TIDMANIC
RNS Number : 8390X
Agronomics Limited
27 December 2023
27 December 2023
Agronomics Limited
("Agronomics" or the "Company")
Annual audited results for the year ending 30 June 2023
Notice of AGM
The Board of Agronomics, a leading listed investor in cellular
agriculture, is pleased to announce its annual results for the year
ending 30 June 2023.
Copies of the 2023 Audited Report and Financial Statements are
being posted to shareholders and will shortly be available from the
Company's website, https://agronomics.im/investors/ , in the
investor portal section, under the financial reports tab.
The Company will post its Notice of Annual General Meeting
("AGM") to Shareholders at the same time. The AGM will be held at
the Sanderson Suite, Claremont Hotel, Loch Promenade, Douglas, Isle
of Man IM1 2LX at 10:00 a.m. on 8 February 2024.
The Board considers it important that all shareholders should
have the opportunity to exercise their voting rights at the AGM. To
this end, the Company invites shareholders to complete the voting
proxy form as early as possible. Shareholders may also submit
questions to the Company Secretary either in writing at the
registered office or by email to katie@burnbrae.com prior to the
meeting and as early as possible.
Financial Highlights
-- Net asset value per share (NAV) at 30 June 2023 of 16.94
pence (2022: 14.85 pence), an increase of 14%.
-- Net operating profit of GBP25,746,348 (2022: GBP12,920,927)
prior to accounting for the Shellbay fee due of GBP 3,372,672
(2022: GBP4,562,548)
-- Net profit after taxation and the Shellbay fee of GBP 22,373,676 (2022: GBP8,358,379).
-- Investment income, including net unrealised gains, reflected a gain of GBP 29,703,324 (2022: GBP6,423,869).
-- The carrying amount of invested assets is GBP 141,773,297
(2022: GBP94,813,088), an increase of 49%
-- Cash and cash equivalents and cash deposits stood at GBP28,093,984 (2022: GBP51,482,501).
-- Total assets of GBP 170,203,091 at 30 June 2023 (2022: GBP146,398,248).
-- Total liabilities of GBP1,946 ,093 at 30 June 2023 (2022:
GBP2,485,346), including the cash portion of the Shellbay fee due
of GBP1,686,336.
Operational Highlights
-- Led four funding rounds including the Series A round of All G
Foods, the Seed round of UK-based fermentation company Clean Food
Group, the Seed round of contract manufacturer Liberation Labs, and
the seed financing round of HydGene Renewables Pty Ltd's, to
engineer microorganisms for hydrogen production.
-- In August 2022, Agronomics led All G Food Holding Pty Ltd's
(All G Foods) AUD 25 million Series A Round with an AUD 15 million
investment. All G Foods is a precision fermentation company based
in Australia focusing on the production of sustainable dairy
products and proteins.
-- In August 2022, Agronomics led Clean Food Group Limited's
(Clean Food Group) seed financing with a GBP577,500 investment.
Clean Food Group owns intellectual property developed by the
University of Bath for a technology platform that produces a
bio-equivalent palm oil alternative using microbial
fermentation.
-- In October 2022, Agronomics announced a US$ 7million
additional investment into Liberation Labs Holdings as part of a
US$ 20 million Seed financing round. Agronomics precision
fermentation contract manufacture portfolio company, Liberation
Labs, has made significant progress, including selecting its first
site in Richmond, Indiana, US, for its 600,000-litre capacity
commercial plant.
-- In February 2023, Agronomics announced a US$ 500,000
investment in Wild Microbes Company's (Wild Microbes) US$ 3.3
million pre-seed financing. The company has proprietary technology
that allows it to genetically engineer novel microbial strains for
use as host organisms to produce proteins and other valuable
molecules.
-- In June 2023, Agronomics announced a AUD 2.5 million
investment in HydGene Renewables Pty Ltd's (HydGene). HydGene
engineer's microorganisms act as a proprietary biocatalyst for the
production of green hydrogen. The catalyst enables the conversion
of waste biomass into gases such as hydrogen and ammonia.
Post-period End Highlights
-- During the post-period, the United States Department of
Agriculture ("USDA") awarded Ameris Bancorp ("Ameris Bank") a US$
25 million "Business and Industry" loan guarantee to help the
continued build and the completion of Liberation Labs manufacturing
facility.
-- Agronomics invested EUR4 million as part of Meatable's EUR30
million Series B financing round to help further scale Meatable's
production processes and accelerate its commercial programme in
target markets to deliver cultivated meat products that are price
competitive with traditional meat.
-- Portfolio company BlueNalu, Inc. raised US$ 33.5 million from
new and existing investors in a Series B round. The financing will
enable the next stage of BlueNalu's growth and its continued
progress towards scaling and commercializing healthy and
sustainable seafood in the U.S. and around the world. BlueNalu
plans to launch its first commercial product, premium bluefin tuna
toro, following regulatory approval. Agronomics has invested, in
aggregate, US $8 million across BueNalu's various funding
rounds.
Jim Mellon, Chairperson of Agronomics Limited, commented:
"This financial year has been another strong year of growth for
Agronomics and has seen significant progress made across our
diverse portfolio within the field of cellular agriculture. We have
made investments in new and existing portfolio companies across
three main areas; cultivated meat and material, precision
fermentation and enabling technologies.
Our conservative valuation methodology leads us to believe that
there is significant intrinsic value within our portfolio, and we
remain well positioned to identify attractive opportunities in the
sector. Agronomics has maintained its strong cash position to
ensure reserves to support existing portfolio companies where we
have high levels of conviction. However, we have also participated
in select new deals as investment and commercial progress continues
to develop across the sector. We recognise the persistent market
turmoil and whilst this reflects the wider macroeconomic
environment, we maintain our optimism for the cellular agriculture
field.
During the year, the industry also made significant progress and
saw the first approval of cultivated meat product in the US by the
FDA and USDA. This was a landmark event for the field of cultivated
meat and moves us further along the path to full scale
commercialisation. We look forward to further approvals from within
Agronomics' leading portfolio of companies and we expect to start
seeing regulatory approvals across our portfolio in major protein
categories from 2024.
The portfolio continues to show great robustness in the market
downturn, as shown by the number of funding rounds that continue to
be achieved with uplifts. We have to address the nature of venture
capital, and the likelihood of sector consolidation in the near
term, as category leaders are identified.
We believe our current investment portfolio contains many of
these category leaders and shows considerable promise for future
growth, particularly given the scale of opportunity for the
cellular agriculture sector. The Board will also continue to seek
new opportunities in line with its Investing Policy, and we look
forward to the future with confidence."
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF THE MARKET ABUSE REGULATION (EU No. 596/2014) AS IT FORMS PART
OF UK DOMESTIC LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT
2018. UPON THE PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY
INFORMATION SERVICE, THIS INSIDE INFORMATION IS NOW CONSIDERED TO
BE IN THE PUBLIC DOMAIN AND SUCH PERSONS SHALL THEREFORE CEASE TO
BE IN POSSESSION OF INSIDE INFORMATION.
For further information please contact:
Agronomics Beaumont Canaccord Cavendish Peterhouse
Limited Cornish Genuity Limited Capital Capital SEC Newgate
Limited Markets Limited
Limited
The Company Nomad Joint Broker Joint Broker Joint Broker Public Relations
---------------- ----------------- ------------------ --------------- ----------------------
Jim Mellon Roland Cornish Andrew Potts Giles Balleny Lucy Williams Bob Huxford
Denham Eke Jim Biddle Harry Pardoe George Charles George Esmond
Alex Aylen LawsonMichael Goodfellow
(Head of Johnson
Equities)
---------------- ----------------- ------------------ --------------- ----------------------
+44 (0)
1624 639396 +44 (0) +44 (0) +44 (0)
info@agronomics.i 207 628 +44 (0) 207 207 397 207 469 Agronomics@secnewgate.
m 3396 523 8000 8900 0936 co.uk
---------------- ----------------- ------------------ --------------- ----------------------
Chairman's statement
I am pleased to present the Annual Report for Agronomics Limited
("Agronomics" or the "Company") for the year ended 30 June
2023.
This financial year, Agronomics has maintained its strong cash
position to ensure reserves to support existing portfolio companies
where we have high levels of conviction. However, we have also
participated in select new deals where we see companies making
strong investment and commercial progress across the sector. We
recognise the challenging market conditions and whilst this
reflects the wider macroeconomic environment, we maintain our
optimism for the cellular agriculture field. The technologies into
which we have invested have the potential to revolutionise the
production of key food products such as proteins, fats, eggs,
coffee, cocoa and meat, and have wider applications to the
materials and energy industries.
We are in an era where investment opportunities should offer a
positive impact on society, in addition to providing attractive
risk-adjusted returns. Cellular agriculture technologies have the
potential to achieve that by contributing to the decarbonisation of
the world's key production systems while being a critical
technology to support food security. . These technologies include
cell culture - harnessing stem cells to produce meat, without the
slaughter of the animal; and precision fermentation - utilising
microbes as cell factories to produce targeted valuable
ingredients, such as dairy and egg proteins. All of these
technologies only have validity if the products can achieve parity
with their conventional counterparts, not only in terms of price
but also sensory profile and convenience.
We have seen successful progress across the portfolio this year.
Post period end cultivated seafood producer BlueNalu, of which we
own 5.12%, signed an MoU with NEOM, entering a strategic
partnership to progress the commercialisation, marketing, and
distribution of its cell-cultured seafood products. The NEOM
Investment Fund also led Blue Nalu's $35m Series B round with a US
$20 million investment. These developments exemplify the demand for
cellular agriculture as food insecurity continues to rise across
the globe, and climate change and the fragility of supply chains
persist.
In a world retreating from globalisation, there is an increasing
need for localised and secure supply chains. As the financial firm
Boston Consulting Group reported, "As highlighted by the recent
pandemic, and the ongoing conflict in Europe, as well as natural
disasters around the world, the vulnerability of global supply
chains has only risen over time". This ties into the US'
announcement of the National Biotechnology and Biomanufacturing
Initiative in September 2022, to focus on expanding domestic
biomanufacturing and fostering local innovation.
Therefore, within the year, we have focused resources on
supporting the launch of our precision fermentation contract
manufacturer, Liberation Labs to provide capacity for
industrial-scale production. As key backers of this business,
alongside the leading experts in facility design and execution,
Mark Warner and Etan Bendheim, we have committed to driving this
business forward. In this period, Liberation Labs made significant
progress, including selecting its first site in Richmond, Indiana,
US, for its 600,000 litre capacity commercial plant.
Liberation Labs broke ground during the summer, and the build is
on track to be completed in Q1 2025 when it will host its first
precision fermentation customers. There continues to be a lack of
fermentation capacity as the new wave of applications of
biomanufacturing enters commercialisation. Today there are
approximately 61 million litres of operating bioreactor capacity
worldwide, and according to projections from Boston Consulting
Group, 15 megatonnes of animal protein will be produced via
microbes by 2030 which will require 100x the current capacity.
Liberation Labs has a clear leadership position in the expansion of
this capacity, yet is adding only 1% capacity as legacy facilities,
particularly in Europe, approach the end of their economic life.
Liberation Labs is the only contract manufacturer dedicated to
building fit-for-purpose industrial-scale precision fermentation
plants and Agronomics currently owns 37.4% of Liberation Labs.
During the financial year, we expanded our precision
fermentation exposure, recognising the addition of Hydgene to the
portfolio, leveraging microbes to convert biomass waste into
hydrogen and ammonia. We led the Series A of All G Foods, which is
focused on producing high-value lactoferrin and casein dairy
proteins from microbes. Both of these companies are based in
Australia, highlighting the increased geographic diversification of
the portfolio. We further participated in the Seed round of Wild
Microbes, focused on expanding the library of host organisms that
can be used in precision fermentation, our second investment in the
'enabling technology' category for the sector.
This financial year also saw the first regulatory approvals for
cultivated meat in the US with the ground-breaking achievements of
Upside Foods and Good Meat as the first companies to receive
approval under the joint regulatory framework of the US FDA and
USDA. Both of these companies gained approval for cultivated
chicken and have been serving their products in restaurants. We see
these approvals as the first of several expected in 2024. Within
our portfolio, we continue to believe our companies have the best
technologies to achieve optimal productivity and favourable unit
economics and become category leaders for the respective products.
This is showcased by our support for Meatable, and why we led their
EUR 30 million Series B funding round. This investment is expected
to enable Meatable to leverage its unique access to the opti-oxTM
technology, allowing for an efficient bioprocess as it looks to
commercialise its pork and beef products in a capital-efficient
manner. Within the portfolio, Solar Foods received its first novel
food regulatory approval in Singapore for the commercialisation of
its protein Solein, grown using carbon dioxide and electricity.
