Updated 21 September 2018

Anpario plc (“Anpario”, “Group” or “the Company”)

 

Corporate governance statement

Chairman’s introduction

The Company’s shares are traded on the Alternative Investment Market (“AIM”) of the London Stock Exchange. Anpario has chosen to apply the Quoted Companies Alliance Corporate Governance Code (“QCA Code”) from 20 September 2018.

In my role as Chairman, it is my responsibility to ensure the highest practicable standards of corporate governance are in place. Previously, the Company was not required to, but closely followed the recommendations on corporate governance as set out in both the UK Corporate Governance Code and the QCA code. The formal adoption of the QCA Code will serve as a vehicle with which we can improve communication to all stakeholders to increase visibility of the high standards that are already in place within the Company.

Anpario offers natural solutions to the food farming industry which work in harmony with the natural aspects of an animal’s biology to promote healthy growth at the least cost to the environment and the producer. Our products enable the production of top quality protein that partners future farming practice around the world. This objective and our engagement with stakeholders, ensures that we act in a manner that is responsible and beneficial to all.

The board and staff at the Company are committed to behaving professionally and responsibly to ensure that the highest standards of honesty, integrity and corporate governance are maintained. Enshrining these values through the Company’s culture, objectives and processes is essential to support the success of the Company in creating long-term shareholder value.

Principle 1: Our strategy and business model to promote long-term value for shareholders

Anpario is an international producer and distributor of high performance natural feed additives for animal health, hygiene and nutrition. Our products work in harmony with the natural aspects of the animal’s biology; and Anpario’s expertise is focused on intestinal and animal health, and utilizing this understanding to improve animal performance and producer profitability.

Anpario supplies its customers with quality assured products manufactured in the United Kingdom and has an established global sales and distribution network in over 70 countries. Anpario was built up through a combination of acquisitions and organic growth by establishing wholly owned subsidiaries in a number of key meat producing countries. Supported by strong head office functions, our regional structure allows us to have people close to and focused on local markets to ensure we can meet their specific needs and challenges.

Anpario’s portfolio of products has been developed with the customer and the animal in mind, taking into account the life stages of the animal and the periods when they will be more challenged. The Group’s portfolio of innovative products has been divided into four categories, Eubiotics, Feed Security, Feed Quality and Nutritional.

Anpario is well positioned to benefit from the trends in growth of the world’s population, the increasing demand for meat and fish protein in developing countries and the tightening of global regulation which favours more natural feed additive solutions. Seizing these opportunities is how Anpario intends to deliver long-term shareholder value.

Anpario has specific resource and processes in place to proactively identify and manage risk to protect the continued growth and long-term future that is possible as outlined above. Our annual report details specific financial and non-financial risks and uncertainties facing the business and any measures in place to mitigate them.

Principle 2: Understanding and meeting shareholder needs and expectation

Communications with shareholders are given high priority and Anpario recognises the importance and value in reciprocal and open communication with its many investors. This is key to ensure alignment between the motivations and expectations of our shareholders and our strategy and business model.

This communication takes place in many forms to serve different purposes. Our Interim Statements and Annual Reports contain detailed information for shareholders to understand our performance, strategy and future plans. Between these disclosures, the Company also issues RNS announcements, as required, which serve to keep shareholders updated about regulatory matters or changes that they should be notified of. These RNS announcements, as well as wider news articles about the Company, are available on our website www.anpario.com.

The Annual General Meeting is the main opportunity for all shareholders to engage with Anpario. Shareholders are notified in advance of the date and location of the meeting as well as the resolutions that are to be voted on. At the meeting, the Board and key personnel give a presentation about the most recent published results and our strategy; they are also available to answer any questions that shareholders may have.

The Directors actively seek to build strong relationships with institutional investors and investment analysts. Presentations are given immediately following Interim Statement and Annual Report announcements. Feedback directly from shareholders via the Company’s advisers after these regular analyst and shareholder meetings ensures that the Board understands shareholder views. The Board as a whole are kept informed of the views and concerns of major shareholders and are made aware of any significant investment reports from analysts.

