FOX.L Regulatory News (FOX)

Fox Marble Holdings plc

 ("Fox Marble", the "Company", or "Group")

Preliminary Results for the year ended 31 December 2014

Fox Marble Holdings plc is a marble company focused on the extraction and processing of dimensional stone from quarries in Kosovo and South East Europe. Established in 2011, Fox Marble has acquired the rights for 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 from Kosovo. 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 region is established as a major centre of marble production.

The Company is pleased to announce its preliminary results for the year ended 31 December 2014.

Operational Highlights

• Over 14,000 tonnes of marble extracted during 2014.

• Strategic relationships entered into with Marmi E Graniti D'Italia S.r.I ("MGI"), Banyan Stone Limited ("Banyan") and Zhong Shengdestone Co.,Ltd ("ZSC") during Q4 2014, complementing existing Pisani offtake and distribution agreement and Royalstone distribution agreement from 2013.

• Sales agency agreement with ZSC signed in December 2014 with minimum quantity of 10,000 tonnes per annum.

• December 2014 offtake agreement with Banyan provides for a minimum commitment of €1.5 million of block marble over the next 18 months. Prepayment of €250k received in February 2015.

• Acquisition of a sub-lease over a new Sivec quarry in Prilep completed in August 2014.

• Since the year end Fox Marble sold 900 sqm of polished slabs of Argento Grigio marble to St Georges Plc the luxury homes division of Berkeley Homes Plc.

• Product continues to be sold via the Company's office in Carrara and its distributors in London (Pisani) and New York (Royalstone). Confirmed or completed orders under the Pisani offtake agreement currently total over €250k.

• Factory building purchased and shipped to the Fox Marble site in Kosovo under budget during 2014. Construction of the factory building is almost complete and the company will shortly begin transportation and installation of the processing machinery.

• Order book as at 9 April 2015 of €2.8 million of which €2.0 million is expected to be realised in 2015.

Financial Summary

• Revenue for the year of €0.15 million (2013 - €0.05 million) with much of the initial 2014 order book pushed into H1 2015.

• Operating loss for the year of €2.12 million (2013: loss of €2.17 million), net loss of €2.33 million (2013: €2.57 million) due to costs incurred in bringing the quarries up to full production.

• Net cash position at 31 December 2014 of €4.70 million (2013: €5.26 million).

Chris Gilbert, CEO, commented: "In the coming year we hope to see key milestones fulfilled, including completion of the factory and increasing levels of production in Prilep and Malesheva. In addition and most significantly, we expect to see the Company winning significant orders for its product as our branding, marketing and sales focus continues to develop. We anticipate revenue climbing as more customers purchase our stone and this momentum will not only increase throughout the year but continue into 2016.

"Already we are seeing the results of our efforts in establishing our product in key marketplaces throughout the world and the benefit or having our marble actually installed in developments."

For further information please visit www.foxmarble.net.

Enquiries:

Chairman's statement

Dear Shareholder,

Whilst sales in 2014 have been below our expectations at the start of the year, your Company nevertheless has made further positive progress. Our quarries are now producing significant quantities of marble, we have added additional quarries to our portfolio and our factory at Lipjan is nearing completion. Importantly, we are beginning to see momentum build in generating sales revenues with an increasing order book and the signing of a number of key agreements from which we will start to realise value in the coming year.

Four quarries are now in operation at Cervenilla, Syrigane and Malesheva in Kosovo and Prilep in Macedonia. Over 14,000 tonnes of marble were extracted during 2014. The quality of marble from the Syrigane and Cervenilla quarries has been particularly encouraging and your Company has had notable success in the sale of Argento Grigio marble from Cervenilla into luxury developments in London.. Marble extraction in 2015 is planned to exceed 25,000 tonnes.

During the year we acquired the rights to a new Sivec quarry, Prilep Omega, next to our existing Sivec quarry. Sivec is a highly sought after marble and key for the development of Fox Marble's portfolio. We have also secured the rights to a further site close to our Malesheva quarry and a possible second source of Bianco Illirico marble. This brings the total to five quarries under licence and a further four under operating agreements.