We maintain our expectation that regulatory approvals for our
portfolio companies will continue in 2024 in key jurisdictions such
as the US and Singapore.
Agronomics has cash and deposits as at 30 June 2023 of GBP28.1
million, following its successful fundraises during 2021, and it
has maintained a healthy balance sheet to pursue follow-on
opportunities within the portfolio as well as continue to target
new and unique deals within the field of cellular agriculture.
The portfolio continues to show great robustness in the market
downturn, as shown by the number of portfolio company funding
rounds that continue to be achieved with price uplifts. We have to
address the nature of venture capital, and the likelihood of sector
consolidation in the near term, as category leaders are identified.
We continue to believe we hold a number of these in our portfolio,
with companies suitably adjusting their cash burns and runways to
survive the market downturn.
Both cell culturing and precision fermentation technologies only
have mass market validity if companies can prove the technologies
can become cheap enough to compete, on a unit economic, taste, and
nutrition basis, with conventional proteins or ingredients. We have
high conviction that our portfolio companies have the toolset and
technologies to scale their products to mass markets at prices
competitive to conventional agriculture.
Details regarding principal risks and uncertainties that apply
to the Company can be found in Note 8.
Investment Review
During the financial year, Agronomics made several investments
in new and existing portfolio companies. In the first half it led
three funding rounds including the Series A round of All G Foods,
the Seed round of UK-based fermentation company Clean Food Group,
and the Seed round of contract manufacturer Liberation Labs.
In the second half of the financial year, Agronomics led
HydGene's AUD 6 million Seed financing round with an AUD 2.5
million investment, to engineer microorganisms for hydrogen
production. The Company also participated in the Wild Microbes US$
3.3 million pre-seed financing round, with a US$ 500k investment,
to identify novel microbial strains for use as cell factories to
produce valuable molecules. Post 30 June 2023 year end, Agronomics
successfully led the US$ 30 million Series B financing round of
existing portfolio company Meatable, harnessing cell culture to
produce cultivated beef and pork with its unique opti-oxTM
technology.
The full commentary on the activities for the financial year can
be found below.
On 1 August 2022, Agronomics led portfolio company Clean Food
Group Limited's (Clean Food Group) seed financing round with a
GBP577,500 investment subscribing for 5,775,000 additional Ordinary
Shares bringing Agronomics equity stake to 35.03% and an aggregate
value of GBP3,807,500. This follows Agronomics' first subscription
of GBP323,000 for 32,300,000 shares of the company in March 2022.
Clean Food Group acquired the intellectual property for a
technology platform that produces bio-equivalent palm oil using
microbial fermentation from the University of Bath. Clean Food
Group subsequently secured a two-year collaboration to scale the
technology and support launching their palm oil product to
market.
On 4 August 2022, Agronomics announced it led All G Food Holding
Pty Ltd's (All G Foods) AUD 25 million Series A Round with an AUD
15 million investment, subscribing for 2,803,214 Series A Preferred
Shares. All G Foods is a precision fermentation company based in
Australia focusing on the production of sustainable dairy products
and proteins. Agronomics identified All G Foods as having leading
precision fermentation dairy expertise, most notably in its focus
on casein micelle formation which is critical for the full
functionality of dairy products and has posed a noticeable
challenge for the sector globally. Following the close of this
round, Agronomics owns 9.35% of the company on a fully diluted
basis.
On 20 October 2022, Agronomics announced a US$ 7 million
investment into Liberation Labs Holdings Inc (Liberation Labs) in
the form of an unconditional subscription agreement. The investment
was made in two tranches, the first of which took place on 20
October 2022 and the second half in December 2022. Liberation Labs
was founded to address the critical shortage in precision
fermentation capacity for the production of proteins in food
through the construction of its first 600,000-litre launch facility
in Richmond Indiana. The proceeds from this funding round were used
primarily to finalise its site selection, complete pre-construction
engineering, order long-lead equipment, and continue to build out
its team. Agronomics made its first investment in Liberation Labs's
Founding round in June 2022 in which it invested US$ 627,000 which
is now carried at a 24.23x uplift. Agronomics' whole position is
now carried at an aggregate value of US$ 22.4 million with an
unrealised gain of $14.8 million.
On 23 February 2023, Agronomics announced a $500k investment in
the form of a Simple Agreement for Future Equity ("SAFE") in Wild
Microbes Company's (Wild Microbes) US$ 3.3 million pre-seed
financing. The company has proprietary technology that allows it to
genetically engineer novel microbial strains for use as host
organisms to produce proteins and other valuable molecules. Since
the beginning of microbial engineering, the industry has been
choosing host cells from the same small handful of established and
proven microorganisms. Wild Microbes intends to create a catalogue
mapping out the qualities and characteristics of superior
microorganisms which can significantly improve the efficiency and
productivity of host-cells. By identifying superior organisms,
yields can be increased which will bring down production costs,
thus helping precision fermentation companies to reach positive
unit economics. The SAFE will convert into preferred shares in a
future qualified financing after which Agronomics will own
approximately 3.60% of the company on a fully diluted basis.
On 15 June 2023, Agronomics announced a AUD 2.5 million
investment in HydGene Renewables Pty Ltd's (HydGene), AUD 6 million
seed round for a 12.5% equity stake in the company. HydGene
engineers microorganisms to act as a proprietary biocatalyst for
the production of green hydrogen. The catalyst (produced via
fermentation) enables the conversion of waste biomass into gases
such as hydrogen and ammonia. With the majority of hydrogen
currently being derived from fossil fuels, HydGene's biocatalyst
technology provides a unique decentralised solution that reduces
infrastructure requirements and costs. If derived from a
cost-effective, sustainable source, hydrogen could become a
mainstream supply of energy and could constitute 18% of the global
energy supply, becoming a $2.5 trillion global market by 2050.
At 30 June 2023, the following investments are held by the
Company:
Financial Review
The Company recorded a net operating profit of GBP25,746,348 for
the year (2022: GBP12,920,927) prior to accounting for the fee due
to Shellbay Investments Limited ("Shellbay"). Taking into account a
fee of GBP3,372,672 (2022: GBP4,562,548) due to Shellbay, the
Company recorded a net profit after taxation of GBP22,373,676
(2022: GBP8,358,379). Our investment income, including net
unrealised gains, reflected a gain of GBP29,703,324 (2022:
GBP6,423,869). Unrealised foreign exchange losses of GBP3,364,673
(2022: gains of GBP6,513,031) have been recognised in profit and
loss.
The carrying amount of invested assets is GBP141,773,297 (2022:
GBP94,813,088), an increase of 49%, and cash and equivalents and
bank deposits stood at GBP28,093,984 (2022: GBP51,482,501). Our
total assets stood at GBP170,203,091 (2022: GBP146,398,248). Total
liabilities stood at GBP1,946,093 (2022: GBP2,485,346), which
includes the cash portion of the Shellbay fee due of GBP1,686,336.
As a result, the net asset value per share at 30 June 2023 was
16.94 pence (2022: 14.85 pence), an increase of 14%.
Financing activity
During the year, the Company received warrant exercise notices
and issued a total of 947,405 Ordinary Shares, for cash proceeds of
GBP284,060.
Strategy and Outlook
Our current investment portfolio shows considerable promise for
future growth given the scale of opportunity to invest in the
cellular agriculture sector, and the Board will continue to seek
new opportunities in line with its Investing Policy, details of
which can be found on the Company website -
https://agronomics.im/investors/ .
Jim Mellon
Executive Chairperson
21 December 2023
Directors' report
The Directors of Agronomics Limited (the "Company") take
pleasure in presenting the Directors' report and financial
statements for the year ended 30 June 2023.
Principal activity
Agronomics Limited is a Company domiciled in the Isle of Man.
The Company's strategy is to create value for Shareholders through
investing in companies that operate in the nascent industry of
cellular agriculture, which are environmentally friendly
alternatives to the traditional production of meat and plant-based
sources.
Further details of the investing policy can be found on the
Company's website at www.agronomics.im .
Results and transfer to reserves
The results and transfers to reserves for the year are set out
on pages 21 and 23.
The Company recorded a net operating profit of GBP25,746,348 for
the year (2022: GBP12,920,927) prior to accounting for the fee due
to Shellbay Investments Limited ("Shellbay"). Taking into account a
fee of GBP3,372,672 (2022: GBP4,562,548) due to Shellbay, the
Company recorded a net profit after taxation of GBP22,373,676
(2022: GBP8,358,379).
The net asset value per share at 30 June 2023 was 16.94 pence
(2022: 14.85 pence).
Dividend
The Directors do not propose the payment of a dividend (2022:
GBPnil).
Policy and practice on payment of creditors
It is the policy of the Company to agree appropriate terms and
conditions for its transactions with suppliers by means of standard
written terms to individually negotiated contracts. The Company
seeks to ensure that payments are always made in accordance with
these terms and conditions.
Financial risks
Details relating to the financial risk management are set out in
note 8 to the financial statements.
Directors
The Directors who served during the year and to date were:
Jim Mellon Executive Chairperson (appointed as Chairperson
on 14 December 2023)
Denham Eke Executive Finance Director
Richard Reed Independent Non-Executive (resigned as Chairperson
on 14 December 2023)
David Giampaolo Independent Non-Executive
Marisa Drew Independent Non-Executive
Directors' interests
As at 30 June 2023, the interests of the Directors and their
families (as such term is defined in the AIM Rules for Companies)
in the share capital of the Company are as follows:
Ordinary shares
30 June
2023 30 June 2022
---------------- ------------ -------------
Jim Mellon (1) 154,553,366 149,145,611
Denham Eke (2) 739,390 213,445
Richard Reed 6,354,412 6,354,412
David Giampaolo 2,434,783 2,434,783
1 - Galloway Limited, a company where Jim Mellon is considered
to be the ultimate beneficial owner, holds 139,448,641 shares and
12,722,764 are held by Shellbay Investments Limited, companies
which are both indirectly wholly owned by Jim Mellon, and 2,381,961
Ordinary Shares are held directly by Mr Mellon.
(2) - Denham Eke is Managing Director of Galloway Limited .
Significant shareholdings
Except for the interests disclosed in this note, the Directors
are not aware of any holding of ordinary shares as at 30 June 2023
representing 3% or more of the issued share capital of the
Company:
Number of Percentage
ordinary of total
shares issued capital
Jim Mellon (1) 154,553,366 15.56%
Nutraco Nominees Limited 41,366,455 4.16%
Hargreaves Lansdown (Nominees) 40,579,646 4.09%
Chase Nominees Limited 39,239,575 3.95%
HSBC Global Custody Nominee (UK) 35,000,000 3.52%
Note:
1 - Galloway Limited, a company where Jim Mellon is considered
to be the ultimate beneficial owner, holds 139,448,641 shares and
12,722,764 are held by Shellbay Investments Limited, companies
which are both indirectly wholly owned by Jim Mellon, and 2,381,961
ordinary shares are held directly by Mr Mellon.
Auditors
KPMG Audit LLC, being eligible, have expressed their willingness
to continue in office.
On behalf of the Board
Denham Eke
Finance Director
21 December 2023
1st Floor, Viking House
St Paul's Square
Ramsey, Isle of Man
IM8 1GB
Corporate Governance Statement
Corporate Governance Report
The Board of Agronomics (the "Board") is committed to best
practice in corporate governance throughout the Company (the
"Company"). The Directors have agreed to comply with the provisions
of the Quoted Companies Alliance ("QCA") Corporate Governance Code
for Small and Mid-Size Quoted Companies (2018) to the extent which
is appropriate to its nature and scale of operations. This report
illustrates how the Company complies with those principles.
QCA Principle 1: Establish a strategy and business model which
promotes long-term value for shareholders
The strategy and business operations of the Company are set out
in the Chairman's Statement on pages 2 to 5.
The Company's strategy and business model and amendments thereto
are developed by the Chairperson and their senior management team
and approved by the Board. The management team is responsible for
implementing the strategy and managing the business at an
operational level.
The Company's overall strategic objective is to develop a
profitable and sustainable platform for investing in the nascent
industry of modern foods which are environmentally friendly
alternatives to the traditional production of meat and plant-based
sources of nutrition.
In executing the Company's strategy and operational plans,
management will typically confront a range of day-to-day challenges
associated with these key risks and uncertainties and will seek to
deploy the identified mitigation steps to manage these risks as
they manifest themselves.
QCA Principle 2: Seek to understand and meet shareholder needs
and expectations
The Company via the Chairperson seeks to maintain a regular
dialogue with both existing and potential new shareholders in order
to communicate the Company's strategy and progress and to
understand the needs and expectations of shareholders.
