 100,000
20p 75,000 75,000
4p 1,704,316 1,704,316
2.75p 1,818,182 1,818,182
17 June 2020
3.5p 22,857,146 22,857,146
31 August 2012
20p 120,000 120,000
On 12 June 2017 Beaufort Securities Limited was granted performance warrants, in each case subject to the mid-
price of the ordinary shares trading above the exercise price for a consecutive period of more than 3 months. These
warrants could be exercised for a period of up to 3 years from their date of issue. The warrants expired unexercised
on 12 July 2020.
In 2019 the Company issued 3,522,498 warrants as part of the package of compensation to two senior consultants.
The warrants vest in equal instalments over three years as a condition of continued employment.
On the 17 June 2020 22,857,146 warrants were issued with an exercise price of 3.5p as part of the placing
completed on that date. Warrants over new ordinary shares were issued on the basis of one for every two Placing
Shares, exercisable at a price of 3.5 pence per share, representing a 100% premium to the Placing Price. The
warrants have a exercise period of 18 months.
The Company has a set up a Discretionary Share Option Plan (DSOP) for the benefit of employees. The Company
granted options over an aggregate of 120,000 Ordinary Shares at the IPO Placing Price of 20p to Fiona Hadfield
under the terms of the DSOP on 31 August 2012. The options vested after three years. Fair value of the options has
been evaluated using a Black Scholes model.
21. Capital and financial risk management
Capital risk management
The group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern
in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital
structure to reduce the cost of capital.
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PAG E | 69
The capital structure of the Group consists of equity attributable to equity holders comprising issued share capital,
reserves and retained earnings as disclosed in the Statement of Changes in Equity.
In order to maintain or adjust the capital structure, the group may adjust the amount of dividends paid to
shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
Consistent with others in the industry, the Group monitors capital based on the gearing ratio and net debt/cash. This
ratio is calculated as total borrowings divided by total capital. Net debt is calculated as total borrowings less cash
and cash equivalents. Total capital is calculated as ‘equity’ as shown in the consolidated statement of financial
position plus total borrowings.
The gearing ratios at 31 December 2020 and 31 December 2019 are as follows:
Group Year ended Year ended
31 December 31 December
2020 2019
€ €
Total borrowings (note 17) (4,640,621) (4,454,418)
Less cash and cash equivalents 337,741 578,417
Net debt (4,302,880) (3,876,002)
Total equity 5,636,653 7,655,765
Total capital 10,277,273 12,110,183
Gearing ratio 44.96% 36.78%
Company Year ended Year ended
31 December 31 December
2020 2019
€ €
Total borrowings (note 17) (4,640,621) (4,454,418)
Less cash and cash equivalents 112,241 545,587
Net debt (4,528,380) (3,908,831)
Total equity 14,273,818 14,258,009
Total capital 18,914,440 18,712,427
Gearing ratio 24.53% 23.80%
Reconciliation of movement in Net Debt
Group
Cash and cash equivalents
Borrowings
Net debt
Company
Cash and cash equivalents
Borrowings
Net debt
Financial risk management
Balance at
1 January 2020
€
Balance at
Foreign
Exchange
Non cash 31 December
Difference movements Cash Flow 2020
€ € €
€
578,417
(4,454,418)
(3,876,001)
–
170,383
170,383
– (240,676) 337,741
(279,956) (76,630) (4,640,621)
(279,956) (317,306) (4,302,880)
Balance at
1 January 2020
€
Balance at
Foreign
Exchange
Non cash 31 December
Difference movements Cash Flow 2020
€ € €
€
545,587
(4,454,418)
(3,908,831)
–
170,383
170,383
– (433,346) 112,241
(279,956) (76,630) (4,640,621)
(279,956) (509,976 (4,528,380)
The Group is exposed to several financial risks through its normal operations, the most significant of which are
credit, foreign exchange and liquidity risks.
The Group’s overall risk management programme focuses on the unpredictability of financial markets and seeks to
minimise the potential adverse effects on the Group’s financial performance. Risk management is carried out by the
board of directors. The Board has established polices and principles for overall risk management covering specific
areas such as foreign exchange risk, credit risk and investment of excess liquidity.
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Restricted cash
The Group and Company hold a balance of €39,937 of restricted cash at 31 December 2020 (31 December 2019 –
Nil) relating to litigation funding received as at 31 December 2020. Litigation funds received are required to be spent
solely on costs associated with the arbitration proceedings being brought against the republic of Kosovo. Further
details can be found in note 27.
