Corporate Governance | Anpario Investor Relations

Updated 3rd July 2023

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

Chair’s introduction

The Company’s shares are traded on the Alternative Investment Market (“AIM”) of the London Stock Exchange. Anpario applies the Quoted Companies Alliance Corporate Governance Code (“QCA Code”).

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 committedto 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.

Anpario is committed to conducting business in a socially, ethically and environmentally responsible manner. We do this by focusing on a 3 Pillars framework: ‘People; Planet; and Promise’.

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

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

Anpario has specific resource and processes in placeto 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 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 mattersor 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/investor/.

The Annual General Meeting (“AGM”) is the main opportunity for all shareholders to engage with Anpario. Shareholders are notified in advance ofthe 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 aboutthe most recent published results and our strategy.They are also available to answer any questions that shareholders may have. The Company’s articles have been updated to enable the holding of virtual meetings in future.

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 analystand 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 with which we may be able to help. The Chairman and other Directors will meet or have contact with major shareholdersas necessary. Where appropriate on specific mattersthe Board or its Committees will conduct shareholder consultations.

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

Principle 3: Corporate social responsibilities and wider stakeholders

Anpario seeks to ensure a sustainable business,behaving with social, ethical and environmental responsibility and engaging with all of its key stakeholders, including the communities in which the Group operates, its people and the environment. As noted we have launched the 3 Pillars: ‘People, Planet and Promise’ as a framework to focus our behaviours with respect to sustainability and our ESG objectives.Full details of the Group’s approach to these mattersare included in a new Environmental and Social Responsibility Report later in this annual report and on the website: www.anpario.com/about/sustainability/.

Principle 4: Effective Risk Management

Anpario has specific resource and processes in placeto proactively identify and manage risk to protect its 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. The Risk management section of this annual report details specific financial and non-financial risks and uncertainties facing the business and where possible the measures in place to mitigate them.

Risk management and control

Effective risk analysis is fundamental to the executionof Anpario’s business strategy and objectives and our risk management and control processes are designedto make management of risk an integrated part ofthe organisation. The framework is used to identify,evaluate, mitigate and monitor significant risks and to provide reasonable but not absolute assurance thatthe Group will be successful in achieving its objectives.The focus is on significant risks that, if they materialise,could substantially and adversely affect the Group’s business, viability, prospects and share price.

A formal Internal Audit function is not felt to besuitable for the Group at the current time due to itssize, however this is kept under review alongside an appropriately robust internal control system.

Risk management process

We recognise that a level of risk taking is inherent within a commercial business. Our risk management process is designed to identify, evaluate and mitigate the risks and uncertainties we face.

The CEO is the ultimate Risk Manager. The Board establishes our risk appetite, oversees the risk management and internal control framework and monitors the Group’s exposure to principal risks.

The Executive Management Board (EMB) owns the risk management process and is responsible for managing specific risks. The EMB members are also responsiblefor embedding rigorous risk management in operational processes and performance management and review.

The EMB members are responsible for the risk analysis,controls and mitigation plans for their individual section of the business.

The Audit Committee reviews the effectivenessof the risk management process and the internalcontrol framework and ensures appropriate executive ownership for all key risks.

These processes ensure that all Directors receive detailed reports from management and are able to discuss the risks, controls and mitigations in place and therefore satisfy themselves that key risks are being effectively managed.

Internal control framework

Anpario’s internal control framework is designed to ensure the:

effectiveness and efficiency of business operations;
reliability of financial reporting;
compliance with all applicable laws and regulations;and
assignment of Authority and Responsibility.

Anpario’s values underpin the control framework and it is the Board’s aim that these values drive the behaviours and actions of all employees. The key elements of the control framework are:

Management structure

The Board sets formal authorisation levels and controls that allow it to delegate authority to the EMB and other Managers in the Group. The management structure has clearly defined reporting lines and operating standards.

Strategy and business planning

Anpario has a strategic plan which is developed by the EMB and endorsed by the Board;
Business objectives and performance measuresare defined annually, together with budgets and forecasts; and
Monthly business performance reviews are conducted at both Group and business unit levels.

Policies and procedures

Our key financial, legal and compliance policies and procedures that apply across the Group are:

Code of Conduct;
Designated authorities and approvals;
ISO 14001 Environmental Management Systems accreditation;
Anti-Bribery and Corruption Policy;
Modern Slavery Policy;
GDPR and Privacy Policy; and
Due diligence processes including rigorous sanctions checks.

Technical standards and operational controls

Our operational control processes include:

Product pipeline review: product pipeline is reviewed regularly to consider new product ideas and determine the fit with our product portfolio.We assess if the products in development are progressing according to plan and evaluate the expected commercial return on new products;
Lifecycle management: lifecycle management activities are managed and reviewed for our key products to meet the changing needs of our customers, environmental and regulatory standards;
Quality assurance: a manufacturing facility with an established Quality Management System operating under FEMAS and UFAS and designed to ensure that all products are manufactured to a consistently high standard in compliance with all relevant regulatory requirements;
Product registration: a robust system operatedby our regulatory team to ensure all products are correctly registered within the jurisdiction in which they are sold; and
Pricing: a pricing structure which is managedand monitored to provide equitable pricing for all customer groups and compliance with regulatory authorities.