The factory at Lipjan is nearing completion. This has been delayed by unexpected adverse weather. However, the frame and roof are now in place and more rapid progress is expected as the weather improves. The factory will open up a number of new sales channels and particularly the local market for cut and polished tiles. It will also reduce our reliance on our cutting and polishing operations in Carrara, Italy, with consequent cost benefits.

One of our key priorities for 2014 was sales and marketing. Sales for the year were €149,924, significantly below our expectations at the start of the year. This is largely due to the time it takes to build relationships and demonstrate that we can provide the consistent quality and quantities of marble our customers require. Encouragingly, as the year has progressed we have developed a growing number of relationships and have entered into a number of important agreements, including strategic offtake agreements with MGI and Banyan. We have also entered into a sales agency agreement with ZSC, which will provide access to the very large Chinese market. To date we have confirmed orders for 2015 of €2.0 million and expect further progress over the next few months.

The results for the year reflect ongoing costs incurred in developing our quarries, quarry operating expenses and overhead expenditure. Costs are being managed tightly, particularly in this period before we have established a large, stable and recurring level of sales. The loss for 2014 was €2.3million, marginally less than the 2013 loss of €2.6million. Net cash at the year-end was €4.7million of which €1.0 million is allocated for spend on the factory at Lipjan.

Your Board is responsible for ensuring that the Company operates to high standards of corporate governance, ethical standards and integrity. Your non-executive directors bring a wealth of relevant experience and provide constructive and supportive challenge to the executive directors. Overall I believe your Board is working well.

I would also like to thank all our employees who work so hard on our behalf for their ongoing support and loyalty.

I believe 2015 will be a very important year. Our ambition is to become the leading supplier of premium marble from Kosovo and south east Europe. Building our sales revenues, whilst closely controlling our costs and cash flow, are critical to the achievement of that ambition.

Andrew Allner

Non-Executive Chairman

13 April 2015

Strategic Report

Business Activities

The Group currently has five quarries under licence and operating agreements in place with a further four quarries. Four of Fox Marble's quarries are currently in operation at Cervenilla, Syrigane, Malesheva and Prilep.In total over 14,000 tonnes of marble have been extracted from these quarries in 2014.

Fox Marble has invested in further quarrying equipment in the year to ensure increased levels of production are met and the Company is able to fulfil demand. The Company has also procured two large chain saws to be deployed to the quarries to substantially increase production in 2015. The first of these was delivered in January 2015 to our Prilep quarry.

This site was the first of our quarries to be opened in November 2012. The quarry is being exploited across three separate locations (Cervenilla A, B & C) from which red, light and darker grey marble is being produced in significant quantities, with over 6,500 tonnes quarried in 2014. The quarry is producing large compact blocks which have been sold both as blocks and processed into polished slabs for sale.

In July 2013 the Company acquired the rights to the Malesheva quarry in Kosovo from a local company. The licence to the quarry is for 20 years with an irrevocable option to extend the period by a further 20 years thereafter. The Company will pay a royalty of 20% on net revenue generated from the sale of block marble to the previous licence holder of the quarry.

The quarry contains a mixture of cream and Bianco Illirico marble.

Based on queries from distributors, the Company has found that demand for Bianco Illirico marble is strong, particularly in North American markets, and the Company believes that this marble could become the largest volume seller of its mid-priced marble range.

This quarry is now open with operations expected to reach full levels of commercial production this year.

The quarry at Syrigane (formerly Suhogerll) is open across two benches. The site contains a variety of breccia and callacatta type marble and has been producing significant volumes of breccia marble in large compact blocks, with over 6,000 tonnes of marble quarried in 2014.

The Company entered into an agreement to operate a quarry in Prilep, Macedonia in 2013. The agreement is for a period of 20 years with an irrevocable option to extend the period for a further 20 years thereafter. The Prilep quarry contains the highly desirable white Sivec marble, currently available from only one other quarry in the world.. Sivec marble prices begin from €500 per metric tonne (unprocessed) representing the most expensive marble in the current Fox Marble portfolio.