Shareholders are encouraged to contact the Company should they have any questions or concerns and can do so using a dedicated email address investor@anpario.com. This is actively used by our Shareholders and successfully enables them to engage with the Board in addition to attaining assistance on individual shareholder specific matters that we may be able to help with. The Chairman and other Directors meets or has contact with major shareholders as necessary.

The Executive Directors hold shares and participate in incentive plans in the Company which ensures that their interests are fully aligned with those of other shareholders.

Principal 3: Corporate social responsibilities and wider stakeholders

Anpario seeks to ensure a sustainable business, behaving socially, ethically and environmentally responsibly and engaging with all of its key stakeholders, including the communities in which the Company operates, its people and the environment. As we evolve our business model and strategy we ensure that we identify any new stakeholders and seek to understand them alongside existing stakeholders. Some of the key stakeholders are discussed below.

Employees

Anpario is an inclusive organisation where no-one receives less favourable treatment on the grounds of gender, nationality, marital status, colour, race, ethnic origin, creed, sexual orientation or disability. Employees embody Anpario’s key values of “Integrity, Teamwork, Innovation and Leadership”.

Over 100 employees work for Anpario in the UK and its global operations. It is the Group’s policy to involve colleagues in the business and to ensure that matters of concern to them, including the Group’s aims and objectives and its financial performance, are communicated in an open way. Where appropriate, employees are offered the opportunity to become shareholders in order to promote active participation in, and commitment to, the Group’s success

The Employee handbook which applies globally and includes detailed policies and guides for employees which cover:

  • Behaviour – Equal Opportunities and Dignity at Work, Anti-Bribery and Anti-Corruption, Communications and Privacy.
  • Family – Parental, Dependents, Maternity, Paternity, Flexible working, Adoption
  • General – Grievance, Whistle blowing, Discrimination and Bullying, and Disciplinary
  • Safety – Health and Safety handbook, Occupational Health Policy, Drug and Alcohol abuse.

Specific training is given to all employees in respect of key policies including online training videos on the Company’s intranet and appropriate health and safety training.

Employees are encouraged to further develop their skills and provide appropriate training in order to support our people and grow organisational capabilities. Anpario currently:

  • has several apprentices places;
  • recruits graduates in disciplines such as biosciences, accountancy, law and HR.
  • works closely with several global universities on joint scientific initiatives;
  • provides ongoing professional training support, extensive coaching and management development programmes;
  • provides financial and study leave for professional and work related qualifications.

The Company has a universal bonus scheme in place for all employees with targets aligned with shareholders as appropriate to their roles and responsibilities. The provision of share option and sharesave schemes has resulted in over 50% of our employees participating in one or more of the current schemes in operation.

Anpario supports local community initiatives and employee charity work through sponsorship.

An analysis of Directors, senior managers and other employees by gender as at 7 March 2018 is as follows:

Male Female
Directors 3 1
Senior managers 8 9
Administration, Production, Sales and Technical staff 51 40
62 50

Suppliers, Customers and Regulators

Anpario supplies animal products to many countries and aims to provide products to enhance animal health and nutrition. Internal quality control ensures: the safety of its products; transparency and traceability.

Anpario retain key industry quality accreditations in particular UFAS and FEMAS certifications. The Group is committed to achieving a safe and secure working environment in all locations operating an established Group health and safety policy applicable to all employees.

  • Responsible procurement policies are in place to source raw materials to high specification and rigorous quality standards. Anpario seeks to partner suppliers operating to highest standards of honesty and integrity. These ethics include through responsible procurement and due diligence, ensuring: suppliers operate rigorous quality standards and comply with all applicable ethical labour and, trade laws and regulations, including the requirements of The Modern Slavery Act 2015;
  • the operation of manufacturing facilities to the highest standards; compliance with recognised quality standards; and a safe and secure working environment in all our locations;
  • compliance with environmental legislation and responsible practices minimising the impact of its operations on the environment;
  • absolute transparency and traceability of raw materials and compliance with international regulations;
  • zero tolerance of bribery and corruption.