Beyond the Annual General Meeting, the Chairperson and, where
appropriate, other members of the senior management team or Board
will meet with investors and analysts to provide them with updates
on the Company's business and to obtain feedback regarding the
market's expectations of the Company.
The Company's investor relations activities encompass dialogue
with both institutional and private investors. From time to time,
the Company attends private investor events, providing an
opportunity for those investors to meet with representatives from
the Company in a more informal setting.
QCA Principle 3: Take into account wider stakeholder and social
responsibilities and their implications for long-term success
The Company is aware of its corporate social responsibilities
and the need to maintain effective working relationships across a
range of stakeholders. These include the Company's advisors,
suppliers, and investee companies. The Company's operations and
working methodologies take account of the need to balance the needs
of all these stakeholders while maintaining focus on the Board's
primary responsibility to promote the success of the Company for
the benefit of its members as a whole. The Company endeavours to
take account of feedback received from stakeholders, and where
appropriate, ensures any amendments are consistent with the
Company's longer-term strategy.
The Company takes due account of any impact that its activities
may have on the environment and seeks to minimise this impact
wherever possible.
QCA Principle 4: Embed effective risk management, considering
both opportunities and threats, throughout the organisation
The Board is responsible for the systems of risk management and
internal control and for reviewing their effectiveness. Internal
controls are designed to manage rather than eliminate risk and
provide reasonable but not absolute assurance against material
misstatement or loss. Through the activities of the Company Audit,
Risk and Compliance Committee, the effectiveness of these internal
controls is reviewed annually.
A comprehensive budgeting process is completed once a year and
is reviewed and approved by the Board. The Company's results,
compared with the budget, are reported to the Board on a monthly
basis.
The Company maintains appropriate insurance cover in respect of
actions taken against the Directors because of their roles, as well
as against material loss or claims against the Company. The insured
values and type of cover are comprehensively reviewed on a periodic
basis.
The senior management team meets at least monthly to consider
new risks and opportunities presented to the Company, making
recommendations to the Board and/or Company Audit, Risk and
Compliance Committee as appropriate.
QCA Principle 5: Maintain the board as a well-functioning,
balanced team led by the chair
The Company's Board currently comprises two Non-executive
Directors and two Executive Directors.
All of the Directors are subject to election by shareholders at
the first Annual General Meeting after their appointment to the
Board and will continue to seek re-election at least once every
three years.
The Board is responsible to the shareholders for the proper
management of the Company and intends to meet at least four times a
year to set the overall direction and strategy of the Company, to
review operational and financial performance and to advise on
management appointments. All key operational decisions are subject
to Board approval.
Richard Reed, David Giampaolo and Marisa Drew, all Non-executive
Directors, are considered to be independent. The QCA Code suggests
that a board should have at least two independent Non-executive
Directors. The Board considers that the current composition and
structure of the Board of Directors is appropriate to maintain
effective oversight of the Company's activities for the time
being.
Non-executive Directors receive their fees in the form of a
basic cash emolument. The current remuneration structure for the
Board's Executive and Non-executive Directors is deemed to be
proportionate.
QCA Principle 6: Ensure that between them the Directors have the
necessary up-to-date experience, skills, and capabilities
The Board considers that the Executive Directors and
Non-executive Directors are of sufficient competence and calibre to
add strength and objectivity to its activities and bring
considerable experience in the operational and financial
development of the Company.
The Directors' biographies are detailed on the Company's website
www.agronomics.im .
The Board regularly reviews the composition of the Board to
ensure that it has the necessary breadth and depth of skills to
support the ongoing development of the Company.
The Chairperson, in conjunction with the Finance Director,
ensures that the Directors' knowledge is kept up to date on key
issues and developments pertaining to the Company, its operational
environment and to the Directors' responsibilities as members of
the Board. During the course of the year, Directors received
updates from the Finance Director and various external advisers on
a number of corporate governance matters.
Directors' service contracts or appointment letters make
provision for a Director to seek professional advice in furtherance
of his or her duties and responsibilities, normally via the Company
Secretary.
QCA Principle 7: Evaluate board performance based on clear and
relevant objectives, seeking continuous improvement
Internal evaluation of the Board, the Committees and individual
Directors is undertaken on an annual basis in the form of peer
appraisal and discussions to determine their effectiveness and
performance as well as the Directors' continued independence.
The results and recommendations that come out of the appraisals
for the Directors shall identify the key corporate and financial
targets that are relevant to each Director and their personal
targets in terms of career development and training. Progress
against previous targets is also assessed where relevant.
QCA Principle 8: Promote a corporate culture that is based on
ethical values and behaviours
The Board seeks to maintain the highest standards of integrity
and probity in the conduct of the Company's operations. With the
Company being a vehicle for holding investment, it has no employees
and limited capacity to effect changes in culture in companies it
is affiliated with. However, the Board will strive to ensure that
the Company's in which it has an interest in, act in an ethical
manner.
The Board ensures that all portfolio companies have policies in
place to comply with applicable governance laws and regulations,
such as anti-bribery and modern-day slavery.
The Board has a zero-tolerance approach to breaches of these
laws and regulations. The Board promotes ethical behaviour
throughout the portfolio, through directions to the Company's
investment advisors in relation to the ethical management of the
portfolio.
QCA Principle 9: Maintain governance structures and processes
that are fit for purpose and support good decision- making by the
board
The Role of the Board
The Board is collectively responsible for the long-term success
of the organisation. Its principal function is to determine the
strategy and policies of the Company within an effective control
framework which enables risk to be assessed and managed.
The Board ensures that the necessary financial and human
resources are in place for the Company to meet its objectives and
that business and management performance is reviewed. Furthermore,
the Board ensures that the Company operates within its
constitution, relevant legislation and regulation and that proper
accounting records and effective systems of business control are
established, maintained, documented, and audited.
There are at least four formal Board meetings each year. All
Board members have the benefit, at the Company's expense, of
liability insurance in respect of their responsibilities as
Directors and have access to independent legal or other
professional advice if required. The Board has a formal schedule of
matters which are reserved for its consideration, and it has
established three committees to consider specific issues in greater
detail, being the Company Audit, Risk and Compliance, Remuneration
and Nomination Committees. The Terms of Reference for each of these
Committees are published on the Company's website.
The Chairperson
The Chairperson is responsible for leading the Board, ensuring
its effectiveness in all aspects of its role, promoting a culture
of openness of debate, and communicating with the Company's members
on behalf of the Board. The Chairperson sets the direction of the
Board and promotes a culture of openness and debate by facilitating
the effective contribution of Non-executive Directors and ensuring
constructive relations between Executive and Non-executive
Directors. The Chairperson also ensures that Directors receive
accurate, timely and clear information. In doing so, this fosters a
positive corporate governance culture throughout the Company.
The Chief Executive Officer
At present, the Company does not have a Chief Executive Officer.
Instead, the responsibility for managing the Company's business and
operations within the parameters set by the Board is held by the
Finance Director.
Non-executive Directors
The Non-executive Directors are responsible for bringing
independent judgement to the discussions held by the Board, using
their breadth of experience and understanding of the business.
Their key responsibilities are to constructively challenge and
contribute to strategic proposals, and to monitor performance,
resources, and standards of conduct, compliance and control, whilst
providing support to executive management in developing the
Company.
The Board has established a Company Audit, Risk and Compliance
Committee ("ARCC"), a Remuneration Committee and a Nominations
Committee with formally delegated duties and responsibilities.
Richard Reed chairs the ARCC, Jim Mellon chairs the Remuneration
Committee, and the Nominations Committee is chaired by Richard Reed
and comprised of the whole board.
Company Audit, Risk and Compliance Committee
The Company Audit, Risk and Compliance Committee meets at least
two times each year is chaired by Richard Reed. The external
auditors attend by invitation. Its role is to be responsible for
reviewing the integrity of the financial statements and the balance
of information disclosed in the accompanying Directors' Report, to
review the effectiveness of internal controls and risk management
systems and recommend to the Board (for approval by the members)
the appointment or re-appointment of the external auditor. The ARCC
reviews and monitors the external auditor's objectivity,
competence, effectiveness and independence, ensuring that if it or
its associates are invited to undertake non-audit work it will not
compromise auditor objectivity and independence.
Further information can be found within the Company Audit, Risk
and Compliance Report contained within this Annual Report.
Remuneration Committee
The Remuneration Committee intends to meet at least once a year
and comprises of two Non-executive Directors and one Executive
Director. It is chaired by Jim Mellon and is responsible for
determining the remuneration of the Executive Director, the Company
Secretary and other members of the management. Committee members do
not take part in discussions concerning their own remuneration.
Further information can be found within the Remuneration Report
contained within this Annual Report.
Nomination Committee
The Nomination Committee is comprised of the whole Board. It is
chaired by the Chairperson of the Board and is responsible for
making recommendations to the Board on matters relating to the
composition of the Board, including Executive and Non-executive
Director succession planning, the appointment of new Directors and
the election and re-election of Directors. The Nomination Committee
only meets as matters arise.
Appointments to the Board
The principal purpose of the Nomination Committee is to
undertake the assessment of the balance of skills, experience,
independence and knowledge on the Board against the requirements of
the business, with a view to determining whether any shortages
exist. Having completed the assessment, the Committee makes
recommendations to the Board accordingly. Appointments to the Board
are made on merit, with due regard to the benefits of diversity.
Within this context, the paramount objective is the selection of
the best candidate, irrespective of background, and it is the view
of the Board that establishing quotas or targets for the diversity
of the Board is not appropriate.
All Director appointments must be approved by the Company's
Nominated Adviser, as required under the AIM Rules, before they are
appointed to the Board.
Prior to appointment, Non-executive Directors are required to
demonstrate that they are able to allocate sufficient time to
undertake their duties.
Re-election
The Company's Rules require that all Directors are submitted for
election at the AGM following their first appointment to the Board.
Thereafter all directors will submit themselves for re-election at
least once every three years, irrespective of performance.
Board and committee attendance
The number of formal scheduled Board and committee meetings held
and attended by Directors during the year was as follows: -
Board ARCC Nomination Remuneration
Richard Reed 19/19 2/2 1/1 1/1
David Giampaolo 19/19 2/2 1/1 0/1
Jim Mellon 19/19 - 1/1 1/1
Denham Eke 19/19 2/2 1/1 -
Marisa Drew* 6/19 - - -
* joined the Board on 23 February
2023.
QCA Principle 10: Communicate how the company is governed and is
performing by maintaining a dialogue with shareholders and other
relevant stakeholders
The Company places a high priority on regular communications
with its various stakeholders and aims to ensure that all
communications concerning the Company's activities are clear, fair,
and accurate. The Company's website is regularly updated, and users
can register to be alerted when announcements or details of
presentations and events are posted onto the website.
Notices of General Meetings of the Company can be found here:
https://agronomics.im/latest-news/ .
The results of voting on all resolutions in general meetings are
posted to the Company's website, including any actions to be taken
as a result of resolutions for which votes against have been
received from at least 20 per cent of independent shareholders.
Approval
This report was approved by the Board of Directors on 21
December 2023 and signed on its behalf by:
Denham Eke
Finance Director
Audit, Risk and Compliance Committee Report
The Directors ensure the Company complies with the provisions of
the Quoted Companies Alliance ("QCA") Corporate Governance Code for
Small and Mid-Size Quoted Companies (2018) to the extent which is
appropriate to its nature and scale of operations.
This report illustrates how the Company complies with those
principles in relation to its Audit, Risk and Compliance Committee
(the "ARCC").
Membership
The Committee comprises of two Non-Executive Directors, being
Richard Reed and David Giampaolo, and one Executive Director, being
Denham Eke. The composition of the Committee has been reviewed
during the year and the Board is satisfied that the Committee
members have the relevant financial experience and the expertise to
resource and fulfil its responsibilities effectively, including
those relating to risk and controls.
Meetings
The Committee meets two times a year, including the review of
the interim and full year results. Other Directors and
representatives from the external auditors attend by
invitation.
Duties
The Committee carries out the duties below for the Company, as
appropriate:
-- Monitors the integrity of the financial statements of the
Company, including annual and half-yearly reports, interim
management statements, and any other formal announcement relating
to financial performance, reviewing significant financial reporting
issues and judgements which they contain.
-- Reviews and challenges the consistency of the information
presented within the financial statements, compliance with stock
exchange or other legal requirements, accounting policies and the
methods used to account for significant or unusual
transactions.
-- Keeps under review the effectiveness of the Company's
internal controls and risk management systems.