Credit risk
Credit risk is managed on a group basis. The Group is responsible for managing and analysing the credit risk for
each of their new clients before standard payment and delivery terms and conditions are offered. Credit risk arises
from cash and cash equivalents, and deposits with banks and financial institutions, as well as credit exposures to
wholesale and retail customers, including outstanding receivables and committed transactions. For banks and
financial institutions, only independently rated parties with a minimum rating of ‘A’ are accepted. If wholesale
customers are independently rated, these ratings are used. If there is no independent rating, risk control assesses
the credit quality of the customer, considering its financial position, past experience and other factors. Sales to retail
customers are settled in cash. Management does not expect any losses from non-performance by these
counterparties.
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit
risk at the reporting date was €1,380,703 (2019 - €1,598,094). Financial assets are assessed for impairment
annually and a provision for bad debt of €14,359 has been recognised in 2020 (2019 – €81,234).
The Group has two types of financial assets that are subject to the expected credit loss model:
•
•
trade receivables for sales of inventory
cash and cash equivalents
The Group was required to revise its impairment methodology under IFRS 9 for each of these classes of assets.
While cash and cash equivalents are subject to the impairment requirements of IFRS 9, the identified impairment
loss was immaterial.
The Group applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime expected
loss allowance for all trade receivables and contract assets. To measure the expected credit losses, trade receivables
and contract assets have been grouped based on shared credit risk characteristics and the days past due. The
expected loss rates are based on the payment profiles of sales over a period of 24 month before 31 December 2020
or 1 January 2020 respectively and the corresponding historical credit losses experienced within this period.
The historical loss rates are adjusted to reflect current and forward-looking information on macroeconomic factors
affecting the ability of the customers to settle the receivables. The group has identified the GDP and the
unemployment rate of the countries in which it sells its goods and services to be the most relevant factors, and
accordingly adjusts the historical loss rates based on expected changes in these factors.
On that basis, the loss allowance as at 31 December 2020 and 31 December 2019 was determined as follows for
both trade receivables:
31 December 2020
Expected loss rate
Gross Carrying Amount
Loss allowance
31 December 2019
Expected loss rate
Gross Carrying Amount
Loss allowance
More than
30 days
past due
More than More than
60 days 90 days
past due past due Total
16%
€4,500
€735
22% 39% 36%
€2,181 €209,862 459,226
€468 €71,442 (99,178)
More than
30 days
past due
More than More than
60 days 90 days
past due past due Total
16%
€4,843
€791
22% 39% 36%
€5,060 €196,176 €223,540
€1,133 €77,490 €81,324
Current
11%
€242,685
€26,532
Current
11%
€17,461
€1,910
Trade receivables and contract assets are written off when there is no reasonable expectation of recovery. Indicators
that there is no reasonable expectation of recovery include, amongst others, the failure of a debtor to engage in a
repayment plan with the group, and a failure to make contractual payments for a period of greater than 120 days
past due.
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PAGE | 7 1
Impairment losses on trade receivables and contract assets are presented as net impairment losses within operating
profit. Subsequent recoveries of amounts previously written off are credited against the same line item.
As at 31 December 2020 the Group holds €377,678 in cash and cash equivalents and restricted cash (2019 –
€578,417). The Group mitigates banking sector credit risk through the use of banks with no lower than a single A
rating.
As at 31 December 2020 the Company holds €152,276 in cash and cash equivalents and restricted cash (2019 –
€545,587). The Company mitigates banking sector credit risk through the use of banks with no lower than a single
A rating.
Foreign exchange risk
The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures,
primarily with respect to the Euro and GBP. Foreign exchange risk arises from future commercial transactions and
recognised assets and liabilities.
There is exposure to movements in the GBP/EUR exchange rate as a portion of the cash and restricted cash held by
the group is denominated in GBP and the Group’s borrowing facilities are GBP denominated.
31 December 31 December
2020 2019
Group € €
Cash denominated in EUR 207,544 26,875
Cash denominated in GBP 130,093 551,482
Cash denominated in USD 104 59
337,741 578,417
Company
Cash denominated in EUR 97 98
Cash denominated in GBP 112,241 545,489
112,338 545,587
Restricted cash is held in GBP.
