Details of Directors Role(s)
David Barrett Executive Director (“Chairman”)

Chairman of the Board

Max Vermorken Chief Executive Officer (“CEO”)
Dean Masefield Finance Director (“FD”)
Simon Chisholm Independent Non executive Director
Chairman of the Audit Committee
Chairman of the AIM and MAR Compliance Committee
Chairman of the Remuneration Committee
Jacques Emsens Independent Non executive Director
Member of the Audit Committee
 

Garth Palmer

Non-Executive Director
Member of the AIM and MAR Compliance Committee
Member of the Remuneration Committee
Tim Hall Non-Executive Director

 

Details of other members Role(s)
Garth Palmer of Heytesbury Corporate LLP Company Secretary

 

Rubik Communications Investor Relations

In this policy page, unless the context requires otherwise, the following definitions shall apply:

AIM

AIM, a market operated by the London Stock Exchange plc

AIM Rules

the AIM Rules for Companies published by the London Stock Exchange from time to time

AGM

annual general meeting

Board

the Board of Directors of the Company

Company

SigmaRoc Plc

Directors

Directors of the Company

Group

the Company and its subsidiaries from time to time

QCA

Quoted Companies Alliance

QCA Code

Corporate Governance Code for Small and Mid-size Quoted Companies issued by the QCA

Shareholders

holders of ordinary shares in the capital of the Company from time to time

Introduction

The Company is required to maintain on its website details of a recognised corporate governance code, how the Company complies with this code and an explanation of any deviations from the code. The information  needs to be reviewed annually and the website should include the date on which the information was last reviewed. Going forward this will be reviewed at the same time as the Annual Report and Accounts are prepared. Our values are based on our virtuous circle of “doing the right thing” for our people, customers, suppliers and Shareholders. The Board believes this is vital to creating a sustainable, growing business and is a key responsibility of the Group.

It is the Board’s job to ensure that the Group is managed for the long-term benefit of all Shareholders, with effective and efficient decision-making. Corporate governance is an important part of that job, reducing risk and adding value to our business.

The Board has adopted the QCA Code in line with the London Stock Exchange’s AIM Rules requiring all AIM-listed companies to adopt and comply with a recognised corporate governance code. This policy document sets out in broad terms how the Company complies at this point in time. The Company will provide annual updates on its compliance with the code. This information was last reviewed in January 2020.

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 1: Establish a strategy and business model which promote long-term value for shareholders

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 production of high-quality aggregates and supply of value-added construction materials and the aim is to create value for shareholders through the successful execution of its ‘buy and build’ strategy in the construction materials sector.

The Board implements this strategy by focusing investment into high quality and well managed construction material assets, establishing a strict criteria for project evaluation and selection, utilising industry recognised methods of operation, developing a results-driven exploration approach, actively monitoring operational and financial performance measured against deliverable targets and budgets and considering alternative commercial options for projects which no longer meet the established criteria of the Group.

Principle 2: Seek to understand and meet shareholder needs and expectations

Understanding Shareholder Needs and Expectations

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. Investors also have access to current information on the Company though its regulatory announcements, website, www.sigmaroc.com, and via Rubik Communications Limited, the Company’s financial PR adviser, who are available to answer investor relations enquiries.

Principle 3: Take into account wider stakeholder and social responsibilities and their implications for long-term success

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, all employees of the Company participate in a structured Company-wide annual assessment process which is designed to ensure that there is an open and confidential dialogue with each person in the Company to help ensure successful two way communication with agreement on goals, targets and aspirations of the employee and the Company. These feedback processes help to ensure that the Company can respond to new issues and opportunities that arise to further the success of employees and the Company. The Company has close ongoing relationships with a broad range of its stakeholders and provides them with the opportunity to raise issues and provide feedback to the Company.

The Group has supported and given back to the community by participating in a selection of projects in recent years. Further details of the Group’s environmental, social and governance related initiatives are in the relevant annual reports.