This type of marble has been used in a number of prestigious projects, including the construction of the Sheik Zayed Grand Mosque in Abu Dhabi. The demand for Sivec exceeds current world supply, and once the quarry site reaches full levels of commercial production, we anticipate rapid sales of this stone.

The Prilep quarry is controlled by a local partner who has appointed Fox Marble to operate the quarry on its behalf. Fox Marble will receive 25% of the gross revenue from the sale of all block marble from this quarry, without having to fund the cost of equipping or investing in the reopening of the quarry. Fox Marble will be responsible for the costs associated with extracting the marble from the quarry.

This quarry is now open and producing, and operations are being ramped up to reach full levels of commercial production.

In August 2014 the Company entered into a sub-lease arrangement with New World Holdings (Malta) Limited to acquire rights to a second Sivec marble quarry - the Omega Sivec quarry at Prilep in Macedonia. This new quarry site is adjacent to the Company's existing operations in Prilep.

The consideration for the sub-lease was £1,000,000 and a subsequent 40 per cent. gross revenue royalty obligation. The sub-lease has an initial term of 20 years, which is extendable by the Company for a further 20 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. Fox Marble estimates that the quarry will require approximately £600,000 of capital expenditure investment to reach commercial production.

Exploitation of this quarry is in the planning stages with a drilling programme being implemented.

The Company also holds exploitation licences for quarries at Antena, Verrezat and Peja and an operating agreement over a quarry at Drini. These sites are not currently being quarried, pending their further development.

The Company has further identified a 300 hectare site close to the Company's existing licence resource in Malesheva that the Directors believe contains a large deposit of Bianco Illirico which may provide the Company with a second source of this sought after marble. In order to continue to benefit from the significant interest in Bianco Illirico marble the Company has reserved the rights to this area by submitting applications for an exploration licence to the ICMM. As an existing licence holder in good standing the Company believes there will be no impediment to the grant of this licence. The formal award of the licence is pending the appointment of the new ICMM board in Kosovo.

A double skinned steel factory for the cutting and processing of blocks into polished tiles and slabs has been purchased and is being erected on a 10 hectare site the company has acquired in Lipjan, close to Pristina airport.

The Company's factory has been under construction and, despite unexpected adverse weather conditions; the factory building is nearing completion and requires a further 5 days of work with uninterrupted good weather in Pristina at which time equipment will start to be shipped from Italy for installation in the building. The floor has been laid and work has commenced on completing the foundations for the gang saws and water channels.

This long-awaited factory will open up a number of important new sales channels for the Company and provide a further boost to the economics, given the high margin derived from the cutting and polishing industry for marble.

Sales and marketing have been the primary focus for the Company over the last twelve months. Sales for 2014 were lower than originally estimated as it has taken longer than anticipated to crystallise a number of potential transactions and offtakes. However, Q4 of 2014 saw significant progress with Fox Marble entering into a number of material contracts. In part this has been a result of Fox Marble now being able to provide a broad and varied inventory of good quality block and processed marble for potential customers to review.

In October 2014 the Company announced that it has entered into a long-term offtake agreement with Marmi E Graniti D'Italia S.r.l. (MGI) headquartered in Carrara, Italy.

MGI was founded in in 1948 and is one of the largest and most distinguished marble companies in Italy with sales that span the globe with a particular focus on the North American market. MGI has entered into this Agreement under which it will extend its range of stone by taking a minimum quantity of 100 tonnes per month of Fox Marble's grey, red and breccia stones for the next two years starting in October 2014.

In December 2014 the Company entered into a long term offtake agreement with Banyan Stone Limited headquartered in Gibraltar. Banyan has agreed to purchase €1.5m worth of block marble from Fox Marble in three tranches over the next eighteen months with €500,000 worth of stone being purchased every six months. Under the terms of the agreement Banyan made a prepayment on the first instalment of €250,000 to Fox Marble in February 2015.

