Corporate Governance

Syntopix Group plc was listed on AIM on 23 March 2006. The Group recognises the importance of, and is committed to, high standards of Corporate Governance. Syntopix Group plc, as an AIM Company, is not required to comply with the July 2006 Combined Code on Corporate Governance (the Combined Code), although it has adopted the Combined Code principles as set out below.

The Board and its committees
The Board
There are currently six Board members, comprising three Executive Directors and three Non-Executive Directors. The role of the Non-Executive Directors is to bring independent judgement to Board deliberations and decisions. The Chairman of the Board is Tom Bannatyne who oversees Board meetings and fields all concerns regarding the executive management of the Group and the performance of the Executive Directors. A biography of each Director appears in the Directors section. The Directors each have diverse backgrounds and a wide range of experience is available to the Group. The Board meets on a monthly basis to review the Group’s performance and to review and determine strategies for future growth. The Board has delegated specific responsibilities to its committees as set out below.

Each of the Executive Directors is subject to either an executive services agreement with a twelve month notice period or a letter of appointment with between three and twelve month notice periods. Each of the Non-Executive Directors is subject to a letter of appointment with between three and six month notice periods. Syntopix Group plc’s Articles of Association require directors to retire from office and submit themselves for re-election on a one third rotation at each Annual General Meeting.

Board Attendance
Board meetings were held on 11 occasions during the year ended 31 July 2009.  The table below shows attendance at the meetings whether in person or by telephone.  The Company Secretary records attendance at all board meetings including where attendance is by telephone conference.

On the 3 February 2010 Dr Rod Adams stepped down as non-executive Chairman to be replaced by Tom Bannatyne. Dr Helen Shaw stepped down as non-executive Director. Dr Anne Eady stepped down from the board but continues as Scientific Director of Syntopix.

The Committees
Nomination Committee
The Nomination Committee is comprised entirely of Non-Executive Directors. The committee oversees the structure and balance of the Board generally and is responsible for screening and proposing candidates for appointment to the Board.

Remuneration Committee
The Group’s Remuneration Committee also comprises the Non-Executive Directors. The committee is responsible for reviewing the salary and benefits offered to Executive Directors as well as the Group’s non-Director senior management. Specifically, the committee is responsible for determining contract terms, compensatory share options and pension rights. The Board as a whole determines the compensation for all Non-Executive Directors.

Audit Committee
The Audit Committee similarly is comprised of Non-Executive Directors. The Audit Committee supervises the Group’s external auditors, including appointment and compensation. The committee reviews the level of non-audit engagements carried out by the external auditors and performs an assessment of their independence. The Audit Committee is also responsible for ensuring the accuracy of the interim and annual reports, as well as compliance with all applicable standards and regulations.  The external auditors and the Group Finance Director attend each meeting at the request of the committee.

Non audit services
In accordance with its policy on non audit services provided by the company’s auditors, the Audit Committee reviews and approves the award of any such work.  The Audit Committee refers to the Board for approval of any work comprising non audit services where the fees for such work represent more than 25% of the annual audit fee.

Auditor independence and conflicts of interest
The Audit Committee continues to evaluate the independence and objectivity of the external auditors and takes into consideration all United Kingdom professional and regulatory requirements.  Consideration is given to all relationships between the Company, the Group and the audit firm (including in respect of the provision of non audit services).  The Audit Committee considers whether, taken as a whole, and having regard to the views, as appropriate, of the external auditors and management, those relationships appear to impair the auditors’ judgement or independence.  The Audit Committee feels they do not.

Internal audit
The Audit Committee agrees that there should be no internal audit function of the Group at this time considering the size of the Group and the close involvement of senior management over the Group’s accounting systems. However, the Committee will keep this matter under review in the event that circumstances warrant an internal function for the Group in the future.

Control procedures
The Board approves the annual budget each year. This process allows the Board to identify key performance targets and risks expected during the upcoming year. The Board also considers the agreed budget when reviewing trading updates and considering expenditures throughout the year.  Progress against budget is monitored at Group level via monthly reporting of actual financial performance against budget and prior year actual results.

The Group has clear authority limits deriving from the list of matters reserved for decision by the Board including capital expenditure approval procedures.

Relations with shareholders
The Board recognises and understands that it has a fiduciary responsibility to the Group’s shareholders. The Chairman’s Statement and Chief Executive’s Statement include detailed analysis of the Group’s performance and future expectations. The Group’s website (www.syntopix.com) allows shareholders access to Company information, including contact details and the current share price.

The Annual General Meeting will be a platform for the Board to communicate with shareholders and the Board welcomes the attendance and participation of all shareholders.

Going concern
The directors have a reasonable expectation that the Group and the parent company have adequate resources to continue for the foreseeable future in operational existence and have therefore adopted the going concern basis in preparing the accounts.

Approved by the Board

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