REG - Seed Innovations Ltd - Final Results
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RNS Number : 6435N Seed Innovations Limited 20 June 2025
Seed Innovations Ltd / AIM: SEED / Sector: Closed End Investments
20 June 2025
SEED Innovations Limited
("SEED" or the "Company")
Final Results
& Board Change
SEED Innovations Ltd, the AIM-quoted investment company offering exposure to
disruptive, high-growth, life sciences and technology ventures typically
inaccessible to everyday investors, is pleased to announce its Final Results
for the year ended 31 March 2025. A copy of the Report & Accounts will be
available on the Company's website,
https://seedinnovations.co/investor-centre/financial-reports
(https://seedinnovations.co/investor-centre/financial-reports) . Contained in
the Chairman's Statement are details of Ian Burns' decision to step down as
Chairman and a Director following publication of these Report & Accounts
and current Non-Executive Director Luke Cairns' appointment as Interim
Chairman.
OVERVIEW
· Portfolio value up 14% - investment portfolio increased to £8.3
million (2024: £7.3 million), driven by gains across key holdings.
· Strong cash position maintained - cash and receivables of £3.4
million as at 31 March 2025 provide significant liquidity for future
investments.
· NAV at £11.8 million - reflects increase in portfolio valuation,
payment of a £2 million special dividend and £0.2 million share buyback
during the period.
· Shares trading at a discount - at financial year end, shares were
trading at a c. 74% discount to NAV.
CHAIRMAN'S STATEMENT
In an environment marked by geopolitical uncertainty, constrained capital
markets, and muted investor sentiment, SEED continued its dual strategy,
combining a traditional venture capital model enhanced by a tactical
short-term trading approach. This hybrid structure allowed us to support
ambitious early-stage companies driving breakthrough innovations, while also
capturing value from shorter-term, liquid market opportunities across a
diverse range of sectors.
During the year under review, the majority of our portfolio companies saw
progress, underpinned by key structural themes. Clean Food Group continued its
objective of addressing food security and formed a strategic partnership with
THG Labs, a leader in cosmetics product development and manufacturing, while
Juvenescence solidified its leadership in therapeutics for age-related
diseases, supported by a new strategic alliance. Avextra continued to meet
rising international demand for medical cannabis while navigating margin
pressures, and our smaller holdings, including fintech specialist Inveniam,
also reported strong organic and acquisitive growth.
In tandem, the short-term trading component of our strategy also delivered
positive results. While typically more modest in scale, these gains enhance
liquidity and flexibility across the broader portfolio. We realise that some
shareholders were disappointed at the timing of our exit from AIM-listed
Pantheon Resources plc, however, our decision was guided by prudence, and we
were satisfied with the circa. 35% return received on our initial investment
over a three month period. Markets are inherently unpredictable, and in this
instance, we prioritised securing gains within our liquidity pool.
While the board shares the frustration of some shareholders at the pace of new
investments, we remain as active and engaged as ever with a focus on deploying
capital shrewdly - backing the right teams in the right sectors, with
scalable, capital-efficient solutions. In the current environment, this
disciplined approach is not only prudent but essential and ultimately serves
the best interests of all shareholders. That said, and in line with comments
made in our presentation at the 2024 AGM, if new investments are not made, we
will look at other strategic options.
From a financial perspective, SEED's operating costs have remained stable
despite ongoing inflationary pressures and as at 31 March 2025, the value of
our investment portfolio had risen to £8.3 million (2024: £7.3 million).
Total Net Asset Value ("NAV") stood at £11.8 million (2024: £13.6 million),
reflecting extraordinary expenses during the year, the payment of a Special
Dividend of £2 million and the conclusion of the share buyback programme with
a further c.9 million Ordinary Shares being repurchased for approximately
£0.2 million (inclusive of fees).
As of 31 March 2025, SEED's closing share price was 1.6p, reflecting a 73.8%
discount to the NAV per share of 6.1p, an undervaluation that we believe
significantly misrepresents the business and its future potential.
Looking ahead, the board remains optimistic and view the current disconnect
between our market value and the intrinsic value of our portfolio as a
compelling investment opportunity. While some liquidity events have taken
longer than anticipated due to prevailing market conditions, the board remains
engaged with our investee companies and ready to act opportunistically. That
being said, for me personally, this will be my last statement as Chairman of
SEED Innovations and I have advised my fellow directors of my decision to step
down as Chairman and Director of the Company effective upon the publication of
this Annual Report and Accounts with a view to reducing my commitments. Luke
Cairns, my fellow non-executive director, shall assume the role of Interim
Chairman until a successor is appointed. I wish all my colleagues and any
future successors the best for the future in realizing Seed's full potential
and unlocking its true value.
Finally, on behalf of the entire board, I would like to thank all our
shareholders for their continued trust and support and the directors look
forward to updating you on SEED's progress in the months ahead.
Ian Burns
Non-Executive Chairman
19 June 2025
REPORT OF THE CHIEF EXECUTIVE OFFICER
The past year has been characterised by an exceptionally challenging
macroeconomic backdrop, further complicated by ongoing geopolitical tensions
and regulatory uncertainties that have impacted both sentiment and capital
flows across our core sectors.
Despite these headwinds, SEED has maintained a clear focus on value creation
through strategic investments in innovative businesses that address
significant global challenges, including longevity science, sustainable food
tech, and fintech amongst others.
Each of our portfolio companies has taken strides forward in their respective
fields. For instance, Avextra's medical cannabis research programmes continued
progressing, while Juvenescence's broadened clinical pipeline and strategic
collaborations with international blue-chip companies such as GSK and M42
highlight the growing momentum in longevity therapeutics.
We are also pleased with the progress made by other key holdings. Clean Food
Group continues to gain traction with industry recognition and strategic
partnerships, demonstrating the potential of biotech in tackling food
sustainability. Meanwhile, Little Green Pharma is well positioned to benefit
from regulatory shifts and the growth of medicinal cannabis markets in Europe
and Australia, and Inveniam's integration of AI to digitise private market
data is an exciting development in fintech.
Alongside nurturing our existing portfolio, we are actively exploring new
investment opportunities that align with our thematic focus and investment
criteria. We continue to assess a pipeline of potential investments, seeking
businesses with scalable models, differentiated IP, and strong management
teams. This approach ensures we remain agile in capturing value in emerging
sectors and reinforces our commitment to building a diversified and
future-focused portfolio.
In closing, our strategy, defined by discipline, adaptability, and balance,
has driven a solid performance and established a strong foundation for
long-term value creation. We remain both prudent and opportunistic,
identifying emerging trends, backing science-driven innovation, and managing
our capital with care. While broader market conditions may remain challenging,
we see strong long-term growth potential in the life sciences and technology
sectors and are confident that our portfolio is well-positioned for the
future.
Finally, I want to thank Ian Burns for his work with SEED. As the longest
standing member of the board, he has brought a great deal of wisdom and
provided exceptional stewardship of the board. The board and I wish Ian the
very best going forward.
Ed McDermott
CEO
19 June 2025
INVESTMENT PORTFOLIO REPORT
FOR THE YEAR ENDED 31 MARCH 2025
The table below lists the Company's holdings at 31 March 2025 and 31 March
2024.
Holding Category Valuations at 31 March 2024 Valuations at 31 March 2025 % of Nav
£'000 £'000
Juvenescence Limited Biotech 2,509 2,451 20.8%
Avextra AG Biotech/ 2,740 3,097 26.3%
Cannabis
Clean Food Group Ltd Biotech 1,182 1,719 14.6%
Little Green Pharma Biotech/ 529 443 3.8%
Cannabis
Inveniam Capital Partners, Inc. Fintech 344 498 4.2%
Portage Biotech Inc. Biotech 17 12 0.1%
Oxford BioDynamics Plc Biotech - 119 1.0%
Total Investment Value 7,321 8,339 70.9%
Cash and receivables, net of payables and accruals 6,283 3,426 29.1%
Net Asset Value 13,604 11,765 100.0%
Avextra AG (formally Eurox) ('Avextra')
Avextra is a German-based manufacturer specialising in cannabis-based
medicines, overseeing the entire value chain from cultivation in Portugal to
EU-GMP certified extraction and production in Germany. Recent developments
include the launch of an advanced breeding programme in Portugal to develop
proprietary THC and CBD cultivars, establishing a key intellectual property
pillar.
