Corporate Governance

Details of Directors

Role(s)

Max Vermorken

 

Chief Executive Officer (“CEO”)

David Barrett

Executive Director (“Chairman”)

Chairman of the Board

Member of the Remuneration Committee

 

Garth Palmer

 

Finance Director (“CFO”)

 

Dominic Traynor

Non-Executive Director

Chairman of the AIM and MAR Compliance Committee, and the Remuneration Committee

Member of the Audit Committee

 

Patrick Dolberg

Non-Executive Director (“Senior Independent Director”)

Chairman of the Audit Committee

Member of the AIM and MAR Compliance Committee

 

Gary Drinkwater

Non-Executive Director

Chairman of the Audit Committee

 

Details of other members

Role(s)

Garth Palmer of Heytesbury Corporate LLP

Company Secretary

 

Ian Osburn

Head of Investor Relations & Deputy Finance Director

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 

 

From 28th September 2018 as part of a change to rule 26 of the AIM Rules, 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 will need 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 recent changes to the 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.

 

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

 

Strategy & purpose

The principal activity of the Company is to make investments and acquire businesses in the construction materials sector. The principal activity of the Group is the production of high-quality aggregates and supply of value-added construction materials.

The Group’s aim is to create value for shareholders through the successful execution of its buy and build strategy in the construction materials sector.

 

Business model

The Group’s business plan is to acquire high quality and well managed assets in the construction materials sector, providing the Group with a strong operating platform, diversified income streams and stable cash flows in order to grow the Group and execute on its strategy further.

The Group shall be run as a commercially-minded business, seeking to return an increase on investment capital to Shareholders. Proven methods of raising capital through recognised means available to publicly-listed companies will be relied on to fund growth acquisitions. Following each acquisition, the Group seeks to implement operational efficiencies that improve safety, enhance productivity, increase profitability and ultimately create value for Shareholders.

The Board maintains a risk register which identifies key risks & challenges faced by the Group and identifies mitigating actions & controls implemented by the Group to address each risk. In addition, the Company’s Annual Report and Accounts discloses principal risks and uncertainties affecting the Group.

 

The Board implements the Group’s stated 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

 

Shareholder dialogue

The Company remains committed to listening and communicating openly with its Shareholders to ensure that its strategy, business model and performance are clearly understood. Understanding what analysts and investors think about the Company, and in turn, helping these audiences understand the Company’s business, is a key part of driving the business forward and the Company actively seeks dialogue with the market. The Company will do so via investor roadshows, attending investor conferences, hosting capital markets days and through regular reporting. The Company announces significant developments which are disseminated via various outlets including, before anywhere else, the London Stock Exchange’s Regulatory News Service (RNS).

 

Private Shareholders

The AGM is the main forum for dialogue between retail Shareholders and the Board. The Notice of Meeting is sent to Shareholders at least 21 days before the meeting. The chairs of the Board and all committees, together with all other Directors, routinely attend the AGM and are available to answer questions raised by Shareholders. The results of the AGM are subsequently published via RNS and on the Company’s corporate website. Private Shareholder events are intended to be held periodically by the Head of Investor Relations.

 

Institutional Shareholders

The Board actively seeks to build relationships with institutional Shareholders. Shareholder relations are managed primarily by the head of Investor Relations and the CEO, as appropriate. In addition, the CEO frequently visits institutional Shareholders based in London in order to listen to their feedback and have a direct conversation on any areas of concern.

The CEO and Head of Investor Relations make presentations to institutional Shareholders and analysts each year immediately following the release of the annual and interim results.

 

The Board as a whole is kept informed of the views and concerns of major shareholders by briefings from the CEO. Any significant investment reports from analysts are also circulated to the Board. The Non-Executive Chairman and Senior Independent Director are available to meet with major shareholders if required to discuss issues of importance to them.

 

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

 

Engagement

Engaging with stakeholders strengthens relationships and helps make better business decisions to deliver on commitments. The Board is regularly updated on wider stakeholder engagement feedback to stay abreast of stakeholder insights into the issues that matter most to them and the Group’s business, and to enable the Board to understand and consider these issues in decision-making. Aside from Shareholders, suppliers and customers, employees are one of the most important stakeholder groups and the Board therefore closely monitors and reviews the results of the Group’s employee engagement surveys as well as any other feedback it receives to ensure alignment of interests.

 

Employees

The Group has established a safe and healthy work environment, which complies with the relevant occupational health & safety laws. The Group ensures that the workforce is provided with sufficient training to develop the appropriate skills and knowledge to complete the tasks requested of them.

 

Contractors & suppliers

For the sake of occupational health & safety, all contractors and sub-contractors are treated in exactly the same manner as employees.

Independent contractors are required to provide their own PPE (personal protective equipment) whilst working on any Group sites. Independent contractors are also required to hold their own public liability and employer liability insurance.