On the 21 December 2020 the Company received a payment in error of €212,239. Once the error had been noted
and resolved the repayment of the balance was made in January 2021. At 31 December 2020 this amount is included
in cash and cash equivalents.
As at 31 December 2020 if the currency has weakened/strengthened by 10% against the GBP with all other variables
constant, post-tax profit would have been €275,231 higher/lower, mainly as a result of the foreign exchange
gains/losses on translation of the GBP denominated convertible loan note and GBP denominated receivables and
payables (2019 - €325,132). Similarly, the Company has calculated the impact of a 10% increase or decrease in the
GBP/EUR exchange rate would have a €283,401 (2019 – €193,214) impact on the net assets of the Company, with
all other variables held constant. A 10% variation in the foreign exchange rate is considered appropriate as it reflects
a maximum volatility in the exchange rates over the given period.
For the Company, as at 31 December 2020 if the currency has weakened/strengthened by 10% against the GBP with
all other variables constant, post-tax profit would have been €292,310 higher/lower, mainly as a result of the foreign
exchange gains/losses on translation of the GBP denominated convertible loan note and GBP denominated
receivables and payables (2019 - €89,410). Similarly, the Company has calculated the impact of a 10% increase or
decrease in the GBP/EUR exchange rate would have a €292,310 (2019 – €173,210) impact on the net assets of the
Company, with all other variables held constant. A 10% variation in the foreign exchange rate is considered
appropriate as it reflects a maximum volatility in the exchange rates over the given period.
The Group manages foreign exchange risk through natural hedging of its cash deposits against existing GBP/EUR
commitments and by monitoring exchange rate fluctuations and forecast cash flows to examine the need for any
formal hedging arrangement.
Liquidity risk
Cash flow forecasting is performed in the operating entities of the group and aggregated by group finance. Group
finance monitors rolling forecasts of the Group’s liquidity requirements to ensure it has sufficient cash to meet
operational needs.
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Surplus cash held by the operating entities over and above the balance required for working capital management is
transferred to the group treasury.
The table below analyses the Group’s non-derivative financial liabilities into relevant maturity groupings based on
the remaining period at the balance sheet date to the contractual maturity date.
The following are the contractual maturities of financial liabilities for the Group as at 31 December 2020 based upon
contractual cash flows:
31 December 2019
Carrying Contractual
cash flows
Amount
€
€
6 months
or less
€
6-12 1-2 2-5
months years years
€ € €
Borrowings
Trade and other payables
4,454,418
1,199,377
5,078,033
1,199,377
626,889
1,199,377
2,076,353 2,374,790
31 December 2020
Carrying Contractual
cash flows
Amount
€
€
6 months
or less
€
6-12 1-2 years 2-5 years
months
€ € €
Borrowings
Trade and other payables
4,640,621
1,560,865
4,605,568
1,560,865
134,665
1,560,865
1,825,165 64,413 2,581,325
– – –
For the Company as at 31 December 2020 and 2019, contractual liabilities with regards to convertible loan notes
are the same as for the Group. Trade and other payables’ contractual cash flows payable in 6 months or less as at
31 December 2020 are €617,089 (2018 – €398,056).
Ultimate responsibility for liquidity risk management rests with the board of directors, which has established an
appropriate liquidity risk management framework for the management of the Group’s short-, medium-, long-term
funding and liquidity management requirements. The Group manages liquidity risk by maintaining adequate
reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash
flows, and by matching the maturity profiles of financial assets and liabilities.
Interest rate risk
As at 31 December 2020, the Company holds borrowings of €1,785,000 with variable interest rate (2019 –
€1,785,000). The 2020 Convertible Loan Note carry an interest rate of Libor plus 1.5% payable annually in arrears.
All other borrowings are under fixed interest rates. For each one hundred basis point rise in market interest rates at
31 December 2020 there would be an increase in loss before tax by approximately €17,850 (2019 – €17,850).
Fair Values
The directors have reviewed the financial statements and have concluded that, there are no significant differences
between the book values and the fair values of the financial assets and financial liabilities of the Group and Company
as at 31 December 2020 and 2019.