Financial controls

Our financial controls are designed to prevent and detect financial misstatement or fraud. This provides reasonable, but not absolute, assurance against material misstatement or loss. They include:

a formalised reporting structure which incorporates the setting of detailed annual budgets and key performance indicators which are updated on a regular basis to form forecasts;
management and Board meetings where all key aspects of the business are presented, reviewedand discussed including comparison of currentand historical performance as well as budgets and forecasts;
defined authorisation levels for expenditure;the placing of orders and contracts; and signing authorities;
transactional level controls operated on a day-to-day basis;
daily reconciliation and monitoring of cash movements by the finance department and the Group’s cashﬂow is monitored;
segregation of accounting duties;
reconciliation and review of financial statements and judgements;
internal and external training to ensure staff are aware of the latest standards and best practice; and
membership of professional bodies and compliance with associated code of ethics.

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 anddetermines 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 three Executive Directors and one independent Non-Executive Directors.

Executive Directors

			Key Committees
Name	Role	Qualifications	Audit	Nom.	Rem.
Richard Edwards	Chief Executive Officer	B Eng (Hons), C Eng, MBA.		M
Marc Wilson	Group finance Director	BA (Hons), ACMA.
Karen Prior	Corporate Responsibility Director	BSc (Hons), FCA.

Independent Non-Executive Directors

			Key Committees
Name	Role	Qualifications	Audit	Nom.	Rem.
Matthew Robinson	Senior Independent Director	MA, ACA.	C	C	C
Tim Pollock	Non-Executive Director

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

The Board considers that the Non-Executive Directors are independent.

All Directors are subject to reappointment by shareholders at the first AGM 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, 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 Corporate Responsibility 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 during 2022. A list of the meetings convened during the year is set out below.

	Number of meetings convened	Full attendance of meeting
Board meetings	6	Yes
Audit Committee meetings	2	Yes
Remuneration Committee meetings	2	Yes

The Chief Executive Officer and Group financeDirector work full time for the Group. The Corporate Responsibility Director works two days a week in the year and ensures 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 www.anpario.com/investor/aim-26/. All the Non-Executive Directors give the appropriate amount of time required to fulfil their responsibilities to Anpario.During the year, following the resignation of Kate Allum, the number of Non-Executive Directors reduced to one. The Board is currently evaluating potential candidates for a Non-Executive Director position.

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 givean 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 formallyon 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 tothe overall Group strategy. As appropriate, it will also look to confirm that members have maintained their independence.

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 Executive 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 are in place withinthe 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 sessionsare often recorded for future reference and new staff induction.

A copy of our Code of Conduct is available on our website,www.anpario.com/code-of-conduct/. Anpario has stated policies on Corporate Social Responsibility,Anti-Bribery and Corruption, Modern Slavery Policyand Whistleblowing Policy that are applicable to all our employees, other workers, suppliers and those providing services to our organisation.

The Company has achieved ISO 14001 standard on Environmental Management Systems accreditation along with a qualified internal audit function.

Anpario published its inaugural Sustainability Report and accompanying video which is available on the website www.anpario.com/about/sustainability/.

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 fitfor 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 businessof the Board, in particular ensuring strong corporate governance policies and values. The role of Chief Executive Officer is concerned with the formulationand implementation of the strategy of the Companyand is responsible for all operational aspects 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 Corporate Responsibility 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 www.anpario.com/aim-26/.

Audit Committee
Details are contained within the Audit Committee Report section of this Annual Report.

Remuneration Committee
Details are contained within the Remuneration Committee Report section of this Annual Report.

Nomination Committee
The Nomination Committee is comprised of the one Non-Executive Director and the Chief Executive Officer and is chaired by Matthew Robinson. 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 ofthe 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;
ensure that on appointment to the Board, non-executive Directors receive a formal letter of appointment setting out clearly what is expectedof 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; and
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.

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.

For the appointment of a Chairman or other Non-Executive, the committee shall produce a job specification, including the time commitmentexpected. A proposed Non-Executive’s other significant commitments should be disclosed to the Board before appointment and any changes to 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.Full due diligence is undertaken by the Company and NOMAD.

New appointments made in the year have gone through the processes as described above and more information can be found in the Board Changes section of the Chairman’s Statement.

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.

The most recent AGM took place on 29 June 2023, full details of which are included on 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	To receive the accounts for the year ended 31 December 2022, together with the reports of the Directors, the strategic report, and the report of the auditors thereon.	Passed
2	To declare a final dividend for the year ended 31 December 2022 of 7.35p per Ordinary share payable on 28 July 2023 to shareholders on the register at close of business on 14 July 2023.	Passed
3	To re-elect Richard Edwards as a Director, who retires by rotation.	Passed
4	To re-elect Matthew Robinson as a Director, who retires by rotation.	Passed
5	To re-appoint BDO LLP as auditors.	Passed
6	To authorise the Directors to agree the auditors’ remuneration.	Passed
7	To grant the Directors’ authority to allot shares or grant rights to subscribe or convert any security into shares in the Company pursuant to Section 551 of the Companies Act 2006.	Passed
8	To authorise the Directors to allot equity securities for cash as if Section 561(1) of the Companies Act 2006 did not apply to any such allotment.	Passed
9	To issue shares for cash, otherwise than in connection with a pre-emptive offer, up to 10% of a company’s issued share capital together with an additional 10%.	Passed
10	To grant to the Company authority to exercise its power to purchase its own shares.	Passed

Corporate governance statement

We believe that good corporate governance serves the long-term interests of shareholders, strengthens the Board and management, and further enhances the trust Anpario has earned from operating with uncompromising integrity and doing business the right way.