Banyan's market is largely focused on the Far East with particular reference to Singapore and the surrounding region.

Further in December 2014 the Company signed a sales agency agreement with Zhong Shengdestone Co.,Ltd. a procurement company for Hong Xing Stone Group (Beijing). The Beijing branch alone of Hong Xing Stone Group annually processes 1.5 million square metres of stone for sale to the Chinese and international market. This agency agreement specifies a minimum quantity of 10,000 tonnes per annum and the Company hopes that this agreement will help secure access to the large Chinese market.

Early in 2015 the Company announced that it had supplied 900 sqm of polished slabs of its grey Argento Grigio marble to St George Plc, which is the prestige home division of Berkeley Homes Plc.

Since completing the above order, the Company has received additional orders via Pisani, and its offtake agreement with the Company, from the St Georges plc for two different types of marble (white and grey) to be supplied to its Chelsea Creek development throughout the rest of 2015. This order has a total value of €570,000 for cut and polished slabs.

The order with Berkeley Homes Plc is a testament to the quality of our marble, and in particular the attractiveness of our grey Argento Grigio stone. We look forward to developing a long term relationship with this prestigious house builder.

The Company has distributed samples and marketing materials across over 20 countries across the middle east, Europe and Asia.

Results and Dividends

The Group recorded revenues in the year of €149,924 (2013 - €46,208). The Group incurred an operating loss of €2,116,259 for the year ended 31 December 2014 (2013 - €2,168,244). The decrease in operating loss reflects the increased efficiency of our quarrying operations and the progression of the company into its operational phase.

The Group incurred a loss after tax for the year ended 31 December 2014 of €2,325,489 (2013 - €2,569,338).

The Company does not anticipate payment of dividends until operations become significantly cash generative. The Directors intend to adopt a progressive dividend policy when it becomes commercially prudent to do so.

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, is critical to maintaining the Group's competitiveness and capacity to grow.

Risk

We are always trying to identify and address areas of future risk. As the operations have been rolled out, the Company has sought to impose a rigorous health and safety culture across the Group, ensuring buy-in to this by all staff. This was reflected in the commitment of senior management time and effort. Effective training in safety consciousness will be a continuing policy.

An ethics policy was also put in place and communicated throughout the Group. Ensuring systems to maintain compliance and make third party contractors aware of and committed to our policy is a requirement under the Bribery Act and we will therefore take further measures to communicate and monitor compliance with our policies beyond the Group.

The Company regularly reviews the risks and uncertainties facing the business through a regular series of board and operational meetings. 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 all of the hazards and risks associated with natural resource companies. These risks and uncertainties include, but are not limited to, environmental hazards, industrial accidents, labour disputes, geological problems, unanticipated changes in rock formation characteristics, encountering unanticipated ground or water conditions, land slips, flooding, levels of wastage, periodic interruptions due to 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 properties, 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 aspects of communication on safety. Other operational risks are mitigated through the use of trained personnel, detailed monitoring of operations on a technical and geological basis to ensure that issues are identified and addressed promptly.

Quarry development risk

Certain 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. In the event that the marble mined is of a lower quality than expected, then demand for, and 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 sufficient potential in terms of inferred and indicated resources.

Factory development risk

The Group's planned processing factory is currently under construction. Completion and commissioning of the factory and its operations could be subject to delays and capital assets may exceed planned cost. To mitigate this risk factory development is subject to robust budgeting and cost control processes, and project management and completion timetables are reviewed and approved by senior management.

Production and sales risk

To date the Group has not commenced full commercial production at all of its quarries. There can be no assurance that losses will not occur in the near future or that the Group will be profitable in future. The Group expects to continue to incur losses unless and until such time as some or all of the quarries enter into commercial production and generate sufficient revenues to fund continuing operations. To mitigate this risk, quarry operations have approved business plans and targets whilst working within strict working capital controls and robust budgeting and cost control processes.

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 over the next twelve months. There can be no assurance however that sales will be realised, that the Group will generate sufficient revenues or achieve profitability.