Environment

The Group recognises the importance of good environmental controls. It is the Group’s policy to comply with environmental legislation currently in place, adopt responsible environmental practices and give consideration to minimising the impact of its operations on the environment.

Material supply:

  • Fish & marine oils used for our products are processed by-products from farmed fish productions for human consumption or sourced from suppliers certified for sustainable fishing.
  • Raw materials used within products are primarily common minerals in high grade quality from plentiful natural resources.
  • Pre-used reconditioned & cleaned intermediate bulk containers are used for packaging & supply of bulk liquids.

Environmental Controls & good practices

  • 90% of carrier and materials are supplied in bulk and added directly into production to minimise packaging waste and labour requirements.
  • 100% liquid bulk ingredients are stored in bunded storage silos; liquid bulk deliveries are accepted only when the site drainage system is blocked with a bung to prevent accidental spills from entering into the general sewerage system.
  • A dust extraction system is used to minimise dust in the production area and prevent dust from being emitted into the environment.
  • Manufacturing processes generate 1% of the production volume as product and material waste due to manufacturing & cleaning activities. This product and material waste is collected by a waste contractor and environmentally recycled.
  • Digital marketing brochures are created that can easily be emailed or viewed via the website as opposed to being printed and posted out.
  • Travel is managed to ensure trips are multi-purpose or alternatively using telephones, skype and conference centres and webinars.
  • A paperless office policy is encouraged.

The Group adopts a clear Code of Conduct setting out the behaviour expected from all employees and business partners (including suppliers, customers, consultants, agents and representatives). It shall not knowingly take any actions which violate any applicable national and international anti-bribery and corruption legislation, including the UK Bribery Act 2010.

Principle 4: Effective Risk Management

Anpario has specific resource and processes in place to proactively identify and manage risk to protect the continued growth and long-term future. 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 Company and that they balance exploiting opportunities and protecting against threats. Our annual report details specific financial and non-financial risks and uncertainties facing the business and where possible the measures in place to mitigate them.

Principle 5: The Board

The Board of Directors is collectively responsible and accountable to shareholders for the long-term success of the Company. The Board provides leadership within a framework of prudent and effective controls designed to ensure strong corporate governance and enable risk to be assessed and managed.

The Board regularly reviews the operational performance and plans of the Company and determines the Company’s strategy, ensuring that the necessary financial and human resources are in place in order to meet the Company’s objectives. The Board also sets the Company’s values and standards, mindful of its obligations to shareholders and other stakeholders.

Full details and biographies of the Board are available on our website, the Board comprises of two independent Non-Executive Directors and two Executive Directors.

Executive Directors
      Key Committees
Name Role Qualifications Audit Nom. Rem.
Richard Edwards Chief Executive Officer B Eng (Hons), C Eng, MBA. M
Karen Prior Group Finance Director BSc (Hons), FCA.
Independent Non-Executive Directors
      Key Committees
Name Role Qualifications Audit Nom. Rem.
Peter Lawrence Non-Executive Chairman MSc, BSc, DIC, ACGI. C C M
Richard Wood Senior Independent Director BSc, C Eng M M C

 

Audit = Audit Committee, Nom. = Nomination Committee, Rem. = Remuneration Committee
C = Chair, M = Member

The Board considers that Peter Lawrence and Richard Wood are independent. In Peter Lawrence’s case the Board has specifically considered his length of service on the Board and determined that in terms of interest, perspective and judgement he remains independent.

All Directors are subject to reappointment by shareholders at the first Annual General Meeting following their appointment and thereafter by rotation.

The Board delegates its authority for certain matters to its Audit, Remuneration and Nomination Committees. The Board approves and reviews the terms of reference of each of the Committees which are available on the Company’s website, http://www.anpario.com/aim-26/.