Having sold 55% of its holding in the previous financial year, SEED's
remaining investment in Avextra was valued at £3.1 million as of 31 March
2025 (2024: £2.7 million).
Juvenescence Ltd ('Juvenescence')
Juvenescence is a clinical-stage drug development company dedicated to
extending healthy human lifespan through the creation of innovative
therapeutics. By targeting the fundamental biological mechanisms of aging, the
company aims to treat and prevent age-related diseases, ultimately enhancing
quality of life.
Juvenescence operates through a diverse portfolio of companies spanning
platform technologies, cell and regenerative therapies, and nutritional
supplements. This portfolio was recently strengthened with the acquisition of
UniverXome Bioengineering, a company developing novel therapeutics focused on
combating the effects of aging.
Among the year's key milestones, Juvenescence's portfolio company Relation
secured two multi-programme strategic collaborations with GSK, while LyGenesis
received regulatory approval to advance its cutting-edge cell therapy designed
to regenerate liver tissue into the next phase of clinical development.
In a major post-period milestone, Juvenescence completed the first close of
its Series B-1 fundraising round in May 2025, raising $76 million. The round
was led by M42, a global, tech-enabled healthcare company based in Abu Dhabi,
and will support the clinical advancement of Juvenescence's therapeutics
portfolio, including key data readouts from its core pipeline. This funding
follows the formation of a broader strategic partnership between Juvenescence
and M42 to co-develop a new generation of AI-enabled therapeutics aimed at
extending healthy lifespan and addressing life-threatening diseases. A second
close of the Series B-1 round is anticipated in Q3 2025.
SEED's holding in Juvenescence was valued at £2.5 million - down £58,000
from 2024 (2024: £2.5 million) due to foreign exchange movements but
supported by the recent fundraising round in which M42 invested in the
company.
Clean Food Group Limited ('CFG')
CFG, a UK-based biotechnology company, is pioneering the development of
sustainable oils and fats by converting food waste into valuable resources.
Its proprietary technology employs non-GMO yeast strains and fermentation
processes to produce alternatives to traditional oils, such as palm oil,
aiming to reduce the environmental impact associated with conventional oil
production.
News released during the year included a strategic partnership with THG Labs,
a leading cosmetics product developer and manufacturer, to provide
sustainable, bio-equivalent alternatives to agriculturally intensive
ingredients, thereby promoting environmental responsibility within the
cosmetics industry.
CFG's profile continues to build and post period end in April 2025, its
Technical Lead & Co-founder Professor Chris Chuck featured on a BBC
programme entitled 'What they really mean for you - ready meals' which is
available to watch on the BBC iPlayer.
We have written up the value of SEED's investment in CFG by £0.5 million to
£1.7 million (2024: £1.2 million), reflecting the developments seen over the
past year and with reference to Series A valuations of comparable companies
and ongoing discussions with CFG management.
Little Green Pharma ('LGP')
Little Green Pharma is an Australian ASX-Listed (Ticker: LGP) company
specialising in the production and distribution of high-quality medicinal
cannabis products. As well as significant progress in its home country,
Australia, LGP's strategic expansion into European markets has been a key
driver of its recent success. Its Danish production facility positions it to
meet the increasing demand in Europe including Germany, where easing
regulatory conditions have led to a notable uptick in demand, and the UK,
where distribution partnerships are generating increasing monthly demand.
Furthermore, as one of only two authorised suppliers in France, LGP is set to
capitalise on a major amendment to the French health security bill, paving the
way for a substantial transformation in how medicinal cannabis is integrated
into the French healthcare system.
Building on this strong foundation, LGP has achieved robust double-digit
year-on-year growth, with cash receipts exceeding A$10 million for the quarter
ended 31 March 2025. The company remains in a healthy financial position, with
net tangible assets substantially exceeding its enterprise value and only
minimal long-term debt. Growing sales momentum in Germany and the UK continues
to validate LGP's strategic direction, and SEED remains confident in its
ability to sustain this positive trajectory.
The value of SEED's investment in LGP has declined by £87,000 to £0.44
million (2024: £0.53 million), primarily due to adverse market price movement
and foreign exchange ('FX') movements. The position is marked to market with
no adjustments applied.
Inveniam Capital Partners ('Inveniam')
Inveniam is a fintech company that provides data solutions to digitise and
automate the middle office for private assets, including real estate, private
equity, infrastructure, and private credit. Its platform enhances transparency
and efficiency in private markets by credentialing, extracting, structuring,
and delivering asset data, enabling real-time access to trusted performance
information.
Activity during the year included a significant investment from G42, a
UAE-based AI firm looking to integrate advanced AI technologies into
Inveniam's data management solutions for private markets. Additionally,
Inveniam acquired Hedgehog Invest Limited to enhance its digital
infrastructure for distributing real-world asset investments to individual
investors, and Factom, a blockchain innovations company.
The value of SEED's investment in Inveniam is up £155,000 to £0.5 million
(2024: £0.3 million) based on the recent fundraising. While this does not yet
represent a full recovery to the valuation held from March 2022 to March 2024,
there is hope of further gains as Inveniam accelerates development following
this substantial fundraise.
Portage Biotech, Inc ('Portage')
Portage (NASDAQ: PRTG) is a clinical-stage immuno-oncology company advancing a
pipeline of novel biologics to transform the immune system's ability to fight
cancer.
The value of SEED's investment in Portage is down £5,000 over the year to
£12k (2024: £17k), reflecting market price movements and adverse FX.
Northern Leaf Ltd ('Northern Leaf')
In recent years, Northern Leaf, a Jersey-based cultivator and processor of
pharmaceutical-grade medical cannabis, has faced a series of setbacks
including a failed IPO and an unsuccessful merger with CBD company Voyager. In
light of ongoing uncertainties around its ability to recover and secure the
necessary funding to continue operations, SEED has maintained its £nil
valuation in Northern Leaf.
Short Term Trades
SEED invested £250k in Pantheon Resources plc in August 2024 and sold its
holding three months later to generate profits of £87,000 - a return of
approximately 35% on its initial investment. It also invested £125k in AIM
quoted Oxford Biodynamics' (OBD) private placing in February 2025. Whilst
share price performance has been varied and mostly negative since, with the
investment showing as down £6k over cost as at 31 March, we remain hopeful of
a modest profit on the position as OBD develops markets for its products and
capital markets improve.
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2025
Year ended Year ended
31 March 31 March
Note 2025 2024
£'000 £'000
Net realised gain on disposal of financial assets at fair value through profit 12 87 1,077
and loss
Net unrealised gain / (loss) on revaluation of financial assets at fair value 12 892 (2,296)
through profit and loss
Total investment gain / (loss) 979 (1,219)
Other income
Bank Interest income 142 114
Total other income 142 114
Expenses
Directors' remuneration and expenses 7 (428) (385)
Provision for loss on receivables 14 - (108)
Legal and professional fees (53) (132)
Other Expenses 8 (156) (207)
Administration fees (40) (44)
Adviser and broker's fees (67) (76)
Total expenses (744) (952)
Net gain / (loss) before losses and gains on foreign currency exchange 377 (2,057)
Net foreign currency exchange loss (10) (63)
Total comprehensive gain / (loss) for the year 367 (2,120)
Gain / (loss) per Ordinary share - basic and diluted 10 0.19p (1.01p)
The Company has no recognised gains or losses other than those included in the
results above.
All the items in the above statement are derived from continuing operations.
STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2025
Note 31 March 2025 31 March 2024
£'000 £'000
Non-current assets
Financial assets at fair value through profit or loss 12 8,339 7,321
8,339 7,321
Current assets
Cash and cash equivalents 3,407 3,884
Other receivables 14 43 2,426
3,450 6,311
Total assets 11,789 13,632
Current liabilities
Payables and accruals 15 (24) (28)
(24) (28)
Net assets 11,765 13,604
Financed by
Share capital 16 1,929 2,020
Other distributable reserve 9,836 11,584
11,765 13,604
Net assets per Ordinary share 17 6.10 6.73
STATEMENT OF CHANGES IN EQUITY
AS AT 31 MARCH 2025
Share Capital Other
distributable reserve Total
£'000 £'000 £'000
Balance as at 1 April 2023 Note 2,127 13,905 16,032
Total comprehensive loss for the year - (2,120) (2,120)
Transactions with shareholders
Ordinary Share buyback (107) (201) (308)
Balance as at 31 March 2024 2,020 11,584 13,604
Balance as at 1 April 2024 2,020 11,584 13,604
Total comprehensive gain for the year - 367 367
Transactions with shareholders
Ordinary Share buyback (91) (117) (208)
Dividend (1,998) (1,998)
Balance as at 31 March 2025 1,929 9,836 11,765
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2025
Year ended Year ended
Notes 31 March 2025 31 March 2024
£'000 £'000
Cash flows from operating activities
Total comprehensive gain / (loss) for the year 367 (2,120)
Adjustments for:
Unrealised (gain) / loss on fair value adjustments on financial assets at 12 (892) 2,296
FVTPL
Realised gain on disposal of financial assets at FVTPL 12 (87) (1,077)
Foreign exchange movement 10 63
Changes in working capital:
Decrease / (Increase) in other receivables and prepayments 14 2,383 (2,376)
Decrease in other payables and accruals 15 (4) (39)
Net cash inflow / (outflow) from operating activities 1,777 (3,253)
Cash flows from investing activities (375) (216)
Acquisition of financial assets at fair value through profit or loss 12
Disposal of financial assets at fair value through profit or loss 12 337 7,694
Net cash (outflow) / inflow from investing activities (38) 7,478
Cash flows from financing activities (208) (308)
Ordinary Share buyback 16
Dividend payment (1,998) -
Net cash outflow from financing activities
(2,206) (308)
Movement in cash and cash equivalents (467) 3,917
3,884 30
Cash and cash equivalents brought forward
Foreign exchange movement (10) (63)
Cash and cash equivalents carried forward 3,407 3,884
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2025
1. General Information
SEED Innovations Limited (the "Company") is an authorised closed-ended
investment scheme. The Company is domiciled and incorporated as a limited
liability company in Guernsey. The registered office of the Company is Suite
8, Upper House, 16-20 Smith Street, St. Peter Port, Guernsey GY1 2JQ.
The Company's objective is to invest in disruptive technologies with
significant intellectual property rights which they are seeking to exploit,
principally within the technology sector (including digital and content
focused businesses), life sciences sectors (including biotech and
pharmaceuticals) and health and wellness sectors. This includes investing in
the cannabinoid sector where there has been increased investor momentum due to
regulation changes, and as companies' profiles grow and investment in the
sector becomes more mainstream. The Company's main geographical focus will be
in North America and Europe though investments may also be considered in other
regions to the extent that the Board considers that valuable opportunities
exist, and positive returns can be achieved. The objective of the Company is
to also provide its investors with exposure to disruptive growth
opportunities, with a mix of liquid, pre-liquid and longer term investments,
which taken together greatly reduces the risk of the portfolio whilst giving
much clearer visibility on potential returns.
The Company's Ordinary Shares are quoted on AIM, a market operated by the
London Stock Exchange and is authorised as a Closed- ended investment scheme
by the Guernsey Financial Services Commission (the "GFSC") under Section 8 of
the Protection of Investors (Bailiwick of Guernsey) Law, 2020 and the
Authorised Closed-Ended Investment Schemes Guidance and Rules 2021.
2. Basis of Preparation
The financial statements of the Company have been prepared in accordance with
IFRS Accounting Standards ("IFRSs") as issued by the International Accounting
Standards Board ("IASB") and applicable legal and regulatory requirements of
the Companies (Guernsey) Law, 2008. The financial statements have been
prepared under the historical cost convention except for financial assets at
fair value through profit or loss.
The preparation of financial statements in conformity with IFRSs requires the
use of certain critical accounting estimates and judgments. The areas
involving a higher degree of judgement or complexity, or areas where
assumptions and estimates are significant to the financial statements, are
disclosed in Note 4.
In the current year, the Company has adopted all the applicable new and
revised standards and interpretations issued by the IASB and the International
Financial Reporting Interpretations Committee ("IFRIC") of the IASB that are
relevant to its operations and effective for annual reporting periods
beginning on or after 1 April 2024. The adoption of the standards and
interpretations has not had a material impact on the content or presentation
of these financial statements; refer below for additional consideration.
(a) Standards and amendments to existing standards effective 1 April 2024
There are no standards, amendments to standards or interpretations that are
effective for the annual period beginning on or after 1 April 2024 that have a
material effect on the financial statements of the Company.
(b) New standards, amendments and interpretations effective after 1 April
2024 and have not been early adopted
A number of new standards, amendments to standards and interpretations are
effective for the annual periods beginning on or after 1 April 2024 and have
not been early adopted in preparing these financial statements. Based on a
preliminary assessment, the adoption of the following new standards is
expected to have a material impact on the Company's financial statements when
they are applied for the first time:
• IFRS 18 Presentation and Disclosure in Financial Statements
3. Material Accounting Policies
The material accounting policies applied in the preparation of these financial
statements are set out below. These policies have been consistently applied to
all the years presented, unless otherwise stated.
a) Investment Income
Investment income is recognised on an accruals basis using the effective
interest method and includes bank interest and interest from debt securities.
Dividend income from investments designated at fair value through profit or
loss is recognised through the Statement of Comprehensive Income within
dividend income when the Company's right to receive payments is established.
b) Expenses
All expenses are accounted for on an accruals basis and, with the exception of
share issue and share buyback costs, are charged through the Statement of
Comprehensive Income in the period in which they are incurred. Costs of
issuing and buying back equity instruments are accounted for as a deduction
from equity, net of any related income tax benefit.
c) Taxation
The Company is exempt from taxation in Guernsey. However, in some
jurisdictions, investment income and capital gains are subject to withholding
tax deducted at the source of the income. The Company presents the withholding
tax separately from the gross investment income, if any, in the Statement of
Comprehensive Income. For the purpose of the Statement of Cash Flows, cash
inflows from financial assets are presented net of withholding taxes when
applicable.
d) Financial instruments
Financial instruments are classified into financial assets and financial
liabilities. Financial assets and financial liabilities are recognised when
the Company becomes a party to the contractual provisions of the financial
instrument.
(i) Recognition and initial measurement
Financial assets at fair value through profit or loss are recognised initially
on the trade date, which is the date on which the Company becomes a party to
the contractual provisions of the instrument. Other financial assets and
liabilities are recognised on the date they are originated.
Financial assets at fair value through profit or loss are initially recognised
at fair value, with transaction costs recognised in profit or loss. Financial
assets or financial liabilities not at fair value through profit or loss are
initially recognised at fair value plus transaction costs that are directly
attributable to its acquisition or issue.
(ii) Classification
Business model assessment
On initial recognition, the Company classifies financial assets as measured at
amortised cost or fair value through profit or loss ("FVTPL").
A financial asset is measured at amortised cost if it meets both of the
following conditions and is not designated as at FVTPL:
• it is held within a business model whose objective is to hold assets to
collect contractual cash flows; and
• the contractual terms give rise on specified dates to cash flows that
are solely payments of principal and interest ("SPPI").
All other financial assets are classified as measured at FVTPL.