Environmental risks and hazards

All phases of the Group's operations are subject to environmental regulation in Kosovo and 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 heightened degree of responsibility for companies and their officers, directors and employees. There is no assurance that existing or future environmental regulation will not materially 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 help 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 help mitigate this risk the Group takes an active role in industry and other stakeholder engagement processes with local government.

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 succession planning is being developed to ensure skills development and retention and proactive recruitment processes are in place.

The Group's activities expose it to a number of 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 23 to the Company's statutory accounts.

The Future

In the coming year we hope to fulfil a number of key milestones for the Company, including completion of the factory and increasing levels of production in Prilep and Malesheva. In addition and most significantly, we expect to see the Company winning significant orders for its product as our branding, marketing and sales focus continues to develop. We anticipate revenue climbing as more customers purchase our stone and this momentum will not only increase throughout the year but continue into 2016. Already we are seeing the results of our efforts in establishing our product in key marketplaces throughout the world and the benefit or having our marble actually installed in developments. We have added to our sales team and we have sufficient lines of enquiry to be confident of sustainable income from a diverse range of customers for both our block and slab product around the world.

Finally, I would like to thank all our staff and our Board colleagues for their unstinting efforts on behalf of Fox Marble. Chris Gilbert

Chief Executive Officer

13 April 2015

Consolidated Statement of Comprehensive Income

For the year ended 31 December 2014

Consolidated Statement of Financial Position

As at 31 December 2014 Registered number: 7811256

Consolidated Statement of Cash Flows

For the year ended 31 December 2014

Consolidated Statement of Changes in Equity

For the year ended 31 December 2014

Notes to the consolidated financial statements

1) General Information

The principal activity of Fox Marble Holdings plc and its subsidiary companies Fox Marble Limited, H&P Sh.p.k, Granit Shala Sh.p.k, Rex Marble Sh.p.k and Fox Marble Kosova Sh.p.k (collectively "Fox Marble Group" or "Group") is the exploitation of quarry reserves in the Republic of Kosovo and South East Europe.

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 15 Kings Terrace, London, NW1 0JP. Fox Marble Holdings plc shares are admitted to trading on the London Stock Exchange's AIM market.

2) Basis of Preparation

The information in this preliminary announcement does not constitute statutory accounts within the meaning of section 434 to 436 of the Companies Act 2006 and no statutory accounts have yet been filed.

The consolidated financial information for Fox Marble Holdings plc (the 'Company') and its subsidiaries (together 'the Group') set out in this preliminary announcement has been derived from the audited consolidated financial statements of the Group for the year ended 31 December 2014 (the 'financial statements'). The auditors have reported on the 2014 financial statements and their reports were unqualified and did not contain statements under s498(2) or (3) Companies Act 2006. The 2014 Annual Report was approved by the Board of Directors on 13 April 2015.

The statutory accounts for the year ended 31 December 2014 will be delivered to the Registrar of Companies following the Company's Annual General Meeting.

3) Critical accounting estimates and areas of judgement

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 have to be met before estimated quarry reserves can be designated as ''proved'' and ''probable''. Proved and probable quarry reserve estimates are updated at regular intervals taking into account 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 taken into account in impairment assessments of non-current assets.

On the 31 August 2012 the Company issued €1,295,278 (£1,060,000) fixed rate convertible unsecured loan note 2017 under the terms of the agreement signed 24 August 2012 with Amati Global Investors Limited ("Series 1 Loan Note").

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 receiving a fixed amount of foreign currency cash 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 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 €30,838 at 31 December 2014 (2013 - €87,548).

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 management has considered:

(a) the current working capital position and operational requirements;

(b) the sensitivities of forecasts sales figures in the next two years;

(c) the timing and magnitude of planned capital expenditure; and

(d) the strategic exploitation of the company's significant resources.

The Company is subject to a number of risks and uncertainties which may impact on the forecast financial performance on the Company. The following risk factors, which are not exhaustive, are considered particularly relevant to the Group's ability to function as a going concern.