-- KPMG Audit LLC was appointed as auditor in 2011 and the ARCC
will oversee the relationship with them including meetings when
considered appropriate to discuss their remit and review the
findings and any issues with the annual audit. It will also review
their terms of appointment and plans to meet them once a year
independent of management and will consider and make
recommendations to the Board, to be put to the Company for approval
at the Annual General Meeting, in relation to the appointment,
re-appointment and removal of the Company's external auditor. There
are no contractual restrictions in place in respect of the auditor
choice.
-- The Committee is governed by a Terms of Reference and a copy
of this is available on the Company's website.
2023 Annual Report
During the year, ARCC confirms that it has received sufficient,
reliable and timely information from management and the external
auditors to enable it to fulfil its responsibilities.
The Committee has satisfied itself that there are no
relationships between the auditor and the Company which could
adversely affect the auditor's independence and objectivity.
All internal control and risk issues that have been brought to
the attention of ARCC by the external auditors have been considered
and the Committee confirms that it is satisfied that management has
addressed the issues or has plans to do so.
The Company has a number of policies and procedures in place as
part of its internal controls and these are subject to continuous
review and as a minimum are reviewed by ARCC on an annual
basis.
ARCC has reviewed and discussed together with management and the
external auditor the Company's financial statements for the year
ended 30 June 2023 and reports from the external auditor on the
planning for and outcome of their reviews and audit. The key
accounting issues and judgements considered relating to the
Company's financial statements and disclosures were as follows:
-- Valuation of unquoted investments GBP141,595,967;
-- Going concern - ARCC reviewed the going concern position of
the Company, taking into account the 12-month cash flow forecasts.
ARCC is satisfied that preparing the financial statements on a
going concern basis is appropriate.
Richard Reed
Chairperson ARCC
21 December 2023
Report of the Remuneration Committee
As an Isle of Man registered company there is no requirement to
produce a Directors' Remuneration Report. However, the Board
follows best practice and therefore has prepared such a report.
The Directors have agreed to comply with the provisions of the
Quoted Companies Alliance ("QCA") Corporate Governance Code for
Small and Mid-Size Quoted Companies (2018) to the extent which is
appropriate to its nature and scale of operations.
This report illustrates how the Company complies with those
principles in relation to directors' remuneration.
The Level and Components of Non-Executive Directors
Remuneration
The Remuneration Policy reflects the Company's business strategy
and objectives as well as sustained and long-term value creation
for shareholders. In addition, the policy aims to be fair and
provide equality of opportunity, ensuring that:
-- the Company is able to attract, develop and retain
high-performing and motivated people in the competitive local and
wider markets;
-- The Company offers a competitive remuneration package to
encourage enhanced performance and rewards individual contributions
to the success of the Company, in a fair and responsible
manner;
-- it reflects the Company's culture and values; and
-- there is full transparency of the Remuneration Policy.
In line with the Board's approach, which reflects that adopted
within other comparable organisations, the Remuneration Policy
provides for the reward of the Non-Executive Directors through fees
and other benefits.
Non-Executive Directors Emoluments
The remuneration for the Non-Executive Directors reflects their
responsibilities. It comprises fees and may include eligibility to
participate in an annual bonus scheme, private healthcare and share
option incentives, when any of these are considered
appropriate.
Annual bonus scheme payments are not pensionable and are not
contracted.
Non-executive Directors' Remuneration
Non-executive Directors do not receive any benefits other than
their fees and travelling expenses for which they are reimbursed.
The level of fees payable to Non-executive Directors is assessed
using benchmarks from a group of comparable organisations.
Executive Directors Remuneration
Executive Directors do not receive any benefits other than their
fees and travelling expenses for which they are reimbursed. The
level of fees payable to Executive Directors is assessed using
benchmarks from a group of comparable organisations.
The Committee believes that share ownership by executives
strengthens the link between their personal interests and those of
shareholders. Options will be granted to executives periodically at
the discretion of the Remuneration Committee. The grant of share
options is not subject to fixed performance criteria. This is
deemed to be appropriate as it allows the Committee to consider the
performance of the executives and the contribution of the
individual executives and, as with annual bonus payments,
illustrates the relative importance placed on performance-related
remuneration.
Except when required by statute, the Company does not intend to
contribute to the personal pension plans of Directors in the
forthcoming year.
Executive Directors' Contractual Terms
The service contract of the Executive Directors provides for a
notice period of six months.
The Procedure for Determining Remuneration
The Remuneration Committee, comprising two Non-executive
Directors and one Executive Director, is responsible for setting
the remuneration of the Executive Directors and is chaired by Jim
Mellon. Committee members do not take part in discussions
concerning their own remuneration. The basic Non-executive Director
fee is set by the Chairperson. The Chairperson of the Committee
reports at the Board meeting following a Committee meeting.
It is the view of the Committee that Directors' remuneration
awarded across the Company for the year has been in accordance with
the Company's stated Remuneration Policy and, on behalf of the
Committee I recommend that you endorse this report. An analysis of
Directors' emoluments is as follows:
2023 2022
GBP GBP
----------- ------------------------------------------- ------- ------
Emoluments - salaries, bonuses, and taxable benefits - -
- fees 117,709 85,000
------------------------------------------------------- ------- ------
117,709 85,000
------------------------------------------------------- ------- ------
Directors' Emoluments
Termination 2023 2022
Fees Bonus payments Benefits Total Total
GBP GBP GBP GBP GBP GBP
--------------------- ------- ------ ------------ ----------- ------- ------
Executive - salary
Denham Eke ** - - - - - -
Jim Mellon* 30,000 - - - 30,000 15,000
Non-executive - fees
Richard Reed 40,000 - - - 40,000 40,000
David Giampaolo 30,000 - - - 30,000 30,000
Marisa Drew 17,709 - - - 17,709 -
Aggregate emoluments 117,709 - - - 117,709 85,000
--------------------- ------- ------ ------------ ----------- ------- ------
* In addition to director fees, further emoluments are subject
to an agreement with Shellbay Investments Limited ("Shellbay"),
whereby Shellbay shall be entitled to an annual fee equal to the
value of 15% of any increase between the Company's net asset value
("NAV") on a per issued share basis at the start of a reporting
period and 30 June each year during the term of the New Shellbay
Agreement (please see Note 2 to the Accounts).
** Denham Eke was appointed as a Director on 30 May 2012 and
currently receives no remuneration for providing his services
(refer note 10).
Approval
The report was approved by the Board of directors and signed on
behalf of the Board.
Jim Mellon
Chairperson of Remuneration Committee
21 December 2023
Statement of Directors' Responsibilities in Respect of the
Directors' Report and the Financial Statements
The Directors are responsible for preparing the Directors'
Report and the financial statements in accordance with applicable
law and regulations.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law they have
elected to prepare the financial statements in accordance with
International Financial Reporting Standards as applicable to an
Isle of Man company and applicable law.
Under company law the Directors must not approve the financial
statements unless they are satisfied that they give a true and fair
view of the state of affairs of the Company and of its profit or
loss for that period. In preparing the financial statements, the
Directors are required to:
-- select suitable accounting policies and then apply them consistently;
-- make judgements and estimates that are reasonable, relevant and reliable;
-- state whether they have been prepared in accordance with IFRSs;
-- assess the Company's ability to continue as a going concern,
disclosing, as applicable, matters related to going concern;
and
-- use the going concern basis of accounting unless they either
intend to liquidate the Company or to cease operations or have no
realistic alternative but to do so.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company's
transactions and disclose with reasonable accuracy at any time the
financial position of the Company and enable them to ensure that
its financial statements comply with the Isle of Man Companies Act
2006. They are responsible for such internal control as they
determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to
fraud or error, and have general responsibility for taking such
steps as are reasonably open to them to safeguard the assets of the
Company and to prevent and detect fraud and other
irregularities.
The Directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
Company's website. Legislation in the Isle of Man governing the
preparation and dissemination of financial statements may differ
from legislation in other jurisdictions.
Our opinion is unmodified
We have audited the financial statements of Agronomics Limited
(the "Company"), which comprise the statement of financial position
as at 30 June 2023, the statements of profit or loss and other
comprehensive income, changes in equity and cash flows for the year
then ended, and notes, comprising significant accounting policies
and other explanatory information.
In our opinion, the accompanying financial statements:
-- give a true and fair view of the state of the Company's
affairs as at 30 June 2023 and of the Company's profit for the year
then ended;
-- have been properly prepared in accordance with International
Financial Reporting Standards; and
-- have been properly prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) ("ISAs (UK)") and applicable law. Our
responsibilities are described below. We have fulfilled our ethical
responsibilities under, and are independent of the Company in
accordance with, UK ethical requirements including the FRC Ethical
Standard as applied to listed entities. We believe that the audit
evidence we have obtained is a sufficient and appropriate basis for
our opinion.
Key audit matters: our assessment of the risks of material
misstatement
Key audit matters are those matters that, in our professional
judgment, were of most significance in the audit of the financial
statements and include the most significant assessed risks of
material misstatement (whether or not due to fraud) identified by
us, including those which had the greatest effect on: the overall
audit strategy; the allocation of resources in the audit; and
directing the efforts of the engagement team. These matters were
addressed in the context of our audit of the financial statements
as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters. In arriving at our
audit opinion above, the key audit matter was as follows (unchanged
from 2022):
The risk Our response
-------------------------------------- -------------------------------------- --------------------------------------
Valuation of unquoted investments Subjective Valuation: Our audit procedures included:
(including investment in subsidiary The Company's investment in Internal Controls: Assessing the
and other unquoted investments subsidiary is stated at fair value of design and implementation of the
held) GBP134,178,896 (2022: GBP87,766,747). investment valuation processes
2023: GBP141,773,297 (2022 The underlying portfolio of and controls.
GBP94,813,088) investments held by the subsidiary Test of Detail: Auditing the accounts
Refer to Page 12 for Audit, Risk and comprises the entirety of its of the subsidiary as part of the
Compliance Committee Report, note net assets. The Company also holds audit of the Company,
1(b) (use of estimates unquoted investments directly including assessing the accounting
and judgement), 1(d) (accounting amounting to GBP7,417,071 policies adopted by the subsidiary to
policy for financial instruments) and (2022: GBP6,795,650). ensure these are
note 8 (fair value 83% (2022: 60%) of the Company's consistent with the Company's
of financial instruments) disclosures total assets (by value) are held in accounting policies. In particular,
investments where no ensuring that the portfolio
quoted market price is available. of investments held by the subsidiary
Unquoted investments held directly by is stated at fair value and ensuring
the Company, and indirectly net asset value
through the underlying portfolio in of the subsidiary represents fair
its subsidiary, are measured at fair value.
value, which is established Use of KPMG Specialists : Involving
in accordance with the International our own valuation specialists to
Private Equity and Venture Capital challenge management
Valuation Guidelines assumptions used to support the fair
by using measurements of value such value prices.
as comparison with prices of recent
orderly transactions,
where available, requires the use of
significant judgments and subjective
assumptions.
-------------------------------------- -------------------------------------- --------------------------------------
The risk Our response
--------------------------------------------------------- ---------------------------------------------------------
Subjective Valuation: Challenging managements' assumptions and inputs:
The preparation of the fair value estimate for the Challenging the directors on key judgments
unquoted investments and related disclosures affecting investee company valuations, such as the
is a significant area of our audit given that it achievement of key milestones or potential
represents a significant portion of the Company's dilution impacts of recent transactions. Our work
total assets and involves the use of significant included consideration of events which occurred
judgments and subjective assumptions. subsequent to the year end up until the date of this
The effect of these matters is that as part of our risk report.
assessment, we determined that the Assessing observable inputs: Where a recent transaction
valuation of unquoted investments has a high degree of has been used as a basis to value
estimation uncertainty, with a potential a holding, we obtained an understanding of the
range of reasonable outcomes greater than our circumstances surrounding the transaction such
materiality for the financial statements as as whether it was considered to be on an arms-length
a whole and possibly many times that amount. basis and suitable as an input into a
valuation.
Methodology choice: In the context of observed industry
best practice and the provisions of
the International Private Equity and Venture Capital
Valuation Guidelines, we challenged the
appropriateness of the valuation basis selected.
Assessing disclosures: Consideration of the
appropriateness, in accordance with relevant accounting
standards, of the disclosures in respect of unquoted
investments and the significant inherent
uncertainty associated with valuing such investments.
--------------------------------------------------------- ---------------------------------------------------------
Our application of materiality and an overview of the scope of
our audit
Materiality for the financial statements as a whole was set at
GBP1,260,000 (2022: GBP1,200,000), determined with reference to a
benchmark of total assets of GBP164 million, of which it represents
approximately 0.8% (2022: 0.8%).