Environmental Initiatives

Energy Efficiency:

  • We are quadrupling the energy generated from solar panels at our Belgian business CDH from 950MWh to around 3,800MWh representing around one third of the energy consumption of the site. We expect this third photovoltaic park to be up and running in 2020.
  • We are progressing through a programme to replace all sodium-based factory lights with LED lights which consume on average around 25% of the energy consumed by their sodium based equivalent
  • We are progressing through a programme to upgrade our delivery fleet to EURO-6 engines where possible and EURO 5 in the Channel Island as imposed by axle width restrictions.

Recycling:

  • We continue to pump over 2.5 million m3 per year of water from the quarry at Soignies, and treating the water for domestic use to serve the needs of around 30,000 households.
  • Through a partnership with UK start-up MacRebur, we have used over 40,000 plastic bottles as a replacement for bitumen in the construction of roads.
  • We continue to monitor, improve and optimise our use of recycled materials as a replacement for polluting compounds. This includes the use of granulated blast furnace slag as a cement replacer, the reduction of steel reinforcement bars in our precast products and the reduction of water use in our concrete and ready-mix products.
  • We have started to capture rainwater from the roofs of our factories to be utilised in our production process already capturing over 5,000 litres since the start of the initiative earlier this year in 2020.
  • We are making active use of returned materials and recycle on average 3,000 tonnes of aggregates at Poundfield Products alone into new production.

Wildlife:

  • Having won the 2018 Insurance Corporation Environmental award for Best Conservation Project, Ronez’s engagement with the Birds On The Edge programme, to re-introduce the Red Billed Chough to Jersey, continued to progress positively. The number of breeding birds in the quarry grew once again and the facilities provided by Ronez for monitoring the breeding pairs were improved further with better access for conservation staff and new nest boxes being installed.
  • We are part of the European initiative “Life in quarries” in Belgium promoting the reintroduction of wildlife near our quarrying operations
  • We have started a nesting and breeding programme near and at our precast production sites to stimulate birdlife following the success of the Ronez programme.

Social Initiatives

Local communities:

  • Through the “Convention PFI (Plan Formation-Insertion)” and the associated certification via the “CEFOMEPI (Centre de Formation aux Métiers de la Pierre)”, CDH has over the years trained over 100 young unskilled colleagues to give them the required certification to work in the ornamental stone sector. The programme is considered a success with a high retention rate of over 80%.
  • Across 2019, we have supported the Durrell Wildlife Trust initiative of creating, displaying and subsequently selling at auction life-sized gorilla sculptures, raising £1 million for the Trust and engaging a large part of the Channel Island community.
  • D. Harries sponsored and organised a series of fundraising and sponsoring events to support the local community including fundraising for Prostate Cymru, sponsoring the Narberth Rugby club, the Grassland Society, the Young Farmers  and the Royal Welsh Agricultural Show.
  • Since the founding of SigmaRoc we have actively engaged with universities in the UK and in the USA to interest young graduates, in particular female students, in the quarrying and construction materials sectors, which are typically dominated by men.

Governance Initiatives

  • QCA Corporate Governance Code
  • We adhere to the QCA Corporate Governance code and its ten key principles as detailed herein.

Board appointments:

  • In line with the QCA Code, during 2019 we reviewed our board composition to increase both its skill and its composition. Following the publication of FY19 Accounts, Jacques Emsens, an industrialist with a long successful career serving on boards of large quoted industrial groups and investment funds, was appointed to the Board.
  • In addition, following the publication of FY19 Accounts, the board welcomed Simon Chisholm to the Board, adding significant skill to the board in terms of knowledge of the investment community and their requirements. Simon qualified as a Chartered Accountant and took up the role of Chairman of the Audit Committee, Chairman of the AIM and MAR Compliance Committee, and Chairman of the Remuneration Committee thereby giving them the required skill.