In making an assessment of the objective of the business model in which a
financial asset is held, the Company considers all of the relevant information
about how the business is managed, including:
• the documented investment strategy and the execution of this strategy in
practice. This includes whether the investment strategy focuses on earning
contractual interest income, maintaining a particular interest rate profile,
matching the duration of the financial assets to the duration of any related
liabilities or expected cash outflows or realising cash flows through the sale
of the assets;
• how the performance of the portfolio is evaluated and reported to the
Company's management;
• the risks that affect the performance of the business model (and the
financial assets held within that business model) and how those risks are
managed;
• how the Investment Manager is compensated: e.g. whether compensation is
based on the fair value of the assets managed or the contractual cash flows
collected; and
• the frequency, volume and timing of sales of financial assets in prior
periods, the reasons for such sales and expectations about future sales
activity.
Transfers of financial assets to third parties in transactions that do not
qualify for derecognition are not considered sales for this purpose,
consistent with the Company's continuing recognition of the assets.
The Company has determined that it has two business models:
• Held-to-collect business model: this includes cash and cash equivalents
and other receivables. These financial assets are held to collect contractual
cash flows; and
• Other business model: this includes investment in unquoted securities
that were not held for trading purposes. These financial assets are managed
and their performance is evaluated, on a fair value basis.
(iii) Assessment whether contractual cash flows are SPPI
For the purpose of this assessment, 'principal' is defined as the fair value
of the financial asset on initial recognition. 'Interest' is defined as
consideration for the time value of money and for the credit risk associated
with the principal amount outstanding during a particular period of time and
for other basic lending risks and costs (e.g. liquidity risk and
administrative costs), as well as profit margin.
In assessing whether the contractual cash flows are SPPI, the Company
considers the contractual terms of the instrument. This includes assessing
whether the financial asset contains a contractual term that could change the
timing or amount of contractual cash flows such that it would not meet this
condition.
In making the assessment, the Company considers:
• contingent events that would change the amount and timing of cash flows;
• leverage features;
• prepayment and extension terms;
• terms that limit the Company's claim to cash flows from specified assets
(e.g. non-recourse loans); and
• features that modify consideration of the time value of money (e.g.
periodical reset of interest rates).
(iv) Reclassification
Financial assets are not reclassified subsequent to their initial recognition
unless the Company was to change its business model for managing financial
assets, in which case all affected financial assets would be reclassified on
the first day of the first reporting period following the change in the
business model.
(v) Subsequent measurement
Financial assets at fair value through profit or loss
These assets are subsequently measured at fair value. Net gains and losses,
excluding any interest or dividend income and including foreign exchange gains
and losses are recognised in profit or loss in the Statement of Comprehensive
Income.
Financial assets at amortised cost
These assets are subsequently measured at amortised cost using the effective
interest method. Interest income is recognised in 'interest income on
financial assets at fair value through profit or loss', foreign exchange gains
and losses are recognised in the Statement of Comprehensive Income. Any gain
or loss on derecognition is also recognised in profit or loss.
(vi) Financial liabilities - classification and subsequent measurement
Non - derivative financial liabilities
The Company initially recognises debt securities issued and subordinated
liabilities on the date that they are originated. All other financial
liabilities (including liabilities designated as at fair value through profit
or loss) are recognised initially on the trade date, which is the date that
the Company becomes a party to the contractual provisions of the instrument.
The Company derecognises a financial liability when its contractual
obligations are discharged, cancelled or expired.
The Company classifies non-derivative financial liabilities into the other
financial liabilities category. Such financial liabilities are recognised
initially at fair value less any directly attributable transaction costs.
Subsequent to initial recognition, these financial liabilities are measured at
amortised cost using the effective interest method. Other liabilities include
other payables and accruals.
(vii) Fair value measurements
Fair value is the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market participants at
the measurement date. The fair value of financial assets and liabilities
traded in active markets (such as publicly traded derivatives and trading
securities) are based on quoted market prices at the close of trading on the
reporting date. The Company utilises the last traded market price for both
financial assets and financial liabilities where the last traded price falls
within the bid-ask spread. In circumstances where the last traded price is not
within the bid-ask spread, management will determine the point within the
bid-ask spread that is most representative of fair value.
If a significant movement in fair value occurs subsequent to the close of
trading up to midnight on the year end date, valuation techniques will be
applied to determine the fair value. A significant event is any event that
occurs after the last market price for a security, close of market or close of
the foreign exchange, but before the Company's valuation time that materially
affects the integrity of the closing prices for any security, instrument,
currency or securities affected by that event so that they cannot be
considered 'readily available' market quotations.
The fair value of financial assets and liabilities that are not traded in an
active market is determined using valuation techniques in accordance with the
International Private Equity and Venture Capital Valuation (IPEV) Guidelines.
The Company uses a variety of methods and makes assumptions that are based on
market conditions existing at each reporting date. Valuation techniques used
include the use of comparable recent ordinary transactions between market
participants, reference to other instruments that are substantially the same,
discounted cash flow analysis, option pricing models and other valuation
techniques commonly used by market participants making the maximum use of
market inputs and relying as little as possible on entity-specific inputs.
Transfers between levels of the fair value hierarchy
Where transfers between levels of the fair value hierarchy occur, they are
deemed to have occurred at the beginning of the reporting period.
(viii) Amortised cost measurement
The amortised cost of a financial asset or financial liability is the amount
at which the financial asset or financial liability is measured at initial
recognition, minus principal repayments, plus or minus the cumulative
amortisation using the effective interest method of any difference between the
initial amount recognised and the maturity amount and for financial assets
adjusted for any loss allowance.
The effective interest method is a method of calculating the amortised cost of
a financial asset or a financial liability and of allocating the interest
income or interest expense over the relevant year. The effective interest rate
is the rate that exactly discounts estimated future cash payments or receipts
through the expected life of the financial instrument or, when appropriate, a
shorter period to the net carrying amount of the financial asset or financial
liability at initial recognition. When calculating the effective interest
rate, the Company estimates the future cash flows considering all contractual
terms of the financial instruments but not the future credit losses.
(ix) Impairment
The Company recognises loss allowances for Expected Credit Losses ("ECL") on
financial assets measured at amortised cost.
The Company measures loss allowances at an amount equal to lifetime ECLs,
except for the following, which are measured at 12-month ECLs:
• Financial assets that are determined to have low credit risk at the
reporting date; and
• Other financial assets and bank balances for which credit risk (i.e. the
risk of default occurring over the expected life of the asset) has not
increased significantly since initial recognition.
When determining whether the credit risk of a financial asset has increased
significantly since initial recognition and when estimating ECLs, the Company
considers reasonable and supportable information that is relevant and
available without undue cost or effort. This includes both quantitative and
qualitative information and analysis, based on the Company's historical
experience and informed credit assessment and including forward-looking
information.
The Company assumes that the credit risk on a financial asset has increased
significantly if it is more than 30 days past due. The Company considers a
financial asset to be in default:
• when the borrower is unlikely to pay its credit obligations to the
Company in full, without recourse by the Company to actions such as realising
assets (if any is held); or
• the financial asset is more than 90 days past due.
Lifetime ECLs are the ECLs that result from all possible default events over
the expected life of a financial instrument. 12-month ECLs are the portion of
ECLs that result from default events that are possible within the 12 months
after the reporting date (or a shorter period if the expected life of the
instrument is less than 12 months).
The maximum period considered when estimating ECLs is the maximum contractual
period over which the Company is exposed to credit risk.
Measurement of ECLs
ECLs are a probability-weighted estimate of credit losses. Credit losses are
measured as the present value of all cash shortfalls (i.e. the difference
between the cash flows due to the entity in accordance with the contract and
the cash flows that the Company expects to receive).
ECLs are discounted at the effective interest rate of the financial asset.
Credit-impaired financial assets
At each reporting date, the Company assesses whether financial assets carried
at amortised cost are credit-impaired. A financial asset is 'credit-impaired'
when one or more events that have a detrimental impact on the estimated future
cash flows of the financial asset have occurred.