In line with our audit methodology, our procedures on individual
account balances and disclosures were performed to a lower
threshold, performance materiality, so as to reduce to an
acceptable level the risk that individually immaterial
misstatements in individual account balances add up to a material
amount across the financial statements as a whole. Performance
materiality for the Company was set at 65% (2022: 65%) of
materiality for the financial statements as a whole, which equates
to GBP819,000 (2022: GBP780,000). We applied this percentage in our
determination of performance materiality because we did not
identify any factors indicating an elevated level of risk.
We reported to the Audit Committee any corrected or uncorrected
identified misstatements exceeding GBP63,000 (2022: GBP60,000), in
addition to other identified misstatements that warranted reporting
on qualitative grounds.
Our audit of the Company was undertaken to the materiality level
specified above, which has informed our identification of
significant risks of material misstatement and the associated audit
procedures performed in those areas as detailed above.
Going concern
The directors have prepared the financial statements on the
going concern basis as they do not intend to liquidate the Company
or to cease its operations, and as they have concluded that the
Company's financial position means that this is realistic. They
have also concluded that there are no material uncertainties that
could have cast significant doubt over its ability to continue as a
going concern for at least a year from the date of approval of the
financial statements (the "going concern period").
In our evaluation of the directors' conclusions, we considered
the inherent risks to the Company's business model and analysed how
those risks might affect the Company's financial resources or
ability to continue operations over the going concern period. The
risks that we considered most likely to affect the Company's
financial resources or ability to continue operations over this
period were:
-- Availability of capital to meet operating costs and other financial commitments; and
-- The recoverability of financial assets subject to credit risk;
We considered whether these risks could plausibly affect the
liquidity in the going concern period by comparing severe, but
plausible downside scenarios that could arise from these risks
individually and collectively against the level of available
financial resources indicated by the Company's financial
forecasts.
We considered whether the going concern disclosure in note 1(b)
to the financial statements gives a full and accurate description
of the directors' assessment of going concern.
Our conclusions based on this work:
-- we consider that the directors' use of the going concern
basis of accounting in the preparation of the financial statements
is appropriate;
-- we have not identified, and concur with the directors'
assessment that there is not, a material uncertainty related to
events or conditions that, individually or collectively, may cast
significant doubt on the the Company's ability to continue as a
going concern for the going concern period; and
-- we found the going concern disclosure in the notes to the
financial statements to be acceptable.
However, as we cannot predict all future events or conditions
and as subsequent events may result in outcomes that are
inconsistent with judgements that were reasonable at the time they
were made, the above conclusions are not a guarantee that the
Company will continue in operation.
Fraud and breaches of laws and regulations - ability to
detect
Identifying and responding to risks of material misstatement due
to fraud
To identify risks of material misstatement due to fraud ("fraud
risks") we assessed events or conditions that could indicate an
incentive or pressure to commit fraud or provide an opportunity to
commit fraud. Our risk assessment procedures included:
-- enquiring of management as to the Company's policies and
procedures to prevent and detect fraud as well as enquiring whether
management have knowledge of any actual, suspected or alleged
fraud;
-- reading minutes of meetings of those charged with governance; and
-- using analytical procedures to identify any unusual or unexpected relationships.
As required by auditing standards, and taking into account
possible incentives or pressures to misstate performance and our
overall knowledge of the control environment, we perform procedures
to address the risk of management override of controls, in
particular the risk that management may be in a position to make
inappropriate accounting entries, and the risk of bias in
accounting estimates such as valuation of unquoted investments. On
this audit we do not believe there is a fraud risk related to
revenue recognition because the Company's revenue streams are
simple in nature with respect to accounting policy choice, and are
easily verifiable to external data sources or agreements with
little or no requirement for estimation from management. We did not
identify any additional fraud risks.
We performed procedures including:
-- identifying journal entries and other adjustments to test
based on risk criteria and comparing any identified entries to
supporting documentation;
-- incorporating an element of unpredictability in our audit procedures; and
-- those set out in the valuation of unquoted investments key audit matter.
Identifying and responding to risks of material misstatement due
to non-compliance with laws and regulations
We identified areas of laws and regulations that could
reasonably be expected to have a material effect on the financial
statements from our sector experience and through discussion with
management (as required by auditing standards), and from inspection
of the Company's regulatory and legal correspondence, if any, and
discussed with management the policies and procedures regarding
compliance with laws and regulations. As the Company is regulated,
our assessment of risks involved gaining an understanding of the
control environment including the entity's procedures for complying
with regulatory requirements.
Identifying and responding to risks of material misstatement due
to non-compliance with laws and regulations (continued)
The Company is subject to laws and regulations that directly
affect the financial statements including financial reporting
legislation and taxation legislation and we assessed the extent of
compliance with these laws and regulations as part of our
procedures on the related financial statement items.
The Company is subject to other laws and regulations where the
consequences of non-compliance could have a material effect on
amounts or disclosures in the financial statements, for instance
through the imposition of fines or litigation or impacts on the
Company's ability to operate. We identified financial services
regulation as being the area most likely to have such an effect,
recognising the regulated nature of the Company's activities and
its legal form. Auditing standards limit the required audit
procedures to identify non-compliance with these laws and
regulations to enquiry of management and inspection of regulatory
and legal correspondence, if any. Therefore, if a breach of
operational regulations is not disclosed to us or evident from
relevant correspondence, an audit will not detect that breach.
Context of the ability of the audit to detect fraud or breaches
of law or regulation
Owing to the inherent limitations of an audit, there is an
unavoidable risk that we may not have detected some material
misstatements in the financial statements, even though we have
properly planned and performed our audit in accordance with
auditing standards. For example, the further removed non-compliance
with laws and regulations is from the events and transactions
reflected in the financial statements, the less likely the
inherently limited procedures required by auditing standards would
identify it.
In addition, as with any audit, there remains a higher risk of
non-detection of fraud, as this may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of
internal controls. Our audit procedures are designed to detect
material misstatement. We are not responsible for preventing
non-compliance or fraud and cannot be expected to detect
non-compliance with all laws and regulations.
Other information
The directors are responsible for the other information. The
other information comprises the information included in the annual
report but does not include the financial statements and our
auditor's report thereon. Our opinion on the financial statements
does not cover the other information and we do not express an audit
opinion or any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the
audit, or otherwise appears to be materially misstated. If, based
on the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report
that fact. We have nothing to report in this regard.
Respective responsibilities
Directors' responsibilities
As explained more fully in their statement set out on 17, the
directors are responsible for: the preparation of the financial
statements including being satisfied that they give a true and fair
view; such internal control as they determine is necessary to
enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error; assessing the
Company's ability to continue as a going concern, disclosing, as
applicable, matters related to going concern; and using the going
concern basis of accounting unless they either intend to liquidate
the Company or to cease operations, or have no realistic
alternative but to do so.
Auditor's responsibilities
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue our
opinion in an auditor's report. Reasonable assurance is a high
level of assurance, but does not guarantee that an audit conducted
in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in aggregate,
they could reasonably be expected to influence the economic
decisions of users taken on the basis of the financial
statements.
A fuller description of our responsibilities is provided on the
FRC's website at www.frc.org.uk/auditorsresponsibilities .
The purpose of this report and restrictions on its use by
persons other than the Company's members, as a body
This report is made solely to the Company's members, as a body,
in accordance with section 80(C) of the Companies Act 2006. Our
audit work has been undertaken so that we might state to the
Company's members those matters we are required to state to them in
an auditor's report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to
anyone other than the Company and the Company's members, as a body,
for our audit work, for this report, or for the opinions we have
formed.
KPMG Audit LLC
Chartered Accountants
Heritage Court
41 Athol Street
Douglas
Isle of Man IM1 1LA
21 December 2023
Statement of comprehensive income
for the year ended 30 June 2023
2023 2022
Note GBP GBP
Income
Net income from financial instruments at fair value through profit and
loss 3 29,703,324 6,423,869
---------------- ----------------
29,703,324 6,423,869
Operating expenses
Directors' fees 2 (117,709) (85,000)
Other operating costs 4 (1,648,101) (1,753,868)
Foreign exchange (losses)/gains (3,364,673) 6,513,031
---------------- ----------------
Profit from operating activities 5 24,572,841 11,098,032
Other costs
Consulting fee 2 (3,372,672) (4,562,548)
Recoverable / (Irrecoverable) VAT - 1,478,872
---------------- ----------------
Profit after consulting fee 21,200,169 8,014,356
Interest received 1,173,507 344,023
---------------- ----------------
Profit before taxation 22,373,676 8,358,379
Taxation 1(h) - -
---------------- ----------------
Profit for the year 22,373,676 8,358,379
Other comprehensive income - -
---------------- ----------------
Total comprehensive profit for the year 22,373,676 8,358,379
Basic profit per share (pence) 11 2.27 0.95
Diluted profit per share (pence) 11 2.20 0.91
The Directors consider that the Company's activities are
continuing.
The notes on pages 25 to 39 form an integral part of these
financial statements.
Statement of financial position
as at 30 June 2023
2023 2022
Note GBP GBP
Assets
Financial assets at fair value
through profit or loss 7,8 141,773,297 94,813,088
Bank deposits 10,000,000 20,024,175
Trade and other receivables 335,810 102,659
Cash and cash equivalents 18,093,984 31,458,326
---------------- ----------------
Total assets 170,203,091 146,398,248
Equity and liabilities
Capital and reserves
Share capital 6 992 968
Share premium 6 134,481,365 129,855,667
Share reserve 6 1,686,336 4,341,639
Accumulated earnings 32,088,305 9,714,629
---------------- ----------------
168,256,998 143,912,903
Liabilities
Trade and other payables 9 1,946,093 2,485,345
---------------- ----------------
Total liabilities 1,946,093 2,485,345
---------------- ----------------
Total equity and liabilities 170,203,091 146,398,248
The notes on pages 25 to 39 form an integral part of these
financial statements.
These financial statements were approved by the Board of
Directors on 21 December 2023 and were signed on their behalf
by:
Denham Eke
Finance Director
Statement of changes in equity
for the year ended 30 June 2023
Note Share Share Share Accumulated
capital premium reserve earnings Total
GBP GBP GBP GBP GBP
Balance at 30
June 2021 6 799 91,278,407 7,394,360 1,356,250 100,029,816
Total
comprehensive
profit for the
year
Profit for the
year - - - 8,358,379 8,358,379
Transactions
with owners of
the company
Shares issued
during the
year 6 169 39,439,051 (7,394,360) - 32,044,860
Capitalised
share issue
costs 6 - (861,791) - - (861,791)
Recognition of
share reserve 6 - - 4,341,639 - 4,341,639
---------------- ---------------- ---------------- ---------------- ----------------
Balance at 30
June 2022 6 968 129,855,667 4,341,639 9,714,629 143,912,903
Note Share Share Share Accumulated
capital premium reserve earnings Total
GBP GBP GBP GBP GBP
Balance at 30
June 2022 6 968 129,855,667 4,341,639 9,714,629 143,912,903
Total
comprehensive
profit for the
year
Profit for the
year - - - 22,373,676 22,373,676
Transactions
with owners of
the company
Shares issued
during the
year 6 24 4,625,698 (4,341,639) - 284,083
Recognition of
share reserve 6 - - 1,686,336 - 1,686,336
---------------- ---------------- ---------------- ---------------- ----------------
Balance at 30
June 2023 6 992 134,481,365 1,686,336 32,088,305 168,256,998
The notes on pages 25 to 39 form an integral part of these
financial statements.
Statement of cash flows
for the year ended 30 June 2023
2023 2022
Note GBP GBP
Cash flows from operating activities
Operating profit for the year 22,373,676 8,358,379
Purchase of investments 8 (19,542,137) (42,032,410)
Proceeds from sale of investments 8 - 696,456
Interest income (1,173,507) (341,329)
Realised and unrealised gains on investments 3 (29,703,324) (12,362,604)
Unrealised foreign exchange losses on investments 8 2,729,121 -
Consulting fee to be settled in shares 2 1,686,336 2,281,274
-------------- --------------
Operating outflows before changes in working capital (23,629,835) (43,400,234)
Change in trade and other receivables (233,152) 318,395
Change in trade and other payables 9 (539,252) 873,841
-------------- --------------
Net cash used in operating activities (24,402,239) (42,207,998)
-------------- --------------
Cash flows from financing activities
Proceeds from issue of shares 284,082 32,057,951
Share issue commissions paid - (861,791)
Cash interest received 729,639 57,842
-------------- --------------
Net cash from financing activities 1,013,721 31,254,002
-------------- --------------
Cash flows from investing activities
Bank deposits not considered cash and cash equivalents (net movement) 10,024,176 (20,024,175)
-------------- --------------
Net cash from investing activities 10,024,176 (20,024,175)
-------------- --------------
Decrease in cash and cash equivalents (13,364,342) (30,978,171)
Cash and cash equivalents at beginning of year 31,458,326 62,436,497
-------------- --------------
Cash and cash equivalents at the end of year 18,093,984 31,458,326
The notes on pages 25 to 39 form an integral part of these
financial statements.