(a) The Malesheva and Prilep quarries are not currently at full level of commercial production. The amount of marble quarried at these sites will increase significantly over the next twelve months. Levels of production can be impacted by unforeseen delays due to inclement weather, equipment failure or the need to re-site the quarry bench. Delays in reaching anticipated levels of production may impact the Company's ability to generate revenues or achieve profitability.

(b) The Group's marble processing factory is under construction. Once completed machinery will need to be installed and tested, and a workforce recruited and trained. Completion of the factory could be subject to delays or cost overruns. This would impact the ability of the Group to process marble at its own site and impact the profitability of the Company's future operations.

(c) The Group's level of historical sales is low and the volume of sales is anticipated to grow over the next twelve months. There can be no assurance however that sales will be realised, that the Group will generate sufficient revenues or achieve profitability.

In the event that the cash receipts from sales are lower than anticipated the company has available to it a number of contingent actions it can take to mitigate the impact of potential downside scenarios. These include reviewing planned capital expenditure, redeploying company resources to more profitable resources, reducing overhead, renegotiating terms on its existing loan notes and seeking additional financing.

Under the terms of the Company's loan note arranged with Amati Global Investors Limited, from the 31 August 2015 the interest on the loan note may raised by the loan note holder from 8% per annum to 25% per annum. In the event of this occurrence the loan note is repayable without penalty at the option of the Company. The Company is in the process of negotiating an extension to this deadline, in order to provide the Company with additional flexibility and headroom. However the Company's going concern assessment is not dependent on the outcome of these negotiations.

In conclusion having regard to the existing working capital position and projected sales, the Directors are of the opinion that the Group has adequate resources to enable it to undertake its planned activities for the next 12 months.

5) Operating loss

During the year the group (including its overseas subsidiaries) obtained the following services from the company's auditors and its associates:

PricewaterhouseCoopers LLP were appointed as the Company's auditors for the years ending 31 December 2013 and 31 December 2014.

6) Finance costs

On the 31 August 2012 the Company issued €1,336,455 (£1,060,000) fixed rate convertible unsecured loan note 2017 under the terms of the agreement signed 24 August 2012 with Amati Global Investors Limited. Interest accrues on the loan notes at 8% per annum from the date of issue due quarterly in arrears. Further detail on the instrument can be found in note 17.

On the 23 August 2013 the Series 2 Loan Note arrangement with AGMH Limited was terminated, without funds having been drawn down. Costs incurred by AGMH Limited in the provision of loan note arrangement through its loan with Optimus Capital LLP of €193,323 were paid by the Company in the year to 31 December 2013.

7) Loss per share

Basic loss 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.

Diluted loss per share is calculated by dividing the loss attributable to equity holders of the Company by the weighted average number of the Ordinary Shares which would be in issue if all the options granted other than those which are anti-dilutive, were exercised.

The following potentially dilutive instruments have been excluded from the calculation of weighted average number of ordinary shares for the year ended 31 December 2014 for the purpose of calculating diluted loss per share on the basis that the instruments would be anti-dilutive.

· A warrant instrument entered into by the Company dated 24 August 2012, pursuant to which the Company issued Warrants to subscribe for an aggregate of 1,188,250 Ordinary Shares to Fox-Davies Capital Limited. (See note 20 for further details)

· A warrant instrument entered into by the Company dated 24 August 2012, pursuant to which the Company issued Warrants to subscribe for an aggregate of 369,250 Ordinary Shares to Merchant Securities Limited. (See note 20 for further details)

· Warrant instruments entered into by the Company dated 8 August 2013 and 28 August 2013, pursuant to which the Company issued Warrants to subscribe for an aggregate of 882,727 Ordinary Shares to Merchant Securities Limited. (See note 20 for further details)

· A grant of 120,000 options granted under the DSOP (See note 20 for further details)

· Shares issuable under unsecured convertible loan notes issued by the Company. (See note 17 for further details)

8) Intangible assets

Capitalised exploration and evaluation expenditure represents rights for the mining of decorative stone reserves in the Peja, Syrigane (formerly Suhogerll) and Rahovec quarries.