All contractors are subject to site induction training on their first visit to any of the sites operated by the Group.

 

Communities

A selection of community projects we undertake and have supported across group in recent years:

 

UK:

 

  1. Sponsored Colchester Golf Club’s Pro-am tournament.
  2. Poundfield annual charity golf day.
  3. Sponsored a green at the Needham Market Football Club charity golf day to raise funds for St Elizabeth Hospice.
  4. Donation to Barham Athletic Under-10’s including purchasing their brand-new kits.
  5. Supplied goal nets to Barham Athletic Football Club Under 9’s.

 

Jersey:

 

  1. Supply Discovery concrete to the Children’s Playground.
  2. Supporting a rare bird release programme at the St John Quarry site with the re-introduction of the Choughs into the wild, including the installation of nesting boxes. This work is undertaken in co-ordination with the Durrell Wildlife Conservation Trust.
  3. Supply 20mm Aggregate, Blocks and Cement to assist with the States of Jersey Back to Work scheme, which supports people in the construction industry wishing to return to work.
  4. Supply Armour Stone for the National Trust for Jersey.
  5. Supply and lay asphalt to surrounding area for the St John’s Recreation Centre.
  6. Supply Slabcrete to enlarge firing points to accommodate shooters, a shipping container for equipment storage and some Gabion Stone for the Cycling event at the NatWest Island Games.
  7. Loan of Ronez Megablocks to support and build the stage for the Liberation Day Celebrations.
  8. Supply Ronez Block Paving to assist a young disabled person to have access to his garden.
  9. Supply 20mm Aggregate for communal areas for Maison des Landes, St Ouen.
  10. Race for Life - Supply Sand for a Cancer Research event.
  11. Supply of Road Planings for the Scout Association.
  12. Host tours and visits for 250+ children and their teachers as well as numerous customers, architects and engineers who would like to visit the site.
  13. Various Quarry Tours offered as raffle prizes.

Guernsey:

 

  1. Les Vardes Quarry Walk: created by Ronez and winner of the Insurance Corporation Channel Islands conservation award. The trail winds its way around the perimeter of the Les Vardes quarry, offering views of the surrounding landscape and into the interior of the quarry itself. The walk is maintained by Ronez, open to the public and free to use.
  2. Bathing Pools.
  3. Vale Pond.
  4. Centenary Memorial for the Royal Guernsey Light Infantry.
  5. Playground at Sausmarez Park.
  6. Senior Citizens Christmas Lunch at the Rotary Club of Alderney.
  7. Assist with building a disabled access ramp for the Sailing Trust.
  8. Sarah Groves Foundation.
  9. Les Cotils - Chelsea Garden.

 

Modern slavery

As part of our Company mission to “do the right thing” we oppose modern slavery in all its forms and will try to prevent it by any means that we can. We expect anyone who has any suspicions of modern slavery in our business or our supply chain to raise their concerns without delay.

 

Risk register

To assist the Board with effectively managing risk across the Group the Company has established a risk register which is reviewed periodically. In addition, the Company’s Annual Report and Accounts discloses principal risks and uncertainties affecting the Group.

 

Internal control

The Company has an established framework of internal control, the effectiveness of which is regularly reviewed by executive management, the Audit Committee and the Board in light of an ongoing assessment of significant risks facing the Company and the Group.

The Board recognises that maintaining sound controls and discipline is critical to managing the downside risks to its business plan.

The Board is responsible for reviewing and approving overall Company strategy, approving profit & loss and capital budgets & plans, and for determining the financial structure of the Company including treasury, tax and dividend policy. Relevant information is circulated to the Directors in advance of meetings. Monthly results and variances from plans and forecasts are reported to the Board.

The Audit Committee assists the Board in discharging its duties regarding the financial statements, accounting policies and the maintenance of proper internal business, and operational and financial controls.

The Board has ultimate responsibility for the Group’s system of internal control and for reviewing its effectiveness. However, any such system of internal control can provide only reasonable, but not absolute, assurance against material misstatement or loss. The Board considers that the internal controls in place are appropriate for the size, complexity and risk profile of the Group. The principal elements of the Group’s internal control system include:

 

  • Close management of day-to-day activities of the Group by the executive directors

  • An organisational structure with defined levels of responsibility, which promotes efficient and commercial decision-making while minimising risks

  • Annual budgeting process which is approved and periodically reviewed by the Board

  • Detailed monthly reporting of performance against budget

  • Central control over key areas such as capital expenditure and banking facilities

 

There are comprehensive procedures for budgeting and planning, for monitoring and reporting to the Board business performance against those budgets and plans, and for forecasting expected performance over the remainder of the financial period. These cover financial performance, cash flows, capital expenditure and balance sheets. Monthly results are reported against budget and compared with the prior year, and forecasts for the current financial year are regularly revised in light of actual performance.