Evidence that a financial asset is credit-impaired includes the following
observable data:
• significant financial difficulty of the borrower or issuer;
• it is probable that the borrower will enter bankruptcy or other
financial reorganisation;
• the underlying project is put on hold; and
• breach of contract such as a default or being more than 90 days past
due.
Presentation of allowance for ECLs in the statement of financial position
Loss allowances for financial assets measured at amortised cost are deducted
from the gross carrying amount of the assets. Impairment losses including
reversals of impairment losses and gains are disclosed separately in the
Statement of Comprehensive Income.
Write-off
The gross carrying amount of a financial asset is written off when the Company
has no reasonable expectations of recovering a financial asset in its entirety
or a portion thereof.
(x) Derecognition
A financial asset (or, where applicable a part of a financial asset or part of
a group of similar financial assets) is derecognised where:
• The rights to receive cash flows from the asset have expired; or
• The Company has transferred its rights to receive cash flows from the
asset or has assumed an obligation to pay the received cash flows in full
without material delay to a third party under a 'pass-through' arrangement;
and
• Either (a) the Company has transferred substantially all the risks and
rewards of the asset; or
(b) the Company has neither transferred nor retained substantially all the
risks and rewards of the asset but has transferred control of the asset.
When the Company has transferred its rights to receive cash flows from an
asset or has entered into a pass-through arrangement and has neither
transferred nor retained substantially all the risks and rewards of the asset
nor transferred control of the asset, the asset is recognised to the extent of
the Company's continuing involvement in the asset. The Company derecognises a
financial liability when the obligation under the liability is discharged,
cancelled or has expired.
(xi) Offsetting
Financial assets and financial liabilities are offset and the net amount
presented in the Statement of Financial Position when, and only when, the
Company has a legal right to offset the amounts and it intends either to
settle on a net basis or to realise the asset and settle the liability
simultaneously.
Income and expenses are presented on a net basis for gains and losses from
financial instruments at fair value through profit or loss and foreign
exchange gains and losses.
e) Cash and cash equivalents
Cash comprises of cash at bank. Cash equivalents are short-term highly liquid
investments that are readily convertible to known amounts of cash, are subject
to an insignificant risk of changes in value and are held for the purpose of
meeting short-term cash commitments rather than for investment or other
purposes.
f) Foreign currency translation
Functional and presentation currency
The Company's Ordinary Shares are denominated in Sterling and are traded on
AIM in Sterling. The primary activity of the Company is detailed in the
Investing Policy on page 9. The performance of the Company is measured and
reported to the investors in Sterling and the majority of the expenses
incurred by the Company are in Sterling. Consequently, the Board of Directors
considers that Sterling is the currency that most faithfully represents the
effects of the underlying transactions, events and conditions. The financial
statements are presented in Sterling, which is the Company's functional and
presentation currency. All amounts are rounded to the nearest thousand.
Transactions and balances
Foreign currency transactions are translated into the functional currency
using rates approximating to the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the settlement
of such transactions and from the translation at year end exchange rates of
monetary assets and liabilities denominated in foreign currencies are
recognised through the Statement of Comprehensive Income. Translation
differences on non-monetary financial assets and liabilities, such as
financial assets designated at fair value through profit or loss, are
recognised through the Statement of Comprehensive Income within the net
unrealised change in fair value of investments.
g) Net assets per share
The net assets per Ordinary Share disclosed on the face of the Statement of
Financial Position is calculated by dividing the net assets of the Company as
at the year-end by the number of Ordinary Shares in issue at the year end.
h) Earnings/(Loss) per share
Basic earnings/(loss) per share
Basic earnings/(loss) per share is calculated by dividing:
• the profit or loss attributable to owners of the Company, excluding any
costs of servicing equity other than ordinary shares;
• by the weighted average number of ordinary shares outstanding during the
financial year, adjusted for bonus elements, if any, in ordinary shares issued
during the year and excluding treasury shares.
Diluted earnings/(loss) per share
Diluted earnings/(loss) per share adjusts the figures used in the
determination of basic earnings/(loss) per share to take into account:
• the after tax effect of interest and other financing costs associated
with dilutive potential ordinary shares; and
• the weighted average number of additional ordinary shares that would
have been outstanding assuming the conversion of all dilutive potential
ordinary shares.
i) Transaction costs
Transaction costs are the incremental costs that are directly attributable to
the acquisition, issue or disposal of a financial asset or financial
liability. An incremental cost is one that would not have been incurred if the
entity had not acquired, issued or disposed of the financial instrument.
Transaction costs are legal and professional fees incurred to structure a deal
to acquire the investments designated as financial assets at fair value
through profit or loss. They include the upfront fees and commissions paid to
agents, advisers, brokers and dealers and due diligence fees.
j) Equity
Share Capital
Ordinary shares are classified as equity. Where the Company purchases its own
equity share (e.g. as the result of a share buyback), the consideration paid,
including any directly attributable incremental costs, is deducted from equity
attributable to the owners of the Company as Treasury Shares until the shares
are cancelled or reissued. The Company will present any Treasury Shares
acquired in the Statement of Changes in Equity as a deduction from Ordinary
Shares.
Employee Share Option Reserve
Employee share options are valued when they are granted using the current
accounting standard's fair value technique. However, the value of the options
may be calculated at the conclusion of the vesting period or when they are
exercised.
Other Distributable Reserve
The Company's cumulative profits and losses are known as distributable
reserves. From time to time, the Company may transfer any sum that it
considers to be realised to the distributable reserve (for example, if
ordinary shares are sold for more than their par value, the excess will be
moved to other distributable reserves).
k) Going concern
After making reasonable enquiries, and assessing all data relating to the
Company's liquidity, the Directors have a reasonable expectation that the
Company has adequate resources to continue in operational existence for the
foreseeable future and do not consider there to be any threat to the going
concern status of the Company. For this reason, they continue to adopt the
going concern basis in preparing the financial statements.
The Directors note that the Company has sufficient cash and cash equivalent
resources to meet its obligations for at least one year after the approval of
these financial statements.
4. Critical Accounting Estimates and Judgements
The preparation of financial statements in conformity with IFRSs requires the
Board to make judgements, estimates and assumptions that affect the
application of accounting policies and the reported amounts of assets and
liabilities, income and expenses. The estimates and associated assumptions are
based on historical experience and various other factors that are believed to
be reasonable under the circumstances, the results of which form the basis of
making the judgements about carrying values of assets and liabilities that are
not readily apparent from other sources. Actual results may differ from these
estimates.
The Board makes estimates and assumptions concerning the future. The resulting
accounting estimates will, by definition, seldom equal the related actual
results.
The Directors believe that the underlying assumptions are appropriate and that
the financial statements are fairly presented. Estimates and assumptions that
have a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year are outlined
below:
Judgements
Assessment as an investment entity
In determining the Company meeting the definition of an investment entity in
accordance with IFRS 10, it has considered the following:
• the Company has raised the commitments from a number of investors in
order to raise capital to invest and to provide investor management services
with respect to these private equity investments;
• the Company intends to generate capital and income returns from its
investments which will, in turn, be distributed to the investors; and
• the Company evaluates its investment performance on a fair value basis,
in accordance with the policies set out in these financial statements.
Although the Company met all three defining criteria, management has also
assessed the business purpose of the Company, the investment strategies for
the private equity investments, the nature of any earnings from the private
equity investments and the fair value model. Management made this assessment
in order to determine whether any additional areas of judgement exist with
respect to the typical characteristics of an investment entity versus those of
the Company. Management have therefore concluded that from the assessments
made, the Company meets the criteria of an investment entity within IFRS 10.
Part of the assessment in relation to meeting the business purpose aspects of
the IFRS 10 criteria also requires consideration of exit strategies. Given
that the Company does not intend to hold investments indefinitely, management
have determined that the Company's investment plans support its business
purpose as an investment entity.
The Board has also concluded that the Company meets the additional
characteristics of an investment entity, in that: it holds more than one
investment; the investments will predominantly be in the form of equities,
derivatives and similar securities; it has more than one investor and the
majority of its investors are not related parties.