The Group has been granted rights of use by the local municipality for twenty years over land in the Syrigane and Rahovec region through acquisition of the issued share capital of Rex Marble SH.P.K and H&P SH.P.K.

The Group was granted exploration licences over the Syrigane, Rahovec and Peja sites by the Independent Commission for Mines and Minerals (ICMM), expiring between February and May 2013. Costs of €45,000 associated with the acquisition of these licences were capitalised.

Subsequently the Group was granted exploitation (mining) licences over the Syrigane, Rahovec and Peja sites by the Independent Commission for Mines and Minerals (ICMM), expiring between October 2025 and October 2026. Costs of €47,865 associated with the acquisition of these licences have been capitalised.

On the 16 August 2014 the Company entered into a sub-lease arrangement with New World Holdings (Malta) Limited in relation to the Omega Sivec marble quarry at Prilep in 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 20 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.

9) Property, plant and equipment

10) Convertible loan notes

On the 31 August 2012 the Company issued €1,295,278 (£1,060,000) fixed rate convertible unsecured loan note 2017 under the terms of the agreement signed 24 August 2012 with Amati Global Investors Limited ("Series 1 Loan Note").

Interest accrues on the Series 1 Loan Note at 8% per annum from the date of issue due quarterly in arrears. On the third anniversary of issue, or in the event of a default, the interest rate may be raised by the loan note holder to 25 %. In the event that the interest rate rises to 25% the loan note becomes repayable at the option of the Company.

On the 29 August 2013 the Company paid interest of €104,643, being the interest that had accrued between 24 August 2012 and 31 August 2013. These funds were used by Amati Global Investors Limited to subscribe for shares in the Company as part of the secondary placing in 2013 (See note 18). The Company elected to capitalise the remaining interest due until 31 August 2014. The accrued capitalised interest of €117,855 was repaid by the Company on the 28 February 2015.

At any time prior to repayment of the Series 1 Loan Note, a Stockholder may issue a conversion notice. The Stockholder will receive such number of fully paid Ordinary Shares as satisfied by the formula: 1 Ordinary Share for every y pence nominal of Stock converted, where y is the lesser of: 20 + (number of whole months which have lapsed between the date of issue of the Stock held by the Stockholder and the date of receipt of by the Company of a conversion notice multiplied by 0.1666); and 26.

If the Series 1 Loan Note is not converted at the Stockholders request it must be repaid in full on the 5th anniversary of the instrument date. The Series 1 Loan Notes may be repaid earlier in the event the interest rate rises to 25%.

As at 31 December 2014 the loan note held at amortised cost had a balance of €1,471,854 (2013 - €1,267,252). The Stockholders option to convert the loan has been treated as an embedded derivative and measured at fair value. As at 31 December 2014 the derivative had a value of €30,838 (2013 - €87,548). The fair value has been assessed using a Black Scholes methodology.

The directors consider that the carrying amount of borrowings approximates their fair value at 31 December 2014.

On the 24 August 2012 the Company entered into a loan note arrangement to issue €2,443,792 (£2,000,000) fixed rate convertible loan notes due 2017 to AGMH Limited ("Series 2 Loan Note"). AGMH Limited, a company registered and incorporated in England and Wales with company number 08160250, is owned by Chris Gilbert and Dr Etrur Albani, founders of the Group and Directors of the Company. The funds to be subscribed by AGMH Limited were provided by a loan to AGMH Limited from Optimus Capital LLP.

On the 23 August 2013 the Series 2 Loan Note arrangement with AGMH Limited was terminated, without funds having been drawn down. Costs incurred by AGMH Limited in the provision of the loan note arrangement through its loan with Optimus Capital LLP of €193,323 were paid by the company in the year to 31 December 2013. No further obligations exist under this arrangement.