1 Accounting policies
Agronomics Limited is a Company domiciled in the Isle of Man.
The Company's strategy is to create value for Shareholders through
investing in companies that operate in the nascent industry of
modern foods, which are environmentally friendly alternatives to
the traditional production of meat and plant-based sources.
The principal accounting policies are set out below.
a) Statement of compliance
The financial statements have been prepared in accordance with
International Financial Reporting Standards ("IFRS"). There has
been no material impact on the financial statements of new
standards/interpretations that have come into effect during the
current year.
b) Basis of preparation
The financial statements are prepared under the historical cost
convention except where assets and liabilities are required to be
stated at their fair value.
Use of estimates and judgment
The preparation of financial statements in conformity with IFRS
requires management to make judgements, estimates and assumptions
that affect the application of policies and 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 estimates and underlying assumptions are reviewed on an
on-going basis. Revisions to accounting estimates are recognised in
the period in which the estimate is revised if the revision only
affects that period or in the period of the revision and future
periods if the revision affects both current and future
periods.
Judgements made by the Directors in the application of IFRS,
that have a significant impact on the financial statements and
estimates with a significant risk of material adjustment in the
next financial year relate to valuation of financial assets at fair
value through profit or loss. The determination of fair values for
financial assets for which there is no observable market price
requires judgment as to the selection of valuation techniques as
described in accounting policy 1(d). For financial instruments that
trade infrequently and have little price transparency, fair value
is less objective, and requires varying degrees of judgement and
estimation depending on liquidity, concentration, uncertainty of
market factors, pricing assumptions and other risks affecting the
specific instrument. The portfolio companies are all in the
start-up/development stage and in the biotechnology and
biopharmaceutical sector. By their nature, such companies are
difficult to value, as they have little or no track record
regarding sales and margins and may be subject to continued funding
being available in order to continue in operation. The eventual
outcome may differ materially from the value estimate. See also
note 8 in respect of the valuation of financial instruments.
Going concern
The financial statements have been prepared on a going concern
basis, taking into consideration the level of cash and liquid
investments held by the Company. The Directors have a reasonable
expectation that the Company will have adequate resources for its
continuing existence and projected activities for the foreseeable
future, and for these reasons, continue to adopt the going concern
basis in preparing the financial statements for the year ended 30
June 2023.
Functional and presentation currency
These financial statements are presented in Pound Sterling (GBP)
which is the Company's functional currency and rounded to the
nearest pound.
c) Net income from financial instruments at fair value through profit and loss
Any realised and unrealised gains and losses on investments are
presented within 'net income from financial instruments at fair
value through profit or loss'.
Interest income earned during the period, is accrued on a time
apportionment basis, by reference to the principal outstanding and
the effective rate applicable.
Dividend income is recognised when a security held goes
ex-dividend. Dividends are shown as net cash received, after the
deduction of withholding taxes.
d) Financial instruments
Recognition and initial measurement
The Company recognises financial assets and financial
liabilities at fair value through profit and loss ("FVTPL") on the
trade date, which is the date on which the Company becomes party to
the contractual provisions of the instrument. A financial asset or
financial liability is measured initially at fair value plus, for
an item not at FVTPL, transaction costs that are directly
attributable to its acquisition or issue.
Classification
On initial recognition, the Company classifies financial assets
as measured at amortised cost or 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
-- its contractual terms give rise on specified dates to cash
flows that are solely payment of principal and interest
("SPPI").
All other financial assets of the Company are measured at
FVTPL.
Business model assessment
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 bank deposits. These financial assets are held to
collect contractual cash flow.
Other business model: this includes debt securities, equity
investments both quoted and unquoted. These financial assets are
managed and their performance is evaluated, on a fair value
basis.
Fair value measurement principles
The fair value of investment holdings of listed investments is
based on their quoted market prices at the reporting date on a
recognised exchange or in the case of non-exchange traded
instruments, sourced from a reputable counterparty, without any
deduction for estimated future selling costs. Financial assets are
priced at their closing bid prices, while financial liabilities are
priced at their closing offer prices.
Company assets may, at any time include securities and other
financial instruments or obligations that are thinly traded or for
which no market exists and/or which are restricted as to their
transferability under securities laws.
d) Financial instruments (continued)
Fair value measurement principles (continued)
If a quoted market price is not available on a recognised stock
exchange, or a market is not sufficiently active for the market
price to be considered reliable, or if a price is not available
from a reputable counterparty, fair value of the financial
instruments may be estimated by the Directors using valuation
techniques, including use of recent arm's length market
transactions, reference to the current fair value of another
instrument that is substantially the same, discounted cash flow
techniques, option pricing models or any other valuation technique
that provides a reliable estimate of prices obtained in actual
market transactions.
The Company recognizes transfers between levels of the fair
value hierarchy as at the end of the reporting period during which
the change occurred.
Reclassifications
Financial assets are not reclassified subsequent to their
initial recognition unless the Company were 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.
Impairment
The Company recognises loss allowances for Expected Credit
Losses ("ECLs") 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 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.
Derecognition
The Company derecognises a financial asset when the contractual
rights to the cash flows from the asset expire, or it transfers the
rights to receive the contractual cash flows in a transaction in
which substantially all of the risks and rewards of ownership of
the financial asset are transferred or in which the Company neither
transfers nor retains substantially all of the risks and rewards of
ownership and does not retain control of the financial asset.
On derecognition of a financial asset, the difference between
the carrying amount of the asset (or the carrying amount allocated
to the portion of the asset that is derecognised) and the
consideration received (including any new asset obtained less any
new liability assumed) is recognised in profit or loss. Any
interest in such transferred financial assets that is created or
retained by the Company is recognised as a separate asset or
liability.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call
deposits with maturities of three months or less from the
acquisition date that are subject to an insignificant risk of
changes in fair value.
Trade and other receivables
Trade and other receivables originated by the Company are
initially recognised at fair value and subsequently stated at
amortised cost less impairment losses.
Trade and other payables
Trade and other payables are initially recognised at fair value
less directly attributable transaction costs. Subsequently they are
measured at amortised cost using the effective interest method.
e) Share capital and share premium
Ordinary shares are classified as equity. The ordinary shares of
the Company have a par value of GBP0.000001 each. Excess proceeds
received for the issue of shares has been credited to share
premium. Incremental costs directly attributable to the issue of
ordinary shares are recognised as a deduction from equity, net of
any tax effects.
f) Foreign currencies
Transactions in foreign currencies are translated into the
functional currency at the rate ruling at the date of the
transaction. Monetary assets and liabilities denominated in foreign
currencies are translated into the functional currency at the
exchange rate at the reporting date. Non-monetary assets and
liabilities that are measured at fair value in a foreign exchange
currency are translated into the functional currency at the
exchange rate when the fair
f) Foreign currencies (continued)
value was determined. Non-monetary items that are measured based
on historical cost in a foreign currency are translated at the
exchange rate at the date of the transaction.
Foreign currency differences are generally recognised in profit
or loss and presented as foreign exchange gains / (losses).
g) New standards and interpretations not yet adopted
A number of new standards, amendments to standards and
interpretations are not yet effective for the year, and have not
been applied in preparing these historical financial
statements:
New/revised International Accounting Standards EU Effective date
/ International Financial Reporting Standards (accounting periods
("IAS/IFRS") commencing on or
after)
-------------------------------------------------- -----------------------
Classification of liabilities as current 1 January 2024
or non-current (Amendments to IAS 1)
------------------------------------------------ -----------------------
IFRS 17 Insurance Contracts 1 January 2023
------------------------------------------------ -------------------------
Amendments to IFRS 17 1 January 2023
------------------------------------------------ -------------------------
Disclosure of Accounting Policies (Amendments 1 January 2023
to IAS1 and IFRS Practice Statement 2)
------------------------------------------------ -----------------------
Definition of Accounting Estimate (Amendments 1 January 2023
to IAS 8)
------------------------------------------------ -----------------------
Deferred Tax related Asset and Liabilities 1 January 2023
Arising from a Single Transaction - Amendments
to IAS 12 Income Taxes
------------------------------------------------ -------------------------
Sale or Contribution of Assets between an 1 January 2023
Investor and its Associate or Joint Ventures
(Amendments to FRS 10 and IAS 28)
------------------------------------------------ -------------------------
The Directors do not expect the adoption of the standards and
interpretations to have a material impact on the financial
statements in the period of initial application. There are no other
standards, amendments or interpretations to existing standards that
are not yet effective, that would have a material impact on the
Company's reported results.
There has been no material impact on the Company's financial
statements of new standards or interpretations that have come into
effect during the current reporting period.
h) Taxation
The Company is subject to income tax at a rate of 0% in the Isle
of Man, and accordingly, no tax has been provided for in these
financial statements.
The Company may be subject to withholding taxes in relation to
income from investments, or investment realisation proceeds or
gains, and such amounts will be accounted for as incurred.
i) Segmental reporting
The Directors are of the opinion that the Company is engaged in
a single segment of business,
being investing in companies that operate in the nascent
industry of modern foods, which are environmentally friendly
alternatives to the traditional production of meat and plant-based
sources. Information presented to the Board of Directors for the
purpose of decision making is based on this single segment and in
accordance with IFRS.
j) Investment entity
The Company is an investment entity and measures investments in
its subsidiaries at FVTPL. In determining whether the Company meets
the definition of an investment entity, management considered the
Company structure as a whole. In particular, when assessing the
existence of investment exit strategies and whether the Company or
its subsidiary has more than one investment, management took into
consideration the fact that the subsidiary was formed in order to
hold investments on behalf of the Company. Management concluded
that the Company and the subsidiary each meet the definition of an
investment entity. Consequently, management concluded that the
Company should not consolidate the subsidiary.
k) Comparative information
Where appropriate, figures in the comparative financial year
have been reclassified in order to present them in a manner
consistent with the current financial period.
2 Directors' and consulting fees
The fees of Directors who served during the year ended 30 June
2023 were as follows:
2023 2022
GBP GBP
Richard Reed 40,000 40,000
David Giampaolo 30,000 30,000
Jim Mellon 30,000 15,000
Marisa Drew 17,709 -
-------------- --------------
117,709 85,000
Denham Eke was appointed as a Director on 30 May 2012 and
currently receives no remuneration for providing his services
(refer note 10).
On 6 May 2011, Shellbay Investments Limited ("Shellbay") entered
into a Letter of Appointment with the Company to provide certain
services to Agronomics. In May 2021, following shareholder feedback
and in consultation with the Company's advisers, the terms of this
agreement were altered, on the basis that from May 2021 new
arrangements would be put in place to (i) ensure the terms of
Shellbay's appointment were consistent with market standard terms
for commensurate services; (ii) provide greater transparency and
corporate governance regarding the role of Shellbay; and (iii)
establish a remuneration structure fully aligned with shareholders,
and acceptable to existing and future investors. The effective date
for the updated agreement is 01 July 2020.
Under the updated terms, Shellbay will provide certain services
to Agronomics, including:
- Reviewing prospective asset purchases;
- Procuring and coordinating due diligence in relation to any target approved by the Company;
- Providing appropriate information to the Board in relation to
any proposed acquisition or disposal opportunity;
- Providing transaction support services as requested by the Company;
- Assisting in operating, developing and commercialising any
intellectual property and/or assets of the Company (including by
way of joint venture, licensing agreement or other
partnership);
- Developing new markets and/or territories for assets and/or
intellectual property owned by the Company (including by way of
manufacturing, distribution and/or branding partnerships);
- Supplying the Board with regular reports on the progress of
companies and intellectual property where the Company has an
interest (including any financings);
- Assisting with recruitment of management teams and operational
supply chain partners for relevant products and intellectual
property; and
- The services of Jim Mellon as Executive Director of the Company.
Shellbay shall be entitled to an annual fee equal to the value
of 15% of any increase between the Company's net asset value
("NAV") on a per issued share basis at the start of a reporting
period and 30 June ("Closing NAV Date") each year during the term
of the New Shellbay Agreement, with the first reporting period
being from 1 July 2020 to 30 June 2021, and annually thereafter.