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PAGE | 7 3
22. Interests in other undertakings
%
Ownership
Date acquired/
Incorporated
Fox Marble Limited
100%
3 August 2012
Fox Marble Kosova Sh.P.K
100%
11 December 2012
Rex Marble Sh.P.K
100%
3 August 2012
H&P Sh.P.K
100%
3 August 2012
Registered Office
160 Camden High
Street, NW1 0NE
Garibaldi 1/2,
Pristina:,
Bulevardl Ddshmoret
e Kombit, Nr.72lA-7,
Pristina
Bill Klinton n36,
Pristina
Place of
incorporation
Principal
activity
England & Wales
Operating Company
Kosovo
Operating Company
Kosovo
Kosovo
Holding of licences
& rights
Holding of licences
& rights
Holding of licences
& rights
Granit Shala Sh.P.K
100%
3 August 2012
Banje, Istog
Kosovo
Fox Marble Asia Limited
51%
7 November 2016
Stone Alliance LLC
59%
13 April 2015
Gulf Marble Investments
Limited
Gulf Marble Investments
Limited
100%
8 October 2018
100%
8 October 2018
Fox Marble FZC
34%
2 September 2018
Fox Marble India Private
Limited
49%
18 October 2018
England & Wales
Dormant
United States
Dormant
United Arab Emirates
Holding of licences
& rights
England & Wales
Dormant
United Arab Emirates
Sales activity
India
Sales activity
160 Camden High
Street, NW1 0NE
1209 Orange street,
Wilmington,
Delaware 19801
PO Box 37172,
Dubai, UAE
160 Camden High
Street, NW1 0NE
PO Box 932,
Emirate of Ajman
2A Floor, Grd Plot-
759 A Jyoti Sadan,
Sitaladevi Temple
Road, Mahim
All the shareholdings in subsidiary and associate undertakings comprise ordinary shares. Fox Marble Kosova Sh.P.K,
Rex Marble Sh.P.K, H&P Sh.P.K and Granit Shala Sh.P.K are held via the Company’s shareholding in Fox Marble
Limited. Interest in Gulf Marble Investments Limited (UK) is held via the Company’s shareholding in Gulf Marble
Investments Limited (UAE). All subsidiary undertakings are included in the consolidation.
There are no significant restrictions on the Company’s ability to access or use the assets and settle the liabilities of
the group, to transfer cash or assets from other entities within the group or other requirements that may restrict
dividends and other capital distributions being paid, or loans and advances being made or repaid, to (or from) other
entities within the Group.
Fox Marble Limited is exempt from the requirements of the Companies Act 2006 relating to the audit of individual
accounts by virtue of s479A of the Companies Act 2006 for the year ended 31 December 2020.
Non-controlling interests
There are no non-controlling interests in subsidiary undertakings that are considered material to the group in the
year ended 31 December 2020 (2019 – nil), as the entities remain dormant. There were no transactions with non-
controlling interests in the year ended 31 December 2020 (2019 – nil).
23. Related party transactions
The executive directors are also considered key management as defined by IAS 24 ‘Related Party Disclosures
(revised 2009)’. The remuneration of key management is considered in note 8. The compensation of Chris Gilbert is
in part paid via Rockmasters Limited a company wholly owned by him.
As at 31 December 2020 the Group has accrued €423,628 due to directors of the Company in respect of fees due
to them (2019 - €285,583). As at 31 December 2020 the Company has accrued €331,556 due to directors of the
Company in respect of fees due to them (2018 - €212,670). As at 31 December 2020 there is €29,238 payable
(2019 - €17,643) to directors of the Company as repayment for corporate and travel expenses incurred on behalf
of the Company.
The Company only financial statements of Fox Marble Holdings plc include amounts receivable from its subsidiary
undertaking Fox Marble Limited of €15,571,245 (2019 – €14,541,805). Amounts provided to Fox Marble Limited
relate to the provision of funding for operations and capital expenditure.
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The Company and Group have receivables from directors and former directors of the Company of €24,844 (2019 -
€26,572) relating to the issue of share capital on the 31 August 2011. Included in trade and other receivables is
€195,091 due from Fox Marble FZC, a related party in which Fox Marble Holdings Plc owns 34% of the issued share
capital.
Included in borrowings due to the Company is €86,479 due to Andrew Muir who is related party of the Company by
virtue of his shareholding in the Company.
On the 4 April 2019 the Company announced that it had conditionally acquired Green Power Sh.P.K and Scope
Sh.P.K. Florije Rrustemi has a beneficial interest in Green Power and Scope. Florije Rrustemi is the wife of Naim
Rrustemi – a director of Fox Marble Kosovo Sh.P.K (“FMK”). FMK is a wholly owned subsidiary of Fox Marble Limited
(“FML”) and FML is a wholly owned subsidiary of the Company. The Transactions are therefore related party
transactions pursuant to the AIM Rules. The Directors of the Company, none of whom have an interest in the
Transactions believe that the terms of the Transactions, having consulted with the Company’s nominated adviser, are
fair and reasonable insofar as shareholders are concerned. This transaction was subsequently suspended and is now
the subject of litigation, as discussed in note 30.