Costs of €147,330 were incurred in connection with the issue of these Series 1 and Series 2 loan notes. Costs are amortised over the period of the loan. As at 31 December 2014 the balance of these costs amounted to €23,011 (2013 - €57,527).

11) Share capital

The Company has one class of ordinary share capital.

a. On a resolution at a general meeting, every member (whether present in person, by proxy or authorised representative) has one vote in respect of each ordinary share held by him.

b. All ordinary shares rank equally in the right to participate in any approved dividend distribution applicable to this class of share.

c. Except as otherwise provided below, all dividends must be

i. Declared and paid according to the amounts paid up on the shares on which the dividend is paid; and

ii. Apportioned and paid proportionately to the amounts paid up on the shares during any portion of the period in respect of which the dividend is paid.

d. If any share is issued in terms of providing that it ranks for dividend as from a particular date, that share ranks for dividend accordingly.

e. In the event of any winding up all shares will rank equally in relation to distribution of capital.

f. All shares are non-redeemable.

On the 30 April 2013 the Company issued 132,404 ordinary shares in the Company at a price of 18.02p per share, being the 30 day weighted average volume price at 20 April 2013 to Non-executive Directors of the Company. As part of their remuneration package the Non-Executive Directors of the Company agreed to utilise their first year's fees (net of tax) to subscribe for Ordinary Shares in the Company at the Company's request. This issue of Ordinary Shares is in respect of the remuneration for the period from 1 January 2013 to 31 March 2013.

On the 11 July 2013 the Company issued 135,300 ordinary shares in the Company at a price of 17.52p per share, being the 30 day weighted average volume price at 7 July 2013 to Non-executive Directors of the Company. This issue of Ordinary Shares is in respect of the remuneration for the period from 1 April 2013 to 30 June 2013.

On the 13 August 2013 the Company issued 10,469,694 shares at a price of 16.5p per share as part of a Secondary Placing on AIM. The shares placed were within existing authorities held by the board of directors. On the 29 August 2013 the Company placed a further 4,242,422 shares at a price of 16.5p per share following shareholder approval at a general meeting.

In addition 529,563 shares were issued to two funds managed by Amati Global Investors for £87,378 and have agreed to amend the terms of the loan note held by them such that the first year's capitalised interest on the loan note will be payable in cash.

On the 4 August 2014 the Company issued 26,388,883 shares at a price of 18p per share as part of the Secondary Placing on AIM, following shareholder approval at a general meeting.

The Company has recognised transaction costs of €449,146 in relation to the issue of share capital within share premium in the year to 31 December 2014 (2013 - €249,262).

12) Accumulated losses

Accumulated losses for the Group and Company include a charge of £6,035,228 incurred in the year ended 31 December 2012.

Between 25 August 2011 and 29 September 2011 Fox Marble Limited issued €1,508,807 (£1,195,000) of unsecured convertible loan notes due 2016 ("Pre IPO loan note"). In the event of admission of the Company and its parent to AIM these loan notes were to convert to a variable number of ordinary shares of the Company to provide a conversion value of 5:1. On the 24 August 2012, following the acquisition of Fox Marble Limited by Fox Marble Holdings plc the loan notes were novated from Fox Marble Limited to Fox Marble Holdings plc.

Following the admission of the Company to AIM on the 31 August 2012 the loan notes with a carrying value of €1,508,807 (£1,195,000) were converted into 29,875,000 shares at an issue price of 20p, with a total value of €7,544,035 (£5,975,000) resulting in a non-cash accounting charge of €6,035,228 being recognised in the statement of comprehensive income.

13) Capital Commitments

Capital expenditure contracted for but not yet incurred at the end of the reporting period is as follows:

In addition to the above committed spending, the Group has planned expenditure in respect of the construction of its processing factory of €946,410.

14) Events after the reporting period

There were no events after the reporting period requiring disclosure.

15) Information

Copies of the Annual Report and financial statements will be posted to shareholders. Further copies will be available from Fox Marble Holdings plc's registered office at 15 Kings Terrace, London, NW1 0JP or on the Company's website at www.foxmarble.net.