Estimates and assumptions
Fair value of securities not quoted in an active market.
The Company may value positions by using its own models or commissioning
valuation reports from professional third-party valuers. The models used in
either case are based on valuation methods and techniques generally recognised
as standard within the industry and in accordance with International Private
Equity and Venture Capital Valuation (IPEV) Guidelines. The inputs into these
models are primarily revenue or earnings multiples and discounted cash flows.
The inputs in the revenue or earnings multiple models include observable data,
such as the earnings multiples of comparable companies to the relevant
portfolio company, and unobservable data, such as forecast earnings for the
portfolio company. In discounted cash flow models, unobservable inputs are the
projected cash flows of the relevant portfolio company and the risk premium
for liquidity and credit risk that are incorporated into the discount rate. In
some instances, the cost of an investment is the best measure of fair value in
the absence of further information. Models are calibrated by back-testing to
actual results/exit prices achieved to ensure that outputs are reliable, where
possible.
Models use observable data, to the extent practicable. However, areas such as
credit risk (both own and counterparty), volatilities and correlations require
management to make estimates. Changes in assumptions about these factors could
affect the reported fair value of financial instruments. The sensitivity to
unobservable inputs is based on management's expectation of reasonable
possible shifts in these inputs, taking into consideration historical
volatility and estimations of future market movements.
The determination of what constitutes 'observable' requires significant
judgement by the Company. The Company considers observable data to be market
data that is readily available, regularly distributed or updated, reliable and
verifiable, not proprietary, and provided by independent sources that are
actively involved in the relevant market.
5. Segmental Information
The Chief Operating Decision Maker, which is the Board, is of the opinion that
the Company is engaged in a single segment of business, through its portfolio
of investments in early stage businesses, with the aim of providing capital
appreciation. The financial information used by the Chief Operating Decision
Maker to manage the Company presents the business as a single segment.
Segment information is measured on the same basis as that used in the
preparation of the Company's Financial Statements.
The Company receives no revenues from external customers. Other than its
investments, the Company holds no non-current assets in any geographical area
other than Guernsey.
6. Administration Fees
Obsidian Fund Services Limited ("Obsidian") was the Administrator of the
Company during the year and was entitled to an administration fee of £40,000
per annum with an additional fee of £500 per Board or Committee meeting above
the eight meetings covered by the administration fee.
In the year ended 31 March 2025, a total of £40,111 (2024: £43,628) was
charged to the Statement of Comprehensive Income for Obsidian, of which
£3,333 was payable at the financial reporting date (2024: £4,033).
The Administrator is also entitled to recover by way of reimbursement from the
Company, transaction costs associated with the provision of specific services
and reasonable out-of-pocket expenses incurred in the performance of its
services to include any of the Administrator's approved services.
7. Directors' Remuneration
The Board agreed the following compensation packages for the Directors of the
Company.
• Ian Burns is entitled to an annual remuneration of £36,000 (2024:
£36,000).
• Ed McDermott is entitled to an annual remuneration of £161,321 (2024:
£161,063).
• Lance De Jersey is entitled to an annual remuneration of £106,000
(2024: £106,000).
• Luke Cairns is entitled to an annual remuneration of £36,000 (2024:
£36,000).
• Alfredo Pascual is entitled to an annual remuneration of €106,000
(£89,038) (2024: €106,000).
Additional information on Directors' Remuneration is noted in related parties.
Refer to note 18.
Year ended 31 March 2025
Directors' Remuneration
£'000
Ian Burns 36
Ed McDermott 161
Lance De Jersey 106
Luke Cairns 36
Alfredo Pascual 89
428
Year ended 31 March 2024
Directors' Remuneration
£'000
Ian Burns 36
Ed McDermott 161
Lance De Jersey 106
Luke Cairns 36
Alfredo Pascual 46
385
8. Other Expenses
Year ended Year ended
31-Mar-25 31-Mar-24
£'000 £'000
Regulatory and listing fees 29 26
Directors' and Officers' liability insurance 22 37
IT Costs 5 6
Consultancy fees - 36
Salaries and Wages - 26
PR costs 61 63
Other expenses 39 13
156 207
9. Tax effects of other comprehensive income
The Income Tax Authority of Guernsey has granted the Company exemption from
Guernsey income tax under the Income Tax (Exempt Bodies) (Guernsey)
(Amendment) Ordinance, 2012 and the income of the Company may be distributed
or accumulated without deduction of Guernsey income tax. Exemption under the
above mentioned Ordinance entails payment by the Company of an annual fee of
£1,600 for each year in which the exemption is claimed. It should be noted,
however, that interest and dividend income accruing from the Company's
investments may be subject to withholding tax in the country of origin.
There were no tax effects arising from the other comprehensive income
disclosed in the Statement of Comprehensive Income (2024: £Nil).
10. Earnings / (loss) per Ordinary Share
The gain per Ordinary Share of 0.19p (2024: loss per Ordinary Share of 1.01p) is based on the gain for the year of £366,808 (2024: loss £2,119,521) and on a weighted average number of 193,815,598 Ordinary Shares in issue during the year (2024: 208,840,402 Ordinary Shares).
There are no dilutive effects on earnings per Ordinary Shares as all issued Options and Warrants expired without exercise during the prior year.
11. Dividends
On 16 April 2024, the Company declared a special dividend of 1.0 pence
(£0.01) per Ordinary Share (2024: £Nil). The Directors do not propose a
final dividend for the year ended 31 March 2025 (2024: £Nil).
12. Financial Assets designated at fair value through profit or loss
31 March 2025 31 March 2024
£'000 £'000
Fair value of investments brought forward 7,322 16,019
Purchases during the year 375 216
Proceeds from disposals during the year (337) (7,694)
Realised gains / (losses) on disposals during the year 87 1,077
Net unrealised gain / (loss) on revaluation of investments 892 (2,296)
8,339 7,322
13. Fair value of financial instruments
IFRS 13 requires the Company to classify financial instruments at fair value
using a fair value hierarchy that reflects the significance of the inputs used
in making the measurement. The fair value hierarchy has the following levels:
• Level 1 - Quoted prices (unadjusted) in active markets for identical
assets or liabilities that the Company can access at the year-end date;
• Level 2 - Those involving inputs other than quoted prices included
within Level 1 that are observable for the asset or liability, either directly
(as prices) or indirectly (derived from prices); and
• Level 3 - Those with inputs for the asset or liability that are not based
on observable market data (unobservable inputs).
The level in the fair value hierarchy within which the fair value measurement
is categorised in its entirety is determined on the basis of the lowest level
input that is significant to the fair value measurement in its entirety. For
this purpose, the significance of an input is assessed against the fair value
measurement in its entirety.
If a fair value measurement uses observable inputs that require significant
adjustment based on unobservable inputs, that measurement is a Level 3
measurement. Assessing the significance of a particular input to the fair
value measurement in its entirety requires judgement, considering factors
specific to the asset or liability.
The determination of what constitutes 'observable' requires judgement by the
Company. The Company considers observable data to be that market data that is
readily available, regularly distributed or updated, reliable and verifiable,
not proprietary, and provided by independent sources that are actively
involved in the relevant market.
The valuations used to determine fair values are validated and periodically
reviewed by experienced personnel, in most cases this validation and review is
undertaken by members of the Board, however professional third-party valuation
firms are used for some valuations and the Company also has access to a
network of industry experts by virtue of the personal networks of the
directors and substantial shareholders. The valuations prepared by the Company
or received from third parties are in accordance with the IPEV Guidelines. The
valuations, when relevant, are based on a mixture of:
• Market approach (utilising EBITDA or Revenue multiples, industry value
benchmarks and available market prices approaches);
• Income approach (utilising Discounted Cash Flow, Replacement Cost and Net
Asset approaches);
• Price of a recent transaction when transaction price/cost is considered
indicative of fair value; and
• Proposed sale price.
As at 31 March 2025, 3 investments were valued as Level 1 investments within
the fair value hierarchy, with the value being taken from the published bid
price available as at that date (2024: 2 investments).