The opening and closing NAV for each period will be based on the
audited financial statements of the Company for the relevant
financial year, with the opening NAV for each reporting period
being the higher of (i) 5.86 pence per share (the highest annual
audited NAV per share since the Company adopted its current
investment policy and reported NAV per share in September 2019)),
and (ii) the highest NAV per share reported at a Closing Date for
the previous reporting periods during the term of the agreement
(establishing a rolling high-watermark for Shellbay to qualify for
such fee). Any increase in NAV per share will then be applied to
the total issued share capital at the end of the relevant period
for the purposes of determining the 15% fee. Any change in NAV per
share that arises from funds raised at a premium or discount to the
existing NAV per share will therefore be considered for the
purposes of calculating Shellbay's fee by reference to the annual
audited accounts (for clarity being an increase in respect of a
premium and a decrease in respect of a discount).
At the election of the Company, the Shellbay fee shall be
payable either in whole or in part by the issue of new shares at a
price equal to the mid-price on the last day of the relevant
Qualifying Period (being the Company's accounting year from 1 July
to 30 June) or grant of nil price warrants over shares; or in cash;
or (with the agreement of Shellbay), in cash-equivalents (such as
shares), and other assets held by the Company.
Shellbay has agreed with the Company that any fee due for the
current reporting period will be settled 50% in cash and 50% in
shares (with shares issued at the mid-market price of Ordinary
Shares at close of markets on the last day of the Qualifying
Period, being 30 June 2023).
During the year, a fee of GBP2,470,600 (30 June 2022:
GBP4,562,548) was accrued for and recorded in profit and loss. The
Shellbay fee is calculated as follows:
Audited net asset value at 30 June 2022 (post GBP143,912,903
Shellbay fee)
Audited total issued shares at 30 June 2022 969,269,715
Audited net asset value per share at 30 June 14.85 pence
2022
Net asset value at 30 June 2023 (pre Shellbay GBP169,943,336
fee)
Total issued shares at 30 June 2023 993,152,034
Net asset value per share at 30 June 2023 17.11 pence
Increase in net asset value per share 2.26 pence
Increase in net asset value subject to Shellbay GBP22,484,488
fee
--------------
15% Shellbay fee based on Net Asset Value GBP3,372,672
per share increase
At the election of Agronomics, the Shellbay fee will be equally
settled by issuing Agronomics shares and cash. Refer to note 6 and
note 9.
3 Net gain/(loss) from financial instruments at fair value through profit and loss
Derived from financial assets held mandatorily at fair value
through profit or loss at initial recognition:
2023 2022
GBP GBP
Realised gains on sale of investments - 440,322
Unrealised gains on investments 33,585,510 9,655,460
Unrealised losses on investments (3,882,186) (3,671,913)
-------------- --------------
Net unrealised gains on investments 29,703,324 5,983,547
Net income from financial instruments at fair value through profit and loss 29,703,324 6,423,869
4 Other operating costs
2023 2022
GBP GBP
Auditors' fees 62,000 81,149
Marketing 148,286 141,083
Professional fees 542,719 1,031,973
Sundry expenses 895,096 499,663
-------------- --------------
1,648,101 1,753,868
The Company has no employees.
5 Profit/(loss) from operating activities
Profit/(loss) from operating activities is stated after
charging:
2023 2022
GBP GBP
Auditors' fees 62,000 81,149
Directors' fees 117,709 85,000
6 Share capital, share premium and share reserve
Each share in the Company confers upon the shareholder:
-- the right to one vote at a meeting of the shareholders or on any resolution of shareholders;
-- the right to an equal share in any dividend paid by the Company, and
-- the right to an equal share in the distribution of the
surplus assets of the Company on its liquidation.
The Company may by resolution of Directors redeem, purchase or
otherwise acquire all or any of the shares in the Company subject
to regulations set out in the Company's Articles of
Association.
2023 2022
GBP GBP
Authorised
2,000,000,000 Ordinary shares
of GBP0.000001 2,000 2,000
No. of Share Share Share
Shares Capital Premium Reserve
GBP GBP GBP
Issued
Balance at 30 June 2021 799,606,383 799 91,278,407 7,394,360
Issued during the year for cash 139,171,126 139 32,044,721 -
Issued during the year to settle share reserve 30,492,206 30 7,394,330 (7,394,360)
Recognition of share reserve - - - 4,341,639
Share issue costs capitalised - - (861,791) -
-------------- -------------- -------------- --------------
Balance at 30 June 2022 969,269,715 968 129,855,667 4,341,639
Issued during the year for cash 947,405 1 284,059 -
Issued during the year to settle share reserve 22,934,914 23 4,341,639 (4,341,639)
Recognition of share reserve - - - 1,686,336
-------------- -------------- -------------- --------------
Balance at 30 June 2023 993,152,034 992 134,481,365 1,686,336
Capital management
The Company manages its capital to maximise the return to
shareholders through the optimisation of equity. The capital
structure of the Company as at 30 June 2023 consists of equity
attributable to equity holders of the Company, comprising issued
capital, share premium and accumulated earnings as disclosed.
The Company manages its capital structure and makes adjustments
to it in light of economic conditions and the strategy approved by
shareholders. To maintain or adjust the capital structure, the
Company may make dividend payments to shareholders, return capital
to shareholders or issue new shares and release the share premium
account. No changes were made in the objectives, policies or
processes during the year under review.
Warrants
As part of the fundraise completed during June 2021, the Company
issued warrants attached to the fundraising shares on a 1-for-1
basis, and as such, 297,727,274 warrants were issued to investors
who participated in the fundraise. The warrants are exercisable
quarterly over a period of two years, at a price of 28.5 pence per
warrant. The warrants in issue at 30 June 2023 have no dilutive
effect on basic earnings per share as the exercise price exceeds
the quoted share price.
As part of the fundraise completed during December 2021, the
Company issued warrants attached to the fundraising shares on a
1-for-1 basis, and as such, 138,368,193 warrants were issued to
investors who participated in the fundraise. The warrants are
exercisable quarterly over a period of two years, at a price of 30
pence per warrant. The warrants in issue at 30 June 2023 have no
dilutive effect on basic earnings per share as the exercise price
exceeds the quoted share price.
Reconciliation of warrants in issue
2023 2022
Number Number
Balance at 1 July 435,292,534 297,727,274
Issued during the year - 138,368,193
Exercised during the year (947,405) (802,933)
-------------- --------------
Balance at 30 June 434,345,129 435,292,534
Consulting fee due to Shellbay
As discussed in note 2, a consulting fee due to Shellbay of
GBP3,372,672 has been recognised (2022: GBP4,562,548). Shellbay has
agreed with the Company that any fee due for the current reporting
period will be settled 50% in cash and 50% in shares (with shares
issued at the mid-market price of Ordinary Shares at close of
markets on the last day of the Qualifying Period, being 30 June
2023). As a result, 16,253,847 new ordinary shares (2022:
14,257,963 new ordinary shares) will be issued to Shellbay at a
price of 10.375 pence per share. A Share Reserve has been
recognised relating to these shares to be issued. The shares to be
issued to Shellbay have a dilutive effect on basic earnings per
share. Refer to Note 11.
7 Financial assets at fair value through profit or loss
During 2020, the Company established a wholly owned subsidiary
entity, Agronomics Investment Holdings Limited ("the Subsidiary" or
"AIHL"), which holds the majority of the portfolio of unquoted
investments. Unquoted investments were transferred by the Company
into AIHL at their respective carrying amounts. The investment in
subsidiary is stated at fair value through profit or loss in
accordance with the IFRS 10 Investment Entity Consolidation
Exception. The fair value of the investment in subsidiary is based
on the year-end net asset value of the subsidiary. Additions and
disposals regarding the investment in subsidiary are recognised on
trade date.
2023 2022
GBP GBP
Quoted 177,330 250,691
Unquoted 7,417,071 6,795,650
Investment in subsidiary 134,178,896 87,766,747
-------------- --------------
141,773,297 94,813,088
The composition of the investments held, both directly and
indirectly through the Subsidiary in the underlying portfolio, is
as follows:
2023 2022
GBP GBP
Equities 132,664,299 84,942,939
Convertible loan notes and SAFEs* 9,108,998 9,870,149
-------------- --------------
141,773,297 94,813,088
* A SAFE is a Simple Agreement for Future Equity. SAFE
Agreements have similar characteristics to Convertible Loans and
are designed to provide an early investor with an "edge" ahead of a
larger planned funding. The edge is typically conversion of funds
advanced for new equity at a discount to the subsequent raise.
These financial instruments were mandatorily held as at fair
value through profit or loss on initial recognition. See note 8 -
Fair value of financial instruments section - regarding the
valuation of investments.
8 Financial instruments
Financial Risk Management
The Company has risk management policies that systematically
view the risks that could prevent it from achieving its objectives.
These policies are intended to manage risks identified in such a
way that opportunities to deliver the Company's objectives are
achieved. The Company's risk management takes place in the context
of day-to-day operations and normal business processes such as
strategic and business planning. The Directors have identified each
risk and are responsible for coordinating and continuously
improving risk strategies, processes and measures in accordance
with the Company's established business objectives.
The Company's principal financial instruments consist of
investments, cash, receivables and payables arising from its
operations and activities. The main risks arising from the
Company's financial instruments and the policies for managing each
of these risks are summarised below.
Credit Risk
Credit risk is the risk of loss associated with the
counterparty's inability to fulfil its obligations. The Company's
credit risk is primarily attributable to receivables, cash
balances, and bank deposits, and convertible loan investments, with
the maximum exposure being the reported balance in the statement of
financial position. The Company has a nominal level of debtors and
as such the Company believes that the credit risk to these is
minimal. The Company holds available cash and bank deposits with
licensed banks and financial institutions. The Company considers
the credit ratings of banks in which it holds funds in order to
reduce exposure to credit risk. Cash balances are available on
demand, with bank deposits having varying maturities up to 6
months. Convertible loan investments held inherently carry a higher
credit risk, due to the early- stage nature of relevant investee
company.
The carrying amount of financial assets represents the maximum
credit exposure. The maximum exposure to credit risk at the
reporting date was:
Carrying amount Carrying amount
2023 2022
GBP GBP
Bank deposits 10,000,000 20,024,175
Cash and cash equivalents 18,093,984 31,458,326
Trade and other receivables 335,810 56,268
Convertible loan investments 7,357,367 6,735,946
-------------- --------------
35,787,161 58,274,715
All of cash and cash equivalent and cash deposit balances are
held in A+ credit rated financial institutions. The Company
considers that ECL exposures have low credit risk based on the
external credit ratings of the financial institutions.
Market price risk
Market price risk is the risk that the market price will
fluctuate due to macro-economic issues such as changes in market
factors specific to that security, market interest rates and
foreign exchange rates.
The Company is exposed to significant market price risks as
financial instruments recognised directly by the Company and
indirectly by the Subsidiary are linked to market price
volatility.
A 10% increase/decrease in market value of investments held by
the Company and its subsidiary would increase/decrease equity and
profit by GBP13,575,948 (2022: GBP9,481,309).
Liquidity risk
The Company is exposed to liquidity risk to the extent that it
holds investments that it may not be able to sell quickly at close
to fair value.
The risk is managed by the Company by means of cash flow
planning to ensure that future cash requirements are anticipated
and, where financial instruments have to be sold to meet these
requirements, the process is carried out in a controlled manner
intended to minimise the liquidity risk involved.
The residual undiscounted contractual maturities of financial
liabilities and financial assets are as follows:
30 June 2023 Less than 1 1-3 months 3 months to 1 1-5 years Over 5 years No stated Total
month GBP year GBP GBP maturity
GBP GBP GBP
Financial
liabilities
Trade and
other
payables 202,269 - 1,686,336 - - - 1,888,605
--------------- ----------- -------------- ---------- ------------- -------------- ------------
30 June 2022
Trade and
other
payables 204,071 - 2,281,274 - - - 2,485,345
--------------- ----------- -------------- ---------- ------------- -------------- ------------
30 June 2023
Financial
assets
Financial
assets
at fair value
through
profit or
loss - - - - - 134,415,930 134,415,930
Bank deposits - 10,000,000 - - - - 10,000,000
Cash and cash
equivalents 18,093,984 - - - - - 18,093,984
Trade and
other
receivables 335,810 - - - - - 335,810
Convertible
loan
investments - - 7,357,367 - - - 7,357,367
--------------- ----------- -------------- ---------- ------------- -------------- ------------
18,429,794 10,000,000 7,357,367 - - 134,415,930 170,203,091
--------------- ----------- -------------- ---------- ------------- -------------- ------------
30 June 2022
Financial
assets
at fair value
through
profit or
loss - - - - - 88,077,142 88,077,142
Bank deposits 10,024,175 - 10,000,000 - - - 20,024,175
Cash and cash
equivalents 23,458,326 8,000,000 - - - - 31,458,326
Trade and
other
receivables 56,268 - - - - - 56,268
Convertible
loan
investments - - - 6,735,946 - - 6,735,946
--------------- ----------- -------------- ---------- ------------- -------------- ------------
33,538,769 8,000,000 10,000,000 6,735,946 - 88,077,142 146,351,857
--------------- ----------- -------------- ---------- ------------- -------------- ------------
Interest rate risk
A significant share of the Company's assets is comprised of cash
held at banks. As a result, the Company is subject to risk due to
fluctuations in the prevailing level of market interest rates.
