This blog gives you the latest topical news plus some informal comments on them from ShareSoc’s directors and other contributors. These are the personal comments of the authors and not necessarily the considered views of ShareSoc. The writers may hold shares in the companies mentioned. You can add your own comments on the blog posts, but note that ShareSoc reserves the right to remove or edit comments where they are inappropriate or defamatory.

Applied Graphene Materials AGM on 18 December and the QCA Code

AIM-listed Applied Graphene Materials(AGM) holds its AGM on 18 December 2018. If you hold shares it might be worth attending and asking some questions.

AGM share price has dropped 90% from £4, 5 years ago, to 38p now and has a market cap of less than £20million and burns £4m of cash every year.

AGM has been through a number of significant changes in the past year – a new CEO was appointed in August 2018 and a new joint CFO and company secretary arrived on October 2018.

AGM’s  auditors PwC resigned in June 2018 and unfortunately there are no details about the resignation in either the annual report or AGM circular.

AGM’s board has no women directors.

There is no vote on remuneration.

Given the above problems, it is disappointing that the Company Secretary is a combined role. For this reason, I recommend shareholders to vote against the CFO’s reelection.

Good governance disclosures and financial reporting support open and effective dialogue between a company’s board and shareholders. Reflecting these concerns, the London Stock Exchange recently amended AIM Rule 26 to require companies to adopt and report on compliance against a recognised corporate governance code. The Board of Applied Graphene Materials has adopted the QCA Code of Corporate Governance and considers the Company to be “fully compliant with all principles contained in the Code”. But is that objectively a good enough standard? The AGM example suggests there may be a problem in how the QCA code is being used.

This article is based on a Minerva report on Applied Graphene Materials see https://www.manifest.co.uk/applied-graphene-considers-being-complaint-qca-code/

By Cliff Weight, Director, ShareSoc (I do not hold shares in AGM)

 

 

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