The Board meets formally at least four times per annum. All Board members receive agendas and comprehensive papers prior to each Board meeting. The Group Finance Director is also the Company Secretary and is responsible to the Board for ensuring that Board procedures are followed and that applicable rules and regulations are adhered to.

In addition to formal Board and Committee meetings, ad hoc decisions of the Board and Committees are taken after discussion throughout the financial year as necessary through the form of written resolutions.

All Directors in office at the time of the various committee meetings were in attendance for all of the meetings convened between 9 March 2017 and 7 March 2018. A list of the meetings convened during the year is set out below.

Number of meetings convened Full attendance of meeting
Board meetings 4 Yes
Audit Committee meetings 2 Yes
Remuneration Committee meetings 2 Yes
Nomination Committee meeting 1 Yes

 

The Chief Executive Officer works full time for the Group. The Group Finance Director is contractually employed for a four day week, however, additional hours are worked to ensure the roles and responsibilities of the position are fully met. The Non-executive Directors have commitments outside of Anpario plc. They are summarised on the Board biographies available from http://www.anpario.com/directors/. All the Non-Executive Directors give the appropriate amount of time required to fulfil their responsibilities to Anpario.

Principal 6: Ensuring Directors have between them the necessary up-to-date experience, skills and capabilities

The Nomination Committee aims to ensure that composition of the Board reflects appropriate balance of skills and experience required to ensure long-term shareholder value and manage risk. Details of the role of the Nomination Committee and the activities it performs in relation to these matters is included in the “Maintaining Governance Structures” section later on in this document.

The Board biographies available on the website give an indication of their breadth of skills and experience. Each member of the Board takes responsibility for maintaining their own skill set, which includes roles and experience with other boards and organisations as well as formal training and seminars.

Principal 7: Evaluating Board Performance

The performance of the Board is evaluated formally on an annual basis, following the conclusion of the annual Audit and finalisation of the Annual Report.  The Chairman leads this process which looks at the effectiveness of both the Board as a unit and its individual members.

When addressing overall Board performance the factors considered, include but are not limited to, underlying group financial performance, the success of new strategy implementation and the effectiveness of risk and control measures. This process further looks at the performance of each member and considers their individual successes, commitment and alignment to the overall Group strategy. As appropriate, it will also look to confirm that members have maintained their independence.

As part of the adoption of QCA, Anpario are reassessing the processes around evaluating Board performance in order to increase the visibility to shareholders. Further information will be provided as part of the next Annual Report.

The Nomination Committee is responsible for determining Board level appointments, details of its role and terms of reference are provided later in this document. The Executive Board members determine the appointments to the Senior Management team, in line with Board approval procedures.

Succession planning is a key part in ensuring the long-term success of the Company. The Executive team ensure that potential successors in place within the business and are given the required support and guidance to develop further. At the required time, it is the Nomination Committee’s role to make decisions about future appointments to the Board.

Principle 8: Promoting a corporate culture based on ethical values and behaviours

Anpario has a strong ethical culture, the Board is responsible for setting and promoting this throughout our processes and behaviours. The policies related to these matters are regularly reviewed and updated and distributed to employees and other stakeholders as appropriate. Further, specific training is given to keep staff updated on relevant changes, these sessions are often recorded for future reference and new staff.

A copy of our code of conduct is available on our website, http://www.anpario.com/code-of-conduct/. This sets out policies on Corporate Social Responsibility and Anti-Bribery and Anti-Corruption. Anpario also have a whistleblowing policy that is applicable to all our employees, other workers, our suppliers and those providing services to our organisation.

Principal 9: Maintaining governance structures

Anpario is confident that the governance structures in place in the Company are appropriate for its size and individual circumstances whilst ensuring they are fit for purpose and support good decision making by the Board.

The Board defines a series of matters reserved for its decision. These include strategy, finance, corporate governance, approval of significant capital expenditure, appointment of key personnel and compliance with legal and regulatory requirements.