However, income earned from bank interest is not considered
material to the Company's performance or financial position.
The Company holds investments in convertible loan notes ("CLN"),
which attract interest income. The rates of interest are fixed for
each CLN investment held, which results in a reduced interest rate
risk.
Fair values of financial assets and liabilities
At 30 June 2023, the carrying amounts of cash resources, trade
and other receivables, and trade and other payables approximate
fair value due to their short-term maturities.
Foreign currency risk
The Company is exposed to foreign currency risk on fluctuations
related to financial assets and liabilities held directly itself
and indirectly via its subsidiary that are denominated in a number
of currencies. The Investment in Subsidiary is held in Sterling.
The analysis below reflects the underlying currency exposure in the
Subsidiary's portfolio.
GBP equivalents as at 30 June 2023
Financial assets at Cash at Total by currency
fair value through bank
profit and loss
GBP GBP GBP
USD 83,763,337 2,775,217 86,538,554
EUR 38,140,843 - 38,140,843
AUD 9,214,471 2,057 9,216,528
-------------- -------------- --------------
131,118,651 2,777,274 133,895,925
GBP equivalents as at 30 June 2022
Financial assets at Cash at Total by currency
fair value through bank
profit and loss
GBP GBP GBP
USD 65,031,554 81,983 65,113,537
EUR 28,898,815 - 28,898,815
-------------- -------------- --------------
93,930,369 81,983 94,012,352
The following significant exchange rates applied during the
year:
Average Average
rate for rate for
active active year
year 2022
2023
USD 1.20600 1.33208
EUR 1.14918 1.18085
AUD 1.79225 -
Year-end Year-end
rate rate
2023 2022
USD 1.26281 1.21780
EUR 1.16525 1.16170
AUD 1.88122 -
Sensitivity analysis
A 10% percent strengthening of Sterling against the relevant
currencies above at 30 June 2023, and 10% at 30 June 2022, would
have decreased equity and profit for the year by the amounts shown
below. The analysis assumes that all other variables, in particular
interest rates, remain constant.
2023 Equity and Profit or loss
GBP
USD 8,653,855
EUR 3,814,084
AUD 921,653
2022 Equity and Profit or loss
GBP
USD 6,511,354
EUR 2,889,882
A 10% percent weakening of Sterling against the relevant
currencies above at 30 June 2023, and 10% at 30 June 2022, would
have the equal but opposite effect on the basis that all other
variables, in particular interest rates, remain constant.
Fair value of financial instruments
The fair values of financial assets and financial liabilities
that are traded in an active market are based on quoted market
prices. For all other financial instruments, the Company and its
subsidiary determine fair values using other valuation techniques
in compliance with IFRS9: Financial Instruments, IFRS13: Fair Value
Measurement, and based on the International Private Equity and
Venture Capital Valuation Guidelines ("IPEV").
For financial instruments that trade infrequently and have
little price transparency, fair value is less objective, and
requires varying degrees of judgement depending on liquidity,
uncertainty of market factors, pricing assumptions and other risks
affecting the specific instrument.
The Company measures fair values using the following fair value
hierarchy that reflects the significance of the inputs used in
making the measurements:
-- Level 1: Inputs that are quoted market prices (unadjusted) in
active markets for identical instruments;
-- Level 2: Inputs other than quoted prices included within
Level 1 that are observable either directly (i.e. as prices) or
indirectly (i.e. derived from prices). This category includes
instruments valued using; quoted market prices in active markets
for similar instruments; quoted prices for identical or similar
instruments in markets that are considered less than active; or
other valuation techniques in which all significant inputs are
directly or indirectly observable from market data;
-- Level 3: Inputs that are unobservable. This category includes
all instruments for which the valuation technique includes inputs
not based on observable data and the unobservable inputs have a
significant effect on the instrument's valuation. This category
includes instruments that are valued based on quoted prices for
similar instruments but for which significant unobservable
adjustments or assumptions are required to reflect differences
between the instruments.
Various valuation techniques may be applied in determining the
fair value of investments held as Level 3 in the fair value
hierarchy. The objective of valuation techniques is to arrive at a
fair value measurement that reflects the price that would be
received to sell the asset or paid to transfer the liability in an
orderly transaction between market participants at the measurement
date.
Fair value hierarchy measurement at 30 June 2023
Investments in securities at fair value:
Quoted Significant Significant
prices other unobservable
In active observable Inputs
markets inputs
Total for identical
assets (Level 2) (Level 3)
(Level
1)
Investments
Quoted 177,330 177,330 - -
Unquoted 7,417,071 - - 7,417,071
Investment in subsidiary 134,178,896 - - 134,178,896
-------------- -------------- -------------- --------------
141,773,297 177,330 - 141,595,967
The investment in subsidiary held by the Company is classified
as level 3 in the fair value hierarchy - being based on the net
asset value of the Subsidiary. All the underlying investments held
by the Subsidiary are classed as level 3 investments.
Reconciliation of Level 3 investments:
Opening balance at 1 July
2022 94,562,397
Purchases 19,542,137
Unrealised foreign currency
loss (2,729,121)
Unrealised fair value gain 33,556,823
Unrealised fair value loss (3,780,138)
Accrued interest on loan
note investments 443,869
--------------
Closing balance at 30 June
2023 141,595,967
Fair value hierarchy measurement at 30 June 2022
Investments in securities at fair value:
Quoted Significant Significant
prices other unobservable
In active observable Inputs
markets inputs
Total for identical
assets (Level 2) (Level 3)
(Level
1)
Investments
Quoted 250,691 250,691 - -
Unquoted 6,795,650 - - 6,795,650
Investment in subsidiary 87,766,747 87,766,747
-------------- -------------- -------------- --------------
94,813,088 250,691 - 94,562,397
The investment in subsidiary held by the Company is classified
as level 3 in the fair value hierarchy - being based on the net
asset value of the Subsidiary. All the underlying listed equity
investments held by the Subsidiary are classed as level 3
investments
Reconciliation of Level 3 investments:
Opening balance at 1 July
2021 38,126,352
Purchases 44,092,779
Disposals (256,133)
Unrealised foreign currency
gain 5,940,553
Unrealised fair value gain 9,655,460
Unrealised fair value loss (3,280,099)
Accrued interest on loan
note investments 283,485
--------------
Closing balance at 30 June
2022 94,562,397
Valuation technique
In the absence of observable prices or suitable unobservable
model inputs being available and, given level 3 portfolio companies
are in the start-up/development stage and in the biotechnology/
biopharmaceutical sector, the Board believes that a recent share
transaction cost represents the best available estimate of fair
value. The price of a recent investment valuation technique,
calibrated using both financial and technological milestones, is
commonly used in a seed, start-up or early-stage situations. Where
applicable, the Company's Level 3 investments are valued at the
price of each funding round of the respective companies entered
into with their shareholders, adjusted where necessary should the
Directors deem any adjustment is needed in order to determine the
fair value. The fair value of the relevant investee may also be
adjusted based on its performance against predetermined milestones.
The Directors deem all investments to be held at fair value. The
price of a recent transaction is deemed most appropriate for the
Company's and Subsidiary's unquoted investments. Although the Board
believes that its estimates of fair value are appropriate, the use
of different methodologies or assumptions could lead to different
measurements of fair value. The Board continues to monitor the
performance of the investee entities and the underlying information
available in order to assess whether the valuation technique
adopted and the fair value hierarchy remain appropriate.
No reasonably possible alternative assumptions
IFRS 13 requires disclosure, by class of financial instrument,
if the effect of changing one or more inputs to reasonably possible
alternative assumptions would result in a significant change to the
fair value measurement. However, where fair value is determined
with reference to the price of a recent transaction in the equity
shares of the unquoted company, such a sensitivity analysis is not
relevant. As such the Directors consider there are no reasonably
possible alternative assumptions in respect of the level 3
investments held at year end.
The valuation approach adopted for the years ended 30 June 2023
and 30 June 2022 is consistent.
9 Trade and other payables
2023 2022
GBP GBP
Provision for audit fee 57,488 55,000
Trade creditors 202,269 149,071
Provision for Shellbay fee (note
2) 1,686,336 2,281,274
------------ ------------
1,946,093 2,485,345
As disclosed in Note 2, the Shellbay fee recognised during the
year will be settled partly in cash totalling GBP1,686,336 (2022:
GBP2,281,274).
10 Related party transactions
Under an agreement dated 1 December 2011, Burnbrae Limited, a
Company for which Jim Mellon is the ultimate beneficial owner and
Denham Eke is a Director, provide certain services, principally
accounting and administration, to the Company. This agreement may
be terminated by either party on three months' notice. The charge
for services provided in the year in accordance with the contract
was GBP30,000 (2022: GBP31,500) of which GBP3,000 was outstanding
as at the year-end (2022: GBP3,000).
Under an updated agreement dated May 2021, Shellbay Investments
Limited, a Company related to both Jim Mellon and Denham Eke,
provides certain services to the Company (see note 2). The charge
for services provided in the year was GBP 3,372,672 (2022: GBP
4,562,548 ), with the Company opting to settle the fee 50/50 in
cash and Agronomics shares.
In accordance with the published investing policy, Jim Mellon
holds personal interests both directly and indirectly in the
following investee companies: AgeX Therapeutics Inc, Endurance RP,
Portage Biotech Inc, SalvaRX Group PLC, Cytox Limited, Simply Foods
Inc, Shiok Meats Pte. Ltd, Good Dog Food Ltd and Bond Pets LLC.
Edgewater Associates Limited ("Edgewater")
During the year, Directors and Officers insurance was obtained
through Edgewater, which is a 100% subsidiary of Manx Financial
Group ("MFG"). Jim Mellon and Denham Eke are Directors of MFG and
Denham Eke is a Director of Edgewater.
The annual policy premium was GBP42,000 (2022: GBP19,500), and
GBPnil was outstanding as at year-end (2022: GBPnil).
11 Basic and diluted earnings per share
The calculation of the basic earnings per share is based on the
earnings attributable to ordinary shareholders divided by the
weighted average number of shares in issue during the year.
The calculation of diluted earnings per share is based on the
basic earnings per share, adjusted to allow for the issue of
shares, on the assumed conversion of all dilutive share
options.
2023 2022
GBP GBP
---------------------------------------------------- ------------- -----------
Profit for the year 22,373,676 8,358,379
---------------------------------------------------- ------------- -----------
No. No.
---------------------------------------------------- ------------- -----------
Weighted average number of ordinary shares in issue 984,863,129 877,490,411
Dilutive effect of shares to be issued (Note 6) 32,507,695 37,192,877
---------------------------------------------------- ------------- -----------
Diluted number of ordinary shares 1,017,370,824 914,683,288
---------------------------------------------------- ------------- -----------
Basic earnings per share (pence) 2.27 0.95
---------------------------------------------------- ------------- -----------
Diluted earnings per share (pence) 2.20 0.91
---------------------------------------------------- ------------- -----------
12 The Subsidiary
The Company has one wholly owned subsidiary entity, Agronomics
Investment Holdings Limited, which is incorporated in the British
Virgin Islands. The Subsidiary was incorporated on 8 July 2020
under the provisions of the BVI Business Companies Act, 2004, as a
limited liability company. The principal activity of the Subsidiary
is holding investments on behalf of the Company.
13 Subsequent events
Post yearend, the Company received warrant exercise notices and
issued a total of 2,210 Ordinary Shares, for cash proceeds of
GBP659.
On 22 September 2023, the Company announced that it will execute
an on-market Share buyback programme for an aggregate amount of up
to GBP3 million. The term of the buyback programme shall be 6
months, commencing on 2 October 2023. To date, no buybacks have
been executed as the Company remains in a closed period under AIM
rules.
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END
FR UUVNROUUUUAA
(END) Dow Jones Newswires
December 27, 2023 02:00 ET (07:00 GMT)
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