The remaining four investments were included within the Level 3 category and
subject to a Level 3 valuation approach.
Where investments are considered to be Level 3 investments for valuation
purposes, it is required under IFRS 13 that information be provided about the
significant unobservable inputs used in the fair value measurement. In the
case of the Company a balance is necessary in providing commentary on such
inputs, whilst at the same time not disclosing information about these private
companies which they have indicated cannot be published (primarily for
competitive reasons). The table below provides a summary of the valuations
subject to unobservable inputs across the Company's investment portfolio,
split by valuation methodology and an indicative aggregate value of the effect
of either a more positive or negative valuation approach, without publication
of specific metrics which could be identified as relating to any one investee
company.
Valuation Basis Aggregate Range (input) Sensitivity Effect on fair value
Valuation
£'000 £'000 £'000
Price of recent transaction 7,764 n/a n/a -25% / 25% (1,941) 1,941
(deal price)
Quoted price 575
Total 8,339
A reconciliation of the opening and closing balances of assets designated at
fair value through profit or loss classified as Level 1 is shown below:
31 March 2025 31 March 2024
£'000 £'000
Fair value of investments brought forward 548 811
Purchases during the year 375 -
Disposals proceeds during the year (337) -
Realised gains on disposals during the year 87 -
Net unrealised change in fair value (98) (263)
Fair value of investments carried forward 575 548
A reconciliation of the opening and closing balances of assets designated at
fair value through profit or loss classified as Level 3 is shown below:
31 March 2025 31 March 2024
£'000 £'000
Fair value of investments brought forward 6,773 15,208
Purchases during the year - 216
Disposals proceeds during the year - (7,694)
Realised gains/(losses) on disposals during the year - 1,077
Net unrealised change in fair value 990 (2,034)
Fair value of investments carried forward 7,764 6,773
31 March 2025 31 March 2024
£'000 £'000
Level 1 575 548
Level 2 - -
Level 3 7,764 6,773
Total 8,339 7,321
14. Other receivables
31 March 2025 31 March 2024
£'000 £'000
Prepaid expenses 43 43
Other receivables - 2,383
43 2,426
An amount for which the Company had previously made a provision at a default
rate of 100% for £108,314 (2024: £108,314) for an outstanding receivable due
from a loan note issued to SWB has been written off as there was no chance to
recover.
15. Payables and accruals
31 March 2025 31 March 2024
£'000 £'000
Administration fees 3 4
Audit fees 17 18
Legal & professional fees 4 3
Other accrued expenses - 3
24 28
16. Share Capital, Warrants, Options, Treasury shares and Other distributable reserves
Authorised: 31 March 2025 31 March 2024
1,910,000,000 Ordinary Shares of 1p (2024: 1,910,000,000 Ordinary Shares) £'000 £'000
19,100 19,100
100,000,000 Deferred Shares of 0.9p 900 900
(2024: 100,000,000 Deferred Shares)
20,000 20,000
Allotted, called up and fully paid:
192,949,895 Ordinary Shares of 1p (2024: (i) 1,929 2,020
202,032,895 Ordinary Shares)
Nil Deferred Shares of 0.9p (2024: Nil)
(ii) - -
Treasury Shares:
22,269,946 Treasury Shares of 1p (iii) 223 132
(2024: 13,186,946)
(i) Ordinary Shares
During the year ended 31 March 2025 9,083,000 Ordinary shares were bought by
the Company as part of a share buyback programme (31 March 2024: 10,714,500).
(ii) Deferred Shares
There were no changes to the number of deferred shares during the year.
(iii) Shares held in Treasury
As part of a share buyback programme, share repurchases in the year ended 31
March 2025 saw the number of Ordinary Shares held as Treasury shares increase
to 22,269,946 (31 March 2024: 13,186,946).
(iv) Directors' Authority to allot shares
The Directors are generally and unconditionally authorised to exercise all the
powers of the Company to allot relevant securities. The Directors may
determine up to a maximum aggregate nominal amount of 50% of the issued share
capital during the period until the following Annual General Meeting. The
Company (Guernsey) Law, 2008 (as amended) does not limit the power of
Directors to issue shares or impose any pre-emption rights on the issue of new
shares.
(v) Other Distributable Reserves
31 March 2025 31 March 2024
£'000 £'000
Opening balance as at 1 April 11,584 13,905
Total comprehensive gain/(loss) for the year 367 (2,120)
Ordinary Share buyback (117) (201)
Dividend (1,998) -
Closing Balance as at 31 March 9,836 11,584
17. Net Assets per Ordinary Share
Basic and diluted
The basic and diluted net asset value per Ordinary Share is based on the net
assets attributable to equity shareholders of £11,765,000 (2024:
£13,604,000) and on 192,949,895 Ordinary Shares (2024: 202,032,895 Ordinary
Shares) in issue at the end of the year. There was no dilutive effect as at 31
March 2025.
18. Related Parties
(i) Directors' remuneration
The Directors' remuneration for the year ended 31 March 2025 is disclosed in
note 7. The Directors consider that there is no immediate or ultimate
controlling party.
Ian Burns
Mr Burns is the legal and beneficial owner of Smoke Rise Holdings Limited,
which held 1,674,024 (0.87%) Ordinary Shares (2024: 1,674,024) in the Company
at 31 March 2025 and the date of signing this report.
Mr Burns received an annual remuneration of £36,000 (2024: £36,000) with no
discretionary bonus for the year (2024: Nil). There was no payable at the
financial reporting date (2024: nil).
Ed McDermott
Mr McDermott held 6,130,000 (3.18%) Ordinary Shares (2024: 4,680,000) in the
Company at 31 March 2025 and at the date of signing this report.
Mr McDermott is entitled to an annual remuneration of £160,000 effective 1
April 2021.
Mr McDermott received annual remuneration of £161,321 (2024: £161,063) which
included pension contributions of 1.1% of salary. There was no discretionary
bonus (2024: Nil). There was no payable at the financial reporting date (2024:
Nil).
Mr McDermott is Co-chairman of Clean Food Group as disclosed in the Investment
Portfolio Report on page 7 of the Annual Report & Accounts.
Lance De Jersey
Mr De Jersey, Finance Director of the Company held 1,400,000 (0.73%) Ordinary
Shares (2024: 400,000) in the Company as at 31 March 2025 and at the date of
signing of this report.
Mr De Jersey received annual remuneration of £106,000 (2024: £106,000).
There was no discretionary bonus (2024: Nil). There was no payable at the
financial reporting date of (2024: nil).
Luke Cairns
Mr Cairns, Non-Executive Director of the Company is entitled to annual
remuneration of £36,000 per annum, effective from the date of his appointment
on 3 January 2020.
Mr Cairns received annual remuneration of £36,000 (2024: £36,000) with no
discretionary bonus (2024: Nil). There was no payable at the financial
reporting date (2024: nil).
Alfredo Pascual
Mr Pascual, Executive Director of the Company is entitled to annual
remuneration of €106,000 (£89,038) per annum, effective from the date of
his appointment on 1 September 2023.
Mr Pascual received annual remuneration of £89,038 (2024: £71,781) with no
discretionary bonus (2024: Nil). There was no payable at the financial
reporting date (2024: nil).
(ii) Administrator of the Company
Obsidian Fund Services Limited ("Obsidian") was the Administrator of the
Company during the year and was entitled to an administration fee of £40,000
per annum with an additional fee of £500 per Board or Committee meeting above
the eight meetings covered by the administration fee.
In the year ended 31 March 2025, a total of £40,111 (2024: £43,628) was
charged to the Statement of Comprehensive Income for Obsidian, of which
£3,333 was payable at the financial reporting date (2024: £4,033).
(iii) Digital Marketing
During the year the Company contracted with G-Force Media, a digital content
creator and digital marketer. Ed McDermott, a Director of the Company, is a
one third shareholder of G-Force Media. During the year the Company paid
£24,000 (2024: £12,000) to G-Force Media.