 

 

Board composition

The Board comprises the Executive Chairman, two Executive Directors and three Non-Executive Directors. The Board considers, after careful review, that the Non-Executive Directors bring an independent judgement to bear.

The biographies of the board members can be found on the Company’s website below:

 

     www.sigmaroc.com

 

The Board is satisfied that it has a suitable balance between independence and knowledge of the Group and its operations to discharge its duties and responsibilities effectively. The Board receives periodic updates from the management team through minutes of executive meetings.  All directors are encouraged to use their independent judgement and to challenge all matters, whether strategic, operational or financial.

All directors are expected to devote the necessary time commitments required by their position and are expected to attend at least four Board meetings each year. The Board meets at least 4 times per annum however, the Board meets more frequently than this on an ad hoc basis. The Audit Committee is scheduled to meet at least 2 times a year but may meet more frequently regarding the Company’s audit or on risk management issues. The Remuneration Committee is scheduled to meet at least once a year. The Company will report annually on the number of Board and committee meetings held during the year and the attendance record of individual Directors. This information is disclosed in the Company’s Annual Report and Accounts. Formal agendas, papers and reports are sent to the directors in a timely manner, prior to the Board meetings.

Membership of the Board, its activities, performance and composition are subject to periodic review.

 

Conflicts of interest

The Company has effective procedures in place to monitor and deal with conflicts of interest. The Board is aware of the other commitments and interests of its Directors, and changes to these commitments and interests are reported to, and, where appropriate, agreed with the rest of the Board.

 

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

 

Suitability

The Board guides and monitors the business and affairs of the Company on behalf of the Shareholders by whom they are elected and to whom they are accountable.

The Board is satisfied that given its size and stage of development, between the Directors, it has an effective and appropriate balance of skills and experience across technical, commercial and financial disciplines.

The Company complies with the QCA Code and] full biographical details of the Directors and their skills and experience can be found at:

 

        www.sigmaroc.com

 

Appointment, removal & re-election

The Board makes decisions regarding the appointment and removal of Directors, and there is a formal, rigorous and transparent procedure for appointments.

There is no separate nomination committee. The Board considers that the current size and level of activities of the Company are not of a sufficient level to justify having a nomination committee. However, this will be kept under regular review.

The Company’s articles of association require that each Director must stand for re-election by Shareholders once every three years and that any new Directors appointed during the year must stand for election at the AGM immediately following their appointment.

 

Independent advice

All Directors are able to take independent professional advice in the furtherance of their duties, if necessary, at the Company’s expense. In addition, the Directors have direct access to the advice and services of the Company Secretary and CFO.

 

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

 

Appraisal

The Chairman assesses the individual contributions of each member of the Board to ensure that:

 

  • their contribution is relevant and effective;

  • they are committed; and

  • where relevant, they have maintained their independence.

Over the next 12 months the Board will review its performance as a unit to ensure members of the Board collectively function in an efficient and productive manner

The evaluation of the Board shall then be carried out annually and on a three-yearly cycle the evaluations may be facilitated by an independent evaluator. The internal reviews will generally include a questionnaire completed by each Board member. The Chairman will typically take leadership of this process and allow for feedback from other Board members about their performance. The Chairman will collate feedback in a report and facilitate discussion on its contents.

The Board review will entail, inter alia:

 

  • Board’s mission and goals;

  • Board composition and effectiveness;

  • Performance against strategic plan;

  • Board’s protocols and processes;

  • Adherence to the code of conduct;

  • Relationships with stakeholders; and

  • Continuous professional learning of Board members.

 

The Remuneration Committee will compare the performance of the Board with the requirements of its charter, the Company vision and KPI’s.

Succession planning is considered by the Board as a whole. The Board will annually review and make recommendations relating to talent management and succession planning for the Board and the CEO.

 

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

 

Code of conduct

It is the Board’s view that the Company’s corporate culture is consistent with its objectives, strategy and business model. A large part of the Company’s activities is centred upon what needs to be an open and respectful dialogue with employees, customers 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 has adopted a code of conduct which provides a framework for ethical decision-making and actions across the Group. The code of conduct reiterates the Group’s commitment to integrity and fair dealing in its business affairs and its duty of care to all employees, contractors and stakeholders.

Each Board members adherence to the Group’s code of conduct is assessed as part of the annual Board review & appraisal.

 

Anti-corruption and bribery

The Board has adopted an anti-corruption and bribery policy to further ensure honest and ethical conduct of employees. The Company has a zero-tolerance approach to bribery and corruption.

The Company Secretary is responsible for monitoring compliance with and maintaining the anti-corruption and bribery policy.

The Company also provides periodic training to employees to ensure they are away of their responsibilities in relation to bribery and corruption.