There is clear segregation of responsibility within the Board. The Non-Executive Chairman is responsible for providing leadership to and managing the business of the Board, in particular ensuring strong Corporate Governance policies and values. The role of Chief-Executive Officer is concerned with the formulation and implementation of the strategy of the Company and is responsible for all components and departments of the business. The role of the Group Finance Director is to provide strategic and financial guidance and to develop the necessary policies and procedures to ensure sound financial management and control of the Company. The Group Finance Director also acts as Company Secretary and is further responsible for advising on corporate governance matters and ensuring compliance with relevant legislative and legal requirements.

Details of the key committees are set out below, the terms of reference for each are available on our website as part of the committee section of the AIM 26 disclosures http://www.anpario.com/aim-26/.

Audit Committee

The Audit Committee is comprised of the two Non-Executive Directors and is chaired by Peter Lawrence. It meets at least twice each financial year with the external auditors and considers any issues that are identified during the course of their audit work. The Board is satisfied that the Committee members have recent and relevant financial experience.

The Committee met twice during the year-ended 31 December 2017 with full attendance by the Committee members. Meetings are also attended, by invitation, by the Finance Director and the external auditors and other management.

The Committee regularly reviews its terms of reference and makes recommendations to the Board for any changes as appropriate. The current terms of reference are available on the Company’s website.

The Committee reviews the independence of the external auditors, Deloitte LLP on an annual basis. It receives a detailed audit plan, from Deloitte LLP, identifying their assessment of the key risks. The Committee assesses the effectiveness of the audit process in addressing these matters through the reporting it receives from Deloitte LLP at both the half-year and year-ends.

Remuneration Committee

Directors’ remuneration is determined by the Remuneration Committee which is comprised of the two Non-Executive Directors and is chaired by Richard Wood. It meets at least once each financial year. The Committee met twice during the year-ended 31 December 2017 with full attendance by the Committee members. The policy for the current and future financial years for the remuneration and incentivisation of the Executive Directors is:

  • to ensure that individual rewards and incentives are aligned with the performance of the Group and interest of shareholders;
  • to ensure that performance-related elements of remuneration constitute a significant proportion of an Executive’s remuneration package; and
  • to maintain a competitive remuneration package which enables the Group to attract, retain and incentivise Executives of the calibre required. Each of the Executive Directors have service contracts with the Company which includes a notice period of twelve months.

The key components of Executive remuneration are:

Salary

The purpose is to provide a competitive base salary for the market in which the Company operates to attract and retain Executives of a suitable calibre. Salaries are usually reviewed annually, although interim reviews will be undertaken if considered appropriate. Salary levels are determined taking into account a range of factors, which may include:

  • underlying Group performance;
  • role, experience and individual performance;
  • competitive salary levels and market forces; and
  • pay and conditions elsewhere in the Group.
Benefits package

The purpose is to provide broadly market competitive benefits as part of the total remuneration package. Executive Directors receive benefits in line with market practice, and these include principally life insurance, permanent health insurance, private medical insurance and a company car.

Pension benefits

The purpose is to provide an appropriate level of retirement benefit or cash allowance equivalent. Executive Directors are eligible to participate in an approved personal pension. In appropriate circumstances, such as where contributions exceed the annual or lifetime allowance, Executive Directors may be permitted to take a cash supplement instead of contributions to a pension plan.

Performance bonus

The purpose is to incentivise Executive Directors to deliver annual business performance and achieve wider Group objectives. Awards are based on annual performance against key financial and strategic targets and/or the delivery of personal objectives. Pay-out levels are determined by the Remuneration Committee, after the year-end, based on performance against those targets.

Share incentives

The purpose is to directly align Directors’ interests with those of shareholders. Share options and jointly owned shares have been issued to Executives and other senior managers under management incentive schemes over a number of years. The usual vesting period is three years or on a change of control, if earlier.

Sharesave scheme

To create alignment with the Group and promote a sense of ownership. Executive Directors are entitled to participate in a tax qualifying all employee Sharesave scheme under which they may make monthly savings contributions over a period of three years linked to the grant of an option over the Company’s shares with an option price which can be at a discount of up to 20% of the market value of shares at the date of grant.