19. Financial Risk Management
The main risks arising from the Company's financial instruments are credit
risk, liquidity risk and market risk, and are set out below, together with the
policies currently applied by the Board for their management. Market risk
comprises three types of financial risk, being interest rate risk, currency
risk and other price risk, being the risk that the fair value or future cash
flows will fluctuate because of changes in market prices other than from
interest rate and currency risks.
Treasury policies
The objective of the Company's treasury policies is to manage the Company's
financial risk, secure cost effective funding for the Company's operations and
to minimise the adverse effects of fluctuations in the financial markets on
the value of the Company's financial assets and liabilities on reported
profitability and on cash flows of the Company.
The Company finances its activities with cash, short-term deposits with
maturities of three months or less and market traded securities. Other
financial assets and liabilities, such as receivables and payables, arise
directly from the Company's operating activities. Derivative instruments may
be used to change the economic characteristics of financial instruments in
accordance with the Company's treasury policies.
The financial assets and liabilities of the Company were:
31 March 2025 31 March 2024
£'000 £'000
Financial assets at fair value through profit or loss
Investments 8,339 7,321
Financial assets at amortised cost
Other receivables - 2,383
Cash and cash equivalents 3,407 3,885
3,407 6,268
Financial liabilities at amortised cost
Other payables 24 28
Prepayments of £42,556 (2024: £42,900) have been excluded from financial
assets.
Credit risk
The Company takes on exposure to credit risk, which is the risk that one party
will cause a financial loss for the other party by failing to discharge an
obligation.
The Company's credit risk is primarily attributable to its cash and cash
equivalents, other receivables, short term loans and convertible loan notes to
investees. In order to mitigate credit risk, the Company seeks to trade only
with reputable counterparties that the management believe to be creditworthy.
The credit risk on cash and cash equivalents is limited by using banks with
high credit ratings assigned by international credit-rating agencies. At the
year end, an amount of cash and cash equivalents of £3,343,579 was placed
with HSBC Bank plc (2024: £3,728,206). The Moody's counterparty risk rating
for HSBC Bank plc was A3 as at 31 March 2025.
During the year ended 31 March 2025 the Company wrote off convertible loan
notes with a face value of £150,000 and a carrying amount of £Nil (2024:
Nil).
The Company's activities may give rise to settlement risk. 'Settlement risk'
is the risk of loss due to the failure of an entity to honour its obligations
to deliver cash, securities or other assets as contractually agreed. For the
majority of transactions, the Company mitigates this risk by conducting
settlements through a broker to ensure that a trade is settled only when both
parties have fulfilled their contractual settlement obligations. Settlement
limits form part of the credit approval and limit monitoring processes by the
Board.
The investment in these debt instruments is considered to be of an equal risk
to the equity investments held in other Level 3 investments as disclosed in
Note 13.
Liquidity risk
Liquidity risk is the risk that the Company may not be able to generate
sufficient cash resources to settle its obligations in full as they fall due
or can only do so on terms that are materially disadvantageous. The Company
invests in private equities, which, by their very nature, are illiquid. The
Company incurs a range of fixed expenses for which it can budget.
As such it can appropriately plan as to how to maintain a sufficient cash
balances to meet its working capital requirements.
Should it be identified that additional cash resources are required, the
Company would propose to issue further equity to the market or to sell part of
the investment(s) held in market traded securities.
The contractual undiscounted cash flows of the Company's financial
liabilities, which are equal to the fair value of the Company's financial
liabilities, comprise of payable within one year to the sum of £24,000 (2024:
£28,000). The Company has no contractual commitment to invest further in any
of its existing investments.
Market risk
(i) Price risk
The Company's private equity investments are susceptible to price risk arising
from uncertainties about future values of the private equity investments or
derivative financial instruments. This price risk is the risk that the fair
value or future cash flows will fluctuate because of changes in market prices,
whether those changes are caused by factors specific to the individual
investment or financial instrument or its holder or factors affecting all
similar financial instruments or investments traded in the market, if any.
Investments that are exposed to price risk are disclosed under level 1 in note
13.
Given the levels of market volatility in the current year, the Directors
consider 30% (2024: 30%) best represents the margin of price risk associated
with the Company risk. A 30% (2024: 30%) increase/decrease in the fair value
of investments would result in a £172,168 (2024: £163,875) increase/decrease
in the net asset value.
ii) Currency risk
The Company regularly holds assets (both monetary and non-monetary)
denominated in currencies other than the functional currency (Sterling). It is
therefore exposed to currency risk, as the value of the financial instruments
denominated in other currencies will fluctuate due to changes in exchange
rates.
Foreign currency risk, as defined in IFRS 7, arises as the values of
recognised monetary assets and monetary liabilities denominated in other
currencies fluctuate due to changes in foreign exchange rates. IFRS 7
considers the foreign exchange exposure relating to non- monetary assets and
liabilities to be a component of market price risk, not foreign currency risk.
The Company monitors the exposure on all foreign-currency-denominated assets
and liabilities.
The Company monitors its exposure to foreign exchange rates and, where
exposure is considered significant, appropriate measures would be adopted to
minimise these exposures. The proportion of the net financial assets of the
Company were denominated in currencies other than Sterling as follows:
31 March 2025 31 March 2024
£'000 £'000
US Dollar
Cash and cash equivalents 4 5
Financial assets at fair value through profit and loss 2,962 2,870
Euro
Cash and cash equivalents 23 2,582
Financial assets at fair value through profit and loss 3,096 2,740
Australian Dollar
Financial assets at fair value through profit and loss 443 529
Net currency exposure 6,529
8,727
At 31 March 2025, if the exchange rate of the US Dollar had
strengthened/weakened by 10% against the Sterling, with all other variables
remaining constant, the increase/(decrease) in the profit for the year would
amount to +/- £269,639 (2024: +/- £261,341).
At 31 March 2025, if the exchange rate of the Euro had strengthened/weakened
by 10% against the Sterling, with all other variables remaining constant, the
increase/(decrease) in the profit for the year would amount to +/- £290,109
(2024: +/- £483,873).
At 31 March 2025, if the exchange rate of the Australian Dollar had
strengthened/weakened by 10% against the Sterling, with all other variables
remaining constant, the increase/(decrease) in the profit for the year would
amount to +/- £40,263 (2024: £48,133).
iii) Interest rate risk
The Company currently funds its operations through the use of equity. Cash at
bank, the majority of which was in Sterling at the year end, is held at
variable rates. At the year end, the Company's financial liabilities did not
suffer interest and thus were not subject to any interest rate risk.
20. Capital Management Policy and Procedures
The Company's capital structure is derived solely from the issue of Ordinary
Shares.
The Company does not currently intend to fund any investments through debt or
other borrowings but may do so if appropriate. Investments in early stage
assets are expected to be mainly in the form of equity, with debt potentially
being raised later to fund the development of such assets. Investments in
later stage assets are more likely to include an element of debt to equity
gearing. The Company may also offer new Ordinary Shares as consideration as
well as cash, thereby helping to preserve the Company's cash for working
capital and as a reserve against unforeseen contingencies including, for
example, delays in collecting accounts receivable, unexpected changes in the
economic environment and operational problems.
The Board monitors and reviews the structure of the Company's capital on an ad
hoc basis. This review includes:
• The need to obtain funds for new investments, as and when they arise;
• The current and future levels of gearing;
• The need to buy back Ordinary Shares for cancellation or to be held in
treasury, which takes account of the difference between the net asset value
per Ordinary Share and the Ordinary Share price;
• The current and future dividend policy; and
• The current and future return of capital policy.
The Company is not subject to any externally imposed capital requirements.
21. Events after the Financial Reporting Date
Following the publication of these Financial Statements Mr Ian Burns resigned
as Non-Executive Chairman of the Board of Directors. At which point Luke
Cairns, non-executive director, assumed the role of Interim Chairman.
There are no material events subsequent to year end which require disclosure.
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