24. Commitments
(a) Capital commitments
Capital expenditure contracted for but not yet incurred at the end of the reporting year was nil (2018 – Nil).
As at 31 December 2020 the Group had capital equipment deposits of €148,750 (2018 - €148,750) which are
expected to be capitalised into property plant and equipment in 2021.
(b) Lease commitments
The Group leases office space and warehousing showroom space under non-cancellable operating lease agreements.
Lease terms are between one and five years. The future aggregate minimum lease payments under non-cancellable
operating leases are as follows:
Year ended Year ended
31 December 31 December
2020 2019
€ €
Expiring within one year – –
Expiring within one to five years 320,352 225,625
320,352 225,625
25. Investments
Company: 2020 2019
€ €
Shares in subsidiary undertakings 3,711,127 3,711,127
Loans to subsidiary undertakings 15,602,245 14,541,805
19,313,372 18,252,932
An impairment charge of Nil in the carrying value of the investment in Fox Marble Limited was recognised in the year
ended 31 December 2020 (2019 – €9,468,513).
26. Controlling Parties
There is no controlling party. Chris Gilbert and Dr Etrur Albani are deemed to be acting in concert for the purposes
of the City Code, and who as at 28 May 2021 control 11.58% of the share capital of the Company.
27. Contingent Liabilities
The Company has launched Civil Proceedings against the owners of Green Power Sh.P.K in Kosovo for breach of
contract for the sale of Green Power and the pre-existing operating contract for the M3 quarry.
Should the Company be unsuccessful in asserting its rights over the M3 quarry it will incur a direct loss of €119,424,
due to investments made in the power installation at the M3 quarry with a carrying value in the accounts of €64,424,
and deposit paid for quarry reconditioning of €55,000.
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On 4 September 2019 Fox Marble launched United National Commission on International Trade Law (UNCITRAL)
arbitration proceedings, against the Republic of Kosovo for damages in excess of €195 million, as a result of the
failure of the State to protect Fox Marble’s rights over the Maleshevë quarry.
The Company believes the Kosovan Government to be in clear breach of its responsibilities towards the Company as
a foreign investor in Kosovo and that this action is in the best interests of its shareholders and employees. The
Company anticipates a fair and satisfactory resolution.
All the Company’s other operations, including the quarries and processing factory in Kosovo and the Prilep quarry in
Northern Macedonia, are unaffected.
The background to the claim is the dispute arising with the former shareholders of Green Power Sh.P.K and Scope
Sh.P.K, which has resulted in Fox Marble being prevented from operating the Maleshevë quarry. Since the dispute
arose Fox Marble has been working to resolve the matter with the appropriate Kosovan Government agencies,
namely the Kosovo mining regulator, the Independent Commission of Mines and Mineral (“ICMM”) and the Agjencia
e Regjistrimit të Bizneseve (“ARBK”), the Kosovo business registration agency. However, in what is a clear breach of
Kosovo Law 04/L-220 “On Foreign Investment” (2014), Fox Marble has been prevented from asserting its rights in
these matters.
Despite the cumulative weight of evidence, Fox Marble was denied the right to appeal any decision relating to the
Maleshevë quarry in direct contravention of the provisions of the Kosovo foreign investment law, Law 04 /L-220.
As a direct consequence of the ARBK and ICMM decisions, the Company has brought arbitration proceedings against
the Republic of Kosovo pursuant to Article 16 of the Kosovo foreign investment law (as above). The basis of the claim
for damages is the investment made to date in the Maleshevë quarry, loss of future revenues associated with the
site and future investment plans in Kosovo. Significant future investment plans are the subject of the MOU signed
in October 2016 by the Government of Kosovo and Stone Alliance LLC which is majority owned by Fox Marble.
On the 16 December 2020 the Company announced that it had engaged the services of Dentons CS Europe LLP to
act on the Company’s behalf in its circa €195 million claim against the Republic of Kosovo. Dentons have agreed a
fee arrangement which enables Fox Marble to bring the Arbitration through to its conclusion.