General Counsel appointment:

  • We were extremely pleased to appoint Anthony Brockbank as our General Counsel on a part time basis effective from May 2020, which will greatly assist with our internal competencies in terms of corporate governance, compliance with applicable regulations and directives and general ability to handle legal matters internally. Anthony is a partner at city law firm, Fieldfisher.

Principle 4: Embed effective risk management, considering both opportunities and threats, throughout the organisation

Risk Management

In addition to its other roles and responsibilities, the Audit Committee is responsible to the Board for ensuring that procedures are in place and are being implemented effectively to identify, evaluate and manage the significant risks faced by the Company. The risk assessment matrix below sets out those risks and identifies the controls that are in place. This matrix is updated as changes arise in the nature of risks or the controls that are implemented to mitigate them. The Audit Committee reviews the risk matrix and the effectiveness of scenario testing on a regular basis. The following principal risks, and controls to mitigate them, have been identified:

Activity Risk Impact Control(s)
Operation Recruitment and retention of key staff
Depletion of mineral resources and inability to secure additional reserves
Reduction in operating capability
Operations are dependent on a quality source of aggregate
Stimulating and safe working environment, balancing salary with longer term incentive plans
Resource expansion plans developed at all sites.
Regulatory adherence Breach of rules Censure or withdrawal of authorisation Strong compliance regime instilled at all levels of the Company
Strategic Market downturn
Competition
Macroeconomic conditions adversely affecting Group’s prospects.
Expansion in the UK and Belgium affect Group’s risk
Contingency ‘disaster’ budgets and regular assessment of materials market.
Strong relationships with government and community and experienced senior management
Financial Misappropriation of Funds
IT Security
Fraudulent activity and loss of funds
Loss of critical financial data
Robust financial controls and split of duties.
Regular back up of data online and locally.

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. The Board works closely with and has regular ongoing dialogue with the Finance Director and has established appropriate reporting and control mechanisms to ensure the effectiveness of its control systems.

Principle 5: Maintain the board as a well-functioning, balanced team led by the chair

A Well-Functioning Board of Directors

The Board comprises of the CEO Max Vermorken, the Chairman David Barrett, the Finance Director Dean Masefield, two independent Non-executive Directors, Simon Chisholm and Jacques Emsens and two Non-Executive Directors, Garth Palmer and Tim Hall. Details of the current Directors are available HERE and set out within Principle Six. Executive and Non-Executive Directors are subject to re-election at intervals of no more than three years. The service contracts and letters of appointment (as applicable) of all Directors are available for inspection at the Company’s registered office during normal business hours.

The Board meets at least four times per annum. It has established an Audit Committee, Remuneration Committee and an AIM and MAR Compliance Committee, particulars of which appear hereafter. The Board has agreed that appointments to the Board are made by the Board as a whole and so has not created a Nominations Committee. The Non-Executive Directors are considered to be part time but are expected to provide as much time to the Company as is required.

The Company shall report annually on the number of Board and Committee meetings held during the year and the attendance record of individual Directors. Details of the directors’ attendance at the Board meetings as at December 2019 are set out below:

Director Formal quarterly meetings and meetings post change to Articles Offshore meetings to comply with Articles
Attended Eligible to attend Meetings attended Eligible to attend
Max Vermorken 6 6 4 4
David Barrett 6 6 6 6
Garth Palmer 6 6 1 1
Dominic Traynor 6 6 1 1
Patrick Dolberg 5 6 4 4
Tim Hall 3 4

 

In order to be efficient, the Directors meet formally and informally both in person and by telephone. To date there have been quarterly formal meetings of the Board held in person, plus additional ad-hoc meetings of the Board where appropriate, and the volume and frequency of such meetings is expected to continue at this rate.

At a general meeting of the Company held on 27 September 2019, Shareholders voted to approve amending the Articles removing the restriction on the Board from making any resolutions in the United Kingdom. The Board meet collectively prior to any matters being resolved, however in order to comply with the Articles prior to their amendment, two members of the Board were required to hold a meeting offshore to pass the resolutions. There were eight such meetings in 2019 in addition to the quarterly meetings which all Board members attended, plus two ad-hoc meetings.

