2.03 The governance statement says in one paragraph that it adopts the 2018 [name] Code and in the next that it has adopted the 2023 Code, and then tests independence against the 2018 Code
UK Company C · an AIM-quoted scientific instruments group · Presentation point
In brief
AIM companies must say which recognised governance code they apply and how they comply. The 2025 statement first says the Group adopts the principal provisions of the Quoted Companies Alliance ([name]) Code published in [date], defined as the [name] guidelines, and then says it has adopted the 2023 Code for 2025. Independence and committee composition are then assessed against the [name] guidelines, that is the 2018 Code, and the Nomination Committee the 2023 Code calls for was set up only from [date], although the 2024 report had said it would [wording masked] 2025. A reader cannot tell which Code governed 2025.
The evidence, as filed
Screenshot withheld to protect the company’s identity: Annual Report 2025, page 46; Annual Report 2024, page 46; Annual Report 2025, page 48; Annual Report 2024, page 48; Annual Report 2025, page 52. Their wording or layout could lead back to the company even with names and figures masked; the evidence list below records what each page shows.
What the report shows, and what the rule requires
| What the annual report shows | What the rule requires |
|---|---|
| What the annual report shows Paragraph 1: adopts the [name] Code published in [date] ('[name] guidelines'); paragraph 2: has adopted the 2023 Code for the year ending [date]; independence and Remuneration Committee composition judged under the '[name] guidelines' | What the rule requires One statement of the Code applied in 2025 (the 2023 [name] Code), how the company complied with it, and each departure with its reason (for example the Nomination Committee only from 2026 and non-independent directors on the Board and Audit Committee) |
The rule
AIM Rules for Companies, Rule 26
Version relied on: AIM Rules for Companies (the exchange’s AIM rulebook), edition in force at the financial year end
details of a recognised corporate governance code that the board of directors of the AIM company has decided to apply, how the AIM company complies with that code, and where it departs from its chosen corporate governance code an explanation of the reasons for doing so
Why it applies here: the 2025 statement was rolled forward without replacing the 2018 references, so it names two Codes for the same year and applies the older one in its assessments.
Why it matters
Shareholders reading the annual report cannot tell which Code the Board applied in 2025, which is the starting point of the statement AIM Rule 26 requires the company to give and keep under annual review.
Exposure
The AIM Rule 26 statement sits on the company's website and the [place] Stock Exchange, not the Companies Act, governs it; no statutory sanction attaches to the annual report wording.
Our workings
the corporate governance statement opens by saying the Group adopts the principal provisions of the [name] Corporate Governance Code published in [date], which it defines as the [name] guidelines, and that the report sets out its approach in accordance with AIM Rule 26. The next paragraph says the 2023 Code applies to years from [date] and that the Group has therefore adopted it for the year ending [date], with transitional flexibility. The statement then assesses director independence and, in the Remuneration Committee report, committee composition under the [name] guidelines, the defined term for the 2018 Code, and says [wording masked] [date] further to the 2023 Code. The 2024 report said the Group would adopt the 2023 Code.
Apart from explaining why long-serving Non-Executive Directors are regarded as acting independently, the report does not set out departures from either Code; the website statement to which it refers is the place AIM Rule 26 requires that detail.
Management’s best defence, and our reply
The company could say the first paragraph is historical context and the second makes clear the 2023 Code applied for 2025, with transitional flexibility the [name] itself allowed. It could add that the detailed Rule 26 statement is on the website, which the report cross-refers to. However, the first sentence is in the present tense, the defined term '[name] guidelines' that the report then uses to judge independence and committee composition is the 2018 Code, and the annual report gives no list of departures from either Code, so the two paragraphs cannot both describe 2025.
The fix
- State once that the 2023 [name] Code applied to 2025, describe compliance principle by principle, list each departure with its reason and expected date of compliance, and replace the '[name] guidelines' references with the 2023 Code.
Evidence relied on
| # | What it shows | Type | Where |
|---|---|---|---|
| 1 | First paragraph: the 2018 [name] Code is adopted and defined as the [name] guidelines | Document | Annual Report 2025, page 46 |
| 2 | Second paragraph: the 2023 Code is adopted for 2025 | Document | Annual Report 2025, page 46 |
| 3 | Independence judged under the [name] guidelines, the defined term for the 2018 Code | Document | Annual Report 2025, page 46 |
| 4 | A 2023 Code arrangement put in place only after the year | Document | Annual Report 2025, page 48 |
| 5 | Committee composition judged under the 2018 Code | Document | Annual Report 2025, page 52 |
| 6 | The 2024 report announced the move to the 2023 Code | Document | Annual Report 2024, page 46 |
| 7 | The 2024 report set the timetable: a Nomination Committee in the second half of 2025 | Document | Annual Report 2024, page 48 |
| 8 | The 2025 report: the Nomination Committee started on [date], with no reference to the earlier timetable | Document | Annual Report 2025, page 48 |
| 9 | Only the Audit and Remuneration Committees operated in 2025 | Document | Annual Report 2025, page 48 |
Prepared by Pramanex from the company’s published annual reports, without the company’s involvement, to show how an annual report review reads. The company is not named, and nothing on this page is a statement about any identifiable company. Observations are not an audit, review or other assurance engagement, and not legal advice. A regulator-style question is a question, not a conclusion.
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