On the same day the Company announced it had secured litigation funds of £500,000. As at 31 December 2020
£75,000 of funds had been received, and a further £350,000 was received since year end and prior to the date of
this report. The litigation funding has been raised from private investors. This funding, plus a pre-agreed return on
investment, will only be repaid if the Arbitration proceedings are successful and no Company shares are being
provided to the investors in the Litigation Fund.
28. Events after the reporting period
On 16 December 2020, the Company announced a conditional placing of 65,500,000 new Ordinary Shares at a price
of 1.6 pence per share through Brandon Hill Capital Limited, the Company’s joint broker, to raise £1,048,000 million
before expenses.
The Placing was conditional, inter alia, on shareholders giving the directors authorities to issue new ordinary shares
on a non-pre-emptive basis. A General Meeting of shareholders was held. on 4 January 2021 to grant the Board
authority to allot the Placing Shares for cash on a non pre-emptive basis, at which authority was granted.
Application was made for the 65,500,000 Placing Shares to be admitted to trading on AIM on the 5 January 2021
The Placing Shares rank pari passu with the existing ordinary shares of the Company.
On the 16 February 2021 the Company issued 5,000,000 new ordinary shares in the Company to five individuals in
lieu of cash payments. The issue of shares reflects the contributions made to the Company by these individuals.
On the 1 May 2021 Fox Marble agreed a credit facility with Brandon Hill Capital Limited for £1,000,000. The
repayment date of the facility is 31 May 2022 and any amounts drawn down would incur an interest rate of 9%. As
at the date of this report no amounts had been drawn down on this facility.
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Notice of General Meeting
NOTICE IS HEREBY GIVEN that the Annual General Meeting of Fox Marble Holdings plc (“the Company”) will be held
at 2.00 pm on the 30 June 2021 at 160 Camden High Street, NW1 0NE, London to consider, and if thought fit, to
pass the following resolutions of which resolutions 1 to 9 will be proposed as ordinary resolutions and resolution 10
as a special resolution.
1. To receive the annual report and financial statements for the year ended 31 December 2020.
2. To re-elect Andrew Allner as a Director of the Company.
3. To re-elect Christopher Gilbert as a Director of the Company.
4. To re-elect Fiona Hadfield as a Director of the Company.
5. To re-elect Roy Harrison as a Director of the Company.
6. To re-elect Colin Terry as a Director of the Company.
7. To reappoint PKF LLP as the Company’s auditors until the conclusion of the next Annual General Meeting.
8. To authorise the Directors to determine the remuneration of the auditors.
9. THAT the Directors of the Company be generally and unconditionally authorised in accordance with section
551 of the Companies Act 2006 (“the Act”) to exercise all the powers of the Company to allot shares in the
Company or to grant rights to subscribe for or convert any security into shares in the Company (“Rights”) up
to an aggregate nominal amount of £1,250,278 and such authority shall, unless previously revoked or varied
by Company in general meeting, expire at the conclusion of the next Annual General Meeting of the Company
to be held in 2022, save that the Company may, at any time before such expiry, make an offer or agreement
which would or might require shares to be allotted or rights to be granted under such offer or agreement as
if the authority conferred had not expired.
Special Resolution
10. THAT, subject to and conditional upon the passing of resolution 5 above, the Directors of the Company be
empowered under Section 570 of the Companies Act 2006 (“the Act”) to allot equity securities (within the
meaning of Section 560 of the Act) for cash and/or to sell or transfer shares held by the Company in treasury
(as the Directors shall deem appropriate) under the authority conferred by resolution 5 above as if section
561(1) of the Act did not apply to any such allotment provided that this power shall be limited to:
a. the allotment of equity securities in connection with any rights issue or other pro-rata offer in favour
of the holders of ordinary shares of 1p each in the Company where the equity securities respectively
attributable to the interests of all such holders of shares are proportionate (as nearly as may be
practicable) to the respective number of shares held by them in the capital of the Company, provided
that the Directors of the Company may make such arrangements in respect of overseas holders of
shares and/or to deal with fractional entitlements as they consider necessary or convenient; and
b. the allotment (otherwise than pursuant to sub-paragraph (a) above) of further equity securities and/or
the sale or transfer of shares held by the Company in treasury (as the Directors shall deem
appropriate) up to an aggregate nominal amount of £378,878.
and this authority shall expire at the conclusion of the Company’s Annual General Meeting to be held in 2022,
save that the Company may, at any time before such expiry, make an offer or agreement which would or
might require equity securities to be allotted after such expiry and the Directors of the Company may allot
equity securities under such offers or agreements as if the power conferred by this resolution had not expired
and provided further that this authority shall be in substitution for, and to the exclusion of, any existing
authority conferred on the Directors.