In addition to Board meetings, the executive Directors attend monthly executive committee meetings with the ExCo members of the subsidiary operations.

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

Appropriate Skills and Experience of the Directors

The Board currently consists of seven Directors and, in addition, the Company has employed the outsourced services of Heytesbury Corporate LLP to act as the Company Secretary. The Company  appointed two new independent non-executive directors immediately following the release of the FY19 Accounts, following which it is satisfied that given its size and stage of development, between the Directors, it will have an effective and appropriate balance of skills and experience across technical, commercial and financial disciplines.

The Board shall review annually the appropriateness and opportunity for continuing professional development whether formal or informal. The respective roles of the Board members are as follows:

 

Max Vermorken

Chief Executive Officer and Executive Director

David Barrett 

Chairman and Executive Director

Dean Masefield

Finance Director and Executive Director

Simon Chisholm
Independent Non-Executive Director
Chairman of the Audit Committee; and Chairman of the AIM Rules and MAR Compliance Committee and Chairman of the Remuneration Committee

Jacques Emsens
Independent Non-Executive Director
Member of the Audit Committee

Garth Palmer
Non-Executive Director
Member of the AIM Rules and MAR Compliance Committee and member of the Remuneration Committee.

Tim Hall
Non-Executive Director

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

Evaluation of Board Performance

Internal evaluation of the Board, the Committees and individual Directors is to be undertaken on an annual basis in the form of peer appraisal and discussions to determine the effectiveness and performance of the various governance components, as well as the Directors’ continued independence.

The results and recommendations that come out of the appraisals for the Directors shall identify the key corporate and financial targets that are relevant to each Director and their personal targets in terms of career development and training. Progress against previous targets shall also be assessed where relevant.

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

Corporate Culture

The Board recognises that its 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 principles 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 are 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.

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

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 that 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.

Audit Committee

The Audit Committee comprises Simon Chisholm and Jacques Emsens, and Simon Chisholm chairs this committee. This Committee has primary responsibility for monitoring the quality of internal controls and ensuring that the financial performance of the Company is properly measured and reported. It receives reports from the executive management and auditors relating to the interim and annual accounts and the accounting and internal control systems in use throughout the Company. The Audit Committee shall meet not less than twice in each financial year and it has unrestricted access to the Company’s auditors.

Remuneration Committee
The Remuneration Committee comprises Simon Chisholm, Garth Palmer and David Barrett, and Simon Chisholm chairs this Committee. The Remuneration Committee reviews the performance of the executive Directors and employees and makes recommendations to the Board on matters relating to their remuneration and terms of employment. The Remuneration Committee will meet as and when necessary. The Remuneration Committee also considers and approves the granting of share options pursuant to the share option plan and the award of shares in lieu of bonuses pursuant to the Company’s Remuneration Policy.

AIM and MAR Compliance Committee

The AIM and MAR Compliance Committee comprises Simon Chisholm and Garth Palmer, and Simon Chisholm chairs this committee. The AIM and MAR Compliance Committee is responsible for the coordinating and monitoring the Company’s regulatory responsibilities including liaising with the Nomad and the London Stock Exchange as necessary. The purpose of the AIM and MAR Compliance Committee is to designate responsibility of ensuring best practice and application of the defined corporate governance procedures.

Nominations Committee

The Board has agreed that appointments to the Board will be made by the Board as a whole and so has not created a Nominations Committee.

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.

Principal 10: Communicate how the company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders

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.

Investors also have access to current information on the Company through its regulatory announcements, website, www.sigmaroc.com, and Rubik Communications Limited, the Company’s financial PR adviser, who are available to answer investor relations enquiries.

The Company shall include, when relevant, in its annual report, any matters of note arising from the Audit or Remuneration committees.