 

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

 

Board programme

The Board is responsible for approving the Company strategy and policies, for safeguarding the assets of the Company, and is the ultimate decision-making body of the Company in all matters except those that are reserved for specific shareholder approval.

The Board sets direction for the Company through a formal schedule of matters reserved for its decision.

The Board meets at least four times each year in accordance with its scheduled meeting calendar and maintains regular dialogue between Board members, in particular between the CEO, the Chairman and the non-executive Board members.

Prior to the start of each financial year, a schedule of dates for that year’s Board meetings is compiled. This may be supplemented by additional meetings as and when required.

The Board and its Committees receive appropriate and timely information prior to each meeting, with a formal agenda being produced for each meeting, and Board and Committee papers distributed several days before meetings take place.

Any Director may challenge Company proposals and decisions are taken democratically after discussion. Any Director who feels that any concern remains unresolved after discussion may ask for that concern to be noted in the minutes of the meeting, which are then circulated to all Directors. Any specific actions arising from such meetings are agreed by the Board or relevant Committee and then followed up by the Company’s executive management team.

 

Roles & responsibilities

There is a clear division of responsibility at the head of the Company.

The Chairman is responsible for:

  •  running the business of the Board;

  • setting the agenda for Board meetings;

  • ensuring appropriate strategic focus and direction;

  • facilitating effective contribution from all Directors; and

  • promoting constructive and respectful relations between the Board and management.

 

The CEO is responsible for:

 

  • proposing the strategic focus to the Board;

  • implementing strategy once it has been approved by the Board;

  • overseeing the management of the Company through the executive management team; and

  • where proposed transactions, commitments or arrangements exceed the thresholds set by the Board to refer the matter to the Board for its consideration, review and approval.

 

The Board is supported by the Audit, Remuneration and AIM Compliance committees. Each committee has access to such resources, information and advice as it deems necessary, at the cost of the Company, to enable the committee to discharge its duties.

As the Group grows and develops the Board will periodically review its corporate governance framework to ensure it remains appropriate for the size, complexity and risk profile of the Group.

 

Audit Committee

The Audit Committee has the primary responsibility of monitoring the quality of internal controls and ensuring that the financial performance of the Group is properly measured and reported on. The Audit Committee receives and reviews reports from the Group’s management and external auditors relating to the interim and annual accounts and the accounting and internal control systems in use throughout the Group. The Audit Committee will meet not less than twice in each financial year and will have unrestricted access to the Group’s external auditors.

 

Remuneration Committee

The Remuneration Committee reviews the performance of the executive directors and makes recommendations to the Board on matters relating to their remuneration and terms of service. The Remuneration Committee also makes recommendations to the Board on proposals for the granting of share options and other equity incentives pursuant to any employee share option scheme or equity incentive plans in operation from time to time. The Remuneration Committee will meet as and when necessary. In exercising this role, the members of the Remuneration Committee shall have regard to the recommendations put forward in the QCA Code and, where appropriate, the UK Corporate Governance Code guidelines

 

AIM Rules & MAR Compliance Committee

The AIM Rules & MAR Compliance committee is responsible for coordinating and monitoring the Company’s regulatory responsibilities including liaising with the Nomad and AIM as necessary. Additionally, the AIM Rules & MAR Compliance committee reviews the Company’s MAR insider register. The purpose of the AIM Rules & MAR Compliance committee is to designate responsibility of ensuring best practice and application of the defined corporate governance procedures.

 

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

 

Communication

The Board attaches great importance to providing shareholders with clear and transparent information on the Company's activities, strategy and financial position.

The Company communicates with shareholders through the Annual Report and Accounts, full-year and half-year announcements, the Annual General Meeting (‘AGM’) and one-to-one meetings with large existing or potential new shareholders.

The Company announces significant developments which are disseminated via various outlets including, before anywhere else, RNS.

The Head of Investor Relations was appointed in April 2018 and remains a key part of encouraging shareholder interaction and listening to feedback. A range of corporate information (including all Company announcements and presentations, as well as results of AGM) is also available to shareholders, investors and the public on the Company’s corporate website, www.sigmaroc.com

The Board receives regular updates on the views of shareholders through briefings and reports from the Head of Investor Relations, the CEO and the Company’s brokers. The Company communicates with institutional investors frequently through briefings with management. In addition, analysts’ notes and brokers’ briefings are reviewed to achieve a wide understanding of investors’ views.

 

Executive Chairman

The Board has considered the fact that the Chairman is an executive and therefore does not comply with the QCA Code whereby the chair of the Board must have adequate separation from the day-to-day business to be able to make independent decisions. The Chairman has extensive relevant industry experience and the Board has concluded that the Chairman offers more value to the Group as an executive officer of the Company. Furthermore, the Board is satisfied that it has sufficient independent oversight provided by its three non-executive directors, in particular the Senior Independent Director.