By order of the Board
Ben Harber
Company Secretary
4 June 2021
Registered office: 160 Camden High Street, London, NW1 0NE
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Notes
1. Right to attend, speak and vote
Our preference had been to welcome shareholders in person to our 2021 Annual General Meeting, particularly given
the constraints we faced in 2020 due to the COVID-19 pandemic. However, at present, due to the current UK
Government restrictions on public gatherings we are asking shareholders not to attend the venue in person and
instead to participate in the meeting by submitting their proxy form. We are proposing to hold the Annual General
Meeting at 160 Camden High Street, London NW1 0NE with the minimum attendance required to form a quorum.
Shareholders that do attempt to attend the venue for the Annual General Meeting will not be permitted entry.
Shareholders should email any questions they have,or would normally raise during the course of the AGM to
info@foxmarble.net. Shareholders are requested to submit any questions that they may have, in good time, ahead
of the meeting. In the event that the arrangements for the AGM have to change due to the evolving COVID-19
situation, the Company will issue a further communication via the regulatory news service.
Please complete and submit an online form in accordance with the instructions set out in the instructions printed on
it. All proxies should be received by no later than 2.00pm on Monday 28th June 2021.
2. Appointment of proxies
If you are a member of the Company you may appoint one or more proxies to exercise all or any of your rights to
attend, speak and vote at the meeting on your behalf. You may only appoint a proxy using the procedures set out
in these notes and in the notes on the proxy form, which you should have received with this notice of meeting.
A proxy need not be a member of the Company but must attend the meeting to represent you. Details of how to
appoint the Chairman of the meeting or another person as your proxy using the proxy form are set out in the notes
on the form. If you wish for your proxy to speak on your behalf at the meeting you will need to appoint your own
choice of proxy (not the Chairman) and give your instructions directly to them.
You may appoint more than one proxy in relation to the AGM provided that each proxy is appointed to exercise the
rights attached to a different share or shares which you hold. If you wish to appoint more than one proxy you may
photocopy the proxy form or alternatively you may contact the Company Secretary, Ben Harber, 60 Gracechurch
Street, London EC3V 0HR.
3. Appointment of proxy using hard copy proxy form
The notes to the proxy form explain how to direct your proxy, how to vote on each resolution or withhold their vote.
A vote withheld is not a vote in law, which means that the vote will not be counted in the calculation of votes for or
against the resolution. If you do not indicate on the proxy form how your proxy should vote, they will vote or abstain
from voting at their discretion. They will also vote (or abstain from voting) as they think fit in relation to any other
matter which is put before the meeting.
To appoint a proxy using the proxy form, the form must be completed, signed and received by the Company
Secretary no later than 48 hours (excluding non-working days) before the meeting. Any proxy forms (including any
amended proxy forms) received after the deadline will be disregarded.
The completed form may be returned by any of the following methods:
•
•
Sending or delivering it to Ben Harber or Thomas Verlander at 60 Gracechurch Street, London EC3V 0HR
Scanning it and sending it by email to thomas.verlander@shma.co.uk
If the shareholder is a company, the proxy form must be executed under its common seal or signed on its behalf by
an officer or attorney. Any power of attorney or any other authority under which the proxy form is signed (or a duly
certified copy of such power or authority) must be included with the proxy form.
4. Appointment of proxy by joint members
In the case of joint holders, where more than one joint holder purports to appoint a proxy, only the appointment
submitted by the most senior holder will be accepted. Seniority is determined by the order in which the names of
the joint holders appear in the Company's register of members in respect of the joint holding (the first-named being
the most senior).
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5. Changing your instructions
To change your proxy instructions simply submit a new proxy form using the methods set out above. The amended
instructions must be received by the Company Secretary by the same cut-off time noted above. Where you have
appointed a proxy using a hard copy proxy form and would like to change the instructions using another hard copy
proxy form, please contact the Company Secretary on telephone number +44 (0) 207 264 4366. If you submit
more than one valid proxy form, the one received last before the latest time for the receipt of proxies will take
precedence.