Nomination Committee

The Nomination Committee is comprised of the two Non-Executive Directors and the Chief Executive Officer and is chaired by Peter Lawrence. Meetings are held as required by the Chairman. The role of the committee is as follows.

Regularly review the structure, size and composition (including the skills, knowledge, experience and diversity) of the Board and make recommendations to the Board with regard to any changes;

Give full consideration to succession planning for Directors and other senior executives taking into account the challenges and opportunities facing the Company, and the skills and expertise needed on the Board in the future;

Keep under review the leadership needs of the organisation, both executive and non-executive, with a view to ensuring the continued ability of the organisation to compete effectively in the marketplace;

Keep up to date and informed about strategic issues and commercial changes affecting the Company and the market in which it operates;

Review and approve selection procedures for potential Board members, whether executive or non-executive, whether for immediate appointment to the Board or after a probationary period;

Be responsible for identifying and nominating for approval of the Board, candidates to fill Board vacancies as they arise;

Before any appointment is made by the Board, evaluate the balance of skills, knowledge, experience and diversity on the Board, and, in the light of this evaluation, prepare a description of the role and capabilities required for a particular appointment. In Identifying suitable candidates the committee shall use open advertising or the services of external advisers to facilitate the search; consider candidates from a wide range of backgrounds; consider candidates on merit against objective criteria and with due regard to the benefits of diversity on the Board, including gender, taking care that appointees have enough time available to devote to the position;

For the appointment of a Chairman, the committee shall produce a job specification, including the time commitment expected. A proposed Chairman’s other significant commitments should be disclosed to the Board before appointment and any changes to the Chairman’s commitments should be reported to the Board as they arise;

Prior to the appointment of a Director, the proposed appointee should be required to disclose any other business interests that may result in a conflict of interests and be required to report any future business interests that could result in a conflict of interest;

Ensure that on appointment to the Board, non-executive Directors receive a formal letter of appointment setting out clearly what is expected of them in terms of time commitment, committee service and involvement outside Board meetings;

Ensure that following appointment to the Board, Directors undergo an appropriate induction programme;

Make recommendations to the Board on membership of the Board’s committees, in consultation with the chair of such committees; the reappointment of any non-executive at the conclusion of their specified term of office; the reappointment by shareholders of Directors under the Company’s rotation requirements taking into account the need for progressive refreshing of the Board.

Principal 10: Communicating governance and performance matters with shareholders and wider stakeholders

Communications with shareholders are given high priority and we proactively promote engagement through a range of measures. More details of which are provided earlier in this document about how Anpario seek to engage with and understand Shareholders and wider Stakeholders. Following the adoption of the QCA Code further disclosures will be included in the next Annual Report such as; the work undertaken by Board committees in the year, the audit committee report and the remuneration committee report.

The most recent AGM took place on 28 June 2018, full details of which are included in the latest annual report available from our Website. The results of the AGM are set out below. None of the resolutions had a significant number of votes cast against it.

No. Resolution Result
1 Accept Financial Statements and Statutory Reports Passed
2 Approve Final Dividend Passed
3 Re-elect Peter Lawrence as Non-Executive Chairman Passed
4 Re-elect Richard Wood as Senior Independent Director Passed
5 Re-appoint Deloitte LLP as Auditors Passed
6 Authorise Issue of Equity with Pre-emptive rights Passed
7 Authorise Issue of Equity without Pre-emptive rights Passed
8 Authorise Market Purchase of Ordinary Shares Passed

 

Our Company website includes historical Annual Reports and Interim Statements; both in RNS format as part of its News section, and the published documents are available from http://www.anpario.com/annual-interim-reports/. Included within these documents are the notices of previous annual general meetings, the results of which are released as RNS announcements and can be found in the News Releases section of our website http://www.anpario.com/.

2018-09-21T14:15:20+00:00