6. Termination of proxy appointments
In order to revoke a proxy instruction, you will need to inform the Company by sending a signed hard copy notice
clearly stating your intention to revoke your proxy appointment to Ben Harber 60 Gracechurch Street, London EC3V
0HR. Alternatively, you may send the notice by email to thomas.verlander@shma.co.uk
In the case of a member which is a company, the revocation notice must be executed under its common seal or
signed on its behalf by an officer or attorney. Any power of attorney or any other authority under which the
revocation notice is signed (or a duly certified copy of such power or authority) must be included with the revocation
notice.
In either case, your revocation notice must be received by the Company Secretary no later than 48 hours (excluding
non-working days) before the meeting. If your revocation is received after the deadline, your proxy appointment
will remain valid. However, the appointment of a proxy does not prevent you from attending the meeting and voting
in person. If you have appointed a proxy and attend the meeting in person, your proxy appointment will
automatically be terminated.
7. Communications with the Company
Except as provided above, members who have general queries about the meeting should telephone the Company
Secretary on +44 (0) 207 264 4366 (no other methods of communication will be accepted). You may not use any
electronic address provided either in this notice of general meeting; or any related documents (including the
Chairman's letter and proxy form), to communicate with the Company for any purposes other than those expressly
stated.
8. Issued shares and total voting rights
As at 5.00pm, on the day immediately prior to the date of posting of this notice of meeting, the Company's issued
share capital comprised of 378,872,214 ordinary shares of 1p each. Each ordinary share carries the right to one vote
and therefore, the total number of voting rights in the Company at that time was 378,872,214.
Explanation of Resolutions
The Company’s Annual General Meeting will be held at 30 June 2021 at 2.00pm. The Notice of Meeting is set out on
page 75 of this document. Details of resolutions to be considered at the meeting are given below.
Resolutions 1 to 9 inclusive are proposed as ordinary resolutions, which means that for each of these resolutions to
be passed, more than half (50%) of the votes cast must be in favour of the resolution.
Resolution 10 is proposed as a special resolution, which means that for each this resolution to be passed, at least
three-quarters (75%) of the votes cast must be in favour of the resolution.
Annual report and accounts (resolution 1)
Shareholders will be asked to receive and adopt the audited financial statements of the Company for year ended 31
December 2020 and the Directors’ Report and Auditors’ Report on those accounts, which have been posted to
shareholders with this Notice.
Director’s re-election (resolution 2-6)
The Directors in accordance with article 80 of the Articles of Association of the Company and, being eligible, offer
themselves for re-election as a Directors of the Company. The biographical details of all of the Directors can be found
on pages 17 and 18 of the annual report.
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Auditors appointment (resolution 7)
The Company is required at each general meeting at which accounts are presented to appoint auditors to hold office
until the next such meeting. The Board, on the recommendation of the Audit Committee recommends the re-
appointment of PricewaterhouseCoopers LLP who have expressed their willingness to continue in office as auditor
and a resolution to re-appoint them has been proposed at the Annual General Meeting.
Auditor fees (resolution 8)
Resolution 8 authorises the Directors to determine the remuneration of the auditors.
Authority to allot shares and Disapplication of Pre-emption Rights (resolutions 9 and 10)
The purpose of these resolutions is to give the Directors authority to allot shares in place of the existing authority
approved at the Annual General Meeting of the Company held on 30 June 2020, which expires at the end of the
2021 Annual General Meeting.
In accordance with best practice and institutional investor guidelines, the Directors are seeking authority under
resolution 4 to allot up to a maximum of 125,027,830.62 Ordinary shares. This represents approximately 33% of
the issued ordinary share capital as at 7 May 2021. Further, in order to retain some flexibility, the Directors are
seeking power under resolution 5 to allot 37,887,221.40 equity securities wholly for cash other than on a pre-
emptive basis to current shareholders pro-rata to their existing holdings. This amount represents 10% of the issued
ordinary share capital as at 7 May 2021. Unless previously revoked, these authorities will be valid until the conclusion
of the next Annual General Meeting of the company to be held in 2022 or 30 June 2022, whichever is the earlier.
It is intended to renew each of the above authorities at each Annual General Meeting.
Fox Marble Holdings Plc Annual Report
& Financial Statements
2020
sterling 174966
Fox Marble Holdings Plc
160 Camden High Street,
London, NW1 0NE
Tel: +44 (0) 207 380 0999
www.foxmarble.net